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佈的內容概不 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 佈 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。 Lee's Pharmaceutical Holdings Limited 李氏大藥廠控股有限公司 * （於開曼群島註冊成立之有限公司） （股份代號：950） 截至二零二五年六月三十日止六個月中期業績 財務摘要 | | | 截至六月三十日止六個月 | | | | --- | --- | --- | --- | --- | | | | 二零二五年 | 二零二四年 | 變 動 | | | | 千港元 | 千港元 | | | | 收 益 | 694,821 | 658,345 | +5.5% | | | 毛 利 | 360,053 | 350,595 | +2.7% | | 本公司擁有人應佔溢利 | | 67,185 | 62,478 | +7.5% | | | | 港 仙 | 港 仙 | | | | 每股盈利 | | | | | | 基 本 | 11. ...

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。 Qiniu Limited 七牛智能科技有限公司 （於英屬維爾京群島註冊成立並遷至開曼群島及於開曼群島存續的有限公司) (股份代號: 2567) 截 至2025年6月30日止六個月 中期業績公告 七 牛 智 能 科 技 有 限 公 司（「本公司」或「七 牛」）董 事（「董 事」）會（「董事會」）欣 然 宣 佈， 本 公 司、其 附 屬 公 司 及 合 併 聯 屬 實 體（統 稱 為「本集團」或「我 們」）截 至2025年6月 30日 止 六 個 月（「報告期間」）之 未 經 審 核 簡 明 合 併 中 期 業 績 連 同 截 至2024年6月30 日止六個月之比較數字如下： 財務業績摘要 本集團收益由截至2024年6月30日止六個月的人民幣710.4百萬元增至截至 2025年6月30日止六個月的人民幣829.4百萬元，同比增長16.8%。 我們於截至2025年6月30日止六個月錄得虧損人民幣33.4百 ...

[Performance Highlights](index=4&type=section&id=Performance%20Highlights) This section provides an overview of the bank's financial performance and strategic focus for the period [Chairman's Report](index=4&type=section&id=Chairman's%20Report) The Chairman's Report highlights Hang Seng Bank's strategic focus and resilience amidst challenging macroeconomic conditions, driving Hong Kong's economic development - New Chairman, **Patrick Cheng**, will focus on Hang Seng Bank's strategic priorities to drive Hong Kong's economic development and uphold its traditions[8](index=8&type=chunk) - The macroeconomic environment remains challenging and uncertain, but markets show encouraging recovery signs amidst geopolitical tensions and complex trade conditions[8](index=8&type=chunk) - Hang Seng Bank maintains **strong capital**, demonstrating business flexibility and resilience by actively diversifying income sources[8](index=8&type=chunk) - The bank actively supports community development, particularly in enhancing youth financial literacy and improving cross-border services for Greater Bay Area customers[8](index=8&type=chunk) [Chief Executive's Report](index=5&type=section&id=Chief%20Executive's%20Report) The Chief Executive's Report details H1 2025 performance, noting a 28% decline in pre-tax profit due to increased provisions, despite strong wealth management and diversified income growth - Market uncertainties persisted in H1 2025, with trade tariffs, high interest rates, and commercial real estate pressures impacting the economy[10](index=10&type=chunk) Key Financial Performance in H1 2025 | Metric | H1 2025 (HKD million) | H1 2024 (HKD million) | Change (%) | | :--- | :--- | :--- | :--- | | Expected Credit Loss Provisions | 4,900 | - | - | | Profit Before Tax | 8,100 | 11,307 | -28 | | Impaired Loan Ratio | 6.69% | - | - | | Common Equity Tier 1 Capital Ratio | 21.3% | - | - | | Net Operating Income Before Expected Credit Losses Growth | - | - | +3 | | Net Interest Income Decrease | - | - | -7 | | Fee and Other Income Growth | - | - | +34 | | Wealth Income Growth | - | - | +43 | | Insurance Products and Asset Management Income Growth | - | - | +18 | | New Life Insurance Premiums Growth (Q1) | - | - | +57 | | Dividend Per Share | 2.60 (HKD) | 2.40 (HKD) | +8 | | Share Buyback Program | 3,000 (HKD million) | - | - | - The bank optimized its organizational structure to enhance operational efficiency and made significant progress in income diversification and expanding its target customer base[14](index=14&type=chunk)[15](index=15&type=chunk) - Retail Banking and Wealth Management are key growth drivers, with affluent customer growth of **10% annually over three years** and cross-border mainland Premier Banking customer numbers growing **20% year-on-year**[15](index=15&type=chunk)[16](index=16&type=chunk) - In Commercial Banking, loans to the IT sector grew **37%**, trade finance loan balances grew **16%**, and an **HKD 80 billion** Sustainable Power Up Financing Fund was launched[16](index=16&type=chunk) - Hang Seng Investment launched Hong Kong's first monthly dividend stock index ETF, while Hang Seng Indexes Company introduced new Greater Bay Area and ASEAN indexes and strengthened financial ties with the Middle East[20](index=20&type=chunk) - The bank remains optimistic about Hong Kong's long-term growth prospects, with initial signs of recovery in capital markets and residential real estate[24](index=24&type=chunk) [Financial Review](index=7&type=section&id=Financial%20Review) The Financial Review details H1 2025 performance, showing significant growth in wealth management and securities brokerage offsetting a decline in net interest income, but increased credit impairment charges pressured overall profit - In H1 2025, the Group made significant progress in diversifying income sources, with higher growth in wealth management and securities brokerage-related services income[27](index=27&type=chunk) Financial Performance Summary H1 2025 | Metric | June 30, 2025 (HKD million) | June 30, 2024 (HKD million) | Change (%) | | :--- | :--- | :--- | :--- | | Net Interest Income | 14,339 | 15,483 | -7 | | Net Interest Margin | 1.67% | 1.83% | -16 bps | | Net Interest Yield | 1.99% | 2.29% | -30 bps | | Net Fee and Commission Income | 3,147 | 2,564 | +23 | | Net Income from Financial Instruments at Fair Value Through Profit or Loss | 10,716 | 2,822 | +280 | | Wealth Management Income | 4,115 | 3,354 | +23 | | Changes in Expected Credit Losses and Other Credit Impairment Charges | 4,861 | 1,500 | +224 | | Operating Expenses | 7,565 | 7,523 | +1 | | Cost-Efficiency Ratio | 36.1% | 36.8% | -0.7 pp | | Total Impaired Loans to Total Customer Loans Ratio | 6.69% | 5.32% | +1.37 pp | - Changes in expected credit losses and other credit impairment charges increased by **HKD 3.361 billion** to **HKD 4.861 billion** in H1 2025, with **HKD 2.540 billion** from Hong Kong commercial real estate[34](index=34&type=chunk) - Total impaired loans increased from **HKD 51.0 billion** as of December 31, 2024, to **HKD 55.0 billion** as of June 30, 2025, primarily reflecting rating downgrades of certain impaired corporate loans[34](index=34&type=chunk) [Revenue Analysis](index=7&type=section&id=Revenue%20Analysis) Revenue analysis shows a 7% decrease in net interest income due to reduced loans and lower rates, but a 23% increase in net fee income driven by securities brokerage and a 280% surge in fair value financial instrument income - Net interest income decreased by **HKD 1.144 billion (7%)** to **HKD 14.339 billion**, primarily due to a **3% reduction** in average gross customer loans and lower market interest rates[28](index=28&type=chunk) - Net fee and commission income increased by **HKD 583 million (23%)** to **HKD 3.147 billion**, mainly driven by a **60% growth** in securities brokerage-related services income[29](index=29&type=chunk) - Net income from financial instruments at fair value through profit or loss increased by **HKD 7.894 billion (280%)** to **HKD 10.716 billion**, benefiting from funding swap gains, increased customer trading activity, and reduced interest expenses on structured products[29](index=29&type=chunk) - Wealth management income increased by **HKD 761 million (23%)** to **HKD 4.115 billion**, with investment services income showing **strong growth of 41%**[32](index=32&type=chunk) [Financial Performance Summary](index=8&type=section&id=Financial%20Performance%20Summary) This summary compares H1 2025 performance to H1 and H2 2024, noting a significant increase in credit impairment provisions and a decline in operating and shareholder profit, despite growth in net fee and trading income - Changes in expected credit losses and other credit impairment charges increased by **HKD 3.361 billion** to **HKD 4.861 billion** in H1 2025, with **HKD 2.540 billion** from Hong Kong commercial real estate[34](index=34&type=chunk) - The total impaired loans to total customer loans ratio increased from **6.12%** as of December 31, 2024, to **6.69%** as of June 30, 2025[34](index=34&type=chunk) - Operating expenses grew moderately by **HKD 42 million (1%)** to **HKD 7.565 billion**, with the cost-efficiency ratio slightly decreasing by **0.7 percentage points** to **36.1%**[34](index=34&type=chunk)[37](index=37&type=chunk) - Compared to H2 2024, net operating income before changes in expected credit losses decreased by **1%**, operating profit decreased by **16%**, and profit attributable to shareholders decreased by **19%**[38](index=38&type=chunk) - Net interest income decreased by **6%**, net fee and commission income increased by **14%**, and net trading income and others collectively increased by **252%**[38](index=38&type=chunk) - Total changes in expected credit losses increased by **HKD 1.588 billion** to **HKD 4.861 billion**, primarily due to increased provisions for Hong Kong commercial real estate risks[39](index=39&type=chunk) [Segmental Analysis](index=10&type=section&id=Segmental%20Analysis) Segmental analysis reveals Hong Kong operations' total income grew 0.4% driven by fees, retail banking and wealth management income rose 6%, while commercial banking income decreased 8% despite trade finance growth Profit Before Tax Contribution by Segment H1 2025 | Business Segment | June 30, 2025 (HKD million) | Share (%) | June 30, 2024 (HKD million) | Share (%) | | :--- | :--- | :--- | :--- | :--- | | Hong Kong Business | 6,435 | 79.5 | 9,738 | 86.1 | | Insurance Products and Asset Management Business | 1,479 | 18.2 | 1,335 | 11.8 | | Capital Markets and Securities Services Business | 604 | 7.5 | 529 | 4.7 | | Corporate Centre | (421) | (5.2) | (295) | (2.6) | | Total | 8,097 | 100.0 | 11,307 | 100.0 | - Total income from Hong Kong Business increased by **0.4% year-on-year** to **HKD 17.723 billion**, primarily driven by a **31% growth** in fee and other income[41](index=41&type=chunk) - Total income from Retail Banking and Wealth Management increased by **6% year-on-year** to **HKD 11.260 billion**, with wealth income surging **43% year-on-year** and non-HKD deposits rising **21% year-on-year**[42](index=42&type=chunk) - Total income from Commercial Banking decreased by **8% year-on-year** to **HKD 6.463 billion**, but trade finance loan balances grew **16%** since end-2024[47](index=47&type=chunk) - Total income from Insurance Products and Asset Management increased by **18% year-on-year** to **HKD 1.914 billion**, with Hang Seng Insurance's new life insurance premiums growing **57% year-on-year**, rising to second in market ranking[51](index=51&type=chunk) - Total income from Capital Markets and Securities Services increased by **10% year-on-year** to **HKD 901 million**, with profit before tax growing **14%** to **HKD 604 million**[53](index=53&type=chunk) [Balance Sheet Analysis](index=13&type=section&id=Balance%20Sheet%20Analysis) Balance sheet analysis shows total assets grew 1% to HKD 1,822 billion, customer loans decreased 2% to HKD 803 billion, while customer deposits increased 3% to HKD 1,300 billion, improving the loan-to-deposit ratio - Total assets increased by **HKD 26.0 billion (1%)** from end-2024 to **HKD 1,822.0 billion**[54](index=54&type=chunk) - Customer loans (net of expected credit loss allowances) decreased by **HKD 16.0 billion (2%)** to **HKD 803.0 billion**, primarily due to subdued corporate loan demand amidst economic uncertainty[54](index=54&type=chunk) - Loans to the information technology sector increased by **37%**, and trade finance loans increased by **16%**[54](index=54&type=chunk) - Customer deposits increased by **HKD 33.0 billion (3%)** from end-2024 to **HKD 1,300.0 billion**[55](index=55&type=chunk) Key Balance Sheet Ratios | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Loan-to-Deposit Ratio | 61.8% | 64.7% | | Demand, Current and Savings Deposits to Total Customer Deposits Ratio | 56.2% | 49.5% | - Shareholders' equity increased by **HKD 1.0 billion (1%)** to **HKD 171.0 billion**, primarily driven by increases in cash flow hedging reserves and financial assets at fair value through other comprehensive income reserves[56](index=56&type=chunk) [Risks](index=14&type=section&id=Risks) This section outlines the bank's comprehensive approach to identifying, assessing, and managing various financial and operational risks, including credit, treasury, market, and regulatory compliance [Principal Risks and Uncertainties](index=14&type=section&id=Principal%20Risks%20and%20Uncertainties) The Group continuously monitors and identifies key risks including credit, treasury, market, resilience, regulatory compliance, financial crime, model, and insurance business risks - The bank's principal risks include credit risk, treasury risk, market risk, resilience risk, regulatory compliance risk, financial crime risk, model risk, and insurance business risk[57](index=57&type=chunk) - The bank adopts a consistent risk management strategy aimed at safeguarding customer funds, lending responsibly, and supporting economic development[58](index=58&type=chunk) - The bank is committed to investing resources in the reliability and resilience of technology systems and critical services, and strengthening due diligence and monitoring measures for third-party financial soundness[59](index=59&type=chunk) [Risk Management](index=14&type=section&id=Risk%20Management) Risk management is a collective responsibility across the bank, with the Board holding ultimate accountability, overseen by an independent Risk and Compliance function balancing risk and reward - All employees bear risk management responsibility, with the Board holding ultimate accountability[60](index=60&type=chunk) - The Risk and Compliance function operates independently of business segments, with responsibilities including challenging, providing appropriate oversight, and assisting in balancing risk and reward for sound decision-making[60](index=60&type=chunk) - The bank employs a comprehensive risk management model based on culture and values to identify, assess, manage, and report risks incurred and generated during business operations[60](index=60&type=chunk) - Risk appetite is defined as the overall level of risk the Group is willing to undertake to achieve its strategic objectives, ensuring strategic growth within the desired risk boundaries[61](index=61&type=chunk) [Key Developments in H1 2025](index=15&type=section&id=Key%20Developments%20in%20H1%202025) In H1 2025, the bank continued to manage macroeconomic and geopolitical risks, focusing on trade tariffs, interest rate volatility, and commercial real estate, while enhancing third-party monitoring and integrating climate factors into risk management - The bank continued to manage macroeconomic and geopolitical-related risks, as well as commercial real estate sector and other principal risks[62](index=62&type=chunk) [Specific Mentions](index=15&type=section&id=Specific%20Mentions) This section highlights geopolitical and macroeconomic risks as primary concerns, including anticipated tariffs, interest rate volatility, ongoing conflicts, and challenges in Hong Kong and mainland China's commercial real estate markets - Anticipated tariffs are a major risk for H2 2025, potentially further hindering global growth, causing supply chain disruptions, and reducing global trade[64](index=64&type=chunk) - The bank faces interest rate risk, which may impact net interest income and the fair value of assets and liabilities, with increased volatility in the Hong Kong Interbank Offered Rate (HIBOR)[65](index=65&type=chunk) - The geopolitical environment remains complex, with Middle East and Russia-Ukraine issues, and US-China competition potentially exacerbating market volatility and supply chain disruptions[68](index=68&type=chunk) - Commercial real estate markets in Hong Kong and mainland China remain challenging, with oversupply of non-residential properties in Hong Kong exerting downward pressure on rents and capital values[68](index=68&type=chunk) - Management made adjustments to Expected Credit Loss (ECL) to reflect industry or portfolio risks not fully captured by models[68](index=68&type=chunk) [Mitigation Measures](index=16&type=section&id=Mitigation%20Measures) To mitigate risks, the bank continuously monitors geopolitical and economic developments, actively manages its credit portfolio through enhanced surveillance and stress testing, and maintains robust policies for sanctions and trade controls - The bank continues to monitor and seek to manage the potential impact of all developments on customers and business[69](index=69&type=chunk) - Actively manages the credit portfolio through enhanced monitoring, thematic reviews, and internal stress tests[69](index=69&type=chunk) - Continues to provide support to customers and appropriately manage risk and appetite levels[69](index=69&type=chunk) - Manages sanctions and trade controls through reasonably established policies, procedures, and monitoring measures, with ongoing enhancements[69](index=69&type=chunk) [(a) Credit Risk](index=17&type=section&id=(a)%20Credit%20Risk) Credit risk refers to financial losses from customer or counterparty failure to meet contractual obligations, with no significant policy changes in H1 2025, and detailed analysis of exposure, ECL coverage, and sensitivity, particularly for commercial real estate - Credit risk refers to the risk of financial loss arising from a customer or counterparty failing to meet contractual obligations, primarily from direct lending, trade finance, and leasing activities[70](index=70&type=chunk) - The bank's credit risk management policies and practices remained unchanged in H1 2025[71](index=71&type=chunk) Maximum Credit Risk Exposure Without Collateral or Other Credit Enhancements (HKD million) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and Balances with Central Banks | 9,720 | 10,433 | | Assets Held for Trading | 38,511 | 39,613 | | Derivative Financial Instruments | 14,578 | 20,201 | | Financial Assets Mandatorily at Fair Value Through Profit or Loss | 123,200 | 114,368 | | Reverse Repurchase Agreements - Non-trading | 56,283 | 33,479 | | Placements with and Loans to Banks | 85,228 | 76,221 | | Loans and Advances to Customers | 803,356 | 819,136 | | Financial Investments | 521,070 | 536,745 | | Other Assets | 35,179 | 28,815 | | Financial Guarantees and Other Credit-Related Contingent Liabilities | 20,114 | 22,848 | | Loan Commitments and Other Credit-Related Commitments | 494,523 | 495,092 | | **Total** | **2,201,762** | **2,196,951** | [Maximum Credit Risk Exposure Without Collateral or Other Credit Enhancements](index=17&type=section&id=Maximum%20Credit%20Risk%20Exposure%20Without%20Collateral%20or%20Other%20Credit%20Enhancements) The Group's maximum credit risk exposure, across various asset classes including derivatives, trading assets, customer loans, and financial investments, remained stable at HKD 2,201,762 million as of June 30, 2025 - The Group's credit risk is spread across various asset classes, including derivative instruments, assets held for trading, loans and advances to customers, and financial investments[73](index=73&type=chunk) Maximum Credit Risk Exposure Without Collateral or Other Credit Enhancements (HKD million) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Loans and Advances to Customers | 803,356 | 819,136 | | Financial Investments | 521,070 | 536,745 | | Loan Commitments and Other Credit-Related Commitments | 494,523 | 495,092 | | **Total** | **2,201,762** | **2,196,951** | [Credit Risk by Stage](index=18&type=section&id=Credit%20Risk%20by%20Stage) The Group outlines credit risk and ECL coverage by stage and industry, with total customer loans at HKD 819,709 million and ECL allowances of HKD 16,353 million, resulting in a 1.99% coverage ratio and an impaired loan ratio of 6.69% - Credit risk is distributed across Stage 1 (12-month expected credit losses), Stage 2 (lifetime expected credit losses, significant increase in credit risk), and Stage 3 (lifetime expected credit losses, objective evidence of impairment)[75](index=75&type=chunk)[76](index=76&type=chunk)[77](index=77&type=chunk) Credit Risk Distribution of Customer Loans as of June 30, 2025 (HKD million) | Item | Gross Carrying/Nominal Amount | Expected Credit Loss Allowance | Expected Credit Loss Coverage Ratio (%) | | :--- | :--- | :--- | :--- | | **Loans and Advances to Customers at Amortised Cost** | **819,709** | **(16,353)** | **1.99** | | - Personal | 384,502 | (1,482) | 0.39 | | - Corporate and Commercial | 408,404 | (14,824) | 3.63 | | - Non-bank Financial Institutions | 26,803 | (47) | 0.18 | | **Total** | **1,448,989** | **(16,567)** | **1.14** | - Total impaired loans increased from **HKD 51.0 billion** as of December 31, 2024, to **HKD 55.0 billion** as of June 30, 2025, with a total impaired loans to total customer loans ratio of **6.69%**[34](index=34&type=chunk) [Measurement Uncertainty and Sensitivity Analysis of Expected Credit Loss Estimates](index=19&type=section&id=Measurement%20Uncertainty%20and%20Sensitivity%20Analysis%20of%20Expected%20Credit%20Loss%20Estimates) ECL measurement involves significant judgment and estimates, using four probability-weighted economic scenarios, with the central scenario forecasting slower GDP growth and continued weak property prices, and sensitivity analysis highlighting retail and wholesale loan portfolio vulnerability to macroeconomic variables - The recognition and measurement of ECL involve significant judgment and estimates, forming multiple economic scenarios and distribution estimates based on economic forecasts[83](index=83&type=chunk) - The bank uses four scenarios: upside (10%), central (65%), downside (20%), and severe downside (5%), to explore the latest economic forecasts[85](index=85&type=chunk)[86](index=86&type=chunk) - The central scenario anticipates slower GDP growth rates in major markets for 2025 and 2026, with Hong Kong's unemployment rate projected to remain stable at **3.5%** and property prices continuing to be weak[91](index=91&type=chunk)[92](index=92&type=chunk) Key Macroeconomic Variables in Central Scenario (Annual Growth Rate/Ratio) | Metric | Hong Kong (2025) | Mainland China (2025) | | :--- | :--- | :--- | | GDP Growth Rate | 1.8% | 4.3% | | Unemployment Rate | 3.2% | 5.2% | | Housing Price Growth | (5.3)% | (5.9)% | | Probability | 65% | 65% | - Management judgment adjustments and other adjustments are used to address risks or uncertainties not fully captured by models, with ECL model provisions for the wholesale loan portfolio increasing by **HKD 128 million** and for the retail loan portfolio by **HKD 26 million** as of June 30, 2025[112](index=112&type=chunk)[118](index=118&type=chunk)[121](index=121&type=chunk) Wholesale and Retail Loan ECL Sensitivity (HKD million) | Scenario | Hong Kong (Wholesale) | Mainland China (Wholesale) | Hong Kong (Retail) | Mainland China (Retail) | | :--- | :--- | :--- | :--- | :--- | | Reported Expected Credit Losses | 2,710 | 716 | 1,315 | 74 | | Central Scenario | 2,583 | 636 | 1,268 | 53 | | Upside Scenario | 2,101 | 479 | 1,243 | 51 | | Downside Scenario | 3,054 | 989 | 1,365 | 87 | | Severe Downside Scenario | 4,549 | 1,492 | 2,065 | 180 | [Credit Risk of Financial Instruments](index=33&type=section&id=Credit%20Risk%20of%20Financial%20Instruments) Financial instruments are categorized into five credit quality classes based on internal ratings and 12-month probability of default, with detailed distribution by credit quality and stage, highlighting ongoing challenges in mainland China and deteriorating conditions in Hong Kong commercial real estate - Financial instruments are classified into High, Good, Medium, Substandard, and Credit-Impaired credit quality categories, based on internal credit ratings and 12-month weighted probability of default[143](index=143&type=chunk)[144](index=144&type=chunk)[146](index=146&type=chunk) Distribution of Financial Instruments Subject to HKFRS 9 Impairment Requirements as of June 30, 2025 (HKD million) | Credit Quality Category | Gross Carrying/Nominal Amount | Expected Credit Loss Allowance | Net Amount | | :--- | :--- | :--- | :--- | | High Grade | 969,027 | (817) | 968,210 | | Good Grade | 193,581 | (3,829) | 189,752 | | Medium Grade | 207,496 | (11,842) | 195,654 | | Substandard Grade | 24,033 | (79) | 23,954 | | Credit-Impaired | 54,852 | (16,567) | 38,285 | | **Total** | **1,448,989** | **(16,567)** | **1,432,422** | Total Mainland China Commercial Real Estate Exposure (HKD million) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Loans and Advances to Customers | 15,856 | 17,977 | | Expected Credit Losses | 4,041 | 3,905 | | Expected Credit Loss Coverage Ratio (%) | 25.5 | 21.7 | - Mainland China's commercial real estate portfolio continues to face challenges, with weak market fundamentals and persistent refinancing risks[156](index=156&type=chunk) Hong Kong Commercial Real Estate Customer Loans (HKD million) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Customer Loans | 123,820 | 130,518 | | Expected Credit Losses | 4,194 | 1,654 | | Substandard and Credit-Impaired Exposure | 39,500 | 36,600 | - The Hong Kong commercial real estate portfolio further deteriorated in H1 2025, primarily due to the continued worsening of secured loans, leading to increased expected credit loss levels[160](index=160&type=chunk)[161](index=161&type=chunk) [(b) Treasury Risk](index=40&type=section&id=(b)%20Treasury%20Risk) Treasury risk encompasses capital, liquidity, and funding risks, with the bank maintaining a robust capital base (CET1 ratio of 21.3%), strong liquidity ratios exceeding regulatory requirements, and sensitivity analysis indicating significant impact of interest rate changes on net interest income - Treasury risk refers to the risk of insufficient capital, liquidity, or funding to meet financial obligations and regulatory requirements, as well as the risk of adverse impact on earnings or capital due to changes in market interest rates[163](index=163&type=chunk) - The bank plans to commence a share buyback of up to **HKD 3.0 billion**, expected to be completed within six months[164](index=164&type=chunk) [Capital Risk](index=40&type=section&id=Capital%20Risk) The bank's capital risk management approach remains consistent, with Common Equity Tier 1, Tier 1, and Total Capital Ratios significantly improving to 21.3%, 23.3%, and 24.9% respectively, calculated under Basel III reforms, and a 70% dividend payout ratio target for 2025 - The bank uses the Advanced Internal Ratings-Based Approach and Foundation Internal Ratings-Based Approach to calculate credit risk for most non-securitisation exposures[165](index=165&type=chunk) Capital Ratios (as a percentage of risk-weighted assets) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Common Equity Tier 1 Capital Ratio | 21.3% | 17.7% | | Tier 1 Capital Ratio | 23.3% | 19.4% | | Total Capital Ratio | 24.9% | 20.8% | - Regulatory capital ratios as of June 30, 2025, are calculated in accordance with the Basel III final reform package implemented in Hong Kong on January 1, 2025[171](index=171&type=chunk) - The bank's medium-to-long-term dividend target is to maintain stable dividends, with a target dividend payout ratio of **70%** set for 2025[173](index=173&type=chunk)[174](index=174&type=chunk) [Liquidity and Funding Risk](index=43&type=section&id=Liquidity%20and%20Funding%20Risk) The bank's liquidity and funding risk management remained unchanged in H1 2025, with the Liquidity Coverage Ratio at 311.0% and Net Stable Funding Ratio at 182.6%, both significantly exceeding regulatory requirements and demonstrating a robust funding position - The bank's approach to liquidity and funding risk management remained unchanged in H1 2025[176](index=176&type=chunk) Liquidity Ratios | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Liquidity Coverage Ratio | 311.0% | 301.0% | | Net Stable Funding Ratio | 182.6% | 181.0% | - The average Liquidity Coverage Ratio increased to **335.0%** for the quarter ended June 30, 2025, primarily reflecting an increase in surplus funds[179](index=179&type=chunk) - The Group's holdings of high-quality liquid assets are primarily composed of Level 1 liquid assets, with the majority being government debt securities[179](index=179&type=chunk) [Interest Rate Risk in the Banking Book](index=45&type=section&id=Interest%20Rate%20Risk%20in%20the%20Banking%20Book) Interest rate risk in the banking book refers to the adverse impact of market interest rate changes on earnings or capital, with sensitivity analysis showing a 100 basis point upward shift would increase net interest income by HKD 1.461 billion, while a downward shift would decrease it by HKD 2.597 billion over 12 months - Interest rate risk in the banking book refers to the risk of adverse impact on earnings or capital due to changes in market interest rates, arising from non-trading assets and liabilities[182](index=182&type=chunk) Net Interest Income Sensitivity (12 months, HKD million) | Currency | Parallel Upward Shift of 100 bps | Parallel Downward Shift of 100 bps | | :--- | :--- | :--- | | HKD | 664 | (1,331) | | USD | 70 | (305) | | Others | 727 | (961) | | **Total** | **1,461** | **(2,597)** | [(c) Market Risk](index=46&type=section&id=(c)%20Market%20Risk) Market risk refers to adverse financial impacts on trading activities from changes in market parameters like interest rates and exchange rates, which the bank prudently managed in H1 2025 with no significant policy changes, and a lower trading book VaR driven by interest rate activities - Market risk refers to the risk of adverse financial impact on trading activities due to changes in market parameters such as interest rates, exchange rates, asset prices, volatility, correlation, and credit spreads[184](index=184&type=chunk) - The bank's market risk management policies and practices remained unchanged in H1 2025, continuing to prudently manage market risk[186](index=186&type=chunk) - Trading book Value at Risk (VaR) as of June 30, 2025, was lower than that of June 30, 2024, primarily driven by interest rate trading activities[187](index=187&type=chunk) Trading Book Value at Risk (HKD million) | Metric | June 30, 2025 | H1 2025 Average Value | June 30, 2024 | H1 2024 Average Value | | :--- | :--- | :--- | :--- | :--- | | Total | 25 | 26 | 51 | 43 | | Foreign Exchange Trading | 13 | 12 | 32 | 20 | | Interest Rate Trading | 26 | 28 | 72 | 54 | | Credit Spread Trading | 2 | 1 | 1 | 1 | [(d) Insurance Business Risk](index=47&type=section&id=(d)%20Insurance%20Business%20Risk) Insurance business risk management policies remained unchanged in H1 2025, with the insurance product subsidiary's total assets growing to HKD 234,522 million and total liabilities to HKD 223,095 million as of June 30, 2025 - Insurance business risk management policies and practices remained unchanged in H1 2025[190](index=190&type=chunk) Summary Balance Sheet of Insurance Product Subsidiary (HKD million) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Assets | 234,522 | 207,490 | | Total Liabilities | 223,095 | 196,346 | | Shareholders' Equity | 11,427 | 11,144 | [Interim Condensed Consolidated Financial Statements](index=49&type=section&id=Interim%20Condensed%20Consolidated%20Financial%20Statements) This section presents the bank's interim condensed consolidated financial statements, including the income statement, statement of comprehensive income, balance sheet, statement of changes in equity, and cash flow statement [Interim Condensed Consolidated Income Statement](index=49&type=section&id=Interim%20Condensed%20Consolidated%20Income%20Statement) The Interim Condensed Consolidated Income Statement shows a 7% year-on-year decrease in net interest income, offset by a 23% increase in net fee income and a 280% surge in fair value financial instrument income, but a 224% rise in credit impairment charges led to a 30% decline in profit attributable to shareholders Summary Interim Condensed Consolidated Income Statement (HKD million) | Metric | June 30, 2025 | June 30, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Net Interest Income | 14,339 | 15,483 | -7 | | Net Fee and Commission Income | 3,147 | 2,564 | +23 | | Net Income/(Loss) from Financial Instruments at Fair Value Through Profit or Loss | 10,716 | 2,822 | +280 | | Net Operating Income Before Changes in Expected Credit Losses and Other Credit Impairment Charges | 20,975 | 20,431 | +3 | | Changes in Expected Credit Losses and Other Credit Impairment Charges | (4,861) | (1,500) | +224 | | Operating Profit | 8,549 | 11,396 | -25 | | Profit Before Tax | 8,097 | 11,307 | -28 | | Profit Attributable to the Bank's Shareholders | 6,880 | 9,893 | -30 | | Earnings Per Share (HKD) | 3.34 | 5.04 | -34 | | Cost-Efficiency Ratio | 36.1% | 36.8% | -0.7 pp | [Interim Condensed Consolidated Statement of Comprehensive Income](index=50&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) The Interim Condensed Consolidated Statement of Comprehensive Income reports a profit for the period of HKD 6,876 million, with other comprehensive income primarily driven by fair value gains on cash flow hedges and debt instruments at fair value through other comprehensive income, totaling HKD 3,344 million Summary Interim Condensed Consolidated Statement of Comprehensive Income (HKD million) | Metric | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Profit for the Period | 6,876 | 9,888 | | Other Comprehensive Income (after tax) | 3,344 | 3 | | Total Comprehensive Income for the Period | 10,220 | 9,891 | | Total Comprehensive Income Attributable to the Bank's Shareholders | 10,224 | 9,896 | - Other comprehensive income was primarily driven by fair value gains on debt instruments at fair value through other comprehensive income reserves (**HKD 1.188 billion**) and fair value gains on cash flow hedging reserves (**HKD 9.035 billion**)[204](index=204&type=chunk) [Interim Condensed Consolidated Balance Sheet](index=51&type=section&id=Interim%20Condensed%20Consolidated%20Balance%20Sheet) The Interim Condensed Consolidated Balance Sheet shows total assets increased by 1.5% to HKD 1,821,680 million, with customer loans decreasing 2% to HKD 803,356 million and customer deposits growing 2.6% to HKD 1,299,986 million as of June 30, 2025 Summary Interim Condensed Consolidated Balance Sheet (HKD million) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Total Assets | 1,821,680 | 1,795,196 | | Loans and Advances to Customers | 803,356 | 819,136 | | Financial Investments | 526,380 | 541,155 | | Financial Assets Mandatorily at Fair Value Through Profit or Loss | 189,498 | 164,557 | | **Liabilities and Shareholders' Equity** | | | | Total Liabilities | 1,650,971 | 1,625,632 | | Current, Savings and Other Deposits | 1,273,909 | 1,238,224 | | Insurance Contract Liabilities | 214,954 | 188,481 | | Total Shareholders' Equity | 170,670 | 169,522 | | Total Equity and Liabilities | 1,821,680 | 1,795,196 | [Interim Condensed Consolidated Statement of Changes in Equity](index=52&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) The Interim Condensed Consolidated Statement of Changes in Equity shows total shareholders' equity increased from HKD 169,522 million to HKD 170,670 million, driven by profit for the period and other comprehensive income, despite dividends paid Summary Interim Condensed Consolidated Statement of Changes in Equity (HKD million) | Item | January 1, 2025 | Profit for the Period | Other Comprehensive Income (after tax) | Dividends Paid | As of June 30, 2025 | | :--- | :--- | :--- | :--- | :--- | :--- | | Total Shareholders' Equity | 169,522 | 6,880 | 3,344 | (8,470) | 170,670 | - Retained earnings decreased by **HKD 2.0 billion (2%)**, reflecting dividends exceeding accumulated profit for the period[56](index=56&type=chunk) - Dividends paid include the fourth interim dividend for 2024 of **HKD 6.023 billion** and the first interim dividend for 2025 of **HKD 2.447 billion**[208](index=208&type=chunk) [Interim Condensed Consolidated Cash Flow Statement](index=54&type=section&id=Interim%20Condensed%20Consolidated%20Cash%20Flow%20Statement) The Interim Condensed Consolidated Cash Flow Statement shows a net cash outflow from operating activities of HKD 17,020 million in H1 2025, a shift from inflow in the prior year, with net cash outflows from investing and financing activities, resulting in a net decrease in cash and cash equivalents of HKD 42,204 million Summary Interim Condensed Consolidated Cash Flow Statement (HKD million) | Item | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Net Cash from Operating Activities | (17,020) | 25,390 | | Net Cash from Investing Activities | (8,864) | (15,947) | | Net Cash from Financing Activities | (16,320) | (11,805) | | Net Increase/(Decrease) in Cash and Cash Equivalents | (42,204) | (2,362) | | Cash and Cash Equivalents as of June 30 | 112,984 | 93,352 | - Net cash from operating activities shifted from an inflow of **HKD 25.390 billion** in H1 2024 to an outflow of **HKD 17.020 billion** in H1 2025[211](index=211&type=chunk) - Changes in customer loans resulted in an inflow of **HKD 12.400 billion**, and changes in customer deposits resulted in an inflow of **HKD 35.685 billion**[211](index=211&type=chunk) - As of June 30, 2025, the Group's restricted cash and cash equivalents amounted to **HKD 16.341 billion**[212](index=212&type=chunk) [Notes to the Interim Condensed Consolidated Financial Statements](index=56&type=section&id=Notes%20to%20the%20Interim%20Condensed%20Consolidated%20Financial%20Statements) The Notes to the Interim Condensed Consolidated Financial Statements provide detailed accounting policies, financial data breakdowns, and key disclosures, covering preparation basis, new accounting standards, income/expense specifics, ECL changes, taxation, EPS, dividends, segmental analysis, and balance sheet item details - The Interim Condensed Consolidated Financial Statements have been reviewed by the bank's Audit Committee and by PricewaterhouseCoopers[213](index=213&type=chunk)[214](index=214&type=chunk) - The accounting policies and key sources of estimation uncertainty adopted in these Interim Condensed Consolidated Financial Statements are consistent with those used in the consolidated financial statements for the year ended December 31, 2024[213](index=213&type=chunk) - No new financial reporting standards or amendments to standards had a significant impact on the Group's Interim Condensed Consolidated Financial Statements[217](index=217&type=chunk) [Basis of Preparation and Accounting Policies](index=56&type=section&id=Basis%20of%20Preparation%20and%20Accounting%20Policies) These interim condensed consolidated financial statements are prepared in accordance with HKAS 34 and the HKEX Listing Rules, with consistent accounting policies and key estimates as the 2024 annual report, while the Group assesses the impact of future accounting developments - These Interim Condensed Consolidated Financial Statements are prepared in accordance with the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and Hong Kong Accounting Standard 34 'Interim Financial Reporting' issued by the Hong Kong Institute of Certified Public Accountants[213](index=213&type=chunk) - The accounting policies and key sources of estimation uncertainty adopted in these Interim Condensed Consolidated Financial Statements are consistent with those used in the consolidated financial statements for the year ended December 31, 2024[213](index=213&type=chunk) - Amendments to HKFRS 9 and HKFRS 7 (effective 2026) and HKFRS 18 'Presentation and Disclosure in Financial Statements' (effective 2027) will impact the presentation of financial statement information, and the Group is currently assessing their potential effects[218](index=218&type=chunk)[219](index=219&type=chunk) [Net Interest Income](index=58&type=section&id=Net%20Interest%20Income) Net interest income for H1 2025 was HKD 14,339 million, a decrease from HKD 15,483 million in H1 2024, with interest income primarily from financial assets measured at amortized cost and fair value through other comprehensive income, and interest expense from financial liabilities measured at amortized cost Net Interest Income Details (HKD million) | Item | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Interest Income | 26,681 | 30,826 | | Interest Expense | (12,342) | (15,343) | | **Net Interest Income** | **14,339** | **15,483** | | Of which: Interest income from impaired financial assets | 1,090 | 554 | | Of which: Interest expense on subordinated liabilities | (718) | (892) | [Net Fee and Commission Income](index=58&type=section&id=Net%20Fee%20and%20Commission%20Income) Net fee and commission income for H1 2025 increased by 23% to HKD 3,147 million from HKD 2,564 million in H1 2024, primarily driven by a 60% growth in securities brokerage and related services and a 24% increase in retail investment funds Net Fee and Commission Income Details (HKD million) | Item | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Securities brokerage and related services | 1,084 | 676 | | Retail investment funds | 781 | 630 | | Credit cards | 1,446 | 1,522 | | Total fee income | 4,559 | 4,016 | | Total fee expense | (1,412) | (1,452) | | **Net Fee and Commission Income** | **3,147** | **2,564** | [Net Income/(Loss) from Financial Instruments at Fair Value Through Profit or Loss](index=59&type=section&id=Net%20Income%2F(Loss)%20from%20Financial%20Instruments%20at%20Fair%20Value%20Through%20Profit%20or%20Loss) Net income from financial instruments at fair value through profit or loss for H1 2025 surged by 280% to HKD 10,716 million from HKD 2,822 million in H1 2024, primarily due to significant growth in net trading income and net income from insurance business assets and liabilities Net Income/(Loss) from Financial Instruments at Fair Value Through Profit or Loss Details (HKD million) | Item | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Net trading income | 2,296 | 1,554 | | Net income/(expense) from financial instruments designated at fair value through profit or loss | (634) | (999) | | Net income/(expense) from insurance business assets and liabilities (including related derivatives) at fair value through profit or loss | 9,058 | 2,249 | | **Total** | **10,716** | **2,822** | [Changes in Expected Credit Losses and Other Credit Impairment Charges](index=60&type=section&id=Changes%20in%20Expected%20Credit%20Losses%20and%20Other%20Credit%20Impairment%20Charges) Total changes in expected credit losses and other credit impairment charges for H1 2025 significantly increased to HKD 4,861 million from HKD 1,500 million in H1 2024, primarily due to higher provisions for interbank and customer loans, reflecting increased credit risk Changes in Expected Credit Losses and Other Credit Impairment Charges Details (HKD million) | Item | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Loans and advances to banks and customers | 4,738 | 1,533 | | Loan commitments and guarantees | 106 | (28) | | Other financial assets | 17 | (5) | | **Total** | **4,861** | **1,500** | [Operating Expenses](index=60&type=section&id=Operating%20Expenses) Operating expenses for H1 2025 moderately increased to HKD 7,565 million from HKD 7,523 million in H1 2024, with a slight rise in staff costs and benefits, a minor decrease in business and administrative expenses, and an improved cost-efficiency ratio of 36.1% Operating Expenses Details (HKD million) | Item | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Staff costs and benefits | 3,088 | 3,024 | | Business and administrative expenses | 2,904 | 2,975 | | Depreciation | 933 | 962 | | Amortisation of intangible assets | 640 | 562 | | **Total operating expenses** | **7,565** | **7,523** | | Cost-efficiency ratio | 36.1% | 36.8% | [Taxation](index=61&type=section&id=Taxation) Total taxation for H1 2025 decreased to HKD 1,221 million from HKD 1,419 million in H1 2024, despite increased Hong Kong profits tax provision, due to deferred tax movements, with the implementation of global anti-base erosion rules and Hong Kong minimum top-up tax effective from January 1, 2025, expected to generate top-up tax liabilities Components of Taxation (HKD million) | Item | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Current tax - Hong Kong profits tax provision | 2,360 | 1,722 | | Current tax - Tax outside Hong Kong | 9 | (60) | | Deferred tax | (1,148) | (243) | | **Total taxation** | **1,221** | **1,419** | - The Hong Kong Legislative Council has passed the implementation of the Global Anti-Base Erosion Rules and Hong Kong Minimum Top-up Tax, effective for fiscal years beginning on or after January 1, 2025, which are expected to generate top-up tax liabilities[229](index=229&type=chunk) [Earnings Per Share](index=61&type=section&id=Earnings%20Per%20Share) Basic and diluted earnings per share for H1 2025 decreased to HKD 3.34 from HKD 5.04 in H1 2024, calculated based on profit attributable to ordinary equity holders after deducting coupon payments on Additional Tier 1 capital notes and the weighted average number of ordinary shares outstanding Earnings Per Share (HKD) | Metric | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Earnings Per Share - Basic and Diluted | 3.34 | 5.04 | - Earnings per share is calculated based on profit of **HKD 6.285 billion** (H1 2024: **HKD 9.611 billion**) after deducting coupon payments on Additional Tier 1 capital notes, and the weighted average number of ordinary shares outstanding of **1,882,267,536** shares[230](index=230&type=chunk) [Dividends/Distributions](index=61&type=section&id=Dividends%2FDistributions) The Board declared a second interim dividend of HKD 1.30 per ordinary share for 2025, bringing the total H1 2025 dividend per share to HKD 2.60, an 8% increase year-on-year, with coupon payments on Additional Tier 1 capital notes totaling HKD 595 million Distributions to Ordinary Shareholders (HKD/HKD million) | Item | June 30, 2025 (Per Share) | June 30, 2025 (Total) | June 30, 2024 (Per Share) | June 30, 2024 (Total) | | :--- | :--- | :--- | :--- | :--- | | First Interim | 1.30 | 2,447 | 1.20 | 2,282 | | Second Interim | 1.30 | 2,447 | 1.20 | 2,275 | | **Total** | **2.60** | **4,894** | **2.40** | **4,557** | Distributions to Additional Tier 1 Capital Note Holders (HKD million) | Item | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | US$900 million callable fixed rate resettable perpetual capital securities | 241 | - | | US$600 million callable fixed rate resettable perpetual capital securities | 354 | - | | US$600 million callable fixed rate resettable perpetual capital securities | - | 282 | | **Total** | **595** | **282** | [Segmental Analysis](index=62&type=section&id=Segmental%20Analysis) As of January 1, 2025, the bank's operating segments include Hong Kong Business, Insurance Products and Asset Management, Capital Markets and Securities Services, and Corporate Centre, with Hong Kong Business dominating in total income and profit before tax, while Mainland China recorded a pre-tax loss - Effective January 1, 2025, the bank's operating and reportable segments include Hong Kong Business, Insurance Products and Asset Management Business, Capital Markets and Securities Services Business, and Corporate Centre[234](index=234&type=chunk)[235](index=235&type=chunk) Segmental Performance Summary H1 2025 (HKD million) | Business Segment | Net Operating Income Before Changes in Expected Credit Losses and Other Credit Impairment Charges | Profit/(Loss) Before Tax | | :--- | :--- | :--- | | Hong Kong Business | 17,723 | 6,435 | | Insurance Products and Asset Management Business | 1,914 | 1,479 | | Capital Markets and Securities Services Business | 901 | 604 | | Corporate Centre | 437 | (421) | | **Total** | **20,975** | **8,097** | Geographical Segmental Performance Summary H1 2025 (HKD million) | Geographical Region | Net Operating Income/(Loss) Before Changes in Expected Credit Losses and Other Credit Impairment Charges | Profit Before Tax | | :--- | :--- | :--- | | Hong Kong | 19,969 | 8,223 | | Mainland China | 931 | (118) | | Others | 80 | (8) | | **Total** | **20,975** | **8,097** | [Details of Balance Sheet Items](index=67&type=section&id=Details%20of%20Balance%20Sheet%20Items) This section provides detailed composition and changes for various balance sheet items, including cash, trading assets, derivatives, customer loans, financial investments, property, intangible assets, customer deposits, subordinated liabilities, and share capital Cash and Balances with Central Banks (HKD million) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash in hand | 5,383 | 6,241 | | Balances with central banks | 4,337 | 4,192 | | **Total** | **9,720** | **10,433** | Loans and Advances to Customers (HKD million) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Gross loans and advances to customers | 819,709 | 832,109 | | Less: Expected credit loss allowance | (16,353) | (12,973) | | **Net** | **803,356** | **819,136** | | Expected credit loss allowance to gross loans and advances to customers ratio | 1.99% | 1.56% | | Total impaired loans to gross loans and advances to customers ratio | 6.69% | 6.12% | Current, Savings and Other Deposits (HKD million) | Category | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Demand and current accounts | 88,141 | 74,446 | | Savings deposits | 642,030 | 552,299 | | Time and other deposits | 569,815 | 640,276 | | **Total** | **1,299,986** | **1,267,021** | - A floating rate subordinated loan of **HKD 6.24 billion** due in June 2026 was redeemed on June 13, 2025[261](index=261&type=chunk)[263](index=263&type=chunk) - In 2024, a total of **29,575,200** ordinary shares were repurchased and cancelled, and no listed securities of the bank were purchased, sold, or redeemed by the bank or any of its subsidiaries in H1 2025[268](index=268&type=chunk) [Cash and Balances with Central Banks](index=67&type=section&id=Cash%20and%20Balances%20with%20Central%20Banks) Cash and balances with central banks totaled HKD 9,720 million as of June 30, 2025, a slight decrease from HKD 10,433 million at December 31, 2024 Cash and Balances with Central Banks (HKD million) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash in hand | 5,383 | 6,241 | | Balances with central banks | 4,337 | 4,192 | | **Total** | **9,720** | **10,433** | [Assets Held for Trading](index=67&type=section&id=Assets%20Held%20for%20Trading) Assets held for trading totaled HKD 38,531 million as of June 30, 2025, a slight decrease from HKD 39,640 million at December 31, 2024, primarily comprising debt securities and reverse repurchase agreements Assets Held for Trading (HKD million) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Treasury bills | 17,484 | 19,897 | | Other debt securities | 14,528 | 19,716 | | Total debt securities | 32,012 | 39,613 | | Reverse repurchase agreements | 6,499 | - | | **Total** | **38,531** | **39,640** | [Derivative Financial Instruments](index=67&type=section&id=Derivative%20Financial%20Instruments) The Group's derivative transactions are primarily for client risk management, portfolio risk management, and own risk hedging, with total notional contract amounts of HKD 2,400,145 million, fair value assets of HKD 14,578 million, and fair value liabilities of HKD 16,936 million as of June 30, 2025 - The Group's derivative transactions have three main purposes: managing client risks, managing portfolio risks of client businesses, and managing and hedging the Group's own risks[243](index=243&type=chunk) Notional Contract Amounts and Fair Values of Derivative Financial Instruments (HKD million) | Category | Notional Contract Amount (June 30, 2025) | Fair Value - Assets (June 30, 2025) | Fair Value - Liabilities (June 30, 2025) | | :--- | :--- | :--- | :--- | | Foreign exchange | 1,526,381 | 5,503 | 10,813 | | Interest rate | 824,104 | 8,277 | 5,546 | | Equity and others | 49,660 | 798 | 577 | | **Total** | **2,400,145** | **14,578** | **16,936** | [Financial Assets Mandatorily at Fair Value Through Profit or Loss](index=68&type=section&id=Financial%20Assets%20Mandatorily%20at%20Fair%20Value%20Through%20Profit%20or%20Loss) Financial assets mandatorily at fair value through profit or loss totaled HKD 189,498 million as of June 30, 2025, an increase from HKD 164,557 million at December 31, 2024, primarily consisting of other debt securities, equities, and investment funds Financial Assets Mandatorily at Fair Value Through Profit or Loss (HKD million) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Treasury bills | 157 | 924 | | Other debt securities | 122,312 | 112,669 | | Equities | 19,513 | 12,802 | | Investment funds | 46,785 | 37,387 | | **Total** | **189,498** | **164,557** | [Placements with and Loans to Banks](index=68&type=section&id=Placements%20with%20and%20Loans%20to%20Banks) Placements with and loans to banks totaled HKD 85,228 million as of June 30, 2025, an increase from HKD 76,221 million at December 31, 2024, with the largest portion maturing between one month and one year Placements with and Loans to Banks (HKD million) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Balances with banks | 4,677 | 4,129 | | Placements with and loans to banks due within 1 month | 31,293 | 40,677 | | Placements with and loans to banks due after 1 month to 1 year | 47,299 | 29,476 | | Placements with and loans to banks due after 1 year | 1,962 | 1,941 | | Less: Expected credit loss allowance | (3) | (2) | | **Total** | **85,228** | **76,221** | | Of which: Placements with and loans to central banks | 6,681 | 8,147 | [Loans and Advances to Customers](index=69&type=section&id=Loans%20and%20Advances%20to%20Customers) Gross loans and advances to customers totaled HKD 819,709 million, with a net amount of HKD 803,356 million after deducting HKD 16,353 million for expected credit loss allowances as of June 30, 2025, showing a decrease from end-2024 and increased ECL and impaired loan ratios Loans and Advances to Customers (HKD million) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Gross loans and advances to customers | 819,709 | 832,109 | | Less: Expected credit loss allowance | (16,353) | (12,973) | | **Net** | **803,356** | **819,136** | | Expected credit loss allowance to gross loans and advances to customers ratio | 1.99% | 1.56% | | Total impaired loans to gross loans and advances to customers ratio | 6.69% | 6.12% | [Financial Investments](index=69&type=section&id=Financial%20Investments) Financial investments totaled HKD 526,380 million as of June 30, 2025, a slight decrease from HKD 541,155 million at December 31, 2024, primarily comprising financial investments at fair value through other comprehensive income and debt instruments at amortized cost Financial Investments (HKD million) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Financial investments at fair value through other comprehensive income | 443,494 | 411,116 | | Debt instruments at amortised cost | 82,886 | 130,039 | | **Total** | **526,380** | **541,155** | - The Group has no overdue financial investments and does not hold asset-backed securities, mortgage-backed securities, or collateralized debt obligations[248](index=248&type=chunk) [Interests in Associates](index=69&type=section&id=Interests%20in%20Associates) Interests in associates amounted to HKD 2,179 million as of June 30, 2025, a decrease from HKD 2,321 million at December 31, 2024 Interests in Associates (HKD million) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Share of net assets of associates | 2,179 | 2,321 | [Property, Plant and Equipment](index=70&type=section&id=Property%2C%20Plant%20and%20Equipment) Premises, equipment, and investment properties totaled HKD 34,481 million as of June 30, 2025, a slight decrease from end-2024, with a net revaluation loss on properties of HKD 346 million during the period Property, Plant and Equipment (HKD million) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Premises | 21,392 | 22,442 | | Equipment | 1,564 | 1,602 | | Other right-of-use assets | 793 | 899 | | **Total premises, equipment and right-of-use assets** | **23,749** | **24,943** | | Investment properties | 10,732 | 11,220 | | **Total** | **34,481** | **36,163** | - Net revaluation loss on properties increased by **HKD 207 million** to **HKD 346 million**[37](index=37&type=chunk) [Intangible Assets](index=72&type=section&id=Intangible%20Assets) Intangible assets totaled HKD 4,445 million as of June 30, 2025, a slight decrease from HKD 4,465 million at December 31, 2024, primarily comprising internally developed software, purchased software, and goodwill Intangible Assets (HKD million) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Internally developed software | 4,045 | 4,062 | | Purchased software | 71 | 74 | | Goodwill | 329 | 329 | | **Total** | **4,445** | **4,465** | [Other Assets](index=73&type=section&id=Other%20Assets) Other assets totaled HKD 57,001 million as of June 30, 2025, an increase from HKD 47,425 million at December 31, 2024, primarily including interbank settlement receivables, gold, prepayments, and reinsurance contract assets Other Assets (HKD million) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Interbank settlement receivables | 4,269 | 3,634 | | Gold | 3,709 | 2,194 | | Prepayments and accrued income | 7,027 | 7,099 | | Bills accepted and endorsed | 9,784 | 8,690 | | Reinsurance contract assets | 13,733 | 12,867 | | Cash collateral | 8,950 | 3,148 | | **Total** | **57,001** | **47,425** | [Current, Savings and Other Deposits](index=73&type=section&id=Current%2C%20Savings%20and%20Other%20Deposits) Current, savings, and other deposits totaled HKD 1,299,986 million as of June 30, 2025, an increase from HKD 1,267,021 million at December 31, 2024, with savings deposits being the largest component and time deposits decreasing Current, Savings and Other Deposits (HKD million) | Category | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Current, savings and other deposits (as shown in the consolidated balance sheet) | 1,273,909 | 1,238,224 | | Structured deposits classified as financial liabilities designated at fair value | 26,077 | 28,797 | | **Total** | **1,299,986** | **1,267,021** | | Of which: Savings deposits | 642,030 | 552,299 | | Of which: Demand and current accounts | 88,141 | 74,446 | | Of which: Time and other deposits | 569,815 | 640,276 | [Liabilities Held for Trading](index=73&type=section&id=Liabilities%20Held%20for%20Trading) Liabilities held for trading primarily consisted of short positions in securities, totaling HKD 16,425 million as of June 30, 2025, a decrease from HKD 18,093 million at December 31, 2024 Liabilities Held for Trading (HKD million) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Short positions in securities | 16,425 | 18,093 | [Financial Liabilities Designated at Fair Value Through Profit or Loss](index=74&type=section&id=Financial%20Liabilities%20Designated%20at%20Fair%20Value%20Through%20Profit%20or%20Loss) Financial liabilities designated at fair value through profit or loss totaled HKD 36,387 million as of June 30, 2025, a slight decrease from HKD 38,636 million at December 31, 2024, mainly comprising structured deposits, issued certificates of deposit, and other issued structured debt securities Financial Liabilities Designated at Fair Value Through Profit or Loss (HKD million) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Certificates of deposit issued | 5,818 | 7,549 | | Structured deposits | 26,077 | 28,797 | | Other structured debt securities issued | 4,255 | 2,045 | | Liabilities to customers under investment contracts | 237 | 245 | | **Total** | **36,387** | **38,636** | - As of June 30, 2025, the Group had no significant cumulative fair value gains/losses on financial liabilities designated at fair value through profit or loss arising from changes in its own credit risk[259](index=259&type=chunk) [Other Liabilities](index=74&type=section&id=Other%20Liabilities) Other liabilities totaled HKD 38,751 million as of June 30, 2025, a significant decrease from HKD 57,399 million at December 31, 2024, primarily due to reductions in settlement accounts and cash collateral, partially offset by increases in interbank settlement payables and bills accepted and endorsed Other Liabilities (HKD million) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Interbank settlement payables | 6,190 | 4,449 | | Accruals | 7,599 | 8,777 | | Bills accepted and endorsed | 9,784 | 8,690 | | Reinsurance contract liabilities | 1,131 | 1,002 | | Settlement accounts | 2,967 | 19,737 | | Cash collateral | 3,464 | 6,619 | | **Total** | **38,751** | **57,399** | [Subordinated Liabilities](index=75&type=section&id=Subordinated%20Liabilities) Subordinated liabilities totaled HKD 21,272 million as of June 30, 2025, a significant decrease from HKD 27,475 million at December 31, 2024, primarily due to the redemption of a HKD 6.24 billion floating rate subordinated loan due in June 2026 Subordinated Liabilities (HKD million) | Face Value | Description | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | :--- | | HKD 5.46 billion | Floating rate subordinated loan due May 2028, callable 2027 | 5,460 | 5,460 | | HKD 4.68 billion | Floating rate subordinated loan due June 2029, callable 2028 | 4,680 | 4,680 | | HKD 6.24 billion | Floating rate subordinated loan due June 2026, callable 2025 | - | 6,240 | | US$400 million | Floating rate subordinated loan due June 2030, callable 2029 | 3,140 | 3,105 | | HKD 5.0 billion | Floating rate subordinated loan due November 2027, callable 2026 | 4,996 | 4,994 | | HKD 3.0 billion | Floating rate subordinated loan due June 2028, callable 2027 | 2,996 | 2,996 | | **Total** | | **21,272** | **27,475** | - A floating rate subordinated loan of **HKD 6.24 billion** due in June 2026 was redeemed on June 13, 2025[263](index=263&type=chunk) [Share Capital](index=76&type=section&id=Share%20Capital) As of June 30, 2025, issued and fully paid ordinary share capital remained unchanged at 1,882,267,536 shares with a value of HKD 9,658 million, following the repurchase and cancellation of 29,575,200 ordinary shares in 2024 Share Capital (HKD million) | Item | Number of Shares (June 30, 2025) | HKD million (June 30, 2025) | Number of Shares (December 31, 2024) | HKD million (December 31, 2024) | | :--- | :--- | :--- | :--- | :--- | | As of January 1 | 1,882,267,536 | 9,658 | 1,911,842,736 | 9,658 | | Less: Shares repurchased and cancelled | - | - | (29,575,200) | - | | **As of June 30/December 31** | **1,882,267,536** | **9,658** | **1,882,267,536** | **9,658** | - In 2024, a total of **29,575,200** ordinary shares were repurchased and cancelled, and no listed securities of the bank were purchased, sold, or redeemed by the bank or any of its subsidiaries in H1 2025[268](index=268&type=chunk) [Other Equity Instruments](index=76&type=section&id=Other%20Equity%20Instruments) Other equity instruments remained unchanged at HKD 11,587 million as of June 30, 2025, primarily comprising US$900 million and US$600 million callable fixed rate resettable perpetual capital securities held by the immediate holding company, which are loss-absorbing and subject to write-down upon specific trigger events Other Equity Instruments (HKD million) | Face Value | Description | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | :--- | | US$900 million | Callable fixed rate resettable perpetual capital securities due September 2029 | 6,947 | 6,947 | | US$600 million | Callable fixed rate resettable perpetual capital securities due June 2029 | 4,640 | 4,640 | | **Total** | | **11,587** | **11,587** | - These Additional Tier 1 capital notes are held by the immediate holding company, are loss-absorbing, perpetual, and subordinated, with the bank having the discretion to cancel coupon payments[270](index=270&type=chunk) [Contingent Liabilities, Contractual Commitments and Guarantees](index=77&type=section&id=Contingent%20Liabilities%2C%20Contractual%20Commitments%20and%20Guarantees) Contingent liabilities and financial guarantee contracts totaled HKD 20,114 million, and commitments totaled HKD 494,523 million as of June 30, 2025, with no significant litigation adversely impacting the financial position Off-Balance Sheet Contingent Liabilities and Commitments (HKD million) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Contingent Liabilities and Financial Guarantee Contracts** | | | | Financial guarantees | 604 | 1,898 | | Performance and other guarantees | 19,510 | 20,950 | | **Subtotal** | **20,114** | **22,848** | | **Commitments** | | | | Documentary credits and short-term trade-related transactions | 1,555 | 2,353 | | Forward asset purchases and forward deposits placed | 17,618 | 12,991 | | Undrawn formal standby facilities, credit lines an

[Financial Performance Overview](index=1&type=section&id=Financial%20Performance%20Overview) The group experienced a significant shift from profit to loss in H1 2025, with decreased turnover and gross profit, leading to a substantial increase in loss for the period [Consolidated Income Statement](index=1&type=section&id=Consolidated%20Income%20Statement) The group shifted from profit to loss in H1 2025, with decreased turnover and gross profit, resulting in a significantly expanded loss for the period Key Consolidated Income Statement Data for H1 2025 (thousand HKD) | Indicator | 2025 (Unaudited) | 2024 (Unaudited) | | :--- | :--- | :--- | | Turnover | 935,402 | 1,095,702 | | Cost of Sales | (830,352) | (942,638) | | Gross Profit | 105,050 | 153,064 | | Operating Loss | (48,878) | (8,500) | | Loss Before Income Tax | (50,150) | (10,882) | | Loss for the Period | (52,920) | (7,622) | | Loss Attributable to Equity Holders of the Company | (48,779) | (4,472) | [Consolidated Statement of Comprehensive Income](index=2&type=section&id=Consolidated%20Statement%20of%20Comprehensive%20Income) The group's total comprehensive loss narrowed in H1 2025, primarily due to a favorable shift in currency translation differences, partially offsetting the increased loss for the period Key Consolidated Statement of Comprehensive Income Data for H1 2025 (thousand HKD) | Indicator | 2025 (Unaudited) | 2024 (Unaudited) | | :--- | :--- | :--- | | Loss for the Period | (52,920) | (7,622) | | Currency Translation Differences for Financial Statements of Subsidiaries and an Associate Outside Hong Kong | 10,119 | (47,650) | | Other Comprehensive Income for the Year | 11,728 | (48,695) | | Total Comprehensive Income for the Period | (41,192) | (56,317) | | Total Comprehensive Income Attributable to Equity Holders of the Company | (38,089) | (49,028) | [Consolidated Statement of Financial Position](index=3&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the group's total assets and equity decreased, net current assets declined, but bank and cash balances remained at a relatively high level Key Consolidated Statement of Financial Position Data as of June 30, 2025 (thousand HKD) | Indicator | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Non-current Assets | 1,515,869 | 1,553,555 | | Current Assets | 1,777,401 | 1,882,022 | | Bank and Cash Balances | 431,466 | 717,286 | | Current Liabilities | 400,099 | 408,048 | | Net Current Assets | 1,377,302 | 1,473,974 | | Net Assets | 2,835,539 | 2,958,612 | | Total Equity Attributable to Equity Holders of the Company | 2,722,277 | 2,842,247 | [Condensed Consolidated Statement of Cash Flows](index=4&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) In H1 2025, the group saw increased cash outflow from operating activities, a shift from inflow to outflow in investing activities, and reduced cash outflow from financing activities, leading to a larger net decrease in cash and cash equivalents Key Condensed Consolidated Statement of Cash Flows Data for H1 2025 (thousand HKD) | Indicator | 2025 (Unaudited) | 2024 (Unaudited) | | :--- | :--- | :--- | | Net Cash (Outflow)/Inflow from Operating Activities | (109,157) | (142,038) | | Net Cash (Outflow)/Inflow from Investing Activities | (116,455) | 58,416 | | Net Cash (Outflow)/Inflow from Financing Activities | (108,345) | (126,403) | | Net Decrease in Cash and Cash Equivalents | (333,957) | (210,025) | | Cash and Cash Equivalents at June 30 | 387,606 | 587,133 | [Notes to the Condensed Interim Financial Information](index=4&type=section&id=Notes%20to%20the%20Condensed%20Interim%20Financial%20Information) This section details the basis of preparation, accounting policies, segment information, finance costs, income tax, loss per share, dividends, and key balance sheet items [Basis of Preparation and Accounting Policies](index=4&type=section&id=Basis%20of%20Preparation%20and%20Accounting%20Policies) The interim financial report is unaudited, prepared under HKAS 34 and Appendix D2 of the Listing Rules, using historical cost convention, consistent with 2024 policies, with no significant impact from new standards - The interim financial report is unaudited, prepared in accordance with Hong Kong Accounting Standard 34 and Appendix D2 of the Listing Rules[8](index=8&type=chunk) - The report adopts the historical cost convention and should be read in conjunction with the financial statements for the year ended December 31, 2024[8](index=8&type=chunk) - Revisions to Hong Kong Financial Reporting Standards, such as the amendment to HKAS 21, effective for the current period, have no significant impact on the group's current or prior period results and financial position[9](index=9&type=chunk) [Revenue and Segment Information](index=5&type=section&id=Revenue%20and%20Segment%20Information) The group's business is segmented into book and packaging printing, consumer product packaging, corrugated products, and paper trading, with segment revenue and results presented accordingly - The group's key operating decision-maker (Management Committee) classifies business into four segments based on internal reports to assess operating performance[10](index=10&type=chunk) [Business Segments](index=5&type=section&id=Business%20Segments) The group's four business segments are book and packaging printing, consumer product packaging, corrugated products, and paper trading, with inter-segment sales conducted on an arm's length basis - The group's four business segments are: book and packaging printing, consumer product packaging, corrugated products, and paper trading[11](index=11&type=chunk) - Inter-segment sales are conducted on an arm's length basis, and segment results exclude corporate finance costs, other corporate income and expenses, and share of results of associates[12](index=12&type=chunk)[13](index=13&type=chunk) [Segment Results](index=6&type=section&id=Segment%20Results) In H1 2025, all business segments experienced decreased turnover and recorded losses, with book and packaging printing showing the most significant loss H1 2025 Segment Revenue and Results (thousand HKD) | Business Segment | 2025 Segment Revenue | 2025 Segment Results | 2024 Segment Revenue | 2024 Segment Results | | :--- | :--- | :--- | :--- | :--- | | Book and Packaging Printing | 648,704 | (22,144) | 764,768 | 26,429 | | Consumer Product Packaging | 144,700 | (17,619) | 151,218 | (24,253) | | Corrugated Products | 115,415 | (6,053) | 116,771 | (8,421) | | Paper Trading | 190,802 | (3,949) | 238,383 | 532 | | **Total** | **935,402** | **(50,376)** | **1,095,702** | **(6,418)** | [Finance Costs](index=7&type=section&id=Finance%20Costs) The group's finance costs decreased by **35.8%** in H1 2025 year-on-year, primarily due to reduced interest on bank borrowings H1 2025 Finance Costs (thousand HKD) | Item | 2025 (Unaudited) | 2024 (Unaudited) | Change (%) | | :--- | :--- | :--- | :--- | | Interest on Bank Borrowings | 724 | 1,621 | -55.3% | | Interest on Lease Liabilities | 893 | 899 | -0.7% | | **Total** | **1,617** | **2,520** | **-35.8%** | [Loss Before Income Tax](index=8&type=section&id=Loss%20Before%20Income%20Tax) The group's loss before income tax significantly expanded in H1 2025, influenced by increased depreciation, losses on asset disposals, and reduced interest income, despite improved net foreign exchange gains Key Factors Affecting Loss Before Income Tax for H1 2025 (thousand HKD) | Item | 2025 (Unaudited) | 2024 (Unaudited) | | :--- | :--- | :--- | | Depreciation (Property, Plant and Equipment) | 50,800 | 52,675 | | Loss on Disposal of Property, Plant and Equipment | 5,447 | 921 | | Employee Benefit Expenses (including Directors' Emoluments) | 279,431 | 295,739 | | Interest Income | 4,588 | 8,342 | | Net Foreign Exchange Gain | 9,612 | - | | Fair Value Gain on Structured Bank Deposits | 11,783 | 8,753 | [Income Tax](index=9&type=section&id=Income%20Tax) The group's income tax shifted from a gain to an expense in H1 2025, mainly due to deferred tax moving from a gain to an expense and increased taxes in Hong Kong and Vietnam H1 2025 Income Tax Components (thousand HKD) | Item | 2025 (Unaudited) | 2024 (Unaudited) | | :--- | :--- | :--- | | Current Tax for the Period | 913 | 1,164 | | Deferred Tax | 1,857 | (4,424) | | **Income Tax** | **2,770** | **(3,260)** | - Hung Hing Printing (China) Company Limited obtained High-Tech Enterprise certification, qualifying for a **15%** reduced corporate income tax rate in China for 2024 and 2025[19](index=19&type=chunk) - Vietnamese subsidiaries HH Dream Printing Company Limited and HHD (Thai Ha) Company Limited enjoy a corporate income tax exemption for the first two years, followed by a **50%** reduction for the subsequent four years[19](index=19&type=chunk) [Loss Per Share](index=10&type=section&id=Loss%20Per%20Share) The group's basic loss per share significantly increased in H1 2025, with diluted loss per share being the same due to the anti-dilutive effect of ordinary shares repurchased under the share award scheme H1 2025 Basic Loss Per Share (HK cents) | Indicator | 2025 (Unaudited) | 2024 (Unaudited) | | :--- | :--- | :--- | | Basic Loss Per Share | (5.4) | (0.5) | - For the periods ended June 30, 2025 and 2024, diluted loss per share was the same as basic loss per share due to the anti-dilutive effect of ordinary shares repurchased under the share award scheme[21](index=21&type=chunk) [Basic Loss Per Share](index=10&type=section&id=Basic%20Loss%20Per%20Share) Basic loss per share for H1 2025 was **HK 5.4 cents**, a significant increase from **HK 0.5 cents** in the prior year, primarily due to the expanded loss attributable to equity holders H1 2025 Basic Loss Per Share Calculation | Indicator | 2025 (thousand HKD/thousand shares) | 2024 (thousand HKD/thousand shares) | | :--- | :--- | :--- | | Loss Attributable to Equity Holders of the Company | (48,779) | (4,472) | | Weighted Average Number of Ordinary Shares for Basic Loss Per Share | 907,292 | 904,591 | | **Basic Loss Per Share (HK cents per share)** | **(5.4)** | **(0.5)** | [Diluted Loss Per Share](index=10&type=section&id=Diluted%20Loss%20Per%20Share) Diluted loss per share for H1 2025 was identical to basic loss per share, as the repurchase of ordinary shares under the share award scheme had an anti-dilutive effect - For the periods ended June 30, 2025 and 2024, diluted loss per share was the same as basic loss per share due to the anti-dilutive effect of ordinary shares repurchased under the share award scheme[21](index=21&type=chunk) [Dividends](index=10&type=section&id=Dividends) The Board declared an interim dividend of **HK 3 cents** per share, a reduction from **HK 4 cents** per share in the prior year Interim Dividend Distribution | Item | 2025 (Unaudited) | 2024 (Unaudited) | | :--- | :--- | :--- | | Interim Dividend Per Ordinary Share | HK 3 cents | HK 4 cents | | Total Amount Distributed (thousand HKD) | 27,236 | 36,315 | [Trade and Other Receivables](index=11&type=section&id=Trade%20and%20Other%20Receivables) As of June 30, 2025, the group's total trade and other receivables increased, with both net trade receivables and prepayments showing an upward trend Trade and Other Receivables as of June 30, 2025 (thousand HKD) | Item | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Trade Receivables (Net) | 513,008 | 449,674 | | Trade Receivables from Related Parties | 313 | 9 | | Bills Receivable | 6,781 | 974 | | Prepayments, Deposits and Other Receivables | 122,353 | 113,451 | | **Total** | **642,455** | **564,108** | - As of the reporting period end, trade receivables overdue by more than **90 days** increased from **HKD 47,828 thousand** on December 31, 2024, to **HKD 78,560 thousand** on June 30, 2025[23](index=23&type=chunk) [Cash and Cash Equivalents](index=11&type=section&id=Cash%20and%20Cash%20Equivalents) As of June 30, 2025, the group's bank and cash balances significantly decreased, leading to a corresponding reduction in cash and cash equivalents within the consolidated cash flow statement Cash and Cash Equivalents as of June 30, 2025 (thousand HKD) | Item | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Bank and Cash Balances | 431,466 | 717,286 | | Less: Time Deposits with Original Maturity Over Three Months | (43,860) | - | | **Cash and Cash Equivalents in Consolidated Cash Flow Statement** | **387,606** | **717,286** | [Trade and Other Payables](index=12&type=section&id=Trade%20and%20Other%20Payables) As of June 30, 2025, the group's total trade and other payables slightly increased, with both trade payables and bills payable showing an upward trend Trade and Other Payables as of June 30, 2025 (thousand HKD) | Item | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Trade Payables | 142,616 | 130,262 | | Bills Payable | 10,316 | 6,799 | | Current Portion of Deferred Income | 4,798 | 5,956 | | Other Payables and Accruals | 173,171 | 175,138 | | Amount Due to an Associate | 4,900 | 5,418 | | **Total** | **335,801** | **323,573** | - As of the reporting period end, trade payables overdue by more than **90 days** increased from **HKD 5,197 thousand** on December 31, 2024, to **HKD 10,937 thousand** on June 30, 2025[25](index=25&type=chunk) [Management Discussion and Analysis](index=12&type=section&id=Management%20Discussion%20and%20Analysis) This section provides an overview of the group's financial results, strategic initiatives for future growth, detailed business performance by segment, liquidity, capital resources, environmental sustainability efforts, and human resources [Results and Dividends](index=12&type=section&id=Results%20and%20Dividends) In H1 2025, the group's loss attributable to equity holders expanded to **HKD 49 million** due to global economic volatility, protectionism, and tariffs, yet maintained robust cash flow and declared an interim dividend of **HK 3 cents** per share - In H1 2025, the group recorded a loss attributable to equity holders of approximately **HKD 49 million**, a significant increase compared to a loss of **HKD 4 million** in the prior year period[27](index=27&type=chunk) - The group's total deposits and cash (including structured deposits) amounted to approximately **HKD 760 million**, maintaining robust liquidity[27](index=27&type=chunk) - The Board declared an interim dividend of **HK 3 cents** per share, lower than the **HK 4 cents** per share in 2024[27](index=27&type=chunk) - The global printing and packaging industry faces significant pressure, with declining demand for core businesses and US tariff policies imposing substantial financial burdens on export-oriented enterprises[26](index=26&type=chunk) [Laying the Foundation for Future Growth](index=13&type=section&id=Laying%20the%20Foundation%20for%20Future%20Growth) The group is proactively addressing the challenging operating environment by constructing a second Vietnam factory, integrating Zhongshan plant operations, upgrading AI-driven systems, ensuring EUDR compliance, and diversifying business through STEM PLUS and Yum Me Print - Construction of the second Vietnam factory (Thai Ha plant) is progressing smoothly, which will provide a critical production base for customers and diversify tariff risks[28](index=28&type=chunk) - The Zhongshan plant completed two major business integrations, enhancing communication, production efficiency, and logistics operations[28](index=28&type=chunk) - The group continues to transform its business through system standardization and AI-driven innovation, with the new ERP 5.0 system improving quotation and inventory management efficiency, and the AI team driving cross-departmental innovation projects[28](index=28&type=chunk) - The group has made significant progress in complying with the EU Deforestation Regulation (EUDR), achieving full traceability of paper raw materials starting from July 2025[29](index=29&type=chunk) - Diversified business expansion includes STEM PLUS educational activities, Think Leap Limited's children's books and educational toys business (which completed digital transformation of logistics management), and Yum Me Print's self-service printing (with **50** service stations and over **20,000** members)[30](index=30&type=chunk) - Yum Me Print has established a strategic partnership with a mainland shared power bank provider to expand its service scope[31](index=31&type=chunk) [Business Performance](index=14&type=section&id=Business%20Performance) All major business segments faced challenges in H1 2025, experiencing revenue declines and losses, but the group actively responded with cost optimization, efficiency improvements, and resource integration strategies - The group's geographical diversification strategy through expanding production in Vietnam aims to counter US-China trade friction and tariff changes, optimizing production scheduling and reducing geopolitical interference[32](index=32&type=chunk) [Book and Packaging Printing](index=14&type=section&id=Book%20and%20Packaging%20Printing) As the largest segment, book and packaging printing revenue decreased by **15%** and shifted from profit to loss, primarily due to slowing demand, price competition, and rising logistics costs, prompting a comprehensive transformation strategy Book and Packaging Printing Business Performance | Indicator | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Revenue | HKD 647.1 million | HKD 761.7 million | -15% | | Results | Loss of HKD 22.1 million | Profit of HKD 26.4 million | Shift from profit to loss | - The business has implemented a comprehensive transformation strategy, combining operational excellence with strategic growth initiatives through cost optimization, business restructuring, AI technology integration, and business diversification[32](index=32&type=chunk) [Consumer Product Packaging](index=15&type=section&id=Consumer%20Product%20Packaging) Consumer product packaging revenue declined by **4.1%**, but losses narrowed through cost optimization and enhanced operational efficiency Consumer Product Packaging Business Performance | Indicator | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Revenue | HKD 144.5 million | HKD 150.7 million | -4.1% | | Loss | HKD 17.6 million | HKD 24.2 million | Loss narrowed | - The business continues to streamline processes, share resources, and optimize logistics, with sustainable cost savings and improved profitability expected in the short term[33](index=33&type=chunk) [Corrugated Products](index=15&type=section&id=Corrugated%20Products) Despite weak demand and price competition, corrugated products revenue grew by **6.3%**, losses narrowed, and the segment enhanced collaborative efficiency by integrating Greater Bay Area production resources Corrugated Products Business Performance | Indicator | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Revenue | HKD 91.8 million | HKD 86.413 million | +6.3% | | Loss | HKD 6 million | HKD 8.4 million | Loss narrowed | - The business is integrating Greater Bay Area production resources to enhance collaborative efficiency, actively expanding its customer base, and improving product and service quality and speed to market[33](index=33&type=chunk) [Paper Trading](index=15&type=section&id=Paper%20Trading) Paper trading revenue sharply decreased by **46.4%** due to shrinking export demand, presenting unprecedented challenges, for which the group has formulated turnaround initiatives Paper Trading Business Performance | Indicator | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Revenue | HKD 51.9 million | HKD 96.8 million | -46.4% | - The group has formulated turnaround initiatives including expanding new businesses, improving cost structures, and driving strategic innovation[33](index=33&type=chunk) [Liquidity and Capital Resources](index=15&type=section&id=Liquidity%20and%20Capital%20Resources) The group maintained a prudent cash management strategy, holding **HKD 760 million** in total cash and **HKD 715 million** in net cash as of June 30, 2025, while successfully reducing bank loans and lowering the gearing ratio to **1.6%** - As of June 30, 2025, the group's total cash (including structured deposits) was **HKD 760 million**, with net cash at **HKD 715 million**[34](index=34&type=chunk) - The group's bank loans decreased to **HKD 46 million**, and the gearing ratio continued to fall to **1.6%** (2024: **3.1%**)[35](index=35&type=chunk) - Total interest costs decreased by **55%** to **HKD 0.7 million**[35](index=35&type=chunk) - The group invested over **HKD 41 million** in capital projects and committed an additional **HKD 43 million** to expand and enhance existing production capacity[35](index=35&type=chunk) - RMB-linked structured bank deposits increased to **HKD 329 million**, with RMB accounting for **71%** of total cash[34](index=34&type=chunk) [Environmental Sustainability](index=16&type=section&id=Environmental%20Sustainability) The group continues to strengthen environmental sustainability by expanding solar energy use, improving resource efficiency, adhering to responsible sourcing, and maintaining a high production waste recycling rate - The group has expanded photovoltaic power generation equipment to **six** locations, increasing total installed capacity to **9,806 kWp** (H1 2024: **6,504 kWp**), generating **4,472,301 kWh** of electricity and offsetting approximately **1,771 tonnes** of carbon emissions[36](index=36&type=chunk) - Total electricity consumption decreased to **26.81 million kWh**, and water consumption reduced to **177,859 cubic meters**, reflecting improved resource management efficiency[37](index=37&type=chunk) - Production waste recycling rate remained at a high level of **96%**, with **14,294 tonnes** of waste paper recycled[37](index=37&type=chunk) - Over **95%** of paper is FSC™ certified or contains a high proportion of recycled content, demonstrating a commitment to responsible sourcing[37](index=37&type=chunk)[38](index=38&type=chunk) [Our People](index=17&type=section&id=Our%20People) As of June 30, 2025, the group's total workforce decreased, but training investment continued, with increased average training hours per trainee covering environmental awareness, business ethics, functional skills, and diversity and inclusion Employee and Training Data | Indicator | June 30, 2025 | H1 2024 | | :--- | :--- | :--- | | Total Employees | 4,918 | 5,600 | | Total Training Hours | 84,873 hours | 94,252 hours | | Number of Training Participants | 34,131 | - | | Average Training Hours Per Participant | 2.49 hours | 2.37 hours | - Training scope covers key areas such as environmental awareness, business ethics, specialized functional skills, and diversity, equity, and inclusion (DE&I)[39](index=39&type=chunk) [Outlook](index=17&type=section&id=Outlook) The group remains optimistic about future development, continuing to drive organizational streamlining, business integration, new Vietnam plant operations, printing technology innovation, and diversified business expansion (STEM PLUS, Think Leap) to navigate market uncertainties and achieve sustainable growth - The group will continue to drive synergistic initiatives to achieve operational savings and resource optimization, with Shenzhen corrugated products business integrating with Shunde/Foshan and Zhongshan plants, and the second Vietnam plant expected to be fully operational by the end of September[41](index=41&type=chunk) - The group successfully secured new product packaging orders from several internationally renowned consumer brands, utilizing innovative printing technologies and eco-friendly materials, demonstrating its R&D capabilities[41](index=41&type=chunk) - As trade tensions ease, some major clients are gradually returning to the Chinese market, and the group is actively promoting its printing capabilities in the mainland market[42](index=42&type=chunk) - The STEM PLUS program will expand its business beyond Hong Kong, exploring new opportunities in Asia and solidifying Hong Kong's position as a regional education hub[42](index=42&type=chunk) - Think Leap will focus on developing the online digital market, leveraging technological advancements to drive retail business expansion and innovation[43](index=43&type=chunk) - The group believes that its various improvements and innovative measures, combined with advantages in quality, compliance, and sustainability, will effectively address market uncertainties, seize new opportunities, and drive sustainable growth[43](index=43&type=chunk) [Other Information](index=18&type=section&id=Other%20Information) This section covers the interim dividend declaration, closure of the register of members, transactions involving the company's listed securities, adherence to the Corporate Governance Code, compliance with the Model Code for Securities Transactions, and the Audit Committee's review [Interim Dividend](index=18&type=section&id=Interim%20Dividend) The Board resolved to declare an interim dividend of **HK 3 cents** per share, payable on October 17, 2025, to shareholders registered on September 25, 2025 - The Board resolved to declare an interim dividend of **HK 3 cents** per ordinary share (2024: **HK 4 cents**)[45](index=45&type=chunk) - The dividend will be paid on October 17, 2025, to shareholders whose names appear on the company's register of members on September 25, 2025[45](index=45&type=chunk) [Closure of Register of Members](index=18&type=section&id=Closure%20of%20Register%20of%20Members) To determine eligibility for the interim dividend, the company's register of members will be closed from September 22 to September 25, 2025, with all transfer documents due by 4:30 p.m. on September 19, 2025 - The company's register of members will be closed from September 22, 2025, to September 25, 2025 (both dates inclusive)[46](index=46&type=chunk) - To qualify for the interim dividend, all transfer documents, accompanied by the relevant share certificates, must be lodged with the company's share registrar by 4:30 p.m. on September 19, 2025[46](index=46&type=chunk) [Purchase, Redemption or Sale of the Company's Listed Securities](index=18&type=section&id=Purchase%2C%20Redemption%20or%20Sale%20of%20the%20Company%27s%20Listed%20Securities) Except for the trustee of the Restricted Share Award Scheme purchasing **288,000** shares, neither the company nor its subsidiaries purchased, redeemed, or sold any of the company's listed securities during the period - The trustee of the Restricted Share Award Scheme purchased a total of **288,000** shares of the company for an aggregate consideration of **HKD 298,000**[47](index=47&type=chunk) - Save for the above, neither the company nor any of its subsidiaries purchased, redeemed, or sold any of the company's shares during the period[47](index=47&type=chunk) [Corporate Governance Code](index=18&type=section&id=Corporate%20Governance%20Code) The group complied with the Corporate Governance Code in Appendix C1 of the Listing Rules during the reporting period, though the roles of Chairman and Chief Executive are combined by Mr. Yam Chak Ming, which the Board deems to be in the company's best interest - The group complied with the Corporate Governance Code set out in Appendix C1 of the Listing Rules throughout the accounting period covered by the interim results[48](index=48&type=chunk) - Code Provision C2.1 stipulates that the roles of chairman and chief executive should be separate, but the duties of chief executive are performed by Mr. Yam Chak Ming, the Executive Chairman of the company, which the Board believes is in the company's best interest[48](index=48&type=chunk) [Model Code for Securities Transactions](index=19&type=section&id=Model%20Code%20for%20Securities%20Transactions) The company adopted the Model Code for Securities Transactions by Directors of Listed Issuers in Appendix C3 of the Listing Rules, and all directors confirmed compliance during the reporting period after specific inquiry - The company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers set out in Appendix C3 of the Listing Rules for directors' dealings in the company's securities[49](index=49&type=chunk) - Following specific enquiry with the company's directors, all directors confirmed compliance with the Model Code for Securities Transactions throughout the accounting period covered by the interim results[49](index=49&type=chunk) [Audit Committee](index=19&type=section&id=Audit%20Committee) The company's Audit Committee reviewed the interim financial results for the six months ended June 30, 2025, including accounting policies and practices, and discussed audit, internal control, and financial reporting matters - The company's Audit Committee has reviewed the interim financial results for the six months ended June 30, 2025, and the accounting principles and practices adopted by the group[50](index=50&type=chunk) - The Audit Committee comprises three independent non-executive directors and one non-executive director[50](index=50&type=chunk)

2025 中期報告 2025 Interim Report 2025 Interim Report 中期報告 (II) 公司信息 | (I) | 釋義 | 2 | | --- | --- | --- | | (II) | 公司信息 | 4 | | (III) | 主要數據 | 6 | | (IV) | 管理層討論與分析 | 7 | | (V) | 股本及主要股東、董事持股情況 | 25 | | (VI) | 重要事項 | 31 | | (VII) | 中期財務報告（未經審核） | 45 | | (VIII) | 其他 | 79 | (I) 釋義 於本中期報告內，除非文義另有所指，否則下列字句具有以下涵義： | 「本公司╱公司╱中國山水╱ | 指 | 中國山水水泥集團有限公司 | | --- | --- | --- | | 山水水泥」 | | | | 「本集團╱中國山水集團」 | 指 | 本公司及其附屬公司 | | 「財務報表」 | 指 | 本集團的簡明綜合財務報表 | | 「報告期」 | 指 | 2025年1月1日至2025年6月30日的期間 | | 「董事會」 | 指 | 本公司董事會 | | 「董事」 | ...

[Financial Summary](index=1&type=section&id=%E8%B2%A1%E5%8B%99%E6%91%98%E8%A6%81) The company experienced significant declines in key financial metrics and a reduced interim dividend | Metric | H1 2025 (RMB'000) | H1 2024 (RMB'000) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 428,270 | 1,284,256 | -66.65% | | Gross Profit | 132,009 | 367,501 | -64.08% | | Profit Attributable to Owners of the Company | 56,049 | 177,309 | -68.30% | | Basic Earnings Per Share | 2.629 cents | 8.675 cents | -69.68% | | Diluted Earnings Per Share | 2.598 cents | 8.673 cents | -70.04% | - The Board recommends an interim dividend of **HKD 0.015 per share** for the six months ended June 30, 2025, a decrease from HKD 0.03 per share in the prior year period[5](index=5&type=chunk) [Condensed Consolidated Financial Statements](index=2&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8) This section presents the condensed consolidated financial statements, detailing the company's financial performance and position [Condensed Consolidated Statement of Profit or Loss](index=2&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%90%8D%E7%9B%8A%E8%A1%A8) For H1 2025, the company experienced significant declines in both revenue and profit attributable to owners Condensed Consolidated Statement of Profit or Loss Key Data | Metric | H1 2025 (RMB'000) | H1 2024 (RMB'000) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 428,270 | 1,284,256 | -66.65% | | Cost of Sales and Services | (296,261) | (916,755) | -67.68% | | Gross Profit | 132,009 | 367,501 | -64.08% | | Operating Profit | 65,976 | 215,068 | -69.32% | | Profit Before Tax | 63,171 | 207,759 | -69.50% | | Profit for the Period Attributable to Owners of the Company | 56,049 | 177,309 | -68.30% | | Basic Earnings Per Share | 2.629 cents | 8.675 cents | -69.68% | | Diluted Earnings Per Share | 2.598 cents | 8.673 cents | -70.04% | [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=3&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%90%8D%E7%9B%8A%E5%8F%8A%E5%85%B6%E4%BB%96%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) Total comprehensive income for H1 2025 significantly decreased due to reduced profit and foreign currency translation differences Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income Key Data | Metric | H1 2025 (RMB'000) | H1 2024 (RMB'000) | YoY Change (RMB'000) | | :--- | :--- | :--- | :--- | | Profit for the Period | 56,049 | 177,309 | -121,260 | | Exchange differences arising on translation of foreign operations | (3,812) | 2,535 | -6,347 | | Other comprehensive (expense)/income for the period, net of tax | (3,809) | 2,535 | -6,344 | | Total comprehensive income for the period attributable to owners of the Company | 52,240 | 179,844 | -127,604 | [Condensed Consolidated Statement of Financial Position](index=4&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) As of June 30, 2025, total assets less current liabilities and net assets increased, primarily due to higher net current assets Condensed Consolidated Statement of Financial Position Key Data | Metric | June 30, 2025 (RMB'000) | Dec 31, 2024 (RMB'000) | Change (RMB'000) | | :--- | :--- | :--- | :--- | | Non-current assets | 1,380,129 | 1,364,899 | 15,230 | | Current assets | 1,750,172 | 1,762,217 | -12,045 | | Current liabilities | 688,446 | 858,794 | -170,348 | | Net current assets | 1,061,726 | 903,423 | 158,303 | | Total assets less current liabilities | 2,441,855 | 2,268,322 | 173,533 | | Non-current liabilities | 214,214 | 92,921 | 121,293 | | Net assets (Total equity) | 2,227,641 | 2,175,401 | 52,240 | [Notes to the Condensed Consolidated Financial Statements](index=6&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8%E9%99%84%E8%A8%BB) This section provides detailed notes supporting the condensed consolidated financial statements, covering accounting policies and key financial items [Basis of Preparation](index=6&type=section&id=1.%20%E7%B7%A8%E8%A3%BD%E5%9F%BA%E6%BA%96) The condensed consolidated financial statements adhere to HKAS 34 and Listing Rules, maintaining consistency with 2024 annual accounting policies - The condensed consolidated financial statements are prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" issued by the HKICPA and the applicable disclosure requirements of the Listing Rules of The Stock Exchange of Hong Kong Limited[10](index=10&type=chunk) - The accounting policies and methods of computation used in the condensed consolidated financial statements are consistent with those adopted in the preparation of the Group's annual financial statements for the year ended December 31, 2024[10](index=10&type=chunk) [Adoption of New and Revised Hong Kong Financial Reporting Standards](index=6&type=section&id=2.%20%E6%8E%A1%E7%B4%8D%E6%96%B0%E8%A8%82%E5%8F%8A%E7%B6%93%E4%BF%AE%E8%A8%82%E9%A6%99%E6%B8%AF%E8%B2%A1%E5%8B%99%E5%A0%B1%E5%91%8A%E6%BA%96%E5%89%87) HKAS 21 (Amendment) "Lack of Exchangeability" was applied in this interim period, with no significant financial impact - The Group has applied the revised Hong Kong Financial Reporting Standards issued by the HKICPA for the first time in the current interim period, including HKAS 21 (Amendment) "Lack of Exchangeability"[11](index=11&type=chunk) - The application of these revised HKFRSs has had no material impact on the Group's financial performance and consolidated financial position for the current and prior periods and/or on the disclosures set out in these condensed consolidated financial information[11](index=11&type=chunk) [Segment Information](index=6&type=section&id=3.%20%E5%88%86%E9%83%A8%E8%B3%87%E6%96%99) The Group's Oil & Gas segment experienced revenue decline but improved gross margin, while New Energy & Refining saw revenue growth but a loss - The Group comprises two main reportable segments: equipment engineering and integrated services for the oil and gas industry, and equipment engineering and integrated services for the new energy and refining industry[12](index=12&type=chunk)[13](index=13&type=chunk) Segment Revenue and Profit Analysis (For the six months ended June 30) | Segment | H1 2025 Revenue (RMB'000) | H1 2024 Revenue (RMB'000) | YoY Revenue Change (%) | H1 2025 Segment Profit/(Loss) (RMB'000) | H1 2024 Segment Profit/(Loss) (RMB'000) | H1 2025 Gross Margin (%) | H1 2024 Gross Margin (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Oil and Gas | 321,753 | 1,281,731 | -74.90% | 148,396 | 363,509 | 46% | 28% | | New Energy and Refining | 106,517 | 2,226 | +4685.13% | (16,387) | 4,428 | -15% | 199% | | Total | 428,270 | 1,284,256 | -66.65% | 132,009 | 367,501 | 30.82% | 28.62% | [Revenue](index=8&type=section&id=4.%20%E6%94%B6%E5%85%A5) Total revenue for H1 2025 significantly decreased due to a sharp decline in Oil & Gas, partially offset by New Energy & Refining growth Revenue by Business Segment and Timing of Recognition (For the six months ended June 30) | Timing of Revenue Recognition | H1 2025 Oil & Gas (RMB'000) | H1 2024 Oil & Gas (RMB'000) | H1 2025 New Energy & Refining (RMB'000) | H1 2024 New Energy & Refining (RMB'000) | H1 2025 Total (RMB'000) | H1 2024 Total (RMB'000) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Goods and services transferred at a point in time | 15,064 | 21,987 | 375 | - | 15,439 | 21,987 | | Goods and services transferred over time | 306,689 | 1,259,744 | 106,142 | 2,226 | 412,831 | 1,262,269 | | **Total** | **321,753** | **1,281,731** | **106,517** | **2,226** | **428,270** | **1,284,256** | Trade and Bills Receivables, Contract Assets and Contract Liabilities from Customer Contracts | Metric | June 30, 2025 (RMB'000) | Dec 31, 2024 (RMB'000) | | :--- | :--- | :--- | | Trade and bills receivables | 74,857 | 288,070 | | Contract assets | 467,732 | 476,685 | | Contract liabilities | 43,072 | 60,957 | - An amount of approximately **RMB 50,630,000** recognized in contract liabilities at the beginning of the period was recognized as revenue for the six months ended June 30, 2025[18](index=18&type=chunk) [Other Income](index=9&type=section&id=5.%20%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5) Other income for H1 2025 decreased, primarily due to lower bank interest income and government subsidies Other Income Details (For the six months ended June 30) | Item | H1 2025 (RMB'000) | H1 2024 (RMB'000) | YoY Change (RMB'000) | | :--- | :--- | :--- | :--- | | Interest income from bank deposits | 4,682 | 8,671 | -3,989 | | Government grants recognized | 1,819 | 4,619 | -2,800 | | Net exchange gain | - | 330 | -330 | | Total | 6,599 | 13,912 | -7,313 | [Other Operating Expenses](index=9&type=section&id=6.%20%E5%85%B6%E4%BB%96%E7%87%9F%E6%A5%AD%E9%96%8B%E6%94%AF) Other operating expenses for H1 2025 significantly decreased, mainly due to no impairment losses on property, plant, and equipment Other Operating Expenses Details (For the six months ended June 30) | Item | H1 2025 (RMB'000) | H1 2024 (RMB'000) | YoY Change (RMB'000) | | :--- | :--- | :--- | :--- | | Fair value loss on derivative financial instruments | 5,329 | 7,251 | -1,922 | | Impairment provision for inventories | 2,098 | 3,101 | -1,003 | | Impairment loss on property, plant and equipment | - | 26,018 | -26,018 | | Total | 8,810 | 38,820 | -30,010 | - No impairment loss was recognized for property, plant and equipment of cash-generating units for the period ended June 30, 2025 (six months ended June 30, 2024: **RMB 1,491,000**)[20](index=20&type=chunk) - No impairment loss was recognized for equipment at the Penglai construction site for the six months ended June 30, 2025 (six months ended June 30, 2024: **RMB 24,527,000**)[21](index=21&type=chunk) [Finance Costs](index=10&type=section&id=7.%20%E8%B2%A1%E5%8B%99%E8%B2%BB%E7%94%A8) Finance costs for H1 2025 decreased, primarily due to reduced interest expenses on bank loans Finance Costs Details (For the six months ended June 30) | Item | H1 2025 (RMB'000) | H1 2024 (RMB'000) | YoY Change (RMB'000) | | :--- | :--- | :--- | :--- | | Interest expense on bank loans | 1,444 | 4,937 | -3,493 | | Interest on lease liabilities | 490 | 545 | -55 | | Others | 869 | 1,827 | -958 | | Total | 2,803 | 7,309 | -4,506 | [Dividends](index=10&type=section&id=8.%20%E8%82%A1%E6%81%AF) The Board recommends a reduced interim dividend of **HKD 0.015 per share** for H1 2025 - The Board recommends an interim dividend of **HKD 0.015 per share** for the six months ended June 30, 2025 (six months ended June 30, 2024: **HKD 0.03 per share**)[23](index=23&type=chunk) [Income Tax Expense](index=11&type=section&id=9.%20%E6%89%80%E5%BE%97%E7%A8%85%E9%96%8B%E6%94%AF) Income tax expense for H1 2025 significantly decreased, primarily due to reduced taxable profit Income Tax Expense Details (For the six months ended June 30) | Item | H1 2025 (RMB'000) | H1 2024 (RMB'000) | YoY Change (RMB'000) | | :--- | :--- | :--- | :--- | | Current tax – PRC Enterprise Income Tax | 5,507 | 37,961 | -32,454 | | Deferred tax | 1,615 | (7,511) | 9,126 | | Total | 7,122 | 30,450 | -23,328 | - No provision for Hong Kong Profits Tax was made as the Group had no assessable profits generated in Hong Kong for the six months ended June 30, 2025 and 2024[24](index=24&type=chunk) [Profit for the Period](index=11&type=section&id=10.%20%E6%9C%9F%E5%85%A7%E6%BA%A2%E5%88%A9) Profit for the period was influenced by inventory impairment, asset disposal gains/losses, and directors' and management's emoluments Profit for the Period Impact Items (For the six months ended June 30) | Item | H1 2025 (RMB'000) | H1 2024 (RMB'000) | | :--- | :--- | :--- | | Impairment provision for inventories | 2,098 | 3,101 | | (Gain)/loss on disposal of property, plant and equipment | (30) | 410 | | Directors' emoluments | 481 | 1,075 | | Management's emoluments | 1,501 | 35,490 | | Total directors' and management's emoluments | 1,982 | 36,565 | [Earnings Per Share](index=12&type=section&id=11.%20%E6%AF%8F%E8%82%A1%E7%9B%88%E5%88%A9) Basic and diluted earnings per share for H1 2025 significantly decreased from the prior year period Earnings Per Share Calculation Data (For the six months ended June 30) | Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Profit for the period attributable to owners of the Company for the purpose of basic and diluted earnings per share (RMB'000) | 56,049 | 177,309 | | Weighted average number of ordinary shares for the purpose of basic earnings per share | 2,131,598,389 | 2,043,991,246 | | Effect of potential dilutive ordinary shares from share options | 25,937,306 | 345,388 | | Weighted average number of ordinary shares for the purpose of diluted earnings per share | 2,157,535,695 | 2,044,336,634 | | Basic earnings per share (RMB cents) | 2.629 | 8.675 | | Diluted earnings per share (RMB cents) | 2.598 | 8.673 | [Property, Plant and Equipment](index=12&type=section&id=12.%20%E7%89%A9%E6%A5%AD%E3%80%81%E5%BB%A0%E6%88%BF%E5%8F%8A%E8%A8%AD%E5%82%99) The Group acquired less property, plant and equipment in H1 2025 compared to the prior year period - For the six months ended June 30, 2025, the Group acquired property, plant and equipment of approximately **RMB 67,568,000** (six months ended June 30, 2024: **RMB 84,330,000**)[27](index=27&type=chunk) [Trade and Bills Receivables](index=13&type=section&id=13.%20%E6%87%89%E6%94%B6%E8%B2%BF%E6%98%93%E8%B3%AC%E6%AC%BE%E5%8F%8A%E7%A5%A8%E6%93%9A) As of June 30, 2025, total trade and bills receivables significantly decreased, primarily due to reduced trade receivables Trade and Bills Receivables (RMB'000) | Item | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Trade receivables | 150,477 | 365,421 | | Provision for doubtful debts | (76,439) | (78,701) | | Bills receivables | 819 | 1,350 | | **Total** | **74,857** | **288,070** | Ageing Analysis of Trade Receivables (RMB'000) | Ageing | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | 0 to 30 days | 29,932 | 136,215 | | 31 to 90 days | 19,950 | 115,542 | | 91 to 365 days | 13,283 | 30,277 | | Over 365 days | 46,523 | 42,500 | | Unbilled | 40,789 | 40,887 | | **Total** | **150,477** | **365,421** | [Trade and Bills Payables](index=13&type=section&id=14.%20%E6%87%89%E4%BB%98%E8%B2%BF%E6%98%93%E8%B3%AC%E6%AC%BE%E5%8F%8A%E7%A5%A8%E6%93%9A) As of June 30, 2025, total trade and bills payables decreased from year-end 2024 Trade and Bills Payables (RMB'000) | Item | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Trade payables | 326,228 | 417,607 | | Bills payables | - | - | | **Total** | **326,228** | **417,607** | Ageing Analysis of Trade Payables (RMB'000) | Ageing | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | 0 to 30 days | 226,755 | 279,475 | | 31 to 90 days | 45,832 | 19,206 | | 91 to 365 days | 32,724 | 36,113 | | Over 365 days | 47,543 | 56,187 | | **Total** | **326,228** | **417,607** | [Share Capital](index=14&type=section&id=15.%20%E8%82%A1%E6%9C%AC) As of June 30, 2025, the company's issued share capital remained unchanged, with a consistent authorized share capital Summary of Share Capital Movements | Item | Number of Shares | Amount (HKD'000) | Equivalent to (RMB'000) | | :--- | :--- | :--- | :--- | | As at January 1, 2024 (audited) | 1,981,598,389 | 19,816 | 17,783 | | Share placement | 150,000,000 | 1,500 | 1,362 | | As at June 30, 2025 (unaudited) | 2,131,598,389 | 21,316 | 19,145 | - On March 7, 2024, the company issued **150,000,000 ordinary shares** at **HKD 0.42 per share** through a placement, with a premium of approximately **HKD 60,009,000** (approximately **RMB 54,996,000**) after deducting share issue expenses, credited to the share premium account[31](index=31&type=chunk) [Share Award Scheme](index=15&type=section&id=16.%20%E8%82%A1%E4%BB%BD%E7%8D%8E%E5%8B%B5%E8%A8%88%E5%8A%83) As of June 30, 2025, awarded shares were granted and vested, with no share award expenses recognized this period - The company has adopted a share award scheme, under which shares of the company are purchased by a trustee on the Stock Exchange[32](index=32&type=chunk) - As of December 31, 2024, the trustee had purchased a total of **228,750,000 shares** for a total consideration of approximately **HKD 158,560,000** (approximately **RMB 144,734,000**); no further purchases were made by the trustee for the six months ended June 30, 2025[32](index=32&type=chunk) - As of June 30, 2025, **164,000,000 awarded shares** have been granted and vested; no share award expenses were recognized in "Administrative expenses" in profit or loss for the six months ended June 30, 2025[32](index=32&type=chunk)[33](index=33&type=chunk) [Contingent Liabilities](index=15&type=section&id=17.%20%E6%88%96%E7%84%B6%E8%B2%A0%E5%82%B5) As of June 30, 2025, the Group had no significant contingent liabilities - As of June 30, 2025, the Group had no significant contingent liabilities[33](index=33&type=chunk) [Management Discussion and Analysis](index=16&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%A4%E8%A8%8E%E8%AB%96%E5%8F%8A%E5%88%86%E6%9E%90) This section provides management's perspective on the company's performance, financial position, and future outlook [Review](index=16&type=section&id=1.%20%E5%9B%9E%E9%A1%A7) The Group expanded renewable energy capacity but faced H1 revenue decline due to project delays and international political factors - China's annual new renewable energy installed capacity accounts for over **40%** globally, and the Group possesses production capabilities and experience for various offshore wind power pile foundation products, having undertaken several offshore wind power construction projects[34](index=34&type=chunk) - The Group has commenced construction of the second phase of the Zhuhai site's wharf project, planning to build a **50,000-ton** general-purpose berth, which will significantly enhance core competitiveness and facilitate international market expansion[35](index=35&type=chunk) - Due to delays in some ongoing projects and the impact of international political factors on overseas markets, the Group's construction sites experienced relatively insufficient workload during the reporting period[35](index=35&type=chunk) [Revenue (Management Discussion and Analysis)](index=16&type=section&id=%E6%94%B6%E5%85%A5%20(%E7%AE%A1%E7%90%86%E5%B1%A4%E8%A8%8E%E8%AB%96%E5%8F%8A%E5%88%86%E6%9E%90)) Total revenue for H1 2025 significantly decreased due to a sharp decline in Oil & Gas, partially offset by New Energy & Refining growth Revenue Composition Analysis by Business Segment (For the six months ended June 30) | Product/Service | H1 2025 (RMB'000) | % of Total Revenue | H1 2024 (RMB'000) | % of Total Revenue | YoY Change (RMB'000) | YoY Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Equipment engineering and integrated services for the oil and gas industry | 321,753 | 75% | 1,281,731 | 100% | -959,978 | -74.90% | | Equipment engineering and integrated services for the new energy and refining industry | 106,517 | 25% | 2,226 | 0% | 104,291 | +4685.13% | | Others | 0 | 0% | 299 | 0% | -299 | -100% | | **Total** | **428,270** | **100%** | **1,284,256** | **100%** | **-855,986** | **-66.65%** | [Cost of Sales and Services](index=17&type=section&id=%E9%8A%B7%E5%94%AE%E5%8F%8A%E6%9C%8D%E5%8B%99%E6%88%90%E6%9C%AC) Cost of sales and services for H1 2025 significantly decreased, primarily due to a substantial reduction in direct costs - During the reporting period, the Group's cost of sales and services was approximately **RMB 296,261,000**, a decrease of approximately **RMB 620,494,000** or **67.68%** from the prior year period[38](index=38&type=chunk) - Direct costs amounted to approximately **RMB 197,271,000**, accounting for **66.59%** of total cost of sales and services, a decrease of approximately **RMB 614,101,000** or **75.69%** from approximately RMB 811,372,000 in the prior year period[38](index=38&type=chunk) - Manufacturing overhead decreased by approximately **RMB 6,393,000** to approximately **RMB 98,990,000** from approximately RMB 105,383,000 in the prior year period, a decrease of approximately **6.07%**[38](index=38&type=chunk) [Gross Profit (Management Discussion and Analysis)](index=17&type=section&id=%E6%AF%9B%E5%88%A9%20(%E7%AE%A1%E7%90%86%E5%B1%A4%E8%A8%8E%E8%AB%96%E5%8F%8A%E5%88%86%E6%9E%90)) Gross profit for H1 2025 decreased, but overall gross margin improved, driven by the Oil & Gas segment's enhanced margin Gross Profit Analysis by Business Segment (For the six months ended June 30) | Product/Service | H1 2025 Gross Profit (RMB'000) | H1 2025 Gross Margin (%) | H1 2024 Gross Profit (RMB'000) | H1 2024 Gross Margin (%) | | :--- | :--- | :--- | :--- | :--- | | Equipment engineering and integrated services for the oil and gas industry | 148,396 | 46% | 363,510 | 28% | | Equipment engineering and integrated services for the new energy and refining industry | (16,387) | (15%) | 4,428 | 199% | | Others | 0 | 0% | (437) | (146%) | | **Total** | **132,009** | **30.82%** | **367,501** | **28.62%** | - During the reporting period, the Group's total gross profit was approximately **RMB 132,009,000**, a decrease of approximately **RMB 235,492,000** or **64.08%** from the prior year period[39](index=39&type=chunk) - The overall gross margin increased from **28.62%** in the prior year period to **30.82%**[39](index=39&type=chunk) [Other Income (Management Discussion and Analysis)](index=17&type=section&id=%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5%20(%E7%AE%A1%E7%90%86%E5%B1%A4%E8%A8%8E%E8%AB%96%E5%8F%8A%E5%88%86%E6%9E%90)) Other income for H1 2025 was primarily derived from interest income and government subsidies - The Group's other income for H1 2025 was approximately **RMB 6,599,000**, mainly comprising interest income and government grant income[40](index=40&type=chunk) [Administrative and Other Operating Expenses](index=17&type=section&id=%E8%A1%8C%E6%94%BF%E5%8F%8A%E5%85%B6%E4%BB%96%E7%87%9F%E6%A5%AD%E9%96%8B%E6%94%AF) Total administrative and other operating expenses significantly decreased due to reduced staff remuneration and no share-based expenses - Total administrative and other operating expenses decreased by approximately **59.40%** or **RMB 99,686,000** to approximately **RMB 68,135,000** compared to the prior year period[41](index=41&type=chunk) - Administrative expenses decreased by **RMB 69,676,000** compared to the prior year period, mainly due to a significant reduction in accrued staff remuneration and the absence of share-based expenses in the current period[41](index=41&type=chunk) [Finance Costs (Management Discussion and Analysis)](index=18&type=section&id=%E8%B2%A1%E5%8B%99%E8%B2%BB%E7%94%A8%20(%E7%AE%A1%E7%90%86%E5%B1%A4%E8%A8%8E%E8%AB%96%E5%8F%8A%E5%88%86%E6%9E%90)) Finance costs for H1 2025 were primarily composed of bank interest expenses and handling fees - During the reporting period, the Group's finance costs were approximately **RMB 2,803,000**, primarily comprising bank interest expenses of approximately **RMB 1,444,000** and other fees such as bank handling charges of approximately **RMB 1,359,000**[42](index=42&type=chunk) [Profit for the Period Attributable to Owners of the Company](index=18&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%E6%9C%9F%E5%85%A7%E6%BA%A2%E5%88%A9) Profit for the period attributable to owners of the company for H1 2025 was **RMB 56.05 million**, with corresponding basic and diluted EPS - For H1 2025, the profit attributable to owners of the company was approximately **RMB 56,049,000**[43](index=43&type=chunk) - Basic and diluted earnings per share attributable to owners of the company were **RMB 2.629 cents** and **RMB 2.598 cents**, respectively[43](index=43&type=chunk) [Liquidity and Financial Resources](index=18&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) As of June 30, 2025, cash and bank balances increased, with positive operating cash flow and significantly higher available bank credit Liquidity and Cash Flow (RMB'000) | Item | June 30, 2025/H1 | Dec 31, 2024/H1 | | :--- | :--- | :--- | | Bank balances and cash | 967,372 | 785,161 | | Net cash inflow from operating activities | 133,683 | N/A (period-end data) | | Net cash outflow from investing activities | 16,866 | N/A (period-end data) | | Net cash inflow from financing activities | 69,078 | N/A (period-end data) | - As of June 30, 2025, the Group had available bank credit facilities of approximately **RMB 828,910,000** (December 31, 2024: **RMB 200,000,000**)[44](index=44&type=chunk) - As of June 30, 2025, the Group had bank guarantees under performance bonds for construction contracts of approximately **RMB 291,031,000** (December 31, 2024: **RMB 270,100,000**)[44](index=44&type=chunk) [Capital Structure](index=18&type=section&id=%E8%B3%87%E6%9C%AC%E6%9E%B6%E6%A7%8B) As of June 30, 2025, share capital remained unchanged, net assets increased, and net current assets significantly improved - As of June 30, 2025, the company's share capital comprised **2,131,598,389 ordinary shares** (December 31, 2024: **2,131,598,389 ordinary shares**)[45](index=45&type=chunk) - As of June 30, 2025, the Group's net assets were approximately **RMB 2,227,641,000** (December 31, 2024: **RMB 2,175,401,000**)[45](index=45&type=chunk) - Net current assets were approximately **RMB 1,061,726,000** (December 31, 2024: **RMB 903,423,000**), and non-current liabilities were approximately **RMB 214,214,000** (December 31, 2024: **RMB 92,921,000**)[45](index=45&type=chunk) [Significant Investments](index=18&type=section&id=%E9%87%8D%E8%A6%81%E6%8A%95%E8%B3%87) The Group completed Penglai site renovation and commenced Zhuhai wharf construction, with an estimated investment exceeding **RMB 200 million** - The renovation of the Group's Penglai site's west plant area has been completed, and the facilities at the Penglai site have been further improved based on market conditions and future development plans[46](index=46&type=chunk) - The Group has also commenced construction of the second phase wharf project at the Zhuhai site, with an estimated total investment exceeding **RMB 200 million**, and the project is expected to be completed in H1 2026[46](index=46&type=chunk) [Foreign Exchange Risk](index=18&type=section&id=%E5%A4%96%E5%BD%99%E9%A2%A8%E9%9A%AA) The Group manages exchange rate risks from RMB against USD and EUR by reducing foreign currency assets and using forward contracts - The Group is exposed to exchange rate risk arising from fluctuations of RMB against other currencies such as USD and EUR[48](index=48&type=chunk) - The Group will endeavor to minimize the amount of assets denominated in USD, EUR, and other currencies, make rolling forecasts of exchange rates, and consider potential exchange rate risks in business contracts[48](index=48&type=chunk) [Pledge of the Group's Assets](index=18&type=section&id=%E6%9C%AC%E9%9B%86%E5%9C%98%E7%9A%84%E8%B3%87%E7%94%A2%E6%8A%B5%E6%8A%BC) As of June 30, 2025, the Group had bank deposits pledged as security for bank loans and guarantees - As of June 30, 2025, the Group had bank deposits of approximately **RMB 68,136,000** (December 31, 2024: **RMB 64,618,000**) pledged as security for bank loans, issuance of guarantees, letters of credit, and bank acceptance bills[49](index=49&type=chunk) [Contingent Liabilities (Management Discussion and Analysis)](index=19&type=section&id=%E6%88%96%E7%84%B6%E8%B2%A0%E5%82%B5%20(%E7%AE%A1%E7%90%86%E5%B1%A4%E8%A8%8E%E8%AB%96%E5%8F%8A%E5%88%86%E6%9E%90)) As of June 30, 2025, the Group had no significant contingent liabilities - As of June 30, 2025, the Group had no significant contingent liabilities[50](index=50&type=chunk) [Capital Management](index=19&type=section&id=%E8%B3%87%E6%9C%AC%E7%AE%A1%E7%90%86) The Group aims to maximize shareholder returns by optimizing its capital gearing ratio, which increased in H1 2025 due to higher bank loans - The Group's primary objectives in capital management are to safeguard its ability to continue as a going concern and to maximize returns to shareholders by optimizing the capital gearing ratio[51](index=51&type=chunk) Capital Gearing Ratio | Item | June 30, 2025 (RMB'000) | Dec 31, 2024 (RMB'000) | | :--- | :--- | :--- | | Loans | 159,736 | 86,458 | | Lease liabilities | 17,441 | 20,486 | | Total equity | 2,227,641 | 2,175,401 | | Capital gearing ratio | 7.95% | 4.92% | - The increase in the capital gearing ratio during the reporting period was primarily due to an increase in bank loans[52](index=52&type=chunk) [Employees and Remuneration Policy](index=19&type=section&id=%E5%83%B1%E5%93%A1%E8%B3%87%E6%96%99%E5%8F%8A%E8%96%AA%E9%85%AC%E6%94%BF%E7%AD%96) As of June 30, 2025, the Group's workforce decreased, with remuneration based on position, responsibilities, performance, and training - As of June 30, 2025, the Group had a total of **1,936 employees** (December 31, 2024: **2,181 employees**), comprising **841 management and technical personnel** and **1,095 skilled workers**[53](index=53&type=chunk) - The Group determines employee remuneration and bonuses based on industry standards, job position, responsibilities, and performance, and contributes to social insurance and housing provident funds for employees[53](index=53&type=chunk) - The Group values employee development, encourages continuous learning, and provides on-the-job training[54](index=54&type=chunk) [Outlook](index=20&type=section&id=2.%20%E5%B1%95%E6%9C%9B) The Group will focus on new energy equipment, enhance EPC capabilities, expand capacity via Zhuhai wharf construction, and manage political risks - The Group will actively promote market business for construction projects, including new energy equipment, explore various cooperation models, and secure more new orders[55](index=55&type=chunk) - The Group will further enhance its technical capabilities, introduce high-end professional talents, improve software and hardware facilities and management systems, boost EPC business capabilities, and continue to promote and develop FPSO module and small-to-medium oil and gas platform EPC businesses[55](index=55&type=chunk) - Within the year, the Group will prioritize the construction of the new wharf at the Zhuhai site and other corresponding facility upgrades to improve production efficiency and expand capacity[55](index=55&type=chunk) [Directors' Report and Corporate Governance](index=21&type=section&id=%E8%91%A3%E4%BA%8B%E6%9C%83%E5%A0%B1%E5%91%8A%E5%8F%8A%E5%85%AC%E5%8F%B8%E7%AE%A1%E6%B2%BB) This section details the interim dividend, directors' rights, securities transactions, and corporate governance adherence [Interim Dividend](index=21&type=section&id=%E4%B8%AD%E6%9C%9F%E8%82%A1%E6%81%AF) The Board recommends an interim dividend of **HKD 0.015 per share** for H1 2025, payable on October 17, 2025 - The Board recommends an interim dividend of **HKD 0.015 per share** for the six months ended June 30, 2025[56](index=56&type=chunk) - The proposed interim dividend will be paid on Friday, October 17, 2025, to shareholders whose names appear on the company's register of members on Friday, September 26, 2025[56](index=56&type=chunk) [Directors' Rights to Acquire Shares or Debentures](index=21&type=section&id=%E8%91%A3%E4%BA%8B%E8%B3%BC%E8%B2%B7%E8%82%A1%E4%BB%BD%E6%88%96%E5%82%B5%E5%88%B8%E7%9A%84%E6%AC%8A%E5%88%A9) Except for share options and awards, no directors or chief executives held other rights to subscribe for company shares or debentures - Save for share options granted to directors in prior years under the company's share option scheme and share awards granted under the company's share award scheme, no directors or chief executives had or were granted or exercised any other rights to subscribe for shares of the company, any of its specific businesses, or their associated corporations during the period[57](index=57&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=21&type=section&id=%E8%B3%BC%E8%B2%B7%E3%80%81%E5%87%BA%E5%94%AE%E5%8F%8A%E8%B4%96%E5%9B%9E%E6%9C%AC%E5%85%AC%E5%8F%B8%E4%B8%8A%E5%B8%82%E8%AD%89%E5%88%B8) Neither the company nor its subsidiaries purchased, sold, or redeemed listed securities, and no treasury shares were held - During the reporting period, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities[58](index=58&type=chunk) - As of June 30, 2025, the company held no treasury shares[58](index=58&type=chunk) [Corporate Governance](index=21&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB) The company generally complied with the HKEX Corporate Governance Code, with a minor deviation for efficiency in financial reporting - The company has adopted the Corporate Governance Code as set out in Appendix C1 to the Listing Rules of the Stock Exchange and is committed to maintaining high standards of corporate governance mechanisms[59](index=59&type=chunk) - For the period ended June 30, 2025, the company has complied with the Corporate Governance Code, except for a deviation from Code Provision D.1.2 (management should provide monthly updates to board members)[60](index=60&type=chunk) - The company submits monthly internal financial statements to Mr. Tang Hui (who is responsible for monitoring the company's financial position) rather than to all Board members, a deviation aimed at enhancing the company's efficiency[60](index=60&type=chunk) [Directors' Securities Transactions](index=21&type=section&id=%E8%91%A3%E4%BA%8B%E7%9A%84%E8%AD%89%E5%88%B8%E4%BA%A4%E6%98%93) The company's directors complied with the Model Code for Securities Transactions by Directors of Listed Issuers - The company's Board of Directors has adopted the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 to the Listing Rules of the Stock Exchange as the code for directors' securities transactions[61](index=61&type=chunk) - The company confirms that all directors complied with the required standards set out in the Model Code during the reporting period[62](index=62&type=chunk) [Audit Committee](index=22&type=section&id=%E5%AF%A9%E6%A0%B8%E5%A7%94%E5%93%A1%E6%9C%83) The Audit Committee reviewed the unaudited interim financial information, deeming it compliant with accounting and disclosure requirements - The company has established an Audit Committee in accordance with Rule 3.21 of the Listing Rules, comprising four independent non-executive directors[63](index=63&type=chunk) - The Audit Committee's primary responsibilities include reviewing the company's financial information, overseeing the Group's financial reporting system, risk management, and internal control systems[63](index=63&type=chunk) - The Audit Committee has reviewed the Group's unaudited interim financial information for the six months ended June 30, 2025, and is of the opinion that such information complies with applicable accounting standards, Listing Rules, and legal requirements, and has made appropriate disclosures[63](index=63&type=chunk)

[Company Overview and Highlights](index=1&type=section&id=I.%20Company%20Overview%20and%20Highlights) This section provides an overview of the company's interim results, highlighting key financial performance and the characteristics of the GEM market [Report Statement and GEM Characteristics](index=1&type=section&id=1.1%20Report%20Statement%20and%20GEM%20Characteristics) This report presents the interim results for the six months ended June 30, 2025, noting GEM's high investment risks for SMEs and the directors' full responsibility for content accuracy - The GEM market is positioned for small and medium-sized enterprises, entailing **higher investment risks** and **market volatility**[2](index=2&type=chunk) - The Stock Exchange disclaims responsibility for the announcement's content, with the company's directors assuming full responsibility for its **accuracy and completeness**[2](index=2&type=chunk) [Financial Highlights](index=2&type=section&id=1.2%20Financial%20Highlights) During the review period, the company reported revenue of approximately **HK$32,469 thousand**, a net profit after tax of approximately **HK$3,662 thousand**, with no dividends declared for the period Key Financial Metrics | Indicator | Amount (HK$'000) | | :--- | :--- | | Revenue | 32,469 | | Net Profit After Tax | 3,662 | | Dividends Declared | None | [Financial Performance and Analysis](index=6&type=section&id=II.%20Financial%20Performance%20and%20Analysis) This section provides a detailed analysis of the company's financial performance, including consolidated statements of profit or loss, comprehensive income, financial position, changes in equity, and cash flows [Condensed Consolidated Statement of Profit or Loss](index=6&type=section&id=2.1%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) For the six months ended June 30, 2025, the company reported revenue of **HK$32,469 thousand**, gross profit of **HK$9,208 thousand**, profit for the period of **HK$3,662 thousand**, and profit attributable to owners of the parent of **HK$3,948 thousand**, with basic and diluted earnings per share of **HK$0.09 cents**, showing significant growth from the prior year Condensed Consolidated Statement of Profit or Loss (HK$'000) | Indicator | 2025 (HK$'000) | 2024 (HK$'000) | Change | | :--- | :--- | :--- | :--- | | Revenue | 32,469 | 31,472 | +3.17% | | Cost of Sales | (23,261) | (22,773) | +2.14% | | Gross Profit | 9,208 | 8,699 | +5.85% | | Other Income and Gains | 11,143 | 4,730 | +135.58% | | Selling and Distribution Expenses | (4,579) | (5,048) | -9.29% | | Administrative Expenses | (17,446) | (16,235) | +7.46% | | Net Reversal of Impairment Loss on Contract Assets | 8,634 | 6,065 | +42.36% | | Finance Costs | (1,531) | (1,817) | -15.74% | | Profit (Loss) Before Tax | 3,835 | (2,803) | Turned from loss to profit | | Profit for the Period | 3,662 | 159 | +2203.14% | | Profit Attributable to Owners of the Parent | 3,948 | 176 | +2143.18% | | Basic and Diluted Earnings Per Share (HK cents) | 0.09 | 0.003 | +2900% | [Condensed Consolidated Statement of Comprehensive Income](index=7&type=section&id=2.2%20Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) For the six months ended June 30, 2025, the company's total comprehensive income for the period was **HK$7,543 thousand**, a significant improvement from the prior year's loss of **HK$1,787 thousand**, primarily driven by positive exchange differences and share of other comprehensive income from associates Condensed Consolidated Statement of Comprehensive Income (HK$'000) | Indicator | 2025 (HK$'000) | 2024 (HK$'000) | Change | | :--- | :--- | :--- | :--- | | Profit for the Period | 3,662 | 159 | +2203.14% | | Exchange Differences Arising from Translation of Overseas Operations | 993 | (1,451) | Turned from negative to positive | | Share of Other Comprehensive Income (Loss) of Associates | 3,110 | (157) | Turned from negative to positive | | Total Comprehensive Income (Loss) for the Period | 7,543 | (1,787) | Turned from loss to profit | [Condensed Consolidated Statement of Financial Position](index=8&type=section&id=2.3%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the company's total assets were **HK$834,237 thousand**, total liabilities were **HK$541,422 thousand**, and net assets were **HK$292,816 thousand**, showing an improvement in net current liabilities and an increase in net assets compared to December 31, 2024 Condensed Consolidated Statement of Financial Position (HK$'000) | Indicator | June 30, 2025 (HK$'000) | December 31, 2024 (HK$'000) | Change | | :--- | :--- | :--- | :--- | | Total Non-Current Assets | 393,950 | 398,982 | -1.26% | | Total Current Assets | 440,285 | 457,820 | -3.83% | | Total Current Liabilities | 446,199 | 467,988 | -4.66% | | Net Current (Liabilities) | (5,914) | (10,168) | Improved by 41.83% | | Net Assets | 292,816 | 284,100 | +3.07% | | Total Equity | 292,816 | 284,100 | +3.07% | [Condensed Consolidated Statement of Changes in Equity](index=10&type=section&id=2.4%20Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) For the six months ended June 30, 2025, the company's total equity increased from **HK$284,100 thousand** to **HK$292,816 thousand**, primarily due to profit for the period, an increase in exchange fluctuation reserve, and the impact of treasury share sales and repurchases Condensed Consolidated Statement of Changes in Equity (HK$'000) | Indicator | January 1, 2025 (HK$'000) | June 30, 2025 (HK$'000) | Change | | :--- | :--- | :--- | :--- | | Total Equity Attributable to Owners of the Parent | 266,042 | 274,775 | +3.28% | | Non-Controlling Interests | 18,058 | 18,042 | -0.09% | | Total Equity | 284,100 | 292,816 | +3.07% | - Profit for the period was **HK$3,948 thousand**, exchange fluctuation reserve increased by **HK$3,611 thousand**, sale of treasury shares contributed **HK$1,345 thousand**, and share repurchases reduced equity by **HK$171 thousand**[25](index=25&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=11&type=section&id=2.5%20Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) For the six months ended June 30, 2025, the company experienced a net cash outflow from operating activities of **HK$9,190 thousand**, a net cash inflow from investing activities of **HK$2,212 thousand**, and a net cash inflow from financing activities of **HK$1,175 thousand**, resulting in cash and cash equivalents of **HK$46,353 thousand** at period-end, a decrease from the beginning of the period Condensed Consolidated Statement of Cash Flows (HK$'000) | Indicator | 2025 (HK$'000) | 2024 (HK$'000) | Change | | :--- | :--- | :--- | :--- | | Net Cash from (Used in) Operating Activities | (9,190) | (14,331) | Improved by 35.88% | | Net Cash from Investing Activities | 2,212 | 937 | +136.07% | | Net Cash from (Used in) Financing Activities | 1,175 | – | Turned from negative to positive | | Net Increase (Decrease) in Cash and Cash Equivalents | (5,803) | (13,394) | Improved by 56.67% | | Cash and Cash Equivalents at End of Period | 46,353 | 53,110 | -12.72% | [Financial Review](index=2&type=section&id=2.6%20Financial%20Review) This section outlines the company's financial performance for the six months ended June 30, 2025, showing a slight revenue increase, significant profit growth driven by improved gross margin, increased other income, and contributions from associates, alongside reduced selling expenses and higher administrative costs - Revenue slightly increased by **3.17%** year-on-year, reaching **HK$32,469 thousand**[7](index=7&type=chunk) - Profit for the period significantly grew to **HK$3,662 thousand** from **HK$159 thousand** in the prior year, primarily driven by an increase in gross margin, other income, and share of profits from associates/joint ventures[8](index=8&type=chunk) - Other income and gains surged by **135.58%** to **HK$11,143 thousand**, mainly due to the recognition of **HK$6,510 thousand** in government subsidies[8](index=8&type=chunk) - Selling and distribution expenses decreased year-on-year, while administrative expenses rose by **7.46%** due to increased legal service fees[8](index=8&type=chunk) [Revenue and Gross Profit](index=16&type=section&id=2.6.1%20Revenue%20and%20Gross%20Profit) For the six months ended June 30, 2025, the company's total revenue was **HK$32,469 thousand**, comprising **HK$29,687 thousand** from contracts with customers and **HK$2,782 thousand** from rental income, with shallow geothermal energy business contributing the majority of contract revenue from construction services in mainland China Revenue by Source (HK$'000) | Revenue Source | 2025 (HK$'000) | 2024 (HK$'000) | Change | | :--- | :--- | :--- | :--- | | Contract Revenue with Customers | 29,687 | 31,252 | -5.01% | | Rental Income | 2,782 | 220 | +1164.55% | | **Total Revenue** | **32,469** | **31,472** | **+3.17%** | Contract Revenue by Type (2025) (HK$'000) | Contract Revenue Type (2025) | Shallow Geothermal Energy (HK$'000) | Air Source/Shallow Geothermal Heat Pumps (HK$'000) | Total (HK$'000) | | :--- | :--- | :--- | :--- | | Sale of Industrial Products | – | 101 | 101 | | Construction Services | 29,586 | – | 29,586 | | **Total Contract Revenue** | **29,586** | **101** | **29,687** | - The shallow geothermal energy segment contributed **HK$29,586 thousand** in construction service revenue, primarily from mainland China, with revenue recognized over time as services are transferred[36](index=36&type=chunk) [Other Income and Gains](index=18&type=section&id=2.6.2%20Other%20Income%20and%20Gains) For the six months ended June 30, 2025, total other income and gains significantly increased to **HK$11,143 thousand** from **HK$4,730 thousand** in the prior year, primarily driven by **HK$6,519 thousand** in subsidy income and **HK$2,283 thousand** in dividend income Other Income and Gains (HK$'000) | Other Income Type | 2025 (HK$'000) | 2024 (HK$'000) | Change | | :--- | :--- | :--- | :--- | | Interest Income | 1,570 | 1,749 | -10.35% | | Dividend Income from Equity Investments | 2,283 | 1,221 | +87.00% | | Subsidy Income | 6,519 | – | New | | Others | 771 | 1,695 | -54.51% | | **Total Other Income** | **11,143** | **4,730** | **+135.58%** | [Selling and Administrative Expenses](index=3&type=section&id=2.6.3%20Selling%20and%20Administrative%20Expenses) For the six months ended June 30, 2025, selling and distribution expenses decreased year-on-year due to enhanced cost control, while administrative expenses increased by **7.46%** primarily due to higher legal service fees - Selling and distribution expenses decreased from **HK$5,048 thousand** to **HK$4,579 thousand**, mainly due to enhanced cost control[8](index=8&type=chunk) - Administrative expenses increased from **HK$16,235 thousand** to **HK$17,446 thousand**, a rise of **HK$1,211 thousand** or **7.46%**, primarily due to increased legal service fees[8](index=8&type=chunk) [Finance Costs](index=19&type=section&id=2.6.4%20Finance%20Costs) For the six months ended June 30, 2025, finance costs amounted to **HK$1,408 thousand**, primarily consisting of interest on lease liabilities, representing a decrease from the prior year Finance Costs (HK$'000) | Finance Cost Type | 2025 (HK$'000) | 2024 (HK$'000) | Change | | :--- | :--- | :--- | :--- | | Interest on Bank and Other Borrowings | – | 392 | -100% | | Interest on Lease Liabilities | 1,408 | 1,425 | -1.19% | | **Total Finance Costs** | **1,408** | **1,817** | **-22.40%** | [Income Tax Expense](index=19&type=section&id=2.6.5%20Income%20Tax%20Expense) The Group is exempt from income tax in the Cayman Islands and BVI, and has no assessable profits for Hong Kong profits tax, while mainland China subsidiaries are subject to a **25%** corporate income tax rate, with some high-tech enterprises enjoying a **15%** preferential rate, resulting in an income tax expense of **HK$173 thousand** for the period, compared to a negative value in the prior year due to over-provision - The Cayman Islands, British Virgin Islands, and Hong Kong are exempt from income tax[42](index=42&type=chunk)[43](index=43&type=chunk) - Mainland China subsidiaries are subject to a **25%** corporate income tax rate, with high-tech enterprises enjoying a **15%** preferential tax rate[43](index=43&type=chunk)[44](index=44&type=chunk) Income Tax Expense (HK$'000) | Income Tax Expense | 2025 (HK$'000) | 2024 (HK$'000) | Change | | :--- | :--- | :--- | :--- | | Current – Mainland China | 173 | 53 | +226.42% | | Over-provision in Prior Years | – | (3,015) | Turned from negative to zero | | **Total Tax Charged for the Period** | **173** | **(2,962)** | **Turned from negative to positive** | [Profit for the Period and Earnings Per Share](index=20&type=section&id=2.6.6%20Profit%20for%20the%20Period%20and%20Earnings%20Per%20Share) For the six months ended June 30, 2025, profit for the period was **HK$3,662 thousand**, profit attributable to ordinary equity holders of the parent was **HK$3,948 thousand**, and basic and diluted earnings per share were **HK$0.09 cents**, representing a significant improvement from the prior year, with no dividends declared for the period Profit and Earnings Per Share (HK$'000) | Indicator | 2025 (HK$'000) | 2024 (HK$'000) | Change | | :--- | :--- | :--- | :--- | | Profit (Loss) Attributable to Ordinary Equity Holders of the Parent | 3,948 | 176 | +2143.18% | | Basic and Diluted Earnings Per Share (HK cents) | 0.09 | 0.003 | +2900% | - No dividends were declared for the period[47](index=47&type=chunk) [Operating Segments and Business Development](index=12&type=section&id=III.%20Operating%20Segments%20and%20Business%20Development) This section details the company's principal activities and operating segments, including shallow geothermal energy, air source/shallow geothermal heat pumps, property investment, and securities trading, along with a review of business strategies and future outlook [Company Information and Principal Activities](index=12&type=section&id=3.1%20Company%20Information%20and%20Principal%20Activities) China Everbright Greentech Group Limited is incorporated in the Cayman Islands, listed on the Hong Kong Stock Exchange GEM, with principal activities including providing, installing, and maintaining shallow geothermal energy utilization systems, selling air source/shallow geothermal heat pump products, property investment, and securities trading - The company is incorporated in the Cayman Islands, with shares listed on the GEM of the Hong Kong Stock Exchange[27](index=27&type=chunk) - Principal activities include shallow geothermal energy systems, air source/shallow geothermal heat pump product sales, property investment, and securities trading[29](index=29&type=chunk) [Operating Segment Information](index=13&type=section&id=3.2%20Operating%20Segment%20Information) The company is organized into four operating segments: shallow geothermal energy, air source/shallow geothermal heat pumps, property investment and development, and securities investment and trading, with management monitoring segment performance for resource allocation and evaluation - The company is divided into four operating segments: shallow geothermal energy, air source/shallow geothermal heat pumps, property investment and development, and securities investment and trading[32](index=32&type=chunk) - Segment results are assessed based on adjusted profit/loss before tax, excluding profit/loss from associates/joint ventures, interest income, certain other income, administrative costs, and non-lease finance costs[30](index=30&type=chunk) [Segment Revenue and Results](index=14&type=section&id=3.2.1%20Segment%20Revenue%20and%20Results) For the six months ended June 30, 2025, the shallow geothermal energy segment contributed the majority of external revenue and segment results, while the property investment and development segment showed significant revenue growth, and the securities investment and trading segment generated no revenue Segment Revenue and Results (HK$'000) | Segment | 2025 Revenue (HK$'000) | 2024 Revenue (HK$'000) | 2025 Results (HK$'000) | 2024 Results (HK$'000) | | :--- | :--- | :--- | :--- | :--- | | Shallow Geothermal Energy | 29,586 | 30,617 | 10,059 | 9,185 | | Air Source/Shallow Geothermal Heat Pumps | 101 | 635 | 18 | 635 | | Property Investment and Development | 2,782 | 220 | 1,254 | 220 | | Securities Investment and Trading | – | – | – | – | | **Total (External Sales)** | **32,469** | **31,472** | **11,331** | **9,500** | - Shallow geothermal energy segment revenue slightly decreased, but segment results improved, while property investment and development segment revenue and results both significantly increased[33](index=33&type=chunk) [Segment Assets and Liabilities](index=15&type=section&id=3.2.2%20Segment%20Assets%20and%20Liabilities) As of June 30, 2025, the shallow geothermal energy segment and property investment and development segment constituted the primary components of assets and liabilities, with both total segment assets and liabilities decreasing compared to June 30, 2024 Segment Assets and Liabilities (HK$'000) | Segment | June 30, 2025 Assets (HK$'000) | June 30, 2024 Assets (HK$'000) | June 30, 2025 Liabilities (HK$'000) | June 30, 2024 Liabilities (HK$'000) | | :--- | :--- | :--- | :--- | :--- | | Shallow Geothermal Energy | 268,356 | 569,572 | 275,206 | 587,798 | | Air Source/Shallow Geothermal Heat Pumps | 6 | 7,955 | – | 23,107 | | Property Investment and Development | 487,891 | 485,484 | 87,253 | 331,659 | | Securities Investment and Trading | 60,426 | 314,484 | 8,990 | 9,870 | | **Total Segment Assets** | **816,679** | **1,377,496** | **371,449** | **952,434** | - Shallow geothermal energy segment assets and liabilities significantly decreased, and securities investment and trading segment assets also notably declined[34](index=34&type=chunk) [Contract Status](index=3&type=section&id=3.3%20Contract%20Status) As of June 30, 2025, the Group's value of contracts on hand was approximately **HK$80,000 thousand**, a significant increase from the prior year Value of Contracts on Hand (HK$'000) | Indicator | June 30, 2025 (HK$'000) | June 30, 2024 (HK$'000) | Change | | :--- | :--- | :--- | :--- | | Value of Contracts on Hand | 80,000 | 50,000 | +60% | [Business Review and Outlook](index=4&type=section&id=3.4%20Business%20Review%20and%20Outlook) During the review period, the Group improved gross margin through cost control and optimized design, actively promoting an exclusive agency system for geothermal heat pump projects, focusing on core business, strengthening project and financial management, and benefiting from national policy support for renewable energy - The Group achieved an increase in gross margin by rigorously controlling costs and optimizing design[17](index=17&type=chunk) - An exclusive agency system for high-efficiency clean heating projects using geothermal heat pumps was implemented to expand market reach[18](index=18&type=chunk) - The Group focused on its core business, strengthened project management and independent accounting systems, and enhanced financial management to mitigate risks[18](index=18&type=chunk) - National policies, such as the "Guiding Opinions on Vigorously Implementing Renewable Energy Substitution Actions," provide favorable support for the Group's promotion of shallow geothermal energy[18](index=18&type=chunk) - The Board of Directors led the Group to achieve a "U-shaped reversal," promoting the high-quality development of the emerging industry of geothermal heat pump clean heating and cooling integration in northern winters[19](index=19&type=chunk) [Financial Position and Management](index=3&type=section&id=IV.%20Financial%20Position%20and%20Management) This section covers the company's liquidity, capital structure, gearing ratio, asset pledges, contingent liabilities, material acquisitions and disposals, financial policies, and trade receivables and payables [Liquidity, Capital Structure, and Gearing Ratio](index=3&type=section&id=4.1%20Liquidity%2C%20Capital%20Structure%2C%20and%20Gearing%20Ratio) As of June 30, 2025, the Group's net current liabilities improved to approximately **HK$5,914 thousand** from **HK$10,168 thousand** on December 31, 2024, with cash and cash equivalents of **HK$46,353 thousand** and a gearing ratio decreasing to **46%** from **49%** Liquidity, Capital Structure, and Gearing Ratio (HK$'000) | Indicator | June 30, 2025 (HK$'000) | December 31, 2024 (HK$'000) | Change | | :--- | :--- | :--- | :--- | | Net Current Liabilities | 5,914 | 10,168 | Improved by 41.83% | | Cash and Cash Equivalents | 46,353 | 52,586 | -11.95% | | Gearing Ratio | 46% | 49% | Decreased by 3 percentage points | [Pledge of Assets and Contingent Liabilities](index=4&type=section&id=4.2%20Pledge%20of%20Assets%20and%20Contingent%20Liabilities) As of June 30, 2025, the Group had no pledge of assets or significant contingent liabilities - As of June 30, 2025, the Group had no pledge of assets[12](index=12&type=chunk) - As of June 30, 2025, the Group had no significant contingent liabilities[15](index=15&type=chunk) [Material Acquisitions and Disposals](index=4&type=section&id=4.3%20Material%20Acquisitions%20and%20Disposals) For the six months ended June 30, 2025, the Group did not engage in any material acquisition or disposal activities - During the review period, the Group had no material acquisitions or disposals[13](index=13&type=chunk) [Financial Policy](index=4&type=section&id=4.4%20Financial%20Policy) The Group adopts a conservative treasury policy, holding all monetary funds in Hong Kong dollars or the local currency of its subsidiaries' operating locations to minimize foreign exchange risk - A conservative treasury policy is adopted, holding funds in HKD or local currencies to minimize foreign exchange risk[14](index=14&type=chunk) [Trade and Other Receivables and Payables](index=21&type=section&id=4.5%20Trade%20and%20Other%20Receivables%20and%20Payables) This section details the aging analysis of trade receivables and payables, noting the company's strict monitoring of outstanding receivables with no significant credit risk concentration, and trade payables and bills payable generally settled within six months - The company primarily conducts transactions with customers on credit, typically with a three-month credit period, and strictly monitors outstanding receivables[51](index=51&type=chunk) - Trade receivables are non-interest bearing and have no significant concentration of credit risk[51](index=51&type=chunk) - Trade payables and bills payable are interest-free and generally settled within six months[53](index=53&type=chunk) [Trade Receivables](index=21&type=section&id=4.5.1%20Trade%20Receivables) As of June 30, 2025, net trade receivables amounted to **HK$3,174 thousand**, a decrease from **HK$4,811 thousand** on December 31, 2024, with the highest proportion of receivables aged within 90 days Trade Receivables (HK$'000) | Indicator | June 30, 2025 (HK$'000) | December 31, 2024 (HK$'000) | Change | | :--- | :--- | :--- | :--- | | Net Trade Receivables | 3,174 | 4,811 | -34.02% | Trade Receivables Aging Analysis (HK$'000) | Aging | June 30, 2025 (HK$'000) | December 31, 2024 (HK$'000) | | :--- | :--- | :--- | | Within 90 days | 2,433 | 3,997 | | 91 to 180 days | 89 | 116 | | 181 to 365 days | 297 | 282 | | Over 365 days | 355 | 416 | | **Total** | **3,174** | **4,811** | [Trade Payables and Bills Payable](index=22&type=section&id=4.5.2%20Trade%20Payables%20and%20Bills%20Payable) As of June 30, 2025, total trade payables and bills payable amounted to **HK$119,596 thousand**, a decrease from **HK$139,369 thousand** on December 31, 2024, with the largest proportion of payables aged over 365 days Trade Payables and Bills Payable (HK$'000) | Indicator | June 30, 2025 (HK$'000) | December 31, 2024 (HK$'000) | Change | | :--- | :--- | :--- | :--- | | Trade Payables and Bills Payable | 119,596 | 139,369 | -14.20% | Trade Payables and Bills Payable Aging Analysis (HK$'000) | Aging | June 30, 2025 (HK$'000) | December 31, 2024 (HK$'000) | | :--- | :--- | :--- | | Within 90 days | 15,271 | 22,968 | | 91 to 180 days | 13,587 | 13,867 | | 181 to 365 days | 11,884 | 17,048 | | Over 365 days | 78,854 | 85,486 | | **Total** | **119,596** | **139,369** | [Share Capital and Capital Commitments](index=22&type=section&id=4.6%20Share%20Capital%20and%20Capital%20Commitments) As of June 30, 2025, the company's issued and fully paid ordinary share capital remained at **HK$353,043 thousand**, consistent with December 31, 2024, with no significant capital commitments at the end of the reporting period Share Capital (HK$'000) | Indicator | June 30, 2025 (HK$'000) | December 31, 2024 (HK$'000) | | :--- | :--- | :--- | | Issued and Fully Paid Ordinary Share Capital | 353,043 | 353,043 | - At the end of the reporting period, the Group had no significant capital commitments[55](index=55&type=chunk) [Shareholders and Corporate Governance](index=24&type=section&id=V.%20Shareholders%20and%20Corporate%20Governance) This section details the interests of directors, chief executives, and substantial shareholders, outlines share schemes, directors' securities transactions, corporate governance code compliance, audit committee activities, and updates on directors' information, as well as share repurchases and sales of treasury shares [Directors' and Chief Executive's Interests](index=24&type=section&id=5.1%20Directors%27%20and%20Chief%20Executive%27s%20Interests) As of June 30, 2025, several directors and the chief executive held long positions in the company's shares, with Mr. Xu Shengheng and his spouse holding **15.99%**, Ms. Liu Ening holding **5.59%**, and Mr. Zhang Yiying and his controlled corporations holding **5.65%**, while Mr. Wu Qiang resigned as an independent non-executive director on March 28, 2025 Directors' and Chief Executive's Interests in Shares | Name | Number of Shares Held | % of Voting Shares | | :--- | :--- | :--- | | Mr. Xu Shengheng (Beneficial Owner + Spouse's Interest) | 723,153,400 | 15.99% | | Ms. Liu Ening (Beneficial Owner) | 253,000,000 | 5.59% | | Mr. Zhang Yiying (Beneficial Owner + Controlled Corporation's Interest) | 255,504,000 | 5.65% | | Mr. Wu Qiang (Beneficial Owner) | 5,000,000 | 0.11% | | Mr. Guan Chenghua (Beneficial Owner) | 5,000,000 | 0.11% | | Mr. Yang Mingzhong (Beneficial Owner) | 1,760,000 | 0.04% | - Mr. Wu Qiang resigned as an independent non-executive director on **March 28, 2025**[61](index=61&type=chunk) - Other directors, Mr. Liao Yuan, Mr. Dai Qi, Mr. Zhang Honghai, and Mr. Guo Guanglei, held no interests in the company's shares at period-end[62](index=62&type=chunk) [Substantial Shareholders' and Other Persons' Interests](index=25&type=section&id=5.2%20Substantial%20Shareholders%27%20and%20Other%20Persons%27%20Interests) As of June 30, 2025, China Everbright Greentech (Hong Kong) Investment Co., Ltd. and its parent, China Everbright Greentech Group Co., Ltd., were the largest substantial shareholders, holding **26.30%** of the company's shares, with Ms. Lu Haiwen, Mr. Wang Zhiyu, and Ms. Wang Xinmeng holding shares through spouse's interests Substantial Shareholders' and Other Persons' Interests in Shares | Name | Number of Shares Held | % of Voting Shares | | :--- | :--- | :--- | | China Everbright Greentech (Hong Kong) Investment Co., Ltd. | 1,190,000,000 | 26.30% | | China Everbright Greentech Group Co., Ltd. | 1,190,000,000 | 26.30% | | Ms. Lu Haiwen (Spouse's Interest) | 723,153,400 | 15.99% | | Mr. Wang Zhiyu (Spouse's Interest) | 253,000,000 | 5.59% | | Ms. Wang Xinmeng (Spouse's Interest) | 255,504,000 | 5.65% | | Universal Zone Limited | 250,000,000 | 5.53% | - The company is not aware of any substantial shareholders or other persons holding long or short positions in equity derivatives such as share options, warrants, or convertible bonds[66](index=66&type=chunk)[67](index=67&type=chunk) [Share Schemes](index=26&type=section&id=5.3%20Share%20Schemes) The company adopted an Option Scheme and a Share Award Scheme on September 6, 2024, both valid for ten years, with no options or awarded shares granted under these schemes as of June 30, 2025, and a total of **452,692,516 shares** available for grant under each scheme - The 2024 Option Scheme and Share Award Scheme were adopted on **September 6, 2024**, with a ten-year validity period[68](index=68&type=chunk) - As of June 30, 2025, no options or awarded shares have been granted under these schemes[70](index=70&type=chunk) - The total number of shares available for grant under each scheme is **452,692,516 shares**[70](index=70&type=chunk) [Directors' Securities Transactions](index=28&type=section&id=5.4%20Directors%27%20Securities%20Transactions) The company has not adopted a code for directors' securities transactions, but inquiries confirmed that no directors failed to comply with the GEM Listing Rules' dealing restrictions and code of conduct for directors' securities transactions during the review period - The company has not adopted a code for directors' securities transactions, but directors complied with the GEM Listing Rules' dealing restrictions during the review period[74](index=74&type=chunk) [Corporate Governance Code](index=28&type=section&id=5.5%20Corporate%20Governance%20Code) During the review period, the company complied with all code provisions of Appendix C1 to the GEM Listing Rules' Corporate Governance Code, except for Mr. Liao Yuan, a non-executive director, who did not attend the Annual General Meeting due to other commitments - The company complied with the Corporate Governance Code, except for non-executive director Mr. Liao Yuan's absence from the Annual General Meeting[75](index=75&type=chunk) [Audit Committee](index=27&type=section&id=5.6%20Audit%20Committee) The Audit Committee, composed of three independent non-executive directors, is responsible for reviewing and overseeing the Group's financial reporting, risk management, and internal control systems; Mr. Guo Guanglei was appointed to the committee following Mr. Wu Qiang's resignation, and the committee has reviewed these interim results - The Audit Committee comprises three independent non-executive directors, responsible for financial reporting, risk management, and internal controls[73](index=73&type=chunk) - Following Mr. Wu Qiang's resignation, Mr. Guo Guanglei was appointed as an independent non-executive director and joined the Audit Committee[73](index=73&type=chunk) [Update on Directors' Information](index=28&type=section&id=5.7%20Update%20on%20Directors%27%20Information) Mr. Wu Qiang resigned as an independent non-executive director and from several committee positions on March 28, 2025, and Mr. Guo Guanglei was appointed to succeed him on the same date - Mr. Wu Qiang resigned as an independent non-executive director and from related committee positions on **March 28, 2025**[78](index=78&type=chunk) - Mr. Guo Guanglei was appointed as an independent non-executive director and chairman of related committees on **March 28, 2025**[78](index=78&type=chunk) [Repurchase, Redemption or Sale of the Company's Listed Securities](index=28&type=section&id=5.8%20Repurchase%2C%20Redemption%20or%20Sale%20of%20the%20Company%27s%20Listed%20Securities) During the review period, the company repurchased a total of **4,080,000 shares** under the 2024 and 2025 repurchase mandates for a total consideration of **HK$170,864**, with an additional **6,112,000 shares** repurchased post-period, and **22,416,000 treasury shares** sold to an independent third party on April 17, 2025, with proceeds used for general working capital - Directors were granted a 2025 repurchase mandate to repurchase up to **10%** of the total issued shares[79](index=79&type=chunk) - For the six months ended June 30, 2025, the company repurchased a total of **4,080,000 shares** for a total consideration of **HK$170,864**[80](index=80&type=chunk) - Subsequent to June 30, 2025, and up to the announcement date, the company repurchased an additional **6,112,000 shares** for a total consideration of **HK$244,048**[80](index=80&type=chunk) - On April 17, 2025, the company sold **22,416,000 treasury shares** to an independent third party at a premium of approximately **53.85%** to the market price, with net proceeds used for general working capital[82](index=82&type=chunk) [Share Repurchases](index=29&type=section&id=5.8.1%20Share%20Repurchases) During the review period, the company repurchased a total of **4,080,000 shares** under the 2024 and 2025 repurchase mandates for a total consideration of **HK$170,864**, with an additional **6,112,000 shares** repurchased post-period, held as treasury shares to provide financial flexibility Share Repurchases (HKD) | Repurchase Period | Number of Shares Repurchased | Total Consideration (HKD) | | :--- | :--- | :--- | | January 2025 (2024 Mandate) | 1,064,000 | 47,704 | | May 2025 (2025 Mandate) | 1,744,000 | 73,352 | | June 2025 (2025 Mandate) | 1,272,000 | 49,808 | | **Total During Review Period** | **4,080,000** | **170,864** | | July 2025 (Post-Period) | 6,112,000 | 244,048 | - Repurchased shares are held as treasury shares to provide financial flexibility, potentially for resale or share schemes[81](index=81&type=chunk) [Sale of Treasury Shares](index=30&type=section&id=5.8.2%20Sale%20of%20Treasury%20Shares) On April 17, 2025, the company sold **22,416,000 treasury shares** to an independent third party, Mr. Long Yun, at **HK$0.06 per share**, representing a premium of approximately **53.85%** to the market price, with net proceeds of approximately **HK$300,651.01** allocated for general working capital - On April 17, 2025, **22,416,000 treasury shares** were sold at **HK$0.06 per share**, representing a premium of approximately **53.85%** to the market price[82](index=82&type=chunk) - Net proceeds from the sale, approximately **HK$300,651.01**, will be used for general working capital[82](index=82&type=chunk) Treasury Shares (Shares) | Indicator | January 1, 2025 (Shares) | June 30, 2025 (Shares) | Date of this Announcement (Shares) | | :--- | :--- | :--- | :--- | | Number of Treasury Shares | 21,352,000 | 3,016,000 | 9,128,000 | [Notes and Supplementary Information](index=12&type=section&id=VI.%20Notes%20and%20Supplementary%20Information) This section provides details on the basis of preparation and accounting policies, related party transactions, fair value of financial instruments, competition and conflicts of interest, amendments to the company's memorandum and articles of association, and the change of auditor's registered name [Basis of Preparation and Accounting Policies](index=12&type=section&id=6.1%20Basis%20of%20Preparation%20and%20Accounting%20Policies) The condensed consolidated interim financial statements are prepared in Hong Kong dollars in accordance with Chapter 18 of the GEM Listing Rules and HKAS 34, with accounting policies consistent with the 2024 annual financial statements, and newly adopted HKFRSs effective from January 1, 2025, having no significant impact on the current period's results - Financial statements are prepared in Hong Kong dollars in accordance with Chapter 18 of the GEM Listing Rules and HKAS 34[28](index=28&type=chunk) - Accounting policies are consistent with the prior year, and newly adopted Hong Kong Financial Reporting Standards have no significant impact on the current period's results[28](index=28&type=chunk) [Related Party Transactions](index=22&type=section&id=6.2%20Related%20Party%20Transactions) The Group engaged in rental expense transactions with related parties during the review period and disclosed the total remuneration paid to key management personnel Related Party Transactions (HK$'000) | Transaction Type | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | | Rental Expenses to Related Parties | 330 | 330 | Key Management Personnel Remuneration (HK$'000) | Remuneration Type | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | | Short-term Employee Benefits | 3,956 | 3,820 | | **Total Remuneration Paid to Key Management Personnel** | **3,956** | **3,820** | [Fair Value of Financial Instruments](index=23&type=section&id=6.3%20Fair%20Value%20of%20Financial%20Instruments) This section presents the carrying amounts and fair values of the Group's financial instruments, noting that the carrying amounts of trade receivables, equity investments designated at fair value through other comprehensive income, and financial assets at fair value through profit or loss are approximate to their fair values Financial Assets Carrying and Fair Values (HK$'000) | Financial Asset | June 30, 2025 Carrying Amount (HK$'000) | December 31, 2024 Carrying Amount (HK$'000) | | :--- | :--- | :--- | | Trade Receivables, Non-Current Portion | 46,921 | 55,332 | | Equity Investments Designated at Fair Value Through Other Comprehensive Income | 55,500 | 54,661 | | Financial Assets at Fair Value Through Profit or Loss | 4,461 | 4,895 | | **Total** | **106,882** | **114,888** | - The carrying amounts of financial instruments are reasonably approximate to their fair values[59](index=59&type=chunk) [Competition and Conflicts of Interest](index=27&type=section&id=6.4%20Competition%20and%20Conflicts%20of%20Interest) None of the company's directors, substantial shareholders, or their respective associates are engaged in any business that competes or may compete with the Group's business, nor do they have any other conflicts of interest with the Group - Directors, substantial shareholders, and their associates have no competing business or conflicts of interest with the Group[72](index=72&type=chunk) [Amendments to the Company's Memorandum and Articles of Association](index=30&type=section&id=6.5%20Amendments%20to%20the%20Company%27s%20Memorandum%20and%20Articles%20of%20Association) At the Annual General Meeting on May 22, 2025, a special resolution was passed to approve and adopt new Memorandum and Articles of Association, primarily granting the company the power to hold and deal with treasury shares and incorporating administrative amendments for clarity - The new Articles grant the company the power to hold and deal with treasury shares and include administrative amendments for enhanced clarity[84](index=84&type=chunk) [Change of Auditor's Registered Name](index=31&type=section&id=6.6%20Change%20of%20Auditor's%20Registered%20Name) Effective June 30, 2025, the company's auditor's registered name changed from "CL Partners CPA Limited" to "Rongcheng (Hong Kong) CPA Limited" - The auditor's name has changed to "Rongcheng (Hong Kong) CPA Limited"[85](index=85&type=chunk)

[Company Overview](index=1&type=section&id=I.%20Company%20Overview) [Overview of the Reporting Period](index=1&type=section&id=1.1%20Overview%20of%20the%20Reporting%20Period) Shanghai Huige Environmental Technology Group Co., Ltd. (the Group) faced severe challenges in H1 2025, with significant declines in both revenue and profit, and the Board does not recommend an interim dividend Performance Highlights | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 143.5 | 336.5 | -57.4% | | Profit | 6.1 | 82.1 | -92.6% | | Basic Earnings Per Share | 0.18 RMB | 2.75 RMB | -93.5% | - The Board does not recommend an interim dividend for the reporting period[3](index=3&type=chunk) [Company Background](index=13&type=section&id=1.2%20Company%20Background) The Group, established in China in 2017 and restructured in 2022, listed its H-shares on the Hong Kong Stock Exchange in January 2025, primarily providing marine environmental solutions and services - The company was established in China on May 31, 2017, and restructured into a joint-stock company on December 28, 2022[24](index=24&type=chunk) - The company's H-shares were listed on the Hong Kong Stock Exchange on January 9, 2025[24](index=24&type=chunk) - The Group is a supplier of marine desulfurization systems, marine energy-saving devices, marine clean energy supply systems, and marine services[25](index=25&type=chunk) [Operating Performance Analysis](index=2&type=section&id=II.%20Operating%20Performance%20Analysis) [Geographical Market Analysis](index=2&type=section&id=2.1%20Geographical%20Market%20Analysis) The Group's H1 2025 revenue from both mainland China and overseas significantly declined due to long order cycles, geopolitical tensions, tariff fluctuations, and tight shipyard schedules Revenue by Geographical Region | Geographical Region | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | Change (%) | Share of Total Revenue (2025) | Share of Total Revenue (2024) | | :--- | :--- | :--- | :--- | :--- | :--- | | Mainland China | 78,769 | 191,771 | -58.9% | 54.9% | 57.0% | | Overseas | 64,717 | 144,695 | -55.3% | 45.1% | 43.0% | | **Total** | **143,486** | **336,466** | **-57.4%** | **100.0%** | **100.0%** | - The decline in mainland China revenue is primarily due to the longer delivery cycles of most new orders received in early 2025, which have not yet been completed and recognized[4](index=4&type=chunk) - The decrease in overseas revenue is mainly attributed to geopolitical tensions, recent tariff fluctuations, and rising dry dock fees during peak shipyard schedules, leading overseas shipowners to delay non-urgent vessel modifications[5](index=5&type=chunk) [Business Segment Analysis](index=3&type=section&id=2.2%20Business%20Segment%20Analysis) The Group's revenue performance varied across business segments, with significant declines in marine desulfurization systems and energy-saving devices, while clean energy supply systems saw substantial growth and marine services also decreased Revenue by Business Segment | Business Segment | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | Change (%) | Share of Total Revenue (2025) | Share of Total Revenue (2024) | | :--- | :--- | :--- | :--- | :--- | :--- | | Marine Desulfurization Systems | 45,173 | 204,402 | -77.9% | 31.5% | 60.7% | | Marine Energy-Saving Devices | 7,688 | 22,557 | -65.9% | 5.4% | 6.7% | | Marine Clean Energy Supply Systems | 36,316 | 13,288 | 173.3% | 25.3% | 3.9% | | Marine Services | 54,309 | 96,219 | -43.6% | 37.8% | 28.7% | | **Total** | **143,486** | **336,466** | **-57.4%** | **100.0%** | **100.0%** | - Revenue from marine desulfurization systems decreased by **77.9%**, mainly due to new shipbuilding projects being in the installation and commissioning phase without final delivery, and rising dry dock fees in Chinese shipyards reducing shipowners' willingness to undertake modifications[6](index=6&type=chunk) - Revenue from marine clean energy supply systems significantly increased by **173.3%**, benefiting from global growth in new energy shipbuilding orders and the company's R&D investments and cost reductions in clean energy technologies[9](index=9&type=chunk) [Customer Analysis](index=5&type=section&id=2.3%20Customer%20Analysis) The Group's revenue remains highly concentrated among a few major customers, but revenue from Customer D saw significant growth, reflecting the company's strategy to mitigate concentration risk and diversify revenue streams Revenue by Customer | Customer | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | Change (%) | Share of Total Revenue (2025) | Share of Total Revenue (2024) | | :--- | :--- | :--- | :--- | :--- | :--- | | Customer A | 39,316 | 66,876 | -41.2% | 27.4% | 19.9% | | Customer B | 23,522 | 73,237 | -67.9% | 16.4% | 21.8% | | Customer C | 19,452 | 79,292 | -75.5% | 13.6% | 23.6% | | Customer D | 16,465 | 11 | 149,581.8% | 11.5% | 0.0% | | Other Customers | 44,731 | 117,050 | -61.8% | 31.1% | 34.7% | | **Total** | **143,486** | **336,466** | **-57.4%** | **100.0%** | **100.0%** | - Revenue from Customer D significantly increased from **RMB 11 thousand** in H1 2024 to **RMB 16.5 million** in H1 2025[11](index=11&type=chunk) - The company aims to reduce customer concentration risk by developing emerging markets, enriching its product portfolio, and enhancing brand awareness[11](index=11&type=chunk) [R&D Progress](index=6&type=section&id=2.4%20R%26D%20Progress) The Group continues its R&D investments, achieving new advancements in marine energy-saving devices and clean energy supply systems, including the successful development of the Stirling reliquefaction system and optimization of the dual-alkali carbon capture system, alongside securing new patents - The Stirling reliquefaction system was successfully developed, utilizing the inverse Stirling cycle principle to prevent overpressure risks in storage tanks and reduce greenhouse gas emissions[13](index=13&type=chunk) - The dual-alkali carbon capture system has entered its second phase of trials, focusing on acquiring more comprehensive data and experience for solid-liquid separation solutions[15](index=15&type=chunk) - During the reporting period, **6 new patents** were successfully granted (including **3 invention patents**), bringing the cumulative total to **86 patents** (including **45 invention patents**)[14](index=14&type=chunk) [Market Outlook](index=7&type=section&id=2.5%20Market%20Outlook) Despite short-term geopolitical and tariff challenges, the Group remains strategically focused on the sustainable development of the shipping industry, benefiting from long-term demand for IMO regulations and ESG solutions, with significant growth in backlog orders and plans to consolidate its leadership through technological advantages and market penetration - The Group's total backlog orders amounted to **RMB 861.7 million**, an increase of **47.8%** from **RMB 583.1 million** as of December 31, 2024[16](index=16&type=chunk) - The long-term demand trend for marine environmental, social, and governance (ESG) solutions remains unchanged, with mature clean energy technologies and the exemplary role of leading shipping companies benefiting the Group's growth[17](index=17&type=chunk) - The company plans to deepen its penetration into regulation-driven markets like Europe and leverage the capital advantages from its H-share listing (end-of-period cash reserves of **RMB 296.7 million**) to continue strategic R&D investments (this period's **RMB 9.6 million**)[18](index=18&type=chunk)[19](index=19&type=chunk) [Financial Statements](index=9&type=section&id=III.%20Financial%20Statements) [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=9&type=section&id=3.1%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) The Group's revenue and profit significantly declined in H1 2025, with a corresponding decrease in gross profit and earnings per share, reflecting challenging operating conditions Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income | Metric | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Revenue | 143,486 | 336,466 | | Cost of Sales | (99,050) | (193,684) | | Gross Profit | 44,436 | 142,782 | | Profit for the Period | 6,061 | 82,082 | | Profit for the Period Attributable to Owners of the Company | 6,945 | 82,494 | | Basic Earnings Per Share (RMB) | 0.18 | 2.75 | [Condensed Consolidated Statement of Financial Position](index=11&type=section&id=3.2%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's total assets increased, primarily driven by higher financial assets, cash and cash equivalents, and trade and other receivables within current assets, while total equity decreased Condensed Consolidated Statement of Financial Position | Metric | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Non-current Assets | 106,525 | 67,080 | | Current Assets | 716,423 | 386,539 | | Current Liabilities | 138,843 | 293,740 | | Net Current Assets | 247,696 | 422,683 | | Total Equity | 284,232 | 487,823 | | Non-current Liabilities | 30,544 | 41,385 | - Financial assets at fair value through profit or loss within current assets increased from **RMB 19,768 thousand** to **RMB 137,896 thousand**, and cash and bank balances increased from **RMB 133,402 thousand** to **RMB 296,677 thousand**[22](index=22&type=chunk) - Trade and other payables increased from **RMB 87,872 thousand** to **RMB 127,235 thousand**, primarily influenced by dividends payable[23](index=23&type=chunk) [Notes to the Financial Statements](index=13&type=section&id=IV.%20Notes%20to%20the%20Financial%20Statements) [General Information](index=13&type=section&id=4.1%20General%20Information) This section outlines the company's establishment, restructuring, listing history, and primary business scope, confirming that interim financial information is presented in RMB and is unaudited - The company was established in China on May 31, 2017, and restructured into a joint-stock company on December 28, 2022[24](index=24&type=chunk) - The company's H-shares were listed on the Hong Kong Stock Exchange on January 9, 2025[24](index=24&type=chunk) - The Group primarily provides marine desulfurization systems, marine energy-saving devices, marine clean energy supply systems, and marine services[25](index=25&type=chunk) [Basis of Preparation](index=13&type=section&id=4.2%20Basis%20of%20Preparation) The condensed consolidated financial statements are prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" and the disclosure requirements of the Hong Kong Stock Exchange Listing Rules - The condensed consolidated financial statements are prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" and the applicable disclosure requirements of the Listing Rules[26](index=26&type=chunk) [Accounting Policies](index=13&type=section&id=4.3%20Accounting%20Policies) The condensed consolidated financial statements are prepared on a historical cost basis, and amendments to International Financial Reporting Standards have been applied without significant impact on financial position or performance - The condensed consolidated financial statements are prepared on a historical cost basis, with certain properties and financial instruments measured at revalued amounts or fair value[27](index=27&type=chunk) - IAS 21 (Amendment) "Lack of Exchangeability" was first applied during this interim period, but it had no significant impact on the financial position or performance[28](index=28&type=chunk) [Revenue](index=14&type=section&id=4.4%20Revenue) The Group's H1 2025 revenue significantly decreased, mainly due to reduced revenue from marine desulfurization systems and energy-saving devices, though marine clean energy supply systems revenue grew substantially, with all revenue recognized at a point in time Revenue by Service Type | Service Type | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Marine Desulfurization Systems | 45,173 | 204,402 | | Marine Energy-Saving Devices | 7,688 | 22,557 | | Marine Clean Energy Supply Systems | 36,316 | 13,288 | | Marine Services | 54,309 | 96,219 | | **Total** | **143,486** | **336,466** | Revenue by Geographical Region | Geographical Region | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Mainland China | 78,769 | 191,771 | | Overseas | 64,717 | 144,695 | | **Total** | **143,486** | **336,466** | - All revenue is recognized at a point in time[30](index=30&type=chunk) [Segment Information](index=15&type=section&id=4.5%20Segment%20Information) The Group operates as a single operating segment, encompassing marine desulfurization, energy-saving, clean energy solutions, and global marine services, with non-current assets primarily concentrated in mainland China - The chief operating decision-maker considers the Group to have only one operating segment, which includes marine desulfurization solutions, marine energy-saving and carbon reduction solutions, marine clean energy solutions, and global marine services[31](index=31&type=chunk) Non-current Assets by Geographical Region | Geographical Region | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Mainland China | 63,519 | 65,340 | | Overseas | 565 | 168 | | **Total** | **64,084** | **65,508** | [Other Income](index=16&type=section&id=4.6%20Other%20Income) The Group's other income primarily comprises interest income and government grants, with government grants significantly increasing during the reporting period Other Income | Revenue Source | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Interest Income | 2,794 | 2,435 | | Government Grants | 2,376 | 185 | | Other | 3 | 11 | | **Total** | **5,173** | **2,631** | - Government grants are unconditional, approved by local Chinese government authorities, and recognized upon receipt of payment[34](index=34&type=chunk) [Other Gains and Losses](index=16&type=section&id=4.7%20Other%20Gains%20and%20Losses) The Group's other gains and losses shifted from a gain in H1 2024 to a loss in H1 2025, primarily due to net foreign exchange losses Other Gains and Losses | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Net Foreign Exchange (Loss) Gain | (3,175) | 5,470 | | Fair Value Gain on Financial Assets at Fair Value Through Profit or Loss | 1,882 | – | | Loss on Disposal of Equipment | – | (121) | | Other | (4) | (4) | | **Total** | **(1,297)** | **5,345** | [Profit Before Tax for the Period](index=17&type=section&id=4.8%20Profit%20Before%20Tax%20for%20the%20Period) This section details the expenses deducted from (or included in) profit before tax for the period, including depreciation, amortization, and staff costs, reflecting the composition of various operating expenses Items Deducted from (or Included in) Profit Before Tax | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Depreciation of Property, Plant and Equipment | 2,148 | 2,290 | | Depreciation of Right-of-Use Assets | 1,174 | 764 | | Amortization of Other Intangible Assets | 118 | 8 | | Auditor's Remuneration | 1,190 | 894 | | Directors' and Supervisors' Remuneration | 7,035 | 8,472 | | Staff Costs (excluding changes in capitalized amounts) | 18,997 | 25,671 | | Amortization of Contract Costs | 11,669 | 18,982 | | Expenses Recognized as Cost of Inventories (excluding inventory write-downs) | 93,190 | 190,325 | | Inventory (Reversal) Write-down | (90) | 394 | [Income Tax Expense](index=18&type=section&id=4.9%20Income%20Tax%20Expense) The Group's income tax expense primarily consists of China corporate income tax, Singapore income tax, Hong Kong profits tax, and Portugal income tax, with a significant reduction in total income tax expense during the reporting period Income Tax Expense | Tax Type | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | China Corporate Income Tax | 26 | 11,314 | | Singapore Income Tax | 504 | 827 | | Hong Kong Profits Tax | 499 | 305 | | Portugal Income Tax | 18 | – | | Deferred Tax | (595) | 1,290 | | **Total** | **452** | **13,736** | [Earnings Per Share](index=18&type=section&id=4.10%20Earnings%20Per%20Share) Basic earnings per share attributable to owners of the company was RMB 0.18, a significant decrease from the prior year, with no diluted earnings presented as performance conditions for potential ordinary shares were not met Earnings Per Share | Metric | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Profit for the Period Attributable to Owners of the Company | 6,945 | 82,494 | | Weighted Average Number of Ordinary Shares Issued | 39,558 | 30,000 | | Basic Earnings Per Share (RMB) | 0.18 | 2.75 | - As of June 30, 2025, the performance conditions for share options had not been met, so the exercise of share options was not assumed in calculating diluted earnings per share[40](index=40&type=chunk) [Dividends](index=18&type=section&id=4.11%20Dividends) The final dividend for the year ended December 31, 2024, was paid in July 2025, and no interim dividend is recommended for the current interim period - The final dividend of **RMB 1.5** per ordinary share, totaling **RMB 60 million**, for the year ended December 31, 2024, was paid in July 2025[42](index=42&type=chunk) - The Board does not recommend an interim dividend for the six months ended June 30, 2025[80](index=80&type=chunk) [Trade and Other Receivables](index=19&type=section&id=4.12%20Trade%20and%20Other%20Receivables) The Group's total trade and other receivables significantly increased, primarily driven by growth in prepayments and deposits for the acquisition of active vessels, while trade receivables decreased Trade and Other Receivables | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Trade Receivables (net of allowance) | 48,606 | 80,220 | | Prepayments | 146,190 | 31,571 | | Bills Receivable | 5,834 | 9,262 | | Recoverable VAT | 1,734 | 1,413 | | Letter of Credit and Bank Guarantee Deposits | 4,976 | 13,934 | | Deposits for Acquisition of Active Vessels | 39,372 | – | | **Total** | **249,281** | **165,617** | Aging Analysis of Trade Receivables | Aging | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | 0 to 30 days | 21,750 | 47,232 | | 31 to 90 days | 5,405 | 30,035 | | 91 to 180 days | 4,781 | 2,775 | | 181 to 365 days | 16,615 | 151 | | Over 1 year | 55 | 27 | | **Total** | **48,606** | **80,220** | - The Group typically grants customers a credit period of **30 days** or an agreed period[43](index=43&type=chunk) [Trade and Other Payables](index=20&type=section&id=4.13%20Trade%20and%20Other%20Payables) The Group's total trade and other payables increased, primarily due to the recognition of dividends payable, with the aging structure of trade payables indicating a higher proportion of short-term liabilities Trade and Other Payables | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Trade Payables — Third Parties | 43,305 | 40,822 | | Bills Payable | 9,265 | 14,862 | | Accrued Wages | 3,257 | 7,608 | | Other Payables — Third Parties | 7,890 | 17,627 | | Accrued Expenses | 3,253 | 5,776 | | Dividends Payable | 60,000 | – | | Other Taxes Payable | 265 | 1,177 | | **Total** | **127,235** | **87,872** | Aging Analysis of Trade Payables | Aging | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | 0 to 90 days | 32,025 | 8,986 | | 91 to 180 days | 4,227 | 19,394 | | 181 to 365 days | 3,403 | 9,204 | | Over 365 days | 3,650 | 3,238 | | **Total** | **43,305** | **40,822** | - The Group's average credit period for purchases of goods and services is **90 days**[46](index=46&type=chunk) [Financial Review and Analysis](index=22&type=section&id=V.%20Financial%20Review%20and%20Analysis) [Revenue Analysis](index=22&type=section&id=5.1%20Revenue%20Analysis) The Group's H1 2025 revenue significantly decreased by 57.4%, primarily due to geopolitical factors, tariff fluctuations, customer shipyard schedule adjustments, and long order delivery cycles Revenue Performance | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 143.5 | 336.5 | -57.4% | - The decrease in revenue is mainly due to geopolitical tensions and recent tariff fluctuations impacting China's shipbuilding and shipping industries[48](index=48&type=chunk) - Most new orders have longer delivery cycles and have not yet been completed and recognized as revenue[48](index=48&type=chunk) [Gross Profit and Gross Margin Analysis](index=22&type=section&id=5.2%20Gross%20Profit%20and%20Gross%20Margin%20Analysis) The Group's gross profit and gross margin both significantly declined, primarily due to reduced gross profit from marine desulfurization systems, energy-saving devices, and marine services, coupled with an increased revenue share from marine clean energy supply systems and marine services, leading to an overall gross margin decrease Gross Profit and Gross Margin | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Gross Profit | 44.4 | 142.8 | -68.9% | | Gross Margin | 31.0% | 42.4% | -11.4 percentage points | - Gross profit from marine desulfurization systems decreased from **RMB 107.2 million** to **RMB 16.1 million**[49](index=49&type=chunk) - The decline in gross margin is partly due to the increased revenue contribution from marine clean energy supply systems and marine services, where the operating cost ratio is higher as these businesses have not yet achieved full self-production[50](index=50&type=chunk) [Other Income Analysis](index=22&type=section&id=5.3%20Other%20Income%20Analysis) The Group's other income increased by 100% year-on-year, primarily driven by a substantial increase in government grants aimed at incentivizing operating activities Other Income | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Other Income | 5.2 | 2.6 | 100.0% | | Government Grants | 2.4 | 0.2 | 1100.0% | - The increase in government grants is due to more subsidies awarded by local Chinese government authorities to incentivize the Group's operating activities[51](index=51&type=chunk) [Other Gains and Losses Analysis](index=23&type=section&id=5.4%20Other%20Gains%20and%20Losses%20Analysis) The Group's other gains and losses shifted from a gain in the prior year to a loss in the reporting period, primarily due to foreign exchange losses resulting from the depreciation of USD and HKD against RMB Other Gains and Losses | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | | :--- | :--- | :--- | | Other Gains and Losses | (1.3) (Loss) | 5.3 (Gain) | - A net foreign exchange loss of **RMB 3.2 million** was recorded during the reporting period, compared to a net foreign exchange gain of **RMB 5.5 million** in the prior year[52](index=52&type=chunk) - This is mainly due to the depreciation of the USD and HKD against the RMB during the reporting period, leading to significant exchange losses on monetary assets denominated in USD/HKD[52](index=52&type=chunk) [Expense Analysis](index=23&type=section&id=5.5%20Expense%20Analysis) The Group's various expenses generally decreased during the reporting period, with distribution and selling expenses seeing the largest reduction, while finance costs increased [Distribution and Selling Expenses](index=23&type=section&id=5.5.1%20Distribution%20and%20Selling%20Expenses) Distribution and selling expenses significantly decreased by 52.9%, primarily due to a notable reduction in sales commissions Distribution and Selling Expenses | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Distribution and Selling Expenses | 9.7 | 20.6 | -52.9% | | Sales Commissions | 4.4 | 14.8 | -70.3% | [Administrative Expenses](index=23&type=section&id=5.5.2%20Administrative%20Expenses) Administrative expenses slightly decreased by 2.1% Administrative Expenses | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Administrative Expenses | 23.0 | 23.5 | -2.1% | [Research and Development Expenses](index=23&type=section&id=5.5.3%20Research%20and%20Development%20Expenses) Research and development expenses slightly decreased by 5.0% Research and Development Expenses | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Research and Development Expenses | 9.6 | 10.1 | -5.0% | [Impairment Loss Under Expected Credit Loss Model](index=23&type=section&id=5.5.4%20Impairment%20Loss%20Under%20Expected%20Credit%20Loss%20Model) Impairment loss under the expected credit loss model shifted from a loss to a gain, primarily due to a reversal of impairment loss resulting from a decrease in trade receivables balance Impairment Loss (Gain) | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | | :--- | :--- | :--- | | Impairment Loss (Gain) | 1.7 (Gain) | (0.3) (Loss) | - This is mainly due to a decrease in the balance of trade receivables, leading to a reversal of previously recognized impairment losses on trade receivables[56](index=56&type=chunk) [Finance Costs](index=23&type=section&id=5.5.5%20Finance%20Costs) Finance costs significantly increased by 200%, primarily due to an increase in the average balance of bank borrowings Finance Costs | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Finance Costs | 1.2 | 0.4 | 200.0% | - The increase in finance costs is mainly due to a higher average balance of bank borrowings during the reporting period compared to H1 last year[57](index=57&type=chunk) [Income Tax Expense Analysis](index=24&type=section&id=5.6%20Income%20Tax%20Expense%20Analysis) Income tax expense significantly decreased by 96.4%, primarily due to a reduction in profit before tax Income Tax Expense | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Income Tax Expense | 0.5 | 13.7 | -96.4% | - The decrease in income tax expense is mainly due to a lower profit before tax in H1 2025 compared to H1 2024[58](index=58&type=chunk) [Profit for the Period](index=24&type=section&id=5.7%20Profit%20for%20the%20Period) The Group's profit for the period significantly decreased by 92.6% to RMB 6.1 million, reflecting a substantial decline in overall operating performance Profit for the Period | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Profit for the Period | 6.1 | 82.1 | -92.6% | [Balance Sheet Items Analysis](index=24&type=section&id=5.8%20Balance%20Sheet%20Items%20Analysis) The Group's balance sheet items showed several changes during the reporting period, with significant increases in inventories, financial assets, cash and cash equivalents, and trade and other payables, reflecting business expansion and financing activities [Property, Plant and Equipment](index=24&type=section&id=5.8.1%20Property%2C%20Plant%20and%20Equipment) Total property, plant and equipment slightly decreased by 3.6%, primarily due to depreciation recognized during the reporting period Property, Plant and Equipment | Metric | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Property, Plant and Equipment | 45.1 | 46.8 | -3.6% | - The decrease is mainly due to depreciation recognized during the reporting period[60](index=60&type=chunk) [Inventories](index=24&type=section&id=5.8.2%20Inventories) Total inventories significantly increased by 89.5%, primarily due to the rapid growth in new and backlog orders, leading to substantial increases in raw materials, work-in-progress, and finished goods Inventories | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Finished Goods | 43,891 | 24,177 | | Raw Materials and Consumables | 3,898 | 1,143 | | Work-in-Progress | 6,423 | 3,329 | | **Total** | **54,212** | **28,649** | - The increase in inventories is mainly due to the rapid growth in new orders and backlog orders during the reporting period[63](index=63&type=chunk) [Trade and Other Receivables](index=25&type=section&id=5.8.3%20Trade%20and%20Other%20Receivables) Total trade and other receivables increased by 50.5%, primarily driven by growth in prepayments and deposits for the acquisition of active vessels, while trade receivables and letters of credit and bank guarantee deposits decreased Trade and Other Receivables | Metric | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Trade and Other Receivables | 249.3 | 165.6 | 50.5% | - Prepayments increased from **RMB 31.6 million** to **RMB 146.2 million**[66](index=66&type=chunk) - Deposits of **RMB 39.4 million** were paid for the acquisition of active vessels during the reporting period[66](index=66&type=chunk) [Financial Assets at Fair Value Through Profit or Loss](index=25&type=section&id=5.8.4%20Financial%20Assets%20at%20Fair%20Value%20Through%20Profit%20or%20Loss) Financial assets significantly increased by 596.5%, primarily comprising highly liquid, low-risk wealth management products subscribed by the Group Financial Assets at Fair Value Through Profit or Loss | Metric | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Financial Assets | 137.9 | 19.8 | 596.5% | - These financial assets refer to wealth management products subscribed by the Group from independent third parties, including US Treasury bills and other cash and cash equivalents, which are principal-protected and yield-guaranteed[65](index=65&type=chunk) [Restricted Bank Deposits](index=26&type=section&id=5.8.5%20Restricted%20Bank%20Deposits) Restricted bank deposits decreased by 28.0%, mainly due to the release of deposits upon the expiry of certain bank guarantees Restricted Bank Deposits | Metric | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Restricted Bank Deposits | 5.4 | 7.5 | -28.0% | - The decrease is mainly due to the release of deposits upon the expiry of certain bank guarantees[67](index=67&type=chunk) [Cash and Cash Equivalents](index=26&type=section&id=5.8.6%20Cash%20and%20Cash%20Equivalents) Cash and cash equivalents significantly increased by 122.4%, primarily attributable to proceeds from the H-share issuance and bank borrowings Cash and Cash Equivalents | Metric | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Cash and Cash Equivalents | 296.7 | 133.4 | 122.4% | - The increase is mainly attributable to proceeds received from the issuance of the company's H-shares and proceeds from bank borrowings[68](index=68&type=chunk) [Trade and Other Payables](index=26&type=section&id=5.8.7%20Trade%20and%20Other%20Payables) Trade and other payables increased by 44.7%, primarily attributable to dividends payable of RMB 60.0 million Trade and Other Payables | Metric | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Trade and Other Payables | 127.2 | 87.9 | 44.7% | - The increase is mainly attributable to dividends payable of **RMB 60.0 million**, which were subsequently paid in July 2025[71](index=71&type=chunk) [Liquidity and Capital Management](index=27&type=section&id=VI.%20Liquidity%20and%20Capital%20Management) [Liquidity and Financial Resources](index=27&type=section&id=6.1%20Liquidity%20and%20Financial%20Resources) The Group possesses sufficient working capital, with a significant increase in cash and cash equivalents, primarily benefiting from H-share issuance proceeds and bank borrowings Cash and Cash Equivalents | Metric | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Cash and Cash Equivalents | 296.7 | 133.4 | 122.4% | - The increase is mainly due to proceeds received from the issuance of the company's H-shares and an increase in proceeds from bank borrowings during the reporting period[72](index=72&type=chunk) [Order Book](index=27&type=section&id=6.2%20Order%20Book) As of June 30, 2025, the Group's total backlog orders significantly increased, with marine desulfurization systems and marine services contributing the most to the order value Order Book by Business Segment | Business Segment | June 30, 2025 (Number of Orders) | June 30, 2025 (Contract Value, RMB million) | December 31, 2024 (Number of Orders) | December 31, 2024 (Contract Value, RMB million) | | :--- | :--- | :--- | :--- | :--- | | Marine Desulfurization Systems | 185 | 308.9 | 185 | 140.4 | | Marine Energy-Saving Devices | 44 | 29.1 | 32 | 20.9 | | Marine Clean Energy Supply Systems | 96 | 146.7 | 70 | 148.6 | | Marine Services | 637 | 377.0 | 649 | 273.2 | [Debt Position](index=27&type=section&id=6.3%20Debt%20Position) The Group's total debt significantly increased, primarily due to an increase in bank borrowings Debt Position | Metric | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Total Debt | 171.0 | 41.9 | 308.1% | - The increase in debt is mainly due to an increase in bank borrowings[73](index=73&type=chunk) [Pledged Assets](index=27&type=section&id=6.4%20Pledged%20Assets) As of June 30, 2025, the Group had no pledged assets - As of June 30, 2025, the Group had no pledged assets[74](index=74&type=chunk) [Contingent Liabilities](index=28&type=section&id=6.5%20Contingent%20Liabilities) As of June 30, 2025, the Group had no significant contingent liabilities - As of June 30, 2025, the Group had no significant contingent liabilities[76](index=76&type=chunk) [Material Acquisitions and Disposals](index=28&type=section&id=6.6%20Material%20Acquisitions%20and%20Disposals) During the reporting period, the Group did not undertake any material acquisition or disposal transactions - For the period ended June 30, 2025, the Group did not undertake any material acquisition or disposal transactions[77](index=77&type=chunk) [Foreign Exchange Risk](index=28&type=section&id=6.7%20Foreign%20Exchange%20Risk) The Group primarily faces foreign exchange risk from USD-denominated currencies and has established risk management strategies and policies, although a foreign currency hedging policy has not yet been implemented - The Group primarily faces foreign exchange risk from USD-denominated currencies[78](index=78&type=chunk) - The Group has not yet established a foreign currency hedging policy but has developed risk management strategies and policies for foreign exchange forward and option contracts[78](index=78&type=chunk) [Corporate Governance and Employees](index=28&type=section&id=VII.%20Corporate%20Governance%20and%20Employees) [Employees and Remuneration](index=28&type=section&id=7.1%20Employees%20and%20Remuneration) As of June 30, 2025, the Group's employee count increased, with remuneration packages determined based on job responsibilities, position level, professional experience, and performance Employee Count | Metric | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Number of Employees | 126 | 111 | +15 | - Remuneration packages are determined with reference to job responsibilities, position level, professional experience, and work performance[79](index=79&type=chunk) [Interim Dividend](index=28&type=section&id=7.2%20Interim%20Dividend) The Board does not recommend an interim dividend for the six months ended June 30, 2025 - The Board does not recommend an interim dividend for the six months ended June 30, 2025[80](index=80&type=chunk) [Corporate Governance Code](index=28&type=section&id=7.3%20Corporate%20Governance%20Code) The Group is committed to maintaining high standards of corporate governance and has complied with all code provisions set out in Appendix C1 of the Listing Rules - The company has adopted the Corporate Governance Code set out in Appendix C1 of the Listing Rules[81](index=81&type=chunk) - During the reporting period, the company complied with all code provisions set out in Part 2 of the Corporate Governance Code[81](index=81&type=chunk) [Standard Securities Trading Code](index=29&type=section&id=7.4%20Standard%20Securities%20Trading%20Code) The company has adopted the Standard Securities Trading Code set out in Appendix C3 of the Listing Rules, and all directors and supervisors complied with it during the reporting period - The company has adopted the Standard Securities Trading Code set out in Appendix C3 of the Listing Rules[82](index=82&type=chunk) - Upon inquiry, all directors and supervisors confirmed their compliance with the Standard Code throughout the reporting period[82](index=82&type=chunk) [Measures to Avoid Potential Conflicts of Interest](index=29&type=section&id=7.5%20Measures%20to%20Avoid%20Potential%20Conflicts%20of%20Interest) The company has implemented measures to ensure good corporate governance and avoid potential conflicts of interest with controlling shareholders, and independent non-executive directors have confirmed the absence of such conflicts - The company has taken measures to ensure good corporate governance standards and avoid potential conflicts of interest between the Group and its controlling shareholders[83](index=83&type=chunk) - The independent non-executive directors have conducted an annual review and confirmed no knowledge of any conflicts of interest between the Group and its controlling shareholders[83](index=83&type=chunk) [Listing Securities Transactions](index=29&type=section&id=7.6%20Listing%20Securities%20Transactions) From the H-share listing date to the date of this announcement, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities - From the listing date to the date of this announcement, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities[84](index=84&type=chunk) [Review of Interim Results](index=29&type=section&id=7.7%20Review%20of%20Interim%20Results) The company's audit committee has reviewed the Group's interim financial information and deemed it compliant with accounting standards, rules, and regulations - The company's audit committee has reviewed the Group's unaudited condensed consolidated interim financial information for the six months ended June 30, 2025[85](index=85&type=chunk) - The audit committee believes that the interim financial results comply with relevant accounting standards, rules, and regulations, and appropriate disclosures have been made[85](index=85&type=chunk) [Post-Reporting Period Events and Others](index=30&type=section&id=VIII.%20Post-Reporting%20Period%20Events%20and%20Others) [Material Events After Reporting Period](index=30&type=section&id=8.1%20Material%20Events%20After%20Reporting%20Period) Subsequent to the reporting period, the Group adopted a restricted share scheme to incentivize eligible participants, which was approved by shareholders, and the company's non-H share equity was approved for delisting from the National Equities Exchange and Quotations system - The Group adopted a restricted share scheme, allowing for the grant of up to **4,000,000 shares** to eligible participants, which was approved by shareholders on August 1, 2025[86](index=86&type=chunk) - The company's non-H shares were delisted from the National Equities Exchange and Quotations system effective August 27, 2025[88](index=88&type=chunk) [Publication of Interim Results and Report](index=30&type=section&id=8.2%20Publication%20of%20Interim%20Results%20and%20Report) This announcement has been published on the HKEX and company websites, and the interim report will be dispatched to shareholders and published in due course - This announcement has been published on the HKEX website www.hkexnews.hk and the company's website www.contioceangroup.com[89](index=89&type=chunk) - The company's interim report for the period ended June 30, 2025, will be dispatched to shareholders and published on the HKEX and the company's respective websites in due course[89](index=89&type=chunk) [Acknowledgement](index=31&type=section&id=8.3%20Acknowledgement) The Board expresses gratitude to all colleagues for their dedication, focus, loyalty, and integrity, as well as to shareholders, customers, banks, and other business partners for their trust and support - The Board expresses its gratitude to all colleagues for their efforts, dedication, loyalty, and integrity, and to all shareholders, customers, banks, and other business partners for their trust and support[90](index=90&type=chunk) [Board of Directors](index=31&type=section&id=8.4%20Board%20of%20Directors) As of the announcement date, the Board of Directors includes executive directors Mr. Zhou Yang, Mr. Zhao Mingzhu, Mr. Chen Zhiyuan, Mr. Shu Huadong, and Mr. Chen Rui, along with independent non-executive directors Dr. Guan Yanmin, Mr. Zhu Rongyuan, and Ms. Wu Xianqiao - The Board of Directors includes executive directors Mr. Zhou Yang, Mr. Zhao Mingzhu, Mr. Chen Zhiyuan, Mr. Shu Huadong, and Mr. Chen Rui[92](index=92&type=chunk) - Independent non-executive directors include Dr. Guan Yanmin, Mr. Zhu Rongyuan, and Ms. Wu Xianqiao[92](index=92&type=chunk)

: 603993.SH | 03993.HK 2025- • 'S ~ ¢4- ‡%Þ8 « p…Þ"- ®! Ã6Æ9 ÍUª'$8+- ð¢»Õ 重要提示 無 六、 前瞻性陳述的風險聲明 除歷史事實陳述外，本報告涉及未來計劃、發展戰略等前瞻性陳述，受諸多可變因素的影響，未來的實 際結果或發展趨勢可能會與這些前瞻性陳述出現重大差異。本報告中的前瞻性陳述為本公司2025年8月 22日作出，本公司沒有義務或責任對該等前瞻性陳述進行更新，且不構成公司對投資者的實質承諾，投 資者及相關人士均應當對此保持足夠的風險認識，並且應當理解計劃、預測與承諾之間的差異。 敬請投資者注意投資風險。 二零二五中期報告 1 一、 本公司董事會、監事會及董事、監事、高級管理人員保證半年度報告內容的真實性、準確性、完整性， 不存在虛假記載、誤導性陳述或重大遺漏，並承擔個別和連帶的法律責任。 二、 公司全體董事出席董事會會議，審計及風險委員會、監事會已審閱本公司截至2025年6月30日止6個月 的財務報表，認為該報表符合相關會計準則，而本公司已做出適當的相關披露。 三、 本半年度報告未經審計。 四、 公司負責人劉建鋒、主管會計工作負責人陳 ...

[Consolidated Income Statement](index=1&type=section&id=Consolidated%20Income%20Statement) The company's consolidated income statement shows a reduced loss for the period, driven by increased other net gains despite a decline in revenue Key Consolidated Income Statement Data (For the six months ended June 30) | Metric | 2025 (Thousand HKD) | 2024 (Thousand HKD) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 416,238 | 479,998 | -13.3% | | Other income | 60,331 | 76,987 | -21.6% | | Other net gains | 220,817 | 106,678 | +107.0% | | Operating profit | 355,043 | 304,308 | +16.7% | | Net loss on fair value adjustment of investment properties | (470,513) | (515,758) | -8.7% | | Loss before tax | (119,221) | (225,808) | -47.2% | | Loss for the period | (149,165) | (242,859) | -38.6% | | Loss attributable to equity holders of the Company | (150,288) | (239,576) | -37.3% | | Basic and diluted loss per share | (51.9) HK cents | (82.5) HK cents | -37.1% | [Consolidated Statement of Comprehensive Income](index=2&type=section&id=Consolidated%20Statement%20of%20Comprehensive%20Income) The consolidated statement of comprehensive income reflects a significant improvement, moving from a total comprehensive loss to a total comprehensive income, primarily due to positive foreign currency translation adjustments Key Consolidated Statement of Comprehensive Income Data (For the six months ended June 30) | Metric | 2025 (Thousand HKD) | 2024 (Thousand HKD) | Change (%) | | :--- | :--- | :--- | :--- | | Loss for the period | (149,165) | (242,859) | -38.6% | | Other comprehensive income for the period | 202,827 | (84,318) | +340.5% | | Total comprehensive income for the period | 53,662 | (327,177) | +116.4% | | Total comprehensive income attributable to equity holders of the Company | 52,259 | (323,886) | +116.2% | - In the first half of 2025, other comprehensive income turned from a loss in the same period of 2024 to a gain, primarily due to the positive impact of foreign currency translation adjustments, especially exchange differences arising from the translation of financial statements of subsidiaries outside Hong Kong[4](index=4&type=chunk) [Consolidated Statement of Financial Position](index=3&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) The consolidated statement of financial position shows a slight decrease in total equity, with increased liquid assets offset by a significant reduction in interests in an associate Key Consolidated Statement of Financial Position Data (As at June 30) | Metric | 2025 (Thousand HKD) | 2024 (Thousand HKD) | Change (%) | | :--- | :--- | :--- | :--- | | **Assets** | | | | | Investment properties | 12,606,565 | 12,873,724 | -2.1% | | Interests in an associate | 123,259 | 308,586 | -60.1% | | Securities held for trading | 2,355,572 | 2,208,591 | +6.6% | | Cash and bank balances | 2,410,507 | 2,079,994 | +15.9% | | Total assets less current liabilities | 17,601,554 | 17,663,957 | -0.4% | | **Liabilities** | | | | | Total current liabilities | 544,803 | 404,645 | +34.6% | | Total non-current liabilities | 846,630 | 805,609 | +5.1% | | **Equity** | | | | | Total equity attributable to equity holders of the Company | 16,728,405 | 16,833,232 | -0.6% | | Total equity | 16,754,924 | 16,858,348 | -0.6% | - As at June 30, 2025, the Group's current assets significantly increased, mainly driven by growth in securities held for trading and cash and bank balances, but interests in an associate substantially decreased[5](index=5&type=chunk) [Consolidated Statement of Changes in Equity](index=4&type=section&id=Consolidated%20Statement%20of%20Changes%20in%20Equity) The consolidated statement of changes in equity indicates a slight decline in total equity attributable to shareholders, influenced by the loss for the period and share repurchases, partially offset by other comprehensive income - For the six months ended June 30, 2025, total equity attributable to equity holders of the Company was **HKD 16,728,405 thousand**, a slight decrease from **HKD 16,833,232 thousand** as at December 31, 2024, primarily due to the loss for the period and share repurchases, partially offset by other comprehensive income[6](index=6&type=chunk) - Other comprehensive income for the period recorded **HKD 202,827 thousand** in the first half of 2025, compared to a loss of **HKD 84,318 thousand** in the same period of 2024, indicating a positive impact from foreign currency translation adjustments and fair value changes of other investments[6](index=6&type=chunk) - The Company repurchased shares with a par value of **HKD 33 thousand** in the first half of 2025 and paid a premium and transaction costs of **HKD 3,749 thousand**, reflecting share repurchase activities[6](index=6&type=chunk) [Condensed Consolidated Cash Flow Statement](index=5&type=section&id=Condensed%20Consolidated%20Cash%20Flow%20Statement) The condensed consolidated cash flow statement shows an increase in net cash from operating activities and a significant rise in net increase in cash and cash equivalents, despite a substantial decrease in net cash from investing activities Key Condensed Consolidated Cash Flow Statement Data (For the six months ended June 30) | Metric | 2025 (Thousand HKD) | 2024 (Thousand HKD) | Change (%) | | :--- | :--- | :--- | :--- | | Net cash from operating activities | 92,163 | 75,519 | +22.0% | | Net cash from investing activities | 51,373 | 495,636 | -89.6% | | Net cash used in financing activities | (14,469) | (13,696) | +5.6% | | Net increase in cash and cash equivalents | 574,103 | 112,423 | +410.7% | | Cash and cash equivalents at June 30 | 2,178,309 | 1,830,487 | +19.0% | - In the first half of 2025, net cash from operating activities increased, but net cash from investing activities significantly decreased, primarily due to a larger reduction in bank time deposits in the same period of 2024[7](index=7&type=chunk) - The net increase in cash and cash equivalents for the period grew significantly from **HKD 112,423 thousand** in the same period of 2024 to **HKD 574,103 thousand** in 2025, mainly benefiting from improved operating cash flow and positive exchange rate movements[7](index=7&type=chunk) [Notes to the Unaudited Interim Financial Results](index=6&type=section&id=Notes%20to%20the%20Unaudited%20Interim%20Financial%20Results) This section provides detailed notes on the unaudited interim financial results, covering preparation basis, accounting policy changes, revenue breakdown, segment reporting, other income, loss before tax components, income tax, dividends, earnings per share, interests in an associate, and accounts receivables/payables [1. Basis of Preparation](index=6&type=section&id=1.%20Basis%20of%20Preparation) This interim report is prepared in accordance with HKEX Listing Rules and HKAS 34, using consistent accounting policies with the 2024 annual financial statements, and has been reviewed by KPMG and the Audit Committee - The interim financial report is prepared in accordance with the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and Hong Kong Accounting Standard 34 'Interim Financial Reporting'[8](index=8&type=chunk) - The accounting policies are consistent with those adopted in the 2024 annual financial statements, except for changes in accounting policies expected to be reflected in the 2025 annual financial statements[8](index=8&type=chunk) - The interim financial report is unaudited but has been reviewed by KPMG in accordance with Hong Kong Standard on Review Engagements 2410 and by the Company's Audit Committee[9](index=9&type=chunk) [2. Changes in Accounting Policies](index=7&type=section&id=2.%20Changes%20in%20Accounting%20Policies) The Group's adoption of HKFRS amendments in the current period had no material impact on current or prior period results or financial position, and no new standards or interpretations not yet effective were early adopted - Amendments to Hong Kong Financial Reporting Standards issued by the Hong Kong Institute of Certified Public Accountants had no material impact on the Group's current or prior period results and financial position[10](index=10&type=chunk) - The Group has not early adopted any new standards or interpretations that are not yet effective in the current accounting period[11](index=11&type=chunk) [3. Revenue](index=7&type=section&id=3.%20Revenue) The Group's primary businesses are department store operations and property investment, with total revenue decreasing by **13.3%** to **HKD 416,238 thousand** in the first half of 2025, due to declines in both segments - The Group's principal activities are operating department stores and property investment[12](index=12&type=chunk) Revenue by Category (For the six months ended June 30) | Revenue Category | 2025 (Thousand HKD) | 2024 (Thousand HKD) | Change (%) | | :--- | :--- | :--- | :--- | | Department store business (sales of goods, counter sales, consignment sales) | 232,758 | 272,204 | -14.5% | | Property management fees and other rental-related income | 24,368 | 27,652 | -11.9% | | Rental income from investment properties | 159,112 | 180,142 | -11.7% | | **Total Revenue** | **416,238** | **479,998** | **-13.3%** | [4. Segment Reporting](index=8&type=section&id=4.%20Segment%20Reporting) The Group manages and reports its operations through two segments: department store business and property investment; in the first half of 2025, department store revenue and profit declined, while property investment revenue also decreased, yet it remains the primary contributor to the Group's profit [4.1 Segment Results, Assets and Liabilities](index=8&type=section&id=4.1%20Segment%20Results%2C%20Assets%20and%20Liabilities) Department store business revenue decreased by **14.5%** to **HKD 232,758 thousand**, recording an operating loss of **HKD 38,514 thousand**; property investment revenue decreased by **13.8%** to **HKD 226,766 thousand**, with a segment profit of **HKD 158,810 thousand**, and its assets significantly exceed those of the department store business - The Group manages its businesses through two segments: department store business and property investment[13](index=13&type=chunk) Segment Results (For the six months ended June 30) | Metric | Department Store Business 2025 (Thousand HKD) | Department Store Business 2024 (Thousand HKD) | Property Investment 2025 (Thousand HKD) | Property Investment 2024 (Thousand HKD) | | :--- | :--- | :--- | :--- | :--- | | Revenue from external customers | 232,758 | 272,204 | 183,480 | 207,794 | | Reportable segment profit/(loss) | (38,514) | (27,041) | 158,810 | 192,545 | | Depreciation and amortisation | 15,930 | 12,984 | 21,554 | 28,501 | Segment Assets and Liabilities (As at June 30) | Metric | Department Store Business 2025 (Thousand HKD) | Department Store Business 2024 (Thousand HKD) | Property Investment 2025 (Thousand HKD) | Property Investment 2024 (Thousand HKD) | | :--- | :--- | :--- | :--- | :--- | | Reportable segment assets | 225,655 | 219,570 | 12,852,644 | 13,116,577 | | Reportable segment liabilities | 171,957 | 213,746 | 96,092 | 101,199 | [4.2 Reconciliation of Reportable Segment Profit, Assets and Liabilities](index=10&type=section&id=4.2%20Reconciliation%20of%20Reportable%20Segment%20Profit%2C%20Assets%20and%20Liabilities) Segment profit is reconciled to consolidated loss before tax after adjusting for other income, other net gains, finance costs, net loss on fair value adjustment of investment properties, share of loss of an associate, and unallocated head office and corporate expenses; consolidated total assets and liabilities are also adjusted by eliminating inter-segment balances and including unallocated items - Consolidated loss before tax was **HKD (119,221) thousand**, narrowing from **HKD (225,808) thousand** in the same period of 2024, mainly due to a significant increase in other net gains and a reduction in net loss on fair value adjustment of investment properties[18](index=18&type=chunk) - As at June 30, 2025, consolidated total assets amounted to **HKD 18,146,357 thousand**, and consolidated total liabilities were **HKD 1,391,433 thousand**[18](index=18&type=chunk) [5. Other Income and Other Net Gains](index=11&type=section&id=5.%20Other%20Income%20and%20Other%20Net%20Gains) In the first half of 2025, other income decreased by **21.6%** to **HKD 60,331 thousand**, mainly due to lower interest income from bank deposits and dividend income from securities investments, while other net gains significantly increased by **107.0%** to **HKD 220,817 thousand**, driven by net gains from fair value remeasurement of securities held for trading and foreign exchange net gains Other Income (For the six months ended June 30) | Income Category | 2025 (Thousand HKD) | 2024 (Thousand HKD) | Change (%) | | :--- | :--- | :--- | :--- | | Interest income from bank deposits | 38,896 | 49,882 | -22.0% | | Dividend income from securities investments | 13,331 | 15,619 | -14.6% | | Interest income from securities investments | 4,642 | 5,909 | -21.4% | | Others | 3,462 | 5,577 | -37.9% | | **Total** | **60,331** | **76,987** | **-21.6%** | Other Net Gains (For the six months ended June 30) | Gain Category | 2025 (Thousand HKD) | 2024 (Thousand HKD) | Change (%) | | :--- | :--- | :--- | :--- | | Net gains from remeasurement of securities held for trading to fair value | 158,238 | 79,129 | +100.0% | | Net gains on disposal of securities held for trading | 46,773 | 30,214 | +54.8% | | Foreign exchange net gains/(losses) | 16,008 | (2,655) | +703.0% | | Net loss on disposal of machinery and equipment | (202) | (10) | +1920.0% | | **Total** | **220,817** | **106,678** | **+107.0%** | [6. Loss Before Tax](index=12&type=section&id=6.%20Loss%20Before%20Tax) The components of loss before tax show a slight decrease in finance costs, reduced net rental income from investment properties, a marginal increase in staff costs, an overall decrease in depreciation due to lower depreciation of right-of-use assets, and a reduction in cost of sales Components of Loss Before Tax (For the six months ended June 30) | Item | 2025 (Thousand HKD) | 2024 (Thousand HKD) | Change (%) | | :--- | :--- | :--- | :--- | | Finance costs | 1,313 | 1,792 | -26.7% | | Net rental income from investment properties | (128,156) | (154,628) | -17.2% | | Staff costs (excluding directors' emoluments) | 99,896 | 97,478 | +2.5% | | Depreciation | 25,206 | 27,364 | -7.9% | | Directors' emoluments | 14,483 | 14,663 | -1.2% | | Cost of sales | 106,885 | 122,594 | -12.8% | - In the first half of 2025, interest on secured bank borrowings amounted to **HKD 142 thousand**, compared to zero in the same period of 2024, indicating new related borrowings[20](index=20&type=chunk) [7. Income Tax in the Consolidated Income Statement](index=13&type=section&id=7.%20Income%20Tax%20in%20the%20Consolidated%20Income%20Statement) Total income tax expense for the period increased to **HKD 29,944 thousand**, primarily due to higher Hong Kong profits tax provision and a shift from deferred tax reversal to origination Income Tax Expense (For the six months ended June 30) | Tax Category | 2025 (Thousand HKD) | 2024 (Thousand HKD) | Change (%) | | :--- | :--- | :--- | :--- | | Current provision for Hong Kong profits tax | 18,028 | 22,221 | -18.9% | | Current provision for taxation outside Hong Kong | 6,575 | 11,990 | -45.1% | | Deferred tax (origination and reversal of temporary differences) | 5,341 | (17,160) | +131.1% | | **Total Income Tax Expense** | **29,944** | **17,051** | **+75.6%** | - Hong Kong profits tax provision is calculated at **16.5%**, with some subsidiaries applying a two-tiered profits tax rate (first **HKD 2 million** taxed at **8.25%**)[21](index=21&type=chunk) [8. Dividends](index=14&type=section&id=8.%20Dividends) The Board declared an interim dividend of **43 HK cents** per share, an increase from the prior year, while the final dividend approved and payable for the previous financial year decreased to **53 HK cents** per share [8.1 Interim Dividends Payable to Equity Holders of the Company](index=14&type=section&id=8.1%20Interim%20Dividends%20Payable%20to%20Equity%20Holders%20of%20the%20Company) The Board declared an interim dividend of **43 HK cents** per share, totaling **HKD 124,378 thousand**, an increase from **32 HK cents** per share (totaling **HKD 92,744 thousand**) in the same period of 2024 Interim Dividends (For the six months ended June 30) | Metric | 2025 (Thousand HKD) | 2024 (Thousand HKD) | Change (%) | | :--- | :--- | :--- | :--- | | Declared after interim period | 124,378 | 92,812 | +34.0% | | Attributable to shares repurchased | - | (68) | - | | **Total Interim Dividends** | **124,378** | **92,744** | **+34.1%** | | Interim dividend per share | 43 HK cents | 32 HK cents | +34.4% | - The interim dividend will be paid on **October 24, 2025**, to shareholders registered on the register of members as at **October 10, 2025**[32](index=32&type=chunk) [8.2 Dividends Attributable to the Previous Financial Year and Approved and Payable to Equity Holders of the Company During the Interim Period](index=14&type=section&id=8.2%20Dividends%20Attributable%20to%20the%20Previous%20Financial%20Year%20and%20Approved%20and%20Payable%20to%20Equity%20Holders%20of%20the%20Company%20During%20the%20Interim%20Period) The final dividend approved and payable during the period was **53 HK cents** per share, totaling **HKD 153,304 thousand**, a decrease from **60 HK cents** per share (totaling **HKD 174,057 thousand**) in the same period of 2024 Final Dividends (For the six months ended June 30) | Metric | 2025 (Thousand HKD) | 2024 (Thousand HKD) | Change (%) | | :--- | :--- | :--- | :--- | | Approved during interim period | 153,474 | 174,250 | -11.9% | | Attributable to shares repurchased | (170) | (193) | -12.0% | | **Total Final Dividends** | **153,304** | **174,057** | **-11.9%** | | Final dividend per share | 53 HK cents | 60 HK cents | -11.7% | [9. Basic and Diluted Loss Per Share](index=15&type=section&id=9.%20Basic%20and%20Diluted%20Loss%20Per%20Share) Basic loss per share for the period narrowed to **51.9 HK cents**; adjusted basic earnings per share, excluding net loss on fair value adjustment of investment properties and related deferred tax, was **111.0 HK cents**, significantly higher than the prior year [9.1 Basic Loss Per Share](index=15&type=section&id=9.1%20Basic%20Loss%20Per%20Share) For the six months ended June 30, 2025, the consolidated loss attributable to equity holders of the Company was **HKD 150,288 thousand**, with basic loss per share of **51.9 HK cents**, an improvement from **82.5 HK cents** in the same period of 2024 Basic Loss Per Share (For the six months ended June 30) | Metric | 2025 | 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Consolidated loss attributable to equity holders of the Company (Thousand HKD) | (150,288) | (239,576) | -37.3% | | Weighted average number of shares in issue (Thousand shares) | 289,349 | 290,252 | -0.3% | | Basic loss per share (HK cents) | (51.9) | (82.5) | -37.1% | - There were no dilutive potential ordinary shares in issue during the reporting period[26](index=26&type=chunk) [9.2 Adjusted Basic Earnings Per Share Excluding Net Loss on Fair Value Adjustment of Investment Properties Less Related Deferred Tax](index=15&type=section&id=9.2%20Adjusted%20Basic%20Earnings%20Per%20Share%20Excluding%20Net%20Loss%20on%20Fair%20Value%20Adjustment%20of%20Investment%20Properties%20Less%20Related%20Deferred%20Tax) Excluding net loss on fair value adjustment of investment properties and related deferred tax, the Group's basic profit attributable to equity holders of the Company increased by **27.2%** to **HKD 321,199 thousand**, with basic earnings per share of **111.0 HK cents**, for the six months ended June 30, 2025 Adjusted Basic Earnings Per Share (For the six months ended June 30) | Metric | 2025 (Thousand HKD) | 2025 (HK cents) | 2024 (Thousand HKD) | 2024 (HK cents) | | :--- | :--- | :--- | :--- | :--- | | Loss attributable to equity holders of the Company in the consolidated income statement | (150,288) | (51.9) | (239,576) | (82.5) | | Add: Net loss on fair value adjustment of investment properties | 470,513 | 162.6 | 515,758 | 177.7 | | Less: Decrease in deferred tax liabilities relating to net loss on fair value adjustment of investment properties | (35) | (0.0) | (20,167) | (7.0) | | Add/(Less): Investment property valuation gains/(losses) attributable to non-controlling interests less related deferred tax | 1,009 | 0.3 | (3,403) | (1.2) | | **Basic profit attributable to equity holders of the Company** | **321,199** | **111.0** | **252,612** | **87.0** | [10. Interests in an Associate](index=16&type=section&id=10.%20Interests%20in%20an%20Associate) The Group's interests in an associate significantly decreased by **60.1%** to **HKD 123,259 thousand**; for the six months ended June 30, 2025, the Group received dividends and distributions of **HKD 185,069 thousand** from the associate, with no such income in the prior year Interests in an Associate (As at June 30) | Metric | 2025 (Thousand HKD) | 2024 (Thousand HKD) | Change (%) | | :--- | :--- | :--- | :--- | | Share of net assets excluding intangible assets | 119,782 | 304,898 | -60.7% | | Share of intangible assets of an associate | 3,477 | 3,688 | -5.7% | | **Total** | **123,259** | **308,586** | **-60.1%** | - For the six months ended June 30, 2025, the Group received dividends and distributions of **HKD 185,069 thousand** from an associate (2024: nil)[28](index=28&type=chunk) [11. Accounts Receivable, Deposits and Prepayments](index=16&type=section&id=11.%20Accounts%20Receivable%2C%20Deposits%20and%20Prepayments) Total accounts receivable, deposits, and prepayments increased by **33.5%** to **HKD 84,521 thousand**, mainly due to increases in other receivables, deposits, and prepayments, while trade receivables slightly decreased, with most being current or less than one month overdue Accounts Receivable, Deposits and Prepayments (As at June 30) | Item | 2025 (Thousand HKD) | 2024 (Thousand HKD) | Change (%) | | :--- | :--- | :--- | :--- | | Trade receivables | 10,312 | 11,276 | -8.5% | | Other receivables | 18,144 | 13,692 | +32.5% | | Deposits and prepayments | 56,065 | 38,370 | +46.1% | | **Total** | **84,521** | **63,338** | **+33.5%** | Ageing Analysis of Trade Receivables (As at June 30) | Ageing | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | Due (not overdue) or overdue less than 1 month | 9,728 | 10,750 | | Overdue 1 to 3 months | 151 | 265 | | Overdue more than 3 months but less than 12 months | 433 | 261 | [12. Accounts Payable and Accrued Expenses](index=17&type=section&id=12.%20Accounts%20Payable%20and%20Accrued%20Expenses) Total accounts payable and accrued expenses increased by **42.6%** to **HKD 423,270 thousand**, primarily due to increases in trade and other payables and accrued expenses, with most trade and other payables being current or not yet due Accounts Payable and Accrued Expenses (As at June 30) | Item | 2025 (Thousand HKD) | 2024 (Thousand HKD) | Change (%) | | :--- | :--- | :--- | :--- | | Trade and other payables | 369,371 | 246,574 | +49.8% | | Accrued expenses | 53,899 | 50,208 | +7.3% | | **Total** | **423,270** | **296,782** | **+42.6%** | Ageing Analysis of Trade and Other Payables (As at June 30) | Ageing | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | Not yet due | 181,072 | 196,597 | | Current or overdue less than 1 month | 187,626 | 47,103 | | Overdue 1 to 3 months | 200 | 2,636 | - The credit period granted to the Group typically ranges from **30 to 90 days** from the invoice date[30](index=30&type=chunk) [Interim Results and Dividends](index=18&type=section&id=Interim%20Results%20and%20Dividends) The Group's interim results show a **13.3%** decrease in revenue to **HKD 416.2 million**, but a **37.3%** reduction in loss attributable to shareholders to **HKD 150.3 million**, driven by increased investment portfolio gains, leading to an adjusted basic earnings per share of **111.0 HK cents** and an interim dividend of **43 HK cents** per share - For the six months ended June 30, 2025, the Group's revenue was **HKD 416.2 million**, a **13.3%** decrease, mainly due to reduced revenue from department store business and property investment[31](index=31&type=chunk) - The Group recorded a loss attributable to shareholders of **HKD 150.3 million**, a **37.3%** reduction from **HKD 239.6 million** in the same period of 2024, primarily due to increased investment portfolio gains[31](index=31&type=chunk) - Excluding net loss on fair value adjustment of investment properties and related deferred tax, the Group's basic profit attributable to shareholders increased by **27.2%** to **HKD 321.2 million**, with basic earnings per share of **111.0 HK cents**[31](index=31&type=chunk) - The Board resolved to declare an interim dividend of **43 HK cents** per share (2024: **32 HK cents**), totaling **HKD 124,378,000**[32](index=32&type=chunk) [Liquidity and Financial Resources](index=18&type=section&id=Liquidity%20and%20Financial%20Resources) This section details the Group's liquidity and financial resources, including overall financial position, borrowings, gearing ratio, financing policies, capital commitments, and contingent liabilities [Overall Financial Position](index=18&type=section&id=Overall%20Financial%20Position) As at June 30, 2025, shareholders' equity slightly decreased to **HKD 16,728.4 million**, while cash and listed marketable securities increased to **HKD 3,624.3 million**, indicating the Group's sufficient liquidity with available bank facilities Overall Financial Position (As at June 30) | Metric | 2025 (Million HKD) | 2024 (Million HKD) | Change (%) | | :--- | :--- | :--- | :--- | | Shareholders' equity | 16,728.4 | 16,833.2 | -0.6% | | Cash and listed marketable securities | 3,624.3 | 3,256.7 | +11.3% | - The Group has sufficient liquidity to meet its current commitments and working capital requirements[33](index=33&type=chunk) [Borrowings and Group Assets Pledged](index=18&type=section&id=Borrowings%20and%20Group%20Assets%20Pledged) As at June 30, 2025, the Group's total borrowings increased to **HKD 65.0 million**, comprising a one-year Japanese Yen borrowing that was fully repaid on July 28, 2025, with no anticipated liquidity difficulties Borrowings and Assets Pledged (As at June 30) | Metric | 2025 (Million HKD) | 2024 (Million HKD) | Change (%) | | :--- | :--- | :--- | :--- | | Total borrowings | 65.0 | 59.3 | +9.6% | | Carrying value of pledged assets | 178.5 | 158.3 | +12.8% | - The borrowing was a one-year Japanese Yen borrowing used for investing in securities held for trading, and it was fully repaid on its maturity date of **July 28, 2025**[34](index=34&type=chunk) - The Group does not anticipate any liquidity difficulties[34](index=34&type=chunk) [Gearing Ratio](index=18&type=section&id=Gearing%20Ratio) As at June 30, 2025, the Group's gearing ratio remained stable at **0.4%**, consistent with December 31, 2024, indicating a stable level of financial leverage Gearing Ratio (As at June 30) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Gearing Ratio | 0.4% | 0.4% | [Financing and Financial Policies](index=19&type=section&id=Financing%20and%20Financial%20Policies) The Group adopts a prudent financing and financial policy, with foreign exchange fluctuations primarily stemming from net investments in subsidiaries outside Hong Kong, and cash and bank balances mainly denominated in HKD, USD, and AUD - The Group adopts prudent financing and financial policies[36](index=36&type=chunk) - Foreign exchange fluctuations primarily arise from net investments in subsidiaries outside Hong Kong, which amounted to **HKD 3,388.4 million** as at **June 30, 2025**[36](index=36&type=chunk) - The Group's cash and bank balances are primarily denominated in **HKD, USD, and AUD**[36](index=36&type=chunk) [Capital Commitments and Contingent Liabilities](index=19&type=section&id=Capital%20Commitments%20and%20Contingent%20Liabilities) As at June 30, 2025, the Group's total capital commitments significantly decreased to **HKD 26.8 million**, and there were no contingent liabilities at the period end Capital Commitments (As at June 30) | Metric | 2025 (Million HKD) | 2024 (Million HKD) | Change (%) | | :--- | :--- | :--- | :--- | | Total capital commitments | 26.8 | 58.1 | -53.9% | - As at **June 30, 2025**, and **December 31, 2024**, the Group had no contingent liabilities[37](index=37&type=chunk) [Half-Year Performance Review](index=19&type=section&id=Half-Year%20Performance%20Review) This section reviews the Group's half-year performance across its department store business, property investment, interests in an associate, other investments, staff, and outlook for the remainder of 2025 [Department Store Business](index=19&type=section&id=Department%20Store%20Business) Hong Kong's retail sector faces ongoing challenges from increased overseas travel, cross-border shopping, and e-commerce competition; the Group's department store business revenue decreased by **14.5%** to **HKD 232.8 million**, resulting in an operating loss of **HKD 38.5 million**, primarily due to reduced customer traffic and spending power - Hong Kong's retail sector faces ongoing challenges, including continued overseas travel, increased cross-border shopping, changes in mainland visitor shopping patterns, and competition from mainland e-commerce and low-price stores[38](index=38&type=chunk) Department Store Business Key Data (For the six months ended June 30) | Metric | 2025 (Million HKD) | 2024 (Million HKD) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 232.8 | 272.2 | -14.5% | | Operating loss | (38.5) | (27.0) | +42.6% | - The Group has completed the renovation of its Wing On Plus branch on Nathan Road and is committed to adjusting its merchandise mix to meet customer demand, but the market downturn has affected implementation progress[38](index=38&type=chunk) [Property Investment](index=19&type=section&id=Property%20Investment) Property investment income decreased to **HKD 158.8 million**; net income from Hong Kong commercial investment properties decreased by **13.2%** with an occupancy rate of approximately **89%**, while net income from Melbourne, Australia commercial office properties decreased by **28.4%** with an occupancy rate falling to approximately **76%**, and the Group plans facility upgrades for the Melbourne property Property Investment Income (For the six months ended June 30) | Metric | 2025 (Million HKD) | 2024 (Million HKD) | Change (%) | | :--- | :--- | :--- | :--- | | Property investment income | 158.8 | 192.5 | -17.5% | | Net income from Hong Kong commercial investment properties | 124.8 | 143.8 | -13.2% | | Net income from Melbourne, Australia commercial office properties | 35.5 | 49.6 | -28.4% | Property Occupancy Rates (As at June 30) | Property Location | 2025 | 2024 | | :--- | :--- | :--- | | Hong Kong commercial investment properties | About 89% | 91% | | Melbourne, Australia commercial office properties | About 76% | 85% | - The Group is conducting a feasibility study for building facility upgrades at its commercial office property at **333 Collins Street, Melbourne, Australia**, with concept designs expected to be finalized by the end of **2025**[39](index=39&type=chunk) [Interests in an Associate](index=20&type=section&id=Interests%20in%20an%20Associate) For the six months ended June 30, 2025, the Group recorded a share of loss from an associate of **HKD 2.4 million**, a significant narrowing from **HKD 12.6 million** in the same period of 2024, primarily due to reduced losses from the automobile dealership business in the People's Republic of China Share of Loss from an Associate After Tax (For the six months ended June 30) | Metric | 2025 (Million HKD) | 2024 (Million HKD) | Change (%) | | :--- | :--- | :--- | :--- | | Share of loss from associate's automobile dealership business after tax | (4.7) | (16.2) | -71.0% | | **Total Share of Loss from an Associate After Tax** | **(2.4)** | **(12.6)** | **-81.0%** | [Others](index=20&type=section&id=Others) As at June 30, 2025, the Group's total investment portfolio value increased to **HKD 2,355.6 million**, generating **HKD 219.8 million** in gains, mainly from fair value remeasurement and disposal of securities held for trading, with foreign currency exchange also recording a net gain of **HKD 16.0 million** Investment Portfolio and Gains (As at June 30) | Metric | 2025 (Million HKD) | 2024 (Million HKD) | Change (%) | | :--- | :--- | :--- | :--- | | Total investment portfolio value | 2,355.6 | 2,208.6 | +6.6% | | Investment portfolio gains | 219.8 | 127.8 | +72.0% | | Foreign currency exchange net gains/(losses) | 16.0 | (2.7) | +692.6% | - The investment portfolio includes equity and debt securities, investment funds, and strategic and structured products managed by professional investment managers[41](index=41&type=chunk) [Staff](index=20&type=section&id=Staff) As at June 30, 2025, the Group had **517** employees, a slight decrease from December 31, 2024, with no significant changes in remuneration policies, bonus schemes, or mandatory provident fund schemes Number of Staff (As at June 30) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Total number of employees | 517 | 531 | - There were no significant changes to the Group's remuneration policies, bonus schemes, mandatory provident fund schemes, and other related information compared to what was disclosed in the 2024 annual report[42](index=42&type=chunk) [Outlook for the Remainder of 2025](index=20&type=section&id=2025%E5%B9%B4%E9%A4%98%E4%B8%8B%E5%B1%95%E6%9C%9B) The Group anticipates continued intense competition and weak consumer confidence for its department store business in the second half of 2025, focusing on controlling operating expenses and adjusting merchandise mix; while Hong Kong and Melbourne office leasing markets are expected to remain weak, the Group is confident in facing future challenges with its robust financial position - The department store business continues to face intense competition and weak consumer confidence challenges in the remainder of the year[43](index=43&type=chunk) - The Group will make every effort to control operating expenses while striving to adjust its merchandise mix to meet customer preferences[43](index=43&type=chunk) - The office leasing markets in Hong Kong and Melbourne are expected to remain weak, but investment properties will continue to generate rental income in line with market conditions[43](index=43&type=chunk) - With its robust financial position, the Group is confident in meeting future challenges[43](index=43&type=chunk) [Corporate Governance](index=20&type=section&id=Corporate%20Governance) The Company has complied with the applicable code provisions of the Corporate Governance Code as set out in Appendix C1 of the HKEX Listing Rules for the six months ended June 30, 2025 - For the six months ended June 30, 2025, the Company has complied with the applicable code provisions of the Corporate Governance Code as set out in Appendix C1 of the Listing Rules of the Stock Exchange[44](index=44&type=chunk) [Directors' Securities Transactions](index=20&type=section&id=Directors'%20Securities%20Transactions) The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers as its code of conduct, and all directors confirmed compliance for the six months ended June 30, 2025 - 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, as its code of conduct for directors' securities transactions[45](index=45&type=chunk) - All directors have confirmed compliance with the standards set out in the Model Code for the six months ended June 30, 2025[45](index=45&type=chunk) [Purchase, Sale or Redemption of the Company's Shares](index=21&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company's%20Shares) The Company repurchased **322,000** shares for a total of **HKD 3,767 thousand** during the six months ended June 30, 2025, with no other purchases, sales, or redemptions of its listed shares by the Company or its subsidiaries Details of Share Repurchases by the Company (For the six months ended June 30, 2025) | Year/Month | Number of shares repurchased | Repurchase price per share (Highest/Lowest HKD) | Total price paid (Thousand HKD) | | :--- | :--- | :--- | :--- | | 2025 January | 129,000 | 11.80 / 11.78 | 1,520 | | 2025 February | 53,000 | 11.82 / 11.68 | 623 | | 2025 March | 59,000 | 11.72 / 11.70 | 692 | | 2025 April | 63,000 | 11.62 / 11.40 | 724 | | 2025 May | 18,000 | 11.56 / 11.56 | 208 | | **Total** | **322,000** | | **3,767** | - Save as disclosed above, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed shares during the six months ended June 30, 2025[46](index=46&type=chunk) [By Order of the Board](index=21&type=section&id=By%20Order%20of%20the%20Board) This announcement was issued by Chairman Mr. Kwok Chi Leung on August 26, 2025, detailing the composition of the Board of Directors - This announcement was issued by Mr. Kwok Chi Leung, Chairman, on **August 26, 2025**[47](index=47&type=chunk) - The Board of Directors comprises Executive Directors Mr. Kwok Chi Leung (Chairman), Mr. Kwok Chi Hang (Vice Chairman and Chief Executive Officer), Dr. Kwok Chi Piu, and Mr. Kwok Chi Yat, as well as Independent Non-executive Directors Ms. Tam Wai Chu, Mr. Leung Wing Ning, and Mr. Nicholas James Debnam[47](index=47&type=chunk)