[GEM Features and Disclaimer](index=2&type=section&id=GEM%E7%9A%84%E7%89%B9%E8%89%B2) The GEM market provides a listing platform for small and medium-sized enterprises, but this entails higher investment risks and market volatility, with no guarantee of high liquidity [GEM Market Positioning and Risk Warning](index=2&type=section&id=GEM%E4%B9%8B%E5%AE%9A%E4%BD%8D) The GEM market offers a listing platform for small and medium-sized companies, but these companies typically carry higher investment risks and market volatility, with no assurance of high liquidity - The GEM market provides listing opportunities for small and medium-sized companies, but involves **higher investment risks**, **greater market volatility**, and **no guaranteed liquidity**[2](index=2&type=chunk) - Hong Kong Exchanges and Clearing Limited and the Stock Exchange take no responsibility for this report's content, make no representation as to its accuracy or completeness, and disclaim any liability for losses arising from reliance on it[2](index=2&type=chunk) [Interim Results Summary](index=3&type=section&id=%E6%91%98%E8%A6%81) The group's total revenue increased by 26.1% to HK$111.9 million, with loss attributable to owners narrowing to HK$8.348 million for the six months ended June 30, 2025 [Financial Performance Summary](index=3&type=section&id=%E8%B2%A1%E5%8B%99%E8%A1%A8%E7%8F%BE%E6%91%98%E8%A6%81) For the six months ended June 30, 2025, the company's total revenue increased by 26.1% to approximately HK$111.9 million, and loss attributable to owners narrowed to approximately HK$8.348 million Interim Financial Summary 2025 | Metric | H1 2025 (HK$ Thousand) | H1 2024 (HK$ Thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Total Revenue | 111,920 | 88,713 | +26.1% | | Loss Attributable to Owners of the Company | (8,348) | (10,740) | -22.3% | | Interim Dividend | Nil | Nil | - | [Unaudited Consolidated Results](index=3&type=section&id=%E6%9C%AA%E7%B6%93%E5%AF%A9%E6%A0%B8%E6%A5%AD%E7%B8%BE) The group's unaudited consolidated results for the period show improved financial performance with reduced losses and positive comprehensive income [Unaudited Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=4&type=section&id=%E6%9C%AA%E7%B6%93%E5%AF%A9%E6%A0%B8%E7%B6%9C%E5%90%88%E6%90%8D%E7%9B%8A%E5%8F%8A%E5%85%B6%E4%BB%96%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) For the six months ended June 30, 2025, group revenue grew 26.1% to HK$111.9 million, with loss for the period narrowing to HK$7.968 million, primarily due to increased revenue and positive exchange differences Consolidated Statement of Profit or Loss and Other Comprehensive Income Overview | Metric | H1 2025 (HK$ Thousand) | H1 2024 (HK$ Thousand) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 111,920 | 88,713 | +26.1% | | Loss Before Income Tax | (7,968) | (11,223) | -29.0% | | Loss for the Period | (7,968) | (11,223) | -29.0% | | Loss Attributable to Owners of the Company | (8,348) | (10,740) | -22.3% | | Exchange Differences on Translation of Foreign Operations | 8,944 | (8,201) | From Negative to Positive | | Total Comprehensive Income for the Period | 976 | (19,424) | From Negative to Positive | | Basic and Diluted Loss Per Share | (0.008) HK$ | (0.01) HK$ | Loss Narrowed | [Unaudited Consolidated Statement of Financial Position](index=6&type=section&id=%E6%9C%AA%E7%B6%93%E5%AF%A9%E6%A0%B8%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) As of June 30, 2025, the group's total assets increased to HK$780.8 million, with significant growth in current assets and cash and cash equivalents, while net assets remained stable Consolidated Statement of Financial Position Overview | Metric | June 30, 2025 (HK$ Thousand) | Dec 31, 2024 (HK$ Thousand) | Change | | :--- | :--- | :--- | :--- | | Total Non-current Assets | 668,829 | 654,879 | +2.1% | | Total Current Assets | 111,951 | 101,427 | +10.4% | | Inventories | 2,946 | 6,299 | -53.2% | | Trade Receivables | 17,302 | 22,669 | -23.7% | | Cash and Cash Equivalents | 67,820 | 49,060 | +38.2% | | Total Assets | 780,780 | 756,306 | +3.2% | | Total Current Liabilities | 184,302 | 172,760 | +6.7% | | Bank Borrowings (Current) | 88,248 | 78,441 | +12.5% | | Total Non-current Liabilities | 334,140 | 322,184 | +3.7% | | Bank Borrowings (Non-current) | 256,393 | 252,221 | +1.6% | | Total Liabilities | 518,442 | 494,944 | +4.7% | | Net Assets | 262,338 | 261,362 | +0.4% | | Total Equity | 262,338 | 261,362 | +0.4% | [Unaudited Consolidated Statement of Changes in Equity](index=8&type=section&id=%E6%9C%AA%E7%B6%93%E5%AF%A9%E6%A0%B8%E7%B6%9C%E5%90%88%E6%AC%8A%E7%9B%8A%E8%AE%8A%E5%8B%95%E8%A1%A8) For the six months ended June 30, 2025, equity attributable to owners slightly decreased, but total equity remained stable due to an increase in non-controlling interests and a positive shift in exchange reserve Consolidated Statement of Changes in Equity Overview | Metric | June 30, 2025 (HK$ Thousand) | Dec 31, 2024 (HK$ Thousand) | Change | | :--- | :--- | :--- | :--- | | Equity Attributable to Owners of the Company | 217,921 | 218,604 | -0.3% | | Non-controlling Interests | 44,417 | 42,758 | +3.9% | | Total Equity | 262,338 | 261,362 | +0.4% | | Exchange Reserve | 8,450 | 785 | +976.4% | | Accumulated Losses | (623,738) | (615,390) | Loss Widened | [Unaudited Condensed Consolidated Statement of Cash Flows](index=9&type=section&id=%E6%9C%AA%E7%B6%93%E5%AF%A9%E6%A0%B8%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) For the six months ended June 30, 2025, net cash generated from operating activities significantly decreased, while investment activities shifted from cash outflow to inflow, leading to a notable increase in cash and cash equivalents at period-end Condensed Consolidated Statement of Cash Flows Overview | Metric | H1 2025 (HK$ Thousand) | H1 2024 (HK$ Thousand) | Change | | :--- | :--- | :--- | :--- | | Net Cash Generated from Operating Activities | 3,938 | 22,002 | -82.1% | | Net Cash Used in Investing Activities | 8,300 | (27,134) | From Outflow to Inflow | | Net Cash Generated from Financing Activities | 5,193 | 16,090 | -67.7% | | Net Increase in Cash and Cash Equivalents | 17,431 | 10,958 | +59.1% | | Cash and Cash Equivalents at End of Period | 67,820 | 41,535 | +63.3% | [Notes to the Unaudited Condensed Consolidated Financial Statements](index=10&type=section&id=%E6%9C%AA%E7%B6%93%E5%AF%A9%E6%A0%B8%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8%E9%99%84%E8%A8%BB) These notes provide detailed information on the group's accounting policies, revenue breakdown, expenses, and financial position, supporting the unaudited condensed consolidated financial statements [1. Basis of Preparation and Significant Accounting Policies](index=10&type=section&id=1.%20Basis%20of%20Preparation%20and%20Significant%20Accounting%20Policies) The group primarily engages in natural gas transportation and distribution, heat and biomass gasification product sales, and property investment in China, with interim financial statements prepared under HKFRS and new standards having no material impact - The Company's principal business is investment holding, with the Group primarily engaged in the transportation and distribution of natural gas, sales of heat and biomass gasification related products, and property investment in China[11](index=11&type=chunk) - These condensed consolidated financial statements are prepared in accordance with Hong Kong Financial Reporting Standards, adopting several new standards effective January 1, 2025, which have **no material impact** on current or prior period results and financial position[11](index=11&type=chunk)[12](index=12&type=chunk)[13](index=13&type=chunk) [2. Revenue Analysis](index=11&type=section&id=2.%20Revenue) For the six months ended June 30, 2025, total group revenue was HK$111.9 million, primarily from natural gas sales and distribution (HK$81.837 million) and heat and biomass gasification product sales (HK$15.4 million), with significant growth in natural gas transportation services revenue Revenue Source Analysis | Revenue Source | H1 2025 (HK$ Thousand) | H1 2024 (HK$ Thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Sales and Distribution of Natural Gas | 81,837 | 65,937 | +24.1% | | Sales of Heat and Biomass Gasification Related Products | 15,400 | 13,652 | +12.8% | | Natural Gas Transportation Services | 7,463 | 1,004 | +643.3% | | Gross Rental Income | 7,220 | 8,120 | -11.1% | | Total Revenue | 111,920 | 88,713 | +26.1% | [3. Other Income, Gains and Losses](index=12&type=section&id=3.%20Other%20Income%2C%20Gains%20and%20Losses) For the six months ended June 30, 2025, total other income and gains decreased to HK$1.254 million, mainly due to reduced miscellaneous and bank interest income, and fair value losses on trading investments Other Income, Gains and Losses | Item | H1 2025 (HK$ Thousand) | H1 2024 (HK$ Thousand) | YoY Change | | :--- | :--- | :--- | :--- | | Bank Interest Income | 43 | 108 | -60.2% | | Miscellaneous Income | 1,228 | 1,694 | -27.5% | | Fair Value (Loss)/Gain on Financial Assets at FVTPL | (17) | 48 | From Gain to Loss | | Total | 1,254 | 1,850 | -32.2% | [4. Finance Costs](index=12&type=section&id=4.%20Finance%20Costs) For the six months ended June 30, 2025, group finance costs significantly increased by 73% to HK$8.829 million, primarily due to a substantial rise in interest on bank and other borrowings Components of Finance Costs | Item | H1 2025 (HK$ Thousand) | H1 2024 (HK$ Thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Interest on Bank and Other Borrowings | 6,034 | 2,462 | +145.1% | | Interest on Loan from a Substantial Shareholder | 2,625 | 2,490 | +5.4% | | Interest on Lease Liabilities | 170 | 152 | +11.8% | | Total | 8,829 | 5,104 | +73.0% | [5. Loss Before Income Tax](index=13&type=section&id=5.%20Loss%20Before%20Income%20Tax) For the six months ended June 30, 2025, the group's loss before income tax was after deducting various expenses including depreciation, short-term lease expenses, and property management fees, with depreciation increasing Major Expense Items | Item | H1 2025 (HK$ Thousand) | H1 2024 (HK$ Thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Depreciation of Property, Plant and Equipment | 9,670 | 8,253 | +17.2% | | Short-term Lease Expenses | 270 | 372 | -27.4% | | Property Management Fees for Investment Properties | 1,638 | 1,443 | +13.5% | | Entertainment and Travel Expenses | 1,761 | 1,493 | +17.9% | | Research and Development Expenses | 1,063 | 1,130 | -6.0% | [6. Income Tax](index=14&type=section&id=6.%20Income%20Tax) For the six months ended June 30, 2025, total income tax for the period was nil as Hong Kong subsidiaries generated no assessable profits, while Chinese subsidiaries are subject to a 25% corporate income tax rate - Total income tax for the period was **nil**, as Hong Kong subsidiaries generated no assessable profits[18](index=18&type=chunk) - The Company's PRC subsidiaries are subject to a uniform **25% corporate income tax rate**[18](index=18&type=chunk) [7. Dividends Policy](index=14&type=section&id=7.%20Dividends) The Board recommended no interim dividend for the six months ended June 30, 2025, consistent with the prior year - The Board recommended **no interim dividend** for the six months ended June 30, 2025[19](index=19&type=chunk) [8. Loss Per Share](index=15&type=section&id=8.%20Loss%20Per%20Share) For the six months ended June 30, 2025, basic and diluted loss per share attributable to owners was HK$0.008, narrowing from HK$0.01 in the prior year, with basic and diluted losses being identical due to share option exercise prices Loss Per Share Data | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Loss for the Period Attributable to Owners of the Company (HK$ Thousand) | (8,348) | (10,740) | | Weighted Average Number of Ordinary Shares in Issue (Thousand Shares) | 1,023,987 | 1,023,987 | | Basic and Diluted Loss Per Share | (0.008) HK$ | (0.01) HK$ | - Basic and diluted loss per share were **identical** for the six months ended June 30, 2025 and 2024, as the exercise price of share options exceeded the average market price[23](index=23&type=chunk) [9. Reportable Segment Results](index=16&type=section&id=9.%20Reportable%20Segments) The group operates four segments: natural gas sales and distribution, heat and biomass gasification product sales, natural gas transportation services, and property investment, with natural gas transportation services showing significant revenue growth and all segments achieving profit in H1 2025 H1 2025 Segment Revenue and Profit | Segment | Revenue from External Customers (HK$ Thousand) | Reportable Segment Profit (HK$ Thousand) | | :--- | :--- | :--- | | Sales and Distribution of Natural Gas | 81,837 | 5,382 | | Sales of Heat and Biomass Gasification Related Products | 15,400 | 35 | | Natural Gas Transportation Services | 7,463 | 1,265 | | Property Investment | 7,220 | 1,956 | | Total | 111,920 | 8,638 | H1 2024 Segment Revenue and Profit | Segment | Revenue from External Customers (HK$ Thousand) | Reportable Segment Profit/(Loss) (HK$ Thousand) | | :--- | :--- | :--- | | Sales and Distribution of Natural Gas | 65,937 | 1,169 | | Sales of Heat and Biomass Gasification Related Products | 13,652 | (2,531) | | Natural Gas Transportation Services | 1,004 | (45) | | Property Investment | 8,120 | 2,186 | | Total | 88,713 | 779 | - In H1 2025, natural gas transportation services revenue **increased by 643.3% year-on-year**, with all reportable segments achieving profit, reversing the losses in heat and biomass gasification product sales and natural gas transportation services segments in H1 2024[24](index=24&type=chunk)[25](index=25&type=chunk) [10. Trade Receivables](index=18&type=section&id=10.%20Trade%20Receivables) As of June 30, 2025, net trade receivables decreased to HK$17.302 million from year-end 2024, with a slight increase in impairment provisions, and the group maintains strict credit control with varying credit terms across businesses Trade Receivables Overview | Metric | June 30, 2025 (HK$ Thousand) | Dec 31, 2024 (HK$ Thousand) | Change | | :--- | :--- | :--- | :--- | | Trade Receivables | 23,301 | 27,240 | -14.4% | | Less: Impairment Provision | (5,999) | (5,826) | +3.0% | | Net Trade Receivables | 17,302 | 21,414 | -19.2% | | Bills Receivable | – | 1,255 | -100% | | Total | 17,302 | 22,669 | -23.7% | Ageing Analysis of Trade Receivables (Net of Impairment Losses) | Ageing | June 30, 2025 (HK$ Thousand) | Dec 31, 2024 (HK$ Thousand) | Change | | :--- | :--- | :--- | :--- | | Within 30 days | 8,908 | 21,899 | -59.3% | | Over 90 days | 8,263 | 578 | +1330.0% | - The Group grants credit terms of **three and five working days** after invoice date for biomass gasification products and natural gas sales respectively, **no credit terms** for heat and natural gas transportation services, and property investment tenants are required to pay rent in advance[28](index=28&type=chunk) [11. Trade Payables](index=20&type=section&id=11.%20Trade%20Payables) As of June 30, 2025, total trade payables slightly increased to HK$11.487 million from year-end 2024, with a significant rise in payables over 90 days Ageing Analysis of Trade Payables | Ageing | June 30, 2025 (HK$ Thousand) | Dec 31, 2024 (HK$ Thousand) | Change | | :--- | :--- | :--- | :--- | | Within 30 days | 3,878 | 8,174 | -52.6% | | Over 90 days | 6,713 | 2,249 | +198.5% | | Total | 11,487 | 11,129 | +3.2% | [12. Bank Borrowings and Loan Financing](index=20&type=section&id=12.%20Bank%20Borrowings%20and%20Loan%20Financing) As of June 30, 2025, total bank borrowings increased to HK$344.6 million, primarily secured term loans, with an effective interest rate of 3.762% per annum, and various assets and guarantees serving as collateral Bank Borrowings Overview | Category | June 30, 2025 (HK$ Thousand) | Dec 31, 2024 (HK$ Thousand) | Change | | :--- | :--- | :--- | :--- | | Current Bank Borrowings | 88,248 | 78,441 | +12.5% | | Non-current Bank Borrowings | 256,393 | 252,221 | +1.6% | | Total | 344,641 | 330,662 | +4.2% | - As of June 30, 2025, the effective interest rate for interest-bearing borrowings was **3.762% per annum** (2024: 4.113% per annum)[32](index=32&type=chunk) - Bank loans are secured by certain investment properties, property, plant and equipment, corporate guarantees from subsidiaries and non-controlling shareholders, independent third-party corporate guarantees, a legal charge from Ms. Ma Zheng (a substantial shareholder and director), and personal guarantees from Mr. Wei Buti (a director of a subsidiary) and his spouse[35](index=35&type=chunk) [13. Share Capital Structure](index=22&type=section&id=13.%20Share%20Capital) As of June 30, 2025, the company's authorized share capital was HK$120 million, with issued and fully paid share capital of HK$63.999 million, comprising 1,023,987,439 ordinary shares of HK$0.0625 each, consistent with year-end 2024 Share Capital Overview | Category | Number of Shares (Thousand Shares) | Amount (HK$ Thousand) | | :--- | :--- | :--- | | Authorized Share Capital (HK$0.0625 par value per share) | 1,920,000 | 120,000 | | Issued and Fully Paid Share Capital (HK$0.0625 par value per share) | 1,023,987 | 63,999 | [14. Operating Leases (as Lessor)](index=22&type=section&id=14.%20Operating%20Leases) As of June 30, 2025, the group's total undiscounted lease payments receivable as lessor for future periods decreased to HK$45.938 million, mainly due to reductions in receivables within one year and over five years Undiscounted Lease Payments Receivable | Period | June 30, 2025 (HK$ Thousand) | Dec 31, 2024 (HK$ Thousand) | Change | | :--- | :--- | :--- | :--- | | Within one year | 10,189 | 12,292 | -17.1% | | Over five years | 9,650 | 12,411 | -22.3% | | Total | 45,938 | 63,751 | -27.9% | [15. Capital Commitments](index=23&type=section&id=15.%20Capital%20Commitments) As of June 30, 2025, the group's contracted but unprovided capital commitments for the acquisition of property, plant and equipment significantly increased to HK$23.058 million from year-end 2024 Capital Commitments Overview | Item | June 30, 2025 (HK$ Thousand) | Dec 31, 2024 (HK$ Thousand) | Change | | :--- | :--- | :--- | :--- | | Contracted but not provided for: Acquisition of property, plant and equipment | 23,058 | 13,837 | +66.6% | [Management Discussion and Analysis](index=24&type=section&id=Management%20Discussion%20and%20Analysis) This section reviews the group's operational and financial performance, economic context, and strategic outlook, highlighting key business segments and future plans [Business Review and Future Outlook](index=24&type=section&id=Business%20Review%20and%20Future%20Outlook) The group's H1 2025 revenue grew 26.1%, driven by Yichang natural gas operations and increased natural gas trading; despite global economic challenges, domestic demand and natural gas essentiality mitigated impacts, with natural gas as a core growth engine [Financial Performance](index=24&type=section&id=Financial%20Performance) For the six months ended June 30, 2025, the group's total revenue increased by 26.1% year-on-year, primarily driven by the full commencement of Yichang natural gas operations and increased natural gas trading - For the six months ended June 30, 2025, the Group's total revenue **increased by 26.1%** compared to the same period in 2024[39](index=39&type=chunk) - The increase in revenue primarily stemmed from the **full commencement of Yichang natural gas operations** and increased natural gas trading during the same period[39](index=39&type=chunk) [Economic Overview](index=24&type=section&id=Economic%20Overview) In H1 2025, the global economy showed differentiated development with moderate US growth and weak Eurozone activity, while China's GDP grew 4.8% supported by manufacturing and clean energy, despite real estate and trade tensions - In H1 2025, the global economy exhibited **differentiated development trends and persistent challenges**, with the US maintaining moderate growth and Eurozone economic activity remaining weak[40](index=40&type=chunk) - China's GDP grew by approximately **4.8% year-on-year** in H1 2025, supported by manufacturing output and clean energy investment, but faced headwinds from a sluggish real estate market and slow recovery in private consumption[41](index=41&type=chunk) [Natural Gas Business](index=25&type=section&id=Natural%20Gas%20Business) The natural gas business benefits from China's accelerated energy transition, driving demand for LNG and pipeline gas, with ongoing "coal-to-gas" policies providing steady revenue and policy dividends - The Group's natural gas business benefits from China's accelerated energy transition, with **increased demand for LNG and pipeline natural gas** driving steady revenue[42](index=42&type=chunk) - Government's "coal-to-gas" policy continues to advance in power generation and heating sectors, creating **policy dividends** and reducing geopolitical volatility impacts[42](index=42&type=chunk) [Biomass Gasification Heating Business](index=25&type=section&id=Biomass%20Gasification%20Heating%20Business) The biomass gasification heating business in Huaining County, Anhui Province, performed stably in 2025, with expectations for full operation, substantial revenue generation, and achieving break-even in the near future - The biomass gasification heating business in Huaining County, Anhui Province, performed **stably in 2025**[43](index=43&type=chunk) - This segment is expected to achieve **full operation and generate substantial revenue** in the future, and is projected to reach **break-even** in the near future[43](index=43&type=chunk) [Property Investment Business](index=25&type=section&id=Property%20Investment%20Business) Yichang's property investment business continued to provide stable cash inflow in 2025, and despite a slight decline in rental income, it remains supported by local government development measures and is expected to be a key revenue contributor - Yichang's property investment business continued to provide **stable cash inflow** for the Group in 2025[44](index=44&type=chunk) - Although rental income slightly decreased due to overall real estate market performance, the sector remains **supported by Yichang municipal government development measures**[44](index=44&type=chunk) [Continuing Connected Transactions](index=25&type=section&id=Continuing%20Connected%20Transactions) The group's indirect non-wholly owned subsidiary entered a three-year natural gas transportation agreement with Yiling Zhongji Thermal Power Co., Ltd., with transportation fees comparable to market rates and deemed fair and reasonable - Yichang Zhongji Natural Gas Utilization Co., Ltd., an indirect non-wholly owned subsidiary of the Company, entered into a **three-year natural gas transportation agreement** with Yichang Yiling Zhongji Thermal Power Co., Ltd. to provide natural gas transportation services[45](index=45&type=chunk) - Yiling Zhongji Thermal Power is legally owned **90% by Beijing Jingneng Clean Energy Power Co., Ltd.** and **10% by Zhongji Energy (Shenzhen) Co., Ltd.**, an indirect wholly-owned subsidiary of the Company[46](index=46&type=chunk) - Transportation fees are subject to annual review and determination at the beginning of each year, with an initial fee of **RMB0.298 (approximately HK$0.325) per cubic meter of natural gas**[46](index=46&type=chunk) [Financial Review](index=27&type=section&id=Financial%20Review) For the six months ended June 30, 2025, total group revenue increased by 26.1% to HK$111.9 million, loss before income tax narrowed to HK$7.968 million, and loss attributable to owners narrowed to HK$8.348 million, primarily due to increased revenue and gross profit Key Financial Performance Data | Metric | H1 2025 (HK$ Thousand) | H1 2024 (HK$ Thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Total Revenue | 111,920 | 88,713 | +26.1% | | Unaudited Loss Before Income Tax | (7,968) | (11,223) | -29.0% | | Loss Attributable to Owners of the Company | (8,348) | (10,740) | -22.3% | - The reduction in loss compared to the same period last year was primarily due to the **increase in the Group's revenue and gross profit** in 2025[47](index=47&type=chunk) - The Board will continue to implement **stringent cost control measures**, maintain a lean and efficient workforce structure, and prudently utilize the Group's corporate resources to create shareholder value[47](index=47&type=chunk) [Business Outlook and Strategic Focus](index=27&type=section&id=Business%20Outlook%20and%20Strategic%20Focus) Despite global economic challenges like geopolitical risks and high interest rates, the group's business, relying on domestic demand and essential natural gas, is less directly impacted, and the Board will pursue prudent management and investment opportunities for long-term value - The global economy showed signs of stability in 2025, but **geopolitical risks, tariffs, and a high-interest rate environment** still require attention[48](index=48&type=chunk) - The Group's businesses, particularly natural gas transportation and distribution and property investment, are **less directly and materially affected by the global economy** due to their reliance on domestic demand and the essential nature of natural gas[48](index=48&type=chunk) - The Board and management are committed to adopting a **prudent and cautious approach** to managing the Group's operations and actively exploring all potential investment opportunities to enhance the Company's long-term value and ensure sustainable growth[48](index=48&type=chunk) [Liquidity and Financial Resources](index=27&type=section&id=Liquidity%20and%20Financial%20Resources) As of June 30, 2025, the directors anticipate the group possesses sufficient financial resources to meet its ongoing operations and future development needs - As of June 30, 2025, the directors expect the Group to have **sufficient financial resources** to meet its ongoing operations and future development needs[49](index=49&type=chunk) [Fundraising Activities](index=28&type=section&id=Fundraising%20Activities) The company did not undertake any fundraising activities during the review period - Except as disclosed above, the Company **did not undertake any fundraising activities** during the review period[50](index=50&type=chunk) [Employee Information](index=28&type=section&id=Employee%20Information) As of June 30, 2025, the group had 159 full-time employees (9 in Hong Kong, 150 in China), with total employee remuneration of approximately HK$11.741 million for the six months, determined by performance, experience, and market practice - As of June 30, 2025, the Group had **9 full-time employees in Hong Kong and 150 in China**[51](index=51&type=chunk) - For the six months ended June 30, 2025, total employee remuneration (including directors' emoluments) was approximately **HK$11.741 million**[51](index=51&type=chunk) [Share Capital Structure](index=28&type=section&id=Share%20Capital%20Structure) As of June 30, 2025, the company's issued share capital consisted of 1,023,987,439 ordinary shares of HK$0.0625 each, listed on GEM of the Stock Exchange - As of June 30, 2025, the Company's issued share capital comprised **1,023,987,439 ordinary shares of HK$0.0625 each**[52](index=52&type=chunk) [Material Investments](index=28&type=section&id=Material%20Investments) Apart from disclosed matters, the group made no other material investments during the review period - Except as disclosed above, the Group **made no other material investments** during the review period[53](index=53&type=chunk) [Material Acquisitions and Disposals of Subsidiaries and Associates/Future Material Investment Plans](index=28&type=section&id=Material%20Acquisitions%20and%20Disposals%20of%20Subsidiaries%20and%20Associates%2FFuture%20Material%20Investment%20Plans) For the six months ended June 30, 2025, the group did not undertake any material acquisitions or disposals of subsidiaries and associates - For the six months ended June 30, 2025, the Group **made no material acquisitions or disposals** of subsidiaries and associates[54](index=54&type=chunk) [Segment Information](index=28&type=section&id=Segment%20Information) Detailed segment information is provided in Note 9 to the unaudited condensed consolidated financial statements and further elaborated in the "Business Review and Future Outlook" section - Detailed segment information is available in **Note 9** under "Notes to the Unaudited Condensed Consolidated Financial Statements" and further elaborated in the "Business Review and Future Outlook" section[55](index=55&type=chunk) [Pledge of Group Assets and Contingent Liabilities](index=28&type=section&id=Pledge%20of%20Group%20Assets%20and%20Contingent%20Liabilities) As of June 30, 2025, certain group investment properties, land, and buildings were pledged as collateral for bank borrowings, with no material contingent liabilities - As of June 30, 2025, certain of the Group's investment properties, land, and buildings were **pledged as collateral for the Group's bank borrowings**[56](index=56&type=chunk) - The Group **had no material contingent liabilities**[56](index=56&type=chunk) [Capital Gearing Ratio](index=29&type=section&id=Capital%20Gearing%20Ratio) As of June 30, 2025, the group had current assets of HK$111.9 million, current liabilities of HK$184.3 million, total external borrowings of HK$344.6 million, and was in a net asset position with a capital gearing ratio of approximately 158% Capital Gearing Ratio Overview | Metric | June 30, 2025 (HK$ Thousand) | | :--- | :--- | | Current Assets | 111,951 | | Current Liabilities | 184,302 | | External Borrowings | 344,641 | | Equity Attributable to Owners of the Company | 217,921 | | Capital Gearing Ratio (Borrowings to Equity Attributable to Owners of the Company) | 158% | - The Group was in a **net asset position** as of June 30, 2025[57](index=57&type=chunk) [Foreign Exchange Fluctuation Risk](index=29&type=section&id=Foreign%20Exchange%20Fluctuation%20Risk) The group's sales and payments are settled in HKD and RMB, with primary operations in China, resulting in minimal foreign exchange risk and no current hedging arrangements, though exchange rate movements will be monitored - The Group's sales and payments are settled in **HKD and RMB**, with operations primarily conducted in China[58](index=58&type=chunk) - As the Group operates in China without import/export business, **foreign exchange risk is minimal**, and no hedging or other measures are currently in place for foreign currency risk[58](index=58&type=chunk) [Directors' and Chief Executive's Interests and Short Positions](index=30&type=section&id=Directors'%20and%20Chief%20Executive's%20Interests%20and%20Short%20Positions%20in%20Shares%2C%20Underlying%20Shares%20and%20Debentures%20of%20the%20Company%20or%20any%20Associated%20Corporation) This section details the long and short positions held by the company's directors and chief executive in the shares, underlying shares, and debentures of the company or its associated corporations [Directors' and Chief Executive's Long Positions in Shares of the Company](index=30&type=section&id=Directors'%20and%20Chief%20Executive's%20Long%20Positions%20in%20Shares%20of%20the%20Company) As of June 30, 2025, Ms. Ma Zheng beneficially owned 36.52% of ordinary shares, and Mr. Yuan Geng beneficially owned 1.89%, with no other interests or short positions held by directors or the chief executive Directors' and Chief Executive's Long Positions in Ordinary Shares of the Company | Name of Director | Nature of Interest | Number of Ordinary Shares | Approximate Percentage of Interest | | :--- | :--- | :--- | :--- | | Ms. Ma Zheng | Beneficial Owner | 373,951,632 | 36.52% | | Mr. Yuan Geng | Beneficial Owner | 19,320,633 | 1.89% | - Save as disclosed, as of June 30, 2025, none of the Company's directors and chief executive held any other interests or short positions in the shares, underlying shares, or debentures of the Company or its associated corporations[60](index=60&type=chunk) [Share Option Scheme](index=31&type=section&id=Share%20Option%20Scheme) This section outlines the company's share option scheme, including its purpose, eligible participants, terms, and the status of options granted or exercised during the period [Details of Share Option Scheme](index=31&type=section&id=Details%20of%20Share%20Option%20Scheme) The company's share option scheme, approved by shareholders on May 17, 2022, is valid for 10 years to reward contributors, with no options granted or exercised during the review period, and no outstanding options as of June 30, 2025 - The Share Option Scheme was **approved by shareholders on May 17, 2022**, and is valid and effective for a period of 10 years from the adoption date[61](index=61&type=chunk) - Eligible participants include **full-time or part-time employees (including directors)** and any suppliers, consultants, agents, and advisors whom the Board reasonably believes have contributed or can contribute to the Group[61](index=61&type=chunk) - The total number of shares that may be issued upon exercise of options shall **not exceed 10% of the Company's total issued shares** at the adoption date, unless the 10% scheme mandate limit is refreshed with renewed shareholder approval[63](index=63&type=chunk) - The Company **did not grant or exercise any share options** during the review period, and there were no outstanding share options as of June 30, 2025[64](index=64&type=chunk) [Substantial Shareholders' Interests and Short Positions](index=33&type=section&id=Substantial%20Shareholders'%20Interests%20and%20Short%20Positions%20in%20Shares%20and%20Underlying%20Shares%20of%20the%20Company) This section details the long and short positions held by substantial shareholders (holding 5% or more) in the company's shares and underlying shares [Substantial Shareholders' Long Positions in Shares of the Company](index=33&type=section&id=Substantial%20Shareholders'%20Long%20Positions%20in%20Shares%20of%20the%20Company) As of June 30, 2025, several substantial shareholders held 5% or more of the company's shares, including Ms. Guo Xiucen and associated companies (12.10%), Mr. Ji Shengzhi and Ms. Lu Ke and associated companies (10.74%), and Vanke Co., Ltd. and associated companies (9.09%) Substantial Shareholders' Long Positions in Ordinary Shares of the Company | Name of Shareholder | Nature of Interest | Number of Shares Held | Approximate Percentage of Interest | | :--- | :--- | :--- | :--- | | Ms. Guo Xiucen | Corporate Interest | 123,867,678 | 12.10% | | Dongcheng Energy Investment Co., Ltd. | Corporate Interest | 123,867,678 | 12.10% | | Zhuohua Investment Co., Ltd. | Beneficial Owner | 123,867,678 | 12.10% | | Mr. Ji Shengzhi | Corporate Interest | 110,000,000 | 10.74% | | Ms. Lu Ke | Corporate Interest | 110,000,000 | 10.74% | | Superb Holdings Limited | Beneficial Owner | 110,000,000 | 10.74% | | Vanke Co., Ltd. | Corporate Interest | 93,089,767 | 9.09% | | Winmaxi (BVI) Company Limited | Beneficial Owner | 93,089,767 | 9.09% | - Zhuohua Investment Co., Ltd. is **80% beneficially owned by Dongcheng Energy Investment Co., Ltd.** (100% beneficially owned by Ms. Guo Xiucen)[68](index=68&type=chunk) - Superb Holdings Limited is **jointly owned by Ms. Lu Ke and Mr. Ji Shengzhi**[68](index=68&type=chunk) - Winmaxi (BVI) Company Limited is a **subsidiary of Vanke Co., Ltd.**[68](index=68&type=chunk) [Directors' Right to Acquire Shares](index=35&type=section&id=Directors'%20Right%20to%20Acquire%20Shares) This section confirms that no arrangements existed during the review period for directors or their associates to benefit from acquiring company shares or debentures [Directors' Right to Acquire Shares](index=35&type=section&id=Directors'%20Right%20to%20Acquire%20Shares) During the review period, neither the company nor any of its subsidiaries participated in any arrangements enabling directors, their spouses, or minor children to benefit from acquiring shares or debentures of the company or any other body corporate - At no time during the period did the Company or any of its subsidiaries participate in any arrangements enabling directors, their spouses, or children under 18 to **benefit from acquiring shares or debentures** of the Company or any other body corporate[69](index=69&type=chunk) [Competing and Conflict of Interests](index=35&type=section&id=Competing%20and%20Conflict%20of%20Interests) This section confirms that no directors, substantial shareholders, or their associates engaged in any business competing with the group or had other conflicts of interest during the review period [Competing and Conflict of Interests](index=35&type=section&id=Competing%20and%20Conflict%20of%20Interests) During the review period, no directors, substantial shareholders, major shareholders, or their respective associates engaged in any business that competed or might compete directly or indirectly with the group's business, nor were there any other conflicts of interest - During the review period, none of the directors, substantial shareholders, major shareholders, or their respective associates engaged in any business that constituted or might constitute **direct or indirect competition** with the Group's business, nor were there any other actual or potential **conflicts of interest** with the Group[70](index=70&type=chunk) [Audit Committee](index=35&type=section&id=Audit%20Committee) This section describes the audit committee's role in reviewing financial controls, internal monitoring, risk management, and external auditor independence, and its composition [Audit Committee Functions and Composition](index=35&type=section&id=Audit%20Committee%20Functions%20and%20Composition) The Audit Committee is responsible for reviewing the group's financial controls, internal monitoring, and risk management systems, assessing external auditor independence, and reviewing financial statements, comprising three independent non-executive directors who reviewed the interim results - The Audit Committee's primary roles and functions include reviewing the Group's **financial controls, internal monitoring, and risk management systems**, reviewing and monitoring the independence and objectivity of external auditors and the effectiveness of audit processes, and reviewing the Group's financial statements and quarterly, interim, and annual reports[71](index=71&type=chunk) - During the review period, the Audit Committee comprised **three independent non-executive directors** of the Company: Mr. Wen Zixun, Mr. Zhong Zhanqiang, and Mr. Song Renke[71](index=71&type=chunk) [Remuneration Committee](index=35&type=section&id=Remuneration%20Committee) This section details the remuneration committee's responsibilities for recommending and determining the remuneration policy and structure for executive directors and senior management, and its composition [Remuneration Committee Functions and Composition](index=35&type=section&id=Remuneration%20Committee%20Functions%20and%20Composition) The Remuneration Committee is responsible for considering and recommending the remuneration policy and structure for all executive directors and senior management, and for reviewing and determining their remuneration, comprising three independent non-executive directors during the review period - The Remuneration Committee's primary roles and functions include considering and recommending to the Board the **remuneration policy and structure for all executive directors and senior management**, and reviewing and determining their remuneration[72](index=72&type=chunk) - During the review period, the Remuneration Committee comprised **three independent non-executive directors** of the Company: Mr. Zhong Zhanqiang, Mr. Wen Zixun, and Mr. Song Renke[72](index=72&type=chunk) [Nomination Committee](index=36&type=section&id=Nomination%20Committee) This section outlines the nomination committee's responsibilities for reviewing board structure, assessing independent non-executive director independence, and recommending director appointments and re-appointments, along with its composition [Nomination Committee Functions and Composition](index=36&type=section&id=Nomination%20Committee%20Functions%20and%20Composition) The Nomination Committee is responsible for annually reviewing the board's structure, assessing the independence of independent non-executive directors, and recommending director appointments and re-appointments, comprising three independent non-executive directors during the review period - The Nomination Committee's primary roles and functions include reviewing the **Board's structure, size, and composition** at least once a year, assessing the independence of independent non-executive directors, and making recommendations to the Board regarding the appointment and re-appointment of directors[73](index=73&type=chunk) - During the review period, the Nomination Committee comprised **three independent non-executive directors** of the Company: Mr. Zhong Zhanqiang, Mr. Wen Zixun, and Mr. Song Renke[73](index=73&type=chunk) [Purchase, Sale or Redemption of Securities](index=36&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20Securities) This section confirms that neither the company nor its subsidiaries engaged in any redemption, purchase, or sale of the company's ordinary shares during the review period [Securities Trading Activities](index=36&type=section&id=Securities%20Trading%20Activities) For the six months ended June 30, 2025, neither the company nor any of its subsidiaries redeemed, purchased, or sold any of the company's ordinary shares - The Company **did not redeem any of its ordinary shares** for the six months ended June 30, 2025[74](index=74&type=chunk) - Neither the Company nor any of its subsidiaries **purchased or sold any of the Company's ordinary shares** for the six months ended June 30, 2025[74](index=74&type=chunk) [Compliance with Corporate Governance Code](index=36&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) This section details the company's adherence to the GEM Listing Rules' Corporate Governance Code, noting a deviation regarding the separation of Chairman and CEO roles, but affirming accountability through the Audit Committee [Corporate Governance Code Compliance](index=36&type=section&id=Corporate%20Governance%20Code%20Compliance) The company complied with all principles and code provisions of the GEM Listing Rules' Corporate Governance Code during the review period, except for code provision C.2.1 (separation of Chairman and CEO roles), which is mitigated by an Audit Committee of independent non-executive directors - The Company applied and complied with all principles and code provisions of the Corporate Governance Code set out in Appendix C1 Part 2 of the GEM Listing Rules for the six months ended June 30, 2025, **except for code provision C.2.1**[75](index=75&type=chunk) - The Company **does not have a "Chief Executive Officer" position**, and the Chairlady, Ms. Ma Zheng, also serves as a director of some of the Company's operating subsidiaries, which deviates from code provision C.2.1[75](index=75&type=chunk) - The Board considers this arrangement appropriate and believes it **does not compromise accountability and independent decision-making**, as the Company has an Audit Committee composed entirely of independent non-executive directors, which helps ensure Ms. Ma Zheng's accountability and independence[75](index=75&type=chunk) [Code of Conduct for Securities Transactions by Directors](index=37&type=section&id=Code%20of%20Conduct%20for%20Securities%20Transactions%20by%20Directors) This section confirms the company's adoption of a code of conduct for directors' securities transactions, which is no less exacting than GEM Listing Rules, and all directors' compliance during the review period [Directors' Securities Trading Code Compliance](index=37&type=section&id=Directors'%20Securities%20Trading%20Code%20Compliance) The company adopted a code of conduct for directors' securities transactions no less exacting than the GEM Listing Rules, and all directors confirmed compliance throughout the six months ended June 30, 2025 - The Company has adopted a code of conduct for directors' securities transactions that is **no less exacting than the required standard of dealings** set out in Rules 5.48 to 5.67 of the GEM Listing Rules[76](index=76&type=chunk) - Following specific enquiries with all directors, all directors confirmed their **compliance with the adopted required standard of dealings** and the code of conduct for directors' securities transactions throughout the six months ended June 30, 2025[76](index=76&type=chunk) [By Order of the Board](index=37&type=section&id=By%20Order%20of%20the%20Board) This section lists the composition of the Board of Directors as of the report date, including executive, non-executive, and independent non-executive directors [Board Composition](index=37&type=section&id=Board%20Composition) As of the report date, the Board comprised executive directors Ms. Ma Zheng and Mr. Yuan Geng, non-executive director Mr. Ji Jianghua, and independent non-executive directors Mr. Wen Zixun, Mr. Zhong Zhanqiang, and Mr. Song Renke - As of the date of this report, the Board comprised **executive directors Ms. Ma Zheng and Mr. Yuan Geng**, **non-executive director Mr. Ji Jianghua**, and **independent non-executive directors Mr. Wen Zixun, Mr. Zhong Zhanqiang, and Mr. Song Renke**[78](index=78&type=chunk)

[Interim Results Announcement](index=1&type=section&id=Interim%20Results%20Announcement) For the six months ended June 30, 2025, net profit attributable to owners of the company before revaluation and depreciation increased by 43% to HK$59.3 million, while the after-tax loss significantly narrowed [Performance Overview](index=1&type=section&id=Performance%20Overview) For the six months ended June 30, 2025, net profit attributable to owners of the company before revaluation and depreciation increased by 43% to HK$59.3 million, while the after-tax loss significantly narrowed Key Financial Indicators | Indicator | As of June 30, 2025 (HK$ thousands) | As of June 30, 2024 (HK$ thousands) | Change | | :--- | :--- | :--- | :--- | | Net profit attributable to owners of the company after tax and before revaluation and depreciation of land, property, and equipment | 59,295 | 41,562 | +43% | | Loss after tax and non-controlling interests | (15,198) | (32,360) | -53% (Loss narrowed) | [Interim Dividend](index=1&type=section&id=Interim%20Dividend) The Board does not recommend an interim dividend for the six months ended June 30, 2025, consistent with the prior year - The Board does not recommend an interim dividend for the six months ended June 30, 2025[5](index=5&type=chunk) [Condensed Consolidated Financial Statements](index=2&type=section&id=Condensed%20Consolidated%20Financial%20Statements) The Group's financial statements for the period show increased revenue and gross profit, a narrowed loss, and growth in total assets less current liabilities and total equity [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended June 30, 2025, the Group's total revenue increased to HK$256.6 million, gross profit significantly improved, and the loss for the period narrowed to HK$15.4 million from HK$32.5 million in the prior year Summary of Condensed Consolidated Statement of Profit or Loss | Indicator | As of June 30, 2025 (HK$ thousands) | As of June 30, 2024 (HK$ thousands) | | :--- | :--- | :--- | | Total Revenue | 256,643 | 243,969 | | Gross Profit | 34,036 | 19,722 | | Loss Before Tax | (8,731) | (29,483) | | Loss for the Period | (15,385) | (32,546) | | Basic Loss Per Share (HK cents) | (0.17) | (0.36) | [Condensed Consolidated Statement of Total Comprehensive Income](index=3&type=section&id=Condensed%20Consolidated%20Statement%20of%20Total%20Comprehensive%20Income) Total comprehensive income for the period turned from a loss of HK$47.2 million in the prior year to a gain of HK$93.5 million, primarily due to positive exchange differences from overseas operations Summary of Condensed Consolidated Statement of Total Comprehensive Income | Indicator | As of June 30, 2025 (HK$ thousands) | As of June 30, 2024 (HK$ thousands) | | :--- | :--- | :--- | | Loss for the Period | (15,385) | (32,546) | | Exchange differences arising from translation of overseas operations | 121,222 | (13,773) | | Total comprehensive income (expense) for the period | 93,545 | (47,227) | | Total comprehensive income (expense) attributable to owners of the company | 93,732 | (47,041) | [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 total assets less current liabilities increased to HK$4,332.5 million, net current liabilities decreased, and total equity grew to HK$4,230.5 million Summary of Condensed Consolidated Statement of Financial Position | Indicator | As of June 30, 2025 (HK$ thousands) | As of December 31, 2024 (HK$ thousands) | | :--- | :--- | :--- | | Non-current assets | 4,831,395 | 4,777,882 | | Current assets | 194,187 | 224,446 | | Current liabilities | 693,064 | 761,854 | | Net current liabilities | (498,877) | (537,408) | | Total assets less current liabilities | 4,332,518 | 4,240,474 | | Equity attributable to owners of the company | 4,224,058 | 4,130,326 | | Total equity | 4,230,507 | 4,136,962 | [Notes to the Condensed Consolidated Financial Statements](index=5&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) This section details the basis of preparation, principal accounting policies, and specific breakdowns of revenue, segments, finance costs, income tax, loss, dividends, loss per share, and receivables/payables [1. Basis of Preparation](index=5&type=section&id=1.%20Basis%20of%20Preparation) The condensed consolidated financial statements are prepared in accordance with Hong Kong Accounting Standard 34 and the applicable disclosure requirements of Appendix D2 to the Listing Rules of The Stock Exchange of Hong Kong Limited - Financial statements are prepared in accordance with HKAS 34 and Appendix D2 of the Listing Rules[9](index=9&type=chunk) - Financial information for the year ended December 31, 2024, has been delivered to the Companies Registry, with an unqualified auditor's report[9](index=9&type=chunk) [2. Principal Accounting Policies](index=5&type=section&id=2.%20Principal%20Accounting%20Policies) The financial statements are prepared on a historical cost basis, except for investment properties and certain financial instruments measured at fair value; amendments to HKFRS accounting standards were first applied this period with no significant impact on financial position or performance - Financial statements are prepared on a historical cost basis, with investment properties and some financial instruments measured at fair value[10](index=10&type=chunk) - Amendments to HKFRS accounting standards were first applied this period, with no significant impact on financial position or performance[12](index=12&type=chunk) [3. Revenue](index=6&type=section&id=3.%20Revenue) Total revenue primarily comprises hotel operations revenue of HK$231.2 million, property rental income of HK$25.4 million, and dividend income of HK$25 thousand Revenue Source Analysis | Revenue Source | As of June 30, 2025 (HK$ thousands) | As of June 30, 2024 (HK$ thousands) | | :--- | :--- | :--- | | Hotel Operations Revenue | 231,238 | 224,959 | | Property Rental Income | 25,380 | 19,010 | | Dividend Income | 25 | - | | **Total Revenue** | **256,643** | **243,969** | [4. Segment Information](index=7&type=section&id=4.%20Segment%20Information) The Group's operating and reportable segments include hotel services, property investment, and securities investment, with revenues of HK$231.2 million, HK$25.4 million, and HK$25 thousand, respectively - The chief operating decision maker is the Chairman of the Company, and segment information is used for resource allocation and performance assessment[14](index=14&type=chunk) - Operating segments include **8** hotel services, property investment, and securities investment[15](index=15&type=chunk) Segment Revenue and Results | Segment | Revenue as of June 30, 2025 (HK$ thousands) | Revenue as of June 30, 2024 (HK$ thousands) | Results as of June 30, 2025 (HK$ thousands) | Results as of June 30, 2024 (HK$ thousands) | | :--- | :--- | :--- | :--- | :--- | | Hotel Services | 231,238 | 224,959 | 8,631 | 712 | | Property Investment | 25,380 | 19,010 | 20,380 | 14,010 | | Securities Investment | 25 | - | 25 | - | [5. Finance Costs](index=8&type=section&id=5.%20Finance%20Costs) Total finance costs decreased to HK$17.2 million from HK$23.2 million in the prior year, primarily comprising interest on bank loans and amounts due to immediate holding company Analysis of Finance Costs | Interest Source | As of June 30, 2025 (HK$ thousands) | As of June 30, 2024 (HK$ thousands) | | :--- | :--- | :--- | | Bank Loans | 8,195 | 10,764 | | Amounts due to immediate holding company | 8,982 | 12,464 | | **Total Finance Costs** | **17,177** | **23,228** | [6. Income Tax Expense](index=9&type=section&id=6.%20Income%20Tax%20Expense) Income tax expense significantly increased to HK$6.7 million from HK$3.1 million in the prior year, primarily due to current taxation in Hong Kong and the UK Components of Income Tax Expense | Tax Source | As of June 30, 2025 (HK$ thousands) | As of June 30, 2024 (HK$ thousands) | | :--- | :--- | :--- | | Hong Kong current tax | 3,933 | 2,260 | | UK current tax | 4,231 | 2,459 | | Under-provision in prior years (Hong Kong) | 111 | - | | Deferred tax | (1,621) | (1,656) | | **Total Income Tax Expense** | **6,654** | **3,063** | - Hong Kong profits tax rate remains at **16.5%**, while China and UK profits tax rates are recognized based on the estimated weighted average annual income tax rate[18](index=18&type=chunk) [7. Loss for the Period](index=9&type=section&id=7.%20Loss%20for%20the%20Period) The loss for the period was HK$15.4 million, after deducting depreciation expenses of HK$69.1 million and including bank deposit interest income of HK$1.2 million Adjustments to Loss for the Period | Item | As of June 30, 2025 (HK$ thousands) | As of June 30, 2024 (HK$ thousands) | | :--- | :--- | :--- | | Depreciation of right-of-use assets | 384 | 381 | | Depreciation of property, plant and equipment | 69,109 | 68,541 | | Interest income from bank deposits | (1,230) | (2,718) | | Loss on disposal of property, plant and equipment | 12 | 741 | [8. Dividends](index=10&type=section&id=8.%20Dividends) For the six months ended June 30, 2025, the Board resolved not to declare or recommend an interim dividend, consistent with the prior year - The Board does not declare or recommend an interim dividend for the six months ended June 30, 2025[20](index=20&type=chunk) [9. Loss Per Share](index=10&type=section&id=9.%20Loss%20Per%20Share) Basic loss per share narrowed to 0.17 HK cents from 0.36 HK cents in the prior year, primarily due to a reduction in loss attributable to owners of the company Loss Per Share Calculation | Indicator | As of June 30, 2025 | As of June 30, 2024 | | :--- | :--- | :--- | | Loss for the period attributable to owners of the company (HK$ thousands) | 15,198 | 32,360 | | Shares in issue (shares) | 8,947,051,000 | 8,947,051,000 | | Basic loss per share (HK cents) | (0.17) | (0.36) | - No potential ordinary shares existed during the period or prior period, thus diluted loss per share is not presented[22](index=22&type=chunk) [10. Trade and Other Receivables](index=10&type=section&id=10.%20Trade%20and%20Other%20Receivables) As of June 30, 2025, total trade and other receivables decreased to HK$9.1 million from HK$11.1 million as of December 31, 2024 Components of Trade and Other Receivables | Item | As of June 30, 2025 (HK$ thousands) | As of December 31, 2024 (HK$ thousands) | | :--- | :--- | :--- | | Trade receivables (customer contracts) | 5,951 | 8,361 | | Other receivables | 3,121 | 2,776 | | **Total** | **9,072** | **11,137** | - The Group grants credit terms of **30 to 60 days** to hotel travel agents and certain customers[23](index=23&type=chunk) [11. Trade and Other Payables and Accruals](index=11&type=section&id=11.%20Trade%20and%20Other%20Payables%20and%20Accruals) As of June 30, 2025, total trade and other payables and accruals decreased to HK$39.7 million from HK$47.4 million as of December 31, 2024 Components of Trade and Other Payables and Accruals | Item | As of June 30, 2025 (HK$ thousands) | As of December 31, 2024 (HK$ thousands) | | :--- | :--- | :--- | | Trade payables | 4,324 | 5,031 | | Other payables and accruals | 35,361 | 42,385 | | **Total** | **39,685** | **47,416** | [Management Discussion and Analysis](index=12&type=section&id=Management%20Discussion%20and%20Analysis) This section provides an overview of the Group's overall performance, interim dividend policy, detailed analysis of revenue, hotel performance, costs, financing, key business achievements, and future outlook [Overall Performance](index=12&type=section&id=Overall%20Performance) Net profit attributable to owners of the company before revaluation and depreciation increased by 43% to HK$59.3 million, driven by higher revenue and reduced hotel operating and finance costs - Net profit attributable to owners of the company after tax and before revaluation and depreciation of land, property, and equipment was **HK$59.3 million**, representing a **43% year-on-year increase**[25](index=25&type=chunk) - The overall increase in profit was primarily due to a **5% increase in revenue** and a reduction in hotel operating and finance costs[28](index=28&type=chunk) Segment Profit and Loss | Indicator | As of June 30, 2025 (HK$ thousands) | As of June 30, 2024 (HK$ thousands) | Change | | :--- | :--- | :--- | :--- | | Hotel Operations Profit | 8,631 | 712 | +1,112% | | Property Investment Profit | 20,380 | 14,010 | +45% | | Securities Investment Income | 25 | - | Not applicable | | Loss After Tax | (15,385) | (32,546) | -53% | [Interim Dividend Policy and Rationale](index=12&type=section&id=Interim%20Dividend%20Policy%20and%20Rationale) The Board does not recommend an interim dividend to ensure higher cash flow for challenging economic conditions, high operating and interest costs, and to retain cash for debt reduction and the London Wood Street Hotel renovation - Not distributing an interim dividend aims to ensure higher cash flow to cope with unstable hotel industry conditions[27](index=27&type=chunk) - Cash is retained to further reduce bank debt and shareholder loans[27](index=27&type=chunk) - Cash is retained for the renovation project of the London Wood Street Hotel[27](index=27&type=chunk) [Performance Analysis](index=13&type=section&id=Performance%20Analysis) This section analyzes the Group's revenue, hotel performance, and cost structure, highlighting key drivers and changes during the period [Revenue Analysis](index=13&type=section&id=Revenue%20Analysis) The Group's total revenue increased by 5% year-on-year to HK$258.3 million, driven by a 3% growth in hotel operations revenue and a 34% growth in investment property income Revenue Composition and Changes | Revenue Source | As of June 30, 2025 (HK$ thousands) | As of June 30, 2024 (HK$ thousands) | Change | Reason | | :--- | :--- | :--- | :--- | :--- | | Hotel Operations Revenue | 231,238 | 224,959 | +3% | Increased room rates | | Investment Property Income | 25,380 | 19,010 | +34% | Increased rental income from London Royal Scot Hotel | | Other Income | 1,640 | 2,182 | -25% | Not applicable | | **Total** | **258,258** | **246,151** | **+5%** | | [Hotel Performance](index=13&type=section&id=Hotel%20Performance) The Group operates seven hotels and leases one in London, with hotel operations revenue increasing by 3% and the annual rent for London Royal Scot Hotel successfully rising by 34% to £4.737 million - The Group currently owns **eight hotels**, operating seven and leasing one located in London[30](index=30&type=chunk) - Hotel operations revenue increased by **3%** to **HK$231.0 million**[30](index=30&type=chunk) - The annual rent for the London Royal Scot Hotel successfully increased by **34%** to **£4.737 million**[31](index=31&type=chunk) Average Room Occupancy Rate from January to June 2025 | Hotel Name | Average Room Occupancy Rate (%) | | :--- | :--- | | Ramada Hong Kong Harbour View | 98 | | Ramada Hong Kong Grand | 99 | | Best Western Plus Hotel Hong Kong | 97 | | Grand View Hotel Causeway Bay | 99 | | Best Western Plus Hotel Tsim Sha Tsui | 98 | | Grand View Hotel Bay | 98 | | Shanghai Grand View International Hotel | 88 | [Cost Analysis](index=14&type=section&id=Cost%20Analysis) Hotel services cost (operating cost) for the period was HK$151.9 million, a 2% year-on-year decrease; administrative expenses (excluding depreciation) were HK$21 million, and hotel property depreciation was HK$68.2 million Changes in Key Cost Items | Cost Type | As of June 30, 2025 (HK$ millions) | As of June 30, 2024 (HK$ millions) | Change | | :--- | :--- | :--- | :--- | | Hotel Services Cost (Operating Cost) | 151.9 | 154.6 | -2% | | Cost of Sales (Food & Beverage) | 2.1 | 1.6 | +31% | | Administrative Expenses (excluding depreciation) | 21.0 | 22.3 | -6% | | Hotel Property Depreciation | 68.2 | 68.0 | +0.2 | [Financing Activities](index=15&type=section&id=Financing%20Activities) The Group's total debt decreased by HK$64 million to HK$636 million, the gearing ratio fell to 15%, and finance costs decreased by 26% to HK$17.2 million due to lower interest rates Overall Debt Analysis | Debt Type | As of June 30, 2025 (HK$ millions) | As of December 31, 2024 (HK$ millions) | Change (HK$ millions) | | :--- | :--- | :--- | :--- | | Bank Loans | 301 | 345 | -44 | | Shareholder Loans | 335 | 355 | -20 | | **Total Debt** | **636** | **700** | **-64** | - The gearing ratio decreased from **17%** to **15%**[36](index=36&type=chunk) - Total finance costs were **HK$17.2 million**, a **26% year-on-year decrease**, primarily due to lower interest rates[37](index=37&type=chunk) - The Group's bank loans are primarily denominated in HKD and GBP with floating interest rates, exposing it to foreign exchange risk[38](index=38&type=chunk) [Key Business Achievements](index=16&type=section&id=Key%20Business%20Achievements) Overnight visitor arrivals to Hong Kong recovered but remain below pre-pandemic levels, with declining per capita spending by Chinese tourists. The Group's average hotel occupancy consistently exceeded 90%, total revenue grew by 5%, and the London Royal Scot Hotel's annual rent successfully increased by 34% - Approximately **11.3 million overnight visitors** arrived in Hong Kong, with **75%** being Chinese tourists, still below pre-pandemic levels[39](index=39&type=chunk) - Per capita spending by Chinese tourists remained below **HK$5,100**, lower than the pre-pandemic **HK$6,000**[39](index=39&type=chunk) - The Group's average hotel occupancy rate consistently exceeded **90%**[39](index=39&type=chunk) - The annual rent for the London Royal Scot Hotel successfully increased by **34%** to **£4.737 million**[40](index=40&type=chunk) - The London Wood Street Hotel has been approved for renovation into a luxury hotel with approximately **216 rooms**[40](index=40&type=chunk) [Outlook](index=16&type=section&id=Outlook) The Group holds eight hotels and a London renovation project; future hotel operations and rental income face challenges from a weak Chinese economy and expensive HKD against RMB, but the "multiple-entry visa" policy in major Chinese cities may offer encouragement, with management continuing efforts to increase revenue and control costs - The Group holds **eight revenue-generating hotels** (six in Hong Kong, one in Shanghai, one in London) and the London Wood Street Hotel renovation project[41](index=41&type=chunk) - A weak Chinese economy and an expensive HKD against RMB led more Chinese tourists to stay in the Greater Bay Area and visit Hong Kong as day-trippers[41](index=41&type=chunk) - The implementation of a "multiple-entry visa" policy in other major Chinese cities may offer encouragement for future prospects[41](index=41&type=chunk) - Management will continue efforts to increase revenue and control costs to address challenges[42](index=42&type=chunk) [Corporate Governance](index=17&type=section&id=Corporate%20Governance) This section outlines the company's compliance with corporate governance codes, the Model Code, audit committee review, and the composition of the Board of Directors [(a) Compliance with Corporate Governance Code](index=17&type=section&id=(a)%20Compliance%20with%20Corporate%20Governance%20Code) The company has complied with the Corporate Governance Code in Appendix C1 of the Listing Rules, with one deviation: the Chairman and Chief Executive Officer roles are combined and held by Mr. Cheng Kai Man, which the Board believes facilitates strong leadership, strategic execution, and cost savings - The company has complied with the Corporate Governance Code, but the combined roles of Chairman and Chief Executive Officer (held by Mr. Cheng Kai Man) constitute a deviation[44](index=44&type=chunk) - The Board believes the combined role facilitates strong leadership, strategic execution, and significant cost savings[44](index=44&type=chunk) [(b) Compliance with Model Code](index=17&type=section&id=(b)%20Compliance%20with%20Model%20Code) The company has adopted the Model Code set out in Appendix C3 of the Listing Rules, and all Directors confirmed compliance during the period - All Directors confirmed compliance with the Model Code set out in Appendix C3 of the Listing Rules during the period[45](index=45&type=chunk) [Review by Audit Committee](index=17&type=section&id=Review%20by%20Audit%20Committee) The Audit Committee has reviewed the Group's unaudited financial results for the six months ended June 30, 2025 - The Audit Committee has reviewed the Group's unaudited financial results for the six months ended June 30, 2025[46](index=46&type=chunk) [Board of Directors](index=17&type=section&id=Board%20of%20Directors) As of the announcement date, the Board of Directors comprises four executive directors (including the Chairman), one non-executive director, and three independent non-executive directors - The Board of Directors includes **four executive directors** (Mr. Cheng Kai Man as Chairman), **one non-executive director**, and **three independent non-executive directors**[48](index=48&type=chunk) [Other Information](index=16&type=section&id=Other%20Information) This section confirms that no listed securities of the company were purchased, sold, or redeemed during the period [Purchase, Sale or Redemption of Listed Securities](index=16&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20Listed%20Securities) 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 - During the period, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities[43](index=43&type=chunk)

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其準確性 或完整性亦不發表任何聲明，並明確表示，概不對因本公告全部或任何部份內容而產生或因依 賴該等內容而引致的任何損失承擔任何責任。 中國中煤能源股份有限公司 （於中華人民共和國註冊成立的股份有限公司） （股份代號：01898） 截至2025年6月30日止6個月之中期業績 財務摘要： 董事會宣佈本集團根據國際會計準則第34號「中期財務報告」編製的本集團截至 2025年6月30日止6個月的中期業績。本集團的中期業績未經審計，但已經本公司 核數師安永會計師事務所審閱。 1 • 2025年上半年本集團的收入為人民幣744.36億元，較2024年同期減少人民幣 185.48億元（即-19.9%）。 • 2025年上半年本公司股東應佔利潤為人民幣73.25億元，較2024年同期減少 人民幣33.70億元（即-31.5%）。 • 2025年上半年本公司每股基本盈利為人民幣0.55元，較2024年同期減少人民 幣0.26元。 • 2025年上半年息稅折舊攤銷前利潤為人民幣168.57億元，較2024年同期減少 人民幣62.50億元（即-27.0%） ...

Financial Highlights [Key Financial Highlights](index=1&type=section&id=Key%20Financial%20Highlights) Binhai Investment Company Limited's unaudited results for the six months ended June 30, 2025, show a 17% YoY revenue decline to HK$2,931,118 thousand, while profit for the period grew 3% Key Financial Summary for H1 2025 | Indicator | June 30, 2025 (HK$ thousands) | June 30, 2024 (HK$ thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 2,931,118 | 3,530,446 | -17% | | Gross Profit | 310,051 | 343,366 | -10% | | Profit for the Period | 176,506 | 171,176 | 3% | | Basic Earnings Per Share Attributable to Owners of the Company | 12.54 cents | 12.41 cents | 1% | | Indicator | June 30, 2025 (HK$ thousands) | December 31, 2024 (HK$ thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Total Assets | 7,997,546 | 7,749,788 | 3% | | Total Equity | 2,400,459 | 2,304,146 | 4% | | Total Liabilities | 5,597,087 | 5,445,642 | 3% | Condensed Consolidated Interim Financial Statements [Condensed Consolidated Interim Statement of Profit or Loss](index=2&type=section&id=Condensed%20Consolidated%20Interim%20Statement%20of%20Profit%20or%20Loss) For the six months ended June 30, 2025, revenue decreased by 17% YoY, but profit for the period increased by 3% due to a significant rise in other net gains and lower finance costs Key Data from Condensed Consolidated Interim Statement of Profit or Loss | Indicator | June 30, 2025 (HK$ thousands) | June 30, 2024 (HK$ thousands) | Change | | :--- | :--- | :--- | :--- | | Revenue | 2,931,118 | 3,530,446 | -17% | | Cost of sales and services | (2,621,067) | (3,187,080) | -17.7% | | Gross Profit | 310,051 | 343,366 | -10% | | Other income | 13,016 | 25,568 | -49.1% | | Administrative expenses | (90,086) | (81,603) | +10.4% | | R&D expenses | (50,447) | (57,506) | -12.3% | | Other net gains | 64,072 | 4,024 | +1492.3% | | Operating Profit | 257,759 | 255,145 | +1.0% | | Net finance costs | (43,419) | (59,450) | -26.9% | | Profit for the period | 176,506 | 171,176 | +3.1% | | Profit attributable to owners of the Company | 172,815 | 167,924 | +2.9% | | Basic earnings per share | 12.54 cents | 12.41 cents | +1.0% | [Condensed Consolidated Interim Statement of Comprehensive Income](index=4&type=section&id=Condensed%20Consolidated%20Interim%20Statement%20of%20Comprehensive%20Income) For the six months ended June 30, 2025, total comprehensive income for the period surged by 119.9% YoY to HK$244,612 thousand, driven by a turnaround in other comprehensive income Key Data from Condensed Consolidated Interim Statement of Comprehensive Income | Indicator | June 30, 2025 (HK$ thousands) | June 30, 2024 (HK$ thousands) | Change | | :--- | :--- | :--- | :--- | | Profit for the period | 176,506 | 171,176 | +3.1% | | Other comprehensive income/(loss) | 68,106 | (59,960) | From loss to gain | | Total comprehensive income for the period | 244,612 | 111,216 | +119.9% | | Total comprehensive income for the period attributable to owners of the Company | 239,096 | 109,640 | +118.1% | [Condensed Consolidated Interim Statement of Financial Position](index=5&type=section&id=Condensed%20Consolidated%20Interim%20Statement%20of%20Financial%20Position) As of June 30, 2025, total assets grew to HK$7,997,546 thousand, while current liabilities exceeded current assets by approximately HK$2,536,894 thousand Key Data from Condensed Consolidated Interim Statement of Financial Position | Indicator | June 30, 2025 (HK$ thousands) | December 31, 2024 (HK$ thousands) | Change | | :--- | :--- | :--- | :--- | | **Assets** | | | | | Property, plant and equipment | 6,304,670 | 5,985,500 | +5.3% | | Investments in associates and joint ventures | 316,016 | 302,781 | +4.4% | | Total current assets | 1,056,238 | 1,121,309 | -5.8% | | **Total Assets** | **7,997,546** | **7,749,788** | **+3.2%** | | **Equity and Liabilities** | | | | | Equity attributable to owners of the Company | 2,329,105 | 2,221,739 | +4.8% | | **Total Equity** | **2,400,459** | **2,304,146** | **+4.2%** | | Total non-current liabilities | 2,003,955 | 2,422,971 | -17.3% | | Total current liabilities | 3,593,132 | 3,022,671 | +18.9% | | **Total Liabilities** | **5,597,087** | **5,445,642** | **+2.8%** | - As of June 30, 2025, the Group's **current liabilities exceeded its current assets by approximately HK$2,536,894 thousand**, but management believes it has sufficient financial resources to support its operations and meet its financial obligations for the next 12 months[18](index=18&type=chunk) [Condensed Consolidated Interim Statement of Changes in Equity](index=7&type=section&id=Condensed%20Consolidated%20Interim%20Statement%20of%20Changes%20in%20Equity) For the six months ended June 30, 2025, total equity increased to HK$2,400,459 thousand, positively impacted by profit and other comprehensive income, alongside dividend payments and share repurchases Key Data from Condensed Consolidated Interim Statement of Changes in Equity | Indicator | January 1, 2025 (HK$ thousands) | June 30, 2025 (HK$ thousands) | Change | | :--- | :--- | :--- | :--- | | Equity attributable to owners of the Company | 2,221,739 | 2,329,105 | +4.8% | | Non-controlling interests | 82,407 | 71,354 | -13.4% | | **Total Equity** | **2,304,146** | **2,400,459** | **+4.2%** | | Profit for the period (attributable to owners of the Company) | - | 172,815 | - | | Other comprehensive income for the period (attributable to owners of the Company) | - | 66,281 | - | | Approved prior year's dividend | - | (104,428) | - | | Repurchase of treasury shares | - | (3,424) | - | | Approved redemption of preference shares | - | (24,033) | - | [Condensed Interim Consolidated Statement of Cash Flows](index=9&type=section&id=Condensed%20Interim%20Consolidated%20Statement%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash from operating activities decreased by 43.3% YoY, while financing activities shifted from a net outflow to a net inflow of HK$89,906 thousand Key Data from Condensed Interim Consolidated Statement of Cash Flows | Indicator | June 30, 2025 (HK$ thousands) | June 30, 2024 (HK$ thousands) | Change | | :--- | :--- | :--- | :--- | | Net cash inflow from operating activities | 37,619 | 66,306 | -43.3% | | Net cash outflow from investing activities | (205,469) | (138,207) | +48.7% | | Net cash inflow/(outflow) from financing activities | 89,906 | (48,378) | From outflow to inflow | | Net decrease in cash and cash equivalents | (77,944) | (120,279) | -35.2% | | Cash and cash equivalents at end of period | 325,767 | 662,189 | -50.8% | Notes to the Condensed Consolidated Interim Financial Statements [General Information](index=11&type=section&id=General%20Information) Binhai Investment Company Limited is incorporated in Bermuda with its principal place of business in Hong Kong, and its ordinary shares are listed on the Hong Kong Stock Exchange - The Company is incorporated in Bermuda, with its ordinary shares listed on the Hong Kong Stock Exchange and its principal place of business in Hong Kong[14](index=14&type=chunk) - TEDA HK (an indirect subsidiary of TEDA) holds approximately **42.18%** of the Company's total issued ordinary shares, making it the largest ultimate shareholder; Great Wall Gas Investment (Hong Kong) Limited (a wholly-owned subsidiary of Sinopec) holds approximately **29.52%**, making it the second-largest ultimate shareholder[15](index=15&type=chunk) - The Group's condensed consolidated interim financial statements are presented in Hong Kong dollars, while the functional currency of the Company and its subsidiaries is Renminbi[15](index=15&type=chunk) [Basis of Preparation](index=11&type=section&id=Basis%20of%20Preparation) The financial statements are prepared under HKAS 34 and HKEX Listing Rules, using the historical cost basis, with the going concern basis deemed appropriate despite net current liabilities - The financial statements are prepared in accordance with Hong Kong Accounting Standard 34 and Appendix D2 of the Hong Kong Stock Exchange Listing Rules, using the historical cost basis[16](index=16&type=chunk)[17](index=17&type=chunk) - As of June 30, 2025, the Group's **current liabilities exceeded its current assets by approximately HK$2,536,894 thousand**, but management considers the going concern basis appropriate based on profitability and secured loan facilities of approximately HK$1,151,739 thousand[18](index=18&type=chunk) [Accounting Policies](index=12&type=section&id=Accounting%20Policies) The accounting policies adopted are consistent with the 2024 annual financial statements, with the adoption of amendments to HKAS 21 having no significant impact on the Group - The accounting policies are consistent with the 2024 annual consolidated financial statements, and the adoption of amendments to HKAS 21 "Lack of Exchangeability" had no significant impact[19](index=19&type=chunk)[20](index=20&type=chunk) [Estimates](index=12&type=section&id=Estimates) The preparation of interim financial information involves management judgments and estimates, with the sources of uncertainty remaining consistent with the 2024 annual financial statements - The preparation of interim financial information involves management judgments, estimates, and assumptions, with the sources of significant estimation uncertainty remaining the same as in the 2024 annual consolidated financial statements[21](index=21&type=chunk) [Financial Risk Management and Financial Instruments](index=13&type=section&id=Financial%20Risk%20Management%20and%20Financial%20Instruments) The Group is exposed to market, credit, and liquidity risks, with no significant changes in risk management policies since year-end and no use of derivative financial instruments for hedging - The Group's operations are exposed to market risk (foreign exchange, cash flow, and fair value interest rate risk), credit risk, and liquidity risk, with no derivative financial instruments used for hedging during the period[22](index=22&type=chunk) - There have been **no significant changes** in risk management policies or the contractual undiscounted cash outflows of financial liabilities since the end of 2024[23](index=23&type=chunk)[24](index=24&type=chunk) - Fair value measurements are analyzed using a three-level hierarchy, with no transfers between levels during the period and no significant changes in business or economic conditions affecting fair values[24](index=24&type=chunk)[25](index=25&type=chunk) [Segment Information](index=14&type=section&id=Segment%20Information) The Group has created a new "Value-added Services" segment by combining sales of gas appliances, minor installation, maintenance, and insurance agency services to provide more relevant information - The Group has combined the sales of gas appliances, minor installation services, maintenance services, and insurance agency services into a new "Value-added Services" segment to provide more relevant and comparable financial information[27](index=27&type=chunk) Segment Revenue and Results for H1 2025 | Segment | Revenue (HK$ thousands) | % of Total | Segment Results (Gross Profit, HK$ thousands) | % of Total | | :--- | :--- | :--- | :--- | :--- | | Piped natural gas sales | 2,741,373 | 93.5% | 189,140 | 61.0% | | Engineering construction and natural gas pipeline installation services | 124,976 | 4.3% | 71,909 | 23.2% | | Natural gas pipeline transmission services | 27,099 | 0.9% | 23,603 | 7.6% | | Value-added services | 37,670 | 1.3% | 25,399 | 8.2% | | **Total** | **2,931,118** | **100%** | **310,051** | **100%** | Segment Revenue and Results for H1 2024 | Segment | Revenue (HK$ thousands) | % of Total | Segment Results (Gross Profit, HK$ thousands) | % of Total | | :--- | :--- | :--- | :--- | :--- | | Piped natural gas sales | 3,295,229 | 93.3% | 188,923 | 55.0% | | Engineering construction and natural gas pipeline installation services | 167,572 | 4.7% | 102,248 | 29.8% | | Natural gas pipeline transmission services | 32,391 | 0.9% | 28,436 | 8.3% | | Value-added services | 35,254 | 1.0% | 23,759 | 6.9% | | **Total** | **3,530,446** | **100%** | **343,366** | **100%** | [Other Income](index=17&type=section&id=Other%20Income) For the six months ended June 30, 2025, other income was HK$13,016 thousand, a 49.1% YoY decrease, primarily due to a significant reduction in government grants Details of Other Income | Item | June 30, 2025 (HK$ thousands) | June 30, 2024 (HK$ thousands) | Change | | :--- | :--- | :--- | :--- | | Government grants | 9,665 | 22,644 | -57.3% | | Maintenance and renovation service income | 2,924 | 2,638 | +10.8% | | Rental income | 427 | 286 | +49.3% | | **Total** | **13,016** | **25,568** | **-49.1%** | [Other Net Gains](index=17&type=section&id=Other%20Net%20Gains) For the six months ended June 30, 2025, other net gains surged to HK$64,072 thousand, a 1492.3% YoY increase, mainly driven by compensation for pipeline relocation and a shift from net exchange loss to gain Details of Other Net Gains | Item | June 30, 2025 (HK$ thousands) | June 30, 2024 (HK$ thousands) | Change | | :--- | :--- | :--- | :--- | | Net compensation income for relocation of natural gas pipelines | 54,538 | 19,031 | +186.6% | | Net exchange gain/(loss) | 11,444 | (23,696) | From loss to gain | | Net gain on disposal of subsidiaries | 487 | 2,853 | -82.9% | | **Total** | **64,072** | **4,024** | **+1492.3%** | [Cost of Sales and Services, Administrative Expenses and R&D Expenses](index=18&type=section&id=Cost%20of%20Sales%20and%20Services%2C%20Administrative%20Expenses%20and%20R%26D%20Expenses) For the six months ended June 30, 2025, total costs and expenses decreased by 17% YoY to HK$2,761,600 thousand, primarily due to a significant reduction in natural gas procurement costs Details of Cost of Sales and Services, Administrative Expenses and R&D Expenses | Item | June 30, 2025 (HK$ thousands) | June 30, 2024 (HK$ thousands) | Change | | :--- | :--- | :--- | :--- | | Natural gas procurement costs | 2,385,024 | 2,942,825 | -19.0% | | Employee benefit expenses | 139,370 | 121,200 | +15.0% | | Depreciation | 104,347 | 103,993 | +0.3% | | Total cost of sales and services, administrative expenses and R&D expenses | 2,761,600 | 3,326,189 | -17.0% | [Finance Income and Costs](index=18&type=section&id=Finance%20Income%20and%20Costs) For the six months ended June 30, 2025, net finance costs decreased significantly by 26.9% YoY to HK$43,419 thousand, driven by lower interest expenses and increased capitalization Details of Finance Income and Costs | Item | June 30, 2025 (HK$ thousands) | June 30, 2024 (HK$ thousands) | Change | | :--- | :--- | :--- | :--- | | Interest income on bank deposits | 2,071 | 15,179 | -86.4% | | Interest expense | (83,544) | (110,409) | -24.4% | | Less: Amount capitalized in construction in progress | 38,054 | 35,780 | +6.3% | | **Net finance costs** | **(43,419)** | **(59,450)** | **-26.9%** | [Income Tax Expense](index=19&type=section&id=Income%20Tax%20Expense) For the six months ended June 30, 2025, income tax expense rose by 39% YoY to HK$45,279 thousand, mainly due to an increase in current income tax Details of Income Tax Expense | Item | June 30, 2025 (HK$ thousands) | June 30, 2024 (HK$ thousands) | Change | | :--- | :--- | :--- | :--- | | Current income tax | 45,524 | 30,980 | +46.9% | | Deferred income tax expense | (245) | 1,616 | From expense to credit | | **Total** | **45,279** | **32,596** | **+39.0%** | - The Group is subject to a two-tiered profits tax rate, with high-tech enterprises like Tianjin Clean Energy enjoying a preferential rate of **15%**[35](index=35&type=chunk) - Binhai HK obtained a Certificate of Resident Status in 2022, allowing it to apply a reduced dividend withholding tax rate[35](index=35&type=chunk) [Dividends](index=20&type=section&id=Dividends) The Board proposed a final dividend of HK$0.076 per ordinary share for 2024, totaling approximately HK$104,428 thousand, which was approved and paid, with no interim dividend declared for the current period - The 2024 final dividend of **HK$0.076 per ordinary share**, totaling approximately HK$104,428 thousand, was approved on May 9, 2025, and paid on June 10, 2025[37](index=37&type=chunk) - The Board has decided **not to declare an interim dividend** for the six months ended June 30, 2025[38](index=38&type=chunk) [Earnings Per Share](index=20&type=section&id=Earnings%20Per%20Share) For the six months ended June 30, 2025, both basic and diluted earnings per share were 12.54 HK cents, showing a slight increase compared to the same period last year Earnings Per Share Data | Indicator | June 30, 2025 (HK cents) | June 30, 2024 (HK cents) | Change | | :--- | :--- | :--- | :--- | | Basic earnings per share | 12.54 | 12.41 | +1.0% | | Diluted earnings per share | 12.54 | 12.41 | +1.0% | [Property, Plant and Equipment](index=21&type=section&id=Property%2C%20Plant%20and%20Equipment) As of June 30, 2025, the net book value of property, plant, and equipment increased to HK$6,304,670 thousand, mainly driven by additions and positive exchange differences Changes in Property, Plant and Equipment | Item | June 30, 2025 (HK$ thousands) | June 30, 2024 (HK$ thousands) | Change | | :--- | :--- | :--- | :--- | | Net book value at beginning of period | 5,985,500 | 6,007,569 | -0.4% | | Additions | 224,477 | 163,149 | +37.6% | | Depreciation expense | (95,745) | (95,578) | +0.2% | | Exchange differences | 193,198 | (123,319) | From negative to positive | | Net book value at end of period | 6,304,670 | 5,951,540 | +5.9% | [Accounts Receivable and Other Receivables](index=21&type=section&id=Accounts%20Receivable%20and%20Other%20Receivables) As of June 30, 2025, total accounts receivable and other receivables increased to HK$351,028 thousand, with the Group offering credit periods of 90 to 180 days Total Accounts Receivable and Other Receivables | Indicator | June 30, 2025 (HK$ thousands) | December 31, 2024 (HK$ thousands) | Change | | :--- | :--- | :--- | :--- | | Total accounts receivable and other receivables | 351,028 | 304,602 | +15.2% | - The Group offers a **90-day credit period** to piped natural gas and transmission service customers, and a **180-day credit period** to engineering and installation service customers[44](index=44&type=chunk) Aging Analysis of Accounts Receivable | Aging | June 30, 2025 (HK$ thousands) | December 31, 2024 (HK$ thousands) | | :--- | :--- | :--- | | 0-90 days | 88,075 | 65,725 | | 91-180 days | 5,249 | 20,059 | | 181-365 days | 35,033 | 27,778 | | Over 365 days | 201,738 | 196,293 | | **Total** | **330,095** | **309,855** | [Share Capital](index=22&type=section&id=Share%20Capital) As of June 30, 2025, the company's total share capital decreased to HK$258,292 thousand, primarily due to the redemption of some redeemable preference shares Share Capital Composition | Item | June 30, 2025 (HK$ thousands) | December 31, 2024 (HK$ thousands) | Change | | :--- | :--- | :--- | :--- | | Ordinary shares (issued and fully paid) | 138,325 | 138,325 | 0% | | Redeemable preference shares (authorized, issued and fully paid) | 119,967 | 144,000 | -16.7% | | **Total** | **258,292** | **282,325** | **-8.5%** | [Accounts Payable and Other Payables](index=23&type=section&id=Accounts%20Payable%20and%20Other%20Payables) As of June 30, 2025, total accounts payable and other payables amounted to HK$1,226,107 thousand, a slight increase from the end of 2024 Total Accounts Payable and Other Payables | Indicator | June 30, 2025 (HK$ thousands) | December 31, 2024 (HK$ thousands) | Change | | :--- | :--- | :--- | :--- | | Accounts payable and other payables | 1,226,107 | 1,204,412 | +1.8% | Aging Analysis of Accounts Payable | Aging | June 30, 2025 (HK$ thousands) | December 31, 2024 (HK$ thousands) | | :--- | :--- | :--- | | 0-90 days | 113,751 | 174,303 | | 91-180 days | 64,790 | 51,766 | | 181-365 days | 124,697 | 101,772 | | Over 365 days | 358,255 | 319,469 | | **Total** | **661,493** | **647,310** | [Borrowings](index=24&type=section&id=Borrowings) As of June 30, 2025, total borrowings increased to HK$3,706,434 thousand, with a significant rise in current borrowings increasing short-term repayment pressure Total Borrowings and Composition | Indicator | June 30, 2025 (HK$ thousands) | December 31, 2024 (HK$ thousands) | Change | | :--- | :--- | :--- | :--- | | Total non-current borrowings | 1,849,470 | 2,258,172 | -18.1% | | Total current borrowings | 1,856,964 | 1,071,352 | +73.3% | | **Total Borrowings** | **3,706,434** | **3,329,524** | **+11.3%** | - In April 2025, the company fully repaid the **RMB tranche of its syndicated loan**, approximately HK$238 million, with the remaining USD tranche due in June 2026[49](index=49&type=chunk) - Secured bank borrowings are guaranteed by the charging rights of certain subsidiaries and certain accounts receivable, while other borrowings are secured by the equity of a subsidiary and natural gas pipeline assets with a net book value of approximately **HK$348 million**[51](index=51&type=chunk) [Deferred Income](index=27&type=section&id=Deferred%20Income) As of June 30, 2025, total deferred income was HK$142,627 thousand, comprising government grants and construction project subsidies to be recognized over the assets' useful lives Details of Deferred Income | Item | June 30, 2025 (HK$ thousands) | December 31, 2024 (HK$ thousands) | Change | | :--- | :--- | :--- | :--- | | Government grants | 52,260 | 57,433 | -9.0% | | Construction project subsidies | 90,367 | 87,832 | +2.9% | | **Total** | **142,627** | **145,265** | **-1.8%** | - Government grants and construction project subsidies will be credited to profit or loss on a straight-line basis over the **30-year estimated useful life** of the related gas pipeline assets[52](index=52&type=chunk) [Deferred Income Tax](index=28&type=section&id=Deferred%20Income%20Tax) As of June 30, 2025, the net deferred tax asset was HK$26,617 thousand and the net deferred tax liability was HK$7,047 thousand, arising from various temporary differences Deferred Tax Assets and Liabilities | Indicator | June 30, 2025 (HK$ thousands) | December 31, 2024 (HK$ thousands) | Change | | :--- | :--- | :--- | :--- | | Deferred tax assets | 51,905 | 53,375 | -2.8% | | Set-off against deferred tax liabilities | (25,288) | (22,602) | +11.9% | | **Net deferred tax assets** | **26,617** | **30,773** | **-13.5%** | | Deferred tax liabilities | 32,335 | 34,866 | -7.3% | | Set-off against deferred tax assets | (25,288) | (22,602) | +11.9% | | **Net deferred tax liabilities** | **7,047** | **12,264** | **-42.6%** | [Commitments](index=30&type=section&id=Commitments) As of June 30, 2025, the Group had capital commitments that were contracted but not provided for - As of June 30, 2025, the Group had **capital commitments** that were contracted but not provided for[55](index=55&type=chunk) [Related Party Transactions](index=30&type=section&id=Related%20Party%20Transactions) The Group engaged in numerous transactions with entities controlled by its major shareholders, TEDA and Sinopec, and other related parties in the ordinary course of business - The Company's largest ultimate shareholder is **TEDA (42.18% holding)**, and the second-largest is **Sinopec (29.52% holding)**[57](index=57&type=chunk) Transactions with Related Parties (H1 2025) | Transaction Type | June 30, 2025 (HK$ thousands) | June 30, 2024 (HK$ thousands) | Change | | :--- | :--- | :--- | :--- | | Piped natural gas sales | 196,975 | 197,629 | -0.3% | | Engineering construction and natural gas pipeline installation services | 2,554 | 2,783 | -8.3% | | Natural gas procurement | 460,532 | 990,910 | -53.5% | | Purchase of gasoline and others | 10,593 | 787 | +1245.9% | | Interest expense (paid to Sinopec-controlled entities) | 6,424 | 6,510 | -1.3% | | Other service fees | 7,900 | 8,029 | -1.6% | Balances with Related Parties (as of June 30, 2025) | Balance Type | June 30, 2025 (HK$ thousands) | December 31, 2024 (HK$ thousands) | Change | | :--- | :--- | :--- | :--- | | Accounts receivable and other receivables | 11,603 | 11,566 | +0.3% | | Prepayments | 24,404 | 47,224 | -48.3% | | Accounts payable and other payables | 11,054 | 8,201 | +34.8% | | Contract liabilities | 10,652 | 16,412 | -35.1% | | Borrowings (from Sinopec-controlled entities) | 328,740 | 319,354 | +2.9% | - The Group conducts various transactions with other state-controlled entities in China on terms comparable to those with non-state-controlled entities[71](index=71&type=chunk)[72](index=72&type=chunk)[74](index=74&type=chunk) Key Management Personnel Remuneration | Item | June 30, 2025 (HK$ thousands) | June 30, 2024 (HK$ thousands) | Change | | :--- | :--- | :--- | :--- | | Fees | 1,328 | 1,275 | +4.2% | | Remuneration, share options and other allowances | 1,798 | 2,460 | -26.9% | | Retirement benefits | 130 | 124 | +4.8% | Business Review [Piped Natural Gas Sales](index=36&type=section&id=Piped%20Natural%20Gas%20Sales) Affected by a warm winter and slow economic recovery, the Group's total gas sales volume fell 14% to 1.14 billion cubic meters, leading to a 17% YoY revenue decline - In H1 2025, China's apparent natural gas consumption decreased by 0.9% YoY, while the Group's **total gas sales volume fell by 14%** to 1.14 billion cubic meters[76](index=76&type=chunk) Piped Natural Gas Sales Revenue | Indicator | H1 2025 (HK$ thousands) | H1 2024 (HK$ thousands) | Change | | :--- | :--- | :--- | :--- | | Piped natural gas sales revenue | 2,741,373 | 3,295,229 | -17% | [Engineering Construction and Natural Gas Pipeline Installation Services](index=36&type=section&id=Engineering%20Construction%20and%20Natural%20Gas%20Pipeline%20Installation%20Services) Revenue from engineering and installation services decreased by 25% YoY to HK$124,976 thousand due to the slow recovery of China's real estate market - Impacted by the slow recovery of China's real estate market, revenue from engineering construction and natural gas pipeline installation services **decreased by 25% YoY** to HK$124,976 thousand[77](index=77&type=chunk) - The Group's total user base grew by 1% to **2.47 million households**, and the urban medium-pressure gas pipeline network expanded by 38 km to approximately 4,014 km[77](index=77&type=chunk) [Natural Gas Pipeline Transmission Services](index=37&type=section&id=Natural%20Gas%20Pipeline%20Transmission%20Services) For the six months ended June 30, 2025, the Group's gas transmission volume was approximately 311,520,000 cubic meters, with revenue declining 16% YoY to HK$27,099 thousand Natural Gas Pipeline Transmission Services Revenue | Indicator | H1 2025 (HK$ thousands) | H1 2024 (HK$ thousands) | Change | | :--- | :--- | :--- | :--- | | Natural gas pipeline transmission services revenue | 27,099 | 32,391 | -16% | - Natural gas, as a clean and efficient energy source, plays a key role in addressing environmental pollution and transitioning to sustainable energy systems, aligning with China's green energy initiatives[78](index=78&type=chunk) [Value-added Services](index=37&type=section&id=Value-added%20Services) Revenue from value-added services grew by 7% YoY to HK$37,670 thousand, driven by strong growth in sales of gas appliances, maintenance, and insurance agency services Breakdown of Value-added Services Revenue | Item | H1 2025 (HK$ thousands) | H1 2024 (HK$ thousands) | Change | | :--- | :--- | :--- | :--- | | Total value-added services revenue | 37,670 | 35,254 | +7% | | Gas appliance sales revenue | 9,931 | 7,167 | +39% | | Minor installation services revenue | 18,464 | 20,652 | -11% | | Maintenance services revenue | 4,177 | 3,195 | +31% | | Insurance agency services revenue | 5,098 | 4,240 | +20% | [Real Estate Business](index=37&type=section&id=Real%20Estate%20Business) The Group holds a commercial land plot in Tianjin Airport Economic Area and plans to sell the property under construction to focus on its core gas business - The Group holds a commercial land plot of approximately **15,899.6 square meters** in the Tianjin Airport Economic Area with a 40-year land use right from December 31, 2009[80](index=80&type=chunk) - In line with its strategic focus on the gas business, management plans to **sell the property under construction** and has engaged agents and potential buyers[80](index=80&type=chunk) Outlook [Market Environment and Trends](index=38&type=section&id=Market%20Environment%20and%20Trends) China's natural gas market was weak in H1 2025, but the Group's Q2 sales volume grew 13% YoY, and supportive government policies are expected to aid margin recovery for city gas enterprises - In H1 2025, China's natural gas market was weak, with apparent consumption **decreasing by 0.9% YoY**[81](index=81&type=chunk) - The Group's total gas sales volume fell 14% in H1, but **rose 13% YoY in Q2**, indicating strong underlying growth potential despite the impact of a warm winter[81](index=81&type=chunk) - China's real estate market is recovering slowly, but key indicators are stabilizing, suggesting a return to optimism is expected[82](index=82&type=chunk) - Government initiatives promoting cost pass-through mechanisms for residential gas will help city gas enterprises **recover gross margins** and optimize pricing linkage[82](index=82&type=chunk) [Business Development Strategy](index=39&type=section&id=Business%20Development%20Strategy) The Group will pursue a diversified gas sourcing strategy, deepen partnerships with suppliers, and accelerate the development of value-added services to create a new profit growth engine - The Group will adhere to a **diversified gas sourcing strategy**, strengthening cooperation with major upstream suppliers to ensure supply security and stability[83](index=83&type=chunk) - Value-added services have become a core business, with revenue and gross profit **up 7% YoY** in H1, driven by a 39% increase in "Tai Yue Jia" gas appliance sales revenue[84](index=84&type=chunk) - The Group is expanding its value-added services by enriching product categories, launching kitchen renovation services, and planning to complete an e-commerce platform in H2[84](index=84&type=chunk) - A government notice promoting home and kitchen appliance "renewal" is expected to **boost the growth of value-added services**[84](index=84&type=chunk) [Financing Strategy](index=39&type=section&id=Financing%20Strategy) Through diversified financing channels and structural optimization, the Group reduced its comprehensive financing rate to 4.67% in H1 2025, resulting in a HK$26.87 million YoY decrease in interest expenses - The Group effectively controlled loan interest rates and reduced overall financing costs through diversified financing channels and structural optimization[85](index=85&type=chunk) Comprehensive Financing Rate and Interest Expense | Indicator | H1 2025 | End of 2024 | | :--- | :--- | :--- | | Comprehensive financing rate | 4.67% | 5.29% (estimated) | | YoY decrease in interest expense | HK$26.87 million | - | [H2 Outlook](index=40&type=section&id=H2%20Outlook) The Group will focus on stable growth in its city gas business, accelerate value-added services, and advance integrated energy projects to transform into an integrated energy service provider - In H2, China's natural gas market may face growing domestic supply while LNG imports are constrained by high international prices and weak demand[86](index=86&type=chunk) - The Group will ensure stable growth in its city gas business, accelerate the development of value-added services, and expedite the implementation of integrated energy demonstration projects to transform into an **integrated energy service provider**[86](index=86&type=chunk) - The company is confident in achieving **stable and restorative profit growth** in 2025, creating sustainable returns for shareholders[86](index=86&type=chunk) Financial Review [Gross Profit Margin](index=40&type=section&id=Gross%20Profit%20Margin) In H1 2025, the consolidated gross profit margin was 10.6%, an increase from 9.7% in the prior year period, primarily due to improved margins from piped natural gas sales Consolidated Gross Profit and Gross Profit Margin | Indicator | H1 2025 (HK$ thousands) | H1 2024 (HK$ thousands) | Change | | :--- | :--- | :--- | :--- | | Consolidated Gross Profit | 310,051 | 343,366 | -10% | | Consolidated Gross Profit Margin | 10.6% | 9.7% | +0.9 p.p. | - The increase in consolidated gross profit margin was mainly due to the **improved gross profit margin of piped natural gas sales**[87](index=87&type=chunk) [Administrative Expenses](index=40&type=section&id=Administrative%20Expenses) Administrative expenses for H1 2025 were approximately HK$90 million, an increase of about HK$8 million or 10% compared to the same period last year Administrative Expenses | Indicator | H1 2025 (HK$ thousands) | H1 2024 (HK$ thousands) | Change | | :--- | :--- | :--- | :--- | | Administrative Expenses | 90,086 | 81,603 | +10% | [Profit Attributable to Owners of the Company](index=40&type=section&id=Profit%20Attributable%20to%20Owners%20of%20the%20Company) For H1 2025, profit attributable to owners of the Company was approximately HK$173 million, a 3% YoY increase, mainly due to higher other income and lower finance costs Profit Attributable to Owners of the Company | Indicator | H1 2025 (HK$ thousands) | H1 2024 (HK$ thousands) | Change | | :--- | :--- | :--- | :--- | | Profit Attributable to Owners of the Company | 172,815 | 167,924 | +3% | - The increase in profit was primarily due to **higher other income and reduced finance costs**[89](index=89&type=chunk) [Basic Earnings Per Share](index=40&type=section&id=Basic%20Earnings%20Per%20Share) Basic earnings per share for H1 2025 was 12.54 HK cents, an increase of 0.13 HK cents compared to the same period last year Basic Earnings Per Share | Indicator | H1 2025 (HK cents) | H1 2024 (HK cents) | Change | | :--- | :--- | :--- | :--- | | Basic Earnings Per Share | 12.54 | 12.41 | +0.13 cents | [Capital Liquidity and Financial Resources](index=40&type=section&id=Capital%20Liquidity%20and%20Financial%20Resources) The Group is financed through operating cash flows and borrowings, with total borrowings increasing to HK$3,706,434 thousand, a current ratio of 0.29, and a gearing ratio of 58% - The Group finances its capital liquidity needs primarily through cash flows from operating activities and interest-bearing bank loans and other borrowings[91](index=91&type=chunk) Capital Liquidity Indicators | Indicator | June 30, 2025 (HK$ thousands) | December 31, 2024 (HK$ thousands) | Change | | :--- | :--- | :--- | :--- | | Total borrowings | 3,706,434 | 3,329,524 | +11.3% | | Cash and bank deposits | 391,851 | 415,125 | -5.6% | | Current assets | 1,056,238 | 1,121,309 | -5.8% | | Current ratio | 0.29 | 0.37 (estimated) | -0.08 | | Gearing ratio | 58% | 56% | +2 p.p. | - The company is reviewing existing loans due in 2025 and plans to negotiate with potential financiers for refinancing at more competitive rates[92](index=92&type=chunk) [Borrowing Structure](index=41&type=section&id=Borrowing%20Structure) As of June 30, 2025, total borrowings were HK$3,706,434 thousand, with 82% denominated in RMB, 75% at floating rates, and short-term borrowings totaling HK$1,856,964 thousand - As of June 30, 2025, total borrowings were HK$3,706,434 thousand, with **18% denominated in USD and 82% in RMB**[93](index=93&type=chunk) - **25% of borrowings are at fixed interest rates** and 75% are at floating rates, with short-term borrowings and the current portion of long-term borrowings totaling HK$1,856,964 thousand[93](index=93&type=chunk) [Directors' Opinion on Adequacy of Working Capital](index=41&type=section&id=Directors'%20Opinion%20on%20Adequacy%20of%20Working%20Capital) Despite net current liabilities of approximately HK$2,536,894 thousand, the Board believes the Group will have sufficient working capital to meet its financial obligations for the next twelve months - Although current liabilities exceeded current assets by approximately HK$2,536,894 thousand as of June 30, 2025, the Board is of the opinion that the Group will have **sufficient working capital** to meet its financial obligations for the next twelve months[94](index=94&type=chunk) [Risks Arising from Exchange Rate Fluctuations](index=42&type=section&id=Risks%20Arising%20from%20Exchange%20Rate%20Fluctuations) The Group faces foreign exchange risk from its HKD and USD denominated deposits and borrowings, recording a net exchange gain of approximately HK$11 million in H1 2025, and currently has no hedging policy - The Group is exposed to foreign exchange risk as some deposits and bank borrowings are denominated in HKD and USD, resulting in a **net exchange gain of approximately HK$11 million** from financing activities in H1 2025[95](index=95&type=chunk) - The Group currently **does not have a foreign currency hedging policy** but management monitors the risk and will consider hedging if necessary[95](index=95&type=chunk) [Treasury Policy](index=42&type=section&id=Treasury%20Policy) For the six months ended June 30, 2025, the Group adopted a prudent financial management approach, focusing on careful capital and cash flow management to maintain a strong liquidity position - The Group adopts a prudent financial management approach, focusing on careful capital and cash flow management to maintain a **strong capital liquidity position**[96](index=96&type=chunk) [Pledge of Group's Assets](index=42&type=section&id=Pledge%20of%20Group's%20Assets) As of June 30, 2025, a 50% equity interest in Tianjin Clean Energy and pipeline network assets with a net book value of approximately HK$347,729 thousand were pledged as security for borrowings - As of June 30, 2025, a **50% equity interest** in Tianjin Clean Energy, valued at approximately HK$658,353 thousand, was pledged as security for other borrowings[97](index=97&type=chunk) - Pipeline network and equipment with a net book value of approximately **HK$347,729 thousand** were also pledged as collateral for other borrowings[97](index=97&type=chunk) Other Information [Dividend Policy](index=42&type=section&id=Dividend%20Policy) The Board approved and paid the final dividend for 2024 but did not declare an interim dividend for the first half of 2025 [Final Dividend](index=42&type=section&id=Final%20Dividend) The Board proposed a final dividend of HK$0.076 per ordinary share for 2024, totaling approximately HK$104,428 thousand, which was approved on May 9, 2025, and paid on June 10, 2025 - The 2024 final dividend of **HK$0.076 per ordinary share**, totaling approximately HK$104,428 thousand, was approved on May 9, 2025, and paid on June 10, 2025[98](index=98&type=chunk) [Interim Dividend](index=42&type=section&id=Interim%20Dividend) The Board of Directors did not declare an interim dividend for the first half of 2025 - The Board of Directors **did not declare** the payment of an interim dividend for the first half of 2025[99](index=99&type=chunk) [Contingent Liabilities](index=43&type=section&id=Contingent%20Liabilities) As of June 30, 2025, the Group had no significant contingent liabilities - As of June 30, 2025, the Group had **no significant contingent liabilities**[100](index=100&type=chunk) [Significant Investments](index=43&type=section&id=Significant%20Investments) For the six months ended June 30, 2025, the Company did not hold any significant investments - For the six months ended June 30, 2025, the Company **did not hold any significant investments**[101](index=101&type=chunk) [Significant Acquisitions and Disposals of Subsidiaries and Associates](index=43&type=section&id=Significant%20Acquisitions%20and%20Disposals%20of%20Subsidiaries%20and%20Associates) For the six months ended June 30, 2025, the Group did not conduct any significant acquisitions or disposals of subsidiaries and associates - For the six months ended June 30, 2025, the Group **did not conduct any significant acquisitions or disposals** of subsidiaries and associates[102](index=102&type=chunk) [Significant Events After the End of the Financial Period](index=43&type=section&id=Significant%20Events%20After%20the%20End%20of%20the%20Financial%20Period) As of the date of this results announcement, no significant events affecting the Group have occurred since the end of the financial period - As of the date of this results announcement, **no significant events** affecting the Group have occurred since the end of the financial period[103](index=103&type=chunk) [Future Plans for Significant Investments and Capital Assets](index=43&type=section&id=Future%20Plans%20for%20Significant%20Investments%20and%20Capital%20Assets) The Group currently has no future plans for significant investments or capital assets - The Group currently has **no future plans** for significant investments or capital assets[104](index=104&type=chunk) [Employees and Remuneration Policy](index=43&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the Group had 1,740 employees and is committed to providing competitive remuneration, a safe work environment, and training opportunities [Number of Employees](index=43&type=section&id=Number%20of%20Employees) As of June 30, 2025, the Group had a total of 1,740 employees, a slight decrease from the end of 2024 Number of Employees and Salaries | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Number of employees | 1,740 | 1,746 | | Salaries and wages (H1) | HK$139 million | HK$121 million (H1 2024) | [Remuneration Policy](index=43&type=section&id=Remuneration%20Policy) The Group offers competitive remuneration packages based on market rates and employee performance, along with discretionary bonuses, training opportunities, and comprehensive benefits - The Group provides **competitive remuneration packages** determined by market rates, employee performance, qualifications, and experience, with discretionary bonuses[107](index=107&type=chunk) - The Group offers training opportunities and benefits including pension, unemployment, work-related injury, medical, and maternity insurance, as well as a housing provident fund[107](index=107&type=chunk) - The Company adopted a **share option scheme** on January 13, 2021, as an incentive and reward for directors, senior management, and eligible employees[107](index=107&type=chunk) [Corporate Governance](index=44&type=section&id=Corporate%20Governance) The Group has an Audit Committee and complies with the code of conduct for directors' securities transactions and the Corporate Governance Code [Audit Committee](index=44&type=section&id=Audit%20Committee) The Audit Committee, comprising four independent non-executive directors, has reviewed the Group's unaudited interim consolidated results - The Audit Committee consists of four independent non-executive directors, with the chairman Mr. Lau Siu Ki and Dr. Tang Lai Wah being qualified accountants[108](index=108&type=chunk) - The Audit Committee has **reviewed the Group's unaudited consolidated results** for the period and provided advice and comments on the interim report[108](index=108&type=chunk) [Code of Conduct for Directors' Securities Transactions](index=44&type=section&id=Code%20of%20Conduct%20for%20Directors'%20Securities%20Transactions) The Company has adopted a code of conduct for directors' securities transactions that is no less exacting than the Model Code in the Listing Rules, and all directors have confirmed compliance - The Company has adopted a code of conduct for directors' securities transactions with terms no less exacting than the Model Code in Appendix C3 of the Listing Rules, and all directors have confirmed compliance during the period[109](index=109&type=chunk) [Corporate Governance Code](index=44&type=section&id=Corporate%20Governance%20Code) The Company has complied with the applicable code provisions of the Corporate Governance Code in Appendix C1 of the Listing Rules throughout the period - The Company has **complied with the applicable code provisions** of the Corporate Governance Code in Appendix C1 of the Listing Rules throughout the period[110](index=110&type=chunk) [Purchase, Sale and Redemption of Listed Securities](index=45&type=section&id=Purchase%2C%20Sale%20and%20Redemption%20of%20Listed%20Securities) During the period, the Company repurchased 3,138,000 ordinary shares for approximately HK$3,417,520 and resolved to redeem 480,650 redeemable preference shares for HK$24,032,500 Details of Share Repurchases in H1 2025 | Month of Purchase | Number of Shares Repurchased (thousands) | Total Consideration Paid (HK$) | | :--- | :--- | :--- | | January | 816 | 918,080 | | March | 1,060 | 1,155,020 | | April | 806 | 875,820 | | May | 256 | 262,620 | | June | 200 | 205,980 | | **Total** | **3,138** | **3,417,520** | - The share repurchases were intended to **increase the net asset value per share and/or earnings per share** of the Company, and the repurchased shares are held as treasury shares[111](index=111&type=chunk) - The Board resolved to redeem **480,650 redeemable preference shares** from TEDA HK at HK$50 per share, for a total of HK$24,032,500, with the redemption amount yet to be paid[111](index=111&type=chunk) [Board of Directors](index=46&type=section&id=Board%20of%20Directors) As of the announcement date, the Board of Directors comprises three executive directors, three non-executive directors, and four independent non-executive directors - As of the announcement date, the Board consists of three executive directors (Zhang Wang, Wang Xin, Gao Liang), three non-executive directors (Zhang Changliang, Shen Hongliang, Xia Binhui), and four independent non-executive directors (Ip Shing Hing, Lau Siu Ki, Lo Man Yue, Tang Lai Wah)[113](index=113&type=chunk)

Interim Results Summary [Condensed Financial Highlights](index=1&type=section&id=Condensed%20Financial%20Highlights) This section provides a high-level overview of the company's unaudited financial performance for the six months ended June 30, 2025, showing decreased revenue and a slight increase in loss attributable to shareholders Condensed Financial Highlights | Indicator | 2025 (Thousand HKD) | 2024 (Thousand HKD) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 34,606 | 42,118 | -17.8 | | Loss attributable to shareholders | (6,064) | (5,999) | -1.08 | | Loss per share - Basic (HK cents) | (1.13) | (1.12) | -0.89 | Condensed Consolidated Financial Information [Condensed Consolidated Statement of Profit or Loss](index=2&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) This statement details the company's revenue, costs, and expenses for the six months ended June 30, 2025, resulting in a loss of **HKD 6,064 thousand** for the period Condensed Consolidated Statement of Profit or Loss | Indicator | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | Revenue | 34,606 | 42,118 | | Cost of sales | (34,137) | (36,756) | | Gross profit | 469 | 5,362 | | Other income and losses, net | 1,721 | 534 | | Selling and distribution expenses | (333) | (446) | | Administrative expenses | (9,872) | (10,533) | | Impairment of property, plant and equipment | (1,089) | (396) | | Other operating income/(expenses), net | 3,036 | (417) | | Finance costs | (209) | (295) | | Loss before tax | (6,277) | (6,191) | | Income tax credit | 213 | 192 | | Loss for the period | (6,064) | (5,999) | | Basic loss per share (HK cents) | (1.13) | (1.12) | [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=3&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) This statement presents the total comprehensive expense for the period, including the loss for the period and other comprehensive income/expenses like revaluation surplus on buildings Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income | Indicator | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | Loss for the period | (6,064) | (5,999) | | Revaluation surplus on buildings (net of tax) | 681 | 807 | | Exchange differences on translating foreign operations | 386 | (423) | | Other comprehensive income for the period, net of tax | 1,067 | 384 | | Total comprehensive expense for the period | (4,997) | (5,615) | [Condensed Consolidated Statement of Financial Position](index=4&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) This statement provides a snapshot of the company's assets, liabilities, and equity as of June 30, 2025, showing decreased net assets and increased net current liabilities Condensed Consolidated Statement of Financial Position | Indicator | June 30, 2025 (Thousand HKD) | December 31, 2024 (Thousand HKD) | | :--- | :--- | :--- | | **Non-current assets** | | | | Property, plant and equipment | 37,019 | 37,277 | | Right-of-use assets | 10,285 | 10,274 | | **Current assets** | | | | Inventories | 18,686 | 24,048 | | Trade and other receivables, prepayments and deposits | 21,234 | 20,839 | | Pledged bank balances | 3,469 | 1,297 | | Cash and bank balances | 3,043 | 3,419 | | **Current liabilities** | | | | Trade and other payables | 34,926 | 36,759 | | Other payables, accrued charges and provisions | 30,329 | 27,061 | | Interest-bearing bank loans | 8,773 | 8,639 | | Amount due to a PRC joint venture partner | 1,131 | 1,131 | | **Net assets** | 14,064 | 19,061 | | **Total equity** | 14,064 | 19,061 | - As of June 30, 2025, the Group's net current liabilities were approximately **HKD 28,727,000**, an increase from **HKD 23,987,000** as of December 31, 2024[7](index=7&type=chunk)[10](index=10&type=chunk) Notes to the Financial Statements [Basis of Preparation and Going Concern](index=5&type=section&id=Basis%20of%20Preparation%20and%20Going%20Concern) This section explains the accounting standards for interim financial information, outlines significant going concern uncertainties, and details management's mitigation measures [Basis of Preparation](index=5&type=section&id=Basis%20of%20Preparation) This subsection outlines the accounting standards and policies adopted for the preparation of the interim condensed consolidated financial information - The interim condensed consolidated financial information is prepared in accordance with **Hong Kong Accounting Standard 34 'Interim Financial Reporting'** issued by the Hong Kong Institute of Certified Public Accountants and the applicable disclosure requirements of the **Hong Kong Stock Exchange Listing Rules**[8](index=8&type=chunk) - The accounting policies and basis of preparation adopted are consistent with those used for the annual consolidated financial statements for the year ended December 31, 2024[8](index=8&type=chunk) [Going Concern](index=5&type=section&id=Going%20Concern) This subsection addresses the Group's going concern status, highlighting financial uncertainties and the management's strategies to ensure continued operations - For the six months ended June 30, 2025, the Group incurred a loss of approximately **HKD 6,064,000** and had net current liabilities of approximately **HKD 28,727,000** as of June 30, 2025, indicating significant uncertainties[10](index=10&type=chunk) - Mitigation measures include renewing a secured bank financing facility of **RMB 35,000,000** with Nanjing Bank until April 2027 and securing a bank loan of **RMB 8,000,000** with China Everbright Bank until July 2026[11](index=11&type=chunk) - The Directors concluded that the Group will have sufficient working capital to fund its operations and meet its financial obligations in the foreseeable future, thus deeming the preparation of consolidated financial statements on a going concern basis appropriate[12](index=12&type=chunk) [Segment Information and Revenue Analysis](index=6&type=section&id=Segment%20Information%20and%20Revenue%20Analysis) This section clarifies the absence of separate operating segment information due to business concentration in Mainland China and details revenue analysis by product type [Segment Information](index=6&type=section&id=Segment%20Information) This subsection explains the Group's single operating segment, primarily focused on leather processing and sales in Mainland China - Single operating segment: Over **90%** of the Group's revenue, results, and assets are related to the processing and sale of semi-finished and finished leather products and subcontracted leather processing in China, hence no separate segment information analysis is presented[13](index=13&type=chunk) - Major customers: For the six months ended June 30, 2025, revenue from customers A, B, and C each accounted for over **10%** of the Group's consolidated revenue[14](index=14&type=chunk) [Revenue](index=6&type=section&id=Revenue) This subsection provides a detailed breakdown of the Group's revenue by product type and outlines the revenue recognition policy Revenue by Source | Revenue Source | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | Sale of processed leather | 13,435 | 28,606 | | Subcontracted leather processing | 21,171 | 13,512 | | **Total Revenue** | **34,606** | **42,118** | - Revenue recognition: Revenue is recognized when goods are transferred to customers[14](index=14&type=chunk) [Other Income and Expenses](index=7&type=section&id=Other%20Income%20and%20Expenses) This section details other income and losses, other operating income/expenses, and finance costs, which collectively impact the Group's profitability [Other Income and Losses, Net](index=7&type=section&id=Other%20Income%20and%20Losses%2C%20Net) This subsection presents a breakdown of the Group's other income and losses, including financial income, scrap sales, and gains from asset disposals Other Income and Losses, Net | Indicator | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | Financial income | 8 | 6 | | Sale of scrap in Mainland China | 1,023 | 900 | | Government grants | 1 | - | | Gain on disposal of property, plant and equipment | 527 | 124 | | Net exchange loss | (11) | (69) | | Others | 173 | (427) | | **Total** | **1,721** | **534** | [Other Operating Income/(Expenses), Net](index=7&type=section&id=Other%20Operating%20Income%2F%28Expenses%29%2C%20Net) This subsection details the Group's other operating income and expenses, primarily driven by impairment reversals and provisions Other Operating Income/(Expenses), Net | Indicator | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | Reversal of impairment/(impairment) of receivables | 1,738 | (417) | | Reversal of accrued charges and payables | 1,298 | - | | **Total** | **3,036** | **(417)** | [Finance Costs](index=7&type=section&id=Finance%20Costs) This subsection outlines the Group's finance costs, primarily consisting of interest on bank loans and lease liabilities Finance Costs | Indicator | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | Bank loans and bills receivable discounted with banks | 207 | 292 | | Lease liabilities | 2 | 3 | | **Total** | **209** | **295** | [Loss Before Tax and Income Tax](index=8&type=section&id=Loss%20Before%20Tax%20and%20Income%20Tax) This section details the components contributing to the Group's loss before tax and the income tax credit recognized for the period [Loss Before Tax](index=8&type=section&id=Loss%20Before%20Tax) This subsection presents key expense items contributing to the Group's loss before tax, including cost of sales and depreciation Loss Before Tax Components | Indicator | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | Cost of inventories sold | 39,238 | 47,207 | | Depreciation of property, plant and equipment | 1,759 | 1,650 | | Depreciation of right-of-use assets | 146 | 148 | | Impairment of property, plant and equipment | 1,089 | 396 | | Reversal of inventories provision | (5,101) | (10,451) | [Income Tax Credit](index=8&type=section&id=Income%20Tax%20Credit) This subsection details the Group's income tax credit, including provisions for Mainland China tax and deferred tax adjustments - Hong Kong profits tax: The Group had no assessable profits arising in Hong Kong for the six months ended June 30, 2025, and thus no provision for Hong Kong profits tax was made[19](index=19&type=chunk) - Mainland China tax: Tax on assessable profits in Mainland China is calculated at the prevailing tax rates in Mainland China where the Group operates[19](index=19&type=chunk) Income Tax Credit | Indicator | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | Provision for the period (Mainland China) | 2 | - | | Deferred tax | (215) | (192) | | **Total** | **(213)** | **(192)** | [Loss Per Share and Dividends](index=8&type=section&id=Loss%20Per%20Share%20and%20Dividends) This section provides details on the calculation of basic loss per share and confirms the Board's decision not to declare an interim dividend [Loss Per Share](index=8&type=section&id=Loss%20Per%20Share) This subsection details the calculation of basic and diluted loss per share for the period - Basic loss per share: Calculated based on a loss for the period of **HKD 6,064,000** and a weighted average of **538,019,000** ordinary shares outstanding, resulting in **(1.13) HK cents**[21](index=21&type=chunk) - Diluted loss per share: As there were no dilutive events during the period, diluted loss per share is the same as basic loss per share[21](index=21&type=chunk) [Dividends](index=8&type=section&id=Dividends) This subsection confirms the Board's decision regarding the interim dividend for the reporting period - No interim dividend: The Board resolved not to declare an interim dividend for the six months ended June 30, 2025[22](index=22&type=chunk) [Trade and Other Receivables, Prepayments and Deposits](index=9&type=section&id=Trade%20and%20Other%20Receivables%2C%20Prepayments%20and%20Deposits) This section details the composition and aging analysis of the Group's trade and other receivables, emphasizing credit risk management and reduced total receivables before impairment Trade and Other Receivables, Prepayments and Deposits | Indicator | June 30, 2025 (Thousand HKD) | December 31, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Trade receivables | 19,185 | 16,230 | | Bills receivable | 675 | 2,973 | | Prepayments, deposits and other receivables | 1,222 | 1,472 | | Amount due from a director | 152 | 164 | | **Total** | **21,234** | **20,839** | - Payment terms: Invoices are generally payable within **30 days** from the invoice date, with payment terms extended to **150 days** for certain major customers[23](index=23&type=chunk) - Credit risk management: The Group strictly controls outstanding trade receivables to minimize credit risk, with overdue balances regularly reviewed by senior management[23](index=23&type=chunk) Aging Analysis of Trade and Bills Receivables | Aging | June 30, 2025 (Thousand HKD) | December 31, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Within 3 months | 14,803 | 16,621 | | 3 to 6 months | 4,557 | 1,883 | | 6 to 12 months | 878 | 3,284 | | 1 to 2 years | 6,028 | 5,453 | | 2 to 3 years | 1,171 | 2,294 | | Over 3 years | 1,158 | - | | **Total (before impairment)** | **28,595** | **29,535** | | Impairment | (8,735) | (10,332) | | **Net** | **19,860** | **19,203** | [Trade and Other Payables](index=10&type=section&id=Trade%20and%20Other%20Payables) This section provides an aging analysis of the Group's trade payables, showing a decrease in total trade and bills payables Aging Analysis of Trade Payables | Aging | June 30, 2025 (Thousand HKD) | December 31, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Within 3 months | 5,738 | 7,573 | | 3 to 6 months | 4,001 | 6,765 | | Over 6 months | 16,024 | 18,196 | | **Trade payables** | **25,763** | **32,534** | | Bills payable | 9,163 | 4,225 | | **Total** | **34,926** | **36,759** | - Payment terms: Trade payables are interest-free and generally payable within **90 days**[25](index=25&type=chunk) Management Discussion and Analysis [Performance Overview](index=11&type=section&id=Performance%20Overview) For the first half of 2025, the Group's unaudited consolidated loss attributable to shareholders slightly increased by **1.1%** to **HKD 6,064 thousand**, with net assets decreasing by **HKD 4,997 thousand** - Loss attributable to shareholders: For the six months ended June 30, 2025, the Group's consolidated loss attributable to shareholders was **HKD 6,064,000**, an increase of **1.1%** compared to the same period last year[26](index=26&type=chunk) - Net assets: As of June 30, 2025, unaudited net assets were **HKD 14,064,000**, a decrease of **HKD 4,997,000** compared to December 31, 2024[26](index=26&type=chunk) - Dividends: The Board resolved not to declare an interim dividend for the six months ended June 30, 2025[26](index=26&type=chunk) [Business Review](index=11&type=section&id=Business%20Review) Despite a complex economic environment, the Group maintained stable operations, with gross profit margin and operating loss similar to the prior year, by focusing on 'turning losses into profits, improving quality and efficiency' [Macroeconomic Environment and Operating Strategies](index=11&type=section&id=Macroeconomic%20Environment%20and%20Operating%20Strategies) This subsection discusses the challenging macroeconomic environment and the Group's strategic initiatives to enhance management, reduce costs, and stabilize operations - Economic environment challenges: In the first half of 2025, the domestic and international economic environment was complex and volatile, with insufficient domestic consumer confidence and challenges from international trade policies (e.g., US tariffs)[27](index=27&type=chunk) - Operating方針: The Group firmly adhered to the 'turning losses into profits, improving quality and efficiency' work policy, pragmatically advancing various tasks, strengthening management, reducing costs, maintaining stable production and operations, and effectively promoting the transformation to subcontracted processing[27](index=27&type=chunk) - Operational efficiency improvement: Measures such as optimizing inventory management, expanding subcontracted processing business, strictly controlling administrative expenses, and strengthening receivables management effectively improved operational efficiency and reduced operating costs[27](index=27&type=chunk) [Production and Sales Performance](index=12&type=section&id=Production%20and%20Sales%20Performance) This subsection presents a quantitative analysis of the Group's production and sales volumes, highlighting shifts in business segments Production Volume Changes | Product | 2025 (Sq. ft./Tons) | 2024 (Sq. ft./Tons) | Change (%) | | :--- | :--- | :--- | :--- | | Subcontracted processing business | 14,325,000 | 6,312,000 | +127.0 | | Cowhide | 738,000 | 1,679,000 | -56.0 | | Grey leather | 0 | 384 Tons | -100.0 | Sales Volume Changes | Product | 2025 (Sq. ft./Tons) | 2024 (Sq. ft./Tons) | Change (%) | | :--- | :--- | :--- | :--- | | Subcontracted processing business | 14,325,000 | 6,312,000 | +127.0 | | Cowhide | 1,537,000 | 2,798,000 | -45.1 | | Grey leather | 0 | 384 Tons | -100.0 | Revenue by Business Segment | Business | 2025 (Thousand HKD) | 2024 (Thousand HKD) | Change (%) | | :--- | :--- | :--- | :--- | | Subcontracted processing business | 21,171 | 13,512 | +56.7 | | Cowhide sales | 13,435 | 26,467 | -49.2 | | Grey leather sales | 0 | 2,139 | -100.0 | | **Consolidated Turnover** | **34,606** | **42,118** | **-17.8** | [Operational Efficiency and Cost Control](index=13&type=section&id=Operational%20Efficiency%20and%20Cost%20Control) This subsection highlights the Group's initiatives to enhance operational efficiency, reduce costs, and manage inventory through strategic transformations and energy-saving measures - Subcontracted processing business transformation: Successfully stabilized customer numbers, achieved smooth operation of the entire production process, with production growth reaching **127.0%**, effectively spreading unit fixed manufacturing costs, and enhancing operational stability[30](index=30&type=chunk) - Energy-saving and consumption reduction measures: Introduced photovoltaic power generation projects, replaced factory roof sandwich panels, aligned with off-peak electricity preferential policies, and used clean energy to reduce production costs[28](index=28&type=chunk) - Cost control: Implemented transparent procurement through platforms like 'Yue Cai Yi' and 'JD.com', reducing total procurement by **2.7%** to **HKD 12,382,000**[31](index=31&type=chunk) - Inventory management: Consolidated inventory decreased by **22.3%** to **HKD 18,686,000**, achieving destocking through promoting finished goods to customers, integration and rectification, effective order-based production, and product innovation[32](index=32&type=chunk) - Impairment of property, plant and equipment: In view of operating losses, an impairment loss of **HKD 1,089,000** (2024: **HKD 396,000**) was recognized for property, plant and equipment[33](index=33&type=chunk) [Financial Review](index=14&type=section&id=Financial%20Review) This section reviews the Group's liquidity, financial resources, capital expenditure, pledged assets, and exchange rate risk exposure [Liquidity and Financial Resources](index=14&type=section&id=Liquidity%20and%20Financial%20Resources) This subsection analyzes the Group's cash position, cash flows from operating, investing, and financing activities, and its debt-to-equity ratio - Cash and cash equivalents: As of June 30, 2025, amounted to **HKD 3,043,000**, a decrease of **11.0%** compared to December 31, 2024[34](index=34&type=chunk) - Cash flow: Net cash inflow from operating activities was **HKD 2,327,000** (primarily due to a decrease in inventories), net cash outflow from investing activities was **HKD 2,717,000**, and net cash outflow from financing activities was **HKD 40,000** during the period[34](index=34&type=chunk) - Gearing ratio: The ratio of interest-bearing loan liabilities to shareholders' equity plus interest-bearing loan liabilities increased to **38.4%** (December 31, 2024: **31.2%**)[35](index=35&type=chunk) - Bank credit: Total bank credit facilities amounted to **HKD 38,381,000**, all unused, indicating the Group has sufficient financial resources for its daily operations[35](index=35&type=chunk) [Capital Expenditure](index=15&type=section&id=Capital%20Expenditure) This subsection details the Group's capital expenditure for the period, primarily for renovations and equipment to support production needs - Net non-current assets: As of June 30, 2025, amounted to **HKD 47,304,000**, a decrease of **0.7%** compared to December 31, 2024[36](index=36&type=chunk) - Capital expenditure: Total capital expenditure for the period was **HKD 1,114,000**, primarily for renovations and equipment purchases to meet production needs[36](index=36&type=chunk) [Pledged Assets](index=15&type=section&id=Pledged%20Assets) This subsection identifies the Group's assets pledged to banks to secure general banking facilities - Pledged assets: As of June 30, 2025, bank deposits of **HKD 3,469,000**, buildings of **HKD 32,613,000**, and right-of-use assets of **HKD 10,285,000** were pledged to banks to secure general banking facilities[37](index=37&type=chunk) [Exchange Rate Risk](index=15&type=section&id=Exchange%20Rate%20Risk) This subsection describes the Group's primary foreign currency exposure and its approach to hedging exchange rate fluctuations - Primary foreign currency risk: Primarily arises from purchases imported from overseas suppliers, with the main currencies being USD against RMB[38](index=38&type=chunk) - Hedging strategy: The Group did not hedge against risks arising from exchange rate fluctuations during the period but may use forward or hedging contracts in the future to mitigate such risks[38](index=38&type=chunk) [Employee Remuneration Policy](index=15&type=section&id=Employee%20Remuneration%20Policy) As of June 30, 2025, the Group had **232** employees, with a performance-based remuneration policy linking rewards to operating results and individual performance, alongside social and pension schemes - Number of employees: As of June 30, 2025, the Group had **232** employees (December 31, 2024: **261** employees)[39](index=39&type=chunk) - Remuneration policy: Determined by operating results and employee performance, implementing quantitative employee performance assessments and establishing an operating assessment mechanism centered on 'integration of responsibilities and performance linkage'[39](index=39&type=chunk) - Benefits: Employees in different regions participate in social and medical insurance as well as pension schemes[39](index=39&type=chunk) [Outlook](index=16&type=section&id=Outlook) The Group will continue to implement its core strategy of 'increasing revenue, reducing expenditure, and improving efficiency to reduce losses', focusing on expanding subcontracted processing, optimizing procurement, and enhancing production capacity for long-term growth - Core strategy: Continue with the core strategy of 'increasing revenue, reducing expenditure, and improving efficiency to reduce losses', actively responding to market changes and seizing opportunities from the growing demand for natural leather in the casual sports shoe sector[40](index=40&type=chunk) - Business development: Further expand subcontracted processing business, optimize raw hide procurement pace, strengthen long-term cooperation with quality customers, and improve capacity utilization[40](index=40&type=chunk) - Cost control: Strictly implement energy-saving and consumption reduction measures, strengthen material management, reduce waste and unnecessary expenses; continuously advance inventory reduction and receivables collection, optimize asset-liability structure, and improve cash flow[40](index=40&type=chunk) - Future goals: While consolidating traditional leather business, actively explore new business opportunities, achieve revenue diversification, enhance long-term growth potential, and strive for further loss reduction in the second half of 2025[40](index=40&type=chunk) Corporate Governance and Other Information [Corporate Governance Code](index=17&type=section&id=Corporate%20Governance%20Code) The company generally complies with the Corporate Governance Code, with one deviation where Mr. Zhou Hao serves as both Chairman and Managing Director - Compliance: The Company has complied with the code provisions of the **Corporate Governance Code** as set out in **Listing Rules Appendix C1** for the six months ended June 30, 2025[41](index=41&type=chunk) - Deviation: **Mr. Zhou Hao** serves concurrently as the Chairman and Managing Director of the Company, deviating from code provision **C.2.1** which stipulates that the roles of chairman and chief executive should be separate and performed by different individuals[41](index=41&type=chunk) [Directors' Securities Transactions](index=17&type=section&id=Directors%27%20Securities%20Transactions) All Directors confirmed compliance with the Model Code for Securities Transactions by Directors of Listed Issuers during the period - Compliance with Model Code: All Directors confirmed that they complied with the required standards of dealing as set out in the **Model Code for Securities Transactions by Directors of Listed Issuers** for the six months ended June 30, 2025[42](index=42&type=chunk) [Review of Interim Results](index=17&type=section&id=Review%20of%20Interim%20Results) The company's Audit Committee and independent auditor Zhonghui Anda CPA Limited have reviewed the unaudited interim results for the six months ended June 30, 2025 - Reviewing bodies: The Company's **Audit Committee** and independent auditor **Zhonghui Anda CPA Limited** have reviewed the Group's unaudited interim results for the six months ended June 30, 2025[43](index=43&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=17&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) During the period, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of its listed securities on the Stock Exchange - No securities transactions: 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 on the Stock Exchange[44](index=44&type=chunk) [Publication of Interim Results and Interim Report](index=18&type=section&id=Publication%20of%20Interim%20Results%20and%20Interim%20Report) The interim results announcement has been published on the company's and Hong Kong Stock Exchange websites, with the interim report to be dispatched to shareholders around September 24, 2025 - Announcement publication: The interim results announcement has been published on the Company's website and the Stock Exchange's website[45](index=45&type=chunk) - Interim report: The interim report for the six months ended June 30, 2025, will be dispatched to the Company's shareholders and available for download on the aforementioned websites around **September 24, 2025**[45](index=45&type=chunk)

[Financial Performance](index=1&type=section&id=Financial%20Performance) [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=1&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended June 30, 2025, revenue decreased by 12.3% to HK$689 million, but loss significantly narrowed to HK$3.55 million due to cost control and exchange gains, improving basic loss per share from 3.79 HK cents to 0.56 HK cents Key Data from Consolidated Statement of Profit or Loss | Indicator | For the six months ended June 30, 2025 (HK$ Thousand) | For the six months ended June 30, 2024 (HK$ Thousand) | Year-on-year Change | | :--- | :--- | :--- | :--- | | Revenue | 688,654 | 785,212 | -12.3% | | Loss before tax | (1,865) | (27,757) | -93.3% | | Loss for the period | (3,553) | (23,915) | -85.1% | | Total comprehensive income (expense) for the period | 40,380 | (63,300) | N/A | | Basic loss per share (HK Cents) | (0.56) | (3.79) | -85.2% | [Condensed Consolidated Statement of Financial Position](index=3&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, total assets were HK$1.885 billion and net assets were HK$1.600 billion, with a robust financial position, HK$924 million in net current assets, substantial cash, and no bank borrowings Key Data from Statement of Financial Position | Indicator | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | Period Change | | :--- | :--- | :--- | :--- | | Non-current assets | 767,609 | 809,141 | -5.1% | | Current assets | 1,117,440 | 1,162,485 | -3.9% | | Current liabilities | 193,312 | 201,476 | -4.0% | | Net assets (Total equity) | 1,600,452 | 1,673,543 | -4.4% | | Bank balances and cash | 518,076 | 546,648 | -5.2% | [Summary of Notes to Financial Statements](index=4&type=section&id=Summary%20of%20Notes%20to%20Financial%20Statements) The notes detail the Group's core business as mould base manufacturing and sales, with revenue primarily from China, which saw a decline, while other income significantly increased due to exchange gains, and an interim dividend of 8 HK cents per share was declared [Revenue and Segment Information](index=5&type=section&id=Revenue%20and%20Segment%20Information) The Group's core business is manufacturing and selling mould bases and related products, forming a single operating segment, with China as the main revenue source experiencing a 14.4% year-on-year decline, while other regions saw slight growth - The Group is principally engaged in the manufacturing and sale of mould bases and related products, with revenue recognized when control of the goods is transferred to customers[8](index=8&type=chunk)[9](index=9&type=chunk) Revenue by Geographical Region | Region | For the six months ended June 30, 2025 (HK$ Thousand) | For the six months ended June 30, 2024 (HK$ Thousand) | Year-on-year Change | | :--- | :--- | :--- | :--- | | China | 594,866 | 694,610 | -14.4% | | Other | 93,788 | 90,602 | +3.5% | | **Total** | **688,654** | **785,212** | **-12.3%** | [Other Income, Gains and Losses](index=6&type=section&id=Other%20Income%2C%20Gains%20and%20Losses) Total other income, gains, and losses significantly increased to HK$11.52 million from HK$6.19 million last year, primarily driven by a shift from an exchange loss to an exchange gain of HK$2.68 million Details of Other Income, Gains and Losses | Item | For the six months ended June 30, 2025 (HK$ Thousand) | For the six months ended June 30, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Interest income | 3,030 | 4,578 | | Rental income | 2,206 | 1,432 | | Net exchange gain (loss) | 2,675 | (1,705) | | **Total** | **11,516** | **6,188** | [Dividends](index=8&type=section&id=Dividends) The Board resolved to declare an interim dividend of 8 HK cents per share for the six months ended June 30, 2025, totaling approximately HK$50.53 million, a significant increase from 5 HK cents per share in the prior year - The Board resolved to declare an interim dividend of **8 HK cents per share**, higher than **5 HK cents per share** in the prior year[18](index=18&type=chunk) [Trade, Bills and Other Receivables](index=9&type=section&id=Trade%2C%20Bills%20and%20Other%20Receivables) At the period end, total trade and bills receivables were HK$105 million, slightly down from HK$109 million at the end of 2024, with approximately 75% of receivables aged within 60 days, indicating a healthy structure Ageing Analysis of Trade and Bills Receivables | Ageing | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | 0 to 60 days | 79,343 | 86,174 | | 61 to 90 days | 15,609 | 16,495 | | Over 90 days | 10,266 | 6,019 | | **Total** | **105,218** | **108,688** | [Management Discussion and Analysis](index=10&type=section&id=Management%20Discussion%20and%20Analysis) [Business Review](index=10&type=section&id=Business%20Review) Despite a challenging global business environment and weak market demand leading to decreased revenue, the Group improved overall performance by increasing product gross profit margin through higher selling prices, high-value-added orders, and controlled raw material costs, significantly reducing net loss - Despite weak market conditions, the Group's total revenue decreased, but **product gross profit margin increased**, leading to a **reduction in net loss**[26](index=26&type=chunk) - Profit improvement was attributed to slightly higher product selling prices, undertaking orders with higher processing complexity, and a moderate decrease in raw material procurement prices[27](index=27&type=chunk) [Financial Review](index=11&type=section&id=Financial%20Review) Revenue decreased by 12.3% year-on-year, but cost control was a key improvement, with raw materials and consumables costs as a percentage of revenue falling from 40.0% to 35.2%, leading to an 85.1% reduction in loss for the period to HK$3.55 million - Revenue decreased by **12.3% year-on-year**, primarily due to a reduction in total market orders caused by a challenging business environment[28](index=28&type=chunk) - Raw materials and consumables costs as a percentage of revenue decreased from **40.0%** in the prior year to **35.2%**[28](index=28&type=chunk) - As a result of the aforementioned factors, loss for the period decreased by **85.1%** to **HK$3.55 million**[29](index=29&type=chunk) [Liquidity and Financial Resources](index=11&type=section&id=Liquidity%20and%20Financial%20Resources) The Group maintains a robust financial position with ample liquidity, holding HK$518 million in bank balances and cash as of June 30, 2025, with no bank borrowings, sufficient to meet its operating and capital commitments Key Liquidity Indicators | Indicator | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Total equity | 1,600,452 | 1,673,543 | | Bank balances and cash | 518,076 | 546,648 | | Borrowings | 0 | 0 | [Outlook](index=12&type=section&id=Outlook) Facing global economic uncertainties in the second half, the Group will cautiously adjust strategies, strengthen marketing, explore new markets like ASEAN, align with China's consumption-boosting policies, focus on high-end tech, and enhance efficiency through intelligent manufacturing for stable development - Facing geopolitical conflicts and trade protectionism, the Group will cautiously adjust marketing strategies and actively explore new markets (e.g., ASEAN) to diversify risks[33](index=33&type=chunk) - The Group will align with the Chinese government's measures to boost consumption and investment, expanding market opportunities in new energy vehicles, high-end electronics, and AI products[34](index=34&type=chunk) - Future plans include continuous improvement of production equipment and processes, utilizing intelligent and efficient production models to reduce reliance on manual labor and enhance production efficiency[34](index=34&type=chunk) [Other Disclosures](index=13&type=section&id=Other%20Disclosures) [Review of Interim Financial Statements](index=13&type=section&id=Review%20of%20Interim%20Financial%20Statements) The company's audit committee, along with management and external auditor Deloitte, reviewed the unaudited condensed consolidated financial statements for the period and discussed internal controls and financial reporting matters - The Audit Committee, in conjunction with management and the external auditor, has reviewed the Group's accounting principles, practices, and the unaudited condensed consolidated financial statements[36](index=36&type=chunk) [Interim Dividend](index=13&type=section&id=Interim%20Dividend) The Board resolved to declare an interim dividend of 8 HK cents per share, a 60% increase from 5 HK cents per share in the prior year, with payment expected on or about September 23, 2025 - The Board resolved to declare an interim dividend of **8 HK cents per share** for the six months ended June 30, 2025 (2024: **5 HK cents per share**)[37](index=37&type=chunk) [Corporate Governance](index=13&type=section&id=Corporate%20Governance) Throughout the review period, the company complied with all code provisions of the Corporate Governance Code in Appendix C1 of the Listing Rules, and no shares were repurchased, sold, or redeemed - Throughout the review period, the Company has complied with all code provisions of the Corporate Governance Code[40](index=40&type=chunk) - During the period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's shares or other securities[39](index=39&type=chunk)

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其準確性或完整性亦不發表任何 聲明，並明確表示，概不對因本公告全部或任何部分內容而產生或因依賴該等內容而引致的任何損失承擔任何責任。 AINNOVATION TECHNOLOGY GROUP CO., LTD* 創新奇智科技集團股份有限公司 （於中華人民共和國註冊成立的股份有限公司） （股份代號：2121） 截 至 2025 年 6 月 30 日止六個月中期業績公告 及 進一步變更所得款項用途和使用期限 創新奇智科技集團股份有限公司（「本公司」，連同其附屬公司統稱「本集團」）董事會（「董事會」）欣然 宣佈本集團截至2025年6月30日止六個月（「報告期」）的未經審核綜合中期業績連同2024年同期的 比較數字。 | 財務概要 | | | | --- | --- | --- | | | 截至6月30日止六個月 | | | | 2025年 | 2024年 | | | 人民幣千元 | 人民幣千元 | | | （未經審核） | （未經審核） | | 收入 | 698,981 | 571,704 | | 毛利 | 244,728 | 193,225 ...

Financial Performance - The group's revenue for the six months ended June 30, 2025, was approximately RMB 270.5 million, an increase of about 3.8% compared to the corresponding period [8]. - For the six months ended June 30, 2025, the group reported revenue of RMB 270,562,000, an increase of 3.4% from RMB 260,677,000 in the same period of 2024 [28]. - Gross profit for the same period was RMB 99,716,000, representing a significant increase of 34.7% compared to RMB 74,121,000 in 2024 [28]. - The operating profit increased to RMB 28,531,000, up 32.2% from RMB 21,589,000 in the previous year [28]. - Net profit for the period was RMB 19,954,000, a rise of 31.5% from RMB 15,134,000 in 2024 [28]. - Profit attributable to the company's owners for the six months ended June 30, 2025, was RMB 19,954,000, compared to RMB 15,134,000 for the same period in 2024, reflecting a growth of 31.5% [60]. - The basic and diluted earnings per share increased to RMB 4.47, compared to RMB 3.06 in the same period last year [28]. - The company reported a total comprehensive income of RMB 25,044 thousand for the six months ended June 30, 2025, compared to RMB 17,181 thousand for the same period in 2024, reflecting an increase of approximately 45.8% [32]. Expenses and Costs - Selling expenses rose by approximately RMB 1.4 million or 6.4% to about RMB 22.5 million, primarily due to increased marketing and exhibition expenses [11]. - Administrative expenses increased by approximately RMB 12.2 million or 33.3% to about RMB 48.8 million, mainly due to higher salaries and benefits for administrative staff [12]. - The current tax expense for the six months ended June 30, 2025, was RMB 3,095,000, compared to RMB 1,235,000 in the same period of 2024, reflecting a substantial increase of 150.5% [55]. Assets and Liabilities - As of June 30, 2025, the group had current assets of approximately RMB 354.6 million, with a current ratio of about 1.90, up from 1.13 as of December 31, 2024 [17]. - Total bank borrowings amounted to approximately RMB 468.9 million, an increase of about 23.1% from RMB 380.8 million as of December 31, 2024 [18]. - The debt-to-equity ratio was approximately 1.61, up from 1.37 as of December 31, 2024, primarily due to an increase in long-term bank borrowings [18]. - As of June 30, 2025, the total assets of the group were RMB 965,352,000, an increase from RMB 874,916,000 as of December 31, 2024 [30]. - The total liabilities increased to RMB 674,157 thousand, up from RMB 596,085 thousand in December 2024, representing a growth of approximately 13% [31]. - The total assets less current liabilities amounted to RMB 778,350 thousand as of June 30, 2025, compared to RMB 586,972 thousand in December 2024, indicating a growth of approximately 32.6% [31]. Cash Flow and Financing - The company's net cash used in operating activities for the six months ended June 30, 2025, was RMB (9,742) thousand, a significant improvement compared to RMB (48,871) thousand for the same period in 2024 [33]. - The company reported a net cash inflow from financing activities of RMB 69,677 thousand for the six months ended June 30, 2025, compared to RMB 77,901 thousand in the same period of 2024 [33]. - The company incurred a net loss of RMB (5,448) thousand in cash from operating activities for the six months ended June 30, 2025, compared to a loss of RMB (46,551) thousand in the same period of 2024 [33]. - The cash and cash equivalents decreased to RMB 54,284 thousand as of June 30, 2025, from RMB 68,520 thousand as of June 30, 2024, representing a decline of approximately 20.7% [35]. Shareholder Information - The total number of issued ordinary shares remained at 490,420 thousand shares with a par value of RMB 4,171 thousand as of June 30, 2025 [65]. - The company did not recommend any interim dividend for the current period, consistent with the previous period [71]. - The company repurchased ordinary shares amounting to RMB (12,680) thousand during the six months ended June 30, 2025, compared to RMB (3,832) thousand in the same period of 2024 [32]. - The company repurchased a total of 23,105,000 shares at a total cash consideration of approximately HKD 13.9 million, enhancing the company's net asset value [79]. Management and Governance - The company has confirmed that there are no other interests or positions held by directors or key executives in the company's shares or related securities as of June 30, 2025 [81]. - The company has adopted the GEM Listing Rules for trading standards, and all directors have confirmed compliance during the reporting period [87]. - The company is committed to high corporate governance standards to protect shareholder interests and enhance company value [88]. - The audit committee, consisting of three independent non-executive directors, has reviewed the interim results and confirmed compliance with applicable accounting standards [89]. - The roles of Chairman and CEO are held by Mr. Sheng, which the board believes is beneficial for the company's strategic continuity [88]. Employee Information - The group employed 460 staff as of June 30, 2025, an increase from 396 employees at the end of 2024 [22]. - The remuneration for key management personnel increased to RMB 4,050,000 in the current period from RMB 2,360,000 in the corresponding period [75]. Market and Industry Outlook - Revenue from overseas markets increased by approximately 7.2%, driven by demand from the United Arab Emirates, India, and other overseas markets [8]. - The group anticipates continued growth in the decorative printing materials industry due to economic recovery in China [26].

Interim Results Announcement [Condensed Consolidated Interim Financial Statements](index=2&type=section&id=Condensed%20Consolidated%20Interim%20Financial%20Statements) This section presents the unaudited condensed consolidated interim financial statements for the six months ended June 30, 2025, with comparative data [Condensed Consolidated Interim Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=Condensed%20Consolidated%20Interim%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended June 30, 2025, the company's revenue significantly increased, gross profit grew, and net profit was achieved, reversing the prior year's loss | Metric | Six Months Ended June 30, 2025 (RMB '000) | Six Months Ended June 30, 2024 (RMB '000) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 127,456 | 69,090 | +84.5% | | Cost of Sales | (104,537) | (62,765) | +66.6% | | Gross Profit | 22,919 | 6,325 | +262.4% | | Operating Profit/(Loss) | 6,488 | (3,855) | N/A (Turned from loss to profit) | | Profit/(Loss) for the Period | 6,448 | (4,184) | N/A (Turned from loss to profit) | | Earnings/(Loss) Per Share | 0.016 | (0.010) | N/A (Turned from loss to profit) | [Condensed Consolidated Interim Statement of Financial Position](index=3&type=section&id=Condensed%20Consolidated%20Interim%20Statement%20of%20Financial%20Position) As of June 30, 2025, total assets increased by 14.8% to RMB 322,132 thousand, driven by current assets and a significant rise in cash and cash equivalents | Metric | As of June 30, 2025 (RMB '000) | As of December 31, 2024 (RMB '000) | Change (%) | | :--- | :--- | :--- | :--- | | Total Assets | 322,132 | 280,530 | +14.8% | | Non-current Assets | 123,623 | 126,855 | -2.5% | | Current Assets | 198,509 | 153,675 | +29.2% | | Total Equity | 202,560 | 195,947 | +3.4% | | Total Liabilities | 119,572 | 84,583 | +41.4% | | Current Liabilities | 114,998 | 79,583 | +44.5% | | Cash and Cash Equivalents | 23,228 | 6,003 | +286.9% | [Condensed Consolidated Interim Statement of Changes in Equity](index=5&type=section&id=Condensed%20Consolidated%20Interim%20Statement%20of%20Changes%20in%20Equity) For the six months ended June 30, 2025, total equity increased to RMB 202,560 thousand, primarily due to profit for the period and foreign currency translation differences | Metric | As of June 30, 2025 (RMB '000) | As of January 1, 2024 (RMB '000) | | :--- | :--- | :--- | | Total Equity at Period End | 202,560 | 207,060 | | Profit/(Loss) for the Period | 6,448 | (4,184) | | Other Comprehensive Income/(Expense) | 165 | (15) | | Total Comprehensive Income/(Expense) | 6,613 | (4,199) | [Condensed Consolidated Interim Statement of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Interim%20Statement%20of%20Cash%20Flows) For the six months ended June 30, 2025, operating activities resulted in a cash outflow, while financing activities generated significant cash inflow from bank borrowings, leading to a net increase in cash | Metric | Six Months Ended June 30, 2025 (RMB '000) | Six Months Ended June 30, 2024 (RMB '000) | | :--- | :--- | :--- | | Net Cash From/(Used in) Operating Activities | (30,599) | 3,678 | | Net Cash Used in Investing Activities | (1,256) | (15,530) | | Net Cash From/(Used in) Financing Activities | 49,080 | (5,223) | | Net Increase/(Decrease) in Cash and Cash Equivalents | 17,225 | (17,075) | | Cash and Cash Equivalents at Period End | 23,228 | 27,096 | [Notes to the Condensed Consolidated Interim Financial Statements](index=7&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Interim%20Financial%20Statements) This section provides detailed notes to the condensed consolidated interim financial statements, covering accounting policies, fair value measurements, segment reporting, and key financial item details [General Information](index=7&type=section&id=General%20Information) The company, incorporated in the Cayman Islands, primarily manufactures and sells concrete products in China, with Ms Wang Xianyu as the ultimate controlling shareholder - The company primarily engages in the manufacturing and sale of PHC pipe piles, ceramsite concrete slabs, and commercial concrete in China[10](index=10&type=chunk) - Ms Wang Xianyu is the ultimate controlling shareholder of the company[11](index=11&type=chunk) [Basis of Preparation](index=7&type=section&id=Basis%20of%20Preparation) The unaudited condensed consolidated interim financial statements are prepared in accordance with HKAS 34 and the Listing Rules, and have been reviewed by the Audit Committee - The unaudited condensed consolidated interim financial statements are prepared in accordance with Hong Kong Accounting Standard 34 'Interim Financial Reporting' issued by the HKICPA and the applicable disclosure requirements of the Listing Rules[12](index=12&type=chunk) - The condensed consolidated interim financial statements have not been audited or reviewed by the company's external auditors, but have been reviewed by the Audit Committee[12](index=12&type=chunk) [Summary of Significant Accounting Policies](index=8&type=section&id=Summary%20of%20Significant%20Accounting%20Policies) The financial statements are prepared on a historical cost basis, adopting new and revised HKFRSs effective January 1, 2025, with no material impact from HKAS 21 (Amendment) - The condensed consolidated interim financial statements have been prepared on a historical cost basis[13](index=13&type=chunk) - The adoption of HKAS 21 (Amendment) 'Lack of Exchangeability' had no impact on the Group's interim condensed consolidated financial information[15](index=15&type=chunk) [Fair Value Measurement](index=9&type=section&id=Fair%20Value%20Measurement) The Group's financial assets and liabilities have fair values similar to their carrying amounts, with fair value measurements categorized into three levels, primarily including listed and unlisted equity securities - The carrying amounts of the Group's financial assets and financial liabilities approximate their respective fair values[18](index=18&type=chunk) - Level 1 instruments primarily include investments in listed securities, classified as financial assets at fair value through profit or loss[24](index=24&type=chunk) - Level 3 instruments primarily include investments in unlisted equity securities (Zhejiang Erge) and bank and commercial acceptance bills, whose fair values are determined using applicable valuation techniques (including the comparable company method)[25](index=25&type=chunk)[26](index=26&type=chunk) [Segment Reporting](index=11&type=section&id=Segment%20Reporting) The Group operates as a single segment, manufacturing and selling concrete products in China, with all revenue and most non-current assets originating from China - The Group primarily engages in the manufacturing and sale of commercial concrete, PHC pipe piles, and ceramsite concrete slabs in China, with management reviewing the business as a single operating segment[27](index=27&type=chunk) - All of the Group's revenue is derived from China, and non-current assets are primarily located in China (**RMB 113,507 thousand**)[27](index=27&type=chunk)[28](index=28&type=chunk) [Revenue](index=11&type=section&id=Revenue) For the six months ended June 30, 2025, total revenue increased by 84.5% to RMB 127,456 thousand, driven by significant growth in PHC pipe piles and commercial concrete sales | Product | Six Months Ended June 30, 2025 (RMB '000) | Six Months Ended June 30, 2024 (RMB '000) | Change (%) | | :--- | :--- | :--- | :--- | | PHC Pipe Piles | 79,099 | 41,414 | +91.0% | | Commercial Concrete | 48,351 | 26,115 | +85.1% | | Ceramsite Concrete Slabs | 6 | 1,561 | -99.6% | | Total | 127,456 | 69,090 | +84.5% | - Contract liabilities increased from **RMB 1,108 thousand** as of December 31, 2024, to **RMB 2,331 thousand** as of June 30, 2025[31](index=31&type=chunk) - In the first half of 2025, Customer A contributed **RMB 18,241 thousand** in revenue, becoming a major customer[32](index=32&type=chunk) [Expenses by Nature](index=12&type=section&id=Expenses%20by%20Nature) For the six months ended June 30, 2025, raw materials and consumables expenses significantly increased by 90.7%, employee benefit expenses rose, while depreciation of property, plant and equipment decreased | Item | Six Months Ended June 30, 2025 (RMB '000) | Six Months Ended June 30, 2024 (RMB '000) | Change (%) | | :--- | :--- | :--- | :--- | | Raw Materials and Consumables Used | 86,793 | 45,505 | +90.7% | | Employee Benefit Expenses | 7,219 | 6,535 | +10.5% | | Depreciation of Property, Plant and Equipment | 5,085 | 6,142 | -17.2% | | Total Expenses | 122,101 | 73,814 | +65.4% | [Other Income, Other Costs and Net Other Gains](index=13&type=section&id=Other%20Income,%20Other%20Costs%20and%20Net%20Other%20Gains) For the six months ended June 30, 2025, net other income, costs, and gains increased by 29.9% to RMB 1,133 thousand, primarily from rental income and fair value gains on financial assets | Item | Six Months Ended June 30, 2025 (RMB '000) | Six Months Ended June 30, 2024 (RMB '000) | Change (%) | | :--- | :--- | :--- | :--- | | Other Income | 1,379 | – | N/A | | Other Costs | (1,215) | – | N/A | | Net Other Gains | 969 | 872 | +11.1% | | Total | 1,133 | 872 | +29.9% | [Net Finance (Costs)/Income](index=13&type=section&id=Net%20Finance%20(Costs)%2FIncome) For the six months ended June 30, 2025, the company recorded net finance costs of RMB 171 thousand, reversing the prior year's net finance income, mainly due to increased bank borrowing interest expenses | Item | Six Months Ended June 30, 2025 (RMB '000) | Six Months Ended June 30, 2024 (RMB '000) | | :--- | :--- | :--- | | Finance Income | 136 | 298 | | Finance Costs | (307) | (96) | | Net Finance (Costs)/Income | (171) | 202 | [Income Tax (Credit)/Expense](index=14&type=section&id=Income%20Tax%20(Credit)%2FExpense) For the six months ended June 30, 2025, the company recorded an income tax credit of RMB 131 thousand, with PRC subsidiaries subject to a 25% corporate income tax rate, and high-tech enterprises enjoying a 15% preferential rate | Item | Six Months Ended June 30, 2025 (RMB '000) | Six Months Ended June 30, 2024 (RMB '000) | | :--- | :--- | :--- | | Current Income Tax | 432 | 16 | | Deferred Income Tax | (563) | 515 | | Income Tax (Credit)/Expense | (131) | 531 | - The applicable corporate income tax rate for PRC subsidiaries is **25%**, with high-tech enterprises enjoying a preferential rate of **15%**[36](index=36&type=chunk) - The additional tax deduction for qualified R&D expenses of manufacturing enterprises has increased to **200%** since 2021[37](index=37&type=chunk) [Dividends](index=15&type=section&id=Dividends) For the six months ended June 30, 2025, the company neither paid nor declared any dividends, consistent with the prior year - The Board does not recommend paying any interim dividend for the period (six months ended June 30, 2024: nil)[39](index=39&type=chunk) [Earnings Per Share](index=15&type=section&id=Earnings%20Per%20Share) For the six months ended June 30, 2025, basic earnings per share was RMB 0.016, reflecting improved performance from a loss of RMB 0.010 per share in the prior year | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Profit/(Loss) Attributable to Equity Holders of the Company (RMB thousand) | 6,448 | (4,181) | | Weighted Average Number of Shares in Issue (thousand shares) | 400,000 | 400,000 | | Basic Earnings Per Share (RMB) | 0.016 | (0.010) | - During the period and for the six months ended June 30, 2025, the company had no outstanding potential ordinary shares, thus diluted earnings per share equals basic earnings per share[41](index=41&type=chunk) [Property, Plant and Equipment](index=15&type=section&id=Property,%20Plant%20and%20Equipment) For the six months ended June 30, 2025, the Group's purchases of property, plant and equipment significantly increased to approximately RMB 2,164 thousand, indicating substantial capital expenditure growth - The Group purchased property, plant and equipment at a total cost of approximately **RMB 2,164 thousand**, a significant increase from **RMB 51 thousand** in the prior year[42](index=42&type=chunk) [Financial Assets at Fair Value Through Profit or Loss](index=16&type=section&id=Financial%20Assets%20at%20Fair%20Value%20Through%20Profit%20or%20Loss) As of June 30, 2025, financial assets at fair value through profit or loss totaled RMB 17,295 thousand, remaining stable and primarily comprising investments in unlisted and PRC listed equity securities | Item | As of June 30, 2025 (RMB '000) | As of December 31, 2024 (RMB '000) | | :--- | :--- | :--- | | Investment in Unlisted Equity Securities | 15,814 | 15,578 | | Investment in Hong Kong Listed Equity Securities | – | 949 | | Investment in PRC Listed Equity Securities | 1,481 | 772 | | Total | 17,295 | 17,299 | [Trade, Prepayments and Other Receivables](index=16&type=section&id=Trade,%20Prepayments%20and%20Other%20Receivables) As of June 30, 2025, trade, prepayments, and other receivables increased by 24.9% to RMB 134,932 thousand, with trade receivables growing by 19.9% | Item | As of June 30, 2025 (RMB '000) | As of December 31, 2024 (RMB '000) | Change (%) | | :--- | :--- | :--- | :--- | | Trade Receivables (Net) | 112,856 | 94,143 | +19.9% | | Other Receivables (Net) | 2,828 | 1,701 | +66.3% | | Prepayments for Raw Materials | 19,248 | 12,177 | +58.1% | | Total | 134,932 | 108,021 | +24.9% | | Aging of Trade Receivables | As of June 30, 2025 (RMB '000) | As of December 31, 2024 (RMB '000) | | :--- | :--- | :--- | | Within 1 month | 50,154 | 26,536 | | 1 to 6 months | 42,556 | 41,906 | | 6 months to 1 year | 17,566 | 16,583 | | 1 to 2 years | 9,593 | 14,961 | | Over 2 years | 5,842 | 7,276 | | Total | 125,711 | 107,262 | [Restricted Cash](index=17&type=section&id=Restricted%20Cash) As of June 30, 2025, restricted cash amounted to RMB 6,941 thousand, primarily serving as collateral for bank acceptance bills, a decrease from the prior year-end - Restricted cash, primarily collateral for bank acceptance bills, was **RMB 6,941 thousand** as of June 30, 2025 (December 31, 2024: **RMB 9,646 thousand**)[46](index=46&type=chunk)[5](index=5&type=chunk) [Share Capital](index=17&type=section&id=Share%20Capital) As of June 30, 2025, the company's issued and fully paid share capital remained unchanged at 400,000,000 ordinary shares, with a share capital amount of RMB 3,584 thousand | Item | Number of Shares | Share Capital (RMB '000) | | :--- | :--- | :--- | | Issued and Fully Paid Share Capital (As of June 30, 2025 and As of December 31, 2024) | 400,000,000 | 3,584 | [Trade and Other Payables](index=18&type=section&id=Trade%20and%20Other%20Payables) As of June 30, 2025, trade and other payables decreased by 20.5% to RMB 60,372 thousand, with trade payables declining by 18% | Item | As of June 30, 2025 (RMB '000) | As of December 31, 2024 (RMB '000) | Change (%) | | :--- | :--- | :--- | :--- | | Trade Payables | 50,645 | 61,746 | -18.0% | | Bills Payable | 6,717 | 9,163 | -26.7% | | Accrued Wages | 1,104 | 1,292 | -14.5% | | Other Taxes Payable | 1,585 | 919 | +72.5% | | Other Payables | 321 | 2,834 | -88.7% | | Total | 60,372 | 75,954 | -20.5% | | Aging of Trade Payables | As of June 30, 2025 (RMB '000) | As of December 31, 2024 (RMB '000) | | :--- | :--- | :--- | | Within 1 month | 24,933 | 38,042 | | 1 to 6 months | 10,360 | 12,189 | | 6 months to 1 year | 7,459 | 8,772 | | 1 to 2 years | 5,242 | 2,046 | | Over 2 years | 2,651 | 697 | | Total | 50,645 | 61,746 | [Borrowings](index=18&type=section&id=Borrowings) As of June 30, 2025, the Group incurred new short-term bank borrowings of RMB 49,500 thousand, all denominated in RMB and secured by buildings and land use rights | Item | As of June 30, 2025 (RMB '000) | As of December 31, 2024 (RMB '000) | | :--- | :--- | :--- | | Short-term Bank Borrowings | 49,500 | – | - The Group's short-term bank borrowings of approximately **RMB 49,500 thousand** are secured by buildings with a net book value of approximately **RMB 12,207 thousand** and land use rights of approximately **RMB 10,614 thousand**[56](index=56&type=chunk) [Related Party Transactions](index=19&type=section&id=Related%20Party%20Transactions) For the six months ended June 30, 2025, key management personnel compensation was approximately RMB 1,383 thousand, a decrease from the prior year - For the six months ended June 30, 2025, key management personnel compensation was approximately **RMB 1,383 thousand** (six months ended June 30, 2024: **RMB 2,247 thousand**)[49](index=49&type=chunk) [Contingent Liabilities](index=19&type=section&id=Contingent%20Liabilities) As of June 30, 2025, the Group had no significant contingent liabilities - As of June 30, 2025, the Group had no significant contingent liabilities[51](index=51&type=chunk) [Events After Reporting Period](index=19&type=section&id=Events%20After%20Reporting%20Period) As of the announcement date, no significant post-reporting period events have materially impacted the Group's business and financial performance - As of the announcement date, no significant post-reporting period events have materially impacted the Group's business and financial performance[52](index=52&type=chunk) [Restatement](index=19&type=section&id=Restatement) The Group restated comparative information for the six months ended June 30, 2024, reclassifying certain listed and unlisted equity securities to financial assets at fair value through profit or loss due to a change in investment strategy and accounting standards - The Group reclassified certain listed equity securities as financial assets at fair value through profit or loss, reflecting a change in investment strategy to actively trade for short-term gains[54](index=54&type=chunk) - Investments in unlisted equity securities with put options were reclassified as financial assets at fair value through profit or loss, as they do not meet the definition of equity instruments under HKAS 32[55](index=55&type=chunk) Impact on Condensed Consolidated Interim Statement of Profit or Loss and Other Comprehensive Income for the Six Months Ended June 30, 2024 | Item | Previously Reported (RMB '000) | Prior Period Adjustment (RMB '000) | Restated (RMB '000) | | :--- | :--- | :--- | :--- | | Other Income, Other Costs and Net Other Gains | 872 | (3) | 869 | | Operating Loss | (3,852) | (3) | (3,855) | | Loss for the Period | (4,181) | (3) | (4,184) | | Other Comprehensive Expense for the Period | (18) | 3 | (15) | Impact on Condensed Consolidated Interim Statement of Cash Flows for the Six Months Ended June 30, 2024 | Item | Previously Reported (RMB '000) | Prior Period Adjustment (RMB '000) | Restated (RMB '000) | | :--- | :--- | :--- | :--- | | Purchase of Financial Assets at Fair Value Through Other Comprehensive Income | (15,416) | 15,416 | – | | Purchase of Financial Assets at Fair Value Through Profit or Loss | – | (15,416) | (15,416) | [Management Discussion and Analysis](index=21&type=section&id=Management%20Discussion%20and%20Analysis) This section reviews the Group's business and financial performance for the first half of 2025, highlighting revenue growth, strategic initiatives, future outlook, and key financial risks [Business Review](index=21&type=section&id=Business%20Review) For the first half of 2025, the Group achieved robust financial performance with revenue of RMB 127.5 million, an 84.5% increase, and an improved gross profit margin of 18.0%, driven by infrastructure demand and strategic partnerships - The Group achieved revenue of **RMB 127.5 million** in the first half of 2025, an increase of **84.5%** compared to the corresponding period[58](index=58&type=chunk) - Gross profit margin increased from **9.2%** in the corresponding period to **18.0%** in the current period, primarily due to economies of scale and strategic cost management[58](index=58&type=chunk) - Established a strategic partnership with Anhui Conch Cement Company Limited to ensure a continuous and stable supply of core production materials[59](index=59&type=chunk) [Financial Review](index=22&type=section&id=Financial%20Review) The Group's revenue significantly increased by 84.5% to RMB 127.5 million, gross profit grew by 263.5%, and a net profit of RMB 6.4 million was recorded, with new bank borrowings of RMB 49.5 million - Revenue significantly increased by approximately **RMB 58.4 million** or **84.5%** to approximately **RMB 127.5 million** for the period, primarily due to accelerated regional infrastructure development and a recovery in construction activities[61](index=61&type=chunk) - Gross profit significantly increased by approximately **RMB 16.6 million**, a **263.5%** growth, with gross profit margin improving from **9.2%** to **18.0%**, primarily due to enhanced production capacity, strategic procurement, and prudent project selection[62](index=62&type=chunk) - Administrative expenses increased by **24.4%** to **RMB 16.3 million**, mainly due to the resumption of normal business operations and strategic investments in administrative support projects[64](index=64&type=chunk) - Net profit of approximately **RMB 6.4 million** was recorded for the period, compared to a net loss of approximately **RMB 4.2 million** in the corresponding period[65](index=65&type=chunk) - Bank borrowings as of June 30, 2025, amounted to approximately **RMB 49.5 million**, an increase from December 31, 2024[66](index=66&type=chunk) [Prospects](index=23&type=section&id=Prospects) The Group will capitalize on infrastructure demand in Nantong, focusing on large-scale projects, leveraging strategic partnerships for stable raw material supply and cost optimization, and implementing smart manufacturing solutions to enhance efficiency and cash flow - The Group will continue to leverage the recovering infrastructure demand in Nantong and surrounding areas, focusing on large-scale transportation and urban renewal projects[67](index=67&type=chunk) - Leveraging the strategic partnership with Conch Cement to ensure stable raw material supply and cost optimization, aiming to further enhance gross profit margins while expanding production capacity[67](index=67&type=chunk) - Will implement smart manufacturing solutions to improve operational efficiency, strictly manage working capital, and maintain healthy cash flow[67](index=67&type=chunk) [Employment and Remuneration Policy](index=23&type=section&id=Employment%20and%20Remuneration%20Policy) As of June 30, 2025, the Group employed approximately 46 full-time employees and 150 outsourced workers, with total staff costs of RMB 7.2 million, and provides compensation based on roles, responsibilities, and performance - As of June 30, 2025, the Group employed approximately **46** full-time employees and **150** outsourced workers, with total staff costs of approximately **RMB 7.2 million**[68](index=68&type=chunk) - Remuneration is determined based on job scope, responsibilities, and performance, with discretionary bonuses and employer's liability insurance provided[69](index=69&type=chunk) - Employees and outsourced workers receive internal training on quality control, environmental protection, health, and workplace safety policies[71](index=71&type=chunk) [Liquidity and Financial Resources](index=24&type=section&id=Liquidity%20and%20Financial%20Resources) As of June 30, 2025, the Group had cash and cash equivalents of RMB 23.2 million, borrowings of RMB 49.5 million, a gearing ratio of 24.4%, a current ratio of 1.7 times, and net current assets of RMB 83.5 million | Metric | As of June 30, 2025 | As of December 31, 2024 | | :--- | :--- | :--- | | Cash and Cash Equivalents (RMB million) | 23.2 | 6.0 | | Borrowings (RMB million) | 49.5 | – | | Gearing Ratio | 24.4% | 0% | | Current Ratio | 1.7 times | 1.9 times | | Net Current Assets (RMB million) | 83.5 | 74.1 | [Market Risk](index=24&type=section&id=Market%20Risk) The Group faces market risks from changes in exchange rates, interest rates, and stock prices that could affect profitability, which management actively manages and monitors - Market risk is the risk that changes in market prices (such as exchange rates, interest rates, and equity prices) will affect the Group's profitability or its ability to achieve its business objectives[75](index=75&type=chunk) [Exchange Rate Risk](index=24&type=section&id=Exchange%20Rate%20Risk) The Group's operations primarily use RMB and HKD, with non-RMB denominated assets and liabilities mainly in HKD, and while there is no hedging policy, directors deem exchange rate risk not significant - The Group's operations primarily use RMB and HKD, with non-RMB denominated assets and liabilities mainly comprising HKD-denominated cash and cash equivalents and other payables[76](index=76&type=chunk) - The Group currently has no foreign currency hedging policy but closely monitors relevant foreign currency exchange rates to manage its foreign currency risk, and the Directors consider exchange rate risk not significant[77](index=77&type=chunk) [Material Investments, Acquisitions and Disposals](index=25&type=section&id=Material%20Investments,%20Acquisitions%20and%20Disposals) In January 2024, the Group acquired a 5% equity interest in Zhejiang Erge Technology Co., Ltd for RMB 15,107,500, with its fair value at RMB 15,814,000 as of June 30, 2025 - On January 18, 2024, the Group acquired a **5%** equity interest in Zhejiang Erge Technology Co., Ltd for **RMB 15,107,500**, a company primarily engaged in cooling systems for renewable energy generation equipment[78](index=78&type=chunk) - As of June 30, 2025, the fair value of the Group's interest in Zhejiang Erge was approximately **RMB 15,814,000**, representing approximately **4.9%** of the Group's total assets[79](index=79&type=chunk) [Pledge of Assets](index=25&type=section&id=Pledge%20of%20Assets) As of June 30, 2025, buildings valued at approximately RMB 12,207 thousand and land use rights of approximately RMB 10,614 thousand were pledged as collateral for the Group's borrowings - As of June 30, 2025, buildings of approximately **RMB 12,207,000** and land use rights of approximately **RMB 10,614,000** were pledged as collateral for the Group's borrowings[81](index=81&type=chunk) [Other Information](index=26&type=section&id=Other%20Information) This section provides other important information, including interim dividends, corporate governance practices, directors' securities dealings, and audit committee review [Interim Dividends](index=26&type=section&id=Interim%20Dividends) The Board does not recommend paying any interim dividend for the period, consistent with the prior year - The Board does not recommend paying any interim dividend for the period (six months ended June 30, 2024: nil)[83](index=83&type=chunk) [Purchase, Redemption or Sale of the Company's Listed Securities](index=26&type=section&id=Purchase,%20Redemption%20or%20Sale%20of%20the%20Company's%20Listed%20Securities) Neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed securities during the period, and held no treasury shares as of June 30, 2025 - Neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed securities during the period[84](index=84&type=chunk) [Code on Corporate Governance Practices](index=26&type=section&id=Code%20on%20Corporate%20Governance%20Practices) The company has adopted and complied with the Corporate Governance Code, except for the separation of Chairman and CEO roles, which the Board believes is adequately safeguarded - The company has adopted and complied with the Corporate Governance Code set out in Appendix C1 of the Listing Rules during the period, except for Code Provision C.2.1 (separation of the roles of Chairman and Chief Executive Officer)[85](index=85&type=chunk)[86](index=86&type=chunk) - Ms Wang Xianyu serves as both the Chairperson of the Board and the Chief Executive Officer of the Group, an arrangement the Board believes is in the Group's best interests and adequately safeguarded to balance power[86](index=86&type=chunk) [Model Code for Securities Transactions by Directors](index=27&type=section&id=Model%20Code%20for%20Securities%20Transactions%20by%20Directors) The company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers, and all directors confirmed compliance during the period - The company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers set out in Appendix C3 of the Listing Rules, and all Directors have confirmed compliance with the Code during the period[87](index=87&type=chunk) [Audit Committee](index=27&type=section&id=Audit%20Committee) The Audit Committee, comprising three independent non-executive directors, reviews and monitors financial reporting, risk management, and internal controls, and has reviewed the financial information in this interim results announcement - The Audit Committee comprises three independent non-executive Directors, whose primary responsibilities include reviewing and monitoring the Group's financial reporting process, risk management, and internal control systems[88](index=88&type=chunk) - The financial information in this interim results announcement has not been audited by the company's external auditors but has been reviewed by the Audit Committee[89](index=89&type=chunk) [Publication of Unaudited Interim Report](index=27&type=section&id=Publication%20of%20Unaudited%20Interim%20Report) The company's 2025 interim report will be published in due course on the HKEXnews website and the company's website - The company's 2025 interim report will be published in due course on the HKEXnews website www.hkexnews.hk and the company's website www.tailamgroup.com[90](index=90&type=chunk) [Acknowledgement](index=27&type=section&id=Acknowledgement) The Board extends its sincere gratitude to shareholders, management, all employees, customers, and business partners, acknowledging them as the cornerstone of the company's success - The Board extends its sincere gratitude to shareholders, management, all employees, customers, and business partners, acknowledging them as the cornerstone of the company's success[91](index=91&type=chunk) [Board of Directors Information](index=27&type=section&id=Board%20of%20Directors%20Information) As of the announcement date, the Board comprises Executive Directors Ms Wang Xianyu (Chairperson and CEO), Mr Wang Chaowei, and Ms Jiang Yin Juan; Non-executive Director Mr Wang Liangyou; and Independent Non-executive Directors Ms Huang Xiaoyan, Mr Li Zhenyu, and Mr Cui Yushu - Executive Directors are Ms Wang Xianyu (Chairperson and CEO), Mr Wang Chaowei, and Ms Jiang Yin Juan; Non-executive Director is Mr Wang Liangyou; Independent Non-executive Directors are Ms Huang Xiaoyan, Mr Li Zhenyu, and Mr Cui Yushu[93](index=93&type=chunk)

中期報告 Interim Report 2025 目錄 CONTENTS | 2 | 公司資料 | Corporate Information | | --- | --- | --- | | 5 | 主席報告 | Chairman's Statement | | 13 | 管理層討論與分析 | Management Discussion and Analysis | | 24 | 綜合損益表 | Consolidated Income Statement | | 25 | 綜合損益及其他全面收益表 | Consolidated Statement of Profit or Loss and | | | | Other Comprehensive Income | | 26 | 綜合財務狀況表 | Consolidated Statement of Financial Position | | 28 | 綜合權益變動表 | Consolidated Statement of Changes in Equity | | 29 | 簡明綜合現金流量表 | Condensed Consolidated Stateme ...