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之內容概不 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 會 就 因 本 公 告全部或任何部分內容而產生或因倚賴該等內容而引致之任何損失承擔任何 責 任。 萬科海外投資控股有限公司 VANKE OVERSEAS INVESTMENT HOLDING COMPANY LIMITED （於 開 曼 群 島 註 冊 成 立 之 有 限 公 司） （股 份 代 號：01036） 截至二零二五年六月三十日止六個月 未經審核業績公告 中期業績 萬科海外投資控股有限公司（「本公司」，連 同 其 附 屬 公 司 統 稱「本集團」）董事會 （「董事會」）欣然公佈本集團截至二零二五年六月三十日止六個月（「期 間」）之 未 經 審 核 中 期 業 績 如 下： 綜合損益表 截至二零二五年六月三十日止六個月 | 未經審核 | 截至六月三十日止六個月 | | | | | | | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- ...

[Financial Summary](index=1&type=section&id=Financial%20Summary) This section provides a concise overview of the company's financial performance and position for the six months ended June 30, 2025 As at June 30, 2025 Financial Summary | Indicator | 2025 (HK$ Million) | 2024 (HK$ Million) | Change | | :--- | :--- | :--- | :--- | | Revenue | 69.1 | 107.8 | -35.9% | | EBITDA* | (14.7) | (16.9) | -13.0% | | Loss for the Period | (38.4) | (43.7) | -12.1% | | **As at** | **June 30, 2025** | **December 31, 2024** | **Change** | | Gearing Ratio | 13.0% | 12.7% | 0.3 percentage points | | Net Gearing Ratio** | 10.0% | 8.0% | 2.0 percentage points | * EBITDA refers to earnings before finance costs, tax, depreciation and amortisation ** Refers to the ratio of net balance of total bank borrowings less bank balances and cash and restricted bank deposits to equity [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) This statement presents the company's financial performance, including revenue, expenses, and total comprehensive income for the period 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 | 69,134 | 107,821 | | Cost of Sales | (64,094) | (98,586) | | Gross Profit | 5,040 | 9,235 | | Other Income | 1,079 | 1,120 | | Other Gains and Losses | 1,782 | 175 | | Selling and Distribution Costs | (4,449) | (5,867) | | Administrative Expenses | (16,112) | (17,983) | | Other Expenses | (27,489) | (29,546) | | Finance Costs | (1,662) | (1,831) | | Loss Before Tax | (41,811) | (44,697) | | Income Tax Credit | 3,405 | 1,020 | | Loss for the Period Attributable to Owners of the Company | (38,406) | (43,677) | | Exchange Differences on Translation of Overseas Operations | 19,849 | (22,724) | | Total Comprehensive Expense for the Period Attributable to Owners of the Company | (18,557) | (66,401) | | Basic and Diluted Loss Per Share (HK Cents) | (4.70) | (5.34) | [Condensed Consolidated Statement of Financial Position](index=3&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) This statement details the company's assets, liabilities, and equity as of June 30, 2025, and December 31, 2024 Condensed Consolidated Statement of Financial Position (As at June 30, 2025) | Indicator | As at June 30, 2025 (HK$ Thousand) | As at December 31, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | **Non-current Assets** | | | | Property, Plant and Equipment | 659,510 | 665,812 | | Right-of-use Assets | 17,449 | 17,493 | | Deposits and Prepayments | 125,252 | 131,821 | | **Current Assets** | | | | Inventories | 12,058 | 13,098 | | Trade and Other Receivables | 30,787 | 39,549 | | Deposits and Prepayments | 4,453 | 6,465 | | Restricted Bank Deposits | 596 | 586 | | Bank Balances and Cash | 20,125 | 33,558 | | **Current Liabilities** | | | | Trade and Other Payables | 61,812 | 77,581 | | Tax Payable | 1,689 | 1,361 | | Lease Liabilities | 64 | 141 | | Bank Borrowings | 4,317 | 4,239 | | **Non-current Liabilities** | | | | Bank Borrowings | 87,595 | 88,128 | | Deferred Tax | 5,347 | 8,969 | | **Net Assets** | 709,406 | 727,963 | | **Total Equity Attributable to Owners of the Company** | 709,406 | 727,963 | [Notes](index=4&type=section&id=Notes) This section provides detailed explanations and disclosures supporting the condensed consolidated financial statements [1. Basis of Preparation](index=4&type=section&id=1.%20Basis%20of%20Preparation) The unaudited condensed consolidated financial statements are prepared in accordance with HKAS 34 Interim Financial Reporting and Appendix D2 of the Listing Rules - The financial statements are prepared in accordance with Hong Kong Accounting Standard (HKAS) 34 and Appendix D2 of the Listing Rules[5](index=5&type=chunk) [Going Concern Basis](index=4&type=section&id=Going%20Concern%20Basis) The Group faces significant going concern uncertainties due to continuous losses and potential large tax liabilities, despite management's plans - The Group recorded continuous losses for the six months ended June 30, 2025, and 2024, amounting to **HK$38,406,000** and **HK$43,677,000** respectively[6](index=6&type=chunk) - There is a significant contingent liability related to the PRC tax authorities, which if realized, could lead to insufficient cash to meet obligations[6](index=6&type=chunk) - The Directors have prepared cash flow forecasts and obtained a letter of intent for a **RMB300 million** loan facility to support going concern[7](index=7&type=chunk) [2. Significant Accounting Policies](index=5&type=section&id=2.%20Significant%20Accounting%20Policies) The unaudited condensed consolidated financial statements are prepared on a historical cost basis, with consistent accounting policies - The financial statements are prepared on a historical cost basis, with accounting policies consistent with the prior year[8](index=8&type=chunk) - The adoption of new and revised Hong Kong Financial Reporting Standards has not resulted in significant changes to the Group's accounting policies, financial statement presentation, or reported amounts[9](index=9&type=chunk) [3. Revenue and Segment Information](index=5&type=section&id=3.%20Revenue%20and%20Segment%20Information) The Group's manufacturing operations in China are segmented into containerboard and corrugated packaging, with the latter being the sole source of external revenue [Segment Revenue and Results](index=6&type=section&id=Segment%20Revenue%20and%20Results) All Group revenue is derived from corrugated packaging, with both segments reporting losses, particularly the containerboard segment Analysis of Revenue and Results by Operating and Reportable Segment | Segment | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | | :--- | :--- | :--- | | **Revenue** | | | | Containerboard | – | – | | Corrugated Packaging | 69,134 | 107,821 | | **Segment Loss** | | | | Containerboard | (30,058) | (31,336) | | Corrugated Packaging | (4,424) | (3,341) | | Central Administrative Expenses | (5,667) | (8,189) | | Finance Costs | (1,662) | (1,831) | | Loss Before Tax | (41,811) | (44,697) | [4. Finance Costs](index=7&type=section&id=4.%20Finance%20Costs) The Group's finance costs primarily consist of interest on bank borrowings, showing a decrease compared to the prior period Details of Finance Costs (For the six months ended June 30) | Item | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Interest on Bank Borrowings | 1,660 | 1,826 | | Interest on Lease Liabilities | 2 | 5 | | **Total** | **1,662** | **1,831** | [5. Income Tax Credit](index=7&type=section&id=5.%20Income%20Tax%20Credit) The Group recorded an income tax credit, mainly from deferred tax, benefiting from Hong Kong's two-tiered tax rate and China's preferential rates for high-tech enterprises Details of Income Tax Credit (For the six months ended June 30) | Item | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Current Tax: Hong Kong Profits Tax | 331 | 390 | | Current Tax: PRC Enterprise Income Tax | 3 | – | | Deferred Tax Credit | (3,739) | (1,410) | | **Total** | **(3,405)** | **(1,020)** | - Hong Kong Profits Tax applies a two-tiered tax rate, with the first **HK$2,000,000** of assessable profits taxed at **8.25%** and the remainder at **16.5%**[14](index=14&type=chunk) - PRC subsidiaries are subject to a **25%** Enterprise Income Tax rate, with one high-tech enterprise enjoying a preferential rate of **15%**[15](index=15&type=chunk) [6. Loss for the Period](index=8&type=section&id=6.%20Loss%20for%20the%20Period) This section details key expenses and income items, such as depreciation, staff costs, and inventory costs, included in or deducted from the loss for the period Loss for the Period has been (Credited)/Charged with the following (For the six months ended June 30) | Item | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Depreciation of Property, Plant and Equipment | 25,105 | 25,652 | | Depreciation of Right-of-use Assets | 340 | 342 | | Gain on Termination of Lease Contracts | – | (7) | | Staff Costs (including Directors' Emoluments) | 17,394 | 19,574 | | Cost of Inventories Recognised as Expense | 64,094 | 98,586 | | Exchange Gain, Net | (29) | (81) | [7. Dividends](index=8&type=section&id=7.%20Dividends) The Group neither declared nor proposed any dividends during or at the end of the reporting period - For the six months ended June 30, 2025, and 2024, the Group did not declare or propose any dividends[17](index=17&type=chunk) [8. Loss Per Share](index=8&type=section&id=8.%20Loss%20Per%20Share) Basic and diluted loss per share attributable to owners was 4.70 HK cents, showing an improvement, with no dilutive effect from share options Loss Per Share Calculation (For the six months ended June 30) | Item | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Loss for the Purpose of Calculating Basic and Diluted Loss Per Share | (38,406) | (43,677) | | Weighted Average Number of Ordinary Shares for Basic and Diluted Loss Per Share | 817,644,000 | 817,644,000 | | Basic and Diluted Loss Per Share (HK Cents) | (4.70) | (5.34) | - The exercise price of share options was higher than the average market price of shares, thus no dilutive effect was included in the calculation of diluted loss per share[18](index=18&type=chunk) [9. Trade and Other Receivables](index=9&type=section&id=9.%20Trade%20and%20Other%20Receivables) The Group's total trade and other receivables decreased, primarily due to a reduction in trade receivables, with credit terms ranging from 5 to 120 days Total Trade and Other Receivables (As at June 30, 2025) | Item | As at June 30, 2025 (HK$ Thousand) | As at December 31, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Trade Receivables | 21,796 | 30,665 | | Less: Provision for Credit Losses | (248) | (243) | | Other Receivables | 9,239 | 9,127 | | **Total Trade and Other Receivables** | **30,787** | **39,549** | Ageing Analysis of Trade Receivables (As at June 30, 2025) | Ageing | As at June 30, 2025 (HK$ Thousand) | As at December 31, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Within 30 Days | 14,169 | 20,504 | | 31-60 Days | 6,474 | 9,488 | | 61-90 Days | 413 | 341 | | Over 90 Days | 492 | 89 | | **Total** | **21,548** | **30,422** | - The Group grants trade customers credit terms ranging from **5 to 120 days**, with an average ageing of approximately **56 days** (December 31, 2024: approximately **53 days**)[19](index=19&type=chunk) [10. Trade and Other Payables](index=10&type=section&id=10.%20Trade%20and%20Other%20Payables) The Group's total trade and other payables decreased, with supplier credit terms between 30 and 90 days, and overdue trade payables remaining stable Total Trade and Other Payables (As at June 30, 2025) | Item | As at June 30, 2025 (HK$ Thousand) | As at December 31, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Trade Payables | 16,236 | 22,703 | | Payables for Acquisition of Property, Plant and Equipment | 3,200 | 2,492 | | Other PRC Taxes Payable | 13,010 | 11,794 | | Accrued Expenses | 25,692 | 37,811 | | Other Payables | 3,674 | 2,781 | | **Total** | **61,812** | **77,581** | Ageing Analysis of Trade Payables (As at June 30, 2025) | Ageing | As at June 30, 2025 (HK$ Thousand) | As at December 31, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Current | 4,629 | 11,311 | | Overdue 1 to 30 Days | 23 | 8 | | Overdue 31 to 60 Days | – | – | | Overdue Over 60 Days | 11,584 | 11,384 | | **Trade Payables** | **16,236** | **22,703** | [11. Litigation and Contingent Liabilities](index=11&type=section&id=11.%20Litigation%20and%20Contingent%20Liabilities) The Group faces a significant tax issue related to its PRC subsidiary, Senye Paper, involving VAT invoice irregularities, unpaid taxes of approximately RMB 109 million, and administrative penalties of RMB 44.07 million, which the Group is contesting [Tax Treatment Decision](index=11&type=section&id=Tax%20Treatment%20Decision) Senye Paper appealed the Qingyuan Tax Bureau's tax treatment decision, including a rejected tax guarantee application and a review application to the Guangdong High People's Court, which was dismissed, now seeking administrative supervision - Senye Paper was required to pay approximately **RMB109 million** in outstanding taxes and surcharges due to VAT invoice issues[22](index=22&type=chunk) - Senye Paper's application for a tax guarantee was rejected, leading to appeals to various mainland authorities[23](index=23&type=chunk) - The application for review to the Guangdong High People's Court was dismissed, and an application for administrative supervision has been filed with the Qingyuan People's Procuratorate of Guangdong Province[24](index=24&type=chunk)[25](index=25&type=chunk) [Tax Penalty Decision](index=12&type=section&id=Tax%20Penalty%20Decision) Senye Paper sought administrative reconsideration and then initiated administrative litigation regarding the tax penalty decision; the second instance judgment overturned the first instance and dismissed Senye Paper's claims, prompting the Group to seek legal advice - Senye Paper was subject to an administrative penalty of approximately **RMB44.07 million**[22](index=22&type=chunk) - Senye Paper applied for administrative reconsideration with the Guangdong Provincial Tax Service regarding the tax penalty decision, followed by administrative litigation[26](index=26&type=chunk) - The second instance judgment overturned the first instance administrative judgment and dismissed Senye Paper's claims, and the Group is seeking PRC legal advice on this matter[27](index=27&type=chunk)[28](index=28&type=chunk) [Interim Dividend](index=14&type=section&id=Interim%20Dividend) The Board of Directors does not recommend the payment of an interim dividend for the six months ended June 30, 2025 - The Directors do not recommend the payment of an interim dividend for the six months ended June 30, 2025[29](index=29&type=chunk) [Business Review](index=14&type=section&id=Business%20Review) The Group's revenue declined significantly in the first half of 2025 due to reduced orders and intense market competition, while its upstream business aims to resume production after a boiler conversion project - In the first half of 2025, the Group's revenue decreased by **35.9%**, primarily due to reduced customer orders and intense market competition[30](index=30&type=chunk) - The upstream containerboard business has been temporarily suspended since October 2021 and is currently coordinating a coal-to-gas boiler conversion project to resume production[30](index=30&type=chunk) - The corrugated packaging industry faces a challenging operating environment, and the Group is committed to strengthening cost control management and improving efficiency to reduce losses[30](index=30&type=chunk) [Financial Review](index=14&type=section&id=Financial%20Review) This section provides a comprehensive analysis of the Group's financial performance, liquidity, and capital resources for the reporting period [Operating Results](index=14&type=section&id=Operating%20Results) The Group's revenue significantly decreased by 35.9% to HK$69.1 million, leading to lower gross profit and margin, though the loss for the period narrowed despite negative EBITDA Key Operating Results Changes (For the six months ended June 30) | Indicator | 2025 (HK$ Million) | 2024 (HK$ Million) | Change | | :--- | :--- | :--- | :--- | | Revenue | 69.1 | 107.8 | -35.9% | | Gross Profit | 5.0 | 9.2 | -45.7% | | Gross Profit Margin | 7.3% | 8.6% | -1.3 percentage points | | Other Income | 1.08 | 1.1 | -1.8% | | Other Gains and Losses (Net Gain) | 1.8 | 0.174 | +934.5% | | Selling and Distribution Costs | 4.4 | 5.9 | -25.5% | | Administrative Expenses | 16.1 | 17.9 | -10.1% | | Other Expenses | 27.5 | 29.5 | -6.8% | | Finance Costs | 1.7 | 1.8 | -5.6% | | EBITDA | (14.7) | (16.9) | +13.0% | | Loss for the Period | (38.4) | (43.7) | +12.1% | - The decrease in revenue was primarily due to reduced customer orders and intense competition[31](index=31&type=chunk) - The significant increase in net other gains and losses was mainly due to the write-off of accrued expenses and other payables[31](index=31&type=chunk) [Liquidity, Financial and Capital Resources](index=15&type=section&id=Liquidity%2C%20Financial%20and%20Capital%20Resources) The Group experienced reduced cash and cash equivalents, net current assets, and liquidity ratio, indicating increased liquidity pressure, alongside extended turnover days and higher leverage ratios Liquidity and Financial Indicators (As at June 30, 2025) | Indicator | As at June 30, 2025 | As at December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Total Cash and Cash Equivalents | HK$20.1 Million | HK$33.6 Million | -40.2% | | Net Current Assets | HK$0.1 Million | HK$9.9 Million | -99.0% | | Current Ratio | 1.0 | 1.12 | -0.12 | | Trade Receivables Turnover Days | Approx. 56 Days | Approx. 53 Days | +3 Days | | Trade Payables Turnover Days | Approx. 46 Days | Approx. 43 Days | +3 Days | | Inventory Turnover Days | Approx. 46 Days | Approx. 33 Days | +13 Days | | Total Bank Borrowings | HK$91.9 Million | HK$92.4 Million | -0.5% | | Gearing Ratio | 13.0% | 12.7% | +0.3 percentage points | | Net Borrowings | HK$71.2 Million | HK$58.2 Million | +22.3% | | Net Gearing Ratio | 10.0% | 8.0% | +2.0 percentage points | - The Group's capital expenditure in China was **HK$0.2 million**, primarily for property, plant, and equipment, a significant decrease from the prior period[34](index=34&type=chunk) [Outlook](index=16&type=section&id=Outlook) The corrugated packaging industry is expected to remain challenging, but the Group anticipates resuming upstream operations and benefiting from increasing demand for eco-friendly paper packaging - The operating environment for the corrugated packaging industry is expected to remain challenging, facing soaring manufacturing costs and weak market demand[36](index=36&type=chunk) - The Group anticipates its upstream business will resume operations after completing the coal-to-gas boiler conversion project to achieve vertical integration advantages[36](index=36&type=chunk) - Stricter controls on plastic packaging in China and market focus on sustainability will drive demand for environmentally friendly paper packaging, benefiting the Group's business[36](index=36&type=chunk) - The Group will focus on strategies such as pricing power, increasing sales volume, improving production efficiency, and reducing energy use and raw material waste[36](index=36&type=chunk) [Human Resources](index=16&type=section&id=Human%20Resources) The Group employed approximately 206 full-time staff as of June 30, 2025, a decrease from the prior period, offering competitive remuneration and performance-based incentives - As of June 30, 2025, the Group employed approximately **206** full-time staff, a decrease from **229** as of December 31, 2024[37](index=37&type=chunk) - The Group offers competitive remuneration packages to employees and may grant share options and discretionary bonuses based on performance[37](index=37&type=chunk) [Audit Committee](index=16&type=section&id=Audit%20Committee) The Audit Committee, comprising three independent non-executive directors, reviewed the interim results, financial statements, risk management, internal controls, and financial reporting - The Audit Committee, consisting of three independent non-executive directors, has reviewed the Group's interim results announcement and financial statements, and discussed risk management, internal controls, and financial reporting matters[38](index=38&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=16&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) Neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the six months ended June 30, 2025 - For the six months ended June 30, 2025, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[39](index=39&type=chunk) [Model Code for Securities Transactions](index=17&type=section&id=Model%20Code%20for%20Securities%20Transactions) The Company has adopted a code of conduct for directors' securities transactions, which is no less stringent than the Model Code in Appendix C3 of the Listing Rules - The Company has adopted a code of conduct for directors' securities transactions, with terms no less stringent than the Model Code set out in Appendix C3 of the Listing Rules[40](index=40&type=chunk) [Corporate Governance](index=17&type=section&id=Corporate%20Governance) The Company's corporate governance practices include deviations from certain code provisions regarding the roles of Chairman and CEO, audit committee meetings, and remuneration committee responsibilities [Code Provision C.2.1](index=17&type=section&id=Code%20Provision%20C.2.1) The Company deviates from the code provision requiring written delineation of Chairman and CEO responsibilities, as their roles are considered clearly defined - The Company has not formally separated the roles of Chairman and Chief Executive Officer in writing, but the Board believes their respective responsibilities are clearly defined[42](index=42&type=chunk)[43](index=43&type=chunk) [Code Provision D.3.3](index=17&type=section&id=Code%20Provision%20D.3.3) The Company deviates from the code provision for the Audit Committee to meet with auditors at least twice annually, as no auditors were engaged for the interim review - The Audit Committee meets with the auditors once a year, instead of the minimum two times required by the code, as no auditors were engaged to review the interim report[42](index=42&type=chunk)[43](index=43&type=chunk) [Code Provision E.1.2](index=18&type=section&id=Code%20Provision%20E.1.2) The Company deviates from the code provision for the Remuneration Committee to review senior management remuneration, which is currently handled by the Chairman and/or CEO - The Remuneration Committee only reviews the remuneration of Directors, while senior management remuneration is handled by the Chairman and/or Chief Executive Officer[44](index=44&type=chunk)[48](index=48&type=chunk) [Public Float](index=18&type=section&id=Public%20Float) As of the announcement date, at least 25% of the Company's total issued shares are held by the public - As of the date of this announcement, at least **25%** of the Company's total issued shares are held by the public[45](index=45&type=chunk) [Publication of Results Announcement and Interim Report](index=18&type=section&id=Publication%20of%20Results%20Announcement%20and%20Interim%20Report) The results announcement has been published on the Company's and HKEX websites, with the interim report to be dispatched to shareholders and published in September 2025 - This results announcement has been published on the Company's website and the website of Hong Kong Exchanges and Clearing Limited[46](index=46&type=chunk) - The interim report for the six months ended June 30, 2025, will be dispatched to shareholders and published on the Company's and HKEX websites in September 2025[46](index=46&type=chunk) [Acknowledgement](index=18&type=section&id=Acknowledgement) The Board of Directors extends its sincere gratitude to shareholders, business partners, and company employees - The Board of Directors extends its sincere gratitude to shareholders, business partners, and company employees[47](index=47&type=chunk)

[Financial Highlights and Company Overview](index=1&type=section&id=Financial%20Highlights%20and%20Company%20Overview) This section presents the company's key financial highlights for the first half of 2025 and outlines its core business activities and financial reporting basis [Financial Highlights](index=1&type=section&id=Financial%20Highlights) The company reported its unaudited condensed consolidated results for the first half of 2025, detailing key financial performance metrics Financial Highlights (For the six months ended June 30) | Indicator | Amount (million HKD) | | :--- | :--- | | Revenue | 12,672 | | Gross Profit | 300 | | Profit | 133 | | Profit attributable to equity holders of the Company | 136 | | Basic and diluted earnings per share | 0.051 | [Company Information and Basis of Preparation](index=6&type=section&id=Company%20Information%20and%20Basis%20of%20Preparation) The company's core business activities and the basis for preparing its interim financial information are outlined - The Group is principally engaged in coal and other commodity trading and providing integrated supply chain services[10](index=10&type=chunk) - The interim financial information has been prepared in accordance with the HKEX Listing Rules and International Accounting Standard 34 'Interim Financial Reporting'[11](index=11&type=chunk) [Condensed Consolidated Financial Statements](index=2&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section presents the condensed consolidated statements of profit or loss, comprehensive income, and financial position for the reporting period [Consolidated Statement of Profit or Loss](index=2&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss) Revenue, gross profit, and profit for the period significantly declined for the six months ended June 30, 2025, driven by increased cost of sales and reduced operating profit Consolidated Statement of Profit or Loss Key Data (For the six months ended June 30) | Indicator | 2025 (thousand HKD) | 2024 (thousand HKD) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 12,672,225 | 19,854,020 | -36.17% | | Cost of Sales | (12,372,035) | (18,627,921) | -33.58% | | Gross Profit | 300,190 | 1,226,099 | -75.50% | | Other Income | 170,928 | 94,452 | 80.97% | | Administrative Expenses | (290,039) | (420,041) | -30.95% | | Operating Profit | 181,079 | 900,510 | -79.89% | | Net Finance Costs | (67,760) | (55,942) | 21.13% | | Profit Before Tax | 101,142 | 939,260 | -89.22% | | Profit for the Period | 133,331 | 830,103 | -83.93% | | Profit attributable to equity holders of the Company | 136,240 | 782,859 | -82.63% | | Basic and diluted earnings per share (HKD) | 0.051 | 0.294 | -82.65% | [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=3&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) Total comprehensive income for the period significantly decreased by 76.6% due to reduced profit, despite a positive shift in exchange differences Consolidated Statement of Profit or Loss and Other Comprehensive Income Key Data (For the six months ended June 30) | Indicator | 2025 (thousand HKD) | 2024 (thousand HKD) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Profit for the Period | 133,331 | 830,103 | -83.93% | | Exchange differences on translation | 47,039 | (54,960) | N/A (from negative to positive) | | Other comprehensive income for the period | 48,175 | (53,509) | N/A (from negative to positive) | | Total comprehensive income for the period | 181,506 | 776,594 | -76.62% | | Attributable to equity holders of the Company | 182,756 | 746,888 | -75.51% | [Consolidated Statement of Financial Position](index=4&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) Total assets less current liabilities slightly decreased, while total current assets significantly declined, and net assets saw a modest increase as of June 30, 2025 Consolidated Statement of Financial Position Key Data (As of June 30) | Indicator | 2025 (thousand HKD) | 2024 (thousand HKD) | Change (%) | | :--- | :--- | :--- | :--- | | Total non-current assets | 6,988,995 | 7,038,412 | -0.70% | | Total current assets | 7,482,706 | 10,396,326 | -28.02% | | Total current liabilities | 4,832,182 | 7,728,922 | -37.50% | | Net current assets | 2,650,524 | 2,667,404 | -0.63% | | Total assets less current liabilities | 9,639,519 | 9,705,816 | -0.68% | | Total non-current liabilities | 461,544 | 604,843 | -23.70% | | Net assets | 9,177,975 | 9,100,973 | 0.85% | | Total equity attributable to equity holders of the Company | 8,788,761 | 8,661,550 | 1.47% | [Notes to the Unaudited Interim Financial Information](index=6&type=section&id=Notes%20to%20the%20Unaudited%20Interim%20Financial%20Information) This section provides detailed notes on accounting policies, revenue, segment reporting, income, expenses, and balance sheet items for the interim period [Changes in Accounting Policies](index=6&type=section&id=Changes%20in%20Accounting%20Policies) Amendments to IAS 21 regarding foreign exchange rates were applied but had no significant impact on the interim financial information - The Group has applied the amendments to IAS 21 'The Effects of Changes in Foreign Exchange Rates – Lack of Exchangeability', but they had no significant impact on this interim financial information[12](index=12&type=chunk) [Revenue and Segment Reporting](index=7&type=section&id=Revenue%20and%20Segment%20Reporting) Revenue from coal and other commodity trading and supply chain services decreased by 36.17%, with coal trading revenue significantly down, while overseas market share grew - The Group is principally engaged in coal and other commodity trading and providing integrated supply chain services[14](index=14&type=chunk) [Disaggregation of Revenue](index=7&type=section&id=Disaggregation%20of%20Revenue) Revenue is disaggregated by product/service and geography, showing coal as the largest but declining source, with increased overseas market share Revenue by Major Product or Service Line (thousand HKD) | Product/Service Line | 2025 | 2024 | YoY Change (%) | | :--- | :--- | :--- | :--- | | Coal | 9,667,908 | 16,858,477 | -42.65% | | Provision of supply chain integrated services | 1,802,424 | 2,100,552 | -14.19% | | Petroleum and petrochemical products | 1,024,038 | 746,656 | 37.15% | | Coke | 89,018 | – | N/A | | Iron ore | 77,356 | 112,917 | -31.50% | | Others | 11,481 | 35,418 | -67.60% | | **Total** | **12,672,225** | **19,854,020** | **-36.17%** | Revenue by Customer Geographical Location (thousand HKD) | Geographical Location | 2025 | 2024 | YoY Change (%) | | :--- | :--- | :--- | :--- | | China (including Hong Kong, Macau and Taiwan) | 8,519,404 | 14,942,943 | -42.99% | | Indonesia | 1,219,331 | 1,835,536 | -33.58% | | Mongolia | 633,834 | 422,881 | 49.89% | | South Korea | 582,729 | 713,909 | -18.49% | | Malaysia | 554,927 | 1,011,534 | -45.14% | | India | 345,855 | 295,276 | 17.13% | | Vietnam | 293,593 | 128,650 | 128.21% | | Japan | 286,228 | 503,291 | -43.00% | | Canada | 180,359 | – | N/A | | Others | 55,965 | – | N/A | | **Total** | **12,672,225** | **19,854,020** | **-36.17%** | [Segment Profit or Loss, Assets and Liabilities Information](index=8&type=section&id=Segment%20Profit%20or%20Loss%2C%20Assets%20and%20Liabilities%20Information) Coal and other commodity trading segment profit (adjusted EBITDA) turned to a loss, and total reportable segment profit significantly decreased by 62.4% Reportable Segment Key Data (For the six months ended June 30) | Indicator | Coal and Other Commodity Trading (thousand HKD) | Provision of Supply Chain Integrated Services (thousand HKD) | Total (thousand HKD) | | :--- | :--- | :--- | :--- | | **2025** | | | | | Revenue from external customers | 10,869,801 | 1,802,424 | 12,672,225 | | Reportable segment (loss)/profit (adjusted EBITDA) | (39,825) | 486,218 | 446,393 | | Additions to non-current segment assets during the period | 78,097 | 200,986 | 279,083 | | Reportable segment assets (as of June 30) | 8,249,638 | 7,183,375 | 15,433,013 | | Reportable segment liabilities (as of June 30) | 3,608,731 | 2,700,714 | 6,309,445 | | **2024** | | | | | Revenue from external customers | 17,753,468 | 2,100,552 | 19,854,020 | | Reportable segment (loss)/profit (adjusted EBITDA) | 480,835 | 707,816 | 1,188,651 | | Additions to non-current segment assets during the period | 179,366 | 319,605 | 498,971 | | Reportable segment assets (as of December 31) | 11,333,992 | 7,296,415 | 18,630,407 | | Reportable segment liabilities (as of December 31) | 6,446,609 | 2,996,745 | 9,443,354 | - Reportable segment profit (adjusted EBITDA) significantly decreased by **62.4%** from **HKD 1,188,651 thousand** in the first half of 2024 to **HKD 446,393 thousand** in the first half of 2025[20](index=20&type=chunk) [Other Income](index=9&type=section&id=Other%20Income) Other income increased by 80.97% due to significant gains from derivative financial instruments and structured deposit products Other Income Components (thousand HKD) | Item | 2025 | 2024 | YoY Change (%) | | :--- | :--- | :--- | :--- | | Net realized and unrealized gains from derivative financial instruments and structured deposit products | 150,246 | 60,965 | 146.45% | | Government grants | 7,914 | 31,007 | -74.48% | | Others | 12,768 | 2,480 | 414.84% | | **Total** | **170,928** | **94,452** | **80.97%** | - Net realized and unrealized gains from derivative financial instruments primarily refer to the Group's net gains from commodity futures contracts[22](index=22&type=chunk) [Components of Profit Before Tax](index=10&type=section&id=Components%20of%20Profit%20Before%20Tax) Profit before tax was influenced by increased net finance costs, decreased staff costs, and higher amortization and depreciation - Profit before tax is after deducting/(crediting) net finance costs, staff costs, and other items[23](index=23&type=chunk) [Net Finance Costs](index=10&type=section&id=Net%20Finance%20Costs) Net finance costs increased by 21.13% due to a significant rise in net foreign exchange losses Net Finance Costs Components (thousand HKD) | Item | 2025 | 2024 | YoY Change (%) | | :--- | :--- | :--- | :--- | | Interest income | (31,010) | (28,677) | 8.13% | | Total interest expense | 55,988 | 63,327 | -11.59% | | Net foreign exchange losses | 35,789 | 10,373 | 245.02% | | Bank and other charges | 6,993 | 10,919 | -35.96% | | **Net Finance Costs** | **67,760** | **55,942** | **21.13%** | [Staff Costs](index=10&type=section&id=Staff%20Costs) Total staff costs decreased by 18.05% due to reductions in salaries, wages, bonuses, and other benefits Staff Costs Components (thousand HKD) | Item | 2025 | 2024 | YoY Change (%) | | :--- | :--- | :--- | :--- | | Salaries, wages, bonuses and other benefits | 332,447 | 417,225 | -20.32% | | Contributions to defined contribution retirement plans | 24,636 | 18,491 | 33.23% | | **Total** | **357,083** | **435,716** | **-18.05%** | [Other Items](index=11&type=section&id=Other%20Items) Amortization and depreciation increased by 39.41%, while impairment loss reversal for trade receivables and inventory write-downs decreased Other Key Items (thousand HKD) | Item | 2025 | 2024 | YoY Change (%) | | :--- | :--- | :--- | :--- | | Amortization and depreciation | 283,270 | 203,197 | 39.41% | | Impairment loss (reversal) for trade receivables | (7,431) | (9,444) | -21.31% | | Inventory write-downs | 27,743 | 144,710 | -80.80% | [Income Tax](index=11&type=section&id=Income%20Tax) Income tax shifted from a credit to an expense, driven by reduced deferred tax movements and Pillar Two income tax recognition Income Tax Components (thousand HKD) | Item | 2025 | 2024 | YoY Change (%) | | :--- | :--- | :--- | :--- | | Current tax – Hong Kong Profits Tax | 12,595 | 13,987 | -10.09% | | Current tax – Outside Hong Kong | 49,411 | 120,061 | -58.84% | | Pillar Two income tax | 6,247 | – | N/A | | Deferred tax | (102,020) | (32,453) | 214.38% | | **Total** | **(32,189)** | **109,157** | N/A (from positive to negative) | - Certain subsidiaries of the Group enjoy a preferential tax rate of **15%**, including enterprises in Hainan Free Trade Port and those encouraged by the Western Development Strategy[27](index=27&type=chunk) - The Company obtained a High-Tech Enterprise Certificate in October 2024, entitling it to a **15%** income tax rate from 2024 to 2026[28](index=28&type=chunk) - The Group recognized a current tax expense of **HKD 6,247 thousand** related to Pillar Two top-up tax in the first half of 2025[30](index=30&type=chunk) [Earnings Per Share](index=13&type=section&id=Earnings%20Per%20Share) Basic and diluted earnings per share significantly decreased by 82.65% due to reduced profit attributable to equity holders of the Company Earnings Per Share Calculation (For the six months ended June 30) | Indicator | 2025 | 2024 | YoY Change (%) | | :--- | :--- | :--- | :--- | | Profit attributable to equity holders of the Company (thousand HKD) | 136,240 | 782,859 | -82.63% | | Weighted average number of ordinary shares (thousand shares) | 2,646,823 | 2,663,980 | -0.64% | | **Basic and diluted earnings per share (HKD)** | **0.051** | **0.294** | **-82.65%** | - For the six months ended June 30, 2025 and 2024, basic and diluted earnings per share were identical as there were no potentially dilutive ordinary shares outstanding during the periods[32](index=32&type=chunk) [Property, Plant and Equipment and Investment Properties](index=13&type=section&id=Property%2C%20Plant%20and%20Equipment%20and%20Investment%20Properties) Acquisitions of property, plant and equipment increased by 49.8%, with disposals generating gains and transfers from construction in progress Property, Plant and Equipment Movements (thousand HKD) | Item | H1 2025 | H1 2024 | YoY Change (%) | | :--- | :--- | :--- | :--- | | Additions to property, plant and equipment | 181,442 | 121,136 | 49.79% | | Net book value of property, plant and equipment disposed of | 9,090 | 117,271 | -92.25% | | Gain on disposal | 1,052 | 3,890 | -72.96% | | Transfer from construction in progress to property, plant and equipment | 115,589 | 146,039 | -20.85% | [Other Non-current Assets](index=14&type=section&id=Other%20Non-current%20Assets) Other non-current assets increased by 6.56%, mainly due to loans to joint ventures, with certain assets pledged as collateral Other Non-current Assets Components (thousand HKD) | Item | June 30, 2025 | December 31, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Loans to joint ventures | 388,745 | 361,652 | 7.49% | | Prepayments for property and equipment and construction in progress | 63,900 | 63,126 | 1.23% | | **Total** | **452,645** | **424,778** | **6.56%** | - The Group provided loans to joint ventures with a maximum limit of **USD 45,000,000** at an annual interest rate of **7%**, secured by logistics facilities[35](index=35&type=chunk) - As of June 30, 2025, the Group had pledged **HKD 660,262 thousand** of property, plant and equipment as collateral for borrowings, bills payable, and lease liabilities[37](index=37&type=chunk) [Inventories](index=15&type=section&id=Inventories) Total inventories significantly decreased by 72.95% due to reduced coal inventories, with no pledged inventories at period-end Inventories Components (thousand HKD) | Item | June 30, 2025 | December 31, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Coal | 461,452 | 1,950,968 | -76.35% | | Others | 88,259 | 81,938 | 7.71% | | **Total** | **549,711** | **2,032,906** | **-72.95%** | - As of June 30, 2025, the Group had no pledged inventories, compared to **HKD 224,968 thousand** pledged inventories as of December 31, 2024[38](index=38&type=chunk) [Trade and Other Receivables](index=15&type=section&id=Trade%20and%20Other%20Receivables) Total trade and other receivables decreased by 31.53%, with a significant reduction in trade and bills receivables, and some bills pledged Trade and Other Receivables Components (thousand HKD) | Item | June 30, 2025 | December 31, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Trade and bills receivables, net of loss allowance | 884,857 | 1,708,867 | -48.22% | | Bank acceptance bills | 708,384 | 1,108,107 | -36.07% | | Other receivables | 82,471 | 166,769 | -50.54% | | Deposits and prepayments | 840,004 | 819,419 | 2.51% | | Other recoverable taxes | 367,772 | 376,329 | -2.27% | | Derivative financial instruments | 115,521 | 87,414 | 32.16% | | Investment in structured deposit products | – | 112,180 | -100.00% | | **Total** | **2,999,009** | **4,379,085** | **-31.53%** | - As of June 30, 2025, the Group's bills receivable of **HKD 510,513 thousand** had been pledged as collateral for borrowings and bills payable[40](index=40&type=chunk) [Trade and Other Payables](index=16&type=section&id=Trade%20and%20Other%20Payables) Total trade and other payables significantly decreased by 39.30%, with a substantial reduction in trade and bills payable Trade and Other Payables Components (thousand HKD) | Item | June 30, 2025 | December 31, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Total trade and bills payable | 2,120,756 | 3,570,629 | -40.68% | | Payables for construction work | 49,710 | 119,912 | -58.54% | | Payables for purchase of equipment and vehicles | 159,490 | 357,604 | -55.40% | | Staff-related costs payable | 88,788 | 301,917 | -70.62% | | Dividends payable | 85,752 | 217,781 | -60.53% | | **Total** | **2,997,806** | **4,955,836** | **-39.30%** | Analysis of Bills Payable (thousand HKD) | Collateral Type | June 30, 2025 | December 31, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Pledged by restricted bank deposits, bills receivable and structured deposits | 1,287,555 | 1,970,417 | -34.66% | | Pledged by restricted bank deposits, property, plant and equipment, land use rights and inventories | 214,206 | 218,185 | -1.82% | | Pledged by restricted bank deposits and credit guarantees | 231,993 | 37,942 | 511.44% | | **Total** | **1,733,754** | **2,226,544** | **-22.13%** | [Secured Bank Loans](index=17&type=section&id=Secured%20Bank%20Loans) Total secured bank loans decreased by 27.35%, with a decline across all collateralized loan categories Secured Bank Loans Analysis (thousand HKD) | Collateral Type | June 30, 2025 | December 31, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Pledged by bills receivable and restricted bank deposits | 357,613 | 643,655 | -44.45% | | Pledged by restricted bank deposits, property, plant and equipment, land use rights and inventories | 655,191 | 711,745 | -7.95% | | Pledged by restricted bank deposits and credit guarantees | 649,997 | 936,125 | -30.58% | | **Total** | **1,662,801** | **2,291,525** | **-27.35%** | [Capital, Reserves and Dividends](index=17&type=section&id=Capital%2C%20Reserves%20and%20Dividends) Share capital slightly decreased due to repurchased share cancellations, and no interim dividend was recommended to conserve cash for market challenges Share Capital Movements (thousand shares/thousand HKD) | Item | June 30, 2025 | December 31, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Issued and fully paid ordinary shares (number of shares) | 2,673,089 | 2,696,547 | -0.87% | | Issued and fully paid ordinary shares (thousand HKD) | 5,389,760 | 5,410,638 | -0.38% | | Cancellation of repurchased shares (number of shares) | (23,458) | (9,450) | 148.23% | | Cancellation of repurchased shares (thousand HKD) | (20,878) | (9,881) | 111.29% | - The Board did not recommend declaring or paying an interim dividend for the six months ended June 30, 2025, to retain sufficient cash reserves to address market challenges[104](index=104&type=chunk) - For the six months ended June 30, 2025, the Company cancelled **23,458,000** shares purchased from the open market[49](index=49&type=chunk) [Management Discussion and Analysis](index=19&type=section&id=Management%20Discussion%20and%20Analysis) This section provides management's analysis of the company's financial performance, operational highlights, and strategic outlook for the reporting period [Overview](index=19&type=section&id=Overview) Revenue and net profit significantly decreased in H1 2025, while cash and cash equivalents increased, reflecting varied financial performance H1 2025 Key Financial Indicators Overview (million HKD) | Indicator | H1 2025 | H1 2024 | H2 2024 | | :--- | :--- | :--- | :--- | | Revenue | 12,672 | 19,854 | 19,312 | | Net Profit | 133 | 830 | 154 | | Total Assets (June 30, 2025/December 31, 2024) | 14,472 | N/A | 17,435 | | Total Equity (June 30, 2025/December 31, 2024) | 9,178 | N/A | 9,101 | | Cash and Cash Equivalents (June 30, 2025/December 31, 2024) | 2,435 | N/A | 1,996 | [Revenue Overview](index=20&type=section&id=Revenue%20Overview) Consolidated revenue decreased by 36.17% due to coking coal price drops, while overseas market share increased, despite a significant decline in coal product revenue - In H1 2025, the average price of coking coal was **USD 175/tonne**, a decrease of nearly **40.00%** compared to H1 2024, leading to a **42.65%** reduction in coal trading revenue[62](index=62&type=chunk) - Revenue generated by the Group outside China was approximately **HKD 4,153 million**, with its proportion of total revenue increasing from **24.74%** in H1 2024 to **32.78%** in H1 2025[64](index=64&type=chunk) - The supply chain trading business segment recorded revenue of approximately **HKD 10,870 million**, accounting for approximately **85.78%** of total revenue[66](index=66&type=chunk) [Market Environment and Total Revenue](index=20&type=section&id=Market%20Environment%20and%20Total%20Revenue) Coking coal prices fell by nearly 40% due to market conditions, leading to a 36.17% decrease in consolidated revenue - Coking coal prices remained under pressure, with an average price of **USD 175/tonne** in H1 2025, a decrease of nearly **40.00%** compared to H1 2024[62](index=62&type=chunk) - The Company recorded consolidated revenue of approximately **HKD 12,672 million**, a decrease of approximately **36.17%** from approximately **HKD 19,854 million** in H1 2024[62](index=62&type=chunk) [Geographical Revenue Distribution](index=21&type=section&id=Geographical%20Revenue%20Distribution) Overseas market revenue share increased to 32.78% as the Group pursued globalization, with top five customers contributing 39.62% of total revenue - In H1 2025, revenue generated by the Group outside China was approximately **HKD 4,153 million**, with its proportion of total revenue increasing from **24.74%** in H1 2024 to **32.78%** in H1 2025[64](index=64&type=chunk) - Revenue from the Group's top five customers accounted for **39.62%** of total revenue, compared to **47.22%** in H1 2024[65](index=65&type=chunk) [Supply Chain Trading Revenue](index=21&type=section&id=Supply%20Chain%20Trading%20Revenue) Supply chain trading revenue was HKD 10,870 million, with coal product revenue decreasing by 42.65% due to market pressure - The supply chain trading business segment recorded revenue of approximately **HKD 10,870 million**, accounting for approximately **85.78%** of total revenue[66](index=66&type=chunk) - Revenue from coal products decreased by approximately **42.65%** from approximately **HKD 16,858 million** in H1 2024 to approximately **HKD 9,668 million** in H1 2025[67](index=67&type=chunk) [Supply Chain Integrated Services Revenue](index=22&type=section&id=Supply%20Chain%20Integrated%20Services%20Revenue) Supply chain integrated services revenue decreased by 14.19%, with mining services achieving 18.69 million cubic meters in excavation volume - The supply chain integrated services segment recorded revenue of approximately **HKD 1,802 million**, a decrease of approximately **14.19%** compared to H1 2024[68](index=68&type=chunk) - Mining services achieved an excavation volume of approximately **18.69 million cubic meters**, revenue of approximately **HKD 623 million**, and gross profit of approximately **HKD 81 million**[68](index=68&type=chunk) [Business Vision](index=22&type=section&id=Business%20Vision) The Group aims to strengthen its market position and maintain market share through enhanced customer service, business expansion, and cost control - The Group will strengthen its industry position and maintain market share by deepening customer services, expanding value-added businesses, optimizing sales strategies, and strictly implementing internal cost control[70](index=70&type=chunk) [Cost of Sales and Purchases](index=23&type=section&id=Cost%20of%20Sales%20and%20Purchases) Cost of sales decreased by 33.58% due to falling coal prices, with total purchases declining, while hedging generated HKD 456 million in gross profit - Cost of sales was approximately **HKD 12,372 million**, a decrease of approximately **33.58%** compared to H1 2024, primarily due to falling coal transaction prices[71](index=71&type=chunk) Purchase Details of Different Commodity Categories (thousand tonnes/thousand HKD) | Product | H1 2025 Purchase Volume (thousand tonnes) | H1 2025 Purchase Amount (thousand HKD) | H1 2024 Purchase Volume (thousand tonnes) | H1 2024 Purchase Amount (thousand HKD) | | :--- | :--- | :--- | :--- | :--- | | Coal | 7,385 | 7,208,249 | 8,719 | 13,881,556 | | Petroleum and petrochemical products | 141 | 1,015,160 | 82 | 739,631 | | Coke | 92 | 105,645 | – | – | | Iron ore | 93 | 66,740 | 110 | 95,992 | | **Total** | **7,711** | **8,395,794** | **8,911** | **14,717,179** | - The Company utilized futures to hedge risks, achieving a combined spot and futures gross profit of approximately **HKD 456 million**[73](index=73&type=chunk) [Administrative Expenses](index=24&type=section&id=Administrative%20Expenses) Administrative expenses decreased by 30.95% due to a significant reduction in staff costs Administrative Expenses Components (thousand HKD) | Item | H1 2025 | H1 2024 | YoY Change (%) | | :--- | :--- | :--- | :--- | | Staff costs | 172,481 | 284,726 | -39.42% | | Reversal of impairment loss provision for trade and other receivables | (5,779) | (9,748) | -40.71% | | Others | 123,337 | 145,063 | -14.98% | | **Total** | **290,039** | **420,041** | **-30.95%** | [Other Income](index=25&type=section&id=Other%20Income%20(MD%26A)) Other income increased by 81% due to gains from derivative hedging in the futures market - Other income was approximately **HKD 171 million**, primarily due to gains of approximately **HKD 156 million** generated by the Company in the futures market from using derivative instruments for hedging[76](index=76&type=chunk) [Net Finance Costs](index=25&type=section&id=Net%20Finance%20Costs%20(MD%26A)) Net finance costs increased by 21.43% due to unrealized exchange losses from intercompany balances caused by exchange rate fluctuations - Net finance costs were approximately **HKD 68 million**, an increase of approximately **21.43%** compared to H1 2024, primarily due to unrealized exchange losses from intercompany balances between domestic and overseas subsidiaries caused by exchange rate fluctuations[77](index=77&type=chunk) Net Finance Costs Components (thousand HKD) | Item | H1 2025 | H1 2024 | YoY Change (%) | | :--- | :--- | :--- | :--- | | Interest income | (31,010) | (28,677) | 8.13% | | Total interest expense | 55,988 | 63,327 | -11.59% | | Net foreign exchange losses | 35,789 | 10,373 | 245.02% | | Bank and other charges | 6,993 | 10,919 | -35.96% | | **Net Finance Costs** | **67,760** | **55,942** | **21.13%** | [Profit Attributable to Equity Holders and Earnings Per Share](index=26&type=section&id=Profit%20Attributable%20to%20Equity%20Holders%20and%20Earnings%20Per%20Share%20(MD%26A)) Profit attributable to equity holders significantly decreased by 82.63%, with basic and diluted earnings per share at HKD 0.051 - Profit attributable to equity holders was approximately **HKD 136 million**, a decrease of approximately **82.63%** compared to H1 2024[79](index=79&type=chunk) - For the six months ended June 30, 2025, basic and diluted earnings per share were both **HKD 0.051**[80](index=80&type=chunk) [Inventories](index=26&type=section&id=Inventories%20(MD%26A)) Inventories decreased by 72.95% as the Group focused on accelerating turnover and reducing levels to enhance capital efficiency Inventories Amount (thousand HKD) | Item | June 30, 2025 | December 31, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Coal | 461,452 | 1,950,968 | -76.35% | | Others | 88,259 | 81,938 | 7.71% | | **Total** | **549,711** | **2,032,906** | **-72.95%** | - The Group accelerated inventory turnover and reduced inventory levels, thereby improving capital efficiency[82](index=82&type=chunk) [Debt and Liquidity](index=27&type=section&id=Debt%20and%20Liquidity) Total bank loans decreased, gearing ratio improved, but EBITDA/interest and debt/EBITDA ratios deteriorated due to reduced profit - The Group's total bank loans were approximately **HKD 1,663 million**, with annual interest rates ranging from **0.65%** to **5.91%**[83](index=83&type=chunk) - The gearing ratio decreased to **36.58%** (December 31, 2024: **47.80%**)[83](index=83&type=chunk) Debt and Liquidity Ratios | Indicator | H1 2025 | H1 2024 | | :--- | :--- | :--- | | EBITDA/Interest | 8.29 | 17.43 | | Debt/EBITDA | 4.41 | 2.20 | [Working Capital](index=27&type=section&id=Working%20Capital) Working capital metrics improved with a reduced cash conversion cycle of 12 days, while various assets secure bank loans and bills payable Working Capital Turnover Days | Indicator | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Days Sales Outstanding | 33 | 31 | | Days Payable Outstanding | 41 | 42 | | Inventory Days | 20 | 31 | | **Overall Cash Conversion Cycle** | **12** | **20** | - Bank loans and bills payable are secured by various assets, including credit guarantees, restricted bank deposits, bills receivable, property, plant and equipment, and land use rights[87](index=87&type=chunk)[88](index=88&type=chunk) [Cash Flow and Capital Management](index=29&type=section&id=Cash%20Flow%20and%20Capital%20Management) Operating cash inflow significantly increased due to inventory management, while investing outflow decreased and financing outflow increased, supported by prudent capital management - Net cash inflow from operating activities was approximately **HKD 1,533 million**, a year-on-year increase of **304.49%**, primarily due to accelerated cash recovery from inventory reduction and faster turnover[89](index=89&type=chunk) - Net cash outflow from investing activities was approximately **HKD 127 million**, a year-on-year decrease of **83.02%**, primarily invested in mining equipment, logistics park, and coal washing plant construction[89](index=89&type=chunk) - Net cash outflow from financing activities was approximately **HKD 997 million**, a year-on-year increase of **163.06%**, primarily used for loan repayments, dividend payments, and finance lease repayments[90](index=90&type=chunk) - The Group adopts a prudent and conservative capital management approach, managing capital allocation, reducing inventory and receivables levels, collecting customer prepayments, and using foreign exchange derivative instruments to hedge against exchange rate fluctuation risks[91](index=91&type=chunk) [Risk Factors](index=30&type=section&id=Risk%20Factors) This section outlines key risks including commodity price volatility, reliance on the steel industry, liquidity, currency fluctuations, and fair value measurement [Commodity Price Volatility Risk](index=31&type=section&id=Commodity%20Price%20Volatility%20Risk) Commodity prices are subject to uncontrollable factors, and their volatility may significantly impact the Group's profitability and financial position - Commodity market prices are volatile and influenced by numerous factors beyond our control, including international supply and demand, consumer demand levels, global economic trends, global or regional political events, and international incidents[93](index=93&type=chunk) [Reliance on Steel Industry Risk](index=31&type=section&id=Reliance%20on%20Steel%20Industry%20Risk) Revenue is highly dependent on coking coal demand from the steel industry, making the Group vulnerable to its business cycles and alternative supplies - The Group's revenue primarily derives from commodity trading services for coking coal products and is highly dependent on the demand for coking coal from steel mills and coking plants in China and international markets[94](index=94&type=chunk) [Liquidity Risk](index=31&type=section&id=Liquidity%20Risk) The Group manages liquidity risk by monitoring needs and complying with covenants to ensure sufficient cash and committed funding - The Group adopts a policy of regularly monitoring liquidity requirements and complying with loan covenants, ensuring sufficient cash reserves and committed funding from major financial institutions[95](index=95&type=chunk) [Currency Risk](index=32&type=section&id=Currency%20Risk) RMB/USD exchange rate fluctuations pose a risk to net assets and profitability, despite hedging strategies in place - Over **56.97%** of the Group's revenue is denominated in RMB, and over **59.25%** of procurement costs and certain operating expenses are denominated in USD[96](index=96&type=chunk) - The Group has largely hedged the exchange rate risk of its commodity trading business by adopting appropriate exchange rate management policies and derivative hedging instruments[96](index=96&type=chunk) [Fair Value Measurement Risk](index=32&type=section&id=Fair%20Value%20Measurement%20Risk) Valuation of certain financial assets and liabilities measured at fair value may involve uncertainties - Certain financial assets and liabilities of the Group are measured at fair value[97](index=97&type=chunk) [Human Resources](index=32&type=section&id=Human%20Resources) This section details the Group's employee profile, including functional and educational distribution, and outlines its training initiatives [Employee Profile](index=32&type=section&id=Employee%20Profile) The Group had 2,384 full-time employees as of June 30, 2025, with 87% in frontline operations, adhering to performance-based compensation and legal compliance - As of June 30, 2025, the Group had **2,384** full-time employees (excluding **894** outsourced staff of its PRC subsidiaries)[99](index=99&type=chunk) Employee Functional Distribution | Function | Number of Employees | Percentage | | :--- | :--- | :--- | | Management, Administration and Finance | 188 | 8% | | Sales and Marketing | 116 | 5% | | Frontline Production and Transportation Personnel | 2,080 | 87% | | **Total** | **2,384** | **100%** | Employee Educational Background | Education Level | Number of Employees | Percentage | | :--- | :--- | :--- | | Master's degree and above | 145 | 6% | | Bachelor's degree | 715 | 30% | | Junior college | 190 | 8% | | Secondary school and below | 1,334 | 56% | | **Total** | **2,384** | **100%** | [Training](index=34&type=section&id=Training) The Group conducted 1,699 hours of internal and external training for 12,968 participants, covering safety, management, and professional skills - For the six months ended June 30, 2025, the Group conducted various internal and external training courses, totaling **1,699 hours** with **12,968** participants[100](index=100&type=chunk) Training Course Statistics | Training Course | Hours | Participants | | :--- | :--- | :--- | | Safety Training | 313 | 8,946 | | Management and Leadership Training | 339 | 2,109 | | Professional Skills Training | 1,047 | 1,913 | | **Total** | **1,699** | **12,968** | [Health, Safety and Environment](index=34&type=section&id=Health%2C%20Safety%20and%20Environment) The Group prioritizes employee health, safety, and environmental protection, reporting no major incidents in H1 2025 - The Group places utmost importance on employee health and safety and environmental protection[102](index=102&type=chunk) - In the first half of 2025, no major incidents, environmental accidents, or occupational health and safety accidents occurred[102](index=102&type=chunk) [Corporate Governance and Compliance](index=34&type=section&id=Corporate%20Governance%20and%20Compliance) This section details the company's adherence to corporate governance codes, policies on securities transactions, and interim results disclosure [Purchase, Sale or Redemption of the Company's Listed Securities](index=34&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) The Company had 2,673,088,962 issued shares, repurchased and cancelled 23,458,000 shares, and held 3,306,000 as treasury shares - As of June 30, 2025, the Company had a total of **2,673,088,962** issued shares[103](index=103&type=chunk) - The Company repurchased and cancelled **23,458,000** shares in the first half of 2025[49](index=49&type=chunk)[103](index=103&type=chunk) - As of June 30, 2025, **3,306,000** shares were held by the Company as treasury shares[103](index=103&type=chunk) [Dividend Policy](index=35&type=section&id=Dividend%20Policy) No interim dividend was recommended to conserve cash reserves for challenging market conditions and operational flexibility - The Board did not recommend declaring or paying an interim dividend for the six months ended June 30, 2025[104](index=104&type=chunk) - Management believes that sufficient cash reserves should be retained to cope with changing market conditions and maintain greater flexibility for second-half operations[104](index=104&type=chunk) [Compliance with the Corporate Governance Code](index=35&type=section&id=Compliance%20with%20the%20Corporate%20Governance%20Code) The Company complied with the Corporate Governance Code, with the Chairman also serving as CEO, an arrangement deemed to provide consistent leadership and checks and balances - The Company has fully complied with the code provisions set out in Appendix C1 Part 2 of the Listing Rules, with the exception of a deviation from code provision C.2.1 (separation of the roles of Chairman and Chief Executive Officer)[105](index=105&type=chunk) - Ms. Cao Xinyi serves as both the Chairman of the Board and Chief Executive Officer, an arrangement the Board believes provides consistent leadership and an appropriate structure of checks and balances[105](index=105&type=chunk) [Standard Code for Securities Transactions by Directors](index=36&type=section&id=Standard%20Code%20for%20Securities%20Transactions%20by%20Directors) The Company adopted and all Directors complied with the Standard Code for Securities Transactions by Directors of Listed Issuers - The Company adopted the 'Standard Code for Securities Transactions by Directors of Listed Issuers', and all Directors confirmed compliance with the code during the reporting period[106](index=106&type=chunk) [Interim Results Review and Disclosure](index=36&type=section&id=Interim%20Results%20Review%20and%20Disclosure) The audit committee and KPMG reviewed the interim results, which were subsequently published on the Company's and HKEX websites - The Company's audit committee has reviewed the Group's interim results for the six months ended June 30, 2025[107](index=107&type=chunk) - The interim results are unaudited but have been reviewed by KPMG in accordance with Hong Kong Standard on Review Engagements 2410[107](index=107&type=chunk) - This interim results announcement was published on the Company's website (www.e-comm.com) and the HKEX website (www.hkexnews.hk)[108](index=108&type=chunk)

[Condensed Consolidated Financial Statements](index=2&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section presents Goldwind Technology Group's unaudited condensed consolidated financial statements for the six months ended June 30, 2025, providing an overview of the company's financial performance and position Condensed Consolidated Income Statement and Statement of Comprehensive Income (For the Six Months Ended June 30) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Revenue | 28,493,824 | 20,143,154 | | Cost of sales | (24,142,783) | (16,449,413) | | Gross profit | 4,351,041 | 3,693,741 | | Other income and gains, net | 1,074,032 | 1,274,599 | | Selling and distribution expenses | (659,394) | (604,813) | | Administrative expenses | (1,928,160) | (1,806,843) | | Impairment losses on financial and contract assets, net | (121,822) | (125,849) | | Other operating expenses | (141,933) | (108,219) | | Finance costs | (531,180) | (617,718) | | Profit before tax | 2,107,383 | 1,844,931 | | Income tax expense | (443,666) | (408,939) | | Profit for the period | 1,663,717 | 1,435,992 | | Profit attributable to equity holders of the Company | 1,487,542 | 1,386,844 | | Profit attributable to non-controlling interests | 176,175 | 49,148 | | Basic and diluted earnings per share (RMB) | 0.34 | 0.32 | Condensed Consolidated Statement of Financial Position (As at June 30) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Total non-current assets | 89,866,209 | 86,623,398 | | Total current assets | 71,687,065 | 68,600,887 | | Total current liabilities | 73,585,152 | 71,873,940 | | Total non-current liabilities | 44,481,646 | 42,923,264 | | Net assets | 43,486,476 | 40,427,081 | | Equity attributable to equity holders of the Company | 39,769,743 | 38,529,306 | | Non-controlling interests | 3,716,733 | 1,897,775 | Condensed Consolidated Cash Flow Statement (For the Six Months Ended June 30) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Net cash flows used in operating activities | (2,949,385) | (8,150,780) | | Net cash flows used in investing activities | (1,836,801) | (836,625) | | Net cash flows from financing activities | 1,904,796 | 4,085,818 | | Net decrease in cash and cash equivalents | (2,881,390) | (4,901,587) | | Cash and cash equivalents at end of period | 8,167,307 | 7,711,708 | [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section details the basis of preparation, accounting policy changes, operating segment information, revenue composition, expenses, and balance sheet items, providing supplementary explanations for understanding the financial statements [1. Company and Group Information](index=10&type=section&id=1.%20Company%20and%20Group%20Information) This section provides an overview of Goldwind Science & Technology Co., Ltd.'s establishment, listing details, and the primary business activities of the group - Goldwind Science & Technology Co., Ltd. was established in Xinjiang, China, on March 26, 2001, with A-shares and H-shares listed in 2007 and 2010, respectively[14](index=14&type=chunk) - The Group's main activities include R&D, manufacturing, and sales of wind turbine generator sets and components, providing wind farm construction, post-warranty services, asset management, and water treatment plant operations[19](index=19&type=chunk) [2. Basis of Preparation and Changes in Accounting Policies](index=10&type=section&id=2%20Basis%20of%20Preparation%20and%20Changes%20in%20Accounting%20Policies) This section outlines the basis for preparing the condensed consolidated financial statements and any changes in accounting policies, noting their immaterial impact - The condensed consolidated financial statements are prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" and Appendix 16 of the Hong Kong Stock Exchange Listing Rules[16](index=16&type=chunk) - Accounting policies are consistent with the 2024 annual financial statements, except for new and revised standards effective from January 1, 2025, which have no significant impact on the financial position or performance for the current and prior periods[17](index=17&type=chunk)[18](index=18&type=chunk) [3. Operating Segment Information](index=11&type=section&id=3.%20Operating%20Segment%20Information) This section provides a breakdown of the group's revenue and performance by operating segment and geographical location for the reporting period Segment Revenue (For the Six Months Ended June 30) | Segment | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Wind turbine generator sets manufacturing and sales | 21,852,284 | 12,767,677 | | Wind farm development | 3,171,937 | 4,401,088 | | Wind power services | 2,896,207 | 2,374,091 | | Others | 573,396 | 600,298 | | **Total** | **28,493,824** | **20,143,154** | Segment Results (For the Six Months Ended June 30) | Segment | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Wind turbine generator sets manufacturing and sales | 115,498 | (584,584) | | Wind farm development | 1,788,587 | 2,428,419 | | Wind power services | 550,561 | 343,583 | | Others | 448,885 | 851,336 | | **Total** | **2,413,354** | **2,217,389** | Sales to External Customers (By Geographical Location) | Region | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | China | 20,117,354 | 15,367,226 | | Other countries | 8,376,470 | 4,775,928 | | **Total** | **28,493,824** | **20,143,154** | [4. Revenue](index=15&type=section&id=4.%20Revenue) This section details the group's revenue sources and the recognition policies for various performance obligations, including wind turbine sales, wind farm development, and services Revenue Stream Analysis (For the Six Months Ended June 30) | Revenue Stream | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Sales of wind turbine generator sets and components | 21,852,284 | 12,767,677 | | Wind farm development | 3,171,937 | 4,401,088 | | Wind power services | 2,803,156 | 2,254,764 | | Others | 573,396 | 600,298 | | Total lease income | 93,051 | 119,327 | | **Total** | **28,493,824** | **20,143,154** | - Performance obligations for wind turbine sales and power station product sales are satisfied when control of the goods is transferred[31](index=31&type=chunk) - Performance obligations for wind farm development are typically recognized when electricity is transmitted, measured based on the amount of wind power transmitted and fixed tariff rates[32](index=32&type=chunk) - Performance obligations for wind power services, including service-type warranties and construction services, are recognized over the service period or based on the stage of completion[33](index=33&type=chunk) [5. Other Income and Gains, Net](index=18&type=section&id=5.%20Other%20Income%20and%20Gains,%20Net) This section presents a detailed breakdown of other income and gains, net, and explains the reasons for period-over-period changes Other Income and Gains, Net (For the Six Months Ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Bank interest income | 225,209 | 245,260 | | Government grants and deferred income | 158,483 | 78,448 | | VAT refunds | 112,102 | 82,337 | | Gain on disposal of interests in subsidiaries | 143,148 | 137,094 | | Investment income from loss of significant influence or disposal of joint ventures/associates | 9,174 | 824,311 | | Fair value changes of listed equity investments | 350,311 | (115,100) | | **Total** | **1,074,032** | **1,274,599** | - Other income and gains, net, decreased by **15.74%** year-on-year, primarily due to reduced investment gains from disposal of joint ventures, increased fair value losses on unlisted equity investments, and decreased technical service income[36](index=36&type=chunk)[161](index=161&type=chunk)[162](index=162&type=chunk) [6. Profit Before Tax](index=19&type=section&id=6.%20Profit%20Before%20Tax) This section itemizes the components deducted from or credited to profit before tax, including costs of sales, depreciation, amortization, and staff welfare expenses Items Deducted From/(Credited to) Profit Before Tax (For the Six Months Ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Cost of inventories sold | 20,129,632 | 12,269,398 | | Cost of wind power generation | 1,349,074 | 1,916,923 | | Cost of wind power services | 2,245,075 | 1,785,942 | | Depreciation of property, plant and equipment | 1,396,212 | 1,224,767 | | Depreciation of right-of-use assets | 111,156 | 92,584 | | Amortization of other intangible assets | 294,795 | 249,241 | | Net impairment of trade receivables | 118,526 | 110,670 | | Net impairment of inventories | 19,175 | (18,858) | | Total staff welfare expenses | 2,092,794 | 2,061,107 | | Total research and development costs | 906,215 | 887,953 | [7. Finance Costs](index=21&type=section&id=7.%20Finance%20Costs) This section details the group's finance costs, including interest on bank loans and lease liabilities, and explains the reasons for period-over-period changes Finance Costs (For the Six Months Ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Interest on bank and other borrowings | 632,055 | 700,745 | | Interest on lease liabilities | 63,096 | 71,782 | | Less: Interest capitalized | (163,971) | (154,809) | | **Total** | **531,180** | **617,718** | - Finance costs decreased by **14.01%** year-on-year, mainly due to reduced interest on bank and other borrowings[39](index=39&type=chunk)[167](index=167&type=chunk) [8. Income Tax Expense](index=21&type=section&id=8.%20Income%20Tax%20Expense) This section outlines the group's income tax expenses, including current and deferred tax, and details the preferential tax policies enjoyed by the company and its subsidiaries - The Company and ten subsidiaries are recognized as "High-New Technology Enterprises" and enjoy a preferential tax rate of **15%**[40](index=40&type=chunk) - Some Chinese subsidiaries engaged in public infrastructure projects enjoy a "three-year exemption and three-year half reduction" corporate income tax incentive[40](index=40&type=chunk) - Certain Chinese subsidiaries operating in western regions and participating in government-supported projects are subject to a **15%** preferential tax rate[40](index=40&type=chunk) Income Tax Expense (For the Six Months Ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Current | 705,626 | 546,108 | | Deferred tax | (261,960) | (137,169) | | **Tax expense for the period** | **443,666** | **408,939** | - Income tax expense increased by **8.49%** year-on-year, primarily due to an increase in taxable profit for the period[43](index=43&type=chunk)[168](index=168&type=chunk) [9. Dividends](index=22&type=section&id=9.%20Dividends) This section reports on the dividends approved and paid for the previous fiscal year and the board's decision regarding interim dividends for the current reporting period - The 2024 final cash dividend of **RMB 1.4** per 10 shares (tax inclusive), totaling **591,114 thousand RMB**, was approved by shareholders on June 25, 2025[44](index=44&type=chunk) - The Board did not recommend the payment of a dividend for the six months ended June 30, 2025 (nil for the same period in 2024)[44](index=44&type=chunk) [10. Earnings Per Share Attributable to Ordinary Equity Holders of the Company](index=22&type=section&id=10.%20Earnings%20Per%20Share%20Attributable%20to%20Ordinary%20Equity%20Holders%20of%20the%20Company) This section provides the calculation of basic and diluted earnings per share attributable to the company's ordinary equity holders for the reporting period Earnings Per Share Calculation (For the Six Months Ended June 30) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Profit attributable to ordinary equity holders of the Company | 1,487,542 | 1,386,844 | | Less: Distribution related to perpetual medium-term notes | (56,656) | (40,499) | | Profit for the purpose of basic earnings per share | 1,430,886 | 1,346,345 | | Weighted average number of ordinary shares in issue (thousands) | 4,182,839 | 4,225,068 | | **Basic earnings per share (RMB)** | **0.34** | **0.32** | | **Diluted earnings per share (RMB)** | **0.34** | **0.32** | [11. Property, Plant and Equipment](index=23&type=section&id=11.%20Property,%20Plant%20and%20Equipment) This section details the changes in the group's property, plant and equipment, including additions, disposals, and depreciation expenses for the reporting period Changes in Property, Plant and Equipment (As at June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Beginning of period/year | 45,973,875 | 41,805,332 | | Additions | 2,865,401 | 9,248,511 | | Disposals | (37,520) | (230,401) | | Depreciation expense for the period/year | (1,396,212) | (2,673,869) | | Disposal of subsidiaries | (433,664) | (1,598,950) | | **End of period/year** | **47,004,585** | **45,973,875** | [12. Leases](index=24&type=section&id=12.%20Leases) This section presents the changes in the group's right-of-use assets and lease liabilities, including new leases, depreciation, and interest recognized Changes in Right-of-Use Assets (As at June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Beginning of period/year | 3,030,535 | 3,192,509 | | New leases | 1,193,921 | 556,803 | | Depreciation expense for the period/year | (111,156) | (181,586) | | **End of period/year** | **3,991,448** | **3,030,535** | Changes in Lease Liabilities (As at June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Beginning of period/year | 4,588,993 | 5,231,674 | | New leases | 947,752 | 3,095,970 | | Interest recognized during the period/year | 63,096 | 223,826 | | Payments | (475,324) | (986,045) | | **End of period/year** | **5,056,259** | **4,588,993** | | Current portion | 384,556 | 372,878 | | Non-current portion | 4,671,703 | 4,216,115 | [13. Equity Investments Designated at Fair Value Through Other Comprehensive Income](index=25&type=section&id=13.%20Equity%20Investments%20Designated%20at%20Fair%20Value%20Through%20Other%20Comprehensive%20Income) This section reports on the group's equity investments designated at fair value through other comprehensive income, specifically non-listed equity investments Equity Investments Designated at Fair Value Through Other Comprehensive Income (As at June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Unlisted equity investments | 156,203 | 164,996 | [14. Financial Assets at Fair Value Through Profit or Loss](index=25&type=section&id=14.%20Financial%20Assets%20at%20Fair%20Value%20Through%20Profit%20or%20Loss) This section details the group's financial assets measured at fair value through profit or loss, including listed and unlisted equity investments, partnership investments, and wealth management products Financial Assets at Fair Value Through Profit or Loss (As at June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Listed equity investments | 1,678,197 | 1,754,215 | | Unlisted equity investments | 1,658,691 | 1,667,801 | | Partnership investments | 120,000 | 120,000 | | Wealth management products | 790,000 | 1,000,000 | | Others | 23,970 | 20,000 | | **Total** | **4,270,858** | **4,562,016** | | Non-current portion | (3,480,858) | (3,562,016) | | Current portion | 790,000 | 1,000,000 | - Wealth management products are mandatorily classified as financial assets at fair value through profit or loss because their contractual cash flows are not solely payments of principal and interest[51](index=51&type=chunk) [15. Other Non-Current Financial Assets](index=26&type=section&id=15.%20Other%20Non-Current%20Financial%20Assets) This section presents the group's other non-current financial assets, primarily debt investments, along with their impairment provisions Other Non-Current Financial Assets (As at June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Debt investments | 194,582 | 205,102 | | Impairment allowance | (320) | (329) | | **Total** | **194,262** | **204,773** | | Non-current portion | (192,625) | (200,345) | | Current portion | 1,637 | 4,428 | [16. Deferred Tax](index=27&type=section&id=16.%20Deferred%20Tax) This section provides a breakdown of the group's deferred tax assets and liabilities, including those related to asset impairment, tax losses, and fair value adjustments Deferred Income Tax Assets (As at June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Asset impairment provisions | 639,428 | 644,373 | | Tax losses | 2,167,519 | 2,048,600 | | Provisions and accrued items | 2,143,319 | 2,040,920 | | **Total** | **6,504,019** | **6,251,106** | Deferred Income Tax Liabilities (As at June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Fair value of identifiable assets exceeding carrying value of acquired subsidiaries | 754,306 | 788,488 | | Asset depreciation | 508 | 538 | | Fair value adjustments of equity investments recognized in other comprehensive income/profit or loss | 542,894 | 529,705 | | **Total** | **1,712,827** | **1,696,648** | Group Deferred Income Tax Assets and Liabilities After Offsetting (As at June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Deferred income tax assets | 6,449,251 | 6,136,494 | | Deferred income tax liabilities | (1,658,059) | (1,582,036) | [17. Trade and Bills Receivables](index=31&type=section&id=17.%20Trade%20and%20Bills%20Receivables) This section details the group's trade and bills receivables, including impairment provisions and an aging analysis, and notes the reclassification of some bank acceptance bills Trade and Bills Receivables (As at June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Trade receivables | 35,869,428 | 32,840,414 | | Bills receivables | 1,435,960 | 2,437,112 | | Impairment allowance | (2,141,650) | (2,014,948) | | **Total** | **35,163,738** | **33,262,578** | - The Group reclassified some bank acceptance bills as financial assets at fair value through other comprehensive income, but they are still presented as trade and bills receivables[58](index=58&type=chunk) Aging Analysis of Trade and Bills Receivables (Net of Allowance, As at June 30) | Aging | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Within six months | 17,423,331 | 16,526,290 | | Six months to one year | 4,530,334 | 4,531,854 | | One to two years | 6,368,065 | 6,353,032 | | Two to three years | 3,393,645 | 2,832,886 | | Over three years | 3,448,363 | 3,018,516 | | **Total** | **35,163,738** | **33,262,578** | [18. Financial Receivables](index=33&type=section&id=18.%20Financial%20Receivables) This section outlines the group's financial receivables, primarily from service concession arrangements and finance lease receivables, along with their impairment provisions Financial Receivables (As at June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Receivables under service concession arrangements | 3,779,474 | 3,983,349 | | Finance lease receivables | 3,120,978 | 3,240,376 | | Impairment allowance | (82,508) | (83,676) | | **Total** | **7,156,380** | **7,420,224** | | Non-current portion | (6,771,503) | (7,043,030) | | Current portion | 384,877 | 377,194 | - Receivables under service concession arrangements primarily arise from concession contracts for construction services and water treatment plant operations[60](index=60&type=chunk) - Finance lease receivables primarily arise from finance lease contracts providing leased equipment to lessees[61](index=61&type=chunk) [19. Prepayments, Other Receivables and Other Assets](index=34&type=section&id=19.%20Prepayments,%20Other%20Receivables%20and%20Other%20Assets) This section details the group's prepayments, other receivables, and other assets, including advances to suppliers, VAT credits, and deposits, along with impairment provisions Prepayments, Other Receivables and Other Assets (As at June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Advances to suppliers | 1,125,062 | 2,193,175 | | Prepayments | 2,429,630 | 766,214 | | VAT input tax credit | 4,709,072 | 4,151,810 | | Deposits and other receivables | 2,207,208 | 2,732,427 | | Impairment allowance | (264,130) | (259,402) | | **Total** | **10,206,842** | **9,584,224** | | Non-current portion | (4,828,622) | (3,776,077) | | Current portion | 5,378,220 | 5,808,147 | [20. Derivative Financial Instruments](index=35&type=section&id=20.%20Derivative%20Financial%20Instruments) This section presents the group's derivative financial instruments, including foreign exchange forward contracts and call options, categorized as assets and liabilities Derivative Financial Instrument Assets (As at June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Foreign exchange forward contracts - designated hedges | 8,526 | 37,382 | | **Total** | **8,526** | **37,382** | | Current portion | 8,526 | 36,452 | Derivative Financial Instrument Liabilities (As at June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Foreign exchange forward contracts - designated hedges | 139,155 | 39,069 | | Call options | 8,854 | 13,320 | | **Total** | **148,009** | **52,389** | | Non-current portion | (36,361) | (21,489) | | Current portion | 111,648 | 30,900 | [21. Inventories](index=36&type=section&id=21.%20Inventories) This section details the composition of the group's inventories, including raw materials, work-in-progress, finished goods, and power station costs, noting capitalized interest Inventory Composition (As at June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Raw materials | 6,126,775 | 4,650,108 | | Work-in-progress, finished goods and semi-finished goods | 6,446,696 | 4,552,648 | | Power station costs | 6,329,131 | 5,612,468 | | **Total** | **18,929,245** | **14,827,632** | - Capitalized interest included in power station costs amounted to **39,432 thousand RMB** (2024: **87,271 thousand RMB**), with an interest capitalization rate ranging from **2.51%** to **3.50%**[68](index=68&type=chunk) [22. Cash and Cash Equivalents and Pledged Deposits](index=37&type=section&id=22.%20Cash%20and%20Cash%20Equivalents%20and%20Pledged%20Deposits) This section provides a breakdown of the group's cash and cash equivalents and pledged deposits, categorized by type and currency Cash and Cash Equivalents and Pledged Deposits (As at June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Cash and bank balances | 7,814,008 | 11,512,606 | | Time deposits | 1,771,500 | 106,798 | | Less: Pledged deposits | (846,702) | (486,500) | | **Cash and cash equivalents in condensed consolidated statement of financial position** | **8,738,806** | **11,132,904** | | Cash and cash equivalents in condensed consolidated cash flow statement | 8,167,307 | 11,030,276 | | Pledged deposits | 846,702 | 486,500 | Cash and Cash Equivalents and Pledged Deposits (By Currency, As at June 30) | Currency | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | RMB | 6,214,780 | 9,568,652 | | USD | 1,409,227 | 739,968 | | EUR | 758,736 | 406,636 | | AUD | 303,937 | 124,013 | | HKD | 153,362 | 209,531 | | Argentine Peso | 270,272 | 148,352 | | Other currencies | 475,194 | 422,252 | | **Total** | **9,585,508** | **11,619,404** | [23. Contract Assets](index=38&type=section&id=23.%20Contract%20Assets) This section details the group's contract assets, primarily from wind turbine warranty deposits, construction services, and concession arrangements, along with their recognition and reclassification policies Sources of Contract Assets (As at June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Wind turbine sales warranty deposits | 6,255,407 | 5,883,414 | | Construction services | 994,375 | 1,146,251 | | Concession services arrangements | 296,629 | 97,690 | | Impairment | (46,676) | (47,065) | | **Total** | **7,499,735** | **7,080,290** | | Non-current portion | (6,054,421) | (5,415,238) | | Current portion | 1,445,314 | 1,665,052 | - Wind turbine sales warranty deposits typically mature 2 to 5 years after the completion of wind turbine commissioning[70](index=70&type=chunk) - Contract assets for construction services are initially recognized when construction services are provided and revenue is recognized, then reclassified as trade receivables upon customer acceptance of billing settlement[71](index=71&type=chunk) [24. Trade and Bills Payables](index=39&type=section&id=24.%20Trade%20and%20Bills%20Payables) This section presents the group's trade and bills payables, including their typical settlement terms and the due dates for warranty payables Trade and Bills Payables (As at June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Trade payables | 32,205,881 | 31,193,698 | | Bills payables | 7,969,530 | 10,304,613 | | **Total** | **40,175,411** | **41,498,311** | | Non-current liabilities portion | (714,103) | (719,442) | | Current liabilities portion | 39,461,308 | 40,778,869 | - Trade and bills payables are non-interest bearing and generally settled within 180 days, while warranty payables typically mature 3 to 5 years after goods delivery[73](index=73&type=chunk) [25. Other Payables and Accruals](index=40&type=section&id=25.%20Other%20Payables%20and%20Accruals) This section details the group's other payables and accruals, including contract liabilities, accrued salaries, other taxes payable, and dividends payable Other Payables and Accruals (As at June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Contract liabilities | 20,250,268 | 18,181,188 | | Accrued salaries, wages and benefits | 720,814 | 1,015,372 | | Other taxes payable | 253,502 | 364,829 | | Dividends payable | 688,980 | 88,743 | | Others | 1,700,248 | 1,484,223 | | **Total** | **23,626,382** | **21,144,824** | | Non-current liabilities portion | (304,873) | (249,268) | | Current liabilities portion | 23,321,509 | 20,895,556 | [26. Interest-Bearing Bank and Other Borrowings](index=41&type=section&id=26.%20Interest-Bearing%20Bank%20and%20Other%20Borrowings) This section provides a breakdown of the group's interest-bearing bank and other borrowings, distinguishing between current and non-current portions Interest-Bearing Bank and Other Borrowings (As at June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | **Current portion** | | | | Short-term bank loans | 1,462,544 | 1,576,164 | | Current portion of long-term bank loans | 1,783,754 | 1,216,775 | | Lease liabilities | 384,556 | 372,878 | | Payables for sale and leaseback | 79,012 | 156,608 | | **Non-current portion** | | | | Long-term bank loans | 30,017,009 | 29,505,756 | | Payables for sale and leaseback | 2,758,373 | 2,510,672 | | Lease liabilities | 4,671,703 | 4,216,115 | | **Total** | **43,673,389** | **42,049,203** | [27. Share Capital](index=42&type=section&id=27.%20Share%20Capital) This section details the composition of the company's share capital, including the number and par value of A shares and H shares Share Capital Composition (As at June 30) | Share Type | 2025 Number of Shares (thousands) | 2025 Par Value (RMB thousands) | 2024 Number of Shares (thousands) | 2024 Par Value (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | | A Shares (par value RMB 1.00 per share) | 3,451,496 | 3,451,496 | 3,451,496 | 3,451,496 | | H Shares (par value RMB 1.00 per share) | 773,572 | 773,572 | 773,572 | 773,572 | | **Total** | **4,225,068** | **4,225,068** | **4,225,068** | **4,225,068** | [28. Share-Based Payments](index=42&type=section&id=28.%20Share-Based%20Payments) This section describes the company's restricted share incentive plan, including the approval, grant details, and recognized expenses for the reporting period - The company approved a restricted share incentive plan on November 19, 2024, involving the repurchase of A-shares as restricted shares, totaling **442,460 thousand RMB**[79](index=79&type=chunk) - On December 13, 2024, **39,400,000** restricted shares were granted at an issue price of **RMB 4.09** per share[79](index=79&type=chunk) - As of June 30, 2025, the Group recognized expenses related to the incentive plan amounting to **72,745 thousand RMB**[80](index=80&type=chunk) [29. Disposal of Subsidiaries](index=43&type=section&id=29.%20Disposal%20of%20Subsidiaries) This section lists the subsidiaries disposed of during the reporting period, including their disposal dates, equity re-establishment ratios, and the total consideration received Subsidiaries Disposed of During the Period (As at June 30) | Company Name | Disposal Date | Equity Re-establishment Ratio | | :--- | :--- | :--- | | Jimunai Runjiaying Wind Power Co., Ltd. | January 1, 2025 | 51% | | Mulei Goldwind Tianrun Wind Power Co., Ltd. | April 30, 2025 | 100% | | Shanghai Hurong New Energy Co., Ltd. | May 14, 2025 | 100% | | Taicang Juyi Technology Innovation Consulting Co., Ltd. | June 30, 2025 | 100% | | Glad Precision Technology (Jiangsu) Co., Ltd. | June 27, 2025 | Not applicable | - The total consideration for the disposal of subsidiaries during the period was **352,142 thousand RMB**, with net cash inflow of **219,157 thousand RMB**[83](index=83&type=chunk) [30. Contingent Liabilities](index=44&type=section&id=30.%20Contingent%20Liabilities) This section details the group's contingent liabilities, including guarantees issued and pending lawsuits, and their respective amounts Contingent Liabilities (As at June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Guarantees issued | 33,792,428 | 24,537,869 | | Guarantees provided to banks for loans: associates | 161,519 | 170,042 | | Guarantees provided to banks for loans: an independent third party | 126,036 | 129,348 | | **Total** | **34,079,983** | **24,837,259** | - The Group is a defendant in pending lawsuits totaling **2,789,893 thousand RMB** (December 31, 2024: **2,450,965 thousand RMB**)[86](index=86&type=chunk) [31. Commitments](index=45&type=section&id=31.%20Commitments) This section outlines the group's capital commitments, primarily related to property, plant and equipment, and land use rights Capital Commitments (As at June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Property, plant and equipment and land use rights | 10,161,033 | 6,936,784 | | **Total** | **10,161,033** | **6,936,784** | [32. Related Party Transactions](index=46&type=section&id=32.%20Related%20Party%20Transactions) This section provides details of significant transactions and outstanding balances with related parties, including associates, joint ventures, and key management personnel compensation Significant Transactions with Related Parties (For the Six Months Ended June 30) | Related Party Type | 2025 Transaction Amount (RMB thousands) | 2024 Transaction Amount (RMB thousands) | | :--- | :--- | :--- | | Beneficiary shareholders of the Company | - | 5,161 | | Associates | 418,940 | 482,459 | | Joint ventures | 68,945 | 65,426 | - The Directors believe that the Group's transactions with related parties were conducted at arm's length prices and in accordance with general commercial terms[89](index=89&type=chunk)[90](index=90&type=chunk) Outstanding Balances with Related Parties (As at June 30) | Related Party Type | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Trade and bills receivables: beneficiary shareholders | 908 | 1,963 | | Trade and bills receivables: joint ventures | 56,124 | 35,923 | | Trade and bills receivables: associates | 8,138 | 29,379 | | Prepayments, other receivables and other assets: joint ventures | 845,539 | 584,855 | | Prepayments, other receivables and other assets: associates | 25,412 | 36,770 | | Trade and bills payables: associates | 282,240 | 629,817 | | Other payables and accruals: joint ventures | 8,733 | 9,071 | | Other payables and accruals: associates | 2,989 | 4,215 | Key Management Personnel Compensation (For the Six Months Ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Short-term employee benefits | 11,266 | 11,099 | | Share-based payment expenses | 7,350 | - | | Contributions to retirement benefit plans | 400 | 383 | | **Total** | **19,016** | **11,482** | [33. Financial Risk Management and Financial Instruments](index=48&type=section&id=33.%20Financial%20Risk%20Management%20and%20Financial%20Instruments) This section describes the group's exposure to and management of financial risks, including interest rate, foreign exchange, credit, and liquidity risks, and the fair value measurement hierarchy of financial instruments - The Group faces major financial risks including fair value and cash flow interest rate risk, foreign exchange risk, credit risk, and liquidity risk[93](index=93&type=chunk) - As of June 30, 2025, the Group had net outflow liabilities of approximately **1,898 million RMB** and net cash outflow from operating activities of approximately **2,949 million RMB**[93](index=93&type=chunk) - The Group manages liquidity risk by regularly monitoring liquidity requirements, maintaining external financing and committed credit lines, and entering into financing agreements with multiple banks and financial institutions[95](index=95&type=chunk) - The Group's policy is that no more than **70%** of borrowings should mature within 12 months[95](index=95&type=chunk) - The fair value measurement hierarchy for the Group's financial instruments includes Level 1 (quoted prices in active markets), Level 2 (significant observable inputs), and Level 3 (significant unobservable inputs)[105](index=105&type=chunk) [34. Events After the Reporting Period](index=57&type=section&id=34.%20Events%20After%20the%20Reporting%20Period) This section confirms that no significant events have occurred after the reporting period that would materially affect the group's operations or financial performance - No significant post-balance sheet events have occurred since June 30, 2025, up to the date of the condensed consolidated financial statements[112](index=112&type=chunk) [35. Approval of Condensed Consolidated Financial Statements](index=57&type=section&id=35.%20Approval%20of%20Condensed%20Consolidated%20Financial%20Statements) This section states that the condensed consolidated financial statements were approved and authorized for issue by the Board of Directors on August 22, 2025 - The condensed consolidated financial statements were approved and authorized for issue by the Board of Directors on August 22, 2025[113](index=113&type=chunk) [Management Discussion and Analysis](index=58&type=section&id=Management%20Discussion%20and%20Analysis) This section reviews Goldwind Technology's main businesses, core competencies, operating performance of key segments, and financial results, while also outlining future development trends and identifying risks and mitigation strategies [I. Principal Businesses During the Reporting Period](index=58&type=section&id=I.%20Principal%20Businesses%20During%20the%20Reporting%20Period) This section outlines the company's core businesses, including wind turbine manufacturing, wind power services, and wind farm investment and development, along with other diversified operations - The company operates three main businesses: wind turbine manufacturing, wind power services, and wind farm investment and development, alongside other businesses like water treatment, providing diversified revenue channels[114](index=114&type=chunk) - Goldwind Technology offers integrated solutions for wind turbine products, wind power services, and wind farm investment and development, with units suitable for various operating environments, and actively expands its global market presence[114](index=114&type=chunk) [II. Analysis of Core Competencies](index=58&type=section&id=II.%20Analysis%20of%20Core%20Competencies) This section highlights the company's core strengths, including its leading market position, R&D innovation, commitment to quality, comprehensive solutions, and global presence - The company is one of the earliest enterprises in China to enter the wind power equipment manufacturing sector, ranking first in domestic new wind power installed capacity for **14** consecutive years and first globally for **three** consecutive years[115](index=115&type=chunk) - The company emphasizes R&D innovation, with a "1+1+6" global R&D layout and over **3,000** R&D technical personnel, continuously enhancing product performance and market coverage[116](index=116&type=chunk) - The company adheres to a quality and efficiency-driven approach, ensuring high quality and stability throughout the wind turbine's lifecycle, reducing levelized cost of energy, and building a strong industry reputation[117](index=117&type=chunk) - The company provides integrated solutions for wind farm services and wind farm development, actively expanding into new business areas such as hybrid towers, energy storage, and energy carbon management, aiming to be a leader in clean energy and energy-saving environmental protection solutions[118](index=118&type=chunk) - Adhering to the principle of "localizing to globalize," the company has established a "1+1+6" global R&D layout, **7** regional centers, **5** global solution factories, and **3** international production bases, with operations spanning **47** countries across six continents[119](index=119&type=chunk) [III. Analysis of Principal Businesses](index=59&type=section&id=III.%20Analysis%20of%20Principal%20Businesses) This section provides an in-depth analysis of the company's main business segments, including market overview, operational performance, and future outlook - During the reporting period, the Group achieved revenue of **28,493.82 million RMB**, representing a **41.46% year-on-year increase**, and net profit attributable to the parent company of **1,487.54 million RMB**, a **7.26% year-on-year increase**[132](index=132&type=chunk) [(I) Overview](index=59&type=section&id=%28I%29%20Overview) This section provides a general overview of the global and domestic economic environment, energy policies, and the wind power industry's development during the reporting period - The International Monetary Fund (IMF) forecasts global economic growth to slow to **3.0%** and **3.1%** in 2025 and 2026, respectively[120](index=120&type=chunk) - In the first half of 2025, China's GDP grew by **5.3%** year-on-year, with the equipment manufacturing industry's added value increasing by **10.2%** year-on-year[120](index=120&type=chunk) - From January to June 2025, total electricity consumption across society increased by **3.7%** year-on-year; as of the end of June, national cumulative wind power installed capacity was approximately **573 GW**, a **22.7%** year-on-year increase[120](index=120&type=chunk) - The "Energy Law of the People's Republic of China" officially came into effect, promoting clean and low-carbon energy development and the construction of a unified national electricity market[121](index=121&type=chunk)[122](index=122&type=chunk) - The National Energy Administration issued the "2025 Energy Work Guidance Opinion," proposing to increase the share of non-fossil energy in power generation capacity to approximately **60%** and in total energy consumption to approximately **20%**[124](index=124&type=chunk) - In the first half of 2025, national newly grid-connected wind power capacity reached **51.39 GW**, a **98.9% year-on-year increase**, with cumulative installed capacity reaching **573 GW**, accounting for **15.7%** of the grid's total generation capacity[129](index=129&type=chunk) - From January to June 2025, the total domestic wind turbine public bidding volume reached **71.93 GW**, a **8.8% year-on-year increase**, with 6MW and above models maintaining a high proportion of bidding volume[130](index=130&type=chunk) - China's cumulative offshore wind power installed capacity ranks first globally, with **5** floating offshore wind power demonstration projects completed, totaling **40 MW** of installed capacity[131](index=131&type=chunk) [(II) Analysis of the Company's Principal Businesses](index=61&type=section&id=%28II%29%20Analysis%20of%20the%20Company%27s%20Principal%20Businesses) This section provides a detailed analysis of the company's core business segments, including wind turbine manufacturing, wind power services, wind farm investment, and water treatment operations - The company adheres to a high-quality development philosophy, driving product and technological innovation to create a multi-scenario product portfolio covering onshore large-scale bases, deep-sea offshore areas, and distributed wind power, while simultaneously expanding into emerging businesses such as "wind power +" hydrogen production, energy storage, hybrid towers, and energy carbon management[132](index=132&type=chunk) [1. Production, R&D, and Sales of Wind Turbines and Components](index=61&type=section&id=1.%20Production,%20R%26D,%20and%20Sales%20of%20Wind%20Turbines%20and%20Components) This section details the revenue, sales volume, order backlog, and technological innovations in the company's wind turbine manufacturing and sales segment - During the reporting period, the company's revenue from wind turbine and component sales was **21,852.28 million RMB**, a **71.15% year-on-year increase**, accounting for **76.69%** of operating revenue[134](index=134&type=chunk) - From January to June 2025, external sales volume reached **10,641.44 MW**, a **106.60% year-on-year increase**, with 6MW and above units seeing a **187.01%** year-on-year increase in sales volume, becoming the dominant model[134](index=134&type=chunk) Wind Turbine Sales Volume Details (For the Six Months Ended June 30) | Model | 2025 Sales Volume (MW) | 2024 Sales Volume (MW) | Sales Volume Change | | :--- | :--- | :--- | :--- | | Below 4MW | 22.50 | 24.85 | -9.46% | | 4MW (inclusive) - 6MW | 1,947.35 | 2,104.52 | -7.47% | | 6MW and above | 8,671.59 | 3,021.35 | 187.01% | | **Total** | **10,641.44** | **5,150.72** | **106.60%** | - As of June 30, 2025, the company's external order backlog totaled **51,811.47 MW**, a **45.58% year-on-year increase**, with overseas orders amounting to **7,359.82 MW**, up **42.27%** year-on-year[135](index=135&type=chunk) - The company continuously increases investment in technological innovation and R&D, forming GWHV11, GWHV12, GWHV15, GWHV17, GWHV19, GWHV20, GWHV21 multi-platform product series, covering onshore, offshore, and overseas wind power markets[137](index=137&type=chunk) - The GWH204 Ultra platform received ultra-high tower safety certification and was selected for the "2025 Wind Power Leading Innovation Product Catalog"[137](index=137&type=chunk) - The GWHV20 platform's GWH266-16.2MW Ultra prototype was grid-connected and fully operational in Jiangsu, increasing power generation by **5%** and reducing levelized cost of energy by **3%** to **4%**[138](index=138&type=chunk) - Goldwind Technology's grid-forming units were successfully selected for the National Energy Administration's fourth batch of major technical equipment for first (set) applications in the energy sector, and medium-speed grid-forming units passed performance testing by the China Electric Power Research Institute[138](index=138&type=chunk) - In the first half of 2025, the company obtained **137** complete machine certification certificates (**105** domestic, **32** international)[139](index=139&type=chunk) - As of the end of the reporting period, the company held **6,245** domestic patent applications (**3,803** invention patents) and **4,611** domestic authorized patents (**2,356** invention patents), ranking first in the industry[139](index=139&type=chunk) - The company actively participates in **33** IEC standard revisions and leads or participates in **606** domestic standard revisions[139](index=139&type=chunk) - The company maintains its leading position in the hybrid tower industry, with domestic hybrid tower new orders increasing by **50%** and deliveries by **59%** year-on-year in the first half of 2025, securing **3 GW** of international project orders[141](index=141&type=chunk) - In the first half of 2025, the company's domestic energy storage new orders increased by **99%** year-on-year, and overseas energy storage products GoldBlock L200 and GoldBlock L700 achieved scaled breakthroughs in orders and shipments[142](index=142&type=chunk) [2. Wind Power Services](index=64&type=section&id=2.%20Wind%20Power%20Services) This section describes the company's wind power services, focusing on asset value preservation, operational efficiency improvements, and revenue from post-warranty services - Goldwind Technology aims to preserve and enhance the value of new energy assets, promoting an operational philosophy shift from "maximizing power generation" to "optimizing power generation," continuously iterating and upgrading the Goldwind Tianji Trading Cloud Platform and Digital Intelligence Center[143](index=143&type=chunk) - The company integrates online monitoring with AI analysis technology to accelerate the "unmanned" process of wind farms, improving operation and maintenance efficiency by an average of over **25%**[143](index=143&type=chunk) - Self-developed flow control technology based on high-precision flow measurement has achieved market application and secured orders, increasing annual power generation by **2.5%** to **5%**[144](index=144&type=chunk) - In the first half of 2025, the company's electricity sales business covered **7** provinces, providing green energy to over **3,500** users[144](index=144&type=chunk) - During the reporting period, the Group's domestic and international post-warranty service projects had an operational capacity of nearly **45.95 GW**, a **37.0%** year-on-year increase[144](index=144&type=chunk) - The Group achieved wind power service revenue of **2,896.21 million RMB**, of which post-warranty service revenue was **1,754.71 million RMB**, a **9.56% year-on-year increase**[144](index=144&type=chunk) [3. Wind Farm Investment and Development](index=64&type=section&id=3.%20Wind%20Farm%20Investment%20and%20Development) This section covers the company's wind farm investment and development activities, including new grid-connected capacity, cumulative capacity, and power generation revenue - The company adheres to onshore centralized wind power development as its core, securing multiple large-scale projects and distributed indicators by closely following "Energy Demonstration County" policies and the "Riding the Wind" initiative[145](index=145&type=chunk) - During the reporting period, the company's domestic and international self-operated wind farms added **709.04 MW** of equity grid-connected capacity and transferred **100.2 MW** of equity grid-connected capacity[146](index=146&type=chunk) - As of the end of the reporting period, global cumulative equity grid-connected capacity was **8,651.70 MW**, with equity in-construction wind farm capacity of **3,705.42 MW**[146](index=146&type=chunk) - The Group's wind power projects generated revenue of **3,171.94 million RMB**, and investment income from the transfer of wind farm project equity was **143.00 million RMB**, a **35.89% year-on-year increase**[146](index=146&type=chunk) - During the reporting period, the average utilization hours for domestic wind turbines were **1,255** hours, exceeding the national average for wind turbines by **168** hours[146](index=146&type=chunk) [4. Water Treatment Business](index=65&type=section&id=4.%20Water%20Treatment%20Business) This section provides an overview of the company's water treatment business, including the number of project companies, operational scale, and revenue generated - As of the end of the reporting period, Goldwind Technology held **64** water treatment project companies, covering **13** provinces nationwide, with a total operational agreement scale of **2.5851 million tons/day**[147](index=147&type=chunk) - During the reporting period, the Group achieved water treatment operating revenue of **502.45 million RMB**, largely consistent with the same period last year[147](index=147&type=chunk) [5. Outlook for the Company's Future Development](index=65&type=section&id=5.%20Outlook%20for%20the%20Company%27s%20Future%20Development) This section presents forecasts for global wind power growth and the company's strategic positioning in the evolving clean energy market - BloombergNEF (BNEF) forecasts global new wind power installed capacity to reach **143 GW** in 2025, with cumulative global wind power installed capacity reaching **2 TW** by 2030[148](index=148&type=chunk) - GWEC predicts that over **350 GW** of new offshore wind power capacity will be added globally in the next decade (2025-2034), with China's new offshore wind capacity totaling **80 GW** between 2025 and 2030, accounting for **51%** of global new capacity[149](index=149&type=chunk) [6. Basic Information of Principal Subsidiaries](index=65&type=section&id=6.%20Basic%20Information%20of%20Principal%20Subsidiaries) This section lists the group's principal subsidiaries, joint ventures, and associates, along with key financial information for major subsidiaries - As of June 30, 2025, the Group had **821** subsidiaries (**52** directly controlled, **769** indirectly controlled), **22** joint ventures, **39** associates, and **36** investee companies[150](index=150&type=chunk) Principal Subsidiaries' Financial Information (As of June 30, 2025, under Chinese Accounting Standards) | No. | Company Name | Registered Capital (RMB) | Total Assets (RMB) | Net Assets (RMB) | Revenue (RMB) | Net Profit (RMB) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | 1 | Beijing Tianrun New Energy Investment Co., Ltd. | 5,550,000,000 | 72,726,183,331.83 | 18,216,477,573.24 | 3,126,549,994.39 | 599,562,835.45 | | 2 | Goldwind International Holdings (Hong Kong) Limited | USD635,200,000 | 24,610,547,334.13 | 6,186,084,733.45 | 8,611,722,617.52 | 983,071,373.59 | | 3 | Goldwind Investment Holdings Co., Ltd. | 1,000,000,000 | 4,705,899,188.85 | 3,689,994,303.23 | 45,701,120.53 | 240,996,062.73 | [IV. Operating Results and Analysis](index=66&type=section&id=IV.%20Operating%20Results%20and%20Analysis) This section provides a comprehensive analysis of the group's financial performance, including revenue, costs, gross profit, expenses, assets, liabilities, cash flows, and key financial ratios - For the six months ended June 30, 2025, the Group's revenue was **28,493.82 million RMB**, a **41.46% year-on-year increase**, and net profit attributable to shareholders of the listed company was **1,487.54 million RMB**, a **7.26% year-on-year increase**[153](index=153&type=chunk) Revenue by Business Segment (For the Six Months Ended June 30) | Business Segment | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (RMB thousands) | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Wind turbine manufacturing and sales | 21,852,284 | 12,767,677 | 9,084,607 | 71.15% | | Wind power services | 2,896,207 | 2,374,091 | 522,116 | 21.99% | | Wind farm development | 3,171,937 | 4,401,088 | (1,229,151) | -27.93% | | Others | 573,396 | 600,298 | (26,902) | -4.48% | | **Total** | **28,493,824** | **20,143,154** | **8,350,670** | **41.46%** | - The year-on-year increase in revenue was primarily due to increased wind turbine sales volume and increased revenue from wind farm construction services[155](index=155&type=chunk) Cost of Sales by Business Segment (For the Six Months Ended June 30) | Business Segment | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (RMB thousands) | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Wind turbine manufacturing and sales | 20,129,632 | 12,269,398 | 7,860,234 | 64.06% | | Wind power services | 2,245,075 | 1,785,942 | 459,133 | 25.71% | | Wind farm development | 1,349,074 | 1,916,923 | (567,849) | -29.62% | | Others | 419,002 | 477,150 | (58,148) | -12.19% | | **Total** | **24,142,783** | **16,449,413** | **7,693,370** | **46.77%** | - The year-on-year increase in cost of sales was primarily due to increased operating revenue[157](index=157&type=chunk) Gross Profit by Business Segment (For the Six Months Ended June 30) | Business Segment | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (RMB thousands) | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Wind turbine manufacturing and sales | 1,722,652 | 498,279 | 1,224,373 | 245.72% | | Wind power services | 651,132 | 588,149 | 62,983 | 10.71% | | Wind farm development | 1,822,863 | 2,484,165 | (661,302) | -26.62% | | Others | 154,394 | 123,148 | 31,246 | 25.37% | | **Total** | **4,351,041** | **3,693,741** | **657,300** | **17.79%** | Gross Profit Margin by Business Segment (For the Six Months Ended June 30) | Business Segment | 2025 Gross Profit Margin | 2024 Gross Profit Margin | Gross Profit Margin Change (percentage points) | | :--- | :--- | :--- | :--- | | Wind turbine manufacturing and sales | 7.88% | 3.90% | 3.98% | | Wind power services | 22.48% | 24.77% | -2.29% | | Wind farm development | 57.47% | 56.44% | 1.03% | | Others | 26.93% | 20.51% | 6.42% | - The Group's overall gross profit margin decreased from **18.34%** to **15.27%**, with gross profit margins for wind turbine manufacturing and sales, wind farm development, and other business segments increasing year-on-year, while wind power services' gross profit margin decreased year-on-year[159](index=159&type=chunk)[160](index=160&type=chunk) - Selling and distribution expenses were approximately **659.39 million RMB**, a **9.02% year-on-year increase**, mainly due to increased staff costs[163](index=163&type=chunk) - Administrative expenses were approximately **1,928.16 million RMB**, a **6.71% year-on-year increase**, mainly due to increased share-based payment expenses and staff costs[164](index=164&type=chunk) - Impairment losses on financial and contract assets, net, were **121.82 million RMB**, a **3.20% year-on-year decrease**, primarily due to reduced impairment losses on other receivables[165](index=165&type=chunk) - Other operating expenses were approximately **141.93 million RMB**, a **31.15% year-on-year increase**, mainly due to increased bank charges[166](index=166&type=chunk) - As of June 30, 2025, the Group's total assets were **161,553.27 million RMB**, with current assets accounting for **44.37%** of total assets[169](index=169&type=chunk) - The increase in current assets was primarily due to increases in inventories, trade and bills receivables, and pledged deposits[169](index=169&type=chunk) - The increase in non-current assets was primarily due to increases in prepayments, other receivables and other assets, property, plant and equipment, right-of-use assets, and contract assets[169](index=169&type=chunk) - Total liabilities were **118,066.80 million RMB**, with current liabilities at **73,585.15 million RMB** and non-current liabilities at **44,481.65 million RMB**[170](index=170&type=chunk) - The increase in current liabilities was primarily due to increases in other payables and accruals, and interest-bearing bank and other borrowings[170](index=170&type=chunk) - Net outflow liabilities were **1,898.09 million RMB**, and net assets were **43,486.48 million RMB**[170](index=170&type=chunk) - Net cash used in operating activities was **2,949.39 million RMB**, primarily impacted by increased inventories, increased trade receivables, and decreased trade payables[173](index=173&type=chunk) - Net cash used in investing activities was **1,836.80 million RMB**, primarily for the purchase of property, plant and equipment and financial assets[175](index=175&type=chunk) - Net cash from financing activities was **1,904.80 million RMB**, mainly from new bank and other borrowings, offset by repayment of bank loans and sale-and-leaseback payments[177](index=177&type=chunk) - Capital expenditure was **3,791.77 million RMB**, a **55.12% year-on-year increase**, with primary funding sources being bank borrowings and operating cash flow[179](index=179&type=chunk) - As of June 30, 2025, the Group's interest-bearing bank borrowings totaled **35,779.75 million RMB**, and other borrowings totaled **7,893.64 million RMB**[180](index=180&type=chunk) - The Group pledged assets with a total carrying value of **23,346.93 million RMB** to secure bank loans and other bank credit[182](index=182&type=chunk) - The debt-to-capital ratio increased from **65.71%** as of December 31, 2024, to **66.17%** as of June 30, 2025[183](index=183&type=chunk) - Over **69%** of the Group's revenue, expenses, financial assets, and financial liabilities are denominated in RMB, so changes in the RMB to foreign currency exchange rates do not significantly impact operating results[184](index=184&type=chunk) - Contingent liabilities increased from **24,837.26 million RMB** as of December 31, 2024, to **34,079.98 million RMB** as of June 30, 2025[185](index=185&type=chunk) - For the six months ended June 30, 2025, the Group had no significant investments, acquisitions, or disposals, nor any significant future plans for investments or capital assets[186](index=186&type=chunk)[187](index=187&type=chunk)[188](index=188&type=chunk) [V. Risks Faced by the Company and Countermeasures](index=73&type=section&id=V.%20Risks%20Faced%20by%20the%20Company%20and%20Countermeasures) This section identifies the key risks facing the company, including policy, market competition, and economic environment risks, along with the corresponding mitigation strategies - The company faces policy risks, as the development of the wind power industry is affected by national and industry policy adjustments[189](index=189&type=chunk) - Market competition risks are intensifying, with increasing competition among enterprises in product quality and efficiency improvement, securing advantageous resources, and expanding market share[190](index=190&type=chunk) - Economic environment and exchange rate fluctuation risks exist, as complex and volatile domestic and international economic environments may impact internationalization strategies, and overseas operations may incur losses due to exchange rate fluctuations[191](index=191&type=chunk) - The company will address risks through technological and product innovation, continuously launching high-quality, cost-effective, and superior-performing products and solutions, leveraging its full industry chain competitive advantages, and enhancing diversified profitability[191](index=191&type=chunk) [Other Disclosures](index=74&type=section&id=Other%20Disclosures) This section discloses the company's compliance with corporate governance codes, information on purchases, sales, or repurchases of listed securities, interim dividend policy, interim results review process, and post-balance sheet events - During the reporting period, the company complied with all applicable code provisions of Appendix C1 "Corporate Governance Code" of the Listing Rules, except for a brief period when the terms of office of members of the Board's special committees expired, which was fully rectified upon appointment of new members on July 8, 2025[192](index=192&type=chunk) - For the six months ended June 30, 2025, neither the Company nor any of its subsidiaries purchased, sold, or repurchased any of the Company's listed securities (including the sale of treasury shares)[193](index=193&type=chunk) - As of June 30, 2025, the Company held **2,828,173** A-share treasury shares, which will be used for the A-share restricted stock incentive plan[193](index=193&type=chunk) - The Company decided not to declare an interim dividend for the six months ended June 30, 2025 (nil for the same period in 2024)[194](index=194&type=chunk) - The Company's Audit Committee and its auditor, Deloitte Touche Tohmatsu, have reviewed the Group's unaudited interim results for the six months ended June 30, 2025[195](index=195&type=chunk) - As of the date of this announcement, no significant events have occurred since June 30, 2025, that would materially affect the Group's operations and financial performance[196](index=196&type=chunk) [Definitions](index=75&type=section&id=Definitions) This section provides definitions for key terms and abbreviations used in the report to ensure readers accurately understand the content

[Summary](index=1&type=section&id=Summary) [Interim Results and Dividends](index=1&type=section&id=Interim%20Results%20and%20Dividends) The Group reported an 8.0% increase in underlying profit attributable to shareholders to HKD 312 million, with interim dividend maintained at HKD 0.10 per share Interim Financial Highlights | Indicator | H1 2025 (HKD) | H1 2024 (HKD) | YoY Change | | :--- | :--- | :--- | :--- | | Underlying Profit Attributable to Shareholders | 312 million | 289 million | +8.0% | | Basic Interim Earnings Per Share | 0.239 | 0.246 | -2.8% | | Unaudited Profit Attributable to Shareholders | 125 million | 113 million | +10.6% | | Interim Dividend Per Share | 0.10 | 0.10 | Flat | [Market Overview and Business Review](index=2&type=section&id=Market%20Overview%20and%20Business%20Review) [Hong Kong Property Market](index=2&type=section&id=Hong%20Kong%20Property%20Market) Hong Kong residential property prices saw increased activity after stamp duty abolition and HIBOR decline, while commercial and retail property rents and prices generally decreased - Hong Kong residential property prices initially declined due to high interest rates and ample supply but saw active transactions after the government abolished stamp duties[7](index=7&type=chunk) - HIBOR significantly decreased from May, promoting residential sales and prices[7](index=7&type=chunk) - Commercial and retail property rents and prices generally fell due to high vacancy rates, weak demand, and changing consumption patterns[7](index=7&type=chunk) [Mainland China Property Market](index=2&type=section&id=Mainland%20China%20Property%20Market) Despite central government stabilization policies, the Mainland China property market's response has been limited, with property prices and demand showing restricted effects - Despite government stabilization policies, the Mainland China real estate market's response has not yet caught up in the past six months[7](index=7&type=chunk) [Property Development Sales](index=2&type=section&id=Property%20Development%20Sales) Hong Kong's High Park project sold 95% of units, recognizing HKD 1.4 billion in sales revenue, while Mainland China projects generated RMB 756 million in recognized sales revenue with limited profit contribution [Hong Kong Property Development Sales](index=2&type=section&id=Hong%20Kong%20Property%20Development%20Sales) Hong Kong's High Park project has sold over 1,480 residential units, representing 95% of the total, with HKD 1.4 billion in sales revenue recognized - The High Park project in Tseung Kwan O, Hong Kong, has sold over **1,480 residential units**, representing approximately **95% of the total**[8](index=8&type=chunk) Hong Kong Property Sales Revenue | Project | Sales Revenue (HKD) | | :--- | :--- | | High Park (Recognized during review period) | 1.4 billion | [Mainland China Property Development Sales](index=3&type=section&id=Mainland%20China%20Property%20Development%20Sales) Mainland China development projects generated RMB 671 million in total pre-sales/sales, with RMB 756 million in recognized sales revenue, contributing limited profit to the Group Mainland China Property Sales Performance | Indicator | Amount (RMB) | | :--- | :--- | | Total Pre-sales/Sales of Development Projects | 671 million | | Group's Attributable Pre-sales/Sales | 518 million | | Group's Attributable Sales Revenue (Recognized during review period) | 756 million | - Mainland China sales revenue contributed limited profit to the Group during the period[9](index=9&type=chunk) [Property Development](index=3&type=section&id=Property%20Development) The Group unified ownership of a Hong Kong site for redevelopment, holding 2.9 million sq.m. of land bank for development, with progress detailed for various projects in Hong Kong and Mainland China [Land Bank and New Projects](index=3&type=section&id=Land%20Bank%20and%20New%20Projects) The Group formed a joint venture to redevelop a Hong Kong site into a 4,600 sq.m. commercial/residential complex, with its total land bank for development reaching 2.9 million sq.m. - The Group established a joint venture and successfully unified the ownership of the Fuk Chak Street site in Hong Kong, planning to redevelop it into a high-rise commercial/residential complex[10](index=10&type=chunk) Key Development Metrics | Indicator | Value | | :--- | :--- | | Fuk Chak Street Project Total Gross Floor Area | Approx. 4,600 sq.m. | | Group's Attributable Total Gross Floor Area of Land Bank for Development | Approx. 2,900,000 sq.m. | [Progress of Major Property Projects](index=3&type=section&id=Progress%20of%20Major%20Property%20Projects) The report details the progress of major property projects in Hong Kong and Mainland China, covering various stages from superstructure works to design approvals and foundation preparations Major Property Project Progress | Property Project | Region/City | Usage | Approx. Gross Floor Area (sq.m.) | Group's Attributable Interest | Project Progress | Estimated Completion Date | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Mid-Levels Grandeur | Sai Ying Pun, Hong Kong | Residential & Commercial | 4,600 | 60% | Superstructure works in progress | H1 2026 | | Clear Water Bay Road | Ngau Chi Wan, Kowloon | Residential & Commercial | 201,000 | 100% | Superstructure works in progress | 2027 to 2029 | | Fuk Chak Street | Tai Kok Tsui, Kowloon | Residential & Commercial | 4,600 | 50% | Preparing for demolition | To be confirmed | | Riverfront City (Shenyang) | Hunnan New District, Shenyang | Residential & Commercial | 630,000 | 100% | Phase 5A planning modification in progress | To be confirmed | | Cui Di Wan (Shenyang) | Shenhe District, Shenyang | Residential & Commercial | 2,000,000 | 100% | Phase 4 design approval in progress | To be confirmed | | Riverfront South Garden (Huizhou) | Huicheng District, Huizhou | Residential & Commercial | 520,000 | 60% | Phase 3 design modification completed | To be confirmed | | Shanyu Lake (Foshan) | Nanhai District, Foshan | Residential & Commercial | 1,600,000 | 50% | Phase 5 construction completed | To be confirmed | | City Plaza (Tianjin) | Hedong District, Tianjin | Residential, Commercial & Office | 850,000 | 49% | Phase 3B superstructure works in progress | End 2026 | | Yangpu (Shanghai) | Yangpu District, Shanghai | Residential, Commercial & Office | 75,000 | 40% | Preliminary construction permit obtained; foundation construction preparation in progress | End 2029 | | Polytec Grand Mansion (Shanxi) | Jiexiu City | Residential & Commercial | 463,000 | 100% | Phase 2 planning in progress | To be confirmed | | Hengda Plaza (Zhuhai) | Xiangzhou District, Zhuhai | Commercial, Office & Apartment | 199,000 | 70% | Phase 1 superstructure works in progress | End 2025 | [Property Investment](index=4&type=section&id=Property%20Investment) The Group's total rental income from Hong Kong investment properties decreased by 10.8% to HKD 132 million in the first half of 2025 Hong Kong Investment Property Rental Income | Indicator | H1 2025 (HKD) | H1 2024 (HKD) | YoY Change | | :--- | :--- | :--- | :--- | | Total Rental Income from Hong Kong Investment Properties | 132 million | 148 million | -10.8% | [Outlook](index=5&type=section&id=Outlook) [Market Outlook](index=5&type=section&id=Market%20Outlook) Residential transaction volume and prices are expected to stabilize or rise in the second half, while commercial and retail properties will likely remain in an adjustment phase - If HIBOR remains low and Hong Kong's economy grows healthily in the second half, residential transaction volume is expected to improve, with prices stabilizing or rising[14](index=14&type=chunk) - Commercial buildings and retail shops are expected to remain in an adjustment phase in the second half due to market supply-demand imbalance[14](index=14&type=chunk) [Hong Kong Project Outlook](index=5&type=section&id=Hong%20Kong%20Project%20Outlook) High Park sales are expected to complete, Mid-Levels Grandeur will launch, Clear Water Bay Road's first phase targets 2027 completion, and Fuk Chak Street construction is planned for 2026 - Hong Kong's High Park project in Tseung Kwan O is expected to largely complete residential unit sales in the second half[15](index=15&type=chunk) - The Mid-Levels Grandeur project in Sai Ying Pun will be launched for sale in the second half, with good sales response anticipated[15](index=15&type=chunk) - Superstructure works for the Clear Water Bay Road development in Ngau Chi Wan are progressing, with the first phase targeted for completion by the first half of 2027 or earlier[15](index=15&type=chunk) - The Fuk Chak Street joint venture project site in Tai Kok Tsui is preparing for demolition, with construction planned to commence in 2026[15](index=15&type=chunk) [Mainland China Project Outlook](index=5&type=section&id=Mainland%20China%20Project%20Outlook) Mainland China projects show varied progress, with Huizhou and Shenyang in design/approval, Shanxi Phase 1 sales strong, Zhuhai and Tianjin targeting 2025/2026 completion, and Shanghai preparing for foundation work - Huizhou Riverfront South Garden Phase 3 residential project has completed design modifications and will commence construction after approval[15](index=15&type=chunk) - Shanxi Polytec Grand Mansion Phase 1 sales are strong, with approximately **75% of units sold**, and sales are expected to largely complete within the year[16](index=16&type=chunk) - Zhuhai Hengda Plaza Phase 1 is expected to be completed and occupied by end-2025[17](index=17&type=chunk) - Tianjin City Plaza Phase 3B superstructure works are ongoing, with completion expected by end-2026[17](index=17&type=chunk) - The Shanghai Yangpu project has obtained preliminary construction permits, with foundation work preparation underway[17](index=17&type=chunk) [Financial Strategy and Dividend Policy](index=6&type=section&id=Financial%20Strategy%20and%20Dividend%20Policy) The Group anticipates High Park sales and rental income to drive second-half results and will adopt a conservative dividend policy due to industry challenges and significant project funding needs - The Group expects sales and rental income from Hong Kong's High Park project to be the main contributors to performance and revenue in the second half of 2025[18](index=18&type=chunk) - Given the challenging operating environment in the property sector and the substantial funding requirements for the large-scale Clear Water Bay Road development project, the Group deems it necessary to adopt a conservative dividend policy[18](index=18&type=chunk) [Financial Statements](index=7&type=section&id=Financial%20Statements) [Consolidated Statement of Profit or Loss](index=7&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss) Operating revenue increased to HKD 2.429 billion, with operating profit at HKD 240 million and profit attributable to equity holders at HKD 125 million, resulting in HKD 0.10 basic and diluted earnings per share Consolidated Statement of Profit or Loss Highlights | Indicator | H1 2025 (HKD thousand) | H1 2024 (HKD thousand) | YoY Change | | :--- | :--- | :--- | :--- | | Operating Revenue | 2,428,801 | 1,940,947 | +25.1% | | Cost of Sales | (1,275,466) | (916,223) | +39.2% | | Fair Value Changes of Investment Properties | (186,798) | (189,846) | -1.6% | | Fair Value Changes of Property Development Interests | (293) | 14,050 | -102.1% | | Operating Profit | 239,920 | 269,188 | -10.9% | | Finance Costs | (73,965) | (85,140) | -13.1% | | Profit Before Tax | 195,801 | 199,345 | -1.8% | | Profit for the Period | 115,121 | 113,104 | +1.8% | | Profit Attributable to Equity Holders of the Company | 124,556 | 113,453 | +9.8% | | Earnings Per Share – Basic and Diluted | HKD 0.10 | HKD 0.10 | Flat | [Consolidated Statement of Financial Position](index=9&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, total assets less current liabilities were HKD 36.89 billion, net assets were HKD 17.625 billion, with notable decreases in joint venture interests, inventories, and various current liabilities Consolidated Statement of Financial Position Highlights | Indicator | As of June 30, 2025 (HKD thousand) | As of Dec 31, 2024 (HKD thousand) | Change | | :--- | :--- | :--- | :--- | | Investment Properties | 13,295,290 | 13,416,380 | -0.9% | | Property Development Interests (Non-current) | 1,232,238 | 1,239,499 | -0.6% | | Interests in Joint Ventures | 1,588,019 | 1,898,578 | -16.4% | | Interests in Associates | 2,320,253 | 2,245,931 | +3.3% | | Inventories | 20,508,918 | 21,278,307 | -3.6% | | Cash and Bank Balances | 956,812 | 791,467 | +20.9% | | Trade and Other Payables (Current) | 2,663,313 | 3,231,671 | -17.5% | | Amounts Due to Joint Ventures (Current) | 0 | 557,725 | -100% | | Bank Loans (Current) | 1,709,454 | 2,374,807 | -28.0% | | Total Assets Less Current Liabilities | 36,890,009 | 36,200,159 | +1.9% | | Net Assets | 17,625,085 | 17,567,526 | +0.3% | [Notes](index=11&type=section&id=Notes) [Basis of Preparation](index=11&type=section&id=Basis%20of%20Preparation) This interim financial report is prepared under HKEX Listing Rules and HKAS 34, with accounting policies consistent with 2024 annual statements, except for Note 2 changes - The interim financial report is prepared in accordance with Hong Kong Listing Rules and HongAS 34[23](index=23&type=chunk) - Accounting policies are consistent with the 2024 annual financial statements, except for changes detailed in Note 2[23](index=23&type=chunk) [Changes in Accounting Policies](index=12&type=section&id=Changes%20in%20Accounting%20Policies) The Group applied HKAS 21 amendments with no significant impact, and no new standards or interpretations not yet effective were adopted in this period - Amendments to Hong Kong Accounting Standard 21 have been applied but have no significant impact on this interim report[24](index=24&type=chunk) - No new standards or interpretations not yet effective have been adopted in the current accounting period[25](index=25&type=chunk) [Segment Reporting](index=12&type=section&id=Segment%20Reporting) The Group manages its business across three reportable segments: property development (Hong Kong/Mainland China), property investment, and other businesses, with operating revenue from various property-related activities [Segment Results and Assets](index=13&type=section&id=Segment%20Results%20and%20Assets) In H1 2025, Hong Kong property development generated HKD 1.419 billion revenue and HKD 364.5 million profit, Mainland China property development generated HKD 600.2 million revenue and HKD 46.5 million profit, and total segment assets were HKD 40.475 billion Segment Performance and Assets (H1 2025) | Segment | H1 2025 Operating Revenue (HKD thousand) | H1 2025 Reportable Segment Profit/(Loss) (HKD thousand) | As of June 30, 2025, Reportable Segment Assets (HKD thousand) | | :--- | :--- | :--- | :--- | | Property Development (Total) | 2,428,801 | 498,697 | 40,475,189 | | - Hong Kong | 1,419,027 | 364,467 | 15,383,133 | | - Mainland China | 600,249 | 46,460 | 11,199,793 | | Property Investment | 132,151 | 102,532 | 13,312,565 | | Other Businesses | 277,374 | (14,762) | 579,698 | [Profit Before Tax](index=15&type=section&id=Profit%20Before%20Tax) Finance costs decreased by 13.1% to HKD 74.0 million in H1 2025 due to lower loan interest and higher capitalized costs, while interest income significantly declined [Finance Costs](index=15&type=section&id=Finance%20Costs) Net finance costs decreased by 13.1% to HKD 74.0 million, after capitalizing HKD 348.9 million in borrowing costs at an annual interest rate of 1.89%–6.98% Finance Costs Breakdown | Indicator | H1 2025 (HKD thousand) | H1 2024 (HKD thousand) | YoY Change | | :--- | :--- | :--- | :--- | | Interest on Bank Loans | 377,164 | 543,149 | -30.6% | | Interest on Related Company Loans | 45,692 | 73,904 | -38.2% | | Less: Amount Capitalized | (348,891) | (531,913) | -34.4% | | Total Finance Costs | 73,965 | 85,140 | -13.1% | - Borrowing costs capitalized were calculated at an annual interest rate of **1.89%–6.98%**[34](index=34&type=chunk) [Other Items](index=16&type=section&id=Other%20Items) Depreciation and amortization were HKD 6.2 million, while interest income significantly decreased to HKD 12.1 million in the first half of 2025 Other Income and Expenses | Indicator | H1 2025 (HKD thousand) | H1 2024 (HKD thousand) | YoY Change | | :--- | :--- | :--- | :--- | | Depreciation and Amortization | 6,184 | 10,155 | -39.1% | | Interest Income | (12,095) | (36,425) | -66.8% | [Income Tax](index=16&type=section&id=Income%20Tax) Total income tax decreased by 6.4% to HKD 80.7 million, with Hong Kong profits tax at HKD 75.8 million, new withholding tax of HKD 13.8 million, and a significant reduction in land appreciation tax Income Tax Breakdown | Indicator | H1 2025 (HKD thousand) | H1 2024 (HKD thousand) | YoY Change | | :--- | :--- | :--- | :--- | | Total Tax for the Period | 80,680 | 86,241 | -6.4% | | Profits Tax Provision – Hong Kong | 75,780 | 77,775 | -2.6% | | Profits Tax Provision – Outside Hong Kong | 9,188 | 397 | +2213.4% | | Withholding Tax | 13,830 | 0 | N/A | | Land Appreciation Tax | 20 | 818 | -97.6% | | Deferred Tax | (18,138) | 7,251 | -350.1% | - Hong Kong profits tax is calculated at a rate of **16.5%**[36](index=36&type=chunk) - Mainland China land appreciation tax is levied at progressive rates ranging from **30% to 60%**[37](index=37&type=chunk) [Earnings Per Share](index=17&type=section&id=Earnings%20Per%20Share) Basic earnings per share remained at HKD 0.10, with profit attributable to equity holders at HKD 124.6 million and no dilutive potential ordinary shares during the period Earnings Per Share Details | Indicator | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Basic Earnings Per Share | HKD 0.10 | HKD 0.10 | | Profit Attributable to Equity Holders of the Company | HKD 124,556,000 | HKD 113,453,000 | | Weighted Average Number of Ordinary Shares in Issue | 1,306,206,058 shares | 1,176,631,296 shares | - There were no dilutive potential ordinary shares during the period[39](index=39&type=chunk) [Dividends](index=17&type=section&id=Dividends) The Board declared an interim dividend of HKD 0.10 per share for 2025, consistent with the prior year, payable on January 7, 2026 Interim Dividend Declaration | Indicator | H1 2025 (HKD thousand) | H1 2024 (HKD thousand) | | :--- | :--- | :--- | | Interim Dividend of HKD 0.10 Per Share Declared After Period End | 130,621 | 130,621 | - The interim dividend will be paid on **January 7, 2026**[6](index=6&type=chunk) [Property Development Interests](index=17&type=section&id=Property%20Development%20Interests) Property development interests, accounted for at fair value, represent joint investments in Mainland China, with HKD 458.1 million expected to be recovered within one year - Property development interests represent joint investments by the Group and Polytec Holdings in Huizhou and Zhuhai, Mainland China[41](index=41&type=chunk) - These interests are accounted for at fair value, with **HKD 458.1 million** expected to be recovered within one year and classified as current assets[41](index=41&type=chunk) [Trade and Other Receivables / Loans](index=18&type=section&id=Trade%20and%20Other%20Receivables%20%2F%20Loans) Total trade receivables and loans decreased to HKD 384 million, with HKD 351 million current, as the Group maintains specific credit policies to mitigate risk Trade and Other Receivables / Loans | Indicator | As of June 30, 2025 (HKD thousand) | As of Dec 31, 2024 (HKD thousand) | Change | | :--- | :--- | :--- | :--- | | Trade Receivables and Loans | 384,015 | 425,517 | -9.7% | | - Current | 351,261 | 368,761 | -4.8% | | Other Receivables and Prepayments | 393,702 | 377,139 | +4.4% | | Total | 876,175 | 906,680 | -3.4% | - The Group maintains specific credit policies and close monitoring to mitigate credit risk[42](index=42&type=chunk) [Trade and Other Payables](index=19&type=section&id=Trade%20and%20Other%20Payables) Total trade and other payables decreased to HKD 2.663 billion, with trade payables at HKD 1.795 billion and contract liabilities significantly reduced to HKD 259.8 million Trade and Other Payables Breakdown | Indicator | As of June 30, 2025 (HKD thousand) | As of Dec 31, 2024 (HKD thousand) | Change | | :--- | :--- | :--- | :--- | | Trade Payables | 1,794,679 | 2,006,327 | -10.5% | | Contract Liabilities – Deposits Received for Property Sales | 259,804 | 524,646 | -50.5% | | Total | 2,663,313 | 3,231,671 | -17.5% | [Financial Review](index=19&type=section&id=Financial%20Review) [Financial Resources and Bank Borrowings](index=19&type=section&id=Financial%20Resources%20and%20Bank%20Borrowings) Total bank loans decreased to HKD 18.74 billion, with net bank borrowings at HKD 17.783 billion and a gearing ratio of 100.9%, supported by cash inflows from property sales Financial Resources and Bank Borrowings Highlights | Indicator | As of June 30, 2025 (HKD) | As of Dec 31, 2024 (HKD) | Change | | :--- | :--- | :--- | :--- | | Total Bank Loans | 18.74 billion | 19.125 billion | -2.0% | | Net Bank Borrowings | 17.783 billion | N/A | N/A | | Gearing Ratio | 100.9% | 104.4% | -3.5% | | Cash Inflow from Hong Kong Property Project Sales | 1.367 billion | N/A | N/A | | Cash Inflow from Mainland China Development Project Pre-sales/Sales | 368 million | N/A | N/A | - The Group prioritizes reducing its gearing ratio as a key financial strategy, achieved through disposing of non-core assets and launching projects for sale[46](index=46&type=chunk) - The Group cautiously advanced project development, investing approximately **HKD 657 million** in construction costs during the period[47](index=47&type=chunk) - All Group borrowings are arranged at floating interest rates, with RMB income and borrowings naturally hedging RMB exchange rate risk[47](index=47&type=chunk) [Capital Commitments](index=20&type=section&id=Capital%20Commitments) The Group's capital commitments totaled HKD 94 million as of June 30, 2025, primarily allocated to investment properties Capital Commitments | Indicator | As of June 30, 2025 (HKD) | | :--- | :--- | | Capital Commitments | 94 million | - Capital commitments are primarily for investment properties[48](index=48&type=chunk) [Pledged Assets](index=20&type=section&id=Pledged%20Assets) As of June 30, 2025, the Group pledged HKD 26.421 billion in properties and HKD 13 million in deposits as security for banking facilities and performance guarantees Pledged Assets | Indicator | As of June 30, 2025 (HKD) | | :--- | :--- | | Pledged Properties | 26.421 billion | | Pledged Deposits | 13 million | - Pledged assets primarily serve as security for banking facilities and performance guarantees[49](index=49&type=chunk) [Contingent Liabilities](index=20&type=section&id=Contingent%20Liabilities) As of June 30, 2025, the Group provided HKD 38 million in guarantees to financial institutions for subsidiary performance guarantees Contingent Liabilities | Indicator | As of June 30, 2025 (HKD) | | :--- | :--- | | Guarantees for Subsidiary Performance | 38 million | [Other Information](index=20&type=section&id=Other%20Information) [Review of Interim Financial Report](index=20&type=section&id=Review%20of%20Interim%20Financial%20Report) The Audit Committee reviewed the unaudited interim financial report, which was also reviewed by independent auditor KPMG in accordance with HK SRE 2410 - The Audit Committee has reviewed the interim financial report[51](index=51&type=chunk) - Independent auditor KPMG has reviewed the interim financial report in accordance with Hong Kong Standard on Review Engagements 2410[51](index=51&type=chunk) [Compliance with Corporate Governance Code](index=21&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) The Company complied with all Listing Rules Appendix C1 Part 2 code provisions, except for C.2.1 (chairman and CEO roles combined) and F.2.2 (Nomination Committee chairman's AGM absence) - The Company has complied with all code provisions in Part 2 of Appendix C1 to the Listing Rules, with two exceptions[53](index=53&type=chunk) - Code provision C.2.1: The roles of Chairman and Chief Executive Officer are held by Mr. Ko Wai Cheung[53](index=53&type=chunk) - Code provision F.2.2: Mr. Ko Wai Cheung, Chairman of the Nomination Committee, was unable to attend the 2025 Annual General Meeting due to medical arrangements[54](index=54&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=21&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) Neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the six months ended June 30, 2025 - Neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the period[55](index=55&type=chunk) [Closure of Register of Members](index=21&type=section&id=Closure%20of%20Register%20of%20Members) The Company will suspend share transfer registration from December 15-16, 2025, requiring shareholders to register by December 12, 2025, to qualify for the interim dividend - The register of members will be closed from **December 15 to December 16, 2025**[56](index=56&type=chunk) - Shareholders must register their transfers by **4:30 p.m. on December 12, 2025**, to qualify for the interim dividend[56](index=56&type=chunk) [Publication of Interim Report](index=22&type=section&id=Publication%20of%20Interim%20Report) The 2025 interim report, with all Listing Rules information, will be published online by end-September 2025, and printed copies will be sent upon request - The 2025 interim report will be published on the HKEXnews website and the Company's website by the end of **September 2025**[57](index=57&type=chunk) - Printed copies will be sent to shareholders upon request[57](index=57&type=chunk)

[Company Information and Financial Summary](index=1&type=section&id=Company%20Information%20and%20Financial%20Summary) This section provides an overview of the company's basic information, financial performance, and interim dividend policy for the first half of 2025 [Company Basic Information](index=1&type=section&id=Company%20Basic%20Information) This report presents the unaudited interim results announcement of Suzhou BaTeLab Co., Ltd. for the six months ended June 30, 2025 - Company name: **Suzhou BaTeLab Co., Ltd.** (Stock Code: **2149**)[2](index=2&type=chunk) - Reporting period: Six months ended **June 30, 2025**[2](index=2&type=chunk) [Financial Summary](index=1&type=section&id=Financial%20Summary) The company achieved moderate revenue and profit growth with a slight increase in gross margin in the first half of 2025, demonstrating stable operating performance 2025 First Half Financial Summary | Indicator | 2025 (RMB '000) | 2024 (RMB '000) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 291,701 | 290,554 | 0.4 | | Gross Profit | 150,970 | 148,959 | 1.4 | | Profit Before Tax | 77,148 | 67,116 | 14.9 | | Profit for the Period | 77,148 | 67,116 | 14.9 | - Gross margin increased from **51.3%** in the first half of 2024 to **51.8%** in the first half of 2025[4](index=4&type=chunk) [Interim Dividend](index=2&type=section&id=Interim%20Dividend) The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025 - The Board does not recommend the payment of an interim dividend for the six months ended **June 30, 2025**[6](index=6&type=chunk) [Unaudited Interim Financial Statements](index=3&type=section&id=Unaudited%20Interim%20Financial%20Statements) This section presents the company's detailed unaudited financial statements, including the statement of profit or loss, financial position, and explanatory notes [Statement of Profit or Loss and Other Comprehensive Income](index=3&type=section&id=Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) The company achieved growth in revenue and profit during the reporting period, with significant increases in operating profit and profit before tax, leading to a corresponding rise in earnings per share Summary of Statement of Profit or Loss and Other Comprehensive Income | Indicator | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | Revenue | 291,701 | 290,554 | | Gross Profit | 150,970 | 148,959 | | Operating Profit | 82,294 | 70,496 | | Profit Before Tax | 77,148 | 67,116 | | Profit and Total Comprehensive Income for the Period | 77,148 | 67,116 | | Basic Earnings Per Share (RMB) | 1.274 | 1.119 | | Diluted Earnings Per Share (RMB) | 1.266 | 1.119 | - Operating profit increased by **16.7%** year-on-year to **RMB 82,294 thousand**[8](index=8&type=chunk) - Finance costs increased from **RMB 3,380 thousand** in the first half of 2024 to **RMB 5,146 thousand** in the first half of 2025[8](index=8&type=chunk) [Statement of Financial Position](index=4&type=section&id=Statement%20of%20Financial%20Position) As of June 30, 2025, the company's total assets and net assets both increased, with a significant rise in net current assets, maintaining a healthy capital structure Summary of Statement of Financial Position | Indicator | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | | :--- | :--- | :--- | | Non-Current Assets | 128,532 | 157,839 | | Current Assets | 1,686,592 | 1,450,973 | | Current Liabilities | 623,632 | 601,826 | | Net Current Assets | 1,062,960 | 849,147 | | Net Assets | 1,190,049 | 1,005,004 | | Share Capital | 63,000 | 60,000 | | Reserves | 1,127,049 | 945,004 | | Total Equity | 1,190,049 | 1,005,004 | - Net current assets increased from **RMB 849,147 thousand** as of December 31, 2024, to **RMB 1,062,960 thousand** as of June 30, 2025[9](index=9&type=chunk) - Share capital increased by **RMB 3,000 thousand** due to the placement of shares[10](index=10&type=chunk)[42](index=42&type=chunk) [Notes to the Interim Financial Statements](index=6&type=section&id=Notes%20to%20the%20Interim%20Financial%20Statements) This section details the basis of preparation, significant accounting policies, and the composition and changes of various financial statement items, providing context for understanding the financial data [1 General Information](index=6&type=section&id=1%20General%20Information) This section provides an overview of the company's establishment, listing, and principal business activities - The company was incorporated on **November 12, 2010**, in Suzhou, Jiangsu Province, China, restructured into a joint stock company in **November 2021**, and listed on the Main Board of the Hong Kong Stock Exchange on **December 28, 2023**[11](index=11&type=chunk) - The company primarily engages in the research, development, and sales of high-performance analog integrated circuit design products[12](index=12&type=chunk) [2 Basis of Preparation and 3 Significant Accounting Policies](index=6&type=section&id=2%20Basis%20of%20Preparation%20and%203%20Significant%20Accounting%20Policies) This section outlines the accounting standards and principles used for preparing the interim financial statements, including new accounting standard amendments - The interim 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 Listing Rules of the Stock Exchange[15](index=15&type=chunk) - Amendments to Hong Kong Financial Reporting Standards issued by the Hong Kong Institute of Certified Public Accountants were first applied in this period, with no significant impact on financial performance and position[17](index=17&type=chunk)[18](index=18&type=chunk) [4 Revenue and Segment Reporting](index=7&type=section&id=4%20Revenue%20and%20Segment%20Reporting) This section details the company's revenue breakdown by product category and confirms its single operating segment Revenue from Contracts with Customers by Product Category | Product Category | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | Sales of Analog IC Patterned Wafers | 291,701 | 290,554 | - The company has only one operating segment, the sale of analog IC patterned wafers, with all revenue derived from **Mainland China**[22](index=22&type=chunk)[23](index=23&type=chunk) [5 Other Income, Gains and Losses](index=8&type=section&id=5%20Other%20Income%2C%20Gains%20and%20Losses) This section provides a breakdown of other income, gains, and losses, highlighting the components such as interest income and government grants Details of Other Income, Gains and Losses | Item | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | Interest Income | 6,456 | 8,045 | | Government Grants | 5,817 | 6,338 | | Rental Income | 373 | 387 | | Net Exchange (Loss)/Gain | (5,812) | 2,312 | | Total | 6,834 | 17,082 | - Government grants are primarily for encouraging the IC industry and high-tech R&D projects, listing incentives, and additional input VAT deductions[25](index=25&type=chunk) [6 Profit Before Tax](index=8&type=section&id=6%20Profit%20Before%20Tax) This section details the components deducted in calculating profit before tax, including finance costs, staff costs, and R&D expenses Deductions from Profit Before Tax | Item | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | Total Finance Costs | 5,146 | 3,380 | | Total Staff Costs | 20,389 | 21,831 | | Cost of Inventories | 181,825 | 197,327 | | Total Depreciation | 4,596 | 3,849 | | Impairment Loss on Trade and Other Receivables | 1,084 | 3,517 | | Research and Development Expenses | 56,364 | 70,812 | | Amortisation of Intangible Assets | 44 | 26 | - Defined contribution retirement scheme contributions within staff costs significantly increased from **RMB 585 thousand** to **RMB 3,186 thousand**[26](index=26&type=chunk) - Research and development expenses include staff costs of **RMB 10,048 thousand** and depreciation of **RMB 1,271 thousand**[27](index=27&type=chunk) [7 Income Tax](index=9&type=section&id=7%20Income%20Tax) This section explains the company's income tax rates and the tax incentives it enjoys, including exemptions and R&D expense deductions - The company's corporate income tax rate is **25%**, but it enjoys tax exemption benefits under relevant policies[28](index=28&type=chunk) - The company entered its first assessable year in **2023**, enjoying tax exemption from **2024 to 2027**, and will subsequently be taxed at a preferential rate of **10%**[29](index=29&type=chunk) - The company is entitled to a **100%** super deduction for eligible research and development expenses[29](index=29&type=chunk) [8 Earnings Per Share](index=10&type=section&id=8%20Earnings%20Per%20Share) This section presents the basic and diluted earnings per share, explaining the factors contributing to their changes Earnings Per Share Data | Indicator | 2025 (RMB) | 2024 (RMB) | | :--- | :--- | :--- | | Basic Earnings Per Share | 1.274 | 1.119 | | Diluted Earnings Per Share | 1.266 | 1.119 | - Both basic and diluted earnings per share increased, primarily due to higher profit for the period[30](index=30&type=chunk)[31](index=31&type=chunk) - Diluted earnings have been adjusted for the potential ordinary share impact under the company's employee restricted share unit scheme[31](index=31&type=chunk) [9 Right-of-Use Assets](index=10&type=section&id=9%20Right-of-Use%20Assets) This section reports the changes in right-of-use assets, specifically noting a deduction due to lease agreement modifications - For the six months ended June 30, 2025, the company recognized a deduction of **RMB 1,067 thousand** in right-of-use assets due to modifications in lease agreements[32](index=32&type=chunk) [10 Financial Assets at Fair Value Through Other Comprehensive Income](index=10&type=section&id=10%20Financial%20Assets%20at%20Fair%20Value%20Through%20Other%20Comprehensive%20Income) This section describes the company's strategic investment in a limited partnership, which is measured at fair value through other comprehensive income - The company holds a **29.4%** limited partnership interest in a limited partnership, a strategic investment with a fair value maintained at **RMB 30,000 thousand**[33](index=33&type=chunk)[34](index=34&type=chunk) - No dividends were received from this investment during the reporting period[34](index=34&type=chunk) [11 Other Non-Current Assets](index=10&type=section&id=11%20Other%20Non-Current%20Assets) This section details the composition and changes in other non-current assets, including prepayments for property, plant, and equipment, and investment deposits Details of Other Non-Current Assets | Item | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | | :--- | :--- | :--- | | Prepayments for Construction and Property, Plant and Equipment | 35,193 | 36,548 | | Investment Deposits | – | 24,525 | | Total | 35,193 | 61,073 | - Investment deposits (for semiconductor manufacturing projects) were reduced to **zero** as of June 30, 2025[35](index=35&type=chunk) [12 Trade and Other Receivables](index=11&type=section&id=12%20Trade%20and%20Other%20Receivables) This section provides a breakdown and aging analysis of trade and other receivables, noting an increase primarily due to extended credit terms for customers Details of Trade and Other Receivables | Item | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | | :--- | :--- | :--- | | Trade Receivables and Bills Receivable | 71,140 | 50,541 | | Other Receivables and Deposits | 958 | 962 | | Total | 72,098 | 51,503 | Aging Analysis of Trade Receivables and Bills Receivable | Aging | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | | :--- | :--- | :--- | | Within 1 month | 49,667 | 20,482 | | 1 to 2 months | 5,964 | 20,132 | | 2 to 3 months | 3,602 | 9,415 | | Over 3 months | 11,907 | 512 | - Trade receivables and bills receivable significantly increased, primarily due to appropriately extended credit terms for customers with good credit standing[36](index=36&type=chunk) [13 Prepayments](index=11&type=section&id=13%20Prepayments) This section details the increase in prepayments, primarily driven by increased raw material purchases to support business expansion Details of Prepayments | Item | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | | :--- | :--- | :--- | | Prepayments to Suppliers | 535,907 | 396,053 | | Others | 396 | 238 | | Total | 536,303 | 396,291 | - Prepayments significantly increased, primarily for purchasing raw materials to meet the demands of expanding business operations[37](index=37&type=chunk) [14 Pledged Bank Deposits](index=12&type=section&id=14%20Pledged%20Bank%20Deposits) This section reports the amount of bank deposits pledged as security for bank acceptance bills Pledged Bank Deposits | Item | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | | :--- | :--- | :--- | | Pledged Bank Deposits | 60,166 | 51,757 | - Bank deposits are pledged as security for the issuance of bank acceptance bills and will be released upon settlement[39](index=39&type=chunk) [15 Trade and Other Payables](index=12&type=section&id=15%20Trade%20and%20Other%20Payables) This section details the composition and aging analysis of trade and other payables, noting a decrease primarily due to reduced contract liabilities Details of Trade and Other Payables | Item | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | | :--- | :--- | :--- | | Trade Payables and Bills Payable | 247,547 | 216,563 | | Contract Liabilities | 1,281 | 40,138 | | Other Payables and Accruals | 10,863 | 20,966 | | Total | 259,691 | 277,667 | Aging Analysis of Trade Payables and Bills Payable | Aging | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | | :--- | :--- | :--- | | Within 3 months | 195,133 | 110,802 | | 3 to 6 months | 52,414 | 105,761 | | Total | 247,547 | 216,563 | - Total trade and other payables decreased, primarily due to a reduction in contract liabilities for output VAT to be transferred as of December 31, 2024[40](index=40&type=chunk)[91](index=91&type=chunk) [16 Capital, Reserves and Dividends](index=13&type=section&id=16%20Capital%2C%20Reserves%20and%20Dividends) This section outlines the changes in share capital and share premium due to share placement and confirms no dividends were paid or declared Changes in Share Capital | Item | Number of Ordinary Shares (thousand shares) | Share Capital (RMB '000) | Share Premium (RMB '000) | Total (RMB '000) | | :--- | :--- | :--- | :--- | :--- | | January 1, 2024 / June 30, 2024 / December 31, 2024 | 60,000 | 60,000 | 530,648 | 590,648 | | Placement of Shares | 3,000 | 3,000 | 104,072 | 107,072 | | June 30, 2025 | 63,000 | 63,000 | 634,720 | 697,720 | - The company placed **3,000,000 H shares** on May 28, 2025, with net proceeds totaling **RMB 107,072 thousand**[42](index=42&type=chunk) - The company did not pay or declare any dividends during the reporting period[44](index=44&type=chunk) [Management Discussion and Analysis](index=14&type=section&id=Management%20Discussion%20and%20Analysis) This section provides a comprehensive review of the company's business performance, financial results, risk factors, and future outlook [Business Review and Outlook](index=14&type=section&id=Business%20Review%20and%20Outlook) In the first half of 2025, the company continued to focus on the high-end industrial analog IC market, strengthening its competitive advantages through technological innovation and business expansion, while also outlining future market opportunities and challenges [Market Overview](index=14&type=section&id=Market%20Overview) This section provides an overview of the global analog IC industry's recovery, demand drivers, and the impact of external trade environment on the Chinese market - The global analog IC industry continued its recovery trend in the first half of **2025**, with leading companies experiencing revenue rebound[45](index=45&type=chunk) - The electrification and intelligent development of global manufacturing, along with emerging applications, continue to drive demand for high-performance analog chips[45](index=45&type=chunk) - Fluctuations in the external trade environment increase risks for China's analog chip industry but are expected to accelerate the import substitution process[45](index=45&type=chunk) [Business Overview](index=14&type=section&id=Business%20Overview) This section highlights the company's focus on high-end industrial analog ICs, its strategic optimizations, and key financial achievements during the reporting period - The company continues to focus on the high-end industrial analog IC patterned wafer market, maintaining its performance advantage through core product, business, and technological competitiveness[46](index=46&type=chunk) - During the reporting period, the company optimized its machine learning-based semi-automated chip design methods and actively launched new industrial products, solidifying its differentiated competitive advantage[46](index=46&type=chunk) - Revenue for the reporting period reached approximately **RMB 291.7 million**, a year-on-year increase of **0.4%**, with a gross margin of approximately **51.8%**[46](index=46&type=chunk) [Principal Businesses and Products](index=15&type=section&id=Principal%20Businesses%20and%20Products) This section describes the company's position as a leading industrial analog IC provider, its product portfolio, and its extensive intellectual property and application range - The company is one of China's leading industrial analog IC patterned wafer providers, with products based on self-developed EDA and IP libraries[47](index=47&type=chunk) - The company possesses a product matrix centered on power management and signal chain, extending to a full range of industrial analog chips, with over **850** product models sold[47](index=47&type=chunk) - As of June 30, 2025, the company holds **123** accumulated invention patents, has developed over **600** IP modules, and expanded its diversified end-application scope to include industrial, automotive, and communication sectors[48](index=48&type=chunk) [Future Outlook](index=15&type=section&id=Future%20Outlook) This section outlines the company's expectations for continued domestic demand in key sectors and its strategy to enhance competitiveness and supply chain resilience - Domestic demand in new energy vehicles, data centers, and green energy management is expected to deepen, but external competition and changes in the trade environment will pose challenges[49](index=49&type=chunk) - The company will be market-oriented, enhancing product coverage and competitiveness, and strengthening its full industry chain layout capabilities to address supply chain challenges[49](index=49&type=chunk) [Financial Review](index=16&type=section&id=Financial%20Review) This section provides a detailed analysis of the company's financial performance during the reporting period, including revenue composition, cost control, profit changes, and various expenses, revealing the impact of improved operational efficiency and market strategy adjustments on financial results [Revenue](index=16&type=section&id=Revenue) This section analyzes the company's revenue growth, breakdown by product line and sales channel, and the strategic shift towards direct sales Revenue by Business Line | Business Line | 2025 (RMB '000) | Share (%) | 2024 (RMB '000) | Share (%) | | :--- | :--- | :--- | :--- | :--- | | Sales of Power Management Products | 263,108 | 90.2 | 256,504 | 88.3 | | Sales of Signal Chain Products | 28,593 | 9.8 | 34,050 | 11.7 | | Total | 291,701 | 100.0 | 290,554 | 100.0 | Revenue by Sales Channel | Sales Channel | 2025 (RMB '000) | Share (%) | 2024 (RMB '000) | Share (%) | | :--- | :--- | :--- | :--- | :--- | | Sales to Distributors | 225,100 | 77.2 | 261,423 | 90.0 | | Direct Sales | 66,601 | 22.8 | 29,131 | 10.0 | | Total | 291,701 | 100.0 | 290,554 | 100.0 | - Total revenue increased by **0.4%** year-on-year to **RMB 291.7 million**, primarily driven by the launch of new industrial products, expansion with key customers, and new client acquisition[51](index=51&type=chunk) - Revenue from power management products grew by **2.6%**, while signal chain product revenue decreased by **16.1%** due to changes in customer demand[52](index=52&type=chunk) - Direct sales revenue significantly increased by **128.9%** to **RMB 66.6 million**, while sales to distributors decreased by **13.9%**, reflecting the company's strategic shift towards a direct sales model[52](index=52&type=chunk)[53](index=53&type=chunk) [Cost of Sales](index=17&type=section&id=Cost%20of%20Sales) This section notes a slight decrease in the cost of sales during the reporting period - Cost of sales decreased by **0.6%** year-on-year to **RMB 140.7 million**, showing minimal change[54](index=54&type=chunk) [Gross Profit and Gross Margin](index=17&type=section&id=Gross%20Profit%20and%20Gross%20Margin) This section analyzes the increase in gross profit and gross margin, with a detailed breakdown by business line - Gross profit increased by **1.3%** year-on-year to **RMB 151.0 million**, with gross margin rising from **51.3%** to **51.8%**[55](index=55&type=chunk) Gross Profit and Gross Margin by Business Line | Business Line | 2025 Gross Profit (RMB '000) | 2025 Gross Margin (%) | 2024 Gross Profit (RMB '000) | 2024 Gross Margin (%) | | :--- | :--- | :--- | :--- | :--- | | Sales of Power Management Products | 135,067 | 51.3 | 129,803 | 50.6 | | Sales of Signal Chain Products | 15,908 | 55.6 | 19,156 | 56.3 | | Total | 150,975 | 51.8 | 148,959 | 51.3 | - Gross profit from power management products increased by **4.1%**, with gross margin improving by **0.7 percentage points**; gross profit from signal chain products decreased by **16.7%**, with gross margin declining by **0.7 percentage points**[56](index=56&type=chunk)[57](index=57&type=chunk) [Other Income, Gains and Losses](index=18&type=section&id=Other%20Income%2C%20Gains%20and%20Losses) This section reports a significant decrease in other income, gains, and losses, primarily attributed to lower interest income - Other income, gains, and losses decreased by **60.2%** year-on-year to **RMB 6.8 million**, mainly due to reduced interest income from lower HKD deposit rates[58](index=58&type=chunk) [Distribution Costs](index=19&type=section&id=Distribution%20Costs) This section notes an increase in distribution costs, reflecting the company's efforts to expand its direct sales customer base - Distribution costs increased by **33.3%** year-on-year to **RMB 4.0 million**, primarily due to the company's efforts to expand direct sales customers[59](index=59&type=chunk) [Administrative Expenses](index=19&type=section&id=Administrative%20Expenses) This section reports a decrease in administrative expenses, mainly due to reduced intermediary and consulting fees post-listing - Administrative expenses decreased by **30.3%** year-on-year to **RMB 15.2 million**, mainly due to reduced intermediary, consulting, and agency fees following the company's stable operation post-listing[60](index=60&type=chunk) [Research and Development Expenses](index=19&type=section&id=Research%20and%20Development%20Expenses) This section details a decrease in R&D expenses, attributed to improved efficiency and changes in remuneration policies - Research and development expenses decreased by **20.3%** year-on-year to **RMB 56.4 million**, primarily due to reduced material costs (**-26.0%**) from improved R&D efficiency and lower staff remuneration (**-16.0%**) due to changes in the remuneration system[61](index=61&type=chunk) [Finance Costs](index=19&type=section&id=Finance%20Costs) This section reports an increase in finance costs, mainly due to a rise in short-term bank loans - Finance costs increased by **50.0%** year-on-year to **RMB 5.1 million**, primarily due to an increase in short-term bank loans[62](index=62&type=chunk) [Profit Before Tax](index=20&type=section&id=Profit%20Before%20Tax) This section highlights the increase in profit before tax, driven by enhanced management efficiency and reduced administrative and R&D expenses - Profit before tax increased by **14.9%** year-on-year to **RMB 77.1 million**, primarily benefiting from improved management efficiency and reduced administrative and R&D expenses[63](index=63&type=chunk) [Income Tax](index=20&type=section&id=Income%20Tax) This section explains the zero income tax expense during the reporting period, attributed to tax incentives and R&D expense deductions - Income tax expense for the reporting period was **zero**, primarily due to the company enjoying income tax incentives and R&D expense super deductions[64](index=64&type=chunk) [Profit for the Period](index=20&type=section&id=Profit%20for%20the%20Period) This section reports the increase in profit for the period, consistent with the growth in profit before tax - Profit for the period increased by **14.9%** year-on-year to **RMB 77.1 million**, consistent with the reasons for the increase in profit before tax[65](index=65&type=chunk) [Non-HKFRS Measures](index=20&type=section&id=Non-HKFRS%20Measures) The company uses adjusted net profit as a supplementary financial measure to eliminate the potential impact of listing expenses and share-based payments, thereby better comparing operating performance across different periods - Adjusted net profit is defined as profit for the period plus listing expenses and share-based payments[67](index=67&type=chunk) Reconciliation of Adjusted Net Profit | Indicator | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | Profit for the Period | 77,148 | 67,116 | | Add: Listing Expenses | – | – | | Add: Share-based Payments | 878 | – | | Adjusted Net Profit | 78,026 | 67,116 | [Risk Factors](index=21&type=section&id=Risk%20Factors) The company faces various risks including market, operational, investment, human resources, financial, and foreign exchange risks, which are mitigated through established risk management procedures, though not entirely eliminated [Market Risk](index=21&type=section&id=Market%20Risk) This section defines market risk as the potential for adverse impact on profitability due to market price changes, which the company's management actively monitors - Market risk refers to the risk of profitability being adversely affected or business objectives being impacted by changes in market prices, which the company's management actively manages and monitors[69](index=69&type=chunk) [Operational Risk](index=21&type=section&id=Operational%20Risk) This section defines operational risk as potential losses from inadequate internal processes, personnel, or systems, or external events, managed by various functional departments - Operational risk refers to the risk of losses arising from inadequate or failed internal processes, people, and systems, or from external events, managed by various functional divisions and departments[70](index=70&type=chunk) [Investment Risk](index=22&type=section&id=Investment%20Risk) This section describes investment risk as the possibility of losses relative to expected returns, managed through authorization systems and detailed analysis - Investment risk refers to the possibility of any investment incurring losses relative to its expected returns, managed by the company through authorization systems and detailed analysis[71](index=71&type=chunk) [Risk of Human Resources Supply and Retention](index=22&type=section&id=Risk%20of%20Human%20Resources%20Supply%20and%20Retention) This section addresses the risk of failing to attract and retain key personnel with necessary skills and experience, which the company mitigates through attractive remuneration - The company faces the risk of being unable to attract and retain key personnel with the required skills, experience, and talent, and will offer attractive remuneration packages[72](index=72&type=chunk) [Financial Risk](index=22&type=section&id=Financial%20Risk) This section identifies various financial risks, including interest rate, credit, and liquidity risks, which the company manages through established risk management procedures - The company faces financial risks such as interest rate risk, credit risk, and liquidity risk, and has established risk management procedures to mitigate these risks[73](index=73&type=chunk) [Foreign Exchange Risk](index=22&type=section&id=Foreign%20Exchange%20Risk) This section explains that the company's financial statements are presented in RMB, and exchange rate fluctuations may impact financial performance, with no current hedging policy - The company's financial statements are presented in RMB, and exchange rate fluctuations may affect its financial position and operating results; currently, there is no foreign currency hedging policy, but it is regularly reviewed[74](index=74&type=chunk) [Capital Management](index=22&type=section&id=Capital%20Management) The company is committed to ensuring its ability to continue as a going concern and maintaining a healthy capital ratio to support business development and maximize shareholder value, managed through its capital gearing ratio - The objectives of capital management are to ensure the ability to continue as a going concern, maintain a healthy capital ratio, support business development, and maximize shareholder value[75](index=75&type=chunk) - The company manages capital using the capital gearing ratio, which was **30.6%** as of June 30, 2025 (June 30, 2024: **32.4%**)[76](index=76&type=chunk) [Liquidity and Financial Resources](index=23&type=section&id=Liquidity%20and%20Financial%20Resources) The company maintained a strong financial position and ample liquidity during the reporting period, with a significant increase in current assets, though cash and cash equivalents slightly decreased - Current assets as of June 30, 2025, were **RMB 1,686.6 million**, an increase of **16.2%** from December 31, 2024, primarily due to increases in inventories, prepayments, and cash and cash equivalents[77](index=77&type=chunk) - Cash and cash equivalents slightly decreased by **0.4%** to **RMB 633.7 million**, mainly due to increased prepayments resulting from business expansion[77](index=77&type=chunk) - Bank loans as of June 30, 2025, amounted to **RMB 362.1 million**, all repayable within one year[77](index=77&type=chunk) [Capital Expenditure](index=23&type=section&id=Capital%20Expenditure) The company's capital expenditure significantly decreased during the reporting period but is expected to increase with business growth, funded primarily by operating cash flow, bank borrowings, and net proceeds from the listing - As of June 30, 2025, capital expenditure was **RMB 1.0 million**, a significant decrease from **RMB 32.0 million** in the same period of 2024[78](index=78&type=chunk) - Future capital expenditure is expected to increase with business growth, funded by cash generated from operations, bank borrowings, and net proceeds from the listing[79](index=79&type=chunk) [Capital Commitments](index=24&type=section&id=Capital%20Commitments) The company's capital commitments at the end of the reporting period primarily relate to contracted but unprovided additions to property, plant, and equipment, with a slight decrease in amount - As of June 30, 2025, capital commitments amounted to **RMB 65.9 million**, a slight decrease from **RMB 66.4 million** as of December 31, 2024[80](index=80&type=chunk) [Pledged Assets](index=24&type=section&id=Pledged%20Assets) As of the end of the reporting period, some of the company's bank deposits were pledged as security for bank acceptance bills, with no other assets pledged - As of June 30, 2025, **RMB 60.2 million** in bank deposits were pledged as security for the issuance of bank acceptance bills[81](index=81&type=chunk) [Loans and Borrowings](index=24&type=section&id=Loans%20and%20Borrowings) The company's total outstanding bank loans increased, primarily to meet working capital needs for daily operations, with all borrowings maturing within one year - Total outstanding bank loans increased from **RMB 320.2 million** as of December 31, 2024, to **RMB 362.1 million** as of June 30, 2025[82](index=82&type=chunk) - All interest-bearing borrowings are unsecured and unpledged, with effective interest rates ranging from **2.60% to 3.45%** per annum, and all borrowings are due within one year[82](index=82&type=chunk) - As of June 30, 2025, the company had unutilized bank facilities of **RMB 695.1 million**[83](index=83&type=chunk) [Contingent Liabilities](index=24&type=section&id=Contingent%20Liabilities) As of the end of the reporting period, the company had no contingent liabilities - As of June 30, 2025, the company had no contingent liabilities[84](index=84&type=chunk) [Property, Plant and Equipment](index=25&type=section&id=Property%2C%20Plant%20and%20Equipment) The company's total property, plant, and equipment slightly decreased, primarily comprising equipment and machinery, motor vehicles, office equipment and furniture, construction in progress, and leasehold improvements - Total property, plant, and equipment decreased from **RMB 62.1 million** as of December 31, 2024, to **RMB 61.1 million** as of June 30, 2025[85](index=85&type=chunk) - Construction in progress primarily includes purchased R&D equipment (awaiting installation) and the renovation of the Suzhou R&D center[85](index=85&type=chunk) [Right-of-Use Assets](index=25&type=section&id=Right-of-Use%20Assets) The company's right-of-use assets decreased, primarily due to reduced rental payments and increased accumulated depreciation - Right-of-use assets decreased from **RMB 4.0 million** as of December 31, 2024, to **RMB 1.7 million** as of June 30, 2025[86](index=86&type=chunk) [Financial Assets at Fair Value Through Other Comprehensive Income](index=25&type=section&id=Financial%20Assets%20at%20Fair%20Value%20Through%20Other%20Comprehensive%20Income) The company's financial assets at fair value through other comprehensive income remained stable, primarily representing strategic investments - These financial assets remained at **RMB 30,000 thousand**, primarily representing the company's **29.4%** interest as a limited partner in a limited liability partnership[87](index=87&type=chunk) [Inventories](index=25&type=section&id=Inventories) The company's inventories significantly increased to meet customer demand and market expectations - Inventories increased from **RMB 315.4 million** as of December 31, 2024, to **RMB 381.6 million** as of June 30, 2025, primarily stocked based on customer demand and market assessment[88](index=88&type=chunk) [Trade and Other Receivables](index=26&type=section&id=Trade%20and%20Other%20Receivables) Trade receivables increased, primarily due to the company appropriately extending credit terms for customers with good credit to boost order volumes - Trade receivables increased from **RMB 50.5 million** as of December 31, 2024, to **RMB 71.1 million** as of June 30, 2025[89](index=89&type=chunk) - The increase was primarily due to appropriately extended credit terms for customers with good credit, enhancing customer willingness to place orders and increasing order volumes[89](index=89&type=chunk) [Prepayments](index=26&type=section&id=Prepayments) Prepayments significantly increased, reflecting the growing demand for raw material procurement due to the company's expanding business scale - Prepayments increased from **RMB 396.3 million** as of December 31, 2024, to **RMB 536.3 million** as of June 30, 2025[90](index=90&type=chunk) - The increase was primarily due to expanding business scale and growing demand for raw material procurement[90](index=90&type=chunk) [Trade and Other Payables](index=26&type=section&id=Trade%20and%20Other%20Payables) Total trade and other payables decreased, primarily influenced by a reduction in contract liabilities for output VAT to be transferred - Trade and other payables decreased from **RMB 277.7 million** as of December 31, 2024, to **RMB 259.7 million** as of June 30, 2025[91](index=91&type=chunk) - The decrease was primarily due to contract liabilities for output VAT to be transferred, recognized as **RMB 5.3 million** as of December 31, 2024[91](index=91&type=chunk) [Employees and Remuneration Policy](index=27&type=section&id=Employees%20and%20Remuneration%20Policy) The company maintains a stable employee team, attracting and retaining talent through a robust R&D system, training mechanisms, and competitive remuneration and welfare policies - As of June 30, 2025, the company had **112** full-time employees, with **68** R&D personnel, accounting for over **60%**[92](index=92&type=chunk) - The company builds its R&D system and training mechanisms through a full-stack design platform, offering competitive salaries, performance bonuses, and other incentives[92](index=92&type=chunk)[93](index=93&type=chunk) [Compliance with Relevant Laws and Regulations](index=27&type=section&id=Compliance%20with%20Relevant%20Laws%20and%20Regulations) The company strictly adheres to Chinese laws and regulations concerning the IC industry, cybersecurity, data protection, intellectual property, labor, and product liability, with no material non-compliance during the reporting period - The company strictly adheres to Chinese laws and regulations concerning the IC industry, cybersecurity, data protection, intellectual property, labor, and product liability[94](index=94&type=chunk) - During the reporting period, the company had no material breaches or non-compliance with applicable laws and regulations[95](index=95&type=chunk) [Future Plans for Material Investments and Capital Assets](index=28&type=section&id=Future%20Plans%20for%20Material%20Investments%20and%20Capital%20Assets) As of the end of the reporting period, the company had no future plans for material investments and capital assets other than those disclosed in the prospectus - As of June 30, 2025, the company had no other plans for material investments and capital assets, except for those disclosed in the prospectus[96](index=96&type=chunk) [Material Investments, Acquisitions and Disposals of Subsidiaries, Associates and Joint Ventures](index=28&type=section&id=Material%20Investments%2C%20Acquisitions%20and%20Disposals%20of%20Subsidiaries%2C%20Associates%20and%20Joint%20Ventures) During the reporting period, the company had no material investments, acquisitions, or disposals concerning subsidiaries, associates, or joint ventures - During the reporting period, the company had no material investments, acquisitions, or disposals of subsidiaries, associates, or joint ventures[97](index=97&type=chunk) [Corporate Governance and Other Information](index=28&type=section&id=Corporate%20Governance%20and%20Other%20Information) This section covers the company's adherence to corporate governance standards, audit committee review, and other relevant corporate information [Compliance with Corporate Governance Code](index=28&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) The company has adopted and complied with the Corporate Governance Code, with a deviation where the roles of Chairman and Chief Executive Officer are combined, which the Board believes is in the company's overall best interest - The company has adopted and complied with the Corporate Governance Code set out in Appendix C1 Part 2 of the Listing Rules[98](index=98&type=chunk) - There is a deviation from Code Provision C.2.1, where the roles of Chairman of the Board and Chief Executive Officer are combined and held by **Mr. Zhang Guangping**[98](index=98&type=chunk) - The Board believes this combined role facilitates unified leadership and effective execution of administrative functions within the company, serving the overall interests of the company and its shareholders[98](index=98&type=chunk) [Compliance with Model Code](index=29&type=section&id=Compliance%20with%20Model%20Code) The company's directors and supervisors have confirmed compliance with the Model Code for Securities Transactions set out in Appendix C3 of the Listing Rules during the reporting period - The company's directors and supervisors have confirmed compliance with the Model Code for Securities Transactions set out in Appendix C3 of the Listing Rules during the reporting period[100](index=100&type=chunk) [Audit Committee Review of Interim Results](index=29&type=section&id=Audit%20Committee%20Review%20of%20Interim%20Results) The Audit Committee has reviewed the company's interim results and believes the relevant statements comply with applicable accounting standards, Listing Rules, and legal requirements - The Audit Committee has reviewed the company's interim results and discussed accounting principles, risk management, internal controls, and financial reporting matters with management and auditors[101](index=101&type=chunk) - The Audit Committee believes the statements comply with applicable accounting standards, Listing Rules, and legal requirements, and appropriate disclosures have been made[101](index=101&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=29&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) During the reporting period, the company did not purchase, sell, or redeem any of its listed securities, nor did it hold any treasury shares - During the reporting period, the company did not purchase, sell, or redeem any of its listed securities, nor did it hold any treasury shares[102](index=102&type=chunk) [Material Events After the Reporting Period](index=29&type=section&id=Material%20Events%20After%20the%20Reporting%20Period) As of the date of this announcement, no material events affecting the company have occurred after the reporting period - As of the date of this announcement, no material events affecting the company have occurred after the reporting period[103](index=103&type=chunk) [Interim Dividend](index=30&type=section&id=Interim%20Dividend) The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025 - The Board does not recommend the payment of an interim dividend for the six months ended **June 30, 2025**[104](index=104&type=chunk) [Publication of Interim Results and Interim Report](index=30&type=section&id=Publication%20of%20Interim%20Results%20and%20Interim%20Report) This interim results announcement has been published on the company's website and the Stock Exchange's website, and the interim report will be dispatched to shareholders and published on the websites in due course - This interim results announcement has been published on the company's website (**www.batelab.com**) and the Stock Exchange's website (**www.hkexnews.hk**)[105](index=105&type=chunk) - The interim report will be dispatched to shareholders who have requested printed copies and published on the aforementioned websites in due course[105](index=105&type=chunk) [Board of Directors](index=30&type=section&id=Board%20of%20Directors) As of the announcement date, the Board of Directors comprises three executive directors, one non-executive director, and four independent non-executive directors - The Board of Directors includes Executive Directors **Mr. Zhang Guangping**, **Mr. Li Zhen**, and **Mr. Li Yi**; Non-executive Director **Mr. Kong Jianhua**; and Independent Non-executive Directors **Mr. Zhao Heming**, **Mr. Wen Chengge**, **Mr. Ma Ming**, and **Ms. Kang Yuanshu**[107](index=107&type=chunk)

Company Information [GEM Characteristics and Disclaimer](index=2&type=section&id=GEM%20Characteristics%20and%20Disclaimer) The report highlights GEM market characteristics, including higher investment risks, with HKEX disclaiming responsibility for its content - The GEM market provides a listing platform for small and medium-sized companies, which may entail higher investment risks and market volatility[2](index=2&type=chunk) - Hong Kong Exchanges and Clearing Limited and the Stock Exchange assume no responsibility for the contents of this report[2](index=2&type=chunk) [Company Overview and Contact Information](index=4&type=section&id=Company%20Overview%20and%20Contact%20Information) This section provides essential information about Metropolis Capital Holdings Limited, including its board, committees, offices, and contact details - The Board of Directors includes executive directors Mr. Zhou Dawei, Ms. Zhou Hui, non-executive director Ms. Zhou An, and three independent non-executive directors Mr. Liu Zhongwei, Mr. Mo Luojiang, and Mr. Lin Peicong[5](index=5&type=chunk) - The Audit Committee, Remuneration Committee, and Nomination Committee are all chaired by independent non-executive directors[5](index=5&type=chunk) - The company's registered office is in the Cayman Islands, with its head office and principal place of business in China located in Shanghai, and its principal place of business in Hong Kong located in Central[5](index=5&type=chunk) - The company's stock code is **8621**, and its website is http://www.metropolis-leasing.com/[6](index=6&type=chunk) Management Discussion and Analysis [Business Review and Outlook](index=6&type=section&id=Business%20Review%20and%20Outlook) The Group's revenue significantly decreased by **42.8%** to RMB 17.5 million, resulting in a pre-tax loss of RMB 24.0 million due to reduced service income and increased impairment provisions - China's GDP grew by approximately **5.3%** in the first half of 2025, indicating stable domestic economic performance[8](index=8&type=chunk) Key Financial Indicators Change (Six Months Ended June 30, 2025) | Metric | 2025 (RMB million) | 2024 (RMB million) | Change (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | 17.5 | 30.6 | -13.1 | -42.8% | | Profit (Loss) Before Tax | -24.0 | 4.8 | -28.8 | -595.0% | - The decrease in revenue is primarily attributable to a significant reduction in finance lease consulting service income and interest income from sale and leaseback arrangements[8](index=8&type=chunk) - The pre-tax loss is mainly due to decreased revenue, recognition of impairment provisions for factoring receivables, and increased impairment provisions for other receivables and financial guarantee contracts[8](index=8&type=chunk) - The Group faces challenges from intensified competition in the auto finance lease industry and increased overdue receivables due to deteriorating client financial conditions[9](index=9&type=chunk) - Management is actively considering business diversification to broaden income streams and enhance shareholder returns[10](index=10&type=chunk) [Financial Review](index=7&type=section&id=Financial%20Review) This section reviews the Group's financial performance, including revenue, income, expenses, liquidity, capital management, and risk profile, noting significant declines in revenue and profit due to business contraction and increased impairment provisions [Revenue](index=7&type=section&id=Revenue) The Group's revenue, primarily from finance lease, consulting, and factoring services, decreased by **42.8%** to RMB 17.5 million, mainly due to reduced finance lease consulting and sale and leaseback interest income Revenue Composition and Change (Six Months Ended June 30, 2025) | Revenue Source | 2025 (RMB million) | 2024 (RMB million) | Change (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Total Revenue | 17.5 | 30.6 | -13.1 | -42.8% | | Finance lease consulting service income | 15.3 | 23.5 | -8.2 | -34.9% | | Interest income from sale and leaseback arrangements | 1.3 | 4.3 | -3.0 | -69.4% | | Interest income from factoring arrangements | 0.8 | 2.7 | -1.9 | -71.6% | [Other Income](index=8&type=section&id=Other%20Income) Other income for the period was approximately RMB 0.2 million, a **73.1%** decrease, mainly due to reduced expenses from recovering outstanding lease balances and lower bank interest income Other Income Change (Six Months Ended June 30, 2025) | Metric | 2025 (RMB million) | 2024 (RMB million) | Change (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Other income | 0.2 | 0.7 | -0.5 | -73.1% | [Other Gains and Losses, Net](index=8&type=section&id=Other%20Gains%20and%20Losses%2C%20Net) The Group recorded other losses of approximately RMB 0.4 million, a **434.7%** decrease from prior period gains, primarily due to net exchange losses and losses from the disposal of intangible assets (car plates) Other Gains and Losses, Net Change (Six Months Ended June 30, 2025) | Metric | 2025 (RMB million) | 2024 (RMB million) | Change (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Other (losses) gains, net | -0.4 | 0.1 | -0.5 | -434.7% | [Staff Costs](index=8&type=section&id=Staff%20Costs) Staff costs decreased by **49.4%** to approximately RMB 3.1 million, primarily due to internal restructuring and headcount reduction resulting from business contraction Staff Costs Change (Six Months Ended June 30, 2025) | Metric | 2025 (RMB million) | 2024 (RMB million) | Change (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Staff costs | 3.1 | 6.1 | -3.0 | -49.4% | - The decrease in staff costs is mainly due to the Group's business contraction, leading to internal restructuring and staff reduction[15](index=15&type=chunk) [Other Operating Expenses](index=8&type=section&id=Other%20Operating%20Expenses) Other operating expenses decreased by **28.7%** to approximately RMB 14.7 million, mainly due to reduced finance lease consulting service costs and short-term lease expenses, partially offset by increased professional fees like litigation costs Other Operating Expenses Change (Six Months Ended June 30, 2025) | Metric | 2025 (RMB million) | 2024 (RMB million) | Change (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Other operating expenses | 14.7 | 20.6 | -5.9 | -28.7% | | Finance lease consulting service costs | 9.8 | 15.7 | -5.9 | -37.8% | - The decrease is mainly due to reduced finance lease consulting service costs and expenses recognized for short-term leases, partially offset by increased other professional fees, such as litigation costs[16](index=16&type=chunk) [Finance Costs](index=9&type=section&id=Finance%20Costs) Finance costs significantly decreased as the Group incurred no interest on bank and other borrowings, primarily due to the repayment of other borrowings around August 2024 Finance Costs Change (Six Months Ended June 30, 2025) | Metric | 2025 (RMB million) | 2024 (RMB million) | Change (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Interest on bank and other borrowings | 0.0 | 1.1 | -1.1 | -100.0% | - The decrease in finance costs is mainly due to the Group having repaid other borrowings around August 2024[17](index=17&type=chunk) [Net Impairment Losses Recognized/Reversed](index=9&type=section&id=Net%20Impairment%20Losses%20Recognized%2FReversed) The Group recognized several impairment provisions, including RMB 1.0 million for lease receivables, RMB 9.7 million for factoring receivables, RMB 10.7 million for other receivables, and RMB 2.1 million for financial guarantee contracts, reflecting increased default risks and extended litigation - Impairment provisions for lease receivables were approximately **RMB 1.0 million**, primarily due to a decline in the price of leased properties (vehicles) and extended overdue periods for some clients[18](index=18&type=chunk) Factoring Receivables Impairment Provision Change (Six Months Ended June 30, 2025) | Metric | 2025 (RMB million) | 2024 (RMB million) | | :--- | :--- | :--- | | Impairment provisions for factoring receivables | 9.7 (recognized) | 2.4 (reversed) | - Impairment provisions for other receivables of approximately **RMB 10.7 million** were recognized, mainly due to the Group paying overdue amounts on behalf of ancillary service providers to independent financial institutions[19](index=19&type=chunk) - Impairment provisions for financial guarantee contract liabilities of approximately **RMB 2.1 million** were recognized, due to a significant increase in default risk for finance lease consulting clients and ancillary service providers[21](index=21&type=chunk) [Profit Before Tax](index=10&type=section&id=Profit%20Before%20Tax) The Group recorded a pre-tax loss of approximately RMB 24.0 million, a **595.0%** decrease from the prior period's profit of RMB 4.8 million, driven by reduced income and increased impairment provisions, partially offset by lower operating and staff costs Profit (Loss) Before Tax Change (Six Months Ended June 30, 2025) | Metric | 2025 (RMB million) | 2024 (RMB million) | Change (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Profit (Loss) Before Tax | -24.0 | 4.8 | -28.8 | -595.0% | - The change is primarily attributable to decreased income, the shift from reversal to recognition of impairment provisions for factoring receivables, and increased impairment provisions for other receivables and financial guarantee contracts[22](index=22&type=chunk) [Income Tax Expense](index=10&type=section&id=Income%20Tax%20Expense) Income tax expense decreased by approximately **99.9%**, mainly due to the absence of a reversal of deductible temporary differences as deferred tax assets, which occurred in the prior period Income Tax Expense Change (Six Months Ended June 30, 2025) | Metric | 2025 (RMB million) | 2024 (RMB million) | Change (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Income tax expense | 0.0 | 0.5 | -0.5 | -99.9% | - The decrease in income tax expense is mainly due to the reversal of deductible temporary differences in the prior period, with no such reversal in the reporting period[23](index=23&type=chunk) [Liquidity and Capital Resources](index=11&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2025, the Group's cash and bank balances were approximately RMB 50.2 million, a decrease from the prior year, with operating activities shifting from net inflow to net outflow, and financing activities showing a significant reduction in net outflow Cash Flow Change (Six Months Ended June 30, 2025) | Metric | 2025 (RMB) | 2024 (RMB) | | :--- | :--- | :--- | | Cash and bank balances (end of period) | 50,240,338 | 59,874,229 | | Net cash (used in) generated from operating activities | (14,892,462) | 69,854,622 | | Net cash generated from (used in) investing activities | 2,310,169 | (8,403,996) | | Net cash used in financing activities | (290,993) | (24,053,860) | - Net cash from operating activities shifted from a net inflow of approximately **RMB 69.9 million** in the prior period to a net outflow of approximately **RMB 14.9 million** in the reporting period[25](index=25&type=chunk) [Capital Management](index=11&type=section&id=Capital%20Management) The Group maintains a consistent capital management strategy to ensure ongoing operations and maximize shareholder returns, with a zero debt-to-equity ratio due to the absence of borrowings during the reporting period - The Group's overall capital management strategy remains unchanged, aiming to ensure continuous operation and maximize shareholder returns[26](index=26&type=chunk) - The Group had no borrowings during the reporting period, resulting in a zero debt-to-equity ratio[27](index=27&type=chunk) [Foreign Exchange Risk](index=12&type=section&id=Foreign%20Exchange%20Risk) The Group faces limited foreign exchange risk from its domestic operations, primarily funded in RMB, with main exposures arising from HKD and USD denominated bank deposits and related party loans; no hedging policy is currently in place, but management monitors the situation - The Group's principal business operations face limited foreign exchange risk as its domestic business is primarily funded in RMB[29](index=29&type=chunk) - The main foreign exchange risks arise from bank deposits and loans to related parties denominated in HKD and USD[29](index=29&type=chunk) - The Group currently has no foreign currency hedging policy, but management will closely monitor and consider hedging instruments when necessary[29](index=29&type=chunk) [Employment and Remuneration Policies](index=12&type=section&id=Employment%20and%20Remuneration%20Policies) The Group's full-time employee count decreased from 46 to 22, leading to a **49.4%** reduction in total staff costs due to business contraction and layoffs; competitive remuneration and a share option scheme are in place to reward contributions Employee Count and Staff Costs Change | Metric | June 30, 2025 | December 31, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Full-time employees | 22 | 46 | -52.2% | | Total staff costs (RMB million) | 3.1 | 6.1 (prior period) | -49.4% | - The decrease in staff costs is mainly due to the Group's reduction in headcount as a result of business contraction[30](index=30&type=chunk) - The Group has adopted a share option scheme to recognize and reward the contributions of selected participants, including its employees[30](index=30&type=chunk) [Contingent Liabilities](index=12&type=section&id=Contingent%20Liabilities) As of June 30, 2025, the Group had no significant contingent liabilities, with details of financial guarantee contract risks provided in Note 14 to the condensed consolidated financial statements - As of June 30, 2025, the Group had no significant contingent liabilities[31](index=31&type=chunk) [Pledged Assets](index=13&type=section&id=Pledged%20Assets) The Group had no pledged assets as of June 30, 2025, and December 31, 2024 - The Group had no pledged assets at the end of the reporting period or the previous year-end[32](index=32&type=chunk) [Material Acquisitions or Disposals](index=13&type=section&id=Material%20Acquisitions%20or%20Disposals) During the reporting period, the Group did not undertake any material acquisitions or disposals of subsidiaries, associates, or joint ventures - During the reporting period, the Group had no material acquisitions or disposals[33](index=33&type=chunk) [Material Investments](index=13&type=section&id=Material%20Investments) The Company did not make any material investments during the reporting period - During the reporting period, the Company did not make any material investments[34](index=34&type=chunk) [Plans for Material Investments or Capital Assets](index=13&type=section&id=Plans%20for%20Material%20Investments%20or%20Capital%20Assets) As of the date of this interim report, there are no specific plans for material investments or capital assets - As of the date of this interim report, there are no specific plans for material investments or capital assets[35](index=35&type=chunk) [Capital Commitments](index=13&type=section&id=Capital%20Commitments) As of June 30, 2025, the Company had no capital commitments - As of June 30, 2025, the Company had no capital commitments[36](index=36&type=chunk) [Events After Reporting Period](index=13&type=section&id=Events%20After%20Reporting%20Period) As of June 30, 2025, there were no significant events affecting the Group subsequent to the reporting period - As of June 30, 2025, there were no significant events affecting the Group subsequent to the reporting period[37](index=37&type=chunk) [Dividends](index=13&type=section&id=Dividends) The Company did not pay, and the Directors do not recommend paying, any dividends for the reporting period - The Company did not pay, and the Directors do not recommend paying, any dividends for the reporting period[38](index=38&type=chunk) Corporate Governance and Other Information [Compliance with Corporate Governance Code](index=14&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) The Company adopted the GEM Listing Rules' Corporate Governance Code and complied with all provisions during the period, except for the combined roles of Chairman and CEO, which the Board deems to be in the Group's best interest - The Company has adopted the Corporate Governance Code set out in Appendix C1 to the GEM Listing Rules[40](index=40&type=chunk) - During the reporting period, the Group complied with all code provisions, except for deviation from code provision C.2.1 (separation of roles of Chairman and Chief Executive)[40](index=40&type=chunk) - The Board believes that Mr. Zhou Dawei serving concurrently as Chairman and Chief Executive Officer is in the best interest of the Group and will review this arrangement at an appropriate time[40](index=40&type=chunk) [Share Option Scheme](index=15&type=section&id=Share%20Option%20Scheme) The Company's share option scheme was adopted on November 23, 2018, with no options granted, exercised, cancelled, or lapsed as of June 30, 2025, and 80,000,000 shares available for grant - The share option scheme was adopted on November 23, 2018[41](index=41&type=chunk) - As of June 30, 2025, no share options had been granted, exercised, cancelled, or lapsed under the share option scheme[41](index=41&type=chunk) - The number of share options available for grant under the share option scheme is **80,000,000** shares[41](index=41&type=chunk) [Compliance with Model Code and Securities Dealing Code](index=15&type=section&id=Compliance%20with%20Model%20Code%20and%20Securities%20Dealing%20Code) The Company adopted the Model Code for securities transactions by directors and employees with inside information, and all directors and relevant employees confirmed compliance during the reporting period - The Company has adopted the standard dealing requirements set out in Rules 5.48 to 5.67 of the GEM Listing Rules as its code of conduct[42](index=42&type=chunk) - All Directors and relevant employees confirmed compliance with the securities dealing code throughout the reporting period[42](index=42&type=chunk) [Directors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares, and Debentures](index=16&type=section&id=Directors%27%20and%20Chief%20Executive%27s%20Interests%20and%20Short%20Positions%20in%20Shares%2C%20Underlying%20Shares%2C%20and%20Debentures) As of June 30, 2025, Executive Director Mr. Zhou Dawei held approximately **62.5%** of the Company's shares through View Art Investment Limited, with no other directors or chief executives holding disclosable interests Directors' Interests in Company Shares (As of June 30, 2025) | Director Name | Nature and Capacity of Interest | Number of Shares | Approximate Shareholding Percentage | | :--- | :--- | :--- | :--- | | Mr. Zhou Dawei | Interest in controlled corporation | 600,000,000 (L) | 62.5% | - Mr. Zhou Dawei beneficially and wholly owns View Art Investment Limited, which holds approximately **62.5%** of the Company's issued share capital[44](index=44&type=chunk)[46](index=46&type=chunk) [Substantial Shareholders' and Other Persons' Interests and Short Positions in Shares and Underlying Shares](index=18&type=section&id=Substantial%20Shareholders%27%20and%20Other%20Persons%27%20Interests%20and%20Short%20Positions%20in%20Shares%20and%20Underlying%20Shares) As of June 30, 2025, View Art Investment Limited, wholly owned by Mr. Zhou Dawei, was the Company's substantial shareholder, holding approximately **62.5%** of the shares, with no other persons holding disclosable interests of 5% or more Substantial Shareholders' Interests in Company Shares (As of June 30, 2025) | Shareholder Name | Nature and Capacity of Interest | Number of Shares | Approximate Shareholding Percentage | | :--- | :--- | :--- | :--- | | View Art Investment Limited | Beneficial owner | 600,000,000 (L) | 62.5% | - View Art Investment Limited is beneficially and wholly owned by Mr. Zhou Dawei[48](index=48&type=chunk) [Directors' Rights to Acquire Shares or Debentures](index=19&type=section&id=Directors%27%20Rights%20to%20Acquire%20Shares%20or%20Debentures) During the reporting period, the Company did not grant any rights to directors or their immediate family members to acquire shares or debentures, nor were any such rights exercised - During the reporting period, the Company did not grant any rights to directors or their close associates to acquire shares or debentures, nor were any such rights exercised[49](index=49&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=19&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the reporting period - Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the reporting period[50](index=50&type=chunk) [Disclosure of Directors' Information under GEM Listing Rule 17.50A(1)](index=19&type=section&id=Disclosure%20of%20Directors%27%20Information%20under%20GEM%20Listing%20Rule%2017.50A%281%29) Ms. Zhou Hui was appointed as a member of the Board's Nomination Committee effective June 27, 2025, with no other disclosable changes to directors' information since the 2024 annual report - Ms. Zhou Hui was appointed as a member of the Board's Nomination Committee, effective June 27, 2025[51](index=51&type=chunk) [Audit Committee](index=19&type=section&id=Audit%20Committee) The Company's Audit Committee, comprising three independent non-executive directors, reviewed the Group's accounting principles, policies, and the unaudited condensed consolidated interim financial statements for the reporting period - The Audit Committee, composed of three independent non-executive directors, has reviewed the Group's accounting principles, policies, and interim financial statements[52](index=52&type=chunk) Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income For the six months ended June 30, 2025, the Group's total revenue significantly decreased to RMB 17.5 million, resulting in a pre-tax loss of RMB 24.0 million and a loss attributable to owners of RMB 24.0 million, with basic and diluted loss per share of RMB 2.50 cents Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income Summary (Six Months Ended June 30, 2025) | Metric | 2025 (RMB) | 2024 (RMB) | | :--- | :--- | :--- | | Total revenue | 17,474,987 | 30,566,622 | | Profit (Loss) Before Tax | (23,969,213) | 4,842,041 | | Profit (Loss) and Total Comprehensive Income (Loss) for the period | (23,969,669) | 4,368,828 | | Profit (Loss) for the period attributable to owners of the Company | (23,966,386) | 4,396,787 | | Earnings (Loss) Per Share - Basic and Diluted | (0.0250) | 0.0046 | Condensed Consolidated Statement of Financial Position As of June 30, 2025, the Group's total assets less current liabilities decreased to RMB 162.2 million, reflecting reductions in non-current and current assets, particularly factoring and trade receivables, while financial guarantee contract liabilities increased despite a decrease in current liabilities Condensed Consolidated Statement of Financial Position Summary (As of June 30, 2025) | Metric | June 30, 2025 (RMB) | December 31, 2024 (RMB) | | :--- | :--- | :--- | | Non-current assets | 11,269,126 | 17,758,211 | | Current assets | 199,623,055 | 244,943,513 | | Current liabilities | 48,646,199 | 76,486,073 | | Total assets less current liabilities | 162,245,982 | 186,215,651 | | Equity attributable to owners of the Company | 162,638,777 | 186,605,163 | | Total equity | 162,245,982 | 186,215,651 | - Prepayments, deposits, and other receivables increased from **RMB 20.0 million** to **RMB 33.8 million**[57](index=57&type=chunk) - Factoring receivables decreased from **RMB 43.3 million** to **RMB 28.9 million**[57](index=57&type=chunk) - Financial guarantee contract liabilities increased from **RMB 3.1 million** to **RMB 5.3 million**[58](index=58&type=chunk) Condensed Consolidated Statement of Changes in Equity For the six months ended June 30, 2025, equity attributable to owners of the Company decreased from RMB 186.6 million at the beginning of the period to RMB 162.6 million at the end, primarily due to a loss of RMB 24.0 million incurred during the period Condensed Consolidated Statement of Changes in Equity Summary (Six Months Ended June 30, 2025) | Metric | January 1, 2025 (RMB) | June 30, 2025 (RMB) | | :--- | :--- | :--- | | Equity attributable to owners of the Company | 186,605,163 | 162,638,777 | | Loss and total comprehensive loss for the period | - | (23,966,386) | Condensed Consolidated Statement of Cash Flows For the six months ended June 30, 2025, the Group's cash and cash equivalents decreased by RMB 12.9 million, with operating activities shifting to a net outflow of RMB 14.9 million, investing activities turning into a net inflow of RMB 2.3 million, and financing activities showing a significantly reduced net outflow of RMB 0.3 million Condensed Consolidated Statement of Cash Flows Summary (Six Months Ended June 30, 2025) | Metric | 2025 (RMB) | 2024 (RMB) | | :--- | :--- | :--- | | Net cash (used in) generated from operating activities | (14,892,462) | 69,854,622 | | Net cash generated from (used in) investing activities | 2,310,169 | (8,403,996) | | Net cash used in financing activities | (290,993) | (24,053,860) | | Net (decrease) increase in cash and cash equivalents | (12,873,286) | 37,396,766 | | Cash and cash equivalents at end of period | 50,240,338 | 59,874,229 | - Net cash generated from investing activities primarily resulted from proceeds from the disposal of property and equipment of **RMB 229,458** and proceeds from the disposal of intangible assets of **RMB 2,080,711**[61](index=61&type=chunk) Notes to the Condensed Consolidated Financial Statements [Company Information](index=26&type=section&id=Company%20Information) Metropolis Capital Holdings Limited, incorporated in the Cayman Islands, is an investment holding company whose subsidiaries provide finance lease, consulting, and factoring services in China, with View Art Investment Limited, wholly owned by Mr. Zhou Dawei, as its ultimate holding company - The Company was incorporated in the Cayman Islands on June 29, 2017, and its principal business is investment holding[62](index=62&type=chunk) - The Group's subsidiaries provide finance lease, finance lease consulting, and factoring services in China[62](index=62&type=chunk) - The Company's ultimate holding company is View Art Investment Limited, wholly owned by Mr. Zhou Dawei[63](index=63&type=chunk) - The condensed consolidated financial statements are presented in RMB[64](index=64&type=chunk) [Basis of Preparation](index=26&type=section&id=Basis%20of%20Preparation) These interim financial statements are prepared in accordance with IAS 34 "Interim Financial Reporting" and GEM Listing Rule Chapter 18, to be read in conjunction with the Group's audited consolidated financial statements for the year ended December 31, 2024, and are generally prepared on a historical cost basis - The interim financial statements are prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" and Chapter 18 of the GEM Listing Rules[65](index=65&type=chunk) - The interim financial statements should be read in conjunction with the Group's audited consolidated financial statements for the year ended December 31, 2024[66](index=66&type=chunk) - Except for financial instruments disclosed in Note 17, the interim financial statements are prepared on a historical cost basis[66](index=66&type=chunk) [Principal Accounting Policies](index=27&type=section&id=Principal%20Accounting%20Policies) The accounting policies and methods used to prepare these interim financial statements are consistent with those for the 2024 consolidated financial statements, except for the adoption of new/revised IFRS accounting standards effective January 1, 2025, which had no material impact - The accounting policies used to prepare the interim financial statements are consistent with those used for the 2024 consolidated financial statements, except for the adoption of new/revised International Financial Reporting Standards accounting standards[67](index=67&type=chunk) - The adoption of new/revised International Financial Reporting Standards accounting standards had no material impact on the interim financial statements[68](index=68&type=chunk) [Revenue and Segment Information](index=28&type=section&id=Revenue%20and%20Segment%20Information) The Group's operations and non-current assets are located in China, with no single customer contributing 10% or more to total revenue, which primarily derives from finance lease consulting services, followed by interest income from sale and leaseback and factoring arrangements, all showing significant declines - The Group's operations and specific non-current assets are located in China[69](index=69&type=chunk) - For the six months ended June 30, 2025 and 2024, no single customer contributed **10%** or more to the Group's total revenue[70](index=70&type=chunk) Revenue by Nature (Six Months Ended June 30, 2025) | Revenue Source | 2025 (RMB) | 2024 (RMB) | | :--- | :--- | :--- | | Finance lease income | 99,233 | 87,003 | | Interest income from sale and leaseback arrangements | 1,327,701 | 4,338,501 | | Finance lease consulting service income | 15,293,692 | 23,481,044 | | Interest income from factoring arrangements | 754,361 | 2,660,074 | | Total revenue | 17,474,987 | 30,566,622 | - Finance lease consulting service income includes providing credit assessment platforms (2024) and finance lease consulting services (recognized over time)[72](index=72&type=chunk) [Other Income and Other Gains and Losses, Net](index=31&type=section&id=Other%20Income%20and%20Other%20Gains%20and%20Losses%2C%20Net) Other income for the period was RMB 194,145, a decrease from the prior period, while other gains and losses shifted from a gain to a loss of RMB 384,651, mainly due to exchange losses and losses from the disposal of intangible assets Other Income and Other Gains and Losses, Net (Six Months Ended June 30, 2025) | Metric | 2025 (RMB) | 2024 (RMB) | | :--- | :--- | :--- | | Other income | 194,145 | 721,448 | | Other (losses) gains, net | (384,651) | 114,939 | - The decrease in other income is mainly due to reduced bank interest income and expenses incurred from recovering outstanding lease balances from lease customers[73](index=73&type=chunk) - Other (losses) gains, net shifted from a gain to a loss, primarily due to net exchange losses and losses from the disposal of intangible assets (car plates)[73](index=73&type=chunk) [Finance Costs](index=32&type=section&id=Finance%20Costs) Finance costs significantly decreased to RMB 2,444, primarily because there was no interest on bank and other borrowings, as these were repaid around August 2024 Finance Costs (Six Months Ended June 30, 2025) | Metric | 2025 (RMB) | 2024 (RMB) | | :--- | :--- | :--- | | Interest on bank and other borrowings | – | 1,110,559 | | Total finance costs | 2,444 | 1,129,209 | - Finance costs significantly decreased mainly because the Group had repaid bank and other borrowings around August 2024[17](index=17&type=chunk)[74](index=74&type=chunk) [Profit (Loss) Before Tax](index=32&type=section&id=Profit%20%28Loss%29%20Before%20Tax) The Group's pre-tax loss was primarily influenced by staff costs, impairment provisions for various receivables and financial guarantee contracts, and other operating expenses; staff costs decreased due to layoffs, but impairment provisions, especially for factoring and other receivables, significantly increased Profit (Loss) Before Tax Components (Six Months Ended June 30, 2025) | Metric | 2025 (RMB) | 2024 (RMB) | | :--- | :--- | :--- | | Total staff costs | 3,105,598 | 6,137,607 | | Net impairment losses recognized for finance lease receivables | 974,257 | 971,864 | | Net impairment losses recognized (reversed) for factoring receivables | 9,691,292 | (2,417,460) | | Net impairment losses recognized for other receivables | 10,676,119 | – | | Net impairment losses recognized for financial guarantee contract liabilities | 2,140,388 | – | | Total other operating expenses | 14,685,095 | 20,591,207 | - The decrease in staff costs is mainly due to reduced salaries, bonuses, and other benefits (excluding directors) and contributions to retirement benefit schemes, as well as no external human resources service expenses[75](index=75&type=chunk) - Finance lease consulting service costs decreased from **RMB 15.7 million** to **RMB 9.8 million**[76](index=76&type=chunk) - Expenses recognized under short-term leases decreased from **RMB 2.1 million** to **RMB 0.8 million**[76](index=76&type=chunk) [Income Tax Expense](index=35&type=section&id=Income%20Tax%20Expense) Income tax expense for the period was RMB 456, a significant decrease from the prior period, with no corporate income tax provision made as estimated taxable profits of Chinese subsidiaries were fully offset by unutilized tax losses carried forward Income Tax Expense (Six Months Ended June 30, 2025) | Metric | 2025 (RMB) | 2024 (RMB) | | :--- | :--- | :--- | | Total income tax expense | 456 | 473,213 | - No corporate income tax provision was made as the estimated taxable profits of the Chinese subsidiaries were fully offset by unutilized tax losses carried forward from the previous year[79](index=79&type=chunk) [Earnings (Loss) Per Share](index=36&type=section&id=Earnings%20%28Loss%29%20Per%20Share) For the six months ended June 30, 2025, basic and diluted loss per share attributable to owners of the Company was RMB 2.50 cents, compared to earnings per share of RMB 0.46 cents in the prior period, based on 960,000,000 weighted average ordinary shares Earnings (Loss) Per Share (Six Months Ended June 30, 2025) | Metric | 2025 (RMB cents) | 2024 (RMB cents) | | :--- | :--- | :--- | | Basic and diluted (loss) earnings per share attributable to owners of the Company | (2.50) | 0.46 | | Weighted average number of ordinary shares | 960,000,000 | 960,000,000 | - The Group had no potential ordinary shares outstanding during the reporting period or the prior period[80](index=80&type=chunk) [Dividends](index=36&type=section&id=Dividends) The Company's directors have decided not to declare or pay any dividends for the interim period - The Company's directors have decided not to declare or pay any dividends for the interim period[81](index=81&type=chunk) [Prepayments, Deposits and Other Receivables](index=37&type=section&id=Prepayments%2C%20Deposits%20and%20Other%20Receivables) As of June 30, 2025, total prepayments, deposits, and other receivables significantly increased to RMB 33.8 million from RMB 20.0 million, primarily due to advances to ancillary service providers, which also saw a substantial increase in impairment provisions Prepayments, Deposits and Other Receivables (As of June 30, 2025) | Metric | June 30, 2025 (RMB) | December 31, 2024 (RMB) | | :--- | :--- | :--- | | Advances to ancillary service providers | 36,275,410 | 7,836,707 | | Less: Impairment provisions | (12,032,213) | (1,356,094) | | Total prepayments, deposits and other receivables | 33,791,236 | 20,028,410 | - Impairment provisions for advances to ancillary service providers increased from **RMB 1.4 million** to **RMB 12.0 million**[83](index=83&type=chunk) [Finance Lease Receivables](index=38&type=section&id=Finance%20Lease%20Receivables) As of June 30, 2025, net finance lease receivables increased to RMB 2.7 million from RMB 1.7 million, with an effective annual interest rate ranging from **8.00%** to **23.09%**, and total impairment provisions rising to RMB 16.6 million, mainly due to increased Stage 2 expected credit losses Finance Lease Receivables (As of June 30, 2025) | Metric | June 30, 2025 (RMB) | December 31, 2024 (RMB) | | :--- | :--- | :--- | | Present value of minimum lease payments receivable | 19,315,390 | 17,739,004 | | Less: Impairment provisions | (16,616,484) | (16,060,232) | | Net amount | 2,698,906 | 1,678,772 | - The average term of finance leases ranges from **1 month to 3 years**, with effective annual interest rates ranging from approximately **8.00% to 23.09%**[85](index=85&type=chunk)[87](index=87&type=chunk) - The net change in impairment provisions primarily resulted from an increase of **RMB 596,012** in Stage 2 expected credit losses[88](index=88&type=chunk) [Receivables Arising from Sale and Leaseback Arrangements](index=41&type=section&id=Receivables%20Arising%20from%20Sale%20and%20Leaseback%20Arrangements) As of June 30, 2025, net receivables from sale and leaseback arrangements decreased to RMB 11.3 million from RMB 18.9 million, with an effective annual interest rate ranging from **12.00%** to **27.80%**, and total impairment provisions increasing to RMB 13.5 million, mainly due to increased Stage 3 expected credit losses Receivables Arising from Sale and Leaseback Arrangements (As of June 30, 2025) | Metric | June 30, 2025 (RMB) | December 31, 2024 (RMB) | | :--- | :--- | :--- | | Present value of receivables from sale and leaseback arrangements | 24,788,347 | 32,031,718 | | Less: Impairment provisions | (13,529,720) | (13,115,350) | | Net amount | 11,258,627 | 18,916,368 | - The average term of sale and leaseback arrangements ranges from **1 to 3 years**, with effective annual interest rates ranging from approximately **12.00% to 27.80%**[89](index=89&type=chunk)[91](index=91&type=chunk) - The net change in impairment provisions primarily resulted from an increase of **RMB 460,238** in Stage 3 expected credit losses[92](index=92&type=chunk) [Trade and Other Receivables/Payables and Deferred Expenses/Income](index=45&type=section&id=Trade%20and%20Other%20Receivables%2FPayables%20and%20Deferred%20Expenses%2FIncome) The Group's trade and other receivables/payables and deferred expenses/income are derived from finance lease consulting business; as of June 30, 2025, impairment provisions for financial guarantee contract liabilities increased to RMB 5.3 million due to significantly increased default risks, while total guaranteed values decreased - The Group's trade and other receivables/payables and deferred expenses/income are all derived from finance lease consulting business[95](index=95&type=chunk) Impairment Provision Change for Financial Guarantee Contract Liabilities (As of June 30, 2025) | Metric | June 30, 2025 (RMB) | December 31, 2024 (RMB) | | :--- | :--- | :--- | | Impairment provisions for financial guarantee contract liabilities | 5,256,614 | 3,116,226 | - Impairment provisions for financial guarantee contract liabilities increased, given the significantly increased default risk of finance lease consulting clients and ancillary service providers since initial recognition[97](index=97&type=chunk) Total Guaranteed Value of the Group's Financial Guarantees and Counter-Guarantees | Metric | June 30, 2025 (RMB) | December 31, 2024 (RMB) | | :--- | :--- | :--- | | Total guaranteed value related to financial guarantees | 149,185,239 | 277,838,919 | | Total guaranteed value related to counter-guarantees | 150,124,497 | 278,778,176 | [Factoring Receivables](index=47&type=section&id=Factoring%20Receivables) As of June 30, 2025, net factoring receivables significantly decreased to RMB 28.9 million from RMB 43.3 million, with an effective annual interest rate ranging from **7.72%** to **24.00%**, and total impairment provisions substantially increasing to RMB 27.9 million, mainly due to increased Stage 3 expected credit losses Factoring Receivables (As of June 30, 2025) | Metric | June 30, 2025 (RMB) | December 31, 2024 (RMB) | | :--- | :--- | :--- | | Present value of factoring receivables | 56,839,009 | 61,544,698 | | Less: Impairment provisions | (27,891,329) | (18,200,037) | | Net amount | 28,947,680 | 43,344,661 | - Factoring receivables typically have terms ranging from **6 to 18 months**, with effective annual interest rates ranging from approximately **7.72% to 24.00%**[101](index=101&type=chunk) - The net change in impairment provisions primarily resulted from an increase of **RMB 9,551,771** in Stage 3 expected credit losses[103](index=103&type=chunk) - The balance of factoring receivables includes an outstanding balance of **RMB 1,168,000** (net of impairment provisions of approximately **RMB 379,894**) due from related party Nirvana Plan (Shanghai) Enterprise Management Consulting Co Ltd[105](index=105&type=chunk) [Finance Lease Consulting Service Receivables](index=51&type=section&id=Finance%20Lease%20Consulting%20Service%20Receivables) As of June 30, 2025, the Group had no finance lease consulting service receivables, compared to RMB 313,681 as of December 31, 2024, with a typical credit period of up to 30 days from the invoice date Finance Lease Consulting Service Receivables (As of June 30, 2025) | Metric | June 30, 2025 (RMB) | December 31, 2024 (RMB) | | :--- | :--- | :--- | | Finance lease consulting service receivables | – | 313,681 | | Over 90 days | – | 313,681 | - The Group typically grants a credit period of up to **30 days** from the invoice date[106](index=106&type=chunk) [Financial Assets at Fair Value Through Profit or Loss](index=53&type=section&id=Financial%20Assets%20at%20Fair%20Value%20Through%20Profit%20or%20Loss) As of June 30, 2025, financial assets at fair value through profit or loss amounted to RMB 6.6 million, primarily wealth management products valued at fair value, with a net fair value gain of RMB 45,403, redeemable upon the Group's request Financial Assets at Fair Value Through Profit or Loss (As of June 30, 2025) | Metric | June 30, 2025 (RMB) | December 31, 2024 (RMB) | | :--- | :--- | :--- | | Wealth management products measured at fair value | 6,605,940 | 6,560,537 | - The net fair value gain on wealth management products was **RMB 45,403**[109](index=109&type=chunk) - Wealth management products are redeemable upon the Group's request and are classified as financial assets at fair value through profit or loss because their contractual cash flows are not solely payments of principal and interest[109](index=109&type=chunk) [Deposits Received from Lease Customers](index=54&type=section&id=Deposits%20Received%20from%20Lease%20Customers) As of June 30, 2025, outstanding deposits from lease customers slightly decreased to RMB 1.1 million, which are interest-free, measured at amortized cost using the effective interest method, with a weighted average effective annual interest rate of approximately **9.92%** Deposits Received from Lease Customers (As of June 30, 2025) | Metric | June 30, 2025 (RMB) | December 31, 2024 (RMB) | | :--- | :--- | :--- | | Outstanding deposits from lease customers | 1,062,175 | 1,110,736 | - Deposits received are interest-free, measured at amortized cost using the effective interest method, with a weighted average effective annual interest rate of approximately **9.92%**[111](index=111&type=chunk) [Other Payables and Accruals](index=55&type=section&id=Other%20Payables%20and%20Accruals) As of June 30, 2025, total other payables and accruals decreased to RMB 5.8 million from RMB 6.9 million, with other payables primarily comprising advances received from ancillary service providers Other Payables and Accruals (As of June 30, 2025) | Metric | June 30, 2025 (RMB) | December 31, 2024 (RMB) | | :--- | :--- | :--- | | Other payables | 4,999,160 | 5,877,525 | | Accrued salaries | 433,529 | 628,108 | | Other taxes payable | 414,235 | 417,674 | | Total | 5,846,924 | 6,923,307 | - Other payables include advances received from ancillary service providers as deposits for their counter-guarantee services[112](index=112&type=chunk) [Share Capital](index=55&type=section&id=Share%20Capital) As of June 30, 2025, the Company's authorized share capital was 4,000,000,000 ordinary shares of HKD 0.01 each, with 960,000,000 issued and fully paid shares amounting to HKD 9,600,000, presented as RMB 8,503,450 in the condensed consolidated statement of financial position Share Capital Structure (As of June 30, 2025) | Metric | Number of Shares | Amount (HKD) | | :--- | :--- | :--- | | Authorized share capital | 4,000,000,000 | 40,000,000 | | Issued and fully paid share capital | 960,000,000 | 9,600,000 | | Presented in condensed consolidated statement of financial position (RMB) | - | 8,503,450 | [Deferred Tax Assets](index=56&type=section&id=Deferred%20Tax%20Assets) As of June 30, 2025, deferred tax assets were RMB 4.9 million, largely unchanged from December 31, 2024, recognized for RMB 19.5 million in deductible temporary differences, with the remaining RMB 55.8 million unrecognised due to insufficient taxable profits Deferred Tax Assets (As of June 30, 2025) | Metric | June 30, 2025 (RMB) | December 31, 2024 (RMB) | | :--- | :--- | :--- | | Deferred tax assets | 4,876,684 | 4,877,140 | - Deferred tax assets of **RMB 4,876,684** were recognized for deductible temporary differences of **RMB 19,506,735**[115](index=115&type=chunk) - The remaining deductible temporary differences of **RMB 55,798,606** were not recognized as it is not probable that sufficient taxable profits will be available to offset them[115](index=115&type=chunk) - The Group has tax losses of approximately **RMB 10.6 million** for which deferred tax assets were not recognized, available to offset future taxable profits for up to five years[115](index=115&type=chunk) [Related Party Disclosures](index=58&type=section&id=Related%20Party%20Disclosures) This section details significant transactions and key management personnel remuneration with related parties, including new loans and repayments with the controlling shareholder, short-term lease expenses with Mr. Zhou Zunzhong, and factoring financing and interest income with Nirvana Plan [Related Party Transactions](index=58&type=section&id=Related%20Party%20Transactions) During the reporting period, the Group engaged in transactions with Mr. Zhou, the controlling shareholder, involving new loans of RMB 2.5 million and loan repayments of RMB 2.2 million, short-term lease expenses of RMB 592,469 with Mr. Zhou Zunzhong, and interest income from factoring arrangements of RMB 59,032 with Nirvana Plan Related Party Transactions (Six Months Ended June 30, 2025) | Related Party Name/Person | Relationship | Nature of Transaction | 2025 (RMB) | 2024 (RMB) | | :--- | :--- | :--- | :--- | :--- | | Mr. Zhou | Controlling shareholder | New loans borrowed | 2,506,470 | 1,903,996 | | Mr. Zhou | Controlling shareholder | Loan repaid | 2,215,477 | – | | Mr. Zhou Zunzhong | Related party | Short-term lease expenses | 592,469 | 592,469 | | Nirvana Plan | Related party | Factoring financing | – | 2,000,000 | | Nirvana Plan | Related party | Interest income from factoring arrangements | 59,032 | 54,221 | - Mr. Zhou's borrowings are non-trade in nature, unsecured, interest-free, and repayable on demand[117](index=117&type=chunk) [Key Management Personnel Remuneration](index=59&type=section&id=Key%20Management%20Personnel%20Remuneration) For the six months ended June 30, 2025, total key management personnel remuneration slightly increased to RMB 1.4 million from RMB 1.3 million in the prior period, primarily comprising salaries, bonuses, other benefits, and contributions to retirement benefit schemes Key Management Personnel Remuneration (Six Months Ended June 30, 2025) | Metric | 2025 (RMB) | 2024 (RMB) | | :--- | :--- | :--- | | Salaries, bonuses and other benefits | 1,144,092 | 1,041,402 | | Contributions to retirement benefit schemes | 240,283 | 240,652 | | Total | 1,384,375 | 1,282,054 | [Fair Value Measurement](index=59&type=section&id=Fair%20Value%20Measurement) This section discloses assets and liabilities measured at or for which fair value is disclosed, in accordance with IFRS 13 "Fair Value Measurement"; the Group's wealth management products are classified as Level 2 fair value measurements, valued based on redemption values from licensed bank statements, with book values of financial assets and liabilities recorded at amortized cost approximating their fair values [Assets Measured at Fair Value](index=60&type=section&id=Assets%20Measured%20at%20Fair%20Value) The Group's financial assets at fair value through profit or loss, primarily wealth management products, amounted to RMB 6.6 million as of June 30, 2025, classified as Level 2 fair value measurements, with valuations based on redemption values from licensed bank statements Assets Measured at Fair Value (As of June 30, 2025) | Asset Class | Fair Value Hierarchy Level | Valuation Techniques and Key Inputs | June 30, 2025 (RMB) | December 31, 2024 (RMB) | | :--- | :--- | :--- | :--- | :--- | | Wealth management products | Level 2 | Redemption value stated in daily statements provided by licensed banks | 6,605,940 | 6,560,537 | - During the reporting period, there were no transfers between Level 1 and Level 2 fair value measurements, and no transfers into or out of Level 3 fair value measurements[120](index=120&type=chunk) [Assets and Liabilities for Which Fair Value is Disclosed but Not Measured at Fair Value](index=60&type=section&id=Assets%20and%20Liabilities%20for%20Which%20Fair%20Value%20is%20Disclosed%20but%20Not%20Measured%20at%20Fair%20Value) The Directors believe that the carrying amounts of financial assets and liabilities recorded at amortized cost approximate their fair values at the end of the reporting period - The Directors believe that the carrying amounts of financial assets and financial liabilities recorded at amortized cost approximate their fair values at the end of the reporting period[121](index=121&type=chunk)

Revenue and Income - For the six months ended June 30, 2025, the group's revenue decreased by approximately RMB 13.1 million or 42.8% to about RMB 17.5 million compared to approximately RMB 30.6 million for the same period in 2024[11]. - The decline in revenue was primarily due to a significant reduction in income from financing leasing consulting services and interest income from sale-and-leaseback arrangements[11]. - The group's revenue decreased by approximately RMB 13.1 million or 42.8% to about RMB 17.5 million, primarily due to a significant reduction in income from financing leasing consulting services and interest income from sale-and-leaseback arrangements[14]. - Income from financing leasing consulting services was approximately RMB 15.3 million, down about RMB 8.2 million or 34.9% from RMB 23.5 million in the same period last year[14]. - Interest income from sale-and-leaseback arrangements was approximately RMB 1.3 million, a decrease of about RMB 3.0 million or 69.4% compared to RMB 4.3 million in the previous year[14]. - Total revenue for the six months ended June 30, 2025, was RMB 17,474,987, a decrease of 42.8% compared to RMB 30,566,622 for the same period in 2024[74]. - Financing lease income was RMB 99,233, up from RMB 87,003, reflecting a growth of 14.3% year-over-year[57]. - Income from automotive financing leases was RMB 38,742, down 55.5% from RMB 87,003 in the previous year[74]. - Income from equipment financing leases was RMB 60,491, with no prior year comparison available[74]. Loss and Financial Performance - The group recorded a loss before tax of approximately RMB 24.0 million, a decrease of about 595.0% compared to a profit before tax of approximately RMB 4.8 million for the same period last year[11]. - The group recorded a pre-tax loss of approximately RMB 24.0 million, a decrease of about 595.0% compared to a pre-tax profit of RMB 4.8 million in the same period last year[25]. - The company reported a net loss of RMB 23,969,669 for the six months ended June 30, 2025, compared to a profit of RMB 4,368,828 in the same period of 2024[58]. - Basic and diluted loss per share for the period was RMB (2.50), compared to earnings of RMB 0.46 per share in the previous year[58]. - The company reported a net loss of RMB (23,966,386) for the six months ended June 30, 2025, compared to a profit of RMB 4,396,787 for the same period in 2024[63]. - The company recognized a net increase in loss provisions of RMB 2,140,388 during the reporting period[102]. Operating Expenses and Cost Management - Employee costs were approximately RMB 3.1 million, a reduction of about RMB 3.0 million or 49.4% from RMB 6.1 million in the previous year due to business contraction and workforce reduction[18]. - Other operating expenses decreased by approximately RMB 5.9 million or 28.7% to about RMB 14.7 million from RMB 20.6 million in the same period last year[19]. - Total operating expenses for the six months ended June 30, 2025, amounted to RMB 14,685,095, down 28.7% from RMB 20,591,207 in the same period of 2024[82]. - Employee costs decreased to RMB 3,105,598 from RMB 6,137,607, a reduction of 49.3%[57]. Cash Flow and Financial Position - As of June 30, 2025, the company's cash and bank deposits amounted to RMB 50.2 million, down from RMB 59.9 million as of June 30, 2024, representing a decrease of approximately 12.8%[27]. - The net cash used in operating activities for the reporting period was RMB 14.9 million, compared to a net cash generated of RMB 69.9 million in the same period last year, indicating a significant decline[28]. - The net cash generated from investing activities was RMB 2.3 million, while the previous year recorded a net cash used of RMB 8.4 million, showing an improvement in cash flow from investments[28]. - Cash and cash equivalents at the end of the reporting period were RMB 50,240,338, down from RMB 63,136,427 at the beginning of the period, a decrease of approximately 20.4%[64]. - The company's equity attributable to owners decreased to RMB 162,638,777 from RMB 186,605,163, a decline of about 12.8%[61]. - The company has no significant contingent liabilities as of June 30, 2025, maintaining a stable financial position[34]. - The company reported no borrowings, resulting in a debt-to-equity ratio of zero, indicating a strong capital structure[30]. Provisions and Receivables - The group confirmed a loss provision for finance guarantee contracts of approximately RMB 2.1 million due to increased default risk from clients[24]. - The group recognized a loss provision of approximately RMB 10.7 million for other receivables due to an increase in outstanding balances, with no provision recognized in the same period last year[22]. - The provision for losses on receivables increased to RMB 12,032,213 as of June 30, 2025, from RMB 1,356,094 at the end of 2024[86]. - The loss provision for finance lease receivables increased to RMB 16,616,484 as of June 30, 2025, from RMB 16,060,232 at the beginning of the year[91]. - The company’s receivables from financing leases increased to RMB 2,112,232 from RMB 1,678,772, representing a growth of about 25.8%[60]. - The total receivables from finance leases amounted to RMB 20,753,964, with a present value of RMB 17,739,004[90]. Business Strategy and Future Outlook - The group has been actively considering diversification of its existing business and broadening its revenue sources to enhance shareholder returns[13]. - The company has no specific major investment or capital asset plans as of the mid-report date, indicating a cautious approach to capital allocation[38]. - The company did not engage in any purchases, sales, or redemptions of its listed securities during the reporting period[53]. - The company has no new strategies or market expansions disclosed in the current report[56]. - The company expects that the adoption of new or revised International Financial Reporting Standards will not have a significant impact on its financial position or performance in future periods[71]. Management and Governance - Total remuneration for key management personnel increased to RMB 1,384,375 for the six months ended June 30, 2025, compared to RMB 1,282,054 for the same period in 2024, reflecting a growth of approximately 8%[120]. - There were no changes in the board of directors' information that required disclosure since the last annual report[54]. Financial Assets and Liabilities - The fair value of financial assets measured at fair value through profit or loss increased to RMB 6,605,940 as of June 30, 2025, compared to RMB 6,560,537 at the end of 2024, reflecting a net fair value change of RMB 45,403 during the reporting period[110]. - The company believes that the carrying amounts of financial assets and liabilities measured at amortized cost approximate their fair values as of June 30, 2025, and December 31, 2024[123].

[Announcement Overview](index=1&type=section&id=Announcement%20Overview) This announcement supplements the 2024 annual report, providing additional details on the Share Option Scheme - This announcement is a supplemental announcement to the 2024 annual report published by Kingwa Holdings Group Limited (formerly known as Loong Palace Culture Holdings Limited, stock code: 8082) on April 29, 2025[2](index=2&type=chunk)[3](index=3&type=chunk) - The main purpose of the announcement is to provide supplementary information for the "Report of the Directors - Share Option Scheme" section in the 2024 annual report[3](index=3&type=chunk)[4](index=4&type=chunk) [Supplementary Information on Share Option Scheme](index=1&type=section&id=Supplementary%20Information%20on%20Share%20Option%20Scheme) This section details changes in share options for directors, employees, and consultants, alongside updates to the scheme's authorized limits [Details of Changes in Directors' Share Options](index=1&type=section&id=Details%20of%20Changes%20in%20Directors%27%20Share%20Options) Directors' total share options decreased to 42.8 million units by year-end 2024, primarily due to lapses and exercises Changes in Directors' Share Options | Metric | Quantity (units) | | :--- | :--- | | Outstanding as of January 1, 2024 | 55,266,000 | | Exercised during the year | (1,000,000) | | Forfeited/Lapsed during the year | (11,466,000) | | Outstanding and exercisable as of December 31, 2024 | 42,800,000 | - **11,466,000** share options held by Mr. Zhong lapsed during 2024, and **1,000,000** share options were exercised by Mr. Siu Hei Lam[5](index=5&type=chunk) [Details of Changes in Employees' and Consultants' Share Options](index=2&type=section&id=Details%20of%20Changes%20in%20Employees%27%20and%20Consultants%27%20Share%20Options) Share options for employees and consultants decreased to 91.6 million units by year-end 2024, mainly due to significant lapses Changes in Employees' and Consultants' Share Options | Metric | Quantity (units) | | :--- | :--- | | Outstanding as of January 1, 2024 | 119,507,600 | | Exercised during the year | 0 | | Forfeited/Lapsed during the year | (27,900,600) | | Outstanding and exercisable as of December 31, 2024 | 91,607,000 | - A total of **27,900,600** share options held by employees and consultants lapsed during 2024[6](index=6&type=chunk) [Authorized Limits of Share Option Scheme](index=2&type=section&id=Authorized%20Limits%20of%20Share%20Option%20Scheme) By year-end 2024, the share option scheme's authorized limit for grants was 209.6 million units, including a 21.0 million unit cap for service providers Authorized Limits of Share Option Scheme | Metric | January 1, 2024 (units) | December 31, 2024 (units) | | :--- | :--- | :--- | | Share options and awards available for grant under authorized limit | 0 | 209,601,567 | | Service provider cap under authorized limit | 0 | 20,960,156 | [Other Information and Declarations](index=2&type=section&id=Other%20Information%20and%20Declarations) This section confirms the supplementary nature of the information and outlines the Board's responsibility for its accuracy - This supplementary information does not affect other disclosures in the 2024 annual report, with all other information remaining unchanged[7](index=7&type=chunk) - The Board of Directors comprises Mr. Tong Choi Chi (Chairman and Executive Director), Mr. Ma Sun Ying and Ms. Yuen Siu Mui (Non-executive Directors), and Mr. Chan Wai Man, Dr. Yip Wai Hung, and Mr. Siu Hei Lam (Independent Non-executive Directors)[9](index=9&type=chunk) - The Board of Directors collectively and individually accepts full responsibility for the accuracy, completeness, and non-misleading nature of the information contained in this announcement[9](index=9&type=chunk)

Company Information [Directors, Supervisors, and Senior Management](index=1&type=section&id=Directors%2C%20Supervisors%2C%20and%20Senior%20Management) The Board of Directors comprises three executive, three non-executive, and three independent non-executive directors, with changes in board and supervisory board members during the reporting period - Executive Director changes: Yu Fan resigned on April 25, 2025, and Zhu Lintao was appointed on June 25, 2025[6](index=6&type=chunk) - Independent Non-Executive Director changes: Xiao Zhixiong resigned on June 25, 2025, and Li Guodong was appointed on June 25, 2025, also serving as Chairman of the Audit and Risk Management Committee[6](index=6&type=chunk) - Supervisor changes: Chen Peihuan resigned on June 25, 2025, and Ma Xujian was appointed on June 25, 2025[6](index=6&type=chunk) [Basic Company Information](index=3&type=section&id=Basic%20Company%20Information) Dongjiang Environmental Company Limited, a joint-stock company registered in China, is listed on the Shenzhen Stock Exchange (A-shares) and The Stock Exchange of Hong Kong Limited (H-shares), primarily engaged in environmental protection Company Listing Information | Stock Code | Listing Place | | :------- | :------- | | A-shares: 002672 | Shenzhen Stock Exchange | | H-shares: 00895 | The Stock Exchange of Hong Kong Limited | - The company's main business covers industrial waste resource utilization, wastewater, exhaust gas, and solid waste treatment, environmental facility operation, and precious metal recycling in the environmental protection sector[54](index=54&type=chunk) [Glossary of Terms](index=4&type=section&id=Glossary%20of%20Terms) This report defines key terms to ensure clarity and consistency, covering corporate governance, equity structure, financial reporting periods, and major shareholders - "First half of 2025" or "Reporting Period" refers to the six months ended June 30, 2025[10](index=10&type=chunk) - "The Group" refers to the Company and its subsidiaries[10](index=10&type=chunk) - Major shareholders include Guang Sheng Holdings Group, Baowu Environmental Technology, and Huihong Group[10](index=10&type=chunk) Financial Statements [Consolidated Balance Sheet](index=7&type=section&id=Consolidated%20Balance%20Sheet) As of June 30, 2025, the Group's total consolidated assets were RMB 11,025,527,347.49, a slight decrease from the beginning of the period, with negative net current assets Key Consolidated Balance Sheet Data (As of June 30, 2025) | Indicator | Period-end Balance (RMB) | Period-beginning Balance (RMB) | | :--- | :--- | :--- | | Total Assets | 11,025,527,347.49 | 11,278,479,415.46 | | Total Current Assets | 3,600,500,457.56 | 3,563,956,903.50 | | Total Non-current Assets | 7,425,026,889.93 | 7,714,522,511.96 | | Total Liabilities | 7,200,623,387.22 | 7,127,589,598.80 | | Total Current Liabilities | 3,750,180,723.18 | 3,877,229,219.04 | | Total Non-current Liabilities | 3,450,442,664.04 | 3,250,360,379.76 | | Total Owners' Equity | 3,824,903,960.27 | 4,150,889,816.66 | [Company Balance Sheet](index=12&type=section&id=Company%20Balance%20Sheet) As of June 30, 2025, the Company's total assets increased to RMB 7,987,719,010.95, with current assets totaling RMB 3,814,254,494.36 and current liabilities RMB 2,931,223,760.36 Key Company Balance Sheet Data (As of June 30, 2025) | Indicator | Period-end Balance (RMB) | Period-beginning Balance (RMB) | | :--- | :--- | :--- | | Total Assets | 7,987,719,010.95 | 7,758,362,070.08 | | Total Current Assets | 3,814,254,494.36 | 3,599,282,904.03 | | Total Non-current Assets | 4,173,464,516.59 | 4,159,079,166.05 | | Total Liabilities | 4,925,112,816.90 | 4,654,209,427.05 | | Total Current Liabilities | 2,931,223,760.36 | 2,929,887,812.29 | | Total Non-current Liabilities | 1,993,889,056.54 | 1,724,321,614.76 | | Total Owners' Equity | 3,062,606,194.05 | 3,104,152,643.03 | [Consolidated Income Statement](index=17&type=section&id=Consolidated%20Income%20Statement) For the six months ended June 30, 2025, the Group's total operating revenue decreased by 3.40% to RMB 1,500,470,309.76, with net loss attributable to parent company shareholders widening by 8.09% Key Consolidated Income Statement Data (For the six months ended June 30, 2025) | Indicator | First Half 2025 (RMB) | First Half 2024 (RMB) | | :--- | :--- | :--- | | Total Operating Revenue | 1,500,470,309.76 | 1,553,358,452.26 | | Total Operating Costs | 1,846,670,942.48 | 1,882,149,083.44 | | Operating Profit | -329,316,352.67 | -313,793,031.30 | | Total Profit | -324,780,391.79 | -315,039,567.24 | | Net Profit | -328,240,737.00 | -319,313,114.02 | | Net Profit Attributable to Parent Company Shareholders | -278,177,080.22 | -257,357,295.18 | | Basic Earnings Per Share | -0.25 | -0.23 | [Company Income Statement](index=23&type=section&id=Company%20Income%20Statement) For the six months ended June 30, 2025, the Company's operating revenue significantly increased to RMB 350,817,891.13, while net loss narrowed year-on-year Key Company Income Statement Data (For the six months ended June 30, 2025) | Indicator | First Half 2025 (RMB) | First Half 2024 (RMB) | | :--- | :--- | :--- | | Operating Revenue | 350,817,891.13 | 97,567,903.51 | | Operating Costs | 343,887,443.53 | 95,598,420.71 | | Operating Profit | -42,333,129.75 | -51,075,902.62 | | Total Profit | -41,564,100.28 | -51,075,915.58 | | Net Profit | -41,546,448.98 | -51,093,275.17 | [Consolidated Cash Flow Statement](index=26&type=section&id=Consolidated%20Cash%20Flow%20Statement) For the six months ended June 30, 2025, the Group's net cash flow from operating activities turned negative, while net cash flow from financing activities turned positive Key Consolidated Cash Flow Statement Data (For the six months ended June 30, 2025) | Indicator | First Half 2025 (RMB) | First Half 2024 (RMB) | | :--- | :--- | :--- | | Cash Inflows from Operating Activities | 1,740,812,786.15 | 1,926,916,009.86 | | Cash Outflows from Operating Activities | 1,791,521,114.73 | 1,924,534,838.20 | | Net Cash Flow from Operating Activities | -50,708,328.58 | 2,381,171.66 | | Net Cash Flow from Investing Activities | -73,967,557.57 | -147,850,885.18 | | Net Cash Flow from Financing Activities | 159,540,961.07 | -195,531,541.11 | | Net Increase in Cash and Cash Equivalents | 34,893,597.13 | -341,015,021.71 | | Cash and Cash Equivalents at Period End | 1,051,200,772.35 | 896,795,765.01 | [Company Cash Flow Statement](index=31&type=section&id=Company%20Cash%20Flow%20Statement) For the six months ended June 30, 2025, the Company's net cash flow from operating activities turned positive, while net cash flow from investing activities significantly increased Key Company Cash Flow Statement Data (For the six months ended June 30, 2025) | Indicator | First Half 2025 (RMB) | First Half 2024 (RMB) | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 80,198,751.91 | -259,911,142.48 | | Net Cash Flow from Investing Activities | 81,159,015.34 | 10,372,557.68 | | Net Cash Flow from Financing Activities | -157,509,683.94 | -85,456,387.45 | | Net Increase in Cash and Cash Equivalents | 3,848,083.31 | -334,994,972.25 | | Cash and Cash Equivalents at Period End | 764,109,267.64 | 713,387,722.13 | [Consolidated Statement of Changes in Owners' Equity](index=33&type=section&id=Consolidated%20Statement%20of%20Changes%20in%20Owners%27%20Equity) For the six months ended June 30, 2025, the Group's total owners' equity attributable to the parent company decreased by RMB 275,025,723.76, primarily due to an expanded net loss Key Consolidated Statement of Changes in Owners' Equity Data (For the six months ended June 30, 2025) | Indicator | First Half 2025 Change (RMB) | First Half 2024 Change (RMB) | | :--- | :--- | :--- | | Total Owners' Equity Attributable to Parent Company Change | -275,025,723.76 | -355,628,130.07 | | Minority Interests Change | -50,960,132.63 | 38,126,125.87 | | Total Owners' Equity Change | -325,985,856.39 | -317,502,004.20 | | Total Comprehensive Income | -328,212,214.79 | -319,326,881.10 | | Capital Contributed and Reduced by Owners | 500,000.00 | -1,006,000.00 | | Profit Distribution | -2,450,000.00 | 0.00 | [Company Statement of Changes in Owners' Equity](index=36&type=section&id=Company%20Statement%20of%20Changes%20in%20Owners%27%20Equity) For the six months ended June 30, 2025, the Company's total owners' equity decreased by RMB 41,546,448.98, primarily due to net loss, with a corresponding reduction in retained earnings Key Company Statement of Changes in Owners' Equity Data (For the six months ended June 30, 2025) | Indicator | First Half 2025 Change (RMB) | First Half 2024 Change (RMB) | | :--- | :--- | :--- | | Total Owners' Equity Change | -41,546,448.98 | -51,093,275.17 | | Retained Earnings Change | -41,546,448.98 | -51,093,275.17 | | Total Comprehensive Income | -41,546,448.98 | -51,093,275.17 | Notes to Financial Statements [General Information](index=38&type=section&id=General%20Information) The Company, a joint-stock company registered in China, is listed on the Hong Kong Stock Exchange and Shenzhen Stock Exchange, primarily engaged in environmental protection - The company's main business scope includes industrial waste collection, treatment, and comprehensive utilization; wastewater, exhaust gas, and solid waste treatment; environmental protection facility design, construction, and operation; and precious metal recycling and utilization[54](index=54&type=chunk) [Basis of Preparation](index=39&type=section&id=Basis%20of%20Preparation) The Group's financial statements are prepared on a going concern basis, adhering to Chinese accounting standards and disclosure requirements, and have been reviewed by the Audit and Risk Management Committee - The financial statements are prepared on a going concern basis, and management has no significant concerns about the company's ability to continue as a going concern for the next 12 months[55](index=55&type=chunk) - These interim results are unaudited by the auditors but have been reviewed by the Audit and Risk Management Committee[56](index=56&type=chunk) [Operating Revenue](index=40&type=section&id=Operating%20Revenue) For the six months ended June 30, 2025, the Group's total operating revenue decreased by 3.40% to RMB 1,500,470,309.76, primarily due to a decline in precious metal recycling revenue Operating Revenue by Industry Segment (For the six months ended June 30, 2025) | Industry Segment | First Half 2025 (RMB) | First Half 2024 (RMB) | Year-on-year Change Rate | | :--- | :--- | :--- | :--- | | Industrial Waste Resource Utilization | 646,104,217.38 | 564,376,350.26 | +14.48% | | Industrial Waste Treatment and Disposal | 396,990,856.03 | 401,533,859.48 | -1.13% | | Precious Metal Recycling and Utilization | 287,227,264.88 | 396,750,877.20 | -27.61% | | Municipal Waste Treatment and Disposal | 44,642,362.92 | 61,648,664.38 | -27.59% | | Renewable Energy Utilization | 10,590,979.26 | 15,145,986.04 | -30.07% | | Environmental Engineering and Services | 28,246,587.57 | 50,003,630.90 | -43.51% | | Electronic Waste Dismantling | 67,557,360.90 | 54,742,150.14 | +23.40% | | Other Businesses | 19,110,680.82 | 9,156,933.86 | +108.70% | | Total | 1,500,470,309.76 | 1,553,358,452.26 | -3.40% | [Segment Information](index=41&type=section&id=Segment%20Information) The Group's operations are divided into eight reporting segments, with industrial waste resource utilization and treatment segments showing significant revenue and profit figures for the first half of 2025 - The company's operations are divided into **8 reporting segments**, and management regularly evaluates the operating results of each segment[58](index=58&type=chunk) Key Segment Operating Revenue and Total Profit (For the six months ended June 30, 2025) | Segment | Operating Revenue (RMB) | Total Profit (RMB) | | :--- | :--- | :--- | | Industrial Waste Resource Utilization | 661,524,909.18 | -52,618,411.21 | | Industrial Waste Treatment and Disposal | 418,926,680.14 | -194,426,714.65 | | Precious Metal Recycling and Utilization | 287,227,264.88 | -9,576,803.30 | | Municipal Waste Treatment and Disposal | 44,642,362.92 | 6,359,051.30 | | Electronic Waste Dismantling | 67,557,360.90 | -9,750,112.09 | | Environmental Engineering and Services | 40,908,544.61 | 3,576,311.30 | | Renewable Energy Utilization | 10,590,979.26 | -2,889,308.65 | | Other | 26,187,343.82 | 1,410,322.78 | | Total | 1,500,470,309.76 | -324,780,391.79 | [Finance Costs](index=42&type=section&id=Finance%20Costs) For the six months ended June 30, 2025, the Group's total finance costs were RMB 93,874,720.66, remaining largely consistent with the prior year, primarily driven by interest expenses Finance Costs Details (For the six months ended June 30, 2025) | Item | Current Period Amount (RMB) | Prior Period Amount (RMB) | | :--- | :--- | :--- | | Interest Expense | 94,743,471.81 | 99,028,016.25 | | Less: Interest Income | 2,603,195.24 | 4,522,859.03 | | Exchange Gains/Losses | 1,517,236.25 | -753,018.73 | | Bank Charges and Others | 217,207.84 | 143,120.45 | | Total | 93,874,720.66 | 93,895,258.94 | - Interest expense primarily consists of interest on borrowings from financial institutions (**RMB 78,050,482.03**) and bond interest accrued at effective interest rates (**RMB 11,231,096.43**)[63](index=63&type=chunk) [Taxation](index=43&type=section&id=Taxation) The Group's income tax expense decreased to RMB 3,460,345.21 due to lower total profit, benefiting from various tax incentives for environmental protection and high-tech enterprises [Income Tax Expense](index=43&type=section&id=Income%20Tax%20Expense) Current income tax expense for the period was RMB 3,460,345.21, a decrease from the prior period, comprising current and deferred income tax expenses Income Tax Expense Details (For the six months ended June 30, 2025) | Item | Current Period Amount (RMB) | Prior Period Amount (RMB) | | :--- | :--- | :--- | | Current Income Tax Expense | 3,749,946.01 | 4,759,422.68 | | Deferred Income Tax Expense | -289,600.80 | -485,875.90 | | Total | 3,460,345.21 | 4,273,546.78 | [Income Tax](index=43&type=section&id=Income%20Tax) Current income tax expense primarily originated from mainland China, amounting to RMB 4,337,019.00 for the current period, with adjustments for overpayments from prior years Current Income Tax Expense (For the six months ended June 30, 2025) | Item | Current Period Amount (RMB) | Prior Period Amount (RMB) | | :--- | :--- | :--- | | Current Income Tax Expense – China | 4,337,019.00 | 4,039,773.01 | | Overpayment from Prior Years – China | -587,072.99 | 719,649.67 | | Total | 3,749,946.01 | 4,759,422.68 | [Major Tax Categories and Rates](index=44&type=section&id=Major%20Tax%20Categories%20and%20Rates) The Group applies various tax categories and rates, including VAT (3%-13%), Urban Maintenance and Construction Tax (5%-7%), Corporate Income Tax (15%-25%), Education Surcharge (3%), Local Education Surcharge (2%), and Property Tax (1.2%-12%) Major Tax Categories and Rates | Tax Category | Tax Basis | Tax Rate | | :--- | :--- | :--- | | Value-Added Tax (VAT) | Taxable income calculated at 3%, 5%, 6%, 9%, 13% for output tax, and VAT payable after deducting deductible input tax | 3%, 5%, 6%, 9%, 13% | | Urban Maintenance and Construction Tax | Calculated at 5%, 7% of actual turnover tax paid | 5%, 7% | | Corporate Income Tax | Corporate income tax rates are 15%, 16.5%, 20%, 25% | 15%, 16.5%, 20%, 25% | | Education Surcharge | Calculated at 3% of actual turnover tax paid | 3% | | Local Education Surcharge | Calculated at 2% of actual turnover tax paid | 2% | | Property Tax | Property tax is 1.2% of the residual value of the property or 12% of rental income | 1.2%, 12% | - Multiple subsidiaries apply corporate income tax rates of **15%**, **20%**, or **25%**, with some enjoying a **50% reduction** policy[67](index=67&type=chunk)[71](index=71&type=chunk)[75](index=75&type=chunk) [Tax Incentives](index=49&type=section&id=Tax%20Incentives) The Group benefits from various corporate income tax and VAT incentives, including "three-year exemption, three-year half reduction" for environmental projects and VAT refunds for resource utilization - Corporate Income Tax Incentives: Eligible environmental protection, energy-saving, and water-saving projects enjoy a **"three-year exemption, three-year half reduction"** policy[77](index=77&type=chunk) - Corporate Income Tax Incentives: Income from resource comprehensive utilization is **reduced by 10%** (90% included in total income)[77](index=77&type=chunk) - VAT Incentives: **100% immediate refund** for income from power generation using landfill gas; **70% immediate refund** for waste/sludge/wastewater treatment services; **30% immediate refund** for sales of resource comprehensive utilization products[82](index=82&type=chunk) [Loss Per Share](index=53&type=section&id=Loss%20Per%20Share) For the six months ended June 30, 2025, the Group's basic loss per share widened to RMB 0.25 from RMB 0.23 in the prior year, with diluted loss per share being the same Loss Per Share (For the six months ended June 30, 2025) | Indicator | First Half 2025 (RMB) | First Half 2024 (RMB) | | :--- | :--- | :--- | | Loss Attributable to Parent Company Ordinary Equity Holders | 278,177,080.22 | 257,357,295.18 | | Weighted Average Number of Issued Shares (shares) | 1,105,255,802 | 1,105,255,802 | | Basic Loss Per Share | -0.25 | -0.23 | | Diluted Loss Per Share | -0.25 | -0.23 | [Dividends](index=53&type=section&id=Dividends) The Board of Directors does not recommend declaring an interim dividend for the six months ended June 30, 2025, consistent with the prior year - The Board of Directors does not recommend declaring an interim dividend for the six months ended June 30, 2025[85](index=85&type=chunk) [Other Receivables](index=53&type=section&id=Other%20Receivables) As of June 30, 2025, the Group's net accounts receivable were RMB 995,626,099.92, a slight decrease from the beginning of the period, with approximately 45.20% due within one year Key Other Receivables Data (As of June 30, 2025) | Item | As of June 30, 2025 (RMB) | As of December 31, 2024 (RMB) | | :--- | :--- | :--- | | Accounts Receivable | 1,134,270,514.91 | 1,157,870,341.29 | | Less: Provision for Bad Debts on Accounts Receivable | 138,644,414.99 | 134,272,710.38 | | Notes Receivable | 41,777,514.77 | 36,904,227.19 | | Receivables Financing | 14,344,976.17 | 18,055,682.89 | | Prepayments | 179,416,199.38 | 140,488,382.04 | | Other Receivables | 321,998,154.78 | 317,697,476.03 | | Less: Provision for Bad Debts on Other Receivables | 93,412,143.51 | 93,041,852.39 | | Non-current Assets Due Within One Year | 14,666,392.82 | 26,597,785.36 | | Total | 1,474,417,194.33 | 1,470,299,332.03 | Accounts Receivable Aging Analysis (As of June 30, 2025) | Aging | As of June 30, 2025 (RMB) | As of December 31, 2024 (RMB) | | :--- | :--- | :--- | | Within 1 year | 512,746,062.02 | 540,139,017.80 | | 1-2 years | 168,691,267.01 | 188,934,086.00 | | 2-3 years | 180,468,225.19 | 192,854,302.94 | | Over 3 years | 272,364,960.69 | 235,942,934.55 | | Total | 1,134,270,514.91 | 1,157,870,341.29 | [Other Payables](index=55&type=section&id=Other%20Payables) As of June 30, 2025, the Group's total accounts payable decreased to RMB 500,160,664.40, with approximately 73.39% due within 90 days Other Payables Aging Analysis (As of June 30, 2025) | Aging | As of June 30, 2025 (RMB) | As of December 31, 2024 (RMB) | | :--- | :--- | :--- | | Within 90 days | 367,098,862.85 | 479,203,580.77 | | 91 to 180 days | 17,720,105.81 | 23,751,599.77 | | 181 to 365 days | 40,511,096.30 | 34,502,763.87 | | Over 1 year | 74,830,599.44 | 77,278,936.55 | | Accounts Payable | 500,160,664.40 | 614,736,880.96 | | Advances from Customers | 935,274.72 | 963,309.66 | | Other Payables | 205,174,029.45 | 223,215,429.02 | | Total | 706,269,968.57 | 838,915,619.64 | [Net Current Assets](index=56&type=section&id=Net%20Current%20Assets) As of June 30, 2025, the Group's net current assets improved to RMB -149,680,265.62 from RMB -313,272,315.54 at the beginning of the period, though still negative Net Current Assets (As of June 30, 2025) | Indicator | As of June 30, 2025 (RMB) | As of December 31, 2024 (RMB) | | :--- | :--- | :--- | | Current Assets | 3,600,500,457.56 | 3,563,956,903.50 | | Less: Current Liabilities | 3,750,180,723.18 | 3,877,229,219.04 | | Net Current Assets | -149,680,265.62 | -313,272,315.54 | [Total Assets Less Current Liabilities](index=56&type=section&id=Total%20Assets%20Less%20Current%20Liabilities) As of June 30, 2025, the Group's total assets less current liabilities were RMB 7,275,346,624.31, a slight decrease from the beginning of the period Total Assets Less Current Liabilities (As of June 30, 2025) | Indicator | As of June 30, 2025 (RMB) | As of December 31, 2024 (RMB) | | :--- | :--- | :--- | | Total Assets | 11,025,527,347.49 | 11,278,479,415.46 | | Less: Current Liabilities | 3,750,180,723.18 | 3,877,229,219.04 | | Total Assets Less Current Liabilities | 7,275,346,624.31 | 7,401,250,196.42 | [Leases](index=57&type=section&id=Leases) As a lessor, the Group's minimum lease receivables within one year were RMB 10,894,111.22 as of June 30, 2025, while as a lessee, total cash outflow related to leases was RMB 7,112,406.89 Minimum Lease Receivables as Lessor (As of June 30, 2025) | Period | As of June 30, 2025 (RMB) | As of June 30, 2024 (RMB) | | :--- | :--- | :--- | | Within one year | 10,894,111.22 | 12,871,557.61 | | One to two years | 9,126,505.20 | 10,015,500.59 | | Total | 20,020,616.42 | 22,887,058.20 | Lease Expenses as Lessee (As of June 30, 2025) | Type | Amount (RMB) | | :--- | :--- | | Short-term lease expenses recognized in profit or loss | 4,091,997.49 | | Total cash outflow related to leases | 7,112,406.89 | [Changes in Consolidation Scope](index=58&type=section&id=Changes%20in%20Consolidation%20Scope) During the reporting period, the Group added a new subsidiary, Dongjiang Auto Resource Recycling (Hubei) Co., Ltd., established on June 3, 2025, with a 51.00% equity interest Increase in Consolidation Scope (As of June 30, 2025) | Company Name | Method of Acquisition | Date of Acquisition | Capital Contribution (RMB) | Equity Ratio (%) | | :--- | :--- | :--- | :--- | :--- | | Dongjiang Auto Resource Recycling (Hubei) Co., Ltd. | Newly established subsidiary | June 3, 2025 | 25,500,000.00 | 51.00 | [Commitments and Contingencies](index=58&type=section&id=Commitments%20and%20Contingencies) The Group has various significant commitments and contingencies, including major outsourcing contracts, capital expenditure commitments, and ongoing lawsuits related to concession agreements and frozen funds [Significant Commitments](index=58&type=section&id=Significant%20Commitments) As of June 30, 2025, the Group's total significant commitments amounted to RMB 91,640,595.22, a decrease from the beginning of the period Significant Commitments (As of June 30, 2025) | Item | Period-end Balance (RMB) | Period-beginning Balance (RMB) | | :--- | :--- | :--- | | – Major Outsourcing Contracts | 57,171,416.77 | 71,830,125.95 | | – Commitments for Construction of Long-term Assets | 23,043,041.61 | 23,002,506.21 | | – External Investment Commitments | 11,426,136.84 | 23,406,302.44 | | Total | 91,640,595.22 | 118,238,934.60 | [Contingencies](index=59&type=section&id=Contingencies) The Group faces multiple contingencies, including an administrative lawsuit against Shaoyang Municipal Government for unilateral termination of a concession agreement and a lawsuit involving frozen funds - Shaoyang Municipal Government unilaterally terminated the concession agreement for the urban domestic waste sanitary landfill, and the company has initiated administrative litigation seeking compensation for project investment and other costs[94](index=94&type=chunk)[95](index=95&type=chunk) - Subsidiary Hunan Dongjiang was sued by Jiayuan Environmental for early termination of a leachate treatment operation service contract, seeking service fees and compensation, to which Hunan Dongjiang has filed a counterclaim[97](index=97&type=chunk)[98](index=98&type=chunk) - Due to a contract dispute, a portion of the company's special fund account for raised funds, amounting to **RMB 96,317,554.88**, has been frozen, with the case still under trial[100](index=100&type=chunk) [Related Party Transactions](index=62&type=section&id=Related%20Party%20Transactions) The Group engages in related party transactions including goods and services, guarantees, and key management personnel compensation, with specific figures for the first half of 2025 [Related Party Transactions for Goods and Services](index=62&type=section&id=Related%20Party%20Transactions%20for%20Goods%20and%20Services) For the six months ended June 30, 2025, total purchases of goods and acceptance of services from related parties amounted to RMB 2,613,936.66, while sales of goods and provision of services to related parties totaled RMB 4,613,057.52 Purchases of Goods and Acceptance of Services from Related Parties (For the six months ended June 30, 2025) | Related Party | Nature of Related Party Transaction | First Half 2025 (RMB) | First Half 2024 (RMB) | | :--- | :--- | :--- | :--- | | Joint Ventures | Acceptance of Services | 818,201.04 | 8,602.31 | | Associates | Acceptance of Services | 58,129.41 | 28,308.83 | | Other Related Parties | Purchase of Goods and Acceptance of Services | 1,737,606.21 | 2,249,951.15 | | Total | | 2,613,936.66 | 2,286,862.29 | Sales of Goods and Provision of Services to Related Parties (For the six months ended June 30, 2025) | Related Party | Nature of Related Party Transaction | First Half 2025 (RMB) | First Half 2024 (RMB) | | :--- | :--- | :--- | :--- | | Joint Ventures | Trademark Usage Fees and Provision of Services | 2,589,948.73 | 4,070,798.84 | | Associates | Provision of Services | 0.00 | 365,015.09 | | Other Related Parties | Provision of Services | 2,023,108.79 | 2,320,520.37 | | Total | | 4,613,057.52 | 6,756,334.30 | [Guarantees](index=63&type=section&id=Guarantees) The Company provides guarantees for several subsidiaries and associates, with amounts ranging from RMB 44 million to RMB 246 million, and maturity dates extending as late as 2033 Guarantees (As of June 30, 2025) | Guaranteed Party | Related Party Relationship | Guaranteed Amount (RMB) | Guarantee Start Date | Guarantee End Date | Guarantee Fulfilled | | :--- | :--- | :--- | :--- | :--- | :--- | | Mianyang Dongjiang Environmental Technology Co., Ltd. | Subsidiary | 246,000,000.00 | April 1, 2021 | March 25, 2030 | No | | Foshan Fulong Environmental Technology Co., Ltd. | Subsidiary | 160,497,000.00 | March 18, 2020 | March 18, 2030 | No | | Xiamen Green Oasis Environmental Industry Co., Ltd. | Subsidiary | 80,000,000.00 | June 27, 2024 | June 27, 2027 | No | | Fujian Xingye Dongjiang Environmental Technology Co., Ltd. | Associate | 57,375,000.00 | June 30, 2021 | September 15, 2026 | No | | Dongguan Fengye Solid Waste Treatment Co., Ltd. | Associate | 44,000,000.00 | October 15, 2018 | October 15, 2033 | No | [Key Management Personnel Compensation](index=63&type=section&id=Key%20Management%20Personnel%20Compensation) For the six months ended June 30, 2025, the Group's total key management personnel compensation was RMB 3,620,453.15, an increase from the prior year Key Management Personnel Compensation (For the six months ended June 30, 2025) | Item | First Half 2025 (RMB) | First Half 2024 (RMB) | | :--- | :--- | :--- | | Key Management Personnel Compensation | 3,620,453.15 | 3,364,618.13 | [Approval of Condensed Interim Financial Information](index=63&type=section&id=Approval%20of%20Condensed%20Interim%20Financial%20Information) The Group's condensed interim financial information for the six months ended June 30, 2025, was approved by the Board of Directors on August 22, 2025 - The condensed interim financial information was approved by the Board of Directors on **August 22, 2025**[110](index=110&type=chunk) Management Discussion and Analysis [Business Review](index=64&type=section&id=Business%20Review) In the first half of 2025, hazardous waste collection volume grew over 10%, but intense competition led to reduced profit margins, and precious metal recycling revenue declined over 20% - Hazardous waste collection volume grew over **10%**, but collection prices for harmless treatment business decreased, and collection discount rates for resource utilization business increased, leading to narrower profit margins[111](index=111&type=chunk) - Revenue from precious metal recycling business decreased over **20%**, significantly impacted by metal prices[111](index=111&type=chunk) - The company achieved operating revenue of **RMB 1.50 billion**, a year-on-year decrease of **3.40%**; net loss attributable to parent company shareholders was **RMB 278 million**, an increase in loss of **8.09%** year-on-year[112](index=112&type=chunk) - New product sales surged by **272%** year-on-year, and the company entered the automotive parts remanufacturing sector by establishing a joint venture[112](index=112&type=chunk)[113](index=113&type=chunk) - Continuous increase in R&D investment, with **15 new patent applications** and **30 authorized patents** in the first half, and AI technology applied to the integrated environmental services industry chain[113](index=113&type=chunk) [Financial Review](index=66&type=section&id=Financial%20Review) The Group's total operating revenue decreased by 3.40% to RMB 1.50 billion in the first half of 2025, primarily due to reduced precious metal recycling revenue, leading to a decline in comprehensive gross profit margin and expanded net loss [Total Operating Revenue](index=66&type=section&id=Total%20Operating%20Revenue) For the six months ended June 30, 2025, the Group's total operating revenue was RMB 1,500,470,309.76, a year-on-year decrease of 3.40%, mainly due to reduced precious metal recycling revenue Total Operating Revenue and Major Business Revenue Changes (For the six months ended June 30, 2025) | Indicator | First Half 2025 (RMB) | First Half 2024 (RMB) | Year-on-year Change Rate | | :--- | :--- | :--- | :--- | | Total Operating Revenue | 1,500,470,309.76 | 1,553,358,452.26 | -3.40% | | Precious Metal Recycling and Utilization Business Revenue | 287,227,264.88 | 396,750,877.20 | -27.61% | | Industrial Waste Treatment and Disposal Operating Revenue | 396,990,856.03 | 401,533,859.48 | -1.13% | | Resource Utilization Product Sales Business Revenue | 646,104,217.38 | 564,376,350.26 | +14.48% | [Profit](index=66&type=section&id=Profit) For the six months ended June 30, 2025, the Group's comprehensive gross profit margin was 3.24%, a decrease of 1.76 percentage points, with net loss attributable to parent company shareholders widening by 8.09% Profit Indicator Changes (For the six months ended June 30, 2025) | Indicator | First Half 2025 | First Half 2024 | Change | | :--- | :--- | :--- | :--- | | Comprehensive Gross Profit Margin | 3.24% | 5.00% | -1.76 percentage points | | Net Profit Attributable to Parent Company Shareholders | -278,177,080.22 RMB | -257,357,295.18 RMB | Loss widened by 8.09% | [Selling Expenses](index=67&type=section&id=Selling%20Expenses) For the six months ended June 30, 2025, the Group's selling expenses increased by 9.25% to RMB 41,851,616.53, primarily due to increased business commissions from higher hazardous waste collection volume Selling Expenses Changes (For the six months ended June 30, 2025) | Indicator | First Half 2025 (RMB) | First Half 2024 (RMB) | Year-on-year Change Rate | | :--- | :--- | :--- | :--- | | Selling Expenses | 41,851,616.53 | 38,307,401.98 | +9.25% | | % of Total Operating Revenue | 2.79% | 2.47% | +0.32 percentage points | [Administrative Expenses](index=67&type=section&id=Administrative%20Expenses) For the six months ended June 30, 2025, the Group's administrative expenses decreased by 8.77% to RMB 170,893,774.94, primarily due to effective control measures Administrative Expenses Changes (For the six months ended June 30, 2025) | Indicator | First Half 2025 (RMB) | First Half 2024 (RMB) | Year-on-year Change Rate | | :--- | :--- | :--- | :--- | | Administrative Expenses | 170,893,774.94 | 187,314,630.91 | -8.77% | | % of Total Operating Revenue | 11.39% | 12.06% | -0.67 percentage points | [Finance Costs](index=67&type=section&id=Finance%20Costs) For the six months ended June 30, 2025, the Group's finance costs were RMB 93,874,720.66, remaining largely stable year-on-year, representing 6.26% of total operating revenue Finance Costs Changes (For the six months ended June 30, 2025) | Indicator | First Half 2025 (RMB) | First Half 2024 (RMB) | Year-on-year Change Rate | | :--- | :--- | :--- | :--- | | Finance Costs | 93,874,720.66 | 93,895,258.94 | -0.02% | | % of Total Operating Revenue | 6.26% | 6.04% | +0.22 percentage points | [Income Tax Expense](index=67&type=section&id=Income%20Tax%20Expense) For the six months ended June 30, 2025, the Group's income tax expense decreased by 19.03% to RMB 3,460,345.21, primarily due to a reduction in total profit during the reporting period Income Tax Expense Changes (For the six months ended June 30, 2025) | Indicator | First Half 2025 (RMB) | First Half 2024 (RMB) | Year-on-year Change Rate | | :--- | :--- | :--- | :--- | | Income Tax Expense | 3,460,345.21 | 4,273,546.78 | -19.03% | | % of Total Profit | -1.07% | -1.36% | +0.29 percentage points | [Financial Position and Liquidity](index=68&type=section&id=Financial%20Position%20and%20Liquidity) As of June 30, 2025, the Group's net current assets improved to RMB -149,680,265.62, with cash and cash equivalents of approximately RMB 1.05 billion, and the Board considers the financial position solid Key Financial Position and Liquidity Data (As of June 30, 2025) | Indicator | As of June 30, 2025 (RMB) | As of December 31, 2024 (RMB) | | :--- | :--- | :--- | | Net Current Assets | -149,680,265.62 | -313,272,315.54 | | Cash and Cash Equivalents | 1,051,200,772.35 | 1,016,307,175.22 | | Total Liabilities | 7,200,623,387.22 | 7,127,589,598.80 | | Debt-to-Asset Ratio | 65.31% | 63.20% | | Bank Loans | 4,827,608,335.70 | 5,088,018,406.13 | - Management believes the Group has a **solid financial position and sufficient liquidity** to meet its operational and future business development needs[121](index=121&type=chunk) [Significant Investments, Acquisitions, and Disposals](index=68&type=section&id=Significant%20Investments%2C%20Acquisitions%2C%20and%20Disposals) During the reporting period, the Group had no significant investments, acquisitions, or disposals of subsidiaries, associates, or joint ventures - During the reporting period, the Group had **no significant investments, acquisitions, or disposals** of subsidiaries, associates, or joint ventures[122](index=122&type=chunk) [Future Major Investment or Capital Asset Plans](index=68&type=section&id=Future%20Major%20Investment%20or%20Capital%20Asset%20Plans) Other than those disclosed in this report, the Group has no other future major investment or capital asset plans - Other than those disclosed in this report, the Group has **no other future major investment or capital asset plans**[123](index=123&type=chunk) [Interest Rate and Foreign Exchange Risk](index=69&type=section&id=Interest%20Rate%20and%20Foreign%20Exchange%20Risk) The Group faces fair value interest rate risk from fixed-rate bank loans and cash flow interest rate risk from floating-rate bank loans, and manages foreign exchange risk through forward foreign exchange contracts - The Group is exposed to **fair value interest rate risk** from fixed-rate bank loans and **cash flow interest rate risk** from floating-rate bank loans, currently without an interest rate hedging policy but under monitoring[124](index=124&type=chunk) - Foreign exchange risk primarily arises from assets and liabilities denominated in **HKD and USD**, and the company has adopted forward foreign exchange contracts to mitigate foreign exchange risk[125](index=125&type=chunk) [Contingent Liabilities](index=70&type=section&id=Contingent%20Liabilities) Other than the contingent matters disclosed in Note 15 to the financial statements, the Group had no other significant contingent liabilities for the six months ended June 30, 2025 - Other than the contingent matters disclosed in Note 15 to the financial statements, the Group had **no other significant contingent liabilities**[126](index=126&type=chunk) [Employee Information and Remuneration Policy](index=70&type=section&id=Employee%20Information%20and%20Remuneration%20Policy) As of June 30, 2025, the Group had 3,904 full-time employees, with total staff costs of approximately RMB 275 million, and provides continuous training and various benefits Employee Information and Remuneration (As of June 30, 2025) | Indicator | As of June 30, 2025 | As of December 31, 2024 | | :--- | :--- | :--- | | Number of Full-time Employees | 3,904 | 3,984 | | Total Staff Costs (For the six months ended June 30, RMB) | 274,589,998.00 | 278,693,042.50 | - The Group provides employees with **continuous training, a remuneration package, and a range of additional benefits**, including retirement benefits, housing allowances, and medical insurance[127](index=127&type=chunk) Other Information [Events During the Period](index=71&type=section&id=Events%20During%20the%20Period) During the reporting period, the Company fulfilled guarantee obligations for subsidiaries, signed a new financial services agreement, issued the first tranche of 2025 medium-term notes, and changed its H-share registrar [Fulfillment of Guarantee Obligations](index=71&type=section&id=Fulfillment%20of%20Guarantee%20Obligations) The Company fulfilled guarantee obligations for subsidiary Mianyang Dongjiang's loan to Postal Savings Bank, totaling RMB 21.805 million, and for subsidiary Tangshan Wanders' loan to HSBC, totaling RMB 111.0977 million[128](index=128&type=chunk)[129](index=129&type=chunk) [New Financial Services Agreement](index=72&type=section&id=New%20Financial%20Services%20Agreement) The Company signed a new financial services agreement with Guang Sheng Finance on December 24, 2024, which was approved by independent shareholders on April 23, 2025[131](index=131&type=chunk) [Issuance of First Tranche of 2025 Medium-Term Notes](index=72&type=section&id=Issuance%20of%20First%20Tranche%20of%202025%20Medium-Term%20Notes) On March 27, 2025, the Company successfully issued the first tranche of 2025 medium-term notes, amounting to RMB 400 million with an annual interest rate of 2.66%[132](index=132&type=chunk) [Change of H-share Registrar](index=72&type=section&id=Change%20of%20H-share%20Registrar) Effective July 27, 2025, the Company's H-share registrar has been changed to Tricor Investor Services Limited[133](index=133&type=chunk) [Use of Proceeds from Non-public Issuance of A-shares](index=73&type=section&id=Use%20of%20Proceeds%20from%20Non-public%20Issuance%20of%20A-shares) The net proceeds from the non-public issuance of A-shares were approximately RMB 1.194 billion, with RMB 8.95 million utilized as of June 30, 2025, and some projects extended Use of Proceeds from Non-public Issuance of A-shares (As of June 30, 2025) | Proposed Use of Proceeds | Allocation of Net Proceeds (RMB million) | Net Proceeds Unutilized as of Jan 1, 2025 (RMB million) | Net Proceeds Utilized for the six months ended June 30, 2025 (RMB million) | Net Proceeds Unutilized as of June 30, 2025 (RMB million) | Expected Timeline | | :--- | :--- | :--- | :--- | :--- | :--- | | Construction of Jieyang Grand Nanhai Petrochemical Industrial Zone Green Circular Center Phase I Project | 410.00 | 271.52 | 7.26 | 264.26 | On or before December 2025 | | Expansion of Wastewater Treatment Plant (Phase II) in Jiangling County, Jingzhou City, Hubei Province | 165.00 | 93.99 | – | 93.99 | On or before December 2025 | | Digital Intelligence Construction Project | 184.31 | 160.25 | 0.09 | 160.16 | On or before December 2028 | | Hazardous Waste Treatment Renovation and Upgrade Project | 95.00 | 64.88 | 1.60 | 63.28 | On or before December 2028 | | Supplement General Working Capital | 340.00 | – | – | – | – | | Total | 1,194.31 | 590.64 | 8.95 | 581.69 | | - The company has **extended the timeline for some of the raised fund investment projects**[136](index=136&type=chunk) [Directors', Supervisors', and Chief Executive's Interests and Short Positions in Shares, Underlying Shares, and Debentures](index=74&type=section&id=Directors%27%2C%20Supervisors%27%2C%20and%20Chief%20Executive%27s%20Interests%20and%20Short%20Positions%20in%20Shares%2C%20Underlying%20Shares%2C%20and%20Debentures) As of June 30, 2025, no directors, supervisors, or chief executives held disclosable interests or short positions in the Company's or its associated corporations' shares, underlying shares, or debentures - As of June 30, 2025, no directors, supervisors, or chief executives of the Company held any disclosable interests or short positions in the shares, underlying shares, or debentures of the Company or its associated corporations[137](index=137&type=chunk) [Major Shareholders' Interests and Short Positions in Shares and Underlying Shares](index=75&type=section&id=Major%20Shareholders%27%20Interests%20and%20Short%20Positions%20in%20Shares%20and%20Underlying%20Shares) As of June 30, 2025, Guang Sheng Holdings Group, Baowu Environmental Technology, and Huihong Group were major shareholders, holding interests in the Company's A-shares and H-shares Major Shareholders' Interests and Short Positions in Shares and Underlying Shares (As of June 30, 2025) | Shareholder Name | Nature of Interest | Share Class | Number of Shares (shares) | Long/Short Position | Approx. % of Relevant Share Class | % of Company's Issued Shares | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Guang Sheng Holdings Group | Beneficial Owner | A-shares | 266,279,028 | Long Position | 29.42% | 24.09% | | | Interest in Controlled Corporation | H-shares | 25,179,200 | Long Position | 12.58% | 2.28% | | Baowu Environmental Technology | Beneficial Owner | A-shares | 86,629,001 | Long Position | 9.57% | 7.84% | | | Interest in Controlled Corporation | A-shares | 37,664,783 | Long Position | 4.16% | 4.16% | | Huihong Group | Beneficial Owner | A-shares | 50,087,669 | Long Position | 5.53% | 4.53% | | | Interest in Controlled Corporation | A-shares | 25,995,038 | Long Position | 2.87% | 2.35% | | | Interest in Controlled Corporation | H-shares | 18,204,800 | Long Position | 9.10% | 1.65% | [Share Schemes](index=77&type=section&id=Share%20Schemes) During the reporting period, the Group did not implement any share schemes as defined by Chapter 17 of the Listing Rules - During the reporting period, the Group did not implement any share schemes as defined by Chapter 17 of the Listing Rules[142](index=142&type=chunk) [Competing Interests or Businesses](index=77&type=section&id=Competing%20Interests%20or%20Businesses) During the reporting period, no directors, supervisors, chief executives, or major shareholders and their respective associates held interests in businesses directly or indirectly competing with the Group's business - During the reporting period, no directors, supervisors, chief executives, or major shareholders and their associates held interests in businesses directly or indirectly competing with the Group's business[143](index=143&type=chunk) [Audit and Risk Management Committee and Review of Interim Results](index=78&type=section&id=Audit%20and%20Risk%20Management%20Committee%20and%20Review%20of%20Interim%20Results) The Company's Audit and Risk Management Committee, comprising Mr. Li Guodong (Chairman), Mr. Li Jinhui, and Mr. Wang Shi, reviewed the Group's interim results and financial statements for the six months ended June 30, 2025 - The Audit and Risk Management Committee is responsible for reviewing and overseeing the Group's financial reporting procedures, risk management, and internal audit functions[144](index=144&type=chunk) - The Committee has reviewed the Group's interim results and financial statements for the six months ended June 30, 2025, but these statements have not been audited by the Company's auditors[144](index=144&type=chunk) [Purchase, Sale, or Redemption of Listed Securities](index=78&type=section&id=Purchase%2C%20Sale%2C%20or%20Redemption%20of%20Listed%20Securities) During the reporting period, neither the Company nor any of its subsidiaries repurchased, sold, or redeemed any of the Company's listed securities - During the reporting period, neither the Company nor any of its subsidiaries repurchased, sold, or redeemed any of the Company's listed securities[145](index=145&type=chunk) [Interim Dividends](index=78&type=section&id=Interim%20Dividends) The Board of Directors does not recommend