Financial Performance - The revenue for Overseas Chinese Town (Asia) Holdings Limited for the six months ended June 30, 2025, was RMB 260,707,000, a decrease of 56.4% compared to RMB 598,479,000 for the same period in 2024[4]. - The gross profit for the same period was RMB 46,495,000, down 58.3% from RMB 111,422,000 year-on-year[4]. - The operating loss for the six months was RMB 25,803,000, compared to an operating profit of RMB 275,520,000 in the previous year[4]. - The net loss for the period was RMB 224,908,000, compared to a net loss of RMB 207,140,000 in the same period last year, representing an increase in loss of 8.6%[6]. - The company reported a basic loss per share of RMB 0.256, an improvement from RMB 0.296 in the previous year[4]. - The group reported a loss of RMB 89,019,000 for the six months ended June 30, 2025, compared to a loss of RMB 10,174,000 in the same period of 2024[23]. - The company recorded a loss attributable to equity holders of approximately RMB 191.35 million for the first half of 2025, compared to a loss of RMB 221.22 million in the same period of 2024[48]. Revenue Breakdown - Revenue from property sales for the six months ended June 30, 2025, was RMB 234,845,000, a decrease from RMB 516,567,000 in the same period of 2024, representing a decline of approximately 54.5%[18]. - Hotel revenue for the six months ended June 30, 2025, was RMB 26,857,000, compared to no revenue in the same period of 2024[18]. - Fund management fee income increased to RMB 3,209,000 for the six months ended June 30, 2025, from RMB 1,335,000 in the same period of 2024, reflecting a growth of approximately 140.6%[18]. - Total revenue from external customers for the six months ended June 30, 2025, was RMB 260,707,000, down from RMB 598,479,000 in 2024, indicating a decrease of about 56.4%[25]. - For the first half of 2025, the company reported a revenue of approximately RMB 261 million, a decrease of about 56.4% compared to the same period last year, primarily due to the absence of revenue from the Shanghai project sold in October last year[40]. Assets and Liabilities - Total assets as of June 30, 2025, were RMB 8,053,283,000, slightly down from RMB 8,059,985,000 at the end of 2024[9]. - The company's total liabilities decreased to RMB 5,716,919,000 from RMB 5,804,239,000 at the end of 2024[11]. - The net asset value of the company was RMB 1,066,463,000, down from RMB 1,196,930,000 at the end of 2024[13]. - Total assets as of June 30, 2025, were RMB 11,528,237,000, a slight decrease from RMB 11,597,151,000 as of December 31, 2024[23]. - Total liabilities as of June 30, 2025, were RMB 10,461,774,000, compared to RMB 10,400,221,000 as of December 31, 2024, showing an increase of approximately 0.6%[23]. Cash Flow and Liquidity - The company’s cash and cash equivalents increased to RMB 143,729,000 from RMB 92,823,000 at the end of 2024, indicating improved liquidity[9]. - As of June 30, 2025, accounts receivable from third parties amounted to RMB 125.43 million, a significant increase from RMB 44.57 million as of December 31, 2024[33]. - Cash and cash equivalents, including bank deposits, totaled RMB 143.73 million, up from RMB 92.82 million at the end of December 2024[34]. - The total outstanding bank and other loans as of June 30, 2025, was approximately RMB 1.627 billion, down from RMB 1.851 billion as of December 31, 2024[54]. Cost Management and Strategy - The company maintained a focus on cost control and cash flow improvement strategies amid a challenging economic environment[40]. - The group plans to focus on "de-stocking, asset management, and risk prevention" in the second half of 2025, optimizing cash flow through strategic asset disposal and fine-tuned operations[58]. - The group aims to accelerate the disposal of existing real estate projects and enhance cash recovery by leveraging policy opportunities related to land acquisition and adjustment[58]. - The group will continue to strengthen risk monitoring and management across all business processes to enhance its resilience and sustainable development capabilities[58]. Other Financial Metrics - The gross profit margin for the company was approximately 17.8% in the first half of 2025, down 0.8 percentage points from 18.6% in the same period of 2024[46]. - The company's sales expenses increased by approximately 87.7% to RMB 33.75 million in the first half of 2025, compared to RMB 17.98 million in the same period of 2024[49]. - Interest expenses for the six months ended June 30, 2025, totaled RMB 181,237,000, down from RMB 240,181,000 in the same period of 2024, representing a decrease of about 24.5%[26]. - Interest expenses decreased by approximately 24.5% to RMB 181.24 million in the first half of 2025, down from RMB 240.18 million in the same period of 2024[50]. - The capital debt ratio as of June 30, 2025, was approximately 70.65%, a decrease of 0.13 percentage points from 70.78% as of December 31, 2024[54]. Corporate Governance - The group has appointed a new auditor, Hong Kong Shinewing Certified Public Accountants Limited, effective after the annual general meeting on June 27, 2025[59]. - The company did not redeem, purchase, or sell any listed securities during the reporting period[64]. - The mid-term report will be published on the company's website and the Hong Kong Stock Exchange website in due course[65]. - Certain figures in the announcement have been rounded[66]. - The announcement contains forward-looking statements based on various assumptions and current estimates, which may involve inherent risks and uncertainties[66].

Financial Review 財務回顧 RESULTS Revenue Breakdown by segment 業績 收益 按分部劃分 | | | | | For the six months ended 30 June | | | | --- | --- | --- | --- | --- | --- | --- | | | | | | 截至六月三十日止六個月 | | | | | | 2025 | | 2024 | | Changes | | | | 二零二五年 | | 二零二四年 | | 變幅 | | | | HK$'000 | % of revenue | HK$'000 | % of revenue | % | | | | 千港元 | 佔收益百分比 | 千港元 | 佔收益百分比 | 百分比 | | Clarks | Clarks | 4,148,485 | 86.3% | 4,378,465 | 85.9% | -5.3% | | Bossini | 堡獅龍 | 140,329 | 2.9% | 267,241 | 5.2% | -47.5% | | Other consumable busin ...

[Company Information](index=5&type=section&id=%E5%85%AC%E5%8F%B8%E8%B3%87%E6%96%99) This section outlines the company's board and committee composition, including recent changes, and its registered and principal office details [Board and Committee Composition](index=5&type=section&id=%E8%91%A3%E4%BA%8B%E6%9C%83%E5%8F%8A%E5%A7%94%E5%93%A1%E6%9C%83%E7%B5%84%E6%88%90) The Board of Directors comprises executive, non-executive, and independent non-executive directors, with committee membership changes effective January 6, 2025 - Board members include Executive Directors Mr. He Dingding (CEO) and Mr. Lu Tianshun[11](index=11&type=chunk) - The Audit Committee Chairman changed from Ms. Tam Mei Chu to Mr. Tang Chiu Ming, while Ms. Chan Wai Ki and Mr. Wong Chun Hung remained Chairpersons of the Remuneration and Nomination and Corporate Governance Committees, respectively, all effective January 6, 2025[11](index=11&type=chunk) [Registered and Principal Offices](index=6&type=section&id=%E8%A8%BB%E5%86%8A%E5%8F%8A%E4%B8%BB%E8%A6%81%E8%BE%A6%E4%BA%8B%E8%99%95) The company's registered office is in the Cayman Islands, with its principal place of business in Hong Kong, stock code 8237, and a corporate website - The company's registered office is located at Cricket Square, Cayman Islands[12](index=12&type=chunk) - The principal place of business in Hong Kong is on the 16th Floor, Kai Tak Commercial Building, 317 & 319 Des Voeux Road Central, Sheung Wan, Hong Kong[12](index=12&type=chunk) - The company's stock code is **8237**, and its website is www.irasia.com/listco/hk/linkholdings[12](index=12&type=chunk) [Financial Highlights](index=7&type=section&id=%E8%B2%A1%E5%8B%99%E6%91%98%E8%A6%81) This section summarizes the Group's operating results, showing a significant decline in hotel revenue and increased net loss attributable to owners [Overview of Operating Results](index=7&type=section&id=%E7%B6%93%E7%87%9F%E6%A5%AD%E7%B8%BE%E6%A6%82%E8%A6%BD) The Group's hotel operating revenue significantly decreased by **38.4%**, leading to a **21.5%** increase in loss attributable to owners and expanded basic loss per share Key Financial Metrics Comparison (For the six months ended June 30) | Metric | 2025 (HKD) | 2024 (HKD) | Change (%) | | :--- | :--- | :--- | :--- | | Hotel Operating Revenue | 13,590,000 | 22,067,000 | -38.4% | | Loss Attributable to Owners of the Company | 42,206,000 | 34,736,000 | +21.5% | | Basic Loss Per Share | 24.86 HK cents | 20.74 HK cents (Restated) | +19.8% | [Condensed Consolidated Statement of Comprehensive Income](index=8&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) This section analyzes the Group's comprehensive income, showing significant revenue decline, reduced gross profit, and increased losses for the period [Analysis of Comprehensive Income Statement](index=8&type=section&id=%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8%E5%88%86%E6%9E%90) The Group experienced a significant revenue decline, leading to an over **80%** reduction in gross profit and increased losses, driven by lower hotel revenue and exchange differences Condensed Consolidated Statement of Comprehensive Income (For the six months ended June 30) | Metric | 2025 (HKD '000) | 2024 (HKD '000) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 13,590 | 22,067 | -38.4% | | Cost of Sales | (11,739) | (11,316) | +3.7% | | Gross Profit | 1,851 | 10,751 | -82.8% | | Loss Before Income Tax | (41,192) | (33,267) | +23.8% | | Loss for the Period | (42,226) | (34,799) | +21.3% | | Exchange Differences Arising from Translation of Foreign Operations | (20,856) | (13,496) | +54.5% | | Total Comprehensive Expenses for the Period | (63,082) | (48,295) | +30.6% | | Loss for the Period Attributable to Owners of the Company | (42,206) | (34,736) | +21.5% | | Basic Loss Per Share (HK cents) | (24.86) | (20.74) | +19.8% | - Loss for the period was primarily due to decreased hotel operating revenue and increased administrative expenses and finance costs[15](index=15&type=chunk) - Exchange differences arising from the translation of foreign operations led to a significant increase in other comprehensive expenses[15](index=15&type=chunk) [Condensed Consolidated Statement of Financial Position](index=10&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) This section analyzes the Group's financial position, revealing increased non-current assets, decreased current assets, and expanded net liabilities and owner's deficit [Analysis of Financial Position](index=10&type=section&id=%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E5%88%86%E6%9E%90) As of June 30, 2025, the Group's financial position deteriorated with increased non-current assets, decreased current assets, and significantly expanded net liabilities and owner's deficit Condensed Consolidated Statement of Financial Position (As at June 30, 2025) | Metric | June 30, 2025 (HKD '000) | December 31, 2024 (HKD '000) | Change (%) | | :--- | :--- | :--- | :--- | | Total Non-Current Assets | 480,809 | 457,304 | +5.1% | | Total Current Assets | 29,973 | 39,226 | -23.6% | | Total Current Liabilities | 609,836 | 538,826 | +13.2% | | Net Current Liabilities | (579,863) | (499,600) | +16.1% | | Net Liabilities | (140,425) | (81,284) | +72.8% | | Equity Attributable to Owners of the Company | (137,360) | (78,270) | +75.5% | - Net current liabilities significantly increased, primarily due to a rise in interest-bearing bank and other borrowings[17](index=17&type=chunk) - Equity attributable to owners of the company expanded from a deficit to **HKD 137,360 thousand**, indicating a continuous deterioration in financial position[18](index=18&type=chunk) [Condensed Consolidated Statement of Changes in Equity](index=12&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%AC%8A%E7%9B%8A%E8%AE%8A%E5%8B%95%E8%A1%A8) This section analyzes changes in the Group's equity, revealing expanded accumulated losses and negative translation reserves, leading to a deteriorating owner's equity position [Analysis of Changes in Equity](index=12&type=section&id=%E6%AC%8A%E7%9B%8A%E8%AE%8A%E5%8B%95%E5%88%86%E6%9E%90) The Group's accumulated losses and negative translation reserves significantly expanded, leading to a deteriorating equity position for owners, despite share capital increases from placements Condensed Consolidated Statement of Changes in Equity (For the six months ended June 30, 2025) | Metric | June 30, 2025 (HKD '000) | January 1, 2024 (HKD '000) | | :--- | :--- | :--- | | Share Capital | 5,026 | 4,188 | | Share Premium | 366,455 | 363,352 | | Translation Reserve | (105,776) | (79,560) | | Accumulated Losses | (478,735) | (301,415) | | Equity Attributable to Owners of the Company | (137,360) | 71,204 | | Total Deficit | (140,425) | 72,603 | - Loss for the period of **HKD 42,206 thousand** and exchange differences of **HKD 20,825 thousand** arising from the translation of foreign operations were key factors in the significant reduction of equity[19](index=19&type=chunk) - Share issuance through placement brought an increase of **HKD 3,941 thousand** in share capital and share premium, but failed to reverse the overall trend of expanding deficit[19](index=19&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=14&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E7%8F%BE%E9%87%91%E6%B5%81%E9%87%8F%E8%A1%A8) This section analyzes the Group's cash flows, revealing continued operating cash outflows and a significant reduction in overall cash and cash equivalents [Analysis of Cash Flows](index=14&type=section&id=%E7%8F%BE%E9%87%91%E6%B5%81%E9%87%8F%E5%88%86%E6%9E%90) The Group's operating activities continued to generate cash outflows, leading to a significant decrease in overall cash and cash equivalents despite financing inflows Condensed Consolidated Statement of Cash Flows (For the six months ended June 30) | Metric | 2025 (HKD '000) | 2024 (HKD '000) | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | (22,258) | (20,686) | | Net Cash Used in Investing Activities | (10) | (540) | | Net Cash From Financing Activities | 7,468 | 18,505 | | Net Decrease in Cash and Cash Equivalents | (14,800) | (2,721) | | Cash and Cash Equivalents at End of Period | 5,825 | 22,400 | - Net cash used in operating activities increased year-on-year, indicating intensified cash consumption by core operations[21](index=21&type=chunk) - Net cash from financing activities significantly decreased year-on-year, reflecting potential impacts on external financing capabilities[21](index=21&type=chunk) [Notes to the Condensed Consolidated Interim Financial Statements](index=15&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E4%B8%AD%E6%9C%9F%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8%E9%99%84%E8%A8%BB) This section provides detailed notes on the interim financial statements, including company information, accounting policies, revenue, expenses, tax, loss per share, dividends, and receivables/payables [Company Information](index=15&type=section&id=%E5%85%AC%E5%8F%B8%E8%B3%87%E6%96%99) The Company, incorporated in the Cayman Islands, primarily engages in investment holding, with subsidiaries in hotel ownership, services, distressed debt, and property investment - The Company was incorporated as an exempted company in the Cayman Islands on **May 15, 2012**[22](index=22&type=chunk) - Its principal business is investment holding, with subsidiaries primarily engaged in hotel ownership, hotel services, distressed debt asset management, and property investment[22](index=22&type=chunk) [Basis of Preparation and Principal Accounting Policies](index=15&type=section&id=%E7%B7%A8%E8%A3%BD%E5%9F%BA%E6%BA%96%E5%8F%8A%E4%B8%BB%E8%A6%81%E6%9C%83%E8%A8%88%E6%94%BF%E7%AD%96) Interim financial statements adhere to IFRS and GEM Listing Rules, using consistent accounting policies, with no significant impact from newly adopted standards - The interim financial statements are prepared in accordance with International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board and the applicable disclosure requirements of the GEM Listing Rules[23](index=23&type=chunk) - The accounting policies and methods of computation used in preparing these interim financial statements are consistent with those used in the 2024 audited consolidated financial statements[23](index=23&type=chunk) - The adoption of all new and revised standards, amendments, and interpretations had no significant impact on the Group's accounting policies or the amounts reported for the current and prior periods[24](index=24&type=chunk) [Revenue and Loss from Distressed Debt Assets Accounted for at Amortized Cost](index=17&type=section&id=%E6%8C%89%E6%94%A4%E9%8A%B7%E6%88%90%E6%9C%AC%E5%88%97%E8%B3%A3%E7%9A%84%E4%B8%8D%E8%89%AF%E5%82%B5%E5%8B%99%E8%B3%87%E7%94%A2%E6%94%B6%E5%85%A5%E5%8F%8A%E8%99%A7%E6%90%8D) The Group's revenue primarily from hotel operations, with hotel room revenue significantly declining; distressed debt assets recorded no losses, and revenue mainly from Singapore and Japan Revenue Analysis (For the six months ended June 30) | Revenue Source | 2025 (HKD '000) | 2024 (HKD '000) | Change (%) | | :--- | :--- | :--- | :--- | | Hotel Room | 8,756 | 16,117 | -45.7% | | Food & Beverage | 2,696 | 3,213 | -16.1% | | Rental Income from Hotel Properties | 1,465 | 2,364 | -38.0% | | Other Hotel Income | 673 | 373 | +80.4% | | **Total Hotel Operating Revenue** | **13,590** | **22,067** | **-38.4%** | | Distressed Debt Asset Impairment Loss | – | (19) | -100% | Revenue by Geographical Segment (For the six months ended June 30) | Principal Geographical Market | 2025 (HKD '000) | 2024 (HKD '000) | | :--- | :--- | :--- | | Singapore | 8,937 | 15,967 | | Japan | 4,653 | 6,100 | | **Total** | **13,590** | **22,067** | [Loss Before Income Tax Expense](index=18&type=section&id=%E9%99%A4%E6%89%80%E5%BE%97%E7%A8%85%E9%96%8B%E6%94%AF%E5%89%8D%E8%99%A7%E6%90%8D) The Group's loss before income tax was primarily influenced by staff costs, depreciation of property, plant and equipment, and Singapore property tax Key Expense Items (For the six months ended June 30) | Expense Item | 2025 (HKD '000) | 2024 (HKD '000) | | :--- | :--- | :--- | | Staff Costs | 6,189 | 6,365 | | Depreciation of Property, Plant and Equipment | 5,584 | 4,767 | | Depreciation of Right-of-Use Assets | 1,298 | 1,292 | | Singapore Property Tax | 962 | 1,668 | [Income Tax Expense](index=19&type=section&id=%E6%89%80%E5%BE%97%E7%A8%85%E9%96%8B%E6%94%AF) The Group's income tax expense primarily from Singapore at **17%**, with exemptions for HK, Cayman, BVI entities, and local rates for Indonesia, China, and Japan subsidiaries - There was no assessable profit in Hong Kong, hence no Hong Kong profits tax provision[28](index=28&type=chunk) - Singapore corporate income tax is provided at a **17%** rate, being the sole component of income tax expense for the period, amounting to **HKD 1,034 thousand** in 2025 and **HKD 1,532 thousand** in 2024[29](index=29&type=chunk)[30](index=30&type=chunk) - Indonesian subsidiaries are taxed at **25%**, Chinese subsidiaries at **25%** corporate income tax, and Japanese subsidiaries at an effective statutory income tax rate of approximately **33.59%**[29](index=29&type=chunk) [Loss Per Share](index=20&type=section&id=%E6%AF%8F%E8%82%A1%E8%99%A7%E6%90%8D) Basic and diluted loss per share attributable to owners increased, with diluted loss per share matching basic loss due to anti-dilutive effects Loss Per Share (For the six months ended June 30) | Metric | 2025 (HK cents) | 2024 (HK cents) | | :--- | :--- | :--- | | Basic Loss Per Share | (24.86) | (20.74) | | Diluted Loss Per Share | (24.86) | (20.74) | - Diluted loss per share was the same as basic loss per share due to the anti-dilutive effect of potential dilutive ordinary shares on basic loss per share[32](index=32&type=chunk) - The weighted average number of ordinary shares used in calculating basic and diluted loss per share has been adjusted for the share consolidation effective **March 5, 2025**[31](index=31&type=chunk) [Dividends](index=21&type=section&id=%E8%82%A1%E6%81%AF) The Board does not recommend any dividend payment for the six months ended June 30, 2025 - The Directors do not recommend the payment of any dividend for the six months ended **June 30, 2025** (2024: nil)[33](index=33&type=chunk) [Trade and Other Receivables](index=21&type=section&id=%E8%B2%BF%E6%98%93%E5%8F%8A%E5%85%B6%E4%BB%96%E6%87%89%E6%94%B6%E6%AC%BE%E9%A0%85) The Group's trade receivables significantly decreased, with a **30-day** credit period and no major credit concentration risk, under strict management control - As at **June 30, 2025**, trade receivables were approximately **HKD 809,000** (December 31, 2024: approximately **HKD 2,569,000**), representing a significant decrease[34](index=34&type=chunk) - Trade receivables generally have a **30-day** credit period, with no significant credit concentration risk[34](index=34&type=chunk) Trade Receivables Ageing Analysis (As at the end of the reporting period) | Ageing | June 30, 2025 (HKD '000) | December 31, 2024 (HKD '000) | | :--- | :--- | :--- | | Current to 30 days | 749 | 1,881 | | 31 to 60 days | 55 | 668 | | 61 to 90 days | – | 7 | | Over 90 days | 5 | 13 | | **Total** | **809** | **2,569** | [Trade and Other Payables](index=22&type=section&id=%E8%B2%BF%E6%98%93%E5%8F%8A%E5%85%B6%E4%BB%96%E6%87%89%E4%BB%98%E6%AC%BE%E9%A0%85) The Group's trade payables increased with a **30-day** credit period, and both current and non-current construction payables also rose - As at **June 30, 2025**, trade payables were approximately **HKD 1,557,000** (December 31, 2024: approximately **HKD 957,000**), representing an increase[36](index=36&type=chunk) - The Group typically obtains a maximum **30-day** credit period from its suppliers, and trade payables are interest-free[36](index=36&type=chunk) Trade Payables Ageing Analysis (As at the end of the reporting period) | Ageing | June 30, 2025 (HKD '000) | December 31, 2024 (HKD '000) | | :--- | :--- | :--- | | Current to 30 days | 1,118 | 473 | | 31 to 60 days | 220 | 246 | | 61 to 90 days | 124 | 146 | | Over 90 days | 95 | 92 | | **Total** | **1,557** | **957** | - Other payables include amounts due for construction work, with current portion of approximately **HKD 42,118,000** and non-current portion of approximately **HKD 7,601,000**, both showing increases[36](index=36&type=chunk) [Management Discussion and Analysis](index=23&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%A4%E8%A8%8E%E8%AB%96%E5%8F%8A%E5%88%86%E6%9E%90) This section reviews the Group's business and financial performance, covering hotel operations, asset management, liquidity, capital structure, and corporate governance [Business Review](index=23&type=section&id=%E6%A5%AD%E5%8B%99%E5%9B%9E%E9%A1%A7) The Group operates hotels in Singapore and Japan, and distressed debt assets; Singapore hotel renovations expanded, Japan hotel underperformed due to financial and earthquake issues, and Bintan development remains suspended - The Group continues to focus on operating its hotel businesses in Singapore and Japan, and managing distressed debt assets[37](index=37&type=chunk) - Singapore's Hotel Grand Central experienced a further reduction in available rooms due to expanded renovation and maintenance works, with completion expected by **end-2025**[37](index=37&type=chunk) - Japan's Hanatsubaki Onsen Hotel business underperformed due to financial and human resource constraints and the Noto Peninsula earthquake, leading the Group to consider exploring sale options to alleviate liquidity pressure[37](index=37&type=chunk) - The development of Bintan Resort Hotel in Indonesia has been suspended since early **2020** due to the COVID-19 pandemic, and the Group is considering seeking potential investors for capital injection[37](index=37&type=chunk) [Financial Review](index=23&type=section&id=%E8%B2%A1%E5%8B%99%E5%9B%9E%E9%A1%A7) The Group's total hotel operating revenue decreased by **38.4%** due to renovations, leading to a **21.5%** increase in loss attributable to owners and expanded basic loss per share - Total hotel operating revenue was approximately **HKD 13,590,000**, a decrease of approximately **38.4%** year-on-year, mainly due to a further reduction in available rooms from expanded renovation and maintenance works at Hotel Grand Central[38](index=38&type=chunk) - Loss attributable to owners of the company was approximately **HKD 42,206,000**, an increase of approximately **21.5%** year-on-year[39](index=39&type=chunk) - Basic loss per share was approximately **24.86 HK cents** (2024: approximately **20.74 HK cents** (restated))[39](index=39&type=chunk) [Hotel Operations](index=24&type=section&id=%E9%85%92%E5%BA%97%E7%B6%93%E7%87%9F) Room revenue, **64.4%** of total hotel operating revenue, significantly declined; Hotel Grand Central saw improved occupancy but lower average room rate and RevPAR, with F&B and rental income also decreasing - Room revenue was approximately **HKD 8,756,000**, accounting for approximately **64.4%** of the Group's total hotel operating revenue, primarily from Hotel Grand Central Singapore and the Japan Onsen Hotel[40](index=40&type=chunk) Hotel Grand Central Key Operating Metrics (For the six months ended June 30) | Metric | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | Total Available Room Nights | 16,290 | 26,754 | -39.1% | | Occupancy Rate | 57% | 47% | +10 ppts | | Average Room Rate (HKD) | 619.5 | 835.3 | -25.9% | | Revenue Per Available Room (HKD) | 354.7 | 391.2 | -9.4% | - Food and beverage revenue was approximately **HKD 2,696,000**, accounting for approximately **19.8%** of total hotel operating revenue[40](index=40&type=chunk) - Rental income from hotel tenants was approximately **HKD 1,465,000**[41](index=41&type=chunk) [Bintan Assets](index=25&type=section&id=%E6%B0%91%E4%B8%B9%E8%B3%87%E7%94%A2) Bintan Resort Hotel development in Indonesia has been suspended since early **2020** due to financial constraints, with the Group seeking investors for completion or acquisition - The phase one construction contract for the initial Bintan development plan was signed in **September 2016**, but project progress has been delayed since **2020** due to tightened financial resources and the COVID-19 pandemic[42](index=42&type=chunk) - The Group is currently considering seeking potential investors for capital injection to complete or fully acquire the Bintan assets[42](index=42&type=chunk) [Distressed Debt Asset Management Business](index=25&type=section&id=%E4%B8%8D%E8%89%AF%E5%82%B5%E5%8B%99%E8%B3%87%E7%94%A2%E7%AE%A1%E7%90%86%E6%A5%AD%E5%8B%99) The Group recorded no losses from distressed debt assets during the period, with management finding no issues regarding ownership or recoverability - During the review period, the Group recorded no losses from distressed debt assets (net of impairment losses) (2024: loss of approximately **HKD 19,000**)[43](index=43&type=chunk) - As at the date of this interim report, management found no issues regarding the ownership or recoverability of distressed debt assets[43](index=43&type=chunk) [Liquidity, Financial Resources and Capital Structure](index=25&type=section&id=%E6%B5%81%E5%8B%95%E8%B3%87%E9%87%91%E3%80%81%E8%B2%A1%E5%8B%99%E8%B3%87%E6%BA%90%E5%8F%8A%E8%B3%87%E6%9C%AC%E6%9E%B6%E6%A7%8B) The Group faces severe liquidity pressure with increased net current liabilities and short-term borrowings; the Board actively seeks financing to ensure sufficient financial resources - As at **June 30, 2025**, the Group recorded net current liabilities of approximately **HKD 579,863,000** (2024: approximately **HKD 499,600,000**)[44](index=44&type=chunk) - Short-term interest-bearing bank and other borrowings amounted to approximately **HKD 489,076,000** (2024: approximately **HKD 427,857,000**)[44](index=44&type=chunk) - The Directors have been closely monitoring the Group's working capital and considering appropriate avenues for funding, such as internal working capital, unutilized bank facilities, shareholders' funds, and new external funding[44](index=44&type=chunk) [Placing of New Shares Under General Mandate](index=26&type=section&id=%E6%A0%B9%E6%93%9A%E4%B8%80%E8%88%AC%E6%8E%88%E6%AC%8A%E9%85%8D%E5%94%AE%E6%96%B0%E8%82%A1%E4%BB%BD) The Company completed a placement of **33,504,000** new shares in **June 2025**, raising **HKD 3.824 million** for working capital, deemed optimal by the Board to strengthen finances and broaden the shareholder base - The placing was completed on **June 18, 2025**, with a total of **33,504,000** placing shares successfully placed[45](index=45&type=chunk) - The placing price was **HKD 0.120** per share, representing a discount of approximately **16.08%** to the closing price on the date of the placing agreement[45](index=45&type=chunk) - Net proceeds from the placing were approximately **HKD 3,824,000**, all intended for the Group's general working capital. As at **June 30, 2025**, approximately **HKD 2,900,000** had been utilized[46](index=46&type=chunk) - The Board believes the placing strengthens the Group's financial position and provides an excellent opportunity to broaden the Company's shareholder and capital base, being more suitable than other fundraising methods[47](index=47&type=chunk) [Measures to Address Going Concern Issues](index=27&type=section&id=%E6%87%89%E5%B0%8D%E6%8C%81%E7%BA%8C%E7%B6%93%E7%87%9F%E4%BA%8B%E5%AE%9C%E7%9A%84%E6%8E%AA%E6%96%BD) To alleviate liquidity pressure, the Company is implementing measures including hotel renovations, utilizing placement proceeds, seeking new financing, negotiating debt restructuring, and exploring asset sales - Hotel Grand Central's renovation and maintenance works have expanded to include ancillary buildings and the main block, with completion expected by **end-2025**[49](index=49&type=chunk) - The placing of new shares is complete, with net proceeds of approximately **HKD 3,824,000**, of which approximately **HKD 2,900,000** has been used for the Group's general working capital[50](index=50&type=chunk) - The Group remains committed to securing new financing sources at reasonable costs and is actively negotiating with existing lenders to explore options for extending, refinancing, or restructuring existing borrowings, as well as reducing interest rates and/or deferring principal and interest payments[51](index=51&type=chunk) - The Group continues to seek suitable opportunities to dispose of its assets to increase cash inflows, while implementing cost control measures to streamline administrative expenses[51](index=51&type=chunk) [Significant Investments, Acquisitions and Disposals](index=27&type=section&id=%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B3%87%E3%80%81%E6%94%B6%E8%B3%BC%E5%8F%8A%E5%87%BA%E5%94%AE) The Group made no significant investments, acquisitions, or disposals during the period, with no future plans for major investments or capital assets - During the review period, the Group did not acquire or hold any significant investments[52](index=52&type=chunk) - During the review period, the Group had no significant acquisitions or disposals of subsidiaries, associates, and joint ventures[53](index=53&type=chunk) - As at the date of this interim report, the Group had no plans for significant investments or capital assets[54](index=54&type=chunk) [Capital Gearing Ratio](index=28&type=section&id=%E8%B3%87%E6%9C%AC%E8%B2%A0%E5%82%B5%E6%AF%94%E7%8E%87) The Group's capital gearing ratio is not applicable as it recorded a deficit attributable to owners as at **June 30, 2025** - As at **June 30, 2025**, the Group's capital gearing ratio was not applicable (June 30, 2024: approximately **1,811.1%**)[55](index=55&type=chunk) - The capital gearing ratio is not applicable as the Group recorded a deficit attributable to owners of the company as at **June 30, 2025**[55](index=55&type=chunk) [Contingent Liabilities](index=28&type=section&id=%E6%88%96%E7%84%B6%E8%B2%A0%E5%82%B5) As at **June 30, 2025**, the Group's management was unaware of any significant claims against the Group - As at **June 30, 2025**, the Group's management was not aware of any significant claims against the Group (December 31, 2024: nil)[56](index=56&type=chunk) [Share Consolidation and Change in Board Lot Size](index=28&type=section&id=%E8%82%A1%E4%BB%BD%E5%90%88%E4%BD%B5%E5%8F%8A%E6%9B%B4%E6%94%B9%E6%AF%8F%E6%89%8B%E8%B2%B7%E8%B3%A3%E5%96%AE%E4%BD%8D) The Company completed a share consolidation (**25-for-1**) and changed its board lot size (from **2,000** to **6,000** consolidated shares) in **March 2025** to adjust capital structure - Share consolidation: every **twenty-five (25)** issued and unissued ordinary shares of **HKD 0.001** each were consolidated into **one (1)** ordinary share of **HKD 0.025** each in the Company's share capital, effective **March 5, 2025**[57](index=57&type=chunk) - Change in board lot size: from **2,000** existing shares to **6,000** consolidated shares, effective **March 19, 2025**[57](index=57&type=chunk) - As at the date of this report, the Company's authorized share capital was **HKD 50,000,000**, divided into **2,000,000,000** consolidated shares of **HKD 0.025** each[57](index=57&type=chunk) [Employees and Remuneration Policy](index=28&type=section&id=%E5%83%B1%E5%93%A1%E5%8F%8A%E8%96%AA%E9%85%AC%E6%94%BF%E7%AD%96) The Group saw a slight decrease in employees and staff costs; remuneration policy aligns with market practices, based on performance and experience, offering retirement benefits and training - As at **June 30, 2025**, the Group employed a total of **53** employees (December 31, 2024: **60**)[58](index=58&type=chunk) - Total staff costs (including Directors' emoluments) for the review period were approximately **HKD 6,189,000** (2024: approximately **HKD 6,365,000**)[58](index=58&type=chunk) - The Group's remuneration policy aligns with prevailing market practices and is determined based on individual employee performance and experience, providing retirement benefits and training[58](index=58&type=chunk)[59](index=59&type=chunk)[61](index=61&type=chunk) [Share Option Scheme](index=29&type=section&id=%E8%B3%BC%E8%82%A1%E6%AC%8A%E8%A8%88%E5%8A%83) The **2014** Share Option Scheme expired, with some options lapsing; a new **2024** scheme was adopted to incentivize participants, but no options have been granted yet - The **2014** Share Option Scheme expired on **June 19, 2024**[62](index=62&type=chunk) - Mr. Chan Cheung Ching's **1,675,200** adjusted share options lapsed as he ceased to be an employee; Ms. Dong Hankun's **10,470,000** share options lapsed due to her resignation[71](index=71&type=chunk)[77](index=77&type=chunk) - The **2024** Share Option Scheme was adopted on **May 31, 2024**, with a **10-year** validity, aiming to reward, attract, and retain eligible participants who contribute to the Group's long-term development[63](index=63&type=chunk) - The exercise price will be determined by the Board at its sole discretion, but must in no event be less than the highest of the closing price of the shares on the date of grant, the average closing price for the five business days immediately preceding the date of grant, and the nominal value of the shares[65](index=65&type=chunk) - Share options must be held by the grantee for at least **twelve (12)** months before they can be exercised, though the Board may, at its discretion, grant a shorter vesting period to employee participants[66](index=66&type=chunk) - As at the date of this report, no share options have been granted under the **2024** Share Option Scheme since its adoption[74](index=74&type=chunk) [Foreign Exchange Risk](index=35&type=section&id=%E5%A4%96%E5%8C%AF%E9%A2%A8%E9%9A%AA) The Group's subsidiaries primarily transact in local functional currencies, minimizing foreign exchange risk, but conversion to HKD presentation currency may incur risk, with no hedging during the period - The vast majority of transactions by the Group's subsidiaries in Singapore, Indonesia, Japan, and China are settled in Singapore Dollars, Indonesian Rupiah, Japanese Yen, and Renminbi, respectively, resulting in minimal foreign exchange risk[75](index=75&type=chunk) - Converting the functional currencies of these subsidiaries to the HKD presentation currency may expose them to foreign exchange risk[75](index=75&type=chunk) - During the review period, the Group did not use any financial instruments to hedge foreign exchange risk[75](index=75&type=chunk) [Pledge of Group Assets](index=35&type=section&id=%E9%9B%86%E5%9C%98%E8%B3%87%E7%94%A2%E6%8A%B5%E6%8A%BC) As at **June 30, 2025**, approximately **HKD 138 million** of the Group's property, plant and equipment were pledged to secure bank financing - As at **June 30, 2025**, certain of the Group's property, plant and equipment with a net book value of approximately **HKD 138,119,000** (December 31, 2024: approximately **HKD 121,870,000**) were pledged to secure bank financing[76](index=76&type=chunk) [Dividends](index=36&type=section&id=%E8%82%A1%E6%81%AF) The Board does not recommend any dividend payment for the review period - The Board does not recommend the payment of any dividend for the review period (2024: nil)[78](index=78&type=chunk) [Financing Agreement and Specific Performance Deed by Controlling Shareholder](index=36&type=section&id=%E8%9E%8D%E8%B3%87%E5%8D%94%E8%AD%B0%E5%8F%8A%E6%8E%A7%E8%82%A1%E8%82%A1%E6%9D%B1%E7%9A%84%E7%89%B9%E5%AE%9A%E5%B1%A5%E7%B4%84%E5%A5%91%E6%93%9A) The Group secured a **SGD 75 million** term loan, collateralized by assets, but defaulted on interest payments and is now actively negotiating a waiver and debt restructuring - The Company entered into a financing agreement with an independent third party (the "Lender"), where the Lender was to provide HHI with a term loan facility of **SGD 75,000,000**[79](index=79&type=chunk) - The loan facility was secured by: a charge over LHI's operating accounts, a legal mortgage over HHI's Hotel Grand Central, a fixed and floating charge over all of HHI's assets and undertakings, and a charge executed by Silverine Pacific Ltd over HHI's shares[79](index=79&type=chunk) - HHI has drawn down **SGD 75,000,000** to repay old debts, fund working capital, and pay related fees[80](index=80&type=chunk) - The Group failed to pay accrued interest when due under the terms of the financing agreement, leading to an event of default[82](index=82&type=chunk) - The Group is actively negotiating with the Lender for a waiver of default and exploring options for extending, refinancing, or restructuring existing borrowings, as well as reducing interest rates and/or deferring principal and interest payments[84](index=84&type=chunk) [Outlook](index=38&type=section&id=%E5%B1%95%E6%9C%9B) The Company holds a cautiously optimistic outlook, contingent on timely refinancing, and will continue to evaluate its hotel portfolio, seek special asset investments, and advance the Bintan Resort project - The Company maintains a cautiously optimistic outlook for the future, anticipating recovery from the COVID-19 pandemic, contingent on timely refinancing[85](index=85&type=chunk) - The Company will continue to evaluate its existing investment portfolio and seek suitable special asset investment and restructuring opportunities[85](index=85&type=chunk) - Japan's Hanatsubaki Onsen Hotel business currently underperforms, and the Group may consider exploring options (including but not limited to selling the Hanatsubaki Onsen Hotel) to reduce liquidity pressure, subject to timely refinancing[86](index=86&type=chunk) - Developing Bintan Resort presents a good opportunity for the Company to expand its regional footprint, contingent on successful and timely refinancing[87](index=87&type=chunk) - The Company is actively seeking refinancing to stabilize its financial position, engaging with financial institutions and potential investors to explore various refinancing options[87](index=87&type=chunk) [Audit Committee](index=39&type=section&id=%E5%AF%A9%E6%A0%B8%E5%A7%94%E5%93%A1%E6%9C%83) The Audit Committee oversees financial reporting, risk management, and internal controls; its composition changed with Mr. Tang Chiu Ming as Chairman from **January 6, 2025**, and it reviewed the unaudited results for compliance - The Audit Committee is responsible for reviewing and overseeing the Group's financial reporting process, risk management, and internal control systems[88](index=88&type=chunk) - Effective **January 6, 2025**, the Audit Committee comprises three independent non-executive directors: Mr. Tang Chiu Ming (Chairman), Ms. Chan Wai Ki, and Mr. Ho Sing Wai[88](index=88&type=chunk) - The Audit Committee has reviewed the Group's unaudited consolidated results for the review period with management and considers them to be in compliance with applicable accounting standards, GEM Listing Rules, and other relevant legal requirements[88](index=88&type=chunk) [Remuneration Committee](index=40&type=section&id=%E8%96%AA%E9%85%AC%E5%A7%94%E5%93%A1%E6%9C%83) The Remuneration Committee reviews and recommends remuneration policies for Directors and senior management; its composition changed, with Ms. Chan Wai Ki remaining Chairperson - The Remuneration Committee is responsible for reviewing the policies and structures for all remuneration of the Company's Directors and senior management and making recommendations to the Board[89](index=89&type=chunk) - Effective **January 6, 2025**, the Remuneration Committee comprises three independent non-executive directors: Ms. Chan Wai Ki (Chairperson), Mr. Tang Chiu Ming, and Mr. Ho Sing Wai[89](index=89&type=chunk) [Nomination and Corporate Governance Committee](index=40&type=section&id=%E6%8F%90%E5%90%8D%E5%8F%8A%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%A7%94%E5%93%A1%E6%9C%83) The Nomination and Corporate Governance Committee reviews Board structure, identifies candidates, and formulates governance policies; its composition changed, with Mr. Wong Chun Hung remaining Chairman - The Nomination and Corporate Governance Committee is responsible for reviewing the Board's structure, size, composition, and diversity, identifying suitable candidates for Board membership, and formulating and reviewing the Company's corporate governance policies and practices[90](index=90&type=chunk) - Effective **January 6, 2025**, the Nomination and Corporate Governance Committee comprises one non-executive director, Mr. Wong Chun Hung (Chairman), and two independent non-executive directors, Ms. Chan Wai Ki and Mr. Tang Chiu Ming[90](index=90&type=chunk) [Other Information](index=41&type=section&id=%E5%85%B6%E4%BB%96%E8%B3%87%E6%96%99) This section details corporate governance, directors' securities dealings, competing interests, share transactions, and the interests of directors, chief executive, and substantial shareholders [Corporate Governance Code](index=41&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%AE%88%E5%89%87) The Group complied with the Corporate Governance Code provisions in Part 2 of Appendix C1 to the GEM Listing Rules during the review period - For the six months ended **June 30, 2025**, the Group complied with the code provisions of the Corporate Governance Code set out in Part 2 of Appendix C1 to the GEM Listing Rules during the review period[92](index=92&type=chunk) [Code of Conduct Regarding Securities Transactions by Directors](index=41&type=section&id=%E6%9C%89%E9%97%9C%E8%91%A3%E4%BA%8B%E9%80%B2%E8%A1%8C%E8%AD%89%E5%88%B8%E4%BA%A4%E6%98%93%E4%B9%8B%E8%A1%8C%E7%82%BA%E5%AE%88%E5%89%87) The Company adopted GEM Listing Rules' dealing rules, and all Directors confirmed compliance with the code of conduct during the review period - The Company has adopted the required dealing rules set out in Rules **5.48 to 5.67** of the GEM Listing Rules as its code of conduct regarding securities transactions by Directors[93](index=93&type=chunk) - Following specific enquiries with all Directors, all Directors confirmed their compliance with the required dealing rules and the code of conduct regarding securities transactions by Directors throughout the review period[93](index=93&type=chunk) [Competing Interests](index=41&type=section&id=%E7%AB%B6%E7%88%AD%E6%AC%8A%E7%9B%8A) Directors, controlling shareholders, and their associates confirmed no competing business or interests with the Group during the review period and up to the report date - During the review period and up to the date of this report, each Director or controlling shareholder and their respective close associates confirmed that they had no business or interests in any company that competes or may compete with the Group's business[94](index=94&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=41&type=section&id=%E8%B3%BC%E8%B2%B7%E3%80%81%E5%87%BA%E5%94%AE%E6%88%96%E8%B4%96%E5%9B%9E%E6%9C%AC%E5%85%AC%E5%8F%B8%E4%B9%8B%E4%B8%8A%E5%B8%82%E8%AD%89%E5%88%B8) Neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the review period - During the review period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[95](index=95&type=chunk) [Directors' and Chief Executive's Interests in Shares and Underlying Shares of the Company and Associated Corporations](index=42&type=section&id=%E8%91%A3%E4%BA%8B%E5%8F%8A%E6%9C%80%E9%AB%98%E8%A1%8C%E6%94%BF%E4%BA%BA%E5%93%A1%E6%96%BC%E6%9C%AC%E5%85%AC%E5%8F%B8%E5%8F%8A%E7%9B%B8%E8%81%AF%E6%B3%95%E5%9C%98%E7%9A%84%E8%82%A1%E4%BB%BD%E5%8F%8A%E7%9B%B8%E9%97%9C%E8%82%A1%E4%BB%BD%E4%B9%8B%E6%AC%8A%E7%9B%8A) As at **June 30, 2025**, Mr. Lu Tianshun, Mr. Wong Chun Hung, and Mr. Yuen Lai Him held **48.61%** of the Company's issued shares through Ace Kingdom Enterprises Corporation Directors' Long Positions in the Company's Shares (As at June 30, 2025) | Name | Capacity | Total Number of Shares Held | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Mr. Lu Tianshun | Interest in a controlled corporation | 97,725,600 | 48.61% | | Mr. Wong Chun Hung | Interest in a controlled corporation | 97,725,600 | 48.61% | | Mr. Yuen Lai Him | Interest in a controlled corporation | 97,725,600 | 48.61% | - Mr. Lu, Mr. Wong, and Mr. Yuen are deemed to have an interest in the Company's shares held by Ace Kingdom, which is owned by multiple entities and individuals[100](index=100&type=chunk) [Substantial Shareholders' Interests and Short Positions in the Company's Shares and Underlying Shares](index=44&type=section&id=%E4%B8%BB%E8%A6%81%E8%82%A1%E6%9D%B1%E6%96%BC%E6%9C%AC%E5%85%AC%E5%8F%B8%E8%82%A1%E4%BB%BD%E5%8F%8A%E7%9B%B8%E9%97%9C%E8%82%A1%E4%BB%BD%E4%B8%AD%E7%9A%84%E6%AC%8A%E7%9B%8A%E5%8F%8A%E6%B7%A1%E5%80%89) As at **June 30, 2025**, substantial shareholders, including Ace Kingdom, CMI Financial Holding, and China Orient Asset Management, held significant proportions of the Company's shares Substantial Shareholders' Long Positions in Shares (As at June 30, 2025) | Shareholder Name/Entity | Capacity | Number of Shares | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Ace Kingdom | Beneficial owner | 97,725,600 | 48.61% | | Boomerang Investment Limited | Interest in a controlled corporation | 97,725,600 | 48.61% | | Mr. Kwok Yee Chek | Interest in a controlled corporation | 97,725,600 | 48.61% | | Billion Supreme Holdings Limited | Interest in a controlled corporation | 97,725,600 | 48.61% | | CMI Financial Holding Company Limited | Beneficial owner | 27,600,000 | 13.73% | | CMI Asia Asset Management Co., Ltd. | Interest in a controlled corporation | 27,600,000 | 13.73% | | China Minsheng Investment Corp., Ltd. | Interest in a controlled corporation | 27,600,000 | 13.73% | | China Orient Asset Management Co. | Beneficial owner | 12,400,000 | 6.17% | - Ace Kingdom is a company with interests held by Boomerang Investment Limited (**36%**), Mr. Kwok Yee Chek (**35%**), Billion Supreme Holdings Limited (**20%**), and Mr. Yuen Lai Him (**9%**), respectively[103](index=103&type=chunk) - CMI Financial Holding Company Limited is wholly owned by CMI Asia, which is wholly owned by China Minsheng Investment[103](index=103&type=chunk)

[Interim Results Overview](index=1&type=section&id=Interim%20Results%20Overview) This section provides a high-level overview of the company's financial performance and operational highlights for the interim period [Financial Summary](index=1&type=section&id=Financial%20Summary) Despite a 5.7% revenue decrease, the company achieved substantial profit and adjusted EBITDA growth through improved cost control and operational efficiency | Indicator | 2025 (HK$'000) | 2024 (HK$'000) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 4,810,470 | 5,099,917 | (5.7%) | | Gross Profit | 2,205,955 | 2,372,059 | (7.0%) | | Profit Attributable to Equity Holders of the Company | 181,503 | 112,807 | 60.9% | | Adjusted EBITDA | 610,077 | 536,920 | 13.6% | - Profit and adjusted EBITDA growth primarily resulted from enhanced cost control measures and improved operational efficiency[4](index=4&type=chunk) [Operational Update](index=1&type=section&id=Operational%20Update) Clarks strategically reduced procurement, optimized product mix, and lowered discounts in response to economic uncertainty, leading to a slight revenue decline but increased gross margin and a turnaround to profitability - Clarks strategically reduced procurement, optimized product portfolio, and lowered discounts, resulting in a slight revenue decrease but an increase in gross margin[5](index=5&type=chunk) - Clarks achieved a turnaround to profitability in the first half through continuous restructuring measures and significant improvements in operational efficiency[5](index=5&type=chunk) [Board Composition](index=2&type=section&id=Board%20Composition) This section details the structure and members of the company's Board of Directors [Board of Directors](index=2&type=section&id=Board%20of%20Directors) As of the announcement date, the Board comprises executive, non-executive, and independent non-executive directors, including Mr. Li Ning as Chairman and Co-CEO - The Board of Directors includes executive directors, non-executive directors, and independent non-executive directors[6](index=6&type=chunk) - Mr. Li Ning serves as Chairman and Co-Chief Executive Officer[6](index=6&type=chunk) [Financial Review](index=4&type=section&id=Financial%20Review) This section provides a detailed analysis of the group's financial performance, including revenue, gross profit, expenses, and overall financial position [Revenue Analysis](index=4&type=section&id=Revenue%20Analysis) For the six months ended June 30, 2025, the group's consolidated revenue decreased by 5.7% to HK$4.81 billion, primarily due to reduced revenue from the multi-brand apparel and footwear segment | Indicator | 2025 (HK$'000) | 2024 (HK$'000) | Change (%) | | :--- | :--- | :--- | :--- | | Total Revenue | 4,810,470 | 5,099,917 | -5.7% | | Multi-brand Apparel and Footwear | 4,553,615 | 4,842,294 | -6.0% | | Sports Experience | 256,855 | 257,623 | -0.3% | - The decrease in revenue is primarily attributable to declines in the multi-brand apparel and footwear segment, particularly the Clarks and Bossini businesses[11](index=11&type=chunk)[14](index=14&type=chunk) [Revenue by Segment](index=4&type=section&id=Revenue%20by%20Segment) Clarks business accounted for 86.3% of total revenue but saw a 5.3% decline, mainly due to weak consumer sentiment in Europe and the US, while Bossini's revenue significantly dropped by 47.5% due to product and channel repositioning | Segment | 2025 (HK$'000) | % of Revenue | 2024 (HK$'000) | % of Revenue | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Clarks | 4,148,485 | 86.3% | 4,378,465 | 85.9% | -5.3% | | Bossini | 140,329 | 2.9% | 267,241 | 5.2% | -47.5% | | Other Consumer Goods Businesses | 264,801 | 5.5% | 196,588 | 3.8% | 34.7% | - Clarks' revenue decreased by **5.3%**, primarily impacted by economic uncertainty and high cost of living in Europe and the US[12](index=12&type=chunk)[14](index=14&type=chunk) - Bossini's revenue significantly declined by **47.5%** due to product and channel repositioning during the period[13](index=13&type=chunk)[14](index=14&type=chunk) [Revenue by Sales Channel](index=4&type=section&id=Revenue%20by%20Sales%20Channel) Clarks' online channel revenue grew by 9.7%, while its direct-operated stores and wholesale channels declined; Bossini experienced significant revenue decreases across all sales channels, with wholesale and other channels dropping by 82.6% | Brand | Channel | 2025 (HK$'000) | % of Revenue | 2024 (HK$'000) | % of Revenue | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Clarks | Direct-operated Stores | 1,605,784 | 38.7% | 1,662,680 | 38.0% | -3.4% | | | Wholesale and Others | 1,913,243 | 46.1% | 2,142,194 | 48.9% | -10.7% | | | Online Channels | 629,458 | 15.2% | 573,591 | 13.1% | 9.7% | | Bossini | Direct-operated Stores | 135,440 | 96.6% | 244,483 | 91.5% | -44.6% | | | Wholesale and Others | 3,286 | 2.3% | 18,856 | 7.1% | -82.6% | | | Online Channels | 1,603 | 1.1% | 3,902 | 1.4% | -58.9% | [Gross Profit and Gross Profit Margin](index=6&type=section&id=Gross%20Profit%20and%20Gross%20Profit%20Margin) For the six months ended June 30, 2025, the group's gross profit decreased by 7.0% to HK$2.21 billion, aligning with the revenue decline, while the overall gross profit margin slightly decreased to 45.9% due to Bossini and other consumer goods businesses | Indicator | 2025 (HK$'000) | Gross Margin | 2024 (HK$'000) | Gross Margin | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Total Gross Profit | 2,205,955 | 45.9% | 2,372,059 | 46.5% | -7.0% | | Clarks Gross Profit | 2,020,499 | 48.7% | 2,129,938 | 48.6% | -5.1% | | Bossini Gross Profit | 66,262 | 47.2% | 131,923 | 49.4% | -49.8% | - Clarks' gross profit margin increased by **0.1 percentage point to 48.7%**, primarily due to effective product cost control[19](index=19&type=chunk)[20](index=20&type=chunk) - Bossini's gross profit margin decreased by **2.2 percentage points to 47.2%**, mainly due to increased discounts in retail stores to clear old inventory[21](index=21&type=chunk)[25](index=25&type=chunk) [Other Income and Other Gains/(Losses) – Net](index=7&type=section&id=Other%20Income%20and%20Other%20Gains%2F(Losses)%20%E2%80%93%20Net) Net other income and gains for the period increased to HK$85.3 million from HK$60.5 million in the prior year, primarily driven by foreign exchange gains despite reduced interest income and government subsidies | Indicator | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | | Other Income and Other Gains/(Losses) – Net | 85,342 | 60,455 | | Interest Income | 6,996 | 21,640 | | Government Subsidies | 18,345 | 32,730 | | Foreign Exchange Gains/(Losses) | 53,146 | (35,643) | - Foreign exchange gains of **HK$53.1 million** were a major growth factor, a turnaround from a loss of HK$35.6 million in the prior year[22](index=22&type=chunk)[26](index=26&type=chunk) [Selling and Distribution Expenses](index=7&type=section&id=Selling%20and%20Distribution%20Expenses) Selling and distribution expenses decreased by HK$251.4 million to HK$1.54 billion year-on-year, mainly due to enhanced cost management, reduced staff costs from store closures, and no impairment losses on property, plant, and equipment or right-of-use assets | Indicator | 2025 (HK$'000) | 2024 (HK$'000) | Change (HK$'000) | | :--- | :--- | :--- | :--- | | Selling and Distribution Expenses | 1,543,475 | 1,794,879 | (251,404) | - Significant reductions in staff costs and the absence of asset impairment losses were the primary reasons for the decrease in expenses[23](index=23&type=chunk)[27](index=27&type=chunk) [Administrative and Other Operating Expenses](index=7&type=section&id=Administrative%20and%20Other%20Operating%20Expenses) Administrative and other operating expenses decreased to HK$664.9 million year-on-year, primarily due to enhanced cost management and the absence of one-off restructuring expenses | Indicator | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | | Administrative and Other Operating Expenses | 664,900 | 791,700 | - The reduction in expenses primarily resulted from improved cost management and the absence of one-off restructuring expenses, which were HK$64.2 million in the prior year[24](index=24&type=chunk)[28](index=28&type=chunk) [Finance Costs – Net](index=8&type=section&id=Finance%20Costs%20%E2%80%93%20Net) Net finance costs for the period increased to HK$76.0 million, mainly due to a decrease in interest income from defined benefit plans | Indicator | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | | Finance Costs – Net | 76,009 | 71,863 | - The increase in net finance costs was primarily due to a decrease in interest income from defined benefit plans[30](index=30&type=chunk)[33](index=33&type=chunk) [Share of Profits less Losses of Associates and Joint Ventures](index=8&type=section&id=Share%20of%20Profits%20less%20Losses%20of%20Associates%20and%20Joint%20Ventures) Share of profits from associates and joint ventures increased to HK$258.4 million, mainly due to the group's increased ownership interest in Shanghai Double Happiness Co Ltd | Indicator | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | | Share of Profits less Losses of Associates and Joint Ventures | 258,416 | 240,000 | - The increase in profit was primarily due to the group's ownership interest in Shanghai Double Happiness increasing from **10.0% to 19.5%**[31](index=31&type=chunk)[34](index=34&type=chunk) [Profit Attributable to Equity Holders of the Company](index=8&type=section&id=Profit%20Attributable%20to%20Equity%20Holders%20of%20the%20Company) Net profit attributable to equity holders of the company increased to HK$181.5 million, a 60.9% year-on-year growth, primarily benefiting from reduced operating expenses due to cost control measures, partially offset by lower gross profit from decreased revenue | Indicator | 2025 (HK$'000) | 2024 (HK$'000) | Change (HK$'000) | | :--- | :--- | :--- | :--- | | Profit Attributable to Equity Holders of the Company | 181,503 | 112,807 | 68,696 | - Profit growth is primarily attributed to reduced operating expenses resulting from enhanced cost control measures[32](index=32&type=chunk)[35](index=35&type=chunk) [Non-HKFRS Measure](index=9&type=section&id=Non-HKFRS%20Measure) Adjusted EBITDA, a non-HKFRS measure, provides additional information for comparing core operating performance by excluding non-cash and non-recurring restructuring items, with a 13.6% increase to HK$610.1 million during the period - Adjusted EBITDA aims to provide core operating performance by excluding non-cash and non-recurring items such as impairment losses on property, plant, and equipment, right-of-use assets, and restructuring expenses[36](index=36&type=chunk)[38](index=38&type=chunk) [Adjusted EBITDA Definition](index=9&type=section&id=Adjusted%20EBITDA%20Definition) Adjusted EBITDA is calculated by adding net finance costs, depreciation of property, plant, and equipment and right-of-use assets, and amortization of intangible assets to profit before income tax, then subtracting interest income, and excluding impairment losses and restructuring expenses - The calculation method is: Profit Before Income Tax + Net Finance Costs + Depreciation & Amortization - Interest Income - Asset Impairment - Restructuring Expenses[37](index=37&type=chunk)[38](index=38&type=chunk) [Adjusted EBITDA Reconciliation](index=10&type=section&id=Adjusted%20EBITDA%20Reconciliation) For the six months ended June 30, 2025, Adjusted EBITDA increased by HK$73.2 million or 13.6% to HK$610.1 million, primarily due to reduced operating expenses, partially offset by lower gross profit from decreased revenue | Indicator | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | | Profit Before Income Tax | 265,373 | 13,993 | | Net Finance Costs | 76,009 | 71,863 | | Interest Income | (6,996) | (21,640) | | Depreciation and Amortization | 275,691 | 306,945 | | Impairment of Property, Plant and Equipment | – | 22,450 | | Impairment of Right-of-Use Assets | – | 79,093 | | Restructuring Expenses | – | 64,216 | | Adjusted EBITDA | 610,077 | 536,920 | - Adjusted EBITDA increased by **13.6%**, primarily due to reduced operating expenses, partially offset by lower gross profit from decreased revenue[41](index=41&type=chunk)[42](index=42&type=chunk) [Segment Results](index=11&type=section&id=Segment%20Results) The multi-brand apparel and footwear segment experienced a revenue decline but achieved operating profit, while the sports experience segment saw a slight revenue decrease and reduced operating profit | Segment | 2025 Revenue (HK$'000) | 2024 Revenue (HK$'000) | 2025 Segment Results (HK$'000) | 2024 Segment Results (HK$'000) | | :--- | :--- | :--- | :--- | :--- | | Multi-brand Apparel and Footwear | 4,553,615 | 4,842,294 | 123,496 | (141,214) | | Sports Experience | 256,855 | 257,623 | 21,367 | 35,912 | [Multi-brand Apparel and Footwear Business](index=11&type=section&id=Multi-brand%20Apparel%20and%20Footwear%20Business) The group continues to expand its multi-brand apparel and footwear business, focusing on diversified product lines, with Clarks implementing a "China for China" strategy and Bossini undergoing brand transformation through cycling team sponsorships and product design upgrades - The group is committed to developing diversified product series to meet consumer demands in sports leisure, light luxury, and high-end luxury segments[43](index=43&type=chunk)[47](index=47&type=chunk) [Clarks Brand Strategy and Performance](index=11&type=section&id=Clarks%20Brand%20Strategy%20and%20Performance) Clarks continues to adjust its products and channels, implementing a "China for China" strategy in Greater China to develop products suitable for Chinese consumers and enhance brand image through new concept stores - Clarks is implementing a "China for China" strategy in Greater China, developing products tailored for Chinese consumers and opening new concept stores to enhance brand image[44](index=44&type=chunk)[47](index=47&type=chunk) [Bossini Brand Transformation and Performance](index=11&type=section&id=Bossini%20Brand%20Transformation%20and%20Performance) Bossini is injecting cycling sports spirit into its brand by sponsoring national and Hong Kong cycling teams, integrating cycling elements and upgraded sports fabrics into product design, and blending with lifestyle trends - Bossini is transforming its brand through cycling team sponsorships and product design, developing professional sportswear and sports fashion categories[45](index=45&type=chunk)[47](index=47&type=chunk) [Segment Financial Performance](index=11&type=section&id=Segment%20Financial%20Performance_Multi-brand%20Apparel) The multi-brand apparel and footwear segment's revenue decreased by HK$288.7 million, but it achieved an operating profit of HK$123.5 million, turning around from a loss, due to reduced operating expenses and asset impairment charges | Indicator | 2025 (HK$'000) | 2024 (HK$'000) | Change (HK$'000) | | :--- | :--- | :--- | :--- | | Revenue | 4,553,615 | 4,842,294 | (288,679) | | Operating Profit/(Loss) | 123,496 | (141,214) | 264,710 | - The turnaround to operating profit is primarily attributed to reduced operating expenses and asset impairment charges[46](index=46&type=chunk)[48](index=48&type=chunk) [Sports Experience Business](index=12&type=section&id=Sports%20Experience%20Business) The Sports Experience segment encompasses the operation, services, and investment in sports destinations, events, and e-sports clubs, with the group securing exclusive operating rights for the "China Pickleball Tour" and continuously evaluating sports destination projects - The business scope covers sports parks, sports centers, ice rinks, sports events, and e-sports clubs[50](index=50&type=chunk)[53](index=53&type=chunk) - The group secured exclusive operating rights for the "China Pickleball Tour," which is expected to create synergies with its consumer goods business[51](index=51&type=chunk)[53](index=53&type=chunk) - The group operates **12 sports parks and 13 ice rinks** nationwide[51](index=51&type=chunk)[53](index=53&type=chunk) [Segment Financial Performance](index=12&type=section&id=Segment%20Financial%20Performance_Sports%20Experience) The Sports Experience segment's revenue slightly decreased by HK$0.7 million to HK$256.9 million, and operating profit decreased by HK$14.5 million to HK$21.4 million, mainly due to timing differences in government subsidies and e-sports event revenue recognition | Indicator | 2025 (HK$'000) | 2024 (HK$'000) | Change (HK$'000) | | :--- | :--- | :--- | :--- | | Revenue | 256,855 | 257,623 | (768) | | Operating Profit | 21,367 | 35,912 | (14,545) | - The decline in operating profit is primarily due to timing differences in government subsidies and e-sports event revenue recognition[52](index=52&type=chunk)[54](index=54&type=chunk) [Financial Position](index=13&type=section&id=Financial%20Position) As of June 30, 2025, the group's net assets increased to HK$8.59 billion, with total non-current assets rising primarily due to increased interests in associates and joint ventures, while net current assets remained stable | Indicator | June 30, 2025 (HK$'000) | December 31, 2024 (HK$'000) | | :--- | :--- | :--- | | Net Assets | 8,590,117 | 8,197,200 | | Total Non-current Assets | 9,514,338 | 8,651,788 | | Net Current Assets | 1,557,181 | 1,526,835 | - The increase in non-current assets is mainly due to the group's increased ownership interest in Li Ning Company and its share of profits less losses from associates and joint ventures[56](index=56&type=chunk)[58](index=58&type=chunk) - Non-current liabilities primarily include non-current lease liabilities of **HK$1.35 billion** and bank borrowings of **HK$838.9 million**[57](index=57&type=chunk)[58](index=58&type=chunk) [Liquidity and Financial Resources](index=14&type=section&id=Liquidity%20and%20Financial%20Resources) In the first half of 2025, the group's net cash inflow from operating activities significantly improved to HK$276.5 million, primarily due to cost management, while net cash outflow from investing activities was mainly for increasing interests in associates and asset purchases, and net cash inflow from financing activities came from bank borrowings, maintaining a stable gearing and current ratio | Indicator | H1 2025 (HK$'000) | H1 2024 (HK$'000) | | :--- | :--- | :--- | | Net Cash Inflow/(Outflow) from Operating Activities | 276,466 | (78,700) | | Net Cash Outflow from Investing Activities | (286,682) | (164,886) | | Net Cash Inflow from Financing Activities | 320,542 | 373,503 | - The increase in operating cash inflow is primarily due to a significant reduction in operating expenses from enhanced cost management[60](index=60&type=chunk)[63](index=63&type=chunk) - Net cash outflow from investing activities was mainly for increasing interests in associates (**HK$300.9 million**) and purchasing property, plant, and equipment and intangible assets (**HK$97.6 million**)[60](index=60&type=chunk)[63](index=63&type=chunk) - As of June 30, 2025, the group's gearing ratio was approximately **0**, and the current ratio was approximately **1.4**, maintaining a stable financial position[65](index=65&type=chunk)[68](index=68&type=chunk) [Financial Management and Policy and Foreign Currency Risk](index=15&type=section&id=Financial%20Management%20and%20Policy%20and%20Foreign%20Currency%20Risk) The group's finance department manages financial risks, primarily focusing on foreign currency exchange rate fluctuations without engaging in speculative activities, with most business transactions settled in USD, GBP, RMB, and HKD, and forward currency contracts in place to mitigate foreign currency risk - The group's policy is not to engage in any speculative activities and to mitigate foreign currency risk through forward currency contracts[66](index=66&type=chunk)[69](index=69&type=chunk) - The majority of revenue and transactions are settled in **USD, GBP, RMB, and HKD**[66](index=66&type=chunk)[69](index=69&type=chunk) [Charge on Assets](index=15&type=section&id=Charge%20on%20Assets) As of June 30, 2025, a subsidiary's total assets of HK$5.75 billion, along with inventory and trade receivables totaling HK$529.7 million, were pledged as collateral for bank loans | Indicator | June 30, 2025 (HK$'000) | December 31, 2024 (HK$'000) | | :--- | :--- | :--- | | Total Pledged Assets (Inventory and Trade Receivables) | 529,700 | 423,700 | - Pledged assets are used to secure the group's bank loans[67](index=67&type=chunk)[70](index=70&type=chunk) [Guarantee](index=16&type=section&id=Guarantee) As of June 30, 2025, the group's total guarantees amounted to approximately HK$49.8 million, primarily comprising guarantee facilities related to lessors, HMRC, and insurance, as well as bank guarantees in lieu of utility and property rental deposits | Guarantee Type | June 30, 2025 (HK$'000) | December 31, 2024 (HK$'000) | | :--- | :--- | :--- | | Guarantees related to lessors, HMRC, and insurance | 40,421 | 40,777 | | Bank guarantees in lieu of utility and property rental deposits | 9,377 | 7,973 | | **Total** | **49,798** | **48,750** | [Employees and Remuneration Policies](index=16&type=section&id=Employees%20and%20Remuneration%20Policies) As of June 30, 2025, the group employed approximately 4,900 full-time employees, with staff costs of HK$917.4 million, a decrease from the prior year, and maintains a competitive remuneration policy while sponsoring external training for employees | Indicator | H1 2025 (HK$'000) | H1 2024 (HK$'000) | | :--- | :--- | :--- | | Staff Costs (including directors' emoluments) | 917,400 | 1,096,400 | - As of June 30, 2025, the group employed approximately **4,900 full-time employees** (December 31, 2024: 5,000 employees)[72](index=72&type=chunk)[74](index=74&type=chunk) - The group sponsors selected employees to attend external training courses[72](index=72&type=chunk)[74](index=74&type=chunk) [Material Transactions](index=16&type=section&id=Material%20Transactions) During the period, the group engaged in several material transactions, including the privatization of Bossini International, the acquisition of Li Ning Company shares, and the establishment of a new facility agreement - Material transactions include the privatization of Bossini International, the acquisition of Li Ning Company shares, and the establishment of a facility agreement[73](index=73&type=chunk)[75](index=75&type=chunk) [Privatisation of Bossini International Holdings Limited](index=16&type=section&id=Privatisation%20of%20Bossini%20International%20Holdings%20Limited) Bossini International completed its privatization in March 2025, becoming an indirect wholly-owned subsidiary of the company, which saves listing maintenance costs, retains more resources for future brand development, and provides greater operational flexibility - Bossini International completed its privatization on **March 13, 2025**, becoming an indirect wholly-owned subsidiary of the company[80](index=80&type=chunk)[83](index=83&type=chunk) - The privatization was conducted through a share exchange offer, with **1 Non-ordinary Share exchanged for every 5 Bossini International shares**[77](index=77&type=chunk)[78](index=78&type=chunk) - Privatization saved listing maintenance costs, retained more resources for future brand development, and provided greater operational flexibility[94](index=94&type=chunk)[96](index=96&type=chunk) [Acquisitions of Shares of Li Ning Company Limited](index=18&type=section&id=Acquisitions%20of%20Shares%20of%20Li%20Ning%20Company%20Limited) Between January 10 and July 16, 2025, Viva China Development Limited, a direct wholly-owned subsidiary of the company, acquired a total of 46,849,500 shares of Li Ning Company on the open market via the Stock Exchange for a total consideration of approximately HK$730.1 million | Transaction Period | Number of Shares Acquired | Total Consideration (HK$'000) | | :--- | :--- | :--- | | January 10 - July 16, 2025 | 46,849,500 shares | 730,100 | - The acquisitions constitute a discloseable transaction for the company[81](index=81&type=chunk)[83](index=83&type=chunk) [Facility Agreement](index=19&type=section&id=Facility%20Agreement) Viva China Development Limited entered into a facility agreement with a commercial bank for a term and revolving loan facility of up to HK$4.5 billion, intended for the group's general corporate funding needs - Secured a term and revolving loan facility of up to **HK$4.5 billion**[85](index=85&type=chunk)[88](index=88&type=chunk) - The facility is primarily for the group's general corporate funding needs[85](index=85&type=chunk)[88](index=88&type=chunk) [Subsequent Events](index=19&type=section&id=Subsequent%20Events) This section outlines significant events that occurred after the reporting period [Post-Period Acquisitions of Li Ning Co Shares](index=19&type=section&id=Post-Period%20Acquisitions%20of%20Li%20Ning%20Co%20Shares) As of the report date, Viva China Development Limited continued to acquire Li Ning Company shares after June 30, 2025, for a total consideration of approximately HK$509.0 million, increasing the group's ownership interest in Li Ning Company to approximately 12.5% | Transaction Period | Number of Shares Acquired | Total Consideration (HK$'000) | | :--- | :--- | :--- | | Post June 30, 2025 to Report Date | 32,092,500 shares | 509,000 | - As of the report date, the group's ownership interest in Li Ning Company is approximately **12.5%**[86](index=86&type=chunk)[89](index=89&type=chunk)[237](index=237&type=chunk)[238](index=238&type=chunk) [Business Review and Prospects](index=19&type=section&id=Business%20Review%20and%20Prospects) This section reviews the group's business performance in the context of the macroeconomic environment and outlines future strategies and outlook [Business Review](index=19&type=section&id=Business%20Review) In the first half of 2025, the group maintained a pragmatic and steady approach, continuously reducing costs and enhancing efficiency, leading to significant growth in net profit and adjusted EBITDA despite global economic pressures - The global economy faces challenges including US tariff policies, rising trade barriers, and weak consumer confidence[87](index=87&type=chunk)[90](index=90&type=chunk) - The group's net profit increased by **320.8%** year-on-year, and adjusted EBITDA rose by **13.6%** year-on-year[92](index=92&type=chunk)[95](index=95&type=chunk) [Macroeconomic Environment Impact](index=19&type=section&id=Macroeconomic%20Environment%20Impact) US tariff policies are impacting the global trade system, trade barriers are squeezing brand profits and eroding consumer confidence, with declining US consumer confidence and an uncertain economic outlook in Europe leading to weak consumption momentum - US tariff policies lead to economic uncertainty, and rising trade barriers squeeze brand profit margins[87](index=87&type=chunk)[90](index=90&type=chunk) - US consumer confidence indices have continuously declined, and Europe's economic growth outlook remains uncertain, indicating weak consumption momentum[87](index=87&type=chunk)[90](index=90&type=chunk) [Clarks Brand Performance and Strategy](index=20&type=section&id=Clarks%20Brand%20Performance%20and%20Strategy) Clarks, the group's primary brand, generated HK$4.15 billion in revenue, accounting for 86.3% of total revenue, and achieved increased gross margin and a turnaround to profitability by strategically reducing procurement, optimizing product mix, and lowering discounts, with Mr. Victor Herrero now leading the business | Indicator | H1 2025 (HK$'000) | % of Total Revenue | | :--- | :--- | :--- | | Clarks Revenue | 4,148,500 | 86.3% | - Clarks achieved an increase in gross margin and a turnaround to profitability through strategic procurement reductions, product portfolio optimization, and discount reductions[93](index=93&type=chunk)[95](index=95&type=chunk) - Mr. Victor Herrero has been appointed Co-CEO of the group and Acting CEO of Clarks, expected to lead the Clarks business towards reasonable profit margins[93](index=93&type=chunk)[95](index=95&type=chunk) [Bossini Brand Transformation and Privatisation](index=20&type=section&id=Bossini%20Brand%20Transformation%20and%20Privatisation) Bossini continues its transformation, slowing direct channel expansion, closing inefficient stores, and accelerating inventory clearance to ensure stable cash flow, which led to a 47.5% revenue decline; its privatization has saved listing costs and enhanced operational flexibility - To ensure stable cash flow, Bossini slowed direct channel expansion, closed inefficient stores, and accelerated inventory clearance, resulting in a **47.5% revenue decline**[94](index=94&type=chunk)[96](index=96&type=chunk) - The privatization of Bossini International is complete, making it a wholly-owned indirect subsidiary of the group, saving listing costs and providing greater operational flexibility[94](index=94&type=chunk)[96](index=96&type=chunk) [Other Brand Development](index=21&type=section&id=Other%20Brand%20Development) Italian luxury leather goods brand Testoni opened a global flagship store in Milan and appointed Korean actress Son Ye-jin as its global brand ambassador, while Nordic outdoor brand Haglöfs is expanding in Greater China with approximately 20 offline stores expected to open this year - Testoni opened a global flagship store in Milan and appointed Son Ye-jin as its global brand ambassador to expand its influence in the Asia-Pacific region[97](index=97&type=chunk)[101](index=101&type=chunk) - Haglöfs is expanding in Greater China, with approximately **20 offline stores** expected to open in mainland China within the year[97](index=97&type=chunk)[101](index=101&type=chunk) [Sports Experience Business Development](index=21&type=section&id=Sports%20Experience%20Business%20Development) The group secured exclusive operating rights for the "China Pickleball Tour," creating new growth opportunities for its sports experience business, and as of June 30, 2025, operates 12 sports parks and 13 ice rinks nationwide - Secured exclusive operating rights for the "China Pickleball Tour," which is expected to create synergies with its consumer goods business[98](index=98&type=chunk)[101](index=101&type=chunk) - As of June 30, 2025, the group operates a total of **12 sports parks and 13 ice rinks** nationwide[98](index=98&type=chunk)[101](index=101&type=chunk) [Prospects](index=21&type=section&id=Prospects) Facing global economic slowdown, high interest rates suppressing consumption recovery, and geopolitical conflicts, the group will maintain a cautious approach, flexibly adjust operating strategies, ensure stable cash flow, and steadily advance its businesses to lay a foundation for sustainable development - The World Bank projects global economic growth to slow to **2.3% in 2025**, the slowest since 2008[99](index=99&type=chunk)[102](index=102&type=chunk) - Economic growth forecasts for the EU and UK have been downgraded, signaling continued sluggishness in consumer markets[99](index=99&type=chunk)[102](index=102&type=chunk) - The group will maintain a cautious approach, flexibly adjust operating strategies, ensure stable cash flow, and steadily advance its businesses to address challenges[100](index=100&type=chunk)[102](index=102&type=chunk) [Unaudited Condensed Consolidated Interim Financial Information](index=22&type=section&id=Unaudited%20Condensed%20Consolidated%20Interim%20Financial%20Information) This section presents the unaudited condensed consolidated interim financial statements, including the statement of profit or loss, financial position, changes in equity, and cash flows [Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=22&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) The statement of profit or loss shows revenue of HK$4.81 billion, gross profit of HK$2.21 billion, and profit attributable to equity holders of HK$181.5 million for the period, with total other comprehensive income/loss of HK$390.4 million | Indicator | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | | Revenue | 4,810,470 | 5,099,917 | | Gross Profit | 2,205,955 | 2,372,059 | | Profit Before Income Tax | 265,373 | 13,993 | | Profit for the Period | 205,499 | 48,839 | | Profit Attributable to Equity Holders of the Company | 181,503 | 112,807 | | Total Comprehensive Income for the Period | 390,397 | (91,579) | - Foreign exchange differences turned from a **HK$105.7 million loss in 2024 to a HK$342.9 million gain in 2025**, significantly impacting other comprehensive income[107](index=107&type=chunk) [Interim Condensed Consolidated Statement of Financial Position](index=25&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) The statement of financial position shows the group's total net assets were HK$8.59 billion as of June 30, 2025, with total non-current assets of HK$9.51 billion and total current assets of HK$5.74 billion | Indicator | June 30, 2025 (HK$'000) | December 31, 2024 (HK$'000) | | :--- | :--- | :--- | | Total Non-current Assets | 9,514,338 | 8,651,788 | | Total Current Assets | 5,739,960 | 5,003,258 | | Total Current Liabilities | 4,182,779 | 3,476,423 | | Total Non-current Liabilities | 2,481,402 | 1,981,423 | | Net Assets | 8,590,117 | 8,197,200 | - Interests in associates and joint ventures significantly increased from **HK$4.60 billion to HK$5.23 billion**[111](index=111&type=chunk) - Bank borrowings increased from **HK$410.4 million to HK$838.9 million**[113](index=113&type=chunk) [Interim Condensed Consolidated Statement of Changes in Equity](index=27&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) The statement of changes in equity shows that equity attributable to equity holders of the company increased to HK$7.79 billion as of June 30, 2025, while non-controlling interests decreased, with total comprehensive income for the period at HK$390.4 million | Indicator | June 30, 2025 (HK$'000) | January 1, 2024 (HK$'000) | | :--- | :--- | :--- | | Equity Attributable to Equity Holders of the Company | 7,789,805 | 7,255,317 | | Non-controlling Interests | 800,312 | 941,883 | | Total Equity | 8,590,117 | 8,197,200 | - Total comprehensive income for the period was **HK$390.4 million**, compared to a loss of HK$91.6 million in the prior year[116](index=116&type=chunk) - Issued share capital increased due to the acquisition of additional interests in a subsidiary and the issuance of shares to non-controlling shareholders and option holders[116](index=116&type=chunk) [Interim Condensed Consolidated Statement of Cash Flows](index=28&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) The cash flow statement shows net cash inflow from operating activities of HK$276.5 million, net cash outflow from investing activities of HK$286.7 million, and net cash inflow from financing activities of HK$320.5 million for the first half of 2025, with cash and cash equivalents at period-end totaling HK$1.11 billion | Indicator | H1 2025 (HK$'000) | H1 2024 (HK$'000) | | :--- | :--- | :--- | | Net Cash Inflow/(Outflow) from Operating Activities | 276,466 | (78,700) | | Net Cash Outflow from Investing Activities | (286,682) | (164,886) | | Net Cash Inflow from Financing Activities | 320,542 | 373,503 | | Net Increase in Cash and Cash Equivalents | 310,326 | 129,917 | | Cash and Cash Equivalents at End of Period | 1,110,808 | 1,420,975 | - Operating cash flow turned from an outflow last year to an inflow, primarily benefiting from increased cash generated from operations[121](index=121&type=chunk) - Cash outflow from investing activities increased, mainly due to investments in associates and purchases of property, plant, and equipment[121](index=121&type=chunk) [Notes to the Unaudited Condensed Consolidated Interim Financial Information](index=30&type=section&id=Notes%20to%20the%20Unaudited%20Condensed%20Consolidated%20Interim%20Financial%20Information) This section provides detailed notes to the unaudited condensed consolidated interim financial information, offering further insights into the group's accounting policies, financial instruments, and other relevant disclosures [General Information](index=30&type=section&id=General%20Information) The company is a limited liability company incorporated in the Cayman Islands, with its ordinary shares listed on the Main Board of the Hong Kong Stock Exchange, primarily engaged in the design, development, branding, and sale of multi-brand lifestyle apparel and footwear, as well as the management and operation of sports parks, sports centers, ice rinks, and e-sports clubs - The company's principal businesses include multi-brand lifestyle apparel and footwear and sports experience services[126](index=126&type=chunk)[130](index=130&type=chunk) - Li Ning Company Limited is an associate of the group, primarily engaged in brand development, design, manufacturing, sales, and wholesale of sports-related products[126](index=126&type=chunk)[129](index=129&type=chunk) [Basis of Preparation and Changes in Accounting Policies](index=31&type=section&id=Basis%20of%20Preparation%20and%20Changes%20in%20Accounting%20Policies) The financial information is prepared in accordance with the Listing Rules and HKAS 34, with accounting policies consistent with the 2024 annual financial statements; newly adopted standards had no significant impact, but HKFRS 18 is expected to broadly affect the presentation and disclosure of future financial statements - The financial information complies with the requirements of the Listing Rules and HKAS 34[131](index=131&type=chunk)[136](index=136&type=chunk) - HKFRS 18, effective January 1, 2027, is expected to have a broad impact on the presentation and disclosure of financial performance statements[135](index=135&type=chunk)[138](index=138&type=chunk)[139](index=139&type=chunk)[140](index=140&type=chunk) - HKFRS 18 will affect the calculation and reporting of operating profit, potentially requiring disaggregation of foreign exchange differences and changes in the classification of gains or losses on derivative instruments[141](index=141&type=chunk)[142](index=142&type=chunk)[143](index=143&type=chunk) [Revenue, Other Income and Other Gains/(Losses) – Net](index=34&type=section&id=Revenue,%20Other%20Income%20and%20Other%20Gains%2F(Losses)%20%E2%80%93%20Net_Notes) Revenue primarily stems from goods sales, sports content production and distribution, sports park facilities, and ice rink rentals, while other income mainly includes government subsidies and interest income, and net other gains are largely from foreign exchange gains | Revenue Source | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | | Sale of Goods | 4,520,126 | 4,812,220 | | Sports Content Production and Distribution Income | 141,837 | 131,832 | | Sports Park Facilities and Ice Rink Rental Income and Other Service Income | 94,131 | 89,232 | | Royalty Income | 40,738 | 37,503 | | Sports Team Management Income | 10,574 | 23,007 | | Consulting Service Income | 3,001 | 2,992 | | **Total Revenue from Contracts with Customers** | **4,810,407** | **5,096,786** | | Other Income and Gains/(Losses) – Net | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | | Government Subsidies | 18,345 | 32,730 | | Interest Income | 6,996 | 21,640 | | Foreign Exchange Gains/(Losses) | 53,146 | (35,643) | | Net Gains from Early Termination and Modification of Leases | 13,582 | 24,055 | - In the first half of 2025, HMRC levied a VAT liability provision of approximately **HK$14.6 million** on the group's sales in the UK[147](index=147&type=chunk)[148](index=148&type=chunk) [Operating Segment Information](index=36&type=section&id=Operating%20Segment%20Information) Management divides the group's business into two reportable operating segments, multi-brand apparel and footwear and sports experience, based on products/services, monitoring their performance separately, with segment results assessed based on adjusted profit or loss before income tax - The group is divided into two operating segments: multi-brand apparel and footwear, and sports experience[150](index=150&type=chunk)[152](index=152&type=chunk) - Segment results are assessed based on adjusted profit or loss before income tax, excluding interest income, share option expenses, impairment of financial assets, share of profits from associates, net finance costs, and unallocated expenses[151](index=151&type=chunk)[152](index=152&type=chunk) | Segment | 2025 External Revenue (HK$'000) | 2024 External Revenue (HK$'000) | 2025 Segment Results (HK$'000) | 2024 Segment Results (HK$'000) | | :--- | :--- | :--- | :--- | :--- | | Multi-brand Apparel and Footwear | 4,553,615 | 4,842,294 | 123,496 | (141,214) | | Sports Experience | 256,855 | 257,623 | 21,367 | 35,912 | | Region | 2025 External Customer Revenue (HK$'000) | 2024 External Customer Revenue (HK$'000) | | :--- | :--- | :--- | | Americas | 2,113,581 | 2,214,910 | | United Kingdom and Republic of Ireland | 1,437,708 | 1,596,901 | | China (including Hong Kong and Macau) | 858,561 | 877,375 | [Finance Costs – Net](index=39&type=section&id=Finance%20Costs%20%E2%80%93%20Net_Notes) Net finance costs primarily comprise interest on bank borrowings, interest on lease liabilities, and net interest expense/(income) from defined benefit plans | Item | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | | Interest on Bank Borrowings | 22,668 | 31,123 | | Interest on Lease Liabilities | 52,018 | 48,717 | | Net Interest Expense/(Income) from Defined Benefit Plans | 1,323 | (7,977) | | **Total** | **76,009** | **71,863** | [Share of Profits less Losses of Associates and Joint Ventures](index=39&type=section&id=Share%20of%20Profits%20less%20Losses%20of%20Associates%20and%20Joint%20Ventures_Notes) The share of profits less losses of associates and joint ventures increased, primarily due to the group's increased ownership interest in Shanghai Double Happiness Co Ltd | Indicator | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | | Share of Profits less Losses of Associates and Joint Ventures | 258,416 | 240,000 | - The increase in profit is primarily due to the group's ownership interest in Double Happiness increasing from **10.0% to 19.5%**[161](index=161&type=chunk)[162](index=162&type=chunk) [Profit Before Income Tax](index=40&type=section&id=Profit%20Before%20Income%20Tax) Profit before income tax was HK$265.4 million, a significant increase from the prior year, primarily influenced by factors such as cost of inventories sold, depreciation, amortization, and employee benefit expenses | Item | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | | Cost of Inventories Sold | 2,471,781 | 2,572,782 | | Depreciation | 223,544 | 238,013 | | Amortization of Intangible Assets | 52,147 | 68,932 | | Net Foreign Exchange Losses/(Gains) | (53,146) | 35,643 | | Employee Benefit Expenses | 917,354 | 1,096,377 | - There were no impairment losses on property, plant, and equipment or right-of-use assets in 2025, compared to **HK$22.5 million and HK$79.1 million**, respectively, in the prior year[164](index=164&type=chunk) [Income Tax](index=41&type=section&id=Income%20Tax) Income tax expense for the period was HK$59.9 million, compared to a credit of HK$34.8 million in the prior year, with applicable tax rates including 16.5% for Hong Kong profits tax, 25% for PRC corporate income tax (5% for small low-profit enterprises), 25% for UK corporate tax, and 21% for US federal corporate income tax (plus 2.5% to 9.9% for state income tax) | Item | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | | Current Income Tax | 38,438 | 57,321 | | Deferred Income Tax | 21,436 | (92,167) | | **Income Tax Expense/(Credit)** | **59,874** | **(34,846)** | - Income tax expense shifted from a credit last year to an expense, primarily influenced by changes in deferred tax[166](index=166&type=chunk) - Tax rates in key operating regions: Hong Kong **16.5%**, China **25%** (5% for small low-profit enterprises), UK **25%**, US federal **21%** plus California state tax **2.5%-9.9%**[167](index=167&type=chunk)[168](index=168&type=chunk)[169](index=169&type=chunk) [Profit Per Share Attributable to Equity Holders of the Company](index=42&type=section&id=Profit%20Per%20Share%20Attributable%20to%20Equity%20Holders%20of%20the%20Company) For the six months ended June 30, 2025, basic earnings per share were 1.57 HK cents, and diluted earnings per share were 1.57 HK cents | Indicator | 2025 (HK cents) | 2024 (HK cents) | | :--- | :--- | :--- | | Basic Earnings Per Share | 1.57 | 0.99 | | Diluted Earnings Per Share | 1.57 | 0.95 | - The calculation of diluted earnings per share for 2025 did not include the effect of share options, as they had an anti-dilutive effect[171](index=171&type=chunk)[172](index=172&type=chunk) [Interests in Associates and Joint Ventures](index=44&type=section&id=Interests%20in%20Associates%20and%20Joint%20Ventures) As of June 30, 2025, the group's total interests in associates and joint ventures amounted to HK$5.23 billion, primarily comprising interests in associates (HK$4.35 billion) and goodwill (HK$859.2 million), with significant interests in Li Ning Company, CITIC Property, and Double Happiness | Item | June 30, 2025 (HK$'000) | December 31, 2024 (HK$'000) | | :--- | :--- | :--- | | Interests in Associates | 5,205,330 | 4,568,757 | | Interests in Joint Ventures | 27,373 | 27,549 | | **Total** | **5,232,703** | **4,596,306** | - As of June 30, 2025, the group's ownership interest in Li Ning Company was **11.3%** (December 31, 2024: 10.5%)[181](index=181&type=chunk) - As of June 30, 2025, the market price of Li Ning Company's listed shares was **HK$16.92 per share**[177](index=177&type=chunk)[178](index=178&type=chunk) [Additions to Property, Plant and Equipment/Intangible Assets/Right of Use Assets](index=45&type=section&id=Additions%20to%20Property,%20Plant%20and%20Equipment%2FIntangible%20Assets%2FRight%20of%20Use%20Assets) In the first half of 2025, the group added approximately HK$81.8 million in property, plant, and equipment, HK$16.7 million in intangible assets, and recognized approximately HK$165.0 million in right-of-use assets | Item | H1 2025 (HK$'000) | H1 2024 (HK$'000) | | :--- | :--- | :--- | | Additions to Property, Plant and Equipment | 81,800 | 73,600 | | Additions to Intangible Assets | 16,700 | 65,000 | | Recognition of Right-of-Use Assets | 165,000 | 292,400 | [Derivative Financial Instruments](index=46&type=section&id=Derivative%20Financial%20Instruments) The group holds forward foreign exchange contracts as derivative financial instruments to mitigate foreign exchange risk, with some designated as cash flow hedges | Item | June 30, 2025 (HK$'000) | December 31, 2024 (HK$'000) | | :--- | :--- | :--- | | Derivative Financial Assets (Forward Currency Contracts) | 12,680 | 41,917 | | Derivative Financial Liabilities (Forward Currency Contracts) | 99,636 | 3,843 | - The group uses forward foreign exchange contracts to mitigate foreign exchange rate fluctuation risk[188](index=188&type=chunk) [Defined Benefits Schemes](index=46&type=section&id=Defined%20Benefits%20Schemes) As of June 30, 2025, the group's defined benefit schemes recorded a total present value of defined benefit obligations of HK$7.99 billion and fair value of plan assets of HK$7.92 billion, resulting in a net defined benefit liability of HK$73.4 million | Item | June 30, 2025 (HK$'000) | December 31, 2024 (HK$'000) | | :--- | :--- | :--- | | Present Value of Obligation | (7,989,945) | (7,432,374) | | Fair Value of Plan Assets | 7,916,536 | 7,403,632 | | Defined Benefit Surplus/(Deficit) | (73,409) | (28,742) | [Trade Debtors and Bills Receivable](index=47&type=section&id=Trade%20Debtors%20and%20Bills%20Receivable) As of June 30, 2025, net trade debtors and bills receivable amounted to HK$785.2 million, with current amounts accounting for HK$599.6 million, and the group measures impairment using the expected credit loss model | Item | June 30, 2025 (HK$'000) | December 31, 2024 (HK$'000) | | :--- | :--- | :--- | | Trade Debtors and Bills Receivable | 820,055 | 724,882 | | Less: Loss Allowance | (34,813) | (33,364) | | **Net** | **785,242** | **691,518** | | Ageing | June 30, 2025 (HK$'000) | December 31, 2024 (HK$'000) | | :--- | :--- | :--- | | Current | 599,596 | 487,639 | | Overdue less than 3 months | 100,329 | 144,325 | | Overdue 3 to 6 months | 19,357 | 9,699 | | Overdue more than 6 months | 65,960 | 49,855 | - Trade debtors and bills receivable are written off when there is no reasonable expectation of recovery[196](index=196&type=chunk)[197](index=197&type=chunk) [Prepayments, Deposits and Other Receivables](index=49&type=section&id=Prepayments,%20Deposits%20and%20Other%20Receivables) As of June 30, 2025, total prepayments, deposits, and other receivables amounted to HK$748.6 million, with the current portion being HK$638.0 million | Item | June 30, 2025 (HK$'000) | December 31, 2024 (HK$'000) | | :--- | :--- | :--- | | Prepayments | 432,238 | 345,360 | | Deposits and Other Receivables | 412,528 | 456,320 | | Less: Loss Allowance | (96,136) | (95,621) | | **Total** | **748,630** | **706,059** | [Trade, Bills and Other Payables](index=50&type=section&id=Trade,%20Bills%20and%20Other%20Payables) As of June 30, 2025, total trade, bills, and other payables amounted to HK$2.32 billion, with trade payables accounting for HK$1.93 billion | Item | June 30, 2025 (HK$'000) | December 31, 2024 (HK$'000) | | :--- | :--- | :--- | | Trade Payables | 1,934,397 | 1,461,674 | | Bills Payable | 586 | 8,336 | | Other Payables | 381,691 | 513,863 | | **Total** | **2,316,674** | **1,983,873** | - Trade payables include **HK$142.7 million** related to supplier financing arrangements[201](index=201&type=chunk)[203](index=203&type=chunk) | Ageing | June 30, 2025 (HK$'000) | December 31, 2024 (HK$'000) | | :--- | :--- | :--- | | Current | 1,902,944 | 1,129,530 | | Overdue less than 3 months | 22,316 | 329,335 | [Bank Borrowings](index=52&type=section&id=Bank%20Borrowings) As of June 30, 2025, total secured bank borrowings amounted to HK$1.14 billion, with a current portion of HK$297.3 million, bearing floating interest rates, and the group has secured approximately HK$7.22 billion in bank facilities | Item | June 30, 2025 (HK$'000) | December 31, 2024 (HK$'000) | | :--- | :--- | :--- | | Bank Borrowings, Secured | 1,136,138 | 410,388 | | Less: Current Portion | (297,275) | – | | **Non-current Portion** | **838,863** | **410,388** | - Bank borrowings bear floating interest rates based on daily SONIA plus a margin, secured overnight financing rate plus a margin, and HIBOR plus a specified rate[207](index=207&type=chunk)[210](index=210&type=chunk) - The group has secured approximately **HK$7.22 billion** in bank facilities, of which approximately **HK$1.34 billion** has been utilized[209](index=209&type=chunk)[210](index=210&type=chunk) [Share Capital](index=53&type=section&id=Share%20Capital) As of June 30, 2025, the number of issued ordinary shares was 9,965,271,244 with a par value of HK$498.3 million, with new shares issued during the period for subsidiary acquisitions and some shares repurchased and cancelled | Item | Number of Shares as of June 30, 2025 | Par Value as of June 30, 2025 (HK$'000) | | :--- | :--- | :--- | | Authorized Ordinary Shares | 20,000,000,000 | 1,000,000 | | Issued and Fully Paid Ordinary Shares | 9,965,271,244 | 498,264 | - During the period, **246,634,517 new ordinary shares** were allotted and issued to non-controlling shareholders and option holders of Bossini International to acquire all their remaining interests[212](index=212&type=chunk)[213](index=213&type=chunk) | Treasury Shares Movement | Number of Shares | Amount (HK$'000) | | :--- | :--- | :--- | | Balance at January 1, 2025 | – | – | | Repurchased | 10,712,000 | 3,722 | | Cancelled | (5,136,000) | (1,705) | | Balance at June 30, 2025 | 5,576,000 | 2,017 | [Commitments for Capital Expenditure](index=54&type=section&id=Commitments%20for%20Capital%20Expenditure) As of June 30, 2025, the group's total contracted but unprovided capital expenditure commitments amounted to HK$53.1 million, primarily for property, plant, and equipment, intangible assets, and capital injections into associates and equity investments | Item | June 30, 2025 (HK$'000) | December 31, 2024 (HK$'000) | | :--- | :--- | :--- | | Property, Plant and Equipment and Intangible Assets | 36,054 | 23,465 | | Capital Injection into Associates and Equity Investments | 17,013 | 16,531 | | **Total** | **53,067** | **39,996** | [Material Related Party Transactions](index=55&type=section&id=Material%20Related%20Party%20Transactions) During the period, the group engaged in several material related party transactions, including marketing service income, procurement fees, goods sales, office and parking rental expenses, dividend income, consulting and service fees, and raw material purchases from a non-controlling shareholder | Transaction Type | H1 2025 (HK$'000) | H1 2024 (HK$'000) | | :--- | :--- | :--- | | Marketing Service Income Received and Receivable from Associates | 143,833 | 131,989 | | Procurement Fees Paid and Payable to an Associate | 3,720 | 4,700 | | Sale of Goods to an Associate | 211,192 | 135,175 | | Dividends Received and Receivable from an Associate | 62,298 | 55,404 | | Purchase of Raw Materials from a Non-controlling Shareholder | 15,487 | 2,638 | - Mr. Li Ning and Mr. Li Qilin are common directors of the company, Li Ning Group, and Double Happiness[225](index=225&type=chunk)[226](index=226&type=chunk) [Fair Value Measurement of Financial Instruments](index=57&type=section&id=Fair%20Value%20Measurement%20of%20Financial%20Instruments) The group's financial assets and liabilities are measured at fair value and categorized into three levels based on the fair value hierarchy, primarily including derivative financial assets/liabilities (forward currency contracts) and financial assets measured at fair value through other comprehensive income (unlisted equity investments, government bonds) | Item | June 30, 2025 (HK$'000) | December 31, 2024 (HK$'000) | | :--- | :--- | :--- | | Derivative Financial Assets | 12,680 | 41,917 | | Financial Assets Measured at Fair Value Through Other Comprehensive Income | 34,158 | 36,145 | | Derivative Financial Liabilities | 99,636 | 3,843 | - The fair value hierarchy is categorized into Level 1 (quoted prices in active markets), Level 2 (valuation based on observable market data), and Level 3 (valuation based on unobservable market data)[234](index=234&type=chunk) [Guarantee](index=59&type=section&id=Guarantee_Notes) As of June 30, 2025, the group's total guarantees amounted to approximately HK$49.8 million, primarily comprising guarantee facilities related to lessors, HMRC, and insurance, as well as bank guarantees in lieu of utility and property rental deposits | Guarantee Type | June 30, 2025 (HK$'000) | December 31, 2024 (HK$'000) | | :--- | :--- | :--- | | Guarantees related to lessors, HMRC, and insurance | 40,421 | 40,777 | | Bank guarantees in lieu of utility and property rental deposits | 9,377 | 7,973 | | **Total** | **49,798** | **48,750** | [Dividend](index=60&type=section&id=Dividend) For the six months ended June 30, 2025, the company did not declare an interim dividend | Item | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | | Dividend for the Current Period: Interim | – | – | | Final Dividend for the Previous Financial Year | – | 91,442 | - No interim dividend was declared for the first half of 2025, whereas a final dividend of **HK$91.4 million** was declared for the first half of 2024[236](index=236&type=chunk) [Subsequent Events](index=60&type=section&id=Subsequent%20Events_Notes) As of the report date, Viva China Development Limited continued to acquire Li Ning Company shares after June 30, 2025, for a total consideration of approximately HK$509.0 million, increasing the group's ownership interest in Li Ning Company to approximately 12.5% | Transaction Period | Number of Shares Acquired | Total Consideration (HK$'000) | | :--- | :--- | :--- | | Post June 30, 2025 to Report Date | 32,092,500 shares | 509,000 | - As of the report date, the group's ownership interest in Li Ning Company is approximately **12.5%**[237](index=237&type=chunk)[238](index=238&type=chunk) [Purchase, Sales or Redemption of the Company's Listed Securities](index=61&type=section&id=Purchase,%20Sales%20or%20Redemption%20of%20the%20Company's%20Listed%20Securities) This section details the company's activities related to the purchase, sale, or redemption of its own listed securities [Share Repurchase Activities](index=61&type=section&id=Share%20Repurchase%20Activities) For the six months ended June 30, 2025, the company repurchased a total of 10,712,000 shares for approximately HK$3.71 million, with 5,136,000 shares cancelled and 5,576,000 shares held as treasury shares, which the Board believes is in the best interest of the company and its shareholders | Month of Repurchase | Number of Shares Repurchased | Total Consideration Paid (HK$'000) | | :--- | :--- | :--- | | June 2025 | 10,712,000 | 3,708 | - Of the repurchased shares, **5,136,000 shares were cancelled**, and **5,576,000 shares are held as treasury shares**[240](index=240&type=chunk)[242](index=242&type=chunk) - The Board believes that share repurchases are in the best interest of the company and its shareholders, potentially enhancing net asset value per share and/or earnings per share[241](index=241&type=chunk)[242](index=242&type=chunk) [Interests and Short Positions of Directors and Substantial Shareholders](index=63&type=section&id=Interests%20and%20Short%20Positions%20of%20Directors%20and%20Substantial%20Shareholders) This section discloses the long and short positions of the company's directors and substantial shareholders in its shares and underlying shares [Long Positions of Directors in Shares and Underlying Shares of the Company](index=63&type=section&id=Long%20Positions%20of%20Directors%20in%20Shares%20and%20Underlying%20Shares%20of%20the%20Company) As of June 30, 2025, Mr. Li Ning held 67.29% of the company's equity, Mr. Victor Herrero held 3.64%, and Mr. Li Qilin held 37.20% | Director | Total Interests | Approximate Percentage of Shareholding as of June 30, 2025 | | :--- | :--- | :--- | | Mr. Li Ning | 6,705,951,151 | 67.29% | | Mr. Victor Herrero | 363,168,000 | 3.64% | | Mr. Li Chuen Yang | 71,451,669 | 0.72% | | Mr. Li Kylin | 3,707,022,769 | 37.20% | - Mr. Li Ning's interests include personal interests, share options, and convertible bonds, as well as deemed interests through controlled corporations[248](index=248&type=chunk) [Interests and Short Positions of Substantial Shareholders and Other Persons in the Share Capital of the Company](index=66&type=section&id=Interests%20and%20Short%20Positions%20of%20Substantial%20Shareholders%20and%20Other%20Persons%20in%20the%20Share%20Capital%20of%20the%20Company) As of June 30, 2025, Mr. Li Jin held 58.93% of the company's equity, Lead Ahead held 21.40%, Victory Mind Assets held 16.86%, Dragon City held 20.07%, and Mr. Zhao Jianguo and Ms. Li Ying collectively held 10.15% | Substantial Shareholder/Other Person | Number of Shares/Underlying Shares Held | Approximate Percentage of Shareholding as of June 30, 2025 | | :--- | :--- | :--- | | Mr. Li Jin | 5,872,443,151 | 58.93% | | Lead Ahead | 2,132,420,382 | 21.40% | | Victory Mind Assets | 1,680,022,769 | 16.86% | | Dragon City | 2,000,000,000 | 20.07% | | TMF | 3,680,022,769 | 36.93% | | Mr. Zhao Jianguo | 1,011,002,267 | 10.15% | | Ms. Li Ying | 1,011,002,267 | 10.15% | - Mr. Li Jin's interests include personal interests and deemed interests through controlled corporations[255](index=255&type=chunk) [Share Option Scheme](index=70&type=section&id=Share%20Option%20Scheme) This section provides details on the company's share option schemes and movements during the period [Details of Movements of 2021 Share Option Scheme](index=70&type=section&id=Details%20of%20Movements%20of%202021%20Share%20Option%20Scheme) As of June 30, 2025, a total of 386,867,333 share options were granted to directors and employees under the 2021 Share Option Scheme, with no exercises, cancellations, or lapses during the period, and the scheme was terminated on July 14, 2025 | Grantee | Balance at January 1, 2025 | Granted During the Period | Exercised During the Period | Cancelled During the Period | Lapsed During the Period | Balance at June 30, 2025 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Directors | 154,800,000 | – | – | – | – | 154,800,000 | | Employees | 232,067,333 | – | – | – | (8,016,000) | 224,051,333 | | **Total** | **386,867,333** | **–** | **–** | **–** | **(8,016,000)** | **378,851,333** | - The vesting period for share options is from the grant date until the commencement of the relevant exercise period[268](index=268&type=chunk) - The 2021 Share Option Scheme was terminated on **July 14, 2025**[265](index=265&type=chunk)[267](index=267&type=chunk) [Details of Movements of New Share Option Scheme](index=74&type=section&id=Details%20of%20Movements%20of%20New%20Share%20Option%20Scheme) On June 16, 2025, 300,000,000 share options were conditionally granted to Mr. Victor Herrero with an exercise price of HK$0.38, which was approved by shareholders on July 14, 2025, and the maximum number of options issuable under the new scheme is 995,857,524 shares | Grantee | Grant Date | Balance at January 1, 2025 | Granted During the Period | Balance at June 30, 2025 | Exercise Price (HK$) | | :--- | :--- | :--- | :--- | :--- | :--- | | Mr. Victor Herrero | June 16, 2025 | – | 300,000,000 | 300,000,000 | 0.38 | - The grant of share options to Mr. Victor Herrero was approved by shareholders on **July 14, 2025**[272](index=272&type=chunk) - The maximum number of share options that can be granted under the new share option scheme is **995,857,524 shares**[274](index=274&type=chunk)[276](index=276&type=chunk) - As of June 30, 2025, the total number of share options granted under all share option schemes represented **6.89%** of the weighted average number of issued shares during the period[275](index=275&type=chunk)[277](index=277&type=chunk) [Directors' Related Disclosures](index=76&type=section&id=Directors'%20Related%20Disclosures) This section provides disclosures related to the company's directors, including their securities transactions and changes in information [Directors' Securities Transactions](index=76&type=section&id=Directors'%20Securities%20Transactions) The directors have confirmed compliance with the Model Code for Securities Transactions by Directors of Listed Issuers for the six months ended June 30, 2025 - All directors have confirmed compliance with the Model Code[278](index=278&type=chunk)[282](index=282&type=chunk) [Disclosure on Changes of Information of Directors](index=76&type=section&id=Disclosure%20on%20Changes%20of%20Information%20of%20Directors) In June 2025, Mr. Li Ning was re-designated from CEO to Co-CEO, Mr. Victor Herrero was appointed Co-CEO and Acting CEO of Clarks and re-designated from Non-executive Director to Executive Director, and Ms. Lu Hong was appointed CEO of Zhodu Management Consulting (Shanghai) Co Ltd - Mr. Li Ning was re-designated from Chief Executive Officer to Co-Chief Executive Officer[279](index=279&type=chunk)[283](index=283&type=chunk) - Mr. Victor Herrero was appointed Co-Chief Executive Officer and Acting Chief Executive Officer of Clarks, and re-designated from Non-executive Director to Executive Director[280](index=280&type=chunk)[283](index=283&type=chunk) - Ms. Lu Hong was appointed Chief Executive Officer of Zhodu Management Consulting (Shanghai) Co Ltd[281](index=281&type=chunk)[283](index=283&type=chunk) [Corporate Governance](index=77&type=section&id=Corporate%20Governance) This section addresses the company's corporate governance practices and compliance with relevant codes [Compliance with Corporate Governance Code](index=77&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) The company has complied with the Corporate Governance Code, although the roles of Chairman and Chief Executive Officer are not separated; the Board believes Mr. Li

I. [Company Overview and Performance Summary](index=1&type=section&id=Chairman%27s%20Statement) This section presents the unaudited interim results for the six months ended June 30, 2025, highlighting a decrease in revenue and profit attributable to shareholders, along with the declared interim dividend [1.1 Chairman's Statement](index=1&type=section&id=Chairman%27s%20Statement) The Board of Directors of APT Satellite Holdings Limited is pleased to announce the unaudited interim results for the six months ended June 30, 2025, which have been reviewed by the Audit and Risk Management Committee and independent auditors - These interim results have been reviewed by the Company's Audit and Risk Management Committee and independent auditors[4](index=4&type=chunk) [1.2 Interim Results Overview](index=1&type=section&id=Interim%20Results) The Group's revenue for H1 2025 was HK$379,673,000, a 3.11% YoY decrease, mainly due to reduced satellite transponder capacity revenue, with profit attributable to shareholders decreasing by 23.88% to HK$77,383,000 Key Financial Indicators for H1 2025 | Indicator | H1 2025 (HK$ Thousand) | H1 2024 (HK$ Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 379,673 | 391,842 | -3.11% | | Profit attributable to shareholders | 77,383 | 101,660 | -23.88% | | Basic and diluted earnings per share | 8.33 HK Cents | 10.95 HK Cents | -23.93% | - The decrease in revenue was primarily due to reduced income from providing satellite transponder capacity during the period[5](index=5&type=chunk) [1.3 Interim Dividend](index=1&type=section&id=Interim%20Dividend) The Board declared an interim dividend of HK2.50 cents per ordinary share, down from HK4.50 cents last year, payable on or about October 14, 2025 Interim Dividend Distribution | Period | Dividend per ordinary share (HK Cents) | | :--- | :--- | | Six months ended June 30, 2025 | 2.50 | | Six months ended June 30, 2024 | 4.50 | - The interim dividend will be paid on or about Tuesday, October 14, 2025, to shareholders whose names appear on the Company's register of members at the close of business on Wednesday, September 24, 2025[6](index=6&type=chunk) II. [Business Review and Outlook](index=2&type=section&id=Business%20Review) This section reviews the operational status of the Group's in-orbit satellites and ground facilities, analyzes the transponder leasing and other satellite-related services, and outlines the business outlook amidst market competition [2.1 In-orbit Satellites](index=2&type=section&id=In-orbit%20Satellites) The Group's APSTAR series in-orbit satellites (including APSTAR-5C, 6C, 7, 9, 6D, and 6E) and ground control systems maintained good operation in H1 2025, providing stable services to customers and covering over 75% of the global population - The Group's in-orbit APSTAR series satellites and ground satellite control systems maintained good operational status, continuously providing stable and reliable quality services to the Group's customers[8](index=8&type=chunk) - The Group's satellite fleet provides extensive coverage and strong service capabilities across Asia, Europe, Africa, and Oceania, serving regions with over **75%** of the global population[8](index=8&type=chunk) [2.1.1 APSTAR-5C Satellite](index=2&type=section&id=APSTAR-5C%20Satellite) APSTAR-5C satellite, located at 138°E, carries 63 transponders, covering the entire Asia-Pacific region and providing high-throughput beam services for broadband communication in Southeast Asia - APSTAR-5C satellite is positioned at **138°E** orbital slot, carrying **63** transponders (including C, Ku, and Ka bands), covering the entire Asia-Pacific region[9](index=9&type=chunk) - The satellite carries high-throughput beams covering Southeast Asia, providing enhanced broadband communication services to users in the region[9](index=9&type=chunk) [2.1.2 APSTAR-6C Satellite](index=2&type=section&id=APSTAR-6C%20Satellite) APSTAR-6C satellite is positioned at 134°E orbital slot, carrying 45 transponders, covering the entire Asia-Pacific region - APSTAR-6C satellite is positioned at **134°E** orbital slot, carrying **45** transponders (including C, Ku, and Ka bands), covering the entire Asia-Pacific region[10](index=10&type=chunk) [2.1.3 APSTAR-7 Satellite](index=2&type=section&id=APSTAR-7%20Satellite) APSTAR-7 satellite is positioned at 76.5°E orbital slot, carrying 56 transponders, covering Asia-Pacific, Middle East, Africa, and parts of Europe - APSTAR-7 satellite is positioned at **76.5°E** orbital slot, carrying **56** transponders (including C and Ku bands), covering the Asia-Pacific region, Middle East, Africa, and parts of Europe[11](index=11&type=chunk) [2.1.4 APSTAR-9 Satellite](index=2&type=section&id=APSTAR-9%20Satellite) APSTAR-9 satellite is positioned at 142°E orbital slot, carrying 46 transponders, covering the entire Asia-Pacific region - APSTAR-9 satellite is positioned at **142°E** orbital slot, carrying **46** transponders (including C and Ku bands), covering the entire Asia-Pacific region[12](index=12&type=chunk) [2.1.5 APSTAR-6D Satellite](index=2&type=section&id=APSTAR-6D%20Satellite) APSTAR-6D satellite, operated by associate company APT Mobile SatCom, is positioned at 134°E, serving as the first high-throughput satellite optimized for satellite mobile services in China and the Asia-Pacific region - APSTAR-6D satellite (operated by "APT Mobile SatCom") is positioned at **134°E** orbital slot[13](index=13&type=chunk) - APSTAR-6D satellite is the first high-throughput satellite optimized for satellite mobile services, providing high-quality broadband satellite services for China and the entire Asia-Pacific region[13](index=13&type=chunk) [2.1.6 APSTAR-6E Satellite](index=3&type=section&id=APSTAR-6E%20Satellite) APSTAR-6E satellite, operated by associate company APT Starlink, is positioned at 134°E, carrying high-throughput multi-beams to provide quality satellite broadband services for Southeast Asia - APSTAR-6E satellite (operated by "APT Starlink") is positioned at **134°E** orbital slot[14](index=14&type=chunk) - APSTAR-6E satellite carries high-throughput multi-beams and possesses advanced capabilities, providing high-quality satellite broadband services for Southeast Asia[14](index=14&type=chunk) [2.2 Ground Facilities](index=3&type=section&id=Ground%20Facilities) The Group has established or acquired gateway station service capabilities in Hong Kong, Australia, Indonesia, and Malaysia, and is constructing a satellite ground station in Chung Hom Kok, Hong Kong, to enhance integrated space-ground services and ensure satellite control security - The Group has established or acquired gateway station service capabilities in Hong Kong, Australia, Indonesia, and Malaysia, and provides services to customers[15](index=15&type=chunk) - The gateway station facilities significantly enhance the Group's integrated space-ground service capabilities in the Asia-Pacific region, helping to maintain its competitive advantage in satellite quality and overall service capabilities[15](index=15&type=chunk) - The Group has commenced construction of a satellite ground station in Chung Hom Kok, Hong Kong, which will expand C-band telemetry by relocating it from Tai Po to Chung Hom Kok, avoiding 5G interference and ensuring satellite control security[15](index=15&type=chunk) [2.3 Transponder Leasing Business](index=3&type=section&id=Transponder%20Leasing%20Business) In H1 2025, the global and Asia-Pacific satellite transponder market remained sluggish, with oversupply leading to lower bandwidth leasing prices and increased competition from LEO satellite operator Starlink; the Group actively expanded new markets, achieving positive business growth in mainland China and Southeast Asia - The global and Asia-Pacific satellite transponder market remained in a continuous downturn, with weak demand growth for satellite broadcasting and telecommunication services, no improvement in oversupply, and a significant downward trend in satellite transponder bandwidth leasing prices[16](index=16&type=chunk) - Changes in market conditions and increased competition from low-Earth orbit satellite operator Starlink's service launch significantly impacted the transponder leasing business[16](index=16&type=chunk) - The Group actively expanded into new markets and businesses, achieving significant progress and positive business volume growth in mainland China, Southeast Asia, and other markets[16](index=16&type=chunk) [2.4 Other Satellite-Related Services](index=4&type=section&id=Satellite%20TV%20Broadcasting%20Services%2C%20Satellite%20Telecommunication%20Services%2C%20Data%20Center%20Services%20and%20Gateway%20Station%20Services) The Group continues to expand its service offerings, leveraging its licenses, ground facilities, data centers, and gateway stations to provide satellite TV broadcasting transmission, satellite telecommunication, data center, and gateway station services - Leveraging its Non-domestic Television Programme Service License, Unified Carrier License, satellite ground facilities, data center facilities, and gateway station facilities, the Group continues to expand its service scope, providing users with satellite TV broadcasting transmission services, satellite telecommunication services, data center services, and gateway station services[17](index=17&type=chunk) [2.5 Business Outlook](index=4&type=section&id=Business%20Outlook) For H2 2025, the satellite transponder market faces intense competition and expected price declines; the Group will maintain its strategic positioning, vigorously expand traditional satellite resource leasing, provide broadband services via high-throughput satellites, explore overseas integrated satellite services, and increase investment in new satellite projects and business areas - The highly competitive state of oversupply in the global and Asia-Pacific satellite transponder market is expected to persist, with anticipated lower market prices, varying degrees of economic downturn and fiscal budget tightening across regions, a strong US dollar, and foreign exchange shortages in some client countries coupled with rising operating costs leading to payment difficulties, all significantly impacting the market[18](index=18&type=chunk) - The Group will vigorously expand its traditional satellite resource leasing business for APSTAR-5C, APSTAR-6C, APSTAR-7, and APSTAR-9 satellites, while effectively utilizing the two high-throughput satellites, APSTAR-6D and APSTAR-6E, from its associate companies to provide high-quality satellite broadband services to customers[18](index=18&type=chunk) - The Group will continue to leverage its healthy financial position and abundant capital, actively exploring and increasing investment in new satellite projects and expanding into new business areas, building upon the completion of its satellite ground facilities in Chung Hom Kok, Hong Kong[18](index=18&type=chunk) III. [Financial Review and Condition](index=4&type=section&id=Financial%20Review) This section provides a comprehensive financial review, including key performance indicators, revenue analysis, cost structures, capital expenditure, liquidity, and details on financial guarantees and pledged assets [3.1 Financial Summary](index=4&type=section&id=Financial%20Summary) As of June 30, 2025, the Group's financial position remained robust, despite a 3.11% YoY revenue decrease, 29.62% gross profit decline, and 23.88% profit attributable to shareholders decrease; EBITDA fell by 13.89%, with the EBITDA margin dropping 8.7 percentage points to 68.7%, while total assets slightly decreased, total liabilities reduced by 3.64%, and the debt-to-asset ratio decreased to 12.1% - As of June 30, 2025, the Group's financial position remained robust[19](index=19&type=chunk)[21](index=21&type=chunk) Summary of Financial Performance for H1 2025 | Indicator | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 379,673 | 391,842 | -3.11% | | Gross profit | 103,257 | 146,705 | -29.62% | | Profit before tax | 97,309 | 117,582 | -17.24% | | Profit attributable to shareholders | 77,383 | 101,660 | -23.88% | | Basic earnings per share (HK Cents) | 8.33 | 10.95 | -23.93% | | EBITDA | 261,020 | 303,138 | -13.89% | | EBITDA margin (%) | 68.7% | 77.4% | -8.7 percentage points | Key Balance Sheet Indicators | Indicator | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Total cash and bank balances | 2,511,187 | 2,448,394 | +2.56% | | Total assets | 6,964,810 | 6,966,130 | -0.02% | | Total liabilities | 845,473 | 877,443 | -3.64% | | Net asset value per share (HK$) | 6.59 | 6.56 | +0.46% | | Debt-to-asset ratio (%) | 12.1% | 12.6% | -0.5 percentage points | | Current asset ratio | 12.71 times | 12.27 times | +0.44 times | [3.2 Revenue Analysis](index=6&type=section&id=Revenue) Total revenue for H1 2025 was HK$379,673,000, a 3.11% YoY decrease, primarily due to a 5.90% reduction in satellite transponder capacity revenue, partially offset by a 17.99% increase in other satellite-related services revenue Revenue by Service Item | Service Item | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue from providing satellite transponder capacity | 323,371 | 343,652 | -5.90% | | Revenue from providing satellite broadcasting and telecommunication services | 1,917 | 2,096 | -8.54% | | Revenue from other satellite-related services | 54,385 | 46,094 | +17.99% | | **Total** | **379,673** | **391,842** | **-3.11%** | - The decrease in revenue was primarily due to reduced income from providing satellite transponder capacity during the period[23](index=23&type=chunk) [3.3 Other Net Income](index=6&type=section&id=Other%20Net%20Income) Total other net income for the six months ended June 30, 2025, was HK$51,406,000, a slight 0.37% YoY increase, mainly driven by a significant 225.12% rise in foreign exchange gains, offsetting a decrease in bank deposit interest income Composition of Other Net Income | Item | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Interest income from bank deposits and other interest income | 43,507 | 56,443 | -22.92% | | Foreign exchange gain/(loss) | 7,182 | (5,740) | +225.12% | | Rental income from properties | 468 | 312 | +50.00% | | Other income | 249 | 200 | +24.50% | | **Total** | **51,406** | **51,215** | **+0.37%** | - The increase was due to higher foreign exchange gains during the period[24](index=24&type=chunk) [3.4 Finance Costs](index=7&type=section&id=Finance%20Costs) Finance costs for the six months ended June 30, 2025, were HK$2,154,000, a decrease of approximately 15.76% YoY, primarily comprising interest on lease liabilities Changes in Finance Costs | Item | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Finance costs | 2,154 | 2,557 | -15.76% | - Finance costs, including interest on the Group's lease liabilities, decreased by approximately **15.76%** compared to the same period last year[25](index=25&type=chunk) [3.5 Fair Value Changes of Financial Assets](index=7&type=section&id=Fair%20Value%20Changes%20of%20Financial%20Assets) There were no fair value gains on financial assets in H1 2025, whereas H1 2024 saw a HK$1,388,000 fair value gain from the resumption of trading of Jin Ye Holdings Limited shares; the Group disposed of all its shares in Jin Ye in 2024 Fair Value Changes of Financial Assets | Item | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Fair value changes of financial assets | – | 1,388 | - As of June 30, 2024, the fair value of the listed equity investment in Jin Ye was remeasured at market value to **HK$1,388,000**, with a fair value gain of **HK$1,388,000** recognized in profit or loss[26](index=26&type=chunk) - For the year ended December 31, 2024, the Group disposed of all its shares in Jin Ye for a consideration of **HK$1,133,000**[26](index=26&type=chunk) [3.6 Taxation](index=7&type=section&id=Taxation) Taxation expenses for the six months ended June 30, 2025, increased to HK$19,497,000 compared to the prior year, primarily due to a decrease in deferred tax credits Changes in Taxation Expenses | Item | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Taxation | 19,497 | 15,922 | +22.45% | - The increase was mainly due to a decrease in deferred tax credits during the current period[28](index=28&type=chunk) [3.7 EBITDA](index=7&type=section&id=EBITDA) Due to reduced business revenue, EBITDA for the six months ended June 30, 2025, decreased by 13.89% to HK$261,020,000, with the EBITDA margin declining from 77.4% to 68.7% Changes in EBITDA and Margin | Indicator | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | EBITDA | 261,020 | 303,138 | -13.89% | | EBITDA margin (%) | 68.7% | 77.4% | -8.7 percentage points | - Due to reduced business revenue, EBITDA for the six months ended June 30, 2025, decreased by **13.89% to HK$261,020,000**, while the EBITDA margin declined from **77.4% to 68.7%**[29](index=29&type=chunk) [3.8 Capital Expenditure, Liquidity, and Debt-to-Asset Ratio](index=7&type=section&id=Capital%20Expenditure%2C%20Liquidity%2C%20Financial%20Resources%20and%20Debt-to-Asset%20Ratio) Capital expenditure for the period was HK$15,550,000, mainly for new equipment and construction in progress, funded by internal resources and operating cash flows; the Group has ample bank loan facilities with no outstanding principal at period-end, total liabilities decreased by HK$31,970,000, reducing the debt-to-asset ratio to 12.1%, and a net cash outflow of HK$16,153,000 was recorded Capital Expenditure and Cash Flow | Indicator | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Capital expenditure on property, plant and equipment | 15,550 | 20,124 | -22.73% | | Net cash outflow/(inflow) | (16,153) | 92,932 | -117.38% | | Net cash inflow from operating activities | 113,133 | 117,653 | -3.84% | - Bank of China (Hong Kong) Limited has granted a loan facility totaling up to **US$85,600,000** to APT Satellite Company Limited, a wholly-owned subsidiary of the Company[31](index=31&type=chunk) - As of June 30, 2025, the Group's total liabilities were **HK$845,473,000**, a decrease of **HK$31,970,000** from December 31, 2024, primarily due to reductions in deferred revenue, lease liabilities, and deferred income tax liabilities, resulting in a debt-to-asset ratio decrease to **12.1%**[32](index=32&type=chunk) - As of June 30, 2025, the Group held **HK$2,511,187,000** in cash and bank balances, of which **88.67%** was denominated in US dollars[33](index=33&type=chunk) [3.9 Capital Structure and Foreign Exchange Risk](index=8&type=section&id=Capital%20Structure%20and%20Foreign%20Exchange%20Risk) The Group maintains a conservative capital management system and a robust capital structure; due to the HKD peg to the USD, USD exchange rate fluctuations have minimal impact on operations, though the RMB appreciated against the HKD during the period - The Group maintains a conservative capital management system, with its robust capital structure and strong financial strength laying a solid foundation for future sustainable development[34](index=34&type=chunk) - Due to the Hong Kong dollar's peg to the US dollar, fluctuations in the US dollar exchange rate have minimal impact on the Group's operations; for the six months ended June 30, 2025, the Renminbi appreciated against the Hong Kong dollar[35](index=35&type=chunk) [3.10 Pledged Assets and Capital Commitments](index=9&type=section&id=Pledged%20Assets%20and%20Capital%20Commitments) As of June 30, 2025, the Group had pledged bank deposits of HK$367,000 and properties with a net book value of HK$2,502,000; contracted capital commitments increased to HK$169,871,000 from year-end Pledged Assets and Capital Commitments | Item | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Pledged bank deposits | 367 | 367 | | Net book value of properties pledged | 2,502 | 2,560 | | Contracted capital commitments | 169,871 | 125,758 | [3.11 Financial Guarantees](index=9&type=section&id=Financial%20Guarantees) APT Satellite, a wholly-owned subsidiary, provides a 20% joint and several guarantee for an US$116,900,000 buyer's credit loan from China Exim Bank to associate company APT Starlink; as of June 30, 2025, financial guarantee liabilities were HK$2,545,000, with a maximum guarantee responsibility of HK$178,732,000 - APT Satellite provides a guarantee for a **US$116,900,000** buyer's credit loan from China Exim Bank to its associate company, APT Starlink[38](index=38&type=chunk) - The guarantee covers **20%** of the principal amount of the drawn loan plus accrued interest, and any other amounts payable by APT Starlink under the relevant loan agreement[38](index=38&type=chunk) Financial Guarantee Responsibilities | Item | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Financial guarantee liabilities | 2,545 | 2,355 | | Maximum financial guarantee responsibility (RMB) | 163,629 | 163,440 | | Maximum financial guarantee responsibility (HK$) | 178,732 | 177,382 | [3.12 Non-Adjusting Events After Reporting Period](index=9&type=section&id=Non-Adjusting%20Events%20After%20Reporting%20Period) The Board proposed an interim dividend totaling HK$23,214,000 after the reporting period, with details disclosed in Note 7 - After the reporting period, the Directors recommended an interim dividend, details of which are set out in Note 23 of this announcement[40](index=40&type=chunk) - The Board declared an interim dividend totaling **HK$23,214,000** after the reporting period, with details provided in Note 7 of this announcement[88](index=88&type=chunk) IV. [Financial Statements](index=10&type=section&id=Financial%20Summary) This section presents the unaudited condensed consolidated financial statements, including the statements of profit or loss, comprehensive income, financial position, changes in equity, and cash flows [4.1 Unaudited Condensed Consolidated Statement of Profit or Loss](index=10&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) This section presents the unaudited condensed consolidated statement of profit or loss for the six months ended June 30, 2025, showing specific data and YoY changes in revenue, gross profit, operating profit, and profit attributable to shareholders - Profit for the period was **HK$77,812 thousand**, of which **HK$77,383 thousand** was attributable to owners of the parent[41](index=41&type=chunk) [4.2 Unaudited Condensed Consolidated Statement of Comprehensive Income](index=11&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) This section presents the unaudited condensed consolidated statement of comprehensive income for the six months ended June 30, 2025, showing the sum of profit for the period and other comprehensive income, primarily from exchange differences - Total comprehensive income for the period attributable to owners of the parent was **HK$91,429 thousand**, primarily comprising profit for the period of **HK$77,812 thousand** and exchange differences on translation of **HK$13,617 thousand**[47](index=47&type=chunk) [4.3 Unaudited Condensed Consolidated Statement of Financial Position](index=12&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) This section presents the unaudited condensed consolidated statement of financial position as of June 30, 2025, detailing the composition of non-current assets, current assets, current liabilities, non-current liabilities, and shareholders' equity - As of June 30, 2025, total assets less current liabilities were **HK$6,743,028 thousand**, and net assets were **HK$6,119,337 thousand**[44](index=44&type=chunk)[45](index=45&type=chunk) [4.4 Unaudited Condensed Consolidated Statement of Changes in Equity](index=14&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) This section presents the unaudited condensed consolidated statement of changes in equity for the six months ended June 30, 2025, reflecting movements in equity components such as share capital, share premium, reserves, and retained earnings - As of June 30, 2025, total equity attributable to owners of the Company was **HK$6,118,601 thousand**, with non-controlling interests at **HK$736 thousand**[46](index=46&type=chunk) [4.5 Unaudited Condensed Consolidated Statement of Cash Flows](index=15&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) This section presents the unaudited condensed consolidated statement of cash flows for the six months ended June 30, 2025, showing cash flows from operating, investing, and financing activities, and the net change in cash and cash equivalents - For the six months ended June 30, 2025, the net decrease in cash and cash equivalents was **HK$16,153 thousand**[47](index=47&type=chunk) - Net cash inflow from operating activities was **HK$113,133 thousand**, net cash outflow from investing activities was **HK$45,945 thousand**, and net cash outflow from financing activities was **HK$83,341 thousand**[47](index=47&type=chunk) V. [Notes to the Financial Statements](index=16&type=section&id=Notes%20to%20the%20Unaudited%20Condensed%20Consolidated%20Interim%20Financial%20Information) This section provides detailed notes to the unaudited condensed consolidated interim financial information, covering accounting policies, segment reporting, profit before tax composition, taxation, dividends, earnings per share, and asset details [5.1 Basis of Preparation and Accounting Policies](index=16&type=section&id=Basis%20of%20Preparation) This interim financial information is prepared in accordance with IAS 34 and HKAS 34 and has been reviewed by independent auditors; the Group adopted the same accounting policies as its 2024 annual consolidated financial statements, except for the IAS/HKAS 21 amendment "Lack of Exchangeability" effective in 2025, which is not expected to have a significant impact - This interim financial information has been prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" issued by the International Accounting Standards Board and Hong Kong Accounting Standard 34 "Interim Financial Reporting" issued by the Hong Kong Institute of Certified Public Accountants[48](index=48&type=chunk) - Although this interim financial information is unaudited, it has been reviewed by the Company's auditors, BDO Limited, in accordance with Hong Kong Standard on Review Engagements 2410[49](index=49&type=chunk) - The Group's interim financial information adopted the same accounting policies and methods of computation as those used in the 2024 annual consolidated financial statements, except for the following new amendment first effective in 2025: Amendments to IAS/HKAS 21 Lack of Exchangeability[50](index=50&type=chunk)[51](index=51&type=chunk) [5.2 Segment Reporting](index=17&type=section&id=Segment%20Reporting) The Group's primary business is providing satellite transponder capacity and related services, accounting for approximately 90% of revenue, thus no other separate financial segment information is provided; the Group has a diversified customer base, with one customer contributing over 10% of revenue, and regional revenue primarily from Greater China, Southeast Asia, and Hong Kong - As approximately **90%** of the Group's revenue, operating results, and assets for the six months ended June 30, 2025, and 2024, were derived from providing satellite transponder capacity and related services, no other separate financial information for resource allocation and assessment purposes was provided to the executive directors[55](index=55&type=chunk) - The Group has a diversified customer base, with one customer's transaction amount accounting for over **10%** of the Group's revenue[55](index=55&type=chunk) Geographical Revenue Distribution (HK$ Thousand) | Region | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Hong Kong | 70,091 | 63,310 | | Greater China (excluding Hong Kong) | 176,918 | 167,708 | | Southeast Asia | 86,000 | 117,619 | | Other regions | 46,664 | 43,205 | [5.3 Seasonality of Revenue and Business](index=18&type=section&id=Seasonality%20of%20Revenue%20and%20Business) The Group's main businesses, including satellite transponder capacity, satellite broadcasting and telecommunication services, and other satellite-related services, are not significantly affected by seasonal fluctuations - The Group's principal activities include maintaining, operating, and providing satellite transponder capacity, satellite broadcasting and telecommunication services, and other satellite-related services[57](index=57&type=chunk) - The Group's business is not significantly affected by seasonal fluctuations[58](index=58&type=chunk) [5.4 Composition of Profit Before Tax](index=19&type=section&id=Profit%20Before%20Tax) Profit before tax is derived after deducting or including various items, including other net income, finance costs, depreciation, amortization, gain/loss on disposal of property, and impairment loss on trade receivables Key Components of Profit Before Tax (HK$ Thousand) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Other net income | 51,406 | 51,215 | | Finance costs (interest on lease liabilities) | 2,154 | 2,557 | | Depreciation (property, plant and equipment) | 191,723 | 189,014 | | Depreciation (right-of-use assets) | 9,774 | 16,148 | | Amortization | 4,368 | 4,368 | | Loss on derecognition of property, plant and equipment | 2,926 | – | | Impairment loss recognized on trade receivables | 965 | 904 | [5.5 Taxation Details](index=20&type=section&id=Taxation) Current period tax expense was HK$19,497,000, primarily comprising Hong Kong profits tax, overseas tax, and deferred tax; Hong Kong profits tax is calculated at 16.5% (8.25% for some subsidiaries), and management believes no top-up tax is required under OECD Pillar Two model rules Composition of Taxation Expenses (HK$ Thousand) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Current tax – Hong Kong profits tax | 31,922 | 35,494 | | Current tax – Outside Hong Kong | 3,822 | 6,198 | | Deferred tax – Hong Kong | (16,247) | (25,770) | | **Taxation expenses** | **19,497** | **15,922** | - The Group's management believes that the Group is not required to pay top-up tax under the Pillar Two model rules[62](index=62&type=chunk) [5.6 Dividend Details](index=21&type=section&id=Dividends) The Board proposed an interim dividend of HK2.50 cents per ordinary share, totaling HK$23,214,000; additionally, a final dividend of HK6.50 cents per share, totaling HK$60,357,000, for the previous fiscal year was approved and paid during the period Dividend Distribution (HK$ Thousand) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Proposed interim dividend (2.50 Cents/4.50 Cents per share) | 23,214 | 41,786 | | Final dividend approved and paid (6.50 Cents/14.50 Cents per share) | 60,357 | 134,643 | - As the interim dividend was proposed after the reporting period, it has not been recognized as a liability as of the date of this announcement[63](index=63&type=chunk) [5.7 Earnings Per Share](index=21&type=section&id=Earnings%20Per%20Share) For the six months ended June 30, 2025, both basic and diluted earnings per share were HK8.33 cents, a decrease from the prior year, with no potential ordinary shares having a dilutive effect Earnings Per Share (HK Cents) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Basic earnings per share | 8.33 | 10.95 | | Diluted earnings per share | 8.33 | 10.95 | - Basic earnings per share are calculated based on the profit attributable to owners of the Company of **HK$77,383,000** and the weighted average number of ordinary shares in issue of **928,573,000** during the period[65](index=65&type=chunk) - For the six months ended June 30, 2025, and 2024, there were no potential ordinary shares with dilutive effects, thus diluted earnings per share are the same as basic earnings per share[66](index=66&type=chunk) [5.8 Property, Plant and Equipment](index=22&type=section&id=Property%2C%20Plant%20and%20Equipment) No new right-of-use assets were added during the period; total additions to property, plant, and equipment amounted to HK$15,550,000, while items with a net book value of HK$2,926,000 were derecognized, resulting in a loss, and directors believe no impairment indicators exist - No increase in right-of-use assets was recognized as the Group did not enter into any new/renewed lease contracts during the six months ended June 30, 2025, and 2024[68](index=68&type=chunk) - For the six months ended June 30, 2025, the Group acquired property, plant, and equipment with a total cost of **HK$15,550,000**[69](index=69&type=chunk) - Property, plant, and equipment items with a net book value of **HK$2,926,000** were derecognized during the six months ended June 30, 2025, resulting in a derecognition loss of **HK$2,926,000**[69](index=69&type=chunk) - The Directors believe there are no indications of impairment that would suggest an impairment loss on the carrying amounts of non-financial assets[70](index=70&type=chunk) [5.9 Investment Properties](index=22&type=section&id=Investment%20Properties) Investment properties were revalued to HK$7,909,000 as of June 30, 2025; fair value changes during the period included a revaluation loss of HK$206,000 and an exchange gain of HK$62,000 Revalued Investment Properties (HK$ Thousand) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Revalued investment properties | 7,909 | 8,053 | - For the six months ended June 30, 2025, fair value changes, including a revaluation loss of **HK$206,000** and an exchange gain of **HK$62,000**, were recognized in profit or loss during the period[71](index=71&type=chunk) [5.10 Intangible Assets](index=22&type=section&id=Intangible%20Assets) The Group holds an intangible asset with an indefinite useful life (orbital slot operating rights), which is not amortized and has no impairment loss; amortization expense for leased intangible assets (orbital slots) was HK$4,368,000 - The Group acquired the right to operate a satellite at an orbital slot in 2009, and this intangible asset is considered to have an indefinite useful life and is not amortized[72](index=72&type=chunk) - For the six months ended June 30, 2025, and 2024, the Group conducted impairment assessments on its intangible assets and determined that no impairment loss was to be recognized[72](index=72&type=chunk) - Amortization expense of **HK$4,368,000** for the six months ended June 30, 2025, was included in "cost of services" in the condensed consolidated statement of profit or loss[73](index=73&type=chunk) [5.11 Investments in Associate Companies](index=23&type=section&id=Investments%20in%20Associate%20Companies) The Group invested in APT Satellite Broadband Communications (Shenzhen) Co., Ltd. (30% stake) and APT Starlink Satellite Co., Ltd. (20% stake), both accounted for using the equity method, with primary business in constructing and developing high-throughput satellite communication systems - The Group has invested **RMB600 million** (equivalent to **HK$708 million**), representing a **30%** equity interest in APT Mobile SatCom, whose principal business is the construction and development of a global high-throughput satellite communication system and participation in the manufacturing, delivery, and launch of the APSTAR-6D satellite project[74](index=74&type=chunk) - The Group has invested **US$6 million** (equivalent to **HK$46.8 million**), representing a **20%** equity interest in APT Starlink, whose principal business is the construction and development of a global high-throughput satellite communication system and participation in the manufacturing and launch of the APSTAR-6E satellite project[74](index=74&type=chunk) [5.12 Financial Assets at Fair Value Through Profit or Loss](index=23&type=section&id=Financial%20Assets%20at%20Fair%20Value%20Through%20Profit%20or%20Loss) On March 1, 2024, Jin Ye Holdings Limited shares resumed trading, leading to a HK$1,388,000 fair value gain recognized by the Group as of June 30, 2024; the Group disposed of all its shares in Jin Ye by December 31, 2024, resulting in a zero net book value at period-end - As of June 30, 2024, the fair value of the listed equity investment in Jin Ye was remeasured at market value to **HK$1,388,000**, with a fair value gain of **HK$1,388,000** recognized in profit or loss[75](index=75&type=chunk) - For the year ended December 31, 2024, the Group disposed of all its shares in Jin Ye for a consideration of **HK$1,133,000**[75](index=75&type=chunk) - As of December 31, 2024, the net book value of financial assets at fair value through profit or loss was **HK$0**[75](index=75&type=chunk) [5.13 Net Trade Receivables](index=24&type=section&id=Net%20Trade%20Receivables) As of June 30, 2025, net trade receivables totaled HK$272,383,000, a significant increase from year-end 2024; credit terms are generally 30 days, with expected recovery within one year Aging Analysis of Trade Receivables (HK$ Thousand) | Aging | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Within 30 days | 222,611 | 126,368 | | 31-60 days | 6,595 | 2,176 | | 61-90 days | 13,026 | 2,126 | | 91-120 days | 11,253 | 248 | | Over 120 days | 18,898 | 16,546 | | **Total** | **272,383** | **147,464** | - The Group generally grants credit terms of **30 days** from the date of revenue recognition to its trade customers; trade receivables are expected to be recovered within one year from the end of the reporting period[76](index=76&type=chunk) [5.14 Deposits, Prepayments and Other Receivables](index=24&type=section&id=Deposits%2C%20Prepayments%20and%20Other%20Receivables) As of June 30, 2025, total deposits, prepayments, and other receivables amounted to HK$36,182,000, a slight decrease from year-end 2024, with interest receivables constituting a significant portion Composition of Deposits, Prepayments and Other Receivables (HK$ Thousand) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Deposits | 3,526 | 1,561 | | Prepayments | 15,500 | 11,043 | | Interest receivables | 16,489 | 21,860 | | Other receivables | 667 | 3,685 | | **Total** | **36,182** | **38,149** | [5.15 Cash and Cash Equivalents](index=25&type=section&id=Cash%20and%20Cash%20Equivalents) As of June 30, 2025, the Group's bank balances and cash totaled HK$452,365,000, a decrease from year-end 2024 Cash and Cash Equivalents (HK$ Thousand) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Bank balances and cash | 452,365 | 465,893 | [5.16 Payables and Accrued Expenses](index=25&type=section&id=Payables%20and%20Accrued%20Expenses) Trade payables are generally due within 3 months, and other payables and accrued expenses are expected to be settled within one year; the Group provides a financial guarantee for an associate company's buyer's credit loan, with financial guarantee liabilities of HK$2,545,000 as of June 30, 2025 - Trade payables are generally aged within **3 months**, and other payables and accrued expenses, except for the financial guarantee issued as described below, are expected to be settled within one year from the end of the reporting period[79](index=79&type=chunk) - APT Satellite Company Limited, a wholly-owned subsidiary of the Company, entered into a guarantee agreement with The Export-Import Bank of China to provide a guarantee for a buyer's credit loan with a principal amount of **US$116,900,000** granted by the bank to APT Starlink, an associate company of the Group[79](index=79&type=chunk) - As of June 30, 2025, financial guarantee liabilities of **HK$2,545,000** were recognized under "other payables" in the condensed consolidated statement of financial position[80](index=80&type=chunk) [5.17 Share Capital](index=26&type=section&id=Share%20Capital) As of June 30, 2025, the Company's authorized share capital was HK$200,000,000 (2,000,000 thousand shares), with issued and fully paid share capital of HK$92,857,000 (928,573 thousand shares), remaining unchanged from year-end 2024 Composition of Share Capital (Thousand Shares/HK$ Thousand) | Item | June 30, 2025 (Thousand Shares) | June 30, 2025 (HK$ Thousand) | December 31, 2024 (Thousand Shares) | December 31, 2024 (HK$ Thousand) | | :--- | :--- | :--- | :--- | :--- | | Authorized share capital (HK$0.10 par value per share) | 2,000,000 | 200,000 | 2,000,000 | 200,000 | | Issued and fully paid ordinary shares | 928,573 | 92,857 | 928,573 | 92,857 | [5.18 Fair Value Measurement](index=26&type=section&id=Fair%20Value) The Group's fair value measurements are categorized into three levels; as of June 30, 2025, investment properties were measured at Level 3 fair value of HK$7,909,000, with no transfers between fair value levels during the period - IFRS/HKFRS 13 "Fair Value Measurement" categorizes fair value measurements into a three-level hierarchy[82](index=82&type=chunk) Fair Value Hierarchy of Assets (HK$ Thousand) | Asset | Level 1 | Level 2 | Level 3 | | :--- | :--- | :--- | :--- | | Investment properties | – | – | 7,909 | - There were no transfers between fair value levels for the six months ended June 30, 2025, and for the year ended December 31, 2024[82](index=82&type=chunk) [5.19 Commitments](index=27&type=section&id=Commitments) As of June 30, 2025, the Group's contracted capital commitments for the acquisition of property, plant, and equipment increased to HK$169,871,000 from year-end 2024 Capital Commitments (HK$ Thousand) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Contracted for acquisition of property, plant and equipment | 169,871 | 125,758 | [5.20 Pledged Assets](index=27&type=section&id=Pledged%20Assets) As of June 30, 2025, the Group had pledged bank deposits of HK$367,000 and properties with a net book value of HK$2,502,000 belonging to a subsidiary, to secure bank guarantees Pledged Assets (HK$ Thousand) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Pledged bank deposits | 367 | 367 | | Net book value of properties pledged | 2,502 | 2,560 | [5.21 Significant Related Party Transactions](index=28&type=section&id=Significant%20Related%20Party%20Transactions) The Group engaged in several significant related party transactions, including revenue from satellite transponder capacity and telecommunication services from fellow group subsidiaries, a shareholder's holding company, and associate companies, as well as service fees paid to related parties Significant Related Party Transactions (HK$ Thousand) | Transaction Type | 2025 | 2024 | | :--- | :--- | :--- | | Revenue from fellow group subsidiaries | 141,788 | 133,243 | | Revenue from a holding company of a shareholder of the Company | 2,403 | 1,959 | | Revenue from associate companies | 2,925 | 5,075 | | Revenue from a subsidiary of an associate company | 46,584 | 36,003 | | Fees paid to fellow group subsidiaries | (10,129) | (1,887) | | Fees paid to an associate company | (196) | (187) | | Fees paid to a subsidiary of an associate company | (5,189) | (3,584) | [5.22 Non-Adjusting Events After Reporting Period](index=28&type=section&id=Non-Adjusting%20Events%20After%20Reporting%20Period) The Board declared an interim dividend totaling HK$23,214,000 after the reporting period, as detailed in Note 7 - The Board declared an interim dividend totaling **HK$23,214,000** after the reporting period, with details provided in Note 7 of this announcement[88](index=88&type=chunk) VI. [Other Information](index=29&type=section&id=Human%20Resources) This section provides additional information on human resources, share dealings, corporate governance compliance, the Audit and Risk Management Committee's review, and the publication details of the interim report [6.1 Human Resources](index=29&type=section&id=Human%20Resources) As of June 30, 2025, the Group's employee count increased to 118 from the prior year; the Group continues to provide on-the-job training and regularly reviews its remuneration policy Changes in Employee Count | Period | Employee Count | | :--- | :--- | | June 30, 2025 | 118 | | June 30, 2024 | 113 | - The Group continuously arranges on-the-job training for its employees and regularly reviews its remuneration policy based on each employee's responsibilities and market conditions[90](index=90&type=chunk) [6.2 Share Dealings](index=29&type=section&id=Purchase%2C%20Sale%20and%20Redemption%20of%20the%20Company%27s%20Listed%20Shares) 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 shares - For the six months ended June 30, 2025, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed shares[91](index=91&type=chunk) [6.3 Closure of Register of Members](index=29&type=section&id=Closure%20of%20Register%20of%20Members) The Company will suspend its register of members from September 24 to September 26, 2025, to determine eligibility for the interim dividend - The Company's register of members will be closed from Wednesday, September 24, 2025, to Friday, September 26, 2025 (both dates inclusive), during which no transfers of shares will be registered[92](index=92&type=chunk) - To qualify for the interim dividend, all duly completed transfer forms, together with the relevant share certificates, must be lodged with the Company's Hong Kong Share Registrar and Transfer Office by 4:30 p.m. on Tuesday, September 23, 2025[92](index=92&type=chunk) [6.4 Compliance with Corporate Governance Code](index=29&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) For the six months ended June 30, 2025, the Group complied with the Corporate Governance Code in Appendix C1 of the Listing Rules, except for code provision B.2.2 (Chairman and Chief Executive not required to rotate) - For the six months ended June 30, 2025, the Group complied with the code provisions of the Corporate Governance Code set out in Appendix C1 of the Listing Rules, except for code provision B.2.2: The Chairman and Chief Executive are not required to rotate, as this helps the Company maintain consistency in its decisions[93](index=93&type=chunk) [6.5 Audit and Risk Management Committee](index=29&type=section&id=Audit%20and%20Risk%20Management%20Committee) The Audit and Risk Management Committee reviewed the Group's accounting principles, practices, and interim financial report on August 21, 2025, and discussed audit and internal control matters; the committee comprises four independent non-executive directors - At the meeting on August 21, 2025, the Audit and Risk Management Committee, together with management, reviewed the Group's adopted accounting principles and practices, as well as the unaudited interim financial report for the six months ended June 30, 2025, and discussed audit and internal control matters[94](index=94&type=chunk) - The Audit and Risk Management Committee comprises four independent non-executive directors: Ms. Yan Jiamin (Chairperson), Dr. Lin Xiguang, Mr. Cui Liguo, and Dr. Meng Xingguo[94](index=94&type=chunk) [6.6 Publication of Interim Report](index=30&type=section&id=Interim%20Report) The financial information contained in this announcement is a summary of the interim financial report; the Company's 2025 interim report will be published on the HKEX and Company websites in due course - The unaudited financial information presented above does not constitute the Company's interim financial report for the six months ended June 30, 2025, but serves as a summary of the interim financial report[95](index=95&type=chunk) - The Company's 2025 interim report, containing information required by Appendix D2 of the Listing Rules, will be published on the HKEX (www.hkexnews.hk) and the Company's (www.apstar.com) websites in due course[95](index=95&type=chunk) [6.7 Acknowledgements](index=30&type=section&id=Acknowledgements) The Chairman, on behalf of the Board, extends gratitude to customers, directors, and all employees for their support and efforts in the Group's business - I take this opportunity to express my gratitude to our customers for their support of the Group's business, and to all directors and employees for their efforts[96](index=96&type=chunk)

Interim Results Announcement [Performance Highlights](index=1&type=section&id=Performance%20Highlights) H1 2025 unaudited interim results show 4.7% adjusted net profit growth despite year-on-year declines in revenue and gross profit, demonstrating sustained profitability Key Financial Data Summary for H1 2025 | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 286.3 | 404.1 | -29.1 | | Gross Profit | 191.8 | 296.1 | -35.2 | | Net Profit | 134.3 | 947.9 | -85.8 | | Adjusted Net Profit | 135.8 | 129.7 | +4.7 | - Adjusted net profit (non-IFRS measure) increased by **4.7%** from **RMB 129.7 million** in H1 2024 to **RMB 135.8 million** in H1 2025[6](index=6&type=chunk) Interim Condensed Consolidated Financial Statements [Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) H1 2025 revenue decreased, and profit for the period significantly declined, primarily due to the impact of preferred share fair value changes Key Data from Statement of Profit or Loss and Other Comprehensive Income | Metric | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Revenue | 286,346 | 404,130 | | Cost of Services | (94,594) | (107,996) | | Gross Profit | 191,752 | 296,134 | | Research and Development Expenses | (65,480) | (74,171) | | Selling and Marketing Expenses | (66,056) | (77,927) | | Administrative Expenses | (35,139) | (14,304) | | Fair Value Change of Preferred Shares | – | 870,196 | | Profit and Total Comprehensive Income for the Period | 134,303 | 947,884 | | Basic EPS (RMB) | 0.14 | 2.85 | | Diluted EPS (RMB) | 0.13 | 0.08 | - In H1 2025, fair value change of preferred shares was zero, compared to a gain of **RMB 870,196 thousand** in H1 2024, which was the primary reason for significant net profit fluctuation[7](index=7&type=chunk) [Interim Condensed Consolidated Statement of Financial Position](index=3&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, total net assets increased, driven by growth in net current assets, financial assets at fair value, and bank balances and cash Key Data from Statement of Financial Position | Metric | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Non-current Assets | 149,508 | 196,088 | | Current Assets | 1,914,666 | 1,752,913 | | Current Liabilities | 600,592 | 619,212 | | Net Current Assets | 1,314,074 | 1,133,701 | | Net Assets | 1,461,271 | 1,325,483 | | Total Equity | 1,461,271 | 1,325,483 | - Financial assets at fair value through profit or loss significantly increased from **RMB 242,394 thousand** as of December 31, 2024, to **RMB 403,650 thousand** as of June 30, 2025[8](index=8&type=chunk) [Interim Condensed Consolidated Statement of Cash Flows](index=4&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) Net cash from operating activities significantly increased, while investing activities saw a net outflow, primarily for financial asset purchases and time deposits Key Data from Statement of Cash Flows | Metric | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Net Cash from Operating Activities | 56,180 | 4,025 | | Net Cash (Used in)/Generated from Investing Activities | (111,605) | 142,683 | | Net Cash (Used in)/Generated from Financing Activities | (3,187) | 204,570 | | Net (Decrease)/Increase in Cash and Cash Equivalents | (58,612) | 351,278 | | Cash and Cash Equivalents at Period-End | 998,444 | 1,036,805 | - Net cash from operating activities significantly increased, reflecting improved cash generation from core business operations. Cash outflow from investing activities was primarily for purchasing financial assets at fair value through profit or loss (**RMB 113,383 thousand**) and increasing time deposits (**RMB 84,217 thousand**)[12](index=12&type=chunk)[114](index=114&type=chunk) [Notes to the Condensed Consolidated Financial Statements](index=6&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) This section details H1 2025 financial statement notes, covering accounting policies, revenue segments, income/expense breakdowns, asset/liability, equity, share-based payments, and related party transactions [1. General Information and Basis of Preparation](index=6&type=section&id=Note%201%20General%20Information%20and%20Basis%20of%20Preparation) The company, incorporated in 2014, provides ride-sharing and smart taxi services in China, listed on HKEX in June 2024, and prepares financial statements in RMB - The company successfully listed on the Main Board of The Stock Exchange of Hong Kong Limited on **June 28, 2024**[14](index=14&type=chunk) - Its principal business is providing ride-sharing platform services and smart taxi services in China[13](index=13&type=chunk) [2. New and Revised IFRSs](index=6&type=section&id=Note%202%20New%20and%20Revised%20IFRSs) The Group first adopted IAS 21 (Amendment) 'Lack of Exchangeability' from January 1, 2025, without changes to accounting policies or retrospective adjustments - The Group first adopted IAS 21 (Amendment) "Lack of Exchangeability" from **January 1, 2025**[16](index=16&type=chunk) - The adoption of the newly revised standard did not result in changes to accounting policies or retrospective adjustments[16](index=16&type=chunk) [3. Revenue and Segment Information](index=7&type=section&id=Note%203%20Revenue%20and%20Segment%20Information) Company revenue primarily derives from ride-sharing platform services, with H1 2025 total revenue decreasing, all generated from China with no single major customer Revenue by Service Category | Service Category | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Ride-sharing Platform Services | 274,649 | 389,228 | | Smart Taxi Services | 2,497 | 3,097 | | Advertising and Related Services | 9,200 | 11,805 | | **Total** | **286,346** | **404,130** | - Ride-sharing platform service revenue accounted for the highest proportion, **RMB 274,649 thousand** in H1 2025, representing **95.9%** of total revenue[17](index=17&type=chunk)[85](index=85&type=chunk) - All revenue is generated from China, and all non-current assets are located in China, thus no geographical segment information is presented[20](index=20&type=chunk) [4. Other Income](index=9&type=section&id=Note%204%20Other%20Income) H1 2025 other income increased, primarily due to higher interest income from bank balances and loans to an associated company Other Income Details | Income Source | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Interest Income from Bank Balances and Restricted Cash | 10,804 | 10,363 | | Interest Income from Loan to an Associated Company | 691 | – | | Government Grants | 219 | 162 | | Others | 299 | – | | **Total** | **12,013** | **10,525** | - Interest income from a loan to an associated company increased from zero in H1 2024 to **RMB 691 thousand** in H1 2025[23](index=23&type=chunk) [5. Other Gains and Losses](index=9&type=section&id=Note%205%20Other%20Gains%20and%20Losses) H1 2025 other gains and losses significantly increased, primarily driven by substantial fair value gains on financial assets at fair value through profit or loss Other Gains and Losses Details | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Fair Value Gains on Financial Assets at Fair Value Through Profit or Loss | 81,248 | 1,080 | | Foreign Exchange (Losses)/Gains | (2,395) | 5 | | Litigation Gains/(Losses) | 1,893 | (374) | | Donations | (210) | (385) | | Others | (1) | 127 | | **Total** | **80,535** | **453** | - Fair value gains on financial assets at fair value through profit or loss significantly increased from **RMB 1,080 thousand** in H1 2024 to **RMB 81,248 thousand** in H1 2025[25](index=25&type=chunk) [6. Income Tax Expense](index=10&type=section&id=Note%206%20Income%20Tax%20Expense) H1 2025 deferred tax expense significantly decreased compared to the prior year Income Tax Expense | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Deferred Tax Expense | (267) | (10,479) | [7. Profit for the Period](index=10&type=section&id=Note%207%20Profit%20for%20the%20Period) The Group's profit for the period is derived after various deductions, with total staff costs increasing in H1 2025 Key Deductions for Profit for the Period | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Total Staff Costs | 121,827 | 111,116 | | Depreciation of Property and Equipment | 1,219 | 1,435 | | Depreciation of Right-of-use Assets | 2,965 | 3,057 | | Driver and Passenger Incentives | 32,229 | 51,859 | | Third-party Payment Processing Fees | 17,604 | 27,251 | | Insurance Costs | 9,089 | 11,459 | | Listing Expenses | – | 37,187 | - Total staff costs increased from **RMB 111,116 thousand** in H1 2024 to **RMB 121,827 thousand** in H1 2025, primarily due to increased salaries and bonuses[27](index=27&type=chunk) [8. Earnings Per Share](index=11&type=section&id=Note%208%20Earnings%20Per%20Share) H1 2025 basic and diluted EPS significantly decreased, primarily due to preferred share fair value changes and increased weighted average ordinary shares Earnings Per Share Calculation Data | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Profit for the Period Attributable to Owners of the Company for Basic EPS (RMB thousand) | 134,303 | 947,884 | | Profit for Diluted EPS (RMB thousand) | 134,303 | 77,688 | | Weighted Average Number of Ordinary Shares for Basic EPS | 986,773,604 | 332,291,525 | | Weighted Average Number of Ordinary Shares for Diluted EPS | 1,009,859,788 | 951,289,406 | | Basic EPS (RMB) | 0.14 | 2.85 | | Diluted EPS (RMB) | 0.13 | 0.08 | - In H1 2024, the fair value change of preferred shares (**RMB 870,196 thousand**) had a significant impact on the diluted EPS calculation[30](index=30&type=chunk) [9. Dividends](index=11&type=section&id=Note%209%20Dividends) For H1 2025, the company neither paid, declared, nor proposed any dividends to ordinary shareholders - No dividends were paid, declared, or proposed to the company's ordinary shareholders during this interim period[31](index=31&type=chunk) [10. Property and Equipment](index=11&type=section&id=Note%2010%20Property%20and%20Equipment) In H1 2025, the Group acquired property and equipment, while in the prior year, a profit was generated from asset disposal - In H1 2025, the Group acquired property and equipment of approximately **RMB 146 thousand**[32](index=32&type=chunk) - In H1 2024, the disposal of plant and machinery with a total carrying amount of **RMB 16 thousand** generated cash proceeds of **RMB 40 thousand**, resulting in a disposal profit of **RMB 24 thousand**[32](index=32&type=chunk) [11. Right-of-use Assets](index=11&type=section&id=Note%2011%20Right-of-use%20Assets) In H1 2025, the Group did not renew or enter new lease agreements, unlike the prior year when new leases were recognized - In H1 2025, the Group did not renew any existing lease agreements or enter into any new lease agreements[33](index=33&type=chunk) - In H1 2024, right-of-use assets of **RMB 11,451 thousand** and lease liabilities of **RMB 11,355 thousand** were recognized[33](index=33&type=chunk) [12. Trade Receivables](index=12&type=section&id=Note%2012%20Trade%20Receivables) As of June 30, 2025, net trade receivables decreased, with most receivables due within 90 days Net Trade Receivables | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Trade Receivables for Advertising and Other Services | 5,638 | 8,261 | | Less: Provision for Credit Losses | (2,384) | (2,446) | | **Net Trade Receivables** | **3,254** | **5,815** | - Net trade receivables decreased from **RMB 5,815 thousand** as of December 31, 2024, to **RMB 3,254 thousand** as of June 30, 2025[34](index=34&type=chunk) [13. Prepayments, Deposits and Other Receivables](index=13&type=section&id=Note%2013%20Prepayments,%20Deposits%20and%20Other%20Receivables) As of June 30, 2025, total prepayments, deposits, and other receivables decreased, primarily comprising prepaid advertising and amounts due from payment platforms Prepayments, Deposits and Other Receivables Details | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Non-current Prepaid Expenses | 65,800 | 71,776 | | Current Prepaid Expenses | 25,426 | 30,971 | | Amounts Due from Payment Platforms | 13,624 | 17,686 | | Amounts Due from Aggregation Platforms | 6,161 | 5,377 | | Deposits | 743 | 134 | | Others | 269 | 921 | | Less: Provision for Credit Losses | (85) | (73) | | **Total** | **46,138** | **55,016** | - Non-current prepaid expenses, primarily for advertising services over 2 to 3 years, amounted to **RMB 65,800 thousand** as of June 30, 2025[36](index=36&type=chunk) [14. Financial Assets at Fair Value Through Profit or Loss](index=14&type=section&id=Note%2014%20Financial%20Assets%20at%20Fair%20Value%20Through%20Profit%20or%20Loss) As of June 30, 2025, total financial assets at fair value through profit or loss significantly increased, mainly including investments in listed entities and wealth management products Financial Assets at Fair Value Through Profit or Loss Details | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | – Investments in Listed Entities | 130,411 | – | | – Wealth Management Products | 273,239 | 242,394 | | **Total** | **403,650** | **242,394** | - New investments in listed entities of **RMB 130,411 thousand** were added in H1 2025[37](index=37&type=chunk) [15. Trade and Other Payables](index=14&type=section&id=Note%2015%20Trade%20and%20Other%20Payables) As of June 30, 2025, total trade and other payables slightly decreased, primarily comprising amounts payable to users for collected fares Trade and Other Payables Details | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Amounts Payable to Users | 515,938 | 532,566 | | Accrued Salaries | 26,997 | 33,531 | | Trade Payables | 29,907 | 21,171 | | Other Taxes Payable | 5,439 | 9,074 | | Accrued Expenses | 7,044 | 7,864 | | Others | 10,543 | 9,235 | | **Total** | **595,868** | **613,441** | - Amounts payable to users constitute the majority of trade and other payables, representing fares collected on behalf of private car owners and taxi drivers[38](index=38&type=chunk) [16. Share Capital](index=15&type=section&id=Note%2016%20Share%20Capital) As of June 30, 2025, issued ordinary shares totaled RMB 698 thousand, with changes primarily due to post-listing share issuance, preferred share conversion, and employee incentive plans Share Capital Movement | Item | Number of Ordinary Shares | Amount (RMB thousand) | | :--- | :--- | :--- | | January 1, 2024 | 336,569,540 | 212 | | Shares Issued After Listing | 39,091,000 | 28 | | Automatic Conversion of Preferred Shares to Ordinary Shares After Listing | 618,319,313 | 440 | | December 31, 2024 and January 1, 2025 | 993,979,853 | 680 | | Shares Issued for Employee Incentive Plans | 24,360,512 | 18 | | **June 30, 2025** | **1,018,340,365** | **698** | - After listing, preferred shares were automatically converted into **618,319,313** ordinary shares at a fair value of **HK$6.00** per share[43](index=43&type=chunk) [17. Share-based Payments](index=15&type=section&id=Note%2017%20Share-based%20Payments) H1 2025 share-based payment expenses significantly decreased by 89.9% year-on-year, primarily due to the reversal of share options from forfeited unvested options Share-based Payment Expenses | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Time-based Share Options | (1,688) | 13,471 | | Granted in 2020 | 652 | 1,384 | | Granted in 2025 | 2,521 | – | | **Total** | **1,485** | **14,855** | - Time-based share options resulted in a reversal of **RMB (1,688) thousand** in H1 2025, compared to an expense of **RMB 13,471 thousand** in H1 2024[42](index=42&type=chunk) - On December 31, 2024, the company repriced certain share options, reducing the exercise price to **US$0.0001** per share, leading to the recognition of an incremental fair value of **RMB 1,817 thousand** as an expense in H1 2025[50](index=50&type=chunk) [18. Fair Value Measurement](index=20&type=section&id=Note%2018%20Fair%20Value%20Measurement) The Group's fair value measurements use a three-level hierarchy, with H1 2025 financial assets at fair value primarily comprising investments in listed entities (Level 1) and wealth management products (Level 2) Fair Value Measurement Hierarchy | Item | Level 1 (RMB thousand) | Level 2 (RMB thousand) | Level 3 (RMB thousand) | Total (RMB thousand) | | :--- | :--- | :--- | :--- | :--- | | Investments in Listed Entities | 130,411 | – | – | 130,411 | | Wealth Management Products | – | 273,239 | – | 273,239 | | **Total** | **130,411** | **273,239** | **–** | **403,650** | - The fair value of wealth management products is estimated using discounted cash flow valuation techniques, based on contractual terms and discounted at a rate reflecting counterparty credit risk[69](index=69&type=chunk) [19. Related Party Disclosures](index=21&type=section&id=Note%2019%20Related%20Party%20Disclosures) The Group engaged in related party transactions, including interest income from a loan to Youxin (Anhui) Industrial Investment Group Co., Ltd., which was fully repaid on April 9, 2025 Related Party Transactions and Balances | Related Party Name | Nature of Transaction (H1 2025) | Nature of Balance (June 30, 2025) | | :--- | :--- | :--- | | Youxin (Anhui) Industrial Investment Group Co., Ltd. | Interest Income: 691 thousand RMB | Loan and Interest Receivable: – | | NIO Automobile Sales and Service Co., Ltd. | Advertising Services: 934 thousand RMB | Amounts Due from Related Companies: 990 thousand RMB | - The loan to Youxin (Anhui) Industrial Investment Group Co., Ltd. was fully repaid on **April 9, 2025**[74](index=74&type=chunk) - Total remuneration for directors and other key management personnel increased from **RMB 6,183 thousand** in H1 2024 to **RMB 20,579 thousand** in H1 2025, primarily due to increased bonuses[71](index=71&type=chunk) [20. Events After the Reporting Period](index=22&type=section&id=Note%2020%20Events%20After%20the%20Reporting%20Period) No significant events after the reporting period require disclosure as of June 30, 2025 - No significant events after the reporting period require disclosure as of **June 30, 2025**[72](index=72&type=chunk) [21. Approval of Financial Statements](index=22&type=section&id=Note%2021%20Approval%20of%20Financial%20Statements) The Board of Directors approved and authorized the publication of the interim financial statements on August 22, 2025 - The Board of Directors approved and authorized the publication of the interim financial statements on **August 22, 2025**[73](index=73&type=chunk) Management Discussion and Analysis [Business Review](index=23&type=section&id=Business%20Review) Dida Chuxing, a technology-driven mobility platform, provides ride-sharing and smart taxi services, with H1 2025 adjusted net profit growing 4.7%, demonstrating sustained profitability - As of **June 30, 2025**, Dida Chuxing had over **395 million** registered users[75](index=75&type=chunk) - In H1 2025, total revenue was **RMB 286.3 million**, and adjusted net profit increased by **4.7%** year-on-year to **RMB 135.8 million**[75](index=75&type=chunk) [Ride-sharing Business](index=23&type=section&id=Ride-sharing%20Business) The ride-sharing business, available in 366 cities, had 19.9 million certified private car owners as of June 30, 2025 - As of **June 30, 2025**, ride-sharing services were available in **366** cities nationwide, with **19.9 million** certified private car owners on the platform[76](index=76&type=chunk) Key Operating Data for Ride-sharing Business (H1 2025) | Metric | Data | | :--- | :--- | | Transaction Value | RMB 2,608 million | | Number of Orders | 43.2 million | [Taxi Business](index=23&type=section&id=Taxi%20Business) Smart taxi services offer ride-hailing solutions and the Phoenix Taxi Cloud Platform, with services available in 96 cities across China as of June 30, 2025 - Smart taxi services have been launched, focusing on ride-hailing solutions, and the Phoenix Taxi Cloud Platform has been introduced for taxi companies and associations[77](index=77&type=chunk) - As of **June 30, 2025**, taxi ride-hailing services were available in **96** cities in China[77](index=77&type=chunk) [Outlook](index=24&type=section&id=Outlook) The company will optimize ride-sharing user experience, launch aggregated mobility services, and promote dynamic pricing for taxi services, offering more after-sales services - Continued optimization of the station-based carpooling ride-sharing model aims to reduce driver detours and passenger fares[79](index=79&type=chunk) - Plans to launch aggregated mobility services, collaborating with compliant capacity platforms to address unmet ride-sharing demands[80](index=80&type=chunk) - Plans to partner with third parties to offer more after-sales services for private car owners, including maintenance, financing, insurance, and used car transactions[81](index=81&type=chunk) - The taxi business will continue to collaborate with local authorities, industry associations, taxi companies, and drivers to promote dynamic pricing solutions[82](index=82&type=chunk) [Financial Review](index=25&type=section&id=Financial%20Review) This section reviews Dida Chuxing's H1 2025 financial performance, noting overall revenue decline but adjusted net profit growth, reflecting efforts in cost control and efficiency improvement [Revenue](index=25&type=section&id=Revenue) H1 2025 total revenue decreased by 29.1% year-on-year, with declines in ride-sharing due to competition, smart taxi due to strategic adjustments, and advertising due to macroeconomic impacts Revenue Breakdown by Business Line | Business Line | H1 2025 (RMB thousand) | Share (%) | H1 2024 (RMB thousand) | Share (%) | | :--- | :--- | :--- | :--- | :--- | | Ride-sharing Platform Services | 274,649 | 95.9 | 389,228 | 96.3 | | Smart Taxi Services | 2,497 | 0.9 | 3,097 | 0.8 | | Advertising and Other Services | 9,200 | 3.2 | 11,805 | 2.9 | | **Total** | **286,346** | **100.0** | **404,130** | **100.0** | - The decrease in ride-sharing platform service revenue was primarily due to increased competition in the mobility industry, leading to a reduction in completed orders[87](index=87&type=chunk) - The decline in smart taxi service revenue was mainly due to a strategic shift from online ride-hailing to an integrated hailing and online model, which has not yet begun monetization[87](index=87&type=chunk) [Cost of Services](index=26&type=section&id=Cost%20of%20Services) H1 2025 cost of services decreased by 12.4% year-on-year, with reductions across segments due to lower transaction volume, fewer completed orders, and programmatic advertising expansion Cost of Services Breakdown by Business Line | Business Line | H1 2025 (RMB thousand) | Share (%) | H1 2024 (RMB thousand) | Share (%) | | :--- | :--- | :--- | :--- | :--- | | Ride-sharing Platform Services | 90,131 | 95.2 | 100,536 | 93.1 | | Smart Taxi Services | 3,554 | 3.8 | 5,473 | 5.1 | | Advertising and Other Services | 909 | 1.0 | 1,987 | 1.8 | | **Total** | **94,594** | **100.0** | **107,996** | **100.0** | - The decrease in ride-sharing platform service costs was primarily due to lower payment processing fees resulting from reduced total transaction value, decreased insurance costs due to fewer completed orders, and reduced subsidies for private car owners[90](index=90&type=chunk) - The decrease in advertising and other service costs was mainly due to the expansion of programmatic advertising services, which are more cost-effective[91](index=91&type=chunk) [Gross Profit/(Loss) and Gross Margin](index=27&type=section&id=Gross%20Profit%2F(Loss)%20and%20Gross%20Margin) H1 2025 gross profit was RMB 191.8 million, with gross margin declining to 67.0%, reflecting decreased ride-sharing margin, improved smart taxi loss margin, and increased advertising margin Gross Profit and Gross Margin Breakdown by Business Line | Business Line | H1 2025 Gross Profit (RMB thousand) | H1 2025 Gross Margin (%) | H1 2024 Gross Profit (RMB thousand) | H1 2024 Gross Margin (%) | | :--- | :--- | :--- | :--- | :--- | | Ride-sharing Platform Services | 184,518 | 67.2 | 288,692 | 74.2 | | Smart Taxi Services | (1,057) | (42.3) | (2,376) | (76.7) | | Advertising and Other Services | 8,291 | 90.1 | 9,818 | 83.2 | | **Total** | **191,752** | **67.0** | **296,134** | **73.3** | - The decrease in ride-sharing platform service gross margin was primarily due to increased commissions from third-party aggregation platform collaborations and higher technical infrastructure operation and maintenance service fees[94](index=94&type=chunk) - The smart taxi service gross loss margin improved, but revenue decreased, reflecting the initial phase of strategic transformation[94](index=94&type=chunk) [Other Income](index=28&type=section&id=Other%20Income) H1 2025 other income increased, primarily due to higher interest income from bank balances and loans to an associated company - Other income increased from **RMB 10.5 million** in H1 2024 to **RMB 12.0 million** in H1 2025[96](index=96&type=chunk) - The increase was primarily due to higher interest income from increased bank balances and restricted cash, and interest income from a loan to an associated company[96](index=96&type=chunk) [Other Gains and Losses](index=28&type=section&id=Other%20Gains%20and%20Losses) H1 2025 other gains significantly increased, primarily driven by substantial fair value gains on financial assets at fair value through profit or loss - Other gains significantly increased from **RMB 0.5 million** in H1 2024 to **RMB 80.5 million** in H1 2025[97](index=97&type=chunk) - The increase was primarily due to increased fair value gains on financial assets at fair value through profit or loss[97](index=97&type=chunk) [Impairment Loss Reversal/Impairment Loss recognised under Expected Credit Loss Model](index=28&type=section&id=Impairment%20Loss%20Reversal%2FImpairment%20Loss%20recognised%20under%20Expected%20Credit%20Loss%20Model) H1 2025 recorded an impairment loss reversal under the expected credit loss model, compared to an impairment loss in the prior year, mainly due to a loan impairment reversal - In H1 2025, an impairment loss reversal of **RMB 18.6 million** was recorded under the expected credit loss model[98](index=98&type=chunk) - In the prior year, an impairment loss of **RMB 0.3 million** was recorded, primarily due to the reversal of impairment for a loan to associated company Youxin Co., Ltd., which was fully repaid on **April 9, 2025**[98](index=98&type=chunk) [Selling and Marketing Expenses](index=28&type=section&id=Selling%20and%20Marketing%20Expenses) H1 2025 selling and marketing expenses decreased by 15.2% year-on-year, due to prudent promotion, precise marketing, and reduced customer service outsourcing - Selling and marketing expenses decreased from **RMB 77.9 million** in H1 2024 to **RMB 66.1 million** in H1 2025[99](index=99&type=chunk) - The decrease was primarily due to prudent promotion strategies and more precise algorithm-driven marketing methods, leading to reduced user subsidies and incentives, as well as marketing and promotion expenses[99](index=99&type=chunk) [Administrative Expenses](index=28&type=section&id=Administrative%20Expenses) H1 2025 administrative expenses increased by 145.5% year-on-year, mainly due to higher employee bonuses and professional service fees - Administrative expenses increased from **RMB 14.3 million** in H1 2024 to **RMB 35.1 million** in H1 2025[100](index=100&type=chunk) - The increase was primarily due to higher employee bonuses and increased professional service fees paid to relevant professionals[100](index=100&type=chunk) [Research and Development Expenses](index=29&type=section&id=Research%20and%20Development%20Expenses) H1 2025 research and development expenses decreased by 11.8% year-on-year, primarily due to reduced employee expenses from fewer R&D personnel - Research and development expenses decreased from **RMB 74.2 million** in H1 2024 to **RMB 65.5 million** in H1 2025[101](index=101&type=chunk) - The decrease was primarily due to reduced employee expenses resulting from a decrease in the number of R&D personnel[101](index=101&type=chunk) [Fair Value Change of Preferred Shares](index=29&type=section&id=Fair%20Value%20Change%20of%20Preferred%20Shares) H1 2025 recorded no gain or loss from preferred share fair value changes, unlike the prior year's significant gain due to post-listing conversion - In H1 2025, the company recorded no gain or loss from fair value changes of preferred shares[102](index=102&type=chunk) - A gain of **RMB 870.2 million** was recorded in H1 2024, primarily due to the automatic conversion of preferred shares to ordinary shares at fair value after the company's listing[102](index=102&type=chunk) [Share-based Payment Expenses](index=29&type=section&id=Share-based%20Payment%20Expenses) H1 2025 share-based payment expenses significantly decreased by 89.9% year-on-year, primarily due to the reversal of share options from forfeited unvested options - Share-based payment expenses decreased from **RMB 14.9 million** in H1 2024 to **RMB 1.5 million** in H1 2025[103](index=103&type=chunk) - The decrease was primarily due to the reversal of share-based payment expenses arising from share options, as unvested share options granted to resigned employees were forfeited during the six months ended **June 30, 2025**[103](index=103&type=chunk) [Finance Costs](index=29&type=section&id=Finance%20Costs) H1 2025 finance costs slightly decreased, primarily due to a reduction in interest on lease liabilities - Finance costs decreased from **RMB 0.17 million** in H1 2024 to **RMB 0.15 million** in H1 2025[104](index=104&type=chunk) - The decrease was primarily due to a reduction in interest on lease liabilities[104](index=104&type=chunk) [Profit Before Tax](index=29&type=section&id=Profit%20Before%20Tax) H1 2025 profit before tax significantly decreased, primarily impacted by factors such as preferred share fair value changes - Profit before tax decreased from **RMB 958.4 million** in H1 2024 to **RMB 134.6 million** in H1 2025[105](index=105&type=chunk) [Income Tax Expense](index=29&type=section&id=Income%20Tax%20Expense) H1 2025 income tax expense significantly decreased, mainly due to the utilization of deferred tax assets to offset current period profit - Income tax expense decreased from **RMB 10.5 million** in H1 2024 to **RMB 0.3 million** in H1 2025[106](index=106&type=chunk) - The decrease was primarily due to the utilization of deferred tax assets to offset current period profit[106](index=106&type=chunk) [Profit for the Period](index=30&type=section&id=Profit%20for%20the%20Period) H1 2025 net profit significantly decreased, primarily influenced by the fair value change of preferred shares - Net profit for the period decreased from **RMB 947.9 million** in H1 2024 to **RMB 134.3 million** in H1 2025[107](index=107&type=chunk) [Adjusted Net Profit for the Period (Non-IFRS Measure)](index=30&type=section&id=Adjusted%20Net%20Profit%20for%20the%20Period%20(Non-IFRS%20Measure)) Adjusted net profit (non-IFRS measure) increased by 4.7%, providing a clearer view of operating performance after adjusting for non-recurring items Reconciliation of Adjusted Net Profit for the Period | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Profit for the Period | 134,303 | 947,884 | | Share-based Payment Expenses | 1,485 | 14,855 | | Fair Value Change of Preferred Shares | – | (870,196) | | Listing Expenses | – | 37,187 | | **Adjusted Net Profit for the Period** | **135,788** | **129,730** | - Adjusted net profit (non-IFRS measure) increased by **4.7%** year-on-year, indicating improved profitability after excluding non-cash and non-recurring items[111](index=111&type=chunk) [Liquidity and Sources of Working Capital](index=30&type=section&id=Liquidity%20and%20Sources%20of%20Working%20Capital) Company cash is used for working capital and financial asset purchases, with current assets increasing due to financial assets and net cash from operating activities - Current assets increased from **RMB 1,752.9 million** as of December 31, 2024, to **RMB 1,914.7 million** as of June 30, 2025[113](index=113&type=chunk) - The increase was primarily due to an increase in financial assets at fair value through profit or loss and net cash generated from operating activities[113](index=113&type=chunk) [Cash Flows](index=31&type=section&id=Cash%20Flows) As of June 30, 2025, cash and cash equivalents decreased, mainly due to purchases of financial assets and time deposits, despite significant growth in operating cash flow Cash Flow Summary | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Net Cash from Operating Activities | 56,180 | 4,025 | | Net Cash (Used in)/Generated from Investing Activities | (111,605) | 142,683 | | Net Cash (Used in)/Generated from Financing Activities | (3,187) | 204,570 | | Net (Decrease)/Increase in Cash and Cash Equivalents | (58,612) | 351,278 | | Cash and Cash Equivalents at Period-End | 998,444 | 1,036,805 | - Cash and cash equivalents at period-end decreased, primarily due to purchases of financial assets at fair value through profit or loss and time deposits[114](index=114&type=chunk) [Capital Expenditure](index=31&type=section&id=Capital%20Expenditure) H1 2025 capital expenditure decreased, primarily for property and equipment acquisition - Total capital expenditure for H1 2025 was approximately **RMB 0.1 million**, primarily comprising the acquisition of property and equipment[117](index=117&type=chunk) [Capital Commitments](index=32&type=section&id=Capital%20Commitments) As of June 30, 2025, the Group had no capital commitments - As of **June 30, 2025**, the Group had no capital commitments[118](index=118&type=chunk) [Indebtedness](index=32&type=section&id=Indebtedness) As of June 30, 2025, total indebtedness decreased, primarily comprising trade and other payables and lease liabilities, with no outstanding borrowings Indebtedness Details | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Current Debt: Trade and Other Payables | 595,868 | 613,441 | | Current Debt: Lease Liabilities | 4,724 | 5,771 | | Non-current Debt: Lease Liabilities | 2,311 | 4,306 | | **Total** | **602,903** | **623,518** | - As of **June 30, 2025**, the company had no outstanding borrowings or unutilized bank facilities[120](index=120&type=chunk) [Contingent Liabilities](index=32&type=section&id=Contingent%20Liabilities) As of June 30, 2025, the Group had no significant contingent liabilities, guarantees, or pending litigation - As of **June 30, 2025**, the Group had no significant contingent liabilities, guarantees, or any material pending or threatened litigation or claims against any member of the Group[121](index=121&type=chunk) [Pledge of Assets](index=32&type=section&id=Pledge%20of%20Assets) As of June 30, 2025, the Group had not pledged any assets - As of **June 30, 2025**, the Group had not pledged any assets[122](index=122&type=chunk) [Key Financial Ratios](index=33&type=section&id=Key%20Financial%20Ratios) As of June 30, 2025, key financial ratios indicate good liquidity and a healthy debt level, with improved adjusted net profit margin Key Financial Ratios | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Gross Margin | 67.0% | 73.3% | | Adjusted Net Profit Margin | 47.4% | 32.1% | | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Current Ratio | 318.8% | 283.1% | | Debt-to-Asset Ratio | 29.2% | 32.0% | - Adjusted net profit margin significantly increased from **32.1%** in H1 2024 to **47.4%** in H1 2025[124](index=124&type=chunk) - Both the current ratio and debt-to-asset ratio indicate a sound financial position for the company[124](index=124&type=chunk) [Foreign Currency Risk Management](index=33&type=section&id=Foreign%20Currency%20Risk%20Management) The company faces foreign currency risk from non-RMB denominated financial items and will implement hedging measures as necessary - The company faces foreign currency risk as some financial items are denominated in non-RMB currencies[125](index=125&type=chunk) - The company will continuously review economic conditions and foreign currency risks, implementing hedging measures as necessary to mitigate risks[125](index=125&type=chunk) Other Information [Use of Proceeds](index=34&type=section&id=Use%20of%20Proceeds) Net proceeds from the global offering were utilized for user expansion, technology enhancement, and monetization, with remaining funds expected to be fully used by December 31, 2025 Use of Proceeds from Global Offering | Purpose | Net Proceeds from Global Offering (HK$ million) | Utilized as of June 30, 2025 (HK$ million) | Unutilized as of June 30, 2025 (HK$ million) | | :--- | :--- | :--- | :--- | | Expanding User Base and Strengthening Marketing and Promotion Programs | 91.17 | 91.17 | – | | Enhancing Technological Capabilities and Upgrading Security Mechanisms | 63.82 | 63.82 | – | | Strengthening Monetization Capabilities | 27.35 | 22.85 | 4.50 | | **Total** | **182.34** | **177.84** | **4.50** | - The intended use of net proceeds remains unchanged, and the remaining amount is expected to be fully utilized by **December 31, 2025**[130](index=130&type=chunk) [Employees, Training and Remuneration Policy](index=35&type=section&id=Employees,%20Training%20and%20Remuneration%20Policy) As of June 30, 2025, the company had 368 employees with staff costs of RMB 121.8 million, utilizing a remuneration committee and share incentive plans for compensation and motivation - As of **June 30, 2025**, the company had **368** employees[131](index=131&type=chunk) - For the six months ended **June 30, 2025**, staff costs (including directors' emoluments and share-based payment expenses) were approximately **RMB 121.8 million**[131](index=131&type=chunk) - The company has adopted several share incentive schemes to provide equity incentives to the Group's employees, directors, and senior management[132](index=132&type=chunk) [Purchase, Sale or Redemption of the Company’s Listed Securities](index=35&type=section&id=Purchase,%20Sale%20or%20Redemption%20of%20the%20Company%E2%80%99s%20Listed%20Securities) For H1 2025, neither the company nor its subsidiaries purchased, sold, or redeemed any listed securities, and the company held no treasury shares - For the six months ended **June 30, 2025**, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities[133](index=133&type=chunk) - As of **June 30, 2025**, the company held no treasury shares as defined by the Listing Rules[134](index=134&type=chunk) [Major Acquisitions and Disposals and Major Investments](index=35&type=section&id=Major%20Acquisitions%20and%20Disposals%20and%20Major%20Investments) For H1 2025, the Group had no major acquisitions, disposals, or major investments - For the six months ended **June 30, 2025**, the Group had no major acquisitions, disposals, or major investments[135](index=135&type=chunk) [Future Plans for Major Investments or Capital Assets](index=35&type=section&id=Future%20Plans%20for%20Major%20Investments%20or%20Capital%20Assets) Except as disclosed, as of June 30, 2025, the company had no detailed future plans for major investments or capital assets - Except as disclosed in the prospectus and the use of proceeds section of this announcement, as of **June 30, 2025**, the company had no detailed future plans for major investments or capital assets[136](index=136&type=chunk) [Interim Dividend](index=35&type=section&id=Interim%20Dividend) The Board of Directors resolved not to pay any interim dividend for H1 2025 - The Board of Directors resolved not to pay any interim dividend for the six months ended **June 30, 2025**[137](index=137&type=chunk) [Public Float](index=36&type=section&id=Public%20Float) As of this announcement date, the company has maintained a sufficient public float in accordance with the Listing Rules - As of the date of this announcement, the company has maintained a sufficient public float in accordance with the Listing Rules[138](index=138&type=chunk) [Compliance with Corporate Governance Code](index=36&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) For H1 2025, the company complied with the Corporate Governance Code, with the Chairman and CEO roles combined, which the Board believes benefits group management - For the six months ended **June 30, 2025**, the company has complied with the code provisions set out in the Corporate Governance Code[139](index=139&type=chunk) - The roles of Chairman and Chief Executive Officer are combined and held by Mr. Song Zhongjie, which the Board believes benefits the Group's management and business development[140](index=140&type=chunk) [Compliance with Model Code](index=36&type=section&id=Compliance%20with%20Model%20Code) All Directors confirmed compliance with the Model Code for H1 2025, and the company is unaware of any employee breaches - Each Director has confirmed compliance with the Model Code for the six months ended **June 30, 2025**[141](index=141&type=chunk) - For the six months ended **June 30, 2025**, the company is unaware of any instances of relevant employees breaching the Model Code[141](index=141&type=chunk) [Audit Committee and Review of Interim Financial Results](index=37&type=section&id=Audit%20Committee%20and%20Review%20of%20Interim%20Financial%20Results) The Audit Committee, comprising three independent non-executive directors, reviewed and approved the Group's H1 2025 unaudited interim financial information, confirming compliance - The Audit Committee comprises three independent non-executive directors, with Ms. Wu Wenjie serving as chairperson[142](index=142&type=chunk) - The Audit Committee has reviewed, and the Board has approved, the Group's unaudited interim condensed consolidated financial information for the six months ended **June 30, 2025**, and is satisfied that it has been prepared in accordance with applicable accounting standards and fairly presents the Group's financial position and results[143](index=143&type=chunk) [Events After Reporting Period](index=37&type=section&id=Events%20After%20Reporting%20Period) As of this announcement date, there are no significant events requiring disclosure since the end of the reporting period - As of the date of this announcement, there are no significant events requiring disclosure since the end of the reporting period[144](index=144&type=chunk) [Publication of 2025 Interim Results and 2025 Interim Report](index=37&type=section&id=Publication%20of%202025%20Interim%20Results%20and%202025%20Interim%20Report) This announcement is published on the HKEX and company websites, with the interim report to be published in due course - This announcement is published on the HKEX website (www.hkexnews.hk) and the company's website (www.didachuxing.com)[145](index=145&type=chunk) [Acknowledgement](index=37&type=section&id=Acknowledgement) The Board of Directors extends its sincere gratitude to customers, business partners, employees, management team, and shareholders - The Board of Directors extends its sincere gratitude for the trust of customers and business partners, the diligence, dedication, loyalty, and integrity of our employees and management team, and the continuous support of shareholders[146](index=146&type=chunk) Definitions

Financial Performance - The company recorded revenue of approximately RMB 1,292.64 million for the six months ended June 30, 2025, a decrease of about RMB 104.47 million or 7.48% compared to RMB 1,397.11 million in the same period of 2024[2]. - Profit attributable to equity holders of the company was approximately RMB 211.07 million, a decline of 10.29% from RMB 235.28 million in the same period of 2024[2][6]. - Basic earnings per share for the period were RMB 0.91, compared to RMB 1.01 in 2024[2][6]. - Gross profit for the period was RMB 906.28 million, down from RMB 983.30 million in 2024, reflecting a decrease in gross margin[4]. - Total comprehensive income for the period was RMB 251.81 million, compared to RMB 196.74 million in 2024, indicating an increase in overall profitability[6]. - The group's profit before tax for the six months ended June 30, 2025, was RMB 211,065,000, a decrease of 10.3% compared to RMB 235,283,000 for the same period in 2024[33]. - The total tax expense for the period was RMB 33,965,000, a decrease of 24.4% compared to RMB 44,834,000 for the same period in 2024[28]. - The overall gross profit margin for the reporting period was 70.11%, remaining stable compared to 70.38% in the same period of 2024[82]. Research and Development - Research and development expenses amounted to approximately RMB 98.40 million, down by RMB 27.00 million or 21.53% from RMB 125.40 million in 2024, representing 7.61% of revenue[2][4]. - The company received government subsidies amounting to RMB 7,907,000 for R&D activities, an increase from RMB 6,963,000 in 2024[23]. - Research and development costs for the six months ended June 30, 2025, were RMB 98,401,000, down 21.5% from RMB 125,400,000 in 2024[24]. - The group has several key R&D projects progressing, including the registration phase for multiple new products expected to enhance future revenue streams[46]. - The group will promote high-end hyaluronic acid products and continue clinical trials for important R&D projects, including painless cross-linked hyaluronic acid[77]. Assets and Liabilities - Non-current assets totaled RMB 3,483.08 million as of June 30, 2025, slightly up from RMB 3,463.12 million at the end of 2024[7]. - Current assets increased to RMB 3,702.72 million from RMB 3,658.27 million at the end of 2024, driven by higher trade receivables and cash balances[8]. - The company's total equity was RMB 5,882.26 million, a slight decrease from RMB 5,917.04 million at the end of 2024[8]. - The total liabilities as of June 30, 2025, were approximately RMB 1,303.54 million, with a debt-to-asset ratio of 18.14%, an increase of 1.23 percentage points from 16.91% on December 31, 2024[92]. - Cash and cash equivalents as of June 30, 2025, were approximately RMB 614.29 million, a decrease of about RMB 498.62 million compared to RMB 1,112.91 million on December 31, 2024[93]. Share Repurchase and Dividends - The company repurchased a total of 12,938,800 H-shares from March 2020 to December 2024, with 12,742,900 shares canceled by December 31, 2024[10]. - For A-shares, the company completed the first round of repurchases totaling 2,015,674 shares from August 2023 to August 2024, followed by a second round of 1,832,421 shares from November 2024 to June 2025[11]. - The board declared an interim dividend of RMB 0.40 per share (tax inclusive), unchanged from the same period in 2024[2]. - The board approved an interim dividend of RMB 0.40 per share (tax included), amounting to a total of RMB 91,493,200.00 (tax included) based on 232,581,095 shares issued[103]. Market Performance - Revenue from customer contracts for the six months ended June 30, 2025, was RMB 1,292,636,000, a decrease of 7.5% compared to RMB 1,397,112,000 for the same period in 2024[19]. - Revenue from medical beauty and wound care products was RMB 573,270,000, down from RMB 631,817,000 in 2024, representing a decline of 9.2%[19]. - Revenue from ophthalmic products decreased to RMB 366,148,000 from RMB 449,659,000, a decline of 18.5%[19]. - The company's product lines showed varied performance, with the ophthalmic products segment declining by 18.57% year-on-year[44]. - The medical beauty market is shifting from rapid expansion to a focus on quality and value, amidst challenges such as regulatory tightening and slowing growth of end institutions[50]. Regulatory and Compliance - The company has complied with all applicable provisions of the Corporate Governance Code under the Hong Kong Listing Rules[104]. - The company has adopted the standard code of conduct for securities trading by directors and supervisors, confirming compliance during the reporting period[105]. - The audit committee held four meetings during the reporting period to review financial statements and internal controls[106]. Future Outlook - The group plans to continue focusing on the four rapidly developing treatment areas: medical beauty, ophthalmology, orthopedics, and surgery, while enhancing research and development and operational efficiency[75]. - The group aims to integrate acquired companies effectively to maximize synergy, improve operational efficiency, and enhance core competitiveness by the second half of 2025[76]. - The group anticipates multiple high-end products, including hydrophobic non-spherical artificial lenses, to be approved within the year, enhancing the overall product line[78].

[Financial Highlights](index=1&type=section&id=%E8%B2%A1%E5%8B%99%E6%91%98%E8%A6%81) During the reporting period, the company achieved significant growth in revenue, gross profit, R&D expenses, and net profit attributable to parent company shareholders, but the board does not recommend an interim dividend Financial Highlights for the Six Months Ended June 30, 2025 | Indicator | June 30, 2025 (RMB million) | June 30, 2024 (RMB million) | Year-over-year growth rate (%) | | :--- | :--- | :--- | :--- | | Revenue | 329.7 | 249.1 | 32.4 | | Gross Profit | 284.3 | 226.7 | 25.4 | | R&D Expenses | 25.4 | 21.7 | 17.0 | | Net Profit Attributable to Parent Company Shareholders | 182.0 | 140.2 | 29.8 | - The Board does not recommend an interim dividend for the six months ended June 30, 2025 (for the six months ended June 30, 2024: nil)[5](index=5&type=chunk) [Management Discussion and Analysis](index=2&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%A4%E8%A8%8E%E8%AB%96%E8%88%87%E5%88%86%E6%9E%90) During the reporting period, the company maintained strong business momentum with stable revenue growth, continuous innovation in cardiovascular interventional devices, particularly in biodegradable technology and structural heart disease treatment, and active expansion in domestic and international markets [Business Review](index=2&type=section&id=%E6%A5%AD%E5%8B%99%E5%9B%9E%E9%A1%A7) The company specializes in R&D, production, and commercialization of cardiovascular interventional devices, offering a broad product portfolio including congenital heart disease occluders, PFO and LAA occluders, heart valves, mechanical circulatory support, and access products, with many innovative products successfully commercialized or in clinical stages [Overall Operating Performance](index=5&type=section&id=%E6%95%B4%E9%AB%94%E7%B6%93%E7%87%9F%E6%A5%AD%E7%B8%BE) During the reporting period, the company achieved double-digit growth in revenue and net profit, significantly increased operating cash flow, and maintained steady growth in total assets Financial Highlights for the Six Months Ended June 30, 2025 | Indicator | June 30, 2025 (RMB million) | June 30, 2024 (RMB million) | Year-over-year growth rate (%) | | :--- | :--- | :--- | :--- | | Revenue | 329.7 | 249.1 | 32.4 | | Net Profit Attributable to Parent Company Shareholders | 182.0 | 140.2 | 29.8 | | Net Cash Generated from Operating Activities | 166.8 | 103.5 | 61.2 | | Total Assets (end of period) | 2,279.1 | 2,083.0 (beginning of reporting period) | 9.4 | | Net Assets (end of period) | 1,973.2 | 1,997.0 (beginning of reporting period) | -1.2 | [Congenital Heart Disease Occluder Products](index=2&type=section&id=%E5%85%88%E5%A4%A9%E6%80%A7%E5%BF%83%E8%87%9F%E7%97%85%E5%B0%81%E5%A0%B5%E5%99%A8%E7%94%A2%E5%93%81) The company maintains a leading position in congenital heart disease occluders, with third-generation oxide film and fourth-generation biodegradable occluder series successfully commercialized, becoming a cornerstone of business growth and embodying the "intervention without implant" philosophy - As of the date of this announcement, the Company has a total of **30** listed occluders, heart valve and accessory products, **4** products under registration review and preparation, and **28** pipeline products including occluders, heart valve and surgical accessories, and mechanical circulatory support at various R&D stages[6](index=6&type=chunk) - The fourth-generation MemoSorb® biodegradable atrial septal defect occluder product obtained the medical device registration certificate from the NMPA in August 2024 and has been rapidly commercialized[11](index=11&type=chunk) - Adhering to the technical concept of "intervention without implant," the Group will continue to promote the R&D and promotion of biodegradable materials[11](index=11&type=chunk) [PFO and LAA Occluder Products](index=6&type=section&id=%E5%8D%B5%E5%9C%93%E5%AD%94%E6%9C%AA%E9%96%89%E5%8F%8A%E5%B7%A6%E5%BF%83%E8%80%B3%E5%B0%81%E5%A0%B5%E5%99%A8%E7%94%A2%E5%93%81) First-generation cardiogenic stroke prevention products have been commercialized, with third-generation MemoSorb® biodegradable PFO occluders achieving over **RMB 200 million** in sales since launch, second-generation oxide film PFO occluders entering the registration application stage, and biodegradable LAA occluders entering multi-center clinical trials - The third-generation MemoSorb® biodegradable PFO occluder was approved for market in September 2023, with cumulative sales exceeding **RMB 200 million** as of June 30, 2025[12](index=12&type=chunk) - The second-generation oxide film PFO occluder has completed clinical follow-up and entered the registration application stage, with NMPA registration submission expected in **Q3 2025**[12](index=12&type=chunk) - The Bio-Lefort® biodegradable LAA occluder pipeline product has officially entered the multi-center clinical trial enrollment phase[12](index=12&type=chunk) [Aortic and Peripheral Occluder Devices](index=7&type=section&id=%E4%B8%BB%E5%8B%95%E8%84%88%E5%8F%8A%E5%A4%96%E5%91%A8%E5%B0%81%E5%A0%B5%E5%99%A8%E6%A2%B0) The company is strategically developing biodegradable aortic occluders and aortic embolization occluders in the aortic and peripheral fields, with both global innovative products having entered clinical trial stages, poised to address international challenges and offering promising market prospects - Both biodegradable aortic occluders and aortic embolization occluders have completed type testing and animal experiments, entering the clinical trial stage[13](index=13&type=chunk) - Currently, no targeted therapeutic devices for aortic dissection rupture and post-aortic aneurysm repair type II endoleak have been commercialized, making both of the Group's products global innovations[13](index=13&type=chunk) [Heart Valve Pipeline Products](index=7&type=section&id=%E5%BF%83%E8%87%9F%E7%93%A3%E8%86%9C%E5%9C%A8%E7%A0%94%E7%94%A2%E5%93%81) The ScienCrown® transcatheter aortic valve system was commercialized in early 2025, entering over **70** clinical centers in China, and the company is actively developing new products for aortic regurgitation, mitral valve repair, and replacement - The ScienCrown® transcatheter aortic valve system was officially commercialized in early 2025, having entered over **70** clinical centers in China for implantation[14](index=14&type=chunk) - A transcatheter aortic valve system for patients with isolated aortic regurgitation is currently under development, having completed animal experiments and type testing, with clinical trials planned for late 2025[14](index=14&type=chunk)[15](index=15&type=chunk) - The transapical mitral valve clip system is undergoing its second phase of clinical trials, with registration application to the NMPA expected to be postponed until 2026[15](index=15&type=chunk) [Mechanical Circulatory Support Products](index=8&type=section&id=%E6%A9%9F%E6%A2%B0%E5%BE%AA%E7%92%B0%E8%BC%94%E5%8A%A9%E7%94%A2%E5%93%81) The company has entered the mechanical circulatory support (MCS) device field, with a product line covering short-term and long-term ventricular assist systems, and multiple products in preclinical or type testing stages, aiming to become a core participant in this domain - The Company has entered the mechanical circulatory support (MCS) device field, with these devices designed to provide temporary or long-term support for patients requiring cardiac assistance[16](index=16&type=chunk) - The transcatheter left ventricular assist system for left ventricular support is in the preclinical type testing stage, with batch animal experiments already initiated[16](index=16&type=chunk) - The Company is one of the earliest pioneers in the domestic MCS field and is confident in becoming one of the most core and valuable participants in this area[16](index=16&type=chunk) [Access Products](index=8&type=section&id=%E9%80%9A%E8%B7%AF%E9%A1%9E%E7%94%A2%E5%93%81) The company boasts a rich pipeline of access products, with RF-Lance® radiofrequency puncture devices and needles approved for market, biodegradable LAA occluder delivery systems launched, and multiple valve surgery accessories (such as aortic valve balloon dilation catheters) approved or in clinical/registration stages - The RF-Lance® radiofrequency puncture device and RF-Lance® disposable radiofrequency atrial septal puncture needle were approved for market

[Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=1&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) The Group achieved a significant turnaround in performance in the first half of 2025, shifting from a loss in the same period of 2024 to a profit, primarily driven by a substantial increase in fair value gains on financial assets. Despite a decrease in revenue from continuing operations, overall profitability significantly improved Profit/(Loss) for the Period Overview | Metric | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (HK$ thousand) | | :--- | :--- | :--- | :--- | | Profit/(Loss) for the period | 28,054 | (48,819) | 76,873 (Turned to profit from loss) | | Profit/(Loss) for the period from continuing operations | 36,186 | (36,319) | 72,505 (Turned to profit from loss) | | Loss for the period from discontinued operations | (8,132) | (12,500) | 4,368 (Loss narrowed) | | Profit/(Loss) for the period attributable to owners of the Company | 11,243 | (47,969) | 59,212 (Turned to profit from loss) | | Profit/(Loss) for the period attributable to non-controlling interests | 16,811 | (850) | 17,661 (Turned to profit from loss) | Earnings/(Loss) Per Share | Metric | 2025 (HK cents) | 2024 (HK cents) | | :--- | :--- | :--- | | From continuing and discontinued operations (basic and diluted) | 0.40 | (1.71) | | From continuing operations (basic and diluted) | 0.60 | (1.26) | Revenue from Continuing Operations | Metric | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue from sales of goods and services provided | 36,581 | 46,202 | -20.8% | | Fair value loss on financial assets at fair value through profit or loss held for trading, net | (5,235) | – | N/A | | Interest income from money lending business | 175 | 1,675 | -89.6% | Gross Profit | Metric | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Gross Profit | 13,548 | 19,128 | -29.2% | Total Other Comprehensive Income/(Loss) | Metric | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Total comprehensive income/(loss) for the period | 26,937 | (48,267) | [Condensed Consolidated Statement of Financial Position](index=4&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's non-current assets significantly increased due to fair value gains on financial assets, while both current assets and net current liabilities deteriorated. Despite this, total deficit narrowed due to profit for the period, and non-controlling interests increased Assets Overview | Metric | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Non-current assets | 491,267 | 376,266 | +30.5% | | Current assets | 121,950 | 174,053 | -30.0% | | **Total Assets** | **613,217** | **550,319** | **+11.4%** | Liabilities Overview | Metric | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Current liabilities | 614,622 | 557,983 | +10.1% | | Non-current liabilities | 4,762 | 32,978 | -85.6% | | **Total Liabilities** | **619,384** | **590,961** | **+4.8%** | Equity Overview | Metric | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change (HK$ thousand) | | :--- | :--- | :--- | :--- | | Equity (Deficit) attributable to owners of the Company | (63,837) | (83,200) | 19,363 (Deficit narrowed) | | Non-controlling interests | 57,670 | 42,558 | +15,112 | | **Total Deficit** | **(6,167)** | **(40,642)** | **34,475 (Deficit narrowed)** | Net Current Liabilities | Metric | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change (HK$ thousand) | | :--- | :--- | :--- | :--- | | Net current liabilities | (492,672) | (383,930) | (108,742) (Net liabilities increased) | [Notes to the Condensed Consolidated Financial Statements](index=6&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed notes supporting the condensed consolidated financial statements, covering general information, accounting policies, segment data, and specific financial line items [1. General Information and Basis of Preparation](index=6&type=section&id=1.%20General%20Information%20and%20Basis%20of%20Preparation) Touyun Biotech Group Company Limited, incorporated in Bermuda, primarily engages in QR code solutions, packaging product manufacturing and sales, securities investment and money lending, and the production and sale of Chlamydomonas reinhardtii and microalgae products - The Company was incorporated in Bermuda on **October 24, 2011**[7](index=7&type=chunk) - Principal activities include: (i) providing QR code and solutions on product packaging; (ii) manufacturing and selling packaging products; (iii) securities investment and trading and money lending; and (iv) manufacturing and selling Chlamydomonas reinhardtii, microalgae and related products[7](index=7&type=chunk) [2. Significant Accounting Policies](index=6&type=section&id=2.%20Significant%20Accounting%20Policies) The Group faces significant going concern uncertainties due to high net current liabilities and net liabilities. Management has formulated liquidity plans, including seeking new financing, negotiating with creditors, market development, and cost control, and has prepared financial statements on a going concern basis based on the expected effectiveness of these measures - As of June 30, 2025, the Group had net current liabilities of approximately **HK$492,672,000** and net liabilities of approximately **HK$6,167,000**, indicating significant uncertainties about its ability to continue as a going concern[8](index=8&type=chunk) - Liquidity plans include: negotiating new financing with financial institutions; communicating with directors and shareholders to request non-repayment or extension of payables; actively seeking more new financing sources; developing the sales market for Chlamydomonas reinhardtii and related products in Mainland China, and implementing cost control measures; and seeking other ways to increase working capital, such as disposing of unlisted investments in financial assets at fair value through profit or loss[8](index=8&type=chunk) - The Board of Directors is confident that the Group's financial position will recover and the going concern uncertainties will be resolved after the above measures become effective, thus the financial statements are prepared on a going concern basis[9](index=9&type=chunk) - The unaudited condensed interim consolidated financial statements are prepared in accordance with Hong Kong Accounting Standard 34 Interim Financial Reporting issued by the Hong Kong Institute of Certified Public Accountants and Appendix 16 of the Listing Rules, using the historical cost convention, except for equity investments measured at fair value[10](index=10&type=chunk)[11](index=11&type=chunk) - Accounting policies are consistent with the 2024 annual financial statements, except for amendments to Hong Kong Financial Reporting Standards mandatorily effective for annual periods beginning on or after January 1, 2025, such as the amendment to HKAS 21 "Lack of Exchangeability", which had no impact on the condensed interim consolidated financial information[12](index=12&type=chunk)[13](index=13&type=chunk) [3. Operating Segment Information](index=8&type=section&id=3.%20Operating%20Segment%20Information) The Group has three reportable continuing operations segments: packaging products, financial investment, and Chlamydomonas reinhardtii products, with the QR code business reclassified as a discontinued operation. The financial investment segment achieved significant profit growth in the first half of 2025, while packaging products and Chlamydomonas reinhardtii products segments faced expanding losses - The Group has three reportable continuing operations segments: packaging products business, financial investment business, and Chlamydomonas reinhardtii products business[16](index=16&type=chunk) - The operating segment related to the QR code business has been classified as a discontinued operation during the period[17](index=17&type=chunk) Segment Revenue and Results (Continuing Operations) | Segment | 2025 Revenue (HK$ thousand) | 2024 Revenue (HK$ thousand) | Revenue Change (%) | 2025 Results (HK$ thousand) | 2024 Results (HK$ thousand) | Results Change (HK$ thousand) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Packaging Products Business | 32,708 | 41,494 | -21.2% | (4,993) | (2,655) | (2,338) (Loss widened) | | Financial Investment Business | (5,060) | 1,675 | N/A | 68,076 | 847 | 67,229 (Profit significantly increased) | | Chlamydomonas reinhardtii Products Business | 3,873 | 4,708 | -17.7% | (15,150) | (12,738) | (2,412) (Loss widened) | | **Total** | **31,521** | **47,877** | **-34.2%** | **47,933** | **(14,546)** | **62,479 (Turned to profit from loss)** | [4. Revenue](index=9&type=section&id=4.%20Revenue) The Group's total revenue from continuing operations decreased by 34.2% year-on-year, primarily due to reduced sales of packaging products and Chlamydomonas reinhardtii products, as well as fair value losses on financial assets - Revenue comprises net sales of goods, value of services provided, net fair value gains/(losses) on financial assets at fair value through profit or loss, and interest income from money lending business[19](index=19&type=chunk) Revenue from Continuing Operations Details | Revenue Source | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Manufacturing and sales of packaging products | 32,708 | 41,494 | -21.2% | | Manufacturing and sales of Chlamydomonas reinhardtii products | 3,873 | 4,708 | -17.7% | | Fair value loss on financial assets at fair value through profit or loss held for trading, net | (5,235) | – | N/A | | Interest income from money lending business | 175 | 1,675 | -89.6% | | **Total** | **31,521** | **47,877** | **-34.2%** | - Revenue recognized at a point in time for the six months ended June 30, 2025, was **HK$36,581,000** (2024: HK$46,202,000)[25](index=25&type=chunk) [5. Other Income, Gains and Losses, Net](index=10&type=section&id=5.%20Other%20Income%2C%20Gains%20and%20Losses%2C%20Net) The Group's other income, gains, and losses, net, significantly increased, primarily driven by fair value gains on unlisted and listed equity investments, achieving a notable shift from loss to gain Other Income, Gains and Losses, Net | Item | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (HK$ thousand) | | :--- | :--- | :--- | :--- | | Bank interest income | 9 | 34 | -25 | | Rental income | 1,635 | 1,510 | +125 | | Exchange differences, net | (301) | 468 | -769 | | Fair value changes on non-trading financial assets at fair value through profit or loss, net — Unlisted equity investments | 35,650 | (10,001) | +45,651 (Turned to profit from loss) | | Fair value changes on non-trading financial assets at fair value through profit or loss, net — Listed equity investments | 36,869 | – | +36,869 | | Government grants | 165 | 217 | -52 | | Others | 787 | 11 | +776 | | **Total** | **74,814** | **(7,761)** | **+82,575 (Turned to profit from loss)** | - Government grants of **HK$165,000** were recognized for the six months ended June 30, 2025, as a reward for economic contributions to Changzhi City[22](index=22&type=chunk) [6. Finance Costs](index=10&type=section&id=6.%20Finance%20Costs) The Group's finance costs from continuing operations slightly increased, primarily due to higher interest expenses on bank and other borrowings Finance Costs Details | Item | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (HK$ thousand) | | :--- | :--- | :--- | :--- | | Interest on lease liabilities | 280 | 446 | -166 | | Interest on bank and other borrowings | 4,082 | 3,808 | +274 | | **Total** | **4,362** | **4,254** | **+108** | [7. Profit/(Loss) Before Tax](index=11&type=section&id=7.%20Profit%2F%28Loss%29%20Before%20Tax) The Group's profit before tax from continuing operations achieved a significant turnaround from loss to profit, primarily driven by increased fair value gains on financial assets, despite employee benefit expenses remaining high Profit/(Loss) Before Tax (Continuing Operations) | Metric | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (HK$ thousand) | | :--- | :--- | :--- | :--- | | Profit/(Loss) Before Tax | 36,197 | (36,645) | 72,842 (Turned to profit from loss) | Key Expense Items | Item | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (HK$ thousand) | | :--- | :--- | :--- | :--- | | Depreciation of property, plant and equipment | 455 | 510 | -55 | | Depreciation of right-of-use assets | 5,067 | 5,337 | -270 | | Employee benefit expenses (including directors' emoluments) | 26,478 | 26,794 | -316 | [8. Income Tax](index=11&type=section&id=8.%20Income%20Tax) The Group's income tax expense from continuing operations was minimal in the first half of 2025, a change from the tax credit in the same period of 2024, primarily due to adjustments for under-provision in prior periods Income Tax Expense/(Credit) (Continuing Operations) | Item | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (HK$ thousand) | | :--- | :--- | :--- | :--- | | Current tax — Hong Kong Profits Tax (Provision for the period) | – | – | – | | Current tax — Hong Kong Profits Tax (Over-provision in prior years) | – | (344) | +344 | | Current tax — PRC Enterprise Income Tax (Provision for the period) | – | 18 | -18 | | Current tax — PRC Enterprise Income Tax (Under-provision in prior periods) | 11 | – | +11 | | Deferred tax | – | – | – | | **Income Tax Expense/(Credit)** | **11** | **(326)** | **+337** | - Hong Kong Profits Tax two-tiered rates: **8.25%** for the first HK$2,000,000 of assessable profits, and **16.5%** for profits exceeding this amount. The statutory tax rate for PRC Enterprise Income Tax is **25%**[27](index=27&type=chunk) [9. Dividends](index=12&type=section&id=9.%20Dividends) The Board of Directors does not recommend the payment of any interim dividend for the six months ended June 30, 2025 - The directors do not recommend the payment of any interim dividend (nil for both the six months ended June 30, 2025 and 2024)[30](index=30&type=chunk) [10. Earnings/(Loss) Per Share Attributable to Owners of the Company](index=12&type=section&id=10.%20Earnings%2F%28Loss%29%20Per%20Share%20Attributable%20to%20Owners%20of%20the%20Company) Basic and diluted earnings per share attributable to owners of the Company significantly improved, turning from a loss to a profit, reflecting enhanced overall profitability from both continuing and discontinued operations Profit/(Loss) for the Period Attributable to Owners of the Company | Item | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (HK$ thousand) | | :--- | :--- | :--- | :--- | | From continuing operations | 16,935 | (35,469) | 52,404 (Turned to profit from loss) | | From discontinued operations | (5,692) | (12,500) | 6,808 (Loss narrowed) | | **Total** | **11,243** | **(47,969)** | **59,212 (Turned to profit from loss)** | - The weighted average number of ordinary shares used in the calculation of basic and diluted earnings/(loss) per share was **2,805,952 thousand shares**[31](index=31&type=chunk) - The exercise price of share options was higher than the average market price of ordinary shares during the period, thus the exercise of share options was not assumed in the calculation of diluted earnings/(loss) per share[31](index=31&type=chunk) [11. Property, Plant and Equipment](index=12&type=section&id=11.%20Property%2C%20Plant%20and%20Equipment) The Group's acquisition expenditure on property, plant and equipment significantly decreased, while the value of assets disposed of or written off increased during the same period - For the six months ended June 30, 2025, acquisitions of property, plant and equipment amounted to **HK$54,000** (2024: HK$1,352,000), a significant year-on-year decrease[32](index=32&type=chunk) - During the same period, property, plant and equipment with a total carrying amount of **HK$2,316,000** (2024: HK$1,431,000) were disposed of/written off[32](index=32&type=chunk) [12. Financial Assets at Fair Value Through Profit or Loss](index=13&type=section&id=12.%20Financial%20Assets%20at%20Fair%20Value%20Through%20Profit%20or%20Loss) The Group's non-current financial assets at fair value through profit or loss significantly increased, driven by rising fair values of both listed and unlisted equity investments. Concurrently, current financial assets have been fully reduced to zero Financial Assets at Fair Value Through Profit or Loss | Category | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change (HK$ thousand) | | :--- | :--- | :--- | :--- | | **Non-current assets** | | | | | Unlisted equity investments | 164,552 | 95,902 | +68,650 | | Listed equity investments | 58,685 | – | +58,685 | | **Subtotal** | **223,237** | **95,902** | **+127,335** | | **Current assets** | | | | | Listed equity investments held for trading | – | 51,180 | -51,180 | | Wealth management products | – | 2,147 | -2,147 | | **Subtotal** | **–** | **53,327** | **-53,327** | - Unlisted equity investments involve **ten private entities** (2024: nine) engaged in consulting and financial services, property holding, microalgae product research and development and marketing, securities brokerage and asset management, securities trading investment, and money lending[34](index=34&type=chunk) [13. Trade Receivables](index=14&type=section&id=13.%20Trade%20Receivables) The Group's trade receivables and related impairment loss provisions both significantly decreased, indicating stricter credit control and lower concentration of credit risk Trade Receivables (Net of Provision) | Metric | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Gross trade receivables | 15,122 | 37,319 | -59.5% | | Less: Provision for impairment loss | (2,852) | (15,035) | -81.0% | | **Net** | **12,270** | **22,284** | **-44.9%** | - Credit terms generally range from **30 to 90 days**, with new customers typically required to make advance payments. The Group is committed to strict control over trade receivables and has established a credit monitoring department to minimize credit risk[35](index=35&type=chunk) Ageing Analysis of Trade Receivables (Net of Provision) | Ageing | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Within 1 month | 5,932 | 12,971 | | 1 to 2 months | 3,001 | 2,287 | | 2 to 3 months | 1,465 | 3,272 | | Over 3 months | 1,872 | 3,754 | | **Total** | **12,270** | **22,284** | [14. Loans and Interest Receivables](index=15&type=section&id=14.%20Loans%20and%20Interest%20Receivables) The Group's unsecured loans and interest receivables significantly decreased, with a corresponding substantial reduction in impairment loss provisions. These loans are unsecured and due within four years Loans and Interest Receivables (Unsecured) | Metric | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Gross loans and interest receivables | 2,821 | 16,555 | -83.0% | | Less: Provision for impairment loss | (169) | (1,131) | -85.1% | | **Net** | **2,652** | **15,424** | **-82.8%** | - Unsecured loans and interest receivables are due within **four years** (2024: five years)[37](index=37&type=chunk) - The effective annual interest rate is **6%** (2024: 6%-7%)[38](index=38&type=chunk) [15. Trade Payables](index=16&type=section&id=15.%20Trade%20Payables) The Group's trade payables significantly decreased, particularly amounts overdue by more than three months, indicating improved payment efficiency Ageing Analysis of Trade Payables | Ageing | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Within 1 month | 4,628 | 5,989 | | 1 to 2 months | 882 | 1,194 | | 2 to 3 months | 427 | 383 | | Over 3 months | 798 | 4,962 | | **Total** | **6,735** | **12,528** | - Trade payables are non-interest bearing and generally settled within **30 to 60 days**[39](index=39&type=chunk) [16. Other Payables and Accruals](index=16&type=section&id=16.%20Other%20Payables%20and%20Accruals) The Group's other payables and accruals decreased, including a reduction in construction payables for the Chlamydomonas reinhardtii and related products facility Other Payables and Accruals | Item | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change (HK$ thousand) | | :--- | :--- | :--- | :--- | | Other payables | 21,329 | 30,803 | -9,474 | | Accruals | 17,159 | 18,894 | -1,735 | | **Total** | **38,488** | **49,697** | **-11,209** | - Other payables include construction payables of **HK$11,962,000** (2024: HK$18,217,000) for the construction of Chlamydomonas reinhardtii and related products facilities in Lucheng District, Changzhi City, Shanxi Province, China[40](index=40&type=chunk) [17. Bank and Other Borrowings](index=17&type=section&id=17.%20Bank%20and%20Other%20Borrowings) The Group's total bank and other borrowings increased, with most classified as current liabilities. These borrowings are secured by various assets and bear interest at rates ranging from 0.37% to 1% per month Total Bank and Other Borrowings | Category | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change (HK$ thousand) | | :--- | :--- | :--- | :--- | | Secured bank borrowings | 58,185 | 68,739 | -10,554 | | Secured other borrowings | 22,063 | – | +22,063 | | Unsecured other borrowings | 313,124 | 297,386 | +15,738 | | **Total** | **393,372** | **366,125** | **+27,247** | Liquidity Classification | Category | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change (HK$ thousand) | | :--- | :--- | :--- | :--- | | Current portion | 389,559 | 339,318 | +50,241 | | Non-current portion | 3,813 | 26,807 | -22,994 | - Collateral includes buildings, leasehold land, machinery, and equity interests in subsidiaries. Interest rates range from **0.37% to 0.6% per month** for secured bank borrowings; **0.42% to 1% per month** for secured other borrowings; and **0.42% to 1% per month** for unsecured other borrowings[42](index=42&type=chunk)[43](index=43&type=chunk) [18. Amounts Due to a Director/a Shareholder of the Company](index=18&type=section&id=18.%20Amounts%20Due%20to%20a%20Director%2Fa%20Shareholder%20of%20the%20Company) Amounts due to a director and a shareholder of the Company are unsecured, interest-free, and repayable on demand - Amount due to a director of the Company was approximately **HK$99,492,000** (2024: HK$97,192,000)[5](index=5&type=chunk) - Amount due to a shareholder of the Company was approximately **HK$22,963,000** (2024: HK$24,632,000)[5](index=5&type=chunk) - These amounts are **unsecured, interest-free, and repayable on demand**[44](index=44&type=chunk) [19. Share Capital](index=18&type=section&id=19.%20Share%20Capital) There were no changes in the Company's authorized and issued and fully paid share capital for the six months ended June 30, 2025 - Authorized share capital: **12,500,000 thousand shares** of HK$0.04 each, totaling **HK$500,000 thousand**[47](index=47&type=chunk) - Issued and fully paid share capital: **2,805,592 thousand shares**, totaling **HK$112,238 thousand**[47](index=47&type=chunk) [20. Share Option Scheme](index=18&type=section&id=20.%20Share%20Option%20Scheme) The Company terminated its old share option scheme and adopted a new 2025 scheme, granting multiple tranches of share options to employees, directors, and other participants with varying exercise prices and vesting periods. Share-based payment expenses were recognized during the period - The 2012 Scheme expired on May 17, 2022, the 2022 Scheme was terminated on June 13, 2025, and a new **2025 Scheme** was adopted[48](index=48&type=chunk) Details of Share Options Granted (as of June 30, 2025) | Grant Date | Exercise Price (HK$) | Number of Outstanding Options (thousand shares) | Number of Exercisable Options (thousand shares) | | :--- | :--- | :--- | :--- | | October 8, 2020 (Employees) | 0.40 | 10,000 | 5,000 | | November 16, 2020 (Employees) | 0.60 | 10,200 | 10,200 | | November 16, 2020 (Other Participants) | 0.60 | 50,000 | 50,000 | | April 25, 2022 (Employees) | 1.34 | 6,490.5 | 5,309.25 | | September 30, 2024 (Directors) | 0.20 | 11,800 | – | | September 30, 2024 (Employees) | 0.20 | 51,200 | – | | September 30, 2024 (Other Participants) | 0.20 | 216,000 | – | - For the six months ended June 30, 2025, the Group recognized share-based payment expenses of **HK$2,204,000** (2024: HK$1,620,000)[56](index=56&type=chunk) [21. Pledged Assets](index=22&type=section&id=21.%20Pledged%20Assets) The Group's buildings, leasehold land, machinery, and equity interests in subsidiaries are all pledged as collateral for bank and other borrowings - As of June 30, 2025, buildings, leasehold land, and machinery were pledged to secure bank borrowings[43](index=43&type=chunk) - Two other borrowings were secured by shares of several of the Company's subsidiaries[43](index=43&type=chunk) [22. Discontinued Operations](index=23&type=section&id=22.%20Discontinued%20Operations) The Group has entered into an agreement to dispose of its QR code solutions business (Weidao International Limited), which has been reclassified as a discontinued operation, with its assets and liabilities presented separately as held for sale. The business experienced a decrease in revenue but a narrowing of loss before its termination - On May 6, 2025, the Group entered into an agreement to dispose of its entire **70% equity interest** in Weidao International Limited for a cash consideration of **RMB13,000,000**, aiming to improve liquidity and strengthen its financial position[58](index=58&type=chunk) - As of June 30, 2025, the disposal had not been completed, but the assets and liabilities of Weidao and its subsidiaries (the Disposal Group) were classified as held for sale and presented separately[59](index=59&type=chunk) - The business of the Disposal Group (providing QR code solutions) has been reclassified as a discontinued operation[59](index=59&type=chunk) Financial Performance of Discontinued Operations | Metric | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (HK$ thousand) | | :--- | :--- | :--- | :--- | | Revenue from sales of goods and services provided | 16,021 | 26,845 | -10,824 | | Gross Profit | 8,053 | 12,811 | -4,758 | | Loss before tax | (8,132) | (12,500) | 4,368 (Loss narrowed) | | Loss for the period | (8,132) | (12,500) | 4,368 (Loss narrowed) | Assets and Liabilities Classified as Held for Sale (June 30, 2025) | Category | Amount (HK$ thousand) | | :--- | :--- | | Total Assets | 28,945 | | Total Liabilities | 39,338 | [23. Events After the Reporting Period](index=24&type=section&id=23.%20Events%20After%20the%20Reporting%20Period) Subsequent to the reporting period, the Group entered into an agreement to dispose of certain fixed assets located in Shanxi Province - On July 31, 2025, the Group entered into a sale and purchase agreement with an independent third party to dispose of certain fixed assets located in Shanxi Province for a cash consideration of approximately **RMB14,817,000**[64](index=64&type=chunk) [Management Discussion and Analysis](index=25&type=section&id=Management%20Discussion%20and%20Analysis) This section provides an overview of the Group's business and financial performance, including segment-specific reviews, liquidity, capital, and other relevant financial information [Business Review](index=25&type=section&id=Business%20Review) The Group achieved a significant turnaround from loss to profit in the first half of 2025, primarily due to increased fair value gains on financial assets. Despite a decrease in revenue from continuing operations, overall profitability significantly improved - Profit for the period was **HK$28,100,000**, a significant improvement of **HK$76,900,000** compared to a loss of HK$48,800,000 in the same period last year[65](index=65&type=chunk) - The improvement was mainly due to increased fair value gains on financial assets at fair value through profit or loss[65](index=65&type=chunk) - Revenue from continuing operations was approximately **HK$36,600,000** (2024: HK$46,200,000), representing a year-on-year decrease of approximately **20.8%**[65](index=65&type=chunk) - Overall gross profit margin was **37.0%** (2024: 41.4%), showing a decrease[65](index=65&type=chunk) [Financial Review and Outlook](index=25&type=section&id=Financial%20Review%20and%20Outlook) The Group's business segments showed mixed performance: packaging products and Chlamydomonas reinhardtii products businesses experienced revenue decline and widening losses, while the financial investment business performed strongly due to significant fair value gains. The QR code business was discontinued, with both its revenue and loss decreasing [Packaging Products Business](index=25&type=section&id=Packaging%20Products%20Business) Packaging products business revenue decreased by 21.2%, leading to an increased segment loss, primarily due to reduced sales orders from major customers - Revenue was **HK$32,700,000** (2024: HK$41,500,000), a decrease of **21.2%**[66](index=66&type=chunk) - Segment loss was **HK$5,000,000** (2024: HK$2,700,000), indicating an increased loss[66](index=66&type=chunk) - The increased loss was mainly due to reduced sales orders from major customers[66](index=66&type=chunk) [Financial Investment Business](index=25&type=section&id=Financial%20Investment%20Business) The financial investment business recorded significant fair value gains, including both listed and unlisted investments, contributing substantially to the Group's overall profitability - Recorded fair value gains of **HK$31,600,000** on listed investments classified as financial assets at fair value through profit or loss[67](index=67&type=chunk) - Recorded fair value gains of **HK$35,700,000** on unlisted investments classified as financial assets at fair value through profit or loss (2024: loss of HK$10,000,000), primarily due to an increase in the fair value of unlisted investment assets[67](index=67&type=chunk) [Chlamydomonas reinhardtii Products Business](index=26&type=section&id=Chlamydomonas%20reinhardtii%20Products%20Business) Chlamydomonas reinhardtii products business revenue decreased, and segment loss increased, mainly due to reduced sales and lower reversal of inventory impairment. The company is actively developing new products and expanding its market, with a positive outlook on its growth potential - Revenue was **HK$3,900,000** (2024: HK$4,700,000)[68](index=68&type=chunk) - Segment loss was **HK$15,200,000** (2024: HK$12,700,000), indicating an increased loss[68](index=68&type=chunk) - The increased loss was mainly due to reduced sales and lower reversal of inventory impairment[68](index=68&type=chunk) - The company is developing new products such as artificial fish, shrimp, and plant-based milk, and continuously expanding its market and customer base, with the Board of Directors believing the Chlamydomonas reinhardtii and microalgae products market has growth potential[68](index=68&type=chunk) [Discontinued Operations](index=26&type=section&id=Discontinued%20Operations) The QR code business has been discontinued, with both its revenue and segment loss decreasing before its termination - QR code business revenue was **HK$16,000,000** (2024: HK$26,000,000)[69](index=69&type=chunk) - Segment loss was **HK$8,100,000** (2024: HK$13,200,000), indicating a narrowed loss[69](index=69&type=chunk) - The QR code business was discontinued during the period due to the disposal of Weidao[69](index=69&type=chunk) [Interim Dividends](index=26&type=section&id=Interim%20Dividends) The Board of Directors does not recommend the payment of any interim dividend for the six months ended June 30, 2025 - The directors do not recommend the payment of any interim dividend for the six months ended June 30, 2025[70](index=70&type=chunk) [Liquidity and Financial Resources](index=26&type=section&id=Liquidity%20and%20Financial%20Resources) The Group's financial position improved, with the gearing ratio decreasing due to profit for the period. However, it still faces substantial outstanding borrowings and amounts due to directors and shareholders - As of June 30, 2025, the Group held cash balances of approximately **HK$11,500,000**[71](index=71&type=chunk) - The gearing ratio was approximately **102%** (December 31, 2024: 113%), a decrease mainly due to improved net profit for the period[71](index=71&type=chunk) - Outstanding borrowings and payables include: secured bank borrowings of approximately **HK$58,200,000**; secured other borrowings of **HK$22,100,000**; unsecured other borrowings of **HK$313,100,000**; amounts due to a director of approximately **HK$99,500,000**; and amounts due to a shareholder of approximately **HK$23,000,000**[71](index=71&type=chunk) [Share Capital](index=27&type=section&id=Share%20Capital) There were no changes in the Group's share capital for the six months ended June 30, 2025 - No changes in share capital for the six months ended June 30, 2025[72](index=72&type=chunk) [Pledged Assets](index=27&type=section&id=Pledged%20Assets) The Group's buildings, leasehold land, machinery, and equity interests in certain subsidiaries are pledged to secure bank and other borrowings - Buildings (**HK$19,500,000**), leasehold land (**HK$61,500,000**), and machinery (**HK$35,800,000**) were pledged to secure bank borrowings of approximately **HK$58,200,000**[73](index=73&type=chunk) - Equity interests in certain subsidiaries secured two other borrowings amounting to **HK$22,100,000**[73](index=73&type=chunk) [Contingent Liabilities](index=27&type=section&id=Contingent%20Liabilities) As of June 30, 2025, the Group had no contingent liabilities - As of June 30, 2025, the Group had no contingent liabilities[74](index=74&type=chunk) [Capital Commitments](index=27&type=section&id=Capital%20Commitments) As of June 30, 2025, the Group had no capital commitments - As of June 30, 2025, the Group had no capital commitments[75](index=75&type=chunk) [Finance Lease Commitments](index=27&type=section&id=Finance%20Lease%20Commitments) As of June 30, 2025, the Group had no outstanding finance lease commitments - As of June 30, 2025, the Group had no outstanding finance lease commitments[76](index=76&type=chunk) [Foreign Exchange Risk](index=27&type=section&id=Foreign%20Exchange%20Risk) The Group's revenue and expenses are primarily denominated in USD, HKD, and RMB. Although no foreign exchange hedging products were used during the period, the Group continuously monitors and actively manages currency risks - The majority of the Group's revenue is denominated in **US dollars and Hong Kong dollars**, while expenses are mainly denominated in **US dollars, Hong Kong dollars, and Renminbi**[77](index=77&type=chunk) - Given current financial market conditions, the Group did not use any foreign exchange hedging products to manage Renminbi currency risk during the period[77](index=77&type=chunk) - The Group continues to closely monitor exchange rate fluctuations and actively manage the currency risks involved[77](index=77&type=chunk) [Events After the Reporting Period](index=27&type=section&id=Events%20After%20the%20Reporting%20Period) Subsequent to the reporting period, the Group entered into an agreement to dispose of fixed assets located in Shanxi for a cash consideration of approximately RMB14,817,000 - On July 31, 2025, the Group entered into a sale and purchase agreement with an independent third party to dispose of fixed assets located in Shanxi for a cash consideration of approximately **RMB14,817,000**[78](index=78&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 period, the Group disposed of a 30% equity interest in Weidao International Limited and entered into an agreement to dispose of the remaining 70%, which was not completed by the end of the reporting period. There were no other material acquisitions or disposals during the period - On March 6, 2025, the Group disposed of a **30% equity interest** in Weidao International Limited, a wholly-owned subsidiary of the Group, to an independent third party for a cash consideration of **HK$5,333,000**[79](index=79&type=chunk) - On May 6, 2025, the Group entered into a conditional sale agreement with the principal shareholder of Weidao to further dispose of a **70% equity interest** in Weidao for a cash consideration of **HK$13,867,000**[79](index=79&type=chunk) - As of June 30, 2025, the 70% disposal had not been completed, and the Group retained control over Weidao[79](index=79&type=chunk) - For the six months ended June 30, 2025, there were no other disposals, nor any material acquisitions or disposals of subsidiaries, associates, and joint ventures[80](index=80&type=chunk) [Employees](index=28&type=section&id=Employees) As of June 30, 2025, the Group had approximately 465 full-time employees in Hong Kong and Mainland China, with remuneration based on performance, qualifications, capabilities, and market trends, including benefits such as share option schemes - As of June 30, 2025, the Group had approximately **465 full-time employees** in Hong Kong and Mainland China[81](index=81&type=chunk) - The Group rewards employees based on their merits, qualifications, capabilities, and prevailing market salary trends[81](index=81&type=chunk) - Remuneration packages also include share option schemes, provident fund contributions, medical, and life insurance[81](index=81&type=chunk) [Material Investments Held](index=29&type=section&id=Material%20Investments%20Held) The Group holds approximately HK$58.7 million in listed investments and HK$164.6 million in unlisted investments, with Viva China Holdings, FreeOpt Holdings, and Tre 29 Investment being key material investments. Management will continue to prudently manage the investment portfolio in response to an uncertain market outlook - As of June 30, 2025, the Group held listed investments and unlisted investments of approximately **HK$58,700,000** and **HK$164,600,000**, respectively[82](index=82&type=chunk) Details of Material Investments (Fair Value 5% or more of Total Assets) | Investment Nature | Investee | Shareholding (%) | June 30, 2025 Fair Value (HK$ thousand) | December 31, 2024 Fair Value (HK$ thousand) | Percentage of Group's Total Assets (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Listed Investment | Viva China Holdings Limited | 2.11 | 58,647 | 21,764 | 9.56 | | Unlisted Investment | FreeOpt Holdings Limited | 17.61 | 52,885 | 28,544 | 8.62 | | Unlisted Investment | Tre 29 Investment (Holdings) Limited | 11.32 | 40,630 | 24,950 | 6.63 | - Viva China is primarily engaged in securities trading and investment, financial services, money lending, etc. FreeOpt is primarily engaged in providing financing and money lending businesses. Tre 29 is primarily engaged in securities investment[83](index=83&type=chunk)[84](index=84&type=chunk)[85](index=85&type=chunk) - Management will continue to adopt a prudent approach to capital management and liquidity risk management for the Group's investment portfolio[85](index=85&type=chunk) [Update on Use of Proceeds from Fund Raising Activities](index=30&type=section&id=Update%20on%20Use%20of%20Proceeds%20from%20Fund%20Raising%20Activities) This report provides an update on the use of net proceeds from various fundraising activities between 2016 and 2021, detailing the actual allocation of funds for redeeming promissory notes, expanding the QR code business, R&D, equipment purchases, and general working capital - Net proceeds of **HK$406,100,000** from the share placement in November 2016, of which **HK$263,400,000** was fully used for redeeming promissory notes[87](index=87&type=chunk)[89](index=89&type=chunk) - **HK$142,700,000** was used for expanding and developing the QR code business, including **HK$63,000,000** for acquisitions (completed), **HK$14,400,000** for purchasing plant and equipment (used), **HK$58,700,000** for R&D and working capital (used), and **HK$6,600,000** for purchasing transportation equipment and materials (HK$3,200,000 used, HK$3,400,000 expected to be used in 2025)[88](index=88&type=chunk)[90](index=90&type=chunk)[91](index=91&type=chunk) - Net proceeds of **HK$203,300,000** from the convertible bond issue in November 2017, of which **HK$172,500,000** was fully used for expanding and developing the QR code business, and **HK$30,800,000** was fully used as general working capital for corporate offices[92](index=92&type=chunk) - Net proceeds from subscriptions for new shares in March and April 2020 were **HK$49,880,000** and **HK$49,980,000** respectively, both fully used as general working capital for the Group[92](index=92&type=chunk) - Net proceeds of **HK$19,980,000** from the subscription for new shares in July 2020, of which **70%** was fully used for repaying interest on convertible bonds, and **30%** was fully used as general working capital for the Group[92](index=92&type=chunk) - Net proceeds of **HK$28,180,000** from the subscription for new shares in April 2021 were fully used as general working capital for the Group[92](index=92&type=chunk) [Corporate Governance and Other Information](index=33&type=section&id=Corporate%20Governance%20and%20Other%20Information) This section outlines the Company's adherence to corporate governance principles, details on directors' securities transactions, changes in board composition, and the publication of financial information [Corporate Governance](index=33&type=section&id=Corporate%20Governance) The Company generally complied with the Corporate Governance Code during the reporting period, though the Board Chairman was unable to attend the general meetings due to other business commitments, with another director presiding - The Company has complied with the code provisions of the Corporate Governance Code set out in Appendix C1 to the Listing Rules throughout the six months ended June 30, 2025[93](index=93&type=chunk) - Deviation from Code Provision F.2.2: Mr. Wang Liang, the Chairman of the Board, was unable to attend the Annual General Meeting and Extraordinary General Meeting on June 13, 2025, due to other business commitments, and Mr. Du Dong presided over the meetings[93](index=93&type=chunk) [Directors' Securities Transactions](index=33&type=section&id=Directors%27%20Securities%20Transactions) All directors have confirmed compliance with the standard code for securities transactions during the reporting period - All directors have confirmed their compliance with the required standards set out in the Model Code for Securities Transactions by Directors of Listed Issuers throughout the six months ended June 30, 2025[94](index=94&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=33&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 - 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[95](index=95&type=chunk) [Changes in Directors' Information](index=33&type=section&id=Changes%20in%20Directors%27%20Information) During the reporting period, there were several changes in the composition of the Board and its committees, including adjustments to the Chairman and members of the Nomination Committee, and the retirement of two directors - Effective July 4, 2025, Mr. Wang Liang ceased to be a member and chairman of the Nomination Committee, Mr. Du Dong ceased to be a member of the Nomination Committee, and Mr. Zhang Rongping was appointed as the chairman of the Nomination Committee[96](index=96&type=chunk) - Mr. Jia Wenjie and Mr. Hu Guohua retired as directors of the Company effective June 13, 2025[98](index=98&type=chunk) - Effective June 6, 2025, Mr. Du Chengquan ceased to be a member of the Nomination Committee, and Ms. Tian Yuze was appointed as a member of the Nomination Committee[98](index=98&type=chunk) [Audit Committee](index=34&type=section&id=Audit%20Committee) The Company's unaudited condensed consolidated financial statements have been reviewed by the Audit Committee, which comprises three independent non-executive directors responsible for reviewing accounting principles, internal controls, and financial performance - The unaudited condensed consolidated financial statements for the six months ended June 30, 2025, have been reviewed by the Audit Committee[97](index=97&type=chunk) - The Audit Committee comprises three independent non-executive directors, with primary responsibilities including communicating with management, reviewing accounting principles and practices, internal controls, and interim and annual results[97](index=97&type=chunk) [Publication of Financial Information](index=34&type=section&id=Publication%20of%20Financial%20Information) This results announcement has been published on the HKEX website and the Company's website, and the 2025 interim report will be published and dispatched to shareholders in due course - The results announcement is available on the website of Hong Kong Exchanges and Clearing Limited (www.hkexnews.hk) and the Company's website (www.touyunbiotech.com.hk)[98](index=98&type=chunk) - The 2025 interim report will also be available on the above websites and dispatched to the Company's shareholders in due course[98](index=98&type=chunk)

[Report Overview](index=1&type=section&id=Interim%20Results%20Announcement) This report provides an overview of the Group's business operations, financial performance, future strategies, and detailed financial statements for the interim period [Business Review](index=1&type=section&id=Business%20Review) The Group is committed to becoming an international clean energy ecosystem investment operator, primarily engaged in the development, investment, operation, and management of power stations and other clean energy projects, achieving significant growth in installed capacity and power generation while reducing financing costs [Diversification of Investment Locations and Portfolio](index=1&type=section&id=Diversification%20of%20Investment%20Locations%20and%20Portfolio) The Group expanded its grid-connected installed capacity and diversified its clean energy portfolio across various regions, primarily in China Changes in Grid-Connected Installed Capacity (As of June 30, 2025) | Type | June 30, 2025 (Units) | December 31, 2024 (Units) | | :--- | :--- | :--- | | Solar Power Stations | 187 | 166 | | Wind Power Stations | 39 | 38 | | Hydro Power Stations | 26 | 26 | | Energy Storage Power Stations | 3 | 3 | - Total grid-connected installed capacity increased from approximately **12,639 MW** as of December 31, 2024, to approximately **13,692 MW** as of June 30, 2025[4](index=4&type=chunk) - Except for a few projects in Australia and Vietnam, the Group's remaining power stations are located in **28 different provinces in China**[4](index=4&type=chunk) [Other Clean Energy Projects](index=2&type=section&id=Other%20Clean%20Energy%20Projects) The Group holds significant hydro power development rights and plans to diversify its clean energy portfolio further - Holds hydro power development rights with an estimated capacity of approximately **5 GW**, awaiting preliminary work approval[6](index=6&type=chunk) - Will focus on developing solar, wind, hydro power, and energy storage businesses in the short term, enhancing the diversity of its clean energy portfolio[6](index=6&type=chunk) [Power Generation](index=2&type=section&id=Power%20Generation) The Group achieved substantial growth in total power generation, driven by increased installed capacity across its subsidiary and associate power stations Total Power Generation and Growth (For the six months ended June 30) | Metric | 2025 (MWh) | 2024 (MWh) | Growth Rate | | :--- | :--- | :--- | :--- | | Total Power Generation by Subsidiaries | 11,514,751 | 7,590,356 | 51.7% | | Total Power Generation by Associates | 1,088,710 | 651,831 | 67.0% | | Total Group Power Generation | 12,603,461 | 8,242,187 | 52.9% | Overview of Subsidiary Power Stations (For the six months ended June 30) | Type | 2025 Installed Capacity (MW) | 2025 Power Generation (MWh) | 2024 Installed Capacity (MW) | 2024 Power Generation (MWh) | | :--- | :--- | :--- | :--- | :--- | | Solar | 7,958 | 4,863,871 | 6,391 | 4,220,057 | | Wind | 4,432 | 5,177,066 | 2,602 | 1,874,559 | | Hydro | 952 | 1,348,606 | 952 | 1,495,740 | | Energy Storage | 350 | 125,208 | 100 | – | - Energy storage power stations officially commenced production and operation in the second half of 2024, generating **125,208 MWh** of electricity during this period[9](index=9&type=chunk) [Financing Activities](index=5&type=section&id=Financing%20Activities) The Group successfully reduced its weighted average interest rate and secured significant funding through perpetual medium-term notes and investment contracts - The weighted average annual interest rate for bank and other borrowings decreased from approximately **3.73%** as of December 31, 2024, to approximately **3.17%** for this period[11](index=11&type=chunk) - Completed the issuance of two tranches of perpetual medium-term notes, totaling **RMB 900 million** and **RMB 600 million**, with fixed distribution rates of **2.47%** and **2.38%**, respectively[11](index=11&type=chunk) - Secured funds of **RMB 1,500 million** (approximately **RMB 1,184 million** received) and **RMB 1,050 million** (approximately **RMB 442 million** received) through investment contracts with China Life Investment and Allianz Insurance, in the form of private placement perpetual medium-term notes, for working capital replenishment and loan repayment[12](index=12&type=chunk)[13](index=13&type=chunk) [Financial Review](index=6&type=section&id=Financial%20Review) During this period, the Group's net profit slightly increased, while revenue and EBITDA significantly rose due to expanded installed capacity, with financing costs decreasing through debt structure optimization, but average electricity price declining due to a higher proportion of grid-parity projects, and accounts receivable and electricity price subsidy receivables substantially increasing, while the capital gearing ratio improved Key Financial Indicators (For the six months ended June 30) | Metric | 2025 (RMB million) | 2024 (RMB million) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Net Profit | 293 | 292 | 0.34% | | Revenue | 4,086 | 3,272 | 24.87% | | EBITDA | 3,276 | 2,686 | 21.97% | [Revenue and EBITDA](index=6&type=section&id=Revenue%20and%20EBITDA) Revenue and EBITDA saw significant growth driven by increased installed capacity, though average electricity prices declined due to grid-parity projects - Revenue and EBITDA growth primarily attributed to the expansion of grid-connected installed capacity from approximately **10,045 MW** to approximately **13,692 MW**, an increase of approximately **36.3%**[15](index=15&type=chunk) Average Electricity Price (Excluding VAT) | Metric | 2025 (RMB/kWh) | 2024 (RMB/kWh) | | :--- | :--- | :--- | | Average Electricity Price | 0.35 | 0.43 | - The decrease in average electricity price was mainly due to the continuous increase in grid-connected installed capacity of grid-parity solar and wind power projects, whose power generation accounted for a significantly higher proportion of total power generation, and these projects' electricity prices do not include subsidies[15](index=15&type=chunk) [Financing Costs](index=7&type=section&id=Financing%20Costs) Total financing costs decreased due to the refinancing of high-interest loans with lower-interest RMB loans Total Financing Costs (For the six months ended June 30) | Metric | 2025 (RMB million) | 2024 (RMB million) | | :--- | :--- | :--- | | Total Financing Costs | 1,099 | 1,105 | - The decrease in financing costs was primarily due to the gradual refinancing of certain high-interest loans with lower-interest RMB loans[16](index=16&type=chunk) [Income Tax Expense](index=7&type=section&id=Income%20Tax%20Expense) The Group's income tax expense is subject to China's statutory rate, with certain renewable energy projects benefiting from preferential tax reductions - The statutory corporate income tax rate in China is **25%**, with certain renewable energy projects enjoying preferential tax reductions[17](index=17&type=chunk) [Accounts Receivable, Bills, and Electricity Price Subsidy Receivables](index=7&type=section&id=Accounts%20Receivable%2C%20Bills%2C%20and%20Electricity%20Price%20Subsidy%20Receivables) Accounts receivable, bills, and electricity price subsidy receivables significantly increased, primarily due to central government subsidies for renewable energy projects Details of Accounts Receivable, Bills, and Electricity Price Subsidy Receivables | Metric | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | | :--- | :--- | :--- | | Accounts Receivable and Bills | 881 | 590 | | Electricity Price Subsidy Receivables (China) | 9,645 | 7,465 | | Total | 10,526 | 8,055 | - Electricity price subsidy receivables primarily refer to central government subsidies for renewable energy projects, which will be settled according to government policies and the Ministry of Finance's payment model[18](index=18&type=chunk) [Bank and Other Borrowings](index=8&type=section&id=Bank%20and%20Other%20Borrowings) The Group's bank and other borrowings are diversified across currencies and maturities, with a significant portion denominated in RMB Maturity and Currency Mix of Bank and Other Borrowings (As of June 30, 2025) | Currency | Within One Year (RMB million) | Second Year (RMB million) | Three to Five Years (RMB million) | Six to Ten Years (RMB million) | After Ten Years (RMB million) | Total (RMB million) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | RMB | 9,867 | 11,767 | 19,832 | 11,438 | 4,249 | 57,153 | | USD | 6,394 | 3,472 | – | – | – | 9,866 | | AUD | 1,890 | – | – | – | – | 1,890 | | HKD | 648 | – | – | – | – | 648 | | Total | 18,799 | 15,239 | 19,832 | 11,438 | 4,249 | 69,557 | [Key Performance Indicators](index=8&type=section&id=Key%20Performance%20Indicators) Key performance indicators show a decrease in EBITDA margin but improvements in debt-to-EBITDA ratio and interest coverage Changes in Key Performance Indicators (For the six months ended June 30) | Metric | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | EBITDA Margin | 80% | 82% | Down 2% | | Debt to EBITDA Ratio | 19.5 | 22.7 | Down 3.2 | | Operating Cash Flow to Net Debt Ratio | 3.5% | 2.7% | Up 0.8% | | Interest Coverage Ratio | 2.98 | 2.61 | Up 0.37 | - The decrease in EBITDA margin was mainly due to the continuous expansion of power generation business and additional operating expenses[21](index=21&type=chunk) [Liquidity, Financial Resources, Capital Gearing Ratio, and Capital Structure](index=9&type=section&id=Liquidity%2C%20Financial%20Resources%2C%20Capital%20Gearing%20Ratio%2C%20and%20Capital%20Structure) The Group's capital gearing ratio improved due to increased equity from perpetual medium-term note issuance, while managing financial risks with derivative instruments Capital Structure and Capital Gearing Ratio | Metric | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | | :--- | :--- | :--- | | Net Debt | 63,848 | 62,978 | | Total Equity | 25,460 | 22,660 | | Total Capital | 89,308 | 85,638 | | Capital Gearing Ratio | 71.5% | 73.5% | - The decrease in capital gearing ratio was mainly due to the increase in equity resulting from the issuance of perpetual medium-term notes[25](index=25&type=chunk) - The Group holds derivative financial instruments (cross-currency swaps) to hedge against foreign exchange and interest rate fluctuation risks of bank borrowings[23](index=23&type=chunk) [Other Operating Information](index=11&type=section&id=Other%20Operating%20Information) The Group had no significant acquisitions or disposals during this period but continues to seek investment opportunities, with its electricity sales business highly dependent on major customers, and employee count slightly increased, while hedging exchange rate and interest rate risks through cross-currency swaps and planning to issue asset-backed commercial papers post-period end [Significant Acquisitions and Disposals of Subsidiaries, Associates, and Joint Ventures](index=11&type=section&id=Significant%20Acquisitions%20and%20Disposals%20of%20Subsidiaries%2C%20Associates%2C%20and%20Joint%20Ventures) The Group did not undertake any significant acquisitions or disposals of subsidiaries, associates, or joint ventures during the period - No significant acquisitions or disposals occurred during this period[27](index=27&type=chunk) [Performance and Future Prospects of Significant Investments Held and Future Plans for Significant Investments or Capital Assets](index=11&type=section&id=Performance%20and%20Future%20Prospects%20of%20Significant%20Investments%20Held%20and%20Future%20Plans%20for%20Significant%20Investments%20or%20Capital%20Assets) The Group held no significant investments as of June 30, 2025, but actively seeks suitable opportunities to enhance future financial performance - As of June 30, 2025, the Group did not hold any significant investments[28](index=28&type=chunk) - Will actively seek suitable and promising investment opportunities to enhance future financial performance and profitability[28](index=28&type=chunk) [Significant Reliance on Major Customers](index=12&type=section&id=Significant%20Reliance%20on%20Major%20Customers) The Group's electricity sales business is heavily reliant on State Grid and Inner Mongolia Power, which account for a substantial portion of receivables - The primary customers for electricity sales business are subsidiaries of **State Grid** and **Inner Mongolia Power (Group) Co., Ltd.**[29](index=29&type=chunk) Proportion of Receivables from Major Customers (As of June 30, 2025) | Customer | Proportion of Total Accounts Receivable, Bills, and Electricity Price Subsidy Receivables | | :--- | :--- | | State Grid Subsidiaries | 74.5% | | Inner Mongolia Power Subsidiaries | 17.9% | [Pledge of Assets](index=12&type=section&id=Pledge%20of%20Assets) Approximately 30.5% of the Group's bank and other borrowings are secured by various assets, including power generation modules and equipment - Approximately **30.5%** of bank and other borrowings are secured by pledged power generation modules and equipment, guarantee deposits, electricity sales collection rights, and/or shares/equity of subsidiaries[30](index=30&type=chunk) [Employees and Remuneration Policy](index=12&type=section&id=Employees%20and%20Remuneration%20Policy) The Group's full-time employee count slightly increased, with competitive remuneration and benefits provided Number of Full-time Employees and Employee Benefit Expenses | Metric | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Number of Full-time Employees | 1,918 | 1,856 | | Employee Benefit Expenses (Excluding Share-based Payments) | RMB 279 million | RMB 251 million | [Exchange Rate Fluctuation Risk and Related Hedging](index=12&type=section&id=Exchange%20Rate%20Fluctuation%20Risk%20and%20Related%20Hedging) The Group primarily operates in Mainland China and Hong Kong, with most transactions settled in RMB, HKD, and USD, leading to exchange rate fluctuation risk upon conversion - The Group primarily operates in Mainland China and Hong Kong, with most transactions settled in **RMB, HKD, and USD**, and exchange rate fluctuation risk mainly arises when converting to the presentation currency[32](index=32&type=chunk) [Contingent Liabilities](index=13&type=section&id=Contingent%20Liabilities) As of June 30, 2025, the Group had no other significant contingent liabilities - As of June 30, 2025, the Group had no other significant contingent liabilities[33](index=33&type=chunk) [Significant Events After the Statement of Financial Position Date](index=13&type=section&id=Significant%20Events%20After%20the%20Statement%20of%20Financial%20Position%20Date) Post-period end, Jingneng Development plans to issue asset-backed commercial papers totaling approximately RMB 2,000 million through a trust contract - Jingneng Development entered into a trust contract with Industrial Bank International Trust, planning to issue asset-backed commercial papers with a total scale of approximately **RMB 2,000 million**[95](index=95&type=chunk) [Future Outlook](index=13&type=section&id=Future%20Outlook) As 2025 marks the final year of the '14th Five-Year Plan', the Company will align with the national 'dual carbon' strategy, shifting from a heavy asset-holding model to a hybrid asset operation development approach, focusing on low-cost project development and diversified business expansion, strengthening comprehensive cost control and risk resilience, and building a clean energy industrial ecosystem that is 'green-centric, multi-energy complementary, and intelligently coordinated' - Strategic Development: Shifting from a heavy asset-holding development approach to a hybrid asset operation development approach, prioritizing comprehensive project development costs and regional consumption capacity, and exploring light asset development and operation models[35](index=35&type=chunk) - Business Expansion: Deepening efforts in diversified business segments such as hydro power (Yunnan and Tibet), gas turbines (focusing on industrial parks with high heat loads or regions with high peak power demand), integrated energy (transitioning to light assets), and green hydrogen (tracking policy and technological advancements)[36](index=36&type=chunk) - Operational Management: Focusing on quality improvement and efficiency enhancement, implementing comprehensive cost control, post-project evaluation, improving regional benchmarking rankings, seizing opportunities in electricity spot trading, introducing equity financing, and continuously promoting overall management improvement[36](index=36&type=chunk) [Financial Statements](index=15&type=section&id=Financial%20Statements) This section includes the Group's unaudited condensed consolidated income statement, statement of comprehensive income, and statement of financial position for the six months ended June 30, 2025, reflecting operating results, financial performance, and asset and liability status for the period, showing growth in revenue and total comprehensive income, and changes in the asset and liability structure [Condensed Consolidated Interim Income Statement](index=15&type=section&id=Condensed%20Consolidated%20Interim%20Income%20Statement) The condensed consolidated interim income statement shows increased revenue, EBITDA, and profit for the period, with higher profit attributable to equity holders Summary of Condensed Consolidated Interim Income Statement (For the six months ended June 30) | Metric | 2025 (RMB million) | 2024 (RMB million) | | :--- | :--- | :--- | | Revenue | 4,086 | 3,272 | | EBITDA | 3,276 | 2,686 | | Profit Before Income Tax | 448 | 434 | | Profit for the Period | 293 | 292 | | Profit for the Period Attributable to Equity Holders of the Company | 173 | 33 | | Non-controlling Interests | 120 | 259 | | Basic and Diluted Earnings Per Share (RMB cents) | 7.87 | 1.48 | [Condensed Consolidated Interim Statement of Comprehensive Income](index=17&type=section&id=Condensed%20Consolidated%20Interim%20Statement%20of%20Comprehensive%20Income) The condensed consolidated interim statement of comprehensive income reflects profit for the period and other comprehensive income items, including currency translation differences Summary of Condensed Consolidated Interim Statement of Comprehensive Income (For the six months ended June 30) | Metric | 2025 (RMB million) | 2024 (RMB million) | | :--- | :--- | :--- | | Profit for the Period | 293 | 292 | | Currency Translation Differences | 195 | (134) | | Total Comprehensive Income for the Period | 488 | 158 | | Total Comprehensive Income for the Period Attributable to Equity Holders of the Company | 368 | (101) | | Non-controlling Interests | 120 | 259 | [Condensed Consolidated Interim Statement of Financial Position](index=18&type=section&id=Condensed%20Consolidated%20Interim%20Statement%20of%20Financial%20Position) The condensed consolidated interim statement of financial position shows an increase in total assets and equity, with changes in non-current and current liabilities Summary of Condensed Consolidated Interim Statement of Financial Position (As of June 30) | Metric | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | | :--- | :--- | :--- | | Total Non-current Assets | 86,046 | 85,867 | | Total Current Assets | 19,581 | 16,602 | | Total Assets | 105,627 | 102,469 | | Total Equity | 25,460 | 22,660 | | Total Non-current Liabilities | 53,652 | 50,833 | | Total Current Liabilities | 26,515 | 28,976 | | Total Liabilities | 80,167 | 79,809 | - Perpetual medium-term notes increased from **RMB 10,777 million** as of December 31, 2024, to **RMB 13,322 million** as of June 30, 2025, a significant factor in the growth of total equity[47](index=47&type=chunk) [Notes to the Financial Statements](index=20&type=section&id=Notes%20to%20the%20Unaudited%20Condensed%20Consolidated%20Interim%20Financial%20Information) This section provides detailed notes to the condensed consolidated interim financial information, covering key information such as basis of preparation, changes in accounting policies, significant estimates, financial risk management, segment information, financing costs, income tax, accounts receivable, share capital, perpetual medium-term notes, bank borrowings, acquisitions, and post-balance sheet events, with a particular emphasis on significant uncertainties regarding going concern and mitigation measures [General Information](index=20&type=section&id=1%20General%20Information) The Company is primarily engaged in the development, investment, operation, and management of power stations and clean energy projects, with Beijing Energy Investment Group (Hong Kong) Co., Ltd. as its direct controlling shareholder - The Company is primarily engaged in the development, investment, operation, and management of power stations and other clean energy projects[48](index=48&type=chunk) - Beijing Energy Investment Group (Hong Kong) Co., Ltd. is the Company's direct controlling shareholder, holding approximately **32.14%** of the issued share capital[48](index=48&type=chunk) [Basis of Preparation](index=20&type=section&id=2%20Basis%20of%20Preparation) This section outlines the basis for preparing the financial statements, including considerations for going concern, changes in accounting policies, significant estimates, and financial risk management [Going Concern](index=20&type=section&id=2.1%20Going%20Concern) Despite current liabilities exceeding current assets and significant borrowings maturing, the Board has implemented measures to ensure the Group's ability to continue as a going concern - Current liabilities exceeded current assets by approximately **RMB 6,934 million**, with approximately **RMB 18,784 million** of borrowings maturing within the next 12 months, indicating significant uncertainty[51](index=51&type=chunk) - The Board has adopted several measures, including issuing perpetual medium-term notes, obtaining long-term borrowings, financial support from Jingneng Group, and operating cash inflows from existing power stations, to ensure going concern[52](index=52&type=chunk) [Changes in Accounting Policies and Disclosures](index=22&type=section&id=2.2%20Changes%20in%20Accounting%20Policies%20and%20Disclosures) The adoption of HKAS 21 (Amendment) 'Lack of Exchangeability' had no significant impact on the Group's financial position or performance - The adoption of HKAS 21 (Amendment) 'Lack of Exchangeability' had no significant impact on the Group's financial position and performance[55](index=55&type=chunk) [Significant Accounting Estimates and Assumptions](index=23&type=section&id=2.3%20Significant%20Accounting%20Estimates%20and%20Assumptions) Significant judgments, estimates, and assumptions made by management in preparing the financial information are consistent with those applied in the prior year's consolidated financial statements - Significant judgments, estimates, and assumptions made by management in preparing the financial information are consistent with those applied in the prior year's consolidated financial statements[57](index=57&type=chunk) [Financial Risk Management](index=23&type=section&id=2.4%20Financial%20Risk%20Management) The Group manages market risks, credit risks, and liquidity risks, utilizing cross-currency swaps to mitigate foreign exchange and interest rate fluctuations - The Group faces market risks (foreign exchange risk and cash flow interest rate risk), credit risk, and liquidity risk[58](index=58&type=chunk) - Cross-currency swaps are used to convert floating-rate foreign currency borrowings into fixed-rate RMB borrowings to reduce foreign exchange risk and cash flow interest rate risk[59](index=59&type=chunk) [Revenue and Segment Information](index=24&type=section&id=3%20Revenue%20and%20Segment%20Information) This section provides a breakdown of the Group's revenue and segment performance by business and geographical location, along with information on major customer contributions [Business Segments](index=25&type=section&id=3(a)%20Business%20Segments) The Group's business segments include solar, wind, and hydro power generation, with varying revenue and segment performance contributions Business Segment Revenue and Results (For the six months ended June 30) | Business Segment | 2025 Revenue (RMB million) | 2025 Segment Results (RMB million) | 2024 Revenue (RMB million) | 2024 Segment Results (RMB million) | | :--- | :--- | :--- | :--- | :--- | | Solar Power Generation Business | 2,161 | 1,115 | 2,168 | 1,273 | | Wind Power Generation Business | 1,529 | 660 | 747 | 339 | | Hydro Power Generation Business | 330 | 130 | 357 | 150 | | Others | 66 | (359) | – | (267) | | Total | 4,086 | 1,546 | 3,272 | 1,495 | [Geographical Segments](index=27&type=section&id=3(b)%20Geographical%20Segments) The Group's revenue and non-current assets are primarily concentrated in China, with smaller contributions from Australia and Vietnam Revenue by Geographical Segment (For the six months ended June 30) | Region | 2025 Revenue (RMB million) | 2024 Revenue (RMB million) | | :--- | :--- | :--- | | China | 3,918 | 3,123 | | Australia | 146 | 130 | | Vietnam | 22 | 19 | | Total | 4,086 | 3,272 | Non-current Assets by Geographical Segment (As of June 30) | Region | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | | :--- | :--- | :--- | | China | 75,166 | 75,048 | | Australia | 7,321 | 6,841 | | Vietnam | 469 | 505 | | Hong Kong | 3 | 4 | | Total | 82,959 | 82,398 | [Information on Major Customers](index=28&type=section&id=3(c)%20Information%20on%20Major%20Customers) The Group's revenue is significantly contributed by a few major customers, with Customer A being the largest contributor Revenue Contribution from Major Customers (For the six months ended June 30) | Customer | 2025 Revenue (RMB million) | 2024 Revenue (RMB million) | | :--- | :--- | :--- | | Customer A | 2,833 | 2,165 | | Customer B | 513 | 388 | | Customer C | 315 | 336 | - Customer C's contribution to the Group's total revenue for the six months ended June 30, 2025, did not exceed **10%**[68](index=68&type=chunk) [Financing Costs](index=28&type=section&id=4%20Financing%20Costs) This section details the components of financing costs, including interest expenses on bank borrowings, loan financing fees, and lease liabilities Details of Financing Costs (For the six months ended June 30) | Item | 2025 (RMB million) | 2024 (RMB million) | | :--- | :--- | :--- | | Interest Expense on Bank and Other Borrowings | 1,046 | 1,060 | | Loan Financing Fees for Bank and Other Borrowings | 20 | 19 | | Interest Expense on Lease Liabilities | 31 | 24 | | Interest Expense on Restoration Provisions | 2 | 2 | | Total | 1,099 | 1,105 | [Income Tax Expense](index=28&type=section&id=5%20Income%20Tax%20Expense) Income tax expense is based on China's statutory corporate income tax rate, with certain renewable energy projects enjoying preferential tax treatments - The statutory corporate income tax rate in China is **25%**, and certain subsidiaries involved in renewable energy projects have received preferential tax reductions[71](index=71&type=chunk) [Earnings Per Share Attributable to Equity Holders of the Company](index=29&type=section&id=Earnings%20Per%20Share%20Attributable%20to%20Equity%20Holders%20of%20the%20Company) This section presents the basic and diluted earnings per share, reflecting the profit attributable to equity holders of the Company [Basic](index=29&type=section&id=6(a)%20Basic) Basic earnings per share are calculated based on the profit attributable to equity holders and the weighted average number of ordinary shares outstanding Basic Earnings Per Share | Metric | 2025 (RMB cents) | 2024 (RMB cents) | | :--- | :--- | :--- | | Basic Earnings Per Share | 7.87 | 1.48 | - The weighted average number of ordinary shares for the six months ended June 30, 2024, has been adjusted for the effect of the share consolidation effective November 1, 2024[74](index=74&type=chunk) [Diluted](index=30&type=section&id=6(b)%20Diluted) Diluted earnings per share are presented, with no assumed exercise of share options as their exercise price exceeded the average market price Diluted Earnings Per Share | Metric | 2025 (RMB cents) | 2024 (RMB cents) | | :--- | :--- | :--- | | Diluted Earnings Per Share | 7.87 | 1.48 | - The exercise of share options was not assumed in calculating diluted earnings per share, as their exercise price was higher than the average market price of the shares[76](index=76&type=chunk) [Dividends](index=30&type=section&id=7%20Dividends) This section outlines the final dividends declared for previous years, noting that no interim dividends were paid or declared for the current period Final Dividend Distribution (For the six months ended June 30) | Dividend Year | Dividend Per Ordinary Share | Total Amount (RMB million) | | :--- | :--- | :--- | | 2024 Final Dividend | 1.00 HK cents (approx. RMB 0.90 cents) | 193 | | 2023 Final Dividend | 1.00 HK cents (approx. RMB 0.90 cents) | 196 | - During this period, the Company did not pay or declare any interim dividends[78](index=78&type=chunk) [Accounts Receivable, Bills, and Electricity Price Subsidy Receivables](index=31&type=section&id=Accounts%20Receivable%2C%20Bills%2C%20and%20Electricity%20Price%20Subsidy%20Receivables) This section provides an aging analysis of accounts receivable, bills, and electricity price subsidy receivables, primarily related to central government subsidies for renewable energy projects Aging Analysis of Accounts Receivable and Electricity Price Subsidy Receivables (By Invoice Date) | Aging | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | | :--- | :--- | :--- | | Unbilled | 10,460 | 8,002 | | Within One Year | 61 | 45 | | One to Two Years | 3 | 1 | | Two to Three Years | 2 | – | | Over Three Years | – | 4 | | Total | 10,526 | 8,052 | - Electricity price subsidy receivables primarily refer to central government subsidies for renewable energy projects, and management considers the impairment provision to be adequate[79](index=79&type=chunk)[80](index=80&type=chunk) [Share Capital](index=32&type=section&id=9%20Share%20Capital) This section details the Company's authorized and issued share capital, including the impact of a share consolidation effective November 1, 2024 Authorized and Issued Share Capital (As of June 30) | Metric | Number of Shares (million shares) | Amount (RMB million) | | :--- | :--- | :--- | | Authorized Share Capital (HKD 1.00 par value per share) | 3,000 | 2,525 | | Issued and Fully Paid Share Capital (HKD 1.00 par value per share) | 2,234 | 1,915 | - The share consolidation effective November 1, 2024, combined every **10 shares** with a par value of **HKD 0.10** into **1 share** with a par value of **HKD 1.00**[86](index=86&type=chunk) [Perpetual Medium-Term Notes](index=33&type=section&id=10%20Perpetual%20Medium-Term%20Notes) This section outlines the changes in perpetual medium-term notes, including new issuances and distributions to noteholders, significantly contributing to equity growth Changes in Perpetual Medium-Term Notes (As of June 30) | Item | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | | :--- | :--- | :--- | | As at January 1 | 10,777 | 3,494 | | Issuance of Perpetual Medium-Term Notes | 2,550 | 7,300 | | Profit Attributable to Perpetual Medium-Term Note Holders | 87 | 145 | | Distributions to Perpetual Medium-Term Note Holders | (87) | (145) | | As at End of Period | 13,322 | 10,777 | - Two tranches of perpetual medium-term notes were issued during this period, with a total principal of **RMB 1,500 million** and distribution rates of **2.47%** and **2.38%**, respectively[85](index=85&type=chunk) - Private placement perpetual medium-term notes secured a total of **RMB 1,050 million** at a fixed distribution rate of **3.30%** per annum[87](index=87&type=chunk) [Bank and Other Borrowings](index=34&type=section&id=11%20Bank%20and%20Other%20Borrowings) This section provides a breakdown of bank and other borrowings into non-current and current portions, along with their weighted average interest rate and maturity Total Bank and Other Borrowings | Type | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | | :--- | :--- | :--- | | Non-current | 50,758 | 47,936 | | Current | 18,784 | 20,646 | | Total | 69,542 | 68,582 | - Weighted average annual interest rate of approximately **3.17%** (December 31, 2024: approximately **3.73%**), with a weighted average maturity of approximately **5.45 years** (December 31, 2024: approximately **5.67 years**)[90](index=90&type=chunk) [Convertible Bonds](index=35&type=section&id=12%20Convertible%20Bonds) The three-year convertible bonds were fully redeemed during the six months ended June 30, 2024 - The three-year convertible bonds were fully redeemed during the six months ended June 30, 2024[91](index=91&type=chunk) [Acquisition of Subsidiaries](index=35&type=section&id=13%20Acquisition%20of%20Subsidiaries) No business combinations or asset acquisitions occurred during the current period - No business combinations or asset acquisitions occurred during this period[93](index=93&type=chunk)[94](index=94&type=chunk) [Events After the Statement of Financial Position Date](index=35&type=section&id=14%20Events%20After%20the%20Statement%20of%20Financial%20Position%20Date) Post-period end, Jingneng Development plans to issue asset-backed commercial papers totaling approximately RMB 2,000 million through a trust contract - Jingneng Development entered into a trust contract with Industrial Bank International Trust, planning to issue asset-backed commercial papers with a total scale of approximately **RMB 2,000 million**[95](index=95&type=chunk) [Comparative Figures](index=35&type=section&id=15%20Comparative%20Figures) Certain comparative figures have been restated to conform to the presentation for the current period - Certain comparative figures have been restated to conform to the presentation for this period[96](index=96&type=chunk) [Other Information](index=36&type=section&id=Other%20Information) This section covers the purchase, sale, or redemption of the Company's listed securities, compliance with the Corporate Governance Code, adherence to the Model Code for Securities Transactions by Directors, and the composition of the Audit Committee and declaration of interim dividends, demonstrating the Company's commitment to maintaining high standards of corporate governance [Purchase, Sale or Redemption of the Company's Listed Securities](index=36&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 period, with 34.5 million treasury shares held - During this period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[97](index=97&type=chunk) - As of June 30, 2025, the Company held **34,500,000 treasury shares**[97](index=97&type=chunk) [Compliance with the Corporate Governance Code](index=36&type=section&id=Compliance%20with%20the%20Corporate%20Governance%20Code) The Company complied with all applicable code provisions of the Corporate Governance Code as set out in Appendix C1 Part 2 of the Listing Rules during the period - The Company complied with all applicable code provisions of the Corporate Governance Code as set out in Appendix C1 Part 2 of the Listing Rules during this period[98](index=98&type=chunk) [Compliance with the Model Code for Securities Transactions by Directors](index=36&type=section&id=Compliance%20with%20the%20Model%20Code%20for%20Securities%20Transactions%20by%20Directors) All Directors confirmed their compliance with the required standards of the Model Code and their own code for securities transactions during the period - All Directors confirmed their continuous compliance with the required standards set out in the Model Code and their own code during this period[99](index=99&type=chunk) [Audit Committee](index=36&type=section&id=Audit%20Committee) The Audit Committee, comprising Mr. Liu Jingwei (Chairman), Mr. Zhu Jianbiao, and Mr. Liu Guoxi, reviewed the Group's unaudited condensed consolidated interim results - The Audit Committee has reviewed the Group's unaudited condensed consolidated interim results for this period[100](index=100&type=chunk) - The Audit Committee comprises Mr. Liu Jingwei (Chairman), Mr. Zhu Jianbiao (Independent Non-executive Director), and Mr. Liu Guoxi (Non-executive Director)[100](index=100&type=chunk) [Interim Dividends](index=36&type=section&id=Interim%20Dividends) The Board did not declare any interim dividends for the current period - The Board did not declare any interim dividends for this period[101](index=101&type=chunk) [Acknowledgements](index=37&type=section&id=Acknowledgements) The Board extends its sincere gratitude to all stakeholders for their contributions to the Group during the period - The Board extends its sincere gratitude to all stakeholders for their contributions to the Group during this period[102](index=102&type=chunk)