[Company Information and Report Overview](index=1&type=section&id=%E5%85%AC%E5%8F%B8%E4%BF%A1%E6%81%AF%E4%B8%8E%E6%8A%A5%E5%91%8A%E6%A6%82%E8%A7%88) [Corporate Information](index=1&type=section&id=%E5%85%AC%E5%8F%B8%E5%9F%BA%E6%9C%AC%E4%BF%A1%E6%81%AF) Peiport Holdings Ltd, a Cayman Islands incorporated company with stock code 2885, presents its unaudited interim financial results for the six months ended June 30, 2025 - Company Name: **Peiport Holdings Ltd.**, Stock Code: **2885**[2](index=2&type=chunk) - Reporting Period: Unaudited interim condensed consolidated financial results for the six months ended **June 30, 2025**[2](index=2&type=chunk) [Basis of Preparation](index=5&type=section&id=%E6%8A%A5%E5%91%8A%E7%BC%96%E5%88%B6%E5%9F%BA%E7%A1%80) The interim financial statements are prepared under HKAS 34 and Listing Rules Appendix D2 on a historical cost basis, presented in Hong Kong dollars and rounded to the nearest thousand - Basis of Preparation: Hong Kong Accounting Standard (HKAS) 34 "Interim Financial Reporting" and Appendix D2 of the Securities Listing Rules[9](index=9&type=chunk) - Accounting Basis: Historical cost basis, presented in Hong Kong dollars, with all values rounded to the nearest thousand[10](index=10&type=chunk) - Changes in Accounting Policies: The amendment to HKAS 21 "Lack of Exchangeability" has **no material impact** on the Group's financial statements[11](index=11&type=chunk)[12](index=12&type=chunk) [Interim Condensed Consolidated Financial Statements](index=1&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8) [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=1&type=section&id=%E4%B8%AD%20%E6%9C%9F%20%E7%B0%A1%20%E6%98%8E%20%E7%B6%9C%20%E5%90%88%20%E6%90%8D%20%E7%9B%8A%20%E5%8F%8A%20%E5%85%B6%20%E4%BB%96%20%E5%85%A8%20%E9%9D%A2%20%E6%94%B6%20%E7%9B%8A%20%E8%A1%A8) For the six months ended June 30, 2025, revenue decreased by 30.3% to HK$96.6 million, gross profit fell to HK$25.7 million, and profit attributable to owners was HK$2.4 million, with basic earnings per share of 0.61 HK cents Key Data from the Consolidated Statement of Profit or Loss and Other Comprehensive Income | Metric | For the six months ended June 30, 2025 (HK$'000) | For the six months ended June 30, 2024 (HK$'000) | | :--- | :--- | :--- | | Revenue | 96,600 | 138,473 | | Cost of sales | (70,888) | (90,708) | | Gross profit | 25,712 | 47,765 | | Other income and gains, net | 8,128 | 4,338 | | Selling and distribution expenses | (16,529) | (17,899) | | Administrative expenses | (19,503) | (19,976) | | Reversal of/(impairment losses) on financial assets, net | 14,620 | (6,625) | | Other expenses | – | (3,450) | | Finance costs | (333) | (300) | | Profit before tax | 12,095 | 3,853 | | Income tax expense | (9,673) | (984) | | Profit for the period | 2,422 | 2,869 | | Profit attributable to owners of the parent | 2,422 | 2,862 | | Profit attributable to non-controlling interests | – | 7 | | Total comprehensive income for the period | 2,376 | 2,296 | | Basic and diluted earnings per share attributable to ordinary equity holders of the parent | 0.61 HK cents | 0.72 HK cents | [Consolidated Statement of Financial Position](index=3&type=section&id=%E4%B8%AD%20%E6%9C%9F%20%E7%B0%A1%20%E6%98%8E%20%E7%B6%9C%20%E5%90%88%20%E8%B2%A1%20%E5%8B%99%20%E7%8B%80%20%E6%B3%81%20%E8%A1%A8) As of June 30, 2025, total non-current assets decreased to HK$16.9 million, total current assets slightly increased to HK$378.5 million, and total current liabilities rose to HK$77.5 million, resulting in a slight decline in net assets to HK$313.7 million Key Data from the Consolidated Statement of Financial Position | Metric | As at June 30, 2025 (HK$'000) | As at December 31, 2024 (HK$'000) | | :--- | :--- | :--- | | **Non-current assets** | | | | Property, plant and equipment | 5,275 | 5,382 | | Right-of-use assets | 9,639 | 10,804 | | Intangible assets | 97 | 149 | | Deferred tax assets | 1,918 | 10,795 | | **Total non-current assets** | **16,929** | **27,130** | | **Current assets** | | | | Inventories | 60,514 | 70,473 | | Trade receivables and bills receivable | 46,605 | 38,586 | | Prepayments, deposits and other receivables | 10,886 | 10,006 | | Time deposits with original maturity of more than three months | 54,600 | – | | Cash and cash equivalents | 205,893 | 252,463 | | **Total current assets** | **378,498** | **371,528** | | **Current liabilities** | | | | Trade payables | 14,633 | 14,329 | | Other payables and accruals | 31,306 | 18,327 | | Contract liabilities | 19,170 | 21,765 | | Lease liabilities | 5,785 | 5,007 | | Tax payable | 6,636 | 5,637 | | **Total current liabilities** | **77,530** | **65,065** | | **Net current assets** | **300,968** | **306,463** | | **Total assets less current liabilities** | **317,897** | **333,593** | | **Non-current liabilities** | | | | Lease liabilities | 4,157 | 6,026 | | Deferred tax liabilities | 11 | 14 | | **Total non-current liabilities** | **4,168** | **6,040** | | **Net assets** | **313,729** | **327,553** | | **Total equity** | **313,729** | **327,553** | [Notes to the Interim Condensed Consolidated Financial Statements](index=5&type=section&id=%E4%B8%AD%20%E6%9C%9F%20%E7%B0%A1%20%E6%98%8E%20%E7%B6%9C%20%E5%90%88%20%E8%B2%A1%20%E5%8B%99%20%E5%A0%B1%20%E8%A1%A8%20%E9%99%84%20%E8%A8%BB) [1. Corporate and Group Information](index=5&type=section&id=1.%20%E5%85%AC%20%E5%8F%B8%20%E5%8F%8A%20%E9%9B%86%20%E5%9C%98%20%E8%B3%87%20%E6%96%99) The Group primarily provides thermal imaging, gyro-stabilized imaging, and general aviation products and services, with its ultimate holding company being Peiport Alpha Limited, incorporated in the BVI - The Company is an investment holding company, with principal businesses including thermal imaging, gyro-stabilized imaging, and general aviation products and services[7](index=7&type=chunk) - The Group's ultimate holding company is **Peiport Alpha Limited**, incorporated in the British Virgin Islands[8](index=8&type=chunk) [2.1 Basis of Preparation and Accounting Policies](index=5&type=section&id=2.1%20%E7%B7%A8%20%E8%A3%BD%20%E5%9F%BA%20%E6%BA%96) These interim financial statements are prepared under HKAS 34 and Listing Rules Appendix D2 on a historical cost basis in HKD, with no material impact from newly adopted amended HKFRSs - Basis of Preparation: In accordance with Hong Kong Accounting Standard 34 issued by the HKICPA and Appendix D2 of the Securities Listing Rules[9](index=9&type=chunk) - Accounting Policies: Consistent with the annual consolidated financial statements for the year ended December 31, 2024, except for the adoption of amended HKFRSs this period[11](index=11&type=chunk) - The amendment to HKAS 21 "Lack of Exchangeability" has **no material impact** on the Group's unaudited interim condensed consolidated financial statements[12](index=12&type=chunk) [3. Operating Segment Information](index=6&type=section&id=3.%20%E7%B6%93%20%E7%87%9F%20%E5%88%86%20%E9%83%A8%20%E8%B3%87%20%E6%96%99) The Group operates in thermal imaging, gyro-stabilized imaging, and general aviation, but does not present segment information due to resource integration; revenue from Mainland China, Hong Kong & Macau, and overseas all declined - The Group is principally engaged in thermal imaging products and services, gyro-stabilized imaging products and services, and general aviation products and services[13](index=13&type=chunk) - No operating segment information is presented due to resource integration and the absence of discrete operating segment data[13](index=13&type=chunk) [Geographical Information](index=6&type=section&id=%E5%9C%B0%20%E5%8D%80%20%E8%B3%87%20%E6%96%99) For the six months ended June 30, 2025, revenue from Mainland China was HK$83.2 million, Hong Kong & Macau was HK$11.9 million, and overseas was HK$1.5 million, all showing a year-on-year decline Revenue from External Customers (by location) | Region | For the six months ended June 30, 2025 (HK$'000) | For the six months ended June 30, 2024 (HK$'000) | | :--- | :--- | :--- | | Mainland China | 83,227 | 91,632 | | Hong Kong and Macau | 11,913 | 44,269 | | Overseas | 1,460 | 2,572 | | **Total** | **96,600** | **138,473** | Non-current Assets (by location) | Region | As at June 30, 2025 (HK$'000) | As at December 31, 2024 (HK$'000) | | :--- | :--- | :--- | | Mainland China | 8,520 | 8,170 | | Hong Kong | 6,491 | 8,165 | | **Total** | **15,011** | **16,335** | [Information about Major Customers](index=7&type=section&id=%E4%B8%BB%20%E8%A6%81%20%E5%AE%A2%20%E6%88%B6%20%E8%B3%87%20%E6%96%99) During the period, Customer A and Customer B became major customers with revenues of HK$32.8 million and HK$28.4 million respectively, while prior-period major customer C was not disclosed this period Revenue from Major Customers | Customer | For the six months ended June 30, 2025 (HK$'000) | For the six months ended June 30, 2024 (HK$'000) | | :--- | :--- | :--- | | Customer A | 32,794 | 14,648 | | Customer B | 28,425 | N/A* | | Customer C | N/A* | 15,923 | *N/A indicates that the revenue did not individually account for 10% or more of the Group's revenue [4. Revenue, Other Income and Gains, Net](index=7&type=section&id=4.%20%E6%94%B6%20%E7%9B%8A%E3%80%81%E5%85%B6%20%E4%BB%96%20%E6%94%B6%20%E5%85%A5%20%E5%8F%8A%20%E6%94%B6%20%E7%9B%8A%20%E6%B7%A8%20%E9%A1%8D) Total revenue decreased by 30.3% to HK$96.6 million, driven by a 90.8% drop in gyro-stabilized imaging revenue, while other income and gains rose 84.1% to HK$8.1 million due to foreign exchange gains Revenue Analysis | Business Segment | For the six months ended June 30, 2025 (HK$'000) | For the six months ended June 30, 2024 (HK$'000) | | :--- | :--- | :--- | | **Thermal imaging products and services** | | | | — Sales of goods | 18,295 | 23,328 | | — Provision of repair services | 5,821 | 5,390 | | **Subtotal** | **24,116** | **28,718** | | **Gyro-stabilized imaging products and services** | | | | — Sales of goods | – | 26,806 | | — Provision of repair services | 3,616 | 12,220 | | **Subtotal** | **3,616** | **39,026** | | **General aviation products and services** | | | | — Sales of goods | 68,231 | 68,984 | | — Provision of repair services | 637 | 321 | | **Subtotal** | **68,868** | **69,305** | | Others | – | 1,424 | | **Total** | **96,600** | **138,473** | Other Income and Gains, Net | Item | For the six months ended June 30, 2025 (HK$'000) | For the six months ended June 30, 2024 (HK$'000) | | :--- | :--- | :--- | | Bank interest income | 3,215 | 4,100 | | Government grants | 48 | 44 | | Net foreign exchange differences | 4,731 | – | | Others | 134 | 194 | | **Total** | **8,128** | **4,338** | - Revenue from sales of goods is recognized at a point in time, while revenue from repair services is recognized over time[17](index=17&type=chunk) [5. Profit Before Tax](index=8&type=section&id=5.%20%E9%99%A4%20%E7%A8%85%20%E5%89%8D%20%E6%BA%A2%20%E5%88%A9) Profit before tax was HK$12.1 million, positively impacted by a net reversal of impairment loss on financial assets of HK$14.6 million and net exchange gains of HK$4.7 million, offsetting lower inventory and employee benefit costs Adjustments to Profit Before Tax | Item | For the six months ended June 30, 2025 (HK$'000) | For the six months ended June 30, 2024 (HK$'000) | | :--- | :--- | :--- | | Cost of inventories sold | 65,961 | 83,948 | | Cost of services provided | 4,927 | 6,760 | | Depreciation of property, plant and equipment | 464 | 938 | | Depreciation of right-of-use assets | 3,246 | 3,485 | | Amortisation of intangible assets | 56 | 143 | | Research and development costs | 6,239 | 7,537 | | Reversal of/(impairment losses) on financial assets, net | (14,620) | 6,625 | | Net provision for inventories | 2,231 | 1,187 | | Lease payments for lease liabilities | 72 | – | | Total employee benefit expense | 26,256 | 30,468 | | Net foreign exchange differences | (4,731) | 3,428 | [6. Income Tax](index=9&type=section&id=6.%20%E6%89%80%20%E5%BE%97%20%E7%A8%85) Income tax expense surged to HK$9.7 million due to higher pre-tax profit and an increased effective tax rate, with Hong Kong profits tax at 16.5% (8.25% on the first HK$2 million) and Mainland China at 25% (20% for small enterprises) - Hong Kong profits tax rate: **16.5%**, with one subsidiary taxed at **8.25%** on the first HK$2,000,000 of assessable profits[20](index=20&type=chunk) - Mainland China corporate income tax rate: **25%**, with certain subsidiaries qualifying as small and micro enterprises taxed at a lower rate of **20%** on taxable income up to RMB3,000,000[21](index=21&type=chunk) Income Tax Expense | Item | For the six months ended June 30, 2025 (HK$'000) | For the six months ended June 30, 2024 (HK$'000) | | :--- | :--- | :--- | | Current | 866 | 3,439 | | Deferred | 8,807 | (2,455) | | **Total tax expense for the period** | **9,673** | **984** | [7. Dividends](index=9&type=section&id=7.%20%E8%82%A1%20%E6%81%AF) The Board declared an interim dividend of 5.40 HK cents per ordinary share for the six months ended June 30, 2025, totaling approximately HK$21.6 million, whereas no dividend was declared in the prior period - The Board declared an interim dividend of **5.40 HK cents** per ordinary share for the six months ended June 30, 2025[24](index=24&type=chunk) - The total interim dividend amounts to approximately **HK$21,600,000**, compared to no dividend in the same period of 2024[24](index=24&type=chunk) [8. Earnings Per Share Attributable to Ordinary Equity Holders of the Parent](index=9&type=section&id=8.%20%E6%AF%8D%20%E5%85%AC%20%E5%8F%B8%20%E6%99%AE%20%E9%80%9A%20%E6%AC%8A%20%E7%9B%8A%20%E6%8C%81%20%E6%9C%89%20%E4%BA%BA%20%E6%87%89%20%E4%BD%94%20%E6%AF%8F%20%E8%82%A1%20%E7%9B%88%20%E5%88%A9) For the six months ended June 30, 2025, basic earnings per share decreased to 0.61 HK cents from 0.72 HK cents in the prior period, based on a profit of HK$2.422 million and 400 million weighted average shares Earnings Per Share | Metric | For the six months ended June 30, 2025 | For the six months ended June 30, 2024 | | :--- | :--- | :--- | | Profit attributable to ordinary equity holders of the parent | HK$2,422,000 | HK$2,862,000 | | Weighted average number of ordinary shares in issue | 400,000,000 shares | 400,000,000 shares | | **Basic earnings per share** | **0.61 HK cents** | **0.72 HK cents** | - The Group had no potential dilutive ordinary shares in issue during the current or prior period, thus basic and diluted earnings per share are the same[26](index=26&type=chunk) [9. Trade Receivables and Bills Receivable](index=10&type=section&id=9.%20%E8%B2%BF%20%E6%98%93%20%E6%87%89%20%E6%94%B6%20%E6%AC%BE%20%E9%A0%85%20%E5%8F%8A%20%E6%87%89%20%E6%94%B6%20%E7%A5%A8%20%E6%93%9A) As of June 30, 2025, trade and bills receivable totaled HK$46.6 million, an increase from HK$38.6 million at year-end 2024, mainly due to a significant rise in bills receivable, with credit periods typically ranging from one to three months Trade Receivables and Bills Receivable | Item | As at June 30, 2025 (HK$'000) | As at December 31, 2024 (HK$'000) | | :--- | :--- | :--- | | Trade receivables | 27,869 | 53,174 | | Bills receivable | 24,517 | 5,588 | | Subtotal | 52,386 | 58,762 | | Impairment | (5,781) | (20,176) | | **Total** | **46,605** | **38,586** | - The Group's trading terms with its customers are mainly on credit, with a credit period generally of one to three months[27](index=27&type=chunk) Ageing Analysis of Trade Receivables and Bills Receivable | Ageing | As at June 30, 2025 (HK$'000) | As at December 31, 2024 (HK$'000) | | :--- | :--- | :--- | | Less than three months | 17,358 | 18,561 | | Three to six months | 20,917 | 3,830 | | Six to twelve months | 4,202 | 1,839 | | Over one year | 4,128 | 14,356 | | **Total** | **46,605** | **38,586** | [10. Trade Payables](index=11&type=section&id=10.%20%E8%B2%BF%20%E6%98%93%20%E6%87%89%20%E4%BB%98%20%E6%AC%BE%20%E9%A0%85) As of June 30, 2025, trade payables totaled HK$14.6 million, remaining stable compared to HK$14.3 million at year-end 2024; these payables are non-interest-bearing and are normally settled within 30 to 90 days Ageing Analysis of Trade Payables | Ageing | As at June 30, 2025 (HK$'000) | As at December 31, 2024 (HK$'000) | | :--- | :--- | :--- | | Within one month | 3,679 | 787 | | One to three months | 732 | 2,798 | | Over three months | 10,222 | 10,744 | | **Total** | **14,633** | **14,329** | - Trade payables are non-interest-bearing and are normally settled on 30 to 90-day terms[29](index=29&type=chunk) [11. Share Capital](index=11&type=section&id=11.%20%E8%82%A1%20%E6%9C%AC) As of June 30, 2025, the Company's issued and fully paid share capital remained unchanged from year-end 2024, consisting of 400,000,000 ordinary shares of HK$0.01 each, totaling HK$4.0 million Share Capital Composition | Item | As at June 30, 2025 (HK$'000) | As at December 31, 2024 (HK$'000) | | :--- | :--- | :--- | | Issued and fully paid ordinary shares (400,000,000 shares of HK$0.01 each) | 4,000 | 4,000 | [12. Approval of the Unaudited Interim Condensed Consolidated Financial Statements](index=11&type=section&id=12.%20%E6%89%B9%20%E5%87%86%20%E6%9C%AA%20%E7%B6%93%20%E5%AF%A9%20%E6%A0%B8%20%E4%B8%AD%20%E6%9C%9F%20%E7%B0%A1%20%E6%98%8E%20%E7%B6%9C%20%E5%90%88%20%E8%B2%A1%20%E5%8B%99%20%E5%A0%B1%20%E8%A1%A8) The unaudited interim condensed consolidated financial statements were approved and authorised for issue by the Board of Directors on August 26, 2025 - The unaudited interim condensed consolidated financial statements were approved and authorised for issue by the Board of Directors on **August 26, 2025**[31](index=31&type=chunk) [Management Discussion and Analysis](index=12&type=section&id=%E7%AE%A1%20%E7%90%86%20%E5%B1%A4%20%E8%A8%8E%20%E8%AB%96%20%E5%8F%8A%20%E5%88%86%20%E6%9E%90) [Business Review](index=12&type=section&id=%E6%A5%AD%20%E5%8B%99%20%E5%9B%9E%20%E9%A1%A7) In H1 2025, the Group faced macroeconomic challenges, resulting in a 30.3% revenue decline to HK$96.6 million and a 17.2% drop in net profit attributable to owners to HK$2.4 million, with a significant downturn in the gyro-stabilized imaging segment - The Group's performance in the first half of 2025 was challenged by macroeconomic factors including high interest rates, trade tariffs, energy prices, and geopolitical conflicts[32](index=32&type=chunk) H1 Performance Overview | Metric | For the six months ended June 30, 2025 | Y-o-Y Change | | :--- | :--- | :--- | | Revenue | Approx. HK$96.6 million | Decreased by approx. 30.3% | | Net profit attributable to owners of the parent | Approx. HK$2.4 million | Decreased by approx. 17.2% | [Business Segment Performance](index=12&type=section&id=%E6%A5%AD%20%E5%8B%99%20%E6%9D%BF%20%E5%A1%8A%20%E8%A1%A8%20%E7%8F%BE) Revenue from thermal imaging products and services decreased by 16.0%, gyro-stabilized imaging products and services plummeted by 90.8%, while general aviation products and services remained relatively stable with a slight 0.7% decline [(1) Thermal Imaging Products and Services](index=12&type=section&id=(1)%20%E7%86%B1%20%E6%88%90%20%E5%83%8F%20%E7%94%A2%20%E5%93%81%20%E5%8F%8A%20%E6%8F%90%20%E4%BE%9B%20%E6%9C%8D%20%E5%8B%99) This segment's revenue decreased by approximately 16.0% to HK$24.2 million, primarily due to reduced sales of thermal imaging products to existing customers, and it accounted for 25.1% of total Group revenue - Revenue decreased by approximately **16.0%** to approximately **HK$24.2 million**, mainly due to a decrease in revenue from the sale of thermal imaging products to existing customers[33](index=33&type=chunk) - This business segment accounted for approximately **25.1%** of the Group's revenue (prior period: 20.8%)[33](index=33&type=chunk) [(2) Gyro-stabilized Imaging Products and Services](index=13&type=section&id=(2)%20%E8%87%AA%20%E7%A9%A9%20%E5%AE%9A%20%E6%88%90%20%E5%83%8F%20%E7%94%A2%20%E5%93%81%20%E5%8F%8A%20%E6%8F%90%20%E4%BE%9B%20%E6%9C%8D%20%E5%8B%99) This segment's revenue plummeted by approximately 90.8% year-on-year to HK$3.6 million, mainly due to decreased sales of vessel-mounted gyro-stabilized imaging products, accounting for 3.7% of total Group revenue - Revenue significantly decreased year-on-year by approximately **90.8%** to approximately **HK$3.6 million**, mainly due to a decrease in sales of vessel-mounted gyro-stabilized imaging products[34](index=34&type=chunk) - This business segment accounted for approximately **3.7%** of the Group's revenue (prior period: 28.2%)[34](index=34&type=chunk) [(3) General Aviation Products and Services](index=13&type=section&id=(3)%20%E9%80%9A%20%E7%94%A8%20%E8%88%AA%20%E7%A9%BA%20%E7%94%A2%20%E5%93%81%20%E5%8F%8A%20%E6%8F%90%20%E4%BE%9B%20%E6%9C%8D%20%E5%8B%99) This segment's revenue remained relatively stable, decreasing by only 0.7% year-on-year to HK$68.8 million, and became the primary revenue source, contributing 71.2% to the Group's total revenue - Revenue remained relatively stable, decreasing by approximately **0.7%** year-on-year to approximately **HK$68.8 million**[36](index=36&type=chunk) - This business segment accounted for approximately **71.2%** of the Group's revenue (prior period: 50.0%)[36](index=36&type=chunk) [Prospects](index=14&type=section&id=%E5%89%8D%20%E6%99%AF) Amidst an uncertain macroeconomic environment with slowing global growth, high inflation, and high interest rates, the Group remains cautiously optimistic, focusing on core competencies, brand management, and expanding its market share in East and Southeast Asia through a new Malaysian subsidiary - The global economic outlook remains unpredictable, facing risks from US policy shifts, trade tensions, and geopolitical conflicts[37](index=37&type=chunk) - The World Bank forecasts global economic growth to slow to **2.3%** in 2025, a 0.4% downward revision from its January forecast[37](index=37&type=chunk) - The Group will continue to strengthen its foundation and core competencies, and develop brand management capabilities for its core businesses[38](index=38&type=chunk) - The Group plans to enhance its market presence and expand its sales network in East and Southeast Asia through its newly established subsidiary in Malaysia[38](index=38&type=chunk) [Financial Review](index=14&type=section&id=%E8%B2%A1%20%E5%8B%99%20%E5%9B%9E%20%E9%A1%A7) Total revenue decreased by 30.3%, with declines in both gross profit and gross margin, while other income grew significantly due to exchange gains; despite a sharp rise in income tax expense, profit attributable to owners remained relatively stable [Revenue](index=14&type=section&id=%E6%94%B6%20%E7%9B%8A) The Group's total revenue decreased by 30.3% year-on-year to HK$96.6 million, driven by a 16.0% drop in thermal imaging revenue and a 90.8% plunge in gyro-stabilized imaging revenue, while general aviation revenue remained stable - Total revenue decreased by approximately **30.3%** from approximately HK$138.5 million to approximately **HK$96.6 million**[39](index=39&type=chunk) - Revenue from thermal imaging products and services decreased by **16.0%** to approximately **HK$24.2 million**, mainly due to reduced demand for infrared imagers[39](index=39&type=chunk) - Revenue from gyro-stabilized imaging products and services decreased by **90.8%** to approximately **HK$3.6 million**, mainly due to reduced demand for vessel-mounted gyro-stabilized imaging products[40](index=40&type=chunk) - Revenue from general aviation products and services remained relatively stable at approximately **HK$68.8 million**[41](index=41&type=chunk) [Gross Profit and Gross Profit Margin](index=15&type=section&id=%E6%AF%9B%20%E5%88%A9%20%E5%8F%8A%20%E6%AF%9B%20%E5%88%A9%20%E7%8E%87) The Group's gross profit fell to HK$25.7 million, and the gross profit margin decreased by 7.9 percentage points to 26.6%, with margins for thermal imaging and general aviation declining due to higher costs, while the gyro-stabilized imaging margin improved - Gross profit decreased from approximately HK$47.8 million to approximately **HK$25.7 million**[42](index=42&type=chunk) - Gross profit margin decreased by approximately **7.9 percentage points** from approximately 34.5% to approximately **26.6%**[42](index=42&type=chunk) [(1) Gross Profit Margin of Thermal Imaging Products and Services](index=15&type=section&id=(1)%20%E7%86%B1%20%E6%88%90%20%E5%83%8F%20%E7%94%A2%20%E5%93%81%20%E5%8F%8A%20%E6%9C%8D%20%E5%8B%99%20%E7%9A%84%20%E6%AF%9B%20%E5%88%A9%20%E7%8E%87) The gross profit margin for thermal imaging products and services decreased from 29.5% to 23.6%, primarily due to an increase in the average cost of SF6 gas imagers and infrared imagers - The gross profit margin decreased from approximately **29.5%** to approximately **23.6%**, mainly due to an increase in the average cost of SF6 gas imagers and infrared imagers[43](index=43&type=chunk) [(2) Gross Profit Margin of Gyro-stabilized Imaging Products and Services](index=15&type=section&id=(2)%20%E8%87%AA%20%E7%A9%A9%20%E5%AE%9A%20%E6%88%90%20%E5%83%8F%20%E7%94%A2%20%E5%93%81%20%E5%8F%8A%20%E6%9C%8D%20%E5%8B%99%20%E7%9A%84%20%E6%AF%9B%20%E5%88%A9%20%E7%8E%87) The gross profit margin for gyro-stabilized imaging products and services increased from 44.1% to 50.0%, mainly due to reduced sales of lower-margin vessel-mounted gyro-stabilized imaging products to existing customers - The gross profit margin increased from approximately **44.1%** to approximately **50.0%**, mainly due to a decrease in sales of relatively lower-margin vessel-mounted gyro-stabilized imaging products to existing customers[44](index=44&type=chunk) [(3) Gross Profit Margin of General Aviation Products and Services](index=15&type=section&id=(3)%20%E9%80%9A%20%E7%94%A8%20%E8%88%AA%20%E7%A9%BA%20%E7%94%A2%20%E5%93%81%20%E5%8F%8A%20%E6%9C%8D%20%E5%8B%99%20%E7%9A%84%20%E6%AF%9B%20%E5%88%A9%20%E7%8E%87) The gross profit margin for general aviation products and services decreased from 31.2% to 26.5%, primarily due to an increase in the average cost of four-stroke engine products and engine parts - The gross profit margin decreased from approximately **31.2%** to approximately **26.5%**, mainly due to an increase in the average cost of four-stroke engine products and engine parts[45](index=45&type=chunk) [Other Income and Gains, Net](index=16&type=section&id=%E5%85%B6%20%E4%BB%96%20%E6%94%B6%20%E5%85%A5%20%E5%8F%8A%20%E6%94%B6%20%E7%9B%8A%20%E6%B7%A8%20%E9%A1%8D) Other income and gains increased by 84.1% to HK$8.1 million, primarily due to the recognition of foreign exchange gains during the period - Other income and gains increased by approximately **84.1%** from approximately HK$4.4 million to approximately **HK$8.1 million**, mainly due to the recognition of foreign exchange gains during the period[46](index=46&type=chunk) [Selling and Distribution Expenses](index=16&type=section&id=%E9%8A%B7%20%E5%94%AE%20%E5%8F%8A%20%E5%88%86%20%E9%8A%B7%20%E9%96%8B%20%E6%94%AF) Selling and distribution expenses decreased by 7.8% to HK$16.5 million, mainly due to lower staff costs resulting from reduced salaries and commissions - Selling and distribution expenses decreased by approximately **7.8%** to approximately **HK$16.5 million**, mainly due to lower staff costs from reduced salaries and commissions[47](index=47&type=chunk) [Administrative Expenses](index=16&type=section&id=%E8%A1%8C%20%E6%94%BF%20%E9%96%8B%20%E6%94%AF) Administrative expenses remained relatively stable at HK$19.5 million - Administrative expenses remained relatively stable at approximately **HK$19.5 million**[48](index=48&type=chunk) [Other Expenses](index=16&type=section&id=%E5%85%B6%20%E4%BB%96%20%E9%96%8B%20%E6%94%AF) Other expenses decreased by approximately HK$3.5 million, primarily because there were no foreign exchange losses in the current period, compared to a loss of approximately HK$3.4 million in the prior period - Other expenses decreased by approximately **HK$3.5 million**, mainly due to the absence of foreign exchange losses in the current period (compared to a loss of approximately HK$3.4 million in the prior period)[49](index=49&type=chunk) [Income Tax Expense](index=16&type=section&id=%E6%89%80%20%E5%BE%97%20%E7%A8%85%20%E9%96%8B%20%E6%94%AF) Income tax expense increased significantly by 870.0% to HK$9.7 million, mainly due to higher profit before tax and an increase in the effective tax rate from 25.5% to 80.0% - Income tax expense increased by approximately **870.0%** to approximately **HK$9.7 million**[50](index=50&type=chunk) - The increase was due to higher profit before tax and a rise in the effective tax rate from approximately **25.5%** to approximately **80.0%**[50](index=50&type=chunk) [Profit for the Period Attributable to Owners of the Parent](index=16&type=section&id=%E6%AF%8D%20%E5%85%AC%20%E5%8F%B8%20%E6%93%81%20%E6%9C%89%20%E4%BA%BA%20%E6%87%89%20%E4%BD%94%20%E6%9C%9F%20%E5%85%A7%20%E6%BA%A2%20%E5%88%A9) Profit for the period attributable to owners of the parent remained relatively stable at HK$2.4 million - Profit for the period attributable to owners of the parent remained relatively stable at approximately **HK$2.4 million** (prior period: HK$2.9 million)[51](index=51&type=chunk) [Liquidity and Financial Resources](index=17&type=section&id=%E6%B5%81%20%E5%8B%95%20%E8%B3%87%20%E9%87%91%20%E5%8F%8A%20%E8%B2%A1%20%E5%8B%99%20%E8%B3%87%20%E6%BA%90) The Group maintained a healthy liquidity position with working capital funded by internal resources, experiencing a slight decrease in net current assets and cash, while operating cash flow turned positive and investing cash outflow increased - The Group maintained a **healthy liquidity position**, with working capital primarily funded by internal resources[52](index=52&type=chunk) - Net current assets were approximately **HK$301.0 million** (December 31, 2024: HK$306.5 million)[52](index=52&type=chunk) - Cash and cash equivalents were approximately **HK$205.9 million**, a decrease of approximately HK$46.6 million from year-end 2024, and were mainly denominated in USD[52](index=52&type=chunk) - Net cash from operating activities was approximately **HK$10.0 million** (prior period: net cash used of approx. HK$16.3 million), mainly from decreases in inventories and trade receivables[53](index=53&type=chunk) - Net cash used in investing activities was approximately **HK$54.9 million** (prior period: net cash generated of approx. HK$38.9 million), mainly for investment in time deposits[53](index=53&type=chunk) - Net cash used in financing activities was approximately **HK$3.2 million**, mainly for the principal portion of lease payments[53](index=53&type=chunk) [Contingent Liabilities](index=17&type=section&id=%E6%88%96%20%E7%84%B6%20%E8%B2%A0%20%E5%82%B5) As of June 30, 2025, the Group had no significant contingent liabilities - As at June 30, 2025, the Group had **no significant contingent liabilities**[54](index=54&type=chunk) [Capital Structure](index=17&type=section&id=%E8%B3%87%20%E6%9C%AC%20%E6%9E%B6%20%E6%A7%8B) There were no significant changes in the Company's capital structure during the six months ended June 30, 2025 - During the six months ended June 30, 2025, there were **no significant changes** in the Company's capital structure[55](index=55&type=chunk) [Foreign Exchange Risk](index=17&type=section&id=%E5%A4%96%20%E5%8C%AF%20%E9%A2%A8%20%E9%9A%AA) The Group faces transactional currency risk from business transactions and costs denominated in USD and EUR, as well as from assets and liabilities denominated in USD, and closely monitors exchange rate movements to manage this risk - The Group is exposed to transactional currency risk primarily from business transactions and costs of sales denominated in **USD and EUR**[56](index=56&type=chunk) - Foreign currency risk also arises from assets and liabilities denominated in **USD**[56](index=56&type=chunk) - The Group closely monitors exchange rate movements to manage its foreign currency risk[56](index=56&type=chunk) [Pledge of Assets](index=18&type=section&id=%E8%B3%87%20%E7%94%A2%20%E6%8A%B5%20%E6%8A%BC) As of June 30, 2025, the Group had not pledged any of its assets - As at June 30, 2025, the Group had **not pledged any of its assets**[57](index=57&type=chunk) [Gearing Ratio](index=18&type=section&id=%E8%B3%87%20%E7%94%A2%20%E8%B2%A0%20%E5%82%B5%20%E6%AF%94%20%E7%8E%87) The gearing ratio is not applicable to the Group as it had no bank borrowings - As the Group had **no bank borrowings**, the gearing ratio is not applicable[58](index=58&type=chunk) [Reorganisation and Material Investments](index=18&type=section&id=%E9%87%8D%20%E7%B5%84%20%E5%8F%8A%20%E9%87%8D%20%E5%A4%A7%20%E6%8A%95%20%E8%B3%87) During the period, the Group did not have any reorganisation or material investments - During the period, the Group had **no reorganisation or material investments**[59](index=59&type=chunk) [Employees and Remuneration Policies](index=18&type=section&id=%E5%83%B1%20%E5%93%A1%20%E5%8F%8A%20%E8%96%AA%20%E9%85%AC%20%E6%94%BF%20%E7%AD%96) As of June 30, 2025, the Group had 140 employees with total staff costs of approximately HK$26.3 million, and its remuneration policy aligns with relevant laws, market conditions, and employee performance - As at June 30, 2025, the Group had a total of **140 employees** (December 31, 2024: 142)[60](index=60&type=chunk) - During the period, the Group's total staff costs (excluding directors' and chief executive's remuneration) were approximately **HK$26.3 million** (prior period: HK$30.5 million)[60](index=60&type=chunk) - The remuneration policy complies with relevant laws, market conditions, and employee performance[60](index=60&type=chunk) [Other Information](index=18&type=section&id=%E5%85%B6%20%E4%BB%96%20%E8%B3%87%20%E6%96%99) [Compliance with the Corporate Governance Code](index=18&type=section&id=%E9%81%B5%20%E5%AE%88%20%E4%BC%81%20%E6%A5%AD%20%E7%AE%A1%20%E6%B2%BB%20%E5%AE%88%20%E5%89%87) The Company has complied with all applicable code provisions of the Corporate Governance Code as set out in Appendix C1 to the Listing Rules of The Stock Exchange of Hong Kong Limited for the six months ended June 30, 2025 - The Company has complied with all applicable code provisions of the Corporate Governance Code in Appendix C1 of the Listing Rules throughout the period[61](index=61&type=chunk) [Model Code for Securities Transactions](index=19&type=section&id=%E8%AD%89%20%E5%88%B8%20%E4%BA%A4%20%E6%98%93%20%E7%9A%84%20%E6%A8%99%20%E6%BA%96%20%E5%AE%88%20%E5%89%87) The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 to the Listing Rules, and all Directors have confirmed their compliance with the code during the period - The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 of the Listing Rules[62](index=62&type=chunk) - All Directors have confirmed their compliance with the required standards set out in the Model Code throughout the period[62](index=62&type=chunk) [Audit Committee and Review of Interim Results](index=19&type=section&id=%E5%AF%A9%20%E6%A0%B8%20%E5%A7%94%20%E5%93%A1%20%E6%9C%83%20%E5%8F%8A%20%E5%AF%A9%20%E9%96%B1%20%E4%B8%AD%20%E6%9C%9F%20%E6%A5%AD%20%E7%B8%BE) The Audit Committee has reviewed the Group's unaudited interim condensed consolidated financial statements for the six months ended June 30, 2025, and considers them to be prepared in accordance with appropriate accounting policies and applicable Listing Rules with adequate disclosure - The Audit Committee comprises three independent non-executive Directors, with Ms. Yang Xiaofu as the chairlady[63](index=63&type=chunk) - The Audit Committee has reviewed this interim results announcement and considers it to be prepared in accordance with appropriate accounting policies and applicable Listing Rules, with adequate disclosure made[63](index=63&type=chunk) [Interim Dividend](index=19&type=section&id=%E4%B8%AD%20%E6%9C%9F%20%E8%82%A1%20%E6%81%AF) The Board has resolved to declare an interim dividend of 5.40 HK cents per share, totaling approximately HK$21.6 million, payable on or before September 26, 2025, to shareholders on the register as of September 17, 2025 - The Board has resolved to declare an interim dividend of **5.40 HK cents** per share (2024 interim: Nil), totaling approximately **HK$21,600,000**[64](index=64&type=chunk) - The interim dividend is expected to be paid on or before **September 26, 2025**, with a record date of **September 17, 2025**[64](index=64&type=chunk) [Closure of Register of Members](index=19&type=section&id=%E6%9A%AB%20%E5%81%9C%20%E8%BE%A6%20%E7%90%86%20%E8%82%A1%20%E4%BB%BD%20%E9%81%8E%20%E6%88%B6%20%E7%99%BB%20%E8%A8%98%20%E6%89%8B%20%E7%BA%8C) To qualify for the interim dividend, the register of members will be closed from September 15 to September 17, 2025, and all transfer documents must be lodged by 4:00 p.m. on September 12, 2025 - The register of members will be closed from **Monday, September 15, 2025 to Wednesday, September 17, 2025**[65](index=65&type=chunk) - To qualify for the interim dividend, all transfer documents must be lodged with the Hong Kong share registrar no later than **4:00 p.m. on Friday, September 12, 2025**[65](index=65&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=20&type=section&id=%E8%B3%BC%20%E8%B2%B7%E3%80%81%E5%87%BA%20%E5%94%AE%20%E6%88%96%20%E8%B4%96%20%E5%9B%9E%20%E6%9C%AC%20%E5%85%AC%20%E5%8F%B8%20%E4%B8%8A%20%E5%B8%82%20%E8%AD%89%20%E5%88%B8) Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's 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[66](index=66&type=chunk) [Publication of Interim Results Announcement and Interim Report](index=20&type=section&id=%E5%88%8A%20%E7%99%BC%20%E4%B8%AD%20%E6%9C%9F%20%E6%A5%AD%20%E7%B8%BE%20%E5%85%AC%20%E5%91%8A%20%E5%8F%8A%20%E4%B8%AD%20%E6%9C%9F%20%E5%A0%B1%20%E5%91%8A) The interim results announcement for the six months ended June 30, 2025, is published on the websites of the HKEX and the Company, and the 2025 Interim Report will be dispatched to shareholders and made available online in due course - The interim results announcement is published on the HKEX website at www.hkexnews.hk and the Company's website at www.peiport.com[67](index=67&type=chunk) - The 2025 Interim Report containing all required information will be dispatched to shareholders and made available on the above websites in due course[67](index=67&type=chunk) [Appreciation](index=20&type=section&id=%E8%87%B4%20%E8%AC%9D) The Board expresses its sincere gratitude to the management, staff, shareholders, customers, suppliers, business partners, and other stakeholders - The Board expresses its sincere gratitude to the Group's management and staff for their hard work and dedication, and to shareholders, customers, suppliers, business partners, and other stakeholders for their continuous support[68](index=68&type=chunk)

[Company Information and Financial Highlights](index=1&type=section&id=I.%20Company%20Information%20and%20Financial%20Highlights) [Company Overview](index=1&type=section&id=I.A.%20Company%20Overview) China Yongda Automobile Services Holdings Limited and its subsidiaries primarily engage in automobile sales, after-sales services, operating leases, and distribution of automotive insurance and financial products in China - The Company was incorporated in the Cayman Islands, and its shares are listed on the Hong Kong Stock Exchange[2](index=2&type=chunk) - Principal businesses include automobile sales, after-sales services, automobile operating leases, and distribution of automotive insurance and financial products[29](index=29&type=chunk) [Financial Highlights](index=1&type=section&id=I.B.%20Financial%20Highlights) For H1 2025, the Group's revenue decreased by 12.8% to **RMB 27.072 billion**, with new car sales and adjusted net profit (non-IFRS) declining, while net cash from operating activities significantly improved by 66.9% H1 2025 Key Financial Highlights | Indicator | H1 2025 (RMB billion) | H1 2024 (RMB billion) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Revenue | 27.072 | 31.036 | -12.8% | | New Car Dealership Revenue | 18.777 | 22.911 | -18.0% | | Maintenance-Related Revenue | 4.660 | 4.654 | Largely Flat | | Used Car Transaction Volume (units) | 30,427 | 35,236 | -13.6% | | Total Selling, Administrative & Finance Costs | 2.382 | 2.568 | -7.3% | | Adjusted Net Profit (non-IFRS) | 0.054 | 0.101 | -46.3% | | Adjusted Net Profit Attributable to Owners (non-IFRS) | 0.063 | 0.111 | -43.8% | | Net Cash Generated from Operating Activities | 1.167 | 0.699 | +66.9% | | Net Gearing Ratio | 9.8% (2025/6/30) | 10.2% (2024/12/31) | -0.4 percentage points | - Inventory turnover days remained at **26.3 days**, a decrease of **0.4 days** compared to the same period last year[7](index=7&type=chunk) [Management Discussion and Analysis](index=2&type=section&id=II.%20Management%20Discussion%20and%20Analysis) [Market Review](index=2&type=section&id=II.A.%20Market%20Review) In H1 2025, China's automotive market maintained steady growth amid fierce competition, driven by a 10.8% increase in passenger vehicle sales and NEV penetration exceeding 50.2%, despite significant price pressure and an 11.4% average new car price reduction - Domestic passenger vehicle sales reached **10.902 million units** in H1 2025, a year-on-year increase of **10.8%**[5](index=5&type=chunk) - NEV penetration rate reached **50.2%**, an 8.4 percentage point year-on-year increase, with the monthly penetration rate exceeding **53.3%** for the first time in June[5](index=5&type=chunk) - Chinese brands' market share surpassed **64%**, a 7.5 percentage point year-on-year increase, with new forces like Xiaomi and HarmonyOS Smart Mobility rapidly emerging[5](index=5&type=chunk) - The average new car price decreased by **11.4%** in H1, leading to immense industry profitability pressure, with competition shifting from price to technology, ecosystem, and user experience[6](index=6&type=chunk) - Industry competition intensity is expected to ease marginally in H2, with the market likely to find a new equilibrium driven by "policy support + technological iteration + export upgrades"[8](index=8&type=chunk) [Business Review](index=3&type=section&id=II.B.%20Business%20Review) In H1 2025, the Group's revenue decreased by 12.8% and gross profit by 8.3% due to market competition and macroeconomic factors, alongside a **RMB 3.539 billion** non-cash, one-off asset impairment primarily targeting underperforming 4S store goodwill and long-term assets - H1 2025 revenue was **RMB 27.072 billion**, a year-on-year decrease of **12.8%**[9](index=9&type=chunk) - Gross profit was **RMB 2.370 billion**, a year-on-year decrease of **8.3%**, with new car sales and related services gross profit decreasing by **46.4%**[9](index=9&type=chunk) - Total selling expenses, administrative expenses, and finance costs amounted to **RMB 2.382 billion**, a year-on-year decrease of **7.3%**[9](index=9&type=chunk) - A non-cash, one-off asset impairment of approximately **RMB 3.539 billion** was recognized, primarily for goodwill, intangible assets, and long-term assets of underperforming 4S stores, impacting consolidated profit and total equity[10](index=10&type=chunk) - This impairment did not involve cash outflow, does not affect daily operations or business profitability, and large future impairments are not anticipated[10](index=10&type=chunk) - After deducting the impairment impact, adjusted net profit and adjusted net profit attributable to owners of the Company were **RMB 54 million** and **RMB 63 million**, respectively[11](index=11&type=chunk) - As of June 30, 2025, in-transit inventory balance decreased by **6.8%** to **RMB 4.986 billion**, with average inventory turnover days at **26.3 days**[12](index=12&type=chunk) - Net cash generated from operating activities was **RMB 1.167 billion**, a year-on-year increase of **66.9%**[12](index=12&type=chunk) - The asset-liability ratio was **59.5%**, largely flat compared to year-end 2024[12](index=12&type=chunk) [New Car Sales Business](index=4&type=section&id=II.B.1.%20New%20Car%20Sales%20Business) In H1 2025, new car sales volume decreased by 13.4% and related revenue by 14.4%, with gross margin falling to 1.03%, as the Group shifted its strategy from volume to balanced profitability, enhancing lead conversion and inventory management - New car sales volume was **72,501 units**, a year-on-year decrease of **13.4%**[13](index=13&type=chunk) - New car sales and related services revenue was **RMB 20.532 billion**, a year-on-year decrease of **14.4%**[13](index=13&type=chunk) - New car sales and related services gross margin was **1.03%**, a year-on-year decrease of **0.61 percentage points**[13](index=13&type=chunk) - Operating strategy adjusted to "balanced profitability," enhancing lead conversion through new media customer acquisition and process management[13](index=13&type=chunk) - New car turnover days remained at **26.4 days**, with a mandatory liquidation mechanism for new car inventory exceeding 60 days implemented[14](index=14&type=chunk) [New Energy Vehicle Business](index=4&type=section&id=II.B.2.%20New%20Energy%20Vehicle%20Business) In H1 2025, the NEV market maintained rapid growth, with independent NEV brand sales increasing by 49.0% to **10,312 units**, average selling price reaching **RMB 267,300**, and comprehensive gross margin above 4%, while after-sales revenue grew by 75.8% - Independent NEV brand sales volume was **10,312 units**, a year-on-year increase of **49.0%**[15](index=15&type=chunk) - Sales volume included **4,455 units** under dealership model and **5,857 units** under direct sales model[15](index=15&type=chunk) - Average new car selling price was **RMB 267,300**, with comprehensive gross margin per new car maintained above **4%**[15](index=15&type=chunk) - Nearly **six thousand** independent NEV brand retained orders lay a foundation for H2 growth[15](index=15&type=chunk) - After-sales business revenue was **RMB 215.59 million**, a year-on-year increase of **75.8%**[16](index=16&type=chunk) - Average single-vehicle output value was **RMB 3,447**, a year-on-year increase of **16.5%**[16](index=16&type=chunk) - Independent NEV brand after-sales customer base reached **72,281**, an increase of **25.9%** from year-end 2024[16](index=16&type=chunk) [After-Sales Services](index=5&type=section&id=II.B.3.%20After-Sales%20Services) In H1 2025, after-sales service revenue was **RMB 4.784 billion**, with maintenance revenue remaining stable and gross margin at 40.35%, while the parts and service absorption rate increased by 5.6 percentage points to 84.2% - After-sales service revenue was **RMB 4.784 billion**, of which maintenance revenue was **RMB 4.660 billion**, largely flat compared to the same period last year[17](index=17&type=chunk) - Maintenance business gross margin was **40.35%**, largely flat compared to the same period last year[17](index=17&type=chunk) - Parts and service absorption rate was **84.2%**, a year-on-year increase of **5.6 percentage points**[17](index=17&type=chunk) - User operations enhanced by launching sticky products, participating in NEV power battery maintenance equipment R&D, and developing customer resources from exited dealers[17](index=17&type=chunk) - Insurance business focused on strengthening renewal management, ensuring renewal volume and premium scale increase by over **5%** year-on-year[17](index=17&type=chunk) - Accident vehicle business improved operational quality through all-staff marketing, vehicle-related insurance products, and digital management, with paint and body repair volume increasing by **4.8%** year-on-year[18](index=18&type=chunk) - Inventory value of parts and supplies decreased by **6.8%** compared to year-end 2024[18](index=18&type=chunk) [Used Car Business](index=6&type=section&id=II.B.4.%20Used%20Car%20Business) In H1 2025, used car transaction volume reached **30,427 units** with revenue of **RMB 2.164 billion**, achieving a gross margin of 5.21% and improved inventory turnover, as the Group actively leveraged subsidies, new retail models, and NEV used car market expansion - Used car transaction volume was **30,427 units**, with used car revenue of **RMB 2.164 billion**[19](index=19&type=chunk) - Used car gross margin was **5.21%**, a sequential increase of **0.81 percentage points**; gross profit was **RMB 113 million**, a sequential increase of **8.2%**[19](index=19&type=chunk) - Turnover days were **17.7 days**, a year-on-year decrease of **2.5 days** and a sequential decrease of **4.0 days**[19](index=19&type=chunk) - Actively leveraging trade-in subsidy policies and deepening the new retail model integrating OEM and Yongda dual-brand channels with online platforms[20](index=20&type=chunk) - Accelerating the layout of new NEV used car channels, exploring open, market-oriented, platform-based operations, and promoting used car exports[20](index=20&type=chunk) [Sales Network Changes](index=6&type=section&id=II.B.5.%20Sales%20Network%20Changes) In H1 2025, the Group actively adjusted its network by closing 19 stores and opening 7 new leading NEV outlets, acquiring 30 new NEV brand authorizations, resulting in 209 operating outlets with luxury brands accounting for 64.6% and independent NEV brands for 16.7% - In H1, **7** new leading NEV outlets were self-built, including **5** HarmonyOS Smart Mobility outlets[21](index=21&type=chunk) - Acquired **30** new NEV brand authorizations, with **14** NEV outlets under construction (**13** HarmonyOS Smart Mobility)[21](index=21&type=chunk) - **19** outlets were closed or merged, including **12** traditional brand and **7** NEV brand outlets[21](index=21&type=chunk) - As of H1 2025, there were **209** operating outlets and **17** authorized outlets pending opening[21](index=21&type=chunk) - Brand structure: **64.6%** luxury brands, **16.7%** independent NEV brands, **12.5%** mid-to-high-end brands, and **6.2%** Yongda Used Car Malls[21](index=21&type=chunk) Operating Outlets Details and Changes (As of June 30, 2025) | Brand Type | Dec 31, 2024 (Operating Outlets) | June 30, 2025 (Operating Outlets) | Outlet Change | | :--- | :--- | :--- | :--- | | Luxury & Ultra-Luxury Brand 4S Stores | 129 | 119 | -10 | | Luxury Brand City Showrooms | 16 | 16 | 0 | | Subtotal Luxury & Ultra-Luxury Brand Outlets | 145 | 135 | -10 | | Mid-to-High-End Brand 4S Stores | 27 | 25 | -2 | | Mid-to-High-End Brand City Showrooms | 1 | 1 | 0 | | Subtotal Mid-to-High-End Brand Outlets | 28 | 26 | -2 | | Independent NEV Brand 4S Stores | 29 | 29 | 0 | | Independent NEV Brand Service Centers | 6 | 6 | 0 | | Subtotal Independent NEV Brand Outlets | 35 | 35 | 0 | | Yongda Used Car Mall Outlets | 13 | 13 | 0 | | Total Outlets | 221 | 209 | -12 | [Key Financial Indicators Analysis](index=26&type=section&id=II.C.%20Key%20Financial%20Indicators%20Analysis) This section provides a detailed analysis of the Group's H1 2025 revenue, costs, gross profit, expenses, non-IFRS adjusted profit, cash flow, inventory, capital expenditure, borrowings, and liabilities, highlighting a decline in overall revenue and profit due to market competition and impairment, but improved operating cash flow and strong NEV business performance [Revenue](index=26&type=section&id=II.C.1.%20Revenue) In H1 2025, total revenue decreased by 12.8% to **RMB 27.072 billion**, primarily due to lower sales volume and average selling prices of luxury and ultra-luxury new cars, while independent NEV brand direct sales volume grew by 123.1% H1 2025 Revenue Breakdown by Business Segment | Business Segment | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | **Total Revenue** | **27,071,934** | **31,035,834** | **-12.8%** | | Subtotal New Car Sales and Related Services Revenue | 20,531,578 | 23,983,885 | -14.4% | | Luxury & Ultra-Luxury Brand New Car Sales | 15,667,841 | 19,106,328 | -18.0% | | Mid-to-High-End Brand New Car Sales | 1,890,174 | 2,714,040 | -30.4% | | Independent NEV Brand New Car Sales (Dealership) | 1,219,443 | 1,090,529 | +11.8% | | Commission Income Related to New Car Sales | 1,511,678 | 747,761 | +102.2% | | Subtotal Used Car Sales and Related Services Revenue | 1,576,350 | 2,087,418 | -24.4% | | Maintenance-Related Services Revenue | 4,659,958 | 4,653,952 | Largely Flat | | After-Sales Service Commission Income | 124,521 | 124,015 | Largely Flat | | Automobile Operating Lease Services | 196,795 | 221,028 | -11.0% | - Passenger vehicle sales and services segment new car dealership sales volume was **66,644 units**, a year-on-year decrease of **17.8%**[67](index=67&type=chunk) - Independent NEV brand direct sales volume was **5,857 units**, a year-on-year increase of **123.1%**[68](index=68&type=chunk) [Sales and Service Costs](index=28&type=section&id=II.C.2.%20Sales%20and%20Service%20Costs) In H1 2025, sales and service costs decreased by 13.2% to **RMB 24.702 billion**, aligning with the revenue decline, with new car and used car related costs decreasing, while after-sales service costs remained largely flat H1 2025 Sales and Service Costs Breakdown | Cost Type | H1 2025 (RMB million) | H1 2024 (RMB million) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | **Total Sales and Service Costs** | **24,701.6** | **28,451.6** | **-13.2%** | | Passenger Vehicle Sales and Services Segment New Car Sales Costs and Related Service Costs | 20,320.5 | 23,590.1 | -13.9% | | Used Car Sales Costs and Related Service Costs | 1,463.6 | 1,948.0 | -24.9% | | Passenger Vehicle Sales and Services Segment After-Sales Service Costs | 2,779.5 | 2,760.3 | Largely Flat | | Automobile Operating Lease Services Segment Costs | 151.2 | 182.2 | -17.0% | [Gross Profit and Gross Margin](index=28&type=section&id=II.C.3.%20Gross%20Profit%20and%20Gross%20Margin) In H1 2025, gross profit decreased by 8.3% to **RMB 2.370 billion**, but the overall gross margin increased by 0.43 percentage points to 8.76%, driven by improved margins in used car and operating lease services despite a significant decline in new car gross profit H1 2025 Gross Profit and Gross Margin | Indicator | H1 2025 | H1 2024 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | **Total Gross Profit (RMB million)** | **2,370.4** | **2,584.2** | **-8.3%** | | **Total Gross Margin** | **8.76%** | **8.33%** | **+0.43 percentage points** | | New Car Sales and Related Services Gross Profit (RMB million) | 211.1 | 393.8 | -46.4% | | New Car Sales and Related Services Gross Margin | 1.03% | 1.64% | -0.61 percentage points | | Used Car Sales and Related Services Gross Profit (RMB million) | 112.8 | 139.4 | -19.1% | | Used Car Dealership Gross Margin | 6.22% | 5.61% | +0.61 percentage points | | After-Sales Service Gross Profit (RMB million) | 2,005.0 | 2,017.6 | Largely Flat | | Maintenance Gross Margin | 40.35% | 40.69% | Largely Flat | | Automobile Operating Lease Services Gross Profit (RMB million) | 45.6 | 38.8 | +17.4% | | Automobile Operating Lease Services Gross Margin | 23.15% | 17.56% | +5.59 percentage points | [Other Income, Gains and Losses](index=29&type=section&id=II.C.4.%20Other%20Income%2C%20Gains%20and%20Losses) In H1 2025, other income, gains, and losses resulted in a net gain of **RMB 22.0 million**, a 63.5% year-on-year decrease, primarily due to losses from property and equipment disposals and reduced fair value gains on financial assets - Net gain of **RMB 22.0 million**, a year-on-year decrease of **63.5%**[75](index=75&type=chunk) - Government grants were **RMB 7.765 million** (2024: **RMB 10.077 million**)[43](index=43&type=chunk) - Interest income from bank deposits was **RMB 24.729 million** (2024: **RMB 21.982 million**)[43](index=43&type=chunk) - Loss on disposal of property, plant and equipment and other intangible assets was **RMB 11.796 million** (2024: gain of **RMB 3.655 million**)[43](index=43&type=chunk) - Fair value gain on financial assets at fair value through profit or loss was **RMB 0.297 million** (2024: loss of **RMB 11.278 million**)[43](index=43&type=chunk) [Expense Analysis](index=29&type=section&id=II.C.5.%20Expense%20Analysis) In H1 2025, distribution, selling, and administrative expenses totaled **RMB 2.264 billion**, a 6.5% decrease, but the expense ratio rose by 0.56 percentage points to 8.36%, while finance costs decreased by 20.5% to **RMB 117.6 million** - Total distribution and selling expenses and administrative expenses were **RMB 2.264 billion**, a year-on-year decrease of **6.5%**[76](index=76&type=chunk) - Selling and administrative expense ratio was **8.36%**, a year-on-year increase of **0.56 percentage points**[76](index=76&type=chunk) - Finance costs were **RMB 117.6 million**, a year-on-year decrease of **20.5%**[77](index=77&type=chunk) - Finance cost ratio was **0.43%**, a year-on-year decrease of **0.05 percentage points**[77](index=77&type=chunk) - Total staff costs were **RMB 961.768 million**, a year-on-year decrease of **2.2%**[45](index=45&type=chunk) - Total depreciation and amortization expenses were **RMB 591.695 million**, a year-on-year decrease of **3.9%**[45](index=45&type=chunk) [Non-IFRS Measurement Adjustments](index=30&type=section&id=II.C.6.%20Non-IFRS%20Measurement%20Adjustments) The Group provided non-IFRS adjustments to exclude non-cash, one-off asset impairments and their tax and non-controlling interest impacts, revealing an adjusted profit of **RMB 54.4 million** and adjusted profit attributable to owners of **RMB 62.7 million** for H1 2025, down 46.3% and 43.8% year-on-year, respectively H1 2025 Non-IFRS Measurement Adjustments | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Loss for the Period (IFRS) | (3,484.6) | 101.5 (Profit) | N/A | | Loss for the Period Attributable to Owners (IFRS) | (3,331.4) | 111.5 (Profit) | N/A | | Impairment Loss Adjustment | 3,552.8 | - | N/A | | Reversal of Deferred Tax Liabilities Adjustment | (314.3) | - | N/A | | Reversal of Deferred Tax Assets Adjustment | 300.5 | - | N/A | | **Adjusted Profit (non-IFRS)** | **54.4** | **101.5** | **-46.3%** | | **Adjusted Profit Attributable to Owners (non-IFRS)** | **62.7** | **111.5** | **-43.8%** | - Adjusted income tax expense was **RMB 7.0 million**, a year-on-year decrease of **71.7%**[79](index=79&type=chunk) - Non-IFRS measures should not be considered as a substitute for operating results or financial position analysis reported under IFRS[81](index=81&type=chunk) [Cash Flow](index=32&type=section&id=II.C.7.%20Cash%20Flow) In H1 2025, net cash from operating activities increased by 66.9% to **RMB 1.167 billion**, while net cash used in investing activities was **RMB 260.3 million**, and net cash used in financing activities was **RMB 5.1 million**, primarily for net borrowings, dividends, and share repurchases H1 2025 Cash Flow Overview | Cash Flow Type | H1 2025 (RMB million) | H1 2024 (RMB million) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Net Cash Generated from Operating Activities | 1,166.7 | 699.2 | +66.9% | | Net Cash Used in Investing Activities | 260.3 | 229.9 | +13.2% | | Net Cash Used in Financing Activities | 5.1 | 1,045.5 | -99.5% | - Improvement in operating cash flow was primarily due to increased cash from changes in working capital[82](index=82&type=chunk) - Cash outflow from investing activities was mainly for capital expenditure, partially offset by proceeds from asset disposals[83](index=83&type=chunk) - Cash outflow from financing activities significantly decreased, mainly due to an increase in net borrowings and net repayment of borrowings in the prior year[84](index=84&type=chunk) [Inventory](index=33&type=section&id=II.C.8.%20Inventory) As of June 30, 2025, inventory balance decreased by 28.4% to **RMB 2.972 billion** compared to year-end 2024, with average inventory turnover days remaining stable at 26.3 days Inventory Balance and Turnover Days | Indicator | June 30, 2025 (RMB million) | Dec 31, 2024 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Inventory Balance | 2,971.7 | 4,149.9 | -28.4% | | Average Inventory Turnover Days | 26.3 days | 26.7 days | -0.4 days | - Inventory primarily includes passenger vehicles and spare parts[85](index=85&type=chunk) [Capital Expenditure and Investments](index=33&type=section&id=II.C.9.%20Capital%20Expenditure%20and%20Investments) In H1 2025, total capital expenditure was **RMB 291.1 million**, primarily for acquiring test drive and operating lease vehicles, constructing and upgrading sales and service outlets, and intangible assets, partially offset by asset disposals H1 2025 Capital Expenditure Breakdown (RMB million) | Item | Amount | | :--- | :--- | | Expenditure on Property, Plant and Equipment (test drive and operating lease vehicles) | 382.8 | | Expenditure on Property, Plant and Equipment and Right-of-Use Assets (new and upgraded outlets) | 241.5 | | Expenditure on Intangible Assets (vehicle licenses and software) | 32.0 | | Disposal of Property, Plant and Equipment, Intangible Assets and Right-of-Use Assets | (365.2) | | **Total** | **291.1** | [Borrowings and Liabilities](index=34&type=section&id=II.C.10.%20Borrowings%20and%20Liabilities) As of June 30, 2025, total borrowings increased by 16.6% to **RMB 3.397 billion** compared to year-end 2024, with the net gearing ratio decreasing to 9.8%, and certain borrowings secured by inventory, property, plant, and equipment, land use rights, and subsidiary equity Borrowings Balance and Maturity (As of June 30, 2025) | Maturity Period | Amount (RMB million) | | :--- | :--- | | **Total Borrowings** | **3,397.1** | | Within one year | 1,591.7 | | One to two years | 845.4 | | Two to five years | 960.0 | - Borrowings balance increased by **16.6%** compared to year-end 2024[87](index=87&type=chunk) - Net gearing ratio was **9.8%**, a decrease of **0.4 percentage points** from **10.2%** at year-end 2024[89](index=89&type=chunk) - Assets pledged or mortgaged include inventory, property, plant and equipment, land use rights, and equity interests in subsidiaries[89](index=89&type=chunk) [Contingent Liabilities, Interest Rate and Foreign Exchange Risks](index=34&type=section&id=II.C.11.%20Contingent%20Liabilities%2C%20Interest%20Rate%20and%20Foreign%20Exchange%20Risks) As of June 30, 2025, the Group provided a **RMB 125 million** guarantee for Shanghai Yongda Financial Leasing Co., Ltd.'s principal borrowings, faces interest rate risk from LPR-linked borrowings, but has low foreign exchange risk as most transactions are RMB-denominated with no foreign currency financial borrowings - Provided a **RMB 125 million** guarantee for the principal borrowings of Shanghai Yongda Financial Leasing Co., Ltd[90](index=90&type=chunk) - Faces interest rate risk as some borrowings are linked to the Loan Prime Rate (LPR)[91](index=91&type=chunk) - Foreign exchange risk is low as most business is denominated in RMB, with no foreign currency financial borrowings[91](index=91&type=chunk) [Condensed Consolidated Financial Statements](index=8&type=section&id=III.%20Condensed%20Consolidated%20Financial%20Statements) [Condensed Consolidated Statement of Profit or Loss](index=8&type=section&id=III.A.%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) In H1 2025, the Group reported a pre-tax loss of **RMB 3.491 billion** and a loss for the period of **RMB 3.485 billion**, primarily due to **RMB 3.553 billion** in impairment losses, resulting in a basic and diluted loss per share of **RMB 1.78** Condensed Consolidated Statement of Profit or Loss Summary (For the six months ended June 30, 2025) | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Revenue | 27,071,934 | 31,035,834 | | Cost of Sales and Services | (24,701,567) | (28,451,590) | | Gross Profit | 2,370,367 | 2,584,244 | | Impairment Losses | (3,552,837) | – | | (Loss) Profit Before Tax | (3,491,405) | 126,176 | | (Loss) Profit for the Period | (3,484,629) | 101,451 | | (Loss) Profit for the Period Attributable to Owners of the Company | (3,331,377) | 111,450 | | Basic (Loss) Earnings Per Share | RMB (1.78) | RMB 0.06 | [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=9&type=section&id=III.B.%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) In H1 2025, total comprehensive expenses amounted to **RMB 3.482 billion**, primarily driven by the loss for the period, with total comprehensive expenses attributable to owners of the Company being **RMB 3.329 billion** Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income Summary (For the six months ended June 30, 2025) | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | (Loss) Profit for the Period | (3,484,629) | 101,451 | | Fair Value Gain (Loss) on Equity Instruments at Fair Value Through Other Comprehensive Income ("FVOCI") | 2,441 | (1,603) | | Total Comprehensive (Expense) Income for the Period | (3,482,188) | 99,848 | | Total Comprehensive (Expense) Income for the Period Attributable to Owners of the Company | (3,328,936) | 109,847 | [Condensed Consolidated Statement of Financial Position](index=10&type=section&id=III.C.%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, total assets decreased by 22.5% to **RMB 25.969 billion** compared to year-end 2024, with both non-current and current assets declining, including a 28.4% reduction in inventory, and total equity decreasing by 26.1% to **RMB 10.512 billion** Condensed Consolidated Statement of Financial Position Summary (As of June 30, 2025) | Indicator | June 30, 2025 (RMB thousand) | Dec 31, 2024 (RMB thousand) | Change | | :--- | :--- | :--- | :--- | | **Non-Current Assets** | **10,870,222** | **14,888,752** | **-27.0%** | | Property, Plant and Equipment | 4,258,161 | 5,336,096 | -20.2% | | Goodwill | 314,428 | 1,590,421 | -80.2% | | Other Intangible Assets | 1,609,902 | 2,902,044 | -44.6% | | **Current Assets** | **15,098,802** | **20,157,511** | **-25.1%** | | Inventories | 2,971,698 | 4,149,925 | -28.4% | | Bank Balances and Cash | 2,358,967 | 1,457,667 | +61.8% | | **Current Liabilities** | **11,756,417** | **17,138,557** | **-31.4%** | | Trade and Other Payables | 7,770,683 | 12,934,471 | -39.9% | | **Non-Current Liabilities** | **3,700,498** | **3,691,028** | **+0.26%** | | **Total Equity** | **10,512,109** | **14,216,678** | **-26.1%** | [Notes to the Condensed Consolidated Financial Statements](index=12&type=section&id=IV.%20Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) [General Information](index=12&type=section&id=IV.A.%20General%20Information) This section outlines China Yongda Automobile Services Holdings Limited's registration, listing, investment holding nature, and its subsidiaries' primary business scope in China, including automobile sales, after-sales services, operating leases, and distribution of automotive insurance and financial products - The Company was incorporated as a public limited company in the Cayman Islands on November 7, 2011, with its shares listed on the Hong Kong Stock Exchange[29](index=29&type=chunk) - The Group's principal businesses include automobile sales, after-sales services, automobile operating lease services, and distribution of automotive insurance and financial products[29](index=29&type=chunk) - The condensed consolidated financial statements are presented in RMB[30](index=30&type=chunk) [Accounting Policies](index=12&type=section&id=IV.B.%20Accounting%20Policies) The condensed consolidated financial statements are prepared on a historical cost basis, adhering to IAS 34 'Interim Financial Reporting' and HKEX Listing Rules disclosure requirements, with the first-time adoption of IAS 21 amendment 'Lack of Exchangeability' having no material impact on financial position or performance - Financial statements are prepared on a historical cost basis, with certain financial instruments measured at fair value[31](index=31&type=chunk) - Compliance with International Accounting Standard 34 and Appendix 16 of the HKEX Listing Rules disclosure requirements[30](index=30&type=chunk) - First-time adoption of the amendment to IAS 21 "Lack of Exchangeability" had no material impact[32](index=32&type=chunk)[33](index=33&type=chunk) [Disaggregation of Revenue from Contracts with Customers](index=13&type=section&id=IV.C.%20Disaggregation%20of%20Revenue%20from%20Contracts%20with%20Customers) The Group's revenue primarily derives from new car sales and related services, used car sales and related services, and after-sales services; in H1 2025, new car sales revenue declined, but commission income related to new car sales significantly increased, while after-sales service revenue remained stable Disaggregation of Revenue from Contracts with Customers (For the six months ended June 30, 2025) | Revenue Type | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | New Car Sales and Related Services Revenue | 20,520,162 | 23,956,258 | | - Luxury & Ultra-Luxury Brand New Car Sales | 15,663,412 | 19,100,028 | | - Mid-to-High-End Brand New Car Sales | 1,883,519 | 2,692,713 | | - Independent NEV Brand New Car Sales | 1,219,111 | 1,090,529 | | - Commission Income Related to New Car Sales | 1,511,678 | 747,761 | | Used Car Sales and Related Services Revenue | 1,576,350 | 2,087,418 | | After-Sales Services | 4,782,700 | 4,776,474 | | **Total** | **26,879,212** | **30,820,150** | - New car sales revenue is recognized when control of the vehicle is transferred, while after-sales service revenue is recognized over time[35](index=35&type=chunk)[37](index=37&type=chunk) - Commission income related to new car sales primarily originates from the distribution of automotive financial products and new car brokerage business[37](index=37&type=chunk) - Used car sales revenue is recognized on a gross basis under the dealership model and a net basis under the brokerage model[37](index=37&type=chunk) [Operating Segments](index=15&type=section&id=IV.D.%20Operating%20Segments) The Group has two primary reportable segments: passenger vehicle sales and services, and automobile operating lease services, both of which experienced a slight revenue decline in H1 2025 Operating Segment Revenue and Gross Profit (For the six months ended June 30, 2025) | Segment | 2025 Revenue (RMB thousand) | 2025 Gross Profit (RMB thousand) | 2024 Revenue (RMB thousand) | 2024 Gross Profit (RMB thousand) | | :--- | :--- | :--- | :--- | :--- | | Passenger Vehicle Sales and Services | 26,892,407 | 2,328,875 | 30,849,270 | 2,550,771 | | Automobile Operating Lease Services | 196,795 | 45,565 | 221,028 | 38,817 | | **Total** | **27,071,934** | **2,370,367** | **31,035,834** | **2,584,244** | - Passenger vehicle sales and services segment revenue includes new car sales, used car sales, and after-sales service revenue[42](index=42&type=chunk) - Segment results represent pre-tax loss/profit earned by each segment, excluding unallocated other income, expenses, and profit from associates and joint ventures[41](index=41&type=chunk) [Other Income, Other Gains and Losses](index=17&type=section&id=IV.E.%20Other%20Income%2C%20Other%20Gains%20and%20Losses) In H1 2025, the Group's total other income, gains, and losses significantly decreased by 63.5% to **RMB 21.97 million** from **RMB 60.14 million** in the prior year, primarily due to losses on property and equipment disposals and reduced fair value gains on financial assets Other Income, Other Gains and Losses (For the six months ended June 30, 2025) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Government Grants | 7,765 | 10,077 | | Interest Income from Bank Deposits | 24,729 | 21,982 | | (Loss) Gain on Disposal of Property, Plant and Equipment and Other Intangible Assets | (11,796) | 3,655 | | Fair Value Gain (Loss) on Financial Assets at Fair Value Through Profit or Loss | 297 | (11,278) | | Compensation Income | – | 28,707 | | **Total** | **21,971** | **60,143** | [Loss Before Tax](index=18&type=section&id=IV.F.%20Loss%20Before%20Tax) In H1 2025, the Group reported a pre-tax loss of **RMB 3.491 billion**, primarily driven by **RMB 3.553 billion** in impairment losses recognized on goodwill, property, plant and equipment, right-of-use assets, and other intangible assets Loss Before Tax Components (For the six months ended June 30, 2025) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Total Staff Costs | 961,768 | 983,495 | | Depreciation of Property, Plant and Equipment | 338,915 | 359,705 | | Depreciation of Right-of-Use Assets | 186,274 | 189,921 | | Amortization of Other Intangible Assets | 66,506 | 59,780 | | Impairment Losses (Total) | 3,552,837 | – | | - Goodwill | 1,275,992 | – | | - Property, Plant and Equipment | 964,791 | – | | - Right-of-Use Assets | 54,907 | – | | - Other Intangible Assets | 1,257,147 | – | - Of the impairment losses, **RMB 702 million** was attributed to distribution and selling expenses, and **RMB 1.575 billion** to administrative expenses[45](index=45&type=chunk) [Income Tax (Credit) Expense](index=18&type=section&id=IV.G.%20Income%20Tax%20%28Credit%29%20Expense) In H1 2025, the Group recorded an income tax gain of **RMB 6.78 million**, compared to an expense of **RMB 24.73 million** in the prior year, primarily due to deferred tax credits recognized and the reversal of deferred tax assets for tax losses from previous years Income Tax (Credit) Expense (For the six months ended June 30, 2025) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Current Tax | 97,154 | 45,687 | | Deferred Tax (Credit for the Period) | (404,440) | (20,962) | | Write-off of Previously Recognized Deferred Tax | 300,510 | – | | **Income Tax (Credit) Expense for the Period** | **(6,776)** | **24,725** | - The tax rate for Chinese subsidiaries is **25%**, with some lower-profit subsidiaries enjoying a preferential tax rate of **5%**[48](index=48&type=chunk) - During the period, deferred tax assets for tax losses recognized in prior years amounting to **RMB 300,510,000** were reversed[47](index=47&type=chunk) [Dividends](index=20&type=section&id=IV.H.%20Dividends) The Company declared and paid a 2024 final dividend of **RMB 0.069** per share, totaling approximately **RMB 129 million**, and the Board has decided to declare an H1 2025 interim dividend of **RMB 0.070** per share, higher than the prior year's **RMB 0.059** - 2024 final dividend of **RMB 0.069** per share, totaling approximately **RMB 128,813,000**[49](index=49&type=chunk) - H1 2025 interim dividend of **RMB 0.070** per share (H1 2024: **RMB 0.059** per share)[49](index=49&type=chunk) [Loss Per Share](index=20&type=section&id=IV.I.%20Loss%20Per%20Share) In H1 2025, the loss for the period attributable to owners of the Company was **RMB 3.331 billion**, resulting in a basic and diluted loss per share of **RMB 1.78**, compared to a profit per share of **RMB 0.06** in the prior year Loss Per Share (For the six months ended June 30, 2025) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | (Loss) Profit for the Period Attributable to Owners of the Company (RMB thousand) | (3,331,377) | 111,450 | | Basic (Loss) Earnings Per Share | RMB (1.78) | RMB 0.06 | | Diluted (Loss) Earnings Per Share | RMB (1.78) | RMB 0.06 | | Weighted Average Number of Ordinary Shares (thousand shares) | 1,871,540 | 1,927,921 | [Changes in Property, Plant and Equipment, Right-of-Use Assets, Goodwill and Other Intangible Assets](index=21&type=section&id=IV.J.%20Changes%20in%20Property%2C%20Plant%20and%20Equipment%2C%20Right-of-Use%20Assets%2C%20Goodwill%20and%20Other%20Intangible%20Assets) In H1 2025, the Group acquired property, plant, and equipment worth approximately **RMB 610 million** and disposed of assets with a carrying value of approximately **RMB 377 million**, while recognizing **RMB 3.553 billion** in impairment losses due to intensified automotive industry competition and macroeconomic impacts on traditional fuel vehicle dealerships' profitability - Acquisition of property, plant and equipment amounted to approximately **RMB 609,872,000**[51](index=51&type=chunk) - Disposal of property, plant and equipment with a carrying value of approximately **RMB 376,571,000** resulted in a loss on disposal of approximately **RMB 11,796,000**[51](index=51&type=chunk) - Total impairment losses of **RMB 3,552,837,000** were recognized, including goodwill, property, plant and equipment, right-of-use assets, and other intangible assets[54](index=54&type=chunk) - Primary reasons for impairment: intensified competition in the automotive industry, macroeconomic impacts, declining new car sales, and lower gross margins for traditional fuel vehicle brand dealerships[54](index=54&type=chunk) - In the impairment assessment, future revenue growth rates and gross margin expectations were lowered, with a pre-tax discount rate ranging from **11% to 12%**[55](index=55&type=chunk)[56](index=56&type=chunk) [Inventories](index=22&type=section&id=IV.K.%20Inventories) As of June 30, 2025, inventory balance decreased by 28.4% to **RMB 2.972 billion** compared to year-end 2024, with vehicle inventory down 28.4% and parts and accessories inventory down 6.8% Inventory Composition (As of June 30, 2025) | Inventory Type | June 30, 2025 (RMB thousand) | Dec 31, 2024 (RMB thousand) | Change | | :--- | :--- | :--- | :--- | | Vehicles | 2,521,244 | 3,666,464 | -31.2% | | Parts and Accessories | 450,454 | 483,461 | -6.8% | | **Total** | **2,971,698** | **4,149,925** | **-28.4%** | [Trade and Other Receivables](index=23&type=section&id=IV.L.%20Trade%20and%20Other%20Receivables) As of June 30, 2025, trade and other receivables totaled **RMB 6.224 billion**, remaining largely flat compared to year-end 2024, with trade receivables and bills receivable amounting to **RMB 776 million**, and prepayments and other receivables at **RMB 5.448 billion** Trade and Other Receivables (As of June 30, 2025) | Item | June 30, 2025 (RMB thousand) | Dec 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Trade Receivables | 771,369 | 852,203 | | Bills Receivable | 5,089 | 1,368 | | Prepayments to Suppliers | 2,014,498 | 1,197,228 | | Rebates Receivable from Suppliers | 2,169,031 | 2,749,556 | | Financial and Insurance Commissions Receivable | 453,114 | 542,272 | | **Total** | **6,224,309** | **6,218,622** | - Trade receivables and bills receivable had an aging of **0 to 90 days**[59](index=59&type=chunk) - No credit period is generally granted for car sales, after-sales services are usually settled in cash, and corporate customers are granted a credit period not exceeding **60 days**[60](index=60&type=chunk) [Trade and Other Payables](index=24&type=section&id=IV.M.%20Trade%20and%20Other%20Payables) As of June 30, 2025, trade and other payables significantly decreased by 39.9% to **RMB 7.771 billion** compared to year-end 2024, primarily due to a substantial reduction in bills payable Trade and Other Payables (As of June 30, 2025) | Item | June 30, 2025 (RMB thousand) | Dec 31, 2024 (RMB thousand) | Change | | :--- | :--- | :--- | :--- | | Trade Payables | 615,504 | 725,649 | -15.2% | | Bills Payable | 6,635,980 | 11,622,602 | -42.9% | | Other Payables | 519,199 | 586,220 | -11.4% | | **Total** | **7,770,683** | **12,934,471** | **-39.9%** | - Bills payable are primarily for the purchase of passenger vehicles, with a credit period of **one to six months**[64](index=64&type=chunk) - Trade payables are mainly related to the purchase of parts and accessories, with a credit period not exceeding **90 days**[64](index=64&type=chunk) - The vast majority of trade payables and bills payable have an aging of **0 to 90 days**[65](index=65&type=chunk) [Future Outlook and Strategies](index=35&type=section&id=V.%20Future%20Outlook%20and%20Strategies) [Market Trends and Industry Background](index=35&type=section&id=V.A.%20Market%20Trends%20and%20Industry%20Background) China's automotive market is entering a new phase of restructuring, with rapid NEV development as a core driver, while traditional fuel vehicles remain resilient; the industry is shifting from price wars to technology competition and compliant operations, with policy adjustments expected to aid profit recovery and market consolidation - China's automotive market is entering a new stage of restructuring and iteration, with rapid NEV development and continuously rising penetration rates[92](index=92&type=chunk) - The industry is shifting from price wars to technology competition and compliant operations, with policy adjustments expected to drive profit recovery[92](index=92&type=chunk) - Traditional fuel vehicle brands are optimizing production capacity and channel networks, while NEV brands focus on enhancing outlet efficiency[92](index=92&type=chunk) - The market is returning to rational competition, aiming for high-quality development centered on technological innovation and user experience[92](index=92&type=chunk) [Overall Strategic Direction](index=35&type=section&id=V.B.%20Overall%20Strategic%20Direction) The Group will actively respond to market changes by strengthening key NEV brands, optimizing luxury pillar brands, ensuring stable after-sales services, and upgrading used car operations to improve business structure and profitability, while focusing on cost reduction, operational efficiency, and exploring battery recycling and AI-powered smart robotics - Continuously strengthen and expand key NEV brands, and focus on optimizing luxury pillar brands[93](index=93&type=chunk) - Ensure stable after-sales services and develop and upgrade used car businesses to improve business structure and enhance profitability[93](index=93&type=chunk) - Prioritize cost reduction and control, focus on operational efficiency, and ensure healthy core financial indicators and operating cash flow[93](index=93&type=chunk) - Continuously expand into battery recycling and smart robotics industries, and research AI technology empowerment[93](index=93&type=chunk) [Optimizing Network Structure](index=36&type=section&id=V.C.%20Optimizing%20Network%20Structure) The Group will increase investment to expand its NEV business, deepen cooperation with leading brands like HarmonyOS Smart Mobility to achieve scale, and continuously optimize its traditional luxury brand network by closing underperforming outlets and focusing on high-quality stores in core regions to enhance single-store and overall profitability - Increase investment to strengthen and expand NEV business, deepening cooperation with key brands like HarmonyOS Smart Mobility[94](index=94&type=chunk) - Optimize the network layout of traditional luxury brands, closing or merging underperforming outlets[94](index=94&type=chunk) - Focus on high-quality stores in core regions to improve single-store operational quality and overall profitability[94](index=94&type=chunk) [Business Quality and Efficiency Improvement, Cost Reduction and Control](index=36&type=section&id=V.D.%20Business%20Quality%20and%20Efficiency%20Improvement%2C%20Cost%20Reduction%20and%20Control) The Group aims to improve new car profitability, maintain stable after-sales maintenance, upgrade used car operations, and enhance customer retention through diverse services, while implementing cost control measures, optimizing human resource efficiency, streamlining organizational structure, and accelerating shared management models to reduce administrative expenses - Improve new car profitability, maintain stable after-sales maintenance business, and develop and upgrade used car businesses[95](index=95&type=chunk) - Enhance customer retention and satisfaction through diversified services, solidifying the customer base[95](index=95&type=chunk) - Implement various cost and expense control measures, adjusting management around key selling and administrative expenses such as human resources costs[95](index=95&type=chunk) - Streamline organizational structure, optimize personnel efficiency, and accelerate shared management models to reduce management costs[95](index=95&type=chunk) [Ensuring Cash Flow and Financial Stability](index=36&type=section&id=V.E.%20Ensuring%20Cash%20Flow%20and%20Financial%20Stability) The Group will strengthen cash flow management by ensuring inventory turnover efficiency, diligently collecting receivables, shortening collection cycles, and strictly controlling operating cash flow, while also strictly managing capital expenditure, optimizing financing channels and structure, and enhancing risk resilience to maintain healthy core financial indicators like the asset-liability ratio - Strengthen cash flow management, ensure inventory turnover efficiency, diligently collect receivables, shorten collection cycles, and strictly control operating cash flow[96](index=96&type=chunk) - Strictly control capital expenditure, optimize financing channels and structure, and enhance risk resilience[96](index=96&type=chunk) - Ensure core financial indicators such as asset-liability ratio, current asset coverage of liabilities, and net asset coverage of long-term assets remain healthy[96](index=96&type=chunk) [Talent Development, New Business Layout, and New Technology Empowerment](index=37&type=section&id=V.F.%20Talent%20Development%2C%20New%20Business%20Layout%2C%20and%20New%20Technology%20Empowerment) The Group will strengthen talent development and reserves to support business transformation, continuously expand into battery recycling and smart robotics, and accelerate digital transformation by fully embracing AI technology to inject new vitality into business development - Strengthen talent development and reserves in relevant fields to support business transformation[97](index=97&type=chunk) - Continuously expand into "battery recycling industry" and "smart robotics" business areas[97](index=97&type=chunk) - Accelerate digital transformation and fully embrace AI technology to empower business development[97](index=97&type=chunk) - Actively participate in national "low-carbon" strategies, fulfill ESG responsibilities, and adopt active dividend and share repurchase policies to reward shareholders[97](index=97&type=chunk) [Corporate Governance and Other Information](index=37&type=section&id=VI.%20Corporate%20Governance%20and%20Other%20Information) [Compliance with Corporate Governance Code](index=37&type=section&id=VI.A.%20Compliance%20with%20Corporate%20Governance%20Code) The Company adopted and complied with the Corporate Governance Code set out in Appendix C1 of the HKEX Listing Rules during H1 2025 - The Company adopted and complied with the Corporate Governance Code set out in Appendix C1 of the Hong Kong Stock Exchange Listing Rules[98](index=98&type=chunk) [Model Code for Securities Transactions by Directors](index=37&type=section&id=VI.B.%20Model%20Code%20for%20Securities%20Transactions%20by%20Directors) The Company adopted and confirmed that all directors complied with the Model Code for Securities Transactions by Directors set out in Appendix C3 of the Listing Rules during H1 2025, which also applies to employees with unpublished inside information - The Company adopted and confirmed that directors complied with the Model Code for Securities Transactions by Directors set out in Appendix C3 of the Listing Rules[99](index=99&type=chunk) - Employees who may possess unpublished inside information are also required to comply with the code[100](index=100&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=38&type=section&id=VI.C.%20Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) In H1 2025, the Company repurchased **30,860,000** ordinary shares on the HKEX for approximately **HKD 74.825 million**, which were subsequently cancelled to benefit shareholders by enhancing net asset value and/or earnings per share, with no repurchased but uncancelled shares held as of the reporting date - In H1 2025, a total of **30,860,000** ordinary shares were repurchased on the HKEX for approximately **HKD 74,825,230.80**[101](index=101&type=chunk) - The repurchased shares were cancelled on April 10, 2025, and August 18, 2025[101](index=101&type=chunk) - The repurchases aimed to benefit the Company and its shareholders by enhancing net asset value and/or earnings per share[101](index=101&type=chunk) - As of June 30, 2025, the Company did not hold any treasury shares[102](index=102&type=chunk) [Audit and Compliance Committee](index=38&type=section&id=VI.D.%20Audit%20and%20Compliance%20Committee) The Company's Audit and Compliance Committee, comprising three independent non-executive directors, reviewed the Group's accounting policies, internal controls, and financial reporting, confirming that the interim financial results comply with relevant standards and regulations, with the condensed consolidated financial statements reviewed by independent auditors - The Audit and Compliance Committee comprises three independent non-executive directors, complying with Listing Rules requirements[103](index=103&type=chunk) - The Committee reviewed the Group's accounting policies, internal controls, and financial reporting, deeming the interim financial results compliant with relevant standards[104](index=104&type=chunk) - Independent auditors Deloitte Touche Tohmatsu have reviewed the condensed consolidated financial statements[104](index=104&type=chunk) [Events After the Reporting Period](index=39&type=section&id=VI.E.%20Events%20After%20the%20Reporting%20Period) The Company has no material events after the reporting period requiring shareholders' attention - No material events after the reporting period[105](index=105&type=chunk) [Interim Dividend](index=39&type=section&id=VI.F.%20Interim%20Dividend) The Board decided to declare an H1 2025 interim dividend of **RMB 0.070** per share (equivalent to **HKD 0.07678** per share), payable around October 30, 2025, to shareholders registered on September 15, 2025, with the total interim dividend estimated at approximately **HKD 142 million** - H1 2025 interim dividend of **RMB 0.070** per share (H1 2024: **RMB 0.059** per share)[106](index=106&type=chunk) - The dividend payable per share is **HKD 0.07678** after exchange rate conversion[106](index=106&type=chunk) - Total interim dividend is estimated at approximately **HKD 142 million**[106](index=106&type=chunk) - Dividends will be paid on or about October 30, 2025, to shareholders registered on September 15, 2025[106](index=106&type=chunk) [Closure of Register of Members](index=39&type=section&id=VI.G.%20Closure%20of%20Register%20of%20Members) To determine eligible shareholders for the interim dividend, the Company will suspend its register of members from September 10 to September 15, 2025 - The register of members will be closed from September 10 to September 15, 2025, to determine eligible shareholders for the interim dividend[107](index=107&type=chunk) [Publication of Results Announcement and Interim Report](index=40&type=section&id=VI.H.%20Publication%20of%20Results%20Announcement%20and%20Interim%20Report) This announcement has been published on the HKEX and the Company's website, and the interim report will be dispatched to shareholders and posted on the aforementioned websites in due course - The results announcement has been published on the HKEX and the Company's website[108](index=108&type=chunk) - The interim report will be dispatched to shareholders and published on the aforementioned websites in due course[108](index=108&type=chunk) [Acknowledgements and Forward-Looking Statements](index=40&type=section&id=VI.I.%20Acknowledgements%20and%20Forward-Looking%20Statements) The Board expresses gratitude to shareholders, management, employees, business partners, and customers for their support and contributions; this announcement contains forward-looking statements based on current information and assumptions, involving risks and uncertainties, and should not be unduly relied upon - The Board expresses gratitude for the support and contributions from all parties[109](index=109&type=chunk) - This announcement contains forward-looking statements based on subjective expectations, assumptions, and premises, involving risks and uncertainties[111](index=111&type=chunk) - Forward-looking statements should not be taken as assurances that plans and objectives will be achieved, and should not be unduly relied upon[111](index=111&type=chunk)

Company Information [Board Members and Committees](index=3&type=section&id=%E8%91%A3%E4%BA%8B%E6%9C%83%E6%88%90%E5%93%A1%E5%8F%8A%E5%A7%94%E5%93%A1%E6%9C%83) This section outlines the company's board members and the composition of its various governance committees - **Pony Ma** serves as Chairman and Executive Director[4](index=4&type=chunk) - Key committee chairs include **Yang Siu Shun** (Audit Committee), **Charles St Leger Searle** (Corporate Governance Committee), **Martin Lau** (Investment Committee), **Pony Ma** (Nomination Committee), and **Ian Charles Stone** (Remuneration Committee)[4](index=4&type=chunk) [Company Basic Information](index=3&type=section&id=%E5%85%AC%E5%8F%B8%E5%9F%BA%E6%9C%AC%E4%BF%A1%E6%81%AF) This section provides essential company details, such as principal bankers, registered office, headquarters, share registrar, website, and stock codes - Principal bankers include **Bank of China Limited** and **The Hongkong and Shanghai Banking Corporation Limited**[5](index=5&type=chunk) - Registered office is in the Cayman Islands, with group headquarters in **Tencent Binhai Building, Nanshan District, Shenzhen, China**[5](index=5&type=chunk) - Company website is **www.tencent.com**, with stock codes **700 (HKD counter)** and **80700 (RMB counter)**[5](index=5&type=chunk) Financial Performance Summary [Q2 2025 Financial Performance](index=4&type=section&id=%E4%BA%8C%E9%9B%B6%E4%BA%8C%E4%BA%94%E5%B9%B4%E7%AC%AC%E4%BA%8C%E5%AD%A3%E5%BA%A6%E8%B2%A1%E5%8B%99%E8%A1%A8%E7%8F%BE) This section outlines the company's unaudited Q2 2025 financial performance, highlighting double-digit year-on-year growth in key profitability metrics 2025 Q2 Key Financial Data (Unaudited) | Indicator | June 30, 2025 (RMB millions) | June 30, 2024 (RMB millions) | YoY Change | March 31, 2025 (RMB millions) | QoQ Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | 184,504 | 161,117 | 15% | 180,022 | 2% | | Gross Profit | 105,013 | 85,895 | 22% | 100,493 | 4% | | Operating Profit | 60,104 | 50,732 | 18% | 57,566 | 4% | | Profit Attributable to Equity Holders | 55,628 | 47,630 | 17% | 47,821 | 16% | | Basic EPS (RMB per share) | 6.115 | 5.112 | 20% | 5.252 | 16% | | Non-IFRS Profit Attributable to Equity Holders | 63,052 | 57,313 | 10% | 61,329 | 3% | [H1 2025 Financial Performance](index=5&type=section&id=%E4%BA%8C%E9%9B%B6%E4%BA%8C%E4%BA%94%E5%B9%B4%E4%B8%8A%E5%8D%8A%E5%B9%B4%E8%B2%A1%E5%8B%99%E8%A1%A8%E7%8F%BE) This section summarizes the company's unaudited H1 2025 financial performance, highlighting double-digit year-on-year growth in key profitability metrics 2025 H1 Key Financial Data (Unaudited) | Indicator | June 30, 2025 (RMB millions) | June 30, 2024 (RMB millions) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 364,526 | 320,618 | 14% | | Gross Profit | 205,506 | 169,765 | 21% | | Operating Profit | 117,670 | 103,288 | 14% | | Profit Attributable to Equity Holders | 103,449 | 89,519 | 16% | | Basic EPS (RMB per share) | 11.367 | 9.590 | 19% | | Non-IFRS Profit Attributable to Equity Holders | 124,381 | 107,578 | 16% | Chairman's Report [Performance Overview](index=6&type=section&id=%E6%A5%AD%E7%B8%BE%E6%A6%82%E8%A7%88) The Chairman's report overviews the Group's unaudited Q2 and H1 2025 earnings, emphasizing significant growth in both IFRS and non-IFRS profit - Profit attributable to equity holders: **RMB 55.628 billion** in Q2 2025, up **17% YoY**, and **RMB 103.449 billion** in H1 2025, up **16% YoY**[12](index=12&type=chunk) - Non-IFRS profit attributable to equity holders: **RMB 63.052 billion** in Q2 2025, up **10% YoY**, and **RMB 124.381 billion** in H1 2025, up **16% YoY**[12](index=12&type=chunk) [Operating Data](index=6&type=section&id=%E7%B6%93%E7%87%9F%E8%B3%87%E6%96%99) This section presents key operating metrics, including monthly active accounts for WeChat, QQ mobile, and fee-based value-added services subscribers Key Operating Data (Millions) | Indicator | June 30, 2025 | June 30, 2024 | YoY Change | March 31, 2025 | QoQ Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Combined MAU of WeChat and Weixin | 1,411 | 1,371 | 3% | 1,402 | 0.6% | | Mobile MAU of QQ | 532 | 571 | -7% | 534 | -0.4% | | Fee-based VAS Subscriptions | 264 | 263 | 0.4% | 268 | -1% | [Business Review and Outlook](index=6&type=section&id=%E6%A5%AD%E5%8B%99%E5%9B%9E%E9%A1%A7%E5%8F%8A%E5%B1%95%E6%9C%9B) This section reviews Q2 2025 business performance, emphasizing AI investment, gaming breakthroughs, rapid advertising growth, and AI-native application promotion - In Q2 2025, the company continued to invest in and benefit from AI, achieving double-digit percentage year-on-year growth in both revenue and non-IFRS operating profit[14](index=14&type=chunk) - Gaming business performed strongly in both user and revenue aspects, with evergreen games like "Honor of Kings" and "Peace Elite" evolving into platform-based services with increased AI applications, and new games like "Delta Force" achieving breakthroughs[14](index=14&type=chunk) - Marketing services revenue grew rapidly by upgrading the advertising basic model, enhancing ad effectiveness across various traffic platforms, and further increasing AI application in ad creation, placement, recommendation, and performance analysis[14](index=14&type=chunk)[16](index=16&type=chunk) - Weixin enriched its AI features, offering intelligent keyword search, smart customer service replies, and automatic text summarization for Video Accounts content[15](index=15&type=chunk) - Mini Games' total gross receipts increased by **20% YoY**; domestic game "Delta Force" achieved over **20 million average DAU** in July 2025; international game "Clash Royale" reached a **seven-year high in monthly gross receipts** in June 2025[16](index=16&type=chunk) - The **Hunyuan 3D model** ranked first on Hugging Face for its industry-leading geometric precision, texture realism, and instruction-to-3D alignment capabilities, being increasingly adopted by game developers, 3D printing companies, and professional designers[16](index=16&type=chunk) [Dividends and Acknowledgements](index=8&type=section&id=%E8%82%A1%E6%81%AF%E5%8F%8A%E8%87%B4%E8%AC%9D) The Board did not declare an interim dividend, and the Chairman expressed gratitude to stakeholders, reaffirming the core mission of "User-oriented, Tech for Good" - The Board did not declare any interim dividend for the six months ended June 30, 2025[18](index=18&type=chunk) - The company will continue to uphold its core mission of "User-oriented, Tech for Good," consistently delivering meaningful impact through technology, driving innovation, and adapting to societal needs[19](index=19&type=chunk) Management Discussion and Analysis [Comparison of Q2 2025 and Q2 2024](index=9&type=section&id=%E4%BA%8C%E9%9B%B6%E4%BA%8C%E4%BA%94%E5%B9%B4%E7%AC%AC%E4%BA%8C%E5%AD%A3%E8%88%87%E4%BA%8C%E9%9B%B6%E4%BA%8C%E5%9B%9B%E5%B9%B4%E7%AC%AC%E4%BA%8C%E5%AD%A3%E7%9A%84%E6%AF%94%E8%BC%83) This section analyzes year-on-year changes in Q2 2025 versus Q2 2024 financial indicators, covering revenue, costs, gross profit, expenses, and overall profitability - Revenue: Q2 2025 revenue increased by **15% YoY** to **RMB 184.5 billion**[23](index=23&type=chunk) - Value-added services revenue increased by **16% YoY** to **RMB 91.4 billion**, with domestic games revenue growing by **17%** and international games revenue by **35%** (or **33%** at constant exchange rates)[25](index=25&type=chunk) - Marketing services revenue increased by **20% YoY** to **RMB 35.8 billion**, primarily benefiting from AI-driven advertising platform improvements and enhanced Weixin transaction ecosystem[25](index=25&type=chunk) - FinTech and Business Services revenue increased by **10% YoY** to **RMB 55.5 billion**, driven by consumer loan services, commercial payment activities, wealth management services, and increased enterprise customer demand for AI-related services, including GPU rental and API token usage[25](index=25&type=chunk) - Gross Profit: Q2 2025 gross profit increased by **22% YoY** to **RMB 105 billion**, with gross margin improving from **53%** in the prior year to **57%**[26](index=26&type=chunk) - Selling and marketing expenses: Increased by **3% YoY** to **RMB 9.4 billion**, with the percentage of revenue decreasing from **6%** in the prior year to **5%**[29](index=29&type=chunk) - General and administrative expenses: Increased by **16% YoY** to **RMB 31.9 billion**, due to increased R&D expenses to support AI-related business development and higher employee costs[29](index=29&type=chunk) - Share of profit of associates and joint ventures: Recorded **RMB 4.5 billion** in Q2 2025, compared to **RMB 7.7 billion** in the prior year, mainly due to lower estimated earnings from a large associate[31](index=31&type=chunk) [Comparison of Q2 2025 and Q1 2025](index=13&type=section&id=%E4%BA%8C%E9%9B%B6%E4%BA%8C%E4%BA%94%E5%B9%B4%E7%AC%AC%E4%BA%8C%E5%AD%A3%E8%88%87%E4%BA%8C%E9%9B%B6%E4%BA%8C%E4%BA%94%E5%B9%B4%E7%AC%AC%E4%B8%80%E5%AD%A3%E7%9A%84%E6%AF%94%E8%BC%83) This section analyzes quarter-on-quarter changes in Q2 2025 versus Q1 2025 financial indicators, highlighting seasonal factors and AI capabilities deployment impact - Revenue: Q2 2025 revenue increased by **2% QoQ** to **RMB 184.5 billion**[35](index=35&type=chunk) - Gross Profit: Q2 2025 gross profit increased by **4% QoQ** to **RMB 105 billion**, with gross margin improving from **56%** in the previous quarter to **57%**[36](index=36&type=chunk) - Value-added services revenue decreased by **0.8% QoQ** to **RMB 91.4 billion**, with domestic games revenue declining by **6%** due to post-Chinese New Year seasonality, while international games revenue increased by **13%**[37](index=37&type=chunk) - Marketing services revenue increased by **12% QoQ** to **RMB 35.8 billion**, benefiting from the deployment of AI advertising capabilities and the peak season after Chinese New Year[37](index=37&type=chunk) - Selling and marketing expenses: Increased by **20% QoQ** to **RMB 9.4 billion**, primarily due to increased game-related promotional activities[39](index=39&type=chunk) - General and administrative expenses: Decreased by **5% QoQ** to **RMB 31.9 billion**, mainly due to a high base from a one-off share-based compensation expense at an overseas subsidiary in the previous quarter[39](index=39&type=chunk) [Other Financial Information](index=15&type=section&id=%E5%85%B6%E4%BB%96%E8%B2%A1%E5%8B%99%E8%B3%87%E6%96%99) This section provides key financial metrics, including EBITDA, adjusted EBITDA, interest expenses, net cash, and capital expenditure, with reconciliation tables Key Financial Indicators (RMB millions) | Indicator | 2025 Q2 | 2025 Q1 | 2024 Q2 | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | :--- | :--- | :--- | | EBITDA | 79,467 | 73,817 | 62,902 | 153,284 | 127,996 | | Adjusted EBITDA | 85,122 | 81,559 | 68,518 | 166,681 | 137,777 | | Adjusted EBITDA Margin | 46% | 45% | 43% | 46% | 43% | | Capital Expenditure | 19,107 | 27,476 | 8,729 | 46,583 | 23,088 | - Capital expenditure primarily includes investments in **IT infrastructure** (including computer equipment, spare parts, and software), **data centers**, **land use rights**, **office parks**, and **intellectual property** (excluding media content)[43](index=43&type=chunk) [Non-IFRS Financial Measures](index=17&type=section&id=%E9%9D%9E%E5%9C%8B%E9%9A%9B%E8%B2%A1%E5%8B%99%E5%A0%B1%E5%91%8A%E6%BA%96%E5%89%87%E8%B2%A1%E5%8B%99%E8%A8%88%E9%87%8F) This section explains the purpose of non-IFRS financial measures and provides reconciliation to IFRS, aiding investors in assessing core business performance - Non-IFRS financial measures aim to exclude certain non-cash items and the impact of certain investment-related transactions, providing useful supplementary information for investors to assess the Group's core business performance[44](index=44&type=chunk) - Non-IFRS operating profit was **RMB 69.248 billion** in Q2 2025 and **RMB 138.568 billion** in H1 2025[44](index=44&type=chunk)[47](index=47&type=chunk) - Non-IFRS profit attributable to equity holders was **RMB 63.052 billion** in Q2 2025 and **RMB 124.381 billion** in H1 2025[44](index=44&type=chunk)[47](index=47&type=chunk) [Investments Held](index=20&type=section&id=%E6%89%80%E6%8C%81%E6%8A%95%E8%B3%87) This section discloses the investment portfolio's size, composition, and objectives as of June 30, 2025, including significant investments like Sea Limited - As of June 30, 2025, the Group's investment portfolio was approximately **RMB 948.262 billion**, primarily aimed at strengthening core business leadership and complementing the "Connect" strategy[50](index=50&type=chunk) - Fair value of investments in listed companies (excluding subsidiaries) was **RMB 714.3 billion**; carrying value of investments in unlisted companies (excluding subsidiaries) was **RMB 342.3 billion**[50](index=50&type=chunk) - The Group holds approximately **104 million Class A ordinary shares** of Sea Limited, representing about **17.6%** of its total issued shares, with a carrying value of approximately **RMB 119.4 billion**[53](index=53&type=chunk) - For the six months ended June 30, 2025, the Group recorded a return from its investment portfolio of **RMB 10.647 billion**, an increase of **28% YoY**[54](index=54&type=chunk) [Liquidity and Financial Resources](index=22&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) This section outlines the cash and debt position as of June 30, 2025, along with free cash flow generation and encumbrance information - As of June 30, 2025, the Group's net cash was **RMB 74.6 billion**, with the QoQ decrease primarily due to the payment of the 2024 fiscal year final dividend of **RMB 37.5 billion** in the quarter[56](index=56&type=chunk) - In Q2 2025, the Group generated **free cash flow of RMB 43 billion**[57](index=57&type=chunk) - As of June 30, 2025, the Group pledged partial equity interests in certain investee companies with a total carrying value of approximately **RMB 3.5 billion** to certain investment banks as collateral for obligations under derivative transactions[58](index=58&type=chunk) [Review Report on Interim Financial Information](index=22&type=section&id=%E4%B8%AD%E6%9C%9F%E8%B2%A1%E5%8B%99%E8%B3%87%E6%96%99%E7%9A%84%E5%AF%A9%E9%96%B1%E5%A0%B1%E5%91%8A) PricewaterhouseCoopers reviewed the interim financial information, concluding its preparation in accordance with International Accounting Standard 34 "Interim Financial Reporting" - The auditor is **PricewaterhouseCoopers**[59](index=59&type=chunk) - The scope of review is substantially less than an audit conducted in accordance with International Standards on Auditing, thus the auditor cannot guarantee awareness of all significant matters that might be identified in an audit, and therefore does not express an audit opinion[60](index=60&type=chunk) - Based on the review, the auditor found no matters leading them to believe that the Group's interim financial information was not prepared in all material respects in accordance with International Accounting Standard 34 "Interim Financial Reporting"[61](index=61&type=chunk) [Condensed Consolidated Statement of Profit or Loss](index=23&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%94%B6%E7%9B%8A%E8%A1%A8) This section presents the condensed consolidated statement of profit or loss for the three and six months ended June 30, 2025, detailing revenue, costs, expenses, and profit Condensed Consolidated Statement of Profit or Loss Summary (RMB millions) | Indicator | 2025 Q2 | 2024 Q2 | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | :--- | :--- | | Revenue | 184,504 | 161,117 | 364,526 | 320,618 | | Cost of Revenue | (79,491) | (75,222) | (159,020) | (150,853) | | Gross Profit | 105,013 | 85,895 | 205,506 | 169,765 | | Operating Profit | 60,104 | 50,732 | 117,670 | 103,288 | | Profit for the Period | 56,044 | 48,366 | 105,769 | 91,017 | | Profit Attributable to Equity Holders | 55,628 | 47,630 | 103,449 | 89,519 | [Condensed Consolidated Statement of Comprehensive Income](index=24&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) This section presents the condensed consolidated statement of comprehensive income for the three and six months ended June 30, 2025, including profit and other comprehensive income items - Total comprehensive income for the period: **RMB 126.944 billion** in Q2 2025 and **RMB 206.768 billion** in H1 2025[65](index=65&type=chunk) - Net gain from fair value changes of financial assets at fair value through other comprehensive income: **RMB 67.681 billion** in Q2 2025 and **RMB 94.042 billion** in H1 2025[65](index=65&type=chunk) - Total comprehensive income attributable to equity holders: **RMB 122.756 billion** in Q2 2025 and **RMB 198.614 billion** in H1 2025[65](index=65&type=chunk) [Condensed Consolidated Statement of Financial Position](index=26&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) This section provides the condensed consolidated statement of financial position as of June 30, 2025, detailing the composition of assets, liabilities, and equity Condensed Consolidated Statement of Financial Position Summary (RMB millions) | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Assets | 2,013,310 | 1,780,995 | | Total Equity | 1,202,849 | 1,053,896 | | Total Liabilities | 810,461 | 727,099 | | Non-current Assets | 1,467,813 | 1,284,815 | | Current Assets | 545,497 | 496,180 | | Non-current Liabilities | 375,350 | 330,190 | | Current Liabilities | 435,111 | 396,909 | - Financial assets at fair value through other comprehensive income increased from **RMB 302.36 billion** as of December 31, 2024, to **RMB 401.756 billion** as of June 30, 2025[67](index=67&type=chunk) [Condensed Consolidated Statement of Changes in Equity](index=28&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) This section presents the condensed consolidated statement of changes in equity for the six months ended June 30, 2025, detailing movements in capital, reserves, and non-controlling interests - Total comprehensive income attributable to equity holders for H1 2025 was **RMB 198.614 billion**[73](index=73&type=chunk) - Share repurchases and cancellations in H1 2025 resulted in a **RMB 34.956 billion** reduction in retained earnings[75](index=75&type=chunk) - Cash dividends paid in H1 2025 resulted in a **RMB 37.665 billion** reduction in retained earnings[75](index=75&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=32&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E7%8F%BE%E9%87%91%E6%B5%81%E9%87%8F%E8%A1%A8) This section provides the condensed consolidated statement of cash flows for the six months ended June 30, 2025, covering cash flows from operating, investing, and financing activities Condensed Consolidated Statement of Cash Flows Summary (RMB millions) | Indicator | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | | Net cash flows from operating activities | 151,265 | 126,458 | | Net cash flows used in investing activities | (72,407) | (45,449) | | Net cash flows used in financing activities | (30,111) | (99,781) | | Net increase / (decrease) in cash and cash equivalents | 48,747 | (18,772) | | Cash and cash equivalents at end of period | 182,057 | 153,511 | - Share repurchases paid in H1 2025 amounted to **RMB 34.525 billion**[82](index=82&type=chunk) - Dividends paid to the Company's shareholders in H1 2025 amounted to **RMB 37.535 billion**[82](index=82&type=chunk) Notes to the Interim Financial Information [General Information](index=35&type=section&id=%E4%B8%80%E8%88%AC%E8%B3%87%E6%96%99) This section introduces the company's registration, listing, principal business activities, and the currency and review status of the interim financial information - Tencent Holdings Limited is incorporated in the Cayman Islands, and its shares have been listed on the Main Board of The Stock Exchange of Hong Kong Limited since June 16, 2004[83](index=83&type=chunk) - The Group primarily provides **Value-Added Services**, **Marketing Services**, and **FinTech and Business Services**[83](index=83&type=chunk) - The interim financial information is unaudited but has been reviewed by the Company's external auditor[85](index=85&type=chunk) [Basis of Preparation and Presentation](index=35&type=section&id=%E7%B7%A8%E8%A3%BD%E5%8F%8A%E5%91%88%E5%88%97%E5%9F%BA%E6%BA%96) This section states that the interim financial information is prepared according to IAS 34 "Interim Financial Reporting" and should be read with the 2024 annual financial statements - The interim financial information is prepared in accordance with **International Accounting Standard 34 "Interim Financial Reporting"** issued by the International Accounting Standards Board[86](index=86&type=chunk) [Significant Accounting Policies Information](index=35&type=section&id=%E9%87%8D%E8%A6%81%E6%9C%83%E8%A8%88%E6%94%BF%E7%AD%96%E8%B3%87%E6%96%99) This section explains that interim financial information accounting policies are consistent with 2024 financial statements and lists adopted and newly issued standard amendments - The accounting policies and calculation methods used in preparing the interim financial information are consistent in all material respects with those used in the 2024 financial statements, prepared on a historical cost basis and revised for financial assets and liabilities measured at fair value[87](index=87&type=chunk) - The Group first adopted the amendment to **IAS 21 "Lack of Exchangeability"** for the financial year beginning January 1, 2025, which had no significant impact on the interim financial information[90](index=90&type=chunk) - **IFRS 18 "Presentation and Disclosure in Financial Statements"**, effective January 1, 2027, primarily impacts the presentation and disclosure of income and expenses and introduces requirements for disclosing management-defined performance measures, with no significant impact expected on the interim financial information[92](index=92&type=chunk) [Estimates](index=37&type=section&id=%E4%BC%B0%E8%A8%88) This section emphasizes that interim financial information preparation involves management judgments, estimates, and assumptions, with actual results potentially differing - In preparing the interim financial information, the significant judgments made by management in applying the Group's accounting policies and the key sources of estimation uncertainty are the same as those used in the 2024 financial statements[93](index=93&type=chunk) [Financial Risk Management](index=37&type=section&id=%E8%B2%A1%E5%8B%99%E9%A2%A8%E9%9A%AA%E7%AE%A1%E7%90%86) This section discusses the Group's market, credit, and liquidity risks, capital management policy, and fair value measurement hierarchy and methods - The Group's operations are exposed to various financial risks: **market risk** (including foreign exchange risk, price risk, and interest rate risk), **credit risk**, and **liquidity risk**[94](index=94&type=chunk) - For the six months ended June 30, 2025, the Group reported a **net exchange loss of approximately RMB 874 million**[95](index=95&type=chunk) - The Group's capital management policy aims to safeguard its ability to continue as a going concern and support its sustainable development, monitoring its capital through regular review of its total debt/adjusted EBITDA ratio[96](index=96&type=chunk)[98](index=98&type=chunk) - Fair value measurements are categorized into three levels, with Level 3 instruments primarily including investments in unlisted companies, other financial assets, and other financial liabilities classified as financial assets at fair value through profit or loss or financial assets at fair value through other comprehensive income[101](index=101&type=chunk)[109](index=109&type=chunk) [Segment Information and Revenue](index=43&type=section&id=%E5%88%86%E9%83%A8%E8%B3%87%E6%96%99%E5%8F%8A%E6%94%B6%E5%85%A5) This section details the Group's operating segments (VAS, Marketing, FinTech & Business, Others) and their revenue and gross profit contributions by source - The Group had the following reportable segments for the three and six months ended June 30, 2025 and 2024: **Value-Added Services**, **Marketing Services**, **FinTech and Business Services**, and **Others**[114](index=114&type=chunk) 2025 Q2 Segment Revenue (RMB millions) | Segment | Revenue | | :--- | :--- | | Value-Added Services | 91,368 | | Marketing Services | 35,762 | | FinTech and Business Services | 55,536 | | Others | 1,838 | | Total | 184,504 | 2025 H1 Segment Revenue (RMB millions) | Segment | Revenue | | :--- | :--- | | Value-Added Services | 183,501 | | Marketing Services | 67,615 | | FinTech and Business Services | 110,443 | | Others | 2,967 | | Total | 364,526 | - Games revenue: **RMB 59.153 billion** in Q2 2025 and **RMB 118.654 billion** in H1 2025[125](index=125&type=chunk) [Expenses by Nature](index=47&type=section&id=%E6%8C%89%E6%80%A7%E8%B3%AA%E5%8A%83%E5%88%86%E7%9A%84%E9%96%8B%E6%94%AF) This section lists expenses by nature, including transaction costs, employee benefits, content, intangible asset amortization, depreciation, and promotion fees - For the six months ended June 30, 2025, the Group incurred approximately **RMB 39.161 billion** in research and development expenses, primarily comprising **RMB 30.178 billion** in employee benefit expenses[126](index=126&type=chunk) - For the six months ended June 30, 2025, amortization of intangible assets was **RMB 16.120 billion**, mainly related to media content such as long-form video and music content, game licenses, and other content[127](index=127&type=chunk)[129](index=129&type=chunk) [Other Gains / (Losses) Net](index=48&type=section&id=%E5%85%B6%E4%BB%96%E6%94%B6%E7%9B%8A%E2%88%95%EF%BC%88%E8%99%A7%E6%90%8D%EF%BC%89%E5%87%80%E9%A1%8D) This section discloses the composition of other gains / (losses) net, primarily including government grants and tax refunds, and other items - Other gains / (losses) net for Q2 2025 was **RMB (3.578) billion**, and for H1 2025 was **RMB (4.975) billion**[130](index=130&type=chunk) [Investment Gains / (Losses) Net and Others](index=49&type=section&id=%E6%8A%95%E8%B3%87%E6%94%B6%E7%9B%8A%E2%88%95%EF%BC%88%E8%99%A7%E6%90%8D%EF%BC%89%E5%87%80%E9%A1%8D%E5%8F%8A%E5%85%B6%E4%BB%96) This section details investment gains/(losses) net and other items, including disposal gains, fair value changes, impairment provisions, and dividend income - Investment gains / (losses) net and others for H1 2025 was **RMB 4.045 billion**[131](index=131&type=chunk) - Net gain from disposal and deemed disposal of investee companies for H1 2025 was **RMB 251 million**[131](index=131&type=chunk) - Net fair value gain on financial assets at fair value through profit or loss for H1 2025 was **RMB 1.378 billion**[131](index=131&type=chunk) - Share of profit of associates and joint ventures for H1 2025 was **RMB 9.054 billion**[131](index=131&type=chunk) [Finance Costs](index=50&type=section&id=%E8%B2%A1%E5%8B%99%E6%88%90%E6%9C%AC) This section discloses the composition of finance costs, primarily including interest and related expenses and net exchange losses - Finance costs for H1 2025 were **RMB 7.801 billion**, mainly comprising interest and related expenses and net exchange losses[133](index=133&type=chunk) [Taxation](index=51&type=section&id=%E7%A8%85%E9%A0%85) This section explains income tax expense recognition, applicable tax rates, incentives, and the impact of VAT, other taxes, and the OECD Pillar Two template - The corporate income tax rate in China is generally **25%**, with certain subsidiaries approved as high-tech enterprises eligible for a preferential corporate income tax rate of **15%**[135](index=135&type=chunk) - Hong Kong profits tax provision has been made based on estimated assessable profits at a rate of **16.5%**[135](index=135&type=chunk) - OECD Pillar Two legislation has come into effect in Hong Kong, Luxembourg, Netherlands, Ireland, and certain other jurisdictions where the Group operates, with no significant current tax impact for the six months ended June 30, 2025[145](index=145&type=chunk) [Earnings Per Share](index=54&type=section&id=%E6%AF%8F%E8%82%A1%E7%9B%88%E5%88%A9) This section provides the calculation methods and specific data for basic and diluted earnings per share Earnings Per Share (RMB per share) | Indicator | 2025 Q2 | 2024 Q2 | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | :--- | :--- | | Basic EPS | 6.115 | 5.112 | 11.367 | 9.590 | | Diluted EPS | 5.996 | 4.994 | 11.126 | 9.377 | [Dividends](index=56&type=section&id=%E8%82%A1%E6%81%AF) This section discloses the distribution of the 2024 fiscal year final dividend and confirms no interim dividend was declared for H1 2025 - Pursuant to the Board's resolution, the 2024 fiscal year final dividend of **HKD 4.50 per share** was paid during the six months ended June 30, 2025, totaling approximately **HKD 40.966 billion**[152](index=152&type=chunk) - The Board did not declare any interim dividend for the six months ended June 30, 2025 and 2024[153](index=153&type=chunk) [Property, Plant and Equipment, Construction in Progress, Investment Properties and Intangible Assets](index=56&type=section&id=%E7%89%A9%E6%A5%AD%E3%80%81%E8%A8%AD%E5%82%99%E5%8F%8A%E5%99%A8%E6%9D%90%E3%80%81%E5%9C%A8%E5%BB%BA%E5%B7%A5%E7%A8%8B%E3%80%81%E6%8A%95%E8%B3%87%E7%89%A9%E6%A5%AD%E4%BB%A5%E5%8F%8A%E7%84%A1%E5%BD%A2%E8%B3%87%E7%94%A2) This section analyzes net book value changes for property, plant and equipment, construction in progress, investment properties, and intangible assets, including server useful life adjustments - As of June 30, 2025, the net book value of property, plant and equipment was **RMB 118.565 billion**, and intangible assets was **RMB 215.832 billion**[154](index=154&type=chunk) - Effective January 1, 2025, the Group adjusted the estimated useful lives of certain servers under computer and other operating equipment within property, plant and equipment from **4 years to 6 years**, with no significant impact on depreciation expense reduction and net profit increase for the current and future periods[155](index=155&type=chunk) [Land Use Rights](index=57&type=section&id=%E5%9C%9F%E5%9C%B0%E4%BD%BF%E7%94%A8%E6%AC%8A) This section discloses the net book value of land use rights and their changes, primarily consisting of prepaid operating lease payments for land in mainland China - As of June 30, 2025, the net book value of land use rights was **RMB 22.693 billion**, primarily representing prepaid operating lease payments for land in mainland China with remaining lease terms ranging from **24 to 50 years**[157](index=157&type=chunk) [Leases (Other than Land Use Rights)](index=58&type=section&id=%E7%A7%9F%E8%B3%83%EF%BC%88%E9%99%A4%E5%9C%9F%E5%9C%B0%E4%BD%BF%E7%94%A8%E6%AC%8A%E5%A4%96%EF%BC%89) This section analyzes changes in right-of-use assets and lease liabilities, along with lease-related depreciation, interest, and cash outflows - As of June 30, 2025, the net book value of right-of-use assets (other than land use rights) was **RMB 16.952 billion**[159](index=159&type=chunk) - For the six months ended June 30, 2025, depreciation expense for right-of-use assets was **RMB 3.070 billion**[160](index=160&type=chunk) - For the six months ended June 30, 2025, total cash outflows for leases included in financing activities were approximately **RMB 3.678 billion**[162](index=162&type=chunk) [Investments in Associates](index=60&type=section&id=%E6%96%BC%E8%81%AF%E7%87%9F%E5%85%AC%E5%8F%B8%E7%9A%84%E6%8A%95%E8%B3%87) This section discloses the composition of investments in associates (listed and unlisted entities), changes in carrying value, and impairment assessment - As of June 30, 2025, total investments in associates amounted to **RMB 307.573 billion**, comprising **RMB 165.323 billion** in listed entities and **RMB 142.250 billion** in unlisted entities[163](index=163&type=chunk) - For the six months ended June 30, 2025, the Group's investments in associates increased by **RMB 9.984 billion**, mainly due to additional investments in certain new and existing associates[165](index=165&type=chunk)[169](index=169&type=chunk) - For the six months ended June 30, 2025, impairment reversals for investments in associates totaled approximately **RMB 355 million**[167](index=167&type=chunk) [Financial Assets at Fair Value Through Profit or Loss](index=63&type=section&id=%E4%BB%A5%E5%85%AC%E5%85%81%E5%83%B9%E5%80%BC%E8%A8%88%E9%87%8F%E4%B8%94%E5%85%B6%E8%AE%8A%E5%8B%95%E8%A8%88%E5%85%A5%E6%90%8D%E7%9B%8A%E7%9A%84%E9%87%91%E8%9E%8D%E8%B3%87%E7%94%A2) This section discloses the composition and changes of financial assets at fair value through profit or loss, including listed, unlisted, and wealth management investments - As of June 30, 2025, total financial assets at fair value through profit or loss amounted to **RMB 225.498 billion**[170](index=170&type=chunk) - For the six months ended June 30, 2025, the Group's additions and transfers primarily included new and additional investments totaling approximately **RMB 71.190 billion** in wealth management investments, certain investee companies (mainly engaged in investment funds, FinTech, game development, and healthcare), and others[171](index=171&type=chunk)[173](index=173&type=chunk) [Financial Assets at Fair Value Through Other Comprehensive Income](index=64&type=section&id=%E4%BB%A5%E5%85%AC%E5%85%81%E5%83%B9%E5%80%BC%E8%A8%88%E9%87%8F%E4%B8%94%E5%85%B6%E8%AE%8A%E5%8B%95%E8%A8%88%E5%85%A5%E5%85%B6%E4%BB%96%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E7%9A%84%E9%87%91%E8%9E%8D%E8%B3%87%E7%94%A2) This section discloses the composition of financial assets at fair value through other comprehensive income and their changes - As of June 30, 2025, total financial assets at fair value through other comprehensive income amounted to **RMB 408.360 billion**[174](index=174&type=chunk) - For the six months ended June 30, 2025, fair value gains amounted to **RMB 96.218 billion**[176](index=176&type=chunk) [Prepayments, Deposits and Other Assets](index=66&type=section&id=%E9%A0%90%E4%BB%98%E6%AC%BE%E9%A0%85%E3%80%81%E6%8C%89%E9%87%91%E5%8F%8A%E5%85%B6%E4%BB%96%E8%B3%87%E7%94%A2) This section details the composition of prepayments, deposits, and other assets, including media content, capital asset prepayments, loans, and game royalties - As of June 30, 2025, total prepayments, deposits, and other assets amounted to **RMB 140.584 billion**[178](index=178&type=chunk) - Loans to investee companies and investee company shareholders are mostly repayable within **one to six years** (classified as non-current assets) or within **one year** (classified as current assets), bearing interest at an annual rate not exceeding **10.0%**[180](index=180&type=chunk) [Other Financial Assets](index=68&type=section&id=%E5%85%B6%E4%BB%96%E9%87%91%E8%9E%8D%E8%B3%87%E7%94%A2) This section discloses the composition of other financial assets, including amortized cost wealth management investments and fair value derivatives - As of June 30, 2025, total other financial assets amounted to **RMB 5.538 billion**[182](index=182&type=chunk) - Derivatives and others include outstanding interest rate swap contracts, measured at fair value, with a total notional principal of **USD 2.94 billion** (approximately **RMB 21.046 billion**)[182](index=182&type=chunk) [Deferred Income Tax](index=69&type=section&id=%E9%81%9E%E5%BB%B6%E6%89%80%E5%BE%97%E7%A8%85) This section provides an analysis of deferred income tax assets and liabilities, including changes before and after offsetting - As of June 30, 2025, net deferred income tax assets were **RMB 30.004 billion**, and net deferred income tax liabilities were **RMB (16.888) billion**[183](index=183&type=chunk) [Trade Receivables](index=71&type=section&id=%E6%87%89%E6%94%B6%E8%B3%87%E6%AC%BE) This section provides an aging analysis of trade receivables, primarily from marketing services clients, FinTech and cloud clients, and others - As of June 30, 2025, total trade receivables amounted to **RMB 51.315 billion**[186](index=186&type=chunk) - Trade receivables are mostly denominated in RMB, primarily from marketing services clients and agencies, FinTech and cloud clients, content production-related clients, and third-party platform providers, with credit terms typically ranging from **30 to 90 days**[186](index=186&type=chunk)[187](index=187&type=chunk) [Share Capital](index=72&type=section&id=%E8%82%A1%E6%9C%AC) This section discloses changes in the company's authorized and issued share capital, including allotments, option grants, and share repurchases and cancellations - As of June 30, 2025, the total number of issued ordinary shares decreased to **9,165,513,622 shares**, mainly due to share repurchases and cancellations[191](index=191&type=chunk) - For the six months ended June 30, 2025, the Company repurchased a total of **81,867,000 shares** in the market, of which **4,910,000 shares** had not yet been cancelled as of June 30, 2025[192](index=192&type=chunk) [Share-based Payments](index=73&type=section&id=%E4%BB%A5%E8%82%A1%E4%BB%BD%E7%82%BA%E5%9F%BA%E7%A4%8E%E7%9A%84%E6%94%AF%E4%BB%98) This section details the terms, changes, and fair value valuation of the share option and share award schemes, including subsidiary compensation plans - For the six months ended June 30, 2025, **24,189,201 share options** were exercised[196](index=196&type=chunk) - As of June 30, 2025, the total number of outstanding share options was **91,400,760**[196](index=196&type=chunk) - For the six months ended June 30, 2025, the weighted average fair value of share options granted was **HKD 174.85 per share** (approximately **RMB 161.48 per share**)[200](index=200&type=chunk) - For the six months ended June 30, 2025, a total of **17,261,799 award shares** were granted under the 2023 Share Award Scheme, of which **59,280 award shares** were granted to the Company's independent non-executive directors[203](index=203&type=chunk) - For the six months ended June 30, 2025, the weighted average fair value of award shares granted was **HKD 519.50 per share** (approximately **RMB 479.77 per share**)[203](index=203&type=chunk) [Borrowings](index=79&type=section&id=%E5%80%9F%E6%AC%BE) This section discloses the composition, principal, interest rates, and repayment periods for long-term and short-term bank borrowings, including interest rate swaps - As of June 30, 2025, the Group's total borrowings amounted to **RMB 261.597 billion**[79](index=79&type=chunk) - Total principal amount of long-term RMB bank borrowings was **RMB 133.425 billion**, and USD bank borrowings was **USD 6.9 billion**[212](index=212&type=chunk) - Total principal amount of short-term RMB bank borrowings was **RMB 39.174 billion**, and USD bank borrowings was **USD 2.25 billion**[213](index=213&type=chunk) [Bills Payable](index=82&type=section&id=%E6%87%89%E4%BB%98%E7%A5%A8%E6%93%9A) This section discloses the principal, interest rates, and repayment periods for long-term and short-term USD bills payable, along with fair value information - As of June 30, 2025, total bills payable amounted to **RMB 132.218 billion**[217](index=217&type=chunk) - Total principal amount of USD bills payable was **USD 18.55 billion**, with annual interest rates ranging from **1.375% to 4.700%**[217](index=217&type=chunk) - For the six months ended June 30, 2025, a batch of bills payable with a total principal amount of **USD 900 million**, issued by the Group in February 2015, matured and was fully repaid[218](index=218&type=chunk) [Long-term Payables](index=83&type=section&id=%E9%95%B7%E6%9C%9F%E6%87%89%E4%BB%98%E6%AC%BE%E9%A0%85) This section discloses the composition of long-term payables, primarily cash-settled share-based payments, media content, and online game royalties - As of June 30, 2025, total long-term payables amounted to **RMB 12.801 billion**[219](index=219&type=chunk) [Other Financial Liabilities](index=84&type=section&id=%E5%85%B6%E4%BB%96%E9%87%91%E8%9E%8D%E8%B2%A0%E5%82%B5) This section discloses the composition of other financial liabilities, including redemption liabilities, contingent consideration, and others - As of June 30, 2025, total other financial liabilities amounted to **RMB 11.925 billion**[221](index=221&type=chunk) - Redemption liabilities of approximately **RMB 9.899 billion** include those arising from put option arrangements with non-controlling shareholders of acquired subsidiaries[221](index=221&type=chunk) [Trade Payables](index=85&type=section&id=%E6%87%89%E4%BB%98%E8%B3%87%E6%AC%BE) This section provides an aging analysis of trade payables - As of June 30, 2025, total trade payables amounted to **RMB 130.501 billion**[222](index=222&type=chunk) [Other Payables and Accruals](index=85&type=section&id=%E5%85%B6%E4%BB%96%E6%87%89%E4%BB%98%E6%AC%BE%E9%A0%85%E5%8F%8A%E9%A0%90%E6%8F%90%E8%B2%BB%E7%94%A8) This section discloses the composition of other payables and accruals, including employee costs, selling and marketing expenses, and investment purchase consideration - As of June 30, 2025, total other payables and accruals amounted to **RMB 76.862 billion**[223](index=223&type=chunk) [Deferred Revenue](index=86&type=section&id=%E9%81%9E%E5%BB%B6%E6%94%B6%E5%85%A5) This section explains the composition of deferred revenue, primarily including contract liabilities and refundable prepayments - The Group's deferred revenue includes contract liabilities and refundable prepayments for certain businesses, mainly comprising unamortized virtual items, prepaid membership fees, prepaid tokens, or top-up cards[226](index=226&type=chunk) [Business Combinations](index=86&type=section&id=%E6%A5%AD%E5%8B%99%E5%90%88%E4%BD%B5) This section discloses the business combination involving the acquisition of 100% equity in a game company completed in H1 2025 - For the six months ended June 30, 2025, the Group completed the acquisition of **100% equity** in a game company for a cash consideration of approximately **USD 1.2 billion** (approximately **RMB 8.8 billion**)[227](index=227&type=chunk) - The Group recognized goodwill of approximately **RMB 5.2 billion** from this transaction, primarily due to expected operating synergies and economies of scale from the combined business[228](index=228&type=chunk) [Contingent Matters](index=86&type=section&id=%E6%88%96%E6%9C%89%E4%BA%8B%E9%A0%85) This section confirms no significant contingent liabilities as of June 30, 2025 - The Group had no significant contingent liabilities as of June 30, 2025[230](index=230&type=chunk) [Commitments](index=87&type=section&id=%E6%89%BF%E6%93%94) This section discloses capital and other commitments, including for construction, investments, bandwidth, game agency, and media content agreements - As of June 30, 2025, total contracted capital commitments amounted to **RMB 14.452 billion**[231](index=231&type=chunk) - The Group's total contracted commitments not yet provided for in the condensed consolidated financial statements, primarily under agreements for bandwidth, online game agency, media content, and other technical services, amounted to **RMB 33.928 billion**[231](index=231&type=chunk) - A subsidiary of the Group, Tencent Music, intends to acquire an existing investee company (one of China's leading online audio platforms), with the transaction closing contingent on regulatory approvals and certain other closing conditions[231](index=231&type=chunk) [Related Party Transactions](index=88&type=section&id=%E9%97%9C%E8%81%AF%E6%96%B9%E4%BA%A4%E6%98%93) This section discloses significant related party transactions with associates and joint ventures, including service provision, purchases, and period-end balances - For the six months ended June 30, 2025, the Group entered into commercial arrangements with certain associates and joint ventures to provide marketing services, FinTech and business services, and other services, recognizing revenue of **RMB 2.197 billion**, **RMB 23.510 billion**, and **RMB 2.064 billion**, respectively[234](index=234&type=chunk) - For the six months ended June 30, 2025, the Group entered into commercial arrangements with certain associates and joint ventures to purchase online game licenses and related services, media content and related services, FinTech and business services, and others, incurring costs and expenses of **RMB 2.506 billion**, **RMB 1.307 billion**, **RMB 843 million**, and **RMB 855 million**, respectively[234](index=234&type=chunk) - As of June 30, 2025, trade receivables and other receivables from related parties were **RMB 11.443 billion** and **RMB 300 million**, respectively[235](index=235&type=chunk) [Events After the Reporting Period](index=89&type=section&id=%E7%B5%90%E7%AE%97%E6%97%A5%E5%BE%8C%E4%BA%8B%E9%A0%85) This section confirms no significant events after the reporting period up to the date of approval of the interim financial information - No significant events after the reporting period occurred from July 1, 2025, to the date of approval of the interim financial information by the Board on August 13, 2025[237](index=237&type=chunk) Other Information [Directors' Securities Interests](index=90&type=section&id=%E8%91%A3%E4%BA%8B%E7%9A%84%E8%AD%89%E5%88%B8%E6%AC%8A%E7%9B%8A) This section discloses the interests and short positions of directors and chief executives in the company's shares, underlying shares, and debentures as of June 30, 2025 - As of June 30, 2025, **Mr. Pony Ma** held **804,859,700 shares** of the Company, representing approximately **8.78%** of the total shares[239](index=239&type=chunk) - Several independent non-executive directors, including **Li Dong Sheng**, **Ian Charles Stone**, **Yang Siu Shun**, **Ke Yang**, and **Zhang Xiu Lan**, held shares and/or unvested award shares of the Company[239](index=239&type=chunk) [Share Option Scheme](index=92&type=section&id=%E8%B3%BC%E8%82%A1%E6%AC%8A%E8%A8%88%E5%8A%83) This section details the terms, changes, outstanding particulars, and fair value valuation methods of the 2023 Share Option Scheme - For the six months ended June 30, 2025, the Company had one share option scheme in effect and continuing, namely the **2023 Share Option Scheme**[243](index=243&type=chunk) - For the six months ended June 30, 2025, **24,189,201 share options** were exercised[245](index=245&type=chunk) - As of June 30, 2025, the total number of outstanding share options was **91,400,760**[245](index=245&type=chunk) - For the six months ended June 30, 2025, the weighted average fair value of share options granted was **HKD 174.85 per share** (approximately **RMB 161.48 per share**)[200](index=200&type=chunk) [Share Award Scheme](index=99&type=section&id=%E8%82%A1%E4%BB%BD%E7%8D%8E%E5%8B%B5%E8%A8%88%E5%8A%83) This section details the terms, changes, particulars of award shares held by directors and employees, and fair value valuation of the 2023 Share Award Scheme - For the six months ended June 30, 2025, the Company had one share award scheme in effect and continuing, namely the **2023 Share Award Scheme**[255](index=255&type=chunk) - The total number of shares that may be awarded under the 2023 Share Award Scheme shall not exceed **4.5%** of the total issued shares as of the adoption date[255](index=255&type=chunk) - For the six months ended June 30, 2025, a total of **17,261,799 award shares** were granted under the 2023 Share Award Scheme, of which **59,280 award shares** were granted to the Company's independent non-executive directors[258](index=258&type=chunk) - As of June 30, 2025, the Company's directors still held a total of **192,889 unvested award shares**[259](index=259&type=chunk) - For the six months ended June 30, 2025, the weighted average fair value of award shares granted was **HKD 519.50 per share** (approximately **RMB 479.77 per share**)[203](index=203&type=chunk) [Directors' Biographies and Other Information](index=111&type=section&id=%E8%91%A3%E4%BA%8B%E5%B1%A5%E6%AD%B7%E5%8F%8A%E5%85%B6%E4%BB%96%E8%B3%87%E6%96%99) This section provides detailed biographies, experience, appointments, and remuneration for the company's executive, non-executive, and independent non-executive directors - **Pony Ma**, 53, Executive Director, Chairman of the Board, and CEO of the Company, is fully responsible for the Group's strategic planning, positioning, and management, with over **31 years of experience** in the telecommunications and internet industries[281](index=281&type=chunk) - **Jacobus Petrus (Koos) Bekker**, 72, Non-Executive Director, led the founding team of M-Net/MultiChoice pay-TV business and became CEO of Naspers in 1997[282](index=282&type=chunk) - **Charles St Leger Searle**, 61, Non-Executive Director, currently CEO of Naspers Internet Listed Assets, with over **31 years of international experience** in the telecommunications and internet industries[283](index=283&type=chunk) - **Li Dong Sheng**, **Ian Charles Stone**, **Yang Siu Shun**, **Ke Yang**, and **Zhang Xiu Lan** are Independent Non-Executive Directors, possessing extensive experience in their respective fields (IT, telecommunications, accounting, oncology, social security) and receiving director's fees[285](index=285&type=chunk)[286](index=286&type=chunk)[287](index=287&type=chunk)[288](index=288&type=chunk)[289](index=289&type=chunk) [Interests of Major Shareholders](index=114&type=section&id=%E4%B8%BB%E8%A6%81%E8%82%A1%E6%9D%B1%E7%9A%84%E6%AC%8A%E7%9B%8A) This section discloses the interests or short positions of major shareholders in the company's shares or underlying shares as of June 30, 2025 - As of June 30, 2025, **MIH Internet Holdings B.V.** held **2,112,481,500 shares** of the Company, representing approximately **23.05%** of the total shares[291](index=291&type=chunk) - As of June 30, 2025, **Advance Data Services Limited** held **804,859,700 shares** of the Company, representing approximately **8.78%** of the total shares[291](index=291&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=115&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) This section discloses the company's repurchase and cancellation of listed securities during H1 2025 - For the six months ended June 30, 2025, the Company repurchased a total of **81,867,000 shares** on the Stock Exchange for a total consideration of approximately **HKD 36.5 billion** (excluding expenses)[294](index=294&type=chunk) - The repurchased shares were subsequently cancelled, aiming to enhance shareholder value in the long term[294](index=294&type=chunk) [Employees and Remuneration Policy](index=115&type=section&id=%E5%83%B1%E5%93%A1%E5%8F%8A%E9%85%AC%E9%87%91%E6%94%BF%E7%AD%96) This section provides the number of employees and remuneration policy as of June 30, 2025 - As of June 30, 2025, the Group had **111,221 employees** (June 30, 2024: **105,506 employees**)[295](index=295&type=chunk) - The Group's total remuneration cost for the six months ended June 30, 2025, was **RMB 65 billion** (six months ended June 30, 2024: **RMB 54.3 billion**)[295](index=295&type=chunk) - Employee remuneration policy includes pension schemes and internal training courses, with discretionary bonuses, award shares, and share options granted based on individual performance assessments[295](index=295&type=chunk) [Audit Committee](index=116&type=section&id=%E5%AF%A9%E6%A0%B8%E5%A7%94%E5%93%A1%E6%9C%83) This section states the Audit Committee reviewed interim financial information, discussing accounting standards, risk management, internal controls, and financial reporting - The Audit Committee, together with the auditor, has reviewed the Group's unaudited interim financial information for the three and six months ended June 30, 2025[297](index=297&type=chunk) [Adoption of Code for Securities Transactions by Directors](index=116&type=section&id=%E9%87%87%E7%B4%8D%E6%9C%89%E9%97%9C%E8%91%A3%E4%BA%8B%E8%AD%89%E5%88%B8%E4%BA%A4%E6%98%93%E7%9A%84%E5%AE%88%E5%89%87) This section states the company adopted a code of conduct for directors' securities transactions, with directors confirming compliance - The Company has adopted a code of conduct for directors' securities transactions, with terms no less stringent than those required by the standard code, and directors have confirmed compliance[298](index=298&type=chunk) [Compliance with Corporate Governance Code](index=116&type=section&id=%E9%81%B5%E5%AE%88%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%AE%88%E5%89%87) This section discloses the company's deviations from the Corporate Governance Code, specifically regarding the rotation of directors - The Company deviated from code provision B.2.2 of the Corporate Governance Code (rotation of directors) as Mr. Ian Charles Stone's re-election was considered at the 2025 Annual General Meeting[299](index=299&type=chunk) - The Board believes that the deviation from code provision B.2.2 of the Corporate Governance Code has no significant impact on the Company's overall operations[299](index=299&type=chunk) [Definitions](index=116&type=section&id=%E9%87%8B%E7%BE%A9) This section provides definitions for key terms used in this interim report to ensure clear understanding of the report's content - This section lists definitions for professional terms used in the report, such as **AI** (Artificial Intelligence), **EBITDA** (Earnings Before Interest, Taxes, Depreciation, and Amortization), **IFRS** (International Financial Reporting Standards), **LPR** (Loan Prime Rate), **SOFR** (Secured Overnight Financing Rate), and **SSV & CPP** (Sustainable Social Value & Common Prosperity Program)[301](index=301&type=chunk)[303](index=303&type=chunk)[306](index=306&type=chunk)[307](index=307&type=chunk)

Interim Performance Summary [Interim Condensed Consolidated Statement of Profit or Loss](index=1&type=section&id=1.1%20Interim%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) For the six months ended June 30, 2025, the company reported significant growth in revenue and profit, with revenue up 23.1% to HK$845.6 million and profit attributable to owners up 69.9% to HK$59.9 million Key Data from Interim Condensed Consolidated Statement of Profit or Loss | Metric | June 30, 2025 (HK$ '000) | June 30, 2024 (HK$ '000) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 845,629 | 687,114 | +23.1% | | Cost of sales | (590,525) | (467,604) | +26.3% | | Gross profit | 255,104 | 219,510 | +16.2% | | Operating profit | 84,729 | 65,048 | +30.3% | | Profit for the period | 57,579 | 39,979 | +44.0% | | Profit attributable to owners of the Company | 59,918 | 35,269 | +69.9% | | Basic earnings per share (HK cents) | 13.962 | 8.218 | +69.9% | | Diluted earnings per share (HK cents) | 13.856 | 8.141 | +70.2% | [Interim Condensed Consolidated Statement of Comprehensive Income](index=3&type=section&id=1.2%20Interim%20Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) For the six months ended June 30, 2025, the Group's total comprehensive income for the period significantly increased to HK$65.49 million, primarily due to higher profit for the period and a positive shift in foreign exchange differences from translating overseas operations' financial statements Key Data from Interim Condensed Consolidated Statement of Comprehensive Income | Metric | June 30, 2025 (HK$ '000) | June 30, 2024 (HK$ '000) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Profit for the period | 57,579 | 39,979 | +44.0% | | Exchange differences on translation of financial statements of overseas operations | 7,911 | (1,906) | N/A (from negative to positive) | | Total comprehensive income for the period, net of tax | 65,490 | 38,073 | +72.0% | | Total comprehensive income attributable to owners of the Company | 68,401 | 33,363 | +105.0% | | Total comprehensive income attributable to non-controlling interests | (2,911) | 4,710 | N/A (from positive to negative) | [Interim Condensed Consolidated Statement of Financial Position](index=4&type=section&id=1.3%20Interim%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's total assets increased to HK$1.962 billion, total equity to HK$1.223 billion, and net current assets significantly improved to HK$395.4 million, indicating a robust financial position Key Data from Interim Condensed Consolidated Statement of Financial Position | Metric | June 30, 2025 (HK$ '000) | December 31, 2024 (HK$ '000) | Change (%) | | :--- | :--- | :--- | :--- | | Total assets | 1,961,637 | 1,944,866 | +0.9% | | Non-current assets | 929,707 | 940,361 | -1.1% | | Current assets | 1,031,930 | 1,004,505 | +2.7% | | Total equity | 1,223,321 | 1,179,289 | +3.7% | | Total liabilities | 738,316 | 765,577 | -3.6% | | Net current assets | 395,421 | 342,780 | +15.3% | | Cash and cash equivalents | 229,069 | 179,638 | +27.5% | Notes to Financial Statements [Basis of Preparation and Accounting Policies](index=6&type=section&id=2.1%20Basis%20of%20Preparation%20and%20Accounting%20Policies) This interim condensed consolidated financial information is prepared under HKAS 34, presented in HKD, and reflects the adoption of new standards without significant policy changes - This interim condensed consolidated financial information is prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting", presented in Hong Kong Dollars, and is unaudited[9](index=9&type=chunk)[10](index=10&type=chunk) - The Group has adopted new and revised standards, which did not result in changes to accounting policies or retrospective adjustments[11](index=11&type=chunk)[13](index=13&type=chunk) - Hong Kong Financial Reporting Standard 18, effective for periods beginning on or after January 1, 2027, is expected to impact the presentation of the statement of profit or loss and disclosure of financial performance, but is not currently expected to have a material impact on operating results and financial position[14](index=14&type=chunk)[15](index=15&type=chunk) [Segment Information](index=7&type=section&id=2.2%20Segment%20Information) The Group's operating segments are primarily manufacturing and trading, with manufacturing focused on headwear production in Bangladesh and Mexico, and trading involving distribution in the US and Europe - Executive Directors determine operating segments based on reports used for strategic decisions and assess performance by reportable segment profit/(loss)[16](index=16&type=chunk)[17](index=17&type=chunk) - The manufacturing business primarily produces headwear, with facilities in Bangladesh and Mexico, serving customers mainly in the United States and Europe[20](index=20&type=chunk) - The trading business involves the trading and distribution of headwear, small leather goods, handbags, and accessories through subsidiaries like H3 Sportgear LLC and San Diego Hat Company, focusing on the US and European markets[20](index=20&type=chunk) [Revenue and Profit](index=8&type=section&id=2.2.1%20Revenue%20and%20Profit) Manufacturing business achieved significant growth in both revenue and profit, while trading business revenue increased but still recorded an operating loss Revenue and Profit by Business Segment | Metric (HK$ '000) | June 30, 2025 (Manufacturing) | June 30, 2024 (Manufacturing) | June 30, 2025 (Trading) | June 30, 2024 (Trading) | June 30, 2025 (Total) | June 30, 2024 (Total) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue from external customers | 537,720 | 445,769 | 307,909 | 241,345 | 845,629 | 687,114 | | Reportable segment profit / (loss) | 120,152 | 93,178 | (43,834) | (37,739) | 76,318 | 55,439 | | Operating profit | - | - | - | - | 84,729 | 65,048 | | Profit for the period | - | - | - | - | 57,579 | 39,979 | [Assets and Liabilities](index=9&type=section&id=2.2.2%20Assets%20and%20Liabilities) Segment assets and liabilities for both manufacturing and trading businesses remained stable, with a slight decrease in overall segment liabilities Assets and Liabilities by Business Segment | Metric (HK$ '000) | June 30, 2025 (Manufacturing) | December 31, 2024 (Manufacturing) | June 30, 2025 (Trading) | December 31, 2024 (Trading) | June 30, 2025 (Total) | December 31, 2024 (Total) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Reportable segment assets | 833,149 | 837,368 | 788,407 | 808,638 | 1,621,556 | 1,646,006 | | Reportable segment liabilities | 229,331 | 271,142 | 210,851 | 207,588 | 440,182 | 478,730 | - Segment assets exclude investment properties, deferred income tax assets, investments accounted for using the equity method, financial assets measured at fair value through profit or loss, recoverable tax, short-term deposits, and cash and cash equivalents[21](index=21&type=chunk) - Segment liabilities exclude current and deferred income tax liabilities, borrowings, and other corporate liabilities not directly attributable to any operating segment's business activities[22](index=22&type=chunk) [Profit Before Income Tax Analysis](index=10&type=section&id=2.3%20Profit%20Before%20Income%20Tax%20Analysis) Operating profit for the period increased to HK$84.729 million, with key cost items including depreciation, amortization, inventory provisions, and impairment of trade receivables, alongside net finance costs Profit Before Income Tax Analysis | Item (HK$ '000) | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Operating profit | 84,729 | 65,048 | | Depreciation of property, plant and equipment | 31,654 | 28,078 | | Depreciation of right-of-use assets | 8,991 | 7,101 | | Amortisation of other intangible assets | 11,239 | 11,995 | | Net provision for inventories | 2,999 | 1,162 | | Net impairment loss on trade receivables | 2,620 | 2,163 | | Finance costs – net | (7,457) | (6,590) | - Net provision for inventories increased to **HK$2.999 million** (2024: HK$1.162 million), primarily due to consideration of inventory conditions, market demand, and historical usage[24](index=24&type=chunk)[26](index=26&type=chunk) - Net impairment loss on trade receivables increased to **HK$2.62 million** (2024: HK$2.163 million), mainly related to expected credit losses from US and European customers[24](index=24&type=chunk)[26](index=26&type=chunk) [Income Tax Expense](index=11&type=section&id=2.4%20Income%20Tax%20Expense) Income tax expense for the period increased to HK$19.693 million, primarily driven by overseas taxation, with Hong Kong profits tax at 16.5% Income Tax Expense Details | Item (HK$ '000) | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Hong Kong profits tax | 507 | 770 | | Overseas taxation | 20,013 | 17,079 | | Deferred income tax | (827) | 615 | | Total income tax expense | 19,693 | 18,464 | - Income tax expense is recognized based on management's estimate of the weighted average annual income tax rate for the entire financial year[27](index=27&type=chunk) [Earnings Per Share](index=12&type=section&id=2.5%20Earnings%20Per%20Share) Significant growth in profit attributable to owners led to a substantial increase in both basic and diluted earnings per share, reaching 13.962 HK cents and 13.856 HK cents respectively Earnings Per Share Data | Metric | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Profit attributable to owners of the Company (HK$ '000) | 59,918 | 35,269 | | Weighted average number of ordinary shares in issue | 429,164,448 | 429,164,448 | | Basic earnings per share (HK cents) | 13.962 | 8.218 | | Diluted earnings per share (HK cents) | 13.856 | 8.141 | - The calculation of diluted earnings per share considers the conversion effect of all outstanding share options[29](index=29&type=chunk) [Dividends](index=13&type=section&id=2.6%20Dividends) The Board declared an interim dividend of 3 HK cents per share, consistent with the prior year, in addition to the final dividend for the previous fiscal year Dividends Declared and Paid | Dividend Type | June 30, 2025 (HK$ '000) | June 30, 2024 (HK$ '000) | | :--- | :--- | :--- | | Interim dividend declared (3 HK cents per share) | 12,875 | 12,875 | | Final dividend paid for 2024 (5 HK cents per share) | 21,458 | 25,750 | | Final dividend paid for 2023 (6 HK cents per share) | - | 25,750 | - The proposed interim dividend amount is based on 429,164,448 issued shares as of June 30, 2025[32](index=32&type=chunk) [Asset Details](index=14&type=section&id=2.7%20Asset%20Details) The Group saw reduced investment in property, plant, and equipment but an increase in right-of-use assets, while investment properties recorded a fair value loss and trade receivables grew - During the period, **HK$26.16 million** was invested in property, plant and equipment (2024: HK$127.6 million for property acquisition), and **nil** in intangible assets (2024: HK$28.678 million)[35](index=35&type=chunk) - One investment property recorded a fair value loss of **HK$2.373 million**[35](index=35&type=chunk) Right-of-Use Assets and Lease Liabilities | Item (HK$ '000) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Right-of-use assets (properties) | 56,482 | 55,628 | | Lease liabilities (non-current) | 47,028 | 45,911 | | Lease liabilities (current) | 13,611 | 14,382 | | Total lease liabilities | 60,639 | 60,293 | Trade Receivables and Other Financial Assets | Item (HK$ '000) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Trade receivables, net | 401,737 | 375,642 | | Other financial assets measured at amortised cost | 20,172 | 20,149 | | Total current portion | 419,304 | 394,349 | - An aging analysis of trade receivables shows **HK$134 million** aged 0-30 days, **HK$128 million** aged 31-60 days, and **HK$46.815 million** aged over 180 days[37](index=37&type=chunk) [Trade and Other Payables](index=17&type=section&id=2.8%20Trade%20and%20Other%20Payables) Total trade and other payables decreased, mainly due to reductions in trade payables and accrued expenses, with the current portion totaling HK$364.3 million Trade and Other Payables Details | Item (HK$ '000) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Trade payables | 168,273 | 188,009 | | Accruals and other payables | 218,871 | 240,581 | | Total | 387,144 | 428,590 | | Current portion | 364,332 | 402,196 | - An aging analysis of trade payables shows **HK$111 million** aged 0-30 days and **HK$20.563 million** aged over 90 days[38](index=38&type=chunk) Management Discussion and Analysis [Financial Review](index=18&type=section&id=3.1%20Financial%20Review) Despite global uncertainties, the Group achieved significant revenue and shareholder profit growth through optimized global production and cost control, maintaining a robust financial position - The Group's revenue increased by **23.1%** year-on-year to **HK$845.6 million**, and gross profit rose by **16.2%** to **HK$255.1 million**, with a gross profit margin of **30.2%** (2024 interim: 31.9%)[41](index=41&type=chunk) - Profit attributable to shareholders increased by **69.9%** to **HK$59.918 million**[41](index=41&type=chunk) - Cash on hand and unutilized bank facilities were approximately **HK$239 million** and **HK$664 million** respectively as of June 30, 2025, indicating a robust financial position[41](index=41&type=chunk) [Business Review](index=19&type=section&id=3.2%20Business%20Review) Manufacturing business saw substantial growth from order transfers and efficient execution, while trading business revenue increased with the Dutch company's inclusion, despite an operating loss due to high costs [Manufacturing Business](index=19&type=section&id=3.2.1%20Manufacturing%20Business) Manufacturing business saw substantial growth in revenue and operating profit, driven by order transfers to the Bangladesh factory and stable operations at the Mexico factory - The Bangladesh factory secured a large volume of orders transferred from high-tariff regions, significantly boosting its production scale and profitability[42](index=42&type=chunk) - The Mexico factory's operations stabilized, commencing production of high-end headwear styles to enrich the product portfolio[42](index=42&type=chunk) - Manufacturing business revenue increased by **20.6%** to **HK$537.7 million** during the period, accounting for **63.6%** of the Group's total revenue[43](index=43&type=chunk) - Segment operating profit surged by **28.9%** year-on-year to **HK$120.152 million**[43](index=43&type=chunk) [Trading Business](index=20&type=section&id=3.2.2%20Trading%20Business) Trading business revenue increased by 27.6% to HK$307.9 million, but recorded an operating loss of HK$43.8 million due to high sales costs and integration expenses from the Dutch company - Trading business revenue increased by **27.6%** year-on-year to **HK$307.9 million**, representing approximately **36.4%** of the Group's total revenue[44](index=44&type=chunk) - The trading segment recorded an operating loss of **HK$43.834 million** (2024 interim: operating loss of HK$37.739 million), primarily due to high sales costs and increased administrative expenses from the integration of the Dutch company[44](index=44&type=chunk) [Outlook](index=20&type=section&id=3.3%20Outlook) The Group plans to expand manufacturing in Cambodia and Mexico, enhance trading through a free trade zone and the Dutch company, and continuously optimize risk control and costs - The Group will adhere to a pragmatic approach, steadily advancing its global footprint while prudently managing risks and actively seizing opportunities[45](index=45&type=chunk) [Manufacturing Business Strategy](index=20&type=section&id=3.3.1%20Manufacturing%20Business%20Strategy) The Group plans to launch a Cambodia production line with a target annual capacity of 10 million units and expand the Mexico factory to strengthen its North American market position - The Cambodia production line is expected to commence operations in the third quarter of this year, targeting an annual production capacity of **10 million units**, which will optimize the Southeast Asian production network[45](index=45&type=chunk) - The Mexico factory will expand its production capacity to solidify its leading position in the North American supply chain, benefiting from zero-tariff treatment under the USMCA agreement[45](index=45&type=chunk) [Trading Business Strategy](index=21&type=section&id=3.3.2%20Trading%20Business%20Strategy) The Group is developing a free trade zone and warehouse in Mexico and leveraging the Dutch company to expand into new markets like the Middle East and Africa - The Group is advancing the planned free trade zone project and warehouse construction within the Mexico factory park, expecting to fully leverage cross-border logistics advantages and significantly enhance trading business operational efficiency[46](index=46&type=chunk) - The integration of the Dutch company will expand the trading business's market coverage from Europe and America to emerging markets such as the Middle East and Africa[46](index=46&type=chunk) [Risk Control and Cost Optimization](index=21&type=section&id=3.3.3%20Risk%20Control%20and%20Cost%20Optimization) The Group will continue to enhance risk control and cost optimization measures to maintain financial resilience and capitalize on growth opportunities in a complex environment - The Group will continue to deepen risk control and cost optimization initiatives to ensure healthy financial resilience in a complex environment[46](index=46&type=chunk) - Leveraging its market leadership, global production footprint, diversified product portfolio, and keen business insights, the Group is confident in overcoming challenges and creating long-term value[47](index=47&type=chunk) [Liquidity and Financial Resources](index=21&type=section&id=3.4%20Liquidity%20and%20Financial%20Resources) As of June 30, 2025, the Group's cash and liquid investments increased, with ample bank facilities and a reduced gearing ratio, indicating strong financial health Liquidity and Financial Resources | Metric | June 30, 2025 (HK$ Million) | December 31, 2024 (HK$ Million) | | :--- | :--- | :--- | | Total cash and bank balances (including short-term deposits) and liquid investment portfolio | 243.4 | 196.0 | | Bank credit facilities | 852.2 | 905.4 | | Unutilised bank credit facilities | 664.3 | 720.6 | | Gearing ratio (borrowings to total equity) | 15.9% | 16.9% | - Approximately **60.6%**, **17.4%**, and **8.1%** of the liquidity are denominated in USD, RMB, and HKD, respectively[48](index=48&type=chunk) [Capital Expenditure](index=22&type=section&id=3.5%20Capital%20Expenditure) Capital expenditure focused on property renovation, equipment upgrades, and capacity expansion, with approved commitments for new facilities in Mexico, Bangladesh, and Cambodia - During the period, approximately **HK$9.4 million** was invested in renovating properties in Missouri, USA (2024 interim: HK$102.4 million for property acquisition)[49](index=49&type=chunk) - **HK$15.6 million** was invested in acquiring equipment and machinery to further upgrade and expand production capacity[49](index=49&type=chunk) - Approved capital commitments of **HK$151.4 million** are designated for the construction of a warehouse at the Mexico factory and business expansion in Bangladesh and Cambodia[49](index=49&type=chunk) [Foreign Exchange Risk](index=22&type=section&id=3.6%20Foreign%20Exchange%20Risk) Most assets and liabilities are denominated in HKD, USD, RMB, or BDT, with BDT fluctuations expected to impact manufacturing gross profit margin - The majority of the Group's assets and liabilities are denominated in Hong Kong Dollars, US Dollars, Renminbi, or Bangladeshi Taka[50](index=50&type=chunk) - A 1% appreciation/depreciation of the Bangladeshi Taka is expected to result in a decrease/increase of approximately **0.25%** in the manufacturing business's gross profit margin[50](index=50&type=chunk) [Employees and Remuneration Policy](index=22&type=section&id=3.7%20Employees%20and%20Remuneration%20Policy) The Group employed 8,222 staff globally as of June 30, 2025, with competitive remuneration based on position and performance, including share options for key employees Employee Distribution | Region | June 30, 2025 (Number of Employees) | June 30, 2024 (Number of Employees) | | :--- | :--- | :--- | | China (including Hong Kong) | 220 | 335 | | Bangladesh | 7,235 | 7,222 | | Mexico | 585 | 389 | | United States | 116 | 147 | | Europe | 66 | 11 | | Total | 8,222 | 8,104 | - Employee expenses for the period were approximately **HK$223.8 million** (2024 interim: HK$192.3 million)[51](index=51&type=chunk) - Employee remuneration levels are competitive and determined by position and performance, with key employees (including directors) granted share options[51](index=51&type=chunk) Other Information [Interim Dividend](index=22&type=section&id=4.1%20Interim%20Dividend) The Board declared an interim dividend of 3 HK cents per share, payable on or after October 10, 2025, consistent with the previous year - The Board has declared an interim dividend of **3 HK cents** per share (2024: 3 HK cents)[52](index=52&type=chunk) - The interim dividend will be paid on or after October 10, 2025[52](index=52&type=chunk) [Closure of Register of Members](index=23&type=section&id=4.2%20Closure%20of%20Register%20of%20Members) The company will temporarily close its register of members from September 17 to September 19, 2025, to determine eligibility for the interim dividend - The company's register of members will be closed from September 17, 2025, to September 19, 2025 (both dates inclusive)[53](index=53&type=chunk) - To qualify for the interim dividend, all transfer documents must be lodged with the company's Hong Kong share registrar by 4:30 p.m. on September 16, 2025[53](index=53&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=23&type=section&id=4.3%20Purchase,%20Sale%20or%20Redemption%20of%20the%20Company's%20Listed%20Securities) Neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed securities during the six months ended June 30, 2025 - During the six months ended June 30, 2025, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities[54](index=54&type=chunk) [Corporate Governance](index=23&type=section&id=4.4%20Corporate%20Governance) The Board confirmed compliance with the Corporate Governance Code and Model Code, and the Audit Committee reviewed the interim condensed consolidated financial information - The company has complied with the code provisions of the Corporate Governance Code set out in Appendix 14 to the Listing Rules[55](index=55&type=chunk) - All Directors have confirmed their compliance with the Model Code set out in Appendix 10 to the Listing Rules for the period ended June 30, 2025[56](index=56&type=chunk) - The Audit Committee has reviewed the interim condensed consolidated financial information for the period ended June 30, 2025[57](index=57&type=chunk)

[Chairman's Report](index=2&type=section&id=%E4%B8%BB%E5%B8%AD%E5%A0%B1%E5%91%8A) [Operating Results](index=2&type=section&id=%E7%B6%93%E7%87%9F%E6%A5%AD%E7%B8%BE) The Group's first-half 2025 operating results shifted from profit to loss, with a 19% decline in total turnover driven by sales downturns, increased fair value losses on investment properties, and reduced gross margins [Turnover](index=2&type=section&id=%E7%87%9F%E6%A5%AD%E9%A1%8D) The Group's total turnover for the first half of 2025 was HK$487,111,000, a 19% decrease year-on-year, with all major business revenues experiencing varying degrees of decline Turnover Comparison | Metric | H1 2025 (HK$ thousand) | H1 2024 (HK$ thousand) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Total Turnover | 487,111 | 603,261 | -19% | [Cost of Sales and Gross Profit](index=2&type=section&id=%E9%8A%B7%E5%94%AE%E6%88%90%E6%9C%AC%E5%8F%8A%E6%AF%9B%E5%88%A9) Total cost of sales for the period was HK$198,157,000, with apparel cost of sales decreasing by 22%, leading to a 25% drop in gross profit, while the gross profit margin before inventory impairment slightly declined to 56% Cost of Sales and Gross Profit Comparison | Metric | H1 2025 (HK$ thousand) | H1 2024 (HK$ thousand) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Total Cost of Sales | 198,157 | 241,390 | -17.9% | | Apparel Cost of Sales | 147,454 | 189,561 | -22% | | Apparel Sales Gross Profit (before inventory impairment) | 187,551 | 249,771 | -25% | | Gross Profit Margin before Inventory Impairment | 56% | 56.9% | -0.9 percentage points | | Inventory Impairment Provision | 8,501 | 12,350 | -31.2% | | Cost of Properties Sold | 23,179 | 21,079 | +9.9% | | Property Sales Gross Profit Margin | 17.2% | 25.6% | -8.4 percentage points | | Direct Operating Expenses for Investment Properties | 18,239 | 17,596 | +3.6% | [Other Losses](index=2&type=section&id=%E5%85%B6%E4%BB%96%E虧%E6%90%8D) The Group recorded a fair value loss on investment properties of HK$22,953,000 for the period, representing a 16% increase compared to the prior year Fair Value Loss on Investment Properties | Metric | H1 2025 (HK$ thousand) | H1 2024 (HK$ thousand) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Fair Value Loss on Investment Properties | 22,953 | 19,818 | +15.8% | [Operating Expenses](index=2&type=section&id=%E7%B6%93%E7%87%9F%E8%B2%BB%E7%94%A8) Distribution and marketing costs remained similar to the prior year, while administrative expenses decreased by 5%, with distribution and marketing costs not significantly declining despite reduced sales Operating Expenses Comparison | Metric | H1 2025 (HK$ thousand) | H1 2024 (HK$ thousand) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Distribution and Marketing Costs | 205,734 | 207,764 | -1% | | Administrative Expenses | 74,415 | 78,365 | -5% | [Operating (Loss)/Profit](index=3&type=section&id=%E7%B6%93%E7%87%9F%EF%BC%88%E虧%E6%90%8D%EF%BC%89%E2%88%95%E6%BA%A2%E5%88%A9) The Group recorded an operating loss of HK$14,148,000 for the period, compared to an operating profit of HK$55,924,000 in the prior year, resulting in an operating loss margin of approximately 2.9% Operating (Loss)/Profit Comparison | Metric | H1 2025 (HK$ thousand) | H1 2024 (HK$ thousand) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Operating (Loss)/Profit | (14,148) | 55,924 | Shift from profit to loss | | Operating (Loss)/Profit Margin | -2.9% | 9.3% | -12.2 percentage points | [(Loss)/Profit Attributable to Owners of the Company](index=3&type=section&id=%E6%9C%AC%E5%85%AC%E5%8F%B8%E6%93%81%E6%9C%89%E4%BA%BA%E6%87%89%E4%BD%B5%EF%BC%88%E虧%E6%90%8D%EF%BC%89%E2%88%95%E6%BA%A2%E5%88%A9) The Group reported a loss attributable to owners of the Company of HK$3,960,000 for the period, compared to a profit of HK$58,233,000 in the prior year, with profit excluding fair value loss on investment properties (net of tax) decreasing by approximately 79% to HK$15,575,000 (Loss)/Profit Attributable to Owners of the Company Comparison | Metric | H1 2025 (HK$ thousand) | H1 2024 (HK$ thousand) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | (Loss)/Profit Attributable to Owners of the Company | (3,960) | 58,233 | Shift from profit to loss | | Profit excluding fair value loss on investment properties (net of tax) | 15,575 | 73,478 | -78.8% | | Net Interest Income | 11,592 | 12,215 | -5.1% | | Income Tax Expense | 1,388 | 9,899 | -86% | | Effective Tax Rate (excluding fair value loss on investment properties and its tax impact) | 23.6% | 16.5% | +7.1 percentage points | Overview of Operating Results for H1 2025 | Metric | H1 2025 (HK$ thousand) | H1 2024 (HK$ thousand) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Total Turnover | 487,111 | 603,261 | -19% | | Cost of Sales | 198,157 | 241,390 | -17.9% | | Gross Profit | 288,954 | 361,871 | -20.1% | | Operating (Loss)/Profit | (14,148) | 55,924 | Shift from profit to loss | | (Loss)/Profit Attributable to Owners of the Company | (3,960) | 58,233 | Shift from profit to loss | - Persistent macroeconomic uncertainties continue to impact the consumer market, especially the traditional menswear industry, leading to a challenging operating environment for the Group[2](index=2&type=chunk) [Business Review](index=3&type=section&id=%E6%A5%AD%E5%8B%99%E5%9B%9E%E9%A1%A7) The Group's apparel business faced severe challenges in mainland China and Hong Kong with significant sales declines, while the Singapore market underperformed, property investment saw reduced rental income, and the Meixian property development experienced slow sales, though domestic photovoltaic business recorded a slight profit [Apparel Business](index=3&type=section&id=%E6%9C%8D%E8%A3%9D%E6%9C%8D%E9%A3%BE%E6%A5%AD%E5%8B%99) Overall apparel turnover in mainland China and Hong Kong markets decreased by approximately 24%, with wholesale sales down 50%, self-operated retail same-store sales down 12%, and e-commerce sales down 14%, while Singapore apparel sales fell by 8% and recorded increased losses Apparel Business Sales Comparison for Mainland China and Hong Kong | Business Type | H1 2025 (HK$ thousand) | Y-o-Y Change (%) | | :--- | :--- | :--- | | Domestic Apparel Overall Turnover | 317,924 | -24% | | Wholesale Sales (RMB) | N/A | -50% | | Self-operated Retail Sales (RMB) | N/A | +11% | | Self-operated Retail Same-store Sales | N/A | -12% | | Outlet Store Sales (RMB) | N/A | -30% | | E-commerce Sales (RMB) | N/A | -14% | | Group Customization Sales | N/A | -57% | | Operating Rights Income | 31,659 | -22% | Singapore Apparel Business Comparison | Metric | H1 2025 (HK$ thousand) | H1 2024 (HK$ thousand) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Apparel Sales | 17,081 | 18,535 | -8% | | Decline in Local Currency | N/A | N/A | -11% | | Gross Profit Margin before Inventory Impairment | 52% | 54% | -2 percentage points | | Inventory Impairment Provision | 870 | 236 | +268% | | Local Apparel Business Loss | 3,461 | 2,337 | +48.1% | - In domestic apparel sales channels, wholesale business accounted for approximately **20%**, self-operated retail for **28%**, and e-commerce for **34%**[10](index=10&type=chunk)[11](index=11&type=chunk) [Property Investment and Development](index=5&type=section&id=%E7%89%A9%E6%A5%AD%E6%8A%95%E8%B3%87%E5%8F%8A%E7%99%BC%E5%B1%95) The investment property portfolio value was approximately HK$2,658,006,000, slightly higher due to RMB appreciation, with a fair value loss of HK$22,953,000 primarily from domestic properties, while total rental and property management fee income decreased by 3% due to rising vacancy rates, and the Meixian property development experienced slow sales Key Data for Property Investment and Development | Metric | H1 2025 (HK$ thousand) | H1 2024 (HK$ thousand) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Investment Property Portfolio Value | 2,658,006 | 2,604,529 (Year-end) | +2.05% | | Fair Value Loss on Investment Properties | 22,953 | 19,818 | +15.8% | | Total Rental and Property Management Fee Income | 91,672 | 94,869 | -3.4% | | Guangzhou 'Goldlion Digital Network Centre' Occupancy Rate | 77% | 81% | -4 percentage points | | Meixian 'Goldlion Garden' Property Sales Revenue | 27,987 | N/A | N/A | | Meixian 'Goldlion Garden' Property Sales Gross Profit | 4,808 | N/A | N/A | - The occupancy rate of Goldlion Group Centre in Sha Tin, Hong Kong, decreased from 89% to **86%**, while the property at 3 Yuk Yat Street, To Kwa Wan, saw its occupancy rate fall to **89%**[15](index=15&type=chunk) [Domestic Photovoltaic Business](index=6&type=section&id=%E5%9C%8B%E5%85%A7%E5%85%89%E4%BC%8F%E6%A5%AD%E5%8B%99) The Group's domestic photovoltaic business recorded electricity sales revenue of HK$788,000 and a slight profit during the period Domestic Photovoltaic Business Revenue | Metric | H1 2025 (HK$ thousand) | | :--- | :--- | | Electricity Sales Revenue | 788 | - Apparel businesses in mainland China and Hong Kong face intense competition, consumption downgrades, and market structural shifts[9](index=9&type=chunk) - Singapore's apparel business underperformed due to a weak external economy and slowing private consumption growth[12](index=12&type=chunk) - The property investment market faces a severe environment, with rising vacancy rates in some properties leading to a decline in rental and property management income[13](index=13&type=chunk) [Outlook](index=6&type=section&id=%E5%B1%95%E6%9C%9B) The operating environment for the second half of 2025 is expected to remain challenging with slow recovery in domestic consumer confidence and ongoing property market adjustments, prompting the Group to optimize domestic apparel operations, enhance Singapore business, launch a snooker apparel series, and improve property leasing and sales in Meixian - Domestic consumer confidence is expected to recover slowly, and the property market adjustment continues, indicating a persistently challenging operating outlook[17](index=17&type=chunk) - The Group will optimize product quality, integrate distribution networks, and strengthen self-operated retail capabilities for its domestic apparel business[17](index=17&type=chunk) - A snooker apparel series will be launched and promoted through collaborations with relevant sports associations and event sponsorships[17](index=17&type=chunk) - The property investment business will focus on improving leasing conditions for Goldlion Digital Network Centre and other properties, and flexibly market the remaining units of Goldlion Garden in Meixian[17](index=17&type=chunk) [Financial Position](index=7&type=section&id=%E8%B2%A1%E6%94%BF%E7%8B%80%E6%B3%81) As of June 30, 2025, the Group's cash and bank balances increased by HK$79,759,000 to approximately HK$1,131,605,000, demonstrating a robust financial position with zero bank loans, overdrafts, and a liquidity ratio of 6.1 Key Financial Position Data | Metric | June 30, 2025 (HK$ thousand) | Year-end (HK$ thousand) | Change (HK$ thousand) | | :--- | :--- | :--- | :--- | | Cash and Bank Balances | 1,131,605 | 1,051,846 | +79,759 | | Net Cash Inflow from Operating Activities | 91,295 | N/A | N/A | | Current Assets | 2,205,077 | N/A | N/A | | Current Liabilities | 360,786 | N/A | N/A | | Current Ratio | 6.1 | N/A | N/A | | Debt-to-Asset Ratio | 0 | N/A | N/A | - The Group has no bank loans or overdrafts, and its debt-to-asset ratio is **zero**, indicating a very healthy financial position[18](index=18&type=chunk) - The Group provided mortgage loan guarantees of **HK$3,991,000** for certain property buyers, with the Board deeming the net realizable value of the properties sufficient to cover any defaults, thus no provision was made[19](index=19&type=chunk) [Acknowledgements](index=7&type=section&id=%E8%87%B4%E8%AC%9D) The Chairman, on behalf of the Board, extends gratitude to all staff for their hard work and contributions to the Group [Review Report on 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%E5%AF%A9%E9%96%B1%E5%A0%B1%E5%91%8A) [Introduction](index=8&type=section&id=%E5%BC%95%E8%A8%80) PricewaterhouseCoopers has reviewed the interim condensed consolidated financial information of Goldlion Holdings Limited and its subsidiaries for the six months ended June 30, 2025, in accordance with HKFRS 34 and the HKEX Listing Rules - The auditor has reviewed the interim financial information and confirmed its compliance with relevant accounting standards and listing rule requirements[23](index=23&type=chunk) [Scope of Review](index=8&type=section&id=%E5%AF%A9%E9%96%B1%E7%AF%84%E5%9C%8D) The review was conducted in accordance with HKSRE 2410, which is significantly narrower in scope than an audit, thus no audit opinion is expressed, nor is assurance provided that all material matters will be identified - The scope of review is narrower than an audit, and no audit opinion is expressed[24](index=24&type=chunk) [Conclusion](index=8&type=section&id=%E7%B5%90%E8%AB%96) The auditor found no matters suggesting that the Group's interim financial information was not prepared in all material respects in accordance with HKFRS 34 'Interim Financial Reporting' - The auditor believes the interim financial information complies in all material respects with HKFRS 34[25](index=25&type=chunk) [Interim Condensed Consolidated Financial Statements](index=9&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8) [Interim Condensed Consolidated Statement of Financial Position](index=9&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B3%87%E7%94%A2%E8%B2%A0%E5%82%B5%E8%A1%A8) As of June 30, 2025, the Group's total assets increased slightly to HK$5,242,929,000 from year-end 2024, driven by higher investment property values, increased completed properties and bank deposits, and reduced inventories and trade receivables Key Balance Sheet Data (HK$ thousand) | Metric | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Total Assets | 5,242,929 | 5,146,477 | +96,452 | | Non-current Assets | 3,037,852 | 2,946,059 | +91,793 | | Investment Properties | 2,658,006 | 2,604,529 | +53,477 | | Current Assets | 2,205,077 | 2,200,418 | +4,659 | | Completed Properties Held for Sale | 774,482 | 590,795 | +183,687 | | Inventories | 153,826 | 217,723 | -63,897 | | Trade Receivables | 52,370 | 88,669 | -36,299 | | Bank Deposits | 925,077 | 734,144 | +190,933 | | Cash and Cash Equivalents | 205,950 | 316,392 | -110,442 | | Total Equity | 4,435,484 | 4,349,283 | +86,201 | | Total Liabilities | 807,445 | 797,194 | +10,251 | | Current Liabilities | 360,786 | 387,118 | -26,332 | | Trade Payables | 16,894 | 49,557 | -32,663 | [Interim Condensed Consolidated Statement of Profit or Loss](index=10&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%94%B6%E7%9B%8A%E8%A1%A8) The Group's H1 2025 turnover decreased by 19% to HK$487,111,000, with gross profit down 20.1%, resulting in an operating loss of HK$14,148,000 and a loss attributable to owners of HK$3,960,000, or HK$0.41 cents per share Key Income Statement Data (HK$ thousand) | Metric | H1 2025 | H1 2024 | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Turnover | 487,111 | 603,261 | -19.2% | | Cost of Sales | (198,157) | (241,390) | -17.9% | | Gross Profit | 288,954 | 361,871 | -20.1% | | Other Losses | (22,953) | (19,818) | +15.8% | | Distribution and Marketing Costs | (205,734) | (207,764) | -1.0% | | Administrative Expenses | (74,415) | (78,365) | -5.0% | | Operating (Loss)/Profit | (14,148) | 55,924 | Shift from profit to loss | | (Loss)/Profit Before Income Tax | (2,556) | 68,139 | Shift from profit to loss | | Income Tax Expense | (1,388) | (9,899) | -86.0% | | (Loss)/Profit for the Period | (3,944) | 58,240 | Shift from profit to loss | | (Loss)/Profit Attributable to Owners of the Company | (3,960) | 58,233 | Shift from profit to loss | | (Loss)/Earnings Per Share (HK cents) | (0.41) | 5.98 | Shift from profit to loss | [Interim Condensed Consolidated Statement of Comprehensive Income](index=11&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) The Group recorded a loss for the period of HK$3,944,000 in H1 2025, but total comprehensive income turned positive to HK$86,201,000 due to other comprehensive income of HK$90,145,000, primarily from exchange differences on translating financial statements of mainland China and overseas subsidiaries Key Comprehensive Income Statement Data (HK$ thousand) | Metric | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | (Loss)/Profit for the Period | (3,944) | 58,240 | Shift from profit to loss | | Other Comprehensive Income | 90,145 | (67,000) | Shift from loss to profit | | - Exchange differences | 76,651 | (74,436) | Shift from loss to profit | | Total Comprehensive Income for the Period | 86,201 | (8,760) | Shift from loss to profit | | Total Comprehensive Income Attributable to Owners of the Company | 86,124 | (8,767) | Shift from loss to profit | [Interim Condensed Consolidated Statement of Changes in Equity](index=12&type=section&id=%E4%B8%AD%E6%9C%9F%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) As of June 30, 2025, total equity attributable to owners of the Company increased to HK$4,433,279,000 from the beginning of the year, primarily due to an increase in other comprehensive income (exchange differences) offsetting the period's loss Key Statement of Changes in Equity Data (HK$ thousand) | Metric | June 30, 2025 | January 1, 2025 | Change | | :--- | :--- | :--- | :--- | | Total Equity Attributable to Owners of the Company | 4,433,279 | 4,347,155 | +86,124 | | (Loss)/Profit for the Period | (3,960) | N/A | N/A | | Other Comprehensive Income | 90,084 | N/A | N/A | | Total Comprehensive Income for the Period | 86,124 | N/A | N/A | [Interim Condensed Consolidated Statement of Cash Flows](index=13&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E7%8F%BE%E9%87%91%E6%B5%81%E9%87%8F%E8%A1%A8) The Group generated net cash inflow of HK$91,295,000 from operating activities in H1 2025, utilized HK$198,877,000 in investing activities and HK$9,969,000 in financing activities, resulting in a decrease in cash and cash equivalents to HK$205,950,000 at period-end Key Cash Flow Statement Data (HK$ thousand) | Metric | H1 2025 | H1 2024 | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Net Cash Generated from Operating Activities | 91,295 | 77,377 | +18.0% | | Net Cash Used in Investing Activities | (198,877) | (95,886) | +107.4% | | Net Cash Used in Financing Activities | (9,969) | (47,612) | -79.1% | | Net Decrease in Cash and Cash Equivalents | (117,551) | (66,121) | +77.8% | | Cash and Cash Equivalents at End of Period | 205,950 | 275,315 | -25.2% | - Cash outflow from investing activities significantly increased, primarily due to additions to investment properties, property, plant and equipment, and an increase in bank deposits[33](index=33&type=chunk) [Notes to the Interim Condensed Financial Information](index=14&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E8%B2%A1%E5%8B%99%E8%B3%87%E6%96%99%E9%99%84%E8%A8%BB) [1. General Information](index=14&type=section&id=1.%20%E4%B8%80%E8%88%AC%E8%B3%87%E6%96%99) Goldlion Holdings Limited and its subsidiaries primarily engage in the distribution and production of apparel, leather goods, and accessories, trademark licensing, and property investment and development, with its interim financial information being unaudited - The Group's principal activities include the distribution and manufacturing of apparel, leather goods, and accessories, trademark licensing, and property investment and development[34](index=34&type=chunk) - This interim condensed consolidated financial information is unaudited and was approved for issue by the Board on **August 14, 2025**[35](index=35&type=chunk)[36](index=36&type=chunk) [2. Basis of Preparation](index=15&type=section&id=2.%20%E7%B7%A8%E8%A3%BD%E5%9F%BA%E6%BA%96) The interim condensed consolidated financial information is prepared in accordance with HKFRS 34 'Interim Financial Reporting' and consistent with the accounting policies adopted for the annual financial statements for the year ended December 31, 2024, with new and revised standards not expected to have a significant impact - The interim financial information is prepared in accordance with HKFRS 34, with accounting policies consistent with the annual financial statements[37](index=37&type=chunk) - New and revised standards issued but not yet effective are not expected to have a significant impact on the Group's condensed consolidated financial statements[40](index=40&type=chunk) [3. Financial Risk Management](index=17&type=section&id=3.%20%E8%B2%A1%E5%8B%99%E9%A2%A8%E9%9A%AA%E7%AE%A1%E7%90%86) The Group's business is exposed to market risks (including foreign currency and cash flow interest rate risks), credit risk, and liquidity risk, with no changes in risk management policies since year-end - The Group faces market, credit, and liquidity risks, with no changes in risk management policies since year-end[42](index=42&type=chunk)[43](index=43&type=chunk) [4. Critical Accounting Estimates and Judgements](index=17&type=section&id=4.%20%E9%87%8D%E5%A4%A7%E6%9C%83%E8%A8%88%E4%BC%B0%E8%A8%88%E5%8F%8A%E5%88%A4%E6%96%B7) The preparation of interim financial information requires management to make judgments, estimates, and assumptions, which are consistent with those applied in preparing the 2024 annual consolidated financial statements - The significant judgments, estimates, and assumptions applied by management in preparing the interim financial information are consistent with those used for the annual financial statements[44](index=44&type=chunk) [5. Operating Segments](index=18&type=section&id=5.%20%E7%87%9F%E9%81%8B%E5%88%86%E9%83%A8) The Group has three main reportable segments: apparel business in mainland China and Hong Kong, apparel business in Singapore, and property investment and development, with both apparel segments recording losses in H1 2025, while the property segment generated a profit H1 2025 Turnover and Segment Results by Operating Segment (HK$ thousand) | Segment | Turnover | Segment Results | | :--- | :--- | :--- | | Mainland China and Hong Kong Apparel | 349,583 | (16,333) | | Singapore Apparel | 17,081 | (3,461) | | Property Investment and Development | 119,659 | 31,223 | | Others and Eliminations | 788 | 548 | | Total Group | 487,111 | 11,977 | | Unallocated Costs | N/A | (14,533) | | Loss Before Income Tax | N/A | (2,556) | H1 2024 Turnover and Segment Results by Operating Segment (HK$ thousand) | Segment | Turnover | Segment Results | | :--- | :--- | :--- | | Mainland China and Hong Kong Apparel | 461,153 | 46,904 | | Singapore Apparel | 18,535 | (2,337) | | Property Investment and Development | 123,193 | 41,185 | | Eliminations | 380 | 14 | | Total Group | 603,261 | 85,766 | | Unallocated Costs | N/A | (17,627) | | Profit Before Income Tax | N/A | 68,139 | - Revenue from goods sales was **HK$335,005,000**, property sales revenue was **HK$27,987,000**, and investment property rental income was **HK$72,002,000**[45](index=45&type=chunk) [6. Capital Expenditure](index=21&type=section&id=6.%20%E8%B3%87%E6%9C%AC%E9%96%8B%E6%94%AF) As of June 30, 2025, the net book value of property, plant and equipment was HK$215,788,000 and investment properties was HK$2,658,006,000, with total capital expenditure additions of HK$35,536,000 and a fair value loss on investment properties of HK$22,953,000 recorded during the period Overview of Capital Expenditure Changes (HK$ thousand) | Metric | Property, Plant and Equipment | Investment Properties | Total | | :--- | :--- | :--- | :--- | | Carrying amount at January 1, 2025 | 211,196 | 2,604,529 | 2,815,725 | | Additions | 31,703 | 3,833 | 35,536 | | Transfers | (12,135) | 31,392 | 19,257 | | Depreciation | (18,361) | – | (18,361) | | Impairment Loss | (120) | – | (120) | | Fair Value Loss | – | (22,953) | (22,953) | | Exchange differences | 3,560 | 41,205 | 44,765 | | Carrying amount at June 30, 2025 | 215,788 | 2,658,006 | 2,873,794 | [7. Properties Under Development](index=22&type=section&id=7.%20%E7%99%BC%E5%B1%95%E4%B8%AD%E7%89%A9%E6%A5%AD) As of June 30, 2025, properties under development were zero as the Meixian property in mainland China was completed during the period, compared to HK$164,630,000 at the end of last year Properties Under Development (HK$ thousand) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Land use rights | – | 52,759 | | Development costs | – | 111,871 | | Total | – | 164,630 | - Properties under development were completed during the period and reclassified as completed properties held for sale[50](index=50&type=chunk) [8. Completed Properties Held for Sale](index=22&type=section&id=8.%20%E5%B7%B2%E8%90%BD%E6%88%90%E7%89%A9%E6%A5%AD) As of June 30, 2025, completed properties held for sale significantly increased to HK$774,482,000 from HK$590,795,000 at year-end 2024, primarily due to reclassification upon completion of properties under development Completed Properties Held for Sale (HK$ thousand) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Completed Properties Held for Sale | 774,482 | 590,795 | - Completed properties held for sale are located in Meixian, mainland China, and were initially measured at their carrying amount on the date of reclassification from properties under development[51](index=51&type=chunk) [9. Trade Receivables](index=23&type=section&id=9.%20%E6%A5%AD%E5%8B%99%E6%87%89%E6%94%B6%E8%B3%A0%E9%A0%85) As of June 30, 2025, net trade receivables significantly decreased to HK$52,370,000 from HK$88,669,000 at year-end 2024, with the largest reduction observed in receivables aged 1 to 30 days Trade Receivables Ageing Analysis (HK$ thousand) | Ageing | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | 1 to 30 days | 30,570 | 63,291 | -32,721 | | 31 to 90 days | 9,256 | 16,605 | -7,349 | | Over 90 days | 13,638 | 9,396 | +4,242 | | Total Trade Receivables | 53,464 | 89,292 | -35,828 | | Less: Impairment allowance | (1,094) | (623) | -471 | | Net Trade Receivables | 52,370 | 88,669 | -36,299 | [10. Prepayments, Deposits and Other Receivables](index=23&type=section&id=10.%20%E9%A0%90%E4%BB%98%E6%AC%BE%E9%A0%85%E3%80%81%E6%8C%89%E9%87%91%E5%8F%8A%E5%85%B6%E4%BB%96%E6%87%89%E6%94%B6%E8%B3%A0%E9%A0%85) As of June 30, 2025, total prepayments, deposits, and other receivables increased to HK$63,819,000 from HK$52,571,000 at year-end 2024, primarily due to higher recoverable VAT and other receivables Prepayments, Deposits and Other Receivables (HK$ thousand) | Metric | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Purchase deposits | 5,220 | 2,812 | +2,408 | | Prepayments | 9,534 | 8,764 | +770 | | General deposits | 15,851 | 14,144 | +1,707 | | Interest receivable | 9,144 | 10,546 | -1,402 | | Recoverable VAT | 16,253 | 13,131 | +3,122 | | Others | 7,817 | 3,174 | +4,643 | | Total | 63,819 | 52,571 | +11,248 | [11. Share Capital](index=24&type=section&id=11.%20%E8%82%A1%E6%9C%AC) As of June 30, 2025, the Company's issued and fully paid ordinary shares remained unchanged at 973,844,000 shares, with share capital of HK$1,101,358,000, consistent with year-end 2024 Share Capital (HK$ thousand) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Number of ordinary shares (thousands) | 973,844 | 973,844 | | Share Capital | 1,101,358 | 1,101,358 | [12. Trade Payables](index=24&type=section&id=12.%20%E6%A5%AD%E5%8B%99%E6%87%89%E4%BB%98%E8%B3%A0%E9%A0%85) As of June 30, 2025, total trade payables significantly decreased to HK$16,894,000 from HK$49,557,000 at year-end 2024, primarily due to reductions in payables aged 1 to 30 days and 31 to 90 days Trade Payables Ageing Analysis (HK$ thousand) | Ageing | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | 1 to 30 days | 8,532 | 31,690 | -23,158 | | 31 to 90 days | 7,687 | 14,645 | -6,958 | | Over 90 days | 675 | 3,222 | -2,547 | | Total | 16,894 | 49,557 | -32,663 | [13. Other Losses](index=24&type=section&id=13.%20%E5%85%B6%E4%BB%96%E虧%E6%90%8D) The Group recorded a fair value loss on investment properties of HK$22,953,000 in H1 2025, an increase of 15.8% compared to the prior year Other Losses (HK$ thousand) | Metric | H1 2025 | H1 2024 | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Fair Value Loss on Investment Properties | 22,953 | 19,818 | +15.8% | [14. Expenses by Nature](index=25&type=section&id=14.%20%E6%8C%89%E6%80%A7%E8%B3%AA%E5%91%88%E5%A0%B1%E7%9A%84%E9%96%8B%E6%94%AF) The Group's total expenses for H1 2025 decreased to HK$478,306,000 from the prior year, with lower cost of inventories sold and inventory impairment provisions, but increased depreciation expenses, while staff costs and advertising remained key expenditure items Expenses by Nature (HK$ thousand) | Metric | H1 2025 | H1 2024 | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Cost of inventories sold | 147,454 | 189,561 | -22.2% | | Cost of properties sold | 23,179 | 21,079 | +9.9% | | Inventory impairment provision | 8,501 | 12,350 | -31.2% | | Direct operating expenses for investment properties generating rental income | 18,239 | 17,596 | +3.6% | | Expenses relating to short-term leases and variable lease payments | 33,672 | 42,036 | -19.9% | | Depreciation of property, plant and equipment | 18,361 | 14,646 | +25.4% | | Depreciation of right-of-use assets | 11,190 | 10,528 | +6.3% | | Impairment of right-of-use assets | 4,600 | 2,245 | +104.9% | | Staff costs | 111,454 | 111,862 | -0.4% | | Advertising and promotion expenses | 43,162 | 38,424 | +12.3% | | Total | 478,306 | 527,519 | -9.3% | [15. Income Tax Expense](index=25&type=section&id=15.%20%E6%89%80%E5%BE%97%E7%A8%85%E6%94%AF%E5%87%BA) The Group's income tax expense for H1 2025 significantly decreased to HK$1,388,000 from the prior year, primarily due to increased deferred tax reversals offsetting current tax liabilities Income Tax Expense (HK$ thousand) | Metric | H1 2025 | H1 2024 | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Current tax – PRC enterprise income tax | 9,803 | 10,882 | -9.9% | | Deferred income tax | (8,415) | (983) | +756.0% | | Total income tax expense | 1,388 | 9,899 | -86.0% | - The Group's estimated taxable profit is offset by tax losses brought forward from previous years, thus no provision for Hong Kong profits tax was made[58](index=58&type=chunk) - The PRC enterprise income tax rate is **25%**, with subsidiaries qualifying as small-profit enterprises taxed at a preferential rate of **5%**[58](index=58&type=chunk) [16. Dividends](index=26&type=section&id=16.%20%E8%82%A1%E6%81%AF) The Board declared an interim dividend of HK$1.0 cent per share, totaling HK$9,738,000, a reduction from HK$2.0 cents per share (totaling HK$19,477,000) in the prior year Interim Dividend (HK$ thousand) | Metric | H1 2025 | H1 2024 | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Interim dividend per ordinary share | 1.0 HK cents | 2.0 HK cents | -50% | | Total dividend payout | 9,738 | 19,477 | -50% | - No final dividend for the year ended December 31, 2024, was paid during the period[60](index=60&type=chunk) [17. (Loss)/Earnings Per Share](index=26&type=section&id=17.%20%E6%AF%8F%E8%82%A1%EF%BC%88%E虧%E6%90%8D%EF%BC%89%E2%88%95%E7%9B%88%E5%88%A9) Basic and diluted loss per share attributable to owners of the Company was HK$0.41 cents, compared to earnings of HK$5.98 cents in the prior year, with no potentially dilutive ordinary shares issued during the period (Loss)/Earnings Per Share (HK cents) | Metric | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Basic and diluted (loss)/earnings per share | (0.41) | 5.98 | Shift from profit to loss | - (Loss)/Earnings per share is calculated based on the loss attributable to owners of the Company of **HK$3,960,000** and **973,844,035** ordinary shares in issue[61](index=61&type=chunk) [18. Commitments](index=27&type=section&id=18.%20%E6%89%BF%E6%93%94) As of June 30, 2025, the Group's capital commitments included HK$17,136,000 for property, plant and equipment and HK$2,028,000 for investment properties, with property development and land use right commitments reduced to zero, and total future rental receivables amounting to HK$284,772,000 Capital Commitments (HK$ thousand) | Commitment Type | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Property, plant and equipment (contracted but not provided for) | 17,136 | 14,706 | | Investment properties (contracted but not provided for) | 2,028 | 4,261 | | Property development expenditure and land use rights commitments (contracted but not provided for) | – | 366 | | Property development expenditure and land use rights commitments (authorised but not contracted for) | – | 21,000 | Future Rental Receivables (HK$ thousand) | Period | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Within one year | 122,552 | 126,279 | | After one year and within five years | 158,143 | 146,088 | | After five years | 4,077 | 4,758 | | Total | 284,772 | 277,125 | [19. Mortgage Loan Guarantees](index=28&type=section&id=19.%20%E6%8C%89%E6%8F%AD%E8%9E%8D%E8%B3%87%E6%93%94%E4%BF%9D) As of June 30, 2025, the Group provided mortgage loan guarantees of HK$3,991,000 for certain property buyers, with the Board believing the net realizable value of the properties is sufficient to cover any defaults, thus no provision was made Mortgage Loan Guarantees (HK$ thousand) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Guarantees provided for mortgage loans of certain property buyers | 3,991 | 3,981 | - Guarantee terms stipulate that if buyers fail to make mortgage payments, the Group is responsible for repayment and has the right to take over the property title[64](index=64&type=chunk) [20. Related Party Transactions](index=28&type=section&id=20.%20%E9%97%9C%E9%80%A3%E4%BA%BA%E5%A3%AB%E4%BA%A4%E6%98%93) The Company is ultimately controlled by the Tsang family, with Mr. Tsang Chi Ming serving as both Chairman and Chief Executive Officer, and related party transactions for the period primarily included professional fees of HK$160,000 paid to Winwin Financial Advisory Limited and key management personnel remuneration of HK$9,966,000 - The Company is ultimately controlled by the Tsang family, with Mr. Tsang Chi Ming and his family members holding approximately **68.62%** of the issued shares[65](index=65&type=chunk) Related Party Transactions (HK$ thousand) | Transaction Type | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Professional fees paid to a related company (Winwin Financial Advisory Limited) | 160 | 160 | | Key management personnel remuneration | 9,966 | 11,840 | [Supplementary Information](index=30&type=section&id=%E8%A3%9C%E5%85%85%E8%B3%87%E6%96%99) [Interim Dividend](index=30&type=section&id=%E4%B8%AD%E6%9C%9F%E8%82%A1%E6%81%AF) The Board recommended an interim dividend of HK$1.0 cent per share for the year ending December 31, 2025, totaling HK$9,738,000, expected to be paid on September 17, 2025 Interim Dividend | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Interim dividend per share | 1.0 HK cents | 2.0 HK cents | | Total dividend payout | 9,738 | 19,477 | [Closure of Register of Members](index=30&type=section&id=%E6%9A%AB%E5%81%9C%E8%BE%A6%E7%90%86%E8%82%A1%E4%BB%BD%E9%81%8E%E6%88%B6%E7%99%BB%E8%A8%98) To ascertain the right to receive the proposed dividend, the Company will suspend its register of members on September 4 and September 5, 2025 - The register of members will be closed on **September 4 and September 5, 2025**, to determine eligibility for the interim dividend[68](index=68&type=chunk) [Purchase, Sale or Redemption of Shares](index=30&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%E8%82%A1%E4%BB%BD) Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's shares during the period - Neither the Company nor its subsidiaries conducted any share repurchases, sales, or redemptions during the period[69](index=69&type=chunk) [Directors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares and Debentures](index=31&type=section&id=%E8%91%A3%E4%BA%8B%E5%8F%8A%E8%A1%8C%E6%94%BF%E7%B8%BD%E8%A3%81%E6%96%BC%E6%9C%AC%E5%85%AC%E5%8F%B8%E6%88%96%E4%BB%BB%E4%BD%95%E6%9C%AC%E5%85%AC%E5%8F%B8%E4%B9%8B%E6%8C%87%E6%98%8E%E4%BC%81%E6%A5%AD%E6%88%96%E4%BB%BB%E4%BD%95%E5%85%B6%E4%BB%96%E7%9B%B8%E8%81%AF%E6%B3%95%E5%9C%98%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%E5%88%B8%E4%B8%AD%E4%B9%8B%E6%AC%8A%E7%9B%8A%E5%8F%8A%E6%B7%A1%E5%80%89) As of June 30, 2025, Mr. Tsang Chi Ming held a long position of 614,438,750 ordinary shares in the Company, representing 63.09% of the issued share capital, primarily through other interests (family trust), with no other disclosable interests or short positions for directors and chief executive Mr. Tsang Chi Ming's Interests in the Company's Ordinary Shares | Director | Interest Type | Personal Interest (shares) | Other Interests (shares) | Total (shares) | Percentage of total issued share capital | | :--- | :--- | :--- | :--- | :--- | :--- | | Tsang Chi Ming | Long Position | 1,404,000 | 613,034,750 | 614,438,750 | 63.09% | - Mr. Tsang Chi Ming's other interests are primarily held by Tsang Hin Chi Family Management Limited, as trustee of The Tsang Hin Chi (2007) Family Discretionary Trust[70](index=70&type=chunk) [Substantial Shareholders' Interests and Short Positions in Shares and Underlying Shares](index=32&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%E8%82%A1%E4%BB%BD%E5%8F%8A%E7%9B%B8%E9%97%9C%E8%82%A1%E4%BB%BD%E4%B8%AD%E4%B9%8B%E6%AC%8A%E7%9B%8A%E5%8F%8A%E6%B7%A1%E5%80%89) As of June 30, 2025, Tsang Hin Chi Family Management Limited, Top Grade Holdings Limited, Silver Disc Limited, Tsang Hin Chi Charitable (Management) Limited, and FMR LLC were substantial shareholders of the Company, holding 5% or more of the issued share capital Substantial Shareholders' Interests in the Company's Shares | Name of Securities Holder | Total Number of Shares Held (shares) | Percentage of total issued share capital | | :--- | :--- | :--- | | Tsang Hin Chi Family Management Limited | 613,034,750 | 62.95% | | Top Grade Holdings Limited | 613,034,750 | 62.95% | | Silver Disc Limited | 160,616,000 | 16.49% | | Tsang Hin Chi Charitable (Management) Limited | 53,880,750 | 5.53% | | FMR LLC | 53,160,331 | 5.46% | - Tsang Hin Chi Family Management Limited indirectly holds shares through Top Grade Holdings Limited and its wholly-owned subsidiaries, Silver Disc Limited and Keysonic Development Limited[74](index=74&type=chunk) [Corporate Governance](index=33&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB) The Company complied with the Corporate Governance Code in Appendix C1 of the HKEX Listing Rules during H1 2025, with Mr. Tsang Chi Ming serving as both Chairman and Chief Executive Officer to enhance decision-making efficiency, and all directors adhering to the Model Code for securities transactions - The Company complies with the Corporate Governance Code set out in Appendix C1 of the HKEX Listing Rules[75](index=75&type=chunk) - Mr. Tsang Chi Ming serves concurrently as Chairman and Chief Executive Officer, an arrangement the Board believes facilitates more effective planning and promotion of long-term business strategies[75](index=75&type=chunk) [Audit Committee](index=33&type=section&id=%E5%AF%A9%E6%A0%B8%E5%A7%94%E5%93%A1%E6%9C%83) The Company's Audit Committee comprises four members, including three independent non-executive directors and one non-executive director, responsible for reviewing and overseeing the Group's financial reporting, risk management, and internal control systems - The Audit Committee comprises Mr. Li Ka Fai (Chairman), Ms. Law Wing Sze, Mr. Chan Kwong Ming (Independent Non-executive Directors), and Mr. Ng Ming Wah (Non-executive Director)[76](index=76&type=chunk) [Review of Financial Information](index=33&type=section&id=%E8%B2%A1%E5%8B%99%E8%B3%87%E6%96%99%E5%AF%A9%E9%96%B1) The Audit Committee has reviewed the Group's unaudited interim financial information for the six months ended June 30, 2025, which was also reviewed by external auditor PricewaterhouseCoopers in accordance with HKSRE 2410 - Both the Audit Committee and external auditor PricewaterhouseCoopers have reviewed the interim financial information[77](index=77&type=chunk) [Board of Directors](index=33&type=section&id=%E8%91%A3%E4%BA%8B%E6%9C%83) As of the report date, the Board of Directors comprises Executive Director Mr. Tsang Chi Ming (Chairman and Chief Executive Officer), Non-executive Director Mr. Ng Ming Wah, and Independent Non-executive Directors Mr. Li Ka Fai, Ms. Law Wing Sze, and Mr. Chan Kwong Ming - The Board of Directors includes executive, non-executive, and independent non-executive directors[78](index=78&type=chunk)

```markdown [Financial Highlights](index=1&type=section&id=Financial%20Highlights) The company achieved revenue growth and significant profit increases in H1 2025, with a notable improvement in net profit margin Key Financial Data Comparison for H1 2025 vs H1 2024 | Metric | H1 2025 (HK$ thousand) | H1 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 944,325 | 922,501 | 2.4% | | Gross Profit | 293,905 | 289,125 | 1.7% | | Profit for the Period | 56,154 | 48,636 | 15.5% | | Profit for the Period Attributable to Owners of the Company | 49,944 | 30,763 | 62.4% | | Adjusted Profit for the Period | 77,531 | 58,323 | 32.9% | | Adjusted Profit for the Period Attributable to Owners of the Company | 69,636 | 39,909 | 74.5% | | Gross Profit Margin (%) | 31.1% | 31.3% | (0.2) percentage points | | Net Profit Margin (%) | 5.9% | 5.3% | 0.6 percentage points | [Interim Condensed Consolidated Financial Statements](index=2&type=section&id=Interim%20Condensed%20Consolidated%20Financial%20Statements) This section presents the interim condensed consolidated financial statements, including comprehensive income and financial position, for the period [Interim Condensed Consolidated Statement of Comprehensive Income](index=2&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) For the six months ended June 30, 2025, the Group's revenue grew by **2.4%** to HK$**944.3 million**, and profit for the period increased by **15.5%** year-on-year to HK$**56.2 million**. Profit attributable to owners of the Company significantly rose by **62.4%** to HK$**49.9 million**, with basic earnings per share at HK$**0.0411** Interim Condensed Consolidated Statement of Comprehensive Income (For the six months ended June 30) | Metric | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Revenue | 944,325 | 922,501 | | Cost of Sales | (650,420) | (633,376) | | Gross Profit | 293,905 | 289,125 | | Other Income | 3,160 | 2,234 | | Selling Expenses | (63,486) | (60,640) | | Administrative Expenses | (165,413) | (159,356) | | Other Gains, Net | 13,091 | 2,060 | | Operating Profit | 81,257 | 73,423 | | Finance Income | 8,559 | 7,463 | | Finance Costs | (13,151) | (12,252) | | Net Finance Costs | (4,592) | (4,789) | | Share of Loss of Associates and Joint Ventures | (1,271) | (241) | | Profit Before Income Tax | 75,394 | 68,393 | | Income Tax Expense | (19,240) | (19,757) | | Profit for the Period | 56,154 | 48,636 | | Profit for the Period Attributable to Owners of the Company | 49,944 | 30,763 | | Profit for the Period Attributable to Non-controlling Interests | 6,210 | 17,873 | | Basic Earnings Per Share (HK cents) | 4.11 | 2.48 | - Total comprehensive income for the period significantly increased by **120.4%** to HK$**89.3 million**, mainly due to fair value changes of financial assets at fair value through other comprehensive income and foreign currency translation differences[4](index=4&type=chunk) [Interim Condensed Consolidated Statement of Financial Position](index=4&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's total assets were HK$**2,762.7 million**, a slight increase from December 31, 2024. Total equity grew to HK$**1,939.4 million**, while total liabilities slightly decreased, indicating a stable financial position Interim Condensed Consolidated Statement of Financial Position (As of June 30) | Metric | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | **ASSETS** | | | | Non-current Assets | 2,127,481 | 2,079,677 | | Current Assets | 635,268 | 640,475 | | **TOTAL ASSETS** | **2,762,749** | **2,720,152** | | **EQUITY** | | | | Equity Attributable to Owners of the Company | 1,781,523 | 1,752,677 | | Non-controlling Interests | 157,905 | 137,234 | | **TOTAL EQUITY** | **1,939,428** | **1,889,911** | | **LIABILITIES** | | | | Non-current Liabilities | 403,127 | 420,219 | | Current Liabilities | 420,194 | 410,022 | | **TOTAL LIABILITIES** | **823,321** | **830,241** | | **TOTAL EQUITY AND LIABILITIES** | **2,762,749** | **2,720,152** | - Cash and cash equivalents within current assets decreased from HK$**423.1 million** to HK$**380.7 million**, while trade receivables increased from HK$**57.8 million** to HK$**66.7 million**[5](index=5&type=chunk) - Dividends payable within current liabilities increased from zero to HK$**24.1 million**, reflecting the declaration of the 2024 final dividend[6](index=6&type=chunk)[25](index=25&type=chunk) [Notes to the Financial Statements](index=6&type=section&id=Notes%20to%20the%20Financial%20Statements) This section provides detailed notes on the financial statements, covering general information, accounting policies, and specific financial items [1 General Information](index=6&type=section&id=1%20General%20Information) C-MER Medical Holdings Limited, incorporated in the Cayman Islands, primarily provides ophthalmic, dental, and other medical services and sells optical aids in Hong Kong and Mainland China, listed on the Main Board of the Stock Exchange of Hong Kong since January 15, 2018 - The Company's principal activities are providing ophthalmic, dental, and other medical services, and selling optical aids in Hong Kong and Mainland China[7](index=7&type=chunk) [2 Basis of Preparation](index=6&type=section&id=2%20Basis%20of%20Preparation) This interim condensed consolidated financial information is prepared in accordance with HKAS 34 'Interim Financial Reporting' issued by the HKICPA and should be read in conjunction with the annual consolidated financial statements for the year ended December 31, 2024 - The interim condensed consolidated financial information is unaudited and prepared in accordance with HKAS 34[8](index=8&type=chunk)[9](index=9&type=chunk) [3 Accounting Policies](index=7&type=section&id=3%20Accounting%20Policies) The Group's accounting policies are consistent with the 2024 annual consolidated financial statements, with new and revised standards adopted having no significant impact on the financial statements; management is assessing the potential impact of new standards not yet effective - The revised standards first adopted by the Group on January 1, 2025 (e.g., amendments to HKAS 21 and HKFRS 1) had no significant impact on accounting policies or financial statements[10](index=10&type=chunk)[11](index=11&type=chunk) - Several new and revised standards effective from 2026 or 2027 onwards are being assessed by management for potential financial impact, but no significant changes have been determined yet[12](index=12&type=chunk) [4 Revenue and Segment Information](index=8&type=section&id=4%20Revenue%20and%20Segment%20Information) The Group's revenue primarily derives from ophthalmic, dental, and other medical services, and sales of optical aids; management assesses performance based on four reportable segments: Hong Kong Medical Business, Mainland China Ophthalmic Business, Mainland China Dental Business, and Mainland China Other Business [Revenue Breakdown](index=8&type=section&id=4(a)%20Revenue) For the six months ended June 30, 2025, total revenue was HK$**944.3 million**, with ophthalmic services contributing the largest share at HK$**613.2 million**; most revenue is recognized at a point in time Revenue by Service Type (For the six months ended June 30) | Service Type | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Provision of Ophthalmic Services | 613,180 | 586,873 | | Provision of Dental Services | 237,479 | 246,400 | | Provision of Other Medical Services | 18,820 | 15,052 | | Sales of Optical Aids | 74,846 | 74,176 | | **Total Revenue** | **944,325** | **922,501** | | Revenue Recognition Timing | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Revenue Recognized at a Point in Time | 778,961 | 749,491 | | Revenue Recognized Over Time | 165,364 | 173,010 | | **Total Revenue** | **944,325** | **922,501** | [Segment Results](index=8&type=section&id=4(b)%20Segment%20Information) In H1 2025, Hong Kong Medical Business and Mainland China Ophthalmic Business achieved profit growth, while Mainland China Dental Business profit declined, and Mainland China Other Business (primarily Shenzhen C-MER Aierkangjian Hospital) remained in early operational stages, recording a gross loss Segment Results (For the six months ended June 30, 2025) | Segment | Segment Revenue (HK$ thousand) | Gross Profit / (Loss) (HK$ thousand) | Segment Results (HK$ thousand) | | :--- | :--- | :--- | :--- | | Hong Kong Medical Business | 467,069 | 134,387 | 50,950 | | Mainland China Ophthalmic Business | 254,815 | 95,737 | 1 | | Mainland China Dental Business | 217,062 | 72,929 | 33,179 | | Mainland China Other Business | 5,379 | (9,148) | (20,395) | | **Total** | **944,325** | **293,905** | **63,735** | Segment Results (For the six months ended June 30, 2024) | Segment | Segment Revenue (HK$ thousand) | Gross Profit (HK$ thousand) | Segment Results (HK$ thousand) | | :--- | :--- | :--- | :--- | | Hong Kong Medical Business | 427,052 | 113,166 | 45,921 | | Mainland China Ophthalmic Business | 270,761 | 89,660 | (22,954) | | Mainland China Dental Business | 224,688 | 86,299 | 54,073 | | Mainland China Other Business | – | – | (8,152) | | **Total** | **922,501** | **289,125** | **68,888** | - Mainland China ophthalmic business segment results improved from a loss of HK$**23.0 million** in H1 2024 to break-even in H1 2025[15](index=15&type=chunk)[16](index=16&type=chunk) [5 Other Income](index=11&type=section&id=5%20Other%20Income) Other income increased to HK$**3.2 million** in H1 2025, primarily driven by higher rental income, while management fee income and government grants decreased Other Income Breakdown (For the six months ended June 30) | Item | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Management Fee Income | 535 | 1,045 | | Rental Income | 1,647 | 207 | | Government Grants | 141 | 225 | | Others | 837 | 757 | | **Total** | **3,160** | **2,234** | [6 Other Gains, Net](index=11&type=section&id=6%20Other%20Gains,%20Net) Other gains, net, significantly increased to HK$**13.1 million** in H1 2025, primarily due to gains on early termination of leases and net gains on disposal of property, plant and equipment Other Gains, Net Breakdown (For the six months ended June 30) | Item | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Net Gain / (Loss) on Disposal of Property, Plant and Equipment | 2,288 | (286) | | Gain on Early Termination of Leases | 14,104 | 1,810 | | Fair Value (Loss) / Gain on Financial Assets at FVTPL | (101) | 1,621 | | Loss on Write-off of Non-current Assets | (2,002) | (1,421) | | Net Exchange Gain | 137 | 361 | | **Total** | **13,091** | **2,060** | [7 Cost of Sales, Selling and Administrative Expenses](index=12&type=section&id=7%20Cost%20of%20Sales,%20Selling%20and%20Administrative%20Expenses) Total cost of sales, selling and administrative expenses increased to HK$**879.3 million** in H1 2025, mainly due to higher doctors' fees, employee benefit expenses, and advertising and promotion expenses Total Cost of Sales, Selling and Administrative Expenses Breakdown (For the six months ended June 30) | Item | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Amortisation of Intangible Assets | 529 | 682 | | Auditor's Remuneration | 1,156 | 1,178 | | Depreciation of Property, Plant and Equipment | 31,132 | 36,549 | | Depreciation of Investment Properties | 1,099 | 164 | | Depreciation of Right-of-use Assets | 65,203 | 71,236 | | Doctors' Fees | 209,006 | 187,570 | | Cost of Inventories and Consumables | 162,942 | 168,684 | | Employee Benefit Expenses | 270,820 | 271,387 | | Advertising and Promotion Expenses | 62,739 | 59,957 | | Legal and Professional Fees | 7,330 | 2,366 | | **Total** | **879,319** | **853,372** | [8 Net Finance Costs](index=12&type=section&id=8%20Net%20Finance%20Costs) Net finance costs slightly decreased to HK$**4.6 million** in H1 2025, primarily due to increased bank interest income and reduced interest expenses on lease liabilities, partially offset by higher interest expenses on bank loans Net Finance Costs Breakdown (For the six months ended June 30) | Item | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Finance Income | 8,559 | 7,463 | | Finance Costs | (13,151) | (12,252) | | **Net Finance Costs** | **(4,592)** | **(4,789)** | [9 Income Tax Expense](index=13&type=section&id=9%20Income%20Tax%20Expense) Income tax expense decreased by **3.0%** to HK$**19.2 million** in H1 2025, primarily due to reduced taxable profit in Mainland China, partially offset by increased taxable profit in Hong Kong Income Tax Expense Breakdown (For the six months ended June 30) | Item | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Current Income Tax - Hong Kong Profits Tax | 9,027 | 12,055 | | Current Income Tax - Mainland China Corporate Income Tax | 8,135 | 7,816 | | Under / (Over) Provision in Prior Years | 803 | (615) | | Deferred Income Tax | 1,275 | 501 | | **Income Tax Expense** | **19,240** | **19,757** | - Hong Kong profits tax rate is **16.5%**, and the applicable tax rate for Mainland China subsidiaries is **25%**[22](index=22&type=chunk) [10 Earnings Per Share](index=13&type=section&id=10%20Earnings%20Per%20Share) Basic earnings per share for H1 2025 was HK$**0.0411**, a significant increase from HK$**0.0248** in H1 2024, primarily due to the increase in profit attributable to owners of the Company Earnings Per Share Calculation (For the six months ended June 30) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Profit for the Period Attributable to Owners of the Company (HK$ thousand) | 49,944 | 30,763 | | Weighted Average Number of Ordinary Shares in Issue | 1,213,785,216 | 1,239,070,639 | | **Basic Earnings Per Share (HK cents)** | **4.11** | **2.48** | - Share options were not included in the calculation of diluted earnings per share as they had an anti-dilutive effect during the period[24](index=24&type=chunk) [11 Dividends](index=14&type=section&id=11%20Dividends) The Board does not recommend the payment of any interim dividend for the six months ended June 30, 2025. The 2024 final dividend of HK$**0.02** per ordinary share was paid on July 15, 2025 - The Board does not recommend the payment of any interim dividend for H1 2025[25](index=25&type=chunk) - The final dividend of HK$**0.02** per ordinary share for the year ended December 31, 2024, totaling HK$**24,069,198**, was paid on July 15, 2025[25](index=25&type=chunk) [12 Trade Receivables](index=14&type=section&id=12%20Trade%20Receivables) As of June 30, 2025, total trade receivables increased to HK$**66.7 million**, with the largest portion aged 0 to 90 days Trade Receivables Aging Analysis (As of June 30) | Aging | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | 0 to 90 days | 44,743 | 38,132 | | 91 to 180 days | 6,173 | 4,882 | | Over 180 days | 15,781 | 14,749 | | **Total** | **66,697** | **57,763** | [13 Trade Payables](index=14&type=section&id=13%20Trade%20Payables) As of June 30, 2025, total trade payables were HK$**57.4 million**, a slight increase from December 31, 2024, primarily concentrated in the 0 to 30-day aging category Trade Payables Aging Analysis (As of June 30) | Aging | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | 0 to 30 days | 42,824 | 33,350 | | 31 to 60 days | 6,187 | 11,338 | | 61 to 90 days | 5,653 | 6,952 | | Over 90 days | 2,687 | 4,170 | | **Total** | **57,351** | **55,810** | [Management Discussion and Analysis](index=15&type=section&id=Management%20Discussion%20and%20Analysis) This section offers management's perspective on the Group's performance, operational highlights, and strategic outlook for the period [Business Review Overview](index=15&type=section&id=Business%20Review%20Overview) In H1 2025, the Group's profitability improved, driven by revenue growth, service network optimization, and enhanced operational efficiency; adjusted profit attributable to owners of the Company significantly increased by **74.5%**, and Mainland China ophthalmic business achieved break-even - Adjusted profit for the period attributable to owners of the Company (excluding losses from Mainland China Other Business segment) increased by **74.5%** from HK$**39.9 million** in H1 2024 to HK$**69.6 million**[28](index=28&type=chunk) - Total revenue slightly increased by **2.4%** to HK$**944.3 million**, driven by growth in Hong Kong ophthalmic services, partially offset by reduced revenue from Shenzhen dental and ophthalmic services due to intense competition[29](index=29&type=chunk) - Net cash generated from operating activities was HK$**108.1 million**, a decrease from the prior period, primarily due to increased working capital used in operations[29](index=29&type=chunk) [Hong Kong Business](index=16&type=section&id=Hong%20Kong%20Business) Hong Kong business, operating under the 'C-MER Dennis Lam' brand, provides ophthalmic services and has expanded into dental, oncology, and other medical services, with an ophthalmic network including five day surgery centers, eight satellite clinics, and eight optometry centers - Hong Kong ophthalmic service network includes five day surgery centers, eight satellite clinics, and eight optometry centers, offering comprehensive ophthalmic and optometric services[31](index=31&type=chunk) - Since 2021, Hong Kong business has expanded to dental, oncology, and other medical services, comprising six dental clinics, two general clinics, and one oncology center as of June 30, 2025[32](index=32&type=chunk) [Mainland China Business](index=16&type=section&id=Mainland%20China%20Business) Mainland China ophthalmic service network covers multiple cities, achieving break-even through organizational optimization; Shenzhen dental business faces intense competition leading to revenue decline but is actively expanding its service network through expansions and new clinics; Shenzhen C-MER Aierkangjian Hospital is fully operational but remains in an early loss-making stage - Mainland China ophthalmic service network includes nine ophthalmic hospitals, achieving break-even in H1 2025, reversing the loss from the prior period[33](index=33&type=chunk) - Shenzhen Aierkangjian dental business revenue decreased by **3.4%** to HK$**217.1 million** due to intense market competition, but is actively expanding, including the expansion of Luohu Dental Hospital and new clinics in Futian and Liantang Port[34](index=34&type=chunk)[35](index=35&type=chunk) - Shenzhen C-MER Aierkangjian Hospital became fully operational in H1 2025, offering multi-specialty Hong Kong-style medical services, but incurred a loss of HK$**15.1 million** due to its early stage of operation[36](index=36&type=chunk) [Revenue Analysis](index=17&type=section&id=Revenue%20Analysis) Total revenue in H1 2025 slightly increased by **2.4%** to HK$**944.3 million**; Hong Kong Medical Business revenue grew by **9.4%**, while Mainland China ophthalmic and dental business revenues decreased by **5.9%** and **3.4%** respectively, primarily due to market competition and weak consumption [By Business Segment](index=18&type=section&id=By%20Business%20Segment) Hong Kong Medical Business revenue share increased to **49.5%**, growing by **9.4%**; Mainland China ophthalmic and dental business revenue shares decreased, declining by **5.9%** and **3.4%** respectively; Mainland China Other Business began contributing revenue Revenue by Segment (For the six months ended June 30) | Segment | 2025 (HK$ thousand) | 2025 (%) | 2024 (HK$ thousand) | 2024 (%) | Change (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Hong Kong Medical Business | 467,069 | 49.5 | 427,052 | 46.2 | 40,017 | 9.4 | | Mainland China Ophthalmic Business | 254,815 | 27.0 | 270,761 | 29.4 | (15,946) | (5.9) | | Mainland China Dental Business | 217,062 | 23.0 | 224,688 | 24.4 | (7,626) | (3.4) | | Mainland China Other Business | 5,379 | 0.5 | – | – | 5,379 | N/A | | **Total** | **944,325** | **100.0** | **922,501** | **100.0** | **21,824** | **2.4** | [By Service Type](index=20&type=section&id=By%20Service%20Type) Revenue from ophthalmic services grew by **4.5%**, accounting for **65.0%** of total revenue; dental service revenue decreased by **3.6%**, and other medical services revenue increased by **25.0%** Revenue by Service Type (For the six months ended June 30) | Service Type | 2025 (HK$ thousand) | 2025 (%) | 2024 (HK$ thousand) | 2024 (%) | Change (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Provision of Ophthalmic Services | 613,180 | 65.0 | 586,873 | 63.7 | 26,307 | 4.5 | | Provision of Dental Services | 237,479 | 25.1 | 246,400 | 26.7 | (8,921) | (3.6) | | Provision of Other Medical Services | 18,820 | 2.0 | 15,052 | 1.6 | 3,768 | 25.0 | | Sales of Optical Aids | 74,846 | 7.9 | 74,176 | 8.0 | 670 | 0.9 | | **Total** | **944,325** | **100.0** | **922,501** | **100.0** | **21,824** | **2.4** | [By Geographical Market](index=21&type=section&id=By%20Geographical%20Market) Hong Kong market revenue share increased from **46.3%** to **49.5%**, growing by **9.4%**; Mainland China revenue share decreased from **53.7%** to **50.5%**, a **3.7%** decline, mainly due to reduced ophthalmic and dental service revenue Revenue by Geographical Market (For the six months ended June 30) | Geographical Market | 2025 (HK$ thousand) | 2025 (%) | 2024 (HK$ thousand) | 2024 (%) | Change (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Hong Kong | 467,069 | 49.5 | 427,052 | 46.3 | 40,017 | 9.4 | | Mainland China | 477,256 | 50.5 | 495,449 | 53.7 | (18,193) | (3.7) | | **Total** | **944,325** | **100.0** | **922,501** | **100.0** | **21,824** | **2.4** | [Ophthalmic Services Analysis](index=21&type=section&id=Ophthalmic%20Services%20Analysis) Ophthalmic service revenue grew by **4.5%**, with increases in consultation and surgery fees in Hong Kong, while Mainland China saw a decrease; average surgery fees in Hong Kong increased by **12.4%**, and Mainland China's average surgery fees decreased by **8.5%** (HK$ denominated) Ophthalmic Service Revenue by Category and Region (For the six months ended June 30) | Category | Region | 2025 (HK$ thousand) | 2025 (%) | 2024 (HK$ thousand) | 2024 (%) | Change (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Consultation and Other Medical Service Fees | Hong Kong | 168,768 | 27.5 | 153,592 | 26.2 | 15,176 | 9.9 | | | Mainland China | 67,165 | 11.0 | 73,685 | 12.5 | (6,520) | (8.8) | | Surgery Fees | Hong Kong | 241,932 | 39.4 | 219,760 | 37.5 | 22,172 | 10.1 | | | Mainland China | 135,315 | 22.1 | 139,836 | 23.8 | (4,521) | (3.2) | | **Total** | | **613,180** | **100.0** | **586,873** | **100.0** | **26,307** | **4.5** | Ophthalmic Surgery Data (For the six months ended June 30) | Metric | Region | 2025 | 2024 | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Total Surgery Fees (HK$ thousand) | Hong Kong | 241,932 | 219,760 | 10.1 | | | Mainland China | 135,315 | 139,836 | (3.2) | | Number of Surgeries | Hong Kong | 7,492 | 7,646 | (2.0) | | | Mainland China | 13,639 | 12,894 | 5.8 | | Average Surgery Fee (HK$) | Hong Kong | 32,292 | 28,742 | 12.4 | | | Mainland China | 9,921 | 10,845 | (8.5) | | Average Surgery Fee (RMB denominated) | Mainland China | - | - | (8.0) | [Dental Services Analysis](index=23&type=section&id=Dental%20Services%20Analysis) Total dental service revenue decreased by **3.6%** to HK$**237.5 million**; despite a **7.4%** increase in total patient visits, patient visits and revenue per dental chair both declined, reflecting intense competition in the Shenzhen market Dental Services Data (For the six months ended June 30) | Metric | 2025 | 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Total Dental Service Revenue (HK$ thousand) | 237,479 | 246,400 | (3.6) | | Total Patient Visits | 167,599 | 156,080 | 7.4 | | Total Dental Chairs | 278 | 244 | 13.9 | | Patient Visits per Dental Chair | 603 | 640 | (5.8) | | Revenue per Dental Chair (HK$ thousand) | 854 | 1,010 | (15.4) | [Other Medical Services and Sales of Optical Aids](index=23&type=section&id=Other%20Medical%20Services%20and%20Sales%20of%20Optical%20Aids) Other medical services revenue grew by **25.0%** to HK$**18.8 million**; sales of optical aids revenue slightly increased by **0.9%** to HK$**74.8 million** - Revenue from oncology, medical aesthetics, general practice, and other services was approximately HK$**18.8 million**, a year-on-year increase of **25.0%**[54](index=54&type=chunk) - Revenue from sales of optical aids was HK$**74.8 million**, a year-on-year increase of **0.9%**[55](index=55&type=chunk) [Cost and Profit Analysis](index=24&type=section&id=Cost%20and%20Profit%20Analysis) The Group's total cost of sales, selling and administrative expenses increased, but gross profit and profit for the period still grew due to operational optimization; gross profit margin slightly decreased, but net profit margin improved [Cost of Sales](index=24&type=section&id=Cost%20of%20Sales) Total cost of sales increased by **2.7%** to HK$**650.4 million**, primarily due to higher doctors' fees paid to Hong Kong ophthalmologists Cost of Sales Breakdown (For the six months ended June 30) | Item | 2025 (HK$ thousand) | 2025 % of Revenue | 2024 (HK$ thousand) | 2024 % of Revenue | Change (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Doctors' Fees | 209,006 | 22.1 | 187,570 | 20.3 | 21,436 | 11.4 | | Cost of Inventories and Consumables | 162,942 | 17.3 | 168,684 | 18.3 | (5,742) | (3.4) | | Staff Salaries and Allowances | 178,058 | 18.9 | 177,525 | 19.2 | 533 | 0.3 | | Depreciation of Right-of-use Assets | 46,571 | 4.9 | 43,611 | 4.7 | 2,960 | 6.8 | | Depreciation of Property, Plant and Equipment | 22,596 | 2.4 | 26,046 | 2.8 | (3,450) | (13.2) | | Others | 31,247 | 3.3 | 29,940 | 3.2 | 1,307 | 4.4 | | **Total** | **650,420** | **68.9** | **633,376** | **68.7** | **17,044** | **2.7** | [Gross Profit and Gross Profit Margin](index=25&type=section&id=Gross%20Profit%20and%20Gross%20Profit%20Margin) Gross profit increased by **1.7%** to HK$**293.9 million**, but gross profit margin slightly decreased by **0.2** percentage points to **31.1%**; gross profit margins for Hong Kong Medical Business and Mainland China Ophthalmic Business increased, while Mainland China Dental Business's gross profit margin decreased Gross Profit and Gross Profit Margin by Segment (For the six months ended June 30) | Segment | 2025 Gross Profit (HK$ thousand) | 2025 Gross Profit Margin (%) | 2024 Gross Profit (HK$ thousand) | 2024 Gross Profit Margin (%) | Change (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Hong Kong Medical Business | 134,387 | 28.8 | 113,166 | 26.5 | 21,221 | 18.8 | | Mainland China Ophthalmic Business | 95,737 | 37.6 | 89,660 | 33.1 | 6,077 | 6.8 | | Mainland China Dental Business | 72,929 | 33.6 | 86,299 | 38.4 | (13,370) | (15.5) | | Mainland China Other Business | (9,148) | N/A | – | N/A | (9,148) | – | | **Total** | **293,905** | **31.1** | **289,125** | **31.3** | **4,780** | **1.7** | [Selling and Administrative Expenses](index=25&type=section&id=Selling%20and%20Administrative%20Expenses) Selling expenses increased by **4.8%** to HK$**63.5 million**, mainly due to increased promotion expenses for Mainland China dental services; administrative expenses grew by **3.8%** to HK$**165.4 million**, primarily impacted by expenses from the full operation of Luohu Hospital - Selling expenses as a percentage of total revenue increased from **6.6%** to **6.7%**, mainly due to increased promotion expenses for Mainland China dental services[60](index=60&type=chunk) - The increase in administrative expenses was primarily due to expenses incurred from the full operation of Luohu Hospital[61](index=61&type=chunk) [Other Income and Net Gains](index=26&type=section&id=Other%20Income%20and%20Net%20Gains) Other income increased to HK$**3.2 million**, primarily from rental income; other gains, net, significantly rose to HK$**13.1 million**, mainly due to gains on early termination of leases - Other income, mainly comprising management fee income and rental income, increased from HK$**2.2 million** to HK$**3.2 million**[62](index=62&type=chunk) - Other gains, net, amounted to HK$**13.1 million**, primarily including gains on early termination of leases[63](index=63&type=chunk) [Net Finance Expenses and Income Tax](index=26&type=section&id=Net%20Finance%20Expenses%20and%20Income%20Tax) Net finance costs decreased to HK$**4.6 million**, primarily due to the net effect of increased bank interest income and reduced interest expenses on lease liabilities; income tax expense decreased by **3.0%** to HK$**19.2 million**, mainly due to reduced taxable profit in Mainland China - Net finance costs decreased to HK$**4.6 million**, mainly due to increased interest income from bank deposits and reduced interest expenses on lease liabilities[64](index=64&type=chunk) - Income tax expense decreased by **3.0%** to HK$**19.2 million**, primarily due to reduced taxable profit in Mainland China, partially offset by increased taxable profit in Hong Kong[65](index=65&type=chunk) [Profit for the Period](index=26&type=section&id=Profit%20for%20the%20Period) Profit for the period increased to HK$**56.2 million**, primarily benefiting from revenue growth and the strategic effectiveness of service network optimization and operational efficiency improvements - Profit for H1 2025 was HK$**56.2 million**, an increase from HK$**48.6 million** in the prior period, mainly attributable to revenue growth and improved operational efficiency[66](index=66&type=chunk) [Cash Flow Analysis](index=27&type=section&id=Cash%20Flow%20Analysis) Net cash from operating activities decreased to HK$**108.1 million**, mainly due to increased working capital; net cash used in investing activities decreased, while net cash used in financing activities increased, primarily for share repurchases and lease payments - Net cash generated from operating activities was HK$**108.1 million**, a decrease from the prior period, primarily due to increased working capital used in operations[67](index=67&type=chunk) - Net cash used in investing activities was HK$**46.1 million**, primarily for the purchase of property, plant and equipment[67](index=67&type=chunk) - Net cash used in financing activities was HK$**110.7 million**, primarily including HK$**29.1 million** for share repurchases and HK$**71.4 million** for lease payments[67](index=67&type=chunk) [Outlook and Strategies](index=27&type=section&id=Outlook%20and%20Strategies) The Group anticipates strong demand for ophthalmic services in Hong Kong, while Mainland China ophthalmic business faces challenges; strategies include focusing on ophthalmic services in Hong Kong and core Mainland cities, developing cross-border dental medical services in Shenzhen, and investing in innovative businesses to explore opportunities - Demand for ophthalmic services in Hong Kong remains strong, while Mainland China ophthalmic business faces challenges due to changing consumption patterns[69](index=69&type=chunk) - Strategies include focusing on ophthalmic services in Hong Kong and core cities in Mainland China, developing cross-border dental medical business under Shenzhen Aierkangjian, and developing multi-specialty hospitals in Luohu[70](index=70&type=chunk) - Will continue to improve operational efficiency and service capabilities, implement strict cost control for Mainland China ophthalmic business, and invest in innovative businesses that contribute professional expertise[74](index=74&type=chunk) [Other Information](index=28&type=section&id=Other%20Information) This section covers additional corporate information, including dividends, investments, corporate governance, and securities transactions [Interim Dividend](index=28&type=section&id=Interim%20Dividend) The Board does not recommend the payment of any interim dividend for the six months ended June 30, 2025 - The Board does not recommend the payment of any interim dividend for H1 2025[71](index=71&type=chunk) [Material Investments, Acquisitions and Disposals](index=28&type=section&id=Material%20Investments,%20Acquisitions%20and%20Disposals) In H1 2025, the Group made no material investments, acquisitions, or disposals - The Group made no material investments, acquisitions, or disposals in H1 2025[72](index=72&type=chunk) [Corporate Governance](index=28&type=section&id=Corporate%20Governance) The Company has complied with all applicable provisions of the Corporate Governance Code in Appendix C1 of the Listing Rules; effective June 1, 2025, the roles of Chairman and Chief Executive Officer were separated, with Dr. Ouyang Boquan as Chairman and Ms. Li Xiaoting as CEO, restoring compliance with the code - The Company has complied with all applicable provisions of the Corporate Governance Code in Appendix C1 of the Listing Rules, with a previous deviation from Rule C.2.1 (roles of Chairman and Chief Executive should be separate)[73](index=73&type=chunk) - Effective June 1, 2025, Dr. Ouyang Boquan was appointed Chairman and Ms. Li Xiaoting was appointed Chief Executive Officer, bringing the Company back into compliance with Rule C.2.1[73](index=73&type=chunk) [Standard Code for Securities Transactions](index=29&type=section&id=Standard%20Code%20for%20Securities%20Transactions) The Company has adopted the Model Code for Securities Transactions in Appendix C3 of the Listing Rules as a code of conduct for directors and relevant employees' securities transactions, and complied with it during H1 2025 - The Company has adopted and complied with the Model Code for Securities Transactions in Appendix C3 of the Listing Rules, with all directors and relevant employees complying during H1 2025[75](index=75&type=chunk) [Purchase, Sale or Redemption of Listed Securities](index=29&type=section&id=Purchase,%20Sale%20or%20Redemption%20of%20Listed%20Securities) In H1 2025, the Company repurchased **17,370,000** ordinary shares on the Stock Exchange for a total consideration of approximately HK$**29.1 million**, aiming to enhance net asset value per share and/or earnings per share; as of the announcement date, the Company holds **8,730,000** repurchased shares as treasury shares 2025 H1 Share Repurchase Details | Month of Repurchase | Number of Shares Repurchased | Highest Price Paid per Share (HK$) | Lowest Price Paid per Share (HK$) | Total Consideration Paid (HK$) | | :--- | :--- | :--- | :--- | :--- | | 2025年1月 | 2,020,000 | 1.97 | 1.84 | 3,869,755 | | 2025年2月 | 688,000 | 2.07 | 1.96 | 1,393,873 | | 2025年3月 | 2,496,000 | 1.61 | 1.54 | 3,921,813 | | 2025年4月 | 4,124,000 | 1.68 | 1.34 | 6,006,651 | | 2025年5月 | 3,462,000 | 1.77 | 1.68 | 5,951,348 | | 2025年6月 | 4,580,000 | 1.82 | 1.66 | 7,965,318 | | **Total** | **17,370,000** | | | **29,108,758** | - The Board believes share repurchases are in the best interest of the Company and shareholders, enhancing net asset value per share and/or earnings per share[77](index=77&type=chunk) - As of the announcement date, the Company holds **8,730,000** repurchased shares as treasury shares, with an intention to resell depending on market conditions[77](index=77&type=chunk) [Audit Committee and Review of Interim Results](index=30&type=section&id=Audit%20Committee%20and%20Review%20of%20Interim%20Results) The Audit Committee has reviewed the Group's accounting principles, risk management, internal controls, and financial reporting matters, and reviewed the unaudited interim condensed consolidated financial information for H1 2025; PricewaterhouseCoopers has reviewed the financial information in accordance with Hong Kong Standard on Review Engagements - The Audit Committee, comprising three independent non-executive directors, has reviewed the Group's accounting principles, risk management, internal controls, and financial reporting matters[80](index=80&type=chunk) - The Group's unaudited interim condensed consolidated financial information has been reviewed by PricewaterhouseCoopers in accordance with Hong Kong Standard on Review Engagements 2410[80](index=80&type=chunk) [Publication of Interim Results Announcement and Interim Report](index=30&type=section&id=Publication%20of%20Interim%20Results%20Announcement%20and%20Interim%20Report) This interim results announcement has been published on the Stock Exchange and Company websites; the H1 2025 interim report will be dispatched to shareholders in due course and will be available on the Stock Exchange and Company websites - This interim results announcement has been published on the Stock Exchange website (www.hkexnews.hk) and the Company's website (www.cmermedical.com)[81](index=81&type=chunk) - The Company's H1 2025 interim report will be dispatched to shareholders in due course and will be available on the Stock Exchange and Company websites[81](index=81&type=chunk) ```

1.1 本中期業績公告（半年度報告摘要）摘自中國石油天然氣股份有限公司 （「本公司」）二零二五年半年度報告全文，為全面了解本公司的經營成果、財務 狀 況 及 未 來 發 展 規 劃 ， 投 資 者 應 當 到 上 海 證 券 交 易 所 網 站 （ 網 址 https://www.sse.com.cn）、香港聯合交易所有限公司（「香港聯交所」）「披露易」 網 站 （ 網 址 https://www.hkexnews.hk ） 及 本 公 司 網 站 （ 網 址 https://www.petrochina.com.cn）仔細閱讀本公司二零二五年半年度報告全文。 香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其準確 性或完整性亦不發表任何聲明，並明確表示，概不對因本公告全部或任何部份內容而產生或因 倚賴該等內容而引致的任何損失承擔任何責任。 中國石油天然氣股份有限公司 PETROCHINA COMPANY LIMITED （於中華人民共和國註冊成立之股份有限公司） （於香港聯交所股票代碼：857；於上海證券交易所股票代碼：601857） 二零二五年中期業績公告（半年度報告摘要） 1 ...

香港交易及結算所有限公司以及香港聯合交易所有限公司（「聯交所」）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，並明確表示不會就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。 KELFRED HOLDINGS LIMITED 恒發光學控股有限公司 （於開曼群島註冊成立的有限公司） （股份代號：1134） 截至二零二五年六月三十日止六個月的 中期業績公告 恒發光學控股有限公司（「本公司」）董事會（「董事會」）欣然公佈本公司及其附 屬公司（統稱「本集團」）截至二零二五年六月三十日止六個月的未經審核簡明 綜合財務業績。本公告列載本公司截至二零二五年六月三十日止六個月的中 期報告（「中期報告」）全文，符合聯交所證券上市規則中有關未經審核中期業績 初步公告附載資料的相關要求。中期報告的印刷版本將於適當時候寄發予本 公司的股東，並於網站www.hkexnews.hk 及本公司的網站www.kelfred.com.hk 上 可供查閱。 承董事會命 恒發光學控股有限公司 主席兼執行董事 郭君暉 香港，二零二五年八月二十六日 於本公告日期，執行董事為郭君暉先生及郭君宇先生；非執行 ...

[CORPORATE INFORMATION](index=4&type=section&id=CORPORATE%20INFORMATION) This section details the company's corporate governance structure, including its board of directors, committees, key personnel, and registered offices [Board of Directors](index=4&type=section&id=Board%20of%20Directors) The company's Board of Directors comprises executive, non-executive, and independent non-executive directors, with Mr. He Peng appointed as Deputy Managing Director and Mr. Wang Hongpeng resigning during the reporting period - Mr. He Peng was appointed as Executive Director and Deputy Managing Director on **April 15, 2025**[10](index=10&type=chunk)[12](index=12&type=chunk) - Mr. Wang Hongpeng resigned as Executive Director on **March 16, 2025**[10](index=10&type=chunk)[12](index=12&type=chunk) [Committees](index=4&type=section&id=Committees) The company has an Executive Committee, Audit Committee, Nomination Committee, and Remuneration Committee, each with designated chairpersons and members - The Audit Committee is chaired by **Mr. Lam Yiu Kin**[11](index=11&type=chunk)[12](index=12&type=chunk) - The Nomination Committee is chaired by **Mr. Xu Liang**[11](index=11&type=chunk)[12](index=12&type=chunk) - The Remuneration Committee is chaired by **Ms. Wu Chun Hua**[11](index=11&type=chunk)[12](index=12&type=chunk) [Company Secretary and Auditor](index=5&type=section&id=Company%20Secretary%20and%20Auditor) Mr. Shang Yu Hung serves as Company Secretary, with RSM Hong Kong appointed as the new auditor on May 23, 2025, succeeding PricewaterhouseCoopers on the same date - The Company Secretary is **Mr. Shang Yu Hung**, a member of the Hong Kong Institute of Certified Public Accountants[13](index=13&type=chunk)[14](index=14&type=chunk) - **RSM Hong Kong** was appointed as auditor on **May 23, 2025**[13](index=13&type=chunk)[14](index=14&type=chunk) - **PricewaterhouseCoopers** retired as auditor on **May 23, 2025**[13](index=13&type=chunk)[14](index=14&type=chunk) [Registered and Principal Offices](index=5&type=section&id=Registered%20and%20Principal%20Offices) The company's registered office is in Bermuda, with its principal place of business in Hong Kong located at Harbour Centre, Wanchai - The company's stock code is **8271**[15](index=15&type=chunk) - The company's website is **www.gdc-world.com**[15](index=15&type=chunk) [INDEPENDENT REVIEW REPORT](index=6&type=section&id=INDEPENDENT%20REVIEW%20REPORT) This section presents the independent auditor's review report on the interim financial information, outlining the scope and conclusion of their limited assurance engagement [Introduction and Scope of Review](index=6&type=section&id=Introduction%20and%20Scope%20of%20Review) The auditor reviewed the interim financial information for the six months ended June 30, 2025, in accordance with Hong Kong Standard on Review Engagements 2410, which is less extensive than an audit, thus no audit opinion is expressed - The scope of review complies with **Hong Kong Standard on Review Engagements 2410** issued by the Hong Kong Institute of Certified Public Accountants[17](index=17&type=chunk)[19](index=19&type=chunk) - The scope of review is substantially less than an audit, therefore **no audit opinion is expressed**[17](index=17&type=chunk)[19](index=19&type=chunk) [Conclusion](index=7&type=section&id=Conclusion) Based on the review, the auditor found no material modifications needed for the interim financial information to be prepared in accordance with Hong Kong Accounting Standard 34 - The auditor found no matters indicating the interim financial information is not prepared, in all material respects, in accordance with **Hong Kong Accounting Standard 34**[20](index=20&type=chunk)[21](index=21&type=chunk) - The report date is **August 20, 2025**[22](index=22&type=chunk) [INTERIM RESULTS](index=8&type=section&id=INTERIM%20RESULTS) This section presents the condensed consolidated financial statements, including the statement of profit or loss, financial position, changes in equity, and cash flows for the interim period [CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME](index=8&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENT%20OF%20PROFIT%20OR%20LOSS%20AND%20OTHER%20COMPREHENSIVE%20INCOME) For the six months ended June 30, 2025, the Group reported revenue from continuing operations of **HKD 30,019 thousand** and an operating loss of **HKD 5,165 thousand**, with profit from discontinued operations of **HKD 28,816 thousand** resulting in a total profit of **HKD 24,033 thousand** for the period Summary of Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the six months ended June 30) | Metric | 2025 (thousand HKD) | 2024 (thousand HKD) | Change (thousand HKD) | Change Rate | | :--- | :--- | :--- | :--- | :--- | | **Continuing Operations** | | | | | | Revenue | 30,019 | 37,173 | (7,154) | -19.25% | | Cost of sales | (24,357) | (34,984) | 10,627 | -30.38% | | Gross profit | 5,662 | 2,189 | 3,473 | 158.66% | | Other income | 6,777 | 5,221 | 1,556 | 29.80% | | Distribution and selling expenses | (3,011) | (12,839) | 9,828 | -76.55% | | Administrative expenses | (12,960) | (16,090) | 3,130 | -19.45% | | Operating loss | (5,165) | (22,668) | 17,503 | -77.21% | | Loss before income tax | (5,254) | (22,833) | 17,579 | -76.90% | | Loss for the period from continuing operations | (4,783) | (22,220) | 17,437 | -78.47% | | **Discontinued Operations** | | | | | | Profit/(loss) for the period from discontinued operations | 28,816 | (472) | 29,288 | -6205.08% | | **Total** | | | | | | Profit/(loss) for the period | 24,033 | (22,692) | 46,725 | -205.07% | | Profit/(loss) for the period attributable to owners of the Company | 25,150 | (22,541) | 47,691 | -211.58% | | Basic and diluted earnings/(loss) per share (HK cents) | 1.67 | (1.50) | 3.17 | -211.33% | [CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION](index=11&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENT%20OF%20FINANCIAL%20POSITION) As of June 30, 2025, the Group's total assets were **HKD 482,648 thousand**, a slight increase from December 31, 2024, with total equity attributable to owners of the Company rising to **HKD 386,408 thousand** and non-controlling interests turning positive Summary of Condensed Consolidated Statement of Financial Position | Metric | June 30, 2025 (thousand HKD) | December 31, 2024 (thousand HKD) | Change (thousand HKD) | Change Rate | | :--- | :--- | :--- | :--- | :--- | | **Assets** | | | | | | Total non-current assets | 267,780 | 237,635 | 30,145 | 12.69% | | Total current assets | 214,868 | 236,689 | (21,821) | -9.22% | | Total assets | 482,648 | 474,324 | 8,324 | 1.75% | | **Equity** | | | | | | Total equity attributable to owners of the Company | 386,408 | 358,266 | 28,142 | 7.85% | | Non-controlling interests | 332 | (122,316) | 122,648 | -100.28% | | Total equity | 386,740 | 235,950 | 150,790 | 63.91% | | **Liabilities** | | | | | | Total non-current liabilities | 20,720 | 13,753 | 6,967 | 50.66% | | Total current liabilities | 75,188 | 224,621 | (149,433) | -66.53% | | Total liabilities | 95,908 | 238,374 | (142,466) | -59.77% | | Total equity and liabilities | 482,648 | 474,324 | 8,324 | 1.75% | [CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY](index=13&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENT%20OF%20CHANGES%20IN%20EQUITY) For the six months ended June 30, 2025, total equity attributable to owners of the Company increased, primarily due to profit for the period and currency translation differences, while the deconsolidation of discontinued operations significantly impacted non-controlling interests Summary of Condensed Consolidated Statement of Changes in Equity (For the six months ended June 30) | Metric | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | **Attributable to owners of the Company** | | | | Balance at January 1 | 358,266 | 432,883 | | Profit/(loss) for the period | 25,150 | (22,541) | | Other comprehensive income | 2,992 | (9,348) | | Deconsolidation | – | – | | Transfer to statutory reserve | – | – | | Balance at June 30 | 386,408 | 400,994 | | **Non-controlling interests** | | | | Balance at January 1 | (122,316) | (124,695) | | Profit/(loss) for the period | (1,117) | (151) | | Other comprehensive income | (4,444) | 2,928 | | Deconsolidation | 128,209 | – | | Balance at June 30 | 332 | (121,918) | | **Total** | | | | Balance at June 30 | 386,740 | 279,076 | - The deconsolidation of discontinued operations resulted in an increase of **HKD 128,209 thousand** in non-controlling interests[41](index=41&type=chunk) [CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS](index=15&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENT%20OF%20CASH%20FLOWS) For the six months ended June 30, 2025, net cash generated from operating activities was **HKD 1,150 thousand**, net cash used in investing activities was **HKD 26,996 thousand**, and net cash used in financing activities was **HKD 374 thousand**, leading to a net decrease of **HKD 26,220 thousand** in cash and cash equivalents Summary of Condensed Consolidated Statement of Cash Flows (For the six months ended June 30) | Metric | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | Net cash generated from/(used in) operating activities | 1,150 | (6,658) | | Net cash used in investing activities | (26,996) | (2,472) | | Net cash used in financing activities | (374) | (9) | | Net decrease in cash and cash equivalents | (26,220) | (9,139) | | Cash and cash equivalents at end of period | 203,076 | 233,846 | - Net cash outflow from investing activities significantly increased, primarily due to the purchase of time deposits totaling **HKD 24,138 thousand**[44](index=44&type=chunk) [NOTES TO THE CONDENSED FINANCIAL STATEMENTS](index=16&type=section&id=NOTES%20TO%20THE%20CONDENSED%20FINANCIAL%20STATEMENTS) This section provides detailed notes to the condensed financial statements, covering general information, basis of preparation, accounting standards, estimates, and financial risk management [1. GENERAL INFORMATION](index=16&type=section&id=1.%20GENERAL%20INFORMATION) The Company is incorporated in Bermuda and primarily engages in computer graphics creation and production, IP-based digital visual business, property asset management, and property leasing services in China - The Group's principal activities include computer graphics (CG) creation and production services, IP-based digital visual business, property asset management, and property leasing and management services[47](index=47&type=chunk)[53](index=53&type=chunk) [2. BASIS OF PREPARATION](index=16&type=section&id=2.%20BASIS%20OF%20PREPARATION) The condensed financial statements are prepared in accordance with Hong Kong Accounting Standard 34 and the GEM Listing Rules, on a going concern basis - The condensed financial statements are prepared in accordance with **Hong Kong Accounting Standard 34 "Interim Financial Reporting"** and the **GEM Listing Rules**[50](index=50&type=chunk)[56](index=56&type=chunk) - The Group continues to prepare its financial statements on a **going concern basis**[52](index=52&type=chunk)[57](index=57&type=chunk) [3. ADOPTION OF NEW AND AMENDED HKFRS ACCOUNTING STANDARDS](index=17&type=section&id=3.%20ADOPTION%20OF%20NEW%20AND%20AMENDED%20HKFRS%20ACCOUNTING%20STANDARDS) The Group first adopted the amended Hong Kong Accounting Standard 21 "Lack of Exchangeability" on January 1, 2025, without resulting in changes to accounting policies or retrospective adjustments - The Group first adopted the amended **Hong Kong Accounting Standard 21 "Lack of Exchangeability"** on **January 1, 2025**[58](index=58&type=chunk)[64](index=64&type=chunk) - The adoption of new standards did not result in changes to accounting policies or retrospective adjustments[58](index=58&type=chunk)[64](index=64&type=chunk) [4. ESTIMATES](index=17&type=section&id=4.%20ESTIMATES) The preparation of condensed financial statements involves management's judgments, estimates, and assumptions, with significant judgments made in this period consistent with the consolidated financial statements for the year ended December 31, 2024 - The preparation of condensed financial statements requires management to make judgments, estimates, and assumptions[59](index=59&type=chunk)[65](index=65&type=chunk) - Significant judgments made in this period are consistent with those in the consolidated financial statements for the year ended **December 31, 2024**[60](index=60&type=chunk)[65](index=65&type=chunk) [5. FINANCIAL RISK MANAGEMENT](index=17&type=section&id=5.%20FINANCIAL%20RISK%20MANAGEMENT) The Group is exposed to market risks (foreign exchange, interest rate), credit risk, and liquidity risk, with investment property fair value estimated using the income approach based on yield rates and market rents - The Group is exposed to market risks (including foreign exchange risk, interest rate risk), credit risk, and liquidity risk[61](index=61&type=chunk)[66](index=66&type=chunk) - There were no significant changes in the contractual undiscounted cash outflows for financial liabilities compared to the year-end[68](index=68&type=chunk)[71](index=71&type=chunk) Investment Property Fair Value Estimation (Level 3) | Description | Valuation Technique | Unobservable Inputs | Range (June 30, 2025) | Range (December 31, 2024) | | :--- | :--- | :--- | :--- | :--- | | Office building | Income approach | Yield rate | 7.5% | 7.5% | | | | Market rent | RMB 90 per sq.m. per month | RMB 91 per sq.m. per month | - The fair value of investment properties is valued every six months by **Roma Appraisals Limited**, an external independent valuer[86](index=86&type=chunk)[90](index=90&type=chunk) [6. SEGMENT INFORMATION](index=23&type=section&id=6.%20SEGMENT%20INFORMATION) The Group is segmented into Interactive Entertainment and Digital Assets and Property Asset Management, with total revenue of **HKD 30,019 thousand** for the six months ended June 30, 2025, primarily from Mainland China - Management has renamed "Cultural and Sports New Space" to "**Property Asset Management**"[96](index=96&type=chunk) - The Group has two reportable segments: **Interactive Entertainment and Digital Assets**, and **Property Asset Management**[97](index=97&type=chunk) Segment Revenue and Results (For the six months ended June 30) | Segment | 2025 Revenue (thousand HKD) | 2024 Revenue (thousand HKD) | 2025 Segment Results (thousand HKD) | 2024 Segment Results (thousand HKD) | | :--- | :--- | :--- | :--- | :--- | | Interactive Entertainment and Digital Assets | 11,595 | 14,575 | (4,650) | (25,061) | | Property Asset Management | 18,424 | 22,598 | 3,545 | 9,556 | | **Total** | **30,019** | **37,173** | **(1,105)** | **(15,505)** | Revenue by Geographical Location (For the six months ended June 30) | Region | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | Mainland China | 29,584 | 37,095 | | Hong Kong | 435 | 78 | | **Total** | **30,019** | **37,173** | [7. OTHER INCOME](index=28&type=section&id=7.%20OTHER%20INCOME) For the six months ended June 30, 2025, other income primarily comprised government grants and interest income, totaling **HKD 6,777 thousand**, an increase from the prior period Details of Other Income (For the six months ended June 30) | Item | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | Government grants | 4,608 | 2,468 | | Interest income | 2,058 | 2,327 | | Others | 111 | 426 | | **Total** | **6,777** | **5,221** | - Government grants primarily serve as incentives for the Group's industry development[112](index=112&type=chunk) [8. OTHER LOSSES, NET](index=28&type=section&id=8.%20OTHER%20LOSSES,%20NET) For the six months ended June 30, 2025, net other losses amounted to **HKD 1,633 thousand**, primarily due to increased losses from changes in the fair value of investment properties Details of Other Losses, Net (For the six months ended June 30) | Item | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | Changes in fair value of investment properties | (1,645) | (867) | | Gain on disposal of property, plant and equipment | 26 | 5 | | Exchange losses, net | (14) | (212) | | **Total** | **(1,633)** | **(1,074)** | [9. LOSS BEFORE INCOME TAX](index=29&type=section&id=9.%20LOSS%20BEFORE%20INCOME%20TAX) For the six months ended June 30, 2025, loss before income tax was reached after deducting key expenses such as employee benefit expenses, amortization of movie and television program rights, and depreciation of property, plant and equipment Key Deductions for Loss Before Income Tax (For the six months ended June 30) | Item | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | Employee benefit expenses | 14,244 | 20,136 | | Amortisation of movies and television programmes rights | 9,782 | 14,410 | | Depreciation of property, plant and equipment | 876 | 1,055 | | Depreciation of right-of-use assets | 630 | 1,471 | [10. FINANCE COST](index=29&type=section&id=10.%20FINANCE%20COST) For the six months ended June 30, 2025, finance costs amounted to **HKD 89 thousand**, primarily attributable to the interest component of lease liabilities Details of Finance Cost (For the six months ended June 30) | Item | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | Finance costs on lease liabilities | 89 | 165 | [11. INCOME TAX CREDIT](index=30&type=section&id=11.%20INCOME%20TAX%20CREDIT) For the six months ended June 30, 2025, the Group received an income tax credit of **HKD 471 thousand**, primarily from PRC corporate income tax at a 25% rate for Chinese subsidiaries, with some enjoying tax benefits - For the six months ended June 30, 2025, the income tax credit was **HKD 471 thousand** (2024: HKD 613 thousand)[120](index=120&type=chunk)[121](index=121&type=chunk) - PRC subsidiaries are subject to PRC corporate income tax at a rate of **25%**, with some enjoying tax concessions[119](index=119&type=chunk)[121](index=121&type=chunk) [12. EARNINGS/(LOSS) PER SHARE](index=30&type=section&id=12.%20EARNINGS%2F(LOSS)%20PER%20SHARE) For the six months ended June 30, 2025, basic and diluted earnings per share attributable to owners of the Company were **1.67 HK cents**, primarily influenced by profit contributions from discontinued operations Details of Earnings/(Loss) Per Share (For the six months ended June 30) | Item | 2025 (HK cents) | 2024 (HK cents) | | :--- | :--- | :--- | | Continuing operations | (0.32) | (1.48) | | Discontinued operations | 1.99 | (0.02) | | **Total basic and diluted earnings/(loss) per share** | **1.67** | **(1.50)** | - Diluted earnings/(loss) per share is the same as basic earnings/(loss) per share as there were no potential dilutive ordinary shares during the period[125](index=125&type=chunk) [13. DIVIDEND](index=31&type=section&id=13.%20DIVIDEND) The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025 - The Board does not recommend the payment of an interim dividend for the six months ended **June 30, 2025** (2024: nil)[126](index=126&type=chunk) [14. DISCONTINUED OPERATION](index=32&type=section&id=14.%20DISCONTINUED%20OPERATION) Guangdong Global Digital Creative Industries Co., Ltd.'s insolvency-based bankruptcy liquidation application was accepted by Guangzhou Intermediate People's Court, leading to its deconsolidation on June 11, 2025, and a gain of **HKD 33,953 thousand** attributable to owners of the Company - **Guangdong Global Digital Creative Industries Co., Ltd.** (a non-wholly owned subsidiary) had its bankruptcy liquidation application accepted due to insolvency[128](index=128&type=chunk)[131](index=131&type=chunk) - The Group ceased to have control over Guangdong Global Digital on **June 11, 2025**, and its financial results are no longer consolidated[129](index=129&type=chunk)[131](index=131&type=chunk) Financial Information of Discontinued Operation (For the six months ended June 30) | Item | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | Loss for the period | (5,137) | (472) | | Gain attributable to owners of the Company upon deconsolidation | 33,953 | – | | **Total** | **28,816** | **(472)** | | Net cash outflow from operating activities | (784) | (543) | - Upon deconsolidation, the gain attributable to owners of the Company was **HKD 33,953 thousand**[136](index=136&type=chunk)[137](index=137&type=chunk) [15. PROPERTY, PLANT AND EQUIPMENT](index=34&type=section&id=15.%20PROPERTY,%20PLANT%20AND%20EQUIPMENT) As of June 30, 2025, the net book value of property, plant and equipment was **HKD 10,999 thousand**, with additions and depreciation recorded during the period Changes in Property, Plant and Equipment (For the six months ended June 30) | Item | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | Net book value at January 1 | 11,384 | 12,336 | | Additions | 377 | 376 | | Depreciation | (876) | (1,062) | | Disposals | (201) | – | | Exchange adjustments | 315 | (283) | | **Net book value at June 30** | **10,999** | **11,367** | [16. INVESTMENT PROPERTY](index=34&type=section&id=16.%20INVESTMENT%20PROPERTY) As of June 30, 2025, investment property measured at fair value was **HKD 216,667 thousand**, with a decrease in fair value during the period Changes in Investment Property (For the six months ended June 30) | Item | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | Balance at January 1 | 211,809 | 231,388 | | Changes in fair value | (1,645) | (867) | | Exchange adjustments | 6,503 | (5,467) | | **Balance at June 30** | **216,667** | **225,054** | - The investment property is located in **Shenzhen, Mainland China**[144](index=144&type=chunk) [17. INTEREST IN AN ASSOCIATE](index=35&type=section&id=17.%20INTEREST%20IN%20AN%20ASSOCIATE) The Group holds a **49% interest** in Global Digital Media Technology (Macau) Co., Ltd., an associate primarily providing computer graphics animation creation and production services, whose financial information was immaterial during the period - The Group holds a **49% interest** in Global Digital Media Technology (Macau) Co., Ltd[149](index=149&type=chunk) - The associate's principal activity is providing **computer graphics animation creation and production services**[149](index=149&type=chunk) - The financial information of Global Digital Macau was immaterial during the period, thus no summary of financial information is presented[150](index=150&type=chunk) [18. MOVIES AND TELEVISION PROGRAMMES RIGHTS AND PRODUCTIONS WORK IN PROGRESS](index=36&type=section&id=18.%20MOVIES%20AND%20TELEVISION%20PROGRAMMES%20RIGHTS%20AND%20PRODUCTIONS%20WORK%20IN%20PROGRESS) As of June 30, 2025, the net book value of movie and television program rights was **HKD 862 thousand**, work in progress was transferred to zero, and amortization for the period was **HKD 9,782 thousand** Changes in Movies and Television Programmes Rights and Productions Work in Progress (For the six months ended June 30) | Item | Movies and television programmes rights (thousand HKD) | Productions work in progress (thousand HKD) | Total (thousand HKD) | | :--- | :--- | :--- | :--- | | Net book value at January 1 | 648 | 5,425 | 6,073 | | Additions | – | 4,478 | 4,478 | | Amortisation | (9,782) | – | (9,782) | | Transfers | 9,973 | (9,973) | – | | Exchange adjustments | 23 | 70 | 93 | | **Net book value at June 30** | **862** | **–** | **862** | - For the six months ended June 30, 2025, amortization of **HKD 9,782 thousand** was included in "cost of sales"[152](index=152&type=chunk) [19. TRADE RECEIVABLES](index=37&type=section&id=19.%20TRADE%20RECEIVABLES) As of June 30, 2025, total trade receivables were **HKD 4,460 thousand**, mostly current to 90 days, with an impairment provision of **HKD 191 thousand** Details of Trade Receivables (As of June 30) | Item | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | Trade receivables from contracts with customers | 2,540 | 1,738 | | Rental receivables | 1,920 | 1,736 | | **Total** | **4,460** | **3,474** | | Less: Impairment allowance | (191) | (185) | | **Net** | **4,269** | **3,289** | Ageing Analysis of Trade Receivables (As of June 30) | Ageing | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | Current to 90 days | 4,132 | 3,236 | | 91 to 180 days | 68 | – | | Over 180 days | 260 | 238 | | **Total** | **4,460** | **3,474** | - The carrying amounts of trade receivables are primarily denominated in **RMB**[160](index=160&type=chunk) [20. SHARE CAPITAL](index=39&type=section&id=20.%20SHARE%20CAPITAL) As of June 30, 2025, the Company's authorized share capital was **HKD 24,000 thousand**, with issued and fully paid share capital of **HKD 15,033 thousand**, and no changes in share capital during the period Share Capital Structure (As of June 30) | Item | Number of Shares | Nominal Value (thousand HKD) | | :--- | :--- | :--- | | Authorised share capital (HKD 0.01 per share) | 2,400,000,000 | 24,000 | | Issued and fully paid share capital (HKD 0.01 per share) | 1,503,309,540 | 15,033 | - For the six months ended June 30, 2024, the remaining **260,000 treasury shares** were cancelled[164](index=164&type=chunk) [21. OTHER RESERVES](index=40&type=section&id=21.%20OTHER%20RESERVES) As of June 30, 2025, total other reserves amounted to **HKD 345,805 thousand**, primarily influenced by currency translation differences and transfers to statutory reserves Changes in Other Reserves (For the six months ended June 30) | Item | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | Balance at January 1 | 342,796 | 355,579 | | Currency translation differences | 10,770 | (9,348) | | Exchange reserve gain related to discontinued operation | (7,778) | – | | Transfer to statutory reserve | 17 | (109) | | Cancellation of treasury shares | – | 3 | | **Balance at June 30** | **345,805** | **346,125** | - According to PRC laws and regulations, at least **10% of net profit after tax** must be allocated to the statutory reserve until it reaches **50% of the registered capital**[175](index=175&type=chunk) [22. TRADE PAYABLES, ACCRUALS AND OTHER PAYABLES](index=43&type=section&id=22.%20TRADE%20PAYABLES,%20ACCRUALS%20AND%20OTHER%20PAYABLES) As of June 30, 2025, total trade payables, accruals, and other payables amounted to **HKD 54,989 thousand**, a decrease from December 31, 2024, primarily denominated in RMB Details of Trade Payables, Accruals and Other Payables (As of June 30) | Item | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | Trade payables | 24 | 47 | | Advances from non-controlling interests | 21,930 | 21,277 | | Accruals | 2,285 | 6,442 | | Salaries payable | 10,138 | 9,326 | | Deposits | 6,245 | 10,946 | | Construction costs payable | 350 | 1,913 | | Other taxes payable | 1,350 | 333 | | Rental income received in advance | 385 | 1,504 | | Others | 12,282 | 11,878 | | **Total** | **54,989** | **63,666** | - The carrying amounts of trade payables, accruals, and other payables approximate their fair values[179](index=179&type=chunk) - The transaction with **Sunye International Limited** is not yet completed as Foshan Global Digital Media has not yet completed the transfer of its **5% equity interest** to it[185](index=185&type=chunk)[188](index=188&type=chunk) [23. PROVISION FOR RENTAL AND SETTLEMENT PAYABLES](index=45&type=section&id=23.%20PROVISION%20FOR%20RENTAL%20AND%20SETTLEMENT%20PAYABLES) As of June 30, 2025, the provision for rental and settlement payables was zero, primarily due to the deconsolidation of Guangdong Global Digital following bankruptcy liquidation, which previously involved legal disputes with Pearl River Film Studio Co., Ltd Provision for Rental and Settlement Payables (As of June 30) | Item | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | Accrued rental and settlement payables and late payment charges | – | 138,225 | - Guangdong Global Digital's bankruptcy liquidation application was accepted by the **Guangzhou Intermediate People's Court** on **May 26, 2025**, and a bankruptcy administrator was officially appointed on **June 11, 2025**[193](index=193&type=chunk)[195](index=195&type=chunk) - Guangdong Global Digital's application for retrial regarding property occupation fees and capital contributions for the Cultural Industrial Park property was **rejected by the Supreme People's Court**[196](index=196&type=chunk)[197](index=197&type=chunk)[199](index=199&type=chunk) - Guangdong Global Digital filed a protest application with the **Supreme People's Procuratorate of the PRC** on **November 27, 2024**, and is currently awaiting a ruling[200](index=200&type=chunk)[202](index=202&type=chunk) [24. RELATED PARTY TRANSACTIONS](index=48&type=section&id=24.%20RELATED%20PARTY%20TRANSACTIONS) The Group engaged in various related party transactions with its major shareholder, Shougang Holding (Hong Kong) Company Limited, and its subsidiaries, including consultancy fees, rental expenses, management fees, interest income, and CG production income - The Company's major shareholder is **Shougang Holding (Hong Kong) Company Limited**, a wholly-owned subsidiary of Shougang Group Co., Ltd[205](index=205&type=chunk)[207](index=207&type=chunk) Related Party Transactions (For the six months ended June 30) | Item | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | Consultancy fees received by Shougang HK | – | 1,440 | | Rental expenses paid to a subsidiary of Shougang HK | 294 | – | | Management fees received from Shougang HK | 240 | – | | Disposal of property, plant and equipment to Shougang HK | 201 | – | | Interest income from Shougang Group Finance Co., Ltd. | 66 | 69 | | CG production income received from Shougang Group Co., Ltd. | 14 | – | Amounts Due from Related Parties at Period End (As of June 30) | Item | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | Amounts due from an associate (net) | – | – | | Amounts due from Shougang Group Finance Co., Ltd. | 8,978 | 8,646 | | Amounts due from Shougang HK | 441 | 34 | - Amounts due from related parties are **unsecured, interest-free, and repayable on demand**[215](index=215&type=chunk) [MANAGEMENT DISCUSSION AND ANALYSIS](index=50&type=section&id=MANAGEMENT%20DISCUSSION%20AND%20ANALYSIS) This section provides management's review and analysis of the Group's financial performance, business operations, and future outlook for the interim period [FINANCIAL REVIEW](index=50&type=section&id=FINANCIAL%20REVIEW) For the six months ended June 30, 2025, the Group's revenue from continuing operations decreased, but cost of sales, distribution and selling expenses, and administrative expenses all reduced, coupled with a one-off net gain from discontinued operations, leading to a significant increase in total profit for the period, robust liquidity, and improved capital structure - Revenue from continuing operations was **HKD 30,019 thousand**, a year-on-year decrease of **HKD 7,154 thousand**, primarily due to reduced animated film distribution, lower rental and management service income, partially offset by increased production income[216](index=216&type=chunk)[222](index=222&type=chunk) - Cost of sales decreased by **HKD 10,627 thousand**, mainly due to reduced original film production costs and staff costs[217](index=217&type=chunk)[222](index=222&type=chunk) - Distribution and selling expenses decreased by **HKD 9,828 thousand**, and administrative expenses decreased by **HKD 3,130 thousand**[219](index=219&type=chunk)[220](index=220&type=chunk)[223](index=223&type=chunk) - Discontinued operations generated a profit of **HKD 28,816 thousand**, primarily from a one-off net gain of **HKD 33,953 thousand** from the deconsolidation of Guangdong Global Digital[226](index=226&type=chunk)[232](index=232&type=chunk) - Total profit for the period was **HKD 24,033 thousand**, a year-on-year increase of **HKD 46,725 thousand**[227](index=227&type=chunk)[232](index=232&type=chunk) - As of June 30, 2025, cash and cash equivalents were **HKD 203,076 thousand**, with a current ratio of **2.86** (December 31, 2024: 1.05)[228](index=228&type=chunk)[229](index=229&type=chunk)[233](index=233&type=chunk) - Equity attributable to owners of the Company increased to **HKD 386,408 thousand**, primarily influenced by profit for the period and exchange differences[230](index=230&type=chunk)[234](index=234&type=chunk) [BUSINESS REVIEW AND OUTLOOK](index=52&type=section&id=BUSINESS%20REVIEW%20AND%20OUTLOOK) In the first half, the Group pursued a dual strategy of innovation-driven and quality-efficiency enhancement, with the Interactive Entertainment and Digital Assets segment achieving significant results in R&D and IP operations, while Property Asset Management focused on cost control; the second half will prioritize "deep technology, asset activation, and ecosystem synergy" strategies - The Group adhered to a dual core strategy of **innovation-driven development and quality and efficiency enhancement** in the first half of the year[241](index=241&type=chunk)[246](index=246&type=chunk) - The Interactive Entertainment and Digital Assets segment successfully released the original movie **Ocean Series 11**, advanced IP operations for "Ocean Series" and "Journey to the West," and collaborated with **Tencent** and **CCTV Animation**[249](index=249&type=chunk)[252](index=252&type=chunk) - This segment made progress in **AIGC technology application** and expanding international orders for virtual humans, with its self-developed "AI Cloud Mirror Journey" generating revenue[249](index=249&type=chunk)[252](index=252&type=chunk) - The Property Asset Management segment's Global Digital Building maintained a **high occupancy rate** and significantly reduced operating costs through personnel optimization and energy consumption control[251](index=251&type=chunk)[253](index=253&type=chunk) - The Group received **13 government grants and awards**, including subsidies for the original Ocean animated film series and an award for the digital virtual human A.I. large model driven platform[255](index=255&type=chunk)[258](index=258&type=chunk) - Technology R&D focuses on **AIGC**, achieving a strategic upgrade from traditional production processes to a technology solutions provider, with achievements in VR360 panoramic rendering, AI facial animation, DynamicRig plugin, AI large language model localization, and digital avatar platforms[257](index=257&type=chunk)[259](index=259&type=chunk)[260](index=260&type=chunk) - For the second half, the Group will focus on "deep technology, asset activation, and ecosystem synergy" as its core strategy, promoting key IP project commercialization, strengthening collaborations with clients like **Huawei** and **Qualcomm**, and expanding "VR+cultural tourism" applications[261](index=261&type=chunk)[264](index=264&type=chunk) [LITIGATIONS](index=55&type=section&id=LITIGATIONS) The Group faces two major litigations: the Chengdu Wuhou Sports Park project, where IDMT Shenzhen seeks agreement termination and compensation, and the Guangzhou Zhuying Cultural Industrial Park project, where Guangdong Global Digital has filed a protest with the Supreme People's Procuratorate, with no judgments yet - **IDMT Shenzhen** filed a civil lawsuit against Wuhou Investment regarding the Chengdu Wuhou Sports Park project, seeking termination of the operation and management agreement and claiming **RMB 11,064,144.74** in compensation[263](index=263&type=chunk)[266](index=266&type=chunk) - All litigation cases between **Guangdong Global Digital** and **Pearl River Film Studio Co., Ltd.** concerning the Zhuying Cultural Industrial Park project have been concluded and enforced, with Guangdong Global Digital having filed a protest with the **Supreme People's Procuratorate of the People's Republic of China**, and no judgment yet rendered[269](index=269&type=chunk)[274](index=274&type=chunk) - As Guangdong Global Digital has been taken over by a bankruptcy administrator, subsequent protest procedures will be followed up by the **bankruptcy administrator**[270](index=270&type=chunk)[275](index=275&type=chunk) [DECONSOLIDATION OF GUANGDONG GDC](index=56&type=section&id=DECONSOLIDATION%20OF%20GUANGDONG%20GDC) Guangdong Global Digital's bankruptcy liquidation application was accepted by the court, and a bankruptcy administrator was officially appointed on June 11, 2025, from which date the Company ceased to control it, and its financial performance is no longer consolidated into the Group's results - Guangdong Global Digital's bankruptcy liquidation application was accepted by the court, and a bankruptcy administrator was officially appointed on **June 11, 2025**[271](index=271&type=chunk)[276](index=276&type=chunk) - The Company ceased to have control over Guangdong Global Digital from **June 11, 2025**, and its financial performance is no longer consolidated into the Group's financial results[271](index=271&type=chunk)[276](index=276&type=chunk) [INTERIM DIVIDEND](index=57&type=section&id=INTERIM%20DIVIDEND) This section addresses the Board's recommendation regarding the payment of an interim dividend for the reporting period [Interim Dividend Recommendation](index=57&type=section&id=Interim%20Dividend%20Recommendation) The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025 - The Board does not recommend the payment of an interim dividend for the six months ended **June 30, 2025** (2024: nil)[278](index=278&type=chunk)[281](index=281&type=chunk) [PURCHASE, SALE OR REDEMPTION OF THE COMPANY'S LISTED SECURITIES](index=57&type=section&id=PURCHASE,%20SALE%20OR%20REDEMPTION%20OF%20THE%20COMPANY'S%20LISTED%20SECURITIES) This section confirms that there were no transactions involving the purchase, sale, or redemption of the company's listed securities during the reporting period [Listed Securities Transactions](index=57&type=section&id=Listed%20Securities%20Transactions) For the six months ended June 30, 2025, neither the Company nor its subsidiaries purchased, sold, or redeemed any listed securities - For the six months ended **June 30, 2025**, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities (including treasury shares)[279](index=279&type=chunk)[282](index=282&type=chunk) [DIRECTORS' AND CHIEF EXECUTIVES' INTERESTS AND SHORT POSITIONS IN SHARES, UNDERLYING SHARES AND DEBENTURES](index=57&type=section&id=DIRECTORS'%20AND%20CHIEF%20EXECUTIVES'%20INTERESTS%20AND%20SHORT%20POSITIONS%20IN%20SHARES,%20UNDERLYING%20SHARES%20AND%20DEBENTURES) This section discloses the long and short positions held by directors and chief executives in the company's shares, underlying shares, and debentures [Long Positions in Shares](index=58&type=section&id=Long%20Positions%20in%20Shares) As of June 30, 2025, Mr. Chen Zheng and Mr. He Peng held long positions in the Company's shares Directors' Long Positions in Shares and Underlying Shares of the Company (As of June 30, 2025) | Name of Director | Capacity in which interests are held | Interests in Shares (shares) | Approximate percentage of the Company's total issued share capital | | :--- | :--- | :--- | :--- | | Mr. Chen Zheng | Beneficial owner | 185,988,200 | 12.37% | | Mr. He Peng | Beneficial owner | 2,142,000 | 0.14% | [DIRECTORS' RIGHTS TO ACQUIRE SHARES OR DEBENTURES](index=58&type=section&id=DIRECTORS'%20RIGHTS%20TO%20ACQUIRE%20SHARES%20OR%20DEBENTURES) This section confirms that no arrangements existed for directors or their families to acquire shares or debentures of the company or any other body corporate [No Rights to Acquire Shares](index=58&type=section&id=No%20Rights%20to%20Acquire%20Shares) For the six months ended June 30, 2025, neither the Company nor its subsidiaries participated in any arrangements enabling directors or their families to acquire benefits by purchasing shares or debentures of the Company or any other body corporate - For the six months ended **June 30, 2025**, neither the Company nor any of its subsidiaries participated in any arrangements enabling directors or their families to acquire benefits by purchasing shares or debentures of the Company or any other body corporate[287](index=287&type=chunk)[288](index=288&type=chunk) [SUBSTANTIAL SHAREHOLDERS' INTERESTS AND SHORT POSITIONS IN SHARES, UNDERLYING SHARES AND DEBENTURES](index=59&type=section&id=SUBSTANTIAL%20SHAREHOLDERS'%20INTERESTS%20AND%20SHORT%20POSITIONS%20IN%20SHARES,%20UNDERLYING%20SHARES%20AND%20DEBENTURES) This section details the long and short positions held by substantial shareholders in the company's shares, underlying shares, and debentures [Long Positions of Substantial Shareholders](index=59&type=section&id=Long%20Positions%20of%20Substantial%20Shareholders) As of June 30, 2025, Shougang Group Co., Ltd., Shougang Holding (Hong Kong) Company Limited, and Upper Nice Assets Ltd. each held a **41.18% long position** in the Company's shares Substantial Shareholders' Long Positions in Shares of the Company (As of June 30, 2025) | Name of Shareholder | Capacity in which interests are held | Number of Shares held in the Company (shares) | Approximate percentage of the Company's total issued share capital | | :--- | :--- | :--- | :--- | | Shougang Group Co., Ltd. | Interest in controlled corporation | 619,168,023 | 41.18% | | Shougang Holding (Hong Kong) Company Limited | Interest in controlled corporation | 619,168,023 | 41.18% | | Upper Nice Assets Ltd. | Beneficial owner | 619,168,023 | 41.18% | - **Upper Nice** is a wholly-owned subsidiary of **Shougang HK**, which is wholly owned by **Shougang Group**, thus these companies are deemed to hold the same interests under the **Securities and Futures Ordinance**[291](index=291&type=chunk)[292](index=292&type=chunk) [SHARE OPTION SCHEME](index=60&type=section&id=SHARE%20OPTION%20SCHEME) This section confirms that the company currently does not have any share option scheme in place [No Share Option Scheme](index=60&type=section&id=No%20Share%20Option%20Scheme) The Company currently does not have any share option scheme - The Company currently has **no share option scheme**[294](index=294&type=chunk)[299](index=299&type=chunk) [DIRECTORS' INTERESTS IN COMPETING BUSINESSES](index=60&type=section&id=DIRECTORS'%20INTERESTS%20IN%20COMPETING%20BUSINESSES) This section confirms that no directors held interests in businesses that directly or indirectly compete with the Group's operations [No Competing Business Interests](index=60&type=section&id=No%20Competing%20Business%20Interests) For the six months ended June 30, 2025, no directors held interests in businesses considered to directly or indirectly compete with the Group's operations - For the six months ended **June 30, 2025**, no directors held interests in businesses considered to directly or indirectly compete with the Group's operations[295](index=295&type=chunk)[300](index=300&type=chunk) [COMPLIANCE WITH CORPORATE GOVERNANCE CODE](index=60&type=section&id=COMPLIANCE%20WITH%20CORPORATE%20GOVERNANCE%20CODE) This section confirms the company's adherence to the Corporate Governance Code provisions outlined in Appendix C1 of the GEM Listing Rules [Compliance Status](index=60&type=section&id=Compliance%20Status) For the six months ended June 30, 2025, the Company consistently complied with the code provisions of the Corporate Governance Code in Appendix C1 of the GEM Listing Rules - The Company has complied with the code provisions of the **Corporate Governance Code** as set out in **Appendix C1 of the GEM Listing Rules** for the six months ended **June 30, 2025**[296](index=296&type=chunk)[301](index=301&type=chunk) [COMPLIANCE WITH CODE OF CONDUCT REGARDING SECURITIES TRANSACTIONS BY DIRECTORS](index=60&type=section&id=COMPLIANCE%20WITH%20CODE%20OF%20CONDUCT%20REGARDING%20SECURITIES%20TRANSACTIONS%20BY%20DIRECTORS) This section confirms that all directors complied with the adopted code of conduct for securities transactions and the required standards under the GEM Listing Rules [Compliance Status](index=60&type=section&id=Compliance%20Status) All directors confirmed compliance with the Company's adopted code of conduct for securities transactions and the required standards under the GEM Listing Rules for the six months ended June 30, 2025 - All Directors confirmed compliance with the **code of conduct regarding securities transactions by Directors** adopted by the Company and the required standards under the **GEM Listing Rules** for the six months ended **June 30, 2025**[297](index=297&type=chunk)[302](index=302&type=chunk) [CHANGES IN DIRECTORS' INFORMATION](index=61&type=section&id=CHANGES%20IN%20DIRECTORS'%20INFORMATION) This section reports changes in directors' information, specifically Mr. He Peng's resignation from a previous role after his appointment to the Company [Mr. He Peng's Resignation](index=61&type=section&id=Mr.%20He%20Peng's%20Resignation) Mr. He Peng resigned as General Manager of the New Industry Department of Shougang Holding (Hong Kong) Company Limited after his appointment as Executive Director and Deputy Managing Director of the Company - **Mr. He Peng** resigned as General Manager of the New Industry Department of **Shougang Holding (Hong Kong) Company Limited** after his appointment as Executive Director and Deputy Managing Director of the Company[303](index=303&type=chunk)[306](index=306&type=chunk) [AUDIT COMMITTEE](index=61&type=section&id=AUDIT%20COMMITTEE) This section details the Audit Committee's review of the Group's unaudited interim results with the auditor and management [Review of Interim Results](index=61&type=section&id=Review%20of%20Interim%20Results) The Audit Committee, together with RSM Hong Kong and the Company's management, reviewed the Group's unaudited interim results for the six months ended June 30, 2025 - The Audit Committee has reviewed the Group's unaudited interim results for the six months ended **June 30, 2025**, with **RSM Hong Kong** and the Company's management[304](index=304&type=chunk)[307](index=307&type=chunk) [APPRECIATION](index=61&type=section&id=APPRECIATION) This section conveys the Chairman's sincere gratitude on behalf of the Board to all stakeholders [Chairman's Appreciation](index=61&type=section&id=Chairman's%20Appreciation) The Chairman, on behalf of the Board, extends sincere gratitude to shareholders, business partners, clients, management, and all staff - The Chairman, on behalf of the Board, extends sincere gratitude to shareholders, business partners, clients, management, and all staff[305](index=305&type=chunk)[308](index=308&type=chunk)

2025年中期報告 公司資料 董事會 主席兼非執行董事 霍建寧BA, DFM, FCA (ANZ) 執行董事 呂博聞BSc 執行副主席 古星輝BSc 行政總裁 非執行董事 胡超文BSc 非執行副主席 黎啟明BSc, MBA （ 亦為霍建寧及施熙德之替任董事 ） 施熙德BSE, MA, MA, EdM, Solicitor, FCG, HKFCG 馬勵志BCom, MA （ 為黎啟明之替任董事 ） 獨立非執行董事 陳子亮BSc(Econ), MBA, FHKIOD 周靜宜BA, MBA 嚴萬英BCom, MBus(Acc), CPA 葉毓強BSc, MSc, MSc 審核委員會 葉毓強 （ 主席 ） 陳子亮 嚴萬英 提名委員會 陳子亮 （ 主席 ） 施熙德 葉毓強 薪酬委員會 葉毓強 （ 主席 ） 霍建寧 周靜宜 可持續發展委員會 施熙德 （ 主席 ） 古星輝 周靜宜 公司秘書 周恩慶 核數師 羅兵咸永道會計師事務所 執業會計師 註冊公眾利益實體核數師 目錄 | • | 公司資料 | | --- | --- | | 2 | 財務摘要 | | 3 | 主席報告 | | 5 | 管理層討論及分析 | | 8 | 集 ...