[Interim Results Overview](index=1&type=section&id=Interim%20Results%20Overview) [Company Information](index=1&type=section&id=Company%20Information) Realord Group Holdings Limited (stock code: 1196) is a Bermuda-incorporated limited company, presenting its unaudited interim results for the six months ended June 30, 2025 - Company Name: **Realord Group Holdings Limited**[4](index=4&type=chunk) - Stock Code: **1196**[2](index=2&type=chunk) - Reporting Period: Unaudited interim results for the six months ended **June 30, 2025**[4](index=4&type=chunk) [Condensed Consolidated Financial Statements](index=2&type=section&id=Condensed%20Consolidated%20Financial%20Statements) [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, total revenue from continuing operations increased by 6.35% to HK$277,092 thousand, but the loss for the period remained high at HK$496,179 thousand, narrowing from HK$550,961 thousand in the prior year, primarily due to a swing from net other gains to losses and fair value losses on investment properties Key Data from Condensed Consolidated Statement of Profit or Loss (Continuing Operations) | Metric | June 30, 2025 (HK$ thousand) | June 30, 2024 (HK$ thousand) | Change (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Total Revenue | 277,092 | 260,543 | 16,549 | 6.35% | | Cost of Sales | (212,245) | (177,544) | (34,701) | 19.54% | | Gross Profit | 64,847 | 82,999 | (18,152) | (21.87%) | | Other Income | 6,795 | 5,950 | 845 | 14.20% | | Net Other Gains and Losses | (90,067) | 76,621 | (166,688) | (217.55%) | | Net Impairment Losses | (54,757) | (81,095) | 26,338 | (32.48%) | | Net Loss from Fair Value Change of Investment Properties | (54,237) | (211,733) | 157,496 | (74.38%) | | Selling and Distribution Expenses | (1,859) | (3,660) | 1,801 | (49.21%) | | Administrative Expenses | (83,035) | (84,380) | 1,345 | (1.59%) | | Finance Costs | (295,977) | (363,806) | 67,829 | (18.64%) | | Loss Before Income Tax | (508,290) | (579,104) | 70,814 | (12.23%) | | Income Tax Credit | 12,111 | 60,458 | (48,347) | (79.97%) | | Loss for the Period from Continuing Operations | (496,179) | (518,646) | 22,467 | (4.33%) | | Loss for the Period from Discontinued Operations | – | (32,315) | 32,315 | (100.00%) | | Loss for the Period | (496,179) | (550,961) | 54,782 | (9.94%) | - Loss for the period attributable to owners of the Company was **HK$479,162 thousand**, a decrease from **HK$515,424 thousand** in the prior year[8](index=8&type=chunk) - Basic and diluted loss per share (continuing and discontinued operations) was **33.251 HK cents**, an improvement from **35.776 HK cents** in the prior year[8](index=8&type=chunk) [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=4&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended June 30, 2025, the Group's total comprehensive expense for the period significantly decreased to HK$332,281 thousand from HK$720,341 thousand in the prior year, primarily due to a swing from exchange losses to gains and increased revaluation gains on investment properties Key Data from Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income | Metric | June 30, 2025 (HK$ thousand) | June 30, 2024 (HK$ thousand) | Change (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Loss for the Period | (496,179) | (550,961) | 54,782 | (9.94%) | | Net Revaluation Gain on Property, Plant and Equipment | 5,790 | 1,883 | 3,907 | 207.49% | | Exchange Differences Arising from Translation of Foreign Operations | 158,108 | (171,263) | 329,371 | (192.32%) | | Other Comprehensive Income/(Expense) for the Period | 163,898 | (169,380) | 333,278 | (196.76%) | | Total Comprehensive Expense for the Period | (332,281) | (720,341) | 388,060 | (53.87%) | - Total comprehensive expense for the period attributable to owners of the Company was **HK$322,438 thousand**, a significant decrease from **HK$667,738 thousand** in the prior year[9](index=9&type=chunk) [Condensed Consolidated Statement of Financial Position](index=5&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's total assets slightly increased, but net current liabilities shifted from net current assets at year-end, primarily due to increased trade payables and bank borrowings, leading to liquidity pressure; total equity decreased, with growth in non-current liabilities from ultimate holding company loans and bank borrowings Key Data from Condensed Consolidated Statement of Financial Position | Metric | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | **Assets** | | | | | | Non-current Assets | 9,686,631 | 9,494,071 | 192,560 | 2.03% | | Current Assets | 9,832,273 | 9,494,466 | 37,807 | 3.56% | | **Liabilities** | | | | | | Current Liabilities | 10,098,736 | 9,487,649 | 611,087 | 6.44% | | Non-current Liabilities | 5,675,063 | 5,430,078 | 244,985 | 4.51% | | **Equity** | | | | | | Equity Attributable to Owners of the Company | 2,385,877 | 2,701,739 | (315,862) | (11.69%) | | Non-controlling Interests | 1,359,228 | 1,369,071 | (9,843) | (0.72%) | | Total Equity | 3,745,105 | 4,070,810 | (325,705) | (8.00%) | | Net Current (Liabilities)/Assets | (266,463) | 6,817 | (273,280) | (4008.80%) | | Investment Properties | 9,148,131 | 8,971,830 | 176,301 | 1.96% | | Properties Under Development | 5,845,685 | 5,633,874 | 211,811 | 3.76% | | Bank Balances and Cash | 40,043 | 30,690 | 9,353 | 30.48% | | Bank Borrowings (Current) | 7,648,932 | 7,432,244 | 216,688 | 2.92% | | Ultimate Holding Company Loans (Non-current) | 2,787,039 | 2,614,469 | 172,570 | 6.60% | - Net current liabilities were **HK$266,463 thousand**, compared to net current assets of **HK$6,817 thousand** at the end of last year, indicating a deterioration in liquidity[10](index=10&type=chunk) [Notes to the Condensed Consolidated Interim Financial Statements](index=7&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Interim%20Financial%20Statements) [Basis of Preparation](index=7&type=section&id=Basis%20of%20Preparation) The condensed consolidated interim financial statements are prepared in accordance with HKAS 34 and Appendix D2 of the Listing Rules, presented in HK dollars, using the historical cost convention, with certain assets and financial instruments measured at revalued or fair value, and are consistent with the 2024 annual consolidated financial statements, except for HKAS 21 amendments, and are unaudited but reviewed by the audit committee - Financial statements are prepared in accordance with **HKAS 34** and **Appendix D2 of the Listing Rules**[12](index=12&type=chunk) - The presentation currency is **HK dollars**, using the historical cost convention, with certain assets measured at revalued or fair value[13](index=13&type=chunk) - The financial statements are unaudited by the auditor but have been reviewed by the Company's audit committee[14](index=14&type=chunk) [Going Concern Basis](index=7&type=section&id=Going%20Concern%20Basis) Despite a loss of HK$496,179 thousand and net current liabilities of HK$266,463 thousand as of June 30, 2025, the Board believes the Group can continue as a going concern, having reviewed cash flow forecasts and implemented measures including negotiating loan renewals, monitoring property development, controlling costs, and securing ongoing financial support from the ultimate holding company - The Group recorded a loss of **HK$496,179 thousand** and net current liabilities of **HK$266,463 thousand** for the six months ended June 30, 2025[15](index=15&type=chunk) - The Board believes the Group can operate on a going concern basis, supported by measures such as negotiating bank loan renewals, monitoring property project development and cost control, and continuous financial support from the ultimate holding company[16](index=16&type=chunk)[17](index=17&type=chunk) - Bank borrowings totaling **HK$7,189,928 thousand** have been renewed with banks, extending maturities to **April 11, 2030**, and **April 11, 2035**, respectively[17](index=17&type=chunk) [Application of New and Revised HKFRSs](index=9&type=section&id=Application%20of%20New%20and%20Revised%20HKFRSs) The Group adopted the amendments to HKAS 21 "Lack of Exchangeability" effective January 1, 2025, which had no significant impact on the condensed consolidated interim financial statements, and has not early applied other new and revised HKFRSs issued but not yet effective, with no significant impact expected upon future adoption - The amendments to **HKAS 21 "Lack of Exchangeability"**, effective January 1, 2025, were adopted with no significant impact[18](index=18&type=chunk)[19](index=19&type=chunk) - The Group has not early applied other new and revised HKFRSs issued but not yet effective, with no significant impact expected upon future adoption[20](index=20&type=chunk) [Revenue](index=10&type=section&id=Revenue) The Group's revenue primarily derives from sales of goods and services, rental income, and interest income, with total revenue of HK$277,092 thousand for the six months ended June 30, 2025, where waste material sales from the environmental protection segment contributed the most, while financial services and Latin America and Caribbean segments saw decreased revenue - Revenue recognition principles cover sales of auto parts, waste materials, corporate finance advisory, citizenship application, securities brokerage commissions, box office ticketing, rental income, margin financing, and money lending interest income[22](index=22&type=chunk) [Disaggregation of Revenue from Contracts with Customers](index=11&type=section&id=Disaggregation%20of%20Revenue%20from%20Contracts%20with%20Customers) In the first half of 2025, the Group's total revenue was HK$277,092 thousand, with the environmental protection segment (waste material sales) contributing the most at HK$211,830 thousand; financial services revenue was HK$43,069 thousand, and Latin America and Caribbean revenue was HK$3,669 thousand, both decreasing from the prior year, while rental and interest income were significant non-contractual revenue sources Disaggregation of Revenue from Continuing Operations (by Type of Goods and Services) | Type of Goods and Services | June 30, 2025 (HK$ thousand) | June 30, 2024 (HK$ thousand) | Change (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Sales of Goods – Waste Materials | 211,830 | 136,695 | 75,135 | 54.96% | | Sales of Goods – Auto Parts | – | 1,715 | (1,715) | (100.00%) | | Provision of Services – Financial Services | 8,301 | 49,944 | (41,643) | (83.38%) | | Provision of Services – Citizenship Application and Consultancy Services | 3,669 | 11,433 | (7,764) | (67.91%) | | Provision of Services – Securities Brokerage Commissions | 732 | 781 | (49) | (6.27%) | | Provision of Services – Box Office Ticketing | 1,592 | 1,262 | 330 | 26.15% | | Rental Income | 16,932 | 22,182 | (5,250) | (23.67%) | | Margin Financing Interest Income | 12,699 | 13,450 | (751) | (5.58%) | | Money Lending Business Interest Income | 21,337 | 23,081 | (1,744) | (7.56%) | | **Total** | **277,092** | **260,543** | **16,549** | **6.35%** | - In the first half of 2025, waste material sales revenue significantly increased by **54.96%**, becoming the primary growth driver[23](index=23&type=chunk) - Financial services and citizenship application and consultancy services revenue significantly decreased by **83.38%** and **67.91%**, respectively[23](index=23&type=chunk)[24](index=24&type=chunk) [Segment Information](index=13&type=section&id=Segment%20Information) The Group's operations are divided into seven continuing segments: property, financial services, environmental protection, auto parts, Latin America and Caribbean, and others (including lottery tickets and cinema operations); commercial printing and department store segments were discontinued in the second half of last year, and segment performance assessment excludes bank interest, dividends, fair value changes, exchange gains/losses, corporate expenses, and certain finance costs - The Group currently has seven operating segments: property investment, financial services, environmental protection industry, auto parts distribution, Latin America and Caribbean projects, lottery ticket sales, and cinema operations[25](index=25&type=chunk) - The commercial printing segment and department store segment were discontinued in the second half of last year[25](index=25&type=chunk)[26](index=26&type=chunk) - Segment results do not allocate bank interest income, dividend income, fair value changes, exchange gains/losses, corporate expenses, and certain finance costs[26](index=26&type=chunk) [Segment Revenue and Results](index=15&type=section&id=Segment%20Revenue%20and%20Results) In the first half of 2025, the environmental protection segment was the main contributor to external customer sales, with revenue reaching HK$211,830 thousand, while financial services segment revenue significantly decreased; the property and environmental protection segments recorded segment losses, while the financial services segment achieved a segment profit, and the Group's overall loss before income tax was HK$508,290 thousand Segment Revenue and Results from Continuing Operations | Segment | June 30, 2025 Revenue (HK$ thousand) | June 30, 2024 Revenue (HK$ thousand) | Revenue Change (HK$ thousand) | Revenue Change (%) | June 30, 2025 Results (HK$ thousand) | June 30, 2024 Results (HK$ thousand) | Results Change (HK$ thousand) | Results Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Property | 16,932 | 22,182 | (5,250) | (23.67%) | (199,071) | (378,554) | 179,483 | (47.41%) | | Financial Services | 43,069 | 87,257 | (44,188) | (50.64%) | 18,494 | 30,613 | (12,119) | (39.59%) | | Environmental Protection | 211,830 | 136,694 | 75,136 | 54.97% | (24,955) | (71,327) | 46,372 | (65.01%) | | Auto Parts | – | 1,715 | (1,715) | (100.00%) | (25,075) | (13,044) | (12,031) | 92.24% | | Latin America and Caribbean | 3,669 | 11,433 | (7,764) | (67.91%) | (8,563) | (6,722) | (1,841) | 27.39% | | Others | 1,592 | 1,262 | 330 | 26.15% | (19) | (293) | 274 | (93.52%) | | **Total** | **277,092** | **260,543** | **16,549** | **6.35%** | **(239,189)** | **(439,327)** | **200,138** | **(45.56%)** | - Environmental protection segment revenue significantly increased by **54.97%**, but auto parts segment revenue became zero[29](index=29&type=chunk)[30](index=30&type=chunk) - Property segment loss significantly narrowed, environmental protection segment loss also substantially decreased, but financial services segment profit declined[29](index=29&type=chunk)[30](index=30&type=chunk) [Segment Assets and Liabilities](index=17&type=section&id=Segment%20Assets%20and%20Liabilities) As of June 30, 2025, the property segment held the largest segment assets and liabilities, at HK$15,550,518 thousand and HK$8,719,154 thousand respectively, with the Group's total assets increasing to HK$19,518,904 thousand and total liabilities to HK$15,773,799 thousand Segment Assets and Liabilities (as of June 30, 2025) | Segment | Segment Assets (HK$ thousand) | Segment Liabilities (HK$ thousand) | | :--- | :--- | :--- | | Property | 15,550,518 | 8,719,154 | | Financial Services | 1,059,373 | 113,546 | | Environmental Protection | 319,098 | 125,109 | | Auto Parts | 92,529 | 6,736 | | Latin America and Caribbean | 2,356,936 | 211,920 | | Others | 3,208 | 263 | | **Total** | **19,381,662** | **9,176,728** | | Corporate and Unallocated Assets/Liabilities | 137,242 | 6,597,071 | | **Grand Total** | **19,518,904** | **15,773,799** | - Property segment assets and liabilities dominate within the Group[31](index=31&type=chunk) - Corporate and unallocated liabilities amounted to **HK$6,597,071 thousand**, indicating substantial unallocated liabilities at the Group level[31](index=31&type=chunk) [Other Income](index=18&type=section&id=Other%20Income) In the first half of 2025, the Group's other income increased to HK$6,795 thousand, primarily comprising interest income from credit-impaired loans (HK$3,599 thousand) and income from shared office locations (HK$1,281 thousand), while bank interest income slightly decreased Details of Other Income | Item | June 30, 2025 (HK$ thousand) | June 30, 2024 (HK$ thousand) | Change (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Bank Interest Income | 1,033 | 1,173 | (140) | (11.93%) | | Dividend Income | 701 | 607 | 94 | 15.49% | | Government Grants | 124 | 126 | (2) | (1.59%) | | Interest Income from Credit-Impaired Loans | 3,599 | 3,460 | 139 | 4.02% | | Income from Shared Office Locations | 1,281 | – | 1,281 | N/A | | Others | 57 | 584 | (527) | (90.24%) | | **Total** | **6,795** | **5,950** | **845** | **14.20%** | - Income from shared office locations is a new revenue source, contributing **HK$1,281 thousand**[33](index=33&type=chunk) [Net Other Gains and Losses](index=18&type=section&id=Net%20Other%20Gains%20and%20Losses) In the first half of 2025, the Group's net other gains and losses swung from a gain of HK$76,621 thousand in the prior year to a loss of HK$90,067 thousand, primarily due to net exchange losses of HK$91,510 thousand, compared to net exchange gains of HK$77,910 thousand in the prior year Details of Net Other Gains and Losses | Item | June 30, 2025 (HK$ thousand) | June 30, 2024 (HK$ thousand) | Change (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Gains from Lease Modifications and Terminations | 29 | 57 | (28) | (49.12%) | | Loss on Disposal of Property, Plant and Equipment | (4) | (2) | (2) | 100.00% | | Net Exchange (Losses)/Gains | (91,510) | 77,910 | (169,420) | (217.45%) | | Recovery of Trade Receivables Previously Written Off by Securities Brokerage | 50 | – | 50 | N/A | | Revaluation Surplus on Property, Plant and Equipment | 901 | – | 901 | N/A | | Unrealised Fair Value Gains/(Losses) on Financial Assets at Fair Value Through Profit or Loss | 467 | (1,344) | 1,811 | (134.75%) | | **Total** | **(90,067)** | **76,621** | **(166,688)** | **(217.55%)** | - Exchange gains and losses swung from a gain of **HK$77,910 thousand** in the prior year to a loss of **HK$91,510 thousand**, which is the main reason for the net loss[34](index=34&type=chunk) - Unrealised fair value of financial assets at fair value through profit or loss swung from a loss to a gain[34](index=34&type=chunk) [Finance Costs](index=19&type=section&id=Finance%20Costs) In the first half of 2025, the Group's finance costs decreased by 18.64% year-on-year to HK$295,977 thousand, primarily due to a significant reduction of HK$68,112 thousand in interest on bank borrowings and overdrafts, while interest on other borrowings and ultimate holding company loans remained largely unchanged Details of Finance Costs | Item | June 30, 2025 (HK$ thousand) | June 30, 2024 (HK$ thousand) | Change (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Interest on Bank Borrowings and Overdrafts | 173,360 | 241,472 | (68,112) | (28.20%) | | Interest on Other Borrowings | 17,617 | 12,928 | 4,689 | 36.27% | | Interest on Ultimate Holding Company Loans | 104,685 | 107,231 | (2,546) | (2.37%) | | Interest on Amounts Due to Related Parties | 13 | 1,658 | (1,645) | (99.22%) | | Finance Charges on Lease Liabilities | 302 | 517 | (215) | (41.59%) | | **Total** | **295,977** | **363,806** | **(67,829)** | **(18.64%)** | - The reduction in bank borrowing interest is the primary driver for the decrease in finance costs[35](index=35&type=chunk) [Income Tax Credit for Continuing Operations](index=19&type=section&id=Income%20Tax%20Credit%20for%20Continuing%20Operations) In the first half of 2025, the Group's income tax credit for continuing operations was HK$12,111 thousand, a significant decrease from HK$60,458 thousand in the prior year, mainly due to a substantial decline in deferred tax credits; the Group operates in Hong Kong, China, Japan, and Grenada, but no taxable profits were generated in regions other than Hong Kong during the period Details of Income Tax Credit | Item | June 30, 2025 (HK$ thousand) | June 30, 2024 (HK$ thousand) | Change (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Current Tax – Hong Kong | 1,097 | 2,269 | (1,172) | (51.65%) | | Deferred Tax | (13,208) | (62,727) | 49,519 | (78.95%) | | **Income Tax Credit** | **(12,111)** | **(60,458)** | **48,347** | **(79.97%)** | - The significant reduction in deferred tax credit is the main reason for the decrease in total income tax credit[37](index=37&type=chunk) - The Group's tax rates in Hong Kong, China, Japan, and Grenada are **16.5%**, **25%**, **34.6%**, and **28%** respectively, but no taxable profits were generated in China, Japan, and Grenada during the period[37](index=37&type=chunk)[38](index=38&type=chunk)[39](index=39&type=chunk)[40](index=40&type=chunk) [Dividends](index=20&type=section&id=Dividends) For the six months ended June 30, 2025, the Company neither paid nor proposed any dividends to ordinary shareholders, and no such proposal has been made since the end of the reporting period - No dividends were paid or proposed during the period[41](index=41&type=chunk) [Loss Per Share](index=20&type=section&id=Loss%20Per%20Share) As of June 30, 2025, the Group's basic and diluted loss per share from continuing operations was 33.251 HK cents, an improvement from 33.980 HK cents in the prior year, with diluted loss being the same as basic loss due to the anti-dilutive effect of potential ordinary shares; there was no loss from discontinued operations for the period, compared to HK$25,875 thousand in the prior year [Continuing Operations](index=20&type=section&id=Continuing%20Operations) Loss from continuing operations attributable to owners of the Company was HK$479,162 thousand, with basic and diluted loss per share of 33.251 HK cents, and diluted loss being the same as basic loss due to the anti-dilutive effect of potential ordinary shares Loss Per Share Data for Continuing Operations | Metric | June 30, 2025 (HK$ thousand/number of shares) | June 30, 2024 (HK$ thousand/number of shares) | | :--- | :--- | :--- | | Loss from Continuing Operations Attributable to Owners of the Company | (479,162) | (489,549) | | Weighted Average Number of Ordinary Shares for Basic Loss Per Share Calculation | 1,440,709,880 | 1,440,709,880 | | Weighted Average Number of Ordinary Shares for Diluted Loss Per Share Calculation | 1,441,054,631 | 1,440,709,880 | | Basic Loss Per Share (HK cents) | (33.251) | (33.980) | | Diluted Loss Per Share (HK cents) | (33.251) | (33.980) | - Both basic and diluted loss per share from continuing operations have improved[44](index=44&type=chunk) [Discontinued Operations](index=21&type=section&id=Discontinued%20Operations) In the first half of 2025, the loss from discontinued operations attributable to owners of the Company was zero, compared to HK$25,875 thousand in the prior year, resulting in zero basic and diluted loss per share from discontinued operations for the current period Loss Per Share Data for Discontinued Operations | Metric | June 30, 2025 (HK$ thousand/number of shares) | June 30, 2024 (HK$ thousand/number of shares) | | :--- | :--- | :--- | | Loss from Discontinued Operations Attributable to Owners of the Company | – | (25,875) | | Weighted Average Number of Ordinary Shares for Basic Loss Per Share Calculation | 1,440,709,880 | 1,440,709,880 | | Weighted Average Number of Ordinary Shares for Diluted Loss Per Share Calculation | 1,441,054,631 | 1,440,709,880 | | Basic Loss Per Share (HK cents) | – | (1.796) | | Diluted Loss Per Share (HK cents) | – | (1.796) | - There was no loss from discontinued operations in the current period, having no impact on loss per share[45](index=45&type=chunk) [Continuing and Discontinued Operations](index=22&type=section&id=Continuing%20and%20Discontinued%20Operations) The total loss from continuing and discontinued operations attributable to owners of the Company was HK$479,162 thousand, a decrease from HK$515,424 thousand in the prior year, with basic and diluted loss per share both at 33.251 HK cents Loss Per Share Data for Continuing and Discontinued Operations | Metric | June 30, 2025 (HK$ thousand) | June 30, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Loss from Continuing Operations Attributable to Owners of the Company | (479,162) | (489,549) | | Loss from Discontinued Operations Attributable to Owners of the Company | – | (25,875) | | Loss Used to Calculate Basic and Diluted Loss Per Share | (479,162) | (515,424) | | Basic and Diluted Loss Per Share (HK cents) | (33.251) | (35.776) | - Total loss per share decreased year-on-year, reflecting an improvement in overall operating performance[48](index=48&type=chunk) [Investment Properties](index=23&type=section&id=Investment%20Properties) As of June 30, 2025, the carrying amount of the Group's investment properties increased to HK$9,148,131 thousand; a net loss from fair value change of HK$54,237 thousand was recorded for the period, but exchange adjustments generated a gain of HK$255,713 thousand, partially offsetting the loss, and some investment properties are pledged as collateral for bank and other borrowings Details of Investment Property Movements | Item | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | At Beginning/End of Period | 8,971,830 | 9,542,078 | | Additions | 25 | 177 | | Disposals | (25,200) | – | | Net Loss from Fair Value Change | (54,237) | (260,392) | | Exchange Adjustments | 255,713 | (310,033) | | At End/Beginning of Period | 9,148,131 | 8,971,830 | - The net loss from fair value change of investment properties significantly narrowed year-on-year, while exchange adjustments swung from a loss to a gain[50](index=50&type=chunk) - Some investment properties are pledged as collateral for bank and other borrowings[50](index=50&type=chunk) [Trade Receivables / Receivables from Securities Brokerage / Loans Receivable](index=23&type=section&id=Trade%20Receivables%20/%20Receivables%20from%20Securities%20Brokerage%20/%20Loans%20Receivable) As of June 30, 2025, the Group's net trade receivables were HK$329,679 thousand, a slight decrease from year-end, with over one year being the largest aging category; net receivables from securities brokerage were HK$277,714 thousand, and net loans receivable were HK$478,871 thousand, both slightly increasing, and the Group maintains strict control over receivables and regularly reviews overdue balances Details of Net Receivables | Item | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Net Trade Receivables | 329,679 | 346,039 | (16,360) | (4.73%) | | Net Receivables from Securities Brokerage | 277,714 | 295,402 | (17,688) | (5.99%) | | Net Loans Receivable | 478,871 | 455,409 | 23,462 | 5.15% | | **Total** | **1,086,264** | **1,096,850** | **(10,586) | (0.97%)** | [Trade Receivables](index=24&type=section&id=Trade%20Receivables) The credit period for trade receivables is generally 1 to 3 months; as of June 30, 2025, trade receivables over 1 year amounted to HK$218,263 thousand, representing a high proportion but a decrease from year-end Aging Analysis of Trade Receivables (Net of Provision for Credit Losses) | Aging | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Current to 30 Days | 67,605 | 57,647 | | 31 to 60 Days | 5,357 | 8,091 | | 61 to 90 Days | 17,246 | 580 | | 91 to 365 Days | 21,208 | 13,716 | | Over 1 Year | 218,263 | 266,005 | | **Total** | **329,679** | **346,039** | - Trade receivables over **1 year** represent the highest proportion but decreased year-on-year[52](index=52&type=chunk) [Receivables from Securities Brokerage](index=24&type=section&id=Receivables%20from%20Securities%20Brokerage) Receivables from securities brokerage primarily include amounts due from cash clients and loans to margin clients, with a typical settlement period of two trading days after the transaction date; loans to margin clients are secured by pledged securities, repayable on demand, and bear interest at commercial rates, with the Board deeming an aging analysis meaningless - Amounts due from cash clients and loans to margin clients are the main components[51](index=51&type=chunk) - Loans to margin clients are secured by pledged securities and bear interest at commercial rates[53](index=53&type=chunk) [Loans Receivable](index=24&type=section&id=Loans%20Receivable) Loans receivable are unsecured, repayable within one year according to agreed repayment dates, and bear interest at commercial rates, with the Board deeming an aging analysis meaningless - Loans receivable are unsecured, repayable within one year, and bear interest at commercial rates[54](index=54&type=chunk) [Trade Payables / Payables from Securities Brokerage](index=25&type=section&id=Trade%20Payables%20/%20Payables%20from%20Securities%20Brokerage) As of June 30, 2025, the Group's trade payables significantly increased to HK$331,041 thousand, with credit terms ranging from 60 to 90 days; payables from securities brokerage were HK$93,531 thousand, primarily comprising amounts due to cash and margin clients, including HK$91,475 thousand held on behalf of clients Details of Payables | Item | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Trade Payables | 331,041 | 174,939 | 156,102 | 89.23% | | Payables from Securities Brokerage | 93,531 | 96,357 | (2,826) | (2.93%) | | **Total** | **424,572** | **271,296** | **153,276** | **56.50%** | - Trade payables significantly increased by **89.23%**, with the largest aging category being over 90 days[55](index=55&type=chunk)[56](index=56&type=chunk) - Among payables from securities brokerage, **HK$91,475 thousand** was cash held on behalf of clients[56](index=56&type=chunk) [Bank Borrowings and Other Borrowings](index=26&type=section&id=Bank%20Borrowings%20and%20Other%20Borrowings) As of June 30, 2025, the Group's total bank borrowings amounted to HK$9,418,954 thousand, mostly secured and repayable within one year; other borrowings totaled HK$271,217 thousand, primarily from financial institutions and independent third parties, also mostly repayable within one year, with Group borrowings mainly secured by investment properties, properties under development, proposed development projects, and subsidiary shares, and guaranteed by the Company, directors, and controlling shareholders [Bank Borrowings](index=26&type=section&id=Bank%20Borrowings) As of June 30, 2025, total bank borrowings were HK$9,418,954 thousand, of which HK$9,410,583 thousand were secured; most borrowings (HK$7,648,932 thousand) are classified as current liabilities, repayable within one year, with interest rates ranging from HIBOR plus 2.1% to 2.5% or 3.35% to 6.2% Details of Bank Borrowings | Item | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Secured Bank Borrowings | 9,410,583 | 9,150,932 | | Unsecured Bank Borrowings | 8,371 | 8,466 | | **Total** | **9,418,954** | **9,159,398** | | Due Within One Year | 7,648,932 | 7,432,244 | | Due After One Year | 1,770,022 | 1,727,154 | - Most bank borrowings are secured and repayable within one year, posing liquidity pressure[57](index=57&type=chunk) - Borrowings are secured by investment properties, leasehold land and buildings, properties under development, and proposed development projects, and guaranteed by the Company, subsidiaries, directors, and controlling shareholders[58](index=58&type=chunk) [Other Borrowings](index=28&type=section&id=Other%20Borrowings) As of June 30, 2025, total other borrowings were HK$271,217 thousand, comprising HK$21,217 thousand from financial institutions (secured), HK$200,000 thousand from independent third parties (secured), and HK$50,000 thousand unsecured; all other borrowings are classified as current liabilities, repayable within one year, with interest rates ranging from prime rate plus 2.5% or a fixed annual rate of 12% Details of Other Borrowings | Item | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Borrowings from Financial Institutions (Secured) | 21,217 | 56,140 | | Other Borrowings (Secured) | 200,000 | 200,000 | | Other Borrowings (Unsecured) | 50,000 | 50,000 | | **Total** | **271,217** | **306,140** | | Due Within One Year | 271,217 | 306,140 | - All other borrowings are repayable within one year, and most are secured[60](index=60&type=chunk) - Secured borrowings are collateralized by investment properties, subsidiary shares, and pledged securities from margin clients, and guaranteed by a director and controlling shareholder of the Company[62](index=62&type=chunk) [Share Capital](index=30&type=section&id=Share%20Capital) As of June 30, 2025, the Company's issued and fully paid share capital increased to HK$144,231 thousand from HK$144,071 thousand at year-end, primarily due to the issuance of 1,600,000 ordinary shares upon the exercise of share options Overview of Share Capital Movements | Item | Number of Issued Ordinary Shares | Share Capital (HK$ thousand) | | :--- | :--- | :--- | | At January 1, 2024, December 31, 2024, and January 1, 2025 | 1,440,709,880 | 144,071 | | Exercise of Share Options | 1,600,000 | 160 | | At June 30, 2025 | 1,442,309,880 | 144,231 | - The increase in share capital primarily resulted from the exercise of share options[63](index=63&type=chunk) [Capital Commitments](index=30&type=section&id=Capital%20Commitments) As of June 30, 2025, the Group's total contracted but unprovided capital commitments amounted to HK$868,830 thousand, primarily for properties under development and investment properties, a decrease from HK$944,999 thousand at year-end Details of Capital Commitments | Item | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Investment Properties | 249,600 | 249,600 | | Properties Under Development | 590,073 | 677,780 | | Leasehold Property Improvements | 29,157 | 17,619 | | **Total** | **868,830** | **944,999** | - Capital commitments for properties under development decreased, but commitments for leasehold property improvements increased[64](index=64&type=chunk) [Discontinued Operations](index=31&type=section&id=Discontinued%20Operations) The Group disposed of its commercial printing and department store businesses in the second half of 2024; the commercial printing segment recorded a loss of HK$5,726 thousand in the first half of 2024, and the department store segment recorded a loss of HK$26,589 thousand, resulting in zero loss from discontinued operations for the current period - The Group disposed of the commercial printing segment on **August 6, 2024**, and 75% of the department store segment on **December 23, 2024**[65](index=65&type=chunk) - Loss from discontinued operations for the current period was **zero**, compared to **HK$32,315 thousand** in the prior year[67](index=67&type=chunk) [Commercial Printing Segment](index=32&type=section&id=Commercial%20Printing%20Segment) The commercial printing segment recorded a loss of HK$5,726 thousand in the first half of 2024, primarily due to higher administrative expenses; this business was disposed of on August 6, 2024 Commercial Printing Segment Results for H1 2024 | Metric | June 30, 2024 (HK$ thousand) | | :--- | :--- | | Revenue | 24,115 | | Cost of Sales | (7,050) | | Gross Profit | 17,065 | | Administrative Expenses | (22,298) | | Loss Before Tax | (5,824) | | Loss for the Period | (5,726) | - Net cash flow from operating activities was **HK$723 thousand**[68](index=68&type=chunk) [Department Store Segment](index=33&type=section&id=Department%20Store%20Segment) The department store segment recorded a loss of HK$26,589 thousand in the first half of 2024, primarily affected by selling and distribution expenses, administrative expenses, and finance costs; 75% of this business was disposed of on December 23, 2024 Department Store Segment Results for H1 2024 | Metric | June 30, 2024 (HK$ thousand) | | :--- | :--- | | Revenue | 64,950 | | Cost of Sales | (29,116) | | Gross Profit | 35,834 | | Selling and Distribution Expenses | (33,871) | | Administrative Expenses | (24,337) | | Finance Costs | (13,683) | | Loss Before Tax | (26,766) | | Loss for the Period | (26,589) | - Net cash flow used in operating activities was **HK$2,373 thousand**, and net cash flow used in financing activities was as high as **HK$87,100 thousand**[69](index=69&type=chunk) [Events After Reporting Period](index=33&type=section&id=Events%20After%20Reporting%20Period) On July 29, 2025, the Group executed loan renewal agreements with a bank, extending bank borrowings totaling HK$7,189,928 thousand to April 11, 2030, and April 11, 2035, respectively - After the reporting period, the Group successfully renewed bank borrowings totaling **HK$7,189,928 thousand**, extending the repayment periods[70](index=70&type=chunk) [Management Discussion and Analysis](index=34&type=section&id=Management%20Discussion%20and%20Analysis) [Overall Financial Review](index=34&type=section&id=Overall%20Financial%20Review) In the first half of 2025, the Group's total revenue increased by 6.4% year-on-year to HK$277.1 million, primarily driven by the environmental protection segment, while net loss from continuing operations narrowed to HK$496.2 million; gross profit decreased, and net other gains and losses swung from a gain to a loss, but fair value losses on investment properties and finance costs significantly decreased, partially offsetting the adverse impacts - The Group's total revenue increased by **6.4%** year-on-year to **HK$277.1 million**, and net loss from continuing operations narrowed to **HK$496.2 million**[72](index=72&type=chunk) [Total Revenue](index=35&type=section&id=Total%20Revenue) Total revenue for the first half of 2025 was HK$277.1 million, a 6.4% year-on-year increase, primarily benefiting from significant growth in environmental protection segment revenue, but partially offset by decreased revenue from the property, financial services, auto parts, and Latin America and Caribbean segments Revenue Analysis by Segment | Segment | H1 2025 (HK$ million) | Share (%) | H1 2024 (HK$ million) | Share (%) | Revenue Increase/(Decrease) (HK$ million) | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Property Segment | 16.9 | 6.1% | 22.2 | 8.5% | (5.3) | (23.9)% | | Financial Services Segment | 43.1 | 15.6% | 87.3 | 33.5% | (44.2) | (50.6)% | | Environmental Protection Segment | 211.8 | 76.4% | 136.7 | 52.5% | 75.1 | 54.9% | | Auto Parts Segment | – | – | 1.7 | 0.6% | (1.7) | (100.0)% | | Latin America and Caribbean Segment | 3.7 | 1.3% | 11.4 | 4.4% | (7.7) | (67.5)% | | Others | 1.6 | 0.6% | 1.2 | 0.5% | 0.4 | 33.3% | | **Total** | **277.1** | **100.0%** | **260.5** | **100.0%** | **16.6** | **6.4%** | - Environmental protection segment revenue grew by **54.9%**, being the main contributor to total revenue growth[73](index=73&type=chunk) [Gross Profit](index=35&type=section&id=Gross%20Profit) Gross profit for the first half of 2025 was HK$64.8 million, a decrease of HK$18.2 million from HK$83.0 million in the prior year, primarily due to reduced revenue from the property, financial services, and Latin America and Caribbean segments Gross Profit Change | Metric | H1 2025 (HK$ million) | H1 2024 (HK$ million) | Change (HK$ million) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Gross Profit | 64.8 | 83.0 | (18.2) | (21.9)% | - The decrease in gross profit was mainly affected by reduced revenue from the property, financial services, and Latin America and Caribbean segments[74](index=74&type=chunk) [Other Income](index=35&type=section&id=Other%20Income) Other income for the first half of 2025 was HK$6.8 million, a slight increase from HK$6.0 million in the prior year, primarily including interest income from credit-impaired loans of HK$3.6 million and bank interest income of HK$1.0 million Main Components of Other Income | Item | H1 2025 (HK$ million) | H1 2024 (HK$ million) | | :--- | :--- | :--- | | Interest Income from Credit-Impaired Loans | 3.6 | 3.5 | | Bank Interest Income | 1.0 | 1.2 | [Net Other Gains and Losses](index=36&type=section&id=Net%20Other%20Gains%20and%20Losses) Net other losses for the first half of 2025 were HK$90.1 million, compared to a gain of HK$76.6 million in the prior year, mainly due to net exchange losses of HK$91.5 million resulting from the appreciation of RMB against HKD, and a swing from unrealised fair value losses to gains on financial assets at fair value through profit or loss Net Other Gains and Losses Change | Item | H1 2025 (HK$ million) | H1 2024 (HK$ million) | | :--- | :--- | :--- | | Net Exchange (Losses)/Gains | (91.5) | 77.9 | | Unrealised Fair Value Gains/(Losses) on Financial Assets at Fair Value Through Profit or Loss | 0.5 | (1.3) | - RMB appreciation leading to exchange losses is the primary reason[76](index=76&type=chunk) [Net Impairment Losses](index=36&type=section&id=Net%20Impairment%20Losses) Net impairment losses for the first half of 2025 were HK$54.8 million, a decrease from HK$81.1 million in the prior year, primarily due to an increase of HK$47.5 million in expected credit losses on trade receivables and an increase of HK$7.1 million in expected credit losses on loans receivable Components of Net Impairment Losses | Item | H1 2025 (HK$ million) | H1 2024 (HK$ million) | | :--- | :--- | :--- | | Increase in Expected Credit Losses on Trade Receivables | 47.5 | 79.2 | | Increase in Expected Credit Losses on Receivables from Securities Brokerage | 0.2 | 0.5 | | Increase in Expected Credit Losses on Loans Receivable | 7.1 | 1.4 | | **Total** | **54.8** | **81.1** | - Increased credit risk for long-outstanding trade receivables in the environmental protection and auto parts segments led to higher impairment losses on trade receivables[78](index=78&type=chunk) [Net Loss from Fair Value Change of Investment Properties](index=36&type=section&id=Net%20Loss%20from%20Fair%20Value%20Change%20of%20Investment%20Properties) Net loss from fair value change of investment properties for the first half of 2025 was HK$54.2 million, a significant narrowing from HK$211.7 million in the prior year, primarily due to the continued stagnation of the Mainland China property market, but with a mitigated degree of deterioration Net Loss from Fair Value Change of Investment Properties | Metric | H1 2025 (HK$ million) | H1 2024 (HK$ million) | | :--- | :--- | :--- | | Net Loss | 54.2 | 211.7 | - The narrowing of losses primarily reflects a mitigated deterioration in the Mainland China property market[79](index=79&type=chunk) [Selling and Distribution Expenses](index=37&type=section&id=Selling%20and%20Distribution%20Expenses) Selling and distribution expenses decreased to HK$1.9 million in the first half of 2025, a reduction of HK$1.8 million from HK$3.7 million in the prior year, mainly because other intangible assets related to customer relationships were fully amortised in February 2024 Selling and Distribution Expenses Change | Metric | H1 2025 (HK$ million) | H1 2024 (HK$ million) | | :--- | :--- | :--- | | Selling and Distribution Expenses | 1.9 | 3.7 | - The full amortisation of customer relationship intangible assets is the main reason for the decrease in expenses[80](index=80&type=chunk) [Administrative Expenses](index=37&type=section&id=Administrative%20Expenses) Administrative expenses decreased to HK$83.0 million in the first half of 2025, a reduction of HK$1.4 million from HK$84.4 million in the prior year, primarily due to a HK$1.3 million decrease in staff costs Administrative Expenses Change | Metric | H1 2025 (HK$ million) | H1 2024 (HK$ million) | | :--- | :--- | :--- | | Administrative Expenses | 83.0 | 84.4 | - Reduced staff costs are the primary reason for the decrease in administrative expenses[81](index=81&type=chunk) [Finance Costs](index=37&type=section&id=Finance%20Costs) Finance costs decreased to HK$296.0 million in the first half of 2025, a reduction of HK$67.8 million from HK$363.8 million in the prior year, primarily due to a HK$68.1 million decrease in interest on bank borrowings resulting from lower interest rates in Mainland China Finance Costs Change | Metric | H1 2025 (HK$ million) | H1 2024 (HK$ million) | | :--- | :--- | :--- | | Finance Costs | 296.0 | 363.8 | - Lower interest rates in Mainland China leading to reduced bank borrowing interest is the main reason for the decrease in finance costs[82](index=82&type=chunk) [Net Loss](index=37&type=section&id=Net%20Loss) Net loss for the first half of 2025 narrowed to HK$496.2 million from HK$551.0 million in the prior year; the narrowing of losses was primarily due to reduced fair value losses on investment properties, net impairment losses, and finance costs, as well as the elimination of losses from discontinued operations, though partially offset by net exchange losses and decreased gross profit Net Loss Change | Metric | H1 2025 (HK$ million) | H1 2024 (HK$ million) | | :--- | :--- | :--- | | Net Loss | 496.2 | 551.0 | - Net exchange losses and decreased gross profit adversely affected performance[83](index=83&type=chunk) - Reduced fair value losses on investment properties, net impairment losses, finance costs, and the elimination of losses from discontinued operations partially mitigated the adverse impacts[84](index=84&type=chunk) [Financial Review by Segment](index=38&type=section&id=Financial%20Review%20by%20Segment) This section provides a detailed review of the financial performance of each of the Group's continuing business segments; property segment rental income decreased but segment loss narrowed, financial services segment revenue and profit both significantly decreased, environmental protection segment revenue significantly grew and loss substantially narrowed, auto parts segment had no revenue and increased loss, Latin America and Caribbean segment revenue decreased and loss increased, and discontinued operations had no loss for the period [Property Segment](index=38&type=section&id=Property%20Segment) In the first half of 2025, property segment rental income was HK$16.9 million, a 23.9% year-on-year decrease, mainly due to fewer tenants at Sincere Shopping Centre; segment loss narrowed to HK$199.1 million, primarily benefiting from reduced fair value losses on investment properties Property Segment Financial Performance | Metric | H1 2025 (HK$ million) | H1 2024 (HK$ million) | | :--- | :--- | :--- | | Rental Income | 16.9 | 22.2 | | Segment Loss | (199.1) | (378.6) | - The decrease in rental income was mainly due to fewer tenants in the shopping center[85](index=85&type=chunk) - The narrowing of segment loss primarily benefited from reduced fair value losses on investment properties[85](index=85&type=chunk) [Financial Services Segment](index=38&type=section&id=Financial%20Services%20Segment) In the first half of 2025, financial services segment revenue was HK$43.1 million, a 50.6% year-on-year decrease, mainly due to reduced interest income from margin financing and money lending businesses, and no financial services income from share placement and underwriting projects during the period; segment profit decreased to HK$18.5 million, primarily affected by lower gross profit and increased provision for expected credit losses Financial Services Segment Financial Performance | Metric | H1 2025 (HK$ million) | H1 2024 (HK$ million) | | :--- | :--- | :--- | | Revenue | 43.1 | 87.3 | | Segment Profit | 18.5 | 30.6 | - The decrease in revenue was mainly due to the absence of financial services income (share placement and underwriting)[86](index=86&type=chunk) - The decline in segment profit was primarily affected by reduced gross profit and increased provision for expected credit losses[86](index=86&type=chunk) [Environmental Protection Segment](index=38&type=section&id=Environmental%20Protection%20Segment) In the first half of 2025, environmental protection segment revenue increased to HK$211.8 million, a significant 54.9% year-on-year growth, mainly due to the expansion of the Group's customer network in Mainland China; segment loss significantly narrowed to HK$25.0 million, primarily benefiting from increased gross profit and reduced provision for expected credit losses Environmental Protection Segment Financial Performance | Metric | H1 2025 (HK$ million) | H1 2024 (HK$ million) | | :--- | :--- | :--- | | Revenue | 211.8 | 136.7 | | Segment Loss | (25.0) | (71.3) | - Revenue growth primarily benefited from the expansion of the customer network in Mainland China[87](index=87&type=chunk) - The narrowing of segment loss was mainly due to increased gross profit and reduced provision for expected credit losses[88](index=88&type=chunk) [Auto Parts Segment](index=39&type=section&id=Auto%20Parts%20Segment) In the first half of 2025, the auto parts segment had no revenue, compared to HK$1.7 million in the prior year, primarily due to the Group's stricter credit control over customers and continuous scaling down of operations; segment loss increased to HK$25.1 million, mainly due to decreased revenue and increased provision for expected credit losses on long-outstanding trade receivables Auto Parts Segment Financial Performance | Metric | H1 2025 (HK$ million) | H1 2024 (HK$ million) | | :--- | :--- | :--- | | Revenue | – | 1.7 | | Segment Loss | (25.1) | (13.0) | - Zero revenue and increased segment loss reflect business contraction and increased credit risk[89](index=89&type=chunk) [Latin America and Caribbean Segment](index=39&type=section&id=Latin%20America%20and%20Caribbean%20Segment) In the first half of 2025, Latin America and Caribbean segment revenue was HK$3.7 million, a 67.5% year-on-year decrease, mainly due to a reduction in the number of citizenship by investment applications approved by the relevant minister in Grenada; segment loss increased to HK$8.6 million, primarily due to decreased revenue, but partially offset by reduced amortisation of other intangible assets related to customer relationships Latin America and Caribbean Segment Financial Performance | Metric | H1 2025 (HK$ million) | H1 2024 (HK$ million) | | :--- | :--- | :--- | | Revenue | 3.7 | 11.4 | | Segment Loss | (8.6) | (6.7) | - The decrease in revenue was mainly due to fewer citizenship by investment applications[90](index=90&type=chunk) - Segment loss increased, but reduced amortisation of customer relationship intangible assets partially mitigated the loss[90](index=90&type=chunk) [Discontinued Operations](index=39&type=section&id=Discontinued%20Operations) The Group disposed of its commercial printing segment on August 6, 2024, and 75% of its department store segment on December 23, 2024; consequently, there was no loss from discontinued operations in the first half of 2025, whereas in the first half of 2024, the commercial printing and department store segments recorded losses of HK$5.7 million and HK$26.6 million, respectively - The commercial printing segment and department store segment were sold in the second half of 2024[91](index=91&type=chunk)[92](index=92&type=chunk) - There was no loss from discontinued operations in the first half of 2025[91](index=91&type=chunk)[92](index=92&type=chunk) [Liquidity, Financial Resources and Capital Structure](index=40&type=section&id=Liquidity,%20Financial%20Resources%20and%20Capital%20Structure) The Group primarily meets its working capital needs through internal cash flow, cash reserves, bank financing, other borrowings, and ultimate holding company credit; as of June 30, 2025, cash and bank balances were HK$40.0 million, and the gearing ratio increased to 534.0%, indicating high leverage, while the Group faces foreign exchange risk but currently does not use hedging instruments, and substantial corporate guarantees and asset pledges are integral to its financing structure - The Group primarily funds its operations through internal cash flow, cash reserves, bank financing, other borrowings, and ultimate holding company credit[93](index=93&type=chunk) [Cash and Bank Balances](index=40&type=section&id=Cash%20and%20Bank%20Balances) As of June 30, 2025, cash and bank balances were HK$40.0 million, an increase from HK$30.7 million at year-end, primarily denominated in HKD and RMB Cash and Bank Balances | Metric | June 30, 2025 (HK$ million) | December 31, 2024 (HK$ million) | | :--- | :--- | :--- | | Cash and Bank Balances | 40.0 | 30.7 | [Gearing Ratio](index=40&type=section&id=Gearing%20Ratio) As of June 30, 2025, the Group's gearing ratio significantly increased to 534.0% from 456.3% at year-end, reflecting high leverage; total interest-bearing borrowings amounted to HK$12,741.4 million, with annual interest rates ranging from 2.65% to 12% Gearing Ratio | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Gearing Ratio | 534.0% | 456.3% | | Interest-Bearing Borrowings (HK$ million) | 12,741.4 | 12,327.8 | | Equity Attributable to Owners of the Company (HK$ million) | 2,385.9 | 2,701.7 | - The gearing ratio significantly increased, indicating the Group's high financial leverage[94](index=94&type=chunk) [Foreign Exchange Risk](index=40&type=section&id=Foreign%20Exchange%20Risk) The Group's transactions are mostly denominated in HKD, USD, JPY, RMB, and XCD, with HKD as the reporting currency; the Group faces foreign exchange risk against HKD for USD, EUR, JPY, RMB, and XCD, but did not use financial hedging instruments as of June 30, 2025 - The Group faces multi-currency foreign exchange risk but currently does not hedge[95](index=95&type=chunk) [Guarantees and Pledges](index=41&type=section&id=Guarantees%20and%20Pledges) The Group's bank borrowings and some other borrowings are backed by multiple guarantees and pledges; the Company provides corporate guarantees of HK$8,680.2 million for subsidiaries and pledges assets such as investment properties and properties under development, while directors and controlling shareholders also provide personal guarantees of HK$9,400.6 million, and other borrowings also involve corporate guarantees, investment property pledges, and directors' personal guarantees - The Company provides **HK$8,680.2 million** in corporate guarantees for subsidiaries[96](index=96&type=chunk) - Bank borrowings are secured by investment properties, leasehold land and buildings, properties under development, and proposed development projects[96](index=96&type=chunk) - Directors and controlling shareholders provide **HK$9,400.6 million** in personal guarantees[96](index=96&type=chunk) - Other borrowings also involve corporate guarantees, investment property pledges, and directors' personal guarantees[97](index=97&type=chunk) [Business Review by Segment](index=42&type=section&id=Business%20Review%20by%20Segment) This section reviews the operational status of the Group's business segments; the property segment saw decreased rental income but narrowed losses, financial services segment revenue and profit both significantly decreased, environmental protection segment revenue significantly grew and losses substantially narrowed, auto parts segment had no revenue and increased losses, Latin America and Caribbean segment revenue decreased and losses increased, and discontinued operations had no loss for the period - The global economy and business performance remain challenging, affected by geopolitical conflicts and global economic uncertainties[98](index=98&type=chunk) [Property Segment](index=42&type=section&id=Property%20Segment) The Group holds five property projects: Realord Garden, Zhangkengjing Property, Realord Science Park, Lai Ying Garden, and Xikeng Property; Sincere Shopping Centre in Realord Garden has 33 tenants, Phase I of Realord Science Park has signed a lease agreement with a hotel operator, with Phase II awaiting government approval, and redevelopment work for Xikeng Property and Lai Ying Garden is ongoing, while the land use change application for Zhangkengjing Property is still under review - The Group holds five property projects with varying development progress[100](index=100&type=chunk) - Redevelopment work for Xikeng Property and Lai Ying Garden is ongoing, and the land use change application for Zhangkengjing Property is still under review[101](index=101&type=chunk) [Financial Services Segment](index=43&type=section&id=Financial%20Services%20Segment) The financial services segment holds SFC Type 1, 4, 6, and 9 licenses and a money lenders license, committed to providing diversified high-quality services to clients in both primary and secondary markets - Holds multiple SFC licenses and a money lenders license, providing diversified financial services[102](index=102&type=chunk) [Environmental Protection Segment](index=43&type=section&id=Environmental%20Protection%20Segment) The environmental protection segment, benefiting from the substantial scale of Realord Environmental Japan, remains the Group's primary revenue source; this segment will focus on seeking new sources of metal waste and expanding new customer bases in Mainland China and Japan - Benefiting from the scale of its Japanese operations, it is the Group's primary revenue source[103](index=103&type=chunk) - Will expand into Mainland China and Japanese markets, seeking new waste material sources and customers[103](index=103&type=chunk) [Auto Parts Segment](index=43&type=section&id=Auto%20Parts%20Segment) The auto parts segment recorded a segment loss in the first half of 2025 due to stricter credit control over customers and continuous scaling down of operations - Segment loss resulted from stricter credit control and reduced operational scale[104](index=104&type=chunk) [Latin America and Caribbean Segment](index=43&type=section&id=Latin%20America%20and%20Caribbean%20Segment) The Latin America and Caribbean segment's main business involves providing citizenship application and consultancy services for investment citizenship programs and developing the Grenada project; the Grenada project entails developing mixed-use properties, attracting foreign investment through the investment citizenship program, where eligible investors can obtain permanent Grenadian citizenship and passports - The main business involves citizenship application and consultancy services for investment citizenship programs, and the development of the Grenada project[105](index=105&type=chunk) - The Grenada project attracts foreign investment through the investment citizenship program, offering permanent citizenship and passports[105](index=105&type=chunk) [Outlook and Corporate Strategy](index=44&type=section&id=Outlook%20and%20Corporate%20Strategy) The Group will continue to focus on developing existing property projects, the financial services segment will develop diversified investment products for stable growth, the environmental protection segment will prudently control costs and expand its customer base, the auto parts segment will closely monitor EV trends and prudently control costs, and the Latin America and Caribbean segment will leverage investment citizenship programs to expand overseas business and seek more investment opportunities and business partners in the Caribbean and Latin American regions [Property Segment](index=44&type=section&id=Property%20Segment) The Group will focus on developing its five existing property projects (Xikeng Property, Lai Ying Garden, Realord Garden, Realord Science Park, and Zhangkengjing Property) to ensure a favorable position in this segment - Will focus on developing the five existing property projects[106](index=106&type=chunk) [Financial Services Segment](index=44&type=section&id=Financial%20Services%20Segment) The financial services segment will continuously develop various investment products to meet market demand and provide diversified high-quality services to clients in the international capital market, with stable business growth expected in the second half of 2025 - Will develop diversified investment products, with stable business growth expected in the second half of the year[107](index=107&type=chunk) [Environmental Protection Segment](index=44&type=section&id=Environmental%20Protection%20Segment) The environmental protection segment will continue to exercise prudence, control operating costs, reduce credit risk, and expand its customer base by enhancing competitive advantages to maximize shareholder returns - Will prudently control costs, reduce credit risk, and expand the customer base[108](index=108&type=chunk) [Auto Parts Segment](index=44&type=section&id=Auto%20Parts%20Segment) With the growth of the electric vehicle market and decreasing demand for gasoline cars, the auto parts segment will exercise extreme prudence in cost control and closely monitor business development - Will prudently control costs and closely monitor electric vehicle market trends[109](index=109&type=chunk) [Latin America and Caribbean Segment](index=45&type=section&id=Latin%20America%20and%20Caribbean%20Segment) The Grenada project offers the Group opportunities for business diversification and overseas expansion; the Group has initiated the Grenada project and plans to leverage the investment citizenship program to seek more investment opportunities and identify strong business partners for project participation in the Caribbean economic zone and Latin America - The Grenada project offers opportunities for business diversification and overseas expansion[110](index=110&type=chunk) - Plans to leverage the investment citizenship program to seek more investment opportunities and business partners in the Caribbean and Latin American regions[110](index=110&type=chunk) [Contingent Liabilities, Commitments and Litigation](index=45&type=section&id=Contingent%20Liabilities,%20Commitments%20and%20Litigation) As of June 30, 2025, the Group had no significant contingent liabilities or litigation, and capital commitments are disclosed in Note 16 - No significant contingent liabilities[111](index=111&type=chunk) - No significant litigation[113](index=113&type=chunk) [Other Information](index=46&type=section&id=Other%20Information) [Significant Investments, Acquisitions and Disposals](index=46&type=section&id=Significant%20Investments,%20Acquisitions%20and%20Disposals) For the six months ended June 30, 2025, the Group held no significant investments, nor were there any significant acquisitions or disposals of subsidiaries and associates - No significant investments, acquisitions, or disposals of subsidiaries and associates during the period[114](index=114&type=chunk) [Events After Reporting Period](index=46&type=section&id=Events%20After%20Reporting%20Period) Except for the bank loan renewals disclosed in Note 18 to the condensed consolidated interim financial statements, no other significant events after the reporting period have occurred as of the date of this announcement - No other significant events after the reporting period, except for bank loan renewals[115](index=115&type=chunk) [Dividends](index=46&type=section&id=Dividends) The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025 - No interim dividend recommended for payment[116](index=116&type=chunk) [Directors' Interests in Competing Business](index=46&type=section&id=Directors'%20Interests%20in%20Competing%20Business) None of the Company's directors or their respective associates have any interests in any business that competes or may compete, directly or indirectly, with the Group's business, or any other conflicts of interest with the Group - Directors and their associates have no competing business interests or conflicts of interest[117](index=117&type=chunk) [Corporate Governance](index=46&type=section&id=Corporate%20Governance) [Corporate Governance Practices](index=46&type=section&id=Corporate%20Governance%20Practices) The Company is committed to adhering to good corporate governance practices and believes it has complied with

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其準確性或完 整性亦不發表任何聲明，並明確表示，概不對因本公告全部或任何部分內容而產生或因倚賴該等內 容而引致的任何損失承擔任何責任。 CHINA SUNTIEN GREEN ENERGY CORPORATION LIMITED* 新天綠色能源股份有限公司 （於中華人民共和國註冊成立的股份有限公司） （股份代號：00956） 截至2025年6月30日止六個月之中期業績 財務資料摘要 截至2025年6月30日止六個月： 新天綠色能源股份有限公司（「公司」或「本公司」，連同其附屬公司，統稱「本集團」）董事會（「董事會」） 謹此宣佈本集團截至2025年6月30日止六個月期間（「報告期」）之未經審計的中期合併業績。此中期業 績已由董事會審計委員會審閱。 本集團詳細的財務表現請參見本公告附錄所載財務信息。 1 ‧ 營業收入為人民幣109.04億元，較去年同期下降10.16%； ‧ 歸屬於上市公司股東的淨利潤為人民幣14.12億元，較去年同期下降1.23%；及 ‧ 基本每股收益為人民幣0.34元。 管理層討論與分析 一、 報告期內公司所屬行業及主營 ...

Condensed Consolidated Interim Financial Statements [Condensed Consolidated Statement of Profit or Loss](index=2&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) The Group recorded a net loss of HK$26.468 million in H1 2025, a slight improvement from H1 2024, primarily due to significantly reduced finance costs Condensed Consolidated Statement of Profit or Loss (For the six months ended June 30) | Indicator | H1 2025 (HK$ thousand) | H1 2024 (HK$ thousand) | Change (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | 64,308 | 65,050 | (742) | -1.14% | | Cost of Sales | (33,904) | (29,116) | (4,788) | 16.44% | | Other Income and Net Gains | 10,180 | 10,368 | (188) | -1.81% | | Net Unrealized Loss on Securities Trading | (669) | (122) | (547) | 448.36% | | Selling and Distribution Expenses | (34,155) | (33,476) | (679) | 2.03% | | General and Administrative Expenses | (24,126) | (25,091) | 965 | -3.85% | | Other Net Operating Expenses | (23) | – | (23) | - | | Finance Costs | (8,073) | (14,275) | 6,202 | -43.45% | | Loss Before Income Tax | (26,462) | (26,662) | 200 | -0.75% | | Income Tax Expense | (6) | – | (6) | - | | Loss for the Period | (26,468) | (26,662) | 194 | -0.73% | | Loss Attributable to Owners of the Company | (26,684) | (27,260) | 576 | -2.11% | | Basic and Diluted Loss Per Share (HK$) | (0.02) | (0.02) | 0.00 | 0.00% | [Condensed Consolidated Statement of Comprehensive Income](index=3&type=section&id=Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) The Group's H1 2025 total comprehensive loss increased to HK$26.423 million from HK$24.774 million in H1 2024, mainly due to the absence of a property revaluation surplus Condensed Consolidated Statement of Comprehensive Income (For the six months ended June 30) | Indicator | H1 2025 (HK$ thousand) | H1 2024 (HK$ thousand) | Change (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Loss for the Period | (26,468) | (26,662) | 194 | -0.73% | | Other Comprehensive Income: | | | | | | Exchange Differences Arising from Translation of Foreign Operations | 45 | 5 | 40 | 800.00% | | Surplus on Revaluation of Leasehold Land and Buildings | – | 1,883 | (1,883) | -100.00% | | Total Comprehensive Loss for the Period | (26,423) | (24,774) | (1,649) | 6.66% | | Attributable to Owners of the Company | (25,853) | (25,415) | (438) | 1.72% | | Attributable to Non-controlling Interests | (570) | 641 | (1,211) | -188.92% | [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 net assets significantly decreased by **28.60%** to **HK$65.967 million**, primarily due to a substantial increase in net current liabilities Condensed Consolidated Statement of Financial Position (As at June 30, 2025) | Indicator | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | **ASSETS** | | | | | | Non-current Assets | 277,125 | 266,636 | 10,489 | 3.93% | | Current Assets | 73,097 | 77,306 | (4,209) | -5.44% | | **LIABILITIES** | | | | | | Current Liabilities | 268,750 | 81,536 | 187,214 | 229.61% | | Non-current Liabilities | 15,505 | 170,016 | (154,511) | -90.88% | | **EQUITY** | | | | | | Net Assets | 65,967 | 92,390 | (26,423) | -28.60% | | Equity Attributable to Owners of the Company | 20,737 | 46,590 | (25,853) | -55.49% | | Non-controlling Interests | 45,230 | 45,800 | (570) | -1.24% | | Total Equity | 65,967 | 92,390 | (26,423) | -28.60% | | Net Current Liabilities | (195,653) | (4,230) | (191,423) | 4525.37% | - Net current liabilities significantly increased from **HK$4.230 million** as of December 31, 2024, to **HK$195.653 million** as of June 30, 2025, a **4525.37%** increase, indicating a substantial rise in liquidity pressure[6](index=6&type=chunk) [Notes to the Condensed Consolidated Interim Financial Statements](index=6&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Interim%20Financial%20Statements) [1. Company Information](index=6&type=section&id=1.%20Company%20Information) The Company is a limited liability company incorporated in Hong Kong, primarily engaged in department store operations, securities trading, and life insurance provision, with Merill Holdings Limited as its direct holding company - The Group's principal activities include operating department stores, trading securities, and providing life insurance, with no change in business nature during the period[8](index=8&type=chunk) - Merill Holdings Limited is the Company's direct holding company, with Dr. Lam Hiu Fung and Ms. So Kiu Wah as ultimate shareholders, holding 70% and 30% equity respectively in Merill Holdings[8](index=8&type=chunk) [2. Basis of Preparation](index=6&type=section&id=2.%20Basis%20of%20Preparation) The condensed consolidated interim financial statements are prepared in accordance with HKAS 34 and the Listing Rules, presented in HK$, with accounting policies consistent with annual statements except for adopted HKFRSs, and management assessing going concern with various measures to improve profitability and liquidity - The condensed consolidated interim financial statements are prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" issued by the HKICPA and the applicable disclosure requirements of Appendix D2 to the Listing Rules of the Stock Exchange[9](index=9&type=chunk) - The current period's financial information (as comparative data) is extracted from the statutory annual consolidated financial statements for the year ended December 31, 2024, which received an unmodified auditor's report but highlighted material uncertainties regarding going concern[10](index=10&type=chunk) [Going Concern Basis](index=7&type=section&id=Going%20Concern%20Basis) The Group recorded a net loss of HK$26.468 million and had net current liabilities of HK$195.653 million with cash and bank balances of HK$8.926 million in H1 2025, indicating significant going concern uncertainty, despite management's measures and financial support commitments - The Group recorded a net loss of **HK$26.468 million** in H1 2025, with net current liabilities of **HK$195.653 million** and cash and bank balances of **HK$8.926 million**, indicating significant uncertainty regarding its ability to continue as a going concern[11](index=11&type=chunk) - Management has implemented measures to improve profitability and liquidity, including revising marketing strategies, controlling capital and operating expenditures, negotiating rent reductions, and identifying asset realization opportunities[11](index=11&type=chunk) - Dr. Lam and Merill Holdings have committed to providing continuous financial support for at least twelve months, and a related company has provided a loan facility of up to **HK$260 million**, of which **HK$80.392 million** remained undrawn as of June 30, 2025[11](index=11&type=chunk)[12](index=12&type=chunk) [3. Adoption of New and Revised HKFRSs](index=8&type=section&id=3.%20Adoption%20of%20New%20and%20Revised%20HKFRSs) The Group adopted HKAS 21 (Amendment) "Lack of Exchangeability" on January 1, 2025, with no material impact on the interim financial statements, and other new HKFRSs are not expected to have a significant effect - The Group adopted HKAS 21 (Amendment) "Lack of Exchangeability" on January 1, 2025, which had no material impact on the condensed consolidated interim financial statements[14](index=14&type=chunk)[15](index=15&type=chunk) - Several new and revised HKFRSs issued but not yet effective are not expected to have a significant impact on the Group's condensed consolidated interim financial statements[16](index=16&type=chunk)[17](index=17&type=chunk) [4. Segment Information](index=9&type=section&id=4.%20Segment%20Information) The Group reports segment information by operating segments (department store, securities trading, and others) and geographical areas (Hong Kong, UK, and others), with management assessing performance based on adjusted loss before income tax - The Group's operating segments include department store business (providing consumer goods), securities trading (trading Hong Kong and overseas securities), and others (sub-leasing properties and life insurance)[18](index=18&type=chunk)[20](index=20&type=chunk) - Segment results are assessed based on reportable segment profit/(loss), which is an adjusted loss before income tax, excluding certain interest income, unallocated income/(expenses), and finance costs[21](index=21&type=chunk) [(a) Operating Segments](index=10&type=section&id=(a)%20Operating%20Segments) The department store business segment saw a slight revenue decrease but an increased segment loss in H1 2025, while the securities trading segment recorded net unrealized losses despite increased dividend income, and other segments' losses slightly decreased Operating Segment Revenue and Results (For the six months ended June 30) | Segment | 2025 Revenue (HK$ thousand) | 2024 Revenue (HK$ thousand) | 2025 Results (HK$ thousand) | 2024 Results (HK$ thousand) | | :--- | :--- | :--- | :--- | :--- | | Department Store Business | 64,263 | 65,293 | (23,709) | (17,309) | | Securities Trading | 376 | (257) | (1,253) | (1,340) | | Others | 15,307 | 16,735 | (3,415) | (3,628) | | Total (after elimination) | 64,899 | 65,812 | (28,377) | (22,277) | Operating Segment Assets and Liabilities (As at June 30, 2025) | Segment | 2025 Assets (HK$ thousand) | 2024 Assets (HK$ thousand) | 2025 Liabilities (HK$ thousand) | 2024 Liabilities (HK$ thousand) | | :--- | :--- | :--- | :--- | :--- | | Department Store Business | 117,305 | 116,979 | 103,855 | 109,563 | | Securities Trading | 6,967 | 7,636 | 1,032 | 948 | | Others | 20,326 | 36,165 | 5,395 | 5,194 | | Total (after elimination) | 129,551 | 129,932 | 95,235 | 84,857 | [(b) Geographical Information](index=11&type=section&id=(b)%20Geographical%20Information) The vast majority of the Group's revenue from external customers is generated in Hong Kong, with a small contribution from the UK and no revenue from other regions Revenue by Geographical Information (For the six months ended June 30) | Region | 2025 Revenue (HK$ thousand) | 2024 Revenue (HK$ thousand) | | :--- | :--- | :--- | | Hong Kong | 64,204 | 64,949 | | United Kingdom | 104 | 101 | | Others | – | – | | Total | 64,308 | 65,050 | [5. Revenue, Other Income and Net Gains](index=12&type=section&id=5.%20Revenue,%20Other%20Income%20and%20Net%20Gains) The Group's total revenue slightly decreased, with increased sales of own goods offset by reduced counter sales and consignment income, while other income and net gains remained stable, primarily from imputed interest income from Win Dynamic Revenue Sources (For the six months ended June 30) | Revenue Source | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Sales of goods – own goods | 51,460 | 48,944 | | Income from counter sales and consignment | 12,744 | 16,335 | | Net realized loss on securities trading | – | (330) | | Rental income | 104 | 101 | | Total Revenue | 64,308 | 65,050 | Other Income and Net Gains (For the six months ended June 30) | Item | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Bank interest income | 194 | 156 | | Imputed interest income from Win Dynamic donation | 9,426 | 9,424 | | Dividends from financial assets at fair value through profit or loss | 376 | 72 | | Net exchange (loss)/gain | (31) | 26 | | Others | 215 | 690 | | Total | 10,180 | 10,368 | - The transaction price for the customer loyalty program provision was **HK$1,014,000** (2024: **HK$1,202,000**), expected to be recognized as revenue within one year[34](index=34&type=chunk) [6. Loss Before Income Tax](index=13&type=section&id=6.%20Loss%20Before%20Income%20Tax) The Group's loss before income tax was primarily influenced by employee benefit expenses, depreciation, inventory provisions, expected credit loss provisions, and leasehold property-related charges, with employee benefits and lease charges increasing while depreciation significantly decreased Major Deductions for Loss Before Income Tax (For the six months ended June 30) | Item | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Employee benefit expenses (excluding directors' and chief executive's emoluments) | 18,668 | 16,848 | | Depreciation | 9,831 | 16,670 | | Provision for inventories | 389 | 580 | | Provision for expected credit losses on other receivables | 632 | 626 | | Other charges related to leasehold properties | 17,214 | 9,472 | [7. Income Tax Expense](index=14&type=section&id=7.%20Income%20Tax%20Expense) No provision for Hong Kong profits tax was made due to the absence of assessable profits in Hong Kong during the period, while other regions incurred a small amount of assessable profits tax Income Tax Expense (For the six months ended June 30) | Region | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Hong Kong | – | – | | Other Regions | 6 | – | | Total | 6 | – | [8. Loss Per Share Attributable to Owners of the Company](index=14&type=section&id=8.%20Loss%20Per%20Share%20Attributable%20to%20Owners%20of%20the%20Company) For the six months ended June 30, 2025, both basic and diluted loss per share attributable to owners of the Company remained at HK$0.02, consistent with the prior period, due to unchanged ordinary shares in issue and no potential dilutive ordinary shares Loss Per Share (For the six months ended June 30) | Indicator | 2025 (HK$) | 2024 (HK$) | | :--- | :--- | :--- | | Loss Attributable to Owners of the Company | (26,684) | (27,260) | | Weighted Average Number of Ordinary Shares in Issue | 1,313,962,560 | 1,313,962,560 | | Basic and Diluted Loss Per Share | (0.02) | (0.02) | [9. Dividends](index=14&type=section&id=9.%20Dividends) The Board of Directors resolved not to declare an interim dividend for the six months ended June 30, 2025, consistent with the corresponding period in 2024 - The Board of Directors resolved not to declare an interim dividend for H1 2025 (2024: nil)[40](index=40&type=chunk) [10. Property, Plant and Equipment](index=15&type=section&id=10.%20Property,%20Plant%20and%20Equipment) As of June 30, 2025, the net book value of property, plant and equipment increased to HK$20.947 million, primarily due to additions and lease changes, partially offset by depreciation and disposals Movement in Property, Plant and Equipment (As at June 30, 2025) | Item | Owned Assets (HK$ thousand) | Right-of-use Assets (HK$ thousand) | Total (HK$ thousand) | | :--- | :--- | :--- | :--- | | Net Book Value as at January 1, 2025 | 1,764 | 14,319 | 16,083 | | Additions | 1,397 | 274 | 1,671 | | Lease Changes | – | 13,064 | 13,064 | | Depreciation for the Period | (567) | (9,264) | (9,831) | | Disposals | (38) | – | (38) | | Written Off | (2) | – | (2) | | Net Book Value as at June 30, 2025 | 2,554 | 18,393 | 20,947 | [11. Prepayments, Deposits, Other Receivables and Other Assets](index=15&type=section&id=11.%20Prepayments,%20Deposits,%20Other%20Receivables%20and%20Other%20Assets) These assets primarily comprise amounts receivable from Win Dynamic donation, rental deposits, amounts due from credit card companies, and prepaid deposits for related company loans, with the Win Dynamic donation receivable showing a significant increase Prepayments, Deposits, Other Receivables and Other Assets (As at June 30, 2025) | Item | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Receivable from Win Dynamic donation | 202,527 | 193,101 | | Prepayments, deposits and other receivables | 40,060 | 39,040 | | Other assets | 4,421 | 4,421 | | Provision for expected credit losses | (1,886) | (1,254) | | Total | 245,122 | 235,308 | | Less: Classified as current portion | (20,867) | (16,678) | | Classified as non-current portion | 224,255 | 218,630 | - Amounts receivable from Win Dynamic donation increased from **HK$193.101 million** as of December 31, 2024, to **HK$202.527 million** as of June 30, 2025[42](index=42&type=chunk) [12. Trade Payables](index=16&type=section&id=12.%20Trade%20Payables) As of June 30, 2025, total trade payables were HK$40.310 million, a slight decrease from HK$41.392 million as of December 31, 2024, with a reduction in current to three-month payables and a significant increase in four to six-month payables Ageing Analysis of Trade Payables (As at end of reporting period) | Ageing | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Current to three months | 30,394 | 38,083 | | Four to six months | 7,794 | 1,195 | | Seven to twelve months | 109 | 55 | | Over one year | 2,013 | 2,059 | | Total | 40,310 | 41,392 | [13. Leases](index=16&type=section&id=13.%20Leases) The Group, as a lessee, leases retail stores and warehouses for typical terms of 1 to 3 years, with right-of-use assets and lease liabilities increasing due to additions and lease modifications - The Group leases retail stores and warehouses, with lease terms generally ranging from **1 to 3 years**, and some lease contracts include extension and termination options as well as variable lease payments[45](index=45&type=chunk) [(b) Lease Liabilities](index=17&type=section&id=(b)%20Lease%20Liabilities) Total lease liabilities increased from HK$13.643 million at the end of 2024 to HK$18.169 million as of June 30, 2025, primarily due to lease modifications and additions, partially offset by payments Movement in Lease Liabilities (As at June 30, 2025) | Item | H1 2025 (HK$ thousand) | FY 2024 (HK$ thousand) | | :--- | :--- | :--- | | At beginning of period/year | 13,643 | 11,913 | | Interest accrued during period/year | 1,031 | 1,609 | | Payments | (9,843) | (31,997) | | Additions | 274 | 9,389 | | Lease Changes | 13,064 | 22,729 | | At end of period/year | 18,169 | 13,643 | | Analysed as: Within one year | 9,597 | 7,319 | | Second to fifth year | 8,572 | 6,324 | [14. Bank Borrowings, Other Loans and Loans from Related Companies](index=18&type=section&id=14.%20Bank%20Borrowings,%20Other%20Loans%20and%20Loans%20from%20Related%20Companies) The Group's secured bank borrowings slightly increased, while other unsecured loans bear 2% annual interest, and unsecured related company loans (from Dr. Lam and Ms. So) bear HIBOR plus 5% interest, due March 2026, with approximately HK$179.6 million utilized - Secured bank borrowings amounted to **HK$8.834 million** (December 31, 2024: **HK$8.572 million**), bearing interest at HIBOR plus 1% per annum, and are secured by bank balances and time deposits of **HK$11.103 million**[48](index=48&type=chunk)[49](index=49&type=chunk) - Other loans amounted to **HK$576 thousand** (December 31, 2024: **HK$570 thousand**), are unsecured, bear interest at **2%** per annum, and are not repayable within 12 months after the reporting period[50](index=50&type=chunk)[53](index=53&type=chunk) - Loans from related companies (owned by Dr. Lam and Ms. So) are unsecured, bear interest at HIBOR plus **5%** per annum, and are repayable by March 20, 2026; approximately **HK$179.6 million** was utilized as of June 30, 2025[54](index=54&type=chunk)[89](index=89&type=chunk) [15. Share Capital](index=19&type=section&id=15.%20Share%20Capital) There was no change in the Company's share capital for the six months ended June 30, 2025, remaining at HK$469.977 million, comprising 1,313,962,560 ordinary shares Share Capital (As at June 30, 2025) | Item | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Issued and fully paid: 1,313,962,560 ordinary shares | 469,977 | 469,977 | [16. Litigation](index=20&type=section&id=16.%20Litigation) The Company is involved in a lawsuit with Win Dynamic regarding a deed of gift from 2020, where Win Dynamic pledged approximately HK$260.443 million from share sales to the Company, but later claimed the deed invalid, a claim the Company and Welab Group Holdings Limited dispute, with the litigation ongoing and related amounts recognized as assets - Win Dynamic executed a deed in 2020, pledging approximately **HK$260.443 million** from the sale of the Company's shares as working capital for the Company[57](index=57&type=chunk) - In 2021, Win Dynamic claimed the deed was invalid and immediately cancelled it, citing undue influence, duress, and undervalue transactions, a claim not recognized by the Company's Board of Directors (excluding dissenting directors)[58](index=58&type=chunk)[59](index=59&type=chunk) - Welab and the Company initiated legal proceedings against Win Dynamic and Mr. Ma King Hin in the High Court to enforce the deed and declare its validity; the Company has recognized **HK$200.641 million** (net of expected credit loss provision) as receivable from Win Dynamic donation and **HK$9.426 million** in imputed interest income[60](index=60&type=chunk)[62](index=62&type=chunk)[73](index=73&type=chunk) [17. Commitments and Contingent Liabilities](index=23&type=section&id=17.%20Commitments%20and%20Contingent%20Liabilities) As of the reporting period end, the Group's outstanding commitments primarily consist of irrevocable letters of credit totaling HK$1.536 million Commitments and Contingent Liabilities (As at end of reporting period) | Item | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Irrevocable letters of credit | 1,536 | 1,581 | Management Discussion and Analysis [Interim Results](index=24&type=section&id=Interim%20Results) The Group's principal activities during the review period were operating department stores, trading securities, and providing life insurance - The Group's principal activities during the review period were operating department stores, trading securities, and providing life insurance[76](index=76&type=chunk) [Overall Financial Review](index=24&type=section&id=Overall%20Financial%20Review) The Group's consolidated revenue slightly decreased by **1.2%** in H1 2025, with net loss marginally improving by **0.7%**, while gross profit fell by **15.3%** due to market weakness and promotions, partially offset by a **43.4%** reduction in finance costs Overall Financial Performance (For the six months ended June 30) | Indicator | H1 2025 (HK$ million) | H1 2024 (HK$ million) | Change (HK$ million) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Consolidated Revenue | 64.3 | 65.1 | (0.8) | -1.2% | | Net Loss | (26.5) | (26.7) | 0.2 | -0.7% | | Gross Profit | 30.4 | 35.9 | (5.5) | -15.3% | | Finance Costs | 8.1 | 14.3 | (6.2) | -43.4% | - The persistent weak consumer and retail market in Hong Kong led to extended promotional activities and price reductions in the department store business, consequently impacting gross profit[78](index=78&type=chunk) [Revenue](index=24&type=section&id=Revenue) In H1 2025, the Group's revenue was HK$64.3 million, a **1.2%** decrease from the prior year, primarily driven by the department store business Revenue Comparison (For the six months ended June 30) | Item | H1 2025 (HK$ million) | H1 2024 (HK$ million) | Change (HK$ million) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Total Revenue | 64.3 | 65.1 | (0.8) | -1.2% | | Department Store Business Revenue | 64.2 | 65.3 | (1.1) | -1.7% | [Other Income and Net Gains](index=24&type=section&id=Other%20Income%20and%20Net%20Gains) Other income and net gains for H1 2025 amounted to HK$10.2 million, a **1.9%** decrease from the prior year, primarily comprising stable imputed interest income from Win Dynamic donation Other Income and Net Gains Comparison (For the six months ended June 30) | Item | H1 2025 (HK$ million) | H1 2024 (HK$ million) | Change (HK$ million) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Other Income and Net Gains | 10.2 | 10.4 | (0.2) | -1.9% | | Imputed Interest from Win Dynamic Donation | 9.4 | 9.4 | 0.0 | 0.0% | [Selling and Distribution Expenses](index=25&type=section&id=Selling%20and%20Distribution%20Expenses) Selling and distribution expenses increased by **2.1%** to HK$34.2 million in H1 2025, mainly due to higher employee benefit expenses and short-term lease fees, despite a reduction in depreciation expenses Selling and Distribution Expenses Major Components (For the six months ended June 30) | Item | H1 2025 (HK$ million) | H1 2024 (HK$ million) | Change (HK$ million) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Total Selling and Distribution Expenses | 34.2 | 33.5 | 0.7 | 2.1% | | Depreciation Expenses | 8.1 | 16.4 | (8.3) | -50.6% | | Short-term Lease Fees and Other Occupancy Costs | 15.5 | 7.4 | 8.1 | 109.5% | | Employee Benefit Expenses | 9.4 | 8.3 | 1.1 | 13.3% | [General and Administrative Expenses](index=25&type=section&id=General%20and%20Administrative%20Expenses) General and administrative expenses decreased by **4.0%** to HK$24.1 million in H1 2025, primarily due to the absence of trademark registration fees in the current period, partially offset by increased depreciation expenses related to leased warehouses General and Administrative Expenses Comparison (For the six months ended June 30) | Item | H1 2025 (HK$ million) | H1 2024 (HK$ million) | Change (HK$ million) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Total General and Administrative Expenses | 24.1 | 25.1 | (1.0) | -4.0% | | Employee Benefit Expenses | 9.3 | 8.5 | 0.8 | 9.4% | | Trademark Registration Fees | 0.0 | 2.3 | (2.3) | -100.0% | [Finance Costs](index=25&type=section&id=Finance%20Costs) Finance costs significantly decreased by **43.4%** to HK$8.1 million in H1 2025, mainly attributable to reduced interest expenses on bank borrowings and loans from related companies Finance Costs Comparison (For the six months ended June 30) | Item | H1 2025 (HK$ million) | H1 2024 (HK$ million) | Change (HK$ million) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Total Finance Costs | 8.1 | 14.3 | (6.2) | -43.4% | | Decrease in Bank Borrowing Interest Expense | - | - | (2.4) | - | | Decrease in Related Company Loan Interest Expense | - | - | (3.9) | - | [Loss Attributable to Owners of the Company](index=25&type=section&id=Loss%20Attributable%20to%20Owners%20of%20the%20Company) The loss attributable to owners of the Company for H1 2025 was HK$26.7 million, a **2.2%** decrease from the prior year, indicating a slight improvement in overall profitability Loss Attributable to Owners of the Company Comparison (For the six months ended June 30) | Item | H1 2025 (HK$ million) | H1 2024 (HK$ million) | Change (HK$ million) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Loss Attributable to Owners of the Company | 26.7 | 27.3 | (0.6) | -2.2% | [Business Review](index=26&type=section&id=Business%20Review) [Department Store Business](index=26&type=section&id=Department%20Store%20Business) In H1 2025, department store business revenue decreased by **1.7%** to HK$64.2 million due to a weak Hong Kong consumer market, leading to extended promotions and price reductions, which increased segment loss by **37.0%** to HK$23.7 million, while inventory levels decreased by **14.9%** Department Store Business Performance (For the six months ended June 30) | Indicator | H1 2025 (HK$ million) | H1 2024 (HK$ million) | Change (HK$ million) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | 64.2 | 65.3 | (1.1) | -1.7% | | Segment Loss | (23.7) | (17.3) | (6.4) | 37.0% | | Inventory Level (Period-end) | 32.0 | 37.6 | (5.6) | -14.9% | - The weak consumer and retail market in Hong Kong led to extended promotional activities and price reductions, adversely affecting the department store business performance[85](index=85&type=chunk) [Securities Trading Business](index=26&type=section&id=Securities%20Trading%20Business) In H1 2025, the securities trading business recorded a net unrealized loss of approximately HK$0.7 million, while dividend income increased from HK$0.07 million to HK$0.4 million, with segment loss remaining at approximately HK$1.3 million, and the Group plans to regularly review and improve its investment portfolio Securities Trading Business Performance (For the six months ended June 30) | Indicator | H1 2025 (HK$ million) | H1 2024 (HK$ million) | | :--- | :--- | :--- | | Net Realized Loss | 0.0 | (0.3) | | Net Unrealized Loss | (0.7) | (0.1) | | Dividend Income | 0.4 | 0.07 | | Segment Loss | (1.3) | (1.3) | - The Group will regularly review and improve its investment portfolio based on market conditions and capital requirements[86](index=86&type=chunk) [Prospects](index=26&type=section&id=Prospects) The Group anticipates continued challenges in the Hong Kong retail sector due to a weak consumer market and growing online shopping trends, but management will continuously monitor and adjust department store business strategies, remaining optimistic with support from Dr. Lam and Merill Holdings - The Hong Kong retail sector is expected to continue facing challenges from a weak consumer and retail market and the increasing preference of retail customers for online shopping[87](index=87&type=chunk) - The Group will continue to monitor and flexibly adjust its department store business operating strategies to navigate the challenging operating environment[87](index=87&type=chunk) - With the support of Dr. Lam and Merill Holdings, the Board of Directors remains optimistic about the Group's prospects[88](index=88&type=chunk) [Liquidity and Financial Resources](index=27&type=section&id=Liquidity%20and%20Financial%20Resources) As of June 30, 2025, the Group's total cash and bank balances, pledged bank balances, and deposits amounted to approximately HK$20.0 million, a decrease from end-2024, facing net current liabilities of HK$195.7 million and a liquidity ratio of 0.27, indicating significant liquidity pressure, with management implementing measures to improve profitability and liquidity and monitoring exchange rate risks Liquidity Position (As at June 30, 2025) | Indicator | June 30, 2025 (HK$ million) | December 31, 2024 (HK$ million) | | :--- | :--- | :--- | | Cash and bank balances, pledged bank balances and deposits | 20.0 | 22.2 | | Pledged portion | 11.1 | 11.2 | | Unpledged cash and bank balances | 8.9 | 10.9 | | Interest-bearing bank borrowings | 8.8 | 8.6 | | Utilized related company loans | 179.6 | 157.6 | | Net current liabilities | 195.7 | 4.2 | | Equity attributable to owners of the Company | 20.7 | 46.6 | | Current Ratio | 0.27 | 0.95 | | Capital to Debt Ratio | 314% | 195% | - Management is implementing measures to improve profitability, control operating costs, and reduce capital expenditures to enhance operational performance and mitigate liquidity risks[91](index=91&type=chunk) - The Group currently has no foreign exchange hedging policy, but management will continue to closely monitor foreign exchange risks[92](index=92&type=chunk) [Employees and Remuneration Policy](index=28&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the Group had 191 employees and offers a diverse remuneration package including basic salary, discretionary bonuses, sales commissions, defined benefit retirement plans, MPF, staff purchase discounts, medical, and training subsidies Number of Employees | Date | Number of Employees | | :--- | :--- | | June 30, 2025 | 191 | | December 31, 2024 | 199 | - The Group provides employee benefits such as basic salary, discretionary bonuses, sales commissions, defined benefit retirement plans, Mandatory Provident Fund schemes, staff purchase discounts, medical, and training subsidies[93](index=93&type=chunk) [Interim Dividend](index=28&type=section&id=Interim%20Dividend) The Board of Directors has resolved not to declare an interim dividend for H1 2025 - The Board of Directors has resolved not to declare an interim dividend for H1 2025[94](index=94&type=chunk) [Directors' Interests in Transactions, Arrangements or Contracts](index=28&type=section&id=Directors'%20Interests%20in%20Transactions,%20Arrangements%20or%20Contracts) Except as disclosed elsewhere in this announcement, no director or their associated entities had a material interest in any significant transaction, arrangement, or contract of the Group during H1 2025 - During H1 2025, no director or their respective associated entities had a material interest, directly or indirectly, in any transaction, arrangement, or contract entered into by the Company or any of its subsidiaries that was significant to the Group's business[95](index=95&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=28&type=section&id=Purchase,%20Sale%20or%20Redemption%20of%20the%20Company's%20Listed%20Securities) Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during H1 2025 - Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during H1 2025[96](index=96&type=chunk) [Directors' Interests in Competing Business](index=28&type=section&id=Directors'%20Interests%20in%20Competing%20Business) No director was considered to have an interest in any business that competes or is likely to compete, directly or indirectly, with the Group's business during H1 2025 - During H1 2025, no director was considered to have an interest in any business that competes or is likely to compete, directly or indirectly, with the Group's business[97](index=97&type=chunk) [Litigation](index=29&type=section&id=Litigation) The Group has no other material litigation apart from what is disclosed in Note 16 to the condensed consolidated interim financial statements - The Group has no other material litigation, with details provided in Note 16 to the condensed consolidated interim financial statements[98](index=98&type=chunk) [Commitments and Contingent Liabilities](index=29&type=section&id=Commitments%20and%20Contingent%20Liabilities) The Group has no other material commitments apart from what is disclosed in Note 17 to the condensed consolidated interim financial statements - The Group has no other material commitments, with details provided in Note 17 to the condensed consolidated interim financial statements[99](index=99&type=chunk) [Material Investments, Acquisitions and Disposals of Subsidiaries and Associates](index=29&type=section&id=Material%20Investments,%20Acquisitions%20and%20Disposals%20of%20Subsidiaries%20and%20Associates) The Group did not undertake any material acquisitions or disposals of subsidiaries and associates, nor made any material investments, during H1 2025 - The Group did not undertake any material acquisitions or disposals of subsidiaries and associates, nor made any material investments, during H1 2025[100](index=100&type=chunk) [Standard Code for Securities Transactions](index=29&type=section&id=Standard%20Code%20for%20Securities%20Transactions) The Company has adopted the Standard Code as set out in Appendix C3 of the Listing Rules for directors' securities dealings, and all directors confirmed compliance during H1 2025 - The Company has adopted the Standard Code as set out in Appendix C3 of the Listing Rules, and all directors confirmed compliance with the code during H1 2025[101](index=101&type=chunk) [Corporate Governance](index=29&type=section&id=Corporate%20Governance) The Company complied with the Corporate Governance Code in Appendix C1 of the Listing Rules during H1 2025, except for code provision C.1.5, as one independent non-executive director was unable to attend the general meeting due to business arrangements - The Company complied with the Corporate Governance Code as set out in Appendix C1 of the Listing Rules during H1 2025, with the exception of code provision C.1.5[102](index=102&type=chunk) - Mr. Chung Chun Hung, an independent non-executive director, was unable to attend the Company's relevant general meeting during H1 2025 due to business arrangements[102](index=102&type=chunk) [Audit Committee and Review of Financial Statements](index=30&type=section&id=Audit%20Committee%20and%20Review%20of%20Financial%20Statements) The Audit Committee, comprising three independent non-executive directors, reviewed the Group's accounting principles and practices, and discussed audit, risk management, internal control, and financial reporting matters, including the unaudited condensed consolidated interim financial statements for H1 2025 - The Audit Committee comprises three independent non-executive directors, with Mr. Yu Leung Fai as Chairman[103](index=103&type=chunk) - The Audit Committee has reviewed the accounting principles and practices adopted by the Group and discussed matters concerning audit, risk management, internal control, and financial reporting, including the review of the unaudited condensed consolidated interim financial statements for H1 2025[103](index=103&type=chunk) [Publication of Interim Results and 2025 Interim Report on HKEX and Company Website](index=30&type=section&id=Publication%20of%20Interim%20Results%20and%202025%20Interim%20Report%20on%20HKEX%20and%20Company%20Website) This interim results announcement has been published on the HKEX and the Company's website, with the full 2025 interim report containing all required information to be dispatched to shareholders and published on the respective websites later - This interim results announcement has been published on the HKEX website (www.hkexnews.hk) and the Company's website (www.sincere.com.hk)[104](index=104&type=chunk) - The 2025 interim report, containing all information required by the Listing Rules, will be dispatched to shareholders and published on the HKEX and the Company's websites at a later date[104](index=104&type=chunk) [Acknowledgement](index=30&type=section&id=Acknowledgement) The Board extends its sincere gratitude to all employees for their dedication and loyalty, and to customers, suppliers, business partners, and shareholders for their continuous support during the period - The Board extends its sincere gratitude to all employees for their dedication and loyalty to the Group during the period, and to all customers, suppliers, business partners, and shareholders for their continuous support[105](index=105&type=chunk)

[Report Overview](index=1&type=section&id=Report%20Overview) This section provides an overview of the company's information, disclaimers, and definitions used in the report [Company Information and Disclaimer](index=1&type=section&id=Company%20Information%20and%20Disclaimer) Yancheng Port International Co., Limited, listed on GEM, presents its interim results, emphasizing GEM's high investment risk and the board's responsibility for accuracy - Yancheng Port International Co., Limited (Stock Code: 8310) is incorporated in the Cayman Islands and listed on GEM of HKEX[1](index=1&type=chunk) - The GEM market is positioned for small and medium-sized companies with higher investment risks, and investors should understand potential risks[1](index=1&type=chunk) - The company's directors jointly and individually assume full responsibility for this announcement, confirming accuracy, completeness, and absence of misleading or fraudulent content[2](index=2&type=chunk) [Definitions](index=2&type=section&id=Definitions) This chapter defines key terms used in the report, including company entities, committees, geographical areas, and currency units for clarity - Key entities defined in the report include "the Company" (Yancheng Port International Co., Limited) and "the Group" (the Company and its subsidiaries)[3](index=3&type=chunk) - "The Period" specifically refers to January 1, 2025, to June 30, 2025[4](index=4&type=chunk) - "China/Mainland China" excludes Hong Kong, Macau Special Administrative Regions, and Taiwan[4](index=4&type=chunk) [Financial Highlights](index=4&type=section&id=Financial%20Highlights) This section summarizes the Group's key financial performance indicators for the six months ended June 30, 2025 [Key Financial Performance Indicators](index=4&type=section&id=Key%20Financial%20Performance%20Indicators) For the six months ended June 30, 2025, the Group's total revenue decreased by **25.47% to approximately HK$515 million**, with loss before tax increasing by **48.00% to approximately HK$26.8 million** 2025 H1 Key Financial Data Comparison | Indicator | 2025 H1 (HKD) | 2024 H1 (HKD) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Total Revenue | 514,700,000 | 690,500,000 | -25.47% | | Loss Before Tax | (26,800,000) | (18,100,000) | +48.00% | | Loss Attributable to Owners of the Company | (26,900,000) | (17,800,000) | +51.71% | | Loss Per Share | (0.0209) HK cents | (0.0138) HK cents | +51.45% | [Condensed Consolidated Financial Statements](index=5&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section presents the Group's condensed consolidated financial statements, including comprehensive income, financial position, equity changes, and cash flows [Condensed Consolidated Statement of Comprehensive Income](index=5&type=section&id=Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) For the six months ended June 30, 2025, the Group's revenue was **HK$514.65 million**, a **25.47% decrease**, with loss for the period expanding to **HK$26.88 million** Condensed Consolidated Statement of Comprehensive Income (For the six months ended June 30) | Indicator (HKD '000) | 2025 | 2024 | | :--- | :--- | :--- | | Revenue | 514,654 | 690,507 | | Cost of Revenue | (513,268) | (689,223) | | Gross Profit | 1,386 | 1,284 | | Other (Losses)/Income | (4,354) | 1,802 | | Administrative Expenses | (13,742) | (9,929) | | Finance Costs | (10,070) | (11,251) | | Loss Before Tax | (26,780) | (18,094) | | Tax | (97) | – | | Loss for the Period | (26,877) | (18,094) | | Exchange Differences on Translation of Overseas Operations | 1,357 | (4,484) | | Total Comprehensive Loss for the Period | (25,520) | (22,578) | | Loss Attributable to Owners of the Company | (26,941) | (17,758) | | Loss Attributable to Non-controlling Interests | 64 | (336) | | Basic and Diluted Loss Per Share (HK cents) | (2.09) | (1.38) | [Condensed Consolidated Statement of Financial Position](index=7&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's total assets less current liabilities worsened to **negative HK$230.79 million**, with total deficit attributable to owners increasing to **HK$537.05 million** Condensed Consolidated Statement of Financial Position (HKD '000) | Indicator | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | **Non-current Assets** | | | | Property, Plant and Equipment | 102,223 | 102,310 | | Right-of-use Assets | 35,527 | 34,719 | | **Current Assets** | | | | Trade and Other Receivables | 510,337 | 169,518 | | Bank Balances and Cash | 5,666 | 4,968 | | **Current Liabilities** | | | | Trade and Other Payables | 763,815 | 365,829 | | Current Portion of Bank and Other Borrowings | 124,418 | 151,946 | | **Net Current Liabilities** | (374,698) | (344,755) | | **Total Assets Less Current Liabilities** | (230,792) | (201,733) | | **Non-current Liabilities** | | | | Non-current Portion of Bank and Other Borrowings | 287,450 | 291,029 | | **Net Liabilities** | (519,669) | (494,149) | | **Total Deficit Attributable to Owners of the Company** | (537,053) | (510,711) | [Condensed Consolidated Statement of Changes in Equity](index=9&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) For the six months ended June 30, 2025, the total deficit attributable to owners increased from **HK$510.71 million** to **HK$537.05 million**, primarily due to the loss for the period Condensed Consolidated Statement of Changes in Equity (HKD '000) | Indicator | January 1, 2025 (Audited) | Loss for the Period | Exchange Differences on Translation of Overseas Operations | June 30, 2025 (Unaudited) | | :--- | :--- | :--- | :--- | :--- | | Total Deficit Attributable to Owners of the Company | (510,711) | (26,941) | 599 | (537,053) | | Non-controlling Interests | 16,562 | 64 | 758 | 17,384 | | Total Deficit | (494,149) | (26,877) | 1,357 | (519,669) | Condensed Consolidated Statement of Changes in Equity (HKD '000) | Indicator | January 1, 2024 (Audited) | Loss for the Period | Exchange Differences on Translation of Overseas Operations | June 30, 2024 (Unaudited) | | :--- | :--- | :--- | :--- | :--- | | Total Deficit Attributable to Owners of the Company | (465,583) | (17,758) | (3,824) | (487,165) | | Non-controlling Interests | 18,600 | (336) | (660) | 17,604 | | Total Deficit | (446,983) | (18,094) | (4,484) | (469,561) | [Condensed Consolidated Statement of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash used in operating activities was **HK$75.54 million**, while net cash from financing activities turned positive, leading to an increase in cash and cash equivalents Condensed Consolidated Statement of Cash Flows (For the six months ended June 30, HKD '000) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | (75,537) | (40,409) | | Net Cash Used in Investing Activities | (610) | (1,990) | | Net Cash From/(Used in) Financing Activities | 76,730 | (91,681) | | Net Increase/(Decrease) in Cash and Cash Equivalents | 583 | (134,080) | | Cash and Cash Equivalents at End of Period | 5,666 | 21,838 | - Net cash from financing activities turned from an outflow of **HK$91.681 million** in the same period of 2024 to an inflow of **HK$76.73 million** in 2025, primarily due to new advances from related companies[15](index=15&type=chunk) [Notes to the Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) This section provides detailed notes to the condensed consolidated financial statements, covering company information, accounting policies, and specific financial items [Company Information and Basis of Preparation](index=11&type=section&id=Company%20Information%20and%20Basis%20of%20Preparation) The Company was incorporated in the Cayman Islands on September 13, 2011, and its interim financial statements are prepared in accordance with HKAS 34 and GEM Listing Rules - The Company was incorporated in the Cayman Islands as an exempted limited liability company on September 13, 2011[16](index=16&type=chunk) - The interim financial statements are prepared in accordance with Hong Kong Accounting Standard 34 and the GEM Listing Rules[17](index=17&type=chunk) - The adoption of new/revised Hong Kong Financial Reporting Standards had no significant impact on the Group's results and financial position for the current and prior accounting periods[18](index=18&type=chunk) [Segment Information](index=12&type=section&id=Segment%20Information) The Group primarily operates in trading (petrochemical and soybean products, supply chain management) and petrochemical product storage segments, with H1 2025 trading revenue at **HK$506 million** and storage revenue at **HK$8.5 million** - The Group's main operating segments are trading business (trading of petrochemical and soybean products, provision of supply chain management services) and petrochemical product storage business[20](index=20&type=chunk) Segment Revenue and Results (For the six months ended June 30, HKD '000) | Indicator | Trading Business (2025) | Storage Business (2025) | Trading Business (2024) | Storage Business (2024) | | :--- | :--- | :--- | :--- | :--- | | Revenue (from external customers) | 506,156 | 8,498 | 681,724 | 8,783 | | Segment Results | 709 | (6,904) | (1,435) | (6,554) | - All the Group's revenue from external customers is attributable to China[26](index=26&type=chunk) [Revenue and Other Income/Losses](index=16&type=section&id=Revenue%20and%20Other%20Income%2FLosses) The Group's revenue primarily comes from trading and petrochemical product storage, with other income/losses showing a net exchange loss of **HK$4.36 million** for H1 2025 Revenue Composition (For the six months ended June 30, HKD '000) | Revenue Source | 2025 | 2024 | | :--- | :--- | :--- | | Revenue from Trading Business | 506,156 | 681,724 | | Revenue from Providing Petrochemical Product Storage Services | 8,498 | 8,783 | | **Total Revenue** | **514,654** | **690,507** | Other (Losses)/Income (For the six months ended June 30, HKD '000) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Bank Interest Income | 4 | 46 | | Exchange (Losses)/Gains | (4,362) | 1,753 | | Miscellaneous Income | 4 | 3 | | **Total** | **(4,354)** | **1,802** | [Finance Costs and Key Expenses](index=17&type=section&id=Finance%20Costs%20and%20Key%20Expenses) For H1 2025, finance costs totaled **HK$10.07 million**, mainly from listed credit enhanced guaranteed bonds, with key expenses including cost of inventories and staff costs Finance Costs (For the six months ended June 30, HKD '000) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Interest on Borrowings Repayable Within Five Years | 2,049 | 2,368 | | Interest on Listed Credit Enhanced Guaranteed Bonds | 7,041 | 8,876 | | Interest on Lease Liabilities | 35 | 7 | | Interest on Loan from a Former Associate | 945 | – | | **Total** | **10,070** | **11,251** | Other Key Expenses (For the six months ended June 30, HKD '000) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Cost of Inventories | 505,552 | 681,436 | | Depreciation of Property, Plant and Equipment | 5,982 | 6,044 | | Depreciation of Right-of-use Assets | 501 | 534 | | Staff Costs | 9,661 | 7,259 | [Taxation and Dividends](index=18&type=section&id=Taxation%20and%20Dividends) The Group incurred **HK$97,000** in income tax expense for H1 2025, primarily due to under-provision from prior periods, and no interim dividend is recommended - Hong Kong profits tax is calculated under a two-tiered profits tax rate regime, but the Company or its Hong Kong subsidiaries did not generate assessable profits, hence no income tax[30](index=30&type=chunk) - China corporate income tax is calculated at a rate of **25%**, with an income tax expense of **HK$97,000** for H1 2025, mainly due to under-provision from prior periods[30](index=30&type=chunk)[32](index=32&type=chunk) - The Board does not recommend the payment of any interim dividend for the period (2024: nil)[32](index=32&type=chunk) [Loss Per Share and Property, Plant and Equipment](index=19&type=section&id=Loss%20Per%20Share%20and%20Property%2C%20Plant%20and%20Equipment) Basic loss per share attributable to owners increased to **HK$0.0209** for H1 2025, and the Group acquired property, plant, and equipment worth approximately **HK$0.64 million** during the period Basic Loss Per Share (For the six months ended June 30) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Loss Attributable to Owners of the Company (HKD '000) | (26,941) | (17,758) | | Weighted Average Number of Ordinary Shares Issued | 1,288,000,000 | 1,288,000,000 | | Basic Loss Per Share (HK cents) | (2.09) | (1.38) | - During the period, the Group acquired items of property, plant and equipment at a cost of approximately **HK$0.64 million** (2024: approximately **HK$0.3 million**)[36](index=36&type=chunk) [Trade and Other Receivables](index=20&type=section&id=Trade%20and%20Other%20Receivables) As of June 30, 2025, trade and other receivables significantly increased to **HK$510.34 million**, with trade receivables (net of loss allowance) at **HK$453.34 million**, primarily concentrated within 90 days Trade and Other Receivables (HKD '000) | Item | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Trade Receivables (Third Parties) | 456,851 | 117,029 | | Less: Loss Allowance | (3,514) | (3,514) | | **Net Trade Receivables** | **453,337** | **113,515** | | Total Other Receivables | 57,000 | 56,003 | | **Total** | **510,337** | **169,518** | Ageing Analysis of Trade Receivables (HKD '000) | Ageing | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Within 90 Days | 449,373 | 107,727 | | Over 365 Days (No Credit Impairment) | 3,964 | 5,788 | | Over 365 Days (Credit Impairment) | 3,514 | 3,514 | - The Group grants credit periods of up to 90 days to trade debtors[38](index=38&type=chunk) [Trade and Other Payables](index=23&type=section&id=Trade%20and%20Other%20Payables) As of June 30, 2025, trade and other payables substantially increased to **HK$763.82 million**, including **HK$435.80 million** due to related companies, which are unsecured, repayable on demand, and interest-free Trade and Other Payables (HKD '000) | Item | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Trade Payables | 284,715 | 10,200 | | Accrued Expenses and Other Payables | 10,852 | 13,450 | | Contract Liabilities | 11,932 | 6,914 | | Amounts Due to Related Companies | 435,804 | 314,960 | | **Total** | **763,815** | **365,829** | Amounts Due to Related Companies (HKD '000) | Related Company | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Dafeng Port Development Group | 208,806 | 101,767 | | Xinyu International Development Co., Ltd. | 10,462 | 790 | | Dafeng Port (Hong Kong) | 216,536 | 212,403 | | **Total** | **435,804** | **314,960** | - Amounts due to related companies are unsecured, repayable on demand, and interest-free[44](index=44&type=chunk) [Bank and Other Borrowings](index=25&type=section&id=Bank%20and%20Other%20Borrowings) As of June 30, 2025, total bank and other borrowings decreased to **HK$411.87 million**, with listed credit enhanced guaranteed bonds and related company loans being major components Total Bank and Other Borrowings (HKD '000) | Item | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Bank Loans | 10,940 | 42,315 | | Loans from a Related Company | 102,537 | 99,650 | | Listed Credit Enhanced Guaranteed Bonds | 244,925 | 242,010 | | Loans from a Former Associate | 33,035 | 32,105 | | Loans from a Third Party | 19,339 | 25,871 | | **Total** | **411,868** | **442,975** | Borrowing Analysis (HKD '000) | Type | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Secured and Guaranteed | 19,339 | 25,871 | | Unsecured | 136,664 | 132,779 | | Unsecured but Guaranteed | 255,865 | 284,325 | | **Total** | **411,868** | **442,975** | [Share Capital and Related Party Transactions](index=26&type=section&id=Share%20Capital%20and%20Related%20Party%20Transactions) The Company's statutory share capital was **HK$100 million** and issued share capital was **HK$12.88 million**, with no changes during the period, and related party transactions included rental payments to Dafeng Port Development Group Share Capital Structure (HKD '000) | Item | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Authorized Share Capital (Ordinary Shares of HK$0.01 each) | 100,000 | 100,000 | | Issued and Fully Paid (Ordinary Shares of HK$0.01 each) | 12,880 | 12,880 | Related Party Transactions (For the six months ended June 30, HKD '000) | Transaction Type | 2025 | 2024 | | :--- | :--- | :--- | | Sales to Yancheng Port Finished Oil Co., Ltd. | 0 | 9,985 | | Rental Expenses: Dafeng Port Development Group | 114 | 105 | [Key Management Personnel Remuneration and Asset Pledges](index=27&type=section&id=Key%20Management%20Personnel%20Remuneration%20and%20Asset%20Pledges) Key management personnel remuneration significantly increased to **HK$2.801 million** for H1 2025, and approximately **HK$19.3 million** of third-party loans are secured by petrochemical storage equipment Key Management Personnel Remuneration (For the six months ended June 30, HKD '000) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Salaries, Allowances and Other Short-term Employee Benefits | 2,385 | 690 | | Contributions to Defined Contribution Plans | 416 | 12 | | **Total** | **2,801** | **702** | Bank and Other Facilities (HKD '000) | Item | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Total Bank and Other Facilities Granted to the Group | 54,700 | 85,056 | | Total Bank and Other Facilities Utilized | 30,279 | 68,186 | - As of June 30, 2025, approximately **HK$19.3 million** of loans from a third party were secured by petrochemical product storage equipment with a total carrying amount of approximately **HK$32.3 million**[49](index=49&type=chunk) [Commitments and Approval of Interim Financial Statements](index=28&type=section&id=Commitments%20and%20Approval%20of%20Interim%20Financial%20Statements) As of June 30, 2025, the Group had capital commitments of approximately **HK$222 million** for property, plant, and equipment construction, and the interim financial statements were approved on August 26, 2025 Capital Commitments (HKD '000) | Item | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Contracted but Not Provided For, Net of Deposits Paid for Construction of Property, Plant and Equipment | 221,763 | 212,862 | - The interim financial statements were approved and authorized for issue by the Board on August 26, 2025[51](index=51&type=chunk) [Management Discussion & Analysis](index=29&type=section&id=Management%20Discussion%20%26%20Analysis) This section provides management's perspective on the Group's financial performance, operational review, and strategic outlook amidst the economic environment [Economic Outlook and Company Strategy](index=29&type=section&id=Economic%20Outlook%20and%20Company%20Strategy) The Group will monitor global economic dynamics, mitigate external impacts, and strategically optimize resources to seize opportunities in Jiangsu Yancheng's integrated development - The global economic situation in H1 2025 was complex and volatile, with weak endogenous growth momentum in the domestic economy[52](index=52&type=chunk) - The Company will continue to closely monitor global economic dynamics to minimize the impact of adverse external factors and ensure stable operations[52](index=52&type=chunk) - Looking ahead, the Company will adopt a prudent operating approach, seize opportunities from the integrated development of Jiangsu Yancheng, rationally reorganize and optimize resources, and cautiously seek investment opportunities[64](index=64&type=chunk) [Business Review](index=29&type=section&id=Business%20Review) The Group's trading business revenue decreased by **25.74% to approximately HK$506 million** due to US-China tariff policies, while petrochemical storage revenue remained stable at approximately **HK$8.5 million** - The Group primarily engages in soybean product trading and petrochemical product storage services[53](index=53&type=chunk)[54](index=54&type=chunk)[55](index=55&type=chunk) Business Revenue Comparison (For the six months ended June 30, HKD) | Business Type | 2025 H1 | 2024 H1 | YoY Change (%) | | :--- | :--- | :--- | :--- | | Trading Business Revenue | 506,200,000 | 681,700,000 | -25.74% | | Petrochemical Product Storage Business Revenue | 8,500,000 | 8,800,000 | -3.25% | - The decrease in trading business revenue was mainly due to the impact of US-China tariff policies, leading to a decline in transaction volume[54](index=54&type=chunk) [Financial Review](index=30&type=section&id=Financial%20Review) The Group's revenue decreased by **25.47% to approximately HK$515 million**, but gross profit margin improved to **0.27%** due to optimized sales channels, though loss for the period expanded to **HK$26.9 million** Financial Performance Comparison (For the six months ended June 30, HKD) | Indicator | 2025 H1 | 2024 H1 | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 514,700,000 | 690,500,000 | -25.47% | | Cost of Revenue | 513,300,000 | 689,200,000 | -25.53% | | Gross Profit Margin | 0.27% | 0.19% | +0.08pp | | Finance Costs | 10,100,000 | 11,300,000 | -10.62% | | Loss for the Period | (26,900,000) | (18,100,000) | +48.62% | | Loss Per Share | (0.0209) HK cents | (0.0138) HK cents | +51.45% | - The increase in gross profit margin was mainly due to the Group's proactive development of new sales channels and markets, coupled with optimizing the existing channel structure to enhance bargaining power[56](index=56&type=chunk) [Liquidity and Financial Resources](index=31&type=section&id=Liquidity%20and%20Financial%20Resources) As of June 30, 2025, net current liabilities increased to approximately **HK$374.7 million**, but the liquidity ratio improved to **0.58**, and the gearing ratio improved to **negative 79.3%** Liquidity Indicators Comparison (HKD) | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Net Current Liabilities | (374,700,000) | (344,800,000) | | Current Ratio | 0.58 | 0.34 | | Gearing Ratio | -79.3% | -89.6% | | Total Interest-bearing Borrowings | 411,900,000 | 443,000,000 | | Total Deficit | 519,700,000 | 494,100,000 | - The increase in the current ratio was primarily due to the combined effect of increased trade and other receivables, bank balances and cash, and a decrease in the current portion of bank and other borrowings[58](index=58&type=chunk) [Capital Structure and Dividend Policy](index=31&type=section&id=Capital%20Structure%20and%20Dividend%20Policy) The total deficit attributable to owners increased to approximately **HK$537.1 million**, with no change in issued share capital and no interim dividend recommended Capital Structure Comparison (HKD) | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Deficit Attributable to Owners of the Company | (537,100,000) | (510,700,000) | - The Company's issued share capital remained unchanged during the period[59](index=59&type=chunk) - The Board does not recommend the payment of any interim dividend for the period (2024: nil)[60](index=60&type=chunk) [Strategic Outlook and Investments](index=32&type=section&id=Strategic%20Outlook%20and%20Investments) The Group uses bank financing for business expansion, with **HK$19.3 million** in third-party loans secured by petrochemical storage equipment, and currently has no significant future investment plans - The Group utilizes bank financing and other borrowings to fund its business expansion[61](index=61&type=chunk) - As of June 30, 2025, approximately **HK$19.3 million** of loans from a third party were secured by petrochemical storage equipment with a total carrying amount of approximately **HK$32.3 million**[61](index=61&type=chunk) - During the period, the Company did not undertake any significant investments, acquisitions, or disposals of subsidiaries, associates, or joint ventures, and currently has no significant future investment or capital asset plans[62](index=62&type=chunk)[63](index=63&type=chunk) [Operational and Risk Management](index=33&type=section&id=Operational%20and%20Risk%20Management) The Group manages foreign exchange risk through various measures, employs **89 staff** with total costs of approximately **HK$9.7 million**, and has capital commitments of approximately **HK$222 million** for PPE construction - The Group monitors foreign exchange risk by adjusting the timing of foreign currency receipts and payments, matching foreign currency balances, and entering into foreign exchange forward contracts with banks, expecting no significant foreign currency risk[65](index=65&type=chunk) Employees and Remuneration (For the six months ended June 30) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Number of Employees | 89 | 90 | | Total Staff Costs (HKD) | 9,700,000 | 7,300,000 | - As of June 30, 2025, the Group had capital commitments contracted but not provided for (net of deposits paid) of approximately **HK$222 million**, primarily related to the construction of property, plant and equipment[67](index=67&type=chunk) [Other Information](index=34&type=section&id=Other%20Information) This section covers contingent liabilities, corporate actions, company name change, director changes, post-balance sheet events, and shareholder interests [Contingent Liabilities and Corporate Actions](index=34&type=section&id=Contingent%20Liabilities%20and%20Corporate%20Actions) The Group had no significant contingent liabilities, but a mandatory unconditional cash offer for **24.44%** of issued share capital was completed during the period - As of June 30, 2025, the Group had no significant contingent liabilities[68](index=68&type=chunk) - Dafeng Port (Hong Kong) acquired a **60%** equity interest in Yancheng Port Overseas and made a mandatory unconditional cash offer at **HK$0.48** per share[69](index=69&type=chunk) - During the offer period, a total of **315 million** offer shares were validly accepted, representing approximately **24.44%** of the Company's then-issued share capital[69](index=69&type=chunk) [Company Name Change](index=35&type=section&id=Company%20Name%20Change) The Company's English and Chinese names were officially changed to Yancheng Port International Co., Limited and 盐城港国际股份有限公司, effective March 6, 2025 - The Company's English name has been changed from "Dafeng Port Heshun Technology Company Limited" to "Yancheng Port International Co., Limited"[70](index=70&type=chunk) - The Chinese name has been changed from "大丰港和顺科技股份有限公司" to "盐城港国际股份有限公司"[70](index=70&type=chunk) - The name change became effective on March 6, 2025[70](index=70&type=chunk) [Changes in Directors and Board Committee Composition](index=35&type=section&id=Changes%20in%20Directors%20and%20Board%20Committee%20Composition) The board and committee composition saw multiple changes, including resignations of non-executive directors, appointments of executive and non-executive directors, and changes in chairman roles - Mr. Ji Longtao, Mr. Yang Yuexia, and Mr. Zhang Shukai resigned as non-executive directors, and Mr. Ji Yaosheng was appointed as an executive director and chief executive officer (effective March 21, 2025)[72](index=72&type=chunk) - Mr. Zhao Liang resigned as executive director, chairman of the Board, and other positions; Mr. Zhou Zhengxiong, Mr. Ding Anguang, and Ms. Yuan Xin were appointed as non-executive directors (effective March 31, 2025)[75](index=75&type=chunk) - Ms. Yuan Xin was re-designated as an executive director and vice chairman of the Board (effective May 28, 2025); Mr. Lu Shuai was appointed as an executive director, chairman of the Board, and chairman of the Nomination Committee (effective August 1, 2025)[75](index=75&type=chunk) [Post Balance Sheet Events](index=36&type=section&id=Post%20Balance%20Sheet%20Events) No significant post-balance sheet events occurred after the period and up to the announcement date, other than those disclosed - Save as disclosed in this announcement, there were no significant events after the period and up to the date of this announcement[74](index=74&type=chunk) [Directors' and Chief Executive's Interests](index=37&type=section&id=Directors'%20and%20Chief%20Executive's%20Interests) As of June 30, 2025, no directors or chief executives held disclosable interests or short positions in the Company's shares or related corporations - As of June 30, 2025, no directors or chief executive of the Company had any interests or short positions in the shares, underlying shares, and debentures of the Company or any associated corporation that were required to be disclosed under the SFO or the GEM Listing Rules[76](index=76&type=chunk) [Convertible Securities, Warrants or Similar Rights](index=37&type=section&id=Convertible%20Securities%2C%20Warrants%20or%20Similar%20Rights) As of June 30, 2025, the Group had not issued or granted any convertible securities, warrants, or similar rights - As of June 30, 2025, the Group had not issued or granted any convertible securities, warrants, or other similar rights[77](index=77&type=chunk) [Substantial Shareholders' Interests](index=38&type=section&id=Substantial%20Shareholders'%20Interests) As of June 30, 2025, Yancheng Port Overseas held **57.46%** of the Company's shares, with Dafeng Port (Hong Kong) and its related entities holding a combined **74.97%** Substantial Shareholders' Holdings (As of June 30, 2025) | Shareholder Name | Capacity/Nature of Interest | Number of Shares Held | Approximate Percentage of Company's Issued Share Capital | | :--- | :--- | :--- | :--- | | Yancheng Port Overseas | Beneficial Owner | 740,040,000 (L) | 57.46% | | Dafeng Port (Hong Kong) | Interest of Controlled Corporation + Beneficial Owner | 965,575,000 (L) | 74.97% | | Dafeng Port Development Group | Interest of Controlled Corporation | 965,575,000 (L) | 74.97% | | Jiangsu Yancheng | Interest of Controlled Corporation | 965,575,000 (L) | 74.97% | | Yancheng Municipal People's Government | Interest of Controlled Corporation | 965,575,000 (L) | 74.97% | - Dafeng Port Development Group, Jiangsu Yancheng, and Yancheng Municipal People's Government are deemed to have interests in the Company's shares held by Yancheng Port Overseas and Dafeng Port (Hong Kong)[82](index=82&type=chunk) [Purchase, Sale or Redemption of Listed Securities](index=39&type=section&id=Purchase%20Sale%20or%20Redemption%20of%20Listed%20Securities) Neither the Company nor its subsidiaries purchased, sold, or redeemed any of its listed securities during the period - During the period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[81](index=81&type=chunk) [Corporate Governance](index=40&type=section&id=Corporate%20Governance) The Board believes it operates independently despite the controlling shareholder's competing business, and the Company has complied with all Corporate Governance Code provisions - The controlling shareholder, Dafeng Port Development Group, engages in competing businesses involving various goods trading, but the Board believes their business focus differs and does not pose a significant competitive threat to the Group[83](index=83&type=chunk) - The Board believes it operates independently from Dafeng Port Development Group, as directors are prohibited from voting on conflict of interest matters and are fully aware of their fiduciary duties[84](index=84&type=chunk) - The Company has adopted a code of conduct for directors' securities transactions, and no non-compliance was found during the period[86](index=86&type=chunk) - The Company has complied with all code provisions of the Corporate Governance Code during the period and will continue to review and enhance its corporate governance standards[87](index=87&type=chunk) [Board Information](index=42&type=section&id=Board%20Information) This section provides details on the Audit Committee's composition and responsibilities, along with an acknowledgment from the Board Chairman and the current Board composition [Audit Committee](index=42&type=section&id=Audit%20Committee) The Audit Committee, comprising three independent non-executive directors, reviewed the interim financial statements and found them compliant with accounting standards and legal requirements - The Audit Committee was established on August 3, 2013, and comprises three independent non-executive directors: Mr. Liu Hon Kee (Chairman), Mr. Yu Xugang, and Ms. Xu Jingyang[88](index=88&type=chunk) - The Audit Committee's primary responsibilities include providing recommendations on the appointment and removal of external auditors, reviewing financial statements, and overseeing the Group's internal control procedures and risk management system[88](index=88&type=chunk) - The interim financial statements have not been audited by the Company's auditors but have been reviewed by the Audit Committee and are considered to comply with applicable accounting standards, GEM Listing Rules, and legal requirements[88](index=88&type=chunk) [Acknowledgement and Board Composition](index=42&type=section&id=Acknowledgement%20and%20Board%20Composition) Board Chairman Mr. Lu Shuai extends gratitude to all management, staff, business partners, customers, and shareholders, and the Board currently comprises three executive, one non-executive, and three independent non-executive directors - Board Chairman Mr. Lu Shuai, on behalf of the Board, extends gratitude to all management, staff, business partners, customers, and shareholders[89](index=89&type=chunk)[90](index=90&type=chunk) Board Member Composition (As of the date of this announcement) | Category | Name | | :--- | :--- | | Executive Directors | Mr. Lu Shuai (Chairman), Ms. Yuan Xin (Vice Chairman), Mr. Ji Yaosheng | | Non-executive Director | Mr. Ding Anguang | | Independent Non-executive Directors | Mr. Liu Hon Kee, Mr. Yu Xugang, Ms. Xu Jingyang |

Financial Performance - The company's revenue for the first half of 2025 was approximately RMB 41,291.8 million, a decrease of about 9.38% compared to the same period last year[5]. - The net profit attributable to shareholders for the same period was approximately RMB 4,631.0 million, an increase of about 32.83% year-on-year[5]. - Basic earnings per share for the first half of 2025 were RMB 0.88, an increase of RMB 0.22 per share compared to the previous year[2]. - The company's main business revenue reached 34,836.86 million CNY, an increase of 2.31% year-on-year[26]. - The overall gross profit margin for the company's products improved to 28.41%, up by 5.70 percentage points compared to the previous year[22]. - The company's operating profit surged by 42.55% year-on-year, totaling 5,741.83 million CNY[26]. - The net profit attributable to shareholders was 4,367.87 million CNY, reflecting a year-on-year increase of 31.34%[26]. - Gross profit increased to RMB 9,891,857 thousand, up 21.0% from RMB 8,171,530 thousand year-over-year[48]. - Operating profit rose to RMB 6,149,113 thousand, reflecting a 29.3% increase from RMB 4,753,134 thousand in the previous year[48]. - Net profit for the period was RMB 4,660,531 thousand, an increase of 31.5% compared to RMB 3,547,266 thousand in 2024[49]. Assets and Liabilities - The total assets as of June 30, 2025, were approximately RMB 253,139.5 million, a slight decrease of 0.59% from the end of 2024[6]. - The total liabilities decreased by 4.29% to approximately RMB 51,970.6 million compared to the end of 2024[5]. - The total assets reported as of June 30, 2025, amounted to RMB 253,139,538 thousand, up from RMB 243,734,511 thousand in 2024, indicating an increase of approximately 3.3%[71]. - The total liabilities reported as of June 30, 2025, were RMB 51,970,562 thousand, compared to RMB 47,580,120 thousand in 2024, reflecting an increase of about 9.9%[71]. - Current liabilities decreased to RMB 27,466,956 thousand from RMB 28,892,092 thousand at the end of 2024[52]. - Non-current liabilities totaled RMB 24,503,606 thousand, down from RMB 25,406,350 thousand in the previous year[52]. Cash Flow and Investments - The net cash flow from operating activities for the first half of 2025 was RMB 8,286.5 million, representing a year-on-year increase of 20.61%[6]. - The company's main source of funds during the reporting period was net cash flow generated from operating activities[35]. - The net cash flow from operating activities for the first half of 2025 was 82.87 billion yuan, an increase of 1.416 billion yuan year-on-year, primarily due to a decrease in procurement costs of raw materials[37]. - Capital expenditures for the reporting period amounted to approximately 6.21 billion yuan, mainly for project construction and external investment[38]. - The total approved and contracted capital commitments as of June 30, 2025, were 10.57 billion yuan, down from 11.04 billion yuan at the end of 2024[38]. Shareholder Information - As of the end of the reporting period, the total number of registered shareholders was 224,128, with the top ten shareholders holding a significant portion of the shares[8]. - The mid-term dividend for 2025 is set at 0.24 yuan per share, with a total distribution amounting to 1.26649 billion yuan, representing 29% of the net profit attributable to ordinary shareholders for the first half of 2025[45]. - The company provided guarantees for bank loans amounting to RMB 814,000,000 for subsidiaries as of June 30, 2025, down from RMB 2,276,071,475 at the end of 2024[89]. Market and Operational Developments - The company signed a contract for the Xinjiang Yaobai project, strengthening its regional market layout in the cement industry[18]. - After acquiring West Papua Conch Cement Co., the company improved its market competitiveness in Indonesia[18]. - The company is actively developing clean energy projects, including a 100 MW wind power project and multiple photovoltaic projects[18]. - The company has implemented AI digital tools across 40 application scenarios, optimizing production processes and enhancing resource utilization[17]. - The company is expanding its product line by establishing new aggregate and concrete projects, further extending its industrial chain[18]. Taxation and Compliance - The effective corporate income tax rate for the company's subsidiaries in mainland China is generally 25%, with several subsidiaries benefiting from a reduced rate of 15% due to high-tech enterprise status[78]. - Xiangshan Conch obtained high-tech enterprise certification in 2024, allowing a preferential income tax rate of 15% from 2024 to 2026[83]. - Yangchun Conch also received high-tech enterprise certification in 2024, benefiting from a 15% preferential income tax rate from 2024 to 2026[83]. - The tax rate for small and micro enterprises is reduced by 25%, with a corporate income tax rate of 20%, effective until December 31, 2027[84].

[Summary](index=1&type=section&id=%E6%91%98%E8%A6%81) The Group's H1 2025 sales revenue decreased by 7.69%, profit attributable to owners by 21.01%, and earnings per share was RMB 0.26 yuan Key Financial Summary for H1 2025 | Metric | H1 2025 (RMB) | Year-on-Year Change | | :--- | :--- | :--- | | Sales Revenue | Decreased by approx. 7.69% | - | | Profit attributable to owners of the Company | Decreased by approx. 21.01% | - | | Earnings per share attributable to owners of the Company | RMB 0.26 yuan | - | - The Board resolved not to declare an interim dividend for the six months ended June 30, 2025[3](index=3&type=chunk) [Interim Results (Unaudited)](index=2&type=section&id=%E4%B8%AD%E6%9C%9F%E6%A5%AD%E7%B8%BE(%E6%9C%AA%E7%B6%93%E5%AF%A9%E6%A0%B8)) This section presents the unaudited condensed consolidated financial statements for H1 2025, including the income statement, comprehensive income, balance sheet, cash flow, and equity changes [Condensed Consolidated Income Statement](index=2&type=section&id=%E7%B0%A1%E6%98%8E%E5%90%88%E4%BD%B5%E5%88%A9%E6%BD%A4%E8%A1%A8(%E6%9C%AA%E7%B6%93%E5%AF%A9%E6%A0%B8)) For H1 2025, the Group's revenue decreased by 7.69%, operating profit by 10.01%, profit for the period by 16.95%, and EPS fell from RMB 0.33 yuan to RMB 0.26 yuan Key Data from Condensed Consolidated Income Statement (For the six months ended June 30) | Metric | 2025 (RMB thousand) | 2024 (RMB thousand) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 3,738,503 | 4,050,094 | -7.69% | | Cost of sales | (2,311,985) | (2,512,973) | -7.99% | | Gross profit | 1,426,518 | 1,537,121 | -7.20% | | Operating profit | 569,787 | 632,045 | -10.01% | | Profit for the period | 484,030 | 582,784 | -16.95% | | Profit attributable to owners of the Company | 338,667 | 428,752 | -21.01% | | Basic and diluted earnings per share | RMB 0.26 yuan | RMB 0.33 yuan | -21.21% | - Impairment provisions for financial assets significantly increased from **RMB 1,730 thousand** in 2024 to **RMB 14,516 thousand** in 2025[4](index=4&type=chunk) - A gain on disposal of a subsidiary of **RMB 46,544 thousand** was recorded in 2024, with no such gain in 2025[4](index=4&type=chunk) [Condensed Consolidated Statement of Comprehensive Income](index=3&type=section&id=%E7%B0%A1%E6%98%8E%E5%90%88%E4%BD%B5%E7%B6%9C%E5%90%88%E6%94%B6%E7%9B%8A%E8%A1%A8(%E6%9C%AA%E7%B6%93%E5%AF%A9%E6%A0%B8)) For H1 2025, total comprehensive income decreased by 27.76%, mainly due to a shift from positive to negative foreign currency translation differences and fair value changes in financial assets Key Data from Condensed Consolidated Statement of Comprehensive Income (For the six months ended June 30) | Metric | 2025 (RMB thousand) | 2024 (RMB thousand) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Profit for the period | 484,030 | 582,784 | -16.95% | | Exchange differences on translation - Group | (46,877) | 20,621 | shifted from positive to negative | | Changes in fair value of financial assets measured at fair value through other comprehensive income | (759) | 879 | shifted from positive to negative | | Total comprehensive income for the period | 436,352 | 604,055 | -27.76% | | Total comprehensive income attributable to owners of the Company | 320,508 | 436,766 | -26.61% | [Condensed Consolidated Balance Sheet](index=4&type=section&id=%E7%B0%A1%E6%98%8E%E5%90%88%E4%BD%B5%E8%B3%87%E7%94%A2%E8%B2%A0%E5%82%B5%E8%A1%A8(%E6%9C%AA%E7%B6%93%E5%AF%A9%E6%A0%B8)) As of June 30, 2025, total assets slightly increased, with significant rises in cash and cash equivalents and bank time deposits, while inventories and accounts payable decreased; non-current borrowings increased substantially Key Data from Condensed Consolidated Balance Sheet | Metric | June 30, 2025 (RMB thousand) | Dec 31, 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Total assets | 14,541,925 | 14,408,591 | +0.92% | | Inventories | 4,631,072 | 5,165,995 | -10.36% | | Cash and cash equivalents | 4,781,018 | 4,129,488 | +15.77% | | Bank time deposits | 254,776 | 164,205 | +55.16% | | Total equity | 10,210,760 | 10,165,079 | +0.45% | | Non-current liabilities - Borrowings | 1,842,098 | 1,202,332 | +53.21% | | Current liabilities - Borrowings | 375,465 | 1,051,966 | -64.31% | | Current liabilities - Accounts payable and notes | 806,271 | 1,015,258 | -20.58% | - Non-current borrowings significantly increased by **53.21%**, while current borrowings decreased by **64.31%**, indicating a shift towards longer-term debt structure[8](index=8&type=chunk) [Condensed Consolidated Cash Flow Statement](index=6&type=section&id=%E7%B0%A1%E6%98%8E%E5%90%88%E4%BD%B5%E7%8F%BE%E9%87%91%E6%B5%81%E9%87%8F%E8%A1%A8(%E6%9C%AA%E7%B6%93%E5%AF%A9%E6%A0%B8)) For H1 2025, net cash flows from operating activities shifted from negative to positive, investing activities from positive to negative, and financing activities significantly decreased, leading to a lower net increase in cash and cash equivalents Key Data from Condensed Consolidated Cash Flow Statement (For the six months ended June 30) | Metric | 2025 (RMB thousand) | 2024 (RMB thousand) | Change | | :--- | :--- | :--- | :--- | | Net cash flows from operating activities | 1,120,336 | (452,882) | shifted from negative to positive | | Net cash flows from investing activities | (107,373) | 1,055,672 | shifted from positive to negative | | Net cash flows from financing activities | (341,250) | 581,162 | significantly decreased | | Net increase in cash and cash equivalents | 671,713 | 1,183,952 | -43.26% | | Cash and cash equivalents at end of period | 4,781,018 | 3,942,070 | +21.28% | - Net cash flows from operating activities significantly improved, shifting from **RMB (452,882) thousand** in 2024 to **RMB 1,120,336 thousand** in 2025[9](index=9&type=chunk) - Increased cash outflow from financing activities was primarily due to a significant increase in cash paid for repayment of borrowings and higher dividends paid to non-controlling interests[10](index=10&type=chunk) [Condensed Consolidated Statement of Changes in Equity](index=8&type=section&id=%E7%B0%A1%E6%98%8E%E5%90%88%E4%BD%B5%E6%AC%8A%E7%9B%8A%E8%AE%8A%E5%8B%95%E8%A1%A8(%E6%9C%AA%E7%B6%93%E5%AF%A9%E6%A0%B8)) As of June 30, 2025, equity attributable to owners of the Company slightly increased, driven by profit for the period but impacted by foreign currency translation differences and fair value changes in financial assets Changes in Equity Attributable to Owners of the Company (As of June 30) | Metric | 2025 (RMB thousand) | 2024 (RMB thousand) | Change | | :--- | :--- | :--- | :--- | | Balance at January 1 | 7,206,197 | 6,889,417 | +4.60% | | Profit for the period | 338,667 | 428,752 | -21.01% | | Exchange differences on translation - Group | (17,854) | 7,766 | shifted from positive to negative | | Dividends paid to owners of the Company | (230,541) | (230,541) | No change | | Balance at June 30 | 7,296,164 | 7,095,642 | +2.83% | - Exchange differences on translation had a negative impact on Group equity, shifting from **RMB 7,766 thousand** positive in 2024 to **RMB (17,854) thousand** negative in 2025[11](index=11&type=chunk) [Notes to the Financial Statements](index=10&type=section&id=%E9%99%84%E8%A8%BB%EF%BC%9A) This section details the basis of preparation, accounting policies, risk management, revenue, finance income/expenses, income tax, EPS, dividends, asset changes, receivables/payables, share capital, segment info, commitments, and related party transactions [1. General Information](index=10&type=section&id=1.%20%E4%B8%80%E8%88%AC%E8%B3%87%E6%96%99) Beijing Tongrentang Technologies Co., Ltd. was incorporated in China in 2000, listed on HKEX in 2010, with its ultimate holding company being China Beijing Tongrentang (Group) Co., Ltd., primarily engaged in TCM manufacturing and sales in mainland China and Hong Kong - The Company was incorporated in China on **March 22, 2000**, and transferred to the Main Board of HKEX on **July 9, 2010**[13](index=13&type=chunk) - The ultimate holding company is **China Beijing Tongrentang (Group) Co., Ltd.**[13](index=13&type=chunk) - The Group's principal business is the manufacturing and sale of traditional Chinese medicine (TCM), primarily operating in **mainland China and Hong Kong**[13](index=13&type=chunk) [2. Basis of Preparation](index=10&type=section&id=2.%20%E7%B7%A8%E8%A3%BD%E5%9F%BA%E6%BA%96) These condensed consolidated interim financial information are prepared in accordance with IAS 34 and should be read in conjunction with the annual consolidated financial statements for the year ended December 31, 2024 - These condensed consolidated interim financial information are prepared in accordance with **International Accounting Standard 34 "Interim Financial Reporting"**[16](index=16&type=chunk) - These condensed consolidated interim financial information do not include all the information and disclosures normally required in the annual financial statements and should be read in conjunction with the annual consolidated financial statements for the year ended **December 31, 2024**[16](index=16&type=chunk) [3. Accounting Policies](index=11&type=section&id=3.%20%E6%9C%83%E8%A8%88%E6%94%BF%E7%AD%96) Accounting policies are consistent with 2024 annual consolidated financial statements, income tax is accrued using the expected annual effective tax rate, and IFRS 21 (amendment) has no material impact - The accounting policies adopted in the preparation of these condensed consolidated interim financial information are consistent with those applied in the preparation of the Group's annual consolidated financial statements for the year ended **December 31, 2024**[17](index=17&type=chunk) - Income tax for the interim period is accrued using the tax rate that would be applicable to the expected total annual earnings[18](index=18&type=chunk) - The adopted **IFRS 21 (amendment) "Lack of Exchangeability"** has no material impact on the condensed consolidated interim financial statements[19](index=19&type=chunk) [4. Estimates](index=11&type=section&id=4.%20%E4%BC%B0%E8%A8%88) Preparing interim financial information involves management judgments, estimates, and assumptions, with actual results potentially differing; key sources of estimation uncertainty remain consistent with 2024 - The preparation of interim financial information requires management to make judgments, estimates, and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income, and expenses, and actual results may differ from these estimates[20](index=20&type=chunk) - The significant judgments made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those applied to the annual consolidated financial statements for the year ended **December 31, 2024**[20](index=20&type=chunk) [5. Financial Risk Management](index=11&type=section&id=5.%20%E8%B2%A1%E5%8B%99%E9%A2%A8%E9%9A%AA%E7%AE%A1%E7%90%86) The Group faces market (exchange rate, interest rate), credit, and liquidity risks; interim financial information does not include all annual disclosures, and risk management policies remain unchanged since 2024 year-end - The Group's activities are exposed to various financial risks: **market risk (including foreign exchange risk and interest rate risk), credit risk, and liquidity risk**[21](index=21&type=chunk) - The condensed consolidated interim financial information do not include all financial risk management information and disclosures required in the annual financial statements and should be read in conjunction with the Group's annual financial statements for the year ended **December 31, 2024**[21](index=21&type=chunk) - There have been no material changes in risk management policies since the end of **2024**[22](index=22&type=chunk) [6. Revenue](index=12&type=section&id=6.%20%E6%94%B6%E5%85%A5) For H1 2025, total revenue was RMB 3,738,503 thousand, a 7.69% year-on-year decrease, with TCM product sales remaining the primary source, mainland China sales declining, but sales outside mainland China growing Revenue Breakdown (For the six months ended June 30) | Revenue Type | 2025 (RMB thousand) | 2024 (RMB thousand) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Sales of TCM products - Mainland China | 3,139,055 | 3,552,169 | -11.63% | | Sales of TCM products - Outside Mainland China | 573,019 | 467,391 | +22.60% | | Advertising service income - Mainland China | 4,048 | 5,954 | -31.99% | | Service income | 22,318 | 24,388 | -8.49% | | Brand usage rights income - Outside Mainland China | 63 | 192 | -67.19% | | **Total Revenue** | **3,738,503** | **4,050,094** | **-7.69%** | - Sales revenue of TCM products outside mainland China achieved a significant growth of **22.60%**[23](index=23&type=chunk) [7. Finance Income and Expenses](index=13&type=section&id=7.%20%E8%B2%A1%E5%8B%99%E6%94%B6%E7%9B%8A%E5%8F%8A%E8%B2%BB%E7%94%A8) For H1 2025, net finance income was RMB 12,094 thousand, a slight increase year-on-year, primarily driven by a significant rise in exchange gains, while interest income and finance costs remained relatively stable Finance Income and Expenses (For the six months ended June 30) | Metric | 2025 (RMB thousand) | 2024 (RMB thousand) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Interest income | 42,734 | 43,253 | -1.20% | | Exchange gains, net | 2,152 | 2 | significantly increased | | Total finance income | 44,886 | 44,273 | +1.38% | | Interest on bank borrowings | (28,215) | (28,607) | -1.37% | | Interest on lease liabilities | (4,338) | (4,061) | +6.82% | | Total finance expenses | (32,792) | (32,668) | +0.38% | | **Net finance income** | **12,094** | **11,605** | **+4.21%** | - Net exchange gains significantly increased from **RMB 2 thousand** in 2024 to **RMB 2,152 thousand** in 2025[24](index=24&type=chunk) [8. Expenses by Nature](index=13&type=section&id=8.%20%E6%8C%89%E6%80%A7%E8%B3%AA%E5%8A%83%E5%88%86%E7%9A%84%E8%B2%BB%E7%94%A8) For H1 2025, the Group's depreciation, amortization, and inventory write-down provisions all increased, with a substantial rise in impairment provisions for receivables, reflecting increased asset impairment risk Expenses by Nature (For the six months ended June 30) | Expense Type | 2025 (RMB thousand) | 2024 (RMB thousand) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Depreciation of property, plant and equipment | 91,736 | 90,758 | +1.08% | | Amortization of right-of-use assets | 62,626 | 48,400 | +29.39% | | Amortization of other long-term assets | 6,130 | 4,174 | +46.85% | | Provision for impairment of inventories | 17,272 | 14,077 | +22.69% | | Provision for impairment of receivables | 14,516 | 1,730 | +739.08% | | Loss on disposal of non-current assets | 283 | 125 | +126.40% | - Provision for impairment of receivables significantly increased by **739.08%** from **RMB 1,730 thousand** in 2024 to **RMB 14,516 thousand** in 2025[25](index=25&type=chunk) [9. Income Tax Expense](index=14&type=section&id=9.%20%E6%89%80%E5%BE%97%E7%A8%85%E8%B2%BB%E7%94%A8) For H1 2025, total income tax expense was RMB 107,251 thousand, largely consistent with the prior year, with high-tech enterprises in mainland China enjoying a 15% preferential tax rate and Hong Kong profits subject to 16.5% - High-tech enterprises enjoy a preferential income tax rate of **15%**, while non-high-tech enterprises are subject to **25%**[26](index=26&type=chunk) - The income tax rate for profits in the **Hong Kong Special Administrative Region of China is 16.5%**[27](index=27&type=chunk) Income Tax Expense Breakdown (For the six months ended June 30) | Expense Type | 2025 (RMB thousand) | 2024 (RMB thousand) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Current income tax expense - Mainland China | 70,059 | 70,048 | +0.02% | | Current income tax expense - Hong Kong, China | 31,193 | 18,775 | +66.14% | | Current income tax expense - Other countries or regions | 2,833 | 4,624 | -38.74% | | Deferred income tax expense | 3,166 | 14,300 | -77.86% | | **Total income tax expense** | **107,251** | **107,747** | **-0.46%** | [10. Earnings Per Share](index=15&type=section&id=10.%20%E6%AF%8F%E8%82%A1%E6%94%B6%E7%9B%8A) For H1 2025, basic earnings per share were RMB 0.26 yuan, down from RMB 0.33 yuan in the prior year, with no potential dilutive shares during the reporting period - Basic earnings per share are calculated based on net profit attributable to owners of the Company of **RMB 338,667,000**, divided by the weighted average number of ordinary shares outstanding of **1,280,784,000** during the period[31](index=31&type=chunk) Earnings Per Share (For the six months ended June 30) | Metric | 2025 | 2024 | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Profit attributable to owners of the Company (RMB thousand) | 338,667 | 428,752 | -21.01% | | Weighted average number of ordinary shares outstanding (thousand shares) | 1,280,784 | 1,280,784 | 0.00% | | **Earnings per share** | **RMB 0.26 yuan** | **RMB 0.33 yuan** | **-21.21%** | - There were no potential dilutive shares for the Company for the six months ended **June 30, 2025 and 2024**[32](index=32&type=chunk) [11. Dividends](index=15&type=section&id=11.%20%E8%82%A1%E6%81%AF) The Board resolved not to declare an interim dividend for H1 2025; the 2024 annual cash dividend of approximately RMB 230,541,000 was paid on August 11, 2025 - The Board resolved not to declare an interim dividend for the six months ended **June 30, 2025** (for the six months ended June 30, 2024: nil)[34](index=34&type=chunk) - On **March 28, 2025**, the Board proposed a cash dividend of **RMB 0.18 yuan (tax inclusive)** per share for the year ended December 31, 2024, totaling approximately **RMB 230,541,000**[34](index=34&type=chunk) - This dividend distribution plan was approved at the annual general meeting held on **June 12, 2025**, and was paid to shareholders on **August 11, 2025**[34](index=34&type=chunk) [12. Additions to Right-of-Use Assets and Property, Plant and Equipment](index=16&type=section&id=12.%20%E4%BD%BF%E7%94%A8%E6%AC%8A%E8%B3%87%E7%94%A2%E5%92%8C%E6%88%BF%E5%B1%8B%E5%8F%8A%E5%BB%BA%E7%AF%89%E7%89%A9%E3%80%81%E5%BB%A0%E6%88%BF%E5%8F%8A%E8%A8%AD%E5%82%99%E5%A2%9E%E5%8A%A0) For H1 2025, the original cost of the Group's right-of-use assets increased by approximately RMB 63,156,000, and property, plant and equipment by approximately RMB 59,463,000 Additions to Asset Original Cost (For the six months ended June 30) | Asset Type | 2025 (RMB thousand) | 2024 (RMB thousand) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Additions to original cost of right-of-use assets | 63,156 | 37,484 | +68.49% | | Additions to original cost of property, plant and equipment | 59,463 | 87,723 | -32.22% | [13. Accounts Receivable and Notes](index=16&type=section&id=13.%20%E6%87%89%E6%94%B6%E8%B3%A6%E6%AC%BE%E5%8F%8A%E7%A5%A8%E6%93%9A) As of June 30, 2025, net accounts receivable and notes were RMB 1,086,607 thousand, a slight decrease from 2024 year-end, with significant increases in related party receivables and decreases in notes receivable, alongside increased impairment provisions Accounts Receivable and Notes (As of June 30) | Metric | June 30, 2025 (RMB thousand) | Dec 31, 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Accounts receivable - Third parties | 622,898 | 612,158 | +1.76% | | Accounts receivable - Related parties | 437,922 | 275,810 | +58.78% | | Notes receivable | 110,113 | 285,349 | -61.41% | | Less: Impairment provision | (84,326) | (69,752) | +20.89% | | **Accounts receivable and notes, net** | **1,086,607** | **1,103,565** | **-1.54%** | Aging Analysis of Accounts Receivable and Notes (As of June 30) | Aging | June 30, 2025 (RMB thousand) | Dec 31, 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Within four months | 865,958 | 864,645 | +0.15% | | Four months to one year | 133,046 | 132,541 | +0.38% | | One to two years | 45,994 | 16,342 | +181.93% | | Two to three years | 75,173 | 109,576 | -31.39% | | Over three years | 50,762 | 50,213 | +1.09% | | **Total** | **1,170,933** | **1,173,317** | **-0.20%** | - Accounts receivable and notes aged one to two years significantly increased by **181.93%**, which may warrant attention to collection risk[38](index=38&type=chunk) [14. Share Capital](index=17&type=section&id=14.%20%E8%82%A1%E6%9C%AC) As of June 30, 2025, the Company's total and issued and fully paid share capital remained unchanged at 1,280,784,000 shares, with a par value of RMB 1,280,784 thousand, comprising domestic shares and H shares Share Capital Structure (As of June 30) | Share Type | June 30, 2025 Number of Shares | June 30, 2025 Par Value (RMB thousand) | Dec 31, 2024 Number of Shares | Dec 31, 2024 Par Value (RMB thousand) | | :--- | :--- | :--- | :--- | :--- | | Total share capital | 1,280,784,000 | 1,280,784 | 1,280,784,000 | 1,280,784 | | Domestic shares | 652,080,000 | 652,080 | 652,080,000 | 652,080 | | H shares | 628,704,000 | 628,704 | 628,704,000 | 628,704 | - The share capital structure remained stable with no changes during the reporting period[39](index=39&type=chunk) [15. Accounts Payable and Notes](index=18&type=section&id=15.%20%E6%87%89%E4%BB%98%E8%B3%87%E6%AC%BE%E5%8F%8A%E7%A5%A8%E6%93%9A) As of June 30, 2025, total accounts payable and notes were RMB 806,271 thousand, a 20.58% decrease from 2024 year-end, with significant declines in third-party payables and notes payable, and a reduced proportion of payables within four months Accounts Payable and Notes (As of June 30) | Metric | June 30, 2025 (RMB thousand) | Dec 31, 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Accounts payable - Third parties | 630,849 | 780,258 | -19.15% | | Accounts payable - Related parties | 44,757 | 35,000 | +27.88% | | Notes payable | 130,665 | 200,000 | -34.67% | | **Total accounts payable and notes** | **806,271** | **1,015,258** | **-20.58%** | Aging Analysis of Accounts Payable (As of June 30) | Aging | June 30, 2025 (RMB thousand) | Dec 31, 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Within four months | 473,008 | 877,920 | -46.12% | | Four months to one year | 319,643 | 127,332 | +151.03% | | One to two years | 9,342 | 6,813 | +37.12% | | Two to three years | 4,007 | 2,947 | +35.97% | | Over three years | 271 | 246 | +10.16% | | **Total** | **806,271** | **1,015,258** | **-20.58%** | - Accounts payable are unsecured, interest-free, and normally settled within **120 days**, with carrying amounts approximating fair values[40](index=40&type=chunk)[41](index=41&type=chunk) [16. Segment Information](index=19&type=section&id=16.%20%E5%88%86%E9%83%A8%E4%BF%A1%E6%81%AF) The Group operates two main segments: "Company Segment" (TCM manufacturing/sales in mainland China) and "Tongrentang Chinese Medicine Segment" (TCM/healthcare products outside mainland China); in H1 2025, the Company Segment saw decreased revenue and profit, while the Tongrentang Chinese Medicine Segment achieved growth in both - The Group's principal operating segments are: (i) the Company's manufacturing and sale of TCM products in mainland China ("Company Segment"), and (ii) Beijing Tongrentang Chinese Medicine Co., Ltd. and its subsidiaries engaged in the production, retail, and wholesale of TCM products and healthcare products outside mainland China, and provision of TCM diagnostic and treatment services, and wholesale of healthcare products in mainland China ("Tongrentang Chinese Medicine Segment")[42](index=42&type=chunk) Segment Revenue (For the six months ended June 30) | Segment | 2025 (RMB thousand) | 2024 (RMB thousand) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Company Segment | 2,456,181 | 2,721,158 | -9.74% | | Tongrentang Chinese Medicine Segment | 702,070 | 610,131 | +15.07% | | Other | 580,252 | 718,805 | -19.30% | | **Total revenue from external customers** | **3,738,503** | **4,050,094** | **-7.69%** | Segment Profit for the Period (For the six months ended June 30) | Segment | 2025 (RMB thousand) | 2024 (RMB thousand) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Company Segment | 240,220 | 302,703 | -20.64% | | Tongrentang Chinese Medicine Segment | 230,913 | 224,106 | +3.04% | | Other | 12,897 | 55,975 | -76.96% | | **Total profit for the period** | **484,030** | **582,784** | **-16.95%** | Segment Assets and Liabilities (As of June 30) | Segment | June 30, 2025 Total Assets (RMB thousand) | Dec 31, 2024 Total Assets (RMB thousand) | June 30, 2025 Total Liabilities (RMB thousand) | Dec 31, 2024 Total Liabilities (RMB thousand) | | :--- | :--- | :--- | :--- | :--- | | Company Segment | 7,885,384 | 7,591,913 | 3,480,337 | 3,286,738 | | Tongrentang Chinese Medicine Segment | 4,149,639 | 4,183,127 | 273,782 | 282,401 | | Other | 2,506,902 | 2,633,551 | 577,046 | 674,373 | | **Total** | **14,541,925** | **14,408,591** | **4,331,165** | **4,243,512** | - Revenue from entities controlled by the ultimate holding company (excluding the Group) accounted for over **10%** of the Group's total revenue from external customers, amounting to **RMB 1,526,714 thousand** in H1 2025[52](index=52&type=chunk)[53](index=53&type=chunk) [17. Commitments](index=25&type=section&id=17.%20%E6%89%BF%E8%AB%BE%E4%BA%8B%E9%A0%85) As of June 30, 2025, the Group had contracted capital commitments of approximately RMB 55,170,000 not reflected in the financial statements, a decrease from 2024 year-end, with short-term and low-value lease commitments due within one year totaling RMB 10,239 thousand Capital Commitments (As of June 30) | Commitment Type | June 30, 2025 (RMB thousand) | Dec 31, 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Contracted capital commitments | 55,170 | 77,945 | -29.22% | Operating Lease Commitments (As of June 30) | Commitment Type | June 30, 2025 (RMB thousand) | Dec 31, 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Not later than one year | 10,239 | 17,085 | -40.07% | - The Group's leases for warehouses and production/operation sites are irrevocable, with right-of-use assets recognized, except for short-term and low-value leases[55](index=55&type=chunk) [18. Related Party Transactions](index=26&type=section&id=18.%20%E9%97%9C%E9%80%A3%E6%96%B9%E4%BA%A4%E6%98%93) The Group engages in significant related party transactions with its ultimate holding company, subsidiaries, associates, and joint ventures, including trademark usage fees, product sales/purchases, advertising, property leases, and supply chain/technical services; related party balances show a significant increase in receivables and changes in payables and lease liabilities [Transactions with Ultimate Holding Company](index=26&type=section&id=%E8%88%87%E6%9C%80%E7%B5%82%E6%8E%A7%E8%82%A1%E5%85%AC%E5%8F%B8%E4%BA%A4%E6%98%93) Transactions with the ultimate holding company include trademark usage fees, TCM product sales, advertising services, property lease expenses, additions to right-of-use assets, and lease liability interest expenses, with trademark usage fees and new right-of-use assets significantly increasing Transactions with Ultimate Holding Company (For the six months ended June 30) | Transaction Type | 2025 (RMB thousand) | 2024 (RMB thousand) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Trademark usage fees | 5,916 | 2,350 | +151.74% | | Sales of TCM related products | 2 | 9 | -77.78% | | Advertising service income | 283 | 800 | -64.63% | | Property lease expenses | 75 | 91 | -17.58% | | Additions to right-of-use assets | 14,825 | 454 | +3165.42% | | Interest expense on lease liabilities - Property, plant and equipment | 585 | 522 | +12.07% | | Interest expense on lease liabilities - Land use rights | 174 | 341 | -48.97% | - Additions to right-of-use assets (property, plant and equipment) significantly increased from **RMB 454 thousand** in 2024 to **RMB 14,825 thousand** in 2025, an increase of over 30 times[61](index=61&type=chunk) - The trademark license agreement has been renewed until **December 31, 2027**[62](index=62&type=chunk) [Transactions with Subsidiaries, Associates and Joint Ventures of Ultimate Holding Company](index=28&type=section&id=%E8%88%87%E6%9C%80%E7%B5%82%E6%8E%A7%E8%82%A1%E5%85%AC%E5%8F%B8%E7%9A%84%E5%AD%90%E5%85%AC%E5%8F%B8%E3%80%81%E8%81%AF%E7%87%9F%E4%BC%81%E6%A5%AD%E5%8F%8A%E5%90%88%E7%87%9F%E4%BC%81%E6%A5%AD%E7%9A%84%E4%BA%A4%E6%98%93) Transactions with subsidiaries, associates, and joint ventures of the ultimate holding company primarily involve TCM product sales and purchases, exclusive distribution product purchases, advertising income, property lease income, and supply chain/technical service purchases; TCM product sales slightly increased, while purchases of TCM related products and supply chain management services significantly rose Transactions with Related Party Subsidiaries, Associates and Joint Ventures (For the six months ended June 30) | Transaction Type | 2025 (RMB thousand) | 2024 (RMB thousand) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Sales of TCM related products | 1,523,865 | 1,516,013 | +0.52% | | Purchases of TCM related products | 155,567 | 53,091 | +193.03% | | Purchases of exclusive distribution products | 10,314 | 47,188 | -78.16% | | Purchases of e-commerce services | - | 1,387 | -100.00% | | Advertising service income | 1,599 | 5,149 | -68.94% | | Purchases of supply chain management services | 3,524 | - | New | | Purchases of technical services | 1,853 | - | New | - Purchases of TCM related products significantly increased by **193.03%** from **RMB 53,091 thousand** in 2024 to **RMB 155,567 thousand** in 2025[63](index=63&type=chunk) - New purchases of supply chain management services and technical services reflect increased cooperation with related parties in operations and technical support[63](index=63&type=chunk) [Balances with Related Companies](index=31&type=section&id=%E9%97%9C%E9%80%A3%E5%85%AC%E5%8F%B8%E5%BE%80%E4%BE%86%E9%A4%98%E9%A1%8D) As of June 30, 2025, total receivables from related companies (including the ultimate holding company, its subsidiaries, associates, and joint ventures) significantly increased, driven by growth in net receivables from related party subsidiaries, associates, and joint ventures; payables to related companies and lease liabilities also changed Balances with Related Companies (As of June 30) | Balance Type | June 30, 2025 (RMB thousand) | Dec 31, 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Amounts due from ultimate holding company | 1,721 | 1,105 | +55.75% | | Amounts due from related party subsidiaries, associates and joint ventures | 416,596 | 257,342 | +62.04% | | Amounts due to related party subsidiaries, associates and joint ventures | 69,535 | 65,137 | +6.75% | | Lease liabilities (Ultimate holding company and its subsidiaries) | 37,650 | 25,971 | +44.97% | | Borrowings from related companies (Ultimate holding company) | 32,300 | 32,300 | 0.00% | - Net amounts due from related party subsidiaries, associates, and joint ventures increased by **61.80%** from **RMB 255,304 thousand** at 2024 year-end to **RMB 413,081 thousand** as of June 30, 2025[66](index=66&type=chunk) - Related company balances are unsecured, interest-free, and normally settled within **twelve months**; related company borrowings are unsecured entrusted loans with interest rates referencing the PBOC benchmark lending rate, settled within **three years**[68](index=68&type=chunk) [Management Discussion and Analysis](index=33&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 reviews the Group's H1 2025 business performance and financial position, noting revenue and profit declines due to marketing reforms and inventory optimization, but progress in key product strategies and overseas market expansion [Business Review](index=33&type=section&id=%E6%A5%AD%E5%8B%99%E5%9B%9E%E9%A1%A7) In H1 2025, the Group's sales revenue and net profit decreased due to marketing reforms and inventory optimization, but it deepened production, quality, product line, channel, and R&D efforts, with Tongrentang Chinese Medicine achieving double-digit growth in overseas sales and net profit Group Performance Overview for H1 2025 | Metric | H1 2025 (RMB) | H1 2024 (RMB) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Sales Revenue | 3,738,503 thousand | 4,050,094 thousand | -7.69% | | Net Profit | 484,030 thousand | 582,784 thousand | -16.95% | | Net profit attributable to owners of the Company | 338,667 thousand | 428,752 thousand | -21.01% | | Net profit attributable to owners of the Company after deducting impact of disposal of subsidiary equity | - | - | -11.39% | | Tongrentang Chinese Medicine Sales Revenue | 702,070 thousand | - | +15.99% | | Tongrentang Chinese Medicine Net Profit attributable to owners | 216,168 thousand | - | +8.23% | - The decrease in sales revenue and net profit was primarily due to the deepening of marketing reforms, accelerating market inventory turnover, optimizing inventory structure, and improving market order[69](index=69&type=chunk) - The Group concentrated its advantageous resources to implement lean operations for six major product lines: **"major products, mid-tier products, imperial medicines, national medicine精品, Ejiao, and pediatric medicines"**[71](index=71&type=chunk) - Among leading products, sales revenue of the **Liuwei Dihuang Wan series increased by approximately 47.99%**, the **Jinkui Shenqi series by approximately 19.55%**, and the **Jingzhi Niuhuang Jiedu Pian series by approximately 4.03%**[72](index=72&type=chunk) - Tongrentang Chinese Medicine continued to lead the **"medicine-driven by medical services, culture-first"** Tongrentang model to expand overseas, achieving a year-on-year sales revenue increase of **15.99%** and a net profit increase of **8.23%**[73](index=73&type=chunk) [Employees and Remuneration Policy](index=35&type=section&id=%E5%83%B1%E5%93%A1%E5%8F%8A%E8%96%AA%E9%85%AC%E6%94%BF%E7%AD%96) As of June 30, 2025, the Group had 3,888 employees, a slight decrease from 2024 year-end; the company continues to reform and improve its remuneration policy, focusing on talent development, training, career opportunities, and comprehensive employee benefits Number of Employees | Metric | June 30, 2025 | Dec 31, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Total number of Group employees | 3,888 | 3,991 | -2.58% | | Number of Company employees | 1,914 | 1,931 | -0.88% | - The Company continuously reforms and improves its employee remuneration policy and system to ensure employees are fairly compensated and share in results based on their contributions[74](index=74&type=chunk) - Employee benefits include **pension insurance, medical insurance, unemployment insurance, work injury insurance, maternity insurance, and housing provident fund**[74](index=74&type=chunk) [Financial Review](index=36&type=section&id=%E8%B2%A1%E5%8B%99%E5%9B%9E%E9%A1%A7) The Group maintains a sound financial position with ample liquidity, good quick and inventory turnover ratios, and a stable capital structure with a reasonable capital gearing ratio; expense ratios remained stable, gross profit margin slightly rose, but net profit margin declined; R&D and capital expenditures fluctuated, with no asset pledges or contingent liabilities [Liquidity and Financial Resources](index=36&type=section&id=%E6%B5%81%E5%8B%95%E8%B3%87%E9%87%91%E5%8F%8A%E8%B2%A1%E5%8B%99%E8%B3%87%E6%BA%90) The Group's funds primarily come from daily operations and borrowings, denominated in RMB and HKD; as of June 30, 2025, cash and cash equivalents and bank time deposits significantly increased, while short-term borrowings substantially decreased and long-term borrowings increased, indicating a shift towards longer-term debt Liquidity and Borrowings (As of June 30) | Metric | June 30, 2025 (RMB thousand) | Dec 31, 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Cash and cash equivalents | 4,781,018 | 4,129,488 | +15.77% | | Bank time deposits | 254,776 | 164,205 | +55.16% | | Short-term borrowings | 375,465 | 1,051,966 | -64.31% | | Long-term borrowings | 1,842,098 | 1,202,332 | +53.21% | | Short-term borrowings as % of total liabilities | 8.67% | 24.79% | -16.12% | | Long-term borrowings as % of total liabilities | 42.53% | 28.33% | +14.20% | - The Group primarily conducts borrowings and holds cash and cash equivalents in **RMB and HKD**[76](index=76&type=chunk) [Capital Structure](index=36&type=section&id=%E8%B3%87%E6%9C%AC%E6%9E%B6%E6%A7%8B) As of June 30, 2025, the Group's total assets, total equity, and total liabilities all increased; funds were primarily used for production and operations, fixed asset acquisitions, repayment of borrowings, and dividend payments Capital Structure Overview (As of June 30) | Metric | June 30, 2025 (RMB thousand) | Dec 31, 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Total assets | 14,541,925 | 14,408,591 | +0.92% | | Non-current liabilities | 2,049,447 | 1,402,041 | +46.18% | | Current liabilities | 2,281,718 | 2,841,471 | -19.69% | | Equity attributable to owners of the Company | 7,296,164 | 7,206,197 | +1.25% | | Non-controlling interests | 2,914,596 | 2,958,882 | -1.49% | - The Group's capital management policy aims to safeguard its ability to continue as a going concern, provide returns to shareholders, and maintain an optimal capital structure to reduce the cost of capital[78](index=78&type=chunk) [Liquidity](index=37&type=section&id=%E8%B3%87%E9%87%91%E6%B5%81%E5%8B%95%E6%80%A7) As of June 30, 2025, the Group's current ratio and quick ratio both improved, reflecting ample financial resources and good liquidity; accounts receivable turnover slightly decreased, while accounts payable and inventory turnover improved Liquidity Ratios (As of June 30) | Metric | June 30, 2025 | Dec 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Current ratio | 4.82 | 3.81 | +1.01 | | Quick ratio | 2.73 | 1.93 | +0.80 | | Accounts receivable turnover | 8.34 | 9.84 | -1.50 | | Accounts payable turnover | 6.20 | 4.00 | +2.20 | | Inventory turnover | 1.52 | 1.47 | +0.05 | - The improvement in current ratio and quick ratio reflects the Group's ample financial resources and good liquidity[79](index=79&type=chunk) [Capital Gearing Ratio](index=37&type=section&id=%E8%B3%87%E6%9C%AC%E8%B2%A0%E5%82%B5%E6%AF%94%E7%8E%87) As of June 30, 2025, the Group's capital gearing ratio was 0.30, a slight decrease from 2024 year-end, indicating a stable capital structure Capital Gearing Ratio (As of June 30) | Metric | June 30, 2025 | Dec 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Capital gearing ratio | 0.30 | 0.31 | -0.01 | [Expenses and Expense Ratios](index=37&type=section&id=%E8%B2%BB%E7%94%A8%E5%8F%8A%E8%B2%BB%E7%94%A8%E6%AF%94%E7%8E%87) For H1 2025, the Group's selling expenses, administrative expenses, and finance income, both in absolute terms and as a percentage of revenue, remained relatively stable with no significant changes Expenses and Expense Ratios (As of June 30) | Metric | 2025 (RMB thousand) | 2024 (RMB thousand) | 2025 Expense Ratio | 2024 Expense Ratio | Expense Ratio Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Selling expenses | 576,087 | 664,296 | 0.15 | 0.16 | -0.01 | | Administrative expenses | 266,056 | 239,062 | 0.07 | 0.06 | +0.01 | | Finance income | 12,094 | 11,605 | 0.0032 | 0.0029 | +0.0003 | - Various expense ratios did not undergo significant changes compared to the same period last year, maintaining reasonable levels[81](index=81&type=chunk) [Gross Profit Margin and Net Profit Margin](index=37&type=section&id=%E6%AF%9B%E5%88%A9%E7%8E%87%E5%8F%8A%E6%B7%A8%E5%88%A9%E6%BD%A4%E7%8E%87) For H1 2025, the Group's gross profit margin slightly increased to 38.16%, while its net profit margin decreased to 12.95% Gross Profit Margin and Net Profit Margin (As of June 30) | Metric | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | Gross profit margin | 38.16% | 37.95% | +0.21% | | Net profit margin | 12.95% | 14.39% | -1.44% | [Research and Development Expenditure](index=38&type=section&id=%E7%A0%94%E7%99%BC%E6%94%AF%E5%87%BA) For H1 2025, the Group's R&D expenditure, excluding staff welfare, depreciation, and amortization, was RMB 26.732 million, representing 0.72% of revenue; including all expenses, R&D expenditure was RMB 53.005 million, representing 1.42% of revenue Research and Development Expenditure (As of June 30) | Metric | 2025 (RMB million) | 2024 (RMB million) | 2025 % of Revenue | 2024 % of Revenue | | :--- | :--- | :--- | :--- | :--- | | R&D expenditure (excluding staff welfare, depreciation, amortization) | 26.732 | 27.510 | 0.72% | 0.68% | | R&D expenditure (including all expenses) | 53.005 | 52.652 | 1.42% | 1.30% | [Capital Expenditure](index=38&type=section&id=%E8%B3%87%E6%9C%AC%E9%96%8B%E6%94%AF) For H1 2025, the Group's capital expenditure was RMB 63 million, primarily for purchasing production equipment, a decrease from the prior year Capital Expenditure (As of June 30) | Metric | 2025 (RMB million) | 2024 (RMB million) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Capital expenditure | 63 | 84 | -25.00% | - Capital expenditure was primarily used for purchasing production equipment[84](index=84&type=chunk) [Pledge of Group Assets](index=38&type=section&id=%E9%9B%86%E5%9C%98%E8%B3%87%E7%94%A2%E6%8A%B5%E6%8A%BC) As of June 30, 2025, none of the Group's assets were pledged for any debts - As of **June 30, 2025**, none of the Group's assets were pledged for any debts (December 31, 2024: nil)[85](index=85&type=chunk) [Contingent Liabilities](index=38&type=section&id=%E6%88%96%E6%9C%89%E8%B2%A0%E5%82%B5) As of June 30, 2025, the Group had no contingent liabilities - As of **June 30, 2025**, the Group had no contingent liabilities (December 31, 2024: nil)[86](index=86&type=chunk) [Foreign Exchange Risk](index=38&type=section&id=%E5%A4%96%E5%8C%AF%E9%A2%A8%E9%9A%AA) The Group primarily operates in mainland China with RMB-settled business, but faces foreign exchange risk from overseas trade, assets/liabilities, and net investments (mainly HKD); the Group currently has no foreign currency hedging policy and manages risk by closely monitoring exchange rate fluctuations - The Group's principal operations are located in mainland China, with its main business settled in **RMB**[87](index=87&type=chunk) - The Group remains exposed to foreign exchange risk from its overseas trade business, recognized assets and liabilities, and net investments in overseas operations (primarily involving **HKD**)[87](index=87&type=chunk) - The Group currently has no foreign currency hedging policy and primarily manages foreign exchange risk by closely monitoring exchange rate fluctuations[87](index=87&type=chunk) [Material Investments Held/Plans for Material Investments or Capital Assets](index=38&type=section&id=%E6%8C%81%E6%9C%89%E7%9A%84%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B3%87/%E6%9C%AA%E4%BE%86%E4%BD%9C%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B3%87%E6%88%96%E8%B3%BC%E5%85%A5%E8%B3%87%E6%9C%AC%E8%B3%87%E7%94%A2%E7%9A%84%E8%A8%88%E5%8A%83) The Group had no material investments during the reporting period and no plans for material investments or capital asset acquisitions as of the announcement date - The Group had no material investments during the reporting period[88](index=88&type=chunk) - As of the date of this announcement, the Group had no plans for any material investments or acquisitions of capital assets[88](index=88&type=chunk) [Material Acquisitions and Disposals of Subsidiaries, Joint Ventures and Associates](index=38&type=section&id=%E5%AD%90%E5%85%AC%E5%8F%B8%E3%80%81%E5%90%88%E7%87%9F%E4%BC%81%E6%A5%AD%E5%8F%8A%E8%81%AF%E7%87%9F%E4%BC%81%E6%A5%AD%E7%9A%84%E9%87%8D%E5%A4%A7%E6%94%B6%E8%B3%BC%E5%8F%8A%E5%87%BA%E5%94%AE) The Group had no material acquisitions or disposals of subsidiaries, joint ventures, or associates during the reporting period - The Group had no material acquisitions or disposals of subsidiaries, joint ventures, or associates during the reporting period[89](index=89&type=chunk) [No Material Changes](index=38&type=section&id=%E4%B8%A6%E7%84%A1%E9%87%8D%E5%A4%A7%E8%AE%8A%E5%8B%95) There have been no material changes in the Group's business since the publication of the 2024 annual report on April 25, 2025 - There have been no material changes in the Group's business since the publication of the most recent annual report for the year ended **December 31, 2024**, on **April 25, 2025**[90](index=90&type=chunk) [Future Outlook](index=39&type=section&id=%E6%9C%AA%E4%BE%86%E5%B1%95%E6%9C%9B) The Group anticipates the TCM industry to shift towards technology-driven, high-quality development, and will continue to deepen its "quality and efficiency improvement" strategy, focusing on reform, innovation, lean management, optimizing production, strengthening "all-staff marketing," and implementing a "major product strategy" to achieve revenue and profit targets and lay the foundation for the "15th Five-Year Plan" - The TCM industry is undergoing profound changes, accelerating its transformation from a traditional experience-based model to a **technology-driven model**, expected to become a significant representative of new quality productive forces[91](index=91&type=chunk) - The Group will continue to implement its **"quality and efficiency improvement" strategy**, focusing on reform and innovation, and promoting a lean management model covering the entire process, value chain, and all levels[91](index=91&type=chunk) - The focus of production work in the second half of the year will be on **"optimization and supply assurance"**, centered on **"ensuring output value, controlling costs, adjusting structure, and reducing inventory"**, to promote the development of smart manufacturing[91](index=91&type=chunk) - Marketing efforts will strengthen the **"all-staff marketing" awareness**, steadfastly implement the **"major product strategy"**, strictly control market order, and actively explore markets driven by innovation[91](index=91&type=chunk) [Other Information](index=40&type=section&id=%E5%85%B6%E4%BB%96%E8%B3%87%E6%96%99) This section covers corporate governance, directors' and supervisors' securities transactions, risk management and internal control, director changes, audit committee review, disclosure of interests for directors and substantial shareholders, listed securities transactions, and competing interests [Corporate Governance Code](index=40&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%AE%88%E5%88%99) During the reporting period, the Company consistently complied with the Code Provisions of the HKEX Corporate Governance Code, with no non-compliance identified by the directors - During the reporting period, the Company consistently complied with the Code Provisions in Part 2 of the **Corporate Governance Code** as set out in Appendix C1 to the HKEX Listing Rules[92](index=92&type=chunk) - The Directors are not aware of any information that would reasonably indicate the Company's failure to comply with the requirements of the Corporate Governance Code at any time during the reporting period[92](index=92&type=chunk) [Securities Transactions by Directors and Supervisors](index=40&type=section&id=%E8%91%A3%E4%BA%8B%E5%8F%8A%E7%9B%A3%E4%BA%8B%E7%9A%84%E8%AD%89%E5%88%B8%E4%BA%A4%E6%98%93) The Company adopted a code of conduct no less stringent than the Model Code, and all directors and supervisors confirmed strict compliance with relevant codes during the reporting period after inquiry - The Company has adopted a code of conduct regarding securities transactions by its Directors and Supervisors that is no less stringent than the standards set out in the **Model Code for Securities Transactions by Directors of Listed Issuers** in Appendix C3 to the Listing Rules[93](index=93&type=chunk) - Following specific inquiries with all Directors and Supervisors, they confirmed strict compliance with the standards set out in the Model Code and the Company's code of conduct during the reporting period[93](index=93&type=chunk) [Risk Management and Internal Control](index=40&type=section&id=%E9%A2%A8%E9%9A%AA%E7%AE%A1%E7%90%86%E5%8F%8A%E5%85%A7%E9%83%A8%E7%9B%A3%E6%8E%A7) The Board is responsible for assessing and determining the nature and extent of risks, ensuring effective risk management and internal control systems; the Group's system is built referencing various standards, with the legal department managing risk and the internal audit department independently reviewing operations and reporting to the Audit Committee - The Board is responsible for assessing and determining the nature and extent of the risks it is willing to take in achieving the Group's strategic objectives, and for ensuring that the Group establishes and maintains sound and effective risk management and internal control systems[94](index=94&type=chunk) - The terms of reference of the Audit Committee under the Company's Board of Directors cover responsibilities in **risk management**[94](index=94&type=chunk) - The Group has an internal audit function, with a dedicated internal audit department that conducts regular independent reviews of the Group's operations and reports any key findings, internal audit processes, and results to the Audit Committee[95](index=95&type=chunk) [Changes in Directors, Abolition of Supervisory Committee and Retirement of Supervisors](index=41&type=section&id=%E8%91%A3%E4%BA%8B%E8%AE%8A%E6%9B%B4%E3%80%81%E5%8F%96%E6%B6%88%E7%9B%A3%E4%BA%8B%E6%9C%83%E5%8F%8A%E7%9B%A3%E4%BA%8B%E9%80%80%E4%BB%BB) Effective June 12, 2025, Mr. Chen Fei was appointed Non-executive Director, and Ms. Wang Chunrui resigned; effective June 4, 2025, Mr. Di Shubing was re-designated as Non-executive Director, Mr. Zhang Yi as Executive Director and Chairman, Mr. Chen Jiafu and Ms. Feng Zhimei as Non-executive Directors, and Mr. Zhang Chunyou and Ms. Wen Kaiting were appointed General Manager and Chief Accountant, with proposed election as Executive Directors; the Supervisory Committee was abolished, and supervisors retired, effective August 18, 2025 - Effective **June 12, 2025**, Mr. Chen Fei was appointed as a Non-executive Director of the Ninth Board of Directors, and Ms. Wang Chunrui resigned as a Non-executive Director[96](index=96&type=chunk) - Mr. Di Shubing resigned from his positions as Director and Chairman, and was re-designated as a Non-executive Director[97](index=97&type=chunk) - Mr. Zhang Yi was re-designated as an Executive Director of the Company, elected as the Chairman of the Company, appointed as the Chairman of the Board's Nomination Committee and Strategy and Planning Committee, and as an authorized representative of the Company[97](index=97&type=chunk) - The Company abolished the Supervisory Committee effective **August 18, 2025**. All Supervisors also retired from their supervisory positions effective **August 18, 2025**[98](index=98&type=chunk) [Audit Committee](index=42&type=section&id=%E5%AF%A9%E6%A0%B8%E5%A7%94%E5%93%A1%E6%9C%83) The Audit Committee reviewed the Group's unaudited financial statements for H1 2025, discussing internal audit, risk management, and internal control, with no objections to the accounting treatments - The Audit Committee has reviewed the operating results, financial position, and principal accounting policies of the Group's unaudited financial statements for the six months ended **June 30, 2025**[101](index=101&type=chunk) - The Audit Committee had no objections to the accounting treatments in the Group's unaudited financial statements for the six months ended **June 30, 2025**[101](index=101&type=chunk) [Directors', Supervisors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares and Debentures of the Company or its Associated Corporations](index=42&type=section&id=%E8%91%A3%E4%BA%8B%E3%80%81%E7%9B%A3%E4%BA%8B%E5%8F%8A%E6%9C%80%E9%AB%98%E8%A1%8C%E6%94%BF%E4%BA%BA%E5%93%A1%E6%96%BC%E6%9C%AC%E5%85%AC%E5%8F%B8%E6%88%96%E5%85%B6%E7%9B%B8%E8%81%AF%E6%B3%95%E5%9C%98%E7%9A%84%E8%82%A1%E4%BB%BD%E3%80%81%E7%9B%B8%E9%97%9C%E8%82%A1%E4%BB%BD%E5%8F%8A%E5%82%B5%E6%AC%8A%E8%AD%89%E4%B9%8B%E6%AC%8A%E7%9B%8A%E5%8F%8A%E6%B7%A1%E5%80%89) As of June 30, 2025, among directors, supervisors, and chief executives, Mr. Chen Fei held 61,000 long positions in Beijing Tongrentang Chinese Medicine Co., Ltd., representing 0.00% of its shares Directors' Interests in Shares of Associated Corporations (As of June 30) | Director Name | Associated Corporation | Capacity | Number of Shares | Percentage of Issued Shares | | :--- | :--- | :--- | :--- | :--- | | Chen Fei | Beijing Tongrentang Chinese Medicine Co., Ltd. | Beneficial owner | 61,000(L) | 0.00% | - Beijing Tongrentang Chinese Medicine Co., Ltd. is a subsidiary of the Company and thus an associated corporation as defined in Part XV of the Securities and Futures Ordinance[103](index=103&type=chunk) [Substantial Shareholders' Interests and Short Positions in Shares, Underlying Shares and Debentures of the Company or its Associated Corporations](index=42&type=section&id=%E4%B8%BB%E8%A6%81%E8%82%A1%E6%9D%B1%E6%96%BC%E6%9C%AC%E5%85%AC%E5%8F%B8%E6%88%96%E5%85%B6%E7%9B%B8%E8%81%AF%E6%B3%95%E5%9C%98%E7%9A%84%E8%82%A1%E4%BB%BD%E3%80%81%E7%9B%B8%E9%97%9C%E8%82%A1%E4%BB%BD%E5%8F%8A%E5%82%B5%E6%AC%8A%E8%AD%89%E4%B9%8B%E6%AC%8A%E7%9B%8A%E5%8F%8A%E6%B7%A1%E5%80%89) As of June 30, 2025, Tongrentang Co., Ltd. and Group Company were substantial shareholders, collectively holding 48.18% of the Company's voting shares; Yuan Sainan and Hillhouse Capital Advisors, Ltd. also held significant share interests Substantial Shareholders' Interests in Shares (As of June 30) | Shareholder Name | Capacity | Number of Shares (L) | Percentage of Issued Voting Shares | | :--- | :--- | :--- | :--- | | Tongrentang Co., Ltd. | Beneficial owner | 600,000,000 | 46.85% | | Group Company | Interest of corporation controlled by substantial shareholder | 600,000,000 | 46.85% | | Group Company | Beneficial owner | 9,480,000 (Domestic shares) + 7,649,000 (H shares) | 0.74% + 0.60% | | Yuan Sainan | Beneficial owner | 35,732,000 (H shares) | 2.79% | | Hillhouse Capital Advisors, Ltd. | Investment manager | 47,663,000 (H shares) | 3.72% | - Group Company holds **600,000,000 shares** in the Company through Tongrentang Co., Ltd., and directly holds **9,480,000 domestic shares** and **7,649,000 H shares**[108](index=108&type=chunk) - Hillhouse Capital Advisors, Ltd. indirectly holds H shares in the Company through **Gaoling Fund, L.P.** and **YHG Investment, L.P.**[108](index=108&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=44&type=section&id=%E8%B3%BC%E8%B2%B7%E3%80%81%E5%87%BA%E5%94%AE%E6%88%96%E8%B4%96%E5%9B%9E%E6%9C%AC%E5%85%AC%E5%8F%B8%E4%B8%8A%E5%B8%82%E8%AD%89%E5%88%B8) During the reporting period, neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities, and the Company held no treasury shares at the end of the period - During the reporting period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[106](index=106&type=chunk) - As of the end of the reporting period, the Company held no treasury shares[106](index=106&type=chunk) [Material Events After the Reporting Period](index=44&type=section&id=%E5%A0%B1%E5%91%8A%E6%9C%9F%E5%BE%8C%E9%87%8D%E5%A4%A7%E4%BA%8B%E9%A0%85) No material events significantly impacting the Group's operations or financials occurred from June 30, 2025, to the date of this announcement - No material events significantly impacting the Group's operations or financials occurred from **June 30, 2025**, to the date of this announcement[107](index=107&type=chunk) [Competing Interests](index=45&type=section&id=%E7%AB%B6%E7%88%AD%E5%88%A9%E7%9B%8A) The Company and Tongrentang Co., Ltd. both engage in TCM business but avoid direct competition through differing main products and dosage forms; Group Company and Tongrentang Co., Ltd. made a "October Undertaking" granting the Company priority rights for manufacturing and selling specific new products and committed to providing information for independent non-executive directors to review compliance with non-competition undertakings - Both the Company and Tongrentang Co., Ltd. are engaged in the production and sale of TCM products, but their respective main products differ, with the Company focusing on **new dosage forms** and Tongrentang Co., Ltd. primarily producing **traditional dosage forms** of TCM[109](index=109&type=chunk) - Group Company and Tongrentang Co., Ltd. made an **"October Undertaking"** to the Company on **October 19, 2000**, promising not to produce any products with the same name or similar name but different dosage forms that would directly compete with the Company's products (except for Angong Niuhuang Wan)[109](index=109&type=chunk) - Group Company and Tongrentang Co., Ltd. have granted the Company a **preferential right** to manufacture and sell any new products developed by them or any of their subsidiaries that fall into one of the Company's four main product categories (granules, honeyed pills, tablets, and soft capsules)[111](index=111&type=chunk) - The independent non-executive directors will review compliance with the non-competition undertaking at least **once a year** and disclose the review results in the annual report[112](index=112&type=chunk) [Publication of Interim Report on HKEX and Company Websites](index=47&type=section&id=%E6%96%BC%E8%81%AF%E4%BA%A4%E6%89%80%E7%B6%B2%E7%AB%99%E5%8F%8A%E6%9C%AC%E5%85%AC%E5%8F%B8%E7%B6%B2%E7%AB%99%E5%88%8A%E7%99%BB%E4%B8%AD%E6%9C%9F%E5%A0%B1%E5%91%8A) The Group's 2025 interim report, containing unaudited consolidated financial statements and other information for the six months ended June 30, 2025, will be made available to shareholders and published on the HKEX and Company websites in due course - The Company's 2025 interim report, containing the Group's unaudited consolidated financial statements for the six months ended **June 30, 2025**, and other information required by Appendix D2 of the Listing Rules, will be made available to shareholders in due course[113](index=113&type=chunk) - The interim report will be published on the **HKEX website (www.hkexnews.hk)** and the **Company's website (www.tongrentangkj.com)**[113](index=113&type=chunk)

[Financial Highlights](index=1&type=section&id=%E8%B2%A1%E5%8B%99%E6%91%98%E8%A6%81) NET-A-GO TECHNOLOGY LIMITED reported **73.0%** revenue growth and a shift from loss to profit for H1 2025, with **6.4 HK Cents** basic and diluted EPS - No interim dividend declared for the period[2](index=2&type=chunk) Interim Financial Highlights | Metric | Six Months Ended June 30, 2025 (HKD Thousand) | Prior Period (HKD Thousand) | Change Rate | |---|---|---|---| | Revenue | 180,697 | 104,428 | +73.0% | | Profit/(Loss) attributable to equity holders of the Company from continuing operations | 22,670 | (4,225) | Turned from loss to profit | | Profit/(Loss) attributable to equity holders of the Company | 47,535 | (4,811) | Turned from loss to profit | | Basic and diluted earnings per share (HK Cents) | 6.4 | (0.6) | Turned from loss to profit | [Condensed Consolidated Statement of Comprehensive Income](index=2&type=section&id=%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) The condensed consolidated statement of comprehensive income shows significant revenue and gross profit growth, with operating profit turning from loss to profit Condensed Consolidated Statement of Comprehensive Income (For the Six Months Ended June 30) | Metric | 2025 (HKD Thousand) | 2024 (HKD Thousand) | Change | Change Rate | |---|---|---|---|---| | Revenue | 180,697 | 104,428 | +76,269 | +73.0% | | Cost of Revenue | (147,258) | (97,334) | (49,924) | +51.3% | | Gross Profit | 33,439 | 7,094 | +26,345 | +371.4% | | Operating Profit/(Loss) | 20,940 | (5,801) | +26,741 | Turned from loss to profit | | Profit/(Loss) from continuing operations for the period | 18,390 | (7,078) | +25,468 | Turned from loss to profit | | Profit/(Loss) from discontinued operations for the period | 24,865 | (586) | +25,451 | Turned from loss to profit | | Profit/(Loss) attributable to equity holders of the Company | 47,535 | (4,811) | +52,346 | Turned from loss to profit | | Basic and diluted EPS (HK Cents) - Continuing operations | 3.1 | (0.5) | +3.6 | Turned from loss to profit | | Basic and diluted EPS (HK Cents) - Discontinued operations | 3.3 | (0.1) | +3.4 | Turned from loss to profit | | Basic and diluted EPS (HK Cents) - Total | 6.4 | (0.6) | +7.0 | Turned from loss to profit | [Condensed Consolidated Statement of Financial Position](index=5&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) Total assets slightly increased by June 30, 2025, driven by current asset growth, while non-current assets decreased, and total equity and liabilities varied Condensed Consolidated Statement of Financial Position (As at June 30, 2025) | Metric | June 30, 2025 (HKD Thousand) | December 31, 2024 (HKD Thousand) | Change | Change Rate | |---|---|---|---|---| | Total Non-current Assets | 307,164 | 388,820 | (81,656) | -21.0% | | Total Current Assets | 675,068 | 588,688 | +86,380 | +14.7% | | Total Assets | 982,232 | 977,508 | +4,724 | +0.5% | | Total Equity | 373,060 | 348,414 | +24,646 | +7.1% | | Total Non-current Liabilities | 83,418 | 182,244 | (98,826) | -54.2% | | Total Current Liabilities | 525,754 | 446,850 | +78,904 | +17.7% | | Total Liabilities | 609,172 | 629,094 | (19,922) | -3.2% | [Condensed Consolidated Statement of Changes in Equity](index=7&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%AC%8A%E7%9B%8A%E8%AE%8A%E5%8B%95%E8%A1%A8) Total equity increased to **HKD 373,060 thousand** by June 30, 2025, driven by profit and disposal gains, partially offset by share repurchases - Profit for the period **HKD 47,535 thousand** significantly increased equity[8](index=8&type=chunk) - Share repurchases resulted in a reduction in share capital and share premium of **HKD 69,952 thousand**[8](index=8&type=chunk) - Disposal of subsidiaries generated a gain of **HKD 52,404 thousand**[8](index=8&type=chunk) Condensed Consolidated Statement of Changes in Equity (For the Six Months Ended June 30, 2025) | Metric | Balance as at January 1, 2025 (HKD Thousand) | Profit/(Loss) for the period (HKD Thousand) | Other comprehensive loss (HKD Thousand) | Share Repurchases (HKD Thousand) | Disposal of Subsidiaries (HKD Thousand) | Balance as at June 30, 2025 (HKD Thousand) | |---|---|---|---|---|---|---| | Total (Equity attributable to owners of the Company) | 317,820 | 47,535 | (186) | (69,952) | 52,404 | 346,746 | | Total Equity | 348,414 | 43,255 | (186) | (69,952) | 52,404 | 373,060 | [Notes to the Interim Financial Information](index=8&type=section&id=%E4%B8%AD%E6%9C%9F%E8%B2%A1%E5%8B%99%E8%B3%87%E6%96%99%E9%99%84%E8%A8%BB) This section details the basis of preparation, accounting policies, segment information, revenue, expenses, taxes, discontinued operations, EPS, receivables, payables, financial assets, and related party transactions [1. General Information](index=8&type=section&id=1.%20%E4%B8%80%E8%88%AC%E8%B3%87%E6%96%99) NET-A-GO TECHNOLOGY LIMITED, incorporated in the Cayman Islands and listed in Hong Kong, primarily engages in media advertising, environmental protection, and trading - The Company is incorporated in the Cayman Islands with its principal place of business in Hong Kong[9](index=9&type=chunk) - The Company is listed on the Main Board of The Stock Exchange of Hong Kong Limited[10](index=10&type=chunk) - Principal businesses include media advertising and marketing, environmental protection, and trading[10](index=10&type=chunk) [2. Basis of Preparation and Significant Accounting Policies](index=8&type=section&id=2.%20%E7%B7%A8%E8%A3%BD%E5%9F%BA%E6%BA%96%E5%8F%8A%E9%87%8D%E5%A4%A7%E6%9C%83%E8%A8%88%E6%94%BF%E7%AD%96) The condensed consolidated interim financial information is prepared under HKAS 34 using historical cost, with new IFRS amendments having no material impact - The condensed consolidated interim financial information is prepared in accordance with Hong Kong Accounting Standard 34 'Interim Financial Reporting'[11](index=11&type=chunk) - Prepared on a historical cost basis[11](index=11&type=chunk) - The adopted amendments to IFRS had **no material impact** on the Group's financial position and performance for the current and prior periods[12](index=12&type=chunk) [2.1 New Accounting Standards and Accounting Changes](index=9&type=section&id=2.1%20%E6%96%B0%E6%9C%83%E8%A8%88%E6%BA%96%E5%89%87%E5%8F%8A%E6%9C%83%E8%A8%88%E8%AE%8A%E5%8B%95) New IFRS amendments, including IAS 21 and IFRS 21 (Amendments) 'Lack of Exchangeability', were applied with no material impact on financial position or performance - IAS 21 and IFRS 21 (Amendments) 'Lack of Exchangeability' were first applied in this interim period[12](index=12&type=chunk) - The application of new accounting standards had **no material impact** on the Group's financial position and performance for the current and prior periods[12](index=12&type=chunk) [3. Segment Information](index=9&type=section&id=3.%20%E5%88%86%E9%83%A8%E8%B3%87%E6%96%99) The Group operates three continuing segments: environmental protection, media advertising, and trading, with property leasing and medical device sales classified as discontinued operations - The Group operates three continuing segments: environmental protection business, media advertising and marketing business, and trading business[13](index=13&type=chunk)[14](index=14&type=chunk) - Property leasing business and medical device sales business have been disposed of and classified as discontinued operations[13](index=13&type=chunk) [3. (a) Segment Revenue and Results Analysis](index=10&type=section&id=3.%20(a)%20%E5%88%86%E9%83%A8%E6%94%B6%E5%85%A5%E5%8F%8A%E6%A5%AD%E7%B8%BE%E5%88%86%E6%9E%90) Segment revenue and results show significant media advertising growth, trading profit from financial assets, declining environmental protection revenue, and substantial discontinued operations profit from disposal - Media advertising and marketing business revenue significantly increased from **HKD 3,791 thousand** to **HKD 128,191 thousand**, achieving **significant growth**[15](index=15&type=chunk) - Profit from trading business primarily derived from gains on financial assets at fair value through profit or loss and disposal gains[15](index=15&type=chunk) Segment Revenue and Results (For the Six Months Ended June 30) | Segment | 2025 Revenue (HKD Thousand) | 2024 Revenue (HKD Thousand) | 2025 Profit/(Loss) (HKD Thousand) | 2024 Profit/(Loss) (HKD Thousand) | |---|---|---|---|---| | Environmental Protection Business | 36,040 | 81,351 | 2,398 | 8,464 | | Media Advertising and Marketing Business | 128,191 | 3,791 | (10,488) | (14,326) | | Trading Business | 16,466 | 19,286 | 29,238 | 2,161 | | Discontinued Operations | 1,176 | 4,324 | 24,865 | (586) | [3. (b) Segment Assets and Liabilities](index=10&type=section&id=3.%20(b)%20%E5%88%86%E9%83%A8%E8%B3%87%E7%94%A2%E5%8F%8A%E8%B2%A0%E5%82%B5) Segment assets and liabilities analysis shows slight environmental protection asset increase, stable media advertising, decreased trading assets and liabilities, and no assets or liabilities for discontinued operations - Assets and liabilities of discontinued operations were **cleared to zero** in the current period[17](index=17&type=chunk) Segment Assets and Liabilities (As at June 30, 2025) | Segment | Assets as at June 30, 2025 (HKD Thousand) | Assets as at December 31, 2024 (HKD Thousand) | Liabilities as at June 30, 2025 (HKD Thousand) | Liabilities as at December 31, 2024 (HKD Thousand) | |---|---|---|---|---| | Environmental Protection Business | 163,142 | 143,780 | 42,012 | 47,386 | | Media Advertising and Marketing Business | 399,789 | 404,575 | 357,996 | 368,887 | | Trading Business | 82,170 | 136,774 | 8,523 | 6,405 | | Discontinued Operations | – | 70,212 | – | 16,288 | [3. (c) Geographical Information](index=11&type=section&id=3.%20(c)%20%E5%9C%B0%E5%8D%80%E8%B3%87%E6%96%99) Continuing operations revenue primarily from China showed significant growth, while Hong Kong revenue slightly decreased, and discontinued operations revenue also mainly came from China - Revenue from continuing operations in China **nearly doubled year-on-year**[18](index=18&type=chunk) - No single customer accounted for more than **10%** of total revenue in the current period[19](index=19&type=chunk) Geographical Segment Revenue (For the Six Months Ended June 30) | Region | 2025 (HKD Thousand) | 2024 (HKD Thousand) | |---|---|---| | Continuing Operations - China | 164,230 | 86,334 | | Continuing Operations - Hong Kong | 16,467 | 18,094 | | Discontinued Operations - China | 1,176 | 4,324 | [4. Revenue](index=12&type=section&id=4.%20%E6%94%B6%E5%85%A5) Total revenue was approximately **HKD 180,697 thousand**, a **73.0%** year-on-year increase, primarily driven by substantial growth in media advertising and marketing revenue - Advertising revenue from media advertising and marketing business was the **primary driver** of revenue growth in the current period[20](index=20&type=chunk) Revenue Breakdown (For the Six Months Ended June 30) | Business Segment | 2025 (HKD Thousand) | 2024 (HKD Thousand) | Change Rate | |---|---|---|---| | Media Advertising and Marketing Business (Advertising revenue) | 128,191 | 3,791 | +3280.0% | | Environmental Protection Business (Service revenue) | 36,040 | 81,351 | -55.7% | | Trading Business (Cosmetics trading) | 16,466 | 19,142 | -14.0% | | Discontinued Operations (Property leasing) | 1,176 | 996 | +18.1% | [Contract Assets from Customer Contracts](index=13&type=section&id=%E5%AE%A2%E6%88%B6%E5%90%88%E7%B4%84%E7%9B%B8%E9%97%9C%E4%B9%8B%E8%B3%87%E7%94%A2) Total contract assets increased to **HKD 46,398 thousand** by June 30, 2025, mainly due to growth in media advertising and marketing business - Non-current contract assets of **HKD 13,706 thousand** originated from an eight-year service contract in the environmental protection business, not yet converted to trade receivables[21](index=21&type=chunk) Contract Assets (HKD Thousand) | Category | June 30, 2025 | December 31, 2024 | |---|---|---| | Environmental Protection Business | 28,806 | 28,806 | | Media Advertising and Marketing Business | 32,779 | 21,081 | | Total Contract Assets (net of loss allowance) | 46,398 | 34,700 | [5. General and Administrative Expenses](index=14&type=section&id=5.%20%E4%B8%80%E8%88%AC%E5%8F%8A%E8%A1%8C%E6%94%BF%E8%B2%BB%E7%94%A8) General and administrative expenses significantly increased to approximately **HKD 27,564 thousand**, primarily due to higher staff costs from media advertising and marketing business expansion - Staff salaries and allowances **significantly increased**, mainly due to the expansion of the media advertising and marketing business[23](index=23&type=chunk) General and Administrative Expenses (For the Six Months Ended June 30) | Item | 2025 (HKD Thousand) | 2024 (HKD Thousand) | Change Rate | |---|---|---|---| | Staff salaries and allowances | 26,250 | 6,554 | +300.5% | | Total | 27,564 | 12,113 | +127.5% | [6. Finance Income – Net](index=14&type=section&id=6.%20%E8%B2%A1%E5%8B%99%E6%94%B6%E5%85%A5%EF%BC%8D%E6%B7%A8%E9%A1%8D) Net finance income turned to a net expense of **HKD 1,742 thousand**, primarily due to a substantial increase in finance costs from shareholder and related party loans - Finance costs primarily include interest expenses on shareholder loans and related party loans, increasing by approximately **249%** year-on-year[24](index=24&type=chunk) Finance Income – Net (For the Six Months Ended June 30) | Item | 2025 (HKD Thousand) | 2024 (HKD Thousand) | |---|---|---| | Finance income | 2,459 | 2,106 | | Finance costs | (4,201) | (1,204) | | Finance income – net | (1,742) | 902 | [7. Income Tax Expense](index=14&type=section&id=7.%20%E6%89%80%E5%BE%97%E7%A8%85%E9%96%8B%E6%94%AF) Income tax expense decreased to **HKD 808 thousand**, entirely from China corporate income tax, with no Hong Kong profits tax, and mainland China subsidiaries subject to a **25%** tax rate - Hong Kong profits tax is provided at a **16.5%** rate, and mainland China corporate income tax at a **25%** rate[25](index=25&type=chunk) Income Tax Expense (For the Six Months Ended June 30) | Item | 2025 (HKD Thousand) | 2024 (HKD Thousand) | |---|---|---| | China corporate income tax | 808 | 2,179 | [8. Discontinued Operations](index=15&type=section&id=8.%20%E7%B5%82%E6%AD%A2%E7%B6%93%E7%87%9F%E6%A5%AD%E5%8B%99) The Group completed the disposal of its property leasing business and previously sold its medical device sales business, both classified as discontinued operations, with the property leasing disposal generating significant gain - The property leasing business disposal was completed on **June 30, 2025**, for a consideration of approximately **HKD 77,525 thousand**[26](index=26&type=chunk) - The medical device sales business (Youmitai) disposal was completed on **August 1, 2024**, for a consideration of approximately **HKD 24,648 thousand**[28](index=28&type=chunk) [8. (a) Proposed Disposal of Property Leasing Business](index=15&type=section&id=8.%20(a)%20%E6%93%AC%E5%87%BA%E5%94%AE%E7%89%A9%E6%A5%AD%E7%A7%9F%E8%B3%83%E6%A5%AD%E5%8B%99) The Group disposed of its property leasing business for approximately **HKD 77,525 thousand**, completed by **June 30, 2025**, generating a gain of **HKD 24,226 thousand** - A gain of **HKD 24,226 thousand** arose from the disposal of the subsidiary[27](index=27&type=chunk) Property Leasing Disposal Group Results (For the Six Months Ended June 30) | Metric | 2025 (HKD Thousand) | 2024 (HKD Thousand) | |---|---|---| | Revenue | 1,176 | 996 | | Profit after tax from discontinued operations | 639 | 389 | [8. (b) Disposal of Medical Device Sales Business](index=17&type=section&id=8.%20(b)%20%E5%87%BA%E5%94%AE%E9%86%AB%E7%99%82%E5%99%A8%E6%A2%B0%E9%8A%B7%E5%94%AE%E6%A5%AD%E5%8B%99) The Group completed the disposal of **90%** equity in Shanghai Youmitai Medical Technology Co., Ltd. for approximately **HKD 24,648 thousand** on **August 1, 2024**, classified as a discontinued operation Youmitai Results (For the Six Months Ended June 30, 2024) | Metric | 2024 (HKD Thousand) | |---|---| | Revenue | 3,328 | | Loss from discontinued operations for the period | (975) | [9. Dividends](index=18&type=section&id=9.%20%E8%82%A1%E6%81%AF) The Board does not recommend the payment of an interim dividend for the current period, consistent with the prior period - The Directors do not recommend the payment of an **interim dividend** for the interim period[30](index=30&type=chunk) [10. Earnings/(Loss) Per Share](index=18&type=section&id=10.%20%E6%AF%8F%E8%82%A1%E6%BA%A2%E5%88%A9%E2%88%95%EF%BC%88%E虧%E6%90%8D%EF%BC%89) Basic and diluted earnings per share significantly improved to **6.4 HK Cents**, compared to a loss of **0.6 HK Cents** in the prior period Earnings/(Loss) Per Share (For the Six Months Ended June 30) | Metric | 2025 (HKD Thousand/Thousand Shares/HKD) | 2024 (HKD Thousand/Thousand Shares/HKD) | |---|---|---| | Profit/(Loss) attributable to owners of the Company | 47,535 | (4,811) | | Weighted average number of ordinary shares in issue | 746,341 | 769,817 | | Earnings/(Loss) per share | 0.064 | (0.006) | [10. (a) Basic](index=18&type=section&id=10.%20(a)%20%E5%9F%BA%E6%9C%AC) Basic earnings per share, calculated using profit attributable to owners and weighted average ordinary shares, was **HKD 0.064** for the period - Basic earnings per share was **HKD 0.064**, compared to a loss per share of **HKD 0.006** in the prior period[32](index=32&type=chunk) [10. (b) Diluted](index=18&type=section&id=10.%20(b)%20%E6%攤%E8%96%84) Diluted earnings per share equals basic earnings per share as share options had no dilutive effect on loss per share - Diluted earnings per share for the period equals basic earnings per share as share options had **no dilutive effect**[33](index=33&type=chunk) [11. Trade Receivables](index=19&type=section&id=11.%20%E8%B2%A3%E6%98%93%E6%87%89%E6%94%B6%E6%AC%BE%E9%A0%85) Total trade receivables increased by **48.6%** to **HKD 209

[Executive Summary](index=1&type=section&id=%E6%91%98%E8%A6%81) The company's key financial data for the first half of 2025 shows a slight decline in revenue and profit compared to the previous year Key Financial Data Overview for H1 2025 | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 2,015.15 | 2,082.48 | -3.2% | | Gross Profit | 379.06 | 422.17 | -10.2% | | Profit | 162.31 | 183.80 | -11.7% | | Profit Attributable to Equity Holders of the Company | 146.99 | 170.50 | -13.8% | [Performance](index=2&type=section&id=%E6%A5%AD%20%E7%B8%BE) [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=%E7%B6%9C%E5%90%88%E6%90%8D%E7%9B%8A%E5%8F%8A%E5%85%B6%E4%BB%96%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) For the reporting period, the company's revenue from continuing operations was RMB 1,996,183 thousand, with a profit attributable to equity holders of RMB 146,992 thousand Consolidated Statement of Profit or Loss and Other Comprehensive Income (Unaudited) | Metric | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Revenue from Continuing Operations | 1,996,183 | 2,063,123 | | Cost of Sales | (1,635,774) | (1,659,585) | | Gross Profit | 360,409 | 403,538 | | Operating Profit | 207,930 | 222,596 | | Profit Before Tax | 211,383 | 227,674 | | Income Tax | (53,783) | (42,016) | | Profit for the Period from Continuing Operations | 157,600 | 185,658 | | Profit/(Loss) for the Period from Discontinued Operations | 4,706 | (1,859) | | **Profit for the Period** | **162,306** | **183,799** | | Attributable to Equity Holders of the Company | 146,992 | 170,499 | | Attributable to Non-controlling Interests | 15,314 | 13,300 | | Basic Earnings Per Share (RMB cents) | 12.05 | 13.97 | [Consolidated Statement of Financial Position](index=5&type=section&id=%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) As of June 30, 2025, the company's total assets less current liabilities were RMB 3,955,538 thousand, with total equity attributable to equity holders of RMB 3,804,808 thousand Consolidated Statement of Financial Position (Unaudited) | Metric | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Non-current Assets | 1,519,338 | 1,317,425 | | Current Assets | 3,826,922 | 3,822,768 | | Current Liabilities | 1,390,722 | 1,269,083 | | Net Current Assets | 2,436,200 | 2,553,685 | | **Total Assets Less Current Liabilities** | **3,955,538** | **3,871,110** | | Non-current Liabilities | 67,732 | 73,597 | | **Net Assets** | **3,887,806** | **3,797,513** | | Total Equity Attributable to Equity Holders of the Company | 3,804,808 | 3,728,252 | | Non-controlling Interests | 82,998 | 69,261 | | **Total Equity** | **3,887,806** | **3,797,513** | [Notes](index=7&type=section&id=%E9%99%84%20%E8%A8%BB) [Basis of Preparation](index=7&type=section&id=1%20%E7%B7%A8%E8%A3%BD%E5%9F%BA%E6%BA%96) The interim financial information is prepared in accordance with HKAS 34 and the Listing Rules, adopting consistent accounting policies with the 2024 annual financial statements - The interim financial information is prepared in accordance with HKAS 34 "Interim Financial Reporting" and the Listing Rules, authorized for issue on August 26, 2025[10](index=10&type=chunk) - Preparation of interim financial reports involves management judgments, estimates, and assumptions, where actual results may differ from estimates[11](index=11&type=chunk) [Changes in Accounting Policies](index=7&type=section&id=2%20%E6%9C%83%E8%A8%88%E6%94%BF%E7%AD%96%E8%AE%8A%E5%8B%95) The Group has applied the HKAS 21 amendment, but it has no material impact on the interim announcement due to the absence of foreign currency non-exchangeable transactions - The Group has applied the HKAS 21 amendment "The Effects of Changes in Foreign Exchange Rates – Lack of Exchangeability", which has no material impact on this interim announcement due to the absence of foreign currency non-exchangeable transactions[12](index=12&type=chunk) [Discontinued Operations](index=7&type=section&id=3%20%E9%9D%9E%E6%8C%81%E7%BA%8C%E7%87%9F%E6%A5%AD%E5%8B%99) During the period, the Group disposed of certain wholly-owned subsidiaries for a total consideration of RMB 337,789,000, resulting in a profit of RMB 4,706 thousand from discontinued operations - The Group has disposed of certain wholly-owned subsidiaries for a total consideration of **RMB 337,789,000**, paid by equity, commercial apartments, and cash, with the transaction completed[13](index=13&type=chunk) Profit/(Loss) and Basic Earnings Per Share/(Loss) from Discontinued Operations | Metric | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Profit/(Loss) for the Period from Discontinued Operations | 9,351 | (1,859) | | Loss on Disposal of Discontinued Operations | (2,152) | – | | Income Tax on Disposal of Discontinued Operations | (2,493) | – | | **Profit/(Loss) from Discontinued Operations, Net of Tax** | **4,706** | **(1,859)** | | Basic Earnings Per Share/(Loss) | 0.39 | (0.15) | Impact of Disposal on the Group's Financial Position | Current Assets | 686,744 | | :--- | :--- | | Non-current Assets | 8,445 | | Current Liabilities | (355,248) | | Net Assets Attributable to the Group | 339,941 | | Consideration | 337,789 | | Loss on Disposal of Discontinued Operations | (2,152) | | Net Cash Inflow from Disposal | 52,970 | [Revenue and Segment Reporting](index=9&type=section&id=4%20%E6%94%B6%E7%9B%8A%E5%8F%8A%E5%88%86%E9%83%A8%E5%A0%B1%E5%91%8A) The Group's total revenue for the period was RMB 2,015,145 thousand, a 3.2% decrease year-on-year, primarily from property management and discontinued financial services in Mainland China - The Group's principal activities are providing basic property management services, value-added services, and financial services (discontinued)[18](index=18&type=chunk) Classification of Revenue from Contracts with Customers by Major Category | Revenue Category | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Basic Property Management Services | 1,799,782 | 1,713,976 | | Value-added Services | 184,284 | 349,147 | | Car Park Space Sales | 12,117 | – | | Financial Services Income (Discontinued Operations) | 18,962 | 19,355 | | **Total Revenue** | **2,015,145** | **2,082,478** | - For the six months ended June 30, 2025, **Excellence Group and other related parties contributed RMB 162,451 thousand in revenue**, a **38.1% decrease** year-on-year[21](index=21&type=chunk) - The Group manages its business based on two reportable segments: property management services and financial services (disposed of in 2025)[24](index=24&type=chunk) Revenue by Time of Recognition and Segment | Segment Revenue | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Property Management Services | 1,996,183 | 2,063,123 | | Financial Services (Discontinued Operations) | 18,962 | 19,355 | | **Reportable Segment Revenue from External Customers** | **2,015,145** | **2,082,478** | | Reportable Segment Profit/(Loss) | 225,399 | 228,090 | - The majority of the Group's revenue is generated in Mainland China[27](index=27&type=chunk) [Income Tax](index=11&type=section&id=5%20%E6%89%80%E5%BE%97%E7%A8%85) Income tax expense for the period was RMB 53,783 thousand, a 27.9% increase year-on-year, with major PRC subsidiaries subject to a 25% statutory tax rate Income Tax Expense Details | Metric | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Current Tax | 63,357 | 67,950 | | Deferred Tax | (9,574) | (25,934) | | **Income Tax** | **53,783** | **42,016** | - Major PRC subsidiaries are subject to a **25% statutory corporate income tax rate**, while some eligible small profit enterprises or those registered in western regions enjoy a **15% preferential tax rate**[29](index=29&type=chunk) - Dividends distributed by PRC resident enterprises to non-PRC resident enterprise investors are subject to a **10% withholding tax**, with eligible Hong Kong tax residents enjoying a **5% reduced tax rate**[30](index=30&type=chunk) [Basic Earnings Per Share](index=12&type=section&id=6%20%E6%AF%8F%E8%82%A1%E5%9F%BA%E6%9C%AC%E7%9B%88%E5%88%A9) Basic earnings per share for the six months ended June 30, 2025, was 12.05 RMB cents, based on profit attributable to equity holders of RMB 146,992 thousand Basic Earnings Per Share Calculation | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Profit Attributable to Equity Holders of the Company (RMB thousand) | 146,992 | 170,499 | | Weighted Average Number of Ordinary Shares in Issue (shares) | 1,220,348,000 | 1,220,348,000 | | **Basic Earnings Per Share (RMB cents)** | **12.05** | **13.97** | - The Group had no outstanding potential dilutive shares during the reporting period[31](index=31&type=chunk) [Right-of-use Assets and Other Property, Plant and Equipment](index=12&type=section&id=7%20%E4%BD%BF%E7%94%A8%E6%AC%8A%E8%B3%87%E7%94%A2%E5%8F%8A%E5%85%B6%E4%BB%96%E7%89%A9%E6%A5%AD%E3%80%81%E5%BB%A0%E6%88%BF%E5%8F%8A%E8%A8%AD%E5%82%99) During the period, the Group recognized an increase in right-of-use assets of RMB 2,082 thousand for office and dormitory leases, and acquired parking right-of-use assets for RMB 90,930 thousand - For the six months ended June 30, 2025, the Group recognized an increase in right-of-use assets of **RMB 2,082 thousand** due to office space and dormitory leases[32](index=32&type=chunk) - The Group acquired parking right-of-use assets from Excellence Group for **RMB 90,930 thousand**[32](index=32&type=chunk) - The Group acquired property, plant and equipment at a cost of **RMB 4,294 thousand**, and disposed of items with a net book value of **RMB 535 thousand**, resulting in a disposal loss of **RMB 21 thousand**[33](index=33&type=chunk) [Trade and Other Receivables](index=13&type=section&id=8%20%E8%B2%BF%E6%98%93%E5%8F%8A%E5%85%B6%E4%BB%96%E6%87%89%E6%94%B6%E6%AC%BE%E9%A0%85) As of June 30, 2025, total trade and other receivables amounted to RMB 2,428,282 thousand, with net trade receivables of RMB 1,716,578 thousand and net other receivables of RMB 567,444 thousand Trade and Other Receivables Details | Category | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Trade Receivables (Net) | 1,716,578 | 1,465,550 | | Other Receivables (Net) | 567,444 | 197,909 | | Deposits and Prepayments | 144,260 | 145,116 | | **Total** | **2,428,282** | **1,808,575** | - As of June 30, 2025, other receivables from related parties primarily include an outstanding loan of **RMB 300,000 thousand** (annual interest rate of 5%) to be settled in November 2025, and dividends receivable from disposed subsidiaries of **RMB 27,059 thousand**[34](index=34&type=chunk) Ageing Analysis of Trade Receivables (Net) | Ageing | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within 1 year | 1,380,463 | 1,155,913 | | 1 to 2 years | 286,914 | 278,443 | | 2 to 3 years | 49,201 | 31,194 | | **Total** | **1,716,578** | **1,465,550** | [Loans Receivable](index=14&type=section&id=9%20%E6%87%89%E6%94%B6%E8%B2%B8%E6%AC%BE) As of June 30, 2025, the Group's loans receivable were zero, a significant decrease from RMB 629,449 thousand at December 31, 2024, primarily due to the divestment of financial services business Loans Receivable Details | Category | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Gross Loans Receivable | – | 654,999 | | Less: Loss Allowance | – | (25,550) | | **Net Amount** | **–** | **629,449** | - All loans receivable were disposed of with the sale of a subsidiary[36](index=36&type=chunk) [Trade and Other Payables](index=15&type=section&id=10%20%E8%B2%BF%E6%98%93%E5%8F%8A%E5%85%B6%E4%BB%96%E6%87%89%E4%BB%98%E6%AC%BE%E9%A0%85) As of June 30, 2025, total trade and other payables increased by RMB 99,140 thousand to RMB 1,043,494 thousand, mainly due to dividends payable to equity holders and cash collected on behalf of others Trade and Other Payables Details | Category | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Trade Payables | 463,769 | 414,587 | | Other Payables | 70,699 | 64,443 | | Consideration Payable for Business Combinations | 15,437 | 15,437 | | Dividends Payable to Equity Holders of the Company | 69,952 | – | | Dividends Payable to Non-controlling Interests | 6,205 | 6,205 | | Cash Collected on Behalf of Owners' Committees | 25,738 | 24,572 | | Housing Maintenance Funds Held on Behalf of Property Owners | 24,882 | 21,023 | | Financial Liabilities Measured at Amortized Cost | 676,682 | 546,267 | | Accrued Salaries and Other Benefits | 200,922 | 233,197 | | Deposits | 133,738 | 129,877 | | Accrued Expenses | 32,152 | 35,013 | | **Total** | **1,043,494** | **944,354** | - Trade payables primarily relate to subcontracting services and facility/car park lease payments[38](index=38&type=chunk) Ageing Analysis of Trade Payables | Ageing | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within 1 month | 139,448 | 136,439 | | 1 to 3 months | 165,607 | 141,990 | | 3 to 6 months | 58,996 | 37,466 | | 6 to 12 months | 42,453 | 25,223 | | Over 12 months | 57,265 | 73,469 | | **Total** | **463,769** | **414,587** | [Capital and Dividends](index=16&type=section&id=11%20%E8%B3%87%E6%9C%AC%E5%8F%8A%E8%82%A1%E6%81%AF) As of June 30, 2025, the company's issued and fully paid share capital comprised 1,220,348,000 ordinary shares at HK$0.01 each, totaling RMB 10,478,929 thousand, with no interim dividend recommended Share Capital Information | Metric | June 30, 2025 (HKD) | December 31, 2024 (HKD) | | :--- | :--- | :--- | | Issued Ordinary Shares (shares) | 1,220,348,000 | 1,220,348,000 | | Par Value Per Share | HK$0.01 | HK$0.01 | | **Share Capital (RMB)** | **10,478,929** | **10,478,929** | - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025, prioritizing working capital investment for long-term stable operations and continuous enhancement of shareholder value[42](index=42&type=chunk)[118](index=118&type=chunk) Dividend Distribution | Dividend Type | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Interim Dividend Declared After Interim Period | – | 85,302 | | Final Dividend for Previous Financial Year Approved During Period | 70,744 | 75,569 | [Management Discussion and Analysis](index=17&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%A4%E8%A8%8E%E8%AB%96%E5%88%86%E6%9E%90) [Business Review](index=17&type=section&id=%E6%A5%AD%E5%8B%99%E5%9B%9E%E9%A1%A7) The Group, a leading commercial property service operator in China, maintained stable growth, optimized its business structure, and enhanced core competencies during the reporting period [Business Overview](index=17&type=section&id=I.%20%E6%A5%AD%E5%8B%99%E6%A6%82%E8%A7%88) The Group operates as a leading commercial property service provider in China, offering full lifecycle asset maintenance and comprehensive service solutions - The Group, as a leading commercial property service operator in China, is committed to providing full lifecycle asset maintenance and comprehensive service solutions[43](index=43&type=chunk) - Facing economic downturn pressure, the Group adheres to a long-term development strategy, operating steadily, optimizing business structure, reducing reliance on related businesses, and firmly pursuing digital transformation[44](index=44&type=chunk) - Principal businesses include basic property management services (commercial, public & industrial, residential properties) and value-added services[45](index=45&type=chunk) - Commercial property management services focus on CBD landmark office buildings and high-tech enterprises, providing PM commercial office building services and FM integrated facility management services, utilizing IoT, big data, and AI to build smart park systems[46](index=46&type=chunk)[47](index=47&type=chunk) - Public and industrial property services continue to expand into university, medical, and government public construction businesses, offering comprehensive operational service solutions[48](index=48&type=chunk) - Residential property services leverage Excellence Group's experience to create a high-end residential service benchmark, innovatively introducing international service standards[49](index=49&type=chunk) - Value-added services include asset services (pre-consulting, leasing, and second-hand asset management), Zhuopin Business general administrative services (B to B for C model, one-stop supporting services), and M&E services (green & smart M&E business)[50](index=50&type=chunk)[51](index=51&type=chunk) - The Group maintains a cautious approach to mergers and acquisitions, actively seeking government resources to jointly explore markets and improve the industry chain[52](index=52&type=chunk) [Performance Summary](index=21&type=section&id=%28II%29%20%E6%A5%AD%E7%B8%BE%E6%A6%82%E8%BF%B0) In H1 2025, the company achieved stable operating performance, with steady growth in third-party business, sustained advantages in commercial property, and optimized value-added service structure Revenue Contribution by Business Type | Business Type | Revenue Share (%) | | :--- | :--- | | Commercial Property | 61.1% | | Public and Industrial Property | 10.0% | | Residential Property | 18.3% | | Value-added Services | 9.7% | | Other Services | 0.9% | - During the reporting period, the Group's contracted area was approximately **82.50 million sq.m.**, a **3.0% increase** year-on-year; GFA under management was approximately **74.28 million sq.m.**, a **9.0% increase** year-on-year, with third-party GFA under management accounting for **62.7%**[56](index=56&type=chunk) Changes in GFA Under Management (thousand sq.m.) | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Beginning of Period | 72,200 | 64,066 | | Newly Signed | 4,524 | 6,784 | | Terminated | (2,440) | (2,730) | | **End of Period** | **74,284** | **68,120** | - The Group maintains its core competitive advantage in commercial property, with continuous efforts in third-party business expansion, serving over **70% of domestic leading high-tech internet enterprise clients**[57](index=57&type=chunk) - During the reporting period, commercial property revenue accounted for **68.3% of basic property services revenue**, and third-party basic property services accounted for **60.6% of basic property services revenue**; residential property business revenue increased by **12.6%** year-on-year[58](index=58&type=chunk)[59](index=59&type=chunk) GFA Under Management and Revenue Comparison by Business Type | Business Type | H1 2025 GFA Under Management (thousand sq.m.) | H1 2025 Revenue (RMB thousand) | H1 2024 GFA Under Management (thousand sq.m.) | H1 2024 Revenue (RMB thousand) | | :--- | :--- | :--- | :--- | :--- | | Commercial Property | 32,195 | 1,229,380 | 27,335 | 1,110,517 | | Public and Industrial Property | 14,290 | 201,016 | 14,737 | 275,294 | | Residential Property | 27,799 | 369,386 | 26,048 | 328,165 | | **Total** | **74,284** | **1,799,782** | **68,120** | **1,713,796** | - Strategic client contract retention rate is close to **100.0%**, with strategic client revenue reaching **RMB 507.7 million**, a **30.2% increase** year-on-year[61](index=61&type=chunk)[62](index=62&type=chunk) - The Group continues to expand its advantages in new sectors through strategic M&A and diversified joint ventures, with new business scale in Chengdu, a core western city, doubling year-on-year[62](index=62&type=chunk)[63](index=63&type=chunk) - Value-added services achieved diversified rapid growth, with the high-end commercial brand "Zhuopin Business" providing B+C full-scenario solutions and customized services through a unified platform[64](index=64&type=chunk) [Core Competitiveness Analysis](index=26&type=section&id=%E6%A0%B8%E5%BF%83%E7%AB%B6%E7%88%AD%E5%8A%9B%E5%88%86%E6%9E%90) The Group has received numerous industry accolades and ratings, demonstrating its strong market position and commitment to quality management and talent development - The Group has been awarded "2025 China Property Service Top 100 Enterprises (TOP11)", "2025 China IFM Service Excellent Enterprises (TOP2)", "2025 China Office Property Management Excellent Enterprises (TOP2)", and other industry honors and ratings[65](index=65&type=chunk) - The Group has obtained multiple management system certifications, including ISO9001, ISO14001, ISO45001, ISO50001, ISO41001, and is a BOMA Platinum Member, IFMA Gold Member, and RICS Member[66](index=66&type=chunk) - The Group has established a comprehensive talent management system, covering training for over **2,800 key position talents** through programs like "New Wing Management Trainee", "Zhuojiang", and "Zhuoyue Plan"[67](index=67&type=chunk)[68](index=68&type=chunk) - The Group is firmly advancing digital transformation, having largely completed Phase 1.0, with internal core business systems mostly deployed, facilitating integration of finance and operations, refined management, and improved human efficiency[70](index=70&type=chunk)[71](index=71&type=chunk) [Financial Review](index=31&type=section&id=II.%20%E8%B2%A1%E5%8B%99%E5%9B%9E%E9%A1%A7) During the reporting period, the Group's total revenue decreased by 3.2% to RMB 2,015.15 million, gross profit decreased by 10.2% to RMB 379.06 million, and net profit decreased by 11.7% to RMB 162.31 million, primarily due to reduced value-added services [Revenue](index=31&type=section&id=%E6%94%B6%20%E5%85%A5) Revenue Composition and Changes | Revenue Source | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | Change (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Property Management Services | 1,799,782 | 1,713,976 | 85,806 | 5.0% | | Value-added Services | 196,401 | 349,147 | (152,746) | (43.7%) | | Other Businesses | 18,962 | 19,355 | (393) | (2.0%) | | **Total Revenue** | **2,015,145** | **2,082,478** | **(67,333)** | **(3.2%)** | [Value-added Services](index=31&type=section&id=%E5%A2%9E%E5%80%BC%E6%9C%8D%E5%8B%99) Value-added Services Revenue and Proportion | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | Decrease (%) | | :--- | :--- | :--- | :--- | | Value-added Services Revenue | 196.40 | 349.15 | (43.7%) | | Proportion of Total Revenue | 9.7% | 16.8% | -7.1 percentage points | - The decrease in value-added services revenue was primarily due to the reduction in M&E installation business and fewer leasing operation services provided[81](index=81&type=chunk) [Other Businesses](index=31&type=section&id=%E5%85%B6%E4%BB%96%E6%A5%AD%E5%8B%99) - Other business revenue primarily derived from the disposed financial services business[82](index=82&type=chunk) Other Businesses Revenue | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | | :--- | :--- | :--- | | Other Businesses Revenue | 18.96 | 19.36 | [Cost of Sales](index=32&type=section&id=%E9%8A%B7%E5%94%AE%E6%88%90%E6%9C%AC) Cost of Sales and Changes | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Cost of Sales | 1,636.08 | 1,660.31 | (1.5%) | - The decrease in cost of sales was primarily due to the reduction in M&E installation business and fewer leasing operation services provided[83](index=83&type=chunk) [Gross Profit and Gross Profit Margin](index=32&type=section&id=%E6%AF%9B%E5%88%A9%E5%8F%8A%E6%AF%9B%E5%88%A9%E7%8E%87) Gross Profit and Gross Profit Margin Changes | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Gross Profit | 379.06 | 422.17 | (10.2%) | | Gross Profit Margin | 18.8% | 20.3% | -1.5 percentage points | Gross Profit Margin Comparison by Business Segment | Business Segment | H1 2025 Gross Profit Margin (%) | H1 2024 Gross Profit Margin (%) | Change (percentage points) | | :--- | :--- | :--- | :--- | | Basic Property Management Services | 17.5% | 18.5% | (1.0) | | Value-added Services | 23.2% | 24.9% | (1.7) | | Other Businesses | 98.4% | 91.6% | 6.8 | [Other Income](index=33&type=section&id=%E5%85%B6%E4%BB%96%E6%94%B6%E7%9B%8A) Other Income and Changes | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Other Income | 5.31 | 7.83 | (32.2%) | - The decrease in other income was primarily due to lower bank interest income and government grants[86](index=86&type=chunk) [Net Other Income](index=33&type=section&id=%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5%E6%B7%A8%E9%A1%8D) Net Other Income and Loss on Disposal | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | | :--- | :--- | :--- | | Net Other Income | 2.37 | 1.30 | | Loss on Disposal of Discontinued Operations | (2.15) | – | [Impairment Losses on Receivables, Contract Assets and Financial Guarantees Issued](index=33&type=section&id=%E6%87%89%E6%94%B6%E6%AC%BE%E9%A0%85%E3%80%81%E5%90%88%E5%90%8C%E8%B3%87%E7%94%A2%E5%92%8C%E5%B7%B2%E7%99%BC%E5%87%BA%E7%9A%84%E8%B2%A1%E5%8B%99%E6%93%94%E4%BF%9D%E7%9A%84%E6%B8%9B%E5%80%BC%E6%90%8D%E5%A4%B1) Impairment Losses and Changes | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | Change (RMB million) | | :--- | :--- | :--- | :--- | | Impairment Losses | 39.31 | 61.98 | (22.67) | - The decrease in impairment losses was primarily due to reduced credit impairment losses on loans receivable and financial guarantees issued[88](index=88&type=chunk) [Selling and Marketing Expenses](index=33&type=section&id=%E9%8A%B7%E5%94%AE%E5%8F%8A%E8%A1%8C%E9%8A%B7%E9%96%8B%E6%94%AF) Selling and Marketing Expenses and Changes | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Selling and Marketing Expenses | 24.22 | 22.71 | 6.7% | [Administrative Expenses](index=33&type=section&id=%E8%A1%8C%E6%94%BF%E9%96%8B%E6%94%AF) Administrative Expenses and Changes | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Administrative Expenses | 104.88 | 126.48 | (17.1%) | - The decrease in administrative expenses was primarily due to lower staff costs and rental expenses[90](index=90&type=chunk) [Finance Costs](index=33&type=section&id=%E8%B2%A1%E5%8B%99%E6%88%90%E6%9C%AC) Finance Costs and Changes | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Finance Costs | 0.23 | 0.98 | (76.5%) | - The decrease in finance costs was primarily due to a reduction in bank loans and lease projects[91](index=91&type=chunk) [Share of Profits Less Losses of Joint Ventures](index=34&type=section&id=%E6%87%89%E4%BD%94%E5%90%88%E7%87%9F%E4%BC%81%E6%A5%AD%E5%88%A9%E6%BD%A4%E6%B8%9B%E8%99%A7%E6%90%8D) Share of Profits of Joint Ventures | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | | :--- | :--- | :--- | | Share of Profits of Joint Ventures | 1.59 | 1.18 | [Share of Profits Less Losses of Associates](index=34&type=section&id=%E6%87%89%E4%BD%94%E8%81%AF%E7%87%9F%E5%85%AC%E5%8F%B8%E5%88%A9%E6%BD%A4%E6%B8%9B%E8%99%A7%E6%90%8D) Share of Profits of Associates and Changes | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Share of Profits of Associates | 2.10 | 4.87 | (56.9%) | - The decrease in share of profits of associates was primarily due to the disposal of Chongqing Pinpin Chuqi Business Information Consulting Co., Ltd. in 2024[93](index=93&type=chunk) [Income Tax Expense](index=34&type=section&id=%E6%89%80%E5%BE%97%E7%A8%85%E8%B2%BB%E7%94%A8) Income Tax Expense and Changes | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Income Tax Expense | 54.83 | 41.40 | 32.4% | - The increase in income tax expense was primarily due to the recognition of deferred income tax assets from estimated unused tax losses that could be utilized based on future business plans in 2024[94](index=94&type=chunk) [Profit for the Period](index=34&type=section&id=%E6%9C%9F%E9%96%93%E5%88%A9%E6%BD%A4) Net Profit and Profit Attributable to Shareholders | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Net Profit | 162.31 | 183.80 | (11.7%) | | Profit Attributable to Equity Holders of the Company | 146.99 | 170.50 | (13.8%) | | Net Profit Margin | 8.1% | 8.8% | -0.7 percentage points | [Property, Plant and Equipment](index=34&type=section&id=%E7%89%A9%20%E6%A5%AD%E3%80%81%E5%BB%A0%20%E6%88%BF%20%E5%8F%8A%20%E8%A8%AD%20%E5%82%99) Net Property, Plant and Equipment | Metric | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | Change (RMB million) | | :--- | :--- | :--- | :--- | | Net Property, Plant and Equipment | 41.33 | 52.94 | (11.61) | - The decrease was primarily due to depreciation and disposal of assets maturing during the reporting period[97](index=97&type=chunk) [Intangible Assets](index=35&type=section&id=%E7%84%A1%E5%BD%A2%E8%B3%87%E7%94%A2) Intangible Assets and Changes | Metric | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | Change (RMB million) | | :--- | :--- | :--- | :--- | | Intangible Assets | 268.77 | 287.86 | (19.09) | - The decrease was primarily due to amortization recognized during the period for property management contracts acquired through company acquisitions[98](index=98&type=chunk) [Goodwill](index=35&type=section&id=%E5%95%86%20%E8%AD%BD) Goodwill Amount | Metric | June 30, 2025 (RMB million) | | :--- | :--- | | Goodwill | 225.29 | - Goodwill primarily relates to the acquisition of certain equity interests in Wuhan Huamao, Henan Huangjin, Beijing Huanqiu, and Xingyi Investment, with management finding no significant impairment risk[99](index=99&type=chunk) [Inventories](index=35&type=section&id=%E5%AD%98%20%E8%B2%A8) Inventories and Changes | Metric | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | Change (RMB million) | | :--- | :--- | :--- | :--- | | Inventories | 416.99 | 295.34 | 121.65 | - The increase in inventories was primarily due to the addition of commercial apartments of **RMB 103.33 million** (including related tax expenses) from the disposal of the financial services business[100](index=100&type=chunk) [Right-of-use Assets](index=35&type=section&id=%E4%BD%BF%E7%94%A8%E6%AC%8A%E8%B3%87%E7%94%A2) Right-of-use Assets and Changes | Metric | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | Change (RMB million) | | :--- | :--- | :--- | :--- | | Right-of-use Assets | 670.82 | 589.31 | 81.51 | - The increase was primarily due to the addition of **RMB 90.93 million** in parking spaces during the reporting period[101](index=101&type=chunk) [Trade and Other Receivables](index=35&type=section&id=%E8%B2%BF%E6%98%93%E5%8F%8A%E5%85%B6%E4%BB%96%E6%87%89%E6%94%B6%E6%AC%BE%E9%A0%85) Net Trade and Other Receivables and Changes | Metric | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | Change (RMB million) | | :--- | :--- | :--- | :--- | | Net Trade and Other Receivables | 2,428.28 | 1,808.58 | 619.70 | - The increase was primarily due to an increase in net trade receivables of approximately **RMB 251.03 million** from revenue growth, and an increase in net other receivables of approximately **RMB 369.54 million** due to the disposal of the financial services business[102](index=102&type=chunk) [Loans Receivable](index=36&type=section&id=%E6%87%89%E6%94%B6%E8%B2%B8%E6%AC%BE) Loans Receivable and Changes | Metric | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | Change (RMB million) | | :--- | :--- | :--- | :--- | | Loans Receivable | 0 | 629.45 | (629.45) | - The decrease was primarily due to the Group's divestment of the financial services segment during the reporting period[103](index=103&type=chunk) [Trade and Other Payables](index=36&type=section&id=%E8%B2%BF%E6%98%93%E5%8F%8A%E5%85%B6%E4%BB%96%E6%87%89%E4%BB%98%E6%AC%BE%E9%A0%85) Trade and Other Payables and Changes | Metric | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | Change (RMB million) | | :--- | :--- | :--- | :--- | | Trade and Other Payables | 1,043.49 | 944.35 | 99.14 | - The increase was primarily due to dividends payable to equity holders of the company of **RMB 69.95 million** (paid in July 2025), and cash collected by the Group on behalf of owners' committees, housing maintenance funds, and other miscellaneous expenses[104](index=104&type=chunk) [Financial Guarantees Issued](index=36&type=section&id=%E5%B7%B2%E7%99%BC%E5%87%BA%E7%9A%84%E8%B2%A1%E5%8B%99%E6%93%94%E4%BF%9D) Financial Guarantees Issued | Metric | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | | :--- | :--- | :--- | | Financial Guarantees Issued | 72.43 | 72.43 | - The primary reason is that Beijing Huanqiu, a non-wholly owned subsidiary of the company, has provided a financial guarantee for a seller's loan principal of **RMB 183.43 million**[105](index=105&type=chunk) - An expected credit loss provision of approximately **RMB 72.43 million** has been made for the guarantee provided by Beijing Huanqiu, considering the liquidation value of the mortgaged property[106](index=106&type=chunk) [Lease Liabilities](index=36&type=section&id=%E7%A7%9F%E8%B3%83%E8%B2%A0%E5%82%B5) Lease Liabilities Composition | Category | Amount (RMB million) | | :--- | :--- | | Current Lease Liabilities | 6.89 | | Non-current Lease Liabilities | 3.67 | [Contract Liabilities](index=37&type=section&id=%E5%90%88%E5%90%8C%E8%B2%A0%E5%82%B5) Contract Liabilities and Changes | Metric | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Contract Liabilities | 168.83 | 145.76 | 15.8% | - Contract liabilities primarily represent prepayments made by the Group's commercial operation services and residential property management services customers[108](index=108&type=chunk) [Gearing Ratio](index=37&type=section&id=%E8%B3%87%E7%94%A2%E8%B2%A0%E5%82%B5%E7%8E%87) Gearing Ratio | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Gearing Ratio | 27.3% | 26.1% | [Contingent Liabilities](index=37&type=section&id=%E6%88%96%E7%84%B6%E8%B2%A0%E5%82%B5) - Shenzhen Excellence Property Management Co., Ltd. is involved in an arbitration dispute regarding the acquisition of a 40% equity interest in a project company, with the applicant claiming **RMB 20.8 million** in liquidated damages and equity acquisition consideration[110](index=110&type=chunk)[112](index=112&type=chunk) - As the arbitration outcome cannot be reliably estimated, no provision has been recognized for the arbitration as of the date of this announcement[111](index=111&type=chunk) [Liquidity, Reserves and Capital Structure](index=38&type=section&id=%E6%B5%81%20%E5%8B%95%20%E8%B3%87%20%E9%87%91%E3%80%81%E5%84%B2%20%E5%82%99%20%E5%8F%8A%20%E8%B3%87%20%E6%9C%AC%20%E6%9E%B6%20%E6%A7%8B) Changes in Cash and Total Equity | Metric | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Cash and Cash Equivalents | 689.34 | 935.43 | (26.3%) | | Total Equity | 3,887.81 | 3,797.51 | 2.4% | - The decrease in cash and cash equivalents was primarily due to the purchase of investment wealth management products and right-of-use assets[113](index=113&type=chunk) - The increase in total equity was primarily due to profit contributions realized during the year[113](index=113&type=chunk) [Exchange Rate Risk](index=38&type=section&id=%E5%BD%99%E7%8E%87%E9%A2%A8%E9%9A%AA) - The Group's principal operations are conducted in China and denominated in RMB, thus management believes there is no significant foreign exchange risk[114](index=114&type=chunk) - No forward foreign exchange contracts have been entered into to hedge foreign exchange risk, and the Group will continue to monitor it prudently[114](index=114&type=chunk) [Future Outlook](index=28&type=section&id=%E6%9C%AA%E4%BE%86%E5%B1%95%E6%9C%9B) The Group will continue to pursue its vision as a leading commercial property service operator in China, focusing on growth, strategic client development, diversified value-added services, and digital transformation for long-term stable development - The Group will continue to focus on its vision of being "China's leading commercial property service operator" and adhere to the strategic direction of "combining strategic three pillars with digital transformation"[72](index=72&type=chunk) - The strategic plan is based on "organizational building, business building, and capability building", driven by "value distribution and management culture"[72](index=72&type=chunk) - Business development strategies include focusing on growth (deepening strategic client relationships, diversifying value-added services, breaking through new sector performance) and building core capabilities (digital empowerment management capabilities)[73](index=73&type=chunk)[74](index=74&type=chunk)[75](index=75&type=chunk)[76](index=76&type=chunk) - Digital capability building is a key focus for the company's core capability development, aiming to enhance management and operational efficiency by integrating internal systems, optimizing business processes, and building a full-process digital platform for projects[76](index=76&type=chunk)[77](index=77&type=chunk) [Other Information](index=39&type=section&id=%E5%85%B6%E4%BB%96%E8%B3%87%E6%96%99) [Material Investments Held, Material Acquisitions and Disposals of Subsidiaries, Associates and Joint Ventures](index=39&type=section&id=%E6%89%80%E6%8C%81%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B3%87%E3%80%81%E9%87%8D%E5%A4%A7%E6%94%B6%E8%B3%BC%E5%8F%8A%E5%87%BA%E5%94%AE%E9%99%84%E5%B1%AC%E5%85%AC%E5%8F%B8%E3%80%81%E8%81%AF%E7%87%9F%E5%85%AC%E5%8F%B8%E5%8F%8A%E5%90%88%E7%87%9F%E4%BC%81%E6%A5%AD) During the reporting period, the Group divested its financial services business, and other than this, held no material investments nor undertook any significant acquisitions or disposals - During the reporting period, the Group divested its financial services business[115](index=115&type=chunk) - Other than the disclosed matters, the company held no material investments and undertook no material acquisitions or disposals of subsidiaries, associates, or joint ventures[115](index=115&type=chunk) [Employees and Remuneration Policies](index=39&type=section&id=%E5%83%B1%E5%93%A1%E5%8F%8A%E8%96%AA%E9%85%AC%E6%94%BF%E7%AD%96) As of June 30, 2025, the Group employed 18,991 full-time employees in China and 88 in India, offering competitive remuneration packages and social insurance contributions Full-time Employee Count | Region | June 30, 2025 (Full-time Employees) | December 31, 2024 (Full-time Employees) | | :--- | :--- | :--- | | China | 18,991 | 17,787 | | India | 88 | 86 | - The Group provides competitive remuneration packages, including directors' fees, salaries, allowances, bonuses, and contributions to retirement benefit schemes, and pays various social insurance contributions for employees[116](index=116&type=chunk) [Purchase, Redemption or Sale of the Company's Listed Securities](index=39&type=section&id=%E8%B3%BC%20%E8%B2%B7%E3%80%81%E8%B4%96%20%E5%9B%9E%20%E6%88%96%20%E5%87%BA%20%E5%94%AE%20%E6%9C%AC%20%E5%85%AC%20%E5%8F%B8%20%E4%B8%8A%E5%B8%82%20%E8%AD%89%20%E5%88%B8) During the reporting period, neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed securities, including treasury shares - During the reporting period, neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed securities[117](index=117&type=chunk) [Interim Dividend](index=39&type=section&id=%E4%B8%AD%E6%9C%9F%E8%82%A1%E6%81%AF) The Board does not recommend an interim dividend for the six months ended June 30, 2025, prioritizing working capital for long-term stability and shareholder value enhancement - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025[118](index=118&type=chunk) - The decision prioritizes working capital investment to maintain long-term stable operations and continuous enhancement of shareholder value[118](index=118&type=chunk) [Sufficiency of Public Float](index=39&type=section&id=%E5%85%85%E8%B6%B3%E7%9A%84%E5%85%AC%E7%9C%BE%E6%8C%81%E8%82%A1%E9%87%8F) The company has maintained a sufficient public float as approved by the Stock Exchange and permitted by the Listing Rules since its listing date - The company has maintained a sufficient public float as approved by the Stock Exchange and permitted by the Listing Rules since its listing date up to the date of this announcement[119](index=119&type=chunk) [Corporate Governance Practices](index=40&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%B8%B8%E8%A6%8F) The Group is committed to high standards of corporate governance, having adopted and complied with the Corporate Governance Code throughout the reporting period - The Group has adopted the Corporate Governance Code set out in Appendix C1 to the Listing Rules and has complied with all applicable code provisions throughout the reporting period[120](index=120&type=chunk) [Standard Code for Securities Transactions by Directors of Listed Issuers](index=40&type=section&id=%E4%B8%8A%E5%B8%82%E7%99%BC%E8%A1%8C%E4%BA%BA%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%88%99) The company has adopted the Standard Code for securities transactions by directors, and all directors have confirmed compliance throughout the reporting period - The company has adopted the Standard Code set out in Appendix C3 to the Listing Rules as the code of conduct for directors' securities transactions[121](index=121&type=chunk) - All directors have confirmed, after due enquiry, that they have complied with the required standards set out in the Standard Code throughout the reporting period[121](index=121&type=chunk) [Audit Committee](index=40&type=section&id=%E5%AF%A9%E8%A8%88%E5%A7%94%E5%93%A1%E6%9C%83) The Board has established an Audit Committee, comprising one non-executive director and three independent non-executive directors, chaired by Mr. Gan Zhicheng, to review financial reporting and internal controls - The Audit Committee comprises four members, including one non-executive director and three independent non-executive directors, with Mr. Gan Zhicheng serving as the committee chairman[122](index=122&type=chunk) - The committee's primary responsibilities are to review and supervise the company's financial reporting system, risk management, and internal controls[122](index=122&type=chunk) - The Audit Committee has reviewed and approved the accounting principles and practices adopted by the Group, and has reviewed the unaudited consolidated interim results for the reporting period[122](index=122&type=chunk) [Review of Interim Results](index=40&type=section&id=%E4%B8%AD%E6%9C%9F%E6%A5%AD%E7%B8%BE%E4%B9%8B%E5%AF%A9%E9%96%B1) The interim financial information is unaudited but has been reviewed by KPMG in accordance with Hong Kong Standard on Review Engagements 2410 - The interim financial information is unaudited but has been reviewed by KPMG in accordance with Hong Kong Standard on Review Engagements 2410 issued by the Hong Kong Institute of Certified Public Accountants[123](index=123&type=chunk) [Events After Reporting Period](index=41&type=section&id=%E5%A0%B1%E5%91%8A%E6%9C%9F%E5%BE%8C%E4%BA%8B%E9%A0%85) Subsequent to the reporting period, Shenzhen Excellence Property Management Co., Ltd. entered into a settlement agreement with Excellence Real Estate Group Co., Ltd., and a final judgment was rendered in a loan dispute involving Beijing Huanqiu Wealth Property Management Co., Ltd. - On August 24, 2025, Shenzhen Excellence Property Management Co., Ltd. entered into a settlement agreement with Excellence Real Estate Group Co., Ltd.[124](index=124&type=chunk) - In August 2025, the Beijing High People's Court rendered a final judgment in the loan dispute between China Great Wall Asset Management Co., Ltd. Beijing Branch and defendants including Beijing Huanqiu Wealth Property Management Co., Ltd.[124](index=124&type=chunk) [Publication of Interim Results Announcement and Interim Report](index=41&type=section&id=%E5%88%8A%E7%99%BC%E4%B8%AD%E6%9C%9F%E6%A5%AD%E7%B8%BE%E5%85%AC%E5%91%8A%E5%8F%8A%E4%B8%AD%E6%9C%9F%E5%A0%B1%E5%91%8A) This interim results announcement has been published on the HKEXnews website and the company's website, and the interim report will be dispatched to shareholders and published online in due course - This interim results announcement has been published on the HKEXnews website (www.hkexnews.hk) and the company's website (www.excepm.com)[126](index=126&type=chunk) - The interim report will be dispatched to shareholders who request a printed copy and will be published on the respective websites of the Stock Exchange and the company in due course[126](index=126&type=chunk)

Financial Performance - Revenue for the six months ended June 30, 2025, decreased by approximately 9.84% to RMB 1.228 billion compared to RMB 1.362 billion in 2024[3] - Profit for the period was approximately RMB 775 million, an increase of about RMB 109 million from RMB 666 million in 2024, primarily due to reduced selling and administrative expenses[3] - Basic earnings per share for the period were RMB 0.72, compared to RMB 0.49 in 2024[4] - Total comprehensive income for the period was RMB 762.6 million, up from RMB 579.72 million in 2024[6] - The company reported a total pre-tax profit of RMB 88,184,000 for the six months ended June 30, 2025, compared to RMB 76,193,000 for the same period in 2024, reflecting an increase of 15.7%[21][22] - The gross profit margin for the company was approximately 12.17%, a decrease of about 0.14% from 12.31% in 2024, primarily due to lower margins in the gas distribution business[39] Assets and Equity - Non-current assets as of June 30, 2025, amounted to RMB 2.301 billion, compared to RMB 2.271 billion as of December 31, 2024[8] - Current assets decreased slightly to RMB 1.086 billion from RMB 1.097 billion as of December 31, 2024[8] - Total equity attributable to owners of the company increased to RMB 2.581 billion from RMB 2.518 billion in 2024[9] - The company reported a net current asset value of RMB 559.86 million, up from RMB 503.61 million in 2024[8] Revenue Breakdown - For the six months ended June 30, 2025, the total revenue from external customers was RMB 1,228,089,000, a decrease of 9.8% compared to RMB 1,361,691,000 for the same period in 2024[21][22] - Revenue from the pipeline gas distribution business was approximately RMB 582.95 million, a decrease of about RMB 54.66 million or 8.57% year-on-year[40] - The pipeline gas distribution business accounted for approximately 47.47% of total revenue, compared to 46.82% in 2024[40] - Pipeline gas connection revenue for the period was approximately RMB 28,473,000, a decrease of about RMB 12,074,000 or 29.78% compared to the same period last year, accounting for approximately 4.88% of total pipeline gas distribution revenue[41] - Pipeline gas sales revenue for the period was approximately RMB 554,477,000, a decrease of about RMB 42,584,000 or 7.13% year-on-year, with total sales volume of approximately 21,356 million cubic meters, down about 8.58%[42] - Sales of bottled gas amounted to approximately 48,054 tons, a decrease of about 7.76% year-on-year, with sales revenue of approximately RMB 270,033,000, down about RMB 61,447,000 or 18.54%[43] - Gas distribution business revenue was approximately RMB 373,777,000, an increase of about RMB 26,182,000 or 7.53% year-on-year, with sales volume of approximately 99,334 tons, up about 9.43%[44] Expenses and Costs - Employee costs for the six months ended June 30, 2025, totaled RMB 87.8 million, an increase from RMB 74.29 million in 2024[29] - Administrative expenses for the period were approximately RMB 52,755,000, a decrease of about RMB 8,981,000 compared to the previous year, mainly due to reduced depreciation and lease expenses[51] - Financial costs for the period were approximately RMB 1,620,000, a decrease of about RMB 277,000 year-on-year, primarily due to reduced interest on lease liabilities[49] - Other income for the period was approximately RMB 15,157,000, a decrease of about RMB 4,706,000 compared to the previous year, mainly due to reduced bank interest income and net sales of gas appliances[48] Dividends and Governance - The board of directors did not recommend the payment of an interim dividend for the period[5] - The company did not declare or recommend any dividends for the six months ended June 30, 2025, consistent with 2024[33] - The company has fully complied with the corporate governance code as of June 30, 2025[70] - All directors confirmed adherence to the standard code of conduct during the reporting period[71] - The audit committee reviewed the consolidated financial statements for the period, ensuring compliance with accounting principles adopted by the company[72] Strategic Initiatives and Market Outlook - The company operates primarily in the pipeline gas distribution and bottled gas supply sectors in China[10] - The company remains confident in the future market for pipeline gas, supported by the ongoing upgrade and modernization of urban gas pipelines, expected to be largely completed by the end of 2025[65] - The liquefied petroleum gas and natural gas will continue to be the main products in the company's gas business, contributing to carbon peak and carbon neutrality goals[64] - The company aims to expand its gas distribution scale and steadily increase gas sales and revenue, leveraging advancements in liquefied natural gas technology[67] - The food supply and marketplace business has improved delivery efficiency through comprehensive platform and intelligent management, with third-party management expected to lower operational costs and enhance profitability[68] Employee and Operational Information - As of June 30, 2025, the company had approximately 4,900 employees, primarily located in China[62] - There were no significant events occurring after the reporting date[61] - The total borrowing amount as of June 30, 2025, was approximately RMB 77,850,000, down from RMB 88,250,000 as of December 31, 2024[56] - The capital commitments as of June 30, 2025, were approximately RMB 30,864,000, an increase from RMB 23,019,000 as of December 31, 2024, mainly for regional pipeline network construction[59] - The company has not purchased, sold, or redeemed any of its listed securities during the reporting period[69]

[Company Overview and Financial Summary](index=1&type=section&id=Company%20Overview%20and%20Financial%20Summary) Provides key company information and a high-level financial summary for the six months ended June 30, 2025 [Company Basic Information](index=1&type=section&id=Company%20Basic%20Information) Henan Jinyuan Hydrogenated Chemicals Co., Ltd. (Stock Code: 2502) announced its unaudited consolidated results for the six months ended June 30, 2025 - Company Name: Henan Jinyuan Hydrogenated Chemicals Co., Ltd[2](index=2&type=chunk) - Stock Code: **2502**[2](index=2&type=chunk) - Reporting Period: Interim results announcement for the six months ended June 30, 2025[2](index=2&type=chunk) [Financial Summary](index=1&type=section&id=Financial%20Summary) For the six months ended June 30, 2025, the company reported RMB 1,442.2 million in revenue and a loss attributable to owners of RMB 20.2 million, with a basic loss per share of RMB 0.02 2025 H1 Financial Summary | Indicator | Amount (RMB millions) | | :--- | :--- | | Revenue | 1,442.2 | | Loss for the period attributable to owners of the Company | 20.2 | | Basic loss per share | 0.02 | [Condensed Consolidated Financial Statements](index=2&type=section&id=Condensed%20Consolidated%20Financial%20Statements) Presents the condensed consolidated statements of profit or loss, financial position, changes in equity, and cash flows for the reporting period [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended June 30, 2025, revenue decreased by 10.0% to RMB 1,442,220 thousand, with a shift from profit to a loss of RMB 20,231 thousand attributable to owners Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (RMB thousands) | Indicator | June 30, 2025 (Unaudited) | June 30, 2024 (Unaudited) | Change (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | 1,442,220 | 1,602,071 | (159,851) | -10.0% | | Cost of sales | (1,419,722) | (1,530,294) | 110,572 | -7.2% | | Gross profit | 22,498 | 71,777 | (49,279) | -68.7% | | (Loss) Profit before tax | (10,741) | 54,932 | (65,673) | -119.6% | | (Loss) Profit for the period | (9,302) | 44,882 | (54,184) | -120.7% | | (Loss) Profit for the period attributable to owners of the Company | (20,231) | 30,233 | (50,464) | -167.0% | | Basic (loss) earnings per share (RMB) | (0.02) | 0.03 | (0.05) | -166.7% | [Condensed Consolidated Statement of Financial Position](index=3&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, total assets decreased to RMB 1,605,238 thousand, and total equity also declined to RMB 1,059,368 thousand Condensed Consolidated Statement of Financial Position (RMB thousands) | Indicator | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | Change (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Non-current assets | 1,053,645 | 1,085,713 | (32,068) | -3.0% | | Current assets | 551,593 | 590,685 | (39,092) | -6.6% | | **Total assets** | **1,605,238** | **1,676,398** | **(71,160)** | **-4.2%** | | Current liabilities | 432,544 | 456,779 | (24,235) | -5.3% | | Non-current liabilities | 113,326 | 128,069 | (14,743) | -11.5% | | **Total liabilities** | **545,870** | **584,848** | **(38,978)** | **-6.7%** | | Equity attributable to owners of the Company | 965,112 | 985,373 | (20,261) | -2.1% | | Non-controlling interests | 94,256 | 106,177 | (11,921) | -11.2% | | **Total equity** | **1,059,368** | **1,091,550** | **(32,182)** | **-2.9%** | [Condensed Consolidated Statement of Changes in Equity](index=5&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) Equity attributable to owners decreased from RMB 985,373 thousand at the beginning of the period to RMB 965,112 thousand at the end, primarily due to the period's loss and dividend distribution Changes in Equity Attributable to Owners of the Company (RMB thousands) | Indicator | January 1, 2025 (Audited) | (Loss) Profit for the period | Other comprehensive expense for the period | Total comprehensive (expense) income for the period | Dividends recognised as distribution | June 30, 2025 (Unaudited) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Equity attributable to owners of the Company | 985,373 | (20,231) | (30) | (20,261) | - | 965,112 | - Total comprehensive (expense) income for the period was **RMB (9,332) thousand**, compared to a gain of RMB 45,108 thousand in the prior period, mainly reflecting the loss attributable to owners of the Company[8](index=8&type=chunk) - According to Chinese law, Chinese entities must transfer **10% of after-tax profit** to a reserve fund, which can be used to cover losses or for business expansion[9](index=9&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) Net cash from operating activities significantly decreased to RMB 42,950 thousand, resulting in a net increase in cash and cash equivalents of RMB 22,279 thousand for the period Condensed Consolidated Statement of Cash Flows (RMB thousands) | Indicator | June 30, 2025 (Unaudited) | June 30, 2024 (Unaudited) | Change (RMB thousands) | | :--- | :--- | :--- | | Net cash generated from operating activities | 42,950 | 104,201 | (61,251) | | Net cash (used in) from investing activities | (21,132) | (67,741) | 46,609 | | Net cash generated from financing activities | 461 | 46,321 | (45,860) | | Net increase in cash and cash equivalents | 22,279 | 82,781 | (60,502) | | Cash and cash equivalents at end of period | 158,905 | 388,221 | (229,316) | - The decrease in net cash generated from operating activities was primarily due to a reduction in operating cash flow before working capital changes, a decrease in trade and other payables, and an increase in bills receivable[11](index=11&type=chunk) - Cash outflow from investing activities was mainly for the purchase of property, plant and equipment, partially offset by interest income from bank deposits and dividend income from joint ventures[13](index=13&type=chunk) [Notes to the Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) Provides detailed explanations and disclosures regarding the basis of preparation, significant accounting policies, and specific financial statement line items [Basis of Preparation and Significant Accounting Policies](index=9&type=section&id=Basis%20of%20Preparation%20and%20Significant%20Accounting%20Policies) The condensed consolidated financial statements are prepared in accordance with IAS 34 and HKEX Listing Rules, using a historical cost basis, with no material impact from new IFRS amendments - Basis of preparation: International Accounting Standard 34 "Interim Financial Reporting" and the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[14](index=14&type=chunk) - Accounting policies: Prepared on a historical cost basis, except for certain financial assets measured at fair value[15](index=15&type=chunk) - Application of new standards: First-time application of International Accounting Standard 1 (Amendment) "Lack of Exchangeability" had no material impact on the financial position and performance for the current and prior periods[16](index=16&type=chunk) [Revenue and Segment Information](index=10&type=section&id=Revenue%20and%20Segment%20Information) The Group's revenue primarily derives from derivative chemicals, energy products, trading, and other services, with total revenue decreasing by 10.0% to RMB 1,442,220 thousand due to lower derivative chemical sales Revenue from Contracts with Customers (RMB thousands) | Segment | June 30, 2025 (Unaudited) | June 30, 2024 (Unaudited) | Change (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Derivative chemicals | 1,110,256 | 1,229,506 | (119,250) | -9.7% | | Energy products | 282,881 | 303,937 | (21,056) | -6.9% | | Trading | 46,773 | 63,421 | (16,648) | -26.2% | | Other services | 2,310 | 5,207 | (2,897) | -55.6% | | **Total revenue from contracts with customers** | **1,442,220** | **1,602,071** | **(159,851)** | **-10.0%** | - Revenue recognition policy: Revenue from sales of hydrogenated phenyl chemicals and energy products is recognized when control of the products is transferred; revenue from retail products is recognized upon immediate payment by customers at the point of purchase; revenue from hot gas is recognized when the hot gas is transmitted[25](index=25&type=chunk) - Geographical information: For the six months ended June 30, 2025 and 2024, all revenue from external customers and non-current assets were derived from mainland China[30](index=30&type=chunk) [Other Income](index=15&type=section&id=Other%20Income) Other income significantly decreased to RMB 5,183 thousand for the six months ended June 30, 2025, mainly due to reduced government grants and bank deposit interest income Other Income Details (RMB thousands) | Item | June 30, 2025 (Unaudited) | June 30, 2024 (Unaudited) | Change (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Bank deposit interest income | 2,058 | 7,193 | (5,135) | -71.4% | | Government grants | 507 | 7,103 | (6,596) | -92.9% | | **Total** | **5,183** | **16,188** | **(11,005)** | **-68.0%** | - The decrease in government grants by **RMB 6.6 million** and interest income from large-denomination time deposits by **RMB 4.1 million** were the primary reasons[88](index=88&type=chunk) [Other Gains and Losses](index=15&type=section&id=Other%20Gains%20and%20Losses) Other gains and losses shifted from a gain of RMB 3,201 thousand to a loss of RMB 2,384 thousand, primarily due to asset disposal losses, fair value changes in bills, and reduced exchange gains Other Gains and Losses Details (RMB thousands) | Item | June 30, 2025 (Unaudited) | June 30, 2024 (Unaudited) | Change (RMB thousands) | | :--- | :--- | :--- | | Fair value (loss) of bills receivable at fair value through other comprehensive income | (1,303) | (2,184) | 881 | | (Loss) gain on disposal/write-off of property, plant and equipment | (1,599) | 2 | (1,601) | | Net foreign exchange (loss) gain | (146) | 4,839 | (4,985) | | **Total** | **(2,384)** | **3,201** | **(5,585)** | - Asset disposal losses of **RMB 1.6 million**, fair value changes in bills receivable resulting in a loss of **RMB 1.3 million**, and a decrease in exchange gains by **RMB 5.0 million** were the main reasons[89](index=89&type=chunk) [Finance Costs](index=16&type=section&id=Finance%20Costs) Finance costs slightly decreased to RMB 7,938 thousand for the six months ended June 30, 2025, mainly attributable to a reduction in the average balance of bank borrowings Finance Costs Details (RMB thousands) | Item | June 30, 2025 (Unaudited) | June 30, 2024 (Unaudited) | Change (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Interest expense on bank borrowings | 7,836 | 7,984 | (148) | -1.9% | | Interest expense on lease liabilities | 102 | 104 | (2) | -1.9% | | **Total** | **7,938** | **8,088** | **(150)** | **-1.9%** | - The decrease in finance costs was primarily due to a reduction in the average balance of bank borrowings[92](index=92&type=chunk) [(Loss) Profit Before Tax](index=16&type=section&id=(Loss)%20Profit%20Before%20Tax) The company shifted from a profit to a loss before tax of RMB 10,741 thousand for the six months ended June 30, 2025, influenced by staff costs, depreciation, and inventory costs (Loss) Profit Before Tax Components (RMB thousands) | Item | June 30, 2025 (Unaudited) | June 30, 2024 (Unaudited) | Change (RMB thousands) | | :--- | :--- | :--- | | Staff costs (net of capitalisation) | 7,509 | 9,335 | (1,826) | | Total depreciation and amortisation (net of capitalisation) | 5,325 | 5,525 | (200) | | Cost of inventories recognised as expense | 1,419,074 | 1,530,073 | (110,999) | - Cost of inventories recognised as expense included a write-down of inventories of **RMB 4,898 thousand**, with no such item in the prior period[34](index=34&type=chunk) [Income Tax (Credit) Expense](index=17&type=section&id=Income%20Tax%20(Credit)%20Expense) Income tax shifted from an expense to a credit of RMB 1,439 thousand for the six months ended June 30, 2025, reflecting the change from profit to loss before tax Income Tax (Credit) Expense Details (RMB thousands) | Item | June 30, 2025 (Unaudited) | June 30, 2024 (Unaudited) | Change (RMB thousands) | | :--- | :--- | :--- | | PRC Enterprise Income Tax - Current tax | 6,160 | 10,181 | (4,021) | | PRC Enterprise Income Tax - Underprovision in prior years | 300 | 962 | (662) | | Deferred tax | (7,899) | (1,093) | (6,806) | | **Total** | **(1,439)** | **10,050** | **(11,489)** | - The decrease in income tax expense to a credit primarily reflects the shift from profit before tax to a loss[94](index=94&type=chunk) [Dividends](index=17&type=section&id=Dividends) The company did not declare any dividends during or after the interim period - The Company did not declare any dividends for the year ended December 31, 2024, during the first half of 2025 or subsequent to the period end[36](index=36&type=chunk)[37](index=37&type=chunk) [(Loss) Earnings Per Share](index=17&type=section&id=(Loss)%20Earnings%20Per%20Share) Basic loss per share was RMB 0.02 for the six months ended June 30, 2025, compared to earnings per share of RMB 0.03 in the prior year, indicating a deterioration in performance (Loss) Earnings Per Share (RMB) | Indicator | June 30, 2025 (Unaudited) | June 30, 2024 (Unaudited) | Change | | :--- | :--- | :--- | :--- | | (Loss) Profit for the period attributable to owners of the Company (RMB thousands) | (20,231) | 30,233 | (50,464) | | Weighted average number of ordinary shares (thousands) | 955,640 | 955,640 | 0 | | **Basic (loss) earnings per share** | **(0.02)** | **0.03** | **(0.05)** | - Diluted (loss) earnings per share is not presented as there were no potential ordinary shares with dilutive effect for both periods[38](index=38&type=chunk) [Property, Plant and Equipment](index=18&type=section&id=Property%2C%20Plant%20and%20Equipment) The Group incurred RMB 5,362 thousand in construction costs, primarily for hydrogen refueling stations, and recognized a loss of RMB 1,599 thousand from the disposal of certain equipment - Construction costs: **RMB 5,362 thousand** (2024: RMB 11,574 thousand), mainly for the construction of hydrogen refueling stations[39](index=39&type=chunk) - Write-off or disposal: Equipment with a total carrying value of **RMB 2,130 thousand** was written off or disposed of, resulting in a loss of **RMB 1,599 thousand** (2024: gain of RMB 2 thousand)[39](index=39&type=chunk) [Deferred Tax Assets / Liabilities](index=18&type=section&id=Deferred%20Tax%20Assets%20%2F%20Liabilities) Net deferred tax assets increased to RMB 26,090 thousand as of June 30, 2025, mainly due to an increase in unused tax losses Deferred Tax Assets / Liabilities (RMB thousands) | Indicator | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | Change (RMB thousands) | | :--- | :--- | :--- | | Deferred tax assets | 27,540 | 19,726 | 7,814 | | Deferred tax liabilities | (1,450) | (1,545) | 95 | | **Net** | **26,090** | **18,181** | **7,909** | - Unused tax losses: **RMB 136,036 thousand** (December 31, 2024: RMB 69,011 thousand), of which **RMB 110,836 thousand** has been recognised as deferred tax assets[41](index=41&type=chunk) - Unrecognised deferred income tax assets: **RMB 25,200 thousand** (December 31, 2024: RMB 3 thousand), due to uncertainty regarding future taxable profit streams[41](index=41&type=chunk) [Trade and Other Receivables](index=19&type=section&id=Trade%20and%20Other%20Receivables) Total trade and other receivables slightly decreased to RMB 29,303 thousand as of June 30, 2025, with all trade receivables being current and not overdue Trade and Other Receivables (RMB thousands) | Item | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | Change (RMB thousands) | | :--- | :--- | :--- | | Trade receivables - contracts with customers | 7,288 | 7,792 | (504) | | Prepayments to suppliers | 15,612 | 12,293 | 3,319 | | Prepayments for other taxes and expenses | 5,939 | 10,248 | (4,309) | | **Total** | **29,303** | **30,722** | **(1,419)** | - Trade receivables aging: All amounts are within **90 days** and none are overdue[44](index=44&type=chunk) - Credit period: Generally within **60 days** from delivery[44](index=44&type=chunk) [Amounts Due from Related Parties](index=20&type=section&id=Amounts%20Due%20from%20Related%20Parties) As of June 30, 2025, amounts due from shareholders were RMB 338 thousand, and amounts due from related parties totaled RMB 23,754 thousand, primarily involving the parent company and its non-wholly owned subsidiaries Amounts Due from Shareholders (RMB thousands) | Related Party | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Henan Jinma Energy Co., Ltd. | 338 | - | Amounts Due from Related Parties (RMB thousands) | Related Party | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Xinyang Steel Jingang Energy Co., Ltd. | 23,411 | 23,411 | | Henan Bohai Chemical Co., Ltd. | 343 | - | | **Total** | **23,754** | **23,411** | - Aging of amounts due from related parties: **RMB 343 thousand** within 90 days, **RMB 23,411 thousand** over 365 days, all amounts are unsecured, interest-free, and not overdue[48](index=48&type=chunk) [Borrowings](index=22&type=section&id=Borrowings) Total bank borrowings increased to RMB 365,843 thousand as of June 30, 2025, with an increased proportion of unsecured borrowings Borrowings Details (RMB thousands) | Item | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | Change (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Total bank borrowings | 365,843 | 334,040 | 31,803 | 9.5% | | - Secured | 120,343 | 148,040 | (27,697) | -18.7% | | - Unsecured | 245,500 | 186,000 | 59,500 | 32.0% | | Fixed-rate borrowings | 59,800 | 65,000 | (5,200) | -8.0% | | Floating-rate borrowings | 306,043 | 269,040 | 37,003 | 13.8% | | Due within one year | (276,404) | (231,395) | (45,009) | 19.4% | | Due after one year | 89,439 | 102,645 | (13,206) | -12.9% | Effective Annual Interest Rate Range | Borrowing Type | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Fixed-rate borrowings | 3.40%-4.10% | 3.50%-4.10% | | Floating-rate borrowings | 3.00%-5.40% | 3.41%-5.60% | [Trade and Other Payables](index=23&type=section&id=Trade%20and%20Other%20Payables) Total trade and other payables significantly decreased to RMB 118,138 thousand as of June 30, 2025, mainly due to reductions in bills payable, other taxes payable, and consideration payable for property, plant, and equipment Trade and Other Payables (RMB thousands) | Item | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | Change (RMB thousands) | | :--- | :--- | :--- | | Trade payables | 7,394 | 13,881 | (6,487) | | Bills payable | - | 5,000 | (5,000) | | Total trade payables/bills payable | 7,394 | 18,881 | (11,487) | | Other taxes payable | 8,255 | 47,079 | (38,824) | | Consideration payable for purchase of property, plant and equipment | 94,478 | 114,510 | (20,032) | | **Total** | **118,138** | **193,106** | **(74,968)** | - Trade payables aging: **RMB 5,327 thousand** within 90 days, **RMB 616 thousand** 91 to 180 days, **RMB 1,373 thousand** 181 to 365 days, **RMB 78 thousand** over 1 year[51](index=51&type=chunk) [Amounts Due to Shareholders](index=24&type=section&id=Amounts%20Due%20to%20Shareholders) Amounts due to shareholders increased to RMB 2,862 thousand as of June 30, 2025, primarily for services purchased from the parent company, Jinma Energy Amounts Due to Shareholders (RMB thousands) | Related Party | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Jinma Energy | 2,862 | 1,975 | - This amount represents payables for services purchased, with an aging within **90 days** and a normal credit period of within **60 days**[53](index=53&type=chunk) [Transfer of Financial Assets](index=24&type=section&id=Transfer%20of%20Financial%20Assets) The Group endorsed and discounted bills receivable to settle payables or raise cash, derecognizing related assets and liabilities, with a maximum recourse exposure of RMB 256,451 thousand as of June 30, 2025 Recourse Risk of Endorsed and Discounted Bills Receivable (RMB thousands) | Item | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | Change (RMB thousands) | | :--- | :--- | :--- | | Endorsed bills for settlement of payables | 74,048 | 72,285 | 1,763 | | Discounted bills for raising cash | 182,403 | 174,508 | 7,895 | | **Unrecovered endorsed and discounted bills receivable with recourse** | **256,451** | **246,793** | **9,658** | - The company has transferred significant risks and rewards of bills receivable, and the risk of default is low as the bills are issued and guaranteed by reputable banks[54](index=54&type=chunk) - Unrecovered endorsed and discounted bills receivable are due within **six months**[54](index=54&type=chunk) [Fair Value Measurement of Financial Instruments](index=25&type=section&id=Fair%20Value%20Measurement%20of%20Financial%20Instruments) Certain financial assets are measured at fair value, with bills receivable at fair value through other comprehensive income classified as Level 2, using discounted cash flow valuation techniques Bills Receivable at Fair Value Through Other Comprehensive Income (RMB thousands) | Financial Asset | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | Fair Value Level | Valuation Technique and Key Input Data | | :--- | :--- | :--- | :--- | :--- | | Bills receivable | 41,479 | 34,457 | Level 2 | Discounted cash flow, future cash flows estimated using prevailing market observable discount rates | - Management believes that the carrying amounts of financial assets and liabilities measured at amortised cost approximate their fair values[57](index=57&type=chunk) [Related Party Transactions](index=26&type=section&id=Related%20Party%20Transactions) The Group engages in transactions with related parties, including sales of products, provision of services, and procurement of raw materials, with key management personnel compensation decreasing during the period Transactions with Related Parties (RMB thousands) | Transaction Type | Related Party | June 30, 2025 (Unaudited) | June 30, 2024 (Unaudited) | | :--- | :--- | :--- | :--- | | **Sales of products and provision of services** | | | | | | Jinma Energy | 4,255 | 8,362 | | | Bohai Chemical | 7,560 | 18,240 | | | Jinjiang Refining and Chemical | 44,198 | 52,407 | | **Purchase of raw materials and receipt of services** | | | | | | Jinma Energy | 86,886 | 149,338 | | | Jinma Middle East | 178,429 | 183,666 | | | Jinjiang Refining and Chemical | 5,098 | 10,773 | Key Management Personnel Compensation (RMB thousands) | Item | June 30, 2025 (Unaudited) | June 30, 2024 (Unaudited) | | :--- | :--- | :--- | | Salaries and allowances | 875 | 578 | | Performance-related bonuses | 15 | 530 | | Retirement benefits | 74 | 66 | | **Total** | **964** | **1,174** | [Management Discussion and Analysis](index=28&type=section&id=Management%20Discussion%20and%20Analysis) Provides management's perspective on the Group's operational performance, financial position, key developments, and market risks for the reporting period [Overview](index=28&type=section&id=Overview) The Group is a supplier of hydrogenated phenyl chemicals and energy products in Henan Province, expanding into hydrogen refueling station operations since Q4 2023, aligning with national circular economy and "dual carbon" goals - Main business segments: Hydrogenated phenyl chemicals, energy products (coal gas, LNG), trading (LNG, hydrogen, refined oil), and hydrogen refueling station operations[63](index=63&type=chunk)[64](index=64&type=chunk) - Strategic direction: Responding to the Chinese government's encouragement of circular economy development and "dual carbon" commitments, expanding energy business to include hydrogen[63](index=63&type=chunk) [Financial Summary](index=29&type=section&id=Financial%20Summary_MD%26A) For the six months ended June 30, 2025, the Group's revenue decreased by 10.0% to RMB 1,442.2 million, gross profit significantly dropped by 68.7% to RMB 22.5 million, and the period shifted from profit to a loss of RMB 9.3 million 2025 H1 Financial Summary (RMB millions) | Indicator | 2025 (Unaudited) | 2024 (Unaudited) | Change (RMB millions) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | 1,442.2 | 1,602.1 | (159.9) | -10.0% | | Gross profit | 22.5 | 71.8 | (49.3) | -68.7% | | (Loss) Profit for the period | (9.3) | 44.9 | (54.2) | -120.7% | | Basic (loss) earnings per share (RMB) | (0.02) | 0.03 | (0.05) | -166.7% | | Gross profit margin | 1.6% | 4.5% | (2.9%) | -64.4% | | Net (loss) profit margin | (0.6%) | 2.8% | (3.4%) | -121.4% | Balance Sheet Summary (RMB millions) | Indicator | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | Change (RMB millions) | | :--- | :--- | :--- | | Total assets | 1,605.2 | 1,676.4 | (71.2) | | Total equity | 1,059.4 | 1,091.6 | (32.2) | [Factors Affecting Operating Results and Financial Position](index=29&type=section&id=Factors%20Affecting%20Operating%20Results%20and%20Financial%20Position) The Group's performance is influenced by China's economic conditions, downstream industry demand, raw material and product price fluctuations, production capacity, sales volume, and financing access and costs [Overall Economic Conditions and Downstream Industry Demand](index=30&type=section&id=Overall%20Economic%20Conditions%20and%20Downstream%20Industry%20Demand) China's economic conditions directly impact product market prices, demand, and raw material costs, with sales of hydrogenated phenyl chemicals and LNG dependent on domestic chemical industry and global LNG price fluctuations - Economic conditions impact: Economic downturns may lead to lower product selling prices, requiring adjustments to procurement and sales strategies; economic recovery may lead to higher selling prices and increased prepayments for raw materials[67](index=67&type=chunk) - Downstream industry demand: Phenyl chemicals are mainly used in rubber, textile, and other industries; LNG primarily supplies industrial users and gas station customers[68](index=68&type=chunk) - Price impact: Hydrogenated phenyl chemical prices are affected by oil prices; LNG prices are influenced by global LNG price fluctuations[68](index=68&type=chunk) [Raw Material and Product Prices](index=30&type=section&id=Raw%20Material%20and%20Product%20Prices) The Group faces price volatility risks for products and raw materials, particularly crude benzene and coke oven gas, with average selling prices generally decreasing in H1 2025 while raw material prices also fluctuated - Price volatility risk: Fluctuations in market prices of products and raw materials (crude benzene, coke oven gas), and changes in the price spread between them[69](index=69&type=chunk) Main Product Average Selling Prices (RMB/tonne, coal gas in RMB/cubic meter) | Main Product | 2025 H1 | 2024 | | :--- | :--- | :--- | | Hydrogenated phenyl chemicals | 5,668.57 | 6,734.73 | | Pure benzene | 6,103.05 | 7,270.64 | | Toluene | - | 6,395.48 | | Coal gas | 0.84 | 0.83 | | LNG | 3,993.39 | 4,197.57 | Main Raw Material Average Procurement Prices | Main Raw Material | 2025 H1 | 2024 | | :--- | :--- | :--- | | Crude benzene (RMB/tonne) | 5,118.52 | 6,294.04 | | Coke oven gas (RMB/cubic meter) | 0.62 | 0.60 | - Raw material procurement: Crude benzene is primarily purchased from suppliers like Jinma Group, usually under annual supply contracts with prices based on prevailing market rates; the vast majority of coke oven gas is purchased from Jinma Group, with the acquisition of coke particle gasification facilities in August 2023 to reduce reliance[75](index=75&type=chunk)[76](index=76&type=chunk) [Production Capacity and Sales Volume](index=32&type=section&id=Production%20Capacity%20and%20Sales%20Volume) The Group maintained stable operations in H1 2025, with major products achieving near full sales, including annual capacities of 400,000 tonnes for hydrogenated phenyl chemicals, 72,000 tonnes for LNG, and 317.0 million cubic meters for hydrogen - Production and sales: Stable operations in H1 2025, with major products achieving near full sales[77](index=77&type=chunk) - Hydrogenated phenyl chemicals capacity: Approximately **400,000 tonnes** per year[77](index=77&type=chunk) - LNG production facility capacity: Approximately **72,000 tonnes** per year[77](index=77&type=chunk) - Hydrogen capacity: Approximately **317.0 million cubic meters** per year (including joint venture Jinjiang Refining and Chemical)[77](index=77&type=chunk) [Financing Channels and Costs](index=33&type=section&id=Financing%20Channels%20and%20Costs) The Group primarily funds operations and capital expenditures through bank and financial institution borrowings, with total interest-bearing borrowings of approximately RMB 365.8 million and finance costs of RMB 7.9 million in H1 2025 - Financing sources: Primarily from cash generated from product sales, equity (including listing proceeds), and borrowings from banks/financial institutions[78](index=78&type=chunk) Interest-Bearing Borrowings and Finance Costs (RMB millions) | Indicator | 2025 H1 | December 31, 2024 | | :--- | :--- | :--- | | Total interest-bearing borrowings | 365.8 | 334.0 | | Finance costs | 7.9 | 8.1 | | Finance costs as % of total revenue | 0.55% | 0.50% | [Key Developments](index=33&type=section&id=Key%20Developments) In H1 2025, the Group continued investments in production efficiency, safety, and environmental protection, while actively expanding its hydrogen refueling station business with two new stations and increased hydrogen sales [Investment in Production Efficiency, Safety, and Environmental Protection](index=33&type=section&id=Investment%20in%20Production%20Efficiency%2C%20Safety%2C%20and%20Environmental%20Protection) The Group invested approximately RMB 1.2 million in a sulfur-containing wastewater stripping tower to enhance production efficiency, reduce treatment costs, and stabilize operations - Investment project: Construction of a sulfur-containing wastewater stripping tower, with an investment of approximately **RMB 1.2 million**[79](index=79&type=chunk) - Benefits: Saves costs for sulfur-containing water treatment, facilitates system water usage, and stabilises production[79](index=79&type=chunk) [Hydrogen Refueling Station Business Development](index=33&type=section&id=Hydrogen%20Refueling%20Station%20Business%20Development) The Group operated five hydrogen refueling stations, with significant sales growth at existing stations and the addition of two new stations, expanding its hydrogen heavy-duty truck service network Hydrogen Sales Volume at Refueling Stations (tonnes) | Refueling Station | 2025 H1 Sales Volume | 2024 H1 Sales Volume | Change (tonnes) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Jiyuan Nanhuan Refueling Station | 322 | 167 | 155 | 92.8% | | Zhengzhou Huagong Road Refueling Station | 179 | 63 | 116 | 184.1% | | Gongyi Heluo Refueling Station | 103 | 20 | 83 | 415.0% | | Jiyuan Huling Refueling Station (New) | 133 | - | 133 | - | | Dengfeng Guojiawa Refueling Station (New) | 73 | - | 73 | - | - Gongyi Heluo Refueling Station benefited from the new policy of free highway access for hydrogen-powered vehicles, leading to rapid growth in hydrogen heavy-duty truck transportation business[80](index=80&type=chunk) - New hydrogen refueling stations: Jiyuan Huling Refueling Station and Dengfeng Guojiawa Refueling Station, with clear service vehicle types and main customer groups[81](index=81&type=chunk) [Operating Results Analysis](index=34&type=section&id=Operating%20Results%20Analysis) The Group's operating performance significantly deteriorated in H1 2025, with decreased revenue, sharply reduced gross profit, and a shift from profit to loss, mainly due to falling average selling prices of hydrogenated phenyl chemicals, reduced government grants, and asset disposal losses Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (RMB thousands) | Indicator | June 30, 2025 (Unaudited) | June 30, 2024 (Unaudited) | Change (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | 1,442,220 | 1,602,071 | (159,851) | -10.0% | | Cost of sales | (1,419,722) | (1,530,294) | 110,572 | -7.2% | | Gross profit | 22,498 | 71,777 | (49,279) | -68.7% | | Other income | 5,183 | 16,188 | (11,005) | -68.0% | | Other gains and losses | (2,384) | 3,201 | (5,585) | -174.5% | | Selling and distribution expenses | (6,920) | (7,556) | 636 | -8.4% | | Administrative expenses | (20,829) | (21,780) | 951 | -4.4% | | Finance costs | (7,938) | (8,088) | 150 | -1.9% | | Share of results of joint ventures | (351) | 1,190 | (1,541) | -129.5% | | (Loss) Profit before tax | (10,741) | 54,932 | (65,673) | -119.6% | | Income tax credit (expense) | 1,439 | (10,050) | 11,489 | -114.3% | | (Loss) Profit for the period | (9,302) | 44,882 | (54,184) | -120.7% | | (Loss) Profit for the period attributable to owners of the Company | (20,231) | 30,233 | (50,464) | -167.0% | | Basic (loss) earnings per share (RMB) | (0.02) | 0.03 | (0.05) | -166.7% | [Revenue and Gross Profit Margin](index=36&type=section&id=Revenue%20and%20Gross%20Profit%20Margin) Revenue decreased by 10.0% to RMB 1,442.2 million, and gross profit margin fell from 4.5% to 1.6%, primarily because the decline in average selling prices for hydrogenated phenyl chemicals outpaced the drop in raw material procurement costs - Revenue decrease: **RMB 159.9 million**, a **10.0%** decrease[87](index=87&type=chunk) - Gross profit margin decrease: From **4.5% to 1.6%**, mainly due to an approximately **18.3%** decrease in the average tax-inclusive selling price of hydrogenated phenyl chemicals, while the average consumption procurement price of raw materials decreased less significantly[87](index=87&type=chunk) - Hydrogenated phenyl chemicals sales volume: Increased by **10.6%**[87](index=87&type=chunk) [Other Income](index=36&type=section&id=Other%20Income_MD%26A) Other income decreased by RMB 11.0 million to approximately RMB 5.2 million, primarily due to reduced government grants and interest income from large-denomination time deposits - Decrease amount: **RMB 11.0 million**[88](index=88&type=chunk) - Main reasons: Government grants decreased by **RMB 6.6 million**, and interest income from large-denomination time deposits decreased by **RMB 4.1 million**[88](index=88&type=chunk) [Other Gains and Losses](index=36&type=section&id=Other%20Gains%20and%20Losses_MD%26A) Other gains and losses shifted from a gain of RMB 3.2 million to a loss of RMB 2.4 million, mainly due to asset disposal losses, fair value changes in bills, and reduced exchange gains - Change: From a gain of **RMB 3.2 million** to a loss of **RMB 2.4 million**[89](index=89&type=chunk) - Main reasons: Asset disposal losses of **RMB 1.6 million**, fair value changes in bills receivable resulting in a loss of **RMB 1.3 million**, and a decrease in exchange gains by **RMB 5.0 million**[89](index=89&type=chunk) [Selling and Distribution Expenses](index=36&type=section&id=Selling%20and%20Distribution%20Expenses) Selling and distribution expenses decreased by approximately 8.4% to RMB 6.9 million in H1 2025, reflecting the decline in sales volume - Decrease amount: Approximately **RMB 0.7 million**, an **8.4%** decrease[90](index=90&type=chunk) - Reason: Reflects the decrease in sales volume[90](index=90&type=chunk) [Administrative Expenses](index=37&type=section&id=Administrative%20Expenses) Administrative expenses decreased by approximately 4.4% to RMB 20.8 million in H1 2025 - Decrease amount: Approximately **RMB 1.0 million**, a **4.4%** decrease[91](index=91&type=chunk) [Finance Costs](index=37&type=section&id=Finance%20Costs_MD%26A) Finance costs decreased by RMB 0.2 million to RMB 7.9 million, primarily due to a reduction in the average balance of bank borrowings - Decrease amount: **RMB 0.2 million**[92](index=92&type=chunk) - Reason: Reduction in the average balance of bank borrowings[92](index=92&type=chunk) [Share of Results of Joint Ventures](index=37&type=section&id=Share%20of%20Results%20of%20Joint%20Ventures) Share of results of joint ventures shifted from a gain of RMB 1.2 million to a loss of RMB 0.4 million, mainly due to decreased sales volume and unit selling prices at Jinjiang Refining and Chemical (49% owned) - Change: From a gain of **RMB 1.2 million** to a loss of **RMB 0.4 million**[93](index=93&type=chunk) - Reason: Decreased sales volume and unit selling prices at Jinjiang Refining and Chemical (49% owned by the Company)[93](index=93&type=chunk) [Income Tax Credit (Expense)](index=37&type=section&id=Income%20Tax%20Credit%20(Expense)) Income tax shifted from an expense of RMB 10.1 million to a credit of RMB 1.4 million, reflecting the change from profit before tax to a loss - Change: From an expense of **RMB 10.1 million** to a credit of **RMB 1.4 million**[94](index=94&type=chunk) - Reason: Shift from profit before tax to a loss[94](index=94&type=chunk) [Total Comprehensive (Expense) Income for the Year](index=37&type=section&id=Total%20Comprehensive%20(Expense)%20Income%20for%20the%20Year) Total comprehensive (expense) income shifted from a gain of RMB 45.1 million to an expense of RMB 9.3 million, representing a 120.6% decrease - Change: From a gain of **RMB 45.1 million** to an expense of **RMB 9.3 million**[95](index=95&type=chunk) - Decrease amount: **RMB 54.4 million**, a **120.6%** decrease[95](index=95&type=chunk) [Segment Results](index=38&type=section&id=Segment%20Results) In H1 2025, the hydrogenated phenyl chemicals segment shifted from profit to loss, while energy products and trading segments experienced declines in revenue and gross profit margin, reflecting market changes and cost pressures Business Segment Revenue and Results (RMB thousands) | Segment | 2025 Revenue | 2024 Revenue | 2025 Results | 2024 Results | 2025 Gross Profit Margin (%) | 2024 Gross Profit Margin (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Hydrogenated phenyl chemicals | 1,110,256 | 1,229,506 | (17,993) | 15,790 | (1.6) | 1.3 | | Energy products | 282,881 | 303,937 | 36,083 | 46,323 | 12.8 | 15.2 | | Trading | 46,773 | 63,421 | 3,141 | 5,507 | 6.7 | 8.7 | - Hydrogenated phenyl chemicals: Sales volume increased by **10.6%**, but the average selling price decreased by **18.3%**, leading to a **9.7%** decrease in revenue and a drop in gross profit margin from **1.3% to -1.6%**, as the decrease in raw material procurement prices was less than the product selling price decrease[96](index=96&type=chunk) - Energy products: LNG and coal gas sales volumes decreased by **4.9%** and **14.1%** respectively, leading to a **6.9%** decrease in revenue, with the gross profit margin decline mainly due to increased LNG production costs and a smaller increase in coal gas selling prices compared to raw materials[97](index=97&type=chunk) - Trading segment: Revenue decreased by **26.2%**, primarily due to significant drops in diesel and gasoline sales volumes at gas stations by **40.3%** and **35.4%** respectively, with gross profit margin falling from **8.7% to 6.7%**[97](index=97&type=chunk) [Financial Position](index=39&type=section&id=Financial%20Position) The Group maintained good liquidity in H1 2025, but operating cash flow significantly decreased, total bank borrowings increased, and both return on equity and return on assets turned negative, indicating reduced profitability [Liquidity and Financial Resources](index=39&type=section&id=Liquidity%20and%20Financial%20Resources) The Group's funding primarily comes from product sales, equity, and bank borrowings, with no liquidity issues encountered in H1 2025, and liquidity risk managed through cash flow forecasts and reserves - Funding sources: Product sales, equity (including listing proceeds), and borrowings from banks/financial institutions[98](index=98&type=chunk) - Liquidity status: No liquidity issues encountered in H1 2025[98](index=98&type=chunk) - Management strategy: The finance department prepares cash flow forecasts, which are regularly reviewed by senior management, and a certain level of cash reserves is maintained[98](index=98&type=chunk) [Cash Flows](index=39&type=section&id=Cash%20Flows) Net cash from operating activities significantly decreased to RMB 43.0 million, investing activities used RMB 21.1 million, and financing activities generated RMB 0.5 million, resulting in cash and cash equivalents of RMB 158.9 million at period-end Cash Flow Summary (RMB thousands) | Indicator | 2025 H1 (Unaudited) | 2024 H1 (Unaudited) | Change (RMB thousands) | | :--- | :--- | :--- | | Net cash generated from operating activities | 42,950 | 104,201 | (61,251) | | Net cash (used in) from investing activities | (21,132) | (67,741) | 46,609 | | Net cash generated from financing activities | 461 | 46,321 | (45,860) | | Net increase in cash and cash equivalents | 22,279 | 82,781 | (60,502) | | Cash and cash equivalents at end of period | 158,905 | 388,221 | (229,316) | - Decrease in operating cash flow: Primarily attributed to a decrease in operating cash flow before working capital changes, a reduction in trade and other payables, and an increase in bills receivable[100](index=100&type=chunk) - Investing cash outflow: Mainly for the purchase of property, plant and equipment, partially offset by interest income from bank deposits and dividend income from joint ventures[101](index=101&type=chunk) - Financing cash flow: Primarily driven by an increase in bank borrowings, offset by repayment of bank loans, dividend payments, and interest expenses[102](index=102&type=chunk) [Liabilities](index=41&type=section&id=Liabilities) Total bank borrowings increased to RMB 365.8 million as of June 30, 2025, with an increased proportion of unsecured borrowings, and the Group has RMB 254.3 million in available bank credit facilities Bank Borrowings Details (RMB thousands) | Item | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | Increase/(Decrease) (RMB thousands) | | :--- | :--- | :--- | :--- | | Total bank borrowings | 365,843 | 334,040 | 31,803 | | - Secured | 120,343 | 148,040 | (27,697) | | - Unsecured | 245,500 | 186,000 | 59,500 | | Fixed-rate borrowings | 59,800 | 65,000 | (5,200) | | Floating-rate borrowings | 306,043 | 269,040 | 37,003 | - Bank credit facilities: Total approximately **RMB 630.1 million** (December 31, 2024: RMB 448.7 million), of which approximately **RMB 254.3 million** remains available[107](index=107&type=chunk) - Repayment plan: The Group intends to refinance bank borrowings upon maturity or repay them with internally generated funds[107](index=107&type=chunk) [Pledge of Assets](index=43&type=section&id=Pledge%20of%20Assets) As of June 30, 2025, the Group pledged assets with a total carrying value of approximately RMB 31.1 million to secure general banking facilities - Total carrying value of pledged assets: Approximately **RMB 31.1 million** (December 31, 2024: approximately RMB 165.5 million)[110](index=110&type=chunk) - Purpose: To secure general banking facilities (including bank borrowings and bills payable)[110](index=110&type=chunk) [Financial Ratios](index=43&type=section&id=Financial%20Ratios) In H1 2025, the debt-to-asset ratio increased to 34.5%, and both annualized return on equity and return on assets turned negative at -4.1% and -2.5% respectively, reflecting a decline in profitability Financial Ratios | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Debt-to-asset ratio | 34.5% | 30.6% | | Return on equity (annualised) | -4.1% | -1.6% | | Return on assets (annualised) | -2.5% | 0.7% | - Increase in debt-to-asset ratio: Primarily due to an increase in total interest-bearing bank borrowings[112](index=112&type=chunk) - Decrease in return on equity: Mainly due to an increase in loss for the period attributable to owners of the Company[113](index=113&type=chunk) - Decrease in return on assets: Primarily due to the Group's total comprehensive income for the period shifting from a gain to an expense[114](index=114&type=chunk) [Off-Balance Sheet Arrangements](index=44&type=section&id=Off-Balance%20Sheet%20Arrangements) As of June 30, 2025, the Group had no significant off-balance sheet arrangements, including equity-linked derivative contracts or retained interests in non-consolidated entities - No significant off-balance sheet arrangements: The Group has not entered into equity-linked derivative contracts, nor does it have retained or contingent interests in assets transferred to unconsolidated entities[115](index=115&type=chunk) [Transfer of Financial Assets](index=44&type=section&id=Transfer%20of%20Financial%20Assets_MD%26A) The Group endorsed and discounted bills receivable to settle payables or raise cash, derecognizing related assets and liabilities, with a maximum recourse exposure of RMB 256,451 thousand as of June 30, 2025 Recourse Risk of Endorsed and Discounted Bills Receivable (RMB thousands) | Item | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Endorsed bills for settlement of payables | 74,048 | 72,285 | | Discounted bills for raising cash | 182,403 | 174,508 | | **Unrecovered endorsed and discounted bills receivable with recourse** | **256,451** | **246,793** | - Risk assessment: Directors believe that significant risks and rewards have been transferred, and the risk of default is low as the bills are issued and guaranteed by reputable banks[116](index=116&type=chunk) [Significant Acquisitions and Disposals of Subsidiaries, Associates, and Joint Ventures](index=44&type=section&id=Significant%20Acquisitions%20and%20Disposals%20of%20Subsidiaries%2C%20Associates%2C%20and%20Joint%20Ventures) There were no significant acquisitions or disposals of subsidiaries, associates, or joint ventures during the reporting period or up to the date of this interim report - No significant M&A: No significant acquisition or disposal activities of subsidiaries, associates, or joint ventures occurred during the reporting period or up to the date of this interim report[117](index=117&type=chunk) [Subsequent Significant Events and Other Commitments](index=45&type=section&id=Subsequent%20Significant%20Events%20and%20Other%20Commitments) From the end of the reporting period to the date of this report, there were no other subsequent significant events or commitments that could materially affect the financial position and operations - No significant subsequent events: From the end of the reporting period to the date of this report, there were no other subsequent significant events or commitments that could materially affect the financial position and operations[118](index=118&type=chunk) [Market Risks](index=45&type=section&id=Market%20Risks) The Group faces commodity price, interest rate, credit, and liquidity risks, which are mitigated through regular operational and financial activities, with no foreign exchange or interest rate hedging contracts currently in place - Risk types: Commodity price risk, interest rate risk, credit risk, and liquidity risk[119](index=119&type=chunk) - Risk management: Risks are minimised through regular operational and financial activities, with no foreign exchange or interest rate hedging contracts currently in place[119](index=119&type=chunk) - Foreign exchange risk: The Group has no significant foreign exchange risk, except for Hong Kong dollar proceeds from the listing that have not yet been remitted back to mainland China[119](index=119&type=chunk) [Commodity Price Risk](index=45&type=section&id=Commodity%20Price%20Risk) The Group is exposed to price volatility risks for raw materials (crude benzene, coke oven gas) and products, influenced by market supply and demand, upstream coal prices, and international chemical prices - Risk sources: Price fluctuations of raw materials (crude benzene, coke oven gas) and product market prices[120](index=120&type=chunk) - Pricing strategy: Crude benzene is typically purchased based on prevailing market prices, and coke oven gas prices are negotiated annually; product sales are based on prevailing market prices in the region and customer factors[120](index=120&type=chunk) [Interest Rate Risk](index=46&type=section&id=Interest%20Rate%20Risk) The Group is exposed to fair value interest rate risk related to interest-bearing bank balances, bills receivable, borrowings, and lease liabilities, as well as cash flow interest rate risk from floating-rate borrowings. Currently, there is no interest rate hedging policy - Risk types: Fair value interest rate risk (interest-bearing restricted bank balances, bills receivable, borrowings, lease liabilities) and cash flow interest rate risk (floating-rate borrowings)[121](index=121&type=chunk) - Fixed-rate borrowings: Approximately **RMB 59.8 million** (December 31, 2024: RMB 65.0 million)[121](index=121&type=chunk) - Hedging policy: Currently, there is no interest rate hedging policy, but management will consider it when necessary[121](index=121&type=chunk) [Credit Risk](index=46&type=section&id=Credit%20Risk) The Group's credit risk is primarily concentrated in trade and other receivables and amounts due from shareholders/related parties, but it is mitigated by transacting with reputable customers, requiring prepayments, and continuous monitoring - Credit risk concentration: Trade and other receivables and trade-related amounts due from shareholders/related parties, with over **95.4%** (December 31, 2024: 98.3%) concentrated in the five largest outstanding balances[122](index=122&type=chunk) - Risk management: Transacting with reputable customers, requiring upfront payments from new customers, continuous monitoring of overdue receivables, and ensuring adequate impairment loss provisions[122](index=122&type=chunk) - Bank deposit risk: Limited, as deposits are placed with state-owned banks with high credit ratings[122](index=122&type=chunk) [Liquidity Risk](index=46&type=section&id=Liquidity%20Risk) The Group manages liquidity risk by monitoring and maintaining adequate cash and cash equivalents to address potential pressure from multiple liabilities maturing in quick succession - Risk source: Potential working capital pressure from multiple liabilities maturing in quick succession[123](index=123&type=chunk) - Management strategy: Management monitors and maintains adequate but not excessive levels of cash and cash equivalents to fund operations and mitigate the impact of cash flow fluctuations[123](index=123&type=chunk) [No Material Adverse Change](index=47&type=section&id=No%20Material%20Adverse%20Change) The Directors confirm that there has been no material adverse change in the Group's financial or trading position since June 30, 2025, and up to the date of this report - No material adverse change: The Directors confirm that there has been no material adverse change in the Group's financial or trading position since June 30, 2025, and up to the date of this report[124](index=124&type=chunk) [Dividends](index=47&type=section&id=Dividends_MD%26A) The Board resolved not to declare an interim dividend for the six months ended June 30, 2025, and will consider distributable reserves, liquidity, and future commitments when determining dividend policy - Dividend policy: The Board considers factors such as distributable reserves, liquidity levels, and future commitments[125](index=125&type=chunk) - Interim dividend: The Board resolved not to declare an interim dividend for the six months ended June 30, 2025[126](index=126&type=chunk) [Pension Schemes](index=47&type=section&id=Pension%20Schemes) The Group's employees in mainland China participate in defined contribution retirement benefit schemes, while Hong Kong employees participate in MPF schemes, with contributions made as required - Mainland China employees: Participate in various defined contribution retirement benefit schemes organised by relevant provincial and municipal governments in China, contributing a certain percentage of employee salaries[127](index=127&type=chunk) - Hong Kong employees: Participate in the Mandatory Provident Fund Scheme under the Mandatory Provident Fund Schemes Ordinance, with employer contributions of HKD 1,500 per month or 5% of relevant monthly salary costs (whichever is lower)[127](index=127&type=chunk) [Use of Proceeds from Listing](index=48&type=section&id=Use%20of%20Proceeds%20from%20Listing) The net proceeds from the company's listing, approximately RMB 228.9 million, are planned for hydrogen refueling stations, investments/acquisitions, and working capital, with RMB 10,216 thousand used for working capital as of June 30, 2025 - Net proceeds from listing: Approximately **HKD 251.6 million** (equivalent to approximately **RMB 228.9 million**)[128](index=128&type=chunk) Planned and Actual Use of Net Proceeds from Listing (RMB thousands) | Business Purpose | Planned Use | Percentage (%) | Actual Use Jan-Jun 2025 | Unused Net Proceeds | Expected Timeline | | :--- | :--- | :--- | :--- | :--- | :--- | | Hydrogen refueling stations with hydrogen facilities | 194,574 | 85 | 0 | 194,574 | 2025-2027 | | Investment and/or acquisition of upstream and downstream participants | 11,445 | 5 | 0 | 11,445 | 2025-2027 | | Working capital and other general corporate purposes | 22,891 | 10 | 10,216 | 12,674 | 2025-2027 | | **Total** | **228,910** | **100** | **10,216** | **218,693** | | [Corporate Governance and Other Information](index=49&type=section&id=Corporate%20Governance%20and%20Other%20Information) Outlines the company's corporate governance philosophy, compliance with the Corporate Governance Code, and other relevant disclosures regarding directors, supervisors, and shareholders [Corporate Governance Philosophy and Code](index=49&type=section&id=Corporate%20Governance%20Philosophy%20and%20Code) The company adheres to a prudent and efficient corporate governance philosophy, committed to high standards and compliance with the Listing Rules' Corporate Governance Code, except for not having a formal dividend policy - Corporate governance philosophy: Prudent and efficient, focusing on shareholder interests, committed to high-level corporate governance[129](index=129&type=chunk) - Code compliance: For the six months ended June 30, 2025, the company has complied with all code provisions under the Listing Rules and the Corporate Governance Code, except for not having a formal dividend policy[130](index=130&type=chunk) - Company Articles of Association: Revised Articles of Association adopted on January 22, 2025, and published on the company's and HKEX websites[130](index=130&type=chunk) [Directors' Securities Transactions](index=50&type=section&id=Directors'%20Securities%20Transactions) The company adopted the Model Code for Securities Transactions by Directors of Listed Issuers and confirmed that all directors and supervisors complied with it during the reporting period - Code adoption: Adopted the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 of the Listing Rules[131](index=131&type=chunk) - Compliance status: Following enquiry, all Directors and Supervisors confirmed compliance with the Model Code for the six months ended June 30, 2025[131](index=131&type=chunk) [Board of Directors](index=50&type=section&id=Board%20of%20Directors) The first Board of Directors comprises eight members, including two executive, three non-executive, and three independent non-executive directors, serving a three-year term until July 28, 2026 - Board composition: Eight directors, including two executive directors, three non-executive directors, and three independent non-executive directors[132](index=132&type=chunk) - Term of office: Three years, until July 28, 2026, and eligible for re-appointment for multiple consecutive terms[132](index=132&type=chunk) - Member list: Executive Directors Mr. Wang Zengguang (General Manager), Mr. Qiao Erwei (Deputy General Manager and Company Secretary); Non-executive Directors Mr. Rao Zhaohui (Chairman), Mr. Wang Kaibao (Vice Chairman), Mr. Wang Lijie; Independent Non-executive Directors Ms. Huang Xinqi, Mr. Di Zhigang, Ms. Liang Shanying[132](index=132&type=chunk) [Supervisory Committee](index=51&type=section&id=Supervisory%20Committee) The first Supervisory Committee consists of three supervisors, appointed on July 20, 2023, for a three-year term - Supervisory Committee composition: Three supervisors[133](index=133&type=chunk) - Term of office: Three years, appointed on July 20, 2023[133](index=133&type=chunk) - Member list: Mr. Huang Ziliang, Mr. Wu Zhiqiang, Mr. Li Hebao[133](index=133&type=chunk) [Disclosure of Information on Directors, Supervisors and Chief Executive](index=51&type=section&id=Disclosure%20of%20Information%20on%20Directors%2C%20Supervisors%20and%20Chief%20Executive) Independent non-executive director Ms. Huang Xinqi's appointments changed during the six months ended June 30, 2025, and up to the date of this interim results announcement - Ms. Huang Xinqi's changes: Resigned as independent non-executive director of Duoxiangyun Holding Limited effective June 27, 2025, and appointed as independent non-executive director of Cansino Biologics Inc. effective June 30, 2025[133](index=133&type=chunk) [Interests of Directors, Supervisors and Chief Executive in Securities](index=51&type=section&id=Interests%20of%20Directors%2C%20Supervisors%20and%20Chief%20Executive%20in%20Securities) As of June 30, 2025, no directors, supervisors, or chief executive held disclosable interests in the company's shares. Non-executive directors Mr. Rao Zhaohui and Mr. Wang Lijie held indirect interests in the parent company, Jinma Energy's H shares - Interests in the Company's shares: As of June 30, 2025, no Directors, Supervisors, or Chief Executive had any interests or short positions in the shares, underlying shares, or debentures of the Company that were required to be recorded or notified[134](index=134&type=chunk) Long Positions in Associated Corporations (Jinma Energy) | Name | Nature of Interest | Class of Shares | Number of Shares Held (L) | Approximate Percentage of Total Share Capital | | :--- | :--- | :--- | :--- | :--- | | Mr. Rao Zhaohui | Interest in controlled corporation | H Shares | 162,000,000 | 30.26% | | | Beneficial owner | H Shares | 2,681,000 | 0.50% | | Mr. Wang Lijie | Interest in controlled corporation | H Shares | 42,900,000 | 8.01% | - Mr. Rao Zhaohui indirectly holds approximately **30.26%** interest in Jinma Energy through Jinxing Chemical (Holdings) Co., Ltd[136](index=136&type=chunk) - Mr. Wang Lijie indirectly holds **8.01%** interest in Jinma Energy through Jiyuan Jinma Xingye Investment Co., Ltd[136](index=136&type=chunk) [Interests of Directors and Supervisors in Transactions, Arrangements or Contracts](index=53&type=section&id=Interests%20of%20Directors%20and%20Supervisors%20in%20Transactions%2C%20Arrangements%20or%20Contracts) During the reporting period, no directors, supervisors, or their associated entities had significant direct or indirect interests in any transactions, arrangements, or contracts material to the Group's business - No material interests: During the reporting period, no Directors, Supervisors, or their associated entities had any direct or indirect material interests in any transactions, arrangements, or contracts significant to the Group's business[137](index=137&type=chunk) [Arrangements to Purchase Shares or Debentures](index=53&type=section&id=Arrangements%20to%20Purchase%20Shares%20or%20Debentures) During the reporting period, there were no arrangements by the company, its holding company, or any of its subsidiaries or fellow subsidiaries for directors to acquire shares or debentures of the company or any other body corporate - No arrangements to purchase shares or debentures: During the reporting period, there were no arrangements by the Company, its holding company, or any of its subsidiaries or fellow subsidiaries for Directors to acquire shares or debentures of the Company or any other body corporate[138](index=138&type=chunk) [Interests of Substantial Shareholders in Securities](index=53&type=section&id=Interests%20of%20Substantial%20Shareholders%20in%20Securities) As of June 30, 2025, Jinma Energy directly or indirectly held 74.65% and 0.35% respectively of the company's issued share capital, making it the substantial shareholder Interests of Substantial Shareholders in the Company's Securities | Name/Company Name | Nature of Interest | Class of Shares | Number of Shares Held (L) | Approximate Percentage of Total Share Capital | | :--- | :--- | :--- | :--- | :--- | | Jinma Energy | Beneficial owner | H Shares | 713,380,000 | 74.65% | | | Interest in controlled corporation | H Shares | 3,350,000 | 0.35% | - Jinma Energy indirectly holds **0.35%** interest in the Company through its wholly-owned subsidiary, Shanghai Jinma Energy Co., Ltd[141](index=141&type=chunk) [Sufficiency of Public Float](index=54&type=section&id=Sufficiency%20of%20Public%20Float) The company has maintained the public float level required by the Listing Rules since its listing date and up to the date of this announcement - Public float: The Company has maintained the public float level required by the Listing Rules since its listing date and up to the date of this announcement[142](index=142&type=chunk) [Purchase, Sale and Redemption of the Company's Securities](index=54&type=section&id=Purchase%2C%20Sale%20and%20Redemption%20of%20the%20Company's%20Securities) Neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities during the six months ended June 30, 2025 - No securities transactions: Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the six months ended June 30, 2025[143](index=143&type=chunk) [Employees and Remuneration Policy](index=54&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the Group had 397 employees with total staff costs of approximately RMB 21.58 million. The company has a Remuneration and Assessment Committee that formulates remuneration policies based on performance and market practices, and provides social insurance and training programs for employees - Total employees: **397** (2 senior management, 17 middle management, 376 general staff)[144](index=144&type=chunk) - Staff costs: Approximately **RMB 21.58 million** (prior period: approximately RMB 23.98 million)[144](index=144&type=chunk) - Remuneration policy: Recommended by the Remuneration and Assessment Committee, based on the Group's overall operating performance, individual performance, and market practices[144](index=144&type=chunk) - Employee benefits: Full contributions to social insurance (including pension schemes, medical insurance, work injury insurance, unemployment insurance, and maternity insurance) and housing provident fund for all employees[144](index=144&type=chunk) - Training programs: Annual training plans developed, covering management, finance, safety, environmental protection, equipment, and processes[145](index=145&type=chunk) [Audit Committee and Review of Interim Results](index=55&type=section&id=Audit%20Committee%20and%20Review%20of%20Interim%20Results) The company's Audit Committee, comprising three directors, is responsible for reviewing financial information, monitoring financial reporting, risk management, and internal control systems. The committee has reviewed the unaudited condensed consolidated interim financial statements for the reporting period, which were also reviewed by external auditor Deloitte Touche Tohmatsu - Audit Committee composition: Three directors, including Ms. Huang Xinqi (Chairperson, Independent Non-executive Director), Mr. Wang Kaibao (Non-executive Director), and Mr. Di Zhigang (Independent Non-executive Director)[146](index=146&type=chunk) - Responsibilities: Review financial information, monito