Company Information and Report Overview [Company Profile](index=5&type=section&id=Company%20Profile) Nissin Foods Company Limited, a Hong Kong-listed public company, is ultimately controlled by Japan's Nissin Foods Holdings Co., Ltd., focusing on producing and selling various food products across Hong Kong, mainland China, and other regions - **Nissin Foods Company Limited** is a Hong Kong-listed company, with its ultimate holding company being **Nissin Foods Holdings Japan**[7](index=7&type=chunk) - Its main business involves the **production and sale of noodles, ready meals, frozen foods, beverages, and snacks**, alongside R&D and promotional services[7](index=7&type=chunk) - Primary operating locations include **Hong Kong, mainland China, and other regions**[7](index=7&type=chunk) [Report Statement and Basis of Preparation](index=1&type=section&id=Report%20Statement%20and%20Basis%20of%20Preparation) This interim report covers the unaudited condensed consolidated financial statements for the six months ended June 30, 2025, prepared in accordance with HKAS 34 and Listing Rules, with retrospective restatement for the ABC Pastry acquisition - The report presents **unaudited condensed consolidated interim results** for the six months ended June 30, 2025, with comparative data for the same period in 2024[3](index=3&type=chunk) - The condensed consolidated financial statements are prepared in accordance with **Hong Kong Accounting Standard 34** and applicable disclosure requirements of the **Listing Rules** of The Stock Exchange of Hong Kong Limited[9](index=9&type=chunk) - Due to the finalization of purchase price allocation for the ABC Pastry acquisition, certain items in the **consolidated statement of financial position as at December 31, 2024, were retrospectively restated**, primarily adjusting property, plant and equipment, goodwill, intangible assets, and deferred tax liabilities[11](index=11&type=chunk)[12](index=12&type=chunk) [Key Accounting Policies](index=6&type=section&id=Key%20Accounting%20Policies) The condensed consolidated financial statements are primarily prepared on a historical cost basis, with consistent accounting policies applied as in the 2024 annual financial statements, and HFRS amendments having no significant impact - The condensed consolidated financial statements are primarily prepared on a **historical cost basis**, except for certain financial instruments measured at fair value[13](index=13&type=chunk) - Accounting policies and calculation methods used in this interim period are **consistent with the 2024 annual consolidated financial statements**, except for changes due to the application of amendments to Hong Kong Financial Reporting Standards[13](index=13&type=chunk) - Amendments to Hong Kong Financial Reporting Standards (e.g., HKAS 21 amendments) have **no significant impact** on the Group's financial position and performance for the current interim and prior periods[14](index=14&type=chunk) Condensed Consolidated Financial Statements [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=1&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended June 30, 2025, the Group's revenue increased by **10.5% to HK$2,014.2 million**, but profit for the period decreased by **7.4% to HK$159.6 million**, mainly due to higher income tax expense, resulting in basic earnings per share falling to **15.05 HK cents** Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (Six Months Ended June 30) | Indicator | 2025 (HK$ thousand) | 2024 (HK$ thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 2,014,201 | 1,822,499 | +10.5% | | Cost of sales and services | (1,337,247) | (1,185,046) | +12.8% | | Gross profit | 676,954 | 637,453 | +6.2% | | Other income | 12,999 | 20,748 | -37.3% | | Selling and distribution costs | (276,065) | (260,831) | +5.8% | | Administrative expenses | (164,512) | (148,381) | +10.9% | | Other expenses | (16,275) | (17,839) | -8.7% | | Other gains and losses | (4,771) | (7,422) | -35.7% | | Finance costs | (95) | (223) | -57.4% | | Profit before tax | 228,235 | 223,505 | +2.1% | | Income tax expense | (68,618) | (51,665) | +32.8% | | Profit for the period | 159,617 | 171,840 | -7.1% | | Profit attributable to owners of the Company | 157,027 | 169,489 | -7.4% | | Basic earnings per share (HK cents) | 15.05 | 16.24 | -7.3% | - Total comprehensive income for the period significantly increased by **30.1% to HK$204,233 thousand**, primarily due to a shift from loss to gain in exchange differences arising from the translation of overseas operations[4](index=4&type=chunk) [Condensed Consolidated Statement of Financial Position](index=3&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's total assets slightly decreased, but total equity maintained robust growth, with net current assets remaining stable and the current ratio improving from 2.6 to 2.8, indicating good liquidity Condensed Consolidated Statement of Financial Position (As at June 30) | Indicator | 2025 June 30 (HK$ thousand) | 2024 Dec 31 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Non-current assets | 2,356,443 | 2,362,853 | -0.3% | | Current assets | 2,315,003 | 2,419,909 | -4.3% | | Current liabilities | 942,691 | 839,304 | +12.3% | | Net current assets | 1,475,699 | 1,477,218 | -0.1% | | Total equity | 3,699,640 | 3,669,974 | +0.8% | | Non-current liabilities | 138,912 | 163,687 | -15.1% | - The **current ratio increased from 2.6** as at December 31, 2024, **to 2.8** as at June 30, 2025, indicating improved liquidity[54](index=54&type=chunk) [Notes to the Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) This section provides supplementary financial details including revenue breakdown, segment information, other income and expenses, income tax, dividends, earnings per share, trade receivables and payables, share capital, and share award schemes Revenue from Contracts with Customers Breakdown (Six Months Ended June 30) | Category | 2025 (HK$ thousand) | 2024 (HK$ thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Sale of goods | 2,010,696 | 1,818,847 | +10.5% | | Others (research and promotional services) | 3,505 | 3,652 | -4.0% | | **Total** | **2,014,201** | **1,822,499** | **+10.5%** | - The Group redefined its operating segments on January 1, 2025, by adding a **"Headquarters" segment** to provide a more relevant segment presentation[16](index=16&type=chunk)[19](index=19&type=chunk) Income Tax Expense (Six Months Ended June 30) | Tax Category | 2025 (HK$ thousand) | 2024 (HK$ thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Hong Kong Profits Tax | 12,084 | 7,480 | +61.6% | | Mainland China Enterprise Income Tax | 45,272 | 40,247 | +12.5% | | Mainland China Withholding Tax | 11,225 | 18,366 | -38.8% | | Others | 2,977 | – | N/A | | Deferred tax | (2,940) | (14,428) | -79.6% | | **Total Income Tax Expense** | **68,618** | **51,665** | **+32.8%** | - **Basic earnings per share attributable to owners of the Company decreased** from **16.24 HK cents in 2024 to 15.05 HK cents in 2025**[25](index=25&type=chunk) - The Group provides an average credit period of **90 days to trade customers**, with a slight decrease in total trade receivables[27](index=27&type=chunk) - The average credit period for purchases of goods is **60 days**, and total trade payables have decreased[28](index=28&type=chunk) - Under the Share Award Scheme, **220,320 award shares were granted and vested in 2025**, with a total fair value of **HK$1,382,000**[29](index=29&type=chunk)[30](index=30&type=chunk) [Other Income and Gains/Losses](index=9&type=section&id=Other%20Income%20and%20Gains%2FLosses) Other Income (Six Months Ended June 30) | Category | 2025 (HK$ thousand) | 2024 (HK$ thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Interest income from bank deposits | 5,368 | 8,750 | -38.7% | | Interest income from financial assets at FVTPL | – | 5,938 | -100% | | Miscellaneous income | 7,631 | 6,060 | +25.9% | | **Total** | **12,999** | **20,748** | **-37.3%** | Other Gains and Losses (Six Months Ended June 30) | Category | 2025 (HK$ thousand) | 2024 (HK$ thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Net exchange losses | (2,232) | (5,519) | -59.6% | | Fair value changes of financial assets at FVTPL | (2,306) | 1,244 | -285.4% | | Loss on disposal of property, plant and equipment | (233) | (3,147) | -92.6% | | **Total** | **(4,771)** | **(7,422)** | **-35.7%** | [Income Tax Expense](index=9&type=section&id=Income%20Tax%20Expense) - Income tax expense increased by **32.8% to HK$68,618 thousand** year-on-year, primarily due to higher Hong Kong Profits Tax and mainland China Enterprise Income Tax, and a decrease in deferred tax[21](index=21&type=chunk) - The Group's management has not yet disclosed qualitative and quantitative information regarding Pillar Two income tax risks, as the estimated effective tax rate in all jurisdictions is above 15%[21](index=21&type=chunk) [Items Deducted/Credited to Profit for the Period](index=10&type=section&id=Items%20Deducted%2FCredited%20to%20Profit%20for%20the%20Period) Items Deducted/Credited to Profit for the Period (Six Months Ended June 30) | Item | 2025 (HK$ thousand) | 2024 (HK$ thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Amortisation of intangible assets | 2,896 | 2,388 | +21.3% | | Cost of inventories recognised as expense | 1,337,247 | 1,185,046 | +12.8% | | Depreciation of property, plant and equipment | 76,701 | 74,211 | +3.4% | | Depreciation of right-of-use assets | 3,491 | 4,354 | -19.8% | | Research and development expenses | 16,275 | 17,839 | -8.7% | | Total staff costs | 402,371 | 364,647 | +10.3% | - Staff costs (excluding directors' emoluments) amounted to **HK$391,798 thousand**, and contributions to retirement benefit schemes were **HK$37,882 thousand**[23](index=23&type=chunk) [Dividends](index=10&type=section&id=Dividends) - During the interim period, a final dividend of **9.63 HK cents** per ordinary share and a special dividend of **6.19 HK cents** per ordinary share, totaling **HK$165,112,000**, were declared and paid to the owners of the Company for the year ended December 31, 2024[24](index=24&type=chunk) [Earnings Per Share](index=11&type=section&id=Earnings%20Per%20Share) Earnings Per Share (Six Months Ended June 30) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Profit for the period attributable to owners of the Company (HK$ thousand) | 157,027 | 169,489 | | Basic earnings per share (HK cents) | 15.05 | 16.24 | | Diluted earnings per share (HK cents) | 15.05 | 16.24 | [Trade Receivables and Payables](index=11&type=section&id=Trade%20Receivables%20and%20Payables) Ageing Analysis of Trade Receivables (As at June 30) | Ageing | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | 0 to 30 days | 246,615 | 243,366 | | 31 to 90 days | 139,126 | 141,156 | | 91 to 180 days | 14,304 | 13,668 | | Over 180 days | 5,212 | 11,523 | | **Total** | **405,257** | **409,713** | Ageing Analysis of Trade Payables (As at June 30) | Ageing | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | 0 to 30 days | 122,014 | 139,516 | | 31 to 90 days | 26,709 | 33,520 | | 91 to 180 days | 9,270 | 1,074 | | Over 180 days | 19 | 7 | | **Total** | **158,012** | **174,117** | [Share Capital and Share Award Scheme](index=12&type=section&id=Share%20Capital%20and%20Share%20Award%20Scheme) - As at June 30, 2025, the number of issued and fully paid ordinary shares was **1,043,691,480**, with share capital amounting to **HK$2,941,441 thousand**, consistent with 2024[28](index=28&type=chunk) - The trustee of the Share Award Scheme purchased **78,000 ordinary shares** of the Company from the open market and vested **220,320 award shares** during the interim period[28](index=28&type=chunk) - For the six months ended June 30, 2025, the Group recognized a total expense of **HK$1,382,000** in relation to the Share Award Scheme[30](index=30&type=chunk) [Capital Commitments](index=13&type=section&id=Capital%20Commitments) Capital Expenditure Contracted But Not Provided For (As at June 30) | Item | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Acquisition of property, plant and equipment | 8,216 | 14,594 | Management Discussion and Analysis [Macroeconomic Environment and Company Strategy](index=14&type=section&id=Macroeconomic%20Environment%20and%20Company%20Strategy) In the first half of 2025, the global economy stabilized, mainland China's economy grew beyond expectations, and Hong Kong experienced moderate growth despite local consumption outflow, prompting the Group to focus on product upgrades, cost optimization, and market expansion with premiumization and differentiation strategies - In the first half of 2025, the global economy showed signs of stabilization, with **mainland China's economy growing beyond market expectations** and Hong Kong's economy experiencing moderate growth[33](index=33&type=chunk)[34](index=34&type=chunk) - **Hong Kong's local consumer spending continued to shift to the Greater Bay Area** in mainland China, putting pressure on the retail and catering sectors[34](index=34&type=chunk) - The Group remains committed to **product upgrades and cost optimization**, driving sustainable growth through premiumization and differentiation strategies[34](index=34&type=chunk) [Overall Financial Performance](index=14&type=section&id=Overall%20Financial%20Performance) The Group achieved strong growth in the review period, with revenue increasing by **10.5% to HK$2,014.2 million** driven by instant noodle business and acquisitions; however, gross profit margin declined due to rising procurement costs, and profit attributable to owners decreased by **7.4%** due to higher income tax expense - The Group's overall revenue significantly increased by **10.5% to HK$2,014.2 million**, primarily driven by robust instant noodle business and contributions from last year's acquisitions[35](index=35&type=chunk) - Gross profit margin decreased by **1.4 percentage points from 35.0% in 2024 to 33.6% in 2025**, mainly due to rising procurement costs[35](index=35&type=chunk) - Profit attributable to owners of the Company decreased by **7.4% to HK$157.0 million**, primarily due to increased income tax expense in high-tax jurisdictions and reduced deferred tax[35](index=35&type=chunk) - Adjusted EBITDA increased by **1.0% to HK$303.2 million**, with an adjusted EBITDA margin of **15.1%**[36](index=36&type=chunk) [Segment Business Performance](index=7&type=section&id=Segment%20Business%20Performance) The Group's operating segments are redefined as Hong Kong and Other Regions, Mainland China, and Headquarters; Hong Kong and Other Regions saw revenue growth of **12.2%** and segment results increased by **12.5%**, while Mainland China's revenue grew by **9.4%** but segment results slightly decreased by **0.3%** due to procurement costs and exchange rates Segment Revenue (Six Months Ended June 30) | Segment | 2025 (HK$ thousand) | 2024 (HK$ thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Hong Kong and Other Regions | 792,264 | 705,856 | +12.2% | | Mainland China | 1,221,937 | 1,116,643 | +9.4% | | **Total** | **2,014,201** | **1,822,499** | **+10.5%** | Segment Results (Six Months Ended June 30) | Segment | 2025 (HK$ thousand) | 2024 (HK$ thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Hong Kong and Other Regions | 67,770 | 60,260 | +12.5% | | Mainland China | 172,940 | 173,460 | -0.3% | | Headquarters | (20,513) | (23,318) | -12.0% | | **Total Reportable Segments** | **220,197** | **210,402** | **+4.7%** | [Hong Kong and Other Regions Business](index=15&type=section&id=Hong%20Kong%20and%20Other%20Regions%20Business) - Revenue from Hong Kong and Other Regions business increased by **12.2% to HK$792.3 million**, accounting for **39.3% of the Group's total revenue**, driven by Hong Kong's instant noodle business and increased demand in other regions[37](index=37&type=chunk) - Segment results significantly increased by **12.5% to HK$67.8 million**, benefiting from sales revenue and gross profit growth[38](index=38&type=chunk) [Hong Kong Business](index=15&type=section&id=Hong%20Kong%20Business) - Instant noodle business performance improved, with **steady growth in sales of bagged and cup instant noodles**, and the launch of new flavors and collaborations with popular IPs[39](index=39&type=chunk)[40](index=40&type=chunk) - Frozen food performance remained stable, with the company focusing on **expanding into premium frozen food products** and developing new products for the catering channel[41](index=41&type=chunk) - Hong Kong Jieling (distribution business) continued to grow in the first half of 2025, benefiting from the **recovery of inbound tourism**[42](index=42&type=chunk) - The portfolio of other products (non-noodle) continued to expand, with the launch of **seasonal fruit and vegetable juices and new flavored cereals**, and the expansion of fresh-cut vegetable channels[43](index=43&type=chunk) [Other Regions Business](index=16&type=section&id=Other%20Regions%20Business) - Vietnam business performed excellently, actively exploring and expanding domestic market sales and distribution channels, with a focus on **young consumer groups**[44](index=44&type=chunk) - A **wholly-owned subsidiary was established in Taiwan** to provide clearer sales direction and more sales and promotional support[45](index=45&type=chunk) - South Korea's Gaemi Food (crispy roll snack manufacturer) business performed in line with management expectations, launching several **original design manufacturer products**[46](index=46&type=chunk) - Australia business successfully expanded through the **acquisition of ABC Pastry** (frozen dumpling producer) and the establishment of Australia Nissin Foods Pty. Ltd. (importing and selling instant noodles, etc.)[47](index=47&type=chunk) [Mainland China Business](index=17&type=section&id=Mainland%20China%20Business) - Mainland China's economy grew by **5.3% year-on-year** in the first half, with the consumer market maintaining a steady recovery and total retail sales of consumer goods increasing by **5.0%** year-on-year[48](index=48&type=chunk) - Mainland China business revenue increased by **9.4%** (in local currency: +10.8%) to **HK$1,221.9 million**, accounting for **60.7% of the Group's total revenue**[49](index=49&type=chunk) - Segment results slightly decreased by **0.3%** (in local currency: +1.0%) to **HK$172.9 million**, primarily affected by increased procurement costs and the depreciation of the Hong Kong dollar against the RMB[49](index=49&type=chunk) [Instant Noodle Business](index=18&type=section&id=Instant%20Noodle%20Business) - Adhering to a **premiumization strategy**, the instant noodle business performed steadily with positive growth in both bagged and cup instant noodle sales, expanding sales in inland regions[50](index=50&type=chunk) - **"Cup Noodles" sales expanded** through in-store tastings, online promotions, and collaborations with major retailers, while digital channels enhanced brand awareness for premium bagged instant noodles like "Demae Itcho" and "Nissin Raoh"[50](index=50&type=chunk) - New products like **"Cup Noodles Korean Army Stew Flavor"** were launched, existing products like "Cup Noodles Rich Seafood Shrimp Broth Flavor" were upgraded, and collaborations with "Hatsune Miku" promoted new offerings[51](index=51&type=chunk) [Non-Noodle Business](index=18&type=section&id=Non-Noodle%20Business) - The distribution business (Shanghai Dongfeng Trading) rebounded, introducing **new product lines and brands** such as European bottled water, Japanese sparkling beverages, and Korean snacks[52](index=52&type=chunk) - **"Nissin Koikeya Potato Chips" performed well** with expanding distribution channels; "KAGOME" fruit and vegetable juices attracted health-conscious customers; and microwaveable frozen foods met the demands of urban residents[53](index=53&type=chunk) [Financial Review](index=18&type=section&id=Financial%20Review) The Group maintains a robust financial position with ample liquidity and available bank facilities; as of June 30, 2025, the Group had no external borrowings and a zero gearing ratio, with capital expenditures primarily invested in production plants in Hong Kong and mainland China - As at June 30, 2025, the Group's **total assets were HK$4,677.9 million**, and **total equity was HK$3,699.6 million**[54](index=54&type=chunk) - **Working capital was HK$1,475.7 million**, and the **current ratio was 2.8**, maintaining a sound financial position[54](index=54&type=chunk) - **Net cash was approximately HK$1,355.1 million**, with available bank facilities of **HK$820.0 million**[55](index=55&type=chunk) - The Group had **no external borrowings** and a **zero gearing ratio** as at June 30, 2025[55](index=55&type=chunk) [Liquidity, Financial Resources and Gearing Ratio](index=18&type=section&id=Liquidity%2C%20Financial%20Resources%20and%20Gearing%20Ratio) Liquidity and Financial Resources (As at June 30) | Indicator | 2025 (HK$ million) | 2024 (HK$ million) | | :--- | :--- | :--- | | Total assets | 4,677.9 | 4,776.4 | | Total equity | 3,699.6 | 3,670.0 | | Working capital | 1,475.7 | 1,477.2 | | Current ratio | 2.8 | 2.6 | | Net cash | 1,355.1 | 1,402.5 | | Available bank facilities | 820.0 | 820.0 | | External borrowings | 0 | 0 | | Gearing ratio | 0 | 0 | [Capital Expenditure and Commitments](index=19&type=section&id=Capital%20Expenditure%20and%20Commitments) - During the review period, capital expenditure was approximately **HK$102.2 million** (2024: HK$61.2 million), primarily for capital investments in **production plants in Hong Kong and mainland China**[56](index=56&type=chunk) - As at June 30, 2025, capital commitments contracted but not provided for the acquisition of property, plant and equipment amounted to **HK$8.2 million**[57](index=57&type=chunk) [Financial Risk Management](index=19&type=section&id=Financial%20Risk%20Management) - The Group has **not entered into or traded derivative financial instruments** for hedging or speculative purposes[58](index=58&type=chunk) - Major foreign currency risks arise from fluctuations in the **Japanese Yen and RMB against the Hong Kong dollar**, while other foreign currency risks (such as Vietnamese Dong, Korean Won, Australian Dollar, and New Taiwan Dollar) remain minor[58](index=58&type=chunk) [Contingent Liabilities and Pledge of Assets](index=19&type=section&id=Contingent%20Liabilities%20and%20Pledge%20of%20Assets) - As at June 30, 2025, the Group had **no significant contingent liabilities or pledge of assets**[59](index=59&type=chunk)[60](index=60&type=chunk) [Future Outlook](index=19&type=section&id=Future%20Outlook) The Company maintains cautious optimism for long-term business development across regions, continuously controlling costs, enhancing operational efficiency, and pursuing growth through premiumization and diversification strategies, including launching high-quality products, expanding portfolios for health needs, and actively growing market presence in mainland China, Vietnam, South Korea, and Australia - The Company maintains a **cautiously optimistic outlook** for long-term business development across various regions, continuously focusing on **cost control and operational efficiency enhancement**[61](index=61&type=chunk) - It will continue to launch **premium products with excellent taste and quality ingredients**, while expanding its product portfolio to meet the demands of health-conscious consumers and broaden its revenue base[61](index=61&type=chunk) - In mainland China, the Group will continue to **expand its business footprint**, reactivate sales in existing regions, explore new sales channels, and enter untapped markets[62](index=62&type=chunk) - In Vietnam, South Korea, and Australia, the Group will actively **expand sales and distribution channels**, capitalizing on economic growth, changing consumer preferences, and increased demand for high-quality, convenient food[62](index=62&type=chunk)[63](index=63&type=chunk) [Significant Investments, Acquisitions and Disposals](index=20&type=section&id=Significant%20Investments%2C%20Acquisitions%20and%20Disposals) During the review period, the Group did not undertake any significant acquisitions or disposals of subsidiaries, associates, or joint ventures, nor did it hold any significant investments - During the review period, the Group had **no significant acquisitions or disposals** of subsidiaries, associates, or joint ventures[65](index=65&type=chunk) - The Group held **no significant investments**[65](index=65&type=chunk) [Sustainability](index=20&type=section&id=Sustainability) The Group is committed to providing a stable and reliable food supply, ensuring consumer well-being, and prioritizing food safety, while actively implementing environmental measures such as incorporating biomass materials in "Cup Noodles" production to reduce greenhouse gas emissions, plastic consumption, and food waste - The Group is committed to providing a **stable and reliable food supply**, ensuring consumer well-being, and placing high importance on **food safety**[66](index=66&type=chunk) - It implements various environmental measures, such as incorporating **biomass materials into the production of selected "Cup Noodles" flavors**, to reduce greenhouse gas emissions, plastic consumption, and food waste[66](index=66&type=chunk) [Employment and Remuneration Policies](index=20&type=section&id=Employment%20and%20Remuneration%20Policies) As of June 30, 2025, the Group employed 3,622 staff, with remuneration determined by performance, qualifications, and industry practices, offering medical benefits, training, and discretionary bonuses, while the Share Award Scheme provides long-term incentives for key employees - As at June 30, 2025, the Group had a total of **3,622 employees**[67](index=67&type=chunk) - Remuneration packages are determined with reference to **employee performance, qualifications, experience, and prevailing industry practices**[67](index=67&type=chunk) - The Group provides **medical benefits, internal and external training**, and discretionary bonuses based on individual performance[67](index=67&type=chunk) - The Share Award Scheme aims to provide **long-term incentives** for selected key employees of the Group[67](index=67&type=chunk) Corporate Governance and Supplementary Information [Corporate Governance](index=21&type=section&id=Corporate%20Governance) The Company has adopted and complied with the Corporate Governance Code set out in Appendix C1 of the Listing Rules; despite the Chairman and CEO being the same person, the Board believes this structure enables quick and effective decision-making, with independent non-executive directors ensuring power balance and independent judgment - The Company has adopted and complied with the **Corporate Governance Code** set out in Appendix C1 of the Listing Rules[69](index=69&type=chunk) - Mr. Kiyotaka Ando serves as both Chairman and Chief Executive Officer, an arrangement the Board believes facilitates **quick and effective business decisions**, with the presence of independent non-executive directors ensuring a balance of power[69](index=69&type=chunk) [Audit Committee](index=21&type=section&id=Audit%20Committee) The Company has established an Audit Committee in accordance with the Corporate Governance Code, which has reviewed the Group's unaudited condensed consolidated financial statements for the six months ended June 30, 2025 - The Company has established an **Audit Committee** in accordance with the Corporate Governance Code and has formulated its terms of reference in writing[70](index=70&type=chunk) - The Audit Committee has reviewed the Group's **unaudited condensed consolidated financial statements** for the six months ended June 30, 2025[70](index=70&type=chunk) [Purchase, Sale or Redemption of Listed Securities](index=21&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20Listed%20Securities) For the six months ended June 30, 2025, neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities, and the Company held no treasury shares - For the six months ended June 30, 2025, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's **listed securities**[71](index=71&type=chunk) - As at June 30, 2025, the Company held **no treasury shares**[71](index=71&type=chunk) [Supplementary Information Regarding 2024 Annual Report](index=21&type=section&id=Supplementary%20Information%20Regarding%202024%20Annual%20Report) This section provides additional details on the Share Award Scheme from the 2024 Annual Report, including specifics of award shares granted to the five highest-paid individuals, emphasizing that the scheme has no minimum vesting period - Supplementary information is disclosed regarding the **Share Award Scheme** in the 2024 Annual Report, particularly details of award shares granted to the **five highest-paid individuals**[72](index=72&type=chunk)[73](index=73&type=chunk) - The scheme does not stipulate any **minimum vesting period**, with the vesting schedule and conditions determined at the sole discretion of the Board[74](index=74&type=chunk)

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。 （於開曼群島註冊成立之有限公司） （股份代號︰3393） 截至二零二五年六月三十日止六個月的中期業績公告 財務摘要 – 1 – • 營業額為人民幣4,390.41百萬元（二零二四年同期：人民幣3,741.54百萬元），增幅為17%。 • 電AMI業務的收入增至人民幣1,883.57百萬元，較二零二四年同期增加30%。 • 通信及流體AMI業務的收入增至人民幣1,298.50百萬元，較二零二四年同期增加13%。 • ADO業務的收入增至人民幣1,208.34百萬元，較二零二四年同期增加6%。 • 期內本公司擁有人應佔純利增加33%至人民幣439.65百 萬 元（二 零 二 四年同期：人民幣 331.03百萬元）。 • 期內每股基本盈利為人民幣44.5分（二零二四年同期：人民幣33.5分）。 • 董事會不建議就截至二零二五年六月三十日止六個月派付中期股息（二零二四年同期： 無）。 威勝控股有限公司（「本公司 ...

[Company Information](index=6&type=section&id=Company%20Information) This section details the company's governance structure, key personnel, and global listing information [Board of Directors and Management](index=6&type=section&id=Board%20of%20Directors%20and%20Management) Zai Lab's Board comprises Dr. Du Ying (Chairperson and CEO) and eight independent directors, supported by various committees for robust corporate governance - The Board of Directors consists of Dr. Du Ying (Chairperson and Chief Executive Officer) and eight independent directors[11](index=11&type=chunk) - Committees include Audit, Remuneration, Nomination and Corporate Governance, Research and Development, and Commercial[13](index=13&type=chunk)[14](index=14&type=chunk) [Company Contact and Listing Information](index=6&type=section&id=Company%20Contact%20and%20Listing%20Information) The company maintains headquarters in mainland China, the US, and Hong Kong, with listings on HKEX (9688) and Nasdaq (ZLAB), audited by KPMG - Mainland China headquarters will relocate to Building B, No. 899 Halei Road, Pudong New Area, Shanghai, effective July 1, 2025[11](index=11&type=chunk) - The company is listed on the Hong Kong Stock Exchange (**9688**) and Nasdaq (**ZLAB**)[14](index=14&type=chunk) - KPMG is responsible for Hong Kong financial report audits, while KPMG LLP handles US financial report audits[14](index=14&type=chunk) [Forward-Looking Statements](index=8&type=section&id=Forward-Looking%20Statements) This section outlines the company's forward-looking statements, emphasizing inherent uncertainties and potential material differences in actual results [Forward-Looking Statement Disclaimer](index=8&type=section&id=Forward-Looking%20Statement%20Disclaimer) This report contains numerous forward-looking statements regarding the company's strategy, product potential, and financial performance, which are subject to inherent uncertainties and risks - Forward-looking statements cover strategy, product potential, market, capital allocation, clinical development, regulatory approvals, collaboration benefits, and future financial performance[15](index=15&type=chunk) - Actual results may differ materially due to various factors, including commercialization capabilities, financing, clinical development outcomes, regulatory approvals, third-party performance risks, patent protection, trade policies, Chinese government intervention, geopolitical events, uncertainties in the Chinese legal system, and currency exchange rate fluctuations[15](index=15&type=chunk)[16](index=16&type=chunk) - The company has no obligation to update or revise any forward-looking statements, and investors should not place undue reliance on them[17](index=17&type=chunk) [Management Discussion and Analysis](index=11&type=section&id=Management%20Discussion%20and%20Analysis) This section provides an in-depth review of the company's operational performance, financial position, and future strategic outlook [Overview](index=11&type=section&id=Overview) Zai Lab is a patient-centered global biopharmaceutical company focused on oncology, immunology, neuroscience, and infectious diseases, with seven commercialized products and ongoing R&D investments - The company is a patient-centered global biopharmaceutical company, focused on oncology, immunology, neuroscience, and infectious diseases[20](index=20&type=chunk) - Currently, it has seven commercialized products (ZEJULA, VYVGART/VYVGART Hytrulo, NUZYRA, OPTUNE, QINLOCK, TYVYT, and ONKAS) approved in at least one region in Greater China[20](index=20&type=chunk) - Since its inception, the company has generated net losses and negative cash flows from operations, primarily due to R&D and selling, general, and administrative expenses[20](index=20&type=chunk) [Recent Developments](index=11&type=section&id=Recent%20Developments) The company achieved a 15% year-over-year increase in commercial product net revenue, driven by VYVGART, NUZYRA, and TYVYT sales, alongside significant clinical and regulatory progress for multiple pipeline candidates 2025 First Half Product Net Revenue (Million USD) | Indicator | 2025 First Half (Million USD) | 2024 First Half (Million USD) | Change (Million USD) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Product Net Revenue | 214.7 | 187.2 | 27.5 | 15% | - ZL-1310 (DLL3 ADC) received FDA Fast Track designation for ES-SCLC, with Ia/Ib clinical study showing a **67% objective response rate** in second-line SCLC, and a pivotal study planned for later this year[23](index=23&type=chunk) - Bemarituzumab Phase III clinical study FORTITUDE-101 met its primary endpoint of significantly improved overall survival, with an NDA submission planned in China for the second half of 2025[23](index=23&type=chunk) - Tumor Treating Fields (TTFields) Phase III clinical study PANOVA-3 met its primary endpoint of significantly improved median overall survival, with an NDA submission planned in China for the second half of 2025[23](index=23&type=chunk) - Repotrectinib's supplemental NDA for adult patients with NTRK-positive solid tumors was accepted by the National Medical Products Administration[25](index=25&type=chunk) - Efgartigimod (FcRn) received FDA approval for self-administration in gMG and CIDP, and was recommended in the "Chinese Guidelines for Diagnosis and Treatment of Myasthenia Gravis (2025 Edition)" for early target-driven and long-term maintenance therapy[25](index=25&type=chunk) [Factors Affecting Our Operating Results](index=14&type=section&id=Factors%20Affecting%20Our%20Operating%20Results) The company's operating performance is influenced by commercial product sales, R&D investment, sales and administrative expenses, and the ability to commercialize pipeline candidates and leverage licensing agreements - Product revenue is expected to increase with enhanced market access for existing commercial products (e.g., inclusion in the National Reimbursement Drug List) and the launch of more commercial products[26](index=26&type=chunk) - R&D expenses are a key driver of long-term competitiveness and future growth, with the company continuing to invest heavily in internal discovery, clinical and preclinical trials, and business development[27](index=27&type=chunk) - Selling, general, and administrative expenses are expected to remain high to support commercial product sales and preparations for new product launches[29](index=29&type=chunk) - The company's ability to generate revenue from pipeline candidates depends on successful regulatory approval and commercialization[30](index=30&type=chunk) - Licensing and collaboration agreements involve upfront payments, milestone payments (development, regulatory, sales), and royalties; as of June 30, 2025, future development and regulatory milestone payments could reach up to **USD 211 million**, and sales milestone payments up to **USD 1.753 billion**[31](index=31&type=chunk) [Future and Outlook](index=16&type=section&id=Future%20and%20Outlook) Zai Lab aims to become a leading global biopharmaceutical company by accelerating patient access to medicines, expanding its pipeline, and maintaining commercial excellence, while integrating its "Trust for Life" strategy - The company's mission is to become a leading global biopharmaceutical company, focused on discovering, developing, and commercializing innovative therapies[32](index=32&type=chunk) - The corporate strategy has three pillars: accelerating patient access to medicines (investing in R&D), expanding and strengthening the pipeline (internal discovery, collaborations, business development), and maintaining commercial excellence and execution (strong financial performance, increased accessibility, efficiency, path to profitability)[34](index=34&type=chunk) - The company will develop its "Trust for Life" strategy, encompassing three commitments: improving human health, creating a better future, and acting immediately with ethical business practices and strong corporate governance[33](index=33&type=chunk) [Financial Review](index=17&type=section&id=Financial%20Review) For the six months ended June 30, 2025, Zai Lab's product net revenue grew 15% to USD 214.7 million, with total revenue increasing 15% to USD 216.5 million, while net loss significantly decreased by 33% to USD 89.2 million 2025 First Half Operating Results Overview (Compared to 2024 Same Period) (Thousand USD) | Indicator | 2025 First Half (Thousand USD) | 2024 First Half (Thousand USD) | Change (Thousand USD) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Product Revenue, Net | 214,735 | 187,255 | 27,480 | 15% | | Collaboration Revenue | 1,729 | 398 | 1,331 | 334% | | **Total Revenue** | **216,464** | **187,653** | **28,811** | **15%** | | Cost of Product Revenue | (81,455) | (68,767) | (12,688) | 18% | | Cost of Collaboration Revenue | (412) | (85) | (327) | 385% | | Research and Development Expenses | (111,343) | (116,270) | 4,927 | (4)% | | Selling, General and Administrative Expenses | (134,460) | (148,904) | 14,444 | (10)% | | Operating Loss | (111,206) | (146,373) | 35,167 | (24)% | | Interest Income | 17,449 | 18,988 | (1,539) | (8)% | | Interest Expense | (2,449) | (605) | (1,844) | 305% | | Foreign Exchange Gain (Loss) | 3,488 | (6,176) | 9,664 | (156)% | | Other Income, Net | 3,553 | 418 | 3,135 | 750% | | Loss Before Income Taxes | (89,165) | (133,748) | 44,583 | (33)% | | Income Tax Expense | — | — | — | —% | | **Net Loss** | **(89,165)** | **(133,748)** | **44,583** | **(33)%** | | Basic and Diluted Loss Per Share | (0.08) | (0.14) | - | (40)% | 2025 First Half Product Net Revenue Breakdown (Thousand USD) | Commercial Product | 2025 First Half | 2024 First Half | Change (USD) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | ZEJULA | 90,571 | 90,500 | 71 | —% | | VYVGART/VYVGART Hytrulo | 44,602 | 36,352 | 8,250 | 23% | | NUZYRA | 29,410 | 22,208 | 7,202 | 32% | | OPTUNE | 23,718 | 25,064 | (1,346) | (5)% | | QINLOCK | 17,045 | 13,131 | 3,914 | 30% | | TYVYT | 5,739 | — | 5,739 | NM | | ONKAS | 3,025 | — | 3,025 | NM | | Other | 625 | — | 625 | NM | | **Total Product Revenue, Net** | **214,735** | **187,255** | **27,480** | **15%** | - Research and development expenses decreased by **USD 4.9 million (4%)**, primarily due to lower employee and clinical trial costs, partially offset by increased license fees[41](index=41&type=chunk) - Selling, general, and administrative expenses decreased by **USD 14.4 million (10%)**, mainly due to reduced personnel costs from resource optimization and efficiency improvements[44](index=44&type=chunk) - Foreign exchange gain was **USD 3.5 million**, compared to a loss of **USD 6.2 million** in the prior year period, primarily driven by the appreciation of RMB against the USD[47](index=47&type=chunk) [Discussion of Certain Key Balance Sheet Items](index=22&type=section&id=Discussion%20of%20Certain%20Balance%20Sheet%20Items) As of June 30, 2025, the company's cash, cash equivalents, and restricted cash totaled USD 833.4 million, with accounts receivable and inventories increasing to support sales growth, and short-term borrowings rising to USD 174.5 million Key Balance Sheet Item Changes (Thousand USD) | Indicator | June 30, 2025 | December 31, 2024 | Change (Thousand USD) | | :--- | :--- | :--- | :--- | | Cash, Cash Equivalents and Restricted Cash | 833,400 | 880,800 | (47,400) | | Accounts Receivable | 88,500 | 85,178 | 3,322 | | Inventories, Net | 61,700 | 39,875 | 21,825 | | Property and Equipment, Net | 50,160 | 47,961 | 2,199 | | Accounts Payable | 107,357 | 100,906 | 6,451 | | Other Current Liabilities | 44,051 | 58,720 | (14,669) | | Short-Term Borrowings | 174,509 | 131,711 | 42,798 | - Accounts receivable increased by **USD 3.3 million** to **USD 88.5 million**, primarily due to increased product revenue[53](index=53&type=chunk) - Inventories, net, increased by **USD 21.8 million** to **USD 61.7 million** to support anticipated sales growth[54](index=54&type=chunk) - Short-term borrowings increased by **USD 42.8 million** to **USD 174.5 million**, mainly due to net new borrowings in the first half of 2025[59](index=59&type=chunk) [Liquidity, Financial Resources and Capital Structure](index=23&type=section&id=Liquidity,%20Financial%20Resources%20and%20Capital%20Structure) As of June 30, 2025, the company's cash and cash equivalents and current restricted cash totaled USD 832.3 million, sufficient to meet cash needs for at least the next twelve months, with changes in cash flows reflecting reduced operating losses and increased investment proceeds Cash and Cash Equivalents, Short-Term Investments and Restricted Cash (Thousand USD) | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and Cash Equivalents | 732,159 | 449,667 | | Current Restricted Cash | 100,111 | 100,000 | | Short-Term Investments | — | 330,000 | | Non-Current Restricted Cash | 1,114 | 1,114 | | **Total** | **833,384** | **880,781** | - As of June 30, 2025, the company's cash and cash equivalents and current restricted cash totaled **USD 832.3 million**, expected to be sufficient to meet cash needs for at least the next twelve months[62](index=62&type=chunk) Cash Flow Data (Thousand USD) | Indicator | 2025 First Half | 2024 First Half | Change (USD) | | :--- | :--- | :--- | :--- | | Net Cash Used in Operating Activities | (92,723) | (132,279) | 39,556 | | Net Cash Provided by Investing Activities | 323,211 | 2,446 | 320,765 | | Net Cash Provided by Financing Activities | 51,990 | 69,870 | (17,880) | | Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash | 125 | (137) | 262 | | Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash | 282,603 | (60,100) | 342,703 | - Net cash used in operating activities decreased by **USD 39.6 million**, primarily due to a reduction in net loss[64](index=64&type=chunk) - Net cash provided by investing activities increased by **USD 320.8 million**, mainly due to increased proceeds from the maturity of short-term investments[65](index=65&type=chunk) - Net cash provided by financing activities decreased by **USD 17.9 million**, primarily due to the repayment of short-term bank borrowings[66](index=66&type=chunk) - The company has entered into debt arrangements with Chinese financial institutions to borrow up to approximately **USD 240.2 million**, with **USD 174.5 million** in outstanding short-term debt as of June 30, 2025[61](index=61&type=chunk) [Contractual Obligations and Commitments](index=26&type=section&id=Contractual%20Obligations%20and%20Commitments) As of June 30, 2025, the company had USD 1.1 million in purchase commitments, primarily for commercial production development and capital expenditures, with no significant legal proceedings or claims - As of June 30, 2025, the company had **USD 1.1 million** in purchase commitments related to commercial production development activities and capital expenditures, expected to be incurred within one year[69](index=69&type=chunk) - The company is not currently a party to any material legal proceedings and has not paid any indemnity claims[196](index=196&type=chunk)[197](index=197&type=chunk) [Disclosure Regarding Market Risk](index=26&type=section&id=Disclosure%20Regarding%20Market%20Risk) Zai Lab faces foreign exchange, credit, and interest rate risks, with RMB-USD fluctuations potentially impacting its RMB-denominated operations and USD/HKD-denominated securities, while credit risk is managed through monitoring, and interest rate changes are not expected to have a material impact - The company faces foreign exchange risk, credit risk, and interest rate risk[70](index=70&type=chunk) - Fluctuations in the exchange rate of RMB against the USD and other currencies may impact the company's RMB-denominated operations and the value of its American Depositary Shares and ordinary shares traded in USD/HKD[71](index=71&type=chunk)[74](index=74&type=chunk) - The company manages credit risk for accounts receivable by continuously monitoring outstanding balances and limiting credit exposure, with no significant credit losses historically[75](index=75&type=chunk) - Given the short-term nature of deposits and investments, sudden changes in market interest rates are not expected to have a material impact on the company's financial position and operating results[77](index=77&type=chunk) [Gearing Ratio](index=28&type=section&id=Gearing%20Ratio) As of June 30, 2025, Zai Lab's gearing ratio increased to 22% from 16% at December 31, 2024 Gearing Ratio | Date | Gearing Ratio | | :--- | :--- | | June 30, 2025 | 22% | | December 31, 2024 | 16% | [Material Investments Held and Future Plans](index=28&type=section&id=Material%20Investments%20Held%20and%20Future%20Plans) As of June 30, 2025, the company held no other material investments and had no future plans for significant investments or capital assets, nor did it undertake any major acquisitions or disposals of subsidiaries, associates, or joint ventures in the first half of 2025 - As of June 30, 2025, the company held no other material investments[80](index=80&type=chunk) - As of June 30, 2025, the company had no future plans for any material investments or capital assets[81](index=81&type=chunk) - In the first half of 2025, the company did not undertake any material acquisitions or disposals of subsidiaries, associates, or joint ventures[82](index=82&type=chunk) [Employees and Remuneration Policy](index=29&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the company had 1,850 full-time employees globally, with remuneration policies based on performance and market data, including equity incentive plans, and total compensation costs of USD 131.4 million for the first half of 2025 - As of June 30, 2025, the company's global team comprised **1,850 full-time employees**, an increase of 6 from December 31, 2024[83](index=83&type=chunk) - Remuneration policy is based on performance and market data, offering share options, share appreciation rights, and restricted shares through equity incentive plans[83](index=83&type=chunk) Total Compensation Costs (Thousand USD) | Period | Total Compensation Costs (Thousand USD) | | :--- | :--- | | 2025 First Half | 131,400 | | 2024 First Half | 153,400 | [Pledge of Group Assets and Contingent Liabilities](index=29&type=section&id=Pledge%20of%20Group%20Assets%20and%20Contingent%20Liabilities) As of June 30, 2025, the company pledged USD 100 million in restricted cash at Bank of China (Hong Kong) as collateral for a standby letter of credit, with no other significant contingent liabilities - As of June 30, 2025, the company pledged **USD 100 million** in restricted cash held at Bank of China (Hong Kong) as collateral for a standby letter of credit[85](index=85&type=chunk) - As of June 30, 2025, the company had no significant contingent liabilities[86](index=86&type=chunk) [Interim Dividends and Recent Accounting Pronouncements](index=29&type=section&id=Interim%20Dividends%20and%20Recent%20Accounting%20Pronouncements) The Board did not recommend any interim dividends for the first half of 2025 and 2024, and the company is currently evaluating the impact of recently issued but not yet adopted accounting pronouncements - The Board did not recommend any interim dividends for the first half of 2025 and 2024[87](index=87&type=chunk) - The company is evaluating the impact of ASU No. 2023-09 (Improvements to Income Tax Disclosures) and ASU No. 2024-03 (Disclosures by Public Entities about Expenses), expected to be adopted for the years ending December 31, 2025, and 2027, respectively[163](index=163&type=chunk)[164](index=164&type=chunk) [Other Information](index=30&type=section&id=Other%20Information) This section covers director and major shareholder interests, equity incentive plans, corporate governance, securities transactions, use of proceeds, accounting standard differences, and subsequent events [Directors' and Major Shareholders' Interests](index=30&type=section&id=Directors'%20and%20Major%20Shareholders'%20Interests) As of June 30, 2025, the company's directors and chief executive (including Dr. Du Ying) held long positions in shares and related shares, alongside major shareholders such as JPMorgan Chase & Co. and FMR LLC Directors' and Chief Executive's Shareholding Profile (As of June 30, 2025) | Director Name | Nature of Interest | Number of Shares | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Dr. Du Ying | Beneficial Owner | 49,127,910 | 4.42% | | John David Diekman | Beneficial Owner | 997,690 | 0.08% | | Peter Karl Wirth | Beneficial Owner | 3,937,500 | 0.35% | Major Shareholders' Shareholding Profile (As of June 30, 2025) | Major Shareholder Name | Capacity/Nature of Interest | Number of Shares Held | Approximate Percentage of Equity in the Company | | :--- | :--- | :--- | :--- | | JPMorgan Chase & Co. | Approved Lending Agent | 86,801,595 | 7.81% | | FMR LLC | Interest of Corporation Controlled by You | 95,696,821 | 8.61% | | Qiming Corporate GP IV, Ltd. | Interest of Corporation Controlled by You | 66,329,320 | 5.97% | | The Capital Group Companies, Inc. | Interest of Corporation Controlled by You | 65,153,170 | 5.86% | [Share Incentive Schemes](index=33&type=section&id=Share%20Incentive%20Schemes) The company operates four share incentive schemes (2015, 2017, 2022, and 2024), with a maximum of 92,521,370 shares issuable under outstanding options as of June 30, 2025 - The company has four share incentive schemes: 2015, 2017, 2022, and 2024[96](index=96&type=chunk) - As of June 30, 2025, the maximum number of shares issuable under outstanding options granted but unexercised under all schemes is **92,521,370**[96](index=96&type=chunk) - During the reporting period, the number of shares potentially issuable under options and non-option awards granted under the 2024 Scheme represented **1.32%** of the weighted average number of issued shares during the period[96](index=96&type=chunk) [2015 Scheme](index=33&type=section&id=2015%20Scheme) The 2015 Scheme, approved on March 5, 2015, ceased new grants after the main conversion effective date, with 17,773,140 shares remaining under outstanding options as of June 30, 2025 2015 Scheme Share Option Balance (As of June 30, 2025) | Category of Grantees | Balance as of January 1, 2025 | Exercised During Reporting Period | Balance as of June 30, 2025 | | :--- | :--- | :--- | :--- | | Directors and Chief Executive of the Company | 21,157,450 | 3,927,780 | 19,638,700 | | Employee Participants (excluding Chief Executive) | 3,901,090 | 3,357,250 | 1,773,140 | | **Total** | **25,058,500** | **7,285,360** | **17,773,140** | [2017 Scheme](index=35&type=section&id=2017%20Scheme) The 2017 Scheme, approved on August 7, 2017, ceased new grants after the main conversion effective date, with 30,096,970 shares under outstanding options and 5,359,210 shares under unvested non-option awards as of June 30, 2025 2017 Scheme Share Option Balance (As of June 30, 2025) | Category of Grantees | Balance as of January 1, 2025 | Exercised During Reporting Period | Balance as of June 30, 2025 | | :--- | :--- | :--- | :--- | | Directors and Chief Executive of the Company | 11,870,000 | 0 | 11,870,000 | | Employee Participants (excluding Chief Executive) | 33,287,030 | 2,215,600 | 30,096,970 | | **Total** | **45,157,030** | **2,215,600** | **41,966,970** | 2017 Scheme Non-Option Awards Unvested (As of June 30, 2025) | Category of Grantees | Unvested as of January 1, 2025 | Vested During Reporting Period | Unvested as of June 30, 2025 | | :--- | :--- | :--- | :--- | | Directors and Chief Executive of the Company | 1,583,880 | 730,000 | 1,153,880 | | Employee Participants (excluding Chief Executive) | 9,978,860 | 3,955,570 | 5,359,210 | | **Total** | **11,562,740** | **4,685,570** | **6,513,090** | [2022 Scheme](index=40&type=section&id=2022%20Scheme) The 2022 Scheme, approved on June 22, 2022, ceased new grants after the adoption of the 2024 Scheme on June 18, 2024, with 37,313,970 shares under outstanding options and 12,788,630 shares under unvested non-option awards as of June 30, 2025 2022 Scheme Share Option Balance (As of June 30, 2025) | Category of Grantees | Balance as of January 1, 2025 | Exercised During Reporting Period | Balance as of June 30, 2025 | | :--- | :--- | :--- | :--- | | Directors and Chief Executive of the Company | 9,104,560 | 0 | 9,104,560 | | Employee Participants (excluding Chief Executive) | 42,461,860 | 2,081,550 | 37,313,970 | | **Total** | **51,566,420** | **2,081,550** | **46,418,530** | 2022 Scheme Non-Option Awards Unvested (As of June 30, 2025) | Category of Grantees | Unvested as of January 1, 2025 | Vested During Reporting Period | Unvested as of June 30, 2025 | | :--- | :--- | :--- | :--- | | Directors and Chief Executive of the Company | 931,320 | 308,310 | 623,010 | | Employee Participants (excluding Chief Executive) | 18,983,390 | 4,392,380 | 12,788,630 | | **Total** | **19,914,710** | **4,700,690** | **13,411,640** | [2024 Scheme](index=46&type=section&id=2024%20Scheme) The 2024 Scheme, approved on June 18, 2024, had 7,337,290 shares under outstanding options and 8,595,280 shares under unvested non-option awards as of June 30, 2025 2024 Scheme Share Option Balance (As of June 30, 2025) | Category of Grantees | Balance as of January 1, 2025 | Granted During Reporting Period | Balance as of June 30, 2025 | | :--- | :--- | :--- | :--- | | Directors and Chief Executive of the Company | 0 | 2,525,850 | 2,525,850 | | Employee Participants (excluding Chief Executive) | 208,080 | 4,609,400 | 4,811,440 | | **Total** | **208,080** | **7,134,210** | **7,337,290** | 2024 Scheme Non-Option Awards Unvested (As of June 30, 2025) | Category of Grantees | Unvested as of January 1, 2025 | Granted During Reporting Period | Unvested as of June 30, 2025 | | :--- | :--- | :--- | :--- | | Directors and Chief Executive of the Company | 2,776,930 | 974,790 | 1,869,180 | | Employee Participants (excluding Chief Executive) | 0 | 6,488,960 | 6,726,100 | | **Total** | **2,776,930** | **7,361,810** | **8,595,280** | [Corporate Governance and Securities Dealing Policy](index=52&type=section&id=Corporate%20Governance%20and%20Securities%20Dealing%20Policy) The company adheres to corporate governance codes, balancing the combined role of Chairperson and CEO with a Lead Independent Director, and all directors complied with the adopted securities dealing policy during the reporting period - The company complies with the Corporate Governance Code, balancing the role of Chairperson and Chief Executive Officer (Dr. Du Ying) by appointing a Lead Independent Director (Dr. John Diekman)[125](index=125&type=chunk) - The company has adopted a securities dealing policy no less stringent than the Model Code, and all directors complied with this policy during the reporting period[128](index=128&type=chunk)[129](index=129&type=chunk) [Dealings in Listed Securities and Changes in Directors' Information](index=53&type=section&id=Dealings%20in%20Listed%20Securities%20and%20Changes%20in%20Directors'%20Information) During the reporting period, the company did not purchase, sell, or redeem any listed securities, nor did it hold any treasury shares, with the only director information change being Ms. Liang Wing Yee's appointment to the Nomination and Corporate Governance Committee - During the reporting period, the company neither purchased, sold, nor redeemed any of its listed securities, nor did it hold any treasury shares[130](index=130&type=chunk)[131](index=131&type=chunk) - The only change in director information was the appointment of Ms. Liang Wing Yee as a member of the Nomination and Corporate Governance Committee, effective April 16, 2025[132](index=132&type=chunk) [Use of Net Proceeds](index=53&type=section&id=Use%20of%20Net%20Proceeds) The company has detailed the use of net proceeds from its April 2021, Global, and November 2024 offerings, with most funds allocated as planned for business development, clinical research, commercialization, and pipeline enhancement, and remaining funds expected to be fully utilized by late 2025 to 2027 Use of Net Proceeds from April 2021 Offering (As of June 30, 2025, Million USD) | Use | Percentage of Total | Net Proceeds from Offering | Unutilized as of January 1, 2025 | Utilized During Reporting Period | Actual Use as of June 30, 2025 | Unutilized as of June 30, 2025 | Expected Timeline | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Funding new business and corporate development and licensing opportunities | 30.0% | 245.4 | 245.4 | 25.9 | 25.9 | 219.5 | Through December 2027 | | Completing clinical studies and advancing new drug candidates | 30.0% | 245.4 | — | — | 245.4 | — | Not Applicable | | Expanding the company's commercialization efforts | 20.0% | 163.6 | — | — | 163.6 | — | Not Applicable | | Enhancing the company's global product pipeline | 15.0% | 122.7 | 87.1 | 15.0 | 50.6 | 72.1 | Through December 2027 | | Working capital and other general corporate purposes | 5.0% | 40.9 | 40.9 | — | — | 40.9 | Through December 2027 | | **Total** | **100.0%** | **818.0** | **373.4** | **40.9** | **485.5** | **332.5** | | Use of Net Proceeds from Global Offering (As of June 30, 2025, Million USD) | Use | Percentage of Total | Net Proceeds from Offering | Unutilized as of January 1, 2025 | Utilized During Reporting Period | Actual Use as of June 30, 2025 | Unutilized as of June 30, 2025 | Expected Timeline | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | For ZEJULA, to seek additional indications and hire high-end R&D personnel for its development, and to develop and improve the company's manufacturing facilities for ZEJULA commercialization | 7.2% | 61.6 | — | — | 61.6 | — | Not Applicable | | Funding ongoing and planned clinical studies and preparatory registration filings for Tumor Treating Fields in various solid tumor cancer indications | 6.2% | 52.7 | 28.7 | 1.1 | 25.1 | 27.6 | Through December 2027 | | For enhancing the company's commercialization capabilities for ZEJULA by recruiting additional sales and marketing personnel | 16.0% | 136.1 | — | — | 136.1 | — | Not Applicable | | Strengthening the commercialization of Tumor Treating Fields by recruiting key talent in relevant indication areas to support sales and future potential product launches | 8.0% | 68.1 | 7.3 | 4.3 | 65.1 | 3.0 | Through December 2025 | | Funding ongoing and planned clinical studies and preparatory registration filings for other pipeline candidates (especially late-stage candidates) | 20.6% | 174.9 | — | — | 174.9 | — | Not Applicable | | Exploring new global licensing and collaboration opportunities and introducing clinically validated global potential best-in-class/first-in-class assets that are synergistic with and aligned with the company's current product pipeline and expertise | 25.0% | 212.7 | 2.1 | 2.1 | 212.7 | — | Not Applicable | | Continuous investment and expansion of the company's internal R&D product pipeline and global talent recruitment and training | 7.0% | 59.6 | — | — | 59.6 | — | Not Applicable | | Funding working capital and other general corporate purposes | 10.0% | 85.1 | 30.7 | — | 54.4 | 30.7 | Through December 2027 | | **Total** | **100.0%** | **850.8** | **68.8** | **7.5** | **789.5** | **61.3** | | - The net proceeds from the November 2024 offering were approximately **USD 215 million**; as of June 30, 2025, **USD 143.3 million** has been utilized for general corporate purposes, primarily to advance pipeline candidates and product commercialization, with the remaining **USD 52 million** expected to be fully utilized by the end of 2025[138](index=138&type=chunk)[139](index=139&type=chunk)[140](index=140&type=chunk) [Differences in Accounting Standards and Review](index=58&type=section&id=Differences%20in%20Accounting%20Standards%20and%20Review) The company's financial statements are prepared under US GAAP and reviewed by the Audit Committee, with a reconciliation to IFRS provided, highlighting share-based compensation as a key difference, and KPMG performing a limited assurance engagement on the reconciliation - Financial statements are prepared in accordance with US Generally Accepted Accounting Principles (GAAP) and reviewed by the Audit Committee[141](index=141&type=chunk)[146](index=146&type=chunk) - The primary difference between US GAAP and International Financial Reporting Standards (IFRS) lies in the recognition method for share-based compensation (graded vesting versus straight-line, and forfeiture timing)[203](index=203&type=chunk)[204](index=204&type=chunk)[205](index=205&type=chunk) - KPMG performed a limited assurance engagement on the reconciliation statement, finding no material inconsistencies[144](index=144&type=chunk)[145](index=145&type=chunk)[148](index=148&type=chunk) [Subsequent Events After Reporting Period](index=61&type=section&id=Subsequent%20Events%20After%20Reporting%20Period) On August 6, 2025, the company entered into a new revolving credit facility with China Merchants Bank, replacing a previous expiring facility, increasing the maximum credit limit to RMB 500 million (approximately USD 69.6 million) for a two-year term - On August 6, 2025, the company entered into a new revolving credit facility with China Merchants Bank, replacing the previous RMB 250 million facility that expired in July 2025[207](index=207&type=chunk) - The new credit facility has a maximum limit of **RMB 500 million** (approximately **USD 69.6 million**) and is valid for two years[207](index=207&type=chunk) [Consolidated Financial Statements](index=62&type=section&id=Consolidated%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements, including balance sheets, statements of operations, comprehensive loss, shareholders' equity, and cash flows [Unaudited Condensed Consolidated Balance Sheets](index=62&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, the company's total assets were USD 1.1641 billion, total liabilities were USD 372.4 million, and total shareholders' equity was USD 791.7 million, reflecting slight decreases in assets and equity and an increase in liabilities compared to December 31, 2024 Unaudited Condensed Consolidated Balance Sheets Overview (Thousand USD) | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Current Assets | 1,034,062 | 1,050,480 | | Total Assets | 1,164,101 | 1,185,753 | | Total Current Liabilities | 331,501 | 299,385 | | Total Liabilities | 372,366 | 344,855 | | Total Shareholders' Equity | 791,735 | 840,898 | [Unaudited Condensed Consolidated Statements of Operations](index=64&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations) For the six months ended June 30, 2025, the company reported total revenue of USD 216.5 million, a net loss of USD 89.2 million, and basic and diluted loss per share of USD 0.08, indicating a significant reduction in net loss compared to the prior year period Unaudited Condensed Consolidated Statements of Operations Overview (Thousand USD) | Indicator | 2025 First Half | 2024 First Half | | :--- | :--- | :--- | | Total Revenue | 216,464 | 187,653 | | Operating Loss | (111,206) | (146,373) | | Net Loss | (89,165) | (133,748) | | Loss Per Share — Basic and Diluted | (0.08) | (0.14) | [Unaudited Condensed Consolidated Statements of Comprehensive Loss](index=65&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss) For the six months ended June 30, 2025, the company's comprehensive loss was USD 93.3 million, comprising a net loss of USD 89.2 million and a foreign currency translation adjustment loss of USD 4.2 million Unaudited Condensed Consolidated Statements of Comprehensive Loss Overview (Thousand USD) | Indicator | 2025 First Half | 2024 First Half | | :--- | :--- | :--- | | Net Loss | (89,165) | (133,748) | | Foreign Currency Translation Adjustment | (4,167) | 5,147 | | **Comprehensive Loss** | **(93,332)** | **(128,601)** | [Unaudited Condensed Consolidated Statements of Shareholders' Equity](index=66&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Shareholders'%20Equity) As of June 30, 2025, the company's total shareholders' equity was USD 791.7 million, a decrease from USD 840.9 million at December 31, 2024, primarily due to net loss and foreign currency translation adjustments Unaudited Condensed Consolidated Statements of Shareholders' Equity Overview (Thousand USD) | Indicator | Balance as of June 30, 2025 | Balance as of December 31, 2024 | | :--- | :--- | :--- | | Common Stock Amount | 7 | 7 | | Additional Paid-in Capital | 3,308,491 | 3,264,295 | | Accumulated Deficit | (2,542,248) | (2,453,083) | | Accumulated Other Comprehensive Income | 46,348 | 50,515 | | Treasury Stock Amount | (20,863) | (20,836) | | **Total Shareholders' Equity** | **791,735** | **840,898** | [Unaudited Condensed Consolidated Statements of Cash Flows](index=67&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash used in operating activities was USD 92.7 million, net cash provided by investing activities was USD 323.2 million, and net cash provided by financing activities was USD 52.0 million, resulting in an increase in period-end cash, cash equivalents, and restricted cash to USD 833.4 million Unaudited Condensed Consolidated Statements of Cash Flows Overview (Thousand USD) | Indicator | 2025 First Half | 2024 First Half | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | (92,723) | (132,279) | | Net Cash Provided by Investing Activities | 323,211 | 2,446 | | Net Cash Provided by Financing Activities | 51,990 | 69,870 | | Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash | 125 | (137) | | Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash | 282,603 | (60,100) | | Cash, Cash Equivalents and Restricted Cash — End of Period | 833,384 | 731,164 | [Notes to Unaudited Condensed Consolidated Financial Statements](index=69&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed notes to the unaudited condensed consolidated financial statements, covering organizational information, accounting policies, and specific financial item breakdowns [1. Organization and Principal Business](index=69&type=section&id=1.%20Organization%20and%20Principal%20Business) Zai Lab Limited, established in the Cayman Islands on March 28, 2013, focuses on discovering, developing, and commercializing innovative products in oncology, immunology, neuroscience, and infectious diseases, with significant operations in Greater China and the US - Zai Lab Limited was incorporated in the Cayman Islands on March 28, 2013[159](index=159&type=chunk) - The company is dedicated to discovering, developing, and commercializing innovative products to address unmet medical needs in oncology, immunology, neuroscience, and infectious diseases[159](index=159&type=chunk) - Its principal business operations and geographic markets are located in Greater China, with substantial operations in Greater China and the United States[160](index=160&type=chunk) [2. Basis of Presentation and Consolidation and Significant Accounting Policies](index=69&type=section&id=2.%20Basis%20of%20Presentation%20and%20Consolidation%20and%20Significant%20Accounting%20Policies) The unaudited condensed consolidated financial statements are prepared under US GAAP, reflecting normal recurring adjustments and management's accounting estimates, with the company evaluating the impact of recently issued accounting pronouncements - The financial statements are prepared in accordance with US Generally Accepted Accounting Principles (GAAP) and reflect normal recurring adjustments necessary for fair presentation[161](index=161&type=chunk) - Management makes accounting estimates regarding rebates, R&D expense recognition, fair value of share-based compensation, realizability of deferred tax assets, and useful lives of intangible assets[162](index=162&type=chunk) - The company is evaluating the impact of ASU No. 2023-09 (Improvements to Income Tax Disclosures) and ASU No. 2024-03 (Disclosures by Public Entities about Expenses), expected to be adopted for the years ending December 31, 2025, and 2027, respectively[163](index=163&type=chunk)[164](index=164&type=chunk) [3. Cash and Cash Equivalents](index=71&type=section&id=3.%20Cash%20and%20Cash%20Equivalents) As of June 30, 2025, the company's total cash and cash equivalents were USD 732.2 million, primarily denominated in USD, with RMB-denominated balances subject to Chinese government foreign exchange controls Cash and Cash Equivalents (Thousand USD) | Currency | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | USD | 718,384 | 429,887 | | RMB | 12,167 | 18,979 | | HKD | 606 | 114 | | AUD | 536 | 522 | | TWD | 466 | 165 | | **Total** | **732,159** | **449,667** | - Cash and bank balances denominated in RMB are deposited in banks in mainland China, and their conversion into foreign currency is subject to foreign exchange control rules and regulations promulgated by the Chinese government[166](index=166&type=chunk) [4. Accounts Receivable](index=72&type=section&id=4.%20Accounts%20Receivable) As of June 30, 2025, the company's net accounts receivable totaled USD 88.5 million, predominantly aged within three months, with strict controls and regular reviews in place to manage uncollected receivables, and no significant historical credit losses Accounts Receivable, Net (Thousand USD) | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Accounts Receivable, Gross | 88,525 | 85,203 | | Provision for Credit Losses | (26) | (25) | | **Accounts Receivable, Net** | **88,499** | **85,178** | Accounts Receivable Aging Analysis (Thousand USD) | Aging | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Within 3 Months | 88,474 | 85,167 | | 3 to 6 Months | 25 | 11 | | **Total** | **88,499** | **85,178** | [5. Inventories, Net](index=72&type=section&id=5.%20Inventories,%20Net) As of June 30, 2025, the company's net inventories were USD 61.7 million, primarily consisting of finished goods and raw materials, with a **USD 0.3 million** write-down recorded in the first half of 2025 for excess, obsolete, or net realizable value below cost Inventories, Net Composition (Thousand USD) | Inventory Category | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Finished Goods | 36,534 | 24,063 | | Raw Materials | 21,232 | 13,268 | | Work-in-Progress | 3,934 | 2,544 | | **Inventories, Net** | **61,700** | **39,875** | - For the six months ended June 30, 2025, the company recorded inventory write-downs of **USD 0.3 million** included in cost of product revenue[169](index=169&type=chunk) [6. Property and Equipment, Net](index=73&type=section&id=6.%20Property%20and%20Equipment,%20Net) As of June 30, 2025, the company's net property and equipment totaled USD 50.2 million, primarily comprising laboratory equipment, production equipment, and buildings, with depreciation expense of USD 4.3 million for the first half of 2025 Property and Equipment, Net Composition (Thousand USD) | Category | June 30, 2025 Net Book Value | December 31, 2024 Net Book Value | | :--- | :--- | :--- | | Office Equipment | 1,237 | 1,230 | | Electronic Equipment | 9,279 | 9,211 | | Laboratory Equipment | 20,444 | 20,516 | | Production Equipment | 17,573 | 17,493 | | Buildings | 24,150 | — | | Construction in Progress | 1,242 | 25,129 | | **Property and Equipment, Net** | **50,160** | **47,961** | - For the six months ended June 30, 2025, depreciation expense was **USD 4.3 million**[170](index=170&type=chunk) [7. Intangible Assets, Net](index=73&type=section&id=7.%20Intangible%20Assets,%20Net) As of June 30, 2025, the company's net intangible assets were USD 56.5 million, primarily composed of commercial product-related assets and software, with a weighted average remaining amortization period of 9.2 years for commercial product assets and 2.8 years for software, and amortization expense of USD 2.9 million for the first half of 2025 Intangible Assets, Net Composition (Thousand USD) | Category | June 30, 2025 Net Book Value | December 31, 2024 Net Book Value | | :--- | :--- | :--- | | Commercial Products | 55,265 | 54,467 | | Software | 1,254 | 1,560 | | **Total** | **56,519** | **56,027** | - For the six months ended June 30, 2025, amortization expense was **USD 2.9 million**[172](index=172&type=chunk) - The weighted average remaining amortization period for commercial product-related intangible assets is **9.2 years**, and for software is **2.8 years**[172](index=172&type=chunk) [8. Accounts Payable](index=74&type=section&id=8.%20Accounts%20Payable) As of June 30, 2025, the company's total accounts payable amounted to USD 107.4 million, with the vast majority (USD 106.9 million) aged within three months, and these payables are non-interest bearing and repayable within the normal operating cycle Accounts Payable Aging Analysis (Thousand USD) | Aging | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Within 3 Months | 106,870 | 100,456 | | 3 to 6 Months | 190 | 145 | | 6 Months to 1 Year | 56 | 23 | | Over 1 Year | 241 | 282 | | **Total** | **107,357** | **100,906** | [9. Revenue](index=74&type=section&id=9.%20Revenue) For the six months ended June 30, 2025, the company's product net revenue was USD 214.7 million and collaboration revenue was USD 1.7 million, with product revenue primarily derived from commercial product sales in Greater China, led by ZEJULA, VYVGART/VYVGART Hytrulo, and NUZYRA Gross and Net Product Revenue (Thousand USD) | Indicator | 2025 First Half | 2024 First Half | | :--- | :--- | :--- | | Product Revenue — Gross | 228,863 | 199,723 | | Less: Rebates and Sales Returns | (14,128) | (12,468) | | **Product Revenue — Net** | **214,735** | **187,255** | Net Revenue by Commercial Product (Thousand USD) | Commercial Product | 2025 First Half | 2024 First Half | | :--- | :--- | :--- | | ZEJULA | 90,571 | 90,500 | | VYVGART/VYVGART Hytrulo | 44,602 | 36,352 | | NUZYRA | 29,410 | 22,208 | | OPTUNE | 23,718 | 25,064 | | QINLOCK | 17,045 | 13,131 | | TYVYT | 5,739 | — | | ONKAS | 3,025 | — | | Other | 625 | — | | **Product Revenue — Net** | **214,735** | **187,255** | - Collaboration revenue, primarily related to promotional activities in mainland China, was **USD 1.7 million** for the first half of 2025, a significant increase from the prior year period[176](index=176&type=chunk) [10. Income Taxes](index=75&type=section&id=10.%20Income%20Taxes) No income tax provision was recorded for the reporting period due to the company's accumulated loss position, and a full valuation allowance has been recorded against deferred tax assets for all consolidated entities - No income tax provision was recorded for the reporting period due to the company's accumulated loss position[177](index=177&type=chunk) - The company recorded a full valuation allowance against deferred tax assets for all consolidated entities[177](index=177&type=chunk) [11. Loss Per Share](index=76&type=section&id=11.%20Loss%20Per%20Share) For the six months ended June 30, 2025, the company's basic and diluted loss per share was USD 0.08, an improvement from USD 0.14 in the prior year period, with anti-dilutive effects of share options and unvested restricted shares excluded from diluted loss per share calculation due to the net loss position Calculation of Basic and Diluted Net Loss Per Share (Thousand USD, except for share and per share data) | Indicator | 2025 First Half | 2024 First Half | | :--- | :--- | :--- | | Net Loss | (89,165) | (133,748) | | Weighted Average Number of Common Shares — Basic and Diluted | 1,086,413,130 | 974,541,780 | | **Net Loss Per Share — Basic and Diluted** | **(0.08)** | **(0.14)** | - Due to the company incurring a net loss, outstanding share options and unvested restricted shares were excluded from the calculation of diluted loss per share for the relevant periods, as their inclusion would have been anti-dilutive[178](index=178&type=chunk) [12. Borrowings](index=76&type=section&id=12.%20Borrowings) As of June 30, 2025, the company's total short-term borrowings amounted to USD 174.5 million, with a weighted average annual interest rate of 2.66%, primarily from Chinese banks to support working capital needs in mainland China Short-Term Borrowings (As of June 30, 2025, Thousand USD) | Bank | Weighted Average Annual Interest Rate | Amount (Thousand USD) | | :--- | :--- | :--- | | Bank of China Working Capital Loan | 2.42% | 48,891 | | SPD Bank Working Capital Loan | 2.80% | 41,908 | | China Merchants Bank Working Capital Loan | 2.87% | 34,895 | | Bank of Communications Working Capital Loan | 2.75% | 41,908 | | Bank of Ningbo Discounted Bills | 1.90% | 6,907 | | **Total Short-Term Borrowings** | **2.66%** | **174,509** | - The company has entered into debt arrangements with several Chinese financial institutions to support its working capital needs in mainland China[180](index=180&type=chunk) - The Bank of China working capital loan is secured by **USD 100 million** in restricted deposits[181](index=181&type=chunk) [13. Other Current Liabilities](index=78&type=section&id=13.%20Other%20Current%20Liabilities) As of June 30, 2025, the company's total other current liabilities were USD 44.1 million, primarily comprising accrued payroll, accrued distributor rebates, and taxes payable Other Current Liabilities Composition (Thousand USD) | Category | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Accrued Payroll | 18,004 | 30,198 | | Accrued Professional Service Fees | 3,532 | 5,728 | | Payables for Property and Equipment | 2,498 | 449 | | Accrued Distributor Rebates | 10,453 | 10,839 | | Taxes Payable | 4,762 | 5,154 | | Other | 4,802 | 6,352 | | **Total** | **44,051** | **58,720** | [14. Related Party Transactions](index=78&type=section&id=14.%20Related%20Party%20Transactions) In January 2025, the company entered into a licensing agreement with Zenas for the development and commercialization of an IGF-1R targeted product in Greater China, with a **USD 10 million** upfront payment recognized as R&D expense and potential future milestone payments of up to **USD 117 million** - In January 2025, the company entered into a licensing agreement with Zenas to obtain rights for the development and commercialization of an IGF-1R targeted product in Greater China[187](index=187&type=chunk) - Mr. Moulder, a member of the company's Board of Directors, also serves as the Chairman and Chief Executive Officer of Zenas[187](index=187&type=chunk) - The company recognized a **USD 10.0 million** upfront payment as R&D expense, with potential future development and sales-based milestone payments of up to **USD 117 million**[187](index=187&type=chunk) [15. Share-Based Compensation](index=78&type=section&id=15.%20Share-Based%20Compensation) For the six months ended June 30, 2025, the company granted options to purchase 7,134,210 ordinary shares and restricted stock representing 7,361,810 ordinary shares under its equity incentive plans, with total share-based compensation expense of USD 32.77 million - For the six months ended June 30, 2025, the company granted options to purchase up to **7,134,210 ordinary shares** and restricted stock representing **7,361,810 ordinary shares**[188](index=188&type=chunk) Share-Based Compensation Expense (Thousand USD) | Category | 2025 First Half | 2024 First Half | | :--- | :--- | :--- | | Selling, General and Administrative | 21,470 | 21,456 | | Research and Development | 11,303 | 15,162 | | **Total** | **32,773** | **36,618** | - As of June 30, 2025, unrecognized share-based compensation expense related to unvested share options and unvested restricted shares was **USD 64.7 million** and **USD 75.4 million**, respectively, expected to be recognized over **2.52 years** and **2.46 years**[189](index=189&type=chunk) [16. License and Collaboration Agreements](index=79&type=section&id=16.%20License%20and%20Collaboration%20Agreements) The company has various licensing and collaboration agreements for product development and commercialization; for the six months ended June 30, 2025, no new material agreements or milestone fees were incurred, though **USD 20 million** in upfront payments for other non-material agreements was recognized as R&D expense - For the six months ended June 30, 2025, the company did not enter into any new material license or collaboration agreements, nor did it incur any milestone fees under existing material license and collaboration agreements[191](index=191&type=chunk) - For the six months ended June 30, 2025, the company recognized **USD 20.0 million** in upfront payments as R&D expense for individually non-material license and collaboration agreements[192](index=192&type=chunk) [17. Other Income, Net](index=80&type=section&id=17.%20Other%20Income,%20Net) For the six months ended June 30, 2025, the company's net other income was USD 3.6 million, primarily from government grants and a reduced loss on equity investments in MacroGenics Other Income, Net (Thousand USD) | Category | 2025 First Half | 2024 First Half | | :--- | :--- | :--- | | Government Grants | 3,866 | 3,325 | | Loss on Equity Investments at Fair Value Through Profit or Loss | (1,912) | (5,147) | | Other Miscellaneous Income | 1,599 | 2,240 | | **Total** | **3,553** | **418** | [18. Net Assets Restricted](index=80&type=section&id=18.%20Net%20Assets%20Restricted) Chinese laws and regulations restrict the company's ability to receive fund distributions from its Chinese subsidiaries, including statutory reserve requirements and foreign exchange controls, with **USD 506 million** in restricted paid-in capital as of June 30, 2025 - Chinese laws and regulations restrict the company's ability to receive fund distributions from its Chinese subsidiaries, including statutory reserve fund requirements and foreign exchange controls[194](index=194&type=chunk) - As of June 30, 2025, the restricted amount included in the paid-in capital of the company's subsidiaries in mainland China was **USD 506.0 million**[194](index=194&type=chunk) [19. Commitments and Contingencies](index=81&type=section&id=19.%20Commitments%20and%20Contingencies) As of June 30, 2025, the company had **USD 1.1 million** in purchase commitments related to commercial production development and capital expenditures, expected to be incurred within one year, and was not a party to any significant legal proceedings or claims - As of June 30, 2025, the company had contracted but not yet reflected in the unaudited condensed consolidated financial statements **USD 1.1 million** in commitments related to commercial production development activities and capital expenditures[195](index=195&type=chunk) - The company is not currently a party to any material legal proceedings and has not paid any claims[196](index=196&type=chunk)[197](index=197&type=chunk) [20. Segment Information](index=81&type=section&id=20.%20Segment%20Information) The company operates as a single operating segment, focusing on the discovery, development, and commercialization of products in oncology, immunology, neuroscience, and infectious diseases, with the CEO assessing performance and allocating resources based on consolidated expenses and net income - The company operates as a single operating segment, engaged in discovering, developing, and commercializing products to address significant unmet medical needs in oncology, immunology, neuroscience, and infectious diseases[198](index=198&type=chunk) - The Chief Executive Officer, as the chief operating decision maker, assesses performance and allocates resources based on significant expenses and net income on a consolidated basis[198](index=198&type=chunk) Classified Expenses (Thousand USD) | Category | 2025 First Half | 2024 First Half | | :--- | :--- | :--- | | Total Research and Development Expenses | 111,343 | 116,270 | | Total Selling, General and Administrative Expenses | 134,460 | 148,904 | [21. Reconciliation of US GAAP to IFRS](index=83&type=section&id=21.%20Reconciliation%20of%20US%20GAAP%20to%20IFRS) The company's financial statements are prepared under US GAAP, with a reconciliation to IFRS provided, primarily highlighting differences in share-based compensation recognition, while lease accounting differences are not material Consolidated Statements of Operations Reconciliation (For the Six Months Ended June 30, 2025, Thousand USD) | Indicator | Amount Reported Under US GAAP | IFRS Adjustment (Share-Based Compensation) | Amount Reported Under IFRS | | :--- | :--- | :--- | :--- | | Research and Development Expenses | (111,343) | 4,727 | (106,616) | | Selling, General and Administrative Expenses | (134,460) | 711 | (133,749) | | Net Loss | (89,165) | 5,438 | (83,727) | Consolidated Balance Sheets Reconciliation (As of June 30, 2025, Thousand USD) | Indicator | Amount Reported Under US GAAP | IFRS Adjustment (Share-Based Compensation) | Amount Reported Under IFRS | | :--- | :--- | :--- | :--- | | Additional Paid-in Capital | 3,308,491 | 43,601 | 3,352,092 | | Accumulated Deficit | (2,542,248) | (43,601) | (2,585,849) | | Total Shareholders' Equity | 791,735 | — | 791,735 | - Under US GAAP, the company has elected to recognize compensation expense for graded vesting awards granted to employees using the straight-line method; under IFRS, compensation expense must be recognized using the graded vesting method[203](index=203&type=chunk)[204](index=204&type=chunk) - Based on the company's assessment, the lease differences recognized under US GAAP and IFRS do not have a material impact on the condensed consolidated financial statements[206](index=206&type=chunk) [22. Subsequent Events](index=86&type=section&id=22.%20Subsequent%20Events) On August 6, 2025, the company signed a new two-year revolving credit facility with China Merchants Bank, increasing the maximum credit limit to RMB 500 million (approximately USD 69.6 million), replacing the previous RMB 250 million facility that expired in July 2025 - On August 6, 2025, the company signed a new revolving credit facility with China Merchants Bank, replacing the previous RMB 250 million credit facility that expired in July 2025[207](index=207&type=chunk) - The new credit facility has a maximum limit of **RMB 500 million** (approximately **USD 69.6 million**) and is valid for two years[207](index=207&type=chunk) [Glossary](index=87&type=section&id=Glossary) This section provides definitions for acronyms and defined terms used throughout the report, covering professional terminology across pharmaceutical, financial, regulatory, and corporate governance domains [Definitions of Terms](index=87&type=section&id=Definitions%20of%20Terms) This glossary includes acronyms and defined terms used in this report to aid reader comprehension - The glossary includes acronyms and defined terms used in this report[209](index=209&type=chunk)

[Financial Summary](index=1&type=section&id=Financial%20Summary) The group experienced a significant decline in revenue, net profit, and adjusted EBITDA for the six months ended June 30, 2025, turning from profit to loss Financial Summary for the Six Months Ended June 30, 2025 | Metric | For the Six Months Ended June 30, 2025 (RMB million) | For the Six Months Ended June 30, 2024 (RMB million) | Year-over-Year Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 1,288.6 | 1,443.8 | -10.7% | | Net Loss/Net Profit | (1,044.1) | 190.3 | Turned from profit to loss | | Loss/Profit Attributable to Owners | (1,039.9) | 189.7 | Turned from profit to loss | | Non-IFRS Adjusted Net Profit | 82.3 | 259.6 | -68.3% | | Non-IFRS EBITDA (Negative) | (938.2) | 380.9 | Turned from positive to negative | | Non-IFRS Adjusted EBITDA | 224.7 | 418.1 | -46.3% | | Basic Loss/Earnings Per Share | (0.39) | 0.07 | Turned from profit to loss | | Non-IFRS Adjusted Basic Earnings Per Share | 0.03 | - | - | - The Board recommended no interim dividend for the six months ended June 30, 2025 (2024: nil)[5](index=5&type=chunk) [Condensed Consolidated Financial Statements](index=4&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section presents the group's condensed consolidated financial performance, position, equity changes, and cash flows for the reporting period [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=4&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended June 30, 2025, the group turned from net profit to net loss, primarily due to decreased revenue, significantly increased other expenses, and substantial impairment losses on goodwill and intangible assets Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (Summary) | Metric | For the Six Months Ended June 30, 2025 (RMB thousand) | For the Six Months Ended June 30, 2024 (RMB thousand) | | :--- | :--- | :--- | | Revenue | 1,288,587 | 1,443,756 | | Cost of revenue | (897,178) | (860,740) | | Gross profit | 391,409 | 583,016 | | Other income | 12,788 | 26,529 | | Other expenses | (52,455) | (577) | | Impairment loss on goodwill, licenses, etc. | (992,579) | – | | (Loss) profit before tax | (1,088,500) | 265,756 | | (Loss) profit for the period | (1,044,120) | 190,313 | | (Loss) profit for the period attributable to owners of the Company | (1,039,916) | 189,682 | | Basic (loss) earnings per share (RMB) | (0.39) | 0.07 | [Condensed Consolidated Statement of Financial Position](index=6&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the group's total assets and net assets decreased, primarily due to goodwill and intangible asset impairment, while net current liabilities improved Condensed Consolidated Statement of Financial Position (Summary) | Metric | As of June 30, 2025 (RMB thousand) | As of December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Non-current assets | 12,819,227 | 13,891,865 | | Current assets | 1,190,198 | 1,089,929 | | Current liabilities | 1,338,051 | 2,119,451 | | Net current liabilities | (147,853) | (1,029,522) | | Non-current liabilities | 3,417,449 | 2,508,156 | | Net assets | 9,253,925 | 10,354,187 | | Total equity | 9,253,925 | 10,354,187 | - Goodwill decreased from **RMB 3,506,618 thousand** as of December 31, 2024, to **RMB 2,873,675 thousand** as of June 30, 2025, reflecting impairment impact[12](index=12&type=chunk) - Bank borrowings (current liabilities) significantly decreased from **RMB 1,277,537 thousand** as of December 31, 2024, to **RMB 464,009 thousand** as of June 30, 2025, while non-current bank borrowings substantially increased[13](index=13&type=chunk) [Condensed Consolidated Statement of Changes in Equity](index=8&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) For the six months ended June 30, 2025, total equity attributable to owners of the Company significantly decreased due to loss for the period and other comprehensive expenses Condensed Consolidated Statement of Changes in Equity (Summary) | Metric | As of January 1, 2025 (RMB thousand) | Loss for the period (RMB thousand) | Other comprehensive expenses for the period (RMB thousand) | As of June 30, 2025 (RMB thousand) | | :--- | :--- | :--- | :--- | :--- | | Subtotal equity attributable to owners of the Company | 10,274,419 | (1,039,916) | (61,692) | 9,188,012 | | Non-controlling interests | 79,768 | (4,204) | (526) | 65,913 | | Total equity | 10,354,187 | (1,044,120) | (62,218) | 9,253,925 | - Equity-settled share-based payments recognized during the period amounted to **RMB 15,201 thousand**[14](index=14&type=chunk) - In the first half of 2024, the Company repurchased **5,000,000 shares** for a total of **RMB 12,644,000** to satisfy awards under the restricted share unit scheme[16](index=16&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) For the six months ended June 30, 2025, the group's net cash from operating activities decreased, investment activities shifted from net inflow to net outflow, but financing cash outflows significantly reduced, leading to a net increase in cash and cash equivalents Condensed Consolidated Statement of Cash Flows (Summary) | Metric | For the Six Months Ended June 30, 2025 (RMB thousand) | For the Six Months Ended June 30, 2024 (RMB thousand) | | :--- | :--- | :--- | | Net cash from operating activities | 267,958 | 383,827 | | Net cash (used in) from investing activities | (141,294) | 41 | | Net cash used in financing activities | (17,008) | (380,126) | | Net increase in cash and cash equivalents | 109,656 | 3,742 | | Bank balances and cash at end of period | 679,650 | 517,321 | - Net cash from operating activities decreased by **30.2%** year-over-year, primarily due to changes in working capital and increased taxes paid[18](index=18&type=chunk) - Cash outflow from investing activities was mainly impacted by the purchase of property, plant and equipment (**RMB 124,660 thousand**) and other financial assets at fair value through profit or loss (**RMB 40,000 thousand**)[18](index=18&type=chunk) - Cash outflow from financing activities significantly decreased, mainly due to new bank borrowings (**RMB 1,695,513 thousand**) offsetting the repayment of bank borrowings (**RMB 1,604,545 thousand**)[20](index=20&type=chunk) [Notes to the Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed notes on the group's accounting policies, financial performance, and position, including segment information, expenses, and asset impairments [1. General Information and Basis of Presentation](index=12&type=section&id=1.%20General%20Information%20and%20Basis%20of%20Presentation) The group, incorporated in the Cayman Islands and listed on the Hong Kong Stock Exchange, primarily engages in assisted reproductive services, management services, other medical services, obstetric medical services, and sales of consumables and equipment, with financial statements presented in RMB under IFRS and Listing Rules - The Company was incorporated in the Cayman Islands on May 3, 2018, and listed on the Hong Kong Stock Exchange on June 25, 2019[21](index=21&type=chunk) - Principal activities include assisted reproductive services, management services, other medical services (gynecology and pediatrics), obstetric medical services, and sales of consumables and equipment[21](index=21&type=chunk) [Going Concern Assessment](index=12&type=section&id=Going%20Concern%20Assessment) Despite the group's current liabilities exceeding current assets by **RMB 147,853,000** as of June 30, 2025, the Board reasonably expects the group to continue as a going concern based on unused bank facilities and future operating cash flow forecasts - As of June 30, 2025, the group's current liabilities exceeded current assets by **RMB 147,853,000**[23](index=23&type=chunk) - The group has unused bank facilities of approximately **RMB 491,538,000** and has secured additional bank facilities of approximately **RMB 350,000,000**[23](index=23&type=chunk) [2. Accounting Policies](index=13&type=section&id=2.%20Accounting%20Policies) The condensed consolidated financial statements are prepared on a historical cost basis, consistent with the accounting policies and methods used for the annual consolidated financial statements for the year ended December 31, 2024, with no significant impact from newly applied revised IFRS during the period - The condensed consolidated financial statements are prepared on a historical cost basis, consistent with prior year accounting policies[25](index=25&type=chunk) - IFRS 21 (Revised) "Lack of Exchangeability" was first applied in this interim period but had no impact on financial position or performance[26](index=26&type=chunk) [3. Revenue and Segment Information](index=13&type=section&id=3.%20Revenue%20and%20Segment%20Information) The group's revenue primarily derives from Greater China and overseas operations, with total revenue of **RMB 1,288,587 thousand** for the six months ended June 30, 2025, a **10.7%** year-over-year decrease, where assisted reproductive and related services remain the main but reduced income source Revenue and Segment Profit (Loss) by Operating and Reportable Segment | Segment | Revenue for the Six Months Ended June 30, 2025 (RMB thousand) | Revenue for the Six Months Ended June 30, 2024 (RMB thousand) | Segment Profit (Loss) for the Six Months Ended June 30, 2025 (RMB thousand) | Segment Profit for the Six Months Ended June 30, 2024 (RMB thousand) | | :--- | :--- | :--- | :--- | :--- | | Greater China | 985,473 | 1,137,636 | 28,692 | 345,660 | | Overseas | 303,114 | 306,120 | (43,569) | 8,717 | | Consolidated | 1,288,587 | 1,443,756 | (14,877) | 354,377 | Revenue by Major Service Type | Service Type | For the Six Months Ended June 30, 2025 (RMB thousand) | For the Six Months Ended June 30, 2024 (RMB thousand) | | :--- | :--- | :--- | | Assisted Reproductive and Related Services | 690,739 | 778,072 | | Management Services | 252,656 | 287,371 | | Other Medical Services | 205,239 | 201,655 | | Obstetric Medical Services | 98,937 | 116,384 | | Sales of Consumables and Equipment | 41,016 | 60,274 | | Total | 1,288,587 | 1,443,756 | - HRC Medical, a key customer, contributed **RMB 228,331 thousand** in revenue in the first half of 2025, a slight year-over-year decrease[33](index=33&type=chunk) [4. Other Income](index=16&type=section&id=4.%20Other%20Income) The group's other income decreased by **51.7%** from **RMB 26.5 million** in the first half of 2024 to **RMB 12.8 million** in the first half of 2025, primarily due to a significant reduction in government subsidies Other Income Details | Source of Income | For the Six Months Ended June 30, 2025 (RMB thousand) | For the Six Months Ended June 30, 2024 (RMB thousand) | | :--- | :--- | :--- | | Bank interest income | 3,873 | 3,901 | | Government grants | 1,017 | 14,004 | | Others | 7,898 | 8,037 | | Total | 12,788 | 26,529 | [5. Other Expenses](index=17&type=section&id=5.%20Other%20Expenses) The group's other expenses significantly increased from **RMB 0.6 million** in the first half of 2024 to **RMB 52.5 million** in the first half of 2025, primarily due to a one-off capital injection into Jinjiang District Maternal and Child Health Hospital - A one-off capital injection of **RMB 50,000,000** was made to Jinjiang District Maternal and Child Health Hospital to enhance its capabilities[34](index=34&type=chunk) [6. Net Other Gains and Losses](index=17&type=section&id=6.%20Net%20Other%20Gains%20and%20Losses) The group recorded a net other loss of **RMB 7.8 million** in the first half of 2025, primarily due to increased exchange losses Net Other Gains and Losses Details | Item | For the Six Months Ended June 30, 2025 (RMB thousand) | For the Six Months Ended June 30, 2024 (RMB thousand) | | :--- | :--- | :--- | | Exchange losses | (7,728) | (5,883) | | Total | (7,767) | (3,808) | [7. Expected Credit Loss Impairment Model](index=18&type=section&id=7.%20Expected%20Credit%20Loss%20Impairment%20Model) The group recognized **RMB 99.0 million** in expected credit loss impairment in the first half of 2025, primarily related to refundable deposits and amounts due from related parties Expected Credit Loss Impairment Details | Item | For the Six Months Ended June 30, 2025 (RMB thousand) | For the Six Months Ended June 30, 2024 (RMB thousand) | | :--- | :--- | :--- | | Refundable deposits | 20,000 | – | | Amounts due from related parties | 79,009 | – | | Total | 99,009 | – | - An expected credit loss provision of **RMB 20,000,000** was recognized for a refundable deposit of **RMB 50,000,000**, as part of the amount became unrecoverable due to arbitration results[37](index=37&type=chunk) [8. Finance Costs](index=18&type=section&id=8.%20Finance%20Costs) The group's finance costs increased by **51.2%** from **RMB 28.5 million** in the first half of 2024 to **RMB 43.1 million** in the first half of 2025, primarily due to increased interest on bank borrowings and lease liabilities Finance Costs Details | Item | For the Six Months Ended June 30, 2025 (RMB thousand) | For the Six Months Ended June 30, 2024 (RMB thousand) | | :--- | :--- | :--- | | Interest on bank borrowings | 30,522 | 19,675 | | Interest on lease liabilities | 12,551 | 8,851 | | Total | 43,073 | 28,526 | - Total borrowing costs amounted to **RMB 49,811 thousand**, of which **RMB 19,289 thousand** was capitalized in construction in progress[38](index=38&type=chunk) [9. (Loss) Profit Before Tax](index=19&type=section&id=9.%20(Loss)%20Profit%20Before%20Tax) Loss before tax was primarily impacted by factors such as cost of inventories, share-based payment benefits, and depreciation and amortization (Loss) Profit Before Tax Deductions | Item | For the Six Months Ended June 30, 2025 (RMB thousand) | For the Six Months Ended June 30, 2024 (RMB thousand) | | :--- | :--- | :--- | | Cost of inventories recognized as expense | 344,418 | 385,601 | | Share-based payment benefits | 15,201 | 37,115 | | Amortization of licenses | 22,438 | 22,438 | | Depreciation of property, plant and equipment | 100,500 | 76,831 | | Depreciation of right-of-use assets | 42,061 | 39,551 | [10. Income Tax Expense](index=19&type=section&id=10.%20Income%20Tax%20Expense) The group's income tax expense decreased from **RMB 75.4 million** in the first half of 2024 to a negative **RMB 44.4 million** in the first half of 2025, primarily due to the reversal of deferred tax liabilities related to US intangible asset impairment Income Tax Expense Details | Item | For the Six Months Ended June 30, 2025 (RMB thousand) | For the Six Months Ended June 30, 2024 (RMB thousand) | | :--- | :--- | :--- | | Current tax | 36,862 | 70,042 | | Deferred tax | (81,242) | 3,955 | | Total | (44,380) | 75,443 | - The decrease in income tax expense was mainly due to the reversal of deferred tax liabilities of approximately **RMB 89.8 million** related to US intangible asset impairment[108](index=108&type=chunk) - Chinese subsidiaries are subject to a statutory corporate income tax rate of **25%**, with some companies engaged in "Western Encouraged Industries" enjoying a preferential tax rate of **15%**[43](index=43&type=chunk) [11. Dividends](index=20&type=section&id=11.%20Dividends) The Board did not recommend any interim dividend for this interim period; in the first half of 2024, a final dividend of **RMB 150,000,000** for the year ended December 31, 2023, was proposed - For the six months ended June 30, 2025, the Board did not recommend an interim dividend[44](index=44&type=chunk)[129](index=129&type=chunk) - In the first half of 2024, a final cash dividend of **RMB 150,000,000** for the year ended December 31, 2023, was proposed[44](index=44&type=chunk) [12. (Loss) Earnings Per Share](index=21&type=section&id=12.%20(Loss)%20Earnings%20Per%20Share) For the six months ended June 30, 2025, basic loss per share attributable to owners of the Company was **RMB 0.39**, compared to earnings per share of **RMB 0.07** in the same period last year (Loss) Earnings Per Share Calculation | Metric | For the Six Months Ended June 30, 2025 | For the Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | (Loss) profit for the period attributable to owners of the Company (RMB thousand) | (1,039,916) | 189,682 | | Weighted average number of shares for basic (loss) earnings per share | 2,678,507,404 | 2,685,475,449 | | Basic (loss) earnings per share (RMB) | (0.39) | 0.07 | | Diluted (loss) earnings per share (RMB) | (0.39) | 0.07 | - Potential ordinary shares from restricted shares were not included in diluted loss per share calculation due to their anti-dilutive effect, as the group incurred a loss[46](index=46&type=chunk) [13. Movements in Property, Plant and Equipment and Right-of-Use Assets](index=21&type=section&id=13.%20Movements%20in%20Property%2C%20Plant%20and%20Equipment%20and%20Right-of-Use%20Assets) During this interim period, the group paid approximately **RMB 124.7 million** for the acquisition of property, plant and equipment and entered into three new lease agreements, recognizing right-of-use assets and lease liabilities of approximately **RMB 114.0 million** - Approximately **RMB 124,660,000** was paid for the acquisition of property, plant and equipment to expand and upgrade fixed assets and hospital premises primarily located in China and the US[47](index=47&type=chunk) - Three new lease agreements were entered into, recognizing right-of-use assets and lease liabilities of approximately **RMB 113,999,000**[47](index=47&type=chunk) [14. Impairment Test on Goodwill and Intangible Assets](index=22&type=section&id=14.%20Impairment%20Test%20on%20Goodwill%20and%20Intangible%20Assets) The group recognized total impairment losses of **RMB 992,579 thousand** on goodwill and intangible assets related to HRC Management Group and Laos operations in the first half of 2025, primarily due to underperforming operating results, policy uncertainties, and business suspension - HRC Management Group's operating results fell short of expectations, and the implementation of California's IVF insurance coverage plan was delayed, leading to the recognition of goodwill and intangible asset impairment of **RMB 952,413,000**[49](index=49&type=chunk) - The suspension of operations in Laos resulted in the recognition of an impairment loss on licenses of **RMB 40,166,000**[50](index=50&type=chunk) - Goodwill of **RMB 631,594,000** related to HRC Management Group was fully impaired[49](index=49&type=chunk) [15. Equity Instruments at Fair Value Through Other Comprehensive Income](index=23&type=section&id=15.%20Equity%20Instruments%20at%20Fair%20Value%20Through%20Other%20Comprehensive%20Income) The group recognized a fair value change loss of **RMB 48.6 million** for equity instruments at fair value through other comprehensive income in the first half of 2025, primarily due to the failed equity investment in Jincheng Hongda - A fair value change loss of **RMB 48,627,000** on equity investment was recognized due to the failed investment in male fertility business by Jinxin Aijian, a wholly-owned subsidiary of Jincheng Hongda[51](index=51&type=chunk) - As of June 30, 2025, the fair value of this equity investment was **RMB 35,676,000** (2024: **RMB 84,303,000**)[51](index=51&type=chunk) [16. Trade and Other Receivables](index=23&type=section&id=16.%20Trade%20and%20Other%20Receivables) The group's trade and other receivables decreased by **6.4%** from **RMB 322.3 million** as of December 31, 2024, to **RMB 301.6 million** as of June 30, 2025 Trade and Other Receivables Details | Item | As of June 30, 2025 (RMB thousand) | As of December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Trade receivables | 199,330 | 234,406 | | Other receivables and prepayments | 131,515 | 116,992 | | Less: Loans receivable classified as non-current assets | (29,965) | (29,133) | | Total | 301,550 | 322,265 | Trade Receivables Ageing Analysis | Ageing | As of June 30, 2025 (RMB thousand) | As of December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within 90 days | 148,795 | 208,840 | | 91 to 180 days | 43,047 | 15,405 | | Over 180 days | 7,488 | 10,161 | | Total | 199,330 | 234,406 | [17. Trade and Other Payables](index=25&type=section&id=17.%20Trade%20and%20Other%20Payables) The group's trade and other payables increased by **1.7%** from **RMB 737.8 million** as of December 31, 2024, to **RMB 750.6 million** as of June 30, 2025 Trade and Other Payables Details | Item | As of June 30, 2025 (RMB thousand) | As of December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Trade payables | 233,168 | 216,965 | | Other payables | 517,384 | 520,807 | | Total | 750,552 | 737,772 | Trade Payables Ageing Analysis | Ageing | As of June 30, 2025 (RMB thousand) | As of December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within 90 days | 177,305 | 155,863 | | 91 to 180 days | 25,847 | 27,840 | | 181 to 365 days | 19,425 | 18,840 | | Over 365 days | 10,591 | 14,422 | | Total | 233,168 | 216,965 | [18. Bank Borrowings](index=26&type=section&id=18.%20Bank%20Borrowings) The group's total bank borrowings increased from **RMB 2,270.1 million** as of December 31, 2024, to **RMB 2,367.6 million** as of June 30, 2025, with a significant decrease in borrowings repayable within one year and a substantial increase in long-term borrowings Bank Borrowings Repayment Period Analysis | Repayment Period | As of June 30, 2025 (RMB thousand) | As of December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within one year | 464,009 | 1,277,537 | | Over one year but not exceeding two years | 325,792 | 288,327 | | Over two years but not exceeding three years | 1,170,790 | 646,470 | | Over three years | 406,967 | 57,762 | | Total | 2,367,558 | 2,270,096 | - New loans of **RMB 1,695,513,000** were raised during this interim period, and loans of **RMB 1,604,545,000** were repaid[59](index=59&type=chunk) - New borrowings include financing agreements for **USD 75,000,000** and offshore **RMB 550,000,000**, with annual interest rates ranging from **2.15% to 5.9%**[59](index=59&type=chunk)[60](index=60&type=chunk) [Industry and Regulatory Overview](index=28&type=section&id=Industry%20and%20Regulatory%20Overview) This section provides an overview of the industry trends, including declining birth rates and increasing ARS penetration, alongside supportive government policies and medical insurance coverage [Industry Trends](index=28&type=section&id=Industry%20Trends) China's birth rate continuously declined from 2016-2023 but is expected to stabilize and enter an era of older parenthood from 2025-2040; despite falling birth numbers, the increasing number of infertile couples has driven ARS treatment cycles to grow against the trend, with China's ARS penetration still significantly lower than in Europe and the US, indicating huge future growth potential - From 2016 to 2023, China's birth rate plummeted, with births decreasing from approximately **15 million** to **9 million** annually[61](index=61&type=chunk) - China's birth population is projected to stabilize from **2025 to 2040**, entering an era of older parenthood[61](index=61&type=chunk) - China's assisted reproductive penetration rate was approximately **9%** in 2023, significantly lower than Europe (approximately **36%**) and the US (approximately **33%**)[61](index=61&type=chunk) [Regulatory Overview](index=28&type=section&id=Regulatory%20Overview) Since 2021, the Chinese government has introduced a series of pro-natalist policies, including allowing three children, providing birth subsidies, and gradually incorporating assisted reproductive technologies into national medical insurance coverage to address low birth rates and an aging population - At the end of 2024, the national population decreased by **1.39 million** year-over-year, with **9.54 million** births and a birth rate of **6.77‰**[62](index=62&type=chunk) - In July 2021, the Chinese government issued the "Decision on Optimizing Fertility Policies to Promote Long-term Balanced Population Development," allowing couples to have up to **3 children**[63](index=63&type=chunk) - As of March 2025, all **31 provinces/municipalities** and the Xinjiang Production and Construction Corps in mainland China have included assisted reproductive medical services in medical insurance coverage[64](index=64&type=chunk) - The 2025 Government Work Report for the first time proposed establishing a special fund covering the entire "childbirth, rearing, and education" cycle, focusing on promoting the distribution of childcare subsidies[65](index=65&type=chunk) [Business Update](index=31&type=section&id=Business%20Update) This section provides an update on the group's operational data, including institutional numbers and OPU cycles, and reviews the performance of its key regional businesses [Key Operating Data](index=31&type=section&id=Key%20Operating%20Data) As of June 30, 2025, the group's total number of institutions increased to **23**, with oocyte pick-up (OPU) cycles decreasing by **8.3%** year-over-year, yet total medical service revenue remained at a high level Operating Data as of June 30, 2025 | Region | Number of Institutions | OPU Cycles | Medical Service Revenue from Owned Institutions (RMB million) | Medical Service Revenue from IOT/MSA Institutions (RMB million) | Total Medical Service Revenue (RMB million) | | :--- | :--- | :--- | :--- | :--- | :--- | | Chengdu | 3 | 7,111 | 581.3 | 186.2 | 767.5 | | Greater Bay Area | 3 | 2,539 | 205.9 | — | 205.9 | | Kunming and Wuhan | 3 | 2,059 | 131.0 | — | 131.0 | | Overseas | 14 | 2,099 | 76.7 | 328.7 | 405.4 | | Total | 23 | 13,808 | 994.9 | 514.9 | 1,509.8 | Operating Data as of June 30, 2024 | Region | Number of Institutions | OPU Cycles | Medical Service Revenue from Owned Institutions (RMB million) | Medical Service Revenue from IOT/MSA Institutions (RMB million) | Total Medical Service Revenue (RMB million) | | :--- | :--- | :--- | :--- | :--- | :--- | | Chengdu | 3 | 7,571 | 649.1 | 233.6 | 882.7 | | Greater Bay Area | 3 | 3,022 | 241.9 | — | 241.9 | | Kunming and Wuhan | 3 | 2,133 | 130.0 | — | 130.0 | | Overseas | 11 | 2,325 | 75.1 | 316.0 | 391.1 | | Total | 20 | 15,051 | 1,096.1 | 549.6 | 1,645.7 | - The group's consolidated revenue represents management fees from IOT/MSA institutions, approximately **RMB 252.7 million** in the first half of 2025 and **RMB 287.4 million** in the first half of 2024[69](index=69&type=chunk) [Chengdu Operations](index=32&type=section&id=Chengdu%20Operations) Chengdu operations' OPU cycles decreased by **6.1%** year-over-year, mainly due to fewer first-visit patients and a significant increase in IUI cycle proportion; the company actively expands third-generation IVF, prenatal diagnosis, genetic counseling, and full-lifecycle health management, enhancing VIP service penetration - OPU cycles decreased by **6.1%** from **7,571** to **7,111**, with a significant increase in IUI patient numbers[70](index=70&type=chunk) - Third-generation IVF services have served over **1,500 patients**, and an integrated IVF-maternity-pediatric model has been launched[70](index=70&type=chunk)[71](index=71&type=chunk) - The VIP penetration rate at Sichuan Jinxin Xinan Hospital (Bisheng Campus) continuously increased to approximately **20.8%**[71](index=71&type=chunk) [Greater Bay Area Operations](index=33&type=section&id=Greater%20Bay%20Area%20Operations) Greater Bay Area operations' OPU cycles decreased by **16.0%** year-over-year, primarily due to a significant increase in IUI cycle proportion caused by changes in clinical consultation processes; the Shenzhen campus is exploring integrated IVF-maternity care, high-end VIP services, and new technology applications, with plans for further expansion through new hospital construction - OPU cycles decreased by **16.0%** from **3,022** to **2,539**, with a significant increase in IUI patient numbers[72](index=72&type=chunk) - The Shenzhen campus is exploring integrated IVF-maternity care, high-end VIP services, and has added male azoospermia micro-TESE and embryo protein screening technologies[72](index=72&type=chunk) [Wuhan and Kunming Operations](index=34&type=section&id=Wuhan%20and%20Kunming%20Operations) Kunming and Wuhan operations' OPU cycles decreased by **3.5%** year-over-year, primarily due to renovations at Jiuzhou Hospital and Hewanjia Hospital; both regions focus on core assisted reproduction while expanding integrated IVF-obstetrics, new technology applications, and diversified specialized clinics - OPU cycles decreased by **3.5%** from **2,133** to **2,059**, mainly impacted by hospital renovations[74](index=74&type=chunk) - Actively promoting the application of artificial sperm activation, Embryo Glue transfer medium, AI, and time-lapse imaging technologies in assisted reproduction to improve pregnancy rates[74](index=74&type=chunk) - Wuhan Jinxin Hospital's delivery volume increased by **145%**, and it expanded reproductive andrology, gynecology diagnosis and treatment, and traditional Chinese medicine assisted pregnancy services[75](index=75&type=chunk) [HRC Medical (US) Operations](index=35&type=section&id=HRC%20Medical%20(US)%20Operations) HRC Medical's total OPU cycles decreased by **8.9%** year-over-year in the first half, but revenue remained largely flat; international treatment cycles declined due to US-China relations and delayed California IVF insurance legislation; the company continues to attract top physicians, expand into new markets, and optimize internal operational efficiency, but faced profit pressure in the first half - Total OPU cycles decreased by **8.9%** from **2,258** to **2,058**, but revenue remained largely flat[76](index=76&type=chunk) - International treatment cycles declined due to fluctuations in US-China relations and the delayed implementation of California's SB729 bill[76](index=76&type=chunk) - **7 new physicians** are expected to join in 2025, bringing the total number of in-house physicians to **30**, with initial entry into the San Francisco area of Northern California[77](index=77&type=chunk) - Physician expansion, medical team building, and clinic expansion exerted significant pressure on profitability in the first half[77](index=77&type=chunk) [Outlook and Future Strategies](index=36&type=section&id=Outlook%20and%20Future%20Strategies) This section details the group's future strategies, including enhancing operational management, developing consumer medical services, alleviating patient financial burdens, expanding its business network, and investing in talent and ESG initiatives [Replicable Operating Management System](index=37&type=section&id=Replicable%20Operating%20Management%20System) The group has gradually established a specialist-based operating management system, enhancing medical quality and market competitiveness through strengthened R&D of new technologies, personalized diagnosis and treatment, quality control standards, patient services, brand promotion, and talent development - Continuously strengthening the introduction and R&D investment in new technologies and methods, such as introducing "in vitro activation of primordial follicles" technology for the ovarian dysfunction specialized disease group[82](index=82&type=chunk)[83](index=83&type=chunk) - Establishing specialized quality control standards and assessment mechanisms to ensure assisted reproductive success rates are above the industry average[82](index=82&type=chunk) - Providing new insights for complex diseases by conducting clinical research projects, such as "Application of Artificial Intelligence (AI) Quality Control in Obstetric Ultrasound Examinations"[83](index=83&type=chunk) [Focus on Developing Consumer Medical Services with Excellence and Prudence](index=38&type=section&id=Focus%20on%20Developing%20Consumer%20Medical%20Services%20with%20Excellence%20and%20Prudence) The group prudently develops consumer medical services based on medical principles to meet diverse patient needs, including reproductive restoration and anti-aging, insomnia clinics, functional medicine centers, and adolescent health management, aiming to provide preventive, health-preserving, and conditioning services - Opening reproductive restoration and anti-aging clinics to address postpartum women's pelvic floor function repair and reproductive organ plastic surgery needs[85](index=85&type=chunk) - Opening insomnia clinics for postpartum and menopausal women's insomnia issues, employing non-pharmacological treatment plans[85](index=85&type=chunk)[86](index=86&type=chunk) - Opening functional medicine centers to provide lifestyle interventions, nutrient therapy, etc., for individuals preparing for pregnancy, experiencing difficulty conceiving, or with reproductive sub-health[86](index=86&type=chunk) [Alleviating Patient Financial Burden Through Innovative Commercial Insurance, Assisted Pregnancy Funds, and Other Means](index=39&type=section&id=Alleviating%20Patient%20Financial%20Burden%20Through%20Innovative%20Commercial%20Insurance%2C%20Assisted%20Pregnancy%20Funds%2C%20and%20Other%20Means) With assisted reproductive services now covered by medical insurance, the group further innovates by collaborating with insurance and banking institutions to launch a diversified insurance product system, including "IVF with 0 upfront cost and full refund if unsuccessful," and establishing good pregnancy funds and drug fee reductions, effectively lowering patient access barriers and financial pressure - All **31 provinces/municipalities** and the Xinjiang Production and Construction Corps in mainland China have included assisted reproductive medical services in medical insurance coverage[87](index=87&type=chunk) - Collaborating with insurance and banking institutions to launch an innovative and diversified insurance product system, including "IVF with **0 upfront cost** and **full refund if unsuccessful**"[88](index=88&type=chunk) - Launching various forms of support for families with fertility difficulties, such as good pregnancy funds, unsuccessful assisted pregnancy funds, drug fee reductions, and patient subsidies[88](index=88&type=chunk) [Expanding Business Network Through Organic Growth or Acquisitions](index=40&type=section&id=Expanding%20Business%20Network%20Through%20Organic%20Growth%20or%20Acquisitions) The group actively seeks business network expansion opportunities, preferring acquisitions in high-growth markets in China, while HRC Medical in the US will leverage policy benefits and physician resources to capture market share, and consolidate its leading position in Southeast Asia through investment in Morula; concurrently, due to regulatory uncertainties, the group decided to terminate its Laos operations - In China, the preference is to enter high-growth potential provincial capitals and cities with radiating capabilities through acquisitions[89](index=89&type=chunk) - California's SB729 commercial insurance bill, delayed until January 2026, is expected to significantly boost assisted reproductive treatment cycles in California by approximately **3 times**[90](index=90&type=chunk) - In Southeast Asia, the group acquired and subscribed for a **30% equity stake** in Morula, becoming its largest strategic investor, and dispatched expert teams to enhance medical quality[91](index=91&type=chunk) - Due to increasing regulatory uncertainties in the Laos IVF industry, the group decided to gradually terminate the operations of Jinrui Medical Center in the second half of 2025[91](index=91&type=chunk) [Talent Recruitment and Development Plan](index=41&type=section&id=Talent%20Recruitment%20and%20Development%20Plan) The group is committed to recruiting and retaining top medical professionals globally, continuously improving its internal development system, including building a leading expert system, supporting young key talents, collaborating with public hospitals, increasing recruitment of fresh graduates, and implementing a "doctors as partners" mechanism - In China, building a multi-level expert and talent system, including introducing leading experts and supporting young core backbone experts[92](index=92&type=chunk) - Welcoming excellent doctors from public hospitals to collaborate through joining, multi-site practice, consultations, and increasing recruitment and training for medical fresh graduates[93](index=93&type=chunk) - Continuing to implement the "doctors as partners" mechanism, incentivizing employees through share award schemes[93](index=93&type=chunk) - In the US, HRC Management collaborates with the Keck School of Medicine of USC to jointly cultivate IVF specialists[94](index=94&type=chunk) [Environmental, Social and Governance (ESG)](index=42&type=section&id=Environmental%2C%20Social%20and%20Governance%20(ESG)) The group is committed to strengthening ESG initiatives, creating social value by building new assisted reproductive disciplines, conducting scientific research and innovation, developing professional courses to empower the industry, promoting hospital digital transformation, and enhancing medical quality management; concurrently, it actively promotes healthcare accessibility and adheres to green operations - Adhering to the strategic positioning of building new assisted reproductive disciplines, actively promoting new disciplines and conducting scientific research and innovation[95](index=95&type=chunk) - Developing professional courses to empower the growth of industry medical staff, enhancing medical quality and standards[95](index=95&type=chunk) - Actively promoting healthcare accessibility through free and charitable clinics, charitable drug donations, and training for grassroots medical institutions[96](index=96&type=chunk) [Financial Review and Non-IFRS Measures](index=43&type=section&id=Financial%20Review%20and%20Non-IFRS%20Measures) This section provides a detailed financial review, analyzing revenue, costs, and various expenses, and reconciles non-IFRS measures such as adjusted net profit and EBITDA [Revenue](index=43&type=section&id=Revenue) The group's revenue decreased by **10.7%** from **RMB 1,443.8 million** in the first half of 2024 to **RMB 1,288.6 million** in the first half of 2025, primarily due to decreased OPU cycles, increased IUI patient proportion, lower average price per cycle, and reduced traditional delivery volumes - Revenue decreased by **10.7%**, mainly due to a reduction of approximately **RMB 87.3 million** in ARS and related revenue, **RMB 34.7 million** in management services and related revenue, and **RMB 17.4 million** in obstetric and related revenue[97](index=97&type=chunk) - A decrease of approximately **8.3%** in OPU cycles, an increase of approximately **10.04%** in the proportion of IUI patients among ARS patients, and a **7% to 8%** decrease in average price per cycle after national medical insurance adjustments collectively led to reduced ARS revenue[97](index=97&type=chunk) [Cost of Revenue](index=43&type=section&id=Cost%20of%20Revenue) The group's cost of revenue increased by **4.2%** from **RMB 860.7 million** in the first half of 2024 to **RMB 897.2 million** in the first half of 2025, primarily due to the adjustment of amortization period for Wuhan Jinxin Hospital's renovation costs and increased labor and operating costs from HRC Medical's new clinics - Cost of revenue increased by **4.2%**, mainly due to **RMB 21.1 million** in Wuhan Jinxin Hospital's renovation costs recognized in cost of revenue after amortization period adjustment, and increased labor and operating costs from HRC Medical's **4 new clinics**[98](index=98&type=chunk) [Gross Profit](index=44&type=section&id=Gross%20Profit) The group's gross profit decreased by **32.9%** from **RMB 583.0 million** in the first half of 2024 to **RMB 391.4 million** in the first half of 2025, with gross margin declining from **40.4%** to **30.4%** - Gross profit decreased by **32.9%**, with gross margin declining from **40.4%** to **30.4%**[99](index=99&type=chunk) [Other Income](index=44&type=section&id=Other%20Income) The group's other income decreased by **51.7%** from **RMB 26.5 million** in the first half of 2024 to **RMB 12.8 million** in the first half of 2025, primarily due to reduced government subsidies - Other income decreased by **51.7%**, mainly due to a year-over-year reduction in government grants of approximately **RMB 13.0 million**[100](index=100&type=chunk) [Other Expenses](index=44&type=section&id=Other%20Expenses) The group's other expenses significantly increased from **RMB 0.6 million** in the first half of 2024 to **RMB 52.5 million** in the first half of 2025, primarily due to a one-off capital injection into Jinjiang District Maternal and Child Health Hospital - Other expenses increased by approximately **8,650%**, mainly due to a one-off capital injection of **RMB 50 million** to support the upgrade and operational capacity enhancement of Jinjiang District Maternal and Child Health Hospital[101](index=101&type=chunk) [Other Gains and Losses](index=44&type=section&id=Other%20Gains%20and%20Losses) The group recorded a net other loss of **RMB 7.8 million** in the first half of 2025, primarily due to foreign exchange losses incurred - A net other loss of **RMB 7.8 million** was recorded, mainly due to foreign exchange losses (first half of 2024: **RMB 3.8 million**)[102](index=102&type=chunk) [Research and Development Expenses](index=44&type=section&id=Research%20and%20Development%20Expenses) The group's research and development expenses decreased by **17.4%** from **RMB 10.9 million** in the first half of 2024 to **RMB 9.0 million** in the first half of 2025 - Research and development expenses decreased by **17.4%**, primarily including staff costs for the R&D team at Jinxin Medical Innovation Research Center[103](index=103&type=chunk) [Selling and Distribution Expenses](index=44&type=section&id=Selling%20and%20Distribution%20Expenses) The group's selling and distribution expenses decreased by **14.5%** from **RMB 86.3 million** in the first half of 2024 to **RMB 73.8 million** in the first half of 2025, primarily due to reduced revenue and optimized marketing strategies - Selling and distribution expenses decreased by **14.5%**, mainly due to reduced revenue and the group's optimized marketing strategies[105](index=105&type=chunk) [Administrative Expenses](index=45&type=section&id=Administrative%20Expenses) The group's administrative expenses increased by **1.5%** from **RMB 215.7 million** in the first half of 2024 to **RMB 219.0 million** in the first half of 2025 - Administrative expenses increased by **1.5%**, primarily including staff costs (including amortization costs of employee share option schemes), depreciation, and amortization[106](index=106&type=chunk) [Finance Costs](index=45&type=section&id=Finance%20Costs) The group's finance costs increased by **51.2%** from **RMB 28.5 million** in the first half of 2024 to **RMB 43.1 million** in the first half of 2025, primarily due to reduced capitalized interest and increased finance expenses recognized for US property leases under lease accounting standards - Finance costs increased by **51.2%**, mainly due to reduced capitalized interest and increased finance expenses recognized for US property leases under lease accounting standards[107](index=107&type=chunk) [Income Tax Expense](index=45&type=section&id=Income%20Tax%20Expense) The group's income tax expense decreased from **RMB 75.4 million** in the first half of 2024 to a negative **RMB 44.4 million** in the first half of 2025, primarily due to the reversal of deferred tax liabilities related to US intangible asset impairment - Income tax expense decreased to a negative **RMB 44.4 million**, mainly due to the reversal of deferred tax liabilities of approximately **RMB 89.8 million** related to US intangible asset impairment[108](index=108&type=chunk) [Net Profit (Loss)](index=45&type=section&id=Net%20Profit%20(Loss)) The group recorded a net loss of approximately **RMB 1,044.1 million** in the first half of 2025, compared to a net profit of approximately **RMB 190.3 million** in the first half of 2024, primarily impacted by one-off events (such as goodwill impairment, financial asset impairment, one-off capital injection) and decreased operating profit - Turned from a net profit of **RMB 190.3 million** in the first half of 2024 to a net loss of **RMB 1,044.1 million** in the first half of 2025[109](index=109&type=chunk) - Key reasons for the loss include: goodwill and intangible asset impairment related to US and Laos operations, financial asset impairment losses, a one-off capital injection into Jinjiang District Maternal and Child Health Hospital, and depreciation of Wuhan Jinxin Hospital's renovation costs[109](index=109&type=chunk) - The decline in operating profit is attributed to the impact of assisted reproduction being included in China's medical insurance coverage on service mix and pricing, unfavorable factors in China's obstetric industry, and increased expansion expenses for US operations[110](index=110&type=chunk) [Non-IFRS Measures](index=46&type=section&id=Non-IFRS%20Measures) The group's non-IFRS adjusted net profit decreased by **68.3%** from **RMB 259.6 million** in the first half of 2024 to **RMB 82.3 million** in the first half of 2025; non-IFRS adjusted EBITDA decreased by **46.3%** from **RMB 418.1 million** in the first half of 2024 to **RMB 224.7 million** in the first half of 2025 Reconciliation of Non-IFRS Financial Measures | Item | For the Six Months Ended June 30, 2025 (RMB thousand) | For the Six Months Ended June 30, 2024 (RMB thousand) | | :--- | :--- | :--- | | (Loss) profit for the period | (1,044,120) | 190,313 | | Add: Amortization cost of employee share option scheme | 15,201 | 37,115 | | Add: Amortization and depreciation of medical practice licenses, non-compete agreements, etc. | 32,287 | 32,169 | | Add: Goodwill and intangible asset impairment related to US and Laos operations | 908,847 | – | | Add: Financial asset impairment losses | 99,009 | – | | Add: One-off capital injection into Jinjiang District Maternal and Child Health Hospital | 50,000 | – | | Add: Depreciation of Wuhan Jinxin Hospital renovation costs | 21,074 | – | | Non-IFRS adjusted net (loss) profit | 82,298 | 259,597 | | Non-IFRS (negative) EBITDA | (938,166) | 380,948 | | Non-IFRS adjusted EBITDA | 224,657 | 418,063 | - Non-IFRS adjusted net profit decreased by **68.3%**, and non-IFRS adjusted EBITDA decreased by **46.3%**[111](index=111&type=chunk)[112](index=112&type=chunk) - US operations impairment was due to HRC Medical's underperformance, uncertainties from new young doctors joining and clinic expansion, and the delayed implementation of California's IVF insurance coverage plan[116](index=116&type=chunk) [Inventories](index=48&type=section&id=Inventories) The group's inventories decreased by **9.2%** from **RMB 50.9 million** as of December 31, 2024, to **RMB 46.2 million** as of June 30, 2025, primarily due to improved supply chain and inventory management efficiency - Inventories decreased by **9.2%**, mainly due to improved supply chain and inventory management efficiency[115](index=115&type=chunk) [Trade and Other Receivables](index=48&type=section&id=Trade%20and%20Other%20Receivables) The group's trade and other receivables decreased by **6.4%** from **RMB 322.3 million** as of December 31, 2024, to **RMB 301.6 million** as of June 30, 2025 - Trade and other receivables decreased by **6.4%**[116](index=116&type=chunk) [Trade and Other Payables](index=49&type=section&id=Trade%20and%20Other%20Payables) The group's trade and other payables increased by **1.7%** from **RMB 737.8 million** as of December 31, 2024, to **RMB 750.6 million** as of June 30, 2025 - Trade and other payables increased by **1.7%**[117](index=117&type=chunk) [Other Financial and Corporate Information](index=49&type=section&id=Other%20Financial%20and%20Corporate%20Information) This section covers the group's liquidity, capital sources, significant investments, borrowings, contingent liabilities, risk management, employee information, and corporate governance compliance [Liquidity and Capital Resources](index=49&type=section&id=Liquidity%20and%20Capital%20Resources) The group's business operations and expansion plans require substantial funding, obtained through listing, placings, and bank financing; as of June 30, 2025, the capital structure comprised **33.9%** debt and **66.1%** equity, and the directors believe sufficient resources are available - The group obtained funding through listing, placings, and bank financing, with new loans of approximately **RMB 1,695.5 million** in 2025[118](index=118&type=chunk) - As of June 30, 2025, the capital structure was **33.9%** debt and **66.1%** equity (December 31, 2024: **30.8%** debt and **69.2%** equity)[118](index=118&type=chunk) [Significant Investments, Material Acquisitions and Disposals](index=49&type=section&id=Significant%20Investments%2C%20Material%20Acquisitions%20and%20Disposals) Except for matters disclosed in this report, as of June 30, 2025, the Company held no significant investments and had no material acquisitions or disposals - As of June 30, 2025, the Company held no significant investments and had no material acquisitions or disposals concerning subsidiaries, associates, and joint ventures[119](index=119&type=chunk) [Borrowings](index=49&type=section&id=Borrowings) As of June 30, 2025, the group's bank borrowings amounted to **RMB 2,367.6 million**, with Jinyun Building pledged as collateral for bank loans - As of June 30, 2025, the group's bank borrowings amounted to **RMB 2,367.6 million**[120](index=120&type=chunk) - Jinyun Building was pledged as collateral for equivalent bank loans[121](index=121&type=chunk) [Contingent Liabilities and Guarantees](index=50&type=section&id=Contingent%20Liabilities%20and%20Guarantees) As of June 30, 2025, the group had no material contingent liabilities or guarantees - As of June 30, 2025, the group had no material contingent liabilities or guarantees[122](index=122&type=chunk) [Contractual Obligations](index=50&type=section&id=Contractual%20Obligations) As of June 30, 2025, the group had no contractual obligations that would materially affect its financial position or operating results - As of June 30, 2025, the group had no contractual obligations that would materially affect its financial position or operating results[123](index=123&type=chunk) [Interest-Bearing Debt Ratio](index=50&type=section&id=Interest-Bearing%20Debt%20Ratio) As of June 30, 2025, the group's interest-bearing debt ratio was **16.9%**, an increase from **15.1%** as of December 31, 2024, primarily due to increased bank borrowings - As of June 30, 2025, the group's interest-bearing debt ratio was **16.9%** (December 31, 2024: **15.1%**), with the increase primarily due to increased bank borrowings[124](index=124&type=chunk) [Risk Management](index=50&type=section&id=Risk%20Management) The group faces currency risk and interest rate risk but considers current risks non-material and has not adopted hedging measures; liquidity risk is managed by maintaining sufficient reserves, continuously monitoring cash flows, and matching the maturities of financial assets and liabilities - The group faces currency risk (RMB, HKD, USD transactions) and interest rate risk (floating-rate bank balances) but considers current risks non-material and has not adopted hedging measures[125](index=125&type=chunk)[126](index=126&type=chunk) - Liquidity risk is managed by maintaining sufficient reserves, continuously monitoring cash flows, and matching the maturities of financial assets and liabilities[127](index=127&type=chunk) [Employees and Remuneration Policy](index=51&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the group had **3,365 employees** with staff costs of approximately **RMB 396.7 million**; the group has a 2022 Share Award Scheme and has terminated its share option scheme and pre-IPO restricted share unit scheme - As of June 30, 2025, the group and its network of medical institutions had **3,365 employees**, with **3,037** in China and **328** overseas[128](index=128&type=chunk) - Staff costs (including directors' emoluments) for the six months ended June 30, 2025, were approximately **RMB 396.7 million**, a year-over-year increase of **6.8%**[128](index=128&type=chunk) - The group has a 2022 Share Award Scheme and has terminated its share option scheme and pre-IPO restricted share unit scheme[128](index=128&type=chunk) [Interim Dividend](index=51&type=section&id=Interim%20Dividend) The Board did not recommend an interim dividend for the six months ended June 30, 2025 - The Board did not recommend an interim dividend for the six months ended June 30, 2025 (2024: nil)[129](index=129&type=chunk) [Compliance with Corporate Governance Code](index=52&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) The Company consistently complied with all applicable code provisions of the Corporate Governance Code set out in Appendix C1 to the Listing Rules for the six months ended June 30, 2025 - The Company consistently complied with all applicable code provisions of the Corporate Governance Code for the six months ended June 30, 2025[130](index=130&type=chunk) [Compliance with Standard Securities Trading Code](index=52&type=section&id=Compliance%20with%20Standard%20Securities%20Trading%20Code) Following specific inquiries to all Directors, each Director confirmed continuous compliance with the required standards of the Standard Code set out in Appendix C3 to the Listing Rules for the six months ended June 30, 2025 - Each Director confirmed continuous compliance with the required standards of the Standard Code set out in Appendix C3 to the Listing Rules for the six months ended June 30, 2025[131](index=131&type=chunk) [Use of Proceeds from Listing](index=52&type=section&id=Use%20of%20Proceeds%20from%20Listing) The Company's total net proceeds from listing were approximately **HKD 2,808.1 million**; as of June 30, 2025, **HKD 2,770.4 million** had been utilized, with the remaining **HKD 37.7 million** primarily allocated for R&D investments Use of Proceeds from Listing | Planned Use | Percentage of Total Net Proceeds | Actual Use as of June 30, 2025 (HKD million) | Unutilized Net Proceeds (HKD million) | | :--- | :--- | :--- | :--- | | Expansion and upgrade of China network | 25.0% | 702.0 | – | | Potential acquisitions of additional ARS medical institutions in China | 20.0% | 561.6 | – | | Investment in R&D | 10.0% | 243.1 | 37.7 | | Potential acquisitions of ARS service chain suppliers and businesses | 20.0% | 561.6 | – | | Enhancing brand focus and overall ARS awareness | 15.0% | 421.2 | – | | Working capital and general corporate purposes | 10.0% | 280.9 | – | | Total | 100% | 2,770.4 | 37.7 | - The remaining unutilized net proceeds of **HKD 37.7 million** are expected to be used for R&D investments by December 2026[133](index=133&type=chunk) [Use of Proceeds from Placing](index=54&type=section&id=Use%20of%20Proceeds%20from%20Placing) The Company completed a placing in February 2021, with net proceeds of approximately **HKD 1,253.5 million** fully utilized for M&A of ARS institutions in China and overseas, as well as general corporate and working capital purposes Use of Proceeds from Placing | Planned Use | Percentage of Total Net Proceeds | Actual Use as of June 30, 2025 (HKD million) | | :--- | :--- | :--- | | Acquisition of ARS institutions in China | 80.0% | 1,002.8 | | Acquisition of ARS institutions outside China | 15.0% | 188.0 | | General corporate and working capital purposes | 5.0% | 62.7 | | Total | 100% | 1,253.5 | - Net proceeds from the placing of approximately **HKD 1,253.5 million** have been fully utilized[136](index=136&type=chunk) [Use of Proceeds from Top-up Placing](index=55&type=section&id=Use%20of%20Proceeds%20from%20Top-up%20Placing) The Company completed a top-up placing in January 2023, with net proceeds of approximately **HKD 1,161.6 million** fully utilized for the redemption and repayment of convertible bonds, as well as general corporate and working capital purposes Use of Proceeds from Top-up Placing | Planned Use | Percentage of Total Net Proceeds | Actual Use as of June 30, 2025 (HKD million) | | :--- | :--- | :--- | | Redemption and repayment of convertible bonds | 85.0% | 987.96 | | Working capital and general corporate purposes | 15.0% | 174.35 | | Total | 100% | 1,162.31 | - Net proceeds from the top-up placing of approximately **HKD 1,161.6 million** have been fully utilized[138](index=138&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=56&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) During the reporting period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities - During the reporting period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[139](index=139&type=chunk) [Audit and Risk Management Committee](index=57&type=section&id=Audit%20and%20Risk%20Management%20Committee) The Board has established an Audit and Risk Management Committee responsible for assisting the Board in monitoring the Company's compliance with laws and regulations, internal control policies, financial management processes, and risk management systems - The Audit and Risk Management Committee is chaired by Mr. Ye Changqing, an independent non-executive director, with primary responsibilities including monitoring the Company's compliance with laws and regulations, internal controls, and risk management[140](index=140&type=chunk) [Review of Interim Results](index=57&type=section&id=Review%20of%20Interim%20Results) The Audit and Risk Management Committee has reviewed the group's unaudited consolidated financial statements for the six months ended June 30, 2025, deeming them compliant with applicable accounting standards, laws, and regulations, and adequately disclosed - The Audit and Risk Management Committee has reviewed the interim results, deeming them compliant with applicable accounting standards, laws, and regulations, and adequately disclosed[141](index=141&type=chunk) [Events After Reporting Period](index=57&type=section&id=Events%20After%20Reporting%20Period) Except for those disclosed in this announcement, there were no material events after the reporting period as of the date of this announcement - Except for those disclosed in this announcement, there were no material events after the reporting period as of the date of this announcement[142](index=142&type=chunk) [Publication of Interim Results Announcement and 2025 Interim Report](index=58&type=section&id=Publication%20of%20Interim%20Results%20Announcement%20and%202025%20Interim%20Report) This interim results announcement has been published on the Stock Exchange and the Company's website, and the 2025 interim report will be dispatched to shareholders and published on relevant websites in due course - This interim results announcement is published on the Stock Exchange website (www.hkexnews.hk) and the Company's website (www.jxr-fertility.com)[143](index=143&type=chunk) [Definitions](index=58&type=section&id=Definitions) This section provides definitions for key terms and abbreviations used in the report, such as "ARS" (Assisted Reproductive Services), "IFRS" (International Financial Reporting Standards), and "IOT" (Invest-Operate-Transfer) - This section provides definitions for key terms and abbreviations used in the report, such as **"ARS"** (Assisted Reproductive Services), **"IFRS"** (International Financial Reporting Standards), and **"IOT"** (Invest-Operate-Transfer)[144](index=144&type=chunk)[148](index=148&type=chunk) [Board Information](index=63&type=section&id=Board%20Information) This section provides details on the composition of the Company's Board of Directors, including executive, non-executive, and independent non-executive members - The Company's Board of Directors includes Executive Directors Dr. John G. Wilcox, Mr. Dong Yang, Ms. Lu Rong, and Dr. Geng Lihong; Chairman and Non-executive Director Mr. Zhong Yong, and Non-executive Directors Mr. Fang Min, Ms. Hu Zhe, and Ms. Yan Xiaoqing; and Independent Non-executive Directors Dr. Zhuang Yiqiang, Mr. Li Jianwei, Mr. Wang Xiaobo, and Mr. Ye Changqing[153](index=153&type=chunk)

Financial Highlights [Condensed Financial Highlights](index=1&type=section&id=簡明財務摘要) Ximei Resources Holding Limited's interim results for the six months ended June 30, 2025, show revenue increased by 5.7% to RMB 954,200 thousand, with profit for the period surging by 71.4% to RMB 107,493 thousand. Gross margin improved by 2.6 percentage points to 23.7%. Basic earnings per share grew by 47.5% to RMB 0.26. Current ratio and quick ratio decreased, while the gearing ratio increased. Financial Performance (RMB thousand) | Metric | Six Months Ended June 30, 2025 (RMB thousand) | Six Months Ended June 30, 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 954,200 | 902,593 | 5.7% | | Cost of Sales | (727,878) | (712,017) | 2.2% | | Gross Profit | 226,322 | 190,576 | 18.8% | | Gross Margin | 23.7% | 21.1% | 2.6 percentage points | | Profit Before Tax | 130,397 | 75,695 | 72.3% | | Profit for the Period | 107,493 | 62,721 | 71.4% | | Profit Attributable to Owners of the Company | 91,821 | 62,266 | 47.5% | | Basic Earnings Per Share (RMB) | 0.26 | 0.17 | 47.5% | Financial Position (RMB thousand) | Metric | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Current Ratio | 2.00 | 2.26 | (11.5%) | | Quick Ratio | 0.84 | 1.20 | (30%) | | Gearing Ratio | 32.2% | 26.7% | 5.5 percentage points | Condensed Consolidated Financial Statements [Condensed Consolidated Statement of Profit or Loss](index=2&type=section&id=簡明綜合損益表) For the six months ended June 30, 2025, the company's revenue increased by 5.7%, gross profit by 18.8%, and profit for the period by 71.4%, driven by significant growth in other income and net gains and a reduction in administrative expenses. Condensed Consolidated Statement of Profit or Loss (RMB thousand) | Metric | 2025 (RMB thousand) | 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 954,200 | 902,593 | 5.7% | | Cost of Sales | (727,878) | (712,017) | 2.2% | | Gross Profit | 226,322 | 190,576 | 18.8% | | Other Income and Net Gains | 10,930 | 7,302 | 49.7% | | Selling and Distribution Expenses | (9,725) | (9,841) | (1.2%) | | Administrative Expenses | (73,938) | (87,491) | (15.5%) | | Finance Costs | (12,504) | (13,874) | (9.9%) | | Profit Before Tax | 130,397 | 75,695 | 72.3% | | Income Tax Expense | (22,904) | (12,974) | 76.5% | | Profit for the Period | 107,493 | 62,721 | 71.4% | | Profit Attributable to Owners of the Company | 91,821 | 62,266 | 47.5% | | Basic Earnings Per Share (RMB) | 0.26 | 0.17 | 52.9% | [Condensed Consolidated Statement of Comprehensive Income](index=3&type=section&id=簡明綜合全面收益表) For the six months ended June 30, 2025, the company's total comprehensive income for the period was RMB 101,599 thousand, a 52.2% increase from RMB 66,732 thousand in the prior year, primarily driven by a significant increase in profit for the period despite higher other comprehensive losses. Condensed Consolidated Statement of Comprehensive Income (RMB thousand) | Metric | 2025 (RMB thousand) | 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Profit for the Period | 107,493 | 62,721 | 71.4% | | Other Comprehensive (Loss)/Income for the Period | (5,894) | 4,011 | (247.0%) | | Total Comprehensive Income for the Period | 101,599 | 66,732 | 52.2% | | Attributable to Owners of the Company | 85,927 | 66,277 | 29.6% | | Non-controlling Interests | 15,672 | 455 | 3344.4% | [Condensed Consolidated Statement of Financial Position](index=4&type=section&id=簡明綜合財務狀況表) As of June 30, 2025, the company's total net assets increased to RMB 1,381,981 thousand. Total current assets rose by RMB 255,399 thousand, mainly due to a significant increase in inventories. Total current liabilities increased by RMB 217,877 thousand, primarily driven by higher bank borrowings. Condensed Consolidated Statement of Financial Position (RMB thousand) | Metric | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Total Non-current Assets | 540,539 | 550,990 | (1.9%) | | Total Current Assets | 1,846,364 | 1,590,965 | 16.1% | | Inventories | 1,074,556 | 744,508 | 44.3% | | Trade and Bills Receivables | 437,399 | 406,222 | 7.7% | | Cash and Bank Balances | 145,132 | 182,039 | (20.3%) | | Total Current Liabilities | 921,506 | 703,629 | 30.9% | | Bank Borrowings (Current) | 717,241 | 470,249 | 52.5% | | Net Assets | 1,381,981 | 1,300,625 | 6.3% | | Total Equity | 1,381,981 | 1,300,625 | 6.3% | Notes to the Condensed Consolidated Financial Information [Basis of Preparation](index=6&type=section&id=1.%20編製基準) This interim financial information is prepared in accordance with Hong Kong Accounting Standard 34 and the disclosure requirements of the Listing Rules, and should be read in conjunction with the 2024 annual consolidated financial statements. - Financial information is prepared in accordance with Hong Kong Accounting Standard 34 and Listing Rules, and should be read with the annual consolidated financial statements[7](index=7&type=chunk) [Changes in Accounting Policies and Disclosures](index=6&type=section&id=2.%20會計政策變動及披露) The accounting policies adopted in this period are consistent with the 2024 annual consolidated financial statements, except for the initial adoption of HKAS 21 (Amendment) "Lack of Exchangeability," which had no material impact on the preparation of the interim financial information. - Initial adoption of HKAS 21 (Amendment) "Lack of Exchangeability" had no material impact on the interim financial information[8](index=8&type=chunk) [Operating Segment Information](index=6&type=section&id=3.%20經營分部資料) The Group primarily engages in the manufacturing, sale, and trading of non-ferrous metal products and provides related processing services. Management views the Group's operating results as a whole and does not identify separate operating segments, thus no operating segment information is presented. - The Group primarily engages in non-ferrous metal product manufacturing, sales, and processing services, with management viewing operating results as a whole, thus no operating segment information is presented[9](index=9&type=chunk) [Geographical Information](index=7&type=section&id=地域資料) For the six months ended June 30, 2025, revenue from Mainland China accounted for 76.5% of total revenue, remaining the primary market, while revenue from Asia and EU markets grew significantly. Over 90% of non-current assets are located in Mainland China. Revenue by Geographical Region (RMB thousand) | Region | 2025 (RMB thousand) | 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | China | 730,539 | 708,787 | 3.1% | | United States of America | 53,382 | 86,128 | (38.0%) | | Canada | 48,601 | 54,841 | (11.4%) | | United Kingdom | 19,594 | 22,388 | (12.5%) | | European Union | 38,399 | 22,076 | 73.9% | | Asia | 53,701 | 7,270 | 638.7% | | Other Countries | 9,984 | 1,103 | 805.2% | | **Total Revenue** | **954,200** | **902,593** | **5.7%** | - Over **90%** of non-current assets are located in Mainland China, thus no geographical information for non-current assets is presented[11](index=11&type=chunk) [Information About Major Customers](index=7&type=section&id=有關主要客戶的資料) For the six months ended June 30, 2025, revenue from major customer A was RMB 208,591 thousand, a significant increase of 103.9% from the prior year, indicating increased reliance on this key customer. Revenue from Major Customer (RMB thousand) | Customer | 2025 (RMB thousand) | 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Customer A | 208,591 | 102,303 | 103.9% | [Revenue](index=8&type=section&id=4.%20收%20益) For the six months ended June 30, 2025, total revenue was RMB 954,200 thousand, entirely derived from contracts with customers. Revenue from tantalum-niobium wet-process compounds decreased by 23.6%, while revenue from tantalum-niobium metals and products increased by 20.3%, and revenue from trading products, processing services, and others grew by 22.0%. - For the six months ended June 30, 2025, all revenue was derived from contracts with customers[13](index=13&type=chunk) Revenue by Category of Goods or Services (RMB thousand) | Category of Goods or Services | 2025 (RMB thousand) | 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Tantalum-Niobium Wet-Process Compounds | 233,840 | 306,263 | (23.6%) | | Tantalum-Niobium Metals and Products | 504,590 | 419,538 | 20.3% | | Trading Products, Processing Services and Others | 215,770 | 176,792 | 22.0% | | **Total** | **954,200** | **902,593** | **5.7%** | [Profit Before Tax](index=8&type=section&id=5.%20除稅前溢利) For the six months ended June 30, 2025, profit before tax was RMB 130,397 thousand, a 72.3% increase from the prior year. Among major cost items, cost of self-produced goods decreased, while cost of trading goods and services increased, and R&D costs decreased. Profit Before Tax Components (RMB thousand) | Metric | 2025 (RMB thousand) | 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Cost of Inventories Sold: Self-produced Goods | 516,587 | 551,758 | (6.4%) | | Cost of Inventories Sold: Trading Goods | 183,186 | 142,636 | 28.4% | | Cost of Services Provided | 28,105 | 17,623 | 59.5% | | Depreciation of Property, Plant and Equipment | 19,949 | 15,681 | 27.2% | | Research and Development Costs | 33,466 | 36,993 | (9.5%) | | Impairment of Trade Receivables | 4,910 | 1,366 | 259.4% | | Net Exchange Differences | (1,703) | 7,585 | (122.5%) | [Income Tax](index=9&type=section&id=6.%20所得稅) For the six months ended June 30, 2025, income tax expense was RMB 22,904 thousand, a 76.5% increase from the prior year. The corporate income tax rate in Mainland China is 25%, but two high-tech enterprise subsidiaries enjoy a preferential tax rate of 15%. The Hong Kong profits tax rate is 16.5%, with some eligible entities enjoying a preferential rate of 8.25% on the first HK$2,000,000 of assessable profits. - The corporate income tax rate in Mainland China is **25%**, with two high-tech enterprise subsidiaries (Ximei Resources (Guangdong) Co., Ltd. and Ximei Resources (Guizhou) Technology Co., Ltd.) enjoying a preferential tax rate of **15%**[16](index=16&type=chunk) - The Hong Kong profits tax rate is **16.5%**, with some eligible subsidiaries paying **8.25%** on the first HK$2,000,000 of assessable profits[16](index=16&type=chunk) Income Tax Expense (RMB thousand) | Tax Category | 2025 (RMB thousand) | 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Current – China | 28,928 | 10,308 | 180.6% | | Current – Hong Kong | 954 | 141 | 576.6% | | Deferred | (6,978) | 2,525 | (376.3%) | | **Total Tax Expense for the Period** | **22,904** | **12,974** | **76.5%** | [Dividends](index=9&type=section&id=7.%20股%20息) The Board of Directors has declared a final dividend of HK cents 5.56 per share for the year ended December 31, 2024, totaling RMB 18,254 thousand. The Board does not recommend paying any interim dividend for the six months ended June 30, 2025. - The Board of Directors declared a final dividend of **HK cents 5.56** per share for the year ended December 31, 2024, totaling **RMB 18,254 thousand**[18](index=18&type=chunk) - The Board of Directors does not recommend paying any interim dividend for the six months ended June 30, 2025[18](index=18&type=chunk) [Earnings Per Share Attributable to Owners of the Company](index=9&type=section&id=8.%20本公司股東應佔每股盈利) For the six months ended June 30, 2025, both basic and diluted earnings per share were RMB 0.26, a 52.9% increase from RMB 0.17 in the prior year. Calculations are based on profit attributable to owners of the company and the weighted average number of ordinary shares outstanding. Earnings Per Share (RMB thousand) | Metric | 2025 (RMB thousand) | 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Profit Attributable to Owners of the Company | 91,821 | 62,266 | 47.5% | | Basic Earnings Per Share (RMB) | 0.26 | 0.17 | 52.9% | | Diluted Earnings Per Share (RMB) | 0.26 | 0.17 | 52.9% | - The weighted average number of ordinary shares used for calculating basic and diluted earnings per share was **359,123,395** in 2025 and **359,404,533** in 2024[20](index=20&type=chunk) [Property, Plant and Equipment](index=10&type=section&id=9.%20物業、廠房及設備) For the six months ended June 30, 2025, the Group's cost of acquiring property, plant and equipment items was RMB 25,368 thousand, a significant increase from the prior year. The net book value increased from RMB 387.0 million to RMB 390.5 million, primarily due to ongoing expansion of production facilities. Property, Plant and Equipment (RMB thousand) | Metric | 2025 (RMB thousand) | 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Cost of Acquiring Property, Plant and Equipment | 25,368 | 8,275 | 206.6% | | Net Book Value of Disposed Plant and Machinery | 351 | 2,092 | (83.2%) | | Net Gain on Disposal | 121 | 98 | 23.5% | - The net book value of property, plant and equipment increased from **RMB 387.0 million** as of December 31, 2024, to **RMB 390.5 million** as of June 30, 2025, primarily due to the continuous expansion of wet-process and pyro-process product production facilities[72](index=72&type=chunk) [Trade and Bills Receivables](index=11&type=section&id=10.%20貿易應收賬款及應收票據) As of June 30, 2025, total trade and bills receivables amounted to RMB 437,399 thousand, a 7.7% increase from December 31, 2024. Among these, trade receivables overdue by more than three months increased. Trade and Bills Receivables by Ageing (RMB thousand) | Ageing | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Within 1 month | 168,984 | 211,100 | (20.0%) | | 1 to 2 months | 99,010 | 80,694 | 22.7% | | 2 to 3 months | 87,691 | 62,617 | 40.0%) | | Over 3 months | 81,714 | 51,811 | 57.7% | | **Total** | **437,399** | **406,222** | **7.7%** | [Trade Payables](index=11&type=section&id=11.%20貿易應付賬款) As of June 30, 2025, total trade payables were RMB 48,620 thousand, a 22.0% decrease from December 31, 2024, primarily due to timely settlement of procurement payments to certain suppliers. Trade Payables by Ageing (RMB thousand) | Ageing | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Within 1 month | 26,179 | 27,323 | (4.2%) | | 1 to 2 months | 11,242 | 24,011 | (53.2%) | | 2 to 3 months | 2,800 | 764 | 266.5% | | Over 3 months | 8,399 | 10,168 | (17.3%) | | **Total** | **48,620** | **62,266** | **(22.0%)** | [Share Capital](index=12&type=section&id=12.%20股%20本) As of June 30, 2025, the company's authorized share capital was HK$10,000 thousand, and issued and fully paid share capital was HK$3,600 thousand, equivalent to RMB 3,228 thousand, remaining consistent with December 31, 2024. Issued and Fully Paid Share Capital (RMB thousand) | Metric | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Issued and Fully Paid Share Capital | 3,228 | 3,228 | Management Discussion and Analysis [Tantalum and Niobium Product Market Review](index=13&type=section&id=鉭鈮產品市場回顧) In the first half of 2025, the price of tantalum pentoxide shifted upwards, with an average annual price increase of 8.6%, mainly due to geopolitical conflicts affecting supply and increased procurement by smelting enterprises. Niobium pentoxide prices remained stable with an upward trend, increasing by 0.1% on average, supported by tight niobium ore supply and optimistic downstream demand. - In the first half of 2025, the average annual price of tantalum pentoxide (99.5% ex-factory China) was **RMB 1,728.4 per kg**, an increase of **8.6%** compared to the 2024 full-year average price[25](index=25&type=chunk) - The rapid increase in tantalum ore prices was primarily due to geopolitical conflicts between Congo (DRC) and Rwanda affecting tantalum ore supply, and increased procurement by smelting enterprises after the Chinese New Year[25](index=25&type=chunk) - In the first half of 2025, the average annual tax-inclusive price of niobium pentoxide (99.5% min ex-factory China) was **RMB 378.6 per kg**, an increase of **0.1%** compared to the 2024 full-year average price[28](index=28&type=chunk) - Tight niobium ore supply and optimistic downstream demand supported the high-level consolidation of niobium pentoxide prices[28](index=28&type=chunk) [Tantalum and Niobium Downstream Application Trends](index=15&type=section&id=鉭鈮下游應用發展趨勢) Tantalum and niobium products demonstrate broad application prospects and growth potential across various downstream sectors, particularly benefiting from the development of emerging technologies and industries such as consumer electronics, automotive electronics, aerospace, new energy, semiconductors, and optoelectronic integration. - Tantalum and niobium products have wide applications across many fields due to their excellent performance, with stable industry demand and emerging new demand hotspots[31](index=31&type=chunk) [Tantalum Capacitor Sector](index=15&type=section&id=鉭電容器領域) - Tantalum capacitors play a specific role in PCB design due to their high capacitance density, low leakage current, and stability[31](index=31&type=chunk) - Consumer electronics, automotive electronics, industrial and energy, medical, and aerospace are the primary application areas for tantalum capacitors[31](index=31&type=chunk) - Demand for tantalum capacitors in the consumer electronics sector is projected to grow by **6%-7%** in 2024, reaching **US$820-830 million**, and further increase to **US$870-890 million** in 2025[31](index=31&type=chunk) - With the rise of future industries such as AI large models, brain-computer interfaces, and humanoid robots, the demand for tantalum in tantalum capacitors will significantly increase[31](index=31&type=chunk) - According to CPM Group LLC, global tantalum demand is expected to exceed **4,000 tonnes per year** by 2030, with demand from the tantalum capacitor sector potentially surpassing **1,000 tonnes per year**[31](index=31&type=chunk) [High-Temperature Alloy Sector](index=16&type=section&id=高溫合金領域) - Tantalum and niobium significantly enhance the rupture life (up to **200-300 hours** with niobium addition, compared to **100 hours** without), creep resistance (reducing deformation by **30%-40%**), and yield strength (increasing by **15%-20%**) of high-temperature alloys[32](index=32&type=chunk) - High-temperature alloy market growth is primarily driven by demand from aerospace (commercial aviation recovery, military aircraft upgrades), energy equipment (gas turbines, nuclear energy, hydrogen energy), and industrial sectors[32](index=32&type=chunk)[33](index=33&type=chunk) - China's Aero Engine Corporation of China (AECC) CJ-1000A turbofan engine has completed airworthiness certification, supporting the C919 passenger aircraft's mass delivery phase and accelerating domestic substitution[32](index=32&type=chunk) - Rolls-Royce expects civil aerospace large engine flying hours to recover to **110-115%** of 2019 levels by 2025[32](index=32&type=chunk) [Superconducting Materials Sector](index=18&type=section&id=超導材料領域) - Niobium and niobium alloys are the preferred materials for low-temperature superconductors, accounting for approximately **96%** of the superconducting market[34](index=34&type=chunk) - Demand for superconducting materials is concentrated in scientific research, nuclear fusion, medical equipment, national defense, transportation, and power energy sectors[34](index=34&type=chunk) - The global superconducting materials market size was **Euro 6.8 billion** in 2022, with a projected compound annual growth rate of **23.1%** by 2027[34](index=34&type=chunk)[36](index=36&type=chunk) [Semiconductor Sector](index=19&type=section&id=半導體領域) - High-purity tantalum targets are used in conjunction with high-purity copper targets in the fabrication of ultra-large-scale integrated circuits (chips)[37](index=37&type=chunk) - The global chip market is projected to grow by **19%** to **US$630 billion** in 2024, and by **13.8%** to **US$716.7 billion** in 2025[37](index=37&type=chunk)[39](index=39&type=chunk) - Growth is primarily driven by surging demand for AI-related semiconductors, recovery in electronics production, and momentum from memory and logic chips[37](index=37&type=chunk) - Tantalum is widely used as a barrier layer material in semiconductor manufacturing due to its high conductivity, thermal stability, and atomic blocking properties[39](index=39&type=chunk) [Medical Sector](index=20&type=section&id=醫療領域) - Tantalum metal is widely applied in the medical field, particularly in orthopedic surgery for treatments such as femoral head necrosis, joint replacement and revision, and bone defect repair[40](index=40&type=chunk) - Porous tantalum has been developed for orthopedic implant materials, with 3D printing technology driving the development of customized porous tantalum prostheses[40](index=40&type=chunk) - Tantalum coatings play an important protective role in implantable medical devices[40](index=40&type=chunk) [New Energy Sector](index=21&type=section&id=新能源領域) - Niobium-based anode technology can help lithium-ion batteries achieve miniaturization, lightweighting, greater stability, enhanced safety, long cycle life (over **10,000 cycles**), and fast charging (full charge in **6 minutes** or less)[42](index=42&type=chunk) - Niobium and tantalum are primarily used as oxides in inorganic solid-state electrolytes; solid-state lithium batteries offer higher energy density and better safety, potentially becoming a new growth point for niobium in the new energy sector[42](index=42&type=chunk) - Application scenarios for niobium-based anode batteries include commercial vehicles, ferries, mining trucks, handling equipment, energy storage systems, AGVs, and uninterruptible power supplies[43](index=43&type=chunk)[44](index=44&type=chunk) [Optoelectronic Integration Sector](index=22&type=section&id=光電子集成領域) - Lithium niobate is used to prepare electro-optic modulators, which are core components in modern communication and photonic integrated circuits[45](index=45&type=chunk) - Thin-film lithium niobate (TFLN) exhibits excellent electro-optic effects, nonlinear optical properties, and acousto-optic effects, making it suitable for 5G communication, quantum computing, and other fields[45](index=45&type=chunk) - Germany's Q.ANT and IMS CHIPS have launched a TFLN photonic chip production line, with their photonic processor prototype achieving **30 times** higher energy efficiency and **50 times** faster computing speed than traditional chips[46](index=46&type=chunk) - Lithium tantalate PICs demonstrate extremely high efficiency, with optical loss rates as low as **5.6 dB/m** and electro-optic bandwidth up to **40 GHz**, making them ideal for next-generation optical communication systems[46](index=46&type=chunk) - The global lithium niobate thin-film modulator market size is projected to grow from **US$200 million** in 2023 to **US$2 billion** in 2029, with a compound annual growth rate (CAGR) of **41.0%**[46](index=46&type=chunk) [Business Review](index=24&type=section&id=業%20務回顧) In the first half of 2025, under the guidance of its "specialization, integration, scale, high-end, internationalization, and capitalization" strategy, the Group achieved significant growth in operating revenue and profit for the period. By optimizing product structure, strengthening R&D innovation, enhancing production efficiency, and promoting green development, the Group's position and competitiveness in the tantalum-niobium industry continued to improve. - In the first half of 2025, the Group's operating revenue reached **RMB 954.2 million**, a year-on-year increase of **5.7%**; profit for the period reached **RMB 107.5 million**, a year-on-year increase of **71.4%**[48](index=48&type=chunk)[70](index=70&type=chunk) - The Group successfully implemented its "specialization, integration, scale, high-end, internationalization, and capitalization" strategic positioning, with all core departments achieving significant performance improvements[48](index=48&type=chunk) - The proportion of tantalum-niobium pyro-process products in the revenue structure achieved leapfrog development, accounting for nearly half, which is key to steady revenue growth[49](index=49&type=chunk) [Fruitful Achievements in Operations Management](index=24&type=section&id=經營管理成果豐碩) Operating Performance (RMB million) | Metric | H1 2025 (RMB million) | Year-on-Year Growth (%) | | :--- | :--- | :--- | | Operating Revenue | 954.2 | 5.7% | | Profit for the Period | 107.5 | 71.4% | - The proportion of tantalum-niobium pyro-process products in the Group's revenue structure achieved a leapfrog development from zero to significant, accounting for nearly half, which is key to steady revenue growth[49](index=49&type=chunk) [Continuous Optimization of Talent Structure](index=25&type=section&id=人才結構持續優化) - The Group adheres to the talent philosophy that "human resource leadership strategy is the primary competitive strategy," continuously advancing the refinement of its organizational and talent structures[50](index=50&type=chunk) - Through the implementation of the "Pioneer Program," "Successor Program," and "Management Trainee Program," the Group cultivates a composite talent梯队 with both professional expertise and innovative vision[50](index=50&type=chunk) - Several master's graduates from renowned universities have assumed middle management positions, and the retention rate of management trainees has increased year by year, becoming important production backbones[50](index=50&type=chunk) [Deepening Cultivation and Advancing with Honors](index=25&type=section&id=蓄力深耕載譽前行) - As of June 30, 2025, the Group has accumulated **120** authorized patents (**28** invention patents, **92** utility model patents), with another **79** patents under application review[51](index=51&type=chunk) - Ximei Guizhou was recognized as a "Key Specialized, Refined, Unique, and New Small and Medium-sized Enterprise in Guizhou Province" and obtained qualifications such as "High-tech Enterprise," "Innovative Small and Medium-sized Enterprise in Guizhou Province," and "Guizhou Provincial Enterprise Technology Center"[51](index=51&type=chunk) - Ximei Guangdong was rated as a "High-Quality Manufacturing Enterprise" by Qingyuan City, is a National High-tech Enterprise and a National Specialized, Refined, Unique, and New "Little Giant" Enterprise, and its self-owned testing center obtained CNAS laboratory accreditation[51](index=51&type=chunk) - The high-capacitance tantalum powder developed for polymer tantalum capacitors passed a **2,000-hour** life test, and tantalum-niobium smelting products entered the qualified product list of leading domestic and international high-temperature alloy enterprises[52](index=52&type=chunk) - Ultra-high purity tantalum metal is supplied in large quantities to semiconductor tantalum target manufacturers, and the annual shipment of lithium tantalate for photonic communication exceeded **10 tonnes**[52](index=52&type=chunk) [Capacity Unleashed with Impressive Output](index=26&type=section&id=產能挖潛產出喜人) - The Group has deeply explored production line potential through various measures such as "automation upgrade for high-niobium drying and calcination," "niobium liquid absorption of ammonia gas," "ultra-high pressure membrane concentration," and "research on key technologies for smelting tantalum preparation"[53](index=53&type=chunk) - The direct recovery rate of tantalum-niobium wet smelting increased year-on-year, unit consumption of products like superconducting niobium ingots significantly decreased, unit energy consumption for smelting tantalum and niobium continued to decline, and the comprehensive utilization rate of by-products reached a new high[53](index=53&type=chunk) [Strengthening and Extending Supply Chains for Green Development](index=27&type=section&id=強鏈延鏈綠色發展) - Ximei Guangdong has completed the "700 tonnes/year high-niobium expansion and technical upgrade project," strengthening its oxide production capacity[54](index=54&type=chunk) - Ximei Guizhou passed the second audit and certification for various systems, including the Weapon Equipment Quality Management System, Energy Management System, Occupational Health and Safety Management System, Quality Management System, and Environmental Management System[54](index=54&type=chunk) - Ximei Leizhou factory fully completed its civil engineering works, laying a solid foundation for the Group's future market upgrades and high-quality sustainable development[54](index=54&type=chunk) [Financial Review](index=27&type=section&id=財務回顧) In the first half of 2025, the Group's revenue increased by 5.7% to RMB 954.2 million, primarily driven by growth in metal products and trading businesses. Both gross profit and gross margin improved, and profit for the period surged by 71.4%. Other income and net gains increased, while selling and distribution expenses, administrative expenses, and finance costs all decreased. - The Group's revenue increased by **5.7%** to **RMB 954.2 million**, with profit for the period significantly growing by **71.4%** to **RMB 107.5 million**[56](index=56&type=chunk)[70](index=70&type=chunk) - Gross margin improved from **21.1%** to **23.7%**, primarily due to further release of the Group's production capacity, an increased proportion of high-purity metal sales, and enhanced process efficiency in production, including the utilization of recycled materials and by-products, driving cost reduction and efficiency gains[62](index=62&type=chunk) [Revenue](index=27&type=section&id=收%20益) Revenue by Source (RMB thousand) | Revenue Source | 2025 (RMB thousand) | Share (%) | 2024 (RMB thousand) | Share (%) | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Tantalum-Niobium Wet-Process Compounds | 233,840 | 24.5 | 306,263 | 33.9 | (23.6%) | | Tantalum-Niobium Metals and Products | 504,590 | 52.9 | 419,538 | 46.5 | 20.3% | | Trading Products, Processing Services and Others | 215,770 | 22.6 | 176,792 | 19.6 | 22.0% | | **Total Revenue** | **954,200** | **100.0** | **902,593** | **100.0** | **5.7%** | - The increase in revenue was primarily attributable to the Group's proactive adjustment of its product structure, with significant year-on-year growth in metal products (especially niobium metal products) and trading businesses in the first half of the year[56](index=56&type=chunk) - Revenue from tantalum-niobium wet-process compounds decreased by **23.6%**, mainly because of higher market demand for metal products, leading to an increased proportion of wet-process compounds consumed internally and reduced external sales[57](index=57&type=chunk) - Revenue from tantalum-niobium metals and products increased by **20.3%**, primarily due to enhanced pyro-process project capacity and increased market sales of niobium metal products[58](index=58&type=chunk) - Revenue from trading products, processing services, and others increased by **22.0%**, mainly due to an increase in trading volume[59](index=59&type=chunk) [Cost of Sales](index=29&type=section&id=銷售成本) Cost of Sales Breakdown (RMB thousand) | Cost of Sales Item | 2025 (RMB thousand) | Share (%) | 2024 (RMB thousand) | Share (%) | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Raw Materials | 439,888 | 60.4 | 476,238 | 66.9 | (7.6%) | | Cost of Trading Products | 183,186 | 25.2 | 142,636 | 20.0 | 28.4% | | Fixed Factory Overhead | 28,823 | 4.0 | 23,767 | 3.3 | 21.3% | | Electricity and Fuel | 53,377 | 7.3 | 46,796 | 6.6 | 14.1% | | Labor | 13,306 | 1.8 | 12,036 | 1.7 | 10.6% | | Processing Fees | 9,298 | 1.3 | 10,544 | 1.5 | (11.8%) | | **Total Cost of Sales** | **727,878** | **100.0** | **712,017** | **100.0** | **2.2%** | - The increase in cost of sales was primarily due to increased sales volume[61](index=61&type=chunk) [Gross Profit and Gross Margin](index=30&type=section&id=毛利及毛利率) Gross Profit and Gross Margin (RMB million) | Metric | 2025 (RMB million) | 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Gross Profit | 226.3 | 190.6 | 18.7% | | Gross Margin | 23.7% | 21.1% | 2.6 percentage points | - The improvement in gross margin was primarily due to the further release of the Group's production capacity, an increased proportion of metal products (especially high-purity metals) in sales, and enhanced process efficiency in production, including the utilization of recycled materials and by-products, driving cost reduction and efficiency gains[62](index=62&type=chunk) [Other Income and Net Gains](index=31&type=section&id=其他收入及收益淨額) Other Income and Net Gains (RMB thousand) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Bank Interest Income | 473 | 906 | (47.8%) | | Government Grants | 5,335 | 5,089 | 4.8% | | Net Fair Value Gain on Derivative Financial Instruments | 1,900 | 98 | 1838.8% | | Net Gain on Disposal of Scraps | 954 | 760 | 25.5% | | Others | 2,268 | 449 | 405.1% | | **Total** | **10,930** | **7,302** | **49.7%** | - Government grants primarily refer to additional input VAT credits obtained by high-tech enterprise subsidiaries and subsidies supporting R&D activities[63](index=63&type=chunk) [Selling and Distribution Expenses](index=32&type=section&id=銷售及分銷開支) Selling and Distribution Expenses (RMB thousand) | Item | 2025 (RMB thousand) | Share (%) | 2024 (RMB thousand) | Share (%) | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Distribution Costs | 2,706 | 27.8 | 2,891 | 29.4 | (6.5%) | | Staff Costs | 5,231 | 53.8 | 5,407 | 54.9 | (3.2%) | | Consulting and Advisory Fees | 454 | 4.7 | 350 | 3.5 | 29.7% | | Travel and Entertainment Expenses | 690 | 7.1 | 439 | 4.5 | 57.2% | | **Total Selling and Distribution Expenses** | **9,725** | **100.0** | **9,841** | **100.0** | **(1.2%)** | - The decrease in selling and distribution expenses was primarily due to the Group's strengthened personnel management and assessment, resulting in a slight reduction in staff costs[65](index=65&type=chunk) [Administrative Expenses](index=33&type=section&id=行政開支) Administrative Expenses (RMB thousand) | Item | 2025 (RMB thousand) | Share (%) | 2024 (RMB thousand) | Share (%) | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Research and Development Expenses | 33,466 | 45.3 | 36,993 | 42.3 | (9.5%) | | Staff Costs | 20,407 | 27.6 | 26,951 | 30.8 | (24.3%) | | **Total Administrative Expenses** | **73,938** | **100.0** | **87,491** | **100.0** | **(15.5%)** | - The decrease in administrative expenses was primarily due to reduced staff costs (strengthened management personnel assessment and adjustments) and lower research and development expenses (completion of some R&D projects)[67](index=67&type=chunk) [Finance Costs](index=34&type=section&id=融資成本) Finance Costs (RMB thousand) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Finance Costs on Interest-bearing Bank Borrowings | 9,220 | 7,977 | 15.6% | | Interest on Bills Discounted | 3,181 | 4,545 | (30.0%) | | Interest on Lease Liabilities | 103 | 1,352 | (92.4%) | | **Total Net Finance Costs** | **12,504** | **13,874** | **(9.9%)** | - The decrease in finance costs was primarily due to a reduction in discounted bills raised, leading to lower finance costs on discounted bills[68](index=68&type=chunk) [Income Tax Expense](index=34&type=section&id=所得稅開支) Income Tax Expense (RMB million) | Metric | 2025 (RMB million) | 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Income Tax Expense | 22.9 | 13.0 | 76.2% | | Effective Tax Rate | 17.6% | 17.1% | 0.5 percentage points | - Two subsidiaries were recognized as high-tech enterprises, enjoying a preferential tax rate of **15%**; eligible tantalum metal product export sales are entitled to a **13%** tax refund[69](index=69&type=chunk) [Profit for the Period](index=34&type=section&id=報告期內溢利) Profit for the Period (RMB million) | Metric | 2025 (RMB million) | 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Profit for the Period | 107.5 | 62.7 | 71.4% | | Net Profit Margin | 11.3% | 6.9% | 4.4 percentage points | [Profit Attributable to Owners of the Company](index=35&type=section&id=本公司擁有人應佔溢利) Profit Attributable to Owners of the Company (RMB million) | Metric | 2025 (RMB million) | 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Profit Attributable to Owners of the Company | 91.8 | 62.3 | 47.5% | [Analysis of Key Statement of Financial Position Items](index=35&type=section&id=主要資產負債表項目分析) As of June 30, 2025, the Group's net book value of property, plant and equipment slightly increased, while right-of-use assets slightly decreased. Inventories significantly rose by 44.3%, mainly due to the extension of production business downstream and new factory plans. Trade and bills receivables increased by 7.7%, while trade payables decreased by 22.0%. Total bank borrowings increased by 32.7%, primarily for raw material reserves. - Inventories significantly increased by **44.3%** to **RMB 1,074.6 million**, primarily due to the further extension of production business downstream, leading to increased raw materials and work-in-progress, as well as delays in delivery and acceptance by some downstream customers[74](index=74&type=chunk)[75](index=75&type=chunk) - Total bank borrowings increased by **32.7%** to **RMB 795.5 million**, primarily due to increased raw material reserves[88](index=88&type=chunk) [Property, Plant and Equipment](index=35&type=section&id=物業、廠房及設備) Property, Plant and Equipment Net Book Value (RMB million) | Metric | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Property, Plant and Equipment Net Book Value | 390.5 | 387.0 | 0.9% | - The increase was primarily due to the Group's continuous expansion of wet-process and pyro-process product production facilities[72](index=72&type=chunk) [Right-of-Use Assets](index=35&type=section&id=使用權資產) Right-of-Use Assets (RMB million) | Metric | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Total Right-of-Use Assets | 67.3 | 68.1 | (1.2%) | | Leased Land | 56.8 | 57.2 | (0.7%) | | Leased Plant and Machinery | 7.7 | 8.6 | (10.5%) | | Leased Offices | 2.8 | 2.3 | 21.7% | - The decrease in leased land was primarily due to increased depreciation expense; the decrease in leased plant and machinery was mainly due to depreciation expense and transfer to property, plant and equipment; the increase in leased offices was primarily due to the acquisition of new office premises in Hong Kong[73](index=73&type=chunk) [Inventories](index=36&type=section&id=存%20貨) Inventories by Category (RMB thousand) | Inventory Category | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Raw Materials | 424,176 | 251,302 | 68.8% | | Work-in-Progress | 269,342 | 268,051 | 0.5% | | Finished Goods | 381,038 | 225,155 | 69.2% | | **Total Inventories** | **1,074,556** | **744,508** | **44.3%** | - The increase in inventories was primarily due to the Group's production business extending further downstream, leading to an increase in raw materials and intermediate work-in-progress[75](index=75&type=chunk) - Considering the planned commissioning of the new Leizhou factory, raw material inventory was moderately increased; simultaneously, delays in delivery and acceptance by some downstream customers led to an increase in finished goods inventory[75](index=75&type=chunk) - The average inventory to revenue from products sold ratio increased from **40.2%** to **47.7%**[74](index=74&type=chunk)[75](index=75&type=chunk) [Trade and Bills Receivables](index=37&type=section&id=貿易應收賬款及應收票據) Trade and Bills Receivables (RMB thousand) | Metric | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Trade Receivables | 387,267 | 287,210 | 34.8% | | Less: Impairment | (9,895) | (4,903) | 101.8% | | Bills Receivables | 60,027 | 123,915 | (51.6%) | | **Net Book Value** | **437,399** | **406,222** | **7.7%** | - The increase in trade and bills receivables was primarily due to increased revenue[77](index=77&type=chunk) - The average turnover days decreased from **80.5 days** to **80.0 days**, mainly due to strengthened management of sales collection during the review period, resulting in slightly shorter credit terms[80](index=80&type=chunk)[81](index=81&type=chunk) - As of June 30, 2025, the expected credit loss for trade receivables was **RMB 9.9 million**, an increase of **101.8%** from **RMB 4.9 million** as of December 31, 2024[78](index=78&type=chunk) [Prepayments, Deposits and Other Receivables](index=39&type=section&id=預付款項、按金及其他應收款項) Prepayments, Deposits and Other Receivables (RMB thousand) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Prepayments – Non-current | 18,075 | 29,277 | (38.3%) | | Deposits – Non-current | 32,000 | 32,000 | 0.0% | | Less: Impairment Provision | (11,000) | (11,000) | 0.0% | | Prepayments – Current | 148,673 | 227,680 | (34.7%) | | Other Recoverable Taxes | – | 567 | (100.0%) | | Deposits and Other Receivables – Current | 9,813 | 8,531 | 15.0% | | **Total** | **197,561** | **287,055** | **(31.1%)** | - The decrease in prepayments, deposits, and other receivables was primarily due to a reduction in prepaid deposits[83](index=83&type=chunk) [Trade Payables](index=40&type=section&id=貿易應付賬款) Trade Payables by Ageing (RMB thousand) | Ageing | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Within 30 days | 26,179 | 27,323 | (4.2%) | | 31 to 60 days | 11,242 | 24,011 | (53.2%) | | 61 to 90 days | 2,800 | 764 | 266.5% | | Over 90 days | 8,399 | 10,168 | (17.3%) | | **Total** | **48,620** | **62,266** | **(22.0%)** | - The decrease in trade payables was primarily due to timely settlement of procurement payments to certain suppliers[84](index=84&type=chunk) - The average turnover days decreased from **14.9 days** to **13.8 days**, mainly due to a reduction in trade payables[85](index=85&type=chunk) [Other Payables and Accrued Expenses](index=41&type=section&id=其他應付款項及應計費用) Other Payables and Accrued Expenses (RMB thousand) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Accrued Expenses | 23,357 | 21,250 | 9.9% | | Deferred Income | 9,151 | 8,886 | 3.0% | | Contract Liabilities | 20,011 | 50,290 | (60.2%) | | Other Payables | 42,038 | 31,449 | 33.7% | | **Total** | **94,557** | **111,875** | **(15.4%)** | - The decrease in other payables and accrued expenses was primarily due to a reduction in customer prepayments[86](index=86&type=chunk) [Bank Borrowings](index=42&type=section&id=銀行借款) Bank Borrowings (RMB thousand) | Borrowing Category | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Non-current | 78,259 | 129,100 | (39.3%) | | Current | 717,241 | 470,249 | 52.5% | | **Total Bank Borrowings** | **795,500** | **599,349** | **32.7%** | - The increase in total bank borrowings was primarily due to increased raw material reserves during the review period[88](index=88&type=chunk) - Bank borrowings accounted for approximately **79.2%** of total liabilities (December 31, 2024: **71.2%**)[87](index=87&type=chunk) [Liquidity and Capital Resources](index=43&type=section&id=流動資金及資本資源) As of June 30, 2025, the company's cash and cash equivalents were RMB 145.1 million, a decrease from December 31, 2024. The gearing ratio increased to 32.2%, mainly influenced by changes in financing scale and period-end cash levels. The Board believes the Group has sufficient working capital for at least the next 12 months. - As of June 30, 2025, cash and cash equivalents were approximately **RMB 145.1 million**, a decrease from **RMB 182.0 million** as of December 31, 2024[89](index=89&type=chunk) - The Board of Directors believes the Group has sufficient working capital to meet its requirements for at least the next **12 months** from the date of this announcement[89](index=89&type=chunk) [Working Capital](index=43&type=section&id=營運資金) Cash and Bank Balances (RMB million) | Metric | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Cash and Bank Balances | 145.1 | 182.0 | (20.3%) | - The Group intends to fund its operations through cash generated from operating activities, bank borrowings, and proceeds from the listing[89](index=89&type=chunk) [Capital Structure](index=43&type=section&id=資本架構) Total Debt (RMB million) | Metric | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Total Debt | 800.7 | 607.3 | 31.8% | - The Group encountered no difficulties in renewing bank loans[90](index=90&type=chunk) [Gearing Ratio](index=44&type=section&id=資本負債比率) Gearing Ratio | Metric | June 30, 2025 | December 31, 2024 | Change (percentage points) | | :--- | :--- | :--- | :--- | | Gearing Ratio | 32.2% | 26.7% | 5.5 | - The change in the gearing ratio was primarily due to changes in the Group's financing scale and period-end cash levels during the review period[91](index=91&type=chunk) [Pledge of Assets](index=44&type=section&id=資產押記) - Bank borrowings are secured by leased land with a net book value of approximately **RMB 48.3 million** and property, plant and equipment with a net book value of approximately **RMB 88.6 million**[92](index=92&type=chunk) [Capital Expenditure](index=44&type=section&id=資本開支) Capital Expenditure (RMB million) | Metric | 2025 (RMB million) | 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Capital Expenditure | 25.4 | 8.3 | 206.0% | - Capital expenditure primarily consisted of expenses for purchasing property, plant and equipment[93](index=93&type=chunk) [Contingent Liabilities, Legal and Potential Proceedings](index=44&type=section&id=或有負債、法律訴訟及潛在訴訟) - As of June 30, 2025, the Group had no material contingent liabilities, legal proceedings, or potential proceedings[94](index=94&type=chunk) [Capital Commitments](index=44&type=section&id=資本承擔) Capital Commitments (RMB million) | Metric | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Capital Commitments | 44.1 | 37.7 | 17.0% | [Segment Information](index=45&type=section&id=分部資料) The Group primarily engages in the manufacturing and sale of metallurgical products and provides processing services to customers. Management focuses on the Group's overall operating performance and does not identify separate operating segments, thus no operating segment information is presented. - The Group primarily engages in metallurgical product manufacturing, sales, and processing services, with management viewing operating results as a whole, thus no operating segment information is presented[96](index=96&type=chunk) [Significant Acquisitions and Disposals by the Group](index=45&type=section&id=本集團之重大收購及出售) For the six months ended June 30, 2025, the Group did not undertake any significant acquisitions or disposals. - For the six months ended June 30, 2025, the Group did not undertake any significant acquisitions or disposals[97](index=97&type=chunk) [Material Investments](index=45&type=section&id=重大投資) For the six months ended June 30, 2025, the Company did not hold any material investments. - For the six months ended June 30, 2025, the Company did not hold any material investments[98](index=98&type=chunk) [Future Plans for Material Investments or Capital Assets](index=45&type=section&id=重大投資或資本資產的未來計劃) As of June 30, 2025, the Group has no definite plans regarding material investments or capital assets. Any such plans will be announced in due course and in compliance with the Listing Rules. - As of June 30, 2025, the Group has no definite plans regarding material investments or capital assets[99](index=99&type=chunk) [Future Outlook](index=45&type=section&id=未來展望) Looking ahead to the second half of 2025, global economic recovery faces uncertainties, but demand for rare metals in new energy, semiconductors, and high-end manufacturing sectors still holds growth potential. The Group will adhere to safety and environmental protection bottom lines, optimize production processes and product structures, expand markets, increase R&D investment, and complete key project constructions to achieve sustainable growth and enhance market position. - In the second half of 2025, global economic recovery still faces uncertainties, but demand for rare metals in new energy, semiconductors, and high-end manufacturing sectors still holds growth potential[100](index=100&type=chunk) - The Group will adhere to safety and environmental protection bottom lines, strengthen production organization, and optimize production processes and product structures to achieve full capacity and exceed production targets[101](index=101&type=chunk) - The Group will target market frontiers and strategic customers, continuously expand markets, reasonably adjust procurement structures and rhythms, and maintain stable supply, production, and sales operations[101](index=101&type=chunk) - Efforts will be made to complete key project constructions, extend the industrial chain, expand industrial scale, and enhance industry influence; the Group will adhere to technological innovation and increase R&D investment[101](index=101&type=chunk) - With the development of new technologies such as new energy, 5G upgrades, semiconductors, and high-end equipment manufacturing, downstream demand for tantalum and niobium will significantly increase, and the import substitution space for high-end products will gradually be released[102](index=102&type=chunk) - The Group will continue to adhere to its "six-pronged" strategic positioning of "specialization, integration, scale, high-end, internationalization, and capitalization"[102](index=102&type=chunk) Other Information [Human Resources and Training](index=47&type=section&id=人力資源及培訓) The Group adheres to the philosophy that "human resource leadership strategy is the primary competitive strategy," cultivating talent through the "Starry Plan," "Mentorship Program," and "Management Trainee Program," and providing systematic training. As of June 30, 2025, the total number of employees was 663, with total staff costs of RMB 64.5 million. - The Group adheres to the talent philosophy that "human resource leadership strategy is the primary competitive strategy," continuously advancing the refinement of its organizational and talent structures[103](index=103&type=chunk) - By launching the "Starry Plan" for cultivating young core cadres and the "Mentorship Program," a dual-mentor training mechanism has been established[103](index=103&type=chunk) - As of June 30, 2025, the Group had a total of **663** employees (December 31, 2024: **632** employees)[104](index=104&type=chunk) Total Staff Costs (RMB million) | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Total Staff Costs | 64.5 | 57.7 | 11.8% | - The Group provides systematic training programs for employees, including induction, safety, professional skills, and management training, enriching online and offline courses, and increasing external visit and training programs[104](index=104&type=chunk) [Dividends](index=48&type=section&id=股%20息) The Board of Directors has resolved not to declare any interim dividend for the six months ended June 30, 2025. - The Board of Directors has resolved not to declare any interim dividend for the six months ended June 30, 2025[106](index=106&type=chunk) [Principal Activities](index=48&type=section&id=主要業務) The Company is an investment holding company, and its subsidiaries are principally engaged in the manufacturing and sale of non-ferrous metal products and providing processing services to customers. - The Company is an investment holding company, and its subsidiaries are principally engaged in the manufacturing and sale of non-ferrous metal products and providing processing services to customers[107](index=107&type=chunk) [Public Float](index=48&type=section&id=公眾持股量) From the end of the reporting period to the date of this announcement, at least 25% of the Company's issued shares were held by public shareholders in accordance with the Listing Rules. - From the end of the reporting period to the date of this announcement, at least **25%** of the Company's issued shares were held by public shareholders in accordance with the Listing Rules[108](index=108&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=48&type=section&id=購買、出售或贖回本公司上市證券) From the end of the reporting period 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, and the Company held no treasury shares. - From the end of the reporting period 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[109](index=109&type=chunk) - During this reporting period, the Company held no treasury shares[109](index=109&type=chunk) [Going Concern](index=48&type=section&id=持續經營) Based on its current financial position and available financing, the Group has sufficient financial resources to continue operating for the foreseeable future, thus the financial report is prepared on a "going concern" basis. - The Group has sufficient financial resources to continue operating for the foreseeable future, and the financial report is prepared on a "going concern" basis[110](index=110&type=chunk) [Use of Proceeds from Listing](index=49&type=section&id=上市所得款項用途) The net proceeds from the Company's listing were approximately RMB 92.7 million, of which RMB 91.0 million had been utilized as of June 30, 2025. The unutilized amount of RMB 1.7 million, intended for strengthening the European sales network and Brazilian procurement channels, is expected to be fully utilized by the end of 2025, primarily due to delays in business expansion caused by changes in the macroeconomic and international business environment. Use of Proceeds from Listing (RMB million) | Fund Usage | Plan Disclosed in Prospectus (RMB million) | Actual Utilized as of June 30, 2025 (RMB million) | Unutilized as of June 30, 2025 (RMB million) | | :--- | :--- | :--- | :--- | | Construction of new production facilities for tantalum powder and tantalum bars | 26.8 | 26.8 | – | | Purchase and installation of related machinery and equipment for tantalum powder and tantalum bars production | 33.4 | 33.4 | – | | Other expenses related to establishing new production facilities | 3.6 | 3.6 | – | | Expenses required for providing financial support to five R&D projects | 16.6 | 16.6 | – | | Strengthening European sales network and Brazilian procurement channels | 3.2 | 1.5 | 1.7 | | General working capital | 9.1 | 9.1 | – | | **Total** | **92.7** | **91.0** | **1.7** | - The unutilized amount of **RMB 1.7 million**, intended for strengthening the European sales network and Brazilian procurement channels, is expected to be fully utilized by the end of 2025[113](index=113&type=chunk) - The delay in utilization was primarily due to changes in the macroeconomic environment and international business environment, leading to delays in the Company's business expansion in Europe and Brazil[113](index=113&type=chunk) [Corporate Governance Functions](index=51&type=section&id=企業管治職能) The Board is committed to upholding the Corporate Governance Code and has adopted various measures to strengthen internal controls. The Company complies with all applicable code provisions, except for the combined roles of Chairman and Chief Executive Officer, which deviates from code provision C.2.1, but the Board believes this arrangement is in the Group's best interest and adequate safeguards are in place. - The Board is committed to upholding the Corporate Governance Code and has adopted various measures to strengthen internal control systems, ongoing professional training for directors, and other routine areas[114](index=114&type=chunk) - The Company complies with all applicable code provisions, except that the roles of Chairman and Chief Executive Officer are combined and held by Mr. Wu Lijue, which deviates from code provision C.2.1[114](index=114&type=chunk)[115](index=115&type=chunk) - The Board believes that Mr. Wu's dual role is in the Group's best interest, and adequate safeguards are in place to ensure a balance of power between the Board and management[115](index=115&type=chunk) [Model Code for Securities Transactions](index=51&type=section&id=證券交易之標準守則) The Company has adopted the Model Code for Securities Transactions as set out in Appendix C3 of the Listing Rules, and all Directors have confirmed full compliance with the required dealing standards of the Model Code after due enquiry. - The Company has adopted the Model Code for Securities Transactions as set out in Appendix C3 of the Listing Rules[116](index=116&type=chunk) - All Directors have confirmed full compliance with the required dealing standards of the Model Code during the reporting period and up to the date of this announcement[116](index=116&type=chunk) [Review by Audit Committee](index=52&type=section&id=審核委員會審閱) The Audit Committee has reviewed the unaudited financial statements, results announcement, and interim report for the six months ended June 30, 2025, and agreed with the accounting treatments adopted by the Company, deeming the financial statements to comply with applicable accounting standards and Listing Rules requirements and to have made sufficient disclosures. - The Audit Committee has reviewed the unaudited financial statements, results announcement, and interim report for the six months ended June 30, 2025[117](index=117&type=chunk) - The Audit Committee agreed with the accounting treatments adopted by the Company and was satisfied that the financial statements comply with applicable accounting standards and Listing Rules requirements and have made sufficient disclosures[117](index=117&type=chunk) [Events After the Reporting Period](index=52&type=section&id=本報告期後事項) As of the date of this announcement, there are no material events after the reporting period. - As of the date of this announcement, there are no material events after the reporting period[118](index=118&type=chunk) [Publication of Information](index=53&type=section&id=刊發資料) This interim results announcement and interim report will be published on the website of The Stock Exchange of Hong Kong Limited and the Company's website. - This interim results announcement will be published on the website of The Stock Exchange of Hong Kong Limited and the Company's website[119](index=119&type=chunk) - The Company's 2025 interim report will be dispatched to the Company's shareholders in due course and published on the website of The Stock Exchange of Hong Kong Limited and the Company's website[119](index=119&type=chunk)

[2025 Interim Results Highlights](index=1&type=section&id=二零二五年中期業績摘要) [Financial Highlights](index=1&type=section&id=財務摘要) The company achieved significant financial growth in the first half of 2025, with revenue increasing by 63.7% year-on-year and a successful turnaround to profit, with profit attributable to owners of the company reaching RMB 1,316 thousands Financial Performance Summary | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 90,959 | 55,560 | 63.7 | | Gross Profit | 57,974 | 39,064 | 48.4 | | Profit/(Loss) Before Income Tax | 1,388 | (6,746) | — | | Profit/(Loss) Attributable to Owners of the Company | 1,316 | (4,743) | — | | Basic and Diluted Earnings/(Loss) Per Share (RMB yuan) | 0.01/0.01 | (0.05)/(0.05) | — | [Interim Results](index=2&type=section&id=中期業績) [Condensed Consolidated Statement of Comprehensive Income](index=2&type=section&id=中期簡明綜合全面收益表) In the first half of 2025, the Group's revenue significantly increased, successfully achieving profitability and reversing the loss from the same period last year, with notable improvements in gross profit and financial income, alongside increased R&D expenses Condensed Consolidated Statement of Comprehensive Income | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Revenue | 90,959 | 55,560 | | Cost of Sales | (32,985) | (16,496) | | Gross Profit | 57,974 | 39,064 | | Other Income | 14,580 | 13,482 | | Net Other Gains/(Losses) | 544 | (449) | | Selling and Marketing Expenses | (4,260) | (5,179) | | General and Administrative Expenses | (17,714) | (14,850) | | Research and Development Expenses | (54,461) | (41,106) | | Reversal of Impairment Loss on Financial and Contract Assets | 3,004 | 1,931 | | Operating Loss | (333) | (7,107) | | Share of Profit/(Loss) of Investments Accounted for Using Equity Method | 34 | (662) | | Finance Income | 4,316 | 1,707 | | Finance Costs | (2,629) | (684) | | Profit/(Loss) Before Income Tax | 1,388 | (6,746) | | Income Tax (Expense)/Credit | (999) | 2,147 | | Profit/(Loss) for the Period | 389 | (4,599) | | Profit/(Loss) Attributable to Owners of the Company | 1,316 | (4,743) | | Non-controlling Interests | (927) | 144 | | Total Comprehensive Income/(Loss) for the Period | 122 | (4,599) | Earnings Per Share | Metric | 2025 (RMB yuan) | 2024 (RMB yuan) | | :--- | :--- | :--- | | Basic Earnings/(Loss) Per Share | 0.01 | (0.05) | | Diluted Earnings/(Loss) Per Share | 0.01 | (0.05) | [Condensed Consolidated Statement of Financial Position](index=4&type=section&id=中期簡明綜合資產負債表) As of June 30, 2025, the Group's total assets significantly increased, primarily driven by an increase in financial assets at fair value through profit or loss and cash and cash equivalents within current assets, while total liabilities decreased and shareholders' equity substantially improved Condensed Consolidated Statement of Financial Position | Metric | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | **ASSETS** | | | | Total Non-current Assets | 220,291 | 172,251 | | Total Current Assets | 748,862 | 495,709 | | **TOTAL ASSETS** | **969,153** | **667,960** | | **EQUITY** | | | | Equity Attributable to Owners of the Company | 884,040 | 553,578 | | Non-controlling Interests | 3,203 | 4,130 | | **TOTAL EQUITY** | **887,243** | **557,708** | | **LIABILITIES** | | | | Total Non-current Liabilities | 41,002 | 44,775 | | Total Current Liabilities | 40,908 | 65,477 | | **TOTAL LIABILITIES** | **81,910** | **110,252** | | **TOTAL EQUITY AND LIABILITIES** | **969,153** | **667,960** | [Notes](index=6&type=section&id=附註) [General Information](index=6&type=section&id=一般資料) Beijing Saimo Technology Co., Ltd. was established in Beijing, China in 2014, restructured into a joint-stock company in 2022, and listed on the Main Board of the Hong Kong Stock Exchange on January 15, 2025, primarily providing ICV testing, verification, and evaluation solutions - The company was incorporated in Beijing, China on January 24, 2014, and restructured into a joint-stock company on November 8, 2022[7](index=7&type=chunk) - The company and its subsidiaries (the Group) are primarily engaged in providing Intelligent Connected Vehicle (ICV) testing, verification, and evaluation solutions in China[7](index=7&type=chunk) - The company completed its initial public offering on January 15, 2025, with its ordinary shares listed on the Main Board of the Hong Kong Stock Exchange[7](index=7&type=chunk) [Basis of Preparation and Accounting Policies](index=6&type=section&id=編製基準及會計政策) This condensed consolidated interim financial information is prepared in accordance with International Accounting Standard 34 and should be read in conjunction with the 2024 annual consolidated financial statements, with the Group's initial application of IAS 21 amendments expected to have no significant impact - The condensed consolidated interim financial information is prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting"[9](index=9&type=chunk) - The Group has first applied "Amendments to IAS 21 – Lack of Exchangeability" for the reporting period beginning January 1, 2025, with no significant impact expected on prior or future periods[10](index=10&type=chunk) - Among the standards not yet adopted, International Financial Reporting Standard 18 may primarily affect the presentation of the consolidated statement of comprehensive income[13](index=13&type=chunk) [New and Revised Standards Adopted by the Group](index=6&type=section&id=本集團採納之新訂及經修訂準則) The Group has first applied "Amendments to IAS 21 – Lack of Exchangeability" for the reporting period beginning January 1, 2025, with no significant impact expected on prior or future periods - The Group has first applied "Amendments to IAS 21 – Lack of Exchangeability" for the reporting period beginning January 1, 2025, with no significant impact expected on prior or future periods[10](index=10&type=chunk) [New and Revised Standards and Interpretations Not Yet Adopted](index=7&type=section&id=尚未獲採納的新訂及經修訂準則及詮釋) The Group has not early adopted certain new and revised accounting standards and amendments issued but not yet mandatorily effective for the reporting period ended June 30, 2025, with IFRS 18 potentially impacting the presentation of the consolidated statement of comprehensive income - The Group has not early adopted certain new and revised accounting standards and amendments that have been issued but are not yet mandatorily effective for the reporting period ended June 30, 2025[11](index=11&type=chunk) - Preliminary assessment indicates that the adoption of these new and revised standards is not expected to have a significant impact on the Group's performance and financial position, except that IFRS 18 may primarily affect the presentation of the Group's consolidated statement of comprehensive income[13](index=13&type=chunk) [Segment Information](index=7&type=section&id=分部資料) The Group's business activities are concentrated in ICV testing, verification, and evaluation in China, with the Board of Directors reviewing consolidated results as the chief operating decision maker, resulting in only one reportable segment where all non-current assets and revenue originate from China - The Group's business activities involve testing, verifying, and evaluating the functionality, compatibility, safety, reliability, and comfort of ICVs in China[14](index=14&type=chunk) - The Group has only one reportable segment, with all non-current assets and revenue located in China[14](index=14&type=chunk) [Revenue](index=8&type=section&id=收益) In the first half of 2025, the Group's total revenue reached RMB 90,959 thousands, primarily contributed by ICV simulation testing software and platforms, ICV data platforms and other products, and consulting and other services Revenue by Product and Service | Products and Services | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | ICV Simulation Testing Software and Platforms | 49,073 | 31,321 | | ICV Data Platforms and Other Products | 19,331 | 10,903 | | ICV Testing and Related Services | 9,310 | 6,638 | | Consulting and Other Services | 13,245 | 6,698 | | **Total Revenue** | **90,959** | **55,560** | Revenue Recognition Timing | Timing of Revenue Recognition | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | At a point in time | 90,507 | 54,830 | | Over time | 452 | 730 | | **Total Revenue** | **90,959** | **55,560** | [Other Income](index=8&type=section&id=其他收入) In the first half of 2025, the Group's other income increased to RMB 14,580 thousands, primarily driven by an increase in government grants, partially offset by a decrease in VAT refunds Other Income Breakdown | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Government grants | 14,521 | 10,335 | | VAT refunds | – | 1,621 | | Others | 59 | 1,526 | | **Total** | **14,580** | **13,482** | - Government grants primarily relate to subsidies for the Group's contributions to government technology development, with no unfulfilled conditions or contingencies[19](index=19&type=chunk) [Income Tax Expense/(Credit)](index=9&type=section&id=所得稅開支╱（抵免）) In the first half of 2025, the Group's income tax shifted from a credit in the prior year to an expense of RMB 999 thousands, primarily due to the reversal of deferred tax liabilities and assets, with the company and some subsidiaries benefiting from preferential corporate income tax rates and R&D expense super deduction policies Income Tax Expense/(Credit) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Current income tax | – | – | | Deferred income tax | 999 | (2,147) | | **Income tax expense/(credit)** | **999** | **(2,147)** | - The company is recognized as a key software enterprise, enjoying a preferential corporate income tax rate of **10%** from January 1, 2024[22](index=22&type=chunk) - Effective January 1, 2023, the pre-tax deduction rate for enterprise R&D expenses is **100%**[22](index=22&type=chunk) [Earnings/(Loss) Per Share](index=10&type=section&id=每股盈利╱（虧損）) In the first half of 2025, the company achieved a turnaround to profit with basic and diluted earnings per share of RMB 0.01, compared to a loss per share of RMB 0.05 in the same period last year, with the weighted average number of ordinary shares increasing due to the listing Basic Earnings/(Loss) Per Share | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Profit/(Loss) attributable to owners of the Company (RMB thousands) | 1,316 | (4,743) | | Weighted average number of ordinary shares (thousands of shares) | 129,006 | 98,450 | | Basic earnings/(loss) per share (RMB yuan) | 0.01 | (0.05) | Diluted Earnings/(Loss) Per Share | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Weighted average number of ordinary shares used in calculating basic earnings per share (thousands of shares) | 129,006 | 98,450 | | Dilutive effect: Restricted share units (thousands of units) | 1,402 | – | | Adjusted weighted average number of ordinary shares used in calculating diluted earnings per share (thousands of shares) | 130,408 | 98,450 | | Diluted earnings/(loss) per share (RMB yuan) | 0.01 | (0.05) | - As a loss was recorded in the first half of 2024, restricted share units had an anti-dilutive effect and were therefore not included in the diluted loss per share[26](index=26&type=chunk) [Basic](index=10&type=section&id=基本) In the first half of 2025, the company achieved a basic earnings per share of RMB 0.01, a significant improvement from the loss of RMB 0.05 per share in the prior year, with an increased weighted average number of ordinary shares Basic Earnings/(Loss) Per Share | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Profit/(Loss) attributable to owners of the Company | 1,316 | (4,743) | | Weighted average number of ordinary shares (thousands of shares) | 129,006 | 98,450 | | Basic earnings/(loss) per share (RMB yuan) | 0.01 | (0.05) | [Diluted](index=11&type=section&id=攤薄) In the first half of 2025, the company reported diluted earnings per share of RMB 0.01, a turnaround from the RMB 0.05 loss per share in the previous year, reflecting the impact of restricted share units on the adjusted weighted average number of ordinary shares Diluted Earnings/(Loss) Per Share | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Profit/(Loss) attributable to owners of the Company | 1,316 | (4,743) | | Weighted average number of ordinary shares used in calculating basic earnings per share (thousands of shares) | 129,006 | 98,450 | | Dilutive effect: Restricted share units (thousands of units) | 1,402 | – | | Adjusted weighted average number of ordinary shares used in calculating diluted earnings per share (thousands of shares) | 130,408 | 98,450 | | Diluted earnings/(loss) per share (RMB yuan) | 0.01 | (0.05) | [Financial Assets at Fair Value Through Profit or Loss](index=11&type=section&id=按公允值計入損益的金融資產) As of June 30, 2025, the Group's financial assets at fair value through profit or loss significantly increased, primarily driven by short-term wealth management products, generating a fair value gain of RMB 561 thousands during the period Classification of Financial Assets at Fair Value Through Profit or Loss | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Unlisted equity securities (Non-current) | 28,731 | 28,731 | | Wealth management products (Current) | 234,855 | 7,029 | Amounts Recognized in Profit or Loss | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Fair value gains on financial assets at fair value through profit or loss recognized in other gains | 561 | (448) | [Classification of Financial Assets at Fair Value Through Profit or Loss](index=11&type=section&id=按公允值計入損益的金融資產之分類) As of June 30, 2025, the Group's financial assets at fair value through profit or loss primarily consisted of unlisted equity securities and a significant increase in current wealth management products Classification of Financial Assets at Fair Value Through Profit or Loss | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Unlisted equity securities (Non-current) | 28,731 | 28,731 | | Wealth management products (Current) | 234,855 | 7,029 | [Amounts Recognized in Profit or Loss](index=12&type=section&id=於損益確認的金額) In 2025, the Group recognized a fair value gain of RMB 561 thousands from financial assets at fair value through profit or loss, a positive shift from a loss in the prior year Amounts Recognized in Profit or Loss | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Fair value gains on financial assets at fair value through profit or loss recognized in other gains | 561 | (448) | [Trade and Bills Receivables](index=12&type=section&id=貿易應收款項及應收票據) As of June 30, 2025, the Group's total trade and bills receivables decreased to RMB 163,071 thousands, primarily due to the collection of a significant amount of receivables, with the majority of receivables falling within 6 months Trade and Bills Receivables | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Trade receivables | 162,200 | 177,675 | | Bills receivables | 871 | 13,622 | | **Total** | **163,071** | **191,297** | Aging of Trade and Bills Receivables | Aging | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Within 6 months | 128,249 | 143,211 | | 6 months to 1 year | 7,204 | 24,125 | | 1 to 2 years | 21,728 | 19,230 | | Over 2 years | 12,128 | 13,873 | | **Total** | **169,309** | **200,439** | Loss Allowance for Trade and Bills Receivables | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Loss allowance at beginning of period | (9,142) | (8,818) | | Reversal of loss allowance | 2,904 | 2,022 | | Loss allowance at end of period | (6,238) | (6,796) | [Trade and Bills Payables](index=13&type=section&id=貿易應付款項及應付票據) As of June 30, 2025, the Group's total trade and bills payables slightly increased to RMB 6,234 thousands, primarily denominated in RMB with similar fair values Trade and Bills Payables | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Trade payables | 5,032 | 5,136 | | Bills payables | 1,202 | 577 | | **Total** | **6,234** | **5,713** | Aging of Trade and Bills Payables | Aging | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Within 3 months | 3,507 | 3,465 | | Over 6 months | 2,727 | 2,248 | | **Total** | **6,234** | **5,713** | [Dividends](index=14&type=section&id=股息) No dividends were paid or declared by the Group or any of its companies for the six months ended June 30, 2025 - For the six months ended June 30, 2025, no dividends were paid or declared by the Group or any of its companies (2024: nil)[31](index=31&type=chunk) [Management Discussion and Analysis](index=15&type=section&id=管理層討論及分析) [Business Review](index=15&type=section&id=業務回顧) As a leading ICV simulation testing technology company in China, the Group focuses on R&D of ICV simulation testing products and related solutions, expanding into emerging fields like intelligent manufacturing and low-altitude economy, while actively pursuing domestic and international market opportunities through strategic partnerships and continuous investment in AI large models - The Group is a technology company in China specializing in Intelligent Connected Vehicle (ICV) simulation testing technology, primarily engaged in the design and R&D of ICV simulation testing products and providing related testing, verification, and evaluation solutions[32](index=32&type=chunk) - The Group primarily offers ICV simulation testing software and platforms, ICV data platforms and other products, ICV testing and related services, and consulting and other services[32](index=32&type=chunk) - The Group is expanding its business into emerging fields such as intelligent manufacturing and the low-altitude economy, and has formed strategic partnerships with AutoNavi Software Co., Ltd. and SGS-CSTC Standards Technical Services (Shanghai) Co., Ltd. to jointly explore global ICV market opportunities[34](index=34&type=chunk) - The Group continues to increase investment in cutting-edge technologies such as AI large models, continuously enhancing its intelligent simulation testing and big data analysis capabilities[34](index=34&type=chunk) [Market Overview](index=15&type=section&id=市場概覽) Driven by government support and growing consumer demand, the ICV industry is rapidly developing, leading to a continuous increase in demand for ICV simulation testing technology, positioning the Group to steadily expand its business and achieve sustainable growth through its technological advantages and market position - The ICV industry is experiencing rapid growth, with technological advancements and widespread adoption leading to a continuous increase in demand for ICV simulation testing technology[35](index=35&type=chunk) - As a leading enterprise, the Group possesses strong technological advantages and market position, and is expected to steadily expand its business, seize market opportunities, and achieve sustainable growth[35](index=35&type=chunk) [Overall Business Performance](index=16&type=section&id=業務整體表現) During the reporting period, the Group's operating revenue increased by 63.7% year-on-year to approximately RMB 91.0 millions, successfully achieving a turnaround to profit with profit attributable to owners of the company reaching RMB 1.3 millions, driven by optimized solutions, increased innovation investment, and enhanced ICV technology development and market acceptance - During the reporting period, the Group achieved operating revenue of approximately **RMB 91.0 millions**, representing a **63.7%** increase compared to the same period in 2024[37](index=37&type=chunk) - Profit attributable to owners of the company turned from a loss of **RMB 4.7 millions** in the same period of 2024 to a profit of **RMB 1.3 millions**[37](index=37&type=chunk) - The performance growth is attributed to continuous optimization and upgrading of existing solutions, increased investment in innovation, and the development of intelligent driving technology and increased acceptance of ICVs in China[37](index=37&type=chunk) [Business Performance by Product/Service Type](index=16&type=section&id=分產品╱服務類型的業務表現) The Group achieved growth across all four major business segments: ICV simulation testing software and platforms, ICV data platforms and other products, ICV testing and related services, and consulting and other services, with ICV data platforms and other products experiencing the fastest revenue growth at 77.3%, continuously enhancing market competitiveness through technological upgrades, customer expansion, and customized solutions [ICV Simulation Testing Software and Platforms, ICV Data Platforms and Other Products](index=16&type=section&id=ICV仿真測試軟件及平台、ICV數據平台及其他產品) Revenue from ICV simulation testing software and platforms increased by 56.7% year-on-year to RMB 49.1 millions, with SaaS solutions well-received by customers, while ICV data platforms and other products saw a 77.3% year-on-year revenue increase to RMB 19.3 millions, successfully expanding to multiple key customers and optimizing data platform functionalities - Revenue from ICV simulation testing software and platforms was approximately **RMB 49.1 millions**, a year-on-year increase of **56.7%**[39](index=39&type=chunk) - In terms of ICV simulation testing platforms, the Group achieved significant success in customer expansion, establishing long-term partnerships with several renowned automotive manufacturers and technology companies[40](index=40&type=chunk) - Revenue from ICV data platforms and other products was approximately **RMB 19.3 millions**, a year-on-year increase of **77.3%**[41](index=41&type=chunk) - The Group has participated in building ICV data platforms in multiple cities across China and successfully expanded to several key customers[41](index=41&type=chunk)[42](index=42&type=chunk) [ICV Testing and Related Services, and Consulting and Other Services](index=17&type=section&id=ICV測試及相關服務，及顧問及其他服務) Revenue from ICV testing and related services was approximately RMB 9.3 millions, offering customized solutions including simulation testing, closed-field testing, and platform operation and maintenance, while consulting and other services revenue increased by 97.7% year-on-year to RMB 13.2 millions, primarily assisting clients with ICV regulatory compliance and organizing industry conferences - The Group's ICV testing and related services include simulation testing, closed-field testing, and platform operation and maintenance services, offering highly customized solutions[45](index=45&type=chunk)[46](index=46&type=chunk) - During the reporting period, the Group's revenue from ICV testing and related services was approximately **RMB 9.3 millions**[47](index=47&type=chunk) - Revenue from consulting and other services was approximately **RMB 13.2 millions**, a year-on-year increase of **97.7%**[48](index=48&type=chunk) - Consulting services primarily assist automotive manufacturers in understanding and complying with domestic and international laws, regulations, and standards related to ICVs, while other services assist government departments in organizing ICV and related industry conferences[48](index=48&type=chunk)[49](index=49&type=chunk) [Prospects and Future Plans](index=19&type=section&id=前景及未來規劃) The Group plans to uphold independent innovation, increase R&D investment, continuously optimize existing solutions (Sim Pro, Safety Pro, Traffic Pro, SceCo Pro), and invest in developing new products (SGO Pro, DB Pro, Cloud Pro), while expanding its customer base and market coverage, including more Chinese cities and a Hong Kong representative office for overseas markets, further growing its talent pool, and exploring simulation technology applications in emerging industries such as drones, digital twin cities, and smart agriculture - The Group will adhere to independent innovation, strengthen R&D and technological innovation investments to enhance the core competitiveness of its products and services, expand its market share in China, and explore overseas markets and other sectors[50](index=50&type=chunk) [The Group Plans to Continue Optimizing and Upgrading its Existing Solutions to Strengthen its Technological Advantages](index=19&type=section&id=本集團計劃繼續優化和升級本集團現有的解決方案，加強本集團的技術優勢) The Group plans to continuously optimize and upgrade its existing solutions, including Sim Pro, Safety Pro, Traffic Pro, and SceCo Pro, to enhance its technological advantages and market competitiveness - Plans to continuously optimize and upgrade existing solutions, including Sim Pro (upgrading sensor models, cloud simulation data closed-loop, XiL testing performance), Safety Pro (upgrading intelligent analysis functions, automatic generation of FuSa and SOTIF scenario libraries), Traffic Pro (optimizing real-time data processing engine, intelligent traffic light optimization algorithms, compatibility), and SceCo Pro (developing multi-source data integration, cloud deployment, and automatic generation of customized scenarios)[50](index=50&type=chunk) [The Group Plans to Increase Investment in Innovation and Enhance New Products to Consolidate its Market Position in the ICV Testing, Verification, and Evaluation Solutions Industry](index=20&type=section&id=本集團計劃增加投資於創新及增強新產品並鞏固本集團在ICV測試%2C%20驗證和評估解決方案行業的市場地位) The Group plans to increase investment in innovation and enhance new products, focusing on developing and commercializing tools such as SGO Pro, DB Pro, and Cloud Pro based on the Sim Pro toolchain, to consolidate its market position in the ICV testing, verification, and evaluation solutions industry - Plans to continue developing and commercializing new products, focusing on tools such as SGO Pro, DB Pro, and Cloud Pro based on the Sim Pro toolchain[51](index=51&type=chunk) [The Group Plans to Expand its Customer Base and Geographically Broaden its Market Coverage](index=20&type=section&id=本集團計劃擴大我們的客戶群並在地理上擴大我們的市場覆蓋範圍) The Group plans to expand its customer base and geographically broaden its market coverage by extending operations to more Chinese cities and considering a Hong Kong representative office and R&D center to lay the groundwork for overseas market expansion, while strengthening sales and marketing efforts domestically and internationally - Plans to expand business into more Chinese cities and consider establishing a representative office and R&D center in Hong Kong to lay the foundation for overseas market expansion[52](index=52&type=chunk) - Will strengthen sales and marketing efforts, including expanding and enhancing the effectiveness of domestic sales and marketing teams, and participating in and organizing more industry events in mainland China and Hong Kong[52](index=52&type=chunk) [The Group Plans to Expand its Talent Pool to Support its Business Development Plans](index=20&type=section&id=本集團計劃擴大我們的人才庫，以支持我們的業務發展計劃) The Group plans to expand its talent pool to support business development by continuously investing in and growing its R&D team with technical personnel in software development, algorithms, vehicle testing, industry research, and product design, and by recruiting more professionals with sales, marketing, project management, and execution experience - Plans to continuously invest in and expand its R&D team by attracting technical personnel in areas such as software development, algorithms, vehicle testing, industry research, and product design[53](index=53&type=chunk) - Will recruit more professionals with sales and marketing expertise and experience, as well as management talent with project management and execution experience[53](index=53&type=chunk) [The Group Plans to Expand the Application of Simulation Technology and Explore Business Opportunities in Other Industries](index=21&type=section&id=本集團計劃擴大仿真技術的應用%2C%20並發掘在其他行業的商機) The Group plans to expand the application of simulation technology and explore business opportunities in other industries by investing in drone operation management, testing, and commercial applications, addressing the growing demand for digital twin city solutions in urban transportation, and developing and commercializing simulation solutions for smart agricultural machinery manufacturers - Plans to explore investment in simulation technology for drone operation management, testing, and commercial applications[54](index=54&type=chunk) - Digital twin city solutions are expected to see increasing demand in administrative or research activities aimed at improving urban transportation[54](index=54&type=chunk) - Plans to conduct R&D and commercialize simulation solutions for testing smart agricultural machinery, targeting smart product manufacturers in the smart agriculture market[54](index=54&type=chunk) [Revenue](index=22&type=section&id=收%20入) The Group's revenue increased by 63.7% year-on-year to RMB 91.0 millions in the first half of 2025, primarily driven by increased revenue from ICV simulation testing platforms, ICV data platforms and other products, and consulting and other services - The Group's revenue increased by **RMB 35.4 millions** (or approximately **63.7%**) from **RMB 55.6 millions** in the first six months of 2024 to **RMB 91.0 millions** in the first six months of 2025[55](index=55&type=chunk) - The increase in revenue was primarily attributable to increased revenue from ICV simulation testing platforms, ICV data platforms and other products, and consulting and other services[55](index=55&type=chunk) Revenue Contribution by Product/Service | Revenue Contribution | 2025 (RMB thousands) | Share (%) | 2024 (RMB thousands) | Share (%) | | :--- | :--- | :--- | :--- | :--- | | ICV Simulation Testing Software and Platforms | 49,073 | 54.0 | 31,321 | 56.4 | | ICV Data Platforms and Other Products | 19,331 | 21.3 | 10,903 | 19.6 | | ICV Testing and Related Services | 9,310 | 10.2 | 6,638 | 11.9 | | Consulting and Other Services | 13,245 | 14.5 | 6,698 | 12.1 | | **Total Revenue** | **90,959** | **100** | **55,560** | **100** | [Cost of Sales](index=22&type=section&id=銷售成本) The Group's cost of sales increased by 100% year-on-year to RMB 33.0 millions in the first half of 2025, primarily due to increased hardware procurement - The Group's cost of sales increased by **RMB 16.5 millions** (or approximately **100%**) from **RMB 16.5 millions** in the first six months of 2024 to **RMB 33.0 millions** in the first six months of 2025[56](index=56&type=chunk) - The increase in cost of sales was primarily attributable to increased hardware procurement[56](index=56&type=chunk) [Gross Profit and Gross Profit Margin](index=23&type=section&id=毛利及毛利率) The Group's gross profit increased by 48.4% year-on-year to RMB 58.0 millions in the first half of 2025, but the overall gross profit margin decreased from 70.3% to 63.7%, primarily due to increased hardware and customization requirements from customers for ICV simulation testing software and platforms - The Group's gross profit increased by **RMB 18.9 millions** (or approximately **48.4%**) from **RMB 39.1 millions** in the first six months of 2024 to **RMB 58.0 millions** in the first six months of 2025[57](index=57&type=chunk) - The Group's overall gross profit margin decreased from **70.3%** in the first six months of 2024 to **63.7%** in the first six months of 2025[57](index=57&type=chunk) - The decrease in gross profit margin was primarily attributable to increased hardware and customization requirements from customers for ICV simulation testing software and platforms[57](index=57&type=chunk) [Other Income](index=23&type=section&id=其他收入) The Group's other income increased by 8.1% year-on-year to RMB 14.6 millions in the first half of 2025, primarily driven by an increase in government grants, partially offset by a decrease in VAT refunds - The Group's other income increased by **RMB 1.1 millions** (or approximately **8.1%**) from **RMB 13.5 millions** in the first six months of 2024 to **RMB 14.6 millions** in the first six months of 2025[58](index=58&type=chunk) - The increase in other income was primarily attributable to increased government grants, partially offset by a decrease in VAT refunds[58](index=58&type=chunk) [Net Other Gains/(Losses)](index=23&type=section&id=其他收益╱（虧損）淨額) The Group's net other gains/(losses) shifted from a loss of RMB 0.4 millions in the prior year to a gain of RMB 0.5 millions in the first half of 2025, primarily due to fair value changes in wealth management products measured at fair value through profit or loss - The Group's net other gains/(losses) turned from a loss of **RMB 0.4 millions** in the first six months of 2024 to a gain of **RMB 0.5 millions** in the first six months of 2025[59](index=59&type=chunk) - The change was primarily attributable to fair value changes in wealth management products measured at fair value through profit or loss[59](index=59&type=chunk) [Selling and Marketing Expenses](index=23&type=section&id=銷售及營銷開支) The Group's selling and marketing expenses decreased by 17.7% year-on-year to RMB 4.3 millions in the first half of 2025, primarily due to optimized adjustments to the sales team, leading to cost reduction and efficiency improvement - The Group's selling and marketing expenses decreased by **RMB 0.9 millions** (or approximately **17.7%**) from **RMB 5.2 millions** in the first six months of 2024 to **RMB 4.3 millions** in the first six months of 2025[60](index=60&type=chunk) - The decrease was primarily attributable to optimized adjustments to the sales team, leading to cost reduction and efficiency improvement[60](index=60&type=chunk) [General and Administrative Expenses](index=23&type=section&id=一般及行政開支) The Group's general and administrative expenses increased by 19.3% year-on-year to RMB 17.7 millions in the first half of 2025, primarily due to increased management personnel costs and office expenses related to listing activities - The Group's general and administrative expenses increased by **RMB 2.8 millions** (or approximately **19.3%**) from **RMB 14.9 millions** in the first six months of 2024 to **RMB 17.7 millions** in the first six months of 2025[61](index=61&type=chunk) - The increase was primarily attributable to increased management personnel costs and office expenses related to listing activities[61](index=61&type=chunk) [Research and Development Expenses](index=24&type=section&id=研發開支) The Group's R&D expenses increased by 32.5% year-on-year to RMB 54.5 millions in the first half of 2025, primarily due to increased depreciation and amortization expenses for equipment and intangible assets related to R&D activities - The Group's R&D expenses increased by **RMB 13.4 millions** (or approximately **32.5%**) from **RMB 41.1 millions** in the first six months of 2024 to **RMB 54.5 millions** in the first six months of 2025[62](index=62&type=chunk) - The increase was primarily attributable to increased depreciation and amortization expenses for equipment and intangible assets related to R&D activities[62](index=62&type=chunk) [Reversal of Impairment Loss on Financial and Contract Assets](index=24&type=section&id=金融及合約資產減值虧損撥回) The Group's reversal of impairment loss on financial and contract assets increased by 55.6% year-on-year to RMB 3.0 millions in the first half of 2025, primarily due to the collection of a significant amount of trade receivables during the reporting period - The Group's reversal of impairment loss on financial and contract assets increased by **RMB 1.1 millions** (or approximately **55.6%**) from **RMB 1.9 millions** in the first six months of 2024 to **RMB 3.0 millions** in the first six months of 2025[63](index=63&type=chunk) - The increase was primarily attributable to the collection of a significant amount of trade receivables during the reporting period[63](index=63&type=chunk) [Share of Profit/(Loss) of Investments Accounted for Using Equity Method](index=24&type=section&id=分佔以權益法入賬的投資的利潤╱（虧損）) The Group's share of profit/(loss) of investments accounted for using the equity method shifted from a loss of RMB 0.7 millions in the prior year to a profit of RMB 34 thousands in the first half of 2025, primarily due to improved operating results of the joint venture, Beijing Dishishi Data Technology Co., Ltd - The Group's share of profit/(loss) of investments accounted for using the equity method increased by **RMB 0.7 millions** (or approximately **105.1%**) from a loss of **RMB 0.7 millions** in the first six months of 2024 to a profit of **RMB 34 thousands** in the first six months of 2025[64](index=64&type=chunk) - The increase was primarily attributable to the improved operating results of the joint venture, Beijing Dishishi Data Technology Co., Ltd., in the first six months of 2025 compared to the first six months of 2024[64](index=64&type=chunk) [Net Finance Income](index=24&type=section&id=財務收入淨額) The Group's net finance income increased by 64.9% year-on-year to RMB 1.7 millions in the first half of 2025, primarily due to increased interest income from bank deposits, partially offset by increased exchange losses and interest expenses on lease liabilities - The Group's net finance income increased by **RMB 0.7 millions** (or approximately **64.9%**) from **RMB 1.0 millions** in the first six months of 2024 to **RMB 1.7 millions** in the first six months of 2025[65](index=65&type=chunk) - The increase was primarily attributable to increased interest income from bank deposits, partially offset by increased exchange losses and interest expenses on lease liabilities[65](index=65&type=chunk) [Income Tax (Expense)/Credit](index=24&type=section&id=所得稅（開支）╱抵免) The Group's income tax shifted from a credit of RMB 2.1 millions in the prior year to an expense of RMB 1.0 millions in the first half of 2025, primarily due to the reversal of deferred tax liabilities and assets - The Group's income tax shifted from a credit of **RMB 2.1 millions** in the first six months of 2024 to an expense of **RMB 1.0 millions** in the first six months of 2025[66](index=66&type=chunk) - The change was primarily due to the reversal of deferred tax liabilities of approximately **RMB 0.3 millions** and the reversal of deferred tax assets of approximately **RMB 1.3 millions** during the reporting period[66](index=66&type=chunk) [Profit/(Loss) for the Period Attributable to the Group](index=25&type=section&id=本集團期內利潤╱（虧損）) The Group's profit for the period shifted from a loss of RMB 4.6 millions in the prior year to a profit of RMB 0.4 millions in the first half of 2025, primarily driven by increased gross profit, but partially offset by increased R&D expenses, general and administrative expenses, and income tax expenses - The Group's profit/(loss) for the period turned from a loss of **RMB 4.6 millions** in the first six months of 2024 to a profit of **RMB 0.4 millions** in the first six months of 2025[67](index=67&type=chunk) - Primarily attributable to an increase in gross profit of approximately **RMB 18.9 millions**, partially offset by increased R&D expenses, general and administrative expenses, and income tax expenses[67](index=67&type=chunk) [Non-IFRS Measures](index=25&type=section&id=非國際財務報告準則衡量方法) The Group uses adjusted profit/(loss) as a non-IFRS measure to better compare operating performance across different fiscal years, with this adjustment excluding share-based payment expenses and listing expenses, resulting in an adjusted profit of RMB 1,573 thousands for the first half of 2025 - The Group uses adjusted profit/(loss) (a non-IFRS measure) as an additional financial metric to compare operating performance across different fiscal years and entities[68](index=68&type=chunk) - Adjusted profit/(loss) is defined as profit for the period, excluding share-based payment expenses and listing expenses[68](index=68&type=chunk) Adjusted Profit/(Loss) for the Period (Non-IFRS Measure) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Profit/(Loss) for the period | 389 | (4,599) | | Add: Share-based payment expenses | 604 | 604 | | Add: Listing expenses | 580 | 155 | | **Adjusted profit/(loss) for the period (Non-IFRS measure)** | **1,573** | **(3,840)** | [Property, Plant and Equipment, Right-of-Use Assets and Intangible Assets](index=26&type=section&id=設備%2C%20使用權資產及無形資產) As of June 30, 2025, the Group's property, plant and equipment increased to RMB 93.9 millions, primarily due to new fixed asset acquisitions, while right-of-use assets and intangible assets slightly decreased due to depreciation and amortization - The Group's property, plant and equipment increased from **RMB 37.9 millions** as of December 31, 2024, to **RMB 93.9 millions** as of June 30, 2025, primarily due to new fixed asset acquisitions during the reporting period[72](index=72&type=chunk) - Right-of-use assets decreased from **RMB 49.0 millions** as of December 31, 2024, to **RMB 43.0 millions** as of June 30, 2025, primarily due to depreciation of right-of-use assets[72](index=72&type=chunk) - Intangible assets decreased from **RMB 52.3 millions** as of December 31, 2024, to **RMB 51.6 millions** as of June 30, 2025, primarily due to amortization of intangible assets[72](index=72&type=chunk) [Financial Assets at Fair Value Through Profit or Loss](index=26&type=section&id=按公允值計入損益的金融資產) The Group's financial assets at fair value through profit or loss significantly increased from RMB 35.8 millions as of December 31, 2024, to RMB 263.6 millions as of June 30, 2025, primarily due to the purchase of wealth management products - The Group's financial assets at fair value through profit or loss increased from **RMB 35.8 millions** as of December 31, 2024, to **RMB 263.6 millions** as of June 30, 2025[73](index=73&type=chunk) - The increase was primarily due to the purchase of wealth management products[73](index=73&type=chunk) [Trade and Bills Receivables](index=26&type=section&id=貿易應收款項及應收票據) The Group's trade and bills receivables decreased from RMB 191.3 millions as of December 31, 2024, to RMB 163.1 millions as of June 30, 2025, primarily due to the collection of a significant amount of receivables, with turnover days significantly improving from 517.1 days to 352.6 days - The Group's trade and bills receivables decreased from **RMB 191.3 millions** as of December 31, 2024, to **RMB 163.1 millions** as of June 30, 2025[74](index=74&type=chunk) - The decrease was primarily due to the collection of a significant amount of trade receivables during the reporting period, partially offset by new receivables generated during the period[74](index=74&type=chunk) - The turnover days for trade and bills receivables were **352.6 days** for the first six months of 2025 (first six months of 2024: **517.1 days**)[74](index=74&type=chunk) [Prepayments and Other Receivables](index=26&type=section&id=預付款項及其他應收款項) The Group's prepayments and other receivables as of June 30, 2025, amounted to RMB 26.4 millions, a decrease of RMB 33.2 millions from the end of last year, primarily due to the transfer of capitalized listing-related prepayments to capital reserve - The Group's prepayments and other receivables as of June 30, 2025, amounted to **RMB 26.4 millions**, a decrease of **RMB 33.2 millions** from **RMB 59.6 millions** as of December 31, 2024[75](index=75&type=chunk) - The decrease was primarily due to the transfer of capitalized listing-related prepayments to capital reserve[75](index=75&type=chunk) [Current Assets](index=27&type=section&id=流動資產) The Group's current assets increased from RMB 495.7 millions as of December 31, 2024, to RMB 748.9 millions as of June 30, 2025, primarily due to an increase in cash and cash equivalents and financial assets at fair value through profit or loss - The Group's current assets increased from **RMB 495.7 millions** as of December 31, 2024, to **RMB 748.9 millions** as of June 30, 2025[76](index=76&type=chunk) - The increase was primarily due to an increase in cash and cash equivalents and financial assets at fair value through profit or loss[76](index=76&type=chunk) [Liquidity and Capital Resources](index=27&type=section&id=流動資金及資金資源) The Group primarily funds its operations through a combination of capital injections and operating cash flows, with cash and cash equivalents increasing to RMB 297.5 millions as of June 30, 2025, mainly due to proceeds from the listing, and the Group adopts a prudent financial management approach to its treasury policy - The Group has historically funded its operations primarily through a combination of capital injections and operating cash flows[77](index=77&type=chunk) - The Group's cash and cash equivalents increased from **RMB 208.3 millions** as of December 31, 2024, to **RMB 297.5 millions** as of June 30, 2025, primarily attributable to proceeds from the listing[77](index=77&type=chunk) [Net Cash Generated from Operating Activities](index=27&type=section&id=經營活動所得現金淨額) The Group's net cash generated from operating activities significantly increased by 9,679.2% to RMB 54.2 millions in the first half of 2025, primarily due to operating cash flow before working capital changes and working capital adjustments - The Group's net cash generated from operating activities increased by **RMB 53.6 millions** (or approximately **9,679.2%**) from **RMB 0.6 millions** in the first six months of 2024 to **RMB 54.2 millions** in the first six months of 2025[78](index=78&type=chunk) - The increase was primarily attributable to operating cash flow before working capital changes of approximately **RMB 35.9 millions** and working capital adjustments of **RMB 14.2 millions**[78](index=78&type=chunk) [Net Cash Used in Investing Activities](index=27&type=section&id=投資活動所用現金淨額) The Group's net cash used in investing activities increased to RMB 320.3 millions in the first half of 2025, a significant increase from the prior year, primarily due to the purchase of property, plant and equipment and wealth management products - For the first six months of 2025, the Group's net cash used in investing activities was **RMB 320.3 millions**, compared to **RMB 66.8 millions** in the first six months of 2024[79](index=79&type=chunk) - The increase was primarily due to the purchase of property, plant and equipment and wealth management products[79](index=79&type=chunk) [Net Cash Generated from/(Used in) Financing Activities](index=27&type=section&id=融資活動所得╱（所用）現金淨額) The Group's financing activities shifted from a cash outflow of RMB 18.1 millions in the prior year to a cash inflow of RMB 357.3 millions in the first half of 2025, primarily due to proceeds from the listing - The Group's net cash generated from/(used in) financing activities shifted from a cash outflow of **RMB 18.1 millions** in the first six months of 2024 to a cash inflow of **RMB 357.3 millions** in the same period of 2025[80](index=80&type=chunk) - Primarily attributable to proceeds from the listing[80](index=80&type=chunk) [Borrowings](index=28&type=section&id=借%20款) As of June 30, 2025, the Group had no external borrowings or loans - As of June 30, 2025, we had no external borrowings or loans (December 31, 2024: nil)[81](index=81&type=chunk) [Lease Liabilities](index=28&type=section&id=租賃負債) The Group's lease liabilities as of June 30, 2025, amounted to RMB 47.4 millions, a decrease of RMB 14.4 millions from the end of last year, primarily due to contractual payments for the Shunyi testing site lease - The Group's lease liabilities as of June 30, 2025, amounted to **RMB 47.4 millions**, a decrease of **RMB 14.4 millions** from **RMB 61.8 millions** as of December 31, 2024[82](index=82&type=chunk) - The decrease was primarily due to contractual payments for the lease of the Shunyi base of the National Intelligent Connected Vehicle and Smart Transportation (Beijing-Hebei) Demonstration Zone in the first half of 2025[82](index=82&type=chunk) [Trade and Bills Payables](index=28&type=section&id=貿易應付款項及應付票據) The Group's trade and bills payables increased from RMB 5.7 millions as of December 31, 2024, to RMB 6.2 millions as of June 30, 2025, primarily due to increased procurement costs driven by higher revenue, with turnover days decreasing from 51.9 days to 32.8 days - The Group's trade and bills payables increased from **RMB 5.7 millions** as of December 31, 2024, to **RMB 6.2 millions** as of June 30, 2025[83](index=83&type=chunk) - The increase was primarily due to increased procurement costs driven by higher revenue, which led to an increase in trade payables[83](index=83&type=chunk) - The turnover days for trade and bills payables were **32.8 days** for the reporting period (first six months of 2024: **51.9 days**)[83](index=83&type=chunk) [Capital Gearing Ratio](index=28&type=section&id=資本負債比率) As of June 30, 2025, the Group's capital gearing ratio remained at zero, consistent with the end of last year - As of June 30, 2025, the Group's capital gearing ratio was **zero** (December 31, 2024: zero)[84](index=84&type=chunk) [Pledge of Assets](index=28&type=section&id=資產抵押) As of June 30, 2025, the Group had no pledged assets - As of June 30, 2025, the Group had no pledged assets[85](index=85&type=chunk) [Foreign Exchange Risk](index=28&type=section&id=外匯風險) The Group's business is primarily conducted in RMB, with foreign exchange risk mainly arising from fluctuations in USD/RMB and HKD/RMB exchange rates, and while there is currently no foreign currency hedging policy, the Board of Directors will monitor the risk and consider hedging - The Group's business is primarily conducted in RMB, with most assets denominated in RMB[86](index=86&type=chunk) - The Group's foreign exchange risk primarily arises from fluctuations in USD/RMB and HKD/RMB exchange rates[86](index=86&type=chunk) - As of now, the Group has not formulated any foreign currency hedging policy, but the Board of Directors will monitor the risk and consider hedging[86](index=86&type=chunk) [Contingent Liabilities](index=28&type=section&id=或然負債) As of June 30, 2025, the Group had no significant contingent liabilities - As of June 30, 2025, the Group had no significant contingent liabilities (as of December 31, 2024: nil)[87](index=87&type=chunk) [Capital Commitments](index=29&type=section&id=資本承諾) As of June 30, 2025, the Group's unpaid capital commitments increased by HKD 52.8 millions compared to the end of last year, primarily due to investment in its wholly-owned subsidiary, Saimo Technology (Hong Kong) Limited - The Group's unpaid capital commitments as of June 30, 2025, increased by **HKD 52.8 millions** compared to the end of last year, due to its investment in the wholly-owned subsidiary, Saimo Technology (Hong Kong) Limited[88](index=88&type=chunk) [Use of Proceeds from Global Offering](index=29&type=section&id=全球發售所得款項用途) The company completed its global offering and listing on the Stock Exchange on January 15, 2025, raising net proceeds of approximately RMB 328.8 millions, of which RMB 30.5 millions had been utilized as of June 30, 2025, primarily for continuous R&D investment and general corporate purposes, with no change in the intended use - The company completed its global offering and successfully listed on the Hong Kong Stock Exchange on January 15, 2025[89](index=89&type=chunk) - The global offering generated net proceeds of approximately **RMB 328.8 millions**[89](index=89&type=chunk) Use of Net Proceeds from Global Offering | Purpose | Allocated Net Proceeds (RMB millions) | Share (%) | Net Proceeds Utilized (RMB millions) | Net Proceeds Unutilized (RMB millions) | Expected Timeline for Use of Proceeds | | :--- | :--- | :--- | :--- | :--- | :--- | | Continuous R&D Investment - R&D of existing solutions | 57.5 | 17.5% | 3.9 | 53.6 | Before December 2027 | | Continuous R&D Investment - R&D of new tools and cloud infrastructure | 101.3 | 30.8% | – | 101.3 | Before December 2027 | | Continuous R&D Investment - Penetration into new industries | 45.7 | 13.9% | – | 45.7 | Before December 2027 | | Geographical expansion and marketing | 91.4 | 27.8% | – | 91.4 | Before December 2027 | | General corporate purposes and replenishment of working capital | 32.9 | 10.0% | 26.6 | 6.3 | Before December 2027 | | **Total** | **328.8** | **100%** | **30.5** | **298.3** | | - As of the date of this announcement, there has been no change in the intended use of net proceeds as disclosed in the prospectus[90](index=90&type=chunk) [Significant Investments Held, Material Acquisitions and Disposals of Subsidiaries, Associates and Joint Ventures](index=30&type=section&id=所持重大投資%2C%20重大收購與出售附屬公司%2C%20聯營公司及合營公司) In the first half of 2025, the company had no significant investments, material acquisitions, or disposals of any subsidiaries, associates, or joint ventures, other than those disclosed in this announcement - For the first six months of 2025, the company had no significant investments other than those disclosed in this announcement[91](index=91&type=chunk) - For the first six months of 2025, the company had no material acquisitions or disposals of any subsidiaries, associates, or joint ventures other than those disclosed in this announcement[91](index=91&type=chunk) [Future Plans for Material Investments or Capital Assets](index=30&type=section&id=重大投資或資本資產的未來計劃) As of the date of this announcement, the Group had no other future plans for material investments or capital assets, except for those disclosed in the prospectus and this announcement - As of the date of this announcement, the Group had no other future plans for material investments or capital assets, except for those disclosed in the "Future Plans and Use of Proceeds" section of the prospectus and in this announcement[92](index=92&type=chunk) [Employees and Remuneration Policy](index=31&type=section&id=僱員及薪酬政策) As of June 30, 2025, the Group had 162 employees with staff costs of approximately RMB 33.5 millions, providing internal and external training, employee incentive plans, and an H-share award trust scheme to attract and retain talent, while actively participating in China's local government housing provident fund and employee social security schemes - As of June 30, 2025, the Group had **162** employees (June 30, 2024: 185 employees)[93](index=93&type=chunk) - For the first six months of 2025, the Group's staff costs were approximately **RMB 33.5 millions** (same period in 2024: approximately **RMB 33.9 millions**)[93](index=93&type=chunk) - The Group provides internal and external training courses for employees and has an employee incentive scheme and a 2025 H-share award trust scheme to incentivize key management and technical personnel[94](index=94&type=chunk) - The Group participates in housing provident fund and employee social security schemes organized by relevant local government departments in China[94](index=94&type=chunk) [Material Events After Reporting Period](index=31&type=section&id=報告期後重大事項) No material and significant events affecting the Group occurred after June 30, 2025, up to the date of this announcement, other than those disclosed herein - Except as disclosed in this announcement, no material and significant events affecting the Group occurred after June 30, 2025, up to the date of this announcement[96](index=96&type=chunk) [Corporate Governance](index=31&type=section&id=企業管治) [Compliance with Corporate Governance Code](index=31&type=section&id=遵守企業管治守則) The company has adopted and applied the Corporate Governance Code set out in Appendix C1 to the Listing Rules of the Stock Exchange since its listing date and has continuously complied with all applicable code provisions and other laws and regulations without any deviation during the period - The company has adopted and applied the Corporate Governance Code set out in Appendix C1 to the Listing Rules of the Stock Exchange since its listing date[98](index=98&type=chunk) - The company has continuously complied with all applicable code provisions of the Corporate Governance Code and other applicable laws and regulatory requirements since its listing, with no deviation from the code provisions of the Corporate Governance Code during the period from the listing date to June 30, 2025[98](index=98&type=chunk) [Compliance with the Model Code for Securities Transactions by Directors and Supervisors](index=32&type=section&id=遵守董事及監事進行證券交易的標準守則) The company has adopted the Model Code as set out in Appendix C3 to the Listing Rules as the code of conduct for securities transactions by directors, supervisors, and relevant employees, and confirms that all directors and supervisors have complied with the Model Code during the reporting period - The company has adopted the "Model Code for Securities Transactions by Directors of Listed Issuers" as set out in Appendix C3 to the Listing Rules as the code of conduct for all securities transactions by directors, supervisors, and relevant employees of the company[99](index=99&type=chunk) - The company, after specific inquiries to all directors and supervisors, confirms that all directors and supervisors have complied with the required standards set out in the Model Code during the period from the listing date to June 30, 2025[99](index=99&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=32&type=section&id=購買%2C%20出售或贖回本公司之上市證券) Neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities during the reporting period, nor did the company hold any treasury shares - Neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities (including the sale of treasury shares) during the reporting period[100](index=100&type=chunk) - As of June 30, 2025, the company held no treasury shares[101](index=101&type=chunk) [Interim Dividend](index=32&type=section&id=中期股息) The Board of Directors resolved not to declare any interim dividend for the six months ended June 30, 2025 - For the six months ended June 30, 2025, the Board of Directors resolved not to declare any interim dividend (for the six months ended June 30, 2024: nil)[102](index=102&type=chunk) [Audit Committee](index=32&type=section&id=審核委員會) The company's Audit Committee, comprising three independent non-executive directors, provides independent opinions on financial reporting procedures, risk management, and internal control systems, and oversees the audit process, with members possessing professional qualifications and no former partners of the current external auditor - The company's Audit Committee comprises three independent non-executive directors: Ms. Guo Lili (Chairperson), Mr. Huang Hua, and Mr. Huang Haojun[103](index=103&type=chunk) - The primary responsibilities of the Audit Committee are to provide independent opinions to assist the Board of Directors on the effectiveness of the Group's financial reporting procedures, risk management, and internal control systems, and to oversee audit processes, development, and review policies[104](index=104&type=chunk) [Review of Unaudited Condensed Consolidated Interim Results](index=33&type=section&id=審閱未經審核簡明綜合中期業績) The Audit Committee has reviewed the Group's unaudited condensed consolidated interim results for the six months ended June 30, 2025, and deemed them compliant with applicable accounting standards, laws, and regulations - The Audit Committee has reviewed the Group's unaudited condensed consolidated interim results for the six months ended June 30, 2025[105](index=105&type=chunk) - The Audit Committee is of the opinion that the Group's unaudited condensed consolidated interim results for the six months ended June 30, 2025, comply with applicable accounting standards, laws, and regulations[105](index=105&type=chunk) [Publication of Interim Results Announcement and Interim Report](index=33&type=section&id=刊登中期業績公告及中期報告) This announcement has been published on the Stock Exchange website and the company's website, and the company's interim report for the six months ended June 30, 2025, will be dispatched to shareholders requesting printed corporate communications and published on the respective websites in due course - This announcement is published on the Stock Exchange website (www.hkexnews.hk) and the company's website (www.saimo.cloud)[106](index=106&type=chunk) - The company's interim report for the six months ended June 30, 2025, will be dispatched to shareholders requesting printed corporate communications in due course and published on the respective websites of the company and the Stock Exchange[106](index=106&type=chunk)

[Financial Highlights](index=1&type=section&id=Financial%20Highlights) The company's revenue decreased by 4.5% to RMB 139.6 million, with net profit declining by 23.4% to RMB 37.0 million in H1 2025 Key Financial Indicators for H1 2025 | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 139.6 | 146.2 | -4.5% | | Net Profit | 37.0 | 48.3 | -23.4% | | Net Profit Margin | 26.5% | - | - | | Basic Earnings Per Share | 0.94 cents | 1.20 cents | -0.26 cents | | Interim Dividend | None | None | Flat | [Interim Results](index=2&type=section&id=Interim%20Results) The company's interim results show a decline in revenue and profit, with basic earnings per share at RMB 0.94 cents [Consolidated Statement of Profit or Loss](index=2&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss) For the six months ended June 30, 2025, revenue was RMB 139,608 thousand, a 4.5% decrease, with profit for the period at RMB 37,025 thousand, down 23.4% Key Data from Consolidated Statement of Profit or Loss (For the six months ended June 30) | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Revenue | 139,608 | 146,238 | | Other net income | 8,518 | 13,159 | | Staff costs | (34,258) | (60,393) | | Depreciation and amortization expenses | (1,086) | (5,227) | | Other operating expenses | (19,523) | (31,737) | | Impairment loss on trade and other receivables and contract assets | (44,000) | 15,832 | | Finance costs | (79) | (158) | | Profit before tax | 49,180 | 77,714 | | Income tax | (12,155) | (29,388) | | Profit for the period | 37,025 | 48,326 | | Basic earnings per share (RMB cents) | 0.94 | 1.20 | [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=3&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) Profit for the period was RMB 37,025 thousand, with total comprehensive income of RMB 40,467 thousand, a decrease from the prior year Key Data from Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the six months ended June 30) | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Profit for the period | 37,025 | 48,326 | | Net change in equity investments at fair value through other comprehensive (loss)/income | (109) | 133 | | Other comprehensive income for the period | 3,442 | 2,259 | | Total comprehensive income for the period | 40,467 | 50,585 | | Attributable to equity holders of the Company | 39,278 | 47,190 | | Attributable to non-controlling interests | 1,189 | 3,395 | [Consolidated Statement of Financial Position](index=4&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, net current assets were RMB 2,543,276 thousand, with cash and cash equivalents increasing to RMB 2,572,999 thousand Key Data from Consolidated Statement of Financial Position (As of June 30) | Indicator | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | **Non-current assets** | | | | Other financial assets | 1,665 | 1,774 | | Investment properties | 5,325 | 6,468 | | Property, plant and equipment | 41,822 | 32,092 | | Deferred tax assets | 48,812 | 40,334 | | **Current assets** | | | | Contract assets | 74,802 | 98,440 | | Trade and other receivables | 444,704 | 469,863 | | Cash and cash equivalents | 2,572,999 | 2,484,045 | | **Current liabilities** | | | | Trade and other payables | 222,520 | 222,540 | | Contract liabilities | 215,036 | 222,259 | | Current tax | 108,063 | 93,568 | | **Total equity** | 2,592,088 | 2,549,586 | [Notes to the Unaudited Interim Financial Report](index=6&type=section&id=Notes%20to%20the%20Unaudited%20Interim%20Financial%20Report) This section details the basis of preparation, accounting policy changes, and specific financial statement items for the interim period [1 Basis of Preparation](index=6&type=section&id=1%20Basis%20of%20Preparation) The interim financial report is prepared in accordance with HKAS 34 and authorized for issue on August 25, 2025, using consistent accounting policies - This interim financial report is prepared in accordance with the Listing Rules of The Stock Exchange of Hong Kong Limited and HKAS 34, authorized for issue on August 25, 2025[17](index=17&type=chunk) - The report adopts the same accounting policies as the 2024 annual financial statements and includes explanations of significant events and transactions affecting financial position and performance[17](index=17&type=chunk)[18](index=18&type=chunk) [2 Changes in Accounting Policies](index=7&type=section&id=2%20Changes%20in%20Accounting%20Policies) The Group adopted new HKFRS amendments, including HKAS 21 (Amendment) 'Lack of Exchangeability', with no significant impact on financial statements - The Group first applied new and amended HKFRS, including HKAS 21 (Amendment) 'Lack of Exchangeability', during this interim period[19](index=19&type=chunk) - These changes in accounting policies did not result in significant changes to the financial position or performance for the current or prior periods[19](index=19&type=chunk) [3 Revenue and Segment Reporting](index=7&type=section&id=3%20Revenue%20and%20Segment%20Reporting) The Group's primary business is property project management services, with revenue of RMB 139,608 thousand, and operates as a single segment in China - The Group's principal business is providing property project management services[20](index=20&type=chunk) Breakdown of Revenue from Contracts with Customers (For the six months ended June 30) | Service Category | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Provision of property project management services | 139,608 | 146,238 | - The Group has only one operating segment, and as the vast majority of revenue and profit are derived from China, no geographical information is presented[21](index=21&type=chunk)[22](index=22&type=chunk) [4 Other Net Income](index=8&type=section&id=4%20Other%20Net%20Income) Other net income decreased by RMB 4.6 million to RMB 8,518 thousand, primarily due to lower interest income from financial assets Composition of Other Net Income (For the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Interest income from financial assets measured at amortized cost | 8,460 | 12,577 | | Government grants | 13 | 31 | | Net exchange loss | – | (1,356) | | Others | 45 | 1,907 | | **Total** | **8,518** | **13,159** | - Other net income decreased by **RMB 4.6 million**, mainly due to a reduction in interest income from financial assets measured at amortized cost[23](index=23&type=chunk)[57](index=57&type=chunk) [5 Profit Before Tax](index=8&type=section&id=5%20Profit%20Before%20Tax) Profit before tax decreased to RMB 49,180 thousand, influenced by reduced staff costs and other operating expenses, but increased impairment losses Key Deductions from Profit Before Tax (For the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Staff costs | 34,258 | 60,393 | | Depreciation expenses | 1,086 | 3,975 | | Amortization of intangible assets | – | 1,252 | | Impairment loss/(reversal) on trade and other receivables and contract assets | 44,000 | (15,832) | [5(b) Staff Costs](index=9&type=section&id=5(b)%20Staff%20Costs) Staff costs decreased by 43.3% to RMB 34,258 thousand, primarily due to stricter performance appraisal systems implemented during the period Composition of Staff Costs (For the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Salaries, wages and other benefits | 28,685 | 51,905 | | Contributions to defined contribution retirement plans | 3,538 | 3,817 | | Equity-settled share-based payment expenses | 2,035 | 4,671 | | **Total** | **34,258** | **60,393** | - Staff costs decreased by **43.3%**, mainly due to the Group's implementation of a stricter performance appraisal system during the period[58](index=58&type=chunk) [5(c) Impairment Loss/(Reversal) on Trade and Other Receivables and Contract Assets](index=9&type=section&id=5(c)%20Impairment%20Loss%2F(Reversal)%20on%20Trade%20and%20Other%20Receivables%20and%20Contract%20Assets) Impairment loss on trade and other receivables and contract assets increased significantly to RMB 44,000 thousand for the period Impairment Loss/(Reversal) (For the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Trade receivables | 42,985 | 1,748 | | Contract assets | 2,037 | (13,015) | | Other receivables | (1,022) | (4,565) | | **Total** | **44,000** | **(15,832)** | [5(d) Other Items](index=9&type=section&id=5(d)%20Other%20Items) Depreciation and amortization expenses decreased to RMB 1,086 thousand, reflecting changes in property, plant, equipment, and intangible assets Depreciation and Amortization Expenses (For the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Owned property, plant and equipment | 105 | 1,239 | | Right-of-use assets | 703 | 2,458 | | Investment properties | 278 | 278 | | Amortization of intangible assets | – | 1,252 | | **Total** | **1,086** | **5,227** | [6 Income Tax](index=10&type=section&id=6%20Income%20Tax) Income tax for the period significantly decreased to RMB 12,155 thousand, with varying tax rates for Chinese subsidiaries and no Pillar Two impact Composition of Income Tax (For the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | China corporate income tax | 21,885 | 26,633 | | Deferred tax (origination and reversal of temporary differences) | (9,730) | 2,755 | | **Total** | **12,155** | **29,388** | - Subsidiaries operating in mainland China are subject to a statutory corporate income tax rate of **25%**, while Central China Management Services (Hainan) enjoys a preferential tax rate of **15%**[29](index=29&type=chunk) - Hong Kong subsidiaries are subject to a **5%** withholding tax on dividend distributions and intercompany interest balances from Chinese subsidiaries[30](index=30&type=chunk) - Pillar Two income tax new legislation is effective from January 1, 2025, and the Group does not expect any current tax impact for the period ended June 30, 2025[31](index=31&type=chunk) [7 Earnings Per Share](index=11&type=section&id=7%20Earnings%20Per%20Share) Basic earnings per share decreased to RMB 0.94 cents, and diluted earnings per share to RMB 0.93 cents, due to lower profit and increased weighted average shares Earnings Per Share Data (For the six months ended June 30) | Indicator | 2025 (RMB cents) | 2024 (RMB cents) | | :--- | :--- | :--- | | Basic earnings per share | 0.94 | 1.20 | | Diluted earnings per share | 0.93 | 1.18 | Weighted Average Number of Ordinary Shares (For the six months ended June 30) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Weighted average number of ordinary shares, basic | 3,832,309,631 | 3,754,563,720 | | Dilutive effect of 2023 share award scheme | 15,982,397 | 52,632,500 | | **Weighted average number of ordinary shares, diluted** | **3,848,292,028** | **3,807,196,220** | [8 Trade and Other Receivables](index=12&type=section&id=8%20Trade%20and%20Other%20Receivables) Trade and other receivables decreased by 5.4% to RMB 444,704 thousand, mainly due to the recovery of interest-bearing advances to third parties Trade and Other Receivables (As of June 30) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Trade receivables and bills receivable | 544,075 | 480,607 | | Less: Loss allowance for credit losses | (223,171) | (180,186) | | Trade receivables and bills receivable (net of loss allowance) | 320,904 | 300,421 | | Amounts due from related parties | 5,254 | 5,129 | | Interest-bearing advances to third parties | – | 42,000 | | Other receivables | 112,369 | 115,176 | | Financial assets measured at amortized cost | 438,527 | 462,726 | | Deposits and prepayments | 6,177 | 7,137 | | **Total** | **444,704** | **469,863** | - Trade and other receivables decreased by **5.4%**, primarily due to the recovery of interest-bearing advances to third parties (RMB 42,000,000) in 2025[35](index=35&type=chunk)[61](index=61&type=chunk) [Aging Analysis](index=13&type=section&id=Aging%20Analysis) The aging analysis of trade receivables and bills receivable shows an increase in balances over one year as of the reporting period end Aging Analysis of Trade Receivables and Bills Receivable (As of reporting period end) | Aging | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within 6 months | 136,948 | 135,911 | | 6 months to 1 year | 111,198 | 129,176 | | Over 1 year | 72,758 | 35,334 | | **Total** | **320,904** | **300,421** | [9 Cash and Cash Equivalents](index=13&type=section&id=9%20Cash%20and%20Cash%20Equivalents) Cash and cash equivalents increased to RMB 2,572,999 thousand as of June 30, 2025, from RMB 2,484,045 thousand at December 31, 2024 Cash and Cash Equivalents (As of reporting period end) | Indicator | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Cash and cash equivalents | 2,572,999 | 2,484,045 | [10 Trade and Other Payables](index=14&type=section&id=10%20Trade%20and%20Other%20Payables) Trade and other payables remained stable at RMB 222,520 thousand, with amounts due to related parties being unsecured, interest-free, and without fixed repayment terms Trade and Other Payables (As of reporting period end) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Amounts due to related parties | 49,931 | 48,803 | | Other payables and accrued expenses | 172,589 | 173,737 | | **Total** | **222,520** | **222,540** | - Amounts due to related parties are unsecured, interest-free, and have no fixed repayment terms, with all trade and other payables expected to be settled within one year or on demand[39](index=39&type=chunk)[40](index=40&type=chunk) [11 Dividends](index=14&type=section&id=11%20Dividends) The Board of Directors does not recommend any interim dividend for the six months ended June 30, 2025, consistent with the prior year - The Board of Directors does not recommend the payment of any dividend for the six months ended June 30, 2025 (June 30, 2024: None)[41](index=41&type=chunk) [Management Discussion and Analysis](index=15&type=section&id=Management%20Discussion%20and%20Analysis) This section provides an overview of the Group's business, market conditions, project developments, future strategies, and financial performance [I. Business Overview](index=15&type=section&id=I.%20Business%20Overview) In H1 2025, Central China Management maintained its leading position in property project management, signing 460 projects and achieving RMB 5.48 billion in contracted sales - In H1 2025, Central China Management signed **460 projects**, with a contracted GFA of **56.341 million sq.m**[42](index=42&type=chunk) - Achieved contracted sales of **RMB 5.48 billion**, with a sales area of **895,000 sq.m**, and delivered **905,000 sq.m** of housing[42](index=42&type=chunk) - The company enhanced brand visibility by successfully creating multiple regional benchmark delivery cases[42](index=42&type=chunk) [II. Macroeconomic Environment](index=15&type=section&id=II.%20Macroeconomic%20Environment) H1 2025 saw weak global recovery, increased geopolitical uncertainty, stable domestic economy with structural challenges, and a struggling real estate market despite policy easing - H1 2025 global economic recovery was weak, with geopolitical conflicts and trade barriers increasing external uncertainties[43](index=43&type=chunk) - The domestic economy remained generally stable but faced prominent structural challenges, with a slowdown in the secondary industry and a rebound in the tertiary industry[43](index=43&type=chunk)[44](index=44&type=chunk) - Domestic demand was weak, consumer confidence needed boosting, fixed asset investment growth slowed, and real estate investment remained under pressure[44](index=44&type=chunk) - Real estate market policies remained loose, with a market recovery in Q1, intensified policies to stimulate demand in Q2, but subsequent transaction declines, stable or slightly falling prices, and slow recovery in third and fourth-tier cities[45](index=45&type=chunk) [III. Project Management Services Market](index=16&type=section&id=III.%20Project%20Management%20Services%20Market) The project management industry entered a moderate growth phase in H1 2025, with overall scale declining and intensified competition leading to consolidation among top players - In H1 2025, the project management industry entered a moderate growth phase, with overall scale declining; Top 20 enterprises' cumulative contracted GFA grew by **6%** to **45.34 million sq.m**, a significant slowdown from **17%** in H1 2024[46](index=46&type=chunk) - Market competition intensified, showing a 'stronger at the top, clearing at the bottom' reshuffling trend[46](index=46&type=chunk) - Central China Management received multiple industry honors, including 'TOP30 China Project Management Enterprises by Comprehensive Strength in 2025' and 'TOP6 China Project Management Enterprises by Brand Value in 2025'[47](index=47&type=chunk) - The company steadfastly advanced its 'Greater Central China' core strategy, significantly increasing the proportion of government project management business through strategic cooperation agreements with government platforms and state-owned enterprises[48](index=48&type=chunk) [IV. Project Development During the Period](index=17&type=section&id=IV.%20Project%20Development%20During%20the%20Period) During the period, 11 new projects were signed, adding 731,000 sq.m of GFA, a 47.3% decrease, with contracted sales of RMB 5.48 billion, down 23.6% - During the period, **11 new project management projects** were signed, adding **731,000 sq.m** of contracted GFA, a **47.3%** decrease compared to H1 2024[49](index=49&type=chunk) - Contracted sales for projects under management amounted to **RMB 5.48 billion**, a **23.6%** decrease year-on-year; contracted sales area was **895,000 sq.m**, a **24.4%** decrease year-on-year[49](index=49&type=chunk) - As of June 30, 2025, the Group managed **251 projects** with a total GFA of **29.943 million sq.m**, including **216 projects** within the province and **35 projects** outside the province[49](index=49&type=chunk) - Central China Management focuses on third and fourth-tier markets in the Greater Central China region, having entered **138 counties and cities** both within and outside the province[49](index=49&type=chunk) [V. Future Business Plans and Strategies](index=18&type=section&id=V.%20Future%20Business%20Plans%20and%20Strategies) The company will pursue high-quality development by innovating out-of-province models, reforming operational management, creating 'good house' standards, and elevating its brand - The company will continue to be guided by the 'Greater Central China' strategy, seizing historical opportunities for stock renewal and model upgrading[50](index=50&type=chunk) [1. Strategic Breakthroughs, Innovative Out-of-Province Development Models](index=18&type=section&id=1.%20Strategic%20Breakthroughs%2C%20Innovative%20Out-of-Province%20Development%20Models) Innovate out-of-province development by establishing resource-based partnerships and piloting an equity cooperation model in Shandong to replicate expansion - Innovate out-of-province development models by withdrawing Greater Central China's out-of-province institutions, building a resource-based partnership ecosystem, and introducing geographically advantageous teams to overcome resource bottlenecks[50](index=50&type=chunk) - Pilot the 'equity cooperation, regional openness' model in Shandong as a strategic trial, creating a replicable out-of-province expansion paradigm[50](index=50&type=chunk) [2. Mechanism Innovation, Operational Management Reform](index=18&type=section&id=2.%20Mechanism%20Innovation%2C%20Operational%20Management%20Reform) Deepen dynamic assessment and execution capabilities through a tiered, precise appraisal system and a quarterly target enforcement mechanism - Deepen dynamic assessment and execution capabilities, relying on a tiered, precise appraisal system with differentiated standards set by headquarters and weighted key outcomes by regional divisions[51](index=51&type=chunk) - Establish a strong quarterly target enforcement mechanism, requiring executive committee reviews and rectifications for those failing to meet single-quarter targets, and initiating leadership position competitive bidding for those failing for two consecutive quarters[51](index=51&type=chunk) [3. Product Advancement, "Good House" Standard Creation](index=19&type=section&id=3.%20Product%20Advancement%2C%20%22Good%20House%22%20Standard%20Creation) Anchor 'good house' policy, deepen New Song-style product R&D, and build technical barriers through cost control and updated technical standards to enhance value - Deeply anchor the 'good house' policy direction, deepen New Song-style product R&D and precise customer marketing to break through homogeneous competition[52](index=52&type=chunk) - Build technical barriers through conceptual design cost control and iterative technical standards for 'Fourth-Generation Housing Guidelines', expand core category centralized procurement coverage, and strictly control design changes and ineffective costs to form a 'cost control-efficiency improvement-value addition' closed loop[52](index=52&type=chunk) [4. Brand Elevation, Driving Value Growth](index=19&type=section&id=4.%20Brand%20Elevation%2C%20Driving%20Value%20Growth) Elevate brand value by optimizing full-process service standards, creating high-quality benchmark projects, and integrating industry influence with customer testimonials - Optimize full-process service standards by front-loading operational planning into the project expansion phase, improving signing efficiency and product premium[53](index=53&type=chunk) - Concentrate resources on creating high-quality benchmark projects featuring 'real-scene presentation + delivery upon certification' to strengthen brand credibility[53](index=53&type=chunk) - Build an industry influence network by linking the industrial chain and integrating concrete content such as project delivery and customer testimonials to precisely convey brand value[53](index=53&type=chunk) [VI. Outlook](index=19&type=section&id=VI.%20Outlook) Central China Management will deepen its 'Greater Central China' strategy, leveraging opportunities for urban renewal and model upgrades to enhance competitiveness and achieve synergistic growth - Central China Management will steadfastly deepen its 'Greater Central China' core strategy, precisely seizing structural opportunities in urban renewal and model upgrading[54](index=54&type=chunk) - This includes innovating out-of-province cooperation models, strengthening execution, advancing product quality with 'good house' standards, and continuously promoting brand upgrade strategies[54](index=54&type=chunk) - Future efforts will focus on a dual mechanism of panoramic management for cost reduction and efficiency improvement, alongside proactive risk control, to enhance competitive advantage and achieve synergistic growth in scale and efficiency[54](index=54&type=chunk) [Financial Review](index=20&type=section&id=Financial%20Review) The Group's revenue declined by 4.5% due to market downturn, while net profit decreased by 23.4% mainly due to increased credit impairment losses on receivables [Revenue](index=20&type=section&id=Revenue) Revenue for the period decreased by 4.5% to RMB 139.6 million, primarily due to the downturn in the domestic real estate market and lower service fees - Revenue for the period was **RMB 139.6 million**, a **4.5%** decrease compared to H1 2024, mainly due to the continued downturn in the domestic real estate market and lower service fee rates[55](index=55&type=chunk) Revenue by Region (For the six months ended June 30) | Region | 2025 (RMB thousand) | % of Revenue | 2024 (RMB thousand) | % of Revenue | Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Henan Province projects | 127,709 | 91.5% | 125,525 | 85.8% | 1.7% | | Projects outside Henan Province | 11,899 | 8.5% | 20,713 | 14.2% | (42.6%) | | **Total** | **139,608** | **100.0%** | **146,238** | **100.0%** | **(4.5%)** | [Other Net Income](index=21&type=section&id=Other%20Net%20Income) Other net income decreased by RMB 4.6 million to RMB 8.5 million, mainly due to reduced interest income from financial assets measured at amortized cost - Other net income for the period was **RMB 8.5 million**, a decrease of **RMB 4.6 million** compared to H1 2024, primarily due to reduced interest income from financial assets measured at amortized cost[57](index=57&type=chunk) [Staff Costs](index=21&type=section&id=Staff%20Costs) Staff costs decreased by 43.3% to RMB 34.3 million, mainly attributed to the implementation of stricter performance appraisal systems - Staff costs for the period were **RMB 34.3 million**, a **43.3%** decrease compared to H1 2024, primarily due to the Group's implementation of a stricter performance appraisal system during the period[58](index=58&type=chunk) [Other Operating Expenses](index=21&type=section&id=Other%20Operating%20Expenses) Other operating expenses decreased by 38.5% to RMB 19.5 million, reflecting the Group's strict control over various operating expenditures - Other operating expenses for the period were **RMB 19.5 million**, a **38.5%** decrease compared to H1 2024, mainly due to the Group's strict control over various operating expenditures[59](index=59&type=chunk) [Profit for the Period](index=21&type=section&id=Profit%20for%20the%20Period) Net profit for the period decreased by 23.4% to RMB 37.0 million, primarily due to increased credit impairment losses on receivables - Net profit for the period was **RMB 37.0 million**, a **23.4%** decrease compared to H1 2024, mainly due to increased credit impairment losses recognized by the Group due to higher expected credit loss risk on receivables[60](index=60&type=chunk) [Trade and Other Receivables](index=22&type=section&id=Trade%20and%20Other%20Receivables_Financial%20Review) Trade and other receivables decreased by 5.4% to RMB 444.7 million as of June 30, 2025, mainly due to a reduction in third-party advances - As of June 30, 2025, trade and other receivables amounted to **RMB 444.7 million**, a **5.4%** decrease compared to December 31, 2024, primarily due to a reduction in third-party advances[61](index=61&type=chunk) [Contract Assets](index=22&type=section&id=Contract%20Assets) Contract assets decreased by 24.0% to RMB 74.8 million as of June 30, 2025, expected to convert into operating cash inflows in the future - As of June 30, 2025, contract assets amounted to **RMB 74.8 million**, a **24.0%** decrease compared to December 31, 2024, and are expected to convert into operating cash inflows in the future[62](index=62&type=chunk) [Trade and Other Payables](index=22&type=section&id=Trade%20and%20Other%20Payables_Financial%20Review) Trade and other payables remained stable at RMB 222.5 million as of June 30, 2025, consistent with December 31, 2024 - As of June 30, 2025, trade and other payables amounted to **RMB 222.5 million**, remaining flat compared to December 31, 2024[63](index=63&type=chunk) [Contract Liabilities](index=22&type=section&id=Contract%20Liabilities) Contract liabilities decreased by 3.2% to RMB 215.0 million as of June 30, 2025, primarily due to a reduction in payments received - As of June 30, 2025, contract liabilities amounted to **RMB 215.0 million**, a **3.2%** decrease compared to December 31, 2024, mainly due to a reduction in payments received[64](index=64&type=chunk) [Use of Proceeds from Listing](index=23&type=section&id=Use%20of%20Proceeds%20from%20Listing) The company's IPO net proceeds were RMB 751.4 million, with RMB 146.0 million utilized by June 30, 2025, primarily for market expansion and working capital - Net proceeds from the listing were approximately **RMB 751.4 million**[65](index=65&type=chunk) Use of Proceeds from Listing and Actual Utilization (As of June 30, 2025) | Use of Proceeds | Allocated Use (RMB million) | % of Total Net Proceeds | Actual Utilization as of June 30, 2025 (RMB million) | Unutilized Net Proceeds (RMB million) | | :--- | :--- | :--- | :--- | :--- | | Expanding new markets and services in the 'Greater Central China' region | 300.5 | 40.0 | 58.7 | 241.8 | | Strategic investments and acquisitions | 270.6 | 36.0 | – | 270.6 | | Strengthening information technology systems | 105.2 | 14.0 | 12.2 | 93 | | General working capital | 75.1 | 10.0 | 75.1 | – | | **Total** | **751.4** | **100.0** | **146.0** | **605.4** | [Subscription of New Shares](index=24&type=section&id=Subscription%20of%20New%20Shares) The company completed a subscription of 343.14 million shares at HK$0.80 per share, raising HK$274.1 million net proceeds, with RMB 12.4 million used for working capital - The company entered into a subscription agreement on November 18, 2022, to subscribe for a total of **343,140,000 shares** at **HK$0.80 per share**, completed on May 3, 2023[66](index=66&type=chunk) - Net proceeds from the subscription were approximately **HK$274.1 million**, aimed at raising additional funds, strengthening financial position, expanding shareholder and capital base, and growing government and capital project management businesses[67](index=67&type=chunk) Use of Proceeds from Subscription and Actual Utilization (As of June 30, 2025) | Use of Proceeds | Allocated Use (RMB million) | % of Subscription Proceeds | Actual Utilization as of June 30, 2025 (RMB million) | Unutilized Net Proceeds (RMB million) | | :--- | :--- | :--- | :--- | :--- | | Development of government project management business | 123.5 | 50.0 | – | 123.5 | | Development of capital project management business | 111.1 | 45.0 | – | 111.1 | | General working capital | 12.4 | 5.0 | 12.4 | – | | **Total** | **247.0** | **100.0** | **12.4** | **234.6** | [Financial Resources Management and Capital Structure](index=25&type=section&id=Financial%20Resources%20Management%20and%20Capital%20Structure) The Group maintains a net cash position with RMB 2,573.0 million in cash and equivalents, zero gearing ratio, minimal foreign exchange risk, and no significant contingent liabilities - As of June 30, 2025, cash and cash equivalents amounted to **RMB 2,573.0 million**, with no borrowings, maintaining a net cash position[68](index=68&type=chunk)[69](index=69&type=chunk) - As of June 30, 2025, the gearing ratio was **zero**[68](index=68&type=chunk) - The Group primarily operates in China, with the vast majority of its business conducted in RMB, incurring minimal foreign exchange risk and currently not hedging foreign exchange risk[70](index=70&type=chunk) - As of June 30, 2025, the Group had no significant contingent liabilities, capital commitments, or pledged assets[71](index=71&type=chunk)[72](index=72&type=chunk) [Significant Acquisitions and Disposals](index=26&type=section&id=Significant%20Acquisitions%20and%20Disposals) During the period, the Group did not undertake any significant acquisitions or disposals of subsidiaries, associates, or joint ventures - During the period, the Group did not have any significant acquisitions or disposals of subsidiaries, associates, or joint ventures[73](index=73&type=chunk) [Significant Investments](index=26&type=section&id=Significant%20Investments) During the period and as of June 30, 2025, the Group held no significant investments - During the period and as of June 30, 2025, the Group held no significant investments[74](index=74&type=chunk) [Employees and Remuneration Policy](index=26&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the Group had 542 full-time employees, implementing a performance-based remuneration structure and comprehensive training programs - As of June 30, 2025, the Group had **542 full-time employees**, including **354 employees** seconded to managed property development projects[75](index=75&type=chunk) - The company has established a performance-based employee remuneration structure, adjusted periodically based on development strategies and market standards to retain and attract talent[75](index=75&type=chunk) - The company provides comprehensive continuous training programs for employees, including internal and third-party training, to enhance business skills, strengthen risk management capabilities, and acquire the latest industry information[76](index=76&type=chunk) [Other Information](index=27&type=section&id=Other%20Information) This section covers various corporate governance matters, including trading suspension, compliance with codes, and post-reporting period events [Suspension of Trading](index=27&type=section&id=Suspension%20of%20Trading) The company's shares have been suspended from trading since April 2, 2024, due to delayed publication of 2023 annual results, with efforts underway to resume trading - The company's shares have been suspended from trading on the Stock Exchange since **9:00 a.m. on April 2, 2024**, due to the delayed publication of audited annual results for the year ended December 31, 2023[77](index=77&type=chunk) - The company published its annual results for the year ended December 31, 2023, and interim results for the six months ended June 30, 2024, on January 9, 2025[78](index=78&type=chunk) - The company's shares remain suspended from trading as of the date of this announcement, and the company is taking all necessary steps to meet the resumption guidance and will seek to resume trading as soon as practicable[78](index=78&type=chunk) [Corporate Governance Practices](index=27&type=section&id=Corporate%20Governance%20Practices) The Group adheres to high corporate governance standards, complying with the Corporate Governance Code, except for the Chairman's absence from the 2025 AGM - The Group is committed to achieving high standards of corporate governance and has conducted its business with reference to the principles of the Corporate Governance Code set out in Appendix C1 of the Listing Rules[79](index=79&type=chunk) - Except for Mr. Hu Baosen, the Chairman of the Board, who was unable to attend the 2025 Annual General Meeting due to pre-arranged business matters, the company has complied with all applicable code provisions of the Corporate Governance Code during the period[79](index=79&type=chunk)[80](index=80&type=chunk) [Model Code for Securities Transactions by Directors of Listed Issuers](index=28&type=section&id=Model%20Code%20for%20Securities%20Transactions%20by%20Directors%20of%20Listed%20Issuers) The company adopted the Model Code for Securities Transactions by Directors, and all directors have complied with its required standards during the period - The company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers, as set out in Appendix C3 of the Listing Rules, as its code of conduct for directors' dealings in the company's securities[81](index=81&type=chunk) - All directors have complied with the required standards set out in the Model Code during the period[81](index=81&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=28&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) During the period, neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed securities - During the period, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities[82](index=82&type=chunk) [Events After the Reporting Period](index=28&type=section&id=Events%20After%20the%20Reporting%20Period) No significant events affecting the Group occurred after June 30, 2025, up to the date of this announcement - No significant events affecting the Group occurred after June 30, 2025, and up to the date of this announcement[83](index=83&type=chunk) [Review of Interim Results by Audit Committee](index=28&type=section&id=Review%20of%20Interim%20Results%20by%20Audit%20Committee) The Audit Committee, comprising three independent non-executive directors, has reviewed the Group's unaudited condensed consolidated financial statements for the period - The Audit Committee has reviewed the Group's unaudited condensed consolidated financial statements for the period[84](index=84&type=chunk) - The Audit Committee comprises three independent non-executive directors: Mr. Liu Dianchen (Chairman), Mr. Xu Ying, and Ms. Yan Yingchun[84](index=84&type=chunk) [Interim Dividend](index=29&type=section&id=Interim%20Dividend_Other%20Information) The Board resolved not to declare any dividend for the six months ended June 30, 2025, consistent with the prior year - The Board resolved not to declare any dividend for the six months ended June 30, 2025 (June 30, 2024: None)[85](index=85&type=chunk) [Publication of Interim Results Announcement and Interim Report](index=29&type=section&id=Publication%20of%20Interim%20Results%20Announcement%20and%20Interim%20Report) This announcement is published on the HKEX and company websites, and the interim report for the six months ended June 30, 2025, will be dispatched to shareholders - This announcement is published on the website of The Stock Exchange of Hong Kong Limited (www.hkexnews.hk) and the company's website (www.centralchinamgt.com)[86](index=86&type=chunk) - The interim report for the six months ended June 30, 2025, will be dispatched to the company's shareholders in due course and published on the Stock Exchange and the company's website[86](index=86&type=chunk) [Continued Suspension of Trading](index=29&type=section&id=Continued%20Suspension%20of%20Trading) The company's shares remain suspended from trading on the Stock Exchange since April 2, 2024, and will continue to be suspended until further notice - The company's shares have been suspended from trading on the Stock Exchange since **9:00 a.m. on April 2, 2024**, and will continue to be suspended until further notice[87](index=87&type=chunk)

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。 SUNAC SERVICES HOLDINGS LIMITED 融創服務控股有限公司 （於開曼群島註冊成立的有限公司） （股份代號：01516） 截至2025年6月30日止六個月中期業績公告及 變更全球發售所得款項淨額用途 業績摘要 截至2025年6月30日止六個月： – 1 – • 本集團的收入約為人民幣35.47億元，同比增長約2%； • 本集團的毛利約為人民幣7.72億元，同比下降約13%，主要由於本集團暫緩 確認已完成履約義務但回款存在高風險的若干第三方客戶的收入，以及近年 交付項目質保到期而帶來的維修維護成本增加所致； • 本集團的銷售及管理費用約為人民幣2.79億元，同比下降約13%。銷售及管 理費率約為7.9%，同比下降約1.3個百分點；及 • 本公司擁有人應佔利潤約為人民幣1.22億元，去年同期本公司擁有人應佔虧 損約為人民幣4.72億元。 融創服務控股有限公司（「本公司」）董事（「董事 ...

[Financial Statements](index=1&type=section&id=%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8) [Condensed Consolidated Statement of Profit or Loss](index=1&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%90%8D%E7%9B%8A%E8%A1%A8) The company experienced a significant year-on-year decline in revenue, gross profit, profit before tax, and profit attributable to owners Key Financial Data from Condensed Consolidated Statement of Profit or Loss | Metric | 2025 H1 (HKD Thousands) | 2024 H1 (HKD Thousands) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Revenue | 205,410 | 323,471 | -36% | | Gross Profit and Net Interest Income | 79,519 | 118,953 | -33% | | Profit Before Tax | 21,995 | 52,157 | -58% | | Profit Attributable to Owners of the Company | 9,881 | 26,694 | -63% | | Basic and Diluted Earnings Per Share | 0.17 HK Cents | 0.45 HK Cents | -62% | [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) The company's total comprehensive income shifted from a loss to a profit year-on-year, driven by a significant increase in net exchange differences from foreign currency translation Key Data from Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income | Metric | 2025 H1 (HKD Thousands) | 2024 H1 (HKD Thousands) | | :--- | :--- | :--- | | Profit for the Period | 10,011 | 26,855 | | Fair Value Change of Equity Investments at Fair Value Through Other Comprehensive Income | 20,828 | (7,848) | | Net Exchange Differences Arising from Translation of Foreign Operations | 82,014 | (80,959) | | Total Comprehensive Income for the Period | 112,853 | (61,952) | [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) Total assets and liabilities increased, with a substantial rise in net current assets and non-current liabilities, indicating asset expansion and a shift in liability structure Key Data from Condensed Consolidated Statement of Financial Position | Metric | June 30, 2025 (HKD Thousands) | December 31, 2024 (HKD Thousands) | Change Rate | | :--- | :--- | :--- | :--- | | Non-current Assets | 3,788,406 | 3,861,767 | -2% | | Current Assets | 5,342,700 | 4,515,607 | +18% | | **Total Assets** | **9,131,106** | **8,377,374** | **+9%** | | Current Liabilities | (3,107,392) | (3,515,666) | -12% | | Non-current Liabilities | (3,153,280) | (2,092,198) | +51% | | **Total Liabilities** | **(6,260,672)** | **(5,607,864)** | **+12%** | | Net Current Assets | 2,235,308 | 999,941 | +124% | | Equity Attributable to Owners of the Company | 2,865,129 | 2,764,335 | +4% | [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) [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 are prepared in accordance with HKAS 34 and HKEX Listing Rules, extracted from the 2024 annual report with an unqualified opinion - The statements are prepared in accordance with Hong Kong Accounting Standard 34 'Interim Financial Reporting' and the HKEX Listing Rules[9](index=9&type=chunk) - The 2024 statutory annual report has been delivered to the Registrar of Companies, and the auditor's report was unqualified[9](index=9&type=chunk) [Accounting Policies](index=6&type=section&id=2%20%E6%9C%83%E8%A8%88%E6%94%BF%E7%AD%96) The condensed consolidated financial statements are prepared on a historical cost basis, with accounting policies consistent with the 2024 annual report, and new HKFRS amendments have no material impact - The statements are prepared on a historical cost basis, except for certain properties and financial instruments measured at fair value[10](index=10&type=chunk) - Accounting policies are consistent with those presented in the Group's annual financial statements for the year ended December 31, 2024, except for changes due to the application of amendments to HKFRS[10](index=10&type=chunk) - New amendments to HKFRS have no material impact on the Group's financial position and performance during the current and prior periods[11](index=11&type=chunk) [Revenue](index=7&type=section&id=3%20%E7%87%9F%E6%A5%AD%E9%A1%8D) Total revenue significantly decreased by 36% year-on-year, primarily due to reduced property sales and leasing income, with property sales experiencing the largest decline Revenue Breakdown by Account | Business Type | 2025 H1 (HKD Thousands) | 2024 H1 (HKD Thousands) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Property Sales | 9,439 | 58,373 | -84% | | Consulting Service Income from Lease Arrangements | 7,621 | – | Not Applicable | | Marine Tourism and Hotel Services Income | 16,520 | 18,227 | -9% | | Revenue from Customer Contracts | 33,580 | 76,600 | -56% | | Rental Income from Investment Properties | 933 | 1,362 | -31% | | Rental Income from Operating Leases of Own Machinery and Equipment | 43,720 | 54,942 | -20% | | Interest Income from Loans Receivable | 127,081 | 189,789 | -33% | | Finance Lease Income | 96 | 778 | -88% | | **Total Revenue** | **205,410** | **323,471** | **-36%** | [Segment Information](index=9&type=section&id=4%20%E5%88%86%E9%A1%9E%E8%B3%87%E6%96%99) Leasing remains the primary revenue source but saw significant declines in revenue and performance, property development and investment also performed poorly, while marine tourism and hotel services revenue slightly decreased but gross profit increased Revenue and Performance Analysis by Reportable Segment | Business Segment | 2025 H1 Revenue (HKD Thousands) | 2024 H1 Revenue (HKD Thousands) | Revenue Y-o-Y Change | 2025 H1 Segment Results (HKD Thousands) | 2024 H1 Segment Results (HKD Thousands) | Results Y-o-Y Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Leasing | 178,518 | 245,509 | -27% | 46,154 | 73,878 | -38% | | Property Development and Investment | 10,372 | 59,735 | -83% | (2,695) | 14,232 | -119% | | Marine Tourism Services and Hotel | 16,520 | 18,227 | -9% | (2,251) | (1,950) | +15% | | **Total** | **205,410** | **323,471** | **-36%** | **21,995 (Profit Before Tax)** | **52,157 (Profit Before Tax)** | **-58%** | - Unallocated corporate income primarily includes interest income from deposits and related parties, not directly attributable to any operating segment[18](index=18&type=chunk) - Unallocated corporate expenses mainly include depreciation, head office staff costs, exchange differences, and legal and professional fees, not directly attributable to any operating segment[19](index=19&type=chunk) [Other Income and Gains, Net](index=10&type=section&id=5%20%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5%E5%8F%8A%E6%94%B6%E7%9B%8A%E6%B7%A8%E9%A1%8D) Other income and gains, net, decreased by 36% year-on-year, mainly due to lower interest income from deposits and other financial assets, despite an increase in gains from disposal of investment properties Details of Other Income and Gains, Net | Item | 2025 H1 (HKD Thousands) | 2024 H1 (HKD Thousands) | | :--- | :--- | :--- | | Interest Income from Deposits and Other Financial Assets | 4,829 | 9,521 | | Interest Income from Related Parties | 1,015 | 1,116 | | Government Grants | 196 | 74 | | Gain on Disposal of Investment Properties | 140 | – | | Gain on Disposal of Property, Plant and Equipment | 116 | 26 | | Others | 787 | 278 | | **Total** | **7,083** | **11,015** | [Finance Costs](index=11&type=section&id=6%20%E8%9E%8D%E8%B3%87%E6%88%90%E6%9C%AC) Total finance costs decreased by 37% year-on-year, primarily due to reduced interest on bank borrowings and asset-backed securities, while corporate bond interest began to accrue Details of Finance Costs | Item | 2025 H1 (HKD Thousands) | 2024 H1 (HKD Thousands) | | :--- | :--- | :--- | | Interest on Bank Borrowings | 40,003 | 69,345 | | Interest on Asset-Backed Securities | 24,628 | 42,397 | | Interest on Corporate Bonds | 5,612 | – | | Interest on Loans from Related Parties | 3,108 | 4,048 | | Interest on Lease Liabilities | 78 | 166 | | **Total Finance Costs** | **73,429** | **115,956** | | Less: Amount Capitalized into Cost of Sales | (66,341) | (100,605) | | **Net Finance Costs** | **7,088** | **15,351** | [Income Tax Expense](index=11&type=section&id=7%20%E6%89%80%E5%BE%97%E7%A8%85%E9%96%8B%E6%94%AF) Income tax expense decreased by 53% year-on-year, mainly due to lower China corporate income tax and land appreciation tax, with deferred tax shifting from expense to income Details of Income Tax Expense | Item | 2025 H1 (HKD Thousands) | 2024 H1 (HKD Thousands) | | :--- | :--- | :--- | | China Corporate Income Tax | 16,122 | 24,232 | | China Land Appreciation Tax | 893 | 3,099 | | **Total Current Tax** | **17,015** | **27,331** | | Deferred Tax | (5,031) | (2,029) | | **Total Income Tax Expense** | **11,984** | **25,302** | [Profit for the Period](index=12&type=section&id=8%20%E6%9C%9F%E5%85%A7%E6%BA%A2%E5%88%A9) Profit for the period was net of staff costs, impairment losses on expected credit losses, depreciation, and net exchange losses, with depreciation and expected credit loss impairment increasing Items Deducted from Profit for the Period | Item | 2025 H1 (HKD Thousands) | 2024 H1 (HKD Thousands) | | :--- | :--- | :--- | | Total Staff Costs | 27,967 | 29,241 | | Impairment Losses on Expected Credit Losses | 4,735 | 2,211 | | Depreciation of Property, Plant and Equipment | 68,433 | 52,006 | | Cost of Inventories Sold (included in cost of sales) | 13,042 | 50,717 | | Net Exchange Losses | 5,255 | 6,105 | [Dividends](index=12&type=section&id=9%20%E8%82%A1%E6%81%AF) The company declared a final dividend of 0.20 HK cents per share for 2024, totaling HKD 11.929 million, but the board resolved not to declare any interim dividend for the current period - A final dividend of **0.20 HK cents per share** for the year ended December 31, 2024 (2024: 0.34 HK cents per share for the year ended December 31, 2023) was declared to the owners of the Company[24](index=24&type=chunk) - The total final dividend declared for the interim period was **HKD 11,929,000** (2024: approximately HKD 20,280,000)[24](index=24&type=chunk) - As of the end of the interim period, the directors resolved not to declare any dividend for the current interim period[25](index=25&type=chunk) [Earnings Per Share](index=13&type=section&id=10%20%E6%AF%8F%E8%82%A1%E7%9B%88%E5%88%A9) Basic and diluted earnings per share for the period were 0.17 HK cents, a significant decrease year-on-year, with no dilutive equity instruments, thus diluted EPS equals basic EPS Earnings Per Share Data | Metric | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | | Profit Attributable to Owners of the Company (HKD Thousands) | 9,881 | 26,694 | | Weighted Average Number of Ordinary Shares (Thousands) | 5,952,885 | 5,952,885 | | Basic and Diluted Earnings Per Share | 0.17 HK Cents | 0.45 HK Cents | - As there are no dilutive potential equity instruments, diluted earnings per share are the same as basic earnings per share[26](index=26&type=chunk) [Finance Lease Receivables and Loans Receivable](index=13&type=section&id=11%20%E8%9E%8D%E8%B3%87%E7%A7%9F%E8%B3%83%E6%87%89%E6%94%B6%E6%AC%BE%E9%A0%85%E5%8F%8A%E6%87%89%E6%94%B6%E8%B2%B8%E6%AC%BE) Net finance lease receivables and loans receivable slightly increased, with a corresponding rise in credit loss provisions; most receivables are from state-owned enterprises, and some are pledged as collateral Key Data for Finance Lease Receivables and Loans Receivable | Metric | June 30, 2025 (HKD Thousands) | December 31, 2024 (HKD Thousands) | | :--- | :--- | :--- | | Gross Finance Lease Receivables and Loans Receivable | 6,672,707 | 6,631,636 | | Less: Provision for Credit Losses | (69,399) | (62,795) | | **Net Amount** | **6,603,308** | **6,568,841** | | Current Assets | 3,352,240 | 3,255,832 | | Non-current Assets | 3,251,068 | 3,313,009 | - Provision for credit losses increased by **11%** to approximately **HKD 69,399,000**[28](index=28&type=chunk)[30](index=30&type=chunk)[57](index=57&type=chunk) - Effective annual interest rates for fixed-rate loans receivable ranged from **3.42% to 9.40%**, and for floating-rate loans receivable from **3.04% to 7.84%**[31](index=31&type=chunk) - Approximately **99%** of net lease receivables are from state-owned enterprises[54](index=54&type=chunk) - Approximately **HKD 3.064 billion** of finance lease receivables and loans receivable are pledged as collateral for bank borrowings, and approximately **HKD 1.390 billion** are pledged as collateral for asset-backed securities[32](index=32&type=chunk)[86](index=86&type=chunk)[87](index=87&type=chunk) [Trade and Other Receivables](index=17&type=section&id=12%20%E8%B2%BF%E6%98%93%E5%8F%8A%E5%85%B6%E4%BB%96%E6%87%89%E6%94%B6%E6%AC%BE%E9%A0%85) Total trade and other receivables slightly decreased, with most trade receivables aged within 30 days, and some pledged as collateral for bank borrowings and asset-backed securities Details of Trade and Other Receivables | Item | June 30, 2025 (HKD Thousands) | December 31, 2024 (HKD Thousands) | | :--- | :--- | :--- | | Trade Receivables and Bills Receivable | 2,543 | 2,760 | | Other Prepayments and Deposits | 4,989 | 3,596 | | Other Receivables | 16,941 | 14,149 | | Other Recoverable Taxes | – | 7,952 | | Amounts Due from a Related Company | 2,458 | 1,319 | | Amounts Due from Fellow Subsidiaries | 494 | – | | **Total** | **27,425** | **29,776** | Ageing Analysis of Trade Receivables and Bills Receivable | Ageing | June 30, 2025 (HKD Thousands) | December 31, 2024 (HKD Thousands) | | :--- | :--- | :--- | | 1 to 30 days | 1,471 | 2,351 | | 31 to 90 days | 1,046 | 177 | | Over 90 days | 26 | 232 | | **Total** | **2,543** | **2,760** | - Approximately **HKD 191,000** of trade receivables are pledged as collateral for bank borrowings, and approximately **HKD 1,260,000** are pledged as collateral for asset-backed securities[33](index=33&type=chunk)[86](index=86&type=chunk)[87](index=87&type=chunk) [Trade and Other Payables](index=18&type=section&id=13%20%E8%B2%BF%E6%98%93%E5%8F%8A%E5%85%B6%E4%BB%96%E6%87%89%E4%BB%98%E6%AC%BE%E9%A0%85) Total trade and other payables significantly decreased, mainly due to reduced trade payables and deposits received, with some deposits classified as non-current liabilities Details of Trade and Other Payables | Item | June 30, 2025 (HKD Thousands) | December 31, 2024 (HKD Thousands) | | :--- | :--- | :--- | | Trade Payables and Bills Payable | 6,868 | 112,448 | | Other Payables and Accruals | 83,030 | 73,721 | | Deposits Received | 242,993 | 308,003 | | Accrued Construction Costs | 6,966 | 11,554 | | Amounts Due to Ultimate Holding Company | 2,071 | 8,074 | | Amounts Due to Immediate Holding Company | 11 | 1,691 | | Amounts Due to Fellow Subsidiaries | 1,914 | 197 | | **Total** | **343,853** | **515,688** | | Current Liabilities | 198,147 | 300,704 | | Non-current Liabilities | 145,706 | 214,984 | Ageing Analysis of Trade Payables and Bills Payable | Ageing | June 30, 2025 (HKD Thousands) | December 31, 2024 (HKD Thousands) | | :--- | :--- | :--- | | 1 to 30 days | 172 | 106,095 | | 31 to 90 days | 6,352 | 6,695 | | Over 90 days | 1 | 1 | | **Total** | **6,868** | **112,448** | - Approximately **HKD 145,706,000** of deposits received are presented as non-current liabilities[34](index=34&type=chunk) [Corporate Bonds](index=19&type=section&id=14%20%E5%85%AC%E5%8F%B8%E5%82%B5%E5%88%B8) The company issued two tranches of corporate bonds totaling RMB 1 billion (approx. HKD 1.07 billion) with effective annual interest rates of 2.17% to 2.18%, a five-year term, and early redemption, put option, and coupon rate adjustment features - Two tranches of corporate bonds were issued at par during the interim period, each with a principal amount of **RMB 500,000,000** (equivalent to **HKD 535,000,000**)[35](index=35&type=chunk) - The corporate bonds have an effective annual interest rate ranging from **2.17% to 2.18%**, a five-year term, with interest paid annually[35](index=35&type=chunk)[36](index=36&type=chunk) - The corporate bonds include early redemption options, put options, and coupon rate adjustment options[36](index=36&type=chunk)[37](index=37&type=chunk)[38](index=38&type=chunk) [Capital Commitments](index=19&type=section&id=15%20%E8%B3%87%E6%9C%AC%E6%89%BF%E6%93%94) As of the reporting period, the company had no contracted but unprovided capital commitments, unlike the prior year which had minor commitments for property, plant, and equipment purchases Capital Commitments | Item | June 30, 2025 (HKD Thousands) | December 31, 2024 (HKD Thousands) | | :--- | :--- | :--- | | Contracted but not provided for: Purchase of property, plant and equipment | – | 135 | - The Group had no capital commitments as of **June 30, 2025**[88](index=88&type=chunk) [Contingent Liabilities](index=19&type=section&id=16%20%E6%88%96%E7%84%B6%E8%B2%A0%E5%82%B5) The company provided contingent liability guarantees of approximately HKD 236 million for mortgage loans to property buyers of the Chengtong Xiangxie Li project, with directors deeming the financial impact insignificant and no major litigation - The Group's contingent liabilities for guarantees amounted to approximately **HKD 236,040,000** (December 31, 2024: approximately HKD 230,470,000), provided for mortgage loans granted by banks to certain property unit buyers of the Group's Chengtong Xiangxie Li project[39](index=39&type=chunk) - The directors of the Company believe that the financial impact arising from providing these financial guarantees is insignificant and thus not recognized in these condensed consolidated financial statements[40](index=40&type=chunk) - The Group is not involved in any material litigation or arbitration, nor are the directors aware of any outstanding or threatened material litigation or claims against the Group[40](index=40&type=chunk) [Management Discussion and Analysis](index=20&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%A4%E8%A8%8E%E8%AB%96%E8%88%87%E5%88%86%E6%9E%90) [Financial Performance Review](index=20&type=section&id=%E4%B8%80.%20%E8%B2%A1%E5%8B%99%E6%A5%AD%E7%B8%BE%E5%9B%9E%E9%A1%A7) Overall financial performance significantly declined, with substantial reductions in revenue, gross profit, and profit attributable to shareholders, influenced by global economic slowdown, geopolitical shifts, and China's lower interest rates and tight supply of quality assets Key Financial Performance Review Data | Metric | 2025 H1 (HKD Thousands) | 2024 H1 (HKD Thousands) | Change Rate | | :--- | :--- | :--- | :--- | | Consolidated Revenue | 205,410 | 323,471 | -36% | | Consolidated Gross Profit and Net Interest Income | 79,519 | 118,953 | -33% | | Profit Before Tax | 21,995 | 52,157 | -58% | | Profit Attributable to Shareholders | 9,881 | 26,694 | -63% | - Financial performance was primarily affected by slow global economic recovery, ongoing geopolitical and economic shifts, and China's declining interest rates and scarcity of quality assets[42](index=42&type=chunk) - Consolidated cost of sales decreased by **38%** to approximately **HKD 125.89 million**, consistent with the reduced business volume in the leasing segment during the review period[43](index=43&type=chunk) - Net impairment loss under the expected credit loss model was approximately **HKD 4.74 million**, an increase of **114%** compared to 2024 H1[44](index=44&type=chunk) - Fair value loss on investment properties was approximately **HKD 75,000**, a significant reduction from approximately HKD 7.78 million in 2024 H1[45](index=45&type=chunk) [Business Review](index=22&type=section&id=%E4%BA%8C.%20%E6%A5%AD%E5%8B%99%E5%9B%9E%E9%A1%A7) The company's main businesses include leasing, property development and investment, and marine tourism and hotel services; leasing faces challenges but is expanding, property development is impacted by market downturns, and marine tourism and hotel services show improved gross margins [Segment Performance](index=22&type=section&id=A.%20%E5%88%86%E9%A1%9E%E8%A1%A8%E7%8F%BE) Segment performance varied, with significant declines in revenue and results for leasing and property development and investment, while marine tourism and hotel services saw slightly lower revenue but substantially improved gross margins [Leasing Business](index=22&type=section&id=%281%29%20%E7%A7%9F%E8%B3%83) Leasing business revenue and segment results significantly decreased due to reduced new placements and lower lease receivables balances; the company is actively expanding into new areas like aircraft leasing and strengthening risk control and financing channels Leasing Business Segment Performance | Metric | 2025 H1 (HKD Thousands) | 2024 H1 (HKD Thousands) | Change Rate | | :--- | :--- | :--- | :--- | | Interest Income | 127,177 | 190,567 | -33% | | Consulting Service Fees | 7,621 | – | Not Applicable | | Rental Income | 43,720 | 54,942 | -20% | | Segment Revenue | 178,518 | 245,509 | -27% | | Cost of Sales | (112,852) | (153,802) | -27% | | Gross Profit and Net Interest Income | 65,666 | 91,707 | -28% | | Gross Profit Margin | 37% | 37% | 0% | | Segment Results | 46,154 | 73,878 | -38% | - **14 new sale-and-leaseback arrangements** were entered into, with a total lease principal of approximately **HKD 1.90924 billion**, lease terms of **1 to 5 years**, and floating annual interest rates ranging from **2.85% to 3.9%**[48](index=48&type=chunk) - Successfully launched its first aircraft leasing business, further diversifying the Group's lease asset types[69](index=69&type=chunk) - Net lease receivables were approximately **HKD 6.60331 billion**, a slight increase from December 31, 2024, accounting for **72%** of total assets[53](index=53&type=chunk) - Approximately **99%** of net lease receivables are from state-owned enterprises, indicating relatively low default risk[54](index=54&type=chunk)[58](index=58&type=chunk) - Total provision for expected credit losses increased by **11%** compared to December 31, 2024[57](index=57&type=chunk) [Property Development and Investment](index=25&type=section&id=%282%29%20%E7%89%A9%E6%A5%AD%E7%99%BC%E5%B1%95%E5%8F%8A%E6%8A%95%E8%B3%87) Property development and investment revenue and gross profit significantly declined due to continuous market price adjustments and fewer housing deliveries; the company aims to complete project sales as soon as possible Property Development and Investment Segment Performance | Metric | 2025 H1 (HKD Thousands) | 2024 H1 (HKD Thousands) | Change Rate | | :--- | :--- | :--- | :--- | | Property Sales | 9,439 | 58,373 | -84% | | Rental Income | 933 | 1,362 | -31% | | Segment Revenue | 10,372 | 59,735 | -83% | | Cost of Sales | (6,711) | (40,561) | -83% | | Gross Profit | 3,661 | 19,174 | -81% | | Gross Profit Margin | 32% | 35% | -3% | | Segment Results | (2,695) | 14,232 | -119% | - Sales revenue significantly decreased by **84%**, mainly due to continuous downward market price adjustments, weak willingness of homeowners to take possession, and a year-on-year reduction in actual housing deliveries[60](index=60&type=chunk) - The average selling price per square meter of residential area for the Chengtong Xiangxie Li project decreased to approximately **RMB 4,800**[60](index=60&type=chunk) - Completed and unsold residential and commercial area was approximately **37,286 square meters**[60](index=60&type=chunk) [Marine Tourism Services and Hotel](index=26&type=section&id=%283%29%20%E6%B5%B7%E4%B8%8A%E6%97%85%E9%81%8A%E6%9C%8D%E5%8B%99%E5%92%8C%E9%85%92%E5%BA%97) Marine tourism services and hotel business revenue slightly decreased, but gross profit significantly increased, primarily due to a higher proportion of hotel sales revenue and reduced cost of sales Marine Tourism Services and Hotel Segment Performance | Metric | 2025 H1 (HKD Thousands) | 2024 H1 (HKD Thousands) | Change Rate | | :--- | :--- | :--- | :--- | | Segment Revenue | 16,520 | 18,227 | -9% | | Cost of Sales | (6,331) | (10,156) | -38% | | Gross Profit | 10,189 | 8,071 | +26% | | Gross Profit Margin | 62% | 44% | +18% | | Segment Results | (2,251) | (1,950) | +15% | - Sales revenue from the hotel business accounted for nearly **80%** of this segment's revenue[62](index=62&type=chunk) [Other Income and Gains](index=27&type=section&id=B.%20%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5%E5%8F%8A%E6%94%B6%E7%9B%8A) Total other income and gains decreased by 36% year-on-year, mainly due to lower interest income from deposits, other financial assets, and related party loans - Total other income and gains were approximately **HKD 7.08 million**, a **36%** decrease compared to 2024 H1[63](index=63&type=chunk) - Interest income from deposits and other financial assets, and loans granted to a related party, was approximately **HKD 5.84 million**, a decrease from approximately HKD 10.64 million in 2024 H1[63](index=63&type=chunk) [Selling and Administrative Expenses](index=27&type=section&id=C.%20%E9%8A%B7%E5%94%AE%E5%8F%8A%E8%A1%8C%E6%94%BF%E8%B2%BB%E7%94%A8) Selling expenses significantly increased by 70% due to increased marketing activities, while administrative expenses decreased by 8% due to reduced office expenses, amortization, and depreciation Selling and Administrative Expenses | Item | 2025 H1 (HKD Thousands) | 2024 H1 (HKD Thousands) | Change Rate | | :--- | :--- | :--- | :--- | | Selling Expenses | 9,560 | 5,608 | +70% | | Administrative Expenses | 43,149 | 46,865 | -8% | - The increase in selling expenses was primarily due to increased marketing costs for promoting the Group's Chengtong Xiangxie Li project sales[64](index=64&type=chunk) - The decrease in administrative expenses was mainly due to reduced office expenses, amortization, and depreciation across various business segments[65](index=65&type=chunk) [Finance Costs](index=27&type=section&id=D.%20%E8%9E%8D%E8%B3%87%E6%88%90%E6%9C%AC) Total finance costs decreased by 37% year-on-year, and net finance costs decreased by 54%, primarily due to reduced asset-backed securities maturities, bank loan repayments, and lower Hong Kong interest rates Finance Costs | Item | 2025 H1 (HKD Thousands) | 2024 H1 (HKD Thousands) | Change Rate | | :--- | :--- | :--- | :--- | | Total Interest Expense | 73,429 | 115,956 | -37% | | Less: Interest Expense Transferred to Cost of Sales | (66,341) | (100,605) | -34% | | **Net Finance Costs** | **7,088** | **15,351** | **-54%** | - The decrease in total finance costs was mainly due to the reduction in asset-backed securities after maturity and repayment of bank borrowings[67](index=67&type=chunk) - Net finance costs decreased by approximately **54%**, primarily due to lower interest rates in Hong Kong during the review period[67](index=67&type=chunk) [Outlook](index=28&type=section&id=%E4%B8%89.%20%E5%89%8D%E6%99%AF%E5%B1%95%E6%9C%9B) The company's leasing business will focus on national priority areas, accelerate specialization, diversify financing, and strengthen risk control; property development and investment will expedite existing property sales; marine tourism and hotel services will restructure customer channels, enhance customer management, and boost online traffic - Breakthroughs were achieved in new leasing projects, with multiple successful implementations, including the first Airbus A321-200 aircraft lease order, diversifying the Group's lease asset types[69](index=69&type=chunk) - Chengtong Financial Leasing was rated as a 'Beijing AAA Credit Enterprise' and '2025 Beijing Credit Commitment Enterprise' by the Beijing Leasing Industry Association[69](index=69&type=chunk) - Successfully issued two tranches of corporate bonds, totaling **RMB 1 billion**, with coupon rates setting a historical low for AA+ leasing companies' bonds of the same tenor[70](index=70&type=chunk) - In the second half, the leasing business will maintain strategic focus on business layout, increase investment in nationally supported sectors, and accelerate the pace of business specialization[71](index=71&type=chunk) - The property development and investment business will closely monitor industry policies, accelerate the sale of existing property units, and recover funds for the core leasing business[72](index=72&type=chunk) - In the second half, the marine tourism services and hotel business will focus on restructuring customer source channels, strengthening customer lifecycle management, and leveraging platforms to enhance online traffic[73](index=73&type=chunk) [Asset Structure, Capital Liquidity and Financial Resources](index=30&type=section&id=%E5%9B%9B.%20%E8%B3%87%E7%94%A2%E7%B5%90%E6%A7%8B%E3%80%81%E8%B3%87%E6%9C%AC%E6%B5%81%E5%8B%95%E6%80%A7%E5%8F%8A%E8%B2%A1%E6%94%BF%E8%B3%87%E6%BA%90) Total assets and liabilities increased, with lease receivables remaining the largest component; liquidity improved, ample credit facilities are available, and total borrowings, primarily RMB-denominated, also increased Asset Structure and Liability Status | Metric | June 30, 2025 (HKD Thousands) | December 31, 2024 (HKD Thousands) | Change Rate | | :--- | :--- | :--- | :--- | | Equity Attributable to Owners of the Company | 2,865,130 | 2,764,340 | +4% | | Total Assets | 9,131,106 | 8,377,374 | +9% | | Total Liabilities | 6,260,672 | 5,607,864 | +12% | | Lease Receivables as % of Total Assets | 72% | 78% | -6% | | Current Ratio | 1.72 times | 1.28 times | +34% | | Cash and Deposits | 1,775,330 | 1,033,794 | +72% | | Total Borrowings | 5,698,770 | 4,904,290 | +16% | - Possesses over **HKD 13.6 billion** in ample standby credit facilities, ensuring the Group's stable business development while maintaining liquidity[75](index=75&type=chunk) - Total borrowings are primarily denominated in RMB, including bank loans, senior asset-backed securities, outstanding corporate bonds, and related party loans[77](index=77&type=chunk) [Financial Leverage Ratios](index=31&type=section&id=%E4%BA%94.%20%E8%B2%A1%E5%8B%99%E5%8B%9D%E6%A1%BF%E6%AF%94%E7%8E%87) Total debt-to-equity and total debt-to-asset ratios increased due to higher bank borrowings, but the interest coverage ratio remained at 4 times, indicating sufficient funds for interest payment obligations Financial Leverage Ratios | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Debt / Total Equity | 1.99 times | 1.77 times | | Total Debt / Total Assets | 0.62 times | 0.59 times | | Total Debt / EBITDA | 58 times | 23 times | | Interest Coverage | 4 times | 4 times | - The interest coverage ratio of **4 times** indicates the Group has sufficient buffer funds to ensure fulfillment of its interest payment obligations[79](index=79&type=chunk) [Material Investments](index=32&type=section&id=%E5%85%AD.%20%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B3%87) As of the reporting period, the company had no material investments exceeding 5% of total assets and will continue to focus on core leasing business while prudently investing in other financial assets - The Group has no material investments exceeding **5%** of its total asset value[80](index=80&type=chunk) - The Group will continue to focus on and invest in its core leasing business, while prudently investing in other financial assets to maximize shareholder value[80](index=80&type=chunk) [Financial Policies](index=32&type=section&id=%E4%B8%83.%20%E7%90%86%E8%B2%A1%E6%94%BF%E7%AD%96) The company faces interest rate and foreign exchange risks; most lease receivables use floating rates, effectively hedging interest rate risk from China bank borrowings; RMB appreciation against HKD increased foreign exchange reserves; no hedging measures are currently in place, but risks are monitored for timely management [Interest Rate Risk](index=32&type=section&id=%28a%29%20%E5%88%A9%E7%8E%87%E9%A2%A8%E9%9A%AA) The company faces interest rate risk, but most lease receivables are at floating rates, effectively hedging interest rate risk arising from China bank borrowings - The Group's bank borrowings amounted to approximately **HKD 3.08647 billion**, of which approximately **HKD 1.81207 billion** are floating-rate and approximately **HKD 1.27440 billion** are fixed-rate[82](index=82&type=chunk) - Most of the Group's lease receivables are accounted for at floating interest rates, effectively hedging the interest rate risk arising from China bank borrowings[83](index=83&type=chunk) [Foreign Exchange Risk](index=32&type=section&id=%28b%29%20%E5%A4%96%E5%8C%AF%E9%A2%A8%E9%9A%AA) The company's primary business is in RMB, with assets and liabilities denominated in HKD and RMB; RMB appreciation against HKD increased foreign exchange reserves; no hedging measures are currently in place, but currency fluctuations are monitored for timely risk management - The Group's business is primarily conducted in RMB, with most assets and liabilities denominated in HKD and RMB[84](index=84&type=chunk) - Due to the appreciation of RMB against HKD during the review period, the Group's foreign exchange reserves increased by approximately **HKD 81.42 million** as of **June 30, 2025**[84](index=84&type=chunk) - Currently, the Group has not adopted any measures to hedge these risks but will closely monitor changes in interest rates and foreign currency exchange rates, and implement risk management and hedging transactions as appropriate[85](index=85&type=chunk) [Pledge of Assets](index=33&type=section&id=%E5%85%AB.%20%E8%B3%87%E7%94%A2%E6%8A%B5%E6%8A%BC) As of the reporting period, the company had pledged bank deposits, lease receivables, and trade receivables as collateral for bank borrowings and asset-backed securities - Pledged bank deposits amounted to approximately **HKD 2.71 million**, of which **HKD 2.54 million** was pledged for bank financing granted to mortgagees of the Chengtong Xiangxie Li project[86](index=86&type=chunk) - Lease receivables with a carrying amount of approximately **HKD 3.06435 billion** and trade receivables of approximately **HKD 191,000** are pledged as collateral for bank borrowings[86](index=86&type=chunk) - Lease receivables with a carrying amount of approximately **HKD 1.39021 billion** and trade receivables of approximately **HKD 1.26 million** are pledged as collateral for asset-backed securities[87](index=87&type=chunk) [Capital Commitments and Contingent Liabilities](index=33&type=section&id=%E4%B9%9D.%20%E8%B3%87%E6%9C%AC%E6%89%BF%E6%93%94%E5%8F%8A%E6%88%96%E6%9C%89%E8%B2%A0%E5%82%B5) As of the reporting period, the company had no capital commitments; details of contingent liabilities are provided in Notes 18 and 19 to the financial statements - The Group had no capital commitments as of **June 30, 2025**[88](index=88&type=chunk) - Details of the Group's capital commitments and contingent liabilities are provided in Notes 18 and 19 to the financial statements in this announcement, respectively[88](index=88&type=chunk) [Future Plans for Material Investments or Capital Assets](index=33&type=section&id=%E5%8D%81.%20%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B3%87%E6%88%96%E8%B3%87%E6%9C%AC%E8%B3%87%E7%94%A2%E4%B9%8B%E6%9C%AA%E4%BE%86%E8%A8%88%E5%8A%83) Except as disclosed in this announcement, the company has no other future plans for material investments or capital assets for the coming year - Except as disclosed in this announcement, the Group has no other future plans for material investments or capital assets for the coming year[89](index=89&type=chunk) [Human Resources and Remuneration Policies](index=34&type=section&id=%E5%8D%81%E4%B8%80.%20%E4%BA%BA%E5%8A%9B%E8%B3%87%E6%BA%90%E5%8F%8A%E8%96%AA%E9%85%AC%E6%94%BF%E7%AD%96) As of the reporting period, the company had 202 employees with total staff costs of approximately HKD 28 million; remuneration policies are based on experience, skills, qualifications, responsibilities, and market trends, with training provided - As of **June 30, 2025**, the Group had **202 employees** (December 31, 2024: 230 employees)[90](index=90&type=chunk) - During the review period, the Group's total staff costs (including directors' emoluments and MPF) were approximately **HKD 28 million**[90](index=90&type=chunk) - Employee remuneration is determined based on employee experience, skills, qualifications, nature of responsibilities, and current market trends[90](index=90&type=chunk) - The Group provides or sponsors various training programs and courses for its employees based on business needs[91](index=91&type=chunk) [Events After the Reporting Period](index=34&type=section&id=%E5%8D%81%E4%BA%8C.%20%E5%A0%B1%E5%91%8A%E6%9C%9F%E5%BE%8C%E4%BA%8B%E9%A0%85) No material events occurred after the reporting period - No material events occurred after the review period[92](index=92&type=chunk) [Other Information](index=34&type=section&id=%E5%85%B6%E4%BB%96%E8%B3%87%E6%96%99) [Purchase, Sale and Redemption of Listed Securities](index=34&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%E4%B8%8A%E5%B8%82%E8%AD%89%E5%88%B8) During the review period, neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed securities - During the review period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[93](index=93&type=chunk) [Standard Code for Securities Transactions by Directors](index=34&type=section&id=%E8%91%A3%20%E4%BA%8B%20%E9%80%B2%20%E8%A1%8C%20%E8%AD%89%20%E5%88%B8%20%E4%BA%A4%20%E6%98%93%20%E7%9A%84%20%E6%A8%99%20%E6%BA%96%20%E5%AE%88%20%E5%89%87) The company adopted a code of conduct for directors' securities transactions, meeting HKEX Listing Rules Appendix C3 standards, and all directors confirmed compliance during the review period - The Company has adopted a code of conduct for directors' securities transactions, the standards of which are no less exacting than those set out in the Model Code for Securities Transactions by Directors of Listed Issuers in Appendix C3 of the Listing Rules[94](index=94&type=chunk) - Following specific enquiries with each of the Company's directors, the Company has received confirmation from all directors that they have complied with the required standards of the code of conduct and the Model Code throughout the review period[94](index=94&type=chunk) [Corporate Governance](index=34&type=section&id=%E4%BC%81%20%E6%A5%AD%20%E7%AE%A1%20%E6%B2%BB) The company complied with all Corporate Governance Code provisions, but a deviation exists as the Chairman and CEO roles are not separated; the company is seeking a suitable candidate to rectify this - The directors believe that the Company has complied with all code provisions of the Corporate Governance Code set out in Appendix C1 of the Listing Rules throughout the review period[95](index=95&type=chunk) - The roles of Chairman and Chief Executive Officer should be separate and not performed by the same individual; however, Mr. Li Qian serves concurrently as Chairman of the Board and oversees daily business management, representing a deviation[96](index=96&type=chunk) - The Company is seeking a suitable candidate for the position of Managing Director and/or Chief Executive Officer to re-comply with Code Provision C.2.1 of the Corporate Governance Code[97](index=97&type=chunk) [Review of Accounts](index=35&type=section&id=%E5%AF%A9%20%E9%96%B1%20%E8%B3%A6%20%E7%9B%AE) The Board believes the financial information complies with HKEX Listing Rules Appendix D2 and has been reviewed by the Audit Committee and auditors in accordance with HKSRE 2410 - The Board believes that the financial information disclosed in this announcement complies with the requirements of Appendix D2 of the Listing Rules[98](index=98&type=chunk) - The Company's Audit Committee has reviewed the Group's unaudited interim financial information for the review period, which has also been reviewed by the Company's auditors in accordance with Hong Kong Standard on Review Engagements 2410 issued by the HKICPA[98](index=98&type=chunk) [Publication of Interim Results Announcement and Interim Report](index=35&type=section&id=%E7%99%BB%20%E8%BC%89%20%E4%B8%AD%20%E6%9C%9F%20%E6%A5%AD%20%E7%B8%BE%20%E5%85%AC%20%E5%91%8A%20%E5%8F%8A%20%E4%B8%AD%20%E6%9C%9F%20%E5%A0%B1%20%E5%91%8A) The results announcement has been published on the HKEX and company websites, and the interim report will be published in due course - This results announcement is published on the HKEX website www.hkexnews.hk and the Company's website www.hk217.com[99](index=99&type=chunk) - The Company's 2025 interim report will be published on the aforementioned websites in due course[99](index=99&type=chunk)

[Financial Summary](index=1&type=section&id=Financial%20Summary) The group reported a 2.7% revenue increase to **HKD 4,300.9 million**, while gross profit, operating profit, and profit for the period all declined | Indicator | 2025 (million HKD) | 2024 (million HKD) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 4,300.9 | 4,187.6 | 2.7% | | Gross Profit | 2,134.8 | 2,201.5 | -3.0% | | Operating Profit | 202.0 | 279.4 | -27.7% | | Non-GAAP Operating Profit | 225.9 | 299.2 | -24.5% | | Profit for the Period | 105.5 | 187.3 | -43.7% | | Profit for the Period Attributable to Owners of the Parent | 105.4 | 185.4 | -43.1% | | Basic Earnings Per Share (HKD) | 0.06 | 0.11 | -45.5% | | Diluted Earnings Per Share (HKD) | 0.06 | 0.11 | -45.5% | [Interim Condensed Consolidated Financial Statements](index=2&type=section&id=Interim%20Condensed%20Consolidated%20Financial%20Statements) This section presents the group's interim condensed consolidated statements of profit or loss, comprehensive income, and financial position [Interim Condensed Consolidated Statement of Profit or Loss](index=2&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) For the six months ended June 30, 2025, the group's revenue increased by 2.7% to **HKD 4,300.9 million**, but a 9.1% rise in cost of sales led to a 3.0% decrease in gross profit, with operating and period profits declining significantly | Indicator | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | Revenue | 4,300,936 | 4,187,639 | | Cost of Sales | (2,166,090) | (1,986,091) | | Gross Profit | 2,134,846 | 2,201,548 | | Other Income and Gains | 77,810 | 10,718 | | Selling and Distribution Expenses | (1,253,013) | (1,205,245) | | Administrative Expenses | (756,784) | (727,033) | | Operating Profit | 202,045 | 279,384 | | Finance Income | 8,046 | 18,586 | | Finance Costs | (56,701) | (87,683) | | Profit Before Tax | 153,619 | 217,880 | | Income Tax Expense | (48,082) | (30,594) | | Profit for the Period | 105,537 | 187,286 | | Profit for the Period Attributable to Owners of the Parent | 105,388 | 185,447 | | Basic Earnings Per Share (HKD) | 0.06 | 0.11 | | Diluted Earnings Per Share (HKD) | 0.06 | 0.11 | [Interim Condensed Consolidated Statement of Comprehensive Income](index=3&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) Total comprehensive income for the period significantly increased to **HKD 319.5 million**, primarily driven by a positive shift in exchange differences, offsetting the decline in profit for the period | Indicator | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | Profit for the Period | 105,537 | 187,286 | | Other Comprehensive Income (net of tax) | 213,954 | (126,409) | | Total Comprehensive Income for the Period | 319,491 | 60,877 | | Attributable to Owners of the Parent | 319,328 | 59,636 | | Non-controlling Interests | 163 | 1,241 | - The exchange difference on translation of overseas operations shifted from a negative **HKD 150.2 million** in 2024 to a positive **HKD 249.0 million** in 2025, being the primary reason for the significant increase in total comprehensive income[7](index=7&type=chunk) [Interim Condensed Consolidated Statement of Financial Position](index=4&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the group's total non-current assets increased, total current assets slightly decreased, and total current liabilities reduced, leading to an increase in net assets and equity attributable to owners of the parent | Indicator | June 30, 2025 (thousand HKD) | December 31, 2024 (thousand HKD) | | :--- | :--- | :--- | | **Non-current Assets** | | | | Property, Plant and Equipment | 836,176 | 819,179 | | Goodwill | 2,617,439 | 2,532,832 | | Total Non-current Assets | 6,008,639 | 5,768,492 | | **Current Assets** | | | | Inventories | 1,623,337 | 1,712,437 | | Cash and Cash Equivalents | 998,472 | 1,099,358 | | Total Current Assets | 4,467,805 | 4,635,090 | | **Current Liabilities** | | | | Trade and Bills Payables | 1,280,310 | 1,457,628 | | Total Current Liabilities | 3,131,827 | 3,205,861 | | Net Current Assets | 1,335,978 | 1,429,229 | | **Non-current Liabilities** | | | | Total Non-current Liabilities | 1,328,443 | 1,382,104 | | **Equity** | | | | Net Assets | 6,016,174 | 5,815,617 | | Equity Attributable to Owners of the Parent | 6,010,304 | 5,789,855 | | Total Equity | 6,016,174 | 5,815,617 | [Notes to the Interim Condensed Consolidated Financial Information](index=6&type=section&id=Notes%20to%20the%20Interim%20Condensed%20Consolidated%20Financial%20Information) This section provides detailed notes on the interim condensed consolidated financial information, covering company details, accounting policies, segment data, and specific financial line items [1. Company Information](index=6&type=section&id=1.%20Company%20Information) Goodbaby International Holdings Limited, incorporated in the Cayman Islands in 2000 and listed on HKEX in 2010, primarily engages in the design, R&D, manufacturing, marketing, and distribution of children's products - The company was incorporated in the Cayman Islands on July 14, 2000, and listed on the Main Board of the Stock Exchange of Hong Kong on November 24, 2010[10](index=10&type=chunk) - The group is principally engaged in the design, research and development, manufacturing, marketing, and distribution of children's products[11](index=11&type=chunk) [2.1 Basis of Preparation](index=6&type=section&id=2.1%20Basis%20of%20Preparation) The interim condensed consolidated financial information is prepared in HKD under IAS 34 and should be read in conjunction with the 2024 annual consolidated financial statements - The interim condensed consolidated financial information has been prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" and is presented in Hong Kong dollars[12](index=12&type=chunk) - The financial information should be read in conjunction with the group's annual consolidated financial statements for the year ended December 31, 2024[12](index=12&type=chunk) [2.2 Changes in Accounting Policies and Disclosures](index=6&type=section&id=2.2%20Changes%20in%20Accounting%20Policies%20and%20Disclosures) The group adopted revised IFRS accounting standards for the first time this period, with the amendment to IAS 21, "Lack of Exchangeability," having no impact on the interim condensed consolidated financial information - The group has adopted the revised International Financial Reporting Standards (IFRSs) accounting standards for the first time in the current period, including "Amendments to IAS 21 Lack of Exchangeability"[13](index=13&type=chunk)[14](index=14&type=chunk) - As the group's transaction and functional currencies are all exchangeable, the amendments had no impact on the interim condensed consolidated financial information[14](index=14&type=chunk) [3. Operating Segment Information](index=6&type=section&id=3.%20Operating%20Segment%20Information) The group is organized into three reportable operating segments: Wheeled Goods, Car Seats, and Other Categories, with regional segments adjusted to EMEA & India, Americas, and Asia Pacific, with management assessing performance based on revenue - The group has three reportable operating segments: Wheeled Goods, Car Seats, and Other Categories[15](index=15&type=chunk)[18](index=18&type=chunk) - The geographical segments have been updated to Europe, Middle East, India and Africa ("EMEA & India"), Americas, and Asia Pacific segments[16](index=16&type=chunk) Revenue by Product Category (thousand HKD) | Product Category | 2025 | 2024 | | :--- | :--- | :--- | | Wheeled Goods | 1,791,331 | 1,694,830 | | Car Seats | 1,985,259 | 1,884,065 | | Other Categories | 524,346 | 608,744 | | **Total** | **4,300,936** | **4,187,639** | Revenue by Region (thousand HKD) | Region | 2025 | 2024 | | :--- | :--- | :--- | | EMEA & India Market | 2,004,177 | 1,835,035 | | Americas Market | 1,394,679 | 1,393,940 | | Asia Pacific Market | 902,080 | 958,664 | | **Total** | **4,300,936** | **4,187,639** | - Sales revenue to two major third-party customers amounted to **HKD 550.9 million** and **HKD 423.4 million** respectively (2024: **HKD 517.7 million** and **HKD 412.8 million**), covering all product segments[21](index=21&type=chunk) [4. Revenue, Other Income and Gains](index=9&type=section&id=4.%20Revenue%2C%20Other%20Income%20and%20Gains) Total revenue for the period grew by 2.7% to **HKD 4,300.9 million**, primarily from sales of goods, while other income and gains significantly increased, driven by a substantial rise in net exchange gains Revenue Analysis (thousand HKD) | Revenue Source | 2025 | 2024 | | :--- | :--- | :--- | | Sales of Goods | 4,289,475 | 4,173,838 | | Provision of Testing Services | 11,461 | 13,801 | | **Total** | **4,300,936** | **4,187,639** | Other Income and Gains (thousand HKD) | Category | 2025 | 2024 | | :--- | :--- | :--- | | Government Grants | 8,579 | 3,536 | | Gain on Disposal of Scrapped Materials | 3,023 | 2,355 | | Net Exchange Gain | 62,825 | 679 | | Compensation Income | 1,015 | 507 | | Others | 2,302 | 1,942 | | **Total** | **77,810** | **10,718** | - Net exchange gain significantly increased from **HKD 679 thousand** in 2024 to **HKD 62,825 thousand** in 2025, being the main driver for the growth in other income and gains[24](index=24&type=chunk) [5. Finance Income](index=11&type=section&id=5.%20Finance%20Income) Finance income for the period, primarily interest income from bank deposits, significantly decreased by **56.7%** year-on-year | Category | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | Interest Income from Bank Deposits | 8,046 | 18,586 | [6. Finance Costs](index=11&type=section&id=6.%20Finance%20Costs) Finance costs for the period decreased by **35.3%** year-on-year, primarily due to reduced interest expenses on bank loans, overdrafts, and other borrowings | Category | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | Interest on Bank Loans, Overdrafts and Other Borrowings | 51,968 | 83,548 | | Interest on Lease Liabilities | 4,733 | 4,135 | | **Total** | **56,701** | **87,683** | [7. Profit Before Tax](index=12&type=section&id=7.%20Profit%20Before%20Tax) Profit before tax was achieved after deducting various expenses, with increases in cost of inventories sold, R&D costs, depreciation, and amortization, while employee benefit expenses slightly decreased Key Deductions/Credits (thousand HKD) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Cost of Inventories Sold | 2,158,450 | 1,977,143 | | Depreciation of Property, Plant and Equipment | 130,325 | 124,880 | | Amortization of Intangible Assets | 39,953 | 37,001 | | Research and Development Costs | 219,705 | 201,990 | | Employee Benefit Expenses | 950,462 | 968,403 | | Net Exchange Gain | (62,825) | (679) | | Bank Interest Income | (8,046) | (18,586) | - Research and development costs increased by **8.8%** year-on-year to **HKD 219.7 million**[29](index=29&type=chunk) - Employee benefit expenses (including directors' emoluments) decreased by **1.9%** year-on-year to **HKD 950.5 million**[29](index=29&type=chunk) [8. Income Tax](index=13&type=section&id=8.%20Income%20Tax) The group operates globally with varying income tax rates, with two Chinese subsidiaries, GCPC and EQTC, enjoying a **15%** preferential tax rate as "High-Tech Enterprises," leading to a **57.1%** year-on-year increase in income tax expense for the period - The group operates in various jurisdictions including Hong Kong, the United States, Japan, Germany, the Czech Republic, Canada, the United Arab Emirates, and Mainland China, with different income tax rates applicable[30](index=30&type=chunk)[31](index=31&type=chunk)[32](index=32&type=chunk) - Goodbaby Child Products Co., Ltd. (GCPC) and EQTC Testing and Certification Co., Ltd. (EQTC) were recognized as "High-Tech Enterprises" and enjoy a **15%** preferential tax rate from 2023 to 2025[32](index=32&type=chunk) Income Tax Expense (thousand HKD) | Category | 2025 | 2024 | | :--- | :--- | :--- | | Current Income Tax | 75,805 | 71,200 | | Deferred Income Tax | (27,723) | (40,606) | | **Income Tax Expense** | **48,082** | **30,594** | [9. Dividends](index=14&type=section&id=9.%20Dividends) The company paid a final dividend of **HKD 116.8 million** for 2024 in May 2025, but the Board resolved not to declare any interim dividend for the six months ended June 30, 2025 - On May 27, 2025, shareholders approved and paid a final dividend of **HKD 0.07** per share for 2024, totaling **HKD 116.8 million**[34](index=34&type=chunk) - The Board has resolved not to declare any interim dividend for the six months ended June 30, 2025 (2024: nil)[34](index=34&type=chunk) [10. Earnings Per Share](index=14&type=section&id=10.%20Earnings%20Per%20Share) Basic and diluted earnings per share for the period were **HKD 0.06**, a **45.5%** decrease from **HKD 0.11** in the prior year, primarily due to reduced profit attributable to ordinary equity holders of the parent Earnings Per Share Calculation (thousand HKD/share) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Profit for the period attributable to ordinary equity holders of the parent used in basic EPS calculation | 105,388 | 185,447 | | Weighted average number of ordinary shares in issue during the period used in basic EPS calculation | 1,668,235,666 | 1,668,031,166 | | Dilutive effect of share options on weighted average number of ordinary shares | 53,698,475 | – | | **Total diluted shares** | **1,721,934,141** | **1,668,031,166** | - Basic and diluted earnings per share both decreased from **HKD 0.11** in 2024 to **HKD 0.06** in 2025[35](index=35&type=chunk)[36](index=36&type=chunk) [11. Inventories](index=15&type=section&id=11.%20Inventories) As of June 30, 2025, the group's total inventories decreased to **HKD 1,623.3 million** from **HKD 1,712.4 million** at the end of 2024, mainly due to a reduction in finished goods Inventory Composition (thousand HKD) | Category | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Raw Materials | 262,463 | 221,952 | | Work-in-progress | 14,839 | 19,437 | | Finished Goods | 1,346,035 | 1,471,048 | | **Total** | **1,623,337** | **1,712,437** | [12. Trade and Bills Receivables](index=15&type=section&id=12.%20Trade%20and%20Bills%20Receivables) The group's total trade and bills receivables remained stable, with a maximum credit period of three months and a credit control department for monitoring, and most receivables are within three months - The group's trade terms with customers are primarily on credit, with a maximum credit period of three months, and a credit control department is in place to mitigate credit risk[37](index=37&type=chunk) Ageing Analysis of Trade and Bills Receivables (thousand HKD) | Ageing | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Within 3 months | 1,033,208 | 1,051,390 | | 3 to 6 months | 32,951 | 23,987 | | 6 months to 1 year | 17,145 | 6,225 | | Over 1 year | 2,122 | 2,850 | | **Total** | **1,085,426** | **1,084,452** | [13. Trade and Bills Payables](index=16&type=section&id=13.%20Trade%20and%20Bills%20Payables) As of June 30, 2025, total trade and bills payables decreased to **HKD 1,280.3 million** from **HKD 1,457.6 million** at the end of 2024, with most payables settled within three months, typically on 60 to 90-day terms Ageing Analysis of Trade and Bills Payables (thousand HKD) | Ageing | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Within 3 months | 986,648 | 1,156,016 | | 3 to 12 months | 285,245 | 291,761 | | 1 to 2 years | 894 | 3,658 | | 2 to 3 years | 2,876 | 1,568 | | Over 3 years | 4,647 | 4,625 | | **Total** | **1,280,310** | **1,457,628** | - Trade and bills payables are interest-free and generally settled on 60 to 90-day terms[39](index=39&type=chunk) [14. Interest-bearing Bank Loans and Other Borrowings](index=16&type=section&id=14.%20Interest-bearing%20Bank%20Loans%20and%20Other%20Borrowings) The group's total interest-bearing bank loans and other borrowings slightly increased to **HKD 1,460.6 million**, with a rise in current borrowings and a decrease in non-current, primarily USD-denominated at floating rates between **1.06%** and **5.99%** Interest-bearing Bank Loans and Other Borrowings (thousand HKD) | Maturity | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Current | 523,402 | 475,886 | | Non-current | 937,194 | 979,171 | | **Total** | **1,460,596** | **1,455,057** | Carrying Amount of Borrowings by Currency (thousand HKD) | Currency | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | RMB | 219,154 | 85,101 | | USD | 1,047,632 | 1,036,057 | | EUR | 185,640 | 326,441 | | JPY | 8,170 | 7,458 | | **Total** | **1,460,596** | **1,455,057** | Carrying Amount of Borrowings by Interest Rate Type (thousand HKD) | Interest Rate Type | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Fixed Rate | 186,281 | 178,896 | | Floating Rate | 1,274,315 | 1,276,161 | | **Total** | **1,460,596** | **1,455,057** | - The effective interest rates for bank loans and other borrowings ranged from **1.06%** to **5.99%** (2024: **1.20%** to **7.56%**)[42](index=42&type=chunk) - Certain bank loans are secured by standby letters of credit and guarantees issued by the group's subsidiaries and guarantees provided by the company[43](index=43&type=chunk) [15. Derivative Financial Instruments](index=18&type=section&id=15.%20Derivative%20Financial%20Instruments) The group holds derivative financial instruments, including forward currency contracts and foreign currency swaps, with a significant increase in liabilities from forward currency contracts Derivative Financial Instruments (thousand HKD) | Category | June 30, 2025 Assets | June 30, 2025 Liabilities | December 31, 2024 Assets | December 31, 2024 Liabilities | | :--- | :--- | :--- | :--- | :--- | | Forward Currency Contracts | 22,222 | 80,595 | 20,430 | 10,711 | | Foreign Currency Swaps | 39 | 16 | – | 1,352 | | **Total** | **22,261** | **80,611** | **20,430** | **12,063** | [Overview](index=19&type=section&id=Overview) This section provides an overview of the macroeconomic environment, the group's revenue performance by brand, and an executive summary of key business segments [Impact of Macroeconomic Volatility and Heightened Uncertainty on Business Performance](index=19&type=section&id=Impact%20of%20Macroeconomic%20Volatility%20and%20Heightened%20Uncertainty%20on%20Business%20Performance) Global macroeconomic weakness, tariff policies, and geopolitical conflicts reduced consumer demand and market confidence, increasing cost pressures; despite challenges, the group's revenue grew **2.7%**, but profitability declined due to US tariffs, compliance costs, and marketing expenses - The global macroeconomic outlook remains weak, with US tariff policies and geopolitical conflicts leading to a general decline in consumer demand, market confidence, and business sentiment[46](index=46&type=chunk) - The group's revenue grew by **2.7%**, but profitability decreased, mainly due to US market tariff costs, compliance costs for new regulatory standards for car seat products, new product display costs, and increased marketing expenses[46](index=46&type=chunk) - The group was selected for "The Sustainability Yearbook (China Edition) 2025" and listed on "Forbes China ESG Benchmark for Industry Development 2025," receiving external recognition[47](index=47&type=chunk) [Revenue Summary of the Group](index=20&type=section&id=Revenue%20Summary%20of%20the%20Group) The group's revenue for the period increased by **2.7%** (or **2.8%** in constant currency) to **HKD 4,300.9 million**, with strategic brands contributing **91.2%**, led by strong CYBEX performance, while Evenflo and gb brands saw revenue declines Group Revenue Summary (million HKD) | Indicator | 2025 | 2024 | YoY Change (%) | YoY Change (Constant Currency) (%) | | :--- | :--- | :--- | :--- | :--- | | Group Revenue | 4,300.9 | 4,187.6 | 2.7% | 2.8% | | **By Brand** | | | | | | Strategic Brands | 3,922.5 | 3,792.3 | 3.4% | 3.4% | | CYBEX | 2,452.4 | 2,158.2 | 13.6% | 12.6% | | Evenflo | 1,075.3 | 1,133.8 | -5.2% | -2.5% | | gb | 394.8 | 500.3 | -21.1% | -23.0% | | Blue Chip and Other Businesses | 378.4 | 395.3 | -4.3% | -2.4% | - Reported gross profit decreased by **3.0%** to **HKD 2,134.8 million**, and reported operating profit decreased by **27.7%** to **HKD 202.0 million**[48](index=48&type=chunk) - The group possesses its own diversified brands, a globally balanced omni-channel distribution platform, and a vertically integrated platform for in-house manufacturing and operational services[48](index=48&type=chunk) [Executive Summary](index=20&type=section&id=Executive%20Summary) CYBEX brand revenue grew **13.6%**, outperforming competitors, while Evenflo revenue declined **5.2%** with profitability challenges, and gb revenue fell **21.1%** due to brand transformation, though gross margin improved, and Blue Chip business revenue decreased **4.3%** due to delayed shipments - CYBEX brand revenue grew strongly by **13.6%** (or **12.6%** in constant currency) to **HKD 2,452.4 million**, with continued improvement in profitability, surpassing revenue growth[52](index=52&type=chunk) - Evenflo brand revenue decreased by **5.2%** (or **2.5%** in constant currency) to **HKD 1,075.9 million**, facing profitability challenges mainly due to US tariffs, new regulatory compliance costs, and increased marketing expenses[55](index=55&type=chunk) - gb brand revenue decreased by **21.1%** (or **23.0%** in constant currency) to **HKD 394.8 million**, primarily due to brand transformation focusing on proprietary retail channels, optimizing the channel mix, and achieving a significant improvement in gross margin[55](index=55&type=chunk) - Blue Chip and Other Businesses revenue decreased by **4.3%** (or **2.4%** in constant currency) to **HKD 378.4 million**, mainly due to delayed shipments by major customers after tariff announcements[54](index=54&type=chunk) [Outlook](index=22&type=section&id=Outlook) The group anticipates future challenges from global economic slowdown, geopolitical conflicts, logistics disruptions, and climate change, yet remains confident in its vertically integrated, brand-driven strategy, focusing on strategic investments, brand development, and global supply chain optimization - For the remainder of 2025, global economic slowdown, geopolitical conflicts, logistics disruptions, and climate change are expected to bring business interruptions and cost pressures[56](index=56&type=chunk) - The group will continue to implement its vertically integrated, brand-driven development strategy, maintaining and strengthening global competitiveness through ongoing strategic investments[57](index=57&type=chunk) - CYBEX will continue to leverage brand momentum and omni-channel infrastructure for global development; Evenflo will focus on restoring sales growth and profitability; gb will continue its brand transformation in the China market; Blue Chip business is expected to face downward pressure but maintain stable customer relationships[56](index=56&type=chunk) - Global strategies include continuously expanding and deepening brand building, omni-channel distribution networks and infrastructure, and optimizing and integrating global supply chain strategies[57](index=57&type=chunk) [Financial Review](index=23&type=section&id=Financial%20Review) This section provides a detailed review of the group's financial performance, including revenue, costs, profits, working capital, liquidity, and other financial metrics [Revenue](index=23&type=section&id=Revenue) Total revenue for the period increased by **2.7%** to **HKD 4,300.9 million**, or **2.8%** in constant currency, with exchange rate fluctuations impacting reported revenue | Indicator | 2025 (million HKD) | 2024 (million HKD) | YoY Change | YoY Change (Constant Currency) | | :--- | :--- | :--- | :--- | :--- | | Total Revenue | 4,300.9 | 4,187.6 | 2.7% | 2.8% | - Exchange rate fluctuations of RMB and EUR against HKD led to differences between revenue growth in original currencies and in HKD[58](index=58&type=chunk) [Cost of Sales, Gross Profit and Gross Margin](index=23&type=section&id=Cost%20of%20Sales%2C%20Gross%20Profit%20and%20Gross%20Margin) Cost of sales increased by **9.1%**, leading to a **3.0%** decrease in gross profit to **HKD 2,134.8 million** and a **3.0 percentage point** drop in gross margin to **49.6%**, primarily due to US tariffs, car seat compliance costs, and promotional discounts | Indicator | 2025 (million HKD) | 2024 (million HKD) | YoY Change | | :--- | :--- | :--- | :--- | | Cost of Sales | 2,166.1 | 1,986.1 | 9.1% | | Gross Profit | 2,134.8 | 2,201.5 | -3.0% | | Gross Margin | 49.6% | 52.6% | -3.0 percentage points | - The decrease in gross profit was mainly due to lower gross profit from US market operations, attributed to additional tariff costs, increased car seat product costs for new regulatory compliance, and higher promotional discount expenses for new products in retail stores[60](index=60&type=chunk) [Other Income and Gains](index=24&type=section&id=Other%20Income%20and%20Gains) Other income and gains for the period significantly increased by approximately **HKD 67.1 million** to **HKD 77.8 million**, primarily driven by higher foreign exchange gains | Indicator | 2025 (million HKD) | 2024 (million HKD) | YoY Change | | :--- | :--- | :--- | :--- | | Other Income and Gains | 77.8 | 10.7 | 626.2% | - Primarily due to increased foreign exchange gains[61](index=61&type=chunk) [Selling and Distribution Expenses](index=24&type=section&id=Selling%20and%20Distribution%20Expenses) Selling and distribution expenses increased by approximately **HKD 47.8 million** to **HKD 1,253.0 million**, primarily due to higher logistics and personnel costs driven by increased revenue | Indicator | 2025 (million HKD) | 2024 (million HKD) | YoY Change | | :--- | :--- | :--- | :--- | | Selling and Distribution Expenses | 1,253.0 | 1,205.2 | 4.0% | - Primarily includes marketing expenses, personnel costs, rent and commissions, and logistics costs, with the increase mainly due to higher logistics and personnel costs driven by increased revenue[62](index=62&type=chunk) [Administrative Expenses](index=24&type=section&id=Administrative%20Expenses) Administrative expenses increased by approximately **HKD 29.8 million** to **HKD 756.8 million**, primarily due to higher research and development costs and professional service fees | Indicator | 2025 (million HKD) | 2024 (million HKD) | YoY Change | | :--- | :--- | :--- | :--- | | Administrative Expenses | 756.8 | 727.0 | 4.1% | - Primarily includes personnel costs, research and development costs, professional service fees, depreciation, and amortization costs, with the increase mainly due to higher research and development costs and professional service fees[63](index=63&type=chunk) [Other Expenses](index=24&type=section&id=Other%20Expenses) Other expenses slightly increased by approximately **HKD 0.2 million** to **HKD 0.8 million**, mainly due to higher charitable donations and losses on disposal of property, plant, and equipment, partially offset by reduced fair value losses on derivative financial instruments | Indicator | 2025 (million HKD) | 2024 (million HKD) | YoY Change | | :--- | :--- | :--- | :--- | | Other Expenses | 0.8 | 0.6 | 33.3% | [Operating Profit](index=24&type=section&id=Operating%20Profit) Operating profit for the period significantly decreased by **27.7%**, or **HKD 77.4 million**, to **HKD 202.0 million**, primarily due to the combined impact of increased cost of sales, selling and distribution expenses, administrative expenses, and a decline in gross profit | Indicator | 2025 (million HKD) | 2024 (million HKD) | YoY Change | | :--- | :--- | :--- | :--- | | Operating Profit | 202.0 | 279.4 | -27.7% | [Finance Income](index=24&type=section&id=Finance%20Income) Finance income for the period, primarily interest income from bank deposits, significantly decreased by **56.7%** to **HKD 8.0 million** year-on-year | Indicator | 2025 (million HKD) | 2024 (million HKD) | YoY Change | | :--- | :--- | :--- | :--- | | Finance Income | 8.0 | 18.6 | -56.7% | [Finance Costs](index=25&type=section&id=Finance%20Costs) Finance costs for the period decreased by **35.3%** to **HKD 56.7 million** year-on-year, consistent with the reduction in interest-bearing bank loans and other borrowings | Indicator | 2025 (million HKD) | 2024 (million HKD) | YoY Change | | :--- | :--- | :--- | :--- | | Finance Costs | 56.7 | 87.7 | -35.3% | [Profit Before Tax](index=25&type=section&id=Profit%20Before%20Tax) Profit before tax for the period decreased by **29.5%** to **HKD 153.6 million** year-on-year, primarily impacted by lower operating profit and reduced finance income | Indicator | 2025 (million HKD) | 2024 (million HKD) | YoY Change | | :--- | :--- | :--- | :--- | | Profit Before Tax | 153.6 | 217.9 | -29.5% | [Income Tax Expense](index=25&type=section&id=Income%20Tax%20Expense) Income tax expense for the period was **HKD 48.1 million**, a significant **57.1%** year-on-year increase, primarily due to varying effective tax rates across different legal entities' profit contributions | Indicator | 2025 (million HKD) | 2024 (million HKD) | YoY Change | | :--- | :--- | :--- | :--- | | Income Tax Expense | 48.1 | 30.6 | 57.1% | - The change in income tax expense is primarily due to different effective tax rates on profit contributions from various legal entities[69](index=69&type=chunk) [Profit for the Period](index=25&type=section&id=Profit%20for%20the%20Period) Profit for the period significantly decreased by **43.7%** to **HKD 105.5 million** year-on-year, with Non-GAAP profit also declining by **38.4%** to **HKD 124.6 million** | Indicator | 2025 (million HKD) | 2024 (million HKD) | YoY Change | | :--- | :--- | :--- | :--- | | Profit for the Period | 105.5 | 187.3 | -43.7% | | Non-GAAP Profit | 124.6 | 202.2 | -38.4% | [Non-GAAP Financial Measures](index=25&type=section&id=Non-GAAP%20Financial%20Measures) The group uses Non-GAAP financial measures, such as Non-GAAP operating profit, profit before tax, and profit for the period, to present clearer financial results by excluding non-cash items, M&A impacts, and one-off provisions, supplementing IFRS financial performance analysis - Non-GAAP financial measures provide supplementary analysis to investors by excluding non-cash items, impacts from merger and acquisition transactions, and one-off bad debt provisions/operating losses[71](index=71&type=chunk) Reconciliation of Non-GAAP Financial Measures to IFRS (million HKD) | Indicator | 2025 Reported | 2025 Non-GAAP | 2024 Reported | 2024 Non-GAAP | | :--- | :--- | :--- | :--- | :--- | | Operating Profit | 202.0 | 225.9 | 279.4 | 299.2 | | Profit Before Tax | 153.6 | 177.5 | 217.9 | 237.7 | | Profit for the Period | 105.5 | 124.6 | 187.3 | 202.2 | | Operating Margin | 4.7% | 5.3% | 6.7% | 7.1% | | Net Profit Margin | 2.5% | 2.9% | 4.5% | 4.8% | [Working Capital Management](index=27&type=section&id=Working%20Capital%20Management) Trade and bills receivables remained robust, trade and bills payables decreased, and inventories also reduced due to lower in-transit stock and scaled-back safety reserves, maintaining stable inventory turnover days Working Capital Items (million HKD) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Trade and Bills Receivables | 1,085.9 | 1,085.0 | | Trade and Bills Payables | 1,282.1 | 1,459.5 | | Inventories | 1,623.3 | 1,712.4 | Turnover Days (days) | Item | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Trade and Bills Receivables Turnover Days | 45 | 52 | | Trade and Bills Payables Turnover Days | 114 | 119 | | Inventory Turnover Days | 139 | 138 | - The decrease in inventories was mainly due to lower in-transit inventory levels and the group's proactive reduction of safety stock reserves built up to address potential supply chain shortages from the Red Sea crisis and Chinese New Year[74](index=74&type=chunk) [Liquidity and Financial Resources](index=28&type=section&id=Liquidity%20and%20Financial%20Resources) As of June 30, 2025, the group's monetary assets totaled **HKD 1,067.1 million**, interest-bearing bank loans and other borrowings were **HKD 1,460.6 million**, resulting in net debt of **HKD 393.5 million** Liquidity and Financial Resources (million HKD) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Monetary Assets | 1,067.1 | 1,126.0 | | Interest-bearing Bank Loans and Other Borrowings | 1,460.6 | 1,455.1 | | Current Bank Loans and Other Borrowings | 523.4 | 475.9 | | Non-current Bank Loans and Other Borrowings | 937.2 | 979.2 | | Net Debt | 393.5 | 329.1 | [Contingent Liabilities](index=28&type=section&id=Contingent%20Liabilities) The group may be involved in legal proceedings and litigation in its ordinary course of business, but as of June 30, 2025, there were no material contingent liabilities - The group may be involved in legal proceedings and litigation in the ordinary course of its business, but it believes that losses from such matters will not have a material adverse effect on its business, financial condition, operating results, or cash flows[77](index=77&type=chunk) - As of June 30, 2025, the group had no material contingent liabilities[78](index=78&type=chunk) [Exchange Rate Fluctuations](index=28&type=section&id=Exchange%20Rate%20Fluctuations) As a multinational enterprise, the group faces foreign currency exposure from USD, RMB, and EUR-denominated revenues and expenses, utilizing forward foreign exchange contracts to mitigate potential impacts - The group's revenue is primarily denominated in USD, RMB, and EUR, while its purchases and operating expenses are mainly denominated in RMB, USD, and EUR[79](index=79&type=chunk) - The group uses forward foreign exchange contracts to mitigate the potential impact of foreign currency exposure[79](index=79&type=chunk) [Pledged Assets](index=29&type=section&id=Pledged%20Assets) As of June 30, 2025, approximately **HKD 24.7 million** in bank deposits were pledged as interest reserves for certain bank borrowings - Approximately **HKD 24.7 million** (December 31, 2024: **HKD 24.5 million**) of bank deposits were pledged as interest reserves for certain bank borrowings[80](index=80&type=chunk) [Gearing Ratio](index=29&type=section&id=Gearing%20Ratio) As of June 30, 2025, the group's gearing ratio was **30.6%** (**32.6%** including lease liabilities), a decrease from the end of 2024 | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Gearing Ratio | 30.6% | 32.8% | | Gearing Ratio (including lease liabilities) | 32.6% | 34.8% | [Other Information](index=29&type=section&id=Other%20Information) This section covers additional information including employee details, remuneration policies, significant transactions, post-reporting events, share activities, dividends, and corporate governance [Employees and Remuneration Policy](index=29&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the group had **6,096** full-time employees with employee costs of **HKD 935.8 million**, and the company adopted the 2025 Share Option Scheme to incentivize employees, replacing prior plans | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Number of Full-time Employees | 6,096 | 6,231 | | Employee Costs (excluding Directors' Emoluments) | HKD 935.8 million | HKD 953.8 million | - The company has adopted the 2025 Share Option Scheme to incentivize or reward eligible participants, replacing the 2010 and 2020 Share Option Schemes[82](index=82&type=chunk)[83](index=83&type=chunk) - As of June 30, 2025, the total number of outstanding share options under the 2010 and 2020 Share Option Schemes was **175,668,000**[84](index=84&type=chunk) [Material Acquisitions and Disposals and Material Investments](index=30&type=section&id=Material%20Acquisitions%20and%20Disposals%20and%20Material%20Investments) During the period, the group did not undertake any material acquisitions or disposals of subsidiaries, associates, or joint ventures, nor did it make any material investments - During the period, the group did not undertake any material acquisitions or disposals of subsidiaries, associates, or joint ventures, and there were no material investments[85](index=85&type=chunk) [Events After Reporting Period](index=30&type=section&id=Events%20After%20Reporting%20Period) Except as disclosed in this announcement, no other significant events requiring additional disclosure or adjustment occurred after the reporting period and up to the announcement date - Save as disclosed in this announcement, no other significant events requiring additional disclosure or adjustment occurred after the period end and up to the date of this announcement[86](index=86&type=chunk) [Purchase, Sale or Redemption of Shares](index=30&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20Shares) During the period, neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed securities, and as of June 30, 2025, the company held no treasury shares - During the period, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities[87](index=87&type=chunk) - As of June 30, 2025, the company did not hold any treasury shares[87](index=87&type=chunk) [Dividends](index=30&type=section&id=Dividends) The Board does not recommend the payment of any dividend for the current period - The Board does not recommend the payment of any dividend for the current period (for the six months ended June 30, 2024: nil)[88](index=88&type=chunk) [Corporate Governance](index=30&type=section&id=Corporate%20Governance) The Board is committed to high corporate governance standards and has complied with all code provisions of the Corporate Governance Code in Appendix C1 of the Listing Rules throughout the period - The Board is committed to achieving high standards of corporate governance, believing it is crucial for safeguarding shareholders' interests, formulating business strategies, and enhancing corporate value[89](index=89&type=chunk) - The company has complied with all code provisions of the Corporate Governance Code as set out in Appendix C1 to the Listing Rules throughout the period[89](index=89&type=chunk) [Standard Code for Securities Transactions by Directors](index=31&type=section&id=Standard%20Code%20for%20Securities%20Transactions%20by%20Directors) The company adopted the Standard Code for Securities Transactions by Directors of Listed Issuers in Appendix C3 of the Listing Rules, and all directors confirmed compliance during the period - The company has adopted the Standard Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 to the Listing Rules as the standard for directors' dealings in the company's securities[90](index=90&type=chunk) - Following specific enquiries, all directors confirmed that they have complied with the required standards of dealing as set out in the Standard Code throughout the period[90](index=90&type=chunk) [Audit Committee](index=31&type=section&id=Audit%20Committee) The company's Audit Committee, comprising Mr. Wong Shun Tak, Ms. Zhang Yun, and Mr. Ho Kwok Yin, reviewed the group's unaudited interim condensed consolidated financial information for the period, which was also reviewed by Ernst & Young - The Audit Committee comprises Mr. Wong Shun Tak (Chairman), Ms. Zhang Yun, and Mr. Ho Kwok Yin[91](index=91&type=chunk) - The group's unaudited interim condensed consolidated financial information for the period has been reviewed by the Audit Committee and by the company's auditor, Ernst & Young, in accordance with Hong Kong Standard on Review Engagements 2410[91](index=91&type=chunk) [Publication of Interim Report](index=31&type=section&id=Publication%20of%20Interim%20Report) This interim results announcement is published on the HKEX and company websites, and the interim report will be dispatched to shareholders and uploaded to these websites in due course - This interim results announcement is published on the website of the Stock Exchange (http://www.hkexnews.hk) and the company's website (http://www.gbinternational.com.hk)[92](index=92&type=chunk) - The company's interim report for the period will be dispatched to the company's shareholders and uploaded to the aforementioned websites in due course[92](index=92&type=chunk) [Appointment of Lead Independent Non-executive Director](index=31&type=section&id=Appointment%20of%20Lead%20Independent%20Non-executive%20Director) The Board appointed Ms. Zhang Yun, an independent non-executive director, as Lead Independent Non-executive Director, effective August 25, 2025, to enhance Board effectiveness and promote corporate governance practices - Ms. Zhang Yun, an independent non-executive director, has been appointed as the Lead Independent Non-executive Director, effective August 25, 2025[93](index=93&type=chunk) - This appointment aims to enhance the effectiveness of the Board and further promote robust corporate governance practices in response to the requirements of the revised Corporate Governance Code and Listing Rules[93](index=93&type=chunk)