[Financial Summary and Interim Results Announcement](index=1&type=section&id=%E8%B2%A1%E5%8B%99%E6%91%98%E8%A6%81%E4%B8%8E%E4%B8%AD%E6%9C%9F%E6%A5%AD%E7%B8%BE%E5%85%AC%E5%91%8A) This section presents Vedan International's H1 2025 unaudited financial performance, showing declines in key profit metrics and EPS, with an increased interim dividend [Financial Highlights](index=1&type=section&id=%E8%B2%A1%E5%8B%99%E6%91%98%E8%A6%81) This section provides a concise overview of Vedan International's H1 2025 financial performance, detailing key metrics and their year-on-year changes Financial Highlights Summary | Indicator | Six Months Ended June 30, 2025 (USD thousands) | Six Months Ended June 30, 2024 (USD thousands) | Change (USD thousands) | | :--- | :--- | :--- | :--- | | Revenue | 184,267 | 185,155 | -888 | | Gross Profit | 31,809 | 32,903 | -1,094 | | Profit for the Period | 7,610 | 8,344 | -734 | | Profit Attributable to Owners of the Company | 7,598 | 8,331 | -733 | | Basic Earnings Per Share | 0.50 US cents | 0.55 US cents | | | Diluted Earnings Per Share | 0.50 US cents | 0.55 US cents | | | Proposed Interim Dividend Per Share | 0.300 US cents | 0.273 US cents | | | Total Dividends Paid and Proposed Per Share | 0.300 US cents | 0.273 US cents | | [Interim Condensed Consolidated Statement of Financial Position](index=2&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B3%87%E7%94%A2%E8%B2%A0%E5%82%B5%E8%A1%A8) As of June 30, 2025, the Group's total assets slightly increased, with non-current assets decreasing and current assets increasing, while total equity slightly decreased and total liabilities increased, maintaining a stable financial structure Consolidated Statement of Financial Position | Indicator | June 30, 2025 (USD thousands) | December 31, 2024 (USD thousands) | | :--- | :--- | :--- | | **Assets** | | | | Total Non-current Assets | 126,523 | 134,297 | | Total Current Assets | 244,930 | 234,394 | | **Total Assets** | **371,453** | **368,691** | | **Equity** | | | | Total Equity | 301,643 | 302,416 | | **Liabilities** | | | | Total Non-current Liabilities | 3,975 | 4,836 | | Total Current Liabilities | 65,835 | 61,439 | | **Total Liabilities** | **69,810** | **66,275** | | **Total Equity and Liabilities** | **371,453** | **368,691** | [Interim Condensed Consolidated Statement of Profit or Loss](index=4&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, the Group's revenue, gross profit, operating profit, and profit for the period all decreased year-on-year, with finance income turning positive and EPS also declining Consolidated Statement of Profit or Loss | Indicator | Six Months Ended June 30, 2025 (USD thousands) | Six Months Ended June 30, 2024 (USD thousands) | | :--- | :--- | :--- | | Revenue | 184,267 | 185,155 | | Cost of Sales | (152,458) | (152,252) | | Gross Profit | 31,809 | 32,903 | | Other Income - Net | 1,194 | 1,354 | | Selling and Distribution Expenses | (9,780) | (9,768) | | Administrative Expenses | (12,216) | (12,118) | | Operating Profit | 11,007 | 12,371 | | Finance Income / (Expenses) - Net | 123 | (418) | | Profit Before Income Tax | 10,755 | 11,491 | | Income Tax Expense | (3,145) | (3,147) | | Profit for the Period | 7,610 | 8,344 | | Profit Attributable to Owners of the Company | 7,598 | 8,331 | | Basic and Diluted Earnings Per Share (US cents) | 0.50 | 0.55 | [Interim Condensed Consolidated Statement of Comprehensive Income](index=5&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, the Group's profit for the period and total comprehensive income both decreased year-on-year, but exchange differences turned from loss to gain Consolidated Statement of Comprehensive Income | Indicator | Six Months Ended June 30, 2025 (USD thousands) | Six Months Ended June 30, 2024 (USD thousands) | | :--- | :--- | :--- | | Profit for the Period | 7,610 | 8,344 | | Other Comprehensive Income / (Loss) | | | | Exchange Differences | 297 | (395) | | Total Comprehensive Income for the Period | 7,907 | 7,949 | | Total Comprehensive Income for the Period Attributable to Owners of the Company | 7,895 | 7,936 | [Notes to the Interim Condensed Consolidated Financial Information](index=6&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%E8%B3%87%E6%96%99%E9%99%84%E8%A8%BB) This section provides detailed notes on the basis of preparation, accounting policies, segment information, and other financial details for the interim period [Basis of Preparation and Accounting Policies](index=6&type=section&id=%E7%B7%A8%E8%A3%BD%E5%9F%BA%E6%BA%96%E8%88%87%E6%9C%83%E8%A8%88%E6%94%BF%E7%AD%96) The interim condensed consolidated financial information is prepared under HKAS 34, with consistent accounting policies, and new standards effective in 2025 had no material impact - The interim condensed consolidated financial information has been prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" issued by the Hong Kong Institute of Certified Public Accountants[9](index=9&type=chunk) - The accounting policies applied are consistent with those described in the annual financial statements for the year ended December 31, 2024, except for specific amendments[11](index=11&type=chunk) - New and amended accounting standards, including HKFRS 9, 18, and 19, issued but not yet effective for the financial year beginning January 1, 2025, have not been early adopted by the Group[12](index=12&type=chunk)[13](index=13&type=chunk) [Segment Information](index=8&type=section&id=%E5%88%86%E9%83%A8%E8%B3%87%E6%96%99) The Group operates a single business segment, manufacturing and selling fermented food additives, biochemical products, and tapioca starch industrial products, with revenue geographically segmented - The Group operates a single business segment, which is the manufacturing and sale of fermented food additives, biochemical products, and tapioca starch industrial products[14](index=14&type=chunk) [Segment Revenue](index=8&type=section&id=%E5%88%86%E9%83%A8%E6%94%B6%E7%9B%8A) For the six months ended June 30, 2025, total Group revenue was USD 184,267 thousand, slightly lower year-on-year, with declines in Vietnam and Japan, but significant growth in China and the US Segment Revenue by Region | Region | Jan-Jun 2025 (USD thousands) | Jan-Jun 2024 (USD thousands) | Change (USD thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Vietnam | 73,350 | 79,505 | -6,155 | -7.7% | | Japan | 32,131 | 35,218 | -3,087 | -8.8% | | China | 34,851 | 29,126 | 5,726 | 19.7% | | United States | 17,573 | 13,011 | 4,562 | 35.1% | | Taiwan | 7,464 | 6,384 | 1,080 | 16.9% | | ASEAN Member States (excluding Vietnam) | 13,573 | 14,813 | -1,240 | -8.4% | | Other Regions | 5,325 | 7,098 | -1,773 | -25.0% | | **Total Revenue** | **184,267** | **185,155** | **-888** | **-0.5%** | [Geographical Location of Non-current Assets](index=9&type=section&id=%E9%9D%9E%E6%B5%81%E5%8B%95%E8%B3%87%E7%94%A2%E6%89%80%E5%9C%A8%E5%9C%B0) As of June 30, 2025, the majority of the Group's non-current assets are located in Vietnam, followed by China, with the total value decreasing from year-end 2024 Non-current Assets by Region | Region | June 30, 2025 (USD thousands) | December 31, 2024 (USD thousands) | | :--- | :--- | :--- | | Vietnam | 117,316 | 124,689 | | China | 8,113 | 8,105 | | Other | 1 | 2 | | **Total** | **125,430** | **132,796** | [Trade Receivables](index=9&type=section&id=%E6%87%89%E6%94%B6%E8%B2%BF%E6%98%93%E8%B3%87%E6%AC%BE) As of June 30, 2025, net trade receivables were USD 32,319 thousand, a decrease from year-end 2024, with credit terms typically 30 to 90 days and reduced loss allowance Trade Receivables Summary | Indicator | June 30, 2025 (USD thousands) | December 31, 2024 (USD thousands) | | :--- | :--- | :--- | | Trade receivables from third parties | 32,508 | 34,053 | | Less: Loss allowance | (189) | (477) | | **Trade receivables - Net** | **32,319** | **33,576** | Trade Receivables Ageing Analysis | Ageing | June 30, 2025 (USD thousands) | December 31, 2024 (USD thousands) | | :--- | :--- | :--- | | 0 to 30 days | 30,518 | 32,918 | | 31 to 90 days | 1,501 | 520 | | 91 to 180 days | 219 | 163 | | 181 to 365 days | 151 | – | | Over 365 days | 119 | 452 | | **Total** | **32,508** | **34,053** | Loss Allowance for Trade Receivables | Loss allowance | 2025 (USD thousands) | 2024 (USD thousands) | | :--- | :--- | :--- | | Loss allowance at January 1 | 477 | 350 | | Decrease in loss allowance recognized in the interim condensed consolidated statement of profit or loss | (288) | (43) | | **Loss allowance at June 30** | **189** | **307** | [Trade Payables](index=11&type=section&id=%E6%87%89%E4%BB%98%E8%B2%BF%E6%98%93%E8%B3%87%E6%AC%BE) As of June 30, 2025, total trade payables were USD 15,573 thousand, a significant 38.4% increase from year-end 2024, primarily due within 0-30 days Trade Payables Ageing Analysis | Ageing | June 30, 2025 (USD thousands) | December 31, 2024 (USD thousands) | | :--- | :--- | :--- | | 0 to 30 days | 11,960 | 9,795 | | 31 to 90 days | 3,080 | 1,459 | | Over 90 days | 533 | – | | **Total** | **15,573** | **11,254** | - Total trade payables increased by **USD 4,319 thousand**, or approximately **38.4%**, compared to the end of 2024[56](index=56&type=chunk) [Other Income - Net](index=11&type=section&id=%E5%85%B6%E4%BB%96%E6%94%B6%E7%9B%8A%EF%BC%8D%E6%B7%A8%E9%A1%8D) For the six months ended June 30, 2025, net other income was USD 1,194 thousand, a decrease from the prior year, mainly due to a significant drop in net exchange gains Other Income - Net Breakdown | Item | 2025 (USD thousands) | 2024 (USD thousands) | | :--- | :--- | :--- | | Net exchange gains | 448 | 1,443 | | Loss on disposal of property, plant and equipment | (7) | (24) | | Sale of scrap materials | 193 | 199 | | Government grants | 72 | 13 | | Fair value gain on structured bank deposits | – | 4 | | Impairment of goodwill | – | (491) | | Rental income | 79 | 33 | | Others | 409 | 177 | | **Other income - Net** | **1,194** | **1,354** | [Expenses by Nature](index=12&type=section&id=%E6%8C%89%E6%80%A7%E8%B3%AA%E5%88%86%E9%A1%9E%E4%B9%8B%E9%96%8B%E6%94%AF) For the six months ended June 30, 2025, total cost of sales, selling and distribution expenses, and administrative expenses slightly increased, driven by changes in inventories, employee benefits, and write-offs Expenses by Nature Summary | Item | 2025 (USD thousands) | 2024 (USD thousands) | | :--- | :--- | :--- | | Changes in inventories of finished goods and work in progress and consumables used | 124,012 | 121,448 | | Amortisation of intangible assets | 36 | 35 | | Amortisation of right-of-use assets | 296 | 284 | | Auditor's remuneration - audit services | 129 | 129 | | Depreciation of property, plant and equipment | 10,502 | 10,992 | | Employee benefit expenses | 21,510 | 20,745 | | Reversal of loss allowance for trade receivables | (288) | (43) | | Reversal of provision for inventories | (313) | (299) | | Write-off of property, plant and equipment | 550 | – | | Short-term lease payments | 79 | 145 | | Technical support fees | 1,575 | 1,569 | | Travel expenses | 787 | 821 | | Transportation expenses | 3,181 | 3,057 | | Advertising expenses | 928 | 1,153 | | Repair and maintenance expenses | 7,600 | 8,969 | | Other expenses | 3,870 | 5,133 | | **Total cost of sales, selling and distribution expenses and administrative expenses** | **174,454** | **174,138** | [Finance Income / (Expenses) - Net](index=13&type=section&id=%E8%B2%A1%E5%8B%99%E6%94%B6%E5%85%A5%EF%BC%8F%EF%BC%88%E6%94%AF%E5%87%BA%EF%BC%89%EF%BC%8D%E6%B7%A8%E9%A1%8D) For the six months ended June 30, 2025, the Group's net finance income turned positive at USD 123 thousand from an expense in the prior year, mainly due to a significant reduction in interest expense on bank borrowings Finance Income / (Expenses) - Net Breakdown | Item | 2025 (USD thousands) | 2024 (USD thousands) | | :--- | :--- | :--- | | Interest income from short-term bank deposits | 672 | 452 | | Interest income from an associate | 5 | 2 | | Interest expense on bank borrowings | (511) | (833) | | Interest expense on lease liabilities | (43) | (39) | | **Finance income / (expenses) - Net** | **123** | **(418)** | [Income Tax Expense](index=13&type=section&id=%E6%89%80%E5%BE%97%E7%A8%85%E9%96%8B%E6%94%AF) For the six months ended June 30, 2025, total income tax expense was USD 3,145 thousand, largely consistent with the prior year, with varying corporate income tax rates across regions Income Tax Expense Summary | Item | 2025 (USD thousands) | 2024 (USD thousands) | | :--- | :--- | :--- | | Corporate income tax | 2,718 | 3,440 | | Deferred income tax | 427 | (293) | | **Total** | **3,145** | **3,147** | - The corporate income tax rate for principal operations in Vietnam is **15%**, while non-principal operations are subject to **20%**[29](index=29&type=chunk) - Business operations in China are subject to a corporate income tax rate of **25%**, and those in Taiwan are subject to **20%**[30](index=30&type=chunk)[32](index=32&type=chunk) [Earnings Per Share](index=14&type=section&id=%E6%AF%8F%E8%82%A1%E7%86%B1%E5%88%A9) For the six months ended June 30, 2025, basic and diluted earnings per share were 0.50 US cents, a decrease from 0.55 US cents in the prior year - Basic earnings per share are calculated by dividing profit attributable to owners of the Company of **USD 7,598,000** by the weighted average number of **1,522,742,000** ordinary shares outstanding during the period[33](index=33&type=chunk) - Basic and diluted earnings per share were **0.50 US cents** (2024: **0.55 US cents**)[33](index=33&type=chunk) [Dividends](index=14&type=section&id=%E8%82%A1%E6%81%AF) The Board resolved to declare an interim dividend of 0.300 US cents per share, an increase from the prior year, with the 2024 final dividend paid in June 2025 - The Board has resolved to declare an interim dividend of **0.300 US cents** per share (2024: **0.273 US cents**)[34](index=34&type=chunk) - The final dividend of **0.570 US cents** per share for the year ended December 31, 2024, was paid on June 17, 2025[34](index=34&type=chunk) [Management Discussion and Analysis](index=15&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%A4%E8%A8%8E%E8%AB%96%E5%8F%8A%E5%88%86%E6%9E%90) This section provides an in-depth analysis of the Group's business performance, operating results, financial position, and future outlook, considering global and regional economic factors [Business Overview](index=15&type=section&id=%E6%A5%AD%E5%8B%99%E7%B8%BD%E8%A6%BD) H1 2025 saw global economic challenges, strong Vietnamese growth, and pressured Chinese recovery, while the Group's revenue slightly declined with reduced gross and net margins [Global and Regional Economic Environment](index=15&type=section&id=%E5%85%A8%E7%90%83%E5%8F%8A%E5%8D%80%E5%9F%9F%E7%B6%93%E6%BF%9F%E7%92%B0%E5%A2%83) The global economy faces recovery pressures from tariffs, high interest rates, and geopolitical risks, while Vietnam's GDP growth hit a 15-year high, and China's recovery remains challenged - The global economy continues to face numerous challenges, with US reciprocal tariffs severely impacting cross-border trade, free trade agreements shifting towards protectionism, and high interest rates creating significant pressure on global economic recovery[35](index=35&type=chunk) - Vietnam's annualized GDP growth rate reached **7.52%**, a 15-year high, with FDI registration exceeding **USD 21.5 billion**, an increase of over **32.6%** year-on-year[35](index=35&type=chunk)[36](index=36&type=chunk) - China's GDP grew by **5.3%** year-on-year, but export momentum was significantly impacted by reciprocal tariffs, and domestic demand remained under pressure due to high youth unemployment and a sluggish real estate market[36](index=36&type=chunk) [Overall Group Performance](index=16&type=section&id=%E9%9B%86%E5%9C%98%E6%95%B4%E9%AB%94%E6%A5%AD%E7%B8%BE%E8%A1%A8%E7%8F%BE) The Group's H1 2025 revenue decreased by 0.5% to USD 184,267 thousand, with gross margin falling to 17.3% and net margin to 4.1%, primarily due to market competition and product demand shifts - The Group's revenue for the period reached approximately **USD 184,267,000**, a decrease of **0.5%** or **USD 888,000** compared to the same period last year[37](index=37&type=chunk) - The overall gross profit margin decreased from **17.8%** in H1 2024 to **17.3%**, with gross profit at **USD 31,809,000**, a decrease of **USD 1,094,000** from the prior year[38](index=38&type=chunk) - The net profit margin decreased from **4.5%** in H1 2024 to **4.1%**, with net profit at **USD 7,610,000**, a decrease of **USD 734,000** from the prior year[38](index=38&type=chunk) [Operating Analysis](index=17&type=section&id=%E7%87%9F%E6%A5%AD%E5%88%86%E6%9E%90) The Group's total revenue slightly declined in H1, mainly due to reduced sales in Vietnam, Japan, and ASEAN, offset by strong growth in China and the US, with varied product performance [Market Sales Analysis](index=17&type=section&id=%E5%B8%82%E5%A0%B4%E9%8A%B7%E5%94%AE%E5%88%86%E6%9E%90) Vietnam remains the largest market but saw a 7.7% revenue decrease, while Japan and ASEAN also declined; China's revenue grew 19.7%, and the US surged 35.1% due to early shipments Market Sales by Country | Country | Jan-Jun 2025 Cumulative (USD thousands) | Jan-Jun 2024 Cumulative (USD thousands) | Difference (USD thousands) | Difference (%) | | :--- | :--- | :--- | :--- | :--- | | Vietnam | 73,350 | 79,505 | -6,155 | -7.7% | | Japan | 32,131 | 35,218 | -3,087 | -8.8% | | China | 34,851 | 29,125 | 5,726 | 19.7% | | ASEAN Countries | 13,573 | 14,813 | -1,240 | -8.4% | | United States | 17,573 | 13,011 | 4,562 | 35.1% | | Other | 12,789 | 13,483 | -694 | -5.1% | | **Total** | **184,267** | **185,155** | **-888** | **-0.5%** | - Vietnam market revenue decreased by **7.7%**, primarily due to slower market recovery and reduced demand for MSG, fertilizer & feed, and specialty chemical products, coupled with low-price competition from imported MSG products[40](index=40&type=chunk) - US market revenue increased by **35.1%**, mainly due to the uncertainty of reciprocal tariffs, leading US customers to expedite shipments, thus boosting regional revenue[44](index=44&type=chunk) [Product Sales Analysis](index=19&type=section&id=%E7%94%A2%E5%93%81%E9%8A%B7%E5%94%AE%E5%88%86%E6%9E%90) MSG and seasonings, modified starch, specialty chemicals, and fertilizer & feed revenues declined, while coffee beans surged 124.2% and other products grew 46.0%, driven by increased sales in China Product Sales by Category | Item | Jan-Jun 2025 Cumulative (USD thousands) | Jan-Jun 2024 Cumulative (USD thousands) | Difference (USD thousands) | Difference (%) | | :--- | :--- | :--- | :--- | :--- | | MSG and Seasonings | 99,745 | 105,611 | -5,866 | -5.6% | | Modified Starch, Native Starch, and Starch Sugar | 31,369 | 33,446 | -2,077 | -6.2% | | Specialty Chemicals | 9,433 | 9,963 | -530 | -5.3% | | Fertilizer and Feed | 14,931 | 16,414 | -1,483 | -9.0% | | Coffee Beans | 19,558 | 8,723 | 10,835 | 124.2% | | Other | 9,231 | 10,998 | -1,767 | -16.1% | | **Total** | **184,267** | **185,155** | **-888** | **-0.5%** | - Increased sales of coffee beans and bulk raw materials drove other product revenue up by approximately **USD 9,068,000** or **46.0%** year-on-year[51](index=51&type=chunk) - Revenue from MSG and seasonings decreased, primarily due to unrecovered demand and low-price market competition in Vietnam, Japan, China, and ASEAN markets[47](index=47&type=chunk) [Key Raw Materials / Energy Overview](index=22&type=section&id=%E4%B8%BB%E8%A6%81%E5%8E%9F%E6%96%99%EF%BC%8F%E8%83%BD%E6%BA%90%E6%A6%82%E6%B3%81) Cassava and molasses prices fell due to increased supply, while international crude oil and coal markets remained soft; Vietnam's energy policy shifts towards renewables, with the Group evaluating green energy solutions [Cassava / Starch](index=22&type=section&id=%E6%9C%A8%E8%96%AF%EF%BC%8F%E6%B7%80%E7%B2%89) Cassava/starch prices declined due to increased production in major regions and weak market demand, with the Group securing most of its 2025 raw material needs to control costs - Prices for the entire season declined due to increased production in major regions like Thailand, Vietnam, and Cambodia, while market demand remained weak[52](index=52&type=chunk) - The Group has secured most of its raw material requirements for 2025 during the harvest season, controlling production costs and enhancing profitability[52](index=52&type=chunk) [Molasses](index=22&type=section&id=%E7%B3%96%E8%9C%9C) Molasses prices decreased due to a slight increase in total production in Vietnam and internationally, leading to a slightly looser overall supply, prompting the Group to monitor market dynamics - Vietnam's total molasses production slightly increased this season, and international molasses production also rose in H1 2025 due to stable climate in major producing countries, leading to a slightly looser overall supply and price declines[53](index=53&type=chunk) - In addition to securing domestic molasses supply in Vietnam, the Group will continue to monitor international molasses market dynamics, place orders as appropriate, and actively develop new supply sources[53](index=53&type=chunk) [Energy](index=23&type=section&id=%E8%83%BD%E6%BA%90) International crude oil and coal markets are soft due to oversupply and weak demand; Vietnam's energy policy is shifting towards renewables, and the Group is evaluating green energy solutions for net-zero carbon emissions - The international crude oil market shows an oversupply trend, with relatively soft prices, and WTI oil prices remaining between **USD 62** and **USD 75** per barrel[54](index=54&type=chunk) - The international coal market faces downward pressure, primarily due to ample supply and weak demand, leading to a slight price decrease[55](index=55&type=chunk) - 2025 is a critical year for Vietnam's power energy policy transformation, with new regulations and plans vigorously promoting low-carbon energy, primarily renewables and nuclear power[55](index=55&type=chunk) - The Group utilizes a cogeneration power system in Vietnam to ensure stable electricity supply and is actively evaluating various green energy solutions to meet net-zero carbon emission targets[55](index=55&type=chunk) [Financial Review](index=24&type=section&id=%E8%B2%A1%E5%8B%99%E5%9B%9E%E9%A1%A7) The Group experienced reduced liquidity, increased borrowings, decreased trade receivables, increased inventories, and significantly higher trade payables, with a stable financial structure despite a lower current ratio [Liquidity and Financial Resources](index=24&type=section&id=%E6%B5%81%E5%8B%95%E8%B3%87%E9%87%91%E8%88%87%E8%B2%A1%E6%94%BF%E8%B3%87%E6%BA%90) Total liquidity decreased by 7.3% to USD 61,655 thousand, borrowings increased by 9.8%, trade receivables decreased by 3.7%, inventories increased by 4.6%, and trade payables surged by 38.4%, while the current ratio slightly declined to 3.72 - The Group's cash and cash equivalents, short-term bank deposits, restricted deposits, and structured bank deposits totaled **USD 61,655,000**, a decrease of **USD 4,862,000** or **7.3%** from the end of 2024[56](index=56&type=chunk) - Total borrowings amounted to **USD 27,809,000**, an increase of **USD 2,490,000** or approximately **9.8%** from the end of 2024[56](index=56&type=chunk) - Trade payables were **USD 15,573,000**, an increase of **USD 4,319,000** or approximately **38.4%** from the end of 2024; the current ratio decreased from **3.82** at the end of 2024 to **3.72**, yet the Group's financial structure remains stable[56](index=56&type=chunk) - Capital expenditure for the period totaled **USD 4,122,000**, an increase of **45.4%** from **USD 2,835,000** in the prior year, primarily for equipment replacement and upgrades at the Vietnam subsidiary[57](index=57&type=chunk) [Exchange Rates](index=25&type=section&id=%E5%BD%99%E7%8E%87) The Vietnamese Dong depreciated approximately 2.7% against the US dollar in H1 due to interest rate differentials, while the Renminbi also saw a slight depreciation against the US dollar - In H1 2025, the Vietnamese Dong depreciated by approximately **2.7%** against the US dollar, with the exchange rate falling from around **25,080** at the beginning of the year to approximately **26,095** by mid-year[58](index=58&type=chunk) - The average exchange rate for Renminbi against the US dollar in H1 2025 was **7.18**, a slight depreciation compared to **7.11** in H1 2024[60](index=60&type=chunk) [Earnings Per Share and Dividends](index=26&type=section&id=%E6%AF%8F%E8%82%A1%E7%86%B1%E5%88%A9%E5%8F%8A%E8%82%A1%E6%81%AF) Basic earnings per share for the period were 0.50 US cents, and the Board declared an interim dividend of 0.300 US cents per share, resulting in a 60.0% earnings payout ratio - Basic earnings per share for the period were **0.50 US cents**[61](index=61&type=chunk) - The Board decided to declare an interim dividend of **0.300 US cents** per share[61](index=61&type=chunk) - The earnings payout ratio for the first half of the year was **60.0%**[61](index=61&type=chunk) [Outlook](index=26&type=section&id=%E5%B1%95%E6%9C%9B) The Group maintains cautious optimism for H2 2025 amidst global uncertainties, focusing on product expansion, market diversification, technological advancement, and sustainability to drive growth [Macroeconomic Outlook](index=26&type=section&id=%E5%AE%8F%E8%A7%80%E7%B6%93%E6%BF%9F%E5%B1%95%E6%9C%9B) H2 2025 global economy faces uncertainties from US-China tensions, inflation, and geopolitical conflicts, while Vietnam shows strong growth and controlled inflation, and China's recovery remains constrained - Looking ahead to H2 2025, the global economic situation remains uncertain due to ongoing US-China economic rivalry, inflation and exchange rate fluctuations, unresolved regional conflicts, and supply chain restructuring caused by tariff wars[65](index=65&type=chunk) - Vietnam's H1 2025 GDP growth rate reached **7.52%**, slightly higher than the prior year, with average CPI inflation at **3.7%**, remaining below the government's **4.5%** target[62](index=62&type=chunk) - China's H1 2025 economic growth rate was approximately **4.6%**, with persistent structural pressures in manufacturing and real estate, high youth unemployment, weak consumer confidence, and limited domestic demand recovery[63](index=63&type=chunk) [Group Strategies and Key Initiatives](index=27&type=section&id=%E9%9B%86%E5%9C%98%E7%AD%96%E7%95%A5%E8%88%87%E9%87%8D%E9%BB%9E%E5%B7%A5%E4%BD%9C) The Group plans to expand product lines, develop high-value products, explore new markets and e-commerce, enhance production technology, optimize procurement, strengthen regional cooperation, and invest in automation, AI, and carbon reduction - Expand product lines and optimize product portfolio, gradually developing value-added products and increasing the proportion of functional and high-value product development[63](index=63&type=chunk) - Actively expand into new channels and markets, adjust product positioning and sales methods, seek partnerships to enlarge market scale, and invest in and develop e-commerce sales channels[63](index=63&type=chunk) - Continuously refine production technology and enhance efficiency, master key technologies to boost core competitiveness, and revitalize idle equipment utilization[64](index=64&type=chunk) - Monitor trends in bulk raw material market prices, actively seek alternative raw material solutions, and flexibly execute procurement strategies to ensure stable raw material supply[64](index=64&type=chunk) - Leverage Vietnam's production base to continuously develop markets with Free Trade Agreements (FTAs) and the Regional Comprehensive Economic Partnership (RCEP) signed with Vietnam[64](index=64&type=chunk) - Enhance equipment automation, accelerate administrative process digitalization, and develop AI enterprise applications to improve decision-making management efficiency[64](index=64&type=chunk) - Intensify efforts in evaluating energy-saving solutions and promoting various energy-saving and consumption reduction initiatives, striving towards carbon reduction[64](index=64&type=chunk) [Conclusion](index=29&type=section&id=%E7%B8%BD%E7%B5%90) Despite global economic uncertainties, the Group remains cautiously optimistic, committed to its established strategies, market penetration, and new operational ventures to achieve synergistic growth - The Group maintains a cautious yet optimistic outlook, continuing to deepen its market presence in line with established operating strategies and sales networks[65](index=65&type=chunk) - Actively explore new operational areas for new products and businesses, including through strategic alliances[65](index=65&type=chunk) - The Group remains confident in leveraging operational synergies to drive overall business growth and development[65](index=65&type=chunk) [Other Information](index=29&type=section&id=%E5%85%B6%E4%BB%96%E8%B3%87%E6%96%99) This section covers interim dividend details, share transactions, compliance with director's securities trading code and corporate governance code, audit committee review, and board composition [Interim Dividend and Closure of Register of Members](index=29&type=section&id=%E4%B8%AD%E6%9C%9F%E8%82%A1%E6%81%AF%E5%8F%8A%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) The Board declared an interim dividend of 0.300 US cents per share, payable in HKD on October 13, 2025, with the share register closed from September 22 to September 25, 2025, for eligibility - The Board resolved to declare an interim dividend of **0.300 US cents** per share for the six months ended June 30, 2025, payable in HKD on October 13, 2025[66](index=66&type=chunk) - The Company's register of members will be closed from Monday, September 22, 2025, to Thursday, September 25, 2025 (both dates inclusive)[67](index=67&type=chunk) - The record date will be Thursday, September 25, 2025[67](index=67&type=chunk) [Purchase, Redemption or Sale of the Company's Listed Securities](index=30&type=section&id=%E8%B3%BC%E8%B2%B7%E3%80%81%E8%B4%96%E5%9B%9E%E6%88%96%E5%87%BA%E5%94%AE%E6%9C%AC%E5%85%AC%E5%8F%B8%E4%B8%8A%E5%B8%82%E8%AD%89%E5%88%B8) Neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the six months ended June 30, 2025 - Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's shares during the six months ended June 30, 2025[68](index=68&type=chunk) [Compliance with the Model Code for Securities Transactions by Directors](index=30&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 Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 of the HKEX Listing Rules for the reporting period ended June 30, 2025 - Following specific enquiries with all Directors, it is confirmed that they have complied with the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 of the HKEX Listing Rules for the reporting period ended June 30, 2025[69](index=69&type=chunk) [Compliance with Appendix C1 of the HKEX Listing Rules](index=30&type=section&id=%E9%81%B5%E5%AE%88%E9%A6%99%E6%B8%AF%E8%81%AF%E4%BA%A4%E6%89%80%E4%B8%8A%E5%B8%82%E8%A6%8F%E5%89%87%E9%99%84%E9%8C%84C1) The Company complied with the Corporate Governance Code in Appendix C1 of the HKEX Listing Rules for the period ended June 30, 2025, with one exception regarding the Chairman's attendance at the AGM - The Company has complied with the provisions of the Corporate Governance Code as set out in Appendix C1 of the HKEX Listing Rules for the reporting period ended June 30, 2025[70](index=70&type=chunk) - Mr. Yang Tou Hsiung, the Chairman of the Board, was unable to attend the Company's Annual General Meeting held on May 27, 2025, due to business commitments, which constitutes an exception to Code Provision F.2.2 of the Corporate Governance Code[70](index=70&type=chunk) [Audit Committee](index=31&type=section&id=%E5%AF%A9%E8%A8%88%E5%A7%94%E5%93%A1%E6%9C%83) The Audit Committee reviewed the Group's accounting principles, internal controls, and financial reporting, including the unaudited interim condensed consolidated financial information for H1 2025, which was reviewed by PwC - The Audit Committee, together with management, has reviewed the accounting principles and practices adopted by the Group and discussed internal controls and financial reporting matters[71](index=71&type=chunk) - The unaudited interim condensed consolidated financial information for the six months ended June 30, 2025, has been reviewed by the Group's auditor, PricewaterhouseCoopers, in accordance with Hong Kong Standard on Review Engagements 2410 issued by the HKICPA[71](index=71&type=chunk) [Publication of Interim Report](index=31&type=section&id=%E5%88%8A%E7%99%BB%E4%B8%AD%E6%9C%9F%E5%A0%B1%E5%91%8A) The Company will dispatch its interim report for the six months ended June 30, 2025, to shareholders and publish it on the HKEX and Company websites in due course - The Company will dispatch its interim report for the six months ended June 30, 2025, to shareholders in due course, and it will also be published on the websites of Hong Kong Exchanges and Clearing Limited and the Company[72](index=72&type=chunk) [Acknowledgements and Board Composition](index=32&type=section&id=%E8%87%B4%E8%AC%9D%E5%8F%8A%E8%91%A3%E4%BA%8B%E6%9C%83%E7%B5%84%E6%88%90) The Board expresses gratitude to shareholders and employees for their support and dedication, and details its composition of executive, non-executive, and independent non-executive directors - The Board takes this opportunity to sincerely thank the Company's shareholders for their support and the Company's employees for their dedication and diligence during the period[73](index=73&type=chunk) - The Board comprises executive directors Mr. Yang Tou Hsiung, Mr. Yang Cheng, Mr. Yang Kun Hsiang, Mr. Yang Chen Wen, Mr. Yang Kun Chou; non-executive directors Mr. Huang Ching Jung, Mr. Chou Szu Cheng; and independent non-executive directors Mr. Chao Pei Hung, Mr. Ko Chun Cheng, Mr. Huang Chung Feng, and Ms. Lee Pei Fen[75](index=75&type=chunk)

[Company Information](index=1&type=section&id=%E5%85%AC%E5%8F%B8%E4%BF%A1%E6%81%AF) [Company Overview](index=1&type=section&id=%E5%85%AC%E5%8F%B8%E6%A6%82%E5%86%B5) Bayzed Health Group Inc., a Cayman Islands-registered company (stock code 02609), reports unaudited interim results for the six months ended June 30, 2025 - Company Name: **Bayzed Health Group Inc.** (佰澤醫療集團)[2](index=2&type=chunk) - Registered in: **Cayman Islands**[2](index=2&type=chunk) - Stock Code: **02609**[2](index=2&type=chunk) - Reporting Period: **Unaudited consolidated interim results for the six months ended June 30, 2025**[2](index=2&type=chunk) [Financial Highlights](index=1&type=section&id=%E8%B2%A1%E5%8B%99%E6%91%98%E8%A6%81) [Key Financial Indicators](index=1&type=section&id=%E5%85%B3%E9%94%AE%E8%B4%A2%E5%8A%A1%E6%8C%87%E6%A0%87) For the six months ended June 30, 2025, revenue slightly increased by 0.7% year-on-year, gross profit grew by 8.3%, but loss for the period significantly expanded by 176.0%, while adjusted profit increased by 72.8% 截至2025年6月30日止六個月关键财务数据 (RMB million) | 指标 | 2025年6月30日 (RMB million) | 2024年6月30日 (RMB million) | 同比变化 (%) | | :--- | :--- | :--- | :--- | | 收入 | 574.7 | 570.9 | +0.7% | | 毛利 | 106.3 | 98.2 | +8.3% | | 亏损 | (20.3) | (7.3) | +176.0% | | 经调整利润 | 9.4 | 5.4 | +72.8% | [Consolidated Financial Statements](index=2&type=section&id=%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8) [Unaudited Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=%E6%9C%AA%E7%B6%93%E5%AF%A9%E8%A8%88%E7%B6%9C%E5%90%88%E6%90%8D%E7%9B%8A%E5%8F%8A%E5%85%B6%E4%BB%96%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) During the reporting period, revenue slightly increased and gross profit improved, but increased selling expenses, general and administrative expenses, and income tax expenses led to a significant expansion of loss for the period, though adjusted profit still grew 截至6月30日止六個月綜合損益及其他全面收益表 (RMB thousand) | 指标 | 2025年 | 2024年 | | :--- | :--- | :--- | | 收入 | 574,731 | 570,945 | | 主营业务成本 | (468,385) | (472,705) | | 毛利 | 106,346 | 98,240 | | 其他收入净额 | 1,439 | 828 | | 销售费用 | (6,420) | (5,725) | | 一般及行政开支 | (100,324) | (81,649) | | 应收账款及应收票据的减值亏损 | (602) | 301 | | 经营利润 | 439 | 11,995 | | 财务成本 | (10,507) | (11,613) | | 除税前（亏损）/利润 | (10,068) | 382 | | 所得税开支 | (10,194) | (7,722) | | 期内亏损 | (20,262) | (7,340) | | 经调整期内利润 | 9,427 | 5,454 | | 本公司权益股东应占期内亏损 | (27,620) | (11,548) | | 非控股权益 | 7,358 | 4,208 | | 每股基本及摊薄亏损 (RMB) | (0.02) | (0.01) | [Unaudited Consolidated Statement of Financial Position](index=30&type=section&id=%E6%9C%AA%E7%B6%93%E5%AF%A9%E8%A8%88%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) As of June 30, 2025, total assets significantly increased, current assets substantially improved, the current ratio rose from 1.0x to 1.7x, and the debt-to-asset ratio decreased, indicating an improved financial position primarily due to net proceeds from the global offering 截至2025年6月30日綜合財務狀況表 (RMB thousand) | 指标 | 2025年6月30日 | 2024年12月31日 | | :--- | :--- | :--- | | **非流动资产** | | | | 物业、厂房及设备 | 345,388 | 364,021 | | 使用权资产 | 172,213 | 184,887 | | 无形资产 | 230,996 | 236,395 | | 商誉 | 643,049 | 643,049 | | 递延税项资产 | 7,055 | 6,765 | | 其他非流动资产 | 15,517 | 9,977 | | **非流动资产总计** | **1,414,218** | **1,445,094** | | **流动资产** | | | | 存货 | 57,953 | 62,758 | | 应收账款及应收票据 | 234,247 | 262,087 | | 预付款项及其他应收款项 | 108,265 | 120,637 | | 受限制现金 | 12,669 | 18,270 | | 现金及现金等价物 | 835,214 | 294,240 | | **流动资产总计** | **1,248,348** | **757,992** | | **流动负债** | | | | 应付账款及应付票据 | 256,374 | 313,880 | | 其他应付款项 | 120,099 | 115,177 | | 合约负债 | 24,066 | 30,739 | | 计息借款 | 316,598 | 292,090 | | 租赁负债 | 23,429 | 22,908 | | 即期税项 | 8,412 | 6,979 | | **流动负债总计** | **748,978** | **781,773** | | **流动资产/(负债)净额** | **499,370** | **(23,781)** | | **资产总值减流动负债** | **1,913,588** | **1,421,313** | | **非流动负债** | | | | 计息借款 | 108,000 | 65,100 | | 租赁负债 | 127,816 | 137,160 | | 递延税项负债 | 48,029 | 48,987 | | **非流动负债总计** | **283,845** | **251,247** | | **资产净值** | **1,629,743** | **1,170,066** | | **权益总额** | **1,629,743** | **1,170,066** | - Total assets increased from **RMB 2,203.1 million** as of December 31, 2024, to **RMB 2,662.6 million** as of June 30, 2025[71](index=71&type=chunk) - Total liabilities decreased from **RMB 1,033.0 million** as of December 31, 2024, to **RMB 1,032.8 million** as of June 30, 2025[71](index=71&type=chunk) - Debt-to-asset ratio decreased from approximately **46.9%** as of December 31, 2024, to approximately **38.8%** as of June 30, 2025[71](index=71&type=chunk) - Current ratio improved from **1.0x** as of December 31, 2024, to **1.7x** as of June 30, 2025[71](index=71&type=chunk) [Management Discussion and Analysis](index=4&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%A4%E8%A8%8E%E8%AB%96%E5%8F%8A%E5%88%86%E6%9E%90) [Business Overview](index=4&type=section&id=%E4%B8%9A%E5%8A%A1%E6%A6%82%E8%A7%88) Bayzed Health Group is a leading oncology full-cycle medical group in China, operating and managing eight hospitals across five provinces, offering comprehensive services from screening to palliative care - Company positioning: **China's leading oncology full-cycle medical group**[7](index=7&type=chunk) - Service scope: Covers oncology screening, diagnosis, treatment, rehabilitation, palliative care, early cancer screening, oncology vaccination, and health management services[7](index=7&type=chunk) - Operational scale: As of June 30, 2025, operates and manages **eight hospitals** through direct equity and management rights, located in Beijing, Tianjin, Shanxi, Anhui, and Henan provinces[8](index=8&type=chunk) 截至2025年6月30日止六個月主要财务表现 (RMB million) | 指标 | 金额 (RMB million) | 同比变化 (%) | | :--- | :--- | :--- | | 收入 | 574.7 | +0.7% | | 毛利 | 106.3 | +8.3% | | 净亏损 | (20.3) | - | | 经调整净利润 | 9.4 | - | | EBITDA | 43.6 | - | | 经调整EBITDA | 73.3 | - | [Key Operating Metrics](index=5&type=section&id=%E6%A0%B8%E5%BF%83%E8%BF%90%E8%90%A5%E6%8C%87%E6%A0%87) Self-owned hospital revenue remained stable with high oncology-related income; total outpatient and emergency visits were flat, but Grade III/IV surgeries significantly increased, with managed hospitals also showing revenue and Grade III/IV surgery growth 截至2025年6月30日止六個月核心运营指标 | 指标 | 2025年6月30日 | 同比变化 (%) | | :--- | :--- | :--- | | **自有医院** | | | | 医院业务收入 | 约人民币4.49亿元 | - | | 其中肿瘤相关收入 | 约人民币2.09亿元 | - | | 肿瘤相关收入占比 | 约46.4% | - | | 门急诊总量 | 36万人次 | 持平 | | 手术总量 | 6,795例 | - | | 其中三四级手术 | 2,895例 | +16.4% | | 三四级手术占比 | 约42.6% | +6.1% | | **托管医院** | | | | 营业收入 | 约人民币1.93亿元 | - | | 手术总量 | 2,845例 | - | | 其中三四级手术 | 1,946例 | +1.7% | | 三四级手术占比 | 约68.4% | +3.2% | [Industry Recognition and Academic Development](index=5&type=section&id=%E8%A1%8C%E4%B8%9A%E8%AE%A4%E5%8F%AF%E4%B8%8E%E5%AD%A6%E6%9C%AF%E5%BB%BA%E8%AE%BE) The group achieved significant progress in oncology rehabilitation, with Taiyuan Heping Hospital leading the drafting of an internationally certified expert consensus, demonstrating professional strength and industry recognition, while continuously advancing oncology-related discipline construction - Taiyuan Heping Hospital led the drafting of the "Oncology Rehabilitation Expert Consensus (2025)", which was certified by an international practice guideline registration platform and published in the Chinese Journal of Clinical Physicians, enhancing the group's industry recognition in oncology rehabilitation[12](index=12&type=chunk)[14](index=14&type=chunk) - The group continues to implement the "Five Prescriptions" oncology rehabilitation strategy covering exercise, nutrition, medication, psychology, and pain management, and has completed the branding of "Baihui Oncology Rehabilitation Centers" in its hospitals[14](index=14&type=chunk) - Jingxi Oncology Hospital completed DSA room construction and introduced an oncology nutrition team; Tianjin Shishi Hospital added clinical psychology specialty; Hefei Baihui Hospital put a **40-person hyperbaric oxygen chamber group** into use and commissioned an interventional catheterization lab[16](index=16&type=chunk) - Taiyuan Heping Hospital and Hefei Baihui Hospital established **AI rehabilitation centers**, and Taiyuan Heping Hospital registered **5 provincial restricted technologies** and performed functional neurosurgery radiofrequency ablation[16](index=16&type=chunk) - Wuzhi Jimin Hospital successfully registered national restricted technology (tumor ablation technology) and multiple provincial restricted technologies, and was approved for outpatient oncology radiotherapy designation[16](index=16&type=chunk) - Huangshan Shou Kang Hospital passed the **National Electronic Medical Record Level IV review**, empowering discipline development through digitalization[16](index=16&type=chunk) [Talent Team Development](index=7&type=section&id=%E4%BA%BA%E6%89%8D%E9%98%9F%E4%BC%8D%E5%BB%BA%E8%AE%BE) The group continuously strengthens its medical and nursing staff, implements standardized training and a talent development program, and actively recruits high-caliber professionals, with 2,767 medical professionals as of June 30, 2025, 40% of whom are associate chief physicians or chief physicians - As of June 30, 2025, the group and two managed hospitals had **2,767 medical professionals**, including **413 associate chief physicians and chief physicians**, accounting for **40%** of all physicians[17](index=17&type=chunk) - The medical staff team saw **1 promotion to senior title, 11 to associate senior titles, and 42 to intermediate titles**[17](index=17&type=chunk) - Several hospital management cadres and department heads were appointed to important positions in provincial, municipal, and county-level professional committees, enhancing industry recognition[18](index=18&type=chunk) [Service Optimization and Quality Improvement](index=7&type=section&id=%E6%9C%8D%E5%8A%A1%E4%BC%98%E5%8C%96%E5%92%8C%E8%B4%A8%E9%87%8F%E6%8F%90%E5%8D%87) Adhering to a patient-centric philosophy, the group significantly enhanced service capabilities and patient experience through full-process upgrades and a comprehensive quality control system, while strengthening medical safety - Jingxi Oncology Hospital launched "Jingtong-WeChat Pay" medical insurance mobile settlement, optimizing outpatient pharmacy processes and reducing average patient waiting time by **30%**[21](index=21&type=chunk) - Taiyuan Heping Hospital completed systemic renovation of outpatient areas, introduced "cloud film" service, and enabled medical insurance facial recognition payment[21](index=21&type=chunk) - Wuzhi Jimin Hospital launched home care and convenient home medical services, opened nursing clinics, and implemented a cloud imaging system to reduce report waiting times[22](index=22&type=chunk) - Huangshan Shou Kang Hospital fully implemented bedside settlement services, and Tianjin Shishi Hospital completed ward standardization and age-friendly renovations[23](index=23&type=chunk) - The group launched a medical dispute reporting platform, established a **24-hour group-level response mechanism** for major adverse events, and conducts monthly special audits of medical record quality[24](index=24&type=chunk) - Hospitals optimized quality management systems, such as Tianjin Shishi Hospital restructuring its medical quality management committee, Hefei Baihui Hospital strengthening medical record quality control, Huangshan Shou Kang Hospital passing **National Electronic Medical Record Level IV review**, Wuzhi Jimin Hospital reducing high-risk medical insurance behaviors by **50%** year-on-year, and Taiyuan Heping Hospital building a three-tier comprehensive quality control system and completing Level IV electronic medical record construction[25](index=25&type=chunk)[26](index=26&type=chunk) [Digital Management Capabilities](index=10&type=section&id=%E6%95%B0%E5%AD%97%E5%8C%96%E7%AE%A1%E7%90%86%E8%83%BD%E5%8A%9B) The group continuously builds a data middle platform, integrating core data assets across the medical service chain to establish an intelligent management system covering the entire oncology cycle, aiming to enhance operational efficiency and diagnostic quality - The group's data middle platform connects hospitals via China Telecom's SD-WAN dedicated network, breaking data silos and achieving full-domain integration of patient treatment data, operational management data, and supply chain data[27](index=27&type=chunk) - The data middle platform is used for operational monitoring and management, building dynamic operational cost monitoring models, establishing a quality control system, and achieving precise outreach through patient management systems and WeChat Work[28](index=28&type=chunk) [Social Responsibility and Brand Building](index=11&type=section&id=%E7%A4%BE%E4%BC%9A%E8%B4%A3%E4%BB%BB%E5%92%8C%E5%93%81%E7%89%8C%E5%BB%BA%E8%AE%BE) The group continuously enhances brand influence and social recognition by deepening public welfare services, gaining authoritative recognition, and strengthening industry collaboration, fulfilling its supplementary role in private medical care - The group collectively promoted the "National Cancer Prevention and Control Publicity Week" activities, with various hospitals conducting diverse public welfare initiatives[30](index=30&type=chunk) - Wuzhi Jimin Hospital provided assistance to **50 disadvantaged cancer patients**, reducing medical expenses by over **RMB 50,000**, and launched the "Goodwill Towards Hernia" public welfare project, offering free hernia surgeries to **36 low-income families**[30](index=30&type=chunk) - Jingxi Oncology Hospital organized free clinics and conducted in-depth services in **9 major communities**[31](index=31&type=chunk) - Taiyuan Heping Hospital was selected among Ailibi's "**Top 10 Private Rehabilitation Hospitals**" and "**Top 500 Single Hospitals**", and added "Taiyuan Heping Oncology Rehabilitation Hospital" as a secondary name[32](index=32&type=chunk) - Jingxi Oncology Hospital ranked among Ailibi's "**Top 15 Private Oncology Hospitals**" and "**Top 300 Single Hospitals**"[32](index=32&type=chunk) - Huangshan Shou Kang Hospital received the "**2024 Huangshan High-tech Zone Service Industry Contribution Award**" for the seventh time and was again selected among Ailibi's "**Top 100 Private Single Hospitals**"[32](index=32&type=chunk) - Baihui Early Screening Center received the "**2024 Gene Technology Home Testing Pioneer Enterprise Award**"[33](index=33&type=chunk) - Wuzhi Jimin Hospital was awarded "**Advanced Collective for Private Medical Care in Henan Province**", and its director Du Hongwei received the "**Advanced Individual for Private Medical Care in Henan Province**" title[33](index=33&type=chunk) - Hospitals promoted optimized allocation of medical resources and unified industry standards by joining regional alliances and cross-industry collaborations, such as Tianjin Shishi Hospital joining the Tianjin Xiqing Traditional Chinese Medicine Cultural Tourism Convenience Map, and Wuzhi Jimin Hospital being elected as **Vice President Unit of Henan Province Private Medical Care Association**[34](index=34&type=chunk) [Expansion and Organic Growth](index=13&type=section&id=%E6%8B%93%E5%B1%95%E4%B8%8E%E5%A4%96%E5%BB%B6%E5%A2%9E%E9%95%BF) The group expands its service boundaries and strengthens core competitiveness through new facility construction, cross-industry collaborations, and technology introduction, increasing the number of partner institutions to 15 and continuously expanding its service radius - **15 partner institutions** by 2025, continuously expanding service radius[36](index=36&type=chunk) - Taiyuan Heping Hospital signed a strategic cooperation agreement with Shanxi Household Service Association to jointly build a medical caregiver certification system and home rehabilitation standards, exploring a new "medical + living services" integrated model[36](index=36&type=chunk) - Wuzhi Jimin Hospital collaborated with the County Social Work Department to expand grassroots coverage through grid-based services[36](index=36&type=chunk) [Industry Market Opportunities](index=14&type=section&id=%E8%A1%8C%E4%B8%9A%E5%B8%82%E5%9C%BA%E6%9C%BA%E9%81%87) China's oncology service market presents significant commercial opportunities, with continuous growth in new cancer cases and deaths, and the private oncology medical service market is projected for high-speed growth, addressing the imbalanced allocation of oncology medical resources through the group's full-cycle services - From 2018 to 2022, the compound annual growth rate of new cancer cases in China was approximately **2.9%**, and deaths approximately **3.0%**[37](index=37&type=chunk) - As of 2022, new cancer cases in China were approximately **4.8 million**, and deaths approximately **2.9 million**, accounting for **23.8%** and **27.4%** of the global total, respectively[37](index=37&type=chunk) - The market size of private oncology medical services in China (by revenue) increased from **RMB 29.1 billion** in 2018 to **RMB 53.0 billion** in 2022, with a compound annual growth rate of approximately **16.2%**[37](index=37&type=chunk) - This market is expected to grow from **RMB 53.0 billion** in 2022 to **RMB 109.2 billion** in 2026, with a compound annual growth rate of approximately **19.8%**[37](index=37&type=chunk) - China's oncology medical resource allocation is imbalanced, with public hospitals generally "emphasizing treatment, neglecting screening" and "emphasizing treatment, neglecting rehabilitation"; the group's full-cycle services aim to address this issue[38](index=38&type=chunk) [Future Outlook](index=14&type=section&id=%E6%9C%AA%E6%9D%A5%E5%B1%95%E6%9C%9B) Facing an aging population and rising cancer incidence, the group will continue to focus on full-cycle oncology medical services, deepen its service chain, expand early screening, treatment, and rehabilitation businesses, and consolidate its leading position through new hospital acquisitions, managed hospital operations, and informatization - The group will continue to focus on its strategic positioning in full-cycle oncology medical services, enhancing the scale of early cancer screening, treatment, and oncology rehabilitation businesses[39](index=39&type=chunk) - The group will continuously promote brand building for its hospitals, improve comprehensive diagnostic and treatment technical levels, and strengthen standardized and refined management systems[40](index=40&type=chunk) - The group will steadily advance new hospital acquisitions and hospital management businesses aligned with its strategic direction, continuously screening for high-quality hospital targets[40](index=40&type=chunk) - The group will increase investment in oncology full-cycle related disciplines and informatization construction, actively cultivating and developing high-quality self-funded diagnostic and treatment projects[41](index=41&type=chunk) - The group will deepen strategic cooperation with upstream and downstream enterprises in the oncology medical service industry, integrating high-quality medical resources[41](index=41&type=chunk) [Financial Review](index=15&type=section&id=%E8%B2%A1%E5%8B%99%E5%9B%9E%E9%A1%A7) [Revenue Analysis](index=15&type=section&id=%E6%94%B6%E5%85%A5%E5%88%86%E6%9E%90) During the reporting period, the group's total revenue slightly increased by 0.7%, primarily driven by a significant increase in revenue from supplying pharmaceuticals, medical equipment, and consumables, while hospital business revenue remained stable, and hospital management and other revenues decreased - For the six months ended June 30, 2025, the group's revenue was **RMB 574.7 million**, an increase of approximately **0.7%** from **RMB 570.9 million** in the same period of 2024, mainly due to stable business operations[42](index=42&type=chunk) 截至6月30日止六個月收入构成 (RMB thousand) | 收入来源 | 2025年 | 占比 (%) | 2024年 | 占比 (%) | | :--- | :--- | :--- | :--- | :--- | | 医院业务 | 449,439 | 78.2 | 455,310 | 79.7 | | - 住院服务 | 253,497 | 44.1 | 264,354 | 46.3 | | - 门诊服务 | 194,519 | 33.8 | 186,516 | 32.7 | | - 其他 | 1,423 | 0.2 | 4,440 | 0.8 | | 医院管理业务 | 18,254 | 3.2 | 19,144 | 3.4 | | 供应药品、医疗设备及耗材 | 106,717 | 18.6 | 91,605 | 16.0 | | 其他 | 321 | 0.1 | 4,886 | 0.9 | | **总计** | **574,731** | **100.0** | **570,945** | **100.0** | - Hospital management business revenue decreased by approximately **4.7%**, mainly due to discipline adjustments at Huangshan Shou Kang Hospital[44](index=44&type=chunk) - Revenue from supplying pharmaceuticals, medical equipment, and consumables increased by approximately **16.5%**, mainly due to an increase in new customers and transaction volume from existing customers as market share expanded[46](index=46&type=chunk) - Other revenue decreased by approximately **93.4%**, mainly because a large industry forum and academic conference were held in the same period of 2024 but not in 2025[46](index=46&type=chunk) [Cost and Profit Analysis](index=17&type=section&id=%E6%88%90%E6%9C%AC%E4%B8%8E%E5%88%A9%E6%B6%A6%E5%88%86%E6%9E%90) Cost of sales remained stable, while gross profit increased, primarily due to adjustments in hospital discipline construction and a higher proportion of disciplines with higher gross margins, with gross profit margins across business segments remaining stable or improving - Cost of sales decreased by approximately **0.9%** from **RMB 472.7 million** in the same period of 2024 to **RMB 468.4 million** in the same period of 2025[47](index=47&type=chunk) - Gross profit increased from **RMB 98.2 million** in the same period of 2024 to **RMB 106.3 million** in the same period of 2025, mainly due to adjustments in hospital discipline construction and a higher proportion of disciplines with higher gross margins[48](index=48&type=chunk) 截至6月30日止六個月毛利及毛利率 (RMB thousand) | 业务板块 | 2025年毛利 | 2025年毛利率 (%) | 2024年毛利 | 2024年毛利率 (%) | | :--- | :--- | :--- | :--- | :--- | | 医院业务 | 75,240 | 16.7 | 66,983 | 14.7 | | 医院管理业务 | 13,539 | 74.2 | 14,587 | 76.2 | | 供应药品、医疗设备及耗材 | 17,397 | 16.3 | 15,136 | 16.5 | | 其他 | 170 | 53.1 | 1,534 | 31.4 | | **总计** | **106,346** | **18.5** | **98,240** | **17.2** | - Hospital business gross profit margin increased from **14.7%** to **16.7%**, mainly due to adjustments in discipline construction and a higher proportion of disciplines with higher gross margins[51](index=51&type=chunk) [Expenses and Loss](index=18&type=section&id=%E8%B4%B9%E7%94%A8%E4%B8%8E%E4%BA%8F%E6%8D%9F) Net other income increased due to reduced medical dispute compensation, selling expenses rose due to increased marketing, and general and administrative expenses significantly grew due to increased listing-related service fees, while impairment loss on receivables increased, finance costs decreased, and income tax expenses increased, ultimately leading to an expanded loss for the period - Net other income increased by approximately **73.8%** from **RMB 0.8 million** in the same period of 2024 to **RMB 1.4 million** in the same period of 2025, mainly because medical dispute compensation was accrued in 2024 but not in 2025[53](index=53&type=chunk) - Selling expenses increased by approximately **12.1%** from **RMB 5.7 million** in the same period of 2024 to **RMB 6.4 million** in the same period of 2025, mainly due to increased marketing efforts by hospitals[54](index=54&type=chunk) - General and administrative expenses increased by approximately **22.9%** from **RMB 81.6 million** in the same period of 2024 to **RMB 100.3 million** in the same period of 2025, mainly due to increased service fees after the shares were listed on the Hong Kong Stock Exchange[55](index=55&type=chunk) - Impairment loss on trade and bills receivables turned from a reversal of **RMB 0.3 million** in the same period of 2024 to a loss of **RMB 0.6 million** in the same period of 2025, mainly due to an increase in trade receivables with longer credit periods[56](index=56&type=chunk) - Finance costs decreased from **RMB 11.6 million** in the same period of 2024 to **RMB 10.5 million** in the same period of 2025, mainly due to a decrease in interest expenses arising from leases[57](index=57&type=chunk) - Income tax expense increased from **RMB 7.7 million** in the same period of 2024 to **RMB 10.2 million** in the same period of 2025, mainly due to increased deferred expenses and improved business performance during the reporting period[58](index=58&type=chunk) - Loss for the period expanded from **RMB 7.3 million** in the same period of 2024 to **RMB 20.3 million** in the same period of 2025[59](index=59&type=chunk) [Balance Sheet Item Changes](index=19&type=section&id=%E8%B5%84%E4%BA%A7%E8%B4%9F%E5%80%BA%E8%A1%A8%E9%A1%B9%E7%9B%AE%E5%8F%98%E5%8A%A8) Property, plant and equipment, right-of-use assets, and intangible assets all decreased due to depreciation; inventories and receivables declined due to optimized management and medical insurance settlements; other payables and lease liabilities remained stable - Property, plant and equipment decreased by approximately **5.1%** from **RMB 364.0 million** as of December 31, 2024, to **RMB 345.4 million** as of June 30, 2025, mainly due to depreciation of assets[60](index=60&type=chunk) - Right-of-use assets decreased from **RMB 184.9 million** as of December 31, 2024, to **RMB 172.2 million** as of June 30, 2025, mainly due to depreciation of assets[61](index=61&type=chunk) - Intangible assets decreased from **RMB 236.4 million** as of December 31, 2024, to **RMB 231.0 million** as of June 30, 2025, mainly due to depreciation of assets[62](index=62&type=chunk) - Goodwill carrying amount remained stable at **RMB 643.0 million**[63](index=63&type=chunk) - Inventories decreased by approximately **7.7%** from **RMB 62.8 million** as of December 31, 2024, to **RMB 58.0 million** as of June 30, 2025, mainly due to optimized inventory management by certain hospitals[64](index=64&type=chunk) - Trade and bills receivables decreased by approximately **10.6%** from **RMB 262.1 million** as of December 31, 2024, to **RMB 234.2 million** as of June 30, 2025, mainly due to the completion of 2024 medical insurance settlements by certain hospitals[65](index=65&type=chunk) - Prepayments and other receivables decreased by approximately **10.3%** from **RMB 120.6 million** as of December 31, 2024, to **RMB 108.3 million** as of June 30, 2025, mainly due to a decrease in amounts due from related parties and expenses related to share issuance[66](index=66&type=chunk) - Trade and bills payables decreased by approximately **18.3%** from **RMB 313.9 million** as of December 31, 2024, to **RMB 256.4 million** as of June 30, 2025, mainly due to settlement of purchase payables according to relevant payment terms[67](index=67&type=chunk) - Other payables remained relatively stable at **RMB 120.1 million**, mainly due to an increase in payables related to listing expenses offset by a decrease in year-end bonuses[68](index=68&type=chunk) - Contract liabilities decreased from **RMB 30.7 million** as of December 31, 2024, to **RMB 24.1 million** as of June 30, 2025, mainly due to the delivery of pharmaceuticals and consumables recognized as revenue[69](index=69&type=chunk) - Lease liabilities remained stable at **RMB 151.2 million** due to scheduled repayment of lease liabilities[70](index=70&type=chunk) [Capital Structure and Liquidity](index=22&type=section&id=%E8%B5%84%E6%9C%AC%E7%BB%93%E6%9E%84%E4%B8%8E%E6%B5%81%E5%8A%A8%E8%B5%84%E9%87%91) The group's total assets and cash and cash equivalents significantly increased, primarily due to net proceeds from the global offering, with both the current ratio and debt-to-asset ratio improving, indicating a healthy liquidity position - Total assets increased from **RMB 2,203.1 million** as of December 31, 2024, to **RMB 2,662.6 million** as of June 30, 2025[71](index=71&type=chunk) - Total liabilities decreased from **RMB 1,033.0 million** as of December 31, 2024, to **RMB 1,032.8 million** as of June 30, 2025[71](index=71&type=chunk) - Debt-to-asset ratio decreased from approximately **46.9%** as of December 31, 2024, to approximately **38.8%** as of June 30, 2025[71](index=71&type=chunk) - Current ratio improved from **1.0x** as of December 31, 2024, to **1.7x** as of June 30, 2025[71](index=71&type=chunk) - Cash and cash equivalents increased by approximately **183.9%** from **RMB 294.2 million** as of December 31, 2024, to **RMB 835.2 million** as of June 30, 2025, mainly due to net proceeds from the global offering[72](index=72&type=chunk) [Debt and Contingent Liabilities](index=22&type=section&id=%E5%80%BA%E5%8A%A1%E4%B8%8E%E6%88%96%E7%84%B6%E8%B4%9F%E5%80%BA) The group's debt remained stable, primarily comprising interest-bearing borrowings and lease liabilities, with no other significant contingent liabilities or outstanding debt securities apart from a credit facility guarantee for Huangshan Shou Kang Hospital - As of June 30, 2025, and December 31, 2024, the group's debt remained relatively stable at **RMB 1,032.8 million** and **RMB 1,033.0 million**, respectively[74](index=74&type=chunk) - As of June 30, 2025, the group had no outstanding debt securities, mortgages, charges, debentures, or other issued or agreed-to-be-issued loan capital, bank overdrafts, loans, acceptance liabilities or acceptance credits, or similar indebtedness, lease and finance lease commitments, hire purchase commitments, guarantees, or other significant contingent liabilities, except for guarantees provided by the group to certain banks for credit facilities granted to Huangshan Shou Kang Hospital[75](index=75&type=chunk) - As of June 30, 2025, the group had no material contingent liabilities, guarantees, or material litigation or claims pending or threatening any member of the group[76](index=76&type=chunk) [Capital Expenditure and Foreign Exchange Risk](index=23&type=section&id=%E8%B5%84%E6%9C%AC%E5%BC%80%E6%94%AF%E4%B8%8E%E5%A4%96%E6%B1%87%E9%A3%8E%E9%99%A9) Capital expenditure decreased due to lower demand for new medical equipment purchases, and the group faces exchange rate fluctuation risks between RMB and HKD/USD, but currently does not engage in hedging operations - Capital expenditure decreased by approximately **49.2%** from **RMB 15.4 million** in the same period of 2024 to **RMB 7.8 million** in the same period of 2025, mainly due to lower demand for new medical equipment purchases[77](index=77&type=chunk) - The group faces exchange rate fluctuation risks between RMB and HKD/USD[78](index=78&type=chunk) - As of the date of this announcement, the group has not hedged its foreign currency exchange rate risk but regularly reviews its net foreign currency exposure and may enter into foreign exchange forward contracts when necessary[78](index=78&type=chunk) [Employees and Remuneration](index=24&type=section&id=%E9%9B%87%E5%91%98%E5%8F%8A%E8%96%AA%E9%85%AC) As of June 30, 2025, the group's employee count increased, leading to a rise in total staff costs, with remuneration determined by performance, skills, experience, and market trends, complemented by training and share option schemes to incentivize and retain talent - As of June 30, 2025, the group had **2,105 employees**, an increase from **1,991** as of June 30, 2024[79](index=79&type=chunk) - Total staff costs for the reporting period were **RMB 162.0 million**, an increase of approximately **6.2%** from **RMB 152.6 million** in the same period of 2024, mainly due to an increase in employee numbers[79](index=79&type=chunk) - The group conditionally approved and adopted a post-IPO share option scheme on **August 8, 2023**, to incentivize and retain eligible participants[80](index=80&type=chunk) - As of June 30, 2025, the post-IPO share option scheme limit was **98,130,435 ordinary shares**, but no options have been granted or agreed to be granted[81](index=81&type=chunk) [Material Investments and Use of Proceeds](index=24&type=section&id=%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B5%84%E4%B8%8E%E6%89%80%E5%BE%97%E6%AC%BE%E9%A1%B9%E7%94%A8%E9%80%94) The group had no significant acquisitions, disposals, or investments; the company listed on HKEX on June 23, 2025, with net proceeds of approximately HKD 460.4 million from the global offering to be used for strengthening oncology services, hospital construction, M&A, IT upgrades, and working capital - For the six months ended June 30, 2025, the group had no material acquisitions or disposals of subsidiaries, associates, or joint ventures, nor did it hold any material investments[82](index=82&type=chunk) - The company was listed on the main board of the Hong Kong Stock Exchange on **June 23, 2025**[83](index=83&type=chunk) - Net proceeds from the global offering (after deducting underwriting fees and commissions and estimated expenses) were approximately **HKD 460.4 million**[83](index=83&type=chunk) 截至2025年6月30日全球发售所得款项净额的拟定用途 | 拟定用途 | 拟定用途百分比 (%) | 所得款项净额 (HKD million) | 截至2025年6月30日已动用金额 (HKD million) | 截至2025年6月30日尚未动用金额 (HKD million) | 预期时间表 | | :--- | :--- | :--- | :--- | :--- | :--- | | 持续强化肿瘤全周期医疗服务 | 35.7 | 164.5 | – | 164.5 | 2027年底之前 | | 加强早癌筛查服务能力 | 10.5 | 48.4 | – | 48.4 | 2027年底之前 | | 加强肿瘤治疗服务能力 | 16.3 | 75.2 | – | 75.2 | 2027年底之前 | | 加强康复服务能力 | 2.8 | 12.7 | – | 12.7 | 2027年底之前 | | 建设武陟济民医院肿瘤中心大楼 | 6.1 | 28.1 | – | 28.1 | 2027年底之前 | | 在有适当机会出现时收购医院 | 30.6 | 141.0 | – | 141.0 | 2027年底之前 | | 扩大医院管理业务 | 15.3 | 70.5 | – | 70.5 | 2027年底之前 | | 升级信息技术基础设施及/或系统 | 10.2 | 47.0 | – | 47.0 | 2027年底之前 | | 营运资金及其他一般企业用途 | 8.1 | 37.4 | – | 37.4 | 2027年底之前 | | **总计** | **100.0** | **460.4** | **–** | **460.4** | | - There have been no material changes or delays in the use of net proceeds from the listing date up to June 30, 2025[84](index=84&type=chunk) [Post-Reporting Period Events and Material Changes](index=26&type=section&id=%E6%8A%A5%E5%91%8A%E6%9C%9F%E5%90%8E%E4%BA%8B%E4%BB%B6%E4%B8%8E%E9%87%8D%E5%A4%A7%E5%8F%98%E5%8A%A8) No significant events materially impacting operations and financial performance occurred after the reporting period, and there have been no material changes in business since the prospectus publication - No significant events materially impacting operations and financial performance occurred after **June 30, 2025**[87](index=87&type=chunk) - No material changes in the group's business have occurred since the publication of the prospectus on **June 13, 2025**[88](index=88&type=chunk) [Corporate Governance and Compliance](index=26&type=section&id=%E4%BC%81%E4%B8%9A%E7%AE%A1%E6%B2%BB%E4%B8%8E%E5%90%88%E8%A7%84) [Compliance with Corporate Governance Code](index=26&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 is committed to maintaining and implementing stringent corporate governance, having complied with all applicable provisions of the Corporate Governance Code in Appendix C1 of the Listing Rules since its listing date - The company adopted the Corporate Governance Code in Appendix C1 of the Listing Rules and has complied with all applicable code provisions from the listing date up to **June 30, 2025**[89](index=89&type=chunk) [Compliance with Model Code for Securities Transactions](index=27&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%E9%81%B5%E5%AE%88%E6%83%85%E5%86%B5) The company adopted the Model Code for Securities Transactions by Directors of Listed Issuers in Appendix C3 of the Listing Rules, and all directors confirmed compliance since the listing date - The company adopted the Model Code for Securities Transactions by Directors of Listed Issuers in Appendix C3 of the Listing Rules, and all directors confirmed compliance with the required standards from the listing date up to the date of this announcement[91](index=91&type=chunk) [Interim Dividend](index=27&type=section&id=%E4%B8%AD%E6%9C%9F%E8%82%A1%E6%81%AF) The Board does not recommend the payment of any interim dividend for the six months ended June 30, 2025 - The Board does not recommend the payment of any interim dividend for the six months ended **June 30, 2025** (2024: nil)[92](index=92&type=chunk) [Audit Committee Review](index=27&type=section&id=%E5%AE%A1%E8%AE%A1%E5%A7%94%E5%91%98%E4%BC%9A%E5%AE%A1%E9%98%85) The Audit Committee reviewed the group's interim results for the six months ended June 30, 2025, confirming compliance with accounting standards, rules, and regulations, with timely and appropriate disclosures - The Audit Committee comprises **three independent non-executive directors**, with Mr. Chen Xueliang as Chairman[93](index=93&type=chunk) - The Audit Committee reviewed the group's interim results for the six months ended **June 30, 2025**, and deemed them compliant with relevant accounting standards, rules, and regulations, with timely and appropriate disclosures[93](index=93&type=chunk) - The group's interim results for the six months ended **June 30, 2025**, are unaudited[94](index=94&type=chunk) [Notes to the Consolidated Financial Statements](index=32&type=section&id=%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8%E9%99%84%E8%A8%BB) [General Information](index=32&type=section&id=%E4%B8%80%E8%88%AC%E8%B5%84%E6%96%99) Bayzed Health Group Inc., incorporated on December 9, 2021, primarily engages in hospital and hospital management businesses, generating revenue from six for-profit and two non-profit private hospitals in China, as well as the supply of pharmaceuticals, medical equipment, and consumables - The company was incorporated as an exempted company under the Companies Law of the Cayman Islands on **December 9, 2021**[102](index=102&type=chunk) - The group primarily engages in hospital business and hospital management business, with revenue derived from **six for-profit private hospitals**, **two non-profit private hospitals' management fees**, and the supply of pharmaceuticals, medical equipment, and consumables in China[102](index=102&type=chunk) - This interim consolidated financial information is presented in RMB and was approved for publication by the Board on **August 26, 2025**, and is unaudited[103](index=103&type=chunk) [Summary of Significant Accounting Policies](index=32&type=section&id=%E9%87%8D%E5%A4%A7%E4%BC%9A%E8%AE%A1%E6%94%BF%E7%AD%96%E6%A6%82%E8%A6%81) This interim financial report is prepared in accordance with applicable disclosure provisions of the HKEX Listing Rules and IAS 34, using consistent accounting policies with the 2024 annual financial statements, and has applied amendments to IFRS 21 without significant impact on performance or financial position - This interim financial report is prepared in accordance with the applicable disclosure provisions of the Hong Kong Stock Exchange Listing Rules and International Accounting Standard 34[104](index=104&type=chunk) - The accounting policies adopted are consistent with the 2024 annual financial statements, and amendments to International Accounting Standard 21 have been applied, but they did not have a significant impact on the preparation and presentation of the results and financial position for the current or prior periods[104](index=104&type=chunk)[105](index=105&type=chunk) [Revenue and Segment Reporting](index=33&type=section&id=%E6%94%B6%E5%85%A5%E5%8F%8A%E5%88%86%E9%83%A8%E6%8A%A5%E5%91%8A) Group revenue primarily stems from hospital business, hospital management services, supply of pharmaceuticals, medical equipment and consumables, and other businesses, all arising from customer contracts within China, thus no operating segment or geographical information analysis is presented - The group primarily engages in hospital business, hospital management services, supply of pharmaceuticals, medical equipment and consumables, and other businesses[107](index=107&type=chunk) 截至6月30日止六個月收入分类 (RMB thousand) | 收入分类 | 2025年 | 2024年 | | :--- | :--- | :--- | | 于某一时间段：住院服务 | 253,497 | 264,354 | | 于某一时间段：医院管理服务 | 18,254 | 19,144 | | 于某一时间点：门诊服务 | 194,519 | 186,516 | | 于某一时间点：供应药品、医疗设备及耗材 | 106,717 | 91,605 | | 于某一时间点：其他业务 | 1,744 | 9,326 | | **来自客户的合约收入** | **574,731** | **570,945** | - All group revenue arises from customer contracts within the scope of IFRS 15[108](index=108&type=chunk) - All group revenue is generated in China, and its non-current assets are primarily located in China, thus no operating segment information or geographical information analysis is presented[110](index=110&type=chunk) [Net Other Income](index=34&type=section&id=%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5%E5%87%80%E9%A2%9D) Net other income, mainly comprising government grants, finance income, and other items, increased during the reporting period, primarily due to the absence of medical dispute compensation accrued in the same period of 2024 截至6月30日止六個月其他收入净额 (RMB thousand) | 项目 | 2025年 | 2024年 | | :--- | :--- | :--- | | 政府补助 | 347 | 754 | | 出售物业、厂房及设备以及无形资产的收益 | – | 7 | | 财务收入 | 1,314 | 1,535 | | 其他 | (222) | (1,468) | | **总计** | **1,439** | **828** | - Net other income increased by approximately **73.8%**, mainly because medical dispute compensation was accrued in the same period of 2024 but not in 2025[53](index=53&type=chunk) [Loss Before Tax](index=34&type=section&id=%E9%99%A4%E7%A8%8E%E5%89%8D%E4%BA%8F%E6%8D%9F) Loss before tax was primarily influenced by finance costs and staff costs, with finance costs decreasing due to reduced lease interest and staff costs increasing due to employee growth 截至6月30日止六個月财务成本 (RMB thousand) | 项目 | 2025年 | 2024年 | | :--- | :--- | :--- | | 计息借款利息 | 6,793 | 7,471 | | 租赁负债利息 | 3,714 | 4,118 | | 其他 | – | 24 | | **总计** | **10,507** | **11,613** | - Finance costs decreased mainly due to a decrease in interest on lease liabilities[57](index=57&type=chunk) 截至6月30日止六個月员工成本 (RMB thousand) | 项目 | 2025年 | 2024年 | | :--- | :--- | :--- | | 薪金、工资及其他福利 | 151,470 | 139,540 | | 定额供款退休计划供款 | 10,544 | 13,031 | | **总计** | **162,014** | **152,571** | - Total staff costs increased by approximately **6.2%**, mainly due to an increase in employee numbers during the reporting period[79](index=79&type=chunk) [Income Tax](index=35&type=section&id=%E6%89%80%E5%BE%97%E7%A8%8E) Income tax expense increased during the reporting period, primarily due to increased deferred expenses and improved business performance 截至6月30日止六個月所得税 (RMB thousand) | 项目 | 2025年 | 2024年 | | :--- | :--- | :--- | | 即期税项－中国企业所得税 | 11,442 | 10,406 | | 递延税项－暂时差额的产生及拨回 | (1,248) | (2,684) | | **总计** | **10,194** | **7,722** | - Income tax expense increased mainly due to increased deferred expenses and improved business performance during the reporting period[58](index=58&type=chunk) - The statutory income tax rate is **25%** under the China Corporate Income Tax Law[115](index=115&type=chunk) [Loss Per Share](index=35&type=section&id=%E6%AF%8F%E8%82%A1%E4%BA%8F%E6%8D%9F) For the six months ended June 30, 2025, basic and diluted loss per share was RMB 0.02, an increase from the prior year, with no potential dilutive ordinary shares - As of June 30, 2025, basic loss per share was **RMB 0.02** (2024: **RMB 0.01**)[117](index=117&type=chunk) - Basic loss per share is calculated based on the loss attributable to ordinary equity holders of the Company of **RMB 27.6 million** and the weighted average of **1,318,466,823** issued ordinary shares during the reporting period[117](index=117&type=chunk) - As of June 30, 2025, and 2024, the group had no outstanding potential dilutive ordinary shares, thus there was no difference between diluted and basic loss per share[117](index=117&type=chunk) [Trade and Bills Receivables](index=36&type=section&id=%E5%BA%94%E6%94%B6%E8%B4%A6%E6%AC%BE%E5%8F%8A%E5%BA%94%E6%94%B6%E7%A5%A8%E6%8D%AE) Total trade and bills receivables decreased, primarily due to the completion of 2024 medical insurance settlements by certain hospitals and corresponding allocation of medical insurance fund deposits 截至报告期末应收账款及应收票据账龄分析 (RMB thousand) | 账龄 | 2025年6月30日 | 2024年12月31日 | | :--- | :--- | :--- | | 3个月内 | 166,085 | 156,536 | | 3个月以上但6个月内 | 40,889 | 61,977 | | 6个月以上但9个月内 | 6,066 | 4,162 | | 9个月以上但1年内 | 741 | 3,159 | | 1年以上 | 1,190 | 1,796 | | 应收票据 | 19,276 | 34,457 | | **总计** | **234,247** | **262,087** | - Trade and bills receivables decreased by approximately **10.6%**, mainly due to the completion of 2024 medical insurance settlements by certain hospitals and corresponding allocation of medical insurance fund deposits[65](index=65&type=chunk) - The group generally provides a credit period of **30 to 90 days** to its customers[118](index=118&type=chunk) [Prepayments and Other Receivables](index=36&type=section&id=%E9%A2%84%E4%BB%98%E6%AC%BE%E9%A1%B9%E5%8F%8A%E5%85%B6%E4%BB%96%E5%BA%94%E6%94%B6%E6%AC%BE%E9%A1%B9) Total prepayments and other receivables decreased, primarily due to a reduction in amounts due from related parties and expenses related to the issuance of company shares 截至报告期末预付款项及其他应收款项 (RMB thousand) | 项目 | 2025年6月30日 | 2024年12月31日 | | :--- | :--- | :--- | | 存货及服务预付款 | 12,533 | 15,917 | | 预付与建议发行本公司股份有关的成本 | – | 5,324 | | 应收关联方款项 | 82,402 | 86,802 | | 按金 | 5,826 | 6,864 | | 与以股份为基础的付款有关的应收员工款 | 470 | 470 | | 其他 | 7,014 | 5,260 | | **总计** | **108,265** | **120,637** | - Prepayments and other receivables decreased by approximately **10.3%**, mainly due to a decrease in amounts due from related parties and expenses related to the issuance of company shares[66](index=66&type=chunk) [Trade and Bills Payables](index=37&type=section&id=%E5%BA%94%E4%BB%98%E8%B4%A6%E6%AC%BE%E5%8F%8A%E5%BA%94%E4%BB%98%E7%A5%A8%E6%8D%AE) Total trade and bills payables decreased, primarily due to the settlement of purchase payables according to relevant payment terms 截至报告期末应付账款账龄分析 (RMB thousand) | 账龄 | 2025年6月30日 | 2024年12月31日 | | :--- | :--- | :--- | | 3个月内 | 147,684 | 163,593 | | 3个月以上但6个月内 | 63,187 | 74,983 | | 6个月以上但1年内 | 30,222 | 33,401 | | 超过1年 | 8,597 | 20,206 | | 应付票据 | 6,684 | 21,697 | | **总计** | **256,374** | **313,880** | - Trade and bills payables decreased by approximately **18.3%**, mainly due to the settlement of purchase payables according to relevant payment terms[67](index=67&type=chunk) [Other Payables](index=37&type=section&id=%E5%85%B6%E4%BB%96%E5%BA%94%E4%BB%98%E6%AC%BE%E9%A1%B9) Other payables remained relatively stable, primarily due to an increase in payables related to listing expenses being offset by a decrease in year-end bonuses accrued in 2024 and paid in 2025 截至报告期末其他应付款项 (RMB thousand) | 项目 | 2025年6月30日 | 2024年12月31日 | | :--- | :--- | :--- | | 应付薪金及福利 | 58,934 | 63,116 | | 其他应付税项 | 3,244 | 4,567 | | 购买物业、厂房及设备应付款 | 11,037 | 18,331 | | 其他 | 46,884 | 29,163 | | **总计** | **120,099** | **115,177** | - Other payables remained relatively stable, mainly due to an increase in payables related to listing expenses, which was offset by a decrease in year-end bonuses accrued in 2024 and paid in 2025[68](index=68&type=chunk) [Capital, Reserves and Dividends](index=38&type=section&id=%E8%B5%84%E6%9C%AC%E3%80%81%E5%82%A8%E5%A4%87%E5%8F%8A%E8%82%A1%E6%81%AF) During the reporting period, the company's share capital increased due to the issuance of ordinary shares in the initial public offering, and the Board does not recommend the payment of an interim dividend - No interim dividend was paid for the six months ended **June 30, 2025** (2024: nil)[122](index=122&type=chunk) 截至报告期末股本变动 (RMB thousand) | 项目 | 2025年6月30日股份数目 | 2025年6月30日RMB thousand | 2024年12月31日股份数目 | 2024年12月31日RMB thousand | | :--- | :--- | :--- | :--- | :--- | | 于1月1日 | 1,185,361,023 | 78 | 1,185,361,023 | 78 | | 于首次公开招股时发行普通股 | 133,105,800 | 9 | – | – | | **于6月30日/12月31日** | **1,318,466,823** | **87** | **1,185,361,023** | **78** | - For the purpose of listing, **133,105,800 ordinary shares** were issued at **HKD 4.22 per share** in the company's initial public offering on **June 23, 2025**, raising gross proceeds of **HKD 561,706,476** (equivalent to **RMB 513,130,100**)[123](index=123&type=chunk) [Non-IFRS Measures](index=38&type=section&id=%E9%9D%9E%E5%9B%BD%E9%99%85%E8%B4%A2%E5%8A%A1%E6%8A%A5%E5%91%8A%E5%87%86%E5%88%99%E8%AE%A1%E9%87%8F) The group uses adjusted EBITDA and adjusted net loss/profit as non-IFRS measures to supplement financial information, aiding investors in understanding and evaluating operating performance, though these measures may not be directly comparable to other companies - The group uses adjusted EBITDA and adjusted net loss/profit as non-IFRS measures to supplement financial information presented in accordance with IFRS[124](index=124&type=chunk) - These measures help compare operating performance across different years and companies by eliminating the potential impact of certain items[124](index=124&type=chunk) 截至6月30日止期间非国际财务报告准则计量对账 (RMB thousand) | 项目 | 2025年 | 2024年 | | :--- | :--- | :--- | | 期内亏损 | (20,262) | (7,340) | | 加：上市开支 | 29,689 | 12,794 | | **经调整净利润** | **9,427** | **5,454** | | 期内亏损 | (20,262) | (7,340) | | 加：所得税开支 | 10,194 | 7,722 | | 加：物业、厂房及设备折旧 | 25,905 | 24,913 | | 加：无形资产摊销 | 5,905 | 5,355 | | 加：使用权资产折旧 | 12,674 | 13,241 | | 加：财务成本 | 9,193 | 10,078 | | **EBITDA** | **43,609** | **53,969** | | 加：上市开支 | 29,689 | 12,794 | | **经调整EBITDA** | **73,298** | **66,763** |

[Company Information](index=2&type=section&id=Company%20Information) This chapter provides an overview of the company's basic organizational structure, key management members, professional advisors, and registration and operation locations, offering a foundation for understanding corporate governance and operations [Board of Directors](index=3&type=section&id=Board%20of%20Directors) The Board of Directors comprises executive, non-executive, and independent non-executive directors, with Mr. Kong Jian serving as Chairman - Board members include Mr. Kong Jian (Chairman), Ms. Jiang Xianmin, Ms. Zhang Yanping (Executive Directors), Mr. Ma Biao, Mr. Kong Shuangquan (Non-executive Directors), and Ms. Hou Aijun (Chief Independent Non-executive Director), Mr. Liang Weiye, Mr. Liang Yiye (Independent Non-executive Directors)[3](index=3&type=chunk) [Supervisors](index=3&type=section&id=Supervisors) The Board of Supervisors includes Ms. Peng Ling, Ms. Kong Qian, and Mr. Chen Liang - The Board of Supervisors members are Ms. Peng Ling, Ms. Kong Qian, Mr. Chen Liang[3](index=3&type=chunk) [Joint Company Secretaries](index=3&type=section&id=Joint%20Company%20Secretaries) Mr. Liu Siyu and Ms. Yuan Yingxin serve as Joint Company Secretaries - The Joint Company Secretaries are Mr. Liu Siyu, Ms. Yuan Yingxin[3](index=3&type=chunk) [Authorized Representatives](index=3&type=section&id=Authorized%20Representatives) Mr. Kong Jian and Ms. Yuan Yingxin are the Authorized Representatives - The Authorized Representatives are Mr. Kong Jian, Ms. Yuan Yingxin[3](index=3&type=chunk) [Audit Committee](index=3&type=section&id=Audit%20Committee) The Audit Committee is chaired by Ms. Hou Aijun, with Mr. Kong Shuangquan and Mr. Liang Weiye as members - The Audit Committee Chairman is Ms. Hou Aijun, with members Mr. Kong Shuangquan, Mr. Liang Weiye[3](index=3&type=chunk) [Remuneration Committee](index=3&type=section&id=Remuneration%20Committee) The Remuneration Committee is chaired by Mr. Liang Yiye, with Mr. Kong Jian and Mr. Liang Weiye as members - The Remuneration Committee Chairman is Mr. Liang Yiye, with members Mr. Kong Jian, Mr. Liang Weiye[3](index=3&type=chunk) [Nomination Committee](index=3&type=section&id=Nomination%20Committee) The Nomination Committee is chaired by Mr. Kong Jian, with Mr. Liang Yiye and Ms. Hou Aijun as members - The Nomination Committee Chairman is Mr. Kong Jian, with members Mr. Liang Yiye, Ms. Hou Aijun[3](index=3&type=chunk) [Auditor](index=3&type=section&id=Auditor) The company's auditor is Deloitte Touche Tohmatsu - The auditor is Deloitte Touche Tohmatsu[3](index=3&type=chunk) [Legal Advisors](index=3&type=section&id=Legal%20Advisors) The company is advised by Messrs. Chow Chun Hin & Co. on Hong Kong law and Commerce & Finance Law Offices on PRC law - Hong Kong legal advisor is Messrs. Chow Chun Hin & Co., PRC legal advisor is Commerce & Finance Law Offices[3](index=3&type=chunk) [Principal Banks](index=4&type=section&id=Principal%20Banks) The company's principal banks include Agricultural Bank of China Limited Beijing Free Trade Zone Zhangjiawan Design Town Branch and China Construction Bank Corporation (Beijing Desheng Branch) - Principal banks include Agricultural Bank of China and China Construction Bank[4](index=4&type=chunk) [Headquarters and Principal Place of Business in China](index=4&type=section&id=Headquarters%20and%20Principal%20Place%20of%20Business%20in%20China) The company's headquarters and principal place of business in China are located at No. 3 Guangtong Street, Industrial Development Zone, Tongzhou District, Beijing - Headquarters and principal place of business in China are located at No. 3 Guangtong Street, Industrial Development Zone, Tongzhou District, Beijing[4](index=4&type=chunk) [Principal Place of Business in Hong Kong](index=4&type=section&id=Principal%20Place%20of%20Business%20in%20Hong%20Kong) The company's principal place of business in Hong Kong is located at Room 1922, 19/F, Lee Garden One, 33 Hysan Avenue, Causeway Bay, Hong Kong - Principal place of business in Hong Kong is located at Room 1922, 19/F, Lee Garden One, 33 Hysan Avenue, Causeway Bay, Hong Kong[4](index=4&type=chunk) [Registered Office](index=4&type=section&id=Registered%20Office) The company's registered office is located at No. 3 Guangtong Street, Industrial Development Zone, Tongzhou District, Beijing, China - Registered office is located at No. 3 Guangtong Street, Industrial Development Zone, Tongzhou District, Beijing, China[4](index=4&type=chunk) [H Share Registrar](index=4&type=section&id=H%20Share%20Registrar) The H Share Registrar is Tricor Investor Services Limited - The H Share Registrar is Tricor Investor Services Limited[4](index=4&type=chunk) [Stock Code](index=4&type=section&id=Stock%20Code) The company's stock code is 2480 - The stock code is 2480[4](index=4&type=chunk) [Company Website](index=4&type=section&id=Company%20Website) The company's website is www.luzhubiotech.com - The company website is www.luzhubiotech.com[4](index=4&type=chunk) [Listing Date](index=4&type=section&id=Listing%20Date) The company's listing date was May 8, 2023 - The listing date was May 8, 2023[4](index=4&type=chunk) [Financial and Operational Data Summary](index=5&type=section&id=Financial%20and%20Operational%20Data%20Summary) This chapter summarizes the company's operating results and financial position for the six months ended June 30, 2025, showing a significant narrowing of losses but a decrease in net assets compared to the same period in 2024 Operating Results Summary for the Six Months Ended June 30 | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Other income | 4,850 | 9,732 | (50.2) | | Other expenses | (585) | (189) | 209.5 | | Net other gains and losses | 2,405 | 6,255 | (61.6) | | Impairment loss recognized on property, plant and equipment | (5,441) | – | 100.0 | | Administrative expenses | (25,801) | (44,962) | (42.6) | | Research and development expenses | (50,273) | (80,376) | (37.5) | | Finance costs | (2,725) | (398) | 584.7 | | Loss before tax | (77,570) | (109,938) | (29.4) | | Income tax expense | – | – | – | | Loss and total comprehensive expenses for the period | (77,570) | (109,938) | (29.4) | | Basic loss per share (RMB) | (0.39) | (0.54) | (27.8) | | Diluted loss per share (RMB) | (0.39) | (0.54) | (27.8) | Financial Position Summary as of June 30, 2025 | Indicator | As of June 30, 2025 (RMB thousand) | As of December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Non-current assets | 613,642 | 577,587 | | Current assets | 461,433 | 472,876 | | Current liabilities | 97,637 | 98,857 | | Net current assets | 363,796 | 374,019 | | Non-current liabilities | 238,307 | 98,015 | | Net assets | 739,131 | 853,591 | [Company Profile](index=6&type=section&id=Company%20Profile) The company is a biotechnology firm focused on developing innovative human vaccines and therapeutic biologics to prevent and control infectious diseases, and treat cancer and autoimmune diseases - The company is dedicated to developing innovative human vaccines and therapeutic biologics to prevent and control infectious diseases, and treat cancer and autoimmune diseases[7](index=7&type=chunk) - As of June 30, 2025, the product pipeline includes three clinical-stage investigational products (core product LZ901) and six pre-clinical stage investigational products[7](index=7&type=chunk) - As of June 30, 2025, the company holds seven invention patents in seven countries, with two pending applications related to its core product in Europe and the UK[7](index=7&type=chunk) [Management Discussion and Analysis](index=7&type=section&id=Management%20Discussion%20and%20Analysis) This chapter details the company's business development, R&D progress, financial performance, liquidity, and future strategic plans during the reporting period, highlighting LZ901's clinical trial progress and reasons for financial data changes [Business Review](index=7&type=section&id=Business%20Review) The company made significant R&D progress, particularly with core product LZ901's BLA submission in China and Phase I completion in the US, while other pipeline products advanced, emphasizing capabilities in protein engineering, bispecific antibody platforms, and quality assurance [R&D of Investigational Products](index=7&type=section&id=R%26D%20of%20Investigational%20Products) The company has established an innovative precision protein engineering platform, enabling drug development across the entire lifecycle, and possesses an independently developed next-generation bispecific antibody platform, Fabite®, laying the foundation for a diversified product pipeline - Established an innovative precision protein engineering platform, laying the foundation for the development of human vaccines, monoclonal antibodies, and bispecific antibody investigational products[9](index=9&type=chunk) - Independently developed next-generation bispecific antibody platform Fabite®, featuring fully controllable mechanism of action and administration, stable for over three years[9](index=9&type=chunk) - Built a diversified and advanced product pipeline through the Fabite® and mammalian expression technology platforms[10](index=10&type=chunk) [LZ901](index=7&type=section&id=LZ901) LZ901, the world's first recombinant zoster vaccine with a tetrameric molecular structure, has completed Phase III enrollment and BLA submission in China, with commercialization expected in 2026, and completed Phase I clinical site studies in the US, with Phase I completion planned for Q3 2025 - LZ901 is an independently developed recombinant zoster vaccine and core product, the world's first with a tetrameric molecular structure[11](index=11&type=chunk) - Phase III clinical trials initiated in China in September 2023, with enrollment of **26,000** subjects completed in January 2024[12](index=12&type=chunk) - BLA for LZ901 submitted to the NMPA in January 2025, with commercialization in China expected in 2026[12](index=12&type=chunk) - Phase I clinical trial site studies for LZ901 completed in the US in H1 2024, with Phase I completion planned for Q3 2025[13](index=13&type=chunk) [K3](index=8&type=section&id=K3) K3, a recombinant human anti-tumor necrosis factor-α monoclonal antibody injection, is a biosimilar to Humira® that has completed Phase I clinical trials in China, with Phase III trials expected to start as early as H2 2026 - K3 is a recombinant human anti-tumor necrosis factor-α monoclonal antibody injection, a biosimilar to Humira®, used for treating autoimmune diseases[14](index=14&type=chunk) - Phase I clinical trials completed in China in December 2019, with Phase III clinical trials expected to commence as early as H2 2026[14](index=14&type=chunk) [K193](index=8&type=section&id=K193) K193, the world's first CD19/CD3 bispecific antibody with an asymmetric structure, is for treating B-cell leukemia and lymphoma, with Phase I clinical trials initiated in China and expected to complete in 2026 - K193 is the world's first CD19/CD3 bispecific antibody with an asymmetric structure, for treating B-cell leukemia and lymphoma[15](index=15&type=chunk) - Developed based on the Fabite® platform, it exhibits high in vitro and in vivo anti-tumor activity and optimized formulation stability[15](index=15&type=chunk) - Phase I clinical trials initiated in China in December 2019, with completion expected in 2026[15](index=15&type=chunk) [Updates on Other Pre-clinical Stage Investigational Products](index=8&type=section&id=Updates%20on%20Other%20Pre-clinical%20Stage%20Investigational%20Products) As of June 30, 2025, the company has six investigational products in pre-clinical stages, covering recombinant vaccines and bispecific antibodies - As of June 30, 2025, there are six pre-clinical stage investigational products, including recombinant varicella vaccine, recombinant RSV vaccine, recombinant HSV-1 vaccine, recombinant HSV-2 vaccine, K333 bispecific antibody, and K1932 bispecific antibody[16](index=16&type=chunk) Product Pipeline Overview (As of June 30, 2025) | Product Type | Product Pipeline | Indication | Pre-clinical | Phase I | Phase II | Phase III | BLA | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Recombinant Vaccine | LZ901 | Herpes Zoster | China | ✓ | ✓ | ✓ | ✓ | | Recombinant Vaccine | LZ901 | Herpes Zoster | US | ✓ | | | | | Recombinant Vaccine | Recombinant Varicella Vaccine | Varicella | China | | | | | | Recombinant Vaccine | Recombinant RSV Vaccine | RSV-induced Lower Respiratory Tract Disease | China | | | | | | Recombinant Vaccine | Recombinant HSV-1 Vaccine | HSV-1-induced Oral Herpes | China | | | | | | Recombinant Vaccine | Recombinant HSV-2 Vaccine | HSV-2-induced Genital Herpes | China | | | | | | Monoclonal Antibody | K3 | Ankylosing Spondylitis, Rheumatoid Arthritis, Plaque Psoriasis | China | ✓ | | | | | Bispecific Antibody | K193 | Relapsed/Refractory B-cell Lymphoma/Leukemia | China | ✓ | | | | | Bispecific Antibody | K333 | Myeloid Leukemia | China | | | | | | Bispecific Antibody | K1932 | Relapsed/Refractory B-cell Lymphoma | China | | | | | [Research and Development](index=9&type=section&id=Research%20and%20Development) The company's internal R&D team of 18 personnel possesses comprehensive product discovery capabilities from pre-clinical research to manufacturing process development, supporting a diversified product pipeline - The internal R&D team consists of **18** personnel, possessing comprehensive in-house product discovery capabilities[21](index=21&type=chunk) - R&D capabilities cover recombinant protein design and optimization, expansion, culture, and harvesting, supporting a diversified product pipeline[21](index=21&type=chunk) [Manufacturing and Quality Assurance](index=10&type=section&id=Manufacturing%20and%20Quality%20Assurance) The company has R&D and manufacturing facilities in Beijing and Zhuhai, with new facilities under construction in Beijing, and its manufacturing and quality control teams are professionally trained and adhere to GMP standards - Possesses R&D and manufacturing facilities in Beijing and Zhuhai, with new R&D and manufacturing facilities under construction in Beijing, totaling approximately **45,072.87 square meters**[22](index=22&type=chunk) - The manufacturing team comprises **57** personnel, and the quality control team comprises **57** personnel, all professionally trained and adhering to GMP standards[22](index=22&type=chunk) [Future and Outlook](index=10&type=section&id=Future%20and%20Outlook) The company plans to actively advance clinical development of pipeline drugs (especially core product LZ901), rapidly progress other pre-clinical products, formulate domestic and international commercialization strategies, and expand its product pipeline through independent development and collaborations - Actively promote the clinical development of core product LZ901[23](index=23&type=chunk) - Rapidly advance the development of pre-clinical investigational products such as recombinant varicella vaccine, recombinant RSV vaccine, recombinant HSV-1 vaccine, recombinant HSV-2 vaccine, K333, and K1932[23](index=23&type=chunk) - Formulate strategic plans to promote domestic and international commercialization, and expand the product pipeline through independent development and/or collaborations[23](index=23&type=chunk) [Financial Review](index=11&type=section&id=Financial%20Review) For the six months ended June 30, 2025, the company's pre-tax loss decreased by 29.4% year-on-year to RMB 77.6 million, primarily due to significant reductions in administrative and R&D expenses, despite lower other income and net gains, and a substantial increase in finance costs [Other Income](index=12&type=section&id=Other%20Income) Other income decreased by 50.2% year-on-year to RMB 4.9 million, mainly due to a reduction in government grants - Other income decreased by **50.2%** from approximately **RMB 9.7 million** in the same period of 2024 to approximately **RMB 4.9 million** in the same period of 2025[25](index=25&type=chunk) - Primarily due to a reduction in government grants[25](index=25&type=chunk) Components of Other Income | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Sales revenue of VZV vaccine immunogenicity test kits | 1,473 | 650 | | Government grants (property and equipment) | 1,507 | 1,267 | | Government grants (right-of-use assets) | 1,335 | 1,335 | | Government grants (others) | 155 | 4,718 | | Interest income from bank balances and time deposits | 370 | 1,752 | | Interest income from lease deposits | 10 | 10 | | **Total** | **4,850** | **9,732** | [Other Expenses](index=13&type=section&id=Other%20Expenses) Other expenses increased by 209.5% year-on-year to RMB 0.6 million, primarily reflecting increased costs of sold immunoassay kits - Other expenses increased by **209.5%** from approximately **RMB 0.2 million** in the same period of 2024 to approximately **RMB 0.6 million** in the same period of 2025[27](index=27&type=chunk) - Primarily reflecting increased costs of sold immunoassay kits[27](index=27&type=chunk) [Net Other Gains and Losses](index=13&type=section&id=Net%20Other%20Gains%20and%20Losses) Net other gains decreased by 61.6% year-on-year to RMB 2.4 million, mainly due to reduced fair value gains on financial assets at fair value through profit or loss and lower net foreign exchange gains - Net other gains decreased by **61.6%** from approximately **RMB 6.3 million** in the same period of 2024 to approximately **RMB 2.4 million** in the same period of 2025[28](index=28&type=chunk) - Primarily due to reduced fair value gains on financial assets at fair value through profit or loss and lower net foreign exchange gains[28](index=28&type=chunk) Components of Net Other Gains and Losses | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Fair value gains on financial assets at fair value through profit or loss | 3,531 | 5,309 | | Net foreign exchange (losses) gains | (1,126) | 975 | | Loss on early termination of lease | – | (29) | | **Total** | **2,405** | **6,255** | [Administrative Expenses](index=13&type=section&id=Administrative%20Expenses) Administrative expenses decreased by 42.6% year-on-year to RMB 25.8 million, primarily due to the absence of share-based payment amortization expenses in 2025 - Administrative expenses decreased by **42.6%** from approximately **RMB 45.0 million** in the same period of 2024 to approximately **RMB 25.8 million** in the same period of 2025[30](index=30&type=chunk) - Primarily due to the absence of share-based payment amortization expenses in 2025[30](index=30&type=chunk) [Research and Development Expenses](index=13&type=section&id=Research%20and%20Development%20Expenses) R&D expenses decreased by 37.5% year-on-year to RMB 50.3 million, mainly due to reduced expenses from the LZ901 Phase III clinical trial conducted in China - R&D expenses decreased by **37.5%** from approximately **RMB 80.4 million** in the same period of 2024 to approximately **RMB 50.3 million** in the same period of 2025[31](index=31&type=chunk) - Primarily due to reduced expenses from the LZ901 Phase III clinical trial conducted in China[31](index=31&type=chunk) [Finance Costs](index=14&type=section&id=Finance%20Costs) Finance costs significantly increased by 584.7% year-on-year to RMB 2.7 million, primarily due to the company obtaining additional bank loans - Finance costs increased by **584.7%** from approximately **RMB 0.4 million** in the same period of 2024 to approximately **RMB 2.7 million** in the same period of 2025[32](index=32&type=chunk) - Primarily due to the Group obtaining additional bank loans[32](index=32&type=chunk) [Loss Before Tax](index=14&type=section&id=Loss%20Before%20Tax) Loss before tax decreased by 29.4% year-on-year to RMB 77.6 million, primarily influenced by the combined effect of the aforementioned expense changes - Loss before tax decreased by **29.4%** from approximately **RMB 109.9 million** in the same period of 2024 to approximately **RMB 77.6 million** in the same period of 2025[33](index=33&type=chunk) [Income Tax Expense](index=14&type=section&id=Income%20Tax%20Expense) No income tax expense was incurred as the company recorded a loss during the reporting period - No income tax expense was incurred as the Group recorded a loss for the six months ended June 30, 2024 and 2025[34](index=34&type=chunk) [Liquidity and Capital Resources](index=14&type=section&id=Liquidity%20and%20Capital%20Resources) The company experienced a decrease in cash balance and a significant increase in bank borrowings, leading to a higher gearing ratio, while capital expenditures decreased significantly, with no material contingent liabilities or foreign exchange hedging transactions [Bank Balances and Cash](index=14&type=section&id=Bank%20Balances%20and%20Cash) Bank balances and cash decreased by approximately RMB 39.9 million to RMB 100.2 million, primarily due to share repurchases - Bank balances and cash decreased by approximately **RMB 39.9 million** to approximately **RMB 100.2 million** as of June 30, 2025[35](index=35&type=chunk) - Primarily due to the Company's share repurchases during the six months ended June 30, 2025[35](index=35&type=chunk) - Bank borrowings increased to approximately **RMB 207.3 million** (December 31, 2024: approximately RMB 54.9 million), of which approximately **RMB 11.5 million** is repayable within one year[35](index=35&type=chunk) [Pledged Assets](index=14&type=section&id=Pledged%20Assets) As of June 30, 2025, the company's properties, including offices, laboratories, production bases, and construction in progress, have been pledged as collateral for bank borrowings and bank financing - Properties (including offices, laboratories, production bases, and construction in progress) have been pledged as collateral for bank borrowings and bank financing[37](index=37&type=chunk) [Contingent Liabilities](index=15&type=section&id=Contingent%20Liabilities) As of June 30, 2025, the company had no material contingent liabilities - As of June 30, 2025, the Group had no material contingent liabilities[38](index=38&type=chunk) [Gearing Ratio](index=15&type=section&id=Gearing%20Ratio) As of June 30, 2025, the gearing ratio was 31.2%, an increase from 18.7% as of December 31, 2024 - As of June 30, 2025, the gearing ratio was **31.2%** (December 31, 2024: **18.7%**)[39](index=39&type=chunk) [Capital Commitments](index=15&type=section&id=Capital%20Commitments) Capital commitments decreased from approximately RMB 38.3 million as of December 31, 2024, to approximately RMB 7.4 million as of June 30, 2025, primarily due to the completion of certain construction projects - Capital commitments decreased from approximately **RMB 38.3 million** as of December 31, 2024, to approximately **RMB 7.4 million** as of June 30, 2025[40](index=40&type=chunk) - Primarily due to the completion of certain construction projects during the six months ended June 30, 2025[40](index=40&type=chunk) [Foreign Exchange](index=15&type=section&id=Foreign%20Exchange) The company primarily operates in China, facing foreign exchange fluctuation risks between RMB and other currencies (mainly HKD), but has not entered into any currency hedging transactions - The Group primarily operates in the PRC and is exposed to foreign exchange risk arising from various currencies (mainly related to HKD)[41](index=41&type=chunk) - The Group did not enter into any currency hedging transactions during the six months ended June 30, 2025[41](index=41&type=chunk) [Material Investments, Acquisitions and Disposals](index=15&type=section&id=Material%20Investments%2C%20Acquisitions%20and%20Disposals) For the six months ended June 30, 2025, the company had no material investments, acquisitions, or disposals of subsidiaries, associates, and joint ventures - For the six months ended June 30, 2025, the Group had no material investments, acquisitions, or disposals of subsidiaries, associates, and joint ventures[42](index=42&type=chunk) [Future Plans for Material Investments or Capital Assets](index=15&type=section&id=Future%20Plans%20for%20Material%20Investments%20or%20Capital%20Assets) As of June 30, 2025, the company had no specific plans for material capital expenditures, investments, or capital assets, and any future plans will be announced in accordance with the Listing Rules - As of June 30, 2025, the Group had no specific plans for material capital expenditures, investments, or capital assets[43](index=43&type=chunk) [Interim Dividend](index=16&type=section&id=Interim%20Dividend) The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025 - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025[44](index=44&type=chunk) [Use of Net Proceeds from Global Offering](index=16&type=section&id=Use%20of%20Net%20Proceeds%20from%20Global%20Offering) The net proceeds from the company's H-share global offering, approximately HKD 241.6 million, are primarily allocated for clinical development, manufacturing, and commercialization of core product LZ901, clinical development of K3, and construction of Zhuhai Phase II commercial production facilities, expected to be fully utilized by the end of 2027 - The total net proceeds from the global offering were approximately **HKD 241.6 million**[45](index=45&type=chunk) - The net proceeds are expected to be fully utilized by the end of 2027[47](index=47&type=chunk) Use of Net Proceeds from Global Offering (As of June 30, 2025) | Use of Proceeds | Allocation of Net Proceeds from Global Offering (HKD million) | Percentage of Total Net Proceeds (%) | Unutilized Amount as of June 30, 2025 (HKD million) | Expected Timeline for Full Utilization of Remaining Net Proceeds from Global Offering | | :--- | :--- | :--- | :--- | :--- | | For clinical development, manufacturing, and commercialization of core product LZ901 | 140.7 | 58.2 | 46.0 | By end of 2026 | | For clinical development and manufacturing of K3 | 53.4 | 22.1 | 53.4 | By end of 2027 | | For construction of Zhuhai Phase II commercial production facilities | 38.8 | 16.1 | 0.1 | By end of 2026 | | For working capital and other general corporate purposes | 8.7 | 3.6 | 5.5 | By end of 2026 | | **Total** | **241.6** | **100.0** | **105.0** | | [Employees and Remuneration Policy](index=17&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the company employed 197 full-time employees, with 67.5% engaged in R&D, and maintains an evaluation system, competitive remuneration, training, and social insurance and housing provident fund contributions for PRC employees - As of June 30, 2025, the Group employed **197** full-time employees[48](index=48&type=chunk) Number of Employees by Function (As of June 30, 2025) | Function | Number of Employees | Percentage (%) | | :--- | :--- | :--- | | Management and General Administration (including Finance Department) | 37 | 18.8 | | Research and Development (including Manufacturing Department and Quality Control Department) | 133 | 67.5 | | Medical Affairs and Clinical Operations | 9 | 4.6 | | Engineering | 18 | 9.1 | | **Total** | **197** | **100.0** | - The company has an evaluation system, provides competitive salaries and bonuses, and emphasizes employee training[48](index=48&type=chunk) [Financing and Treasury Policy](index=17&type=section&id=Financing%20and%20Treasury%20Policy) The company adopts a sound and conservative financing and treasury policy aimed at maintaining optimal financial health, the most economical financing costs, and minimal financial risk, with regular reviews of funding needs - Adopts a sound and conservative financing and treasury policy aimed at maintaining optimal financial health, the most economical financing costs, and minimal financial risk[49](index=49&type=chunk) - Cash and cash equivalents are typically deposited with financial institutions with low credit risk, and funding needs are regularly reviewed[49](index=49&type=chunk) [Other Information](index=15&type=section&id=Other%20Information) This chapter covers various non-financial information for the reporting period, including equity disclosures for directors and major shareholders, employee incentive schemes, corporate governance compliance, securities transactions, litigation, share repurchases, and changes in board members [Interests and Short Positions of Directors, Supervisors and Chief Executive in Shares, Underlying Shares or Debentures](index=18&type=section&id=Interests%20and%20Short%20Positions%20of%20Directors%2C%20Supervisors%20and%20Chief%20Executive%20in%20Shares%2C%20Underlying%20Shares%20or%20Debentures) As of June 30, 2025, the company's directors, supervisors, and chief executive held long positions in the company's shares and underlying shares, with Mr. Kong Jian and Ms. Zhang Yanping holding a significant proportion as controlling shareholders [Interests in Shares and Underlying Shares](index=18&type=section&id=Interests%20in%20Shares%20and%20Underlying%20Shares) Discloses beneficial interests, spousal interests, and controlled corporation interests of directors and supervisors in the company's H-shares, with Mr. Kong Jian and Ms. Zhang Yanping collectively holding a significant proportion of the company's total issued share capital Interests of Directors/Supervisors in H-shares (As of June 30, 2025) | Name of Director/Supervisor | Nature of Interest | Number of H-shares | Approximate Percentage of Total Issued Share Capital (H-shares) of the Company | | :--- | :--- | :--- | :--- | | Mr. Kong | Beneficial Interest | 58,294,513 | 28.79% | | Mr. Kong | Spouse's Interest | 20,200,000 | 9.98% | | Mr. Kong | Interest in Controlled Corporation | 15,526,700 | 7.67% | | Ms. Zhang | Beneficial Interest | 20,200,000 | 9.98% | | Ms. Zhang | Spouse's Interest | 73,821,213 | 36.46% | | Ms. Jiang | Beneficial Interest | 4,000,000 | 1.98% | | Mr. Ma Biao | Interest in Controlled Corporation | 51,721,196 | 25.55% | | Ms. Peng Ling | Interest in Controlled Corporation | 12,307,500 | 6.08% | | Ms. Kong Qian | Beneficial Interest | 550,000 | 0.27% | | Mr. Chen Liang | Beneficial Interest | 400 | 0.0002% | - Mr. Kong and Ms. Zhang are spouses and are deemed to be interested in each other's shares under the SFO[50](index=50&type=chunk) [Interests in Associated Corporations](index=19&type=section&id=Interests%20in%20Associated%20Corporations) As of June 30, 2025, no director, supervisor, or chief executive held any interests or short positions in the shares, underlying shares, or debentures of any associated corporation of the company - As of June 30, 2025, no director, supervisor, or chief executive of the Company held any interests or short positions in the shares, underlying shares, or debentures of any associated corporation of the Company[51](index=51&type=chunk) [Interests and Short Positions of Substantial Shareholders in Shares and Underlying Shares](index=20&type=section&id=Interests%20and%20Short%20Positions%20of%20Substantial%20Shareholders%20in%20Shares%20and%20Underlying%20Shares) Discloses interests and short positions of substantial shareholders, other than directors, supervisors, and the chief executive, in the company's shares and underlying shares, including Hengqin Luzhu Limited Partnership, Beijing E-Town, Yitang Saiying, Beijing Saisheng, and CCB International Capital Management (Tianjin) Co., Ltd Interests of Substantial Shareholders in H-shares (As of June 30, 2025) | Name of Shareholder | Nature of Interest | Number of H-shares | Approximate Percentage of Total Issued Share Capital (H-shares) of the Company | | :--- | :--- | :--- | :--- | | Hengqin Luzhu Limited Partnership | Beneficial Interest | 12,307,500 | 6.08% | | Beijing Luzhu Kangrui | Interest in Controlled Corporation | 12,307,500 | 6.08% | | Beijing E-Town | Beneficial Interest | 19,645,000 | 9.70% | | Beijing E-Town Phase II | Beneficial Interest | 18,324,696 | 9.05% | | Yitang Saiying | Interest in Controlled Corporation | 37,969,696 | 18.76% | | Saiding Fangde | Interest in Controlled Corporation | 37,969,696 | 18.76% | | Saideruibo | Interest in Controlled Corporation | 37,969,696 | 18.76% | | Mr. Ma Jianan | Interest in Controlled Corporation | 37,969,696 | 18.76% | | Beijing Saisheng | Beneficial Interest | 13,751,500 | 6.79% | | CCB International Capital Management (Tianjin) Co., Ltd. | Beneficial Interest | 11,367,675 | 5.62% | | CCB International (China) Co., Ltd. | Interest in Controlled Corporation | 11,367,675 | 5.62% | | CCB International (Holdings) Limited | Interest in Controlled Corporation | 11,367,675 | 5.62% | | CCB Financial Holdings Limited | Interest in Controlled Corporation | 11,367,675 | 5.62% | | CCB International Group Holdings Limited | Interest in Controlled Corporation | 11,367,675 | 5.62% | | China Construction Bank | Interest in Controlled Corporation | 11,367,675 | 5.62% | | Central Huijin Investment Ltd. | Interest in Controlled Corporation | 11,367,675 | 5.62% | | Herui Venture Capital Fund Management (Shenzhen) Co., Ltd. | Interest in Controlled Corporation | 10,000,744 | 4.94% | | Mr. Chen Ruolin | Interest in Controlled Corporation | 10,000,744 | 4.94% | | Mr. Wang Zhixian | Interest in Controlled Corporation | 10,000,744 | 4.94% | [Employee Incentive Schemes](index=22&type=section&id=Employee%20Incentive%20Schemes) The company has an employee incentive scheme adopted prior to listing, granting interests through Hengqin Luzhu Limited Partnership, and the 2025 Share Award Scheme became effective in June 2025 to incentivize and retain talent, though no awards have been granted as of the reporting period end [Pre-IPO Employee Incentive Scheme](index=22&type=section&id=Pre-IPO%20Employee%20Incentive%20Scheme) The company adopted an employee incentive scheme on December 15, 2021, granting interests through Hengqin Luzhu Limited Partnership to eligible participants, with all interests granted prior to listing - The employee incentive scheme was adopted on December 15, 2021, prior to listing, and does not involve the grant of new shares or options to subscribe for new shares[57](index=57&type=chunk) - Eligible participants were granted interests in Hengqin Luzhu Limited Partnership, the Group's employee incentive platform, with all interests granted prior to listing[57](index=57&type=chunk) [2025 Share Award Scheme](index=22&type=section&id=2025%20Share%20Award%20Scheme) The 2025 Share Award Scheme became effective on June 13, 2025, aiming to provide ownership interests to selected participants and incentivize their contributions, but no awards were granted during the six months ended June 30, 2025, with 19,922,983 H-shares remaining available for grant - The 2025 Share Award Scheme became effective on June 13, 2025, aiming to incentivize selected participants and attract and retain outstanding employees[58](index=58&type=chunk) - No awards were granted under the 2025 Share Award Scheme during the six months ended June 30, 2025[58](index=58&type=chunk) - As of June 30, 2025, the number of shares available for grant under the 2025 Share Award Scheme remained **19,922,983 H-shares**[58](index=58&type=chunk) [Compliance with Corporate Governance Code](index=23&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) The company is committed to maintaining high standards of corporate governance and has adopted the Corporate Governance Code; although the roles of Chairman and General Manager are combined by Mr. Kong Jian, deviating from the code, the Board believes this structure does not affect the balance of power and will continue to review its effectiveness - The Company has adopted the Corporate Governance Code as its own corporate governance code and is committed to maintaining high standards of corporate governance[59](index=59&type=chunk) - Mr. Kong Jian holds both the positions of Chairman of the Board and General Manager, which deviates from code provision C.2.1, but the Board believes this structure does not affect the balance of power and responsibilities[59](index=59&type=chunk) - The Board will continue to review the effectiveness of the Group's corporate governance structure from time to time[59](index=59&type=chunk) [Compliance with Model Code for Securities Transactions](index=23&type=section&id=Compliance%20with%20Model%20Code%20for%20Securities%20Transactions) The company has adopted the Model Code set out in Appendix C3 of the Listing Rules and confirms that all directors and supervisors have complied with it as of June 30, 2025 - The Company has adopted the Model Code set out in Appendix C3 of the Listing Rules to regulate all dealings in the Company's securities by directors, supervisors, and relevant employees[61](index=61&type=chunk) - All directors and supervisors have confirmed their compliance with the applicable standards set out in the Model Code up to June 30, 2025[61](index=61&type=chunk) [Material Litigation and Arbitration](index=23&type=section&id=Material%20Litigation%20and%20Arbitration) For the six months ended June 30, 2025, the company had no material litigation or arbitration - For the six months ended June 30, 2025, the Group had no material litigation or arbitration[62](index=62&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=24&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) The company repurchased 1,759,200 H-shares for approximately HKD 39.7 million during the reporting period, holding them as treasury shares potentially for the 2025 Share Award Scheme, with further repurchases occurring after the reporting period - During the reporting period, the Company repurchased a total of **1,759,200 H-shares** for a total consideration of approximately **HKD 39.7 million** (approximately **RMB 36.9 million**)[64](index=64&type=chunk) - As of June 30, 2025, the Company held a total of **3,219,200 treasury H-shares**, which may be used to fund the 2025 Share Award Scheme[64](index=64&type=chunk) - After June 30, 2025, and up to the latest practicable date, the Company further repurchased a total of **316,600 H-shares** in July 2025 for a total consideration of approximately **HKD 6.8 million**[64](index=64&type=chunk) [Audit Committee and Review of Financial Report](index=24&type=section&id=Audit%20Committee%20and%20Review%20of%20Financial%20Report) The Audit Committee, comprising three members with Ms. Hou Aijun as Chair, oversees financial reporting, internal controls, and risk management, and has reviewed the unaudited interim consolidated results for the six months ended June 30, 2025, confirming compliance with accounting principles and disclosure requirements - The Audit Committee comprises three members, with Ms. Hou Aijun as Chairman, and Mr. Liang Weiye possessing appropriate accounting or relevant financial management expertise[66](index=66&type=chunk) - The Audit Committee has reviewed the Company's unaudited interim consolidated results for the six months ended June 30, 2025, and confirmed compliance with applicable accounting principles, standards, and requirements[66](index=66&type=chunk) - The interim results are unaudited but have been reviewed by the independent auditor, Deloitte Touche Tohmatsu, in accordance with Hong Kong Standard on Review Engagements 2410[66](index=66&type=chunk) [Changes in Information of Directors and Supervisors](index=25&type=section&id=Changes%20in%20Information%20of%20Directors%20and%20Supervisors) At the Annual General Meeting on June 12, 2025, shareholders approved the election and re-election of members for the Fifth Session of the Board of Directors and Board of Supervisors, with Ms. Hou Aijun designated as the Chief Independent Non-executive Director - Shareholders approved the election and re-election of directors for the Fifth Session of the Board of Directors and supervisors for the Board of Supervisors[67](index=67&type=chunk) - The Fifth Session of the Board of Directors includes Executive Directors Mr. Kong, Ms. Zhang, and Ms. Peng Ling; Non-executive Directors Mr. Ma Biao and Mr. Kong Shuangquan; and Independent Non-executive Directors Ms. Hou Aijun, Mr. Liang Weiye, and Mr. Liang Yiye[67](index=67&type=chunk) - Ms. Hou Aijun was also designated as the Chief Independent Non-executive Director, effective from June 27, 2025[68](index=68&type=chunk) [Rights of Directors and Supervisors to Purchase Shares or Debentures](index=25&type=section&id=Rights%20of%20Directors%20and%20Supervisors%20to%20Purchase%20Shares%20or%20Debentures) During or at the end of the six months ended June 30, 2025, neither the company nor any of its subsidiaries entered into any arrangements enabling directors or supervisors to benefit from purchasing shares or debentures of the company or any other body corporate, and no such rights were granted to or exercised by any director, supervisor, their spouse, or children under 18 - During or at the end of the six months ended June 30, 2025, no arrangements were entered into enabling directors or supervisors to benefit from purchasing shares or debentures of the Company or any other body corporate[69](index=69&type=chunk) [Events After Reporting Period](index=25&type=section&id=Events%20After%20Reporting%20Period) Other than those disclosed in this report, no material events affecting the company occurred after June 30, 2025, up to the date of this report - Other than those disclosed in this report, no material events affecting the Group occurred after June 30, 2025, up to the date of this report[70](index=70&type=chunk) [Review Report on Condensed Consolidated Financial Statements](index=25&type=section&id=Review%20Report%20on%20Condensed%20Consolidated%20Financial%20Statements) Deloitte Touche Tohmatsu reviewed the company's condensed consolidated financial statements for the six months ended June 30, 2025, concluding that they found no matters indicating the financial statements were not prepared in all material respects in accordance with International Accounting Standard 34 - Deloitte Touche Tohmatsu has reviewed the Company's condensed consolidated financial statements, conducted in accordance with Hong Kong Standard on Review Engagements 2410[71](index=71&type=chunk)[72](index=72&type=chunk) - The review concluded that nothing has come to our attention that causes us to believe the condensed consolidated financial statements are not prepared, in all material respects, in accordance with International Accounting Standard 34[73](index=73&type=chunk) [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=26&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) This statement presents the company's condensed consolidated profit or loss and other comprehensive income for the six months ended June 30, 2025, showing a total loss and comprehensive expenses of RMB 77,570 thousand, a narrowing from RMB 109,938 thousand in the prior year Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the six months ended June 30) | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Other income | 4,850 | 9,732 | | Other expenses | (585) | (189) | | Net other gains and losses | 2,405 | 6,255 | | Impairment loss recognized on property, plant and equipment | (5,441) | – | | Administrative expenses | (25,801) | (44,962) | | Research and development expenses | (50,273) | (80,376) | | Finance costs | (2,725) | (398) | | Loss before tax | (77,570) | (109,938) | | Income tax expense | – | – | | Loss and total comprehensive expenses for the period | (77,570) | (109,938) | | Basic loss per share (RMB) | (0.39) | (0.54) | | Diluted loss per share (RMB) | (0.39) | (0.54) | [Condensed Consolidated Statement of Financial Position](index=27&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) This statement presents the company's condensed consolidated financial position as of June 30, 2025, showing total assets of RMB 1,075,075 thousand and net assets of RMB 739,131 thousand, a decrease from December 31, 2024 Condensed Consolidated Statement of Financial Position (As of June 30, 2025) | Indicator | As of June 30, 2025 (RMB thousand) | As of December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | **Non-current assets** | | | | Right-of-use assets | 97,135 | 99,504 | | Property, plant and equipment | 502,813 | 457,588 | | Intangible assets | 8,615 | 8,329 | | Prepayments, deposits and other receivables | 3,074 | 12,166 | | Investment in an associate | 1,000 | – | | Time deposits | 1,005 | – | | **Total non-current assets** | **613,642** | **577,587** | | **Current assets** | | | | Materials | 4,398 | 5,735 | | Prepayments, deposits and other receivables | 15,640 | 13,461 | | Financial assets at fair value through profit or loss | 342,176 | 313,554 | | Cash and cash equivalents | 99,219 | 140,126 | | **Total current assets** | **461,433** | **472,876** | | **Current liabilities** | | | | Prepayments received and other payables | 86,168 | 97,037 | | Bank borrowings | 11,469 | 1,820 | | **Total current liabilities** | **97,637** | **98,857** | | **Net current assets** | **363,796** | **374,019** | | **Total assets less current liabilities** | **977,438** | **951,606** | | **Non-current liabilities** | | | | Lease liabilities | 12,992 | 12,619 | | Deferred government grants | 29,460 | 32,302 | | Bank borrowings | 195,855 | 53,094 | | **Total non-current liabilities** | **238,307** | **98,015** | | **Net assets** | **739,131** | **853,591** | | **Capital and reserves** | | | | Share capital | 202,450 | 202,450 | | Reserves | 536,681 | 651,141 | | **Total equity** | **739,131** | **853,591** | [Condensed Consolidated Statement of Changes in Equity](index=28&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) This statement presents the company's condensed consolidated changes in equity for the six months ended June 30, 2025, showing a decrease in total equity from RMB 853,591 thousand to RMB 739,131 thousand, primarily due to loss for the period and share repurchases Condensed Consolidated Statement of Changes in Equity (For the six months ended June 30) | Item | Share Capital (RMB thousand) | Share Premium (RMB thousand) | Treasury Shares (RMB thousand) | Share-based Payment Reserve (RMB thousand) | Accumulated Losses (RMB thousand) | Total (RMB thousand) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | As of January 1, 2025 (audited) | 202,450 | 2,621,518 | (32,305) | – | (1,938,072) | 853,591 | | Loss and total comprehensive expenses for the period | – | – | – | – | (77,570) | (77,570) | | Repurchase of shares | – | – | (36,890) | – | – | (36,890) | | As of June 30, 2025 (unaudited) | 202,450 | 2,621,518 | (69,195) | – | (2,015,642) | 739,131 | | As of January 1, 2024 (audited) | 202,450 | 2,448,245 | – | 139,770 | (1,769,837) | 1,020,628 | | Loss and total comprehensive expenses for the period | – | – | – | – | (109,938) | (109,938) | | Equity-settled share-based payments recognized | – | – | – | 33,503 | – | 33,503 | | Vested shares granted | – | 173,273 | – | (173,273) | – | – | | As of June 30, 2024 (unaudited) | 202,450 | 2,621,518 | – | – | (1,879,775) | 944,193 | [Condensed Consolidated Statement of Cash Flows](index=29&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) This statement presents the company's condensed consolidated cash flows for the six months ended June 30, 2025, showing a net decrease in cash and cash equivalents of RMB 39,781 thousand, primarily due to net cash used in operating and investing activities Condensed Consolidated Statement of Cash Flows (For the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Net cash used in operating activities | (75,285) | (44,955) | | Net cash used in investing activities | (77,024) | (35,742) | | Net cash from financing activities | 112,528 | 9,522 | | Net decrease in cash and cash equivalents | (39,781) | (71,175) | | Cash and cash equivalents at beginning of period | 140,126 | 257,891 | | Effect of foreign exchange rate changes | (1,126) | 975 | | Cash and cash equivalents at end of period | 99,219 | 187,691 | [Notes to the Condensed Consolidated Financial Statements](index=30&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) This chapter provides detailed notes to the condensed consolidated financial statements, explaining the basis of preparation, significant accounting policies, components and reasons for changes in various financial data, as well as important information on related party transactions and capital commitments [1. General Information](index=31&type=section&id=1.%20General%20Information) The company is primarily engaged in the research, development, and production of vaccines and therapeutic biologics in China, with RMB as its functional currency - The Group is principally engaged in the research, development, and production of vaccines and therapeutic biologics in the People's Republic of China[81](index=81&type=chunk) - The condensed consolidated financial statements are presented in RMB, which is also the Company's functional currency[81](index=81&type=chunk) [2. Basis of Preparation](index=31&type=section&id=2.%20Basis%20of%20Preparation) The condensed consolidated financial statements are prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" and the applicable disclosure requirements of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited - The condensed consolidated financial statements are prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" and the applicable disclosure requirements of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[82](index=82&type=chunk) [3. Significant Accounting Policies](index=31&type=section&id=3.%20Significant%20Accounting%20Policies) The condensed consolidated financial statements are prepared on a historical cost basis, except for certain financial instruments measured at fair value, with accounting policies consistent with the 2024 annual consolidated financial statements, with minor additions/changes due to the application of amendments to IFRS accounting standards - The condensed consolidated financial statements are prepared on a historical cost basis, except for certain financial instruments measured at fair value[83](index=83&type=chunk) - The accounting policies and methods of computation are the same as those presented in the annual consolidated financial statements for the year ended December 31, 2024, except for additions/changes to accounting policies due to the application of amendments to IFRS accounting standards[83](index=83&type=chunk) - The application of amendments to IFRS accounting standards had no significant impact on the financial position and performance for this interim period and prior periods[84](index=84&type=chunk) [4. Segment Information](index=32&type=section&id=4.%20Segment%20Information) The company has only one operating and reportable segment, and all non-current assets (excluding financial instruments) are located in mainland China, thus no geographical information analysis is presented - The Group has only one operating and reportable segment[85](index=85&type=chunk) - The Group did not record any revenue for the six months ended June 30, 2025[85](index=85&type=chunk) - As of June 30, 2025, all of the Group's non-current assets (excluding financial instruments) are located in mainland China[85](index=85&type=chunk) [5. Other Income](index=32&type=section&id=5.%20Other%20Income) Other income decreased by 50.2% from approximately RMB 9.7 million in the same period of 2024 to approximately RMB 4.9 million in the same period of 2025, primarily due to a reduction in government grants Components of Other Income | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Sales revenue of VZV vaccine immunogenicity test kits | 1,473 | 650 | | Government grants related to property and equipment | 1,507 | 1,267 | | Government grants related to right-of-use assets | 1,335 | 1,335 | | Government grants (others) | 155 | 4,718 | | Interest income from bank balances and time deposits | 370 | 1,752 | | Interest income from lease deposits | 10 | 10 | | **Total** | **4,850** | **9,732** | - The decrease in other income was primarily due to a reduction in government grants[86](index=86&type=chunk) [6. Net Other Gains and Losses](index=33&type=section&id=6.%20Net%20Other%20Gains%20and%20Losses) Net other gains decreased by 61.6% from approximately RMB 6.3 million in the same period of 2024 to approximately RMB 2.4 million in the same period of 2025, primarily due to reduced fair value gains on financial assets at fair value through profit or loss and lower net foreign exchange gains Components of Net Other Gains and Losses | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Fair value gains on financial assets at fair value through profit or loss | 3,531 | 5,309 | | Net foreign exchange (losses) gains | (1,126) | 975 | | Loss on early termination of lease | – | (29) | | **Total** | **2,405** | **6,255** | - The decrease in net other gains was primarily due to reduced fair value gains on financial assets and lower net foreign exchange gains[87](index=87&type=chunk) [7. Finance Costs](index=33&type=section&id=7.%20Finance%20Costs) Finance costs increased significantly by 584.7% from approximately RMB 0.4 million in the same period of 2024 to approximately RMB 2.7 million in the same period of 2025, primarily due to increased interest on bank borrowings Components of Finance Costs | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Interest on bank borrowings | 2,814 | 135 | | Interest on lease liabilities | 373 | 356 | | Total borrowing costs | 3,187 | 491 | | Less: Amount capitalized in construction in progress | (462) | (93) | | **Total** | **2,725** | **398** | - The significant increase in finance costs was primarily due to increased interest on bank borrowings[88](index=88&type=chunk) [8. Income Tax Expense](index=34&type=section&id=8.%20Income%20Tax%20Expense) No income tax expense was incurred as the company generated tax losses during the reporting period; as of June 30, 2025, estimated unused tax losses were approximately RMB 789,760 thousand - No provision for PRC income tax was made as the Company and its PRC subsidiaries generated tax losses during both periods[89](index=89&type=chunk) - As of June 30, 2025, the Group's estimated unused tax losses were approximately **RMB 789,760 thousand**[89](index=89&type=chunk) - Deferred tax assets were recognized for approximately **RMB 16,911 thousand** of these losses, with the remaining approximately **RMB 772,849 thousand** unrecognized[89](index=89&type=chunk) [9. Loss for the Period](index=35&type=section&id=9.%20Loss%20for%20the%20Period) This note details the expenses contributing to the loss for the period, including staff costs, depreciation and amortization, impairment losses on property, plant and equipment, and material and subcontracting costs for R&D activities Loss for the Period is Stated After Charging (For the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Total staff costs | 17,358 | 48,752 | | Depreciation of right-of-use assets | 2,369 | 2,401 | | Depreciation of property, plant and equipment | 11,645 | 10,498 | | Amortization of intangible assets | 123 | 123 | | Less: Capitalized in construction in progress | (429) | (643) | | Total depreciation and amortization | 13,708 | 12,379 | | Impairment loss recognized on property, plant and equipment | 5,441 | – | | Short-term lease expenses | 16 | 32 | | Material costs included in R&D expenses | 3,448 | 3,729 | | Subcontracting costs included in R&D expenses | 28,774 | 51,290 | - Total staff costs decreased from **RMB 48,752 thousand** in 2024 to **RMB 17,358 thousand** in 2025, primarily due to no equity-settled share-based payments in 2025[91](index=91&type=chunk) - Impairment loss on property, plant and equipment of **RMB 5,441 thousand** was recognized[91](index=91&type=chunk) [10. Dividends](index=35&type=section&id=10.%20Dividends) No dividends were paid, declared, or proposed during the interim period - No dividends were paid, declared, or proposed during the interim period[92](index=92&type=chunk) [11. Loss Per Share](index=36&type=section&id=11.%20Loss%20Per%20Share) Basic and diluted loss per share attributable to owners of the company was RMB (0.39), a narrowing from RMB (0.54) in the prior year Loss Per Share Calculation (For the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Loss for the period attributable to owners of the Company | (77,570) | (109,938) | | Weighted average number of ordinary shares for basic and diluted loss per share (thousand shares) | 200,406 | 202,450 | | Basic loss per share (RMB) | (0.39) | (0.54) | | Diluted loss per share (RMB) | (0.39) | (0.54) | [12. Property, Plant and Equipment](index=36&type=section&id=12.%20Property%2C%20Plant%20and%20Equipment) During this interim period, the company's construction in progress in Beijing and Zhuhai increased by RMB 54,164 thousand and RMB 7,924 thousand, respectively, while an impairment loss of RMB 5,441 thousand was recognized due to equipment upgrades and replacements - During this interim period, construction in progress for the Group's R&D and commercial production facilities in Beijing increased by **RMB 54,164 thousand**[94](index=94&type=chunk) - Construction in progress for commercial production facilities in Zhuhai increased by **RMB 7,924 thousand**[94](index=94&type=chunk) - The Group recognized an impairment loss of **RMB 5,441 thousand** on property, plant and equipment during this period, due to the recoverable amount of these assets being lower than their carrying amount as a result of equipment upgrades and replacements[94](index=94&type=chunk) [13. Prepayments, Deposits and Other Receivables](index=37&type=section&id=13.%20Prepayments%2C%20Deposits%20and%20Other%20Receivables) As of June 30, 2025, total prepayments, deposits, and other receivables amounted to RMB 18,714 thousand, a decrease from RMB 25,627 thousand as of December 31, 2024 Components of Prepayments, Deposits and Other Receivables | Item | As of June 30, 2025 (RMB thousand) | As of December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Recoverable VAT | 7,905 | 5,627 | | Prepayments for purchase of property, plant and equipment | 2,659 | 11,815 | | Prepayments to suppliers and service providers | 5,452 | 6,629 | | Lease deposits | 361 | 351 | | Receivables for test kits | 733 | - | | Others | 1,604 | 1,205 | | **Total** | **18,714** | **25,627** | | Non-current | 3,074 | 12,166 | | Current | 15,640 | 13,461 | [14. Investment in an Associate](index=38&type=section&id=14.%20Investment%20in%20an%20Associate) During this period, the company invested RMB 1,000 thousand in Beijing Rumeng Biotechnology Co., Ltd., holding a 34% ownership and able to exercise significant influence, thus accounted for using the equity method - During this period, the Group invested **RMB 1,000,000** in Rumeng[96](index=96&type=chunk) - The Group holds a **34%** ownership interest in this entity and is able to exercise significant influence over it, thus the investment in this entity is accounted for using the equity method[96](index=96&type=chunk) Investment in an Associate (As of June 30, 2025) | Item | As of June 30, 2025 (RMB thousand) | As of December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Cost of investment in an associate | 1,000 | – | [15. Prepayments Received and Other Payables](index=38&type=section&id=15.%20Prepayments%20Received%20and%20Other%20Payables) As of June 30, 2025, total prepayments received and other payables amounted to RMB 86,168 thousand, a decrease from RMB 97,037 thousand as of December 31, 2024 Components of Prepayments Received and Other Payables | Item | As of June 30, 2025 (RMB thousand) | As of December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Payables for acquisition of property, plant and equipment | 51,725 | 48,437 | | Payables for R&D activities | 29,911 | 41,808 | | Payables for intangible assets | 520 | 1,327 | | Accrued salaries and other allowances | 2,400 | 5,091 | | Other taxes payable | 1,270 | 154 | | Others | 342 | 220 | | **Total** | **86,168** | **97,037** | - Payables are primarily denominated in RMB, with some in USD and HKD[97](index=97&type=chunk) [16. Bank Borrowings](index=39&type=section&id=16.%20Bank%20Borrowings) As of June 30, 2025, total bank borrowings significantly increased to RMB 207,324 thousand from RMB 54,914 thousand as of December 31, 2024, primarily for the construction of R&D and commercial production facilities, and are guaranteed by an executive director and their spouse Analysis of Bank Borrowings (As of June 30, 2025) | Item | As of June 30, 2025 (RMB thousand) | As of December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Non-current | 195,855 | 53,094 | | Current | 11,469 | 1,820 | | **Total** | **207,324** | **54,914** | - Obtained bank borrowings of **RMB 200,000,000** for the construction of Beijing R&D and commercial production facilities, of which **RMB 91,730,000** has been drawn down[98](index=98&type=chunk) - Obtained bank loan financing of **RMB 300,000,000** for the Zhuhai R&D construction project, of which **RMB 110,416,000** has been drawn down[99](index=99&type=chunk) - Both long-term borrowings are guaranteed by Mr. Kong Jian, an executive director of the Company, and his spouse, Ms. Zhang Yanping, and are secured by certain leased land, construction in progress, and properties[99](index=99&type=chunk) [17. Deferred Government Grants](index=40&type=section&id=17.%20Deferred%20Government%20Grants) As of June 30, 2025, deferred government grants amounted to RMB 29,460 thousand, a decrease from RMB 32,302 thousand as of December 31, 2024, primarily due to transfers to profit or loss Changes in Deferred Government Grants (For the six months ended June 30) | Item | Property and Equipment (RMB thousand) | Right-of-use Assets (RMB thousand) | R&D Activities (RMB thousand) | Total (RMB thousand) | | :--- | :--- | :--- | :--- | :--- | | As of January 1, 2025 (audited) | 28,298 | 4,004 | – | 32,302 | | Deferred government grants transferred to profit or loss | (1,507) | (1,335) | – | (2,842) | | As of June 30, 2025 (unaudited) | 26,791 | 2,669 | – | 29,460 | | As of January 1, 2024 (audited) | 21,593 | 6,674 | 9,400 | 37,667 | | Deferred government grants transferred to profit or loss | (1,267) | (1,335) | – | (2,602) | | As of June 30, 2024 (unaudited) | 20,326 | 5,339 | 9,400 | 35,065 | - Government grants include compensation for capital expenditures on property and equipment, right-of-use assets, and subsidies for R&D activities[101](index=101&type=chunk) [18. Share Capital/Treasury Shares](index=41&type=section&id=18.%20Share%20Capital%2FTreasury%20Shares) The company's share capital remained unchanged, but treasury shares increased due to repurchases; as of June 30, 2025, the company held 3,219,200 treasury H-shares for a total consideration of RMB 36,890 thousand Share Capital (As of June 30, 2025) | Item | Number of Shares (thousand shares) | Share Capital (RMB thousand) | | :--- | :--- | :--- | | As of January 1, 2024, June 30, 2024, January 1, 2025, and June 30, 2025 | 202,450 | 202,450 | - For the six months ended June 30, 2025, the Company repurchased a total of **1,759,200** of its own ordinary shares through the Stock Exchange, for a total consideration of **RMB 36,890,000**[103](index=103&type=chunk) - As of the end of the reporting period, all repurchased **3,219,200 shares** were held as treasury shares[103](index=103&type=chunk) [19. Share-based Payment Transactions](index=41&type=section&id=19.%20Share-based%20Payment%20Transactions) This note details the company's employee incentive scheme implemented in

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其準確性 或完整性亦不發表任何聲明，並明確表示，概不就因本公告全部或任何部分內容所產生或因依 賴該等內容而引致的任何損失承擔任何責任。 Tuya Inc. 塗鴉智能* （於開曼群島註冊成立以不同投票權控制的有限責任公司） （香港聯交所股份代號：2391） （紐約證券交易所股票代碼：TUYA） 截至2025年6月30日止六個月中期業績公告 全球領先雲平台服務提供商Tuya Inc.（「Tuya」或「本公司」，聯交所代號：2391及 紐交所代號：TUYA）今日公佈本公司、其附屬公司及合併聯屬實體（「本集團」） 截至2025年6月30日止六個月（「報告期」）的未經審計財務業績連同截至2024年6 月30日止六個月之比較數字。 截至2025年6月30日止六個月的財務摘要 * 僅供識別 1 • 總收入為154.8百萬美元，同比增長約14.7%（截至2024年6月30日止六個 月：134.9百萬美元）。 • 平台即服務（「PaaS」）收入為111.9百萬美元，同比增長約12.0%（截至2024 年6月30日止六個月：99.9百萬美元）。 • 軟件即 ...

[Chairman's Statement](index=1&type=section&id=Chairman's%20Statement) [Global Economy and Business Challenges](index=1&type=section&id=Global%20Economy%20and%20Business%20Challenges) In the first half of 2025, the global economy and trade were impacted by US tariff policies and geopolitical changes, posing severe challenges to the global apparel industry and the Group's business - The global economy and trade were significantly affected by aggressive US tariff policies and geopolitical changes, leading to severe and difficult challenges for the global apparel industry, with the Group's business inevitably experiencing deeper impacts[2](index=2&type=chunk) - The Group implemented deeper reforms, actively promoted the "Dali Culture" of adapting to new times and laws, and actively explored new markets to seize growth opportunities in emerging and high-end markets[3](index=3&type=chunk) Key Financial Indicators for H1 2025 | Indicator | Amount (HKD) | | :--- | :--- | | Profit attributable to shareholders | 41.7 million | | Ratio of non-current liabilities to shareholders' equity | 39.3% | | Current ratio | 1.2 | | Basic earnings per share | 0.14 | | Net asset value per share | 10.36 | | Interim dividend | 0.035/share | [Strategic Direction and Future Outlook](index=2&type=section&id=Strategic%20Direction%20and%20Future%20Outlook) The Group focuses on sustainable new products, technological innovation (AI and digital transformation), and stable management of the "Dali International Industrial Park" project, aiming for long-term development with flexible strategies - Dali focuses on the low-carbon economy, circular fashion, and healthy lifestyles, promoting the research and development of high-performance and recyclable new materials, and developing more innovative products in sports fashion and daily wear[5](index=5&type=chunk) - The Group continues to advance AI and digital transformation, with the core objective of enhancing supply chain speed and rapid response capabilities, strengthening quick response, and promoting design and R&D innovation[5](index=5&type=chunk) - The "Dali International Industrial Park" project maintains stable operations, laying a solid foundation for the long-term development of high-tech talent and resources, with the Group pursuing development with a long-term and forward-looking perspective[5](index=5&type=chunk) [Performance](index=3&type=section&id=Performance) [Unaudited Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=3&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) This statement reports the unaudited condensed consolidated profit or loss and other comprehensive income for the six months ended June 30, 2025, showing year-on-year decreases in total revenue, profit for the period, and EPS, but a turnaround from loss to profit in total comprehensive income Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the six months ended June 30) | Indicator | 2025 (HKD thousand) | 2024 (HKD thousand) | YoY Change | | :--- | :--- | :--- | :--- | | Total Revenue | 1,507,792 | 1,643,045 | -8.23% | | Operating Gross Profit | 288,312 | 337,983 | -14.70% | | Profit Before Tax | 44,209 | 67,348 | -34.37% | | Profit for the Period | 42,067 | 53,081 | -20.75% | | Total Comprehensive Income (Expense) for the Period | 74,801 | (30,637) | Turnaround from loss to profit | | Profit Attributable to Shareholders of the Company | 41,747 | 53,305 | -21.68% | | Basic Earnings Per Share | HKD 0.14 | HKD 0.17 | -17.65% | [Unaudited Condensed Consolidated Statement of Financial Position](index=5&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) This statement provides the unaudited condensed consolidated financial position as of June 30, 2025, presenting the period-end balances of total assets, total liabilities, and shareholders' equity, reflecting changes in the company's asset structure and solvency Condensed Consolidated Statement of Financial Position (As of June 30, 2025) | Indicator | June 30, 2025 (HKD thousand) | December 31, 2024 (HKD thousand) | Change | | :--- | :--- | :--- | :--- | | Non-current Assets | 4,121,906 | 4,012,922 | +2.72% | | Current Assets | 2,138,741 | 2,166,125 | -1.26% | | Current Liabilities | 1,839,570 | 1,836,301 | +0.18% | | Net Current Assets | 299,171 | 329,824 | -9.30% | | Net Assets | 3,165,859 | 3,091,058 | +2.42% | | Equity Attributable to Shareholders of the Company | 3,190,866 | 3,116,385 | +2.39% | [Notes to the Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) [Basis of Preparation](index=7&type=section&id=Basis%20of%20Preparation) The condensed consolidated financial statements are prepared in accordance with HKAS 34 "Interim Financial Reporting" issued by the HKICPA and applicable disclosure requirements of Appendix D2 of the HKEX Listing Rules - The condensed consolidated financial statements are prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" issued by the Hong Kong Institute of Certified Public Accountants and the applicable disclosure requirements of Appendix D2 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[12](index=12&type=chunk) [Significant Accounting Policies](index=7&type=section&id=Significant%20Accounting%20Policies) The report is prepared on a historical cost basis, with accounting policies consistent with the prior year's financial report, except for investment properties and some financial instruments measured at fair value, and new/revised standards having no material impact - The condensed consolidated financial statements have been prepared on a historical cost basis, except for investment properties and certain financial instruments which are measured at fair value, and the accounting policies are consistent with those used in the preparation of the Group's annual financial statements for the year ended December 31, 2024[13](index=13&type=chunk) - The application of the revised Hong Kong Financial Reporting Standards has no material impact on the Group's financial position and financial performance for the current period and prior periods and/or the disclosures contained in these condensed consolidated financial statements[14](index=14&type=chunk) [Revenue and Segment Information](index=8&type=section&id=Revenue%20and%20Segment%20Information) This section details the Group's revenue by customer contracts and geographical areas, as well as revenue and results for the two business segments: garment manufacturing and trading, and property investment and development, explaining the calculation of segment profit Total Revenue and Geographical Breakdown (For the six months ended June 30) | Indicator | 2025 (HKD thousand) | 2024 (HKD thousand) | YoY Change | | :--- | :--- | :--- | :--- | | Total Revenue | 1,507,792 | 1,643,045 | -8.23% | | Revenue from China | 848,670 | 955,137 | -11.14% | | Revenue from USA | 233,556 | 213,707 | +9.29% | | Revenue from Europe | 184,066 | 195,125 | -5.77% | | Revenue from Other Regions | 241,500 | 279,076 | -13.46% | Segment Revenue and Results (For the six months ended June 30) | Segment | 2025 Revenue (HKD thousand) | 2024 Revenue (HKD thousand) | 2025 Result (HKD thousand) | 2024 Result (HKD thousand) | | :--- | :--- | :--- | :--- | :--- | | Garment Manufacturing and Trading | 1,477,516 | 1,577,545 | 41,511 | 73,467 | | Property Investment and Development | 30,276 | 65,500 | (843) | 13,772 | - Segment profit refers to the profit earned by each segment but excludes fair value changes of derivative financial instruments and investment properties, certain central administrative expenses, and other expenses, primarily used for resource allocation and performance evaluation[19](index=19&type=chunk) [Other Net Gains and Losses](index=10&type=section&id=Other%20Net%20Gains%20and%20Losses) This section discloses other net gains and losses for the six months ended June 30, 2025, primarily influenced by fair value changes of investment properties and derivative financial instruments, showing a significant year-on-year increase Other Net Gains and Losses (For the six months ended June 30) | Indicator | 2025 (HKD thousand) | 2024 (HKD thousand) | YoY Change | | :--- | :--- | :--- | :--- | | Fair Value Change of Investment Properties | 28,969 | 3,436 | +743.0% | | Fair Value Change of Derivative Financial Instruments | 3,641 | (1,261) | Turnaround from loss to gain | | Net Exchange Gain | 1,749 | 1,028 | +70.1% | | Total | 33,608 | 2,582 | +1209.4% | [Finance Costs](index=10&type=section&id=Finance%20Costs) This section discloses finance costs for the six months ended June 30, 2025, primarily comprising interest on bank loans and overdrafts, with the total amount decreasing year-on-year Finance Costs (For the six months ended June 30) | Indicator | 2025 (HKD thousand) | 2024 (HKD thousand) | YoY Change | | :--- | :--- | :--- | :--- | | Interest on Bank Loans and Overdrafts | 35,752 | 42,242 | -15.36% | | Total Borrowing Costs | 36,304 | 43,168 | -15.90% | | Less: Amount Capitalized for Qualifying Assets | (2,836) | (1,714) | +65.46% | | Total | 33,468 | 41,454 | -19.27% | [Income Tax Expense](index=11&type=section&id=Income%20Tax%20Expense) This section discloses income tax expense for the six months ended June 30, 2025, showing significant decreases in tax expenses for both Hong Kong and Mainland China, leading to a substantial reduction in total tax expense Income Tax Expense (For the six months ended June 30) | Tax Source | 2025 (HKD thousand) | 2024 (HKD thousand) | YoY Change | | :--- | :--- | :--- | :--- | | Hong Kong | 2,006 | 5,566 | -63.90% | | Mainland China | 504 | 12,975 | -96.12% | | Total Current Period Tax Expense | 2,510 | 18,541 | -86.47% | | Total Income Tax Expense | 2,142 | 14,267 | -84.99% | [Profit for the Period](index=11&type=section&id=Profit%20for%20the%20Period) This section explains certain items deducted from or included in the profit for the period, including depreciation, inventory provisions, and interest income, reflecting changes in cost structure and revenue sources Items Deducted From (Included In) Profit for the Period (For the six months ended June 30) | Item | 2025 (HKD thousand) | 2024 (HKD thousand) | YoY Change | | :--- | :--- | :--- | :--- | | Depreciation of Property, Plant and Equipment | 35,033 | 28,528 | +22.80% | | Depreciation of Right-of-Use Assets | 3,019 | 2,832 | +6.60% | | Net Provision for (Reversal of) Inventory | 536 | (10,701) | Turnaround from reversal to provision | | Interest Income | (4,462) | (9,769) | -54.34% | [Earnings Per Share](index=12&type=section&id=Earnings%20Per%20Share) This section provides data for the calculation of basic and diluted earnings per share for the six months ended June 30, 2025, showing a year-on-year decrease in EPS and explaining the assumptions for diluted EPS calculation Earnings Per Share Calculation Data (For the six months ended June 30) | Indicator | 2025 (HKD thousand/shares) | 2024 (HKD thousand/shares) | YoY Change | | :--- | :--- | :--- | :--- | | Profit Attributable to Shareholders of the Company | 41,747 | 53,305 | -21.68% | | Number of Ordinary Shares (thousands) | 305,616 | 305,616 | 0% | | Basic and Diluted Earnings Per Share | HKD 0.14 | HKD 0.17 | -17.65% | - In calculating diluted earnings per share for the six months ended June 30, 2025, and June 30, 2024, the exercise of share options was not assumed as the exercise price of these share options was higher than the average market price of the shares[24](index=24&type=chunk) [Dividends](index=12&type=section&id=Dividends) This section discloses the interim dividend distribution for the six months ended June 30, 2025, which remained consistent with the prior year, and notes that no final dividend was declared - The Board declared an interim dividend of **HKD 0.035 per share** for the six months ended June 30, 2025, which is the same as the dividend for the six months ended June 30, 2024[25](index=25&type=chunk) - No final dividend for the year ended December 31, 2024, was declared or paid during this interim period[25](index=25&type=chunk) [Trade and Other Receivables](index=13&type=section&id=Trade%20and%20Other%20Receivables) This section describes the composition of trade and other receivables and credit period policies, providing an aging analysis as of June 30, 2025, showing that receivables within 90 days constitute the largest portion - Trade and other receivables primarily include receivables from garment sales and property leases, with credit terms granted to garment trading customers mainly ranging from **30 to 90 days**[26](index=26&type=chunk) Aging Analysis of Trade and Other Receivables (As of June 30, 2025) | Aging | June 30, 2025 (HKD thousand) | December 31, 2024 (HKD thousand) | | :--- | :--- | :--- | | Within 90 days | 550,341 | 584,142 | | 91 to 180 days | 34,154 | 33,112 | | 181 to 360 days | 18,491 | 23,746 | | Over 360 days | 18,049 | 6,083 | | Total | 621,035 | 647,083 | [Trade and Other Payables](index=13&type=section&id=Trade%20and%20Other%20Payables) This section provides an aging analysis of trade and other payables as of June 30, 2025, indicating that payables within 90 days represent the largest share, with a significant amount of accrued purchases Aging Analysis of Trade and Other Payables (As of June 30, 2025) | Aging | June 30, 2025 (HKD thousand) | December 31, 2024 (HKD thousand) | | :--- | :--- | :--- | | Within 90 days | 421,903 | 392,707 | | 91 to 180 days | 46,435 | 48,252 | | 181 to 360 days | 13,061 | 4,244 | | Over 360 days | 11,033 | 12,563 | | Accrued Purchases | 191,894 | 218,112 | | Total | 684,326 | 675,878 | [Management Discussion and Analysis](index=14&type=section&id=Management%20Discussion%20and%20Analysis) [Business Review](index=14&type=section&id=Business%20Review) Facing a complex international landscape, the Group deepened digital management, implemented sustainable development strategies, optimized market and customer structures, expanded into new markets, and continuously advanced AI technology to enhance production efficiency and product innovation - The Group adheres to a management philosophy of steady progress and continuous innovation, actively optimizing market and customer structures and exploring emerging market opportunities through deepened digital management and sustainable development strategies[29](index=29&type=chunk) - The Group continuously advances the application of AI technology, significantly enhancing production flexibility and cost control through smart workshops and process automation, while accurately forecasting market trends[29](index=29&type=chunk) - In sustainable development, the Group actively practices green concepts, providing one-stop solutions and enhancing product durability through "Innocell" fabric technology and "Silkology" patented technology[30](index=30&type=chunk) - The Hangzhou "Dali International Industrial Park," despite being affected by the domestic real estate downturn, maintained stable rental income and gradually leveraged its platform value for technological and industrial synergy[30](index=30&type=chunk) [Financial Review](index=15&type=section&id=Financial%20Review) This section summarizes the Group's H1 2025 performance, noting year-on-year decreases in revenue and gross profit, but significant growth in other net gains, increased administrative and selling expenses as a percentage of revenue, reduced finance costs, and a decline in EPS Key Financial Performance (For the six months ended June 30) | Indicator | 2025 (HKD) | 2024 (HKD) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 1.5078 billion | 1.643 billion | -8.23% | | Gross Profit | 288.3 million | 338 million | -14.70% | | Gross Profit Margin | 19.1% | 20.6% | -1.5 percentage points | | Profit for the Period | 42.1 million | 53.1 million | -20.72% | | Other Net Gains | 33.6 million | 2.6 million | +1209.4% | | Basic Earnings Per Share | 0.14 | 0.17 | -17.65% | | Net Asset Value Per Share (2025/06/30) | 10.36 | 10.11 (2024/12/31) | +2.47% | Revenue Breakdown by Region (For the six months ended June 30) | Region | 2025 Revenue (HKD) | 2025 Share | 2024 Revenue (HKD) | 2024 Share | | :--- | :--- | :--- | :--- | :--- | | China | 848.7 million | 56.3% | 955.1 million | 58.1% | | USA and Europe | 417.6 million | 27.7% | 408.8 million | 24.9% | | Other Countries | 241.5 million | 16.0% | 279.1 million | 17.0% | - Finance costs decreased from **HKD 41.5 million** in the first six months of 2024 to **HKD 33.5 million** in the first six months of 2025, primarily due to a reduction in interest on bank loans and overdrafts[32](index=32&type=chunk) [Segment Information](index=16&type=section&id=Segment%20Information) This section provides revenue and segment results by major business and region, detailing operational highlights and strategic directions for garment manufacturing and trading, and property investment and development businesses [Garment Manufacturing and Trading Business](index=16&type=section&id=Garment%20Manufacturing%20and%20Trading%20Business) The garment manufacturing and trading business experienced year-on-year declines in revenue and profit, but the Group continues to optimize operational performance and gain market recognition through sustainable development practices, enhanced process efficiency, and digital transformation Garment Manufacturing and Trading Business Performance (For the six months ended June 30) | Indicator | 2025 (HKD thousand) | 2024 (HKD thousand) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 1,477,516 | 1,577,545 | -6.47% | | Profit | 41,511 | 73,467 | -43.50% | - The Group has systematically integrated sustainable development practices into its comprehensive product development and manufacturing framework, continuously optimizing operational performance through enhanced process efficiency and digital transformation[34](index=34&type=chunk) [Property Investment and Development](index=16&type=section&id=Property%20Investment%20and%20Development) The property investment and development business saw a significant year-on-year decrease in revenue, but the completion of Phase II of the Hangzhou "Dali International Industrial Park" is expected to generate stable rental income and long-term development returns through optimized enterprise portfolios and industrial synergy Property Investment and Development Business Performance (For the six months ended June 30) | Indicator | 2025 (HKD thousand) | 2024 (HKD thousand) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 30,276 | 65,500 | -53.77% | | Profit | (843) | 13,772 | Turnaround from profit to loss | - With the completion of Phase II of the Hangzhou "Dali International Industrial Park," the Group continues to optimize its tenant portfolio, attracting diverse high-quality talent and capital to build an innovative ecosystem that promotes collaborative R&D and technological development[35](index=35&type=chunk) [Environmental, Social and Governance (ESG) Responsibility](index=17&type=section&id=Environmental%2C%20Social%20and%20Governance%20(ESG)%20Responsibility) The Group deeply integrates sustainable development into its core business strategy, actively promotes green transformation, innovative recycling technologies, and high-value-added product R&D, setting six-year sustainability goals, while also focusing on employee development, fair management, and integrity culture - The Group deeply integrates sustainable development concepts into its core business strategy, actively establishing strategic alliances with global fashion brands to jointly promote the industry's green transformation and build a sustainable fashion circular model[36](index=36&type=chunk) - In green product development, the Group implements green sustainable development concepts, with its INNOCELL®T2T series products providing comprehensive fashion circular solutions for the industry and initiating a pilot production line for textile waste recycling[37](index=37&type=chunk) - The Group has set six-year sustainable development goals covering green energy, diversity and inclusion, safe workplace, community integration, and social contribution, with specific action plans formulated[37](index=37&type=chunk) - The Group adheres to its core values of "Achieving Self and Others, Benefiting Self and Others," valuing employee development, fostering a harmonious, inclusive, equal, and respectful work environment, and implementing competitive compensation strategies[37](index=37&type=chunk) - The Group upholds principles of integrity, maintaining zero tolerance for any corruption and fraudulent activities, regularly providing anti-corruption training for new employees and board members, and establishing transparent and compliant internal complaint channels and customer privacy protection systems[38](index=38&type=chunk) [Financial Position and Risk Management](index=18&type=section&id=Financial%20Position%20and%20Risk%20Management) This section details the Group's cash and bank balances, bank loan composition and usage, debt ratios, and current ratios, analyzing foreign currency risk, pledged assets, capital expenditures, capital commitments, and contingent liabilities, emphasizing a robust capital base and liquidity management Liquidity and Debt Ratios (As of June 30, 2025) | Indicator | June 30, 2025 (HKD) | December 31, 2024 (HKD) | Change | | :--- | :--- | :--- | :--- | | Total Cash and Cash Equivalents, Short-term Bank Deposits, and Other Financial Assets at FVTPL | 573 million | 593.8 million | -3.50% | | Bank Loans | 1.623 billion | 1.6 billion | +1.44% | | Ratio of Non-current Liabilities to Shareholders' Equity | 39.3% | 40.2% | -0.9 percentage points | | Current Ratio | 1.2 | 1.2 | No change | - Bank loans are primarily used for various property construction and development projects, as well as fixed asset investments for developing and upgrading production facilities in Mainland China[39](index=39&type=chunk) - Net cash inflow from operating activities was approximately **HKD 69.1 million**, and management is confident in the Group's ability to maintain good working capital and liquidity levels[39](index=39&type=chunk) - Foreign currency risk is mainly related to RMB and USD; as HKD is pegged to USD, the Group considers the related foreign exchange risk to be minimal[40](index=40&type=chunk) - The Group has pledged property, plant and equipment of **HKD 31.6 million**, investment properties of **HKD 2.1952 billion**, and certain deposits of **HKD 122.1 million** for bank borrowings[41](index=41&type=chunk) Capital Expenditures and Commitments (As of June 30, 2025) | Item | H1 2025 (HKD) | H1 2024 (HKD) | June 30, 2025 (HKD) (Commitment) | December 31, 2024 (HKD) (Commitment) | | :--- | :--- | :--- | :--- | :--- | | Investment in Manufacturing Capacity and Environmental Equipment | 34.2 million | 47.7 million | - | - | | Investment in Property Development and Construction Projects | 40.3 million | 36.8 million | - | - | | Capital Expenditure Commitments (Unreflected) | - | - | 261.4 million | 394.4 million | - As of June 30, 2025, the Group had no significant contingent liabilities[44](index=44&type=chunk) [Other Information](index=19&type=section&id=Other%20Information) [Human Resources](index=19&type=section&id=Human%20Resources) The Group employs approximately 5,000 staff, with management highly prioritizing employee development through robust training programs, performance appraisal frameworks, and competitive compensation and benefits to enhance professional capabilities and team cohesion - As of June 30, 2025, the Group employed approximately **5,000 staff**[45](index=45&type=chunk) - Management highly values employee development, enhancing professional capabilities and knowledge through sound training programs, comprehensive performance appraisal frameworks, and competitive compensation strategies[45](index=45&type=chunk) [Interim Dividend](index=19&type=section&id=Interim%20Dividend) The Board declared an interim dividend of HKD 0.035 per share for the six months ended June 30, 2025, totaling approximately HKD 10.697 million, consistent with the prior year - The Board declared an interim dividend of **HKD 0.035 per share** for the six months ended June 30, 2025, totaling approximately **HKD 10.697 million**[46](index=46&type=chunk) - The dividend will be paid on October 3, 2025, to shareholders whose names appear on the register of members on September 12, 2025[46](index=46&type=chunk) [Closure of Register of Members](index=19&type=section&id=Closure%20of%20Register%20of%20Members) To determine eligibility for the interim dividend, the company will suspend its share transfer registration from September 11 to September 12, 2025 - The company's share transfer registration will be suspended from Thursday, September 11, 2025, to Friday, September 12, 2025, both days inclusive, to determine shareholders entitled to the interim dividend[47](index=47&type=chunk) [Corporate Governance](index=19&type=section&id=Corporate%20Governance) For the six-month accounting period ended June 30, 2025, the company applied and complied with all principles and applicable code provisions of the Corporate Governance Code set out in Appendix C1 of the HKEX Listing Rules - For the six-month accounting period ended June 30, 2025, the company applied and complied with all principles and applicable code provisions of the Corporate Governance Code set out in Appendix C1 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[48](index=48&type=chunk) [Review by Audit Committee](index=20&type=section&id=Review%20by%20Audit%20Committee) The company's Audit Committee has reviewed the Group's unaudited condensed consolidated financial information and interim report for the six months ended June 30, 2025 - The company's Audit Committee has reviewed the Group's unaudited condensed consolidated financial information and interim report for the six months ended June 30, 2025[49](index=49&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=20&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company's%20Listed%20Securities) During the six-month period ended June 30, 2025, neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed securities - During the six-month period ended June 30, 2025, the company did not redeem any of its listed securities, and neither the company nor its subsidiaries purchased or sold any of the company's listed securities[50](index=50&type=chunk) [Publication of Results Announcement and Interim Report](index=20&type=section&id=Publication%20of%20Results%20Announcement%20and%20Interim%20Report) The results announcement has been published on the company's and HKEX websites, and the interim report will be published and dispatched to shareholders on or before September 30, 2025 - This announcement is published on the company's website (www.highfashion.com.hk) and the HKEX website (www.hkexnews.hk)[51](index=51&type=chunk) - The 2025 Interim Report will be published and dispatched to the company's shareholders on or before Tuesday, September 30, 2025[51](index=51&type=chunk) [Appointment of Nomination Committee Members](index=20&type=section&id=Appointment%20of%20Nomination%20Committee%20Members) Ms. Leung Wing Man and Mr. Wong Chun Cheong were appointed as members of the Nomination Committee effective August 26, 2025 - Effective August 26, 2025, Ms. Leung Wing Man, a non-executive director, and Mr. Wong Chun Cheong, an independent non-executive director, were appointed as members of the company's Nomination Committee[52](index=52&type=chunk)

[Financial Highlights](index=1&type=section&id=Financial%20Highlights) The company's financial performance for the six months ended June 30, 2025, shows significant growth in net profit and earnings per share, alongside an improved gearing ratio | Metric | For the Six Months Ended June 30, 2025 (RMB million) | For the Six Months Ended June 30, 2024 (RMB million) | Change Rate | | :--- | :--- | :--- | :--- | | Revenue | 701.86 | 640.75 | +9.54% | | Gross Profit | 168.44 | 165.16 | +1.99% | | Net Profit | 74.60 | 51.79 | +44.05% | | Basic and Diluted Earnings Per Share | 0.06 | 0.04 | +50.00% | | Gearing Ratio (Period-end) | 23.0% | 28.2% (December 31, 2024) | -5.2% | - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025 (for the six months ended June 30, 2024: **nil**)[3](index=3&type=chunk) [Interim Condensed Consolidated Financial Statements](index=2&type=section&id=Interim%20Condensed%20Consolidated%20Financial%20Statements) This section presents the company's interim condensed consolidated financial statements, including the statement of comprehensive income and statement of financial position, highlighting key financial performance and position changes [Interim Condensed Consolidated Statement of Comprehensive Income](index=2&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) For the six months ended June 30, 2025, the company achieved growth in revenue and operating profit, with a significant year-on-year increase in net profit, driven by revenue growth, reduced administrative expenses, and the absence of impairment losses on property, plant, and equipment from the prior period | Metric | For the Six Months Ended June 30, 2025 (RMB) | For the Six Months Ended June 30, 2024 (RMB) | Change Rate | | :--- | :--- | :--- | :--- | | Revenue | 701,859,449 | 640,754,255 | +9.54% | | Gross Profit | 168,442,656 | 165,162,160 | +1.99% | | Operating Profit | 106,512,924 | 73,518,279 | +44.88% | | Profit Before Income Tax | 97,977,005 | 64,157,300 | +52.72% | | Profit for the Period Attributable to Owners of the Company | 74,603,401 | 51,791,438 | +44.05% | | Earnings Per Share - Basic and Diluted | 0.06 | 0.04 | +50.00% | - Impairment loss on property, plant and equipment: **RMB 0** in 2025, compared to **RMB 37,891,436** in 2024[4](index=4&type=chunk) [Interim Condensed Consolidated Statement of Financial Position](index=3&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the company's total assets slightly increased, non-current liabilities significantly decreased, leading to growth in net assets and total equity, optimizing the asset-liability structure | Metric | June 30, 2025 (RMB) | December 31, 2024 (RMB) | Change Rate | | :--- | :--- | :--- | :--- | | Non-current Assets | 1,620,101,964 | 1,603,834,405 | +1.01% | | Current Assets | 864,457,303 | 839,314,342 | +3.00% | | Current Liabilities | 605,932,561 | 546,678,507 | +10.84% | | Non-current Liabilities | 159,436,558 | 252,566,014 | -36.87% | | Total Equity | 1,719,190,148 | 1,643,904,226 | +4.58% | - Trade receivables increased from **RMB 532,766,201** as of December 31, 2024, to **RMB 580,407,416** as of June 30, 2025[5](index=5&type=chunk) - Non-current borrowings significantly decreased from **RMB 200,108,017** as of December 31, 2024, to **RMB 96,750,607** as of June 30, 2025[6](index=6&type=chunk) [Notes to the Interim Condensed Consolidated Financial Statements](index=5&type=section&id=Notes%20to%20the%20Interim%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed notes to the interim condensed consolidated financial statements, covering general information, basis of preparation, accounting policies, revenue and segment information, other income and expenses, income tax, dividends, earnings per share, and balance sheet items [General Information and Basis of Preparation](index=5&type=section&id=General%20Information%20and%20Basis%20of%20Preparation) The Group primarily engages in industrial gas production and supply in China, with unaudited interim financial information prepared in accordance with IAS 34 and the Listing Rules, adopting new amendments to IAS 21 without significant impact [1. General Information](index=5&type=section&id=1.%20General%20Information) The company is registered in the Cayman Islands, primarily engaged in investment holding, with its subsidiaries mainly involved in industrial gas production and supply in China, and its interim financial information is presented in RMB and has been reviewed but not audited - Company's place of incorporation: **Cayman Islands**[7](index=7&type=chunk) - Principal business: Investment holding, with the Group primarily engaged in the production and supply of industrial gases and related services in **Mainland China**[7](index=7&type=chunk) - Financial information status: **Reviewed, not audited**[8](index=8&type=chunk) [2. Basis of Preparation](index=5&type=section&id=2.%20Basis%20of%20Preparation) The interim financial information is prepared in accordance with IAS 34 and the Listing Rules, with management's judgments, estimates, and assumptions consistent with the prior year's consolidated financial statements, and should be read in conjunction with the annual statements - Basis of preparation: **International Accounting Standard 34 "Interim Financial Reporting"** and the applicable disclosure provisions of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[9](index=9&type=chunk) - Management judgments and estimates: Consistent with those applied in the consolidated financial statements for the year ended **December 31, 2024**[9](index=9&type=chunk) [3. Accounting Policies](index=5&type=section&id=3.%20Accounting%20Policies) The accounting policies used for this interim financial information are consistent with the prior year, with only new and amended IFRSs adopted, and amendments to IAS 21 having no significant impact - Accounting policies: Consistent with those used in the preparation of the annual financial statements for the year ended **December 31, 2024**[10](index=10&type=chunk) - Newly adopted standard: Amendments to **IAS 21 "Lack of Exchangeability"**, which the directors concluded would not have any significant impact upon application[11](index=11&type=chunk) [4. Revenue and Segment Information](index=6&type=section&id=4.%20Revenue%20and%20Segment%20Information) The Group operates three main segments: supply of industrial gases, liquefied natural gas and gas transmission services, and technical support and management services, with revenue primarily derived from Mainland China and highly concentrated on a single major customer [4.(i) Operating Segments](index=6&type=section&id=4.(i)%20Operating%20Segments) The Group's chief operating decision maker assesses business performance from a product and service perspective, identifying three operating segments: supply of industrial gases, liquefied natural gas and gas transmission services, and technical support and management services - Operating segments: **Supply of industrial gases (piped and liquefied)**, **liquefied natural gas and gas transmission services**, and **technical support and management services**[12](index=12&type=chunk)[13](index=13&type=chunk) | Segment | For the Six Months Ended June 30, 2025 Segment Profit (RMB) | For the Six Months Ended June 30, 2024 Segment Profit (RMB) | | :--- | :--- | :--- | | Supply of Industrial Gases | 156,841,357 | 161,058,615 | | Liquefied Natural Gas and Gas Transmission Services | 6,111,289 | 791,704 | | Technical Support and Management Services | 5,490,010 | 3,311,841 | | **Total** | **168,442,656** | **165,162,160** | [4.(ii) Geographical Information](index=7&type=section&id=4.(ii)%20Geographical%20Information) All of the Group's revenue is derived from Mainland China, thus no geographical information for total revenue is presented - Revenue source: The Group primarily operates its business in **Mainland China**, and its revenue is derived from Mainland China[15](index=15&type=chunk) [4.(iii) Information on Major Customers](index=7&type=section&id=4.(iii)%20Information%20on%20Major%20Customers) For the six months ended June 30, 2025, Customer A contributed over 75% of the Group's revenue, indicating a high reliance on a single customer | Customer | 2025 (RMB) | 2024 (RMB) | | :--- | :--- | :--- | | Customer A | 527,644,509 | 523,944,975 | [4.(iv) Revenue](index=7&type=section&id=4.(iv)%20Revenue) The Group's revenue primarily comes from the supply of piped industrial gases, followed by liquefied natural gas and gas transmission services, while revenue from the supply of liquefied industrial gases has decreased | Revenue Category | For the Six Months Ended June 30, 2025 (RMB) | For the Six Months Ended June 30, 2024 (RMB) | Change Rate | | :--- | :--- | :--- | :--- | | Supply of Piped Industrial Gases | 512,590,082 | 462,324,549 | +10.87% | | Supply of Liquefied Industrial Gases | 62,688,500 | 82,397,763 | -23.92% | | Supply of Liquefied Natural Gas and Gas Transmission Services | 112,866,597 | 83,712,633 | +34.83% | | Technical Support and Management Services | 8,549,682 | 7,030,115 | +21.62% | | Others | 5,164,588 | 5,289,195 | -2.35% | | **Total** | **701,859,449** | **640,754,255** | **+9.54%** | - Timing of revenue recognition: All of the Group's revenue is recognized at a point in time, except for gas transmission services and technical support and management services, which are recognized **over time**[20](index=20&type=chunk) [4.(v) Contract Liabilities](index=8&type=section&id=4.(v)%20Contract%20Liabilities) As of June 30, 2025, the Group's total contract liabilities increased to approximately RMB 19.09 million, primarily from the supply of liquefied industrial gases and liquefied natural gas, with revenue recognized from contract liabilities carried forward from the beginning of the period significantly increasing year-on-year | Category | June 30, 2025 (RMB) | December 31, 2024 (RMB) | | :--- | :--- | :--- | | Supply of Liquefied Industrial Gases | 10,505,232 | 6,436,111 | | Supply of Liquefied Natural Gas | 8,264,526 | 8,652,679 | | Others | 320,319 | 537,751 | | **Total** | **19,090,077** | **15,626,541** | | Category | For the Six Months Ended June 30, 2025 (RMB) | For the Six Months Ended June 30, 2024 (RMB) | | :--- | :--- | :--- | | Supply of Liquefied Industrial Gases | 2,028,365 | 2,424,978 | | Supply of Liquefied Natural Gas | 7,498,361 | 1,720,647 | | Others | – | 522,497 | | **Total** | **9,526,726** | **4,668,122** | [Other Income and Expenses](index=9&type=section&id=Other%20Income%20and%20Expenses) During the reporting period, the Group's other income significantly increased, net other losses substantially decreased, and net finance costs also declined, reflecting increased scrap sales, VAT reversals, and reduced foreign exchange losses and borrowing interest expenses [5. Other Income](index=9&type=section&id=5.%20Other%20Income) The Group's other income significantly increased by over 56% year-on-year, primarily due to increased scrap sales revenue and the reversal of excess VAT provisions | Category | For the Six Months Ended June 30, 2025 (RMB) | For the Six Months Ended June 30, 2024 (RMB) | Change Rate | | :--- | :--- | :--- | :--- | | Government Grants | 2,683,740 | 2,825,522 | -5.02% | | Others | 3,750,237 | 1,285,665 | +191.71% | | **Total** | **6,433,977** | **4,111,187** | **+56.49%** | - The increase in other income was primarily due to increased proceeds from the sale of scrap materials (**RMB 2,105,949** in 2025 vs. **RMB 1,077,089** in 2024) and the reversal of excess VAT provisions (**RMB 1,622,629** in 2025 vs. **RMB 0** in 2024)[26](index=26&type=chunk) [6. Other (Losses)/Gains - Net](index=9&type=section&id=6.%20Other%20(Losses)%2FGains%20-%20Net) The Group's net other losses significantly decreased year-on-year, primarily due to a substantial reduction in net foreign exchange losses | Category | For the Six Months Ended June 30, 2025 (RMB) | For the Six Months Ended June 30, 2024 (RMB) | Change Rate | | :--- | :--- | :--- | :--- | | Net Exchange Loss | (1,575) | (1,157,908) | -99.86% | | Others | (60,000) | (77,897) | -22.97% | | **Total** | **(61,575)** | **(1,235,805)** | **-95.01%** | [7. Finance Costs - Net](index=9&type=section&id=7.%20Finance%20Costs%20-%20Net) The Group's net finance costs decreased by approximately 8.76% year-on-year, primarily due to a reduction in interest expense on bank borrowings and an increase in capitalized amounts | Category | For the Six Months Ended June 30, 2025 (RMB) | For the Six Months Ended June 30, 2024 (RMB) | Change Rate | | :--- | :--- | :--- | :--- | | Finance Income: Interest income from bank deposits | 727,599 | 914,037 | -20.40% | | Finance Costs: Interest expense on bank borrowings | (10,467,000) | (12,508,500) | -16.32% | | **Finance Costs - Net** | **(8,535,919)** | **(9,360,979)** | **-8.76%** | - Capitalized amount: **RMB 1,265,000** in 2025, compared to **RMB 2,330,480** in 2024[25](index=25&type=chunk) - Average annual capitalization rate: **3.78%** in 2025, compared to **4.69%** in 2024[25](index=25&type=chunk) [8. Details of Operating Expenses](index=10&type=section&id=8.%20Details%20of%20Operating%20Expenses) During the reporting period, the Group experienced increased consumption of electricity and utilities, raw materials, and equipment maintenance expenses, while depreciation, employee benefits, and transportation expenses slightly decreased | Category | For the Six Months Ended June 30, 2025 (RMB) | For the Six Months Ended June 30, 2024 (RMB) | Change Rate | | :--- | :--- | :--- | :--- | | Auditor's Remuneration | 750,000 | 900,000 | -16.67% | | Consumption of electricity and utilities | 402,151,626 | 362,441,557 | +10.96% | | Consumption of raw materials and low-value consumables | 62,767,218 | 38,578,698 | +62.70% | | Depreciation of property, plant and equipment | 58,021,118 | 65,087,470 | -10.86% | | Employee benefit expenses | 28,179,287 | 28,622,247 | -1.55% | | Equipment maintenance expenses | 18,362,910 | 13,344,598 | +37.61% | | Professional service fees | 2,349,255 | 802,535 | +192.75% | [9. Income Tax Expense](index=10&type=section&id=9.%20Income%20Tax%20Expense) The Group's income tax expense significantly increased by nearly 89% year-on-year, primarily due to higher profit before tax, while benefiting from preferential tax rates for high-tech enterprises, super deduction for R&D expenses, and tax incentives for self-produced industrial hydrogen revenue [9.(b) China Corporate Income Tax](index=11&type=section&id=9.(b)%20China%20Corporate%20Income%20Tax) The Group's operations in Mainland China are subject to corporate income tax at a statutory rate of 25%, with Tangshan Tanggang Gas Co., Ltd. and Luannan Tanggang Gas Co., Ltd. enjoying a preferential rate of 15% as high-tech enterprises - General China corporate income tax rate: **25%**[29](index=29&type=chunk) - Preferential tax rate for high-tech enterprises: Tangshan Tanggang Gas Co., Ltd. and Luannan Tanggang Gas Co., Ltd. are recognized as high-tech enterprises in China and enjoy a preferential income tax rate of **15%**[29](index=29&type=chunk) [9.(c) China Withholding Tax](index=11&type=section&id=9.(c)%20China%20Withholding%20Tax) The company has recognized deferred tax liabilities for the undistributed profits of its Chinese subsidiaries, as Chinese law mandates a 10% withholding income tax on dividends distributed to foreign investors - Withholding income tax rate: **10%** (applicable to profits generated after January 1, 2008)[30](index=30&type=chunk) - Deferred tax liabilities: The company has recognized deferred tax liabilities for the undistributed profits of its **Chinese subsidiaries**[30](index=30&type=chunk) [9.(d) Super Deduction for Research and Development Expenses](index=11&type=section&id=9.(d)%20Super%20Deduction%20for%20Research%20and%20Development%20Expenses) Chinese tax law allows enterprises engaged in R&D activities to deduct 200% of their R&D expenses when calculating taxable profits, providing a tax incentive for the Group - Super deduction ratio for R&D expenses: Enterprises engaged in R&D activities are entitled to claim **200%** of their R&D expenses as deductible expenses when determining their taxable profits for the period (effective from March 2023)[31](index=31&type=chunk) [9.(e) Tax Exempt Income](index=11&type=section&id=9.(e)%20Tax%20Exempt%20Income) The Group's subsidiaries in Mainland China are entitled to deduct 10% of the revenue generated from supplying self-produced industrial hydrogen when calculating their taxable profits - Tax incentive: The Group's subsidiaries in Mainland China are entitled to deduct **10%** of the revenue generated from supplying self-produced industrial hydrogen when determining their taxable profits for the period[32](index=32&type=chunk) [Dividends and Earnings Per Share](index=11&type=section&id=Dividends%20and%20Earnings%20Per%20Share) The Board does not recommend an interim dividend, while basic and diluted earnings per share increased due to higher profit for the period, with basic and diluted earnings being the same due to the absence of potential dilutive ordinary shares [10. Dividends](index=11&type=section&id=10.%20Dividends) The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025, consistent with the prior year - Interim dividend: The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025 (for the six months ended June 30, 2024: **nil**)[33](index=33&type=chunk) [11. Earnings Per Share](index=12&type=section&id=11.%20Earnings%20Per%20Share) For the six months ended June 30, 2025, the profit attributable to owners of the company increased, raising basic and diluted earnings per share from RMB 0.04 to RMB 0.06, with basic and diluted earnings being consistent due to no potential dilutive ordinary shares | Metric | For the Six Months Ended June 30, 2025 (RMB) | For the Six Months Ended June 30, 2024 (RMB) | | :--- | :--- | :--- | | Profit for the period attributable to owners of the Company | 74,603,401 | 51,791,438 | | Weighted average number of ordinary shares | 1,200,000,000 | 1,200,000,000 | | Earnings per share - Basic and Diluted | 0.06 | 0.04 | - Diluted earnings: As there were no potential dilutive ordinary shares for the Group for the six months ended June 30, 2025 and 2024, the diluted earnings per share were the **same as the basic earnings per share**[35](index=35&type=chunk) [Notes to Statement of Financial Position Items](index=12&type=section&id=Notes%20to%20Statement%20of%20Financial%20Position%20Items) This section details the period-end balances and changes for property, plant and equipment, right-of-use assets, trade receivables, deposits, prepayments, cash and cash equivalents, and trade and other payables, including impairment provisions and ageing analysis [12. Property, Plant and Equipment](index=12&type=section&id=12.%20Property%2C%20Plant%20and%20Equipment) During the reporting period, the Group's total cost of acquiring property, plant and equipment increased, with no impairment provision recognized, contrasting with the prior period's impairment due to obsolescence and operating losses - Total cost of acquiring property, plant and equipment: **RMB 114,656,839** for the six months ended June 30, 2025 (for the six months ended June 30, 2024: **RMB 69,835,731**)[36](index=36&type=chunk) - Impairment provision: No impairment provision was recognized for property, plant and equipment for the six months ended June 30, 2025 (for the six months ended June 30, 2024: impairment provision of **RMB 37,891,436** was recognized)[37](index=37&type=chunk)[38](index=38&type=chunk) [13. Right-of-Use Assets and Lease Liabilities](index=13&type=section&id=13.%20Right-of-Use%20Assets%20and%20Lease%20Liabilities) During the reporting period, the Group recognized no new right-of-use assets and lease liabilities, and the total lease liabilities decreased, reflecting the impact of lease payments and foreign exchange rate adjustments - New right-of-use assets and lease liabilities: The Group recognized no additions to right-of-use assets and lease liabilities for the six months ended June 30, 2025 (for the six months ended June 30, 2024: **RMB nil**)[39](index=39&type=chunk) - Total lease liabilities: **RMB 2,963,073** as of June 30, 2025, compared to **RMB 3,382,628** as of December 31, 2024[40](index=40&type=chunk) [14. Trade Receivables](index=13&type=section&id=14.%20Trade%20Receivables) As of June 30, 2025, the Group's total trade receivables increased, with a corresponding increase in credit loss provisions, primarily concentrated in receivables aged within 6 months, but credit risk for major customers is assessed as not significant | Metric | June 30, 2025 (RMB) | December 31, 2024 (RMB) | | :--- | :--- | :--- | | Trade receivables | 619,095,985 | 559,343,393 | | Less: Provision for impairment loss | (38,688,569) | (26,577,192) | | **Net** | **580,407,416** | **532,766,201** | | Ageing | June 30, 2025 (RMB) | December 31, 2024 (RMB) | | :--- | :--- | :--- | | Up to 6 months | 437,716,216 | 419,184,161 | | 6 months to 1 year | 120,915,240 | 103,468,956 | | 1 to 2 years | 21,020,635 | 9,154,401 | | Over 2 years | 755,325 | 958,683 | - Major customers: As of June 30, 2025, approximately **96%** of the Group's trade receivables were due from HBIS Group and its member companies (December 31, 2024: approximately **89%**)[72](index=72&type=chunk) [15. Deposits, Prepayments and Other Receivables](index=14&type=section&id=15.%20Deposits%2C%20Prepayments%20and%20Other%20Receivables) As of June 30, 2025, the Group's total deposits, prepayments, and other receivables slightly decreased, primarily due to a reduction in other recoverable taxes and prepayments for utilities and others | Category | June 30, 2025 (RMB) | December 31, 2024 (RMB) | | :--- | :--- | :--- | | Other recoverable taxes | 8,696,521 | 9,131,493 | | Amounts due from related parties | 40,168 | 40,880 | | Utilities and other prepayments | 6,691,020 | 8,498,799 | | Deposits | 2,264,946 | 2,268,216 | | Others | 687,046 | 687,046 | | **Total** | **18,379,701** | **20,626,434** | [16. Cash and Cash Equivalents](index=15&type=section&id=16.%20Cash%20and%20Cash%20Equivalents) As of June 30, 2025, the Group's total cash and cash equivalents slightly increased, primarily denominated in RMB | Category | June 30, 2025 (RMB) | December 31, 2024 (RMB) | | :--- | :--- | :--- | | RMB | 186,047,881 | 175,994,663 | | USD | 4,825,874 | 4,835,385 | | HKD | 2,967,645 | 3,054,705 | | **Total** | **193,841,400** | **183,884,753** | [17. Trade and Other Payables](index=15&type=section&id=17.%20Trade%20and%20Other%20Payables) As of June 30, 2025, the Group's total trade and other payables increased, with trade payables and payables for construction and equipment being the main components | Category | June 30, 2025 (RMB) | December 31, 2024 (RMB) | | :--- | :--- | :--- | | Trade payables | 145,033,197 | 133,656,822 | | Payables for construction and equipment | 62,264,953 | 52,025,173 | | Dividends payable | 49,788,758 | 50,671,500 | | Operating service fees payable | 41,278 | 10,054,109 | | Other taxes payable | 4,046,436 | 3,759,179 | | Salaries payable | 3,447,590 | 2,184,062 | | Professional service fees payable | 1,009,399 | 1,455,881 | | Deposits | 6,238,655 | 8,254,812 | | Others | 6,904,307 | 4,424,536 | | **Total** | **278,774,573** | **266,486,074** | | Ageing | June 30, 2025 (RMB) | December 31, 2024 (RMB) | | :--- | :--- | :--- | | Less than 1 year | 110,495,934 | 97,898,555 | | 1 to 2 years | 8,333,050 | 9,065,552 | | 2 to 3 years | 18,429,870 | 18,673,002 | | Over 3 years | 7,774,343 | 8,019,713 | [Management Discussion and Analysis](index=17&type=section&id=Management%20Discussion%20and%20Analysis) This section provides management's discussion and analysis of the Group's business performance, financial review, liquidity, financial resources, funding, and risk management for the reporting period [Business Review](index=17&type=section&id=Business%20Review) During the reporting period, the Group's total industrial gas business volume and liquefied natural gas and gas transmission services revenue both increased, despite challenges from declining crude steel production in China affecting major customer demand, maintaining overall revenue growth through diversified products and optimized capacity utilization [Overall Business Performance](index=17&type=section&id=Overall%20Business%20Performance) Despite a year-on-year decrease in China's crude steel output, the Group achieved total revenue of approximately RMB 701.86 million in the first half of 2025, with growth in total industrial gas business, liquefied natural gas and gas transmission services revenue, and technical support and management services revenue - China's GDP growth: China's gross domestic product in the first half of 2025 was approximately **RMB 66,053.6 billion**, representing a year-on-year increase of approximately **5.3%**[46](index=46&type=chunk) - China's crude steel output: Approximately **515 million tonnes** in the first half of 2025, a year-on-year decrease of **3.0%**[46](index=46&type=chunk) - Group's total revenue: Approximately **RMB 701.86 million** in the first half of 2025[46](index=46&type=chunk) - Business growth: Total piped and liquefied industrial gas business volume increased by **5.53%** year-on-year, revenue from liquefied natural gas products and pipeline transmission services at Luannan plant increased by **34.83%**, and technical support and management services increased by **21.62%**[46](index=46&type=chunk) [Supply of Piped Industrial Gases](index=17&type=section&id=Supply%20of%20Piped%20Industrial%20Gases) The Group ensures convenient and efficient supply of piped industrial gases through its plants located near customer production facilities, currently operating two such plants - Supply model: The Group's piped industrial gases are delivered to customers via pipelines, with production facilities located at or near **customer production facilities**[47](index=47&type=chunk) - Operating plants: Tanggang Gas Laoting Branch Plant and Tanggang Gas New Area Plant[47](index=47&type=chunk) [Supply of Liquefied Industrial Gases](index=17&type=section&id=Supply%20of%20Liquefied%20Industrial%20Gases) To maximize capacity utilization and increase revenue, the Group produces and sells liquefied industrial gases, including oxygen, nitrogen, argon, and carbon dioxide, using air separation and liquefaction units - Product types: Liquefied industrial gas products include **oxygen, nitrogen, argon, and carbon dioxide**[48](index=48&type=chunk) - Production strategy: Utilizing the remaining design capacity of air separation units to produce and sell liquefied nitrogen to maximize the utilization of **air separation units**[48](index=48&type=chunk) [Provision of Technical Support and Management Services](index=18&type=section&id=Provision%20of%20Technical%20Support%20and%20Management%20Services) The Group provides comprehensive technical support and management services, covering organizational planning, equipment maintenance, safety management, and personnel management for industrial gas production and supply - Service content: Management of organization and planning, equipment inspection, equipment maintenance, routine maintenance, safety, labor, and personnel related to the production and supply of **industrial gas products**[49](index=49&type=chunk) [Supply of Liquefied Natural Gas and Gas Transmission Services](index=18&type=section&id=Supply%20of%20Liquefied%20Natural%20Gas%20and%20Gas%20Transmission%20Services) The Group's liquefied natural gas related businesses include LNG supply and coke oven gas boosting and transmission services, primarily produced and provided by the Luannan plant - Business scope: **Liquefied natural gas supply** and provision of gas transmission services (coke oven gas boosting and transmission services)[50](index=50&type=chunk) - Production base: The Group's Luannan plant produces **liquefied natural gas**[50](index=50&type=chunk) [Revenue and Gross Profit by Business Segment](index=18&type=section&id=Revenue%20and%20Gross%20Profit%20by%20Business%20Segment) During the reporting period, technical support and management services achieved the highest gross profit margin, liquefied natural gas and gas transmission services saw a significant increase in gross profit margin, while the gross profit margin for the supply of industrial gases (piped and liquefied) slightly decreased | Business Segment | For the Six Months Ended June 30, 2025 Revenue (RMB) | For the Six Months Ended June 30, 2025 Gross Profit (RMB) | For the Six Months Ended June 30, 2025 Gross Profit Margin | For the Six Months Ended June 30, 2024 Revenue (RMB) | For the Six Months Ended June 30, 2024 Gross Profit (RMB) | For the Six Months Ended June 30, 2024 Gross Profit Margin | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Supply of Industrial Gases (Piped and Liquefied) | 580,443,170 | 156,841,357 | 27.02% | 550,011,507 | 161,058,615 | 29.28% | | Liquefied Natural Gas and Gas Transmission Services | 112,866,597 | 6,111,289 | 5.41% | 83,712,633 | 791,704 | 0.95% | | Technical Support and Management Services | 8,549,682 | 5,490,010 | 64.21% | 7,030,115 | 3,311,841 | 47.11% | | **The Group** | **701,859,449** | **168,442,656** | **24.00%** | **640,754,255** | **165,162,160** | **25.78%** | [Group Business Volume](index=18&type=section&id=Group%20Business%20Volume) In the first half of 2025, the Group's piped industrial gas sales volume and revenue both increased, and liquefied natural gas and gas transmission services revenue significantly rose, but liquefied industrial gas sales volume and revenue decreased - Piped industrial gas sales: Approximately **1,935.36 million standard cubic meters** (revenue approximately **RMB 511.84 million**) in the first half of 2025, compared to approximately **1,784.70 million standard cubic meters** (revenue approximately **RMB 462.32 million**) in the same period of 2024[52](index=52&type=chunk) - Liquefied industrial gas sales: A total of approximately **97,129 tonnes** (revenue approximately **RMB 63.44 million**) in the first half of 2025, compared to approximately **133,745 tonnes** (revenue approximately **RMB 82.40 million**) in the same period of 2024[52](index=52&type=chunk) - Liquefied natural gas and gas transmission services revenue: Approximately **RMB 112.86 million** in the first half of 2025, compared to approximately **RMB 83.71 million** in the same period of 2024[52](index=52&type=chunk) [Outlook](index=19&type=section&id=Outlook) Looking ahead, the Group faces challenges from global trade policy changes and the US-China trade war, but the rapid development of China's industrial gas industry, emerging gas demands, and shifts in gas supply models offer significant development opportunities [Impact of External Factors](index=19&type=section&id=Impact%20of%20External%20Factors) Falling steel prices and high raw material costs in China pressure steel industry profitability, while changing US trade policies and the US-China trade war increase global trade uncertainty, potentially affecting the Group's major customers' demand and market position - China's GDP growth target: The full-year gross domestic product growth target for 2025 is approximately **5%**[53](index=53&type=chunk) - Steel industry challenges: Falling steel prices and high raw material prices have led to a decline in the **steel industry's profitability**[53](index=53&type=chunk) - Trade policy risks: Increased US tariffs and the US-China trade war may affect steel mills' production plans and market demand, potentially reducing the Group's **market share**[53](index=53&type=chunk)[54](index=54&type=chunk) [Development Opportunities from Industry Prospects](index=19&type=section&id=Development%20Opportunities%20from%20Industry%20Prospects) Driven by national policies, foreign investment, and high-tech advancements, China's industrial gas industry is rapidly developing, with emerging gas demands (e.g., electronic specialty gases) expected to grow, providing opportunities for the Group to expand its market share - Industry development drivers: **National policy promotion, introduction of foreign capital, and high-tech development**[55](index=55&type=chunk) - Emerging demand: New gas demands, represented by **electronic specialty gases**, are continuously emerging[55](index=55&type=chunk) - Group strategy: Actively developing specialty gas products and expanding market share in **electronic specialty gas products**[55](index=55&type=chunk) [Opportunities from the Development of Gas Supply Models](index=20&type=section&id=Opportunities%20from%20the%20Development%20of%20Gas%20Supply%20Models) The outsourced gas supply model is steadily gaining market share due to its low operating costs, stable supply, and high resource utilization efficiency, expected to gradually replace self-built equipment supply, offering external development opportunities for the Group - Advantages of outsourced gas supply model: **Low operating costs, stable supply, high resource utilization efficiency, and low one-time financial costs**[56](index=56&type=chunk) - Market trend: The outsourced gas supply model is expected to gradually replace the **self-built equipment supply model** in the future[56](index=56&type=chunk) - Group strategy: Fully leveraging its successful experience and technological advantages as an outsourced gas supplier to seek **external development opportunities**[56](index=56&type=chunk) [Group Business Development](index=20&type=section&id=Group%20Business%20Development) The Group benefits from strong customer support, and with customers expanding production capacity, demand for industrial gas products is increasing, anticipating stable business growth in the future - Growth drivers: The Group has strong customer support for business development, with increasing demand for industrial gas products as **customers expand production capacity**[57](index=57&type=chunk) - Expectation: The Group expects **stable business growth** in the future[57](index=57&type=chunk) [Incremental Demand for Industrial Gas Products](index=20&type=section&id=Incremental%20Demand%20for%20Industrial%20Gas%20Products) The construction of HBIS Tangsteel Company's coastal base No. 4 blast furnace and cold rolling production line will lead to the commissioning and debugging of oxygen and hydrogen production units for the Group, indicating specific incremental demand for industrial gas products - Construction of HBIS Tangsteel Company's coastal base No. 4 blast furnace: The supporting **60,000 Nm3/h oxygen production unit** is ready for commissioning and will be operational after the No. 4 blast furnace commences production[58](index=58&type=chunk) - Construction of HBIS Tangsteel Company's coastal base cold rolling production line: The supporting **hydrogen production unit** is currently undergoing debugging[58](index=58&type=chunk) [Financial Review](index=20&type=section&id=Financial%20Review) This section provides a detailed analysis of the Group's financial performance during the reporting period, including changes in revenue, gross profit, net profit, various expenses, and income tax, revealing the positive impact of revenue growth, cost control, and reduced impairment losses on profitability [Overall Financial Performance](index=20&type=section&id=Overall%20Financial%20Performance) During the reporting period, the Group's revenue, gross profit, profit attributable to owners of the company, and earnings per share all increased, with a significant rise in profit attributable to owners | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | Change Rate | | :--- | :--- | :--- | :--- | | Revenue | 701.86 | 640.75 | +9.54% | | Gross Profit | 168.44 | 165.16 | +1.99% | | Profit attributable to owners of the Company | 74.60 | 51.79 | +44.05% | | Earnings per share | 0.06 | 0.04 | +50.00% | [Revenue Analysis](index=21&type=section&id=Revenue%20Analysis) During the reporting period, the Group's total revenue grew by 9.54%, primarily driven by significant increases in revenue from the supply of piped industrial gases and liquefied natural gas and gas transmission services, while revenue from the supply of liquefied industrial gases decreased due to capacity allocation adjustments - Total revenue: Approximately **RMB 701.86 million**, an increase of approximately **9.54%** compared to approximately **RMB 640.75 million** in the same period of 2024[60](index=60&type=chunk) - Revenue from supply of piped industrial gases: Approximately **RMB 512.89 million**, an increase of approximately **10.87%** compared to the same period of 2024, primarily due to an increase in **third-party piped gas users**[60](index=60&type=chunk) - Revenue from supply of liquefied industrial gases: Approximately **RMB 62.69 million**, a decrease of approximately **23.92%** compared to the same period of 2024, mainly due to increased piped gas supply to related parties and third parties, leaving no surplus oxygen for the production of **liquefied industrial gases**[60](index=60&type=chunk) - Revenue from supply of liquefied natural gas and gas transmission services: Approximately **RMB 112.87 million**, an increase of approximately **34.83%** compared to the same period of 2024, primarily due to the resumption of **normal liquefied natural gas production**[60](index=60&type=chunk) - Revenue from technical support and management services: Approximately **RMB 8.55 million**, an increase of approximately **21.62%** compared to the same period of 2024, primarily due to a significant increase in the volume of **piped nitrogen and hydrogen**[60](index=60&type=chunk) [Other Income and Other Losses or Gains, Net](index=21&type=section&id=Other%20Income%20and%20Other%20Losses%20or%20Gains%2C%20Net) The Group's other income increased by over 56.5% year-on-year, mainly due to increased revenue from scrap product sales and VAT reversals; concurrently, net other losses significantly decreased, primarily benefiting from a reduction in net foreign exchange losses - Other income: Approximately **RMB 6.43 million**, an increase of over **56.5%**, primarily due to increased revenue from the sale of scrap products and **VAT reversals**[61](index=61&type=chunk) - Net other losses: Approximately **RMB 0.062 million**, a significant decrease compared to approximately **RMB 1.24 million** in the same period of 2024, primarily due to a reduction in **net foreign exchange losses**[61](index=61&type=chunk) [Selling and Marketing Expenses](index=21&type=section&id=Selling%20and%20Marketing%20Expenses) During the reporting period, the Group's selling and marketing expenses decreased by approximately 5.26% year-on-year, primarily due to lower equipment maintenance costs - Selling and marketing expenses: Decreased by approximately **5.26%** to approximately **RMB 1.44 million** (same period of 2024: approximately **RMB 1.52 million**), primarily due to reduced **equipment maintenance expenses** in the first half of 2025[62](index=62&type=chunk) [Administrative Expenses](index=21&type=section&id=Administrative%20Expenses) The Group's administrative expenses decreased by approximately 23.36% year-on-year, mainly due to reduced depreciation of fixed assets and lower operating service fees resulting from service termination - Administrative expenses: Decreased by approximately **23.36%** to approximately **RMB 17.98 million** (same period of 2024: approximately **RMB 23.46 million**), primarily due to reduced depreciation of fixed assets and lower operating service fees resulting from **service termination**[63](index=63&type=chunk) [Provision for Credit Losses on Trade Receivables](index=22&type=section&id=Provision%20for%20Credit%20Losses%20on%20Trade%20Receivables) During the reporting period, the Group's provision for credit losses on trade receivables significantly increased year-on-year, primarily due to an increase in receivables aged between 6 months to 1 year and 1 to 2 years - Provision for credit losses: Increased by approximately **RMB 12.11 million** (same period of 2024: approximately **RMB 1.88 million**), primarily due to an increase in receivables aged **6 months to 1 year and 1 to 2 years**[64](index=64&type=chunk) [Impairment Loss on Property, Plant and Equipment](index=22&type=section&id=Impairment%20Loss%20on%20Property%2C%20Plant%20and%20Equipment) During the reporting period, the Group recognized no impairment provision for property, plant and equipment, contrasting with the prior period's significant impairment due to obsolescence and operating losses - Impairment provision: No impairment provision was recognized for property, plant and equipment during the reporting period (same period of 2024: impairment provision of **RMB 37,891,436** was recognized)[65](index=65&type=chunk) [Finance Costs - Net](index=22&type=section&id=Finance%20Costs%20-%20Net) The Group's net finance costs decreased by approximately 8.76% year-on-year, primarily due to a reduction in borrowing amounts - Net finance costs: Decreased by approximately **8.76%** to approximately **RMB 8.54 million** (same period of 2024: approximately **RMB 9.36 million**), primarily due to a reduction in **borrowing amounts**[66](index=66&type=chunk) [Income Tax Expense](index=22&type=section&id=Income%20Tax%20Expense) The Group's income tax expense significantly increased by approximately 88.82% year-on-year, primarily due to a substantial increase in profit before tax - Income tax expense: Approximately **RMB 23.37 million** (same period of 2024: approximately **RMB 12.37 million**), an increase of approximately **88.82%**, primarily due to an increase in the Group's **profit before tax**[67](index=67&type=chunk) [Liquidity, Financial Resources and Funding](index=22&type=section&id=Liquidity%2C%20Financial%20Resources%20and%20Funding) The Group's cash and bank balances increased, while bank borrowings and other liabilities decreased, leading to an improved gearing ratio and net debt. Despite a slight decrease, the current ratio remains healthy, with sufficient bank loan facilities to support future operations and capital expenditures [Cash and Bank Balances and Borrowings](index=22&type=section&id=Cash%20and%20Bank%20Balances%20and%20Borrowings) As of June 30, 2025, the Group's cash and bank balances increased, while bank borrowings and other liabilities decreased, indicating an improvement in financial position - Total cash and bank balances: Approximately **RMB 193.84 million** as of June 30, 2025 (December 31, 2024: approximately **RMB 183.88 million**)[68](index=68&type=chunk) - Bank borrowings and other liabilities: Approximately **RMB 395.29 million** as of June 30, 2025 (December 31, 2024: approximately **RMB 463.69 million**)[68](index=68&type=chunk) - Available bank loan facilities: Approximately **RMB 325.50 million** as of June 30, 2025[68](index=68&type=chunk) [Gearing Ratio and Net Debt](index=22&type=section&id=Gearing%20Ratio%20and%20Net%20Debt) Both the Group's gearing ratio and net debt decreased, reflecting a reduction in financial leverage and an improvement in financial position - Gearing ratio: Approximately **23%** as of June 30, 2025 (December 31, 2024: **28%**)[68](index=68&type=chunk) - Net debt: Approximately **RMB 201.45 million** as of June 30, 2025 (December 31, 2024: approximately **RMB 279.81 million**)[68](index=68&type=chunk) [Current Assets and Liabilities](index=22&type=section&id=Current%20Assets%20and%20Liabilities) As of June 30, 2025, the Group's total current assets increased, and total current liabilities also increased, resulting in a slight decrease in the current ratio, which nonetheless remains healthy - Total current assets: Approximately **RMB 864.46 million** as of June 30, 2025, an increase of approximately **3.00%** compared to approximately **RMB 839.31 million** as of December 31, 2024[69](index=69&type=chunk) - Total current liabilities: Approximately **RMB 605.93 million** as of June 30, 2025, an increase of approximately **10.84%** compared to approximately **RMB 546.68 million** as of December 31, 2024[69](index=69&type=chunk) - Current ratio: Approximately **1.43** as of June 30, 2025 (December 31, 2024: approximately **1.54**)[69](index=69&type=chunk) [Funding Sources for Operations and Capital Expenditures](index=23&type=section&id=Funding%20Sources%20for%20Operations%20and%20Capital%20Expenditures) The Group's operating and capital expenditures are primarily funded by cash generated from operations, internal liquidity, and bank loans, with future cash flows expected to meet its needs - Funding sources: The Group's operating and capital expenditures are primarily funded by **cash generated from operations, internal liquidity, and bank loans**[70](index=70&type=chunk) - Future outlook: Cash flows generated from the Group's operations are expected to meet its **future cash flow requirements**[72](index=72&type=chunk) [Risk Management](index=23&type=section&id=Risk%20Management) The Group balances risk and investment returns by managing foreign currency, credit, and liquidity risks. Despite provisions for trade receivables, credit risk for major customers is assessed as not significant, and liquidity policies are effective [Financial Instruments and Key Risks](index=23&type=section&id=Financial%20Instruments%20and%20Key%20Risks) The Group's main financial instruments include financial assets at fair value through other comprehensive income, trade and other receivables, bank balances and cash, trade and other payables, borrowings, and lease liabilities, with key risks being foreign currency, credit, liquidity, and interest rate risks - Major financial instruments: Financial assets at fair value through other comprehensive income, trade and other receivables, bank balances and cash, trade and other payables, **borrowings, and lease liabilities**[71](index=71&type=chunk) - Key risks: **Foreign currency risk, credit risk, liquidity risk, and interest rate risk**[71](index=71&type=chunk) [Credit Risk](index=23&type=section&id=Credit%20Risk) As of June 30, 2025, the Group's provision for credit losses on trade receivables increased, but management considers the inherent credit risk not significant, given the good historical performance and credit quality assessment of its major customer (HBIS Group), while maintaining a prudent approach to impairment provisions - Provision for credit losses: As of June 30, 2025, a provision for impairment loss of approximately **RMB 38.69 million** was recognized for trade receivables (December 31, 2024: approximately **RMB 26.58 million**)[72](index=72&type=chunk) - Major source of trade receivables: As of June 30, 2025, approximately **96%** of the Group's trade receivables were due from HBIS Group and its member companies (December 31, 2024: approximately **89%**)[72](index=72&type=chunk) - Management assessment: Given the good historical performance of receivables, the Group's management believes that the inherent credit risk of the Group's outstanding trade receivables balance is not significant, but has made impairment provisions for trade receivables based on the **principle of prudence**[72](index=72&type=chunk) [Liquidity Risk](index=24&type=section&id=Liquidity%20Risk) The Group manages liquidity risk by regularly monitoring cash positions, forecasting cash flows, and assessing liquidity levels to ensure sufficient liquidity, and considers its liquidity policy effective - Management approach: Managing liquidity risk by regularly monitoring the following objectives: maintaining stable development of the Group's principal businesses, timely monitoring of cash and bank positions, forecasting cash flows, and assessing **liquidity levels**[75](index=75&type=chunk) - Policy effectiveness: The Group has consistently followed this liquidity policy during the reporting period, and it has been **effective in managing liquidity risk**[72](index=72&type=chunk) [Foreign Currency Risk](index=23&type=section&id=Foreign%20Currency%20Risk) The Group's foreign currency risk primarily arises from other payables and cash and cash equivalents denominated in currencies other than its functional currency, mainly involving USD and HKD, but management considers the foreign exchange risk not significant - Source of risk: Other payables and cash and cash equivalents arising from the Group's operations primarily outside China are denominated in currencies other than their respective **functional currencies**[73](index=73&type=chunk) - Major currencies: The currencies giving rise to such risks are primarily **USD and HKD**[73](index=73&type=chunk) - Hedging policy: The Group does not use derivative financial instruments to hedge its foreign exchange risk, but management regularly reviews and considers its foreign exchange risk to be **not significant**[73](index=73&type=chunk)[74](index=74&type=chunk) [Other Financial Information](index=24&type=section&id=Other%20Financial%20Information) This section provides supplementary financial information on pledged assets, treasury policy, material investments, capital commitments, contingent liabilities, and material events after the reporting period, indicating stability in these areas [Pledged Assets](index=24&type=section&id=Pledged%20Assets) As of June 30, 2025, none of the Group's assets were pledged, consistent with the prior year - Pledged assets: As of June 30, 2025, none of the Group's assets were pledged (December 31, 2024: **nil**)[76](index=76&type=chunk) [Treasury Policy](index=24&type=section&id=Treasury%20Policy) The Group holds bank balances and cash denominated in HKD, RMB, and USD, currently without foreign currency and interest rate hedging policies, but management monitors and considers hedging significant risks when necessary - Currencies held: The Group's bank balances and cash are denominated in **HKD, RMB, and USD**[77](index=77&type=chunk) - Hedging policy: The Group currently has no foreign currency and interest rate hedging policies; however, management monitors foreign currency and interest rate risks from time to time and will consider hedging significant risks **when necessary**[77](index=77&type=chunk) [Material Investments, Acquisitions and Disposals Held](index=24&type=section&id=Material%20Investments%2C%20Acquisitions%20and%20Disposals%20Held) During the reporting period, the Group did not undertake any material investment, acquisition, or disposal activities - Material investments/acquisitions/disposals: During the reporting period, the Group held no material investments, made no material acquisitions or disposals of subsidiaries or associates, nor any available-for-sale investment projects[78](index=78&type=chunk) [Capital Commitments](index=24&type=section&id=Capital%20Commitments) As of June 30, 2025, the Group's total capital commitments decreased, primarily for the purchase of property, plant and equipment - Total capital commitments: Approximately **RMB 36.83 million** as of June 30, 2025 (December 31, 2024: approximately **RMB 55.68 million**)[79](index=79&type=chunk) - Primary use: Primarily contractual commitments for the purchase of **property, plant and equipment**[79](index=79&type=chunk) [Contingent Liabilities](index=24&type=section&id=Contingent%20Liabilities) As of June 30, 2025, the Group had no material contingent liabilities - Contingent liabilities: As of June 30, 2025, the Group had no material contingent liabilities (December 31, 2024: **nil**)[80](index=80&type=chunk) [Material Events After Reporting Period](index=24&type=section&id=Material%20Events%20After%20Reporting%20Period) As of the date of this announcement, the directors are not aware of any material events requiring disclosure that have occurred after the reporting period - Events after reporting period: As of the date of this announcement, the directors are not aware of any material events requiring disclosure that have occurred after the reporting period[81](index=81&type=chunk) [Other Information](index=24&type=section&id=Other%20Information) This section covers other important information, including employee and remuneration policies, corporate governance practices, interim dividend recommendations, publication details, and the composition of the Board of Directors [Employees and Remuneration Policy](index=24&type=section&id=Employees%20and%20Remuneration%20Policy) The Group values talent, attracting and retaining highly skilled personnel through continuous education, training, and a share option scheme, offering a competitive remuneration package. CEO Mr. Li Libing has waived his remuneration for the reporting period [Employee Profile and Training](index=24&type=section&id=Employee%20Profile%20and%20Training) The Group views talent as key to its success, committed to attracting and retaining highly skilled personnel, and enhancing employee skills in operations, technical knowledge, safety standards, and environmental protection through continuous education and training programs - Talent strategy: The Group believes that talent is one of the key factors leading to its success, and plans to continue attracting and retaining highly skilled personnel, while further strengthening its **corporate culture**[82](index=82&type=chunk) - Training content: The Group provides training to employees on operations, technical knowledge, as well as **work safety standards and environmental protection**[83](index=83&type=chunk) [Share Option Scheme](index=25&type=section&id=Share%20Option%20Scheme) The Group adopted a share option scheme in 2020 as a long-term incentive for eligible employees, valid for ten years, but no share options have been granted to date - Adoption date: The Group conditionally adopted the share option scheme on **June 17, 2020**, through a written resolution of its then shareholders[83](index=83&type=chunk) - Validity period: The scheme is valid for **10 years** from December 29, 2020[83](index=83&type=chunk) - Grant status: As of the date of this announcement, no share options have been granted, cancelled, or lapsed[83](index=83&type=chunk) [Number of Employees and Staff Costs](index=25&type=section&id=Number%20of%20Employees%20and%20Staff%20Costs) As of June 30, 2025, the Group's number of employees slightly decreased, with a corresponding reduction in total staff costs, while still offering a competitive remuneration package to employees - Number of employees: As of June 30, 2025, the Group employed a total of **315 employees** (December 31, 2024: **324 employees**)[83](index=83&type=chunk) - Total staff costs: Approximately **RMB 28.18 million** for the year ended June 30, 2025 (same period of 2024: approximately **RMB 28.62 million**)[83](index=83&type=chunk) [Chief Executive Officer's Remuneration](index=25&type=section&id=Chief%20Executive%20Officer's%20Remuneration) CEO Mr. Li Libing has confirmed in writing that he waived all his remuneration, including director's fees, salaries, and allowances, for the reporting periods from 2022 to 2025 - Chief Executive Officer: Mr. Li Libing was appointed as Chief Executive Officer on **March 31, 2022**[84](index=84&type=chunk) - Remuneration waiver: Mr. Li has waived his remuneration for the years ended **December 31, 2022, December 31, 2023, December 31, 2024**, and the reporting period[84](index=84&type=chunk) - Waived amount: The Chief Executive Officer's remuneration waived for the 2025 reporting period was **HKD 600,000**[84](index=84&type=chunk) [Corporate Governance](index=25&type=section&id=Corporate%20Governance) The Group is committed to maintaining high standards of corporate governance, having adopted and complied with the Corporate Governance Code in Appendix C1 of the Listing Rules, ensuring directors adhere to the Model Code for securities transactions, and the Audit Committee has reviewed the interim results [Compliance with Corporate Governance Code](index=25&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) The company has adopted and complied with the Corporate Governance Code set out in Part 2 of Appendix C1 of the Listing Rules during the reporting period to safeguard the overall interests of shareholders - Compliance: The company has complied with all applicable code provisions of the Corporate Governance Code during the **reporting period**[86](index=86&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=25&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company's%20Listed%20Securities) During the reporting period, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities - Securities transactions: During the reporting period, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities (including the sale of treasury shares)[87](index=87&type=chunk) [Standard Code for Securities Transactions](index=26&type=section&id=Standard%20Code%20for%20Securities%20Transactions) The company has adopted a code of conduct for directors' securities transactions no less stringent than the Model Code in Appendix C3 of the Listing Rules, and all directors have confirmed compliance during the reporting period - Code of conduct: The company has adopted a code of conduct for directors' securities transactions, the terms of which are no less stringent than the standards set out in the **Model Code for Securities Transactions by Directors of Listed Issuers** in Appendix C3 of the Listing Rules[88](index=88&type=chunk) - Directors' compliance: Following specific inquiries to all directors, all directors have confirmed compliance with the standards set out in the Model Code throughout the **reporting period**[88](index=88&type=chunk) [Review by Audit Committee](index=26&type=section&id=Review%20by%20Audit%20Committee) The company's Audit Committee has reviewed the Group's unaudited interim condensed consolidated financial information and this announcement for the reporting period, discussing accounting policies, internal controls, and financial reporting matters. The independent auditor has also reviewed the interim financial information - Review content: The company's Audit Committee has reviewed the Group's unaudited interim condensed consolidated financial information and this announcement for the reporting period, and also discussed matters related to the accounting policies and practices adopted by the company, as well as **internal controls and financial reporting matters**[89](index=89&type=chunk) - Independent auditor: The company's independent auditor, BDO Limited, has reviewed the Group's unaudited interim financial information for the reporting period in accordance with **Hong Kong Standard on Review Engagements 2410** issued by the Hong Kong Institute of Certified Public Accountants[89](index=89&type=chunk) [Interim Dividend](index=26&type=section&id=Interim%20Dividend) The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025, consistent with the prior year - Interim dividend: The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025 (for the six months ended June 30, 2024: **nil**)[90](index=90&type=chunk) [Publication of Interim Results Announcement and Interim Report](index=26&type=section&id=Publication%20of%20Interim%20Results%20Announcement%20and%20Interim%20Report) This results announcement has been published on the HKEX and the company's website, and the interim report will be dispatched to shareholders and published on the aforementioned websites in late September 2025 - Announcement publication platforms: This results announcement has been published on the **HKEX website (www.hkexnews.hk)** and the **company's website (www.cgiihldgs.com)**[91](index=91&type=chunk) - Interim report publication time: The company's interim report for the six months ended June 30, 2025, will be dispatched to shareholders and published on the aforementioned websites in **late September 2025**[91](index=91&type=chunk) [Board of Directors](index=26&type=section&id=Board%20of%20Directors) As of the announcement date, the Board of Directors comprises executive, non-executive, and independent non-executive directors, with Mr. Song Changjiang serving as Chairman and Executive Director - Chairman and Executive Director: **Mr. Song Changjiang**[92](index=92&type=chunk)[93](index=93&type=chunk) - Board composition: Includes Executive Directors Mr. Song Changjiang (Chairman) and Mr. Sun Changhuan; Non-executive Directors Ms. Wu Shuk Ming and Mr. Zhang Wenli; and Independent Non-executive Directors Mr. Siu Chi Hung, Mr. Xiao Huanwei, and Ms. Li Juan[93](index=93&type=chunk)

[Company Information](index=5&type=section&id=Company%20Information) This section provides an overview of the company's key personnel, board structure, and essential contact and registration details [Board of Directors and Key Personnel](index=5&type=section&id=Board%20of%20Directors%20and%20Key%20Personnel) This section outlines the company's board members, committee compositions, and key corporate roles including joint company secretaries, authorized representatives, independent auditors, and compliance advisors - Board members include **Datuk Seri Chua Soo Lai** (Chairman and CEO), **Mdm. Yeo Wee Kuan**, and **Mr. Soh Chin Yew** (appointed March 28, 2025) as Executive Directors; **Mr. Cheng Chang Kim** (re-designated March 28, 2025) as Non-Executive Director; and **Mr. Tan Chee Keong**, **Mr. Ang Yong Seng**, and **Mr. Tien Yang Kang** as Independent Non-Executive Directors[9](index=9&type=chunk) - The Audit, Remuneration, and Nomination Committees are all chaired by Independent Non-Executive Directors, with a change in the Nomination Committee on August 26, 2025, where **Datuk Seri Chua Soo Lai resigned** and **Mdm. Yeo Wee Kuan was appointed**[9](index=9&type=chunk) - Independent Auditor is **PricewaterhouseCoopers LLP**, and Compliance Adviser is **UOB Kay Hian (Hong Kong) Limited**[9](index=9&type=chunk) [Company Contact Information](index=5&type=section&id=Company%20Contact%20Information) This section provides the company's registered office, principal places of business in Singapore and Hong Kong, legal counsel, principal bankers, share registrar, website, and stock code - The company's registered office is in the Cayman Islands, with its headquarters and principal place of business in Singapore at **No. 43 Tuas View Circuit, Singapore 637360**[9](index=9&type=chunk)[10](index=10&type=chunk) - The principal place of business in Hong Kong is **Unit 1917, 19/F, Lee Garden One, 33 Hysan Avenue, Causeway Bay, Hong Kong**[10](index=10&type=chunk) - The company's stock code is **8637**, and its website is **www.metatechnologies.com.sg**[10](index=10&type=chunk) [Condensed Consolidated Statement of Comprehensive Income](index=6&type=section&id=Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) This section presents the company's unaudited interim financial results, showing significant growth in revenue and profit, and improved earnings per share [Financial Performance Overview](index=6&type=section&id=Financial%20Performance%20Overview) The unaudited interim financial results for the six months ended June 30, 2025, show significant growth in revenue and profit, alongside an increase in earnings per share Key Data from Condensed Consolidated Statement of Comprehensive Income for the Six Months Ended June 30, 2025 | Metric | June 30, 2025 (SGD thousand) | June 30, 2024 (SGD thousand) | Change (SGD thousand) | Growth Rate | | :--- | :--- | :--- | :--- | :--- | | Revenue | 24,766 | 18,598 | 6,168 | 33.16% | | Cost of Sales | (14,355) | (11,203) | (3,152) | 28.13% | | Gross Profit | 10,411 | 7,395 | 3,016 | 40.79% | | Operating Profit | 5,527 | 3,488 | 2,039 | 58.46% | | Profit Before Tax | 3,953 | 2,754 | 1,199 | 43.54% | | Profit for the Period | 3,132 | 2,097 | 1,035 | 49.36% | | Basic and Diluted EPS (Singapore cents per share) | 2.10 | 1.70 | 0.40 | 23.53% | [Condensed Consolidated Statement of Financial Position](index=7&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) This section provides an overview of the company's assets and liabilities, indicating a robust financial position with growth in total assets and net assets [Assets and Liabilities Overview](index=7&type=section&id=Assets%20and%20Liabilities%20Overview) As of June 30, 2025, the company's total assets and net assets increased, with a rise in net current assets, reflecting a stable financial position Key Data from Condensed Consolidated Statement of Financial Position as of June 30, 2025 | Metric | June 30, 2025 (SGD thousand) | December 31, 2024 (SGD thousand) | Change (SGD thousand) | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Non-current Assets | 42,580 | 43,470 | (890) | -2.05% | | Current Assets | 37,653 | 33,030 | 4,623 | 14.00% | | Current Liabilities | 12,943 | 11,656 | 1,287 | 11.04% | | Net Current Assets | 24,710 | 21,374 | 3,336 | 15.61% | | Non-current Liabilities | 23,590 | 25,432 | (1,842) | -7.24% | | Net Assets | 43,700 | 39,412 | 4,288 | 10.88% | | Total Equity Attributable to Owners of the Company | 43,700 | 39,412 | 4,288 | 10.88% | [Condensed Consolidated Statement of Changes in Equity](index=9&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) This section details the changes in the company's total equity, primarily driven by profit for the period, share of associate's capital contribution, and share-based payment expenses [Analysis of Changes in Equity](index=9&type=section&id=Analysis%20of%20Changes%20in%20Equity) For the six months ended June 30, 2025, total equity increased from SGD 39,412 thousand to SGD 43,700 thousand, mainly due to profit for the period, share of associate's capital contribution, and share-based payment expenses Changes in Equity for the Six Months Ended June 30, 2025 | Metric | Balance as of January 1, 2025 (SGD thousand) | Balance as of June 30, 2025 (SGD thousand) | Change (SGD thousand) | | :--- | :--- | :--- | :--- | | Share Capital | 26 | 26 | 0 | | Retained Earnings/(Accumulated Losses) | (2,924) | 208 | 3,132 | | Currency Translation Reserve | (264) | (258) | 6 | | Share Premium | 8,327 | 8,327 | 0 | | Other Reserves | 34,247 | 35,397 | 1,150 | | Total Equity | 39,412 | 43,700 | 4,288 | - Profit for the period contributed **SGD 3,132 thousand**, share of capital contribution from an associate contributed **SGD 171 thousand**, and share-based payment expenses for employees contributed **SGD 979 thousand**, collectively driving the increase in equity[17](index=17&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) This section analyzes the company's cash flows, showing net cash from operating activities, but net cash outflows from investing and financing activities [Cash Flow Analysis](index=10&type=section&id=Cash%20Flow%20Analysis) For the six months ended June 30, 2025, net cash from operating activities was SGD 5,099 thousand, while investing and financing activities resulted in net outflows, leading to a net increase of SGD 985 thousand in cash and cash equivalents Key Data from Condensed Consolidated Statement of Cash Flows for the Six Months Ended June 30, 2025 | Activity Type | June 30, 2025 (SGD thousand) | June 30, 2024 (SGD thousand) | Change (SGD thousand) | | :--- | :--- | :--- | :--- | | Net Cash from Operating Activities | 5,099 | 6,455 | (1,356) | | Net Cash Used in Investing Activities | (1,654) | (403) | (1,251) | | Net Cash Used in Financing Activities | (2,460) | (2,852) | 392 | | Net Increase in Cash and Cash Equivalents | 985 | 3,200 | (2,215) | | Cash and Cash Equivalents at End of Period | 18,959 | 12,425 | 6,534 | - Investing cash outflow increased primarily due to a significant rise in additions to property, plant and equipment, from **SGD 77 thousand** in the same period of 2024 to **SGD 1,591 thousand**[19](index=19&type=chunk) [Notes to the Unaudited Condensed Consolidated Interim Financial Statements](index=11&type=section&id=Notes%20to%20the%20Unaudited%20Condensed%20Consolidated%20Interim%20Financial%20Statements) This section provides detailed notes to the interim financial statements, covering general information, basis of preparation, revenue, expenses, and balance sheet items [1. General Information](index=11&type=section&id=1.%20General%20Information) This section introduces Meta Technologies Holdings Limited's registration, principal business activities (precision machining and welding services), listing date, and ultimate controlling parties - The company was incorporated in the Cayman Islands on **December 7, 2021**, primarily engaged in precision machining and welding services, and listed on GEM of the Stock Exchange on **July 2, 2024**[21](index=21&type=chunk) - The ultimate controlling parties are **Datuk Seri Chua Soo Lai** and **Mdm. Yeo Wee Kuan**, who are also directors of the Company[22](index=22&type=chunk) [2. Basis of Preparation](index=11&type=section&id=2.%20Basis%20of%20Preparation) This section explains that the interim financial statements are prepared in accordance with IFRS and GEM Listing Rules, with consistent accounting policies from the previous year - The unaudited condensed consolidated financial statements are prepared in accordance with International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board and the GEM Listing Rules, including disclosures required by International Accounting Standard 34 'Interim Financial Reporting'[25](index=25&type=chunk) - The accounting policies and methods of computation used in preparing the unaudited condensed consolidated interim financial statements for the six months ended June 30, 2025, are consistent with those adopted in the annual audited financial statements for the year ended December 31, 2024, with new standards and amendments not expected to have a significant impact[25](index=25&type=chunk) [3. Revenue and Segment Information](index=12&type=section&id=3.%20Revenue%20and%20Segment%20Information) This section details revenue by service category, customer segment, and geographical location, highlighting precision machining and the semiconductor industry as key growth drivers Revenue by Service Category (SGD thousand) | Service Category | June 30, 2025 | June 30, 2024 | Change | Growth Rate | | :--- | :--- | :--- | :--- | :--- | | Precision Machining | 13,240 | 8,133 | 5,107 | 62.79% | | Precision Welding | 11,526 | 10,465 | 1,061 | 10.14% | | **Total Revenue** | **24,766** | **18,598** | **6,168** | **33.16%** | Revenue by Customer Segment (SGD thousand) | Customer Segment | June 30, 2025 | June 30, 2024 | Change | Growth Rate | | :--- | :--- | :--- | :--- | :--- | | Semiconductor | 22,911 | 16,264 | 6,647 | 40.87% | | Aerospace | 1,214 | 1,766 | (552) | -31.26% | | Data Storage | 593 | 464 | 129 | 27.80% | Revenue by Geographical Location (SGD thousand) | Geographical Location | June 30, 2025 | June 30, 2024 | Change | Growth Rate | | :--- | :--- | :--- | :--- | :--- | | Singapore | 9,079 | 5,461 | 3,618 | 66.25% | | Malaysia | 10,758 | 8,253 | 2,505 | 30.35% | | United States | 2,794 | 2,882 | (88) | -3.05% | [4. Other Income](index=13&type=section&id=4.%20Other%20Income) This section discloses a 46.6% year-on-year decrease in other income, primarily due to reduced rental and service income following the expiry of agreements Other Income Details (SGD thousand) | Item | June 30, 2025 | June 30, 2024 | Change | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Rental Income | 370 | 651 | (281) | -43.16% | | Service Income | — | 566 | (566) | -100.00% | | Scrap Sales Income | 85 | 44 | 41 | 93.18% | | Government Grants | 43 | 43 | 0 | 0.00% | | Others | 268 | 131 | 137 | 104.58% | | **Total** | **766** | **1,435** | **(669)** | **-46.62%** | - The decrease in other income was primarily due to the expiry of rental and service agreements with independent third parties, which generated rental, storage, and pipe management service income in the prior period[67](index=67&type=chunk) [5. Other Gains / (Losses) - Net](index=14&type=section&id=5.%20Other%20Gains%20%2F%20(Losses)%20-%20Net) This section reports a net other loss of SGD 548 thousand for the period, primarily due to exchange losses, partially offset by a gain from equity dilution in an associate Other Gains/(Losses) - Net (SGD thousand) | Item | June 30, 2025 | June 30, 2024 | Change | | :--- | :--- | :--- | :--- | | Net Foreign Exchange (Loss)/Gain | (849) | 320 | (1,169) | | Gain on Disposal of Right-of-Use Assets | — | 55 | (55) | | Gain on Equity Dilution in an Associate | 301 | — | 301 | | **Total** | **(548)** | **375** | **(923)** | - For the six months ended June 30, 2025, the Group recorded a net exchange loss of approximately **SGD 849 thousand**, compared to a net exchange gain of approximately **SGD 320 thousand** for the six months ended June 30, 2024[32](index=32&type=chunk)[68](index=68&type=chunk) [6. Administrative Expenses](index=14&type=section&id=6.%20Administrative%20Expenses) This section discloses a 10.8% year-on-year decrease in administrative expenses, mainly due to the absence of listing expenses, partially offset by increased share-based payments and professional fees Administrative Expenses Details (SGD thousand) | Item | June 30, 2025 | June 30, 2024 | Change | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Wages and Salaries | 1,779 | 1,547 | 232 | 15.00% | | Share-based Payments | 979 | — | 979 | N/A | | Listing Expenses | — | 2,316 | (2,316) | -100.00% | | Professional Fees | 287 | 22 | 265 | 1204.55% | | **Total** | **5,102** | **5,717** | **(615)** | **-10.76%** | - The decrease in administrative expenses was mainly due to no listing expenses incurred for the six months ended June 30, 2025 (2024: approximately **SGD 2.3 million**), partially offset by share-based payments to employees of approximately **SGD 1.0 million** and an increase in professional fees of approximately **SGD 0.3 million**[69](index=69&type=chunk) [7. Profit Before Income Tax](index=15&type=section&id=7.%20Profit%20Before%20Income%20Tax) This section details employee costs and other items included in profit before tax, showing a significant increase in employee costs while depreciation remained relatively stable Employee Costs Included in Profit Before Tax (SGD thousand) | Item | June 30, 2025 | June 30, 2024 | Change | Growth Rate | | :--- | :--- | :--- | :--- | :--- | | Salaries, Wages and Other Benefits | 5,566 | 3,625 | 1,941 | 53.55% | | Defined Contribution Retirement Plan Contributions | 550 | 477 | 73 | 15.30% | | **Total Employee Costs** | **6,116** | **4,102** | **2,014** | **49.09%** | - Employee benefits expense recognized in profit or loss for the six months ended June 30, 2025, was **SGD 6,115 thousand**, a significant increase from **SGD 4,102 thousand** in the same period of 2024[36](index=36&type=chunk) [8. Income Tax Expense](index=15&type=section&id=8.%20Income%20Tax%20Expense) This section discloses a 24.96% year-on-year increase in income tax expense, primarily driven by a shift from deferred tax income to expense Income Tax Expense Details (SGD thousand) | Item | June 30, 2025 | June 30, 2024 | Change | Growth Rate | | :--- | :--- | :--- | :--- | :--- | | Current Tax | 567 | 714 | (147) | -20.59% | | Deferred Tax | 254 | (57) | 311 | N/A | | **Total Income Tax Expense** | **821** | **657** | **164** | **24.96%** | [9. Dividends](index=16&type=section&id=9.%20Dividends) This section states that the Board of Directors decided not to declare any interim dividend for the reporting period, consistent with the prior year - The Board of Directors did not declare any interim dividend for the six months ended June 30, 2025 (June 30, 2024: nil)[38](index=38&type=chunk) [10. Earnings Per Share](index=16&type=section&id=10.%20Earnings%20Per%20Share) This section discloses an increase in basic and diluted earnings per share from 1.70 Singapore cents to 2.10 Singapore cents, primarily due to higher profit for the period Earnings Per Share Data | Metric | June 30, 2025 | June 30, 2024 | Change | Growth Rate | | :--- | :--- | :--- | :--- | :--- | | Profit for the Period Attributable to Owners of the Company (SGD thousand) | 3,132 | 2,097 | 1,035 | 49.36% | | Weighted Average Number of Ordinary Shares (thousand shares) | 150,000 | 123,000 | 27,000 | 21.95% | | Basic and Diluted EPS (Singapore cents per share) | 2.10 | 1.70 | 0.40 | 23.53% | - Diluted earnings per share were the same as basic earnings per share, as there were no potentially dilutive ordinary shares outstanding during both periods[40](index=40&type=chunk) [11. Property, Plant and Equipment](index=17&type=section&id=11.%20Property%2C%20Plant%20and%20Equipment) This section discloses an increase in the carrying amount of property, plant and equipment, mainly due to additions during the period Carrying Amount of Property, Plant and Equipment (SGD thousand) | Date | Carrying Amount | | :--- | :--- | | June 30, 2025 (Unaudited) | 7,056 | | December 31, 2024 (Audited) | 5,900 | - Additions of **SGD 1,591 thousand** during the period were primarily for construction in progress[42](index=42&type=chunk) [12. Investment Properties](index=18&type=section&id=12.%20Investment%20Properties) This section discloses a slight decrease in the carrying amount of investment properties, primarily attributable to depreciation Carrying Amount of Investment Properties (SGD thousand) | Date | Carrying Amount | | :--- | :--- | | June 30, 2025 (Unaudited) | 513 | | December 31, 2024 (Audited) | 534 | - The Group's investment properties include a leasehold property located at **10B Enterprise Road, Singapore 629828**, accounted for at cost less accumulated depreciation and any impairment losses[44](index=44&type=chunk) [13. Right-of-Use Assets](index=19&type=section&id=13.%20Right-of-Use%20Assets) This section discloses a decrease in the carrying amount of right-of-use assets, primarily due to depreciation expenses during the period Carrying Amount of Right-of-Use Assets (SGD thousand) | Date | Carrying Amount | | :--- | :--- | | June 30, 2025 (Unaudited) | 24,869 | | December 31, 2024 (Audited) | 25,951 | - Depreciation expense for the period was **SGD 1,145 thousand**[46](index=46&type=chunk) [14. Intangible Assets](index=20&type=section&id=14.%20Intangible%20Assets) This section discloses a decrease in the carrying amount of intangible assets, primarily due to amortization expenses during the period Carrying Amount of Intangible Assets (SGD thousand) | Date | Carrying Amount | | :--- | :--- | | June 30, 2025 (Unaudited) | 1,849 | | December 31, 2024 (Audited) | 1,993 | - Amortization expense for the period was **SGD 144 thousand**[47](index=47&type=chunk) [15. Trade and Other Receivables](index=21&type=section&id=15.%20Trade%20and%20Other%20Receivables) This section discloses an increase in total trade and other receivables, mainly driven by higher trade receivables from third parties Trade and Other Receivables (SGD thousand) | Item | June 30, 2025 | December 31, 2024 | Change | Growth Rate | | :--- | :--- | :--- | :--- | :--- | | Non-current Amount Due from an Associate | 2,103 | 2,783 | (680) | -24.43% | | Current Trade Receivables from Third Parties | 9,957 | 7,504 | 2,453 | 32.69% | | **Total** | **11,392** | **8,955** | **2,437** | **27.21%** | Aging Analysis of Trade Receivables (SGD thousand) | Aging | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | 0 to 30 days | 6,573 | 5,084 | 1,489 | | 31 to 60 days | 2,075 | 2,000 | 75 | | 61 to 90 days | 569 | 374 | 195 | | Over 90 days | 740 | 46 | 694 | | **Total** | **9,957** | **7,504** | **2,453** | - Trade receivables aged over **90 days** significantly increased from **SGD 46 thousand** as of December 31, 2024, to **SGD 740 thousand** as of June 30, 2025[52](index=52&type=chunk) [16. Trade and Other Payables](index=22&type=section&id=16.%20Trade%20and%20Other%20Payables) This section discloses an increase in total trade and other payables, primarily due to higher trade payables to third parties Trade and Other Payables (SGD thousand) | Item | June 30, 2025 | December 31, 2024 | Change | Growth Rate | | :--- | :--- | :--- | :--- | :--- | | Current Trade Payables to Third Parties | 4,464 | 3,139 | 1,325 | 42.21% | | Current Non-trade Payables | 1,725 | 2,507 | (782) | -31.19% | | **Total** | **6,189** | **5,646** | **543** | **9.62%** | Aging Analysis of Trade Payables (SGD thousand) | Aging | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | 0 to 30 days | 3,405 | 1,360 | 2,045 | | 31 to 60 days | 615 | 1,209 | (594) | | 61 to 90 days | 192 | 260 | (68) | | Over 90 days | 252 | 310 | (58) | | **Total** | **4,464** | **3,139** | **1,325** | [17. Borrowings](index=23&type=section&id=17.%20Borrowings) This section discloses a decrease in total borrowings, mainly due to repayments of bank loans during the period Borrowings Details (SGD thousand) | Item | June 30, 2025 | December 31, 2024 | Change | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Current Bank Loans | 2,233 | 2,390 | (157) | -6.57% | | Non-current Bank Loans | 101 | 145 | (44) | -30.34% | | **Total** | **2,334** | **2,535** | **(201)** | **-7.93%** | - Outstanding bank borrowings bear interest at effective annual rates ranging from **3.42% to 5.75%**, denominated in Singapore Dollars or Malaysian Ringgit, and are repayable in monthly installments with maturities expected between **2025 and 2028**[73](index=73&type=chunk) [18. Share Capital](index=23&type=section&id=18.%20Share%20Capital) This section discloses that the company's share capital structure remained stable during the reporting period, with 150,000,000 ordinary shares issued Share Capital Structure (SGD thousand) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Authorized Share Capital (SGD thousand) | 172 | 172 | | Share Capital (SGD thousand) | 26 | 26 | | Share Premium (SGD thousand) | 8,327 | 8,327 | | **Total** | **8,353** | **8,353** | - As of June 30, 2025, the number of issued ordinary shares was **150,000,000** with a par value of **HKD 0.001**[57](index=57&type=chunk) - On July 2, 2024, the Company issued **27,000,000 ordinary shares** through a public offer and placing, and the Company's shares were listed on GEM of The Stock Exchange of Hong Kong Limited[59](index=59&type=chunk) [Management Discussion and Analysis](index=25&type=section&id=Management%20Discussion%20and%20Analysis) This section provides a comprehensive review of the company's business performance, financial results, liquidity, capital structure, and future strategies [Business Review](index=25&type=section&id=Business%20Review) As a precision engineering service provider, the company saw revenue growth in both precision machining and welding services, driven by increased demand in the semiconductor industry - For the six months ended June 30, 2025, revenue from precision machining services and precision welding services increased by approximately **SGD 5.1 million** and **SGD 1.1 million** respectively compared to the same period in 2024, primarily due to increased demand for related products and services in the semiconductor industry[62](index=62&type=chunk) - As of June 30, 2025, the Group's accumulated outstanding purchase orders were approximately **SGD 17.8 million**, compared to **SGD 17.2 million** as of June 30, 2024, reflecting stable demand and a robust pipeline of existing projects[63](index=63&type=chunk) [Future Outlook](index=25&type=section&id=Future%20Outlook) The company aims to consolidate its market position and achieve sustainable growth by deepening existing client relationships and expanding into new sectors like data storage, oil and gas, and aerospace - The Group's business objective is to provide first-class value in precision engineering based on trust, knowledge, innovation, and synergy, and to build mutually beneficial partnerships with clients[64](index=64&type=chunk) - The Group intends to consolidate its position in industries such as data storage, oil and gas, and aerospace by deepening cooperation with existing clients and identifying new clients and opportunities in module assembly and related services[64](index=64&type=chunk) - The Group actively evaluates its business strategies to optimize capital and resource utilization, thereby enhancing overall performance and continuing to seek diversification of revenue sources[64](index=64&type=chunk) [Financial Review](index=26&type=section&id=Financial%20Review) This section analyzes changes in revenue, cost of sales, other income, other gains/losses, administrative expenses, finance costs, and profit for the period, along with their key drivers - Revenue increased by **33.2%** from approximately **SGD 18.6 million** to approximately **SGD 24.8 million**, primarily due to increased demand in the semiconductor industry[65](index=65&type=chunk) - Cost of sales increased by **28.1%** from approximately **SGD 11.2 million** to approximately **SGD 14.4 million**, consistent with sales growth[66](index=66&type=chunk) - Other income decreased by **46.6%** from approximately **SGD 1.4 million** to approximately **SGD 0.8 million**, mainly due to the expiry of rental and service agreements[67](index=67&type=chunk) - A net other loss of approximately **SGD 0.5 million** was recorded, compared to a net gain of approximately **SGD 0.4 million** in the prior period, primarily due to exchange losses, partially offset by a gain from equity dilution in an associate[68](index=68&type=chunk) - Administrative expenses decreased by **10.8%** from approximately **SGD 5.7 million** to approximately **SGD 5.1 million**, mainly due to the absence of listing expenses, partially offset by increased share-based payments and professional fees[69](index=69&type=chunk) - Finance costs increased by **108.0%** from approximately **SGD 0.6 million** to approximately **SGD 1.3 million**, primarily due to the recognition of discounting of receivables from an associate[70](index=70&type=chunk) - Profit for the period increased from approximately **SGD 2.1 million** in the same period of 2024 to approximately **SGD 3.1 million** in the same period of 2025[72](index=72&type=chunk) [Liquidity, Financial Resources, and Capital Structure](index=27&type=section&id=Liquidity%2C%20Financial%20Resources%2C%20and%20Capital%20Structure) The company's capital structure has remained stable since its listing, with funding needs met through cash, operating cash flow, borrowings, and share offer proceeds, maintaining a low gearing ratio - The Company's shares were successfully listed on GEM of the Stock Exchange on July 2, 2024, and the Group's capital structure has not undergone any significant changes since then[73](index=73&type=chunk) Cash and Bank Balances vs. Borrowings (SGD thousand) | Metric | June 30, 2025 | December 31, 2024 | Change | Growth Rate | | :--- | :--- | :--- | :--- | :--- | | Cash and Bank Balances | 19,000 | 18,000 | 1,000 | 5.56% | | Total Borrowings | 2,300 | 2,500 | (200) | -8.00% | - The Group's gearing ratio was approximately **5.3%** as of June 30, 2025 (December 31, 2024: **6.4%**), indicating reduced financial leverage[74](index=74&type=chunk) - For the six months ended June 30, 2025, capital expenditure primarily stemmed from renovation costs of approximately **SGD 1.4 million** incurred to support the Group's expansion plans[75](index=75&type=chunk) [Issue of Shares and Use of Proceeds from Share Offer](index=28&type=section&id=Issue%20of%20Shares%20and%20Use%20of%20Proceeds%20from%20Share%20Offer) This section details the net proceeds from the July 2024 GEM listing and their allocation towards expanding operations, enhancing quality control, increasing marketing efforts, and repaying bank borrowings - The Company's shares have been listed on GEM of the Stock Exchange since July 2, 2024, raising approximately **HKD 65.34 million** (net proceeds of approximately **SGD 1,878 thousand**) through the share offer[79](index=79&type=chunk)[80](index=80&type=chunk) Use of Net Proceeds from Share Offer (SGD thousand) | Purpose | Actual Total Net Proceeds | Approximate Percentage of Total Net Proceeds | Amount Actually Utilized as of June 30, 2025 | Net Proceeds Unutilized as of June 30, 2025 | Expected Date of Full Utilization | | :--- | :--- | :--- | :--- | :--- | :--- | | Expand operational scale and enhance production capacity | 1,129 | 60.1% | 510 | 619 | 2026年6月30日 | | Strengthen quality control capabilities | 289 | 15.4% | 64 | 225 | 2025年12月31日 | | Increase marketing efforts | 88 | 4.7% | 32 | 56 | 2026年6月30日 | | Repay certain bank borrowings for general working capital | 184 | 9.8% | 184 | — | N/A | | Working capital and general corporate purposes | 188 | 10.0% | 98 | 90 | 2026年6月30日 | | **Total** | **1,878** | **100%** | **888** | **990** | | - As of June 30, 2025, **SGD 888 thousand** has been utilized, with the remaining **SGD 990 thousand** placed in short-term interest-bearing accounts with licensed commercial banks and/or other authorized financial institutions[80](index=80&type=chunk)[81](index=81&type=chunk) - Actual implementation plans include procuring raw materials, hiring CNC programmers and production planners, improving remuneration for existing employees, conducting marketing activities, and maintaining the company website[84](index=84&type=chunk) [Pledge of Group Assets](index=30&type=section&id=Pledge%20of%20Group%20Assets) This section discloses that the company's freehold land and investment properties are pledged as collateral for term loan facilities - As of June 30, 2025, freehold land and buildings with a carrying amount of approximately **SGD 1.2 million** and investment properties of **SGD 513 thousand** were pledged as collateral for term loan facilities[85](index=85&type=chunk) [Foreign Exchange Risk Management](index=30&type=section&id=Foreign%20Exchange%20Risk%20Management) This section discloses the company's exposure to currency risk primarily from USD-denominated transactions, with no current hedging policy but close monitoring by management - The Group's transactional currency risk arises from sales or purchases denominated in currencies other than the Group's functional currency, primarily USD[86](index=86&type=chunk) - The Group currently has no foreign currency hedging policy as it considers foreign exchange risk not significant. However, management will continue to closely monitor the Group's foreign exchange exposure and consider hedging significant risks when necessary[86](index=86&type=chunk) [Employees and Remuneration Policy](index=30&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the company increased its employee headcount and staff costs, focusing on attracting and retaining talent through competitive remuneration and training - As of June 30, 2025, the Group employed a total of **189 employees** (December 31, 2024: **179 employees**)[89](index=89&type=chunk) - For the six months ended June 30, 2025, staff costs were approximately **SGD 5.1 million** (six months ended June 30, 2024: **SGD 4.1 million**), including directors' emoluments but excluding share-based payments[89](index=89&type=chunk) - The Group regularly reviews remuneration packages and provides training to employees to attract and retain competent staff and enhance the knowledge base of its workforce[89](index=89&type=chunk)[90](index=90&type=chunk) [Other Information](index=31&type=section&id=Other%20Information) This section covers various corporate governance and disclosure items, including directors' and substantial shareholders' interests, share option scheme, connected transactions, and compliance matters [Directors' and Chief Executive's Interests in Shares](index=31&type=section&id=Directors'%20and%20Chief%20Executive's%20Interests%20in%20Shares) This section discloses the long positions of directors, chief executive, and their associates in the company's ordinary shares and associated corporations' shares Directors' and Chief Executive's Long Positions in Company Shares (as of June 30, 2025) | Director/Chief Executive Name | Total Shares Held/Interested In | Percentage of Total Issued Shares | | :--- | :--- | :--- | | Chua Soo Lai | 79,677,814 | 53.12% | | Yeo Wee Kuan | 79,677,814 | 53.12% | | Soh Chin Yew | 7,405,369 | 4.94% | | Cheng Chang Kim | 12,299,998 | 8.20% | | Ang Yong Seng | 80,000 | 0.05% | - **Datuk Seri Chua Soo Lai** and **Mdm. Yeo Wee Kuan** indirectly hold substantial shares through their wholly-owned controlled corporations, **SGP Capital Holdings Limited** and **Baccini Capital Holdings Limited**[93](index=93&type=chunk) [Substantial Shareholders' Interests in Shares](index=32&type=section&id=Substantial%20Shareholders'%20Interests%20in%20Shares) This section discloses the long positions of substantial shareholders, other than directors and the chief executive, in the company's shares Substantial Shareholders' Long Positions in Company Shares (as of June 30, 2025) | Substantial Shareholder Name/Entity | Capacity/Nature of Interest | Number of Shares Held/Interested In | Percentage of Total Issued Shares | | :--- | :--- | :--- | :--- | | SGP BVI | Beneficial Interest | 56,272,335 | 37.51% | | Baccini | Beneficial Interest | 22,373,479 | 14.92% | | Angelling | Beneficial Interest | 12,299,998 | 8.20% | [Share Option Scheme](index=33&type=section&id=Share%20Option%20Scheme) This section discloses the adoption of a share option scheme on June 7, 2024, with no options granted or outstanding as of the reporting date - The Company adopted a share option scheme on **June 7, 2024**, with terms complying with Chapter 23 of the GEM Listing Rules[98](index=98&type=chunk) - The Company has not granted any share options during the period or since the adoption of the scheme, and there were no outstanding share options as of June 30, 2025[99](index=99&type=chunk) [Connected Transactions and Related Party Transactions](index=33&type=section&id=Connected%20Transactions%20and%20Related%20Party%20Transactions) This section discloses connected transactions, specifically the purchase of goods and services from Metasurface & Co, confirming compliance with GEM Listing Rules Connected Transactions Details (SGD thousand) | Transacting Party | Transaction Type | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | :--- | | **Metasurface & Co** | Purchase of Goods and Services | 155 | 110 | | Metaoptics Technologies | Apportionment of Administrative Fees | — | 3 | - The Group has complied with the disclosure requirements of Chapter 20 of the GEM Listing Rules[100](index=100&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Shares](index=34&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company's%20Listed%20Shares) This section reports that neither the company nor its subsidiaries purchased, redeemed, or sold any of its listed securities or treasury shares during the reporting period - For the six months ended June 30, 2025, neither the Company nor any of its subsidiaries purchased, redeemed, or sold any of the Company's listed securities or treasury shares[105](index=105&type=chunk) [Directors' Securities Transactions](index=34&type=section&id=Directors'%20Securities%20Transactions) This section discloses the company's adoption of the required standard for directors' securities transactions, with all directors confirming compliance during the reporting period - The Company has adopted the required standard for securities transactions by directors as set out in Rules 5.48 to 5.67 of the GEM Listing Rules[107](index=107&type=chunk) - Each director confirmed compliance with the required standard during the six months ended June 30, 2025[107](index=107&type=chunk) [Corporate Governance Practices](index=34&type=section&id=Corporate%20Governance%20Practices) This section discloses the company's commitment to corporate governance, noting the combined roles of Chairman and CEO, and the Audit Committee's review of interim financial statements - The Company's corporate governance practices are formulated based on the principles and code provisions set out in the Corporate Governance Code ('CG Code') in Appendix C1 Part 2 of the GEM Listing Rules[113](index=113&type=chunk) - The roles of Chairman and Chief Executive Officer are combined and held by **Datuk Seri Chua Soo Lai**, an arrangement the Board believes benefits the Group's management and aligns with the overall interests of the Company and its shareholders[115](index=115&type=chunk) - The Audit Committee, together with management, has reviewed the Group's accounting principles and practices, as well as this report and the Group's unaudited condensed consolidated interim financial statements for the six months ended June 30, 2025[116](index=116&type=chunk) [Events After Reporting Period](index=35&type=section&id=Events%20After%20Reporting%20Period) This section discloses that no significant events occurred after June 30, 2025, up to the report date, that would materially affect the group's financial position or future operations - No significant events occurred from June 30, 2025, up to the date of this report that could materially affect the Group's assets, liabilities, or future operations[117](index=117&type=chunk)

Executive Summary The group's key financial and operational data for the six months ended June 30, 2025, shows a decline in property sales and deliveries, increased loss attributable to owners, and a higher net equity gearing ratio. | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Property Sales (including JVs and associates) | RMB 5.232 billion | RMB 7.304 billion | | Property Deliveries (including JVs and associates) | RMB 6.367 billion | RMB 22.135 billion | | Indonesian Toll Road Project Toll Revenue | HKD 878 million | HKD 919 million | | Loss Attributable to Company Owners | HKD 2.034 billion | HKD 1.027 billion | | Total Assets (June 30 / December 31) | HKD 53.329 billion | HKD 57.513 billion | | Equity Attributable to Company Owners (June 30 / December 31) | HKD 9.183 billion | HKD 10.815 billion | | Net Asset Value Per Share Attributable to Company Owners (June 30 / December 31) | HKD 12.25 | HKD 14.43 | | Net Equity Gearing Ratio (June 30 / December 31) | 63% | 55% | [Performance](index=2&type=section&id=Performance) The group's financial performance for the period reflects a significant decline in revenue, expanded gross loss, and a doubling of loss attributable to company owners. [Condensed Consolidated Statement of Profit or Loss](index=2&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) For the six months ended June 30, 2025, the group experienced a substantial revenue decrease, expanded gross loss, and a doubled loss attributable to company owners, leading to a significant increase in basic loss per share. Condensed Consolidated Statement of Profit or Loss Key Data | Indicator | H1 2025 (HKD thousands) | H1 2024 (HKD thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 1,784,898 | 3,468,218 | -48.5% | | Cost of Sales | (2,481,116) | (3,831,805) | -35.2% | | Gross Loss | (696,218) | (363,587) | +91.5% | | (Loss) Profit Before Tax | (1,597,589) | 37,334 | Not Applicable | | Loss for the Period | (1,590,215) | (393,508) | +304.1% | | Loss Attributable to Company Owners | (2,034,386) | (1,026,865) | +98.1% | | Basic Loss Per Share | (HKD 2.71) | (HKD 1.37) | +97.8% | [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=3&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) The group's total comprehensive expense for the period significantly increased, primarily due to an expanded loss for the period, despite an improvement in exchange differences. Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income Key Data | Indicator | H1 2025 (HKD thousands) | H1 2024 (HKD thousands) | | :--- | :--- | :--- | | Loss for the Period | (1,590,215) | (393,508) | | Exchange Differences Arising from Translation of Overseas Operations | 217 | (187,062) | | Exchange Differences Arising from Translation to Presentation Currency | 4,793 | (353,424) | | Total Comprehensive Expense for the Period | (1,585,701) | (932,682) | | Total Comprehensive (Expense) Income Attributable to Company Owners for the Period | (2,029,802) | (1,462,090) | [Condensed Consolidated Statement of Financial Position](index=4&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the group's total assets and equity attributable to company owners decreased, while the net equity gearing ratio rose, indicating financial pressure. Condensed Consolidated Statement of Financial Position Key Data | Indicator | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | Total Assets | 53,329,055 | 57,513,135 | | Non-Current Assets | 21,941,752 | 22,936,711 | | Current Assets | 31,387,303 | 34,576,424 | | Total Equity | 19,169,339 | 20,900,179 | | Equity Attributable to Company Owners | 9,182,835 | 10,815,447 | | Total Liabilities | 34,159,716 | 36,612,956 | | Non-Current Liabilities | 14,052,302 | 14,350,791 | | Current Liabilities | 20,107,414 | 22,262,165 | - The **net equity gearing ratio** increased from **55%** as of December 31, 2024, to **63%** as of June 30, 2025[2](index=2&type=chunk) [Notes to the Condensed Consolidated Financial Statements](index=6&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) This section details the accounting policies, going concern assumptions, and specific financial statement items, highlighting the group's financial challenges and reporting basis. [1. Basis of Preparation](index=6&type=section&id=1.%20Basis%20of%20Preparation) The condensed consolidated financial statements are prepared in accordance with HKAS 34 "Interim Financial Reporting" and Listing Rules disclosure requirements, primarily on a historical cost basis. - These condensed consolidated financial statements are prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" issued by the Hong Kong Institute of Certified Public Accountants and the applicable disclosure requirements of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[7](index=7&type=chunk) - These condensed consolidated financial statements are prepared on the historical cost basis, except for investment properties and certain financial instruments which are measured at fair value[12](index=12&type=chunk) [Going Concern](index=6&type=section&id=Going%20Concern) The group faces significant going concern uncertainties due to suspended interest payments on certain senior notes and offshore bank borrowings, potentially triggering accelerated debt repayment, despite management's restructuring and asset realization plans. - The group recorded a **loss of HKD 1,590,215 thousand** and a **net operating cash outflow of HKD 367,900 thousand** for the six months ended June 30, 2025[8](index=8&type=chunk) - The group has suspended interest payments totaling **USD 23.36 million** (equivalent to **HKD 181.742 million**) on two senior notes and offshore bank borrowings[8](index=8&type=chunk) - This suspension may lead to immediate repayment demands for approximately **USD 1,529.082 million** (equivalent to **HKD 11.894686 billion**) in offshore bank borrowings and senior notes[8](index=8&type=chunk) - The group has formulated various plans and measures to improve liquidity and cash flow, including a financial restructuring plan and the realization of designated assets[9](index=9&type=chunk)[10](index=10&type=chunk) - The group's ability to continue as a going concern depends on successfully negotiating a financial restructuring plan with offshore creditors and finding buyers for designated assets[11](index=11&type=chunk)[14](index=14&type=chunk) [2. Significant Accounting Policies](index=7&type=section&id=2.%20Significant%20Accounting%20Policies) During the interim period, the group adopted revised HKFRS standards, which had no significant impact on its financial position or performance. - During the interim period, the group first applied the revised Hong Kong Financial Reporting Standards (HKFRS) accounting standards issued by the Hong Kong Institute of Certified Public Accountants, which are mandatorily effective for annual periods beginning on January 1, 2025[13](index=13&type=chunk) - The application of these revised HKFRS accounting standards did not have a significant impact on the group's financial position and performance for the current and prior periods, and/or on the disclosures contained in these condensed consolidated financial statements[13](index=13&type=chunk) [3. Revenue](index=8&type=section&id=3.%20Revenue) The group's total revenue significantly decreased in the first half of 2025, primarily driven by a substantial reduction in property sales revenue and a decline in commercial rental and other income. Group Total Revenue Composition | Revenue Category | H1 2025 (HKD thousands) | H1 2024 (HKD thousands) | | :--- | :--- | :--- | | Property Sales and Services Revenue | 1,682,334 | 3,340,666 | | Commercial Rental and Other Income | 102,564 | 127,552 | | **Group Total Revenue** | **1,784,898** | **3,468,218** | | Group's Share of Revenue from Property Joint Ventures and Associates | 2,559,449 | 7,001,562 | | Group's Share of Toll Revenue from Infrastructure Joint Operations/Ventures | 357,677 | 671,222 | | **Group Revenue and Group's Share of Revenue from Joint Operations/Ventures and Associates** | **4,702,024** | **11,141,002** | Revenue from Customer Contracts by Goods and Services Category | Goods and Services Category | H1 2025 (HKD thousands) | H1 2024 (HKD thousands) | | :--- | :--- | :--- | | Property Sales | 1,293,923 | 2,932,810 | | Property Management and Services Revenue | 388,411 | 407,856 | | **Total** | **1,682,334** | **3,340,666** | [4. Segment Information](index=9&type=section&id=4.%20Segment%20Information) The group's main operating segments include property development and investment, toll roads, and industrial investment and asset management, with property development showing a significantly expanded loss and toll road profit sharply declining in H1 2025. - The group's main operating segments are property development and investment, toll roads, and industrial investment and asset management[18](index=18&type=chunk) Segment (Loss) Profit | Segment | H1 2025 (HKD thousands) | H1 2024 (HKD thousands) | | :--- | :--- | :--- | | Property Development and Investment | (1,067,702) | (936,873) | | Toll Roads | 95,624 | 1,689,555 | | Industrial Investment and Asset Management | (594,329) | (1,104,818) | | **Total** | **(1,566,407)** | **(352,136)** | Total Segment Assets | Segment | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | Property Development and Investment | 43,127,962 | 46,656,622 | | Toll Roads | 4,455,913 | 4,468,757 | | Industrial Investment and Asset Management | 5,501,802 | 6,023,059 | | **Total Segment Assets** | **53,085,677** | **57,148,438** | [5. Other Gains and Losses](index=12&type=section&id=5.%20Other%20Gains%20and%20Losses) Total other gains and losses significantly decreased in H1 2025, mainly due to reduced impairment losses on loans receivable and investment property fair value changes, and a shift from net exchange loss to gain. Other Gains and Losses | Item | H1 2025 (HKD thousands) | H1 2024 (HKD thousands) | | :--- | :--- | :--- | | Net Exchange Gain (Loss) | 1,227 | (299,338) | | Gain on Repurchase of Senior Notes | – | 344,175 | | Gain on Disposal of Interest in a Joint Venture | 17,316 | – | | Impairment Loss on Loans Receivable | (96,567) | (639,984) | | Impairment Loss on Amounts Due from Joint Ventures | (268,240) | (176,489) | | Fair Value Change of Investment Properties | (209,970) | (284,848) | | **Total** | **(557,612)** | **(1,105,037)** | [6. Gain on Disposal of a Subsidiary](index=12&type=section&id=6.%20Gain%20on%20Disposal%20of%20a%20Subsidiary) In the first half of 2024, the group recognized a pre-tax gain of HKD 1,862,976 thousand from the disposal of its interest in Road King (China) Infrastructure Limited, with no such gain in H1 2025. - On November 17, 2023, the group entered into a sale and purchase agreement to dispose of its interest in Road King (China) Infrastructure Limited to an independent third party for a consideration of **RMB 4.4118 billion** (equivalent to **HKD 4.902 billion**)[24](index=24&type=chunk) Gain on Disposal of a Subsidiary | Item | 2024 (HKD thousands) | | :--- | :--- | | Cash Consideration | 4,902,000 | | Net Assets Disposed | (2,998,204) | | Direct Transaction Costs and Fees | (40,820) | | **Pre-tax Gain on Disposal** | **1,862,976** | | Income Tax Expense | (372,511) | | **Net After-tax Gain on Disposal** | **1,490,465** | - There was no gain on disposal of subsidiaries in the first half of 2025[3](index=3&type=chunk) [7. Share of Profits of Joint Operations/Ventures](index=13&type=section&id=7.%20Share%20of%20Profits%20of%20Joint%20Operations%2FVentures) The group's share of profits from joint operations/ventures significantly decreased in H1 2025, primarily due to a reduction in profits from infrastructure joint operations/ventures. Share of Profits of Joint Operations/Ventures | Item | H1 2025 (HKD thousands) | H1 2024 (HKD thousands) | | :--- | :--- | :--- | | Share of Profits of Infrastructure Joint Operations/Ventures (before amortization and tax) | 191,365 | 420,165 | | Less: Share of Amortization of Toll Road Operating Rights | (29,753) | (75,560) | | Less: Share of Income Tax (Expense) Credit | (30,846) | 13,097 | | Share of Profits of Property and Other Joint Ventures | 154,399 | 96,607 | | **Total** | **285,165** | **454,309** | [8. Finance Costs](index=14&type=section&id=8.%20Finance%20Costs) Group finance costs decreased in H1 2025, mainly attributable to lower interest on borrowings and reduced capitalization of borrowing costs for properties under development for sale. Finance Costs Composition | Item | H1 2025 (HKD thousands) | H1 2024 (HKD thousands) | | :--- | :--- | :--- | | Interest on Borrowings | 440,434 | 657,473 | | Interest on Lease Liabilities | 310 | 617 | | Other Interest and Finance Charges | 23,052 | 66,237 | | **Subtotal** | **463,796** | **724,327** | | Less: Capitalized as Cost of Properties Under Development for Sale | (159,515) | (290,255) | | **Total** | **304,281** | **434,072** | [9. (Loss) Profit Before Tax](index=14&type=section&id=9.%20%28Loss%29%20Profit%20Before%20Tax) The group recorded a significant pre-tax loss in H1 2025, a stark contrast to the pre-tax profit in the prior year, primarily due to a substantial increase in property inventory costs, including impairment. - Pre-tax (loss) profit shifted from a **profit of HKD 37,334 thousand** in H1 2024 to a **loss of HKD 1,597,589 thousand** in H1 2025[3](index=3&type=chunk) - Property inventory costs recognized as expense (including property inventory impairment) were **HKD 2,047,080 thousand** (H1 2024: HKD 3,390,921 thousand), with property inventory impairment increasing from **HKD 110,865 thousand** to **HKD 472,103 thousand**[27](index=27&type=chunk) [10. Income Tax Credit (Expense)](index=15&type=section&id=10.%20Income%20Tax%20Credit%20%28Expense%29) The group recorded an income tax credit in H1 2025, compared to an expense in the prior year, mainly due to a shift to a land appreciation tax credit in China and a significant reduction in corporate income tax expense. Current Period Tax | Tax Category | H1 2025 (HKD thousands) | H1 2024 (HKD thousands) | | :--- | :--- | :--- | | Hong Kong Profits Tax | 253 | 1,468 | | China Corporate Income Tax | 120,540 | 409,665 | | China Land Appreciation Tax | (123,523) | 49,240 | | Withholding Tax | 21,202 | 64,685 | | **Subtotal** | **18,472** | **525,058** | | Deferred Tax | (25,846) | (94,216) | | **Total** | **(7,374)** | **430,842** | - The 2024 first half corporate income tax included an income tax expense of **HKD 372,511 thousand** from the disposal of mainland toll road projects[28](index=28&type=chunk) [11. Dividends Paid](index=15&type=section&id=11.%20Dividends%20Paid) The group did not declare or pay any interim dividends for the six-month periods ended June 30, 2025, and 2024. - The group did not pay any final dividends during the interim periods of 2025 and 2024[30](index=30&type=chunk) - The Board declared no interim dividends for the six months ended June 30, 2025, and 2024[30](index=30&type=chunk) [12. Loss Per Share](index=16&type=section&id=12.%20Loss%20Per%20Share) The group's basic loss per share significantly increased in H1 2025, with no dilutive potential ordinary shares outstanding. Loss Per Share Calculation Data | Indicator | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Loss Attributable to Company Owners for Basic Loss Per Share (HKD thousands) | (2,034,386) | (1,026,865) | | Weighted Average Number of Ordinary Shares for Basic Loss Per Share (thousands of shares) | 749,337 | 749,337 | | **Basic Loss Per Share** | **(HKD 2.71)** | **(HKD 1.37)** | - There were no dilutive potential ordinary shares outstanding for the six-month periods ended June 30, 2025, and 2024, hence no diluted loss per share is presented[31](index=31&type=chunk) [13. Trade and Other Receivables, Deposits and Prepayments](index=16&type=section&id=13.%20Trade%20and%20Other%20Receivables%2C%20Deposits%20and%20Prepayments) As of June 30, 2025, the group's total trade and other receivables, deposits, and prepayments slightly decreased, with the majority of trade receivables falling within 60 days aging. Trade and Other Receivables, Deposits and Prepayments | Item | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | Trade Receivables from Sales of Goods and Services to Customers | 175,963 | 138,893 | | Prepaid Land Development Costs | 536,481 | 536,481 | | Deposits Paid for Acquisition of Property Inventories | 377,449 | 385,036 | | Prepaid Value Added Tax and Other Taxes | 495,966 | 539,600 | | Other Receivables, Deposits and Prepayments | 704,759 | 707,959 | | **Total** | **2,395,538** | **2,398,980** | Aging Analysis of Trade Receivables | Aging | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | Within 60 days | 117,046 | 81,882 | | 61 to 90 days | 10,729 | 10,991 | | Over 90 days | 48,188 | 46,020 | [14. Trade and Other Payables and Accruals](index=17&type=section&id=14.%20Trade%20and%20Other%20Payables%20and%20Accruals) As of June 30, 2025, the group's total trade and other payables and accruals decreased, primarily due to reductions in accrued construction costs and trade payables. Trade and Other Payables and Accruals | Item | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | Trade Payables | 931,894 | 1,136,969 | | Accrued Construction Costs | 1,774,397 | 1,885,507 | | Accrued Taxes (excluding Corporate Income Tax and Land Appreciation Tax) | 230,639 | 227,583 | | Deposits Received for Property Sales | 124,275 | 265,201 | | Other Payables | 566,181 | 643,145 | | **Total** | **4,062,473** | **4,602,375** | [15. Total Assets Less Current Liabilities / Net Current Assets](index=17&type=section&id=15.%20Total%20Assets%20Less%20Current%20Liabilities%2FNet%20Current%20Assets) As of June 30, 2025, both the group's total assets less current liabilities and net current assets decreased. - As of June 30, 2025, the group's total assets less current liabilities were **HKD 33,221,641 thousand** (December 31, 2024: HKD 35,250,970 thousand)[34](index=34&type=chunk) - As of June 30, 2025, the group's net current assets were **HKD 11,279,889 thousand** (December 31, 2024: HKD 12,314,259 thousand)[34](index=34&type=chunk) [16. Events After the Reporting Period](index=17&type=section&id=16.%20Events%20After%20the%20Reporting%20Period) Subsequent to the reporting period, the group failed to obtain consent for its senior notes and decided to suspend principal and interest payments on all offshore bank borrowings, senior notes, and perpetual capital securities, potentially leading to accelerated repayment of approximately HKD 11.895 billion in debt. - On August 8, 2025, the group failed to obtain consent solicitation for its five senior notes due between 2028 and 2030[35](index=35&type=chunk) - The group decided to suspend payment of all principal and interest on all offshore bank borrowings, senior notes, and perpetual capital securities, with suspended interest totaling approximately **USD 23.36 million** (equivalent to **HKD 181.742 million**)[35](index=35&type=chunk) - This suspension may lead to accelerated repayment demands for approximately **USD 1,529.082 million** (equivalent to **HKD 11.894686 billion**) in offshore bank borrowings and senior notes[35](index=35&type=chunk) [Business Review](index=18&type=section&id=Business%20Review) This section provides an overview of the group's operational performance, market conditions, and strategic adjustments across its property, toll road, and other industrial segments. [First Half 2025 Performance](index=18&type=section&id=First%20Half%202025%20Performance) The group's H1 2025 saw significant declines in property sales and deliveries, a slight decrease in Indonesian toll road revenue, and a substantial expansion of both loss for the period and loss attributable to shareholders. H1 2025 Key Performance Indicators | Indicator | Amount | | :--- | :--- | | Property Sales (including JVs and associates) | RMB 5.232 billion (approx. 28% year-on-year decrease) | | Indonesian Toll Road Project Toll Revenue | HKD 878 million (approx. 4% year-on-year decrease) | | Loss for the Period | HKD 1.590 billion | | Loss Attributable to Shareholders | HKD 2.034 billion | | Loss Per Share | HKD 2.71 | | Net Asset Value Per Share | HKD 12.25 | [Business Highlights](index=18&type=section&id=Business%20Highlights) This section details the challenges in the property market, sales and delivery performance, land bank strategy, toll road business results, and the restructuring of other industrial businesses. [Property Market Overview](index=18&type=section&id=Property%20Market%20Overview) In H1 2025, the mainland property market continued its bottoming-out and recovery, with core cities' momentum weakening after a brief rebound, while third and fourth-tier cities remained under pressure despite government support policies. - In the first half of 2025, the mainland property market continued its bottoming-out and recovery trend, with core cities experiencing a weakening recovery momentum after a brief rebound, while third and fourth-tier cities remained under pressure from high inventory and falling home prices[38](index=38&type=chunk) - The government continued to introduce favorable policies, emphasizing "consolidating the stable trend of the real estate market" and "increasing the supply of high-quality housing," and proposing a "stop decline and stabilize" target, but market response was not active, and the policy effects and their sustainability were limited[38](index=38&type=chunk) - The Hong Kong property market, stimulated by interest rate cut expectations and government support policies, helped release short-term purchasing power, but the overall economic and market downturn still posed pressure on the property market[38](index=38&type=chunk) [Property Sales and Deliveries](index=19&type=section&id=Property%20Sales%20and%20Deliveries) Due to the ongoing market downturn, the group's H1 2025 property sales and deliveries significantly decreased, leading to a loss in the property segment. - The group achieved property sales (including joint ventures and associates) of **RMB 5.232 billion** in the first half of 2025, of which contracted sales amounted to **RMB 4.769 billion**[39](index=39&type=chunk) - The Guangdong-Hong Kong-Macao Greater Bay Area and the Yangtze River Delta region were the main sales areas, with an average selling price of **RMB 21,000 per square meter**[39](index=39&type=chunk) - Hong Kong projects completed total sales of **HKD 1.567 billion** and deliveries of **HKD 1.635 billion** in the first half of the year[39](index=39&type=chunk) - The group's mainland and Hong Kong property deliveries (including joint ventures and associates) totaled approximately **RMB 6.367 billion**, covering an area of approximately **0.27 million square meters**[39](index=39&type=chunk) - Affected by the continued sluggish property market and price reductions by competitors, the group's property sales volume and price both declined, leading to a **loss of HKD 1.068 billion** in the property segment during the period[39](index=39&type=chunk) [Land Bank](index=19&type=section&id=Land%20Bank) To preserve funds for debt repayment and operations, the group ceased land acquisitions in H1 2025, resulting in no new projects or land parcels, with a total land bank of approximately 2.36 million square meters. - To preserve funds for loan repayment and support the group's daily operations, the group ceased participating in land auctions and therefore did not acquire new projects or land parcels during the period[40](index=40&type=chunk) - As of June 30, 2025, the group's total land bank was approximately **2.36 million square meters**, of which **0.38 million square meters** had been sold but not yet delivered[40](index=40&type=chunk) [Toll Road Business](index=19&type=section&id=Toll%20Road%20Business) The group's Indonesian toll road project saw a slight increase in daily average traffic volume in H1 2025, but revenue decreased year-on-year due to the depreciation of the Indonesian Rupiah against the Hong Kong Dollar, and segment profit significantly declined due to prior year's one-off disposal gains and tax credits. - The group's Indonesian toll road project recorded a daily average mixed traffic volume of **91,100 vehicle trips**, a year-on-year increase of **1%**; toll revenue was **HKD 878 million**, a year-on-year decrease of **4%**[40](index=40&type=chunk) - The decrease in toll revenue was mainly due to the depreciation of the Indonesian Rupiah against the Hong Kong Dollar; excluding the impact of exchange rate fluctuations, toll revenue remained flat year-on-year[41](index=41&type=chunk) - The group's share of profit from the Indonesian toll road project joint venture was **HKD 131 million**, a decrease of **HKD 93 million** compared to the same period last year, mainly due to the recognition of a one-off deferred tax asset of approximately **HKD 100 million** for unused tax losses available to offset future profits in the prior period[41](index=41&type=chunk) - The toll road segment profit was **HKD 96 million**, a decrease of **HKD 1.594 billion** from **HKD 1.690 billion** in the same period last year, mainly due to the recognition of a one-off after-tax net gain of approximately **HKD 1.490 billion** from the disposal of mainland toll roads in the prior period[41](index=41&type=chunk) [Other Industrial Businesses](index=20&type=section&id=Other%20Industrial%20Businesses) Other industrial businesses (including property fund investments and cultural tourism) have undergone restructuring and consolidation, resulting in a significant reduction in scale, with non-core businesses closed and non-core assets sold. - Other original industrial businesses, mainly including property fund investments and cultural tourism businesses, have significantly reduced in scale after restructuring and consolidation[41](index=41&type=chunk) - Non-core businesses have been closed and non-core assets have been sold[41](index=41&type=chunk) [Financial Review](index=20&type=section&id=Financial%20Review) This section reviews the group's liquidity, financial resources, asset pledges, exchange rate and interest rate risks, financial guarantee contracts, and employee information. [Liquidity and Financial Resources](index=20&type=section&id=Liquidity%20and%20Financial%20Resources) The group's liquidity and financial resources continued to deteriorate, with a decrease in equity attributable to company owners and cash balances, an increase in net equity gearing ratio, and a suspension of offshore debt principal and interest payments, indicating ongoing debt and liquidity pressures. Liquidity and Financial Resources Key Data | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Equity Attributable to Company Owners | HKD 9.183 billion | HKD 10.815 billion | | Net Asset Value Per Share Attributable to Company Owners | HKD 12.25 | HKD 14.43 | | Bank Balances and Cash | HKD 3.084 billion | HKD 4.274 billion | | Net Equity Gearing Ratio | 63% | 55% | | Net Debt to Total Capital Ratio | 39% | Not Applicable | - The group has suspended payment of all due principal and interest on all offshore bank borrowings, notes, and perpetual securities[44](index=44&type=chunk) - The group anticipates facing continued debt and liquidity pressure in the future and will maintain cautious financial and treasury policies[43](index=43&type=chunk) [Pledged Assets](index=21&type=section&id=Pledged%20Assets) As of June 30, 2025, the group had HKD 40 million in bank balances and HKD 8.071 billion in properties pledged as collateral for loans, with certain borrowings also secured by equity interests in subsidiaries. - As of June 30, 2025, bank balances of **HKD 40 million** (December 31, 2024: HKD 421 million) were pledged to banks[45](index=45&type=chunk) - Properties with a book value of **HKD 8.071 billion** (December 31, 2024: HKD 9.493 billion) were also pledged as collateral for certain credit facilities[45](index=45&type=chunk) - As of June 30, 2025, borrowings with an outstanding principal amount of **HKD 456 million** (December 31, 2024: HKD 468 million) were secured by equity shares in certain subsidiaries of the company[45](index=45&type=chunk) [Exchange Rate Fluctuations and Interest Rate Risk](index=22&type=section&id=Exchange%20Rate%20Fluctuations%20and%20Interest%20Rate%20Risk) The group faces exchange rate risks from RMB and USD fluctuations and interest rate risks from RMB and USD denominated borrowings, which it will closely monitor and hedge as appropriate. - The group's borrowings are primarily denominated in Renminbi and US Dollars, while its cash flows mainly originate from Renminbi-denominated project income, thus exposing the group to exchange rate risks from fluctuations in Renminbi and US Dollars[46](index=46&type=chunk) - The group faces interest rate risk primarily from interest rate fluctuations related to its Renminbi and US Dollar denominated borrowings[46](index=46&type=chunk) - The group will continue to closely monitor these risks and implement hedging arrangements when appropriate and cost-effective[46](index=46&type=chunk) [Financial Guarantee Contracts](index=22&type=section&id=Financial%20Guarantee%20Contracts) As of June 30, 2025, the group provided HKD 3.387 billion in mortgage loan guarantees for property buyers and HKD 1.587 billion in financing guarantees for joint ventures. - As of June 30, 2025, the group provided guarantees to banks for mortgage loans granted to property buyers of the group's properties totaling **HKD 3.387 billion** (December 31, 2024: HKD 4.042 billion)[47](index=47&type=chunk) - As of June 30, 2025, the group also provided guarantees for financing granted by banks to joint ventures totaling **HKD 1.587 billion** (December 31, 2024: HKD 2.061 billion)[47](index=47&type=chunk) [Employees](index=22&type=section&id=Employees) As of June 30, 2025, the group had 3,458 employees, with staff costs of HKD 355 million, and provided various benefits. - The group had a total of **3,458 employees** as of June 30, 2025[48](index=48&type=chunk) - Staff costs (including staff seconded to or participating in joint operations/ventures and associates, but excluding directors' emoluments) amounted to **HKD 355 million**[48](index=48&type=chunk) - Employee remuneration is determined based on performance and contribution, with other employee benefits including provident funds, insurance, medical coverage, training programs, and share option schemes[48](index=48&type=chunk) [Outlook](index=23&type=section&id=Outlook) The group anticipates continued differentiated adjustments in the mainland property market, with core cities showing resilience, and expects further government policy support and improved financing conditions, while focusing on operational stability, optimizing toll road business, and actively pursuing offshore debt restructuring. - Looking ahead to the second half of the year, the mainland property market is expected to continue its differentiated adjustment trend, with core cities remaining resilient, but the overall market is still in a bottoming-out phase[49](index=49&type=chunk) - The central government is expected to introduce more incremental policies and promote the implementation of existing policies, while in terms of finance, the financing environment for property developers is expected to further improve, and mortgage rates may be moderately lowered to stimulate demand[49](index=49&type=chunk) - The group's property operations team will relentlessly ensure the stability of daily operations, guarantee timely property deliveries, and strictly control cash flow[50](index=50&type=chunk) - Regarding the toll road business, the group will continue to optimize its Indonesian toll road operations and proceed with the proposed sale of the Indonesian toll road[50](index=50&type=chunk) - For offshore debt, the group will actively explore solutions and, after consulting advisors, promptly initiate communication with creditors to seek support and cooperation from all creditors to protect the interests of Road King Company, all creditors, and other stakeholders[50](index=50&type=chunk) [Purchase, Sale or Redemption of the Group's Listed Securities](index=23&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Group%27s%20Listed%20Securities) Neither the company nor its subsidiaries purchased, sold, or redeemed any of the group's listed securities during the six months ended June 30, 2025. - Neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the group's listed securities during the six months ended June 30, 2025[51](index=51&type=chunk) [Review of Interim Results](index=24&type=section&id=Review%20of%20Interim%20Results) This section covers the audit committee's review of the interim financial statements and the independent auditor's disclaimer of conclusion due to significant uncertainties regarding the group's going concern. [Audit Committee Review](index=24&type=section&id=Audit%20Committee%20Review) The company's Audit Committee, in conjunction with the external auditor, reviewed the unaudited condensed consolidated financial statements for the six months ended June 30, 2025, including accounting principles and practices. - The company's Audit Committee, together with the company's external auditor, has reviewed the unaudited condensed consolidated financial statements for the six months ended June 30, 2025, and the accounting principles and practices adopted therein[52](index=52&type=chunk) [Extract from Review Report on Condensed Consolidated Financial Statements](index=24&type=section&id=Extract%20from%20Review%20Report%20on%20Condensed%20Consolidated%20Financial%20Statements) The independent auditor issued a disclaimer of conclusion on the condensed consolidated financial statements due to significant uncertainties regarding the group's going concern, stemming from failed senior note consent and suspended offshore debt payments, and insufficient evidence to assess management's plans. [Basis for Disclaimer of Conclusion](index=24&type=section&id=Basis%20for%20Disclaimer%20of%20Conclusion) The group's failure to obtain consent for senior notes and suspension of offshore debt payments, potentially triggering accelerated repayment of approximately HKD 11.895 billion, raises significant doubt about its going concern, and auditors could not obtain sufficient evidence to assess management's restructuring and asset realization plans. - On August 8, 2025, the group failed to obtain consent solicitation for its five senior notes due between 2028 and 2030 and decided to suspend payment of all principal and interest on all offshore bank borrowings, senior notes, and perpetual capital securities[53](index=53&type=chunk) - The group has suspended interest payments totaling **USD 23.36 million** (equivalent to **HKD 181.742 million**) on two senior notes and offshore bank borrowings, which may lead to immediate repayment demands for approximately **USD 1,529.082 million** (equivalent to **HKD 11.894686 billion**) in offshore debt[53](index=53&type=chunk) - The existence of these events or conditions may cast significant doubt on the group's ability to continue as a going concern[54](index=54&type=chunk) - The group has formulated various plans and measures to improve liquidity and cash flow, including a financial restructuring plan and the realization of designated assets, but the auditor was unable to obtain necessary and sufficient appropriate evidence to assess the likelihood of their successful implementation[54](index=54&type=chunk)[55](index=55&type=chunk) [Disclaimer of Conclusion](index=25&type=section&id=Disclaimer%20of%20Conclusion) Due to the inability to obtain sufficient appropriate evidence to assess the appropriateness of the going concern accounting basis and the adequacy of related disclosures, the auditor disclaims a conclusion on the condensed consolidated financial statements. - Due to the significance of the matters described in the "Basis for Disclaimer of Conclusion" section, the auditor was unable to obtain sufficient appropriate evidence to assess the appropriateness of the directors' use of the going concern accounting basis and the adequacy of related disclosures in the condensed consolidated financial statements, thereby forming a conclusion on the condensed consolidated financial statements[57](index=57&type=chunk) - Therefore, the auditor does not express a conclusion on these condensed consolidated financial statements[57](index=57&type=chunk) [Corporate Governance Code](index=26&type=section&id=Corporate%20Governance%20Code) The company complied with all applicable code provisions of the Corporate Governance Code during the six months ended June 30, 2025. - The company has complied with all applicable code provisions of the Corporate Governance Code set out in Appendix C1 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited throughout the six months ended June 30, 2025[59](index=59&type=chunk) [Publication of Interim Results and Interim Report](index=26&type=section&id=Publication%20of%20Interim%20Results%20and%20Interim%20Report) The interim results announcement is published on the company's and HKEXnews websites, with the full interim report to be published and distributed to shareholders as required. - This results announcement has been published on the company's website (www.roadking.com.hk) and the HKEXnews website (www.hkexnews.hk)[60](index=60&type=chunk) - The interim report, containing all relevant information required by the Listing Rules, will also be published on the aforementioned websites and distributed to the company's shareholders (if requested) in due course[60](index=60&type=chunk) [Acknowledgement](index=26&type=section&id=Acknowledgement) The Board expresses gratitude to business partners, customers, shareholders for their support, and to colleagues for their diligence. - On behalf of the Board, sincere thanks are extended to business partners, customers, and shareholders for their long-term support, and to colleagues for their diligence and hard work[61](index=61&type=chunk) [Board Information](index=26&type=section&id=Board%20Information) This section lists the current composition of the Board of Directors, including executive, non-executive, and independent non-executive directors. - As of the date of this announcement, the Board of Directors comprises Executive Directors Mr. Shan Weibiao, Mr. Fong Siu Leung, and Mr. Wu Kuan Hsiung[62](index=62&type=chunk) - Non-Executive Directors Ms. Cai Xun and Mr. Yuan Yang[62](index=62&type=chunk) - Independent Non-Executive Directors Mr. Wong Wai Ho, Mr. Cheung Hon Kit, Mr. Ho Tai Wai, and Ms. Lam Man Kuen[62](index=62&type=chunk)

[Company Announcements and Legal Disclaimers](index=1&type=section&id=公司公告及法律聲明) This section provides legal disclaimers, forward-looking statements, and essential company information including its board composition [Legal Disclaimers and Forward-Looking Statements](index=1&type=section&id=法律聲明與前瞻性陳述) This section outlines disclaimers from HKEX and SEHK, and clarifies forward-looking statements under the U.S. Private Securities Litigation Reform Act of 1995 - The announcement contains forward-looking statements protected by the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995, cautioning investors about inherent risks and uncertainties, and advising against over-reliance on Q2 results[4](index=4&type=chunk) [Company Information and Board Composition](index=1&type=section&id=公司基本信息與董事會構成) Tuya Inc., a Cayman Islands-registered limited liability company, is listed on HKEX (2391) and NYSE (TUYA), with a board composed of executive and independent non-executive directors - Tuya Inc. (Tuya Smart) is listed on the Hong Kong Stock Exchange (**2391**) and the New York Stock Exchange (**TUYA**), with a board comprising four executive directors and four independent non-executive directors[2](index=2&type=chunk)[3](index=3&type=chunk)[5](index=5&type=chunk) [Q2 2025 Performance Overview](index=3&type=section&id=2025年第二季度業績概覽) This section provides an overview of Tuya Inc.'s Q2 2025 financial and operational performance, highlighting key growth metrics and profitability improvements [Financial Highlights](index=3&type=section&id=財務摘要) Q2 2025 saw Tuya Inc.'s total revenue grow 9.3% to $80.1 million, with gross margin at 48.4%, operating profit of $1.1 million, and net profit of $12.6 million Q2 2025 Key Financial Metrics | Metric | Q2 2025 (million USD) | Q2 2024 (million USD) | YoY Growth/Improvement | | :--- | :--- | :--- | :--- | | Total Revenue | 80.1 | 73.3 | +9.3% | | PaaS Revenue | 58.1 | 54.3 | +7.0% | | SaaS and Other Revenue | 11.1 | 9.6 | +15.6% | | Smart Solutions Revenue | 10.9 | 9.4 | +16.7% | | Overall Gross Margin | 48.4% | 48.0% | +0.4 percentage points | | Operating Profit Margin | 1.4% | -14.1% | +15.5 percentage points | | Non-GAAP Operating Profit Margin | 10.7% | 10.0% | +0.7 percentage points | | Net Profit Margin | 15.7% | 4.3% | +11.4 percentage points | | Non-GAAP Net Profit Margin | 25.1% | 28.4% | -3.3 percentage points | | Net Profit | 12.6 | 3.1 | +302.4% | | Non-GAAP Net Profit | 20.1 | 20.8 | -3.4% | | Net Cash from Operating Activities | 18.2 | 11.8 | +53.8% | [Operational Highlights](index=4&type=section&id=經營摘要) Tuya achieved robust H1 2025 profitability and growth despite global uncertainties, with non-GAAP operating profit up 127% and AI developers exceeding 1.514 million - The company's H1 revenue grew approximately **15%** year-over-year, with non-GAAP operating profit increasing by approximately **127%** year-over-year, demonstrating business model resilience and effective operating leverage[12](index=12&type=chunk) - In Q2 2025, the total number of PaaS customers was approximately **2,100**, and total customers were approximately **3,000**, consistent with the prior year period[13](index=13&type=chunk) - As of June 30, 2025, the number of premium PaaS customers increased to **285** (from 280 in Q2 2024), contributing approximately **88.6%** of PaaS revenue (up from 84.8% in Q2 2024)[13](index=13&type=chunk) - As of June 30, 2025, registered AI developers exceeded **1,514,000**, a **15%** increase from December 31, 2024[13](index=13&type=chunk) [Detailed Financial Analysis for Q2 2025](index=5&type=section&id=2025年第二季度詳細財務分析) This section offers a detailed financial analysis of Tuya Inc.'s Q2 2025 performance, covering revenue, costs, gross profit, operating expenses, and net income [Revenue and Cost of Revenue](index=5&type=section&id=收入與營業成本) Q2 2025 total revenue grew 9.3% to $80.1 million, driven by PaaS, SaaS, and smart solutions, with cost of revenue increasing 8.7% to $41.4 million Q2 2025 Revenue and Cost of Revenue | Metric | Q2 2025 (million USD) | Q2 2024 (million USD) | YoY Change | | :--- | :--- | :--- | :--- | | Total Revenue | 80.1 | 73.3 | +9.3% | | Cost of Revenue | 41.4 | 38.1 | +8.7% | [Gross Profit and Gross Margins by Business Segment](index=5&type=section&id=毛利與各業務板塊毛利率) Q2 2025 total gross profit increased 10.1% to $38.7 million, with overall gross margin at 48.4%, and varied performance across business segments Q2 2025 Gross Profit and Gross Margins | Metric | Q2 2025 (million USD/%) | Q2 2024 (million USD/%) | YoY Change | | :--- | :--- | :--- | :--- | | Total Gross Profit | 38.7 | 35.2 | +10.1% | | Overall Gross Margin | 48.4% | 48.0% | +0.4 percentage points | | PaaS Gross Margin | 48.7% | 47.6% | +1.1 percentage points | | SaaS and Other Gross Margin | 72.0% | 71.0% | +1.0 percentage points | | Smart Solutions Gross Margin | 22.5% | 26.8% | -4.3 percentage points | - PaaS revenue grew **7.0%** to **$58.1 million**, driven by increased demand and strategic focus on customer needs and product enhancements; despite tariff-related headwinds, PaaS DBNER slowed from **127%** to **114%**[18](index=18&type=chunk) - SaaS and other revenue increased **15.6%** to **$11.1 million**, primarily due to increased cloud software product revenue[18](index=18&type=chunk) - Smart solutions revenue grew **16.7%** to **$10.9 million**, primarily driven by increased customer demand for smart devices with integrated intelligent software functionalities beyond IoT[18](index=18&type=chunk) [Operating Expense Analysis](index=6&type=section&id=營業費用分析) Q2 2025 operating expenses decreased **17.3%** to **$37.7 million**, driven by reduced share-based compensation and professional service costs across all categories Q2 2025 Operating Expenses | Metric | Q2 2025 (million USD) | Q2 2024 (million USD) | YoY Change | | :--- | :--- | :--- | :--- | | Total Operating Expenses | 37.7 | 45.5 | -17.3% | | Research and Development Expenses | 22.4 | 23.0 | -2.7% | | Sales and Marketing Expenses | 7.8 | 9.4 | -16.6% | | General and Administrative Expenses | 9.4 | 16.9 | -44.3% | - R&D expenses decreased primarily due to lower share-based compensation expenses, partially offset by increased cloud service costs and employee-related costs[22](index=22&type=chunk) - Sales and marketing expenses decreased primarily due to lower employee-related costs and share-based compensation expenses[22](index=22&type=chunk) - General and administrative expenses significantly decreased primarily due to lower share-based compensation expenses and reduced professional service costs[22](index=22&type=chunk) [Operating Profit and Net Profit](index=6&type=section&id=營業利潤與淨利潤) Q2 2025 saw a significant turnaround to **$1.1 million** operating profit, with net profit surging **302.4%** to **$12.6 million** and non-GAAP net profit at **$20.1 million** Q2 2025 Operating Profit and Net Profit | Metric | Q2 2025 (million USD/%) | Q2 2024 (million USD/%) | YoY Change | | :--- | :--- | :--- | :--- | | Operating Profit | 1.1 | -10.3 | Turned profitable | | Operating Profit Margin | 1.4% | -14.1% | +15.5 percentage points | | Non-GAAP Operating Profit | 8.6 | 7.4 | +16.2% | | Non-GAAP Operating Profit Margin | 10.7% | 10.0% | +0.7 percentage points | | Net Profit | 12.6 | 3.1 | +302.4% | | Net Profit Margin | 15.7% | 4.3% | +11.4 percentage points | | Non-GAAP Net Profit | 20.1 | 20.8 | -3.4% | | Non-GAAP Net Profit Margin | 25.1% | 28.4% | -3.3 percentage points | [Net Income Per American Depositary Share](index=7&type=section&id=每股美國存託股份淨利潤) Q2 2025 basic and diluted net income per ADS increased to **$0.02**, with non-GAAP basic and diluted net income per ADS at **$0.03** Q2 2025 Net Income Per American Depositary Share | Metric | Q2 2025 (USD) | Q2 2024 (USD) | YoY Change | | :--- | :--- | :--- | :--- | | Basic Net Income Per ADS | 0.02 | 0.01 | +0.01 | | Diluted Net Income Per ADS | 0.02 | 0.01 | +0.01 | | Non-GAAP Basic Net Income Per ADS | 0.03 | 0.04 | -0.01 | | Non-GAAP Diluted Net Income Per ADS | 0.03 | 0.04 | -0.01 | [Cash Flow and Cash Reserves](index=7&type=section&id=現金流與現金儲備) As of June 30, 2025, total cash reserves were **$1,006.3 million**, slightly down due to dividends, while net cash from operations grew **53.8%** to **$18.2 million** Cash and Cash Equivalents at End of Q2 2025 | Metric | As of June 30, 2025 (million USD) | As of December 31, 2024 (million USD) | | :--- | :--- | :--- | | Total Cash and Cash Equivalents, Time Deposits, and Treasury Bills | 1,006.3 | 1,016.7 | - Net cash from operating activities in Q2 2025 was **$18.2 million**, a **53.8%** year-over-year increase (from $11.8 million in Q2 2024), primarily due to working capital changes in the ordinary course of business[10](index=10&type=chunk)[26](index=26&type=chunk) [Business Outlook and Dividend Policy](index=7&type=section&id=業務展望與股息政策) This section outlines Tuya Inc.'s business outlook amidst global uncertainties and details the board's approved cash dividend declaration [Business Outlook](index=7&type=section&id=業務展望) Despite global trade and supply chain uncertainties, Tuya Inc. remains confident in its long-term business, focusing on enhancing AI capabilities, expanding its customer base, and optimizing efficiency - Uncertainties persist in the global trade environment and consumer electronics supply chain, yet the company observes active exploration and adoption of AI technologies and hardware by global enterprises and consumers[27](index=27&type=chunk) - The company remains confident in its long-term business prospects, committed to iterating and enhancing products and services, especially AI capabilities, expanding its core customer base, investing in innovation, diversifying revenue streams, and optimizing operational efficiency[27](index=27&type=chunk)[28](index=28&type=chunk) - Future development may face challenges including shifts in consumer spending patterns, regional economic disparities, inventory management, currency and interest rate fluctuations, new tariffs or trade barrier adjustments, and geopolitical uncertainties[28](index=28&type=chunk) [Cash Dividend Declaration](index=8&type=section&id=現金股息宣派) The Board approved a cash dividend of **$0.054** per ordinary share/ADS, totaling approximately **$33 million**, with record date September 11, 2025, and payment in October 2025 - The Board approved a cash dividend of **$0.054** per ordinary share or **$0.054** per American Depositary Share[29](index=29&type=chunk) - The total cash dividend is approximately **$33 million**, payable in USD cash from the company's remaining cash and share premium account[29](index=29&type=chunk) - The record date is the close of business on September 11, 2025, HKT/NYT; payment for ordinary shareholders is expected around October 13, 2025, and for ADS holders around October 20, 2025[29](index=29&type=chunk)[30](index=30&type=chunk) [Company Profile and Non-GAAP Measures Explanation](index=9&type=section&id=公司簡介與非GAAP指標說明) This section provides an overview of Tuya Inc., details its upcoming conference call, and explains the use and reconciliation of Non-GAAP financial measures [Conference Call and Investor Relations](index=9&type=section&id=電話會議與投資者關係) A conference call to discuss financial results is scheduled for August 26, 2025, ET, with online registration and investor relations contact information provided - The company will host a conference call to discuss financial results on Tuesday, August 26, 2025, at 8:30 PM Eastern Time[31](index=31&type=chunk) - A live webcast or replay of the conference call will be available on the company's investor relations website at https://ir.tuya.com[32](index=32&type=chunk) - Investor relations contacts include Tuya Inc. Investor Relations at ir@tuya.com and Haiyan LI-LABBE of HL Strategy at hl@hl-strategy.com[37](index=37&type=chunk) [About Tuya Inc.](index=9&type=section&id=Tuya%20Inc.%20公司簡介) Tuya Inc. is a leading global AI cloud platform provider, building an AI developer ecosystem and enabling smart everything through PaaS, SaaS, and smart solutions - Tuya Inc. is a leading global AI cloud platform service provider, with a mission to build an AI developer ecosystem and empower smart everything[33](index=33&type=chunk) - The company pioneered a dedicated AI cloud platform with cloud computing and generative AI capabilities, offering PaaS, SaaS, and smart solutions for smart devices, commercial applications, and industry developers[33](index=33&type=chunk) [Explanation of Non-GAAP Financial Measures](index=9&type=section&id=非公認會計準則財務指標說明) Non-GAAP financial measures, excluding share-based compensation and long-term investment impairment, are used to assess performance and plan business, reconciled to GAAP - The company uses Non-GAAP financial measures (such as Non-GAAP operating expenses, operating profit, net profit, and net profit per share) as supplementary indicators to evaluate operating performance and formulate business plans[34](index=34&type=chunk) - Non-GAAP financial measures exclude the impact of share-based compensation expenses and credit-related impairment of long-term investments on the respective GAAP financial measures[34](index=34&type=chunk) - Non-GAAP financial measures have limitations, may differ from non-GAAP data used by other companies, thus have limited comparability, and should be reconciled to the most directly comparable U.S. GAAP measures[35](index=35&type=chunk) [Safe Harbor Statement](index=10&type=section&id=安全港聲明) This press release contains forward-looking statements protected by the 1995 U.S. Private Securities Litigation Reform Act, involving inherent risks and uncertainties, with no obligation for public updates - The press release contains forward-looking statements protected by the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995, involving inherent risks and uncertainties[36](index=36&type=chunk) - The company is under no obligation to publicly update any forward-looking statements to reflect subsequent events or circumstances, and all forward-looking statements should be evaluated based on their inherent uncertainties[36](index=36&type=chunk) [Unaudited Condensed Consolidated Financial Statements](index=11&type=section&id=未經審計簡明合併財務報表) This section presents Tuya Inc.'s unaudited condensed consolidated financial statements, including balance sheets, comprehensive income, and cash flow statements [Consolidated Balance Sheets](index=11&type=section&id=合併資產負債表) As of June 30, 2025, total assets were **$1,104.118 million**, total liabilities **$93.734 million**, and shareholders' equity **$1,010.384 million** Unaudited Condensed Consolidated Balance Sheets (as of June 30, 2025) | Metric | As of December 31, 2024 (thousand USD) | As of June 30, 2025 (thousand USD) | | :--- | :--- | :--- | | **ASSETS** | | | | Total Current Assets | 903,016 | 896,603 | | Total Non-Current Assets | 200,764 | 207,515 | | **TOTAL ASSETS** | **1,103,780** | **1,104,118** | | **LIABILITIES** | | | | Total Current Liabilities | 94,337 | 91,612 | | Total Non-Current Liabilities | 1,995 | 2,122 | | **TOTAL LIABILITIES** | **96,332** | **93,734** | | **SHAREHOLDERS' EQUITY** | | | | Total Shareholders' Equity | 1,007,448 | 1,010,384 | | **TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY** | **1,103,780** | **1,104,118** | [Consolidated Statements of Comprehensive Income](index=13&type=section&id=合併綜合收益表) For Q2 2025, total revenue was **$80.130 million**, gross profit **$38.746 million**, and net profit **$12.587 million**, with H1 net profit at **$23.604 million** Unaudited Condensed Consolidated Statements of Comprehensive Income (for the three months ended June 30, 2025) | Metric | Q2 2025 (thousand USD) | Q2 2024 (thousand USD) | | :--- | :--- | :--- | | Revenue | 80,130 | 73,279 | | Cost of Revenue | (41,384) | (38,087) | | Gross Profit | 38,746 | 35,192 | | Total Operating Expenses | (37,658) | (45,536) | | Operating Profit/(Loss) | 1,088 | (10,344) | | Profit Before Income Tax | 13,222 | 3,720 | | Income Tax Expense | (635) | (592) | | Net Profit | 12,587 | 3,128 | Unaudited Condensed Consolidated Statements of Comprehensive Income (for the six months ended June 30, 2025) | Metric | H1 2025 (thousand USD) | H1 2024 (thousand USD) | | :--- | :--- | :--- | | Revenue | 154,817 | 134,941 | | Cost of Revenue | (79,820) | (70,264) | | Gross Profit | 74,997 | 64,677 | | Total Operating Expenses | (75,361) | (91,388) | | Operating Profit/(Loss) | (364) | (26,711) | | Profit Before Income Tax | 24,976 | 833 | | Income Tax Expense | (1,372) | (1,248) | | Net Profit | 23,604 | (415) | Share-based Compensation Expenses (Included in Operating Expenses) | Expense Category | Q2 2025 (thousand USD) | Q2 2024 (thousand USD) | | :--- | :--- | :--- | | Research and Development Expenses | 1,460 | 3,376 | | Sales and Marketing Expenses | 582 | 1,169 | | General and Administrative Expenses | 5,437 | 10,864 | [Consolidated Statements of Cash Flows](index=15&type=section&id=合併現金流量表) For Q2 2025, net cash from operating activities was **$18.191 million**, with net cash used in investing and financing activities, and period-end cash reserves at **$724.071 million** Unaudited Condensed Consolidated Statements of Cash Flows (for the three months ended June 30, 2025) | Metric | Q2 2025 (thousand USD) | Q2 2024 (thousand USD) | | :--- | :--- | :--- | | Net Cash from Operating Activities | 18,191 | 11,829 | | Net Cash from/(used in) Investing Activities | (21,215) | 73,890 | | Net Cash (used in)/from Financing Activities | (36,914) | (104) | | Cash and Cash Equivalents and Restricted Cash at Period-End | 724,071 | 614,919 | Unaudited Condensed Consolidated Statements of Cash Flows (for the six months ended June 30, 2025) | Metric | H1 2025 (thousand USD) | H1 2024 (thousand USD) | | :--- | :--- | :--- | | Net Cash from Operating Activities | 27,543 | 26,319 | | Net Cash from/(used in) Investing Activities | 79,968 | 90,085 | | Net Cash (used in)/from Financing Activities | (36,912) | 150 | | Cash and Cash Equivalents and Restricted Cash at Period-End | 724,071 | 614,919 | [Reconciliation of Non-GAAP Measures](index=16&type=section&id=非公認會計準則指標對賬) This section provides detailed reconciliations of GAAP financial measures to their Non-GAAP counterparts, including operating expenses, operating profit, and net profit [Reconciliation of Operating Expenses to Non-GAAP Operating Expenses](index=16&type=section&id=營業費用與非公認會計準則營業費用對賬) Q2 2025 adjusted R&D, sales & marketing, and G&A expenses were **$20.913 million**, **$7.243 million**, and **$3.922 million** respectively, primarily adjusted for share-based compensation Reconciliation of Operating Expenses to Non-GAAP Operating Expenses (for the three months ended June 30, 2025) | Metric | Q2 2025 (thousand USD) | Q2 2024 (thousand USD) | | :--- | :--- | :--- | | Research and Development Expenses (GAAP) | (22,373) | (22,993) | | Add: Share-based Compensation Expenses | 1,460 | 3,376 | | Adjusted Research and Development Expenses (Non-GAAP) | (20,913) | (19,617) | | Sales and Marketing Expenses (GAAP) | (7,825) | (9,387) | | Add: Share-based Compensation Expenses | 582 | 1,169 | | Adjusted Sales and Marketing Expenses (Non-GAAP) | (7,243) | (8,218) | | General and Administrative Expenses (GAAP) | (9,386) | (16,861) | | Add: Share-based Compensation Expenses | 5,437 | 10,864 | | Add: Credit-related Impairment of Long-term Investments | 27 | 189 | | Add: Litigation Expenses | – | 2,100 | | Adjusted General and Administrative Expenses (Non-GAAP) | (3,922) | (3,708) | [Reconciliation of Operating Profit to Non-GAAP Operating Profit](index=16&type=section&id=營業利潤與非公認會計準則營業利潤對賬) Q2 2025 Non-GAAP operating profit was **$8.594 million**, with a **10.7%** margin, adjusted for share-based compensation, long-term investment impairment, and litigation expenses Reconciliation of Operating Profit to Non-GAAP Operating Profit (for the three months ended June 30, 2025) | Metric | Q2 2025 (thousand USD/%) | Q2 2024 (thousand USD/%) | | :--- | :--- | :--- | | Operating Profit (GAAP) | 1,088 | (10,344) | | Add: Share-based Compensation Expenses | 7,479 | 15,409 | | Add: Credit-related Impairment of Long-term Investments | 27 | 189 | | Add: Litigation Expenses | – | 2,100 | | Non-GAAP Operating Profit | 8,594 | 7,354 | | Non-GAAP Operating Profit Margin | 10.7% | 10.0% | [Reconciliation of Net Profit to Non-GAAP Net Profit](index=17&type=section&id=淨利潤與非公認會計準則淨利潤對賬) Q2 2025 Non-GAAP net profit was **$20.093 million**, with a **25.1%** margin, adjusted for share-based compensation, long-term investment impairment, and litigation expenses Reconciliation of Net Profit to Non-GAAP Net Profit (for the three months ended June 30, 2025) | Metric | Q2 2025 (thousand USD/%) | Q2 2024 (thousand USD/%) | | :--- | :--- | :--- | | Net Profit (GAAP) | 12,587 | 3,128 | | Add: Share-based Compensation Expenses | 7,479 | 15,409 | | Add: Credit-related Impairment of Long-term Investments | 27 | 189 | | Add: Litigation Expenses | – | 2,100 | | Non-GAAP Net Profit | 20,093 | 20,826 | | Non-GAAP Net Profit Margin | 25.1% | 28.4% | Non-GAAP Net Income Per Share (for the three months ended June 30, 2025) | Metric | Q2 2025 (USD) | Q2 2024 (USD) | | :--- | :--- | :--- | | Non-GAAP Basic Net Income Per Share | 0.03 | 0.04 | | Non-GAAP Diluted Net Income Per Share | 0.03 | 0.04 |

Condensed Consolidated Financial Statements [Condensed Consolidated Statement of Profit or Loss](index=2&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) The company achieved significant growth in revenue and net profit for the six months ended June 30, 2025, driven by increased gold production and higher selling prices - Revenue increased by **82.02%** year-on-year, and profit for the period increased by **338.92%** year-on-year[4](index=4&type=chunk) Condensed Consolidated Statement of Profit or Loss Table | Indicator | For the six months ended June 30, 2025 (thousand RMB) | For the six months ended June 30, 2024 (thousand RMB) | | :--- | :--- | :--- | | Revenue | 7,792,736 | 4,281,228 | | Cost of sales | (6,654,557) | (3,873,542) | | Gross profit | 1,138,179 | 407,686 | | Operating profit | 947,985 | 256,570 | | Profit before tax | 879,939 | 182,511 | | Profit for the period | 670,041 | 152,658 | | Profit attributable to equity holders of the Company | 663,969 | 152,538 | | Basic and diluted earnings per share (RMB cents) | 52.33 | 12.54 | [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=3&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) Total comprehensive income for the period significantly increased, primarily due to a substantial rise in profit for the period, with other comprehensive income items also contributing - Total comprehensive income for the period increased by **364.09%** year-on-year[5](index=5&type=chunk) Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income Table | Indicator | For the six months ended June 30, 2025 (thousand RMB) | For the six months ended June 30, 2024 (thousand RMB) | | :--- | :--- | :--- | | Profit for the period | 670,041 | 152,658 | | Exchange differences arising from translation of financial statements of overseas subsidiaries | 985 | (7,522) | | Fair value changes of equity instruments at fair value through other comprehensive income | 2,544 | — | | Other comprehensive income for the period | 3,529 | (7,522) | | Total comprehensive income for the period | 673,570 | 145,136 | | Total comprehensive income attributable to equity holders of the Company | 666,725 | 146,257 | [Condensed Consolidated Statement of Financial Position](index=4&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the company's total assets and shareholders' equity increased, with net current assets turning positive, indicating improved liquidity - Net current assets improved significantly, from **negative 16,520 thousand RMB** at the end of 2024 to **positive 357,153 thousand RMB** in mid-2025[6](index=6&type=chunk) - Capital investments increased, with construction in progress rising from **404,065 thousand RMB** to **668,697 thousand RMB**, and intangible assets from **899,808 thousand RMB** to **1,050,122 thousand RMB**[6](index=6&type=chunk) Condensed Consolidated Statement of Financial Position Table | Indicator | As of June 30, 2025 (thousand RMB) | As of December 31, 2024 (thousand RMB) | | :--- | :--- | :--- | | Non-current assets | 4,570,026 | 4,206,351 | | Current assets | 4,481,195 | 3,008,793 | | Current liabilities | 4,124,042 | 3,025,313 | | Net current assets/(liabilities) | 357,153 | (16,520) | | Total assets less current liabilities | 4,927,179 | 4,189,831 | | Non-current liabilities | 986,659 | 1,031,647 | | Net assets | 3,940,520 | 3,158,184 | | Total equity attributable to equity holders of the Company | 4,161,263 | 3,385,772 | | Total equity | 3,940,520 | 3,158,184 | Notes to the Condensed Interim Financial Report [1 Basis of Preparation](index=6&type=section&id=1%20Basis%20of%20Preparation) This interim financial report is prepared in accordance with HKAS 34 and complies with HKEX Listing Rules, reviewed by the Audit Committee and authorized for issue - 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[8](index=8&type=chunk) - It adopts the historical cost basis and going concern basis, with the Board assessing the Group's ability to continue as a going concern[8](index=8&type=chunk) [2 Changes in Accounting Policies](index=6&type=section&id=2%20Changes%20in%20Accounting%20Policies) The Group has applied HKAS 21 (Amendment) "Lack of Exchangeability," which had no material impact on the results or financial position for the current or prior periods - Applied HKAS 21 (Amendment) "Lack of Exchangeability," with no material impact[10](index=10&type=chunk) [3 Segment Reporting](index=7&type=section&id=3%20Segment%20Reporting) The Group manages and reports its operations across four segments: mining (China), mining (Kyrgyzstan), smelting, and retail, all showing significant growth - The Group has four reportable segments: Mining—China, Mining—Kyrgyzstan, Smelting, and Retail[11](index=11&type=chunk)[12](index=12&type=chunk) Segment Revenue and Profit (For the six months ended June 30, 2025) Table | Segment | 2025 Revenue (thousand RMB) | 2024 Revenue (thousand RMB) | 2025 Profit (thousand RMB) | 2024 Profit (thousand RMB) | | :--- | :--- | :--- | :--- | :--- | | Mining—China | 1,614,816 | 706,577 | 949,664 | 267,377 | | Mining—Kyrgyzstan | 190,383 | 71,521 | 62,467 | 5,900 | | Smelting | 7,960,292 | 4,291,005 | 47,379 | (24,444) | | Retail | 7,425 | 4,995 | 283 | 61 | | Total reportable segments | 9,772,916 | 5,074,098 | 1,059,793 | 248,894 | | Consolidated Revenue | 7,792,736 | 4,281,228 | | | | Consolidated Profit Before Tax | | | 879,939 | 182,511 | [3(a) Segment Results, Assets and Liabilities](index=7&type=section&id=3(a)%20Segment%20Results,%20Assets%20and%20Liabilities) Both Mining (China) and Smelting segments achieved substantial growth in revenue and profit, with the Smelting segment turning profitable, indicating improved operational efficiency - Mining—China segment revenue increased by **128.56%**, and profit increased by **255.18%**[13](index=13&type=chunk) - Smelting segment revenue increased by **85.51%**, turning from a loss in the same period of 2024 to a profit of **47,379 thousand RMB** in 2025[13](index=13&type=chunk) [3(b) Reconciliation of Reportable Segment Revenue and Profit or Loss](index=8&type=section&id=3(b)%20Reconciliation%20of%20Reportable%20Segment%20Revenue%20and%20Profit%20or%20Loss) The reconciliation shows consolidated revenue of 7,792,736 thousand RMB and consolidated profit before tax of 879,939 thousand RMB after inter-segment eliminations, reflecting enhanced overall profitability - Inter-segment revenue eliminations amounted to **1,980,180 thousand RMB**, resulting in consolidated revenue of **7,792,736 thousand RMB**[14](index=14&type=chunk) - Inter-segment profit eliminations amounted to **6,148 thousand RMB**, resulting in consolidated profit before tax of **879,939 thousand RMB**[14](index=14&type=chunk) [4 Revenue](index=9&type=section&id=4%20Revenue) The Group's primary business involves the mining, beneficiation, smelting, and sale of gold and other metal products, with revenue primarily from gold sales showing significant growth - The main business involves the mining, beneficiation, smelting, and sale of gold and other metal products in China[15](index=15&type=chunk) - Revenue from gold sales increased by **84.25%** year-on-year, serving as the primary driver for total revenue growth[17](index=17&type=chunk) Revenue Breakdown by Major Product Line Table | Product Line | For the six months ended June 30, 2025 (thousand RMB) | For the six months ended June 30, 2024 (thousand RMB) | | :--- | :--- | :--- | | Sales of gold | 7,862,157 | 4,267,444 | | Sales of other metals | 101,258 | 81,098 | | Sales of jewelry | 5,613 | 2,347 | | Others | 2,416 | 4,535 | | Less: Sales tax and levies | (178,708) | (74,196) | | **Total Revenue** | **7,792,736** | **4,281,228** | [5 Profit Before Tax](index=10&type=section&id=5%20Profit%20Before%20Tax) Profit before tax increased, influenced by a decrease in finance costs, a significant reduction in net other losses, and an increase in government grants - Finance costs decreased by **8.12%** year-on-year[18](index=18&type=chunk) - Net other losses significantly reduced from **24,680 thousand RMB** to **1,626 thousand RMB**, primarily due to financial instruments at fair value through profit or loss turning from loss to gain[18](index=18&type=chunk) - Government grants increased by **92.02%**[18](index=18&type=chunk) Profit Before Tax Components Table | Item | For the six months ended June 30, 2025 (thousand RMB) | For the six months ended June 30, 2024 (thousand RMB) | | :--- | :--- | :--- | | Finance costs | 68,046 | 74,059 | | Net other losses | 1,626 | 24,680 | | Net (gain)/loss on financial instruments at fair value through profit or loss | (36,003) | 20,324 | | Government grants | (5,367) | (2,795) | | Bank interest income | (9,102) | (14,150) | [6 Income Tax in the Condensed Consolidated Statement of Profit or Loss](index=11&type=section&id=6%20Income%20Tax%20in%20the%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) Income tax expense significantly increased due to a substantial rise in profit for the period, with Chinese subsidiaries applying a 25% statutory rate and high-tech enterprises enjoying a 15% preferential rate - Income tax expense increased by **603.78%** year-on-year[20](index=20&type=chunk) - Chinese subsidiaries are subject to a **25%** statutory tax rate, while high-tech enterprises (e.g., Habahe Huatai Gold Co., Ltd.) enjoy a **15%** preferential tax rate[21](index=21&type=chunk) - The corporate income tax rate in Kyrgyzstan is **0%**[24](index=24&type=chunk) Income Tax Components Table | Item | For the six months ended June 30, 2025 (thousand RMB) | For the six months ended June 30, 2024 (thousand RMB) | | :--- | :--- | :--- | | Current tax — Provision for China income tax for the period | 195,173 | 43,449 | | Under/(over) provision in prior years | 14,991 | (19,335) | | Deferred tax | (266) | 5,739 | | **Total Income Tax** | **209,898** | **29,853** | [7 Earnings Per Share](index=11&type=section&id=7%20Earnings%20Per%20Share) Basic earnings per share significantly increased, reflecting the company's enhanced profitability, with diluted EPS being the same due to no dilutive potential ordinary shares - Basic earnings per share increased by **317.31%** year-on-year[22](index=22&type=chunk) - The weighted average number of ordinary shares outstanding increased from **1,216,246,829** to **1,268,710,862** shares[22](index=22&type=chunk) Earnings Per Share Table | Indicator | For the six months ended June 30, 2025 (RMB cents) | For the six months ended June 30, 2024 (RMB cents) | | :--- | :--- | :--- | | Basic earnings per share | 52.33 | 12.54 | | Diluted earnings per share | 52.33 | 12.54 | [8 Property, Plant and Equipment and Construction in Progress](index=12&type=section&id=8%20Property,%20Plant%20and%20Equipment%20and%20Construction%20in%20Progress) The Group's investments in property, plant and equipment and construction in progress significantly increased, reflecting its strategy to expand production capacity and infrastructure - Acquisitions/additions of property, plant and equipment increased by **97.43%** year-on-year[25](index=25&type=chunk) - Additions to construction in progress increased by **49.65%** year-on-year[25](index=25&type=chunk) - Disposal of property, plant and equipment resulted in a loss of **3,922 thousand RMB**, compared to a gain of **873 thousand RMB** in the prior period[25](index=25&type=chunk) Property, Plant and Equipment and Construction in Progress Changes Table | Item | Acquisitions/Additions for the six months ended June 30, 2025 (thousand RMB) | Acquisitions/Additions for the six months ended June 30, 2024 (thousand RMB) | | :--- | :--- | :--- | | Property, plant and equipment | 19,939 | 10,099 | | Construction in progress | 309,987 | 207,136 | [9 Intangible Assets](index=12&type=section&id=9%20Intangible%20Assets) The Group's investments in exploration and evaluation assets and mining rights substantially increased, highlighting its focus on future resource reserves and production capacity - Additions to mining rights significantly increased from zero in the prior period to **157,297 thousand RMB**[26](index=26&type=chunk) - Of the total intangible asset acquisitions at period-end, **124,056 thousand RMB** remained unpaid and recognized as other payables[26](index=26&type=chunk) Intangible Assets Additions Table | Item | Additions for the six months ended June 30, 2025 (thousand RMB) | Additions for the six months ended June 30, 2024 (thousand RMB) | | :--- | :--- | :--- | | Exploration and evaluation assets | 25,863 | 25,706 | | Mining rights | 157,297 | 0 | [10 Inventories](index=12&type=section&id=10%20Inventories) Total inventories increased, primarily due to growth in gold concentrate, doré, and gold bar inventories, reflecting enhanced production volumes - Total inventories increased by **11.11%** compared to the end of 2024[27](index=27&type=chunk) - The carrying amount of inventories sold increased from **3,872,711 thousand RMB** to **6,653,504 thousand RMB**, and inventory write-downs increased from **831 thousand RMB** to **1,053 thousand RMB**[28](index=28&type=chunk) Inventories Components Table | Item | As of June 30, 2025 (thousand RMB) | As of December 31, 2024 (thousand RMB) | | :--- | :--- | :--- | | Gold ore | 70,391 | 68,182 | | Gold concentrate and doré | 1,122,674 | 1,026,615 | | Gold bars | 480,114 | 410,385 | | By-products | 28,985 | 24,564 | | Spare parts and consumables | 112,193 | 103,219 | | **Total Inventories** | **1,814,357** | **1,632,965** | [11 Trade and Other Receivables](index=13&type=section&id=11%20Trade%20and%20Other%20Receivables) Total trade and other receivables significantly increased, mainly due to substantial growth in purchase deposits and prepayments, reflecting business expansion and increased supply chain activities - Total trade and other receivables increased by **99.40%** year-on-year[29](index=29&type=chunk) - Purchase deposits (net of provision for irrecoverable amounts) significantly increased from **46,478 thousand RMB** to **362,717 thousand RMB**[29](index=29&type=chunk) - Prepayments increased from **131,872 thousand RMB** to **387,635 thousand RMB**[29](index=29&type=chunk) Trade and Other Receivables Components Table | Item | As of June 30, 2025 (thousand RMB) | As of December 31, 2024 (thousand RMB) | | :--- | :--- | :--- | | Trade and bills receivables (net of loss allowance) | 161,718 | 193,477 | | Other receivables (net of loss allowance) | 36,031 | 102,970 | | Purchase deposits (net of provision for irrecoverable amounts) | 362,717 | 46,478 | | Prepayments | 387,635 | 131,872 | | **Total** | **949,630** | **476,258** | [12 Cash and Cash Equivalents and Restricted Cash](index=14&type=section&id=12%20Cash%20and%20Cash%20Equivalents%20and%20Restricted%20Cash) Total cash and cash equivalents and restricted cash significantly increased, reflecting enhanced liquidity, with restricted cash growth primarily from pledged deposits for letters of credit and bank acceptance bills - Total cash and cash equivalents and restricted cash increased by **82.84%** year-on-year[30](index=30&type=chunk) - Pledged deposits for bank acceptance bills significantly increased from **250,000 thousand RMB** to **685,000 thousand RMB**[30](index=30&type=chunk) Cash and Restricted Cash Components Table | Item | As of June 30, 2025 (thousand RMB) | As of December 31, 2024 (thousand RMB) | | :--- | :--- | :--- | | Cash at bank and in hand | 435,835 | 279,985 | | Restricted cash — Pledged deposits for letters of credit | 350,000 | 265,000 | | Restricted cash — Pledged deposits for bank acceptance bills | 685,000 | 250,000 | | Restricted cash — Security deposits for environmental governance | 18,084 | 27,820 | | Restricted cash — Others | 155,872 | 76,765 | | **Total** | **1,644,791** | **899,570** | [13 Bank Borrowings](index=15&type=section&id=13%20Bank%20Borrowings) Total bank borrowings increased, with short-term borrowings accounting for the largest proportion, and secured borrowings significantly rising, reflecting the company's ability to obtain financing using assets - Total bank borrowings increased by **28.47%** year-on-year[32](index=32&type=chunk) - Secured bank borrowings increased by **100.97%** from **515,000 thousand RMB** to **1,035,000 thousand RMB**[33](index=33&type=chunk) Carrying Amount of Bank Borrowings Table | Item | As of June 30, 2025 (thousand RMB) | As of December 31, 2024 (thousand RMB) | | :--- | :--- | :--- | | Short-term bank borrowings | 2,928,781 | 2,081,810 | | Long-term bank borrowings | 468,700 | 562,700 | | **Total Bank Borrowings** | **3,397,481** | **2,644,510** | Bank Borrowings Collateralization Table | Collateral Type | As of June 30, 2025 (thousand RMB) | As of December 31, 2024 (thousand RMB) | | :--- | :--- | :--- | | Secured | 1,035,000 | 515,000 | | Guaranteed | 389,105 | 783,680 | | Unsecured | 1,973,376 | 1,345,830 | | **Total** | **3,397,481** | **2,644,510** | [14 Trade and Other Payables](index=17&type=section&id=14%20Trade%20and%20Other%20Payables) Total trade and other payables significantly increased, influenced by payables for mining rights, exploration rights, and dividends to shareholders, reflecting business expansion and dividend policy changes - Total current trade and other payables increased by **33.89%** year-on-year[34](index=34&type=chunk) - Payables for mining rights significantly increased from **8,460 thousand RMB** to **87,949 thousand RMB**[34](index=34&type=chunk) - New payables for exploration rights amounted to **35,787 thousand RMB**[34](index=34&type=chunk) - New dividends payable to equity holders of the Company amounted to **95,572 thousand RMB**[34](index=34&type=chunk) Trade and Other Payables Components Table | Item | As of June 30, 2025 (thousand RMB) | As of December 31, 2024 (thousand RMB) | | :--- | :--- | :--- | | Total trade payables | 477,512 | 464,901 | | Other payables and accrued expenses | 321,861 | 283,981 | | Payables for mining rights | 87,949 | 8,460 | | Payables for exploration rights | 35,787 | — | | Dividends payable to equity holders of the Company, net of withholding tax | 95,572 | — | | **Total Current Trade and Other Payables** | **1,046,938** | **781,947** | | Total Non-current Other Payables | 511,662 | 451,993 | [15 Share Capital and Reserves](index=18&type=section&id=15%20Share%20Capital%20and%20Reserves) The Group's share capital increased through H share issuance and conversion of domestic shares to H shares, with the Board proposing an interim dividend reflecting improved profitability and shareholder returns - On January 23, 2025, **385,578,033** domestic shares were converted into H shares[38](index=38&type=chunk) - On March 18, 2025, **43,500,000** H shares were issued, raising net proceeds of approximately **211,724 thousand RMB**[38](index=38&type=chunk) - The Board recommended an interim dividend of **RMB 0.164** per share (nil for the same period in 2024), totaling **211,064 thousand RMB**[39](index=39&type=chunk) Share Capital Changes Table | Item | As of December 31, 2024 (Total Shares) | As of June 30, 2025 (Total Shares) | | :--- | :--- | :--- | | Total registered, issued and fully paid shares | 1,243,476,055 | 1,286,976,055 | | Share capital amount (thousand RMB) | 248,695 | 257,395 | Business Review and Outlook [Overall Performance Overview](index=20&type=section&id=Overall%20Performance%20Overview) In H1 2025, the Group achieved record high gold ingot production and revenue, with net profit significantly increasing due to efficient production, capacity release, and rising gold prices - Gold ingot production was approximately **10,821 kg** (approximately **347,884 ounces**), an increase of approximately **2,870 kg** (approximately **92,286 ounces**) year-on-year[41](index=41&type=chunk) - Revenue was approximately **7,792,736 thousand RMB**, an increase of approximately **82.02%** year-on-year[41](index=41&type=chunk) - Net profit was approximately **670,041 thousand RMB**, a year-on-year increase of **338.92%**[41](index=41&type=chunk) - Basic earnings per share were **RMB 0.52**, a year-on-year increase of **300%**[41](index=41&type=chunk) - As of June 30, 2025, the Group held **37** mining and exploration rights, covering an area of **216.04 square kilometers**, with total gold reserve resources of approximately **128.50 tons** (**4,131,365 ounces**)[41](index=41&type=chunk) [1. Mining Segment](index=20&type=section&id=1.%20Mining%20Segment) The mining segment achieved substantial growth in both revenue and profit, primarily driven by increased production capacity, improved beneficiation recovery rates, and higher gold prices in China and Kyrgyzstan - The mining business primarily sells gold concentrate and doré, with most sales being inter-group[42](index=42&type=chunk) [Revenue and Production](index=21&type=section&id=Revenue%20and%20Production) Total revenue for the mining segment increased by 132.00% year-on-year, with significant increases in gold concentrate and doré production, attributed to improved mine production levels and rising gold prices - Total revenue for the mining segment was approximately **1,805,199 thousand RMB**, an increase of approximately **132.00%** year-on-year[43](index=43&type=chunk) - Gold concentrate production increased by approximately **1,043 kg** to **2,499 kg**, and doré production increased by approximately **38 kg** to **386 kg**[43](index=43&type=chunk) Mining Segment Production and Sales Volume Table | Product | Unit | 2025 Production Volume | 2025 Sales Volume | 2024 Production Volume | 2024 Sales Volume | | :--- | :--- | :--- | :--- | :--- | :--- | | Gold concentrate (contained gold) | kg | 2,499 | 2,514 | 1,456 | 1,378 | | Doré | kg | 386 | 386 | 348 | 347 | | Total | kg | 2,884 | 2,900 | 1,805 | 1,725 | | Total | ounces | 92,731 | 93,243 | 58,022 | 55,465 | [Segment Performance](index=22&type=section&id=Segment%20Performance) Total profit for the mining segment increased by 270.37% year-on-year, mainly due to enhanced beneficiation capacity, cost reduction, and efficiency improvements in China, along with increased production and refined management in Kyrgyzstan - Total profit for the mining segment was approximately **1,012,131 thousand RMB**, an increase of approximately **270.37%** year-on-year[44](index=44&type=chunk)[45](index=45&type=chunk) - Profit from mining in China was approximately **949,664 thousand RMB**, an increase of approximately **255.18%** year-on-year[44](index=44&type=chunk) - Profit from mining in Kyrgyzstan significantly increased year-on-year to approximately **62,467 thousand RMB**[44](index=44&type=chunk) - The ratio of mining business segment performance to segment revenue was approximately **56.07%**, up from **35.12%** in the prior period[44](index=44&type=chunk) [2. Smelting Segment](index=23&type=section&id=2.%20Smelting%20Segment) The smelting segment turned profitable with a substantial increase in total revenue, driven by higher mining segment output, increased doré production, rising prices of precious metals and sulfuric acid, and enhanced cost control - The smelting plant is located in Henan Province and can comprehensively recover gold, silver, copper products, and sulfuric acid[46](index=46&type=chunk) [Sales and Production](index=23&type=section&id=Sales%20and%20Production) Total revenue for the smelting segment increased by 85.51% year-on-year, primarily influenced by increased output from the mining segment and higher doré production - Total revenue for the smelting segment was approximately **7,960,292 thousand RMB**, an increase of approximately **85.51%** year-on-year[47](index=47&type=chunk) - Gold ingot production from processing externally purchased doré increased from **3,148 kg** to **6,224 kg**, a growth of **97.71%**[46](index=46&type=chunk) Smelting Segment Production and Sales Volume Table | Product | Unit | 2025 Production Volume | 2025 Sales Volume | 2024 Production Volume | 2024 Sales Volume | | :--- | :--- | :--- | :--- | :--- | :--- | | Gold ingot (processed from gold concentrate) | kg | 4,597 | 4,617 | 4,802 | 4,795 | | Gold ingot (processed from externally purchased doré) | kg | 6,224 | 6,225 | 3,148 | 3,119 | | Silver | kg | 4,442 | 4,313 | 4,785 | 4,860 | | Copper products | ton | 845 | 829 | 775 | 792 | | Sulfuric acid | ton | 39,346 | 38,851 | 53,165 | 51,597 | [Segment Performance](index=24&type=section&id=Segment%20Performance) The smelting segment successfully turned a loss into a profit of 47,379 thousand RMB, primarily due to capitalizing on rising precious metal and sulfuric acid prices, alongside enhanced cost control and management - The smelting segment recorded a profit of **47,379 thousand RMB**, compared to a loss of approximately **24,444 thousand RMB** in the prior period[48](index=48&type=chunk) - Profitability was mainly attributed to seizing opportunities from rising precious metal and sulfuric acid prices, and strengthening cost control and production organization[48](index=48&type=chunk) [Consolidated Operating Results](index=24&type=section&id=Consolidated%20Operating%20Results) The Group's consolidated revenue and gross profit significantly increased, with a notable improvement in gross profit margin, driven by higher output of externally purchased doré and mining segment, rising prices, and improved profitability across segments [Revenue](index=24&type=section&id=Revenue) The Group's total revenue increased by 82.02% year-on-year, primarily driven by a substantial increase in gold ingot sales, with gold concentrate sales also growing significantly - Gold ingot sales increased by **83.94%** year-on-year, and gold concentrate sales increased by **91.19%** year-on-year[49](index=49&type=chunk) - The average selling price of gold ingots increased by **34.25%** from **RMB 517,812/kg** to **RMB 695,176/kg**[49](index=49&type=chunk) Sales Analysis by Product Category Table | Product Name | 2025 Amount (thousand RMB) | 2025 Sales Volume | 2025 Average Selling Price per Unit (RMB/kg or ton) | 2024 Amount (thousand RMB) | 2024 Sales Volume | 2024 Average Selling Price per Unit (RMB/kg or ton) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Gold ingot | 7,537,559 | 10,842 kg | 695,176 | 4,097,968 | 7,914 kg | 517,812 | | Silver | 31,393 | 4,313 kg | 7,278 | 29,642 | 4,860 kg | 6,099 | | Copper products | 56,541 | 829 tons | 68,217 | 51,456 | 792 tons | 64,970 | | Sulfuric acid | 13,324 | 38,851 tons | 343 | 2,419 | 51,597 tons | 47 | | Gold concentrate | 324,016 | 471 kg | 687,208 | 169,476 | 332 kg | 510,470 | | Others | 8,611 | | | 4,463 | | | | **Revenue Before Tax** | **7,971,444** | | | **4,355,424** | | | | Less: Sales tax and surcharges | (178,708) | | | (74,196) | | | | **Total Revenue** | **7,792,736** | | | **4,281,228** | | | [Gross Profit and Gross Profit Margin](index=25&type=section&id=Gross%20Profit%20and%20Gross%20Profit%20Margin) The Group's gross profit and gross profit margin significantly improved, primarily due to increased gross profit from Nanshan Branch, Xingyuan Company, Fujin Company, and the smelting segment turning profitable - Gross profit increased by **179.19%** year-on-year, and gross profit margin improved by **5.09** percentage points[50](index=50&type=chunk) Gross Profit and Gross Profit Margin Table | Indicator | H1 2025 (thousand RMB) | H1 2024 (thousand RMB) | | :--- | :--- | :--- | | Gross profit | 1,138,179 | 407,686 | | Gross profit margin | 14.61% | 9.52% | [Review of H1 2025](index=25&type=section&id=Review%20of%20H1%202025) In H1 2025, the Group achieved record high total revenue and net profit by focusing on cost control, efficiency, quality, and capacity expansion, capitalizing on high gold prices, and making significant progress in production, technology, management, digitalization, ESG, and internationalization - Total revenue and net profit reached new historical highs, laying a solid foundation for a new round of development[51](index=51&type=chunk) [Efficient and Orderly Production Organization, Smooth Progress of Key Projects](index=25&type=section&id=(%E4%B8%80)%20Efficient%20and%20Orderly%20Production%20Organization,%20Smooth%20Progress%20of%20Key%20Projects) In H1, the Group accelerated production, with major units like Fujin, Xingyuan, and Nanshan Branch making smooth progress in mining, infrastructure, and beneficiation plant construction, while the smelting green upgrade project entered trial operation and the new materials industrial park refinery topped out - Fujin Company rationally allocated mining faces, increasing daily ore output and grade[51](index=51&type=chunk) - Xingyuan Company added **23** mining points, continuously increasing average daily ore output[51](index=51&type=chunk) - Nanshan Branch efficiently advanced infrastructure, development, and production exploration projects, accelerating the construction of Baihua beneficiation plant and tailings pond[51](index=51&type=chunk) - The smelting branch's green upgrade project was successfully completed and entered trial operation[51](index=51&type=chunk) - The first phase of the Lingbao Gold New Materials Industrial Park refinery topped out, entering the equipment installation and commissioning phase[51](index=51&type=chunk) [Dual-Track Drive of Technological Transformation and Operational Optimization for Cost Reduction and Efficiency Improvement](index=26&type=section&id=(%E4%BA%8C)%20Dual-Track%20Drive%20of%20Technological%20Transformation%20and%20Operational%20Optimization%20for%20Cost%20Reduction%20and%20Efficiency%20Improvement) The Group achieved cost reduction and efficiency improvement through technological transformation and operational optimization, including Huatai Company's introduction of mechanized mining equipment, Xingyuan Company's innovative tailings disposal, and the smelting branch's personnel optimization and competitive mechanisms - Huatai Company introduced new semi-automatic mechanized mining equipment, increasing grinding capacity from **1,800 tons/day** to **2,200 tons/day**, a **22.2%** increase[52](index=52&type=chunk) - Huatai Company optimized the high-pressure water pump power distribution system modification plan, saving approximately **10 million RMB** in equipment investment[52](index=52&type=chunk) - Xingyuan Company completed the online auction and disposal of **950,000 tons** of tailings, extending the service life of the tailings pond[52](index=52&type=chunk) - The smelting branch's labor costs decreased by **6.62 million RMB** year-on-year, iron-silicon slag disposal costs decreased by **6.10 million RMB** year-on-year, and sulfuric acid sales net profit increased by **9.38 million RMB** in H1[52](index=52&type=chunk) - Various mines re-evaluated and adjusted industrial grades to increase resource volume and maximize resource recovery[52](index=52&type=chunk) [Orderly Advancement of Internal Reforms, Continuous Improvement in Refined Management](index=26&type=section&id=(%E4%B8%89)%20Orderly%20Advancement%20of%20Internal%20Reforms,%20Continuous%20Improvement%20in%20Refined%20Management) The Group deepened internal reforms by establishing a specialized geological exploration company, setting up an engineering management team, advancing salary reforms, streamlining structures, and successfully recruiting 83 professionals and 91 fresh graduates, while continuously strengthening cost control - Established a specialized geological exploration company to enhance mineral resource exploration effectiveness and resource assurance capabilities[53](index=53&type=chunk) - Added a professional engineering management team to strengthen full-lifecycle control of engineering construction projects[53](index=53&type=chunk) - Advanced salary reforms and "three-fixed" (fixed responsibilities, fixed positions, fixed personnel) work at headquarters and subsidiaries, achieving precise control of human resource costs and upgrading the full-staff performance incentive system[54](index=54&type=chunk) - Successfully recruited **83** professional talents, including **27** core technical talents, through a special talent introduction program[54](index=54&type=chunk) - Hired **91** fresh graduates, with **49** in geology, surveying, and mining-related majors[54](index=54&type=chunk) - Strengthened dynamic control over key links such as engineering design, production operations, material procurement, material consumption, and expense expenditures, promoting refined management of production costs[54](index=54&type=chunk) - The share award scheme was approved by the general meeting of shareholders on August 5 and will be implemented[55](index=55&type=chunk) [Deepening Digital Transformation, New Breakthroughs in 3D Digital Mine Construction](index=27&type=section&id=(%E5%9B%9B)%20Deepening%20Digital%20Transformation,%20New%20Breakthroughs%20in%203D%20Digital%20Mine%20Construction) The Group fully advanced digital transformation, completing the overall plan design, with 3 out of 11 digital projects implemented, launching the Lingjin AI Lab, building an enterprise-level AI knowledge base, and piloting AI-assisted office in finance and HR, while deepening MES system application and achieving 3D collaborative design at Huatai Company - Completed the overall plan design for digital transformation, with **3** out of **11** digital projects successfully implemented[56](index=56&type=chunk) - Launched the Lingjin AI Lab project, deployed localized AI large models, built an enterprise-level AI knowledge base, and piloted AI-assisted office in finance and HR[56](index=56&type=chunk) - Deepened MES system application, launched the second phase of the BI and data visualization system project, and successfully launched the first phase of the asset management system[57](index=57&type=chunk) - Huatai Company achieved 3D collaborative design for geology, surveying, and mining professionals, fully applying digital technology[57](index=57&type=chunk) [Comprehensive Improvement in ESG Governance, Stable Safety and Environmental Operations](index=28&type=section&id=(%E4%BA%94)%20Comprehensive%20Improvement%20in%20ESG%20Governance,%20Stable%20Safety%20and%20Environmental%20Operations) The Group comprehensively improved ESG governance, launched a "Beautiful Mine Construction Project" pilot, increased safety and environmental investments, advanced the construction of a comprehensive safety management platform and mine equipment upgrades, and actively fulfilled social responsibilities through various donations - Launched the "Beautiful Mine Construction Project," with Nanshan Branch as the first pilot[58](index=58&type=chunk) - Invested a cumulative **23.37 million RMB** in safety and environmental protection, focusing on the construction of the Lingjin comprehensive safety management platform[58](index=58&type=chunk) - Implemented a safety confirmation system for underground mining operations and improved the safety management assessment and incentive mechanism[58](index=58&type=chunk) - Donated **10 million RMB** for the reconstruction of village roads in Zhuyang Town, Lingbao City[59](index=59&type=chunk) - Donated smart eye-protection lamps, energy-saving air conditioners, and advanced integrated teaching machines worth over **500,000 RMB** to five primary and secondary schools in Lingbao City[59](index=59&type=chunk) - Donated **100,000 RMB** to the judicial assistance public fund of the Lingbao City Procuratorate[59](index=59&type=chunk) [Steady Progress in Internationalization](index=29&type=section&id=(%E5%85%AD)%20Steady%20Progress%20in%20Internationalization) The Group steadily advanced its internationalization process, establishing a standardized overseas project database, successfully completing a strategic investment in an Oceania gold mine project, and initially building an overseas business network covering Asia, Africa, and Oceania - Established a standardized overseas project database and improved full-process management of M&A information[60](index=60&type=chunk) - Successfully completed a strategic investment in an Oceania gold mine project[60](index=60&type=chunk) - Initially built an overseas business network covering Asia, Africa, and Oceania[60](index=60&type=chunk) [Outlook for H2 2025](index=29&type=section&id=Outlook%20for%20H2%202025) In H2, the Group will maintain strategic focus, capitalize on rising gold prices and favorable policies, accelerate key projects, deepen reforms, enhance operational efficiency, optimize cost structure, expedite internationalization and digitalization, and uphold safety and environmental standards for stable development [Strengthening Production Organization for Steady Performance Growth](index=29&type=section&id=(%E4%B8%80)%20Strengthening%20Production%20Organization%20for%20Steady%20Performance%20Growth) In H2, the Group will continue to seize opportunities from high gold prices, advance exploration, reserve enhancement, capacity expansion, and technological transformation projects, strengthen production scheduling, and consolidate operating results for steady performance growth - Seize opportunities from high gold prices, advance exploration, reserve enhancement, capacity expansion, and technological transformation projects[61](index=61&type=chunk) [Implementing Prospecting Breakthrough Actions to Continuously Solidify the Foundation for Industrial Development](index=30&type=section&id=(%E4%BA%8C)%20Implementing%20Prospecting%20Breakthrough%20Actions%20to%20Continuously%20Solidify%20the%20Foundation%20for%20Industrial%20Development) The Group will leverage its geological exploration company to intensify independent prospecting efforts, introduce advanced technologies, and accelerate key exploration projects and deep exploration to ensure resource continuity and sustainable development - Rely on the geological exploration company to intensify independent prospecting efforts, introducing advanced prospecting concepts and technologies[62](index=62&type=chunk) - Accelerate the advancement of key exploration projects, deep exploration, and exploration planning work[62](index=62&type=chunk) [Focusing on Key Projects to Expand New Development Space](index=30&type=section&id=(%E4%B8%89)%20Focusing%20on%20Key%20Projects%20to%20Expand%20New%20Development%20Space) The Group will accelerate the construction of key projects for major production units, including Nanshan Branch, Xingyuan Company, Huatai Company, Fujin Company, Jinchan Company, and the Smelting Branch, covering infrastructure, beneficiation plants, tailings ponds, technological upgrades, and green transformation - Accelerate the construction of Nanshan Branch's Qiangma infrastructure project, Baihua beneficiation plant, and new tailings pond project[62](index=62&type=chunk) - Advance Xingyuan Company's Shangshanghe-Laowan mining section infrastructure project, new tailings pond project, and preliminary feasibility study for a new beneficiation plant project[62](index=62&type=chunk) - Advance Huatai Company's 3D digital mine construction, optimization of mining methods, and new tailings pond project[62](index=62&type=chunk) - Advance the Smelting Branch's iron-silicon slag disposal and green upgrade project[62](index=62&type=chunk) [Improving Overseas Project Management, Steadily Advancing Internationalization Strategy](index=30&type=section&id=(%E5%9B%9B)%20Improving%20Overseas%20Project%20Management,%20Steadily%20Advancing%20Internationalization%20Strategy) The Group will actively advance the screening, inspection, tracking, and implementation of key overseas projects, strengthen new project information collection, expand its partner network, and establish a comprehensive risk management system for overseas investments, aiming to complete key M&A projects in target regions - Actively advance the screening, inspection, tracking, and implementation of key overseas projects[62](index=62&type=chunk) - Strengthen new project information collection and expand connections with domestic and international mining companies and investment institutions[62](index=62&type=chunk) - Establish and improve a comprehensive risk management system covering the entire process of overseas investments[62](index=62&type=chunk) - Aim to complete key M&A projects in target regions in H2[62](index=62&type=chunk) [Deepening Application Synergy, Advancing Digital Strategy Implementation](index=31&type=section&id=(%E4%BA%94)%20Deepening%20Application%20Synergy,%20Advancing%20Digital%20Strategy%20Implementation) The Group will comprehensively advance the iteration and upgrade of MES and BI systems, promote 3D digitalization in geology and surveying at mine units, accelerate AI and data team building, deploy AI knowledge base systems, and explore innovative applications of RPA and AI in finance and other business scenarios - Comprehensively advance the iteration and upgrade of MES and BI systems, achieving deep application and value realization[63](index=63&type=chunk) - Mine units will vigorously promote 3D digitalization in geology and surveying, achieving full-element data collection, visualization, and full-lifecycle application[63](index=63&type=chunk) - Accelerate AI and data team building, deploy AI knowledge base systems, and explore innovative applications of RPA and AI technologies in finance and other business scenarios[63](index=63&type=chunk) [Comprehensive Cost Reduction and Control to Forge New Cost Advantages](index=31&type=section&id=(%E5%85%AD)%20Comprehensive%20Cost%20Reduction%20and%20Control%20to%20Forge%20New%20Cost%20Advantages) The Group will precisely target key breakthroughs in cost optimization, analyze cost composition across all dimensions, implement precise measures to control fixed costs, dynamically optimize variable costs, and uncover hidden cost optimization opportunities to enhance refined cost management - Build a comprehensive cost control system, analyzing cost composition across all dimensions including production operations, investment construction, technological innovation, safety, and environmental protection[63](index=63&type=chunk) - Implement precise measures to control fixed costs, dynamically optimize variable costs, and uncover hidden cost optimization opportunities[63](index=63&type=chunk) - The engineering management team will strengthen full-lifecycle project control to ensure cost input translates into economic benefits[63](index=63&type=chunk) [Upholding Safety and Environmental Bottom Line, Ensuring Stable Production Operations](index=31&type=section&id=(%E4%B8%83)%20Upholding%20Safety%20and%20Environmental%20Bottom%20Line,%20Ensuring%20Stable%20Production%20Operations) The Group will focus on the three-year action plan for fundamental safety production improvements, strictly investigate hidden hazards, manage dangerous operations, strengthen mine management, and improve online monitoring of tailings ponds to eliminate major risks - Focus on the three-year action plan for fundamental safety production improvements, strictly investigate hidden hazards, and strictly manage dangerous operations[63](index=63&type=chunk) - Improve online monitoring of tailings ponds to ensure major hazards are eliminated and risks are fully controlled[63](index=63&type=chunk) - Fully launch the comprehensive safety management platform to achieve intelligent full-process supervision[63](index=63&type=chunk) Financial Review [Liquidity and Financial Resources](index=32&type=section&id=Liquidity%20and%20Financial%20Resources) The Group's liquidity significantly improved, with a substantial increase in cash and cash equivalents, an enhanced current ratio, and a stable gearing ratio, planning further reductions in gearing and improved financing capabilities - Restricted cash, cash and cash equivalents increased by **82.84%** year-on-year[64](index=64&type=chunk) - The current ratio improved from **99.45%** to **108.66%**, indicating improved liquidity[64](index=64&type=chunk) - Unutilized unsecured bank facilities amounted to approximately **787,150 thousand RMB**[65](index=65&type=chunk) - Plans to reduce the gearing ratio and enhance financing capabilities through refined management, optimized fund allocation, reasonable supply chain financing, optimized financing structure, and placement of new H shares[66](index=66&type=chunk)[67](index=67&type=chunk) Liquidity and Financial Resources Overview Table | Indicator | As of June 30, 2025 (thousand RMB) | As of December 31, 2024 (thousand RMB) | | :--- | :--- | :--- | | Restricted cash, cash and cash equivalents | 1,644,791 | 899,570 | | Total equity | 3,940,520 | 3,158,184 | | Current assets | 4,481,195 | 3,008,793 | | Current liabilities | 4,124,042 | 3,025,313 | | Current ratio | 108.66% | 99.45% | | Outstanding bank and other borrowings | 3,397,481 | 2,644,510 | | Gearing ratio | 37.54% | 36.65% | [Pledges and Guarantees](index=33&type=section&id=Pledges%20and%20Guarantees) Details of the Group's pledges and guarantees, primarily related to bank borrowings, are disclosed in Note 13 to the financial statements - Details of pledges and guarantees are referred to Note 13 — Bank Borrowings in the financial statements[68](index=68&type=chunk) [Market Risks](index=33&type=section&id=Market%20Risks) The Group faces market risks from fluctuations in gold and other commodity values, interest rates, and foreign currency exchange rates, strictly prohibiting speculative use of commodity derivatives - Faces risks from fluctuations in gold prices and other commodity values, with products sold at market prices[69](index=69&type=chunk)[70](index=70&type=chunk) - Strictly prohibits the use of commodity derivatives or futures for speculative purposes; all commodity derivatives are used to hedge against potential fluctuations[70](index=70&type=chunk) - Faces risks from fluctuations in debt interest rates, with People's Bank of China interest rate adjustments potentially affecting financing costs[71](index=71&type=chunk) - Primarily transacts in RMB, but some bank deposits, trade receivables, trade payables, and bank loans are denominated in foreign currencies (mainly USD), exposing the Group to exchange rate risks[72](index=72&type=chunk) [Contractual Obligations](index=34&type=section&id=Contractual%20Obligations) The Group's total capital commitments increased, primarily related to contracted costs not yet provided for in the financial statements - As of June 30, 2025, total capital commitments were approximately **29,555 thousand RMB**, an increase of approximately **11,984 thousand RMB** year-on-year[74](index=74&type=chunk) [Capital Expenditure](index=34&type=section&id=Capital%20Expenditure) The Group's capital expenditure significantly increased, mainly for mine construction, renewal of mining rights, and upgrades of production equipment, reflecting continuous investment in infrastructure and production capacity - Capital expenditure for the period was approximately **402,720 thousand RMB**, an increase of approximately **39.81%** year-on-year[75](index=75&type=chunk) - Capital expenditure primarily involved mine construction, renewal of mining rights for subsidiaries, development project equipment, and upgrades of production equipment[75](index=75&type=chunk) [Contingent Liabilities](index=34&type=section&id=Contingent%20Liabilities) As of the end of the reporting period, the Group had no significant contingent liabilities - As of June 30, 2025, the Group had no significant contingent liabilities[76](index=76&type=chunk) [Human Resources](index=34&type=section&id=Human%20Resources) The Group's employee count slightly increased, with remuneration policies based on merit, seniority, and competence, focusing on employee training, development, and incentive policies - As of June 30, 2025, the Group had **3,655** employees, a slight increase from **3,618** at the end of 2024[77](index=77&type=chunk) - Remuneration policies are determined based on employee merit, seniority, and competence[77](index=77&type=chunk) - Provides induction training, on-the-job training, and remuneration incentive policies[77](index=77&type=chunk) [Funding and Treasury Policies](index=35&type=section&id=Funding%20and%20Treasury%20Policies) The Group maintains prudent funding and treasury policies, depositing surplus funds with licensed financial institutions and closely monitoring liquidity to ensure operational working capital needs are met - Maintains prudent funding and treasury policies, depositing surplus funds with licensed banks and financial institutions[78](index=78&type=chunk) - The Board closely monitors liquidity to ensure funding needs are met[78](index=78&type=chunk) [Material Investments](index=35&type=section&id=Material%20Investments) As of the end of the reporting period, the Group held no material investments - As of June 30, 2025, the Group held no material investments[79](index=79&type=chunk) [Material Acquisitions and Disposals of Subsidiaries and Associates](index=35&type=section&id=Material%20Acquisitions%20and%20Disposals%20of%20Subsidiaries%20and%20Associates) As of the end of the reporting period, the Group had no material acquisitions or disposals of subsidiaries or associates - As of June 30, 2025, there were no material acquisitions or disposals of subsidiaries or associates[80](index=80&type=chunk) [Future Plans for Material Investments or Capital Assets](index=35&type=section&id=Future%20Plans%20for%20Material%20Investments%20or%20Capital%20Assets) Except as disclosed elsewhere in this announcement, the Group has no other future plans for material acquisitions, investments, or capital assets as of the date of this announcement - Except as disclosed, there are no other future plans for material acquisitions, investments, or capital assets[81](index=81&type=chunk) [Events After Reporting Period](index=35&type=section&id=Events%20After%20Reporting%20Period) No significant events occurred after the period-end up to the date of this announcement - No significant events occurred after the period-end up to the date of this announcement[82](index=82&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=35&type=section&id=Purchase,%20Sale%20or%20Redemption%20of%20the%20Company's%20Listed%20Securities) For the six months ended June 30, 2025, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's shares, and the Company held no treasury shares - No purchase, sale, or redemption of the Company's listed securities occurred during the period[83](index=83&type=chunk) - As of June 30, 2025, the Company held no treasury shares[83](index=83&type=chunk) [Interim Dividend](index=35&type=section&id=Interim%20Dividend) The Board recommended an interim dividend of RMB 0.164 per share, detailing tax arrangements for H share shareholders and periods for closure of the register of members - The Board recommended an interim dividend of **RMB 0.164** per share (H1 2024: nil)[84](index=84&type=chunk) - The interim dividend is expected to be paid on or about October 22, 2025, subject to shareholder approval[84](index=84&type=chunk) [Dividend Tax Arrangements](index=35&type=section&id=Dividend%20Tax%20Arrangements) The Company will withhold enterprise income tax at a 10% rate for non-resident enterprise H share shareholders and individual income tax for H share individual shareholders based on tax treaties between their resident countries/regions and China - Before distributing interim dividends to non-resident enterprise H share shareholders, enterprise income tax will be withheld at a **10%** rate[84](index=84&type=chunk) - Individual income tax rates for H share individual shareholders depend on tax treaties between their resident countries/regions and China, potentially **10%**, below **10%** (requiring refund application), above **10%** but below **20%**, or **20%**[86](index=86&type=chunk) [Closure of Register of Members](index=37&type=section&id=Closure%20of%20Register%20of%20Members) To determine H share shareholders eligible to attend and vote at the EGM, the Company will close its register of members from September 12 to September 17, 2025; for interim dividend eligibility, it will be closed from September 23 to September 28, 2025 - To determine H share shareholders eligible to attend and vote at the extraordinary general meeting, the register of members will be closed from **September 12 to September 17, 2025**[88](index=88&type=chunk) - To determine H share shareholders eligible for the interim dividend, the register of members will be closed from **September 23 to September 28, 2025**[89](index=89&type=chunk) Corporate Governance and Others [Corporate Governance](index=37&type=section&id=Corporate%20Governance) The Company is committed to maintaining high standards of corporate governance, having adopted relevant code provisions of the Corporate Governance Code and confirming compliance with all applicable provisions during the period - Adopted relevant code provisions of the Corporate Governance Code set out in Appendix C1 Part 2 of the HKEX Listing Rules[90](index=90&type=chunk) - The Board believes that all applicable code provisions of the Corporate Governance Code were complied with during the period[91](index=91&type=chunk) [Standard Code for Securities Transactions](index=38&type=section&id=Standard%20Code%20for%20Securities%20Transactions) The Company adopted the Standard Code for Securities Transactions as a code of conduct for directors, supervisors, and employees with inside information, confirming compliance by all directors and supervisors during the period - Adopted the Standard Code set out in Appendix C3 of the Listing Rules as a code of conduct for directors, supervisors, and employees with inside information regarding securities transactions[92](index=92&type=chunk) - All directors and supervisors confirmed compliance with the Standard Code during the period, with no breaches by employees identified[92](index=92&type=chunk) [Audit Committee](index=38&type=section&id=Audit%20Committee) The Audit Committee, comprising four independent non-executive directors and one non-executive director, reviewed this interim financial report, which was also reviewed by external auditors in accordance with HKSRS 2410 - The Audit Committee comprises four independent non-executive directors and one non-executive director[93](index=93&type=chunk) - The Audit Committee reviewed the unaudited interim financial report for the six months ended June 30, 2025[93](index=93&type=chunk) - External auditors reviewed the interim financial report in accordance with Hong Kong Standard on Review Engagements 2410[93](index=93&type=chunk) [Publication of Results Announcement and Interim Report](index=38&type=section&id=Publication%20of%20Results%20Announcement%20and%20Interim%20Report) This results announcement has been published on the HKEX and company websites, with the 2025 interim report to be dispatched to shareholders and published online in due course - The results announcement has been published on the HKEX website (www.hkexnews.hk) and the Company's website (www.irasia.com/listco/hk/lingbao)[94](index=94&type=chunk) - The 2025 interim report will be dispatched to shareholders and published on the website in due course[94](index=94&type=chunk) [Board of Directors](index=39&type=section&id=Board%20of%20Directors) As of the date of this announcement, the Board of Directors comprises five executive directors, two non-executive directors, and four independent non-executive directors - The Board of Directors includes five executive directors, two non-executive directors, and four independent non-executive directors[96](index=96&type=chunk)