[Performance Announcement Summary](index=1&type=section&id=%E6%91%98%E8%A6%81) Meituan's Q2 2025 revenue grew 11.7% to RMB 91.8 billion, but operating profit significantly declined by 98.0% due to intense competition in core local commerce and expanded losses from new business overseas expansion [Financial Summary](index=1&type=section&id=%E8%B2%A1%E5%8B%99%E6%A6%82%E8%A6%81) Meituan's Q2 2025 revenue grew 11.7% to RMB 91.8 billion, but operating profit plummeted 98.0% to RMB 226 million due to intensified competition and new business expansion losses, with adjusted EBITDA and net profit also significantly declining Q2 2025 Key Financial Data (YoY) | Indicator | June 30, 2025 (RMB thousands) | June 30, 2024 (RMB thousands) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 91,840,480 | 82,251,077 | 11.7% | | Operating Profit | 226,350 | 11,256,889 | (98.0%) | | Profit for the Period | 365,296 | 11,352,338 | (96.8%) | | Adjusted EBITDA | 2,781,961 | 14,997,268 | (81.5%) | | Adjusted Net Profit | 1,493,035 | 13,606,256 | (89.0%) | H1 2025 Key Financial Data (YoY) | Indicator | June 30, 2025 (RMB thousands) | June 30, 2024 (RMB thousands) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 178,397,606 | 155,526,961 | 14.7% | | Operating Profit | 10,792,460 | 16,466,281 | (34.5%) | | Profit for the Period | 10,422,176 | 16,721,317 | (37.7%) | | Adjusted EBITDA | 15,083,647 | 23,067,611 | (34.6%) | | Adjusted Net Profit | 12,441,539 | 21,094,650 | (41.0%) | - As of June 30, 2025, the company held **RMB 101.7 billion** in cash and cash equivalents and **RMB 69.4 billion** in short-term investments[13](index=13&type=chunk) [Business Summary](index=6&type=section&id=%E6%9C%AC%E5%85%AC%E5%8F%B8%E6%A5%AD%E5%8B%99%E6%A6%82%E8%A6%81) Core local commerce revenue grew 7.7% but operating profit fell 75.6% due to intense competition, while new business revenue rose 22.8% with expanded losses from overseas expansion, as the company innovates supply-side, enhances rider welfare, upgrades flash purchase, and leverages AI for in-store services - Core local commerce revenue increased by **7.7%** to **RMB 65.3 billion**, but operating profit decreased by **75.6%** to **RMB 3.7 billion**, with operating margin falling **19.4 percentage points** to **5.7%**, primarily due to irrational competition[14](index=14&type=chunk) - New initiatives revenue grew by **22.8%** to **RMB 26.5 billion**, but operating loss expanded by **43.1%** to **RMB 1.9 billion**, mainly due to accelerated overseas expansion[20](index=20&type=chunk) - The company's strategy focuses on "Retail + Tech," enhancing operational efficiency and empowering merchants through innovative models like AI operating assistants, brand satellite stores, and flash warehouses, while continuously improving rider welfare and consumer experience[15](index=15&type=chunk)[16](index=16&type=chunk)[17](index=17&type=chunk)[18](index=18&type=chunk)[19](index=19&type=chunk)[21](index=21&type=chunk) [Q2 2025 vs Q2 2024 Comparison](index=9&type=section&id=2025%E5%B9%B4%E7%AC%AC%E4%BA%8C%E5%AD%A3%E5%BA%A6%E8%88%872024%E5%B9%B4%E7%AC%AC%E4%BA%8C%E5%AD%A3%E5%BA%A6%E7%9A%84%E6%AF%94%E8%BC%83) This section compares Meituan's financial performance in Q2 2025 against Q2 2024, detailing changes in revenue, costs, operating profit, and net profit [Revenue](index=10&type=section&id=%E6%94%B6%E5%85%A5) Q2 2025 total revenue increased by 11.7% to RMB 91.8 billion, with core local commerce revenue up 7.7% despite increased subsidies, and new business revenue up 22.8% driven by grocery retail and overseas expansion Q2 2025 Revenue by Segment and Type (YoY) | Revenue Type | Core Local Commerce (2025) (RMB thousands) | New Initiatives (2025) (RMB thousands) | Total (2025) (RMB thousands) | Core Local Commerce (2024) (RMB thousands) | New Initiatives (2024) (RMB thousands) | Total (2024) (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Delivery Services | 23,655,555 | – | 23,655,555 | 23,021,272 | – | 23,021,272 | | Commissions | 24,950,978 | 1,520,537 | 26,471,515 | 22,108,369 | 716,909 | 22,825,278 | | Online Marketing Services | 13,547,279 | 102,478 | 13,649,757 | 12,262,733 | 97,115 | 12,359,848 | | Other Services and Sales | 3,193,471 | 24,870,182 | 28,063,653 | 3,289,484 | 20,755,195 | 24,044,679 | | **Total Revenue** | **65,347,283** | **26,493,197** | **91,840,480** | **60,681,858** | **21,569,219** | **82,251,077** | - Core local commerce revenue increased by **7.7%**, primarily driven by increased transaction volume, but delivery service revenue growth was limited by significantly increased subsidies[26](index=26&type=chunk) - New initiatives revenue increased by **22.8%**, primarily benefiting from grocery retail business growth and overseas business development[26](index=26&type=chunk) [Costs and Expenses](index=11&type=section&id=%E6%88%90%E6%9C%AC%E5%8F%8A%E9%96%8B%E6%94%AF) In Q2 2025, cost of revenue and sales & marketing expenses significantly increased by 27.0% and 51.8% respectively, driven by higher rider subsidies, business expansion, and intensified market competition, while R&D expenses rose 17.2% due to increased AI investment Q2 2025 Cost and Expense Details (YoY) | Cost and Expense | June 30, 2025 (RMB thousands) | % of Revenue (2025) | June 30, 2024 (RMB thousands) | % of Revenue (2024) | | :--- | :--- | :--- | :--- | :--- | | Cost of Revenue | 61,426,477 | 66.9% | 48,361,233 | 58.8% | | Sales and Marketing Expenses | 22,518,913 | 24.5% | 14,832,448 | 18.0% | | Research and Development Expenses | 6,260,087 | 6.8% | 5,339,680 | 6.5% | | General and Administrative Expenses | 2,678,950 | 2.9% | 2,694,931 | 3.3% | - Cost of revenue increased by **27.0%**, rising **8.1 percentage points** to **66.9%** of revenue, primarily due to increased instant delivery transactions, higher rider subsidies, and expansion in grocery retail and overseas businesses[29](index=29&type=chunk) - Sales and marketing expenses increased by **51.8%**, rising **6.5 percentage points** to **24.5%** of revenue, mainly due to increased promotion, advertising, and user incentive expenses driven by intense competition in food delivery and instant retail businesses[30](index=30&type=chunk) - Research and development expenses increased by **17.2%** to **RMB 6.3 billion**, primarily due to increased company-level investment in AI[31](index=31&type=chunk) [Operating Profit](index=13&type=section&id=%E7%BB%8F%E8%90%A5%E6%BA%A2%E5%88%A9) Q2 2025 operating profit significantly decreased by 98.0% to RMB 226 million, with operating margin falling to 0.2%, driven by a 75.6% decline in core local commerce profit due to lower gross margin and increased user incentives, and a 43.1% expansion in new business losses from overseas costs Q2 2025 Operating Profit/(Loss) by Segment (YoY) | Segment | June 30, 2025 (RMB thousands) | % of Revenue (2025) | June 30, 2024 (RMB thousands) | % of Revenue (2024) | | :--- | :--- | :--- | :--- | :--- | | Core Local Commerce | 3,721,130 | 5.7% | 15,233,585 | 25.1% | | New Initiatives | (1,881,318) | (7.1%) | (1,314,359) | (6.1%) | | Unallocated Items | (1,613,462) | Not Applicable | (2,662,337) | Not Applicable | | **Total Operating Profit** | **226,350** | **0.2%** | **11,256,889** | **13.7%** | - Core local commerce operating profit decreased by **75.6%**, with operating margin falling **19.4 percentage points** to **5.7%**, primarily due to lower gross margin and increased transaction user incentives and promotion expenses to enhance user stickiness and consolidate market position[38](index=38&type=chunk) - New initiatives operating loss increased by **43.1%**, with operating loss margin rising **1.0 percentage point** to **7.1%**, primarily due to increased costs related to overseas operations[38](index=38&type=chunk) [Profit for the Period](index=14&type=section&id=%E6%9C%9F%E5%85%A7%E6%BA%A2%E5%88%A9) Q2 2025 profit for the period was RMB 365 million, a significant decrease from RMB 11.4 billion in Q2 2024, primarily due to a substantial reduction in operating profit, lower share of profits from equity-accounted investments, and reduced income tax expense - Profit for the period was **RMB 365 million**, compared to **RMB 11.4 billion** in the same period of 2024, primarily impacted by a significant decrease in operating profit[41](index=41&type=chunk) - Share of profits from investments accounted for using the equity method decreased from **RMB 341 million** to **RMB 89.2 million**, reflecting fluctuations in the financial performance of investees[39](index=39&type=chunk) - Income tax expense decreased from **RMB 305 million** to **RMB 28.4 million**, primarily due to profit fluctuations in certain entities[40](index=40&type=chunk) [Q2 2025 vs Q1 2025 Comparison](index=15&type=section&id=2025%E5%B9%B4%E7%AC%AC%E4%BA%8C%E5%AD%A3%E5%BA%A6%E8%88%872025%E5%B9%B4%E7%AC%AC%E4%B8%80%E5%AD%A3%E5%BA%A6%E7%9A%84%E6%AF%94%E8%BC%83) This section compares Meituan's financial performance in Q2 2025 against Q1 2025, detailing changes in revenue, costs, operating profit, and net profit [Revenue](index=16&type=section&id=%E6%94%B6%E5%85%A5_QoQ) Q2 2025 total revenue increased by 6.1% quarter-over-quarter to RMB 91.8 billion, with core local commerce revenue up 1.6% despite increased subsidies, and new business revenue up 19.2% driven by grocery retail, overseas expansion, and seasonal factors Q2 2025 Revenue by Segment and Type (QoQ) | Revenue Type | Core Local Commerce (Q2 2025) (RMB thousands) | New Initiatives (Q2 2025) (RMB thousands) | Total (Q2 2025) (RMB thousands) | Core Local Commerce (Q1 2025) (RMB thousands) | New Initiatives (Q1 2025) (RMB thousands) | Total (Q1 2025) (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Delivery Services | 23,655,555 | – | 23,655,555 | 25,722,683 | – | 25,722,683 | | Commissions | 24,950,978 | 1,520,537 | 26,471,515 | 24,051,420 | 1,155,584 | 25,207,004 | | Online Marketing Services | 13,547,279 | 102,478 | 13,649,757 | 11,862,473 | 84,548 | 11,947,021 | | Other Services and Sales | 3,193,471 | 24,870,182 | 28,063,653 | 2,688,138 | 20,992,280 | 23,680,418 | | **Total Revenue** | **65,347,283** | **26,493,197** | **91,840,480** | **64,324,714** | **22,232,412** | **86,557,126** | - Core local commerce revenue increased by **1.6%** quarter-over-quarter, primarily due to increased transaction volume, but offset by increased subsidies to counter intense competition[46](index=46&type=chunk) - New initiatives revenue increased by **19.2%** quarter-over-quarter, primarily due to revenue growth in grocery retail and overseas businesses, as well as seasonal factors for certain new initiatives[46](index=46&type=chunk) [Costs and Expenses](index=17&type=section&id=%E6%88%90%E6%9C%AC%E5%8F%8A%E9%96%8B%E6%94%AF_QoQ) In Q2 2025, cost of revenue and sales & marketing expenses increased quarter-over-quarter by 13.5% and 44.8% respectively, driven by higher rider subsidies, grocery retail expansion, and increased promotion expenses due to market competition, while R&D expenses rose 8.5% due to AI investment and employee compensation Q2 2025 Cost and Expense Details (QoQ) | Cost and Expense | June 30, 2025 (RMB thousands) | % of Revenue (2025) | March 31, 2025 (RMB thousands) | % of Revenue (2025) | | :--- | :--- | :--- | :--- | :--- | | Cost of Revenue | 61,426,477 | 66.9% | 54,143,437 | 62.6% | | Sales and Marketing Expenses | 22,518,913 | 24.5% | 15,550,016 | 18.0% | | Research and Development Expenses | 6,260,087 | 6.8% | 5,772,030 | 6.7% | | General and Administrative Expenses | 2,678,950 | 2.9% | 2,627,017 | 3.0% | - Cost of revenue increased by **13.5%** quarter-over-quarter, rising **4.3 percentage points** to **66.9%** of revenue, primarily due to higher rider subsidies and expansion in grocery retail business[49](index=49&type=chunk) - Sales and marketing expenses increased by **44.8%** quarter-over-quarter, rising **6.5 percentage points** to **24.5%** of revenue, primarily due to business development and increased promotion, advertising, and user incentive expenses to counter intense competition[50](index=50&type=chunk) - Research and development expenses increased by **8.5%** to **RMB 6.3 billion**, primarily due to increased company-level investment in AI and higher employee compensation expenses[51](index=51&type=chunk) [Operating Profit](index=19&type=section&id=%E7%BB%8F%E8%90%A5%E6%BA%A2%E5%88%A9_QoQ) Q2 2025 operating profit significantly decreased quarter-over-quarter to RMB 226 million, with operating margin falling to 0.2%, driven by a 72.4% decline in core local commerce profit due to lower gross margin and increased user incentives, while new business operating loss narrowed by 17.2% due to improved operational and marketing efficiency Q2 2025 Operating Profit/(Loss) by Segment (QoQ) | Segment | June 30, 2025 (RMB thousands) | % of Revenue (2025) | March 31, 2025 (RMB thousands) | % of Revenue (2025) | | :--- | :--- | :--- | :--- | :--- | | Core Local Commerce | 3,721,130 | 5.7% | 13,491,480 | 21.0% | | New Initiatives | (1,881,318) | (7.1%) | (2,273,267) | (10.2%) | | Unallocated Items | (1,613,462) | Not Applicable | (652,103) | Not Applicable | | **Total Operating Profit** | **226,350** | **0.2%** | **10,566,110** | **12.2%** | - Core local commerce operating profit decreased by **72.4%** quarter-over-quarter, with operating margin falling **15.3 percentage points** to **5.7%**, primarily due to lower gross margin and increased transaction user incentives and promotion & advertising expenses to enhance user stickiness and consolidate market position[58](index=58&type=chunk) - New initiatives operating loss narrowed by **17.2%** quarter-over-quarter, with operating loss margin improving **3.1 percentage points** to **7.1%**, primarily due to enhanced operational and marketing efficiency in grocery retail and certain new initiatives[58](index=58&type=chunk) [Profit for the Period](index=20&type=section&id=%E6%9C%9F%E5%85%A7%E6%BA%A2%E5%88%A9_QoQ) Q2 2025 profit for the period was RMB 365 million, a significant decrease from RMB 10.1 billion in Q1 2025, primarily due to a substantial reduction in operating profit, increased share of profits from equity-accounted investments, and reduced income tax expense - Profit for the period was **RMB 365 million**, compared to **RMB 10.1 billion** in Q1 2025, primarily impacted by a significant decrease in operating profit[61](index=61&type=chunk) - Share of profits from investments accounted for using the equity method increased from **RMB 18.5 million** to **RMB 89.2 million**, reflecting fluctuations in the financial performance of investees[59](index=59&type=chunk) - Income tax expense decreased from **RMB 544 million** to **RMB 28.4 million**, primarily due to profit fluctuations in certain entities[60](index=60&type=chunk) [Reconciliation of Non-IFRS Measures](index=20&type=section&id=%E9%9D%9E%E5%9C%8B%E9%9A%9B%E8%B2%A1%E5%8B%99%E5%A0%B1%E5%91%8A%E6%9C%83%E8%A8%88%E6%BA%96%E5%89%87%E8%A8%88%E9%87%8F%E8%88%87%E6%9C%80%E8%BF%91%E7%9A%84%E6%A0%B9%E6%93%9A%E5%9C%8B%E9%9A%9B%E8%B2%A1%E5%8B%99%E5%A0%B1%E5%91%8A%E6%9C%83%E8%A8%88%E6%BA%96%E5%89%87%E7%B7%A8%E8%A3%BD%E7%9A%84%E8%A8%88%E9%87%8F%E4%B9%8B%E9%96%93%E7%9A%84%E8%AA%BF%E7%AF%80) This section provides a reconciliation of non-IFRS financial measures, such as adjusted EBITDA and adjusted net profit, to their closest IFRS equivalents, highlighting adjustments for non-cash or one-off items [Reconciliation of Non-IFRS Measures to IFRS Measures](index=20&type=section&id=%E9%9D%9E%E5%9C%8B%E9%9A%9B%E8%B2%A1%E5%8B%99%E5%A0%B1%E5%91%8A%E6%9C%83%E8%A8%88%E6%BA%96%E5%89%87%E8%A8%88%E9%87%8F%E8%88%87%E6%9C%80%E8%BF%91%E7%9A%84%E6%A0%B9%E6%93%9A%E5%9C%8B%E9%9A%9B%E8%B2%A1%E5%8B%99%E5%A0%B1%E5%91%8A%E6%9C%83%E8%A8%88%E6%BA%96%E5%89%87%E7%B7%A8%E8%A3%BD%E7%9A%84%E8%A8%88%E9%87%8F%E4%B9%8B%E9%96%93%E7%9A%84%E8%AA%BF%E7%AF%80) The company uses adjusted EBITDA and adjusted net profit as supplementary financial measures to eliminate the impact of non-operating, non-cash, or one-off items, including share-based compensation, intangible asset amortization, depreciation, and fair value changes, for better period-over-period operational comparison - Adjusted EBITDA and adjusted net profit are non-IFRS measures used to eliminate the potential impact of non-cash or one-off items and certain investment transactions for better comparison of operating performance[62](index=62&type=chunk) Q2 2025 Reconciliation of Non-IFRS Measures (YoY and QoQ) | Indicator | June 30, 2025 (RMB thousands) | June 30, 2024 (RMB thousands) | March 31, 2025 (RMB thousands) | | :--- | :--- | :--- | :--- | | Profit for the Period | 365,296 | 11,352,338 | 10,056,880 | | Adjusted Net Profit | 1,493,035 | 13,606,256 | 10,948,504 | | Adjusted EBITDA | 2,781,961 | 14,997,268 | 12,301,686 | H1 2025 Reconciliation of Non-IFRS Measures (YoY) | Indicator | June 30, 2025 (RMB thousands) | June 30, 2024 (RMB thousands) | | :--- | :--- | :--- | | Profit for the Period | 10,422,176 | 16,721,317 | | Adjusted Net Profit | 12,441,539 | 21,094,650 | | Adjusted EBITDA | 15,083,647 | 23,067,611 | [Liquidity and Capital Resources](index=23&type=section&id=%E6%B5%81%E5%8B%95%E8%B3%87%E9%87%91%E5%8F%8A%E8%B3%87%E6%9C%AC%E8%B3%87%E6%BA%90) This section details Meituan's liquidity position, including cash and cash equivalents, short-term investments, cash flow activities, and capital-to-debt ratio [Cash and Cash Equivalents and Short-term Investments](index=23&type=section&id=%E7%8F%BE%E9%87%91%E5%8F%8A%E7%8F%BE%E9%87%91%E7%AD%89%E5%83%B9%E7%89%A9%E5%92%8C%E7%9F%AD%E6%9C%9F%E7%90%86%E8%B2%A1%E6%8A%95%E8%B3%87) As of June 30, 2025, Meituan held substantial cash and cash equivalents of RMB 101.7 billion and short-term investments of RMB 69.4 billion, indicating strong liquidity - As of June 30, 2025, the company held **RMB 101.7 billion** in cash and cash equivalents and **RMB 69.4 billion** in short-term investments[13](index=13&type=chunk)[67](index=67&type=chunk) [Cash Flow](index=23&type=section&id=%E7%8F%BE%E9%87%91%E6%B5%81%E9%87%8F) In Q2 2025, net cash inflow from operating activities was RMB 4.8 billion, net cash outflow from investing activities was RMB 5.5 billion for investments and property, and net cash outflow from financing activities was RMB 12.3 billion due to convertible bond redemption Q2 2025 Cash Flow (RMB thousands) | Cash Flow Type | For the Three Months Ended June 30, 2025 | | :--- | :--- | | Net Cash Flow from Operating Activities | 4,773,442 | | Net Cash Flow (Used in)/from Investing Activities | (5,541,880) | | Net Cash Flow Used in Financing Activities | (12,323,701) | | Net (Decrease)/Increase in Cash and Cash Equivalents | (13,092,139) | | Cash and Cash Equivalents at End of Period | 101,656,333 | - Net cash inflow from operating activities in Q2 2025 was **RMB 4.8 billion**, primarily attributable to profit before income tax and an increase in certain current liabilities[13](index=13&type=chunk)[69](index=69&type=chunk) - Net cash outflow from investing activities in Q2 2025 was **RMB 5.5 billion**, primarily for the purchase of wealth management investments and property, plant, and equipment[70](index=70&type=chunk) - Net cash outflow from financing activities in Q2 2025 was **RMB 12.3 billion**, primarily due to the redemption of convertible bonds[71](index=71&type=chunk) [Capital-to-Debt Ratio](index=24&type=section&id=%E8%B3%87%E6%9C%AC%E8%B2%A0%E5%82%B5%E6%AF%94%E7%8E%87) As of June 30, 2025, Meituan's capital-to-debt ratio was approximately 24%, indicating a moderate level of financial leverage - As of June 30, 2025, the capital-to-debt ratio was approximately **24%**, calculated as total borrowings and bills payable divided by total equity attributable to the company's equity holders[72](index=72&type=chunk) [Financial Statements](index=25&type=section&id=%E8%B2%A1%E5%8B%99%E8%B3%87%E6%96%99) This section presents Meituan's interim condensed consolidated financial statements, including the income statement, comprehensive income statement, statement of financial position, and cash flow statement [Interim Condensed Consolidated Statement of Profit or Loss](index=25&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%94%B6%E7%9B%8A%E8%A1%A8) For the six months ended June 30, 2025, Meituan's revenue grew 14.7% to RMB 178.4 billion, but operating profit decreased 34.5% to RMB 10.79 billion, and profit for the period fell 37.7% to RMB 10.42 billion, with basic earnings per share at RMB 1.72 H1 2025 Interim Condensed Consolidated Statement of Profit or Loss Summary (YoY) | Indicator | June 30, 2025 (RMB thousands) | June 30, 2024 (RMB thousands) | | :--- | :--- | | Revenue | 178,397,606 | 155,526,961 | | Cost of Revenue | (115,569,914) | (95,940,377) | | Gross Profit | 62,827,692 | 59,586,584 | | Operating Profit | 10,792,460 | 16,466,281 | | Profit for the Period | 10,422,176 | 16,721,317 | | Basic Earnings Per Share (RMB) | 1.72 | 2.70 | | Diluted Earnings Per Share (RMB) | 1.61 | 2.58 | [Interim Condensed Consolidated Statement of Comprehensive Income](index=26&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) For the six months ended June 30, 2025, Meituan's total comprehensive income for the period was RMB 8.45 billion, a significant decrease from RMB 17.14 billion in 2024, primarily due to a substantial shift from currency translation gains to losses, partially offsetting other comprehensive income fluctuations H1 2025 Interim Condensed Consolidated Statement of Comprehensive Income Summary (YoY) | Indicator | June 30, 2025 (RMB thousands) | June 30, 2024 (RMB thousands) | | :--- | :--- | | Profit for the Period | 10,422,176 | 16,721,317 | | Other Comprehensive (Loss)/Income for the Period | (1,967,739) | 419,235 | | **Total Comprehensive Income for the Period** | **8,454,437** | **17,140,552** | | Currency Translation Differences (reclassifiable to profit or loss) | 1,986,670 | (3,193,369) | | Currency Translation Differences (not reclassifiable to profit or loss) | (3,247,352) | 3,955,336 | [Interim Condensed Consolidated Statement of Financial Position](index=27&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) As of June 30, 2025, Meituan's total assets increased to RMB 330.2 billion and total equity to RMB 184.3 billion, with a significant rise in cash and cash equivalents and a decrease in short-term investments, while total liabilities slightly decreased, notably in non-current bills payable June 30, 2025 Interim Condensed Consolidated Statement of Financial Position Summary (vs December 31, 2024) | Indicator | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | | **Total Assets** | **330,198,175** | **324,354,917** | | Non-current Assets | 112,804,812 | 114,620,056 | | Current Assets | 217,393,363 | 209,734,861 | | Cash and Cash Equivalents | 101,656,333 | 70,834,097 | | Short-term Investments | 69,361,319 | 97,409,161 | | **Total Equity** | **184,297,564** | **172,604,078** | | **Total Liabilities** | **145,900,611** | **151,750,839** | | Non-current Liabilities | 33,422,224 | 43,815,199 | | Current Liabilities | 112,478,387 | 107,935,640 | [Interim Condensed Consolidated Statement of Cash Flows](index=29&type=section&id=%E4%B8%AD%E6%9C%9F%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 inflow from operating activities was RMB 14.9 billion, net cash inflow from investing activities was RMB 29.2 billion, and net cash outflow from financing activities was RMB 12.8 billion, with cash and cash equivalents increasing to RMB 101.7 billion at period-end H1 2025 Interim Condensed Consolidated Statement of Cash Flows Summary (YoY) | Cash Flow Type | June 30, 2025 (RMB thousands) | June 30, 2024 (RMB thousands) | | :--- | :--- | | Net Cash Flow from Operating Activities | 14,904,570 | 25,038,337 | | Net Cash Flow from Investing Activities | 29,209,440 | 28,571,875 | | Net Cash Flow Used in Financing Activities | (12,830,170) | (32,413,691) | | Net Increase in Cash and Cash Equivalents | 31,283,840 | 21,196,521 | | Cash and Cash Equivalents at End of Period | 101,656,333 | 54,704,168 | [Notes to Financial Information](index=30&type=section&id=%E8%B2%A1%E5%8B%99%E8%B3%87%E6%96%99%E9%99%84%E8%A8%BB) This section provides detailed notes to the interim financial information, covering general information, accounting policies, segment information, cost breakdowns, and other financial disclosures [General Information, Basis of Preparation and Presentation](index=30&type=section&id=%E4%B8%80%E8%88%AC%E8%B3%87%E6%96%99%E3%80%81%E7%B7%A8%E8%A3%BD%E5%8F%8A%E5%91%88%E5%88%97%E5%9F%BA%E6%BA%96) Meituan was incorporated in the Cayman Islands on September 25, 2015, with B shares listed on the HKEX main board, and its interim condensed financial information is prepared under IAS 34, presented in RMB, and should be read with the 2024 annual report - Meituan was incorporated in the Cayman Islands on September 25, 2015, and its Class B shares have been listed on the Main Board of the Hong Kong Stock Exchange since September 20, 2018[78](index=78&type=chunk) - The interim condensed financial information is prepared in accordance with International Accounting Standard 34 and presented in RMB, and should be read in conjunction with the 2024 annual report[78](index=78&type=chunk) [Changes in Accounting Policies and Disclosures](index=30&type=section&id=%E6%9C%83%E8%A8%88%E6%94%BF%E7%AD%96%E5%8F%8A%E6%8A%AB%E9%9C%B2%E8%AE%8A%E5%8B%95) Effective January 1, 2025, the company first adopted IAS 21 (amended) "Lack of Exchangeability," which had no significant financial impact on the interim condensed consolidated financial information - The company first adopted International Accounting Standard 21 (amended) "Lack of Exchangeability" effective January 1, 2025[79](index=79&type=chunk) - The adoption of the new amendment had no significant financial impact on the interim condensed consolidated financial information[79](index=79&type=chunk) [Segment Information](index=31&type=section&id=%E5%88%86%E9%83%A8%E8%B3%87%E6%96%99) For the six months ended June 30, 2025, core local commerce generated RMB 129.7 billion in revenue and RMB 17.2 billion in operating profit, while new initiatives recorded RMB 48.7 billion in revenue with an operating loss of RMB 4.15 billion, and unallocated items resulted in a loss of RMB 2.27 billion H1 2025 Revenue and Operating Profit/(Loss) by Segment (YoY) | Segment | Core Local Commerce (2025) (RMB thousands) | New Initiatives (2025) (RMB thousands) | Unallocated Items (2025) (RMB thousands) | Total (2025) (RMB thousands) | Core Local Commerce (2024) (RMB thousands) | New Initiatives (2024) (RMB thousands) | Unallocated Items (2024) (RMB thousands) | Total (2024) (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | 129,671,997 | 48,725,609 | – | 178,397,606 | 115,307,565 | 40,219,396 | – | 155,526,961 | | Operating Profit/(Loss) | 17,212,610 | (4,154,585) | (2,265,565) | 10,792,460 | 24,932,432 | (4,071,258) | (4,394,893) | 16,466,281 | - Unallocated items primarily include share-based compensation expenses, amortization of intangible assets arising from acquisitions, fair value changes of financial investments measured at fair value, certain items of other gains/(losses) net, and certain corporate administrative expenses[9](index=9&type=chunk)[80](index=80&type=chunk) [Details of Costs and Expenses](index=32&type=section&id=%E6%88%90%E6%9C%AC%E5%8F%8A%E9%96%8B%E6%94%AF%E6%98%8E%E7%B4%B0) For the six months ended June 30, 2025, major cost and expense items included logistics expenses of RMB 69.8 billion, transaction costs of RMB 30.8 billion, and promotion, advertising, and user incentive expenses of RMB 24.8 billion H1 2025 Details of Costs and Expenses (RMB thousands) | Expense Type | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Logistics Expenses | 69,837,205 | 57,477,992 | | Transaction Costs | 30,774,887 | 22,147,932 | | Promotion, Advertising and User Incentives | 24,792,180 | 16,600,385 | | Employee Benefit Expenses | 22,771,806 | 22,361,745 | | Outsourcing Costs | 6,656,215 | 6,885,191 | | Depreciation of Property, Plant and Equipment | 4,536,656 | 3,818,732 | | Amortization of Intangible Assets | 126,459 | 118,457 | | Auditor's Remuneration | 15,913 | 19,807 | [Other Gains, Net](index=32&type=section&id=%E5%85%B6%E4%BB%96%E6%94%B6%E7%9B%8A%E6%B7%A8%E9%A1%8D_Note) For the six months ended June 30, 2025, other gains, net, totaled RMB 2.23 billion, primarily comprising fair value changes and gains from wealth management investments of RMB 1.12 billion and net exchange gains of RMB 830 million H1 2025 Details of Other Gains, Net (YoY) | Item | June 30, 2025 (RMB thousands) | June 30, 2024 (RMB thousands) | | :--- | :--- | :--- | | Fair Value Changes and Gains from Wealth Management Investments | 1,121,380 | 2,147,663 | | Net Exchange Gains/(Losses) | 833,190 | (166,024) | | Others | 271,547 | 40,865 | | **Total** | **2,226,117** | **2,022,504** | [Earnings Per Share](index=33&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 1.72 and diluted earnings per share were RMB 1.61, both decreasing year-over-year, with calculations reflecting the dilutive effect of share options and restricted share units H1 2025 Earnings Per Share (YoY) | Indicator | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Profit for the Period Attributable to Equity Holders of the Company (RMB thousands) | 10,421,644 | 16,720,459 | | Weighted Average Number of Ordinary Shares in Issue (thousands) | 6,061,019 | 6,195,147 | | **Basic Earnings Per Share (RMB)** | **1.72** | **2.70** | | Diluted Earnings Per Share (RMB) | 1.61 | 2.58 | [Income Tax Expense](index=34&type=section&id=%E6%89%80%E5%BE%97%E7%A8%85%E9%96%8B%E6%94%AF_Note) For the six months ended June 30, 2025, income tax expense totaled RMB 572 million, comprising current income tax expense of RMB 462 million and deferred income tax expense of RMB 110 million H1 2025 Income Tax Expense (YoY) | Item | June 30, 2025 (RMB thousands) | June 30, 2024 (RMB thousands) | | :--- | :--- | :--- | | Current Income Tax Expense | 462,298 | 290,362 | | Deferred Income Tax Expense | 109,993 | 127,016 | | **Total** | **572,291** | **417,378** | [Trade Receivables](index=34&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, net trade receivables increased to RMB 3.14 billion from December 31, 2024, with most receivables aged within three months and credit terms typically not exceeding 180 days Trade Receivables (RMB thousands) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Trade Receivables | 3,579,900 | 3,170,119 | | Less: Impairment Allowance | (438,638) | (517,073) | | **Net** | **3,141,262** | **2,653,046** | Ageing Analysis of Trade Receivables (RMB thousands) | Ageing | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Within 3 Months | 2,775,177 | 2,274,723 | | 3 to 6 Months | 260,297 | 306,678 | | 6 Months to 1 Year | 90,833 | 61,492 | | Over 1 Year | 14,955 | 10,153 | | **Total** | **3,141,262** | **2,653,046** | [Trade Payables](index=35&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, total trade payables increased to RMB 29.25 billion from December 31, 2024, with the majority aged within three months Ageing Analysis of Trade Payables (RMB thousands) | Ageing | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Within 3 Months | 28,059,011 | 24,515,415 | | 3 to 6 Months | 685,247 | 278,013 | | 6 Months to 1 Year | 210,491 | 133,986 | | Over 1 Year | 298,537 | 265,735 | | **Total** | **29,253,286** | **25,193,149** | [Dividends](index=35&type=section&id=%E8%82%A1%E6%81%AF) For the six months ended June 30, 2025, and the year ended December 31, 2024, Meituan neither paid nor declared any dividends - For the six months ended June 30, 2025, and the year ended December 31, 2024, the company neither paid nor declared any dividends[90](index=90&type=chunk) [Other Information](index=36&type=section&id=%E5%85%B6%E4%BB%96%E4%BF%A1%E6%81%AF) This section covers additional corporate information, including share repurchases, audit committee review, auditor procedures, corporate governance compliance, and forward-looking statements [Share Repurchase](index=36&type=section&id=%E8%B3%BC%E8%B2%B7%E3%80%81%E5%87%BA%E5%94%AE%E6%88%96%E8%B3%96%E5%9B%9E%E6%9C%AC%E5%85%AC%E5%8F%B8%E7%9A%84%E4%B8%8A%E5%B8%82%E8%AD%89%E5%88%B8%E6%88%96%E5%87%BA%E5%94%AE%E5%BA%AB%E5%AD%98%E8%82%A1%E4%BB%BD) For the six months ended June 30, 2025, Meituan repurchased 3,018,700 Class B shares on the Stock Exchange for HKD 392 million, aiming to create value for the company and shareholders, with the same number of shares held for cancellation as of that date May 2025 Share Repurchase Details | Repurchase Month | Number of Shares Repurchased | Price Paid Per Share (Highest) (HKD) | Price Paid Per Share (Lowest) (HKD) | Total Consideration (HKD) | | :--- | :--- | :--- | :--- | :--- | | May | 3,018,700 | 132.40 | 122.60 | 391,791,941.21 | | **Total** | **3,018,700** | | | **391,791,941.21** | - The share repurchases are intended to benefit the company and create value for shareholders[91](index=91&type=chunk) - As of June 30, 2025, the company held **3,018,700** Class B shares for cancellation[91](index=91&type=chunk) [Audit Committee](index=36&type=section&id=%E5%AF%A9%E6%A0%B8%E5%A7%94%E5%93%A1%E6%9C%83) The Audit Committee reviewed the company's unaudited interim condensed financial information for the three and six months ended June 30, 2025, and regularly met with management, auditors, and internal audit personnel to discuss accounting principles, internal controls, and financial reporting matters - The Audit Committee has reviewed the company's unaudited interim condensed financial information for the three and six months ended June 30, 2025[93](index=93&type=chunk) - The Committee regularly meets with management, auditors, and internal audit personnel to discuss accounting principles, internal controls, and financial reporting matters[93](index=93&type=chunk) [Auditor's Procedures on Results Announcement](index=36&type=section&id=%E6%A0%B8%E6%95%B8%E5%B8%AB%E5%B0%8D%E6%A5%AD%E7%B8%BE%E5%85%AC%E5%91%8A%E5%9F%B7%E8%A1%8C%E7%9A%84%E7%A8%8B%E5%BA%8F) The auditor has reviewed the company's unaudited interim condensed financial information for the six months ended June 30, 2025, in accordance with International Standard on Review Engagements 2410 - The auditor has reviewed the company's unaudited interim condensed financial information for the six months ended June 30, 2025, in accordance with International Standard on Review Engagements 2410[94](index=94&type=chunk) [Compliance with Corporate Governance Code](index=37&type=section&id=%E9%81%B5%E5%AE%88%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%AE%88%E5%89%87) For the six months ended June 30, 2025, the company complied with all code provisions of the Corporate Governance Code, except for the combined roles of Chairman and CEO held by Mr. Wang Xing, which the company believes ensures consistent internal leadership and efficient strategic planning - For the six months ended June 30, 2025, the company complied with all code provisions of the Corporate Governance Code, except for code provision C.2.1[97](index=97&type=chunk) - The roles of Chairman and Chief Executive Officer are combined and held by Mr. Wang Xing, an arrangement the Board believes ensures consistent internal leadership and more effective and efficient overall strategic planning[97](index=97&type=chunk) [Compliance with Standard Securities Dealing Code for Directors](index=37&type=section&id=%E9%81%B5%E5%AE%88%E8%91%A3%E4%BA%8B%E9%80%B2%E8%A1%8C%E8%AD%89%E5%88%B8%E4%BA%A4%E6%98%93%E7%9A%84%E6%A8%99%E6%BA%96%E5%AE%88%E5%89%87) All directors confirmed compliance with the required standards for securities transactions by directors as set out in the Standard Code for the six months ended June 30, 2025 - All directors have confirmed compliance with the required standards for securities transactions by directors as set out in the Standard Code for the six months ended June 30, 2025[98](index=98&type=chunk) [Forward-Looking Statements](index=38&type=section&id=%E5%89%8D%E7%9E%BB%E6%80%A7%E9%99%B3%E8%BF%B0) This announcement contains forward-looking statements regarding the company's business outlook, financial performance forecasts, business plan projections, and development strategies, which are based on current information and expectations but involve significant risks and uncertainties, thus investors should not unduly rely on them - This announcement contains forward-looking statements related to the company's business outlook, financial performance forecasts, business plan projections, and development strategies[100](index=100&type=chunk) - These forward-looking statements are based on certain expectations, assumptions, and premises that are subjective or beyond the company's control, involving significant risks and uncertainties, and investors should not unduly rely on them[100](index=100&type=chunk) [Definitions](index=39&type=section&id=%E9%87%8B%E7%BE%A9) This section defines key terms and abbreviations used in the announcement, including corporate governance, financial reporting standards, share types, currencies, and business metrics such as active merchants, gross transaction value, instant delivery transactions, transacting users, and transactions, to ensure accurate understanding of the report content - Definitions are provided for general terms such as the company's articles of association, audit, Board, Corporate Governance Code, share types, and currencies[101](index=101&type=chunk)[102](index=102&type=chunk) - Key business metrics such as "active merchants," "gross transaction value," "instant delivery transactions," "transacting users," and "transactions" are defined to clarify their specific meanings in the report[103](index=103&type=chunk)

Financial Performance - Total revenue for the six months ended June 30, 2025, was HKD 2,405.2 million, a decrease of 4.9% compared to HKD 2,528.1 million in the same period of 2024[3]. - Profit attributable to shareholders increased by 6.7% to HKD 140.5 million, up from HKD 131.7 million in the previous year[5]. - Operating profit surged by 75.9% to HKD 481.0 million, compared to HKD 273.5 million in the same period last year[3]. - The group achieved a net profit of HKD 157.9 million for the period, compared to HKD 185.6 million in 2024, a decrease of approximately 15%[17]. - EBITDA for the six months ended June 30, 2025, was HKD 1,976.1 million, down from HKD 2,481.3 million for the same period in 2024[19]. - The company reported a pre-tax profit of HKD 188,396,000, a decrease of 37.5% from HKD 301,419,000[63]. - Total comprehensive income for the period was HKD 101,190,000, down 6.6% from HKD 107,809,000[61]. Revenue Sources - Financing lease income for the same period was HKD 333.3 million, up from HKD 300.2 million in 2024, representing an increase of approximately 11%[17]. - Total leasing income from finance and operating leases for the six months ended June 30, 2025, was HKD 1,908.1 million, a decrease of HKD 314.4 million or 14.1% from HKD 2,222.5 million for the same period in 2024[21]. - Operating lease income decreased by 18.1% to HKD 1,574,830,000 from HKD 1,922,237,000[60]. - The group’s net income from aircraft transactions and aircraft parts trade was HKD 294.7 million, significantly higher than HKD 25.4 million in the previous year[17]. - Net income from aircraft transactions reached HKD 295,217,000 for the six months ended June 30, 2025, compared to HKD 25,256,000 for the same period in 2024, representing a significant increase[89]. Aircraft and Fleet Management - The company delivered 10 new aircraft and 1 used aircraft during the review period, with a total of 21 new aircraft purchase agreements signed[6]. - As of June 30, 2025, the fleet consisted of 181 aircraft, with 89% of the owned fleet being narrow-body aircraft, maintaining a 100% leasing rate for the owned fleet[7]. - The company has 114 aircraft on order, including 88 Airbus and 26 COMAC aircraft, representing over 70% of the owned fleet size[8]. - The average age of the owned fleet is 8.6 years, with an average remaining lease term of 5.7 years[7]. - The total fleet size decreased from 159 aircraft as of December 31, 2024, to 151 aircraft as of June 30, 2025[39]. - The number of aircraft classified as held for sale decreased from 19 to 12 between December 31, 2024, and June 30, 2025[37]. Financial Position and Liquidity - Cash and cash equivalents amounted to HKD 4,884 million, with unutilized borrowing facilities totaling HKD 11,228 million, leading to a total liquidity of HKD 16,112 million[11]. - Total assets as of June 30, 2025, amounted to HKD 58,612.8 million, an increase of HKD 373.1 million or 0.6% from HKD 58,239.7 million as of December 31, 2024[19]. - Total liabilities as of June 30, 2025, were HKD 52,787.1 million, a decrease of HKD 124.4 million or 0.2% from HKD 52,911.5 million as of December 31, 2024[20]. - The group has a debt-to-equity ratio of 8.4:1 as of June 30, 2025, improved from 9.1:1 as of December 31, 2024[53]. - The group has secured a bank facility of HKD 7,126.3 million for future PDP payments over the next twelve months[68]. Cost Management and Expenses - The group’s interest expenses were HKD 1,104.4 million, down from HKD 1,340.1 million in 2024, reflecting a decrease of about 17.6%[17]. - The total employee compensation for the six months ended June 30, 2025, was HKD 94.2 million, a decrease from HKD 122.1 million for the same period in 2024[54]. - Depreciation and impairment for the six months ended June 30, 2025, was HKD 683.3 million, down HKD 156.4 million or 18.6% from HKD 839.7 million in the previous year[29]. - Interest expenses decreased to HKD 981.3 million, down from HKD 1,206.6 million in 2024, a reduction of approximately 18.7%[101]. Market Outlook and Strategic Plans - The group plans to continue expanding its global quality customer base and provide comprehensive aircraft lifecycle solutions in response to market opportunities[15]. - The group anticipates that the global aviation market will maintain steady growth, with total industry revenue expected to reach $979 billion and passenger volume to hit 4.99 billion in 2025[15]. - The company expects to complete the sale of eight aircraft by the end of October 2025, enhancing capital utilization[107]. - The group plans to meet its financial obligations and capital expenditures through internal resources and available bank financing[68]. Credit and Risk Management - The group’s expected credit loss reversal was primarily due to the repayment of certain loans by a joint venture and improved operating performance[30]. - The cumulative expected credit loss provision for finance lease receivables is HKD 22.8 million as of June 30, 2025, compared to HKD 18.5 million as of December 31, 2024[74]. - The expected credit loss provision for operating lease receivables was HKD 149,598,000 as of June 30, 2025, down from HKD 152,951,000 as of December 31, 2024[79]. Corporate Governance - The company has adhered to all provisions of the Corporate Governance Code as of June 30, 2025[109].

Announcements and Company Information [HKEX Disclaimer](index=1&type=section&id=1.1%20HKEX%20Disclaimer) HKEX and the Stock Exchange are not responsible for the content of this announcement, do not guarantee its accuracy or completeness, and disclaim liability for any losses arising from reliance on it - HKEX and the Stock Exchange bear no responsibility for the content of this announcement, nor do they guarantee its accuracy or completeness[1](index=1&type=chunk) [Company Information and Reporting Period](index=1&type=section&id=1.2%20Company%20Information%20and%20Reporting%20Period) FSM Holdings Limited (Stock Code: 1721) announced its unaudited condensed consolidated interim results for the six months ended June 30, 2025, with comparative data for 2024 - FSM Holdings Limited (Stock Code: 1721) announced its unaudited condensed consolidated interim results for the six months ended June 30, 2025[2](index=2&type=chunk) - The reporting period covers the six months ended June 30, 2025, with comparative figures for the corresponding period in 2024[2](index=2&type=chunk) Condensed Consolidated Financial Statements [Condensed Consolidated Statement of Profit or Loss](index=1&type=section&id=2.1%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) For the six months ended June 30, 2025, revenue increased by 13.3% to 7,981 thousand SGD, but net loss for the period expanded to 3,973 thousand SGD due to a significant increase in other net losses, resulting in a basic loss per share of 0.3973 Singapore cents Condensed Consolidated Statement of Profit or Loss | Metric | Six Months Ended June 30, 2025 (thousand SGD) | Six Months Ended June 30, 2024 (thousand SGD) | | :--- | :--- | :--- | | Revenue | 7,981 | 7,043 | | Cost of sales | (4,377) | (4,228) | | Gross profit | 3,604 | 2,815 | | Other income | 50 | 13 | | Other (losses)/gains, net | (2,868) | 1,181 | | Selling and distribution expenses | (388) | (229) | | Administrative expenses | (2,271) | (2,575) | | Mobile game research and development expenses | (1,547) | (1,432) | | Operating loss | (3,420) | (227) | | Finance income | 271 | 536 | | Finance costs | (440) | (426) | | Finance (costs)/income, net | (169) | 110 | | Loss before income tax | (3,589) | (117) | | Income tax expense | (384) | (296) | | Loss for the period attributable to owners of the Company | (3,973) | (413) | | Basic and diluted loss per share (Singapore cents) | (0.3973) | (0.0413) | - Revenue increased by **13.3%** from **7,043 thousand SGD** in the same period of 2024 to **7,981 thousand SGD** in 2025[3](index=3&type=chunk) - Loss for the period attributable to owners of the Company significantly expanded from **413 thousand SGD** in the same period of 2024 to **3,973 thousand SGD** in 2025[3](index=3&type=chunk) [Condensed Consolidated Statement of Comprehensive Income](index=2&type=section&id=2.2%20Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) For the six months ended June 30, 2025, the total comprehensive loss was 2,291 thousand SGD, an increase from 900 thousand SGD in the prior year, primarily due to the loss for the period and currency translation differences Condensed Consolidated Statement of Comprehensive Income | Metric | Six Months Ended June 30, 2025 (thousand SGD) | Six Months Ended June 30, 2024 (thousand SGD) | | :--- | :--- | :--- | | Loss for the period | (3,973) | (413) | | Currency translation differences | 1,682 | (487) | | Other comprehensive income/(loss) for the period, net of tax | 1,682 | (487) | | Total comprehensive loss for the period attributable to owners of the Company | (2,291) | (900) | - Total comprehensive loss for the period attributable to owners of the Company increased from **900 thousand SGD** in the same period of 2024 to **2,291 thousand SGD** in 2025[5](index=5&type=chunk) [Condensed Consolidated Statement of Financial Position](index=3&type=section&id=2.3%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, total assets were 48,216 thousand SGD, a decrease from December 31, 2024, with total equity at 27,870 thousand SGD and total liabilities at 20,346 thousand SGD, reflecting a reduction in current liabilities Condensed Consolidated Statement of Financial Position | Metric | June 30, 2025 (thousand SGD) | December 31, 2024 (thousand SGD) | | :--- | :--- | :--- | | **Assets** | | | | Non-current assets | 10,083 | 10,600 | | Current assets | 38,133 | 41,294 | | **Total assets** | **48,216** | **51,894** | | **Equity** | | | | Share capital | 1,695 | 1,695 | | Reserves | 26,533 | 24,842 | | (Accumulated losses)/retained earnings | (358) | 3,624 | | **Total equity** | **27,870** | **30,161** | | **Liabilities** | | | | Non-current liabilities | 15,168 | 16,004 | | Current liabilities | 5,178 | 5,729 | | **Total liabilities** | **20,346** | **21,733** | | **Total equity and liabilities** | **48,216** | **51,894** | - Total assets decreased from **51,894 thousand SGD** as of December 31, 2024, to **48,216 thousand SGD** as of June 30, 2025[6](index=6&type=chunk) - Total equity decreased from **30,161 thousand SGD** to **27,870 thousand SGD**, primarily due to accumulated losses[6](index=6&type=chunk) Notes to the Condensed Consolidated Interim Financial Information [General Information](index=5&type=section&id=3.1%20General%20Information) The Group primarily engages in precision engineering, sheet metal fabrication, and online mobile game development and publishing, with the company incorporated in the Cayman Islands in 2018 and financial information presented in Singapore dollars - The Group's principal activities include precision engineering, sheet metal fabrication, and the development and publishing of online mobile games[8](index=8&type=chunk) - The Company was incorporated in the Cayman Islands on February 5, 2018[8](index=8&type=chunk) - The condensed consolidated interim financial information is presented in Singapore dollars ("SGD")[9](index=9&type=chunk) [Basis of Preparation](index=5&type=section&id=3.2%20Basis%20of%20Preparation) The condensed consolidated interim financial information is prepared in accordance with IAS 34 "Interim Financial Reporting" and IFRS, and should be read in conjunction with the annual financial statements for the year ended December 31, 2024 - The condensed consolidated interim financial information is prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting"[10](index=10&type=chunk) - This information should be read in conjunction with the Group's annual financial statements for the year ended December 31, 2024[10](index=10&type=chunk) [Significant Accounting Policies](index=5&type=section&id=3.3%20Significant%20Accounting%20Policies) The accounting policies applied in preparing these interim financial statements are consistent with those of the 2024 annual consolidated financial statements, except for the adoption of standard amendments effective January 1, 2025, which had no material impact on results or financial position - The accounting policies and methods of computation applied in preparing these condensed consolidated interim financial statements are consistent with those followed in the preparation of the Group's annual consolidated financial statements for the year ended December 31, 2024[11](index=11&type=chunk) [Amendments to Standards Adopted](index=5&type=section&id=3.3.1%20Amendments%20to%20Standards%20Adopted) The Group adopted amendments to IAS 21 and IFRS 1 (Amendments) effective January 1, 2025, which had no material impact on the Group's results or financial position - Adopted amendments to standards include IAS 21 and IFRS 1 (Amendments) "Lack of Exchangeability"[12](index=12&type=chunk) - These amendments are effective for annual periods beginning on or after January 1, 2025, but had no material impact on the Group's results or financial position[12](index=12&type=chunk) [Current Standards Amendments Not Yet Adopted](index=6&type=section&id=3.3.2%20Current%20Standards%20Amendments%20Not%20Yet%20Adopted) The report lists issued but not yet effective standard amendments for the fiscal year beginning January 1, 2025, which are not expected to have a significant impact on the current or future reporting periods - Several issued but not yet effective standard amendments are listed, including annual improvements to IFRS 7, 9, 10, 18, 19, and IAS 28[14](index=14&type=chunk) - These new standards, amendments, and annual improvements are not expected to have a significant impact on the Group's current or future reporting periods and foreseeable transactions[14](index=14&type=chunk) [Estimates and Financial Risk Management](index=6&type=section&id=3.4%20Estimates%20and%20Financial%20Risk%20Management) The preparation of interim financial information involves management judgments, estimates, and assumptions, where actual results may differ; the Group faces market, credit, and liquidity risks, but risk management policies remain unchanged since December 31, 2024, and most financial instruments' carrying amounts approximate fair value - The preparation of interim financial information requires management to make judgments, estimates, and assumptions, and actual results may differ from these estimates[15](index=15&type=chunk) - The Group's operations are exposed to market risks (including foreign exchange risk and interest rate risk), credit risk, and liquidity risk[16](index=16&type=chunk) - Risk management policies have remained unchanged since December 31, 2024[17](index=17&type=chunk) [Estimates](index=6&type=section&id=3.4.1%20Estimates) The preparation of interim financial information relies on management's judgments, estimates, and assumptions, which are consistent with the key judgments and sources of estimation uncertainty applied in the 2024 annual consolidated financial statements - The preparation of interim financial information requires management to make judgments, estimates, and assumptions, and actual results may differ from these estimates[15](index=15&type=chunk) - The significant judgments made by management in applying the accounting policies and the key sources of estimation uncertainty were the same as those applied to the consolidated financial statements for the year ended December 31, 2024[15](index=15&type=chunk) [Financial Risk Management](index=7&type=section&id=3.4.2%20Financial%20Risk%20Management) The Group's business faces market risks (foreign exchange and interest rates), credit risk, and liquidity risk; the condensed consolidated interim financial information does not include financial risk management disclosures required by annual financial statements, and risk management policies remain unchanged since December 31, 2024 - The Group's business is exposed to market risks (including foreign exchange risk and interest rate risk), credit risk, and liquidity risk[16](index=16&type=chunk) - Risk management policies have remained unchanged since December 31, 2024[17](index=17&type=chunk) [Fair Value Estimation](index=7&type=section&id=3.4.3%20Fair%20Value%20Estimation) The Company has no significant financial instruments other than rental deposits, trade and other receivables, trade and other payables, cash and cash equivalents, short-term deposits, borrowings, and lease liabilities, whose carrying amounts approximate fair value due to their short-term nature - The Company has no significant financial instruments other than rental deposits, trade and other receivables, trade and other payables, cash and cash equivalents, short-term deposits, borrowings, and lease liabilities[18](index=18&type=chunk) - The carrying amounts of these balances, net of impairment (if applicable), are reasonable approximations of their fair values due to their short-term nature[18](index=18&type=chunk) [Segment Information](index=7&type=section&id=3.5%20Segment%20Information) The Group's business is divided into two reportable segments: manufacturing and online business, with manufacturing revenue growing 10.5% and online business revenue growing 32.4% in H1 2025, while manufacturing assets constitute a larger proportion and major customers are concentrated in Singapore - The Group's business is divided into two reportable segments: Manufacturing Business (precision engineering and sheet metal fabrication) and Online Business (development, publishing, and operation of online mobile games)[19](index=19&type=chunk)[20](index=20&type=chunk) - For the six months ended June 30, 2025, Manufacturing Business revenue was **6,797 thousand SGD**, and Online Business revenue was **1,184 thousand SGD**[21](index=21&type=chunk) - Manufacturing Business assets account for **26,910 thousand SGD** of the total segment assets, while Online Business assets account for **1,125 thousand SGD**[23](index=23&type=chunk) [Overview of Segments and Principal Activities](index=7&type=section&id=3.5.1%20Overview%20of%20Segments%20and%20Principal%20Activities) The Group's chief operating decision maker has identified two reportable segments: the Manufacturing Business, focused on precision engineering and sheet metal fabrication, and the Online Business, involved in developing, publishing, and operating online mobile games - The chief operating decision maker has identified two reportable segments: Manufacturing Business and Online Business[19](index=19&type=chunk)[20](index=20&type=chunk) - The Manufacturing Business focuses on sheet metal fabrication for precision engineering and precision machining services[19](index=19&type=chunk) - The Online Business involves the development, publishing, and operation of online mobile games[20](index=20&type=chunk) [Segment Profit/(Loss) Before Income Tax](index=8&type=section&id=3.5.2%20Segment%20Profit%2F%28Loss%29%20Before%20Income%20Tax) For the six months ended June 30, 2025, the Manufacturing Business recorded a profit of 1,369 thousand SGD, while the Online Business recorded a loss of 2,232 thousand SGD, resulting in a total segment loss of 863 thousand SGD Segment Profit/(Loss) Before Income Tax | Metric | Six Months Ended June 30, 2025 (thousand SGD) | Six Months Ended June 30, 2024 (thousand SGD) | | :--- | :--- | :--- | | **Reportable segment revenue** | | | | Manufacturing Business | 6,797 | 6,149 | | Online Business | 1,184 | 894 | | **Total** | **7,981** | **7,043** | | **Reportable segment results** | | | | Manufacturing Business | 1,369 | 2,251 | | Online Business | (2,232) | (2,374) | | **Total** | **(863)** | **(123)** | | Corporate income | 130 | 881 | | Corporate expenses | (2,856) | (875) | | **Loss before income tax** | **(3,589)** | **(117)** | - In H1 2025, the Manufacturing Business achieved a profit of **1,369 thousand SGD**, while the Online Business incurred a loss of **2,232 thousand SGD**[21](index=21&type=chunk) - Loss before income tax for H1 2025 was **3,589 thousand SGD**, a significant increase from **117 thousand SGD** in the same period of 2024[21](index=21&type=chunk) [Segment Assets](index=9&type=section&id=3.5.3%20Segment%20Assets) As of June 30, 2025, the Group's total segment assets were 28,035 thousand SGD, with the Manufacturing Business accounting for 26,910 thousand SGD and the Online Business for 1,125 thousand SGD; non-current assets are primarily located in Singapore and Malaysia Segment Assets | Metric | June 30, 2025 (thousand SGD) | December 31, 2024 (thousand SGD) | | :--- | :--- | :--- | | Manufacturing Business | 26,910 | 35,081 | | Online Business | 1,125 | 2,369 | | **Total segment assets** | **28,035** | **37,450** | | Corporate assets | 20,181 | 14,444 | | **Total assets** | **48,216** | **51,894** | Non-current Assets by Location | Non-current Asset Location | June 30, 2025 (thousand SGD) | December 31, 2024 (thousand SGD) | | :--- | :--- | :--- | | Singapore | 7,045 | 7,336 | | Hong Kong | 212 | 305 | | China | 29 | 101 | | Malaysia | 2,797 | 2,858 | | **Total non-current assets** | **10,083** | **10,600** | - Manufacturing Business assets constitute the majority of total segment assets, amounting to **26,910 thousand SGD**[23](index=23&type=chunk) [Segment Liabilities](index=10&type=section&id=3.5.4%20Segment%20Liabilities) As of June 30, 2025, the Group's total segment liabilities were 4,489 thousand SGD, with the Manufacturing Business liabilities at 3,793 thousand SGD and Online Business liabilities at 696 thousand SGD; corporate liabilities represent a larger proportion of total liabilities Segment Liabilities | Metric | June 30, 2025 (thousand SGD) | December 31, 2024 (thousand SGD) | | :--- | :--- | :--- | | Manufacturing Business | 3,793 | 3,423 | | Online Business | 696 | 1,636 | | **Total segment liabilities** | **4,489** | **5,059** | | Corporate liabilities | 15,857 | 16,674 | | **Total liabilities** | **20,346** | **21,733** | - Manufacturing Business liabilities were **3,793 thousand SGD**, and Online Business liabilities were **696 thousand SGD**[25](index=25&type=chunk) - Corporate liabilities, at **15,857 thousand SGD**, significantly exceeded segment liabilities[25](index=25&type=chunk) [Disaggregation of Revenue from Contracts with Customers](index=10&type=section&id=3.5.5%20Disaggregation%20of%20Revenue%20from%20Contracts%20with%20Customers) The Group's revenue primarily originates from Singaporean customers, with 6,797 thousand SGD from Singapore and 1,184 thousand SGD from other countries for the six months ended June 30, 2025 - The Group's revenue primarily derives from sales to customers in Singapore[26](index=26&type=chunk) Revenue by Customer Location | Customer Location | Six Months Ended June 30, 2025 (thousand SGD) | Six Months Ended June 30, 2024 (thousand SGD) | | :--- | :--- | :--- | | Singapore | 6,797 | 6,149 | | Other countries | 1,184 | 894 | | **Total** | **7,981** | **7,043** | [Information About Major Customers](index=11&type=section&id=3.5.6%20Information%20About%20Major%20Customers) For the six months ended June 30, 2025, two major customers (Customer A and Customer B) each contributed over 10% of the Group's total revenue, with Customer A contributing 3,489 thousand SGD and Customer B contributing 2,975 thousand SGD - For the six months ended June 30, 2025, two customers (Customer A and Customer B) individually contributed over **10%** of the Group's total revenue[28](index=28&type=chunk) Major Customer Revenue | Major Customer | Six Months Ended June 30, 2025 (thousand SGD) | Six Months Ended June 30, 2024 (thousand SGD) | | :--- | :--- | :--- | | Customer A | 3,489 | 3,381 | | Customer B | 2,975 | 2,447 | [Revenue](index=11&type=section&id=3.6%20Revenue) For the six months ended June 30, 2025, the Group's total revenue was 7,981 thousand SGD, primarily from sales of goods (6,663 thousand SGD) and sales of virtual game items (1,184 thousand SGD), with a significant increase in processing service revenue Revenue by Source | Revenue Source | Six Months Ended June 30, 2025 (thousand SGD) | Six Months Ended June 30, 2024 (thousand SGD) | | :--- | :--- | :--- | | Sales of goods | 6,663 | 6,123 | | Processing services | 134 | 26 | | Sales of virtual game items | 1,184 | 894 | | **Total** | **7,981** | **7,043** | - Sales of goods remained the primary revenue source, while processing service revenue significantly increased from **26 thousand SGD** to **134 thousand SGD**[29](index=29&type=chunk) - Revenue from sales of virtual game items increased from **894 thousand SGD** to **1,184 thousand SGD**[29](index=29&type=chunk) [Other (Losses)/Gains, Net](index=12&type=section&id=3.7%20Other%20%28Losses%29%2FGains,%20Net) For the six months ended June 30, 2025, the Group recorded a net exchange loss of 2,870 thousand SGD, resulting in other net losses of 2,868 thousand SGD, compared to a net exchange gain of 1,181 thousand SGD in the prior year Other (Losses)/Gains, Net | Metric | Six Months Ended June 30, 2025 (thousand SGD) | Six Months Ended June 30, 2024 (thousand SGD) | | :--- | :--- | :--- | | Exchange (losses)/gains, net | (2,870) | 1,181 | | Gain on disposal of property, plant and equipment | 2 | – | | **Total** | **(2,868)** | **1,181** | - Exchange differences shifted from a gain of **1,181 thousand SGD** in the same period of 2024 to a loss of **2,870 thousand SGD** in 2025[30](index=30&type=chunk) [Finance (Costs)/Income, Net](index=12&type=section&id=3.8%20Finance%20%28Costs%29%2FIncome,%20Net) For the six months ended June 30, 2025, the Group's net finance costs were 169 thousand SGD, primarily due to non-cash finance costs from the discounted value of shareholder loans, contrasting with net finance income of 110 thousand SGD in the prior year Finance (Costs)/Income, Net | Metric | Six Months Ended June 30, 2025 (thousand SGD) | Six Months Ended June 30, 2024 (thousand SGD) | | :--- | :--- | :--- | | Finance income - bank deposits | 271 | 536 | | Finance costs - unwinding of discount on shareholder loans | (417) | (396) | | Finance costs - other bank borrowings | (5) | (8) | | Finance costs - lease liabilities | (15) | (20) | | Finance costs - restoration costs | (3) | (2) | | **Finance (costs)/income, net** | **(169)** | **110** | - Net finance position shifted from an income of **110 thousand SGD** in the same period of 2024 to a cost of **169 thousand SGD** in 2025[31](index=31&type=chunk) - Non-cash finance costs arising from the discounted value of shareholder loans were the primary finance expense[31](index=31&type=chunk) [Loss Before Income Tax](index=13&type=section&id=3.9%20Loss%20Before%20Income%20Tax) For the six months ended June 30, 2025, loss before income tax significantly increased to 3,589 thousand SGD from 117 thousand SGD in the prior year, mainly due to exchange losses, higher employee benefits expenses, and depreciation and amortization Loss Before Income Tax Deductions | Deducted Item | Six Months Ended June 30, 2025 (thousand SGD) | Six Months Ended June 30, 2024 (thousand SGD) | | :--- | :--- | :--- | | Cost of inventories sold | 1,684 | 1,565 | | Subcontractor fees | 131 | 95 | | Impairment (reversal)/provision for inventories | (20) | 217 | | Employee benefits expenses (including directors' emoluments) | 3,933 | 4,196 | | Depreciation expense of property, plant and equipment | 369 | 604 | | Depreciation expense of right-of-use assets | 166 | 186 | | Amortisation of intangible assets | 5 | 4 | | Operating lease expenses for short-term leases | 115 | 31 | | Mobile game research and development expenses (excluding staff costs, amortisation and depreciation expenses) | 26 | 23 | | Mobile game advertising | 317 | 174 | | Legal and professional fees | 154 | 201 | | Auditor's remuneration - audit services | 186 | 173 | - Loss before income tax increased from **117 thousand SGD** in the same period of 2024 to **3,589 thousand SGD** in 2025[32](index=32&type=chunk) - Employee benefits expenses, mobile game research and development expenses, and advertising expenses were key operating costs[32](index=32&type=chunk) [Income Tax Expense](index=13&type=section&id=3.10%20Income%20Tax%20Expense) For the six months ended June 30, 2025, income tax expense was 384 thousand SGD, an increase from the prior year, primarily due to higher taxable profits from the Singapore manufacturing business, with varying corporate income tax rates and preferential policies across operating regions Income Tax Expense | Metric | Six Months Ended June 30, 2025 (thousand SGD) | Six Months Ended June 30, 2024 (thousand SGD) | | :--- | :--- | :--- | | Current income tax | 391 | 343 | | Deferred income tax | (7) | (47) | | **Income tax expense** | **384** | **296** | - Income tax expense increased from **296 thousand SGD** in the same period of 2024 to **384 thousand SGD** in 2025[33](index=33&type=chunk) [Singapore Corporate Income Tax](index=13&type=section&id=3.10.1%20Singapore%20Corporate%20Income%20Tax) Singapore corporate income tax is calculated at a rate of 17% on the taxable income of subsidiaries incorporated in Singapore, consistent with the prior year's rate - Singapore corporate income tax is calculated at a rate of **17%**[34](index=34&type=chunk) - The rate applies to the taxable income of subsidiaries incorporated in Singapore, consistent with the 2024 comparative period[34](index=34&type=chunk) [Malaysia Corporate Income Tax](index=14&type=section&id=3.10.2%20Malaysia%20Corporate%20Income%20Tax) Malaysia corporate income tax is calculated at a rate of 24% on the taxable income of subsidiaries incorporated in Malaysia, consistent with the prior year's rate - Malaysia corporate income tax is calculated at a rate of **24%**[35](index=35&type=chunk) - The rate applies to the taxable income of subsidiaries incorporated in Malaysia, consistent with the 2024 comparative period[35](index=35&type=chunk) [China Corporate Income Tax](index=14&type=section&id=3.10.3%20China%20Corporate%20Income%20Tax) China's small and micro-profit enterprises enjoy tax incentives, with an effective corporate income tax rate of 5% on the first 3 million RMB of annual taxable income, a benefit utilized by one of the Group's subsidiaries - China's small and micro-profit enterprises enjoy tax incentives, with an effective corporate income tax rate of **5%** on the first **3 million RMB** of annual taxable income[36](index=36&type=chunk) - One of the Group's subsidiaries qualifies as a small and micro-profit enterprise and benefits from these tax incentives[36](index=36&type=chunk) [Hong Kong Profits Tax](index=14&type=section&id=3.10.4%20Hong%20Kong%20Profits%20Tax) Hong Kong Profits Tax operates on a two-tiered system, with the first 2 million HKD of profits taxed at 8.25% and the remainder at 16.5%; the Group's Hong Kong subsidiaries made no provision for profits tax due to no taxable profits - Hong Kong Profits Tax has a two-tiered system: the first **2 million HKD** of profits is taxed at **8.25%**, and the remainder at **16.5%**[37](index=37&type=chunk) - The Group's subsidiaries incorporated in Hong Kong made no provision for Hong Kong Profits Tax due to no taxable profits[37](index=37&type=chunk) [Cayman Islands and British Virgin Islands Corporate Income Tax](index=14&type=section&id=3.10.5%20Cayman%20Islands%20and%20British%20Virgin%20Islands%20Corporate%20Income%20Tax) For the six months ended June 30, 2025 and 2024, the Group was not subject to any taxation in the Cayman Islands and British Virgin Islands - The Group is not subject to any taxation in the Cayman Islands and British Virgin Islands[38](index=38&type=chunk) [Loss Per Share](index=14&type=section&id=3.11%20Loss%20Per%20Share) For the six months ended June 30, 2025, basic loss per share significantly expanded to 0.3973 Singapore cents from 0.0413 Singapore cents in the prior year; diluted loss per share was the same as basic loss per share due to the absence of dilutive potential shares - Basic loss per share is calculated by dividing the loss attributable to owners of the Company by the weighted average number of ordinary shares outstanding[39](index=39&type=chunk) [Basic](index=14&type=section&id=3.11.1%20Basic) For the six months ended June 30, 2025, the loss attributable to owners of the Company was 3,973 thousand SGD, with a weighted average of 1,000,000 thousand ordinary shares outstanding, resulting in a basic loss per share of 0.3973 Singapore cents Basic Loss Per Share | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Loss attributable to owners of the Company (thousand SGD) | (3,973) | (413) | | Weighted average number of ordinary shares outstanding (thousand shares) | 1,000,000 | 1,000,000 | | Basic loss per share (Singapore cents) | (0.3973) | (0.0413) | - Basic loss per share increased from **0.0413 Singapore cents** in the same period of 2024 to **0.3973 Singapore cents** in 2025[40](index=40&type=chunk) [Diluted](index=15&type=section&id=3.11.2%20Diluted) For the six months ended June 30, 2025 and 2024, diluted loss per share was equal to basic loss per share due to the absence of any dilutive potential ordinary shares - Diluted loss per share was equal to basic loss per share due to the absence of any dilutive potential ordinary shares[41](index=41&type=chunk) [Interim Dividend](index=15&type=section&id=3.12%20Interim%20Dividend) The Directors do not recommend the payment of an interim dividend for the six months ended June 30, 2025, consistent with the prior year - The Directors do not recommend the payment of an interim dividend for the six months ended June 30, 2025 (2024: nil)[42](index=42&type=chunk) [Property, Plant and Equipment](index=15&type=section&id=3.13%20Property,%20Plant%20and%20Equipment) As of June 30, 2025, the carrying amount of property, plant and equipment was 9,641 thousand SGD, a decrease from 9,969 thousand SGD at the beginning of the year, primarily affected by depreciation expense and currency translation differences Property, Plant and Equipment | Metric | Six Months Ended June 30, 2025 (thousand SGD) | Six Months Ended June 30, 2024 (thousand SGD) | | :--- | :--- | :--- | | At January 1 | 9,969 | 10,685 | | Additions | 60 | 165 | | Depreciation | (369) | (604) | | Disposals | – | – | | Currency translation differences | (19) | 10 | | **At June 30** | **9,641** | **10,256** | - The carrying amount of property, plant and equipment decreased from **9,969 thousand SGD** as of January 1, 2025, to **9,641 thousand SGD** as of June 30, 2025[43](index=43&type=chunk) - Depreciation expense was **369 thousand SGD**, with additions of **60 thousand SGD**[43](index=43&type=chunk) [Trade and Other Receivables](index=16&type=section&id=3.14%20Trade%20and%20Other%20Receivables) As of June 30, 2025, total trade and other receivables amounted to 2,931 thousand SGD, slightly lower than 3,119 thousand SGD as of December 31, 2024, with trade receivables primarily aged between 0 and 30 days Trade and Other Receivables | Metric | June 30, 2025 (thousand SGD) | December 31, 2024 (thousand SGD) | | :--- | :--- | :--- | | Trade receivables, net | 2,512 | 2,482 | | Prepayments | 183 | 273 | | Deposits | 74 | 73 | | Other receivables | 162 | 291 | | **Total** | **2,931** | **3,119** | Ageing Analysis of Trade Receivables | Trade Receivables Ageing | June 30, 2025 (thousand SGD) | December 31, 2024 (thousand SGD) | | :--- | :--- | :--- | | 0 to 30 days | 1,480 | 1,324 | | 31 to 60 days | 1,017 | 1,106 | | 61 to 90 days | 5 | 50 | | Over 90 days | 10 | 2 | | **Total** | **2,512** | **2,482** | - Net trade receivables were **2,512 thousand SGD**, with credit terms typically ranging from **30 to 90 days**[44](index=44&type=chunk) [Trade and Other Payables and Provision for Restoration Costs](index=17&type=section&id=3.15%20Trade%20and%20Other%20Payables%20and%20Provision%20for%20Restoration%20Costs) As of June 30, 2025, total trade and other payables amounted to 3,910 thousand SGD, slightly lower than 3,924 thousand SGD as of December 31, 2024, with trade payables primarily aged between 0 and 30 days Trade and Other Payables and Provision for Restoration Costs | Metric | June 30, 2025 (thousand SGD) | December 31, 2024 (thousand SGD) | | :--- | :--- | :--- | | Non-current provision for restoration costs | 102 | 100 | | Current trade payables | 1,399 | 913 | | Other payables and accrued expenses — accrued expenses | 2,246 | 2,660 | | Other payables and accrued expenses — others | 265 | 351 | | **Total current liabilities** | **3,910** | **3,924** | | **Total** | **4,012** | **4,024** | Ageing Analysis of Trade Payables | Trade Payables Ageing | June 30, 2025 (thousand SGD) | December 31, 2024 (thousand SGD) | | :--- | :--- | :--- | | 0 to 30 days | 356 | 434 | | 31 to 60 days | 283 | 438 | | 61 to 90 days | 155 | 362 | | Over 90 days | 41 | 243 | | **Total** | **913** | **1,399** | - Current trade payables increased from **913 thousand SGD** as of December 31, 2024, to **1,399 thousand SGD** as of June 30, 2025[45](index=45&type=chunk) [Contract Liabilities](index=18&type=section&id=3.16%20Contract%20Liabilities) As of June 30, 2025, contract liabilities were 119 thousand SGD, primarily comprising unamortized revenue from the sale of virtual mobile game items, expected to be fulfilled within one year or less Contract Liabilities | Metric | June 30, 2025 (thousand SGD) | December 31, 2024 (thousand SGD) | | :--- | :--- | :--- | | Sales of virtual game items | 119 | 385 | | **Total** | **119** | **385** | - Contract liabilities primarily consist of unamortized revenue from the sale of virtual mobile game items[46](index=46&type=chunk) - The Group expects to provide services to fulfill these contract liabilities within one year or less[47](index=47&type=chunk) [Borrowings](index=18&type=section&id=3.17%20Borrowings) As of June 30, 2025, the Group's total borrowings amounted to 14,138 thousand SGD, mainly comprising shareholder loans and other bank borrowings; shareholder loans are interest-free, unsecured, and for a five-year term, while other bank borrowings are secured by machinery Borrowings | Metric | June 30, 2025 (thousand SGD) | December 31, 2024 (thousand SGD) | | :--- | :--- | :--- | | Shareholder loans | 13,928 | 14,589 | | Other bank borrowings | 210 | 286 | | **Total borrowings** | **14,138** | **14,875** | | Of which non-current liabilities | 13,982 | 14,722 | | Current liabilities | 156 | 153 | - Shareholder loans are interest-free, unsecured, and for a five-year term, totaling **100 million HKD** (approximately **16.77 million SGD**)[49](index=49&type=chunk) - Other bank borrowings primarily refer to financing arrangements with banks for the purchase of machinery, secured by two machines[49](index=49&type=chunk) [Share Capital](index=19&type=section&id=3.18%20Share%20Capital) As of June 30, 2025, the Company's authorized share capital was 2,000,000,000 ordinary shares of 0.01 HKD each, totaling 3,390 thousand SGD; issued and fully paid share capital was 1,000,000,000 shares, totaling 1,695 thousand SGD, consistent with December 31, 2024 Share Capital | Share Capital Type | Number of Shares | Share Capital (thousand SGD) | | :--- | :--- | :--- | | Authorized share capital (ordinary shares of 0.01 HKD each) | 2,000,000,000 | 3,390 | | Issued and fully paid share capital (ordinary shares of 0.01 HKD each) | 1,000,000,000 | 1,695 | - The number and amount of issued and fully paid share capital remained unchanged during the reporting period[52](index=52&type=chunk) [Capital Commitments](index=19&type=section&id=3.19%20Capital%20Commitments) As of June 30, 2025, the Group's contracted but unprovided capital commitments were 90 thousand SGD, primarily related to the purchase of property, plant and equipment, consistent with December 31, 2024 Capital Commitments | Capital Commitment Item | June 30, 2025 (thousand SGD) | December 31, 2024 (thousand SGD) | | :--- | :--- | :--- | | Capital expenditure related to the purchase of property, plant and equipment | 90 | 90 | - The Group's capital commitments primarily relate to the purchase of property, plant and equipment, amounting to **90 thousand SGD**[52](index=52&type=chunk) Management Discussion and Analysis [Business Review](index=20&type=section&id=4.1%20Business%20Review) Both the Group's manufacturing and online businesses achieved growth during the reporting period; the manufacturing business benefited from increased demand in Singapore, with revenue growing 10.5%, while the online business saw revenue growth of 32.4% through new game testing and advertising investment - The Group operates two main business segments: Manufacturing Business and Online Business[53](index=53&type=chunk) [Manufacturing Business](index=20&type=section&id=4.1.1%20Manufacturing%20Business) The Manufacturing Business focuses on sheet metal fabrication for precision engineering and precision machining services, with production facilities in Singapore and Malaysia; benefiting from increased demand in the Singapore market, segment revenue grew by 10.5% year-on-year to approximately 6.8 million SGD - The Manufacturing Business segment is dedicated to sheet metal fabrication for precision engineering and precision machining services, with production facilities located in Singapore and Malaysia[54](index=54&type=chunk) - For the six months ended June 30, 2025, Manufacturing Business revenue was approximately **6.8 million SGD**, representing a **10.5%** increase from the same period last year[55](index=55&type=chunk) - Revenue growth was primarily driven by increased customer sales orders due to rising demand in the Singapore sheet metal manufacturing market[55](index=55&type=chunk) [Online Business](index=21&type=section&id=4.1.2%20Online%20Business) The Online Business focuses on mobile game development, publishing, and operations; during the reporting period, the latest game was in testing phase, undergoing trials in multiple regions with continuous advertising investment, leading to a 32.4% year-on-year revenue growth to approximately 1.2 million SGD - The Online Business has established a dedicated development team focused on creating mobile games for a global audience[56](index=56&type=chunk) - The latest game is in its testing phase, undergoing trials in the US, Canada, several European countries, and Asian markets, with continuous advertising investment[56](index=56&type=chunk) - For the six months ended June 30, 2025, Online Business revenue was approximately **1.2 million SGD**, representing a **32.4%** increase from the same period last year[56](index=56&type=chunk) [Business Outlook](index=21&type=section&id=4.1%20Business%20Outlook) Facing global economic uncertainties, the Group will strengthen customer relationships in its manufacturing business, upgrade machinery for efficiency, and actively control costs; the online business will enhance its product portfolio through game development and potential acquisitions, while the Board explores other opportunities for revenue diversification - The global economic outlook faces downside risks, including trade restrictions, geopolitical tensions, and widening fiscal deficits[57](index=57&type=chunk) - The Group will maintain close relationships with manufacturing business customers, deploy external development strategies, and upgrade machinery and utilize robotics to enhance production efficiency and competitiveness[58](index=58&type=chunk) - The Online Business will strengthen its product portfolio by developing and optimizing mobile game products, and potentially exploring opportunities to acquire high-quality mobile games[59](index=59&type=chunk) - The Board will also explore other business opportunities to diversify revenue streams, aiming to enhance the Group's performance and deliver long-term sustainable value to shareholders[59](index=59&type=chunk) [Financial Review](index=22&type=section&id=4.2%20Financial%20Review) For the six months ended June 30, 2025, the Group's revenue grew by 13.3%, with improvements in both gross profit and gross margin; however, net loss for the period significantly expanded due to exchange losses and increased R&D expenses, while administrative expenses decreased through cost-saving measures [Revenue](index=22&type=section&id=4.2.1%20Revenue) For the six months ended June 30, 2025, the Group's total revenue was 7,981 thousand SGD, a 13.3% increase from the prior year, primarily driven by increased revenue from the manufacturing business Revenue by Business Segment | Business Segment | Six Months Ended June 30, 2025 (thousand SGD) | Share (%) | Six Months Ended June 30, 2024 (thousand SGD) | Share (%) | | :--- | :--- | :--- | :--- | :--- | | Manufacturing Business | 6,797 | 85.16 | 6,149 | 87.31 | | Online Business | 1,184 | 14.84 | 894 | 12.69 | | **Total** | **7,981** | **100.00** | **7,043** | **100.00** | - The Group's revenue increased by approximately **0.9 million SGD** or **13.3%** compared to the same period in 2024[61](index=61&type=chunk) - This growth was primarily due to increased revenue from the Manufacturing Business, driven by rising demand in the Singapore sheet metal manufacturing market[61](index=61&type=chunk) [Gross Profit and Gross Margin](index=23&type=section&id=4.2.2%20Gross%20Profit%20and%20Gross%20Margin) The Group's gross profit increased from 2.8 million SGD in the prior year to 3.6 million SGD in 2025, with the gross margin improving from 40.0% to 45.2%, mainly attributable to increased revenue and improved gross margin in the manufacturing business - Gross profit increased by approximately **0.8 million SGD** from **2.8 million SGD** to **3.6 million SGD**[62](index=62&type=chunk) - Gross margin increased from **40.0%** to **45.2%**[62](index=62&type=chunk) - The increase in gross profit was primarily due to increased revenue and improved gross margin in the Manufacturing Business[62](index=62&type=chunk) [Other (Losses)/Gains, Net](index=23&type=section&id=4.2.3%20Other%20%28Losses%29%2FGains,%20Net) The Group recorded a net exchange loss of approximately 2.9 million SGD in H1 2025, compared to a net exchange gain of approximately 1.2 million SGD in the prior year, mainly due to the appreciation of the Singapore dollar against the US dollar and Hong Kong dollar - The Group recorded a net exchange loss of approximately **2.9 million SGD** in H1 2025[63](index=63&type=chunk) - In the same period of 2024, there was a net exchange gain of approximately **1.2 million SGD**[63](index=63&type=chunk) - The loss was primarily due to the appreciation of the Singapore dollar against the US dollar and Hong Kong dollar[63](index=63&type=chunk) [Administrative Expenses](index=23&type=section&id=4.2.4%20Administrative%20Expenses) The Group's administrative expenses decreased by 11.8% from 2.6 million SGD in the prior year to 2.3 million SGD in 2025, primarily due to effective cost-saving measures - Administrative expenses decreased by approximately **0.3 million SGD** or **11.8%** from **2.6 million SGD** to **2.3 million SGD**[64](index=64&type=chunk) - The decrease was primarily due to effective cost-saving measures[64](index=64&type=chunk) [Mobile Game Research and Development Expenses](index=23&type=section&id=4.2.5%20Mobile%20Game%20Research%20and%20Development%20Expenses) The Group's mobile game research and development expenses increased from 1.4 million SGD in the prior year to 1.5 million SGD in 2025, mainly due to higher staff costs incurred for developing and optimizing mobile games - Research and development expenses increased by approximately **0.1 million SGD** from **1.4 million SGD** to **1.5 million SGD**[65](index=65&type=chunk) - The increase in expenses was primarily due to higher staff costs incurred for developing and optimizing mobile games[65](index=65&type=chunk) [Income Tax Expense](index=23&type=section&id=4.2.6%20Income%20Tax%20Expense) The Group's income tax expense increased by 29.7% from 0.3 million SGD in the prior year to 0.4 million SGD in 2025, primarily due to increased taxable profits from the Singapore manufacturing business - Income tax expense increased by approximately **0.1 million SGD** or **29.7%** from **0.3 million SGD** to **0.4 million SGD**[66](index=66&type=chunk) - The increase was primarily due to increased taxable profits from the Singapore Manufacturing Business[66](index=66&type=chunk) [Loss for the Period Attributable to Owners of the Company](index=24&type=section&id=4.2.7%20Loss%20for%20the%20Period%20Attributable%20to%20Owners%20of%20the%20Company) Due to the aforementioned financial factors, the Group recorded a loss attributable to owners of the Company of approximately 3.97 million SGD in H1 2025, a significant increase from 0.41 million SGD in the prior year - Loss for the period attributable to owners of the Company was approximately **3.97 million SGD** (2024: loss of approximately **0.41 million SGD**)[67](index=67&type=chunk) [Interim Dividend](index=24&type=section&id=4.2.8%20Interim%20Dividend) The Board of Directors resolved not to declare any interim dividend for the six months ended June 30, 2025, consistent with the prior year - The Board of Directors resolved not to declare any interim dividend for the six months ended June 30, 2025 (2024: nil)[68](index=68&type=chunk) [Liquidity and Financial Resources](index=24&type=section&id=4.3%20Liquidity%20and%20Financial%20Resources) The Group's working capital and capital expenditure are primarily funded by equity, operating cash, trade finance, bank loans, and shareholder loans; as of June 30, 2025, net current assets were 33.0 million SGD, the current ratio was 7.4 times, and the gearing ratio was 52.5% - The Group's working capital and capital expenditure requirements are primarily funded through a combination of equity, cash generated from operations, trade finance, bank loans, and shareholder loans[69](index=69&type=chunk) - As of June 30, 2025, the Group's total equity attributable to owners of the Company was approximately **27.9 million SGD** (December 31, 2024: approximately **30.2 million SGD**)[69](index=69&type=chunk) Liquidity and Financial Resources | Metric | June 30, 2025 (million SGD) | December 31, 2024 (million SGD) | | :--- | :--- | :--- | | Net current assets | 33.0 | 35.6 | | Cash and cash equivalents and short-term bank deposits | 32.8 | 36.3 | | Borrowings | 14.1 | 14.9 | | Lease liabilities | 0.5 | 0.7 | | Current ratio | 7.4 times | 7.2 times | | Gearing ratio | 52.5% | 51.6% | [Capital Structure](index=25&type=section&id=4.4%20Capital%20Structure) There have been no changes to the Group's capital structure since the Company's shares were listed on the Main Board of the Stock Exchange, with share capital consisting solely of ordinary shares - There have been no changes to the Group's capital structure since the Company's shares were listed on the Main Board of the Stock Exchange[73](index=73&type=chunk) - The Company's share capital consists solely of ordinary shares[73](index=73&type=chunk) [Pledge of Assets](index=25&type=section&id=4.5%20Pledge%20of%20Assets) As of June 30, 2025, the Group's other bank borrowings were secured by machinery with a carrying amount of 0.4 million SGD, a decrease from 0.5 million SGD as of December 31, 2024 - The Group's other bank borrowings are secured by the Group's machinery with a carrying amount of **0.4 million SGD** (December 31, 2024: **0.5 million SGD**)[74](index=74&type=chunk) [Material Investments, Material Acquisitions and Disposals of Subsidiaries, Associates and Joint Ventures](index=25&type=section&id=4.6%20Material%20Investments,%20Material%20Acquisitions%20and%20Disposals%20of%20Subsidiaries,%20Associates%20and%20Joint%20Ventures) 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[75](index=75&type=chunk) [Future Plans for Material Investments or Capital Assets](index=25&type=section&id=4.7%20Future%20Plans%20for%20Material%20Investments%20or%20Capital%20Assets) Other than those disclosed in the prospectus, the Group had no other future plans for material investments or additions to capital assets as of June 30, 2025 - Other than those disclosed in the prospectus, the Group had no other future plans for material investments or additions to capital assets as of June 30, 2025[76](index=76&type=chunk) [Contingent Liabilities](index=25&type=section&id=4.8%20Contingent%20Liabilities) As of June 30, 2025, the Group had no material contingent liabilities, guarantees, or lawsuits that would significantly impact its financial position or operating results - As of June 30, 2025, the Group had no material contingent liabilities, guarantees, or lawsuits that would significantly impact its financial position or operating results[77](index=77&type=chunk) [Capital Commitments](index=26&type=section&id=4.9%20Capital%20Commitments) As of June 30, 2025, the Group's capital commitments were approximately 0.09 million SGD, related to the purchase of property, plant and equipment, consistent with December 31, 2024 - The Group's capital commitments were approximately **0.09 million SGD** (December 31, 2024: **0.09 million SGD**) related to the purchase of property, plant and equipment[78](index=78&type=chunk) [Events After the Reporting Period](index=26&type=section&id=4.10%20Events%20After%20the%20Reporting%20Period) There have been no significant events after the reporting period up to the date of this announcement - There have been no significant events after the reporting period up to the date of this announcement[79](index=79&type=chunk) [Foreign Exchange Risk](index=26&type=section&id=4.11%20Foreign%20Exchange%20Risk) The Group faces foreign exchange risk from fluctuations in the SGD against the USD and HKD, primarily arising from transactions and asset/liability balances denominated in these currencies; no derivative instruments or hedging were used during the reporting period, and management will monitor and consider hedging significant risks - The Group is exposed to foreign exchange risk due to fluctuations in the exchange rates of the Singapore dollar against the US dollar and Hong Kong dollar[80](index=80&type=chunk) - This risk arises from transactions and asset/liability balances denominated in US dollars and Hong Kong dollars[80](index=80&type=chunk) - No derivative instruments or financial instruments were used to hedge foreign exchange risk during the reporting period, and management will monitor and consider hedging when necessary[80](index=80&type=chunk) [Employees and Remuneration Policy](index=26&type=section&id=4.12%20Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the Group employed 208 full-time and part-time employees, a decrease from 229 as of December 31, 2024; remuneration is determined based on qualifications, experience, and performance, with directors' remuneration reviewed by the Remuneration Committee and approved by the Board - As of June 30, 2025, the Group employed **208** full-time and part-time employees (December 31, 2024: **229** employees)[81](index=81&type=chunk) - Employee salaries are determined based on each employee's qualifications, experience, performance, and suitability[81](index=81&type=chunk) - Directors' remuneration is reviewed by the Remuneration Committee and approved by the Board[81](index=81&type=chunk) [Share Option Scheme](index=27&type=section&id=4.13%20Share%20Option%20Scheme) The Company adopted a share option scheme in 2018 to reward and retain employees; as of June 30, 2025, no options had been granted, exercised, cancelled, or lapsed under the scheme, with an authorized limit for 100,000,000 share options - The Company adopted a share option scheme on June 22, 2018, to reward or compensate employees, and to recruit and retain talent[82](index=82&type=chunk) - Since the adoption of the scheme, no share options have been granted, exercised, cancelled, or lapsed[82](index=82&type=chunk) - As of June 30, 2025, the number of share options available for grant under the scheme's authorized limit was **100,000,000** shares[82](index=82&type=chunk) [Corporate Governance](index=27&type=section&id=4.14%20Corporate%20Governance) The Company is committed to maintaining high standards of corporate governance and has adopted and complied with all applicable code provisions of the Corporate Governance Code set out in Appendix C1 Part 2 of the Listing Rules - The Company is committed to achieving and maintaining high standards of corporate governance to protect shareholders' interests, enhance corporate value, and ensure accountability[83](index=83&type=chunk) - The Company has adopted and complied with all applicable code provisions of the Corporate Governance Code set out in Appendix C1 Part 2 of the Listing Rules[83](index=83&type=chunk) [Changes in Directors' Information](index=27&type=section&id=4.15%20Changes%20in%20Directors%27%20Information) Ms. Leung Tsz Ying was appointed as a member of the Nomination Committee on March 25, 2025; Mr. Wong Po Keung was appointed as an independent non-executive director and committee member of Wai Chun Bio-Technology and Wai Chun Group Holdings on May 12, 2025 - Ms. Leung Tsz Ying was appointed as a member of the Company's Nomination Committee, effective March 25, 2025[84](index=84&type=chunk) - Mr. Wong Po Keung was appointed as an independent non-executive director and chairman of the audit committee of Wai Chun Bio-Technology and Wai Chun Group Holdings, and a member of other committees, effective May 12, 2025[84](index=84&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=28&type=section&id=4.16%20Purchase,%20Sale%20or%20Redemption%20of%20the%20Company%27s%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, and the Company held no treasury shares - 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[86](index=86&type=chunk) - The Company held no treasury shares[86](index=86&type=chunk) [Audit Committee](index=28&type=section&id=4.17%20Audit%20Committee) The Company's Audit Committee has reviewed the Group's unaudited condensed consolidated interim results for the six months ended June 30, 2025, and discussed accounting principles and practices with management, with no disagreements - The Audit Committee has reviewed the Group's unaudited condensed consolidated interim results for the six months ended June 30, 2025[87](index=87&type=chunk) - The Audit Committee discussed the accounting principles and practices adopted by the Group with management and had no disagreements[87](index=87&type=chunk) [Directors' Securities Transactions](index=28&type=section&id=4.18%20Directors%27%20Securities%20Transactions) The Group has adopted the Model Code set out in Appendix C3 of the Listing Rules as the code of conduct for directors' securities transactions; all directors confirmed full compliance with the Model Code for the six months ended June 30, 2025 - The Group has adopted the Model Code set out in Appendix C3 of the Listing Rules as the code of conduct for directors' securities transactions[88](index=88&type=chunk) - All directors confirmed full compliance with the Model Code for the six months ended June 30, 2025[88](index=88&type=chunk) [Publication of Interim Results and Interim Report](index=28&type=section&id=4.19%20Publication%20of%20Interim%20Results%20and%20Interim%20Report) This interim results announcement will be published on the HKEX website and the Company's website; the interim report for the six months ended June 30, 2025, will be dispatched to shareholders (upon request) and published on the HKEX and Company websites in due course - This interim results announcement will be published on the HKEX website (www.hkex.com.hk) and the Company's website (www.fsmtech.com)[89](index=89&type=chunk) - The interim report for the six months ended June 30, 2025, will be dispatched to the Company's shareholders (upon request) and published on the HKEX and Company websites in due course[89](index=89&type=chunk)

[Company Information and Performance Overview](index=1&type=section&id=I.%20%E5%85%AC%E5%8F%B8%E4%BF%A1%E6%81%AF%E4%B8%8E%E4%B8%9A%E7%BB%A9%E6%A6%82%E8%A7%88) [Performance Highlights](index=1&type=section&id=%E6%A5%AD%E7%B8%BE%E6%91%98%E8%A6%81) For the six months ended June 30, 2025, core TV-related business revenue slightly increased by 1% to HK$1,454 million, while total group revenue marginally decreased by 1% to HK$1,498 million. EBITDA improved by 17% year-on-year to HK$55 million, and loss attributable to company shareholders narrowed by 24% to HK$108 million, with loss per share decreasing to HK$0.23. The Board does not recommend an interim dividend Performance Highlights | Metric | H1 2025 (HK$) | H1 2024 (HK$) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Core TV-related Business Revenue | 1,454,000,000 | 1,445,000,000 | +1% | | Group Total Revenue | 1,498,000,000 | 1,513,000,000 | -1% | | EBITDA | 55,000,000 | 47,000,000 | +17% | | Loss Attributable to Company Shareholders | 108,000,000 | 143,000,000 | -24% | | Loss Per Share | 0.23 | 0.33 | -0.10 | | Interim Dividend | 无 | 无 | - | [Business Highlights](index=2&type=section&id=%E6%A5%AD%E5%8B%99%E6%91%98%E8%A6%81) The company's terrestrial TV channels maintain leading viewership and advertising market share in Hong Kong, with advertising revenue growing by 4% and Greater Bay Area 'B-roll' advertising product revenue increasing by 171%. The digital media segment performed strongly, with myTV SUPER monthly active users around 2 million and digital asset advertising revenue growing by 37%, benefiting from the 'TV 3.0' free service tier. Mainland China business revenue decreased by 8% due to delayed delivery of co-production projects, but is expected to increase in the second half. The company actively expanded into the Greater Bay Area market, signing cooperation agreements with Tencent, Huawei, and other partners - Terrestrial TV channel advertising revenue increased year-on-year by **4%**, benefiting from advertising campaigns by blue-chip corporate clients and Greater Bay Area 'B-roll' advertising products (revenue growth of **171%**)[4](index=4&type=chunk) - The digital media segment performed strongly, with myTV SUPER streaming service having approximately **2 million** monthly active users in Hong Kong, and digital asset advertising revenue increased year-on-year by **37%**, primarily due to the 'TV 3.0' new initiative[4](index=4&type=chunk) - Mainland China business revenue decreased year-on-year by **8%**, mainly due to delayed delivery of co-production projects with Mainland China platform partners, with increased deliveries expected in the second half[4](index=4&type=chunk) - The company actively expanded into the Greater Bay Area market, holding a press conference in Guangzhou and signing cooperation agreements with key partners including Tencent, Huawei, and Shenzhen Media Group[4](index=4&type=chunk) [Outlook](index=3&type=section&id=%E5%B1%95%E6%9C%9B) Despite economic challenges in Hong Kong, the company remains cautiously optimistic about the advertising business prospects for terrestrial TV and digital media in the second half. Digital media segment revenue is expected to maintain its upward trend, and Mainland China business revenue is also anticipated to strengthen. The company projects continued year-on-year EBITDA improvement and positive net profit attributable to shareholders for FY2025 - Cautiously optimistic about the advertising business prospects from terrestrial TV channels and digital media assets for the remainder of 2025[5](index=5&type=chunk) - Digital media segment revenue is expected to maintain its upward trend in H2 2025, with digital advertising revenue as the primary growth driver[5](index=5&type=chunk) - Mainland China business revenue is expected to strengthen in H2 2025, as co-produced drama series will be completed and delivered[5](index=5&type=chunk) - EBITDA is expected to continue year-on-year improvement and achieve positive net profit (attributable to company shareholders) for the year ended December 31, 2025[5](index=5&type=chunk) [Financial Review and Segment Performance](index=4&type=section&id=II.%20%E8%B4%A2%E5%8A%A1%E5%9B%9E%E9%A1%B5%E4%B8%8E%E5%88%86%E9%83%A8%E4%B8%9A%E7%BB%A9) [Financial Review (Consolidated Statements)](index=4&type=section&id=%E8%B2%A1%E5%8B%99%E5%9B%9E%E9%A1%A7) The Group's total revenue remained largely stable at HK$1,498 million, with a slight year-on-year decrease of 1%. Strong performance in television broadcasting advertising revenue and digital media was offset by weaker performance in Mainland China business, international business, and e-commerce (now integrated into the television broadcasting segment). Total operating costs decreased by 3% to HK$1,568 million, primarily due to reductions in content costs, e-commerce related sales costs, distribution costs, and administrative expenses. EBITDA improved by 17% year-on-year to HK$55 million Consolidated Statements Key Financial Data | Metric | H1 2025 (HK$ thousand) | H1 2024 (HK$ thousand) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 1,497,766 | 1,512,689 | -1% | | Cost of Sales | (938,265) | (948,235) | -1% | | Selling, Distribution and Broadcasting Costs | (251,538) | (271,624) | -7% | | General and Administrative Expenses | (377,823) | (402,515) | -6% | | Total Operating Costs | (1,567,626) | (1,622,374) | -3% | | EBITDA | 55,206 | 47,350 | +17% | - Total operating costs decreased by **HK$54 million** or **3%**, primarily due to savings in content costs, e-commerce related sales costs, distribution costs, and administrative expenses[7](index=7&type=chunk)[8](index=8&type=chunk) [Segment Analysis](index=7&type=section&id=%E6%A5%AD%E5%8B%99%E5%88%86%E9%83%A8%E5%88%86%E6%9E%90) During the period, the Group adjusted its segment structure, integrating e-commerce business into the 'Television Broadcasting' segment and establishing a new 'Digital Media' segment covering myTV SUPER and all Hong Kong digital-related businesses. Revenue and EBITDA are currently reported across four segments: Television Broadcasting, Digital Media, Mainland China Business, and International Business - Segment structure change: e-commerce business integrated into 'Television Broadcasting' segment; new 'Digital Media' segment established, covering myTV SUPER and all Hong Kong digital-related businesses[11](index=11&type=chunk) - Revenue and EBITDA are currently reported across four segments: Television Broadcasting, Digital Media, Mainland China Business, and International Business[11](index=11&type=chunk) [Television Broadcasting](index=7&type=section&id=%E9%9B%BB%E8%A6%96%E5%BB%A3%E6%92%AD) Television Broadcasting segment revenue grew by 1% to HK$818 million, primarily driven by a 4% increase in advertising client revenue, though partially offset by a significant contraction in the integrated e-commerce business. Segment EBITDA loss improved by 6% to HK$15 million | Metric | H1 2025 (HK$ hundred million) | H1 2024 (HK$ hundred million) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Segment Revenue | 8.18 | 8.10 | +1% | | Segment EBITDA | (0.15) | (0.16) | +6% | - Advertising client revenue increased by **4%** to **HK$695 million**, driving segment revenue growth[12](index=12&type=chunk) [Digital Media](index=7&type=section&id=%E6%95%B8%E5%AD%97%E5%AA%92%E9%AB%94) Digital Media segment revenue increased by 9% to HK$191 million, primarily driven by a 37% growth in advertising business across all digital media assets. However, EBITDA decreased by 41% to HK$19 million, mainly due to increased costs resulting from content cost allocation adjustments | Metric | H1 2025 (HK$ hundred million) | H1 2024 (HK$ hundred million) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Segment Revenue | 1.91 | 1.76 | +9% | | Segment EBITDA | 0.19 | 0.32 | -41% | - Digital media asset advertising business grew by **37%**, driving segment revenue increase of **HK$15 million**[14](index=14&type=chunk) - EBITDA decrease primarily due to a one-time adjustment in content cost allocation leading to increased costs[14](index=14&type=chunk) [Mainland China Business](index=8&type=section&id=%E4%B8%AD%E5%9C%8B%E5%85%A7%E5%9C%B0%E6%A5%AD%E5

[Performance Summary](index=4&type=section&id=%E8%A1%A8%E7%8F%BE%E6%91%98%E8%A6%81) [Key Financial Performance in H1 2025](index=4&type=section&id=%E8%A1%A8%E7%8F%BE%E6%91%98%E8%A6%81) In the first half of 2025, the company achieved operating revenue of **49.601 billion yuan**, a year-on-year increase of **2.8%**; profit attributable to the company's shareholders was **5.757 billion yuan**, up **8.0%**; EBITDA grew by **3.6%** to **34.227 billion yuan**, and basic earnings per share were **0.3293 yuan** Key Financial Indicators for H1 2025 | Million Yuan | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Operating Revenue | 49,601 | 48,247 | 2.8% | | Operator Business | 42,461 | 42,121 | 0.8% | | Smart Link Business | 4,726 | 3,982 | 18.7% | | Energy Business | 2,209 | 2,023 | 9.2% | | Operating Profit | 8,629 | 8,146 | 5.9% | | EBITDA | 34,227 | 33,045 | 3.6% | | Profit Attributable to Company Shareholders | 5,757 | 5,330 | 8.0% | | Capital Expenditure | 12,392 | 13,729 | -9.7% | | Net Cash Flow from Operating Activities | 28,679 | 32,830 | -12.6% | | Basic Earnings Per Share (Yuan) | 0.3293 | (Restated) 0.3049 | 8.0% | [Chairman's Report](index=5&type=section&id=%E8%91%A3%E4%BA%8B%E9%95%B7%E5%A0%B1%E5%91%8A%E6%9B%B8) [Strategic Positioning and Overall Performance](index=5&type=section&id=%E6%88%B0%E7%95%A5%E5%AE%9A%E4%BD%8D%E8%88%87%E6%95%B4%E9%AB%94%E6%A5%AD%E7%B8%BE) The company is strategically positioned as a world-class digital infrastructure and information/new energy application service provider, deepening its "One Body, Two Wings" strategy, achieving steady growth and new strides in high-quality development in H1 - Strategic Positioning: World-class digital infrastructure comprehensive service provider, information application service provider with core competitiveness, and new energy application service provider with core competitiveness[13](index=13&type=chunk) - Strategic Deepening: "One Body, Two Wings" strategy[13](index=13&type=chunk) - Overall Performance: Maintained **steady growth**, with the company making new strides in high-quality development[13](index=13&type=chunk) [Financial Performance](index=5&type=section&id=%E8%B2%A1%E5%8B%99%E8%A1%A8%E7%8F%BE) In H1 2025, the company's operating revenue, EBITDA, and profit attributable to shareholders all increased, demonstrating strengthened profitability and a robust financial position, with an interim dividend declared Key Financial Indicators for H1 2025 | Indicator | H1 2025 (Million Yuan) | YoY Change | | :--- | :--- | :--- | | Operating Revenue | 49,601 | +2.8% | | EBITDA | 34,227 | +3.6% | | Profit Attributable to Company Shareholders | 5,757 | +8.0% | | Net Cash Flow from Operating Activities | 28,679 | -12.6% | | Capital Expenditure | 12,392 | -9.7% | | Free Cash Flow | 16,287 | -2.814 billion yuan | | Total Assets (as of June 30) | 331,127 | - | | Net Debt Leverage Ratio (as of June 30) | 29.5% | Decreased by 1.5 percentage points from year-end | - The Board decided to declare an interim dividend of **RMB 0.13250 per share** (pre-tax), striving for good growth in full-year dividends per share[15](index=15&type=chunk) [Business Performance](index=6&type=section&id=%E6%A5%AD%E5%8B%99%E8%A1%A8%E7%8F%BE) The company optimized resource allocation and deepened reform and innovation in H1, driving stable and improved business development, enhancing core competitiveness, with stable operator business and rapid growth in "Two Wings" businesses [Operator Business](index=6&type=section&id=%E9%81%8B%E7%87%9F%E5%95%86%E6%A5%AD%E5%8B%99) The company leveraged its role as a national team for mobile communication infrastructure, seized 5G network expansion opportunities, and enhanced resource sharing and specialized operation capabilities, maintaining stable operator business revenue and high growth in indoor distribution Operator Business Revenue for H1 2025 | Business Type | H1 2025 (Million Yuan) | YoY Growth | | :--- | :--- | :--- | | Total Operator Business Revenue | 42,461 | +0.8% | | Tower Business | 37,797 | Basically flat | | Indoor Distribution Business | 4,664 | +12.0% | - As of the end of June 2025, the company's tower sites numbered **2.119 million units**, an increase of **25,000** from the end of last year; operator tower tenants numbered **3.579 million users**, an increase of **35,000** from the end of last year, with an average of **1.72 tenants per site**[18](index=18&type=chunk) - As of June 2025, cumulative indoor distribution coverage area for buildings reached **13.85 billion square meters**, a year-on-year increase of **20.0%**; cumulative coverage mileage for high-speed rail tunnels and subways reached **30,878 kilometers**, a year-on-year increase of **17.0%**[19](index=19&type=chunk) [Two Wings Businesses](index=7&type=section&id=%E5%85%A9%E7%BF%BC%E6%A5%AD%E5%8B%99) The "Two Wings" businesses achieved rapid revenue growth by strengthening product innovation and optimizing business layout, increasing their share of operating revenue to **14.0%**, with strong performance in both Smart Link and Energy businesses Two Wings Businesses Revenue for H1 2025 | Business Type | H1 2025 (Million Yuan) | YoY Growth | % of Operating Revenue | | :--- | :--- | :--- | :--- | | Total Two Wings Businesses Revenue | 6,935 | - | 14.0% (up 1.6 percentage points) | | Smart Link Business | 4,726 | +18.7% | - | | Energy Business | 2,209 | +9.2% | - | [Smart Link Business](index=7&type=section&id=%E6%99%BA%E8%81%AF%E6%A5%AD%E5%8B%99) The Smart Link business focused on digital governance of space, leveraging resource endowments and capabilities to deepen customer relationships, refine products, optimize services, and strengthen security, achieving **4.726 billion yuan** in revenue, up **18.7%** - Focus Areas: Digital governance of space, serving national strategies and major projects[20](index=20&type=chunk) - Revenue Composition: Tower Vision Link business achieved revenue of **2.822 billion yuan**, accounting for **59.7%** of Smart Link business revenue[22](index=22&type=chunk) [Energy Business](index=8&type=section&id=%E8%83%BD%E6%BA%90%E6%A5%AD%E5%8B%99) The Energy business focused on core services like battery swap and backup power, deeply cultivating the C-end food delivery market and B-end customers, accelerating community charging network construction, and promoting "Backup Power+" integrated solutions, achieving **2.209 billion yuan** in revenue, up **9.2%** - Battery Swap Business: As of June 30, 2025, Tower Battery Swap users numbered approximately **1.47 million**, an increase of **166,000** from the end of last year, maintaining a leading position in the low-speed electric vehicle battery swap market[22](index=22&type=chunk) - Revenue Composition: Tower Battery Swap business achieved revenue of **1.323 billion yuan**, accounting for **59.9%** of Energy business revenue[22](index=22&type=chunk) - Backup Power Business: Deeply cultivated key industries such as communications and finance, and typical scenarios, promoting "Backup Power+" integrated industry solutions, and forging the "Tower Energy Butler" brand[22](index=22&type=chunk) [Technology Leadership, Steady Improvement in Innovation Efficiency](index=8&type=section&id=%E7%A7%91%E6%8A%80%E5%BC%95%E9%A0%98%EF%BC%8C%E5%89%B5%E6%96%B0%E6%95%88%E8%83%BD%E7%A9%A9%E6%AD%A5%E6%8F%90%E5%8D%87) The company strengthened technology innovation in H1, increasing R&D in next-generation mobile communication, AI, and edge computing, promoting technology commercialization, with R&D personnel up **29%** YoY and authorized invention patents up **16%** from end-2024 - R&D Focus: Strengthening R&D in key core technologies such as next-generation mobile communication, artificial intelligence, edge computing, 5G+Beidou, 5G shared indoor distribution, new energy, and IoT[23](index=23&type=chunk) - R&D Personnel: The number of R&D personnel in H1 2025 increased by **29%** compared to the same period last year[23](index=23&type=chunk) - Invention Patents: Cumulative authorized invention patents increased by **16%** compared to the end of 2024[23](index=23&type=chunk) [Corporate Governance and Social Responsibility](index=9&type=section&id=%E5%85%AC%E5%8F%B8%E6%B2%BB%E7%90%86%E5%92%8C%E7%A4%BE%E6%9C%83%E8%B2%AC%E4%BB%BB) The company prioritizes sustainable development, actively practices ESG responsibilities, adheres to green development, enhances social welfare, and continuously improves corporate governance to protect shareholders' legitimate rights - Green Development: Promoting resource recycling, increasing the scale of clean energy applications like photovoltaics; empowering atmospheric, water, and soil pollution prevention and control, and ecological protection with digital intelligence technology; providing diverse new energy application services to reduce carbon emissions[25](index=25&type=chunk) - Social Welfare: Successfully completing communication support for major events, providing emergency warning for forest fire prevention and flood control; improving communication infrastructure in rural and remote areas to assist rural revitalization[25](index=25&type=chunk) - Corporate Governance: Strictly complying with listing regulatory rules, optimizing corporate governance mechanisms, enhancing legal and compliant operation and management; strengthening capital market communication and exchange, and reinforcing investor relations maintenance[25](index=25&type=chunk) [Future Outlook](index=9&type=section&id=%E6%9C%AA%E4%BE%86%E5%B1%95%E6%9C%9B) The company will continue to uphold the shared development concept, adhere to the "One Body, Two Wings" strategic layout, continuously enhance core competitiveness, drive high-quality development, and define future directions and goals for operator, Smart Link, and Energy businesses - Overall Strategy: Upholding the shared development concept, adhering to the "One Body, Two Wings" strategic layout, continuously enhancing core competitiveness, and promoting the company's high-quality development[26](index=26&type=chunk) - Operator Business: Seizing national policy opportunities such as 5G-A construction, signal upgrades, and broadband expansion in border areas, enhancing resource coordination, construction delivery, and solution innovation capabilities to achieve steady growth[26](index=26&type=chunk) - Smart Link Business: Deepening the innovative application of digital intelligence technology in social governance, leveraging "location + computing + power + security" advantages, and strategically deploying emerging industries such as edge computing[29](index=29&type=chunk) - Energy Business: Optimizing the layout of battery swap networks in core business districts, deepening the operation of the VIP star-rated user system, and expanding user scale; deeply cultivating key industry markets and promoting "Backup Power+" integrated industry solutions[29](index=29&type=chunk) - Technology Innovation: Continuously focusing on core technology breakthroughs, increasing the promotion and commercialization of scientific and technological achievements, accelerating the integrated development of scientific and technological innovation and industrial innovation, and fostering new quality productive forces[29](index=29&type=chunk) [Acknowledgements](index=10&type=section&id=%E8%87%B4%E8%AC%9D) The Chairman expresses sincere gratitude for the support and contributions of resigned directors, newly appointed directors, all employees, customers, and shareholders - Objects of Gratitude: Sincere thanks to Mr. Tang Yongbo, Mr. Dong Chunbo, and Mr. Xian Handi, who resigned as company directors, Mr. Cheng Jianjun, Mr. Miao Shouye, Mr. Pei Zhenjiang, and Mr. Wen Bugao, who newly joined as directors, as well as all employees, customers, and all shareholders[29](index=29&type=chunk)[30](index=30&type=chunk) [Financial Overview](index=11&type=section&id=%E8%B2%A1%E5%8B%99%E6%A6%82%E8%A7%88) [Operating Revenue](index=11&type=section&id=%E7%87%9F%E6%A5%AD%E6%94%B6%E5%85%A5) Operating revenue reached **49.601 billion yuan** in H1 2025, a **2.8%** YoY increase, with growth across operator, Smart Link, and Energy businesses, and non-tower business revenue share rising to **23.8%** Operating Revenue Composition for H1 2025 | Business Type | H1 2025 (Billion Yuan) | YoY Growth | | :--- | :--- | :--- | | Total Operating Revenue | 496.01 | +2.8% | | Operator Business | 424.61 | +0.8% | | Smart Link Business | 47.26 | +18.7% | | Energy Business | 22.09 | +9.2% | - Revenue structure continued to optimize, with non-tower business revenue, including indoor distribution and "Two Wings" businesses, increasing its share of operating revenue from **21.3%** in the same period last year to **23.8%**[32](index=32&type=chunk) [Operating Expenses](index=11&type=section&id=%E7%87%9F%E6%A5%AD%E9%96%8B%E6%94%AF) Total operating costs in H1 amounted to **40.972 billion yuan**, up **2.2%** YoY, with its share of operating revenue decreasing by **0.5 percentage points** to **82.6%**, effectively controlled through cost benchmarking and lean operations Operating Cost Overview for H1 2025 | Indicator | H1 2025 (Billion Yuan) | YoY Change | Change in % of Operating Revenue | | :--- | :--- | :--- | :--- | | Total Operating Costs | 409.72 | +2.2% | -0.5 percentage points (to 82.6%) | [Depreciation and Amortization](index=11&type=section&id=%E6%8A%98%E8%88%8A%E5%8F%8A%E6%94%A4%E9%8A%B7) Depreciation and amortization totaled **25.598 billion yuan** in H1, up **2.8%** YoY, mainly due to increased depreciation from assets formed by past investments to meet new construction demands and ongoing asset inspection - Depreciation and Amortization: **25.598 billion yuan**, a year-on-year increase of **2.8%**[33](index=33&type=chunk) [Maintenance Expenses](index=11&type=section&id=%E7%B6%AD%E8%AD%B7%E8%B2%BB%E7%94%A8) Maintenance expenses totaled **3.187 billion yuan** in H1, down **6.2%** YoY, primarily due to improved equipment quality and cost control, with its share of operating revenue decreasing by **0.6 percentage points** - Maintenance Expenses: **3.187 billion yuan**, a year-on-year decrease of **6.2%**[34](index=34&type=chunk) - Maintenance Expenses as % of Operating Revenue: Decreased by **0.6 percentage points** compared to the same period last year[34](index=34&type=chunk) [Staff Costs](index=12&type=section&id=%E4%BA%BA%E5%B7%A5%E6%88%90%E6%9C%AC) Staff costs totaled **4.767 billion yuan** in H1, an increase of **0.392 billion yuan** YoY, mainly due to R&D innovation, regional reforms, moderate recruitment of high-end tech talent and frontline staff, and performance-linked incentives - Staff Costs: **4.767 billion yuan**, a year-on-year increase of **0.392 billion yuan**[35](index=35&type=chunk) [Site Operation and Support Expenses](index=12&type=section&id=%E7%AB%99%E5%9D%80%E9%81%8B%E7%87%9F%E5%8F%8A%E6%94%AF%E6%92%90%E8%B2%BB) Site operation and support expenses totaled **2.535 billion yuan** in H1, a decrease of **0.367 billion yuan** YoY, achieved through precise rectification of external power, enhanced battery backup capabilities, and reasonable control of site rental renewal increases - Site Operation and Support Expenses: **2.535 billion yuan**, a year-on-year decrease of **0.367 billion yuan**[36](index=36&type=chunk) [Other Operating Expenses](index=12&type=section&id=%E5%85%B6%E4%BB%96%E7%87%9F%E9%81%8B%E9%96%8B%E6%94%AF) Other operating expenses totaled **4.885 billion yuan** in H1, an increase of **0.357 billion yuan** YoY, with **0.281 billion yuan** attributed to increased business expansion costs for "Two Wings" businesses, including technical support services and market promotion - Other Operating Expenses: **4.885 billion yuan**, a year-on-year increase of **0.357 billion yuan**[37](index=37&type=chunk) - Two Wings Business Expansion Costs: Increased by **0.281 billion yuan** year-on-year[37](index=37&type=chunk) [Finance Costs](index=12&type=section&id=%E8%9E%8D%E8%B3%87%E6%88%90%E6%9C%AC) Net finance costs in H1 were **1.236 billion yuan**, consistent with the prior year, reflecting a prudent financing strategy and centralized fund management - Net Finance Costs: **1.236 billion yuan**, consistent with the same period last year[38](index=38&type=chunk) [Profitability](index=12&type=section&id=%E7%87%9F%E5%88%A9%E6%B0%B4%E5%B9%B3) In H1, the company achieved an operating profit of **8.629 billion yuan**, profit attributable to shareholders of **5.757 billion yuan**, up **8.0%** YoY; EBITDA was **34.227 billion yuan**, up **3.6%** YoY, with EBITDA as a percentage of operating revenue increasing by **0.5 percentage points** to **69.0%** Profitability Indicators for H1 2025 | Indicator | H1 2025 (Billion Yuan) | YoY Growth | | :--- | :--- | :--- | | Operating Profit | 86.29 | - | | Profit Attributable to Company Shareholders | 57.57 | +8.0% | | EBITDA | 342.27 | +3.6% | | EBITDA as % of Operating Revenue | 69.0% | Up 0.5 percentage points | [Capital Expenditure and Cash Flow](index=13&type=section&id=%E8%B3%87%E6%9C%AC%E9%96%8B%E6%94%AF%E5%8F%8A%E7%8F%BE%E9%87%91%E6%B5%81%E9%87%8F) Capital expenditure in H1 was **12.392 billion yuan**, a decrease of **1.337 billion yuan** YoY, with reduced capital expenditure for new site construction and sharing upgrades, but increased for "Two Wings" businesses and IT/R&D. Net cash flow from operating activities was **28.679 billion yuan**, a decrease of **4.151 billion yuan** YoY Capital Expenditure and Cash Flow for H1 2025 | Indicator | H1 2025 (Billion Yuan) | YoY Change | | :--- | :--- | :--- | | Total Capital Expenditure | 123.92 | -13.37 | | Capital Expenditure for New Site Construction and Sharing Upgrades | 66.0 | -14.35 | | Capital Expenditure for Site Renovation and Upgrades | 23.77 | -8.29 | | Capital Expenditure for Two Wings Businesses | 24.75 | +5.95 | | Capital Expenditure for IT Support and R&D | 9.40 | +3.32 | | Net Cash Flow from Operating Activities | 286.79 | -41.51 | | Free Cash Flow | 162.87 | -2.814 | [Assets and Liabilities](index=13&type=section&id=%E8%B3%87%E7%94%A2%E8%B2%A0%E5%82%B5%E6%83%85%E6%B3%81) As of June 30, 2025, total assets were **331.127 billion yuan**, total liabilities were **130.774 billion yuan**, and the asset-liability ratio was **39.5%**, a decrease of **0.4 percentage points** from the beginning of the year Assets and Liabilities as of June 30, 2025 | Indicator | Amount (Billion Yuan) | Change from Year-End | | :--- | :--- | :--- | | Total Assets | 3,311.27 | - | | Total Liabilities | 1,307.74 | - | | Net Debt | 839.66 | - | | Asset-Liability Ratio | 39.5% | Decreased by 0.4 percentage points | [Review Report on Interim Financial Information](index=14&type=section&id=%E4%B8%AD%E6%9C%9F%E8%B2%A1%E5%8B%99%E5%A0%B1%E5%91%8A%E7%9A%84%E5%AF%A9%E9%96%B1%E5%A0%B1%E5%91%8A) [KPMG Review Report](index=14&type=section&id=%E4%B8%AD%E6%9C%9F%E8%B2%A1%E5%8B%99%E5%A0%B1%E5%91%8A%E7%9A%84%E5%AF%A9%E9%96%B1%E5%A0%B1%E5%91%8A) KPMG reviewed this interim financial report in accordance with International Standard on Review Engagements 2410 and found no matters suggesting it was not prepared in all material respects according to IAS 34 - Reviewing Body: **KPMG**[46](index=46&type=chunk) - Review Standard: Reviewed in accordance with International Standard on Review Engagements 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the International Auditing and Assurance Standards Board[44](index=44&type=chunk) - Conclusion: Nothing has come to the auditor's attention that causes them to believe that the interim financial information as at June 30, 2025, is not prepared, in all material respects, in accordance with International Accounting Standard 34 "Interim Financial Reporting"[45](index=45&type=chunk) [Unaudited Interim Condensed Consolidated Statement of Comprehensive Income](index=15&type=section&id=%E6%9C%AA%E7%B6%93%E5%AF%A9%E6%A0%B8%E4%B8%AD%E6%9C%9F%E5%90%88%E4%BD%B5%E7%B6%9C%E5%90%88%E6%94%B6%E7%9B%8A%E8%A1%A8) [Consolidated Statement of Comprehensive Income for H1 2025](index=15&type=section&id=%E6%9C%AA%E7%B6%93%E5%AF%A9%E6%A0%B8%E4%B8%AD%E6%9C%9F%E5%90%88%E4%BD%B5%E7%B6%9C%E5%90%88%E6%94%B6%E7%9B%8A%E8%A1%A8) In H1 2025, the company reported operating revenue of **49.601 billion yuan**, operating profit of **8.629 billion yuan**, profit attributable to shareholders of **5.757 billion yuan**, and basic earnings per share of **0.3293 yuan** Unaudited Interim Condensed Consolidated Statement of Comprehensive Income (For the six months ended June 30, 2025) | Indicator | 2025 (Million Yuan) | 2024 (Million Yuan) | | :--- | :--- | :--- | | Operating Revenue | 49,601 | 48,247 | | Operating Expenses | (40,972) | (40,101) | | Operating Profit | 8,629 | 8,146 | | Profit Before Tax | 7,605 | 7,037 | | Income Tax Expense | (1,847) | (1,707) | | Profit for the Period | 5,758 | 5,330 | | Profit Attributable to Company Shareholders | 5,757 | 5,330 | | Basic and Diluted Earnings Per Share (Yuan) | 0.3293 | 0.3049 | [Unaudited Interim Condensed Consolidated Statement of Financial Position](index=16&type=section&id=%E6%9C%AA%E7%B6%93%E5%AF%A9%E6%A0%B8%E4%B8%AD%E6%9C%9F%E5%90%88%E4%BD%B5%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) [Consolidated Statement of Financial Position as of June 30, 2025](index=16&type=section&id=%E6%9C%AA%E7%B6%93%E5%AF%A9%E6%A0%B8%E4%B8%AD%E6%9C%9F%E5%90%88%E4%BD%B5%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) As of June 30, 2025, total assets were **331.127 billion yuan**, comprising **234.272 billion yuan** in non-current assets and **96.855 billion yuan** in current assets. Total equity was **200.353 billion yuan**, and total liabilities were **130.774 billion yuan** Unaudited Interim Condensed Consolidated Statement of Financial Position (As at June 30, 2025) | Indicator | June 30, 2025 (Million Yuan) | December 31, 2024 (Million Yuan) | | :--- | :--- | :--- | | **Assets** | | | | Non-current Assets | 234,272 | 241,474 | | Current Assets | 96,855 | 91,360 | | **Total Assets** | **331,127** | **332,834** | | **Equity and Liabilities** | | | | Equity Attributable to Company Shareholders | 200,351 | 199,978 | | Total Equity | 200,353 | 199,979 | | Non-current Liabilities | 41,918 | 57,056 | | Current Liabilities | 88,856 | 75,799 | | **Total Liabilities** | **130,774** | **132,855** | | **Total Equity and Liabilities** | **331,127** | **332,834** | [Unaudited Interim Condensed Consolidated Statement of Changes in Equity](index=18&type=section&id=%E6%9C%AA%E7%B6%93%E5%AF%A9%E6%A0%B8%E4%B8%AD%E6%9C%9F%E5%90%88%E4%BD%B5%E6%AC%8A%E7%9B%8A%E8%AE%8A%E5%8B%95%E8%A1%A8) [Consolidated Statement of Changes in Equity for H1 2025](index=18&type=section&id=%E6%9C%AA%E7%B6%93%E5%AF%A9%E6%A0%B8%E4%B8%AD%E6%9C%9F%E5%90%88%E4%BD%B5%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 increased from **199.979 billion yuan** as of December 31, 2024, to **200.353 billion yuan**, primarily influenced by profit for the period and share capital reorganization Unaudited Interim Condensed Consolidated Statement of Changes in Equity (For the six months ended June 30, 2025) | Indicator | Balance as at December 31, 2024 (Million Yuan) | Profit for the Period (Million Yuan) | Dividend Distribution (Million Yuan) | Share Capital Reorganization (Million Yuan) | Balance as at June 30, 2025 (Million Yuan) | | :--- | :--- | :--- | :--- | :--- | :--- | | Equity Attributable to Company Shareholders | 199,978 | 5,757 | (5,384) | 0 | 200,351 | | Non-controlling Interests | 1 | 1 | 0 | 0 | 2 | | **Total Equity** | **199,979** | **5,758** | **(5,384)** | **0** | **200,353** | - Share consolidation and capital reduction became effective on **February 20, 2025**, resulting in a reduction of share capital from **176.008 billion yuan** to **17.601 billion yuan**, with the reduction credited to capital premium[53](index=53&type=chunk)[86](index=86&type=chunk) [Unaudited Interim Condensed Consolidated Statement of Cash Flows](index=20&type=section&id=%E6%9C%AA%E7%B6%93%E5%AF%A9%E6%A0%B8%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E5%90%88%E4%BD%B5%E7%8F%BE%E9%87%91%E6%B5%81%E9%87%8F%E8%A1%A8) [Consolidated Cash Flow for H1 2025](index=20&type=section&id=%E6%9C%AA%E7%B6%93%E5%AF%A9%E6%A0%B8%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E5%90%88%E4%BD%B5%E7%8F%BE%E9%87%91%E6%B5%81%E9%87%8F%E8%A1%A8) In H1 2025, net cash from operating activities was **28.679 billion yuan**, net cash used in investing activities was **15.126 billion yuan**, net cash used in financing activities was **7.475 billion yuan**, and cash and cash equivalents at period-end were **8.673 billion yuan** Unaudited Interim Condensed Consolidated Statement of Cash Flows (For the six months ended June 30, 2025) | Cash Flow Type | 2025 (Million Yuan) | 2024 (Million Yuan) | | :--- | :--- | :--- | | Net Cash from Operating Activities | 28,679 | 32,830 | | Net Cash Used in Investing Activities | (15,126) | (13,886) | | Net Cash Used in Financing Activities | (7,475) | (18,850) | | Net Increase in Cash and Cash Equivalents | 6,078 | 94 | | Cash and Cash Equivalents at End of Period | 8,673 | 4,049 | [Notes to the Unaudited Interim Financial Information](index=21&type=section&id=%E6%9C%AA%E7%B6%93%E5%AF%A9%E6%A0%B8%E4%B8%AD%E6%9C%9F%E8%B2%A1%E5%8B%99%E5%A0%B1%E5%91%8A%E9%99%84%E8%A8%BB) [1 General Information](index=21&type=section&id=1%20%E4%B8%80%E8%88%AC%E8%B3%87%E6%96%99) China Tower Corporation Limited was established in 2014 by three major telecom operators, primarily engaging in communication tower construction and operation, indoor distribution services, Smart Link, and Energy businesses, with a share consolidation and capital reduction completed on **February 20, 2025** - Establishment Date: China Tower Corporation Limited was established in the People's Republic of China on **July 15, 2014**[56](index=56&type=chunk) - Major Shareholders: Initiated by China Mobile Communications Co., Ltd., China Unicom (Hong Kong) Limited, and China Telecom Corporation Limited[56](index=56&type=chunk) - Principal Activities: Construction and operation of telecommunication towers (providing site space, maintenance services, and power services, collectively referred to as tower business), provision of indoor distributed antenna system (DAS) services, cross-industry site application and information services (Smart Link business), and energy business[58](index=58&type=chunk) - Share Capital Change: Share consolidation and capital reduction became effective on **February 20, 2025**, reducing the company's total issued share capital from **RMB 176,008,471,024** to **RMB 17,600,847,102**[57](index=57&type=chunk) [2 Basis of Preparation](index=22&type=section&id=2%20%E7%B7%A8%E8%A3%BD%E5%9F%BA%E6%BA%96) The unaudited interim financial information is prepared in accordance with IAS 34 "Interim Financial Reporting" and should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2024, with consistent accounting policies - Preparation Standard: Prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" issued by the International Accounting Standards Board[59](index=59&type=chunk) - Reading Requirement: Should be read in conjunction with the Group's audited consolidated financial statements for the year ended December 31, 2024[59](index=59&type=chunk) - Accounting Policies: The accounting policies adopted are consistent with those of the previous financial year and the corresponding interim reporting period[59](index=59&type=chunk) [3 Changes in Accounting Policies](index=22&type=section&id=3%20%E6%9C%83%E8%A8%88%E6%94%BF%E7%AD%96%E8%AE%8A%E6%9B%B4) The Group applied amendments to IAS 21 "The Effects of Changes in Foreign Exchange Rates: Lack of Exchangeability" to this interim financial report, which had no material impact on the Group's performance or financial position - Application of Amendments: Amendments to IAS 21 "The Effects of Changes in Foreign Exchange Rates: Lack of Exchangeability" have been applied[60](index=60&type=chunk) - Impact: These amendments had no material impact on the Group's results and financial position prepared or presented in this interim financial report for the current or prior periods[60](index=60&type=chunk) [4 Segment Reporting](index=22&type=section&id=4%20%E5%88%86%E9%83%A8%E5%A0%B1%E5%91%8A) The Group's primary operating decision-maker reviews performance and resources as a whole, thus determining a single operating segment, with almost all long-term assets, revenue, and operating profit derived from mainland China - Operating Segment: The primary operating decision-maker reviews the Group's performance and resources as a whole, thus concluding that the Group has one operating segment[61](index=61&type=chunk) - Geographical Segment: Almost all of the Group's long-term assets are located in mainland China, and almost all of the Group's revenue and operating profit during the reporting period were derived from mainland China[61](index=61&type=chunk) [5 Operating Revenue](index=23&type=section&id=5%20%E7%87%9F%E6%A5%AD%E6%94%B6%E5%85%A5) Total operating revenue for H1 2025 was **49.601 billion yuan**, including **37.797 billion yuan** from tower business, **4.664 billion yuan** from indoor distribution, **4.726 billion yuan** from Smart Link, and **2.209 billion yuan** from Energy business, with three telecom operators contributing **85.7%** of total revenue Operating Revenue by Business Type for H1 2025 | Business Type | 2025 (Million Yuan) | 2024 (Million Yuan) | | :--- | :--- | :--- | | Tower Business | 37,797 | 37,957 | | Indoor Distribution Business | 4,664 | 4,164 | | Smart Link Business | 4,726 | 3,982 | | Energy Business | 2,209 | 2,023 | | Others | 205 | 121 | | **Total** | **49,601** | **48,247** | - Revenue Contribution: For the six months ended June 30, 2025, revenue generated from the three telecommunication operators accounted for **85.7%** of total revenue (for the six months ended June 30, 2024: **87.9%**)[63](index=63&type=chunk) [6 Staff Costs](index=24&type=section&id=6%20%E4%BA%BA%E5%B7%A5%E6%88%90%E6%9C%AC) Total staff costs for H1 2025 were **4.767 billion yuan**, primarily comprising salaries and benefits, post-employment benefits, medical insurance, and housing provident fund Staff Costs Composition for H1 2025 | Item | 2025 (Million Yuan) | 2024 (Million Yuan) | | :--- | :--- | :--- | | Salaries and Benefits | 3,502 | 3,172 | | Post-employment Benefits | 658 | 620 | | Medical Insurance | 294 | 281 | | Housing Provident Fund | 313 | 302 | | **Total** | **4,767** | **4,375** | [7 Site Operation and Support Expenses](index=24&type=section&id=7%20%E7%AB%99%E5%9D%80%E9%81%8B%E7%87%9F%E5%8F%8A%E6%94%AF%E6%92%90%E9%96%8B%E6%94%AF) Total site operation and support expenses for H1 2025 were **2.535 billion yuan**, mainly consisting of IT service fees, site generator fuel costs, and other site operation expenses Site Operation and Support Expenses Composition for H1 2025 | Item | 2025 (Million Yuan) | 2024 (Million Yuan) | | :--- | :--- | :--- | | Site Operation Expenses | 763 | 862 | | IT Service Fees | 890 | 951 | | Site Generator Fuel Costs | 520 | 719 | | Others | 362 | 370 | | **Total** | **2,535** | **2,902** | [8 Other Operating Expenses](index=24&type=section&id=8%20%E5%85%B6%E4%BB%96%E7%87%9F%E9%81%8B%E9%96%8B%E6%94%AF) Total other operating expenses for H1 2025 were **4.885 billion yuan**, primarily including technical support service fees, credit loss provisions, and equipment leasing/sales costs, with technical support fees mainly for Smart Link and Energy business platform construction Other Operating Expenses Composition for H1 2025 | Item | 2025 (Million Yuan) | 2024 (Million Yuan) | | :--- | :--- | :--- | | Technical Support Service Fees | 2,174 | 1,944 | | Loss on Scrapping/Disposal of Property, Plant and Equipment | 4 | 125 | | Credit Loss Provisions | 737 | 584 | | Other Business Operating Energy Costs | 233 | 352 | | Property and Utilities Expenses | 281 | 243 | | Marketing and Promotion Expenses | 331 | 344 | | Taxes and Surcharges | 219 | 182 | | Equipment Leasing and Sales Costs | 492 | 309 | | Others | 414 | 445 | | **Total** | **4,885** | **4,528** | - Technical support service fees primarily represent fees paid to third-party service providers for building platforms in the Smart Link business and Energy business[66](index=66&type=chunk) - Other business operating energy costs primarily represent electricity costs for battery swap and charging businesses within the Energy business[66](index=66&type=chunk) [9 Finance Costs](index=25&type=section&id=9%20%E8%9E%8D%E8%B3%87%E6%88%90%E6%9C%AC) Total finance costs for H1 2025 were **1.260 billion yuan**, mainly composed of interest on borrowings and lease liabilities, net of capitalized interest, with an interest capitalization annual rate range of **2.04%–2.28%** Finance Costs Composition for H1 2025 | Item | 2025 (Million Yuan) | 2024 (Million Yuan) | | :--- | :--- | :--- | | Interest on Borrowings | 725 | 805 | | Interest on Lease Liabilities | 566 | 542 | | Less: Capitalized Interest | (31) | (67) | | **Total** | **1,260** | **1,280** | - Interest Capitalization Annual Rate Range: The annual interest rate range for interest capitalized for the six months ended June 30, 2025, was **2.04%–2.28%**[67](index=67&type=chunk) [10 Income Tax Expense](index=25&type=section&id=10%20%E6%89%80%E5%BE%97%E7%A8%85%E8%B2%BB%E7%94%A8) Income tax expense for H1 2025 was **1.847 billion yuan**, including current and deferred tax. The company applies a statutory tax rate of **25%**, with some provincial branches and subsidiaries enjoying a preferential rate of **15%** Income Tax Expense for H1 2025 | Item | 2025 (Million Yuan) | 2024 (Million Yuan) | | :--- | :--- | :--- | | Current Tax | 2,099 | 1,839 | | Deferred Tax | (252) | (132) | | **Income Tax Expense** | **1,847** | **1,707** | - Statutory Tax Rate: The statutory enterprise income tax rate applicable to the Group in mainland China is **25%**[70](index=70&type=chunk) - Preferential Tax Rate: Enterprises or branches established in western provinces of mainland China that meet the qualification requirements, Hainan Provincial Branch, and China Tower Smart Link Technology Co., Ltd. (a high-tech enterprise) may enjoy a preferential income tax rate of **15%**[70](index=70&type=chunk)[71](index=71&type=chunk) [11 Basic and Diluted Earnings Per Share](index=27&type=section&id=11%20%E6%AF%8F%E8%82%A1%E5%9F%BA%E6%9C%AC%E5%8F%8A%E6%94%A4%E8%96%84%E6%94%B6%E7%9B%8A) Basic earnings per share for H1 2025 were **RMB 0.3293**, retrospectively adjusted for the share consolidation and capital reduction. Diluted earnings per share are equal to basic earnings per share due to the absence of dilutive potential ordinary shares Basic Earnings Per Share for H1 2025 | Indicator | 2025 | 2024 (Restated) | | :--- | :--- | :--- | | Profit Attributable to Company Shareholders (Million Yuan) | 5,757 | 5,330 | | Weighted Average Number of Ordinary Shares Issued after Adjustment for Share Consolidation and Capital Reduction (Million) | 17,481 | 17,481 | | **Basic Earnings Per Share (Yuan)** | **0.3293** | **0.3049** | - Diluted Earnings: For the six months ended June 30, 2024 and 2025, there were no dilutive potential ordinary shares because all previously granted restricted shares were cancelled in 2022. Therefore, diluted earnings per share are equal to basic earnings per share[74](index=74&type=chunk) [12 Property, Plant and Equipment and Construction in Progress](index=27&type=section&id=12%20%E7%89%A9%E6%A5%AD%E3%80%81%E5%BB%A0%E6%88%BF%E5%8F%8A%E8%A8%AD%E5%82%99%E5%8F%8A%E5%9C%A8%E5%BB%BA%E5%B7%A5%E7%A8%8B) In H1 2025, the Group incurred **11.952 billion yuan** in additions to property, plant and equipment and construction in progress, and disposed of property, plant and equipment with a net book value of approximately **0.355 billion yuan**, resulting in a loss of approximately **4 million yuan** - Additions Cost: For the six months ended June 30, 2025, the cost of additions to property, plant and equipment and construction in progress was **RMB 11,952 million** (for the six months ended June 30, 2024: **RMB 13,680 million**)[75](index=75&type=chunk) - Scrapping and Disposal: For the six months ended June 30, 2025, the net book value of property, plant and equipment scrapped and disposed of was approximately **RMB 355 million**, resulting in a loss on scrapping/disposal of approximately **RMB 4 million**[76](index=76&type=chunk) [13 Leases](index=28&type=section&id=13%20%E7%A7%9F%E8%B3%83) As of June 30, 2025, right-of-use assets totaled **32.775 billion yuan**, and lease liabilities totaled **23.545 billion yuan**. Additions to right-of-use assets were **6.555 billion yuan**, and depreciation expense was **5.594 billion yuan** in H1 Lease-Related Amounts as of June 30, 2025 | Item | June 30, 2025 (Million Yuan) | December 31, 2024 (Million Yuan) | | :--- | :--- | :--- | | Right-of-Use Assets | 32,775 | 32,247 | | Lease Liabilities (Current) | 6,931 | 7,378 | | Lease Liabilities (Non-current) | 16,614 | 15,555 | | **Total Lease Liabilities** | **23,545** | **22,933** | - Additions to Right-of-Use Assets: For the six months ended June 30, 2025, the Group recognized additions to right-of-use assets of **RMB 6,555 million**[77](index=77&type=chunk) - Depreciation Expense for Right-of-Use Assets: For the six months ended June 30, 2025, depreciation expense for right-of-use assets was **RMB 5,594 million**[77](index=77&type=chunk) [14 Trade and Other Receivables](index=29&type=section&id=14%20%E6%87%89%E6%94%B6%E7%87%9F%E6%A5%AD%E6%AC%BE%E5%8F%8A%E5%85%B6%E4%BB%96%E6%87%89%E6%94%B6%E6%AC%BE) As of June 30, 2025, trade and other receivables totaled **85.110 billion yuan**, with net trade receivables of **78.011 billion yuan** primarily from three telecom operators, including a significant amount of commercial acceptance bills Trade and Other Receivables as of June 30, 2025 | Item | June 30, 2025 (Million Yuan) | December 31, 2024 (Million Yuan) | | :--- | :--- | :--- | | Trade Receivables (Net) | 78,011 | 79,436 | | Payments Made on Behalf of Others | 4,808 | 4,600 | | Deposits and Guarantees | 2,292 | 1,872 | | **Total** | **85,110** | **85,907** | - Trade receivables primarily consist of amounts due from China Mobile Communications Group Co., Ltd., China Telecom Group Co., Ltd., and China Unicom Group Co., Ltd[80](index=80&type=chunk) - As of June 30, 2025, bank and finance company acceptance bills included in trade receivables amounted to **RMB 798 million**, and commercial acceptance bills amounted to **RMB 22,740 million**[80](index=80&type=chunk) [15 Prepayments and Other Current Assets](index=31&type=section&id=15%20%E9%A0%90%E4%BB%98%E6%AC%BE%E5%8F%8A%E5%85%B6%E4%BB%96%E6%B5%81%E5%8B%95%E8%B3%87%E7%94%A2) As of June 30, 2025, prepayments and other current assets totaled **3.072 billion yuan**, mainly comprising input VAT to be deducted, prepaid short-term and low-value lease rentals, and prepaid site electricity fees Prepayments and Other Current Assets as of June 30, 2025 | Item | June 30, 2025 (Million Yuan) | December 31, 2024 (Million Yuan) | | :--- | :--- | :--- | | Input VAT to be Deducted | 938 | 939 | | Prepayments | 2,130 | 1,912 | | Others | 4 | 4 | | **Total** | **3,072** | **2,855** | - Prepayments primarily consist of prepaid short-term and low-value lease rentals under IFRS 16 and prepaid site electricity fees[84](index=84&type=chunk) [16 Cash and Cash Equivalents](index=31&type=section&id=16%20%E7%8F%BE%E9%87%91%E5%8F%8A%E7%8F%BE%E9%87%91%E7%AD%89%E5%83%B9%E7%89%A9) As of June 30, 2025, cash and cash equivalents totaled **8.673 billion yuan**, primarily consisting of RMB cash and bank deposits Cash and Cash Equivalents as of June 30, 2025 | Item | June 30, 2025 (Million Yuan) | December 31, 2024 (Million Yuan) | | :--- | :--- | :--- | | RMB | 8,456 | 2,410 | | HKD | 217 | 185 | | USD | – | 2 | | LAK | – | 1 | | **Total** | **8,673** | **2,598** | [17 Share Capital and Dividends](index=32&type=section&id=17%20%E8%82%A1%E6%9C%AC%E5%8F%8A%E8%82%A1%E6%81%AF) As of June 30, 2025, the company's total issued shares were **17,601 million**, with share capital of **17.601 billion yuan**, following a share consolidation and capital reduction effective **February 20, 2025**. The Board declared an interim dividend of **RMB 0.13250 per share** for 2025, and there are no active restricted share incentive schemes Share Capital as of June 30, 2025 | Item | June 30, 2025 (Million Shares) | June 30, 2025 (Million Yuan) | | :--- | :--- | :--- | | Number of Issued Ordinary Shares | 17,601 | 17,601 | - Share consolidation and capital reduction became effective on **February 20, 2025**, changing the total issued shares from **176,008,471,024** to **17,600,847,102**, and reducing total share capital from **RMB 176,008,471,024** to **RMB 17,600,847,102**[86](index=86&type=chunk) - Dividend Declaration: On **August 5, 2025**, the Board resolved to declare a dividend of **RMB 0.13250 per ordinary share** (pre-tax) for the six months ended June 30, 2025, totaling approximately **RMB 2,316 million** to the company's shareholders[87](index=87&type=chunk) - Restricted Share Incentive Scheme: As of June 30, 2025, all initially granted restricted shares have been cancelled, and no active restricted share incentive scheme is in place[88](index=88&type=chunk)[89](index=89&type=chunk) [18 Borrowings](index=34&type=section&id=18%20%E5%80%9F%E6%AC%BE) As of June 30, 2025, total long-term borrowings were **56.916 billion yuan**, and total short-term borrowings were **44.212 billion yuan**. Preferential borrowings matured and were repaid, with long-term borrowings having an effective annual interest rate of **1.35% to 2.50%** Borrowings as of June 30, 2025 | Item | June 30, 2025 (Million Yuan) | December 31, 2024 (Million Yuan) | | :--- | :--- | :--- | | Total Long-term Borrowings | 56,916 | 61,869 | | Total Short-term Borrowings | 44,212 | 28,525 | - Preferential Borrowings: As of June 30, 2025, preferential borrowings had matured and been repaid[92](index=92&type=chunk) - Long-term Borrowing Interest Rate: For the six months ended June 30, 2025, the effective annual interest rate for long-term borrowings ranged from **1.35% to 2.50%**[92](index=92&type=chunk) - Short-term Loan Interest Rate: For the six months ended June 30, 2025, all short-term loans were credit borrowings, with an annual interest rate range of **2.01% to 2.27%**[93](index=93&type=chunk) [19 Trade Payables](index=35&type=section&id=19%20%E6%87%89%E4%BB%98%E8%B3%A6%E6%AC%BE) As of June 30, 2025, total trade payables were **30.668 billion yuan**, primarily comprising amounts payable for engineering expenditures, maintenance expenses, and other operating expenses Ageing Analysis of Trade Payables as of June 30, 2025 | Ageing | June 30, 2025 (Million Yuan) | December 31, 2024 (Million Yuan) | | :--- | :--- | :--- | | Not exceeding 6 months | 18,906 | 24,418 | | 6 months to 1 year | 6,562 | 4,095 | | Over 1 year | 5,200 | 4,756 | | **Total** | **30,668** | **33,269** | [20 Accruals and Other Payables](index=36&type=section&id=20%20%E9%A0%90%E6%8F%90%E8%B2%BB%E7%94%A8%E5%8F%8A%E5%85%B6%E4%BB%96%E6%87%89%E4%BB%98%E6%AC%BE) As of June 30, 2025, accruals and other payables totaled **6.952 billion yuan**, mainly including contract liabilities, salaries and welfare payable, and temporary deposits/guarantees from suppliers Accruals and Other Payables as of June 30, 2025 | Item | June 30, 2025 (Million Yuan) | December 31, 2024 (Million Yuan) | | :--- | :--- | :--- | | Temporary Deposits and Guarantees from Suppliers | 893 | 974 | | Salaries and Welfare Payable | 1,488 | 467 | | Contract Liabilities | 3,770 | 3,987 | | Accruals | 571 | 445 | | Other Taxes Payable | 230 | 407 | | **Total** | **6,952** | **6,280** | - Contract liabilities primarily relate to consideration received from customers before the Group satisfies its performance obligations in the Smart Link business and Energy business[98](index=98&type=chunk) [21 Capital Commitments](index=36&type=section&id=21%20%E8%B3%87%E6%9C%AC%E6%89%BF%E6%93%94) As of June 30, 2025, the Group's authorized and contracted capital commitments amounted to **2.514 billion yuan**, primarily related to engineering expenditures and property acquisitions Capital Commitments as of June 30, 2025 | Item | June 30, 2025 (Million Yuan) | December 31, 2024 (Million Yuan) | | :--- | :--- | :--- | | Authorized and Contracted (within 1 year) | 2,514 | 2,245 | [22 Related Party Transactions](index=37&type=section&id=22%20%E9%97%9C%E8%81%AF%E6%96%B9%E4%BA%A4%E6%98%93) The Group has significant related party transactions with China Mobile, China Unicom, and China Telecom, including providing tower, indoor distribution, and other services, purchasing goods and services, and making payments on behalf of others. Transactions with other government-related entities are conducted on market terms Significant Related Party Transactions for H1 2025 | Transaction Type | 2025 (Million Yuan) | 2024 (Million Yuan) | | :--- | :--- | :--- | | Provision of Tower Business, Indoor Distribution and Other Services | 42,487 | 42,403 | | Purchase of Various Goods and Services | 4,450 | 4,035 | | Property Rental and Site Lease Fees | 133 | 172 | | Payments Made on Behalf of Others | 15,031 | 15,725 | | Recovery of Payments Made on Behalf of Others | 14,823 | 15,626 | - Related Party Balances: As of June 30, 2025, amounts due from related parties totaled **74,174 million yuan**, and amounts due to related parties totaled **4,835 million yuan**[106](index=106&type=chunk)[107](index=107&type=chunk) - Transactions with Other State-Owned Entities: The Group has collective but not individually significant transactions with other government-related entities, which are conducted on terms similar to those with other non-government-related entities[108](index=108&type=chunk) [23 Fair Value Estimation](index=39&type=section&id=23%20%E5%85%AC%E5%85%81%E5%83%B9%E5%80%BC%E4%BC%B0%E8%A8%88) As of June 30, 2025, the Group had no financial assets or liabilities measured at fair value. The carrying amounts of financial assets and liabilities not measured at fair value (such as trade receivables, trade payables, and borrowings) approximate their fair values - Fair Value Measurement: As of June 30, 2025, the Group had no financial assets and financial liabilities measured at fair value[109](index=109&type=chunk) - Carrying Amount vs. Fair Value: The carrying amounts of financial assets and financial liabilities not measured at fair value (primarily including trade and other receivables, trade payables, other payables, and borrowings) approximate their fair values due to the short maturity and/or market interest rates of these instruments[109](index=109&type=chunk) [24 Non-Adjusting Post-Reporting Period Events](index=39&type=section&id=24%20%E9%9D%9E%E8%AA%BF%E6%95%B4%E5%A0%B1%E5%91%8A%E6%9C%9F%E5%BE%8C%E4%BA%8B%E9%A0%85) The Board declared an interim dividend after the reporting period, with details provided in Note 17(b) - Interim Dividend Declaration: The Board declared an interim dividend after the end of the reporting period, details of which are set out in Note 17(b)[110](index=110&type=chunk) [Other Information](index=40&type=section&id=%E5%85%B6%E4%BB%96%E8%B3%87%E6%96%99) [Purchase, Sale or Redemption of the Company's Listed Securities](index=40&type=section&id=%E8%B3%BC%E8%B2%B7%E3%80%81%E5%87%BA%E5%94%AE%E6%88%96%E8%B4%96%E5%9B%9E%E6%9C%AC%E5%85%AC%E5%8F%B8%E4%B9%8B%E4%B8%8A%E5%B8%82%E8%AD%89%E5%88%B8) 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 - Listed Securities Transactions: 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[113](index=113&type=chunk) [Changes in Information of Directors and Supervisors](index=40&type=section&id=%E8%91%A3%E4%BA%8B%E5%92%8C%E7%9B%A3%E4%BA%8B%E8%B3%87%E6%96%99%E4%B9%8B%E8%AE%8A%E6%9B%B4) During the reporting period, Mr. Cheng Jianjun, Mr. Miao Shouye, Mr. Pei Zhenjiang, and Mr. Wen Bugao were elected as directors, while Mr. Tang Yongbo, Mr. Dong Chunbo, and Mr. Xian Handi resigned due to work changes or personal matters - New Directors: Mr. Cheng Jianjun was elected as a non-executive director on **May 20, 2025**; Mr. Miao Shouye was elected as a non-executive director on **July 23, 2025**; Mr. Pei Zhenjiang and Mr. Wen Bugao were elected as independent non-executive directors on **July 23, 2025**[114](index=114&type=chunk)[115](index=115&type=chunk) - Resigned Directors: Mr. Tang Yongbo resigned as a non-executive director due to work changes; Mr. Dong Chunbo resigned as an independent non-executive director due to age; Mr. Xian Handi resigned as an independent non-executive director due to his intention to devote more time and effort to personal affairs, all effective from **July 23, 2025**[117](index=117&type=chunk) [Share Consolidation and Capital Reduction](index=41&type=section&id=%E8%82%A1%E4%BB%BD%E5%90%88%E4%BD%B5%E5%8F%8A%E5%89%8A%E6%B8%9B%E8%82%A1%E6%9C%AC) The share consolidation and capital reduction plan was approved by shareholders on **December 23, 2024**, and became effective on **February 20, 2025**, reducing the total issued shares from **176,008,471,024** to **17,600,847,102** - Effective Date: The share consolidation and capital reduction became effective on **February 20, 2025**[119](index=119&type=chunk) - Changes: Every ten (10) shares of the company with a par value of RMB 1.00 each were consolidated into one (1) share with a par value of RMB 1.00 each; the company's total issued share capital was reduced from **RMB 176,008,471,024** to **RMB 17,600,847,102**[119](index=119&type=chunk) - Total Issued Shares: As of June 30, 2025, the total number of issued shares of the company was **17,600,847,102**[119](index=119&type=chunk) [Restricted Share Incentive Scheme](index=42&type=section&id=%E9%99%90%E5%88%B6%E6%80%A7%E8%82%A1%E7%A5%A8%E6%BF%80%E5%8B%B5%E8%A8%88%E5%8A%83) The company adopted a restricted share incentive scheme in 2019 to improve governance and incentivize core employees, which involved purchasing H-shares from the secondary market without issuing new shares. As of **December 31, 2023**, all initially granted restricted shares were repurchased and cancelled due to unmet vesting conditions, with no active scheme currently - Purpose: To improve the company's corporate governance structure, establish a sound mechanism for shared interests and risks among employees, shareholders, investors, and the company; and effectively attract, retain, and incentivize core employees essential for the company's development[120](index=120&type=chunk) - Share Source: The restricted share incentive scheme does not involve the grant of restricted shares that require the issuance of new shares or other new securities by the company, but rather the purchase of a certain number of the company's H-shares by an entrusted agent from the secondary market[122](index=122&type=chunk)[123](index=123&type=chunk) - Grant Limit: The total number of restricted shares granted shall not exceed **10%** of the company's total issued share capital at the time of approval of the restricted share incentive scheme by shareholders (adjusted to **17,600,847,102 shares** after the share consolidation and capital reduction became effective)[124](index=124&type=chunk) - Vesting Status: The relevant restricted shares granted under the first grant scheme failed to vest according to the conditions for the first, second, and third vesting periods, and all were repurchased by the entrusted agent from the grantees at the grant price before **December 31, 2023**[131](index=131&type=chunk)[132](index=132&type=chunk)[134](index=134&type=chunk) - Current Status: As of **January 1, 2025**, and **June 30, 2025**, there were no outstanding relevant restricted shares granted under the first grant, and no restricted shares were granted to any grantees for the six months ended June 30, 2025[134](index=134&type=chunk)[135](index=135&type=chunk) [Interests and Short Positions of Directors, Supervisors and Chief Executive in Shares, Underlying Shares and Debentures of the Company](index=45&type=section&id=%E8%91%A3%E4%BA%8B%E3%80%81%E7%9B%A3%E4%BA%8B%E5%8F%8A%E6%9C%80%E9%AB%98%E8%A1%8C%E6%94%BF%E4%BA%BA%E5%93%A1%E5%9C%A8%E6%9C%AC%E5%85%AC%E5%8F%B8%E8%82%A1%E4%BB%BD%E3%80%81%E7%9B%B8%E9%97%9C%E8%82%A1%E4%BB%BD%E5%8F%8A%E5%82%B5%E6%AC%8A%E8%AD%89%E7%9A%84%E6%AC%8A%E7%9B%8A%E5%92%8C%E6%B7%A1%E5%80%89) As of June 30, 2025, no directors, supervisors, or the company's chief executive held any interests and/or short positions in the company's or its associated corporations' shares, underlying shares, or debentures requiring disclosure under Part XV of the SFO - Disclosure of Interests: As of **June 30, 2025**, none of the directors, supervisors, and chief executive of the company had any interests and/or short positions in the shares, underlying shares, or debentures of the company or its associated corporations that were required to be notified to the company and the Hong Kong Stock Exchange under Divisions 7 and 8 of Part XV of the Securities and Futures Ordinance[136](index=136&type=chunk) [Substantial Interests and Short Positions in Shares and Underlying Shares of the Company](index=46&type=section&id=%E5%9C%A8%E6%9C%AC%E5%85%AC%E5%8F%B8%E8%82%A1%E4%BB%BD%E5%8F%8A%E7%9B%B8%E9%97%9C%E8%82%A1%E4%BB%BD%E4%B8%AD%E7%9A%84%E9%87%8D%E5%A4%A7%E6%AC%8A%E7%9B%8A%E8%88%87%E6%B7%A1%E5%80%89) As of June 30, 2025, major shareholders including China Mobile Communications Group Co., Ltd., China Unicom Group Co., Ltd., China Telecom Group Co., Ltd., and China Reform Holdings Corporation Ltd. held substantial interests with **5% or more** voting rights in the company Substantial Interests of Major Shareholders as of June 30, 2025 | Shareholder Name | Nature of Interest | Class of Shares | Number of Shares(1) | % of Relevant Share Class | % of Total Issued Shares of the Company | | :--- | :--- | :--- | :--- | :--- | :--- | | China Mobile Communications Group Co., Ltd. | Interest held by controlled corporation | Domestic Shares | 4,915,095,371 (L) | 38.00% | 27.93% | | China Unicom Group Co., Ltd. | Interest held by controlled corporation | Domestic Shares | 3,634,583,682 (L) | 28.10% | 20.65% | | China Telecom Group Co., Ltd. | Interest held by controlled corporation | Domestic Shares | 3,608,714,759 (L) | 27.90% | 20.50% | | China Reform Holdings Corporation Ltd. | Legal and beneficial owner/Interest held by controlled corporation | Domestic Shares | 776,067,690 (L) | 6.00% | 4.41% | | GIC Private Limited | Investment manager | H Shares | 279,683,830 (L) | 5.99% | 1.59% | | BlackRock, Inc. | Interest held by controlled corporation | H Shares | 312,676,559 (L) | 6.70% | 1.78% | - Share Number Adjustment: The number of shares held by the above-mentioned relevant shareholders has been adjusted based on the impact of the share consolidation and capital reduction[141](index=141&type=chunk) [Audit Committee](index=49&type=section&id=%E5%AF%A9%E8%A8%88%E5%A7%94%E5%93%A1%E6%9C%83) The Board's Audit Committee reviewed the company's adopted accounting standards and practices and discussed financial reporting matters, including the unaudited interim financial information for the six months ended June 30, 2025 - Review Content: The Audit Committee has reviewed the accounting standards and practices adopted by the company and discussed financial reporting matters of the company, including the review of the unaudited interim financial information for the six months ended June 30, 2025[142](index=142&type=chunk) [Compliance with Corporate Governance Code](index=49&type=section&id=%E9%81%B5%E5%AE%88%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%AE%88%E5%89%87) For the six months ended June 30, 2025, the company consistently complied with the code provisions set out in Appendix C1 to the Listing Rules, "Corporate Governance Code" - Compliance Status: For the six months ended June 30, 2025, the company has complied with the code provisions set out in Appendix C1 to the Listing Rules, "Corporate Governance Code"[143](index=143&type=chunk) [Compliance with Model Code](index=49&type=section&id=%E9%81%B5%E5%AE%88%E6%A8%99%E6%BA%96%E5%AE%88%E5%89%87) The company adopted its own "Code for Securities Transactions by Directors, Supervisors and Relevant Employees of China Tower Corporation Limited," based on the Model Code in Appendix C3 of the Listing Rules, and all directors and supervisors confirmed compliance with both codes for the six months ended June 30, 2025 - Compliance Status: Following specific enquiries made by the company to all directors and supervisors, each director and supervisor confirmed that they had complied with the company code and the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 to the Listing Rules for the six months ended June 30, 2025[144](index=144&type=chunk) [Contingent Liabilities](index=49&type=section&id=%E6%88%96%E6%9C%89%E8%B2%A0%E5%82%B5) As of June 30, 2025, the company had no contingent liabilities - Contingent Liabilities: As of **June 30, 2025**, the company had no contingent liabilities[145](index=145&type=chunk) [Material Legal Proceedings](index=49&type=section&id=%E9%87%8D%E5%A4%A7%E6%B3%95%E5%BE%8B%E7%A8%8B%E5%BA%8F) For the six months ended June 30, 2025, the company was not involved in any material litigation or arbitration, nor was any material litigation or claim pending, threatened, or initiated against it - Material Legal Proceedings: For the six months ended June 30, 2025, the company was not involved in any material litigation or arbitration, and so far as the company is aware, no material litigation or claim was pending, threatened, or initiated against the company[146](index=146&type=chunk) [Interim Dividend](index=49&type=section&id=%E4%B8%AD%E6%9C%9F%E8%82%A1%E6%81%AF) The Board declared an interim dividend of **RMB 0.13250 per share** (pre-tax) for 2025, expected to be paid around **October 31, 2025**, to shareholders on record as of **September 12, 2025**, and detailed policies for dividend currency, exchange rates, and withholding taxes for different shareholder types - Interim Dividend Amount: The Board resolved to declare an interim dividend of **RMB 0.13250 per ordinary share** (pre-tax) for the six months ended June 30, 2025[147](index=147&type=chunk) - Payment Date and Record Date: Expected to be paid on or about **Friday, October 31, 2025**, to shareholders whose names appear on the company's register of members on **Friday, September 12, 2025**[147](index=147&type=chunk) - Dividend Payment and Tax Policy: Domestic shareholders and Southbound Trading H-share shareholders will be paid in RMB; H-share shareholders other than Southbound Trading shareholders will be paid in HKD, with applicable enterprise income tax or individual income tax withheld based on shareholder identity and tax agreements[149](index=149&type=chunk)[150](index=150&type=chunk)[152](index=152&type=chunk) [Closure of Register of Members](index=52&type=section&id=%E6%9A%AB%E5%81%9C%E8%BE%A6%E7%90%86%E8%82%A1%E4%BB%BD%E9%81%8E%E6%88%B6%E7%99%BB%E8%A8%98) To determine H-share shareholders' entitlement to the 2025 interim dividend, the company's H-share register of members will be closed from **September 9 to September 12, 2025** - Closure Period: The company's H-share register of members will be closed from **September 9, 2025, to September 12, 2025** (both days inclusive)[154](index=154&type=chunk) - Purpose: To ensure eligibility for the 2025 interim dividend[154](index=154&type=chunk) [Compliance with Appendix D2 of the Listing Rules](index=52&type=section&id=%E9%81%B5%E5%AE%88%E4%B8%8A%E5%B8%82%E8%A6%8F%E5%89%87%E9%99%84%E9%8C%84D2) The company confirms that, other than as disclosed, there are no material changes in existing company information regarding matters listed in paragraph 32 of Appendix D2 to the Listing Rules compared to its 2024 annual report - Compliance Status: The company confirms that, other than as disclosed herein, there are no material changes in the existing company information regarding the matters listed in paragraph 32 of Appendix D2 to the Listing Rules compared to the information disclosed in the company's 2024 annual report[155](index=155&type=chunk) [Forward-Looking Statements](index=52&type=section&id=%E5%89%8D%E7%9E%BB%E6%80%A7%E9%99%B3%E8%BF%B0) Forward-looking statements and opinions in this interim report are based on current plans, estimates, and forecasts, involving risks and uncertainties, and actual results may differ materially from expectations. The company assumes no obligation to correct or update forward-looking statements or any liability for their non-realization - Nature: Any forward-looking statements and opinions in this 2025 interim report are based on current plans, estimates, and forecasts, and thus involve risks and uncertainties[156](index=156&type=chunk) - Disclaimer: The company, its directors, and employees assume no obligation to (a) correct or update any forward-looking statements or opinions contained in the 2025 interim report; and (b) any liability arising from the non-realization or inaccuracy of any forward-looking statements or opinions[156](index=156&type=chunk)

Great Wall Terroir Holdings Limited 長城天下控股有限公司 （股份代號：���） （於百慕達註冊成立之有限公司） 目錄 | 公司資料 | 2 | | --- | --- | | 簡明綜合損益表 | 3 | | 簡明綜合損益及其他全面收益表 | 4 | | 簡明綜合財務狀況表 | 5 | | 簡明綜合權益變動表 | 6 | | 簡明綜合現金流量表 | 7 | | 簡明綜合財務報表附註 | 8 | | 業務回顧及前景 | 19 | | 財務回顧 | 22 | | 附加資料 | 24 | 中期報告 2025 Interim Report 2025 Great Wall Terroir Holdings Limited 長城天下控股有限公司 (Stock Code: 524) (Incorporated in Bermuda with limited liability) 01 長城天下控股有限公司 二零二五年中期報告 公司資料 董事會 執行董事 張少輝 （主席兼代理行政總裁） 許振威 獨立非執行董事 方偉豪 周曉東 董建美 公司秘書 李志邦 核數師 天健國際會計師事務所有限公司 執 ...

[Company Information and Report Overview](index=1&type=section&id=%E5%85%AC%E5%8F%B8%E4%BF%A1%E6%81%AF%E4%B8%8E%E6%8A%A5%E5%91%8A%E6%A6%82%E8%A7%88) This section covers the company's fundamental details, report preparation, going concern status, and accounting policy changes [Company Basic Information](index=1&type=section&id=%E5%85%AC%E5%8F%B8%E5%9F%BA%E6%9C%AC%E4%BF%A1%E6%81%AF) North Mining Shares Company Limited (Stock Code: 433) announced its unaudited condensed consolidated interim results for the six months ended June 30, 2025 - Company name: **North Mining Shares Company Limited** (Stock Code: **433**)[2](index=2&type=chunk) - This announcement presents the unaudited condensed consolidated interim results for the six months ended June 30, 2025[3](index=3&type=chunk) [Basis of Preparation](index=6&type=section&id=%E6%8A%A5%E5%91%8A%E7%BC%96%E5%88%B6%E5%9F%BA%E7%A1%80) The report is prepared in accordance with HKAS 34 'Interim Financial Reporting' and the Listing Rules, adopting the same accounting policies as the 2024 annual consolidated financial statements - The report is prepared in accordance with Hong Kong Accounting Standard 34 'Interim Financial Reporting' issued by the Hong Kong Institute of Certified Public Accountants and the Listing Rules of the Stock Exchange[10](index=10&type=chunk) - The report adopts the same accounting policies as those applied in the annual consolidated financial statements for the year ended December 31, 2024[10](index=10&type=chunk) [Going Concern Assumption](index=7&type=section&id=%E6%8C%81%E7%BB%AD%E7%BB%8F%E8%90%A5%E5%81%87%E8%AE%BE) Despite significant uncertainties regarding net current liabilities and net liabilities, the Board believes the Group can continue as a going concern by enhancing working capital management, seeking additional funding, and recovering mining operations - As of June 30, 2025, the Group recorded a net profit of approximately **HKD 105,848,000**, but faced net current liabilities of approximately **HKD 1,330,087,000** and net liabilities of approximately **HKD 479,123,000**, indicating significant going concern uncertainties[11](index=11&type=chunk) - The Board has implemented measures, including close monitoring of expenditures, seeking additional funding, and resuming mining operations, to ensure the Group can meet its financial obligations over the next 12 months, thus preparing financial statements on a going concern basis[12](index=12&type=chunk)[13](index=13&type=chunk) [Changes in Accounting Policies](index=8&type=section&id=%E4%BC%9A%E8%AE%A1%E6%94%BF%E7%AD%96%E5%8F%98%E5%8A%A8) Revised Hong Kong Financial Reporting Standards were adopted for the first time this period, with no material impact on the Group's performance, financial position, or disclosures - Hong Kong Accounting Standard 21 (Revised) 'Lack of Exchangeability' was adopted for the first time during this interim period[14](index=14&type=chunk)[15](index=15&type=chunk) - This revision had no material impact on the Group's results, financial position, and/or disclosures[15](index=15&type=chunk) [Financial Performance](index=2&type=section&id=%E8%B4%A2%E5%8A%A1%E4%B8%9A%E7%BB%A9) This section presents the Group's condensed consolidated financial statements, including income, financial position, revenue, other income, finance costs, and earnings per share [Condensed Consolidated Income Statement](index=2&type=section&id=%E7%AE%80%E6%98%8E%E7%BB%BC%E5%90%88%E6%8D%9F%E7%9B%8A%E8%A1%A8) For the six months ended June 30, 2025, the Group achieved revenue of **HKD 925,762 thousand**, gross profit of **HKD 302,035 thousand**, and a net profit of **HKD 105,848 thousand**, primarily driven by the full recovery of mining operations Key Data from Condensed Consolidated Income Statement (For the six months ended June 30) | Indicator | 2025 (HKD thousands) | 2024 (HKD thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 925,762 | 621,311 | +49.00% | | Cost of sales | (623,727) | (613,189) | +1.72% | | Gross profit | 302,035 | 8,122 | +3618.69% | | Operating profit/(loss) | 137,720 | (68,268) | Turned to profit | | Profit/(loss) before tax | 132,336 | (99,790) | Turned to profit | | Profit/(loss) for the period | 105,848 | (99,790) | Turned to profit | | Attributable to owners of the Company | 70,137 | (58,543) | Turned to profit | | Attributable to non-controlling interests | 35,711 | (41,247) | Turned to profit | [Condensed Consolidated Statement of Financial Position](index=4&type=section&id=%E7%AE%80%E6%98%8E%E7%BB%BC%E5%90%88%E8%B4%A2%E5%8A%A1%E7%8A%B6%E5%86%B5%E8%A1%A8) As of June 30, 2025, total assets slightly increased to **HKD 1,561,016 thousand**, but the Group still faces negative equity with total liabilities of **HKD 2,040,139 thousand** and net current liabilities of **HKD 1,330,087 thousand** Key Data from Condensed Consolidated Statement of Financial Position (As of June 30) | Indicator | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | Change | | :--- | :--- | :--- | :--- | | Total assets | 1,561,016 | 1,538,265 | +1.48% | | Total equity | (479,123) | (570,868) | Loss narrowed | | Total liabilities | 2,040,139 | 2,109,133 | -3.27% | | Net current liabilities | 1,330,087 | 1,488,805 | -10.66% | | Cash and cash equivalents | 54,811 | 15,247 | +259.50% | | Mining rights | 484,451 | 526,860 | -8.05% | [Revenue Analysis](index=8&type=section&id=%E6%94%B6%E7%9B%8A%E5%88%86%E6%9E%90) For the six months ended June 30, 2025, total revenue increased by **49%** to **HKD 925,762 thousand**, primarily driven by **HKD 514,673 thousand** from mining operations (molybdenum concentrate sales), while chemical product sales declined Revenue Composition (For the six months ended June 30) | Revenue Source | 2025 (HKD thousands) | 2024 (HKD thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Sales of molybdenum concentrate | 514,673 | — | N/A | | Sales of chemical products | 410,935 | 621,311 | -33.86% | | Sales of aluminum products | 154 | — | N/A | | **Total Revenue** | **925,762** | **621,311** | **+49.00%** | [Other Income, Gains and Losses](index=9&type=section&id=%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5%E3%80%81%E6%94%B6%E7%9B%8A%E5%8F%8A%E4%BA%8F%E6%8D%9F) Other income significantly increased to **HKD 652 thousand**, mainly from government grants and byproduct sales, while amortization of mining rights of **HKD 56,847 thousand** was a primary loss item under other gains and losses Other Income (For the six months ended June 30) | Income Source | 2025 (HKD thousands) | 2024 (HKD thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Bank interest income | 24 | 34 | -29.41% | | Government grants | 323 | – | N/A | | Sales of by-products | 305 | – | N/A | | Miscellaneous income | – | 19 | -100% | | **Total** | **652** | **53** | **+1129.43%** | Other Gains and Losses (For the six months ended June 30) | Item | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Amortization of right-of-use assets | (2,869) | (2,872) | | Amortization of mining rights | (56,847) | – | | Loss on disposal of property, plant and equipment | (215) | – | | **Total** | **(59,931)** | **(2,872)** | [Finance Costs and Taxation](index=12&type=section&id=%E8%9E%8D%E8%B5%84%E6%88%90%E6%9C%AC%E4%B8%8E%E7%A8%8E%E9%A1%B9) Finance costs significantly decreased to **HKD 5,384 thousand** due to reduced bank loan interest, while a tax expense of **HKD 26,488 thousand** was incurred, primarily for China corporate income tax Finance Costs (For the six months ended June 30) | Item | 2025 (HKD thousands) | 2024 (HKD thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Interest on bank loans and other borrowings | 4,989 | 31,091 | -83.96% | | Interest expense on lease liabilities | 395 | 431 | -8.35% | | **Total** | **5,384** | **31,522** | **-82.91%** | Taxation (For the six months ended June 30) | Item | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Deferred tax | 14,212 | – | | China corporate income tax | (40,700) | – | | **Total** | **(26,488)** | **–** | [Earnings Per Share and Dividends](index=13&type=section&id=%E6%AF%8F%E8%82%A1%E7%9B%88%E5%88%A9%E4%B8%8E%E8%82%A1%E6%81%AF) Basic earnings per share turned profitable at **HK 0.56 cents**, compared to a loss of **HK 0.47 cents** last year, with no interim dividend recommended by the Board Earnings Per Share (For the six months ended June 30) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Basic earnings/(loss) per share (HK cents) | 0.56 | (0.47) | | Weighted average number of shares in issue | 12,511,640,397 | 12,511,640,397 | - The Board does not recommend the payment of an interim and/or final dividend for the six months ended June 30, 2025[24](index=24&type=chunk)[43](index=43&type=chunk) [Business Segment Performance](index=9&type=section&id=%E4%B8%9A%E5%8A%A1%E5%88%86%E9%83%A8%E8%A1%A8%E7%8E%B0) This section details the performance of the Group's mining, chemical product trading, and aluminum product trading segments [Operating Segment Overview](index=9&type=section&id=%E7%BB%8F%E8%90%A5%E5%88%86%E9%83%A8%E6%A6%82%E8%A7%88) The Group operates three main businesses: mining, chemical product trading, and aluminum product trading, with mining fully recovering to become the primary profit contributor, while chemical product trading faced losses Operating Segment Revenue and Results (For the six months ended June 30, 2025) | Segment | Revenue (HKD thousands) | Results (HKD thousands) | | :--- | :--- | :--- | | Mining operations | 514,673 | 172,418 | | Chemical product trading | 410,935 | (27,617) | | Aluminum product trading | 154 | (805) | | **Total** | **925,762** | **143,996** | Operating Segment Assets and Liabilities (As of June 30, 2025) | Segment | Assets (HKD thousands) | Liabilities (HKD thousands) | | :--- | :--- | :--- | | Mining operations | 1,238,145 | 873,860 | | Chemical product trading | 290,592 | 1,119,665 | | Aluminum product trading | 8,286 | 7,928 | | Unallocated | 23,993 | 38,686 | | **Total** | **1,561,016** | **2,040,139** | [Mining Operations](index=13&type=section&id=%E9%87%87%E7%9F%BF%E4%B8%9A%E5%8A%A1) Mining operations, primarily molybdenum concentrate extraction, fully recovered, contributing **HKD 514,673 thousand** in revenue and **HKD 292,156 thousand** in gross profit, with a **56.77%** gross margin, crucial for the Group's turnaround - The Group's mining operations primarily involve the extraction and exploration of molybdenum concentrate in China, produced from the molybdenum mine operated by Jiulong Mining Co Ltd in Luonan County, Shaanxi Province[27](index=27&type=chunk)[28](index=28&type=chunk)[33](index=33&type=chunk) Key Data for Mining Operations (For the six months ended June 30, 2025) | Indicator | Data | | :--- | :--- | | Molybdenum concentrate sales volume | Approximately 3,487 tonnes | | Molybdenum concentrate grade | Approximately 45%–50% | | Average selling price of molybdenum concentrate | Approximately HKD 128,380 per tonne | | Revenue from mining operations | Approximately HKD 514,673,000 | | Of which, revenue from sales of molybdenum concentrate | Approximately HKD 447,663,000 | | Of which, revenue from sales of sulfuric acid and iron concentrate | Approximately HKD 67,010,000 | | Gross profit | Approximately HKD 292,156,000 | | Gross profit margin | 56.77% | | Amortization of mining rights | Approximately HKD 56,847,000 | [Chemical Product Trading Business](index=16&type=section&id=%E5%8C%96%E5%B7%A5%E4%BA%A7%E5%93%81%E4%B9%B0%E5%8D%96%E4%B8%9A%E5%8A%A1) Chemical product trading, produced by Anhui Tongxin New Material Technology Co Ltd, saw revenue decline to **HKD 410,935 thousand** and recorded a segment loss of **HKD 27,617 thousand** - The chemical product trading business is operated by Anhui Tongxin New Material Technology Co Ltd, a non-wholly owned subsidiary of the Company[34](index=34&type=chunk) Key Data for Chemical Product Trading Business (For the six months ended June 30, 2025) | Indicator | 2025 (HKD thousands) | 2024 (HKD thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Segment revenue | 410,935 | 621,311 | -33.86% | | Segment loss | (27,617) | (32,595) | Loss narrowed | [Aluminum Product Trading Business](index=16&type=section&id=%E9%93%9D%E9%87%91%E5%B1%9E%E4%B9%B0%E5%8D%96%E4%B8%9A%E5%8A%A1) Aluminum product trading generated only **HKD 154 thousand** in revenue amid intense market competition, with the Group planning to expand this business despite limited resources - Revenue from aluminum product trading was approximately **HKD 154,000**, with no comparable revenue in the prior period[16](index=16&type=chunk)[35](index=35&type=chunk) - The Group plans to continue expanding its aluminum product trading business under limited resources and pressure to gain market share[35](index=35&type=chunk) [Management Discussion and Analysis](index=15&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%82%E8%AE%A8%E8%AE%BA%E4%B8%8E%E5%88%86%E6%9E%90) This section covers the Group's financial performance, post-period events, business outlook, liquidity, treasury policies, and human resources [Overall Financial Performance](index=15&type=section&id=%E6%95%B4%E4%BD%93%E8%B4%A2%E5%8A%A1%E8%A1%A8%E7%8E%B0) The Group achieved **HKD 925,762 thousand** in revenue, a **49%** increase, and turned profitable with **HKD 105,848 thousand** net profit, driven by increased molybdenum concentrate sales and mining business recovery Overall Financial Performance (For the six months ended June 30, 2025) | Indicator | 2025 (HKD thousands) | 2024 (HKD thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 925,762 | 621,311 | +49% | | Profit/(loss) for the period | 105,848 | (99,790) | Turned to profit | - Revenue growth was primarily due to increased sales volume of molybdenum concentrate products[32](index=32&type=chunk) - The profit for the period was mainly attributable to the full recovery of mining operations, with significant improvements in production capacity and operational efficiency[32](index=32&type=chunk) [Events After Reporting Period](index=16&type=section&id=%E6%8A%A5%E5%91%8A%E6%9C%9F%E5%90%8E%E4%BA%8B%E9%A1%B9) Post-reporting period, the Company successfully raised approximately **HKD 74,700,000** net proceeds from a new share placement, intended for bank loan repayment and general working capital - On August 18, 2025, the Company completed a subscription for new shares, issuing **2,490,500,000** new shares at a subscription price of **HKD 0.03** per share[36](index=36&type=chunk) - The net proceeds from the subscription, approximately **HKD 74,700,000**, will be used to repay bank loans and other borrowings under current liabilities, and for the Group's general working capital[36](index=36&type=chunk) [Business Outlook and Strategies](index=17&type=section&id=%E4%B8%9A%E5%8A%A1%E5%B1%95%E6%9C%9B%E4%B8%8E%E7%AD%96%E7%95%A5) Facing global economic uncertainties, the Group aims to enhance resilience through strategic management, core business development, and supply chain protection, while continuously investing in mining and chemical business efficiency and competitiveness - The Group aims to enhance resilience against macroeconomic headwinds through strategic management, developing and expanding its two core businesses, and establishing protective measures within the supply chain[37](index=37&type=chunk) - The Group will continue to improve investor relations management quality, considering investor concerns and suggestions to strengthen operational management and corporate governance[37](index=37&type=chunk) [Macroeconomic Outlook and Response](index=17&type=section&id=%E5%AE%8F%E8%A7%82%E7%BB%8F%E6%B5%8E%E5%B1%95%E6%9C%9B%E4%B8%8E%E5%BA%94%E5%AF%B9) The global economy is expected to face geopolitical, inflation, and financial tightening headwinds in H2 2025, with the Group enhancing resilience through strategic management and supply chain protection - The economic outlook for H2 2025 remains uncertain, with the global economy facing multiple macroeconomic headwinds including geopolitical tensions, inflation, and tightening financial conditions[37](index=37&type=chunk) - The Group will enhance resilience through strategic management, developing and expanding core businesses, and establishing protective measures in the supply chain to address shortages and rising operating costs[37](index=37&type=chunk) [Mining Business Outlook](index=17&type=section&id=%E9%87%87%E7%9F%BF%E4%B8%9A%E5%B1%95%E6%9C%9B) Mining operations successfully renewed their molybdenum mining license and plan further investment in production system upgrades for efficiency, safety, and environmental standards, anticipating continued growth in domestic molybdenum demand - Mining operations successfully renewed their molybdenum mining license and will further invest in upgrading production machinery systems to enhance efficiency, safety, and environmental standards[37](index=37&type=chunk) - Driven by China's environmental protection and supply-side reform policies, steel mill transformation will boost molybdenum demand, with the molybdenum market expected to remain favorable in H2 2025[38](index=38&type=chunk) [Chemicals Market Outlook](index=18&type=section&id=%E5%8C%96%E5%93%81%E5%B8%82%E5%9C%BA%E5%B1%95%E6%9C%9B) The chemicals market faces strict safety and environmental regulations, but the Group will continue investing in safety, cost control, and efficiency, while developing effective market strategies and exploring investment opportunities - Strict national safety and environmental regulations pose short-term operational pressure on the chemical manufacturing industry, but environmentally competitive enterprises will gain growth opportunities[39](index=39&type=chunk) - The Group will continue to invest in safety and environmental protection, strictly control costs, improve production efficiency, and formulate effective market strategies to address intense competition[39](index=39&type=chunk) - The Group will actively explore investment opportunities and expand mineral resources to broaden its revenue base, enhance financial performance, and improve profitability[39](index=39&type=chunk) [Liquidity and Capital Structure](index=19&type=section&id=%E6%B5%81%E5%8A%A8%E8%B5%84%E9%87%91%E4%B8%8E%E8%B5%84%E6%9C%AC%E7%BB%93%E6%9E%84) Net cash inflow significantly increased to **HKD 38,391 thousand**, and despite high net current liabilities, the current ratio improved, with the Group confident in repaying current liabilities Key Data for Liquidity and Capital Structure (As of June 30) | Indicator | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Net cash inflow (For the six months ended June 30) | 38,391 HKD thousands | 13,773 HKD thousands | +178.74% | | Current ratio | 0.29 | 0.24 | Improved | | Debt-to-capital ratio | Deficit of approximately 17.71 | Deficit of approximately 48.72 | Loss narrowed | - The Group is confident in having sufficient financial resources to fully repay its current liabilities[40](index=40&type=chunk) [Treasury Policy and Borrowings](index=20&type=section&id=%E5%BA%93%E5%8A%A1%E6%94%BF%E7%AD%96%E4%B8%8E%E5%80%9F%E6%AC%BE) The Group's primary business activities are denominated in HKD and RMB, with the Board perceiving no significant foreign exchange risk and no hedging or speculation activities undertaken; total bank loans and other borrowings slightly decreased - The Group's principal business activities are denominated in HKD and RMB, and the Board does not believe it faces any significant foreign exchange risk[45](index=45&type=chunk) - As of June 30, 2025, the Group had not used financial instruments for hedging purposes nor engaged in foreign exchange speculation activities[45](index=45&type=chunk) Bank Loans and Other Borrowings (As of June 30) | Indicator | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | Change | | :--- | :--- | :--- | :--- | | Total bank loans and other borrowings | 420,272 | 426,731 | -1.51% | [Human Resources](index=20&type=section&id=%E4%BA%BA%E5%8A%9B%E8%B5%84%E6%BA%90) As of June 30, 2025, the Group's full-time employee count decreased to **613**, with remuneration policies based on market norms, individual qualifications, experience, and performance Number of Employees (As of June 30) | Indicator | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Number of full-time employees | 613 employees | 678 employees | -9.59% | - Employee remuneration is determined by reference to market norms, individual qualifications, relevant experience, and performance[47](index=47&type=chunk) [Corporate Governance](index=20&type=section&id=%E4%BC%81%E4%B8%9A%E7%AE%A1%E6%B2%BB) This section details the Company's corporate governance code compliance, board diversity, securities trading standards, and audit committee functions [Compliance with Corporate Governance Code](index=20&type=section&id=%E4%BC%81%E4%B8%9A%E7%AE%A1%E6%B2%BB%E5%AE%88%E5%88%99%E9%81%B5%E5%AE%88%E6%83%85%E5%86%B5) The Company complied with all applicable provisions of the Corporate Governance Code, though the Chairman and CEO roles are combined, which the Company believes facilitates consistent leadership and timely decision-making - The Company has complied with all applicable provisions of the Corporate Governance Code set out in Appendix 14 of the Listing Rules[48](index=48&type=chunk) - Mr Yang Yingmin holds both the Chairman and Chief Executive Officer positions, which the Company believes facilitates consistent leadership and timely decision-making[48](index=48&type=chunk) [Board Diversity Policy](index=21&type=section&id=%E8%91%A3%E4%BA%8B%E4%BC%9A%E6%88%90%E5%91%98%E5%A4%9A%E5%85%83%E5%8C%96%E6%94%BF%E7%AD%96) The Company has established a Board Diversity Policy, reviewed annually for effectiveness, and is committed to regularly reviewing and improving corporate governance practices - The Company has adopted a Board Diversity Policy to achieve diversity among its Board members[49](index=49&type=chunk) - The Board reviews this policy annually to ensure its effectiveness and regularly reviews and improves corporate governance practices[49](index=49&type=chunk) [Standard Code for Securities Transactions](index=21&type=section&id=%E8%AF%81%E5%88%B8%E4%BA%A4%E6%98%93%E6%A0%87%E5%87%86%E5%AE%88%E5%88%99) The Company adopted the Standard Code for Securities Transactions as per Appendix 10 of the Listing Rules, confirming full compliance by all directors during the reporting period - The Company has adopted the Standard Code for Securities Transactions set out in Appendix 10 of the Listing Rules[50](index=50&type=chunk) - Upon enquiry, all Directors fully complied with the requirements of the Standard Code for the six months ended June 30, 2025[50](index=50&type=chunk) [Audit Committee](index=21&type=section&id=%E5%AE%A1%E6%A0%B8%E5%A7%94%E5%91%98%E4%BC%9A) The Audit Committee, comprising three independent non-executive directors, reviews financial statements, financial reporting systems, risk management, and internal control systems, and has reviewed the Group's interim results - The Audit Committee comprises three independent non-executive directors: Mr Shi Wenhao, Mr Shen Mingjie, and Mr Feng Jiawei[51](index=51&type=chunk) - The Audit Committee is responsible for reviewing financial statements, assessing the effectiveness of financial reporting, risk management, and internal control systems, and has reviewed the Group's interim results for the six months ended June 30, 2025[51](index=51&type=chunk) [Other Information](index=22&type=section&id=%E5%85%B6%E4%BB%96%E4%BF%A1%E6%81%AF) This section covers the publication of interim results and the composition of the Board of Directors [Publication of Interim Results](index=22&type=section&id=%E4%B8%AD%E6%9C%9F%E4%B8%9A%E7%BB%A9%E5%88%8A%E5%8F%91) The interim results announcement is available on the HKEX and Company websites, with the full interim report to be dispatched to shareholders and published online in due course - The results announcement is published on the HKEX website (www.hkex.com.hk) and the Company's website (www.northmining.com.hk)[52](index=52&type=chunk) - The interim report, containing all information required by the Listing Rules, will be dispatched to shareholders and published on the aforementioned websites in due course[52](index=52&type=chunk) [Board of Directors](index=22&type=section&id=%E8%91%A3%E4%BA%8B%E4%BC%9A%E6%88%90%E5%91%98) As of the announcement date, the Board comprises five executive directors and three independent non-executive directors, with Mr Yang Yingmin serving as Chairman - The Board includes executive directors Mr Yang Yingmin, Mr Qian Yidong, Mr Huang Zhidan, Mr Shen Jian, and Ms Qian Siqun[53](index=53&type=chunk) - Independent non-executive directors include Mr Shi Wenhao, Mr Shen Mingjie, and Mr Feng Jiawei[53](index=53&type=chunk) - Mr Yang Yingmin serves as the Chairman of the Company[53](index=53&type=chunk)

NEXION TECHNOLOGIES LIMITED 2025 中期報告 香港聯合交易所有限公司（「聯交所」）GEM 之特色 GEM 的定位，乃為中小型公司提供一個上市的市場，此等公司相比起其他在聯交所上市的公 司帶有較高投資風險。有意投資者應了解投資於該等公司的潛在風險，並應經過審慎周詳的考 慮後方作出投資決定。 由於GEM 上市公司普遍為中小型公司，在GEM 買賣的證券可能會較於主板買賣的證券承受較 大的市場波動風險，同時無法保證在GEM 買賣的證券會有高流通量的市場。 香港交易及結算所有限公司及聯交所對本報告之內容概不負責，對其準確性或完整性亦不發表 任何聲明，並明確表示概不就因本報告全部或任何部份內容而產生或因倚賴該等內容而引致之 任何損失承擔任何責任。 本報告乃遵照聯交所 GEM 證 券 上 市 規 則（「GEM 上 市 規 則」）之 規 定 提 供 有 關 Nexion Technologies Limited（「本公司」）及其附屬公司（統稱「本集團」）之資料。本公司各董事（「董 事」）願對本報告所載資料共同及個別承擔全部責任。各董事在作出一切合理查詢後，確認就彼 等所深知及確信，本報告所載資料 ...

[Company Information](index=3&type=section&id=Company%20Information) This section provides essential details about the company's governance structure, key personnel, and registration information. [Board of Directors and Committees](index=3&type=section&id=Board%20of%20Directors%20and%20Committees) The company's board comprises executive and independent non-executive directors, supported by audit, remuneration, and nomination committees. - Executive Directors include Mr. He Xingfu (Chairman and CEO), Mr. Ren Guodong, Mr. Xu Jinjie, and Ms. Sheng Lingfei[4](index=4&type=chunk) - Independent Non-Executive Directors include Mr. Liang Zhaokun, Mr. Liu Shaoheng, and Mr. Li Wei[4](index=4&type=chunk) - The Audit Committee is chaired by Mr. Liang Zhaokun, the Remuneration Committee by Mr. Liu Shaoheng, and the Nomination Committee by Mr. He Xingfu[4](index=4&type=chunk) [Company Contact and Registration Information](index=3&type=section&id=Company%20Contact%20and%20Registration%20Information) This section details the company's authorized representatives, registered office, Hong Kong headquarters, share registrars, auditor, and principal bankers. - Authorized representatives are Mr. He Xingfu and Mr. He Zhuowei, with Mr. He Zhuowei also serving as Company Secretary[5](index=5&type=chunk) - The registered office is in the Cayman Islands, and the Hong Kong headquarters is located at 3 Tai Kwai Street, Tai Po Industrial Estate, Tai Po, New Territories, Hong Kong[5](index=5&type=chunk) - RSM Hong Kong is the auditor, and principal bankers include Industrial and Commercial Bank of China (Asia) Limited and Bank of China (Hong Kong) Limited[6](index=6&type=chunk) [Financial Highlights](index=5&type=section&id=Financial%20Highlights) This section presents a concise overview of the company's key financial performance indicators for the interim period. [Interim Results Overview](index=5&type=section&id=Interim%20Results%20Overview) For the six months ended June 30, 2025, revenue significantly decreased by 46.9% to HK$38.7 million, while gross loss margin increased to 14.8%. 2025 H1 Financial Highlights Comparison | Indicator | 2025 H1 (HK$ thousand) | 2024 H1 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 38,700 | 72,900 | -46.9% | | Gross Loss Margin | 14.8% | 3.8% | +11.0% | | Loss Attributable to Owners | (12,600) | (13,700) | -8.0% | | Net Loss Margin | 32.6% | 18.8% | +13.8% | | Basic Loss Per Share (HK cents) | (4.9) | (5.3) | -7.5% | | Interim Dividend | Nil | Nil | - | - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025[9](index=9&type=chunk) [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 company's revenue, costs, and comprehensive income for the interim period, showing a reduced loss compared to the prior year. [Profit or Loss and Comprehensive Income Overview](index=6&type=section&id=Profit%20or%20Loss%20and%20Comprehensive%20Income%20Overview) For the six months ended June 30, 2025, the company reported HK$38.746 million in revenue, a gross loss of HK$5.730 million, and a total comprehensive income of HK$0.640 million. Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the six months ended June 30) | Indicator | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Revenue | 38,746 | 72,852 | | Cost of Sales | (44,476) | (75,610) | | Gross Loss | (5,730) | (2,758) | | Other Income | 232 | 216 | | Other Gains and Losses | 1,999 | (1,862) | | Loss Before Tax | (13,070) | (14,168) | | Income Tax Credit | 426 | 488 | | Loss for the Period | (12,644) | (13,680) | | Exchange Differences on Translation of Foreign Operations | 13,284 | (17,528) | | Total Comprehensive Income/(Expense) for the Period | 640 | (31,208) | | Basic Loss Per Share (HK cents) | (4.9) | (5.3) | [Condensed Consolidated Statement of Financial Position](index=7&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) This section presents the company's assets, liabilities, and equity as of June 30, 2025, indicating changes in non-current assets and net current assets. [Financial Position Overview](index=7&type=section&id=Financial%20Position%20Overview) As of June 30, 2025, non-current assets increased to HK$259.155 million, while net current assets decreased due to higher current liabilities. Condensed Consolidated Statement of Financial Position (As of June 30) | Indicator | 2025 June 30 (HK$ thousand) | 2024 Dec 31 (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 | | Non-Current Liabilities | 506 | 833 | | Net Assets | 355,399 | 354,759 | | Total Equity | 355,399 | 354,759 | [Condensed Consolidated Statement of Changes in Equity](index=8&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) This section outlines the movements in the company's equity attributable to owners, primarily influenced by the period's loss and exchange differences. [Equity Changes Overview](index=8&type=section&id=Equity%20Changes%20Overview) Equity attributable to owners increased to HK$355.399 million as of June 30, 2025, with a period loss offset by other comprehensive income from exchange differences. Condensed Consolidated Statement of Changes in Equity (For the six months ended June 30) | Indicator | 2025 June 30 (HK$ thousand) | 2025 Jan 1 (HK$ thousand) | | :--- | :--- | :--- | | Share Capital | 2,600 | 2,600 | | Share Premium | 95,534 | 95,534 | | Other Reserves | 289,031 | 289,031 | | Exchange Fluctuation Reserve | (7,722) | (21,006) | | Accumulated Losses | (24,044) | (11,400) | | Total Equity Attributable to Owners | 355,399 | 354,759 | | Loss for the Period | (12,644) | - | | Other Comprehensive Income | 13,284 | - | | Total Comprehensive Income/(Expense) for the Period | 640 | - | - Other reserves include capital contributions from Futong Group Limited, the carrying amount of net assets of High-Tech Bridge Optic-Communication Limited after changes in ownership interests, and the share capital and share premium of High-Tech Bridge and Futong Group (Thailand) Communication Technology Co., Ltd[14](index=14&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) This section summarizes the cash flows from operating, investing, and financing activities, showing a net decrease in cash and cash equivalents. [Cash Flow Overview](index=9&type=section&id=Cash%20Flow%20Overview) For the six months ended June 30, 2025, net cash used in operating activities was HK$11.064 million, resulting in a decrease in cash and cash equivalents. Condensed Consolidated Statement of Cash Flows (For the six months ended June 30) | Cash Flow Activity | 2025 (HK$ thousand) | 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 Beginning of Period | 17,763 | 14,489 | | Effect of Exchange Rate Changes | 1,630 | 932 | | Cash and Cash Equivalents at End of Period | 11,565 | 7,593 | [Notes to the Unaudited Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20the%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the condensed consolidated financial statements. [1. General Information and Basis of Preparation](index=10&type=section&id=1.%20General%20Information%20and%20Basis%20of%20Preparation) The company, incorporated in Cayman Islands and listed in Hong Kong, primarily manufactures and sells optical fiber and cables in Hong Kong and Thailand. - 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[18](index=18&type=chunk) - The Group's principal activities are the manufacture and sale of optical fiber and optical cables in Hong Kong and Thailand, respectively[18](index=18&type=chunk) - The consolidated financial results are presented in Hong Kong dollars and prepared in accordance with Hong Kong Financial Reporting Standards issued by the Hong Kong Institute of Certified Public Accountants and the applicable disclosure requirements of the Listing Rules of the Stock Exchange[18](index=18&type=chunk) [2. Significant Accounting Policies](index=10&type=section&id=2.%20Significant%20Accounting%20Policies) The condensed consolidated financial statements are prepared under the historical cost convention, with no significant changes from prior year policies. - The condensed consolidated financial statements have been prepared under the historical cost convention[19](index=19&type=chunk) - The adoption of new and revised Hong Kong Financial Reporting Standards has not resulted in significant changes to the Group's accounting policies or the amounts reported for the current and prior periods[19](index=19&type=chunk) [3. Revenue and Segment Information](index=11&type=section&id=3.%20Revenue%20and%20Segment%20Information) Revenue is primarily from optical cable and fiber sales, with optical cable sales contributing HK$37.441 million and Thailand being the largest segment. Disaggregation of Revenue from Contracts with Customers (For the six months ended June 30, 2025) | Type of Goods | HK$ thousand | | :--- | :--- | | Optical Cables | 37,441 | | Optical Fibers | 1,305 | | **Total** | **38,746** | - Revenue is recognized when control of the goods is transferred to the customer, which is typically upon delivery of the goods to the customer's designated location[28](index=28&type=chunk) Segment Revenue and Results (For the six months ended June 30) | Segment | External Sales (HK$ thousand) | Inter-segment Sales (HK$ thousand) | Segment Revenue (HK$ thousand) | Segment Loss (HK$ thousand) | | :--- | :--- | :--- | :--- | :--- | | Optical Cables, Optical Cable Cores and Other Related Products (Thailand) | 37,441 | – | 37,441 | (3,887) | | Optical Fibers (Hong Kong) | 1,305 | 2,330 | 3,635 | (6,204) | | **Total** | **38,746** | **2,330** | **41,076** | **(10,091)** | [4. Other Income, Gains and Losses](index=16&type=section&id=4.%20Other%20Income%2C%20Gains%20and%20Losses) Other income for the period was HK$0.232 million, while other gains and losses amounted to HK$1.999 million, mainly from net foreign exchange gains. Other Income, Gains and Losses (For the six months ended June 30) | Item | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | **Other Income:** | | | | Scrap Sales Income | 55 | 105 | | Bank Interest Income | 11 | 15 | | Others | 166 | 96 | | **Subtotal** | **232** | **216** | | **Other Gains and Losses:** | | | | Net Foreign Exchange Gains/(Losses) | 1,897 | (1,862) | | Gain on Disposal of Property, Plant and Equipment | 102 | – | | **Subtotal** | **1,999** | **(1,862)** | [5. Finance Costs](index=16&type=section&id=5.%20Finance%20Costs) Finance costs for the period were HK$0.445 million, primarily bank loan interest, showing a decrease from the previous year. Finance Costs (For the six months ended June 30) | Item | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Interest on Bank Borrowings | 445 | 810 | [6. Loss Before Tax](index=17&type=section&id=6.%20Loss%20Before%20Tax) Loss before tax for the period was HK$13.070 million, with major expenses including staff costs, inventory costs, and depreciation. Loss Before Tax Items (For the six months ended June 30) | Item | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Auditor's Remuneration | 596 | 615 | | Depreciation of Property, Plant and Equipment (Net) | 474 | 428 | | Directors' Remuneration | 1,844 | 1,786 | | Other Staff Costs (Net) | 6,204 | 6,256 | | Cost of Inventories Recognized as Expense | 33,937 | 75,610 | | Provision for Inventories | 3,010 | 1,917 | | Write-off of Inventories | 400 | – | | Expenses Related to Short-Term Leases | 4,074 | 4,833 | | Reversal of Impairment Loss on Trade Receivables | (2,448) | (2,233) | | Write-off of Bad Debts | 102 | – | | Gain on Disposal of Property, Plant and Equipment | (102) | – | [7. Income Tax Credit](index=18&type=section&id=7.%20Income%20Tax%20Credit) Income tax credit for the period was HK$0.426 million, influenced by Thailand corporate income tax and deferred tax, with Futong Thailand enjoying tax incentives. Income Tax Credit (For the six months ended June 30) | Item | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Hong Kong Profits Tax (Current Tax) | – | – | | Thailand Corporate Income Tax (Current Tax) | 441 | (935) | | Thailand Withholding Tax | 54 | 55 | | Deferred Tax | (921) | 392 | | **Total** | **(426)** | **(488)** | - Futong Thailand has been granted tax incentives by the Thailand Board of Investment, including an eight-year corporate income tax exemption period (up to March 25, 2021) and a 50% reduction period (from March 26, 2021, to March 25, 2026)[36](index=36&type=chunk) [8. Dividends](index=19&type=section&id=8.%20Dividends) No dividends were paid, declared, or proposed by the company during the interim period. - The company did not pay, declare, or propose any dividends during the interim period[37](index=37&type=chunk) [9. Loss Per Share](index=19&type=section&id=9.%20Loss%20Per%20Share) Basic loss per share was 4.9 HK cents, calculated based on a loss of HK$12.644 million and 260 million weighted average ordinary shares. Loss Per Share (For the six months ended June 30) | Indicator | 2025 (HK$ thousand/thousand shares) | 2024 (HK$ thousand/thousand shares) | | :--- | :--- | :--- | | Loss Attributable to Owners | (12,644) | (13,680) | | Weighted Average Number of Ordinary Shares | 260,000 | 260,000 | | Basic Loss Per Share (HK cents) | (4.9) | (5.3) | - Diluted loss per share is not presented as no potential ordinary shares were issued during these two periods[39](index=39&type=chunk) [10. Movements in Property, Plant and Equipment](index=19&type=section&id=10.%20Movements%20in%20Property%2C%20Plant%20and%20Equipment) The group purchased machinery, furniture, motor vehicles, and construction in progress totaling HK$2.58 million during the period. Property, Plant and Equipment Purchases (For the six months ended June 30) | Item | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Machinery | 229 | 0 | | Furniture and Fixtures | 3 | 3 | | 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) Non-current deposits, prepayments, and other receivables were HK$4.027 million, while current portion was HK$62.358 million, mainly for raw material purchases. Deposits, Prepayments and Other Receivables (HK$ thousand) | Item | 2025 June 30 | 2024 Dec 31 | | :--- | :--- | :--- | | **Non-Current Portion** | | | | Prepayments | – | 30,392 | | Deposits for Purchase of Property, Plant and Equipment | 10,010 | 9,702 | | Other Deposits | 23 | 30 | | Less: Loss Allowance | (6,006) | (36,213) | | **Subtotal** | **4,027** | **3,911** | | **Current Portion** | | | | Electricity Deposits | 783 | 783 | | Other Deposits | 65 | 65 | | Deposits for Purchase of Raw Materials | 172,743 | 143,333 | | Prepayments | 10,966 | 8,696 | | Other Receivables | 6,336 | 3,530 | | Other Tax Receivables | 1,141 | 708 | | Less: Loss Allowance | (129,676) | (94,635) | | **Subtotal** | **62,358** | **62,480** | - As of June 30, 2025, prepayments of approximately HK$48.507 million (net of impairment loss of HK$124.236 million) included advances made to a supplier for the purchase of raw materials[41](index=41&type=chunk) [12. Inventories](index=21&type=section&id=12.%20Inventories) Total inventories were HK$38.705 million, with a net value of HK$34.725 million after a provision for inventory write-down, primarily raw materials. Inventories (HK$ thousand) | Item | 2025 June 30 | 2024 Dec 31 | | :--- | :--- | :--- | | Raw Materials and Consumables | 21,491 | 23,741 | | Work in Progress | 6,408 | 7,564 | | Finished Goods | 9,997 | 10,262 | | Goods in Transit | 809 | 1,674 | | **Total** | **38,705** | **43,241** | | Less: Provision for Inventories | (3,980) | (8,172) | | **Net Value** | **34,725** | **35,069** | [13. Trade Receivables](index=21&type=section&id=13.%20Trade%20Receivables) Net trade receivables were HK$33.846 million after a loss allowance of HK$138.896 million, with credit terms generally ranging from 14 to 360 days. Trade Receivables (HK$ thousand) | Item | 2025 June 30 | 2024 Dec 31 | | :--- | :--- | :--- | | Trade Receivables | 172,742 | 171,857 | | Less: Loss Allowance | (138,896) | (136,809) | | **Net Value** | **33,846** | **35,048** | - Credit terms generally range from 14 to 360 days from the invoice date[43](index=43&type=chunk) Aging Analysis of Trade Receivables (HK$ thousand) | Aging | 2025 June 30 | 2024 Dec 31 | | :--- | :--- | :--- | | 0 to 180 days | 27,106 | 34,607 | | 181 to 270 days | 1,952 | – | | 271 to 365 days | 4,788 | – | | Over 365 days | – | 441 | | **Total** | **33,846** | **35,048** | [14. Trade Payables](index=22&type=section&id=14.%20Trade%20Payables) Trade payables increased slightly to HK$10.474 million, with supplier credit terms typically between 30 and 180 days, primarily denominated in RMB, THB, and USD. Trade Payables (HK$ thousand) | Item | 2025 June 30 | 2024 Dec 31 | | :--- | :--- | :--- | | Trade Payables | 10,474 | 10,253 | - The credit period granted by suppliers to the Group generally ranges from 30 to 180 days[47](index=47&type=chunk) Aging Analysis of Trade Payables (HK$ thousand) | Aging | 2025 June 30 | 2024 Dec 31 | | :--- | :--- | :--- | | 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 | | **Total** | **10,474** | **10,253** | [15. Other Payables and Accruals](index=24&type=section&id=15.%20Other%20Payables%20and%20Accruals) Total other payables and accruals were HK$3.838 million, comprising HK$2.920 million in accruals and HK$0.918 million in other payables. Other Payables and Accruals (HK$ thousand) | Item | 2025 June 30 | 2024 Dec 31 | | :--- | :--- | :--- | | Accruals | 2,920 | 3,187 | | Other Payables | 918 | 238 | | **Total** | **3,838** | **3,425** | [16. Contract Liabilities](index=24&type=section&id=16.%20Contract%20Liabilities) Contract liabilities significantly increased to HK$0.486 million, mainly due to short-term advances received from customers for optical cable sales. Contract Liabilities (HK$ thousand) | Item | 2025 June 30 | 2024 Dec 31 | | :--- | :--- | :--- | | Short-term Advances Received from Customers - Sales of Optical Cables | 486 | 14 | Movement in Contract Liabilities (HK$ thousand) | Item | 2025 June 30 | 2024 Dec 31 | | :--- | :--- | :--- | | Balance at January 1 | 14 | 542 | | Decrease in Contract Liabilities due to Revenue Recognized in the Year that was Included in the Contract Liabilities at the Beginning of the Year | (5) | (520) | | Increase in Contract Liabilities due to Advances Received from Customers | 461 | 4 | | Exchange Adjustments | 16 | (12) | | **Balance at June 30/December 31** | **486** | **14** | [17. Bank and Other Borrowings](index=25&type=section&id=17.%20Bank%20and%20Other%20Borrowings) Total bank borrowings were HK$30.875 million, all unsecured, floating-rate, repayable within one year, and denominated in Thai Baht. Bank and Other Borrowings (HK$ thousand) | Item | 2025 June 30 | 2024 Dec 31 | | :--- | :--- | :--- | | Bank Borrowings - Unsecured | 30,875 | 25,300 | | Effective Interest Rate | 4% | 5% | | By Maturity: Within One Year or on Demand | 30,875 | 25,300 | | Denominated in Thai Baht | 30,875 | 25,300 | [18. Deferred Taxation](index=26&type=section&id=18.%20Deferred%20Taxation) Total deferred tax assets were HK$15.741 million, primarily from expected credit loss provisions and tax losses, partially offset by accelerated tax depreciation. Movement in Deferred Tax Assets and (Liabilities) (HK$ thousand) | Item | 2025 June 30 | 2025 Jan 1 | | :--- | :--- | :--- | | Tax Losses | 2,030 | 1,076 | | Long Service Payments | 50 | 83 | | Expected Credit Loss Provision | 14,615 | 13,765 | | Accelerated Tax Depreciation | (954) | (129) | | Impairment of Long-Term Prepayments | – | – | | **Total** | **15,741** | **14,795** | [19. Provisions](index=27&type=section&id=19.%20Provisions) Long service payment provision decreased to HK$0.506 million due to a reversal of HK$0.364 million during the period. Long Service Payment Provision (HK$ thousand) | Item | Amount | | :--- | :--- | | At December 31, 2024 and January 1, 2025 | 833 | | Amount Reversed During the Period | (364) | | Exchange Adjustments | 37 | | **At June 30, 2025** | **506** | - The Group makes provisions for expected future long service payments to employees in accordance with the Thailand Employment Act[54](index=54&type=chunk) [20. Share Capital](index=27&type=section&id=20.%20Share%20Capital) The company's authorized share capital is HK$10 million (1 billion ordinary shares), with issued and fully paid share capital of HK$2.6 million (260 million ordinary shares). Share Capital (HK$ thousand) | Item | Number of Shares | HK$ thousand | | :--- | :--- | :--- | | Authorized Share Capital (Ordinary Shares of HK$0.01 each) | 1,000,000,000 | 10,000 | | Issued and Fully Paid Share Capital (Ordinary Shares of HK$0.01 each) | 260,000,000 | 2,600 | [21. Related Party Transactions](index=28&type=section&id=21.%20Related%20Party%20Transactions) Related party transactions include short-term lease expenses of HK$3.9 million with Futong Group International Limited and key management personnel compensation of HK$1.844 million. Related Party Transactions (For the six months ended June 30) | Related Party | Type of Transaction | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | :--- | | Futong Group International Limited | Rental expenses for short-term leases of plant and office premises | 3,900 | 4,500 | Balances with Related Parties (As of June 30) | Related Party | Type of Balance | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | :--- | | Futong Group International Limited | Other Payables | 650 | – | Key Management Personnel Compensation (For the six months ended June 30) | Item | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Short-term Benefits | 1,825 | 1,767 | | Post-employment Benefits | 19 | 19 | | **Total** | **1,844** | **1,786** | [22. Contingent Liabilities](index=29&type=section&id=22.%20Contingent%20Liabilities) The group had no significant contingent liabilities as of June 30, 2025. - As of June 30, 2025, the Group had no significant contingent liabilities[62](index=62&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 Board of Directors on August 27, 2025. - The interim financial statements were approved and authorized for issue by the Board of Directors on August 27, 2025[63](index=63&type=chunk) [Management Discussion and Analysis](index=30&type=section&id=Management%20Discussion%20and%20Analysis) This section provides an overview of the company's operational and financial performance, market outlook, and risk management strategies. [Business Review](index=30&type=section&id=Business%20Review) In H1 2025, the group faced severe geopolitical volatility and economic slowdown, leading to a 46.9% revenue decrease to HK$38.7 million, but a reduced loss attributable to owners. Business Review Key Financial Data (For the six months ended June 30) | Indicator | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Total Revenue | 38,700 | 72,900 | -46.9% | | Gross Loss | (5,700) | (2,800) | +103.6% | | Loss Attributable to Owners | (12,600) | (13,700) | -8.0% | | Optical Cable Sales | 37,400 | 69,200 | -46.0% | | Optical Fiber Sales | 1,300 | 3,600 | -63.9% | - The Chinese communication industry faces dual pressures of shrinking demand and intensifying competition, with operational challenges and uncertainties persisting for optical fiber and cable companies[66](index=66&type=chunk) [Futong Thailand](index=30&type=section&id=Futong%20Thailand) Futong Thailand's performance was weak due to soft Thai and ASEAN markets, with optical cable sales revenue dropping 46.0% and gross margin falling to 3.0%. - The current markets in Thailand and other ASEAN countries remain weak, leading to an overall poorer performance by Futong Thailand[67](index=67&type=chunk) Futong Thailand Sales Revenue (For the six months ended June 30) | Region | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Thailand Optical Cable Sales Revenue | 37,400 | 69,200 | -46.0% | | Sales to Other Countries | 6,800 | 29,300 | -76.8% | | Of which, Sales to Germany | 5,600 | 23,100 | -75.7% | Futong Thailand Gross Margin (For the six months ended June 30) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Gross Margin | 3.0% | 9.2% | [High-Tech Bridge](index=31&type=section&id=High-Tech%20Bridge) High-Tech Bridge's performance was severely impacted by low optical fiber prices and oversupply, leading to frequent production line shutdowns and significant declines in revenue and net loss. - High-Tech Bridge's performance was severely affected by lower optical fiber selling prices for the first six months ended June 30, 2025[70](index=70&type=chunk) - Production lines were frequently shut down during the reporting period, and all products were sold internally to Futong Thailand[70](index=70&type=chunk) High-Tech Bridge Revenue and Net Loss (For the six months ended June 30) | Indicator | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 2,300 | 9,900 | -76.8% | | Net Loss | (6,500) | (14,200) | -54.2% | [Prospects](index=31&type=section&id=Prospects) The group anticipates growth opportunities in China's communication sector and global digitalization, while High-Tech Bridge plans to suspend fiber drawing production and start butterfly optical cable production. - Driven by factors such as 5G infrastructure construction, broadband network coverage, and increased demand from the power industry, the upward trend of the digital economy is expected to lead to a steady increase in market demand for China's optical fiber and cable industry[71](index=71&type=chunk) - With the acceleration of global digitalization, countries are continuously strengthening investment in communication network infrastructure, and the global market demand for optical fiber and cable is expected to grow significantly by the end of 2025[73](index=73&type=chunk) - High-Tech Bridge management estimates that optical fiber prices will continue to decline due to industry overcapacity and plans to suspend its optical fiber drawing production in the second half of 2025[73](index=73&type=chunk) - All six butterfly optical cable production lines at High-Tech Bridge have been installed and are expected to commence production in the last quarter of 2025[73](index=73&type=chunk) [Financial Review](index=33&type=section&id=Financial%20Review) This section provides a detailed analysis of the company's financial performance, including revenue, costs, and profit/loss drivers. [Revenue](index=33&type=section&id=Revenue) Total revenue decreased by 46.9% to HK$38.7 million, primarily due to reduced demand for optical cables and fibers. Total Revenue (For the six months ended June 30) | Indicator | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Total Revenue | 38,700 | 72,900 | -46.9% | - The decrease in revenue was primarily due to a decline in market demand for optical cables and optical fibers[76](index=76&type=chunk) [Cost of Sales and Gross Profit](index=33&type=section&id=Cost%20of%20Sales%20and%20Gross%20Profit) Cost of sales decreased by 41.1% to HK$44.5 million, but gross loss increased by 103.6% to HK$5.7 million, with gross loss margin rising to 14.8%. Cost of Sales and Gross Profit (For the six months ended June 30) | Indicator | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Cost of Sales | 44,500 | 75,600 | -41.1% | | Gross Loss | (5,700) | (2,800) | +103.6% | | Gross Loss Margin | 14.8% | 3.8% | +11.0% | - The decrease in cost of sales was primarily due to a decrease in the production volume and unit cost of optical cables for the six months ended June 30, 2025[77](index=77&type=chunk) - The increase in gross loss margin was mainly due to a decrease of approximately **10.5%** in optical fiber gross loss margin and a decrease of approximately **5.6%** in optical cable gross margin compared to the corresponding period in 2024[77](index=77&type=chunk) [Trade Receivables Loss Allowance](index=33&type=section&id=Trade%20Receivables%20Loss%20Allowance) Trade receivables loss allowance decreased by 1.1% to HK$138.9 million in H1 2025. Trade Receivables Loss Allowance (HK$ thousand) | Indicator | 2025 H1 | 2024 H1 | Change (%) | | :--- | :--- | :--- | :--- | | Loss Allowance | 138,900 | 140,400 | -1.1% | [Other Income, Gains and Losses](index=34&type=section&id=Other%20Income%2C%20Gains%20and%20Losses) The group recorded a net foreign exchange gain of HK$1.9 million in H1 2025, a reversal from a loss in H1 2024, due to currency fluctuations. Net Foreign Exchange Gains/(Losses) (For the six months ended June 30) | Indicator | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Net Foreign Exchange Gains/(Losses) | 1,900 | (1,900) | - This was primarily due to fluctuations in exchange rates between RMB, HKD, THB, and USD during the period[80](index=80&type=chunk) [Selling and Distribution Expenses](index=34&type=section&id=Selling%20and%20Distribution%20Expenses) Selling and distribution expenses increased by 5.3% to HK$2.0 million, mainly due to higher sales commission expenses. Selling and Distribution Expenses (For the six months ended June 30) | Indicator | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Selling and Distribution Expenses | 2,000 | 1,900 | +5.3% | - The increase was mainly due to the net effect of increased sales commission expenses and decreased export costs resulting from reduced sales of optical fibers and cables to overseas countries[81](index=81&type=chunk) [Administrative Expenses](index=34&type=section&id=Administrative%20Expenses) Administrative expenses increased by 2.2% to HK$9.5 million, driven by higher depreciation and other expenses, partially offset by lower staff costs. Administrative Expenses (For the six months ended June 30) | Indicator | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Administrative Expenses | 9,500 | 9,300 | +2.2% | - The increase in administrative expenses was mainly due to the net effect of decreased staff costs, increased depreciation expenses for property, plant and equipment, and increased other expenses[82](index=82&type=chunk) [Finance Costs](index=35&type=section&id=Finance%20Costs) Finance costs decreased by 50.0% to HK$0.4 million, primarily due to a reduction in bank borrowings. Finance Costs (For the six months ended June 30) | Indicator | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Finance Costs | 400 | 800 | -50.0% | - This was primarily due to a decrease in bank borrowings for the six months ended June 30, 2025[83](index=83&type=chunk) [Taxation](index=35&type=section&id=Taxation) Income tax credit decreased by 20.0% to HK$0.4 million, mainly due to lower tax credit from Futong Thailand, which benefits from tax incentives. Income Tax Credit (For the six months ended June 30) | Indicator | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Income Tax Credit | 400 | 500 | -20.0% | - The decrease in income tax credit was primarily due to a decrease in Futong Thailand's tax credit recorded during the reporting period[84](index=84&type=chunk) - Futong Thailand has been granted tax incentives by the Thailand Board of Investment for the production of cables, including corporate income tax exemption and a 50% reduction[84](index=84&type=chunk) [Loss for the Period](index=35&type=section&id=Loss%20for%20the%20Period) Loss attributable to owners decreased by 8.0% to HK$12.6 million, driven by increased foreign exchange gains and reduced finance costs, partially offset by higher gross loss and inventory provisions. Loss Attributable to Owners (For the six months ended June 30) | Indicator | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Loss | (12,600) | (13,700) | -8.0% | - The decrease in loss was primarily due to the net effect of increased foreign exchange gains, decreased finance costs, and increased reversal of impairment loss on trade receivables, partially offset by increased gross loss and increased provision for inventories[85](index=85&type=chunk) [Liquidity, Financial Resources and Capital Structure](index=36&type=section&id=Liquidity%2C%20Financial%20Resources%20and%20Capital%20Structure) The group's liquidity is managed through operating cash and bank borrowings, with cash and equivalents at HK$11.6 million and a debt ratio of 8.7%. Liquidity and Borrowings (HK$ thousand) | Indicator | 2025 June 30 | 2024 Dec 31 | | :--- | :--- | :--- | | Cash and Cash Equivalents | 11,600 | 17,800 | | Total Bank and Other Borrowings | 30,900 | 25,300 | Debt Ratio | Indicator | 2025 June 30 | 2024 Dec 31 | | :--- | :--- | :--- | | Debt Ratio | 8.7% | 7.1% | - The Group's capital structure has remained unchanged from the date of its listing to the date of this report, with capital comprising only ordinary shares[89](index=89&type=chunk) - The Group has adopted a prudent financial management approach for its treasury policy to manage liquidity risk[90](index=90&type=chunk) [Contingent Liabilities and Litigation](index=36&type=section&id=Contingent%20Liabilities%20and%20Litigation) The group had no significant contingent liabilities or litigation as of June 30, 2025. - As of June 30, 2025, the Group had no significant contingent liabilities or litigation[91](index=91&type=chunk) [Environmental Policies and Performance](index=37&type=section&id=Environmental%20Policies%20and%20Performance) The group is committed to reducing environmental impact and complying with regulations through pollution reduction and efficient resource utilization. - The Group is committed to reducing the environmental impact of its factories and offices through minimizing pollution and efficient resource utilization[92](index=92&type=chunk) - The Group strives to comply with relevant environmental laws and regulations and continuously improve its performance[92](index=92&type=chunk) [Key Relationships with Employees, Customers and Suppliers](index=37&type=section&id=Key%20Relationships%20with%20Employees%2C%20Customers%20and%20Suppliers) The group strives to maintain good relationships with employees, customers, and suppliers by fostering a positive workplace, delivering quality products, and building long-term partnerships. - The Group strives to maintain good relationships with its employees, customers, and suppliers[93](index=93&type=chunk) [Pledge of Assets](index=37&type=section&id=Pledge%20of%20Assets) Futong Thailand pledged land and buildings in Rayong, Thailand, as collateral for a HK$68.19 million bank credit facility, with no other significant asset pledges. - Futong Thailand has pledged a piece of land measuring 58,149 square meters and buildings thereon located in Rayong, Thailand, as collateral for bank borrowings with a credit limit of 300 million Thai Baht (approximately HK$68.19 million)[94](index=94&type=chunk) - Save as disclosed above, the Group has not pledged any of its other land, buildings, and machinery[94](index=94&type=chunk) [Foreign Exchange Risk](index=37&type=section&id=Foreign%20Exchange%20Risk) The group faces foreign exchange risk from USD, RMB against THB, and RMB against HKD fluctuations, with a depreciation of THB or RMB potentially impacting operating results. - The Group's foreign exchange risk primarily arises from fluctuations in exchange rates between USD and RMB against THB, and RMB against HKD[95](index=95&type=chunk) - If the Thai Baht depreciates, the Group's revenue generated in Thailand, when translated into the reporting currency, would decrease, adversely affecting operating results[95](index=95&type=chunk) - The Group has established a foreign exchange risk management policy to monitor foreign exchange risk[95](index=95&type=chunk) [Interest Rate Risk](index=38&type=section&id=Interest%20Rate%20Risk) The group is exposed to fair value interest rate risk from fixed-rate instruments and cash flow interest rate risk from floating-rate financial assets, managing it without derivatives. - The Group's fair value interest rate risk primarily relates to its fixed-rate bank deposits, lease liabilities, and bank borrowings[97](index=97&type=chunk) - The Group is also exposed to cash flow interest rate risk due to the impact of interest rate changes on its floating-rate financial assets[97](index=97&type=chunk) - The Group currently does not use any derivative contracts to hedge its interest rate risk and maintains a balanced portfolio of fixed-rate and floating-rate borrowings[97](index=97&type=chunk) [Credit Risk](index=38&type=section&id=Credit%20Risk) Credit risk primarily arises from trade and other receivables, managed through credit limits, monitoring overdue balances, and impairment assessments. - The Group's credit risk primarily arises from trade receivables from customer contracts and other receivables[98](index=98&type=chunk) - To mitigate credit risk, senior management is responsible for setting credit limits and monitoring procedures, and regularly reviewing and following up on overdue balances[98](index=98&type=chunk) - The Group's management assesses the credit risk of bank deposits and bank balances as low, as they are placed with reputable banks with high internal credit ratings[98](index=98&type=chunk) [Liquidity Risk](index=38&type=section&id=Liquidity%20Risk) The group manages liquidity risk by regularly monitoring cash flow and maintaining available committed credit facilities. - The Group's management regularly monitors the Group's cash flow position to ensure strict control over its cash flows[99](index=99&type=chunk) - The Group aims to maintain funding flexibility by keeping committed credit facilities available[99](index=99&type=chunk) [Capital Commitments](index=38&type=section&id=Capital%20Commitments) The group had no capital commitments as of June 30, 2025. - As of June 30, 2025, the Group had no capital commitments[100](index=100&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[101](index=101&type=chunk) [Employees and Remuneration Policy](index=39&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the group had 157 employees with total staff costs of HK$11.1 million, offering competitive remuneration and training based on performance. Employee and Remuneration Data | Indicator | 2025 June 30 | 2024 Dec 31 | | :--- | :--- | :--- | | Number of Employees (including Directors) | 157 | 173 | | Total Staff Costs (For the six months ended June 30) | HK$11.1 million | HK$11.7 million | - The Group recruits and promotes individuals based on their performance and development potential in their respective positions[102](index=102&type=chunk) [Other Information](index=40&type=section&id=Other%20Information) This section provides additional disclosures on future plans, significant transactions, director and shareholder interests, and corporate governance. [Future Plans for Material Investments and Capital Assets](index=40&type=section&id=Future%20Plans%20for%20Material%20Investments%20and%20Capital%20Assets) The group has no plans for any material investments or capital assets. - The Group has no plans for any material investments or capital assets[104](index=104&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) The group had no material acquisitions or disposals of subsidiaries or affiliates, nor held any material investments during the six months ended June 30, 2025. - For the six months ended June 30, 2025, the Group had no material acquisitions or disposals of subsidiaries or affiliated companies[105](index=105&type=chunk) - For the six months ended June 30, 2025, the Group held no material investments[105](index=105&type=chunk) [Disclosure of Interests of Directors and Substantial Shareholders](index=40&type=section&id=Disclosure%20of%20Interests%20of%20Directors%20and%20Substantial%20Shareholders) This section details the interests and short positions of directors and substantial shareholders in the company's shares and related corporations. [Interests and Short Positions of Directors and Chief Executive in Shares, Underlying Shares and Debentures of the Company or any Associated Corporation](index=40&type=section&id=Interests%20and%20Short%20Positions%20of%20Directors%20and%20Chief%20Executive%20in%20Shares%2C%20Underlying%20Shares%20and%20Debentures%20of%20the%20Company%20or%20any%20Associated%20Corporation) As of June 30, 2025, no directors or chief executives held any disclosable interests or short positions in the company's shares or related corporations. - No directors or chief executives of the company held any interests or short positions in the shares, underlying shares, or debentures of the company or any associated corporation that are required to be notified to the company and the Stock Exchange under Divisions 7 and 8 of Part XV of the Securities and Futures Ordinance[106](index=106&type=chunk) [Interests of Substantial Shareholders in Shares or Underlying Shares of the Company](index=41&type=section&id=Interests%20of%20Substantial%20Shareholders%20in%20Shares%20or%20Underlying%20Shares%20of%20the%20Company) As of June 30, 2025, Mr. Wang Jianyi and related entities were deemed to have a 75% long position in 195 million shares of the company. Interests of Substantial Shareholders in Shares or Underlying Shares of the Company | Shareholder Name/Name | Nature of Interest | Number of Shares Held (L) | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Mr. Wang Jianyi | Interest in controlled corporation | 195,000,000 | 75% | | Futong Investment | Interest in controlled corporation | 195,000,000 | 75% | | Futong China | Interest in controlled corporation | 195,000,000 | 75% | | Hangzhou Futong Optic-Communication Investment Co., Ltd. | Interest in controlled corporation | 195,000,000 | 75% | | Futong Hong Kong | Beneficial interest | 195,000,000 | 75% | - The company is directly 75% owned by Futong Hong Kong, which is wholly owned by Futong Optic-Communication, which is wholly owned by Futong China, of which Futong Investment holds 80% equity interest, and Futong Investment is wholly owned by Mr. Wang[110](index=110&type=chunk)[116](index=116&type=chunk) [Dividends](index=42&type=section&id=Dividends) The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025. - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025[113](index=113&type=chunk) [Share Option Scheme](index=42&type=section&id=Share%20Option%20Scheme) The company does not have a share option scheme. - The company does not have a share option scheme[114](index=114&type=chunk) [Directors' Rights to Acquire Shares](index=42&type=section&id=Directors'%20Rights%20to%20Acquire%20Shares) No rights to acquire shares or debentures of the company were granted to any director or their associates during the period. - No rights to acquire shares or debentures of the company were granted to any director or their respective spouses or children under 18 years of age[115](index=115&type=chunk) [Public Float](index=43&type=section&id=Public%20Float) The company maintained the minimum 25% public float as required by the Listing Rules throughout the period. - The company has maintained the minimum 25% of its issued shares held by public shareholders as stipulated by the Listing Rules[117](index=117&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) Neither the company nor its subsidiaries purchased, sold, or redeemed any of its listed securities during the six months ended June 30, 2025. - 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[118](index=118&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) All directors confirmed compliance with the Model Code for Securities Transactions by Directors throughout the period. - The company has confirmed that all directors have complied with the Model Code for Securities Transactions by Directors for the six months ended June 30, 2025, and up to the date of this report[119](index=119&type=chunk) [Competing Interests](index=43&type=section&id=Competing%20Interests) As of June 30, 2025, no directors, controlling shareholders, or their associates had any competing interests 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 the Group's business[120](index=120&type=chunk) [Audit Committee](index=43&type=section&id=Audit%20Committee) The Audit Committee, comprising three independent non-executive directors, reviewed the interim financial results and oversees financial reporting, risk management, and internal controls. - The Audit Committee comprises three independent non-executive directors: Mr. Liang Zhaokun (Chairman), Mr. Liu Shaoheng, and Mr. Li Wei[121](index=121&type=chunk) - The primary responsibilities of the Audit Committee are to assist the Board in reviewing financial information, overseeing the financial reporting system, risk management, internal control systems, and the relationship with external auditors[123](index=123&type=chunk) - The Audit Committee has reviewed the unaudited condensed consolidated interim results of the Group for the six months ended June 30, 2025[123](index=123&type=chunk) [Corporate Governance Practices and Other Information](index=44&type=section&id=Corporate%20Governance%20Practices%20and%20Other%20Information) The company adopted and complied with the Corporate Governance Code, aiming to maintain high standards for effective management, transparency, and shareholder protection. - The company has adopted the Corporate Governance Code as its own code of corporate governance practices and has complied with it for the six months ended June 30, 2025[124](index=124&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 the company's transparency, improves its risk management and internal control, and protects the interests of the company's shareholders and the company as a whole[124](index=124&type=chunk) [Events After Reporting Period](index=44&type=section&id=Events%20After%20Reporting%20Period) High-Tech Bridge renewed its property lease agreement with Futong Group International Limited for one year, effective July 1, 2025, with no other significant post-period events. - High-Tech Bridge renewed its property lease agreement with Futong Group International Limited for a period of one year, effective from July 1, 2025[125](index=125&type=chunk) - Save as disclosed above, no other significant events requiring disclosure occurred after June 30, 2025, and up to the date of approval of this report[125](index=125&type=chunk) [Compliance with Laws and Regulations](index=45&type=section&id=Compliance%20with%20Laws%20and%20Regulations) The group was not aware of any material non-compliance with relevant laws and regulations during the six months ended June 30, 2025. - For the six months ended June 30, 2025, the Group was not aware of any material non-compliance with any relevant laws and regulations that would have a significant impact on it[126](index=126&type=chunk) [Publication of Interim Report](index=45&type=section&id=Publication%20of%20Interim%20Report) The interim report is published on the websites of HKEX and the company. - This interim report is published on the website of Hong Kong Exchanges and Clearing Limited (www.hkexnews.com.hk) and the company's website (www.transtechoptel.com)[127](index=127&type=chunk)

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