[Financial Highlights](index=1&type=section&id=%E8%B4%A2%E5%8A%A1%E6%91%98%E8%A6%81) [Interim Results Announcement for the Six Months Ended June 30, 2025](index=1&type=section&id=%E6%88%AA%E8%87%B3%E4%BA%8C%E9%9B%B6%E4%BA%8C%E4%BA%94%E5%B9%B4%E5%85%AD%E6%9C%88%E4%B8%89%E5%8D%81%E6%97%A5%E6%AD%A2%E5%85%AD%E5%80%8B%E6%9C%88%E4%B8%AD%E6%9C%9F%E6%A5%AD%E7%B8%BE%E5%85%AC%E5%91%8A) Strongtech Environmental Holdings Limited announced unaudited interim results for the six months ended June 30, 2025, showing significant growth in revenue and gross profit, a turnaround to net profit, but no interim dividend declared | Indicator | Six Months Ended June 30, 2025 (Thousand HKD) | Six Months Ended June 30, 2024 (Thousand HKD) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 80,800 | 45,700 | 76.8% | | Gross Profit | 38,800 | 20,700 | 87.9% | | Net Profit | 12,500 | (10,100) | Turnaround to Profit | - The Board resolved not to declare any dividend for the six months ended June 30, 2025[3](index=3&type=chunk) [Condensed Consolidated Financial Statements](index=2&type=section&id=%E7%AE%80%E6%98%8E%E7%BB%BC%E5%90%88%E8%B4%A2%E5%8A%A1%E6%8A%A5%E8%A1%A8) [Condensed Consolidated Statement of Profit or Loss](index=2&type=section&id=%E7%AE%80%E6%98%8E%E7%BB%BC%E5%90%88%E6%8D%9F%E7%9B%8A%E8%A1%A8) The Group's condensed consolidated statement of profit or loss for the six months ended June 30, 2025, shows substantial revenue growth, significant gross profit increase, a turnaround to profit for the period, and basic earnings per share shifting from loss to profit | Indicator | Six Months Ended June 30, 2025 (Thousand HKD) | Six Months Ended June 30, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Operating Revenue | 80,802 | 45,694 | | Cost of Sales | (41,996) | (25,038) | | Gross Profit | 38,806 | 20,656 | | Administrative Expenses | (17,691) | (19,765) | | Finance Costs | (5,801) | (6,425) | | Profit/(Loss) Before Tax | 15,137 | (4,511) | | Income Tax Expense | (2,664) | (5,613) | | Profit/(Loss) for the Period | 12,473 | (10,124) | | Profit/(Loss) for the Period Attributable to Owners of the Company | 11,942 | (8,931) | | Basic Earnings/(Loss) Per Share (HK cents) | 1.08 | (0.81) | [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=3&type=section&id=%E7%AE%80%E6%98%8E%E7%BB%BC%E5%90%88%E6%8D%9F%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 Group's condensed consolidated statement of profit or loss and other comprehensive income for the six months ended June 30, 2025, shows that profit for the period, combined with other comprehensive income (mainly from exchange differences on overseas operations), resulted in a total comprehensive income turning from a loss to a profit | Indicator | Six Months Ended June 30, 2025 (Thousand HKD) | Six Months Ended June 30, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Profit/(Loss) for the Period | 12,473 | (10,124) | | Fair Value Gain on Equity Instrument Investments | — | 813 | | Exchange Differences Arising from Translation of Overseas Operations | 8,632 | (19,240) | | Total Other Comprehensive Income/(Expense) for the Period | 9,445 | (19,240) | | Total Comprehensive Income/(Expense) for the Period | 21,918 | (29,364) | | Total Comprehensive Income/(Expense) for the Period Attributable to Owners of the Company | 21,295 | (28,296) | [Condensed Consolidated Statement of Financial Position](index=4&type=section&id=%E7%AE%80%E6%98%8E%E7%BB%BC%E5%90%88%E8%B4%A2%E5%8A%A1%E7%8A%B6%E5%86%B5%E8%A1%A8) As of June 30, 2025, the Group's statement of financial position shows increases in non-current assets and current cash and cash equivalents, a rise in current liabilities, but also growth in total equity, reflecting a solid asset base and capital structure | Indicator | June 30, 2025 (Thousand HKD) | December 31, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Non-Current Assets | 404,973 | 389,322 | | Current Assets | 142,665 | 127,392 | | Current Liabilities | 130,680 | 110,942 | | Net Current Assets | 11,985 | 16,450 | | Total Equity | 274,723 | 252,805 | | Non-Current Liabilities | 142,235 | 152,967 | [Notes to the Condensed Consolidated Financial Statements](index=6&type=section&id=%E7%AE%80%E6%98%8E%E7%BB%BC%E5%90%88%E8%B4%A2%E5%8A%A1%E6%8A%A5%E8%A1%A8%E9%99%84%E6%B3%A8) [1. General Information](index=6&type=section&id=1.%20General%20Information) This section outlines Strongtech Environmental Holdings Limited's registration, listing, principal places of business, and core operations of its main subsidiaries, including wastewater treatment, biomass power generation, wood pellet sales, and IT services - The Company is an investment holding company, and its principal subsidiaries' businesses include the construction and operation of wastewater treatment facilities, construction and operation of biomass power plants, sales of wood pellets, and provision of information technology services[9](index=9&type=chunk) - The Company's shares are listed on The Stock Exchange of Hong Kong Limited, incorporated in the Cayman Islands, with its functional currency being HKD[9](index=9&type=chunk)[10](index=10&type=chunk) [2. Basis of Preparation](index=6&type=section&id=2.%20Basis%20of%20Preparation) The condensed consolidated financial statements are prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" issued by the HKICPA and the disclosure requirements of the HKEX Listing Rules - The condensed consolidated financial statements are prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" issued by the Hong Kong Institute of Certified Public Accountants and the applicable disclosure requirements of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[11](index=11&type=chunk) [3. Accounting Policies](index=6&type=section&id=3.%20Accounting%20Policies) The Group's condensed consolidated financial statements are primarily prepared on a historical cost basis, with accounting policies consistent with the previous year, and the application of HKFRS amendments in the current period has no significant impact on financial position and performance - The condensed consolidated financial statements are prepared on a historical cost basis, except for certain financial instruments measured at fair value[12](index=12&type=chunk) - The application of amendments to Hong Kong Financial Reporting Standards in this interim period has no significant impact on the Group's financial position and performance for the current and prior periods[13](index=13&type=chunk) [4. Operating Revenue](index=7&type=section&id=4.%20Operating%20Revenue) The Group's total operating revenue significantly increased by **76.8% to HKD 80.8 million**, primarily driven by strong growth in operational and construction services under service concession arrangements, and IT services, with a notable increase in contributions from Indonesia Operating Revenue by Type of Goods and Services | Type of Goods and Services | Six Months Ended June 30, 2025 (Thousand HKD) | Six Months Ended June 30, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Operational Services under Service Concession Arrangements | 40,096 | 17,757 | | Construction Services under Service Concession Arrangements | 17,794 | 9,416 | | Sales of Wood Pellets | 5,427 | 5,458 | | Information Technology Services | 8,389 | 3,932 | | Operating Revenue from Customer Contracts | 71,706 | 36,563 | | Imputed Interest Income from Receivables under Service Concession Arrangements | 9,096 | 9,131 | | **Total Operating Revenue** | **80,802** | **45,694** | Operating Revenue by Geographical Location | Geographical Location | Six Months Ended June 30, 2025 (Thousand HKD) | Six Months Ended June 30, 2024 (Thousand HKD) | | :--- | :--- | :--- | | China | 39,031 | 21,465 | | Indonesia | 41,771 | 24,229 | | **Total Operating Revenue** | **80,802** | **45,694** | [5. Segment Information](index=8&type=section&id=5.%20Segment%20Information) The Group's segment analysis by geographical location shows China and Indonesia as primary revenue sources, with the Indonesian segment achieving significant profit in the first half of 2025, while the Hong Kong segment continued to record a loss - The Group's operating segments include the construction and operation of wastewater treatment facilities, construction and operation of biomass power plants, sales of wood pellets, and provision of information technology services, with principal operating regions being Hong Kong, China, and Indonesia[17](index=17&type=chunk) Segment Revenue and Profit (Loss) | Geographical Location | Six Months Ended June 30, 2025 (Thousand HKD) | Six Months Ended June 30, 2024 (Thousand HKD) | | :--- | :--- | :--- | | **Segment Revenue** | | | | Hong Kong | — | — | | China | 39,031 | 21,465 | | Indonesia | 41,771 | 24,229 | | **Total** | **80,802** | **45,694** | | **Segment (Loss)/Profit** | | | | Hong Kong | (8,858) | (11,540) | | China | 13,688 | 11,403 | | Indonesia | 10,307 | (4,374) | | **Profit/(Loss) Before Tax** | **15,137** | **(4,511)** | [6. Other Income and Net Other Gains and Losses](index=9&type=section&id=6.%20Other%20Income%20and%20Net%20Other%20Gains%20and%20Losses) The Group's other income and net other gains and losses remained stable during the period, primarily comprising bank interest income and fair value gains on financial assets measured at fair value through profit or loss, but impacted by net exchange losses | Item | Six Months Ended June 30, 2025 (Thousand HKD) | Six Months Ended June 30, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Bank Interest Income | 312 | 306 | | Net Exchange (Loss)/Gain | (560) | 147 | | Fair Value Gain on Financial Assets Measured at Fair Value Through Profit or Loss | 513 | — | | **Total** | **977** | **1,023** | [7. Finance Costs](index=10&type=section&id=7.%20Finance%20Costs) The Group's finance costs decreased during the period, mainly due to reduced interest on borrowings and loans from related parties | Item | Six Months Ended June 30, 2025 (Thousand HKD) | Six Months Ended June 30, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Interest on Borrowings | 2,666 | 2,549 | | Interest on Loans from Related Parties | 3,123 | 3,437 | | Interest on Lease Liabilities | 12 | 11 | | **Total** | **5,801** | **6,425** | [8. Profit/(Loss) Before Tax](index=10&type=section&id=8.%20Profit%2F(Loss)%20Before%20Tax) This section lists the main expenses deducted/included in the calculation of profit/loss before tax, including staff costs, depreciation, and costs for construction and operational services | Item | Six Months Ended June 30, 2025 (Thousand HKD) | Six Months Ended June 30, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Staff Costs | 7,295 | 8,599 | | Depreciation of Property, Plant and Equipment | 2,731 | 2,673 | | Construction Service Costs | 15,545 | 8,313 | | Operational Service Costs | 20,055 | 7,163 | | Cost of Inventories Recognized as Expense | 5,979 | 6,446 | [9. Income Tax Expense](index=11&type=section&id=9.%20Income%20Tax%20Expense) The Group's income tax expense significantly decreased during the period, primarily due to a reduction in China corporate income tax and deferred tax, with some Chinese subsidiaries enjoying preferential tax rates | Item | Six Months Ended June 30, 2025 (Thousand HKD) | Six Months Ended June 30, 2024 (Thousand HKD) | | :--- | :--- | :--- | | China Corporate Income Tax | 2,915 | 3,802 | | Under-provision in Prior Years: China Corporate Income Tax | 101 | 809 | | Deferred Tax | (352) | 1,002 | | **Total** | **2,664** | **5,613** | - A Chinese subsidiary enjoys a **preferential tax rate of 15%** under relevant tax rules and regulations, valid until December 31, 2027[22](index=22&type=chunk) - The Group did not generate assessable profits in the Cayman Islands, British Virgin Islands, Hong Kong, and Indonesia, thus no income tax provision was made[21](index=21&type=chunk)[22](index=22&type=chunk) [10. Dividends](index=11&type=section&id=10.%20Dividends) The Company's Board of Directors has decided not to pay any dividends for this interim period - No dividends were paid, declared, or proposed during the interim period[23](index=23&type=chunk) [11. Earnings/(Loss) Per Share](index=12&type=section&id=11.%20Earnings%2F(Loss)%20Per%20Share) Basic earnings per share attributable to owners of the Company turned from a loss to a profit compared to the previous year, and diluted earnings per share are the same as basic earnings per share due to the absence of potential ordinary shares | Indicator | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Profit/(Loss) for Basic Earnings Per Share (Thousand HKD) | 11,942 | (8,931) | | Weighted Average Number of Ordinary Shares (Thousand Shares) | 1,107,300 | 1,107,300 | | Basic Earnings/(Loss) Per Share (HK cents) | 1.08 | (0.81) | - As there are no outstanding potential ordinary shares, diluted earnings/(loss) per share are the same as basic earnings/(loss) per share[24](index=24&type=chunk) [12. Receivables under Service Concession Arrangements](index=12&type=section&id=12.%20Receivables%20under%20Service%20Concession%20Arrangements) The Group's total receivables under service concession arrangements increased, with most being unbilled amounts, reflecting the nature of long-term contract assets | Item | June 30, 2025 (Thousand HKD) | December 31, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Receivables under Service Concession Arrangements | 373,976 | 364,193 | | Less: Portion Classified as Current Assets | (27,519) | (36,738) | | Portion Classified as Non-Current Assets | 346,457 | 327,455 | Ageing Analysis of Receivables under Service Concession Arrangements | Ageing | June 30, 2025 (Thousand HKD) | December 31, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Invoiced within 3 Months | 10,634 | 19,700 | | Unbilled | 363,342 | 344,493 | [13. Trade Receivables](index=13&type=section&id=13.%20Trade%20Receivables) The Group's trade receivables remained stable and are all within the 0 to 60-day credit period, indicating effective collection management | Item | June 30, 2025 (Thousand HKD) | December 31, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Trade Receivables | 2,500 | 2,324 | | Less: Provision for Credit Losses | (47) | (47) | | **Total** | **2,453** | **2,277** | - The Group's policy is to grant credit terms of **30 to 60 days**, and all trade receivables are within **0 to 60 days**[26](index=26&type=chunk) [14. Trade Payables](index=13&type=section&id=14.%20Trade%20Payables) The Group's trade payables increased, primarily concentrated within 0 to 60 days, but with some amounts exceeding 90 days | Ageing | June 30, 2025 (Thousand HKD) | December 31, 2024 (Thousand HKD) | | :--- | :--- | :--- | | 0 to 60 Days | 5,509 | 3,382 | | 61 to 90 Days | 4 | — | | Over 90 Days | 885 | 140 | | **Total** | **6,398** | **3,522** | [15. Amounts Due to Related Parties](index=14&type=section&id=15.%20Amounts%20Due%20to%20Related%20Parties) The Group's total amounts due to related parties increased, mainly non-trade in nature, with most classified as non-current liabilities | Item | June 30, 2025 (Thousand HKD) | December 31, 2024 (Thousand HKD) | | :--- | :--- | :--- | | A Related Company | 36,409 | 34,810 | | A Close Family Member of a Shareholder | 22,790 | 21,235 | | A Close Family Member of a Director | 29,019 | 19,500 | | A Shareholder | 21,850 | 26,350 | | **Total** | **110,068** | **101,895** | | Less: Amounts Due within One Year and Classified as Current Liabilities | (30,329) | (7,261) | | Amounts Classified as Non-Current Liabilities | 79,739 | 94,634 | [16. Borrowings](index=14&type=section&id=16.%20Borrowings) The Group's total borrowings slightly increased, consisting mainly of bank and other borrowings, with most classified as current liabilities due within one year | Item | June 30, 2025 (Thousand HKD) | December 31, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Bank Borrowings | 73,708 | 75,392 | | Other Borrowings | 28,472 | 24,825 | | **Total** | **102,180** | **100,217** | | Less: Amounts Due within One Year and Classified as Current Liabilities | (82,708) | (84,392) | | Amounts Classified as Non-Current Liabilities | 19,472 | 15,825 | - During the interim period, **HKD 2 million** in bank borrowings were repaid, and **HKD 3.557 million** in new other borrowings were obtained[28](index=28&type=chunk) [Management Discussion and Analysis](index=15&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%82%E8%AE%A8%E8%AE%BA%E4%B8%8E%E5%88%86%E6%9E%90) [Business Review](index=15&type=section&id=%E4%B8%9A%E5%8A%A1%E5%9B%9E%E9%A1%B1) The Group's business portfolio includes wastewater treatment, biomass power generation, data center operations, and wood pellet sales across China and Indonesia. During the period, Rugao wastewater treatment operated stably, with expansion slightly delayed; the Indonesian Bangka biomass power business fully operated and contributed significantly; data center management remained stable; and the wood pellet segment, while strategically important, saw slow progress in a proposed sale. Overall, operating revenue grew by **76.8%**, and net profit turned from loss to profit - The Rugao wastewater treatment facility maintained stable operations, with its expansion project (daily treatment capacity increasing from **40,000 tons to 50,000 tons**) slightly delayed due to environmental adjustments, now expected to be completed in the **second half of 2025**[29](index=29&type=chunk) - The Indonesian Bangka Island biomass power supply business commenced full operations in **late July 2024**, significantly contributing to the Group's operating revenue and profit under a **25-year fixed-price power purchase agreement**[30](index=30&type=chunk) - The Group's data center management business continued stable operations, providing information technology management services and making a positive contribution to overall financial performance[32](index=32&type=chunk) - The Group's wood pellet segment remains strategically important, but the proposed sale of **80% of the RPSL business** has been slow due to extended government approval processes, now expected to be completed in **2025**[32](index=32&type=chunk) | Indicator | Six Months Ended June 30, 2025 (Million HKD) | Six Months Ended June 30, 2024 (Million HKD) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 80.8 | 45.7 | 76.8% | | Net Profit | 12.5 | (10.1) | Turnaround to Profit | [Future Outlook](index=16&type=section&id=%E6%9C%AA%E6%9D%A5%E5%B1%95%E6%9C%9B) The Group expects to benefit from China's "14th Five-Year Plan" promoting industrial clusters and environmental governance, as well as Indonesia's continued support for biomass power through renewable energy policies. The Group is poised to capitalize on domestic and international policy opportunities for sustainable growth - Chinese development zones continue to advance the "14th Five-Year Plan," focusing on industrial cluster development, innovation capability enhancement, and environmental governance, creating a favorable environment for infrastructure operators like Rugao[34](index=34&type=chunk) - Recent policy developments in Indonesia regarding standardized renewable energy power purchase agreements and the **2060 Net Zero Emissions Energy Transition Roadmap** strengthen the position of biomass power in the national energy mix[34](index=34&type=chunk) - The Group is well-prepared to fully seize opportunities arising from domestic and international policy support, with all business segments performing excellently, laying a solid foundation for sustainable growth[35](index=35&type=chunk) [Financial Review](index=17&type=section&id=%E8%B4%A2%E5%8A%A1%E5%9B%9E%E9%A1%B1) The Group's financial performance significantly improved, with substantial growth in operating revenue and gross profit, reduced administrative and finance costs, ultimately achieving profit before tax and profit for the period attributable to owners of the Company, successfully reversing the loss from the same period last year [Operating Revenue](index=17&type=section&id=%E8%90%A5%E4%B8%9A%E6%94%B6%E5%85%A5) Total operating revenue for the period significantly increased by **76.8%**, primarily driven by operational revenue from the Bangka Island biomass power plant in Indonesia and construction revenue from the Rugao expansion project - Total operating revenue increased by **HKD 35.1 million or 76.8%** from **HKD 45.7 million** in the same period last year to **HKD 80.8 million** in the current period[36](index=36&type=chunk) - The increase was primarily due to higher operating revenue generated by the Bangka Island biomass power plant and increased construction revenue from the expansion and upgrade of wastewater treatment facilities for the Rugao expansion project[36](index=36&type=chunk) [Cost of Sales](index=17&type=section&id=%E9%94%80%E5%94%AE%E6%88%90%E6%9C%AC) Total cost of sales increased by **67.7%** year-on-year, mainly due to increased direct costs from the operation of the Bangka Island biomass power plant and construction costs from the Rugao expansion project - Total cost of sales increased by **HKD 17.0 million or 67.7%** from **HKD 25.0 million** in the same period last year to **HKD 42.0 million** in the current period[37](index=37&type=chunk) - Primarily due to increased direct costs from the operation of the Bangka Island biomass power plant and increased construction costs from the Rugao expansion project[37](index=37&type=chunk) [Gross Profit and Gross Margin](index=17&type=section&id=%E6%AF%9B%E5%88%A9%E5%8F%8A%E6%AF%9B%E5%88%A9%E7%8E%87) Gross profit significantly increased by **87.9%**, and gross margin improved from **45.2% to 48.0%**, reflecting enhanced profitability from business expansion and efficiency improvements - Gross profit increased by **HKD 18.2 million or 87.9%** from **HKD 20.7 million** in the same period last year to **HKD 38.8 million** in the current period[38](index=38&type=chunk) - Gross margin increased from **45.2%** in the same period last year to **48.0%** in the current period[38](index=38&type=chunk) [Other Income and Net Other Gains and Losses](index=17&type=section&id=%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5%E4%BB%A5%E5%8F%8A%E5%85%B6%E4%BB%96%E6%94%B6%E7%9B%8A%E5%8F%8A%E4%BA%8F%E6%8D%9F%E5%87%80%E9%A2%9D) Other income and net other gains for the period remained stable at **HKD 1.0 million** - Other income and net other gains remained stable at **HKD 1.0 million** in both the current period and the same period last year[39](index=39&type=chunk) [Administrative Expenses](index=17&type=section&id=%E8%A1%8C%E6%94%BF%E5%BC%80%E6%94%AF) Administrative expenses decreased by **10.5%** year-on-year, primarily due to lower utility costs and staff costs - Administrative expenses decreased by **HKD 2.1 million or 10.5%** from **HKD 19.8 million** in the same period last year to **HKD 17.7 million** in the current period[40](index=40&type=chunk) - Primarily due to reduced utility costs and staff costs in the current period[40](index=40&type=chunk) [Finance Costs](index=17&type=section&id=%E8%9E%8D%E8%B5%84%E6%88%90%E6%9C%AC) Finance costs decreased by **9.7%** year-on-year, mainly due to a lower weighted average interest rate on Bangka Island project loans and reduced amounts due to related parties - Finance costs decreased by **HKD 0.6 million or 9.7%** from **HKD 6.4 million** in the same period last year to **HKD 5.8 million** in the current period[41](index=41&type=chunk) - Primarily due to a decrease in the weighted average interest rate on loans borrowed for the Bangka Island project financing and reduced amounts due to related parties[41](index=41&type=chunk) [Profit Before Tax](index=17&type=section&id=%E9%99%A4%E7%A8%8E%E5%89%8D%E6%BA%A2%E5%88%A9) The Group successfully reversed its profit before tax from a loss in the same period last year to a **HKD 15.1 million** profit in the current period - The Group recorded a **profit before tax of HKD 15.1 million** in the current period, compared to a **loss before tax of HKD 4.5 million** in the same period last year[42](index=42&type=chunk) [Income Tax Expense](index=18&type=section&id=%E6%89%80%E5%BE%97%E7%A8%8E%E5%BC%80%E6%94%AF) Income tax expense decreased by **52.5%** year-on-year, mainly due to a lower corporate income tax rate in Rugao and reduced deferred income tax for Indonesian subsidiaries - Income tax expense decreased by **HKD 2.9 million or 52.5%** from **HKD 5.6 million** in the same period last year to **HKD 2.7 million** in the current period[43](index=43&type=chunk) - Primarily due to a decrease in the corporate income tax rate charged to Rugao and reduced deferred income tax charged to Indonesian subsidiaries[43](index=43&type=chunk) [Profit for the Period Attributable to Owners of the Company](index=18&type=section&id=%E6%9C%AC%E5%85%AC%E5%8F%B8%E6%8B%A5%E6%9C%89%E4%BA%BA%E5%BA%94%E4%BD%97%E6%9C%9F%E5%86%85%E6%BA%A2%E5%88%A9) Profit for the period attributable to owners of the Company turned from a loss in the same period last year to a **HKD 11.9 million** profit, reflecting a significant improvement in overall financial performance - Profit for the period attributable to owners of the Company was **HKD 11.9 million** in the current period, compared to a **loss of HKD 8.9 million** attributable to owners of the Company in the same period last year[44](index=44&type=chunk) [Liquidity, Financial and Capital Resources](index=18&type=section&id=%E6%B5%81%E5%8A%A8%E8%B5%84%E9%87%91%E3%80%81%E8%B4%A2%E5%8A%A1%E5%8F%8A%E8%B5%84%E6%9C%AC%E8%B5%84%E6%BA%90) The Group maintains a healthy liquidity position with significantly increased bank balances and cash, and a reduced gearing ratio. Key capital needs focus on project investments and facility construction, managed through prudent treasury policies - Principal liquidity and capital requirements involve project investments, construction and upgrade of wastewater treatment facilities, equipment purchases, and operating and maintenance costs[45](index=45&type=chunk) - As of June 30, 2025, the Group's bank balances and cash amounted to **HKD 52.0 million**, an increase of **48.3%** compared to December 31, 2024[45](index=45&type=chunk) [Bank and Other Borrowings](index=18&type=section&id=%E9%93%B6%E8%A1%8C%E5%8F%8A%E5%85%B6%E4%BB%96%E5%80%9F%E6%AC%BE) The Group's total utilized bank borrowings amounted to **HKD 73.7 million**, mostly repayable on demand or within one year, with additional borrowings from independent third parties and related parties at fair interest rates - As of June 30, 2025, total utilized bank borrowings amounted to **HKD 73.7 million**, of which **HKD 46.8 million** is repayable on demand and **HKD 26.9 million** is repayable within one year[46](index=46&type=chunk) - Outstanding bank borrowings are primarily denominated in **HKD and RMB** and bear interest at floating annual rates[46](index=46&type=chunk)[47](index=47&type=chunk) - Outstanding borrowings from independent third parties amounted to **HKD 28.5 million**, bearing interest at annual rates of **7.8% to 8%**[48](index=48&type=chunk) - Outstanding amounts due to related parties amounted to **HKD 110.1 million**, bearing interest at a fixed annual rate of **6%**[48](index=48&type=chunk) [Gearing Ratio](index=19&type=section&id=%E8%B5%84%E4%BA%A7%E8%B4%9F%E5%80%BA%E6%AF%94%E7%8E%87) The Group's gearing ratio decreased from **80.0%** as of December 31, 2024, to **77.3%** as of June 30, 2025, primarily due to increased retained earnings from net profit, strengthening equity - The gearing ratio decreased from **80.0%** as of December 31, 2024, to **77.3%** as of June 30, 2025[50](index=50&type=chunk) - The decrease was primarily due to the increase in the Group's retained earnings from higher net profit, strengthening the Group's equity[50](index=50&type=chunk) [Pledge of Assets](index=19&type=section&id=%E8%B5%84%E4%BA%A7%E6%8A%B5%E6%8A%BC) As of June 30, 2025, cash deposits of **HKD 32.2 million** were pledged as collateral for the Group's interest-bearing bank borrowings - As of June 30, 2025, cash deposits of **HKD 32.2 million** were pledged as collateral for the Group's interest-bearing bank borrowings[51](index=51&type=chunk) [Treasury Policy](index=19&type=section&id=%E5%BA%93%E5%8A%A1%E6%94%BF%E7%AD%96) The Group adopts a prudent financial management approach to its treasury policy, maintaining a healthy liquidity position throughout the period, with close monitoring by the Board to meet funding needs - The Group has adopted a prudent financial management approach to its treasury policy, maintaining a healthy liquidity position throughout the period[52](index=52&type=chunk) - The Board closely monitors the Group's liquidity position to ensure that the liquidity structure of its assets, liabilities, and other commitments can meet its funding requirements as they arise[52](index=52&type=chunk) [Capital Expenditure](index=19&type=section&id=%E8%B5%84%E6%9C%AC%E5%BC%80%E6%94%AF) Capital expenditure for the period amounted to **HKD 20.3 million**, primarily for the Rugao expansion project, Bangka Island project, and Indonesian biofuel pellet business, funded by the Group's financing activities - Capital expenditure for the period was **HKD 20.3 million** (same period last year: **HKD 8.7 million**), mainly comprising expenditures for the Rugao expansion project, Bangka Island project, and Indonesian biofuel pellet business[53](index=53&type=chunk) - Capital expenditure was funded by the Group's financing activities[53](index=53&type=chunk) [Foreign Exchange Risk](index=20&type=section&id=%E5%A4%96%E6%B1%87%E9%A3%8E%E9%99%A9) The Group faces limited foreign currency risk as most transactions of its Chinese and Indonesian subsidiaries are in their functional currencies, but HKD exchange rate fluctuations against RMB and IDR still impact consolidated financial position and are reflected in the exchange fluctuation reserve - Most transactions of the Group's Chinese and Indonesian member companies are conducted in their respective functional currencies, thus exposing the Group to only limited foreign currency risk[54](index=54&type=chunk) - Any appreciation or depreciation of the HKD against the RMB and IDR will impact the Group's consolidated financial position and be reflected in the exchange fluctuation reserve[54](index=54&type=chunk) - The Group does not have a foreign currency hedging policy and mitigates foreign exchange risk by converting cash and cash equivalents of overseas operating subsidiaries into HKD[54](index=54&type=chunk) [Contingent Liabilities](index=20&type=section&id=%E6%88%96%E7%84%B6%E8%B4%9F%E5%80%BA) As of June 30, 2025, the Group had no significant contingent liabilities, except for those disclosed in the "Arbitration" section - As of June 30, 2025, the Group had no significant contingent liabilities (December 31, 2024: nil), except for those disclosed in the "Arbitration" section[55](index=55&type=chunk) [Arbitration](index=20&type=section&id=%E4%BB%B2%E8%A3%81) The Group is involved in an arbitration initiated by Hengfa Water Development Co., Ltd. with the Shenzhen International Arbitration Court concerning a dispute over the sale of a **70% equity stake** in Haian Hengfa Wastewater Treatment Co., Ltd., with the award date delayed until before August 28, 2025 - Hengfa Water Development Co., Ltd. applied to the Shenzhen International Arbitration Court for arbitration against CGN Environmental Protection Industry Co., Ltd. regarding a dispute arising from the sale and purchase agreement for a **70% equity stake** in Haian Hengfa Wastewater Treatment Co., Ltd[56](index=56&type=chunk) - Hengfa demanded payment of the third installment of the consideration under the sale and purchase agreement, **RMB 13,633,200**, plus total compensation for breach of contract, exchange losses, and legal fees of approximately **RMB 2.2 million**, and all arbitration costs[56](index=56&type=chunk) - The arbitration is ongoing, and the award date has been delayed until before **August 28, 2025**[57](index=57&type=chunk) [Other Information](index=21&type=section&id=%E5%85%B6%E4%BB%96%E8%B5%84%E6%96%99) [Employees and Remuneration Policy](index=21&type=section&id=%E5%83%B1%E5%91%98%E5%8F%8A%E8%96%AA%E9%85%AC%E6%94%BF%E7%AD%96) As of June 30, 2025, the Group had **293 employees**, with staff costs of approximately **HKD 7.3 million**. Remuneration policy is based on experience, responsibility, and market conditions, linked to Group profit performance and individual performance. The company's previous share option scheme expired on September 4, 2024, with no outstanding share options - As of June 30, 2025, the Group had **293 employees** (December 31, 2024: **302 employees**)[58](index=58&type=chunk) - Staff costs (including directors' emoluments) for the period were approximately **HKD 7.3 million** (same period last year: **HKD 8.6 million**)[58](index=58&type=chunk) - Remuneration policy is determined based on experience, responsibilities, and general market conditions, with discretionary bonuses and other incentives linked to the Group's profit performance and individual performance[58](index=58&type=chunk) - The Company's previous share option scheme expired on **September 4, 2024**, and no share options remain outstanding[58](index=58&type=chunk) [Material Investments, Major Acquisitions and Disposals](index=21&type=section&id=%E9%87%8D%E8%A6%81%E6%8A%95%E8%B5%84%E3%80%81%E9%87%8D%E5%A4%A7%E6%94%B6%E8%B4%AD%E5%8F%8A%E5%87%BA%E5%94%AE%E4%BA%8B%E9%A1%B9) Except as disclosed in this announcement, the Group had no other material investments, major acquisitions, or disposals of assets, subsidiaries, associates, or joint ventures during the period - Except as disclosed in this announcement, the Group had no other material investments, major acquisitions, or disposals of assets, subsidiaries, associates, or joint ventures during the period[59](index=59&type=chunk) [Future Plans for Material Investments or Capital Assets](index=21&type=section&id=%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B5%84%E6%88%96%E8%B5%84%E6%9C%AC%E8%B5%84%E4%BA%A7%E7%9A%84%E6%9C%AA%E6%9D%A5%E8%AE%A1%E5%88%92) Except as disclosed in this announcement, as of the date of this announcement, the Group has no plans for other material investments or additions to capital assets - Except as disclosed in this announcement, as of the date of this announcement, the Group has no plans for other material investments or additions to capital assets[60](index=60&type=chunk) [Events After Reporting Period](index=21&type=section&id=%E6%8A%A5%E5%91%8A%E6%9C%9F%E5%90%8E%E4%BA%8B%E9%A1%B9) The Group had no significant events after the end of the reporting period and up to the date of this announcement - The Group had no significant events after the end of the reporting period and up to the date of this announcement[61](index=61&type=chunk) [Interim Dividend](index=21&type=section&id=%E4%B8%AD%E6%9C%9F%E8%82%A1%E6%81%AF) The Board of Directors resolved not to declare any interim dividend for the current period - At the Board meeting held on August 25, 2025, the Board resolved not to declare any interim dividend for the current period (same period last year: nil)[62](index=62&type=chunk) [Corporate Governance](index=21&type=section&id=%E4%BC%81%E4%B8%9A%E7%AE%A1%E6%B2%BB) The Company is committed to maintaining high standards of corporate governance and has applied and complied with the Corporate Governance Code set out in Appendix C1 of the Listing Rules throughout the period and up to the date of this announcement - The Company has applied and complied with the Corporate Governance Code set out in Appendix C1 of the Listing Rules throughout the period and up to the date of this announcement[63](index=63&type=chunk) [Directors' Securities Transactions](index=22&type=section&id=%E8%91%A3%E4%BA%8B%E8%BF%9B%E8%A1%8C%E8%AF%81%E5%88%B8%E4%BA%A4%E6%98%93) 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, and all Directors confirmed compliance with it 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, and following enquiry, all Directors confirmed compliance with the said code during the period[64](index=64&type=chunk) [Purchase, Sale or Redemption of Shares](index=22&type=section&id=%E8%B4%AD%E4%B9%B0%E3%80%81%E5%87%BA%E5%94%AE%E6%88%96%E8%B5%8E%E5%9B%9E%E8%82%A1%E4%BB%BD) During the period, 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 - During the period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[65](index=65&type=chunk) - As of June 30, 2025, the Company held no treasury shares[66](index=66&type=chunk) [Review by Audit Committee](index=22&type=section&id=%E7%94%B1%E5%AE%A1%E6%A0%B8%E5%A7%94%E5%91%98%E4%BC%9A%E5%AE%A1%E9%98%85) The Company's Audit Committee has reviewed the accounting principles and practices adopted by the Group, as well as the unaudited interim results and this interim report for the period - The Audit Committee, comprising three independent non-executive directors, has reviewed with the Company's management the accounting principles and practices adopted by the Group, as well as the unaudited interim results and this interim report for the period[67](index=67&type=chunk) [Publication of Interim Report](index=22&type=section&id=%E5%88%8A%E5%8F%91%E4%B8%AD%E6%9C%9F%E6%8A%A5%E5%91%8A) The Company's 2025 interim report will be published on the HKEX and Company websites in due course, and distributed to shareholders - The Company's 2025 interim report will be published on the HKEX website (http://www.hkexnews.hk) and the Company's website (http://www.ellhk.com) in due course, and will be dispatched and sent to shareholders[68](index=68&type=chunk) [Acknowledgements](index=22&type=section&id=%E8%87%B4%E8%B0%A2) The Chairman of the Board extends sincere gratitude to all shareholders, directors, and staff for their continuous support and efforts - The Chairman of the Board extends sincere gratitude to all shareholders and stakeholders for their continuous support[69](index=69&type=chunk) - Appreciation is extended to all directors and staff for their dedicated and tireless efforts for the Group during the period[69](index=69&type=chunk) [By Order of the Board](index=22&type=section&id=%E6%89%BF%E8%91%A3%E4%BA%8B%E4%BC%9A%E5%91%BD) This announcement is issued by the Board of Directors, represented by Chairman Zhou Andayuan, and lists the composition of the Board as of the announcement date - The Board comprises executive directors Zhou Andayuan (Chairman), Chen Kun (Chief Executive Officer), Chen Bailin, and Zhou Zhiren; non-executive director Su Jianren; and independent non-executive directors Wu Songen, Wu Wengong, and Liang Baoyi[71](index=71&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，概不就因本公告全部或任何部分內容而產生或因倚 賴該等內容而引致的任何損失承擔任何責任。 ANGELALIGN TECHNOLOGY INC. 時代天使科技有限公司 （於開曼群島註冊成立的有限公司） （股份代號：6699） 截至2025年6月30日止六個月期間的中期業績公告 時代天使科技有限公司（「本公司」，連同其附屬公司統稱「本集團」）董事（「董 事」）會（「董事會」）欣然公佈本集團截至2025年6月30日止六個月期間（「報告期 間」）的未經審核綜合中期業績，連同截至2024年6月30日止六個月期間的比較數 字，有關業績已經由董事會審核委員會（「審核委員會」）審閱。 於本公告中，「我們」、「我們的」及「時代天使」指本公司及（除非文義另有規定） 本集團。除文義另有所指外，本公告所用詞彙與日期為2021年6月3日的本公司招 股章程（「招股章程」）所界定者具有相同涵義。 業績概要 1 • 我們截至2025年6月30日止六個月期間的收入為161.4百萬美元，較截至 2024年6月30日止六個月期間 ...

[Unaudited Interim Results Announcement](index=1&type=section&id=Unaudited%20Interim%20Results%20Announcement) This report presents the unaudited interim financial results of the Group for the six months ended June 30, 2025, including financial statements, notes, and management's discussion and analysis [Condensed Consolidated Financial Statements](index=1&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section presents the unaudited condensed consolidated statement of profit or loss and other comprehensive income and statement of financial position for the six months ended June 30, 2025, comparing key financial performance and changes in revenue, profit, assets, and liabilities with prior periods [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) This statement details the Group's revenue, gross profit, other income, net gains/losses, profit before and after tax, and earnings per share for the six months ended June 30, 2025 Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the six months ended June 30): | Indicator | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Revenue | 146,197 | 154,735 | | Gross profit | 41,897 | 42,503 | | Other income | 2,978 | 2,965 | | Net other gains and losses | (10,724) | 2,784 | | Profit before income tax | 5,973 | 17,574 | | Income tax credit | 2,042 | 7,667 | | Profit for the period | 8,015 | 25,241 | | Profit for the period attributable to owners of the Company | 7,400 | 25,429 | | Basic earnings per share | 0.55 HK Cents | 1.90 HK Cents | | Diluted earnings per share | 0.55 HK Cents | 1.90 HK Cents | [Condensed Consolidated Statement of Financial Position](index=3&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) This statement presents the Group's assets, liabilities, and equity as of June 30, 2025, compared to December 31, 2024, highlighting changes in financial position Condensed Consolidated Statement of Financial Position (As of June 30, 2025 vs December 31, 2024): | Indicator | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Non-current assets | 143,038 | 137,465 | | Current assets | 657,818 | 647,538 | | Current liabilities | 157,240 | 143,133 | | Net current assets | 500,578 | 504,405 | | Non-current liabilities | 19,967 | 22,352 | | Total equity | 623,649 | 619,518 | [Notes to the Condensed Consolidated Financial Statements](index=5&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) This section provides essential supplementary information for understanding the financial statements, detailing the Group's business overview, basis of preparation, revenue, segment information, profit composition, taxation, dividends, earnings per share, receivables, payables, share capital changes, subsidiary disposals, and post-reporting period events [General Information](index=5&type=section&id=General%20Information) This section outlines the company's incorporation, listing status, and primary business segments, including jewellery, property, and photovoltaic power generation and energy storage - The Company was incorporated in the Cayman Islands and listed on the Main Board of the Hong Kong Stock Exchange on January 4, 2016, with principal businesses including: (a) jewellery (design, manufacture, and sale of high-end jewellery, metal refining and purification); (b) property (development, sale, leasing, and management of Foshan Integrated Industrial Centre project); and (c) photovoltaic power generation and energy storage (sales of photovoltaic power systems electricity and energy storage services)[7](index=7&type=chunk) [Basis of Preparation](index=5&type=section&id=Basis%20of%20Preparation) This section details the accounting standards and principles used for preparing the condensed consolidated financial statements, including the application of new or revised HKFRSs - The condensed consolidated financial statements are prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" issued by the Hong Kong Institute of Certified Public Accountants, using the historical cost basis, except for financial assets at fair value through profit or loss and equity instruments at fair value through other comprehensive income[9](index=9&type=chunk)[10](index=10&type=chunk) - The new or revised Hong Kong Financial Reporting Standards accounting standards first applied in this interim period, such as the amendments to HKAS 21 "Lack of Exchangeability", did not have a significant impact on the Group's financial position and performance[10](index=10&type=chunk)[11](index=11&type=chunk) [Revenue and Segment Information](index=7&type=section&id=Revenue%20and%20Segment%20Information) This section provides a detailed breakdown of the Group's revenue, segment results, assets, and liabilities across its jewellery, property, and photovoltaic power generation and energy storage businesses Revenue by Business Segment (For the six months ended June 30): | Business Segment | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Sales of jewellery products | 112,998 | 124,627 | | Sales of properties | 3,804 | 13,686 | | Sales of electricity | 5,400 | 1,743 | | Revenue from metal refining and purification processing services for jewellery | 14,844 | 3,648 | | Revenue from energy storage business services | 457 | — | | Property management fee income | 2,923 | 4,971 | | Rental income | 5,771 | 6,060 | | **Total Revenue** | **146,197** | **154,735** | Segment Revenue and Results (For the six months ended June 30): | Segment | 2025 Revenue (HK$ Thousand) | 2025 Results (HK$ Thousand) | 2024 Revenue (HK$ Thousand) | 2024 Results (HK$ Thousand) | | :--- | :--- | :--- | :--- | :--- | | Jewellery Business | 127,842 | 18,060 | 128,275 | 16,937 | | Property Business | 12,498 | 4,441 | 24,717 | 3,722 | | Photovoltaic Power Generation and Energy Storage Business | 5,857 | 2,737 | 1,743 | 794 | | **Consolidated** | **146,197** | **25,238** | **154,735** | **21,453** | Segment Assets and Liabilities (As of June 30, 2025 vs December 31, 2024): | Segment | 2025 Assets (HK$ Thousand) | 2025 Liabilities (HK$ Thousand) | 2024 Assets (HK$ Thousand) | 2024 Liabilities (HK$ Thousand) | | :--- | :--- | :--- | :--- | :--- | | Jewellery Business | 334,214 | 43,087 | 339,730 | 40,483 | | Property Business | 382,598 | 8,512 | 374,273 | 12,855 | | Photovoltaic Power Generation and Energy Storage Business | 68,216 | 41,037 | 63,786 | 39,432 | | **Consolidated Total** | **800,856** | **177,207** | **785,003** | **165,485** | [Profit Before Income Tax](index=13&type=section&id=Profit%20Before%20Income%20Tax) This section details the components contributing to the Group's profit before income tax, including depreciation, staff costs, auditor's remuneration, and cost of inventories for the six months ended June 30, 2025 Composition of Profit Before Income Tax (For the six months ended June 30): | Item | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Depreciation of property, plant and equipment | 3,760 | 2,399 | | Depreciation of right-of-use assets | 1,601 | 93 | | **Total Depreciation** | **5,361** | **2,492** | | Directors' emoluments | 4,137 | 4,146 | | Other staff salaries and benefits | 7,747 | 10,367 | | **Total Staff Costs** | **11,884** | **14,513** | | Auditor's remuneration | 250 | 240 | | Cost of inventories recognised as expense and properties held for sale | 101,909 | 110,398 | [Income Tax Credit](index=14&type=section&id=Income%20Tax%20Credit) This section outlines the Group's income tax credit components and applicable tax rates for Hong Kong, China, and land appreciation tax for the six months ended June 30, 2025 Income Tax Credit (For the six months ended June 30): | Item | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Hong Kong profits tax | 230 | (96) | | PRC tax | 939 | (3,564) | | Over-provision in prior years | (2,950) | (2,043) | | Deferred tax credit | (261) | (1,964) | | **Total Income Tax Credit** | **(2,042)** | **(7,667)** | - Hong Kong profits tax adopts a two-tiered system, with a tax rate of 8.25% for the first **HK$2 million** of assessable profits and 16.5% for the remaining profits. The corporate income tax rate for PRC subsidiaries is 25%. Land appreciation tax is levied at progressive rates from 30% to 60%[27](index=27&type=chunk)[28](index=28&type=chunk)[29](index=29&type=chunk) [Dividends](index=15&type=section&id=Dividends) This section details the dividends declared during the period and notes the absence of interim dividends, along with share repurchases by the Company Dividends Declared (For the six months ended June 30): | Item | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | | :--- | :--- | :--- | | 2024 Final dividend (HK$0.01 per share) | 13,351 | — | | 2023 Final dividend (HK$0.02 per share) | — | 26,790 | | **Dividends declared during the period** | **13,351** | **26,790** | - The Board did not declare any interim dividends for the six months ended June 30, 2024 and 2025. The Company repurchased and cancelled **1,167,000** of its own shares from the market during the first half of 2025[31](index=31&type=chunk) [Earnings Per Share](index=16&type=section&id=Earnings%20Per%20Share) This section presents the calculation of basic and diluted earnings per share, noting the impact of share repurchases and the absence of dilutive potential ordinary shares Earnings Per Share Calculation (For the six months ended June 30): | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Profit for the period attributable to owners of the Company (HK$ Thousand) | 7,400 | 25,429 | | Weighted average number of ordinary shares (Thousand Shares) | 1,335,615 | 1,340,443 | | **Basic earnings per share (HK Cents)** | **0.55** | **1.90** | | **Diluted earnings per share (HK Cents)** | **0.55** | **1.90** | - Basic earnings per share is the same as diluted earnings per share as there were no potential dilutive ordinary shares for the period ended June 30, 2025. The Company repurchased and cancelled **1,167,000** of its own shares during the first half of 2025[35](index=35&type=chunk) [Trade and Other Receivables](index=17&type=section&id=Trade%20and%20Other%20Receivables) This section provides a breakdown and ageing analysis of the Group's trade and other receivables, including details on impairment loss reversals and write-offs Trade and Other Receivables (As of June 30, 2025 vs December 31, 2024): | Item | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Trade receivables (net of allowance) | 60,410 | 45,453 | | Other receivables, prepayments and deposits | 12,035 | 14,931 | | Amount due from a joint venture | 1,368 | 1,435 | | **Total** | **73,813** | **61,819** | - The Group reversed impairment losses of approximately **HK$344,000** in the first half of 2025 under the expected credit loss model, primarily due to the settlement of relevant trade receivables. Concurrently, approximately **HK$19,552,000** of trade receivables were written off[36](index=36&type=chunk)[37](index=37&type=chunk) Ageing Analysis of Trade Receivables (As of June 30, 2025 vs December 31, 2024): | Ageing | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | 0 to 30 days | 21,142 | 12,306 | | 31 to 60 days | 15,962 | 9,449 | | 61 to 180 days | 19,017 | 19,252 | | 181 to 365 days | 4,289 | 4,446 | | **Total** | **60,410** | **45,453** | [Trade and Other Payables](index=18&type=section&id=Trade%20and%20Other%20Payables) This section provides a breakdown and ageing analysis of the Group's trade and other payables as of June 30, 2025, compared to December 31, 2024 Trade and Other Payables (As of June 30, 2025 vs December 31, 2024): | Item | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Trade payables | 32,386 | 28,388 | | Accruals and other payables | 17,687 | 17,248 | | **Total** | **50,073** | **45,636** | Ageing Analysis of Trade Payables (As of June 30, 2025 vs December 31, 2024): | Ageing | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | 0 to 60 days | 14,270 | 10,671 | | 61 to 90 days | 5,856 | 1,798 | | Over 90 days | 12,260 | 15,919 | | **Total** | **32,386** | **28,388** | [Share Capital](index=19&type=section&id=Share%20Capital) This section details the Company's issued and fully paid share capital, including the number of ordinary shares and the impact of share repurchases during the period Issued and Fully Paid Share Capital (As of June 30, 2025 vs December 31, 2024): | Item | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Nominal value of ordinary shares | 4,450 | 4,454 | | Number of ordinary shares | 1,335,078,000 | 1,336,245,000 | - For the six months ended June 30, 2025, the Company repurchased and cancelled **1,167,000** of its own shares from the market at a total cost of **HK$212,000**, with an average price of **HK$0.182**[43](index=43&type=chunk) [Disposal of a Subsidiary](index=20&type=section&id=Disposal%20of%20a%20Subsidiary) This section reports the Company's disposal of its entire equity interest in Foshan Huaguanhui Property Management Co., Ltd. in April 2024, including the consideration and gain on disposal - The Company disposed of its entire equity interest in Foshan Huaguanhui Property Management Co., Ltd. in April 2024 for a consideration of approximately **RMB3,670,000** (approximately **HK$3,958,000**), resulting in a gain on disposal of **HK$2,827,000**[44](index=44&type=chunk)[46](index=46&type=chunk) [Events After the Reporting Period](index=22&type=section&id=Events%20After%20the%20Reporting%20Period%20%28Notes%29) This section discloses significant events occurring after the reporting period, including a proposed privatization by the controlling shareholder and the acquisition of a golf club membership - Controlling shareholder Immaculate Diamonds Limited proposed to privatize the Company by way of a scheme of arrangement and delist its shares from the Stock Exchange. The deadline for dispatching the scheme document has been extended to on or before September 19, 2025[48](index=48&type=chunk) - The Group agreed to acquire a Hong Kong Golf Club membership for **HK$13.5 million** on July 16, 2025[48](index=48&type=chunk) [Management Discussion and Analysis](index=23&type=section&id=Management%20Discussion%20and%20Analysis) This section provides comprehensive operational insights for investors, analyzing the Group's business segment performance, market challenges, future strategies, financial condition, liquidity, capital structure, risk management, and corporate governance [Business Outlook and Future Prospects](index=23&type=section&id=Business%20Outlook%20and%20Future%20Prospects) This section outlines the Group's strategic direction and market expectations for its jewellery, property, and photovoltaic power generation and energy storage businesses - The Group's principal businesses include the design, manufacture, and sale of high-end jewellery; property development, sale, and leasing of the Foshan Integrated Industrial Centre project; and sales of photovoltaic power systems electricity and energy storage services[49](index=49&type=chunk) [Jewellery Business](index=23&type=section&id=Jewellery%20Business%20Outlook) This section discusses the challenges faced by the jewellery business, including macroeconomic factors and high gold prices, and outlines strategies for market expansion and product development - The jewellery business faces challenges from global macroeconomic weakness, geopolitical tensions, record-high gold prices, and high US tariffs, leading to dampened customer purchasing sentiment and an unpronounced recovery in the Chinese market[50](index=50&type=chunk) - The Group actively participates in Hong Kong and overseas exhibitions, visits overseas customers to secure orders, and plans to strengthen R&D for market-competitive jewellery designs, focusing on developing overseas markets[50](index=50&type=chunk)[51](index=51&type=chunk) [Property Business](index=24&type=section&id=Property%20Business%20Outlook) This section addresses the weak sentiment in China's industrial property market, indicating no new development projects and future revenue reliance on existing unit sales and management fees - Given the weak sentiment in the Chinese industrial property market, the Group currently has no plans for new property development projects, with future revenue primarily relying on the sale of remaining industrial units and parking spaces, as well as management service income[53](index=53&type=chunk) [Photovoltaic Power Generation and Energy Storage Business](index=24&type=section&id=Photovoltaic%20Power%20Generation%20and%20Energy%20Storage%20Business%20Outlook) This section highlights the expansion of the Group's photovoltaic and energy storage projects in China, detailing increased capacity and generation, and forecasts future demand growth - As of June 30, 2025, the Group completed grid connection for **15** photovoltaic projects in China, with a total maximum capacity of approximately **16,953 kW** and power generation of approximately **7,800,000 kWh** (compared to 10 projects, **8,643 kW**, and **3,000,000 kWh** in the same period of 2024)[55](index=55&type=chunk) - Three energy storage power stations have been built and put into operation, with a total maximum capacity of approximately **4,831 kW** and power generation of approximately **1,000,000 kWh**[55](index=55&type=chunk) - Demand for photovoltaic power generation is expected to increase in the future, benefiting from strategic support from the Chinese government, technological advancements, and cost reductions, despite intense market competition[56](index=56&type=chunk) [Privatisation of the Company](index=25&type=section&id=Privatisation%20of%20the%20Company) This section details the proposed privatization of the Company by its controlling shareholder, including the scheme of arrangement, cash payment for shares, and delisting from the Stock Exchange - Controlling shareholder Immaculate Diamonds Limited proposed to privatize the Company by way of a scheme of arrangement, involving the cancellation of scheme shares for cash consideration and the withdrawal of the shares' listing on the Stock Exchange[57](index=57&type=chunk) - The Company has applied to extend the deadline for dispatching the scheme document to on or before September 19, 2025, and is preparing to submit relevant documents to the Grand Court to seek approval for the scheme[58](index=58&type=chunk) [Financial Review](index=26&type=section&id=Financial%20Review) This section provides a detailed analysis of the Group's financial performance, including revenue, gross profit, other income, expenses, and profit for the period, highlighting key drivers and changes - For the six months ended June 30, 2025, total revenue was approximately **HK$146.2 million**, a **5.5% decrease** compared to the same period in 2024, primarily due to reduced revenue from the jewellery and property businesses, partially offset by significant growth in the photovoltaic power generation and energy storage business[61](index=61&type=chunk) [Overall Revenue](index=26&type=section&id=Overall%20Revenue%20Breakdown) This section provides a detailed breakdown of the Group's total revenue by business segment and geographical region, highlighting key changes and contributing factors Overall Revenue by Business Segment (For the six months ended June 30): | Business Segment | 2025 (HK$ Thousand) | Percentage (%) | 2024 (HK$ Thousand) | Percentage (%) | Change (HK$ Thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Jewellery Business | 127,842 | 87.4 | 128,275 | 82.9 | (433) | (0.3) | | Property Business | 12,498 | 8.6 | 24,717 | 16.0 | (12,219) | (49.4) | | Photovoltaic Power Generation and Energy Storage Business | 5,857 | 4.0 | 1,743 | 1.1 | 4,114 | 236.0 | | **Total** | **146,197** | **100.0** | **154,735** | **100.0** | **(8,538)** | **(5.5)** | Overall Revenue by Region (For the six months ended June 30): | Region | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | Change (HK$ Thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Hong Kong | 81,482 | 95,579 | (14,097) | (14.7) | | Dubai | 24,849 | 27,299 | (2,450) | (9.0) | | China | 39,866 | 31,857 | 8,009 | 25.1 | | **Total** | **146,197** | **154,735** | **(8,538)** | **(5.5)** | - The decrease in revenue from Hong Kong and Dubai was primarily due to weak consumer sentiment caused by macroeconomic challenges and a decline in jewellery product sales. The increase in revenue from China was mainly attributable to growth in jewellery metal refining and purification processing services income and the expansion of the photovoltaic power generation and energy storage business[65](index=65&type=chunk) [Gross Profit and Gross Margin](index=28&type=section&id=Gross%20Profit%20and%20Gross%20Margin%20Analysis) This section analyzes the Group's gross profit and gross margin by business segment, explaining the factors influencing changes in profitability, including sales mix and cost fluctuations Gross Profit and Gross Margin by Business Segment (For the six months ended June 30): | Business Segment | 2025 Gross Profit (HK$ Thousand) | 2025 Gross Margin (%) | 2024 Gross Profit (HK$ Thousand) | 2024 Gross Margin (%) | Gross Profit Change (HK$ Thousand) | Gross Profit Change (%) | Gross Margin Change (percentage points) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Jewellery Business | 32,033 | 25.1 | 33,190 | 25.9 | (1,157) | (3.5) | (0.8) | | Property Business | 6,825 | 54.6 | 8,265 | 33.4 | (1,440) | (17.4) | 21.2 | | Photovoltaic Power Generation and Energy Storage Business | 3,039 | 51.9 | 1,048 | 60.0 | 1,991 | 190.0 | (8.1) | | **Total** | **41,897** | **28.7** | **42,503** | **27.5** | **(606)** | **(1.4)** | **1.2** | - Overall gross profit decreased by **1.4%** to **HK$41.9 million**, but the overall gross margin increased by **1.2 percentage points** to **28.7%**, primarily due to an increase in the property business gross margin resulting from reduced property sales (which have relatively lower profit margins)[66](index=66&type=chunk)[67](index=67&type=chunk) - The gross margin for the jewellery business decreased by **0.8 percentage points** to **25.1%**, mainly offset by record-high gold prices for finished jewellery products sold and lower-margin metal refining and processing services revenue. The gross margin for the property business significantly increased by **21.2 percentage points** to **54.6%**, primarily due to reduced property sales. The gross margin for the photovoltaic power generation and energy storage business decreased by **8.1 percentage points** to **51.9%**, mainly due to the dilutive effect of the lower gross margin from the energy storage business commenced in the second half of 2024[70](index=70&type=chunk)[74](index=74&type=chunk)[76](index=76&type=chunk) [Other Income](index=32&type=section&id=Other%20Income) This section reports the Group's other income for the period, primarily consisting of bank deposit interest income, which remained consistent with the prior year - For the six months ended June 30, 2025, other income was approximately **HK$3.0 million**, similar to the same period last year, mainly comprising bank deposit interest income[77](index=77&type=chunk) [Net Other Gains and Losses](index=32&type=section&id=Net%20Other%20Gains%20and%20Losses) This section explains the shift from a net gain in 2024 to a net loss in 2025, primarily due to fair value changes in financial assets and the absence of a gain from subsidiary disposal - Net other gains and losses turned from a gain of **HK$2.8 million** in the same period of 2024 to a loss of **HK$10.7 million** in the same period of 2025, mainly due to net fair value changes losses on financial assets at fair value through profit or loss (including realised and unrealised losses on gold futures contracts) and the absence of a gain from the disposal of a subsidiary in the same period of 2024[78](index=78&type=chunk) [Write-down of Properties Held for Sale](index=32&type=section&id=Write-down%20of%20Properties%20Held%20for%20Sale) This section reports a write-down of properties held for sale due to the continued downturn in the Chinese industrial property market - For the six months ended June 30, 2025, a write-down of properties held for sale of approximately **HK$2.7 million** was recognised due to the continued sluggishness in the Chinese industrial property market[79](index=79&type=chunk) [Selling and Distribution Costs](index=32&type=section&id=Selling%20and%20Distribution%20Costs) This section notes a decrease in selling and distribution costs, primarily attributed to enhanced control over sales expenses in the jewellery business - Selling and distribution costs decreased by **18.3%** to **HK$5.8 million**, mainly due to enhanced control over sales expenses in the jewellery business[80](index=80&type=chunk) [General and Administrative Expenses](index=33&type=section&id=General%20and%20Administrative%20Expenses) This section reports a reduction in general and administrative expenses, primarily due to improved control over administrative costs in both the jewellery and property businesses - General and administrative expenses decreased by **15.4%** to **HK$19.2 million**, mainly due to enhanced control over administrative expenses in both the jewellery and property businesses[81](index=81&type=chunk) [Finance Costs](index=33&type=section&id=Finance%20Costs) This section indicates that finance costs remained consistent with the prior year, primarily comprising bank loan interest for the photovoltaic power generation and energy storage business - Finance costs were approximately **HK$0.8 million**, similar to the same period last year, mainly comprising bank loan interest for the photovoltaic power generation and energy storage business[82](index=82&type=chunk) [Share of Results of a Joint Venture](index=33&type=section&id=Share%20of%20Results%20of%20a%20Joint%20Venture) This section reports a significant increase in the share of profit from a joint venture, reflecting the Group's 50% equity interest in the photovoltaic power generation entity - The share of profit from a joint venture (Zhaoqing Shunzhiguang Power Technology Co., Ltd.) increased by **250%** to **HK$21,000**, reflecting the Group's 50% equity interest in the photovoltaic power generation business entity[83](index=83&type=chunk) [Income Tax Credit](index=33&type=section&id=Income%20Tax%20Credit%20%28Financial%20Review%29) This section notes a decrease in income tax credit, primarily due to the absence of a significant reversal of prior year PRC tax over-provision in the current period - Income tax credit decreased by **74.0%** to **HK$2.0 million**, mainly due to a substantial reversal of prior year PRC tax over-provision in the same period of 2024, which was absent in the same period of 2025[84](index=84&type=chunk) [Profit for the Period](index=33&type=section&id=Profit%20for%20the%20Period%20%28Financial%20Review%29) This section reports a significant decrease in profit for the period, attributed to the combined impact of various financial factors discussed previously - Profit for the period decreased by **68.3%** to **HK$8.0 million**, primarily due to the combined effect of the aforementioned factors[85](index=85&type=chunk) [Financial Assets at Fair Value Through Profit or Loss](index=34&type=section&id=Financial%20Assets%20at%20Fair%20Value%20Through%20Profit%20or%20Loss) This section discusses the Group's use of gold and silver futures contracts to hedge inventory price fluctuations, detailing realised and unrealised losses and their impact on cash flow - The Group entered into gold and silver futures contracts (short positions) to hedge against the risk of fluctuations in inventory gold prices. For the six months ended June 30, 2025, realised losses of approximately **HK$7.4 million** and unrealised losses of approximately **HK$3.9 million** were recorded on gold futures contracts, along with unrealised losses of approximately **HK$0.6 million** on silver futures contracts[86](index=86&type=chunk) - The Company considers futures contracts to be an inherent measure commonly adopted in the industry to stabilise inventory costs, and their realised and unrealised losses are not expected to have a significant impact on cash flow and operations[87](index=87&type=chunk) [Liquidity and Financial Resources](index=34&type=section&id=Liquidity%20and%20Financial%20Resources) This section provides an overview of the Group's liquidity and financial resources, including current assets, liabilities, ratios, bank balances, and capital commitments Liquidity and Financial Resources Overview (As of June 30, 2025 vs December 31, 2024): | Indicator | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Current assets | 657,800 | 647,500 | | Current liabilities | 157,200 | 143,100 | | Current Ratio | 4.2 | 4.5 | | Bank Deposits | 105,900 | 112,900 | | Cash and Cash Equivalents | 67,600 | 44,800 | | Total Interest-bearing Bank Loans | 32,800 | 31,900 | | Capital Gearing Ratio | 0.05 | 0.05 | - The Group possesses sufficient working capital to support its ongoing operations and business development. Certain buildings and properties held for sale are pledged to secure bank loans and provide guarantees for credit facilities and buyer mortgage loans[90](index=90&type=chunk)[92](index=92&type=chunk)[94](index=94&type=chunk) - As of June 30, 2025, capital commitments for plant and machinery were zero, primarily due to the completion of photovoltaic power generation equipment installation[93](index=93&type=chunk) [Events After the Reporting Period](index=36&type=section&id=Events%20After%20the%20Reporting%20Period%20%28MD%26A%29) This section reiterates the controlling shareholder's privatization proposal and the Group's agreement to acquire a Hong Kong Golf Club membership after the reporting period - This section reiterates the controlling shareholder's proposed privatization and the Group's agreement to acquire a Hong Kong Golf Club membership on July 16, 2025[95](index=95&type=chunk) [Significant Acquisitions and Disposals of Subsidiaries and Associates](index=36&type=section&id=Significant%20Acquisitions%20and%20Disposals%20of%20Subsidiaries%20and%20Associates) This section confirms that the Company did not undertake any significant acquisitions or disposals of subsidiaries and associates during the six months ended June 30, 2025 - For the six months ended June 30, 2025, the Company did not undertake any significant acquisitions or disposals of subsidiaries and associates[96](index=96&type=chunk) [Foreign Exchange Risk](index=37&type=section&id=Foreign%20Exchange%20Risk) This section assesses the Group's exposure to foreign exchange risk from HKD, USD, RMB, and AED, concluding that currency risk is not significant due to pegging arrangements - The Group is exposed to foreign exchange risk from HKD, USD, RMB, and AED, but as HKD and AED are pegged to USD, fluctuations in USD do not significantly impact operations and financial performance, thus currency risk is not material[97](index=97&type=chunk) [Employees and Remuneration Policy](index=37&type=section&id=Employees%20and%20Remuneration%20Policy) This section provides an overview of the Group's employee numbers and total staff costs, outlining its competitive remuneration, share option, and training policies to enhance performance Employee and Remuneration Overview (For the six months ended June 30): | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Total Employees | 100 | 133 | | Total Salaries and Related Costs (HK$ Thousand) | 11,900 | 14,500 | - The Group offers competitive remuneration packages, share option schemes, and training and development programs to encourage employees to enhance performance and adapt to industry developments[98](index=98&type=chunk) [Future Plans for Material Investments or Capital Assets](index=37&type=section&id=Future%20Plans%20for%20Material%20Investments%20or%20Capital%20Assets) This section states that as of June 30, 2025, the Board has not authorized any significant investment or capital asset acquisition plans, but will continue to seek opportunities to enhance business profitability - As of June 30, 2025, the Board had not authorised any plans for material investments or additions of capital assets, but will continue to seek opportunities to enhance the profitability of its ordinary business[99](index=99&type=chunk) [Interim Dividend](index=38&type=section&id=Interim%20Dividend) This section states that the Board resolved not to declare any interim dividend for the six months ended June 30, 2025, consistent with the prior year - The Board resolved not to declare any interim dividend for the six months ended June 30, 2025 (consistent with the same period in 2024)[100](index=100&type=chunk) [Corporate Governance Practices](index=38&type=section&id=Corporate%20Governance%20Practices) This section confirms the Company's compliance with the Corporate Governance Code, noting an exception regarding the separation of Chairman and CEO roles, which the Board believes benefits group management - The Company has complied with the Corporate Governance Code set out in Appendix C1 to the Listing Rules, except for Code Provision C.2.1 (separation of the roles of chairman and chief executive)[101](index=101&type=chunk) - Mr. Kan Kin Kwong serves as both the Chairman of the Board and Chief Executive Officer, an arrangement the Board believes benefits the Group's management and business development, and will be continuously reviewed[101](index=101&type=chunk) [Standard of Conduct for Securities Transactions by Directors](index=38&type=section&id=Standard%20of%20Conduct%20for%20Securities%20Transactions%20by%20Directors) This section confirms that all Directors have complied with the Model Code for Securities Transactions by Directors of Listed Issuers for the six months ended June 30, 2025 - Following enquiry with all Directors, they have complied with the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 to the Listing Rules for the six months ended June 30, 2025[102](index=102&type=chunk) [Pre-emptive Rights](index=39&type=section&id=Pre-emptive%20Rights) This section clarifies that the Company's articles of association and Cayman Islands law do not contain provisions for pre-emptive rights, thus not requiring pro-rata new share offerings to existing shareholders - The Company's memorandum and articles of association and the laws of the Cayman Islands do not contain provisions for pre-emptive rights, and do not require the Company to offer new shares pro-rata to existing shareholders[103](index=103&type=chunk) [Purchase, Sale or Redemption of Listed Securities](index=39&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20Listed%20Securities) This section reports the Company's repurchase and cancellation of 1,167,000 ordinary shares from the market during the six months ended June 30, 2025 - For the six months ended June 30, 2025, the Company repurchased and cancelled **1,167,000** ordinary shares from the market for a total consideration of **HK$200,000** (before expenses)[104](index=104&type=chunk) [Sufficiency of Public Float](index=39&type=section&id=Sufficiency%20of%20Public%20Float) This section confirms that the Company has maintained the sufficient public float required by the Listing Rules as of the latest practicable date prior to the announcement date - As of the latest practicable date prior to the date of this announcement, the Company has maintained a sufficient public float as required by the Listing Rules[105](index=105&type=chunk) [Audit Committee](index=39&type=section&id=Audit%20Committee) This section describes the composition and responsibilities of the Audit Committee, including its review of accounting principles, internal controls, risk management, and the interim results - The Audit Committee comprises three independent non-executive Directors, with Mr. Wong Wai Keung as Chairman. The Committee has reviewed and confirmed the accounting principles and practices adopted by the Group, and discussed audit, internal control, risk management, and financial reporting matters, including these interim results[106](index=106&type=chunk) [Auditor's Review](index=40&type=section&id=Auditor%27s%20Review) This section confirms that the Company's auditor, UHY Mac & Co., has reviewed the Group's unaudited interim results for the six months ended June 30, 2025, in accordance with HKSRE 2410 - UHY Mac & Co., the Company's auditor, has reviewed the Group's unaudited interim results for the six months ended June 30, 2025, in accordance with Hong Kong Standard on Review Engagements 2410[107](index=107&type=chunk) [Publication of Interim Results Announcement](index=40&type=section&id=Publication%20of%20Interim%20Results%20Announcement) This section states that the interim results announcement has been published on the Company's and Stock Exchange's websites, with the interim report to be dispatched to shareholders and published accordingly - This results announcement has been published on the Company's website (www.hkperjew.com.hk) and the Stock Exchange's website (www.hkexnews.hk). The interim report will be dispatched to shareholders and published on the aforementioned websites in due course[108](index=108&type=chunk) [Board of Directors](index=40&type=section&id=Board%20of%20Directors) This section lists the executive and independent non-executive directors comprising the Company's Board of Directors - The Company's executive Directors are Mr. Kan Kin Kwong, Ms. Shek Mei Chun, and Mr. Chung Chi Keung; the independent non-executive Directors are Dr. Ng Wang Pun, Ms. Ng Sin Kiu, and Mr. Wong Wai Keung[109](index=109&type=chunk)

執行董事 2025 中期報告 目錄 | | 公司資料 | | --- | --- | | | 管理層討論及分析 | | | 其他資料 | | | 綜合損益表 | | 21 | 綜合財務狀況表 | | 23 | 綜合權益變動表 | | | 簡明綜合現金流量表 | | | 未經審核中期財務報告附註 | | 38 | 釋義 | | 2 4 13 20 25 26 | | 天津建設發展集團股份公司 公司資料 Tianjin Construction Development Group Co., Ltd. (於中華人民共和國註冊成立的股份有限公司) 股份代號 : 2515 董事 審核委員會 趙匡華先生 （總裁） 李凱先生 （首席財務官） 關鳳丹女士 楊友華先生 倪拔群先生 蕭恕明先生 （主席） 嚴兵博士 劉金璐博士 非執行董事 王文彬先生 （主席） 獨立非執行董事 嚴兵博士 劉金璐博士 蕭恕明先生 監事 王玲女士（自2025年1月27日起辭任） 路曉亮先生 （主席） （自2025年1月27日起獲委任） 王磊先生 任飛宇先生 薪酬委員會 聯席公司秘書 李凱先生 呂穎一先生 (ACG, HKACG) 合規顧問 嚴兵博士 （ ...

截 至2025年6月30日 止 六 個 月 的 中 期 業 績 公 告 天 津 建 设 发 展 集 团 股 份 公 司（「本 公 司」，連 同 其 附 屬 公 司 統 稱「本 集 團」） 董 事（「董 事」）會（「董 事 會」）謹 此 宣 佈 本 集 團 截 至2025年6月30日 止 六 個 月 的未經審核綜合業績。本公告載有本公司2025年中期報告（「2025年中期報告」） 全文，並符合香港聯合交易所有限公司（「聯交所」）證券上市規則（「上市規則」） 有 關 中 期 業 績 初 步 公 告 附 載 資 料 的 相 關 規 定。 股 息 香 港 交 易 及 結 算 所 有 限 公 司 及 香 港 聯 合 交 易 所 有 限 公 司 對 本 公 告 的 內 容 概 不 負 責，對 其 準 確 性 或 完 整 性 亦 不 發 表 任 何 聲 明，並 明 確 表 示，概 不 就 因 本 公 告 全 部 或 任 何 部 分 內 容 而 產 生 或 因 依 賴 該 等 內 容 而 引 致 的 任 何 損 失 承 擔 任 何 責 任。 天津建设发展集团股份公司 Tianjin Construction Developm ...

[Financial Performance Summary](index=1&type=section&id=Financial%20Performance%20Summary) [Financial Performance Summary](index=1&type=section&id=Financial%20Performance%20Summary) Edianyun Limited's unaudited interim results for the first half of 2025 show an 8.2% increase in revenue to RMB 699.6 million, with profit and total comprehensive income surging by 177.6% to RMB 45.745 million, alongside significant growth in adjusted net profit and adjusted EBITDA Financial Data Overview (Six Months Ended June 30) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 699,640 | 646,888 | 8.2 | | Cost of sales | (411,700) | (369,917) | 11.3 | | Gross profit | 287,940 | 276,971 | 4.0 | | Profit before tax | 54,064 | 21,269 | 154.2 | | Profit and total comprehensive income for the period | 45,745 | 16,481 | 177.6 | | Adjusted net profit* | 51,179 | 30,714 | 66.6 | | Adjusted EBITDA* | 384,989 | 320,628 | 20.1 | *Note: Adjusted net profit is net profit after adding back share-based payment expenses; Adjusted EBITDA is EBITDA after adding back net finance costs, income tax expense, depreciation, amortization, and share-based payment expenses [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) In the first half of 2025, the company's revenue grew by 8.2% and gross profit by 4.0%, while sales and marketing, R&D, and general and administrative expenses all decreased, with general and administrative expenses seeing the largest reduction of 39.8%, leading to a significant 177.6% increase in profit and total comprehensive income for the period Key Profit or Loss Statement Data (Six Months Ended June 30) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Revenue | 699,640 | 646,888 | | Cost of sales | (411,700) | (369,917) | | Gross profit | 287,940 | 276,971 | | Sales and marketing expenses | (81,293) | (80,726) | | Research and development expenses | (29,978) | (32,987) | | General and administrative expenses | (42,622) | (70,830) | | Other income | 7,259 | 6,811 | | Net other gains and losses | (8,670) | (6,372) | | Impairment losses under expected credit loss model | (15,495) | (13,704) | | Finance costs | (63,077) | (57,894) | | Profit before tax | 54,064 | 21,269 | | Income tax expense | (8,319) | (4,788) | | Profit and total comprehensive income for the period | 45,745 | 16,481 | | Basic earnings per share (RMB) | 0.09 | 0.03 | | Diluted earnings per share (RMB) | 0.09 | 0.03 | [Condensed Consolidated Statement of Financial Position](index=3&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) [Condensed Consolidated Statement of Financial Position](index=3&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the company's total assets slightly increased to RMB 3,515.6 million, total liabilities slightly decreased to RMB 2,253.2 million, and total equity increased to RMB 1,262.3 million, with significant increases in right-of-use assets under non-current assets and trade and other receivables under current assets Key Balance Sheet Data (As of June 30, 2025 vs December 31, 2024) | Indicator | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | **Assets** | | | | Total non-current assets | 2,408,709 | 2,375,438 | | Total current assets | 1,106,858 | 1,138,377 | | **Total assets** | **3,515,567** | **3,513,815** | | **Equity and Liabilities** | | | | Total equity | 1,262,337 | 1,235,750 | | Total non-current liabilities | 900,983 | 897,603 | | Total current liabilities | 1,352,247 | 1,380,462 | | **Total liabilities** | **2,253,230** | **2,278,065** | | **Total equity and liabilities** | **3,515,567** | **3,513,815** | - Current assets were **RMB 245.4 million** less than current liabilities, but management believes there are sufficient financial resources for continuous operation in the next 12 months based on operating cash flow and financing plans[10](index=10&type=chunk) [Notes to the Condensed Consolidated Financial Statements](index=5&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) [1. General Information](index=5&type=section&id=1.%20General%20Information) The condensed consolidated financial statements are presented in Renminbi as both the functional and presentation currency - The condensed consolidated financial statements are presented in Renminbi, which is also the functional currency of the Company[9](index=9&type=chunk) [2. Basis of Preparation of Condensed Consolidated Financial Statements](index=5&type=section&id=2.%20Basis%20of%20Preparation%20of%20Condensed%20Consolidated%20Financial%20Statements) The condensed consolidated financial statements are prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" and the HKEX Listing Rules; despite current assets being less than current liabilities, management believes the company can continue as a going concern based on cash flow forecasts and available financial resources - The statements are prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" and the HKEX Listing Rules[10](index=10&type=chunk) - As of June 30, 2025, current assets were **RMB 245.4 million** less than current liabilities, but management expects sufficient financial resources to meet working capital needs for the next 12 months, thus preparing the statements on a going concern basis[10](index=10&type=chunk) [3. Accounting Policies](index=5&type=section&id=3.%20Accounting%20Policies) The condensed consolidated financial statements are prepared on a historical cost basis, except for financial instruments measured at fair value, and the application of IAS 21 (amended) "Lack of Exchangeability" had no material impact on financial position or performance - The condensed consolidated financial statements are prepared on a historical cost basis, except for certain financial instruments measured at fair value[11](index=11&type=chunk) - The revised International Accounting Standard 21 "Lack of Exchangeability" was first applied in the current period, but it had no material impact on the financial position and performance[12](index=12&type=chunk)[13](index=13&type=chunk) [4. Revenue and Segment Information](index=6&type=section&id=4.%20Revenue%20and%20Segment%20Information) The company's primary business is providing integrated office IT solutions and other services, with only one reportable segment; all revenue and non-current assets are derived from China, and total revenue for the first half of 2025 was RMB 699.6 million, an 8.2% increase, primarily driven by pay-per-use office IT integrated solutions - The company's main business is providing integrated office IT solutions and other services, with only one reportable segment[14](index=14&type=chunk) - All revenue and non-current assets are derived from China, with no single external customer accounting for more than **10%** of revenue[14](index=14&type=chunk) Revenue Composition (Six Months Ended June 30) | Revenue Source | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Pay-per-use office IT integrated solutions revenue | 625,893 | 576,875 | | Equipment sales | 67,915 | 64,077 | | SaaS and other services | 5,832 | 5,936 | | **Total** | **699,640** | **646,888** | - Within pay-per-use office IT integrated solutions revenue, **RMB 347.1 million** was recognized as lease income under IFRS 16, and **RMB 278.8 million** was from office IT technical subscription services[16](index=16&type=chunk) - Revenue recognition timing: equipment sales are recognized at a point in time, while office IT technical subscription services, SaaS, and other services are recognized over a period of time[17](index=17&type=chunk) [5. Other Income](index=9&type=section&id=5.%20Other%20Income) Other income for the first half of 2025 increased by 6.6% to RMB 7.259 million, primarily due to an increase in government grants Other Income Details (Six Months Ended June 30) | Income Source | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Bank interest income | 1,685 | 3,554 | | Installment sales receivables interest income | 362 | 598 | | Government grants | 4,046 | 1,293 | | Compensation income | 1,166 | 1,366 | | **Total** | **7,259** | **6,811** | - Government grants primarily came from Beijing and Chengdu local governments, supporting foreign-invested enterprises, high-tech enterprises, and employment stability[25](index=25&type=chunk) [6. Net Other Gains and Losses](index=9&type=section&id=6.%20Net%20Other%20Gains%20and%20Losses) Net other gains and losses for the first half of 2025 resulted in a loss of RMB 8.67 million, a 36.1% increase in loss compared to the same period last year, mainly due to increased write-off losses on leased computer equipment Net Other Gains and Losses Details (Six Months Ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Fair value changes in financial assets at fair value through profit or loss | 1,806 | 3,527 | | Subscription fees for financial assets at fair value through profit or loss | (718) | – | | Write-off losses on leased computer equipment | (8,580) | (11,218) | | Others | (1,178) | 1,319 | | **Total** | **(8,670)** | **(6,372)** | - Write-off losses on leased computer equipment refer to losses recognized when the company deems amounts unrecoverable from customers overdue for more than **6 months**[26](index=26&type=chunk) [7. Impairment Losses Under Expected Credit Loss Model, Net of Reversals](index=10&type=section&id=7.%20Impairment%20Losses%20Under%20Expected%20Credit%20Loss%20Model%2C%20Net%20of%20Reversals) Net impairment losses under the expected credit loss model for the first half of 2025 were RMB 15.495 million, a 13.1% increase year-on-year, primarily due to increased trade receivables driven by revenue growth Impairment Losses Details (Six Months Ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Trade receivables | 15,425 | 14,262 | | Other receivables | 70 | (558) | | **Total** | **15,495** | **13,704** | - The increase in impairment losses was mainly due to the increase in trade receivables resulting from the company's revenue growth[68](index=68&type=chunk) [8. Finance Costs](index=10&type=section&id=8.%20Finance%20Costs) Finance costs for the first half of 2025 were RMB 63.077 million, a 9.0% increase year-on-year, primarily due to increased financing scale driven by market expansion and higher equipment procurement, despite a decrease in financing interest rates Finance Costs Details (Six Months Ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Interest on borrowings | 46,539 | 43,531 | | Interest on lease liabilities | 16,538 | 14,363 | | **Total** | **63,077** | **57,894** | - The increase in finance costs was mainly due to the company's expanded market scale and increased equipment procurement, leading to an increase in financing scale[69](index=69&type=chunk) [9. Income Tax Expense](index=10&type=section&id=9.%20Income%20Tax%20Expense) Income tax expense for the first half of 2025 was RMB 8.319 million, a significant increase from RMB 4.788 million in the same period last year, primarily due to the recognition of deferred tax Income Tax Expense Details (Six Months Ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Current corporate income tax | 188 | 153 | | Deferred tax | 8,131 | 4,635 | | **Total** | **8,319** | **4,788** | - The increase in income tax expense was mainly due to the recognition of deferred tax[70](index=70&type=chunk) [10. Earnings Per Share](index=11&type=section&id=10.%20Earnings%20Per%20Share) Both basic and diluted earnings per share for the first half of 2025 were RMB 0.09, a substantial increase from RMB 0.03 in the same period last year Earnings Per Share Data (Six Months Ended June 30) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Profit for the period used to calculate basic earnings per share (RMB thousands) | 45,745 | 16,481 | | Weighted average number of ordinary shares used to calculate basic earnings per share | 529,106,424 | 577,795,367 | | Basic earnings per share (RMB) | 0.09 | 0.03 | | Diluted earnings per share (RMB) | 0.09 | 0.03 | - The **12,939,000** ordinary shares repurchased by the company in the first half of 2025 were not included in the calculation of basic earnings per share[29](index=29&type=chunk) - When calculating diluted earnings, some share options were not considered because their exercise price was higher than the average market price[30](index=30&type=chunk) [11. Dividends](index=11&type=section&id=11.%20Dividends) The Board of Directors decided not to pay dividends for the first half of 2025, consistent with the same period last year - No dividends were paid, declared, or proposed for the first half of 2025[31](index=31&type=chunk)[95](index=95&type=chunk) [12. Trade and Other Receivables and Prepayments](index=12&type=section&id=12.%20Trade%20and%20Other%20Receivables%20and%20Prepayments) As of June 30, 2025, total trade and other receivables and prepayments amounted to RMB 574.7 million, an increase from December 31, 2024, with current portion totaling RMB 410.4 million and non-current portion totaling RMB 164.4 million Trade and Other Receivables and Prepayments (As of June 30, 2025 vs December 31, 2024) | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Trade receivables (net of allowance for credit losses) | 137,162 | 134,520 | | Other receivables and prepayments | 437,579 | 380,284 | | **Total** | **574,741** | **514,804** | | Total current portion | 410,381 | 339,695 | | Total non-current portion | 164,360 | 175,109 | - Trade receivables aging analysis shows that receivables within **30 days** accounted for the largest portion, at **RMB 113.8 million**[32](index=32&type=chunk) [13. Trade and Other Payables](index=13&type=section&id=13.%20Trade%20and%20Other%20Payables) As of June 30, 2025, total trade and other payables amounted to RMB 126.0 million, an increase from December 31, 2024, primarily due to an increase in trade payables Trade and Other Payables (As of June 30, 2025 vs December 31, 2024) | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Trade payables | 63,508 | 34,907 | | Accrued salaries and welfare | 31,194 | 40,733 | | Others | 31,314 | 29,801 | | **Total** | **126,016** | **105,441** | - Trade payables aging analysis shows that payables within **12 months** accounted for the largest portion, at **RMB 49.305 million**[33](index=33&type=chunk) [14. Share Capital](index=14&type=section&id=14.%20Share%20Capital) As of June 30, 2025, the company's issued share capital was 533,987,643 shares, a decrease from January 1, 2025, primarily due to the repurchase and cancellation of 46,013,500 shares, partially offset by the exercise of share options which added 940,627 shares Share Capital Changes (As of June 30, 2025) | Item | Number of Shares | Amount (USD) | Amount (RMB thousands) | | :--- | :--- | :--- | :--- | | January 1, 2025 (audited) | 579,060,516 | 28,954 | 200 | | Exercise of share options | 940,627 | 47 | – * | | Shares repurchased and cancelled | (46,013,500) | (2,301) | (17) | | June 30, 2025 (unaudited) | 533,987,643 | 26,700 | 183 | - **46,013,500** shares were repurchased and cancelled, leading to a reduction in share capital[34](index=34&type=chunk) [Management Discussion and Analysis](index=15&type=section&id=Management%20Discussion%20and%20Analysis) [Business Review](index=15&type=section&id=Business%20Review) In the first half of 2025, the company solidified its position as an enterprise IT productivity partner by providing one-stop, reliable, and flexible office IT integrated solutions, achieving growth in active customers and in-service equipment, with primary revenue from pay-per-use office IT integrated solutions, equipment sales, and SaaS and other services - The company's mission is "making office IT easier," providing IT equipment with systems and software installed, along with managed IT services, through one-stop office IT solutions[35](index=35&type=chunk) - Competitive advantages include reliability (fastest nationwide service capability), flexibility (pay-per-use subscription model), and one-stop service[36](index=36&type=chunk) - Primary revenue sources include pay-per-use office IT integrated solutions, equipment sales, and SaaS and other services[35](index=35&type=chunk) - Pay-per-use office IT integrated solutions offer a comprehensive package including hardware, equipment configuration, deployment, operation and maintenance support, performance optimization, and equipment management[38](index=38&type=chunk) - Equipment sales include installment purchases of new equipment, subscription customers buying out used equipment, and selling used equipment through the online bidding platform "Yipaiji"[38](index=38&type=chunk) - The SaaS product "Yipandian" aims to help enterprise customers manage assets and inventory, charging an annual subscription fee[38](index=38&type=chunk) [Disclosure of Key Operating Data](index=17&type=section&id=Disclosure%20of%20Key%20Operating%20Data) As of June 30, 2025, active customer numbers and in-service equipment quantities continued to grow, with average monthly subscription fees per subscriber and average subscribed units per customer both increasing, while net cash retention rate remained high, indicating strong customer loyalty Key Operating Indicators (As of June 30) | Indicator | 2024 | December 31, 2024 | 2025 | | :--- | :--- | :--- | :--- | | Active customers | 49,737 | 51,024 | 52,357 | | Subscription customers | 48,705 | 50,180 | 51,769 | | Core customers | 26,436 | 27,529 | 27,709 | | SaaS customers | 2,118 | 2,164 | 2,043 | | In-service equipment | 1,329,721 | 1,374,200 | 1,480,599 | | Subscribed equipment | 1,307,215 | 1,352,687 | 1,464,452 | Key Operating Indicators (Six Months Ended June 30) | Indicator | 2024 | 2025 | | :--- | :--- | :--- | | Average monthly subscription fee per subscriber | 1,974 | 2,015 | | Average subscribed units per subscriber | 26.8 | 28.3 | | Number of equipment sold | 48,293 | 59,941 | | Net cash retention rate | 88.8% | 96.8% | | Net cash retention rate for pay-per-use office IT integrated solutions | 90.0% | 96.4% | - Equipment utilization rate remained high at **88.9%**, with idle equipment reduced through comprehensive inventory management measures[41](index=41&type=chunk) [Increase in Customer Numbers and Improvement in New Customer Quality](index=19&type=section&id=Increase%20in%20Customer%20Numbers%20and%20Improvement%20in%20New%20Customer%20Quality) In the first half of 2025, active customer numbers grew by 5.3% to 52,357, and core customer numbers increased by 4.8% to 27,709, with the proportion of in-service equipment for core customers rising to 86.5%, driven by more effective sales strategies, new product development, enhanced technological and scale advantages, and optimized service capabilities - Active customer numbers grew by **5.3%** to **52,357**, and core customer numbers increased by **4.8%** to **27,709**[42](index=42&type=chunk)[43](index=43&type=chunk) - The proportion of in-service equipment for core customers increased from **86.2%** in the first half of 2024 to **86.5%** in the first half of 2025[43](index=43&type=chunk) - Growth drivers include more effective sales strategies, new product development and flexible product strategies, technological and scale advantages (the "Xingyun" system), and optimized service capabilities[42](index=42&type=chunk) - With over **1.48 million** in-service equipment, increased customer density optimized engineer service efficiency and quality, leading to a stable increase in customer retention rate[43](index=43&type=chunk) [Impact of Macroeconomic Conditions and New Product Development](index=20&type=section&id=Impact%20of%20Macroeconomic%20Conditions%20and%20New%20Product%20Development) Facing the demand for cost reduction and efficiency improvement among SMEs amidst a "weak recovery" macroeconomic trend, the company launched its own-brand IT equipment in the first half of 2025, significantly reducing monthly subscription fees and successfully increasing the average subscribed units per old customer from **29** to **31** - The "weak recovery" macroeconomic environment led SMEs to seek cost reduction and efficiency improvement, putting pressure on average monthly subscription fees[44](index=44&type=chunk) - The company launched its own-brand IT equipment with lower monthly subscription fees to meet SME office IT needs and adapt to the transformation of PC demand in the AI era[44](index=44&type=chunk) - The combined effect of new products and sales strategies increased the average subscribed units per old customer from **29** to **31**[44](index=44&type=chunk) [AI Business Implementation and Active Exploration](index=20&type=section&id=AI%20Business%20Implementation%20and%20Active%20Exploration) Responding to the surge in AI hardware demand driven by the explosion of large AI models, the company launched its self-developed Edianyun AP series workstations, supporting local deployment of large models, which received enthusiastic market response and were in short supply, helping SMEs embrace the AI wave at low cost, with continued deep cultivation in the AI field planned for the future - Observing rising market demand for AI PC hardware, the company launched its self-developed Edianyun AP series workstations, supporting local deployment of large models like DeepSeek[45](index=45&type=chunk) - Upon launch, this product generated significant subscription demand, leading to supply shortages, and helped SMEs achieve local deployment of large models at the lowest cost[45](index=45&type=chunk) - The company plans to continue deep cultivation in the AI field, leveraging its main business to connect with SME customer groups and help them build their own AI capabilities[45](index=45&type=chunk) [Outlook](index=21&type=section&id=Outlook) The company will continue to focus on product enhancement, planning to launch key products in the second half of the year, optimize sales teams and strategies, increase R&D investment in remanufacturing technology, and sustain its ESG attributes; despite ongoing challenges for SME recovery, the company's business has returned to a growth trajectory, with office IT integrated solutions market penetration expected to continue increasing - The company will focus on product enhancement, planning to launch several key products in the second half of 2025, and actively respond to customer feedback to optimize its product matrix[46](index=46&type=chunk) - Sales team operations will be strengthened through recruitment and training of sales talent, and AI-based business analytics will be used to optimize sales processes and strategies[46](index=46&type=chunk) - Continued investment and R&D in remanufacturing technology will enhance digital intelligence capabilities, reduce costs, and provide a higher quality equipment experience[47](index=47&type=chunk) - The main business possesses ESG attributes, extending equipment lifespan through remanufacturing technology, reducing waste and carbon emissions[47](index=47&type=chunk) - Significant growth in active customers and in-service equipment indicates the company has overcome adverse factors and returned to a growth trajectory, with office IT integrated solutions market penetration expected to continue increasing[48](index=48&type=chunk) [Significant Events After the Reporting Period](index=22&type=section&id=Significant%20Events%20After%20the%20Reporting%20Period) [Significant Events After the Reporting Period](index=22&type=section&id=Significant%20Events%20After%20the%20Reporting%20Period) After the reporting period, between June 6 and July 9, 2025, the company subscribed to wealth management products totaling USD 26,534,700 to utilize surplus cash reserves, with an expected annualized return of 2%-4.5%, an investment period of no more than one year, and redeemable at any time - The company subscribed to cash management wealth management products totaling **USD 26,534,700** between June 6 and July 9, 2025[49](index=49&type=chunk) - These wealth management products have an expected annualized return of **2%-4.5%**, an investment period of no more than **one year**, are redeemable at any time, and carry low risk[84](index=84&type=chunk) - The subscription funds came from the Group's surplus cash reserves, aiming to enhance capital utilization and increase income from idle funds[49](index=49&type=chunk)[83](index=83&type=chunk) [Financial Review](index=22&type=section&id=Financial%20Review) [Revenue](index=22&type=section&id=Revenue) Total revenue for the first half of 2025 was RMB 699.6 million, an 8.2% year-on-year increase, primarily driven by pay-per-use office IT integrated solutions revenue, which accounted for 89.5% and grew by 8.5%, while equipment sales revenue increased by 6.0% and SaaS and other services revenue slightly decreased by 1.8% - Revenue for the first half of 2025 was **RMB 699.6 million**, an **8.2%** year-on-year increase, mainly due to increased revenue from pay-per-use office IT integrated solutions[50](index=50&type=chunk) Revenue Composition and Growth (Six Months Ended June 30) | Revenue Source | 2025 (RMB thousands) | Share (%) | 2024 (RMB thousands) | Share (%) | Growth (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Pay-per-use office IT integrated solutions | 625,893 | 89.5% | 576,875 | 89.2% | 8.5% | | Equipment sales | 67,915 | 9.7% | 64,077 | 9.9% | 6.0% | | SaaS and other services | 5,832 | 0.8% | 5,936 | 0.9% | -1.8% | | **Total** | **699,640** | **100.0%** | **646,888** | **100.0%** | **8.2%** | [Pay-per-use Office IT Integrated Solutions](index=23&type=section&id=Pay-per-use%20Office%20IT%20Integrated%20Solutions) In the first half of 2025, revenue from this business was RMB 625.9 million, an 8.5% year-on-year increase, primarily benefiting from effective sales strategies, improved sales efficiency, and rapid growth in customer numbers and average subscribed units per customer - Revenue increased by **8.5%** year-on-year to **RMB 625.9 million**[53](index=53&type=chunk) - Growth was mainly attributable to effective sales strategies, significant improvement in sales efficiency, and rapid growth in customer numbers and average subscribed units per customer[53](index=53&type=chunk) [Equipment Sales](index=23&type=section&id=Equipment%20Sales) In the first half of 2025, equipment sales revenue was RMB 67.915 million, a 6.0% year-on-year increase, primarily due to an increase in the volume of equipment sold - Revenue increased by **6.0%** year-on-year to **RMB 67.915 million**[54](index=54&type=chunk) - Growth was mainly due to an increase in the volume of equipment sold compared to the same period[54](index=54&type=chunk) [SaaS and Other Services](index=23&type=section&id=SaaS%20and%20Other%20Services) In the first half of 2025, SaaS and other services revenue was RMB 5.832 million, a 1.8% year-on-year decrease, primarily due to reduced system development revenue and external maintenance services - Revenue decreased by **1.8%** year-on-year to **RMB 5.832 million**[55](index=55&type=chunk) - The decrease was mainly due to reduced system development revenue and external maintenance services[55](index=55&type=chunk) [Cost of Sales](index=23&type=section&id=Cost%20of%20Sales) Cost of sales for the first half of 2025 was RMB 411.7 million, an 11.3% year-on-year increase, primarily due to increased equipment depreciation costs, with pay-per-use office IT integrated solutions accounting for the largest portion and growing by 12.3% - Cost of sales increased by **11.3%** year-on-year to **RMB 411.7 million**[56](index=56&type=chunk) - Primarily due to increased equipment depreciation costs[56](index=56&type=chunk) Cost of Sales Composition (Six Months Ended June 30) | Cost Source | 2025 (RMB thousands) | Share (%) | 2024 (RMB thousands) | Share (%) | | :--- | :--- | :--- | :--- | :--- | | Pay-per-use office IT integrated solutions | 338,890 | 82.3% | 301,701 | 81.6% | | Equipment sales | 70,613 | 17.2% | 66,963 | 18.1% | | SaaS and other services | 2,197 | 0.5% | 1,253 | 0.3% | | **Total** | **411,700** | **100.0%** | **369,917** | **100.0%** | [Pay-per-use Office IT Integrated Solutions](index=24&type=section&id=Pay-per-use%20Office%20IT%20Integrated%20Solutions) In the first half of 2025, the cost of sales for this business was RMB 338.9 million, a 12.3% year-on-year increase, primarily due to increased depreciation costs resulting from the growth in subscribed equipment - Cost of sales increased by **12.3%** year-on-year to **RMB 338.9 million**[57](index=57&type=chunk) - Mainly due to increased depreciation costs resulting from the growth in subscribed equipment[57](index=57&type=chunk) [Equipment Sales](index=24&type=section&id=Equipment%20Sales) In the first half of 2025, equipment sales cost of sales was RMB 70.613 million, a 5.5% year-on-year increase, primarily due to an increase in the volume of equipment sold - Cost of sales increased by **5.5%** year-on-year to **RMB 70.613 million**[58](index=58&type=chunk) - Mainly due to an increase in the volume of equipment sold compared to the same period[58](index=58&type=chunk) [Gross Profit and Gross Profit Margin](index=24&type=section&id=Gross%20Profit%20and%20Gross%20Profit%20Margin) Gross profit for the first half of 2025 increased by 4.0% to RMB 287.9 million, but the gross profit margin decreased from 42.8% to 41.2%, primarily due to increased depreciation costs for pay-per-use office IT integrated solutions, while the loss rate for equipment sales decreased - Gross profit increased by **4.0%** year-on-year to **RMB 287.9 million**[59](index=59&type=chunk) - Gross profit margin decreased from **42.8%** to **41.2%**[59](index=59&type=chunk) Gross Profit and Gross Profit Margin (Six Months Ended June 30) | Business Segment | 2025 Gross Profit (RMB thousands) | 2025 Gross Profit Margin (%) | 2024 Gross Profit (RMB thousands) | 2024 Gross Profit Margin (%) | | :--- | :--- | :--- | :--- | :--- | | Pay-per-use office IT integrated solutions | 287,003 | 45.9% | 275,174 | 47.7% | | Equipment sales | (2,698) | (4.0%) | (2,886) | (4.5%) | | SaaS and other services | 3,635 | 62.3% | 4,683 | 78.9% | | **Total Gross Profit / Total Gross Profit Margin** | **287,940** | **41.2%** | **276,971** | **42.8%** | [Pay-per-use Office IT Integrated Solutions](index=25&type=section&id=Pay-per-use%20Office%20IT%20Integrated%20Solutions) In the first half of 2025, gross profit for this business increased by 4.3% to RMB 287.0 million, but the gross profit margin decreased from 47.7% to 45.9%, primarily due to increased depreciation costs resulting from the growth in equipment numbers - Gross profit increased by **4.3%** year-on-year to **RMB 287.0 million**[62](index=62&type=chunk) - Gross profit margin decreased from **47.7%** to **45.9%**, mainly due to increased depreciation costs resulting from the growth in equipment numbers[62](index=62&type=chunk) [Equipment Sales](index=25&type=section&id=Equipment%20Sales) In the first half of 2025, equipment sales loss decreased by 6.5% to RMB 2.7 million, and the loss rate decreased from 4.5% to 4.0%, primarily due to the company adjusting its sales strategies and product categories based on market conditions - Equipment sales loss decreased by **6.5%** to **RMB 2.7 million**[63](index=63&type=chunk) - The loss rate decreased from **4.5%** to **4.0%**, mainly due to the company adjusting its sales strategies and product categories according to market conditions[63](index=63&type=chunk) [Research and Development Expenses](index=25&type=section&id=Research%20and%20Development%20Expenses) Research and development expenses for the first half of 2025 were RMB 30.0 million, a 9.1% year-on-year decrease, primarily due to lower cloud server costs and improved bargaining power - Research and development expenses decreased by **9.1%** year-on-year to **RMB 30.0 million**[64](index=64&type=chunk) - Mainly due to lower cloud server costs and improved bargaining power[64](index=64&type=chunk) [General and Administrative Expenses](index=26&type=section&id=General%20and%20Administrative%20Expenses) General and administrative expenses for the first half of 2025 were RMB 42.6 million, a significant 39.8% year-on-year decrease, primarily due to reduced share-based payment expenses and improved office efficiency through AI tools - General and administrative expenses significantly decreased by **39.8%** year-on-year to **RMB 42.6 million**[65](index=65&type=chunk) - Mainly due to reduced share-based payment expenses and improved overall office efficiency through the use of AI tools[65](index=65&type=chunk) [Other Income](index=26&type=section&id=Other%20Income) Other income for the first half of 2025 was RMB 7.3 million, a 6.6% year-on-year increase, primarily due to increased government grants from Beijing and Chengdu local governments supporting foreign-invested enterprises - Other income increased by **6.6%** year-on-year to **RMB 7.3 million**[66](index=66&type=chunk) - Mainly due to increased grants received from Beijing and Chengdu local governments to support foreign-invested enterprises during the period[66](index=66&type=chunk) [Other Gains and Losses](index=26&type=section&id=Other%20Gains%20and%20Losses) Net other gains and losses for the first half of 2025 resulted in a loss of RMB 8.7 million, a 36.1% increase in loss compared to the same period last year, primarily due to increased write-off losses on leased computer equipment - Net loss was **RMB 8.7 million**, a **36.1%** increase in loss compared to the same period last year[67](index=67&type=chunk) - Mainly due to increased write-off losses on leased computer equipment[67](index=67&type=chunk) [Impairment Losses Under Expected Credit Loss Model, Net of Reversals](index=26&type=section&id=Impairment%20Losses%20Under%20Expected%20Credit%20Loss%20Model%2C%20Net%20of%20Reversals) Net impairment losses under the expected credit loss model for the first half of 2025 were RMB 15.5 million, a 13.1% year-on-year increase, primarily due to increased trade receivables driven by revenue growth - Net impairment losses were **RMB 15.5 million**, an increase of **RMB 1.8 million** compared to the same period last year[68](index=68&type=chunk) - Mainly due to the increase in trade receivables resulting from the company's revenue growth[68](index=68&type=chunk) [Finance Costs](index=27&type=section&id=Finance%20Costs) Finance costs for the first half of 2025 were RMB 63.1 million, a 9.0% year-on-year increase, primarily due to expanded financing scale driven by market expansion and higher equipment procurement, despite a continuous decrease in financing interest rates - Finance costs increased by **9.0%** year-on-year to **RMB 63.1 million**[69](index=69&type=chunk) - Mainly due to the company's expanded market scale and increased equipment procurement, leading to an increase in the Group's financing scale, while financing interest rates continued to decline[69](index=69&type=chunk) [Income Tax Expense](index=27&type=section&id=Income%20Tax%20Expense) Income tax expense for the first half of 2025 was RMB 8.3 million, a significant increase from RMB 4.8 million in the same period last year, primarily due to the recognition of deferred tax - Income tax expense was **RMB 8.3 million**, an increase compared to **RMB 4.8 million** in the same period last year[70](index=70&type=chunk) - The tax expense recorded during the reporting period was mainly due to the recognition of deferred tax[70](index=70&type=chunk) [Profit and Total Comprehensive Income for the Period](index=27&type=section&id=Profit%20and%20Total%20Comprehensive%20Income%20for%20the%20Period) Profit and total comprehensive income for the first half of 2025 was RMB 45.7 million, a substantial 177.6% increase from RMB 16.5 million in the same period last year - Profit and total comprehensive income for the period was **RMB 45.7 million**, an increase of **RMB 29.3 million** compared to the same period last year[71](index=71&type=chunk) [Adjusted Profit (Non-IFRS Measure)](index=27&type=section&id=Adjusted%20Profit%20(Non-IFRS%20Measure)) Adjusted net profit for the first half of 2025 was RMB 51.179 million, a 66.6% year-on-year increase, primarily adjusted by adding back share-based payment expenses Adjusted Net Profit Reconciliation (Six Months Ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Profit and total comprehensive income for the period | 45,745 | 16,481 | | Add: Share-based payment expenses | 5,434 | 14,233 | | **Adjusted net profit** | **51,179** | **30,714** | [EBITDA and Adjusted EBITDA (Non-IFRS Measure)](index=28&type=section&id=EBITDA%20and%20Adjusted%20EBITDA%20(Non-IFRS%20Measure)) EBITDA for the first half of 2025 was RMB 379.6 million, and adjusted EBITDA was RMB 385.0 million, representing year-on-year increases of 23.9% and 20.1%, respectively EBITDA and Adjusted EBITDA Reconciliation (Six Months Ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Profit and total comprehensive income for the period | 45,745 | 16,481 | | Add: Net finance costs | 61,392 | 54,340 | | Add: Income tax expense | 8,319 | 4,788 | | Add: Depreciation | 263,860 | 230,581 | | Add: Amortization | 239 | 205 | | **EBITDA** | **379,555** | **306,395** | | Add: Share-based payment expenses | 5,434 | 14,233 | | **Adjusted EBITDA** | **384,989** | **320,628** | [Capital Management, Financing and Financial Policies](index=29&type=section&id=Capital%20Management%2C%20Financing%20and%20Financial%20Policies) [Capital Management, Financing and Financial Policies](index=29&type=section&id=Capital%20Management%2C%20Financing%20and%20Financial%20Policies) The company is committed to maintaining its ability to continue as a going concern and providing returns to shareholders, supporting business expansion and working capital needs through prudent financing and financial policies; as of June 30, 2025, cash and cash equivalents decreased, borrowings increased, and the gearing ratio improved - The company's capital management objective is to maintain its ability to continue as a going concern, provide returns to shareholders, and adjust its capital structure through issuing new shares, bonds, bank borrowings, and other means[74](index=74&type=chunk) - Prudent financing and financial policies are adopted to maintain sufficient cash flow to support business expansion, capital expenditures, and general working capital needs[74](index=74&type=chunk) [Cash Position](index=29&type=section&id=Cash%20Position) As of June 30, 2025, cash and cash equivalents were RMB 400.6 million, a decrease from RMB 556.7 million as of December 31, 2024 - Cash and cash equivalents decreased from **RMB 556.7 million** as of December 31, 2024, to **RMB 400.6 million** as of June 30, 2025[75](index=75&type=chunk) - Cash and cash equivalents are primarily denominated in Renminbi, Hong Kong Dollars, and US Dollars[75](index=75&type=chunk) [Borrowings](index=29&type=section&id=Borrowings) As of June 30, 2025, the company's total borrowings were RMB 1,488.6 million, with approximately RMB 892.9 million due within one year; the average borrowing balance increased by 7.7% year-on-year, and borrowing interest rates ranged from 2.15% to 12%, a decrease from the previous year - As of June 30, 2025, total borrowings were **RMB 1,488.6 million**[76](index=76&type=chunk) - Approximately **RMB 892.9 million** is due within **one year**[76](index=76&type=chunk) - The average balance of current and non-current borrowings was **RMB 1,552.7 million**, an increase of **7.7%** compared to the same period last year[76](index=76&type=chunk) - Borrowing interest rates ranged from **2.15%** to **12%**, a decrease from **3.15%** to **12%** in the same period last year[77](index=77&type=chunk) [Gearing Ratio](index=30&type=section&id=Gearing%20Ratio) As of June 30, 2025, the company's gearing ratio was 160.9%, an improvement from 168.5% as of December 31, 2024 - The gearing ratio decreased from **168.5%** as of December 31, 2024, to **160.9%** as of June 30, 2025[78](index=78&type=chunk) [Foreign Exchange and Exchange Rate Risk](index=30&type=section&id=Foreign%20Exchange%20and%20Exchange%20Rate%20Risk) The company primarily operates in China, with most income and expenses denominated in Renminbi, but some bank balances, financial assets, and liabilities are denominated in foreign currencies, exposing it to foreign exchange risk; currently, there is no hedging policy, but management continuously monitors the situation - The company primarily operates in China, with most income and expenses denominated in Renminbi[79](index=79&type=chunk) - Some bank balances, financial assets, and liabilities are denominated in foreign currencies, exposing the company to foreign exchange risk[79](index=79&type=chunk) - Currently, there is no foreign currency hedging policy, but management will monitor and consider future hedging measures[79](index=79&type=chunk) [Contingent Liabilities](index=30&type=section&id=Contingent%20Liabilities) As of June 30, 2025, the company had no significant contingent liabilities - As of June 30, 2025, the company had no significant contingent liabilities[80](index=80&type=chunk) [Pledge of Group Assets](index=30&type=section&id=Pledge%20of%20Group%20Assets) As of June 30, 2025, the company pledged leased computer equipment and right-of-use assets with a net book value of approximately RMB 1,562.6 million as collateral for bank borrowings and other financial institution financing - As of June 30, 2025, the company pledged leased computer equipment and right-of-use assets with a net book value of approximately **RMB 1,562.6 million** as collateral for bank borrowings and other financial institution financing[81](index=81&type=chunk) [Capital Expenditures](index=30&type=section&id=Capital%20Expenditures) Capital expenditures for the first half of 2025 were RMB 386.4 million, a decrease from RMB 426.0 million in the same period last year, primarily used for the acquisition of leased computer equipment and right-of-use assets, funded mainly by cash flow from customer subscriptions and borrowings - Capital expenditures for the first half of 2025 were **RMB 386.4 million**, a decrease from **RMB 426.0 million** in the same period last year[82](index=82&type=chunk) - Capital expenditures were primarily used for the acquisition of leased computer equipment (**RMB 177.7 million**) and right-of-use assets (**RMB 208.7 million**)[82](index=82&type=chunk) - Funds were primarily provided by cash flow from customer subscriptions, bank, and other borrowings[82](index=82&type=chunk) [Significant Investments Held](index=31&type=section&id=Significant%20Investments%20Held) [Significant Investments Held](index=31&type=section&id=Significant%20Investments%20Held) After the reporting period, between June 6 and July 9, 2025, the company subscribed to low-risk cash management wealth management products totaling USD 26,534,700 to enhance capital utilization and increase income from idle funds; as of June 30, 2025, the fair value of these products was RMB 143.3 million, accounting for approximately 4.1% of total assets - The company subscribed to cash management wealth management products totaling **USD 26,534,700** between June 6 and July 9, 2025[84](index=84&type=chunk) - These products have an expected annualized return of **2%-4.5%**, an investment period of no more than **one year**, are redeemable at any time, and carry low risk[84](index=84&type=chunk) - As of June 30, 2025, the fair value of these wealth management products was **RMB 143.3 million**, accounting for approximately **4.1%** of total assets[84](index=84&type=chunk) - As of June 30, 2025, the company had no significant investments accounting for **5%** or more of total assets[85](index=85&type=chunk) [Material Acquisitions and Disposals](index=31&type=section&id=Material%20Acquisitions%20and%20Disposals) [Material Acquisitions and Disposals](index=31&type=section&id=Material%20Acquisitions%20and%20Disposals) For the first half of 2025 and up to the date of this announcement, the company had no material acquisitions or disposals of subsidiaries, associates, or joint ventures - For the first half of 2025 and up to the date of this announcement, the company had no material acquisitions or disposals of subsidiaries, associates, or joint ventures[86](index=86&type=chunk) [Employees and Remuneration](index=32&type=section&id=Employees%20and%20Remuneration) [Employees and Remuneration](index=32&type=section&id=Employees%20and%20Remuneration) As of June 30, 2025, the company had 1,238 full-time employees, a decrease from December 31, 2024; the company offers competitive compensation and benefits, diverse training, and implements share option schemes to attract and incentivize talent - As of June 30, 2025, the company had **1,238** full-time employees, a decrease from **1,430** as of December 31, 2024[88](index=88&type=chunk) - Employee remuneration (excluding directors) for the first half of 2025 was approximately **RMB 136 million**, a decrease from **RMB 144 million** in the same period last year[88](index=88&type=chunk) - The company offers competitive compensation, performance bonuses, and other incentives, and provides regular internal training for employees[88](index=88&type=chunk)[89](index=89&type=chunk) - The company adopted a pre-IPO share option scheme and a 2023 share scheme, aiming to attract, incentivize, and retain talent[90](index=90&type=chunk)[91](index=91&type=chunk) - On April 22, 2025, the Board conditionally granted share options and share awards to Dr. Ji Pengcheng and Mr. Zhang Bin, linked to business and financial milestones such as subscribed equipment quantity, monthly revenue, and gross profit[92](index=92&type=chunk) - On June 13, 2025, the company granted a total of **5,760,000** share options and **2,821,400** share awards to **146** eligible participants[94](index=94&type=chunk) [Other Information](index=34&type=section&id=Other%20Information) [Interim Dividend](index=34&type=section&id=Interim%20Dividend) The Board of Directors decided not to pay any interim dividend for the first half of 2025 - The Board of Directors does not recommend the payment of any interim dividend for the six months ended June 30, 2025[95](index=95&type=chunk) [Corporate Governance Code](index=35&type=section&id=Corporate%20Governance%20Code) The company has complied with all applicable provisions of the Corporate Governance Code set out in Appendix C1 of the Listing Rules, but the roles of Chairman and Chief Executive Officer are combined and held by Dr. Ji Pengcheng, which the Board believes provides strong and consistent leadership for the company, with adequate checks and balances in place - The company has complied with all applicable provisions of the Corporate Governance Code[96](index=96&type=chunk) - The roles of Chairman and Chief Executive Officer are combined and held by Dr. Ji Pengcheng, which deviates from code provision C.2.1[97](index=97&type=chunk) - The Board believes this arrangement provides strong and consistent leadership for the company, and adequate checks and balances are in place (e.g., independent non-executive directors, Board decisions requiring majority approval)[97](index=97&type=chunk)[98](index=98&type=chunk) [Compliance with the Model Code for Securities Transactions by Directors](index=36&type=section&id=Compliance%20with%20the%20Model%20Code%20for%20Securities%20Transactions%20by%20Directors) Following specific inquiries, all Directors confirmed that they have complied with the required standards set out in the Model Code for Securities Transactions by Directors in Appendix C3 of the Listing Rules for the six months ended June 30, 2025 - All Directors confirmed that they have complied with the required standards set out in the Model Code for the six months ended June 30, 2025[100](index=100&type=chunk) [Audit Committee](index=36&type=section&id=Audit%20Committee) The Audit Committee comprises three independent non-executive directors, with Mr. Wang Jingbo as Chairman; the committee has reviewed the company's unaudited condensed consolidated interim financial statements and interim results announcement for the first half of 2025, and the independent auditor has reviewed the condensed consolidated financial statements in accordance with International Standard on Review Engagements 2410 - The Audit Committee comprises three independent non-executive directors, with Mr. Wang Jingbo as Chairman of the committee[101](index=101&type=chunk) - The committee has reviewed the company's unaudited condensed consolidated interim financial statements and interim results announcement for the first half of 2025[101](index=101&type=chunk) - The independent auditor, Deloitte Touche Tohmatsu, has reviewed the condensed consolidated financial statements in accordance with International Standard on Review Engagements 2410[101](index=101&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=37&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) In the first half of 2025, the company repurchased and cancelled a total of 46,013,500 ordinary shares on the Stock Exchange for a total consideration (before expenses) of HKD 26,371,999, aiming to enhance net asset value per share and/or earnings per share; as of the date of this announcement, the company held 13,637,000 treasury shares - In the first half of 2025, the company repurchased a total of **14,792,500** ordinary shares on the Stock Exchange for a total consideration (before expenses) of **HKD 26,371,999**[102](index=102&type=chunk) - The share repurchases aimed to enhance net asset value per share and/or earnings per share[102](index=102&type=chunk) - As of June 30, 2025, the company cancelled a total of **46,013,500** treasury shares[102](index=102&type=chunk) - As of the date of this announcement, the company held **13,637,000** treasury shares[102](index=102&type=chunk) [Material Litigation](index=37&type=section&id=Material%20Litigation) For the first half of 2025 and up to the date of this announcement, the company was not involved in any material litigation or arbitration, and the Directors were not aware of any pending or threatened material litigation or claims - For the first half of 2025 and up to the date of this announcement, the company was not involved in any material litigation or arbitration[103](index=103&type=chunk) [Use of Proceeds from Global Offering](index=38&type=section&id=Use%20of%20Proceeds%20from%20Global%20Offering) The net proceeds from the global offering were approximately HKD 97.0 million, of which HKD 83.9 million had been utilized as of June 30, 2025, primarily for market promotion, sales and service network improvements, R&D and diversification of service content, enhancing remanufacturing capabilities and operational efficiency, working capital, and general corporate purposes; the remaining proceeds are expected to be utilized by the end of 2025 - The net proceeds from the global offering were approximately **HKD 97.0 million**[105](index=105&type=chunk) - As of June 30, 2025, **HKD 83.9 million** had been utilized, with **HKD 13.1 million** remaining unutilized[105](index=105&type=chunk) Use of Proceeds and Utilization (As of June 30, 2025) | Intended Use | Percentage (%) | Available (HKD millions) | Utilized (HKD millions) | Unutilized (HKD millions) | Expected Timeline | | :--- | :--- | :--- | :--- | :--- | :--- | | Investment in market promotion and sales and service network improvements | 40.0 | 38.8 | 29.8 | 9.0 | By end of 2025 | | Investment in R&D and diversification of service content | 30.0 | 29.1 | 25.0 | 4.1 | By end of 2025 | | Enhancing remanufacturing capabilities and operational efficiency | 20.0 | 19.4 | 19.4 | 0.0 | - | | Working capital and general corporate purposes | 10.0 | 9.7 | 9.7 | 0.0 | - | | **Total** | **100.0** | **97.0** | **83.9** | **13.1** | | - Unutilized proceeds are intended to be placed in interest-bearing accounts and comply with China's foreign exchange registration and remittance laws[106](index=106&type=chunk) [Publication of Interim Results Announcement and Interim Report](index=39&type=section&id=Publication%20of%20Interim%20Results%20Announcement%20and%20Interim%20Report) This interim results announcement has been published on the HKEX website and the company's website, and the interim report for the six months ended June 30, 2025, will also be available on these websites - The interim results announcement has been published on the HKEX website (www.hkexnews.hk) and the company's website (http://edianyun.com)[107](index=107&type=chunk) - The interim report for the six months ended June 30, 2025, will be available on the aforementioned websites[107](index=107&type=chunk) [By Order of the Board](index=39&type=section&id=By%20Order%20of%20the%20Board) This announcement was issued by Dr. Ji Pengcheng, Chairman and Chief Executive Officer of the Board, in Beijing, China, on August 25, 2025, and lists the members of the Board of Directors - The announcement was issued by Dr. Ji Pengcheng, Chairman and Chief Executive Officer of the Board, on August 25, 2025[108](index=108&type=chunk) - Board members include executive directors Dr. Ji Pengcheng, Mr. Zhang Bin, Mr. He Liang, and Mr. Tong Jian, as well as independent non-executive directors Mr. Hong Weili, Mr. Song Shiji, Mr. Wang Jingbo, and Ms. Li Dan[108](index=108&type=chunk)

[Interim Results Announcement](index=1&type=section&id=Interim%20Results%20Announcement) Deling International Holdings Limited announces its unaudited consolidated results for the six months ended June 30, 2025 [Company Information](index=1&type=section&id=Company%20Information) Deling International Holdings Limited (Stock Code: 1126) board is pleased to announce the unaudited consolidated results for the six months ended June 30, 2025, with comparative data for 2024 - Deling International Holdings Limited (Stock Code: 1126) announced its unaudited consolidated results for the six months ended June 30, 2025[2](index=2&type=chunk) [Consolidated Financial Statements](index=1&type=section&id=Consolidated%20Financial%20Statements) The company presents its consolidated financial statements, including income, comprehensive income, and financial position, for the interim period [Consolidated Income Statement](index=1&type=section&id=Consolidated%20Income%20Statement) For the six months ended June 30, 2025, revenue increased by 12.4% to HK$2,578,311 thousand, profit for the period rose 10.1% to HK$307,026 thousand, and basic and diluted earnings per share were HK$0.454 Key Data from Consolidated Income Statement (Six Months Ended June 30) | Metric | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 2,578,311 | 2,294,045 | +12.4% | | Cost of sales | (2,060,691) | (1,743,774) | +18.2% | | Gross profit | 517,620 | 550,271 | -5.9% | | Operating profit | 393,459 | 349,301 | +12.6% | | Profit before tax | 390,112 | 347,727 | +12.2% | | Profit for the period | 307,026 | 278,854 | +10.1% | | Basic and diluted earnings per share | HK$0.454 | HK$0.412 | +10.2% | [Consolidated Statement of Comprehensive Income](index=2&type=section&id=Consolidated%20Statement%20of%20Comprehensive%20Income) Total comprehensive income for the period significantly increased to HK$340,252 thousand, primarily due to a shift from loss to gain in exchange differences from translating financial statements of overseas subsidiaries Key Data from Consolidated Statement of Comprehensive Income (Six Months Ended June 30) | Metric | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Profit for the period | 307,026 | 278,854 | +10.1% | | Exchange differences arising from translation of financial statements of overseas subsidiaries | 33,226 | (39,900) | from loss to gain | | Other comprehensive income for the period | 33,226 | (39,900) | from loss to gain | | Total comprehensive income for the period | 340,252 | 238,954 | +42.4% | [Consolidated Statement of Financial Position](index=3&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, total assets less current liabilities increased to HK$4,082,520 thousand, net assets rose to HK$4,030,424 thousand, and net current assets maintained steady growth Key Data from Consolidated Statement of Financial Position (As of June 30) | Metric | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Non-current assets | 1,468,089 | 1,389,351 | +5.7% | | Current assets | 3,718,527 | 3,569,990 | +4.2% | | Current liabilities | 1,104,096 | 967,150 | +14.1% | | Net current assets | 2,614,431 | 2,602,840 | +0.4% | | Total assets less current liabilities | 4,082,520 | 3,992,191 | +2.3% | | Non-current liabilities | 52,096 | 31,273 | +66.6% | | Net assets | 4,030,424 | 3,960,918 | +1.7% | | Total equity | 4,030,424 | 3,960,918 | +1.7% | [Notes to the Unaudited Interim Financial Report](index=5&type=section&id=Notes%20to%20the%20Unaudited%20Interim%20Financial%20Report) This section provides detailed notes on the group's accounting policies, financial performance, and position, including segment reporting and key financial balances [General Information and Basis of Preparation](index=5&type=section&id=General%20Information%20and%20Basis%20of%20Preparation) The Group's principal activities include designing, developing, manufacturing, and selling plush toys, plastic figures, and tarpaulins, with the interim financial report prepared under HKAS 34 and reviewed by KPMG - The Group's principal activities are the design, development, manufacture, and sale of plush toys, plastic figures, and tarpaulins[10](index=10&type=chunk) - The interim financial report has been prepared in accordance with Hong Kong Accounting Standard 34 'Interim Financial Reporting' issued by the Hong Kong Institute of Certified Public Accountants and reviewed by KPMG[11](index=11&type=chunk)[12](index=12&type=chunk) [Changes in Accounting Policies](index=6&type=section&id=Changes%20in%20Accounting%20Policies) The Group applied amendments to HKAS 21 'The Effects of Changes in Foreign Exchange Rates – Lack of Exchangeability', which had no material impact on this interim report due to the absence of non-exchangeable foreign currency transactions - The Group has applied the amendments to Hong Kong Accounting Standard 21 'The Effects of Changes in Foreign Exchange Rates – Lack of Exchangeability'[14](index=14&type=chunk) - As the Group did not enter into any foreign currency transactions involving a currency that is not exchangeable into another currency, the amendments had no material impact on this interim report[14](index=14&type=chunk) [Revenue and Segment Reporting](index=6&type=section&id=Revenue%20and%20Segment%20Reporting) The Group's revenue is segmented by product line and customer geography into three reportable segments: plush toys, plastic figures, and tarpaulins, with strong demand in North America and Japan driving overall revenue growth - The Group has identified three reportable segments: plush toys, plastic figures, and tarpaulins[16](index=16&type=chunk) Revenue by Major Product Line (Six Months Ended June 30) | Product Line | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Plush toys | 1,324,333 | 1,186,083 | +11.7% | | Plastic figures | 1,068,951 | 936,337 | +14.2% | | Tarpaulins | 185,027 | 171,625 | +7.8% | | **Total** | **2,578,311** | **2,294,045** | **+12.4%** | Revenue by Customer Geographical Location (Six Months Ended June 30) | Geographical Location | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Hong Kong | 173,400 | 144,760 | +19.8% | | North America | 1,046,889 | 976,417 | +7.2% | | Japan | 702,306 | 539,157 | +30.3% | | Mainland China | 509,205 | 509,985 | -0.2% | | Europe | 79,689 | 62,475 | +27.6% | | Other countries | 66,822 | 61,251 | +9.1% | | **Total** | **2,578,311** | **2,294,045** | **+12.4%** | Reportable Segment Profit (Adjusted EBITDA) | Segment | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Plush toys | 340,508 | 306,266 | +11.2% | | Plastic figures | 92,970 | 98,003 | -5.2% | | Tarpaulins | 26,064 | 22,006 | +18.4% | | **Total** | **459,542** | **426,275** | **+7.8%** | [Profit Before Tax](index=8&type=section&id=Profit%20Before%20Tax) Profit before tax was HK$390,112 thousand, influenced by increased finance costs (higher interest expenses on bank borrowings and lease liabilities) and decreased depreciation expenses Finance Costs (Six Months Ended June 30) | Item | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Interest expense on bank borrowings | 1,878 | 356 | +427.5% | | Interest expense on lease liabilities | 1,711 | 1,015 | +68.6% | | **Total** | **3,589** | **1,371** | **+161.8%** | Impact of Other Items on Profit Before Tax (Six Months Ended June 30) | Item | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Depreciation expense | 66,714 | 82,126 | -18.7% | | Write-down of inventories | 9,817 | 7,829 | +25.4% | | Reversal of write-down of inventories | – | (22,508) | from reversal to none | | Bank interest income | (22,290) | (25,099) | -11.2% | | Net (gain)/loss on disposal of other property, plant and equipment | (369) | 402 | from loss to gain | [Income Tax](index=8&type=section&id=Income%20Tax) Total income tax for the period was HK$83,086 thousand, an increase of 20.6% year-on-year, with higher Hong Kong profits tax and increases in overseas and deferred tax Income Tax (Six Months Ended June 30) | Item | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Current tax – Hong Kong profits tax | 14,201 | 4,560 | +211.4% | | Current tax – Outside Hong Kong | 61,227 | 66,656 | -8.1% | | Deferred tax | 7,658 | (2,343) | from negative to positive | | **Total** | **83,086** | **68,873** | **+20.6%** | - Hong Kong profits tax provision is calculated at 16.5% of the estimated assessable profit for the period, with the first HK$2,000,000 for qualifying corporations taxed at 8.25%[23](index=23&type=chunk) - Withholding tax of **HK$8,876,000** (2024: HK$7,724,000) on dividend income from Mainland China subsidiaries is included in 'Current tax – Outside Hong Kong'[24](index=24&type=chunk) [Capital, Reserves and Dividends](index=9&type=section&id=Capital%2C%20Reserves%20and%20Dividends) The Board recommends an interim dividend of HK$0.25 per ordinary share, an increase from HK$0.20 in the prior period, totaling HK$169,216 thousand Interim Dividend (Six Months Ended June 30) | Item | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Interim dividend per ordinary share | HK cents 25 | HK cents 20 | +25.0% | | Total dividends payable to equity holders of the Company | 169,216 | 135,373 | +25.0% | Final Dividend for Previous Financial Year (Approved and Paid in Subsequent Interim Period) | Item | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Final dividend per ordinary share | HK cents 40 | HK cents 35 | +14.3% | | Total dividends payable to equity holders of the Company | 270,746 | 236,903 | +14.3% | [Earnings Per Share](index=9&type=section&id=Earnings%20Per%20Share) For the six months ended June 30, 2025, basic earnings per share were HK$0.454, equal to diluted earnings per share due to the absence of potentially dilutive ordinary shares Earnings Per Share (Six Months Ended June 30) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Basic earnings per share | HK$0.454 | HK$0.412 | | Diluted earnings per share | HK$0.454 | HK$0.412 | - Basic earnings per share are calculated based on the profit attributable to equity holders of the Company of **HK$307,026,000** for the interim period and the weighted average number of ordinary shares outstanding of **676,865,000** shares[26](index=26&type=chunk) - Diluted earnings per share are equal to basic earnings per share as there were no potentially dilutive ordinary shares for the six months ended June 30, 2025 and 2024[27](index=27&type=chunk) [Property, Plant and Equipment](index=10&type=section&id=Property%2C%20Plant%20and%20Equipment) For the six months ended June 30, 2025, right-of-use assets increased by HK$26,762 thousand due to new lease agreements, with HK$103,701 thousand in new PPE purchases and a net gain of HK$369 thousand from disposals - For the six months ended June 30, 2025, right-of-use assets increased by **HK$26,762 thousand** (2024: HK$16,704 thousand), related to capitalized lease payments for new lease agreements[28](index=28&type=chunk) - The Group purchased other property, plant and equipment items at a cost of **HK$103,701 thousand** (2024: HK$100,089 thousand)[29](index=29&type=chunk) - Disposal of property, plant and equipment items with a net book value of **HK$7,245 thousand** resulted in a net gain on disposal of **HK$369 thousand** (2024: loss of HK$402 thousand)[29](index=29&type=chunk) [Other Financial Assets](index=10&type=section&id=Other%20Financial%20Assets) As of June 30, 2025, unlisted equity securities measured at fair value through other comprehensive income amounted to HK$1,917 thousand, primarily representing a strategic investment in JTBC, Korea Other Financial Assets (As of June 30) | Item | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Unlisted equity securities at fair value through other comprehensive income | 1,917 | 1,771 | - Unlisted equity securities refer to the investment in Joongang Tongyang Broadcasting Company (JTBC), which is held for strategic purposes[30](index=30&type=chunk) [Inventories](index=10&type=section&id=Inventories) For the six months ended June 30, 2025, inventory write-downs amounted to HK$9,817 thousand, with no reversals in the current period compared to HK$22,508 thousand in the prior year - For the six months ended June 30, 2025, write-downs of inventories amounted to **HK$9,817 thousand** (2024: HK$7,829 thousand)[31](index=31&type=chunk) - There were no reversals of write-downs of inventories during the period (2024: HK$22,508 thousand)[31](index=31&type=chunk) [Trade and Other Receivables](index=11&type=section&id=Trade%20and%20Other%20Receivables) As of June 30, 2025, total trade and bills receivables were HK$882,396 thousand, with HK$498,861 thousand due within one month, and loans receivable amounted to HK$36,320 thousand, secured by third-party assets Ageing Analysis of Trade and Bills Receivables (As of June 30) | Ageing | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Within 1 month | 498,861 | 598,877 | | 1 to 2 months | 274,791 | 197,646 | | 2 to 3 months | 75,622 | 65,304 | | 3 to 4 months | 25,385 | 42,563 | | Over 4 months | 7,737 | 14,649 | | **Total** | **882,396** | **919,039** | Total Trade and Other Receivables (As of June 30) | Item | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Trade and bills receivables | 882,396 | 919,039 | | Other receivables | 219,811 | 155,903 | | Prepayments | 19,306 | 16,462 | | Loans receivable | 36,320 | 34,511 | | **Total** | **1,157,833** | **1,125,915** | - Loans receivable are amounts due from third parties, of which **HK$34,514 thousand** are fully secured by leasehold land and factory buildings held by third parties, bearing interest at 5.4% to 9.5% per annum and repayable within one year[33](index=33&type=chunk) [Trade and Other Payables and Contract Liabilities](index=11&type=section&id=Trade%20and%20Other%20Payables%20and%20Contract%20Liabilities) As of June 30, 2025, total trade payables were HK$623,356 thousand, with HK$398,756 thousand due within one month, and increases in salaries and welfare payable, VAT payable, and other payables Ageing Analysis of Trade Payables (As of June 30) | Ageing | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Within 1 month | 398,756 | 279,915 | | After 1 month but within 3 months | 134,481 | 92,935 | | After 3 months but within 6 months | 65,431 | 37,392 | | Over 6 months | 24,688 | 13,626 | | **Total Trade Payables** | **623,356** | **423,868** | Total Trade and Other Payables and Contract Liabilities (As of June 30) | Item | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Trade payables | 623,356 | 423,868 | | Salaries and welfare payable | 145,422 | 116,389 | | VAT payable | 8,154 | 5,942 | | Other payables and accrued expenses | 55,424 | 87,996 | | Receipts in advance | 4,853 | 2,080 | | **Total** | **837,209** | **636,275** | [Management Discussion and Analysis](index=12&type=section&id=Management%20Discussion%20and%20Analysis) Management discusses the Group's financial performance, business operations, and future outlook, highlighting revenue growth, market trends, and strategic initiatives [Financial Review](index=12&type=section&id=Financial%20Review) Despite challenges, the Group achieved a 12.4% revenue growth to HK$2,578.3 million in H1 2025, driven by strong demand and order shifts to Vietnam, though gross margin declined to 20.1% due to rising costs - Revenue for the period increased by **12.4%** to **HK$2,578.3 million**, primarily benefiting from strong demand in North American and Asian markets, and the shift of orders to Vietnam to mitigate tariff increases[35](index=35&type=chunk) Key Financial Review Data (Six Months Ended June 30) | Metric | 2025 (HK$ million) | 2024 (HK$ million) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 2,578.3 | 2,294.0 | +12.4% | | Gross profit | 517.6 | 550.3 | -5.9% | | Gross profit margin | 20.1% | 24.0% | -3.9 percentage points | | Profit attributable to equity holders of the Company | 307.0 | 278.9 | +10.1% | | Net profit margin | 11.9% | 12.2% | -0.3 percentage points | - As of June 30, 2025, the Group's cash and cash equivalents and current bank deposits amounted to **HK$1,577.1 million** (December 31, 2024: HK$1,607.4 million)[36](index=36&type=chunk) - The Board recommends an interim dividend of **HK cents 25** per ordinary share for the period (2024: HK cents 20)[36](index=36&type=chunk) [Business Review](index=12&type=section&id=Business%20Review) All three product lines achieved revenue growth, driven by strong demand in Asia and North America for plush toys and plastic figures, and inventory recovery for tarpaulins, with multi-regional production mitigating tariff impacts - Plush toys segment revenue grew by **11.7%** to **HK$1,324.3 million**, accounting for **51.4%** of total revenue, driven by demand from Asian theme park visitors and increased demand for non-China production capacity under US tariff policies[37](index=37&type=chunk) - Plastic figures segment revenue grew by **14.2%** to **HK$1,069.0 million**, accounting for **41.5%** of total revenue, driven by strong demand in Asian and North American markets, leveraging Vietnam and Indonesia production for order transfers[38](index=38&type=chunk) - Tarpaulins segment revenue grew by **7.8%** to **HK$185.0 million**, accounting for **7.1%** of total revenue, benefiting from lower inventory levels and a recovery in US market orders[39](index=39&type=chunk) - North America remains the Group's largest geographical market, accounting for **40.6%** of total revenue, followed by Japan (**27.2%**), China (**19.7%**), and Hong Kong (**6.7%**)[40](index=40&type=chunk) - The Group operates **28 factories** (7 in China, 20 in Vietnam, 1 in Indonesia) with an average utilization rate of approximately **84.7%**, and has introduced advanced equipment to enhance operational efficiency[41](index=41&type=chunk) [Outlook](index=14&type=section&id=Outlook) Geopolitical tensions and tariffs are expected to persist, but the IP-driven global toy market shows robust growth, prompting the Group to strengthen its multi-regional production, expand in Vietnam and Indonesia, and enhance efficiency - Geopolitical tensions and US tariff policies on toy imports from China are expected to continue to exert pressure on the industry[42](index=42&type=chunk) - The global toy market, especially the IP-driven segment, continues to show robust growth, driven by the expanding 'kidult' demographic, technology-integrated experiences, and strong collaborations with entertainment content[42](index=42&type=chunk) - The Group will continue to strengthen its multi-regional production layout, with China factories focusing on local and emerging Chinese brands, and Vietnam and Indonesia bases serving as global export hubs[43](index=43&type=chunk) - Plans are in place to add one factory each in Vietnam and Indonesia in the second half of 2025 to meet booming demand from Asian countries and the US market[43](index=43&type=chunk) - Committed to enhancing production efficiency and technological capabilities, seizing emerging opportunities through localized procurement, automated processes, and stringent quality assurance programs[43](index=43&type=chunk) - Establishing long-term partnerships with key character owners and licensors, continuously enhancing R&D and production capabilities to support higher product value and market penetration[44](index=44&type=chunk) [Other Information](index=15&type=section&id=Other%20Information) This section covers details on employee numbers, remuneration, liquidity, financial resources, asset pledges, corporate governance, and dividend announcements [Number of Employees and Remuneration](index=15&type=section&id=Number%20of%20Employees%20and%20Remuneration) As of June 30, 2025, the Group employed 28,699 staff globally, with total employee costs of HK$804,700 thousand for the period, and provides comprehensive training programs - As of June 30, 2025, the Group employed **28,699 staff** (December 31, 2024: 28,697 staff) in Hong Kong, China, Korea, USA, Japan, Vietnam, Singapore, and Indonesia[45](index=45&type=chunk) - Total staff costs for the Group amounted to **HK$804,700 thousand** for the period (2024: HK$670,500 thousand)[45](index=45&type=chunk) - The Group grants bonuses based on individual employee performance and provides comprehensive training programs or sponsors employees to attend various work-related training courses[45](index=45&type=chunk) [Liquidity, Financial Resources and Gearing Ratio](index=15&type=section&id=Liquidity%2C%20Financial%20Resources%20and%20Gearing%20Ratio) The Group maintains reasonable liquidity with net current assets of HK$2,614,400 thousand, significantly reduced bank loans, and a gearing ratio of 1.5%, indicating a robust financial position Key Liquidity and Gearing Ratio Data (As of June 30) | Metric | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Net current assets | 2,614,400 | 2,602,800 | +0.4% | | Total cash and cash equivalents | 1,479,400 | 1,407,900 | +5.1% | | Bank loans | 62,100 | 99,600 | -37.6% | | Gearing ratio | 1.5% | 2.5% | -1.0 percentage points | - The Group maintains a prudent approach to foreign exchange risk management, primarily exposed to risks denominated in USD, RMB, VND, JPY, and IDR[46](index=46&type=chunk) [Pledge of Group's Assets](index=15&type=section&id=Pledge%20of%20Group's%20Assets) As of June 30, 2025, the Group pledged assets totaling HK$268,800 thousand, including factory buildings, leasehold land, PPE, and time deposits, as security for bank loans and unutilized banking facilities - Assets with a total carrying value of **HK$166,100 thousand** were pledged as security for bank loans of **HK$62,100 thousand**[47](index=47&type=chunk) - Assets with a total carrying value of **HK$142,000 thousand** were pledged as security for unutilized banking facilities of **HK$86,200 thousand**[47](index=47&type=chunk) - Total pledged assets amounted to **HK$268,800 thousand** (December 31, 2024: HK$281,000 thousand)[47](index=47&type=chunk) [Corporate Governance](index=16&type=section&id=Corporate%20Governance) The Company complies with the Corporate Governance Code, with Mr. Choi Kweon-min serving as both Chairman and CEO for continuity, balanced by three independent non-executive directors - The Company has complied with the Corporate Governance Code set out in Appendix C1 to the Listing Rules, with the exception of a deviation from code provision C.2.1[51](index=51&type=chunk) - Mr. Choi Kweon-min holds both the Chairman and Chief Executive Officer positions, an arrangement the Board believes helps maintain continuity of the Company's policies and stability of business operations[51](index=51&type=chunk) - All Directors have confirmed their compliance with the Model Code for Securities Transactions by Directors of Listed Issuers for the six months ended June 30, 2025[52](index=52&type=chunk) [Interim Dividend and Closure of Register of Members](index=16&type=section&id=Interim%20Dividend%20and%20Closure%20of%20Register%20of%20Members) The Board declared an interim dividend of HK cents 25 per ordinary share for the six months ended June 30, 2025, payable on October 13, 2025, to shareholders registered on September 29, 2025 - The Board declared an interim dividend of **HK cents 25** per ordinary share (2024: HK cents 20) for the six months ended June 30, 2025[53](index=53&type=chunk) - The interim dividend of **HK$169,216,000** will be paid on October 13, 2025, to shareholders registered at the close of business on the record date, September 29, 2025[53](index=53&type=chunk) - To qualify for the interim dividend, all transfer documents, together with the relevant share certificates, must be lodged with the Company's share registrar by 4:30 p.m. on September 26, 2025[54](index=54&type=chunk) [Audit Committee and Review of Accounts](index=17&type=section&id=Audit%20Committee%20and%20Review%20of%20Accounts) The Audit Committee reviewed the Group's accounting principles, risk management, internal control systems, and financial reporting, confirming compliance with relevant standards, rules, and regulations, with the interim financial report reviewed by KPMG - The Audit Committee, together with the Company's management, has reviewed the accounting principles and practices adopted by the Group and discussed risk management, internal control systems, and financial reporting matters[55](index=55&type=chunk) - The Audit Committee is of the opinion that the unaudited interim results for the six months ended June 30, 2025, have complied with the relevant accounting standards, rules, and regulations and have been duly disclosed[55](index=55&type=chunk) - The interim financial report is unaudited but has been reviewed by the Company's auditor, KPMG, in accordance with Hong Kong Standard on Review Engagements 2410[55](index=55&type=chunk) [Publication of 2025 Interim Results and Interim Report](index=17&type=section&id=Publication%20of%202025%20Interim%20Results%20and%20Interim%20Report) The electronic version of this interim results announcement is available on the company and HKEX websites, with printed interim reports provided to shareholders upon request - The electronic version of this interim results announcement is available on the Company's website (www.dream-i.com.hk) and the HKEX website (www.hkexnews.hk)[56](index=56&type=chunk) - Printed copies of the interim report for the six months ended June 30, 2025, will be provided to shareholders upon request and will be posted on the aforementioned websites in due course[56](index=56&type=chunk)

Financial Highlights [High-Level Performance Overview](index=1&type=section&id=%E9%AB%98%E5%B1%A4%E6%AC%A1%E6%A5%AD%E7%B8%BE%E6%A6%82%E8%A7%88) H1 2025 saw significant growth in revenue, gross profit, profit attributable to equity holders, and basic EPS Key Financial Indicators for the Six Months Ended June 30, 2025 (USD thousand) | Indicator | June 30, 2025 (USD thousand) | June 30, 2024 (USD thousand) | Growth Rate (%) | | :--- | :--- | :--- | :--- | | Revenue | 641,400 | 540,500 | 18.7% | | Gross Profit | 127,100 | 47,100 | 170.1% | | Profit Attributable to Equity Holders of the Company | 188,700 | 58,600 | 222.0% | | Basic Earnings Per Share (USD) | 0.113 | 0.042 | 169.0% | Consolidated Financial Statements [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=%E7%B6%9C%E5%90%88%E6%90%8D%E7%9B%8A%E5%8F%8A%E5%85%B6%E4%BB%96%E5%85%A8%E9%9D%A2%E6%94%B6%E5%85%A5%E8%A1%A8) The Group achieved significant year-on-year growth in H1 2025 revenue, gross profit, profit, and basic EPS Consolidated Statement of Profit or Loss and Other Comprehensive Income Summary (USD thousand) | Indicator | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Revenue | 641,427 | 540,491 | | Cost of Sales | (514,316) | (493,429) | | Gross Profit | 127,111 | 47,062 | | Operating Profit | 189,651 | 59,036 | | Profit Before Tax | 189,093 | 58,843 | | Profit for the Period | 188,818 | 59,045 | | Profit Attributable to Equity Holders of the Company | 188,690 | 58,607 | | Basic Earnings Per Share (USD) | 0.113 | 0.042 | - Total comprehensive income for the period was **USD 188.584 million**, primarily contributed by profit for the period, with a negative foreign currency translation difference of **USD 0.234 million** for overseas operations[5](index=5&type=chunk) [Consolidated Statement of Financial Position](index=4&type=section&id=%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) As of June 30, 2025, the Group's financial position showed growth in assets, cash, and net assets, with increased current liabilities Consolidated Statement of Financial Position Summary (USD thousand) | Indicator | As of June 30, 2025 | As of December 31, 2024 | | :--- | :--- | :--- | | Total Non-Current Assets | 1,779,858 | 1,737,481 | | Total Current Assets | 733,396 | 584,186 | | Cash and Cash Equivalents | 585,801 | 422,134 | | Total Current Liabilities | 408,826 | 231,102 | | Trade and Other Payables | 348,390 | 181,494 | | Net Assets | 1,980,324 | 1,975,182 | | Total Equity Attributable to Equity Holders of the Company | 1,980,134 | 1,974,708 | Notes to the Financial Statements [Basis of Preparation and Changes in Accounting Policies](index=6&type=section&id=%E7%B7%A8%E8%A3%BD%E5%9F%BA%E6%BA%96%E8%88%87%E6%9C%83%E8%A8%88%E6%94%BF%E7%AD%96%E8%AE%8A%E5%8B%95) This interim financial report, prepared under HKAS 34, was authorized for issue on August 25, 2025, with no significant impact from HKAS 21 (amended) due to the absence of non-convertible foreign currency transactions - This interim financial report is prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" issued by the Hong Kong Institute of Certified Public Accountants and was authorized for issue by the Board of Directors on August 25, 2025[8](index=8&type=chunk) - The Group applied HKAS 21 (amended) "The Effects of Changes in Foreign Exchange Rates – Lack of Exchangeability", but it had no significant impact on this interim financial report due to the absence of relevant transactions[10](index=10&type=chunk) [Revenue and Segment Reporting](index=6&type=section&id=%E6%94%B6%E5%85%A5%E5%8F%8A%E5%88%86%E9%83%A8%E5%A0%B1%E5%91%8A) The Group's primary business is container shipping, with H1 2025 revenue predominantly from this service, disclosed by geographical region as a single segment - The Group's principal business is the provision of container shipping and related services, with all revenue recognized over time[11](index=11&type=chunk) Revenue from Contracts with Customers by Major Service Line (USD thousand) | Service Line | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Provision of Container Shipping Services | 585,615 | 505,880 | | Other Container Shipping Related Services | 55,812 | 34,611 | | **Total Revenue** | **641,427** | **540,491** | - The Group has identified only one reportable segment, primarily related to the provision of container shipping and related services[12](index=12&type=chunk) Revenue Information by Geographical Region (USD thousand) | Region | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Mainland China | 278,256 | 240,225 | | Philippines | 69,651 | 59,007 | | Japan | 55,314 | 49,590 | | Taiwan | 42,176 | 40,004 | | Hong Kong SAR | 23,826 | 36,265 | | Other Countries or Regions | 61,195 | 13,780 | | **Total Revenue** | **641,427** | **540,491** | [Other Income and Net Gains/Losses](index=7&type=section&id=%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5%E5%8F%8A%E6%B7%A8%E9%A1%8D) Other income significantly increased to **USD 68.576 million** for H1 2025, driven by higher charter hire income, while net other income/(loss) turned into a gain, primarily due to net foreign exchange gains Components of Other Income (USD thousand) | Item | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Charter Hire Income – Vessels | 58,916 | 14,178 | | Bank Interest Income | 8,278 | 13,371 | | Container Rental Income | 1,382 | 1,579 | | **Total Other Income** | **68,576** | **29,128** | Components of Other Income / (Losses) Net (USD thousand) | Item | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net Foreign Exchange Gains / (Losses) | 12,179 | (1,569) | | Gain on Disposal of Property, Plant and Equipment | 1 | 14 | | Others | 156 | 339 | | **Total Other Income / (Losses) Net** | **12,336** | **(1,216)** | [Components of Profit Before Tax](index=8&type=section&id=%E9%99%A4%E7%A8%85%E5%89%8D%E5%88%A9%E6%BD%A4%E6%A7%8B%E6%88%90) Profit before tax is calculated after deducting finance costs, staff costs, and other items, with increased depreciation for property, plant and equipment, and decreased depreciation for right-of-use assets and bunker fuel costs Summary of Deductions from Profit Before Tax (USD thousand) | Item | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Finance Costs (Interest on Lease Liabilities) | 1,261

[Financial Highlights](index=1&type=section&id=財務摘要) The company reported a **55.7% revenue decrease** to **RMB 58.9 million**, with **loss attributable to owners narrowing by 13.2%** to **RMB 184.2 million**, and **basic loss per share reducing to RMB 0.36**. - During the reporting period, total revenue was approximately **RMB 58.9 million**, a **55.7% decrease** from the prior period[3](index=3&type=chunk) - During the reporting period, loss attributable to owners was approximately **RMB 184.2 million**, a **13.2% decrease** from the prior period[3](index=3&type=chunk) - Basic loss per share was **RMB 0.36**, a **12.2% reduction** from **RMB 0.41** in the prior period[3](index=3&type=chunk) - The Board resolved not to declare any interim dividend for the reporting period[3](index=3&type=chunk) [Condensed Consolidated Financial Statements](index=2&type=section&id=簡明綜合財務報表) This section presents the condensed consolidated financial statements, including the income statement, comprehensive income statement, and balance sheet, with detailed explanatory notes. [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, revenue significantly decreased by **55.7%** to **RMB 58.883 million**, operating loss narrowed to **RMB 183.063 million**, and loss attributable to owners was **RMB 184.248 million**. Condensed Consolidated Statement of Profit or Loss | Metric | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Revenue | 58,883 | 133,012 | | Cost of sales | (55,788) | (132,242) | | Gross profit | 3,095 | 770 | | Selling expenses | (14,113) | (20,825) | | Research and development expenses | (67,785) | (65,302) | | Administrative expenses | (96,667) | (113,497) | | Net impairment losses on financial and contract assets | (22,566) | (44,553) | | Other income | 6,173 | 7,410 | | Other gains – net | 8,800 | 28,035 | | Operating loss | (183,063) | (207,962) | | Finance costs – net | (10,876) | (6,065) | | Share of profits of associates and joint ventures accounted for using the equity method | 11,908 | 90 | | Loss before income tax | (182,031) | (213,937) | | Income tax (expense) / credit | (2,396) | 1,640 | | Loss for the period | (184,427) | (212,297) | | Loss for the period attributable to owners of the Company | (184,248) | (212,297) | [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, total comprehensive loss for the period was **RMB 184.500 million**, narrowing from **RMB 192.045 million** in the prior period, primarily due to reduced loss for the period and changes in other comprehensive income. Condensed Consolidated Statement of Comprehensive Income | Metric | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Loss for the period | (184,427) | (212,297) | | Other comprehensive income: Exchange differences on translation | (73) | 260 | | Other comprehensive income: Net fair value gains on financial assets at fair value through other comprehensive income | – | 19,992 | | **Total comprehensive loss for the period** | **(184,500)** | **(192,045)** | | Total comprehensive loss for the period attributable to owners of the Company | (184,321) | (192,045) | [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, total assets were **RMB 4,337.699 million**, a decrease from year-end 2024; total equity was **RMB 2,797.855 million**, and total liabilities were **RMB 1,539.844 million**. Condensed Consolidated Statement of Financial Position | Metric | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | **Assets** | | | | Total non-current assets | 1,180,581 | 1,244,773 | | Total current assets | 3,157,118 | 3,419,368 | | **Total assets** | **4,337,699** | **4,664,141** | | **Equity** | | | | Equity attributable to owners of the Company | 2,778,963 | 2,971,357 | | Non-controlling interests | 18,892 | 17,071 | | **Total equity** | **2,797,855** | **2,988,428** | | **Liabilities** | | | | Total non-current liabilities | 292,345 | 316,215 | | Total current liabilities | 1,247,499 | 1,359,498 | | **Total liabilities** | **1,539,844** | **1,675,713** | | **Total equity and liabilities** | **4,337,699** | **4,664,141** | [Notes to the Condensed Consolidated Interim Financial Statements](index=6&type=section&id=簡明綜合中期財務報表附註) This section details the basis of preparation, accounting policies, segment information, and specific composition and changes of key financial items, including revenue, operating loss, tax, loss per share, receivables, payables, financial assets, share capital, and dividends. [General Information](index=6&type=section&id=一般資料) Guohong Hydrogen Energy Technology (Jiaxing) Co., Ltd. was established in 2015, restructured as a joint-stock company in 2022, primarily engaged in R&D, production, and sales of hydrogen fuel cell stacks and systems in China, and listed on the HKEX on December 5, 2023. - The Company was incorporated on June 30, 2015, in Yunfu City, Guangdong Province, China, and restructured as a joint-stock company on March 22, 2022[8](index=8&type=chunk) - Its principal business involves the research, development, production, and sale of hydrogen fuel cell stacks and systems[8](index=8&type=chunk) - H shares have been listed on The Stock Exchange of Hong Kong Limited since December 5, 2023[8](index=8&type=chunk) [Basis of Preparation](index=6&type=section&id=編製基準) The condensed consolidated interim financial information is prepared in accordance with IAS 34, consistent with accounting policies used for the annual consolidated financial statements as of December 31, 2024, and discloses new and amended standards adopted and not yet adopted. - The condensed consolidated interim financial information is prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting"[10](index=10&type=chunk) - The accounting policies adopted are consistent with those applied in the consolidated financial statements for the year ended December 31, 2024, with no need for the Group to modify its accounting policies or make retrospective adjustments[10](index=10&type=chunk)[11](index=11&type=chunk) - New and amended standards and interpretations issued but not yet effective for the financial year beginning January 1, 2025, and not early adopted by the Group, including amendments to IFRS 9 and IFRS 7, are disclosed, with the Group currently assessing their full impact[11](index=11&type=chunk) [Segment Information](index=8&type=section&id=分部資料) Management reviews business operating results as a single segment for resource allocation decisions, with virtually all non-current assets and revenue derived from operations in China. - Management reviews the operating results of the business as one segment to make decisions about resource allocation[12](index=12&type=chunk) - All of the Group's non-current assets are located in China, and virtually all revenue is derived from operations in China[12](index=12&type=chunk) [Revenue (Notes)](index=8&type=section&id=收入%20%28附註%29) Revenue primarily derives from sales of hydrogen fuel cell systems, stacks, and components, as well as maintenance services. During the reporting period, hydrogen fuel cell system sales significantly decreased, while maintenance service revenue grew substantially. Revenue by Product Category | Product Category | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Hydrogen fuel cell systems | 36,651 | 130,939 | | Hydrogen fuel cell stacks | 2,017 | 432 | | Hydrogen fuel cell system components | 1,035 | 619 | | Maintenance services | 18,651 | – | | Others | 529 | 1,022 | | **Total** | **58,883** | **133,012** | [Operating Loss (Notes)](index=9&type=section&id=經營虧損%20%28附註%29) Operating loss is primarily influenced by inventory costs, employee benefits expenses, depreciation, amortization, inventory impairment provisions, and financial asset impairment losses. During the reporting period, inventory costs and employee benefits expenses significantly decreased, but inventory impairment provisions and financial asset impairment losses remained substantial components. Operating Loss Items | Operating Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Cost of inventories | 60,210 | 103,794 | | Employee benefits expenses | 54,163 | 105,765 | | Depreciation of property, plant and equipment | 43,643 | 40,898 | | Depreciation of right-of-use assets | 6,267 | 7,685 | | Amortisation of intangible assets | 3,059 | 3,153 | | Provision for impairment of inventories | 5,909 | 2,542 | | After-sales service expenses | 1,833 | 2,866 | | Gain on disposal of financial assets at fair value through profit or loss | (7,246) | – | | Net fair value gains on financial assets at fair value through profit or loss | (2,704) | (21,839) | | Net exchange gains | (3,264) | (5,656) | | Government grants and subsidies | (6,022) | (6,551) | | Net impairment losses on financial assets and contract assets | 22,566 | 44,553 | | **Total** | **178,414** | **277,210** | [Finance Costs – Net (Notes)](index=9&type=section&id=財務成本－淨額%20%28附註%29) During the reporting period, net finance costs increased from approximately **RMB 6.065 million** in the prior period to **RMB 10.876 million**, primarily due to increased interest expenses on borrowings. Net Finance Costs | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Finance income – bank interest income | 1,355 | 4,706 | | Finance costs – interest expenses on borrowings | (9,720) | (8,941) | | Finance costs – interest expenses on lease liabilities | (2,511) | (1,864) | | Finance costs – amount capitalised for property under construction | – | 34 | | **Finance costs – net** | **(10,876)** | **(6,065)** | [Income Tax Expense / (Credit) (Notes)](index=10&type=section&id=所得稅開支%EF%BC%8F%28抵免%29%20%28附註%29) During the reporting period, the Group recorded an income tax expense of approximately **RMB 2.396 million**, compared to an income tax credit of approximately **RMB 1.640 million** in the prior period, mainly due to changes in current and deferred income tax, with some entities benefiting from preferential tax rates for high-tech enterprises or Western Development regions. Income Tax Expense / (Credit) | Metric | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Current income tax | 7 | (58) | | Deferred income tax | 2,389 | (1,582) | | **Income tax expense / (credit)** | **2,396** | **(1,640)** | - The applicable corporate income tax rate for the Company's entities in mainland China is **25%**, but "High and New Technology Enterprises" enjoy a preferential corporate income tax rate of **15%**[17](index=17&type=chunk) - For the six months ended June 30, 2025, **15** of the Group's subsidiaries qualified as small and micro-enterprises, enjoying a **20%** corporate income tax rate; **two** subsidiaries benefited from a **15%** preferential income tax rate due to their location in China's Western Development regions[17](index=17&type=chunk) - Hong Kong subsidiaries are subject to Hong Kong profits tax at a rate of **16.5%**[18](index=18&type=chunk) [Loss Per Share (Notes)](index=10&type=section&id=每股虧損%20%28附註%29) For the six months ended June 30, 2025, basic loss per share was **RMB 0.36**, a reduction from **RMB 0.41** in the prior period, primarily due to a decrease in loss attributable to owners. Diluted loss per share was the same as basic loss per share due to the recorded loss. Basic Loss Per Share | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Loss attributable to shareholders of the Company (RMB thousand) | (184,248) | (212,297) | | Weighted average number of ordinary shares in issue (thousand shares) | 517,595 | 518,042 | | **Basic loss per share (expressed in RMB per share)** | **(0.36)** | **(0.41)** | - On December 5, 2023, the Company issued **79,520,000** ordinary shares through an initial public offering, raising a total subscription amount of approximately **RMB 1,422.9 million**[21](index=21&type=chunk) - As the Group recorded losses for the six months ended June 30, 2025, and 2024, share-based payments had an anti-dilutive effect on the Group's loss per share, thus diluted loss per share was the same as basic loss per share[22](index=22&type=chunk) [Trade and Bills Receivables (Notes)](index=11&type=section&id=貿易應收款項及應收票據%20%28附註%29) As of June 30, 2025, total trade and bills receivables were **RMB 1,639.974 million**, a decrease from **RMB 1,724.350 million** at year-end 2024, with approximately **33%** of receivables due within one year. Trade and Bills Receivables | Metric | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Current trade and bills receivables | 1,600,483 | 1,685,471 | | Non-current trade and bills receivables | 39,491 | 38,879 | | **Total** | **1,639,974** | **1,724,350** | Ageing of Trade and Bills Receivables | Ageing | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within 1 year | 541,897 | 546,315 | | 1 to 2 years | 561,359 | 671,533 | | 2 to 3 years | 566,009 | 637,914 | | Over 3 years | 481,531 | 358,009 | | **Total** | **2,150,796** | **2,213,771** | [Financial Assets at Fair Value Through Profit or Loss (Notes)](index=12&type=section&id=按公允價值計入損益的金融資產%20%28附註%29) As of June 30, 2025, financial assets at fair value through profit or loss primarily consisted of wealth management products, totaling **RMB 1,122.884 million**, an increase from **RMB 1,021.535 million** at year-end 2024. Financial Assets at Fair Value Through Profit or Loss | Metric | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Wealth management products | 1,122,884 | 1,021,535 | - These investments refer to investment funds managed by investment managers of various private equity funds or financial institutions, with investment objectives in cash or cash equivalents, government bonds, and other money market instruments[25](index=25&type=chunk) [Financial Assets at Fair Value Through Other Comprehensive Income (Notes)](index=12&type=section&id=按公允價值計入其他全面收益的金融資產%20%28附註%29) As of June 30, 2025, financial assets at fair value through other comprehensive income were unlisted equity investments, totaling **RMB 99.836 million**, consistent with year-end 2024. Financial Assets at Fair Value Through Other Comprehensive Income | Metric | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Unlisted equity investments | 99,836 | 99,836 | [Trade and Bills Payables (Notes)](index=12&type=section&id=貿易應付款項及應付票據%20%28附註%29) As of June 30, 2025, total trade and bills payables were **RMB 680.538 million**, a decrease from **RMB 791.894 million** at year-end 2024, with approximately **44.5%** of payables due within one year. Trade and Bills Payables | Metric | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Trade payables | 655,791 | 702,510 | | Bills payables | 24,747 | 89,384 | | **Total** | **680,538** | **791,894** | Ageing of Trade and Bills Payables | Ageing | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within 1 year | 302,951 | 517,389 | | 1 to 2 years | 209,755 | 189,631 | | 2 to 3 years | 160,719 | 83,918 | | Over 3 years | 7,113 | 956 | | **Total** | **680,538** | **791,894** | [Share Capital (Notes)](index=13&type=section&id=股本%20%28附註%29) As of June 30, 2025, the Company's share capital was **RMB 518.042 million**, and share premium was **RMB 3,657.827 million**, consistent with the beginning and end of 2024. Share Capital and Share Premium | Metric | January 1, 2025 and June 30, 2025 (RMB thousand) | January 1, 2024 and June 30, 2024 (RMB thousand) | | :--- | :--- | :--- | | Share capital | 518,042 | 518,042 | | Share premium | 3,657,827 | 3,657,827 | [Dividends (Notes)](index=13&type=section&id=股息%20%28附註%29) For the six months ended June 30, 2025, and 2024, neither the Company nor any of its current subsidiaries paid or declared any dividends. - For the six months ended June 30, 2025, and 2024, neither the Company nor any of its current subsidiaries paid or declared any dividends[30](index=30&type=chunk) [Events After the Reporting Period (Notes)](index=13&type=section&id=期後事項%20%28附註%29) Except as disclosed elsewhere in this announcement, there have been no significant events after June 30, 2025, up to the date of this announcement. - Except as disclosed elsewhere in this announcement, there have been no significant events after June 30, 2025, up to the date of this announcement[31](index=31&type=chunk) [Business Overview](index=14&type=section&id=業務概覽) The company focuses on product upgrades, R&D innovation, and governance optimization to enhance its market position and operational efficiency in the hydrogen energy sector. [Product Upgrades and Application Expansion](index=14&type=section&id=產品升級與應用拓展) The company continuously increases R&D investment, achieving breakthroughs in fuel cell stack and system technologies, completing a **0-360kW** power range layout, and actively expanding into new application scenarios like hydrogen-powered ships, hydrogen production equipment, drones, and two-wheelers, while deepening traditional advantageous areas such as transportation, rail, and power generation. - In water-cooled stack R&D, the new high-power Hongxin GIII stack's rated performance has been further enhanced, and the power generation-specific Hongxin GIV stack has been developed[33](index=33&type=chunk) - In air-cooled stack R&D, two air-cooled stacks have been developed based on demand for drones and hydrogen-powered two-wheelers[33](index=33&type=chunk) - Fuel cell system products have completed a **0 – 360kW** power range layout, adaptable to various application scenarios such as intelligent mining trucks, long-haul logistics heavy trucks, hydrogen locomotives, high-speed trains, ships, and stationary power generation[33](index=33&type=chunk) - The company is deploying hydrogen production equipment products across both alkaline electrolyzer and proton exchange membrane electrolyzer technology routes, focusing on independent development of megawatt-scale electrolyzer technology[33](index=33&type=chunk) - In domestic hydrogen transportation applications, hydrogen heavy trucks achieved rapid integration with China-Europe freight trains for the first time, and large-scale "water-rail-road" hydrogen multimodal transport was implemented in Chongqing, with nearly **100** hydrogen vehicles operating in the Northwest region, and Jiaxing Port delivering its **100th** hydrogen container truck[34](index=34&type=chunk) - Successfully won the bid for Inner Mongolia Autonomous Region's scientific and technological breakthrough project "Research on High-Density Rare Earth Solid-State Hydrogen Storage in Hydrogen Fuel Cell Rail Locomotives," providing **480kW** high-power hydrogen fuel cell systems to the Baogang Group consortium[36](index=36&type=chunk) - In overseas hydrogen power generation equipment applications, in collaboration with China State Construction Engineering (Hong Kong) Limited and Sinopec (Hong Kong) Limited, Hong Kong's first hydrogen power generation application project was launched at the Hong Kong-Shenzhen Innovation and Technology Park construction site[36](index=36&type=chunk) [R&D Innovation](index=17&type=section&id=研發革新) During the reporting period, R&D expenditure exceeded **RMB 67.8 million**, focusing on fuel cell stacks, systems, hydrogen power generation systems, marine applications, and innovative technology reserves to enhance product economics, reliability, and durability, while improving test center capabilities through CNAS certification. - R&D expenditure exceeded **RMB 67.8 million** during the reporting period[37](index=37&type=chunk) - In fuel cell stack R&D, the company continuously improved the performance of water-cooled stack products (Hongxin GIII, GIV) and expanded the air-cooled stack product matrix (drones **2-6kW**, two-wheelers **300-500W**)[37](index=37&type=chunk) - In fuel cell system R&D, the company continuously enhanced product performance, environmental adaptability, reliability, and durability, making smooth progress in key technologies such as adaptive fan coil control algorithms, electrochemical impedance spectroscopy detection, and fault prediction and health management[37](index=37&type=chunk) - In hydrogen power generation system R&D, the company optimized megawatt-scale stationary hydrogen fuel power generation systems, forming modular solutions, and achieving miniaturized, modular design and high reliability in distributed energy and backup power scenarios[37](index=37&type=chunk) - In marine application R&D, the C240 system comprehensively enhanced safety designs including explosion protection, ventilation, dual power switching, multi-point hydrogen concentration monitoring, and insulation isolation, while adopting intelligent temperature control algorithms[37](index=37&type=chunk) - In innovative technology reserves, the company developed megawatt-scale proton exchange membrane (PEM) electrolyzer technology and a new generation **1,000 Nm³/h** alkaline electrolyzer technology, along with a hydrogen production system featuring Safety Instrumented System (SIS) functions[38](index=38&type=chunk) - Guohong Hydrogen Energy R&D Center – Test Center passed the China National Accreditation Service for Conformity Assessment (CNAS) review, successfully obtaining national laboratory accreditation[38](index=38&type=chunk) [Governance Optimization](index=18&type=section&id=治理優化) The company is advancing internal management reforms around four core directions: "governance upgrade, organizational optimization, talent revitalization, and cost reduction and efficiency improvement," to enhance decision-making efficiency, risk control, organizational effectiveness, and talent vitality, achieving optimized operating cost structure and strengthened governance resilience. - The company is advancing internal management reforms and operational system upgrades around four core directions: "governance upgrade, organizational optimization, talent revitalization, and cost reduction and efficiency improvement"[39](index=39&type=chunk) - In the future, the governance system will be fully upgraded, with decision-making efficiency and risk control at its core, improving the authority and responsibility system and internal control mechanisms[39](index=39&type=chunk) - Optimize organizational structure, break down departmental barriers, build a flat structure, and strengthen market responsiveness and cross-functional collaboration capabilities[39](index=39&type=chunk) - The talent strategy is value-creation oriented, aiming to stimulate team innovation vitality and professional potential through talent pipeline development, precise incentive mechanisms, and optimized empowerment systems[39](index=39&type=chunk) - Management cost reduction and efficiency improvement will focus on full value chain optimization through rationalized authorization, streamlined processes, refined resource allocation, and deep application of business informatization[39](index=39&type=chunk) [Financial Review](index=19&type=section&id=財務回顧) This section provides a detailed financial review, analyzing revenue, cost of sales, gross profit, other income and gains, impairment losses, operating expenses, finance costs, income tax, and loss attributable to owners. [Revenue Analysis](index=19&type=section&id=收入分析) Total revenue for the reporting period was approximately **RMB 58.9 million**, a **55.7% year-on-year decrease**, primarily due to the hydrogen fuel cell industry's early commercialization stage, market sales pressure, and declining average selling prices. Hydrogen fuel cell system sales decreased, but stack sales grew significantly. - During the reporting period, the Group's revenue was approximately **RMB 58.9 million**, a **55.7% decrease** compared to the prior period[41](index=41&type=chunk) - The decrease in revenue was primarily due to the hydrogen fuel cell industry still being in its early commercialization stage, market sales pressure, and a decline in the average selling price of hydrogen fuel cell systems[41](index=41&type=chunk) Revenue by Product Type | Product Type | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Hydrogen fuel cell systems | 36,651 | 130,939 | | Hydrogen fuel cell stacks | 2,017 | 432 | | Hydrogen fuel cell system components | 1,035 | 619 | | Maintenance services | 18,651 | – | | Others | 529 | 1,022 | | **Total Revenue** | **58,883** | **133,012** | - Sales volume of hydrogen fuel cell stacks increased from **240.0 kW** in the prior period to **2,396.1 kW** in the reporting period, while the average selling price decreased from **RMB 1,799.4/kW** to **RMB 841.8/kW**[44](index=44&type=chunk)[45](index=45&type=chunk) - Sales volume of hydrogen fuel cell systems decreased from **34,645.0 kW** in the prior period to **11,090.0 kW** in the reporting period, while the average selling price decreased from **RMB 3,779.4/kW** to **RMB 3,304.9/kW**[44](index=44&type=chunk)[45](index=45&type=chunk) [Cost of Sales](index=20&type=section&id=銷售成本) Cost of sales decreased by **57.8%** from **RMB 132.242 million** in the prior period to **RMB 55.788 million** in the reporting period, primarily due to lower raw material costs, although inventory impairment losses significantly increased by **132.5%**. Cost of Sales Details | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | Year-on-year change (%) | | :--- | :--- | :--- | :--- | | Raw materials | 36,006 | 108,693 | (66.9) | | Employee benefits expenses | 3,712 | 8,664 | (57.2) | | Depreciation and amortization expenses | 8,287 | 6,658 | 24.5 | | Others | 1,873 | 5,685 | (67.1) | | Subtotal | 49,879 | 129,700 | (61.5) | | Impairment losses on inventories | 5,909 | 2,542 | 132.5 | | **Total** | **55,788** | **132,242** | **(57.8)** | - Raw material costs decreased by **66.9%** from approximately **RMB 108.7 million** in the prior period to approximately **RMB 36.0 million** in the reporting period, mainly due to a decline in sales revenue from hydrogen fuel cell systems[47](index=47&type=chunk) - Impairment losses on inventories increased by **132.5%** from approximately **RMB 2.5 million** in the prior period to approximately **RMB 5.9 million** in the reporting period, primarily due to further impairment provisions for long-aged obsolete raw materials[48](index=48&type=chunk) [Gross Profit and Gross Margin](index=22&type=section&id=毛利) The Group's gross profit significantly increased by **301.9%** from **RMB 0.8 million** in the prior period to **RMB 3.1 million** in the reporting period, with gross margin rising from **0.6%** to **5.3%**, primarily due to reduced unit costs from mass production of hydrogen fuel cell systems and higher gross margins from maintenance services. Gross Profit and Gross Margin Details | Product Type | 2025 (RMB thousand) | 2025 (%) | 2024 (RMB thousand) | 2024 (%) | | :--- | :--- | :--- | :--- | :--- | | Hydrogen fuel cell stacks | (594) | (29.5) | 204 | 47.2 | | Hydrogen fuel cell systems | 4,608 | 12.6 | 3,123 | 2.4 | | Hydrogen fuel cell system components and others | 330 | 21.1 | (15) | (0.9) | | Maintenance services | 4,660 | 25.0 | – | – | | Subtotal | 9,004 | 15.3 | 3,312 | 2.5 | | Less: Impairment losses on inventories | (5,909) | Not applicable | (2,542) | Not applicable | | **Total** | **3,095** | **5.3** | **770** | **0.6** | - The Group's gross profit significantly increased by **301.9%** from approximately **RMB 0.8 million** in the prior period to approximately **RMB 3.1 million** in the reporting period, with gross margin increasing from approximately **0.6%** to approximately **5.3%**[49](index=49&type=chunk) - The growth in gross profit and gross margin was primarily due to the Group's hydrogen fuel cell systems entering mass production settlement during the reporting period, leading to a decrease in unit cost of sales; and the higher gross margin from hydrogen fuel cell vehicle maintenance services provided by the Group[49](index=49&type=chunk) - During the reporting period, the Group's hydrogen fuel cell stacks recorded a negative gross profit, mainly due to significant market price reductions[49](index=49&type=chunk) [Other Income and Gains](index=22&type=section&id=其他收入) Other income decreased by **16.2%** to **RMB 6.2 million**, mainly due to reduced government grants; net other gains decreased by **68.6%** to **RMB 8.8 million**, primarily impacted by lower fair value gains and exchange rate fluctuations. - The Group's other income decreased by approximately **16.2%** from approximately **RMB 7.4 million** in the prior period to approximately **RMB 6.2 million** in the reporting period, mainly due to a reduction in government grants and subsidies[50](index=50&type=chunk) - The Group's net other gains decreased by approximately **68.6%** from approximately **RMB 28.0 million** in the prior period to approximately **RMB 8.8 million** in the reporting period, primarily due to a decrease in fair value gains of approximately **RMB 19.1 million**, impacted by exchange rate fluctuations[51](index=51&type=chunk) [Net Impairment Losses](index=23&type=section&id=金融資產及合同資產的減值虧損淨額) Net impairment losses on financial and contract assets decreased by **49.4%** to **RMB 22.6 million**, primarily due to a reduction in the provision for expected credit losses on trade receivables. - The Group's impairment losses on financial and contract assets decreased by approximately **49.4%** from approximately **RMB 44.6 million** in the prior period to approximately **RMB 22.6 million** in the reporting period[52](index=52&type=chunk) - The decrease was mainly due to a reduction in the provision for expected credit losses on trade receivables compared to the prior period[52](index=52&type=chunk) [Operating Expenses](index=23&type=section&id=行政開支) Administrative expenses decreased to **RMB 96.7 million**, mainly due to no share-based payment expenses and savings in employee compensation; selling expenses decreased to **RMB 14.1 million**, primarily due to reduced marketing expenses; R&D expenses increased to **RMB 67.8 million**, mainly due to continuous increased R&D investment. - The Group's administrative expenses decreased from approximately **RMB 113.5 million** in the prior period to approximately **RMB 96.7 million** in the reporting period, mainly due to no share-based payment expenses and savings in employee compensation[53](index=53&type=chunk) - The Group's selling expenses decreased from approximately **RMB 20.8 million** in the prior period to approximately **RMB 14.1 million** in the reporting period, mainly due to reduced marketing expenses[54](index=54&type=chunk) - The Group's R&D expenses increased from approximately **RMB 65.3 million** in the prior period to approximately **RMB 67.8 million** in the reporting period, mainly due to the company's continuous increased R&D investment in key projects such as fuel cell stacks, fuel cell systems, stationary generators, and water electrolysis hydrogen production equipment[55](index=55&type=chunk) [Net Finance Costs](index=23&type=section&id=融資成本淨額) Net finance costs increased to approximately **RMB 10.9 million**, primarily due to increased interest expenses on borrowings and decreased interest income from deposits. - During the reporting period, the Group's net finance costs were approximately **RMB 10.9 million** (prior period: approximately **RMB 6.1 million**)[56](index=56&type=chunk) - Primarily due to the combined effect of increased interest expenses on borrowings and decreased interest income from deposits[56](index=56&type=chunk) [Income Tax Expense / (Credit)](index=23&type=section&id=所得稅費用%EF%BC%8F%28抵免%29) During the reporting period, an income tax expense of approximately **RMB 2.4 million** was recorded, compared to an income tax credit of approximately **RMB 1.6 million** in the prior period. - During the reporting period, the Group recorded an income tax expense of approximately **RMB 2.4 million**[57](index=57&type=chunk) - An income tax credit of approximately **RMB 1.6 million** was recorded in the prior period[57](index=57&type=chunk) [Loss Attributable to Owners of the Company](index=24&type=section&id=本公司擁有人應佔虧損) During the reporting period, the loss attributable to owners of the Company was approximately **RMB 184.2 million**, narrowing from approximately **RMB 212.3 million** in the prior period. - During the reporting period, the loss attributable to owners of the Company was approximately **RMB 184.2 million**[58](index=58&type=chunk) - Approximately **RMB 212.3 million** in the prior period[58](index=58&type=chunk) [Liquidity, Financing and Capital Resources](index=24&type=section&id=流動資金、融資及資本資源) This section reviews the company's liquidity, financing activities, capital resources, including cash flow, borrowings, capital commitments, and foreign exchange risk. [Liquidity Overview](index=24&type=section&id=流動資金概況) The Group's primary liquidity sources include cash from operating activities, bank borrowings, and proceeds from H-share listing. As of June 30, 2025, cash and cash equivalents (including restricted cash) decreased by approximately **69.3%** to **RMB 95.2 million**, with net current assets of **RMB 1,909.6 million** and a current ratio of approximately **2.5**. - The Group's primary liquidity sources include cash generated from operating activities, bank borrowings, and proceeds from the listing of H shares on the Stock Exchange on December 5, 2023[59](index=59&type=chunk) - As of June 30, 2025, the Group's cash and cash equivalents (including restricted cash) were approximately **RMB 95.2 million**, a decrease of approximately **69.3%** from approximately **RMB 309.6 million** at the beginning of the reporting period[59](index=59&type=chunk) - As of June 30, 2025, the Group's net current assets were approximately **RMB 1,909.6 million**, and the current ratio was approximately **2.5**[59](index=59&type=chunk) [Borrowings and Pledges](index=24&type=section&id=集團資產的借款及抵押) As of June 30, 2025, the Group's total outstanding current and non-current borrowings were approximately **RMB 544.4 million**, a **2.8% year-on-year increase**, with long-term borrowings accounting for approximately **31.6%** of total borrowings, secured by various assets. Borrowing Term Grouping | Borrowing Term | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | Year-on-year change (%) | | :--- | :--- | :--- | :--- | | Within one year | 372,268 | 332,408 | 12.0 | | One to two years | 84,480 | 82,921 | 1.9 | | Two to five years | 87,602 | 114,405 | (23.4) | | **Total** | **544,350** | **529,734** | **2.8** | - As of June 30, 2025, the Group's bank loans were approximately **RMB 544.4 million**[61](index=61&type=chunk) - Secured borrowings include those collateralized by deposits, land use rights, property, plant and equipment, production lines, and rights to receivables[61](index=61&type=chunk) - As of June 30, 2025, long-term borrowings accounted for approximately **31.6%** of the Group's total borrowings, with weighted average effective interest rates for bank and third-party borrowings at **3.48%** and **3.39%**, respectively[61](index=61&type=chunk) [Gearing Ratio](index=25&type=section&id=資本負債比率) During the reporting period, the gearing ratio remained relatively stable at **0.2**. - From the prior period to the reporting period, the gearing ratio remained relatively stable at **0.2**[62](index=62&type=chunk) [Capital Commitments and Expenditures](index=25&type=section&id=資本承擔) As of June 30, 2025, the Group's contracted but unprovided capital commitments for the acquisition of property, plant, and equipment were approximately **RMB 277.9 million**, with capital expenditure during the reporting period of approximately **RMB 21.8 million**. - As of June 30, 2025, the Group's contracted but unprovided capital commitments for the acquisition of property, plant and equipment were approximately **RMB 277.9 million**[63](index=63&type=chunk) - During the reporting period, the Group's capital expenditure was approximately **RMB 21.8 million**[64](index=64&type=chunk) [Foreign Exchange and Exchange Rate Risk](index=25&type=section&id=外匯及匯率風險) The Group primarily operates in China, facing foreign exchange risk from RMB fluctuations against other currencies, but has not entered into hedging transactions, expecting no significant adverse impact from exchange rate volatility. - The Group primarily operates in China, thus facing foreign exchange risk arising from fluctuations in the exchange rates between RMB and other currencies involved in the Group's business operations[65](index=65&type=chunk) - As of June 30, 2025, the Group had not entered into any hedging transactions for foreign exchange risk[65](index=65&type=chunk) - The Directors do not expect fluctuations in the RMB exchange rate to have a significant adverse impact on the Group's operations[65](index=65&type=chunk) [Contingent Liabilities](index=26&type=section&id=或然負債) As of June 30, 2025, the company reported no significant contingent liabilities. - As of June 30, 2025, the Company had no significant contingent liabilities[66](index=66&type=chunk) [Future Development and Outlook](index=26&type=section&id=本公司的未來發展與展望) The company outlines its future strategy focusing on technology innovation, integrated hydrogen energy ecosystem development, business diversification, and lean operational management. [Commercialization of Technological Innovation](index=26&type=section&id=技術創新商業化) The company will adhere to product technology innovation, increase R&D investment in core products, focusing on breakthroughs in high power density and extreme environment tolerance for stacks, modular integration and multi-scenario adaptability for fuel cell systems, and core technologies and cost reduction bottlenecks for hydrogen production equipment, to consolidate its market leading position. - In the future, the company will adhere to product technology innovation, increase R&D investment in core products, and drive synergistic upgrades across the entire industry chain through technological innovation[68](index=68&type=chunk) - Key breakthroughs will focus on high power density and extreme environment tolerance for stack products, strengthening modular integration and multi-scenario adaptability for fuel cell system products, and overcoming core technology and large-scale cost reduction bottlenecks for hydrogen production equipment[68](index=68&type=chunk) - By continuously improving comprehensive product performance and accelerating systematic technological iteration, the company aims to provide efficient and reliable products and services for the commercial application of hydrogen energy technology, consolidating its leading market position in the hydrogen fuel cell industry[68](index=68&type=chunk) [Integrated Hydrogen Energy Ecosystem](index=26&type=section&id=氫能生態一體化) The company will commit to building an integrated "equipment + scenario + finance" development model, driving the hydrogen energy industry from demonstration to commercial scale through equipment cost reduction, scenario innovation, and financial capital synergy, creating a closed-loop ecosystem across the entire hydrogen energy value chain. - The company will be dedicated to building an innovative commercial ecosystem model for the hydrogen energy industry, fully promoting the integrated development of "equipment + scenario + finance"[69](index=69&type=chunk) - Solidifying the industrial foundation through equipment cost reduction, unleashing market momentum through scenario innovation, and connecting resource elements through financial capital[69](index=69&type=chunk)[70](index=70&type=chunk) - Systematically promoting the hydrogen energy industry from demonstration to commercial scale, creating a closed-loop ecosystem across the entire hydrogen energy value chain[70](index=70&type=chunk) [Business Diversification and Expansion](index=27&type=section&id=拓展業務多元化) The company will actively implement a "Hydrogen Energy+" diversified development strategy, consolidating its advantages in automotive hydrogen energy while deeply expanding into transportation applications like rail, marine, and two-wheelers, focusing on energy supply fields such as water electrolysis hydrogen production and distributed power generation, and exploring commercial applications of hydrogen drones in low-altitude economy scenarios. - The company will actively implement a "Hydrogen Energy+" diversified development strategy, maintaining its market leading position by continuously consolidating its first-mover advantage in automotive hydrogen energy equipment[71](index=71&type=chunk) - Continue to deeply expand into commercial transportation application fields such as rail transit, marine vessels, and two-wheeled motorcycles, promoting China's zero-carbon transformation in transportation[71](index=71&type=chunk) - Focus on deploying in energy supply fields such as water electrolysis hydrogen production and distributed power generation, striving to break through multi-scenario efficient energy supply technologies[71](index=71&type=chunk) - Actively respond to the national low-altitude economy development strategy, focusing on the commercial application of drones in new quality productive forces scenarios, and accelerating the product layout for hydrogen drone application scenarios[71](index=71&type=chunk) [Lean Operational Management](index=27&type=section&id=經營管理精益化) The company will implement a dual-track strategy of "talent efficiency enhancement and management system upgrade," continuously attracting top technical talent, optimizing talent pipeline structure, improving professional skills training, and enhancing cross-departmental collaboration efficiency through refined management and process optimization, thereby elevating corporate governance, management, and operational levels. - The company will improve its internal lean operational ecosystem through a dual-track internal management optimization strategy of "talent efficiency enhancement and management system upgrade"[72](index=72&type=chunk) - Regarding talent efficiency enhancement, the company will continuously attract top technical talent and collaborate deeply with domestic universities to jointly cultivate hydrogen energy technology composite talents through school-enterprise cooperation, continuously optimizing the company's talent pipeline structure[72](index=72&type=chunk) - In terms of management system upgrade, the company will further improve its management system, enhance management and operational efficiency, and strengthen cross-departmental collaboration efficiency through refined management and process optimization[72](index=72&type=chunk) - Simultaneously, the company will improve its business risk management mechanisms to ensure operational compliance and efficient resource allocation, achieving a comprehensive enhancement of corporate governance, management, and operations[72](index=72&type=chunk) [Other Information](index=28&type=section&id=其他資料) This section provides other relevant information, including major investments, employee details, IPO proceeds utilization, dividend policy, corporate governance, share repurchases, and post-reporting events. [Major Investments and Acquisitions/Disposals](index=28&type=section&id=重大投資以及重大投資或資本資產的未來計劃) During the reporting period, the Group held no major investments significantly impacting its operations and financial performance, nor did it undertake any major acquisitions or disposals of subsidiaries, associates, or assets. - During the reporting period, the Group held no major investments or events that had a significant impact on its operations and financial performance[73](index=73&type=chunk) - As of June 30, 2025, the Company had no specific plans for any major investments or acquisitions of capital assets[73](index=73&type=chunk) - During the reporting period, the Group did not undertake any major acquisitions or disposals of subsidiaries, associates, or assets[74](index=74&type=chunk) [Employees and Remuneration Policy](index=28&type=section&id=僱員及薪酬政策) As of June 30, 2025, the Group had **358** full-time employees, a decrease from **511** at year-end 2024. The company values employee training, with remuneration policies varying by function, and employee benefits expenses for the reporting period were approximately **RMB 54.2 million**. - As of June 30, 2025, the Group had **358** full-time employees (December 31, 2024: **511**), all located in China[75](index=75&type=chunk) - The company emphasizes employee training, providing safety production, fire safety, emergency medical training, and team-building activities[75](index=75&type=chunk) - Employee remuneration varies by function, including basic salary, bonuses, allowances, and performance incentives[75](index=75&type=chunk) - Employee benefits expenses (including Directors' remuneration) for the reporting period were approximately **RMB 54.2 million** (prior period: approximately **RMB 105.8 million**)[75](index=75&type=chunk) [Use of Net Proceeds from Global Offering](index=29&type=section&id=全球發售所得款項淨額的用途) The company's H-shares were listed on December 5, 2023, with net proceeds from the global offering of approximately **HKD 1,456.3 million**. As of June 30, 2025, approximately **HKD 62.7 million** has been utilized, mainly for capacity expansion, R&D, team building, and working capital, with the remaining funds expected to be fully utilized by the end of 2026. Use of Net Proceeds from Global Offering | Use of Proceeds | Approximate percentage of total net proceeds (%) | Net proceeds from listing (HKD million) | Net proceeds remaining as of December 31, 2024 (HKD million) | Net proceeds utilized during the reporting period (HKD million) | Net proceeds remaining as of June 30, 2025 (HKD million) | Expected timeline for full utilization of remaining net proceeds | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Expanding production capacity for hydrogen fuel cell stacks and systems | 40 | 582.6 | 531.9 | 11.6 | 520.3 | By end of 2026 | | R&D of hydrogen fuel cell stacks, systems, and hydrogen production equipment | 20 | 291.3 | 270.0 | 15.4 | 254.6 | By end of 2026 | | Investing in upstream companies, potential acquisitions, or establishing partnerships | 10 | 145.6 | 145.6 | 0 | 145.6 | By end of 2026 | | Developing downstream transportation and stationary applications and establishing joint ventures | 10 | 145.6 | 129.5 | 0 | 129.5 | By end of 2026 | | Team building, talent recruitment and training, upgrading IT infrastructure | 10 | 145.6 | 134.6 | 10.0 | 124.6 | By end of 2026 | | Working capital and other general corporate purposes | 10 | 145.6 | 124.8 | 25.7 | 99.1 | By end of 2026 | | **Total** | **100** | **1,456.3** | **1,336.4** | **62.7** | **1,273.7** | | [Dividend Policy](index=30&type=section&id=股息) The Board does not recommend the payment of an interim dividend for the reporting period. - The Board does not recommend the payment of an interim dividend for the reporting period[77](index=77&type=chunk) [Corporate Governance](index=30&type=section&id=企業管治守則) The Company has adopted the Corporate Governance Code set out in Appendix C1 of the Listing Rules and complied with all applicable code provisions during the reporting period. The Board believes that the Chairman also serving as General Manager facilitates the execution of business strategies and enhances operational efficiency. - The Company has adopted the Corporate Governance Code set out in Appendix C1 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[78](index=78&type=chunk) - The Board appointed Mr. Chen Xiaomin as General Manager, effective February 28, 2025, who also serves as Chairman[79](index=79&type=chunk) - The Board believes that having the same individual serve as both Chairman and Chief Executive Officer facilitates the execution of the Company's business strategies and enhances its operational efficiency[79](index=79&type=chunk) - Except as disclosed, the Company has complied with all applicable code provisions set out in Part 2 of Appendix C1 of the Listing Rules during the reporting period[79](index=79&type=chunk) [Share Repurchases](index=31&type=section&id=購買、出售或贖回本公司上市證券) During the reporting period, the Company repurchased a total of **894,500** H shares on the Stock Exchange for a total consideration of approximately **HKD 8,559.85 thousand**, demonstrating confidence in its business prospects, and holding the repurchased shares as treasury shares for purposes such as employee incentives. Repurchased H Shares Details | Month of Repurchase | Number of H shares repurchased | Highest price per share (HKD) | Lowest price per share (HKD) | Total consideration (HKD thousand) | | :--- | :--- | :--- | :--- | :--- | | January 2025 | 586,000 | 10.5 | 9.45 | 5,878.81 | | March 2025 | 26,500 | 9.09 | 8.8 | 237.89 | | April 2025 | 282,000 | 9.10 | 7.81 | 2,443.15 | - The Directors conducted the aforementioned H-share repurchases under the mandate approved by shareholders at the Annual General Meeting held on June 19, 2024, aiming to demonstrate the Company's confidence in its business prospects, which will benefit the Company and create value for shareholders in the long term[81](index=81&type=chunk) - All repurchased H shares are held by the Company as treasury shares, intended for purposes such as employee incentives, sale, or transfer to obtain liquidity[81](index=81&type=chunk) [Standard Code for Securities Transactions](index=31&type=section&id=證券交易的標準守則) The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers set out in Appendix C3 of the Listing Rules and confirmed that all Directors and Supervisors complied with the 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 of the Listing Rules[82](index=82&type=chunk) - Following specific and reasonable inquiries with all Directors and Supervisors, the Company confirmed that all Directors and Supervisors complied with the provisions of the Model Code during the reporting period[82](index=82&type=chunk) [Audit Committee Review](index=31&type=section&id=審核委員會審閱中期業績) The Audit Committee reviewed the Group's unaudited condensed interim financial results for the reporting period and discussed accounting principles, external auditor relationship, financial reporting system, internal controls, and risk management with management. - The Audit Committee reviewed with management, among other things, the accounting principles and practices adopted by the Group, the relationship and terms of engagement with the external auditors, the Company's financial reporting system, internal control, and risk management systems[83](index=83&type=chunk) - The Audit Committee reviewed the Group's unaudited condensed interim financial results for the reporting period[83](index=83&type=chunk) [Election of Board and Supervisory Board and Management Changes](index=32&type=section&id=選舉第二屆董事會及監事會) The company completed the election of its second Board of Directors and Supervisory Board, appointed a new senior management team, with Mr. Chen Xiaomin serving concurrently as Chairman and General Manager. - The Company completed the election of its second Board of Directors and Supervisory Board, with shareholders approving all proposed elections of Directors and Supervisors at the extraordinary general meeting held on March 28, 2025[84](index=84&type=chunk) - The Board announced the appointment of the new senior management team, with Mr. Chen Xiaomin as General Manager, and Mr. Liu Zhixiang, Mr. Yan Xiqiang, Ms. Li Jing, Mr. Wang Jun, and Mr. Xiao Xin as Deputy General Managers of the Company[85](index=85&type=chunk) - Mr. Chen Xiaomin's concurrent roles as Chairman and General Manager of the Company are conducive to enhancing the efficiency of the Company's overall strategic planning[79](index=79&type=chunk) [Proposed H-share Full Circulation](index=32&type=section&id=建議實施H股全流通) The Company submitted an application to the CSRC for the conversion of **41,303,978** domestic shares held by **12** shareholders into H shares and received a filing notice, valid for **12** months from August 19, 2025. - The Company's Board of Directors reviewed and approved the conversion of **41,303,978** domestic shares held by **12** shareholders into H shares[86](index=86&type=chunk) - On August 19, 2025, the Company obtained a filing notice from the China Securities Regulatory Commission regarding its proposed H-share full circulation, which will be valid for **12** months from August 19, 2025[86](index=86&type=chunk) - The detailed implementation plan for the conversion and listing has not yet been finalized and is subject to other relevant procedures required by the CSRC, the Stock Exchange, and other relevant domestic and overseas regulatory authorities[87](index=87&type=chunk) [Events After Reporting Period](index=33&type=section&id=報告期後事項) Except as disclosed elsewhere in this announcement, no other significant post-reporting events occurred after June 30, 2025, up to the date of this announcement. - Except as disclosed above, no other significant post-reporting events occurred after June 30, 2025, up to the date of this announcement[88](index=88&type=chunk) [Publication of Announcement](index=33&type=section&id=刊發未經審核中期業績公告及2025年中期報告) This announcement has been published on the HKEX website and the Company's website, and the 2025 interim report will be circulated and dispatched to shareholders in due course. - This announcement is published on the HKEX website (www.hkexnews.hk) and the Company's website (www.sinosynergypower.com)[89](index=89&type=chunk) - The Company will circulate and dispatch the 2025 interim report, containing all information required by the Listing Rules, to shareholders in due course, and it will also be published on the aforementioned websites[89](index=89&type=chunk)

[Unaudited Financial Summary](index=1&type=section&id=Unaudited%20Financial%20Summary) The company's unaudited financial summary for the six months ended June 30, 2025, shows a slight revenue decrease but growth in profit before tax and profit attributable to owners Unaudited Financial Summary for the Six Months Ended June 30 | Metric | 2025 (HK$ Thousand) | 2024 (Restated, HK$ Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue (Continuing Operations) | 9,428,291 | 9,486,866 | -0.6 | | Profit Before Tax | 4,105,084 | 3,848,913 | +6.7 | | Profit/(Loss) Attributable to Owners of the Company | 2,681,733 | 2,410,985 | +11.2 | | Earnings Per Share - Basic | HK$ 41.02 cents | HK$ 36.88 cents | +11.2 | | Interim Dividend Per Share | HK$ 26.66 cents | HK$ 23.97 cents | +11.2 | - The company completed the payment of a special dividend by way of a distribution in specie of Guangdong Land Holdings Limited shares on January 21, 2025[3](index=3&type=chunk) [Consolidated Financial Information](index=2&type=section&id=Consolidated%20Financial%20Information) This section presents the condensed consolidated financial statements, including statements of profit or loss, comprehensive income, and financial position [Condensed Consolidated Statement of Profit or Loss](index=2&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) For the six months ended June 30, 2025, the company's revenue from continuing operations slightly decreased, but profit before tax and profit attributable to owners increased, primarily due to significant finance cost savings Key Data from Condensed Consolidated Statement of Profit or Loss | Metric | 2025 (HK$ Thousand) | 2024 (Restated, HK$ Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue (Continuing Operations) | 9,428,291 | 9,486,866 | -0.6 | | Gross Profit | 5,246,448 | 5,307,492 | -1.1 | | Profit Before Tax | 4,105,084 | 3,848,913 | +6.7 | | Profit for the Period | 2,972,014 | 2,665,782 | +11.5 | | Profit Attributable to Owners of the Company (Continuing Operations) | 2,698,784 | 2,473,445 | +9.1 | | Profit Attributable to Owners of the Company (Discontinued Operations) | (17,051) | (62,460) | +72.7 | | Basic Earnings Per Share (Continuing Operations) | HK$ 41.28 cents | HK$ 37.83 cents | +9.1 | | Basic Earnings Per Share (Discontinued Operations) | HK$ (0.26) cents | HK$ (0.95) cents | +72.6 | - Finance costs significantly decreased from **HK$492,799 thousand** in 2024 to **HK$341,461 thousand** in 2025, effectively boosting profit before tax[5](index=5&type=chunk) - Losses from discontinued operations significantly narrowed from **HK$118,025 thousand** in 2024 to **HK$21,267 thousand** in 2025[5](index=5&type=chunk) [Condensed Consolidated Statement of Comprehensive Income](index=4&type=section&id=Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) Total comprehensive income for the period significantly increased, primarily due to a shift from a loss to a substantial gain in exchange differences on translation of foreign operations Key Data from Condensed Consolidated Statement of Comprehensive Income | Metric | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Profit for the Period | 2,972,014 | 2,665,782 | +11.5 | | Exchange differences on translation of foreign operations - Subsidiaries | 754,910 | (387,431) | N/A | | Exchange differences on translation of foreign operations - Associates | 55,733 | (25,157) | N/A | | Other comprehensive income for the period, net of tax | 854,096 | (406,255) | N/A | | Total Comprehensive Income for the Period | 3,826,110 | 2,259,527 | +69.3 | | Attributable to Owners of the Company | 3,324,696 | 2,121,850 | +56.7 | | Attributable to Non-controlling Interests | 501,414 | 137,677 | +264.2 | - Exchange differences on translation of foreign operations shifted from a negative value of **HK$412,588 thousand** in 2024 to a positive value of **HK$810,643 thousand** in 2025, driving comprehensive income growth[7](index=7&type=chunk) [Condensed Consolidated Statement of Financial Position](index=5&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, total assets significantly decreased due to the Guangdong Land distribution, but equity attributable to owners of the company increased, and net current assets declined Key Data from Condensed Consolidated Statement of Financial Position | Metric | June 30, 2025 (HK$ Thousand) | December 31, 2024 (Audited, HK$ Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Total Non-current Assets | 75,799,887 | 74,846,936 | +1.3 | | Total Current Assets | 21,297,597 | 60,748,467 | -64.9 | | Total Assets | 97,097,484 | 135,595,403 | -28.4 | | Total Current Liabilities | (17,992,857) | (55,737,907) | +67.7 | | Net Current Assets | 3,304,740 | 5,010,560 | -34.1 | | Net Assets | 55,849,970 | 56,675,473 | -1.4 | | Equity Attributable to Owners of the Company | 42,177,713 | 41,658,024 | +1.2 | | Non-controlling Interests | 13,672,257 | 15,017,449 | -8.9 | - Total assets decreased by approximately **HK$38.498 billion**, primarily due to the disposal of Guangdong Land Holdings Limited during the period[52](index=52&type=chunk) - Equity attributable to owners of the company increased by approximately **HK$520 million**, influenced by profit for the period, exchange differences on translation of foreign operations, and special dividend distribution[52](index=52&type=chunk) [Notes to the Interim Financial Information](index=7&type=section&id=Notes%20to%20the%20Interim%20Financial%20Information) This section provides detailed notes on the interim financial information, covering accounting policies, segment information, revenue, expenses, and other financial disclosures [1. Basic Information and Accounting Policies](index=7&type=section&id=1.%20Basic%20Information%20and%20Accounting%20Policies) The company completed the distribution in specie of Guangdong Land shares on January 21, 2025, reclassifying its business as discontinued operations and restating 2024 comparative figures, with interim financial information prepared under HKAS 34 and Appendix D2 of the Listing Rules - On January 21, 2025, the company distributed **1,261,799,423 shares** of Guangdong Land to its shareholders, representing approximately **99.9%** of the company's holdings in Guangdong Land[10](index=10&type=chunk) - The consolidated results of Guangdong Land were presented as discontinued operations for the period from January 1, 2025, to January 21, 2025, with comparative figures for the corresponding period in 2024 restated[10](index=10&type=chunk) - The interim financial information complies with Hong Kong Accounting Standard 34 and the disclosure requirements of Appendix D2 to the Listing Rules of the Stock Exchange of Hong Kong Limited[11](index=11&type=chunk) [2. Changes in Accounting Policies and Disclosures](index=8&type=section&id=2.%20Changes%20in%20Accounting%20Policies%20and%20Disclosures) During this interim period, the Group adopted revised Hong Kong Financial Reporting Standards, including amendments to HKAS 21, but these changes had no significant impact on financial position or performance - The Group has applied the revised Hong Kong Financial Reporting Standards issued by the HKICPA, which are mandatorily effective for annual periods beginning on or after January 1, 2025[13](index=13&type=chunk) - The application of the revised standards had no significant impact on the Group's financial position and performance for the current and prior periods and/or the disclosures in this interim financial information[13](index=13&type=chunk) [3. Operating Segment Information](index=8&type=section&id=3.%20Operating%20Segment%20Information) The Group is organized into seven reportable operating segments based on products and services: water resources, property investment, department store operations, power generation, hotel operations and management, roads and bridges, and other, with performance assessed by segment profit from continuing operations [Segment Description](index=8&type=section&id=Segment%20Description) The Group's seven operating segments include water resources, property investment, department store operations, power generation, hotel operations and management, roads and bridges, and an "Other" segment providing treasury and corporate services, with segment performance assessed based on adjusted profit before tax from continuing operations - The Group has seven reportable operating segments: water resources, property investment, department store operations, power generation, hotel operations and management, roads and bridges, and the "Other" segment[14](index=14&type=chunk) - Segment performance is assessed based on the measure of reportable segment profit/(loss) from continuing operations, which is adjusted profit/(loss) before tax from continuing operations[15](index=15&type=chunk) [Segment Revenue and Results](index=10&type=section&id=Segment%20Revenue%20and%20Results) Water resources remain the primary revenue and profit contributor, property investment saw significant growth, department store operations revenue sharply declined but turned profitable, while power generation and roads and bridges revenue decreased, and hotel operations and management revenue grew but profit declined Major Segment Revenue and Results (For the Six Months Ended June 30) | Segment | 2025 Revenue (HK$ Thousand) | 2024 Revenue (HK$ Thousand) | Revenue Change (%) | 2025 Results (HK$ Thousand) | 2024 Results (HK$ Thousand) | Results Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Water Resources | 7,153,052 | 7,051,438 | +1.4 | 3,402,202 | 3,421,332 | -0.6 | | Property Investment | 810,718 | 778,698 | +4.1 | 479,589 | 425,405 | +12.7 | | Department Store Operations | 216,529 | 389,592 | -44.4 | 23,891 | (9,387) | N/A | | Power Generation | 610,859 | 629,462 | -3.0 | 84,580 | 77,302 | +9.4 | | Hotel Operations and Management | 336,393 | 315,188 | +6.7 | 51,438 | 60,216 | -14.5 | | Roads and Bridges | 300,740 | 322,488 | -6.8 | 221,187 | 225,158 | -1.8 | | Other | - | - | N/A | (16,023) | (62,418) | +74.3 | - Department store operations revenue significantly decreased by **44.4%**, but successfully turned profitable, from a loss of **HK$9,387 thousand** in 2024 to a profit of **HK$23,891 thousand** in 2025[17](index=17&type=chunk) - Hotel operations and management segment revenue increased by **6.7%**, but segment results decreased by **14.5%**[18](index=18&type=chunk) [Segment Assets and Liabilities](index=13&type=section&id=Segment%20Assets%20and%20Liabilities) As of June 30, 2025, water resources segment assets and liabilities both increased, while property investment, department store operations, hotel operations and management, and roads and bridges segments saw decreases in both assets and liabilities, with total assets and liabilities significantly declining due to the Guangdong Land distribution Major Segment Assets and Liabilities (As of June 30) | Segment | 2025 Assets (HK$ Thousand) | 2024 Assets (HK$ Thousand) | Asset Change (%) | 2025 Liabilities (HK$ Thousand) | 2024 Liabilities (HK$ Thousand) | Liability Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Water Resources | 53,608,445 | 52,149,340 | +2.8 | 10,504,828 | 11,119,142 | -5.5 | | Property Investment | 16,923,632 | 16,994,202 | -0.4 | 1,128,907 | 1,011,872 | +11.6 | | Department Store Operations | 267,182 | 334,442 | -20.1 | 680,118 | 870,400 | -21.9 | | Power Generation | 2,755,480 | 2,717,818 | +1.4 | 399,439 | 326,852 | +22.2 | | Hotel Operations and Management | 2,137,224 | 2,193,045 | -2.6 | 365,655 | 389,037 | -6.0 | | Roads and Bridges | 5,033,391 | 5,073,350 | -0.8 | 262,808 | 285,940 | -8.0 | | Consolidated Total Assets | 97,097,484 | 135,595,403 | -28.4 | 41,247,514 | 78,919,930 | -47.8 | - The significant decrease in consolidated total assets and liabilities is primarily attributable to Guangdong Land being classified as assets and liabilities held for distribution, and its subsequent distribution completion[23](index=23&type=chunk) [4. Revenue from Continuing Operations](index=16&type=section&id=4.%20Revenue%20from%20Continuing%20Operations) Total revenue from continuing operations slightly decreased by 0.6%, mainly due to reduced revenue from department store operations, power generation, and roads and bridges, with water resources remaining the largest revenue source, showing growth in Hong Kong water supply but a decline in Mainland China water supply Revenue from Continuing Operations by Type of Goods or Services (For the Six Months Ended June 30) | Type of Goods or Services | 2025 (HK$ Thousand) | 2024 (Restated, HK$ Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Water supply income - Mainland China | 2,283,572 | 2,203,364 | +3.6 | | Water supply income - Hong Kong | 2,868,545 | 2,801,585 | +2.4 | | Sewage treatment service income | 471,227 | 506,781 | -7.0 | | Construction service income | 187,111 | 135,463 | +38.1 | | Sale of equipment | 216,672 | 334,400 | -35.2 | | Commission income from concessionaire sales | 71,825 | 175,285 | -59.0 | | Sale of goods | 128,241 | 191,420 | -33.0 | | Sale of electricity and steam | 610,859 | 629,462 | -3.0 | | Hotel income | 315,621 | 292,751 | +7.8 | | Toll income | 289,948 | 312,881 | -7.3 | | Total revenue from contracts with customers | 8,321,571 | 8,386,359 | -0.8 | | Finance income from service concession arrangements | 388,461 | 397,460 | -2.3 | | Rental income | 718,259 | 703,047 | +2.2 | | Total Revenue | 9,428,291 | 9,486,866 | -0.6 | - By geographical area, revenue from Mainland China was **HK$8,220,783 thousand** (2024: **HK$8,284,046 thousand**), and from Hong Kong was **HK$100,788 thousand** (2024: **HK$102,313 thousand**)[25](index=25&type=chunk) - Commission income from concessionaire sales and sales of goods in the department store operations segment both significantly decreased, contributing to the overall revenue reduction[24](index=24&type=chunk) [5. Finance Costs from Continuing Operations](index=18&type=section&id=5.%20Finance%20Costs%20from%20Continuing%20Operations) Finance costs from continuing operations significantly decreased by 30.8%, primarily due to reduced interest on bank and other borrowings, loans from fellow subsidiaries, and loans from associates Finance Costs from Continuing Operations (For the Six Months Ended June 30) | Metric | 2025 (HK$ Thousand) | 2024 (Restated, HK$ Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Interest on bank and other borrowings | 301,503 | 411,783 | -26.8 | | Interest on loans from Guangdong Holdings | 216 | - | N/A | | Interest on loans from fellow subsidiaries | 31,726 | 50,220 | -36.8 | | Interest on loans from associates | 3,064 | 15,319 | -80.0 | | Interest on lease liabilities | 7,426 | 14,212 | -47.8 | | Finance costs incurred | 344,353 | 492,799 | -30.1 | | Less: Interest capitalised | (2,892) | - | N/A | | Total finance costs for the period | 341,461 | 492,799 | -30.8 | - The annual interest rate for capitalised borrowings used for the development of properties under construction and operating concessions ranged from **2.45% to 2.76%** in the first half of 2025[26](index=26&type=chunk) [6. Profit Before Tax from Continuing Operations](index=19&type=section&id=6.%20Profit%20Before%20Tax%20from%20Continuing%20Operations) Profit before tax from continuing operations increased by 6.7%, mainly driven by reduced finance costs, despite a decrease in some revenue items like bank interest income, but with an increase in government grants Items Affecting Profit Before Tax from Continuing Operations (For the Six Months Ended June 30) | Item | 2025 (HK$ Thousand) | 2024 (Restated, HK$ Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Bank interest income | (43,827) | (78,996) | +44.5 | | Interest income from other financial assets measured at amortised cost | (40,587) | (6,399) | +534.3 | | Interest income from financial assets at fair value through profit or loss | (52,123) | (3,915) | +1231.5 | | Interest income from loans to fellow subsidiaries | (9,430) | - | N/A | | Cost of inventories sold | 642,123 | 840,182 | -23.6 | | Cost of services provided | 2,768,671 | 2,571,916 | +7.6 | | Depreciation of property, plant and equipment | 365,054 | 412,498 | -11.5 | | Government grants | (40,241) | (27,807) | +44.7 | | Amortisation of operating concessions | 771,049 | 767,276 | +0.5 | - Government grants increased by **44.7%** from **HK$27,807 thousand** in 2024 to **HK$40,241 thousand** in 2025[27](index=27&type=chunk)[30](index=30&type=chunk) [7. Income Tax Expense from Continuing Operations](index=20&type=section&id=7.%20Income%20Tax%20Expense%20from%20Continuing%20Operations) Income tax expense from continuing operations slightly increased, primarily due to an increase in deferred tax, while tax rates in Mainland China and Hong Kong remained unchanged Income Tax Expense from Continuing Operations (For the Six Months Ended June 30) | Metric | 2025 (HK$ Thousand) | 2024 (Restated, HK$ Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Current tax - Mainland China | 941,866 | 944,269 | -0.3 | | Under/(over) provision in prior years | 17,003 | (7,283) | N/A | | Current tax - Hong Kong | 5,216 | 7,203 | -27.5 | | Deferred tax | 147,718 | 120,917 | +22.2 | | Total tax expense for the period | 1,111,803 | 1,065,106 | +4.4 | - The corporate income tax rate in Mainland China is **25%**, and the Hong Kong profits tax rate is **16.5%**, both remaining unchanged from the previous year[31](index=31&type=chunk) [8. Discontinued Operations](index=21&type=section&id=8.%20Discontinued%20Operations) Guangdong Land completed its distribution on January 21, 2025, with its business classified as discontinued operations; as of the distribution date, losses from discontinued operations significantly narrowed, and net assets were distributed [Results of Discontinued Operations](index=21&type=section&id=Results%20of%20Discontinued%20Operations) For the period ended January 21, 2025, revenue from discontinued operations (Guangdong Land) significantly decreased, but loss before tax and loss for the period both substantially narrowed Results of Discontinued Operations (For the Period from January 1 to January 21, 2025) | Metric | Jan 1 to Jan 21, 2025 (HK$ Thousand) | For the Six Months Ended June 30, 2024 (HK$ Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 251,831 | 2,803,824 | -91.0 | | Gross Profit | 27,057 | 161,550 | -83.2 | | Loss Before Tax | (12,063) | (184,735) | +93.5 | | Loss for the Period | (21,267) | (118,025) | +82.0 | - Guangdong Land primarily engaged in property development and investment, and its business is no longer included in the operating segment information[33](index=33&type=chunk) [Net Assets of Discontinued Operations at Distribution Date](index=22&type=section&id=Net%20Assets%20of%20Discontinued%20Operations%20at%20Distribution%20Date) As of January 21, 2025, the carrying value of net assets distributed for Guangdong Land was **HK$2,335,074 thousand**, including significant property, plant and equipment, investment properties, and properties held for sale Details of Net Assets Distributed (As of January 21, 2025) | Item | Amount (HK$ Thousand) | | :--- | :--- | | Property, plant and equipment | 76,273 | | Investment properties | 8,924,967 | | Properties under development for sale | 13,313,856 | | Completed properties held for sale | 12,749,797 | | Total Assets | 39,986,628 | | Total Liabilities | (35,827,648) | | Carrying value of net assets | 4,158,980 | | Carrying value of net assets distributed | 2,335,074 | [Assets and Liabilities Classified as Held for Distribution](index=23&type=section&id=Assets%20and%20Liabilities%20Classified%20as%20Held%20for%20Distribution) As of December 31, 2024, Guangdong Land's assets and liabilities were reclassified as held for distribution, with total assets of **HK$40,663,069 thousand**, total liabilities of **HK$35,202,576 thousand**, and total net assets of **HK$5,460,493 thousand** Assets and Liabilities Classified as Held for Distribution (As of December 31, 2024) | Item | Amount (HK$ Thousand) | | :--- | :--- | | Total assets classified as held for distribution | 40,663,069 | | Total liabilities directly associated with assets classified as held for distribution | (35,202,576) | | Total net assets directly associated with the disposal group | 5,460,493 | [9. Dividends](index=24&type=section&id=9.%20Dividends) The Board declared an interim dividend of **HK$26.66 cents** per ordinary share for the six months ended June 30, 2025, an 11.2% increase from the prior year, and completed the special dividend distribution of Guangdong Land shares on January 21, 2025 Interim Dividend | Year | Dividend Per Ordinary Share | Total Amount (HK$ Thousand) | | :--- | :--- | :--- | | 2025 | HK$ 26.66 cents | 1,742,983 | | 2024 | HK$ 23.97 cents | 1,567,116 | - The interim dividend is expected to be paid on October 23, 2025, to shareholders whose names appear on the company's register of members on October 10, 2025[92](index=92&type=chunk) - The company completed the distribution of **1,261,799,423 shares** of Guangdong Land to shareholders as a special dividend on January 21, 2025[40](index=40&type=chunk) [10. Earnings Per Share](index=25&type=section&id=10.%20Earnings%20Per%20Share) Basic earnings per share from continuing operations increased by 9.1%, while the loss per share from discontinued operations significantly narrowed; diluted earnings per share are consistent with basic earnings per share due to no potential dilutive ordinary shares Data for Basic and Diluted Earnings/(Loss) Per Share Calculation (For the Six Months Ended June 30) | Metric | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Profit/(Loss) from continuing operations | 2,698,784 | 2,473,445 | | Profit/(Loss) from discontinued operations | (17,051) | (62,460) | | Total Profit/(Loss) | 2,681,733 | 2,410,985 | | Weighted average number of ordinary shares in issue (shares) | 6,537,821,440 | 6,537,821,440 | - Basic earnings per share from continuing operations were **HK$41.28 cents**, an increase of **9.1%** from **HK$37.83 cents** in 2024[6](index=6&type=chunk) - Basic earnings per share loss from discontinued operations narrowed from **HK$(0.95) cents** in 2024 to **HK$(0.26) cents** in 2025[6](index=6&type=chunk) [11. Other Financial Assets Measured at Amortized Cost](index=26&type=section&id=11.%20Other%20Financial%20Assets%20Measured%20at%20Amortized%20Cost) The Group's other financial assets measured at amortized cost are deposits placed with licensed banks in Mainland China, denominated in RMB, maturing within three years, and principal-protected - As of June 30, 2025, other financial assets measured at amortized cost amounted to **HK$3,478,204 thousand** (December 31, 2024: **HK$3,384,857 thousand**)[8](index=8&type=chunk) - These assets are deposits placed with various licensed banks in Mainland China, denominated in RMB, maturing within three years, and are principal-protected[43](index=43&type=chunk) [12. Trade and Other Receivables](index=26&type=section&id=12.%20Trade%20and%20Other%20Receivables) As of June 30, 2025, total trade receivables and bills increased to **HK$4,811,634 thousand**, with a significant increase in amounts overdue for over one year, indicating credit risk concentration with major customers Ageing Analysis of Trade Receivables and Bills (As of June 30) | Ageing | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Not overdue or overdue within 3 months | 2,967,878 | 2,282,981 | +30.0 | | Overdue 3 to 6 months | 260,396 | 303,668 | -14.2 | | Overdue 6 months to 1 year | 575,230 | 661,312 | -13.0 | | Overdue over 1 year | 1,046,110 | 627,659 | +66.7 | | Less: Loss allowance | (37,980) | (37,661) | +0.8 | | Total | 4,811,634 | 3,837,959 | +25.4 | - Trade receivables and bills are primarily related to water supply and sewage treatment businesses, with **10%** (December 31, 2024: **8%**) due from a major customer, indicating concentrated credit risk[44](index=44&type=chunk) [13. Trade and Other Payables](index=27&type=section&id=13.%20Trade%20and%20Other%20Payables) As of June 30, 2025, total trade payables and bills slightly decreased, with most due within three months, indicating good short-term solvency Ageing Analysis of Trade Payables and Bills (As of June 30) | Ageing | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Within 3 months | 5,297,002 | 5,590,197 | -5.2 | | 3 to 6 months | 2,127 | 21,376 | -90.1 | | Total | 5,299,129 | 5,611,573 | -5.6 | - Trade payables, accrued liabilities, and other payables are non-interest bearing and generally settled within **60 days**[46](index=46&type=chunk) [14. Bank and Other Borrowings](index=27&type=section&id=14.%20Bank%20and%20Other%20Borrowings) As of June 30, 2025, total bank and other borrowings decreased, with loans from associates eliminated but new loans from the ultimate holding company introduced Composition of Bank and Other Borrowings (As of June 30) | Source | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Loans from Guangdong Holdings | 71,060 | - | N/A | | Loans from fellow subsidiaries | 2,353,088 | 2,570,889 | -8.4 | | Loans from associates | - | 917,915 | -100.0 | - Total financial borrowings from continuing operations amounted to **HK$21.177 billion** (December 31, 2024: **HK$23.862 billion**), with **17.0%** denominated in HKD and **83.0%** in RMB[76](index=76&type=chunk) [15. Contingent Liabilities](index=27&type=section&id=15.%20Contingent%20Liabilities) As of June 30, 2025, the Group's bank guarantees for mortgage loans on properties sold significantly decreased to **HK$1,007 thousand**, primarily due to the distribution of Guangdong Land - The Group provided guarantees for mortgage loans granted by banks to purchasers of the Group's properties held for sale, amounting to **HK$1,007 thousand** (December 31, 2024: **HK$4,714,446 thousand**)[48](index=48&type=chunk) - The significant reduction in guaranteed amounts is mainly due to **HK$4,709,488 thousand** from Guangdong Land as of December 31, 2024, which was distributed during the period[48](index=48&type=chunk) [Management Discussion and Analysis](index=28&type=section&id=Management%20Discussion%20and%20Analysis) This section provides an overview of the Group's performance, business segments, financial position, and future outlook, including key risks and uncertainties [Results and Financial Review](index=28&type=section&id=Results%20and%20Financial%20Review) Consolidated profit attributable to owners of the company increased by 11.2% to **HK$2.682 billion** for the period, with basic earnings per share growing proportionally; revenue from continuing operations slightly decreased by 0.6%, but profit before tax increased by 6.7% due to finance cost savings; total assets decreased due to Guangdong Land disposal, but equity attributable to owners of the company increased Financial Performance Overview (For the Six Months Ended June 30) | Metric | 2025 (HK$ Billion) | 2024 (HK$ Billion) | Change (%) | | :--- | :--- | :--- | :--- | | Consolidated Profit Attributable to Owners of the Company | 2.682 | 2.411 | +11.2 | | Basic Earnings Per Share (HK cents) | 41.02 | 36.88 | +11.2 | | Consolidated Revenue from Continuing Operations | 9.428 | 9.487 | -0.6 | | Consolidated Profit Before Tax from Continuing Operations | 4.105 | 3.849 | +6.7 | | Consolidated Profit Attributable to Owners of the Company from Continuing Operations | 2.699 | 2.473 | +9.1 | - The revenue decrease primarily stemmed from department store operations, roads and bridges, and power generation businesses[51](index=51&type=chunk) - Total assets decreased by approximately **HK$38.498 billion**, mainly due to the disposal of Guangdong Land Holdings Limited during the period[52](index=52&type=chunk) [Business Review](index=29&type=section&id=Business%20Review) During the period, water resources remained the core profit contributor with increased revenue and profit from the Dongjiang Water Supply project; property investment revenue and profit improved, while department store operations revenue sharply declined; hotel business revenue grew but profit fell; energy project power sales increased but revenue decreased; roads and bridges revenue and profit both declined; Guangdong Land completed its distribution, with narrowing losses from its discontinued operations [Water Resources](index=29&type=section&id=Water%20Resources) Total water supply from the Dongjiang Water Supply project to Hong Kong, Shenzhen, and Dongguan slightly decreased, but both revenue and profit before tax increased; other water resources projects secured new contracts, with adjusted total designed water supply and sewage treatment capacities, leading to increased revenue but decreased profit before tax Key Data for Dongjiang Water Supply Project (For the Six Months Ended June 30) | Metric | 2025 | 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Total water supply to Hong Kong, Shenzhen and Dongguan (100 million tons) | 11.47 | 11.59 | -1.0 | | Revenue (HK$ Billion) | 3.506 | 3.485 | +0.6 | | Water supply revenue to Hong Kong (HK$ Billion) | 2.869 | 2.802 | +2.4 | | Water supply revenue to Shenzhen and Dongguan (HK$ Billion) | 0.637 | 0.683 | -6.7 | | Profit Before Tax (HK$ Billion) | 2.396 | 2.325 | +3.1 | - The Hong Kong water supply agreement stipulates a basic water price of **HK$5,259,000,000** for 2025, with a water price reduction mechanism in place[54](index=54&type=chunk) - During the period, a new water resources project in Maoming City, Guangdong, was successfully secured, with a total designed sewage treatment capacity of **194,000 tons per day** and an estimated total investment of approximately **RMB400 million**[56](index=56&type=chunk) - Other water resources projects' total revenue increased by **2.3%** to **HK$3,680,319 thousand**, but profit before tax decreased by **6.2%** to **HK$1,079,398 thousand**[60](index=60&type=chunk) [Property Investment](index=34&type=section&id=Property%20Investment) Guangdong Teemall's property investment business in Mainland China saw a 3.6% increase in revenue and a 9.7% increase in profit before tax, driven by higher average rental levels and improved occupancy rates for some properties; Hong Kong GDH Investment Tower experienced a slight revenue decrease Guangdong Teemall Property Investment Business Revenue (For the Six Months Ended June 30) | Property | 2025 Revenue (HK$ Thousand) | 2024 Revenue (HK$ Thousand) | Change (%) | 2025 Average Occupancy Rate (%) | | :--- | :--- | :--- | :--- | :--- | | Teemall Plaza – Shopping Mall | 352,146 | 349,486 | +0.8 | 99.5 | | Teemall Plaza – Tower | 74,837 | 87,397 | -14.4 | 79.9 | | Panyu Teemall Shopping Centre | 139,411 | 120,017 | +16.2 | 95.5 | | Tianjin Teemall Shopping Centre | 144,924 | 140,127 | +3.4 | 95.8 | | Guangzhou Animation City | 40,626 | 44,557 | -8.8 | 99.8 | | Shenzhen Teemall | 47,457 | 32,088 | +47.9 | 93.4 | | GDH Land | 22,108 | 19,551 | +13.1 | 93.3 | | Total | 821,509 | 793,223 | +3.6 | N/A | - Guangdong Teemall's property investment business profit before tax increased by **9.7%** to **HK$491,600 thousand**[61](index=61&type=chunk) - Hong Kong GDH Investment Tower's average occupancy rate was **93.3%** (2024: **96.4%**), with total revenue decreasing by **3.0%** to **HK$23,852 thousand**[63](index=63&type=chunk) [Department Store Operations](index=35&type=section&id=Department%20Store%20Operations) Total revenue from department store operations significantly decreased by 44.4% during the period, mainly due to a sharp decline in Teemall Department Store revenue and the closure of the Huadu store; despite the revenue decline, profit before tax increased by 18.5%, achieving a turnaround to profitability Department Store Revenue (For the Six Months Ended June 30) | Department Store | 2025 Revenue (HK$ Thousand) | 2024 Revenue (HK$ Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Teemall Department Store | 156,746 | 309,523 | -49.4 | | Wanbo Department Store | 19,687 | 23,134 | -14.9 | | Dongpu Department Store | 20,320 | 25,045 | -18.9 | | Aoti Department Store | 19,654 | 20,892 | -5.9 | | Huadu Store | - | 10,956 | -100.0 | | TeemLife Beijing Road Home Furnishing Store | 122 | 42 | +100.0 | | Total | 216,529 | 389,592 | -44.4 | - Profit before tax (excluding fair value changes of investment properties) increased by **18.5%** to **HK$45,828 thousand** during the period[64](index=64&type=chunk) [Hotel Operations and Management](index=35&type=section&id=Hotel%20Operations%20and%20Management) The number of hotels managed by the Group decreased, but revenue from hotel holding, operations, and management increased by 6.8%; average room rates and occupancy rates both improved, but profit before tax decreased by 19.8% - The Group manages **17 hotels** (December 31, 2024: **19 hotels**), with **4** located in Hong Kong and **13** in Mainland China[66](index=66&type=chunk) - Guangdong Sheraton Hotel's average room rate was **HK$1,257** (2024: **HK$1,291**), with an average occupancy rate of **93.8%** (2024: **93.4%**)[66](index=66&type=chunk) - The average room rate for the other six hotels was **HK$725** (2024 for five hotels: **HK$698**), with an average occupancy rate of **72.8%** (2024 for five hotels: **68.3%**)[66](index=66&type=chunk) - Revenue from hotel holding, operations, and management increased by **6.8%** to **HK$336,542 thousand**, but profit before tax decreased by **19.8%** to **HK$51,058 thousand**[67](index=67&type=chunk) [Energy Projects](index=36&type=section&id=Energy%20Projects) Guangdong Energy projects saw a significant increase in power sales, but revenue slightly decreased due to lower electricity prices and exchange rate effects, while profit before tax increased; Guangdong Yuedian Jinghai Power Generation experienced declines in both power sales and revenue, leading to a reduced share of profit for the Group Key Data for Energy Projects (For the Six Months Ended June 30) | Project | Metric | 2025 | 2024 | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Guangdong Energy | Power sales (100 million kWh) | 16.79 | 13.62 | +23.3 | | | Revenue (HK$ Thousand) | 769,657 | 804,563 | -4.3 | | | Profit Before Tax (HK$ Thousand) | 91,177 | 74,338 | +22.7 | | Yuedian Jinghai Power Generation | Power sales (100 million kWh) | 62.16 | 68.67 | -9.5 | | | Revenue (HK$ Thousand) | 2,402,480 | 3,255,091 | -26.2 | | | Group's share of profit (HK$ Thousand) | 18,264 | 54,800 | -66.7 | - Guangdong Energy's revenue decrease was primarily due to the combined impact of lower electricity prices and a **1.4%** depreciation of RMB against HKD[68](index=68&type=chunk) [Roads and Bridges](index=36&type=section&id=Roads%20and%20Bridges) Xingliu Expressway experienced decreases in average daily toll traffic and toll revenue, leading to a reduction in profit before tax; Yinping Project's accumulated construction costs increased, and recognized interest, management fees, and maintenance fees combined grew, resulting in an increase in profit before tax Key Data for Roads and Bridges Projects (For the Six Months Ended June 30) | Project | Metric | 2025 | 2024 | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Xingliu Expressway | Average daily toll traffic (vehicles) | 24,457 | 26,954 | -9.3 | | | Toll revenue (HK$ Thousand) | 289,948 | 312,881 | -7.3 | | | Profit Before Tax (HK$ Thousand) | 147,110 | 161,899 | -9.1 | | Yinping Project | Interest, management fees and maintenance fees (HK$ Thousand) | 80,750 | 77,486 | +4.2 | | | Profit Before Tax (HK$ Thousand) | 68,984 | 65,726 | +5.0 | - Accumulated construction costs for the Yinping Project were approximately **RMB2.09 billion** (approximately **HK$2.291 billion**), an increase from the end of 2024[72](index=72&type=chunk) [Discontinued Operations (Management Discussion and Analysis)](index=37&type=section&id=Discontinued%20Operations%20(MD%26A)) Guangdong Land completed its distribution on January 21, 2025; its revenue for the period significantly decreased, but loss before tax substantially narrowed, achieving a profit before tax after excluding fair value changes and finance costs Guangdong Land Discontinued Operations Performance (For the Period from January 1 to January 21, 2025) | Metric | Jan 1 to Jan 21, 2025 (HK$ Thousand) | For the Six Months Ended June 30, 2024 (HK$ Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 251,831 | 2,803,824 | -91.0 | | Revenue from property sales | 247,894 | 2,778,718 | -91.1 | | Loss Before Tax | 9,516 | 282,564 | +96.6 | | Profit Before Tax excluding fair value changes and finance costs | 13,454 | (105,005) | N/A | - Guangdong Land is no longer a subsidiary of the company, and its consolidated results are presented as discontinued operations in this announcement[73](index=73&type=chunk) [Liquidity, Gearing Ratio and Financial Resources](index=38&type=section&id=Liquidity%2C%20Gearing%20Ratio%20and%20Financial%20Resources) The Group's cash and bank balances from continuing operations slightly decreased, total financial borrowings declined, and the gearing ratio significantly improved; net cash inflow from operating activities decreased, but existing cash resources and stable cash flow are sufficient to meet debt obligations and business operations Key Financial Resources Data (As of June 30) | Metric | 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and bank balances (Continuing Operations, HK$ Billion) | 12.036 | 12.154 | | Financial borrowings (Continuing Operations, HK$ Billion) | 21.177 | 23.862 | | Gearing ratio (%) | 24.7 | 30.9 | | EBITDA to finance costs ratio (times) | 16.2 | 10.5 | | Net cash inflow from operating activities (HK$ Billion) | 3.339 | 4.876 | - Of the financial borrowings from continuing operations, **95.4%** are floating rate borrowings, **3.7%** are fixed rate borrowings, and **0.9%** are non-interest bearing borrowings[76](index=76&type=chunk) - The Group's credit facilities for continuing operations amounted to **HK$9.473 billion** (December 31, 2024: **HK$9.349 billion**)[77](index=77&type=chunk) [Pledged Assets and Contingent Liabilities (Management Discussion and Analysis)](index=39&type=section&id=Pledged%20Assets%20and%20Contingent%20Liabilities%20(MD%26A)) The Group's pledged assets primarily involve revenue rights from water supply, sewage treatment, and toll road businesses, used to secure bank and other borrowings; contingent liabilities significantly decreased, mainly due to the release of related guarantee obligations after the Guangdong Land distribution - Revenue rights from certain water supply, sewage treatment, and toll road businesses are pledged to secure bank and other borrowings totaling **HK$12.449 billion** (December 31, 2024: **HK$12.413 billion**)[78](index=78&type=chunk) - The Group provided guarantees to certain banks for mortgage loans granted to purchasers of properties sold, amounting to **HK$1 million** (December 31, 2024: **HK$4.714 billion**), with the significant reduction primarily due to the Guangdong Land distribution[79](index=79&type=chunk) [Capital Expenditure](index=39&type=section&id=Capital%20Expenditure) Capital expenditure increased to **HK$566 million** during the period, primarily for the acquisition of property, plant and equipment, and construction costs of water supply and sewage treatment plants Capital Expenditure (For the Six Months Ended June 30) | Year | Amount (HK$ Billion) | | :--- | :--- | | 2025 | 0.566 | | 2024 | 0.445 | - Capital expenditure primarily relates to the acquisition of property, plant and equipment, and construction costs of water supply and sewage treatment plants (including receivables from operating concessions and service concession arrangements)[80](index=80&type=chunk) [Exchange Rate and Interest Rate Fluctuation Risks and Related Hedging](index=39&type=section&id=Exchange%20Rate%20and%20Interest%20Rate%20Fluctuation%20Risks%20and%20Related%20Hedging) The Group faces RMB exchange rate fluctuations and interest rate risks from floating rate borrowings; the company manages foreign exchange risk through optimizing funding arrangements and adjusting financing methods but does not use derivative financial instruments to hedge foreign exchange and interest rate risks - As of June 30, 2025, RMB borrowings from continuing operations totaled **HK$17.571 billion** (December 31, 2024: **HK$19.356 billion**)[81](index=81&type=chunk) - The Group has natural hedging mechanisms and dynamically monitors exchange rate exposure but does not use derivative financial instruments to hedge foreign exchange risk[81](index=81&type=chunk) - As of June 30, 2025, floating rate borrowings from continuing operations totaled **HK$20.193 billion** (December 31, 2024: **HK$21.975 billion**)[81](index=81&type=chunk) - The Group does not use interest rate hedging to manage interest rate risk and will continue to review market trends and operational needs[81](index=81&type=chunk) [Principal Risks and Uncertainties](index=40&type=section&id=Principal%20Risks%20and%20Uncertainties) The Group faces multiple risks including macroeconomic, foreign exchange, market competition and project safety management; the company addresses these challenges by closely monitoring the macroeconomy, optimizing funding arrangements, enhancing product efficiency and strengthening safety management - Macroeconomic risks: International trade barriers, geopolitical conflicts, and weakening consumer confidence increase uncertainty in economic recovery[82](index=82&type=chunk) - Foreign exchange risks: Primary operations are concentrated in Mainland China, facing exchange gains/losses and foreign currency translation risks of net assets due to exchange rate fluctuations[83](index=83&type=chunk) - Market competition risks: Intensified market competition may affect expansion capabilities and project investment returns[84](index=84&type=chunk) - Project safety management risks: Including product safety and operational personnel safety risks, managed through standardized management, quality control, regular inspections, and employee training[85](index=85&type=chunk) [Employees and Remuneration Policy](index=41&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the Group's total number of employees decreased to 10,180, with a reduction in total remuneration for continuing operations; the company is committed to building a learning organization, motivating employees through market-competitive remuneration policies and performance evaluation systems, and providing multi-dimensional professional training Employee Count and Total Remuneration | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total employees | 10,180 | 10,759 | | Total remuneration for continuing operations (HK$ Thousand) | 752,598 | 828,537 | - The remuneration policy aims to ensure market competitiveness and alignment with development goals and performance, including fixed salaries, discretionary incentives, insurance, and benefits[86](index=86&type=chunk) - The company provides multi-dimensional professional training in legal compliance, investment expansion, financial management, and sustainable development to enhance employees' comprehensive quality and professional capabilities[87](index=87&type=chunk) [Review and Outlook](index=42&type=section&id=Review%20and%20Outlook) In the first half of 2025, the global economy faced geopolitical tensions and trade policy uncertainties, while China's economy maintained a moderate recovery under external pressure; looking ahead, the Group will adhere to a "seek progress while maintaining stability, improve quality and efficiency" strategy, consolidate core businesses, optimize governance and risk management, and actively grasp opportunities in the Guangdong-Hong Kong-Macao Greater Bay Area to transform and upgrade the water resources segment towards high-value-added areas - Since 2025, the global economy has faced geopolitical tensions, tariff increases, and trade policy uncertainties, while China's economy has maintained a stable and progressive trend under external pressure[88](index=88&type=chunk) - The Group will adhere to the "seek progress while maintaining stability, improve quality and efficiency" development strategy, maintain core business operational standards, and optimize corporate governance and risk management mechanisms[89](index=89&type=chunk) - The Group will focus resources on extending the water resources segment towards high-value-added areas, actively seize potential development opportunities brought by the "Outline Development Plan for the Guangdong-Hong Kong-Macao Greater Bay Area," and proactively explore market investment and M&A opportunities[89](index=89&type=chunk) [Corporate Governance and Other Information](index=43&type=section&id=Corporate%20Governance%20and%20Other%20Information) This section details the company's adherence to corporate governance codes, share transactions, interim dividend declarations, share transfer registration, and review and publication of interim results [Corporate Governance Code](index=43&type=section&id=Corporate%20Governance%20Code) The company has complied with the code provisions of the Corporate Governance Code as set out in Appendix C1 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited for the six months ended June 30, 2025 - The company is committed to achieving the highest standards of corporate governance and has applied the principles of the Corporate Governance Code set out in Appendix C1 of the Listing Rules[90](index=90&type=chunk) [Purchase, Sale or Redemption of Listed Securities](index=43&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20Listed%20Securities) During the six months ended June 30, 2025, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities on the Stock Exchange of Hong Kong Limited - Neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities on the Stock Exchange of Hong Kong Limited[91](index=91&type=chunk) [Interim Dividend (Corporate Governance)](index=43&type=section&id=Interim%20Dividend%20(Corporate%20Governance)) The Board has resolved to declare an interim dividend of **HK$26.66 cents** per ordinary share for the six months ended June 30, 2025, expected to be paid on October 23, 2025 - The Board declared an interim dividend of **HK$26.66 cents** per ordinary share (2024: **HK$23.97 cents**) for the six months ended June 30, 2025[92](index=92&type=chunk) - The interim dividend is expected to be paid on Thursday, October 23, 2025, to shareholders whose names appear on the company's register of members at the close of business on Friday, October 10, 2025[92](index=92&type=chunk) [Suspension of Share Transfer Registration](index=43&type=section&id=Suspension%20of%20Share%20Transfer%20Registration) The company will suspend share transfer registration on Friday, October 10, 2025, to determine eligibility for the interim dividend - The company will suspend share transfer registration on Friday, October 10, 2025, and no share transfers will be processed on that day[93](index=93&type=chunk) - To ensure eligibility for the interim dividend, shareholders must submit all share transfer documents to the company's share registrar by **4:30 p.m.** on Thursday, October 9, 2025[93](index=93&type=chunk) [Review of Interim Results](index=43&type=section&id=Review%20of%20Interim%20Results) The Audit Committee has reviewed the Group's unaudited interim financial report for the six months ended June 30, 2025, which has also been reviewed by KPMG - The interim financial report has been reviewed by the company's Audit Committee and independent auditor KPMG[94](index=94&type=chunk) - The review report will be sent to shareholders along with the interim report[94](index=94&type=chunk) [Publication of Interim Results and Interim Report](index=44&type=section&id=Publication%20of%20Interim%20Results%20and%20Interim%20Report) This interim results announcement has been published on the company's and HKEX websites; the interim report will be dispatched to shareholders and posted on the aforementioned websites - This interim results announcement has been published on the company's website (www.gdi.com.hk) and the HKEX website (www.hkexnews.hk)[95](index=95&type=chunk) - The company's interim report for the six months ended June 30, 2025, will be dispatched to the company's shareholders and posted on the aforementioned websites when appropriate[95](index=95&type=chunk)