有關截至二零一七年至 二零二四年十二月三十一日止年度年報 之補充公告 茲提述富通科技發展控股有限公司（「本公司」，連同其附屬公司統稱「本集團」）截至二零 一七年至二零二四年十二月三十一日止年度之年報（「該等年報」）。除文義另有所指外， 本公告所用詞彙與該等年報所界定者具有相同涵義。 董事會謹此根據上市規則附錄D2（「附錄D2」）第24段提供以下有關本公司前任行政總裁趙 偉先生（「趙先生」，於二零一七年十一月十七日獲委任，並自二零二四年二月一日辭任） 之酬金的補充資料。 香港交易及結算所有限公司及香港聯合交易所有限公司對本公告之內容概不負責，對其 準確性或完整性亦不發表任何聲明，並明確表示概不就因本公告全部或任何部份內容而 產生或因倚賴該等內容而引致之任何損失承擔任何責任。 Futong Technology Development Holdings Limited 465 趙先生於截至二零一七年至二零二四年十二月三十一日止各年度就任職本公司行政總裁 之酬金載列如下： | | | | 以股份為 | 界定供款 | | | --- | --- | --- | --- | --- | --- | | 行政總裁 | 袍 ...

於開曼群島註冊成立之有限公司 2025 中期報告 2025 中期報告 公司資料 董事會 主席兼非執行董事 艾樂德BA, MA, MA, PhD 執行董事 蘇慰國BSc, PhD 首席執行官兼首席科學官 鄭澤鋒BEc, CA(ANZ) 首席財務官 非執行董事 施熙德BSE, MA, MA, EdM, Solicitor, FCG, HKFCG 楊凌BA, BSc, MBA 獨立非執行董事 莫樹錦BMSc, MD, FRCPC, FHKCP, FHKAM, FRCP(Edin), FASCO (1) 高級兼首席獨立非執行董事 言思雅MBBS, MBA 卡博樂BA, FCMA (2) 胡朝紅BSc, PhD 蓆紀倫BCom, CA(ANZ), FCPA (3) 黃德偉BCom, FCPA, CA(ANZ) 審核委員會 蓆紀倫 （主席） (3) 黃德偉 （主席） (4) 言思雅 卡博樂 (2) 胡朝紅 (5) 提名委員會 莫樹錦 （主席） 艾樂德 胡朝紅 蓆紀倫 (3) 附註： (1) 於 2025年 5月 13日獲委任為高級兼首席獨立非執行董事 薪酬委員會 卡博樂 （主席） (2) 言思雅 （主席） (6) 蓆紀倫 ...

[Company Information](index=3&type=section&id=Company%20Information) [Company Information Overview](index=3&type=section&id=Company%20Information%20Overview) This section provides basic administrative information about Kiddieland International Company Limited, including board members, committee composition, company secretary, auditor, principal bankers, registered office, and share registrar - Ms. Lo Siu Shan was appointed Chairman on June 28, 2025, and Ms. Sin Lo Siu Wai serves as Chief Executive Officer[4](index=4&type=chunk) - Mr. Sit Hon Wing chairs the Audit Committee, Mr. Cheng Tsz Lung chairs the Remuneration Committee, and Mr. Man Ka Ho chairs the Nomination Committee[4](index=4&type=chunk) - The company's auditor is PricewaterhouseCoopers, and its principal banker is The Hongkong and Shanghai Banking Corporation Limited[4](index=4&type=chunk) - The company's website is www.kiddieland.com.hk, and its stock code is 3830[5](index=5&type=chunk) [Chairman's Statement](index=4&type=section&id=Chairman's%20Statement) [Annual Results Review and Outlook](index=4&type=section&id=Annual%20Results%20Review%20and%20Outlook) The Chairman's Statement reviews the Group's operating performance for the year ended April 30, 2025, noting decreased revenue in toy and laboratory equipment businesses due to a weak global economy, but reduced net loss through cost control, and expresses confidence in the future potential of the laboratory equipment business - Global economic downturn led to consumer downgrading, with consumers prioritizing price-value propositions, impacting toy business revenue and average selling prices[6](index=6&type=chunk) 2025 Fiscal Year Business Revenue Changes | Business Segment | 2025 Revenue (Million HKD) | 2024 Revenue (Million HKD) | Year-on-Year Change | Change Rate | | :--------------- | :------------------------- | :------------------------- | :------------------ | :---------- | | Toy Business | 146.3 | 155.7 | -9.4 | -6.0% | | Lab Equipment Business | 50.5 | 59.5 | -9.0 | -15.1% | | **Group Total Revenue** | **196.9** | **215.1** | **-18.2** | **-8.5%** | - Despite sales decline, the toy business achieved profitability through significant cost cutting and expense control[6](index=6&type=chunk) - Laboratory equipment business revenue decreased due to the National Development and Reform Commission's new plan causing local government investment projects to be put on hold, but the company remains confident in its future potential[7](index=7&type=chunk) - The Group's net loss decreased from approximately **HKD 7.3 million in 2024** to approximately **HKD 7.0 million in 2025**, primarily due to cost control and expense reduction[7](index=7&type=chunk) [Management Discussion and Analysis](index=5&type=section&id=Management%20Discussion%20and%20Analysis) [Business Review](index=5&type=section&id=Business%20Review) This section details the performance of the toy and laboratory equipment businesses, highlighting the toy business's profitability despite tariff impacts and the laboratory equipment business's engagement in government education equipment renovation plans for future growth - The toy business achieved profitability after transitioning to an asset-light outsourcing model, but revenue decreased by **6.0% to approximately HKD 146.3 million** due to US tariff issues[9](index=9&type=chunk) - Kiddieland Technology (laboratory equipment business) actively aligned with China's education policy, investing in R&D for smart laboratory products like AI scoring systems, and successfully won bids for laboratory renovation projects in Jiangxi and Hubei provinces[9](index=9&type=chunk)[10](index=10&type=chunk) - Laboratory equipment business revenue decreased by **15.1% to approximately HKD 50.5 million**, mainly because the National Development and Reform Commission's new policy led to the temporary suspension of local government investment projects[11](index=11&type=chunk) - The Group's total revenue decreased by **8.5% to approximately HKD 196.9 million**, and the net loss attributable to owners of the Company decreased to approximately **HKD 7.0 million**, primarily due to a significant reduction in administrative expenses[11](index=11&type=chunk) [Financial Review](index=5&type=section&id=Financial%20Review) This section analyzes the Group's financial performance, including revenue by region, gross profit, expenses, tax, net loss, and liquidity, revealing decreased revenue, significantly reduced administrative expenses, and changes in current ratio and net current assets Revenue by Region Changes | Region | 2025 Revenue (Million HKD) | 2024 Revenue (Million HKD) | Year-on-Year Change | Change Rate | | :----- | :------------------------- | :------------------------- | :------------------ | :---------- | | North America | 82.7 | 92.5 | -9.8 | -10.6% | | Europe | 47.4 | 48.1 | -0.7 | -1.5% | | Lab Equipment Business | 50.5 | 59.5 | -9.0 | -15.1% | | **Group Total Revenue** | **196.9** | **215.1** | **-18.2** | **-8.5%** | - North American revenue decline was primarily due to reduced revenue in the most developed local countries, a shift in product mix towards lower-priced products, and delayed or canceled orders due to US tariff policies[12](index=12&type=chunk) - European revenue slightly decreased, mainly affected by the economic downturn in Eastern Europe due to the Russia-Ukraine war and reduced purchasing power from USD appreciation[13](index=13&type=chunk) - The Group's gross profit decreased by **10.1% to approximately HKD 29.4 million**, mainly due to reduced revenue, increased manufacturing costs in the laboratory equipment business, and inventory impairment provisions[16](index=16&type=chunk) - Administrative expenses significantly decreased by **23.1% to approximately HKD 22.0 million**, primarily due to reduced administrative staff costs in the laboratory equipment business and operating lease expenses in the toy business[18](index=18&type=chunk) - The Group recorded a net loss attributable to owners of the Company of approximately **HKD 7.0 million** (2024: HKD 7.3 million), with the reduction in loss mainly attributable to a significant decrease in administrative expenses[21](index=21&type=chunk) Liquidity Indicators | Indicator | April 30, 2025 (Thousand HKD) | April 30, 2024 (Thousand HKD) | Year-on-Year Change | | :-------- | :---------------------------- | :---------------------------- | :------------------ | | Inventories | 8,538 | 9,831 | -1,293 | | Trade Receivables | 8,333 | 8,731 | -398 | | Trade and Bills Payables | 6,453 | 4,908 | +1,545 | | Cash and Cash Equivalents | 7,000 | 7,300 | -300 | | Current Ratio | 1.0 | 1.1 | -0.1 | | Net Current Assets | 0.3 | 3.4 | -3.1 | | Unutilized Bank Credit Facilities | 69.1 Million HKD | 212.1 Million HKD | -143.0 | [Foreign Currency Risk](index=8&type=section&id=Foreign%20Currency%20Risk) The Group's toy business is primarily denominated in HKD and USD, while the laboratory equipment business is in RMB; management considers USD risk low due to the HKD peg but will closely monitor RMB movements - Toy business sales, purchases, and expenses are mainly denominated in HKD and USD, while the laboratory equipment business is denominated in RMB[26](index=26&type=chunk) - Due to the HKD peg to the USD, foreign exchange risk from the USD is expected to be minimal, but RMB movements will be closely monitored[27](index=27&type=chunk) - As of April 30, 2025, the Group had not entered into any financial instruments to hedge foreign currencies[28](index=28&type=chunk) [Employees and Remuneration Policy](index=8&type=section&id=Employees%20and%20Remuneration%20Policy) The Group employs 109 full-time staff in Hong Kong and China, with remuneration based on performance, experience, and industry practice, maintaining stable management and administrative personnel - As of April 30, 2025, the Group employed 109 full-time management, administrative, and production personnel in Hong Kong and China[29](index=29&type=chunk) - Remuneration is based on individual performance, experience, and current industry practice, with the number of production factory workers fluctuating seasonally and management and administrative personnel remaining stable[29](index=29&type=chunk) [Environmental, Social and Corporate Responsibility](index=8&type=section&id=Environmental,%20Social%20and%20Corporate%20Responsibility) The Group is committed to environmental sustainability, integrating social responsibility into daily operations, and actively implementing eco-friendly measures like solar panels and energy-saving devices in its China factory - The Group is committed to achieving environmental sustainability, integrating social responsibility into daily operations, and implementing corporate social responsibility strategies[30](index=30&type=chunk) - The China factory has installed solar panels and energy-saving devices for machinery, and implements environmental measures such as recycling and using recycled paper[30](index=30&type=chunk) - Details of the Environmental, Social and Governance Report are provided on pages 30 to 56 of this annual report[31](index=31&type=chunk) [Material Investments Held](index=8&type=section&id=Material%20Investments%20Held) The Group held no other material investments during the reporting period, apart from investments in subsidiaries - Apart from investments in subsidiaries, the Group held no other material investments during the year[32](index=32&type=chunk) [Capital Commitments](index=8&type=section&id=Capital%20Commitments) As of the end of the reporting period, the Group had no contracted but unprovided commitments for the acquisition of property, plant, and equipment in the consolidated financial statements - As of April 30, 2025, the Group had no commitments for the acquisition of property, plant, and equipment that were contracted but not yet provided for in the consolidated financial statements[33](index=33&type=chunk) [Contingent Liabilities](index=8&type=section&id=Contingent%20Liabilities) As of the end of the reporting period, the Group had no other significant contingent liabilities - As of April 30, 2025, the Group had no other significant contingent liabilities[34](index=34&type=chunk) [Outlook/Future Prospects and Strategies](index=9&type=section&id=Outlook%2FFuture%20Prospects%20and%20Strategies) The Group plans to navigate an unstable global economy by innovating in toys, enhancing supply chain resilience, and expanding online, while Kiddieland Technology will focus on system optimization, product innovation, market expansion, and cost reduction in laboratory equipment to seize education sector opportunities - The global economic situation is unstable, geopolitical tensions are high, and US tariffs affect consumer spending sentiment, leading to increased freight costs and extended delivery cycles[35](index=35&type=chunk) - Kiddieland will continue to develop creative, high-quality, and competitive licensed toy products, and plans to establish warehousing facilities in the US to enhance supply chain resilience and expand online business[35](index=35&type=chunk)[36](index=36&type=chunk) - Kiddieland Technology (laboratory equipment business) will focus on four key areas: business systems (regular business and NDRC projects), product optimization and technological innovation, market expansion, and cost reduction and efficiency improvement[36](index=36&type=chunk)[39](index=39&type=chunk) - Kiddieland Technology's experimental teaching management system, AI experimental operation examination system, and teacher demonstration system have been incorporated into the Ministry of Education's new configuration standards, expected to significantly increase its market share in high school laboratory equipment[36](index=36&type=chunk) - Kiddieland Technology will continue to participate in laboratory renovation projects by the NDRC in multiple provinces and cities, involving funds of approximately **RMB 1.357 billion**[36](index=36&type=chunk) - The company will reduce R&D and operation and maintenance costs through modular design and cloud service support systems, improving customer issue response time by **30%**[39](index=39&type=chunk) [Directors and Senior Management](index=10&type=section&id=Directors%20and%20Senior%20Management) [Executive Directors](index=10&type=section&id=Executive%20Directors) This section introduces the Group's four executive directors, including the new Chairman Ms. Lo Siu Shan and CEO Ms. Sin Lo Siu Wai, along with Mr. Lo Hung and Ms. Leung Siu Lin, detailing their extensive experience in the toy industry and respective responsibilities - Ms. Lo Siu Shan (53) was appointed Chairman effective June 28, 2025, responsible for product cost calculation, pricing, factory audits, and procurement activities, with over **22 years of experience** in the toy industry[40](index=40&type=chunk) - Ms. Sin Lo Siu Wai (50) is the Chief Executive Officer, responsible for overseeing the Group's overall business operations, sales and marketing, licensing relationships, and product development, with over **25 years of experience** in the toy industry[41](index=41&type=chunk) - Mr. Lo Hung (81) is responsible for overseeing the daily operations of the Dongguan production factory in China and managing product development personnel, with over **58 years of experience** in the toy industry[42](index=42&type=chunk) - Ms. Leung Siu Lin (79) is responsible for managing the Group's overall financial matters and overseeing monthly shipments, with over **54 years of experience** in the toy industry[43](index=43&type=chunk) [Independent Non-Executive Directors](index=12&type=section&id=Independent%20Non-Executive%20Directors) This section lists the Group's three independent non-executive directors: Mr. Man Ka Ho, Mr. Cheng Tsz Lung, and Mr. Sit Hon Wing, briefly outlining their professional backgrounds and committee roles within the company - Mr. Man Ka Ho (48) is an Independent Non-Executive Director, also serving as Chairman of the Nomination Committee and a member of the Audit and Remuneration Committees, with over **18 years of experience** in the legal field[45](index=45&type=chunk) - Mr. Cheng Tsz Lung (53) is an Independent Non-Executive Director, also serving as Chairman of the Remuneration Committee and a member of the Audit and Nomination Committees, and previously worked as a management consultant at Ernst & Young[45](index=45&type=chunk) - Mr. Sit Hon Wing (48) is an Independent Non-Executive Director, also serving as Chairman of the Audit Committee and a member of the Remuneration and Nomination Committees, with over **22 years of experience** as a financial controller and company secretary[46](index=46&type=chunk) [Senior Management](index=12&type=section&id=Senior%20Management) This section introduces the Group's two senior management members: Mr. Cheung Ka Cheong, Financial Controller and Company Secretary, and Ms. Chong Lai Ni, Sales Director, outlining their respective responsibilities and professional experience - Mr. Cheung Ka Cheong (38) is the Financial Controller and Company Secretary, overseeing the accounting department, preparing financial statements, and maintaining banking relationships, with over **16 years of accounting experience**[47](index=47&type=chunk) - Ms. Chong Lai Ni (57) is the Sales Director, primarily responsible for product sales activities to customers in North America, Europe, Japan, and Australia, with over **31 years of experience** in the toy industry[47](index=47&type=chunk) [Directors' Report](index=13&type=section&id=Directors'%20Report) [Principal Activities](index=13&type=section&id=Principal%20Activities) The Group primarily engages in the manufacturing and distribution of plastic toy products (including outdoor sports toys, infant and preschool toys) and laboratory equipment, with products sold in local and overseas markets - The Company primarily engages in the manufacturing and distribution of plastic toy products (outdoor sports toys, infant and preschool toys) and laboratory equipment[49](index=49&type=chunk) - Products are distributed to local and overseas markets[49](index=49&type=chunk) [Results and Appropriations](index=13&type=section&id=Results%20and%20Appropriations) The Group's results for the year ended April 30, 2025, are presented in the consolidated statement of comprehensive income, and the Board resolved not to declare any final or interim dividends - The Group's results for the year ended April 30, 2025, are presented in the consolidated statement of comprehensive income on pages 62 to 63 of this annual report[51](index=51&type=chunk) - The Board resolved not to declare any final dividend for the year ended April 30, 2025, or any interim dividend for the six months ended October 31, 2024[52](index=52&type=chunk) [Dividend Policy](index=13&type=section&id=Dividend%20Policy) The Company has adopted a dividend policy to allow shareholders to share profits while retaining reserves for future development, with dividend declarations at the Board's discretion, considering various financial and market factors - The Company adopted a dividend policy aimed at allowing shareholders to share profits while retaining reserves for future development[53](index=53&type=chunk) - The Board will consider factors such as actual and expected financial performance, retained earnings, working capital requirements, liquidity position, economic conditions, and legal restrictions when determining dividends[53](index=53&type=chunk)[54](index=54&type=chunk) [Closure of Register of Members to Determine Entitlement to Attend and Vote at Annual General Meeting](index=14&type=section&id=Closure%20of%20Register%20of%20Members%20to%20Determine%20Entitlement%20to%20Attend%20and%20Vote%20at%20Annual%20General%20Meeting) To determine shareholders' eligibility to attend the Annual General Meeting on September 26, 2025, the Company will close its register of members from September 24 to 26, 2025, requiring shareholders to register by 4:30 p.m. on September 23, 2025 - To determine shareholders' eligibility to attend the Annual General Meeting on September 26, 2025, the register of members will be closed from September 24 to 26, 2025[55](index=55&type=chunk) - Shareholders must submit transfer forms and share certificates to Tricor Investor Services Limited for registration no later than 4:30 p.m. on September 23, 2025[55](index=55&type=chunk) [Business Review](index=14&type=section&id=Business%20Review) Details of the Group's business review are provided in the "Management Discussion and Analysis" section on page 4 of this annual report - The Group's business review is provided in the "Management Discussion and Analysis" section on page 4 of this annual report[56](index=56&type=chunk) [Financial Summary](index=14&type=section&id=Financial%20Summary) A summary of the Group's published results, assets, and liabilities for the past five financial years is presented on page 128 of this annual report - A summary of the Group's published results, assets, and liabilities for the past five financial years is presented on page 128 of this annual report[57](index=57&type=chunk) [Share Capital](index=14&type=section&id=Share%20Capital) Details of changes in the Company's share capital are provided in Note 24 to the consolidated financial statements - Details of changes in the Company's share capital are provided in Note 24 to the consolidated financial statements[58](index=58&type=chunk) [Reserves](index=14&type=section&id=Reserves) Details of changes in the Group's and the Company's reserves during the year are presented in the consolidated statement of changes in equity, Note 25, and Note 35 to the consolidated financial statements - Details of changes in the Group's and the Company's reserves during the year are presented in the consolidated statement of changes in equity, Note 25, and Note 35 to the consolidated financial statements[59](index=59&type=chunk) - Distributable reserves are presented in Note 25 to the consolidated financial statements[60](index=60&type=chunk) [Donations](index=14&type=section&id=Donations) The Group made no charitable donations for the year ended April 30, 2025 - The Group made no charitable donations for the year ended April 30, 2025 (2024: Nil)[61](index=61&type=chunk) [Bank Loans](index=14&type=section&id=Bank%20Loans) Details of the Group's bank loans and other borrowings as of April 30, 2025, are provided in Note 27 to the consolidated financial statements - Details of the Group's bank loans and other borrowings as of April 30, 2025, are provided in Note 27 to the consolidated financial statements[62](index=62&type=chunk) [Property, Plant and Equipment](index=14&type=section&id=Property,%20Plant%20and%20Equipment) Changes in the Group's property, plant, and equipment during the year are presented in Note 17 to the consolidated financial statements - Changes in the Group's property, plant, and equipment during the year are presented in Note 17 to the consolidated financial statements[63](index=63&type=chunk) [Subsidiaries](index=15&type=section&id=Subsidiaries) Details of the Company's principal subsidiaries as of April 30, 2025, are provided in Note 34 to the consolidated financial statements - Details of the Company's principal subsidiaries as of April 30, 2025, are provided in Note 34 to the consolidated financial statements[64](index=64&type=chunk) [Major Customers and Suppliers](index=15&type=section&id=Major%20Customers%20and%20Suppliers) The Group's sales are highly concentrated among its top five customers, accounting for 30.9% of total sales, while purchases are highly concentrated among its top five suppliers, accounting for 78.8% of total purchases Major Customers and Suppliers Proportion | Category | Proportion | | :------- | :--------- | | Largest Customer | 7.5% | | Top Five Customers Total | 30.9% | | Largest Supplier | 51.6% | | Top Five Suppliers Total | 78.8% | [Pre-emptive Rights](index=15&type=section&id=Pre-emptive%20Rights) There are no provisions in the Company's articles of association or Cayman Islands law requiring the Company to offer new shares proportionally to existing shareholders - There are no provisions in the Company's articles of association or Cayman Islands law regarding pre-emptive rights[66](index=66&type=chunk) [Directors](index=15&type=section&id=Directors) This section lists the Board members as of the reporting date and notes that Ms. Lo Siu Shan, Mr. Cheng Tsz Lung, and Mr. Sit Hon Wing will retire and be eligible for re-election at the upcoming Annual General Meeting - Ms. Lo Siu Shan was appointed Chairman on June 28, 2025, and Mr. Lo Hung resigned as Chairman on June 27, 2025[67](index=67&type=chunk) - Ms. Lo Siu Shan, Mr. Cheng Tsz Lung, and Mr. Sit Hon Wing will retire at the upcoming Annual General Meeting and are eligible for re-election[67](index=67&type=chunk) [Biographical Details of Directors, Senior Management and Company Secretary](index=16&type=section&id=Biographical%20Details%20of%20Directors,%20Senior%20Management%20and%20Company%20Secretary) Biographical details of the Company's directors, the Group's senior management, and the Company Secretary are provided on pages 10 to 11 of this annual report - Biographical details of the Company's directors, the Group's senior management, and the Company Secretary are provided on pages 10 to 11 of this annual report[68](index=68&type=chunk) [Directors' Service Agreements](index=16&type=section&id=Directors'%20Service%20Agreements) Executive directors entered into renewed three-year service agreements on September 20, 2023, and independent non-executive directors also have three-year appointment letters, with all appointments subject to rotation provisions - Each executive director entered into a renewed three-year service agreement with the Company on September 20, 2023[69](index=69&type=chunk) - Independent non-executive directors Mr. Man Ka Ho, Mr. Cheng Tsz Lung, and Mr. Sit Hon Wing also have three-year appointment letters, with an annual director's fee of **HKD 60,000**[69](index=69&type=chunk) - All directors' appointments are subject to the provisions of the articles of association regarding directors' retirement by rotation[69](index=69&type=chunk) [Changes in Directors' Information](index=16&type=section&id=Changes%20in%20Directors'%20Information) Mr. Sit Hon Wing was appointed as an executive director of Tian誉 Property (Holdings) Limited on February 18, 2025, in accordance with Listing Rule 13.51B(1) - Mr. Sit Hon Wing was appointed as an executive director of Tian誉 Property (Holdings) Limited (stock code: 0059), a company listed on the Stock Exchange, on February 18, 2025[70](index=70&type=chunk) [Remuneration Policy](index=16&type=section&id=Remuneration%20Policy) The Group's employee remuneration policy is set by the Board and reviewed by the Remuneration Committee, while directors' remuneration is determined by the Board and reviewed by the Remuneration Committee, with a share option scheme adopted to incentivize directors and eligible employees - The Group's employee remuneration policy is formulated by the Board and reviewed by the Remuneration Committee with reference to their merits, qualifications, and abilities[71](index=71&type=chunk) - The remuneration of the Company's directors is determined by the Board and reviewed by the Remuneration Committee, with reference to operating results, individual performance, and market statistics[72](index=72&type=chunk) - The Company has adopted a share option scheme to incentivize its directors and eligible employees[73](index=73&type=chunk) [Retirement Benefit Schemes](index=17&type=section&id=Retirement%20Benefit%20Schemes) The Group participates in a Mandatory Provident Fund Scheme for employees of its Hong Kong subsidiaries, and employees of its China subsidiaries are members of retirement schemes implemented by the Chinese government - The Group participates in a Mandatory Provident Fund Scheme for employees of its Hong Kong subsidiaries[74](index=74&type=chunk) - Employees of China subsidiaries are members of retirement schemes implemented by the Chinese government, and the company is required to make contributions at a certain percentage[74](index=74&type=chunk) [Permitted Indemnity Provision](index=17&type=section&id=Permitted%20Indemnity%20Provision) According to the articles of association, each director is entitled to be indemnified out of the Company's assets for all losses or liabilities incurred or arising from the performance of their duties or other related matters - According to the articles of association, each director is entitled to be indemnified out of the Company's assets for all losses or liabilities incurred or arising from the performance of their duties or other related matters[75](index=75&type=chunk) [Directors' Interests in Competing Business](index=17&type=section&id=Directors'%20Interests%20in%20Competing%20Business) As of April 30, 2025, no director held any interest in any business directly or indirectly competing or likely to compete with the Group's business, other than the Group's own operations - As of April 30, 2025, no director held any interest in any business directly or indirectly competing or likely to compete with the Group's business[76](index=76&type=chunk) [Directors' Material Interests in Transactions, Arrangements or Contracts Significant to the Company's Business](index=17&type=section&id=Directors'%20Material%20Interests%20in%20Transactions,%20Arrangements%20or%20Contracts%20Significant%20to%20the%20Company's%20Business) Except for related party transactions disclosed in Note 32 to the consolidated financial statements, no director and/or any of their associates had a material interest, directly or indirectly, in any transaction, arrangement, or contract significant to the Group's business - Except for related party transactions disclosed in Note 32 to the consolidated financial statements, no director and/or any of their associates had a material interest, directly or indirectly, in any transaction, arrangement, or contract significant to the Group's business[77](index=77&type=chunk) [Related Party Transactions](index=17&type=section&id=Related%20Party%20Transactions) Details of related party transactions entered into by the Group for the year ended April 30, 2025, are provided in Note 32 to the consolidated financial statements - Details of related party transactions entered into by the Group for the year ended April 30, 2025, are provided in Note 32 to the consolidated financial statements[78](index=78&type=chunk) [Continuing Connected Transactions](index=17&type=section&id=Continuing%20Connected%20Transactions) The Company renewed an office lease agreement with Dragon Enterprise Investment Limited, which constitutes a continuing connected transaction and has been confirmed by the independent auditor to comply with Listing Rule requirements - Kiddieland Toys Limited, a wholly-owned subsidiary of the Company, renewed an office lease agreement with Dragon Enterprise Investment Limited for a monthly rent of **HKD 120,000** for a period of **12 months**[79](index=79&type=chunk) - Dragon Enterprise Investment Limited is 50% owned by Executive Director Mr. Lo Hung and his spouse Ms. Leung Siu Lin, respectively, thus constituting a connected transaction[80](index=80&type=chunk) - The independent auditor confirmed no instances where continuing connected transactions were not approved by the Board, not entered into in accordance with the relevant agreements, or exceeded the annual caps[80](index=80&type=chunk) [Rights to Acquire Securities of the Company and Equity-linked Agreements](index=19&type=section&id=Rights%20to%20Acquire%20Securities%20of%20the%20Company%20and%20Equity-linked%20Agreements) Except for the share option scheme, neither the Company nor any of its holding companies or subsidiaries entered into any arrangements during the year that would entitle the Company's directors or chief executives or their respective associates to subscribe for securities of the Company or any associated corporation, or to benefit from acquiring shares or debentures of the Company or any other body corporate - Except for the share option scheme, neither the Company nor any of its holding companies or subsidiaries entered into any arrangements during the year that would entitle the Company's directors or chief executives or their respective associates to subscribe for securities of the Company or any associated corporation, or to benefit from acquiring shares or debentures of the Company or any other body corporate[82](index=82&type=chunk) [Directors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares and Debentures of the Company or any Associated Corporation](index=19&type=section&id=Directors'%20and%20Chief%20Executive's%20Interests%20and%20Short%20Positions%20in%20Shares,%20Underlying%20Shares%20and%20Debentures%20of%20the%20Company%20or%20any%20Associated%20Corporation) As of April 30, 2025, Ms. Sin Lo Siu Wai held 100% equity in associated corporation KLH Capital Limited; other than this, no director or chief executive held any disclosable interests or short positions in the shares, underlying shares, and debentures of the Company or its associated corporations Directors' Long Positions in Shares of Associated Corporations | Director Name | Capacity | Nature of Interest | Number of Shares (Ordinary Shares) | Approximate Percentage of Shareholding in KLH Capital | | :------------ | :------- | :----------------- | :--------------------------------- | :------------------------------------ | | Ms. Sin Lo Siu Wai | Beneficial Owner | Personal | 10,000 | 100% | - Except for the above disclosure, no director or chief executive of the Company held any interests or short positions in the shares, underlying shares, and debentures of the Company or any of its associated corporations that are required to be recorded in the register kept under Section 352 of the Securities and Futures Ordinance or to be notified to the Company and the Stock Exchange under the Model Code[83](index=83&type=chunk) [Substantial Shareholders' Interests and Short Positions in Shares and Underlying Shares of the Company](index=20&type=section&id=Substantial%20Shareholders'%20Interests%20and%20Short%20Positions%20in%20Shares%20and%20Underlying%20Shares%20of%20the%20Company) As of April 30, 2025, substantial shareholder KLH Capital held 75% of the Company's shares, wholly owned by Executive Director Ms. Sin Lo Siu Wai Substantial Shareholders' Long Positions in Shares | Shareholder Name | Capacity | Number of Shares (Ordinary Shares) | Approximate Percentage of Shareholding in the Company | | :--------------- | :------- | :--------------------------------- | :------------------------------------ | | KLH Capital | Beneficial Owner | 750,000,000 | 75% | - KLH Capital is 100% owned by Ms. Sin Lo Siu Wai, an executive director of the Company[84](index=84&type=chunk) [Share Option Scheme](index=20&type=section&id=Share%20Option%20Scheme) The Company adopted a share option scheme in 2017 to incentivize directors, employees, and other selected participants; the scheme is valid for 10 years, with no outstanding options as of April 30, 2025, and a total of 100,000,000 shares available for grant - The Company's share option scheme was approved and adopted by shareholders on August 31, 2017, to grant share options as incentives to directors, employees, or other selected participants[85](index=85&type=chunk) - For the years ended April 30, 2025, and 2024, no share options were granted, exercised, canceled, or lapsed, and there were no outstanding share options[85](index=85&type=chunk) - As of April 30, 2025, the total number of shares available for grant or to be issued upon exercise of all options under the scheme was **100,000,000 shares**, representing **10.0%** of the Company's total issued shares[85](index=85&type=chunk) - The share option scheme will be valid and effective for **10 years** from the date of adoption[89](index=89&type=chunk) - The subscription price for share options will be determined by the Board and shall be at least the highest of the closing price on the Stock Exchange on the offer date, the average closing price for the five business days immediately preceding the offer date, or the nominal value of the shares[91](index=91&type=chunk)[93](index=93&type=chunk) [Purchase, Sale or Redemption of Listed Securities](index=23&type=section&id=Purchase,%20Sale%20or%20Redemption%20of%20Listed%20Securities) For the year ended April 30, 2025, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities - For the year ended April 30, 2025, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[97](index=97&type=chunk) [Events After Reporting Period](index=23&type=section&id=Events%20After%20Reporting%20Period) As of the date of this report, no significant events occurred after April 30, 2025 - As of the date of this report, no significant events occurred after April 30, 2025[98](index=98&type=chunk) [Public Float](index=23&type=section&id=Public%20Float) Based on publicly available information and the directors' knowledge, the Company's public float has complied with Listing Rule requirements (i.e., not less than 25%) from the listing date to the date of this report - From the listing date to the date of this report, the Company's public float has complied with Listing Rule requirements (i.e., not less than **25%**)[99](index=99&type=chunk) [Corporate Governance](index=23&type=section&id=Corporate%20Governance) The Company's principal corporate governance practices are outlined in the "Corporate Governance Report" section on pages 23 to 29 of this annual report - The Company's principal corporate governance practices are outlined in the "Corporate Governance Report" section on pages 23 to 29 of this annual report[100](index=100&type=chunk) [Auditor](index=23&type=section&id=Auditor) PricewaterhouseCoopers audited the consolidated financial statements for the year ended April 30, 2025, and will retire at the upcoming Annual General Meeting but are eligible for re-appointment - The consolidated financial statements for the year ended April 30, 2025, were audited by PricewaterhouseCoopers[101](index=101&type=chunk) - PricewaterhouseCoopers will retire at the upcoming Annual General Meeting but are eligible for re-appointment[101](index=101&type=chunk) [Corporate Governance Report](index=24&type=section&id=Corporate%20Governance%20Report) [Directors' Securities Transactions](index=24&type=section&id=Directors'%20Securities%20Transactions) The Company has adopted the Model Code, applicable to all directors and relevant employees, and confirms that all directors complied with the required standards throughout the year ended April 30, 2025 - The Company has adopted the Model Code, applicable to all directors and all relevant employees who have been informed of the provisions[104](index=104&type=chunk) - All directors have confirmed that they have complied with the required standards set out in the Model Code throughout the year ended April 30, 2025[104](index=104&type=chunk) [Board of Directors](index=24&type=section&id=Board%20of%20Directors) The Board comprises seven directors, including four executive and three independent non-executive directors, with clear separation of Chairman and CEO roles, ensuring independence of INEDs, and regular meetings to review financial statements and policies - The Board of Directors comprises **seven directors**: four executive directors and three independent non-executive directors[105](index=105&type=chunk) - The roles of Chairman and Chief Executive Officer are separate, held by Ms. Lo Siu Shan and Ms. Sin Lo Siu Wai, respectively[105](index=105&type=chunk) - The Board held one meeting during the year where the Chairman and independent non-executive directors met without the presence of other executive directors[105](index=105&type=chunk) - The Company believes that all independent non-executive directors have been independent from their respective appointment dates up to April 30, 2025[105](index=105&type=chunk) Board and Committee Meeting Attendance Record (FY2025) | Director Name | Board Meetings & General Meetings | Audit Committee Meetings | Remuneration Committee Meetings | Nomination Committee Meetings | | :------------ | :------------------------------ | :----------------------- | :------------------------------ | :---------------------------- | | Ms. Lo Siu Shan | 5/5 | 0/0 | 0/0 | 0/0 | | Ms. Sin Lo Siu Wai | 5/5 | 0/0 | 0/0 | 0/0 | | Mr. Lo Hung | 5/5 | 0/0 | 0/0 | 0/0 | | Ms. Leung Siu Lin | 5/5 | 0/0 | 0/0 | 0/0 | | Mr. Man Ka Ho | 5/5 | 3/3 | 1/1 | 1/1 | | Mr. Cheng Tsz Lung | 5/5 | 3/3 | 1/1 | 1/1 | | Mr. Sit Hon Wing | 5/5 | 3/3 | 1/1 | 1/1 | [Continuous Professional Development of Directors](index=25&type=section&id=Continuous%20Professional%20Development%20of%20Directors) All directors engage in continuous professional development to update their knowledge and skills, staying informed of the latest amendments to Listing Rules, Companies Ordinance, and Corporate Governance Code to effectively fulfill their duties - All directors participate in continuous professional development to develop and update their knowledge and skills, ensuring they contribute to the Board with comprehensive and relevant information[109](index=109&type=chunk) - Directors engage in continuous professional development by attending internal briefings, external seminars, and reading relevant materials[110](index=110&type=chunk) [Remuneration Committee](index=26&type=section&id=Remuneration%20Committee) The Remuneration Committee, composed of three independent non-executive directors and one executive director, is responsible for establishing a transparent remuneration policy, reviewing compensation for directors and senior management, and making recommendations on performance-linked remuneration - The Remuneration Committee comprises three independent non-executive directors (Mr. Cheng Tsz Lung, Mr. Man Ka Ho, Mr. Sit Hon Wing) and one executive director (Ms. Sin Lo Siu Wai), with Mr. Cheng Tsz Lung serving as Chairman[111](index=111&type=chunk) - Its primary responsibilities include formulating a transparent remuneration policy, reviewing the remuneration policy and structure for directors and senior management, reviewing performance-linked remuneration, and making other remuneration-related recommendations[111](index=111&type=chunk) - The Remuneration Committee held a meeting on July 29, 2025, to review the remuneration policy, share option scheme, and remuneration packages for executive directors and senior management[111](index=111&type=chunk) [Nomination Committee](index=26&type=section&id=Nomination%20Committee) The Nomination Committee, comprising three independent non-executive directors and one executive director, is responsible for regularly reviewing the Board's structure, size, and composition, identifying qualified candidates, and assessing the independence of independent non-executive directors - The Nomination Committee comprises three independent non-executive directors (Mr. Man Ka Ho, Mr. Cheng Tsz Lung, Mr. Sit Hon Wing) and one executive director (Ms. Sin Lo Siu Wai), with Mr. Man Ka Ho serving as Chairman[112](index=112&type=chunk) - Its primary responsibilities include regularly reviewing the Board's structure, size, and composition, making recommendations on director appointments and removals, identifying qualified candidates, and assessing the independence of independent non-executive directors[112](index=112&type=chunk) - The Nomination Committee held a meeting on July 29, 2025, to review the implementation and effectiveness of the Board Diversity Policy[112](index=112&type=chunk) [Board Diversity Policy](index=26&type=section&id=Board%20Diversity%20Policy) The Company adopted a Board Diversity Policy in 2017 to promote diversity among Board members by considering factors such as gender, age, cultural and educational background, and professional experience, to achieve strategic goals and sustainable development - The Company adopted a Board Diversity Policy in 2017 to promote diversity among Board members[113](index=113&type=chunk) - Factors considered include, but are not limited to, gender, age, cultural and educational background, race, professional experience, skills, industry knowledge, and length of service[113](index=113&type=chunk) - The Nomination Committee will review this policy and monitor its implementation from time to time[114](index=114&type=chunk) [Audit Committee](index=27&type=section&id=Audit%20Committee) The Audit Committee, composed of all three independent non-executive directors, is responsible for reviewing and overseeing the Group's financial reporting process, audit procedures, internal controls, and corporate governance, and performing corporate governance functions - The Audit Committee comprises all three independent non-executive directors (Mr. Sit Hon Wing, Mr. Man Ka Ho, and Mr. Cheng Tsz Lung), with Mr. Sit Hon Wing serving as Chairman[115](index=115&type=chunk) - Its primary responsibilities include reviewing and overseeing the Group's financial reporting process, audit procedures, internal controls, and corporate governance[115](index=115&type=chunk) - The Audit Committee held a meeting on July 29, 2025, to review this report, the Directors' Report, and the annual accounts, and to make recommendations to the Board[116](index=116&type=chunk) [Auditor's Remuneration](index=27&type=section&id=Auditor's%20Remuneration) For the year ended April 30, 2025, the Group paid approximately HKD 850,000 for audit services and HKD 134,000 for non-audit services to its auditor Auditor's Remuneration (Thousand HKD) | Service Type | 2025 | 2024 | | :----------- | :--- | :--- | | Audit Services | 850 | 1,100 | | Non-Audit Services | 134 | 282 | - Non-audit services primarily include interim review, tax compliance, internal control assessment, and ESG report consulting[117](index=117&type=chunk) [Risk Management and Internal Control](index=27&type=section&id=Risk%20Management%20and%20Internal%20Control) The Board oversees the implementation of risk management and internal control systems, engaging external consultants to review the internal control environment, deems the systems effective and adequate, and will continue to assess the need for an internal audit department - The Board is responsible for overseeing and ensuring the continuous implementation of sound and effective risk management and internal control systems to safeguard the Group's assets and shareholders' interests[118](index=118&type=chunk) - The Company engaged an external consulting firm to review the Group's internal control environment for the current year and assist in adopting and implementing an enterprise risk management system[120](index=120&type=chunk) - The Board considers the risk management and internal control systems to be effective and adequate, with no significant areas of concern[120](index=120&type=chunk) - The Group does not have an internal audit department, but the Board will continue to assess the need for one at least once a year[119](index=119&type=chunk) [Procedures and Internal Controls for Handling and Dissemination of Inside Information](index=28&type=section&id=Procedures%20and%20Internal%20Controls%20for%20Handling%20and%20Dissemination%20of%20Inside%20Information) The Company has implemented measures, including restricted access, confidentiality requirements, compliance with employment terms, and the Model Code, to prevent disclosure breaches and ensure strict confidentiality and timely disclosure of inside information - The Company has implemented measures to prevent disclosure breaches, including restricting access to information, requiring employees with inside information to maintain confidentiality, and ensuring all employees comply with confidential information handling terms and the Model Code[121](index=121&type=chunk)[125](index=125&type=chunk) - The Group complies with the requirements of the Securities and Futures Ordinance and the Listing Rules, disclosing inside information as soon as reasonably practicable and ensuring strict confidentiality before full disclosure[121](index=121&type=chunk) [Directors' Responsibility Statement](index=28&type=section&id=Directors'%20Responsibility%20Statement) Directors confirm their responsibility to prepare the Group's financial statements in accordance with statutory requirements and applicable accounting standards, and to timely publish annual and interim results - Directors confirm their responsibility to prepare the Group's financial statements in accordance with statutory requirements and applicable accounting standards[122](index=122&type=chunk) - The Group publishes its annual and interim results in a timely manner[122](index=122&type=chunk) [Company Secretary](index=28&type=section&id=Company%20Secretary) Mr. Cheung Ka Cheong serves as the Company Secretary, responsible for corporate secretarial matters and assisting directors in complying with internal control measures, and has met the Listing Rule's professional training requirements - Mr. Cheung Ka Cheong is the Company Secretary, responsible for the Group's corporate secretarial matters and assisting directors in implementing and continuously complying with the Group's internal control measures[123](index=123&type=chunk) - For the year ended April 30, 2025, Mr. Cheung complied with Listing Rule 3.29 and received no less than **15 hours** of relevant professional training[124](index=124&type=chunk) [Communication with Shareholders](index=29&type=section&id=Communication%20with%20Shareholders) The Company values Annual General Meetings, requiring the Chairman and all directors to attend if possible, and enhances minority shareholder rights through independent resolutions and publishing voting results on the company and HKEX websites - The Company considers Annual General Meetings very important, and the Chairman and all directors are required to attend whenever possible[126](index=126&type=chunk) - All resolutions proposed for shareholders' vote at general meetings will be passed by poll, and voting results will be published on the Company's website and the Stock Exchange's website on the day of the meeting[126](index=126&type=chunk) - The Company's corporate communications include interim reports, annual reports, announcements, and circulars required by the Listing Rules to be published on the Company's website and the Stock Exchange's website[126](index=126&type%20chunk) [Shareholders' Rights](index=29&type=section&id=Shareholders'%20Rights) The Company has established a shareholder communication policy to provide relevant information for informed exercise of rights, outlining procedures for convening extraordinary general meetings, submitting inquiries to the Board, and nominating directors - The Company has a shareholder communication policy to provide shareholders with relevant information, enabling them to exercise their rights in an informed manner[127](index=127&type=chunk) - Shareholders may submit a written request to the Company Secretary to convene an extraordinary general meeting, requiring at least **10%** of the Company's paid-up share capital[128](index=128&type=chunk) - Shareholders may mail inquiries to the Company's principal place of business in Hong Kong or email geninfo@kiddieland.com.hk[129](index=129&type=chunk) - Shareholders intending to nominate candidates for directorship must submit written notice and consent to the Company's Hong Kong share registrar[130](index=130&type=chunk) - Written notice for shareholders to propose resolutions must be submitted to the Company's principal place of business in Hong Kong, with sufficient notice period[131](index=131&type=chunk) [Constitutional Documents](index=30&type=section&id=Constitutional%20Documents) The Company's adopted constitutional documents (including the third amended and restated memorandum and articles of association) became effective on January 15, 2024 - The Company adopted constitutional documents (including the third amended and restated memorandum and articles of association), which became effective on January 15, 2024[132](index=132&type=chunk) [Environmental, Social and Governance Report](index=31&type=section&id=Environmental,%20Social%20and%20Governance%20Report) [About This Report](index=31&type=section&id=About%20This%20Report) This report outlines the Group's ESG policies, measures, and performance from May 1, 2024, to April 30, 2025, prepared in accordance with Appendix C2 of the Listing Rules' ESG Reporting Guide, adhering to materiality, quantification, balance, and consistency principles - This report describes the Group's overall performance regarding environmental and social aspects from May 1, 2024, to April 30, 2025 ("Reporting Period")[135](index=135&type=chunk) - The report discloses the policies and initiatives of the Group's core and significant business units in China (including production plants) and Hong Kong office operations[136](index=136&type=chunk) - This report is prepared in accordance with the Environmental, Social and Governance Reporting Guide set out in Appendix C2 of the Listing Rules, and is based on the four reporting principles: materiality, quantification, balance, and consistency[137](index=137&type=chunk)[138](index=138&type=chunk)[139](index=139&type=chunk) [Board Statement](index=32&type=section&id=Board%20Statement) The Board reaffirms the Group's commitment to environmentally and socially responsible operations, integrating sustainability into business strategy, and has established cross-departmental ESG working groups and committees to achieve long-term emission reduction targets and a carbon-neutral vision - The Board is committed to operating in an environmentally and socially responsible manner, integrating sustainable development into its business strategy planning[143](index=143&type=chunk) - The Group has established cross-departmental ESG working groups and an ESG committee to coordinate different departments, enhance cooperation, and ensure consistent performance[143](index=143&type=chunk) - The Group has formulated clear short-term and long-term sustainable development visions and goals, aiming to reduce greenhouse gas emissions by **50% by 2030** and achieve carbon neutrality by **2060**[143](index=143&type=chunk) [ESG Governance Structure](index=32&type=section&id=ESG%20Governance%20Structure) The Board is fully responsible for the Group's ESG strategy and reporting, and with the assistance of the ESG Working Group and ESG Committee, assesses and defines ESG-related risks, ensuring effective risk management and internal control systems - The Board is fully responsible for the Group's ESG strategy and reporting, ensuring alignment with long-term development and positioning[145](index=145&type=chunk) - The ESG Working Group and ESG Committee comprise senior management and core members from various departments, responsible for daily planning and implementation of the Group's ESG matters[145](index=145&type=chunk) - The Board regularly reviews the Group's ESG performance, and reviews and approves the Group's annual ESG report[146](index=146&type=chunk) [Stakeholder Engagement](index=33&type=section&id=Stakeholder%20Engagement) The Group communicates with stakeholders such as shareholders, investors, employees, customers, suppliers, and the community through various channels to gather feedback and develop sustainable strategies that meet their needs and expectations - Stakeholder feedback lays a solid foundation for the Group's sustainable development and success, helping to formulate business strategies that meet their needs[147](index=147&type=chunk) - The Group communicates with stakeholders through various channels, including annual reports, interim reports, ESG reports, general meetings, company websites, training, meetings, customer satisfaction surveys, site visits, and community activities[148](index=148&type=chunk) [Materiality Assessment](index=34&type=section&id=Materiality%20Assessment) The Group identifies and prioritizes material ESG issues through stakeholder engagement and online surveys, based on their importance to stakeholders and the business, to formulate sustainable development strategies - The Group conducted stakeholder engagement activities with internal and external stakeholders through online surveys and developed a materiality assessment matrix based on the results[149](index=149&type=chunk) - The materiality assessment considers the impact of issues on stakeholders and the business, with issues in the upper right quadrant having relatively higher importance[149](index=149&type=chunk)[150](index=150&type=chunk)[151](index=151&type=chunk) - Material issues include atmospheric pollutant emissions, greenhouse gas emissions, wastewater management, waste management, energy efficiency, water efficiency, material consumption, compliance with environmental regulations, climate change, employment practices, diversity and equal opportunity, anti-discrimination, occupational health and safety, development and training, child and forced labor, responsible supply chain management, environmental friendliness of procured products and services, compliance with marketing, product and service labeling regulations, customer privacy and confidentiality, customer satisfaction, intellectual property, product safety, product quality, business ethics, anti-corruption training for management and employees, social contribution, and local community engagement[152](index=152&type=chunk) [Environmental Aspects](index=35&type=section&id=Environmental%20Aspects) The Group is committed to environmental protection, establishing environmental management manuals and systems, strictly complying with relevant laws and regulations, and actively implementing emission reduction, energy saving, water conservation, and waste management measures to address climate change challenges - The Group is dedicated to protecting the Earth and conserving natural resources for future generations, and fully understands that its operations may impact the environment, actively striving to reduce its footprint[153](index=153&type=chunk) - The Group strictly complies with relevant environmental laws and regulations, including the Environmental Protection Law of the People's Republic of China, the Law on the Prevention and Control of Atmospheric Pollution, and the Law on the Prevention and Control of Environmental Pollution by Solid Waste[153](index=153&type=chunk) - The Group has established an environmental management system and appointed an "Environmental Management Working Group" to oversee all environmental-related matters, with objectives including regulatory compliance, pollution prevention, promoting clean production, and creating a harmonious environment[154](index=154&type=chunk)[157](index=157&type=chunk) - The Group ceased toy production at its factory and outsourced toy production in fiscal year 2024, with the smart laboratory equipment business primarily involving woodworking[155](index=155&type=chunk) [Emissions](index=36&type=section&id=Emissions) The Group has implemented measures to control atmospheric pollutant emissions and reduce greenhouse gas emissions, while managing waste using "reduce, reuse, and recycle" principles and complying with wastewater discharge permits - The Group has implemented measures to ensure atmospheric pollutant emissions comply with GB16297–1996 Class II regulations, and regularly maintains equipment and inspects cutting machine blades to reduce emissions[156](index=156&type=chunk) - For the year ended April 30, 2025, the total atmospheric emissions of various pollutants (including sulfur oxides, nitrogen oxides, suspended particulates, benzene, toluene, xylene, and total volatile organic compounds) were **0 tonnes**, primarily due to the cessation of production at the factory and outsourcing of toy production[158](index=158&type=chunk) - To reduce greenhouse gas emissions, the Group is committed to reducing energy consumption, regularly maintaining air conditioners, prioritizing the purchase of non-fluorinated refrigerant air conditioners, and selecting new air conditioners with China's Class 1 energy efficiency label[159](index=159&type=chunk) Greenhouse Gas Emissions (Tonnes CO2e) | GHG Emissions | 2025 | 2024 | | :------------ | :----- | :----- | | Scope 1 | 0.00 | 0.00 | | Scope 2 | 104.43 | 125.64 | | **Total** | **104.43** | **125.64** | | Intensity (per unit of production) | 0.0007 | 0.0011 | - The Group adopts "reduce, reuse, and recycle" as its waste management principle and engages qualified waste disposal companies for the transportation, treatment, storage, disposal, or recycling of hazardous and controlled waste[161](index=161&type=chunk) - During the reporting period, the total amount of non-hazardous waste generated was **1 tonne**, primarily domestic waste, and data collection procedures for non-hazardous waste have been reinstated[163](index=163&type=chunk) - The Group obtained a wastewater discharge permit in China in accordance with local regulations; for the year ended April 30, 2025, no wastewater was treated or discharged due to the cessation of toy production at the factory[164](index=164&type=chunk) [Resource Usage](index=39&type=section&id=Resource%20Usage) The Group is committed to resource conservation, significantly reducing energy and water consumption through energy management systems and conservation plans, and implementing measures to reduce packaging material consumption - The Group has established an energy management system to monitor and manage resource usage, aiming to reduce operating costs and carbon footprint[165](index=165&type=chunk) - Energy-saving measures include regular machine maintenance, enhancing employee energy-saving awareness, improving production processes and management, and strengthening energy management[166](index=166&type=chunk) Energy Consumption (MWh) | Energy Consumption Category | 2025 | 2024 | | :------------------------ | :----- | :----- | | Direct Consumption | 0.00 | 0.00 | | Indirect Consumption (Electricity) | 231.83 | 290.44 | | **Total** | **231.83** | **290.44** | | Intensity (per unit of production) | 0.0015 | 0.0025 | - Total energy consumption decreased by approximately **20.2%** compared to last year, mainly due to the Group's relocation to a smaller office in October 2024[167](index=167&type=chunk) Water Consumption (Cubic Meters) | Water Consumption | 2025 | 2024 | | :---------------- | :------- | :------- | | **Total** | **2,350.00** | **3,179.00** | | Intensity (per unit of production) | 0.0152 | 0.0274 | - Total water consumption and its intensity decreased by approximately **26.1%** and **44.5%**, respectively, mainly due to the relocation to a smaller office[167](index=167&type=chunk) Packaging Material Consumption (Tonnes) | Packaging Material | 2025 | 2024 | | :----------------- | :---- | :---- | | Cartons | 23.00 | 28.97 | | **Total** | **23.00** | **28.97** | | Intensity (per unit of production) | 0.0001 | 0.0002 | - The Group has implemented measures to reduce packaging material consumption, including increasing the packaging-to-product ratio, using environmentally friendly packaging materials, and minimizing the use of cartons and containers in logistics[170](index=170&type=chunk) [Environment and Natural Resources](index=41&type=section&id=Environment%20and%20Natural%20Resources) The Group highly values the impact of its operations on the environment and natural resources, has established "Environmental Protection Management Regulations" and related procedures to strengthen management, reduce pollution risks, and actively promote paper-saving measures in offices - The Group's significant impacts on the environment and natural resources include wastewater discharge, water resources, energy consumption, and packaging materials[171](index=171&type=chunk) - "Environmental Protection Management Regulations" and related procedures have been established to reduce the risk of soil and groundwater pollution, including strict control of chemical storage, regular maintenance of discharge systems, and emergency response training[171](index=171&type=chunk)[174](index=174&type=chunk) - During the reporting period, the Group's expenses for waste management and pollution prevention were approximately **RMB 16,000**[172](index=172&type=chunk) - The Group is committed to reducing office paper consumption, encouraging the reuse of blank sides of paper, and recycling used paper[172](

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告之內容概不負責，對其 準確性或完整性亦不發表任何聲明，並明確表示不會就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之任何損失承擔任何責任。 茲提述瀛晟科學有限公司（「本公司」，連同其附屬公司統稱「本集團」）於二零二五年四月 三十日刊發的截至二零二四年十二月三十一日止年度之年度報告（「二零二四年年報」）。 除另有定義外，本公告所用詞彙與二零二四年年報所界定者具有相同涵義。 除二零二四年年報所披露的資料外，根據上市規則附錄D2第11(8)段的規定，本公司董事 （「董事」）會（「董事會」）現就以下事項提供進一步詳情：(i)於二零二四年一月十五日配售 101,964,566股本公司普通股（「配售A」）的所得款項用途；及(ii)於二零二四年八月二十六 日完成配售23,000,000股本公司普通股（「配售B」）。 配售A 所得款項用途 209 二零二四年年報補充公告 WINSHINE SCIENCE COMPANY LIMITED * 4,300 於二零二四年年報日期，配售A所得款項淨額約為6,500,000港元，將用作本集團的一般營 運資金。指定用作一般 ...

[Financial Data](index=2&type=section&id=%E8%B2%A1%E5%8B%99%E8%B3%87%E6%96%99) [Consolidated Balance Sheet](index=2&type=section&id=%E5%90%88%E4%BD%B5%E8%B3%87%E7%94%A2%E8%B2%A0%E5%82%B5%E8%A1%A8) As of June 30, 2025, the Group's total assets and liabilities decreased from year-end 2024, with significant declines in current assets and liabilities, while cash increased and accounts receivable and inventory decreased Consolidated Balance Sheet (RMB) | Item | June 30, 2025 (RMB) | December 31, 2024 (RMB) | Change (%) | | :--- | :--- | :--- | :--- | | Total Assets | 6,408,414,812.83 | 6,977,601,312.59 | -8.2% | | Total Current Assets | 4,287,817,607.75 | 4,699,606,788.48 | -8.8% | | Cash and Cash Equivalents | 886,615,327.25 | 652,046,262.73 | +36.0% | | Accounts Receivable | 1,026,066,987.90 | 1,243,392,844.39 | -17.5% | | Inventories | 1,348,518,720.93 | 1,672,686,872.12 | -19.4% | | Total Liabilities | 4,920,652,805.69 | 5,355,803,037.64 | -8.1% | | Total Current Liabilities | 4,454,416,575.16 | 4,799,784,477.83 | -7.2% | | Short-term Borrowings | 2,645,639,091.44 | 2,971,227,478.02 | -10.9% | | Total Shareholders' Equity | 1,487,762,007.14 | 1,621,798,274.95 | -8.2% | [Consolidated Income Statement](index=4&type=section&id=%E5%90%88%E4%BD%B5%E5%88%A9%E6%BD%A4%E8%A1%A8) For the six months ended June 30, 2025, the Group's total operating revenue decreased year-on-year, leading to expanded operating and net losses, with net loss attributable to parent company shareholders also increasing Consolidated Income Statement (RMB) | Item | Jan 1 to Jun 30, 2025 (RMB) | Jan 1 to Jun 30, 2024 (RMB) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Total Operating Revenue | 4,390,170,244.81 | 4,962,446,162.47 | -11.6% | | Total Operating Costs | 4,504,140,888.25 | 5,050,161,043.36 | -10.8% | | Operating Profit | -117,575,343.44 | -82,958,606.58 | -41.7% | | Total Profit | -117,298,246.46 | -82,055,345.35 | -42.9% | | Net Profit | -115,354,949.31 | -85,736,636.26 | -34.5% | | Net Profit Attributable to Parent Company Shareholders | -109,054,958.34 | -91,561,995.45 | -19.1% | | Basic Earnings Per Share | -0.26 | -0.22 | -18.2% | [Notes to Financial Statements](index=6&type=section&id=%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8%E9%99%84%E8%A8%BB) [Company Profile](index=6&type=section&id=%E5%85%AC%E5%8F%B8%E5%9F%BA%E6%9C%AC%E6%83%85%E6%B3%81) Beijing Jingkelong Commercial Group Co., Ltd., established in 2004, primarily engages in retail and wholesale of daily consumer goods, listed on the HKEX main board in 2008. As of June 30, 2025, the company's total share capital was 412.22 million shares, with Beijing Chaofu State-owned Assets Management Co., Ltd. as the controlling shareholder - The company primarily engages in retail and wholesale of daily consumer goods, listed on the HKEX main board in 2008[8](index=8&type=chunk) - As of June 30, 2025, the company's total issued share capital was **412.22 million shares**, with Beijing Chaofu State-owned Assets Management Co., Ltd. as the controlling shareholder[8](index=8&type=chunk) [Basis of Preparation for Interim Financial Report](index=6&type=section&id=%E4%B8%AD%E6%9C%9F%E8%B2%A1%E5%8B%99%E5%A0%B1%E5%91%8A%E7%9A%84%E7%B7%A8%E8%A3%BD%E5%9F%BA%E7%A4%8E) The Group's financial statements are prepared on a going concern basis, adhering to Chinese Enterprise Accounting Standards, Hong Kong Companies Ordinance, and Listing Rules, using the accrual basis and historical cost measurement - Financial statements are prepared on a going concern basis, in accordance with Chinese Enterprise Accounting Standards, Hong Kong Companies Ordinance, and Listing Rules[9](index=9&type=chunk) - Accounting is based on the accrual method, with most items measured at historical cost, except for certain financial instruments[9](index=9&type=chunk) [Analysis of Receivables and Payables](index=7&type=section&id=%E6%87%89%E6%94%B6%E5%8F%8A%E6%87%89%E4%BB%98%E9%A0%85%E7%9B%AE%E5%88%86%E6%9E%90) This section details the aging structure and credit impairment provisions for accounts receivable, and the composition and aging analysis of notes and accounts payable, showing accounts receivable are mostly within one year, while notes payable significantly increased year-on-year [Accounts Receivable](index=7&type=section&id=%E6%87%89%E6%94%B6%E8%B3%A6%E6%AC%BE) As of June 30, 2025, total accounts receivable amounted to **RMB 1,117,113,877.74**, with 75% aged within one year, and total credit impairment provisions of **RMB 91,046,889.84** Accounts Receivable Aging (RMB) | Aging | Amount (RMB) | Proportion (%) | Credit Impairment Provision (RMB) | Carrying Value (RMB) | | :--- | :--- | :--- | :--- | :--- | | Within 1 year | 835,536,921.33 | 75 | 1,384,704.87 | 834,152,216.46 | | 1 to 2 years | 49,356,318.96 | 4 | 1,480,689.57 | 47,875,629.39 | | 2 to 3 years | 140,619,285.84 | 13 | 16,833,363.19 | 123,785,922.65 | | 3 to 4 years | 22,916,806.43 | 2 | 6,977,472.92 | 15,939,333.51 | | 4 to 5 years | 8,708,642.54 | 1 | 4,394,756.65 | 4,313,885.89 | | Over 5 years | 59,975,902.64 | 5 | 59,975,902.64 | – | | Total | 1,117,113,877.74 | 100 | 91,046,889.84 | 1,026,066,987.90 | [Notes and Accounts Payable](index=7&type=section&id=%E6%87%89%E4%BB%98%E7%A5%A8%E6%93%9A%E5%8F%8A%E6%87%89%E4%BB%98%E8%B3%A6%E6%AC%BE) As of June 30, 2025, notes payable significantly increased by **102.6%** year-on-year, while accounts payable slightly decreased; accounts payable are primarily for goods within one year, with amounts over one year mainly representing outstanding supplier payments Notes and Accounts Payable (RMB) | Item | June 30, 2025 (RMB) | December 31, 2024 (RMB) | Change (%) | | :--- | :--- | :--- | :--- | | Notes Payable | 214,246,957.80 | 105,750,091.50 | +102.6% | | Accounts Payable | 554,561,103.49 | 555,842,474.01 | -0.2% | | Total | 768,808,061.29 | 661,592,565.51 | +16.2% | - As of June 30, 2025, guarantee deposits for issuing bank acceptance bills amounted to **RMB 21,567,527.88**[10](index=10&type=chunk) - Accounts payable are predominantly within one year, with amounts exceeding one year primarily representing outstanding payments to suppliers[11](index=11&type=chunk) [Retained Earnings and Dividend Policy](index=8&type=section&id=%E6%9C%AA%E5%88%86%E9%85%8D%E5%88%A9%E6%BD%A4%E8%88%87%E8%82%A1%E5%88%A9%E6%94%BF%E7%AD%96) As of June 30, 2025, the Group's retained earnings significantly decreased due to the net loss attributable to parent company shareholders for the period, and the Board recommended no interim dividend, consistent with the prior year Retained Earnings (RMB) | Item | Jan 1 to Jun 30, 2025 (RMB) | Jan 1 to Jun 30, 2024 (RMB) | | :--- | :--- | :--- | | Adjusted Retained Earnings at Beginning of Period | 139,088,761.53 | 299,762,293.04 | | Add: Net Profit Attributable to Parent Company Shareholders for the Period | -109,054,958.34 | -91,561,995.45 | | Retained Earnings at End of Period | 30,033,803.19 | 208,200,297.59 | - The Board recommended no interim dividend for the six months ended June 30, 2025, maintaining a zero dividend payout consistent with the prior year[14](index=14&type=chunk) [Operating Revenue and Cost Structure](index=8&type=section&id=%E7%87%9F%E6%A5%AD%E6%94%B6%E5%85%A5%E5%8F%8A%E6%88%90%E6%9C%AC%E6%A7%8B%E6%88%90) In the first half of 2025, the Group's operating revenue and costs both decreased year-on-year, with primary business revenue, mainly from retail and wholesale, accounting for the largest share and both experiencing declines [Overall Operating Revenue and Costs](index=8&type=section&id=%E7%B8%BD%E9%AB%94%E7%87%9F%E6%A5%AD%E6%94%B6%E5%85%A5%E5%8F%8A%E6%88%90%E6%9C%AC) In the first half of 2025, the Group's operating revenue was **RMB 4,390,170,244.81** and operating costs were **RMB 3,648,245,716.51**, both decreasing from the prior year Overall Operating Revenue and Costs (RMB) | Item | Jan 1 to Jun 30, 2025 (RMB) | Jan 1 to Jun 30, 2024 (RMB) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 4,390,170,244.81 | 4,962,446,162.47 | -11.6% | | Operating Costs | 3,648,245,716.51 | 4,093,625,852.02 | -10.9% | [Primary Business Revenue and Costs](index=9&type=section&id=%E4%B8%BB%E7%87%9F%E6%A5%AD%E6%94%B6%E5%85%A5%E5%8F%8A%E6%88%90%E6%9C%AC) Primary business revenue, mainly from retail and wholesale, saw year-on-year declines in both segments during the first half of 2025, primarily from sales of food, non-staple food, daily consumer goods, beverages, and alcohol Primary Business Revenue and Costs (RMB) | Item | Jan 1 to Jun 30, 2025 (RMB) | Jan 1 to Jun 30, 2024 (RMB) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Total Primary Business Revenue | 3,984,419,068.29 | 4,418,443,343.08 | -9.8% | | Retail Business Revenue | 1,077,392,855.23 | 1,362,551,512.41 | -20.9% | | Wholesale Business Revenue | 2,902,661,033.46 | 3,054,007,202.96 | -5.0% | | Total Primary Business Costs | 3,641,355,894.98 | 4,079,117,792.86 | -10.8% | - Primary business revenue is mainly derived from sales of food, non-staple food, daily consumer goods, beverages, and alcohol[16](index=16&type=chunk) [Income Tax Expense](index=9&type=section&id=%E6%89%80%E5%BE%97%E7%A8%85%E8%B2%BB%E7%94%A8) The Group's income tax expense for the first half of 2025 was negative, primarily due to negative deferred income tax expense and the impact of unrecognized deductible temporary differences or deductible losses Income Tax Expense (RMB) | Item | Jan 1 to Jun 30, 2025 (RMB) | Jan 1 to Jun 30, 2024 (RMB) | | :--- | :--- | :--- | | Current Income Tax Expense | 7,024,567.42 | 16,862,376.00 | | Deferred Income Tax Expense | -8,967,864.57 | -13,181,085.09 | | Total | -1,943,297.15 | 3,681,290.91 | - Income tax expense was negative, mainly influenced by negative deferred income tax expense and unrecognized deductible temporary differences or deductible losses for the period[18](index=18&type=chunk) [Earnings Per Share](index=10&type=section&id=%E6%AF%8F%E8%82%A1%E6%94%B6%E7%9B%8A) The Group's basic earnings per share for the first half of 2025 was **RMB -0.26**, an expanded loss compared to **RMB -0.22** in the prior year, reflecting the decrease in net profit attributable to parent company shareholders Earnings Per Share (RMB) | Item | Jan 1 to Jun 30, 2025 (RMB) | Jan 1 to Jun 30, 2024 (RMB) | | :--- | :--- | :--- | | Net Profit Attributable to Parent Company Shareholders | -109,054,958.34 | -91,561,995.45 | | Number of Ordinary Shares for Basic EPS Calculation | 412,220,000.00 | 412,220,000.00 | | Basic Earnings Per Share | -0.26 | -0.22 | [Liquidity Ratios](index=11&type=section&id=%E6%B5%81%E5%8B%95%E6%80%A7%E6%8C%87%E6%A8%99) As of June 30, 2025, the Group's net current assets were negative, with the deficit expanding from year-end 2024, indicating increased liquidity pressure, and total assets less current liabilities also showed a declining trend [Net Current Assets](index=11&type=section&id=%E6%B7%A8%E6%B5%81%E5%8B%95%E8%B3%87%E7%94%A2) As of June 30, 2025, the Group's net current assets were **RMB -166,598,967.41**, further deteriorating from **RMB -100,177,689.35** at year-end 2024 Net Current Assets (RMB) | Item | June 30, 2025 (RMB) | December 31, 2024 (RMB) | | :--- | :--- | :--- | | Current Assets | 4,287,817,607.75 | 4,699,606,788.48 | | Less: Current Liabilities | 4,454,416,575.16 | 4,799,784,477.83 | | Net Current Assets | -166,598,967.41 | -100,177,689.35 | [Total Assets Less Current Liabilities](index=11&type=section&id=%E7%B8%BD%E8%B3%87%E7%94%A2%E6%B8%9B%E6%B5%81%E5%8B%95%E8%B2%A0%E5%82%B5) As of June 30, 2025, total assets less current liabilities amounted to **RMB 1,953,998,237.67**, a decrease from year-end 2024 Total Assets Less Current Liabilities (RMB) | Item | June 30, 2025 (RMB) | December 31, 2024 (RMB) | | :--- | :--- | :--- | | Total Assets | 6,408,414,812.83 | 6,977,601,312.59 | | Less: Current Liabilities | 4,454,416,575.16 | 4,799,784,477.83 | | Total Assets Less Current Liabilities | 1,953,998,237.67 | 2,177,816,834.76 | [Performance Review and Operating Analysis](index=12&type=section&id=%E6%A5%AD%E7%B8%BE%E5%9B%9E%E9%A1%A7%E8%88%87%E7%B6%93%E7%87%9F%E5%88%86%E6%9E%90) [Macro Environment and Operating Strategy](index=12&type=section&id=%E5%AE%8F%E8%A7%80%E7%92%B0%E5%A2%83%E8%88%87%E7%B6%93%E7%87%9F%E7%AD%96%E7%95%A5) In the first half of 2025, facing a complex international trade environment and fierce market competition, the Group focused on brand building, empowering product and service capabilities, strengthening core businesses, and promoting enterprise transformation to adapt to changes in household consumption expenditure patterns - The international trade environment is complex, the domestic consumer market shows strong resilience but faces many external uncertainties, and the proportion of food, tobacco, and alcohol consumption expenditure has decreased[21](index=21&type=chunk) - The Group leverages brand building, focuses on enhancing target customer value, empowers both product and service capabilities, strengthens core businesses, and promotes enterprise transformation and upgrading[21](index=21&type=chunk) [Retail Business](index=12&type=section&id=%E9%9B%B6%E5%94%AE%E6%A5%AD%E5%8B%99) The Group's retail business closed some stores during the reporting period, leading to a decrease in primary business revenue, but gross margin improved through category development, product upgrades, store operation optimization, and technological empowerment, with logistics distribution centers integrated for efficiency [Store Network and Operations](index=12&type=section&id=%E9%96%80%E5%BA%97%E7%B6%B2%E7%B5%A1%E8%88%87%E9%81%8B%E7%87%9F) As of June 30, 2025, the Group operated a total of **91 retail stores**, comprising **83 directly operated stores** and **8 franchised stores**, with a total net operating area of approximately **99,218 square meters**, having closed **9 stores** during the reporting period Store Count (Units) | Store Type | Directly Operated Stores (units) | Franchised Stores (units) | Total (units) | | :--- | :--- | :--- | :--- | | Department Stores | 1 | - | 1 | | Hypermarkets | 8 | - | 8 | | Supermarkets | 34 | - | 34 | | Convenience Stores | 40 | 8 | 48 | | **Total** | **83** | **8** | **91** | Net Operating Area (Square Meters) | Store Type | Directly Operated Stores (sqm) | Franchised Stores (sqm) | Total (sqm) | | :--- | :--- | :--- | :--- | | Department Stores | 20,724 | - | 20,724 | | Hypermarkets | 23,722 | - | 23,722 | | Supermarkets | 46,611 | - | 46,611 | | Convenience Stores | 6,485 | 1,676 | 8,161 | | **Total** | **97,542** | **1,676** | **99,218** | - During the reporting period, **4 hypermarkets** and **5 directly operated convenience stores** were closed due to lease expirations and operational strategy adjustments, with no new retail stores opened[23](index=23&type=chunk) [Product Competitiveness and Supply Chain Optimization](index=13&type=section&id=%E5%95%86%E5%93%81%E5%8A%9B%E8%88%87%E4%BE%9B%E6%87%89%E9%8F%88%E5%84%AA%E5%8C%96) The Group enhanced the cost-effectiveness and competitiveness of fruits, vegetables, meat, and eggs by optimizing the supply chain, implementing direct sourcing from bases, and introducing geographical indication products, while also optimizing product structure through new product selection and a "last-place elimination" mechanism, and integrating omni-channel supply chain resources - Continuously improved the cost-effectiveness of fruits, vegetables, meat, and eggs, with increased penetration rates for vegetables, fruits, meat, and fresh eggs compared to the prior year, and a comprehensive upgrade in targeted category development[24](index=24&type=chunk) - Implemented direct sourcing from bases, established direct supply channels for single items, and introduced geographical indication products and selected high-quality single items[24](index=24&type=chunk) - Adjusted new product strategy to a selection model, implemented a "last-place elimination" mechanism, phased out inefficient suppliers and slow-moving products, and optimized product structure[25](index=25&type=chunk) [Operations Management and Customer Experience](index=13&type=section&id=%E9%81%8B%E7%87%9F%E7%AE%A1%E7%90%86%E8%88%87%E9%A1%A7%E5%AE%A2%E9%AB%94%E9%A9%97) The Group adjusted store layouts, optimized product displays, closed unprofitable stores, and actively conducted "Jingkelong Supermarket into Community" activities to enhance customer shopping comfort, brand influence, and overall customer experience - Adjusted layouts of multiple stores, optimized product placement and display, standardized stack height and display standards, enhancing shopping comfort[26](index=26&type=chunk) - Closed unprofitable stores, focused management efforts on high-potential stores, and actively conducted nearly **200 "Jingkelong Supermarket into Community"** special events to expand brand influence[26](index=26&type=chunk) - Strengthened basic management, refined operational standards for fresh produce, general management, store services, operational implementation, and safety, resulting in an increase in average daily customer traffic compared to the prior year[27](index=27&type=chunk) [Technology Empowerment and Safety Control](index=14&type=section&id=%E7%A7%91%E6%8A%80%E8%B3%A6%E8%83%BD%E8%88%87%E5%AE%89%E5%85%A8%E7%AE%A1%E6%8E%A7) The retail business system completed infrastructure and core function upgrades, enabling automatic replenishment and one-click checkout at stores, and offline scan-to-pay and electronic member interoperability for customers, while continuously strengthening food safety risk prevention and emergency drills - The retail business system completed infrastructure and core function upgrades, enabling automatic replenishment for ambient and fresh products, automatic acceptance for direct delivery products, and one-click checkout at stores[28](index=28&type=chunk) - Customer-side features include offline scan-to-pay, interoperability between stored-value cards and electronic memberships, quick returns, and electronic members checking omni-channel order details[28](index=28&type=chunk) - Consistently implemented food safety risk prevention and control, steadily advanced food safety training, and organized the first system-wide food safety emergency drill[29](index=29&type=chunk) [Logistics Distribution Center Integration](index=15&type=section&id=%E7%89%A9%E6%B5%81%E9%85%8D%E9%80%81%E4%B8%AD%E5%BF%83%E6%95%B4%E5%90%88) The Group integrated its fresh and ambient distribution centers into a Logistics Business Unit to enhance logistics resource utilization efficiency, promote full product warehousing, adjust inventory structure, and leverage fresh processing capabilities to develop semi-finished ready-to-cook products for stores - Integrated fresh and ambient distribution centers to establish a Logistics Business Unit, promoting full product warehousing and increasing inbound efficiency[30](index=30&type=chunk) - Adjusted inventory structure to accelerate turnover, and utilized fresh processing capabilities to develop various semi-finished ready-to-cook products for stores, enhancing processing efficiency and unified food safety control[30](index=30&type=chunk) [Retail Operating Performance](index=15&type=section&id=%E9%9B%B6%E5%94%AE%E7%B6%93%E7%87%9F%E6%A5%AD%E7%B8%BE) During the reporting period, the Group's retail primary business revenue decreased by **20.9%**, mainly due to store closures; however, the gross margin for directly operated retail business increased from **15.3%** to **16.6%**, benefiting from category development and product structure upgrades Retail Operating Performance (CNY thousand) | Item | 2025 (CNY thousand) | 2024 (CNY thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Hypermarket Revenue | 328,233 | 394,558 | -16.8% | | Supermarket Revenue | 673,232 | 869,689 | -22.6% | | Convenience Store Revenue | 75,927 | 98,305 | -22.8% | | Total Retail Primary Business Revenue | 1,077,392 | 1,362,552 | -20.9% | | Gross Margin for Directly Operated Hypermarkets, Supermarkets, and Convenience Stores | 16.6% | 15.3% | +1.3% | - Retail primary business revenue decreased by approximately **20.9%**, primarily attributed to sales decline due to the closure of some stores[31](index=31&type=chunk) - Gross margin for directly operated retail business increased to **16.6%**, mainly benefiting from deepened targeted category development, supply chain optimization, product structure upgrades, omni-channel supply chain integration, and member product development[32](index=32&type=chunk) [Wholesale Business](index=16&type=section&id=%E6%89%B9%E7%99%BC%E6%A5%AD%E5%8B%99) The Group's wholesale primary business revenue decreased by **5.0%** year-on-year, mainly due to reduced sales in liquor and grain/oil categories; however, gross margin improved through product structure optimization and vendor policy adjustments [Full-Chain Collaboration and Market Expansion](index=16&type=section&id=%E5%85%A8%E9%8F%88%E5%8D%94%E5%90%8C%E8%88%87%E5%B8%82%E5%A0%B4%E6%8B%93%E5%B1%95) The Group's wholesale business continues to deepen omni-channel development, strategically expanding into refined processing and supply for group meals, and strengthening supply chain ecosystem collaboration through supplier partnerships, co-branded SKU launches, and introduction of quality brands - Continuously deepened omni-channel development and strategically expanded into refined processing and supply for group meals[33](index=33&type=chunk) - Deepened cooperation with suppliers, launched over **30 co-branded SKUs**, consolidating traditional supermarket channels and expanding into emerging business formats[33](index=33&type=chunk) - Introduced quality brands, adhered to a "full category + omni-channel" marketing dual-drive strategy, and strengthened supply chain ecosystem collaboration capabilities[33](index=33&type=chunk) [Logistics Management Capability Enhancement](index=16&type=section&id=%E7%89%A9%E6%B5%81%E7%AE%A1%E7%90%86%E8%83%BD%E5%8A%9B%E6%8F%90%E5%8D%87) The Group rationally adjusted logistics warehouse layouts, optimized storage space utilization, and enhanced transportation efficiency through the TMS transport management system, while also providing professional logistics solutions to third-party clients to reduce supply chain costs - Rationally adjusted logistics warehouse layouts, dynamically optimized storage space utilization, regularly analyzed inventory and turnover data, maximizing warehouse utilization[34](index=34&type=chunk) - Leveraged the TMS transport management system to flexibly allocate transportation resources, improving vehicle loading rates and average daily loading rates[34](index=34&type=chunk) - Continuously provided full-process warehousing and distribution services to third-party clients, reducing customer supply chain costs through optimized inventory management and other measures[34](index=34&type=chunk) [Wholesale Operating Performance](index=17&type=section&id=%E6%89%B9%E7%99%BC%E7%B6%93%E7%87%9F%E6%A5%AD%E7%B8%BE) During the reporting period, wholesale primary business revenue decreased by **5.0%**, mainly due to fluctuations in liquor business and channel adjustments for grain and oil categories; Chaopi Group's gross margin increased by **1.3%** to **5.6%**, benefiting from new brands and vendor policy adjustments Wholesale Operating Performance (CNY thousand) | Item | 2025 (CNY thousand) | 2024 (CNY thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Chaopi Group Primary Business Revenue | 3,042,576 | 3,193,246 | -4.7% | | Consolidated Wholesale Primary Business Revenue | 2,902,661 | 3,054,007 | -5.0% | | Gross Margin | 5.6% | 4.3% | +1.3% | - Wholesale primary business revenue decreased by approximately **5.0%**, mainly due to fluctuations in liquor business from upstream supply chain and market price adjustments, and reduced sales in grain and oil categories due to some channels shifting to direct operation and decreased sales to Wumart system[36](index=36&type=chunk) - Chaopi Group's gross margin increased by **1.3%** to **5.6%**, primarily due to the addition of Yili brand ambient milk and yogurt business, optimized product structure, and vendor policy adjustments for Unilever brand e-commerce channels in the personal care category[36](index=36&type=chunk) [Overall Operating Performance](index=18&type=section&id=%E7%B8%BD%E9%AB%94%E7%B6%93%E7%87%9F%E6%A5%AD%E7%B8%BE) In the first half of 2025, the Group's primary business revenue decreased by **9.8%** overall, but gross profit slightly increased by **1.1%** year-on-year, with gross margin rising to **8.6%**; however, both EBIT and net profit attributable to parent company showed losses, with the deficit expanding [Primary Business Revenue](index=18&type=section&id=%E4%B8%BB%E7%87%9F%E6%A5%AD%E6%94%B6%E5%85%A5) During the reporting period, the Group's primary business revenue decreased by **9.8%**, with retail business down **20.9%** and wholesale business down **5.0%** Primary Business Revenue (CNY thousand) | Item | 2025 (CNY thousand) | 2024 (CNY thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Primary Business Revenue | 3,984,419 | 4,418,443 | -9.8% | [Gross Profit and Gross Margin](index=18&type=section&id=%E6%AF%9B%E5%88%A9%E8%88%87%E6%AF%9B%E5%88%A9%E7%8E%87) During the reporting period, the Group's gross profit increased by **1.1%** year-on-year, with gross margin improving from **7.7%** in the prior year to **8.6%** Gross Profit and Gross Margin (CNY thousand) | Item | 2025 (CNY thousand) | 2024 (CNY thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Gross Profit | 343,063 | 339,326 | +1.1% | | Gross Margin (%) | 8.6% | 7.7% | +0.9% | [Net Profit Attributable to Parent Company](index=18&type=section&id=%E6%AD%B8%E5%B1%AC%E6%96%BC%E6%AF%8D%E5%85%AC%E5%8F%B8%E6%B7%A8%E5%88%A9%E6%BD%A4) During the reporting period, net loss attributable to parent company expanded by **19.1%**, and the EBIT loss also significantly increased Net Profit Attributable to Parent Company (CNY thousand) | Item | 2025 (CNY thousand) | 2024 (CNY thousand) | Change (%) | | :--- | :--- | :--- | :--- | | EBIT | -64,831 | -25,055 | -158.8% | | Net Profit | -115,355 | -85,737 | -34.5% | | Net Profit Attributable to Parent Company | -109,055 | -91,562 | -19.1% | | Net Profit Attributable to Parent Company Margin (%) | -2.7% | -2.1% | -0.6% | [Financial Position and Liquidity](index=19&type=section&id=%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%88%87%E6%B5%81%E5%8B%95%E6%80%A7) [Sources of Funds and Asset-Liability Structure](index=19&type=section&id=%E8%B3%87%E9%87%91%E4%BE%86%E6%BA%90%E8%88%87%E8%B3%87%E7%94%A2%E8%B2%A0%E5%82%B5%E7%B5%90%E6%A7%8B) The Group primarily funds its operations through internal cash flow and bank loans; as of June 30, 2025, non-current assets mainly comprised fixed assets, investment properties, and land use rights, while current assets primarily included cash, inventory, and accounts receivable - The Group primarily funds its operations through internally generated cash flow and bank loans[41](index=41&type=chunk) - As of June 30, 2025, non-current assets amounted to **RMB 2,120,597,205.08**, primarily comprising fixed assets, investment properties, and land use rights[41](index=41&type=chunk) - Current assets amounted to **RMB 4,287,817,607.75**, primarily including cash and cash equivalents, inventory, and accounts receivable[41](index=41&type=chunk) [Liabilities and Asset Pledges](index=19&type=section&id=%E8%B2%A0%E5%82%B5%E5%8F%8A%E8%B3%87%E7%94%A2%E6%8A%B5%E6%8A%BC) As of June 30, 2025, the Group's total borrowings were **RMB 2,645,639,091.44**, including bank loans factored against accounts receivable and unsecured bank loans, with annual interest rates ranging from **2.35%** to **4.50%**; some guarantee deposits secured notes payable - The Group's total borrowings amounted to **RMB 2,645,639,091.44**, including bank loans factored against accounts receivable and unsecured bank loans[42](index=42&type=chunk) - All bank loans carried annual interest rates ranging from **2.35%** to **4.50%**[42](index=42&type=chunk) - Guarantee deposits of **RMB 21,567,527.88** secured notes payable of approximately **RMB 214,246,957.80**[42](index=42&type=chunk) [Financial Ratios](index=19&type=section&id=%E8%B2%A1%E5%8B%99%E6%AF%94%E7%8E%87) As of June 30, 2025, the Group's asset-liability ratio was approximately **76.8%**, and the capital-to-debt ratio was approximately **3.3 times**, both showing an increase from the prior year Financial Ratios | Indicator | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Asset-Liability Ratio | 76.8% | 75.9% | | Capital-to-Debt Ratio | 3.3 times | - | [Foreign Exchange Risk](index=19&type=section&id=%E5%A4%96%E5%8C%AF%E9%A2%A8%E9%9A%AA) All of the Group's operating income and expenses are primarily denominated in RMB, and its operations and cash flows were not significantly affected by currency exchange rate fluctuations during the reporting period - All of the Group's operating income and expenses are primarily denominated in RMB[45](index=45&type=chunk) - During the reporting period, the Group's operations and cash flows were not significantly affected by currency exchange rate fluctuations[46](index=46&type=chunk) [Employee Information](index=20&type=section&id=%E5%93%A1%E5%B7%A5%E6%83%85%E6%B3%81) As of June 30, 2025, the Group's total number of employees was **3,837**, a decrease from the prior year, with total staff costs for the reporting period amounting to **RMB 327,370,218.17**, slightly higher than the prior year Employee Information | Item | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Total Employees | 3,837 employees | 4,260 employees | | Total Staff Costs (RMB) | 327,370,218.17 | 323,702,437.00 | - Employee remuneration is determined based on position, responsibilities, experience, performance, and market levels to maintain competitiveness[47](index=47&type=chunk) [Contingent Liabilities](index=20&type=section&id=%E6%88%96%E6%9C%89%E8%B2%A0%E5%82%B5) As of June 30, 2025, the Group had no significant contingent liabilities - As of June 30, 2025, the Group had no significant contingent liabilities[48](index=48&type=chunk) [Significant Litigation](index=20&type=section&id=%E9%87%8D%E5%A4%A7%E8%A8%B4%E8%A8%9F) The Group is involved in a land expropriation and compensation agreement dispute with the People's Government of Guanzhuang Township, Chaoyang District, Beijing; the first instance judgment rejected the company's claims, while the second instance ruled to overturn the first instance judgment and remand for retrial, with legal proceedings ongoing - In July 2022, the company filed a lawsuit against Guanzhuang Township Government and Nonggongshang Company, seeking to declare the land compensation agreement invalid and reclaim compensation fees of **RMB 45,132,000** plus interest[49](index=49&type=chunk) - The first instance court ruled that the company pay land leveling fees and restore the land to arable conditions, rejecting all of the company's claims[49](index=49&type=chunk)[50](index=50&type=chunk) - The second instance court ruled to overturn the first instance judgment and remand for retrial, with retrial legal proceedings still ongoing as of the announcement date[50](index=50&type=chunk) [Outlook and Future Strategies](index=21&type=section&id=%E5%B1%95%E6%9C%9B%E8%88%87%E6%9C%AA%E4%BE%86%E7%AD%96%E7%95%A5) [Overall Outlook](index=21&type=section&id=%E7%B8%BD%E9%AB%94%E5%B1%95%E6%9C%9B) The Group anticipates strong resilience and great potential in China's economy in the second half of 2025, and will continue to solidify its foundation for high-quality development, driven by reform and innovation, focusing on brand building, enhancing product and service capabilities, strengthening core businesses, and promoting enterprise transformation and upgrading - China's economy is expected to maintain strong resilience and significant development potential in the second half of 2025[51](index=51&type=chunk) - The Group will continue to solidify its foundation for high-quality development, addressing challenges through reform and innovation, focusing on brand building, promoting dual empowerment of product and service capabilities, strengthening core businesses, and striving for new breakthroughs in enterprise transformation and upgrading[51](index=51&type=chunk) [Retail Business Outlook](index=21&type=section&id=%E9%9B%B6%E5%94%AE%E6%A5%AD%E5%8B%99%E5%B1%95%E6%9C%9B) The retail business aims to enhance customer experience, employee well-being, and establish benchmark retail stores in Beijing, deepening brand building, precisely matching differentiated product demands, strengthening digital intelligence empowerment, and reinforcing talent pipeline development - Aiming to enhance customer experience, improve employee well-being, and establish benchmark retail stores in Beijing, the Group will further deepen brand building[51](index=51&type=chunk) - Precisely match differentiated product demands, comprehensively enhance the core competitiveness of targeted categories; continuously optimize business systems, strengthen digital intelligence empowerment; and reinforce talent pipeline development[51](index=51&type=chunk) [Wholesale Business Outlook](index=21&type=section&id=%E6%89%B9%E7%99%BC%E6%A5%AD%E5%8B%99%E5%B1%95%E6%9C%9B) The wholesale business will focus on high-quality development, accelerating central kitchen construction, promoting standardization across categories, expediting new ready-to-eat product development, building an efficient group meal supply chain, and fostering community canteen business to open new growth avenues - Focusing on high-quality development, accelerating central kitchen construction, and promoting standardization across various categories[51](index=51&type=chunk) - Accelerate the development of new ready-to-eat product categories, build an efficient group meal supply chain, promote the development of community canteen businesses, and open new growth avenues[51](index=51&type=chunk) [Events During the Reporting Period](index=21&type=section&id=%E5%A0%B1%E5%91%8A%E6%9C%9F%E9%96%93%E5%85%A7%E4%BA%8B%E9%A0%85) [Changes in Board Members](index=21&type=section&id=%E8%91%A3%E4%BA%8B%E6%9C%83%E6%88%90%E5%93%A1%E8%AE%8A%E6%9B%B4) At the Annual General Meeting on May 16, 2025, the company approved resolutions to change directors, appointing new executive, non-executive, and independent non-executive directors, and adjusting Board committee member roles - Zhang Liwei, Wang Hong, Zhang Hongbo, and Yang Wensheng were appointed as executive directors; Zhang Yan and Li Ying were appointed as non-executive directors; Ge Wenda, Wang Liping, and He Mingke were appointed as independent non-executive directors[52](index=52&type=chunk) - Mr. Li Jianwen was not re-elected as a non-executive director, Mr. Chen Liping was not re-elected as an independent non-executive director, and Mr. Chen no longer serves as Chairman of the Board Nomination Committee and a member of the Audit and Remuneration Committees[53](index=53&type=chunk) - Mr. He Mingke was appointed as Chairman of the Board Nomination Committee, and a member of the Audit and Remuneration Committees[53](index=53&type=chunk) [Events After the Reporting Period](index=22&type=section&id=%E5%A0%B1%E5%91%8A%E6%9C%9F%E5%BE%8C%E4%BA%8B%E9%A0%85) [No Significant Events](index=22&type=section&id=%E7%84%A1%E9%87%8D%E5%A4%A7%E4%BA%8B%E9%A0%85) As of the announcement date, no other significant events affecting the Group's operations and financial performance occurred after the reporting period - As of the announcement date, no other significant events affecting the Group's operations and financial performance occurred after the reporting period[54](index=54&type=chunk) [Other Information](index=22&type=section&id=%E5%85%B6%E4%BB%96%E8%B3%87%E6%96%99) [Corporate Governance](index=22&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB) During the reporting period, the company applied and complied with the principles and code provisions of the Listing Rules' Corporate Governance Code, with a deviation in the director rotation mechanism; all directors confirmed compliance with the standard code for securities transactions - During the reporting period, the company applied and complied with the principles and all code provisions of Part 2 of Appendix C1, Corporate Governance Code, under the Listing Rules[55](index=55&type=chunk) - The company's articles of association currently do not explicitly stipulate a director rotation mechanism, thus deviating from Code Provision B.2.2 of the Corporate Governance Code[55](index=55&type=chunk) - All directors confirmed their compliance with the standards for securities transactions set out in the Model Code for Securities Transactions by Directors of Listed Issuers and the company's code of conduct during the reporting period[56](index=56&type=chunk) [Audit Committee Report](index=23&type=section&id=%E5%AF%A9%E6%A0%B8%E5%A7%94%E5%93%A1%E6%9C%83%E5%A0%B1%E5%91%8A) The company's Audit Committee reviewed the Group's unaudited interim consolidated results for 2025 and deemed them compliant with applicable accounting standards, HKEX requirements, and Hong Kong legal provisions - The Audit Committee considered and reviewed the accounting principles and methods adopted by the Group with management and independent auditors, and discussed matters such as internal control and financial reporting[57](index=57&type=chunk) - The Audit Committee believes that the Group's interim results announcement for the six months ended June 30, 2025, complies with applicable accounting standards, HKEX requirements, and Hong Kong legal provisions, and appropriate disclosures have been made[57](index=57&type=chunk) [Disclosure of Interests](index=23&type=section&id=%E6%AC%8A%E7%9B%8A%E6%8A%AB%E9%9C%B2) This section discloses the interests of directors, chief executives, and substantial shareholders in the company's shares, including holdings of domestic shares and H shares [Interests of Directors and Chief Executives](index=23&type=section&id=%E8%91%A3%E4%BA%8B%E5%8F%8A%E4%B8%BB%E8%A6%81%E8%A1%8C%E6%94%BF%E4%BA%BA%E5%93%A1%E6%AC%8A%E7%9B%8A) As of June 30, 2025, Zhang Liwei, Wang Hong, and Zhang Hongbo held domestic shares in the company, representing **0.10%**, **0.05%**, and **0.02%** of the total share capital, respectively Interests of Directors and Chief Executives (Shares) | Name | Capacity | Number of Domestic Shares Held | Approximate % of Total Issued Domestic Shares | Approximate % of Total Issued Share Capital | | :--- | :--- | :--- | :--- | :--- | | Zhang Liwei | Individual | 400,100 | 0.17 | 0.10 | | Wang Hong | Individual | 186,696 | 0.08 | 0.05 | | Zhang Hongbo | Individual | 100,000 | 0.04 | 0.02 | - Save as disclosed above, none of the company's directors, chief executives, or their associates had any disclosable interests or short positions in the shares, underlying shares, or debentures of the company or any associated corporation[59](index=59&type=chunk) [Interests of Substantial Shareholders](index=24&type=section&id=%E4%B8%BB%E8%A6%81%E8%82%A1%E6%9D%B1%E6%AC%8A%E7%9B%8A) As of June 30, 2025, Beijing Chaofu State-owned Assets Management Co., Ltd. was the company's largest shareholder, holding **72.77%** of domestic shares, representing **40.61%** of total share capital; China Galaxy International Asset Management (Hong Kong) Co., Limited and its affiliates held **13.71%** of H shares Interests of Substantial Shareholders (Domestic Shares) | Name | Capacity | Number of Domestic Shares Held | Approximate % of Total Issued Domestic Shares | Approximate % of Total Issued Share Capital | | :--- | :--- | :--- | :--- | :--- | | Beijing Chaofu State-owned Assets Management Co., Ltd. | Beneficial Owner | 167,409,808 | 72.77 | 40.61 | Interests of Substantial Shareholders (H Shares) | Name | Number of Issued H Shares Held | Approximate % of Total Issued H Shares | Approximate % of Total Issued Share Capital | | :--- | :--- | :--- | :--- | | China Galaxy International Asset Management (Hong Kong) Co., Limited | 24,970,000(L) | 13.71 | 6.06 | | China Galaxy International SPC (acting for and on behalf of China Galaxy Value Fund I SP) | 24,970,000(L) | 13.71 | 6.06 | - Save as disclosed above, no other person (other than the company's directors or chief executives) had any disclosable interests or short positions in the shares, underlying shares, or debentures of the company[63](index=63&type=chunk) [Dealings in Listed Securities](index=26&type=section&id=%E4%B8%8A%E5%B8%82%E8%AD%89%E5%88%B8%E4%BA%A4%E6%98%93) During the reporting period, the company held no treasury shares, and neither the company nor any of its subsidiaries purchased, redeemed, or sold any of the company's listed securities - During the reporting period, the company held no treasury shares[64](index=64&type=chunk) - During the reporting period, neither the company nor any of its subsidiaries purchased, redeemed, or sold any of the company's listed securities[64](index=64&type=chunk) [Material Investments](index=26&type=section&id=%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B3%87) The company had no material investments (including those representing 5% or more of the Group's total assets) during the reporting period - The company had no material investments (including those representing **5%** or more of the Group's total assets) during the reporting period[65](index=65&type=chunk) [Material Acquisitions and Disposals](index=26&type=section&id=%E9%87%8D%E5%A4%A7%E6%94%B6%E8%B3%BC%E5%92%8C%E5%87%BA%E5%94%AE) During the reporting period, the Group had no material acquisitions or disposals of subsidiaries, associates, or joint ventures - During the reporting period, the Group had no material acquisitions or disposals of subsidiaries, associates, or joint ventures[66](index=66&type=chunk) [Board Information](index=26&type=section&id=%E8%91%A3%E4%BA%8B%E6%9C%83%E4%BF%A1%E6%81%AF) This announcement was signed by Chairman Mr. Zhang Liwei and lists all executive, non-executive, and independent non-executive directors as of the announcement date - This announcement was signed by Chairman Mr. Zhang Liwei[67](index=67&type=chunk) - As of the announcement date, the executive directors are Zhang Liwei, Wang Hong, Zhang Hongbo, and Yang Wensheng; non-executive directors are Zhang Yan and Li Ying; and independent non-executive directors are Ge Wenda, Wang Liping, and He Mingke[68](index=68&type=chunk)

[Financial and Operating Summary](index=1&type=section&id=%E8%B2%A1%E5%8B%99%E5%8F%8A%E7%B6%93%E7%87%9F%E6%91%98%E8%A6%81) This section highlights the company's interim financial and operating performance, showcasing significant growth in key metrics for the period [Interim Performance Highlights](index=1&type=section&id=%E4%B8%AD%E6%9C%9F%E6%A5%AD%E7%B8%BE%E4%BA%AE%E9%BB%9E) For the six months ended June 30, 2025, Locang Logistics Co., Ltd. reported significant growth in revenue and profit attributable to shareholders, a substantial increase in basic earnings per share, and a notable rise in container throughput for cross-border logistics services Key Financial and Operating Data for H1 2025 | Metric | For the six months ended June 30, 2025 (RMB millions) | | :--- | :--- | | Revenue | 905.0 | | Profit attributable to shareholders | 127.8 | | Basic earnings per share | RMB0.19 | | Cross-border logistics service container throughput (TEUs) | 197,195 | [Interim Condensed Consolidated Financial Statements](index=2&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E5%90%88%E4%BD%B5%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8) This section presents the company's interim condensed consolidated financial statements, including the statement of profit or loss and other comprehensive income, and the statement of financial position [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=%E7%B0%A1%E6%98%8E%E5%90%88%E4%BD%B5%E6%90%8D%E7%9B%8A%E5%8F%8A%E5%85%B6%E4%BB%96%E5%85%A8%E9%9D%A2%E6%94%B6%E5%85%A5%E8%A1%A8) For the six months ended June 30, 2025, the company achieved substantial growth in revenue and profit for the period, primarily driven by a significant increase in other income and gains, leading to a substantial rise in basic earnings per share Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income Summary | Metric | June 30, 2025 (RMB thousands) | June 30, 2024 (RMB thousands) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 904,984 | 754,238 | 20.0% | | Gross profit | 82,397 | 68,104 | 21.0% | | Other income and gains | 91,126 | 5,021 | 1715.0% | | Profit before tax | 128,051 | 13,005 | 884.6% | | Profit for the period | 127,813 | 12,806 | 898.1% | | Profit attributable to owners of the parent | 111,300 | 9,393 | 1085.9% | | Basic earnings per share | RMB0.19 | RMB0.02 | 850.0% | - Total comprehensive income for the period significantly increased from **RMB22,242 thousand** in the same period of 2024 to **RMB122,513 thousand** in 2025, representing a **450% growth**[5](index=5&type=chunk) [Condensed Consolidated Statement of Financial Position](index=4&type=section&id=%E7%B0%A1%E6%98%8E%E5%90%88%E4%BD%B5%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) As of June 30, 2025, the company's total non-current assets increased, while total current assets slightly decreased, and total current liabilities significantly rose, resulting in a reduction in net current assets, though total equity and net assets maintained stable growth Condensed Consolidated Statement of Financial Position Summary | Metric | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Total non-current assets | 1,039,417 | 916,889 | 13.4% | | Total current assets | 969,814 | 1,006,675 | -3.7% | | Total current liabilities | 393,101 | 293,083 | 34.1% | | Net current assets | 576,713 | 713,592 | -19.1% | | Net assets | 1,557,897 | 1,551,635 | 0.4% | | Total equity | 1,557,897 | 1,551,635 | 0.4% | - Investment in an associate significantly increased from **RMB626 thousand** as of December 31, 2024, to **RMB29,043 thousand** as of June 30, 2025[6](index=6&type=chunk) - Trade receivables increased from **RMB107,605 thousand** as of December 31, 2024, to **RMB143,096 thousand** as of June 30, 2025, representing a **33% increase**[6](index=6&type=chunk) [Notes to the Financial Statements](index=6&type=section&id=%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8%E9%99%84%E8%A8%BB) This section provides detailed explanations of the company's accounting policies, segment information, revenue breakdown, and other financial statement components [Company Information](index=6&type=section&id=%E5%85%AC%E5%8F%B8%E8%B3%87%E6%96%99) Locang Logistics Co., Ltd. was incorporated in the Cayman Islands, listed on the Main Board of the Hong Kong Stock Exchange on September 25, 2023, primarily provides integrated cross-border logistics services, and is ultimately controlled by Mr. Xu Xin, Ms. Li Yan, and Ms. Liu Quanxiang - The company is an investment holding company, with its subsidiaries primarily engaged in providing integrated cross-border logistics services[8](index=8&type=chunk) - The ultimate controlling shareholders are Mr. Xu Xin, Ms. Li Yan, and Ms. Liu Quanxiang[9](index=9&type=chunk) [Basis of Preparation and Accounting Policies](index=6&type=section&id=%E7%B7%A8%E8%A3%BD%E5%9F%BA%E6%BA%96%E5%8F%8A%E6%9C%83%E8%A8%88%E6%94%BF%E7%AD%96) The interim condensed consolidated financial information is prepared in accordance with IAS 34 and consistent with the accounting policies adopted for the annual consolidated financial statements for the year ended December 31, 2024, with the initial adoption of amended IFRS 21 having no material impact on the Group - The interim condensed consolidated financial information is prepared in accordance with International Accounting Standard 34 Interim Financial Reporting and should be read in conjunction with the Group's annual consolidated financial statements for the year ended December 31, 2024[10](index=10&type=chunk) - The initial adoption of amended IFRS 21 (Amendments) "Lack of Exchangeability" had no impact on the interim condensed consolidated financial information, as the Group's transactional and functional currencies are convertible[11](index=11&type=chunk)[12](index=12&type=chunk) [Operating Segment Information](index=7&type=section&id=%E7%B6%93%E7%87%9F%E5%88%86%E9%83%A8%E8%B3%87%E6%96%99) The Group organizes its business units by products and services, with only one reportable operating segment, deriving revenue primarily from mainland China, and no single major customer accounts for more than 10% of revenue - The Group has only one reportable operating segment, and management monitors overall results to make decisions on resource allocation and performance assessment[13](index=13&type=chunk) Revenue from External Customers (by Geographical Location) | Region | June 30, 2025 (RMB thousands) | June 30, 2024 (RMB thousands) | | :--- | :--- | :--- | | Mainland China | 746,820 | 697,642 | | Others | 158,164 | 56,596 | | Total | 904,984 | 754,238 | - For the six months ended June 30, 2025, no single major customer accounted for **10% or more** of the Group's revenue[16](index=16&type=chunk) [Revenue Analysis](index=7&type=section&id=%E6%94%B6%E5%85%A5%E5%88%86%E6%9E%90) The Group's revenue primarily stems from contracts with customers, with vessel chartering income also being a significant component, both of which have achieved growth Revenue Source Analysis | Revenue Source | June 30, 2025 (RMB thousands) | June 30, 2024 (RMB thousands) | | :--- | :--- | :--- | | Revenue from contracts with customers | 861,156 | 713,895 | | Vessel chartering income | 43,828 | 40,343 | | Total | 904,984 | 754,238 | [Components of Profit Before Tax](index=8&type=section&id=%E9%99%A4%E7%A8%85%E5%89%8D%E6%BA%A2%E5%88%A9%E6%A7%8B%E6%88%90) The composition of profit before tax indicates that cost of services, depreciation, and amortization are major expenses, while interest income and gains from disposal of property, plant and equipment significantly contribute to profit Key Items in Profit Before Tax Composition | Item | June 30, 2025 (RMB thousands) | June 30, 2024 (RMB thousands) | | :--- | :--- | :--- | | Cost of services provided | 783,924 | 641,769 | | Depreciation of property, plant and equipment | 29,639 | 22,906 | | Depreciation of right-of-use assets | 15,776 | 15,085 | | Interest income | (13,635) | (3,295) | | Gain/(loss) on disposal of property, plant and equipment | (61,483) | 5,115 | - Net impairment loss on financial assets changed from a **RMB4,205 thousand** reversal in 2024 to a **RMB2,370 thousand** net impairment loss on trade receivables and a **RMB10,998 thousand** reversal on other receivables in 2025[18](index=18&type=chunk) [Finance Costs](index=8&type=section&id=%E8%B2%A1%E5%8B%99%E6%88%90%E6%9C%AC) Finance costs increased during the period, primarily comprising interest on bank and other borrowings and interest on lease liabilities Finance Costs Analysis | Item | June 30, 2025 (RMB thousands) | June 30, 2024 (RMB thousands) | | :--- | :--- | :--- | | Interest on bank and other borrowings | 2,929 | 1,509 | | Interest on lease liabilities | 2,274 | 2,689 | | Total | 5,203 | 4,198 | [Income Tax Expense](index=9&type=section&id=%E6%89%80%E5%BE%97%E7%A8%85%E9%96%8B%E6%94%AF) The Group's income tax expense primarily originates from mainland China, with no assessable profits in Hong Kong, and certain mainland Chinese subsidiaries benefiting from preferential tax rates for small and micro-enterprises - The company is not subject to income tax in the Cayman Islands, and Hong Kong subsidiaries are subject to profits tax at a rate of **16.5%**[21](index=21&type=chunk) - Mainland China subsidiaries are subject to corporate income tax at a statutory rate of **25%**, with some small and micro-enterprises enjoying a **75% reduction** on the first **RMB1,000,000** of annual assessable income[21](index=21&type=chunk) Total Income Tax Expense | Item | June 30, 2025 (RMB thousands) | June 30, 2024 (RMB thousands) | | :--- | :--- | :--- | | Current tax: Mainland China | 226 | 87 | | Deferred | 12 | 112 | | Total tax expense for the period | 238 | 199 | [Dividends](index=9&type=section&id=%E8%82%A1%E6%81%AF) The Board of Directors resolved not to declare an interim dividend for the six months ended June 30, 2025 - The Board of Directors resolved not to declare an interim dividend for the six months ended June 30, 2025 (for the six months ended June 30, 2024: nil)[23](index=23&type=chunk) [Earnings Per Share](index=9&type=section&id=%E6%AF%8F%E8%82%A1%E7%87%9F%E5%88%A9) Basic earnings per share significantly increased, primarily due to a substantial rise in profit attributable to ordinary equity holders of the parent company, with retrospective adjustments made for the share split effective July 28, 2025 - Basic earnings per share is calculated based on the profit attributable to ordinary equity holders of the parent company for the period and the weighted average number of **572,538,312** ordinary shares outstanding during the period[24](index=24&type=chunk) - On July 28, 2025, the company conducted a 1-for-2 share split, and the calculation of basic and diluted earnings per share for all presented periods has been retrospectively adjusted[24](index=24&type=chunk) Basic Earnings Per Share Calculation Details | Item | June 30, 2025 (RMB thousands) | June 30, 2024 (RMB thousands) | | :--- | :--- | :--- | | Profit attributable to ordinary equity holders of the parent for basic EPS calculation | 111,300 | 9,393 | | Weighted average number of ordinary shares outstanding for basic EPS calculation | 572,538,312 | 572,538,312 | [Trade Receivables](index=10&type=section&id=%E8%B2%BF%E6%98%93%E6%87%89%E6%94%B6%E6%AC%BE%E9%A0%85) As of June 30, 2025, total trade receivables increased, with the majority concentrated in the 1 to 3-month aging bracket Trade Receivables Aging Analysis | Aging | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Within 1 month | 67,719 | 62,696 | | 1 to 3 months | 55,371 | 31,657 | | 3 to 6 months | 13,262 | 7,887 | | 6 to 12 months | 6,744 | 5,365 | | Total | 143,096 | 107,605 | [Trade Payables](index=10&type=section&id=%E8%B2%BF%E6%98%93%E6%87%89%E4%BB%98%E6%AC%BE%E9%A0%85) As of June 30, 2025, total trade payables decreased, primarily settled within one year and non-interest bearing Trade Payables Aging Analysis | Aging | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Within 1 year | 95,107 | 123,969 | | Over 1 year | 15,811 | 11,469 | | Total | 110,918 | 135,438 | - Trade payables are non-interest bearing and generally settled within **30 to 60 days**[28](index=28&type=chunk) [Business Review](index=11&type=section&id=%E6%A5%AD%E5%8B%99%E5%9B%9E%E9%A1%A7) This section provides an overview of the Group's business segments, operational performance, and strategic outlook, focusing on cross-border logistics and vessel chartering services [Business Segments Overview](index=11&type=section&id=%E6%A5%AD%E5%8B%99%E6%A2%9D%E7%B7%9A%E6%A6%82%E8%A6%BD) The Group primarily operates two business segments: cross-border logistics services and vessel chartering services, with the flexibility to adjust strategies for allocating transportation resources - The Group primarily operates two business segments: cross-border logistics services and vessel chartering services[29](index=29&type=chunk) - The Group's management team can timely adjust service supply strategies and business focus, flexibly allocating transportation resources between the two business segments[30](index=30&type=chunk) [Cross-border Logistics Services](index=11&type=section&id=%E8%B7%A8%E5%A2%83%E7%89%A9%E6%B5%81%E6%9C%8D%E5%8B%99) During the period, cross-border logistics service volume significantly grew, primarily provided through third-party shipping companies, with expanded overseas warehousing services, though average prices decreased due to falling market freight rates - Self-operated cross-border logistics services accounted for approximately **4.7%** of cross-border logistics service revenue, primarily for bulk and general cargo transportation between China and Africa, with a service volume of **50,733 freight tons** and an average price of **RMB836.5 per freight ton**[30](index=30&type=chunk) - Cross-border ocean freight services provided by third parties amounted to **197,195 TEUs**, higher than **138,335 TEUs** in the same period of 2024, mainly due to business expansion[30](index=30&type=chunk) - The average price per TEU for cross-border ocean freight provided by third parties decreased from approximately **RMB4,129.8** in the same period of 2024 to approximately **RMB3,774.9** in the current period, primarily due to falling market freight rates[30](index=30&type=chunk) - The Group provided overseas warehousing services during the period to expand its capabilities in cargo collection, warehousing and sorting, customs clearance, warehousing transshipment, and last-mile delivery[30](index=30&type=chunk) [Vessel Chartering Services](index=11&type=section&id=%E8%88%B9%E8%88%B6%E5%87%BA%E7%A7%9F%E6%9C%8D%E5%8B%99) Vessel chartering service revenue remained stable during the period, with the average daily charter rate increasing due to the disposal of lower-rate vessels, though charter rates are subject to market supply and demand fluctuations - During the period, the Group chartered out **three vessels** and generated revenue of **RMB43.8 million**[31](index=31&type=chunk) - The average daily charter rate for the period was approximately **RMB101,262.7**, higher than approximately **RMB81,865.7** in the same period of 2024, mainly due to the disposal of two lower daily charter rate vessels in 2024[31](index=31&type=chunk) [Outlook and Strategy](index=12&type=section&id=%E5%B1%95%E6%9C%9B%E8%88%87%E6%88%B0%E7%95%A5) Facing a global economic slowdown, the company will focus on 'Belt and Road' infrastructure, cross-border e-commerce, and overseas warehouse expansion, while optimizing fleet operations and cost control to achieve steady growth and leading profitability - In market expansion, the company will deepen its presence in "Belt and Road" infrastructure projects, focusing on developing the African engineering logistics market[32](index=32&type=chunk) - The company will expand its cross-border e-commerce business, building a "sea freight + warehousing + distribution" full-chain logistics ecosystem, and accelerate its overseas warehouse布局[32](index=32&type=chunk) - In operational upgrades, the company will optimize the operating efficiency of its self-owned bulk and container fleet and implement refined cost control to enhance asset utilization[32](index=32&type=chunk) - Revenue is expected to grow steadily in the second half of 2025, with profitability maintained at a relatively leading industry level through differentiated operations and efficiency optimization[32](index=32&type=chunk) [Financial Review](index=12&type=section&id=%E8%B2%A1%E5%8B%99%E5%9B%9E%E9%A1%A7) This section provides a detailed analysis of the Group's financial performance, including revenue, cost of sales, gross profit, other income, and various expenses, highlighting key drivers of profitability [Revenue](index=12&type=section&id=%E6%94%B6%E5%85%A5) Total revenue for the period increased by 20.0% year-on-year, primarily driven by significant growth in cross-border logistics service revenue, particularly due to increased service volume and the development of overseas warehousing business, while import cargo trading was suspended Revenue Breakdown by Business Segment | Revenue Source | June 30, 2025 (RMB thousands) | June 30, 2024 (RMB thousands) | Percentage Change | | :--- | :--- | :--- | :--- | | Cross-border logistics services | 861,156 | 689,020 | 25.0% | | Vessel chartering services | 43,828 | 40,343 | 8.6% | | Others | – | 24,875 | -100.0% | | Total | 904,984 | 754,238 | 20.0% | - The increase in cross-border logistics service revenue was primarily attributable to an increase in service volume from **140,355 TEUs** to **197,195 TEUs**, and the growth of overseas warehousing business[34](index=34&type=chunk) - The company suspended import cargo trading under supply chain solution services in 2025[34](index=34&type=chunk) [Cost of Sales](index=13&type=section&id=%E9%8A%B7%E5%94%AE%E6%88%90%E6%9C%AC) Cost of sales increased by 19.9% year-on-year, primarily due to higher costs associated with cross-border logistics services, such as freight and port charges - Cost of sales increased by approximately **19.9%** from **RMB686.1 million** to **RMB822.6 million**[35](index=35&type=chunk) - The increase was primarily due to higher costs associated with the Group's cross-border logistics services, including freight and port charges[35](index=35&type=chunk) [Gross Profit and Gross Profit Margin](index=13&type=section&id=%E6%AF%9B%E5%88%A9%E5%8F%8A%E6%AF%9B%E5%88%A9%E7%8E%87) Gross profit increased by 21.0% year-on-year, with the gross profit margin remaining relatively stable and slightly improving - Gross profit increased by approximately **21.0%** from **RMB68.1 million** to **RMB82.4 million**[36](index=36&type=chunk) - Gross profit margin remained relatively stable at **9.0%** (2024) and **9.1%** (2025)[36](index=36&type=chunk) [Other Income and Gains](index=13&type=section&id=%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5%E5%8F%8A%E6%94%B6%E7%9B%8A) Other income and gains surged by 1,722.0%, primarily benefiting from non-recurring gains on disposal of vessels resulting from asset optimization - Other income and gains increased by approximately **1,722.0%** from **RMB5.0 million** to **RMB91.1 million**[37](index=37&type=chunk) - This was primarily due to non-recurring gains of approximately **RMB62.6 million** from asset optimization, including the optimization of vessel asset investment strategy[37](index=37&type=chunk) [Selling and Distribution Expenses](index=13&type=section&id=%E9%8A%B7%E5%94%AE%E5%8F%8A%E5%88%86%E9%8A%B7%E9%96%8B%E6%94%AF) Selling and distribution expenses increased by 33.0% year-on-year, primarily due to higher staff salaries and welfare expenses - Selling and distribution expenses increased by approximately **33.0%** from **RMB9.1 million** to **RMB12.1 million**[38](index=38&type=chunk) - This was primarily due to an increase in staff salaries and welfare expenses[38](index=38&type=chunk) [Administrative Expenses](index=13&type=section&id=%E8%A1%8C%E6%94%BF%E9%96%8B%E6%94%AF) Administrative expenses decreased by 21.9% year-on-year, primarily attributable to reduced consulting fees - Administrative expenses decreased by approximately **21.9%** from **RMB45.7 million** to **RMB35.7 million**[39](index=39&type=chunk) - This was primarily due to a reduction in consulting fees[39](index=39&type=chunk) [Other Expenses](index=13&type=section&id=%E5%85%B6%E4%BB%96%E9%96%8B%E6%94%AF) Other expenses significantly decreased by 84.9% year-on-year, primarily due to reduced losses on disposal of non-current assets related to the sale of containers - Other expenses decreased by approximately **84.9%** from **RMB5.3 million** to **RMB0.8 million**[40](index=40&type=chunk) - This was primarily due to a reduction in losses on disposal of non-current assets related to the sale of the Group's containers[40](index=40&type=chunk) [Finance Costs](index=14&type=section&id=%E8%B2%A1%E5%8B%99%E6%88%90%E6%9C%AC) Finance costs increased year-on-year, primarily due to a higher average monthly borrowing balance during the period - Finance costs increased from **RMB4.2 million** to **RMB5.2 million**[41](index=41&type=chunk) - This was primarily due to an increase in the average monthly borrowing balance during the period[41](index=41&type=chunk) [Net Reversal of Impairment Loss on Financial Assets](index=14&type=section&id=%E9%87%91%E8%9E%8D%E8%B3%87%E7%94%A2%E6%B8%9B%E5%80%BC%E虧%E6%90%8D%E5%9B%9E%E6%8B%A8%E6%B7%A8%E9%A1%8D) The period recorded a net reversal of impairment loss on financial assets, primarily due to the recovery of long-outstanding trade receivables - The period recorded a net reversal of impairment loss on financial assets of **RMB8.6 million** (compared to **RMB4.2 million** in the same period of 2024)[42](index=42&type=chunk) - This was primarily due to the recovery of long-outstanding trade receivables during the period[42](index=42&type=chunk) [Share of Loss of Associates](index=14&type=section&id=%E6%87%89%E4%BD%94%E8%81%AF%E7%87%9F%E5%85%AC%E5%8F%B8%E虧%E6%90%8D) The period recorded a share of loss of associates, primarily related to Locangwang International Logistics (Wuxi) Co., Ltd. and Locang (Shanghai) Investment Management Co., Ltd. - The Group recorded a share of loss of associates of **RMB0.2 million** during the period[43](index=43&type=chunk) - The loss is related to Locangwang International Logistics (Wuxi) Co., Ltd. and Locang (Shanghai) Investment Management Co., Ltd., in which the Group holds approximately **40.0%** equity interest[43](index=43&type=chunk) [Profit Before Tax](index=14&type=section&id=%E9%99%A4%E7%A8%85%E5%89%8D%E6%BA%A2%E5%88%A9) Profit before tax surged by 885.4% year-on-year, primarily due to the combined effects of revenue growth, a significant increase in other income and gains, and a reduction in certain expenses - Profit before tax increased by approximately **885.4%** from **RMB13.0 million** to **RMB128.1 million**[44](index=44&type=chunk) [Income Tax Expense](index=14&type=section&id=%E6%89%80%E5%BE%97%E7%A8%85%E9%96%8B%E6%94%AF) Income tax expense remained stable, primarily comprising PRC corporate income tax and Hong Kong profits tax - Income tax expense remained stable at **RMB0.2 million** for the current period, similar to **RMB0.2 million** in the same period of 2024[45](index=45&type=chunk) [Profit for the Period](index=14&type=section&id=%E6%9C%9F%E5%85%A7%E6%BA%A2%E5%88%A9) Profit for the period significantly increased by 898.4% year-on-year, reflecting a substantial improvement in the company's overall profitability - Profit for the period increased by approximately **898.4%** from **RMB12.8 million** to **RMB127.8 million**[46](index=46&type=chunk) [Liquidity, Financial and Capital Resources](index=14&type=section&id=%E6%B5%81%E5%8B%95%E8%B3%87%E9%87%91%E3%80%81%E8%B2%A1%E5%8B%99%E5%8F%8A%E8%B3%87%E6%9C%AC%E8%B3%87%E6%BA%90) This section details the Group's funding sources, liquidity position, borrowing activities, asset pledges, and financial risk management strategies [Sources and Uses of Funds](index=14&type=section&id=%E8%B3%87%E9%87%91%E4%BE%86%E6%BA%90%E8%88%87%E9%9C%80%E6%B1%82) The Group primarily meets its working capital and capital expenditure needs through proceeds from its listing and cash generated from operations, with plans to secure additional bank borrowings - The Group meets its working capital, capital expenditure, and other capital needs through proceeds from its listing on the Hong Kong Stock Exchange and cash generated from operations[47](index=47&type=chunk) - The Group plans to obtain additional bank and other borrowings for working capital purposes and will continue to evaluate potential financing opportunities[47](index=47&type=chunk) [Net Current Assets](index=15&type=section&id=%E6%B5%81%E5%8B%95%E8%B3%87%E7%94%A2%E6%B7%A8%E5%80%BC) As of June 30, 2025, the Group's net current assets decreased, primarily due to a decline in total current assets and an increase in total current liabilities - As of June 30, 2025, the Group's net current assets were **RMB576.7 million** (December 31, 2024: **RMB713.6 million**), a **19.1% decrease**[48](index=48&type=chunk) - Total current assets decreased by approximately **3.7%** to **RMB969.8 million**, while total current liabilities increased by approximately **34.1%** to **RMB393.1 million**[48](index=48&type=chunk) [Cash Position](index=15&type=section&id=%E7%8F%BE%E9%87%91%E7%8B%80%E6%B3%81) As of June 30, 2025, the Group's cash and bank balances decreased, primarily denominated in US dollars - As of June 30, 2025, the Group's cash and bank balances were **RMB572.0 million** (December 31, 2024: **RMB779.6 million**), a **26.7% decrease**[49](index=49&type=chunk) Cash and Bank Balances by Currency | Currency | June 30, 2025 (RMB thousands) | | :--- | :--- | | Denominated in RMB | 50,152 | | Denominated in USD | 502,630 | | Others | 19,297 | | Total | 572,005 | [Borrowings](index=15&type=section&id=%E5%80%9F%E6%AC%BE) As of June 30, 2025, the Group's total borrowings decreased, primarily denominated in RMB and USD, and bearing interest at fixed rates - As of June 30, 2025, the Group's borrowings were **RMB68.1 million** (December 31, 2024: **RMB84.7 million**), a **19.6% decrease**[50](index=50&type=chunk) Maturity Profile of Interest-bearing Bank and Other Borrowings | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Bank loans and overdrafts repayable: within one year | 32,952 | 41,595 | | Other borrowings repayable: within one year | 15,481 | 15,856 | | Other borrowings repayable: over one year | 19,640 | 27,204 | | Total | 68,073 | 84,655 | - Except for **RMB35.1 million** of borrowings denominated in USD, all other borrowings are denominated in RMB and bear interest at fixed rates ranging from **2.85% to 7.16%**[51](index=51&type=chunk) [Borrowing Costs](index=16&type=section&id=%E5%80%9F%E8%B2%B8%E6%88%90%E6%9C%AC) Interest on bank and other borrowings increased during the period, primarily due to a higher average monthly borrowing balance - Interest on bank and other borrowings increased from **RMB1.5 million** to **RMB2.9 million**[52](index=52&type=chunk) - This was primarily due to an increase in the average monthly borrowing balance[52](index=52&type=chunk) [Pledge of Assets](index=16&type=section&id=%E8%B3%87%E7%94%A2%E6%8A%B5%E6%8A%BC) The Group has pledged certain container vessels and deposits to secure bank and other borrowings and bank payment guarantees - As of June 30, 2025, the Group pledged container vessels with a carrying amount of **RMB53.5 million** to secure bank and other borrowings of **RMB35.1 million**[53](index=53&type=chunk) - Pledged deposits of **RMB11.2 million** served as collateral for bank payment guarantees[53](index=53&type=chunk) [Financial Instruments and Risk Management](index=17&type=section&id=%E9%87%91%E8%9E%8D%E5%B7%A5%E5%85%B7%E5%8F%8A%E9%A2%A8%E9%9A%AA%E7%AE%A1%E7%90%86) The Group's primary financial instruments include receivables, cash, and borrowings, facing interest rate, foreign currency, credit, and liquidity risks, managed with a conservative strategy that avoids derivative hedging - The Group's primary financial instruments include trade receivables, bills receivable, financial assets included in prepayments and other receivables, amounts due from related parties, cash and cash equivalents, and other payables and accrued expenses, interest-bearing other borrowings[54](index=54&type=chunk) - The main risks are interest rate risk, foreign currency risk, credit risk, and liquidity risk, managed with a conservative risk management strategy that does not use derivative instruments for hedging[54](index=54&type=chunk) [Interest Rate Risk](index=17&type=section&id=%E5%88%A9%E7%8E%87%E9%A2%A8%E9%9A%AA) The Group's interest rate risk primarily relates to other borrowings, with interest costs managed through fixed rates and no use of derivative financial instruments for hedging - The Group's exposure to the risk of changes in market interest rates primarily relates to its other borrowings[55](index=55&type=chunk) - The Group manages its interest costs by using fixed rates and does not use derivative financial instruments to hedge interest rate risk[55](index=55&type=chunk) [Foreign Currency Risk](index=17&type=section&id=%E5%A4%96%E5%B9%A3%E9%A2%A8%E9%9A%AA) The Group's transactional currency risk is minimal, with foreign exchange risk managed through close monitoring of exchange rate fluctuations - The Group's transactional currency risk is minimal as most of its operating units' sales and purchases are denominated in their respective functional currencies[56](index=56&type=chunk) - The Group manages foreign exchange risk by closely monitoring exchange rate movements[56](index=56&type=chunk) [Credit Risk](index=17&type=section&id=%E4%BF%A1%E8%B2%B8%E9%A2%A8%E9%9A%AA) The Group's credit risk primarily arises from trade receivables, amounts due from related parties, and cash, but is expected to be low due to diversified customers, continuous monitoring, and deposits held with major banks - The Group is exposed to credit risk in relation to its trade receivables, bills receivable, financial assets included in prepayments and other receivables, amounts due from related parties, and cash and cash equivalents[57](index=57&type=chunk) - No significant concentration of credit risk is expected due to cash being deposited with state-owned banks and other large and medium-sized listed banks, and a diversified customer base for trade receivables[57](index=57&type=chunk) [Liquidity Risk](index=17&type=section&id=%E6%B5%81%E5%8B%95%E8%B3%87%E9%87%91%E9%A2%A8%E9%9A%AA) The Group aims to balance funding continuity and flexibility by utilizing interest-bearing other borrowings, with cash flows continuously monitored - The Group aims to maintain a balance between funding continuity and flexibility by utilizing interest-bearing other borrowings[58](index=58&type=chunk) - Cash flows are continuously monitored[58](index=58&type=chunk) [Current Ratio and Gearing Ratio](index=18&type=section&id=%E6%B5%81%E5%8B%95%E6%AF%94%E7%8E%87%E5%8F%8A%E8%B3%87%E7%94%A2%E8%B2%A0%E5%80%B5%E6%AF%94%E7%8E%87) During the period, the current ratio decreased, and the gearing ratio increased, primarily due to a higher balance of amounts payable to a related party - As of June 30, 2025, the Group's current ratio was **2.5 times** (December 31, 2024: **3.4 times**)[59](index=59&type=chunk) - As of June 30, 2025, the Group's gearing ratio was **6.1%** (December 31, 2024: **5.5%**), with the increase primarily attributable to a higher balance of amounts payable to a related party[59](index=59&type=chunk) [Contingent Liabilities](index=18&type=section&id=%E6%88%96%E7%84%B6%E8%B2%A0%E5%80%B5) As of June 30, 2025, the Group had no significant contingent liabilities - As of June 30, 2025, the Group had no significant contingent liabilities[60](index=60&type=chunk) [Commitments](index=18&type=section&id=%E6%89%BF%E6%93%94) As of June 30, 2025, the Group's capital commitments primarily relate to the purchase of container vessels - As of June 30, 2025, the Group's capital commitments were **RMB1,554.8 million** (December 31, 2024: **RMB1,721.2 million**)[61](index=61&type=chunk) - The amount relates to the purchase of container vessels[61](index=61&type=chunk) [Investments and Capital Assets](index=18&type=section&id=%E6%8A%95%E8%B3%87%E8%88%87%E8%B3%87%E6%9C%AC%E8%B3%87%E7%94%A2) This section outlines the Group's significant acquisition and disposal activities, major investments, future investment plans, and the utilization of proceeds from its listing [Significant Acquisitions and Disposals](index=18&type=section&id=%E9%87%8D%E5%A4%A7%E6%94%B6%E8%B3%BC%E5%8F%8A%E5%87%BA%E5%94%AE) During the period, the Group did not undertake any significant acquisitions or disposals of subsidiaries, associates, or joint ventures - During the period, the Group did not undertake any significant acquisitions or disposals of subsidiaries, associates, or joint ventures[62](index=62&type=chunk) [Significant Investments](index=18&type=section&id=%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B3%87) During the period, the Group did not hold any significant investments - During the period, the Group did not hold any significant investments[63](index=63&type=chunk) [Future Investment Plans](index=18&type=section&id=%E6%9C%AA%E4%BE%86%E6%8A%95%E8%B3%87%E8%A8%88%E5%8A%83) The Group intends to utilize the net proceeds from its listing as per the prospectus, with no other significant future investment or capital asset plans beyond those disclosed - The Group intends to utilize the net proceeds from its listing as per the "Future Plans and Use of Proceeds" section in the prospectus[64](index=64&type=chunk) - As of June 30, 2025, the company had no other significant future investment or capital asset plans[64](index=64&type=chunk) [Use of Proceeds from Listing](index=18&type=section&id=%E4%B8%8A%E5%B8%82%E6%89%80%E5%BE%97%E6%AC%BE%E9%A0%85%E7%94%A8%E9%80%94) As of June 30, 2025, net proceeds from the listing have been partially used for establishing logistics facilities, digital technology upgrades, and strategic investments, with a portion remaining unutilized - The net proceeds from the listing totaled approximately **HKD95.1 million**, after deducting listing-related expenses[65](index=65&type=chunk) Use of Proceeds from Listing and Utilization Status | Purpose | Percentage of Net Proceeds as per Prospectus | Net Proceeds as of December 31, 2024, including partial exercise of over-allotment option (HKD millions) | Actual Use of Net Proceeds from January 1, 2025, to June 30, 2025 (HKD millions) | Unutilized Net Proceeds as of June 30, 2025 (HKD millions) | | :--- | :--- | :--- | :--- | :--- | | Establishing logistics facilities, including warehouses, container yards, purchasing trailers, and investing in warehouse, order, and transportation management software systems | 52.0% | 9.7 | 4.1 | 5.6 | | Expanding business coverage and global network | 4.0% | – | – | – | | Adopting digital technology and upgrading internet service systems to provide integrated cross-border logistics services | 7.0% | 5.2 | 1.2 | 4.0 | | Strategic investments and/or acquisitions of businesses or assets complementary to the Group's business | 20.0% | 3.5 | – | 3.5 | | Establishing a trailer transportation service matching platform | 7.0% | 6.7 | – | 6.7 | | General corporate purposes and working capital requirements | 10.0% | – | – | – | | Total | 100.0% | 25.1 | 5.3 | 19.8 | [Employees and Remuneration Policy](index=19&type=section&id=%E5%83%B1%E5%93%A1%E5%8F%8A%E8%96%AA%E9%85%AC%E6%94%BF%E7%AD%96) As of June 30, 2025, the Group had 367 full-time employees, with staff costs recognized as RMB34.6 million, offering competitive remuneration, mandatory social insurance, and enhancing employee skills through training and mentorship programs - As of June 30, 2025, the Group had **367 full-time employees**, with staff costs recognized as an expense of **RMB34.6 million**[67](index=67&type=chunk) - Remuneration packages include fixed salaries, allowances, and performance bonuses, determined based on qualifications, experience, capabilities, and market remuneration levels[67](index=67&type=chunk) - The Group contributes to mandatory social insurance and housing provident funds for employees and provides induction training, mentorship programs, and regular training sessions to enhance employee skills[67](index=67&type=chunk) [Events After Reporting Period](index=20&type=section&id=%E6%9C%9F%E5%BE%8C%E4%BA%8B%E9%A0%85) This section describes significant corporate actions that occurred after the reporting period, including a share split and changes in board lot size [Share Split](index=20&type=section&id=%E8%82%A1%E4%BB%BD%E5%88%86%E6%8B%86) The company implemented a 1-for-2 share split on July 28, 2025, where each existing share with a par value of US$0.0001 was split into two subdivided shares with a par value of US$0.00005 each - The share split became effective on **July 28, 2025**, where each existing share with a par value of **US$0.0001** was split into **two (2)** subdivided shares with a par value of **US$0.00005** each[68](index=68&type=chunk) [Change in Board Lot Size](index=20&type=section&id=%E6%9B%B4%E6%94%B9%E6%AF%8F%E6%89%8B%E8%B2%B7%E8%B3%A3%E5%96%AE%E4%BD%8D) Effective July 28, 2025, the board lot size for trading on the Stock Exchange changed from 200 existing shares to 300 subdivided shares - The board lot size for trading on the Stock Exchange changed from **200 existing shares** to **300 subdivided shares**, effective **July 28, 2025**[69](index=69&type=chunk) [Corporate Governance and Other Information](index=20&type=section&id=%E5%85%AC%E5%8F%B8%E6%B2%BB%E7%90%86%E8%88%87%E5%85%B6%E4%BB%96%E4%BF%A1%E6%81%AF) This section covers the company's compliance with corporate governance codes, securities dealing standards, audit committee review, and publication of interim results [Purchase, Sale or Redemption of Listed Securities](index=20&type=section&id=%E8%B3%BC%E8%B2%B7%E3%80%81%E5%87%BA%E5%94%AE%E6%88%96%E8%B4%96%E5%9B%9E%E4%B8%8A%E5%B8%82%E8%AD%89%E5%88%B8) Neither the company nor its subsidiaries purchased, sold, or redeemed any listed securities during the period, and no treasury shares were held at period-end - Neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed securities during the period[70](index=70&type=chunk) - As of June 30, 2025, the company did not hold any treasury shares[70](index=70&type=chunk) [Interim Dividend](index=20&type=section&id=%E4%B8%AD%E6%9C%9F%E8%82%A1%E6%81%AF) The Board of Directors does not recommend the payment of an interim dividend for the six months ended June 30, 2025 - The Board of Directors does not recommend the payment of an interim dividend for the six months ended June 30, 2025[71](index=71&type=chunk) [Compliance with Corporate Governance Code](index=20&type=section&id=%E9%81%B5%E5%AE%88%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%AE%88%E5%89%87) The company has adopted the Corporate Governance Code of the Hong Kong Stock Exchange, explaining that the Chairman and CEO roles are held by the same person, which is deemed beneficial for strategic execution and efficiency - The company has adopted the Corporate Governance Code set out in Appendix C1 Part 2 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited as its own corporate governance code[72](index=72&type=chunk) - Mr. Xu Xin holds both the Chairman of the Board and Chief Executive Officer positions, which the Board believes facilitates faster and more efficient formulation and execution of business strategies, with the Board's operations sufficient to maintain a balance of power[72](index=72&type=chunk) - Except as disclosed, the Board believes that the company has complied with all applicable code provisions set out in the Corporate Governance Code during the period[73](index=73&type=chunk) [Compliance with Model Code for Securities Transactions](index=21&type=section&id=%E9%81%B5%E5%AE%88%E8%AD%89%E5%88%B8%E4%BA%A4%E6%98%93%E6%A8%99%E6%BA%96%E5%AE%88%E5%89%87) The company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers, with all directors and relevant employees confirming compliance with the required standards during the period - The company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers, as set out in Appendix C3 of the Listing Rules, as a guide for directors' dealings in the company's securities[74](index=74&type=chunk) - All directors and relevant employees have confirmed their compliance with the required standards set out in the Model Code during the period[74](index=74&type=chunk) [Review by Audit Committee](index=21&type=section&id=%E5%AF%A9%E6%A0%B8%E5%A7%94%E5%93%A1%E6%9C%83%E5%AF%A9%E9%96%B1) The Audit Committee has reviewed the Group's unaudited interim results for the six months ended June 30, 2025, and concurred with management - The Audit Committee, comprising three independent non-executive directors, has reviewed the Group's unaudited interim results for the six months ended June 30, 2025[75](index=75&type=chunk) - The Audit Committee and the company's management have also reviewed and concurred with the accounting principles and practices adopted by the Group[75](index=75&type=chunk) [Publication of Interim Results and Report](index=21&type=section&id=%E5%88%8A%E7%99%BC%E4%B8%AD%E6%9C%9F%E6%A5%AD%E7%B8%BE%E5%8F%8A%E5%A0%B1%E5%91%8A) This interim results announcement has been published on the websites of Hong Kong Exchanges and Clearing Limited and the company, with the interim report to be dispatched to shareholders and posted on the aforementioned websites in due course - This interim results announcement has been published on the websites of Hong Kong Exchanges and Clearing Limited (www.hkexnews.hk) and the company (www.lcang.com)[76](index=76&type=chunk) - The company's interim report for the six months ended June 30, 2025, containing all information required by the Listing Rules, will be dispatched to shareholders and posted on the aforementioned websites in due course[76](index=76&type=chunk)

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其準確性或完 整性亦不發表任何聲明，並明確表示概不就因本公告全部或任何部分內容而產生或因依賴該等內容 而引致的任何損失承擔任何責任。 本公告載有涉及風險及不確定因素的前瞻性陳述。除歷史事實陳述以外的所有陳述均為前瞻性陳 述。該等陳述涉及已知及未知的風險、不確定因素及其他因素，當中部分並非本公司所能控制，且 可導致實際業績、表現或成果與前瞻性陳述所明示或暗示者存在重大差異。 閣下不應依賴前瞻性 陳述作為未來事件的預測。本公司概不負責更新或修訂任何前瞻性陳述，無論是否由於新資料、未 來事件或其他因素所致。 ADICON Holdings Limited 艾迪康控股有限公司 （於開曼群島註冊成立之有限公司） （股份代號：9860） 截 至2025年6月30日止六個月之 中期業績公告 董事會欣然宣佈本集團截至2025年6月30日止六個月之未經審核綜合中期業績以及 2024年同期之比較數字。 於本公告內，「我們」指本公司，如文義另有所指，則指本集團。本公告內所載的若 干金額及百分比數字已作出約整。任何表格、圖表或其他地方所列總數與金額總和 之間的 ...

[Company Overview](index=1&type=section&id=I.%20Company%20Overview) The company is a biopharmaceutical firm focused on the research, development, and commercialization of pharmaceutical products, with a strong pipeline and significant financial adjustments in the reporting period [Company Information](index=1&type=section&id=1.1%20Company%20Information) Antengene Corporation Limited, registered in the Cayman Islands, is primarily engaged in the R&D and commercialization of pharmaceutical products - Company Name: **Antengene Corporation Limited**[2](index=2&type=chunk) - Business Scope: Research and commercialization of pharmaceutical products[3](index=3&type=chunk) - Reporting Period: Unaudited condensed consolidated results for the six months ended June 30, 2025[3](index=3&type=chunk) [Financial Highlights](index=1&type=section&id=1.2%20Financial%20Highlights) For the six months ended June 30, 2025, revenue decreased by 12.5% year-on-year, but loss significantly narrowed by 54.3% due to reduced R&D, selling, and administrative expenses, with adjusted loss also decreasing by 52.2% Interim Condensed Consolidated Financial Highlights for the Six Months Ended June 30, 2025 | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 53,182 | 60,779 | -12.5% | | Other income and gains | 38,126 | 27,317 | +39.6% | | R&D costs | (79,935) | (130,841) | -38.9% | | Selling and distribution expenses | (36,990) | (56,028) | -34.0% | | Administrative expenses | (39,304) | (58,478) | -32.8% | | Loss for the period | (76,378) | (167,033) | -54.3% | | Adjusted loss for the period* | (72,858) | (152,567) | -52.2% | *Excluding equity-settled share-based payment expenses - Revenue decrease primarily due to 2023 December Selinexor's inclusion in the medical insurance catalog, followed by market demand rationalization, but **increased by RMB 22.0 million** in H1 2025 compared to H2 2024, reflecting steady growth[5](index=5&type=chunk) - Increase in other income and gains mainly attributed to **higher government grants**[5](index=5&type=chunk) - Reduction in R&D, selling and distribution, and administrative expenses primarily due to decreased drug development expenses, employee costs, and market development expenses, reflecting enhanced R&D efficiency and continuous cost control[5](index=5&type=chunk)[6](index=6&type=chunk) [Business Highlights](index=3&type=section&id=1.3%20Business%20Highlights) During the reporting period, the company achieved significant progress in its product pipeline and operations, including Selinexor's medical insurance inclusion and new indication approvals in multiple APAC regions, positive advancements in several clinical and preclinical assets, and plans to increase investment in AI for next-generation T-cell engager pipeline development - Selinexor (XPOVIO®) approved for inclusion in National Health Insurance in **Taiwan, China**, and received New Drug Application (NDA) approval for **three indications in Indonesia**[8](index=8&type=chunk) - Phase II CLINCH study for ATG-022 (Claudin 18.2 antibody-drug conjugate) is ongoing in Mainland China and Australia, with a global clinical collaboration with MSD to evaluate its efficacy in combination with KEYTRUDA®[8](index=8&type=chunk) - Phase I STAMINA trial for ATG-037 (CD73 inhibitor) completed, with plans to initiate Phase II; combination therapy showed **100% disease control rate** in CPI-resistant melanoma patients[11](index=11&type=chunk) - I/II phase TORCH-2 study data for ATG-008 (mTORC1/2 inhibitor) combined with toripalimab showed potential for significant clinical benefit in CPI-resistant cervical cancer patients[11](index=11&type=chunk) - Steady progress achieved with the company's novel "2+1" T-cell engager platform AnTenGager™, with plans to establish a dedicated AI department to accelerate the development of next-generation proprietary TCE pipeline[13](index=13&type=chunk) - The company adheres to a "combination and complementary" R&D strategy, focusing on discovering, developing, and commercializing global first-in-class, only-in-class, and/or best-in-class therapies[14](index=14&type=chunk) [Management Discussion and Analysis](index=6&type=section&id=II.%20Management%20Discussion%20and%20Analysis) This section provides an in-depth review of the company's vision, financial performance, pipeline advancements, R&D strategies, and future outlook, highlighting key achievements and strategic directions [Vision and Overview](index=6&type=section&id=2.1%20Vision%20and%20Overview) Antengene is an APAC biopharmaceutical company focused on innovative oncology drugs, committed to discovering, developing, and commercializing global first-in-class, only-in-class, and/or best-in-class therapies to improve patient lives, with a robust pipeline including one commercialized product and five clinical-stage projects - Company Vision: Discover, develop, and commercialize global first-in-class, only-in-class, and/or best-in-class therapies to treat patients across borders and improve their quality of life[15](index=15&type=chunk) - Company Positioning: A commercial-stage biopharmaceutical company in the Asia-Pacific region, focused on innovative oncology drugs since its operation in 2017[16](index=16&type=chunk) - R&D Pipeline: Includes **one commercial-stage product**, **five clinical-stage projects**, and multiple preclinical-stage projects, adopting a "combination and complementary" R&D strategy[16](index=16&type=chunk) - Selinexor (XPOVIO®) has received NDA approvals in multiple APAC regions[16](index=16&type=chunk) [Financial Performance Analysis](index=26&type=section&id=2.2%20Financial%20Performance%20Analysis) During the reporting period, the company's revenue decreased year-on-year, but strict cost control led to significant reductions in R&D, selling, and administrative expenses, resulting in a substantial narrowing of both loss for the period and adjusted loss, with increased government grants also contributing positively to other income and gains Key Financial Data for the Six Months Ended June 30, 2025 | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | YoY Change (RMB thousands) | | :--- | :--- | :--- | :--- | | Revenue | 53,182 | 60,779 | (7,597) | | Other income and gains | 38,126 | 27,317 | 10,809 | | R&D costs | (79,935) | (130,841) | 50,906 | | Selling and distribution expenses | (36,990) | (56,028) | 19,038 | | Administrative expenses | (39,304) | (58,478) | 19,174 | | Loss for the period | (76,378) | (167,033) | 90,655 | | Adjusted loss for the period | (72,858) | (152,567) | 79,709 | [Revenue and Gross Profit](index=26&type=section&id=2.2.1%20Revenue%20and%20Gross%20Profit) Revenue decreased from RMB 60.8 million in H1 2024 to RMB 53.2 million in H1 2025, primarily due to market demand rationalization after Selinexor's inclusion in medical insurance in December 2023, but showed steady growth compared to H2 2024 - Revenue decreased from **RMB 60.8 million** in H1 2024 to **RMB 53.2 million** in H1 2025, mainly impacted by market demand rationalization after medical insurance inclusion in December 2023[79](index=79&type=chunk) - Despite the year-on-year decrease, H1 2025 revenue **increased by RMB 22.0 million** compared to H2 2024, indicating steady growth and stable conditions[79](index=79&type=chunk) [Other Income and Gains](index=26&type=section&id=2.2.2%20Other%20Income%20and%20Gains) Other income and gains increased by RMB 10.8 million from RMB 27.3 million in H1 2024 to RMB 38.1 million in H1 2025, primarily due to increased government grants - Other income and gains increased by **RMB 10.8 million** from **RMB 27.3 million** in H1 2024 to **RMB 38.1 million** in H1 2025, mainly attributed to increased government grants[80](index=80&type=chunk) [Research and Development Costs](index=27&type=section&id=2.2.3%20Research%20and%20Development%20Costs) R&D costs decreased by RMB 50.9 million from RMB 130.8 million in H1 2024 to RMB 79.9 million in H1 2025, primarily due to reduced drug development expenses and R&D employee costs, reflecting improved R&D efficiency - R&D costs decreased by **RMB 50.9 million** from **RMB 130.8 million** in H1 2024 to **RMB 79.9 million** in H1 2025[81](index=81&type=chunk) - The decrease was mainly due to reduced drug development expenses and R&D employee costs, reflecting the gradual settlement of late-stage assets and improved R&D efficiency[81](index=81&type=chunk) R&D Cost Components | Component | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Employee costs | 36,695 | 51,327 | | - Equity-settled share-based payment expenses | 2,457 | 9,171 | | Depreciation and amortization | 2,790 | 6,312 | | Drug development expenses | 36,830 | 62,479 | | Professional fees | 342 | 7,574 | | Others | 3,278 | 3,149 | | **Total** | **79,935** | **130,841** | [Selling and Distribution Expenses](index=27&type=section&id=2.2.4%20Selling%20and%20Distribution%20Expenses) Selling and distribution expenses decreased by RMB 19.0 million from RMB 56.0 million in H1 2024 to RMB 37.0 million in H1 2025, mainly due to reduced market development expenses and commercial employee costs, reflecting enhanced promotion efficiency and continuous cost control - Selling and distribution expenses decreased by **RMB 19.0 million** from **RMB 56.0 million** in H1 2024 to **RMB 37.0 million** in H1 2025[83](index=83&type=chunk) - The decrease was mainly due to reduced market development expenses and commercial employee costs, reflecting enhanced promotion efficiency and continuous cost control[83](index=83&type=chunk) Selling and Distribution Expense Components | Component | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Employee costs | 9,157 | 12,603 | | - Equity-settled share-based payment expenses | 80 | 1,151 | | Market development expenses | 27,520 | 42,729 | | Depreciation and amortization | 171 | 317 | | Others | 142 | 379 | | **Total** | **36,990** | **56,028** | [Administrative Expenses](index=28&type=section&id=2.2.5%20Administrative%20Expenses) Administrative expenses decreased by RMB 19.2 million from RMB 58.5 million in H1 2024 to RMB 39.3 million in H1 2025, primarily due to reduced employee costs, reflecting improved operational efficiency - Administrative expenses decreased by **RMB 19.2 million** from **RMB 58.5 million** in H1 2024 to **RMB 39.3 million** in H1 2025[85](index=85&type=chunk) - The decrease was mainly due to reduced employee costs, reflecting improved operational efficiency[85](index=85&type=chunk) Administrative Expense Components | Component | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Employee costs | 20,707 | 33,714 | | - Equity-settled share-based payment expenses | 983 | 4,144 | | Professional fees | 6,717 | 9,878 | | Depreciation and amortization | 6,787 | 6,617 | | Others | 5,093 | 8,269 | | **Total** | **39,304** | **58,478** | [Loss for the Period and Adjusted Loss](index=28&type=section&id=2.2.6%20Loss%20for%20the%20Period%20and%20Adjusted%20Loss) Loss for the period significantly decreased from RMB 167.0 million in H1 2024 to RMB 76.4 million in H1 2025, primarily due to reduced R&D, selling and distribution, and administrative expenses, with adjusted loss also showing a substantial reduction - Loss for the period decreased from **RMB 167.0 million** in H1 2024 to **RMB 76.4 million** in H1 2025, mainly due to reduced R&D, selling and distribution, and administrative expenses[6](index=6&type=chunk) - Adjusted loss for the period (excluding equity-settled share-based payment expenses) decreased by **52.2%** from **RMB 152.6 million** in H1 2024 to **RMB 72.9 million** in H1 2025[7](index=7&type=chunk) Reconciliation of Loss and Adjusted Loss | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Loss for the period | (76,378) | (167,033) | | Add: Equity-settled share-based payment expenses | 3,520 | 14,466 | | **Adjusted loss for the period** | **(72,858)** | **(152,567)** | [Pipeline Progress](index=6&type=section&id=2.3%20Pipeline%20Progress) Antengene's pipeline focuses on oncology and autoimmune diseases, comprising one commercialized asset, five clinical-stage, and multiple preclinical-stage projects, with significant advancements in Selinexor's market access and other clinical candidates - The company's pipeline focuses on oncology and autoimmune diseases, including **one commercial-stage asset**, **five clinical-stage projects**, and multiple preclinical-stage projects[17](index=17&type=chunk) [Commercialized Products](index=8&type=section&id=2.3.1%20Commercialized%20Products) Selinexor (ATG-010, XPOVIO®), the company's first commercialized product, is an oral selective nuclear export inhibitor (SINE) for various hematological malignancies and solid tumors, achieving significant market access and new indication approvals in multiple APAC regions - Selinexor (ATG-010, XPOVIO®) is the company's first commercialized product, an oral Selective Nuclear Export Inhibitor (SINE) for treating various hematological malignancies and solid tumors[21](index=21&type=chunk) - In February 2025, XPOVIO® was approved for inclusion in the National Health Insurance in **Taiwan, China**; in March 2025, Indonesia's BPOM approved its NDA for **three indications**[8](index=8&type=chunk)[26](index=26&type=chunk)[27](index=27&type=chunk) - As of June 30, 2025, XPOVIO® has received NDA approvals in Mainland China, South Korea, Singapore, Australia, Malaysia, Thailand, Taiwan, China, Hong Kong, China, Macau, China, and Indonesia[27](index=27&type=chunk) - The company is conducting a Phase II/III registration trial in Mainland China for XPOVIO® in combination with R-GDP for rrDLBCL[27](index=27&type=chunk) [Other Clinical Stage Candidates](index=10&type=section&id=2.3.2%20Other%20Clinical%20Stage%20Candidates) Several clinical-stage candidates are progressing, including ATG-022, which received US FDA orphan drug designation and entered a global clinical collaboration with MSD, and ATG-037, which completed its Phase I trial - ATG-022 (Claudin 18.2 antibody-drug conjugate) Phase II CLINCH study is ongoing in China and Australia, and received **US FDA orphan drug designation** for gastric and pancreatic cancer[28](index=28&type=chunk) - In May 2025, a global clinical collaboration was established with MSD to evaluate the efficacy of ATG-022 in combination with KEYTRUDA® for advanced solid tumors[8](index=8&type=chunk)[28](index=28&type=chunk) - ATG-037 (CD73 inhibitor) Phase I STAMINA trial completed dosing, and the Ib/II phase has been initiated[29](index=29&type=chunk) - ATG-031 (CD24 antibody) PERFORM Phase I trial is undergoing dose escalation in the US[29](index=29&type=chunk) - ATG-101 (PD-L1x4-1BB bispecific antibody) Phase I study is undergoing dose escalation in Australia, China, and the US, and received **US FDA orphan drug designation** for pancreatic cancer[29](index=29&type=chunk) [Other Late-Stage Candidates](index=11&type=section&id=2.3.3%20Other%20Late-Stage%20Candidates) The I/II phase TORCH-2 study for ATG-008 (onatasertib, mTORC1/2 inhibitor) in combination with toripalimab has been completed, showing promising clinical benefits for CPI-resistant cervical cancer patients - ATG-008 (onatasertib, mTORC1/2 inhibitor) I/II phase TORCH-2 study in combination with toripalimab has been completed[30](index=30&type=chunk) - TORCH-2 study data showed an **Overall Response Rate (ORR) of 22.2%**, a **Disease Control Rate (DCR) of 85.2%**, and a **median Overall Survival (OS) of 21.4 months** for CPI-resistant cervical cancer patients with this combination regimen[11](index=11&type=chunk)[31](index=31&type=chunk) [Preclinical Candidates](index=11&type=section&id=2.3.4%20Preclinical%20Candidates) Multiple preclinical candidates, including ATG-042, ATG-201, and ATG-106, are undergoing preclinical research to support future IND/CTA applications - Multiple preclinical candidates, including ATG-042 (PRMT5-MTA inhibitor), ATG-201 (CD19 x CD3 T-cell engager), and ATG-106 (CDH6 x CD3 T-cell engager), are undergoing preclinical research to support IND/CTA applications[12](index=12&type=chunk)[32](index=32&type=chunk)[33](index=33&type=chunk) [Technology Platform and R&D Strategy](index=12&type=section&id=2.4%20Technology%20Platform%20and%20R%26D%20Strategy) The company is making steady progress with its novel T-cell engager platform AnTenGager™ and plans to establish a dedicated AI department to accelerate the development of next-generation TCE pipeline, focusing on a "combination and complementary" R&D strategy for cancer treatment - Steady progress achieved with the novel "2+1" T-cell engager platform AnTenGager™, which can enhance efficacy and reduce CRS risk[13](index=13&type=chunk)[34](index=34&type=chunk) - Plans to increase investment and integrate resources to establish a dedicated AI department, equipped with DeepSeek, to accelerate the development of next-generation proprietary TCE pipeline[13](index=13&type=chunk)[34](index=34&type=chunk) - R&D strategy focuses on cancer treatment, adopting a differentiated "combination and complementary" approach to build a pipeline of synergistic first-in-class/best-in-class assets[35](index=35&type=chunk) - As of June 30, 2025, the company has **nine clinical studies** ongoing in Mainland China, the US, and Australia[36](index=36&type=chunk) - XPOVIO® has been included in the 2023 National Medical Insurance Catalog, and its new indication (rrDLBCL) was also included in the 2024 National Medical Insurance Catalog, effective January 1, 2025[36](index=36&type=chunk) - As of June 30, 2025, the company holds **five pending Patent Cooperation Treaty (PCT) applications** and **eight PCT applications** that have entered the national phase[37](index=37&type=chunk) [Business Development and Future Outlook](index=13&type=section&id=2.5%20Business%20Development%20and%20Future%20Outlook) During the reporting period, the company did not engage in new business development activities, strategically focusing on advancing core R&D programs and enhancing technological capabilities, with future plans to progress clinical-stage product development, build a global and APAC pipeline through external collaborations and internal discovery, and strengthen its commercial team for Selinexor's commercialization - No new business development activities were undertaken during the reporting period, consistent with the strategy of focusing on advancing core R&D programs[14](index=14&type=chunk)[38](index=38&type=chunk) - The company will continue to advance the clinical development of **nine clinical-stage products** across various therapeutic areas[40](index=40&type=chunk) - Will continue to implement a dual-engine approach of external collaboration and internal discovery to build a global and APAC pipeline focused on key oncogenic pathways, tumor microenvironment, tumor-associated antigens, and autoimmune diseases[40](index=40&type=chunk) - Will continue to build its commercial team to prepare for the commercialization of XPOVIO® in the APAC region, addressing unmet medical needs[40](index=40&type=chunk) [Post-Reporting Period Events](index=13&type=section&id=2.6%20Post-Reporting%20Period%20Events) After the reporting period, Selinexor received new indication approval in China, and ATG-022 was granted Breakthrough Therapy Designation, further enhancing the market potential and development speed of the company's product pipeline - In July 2025, China's NMPA approved XPOVIO® (Selinexor) in combination with bortezomib and dexamethasone for the treatment of adult MM patients who have received at least one prior therapy[39](index=39&type=chunk) - In August 2025, ATG-022 was granted Breakthrough Therapy Designation (BTD) by China's NMPA Center for Drug Evaluation (CDE) for the treatment of CLDN18.2-positive, HER2-negative unresectable or metastatic gastric cancer/gastroesophageal junction adenocarcinoma patients[39](index=39&type=chunk) [Financial Statements](index=14&type=section&id=III.%20Financial%20Statements) This section presents the interim condensed consolidated financial statements, including the statement of profit or loss, comprehensive income, and financial position, providing a snapshot of the company's financial performance and health [Interim Condensed Consolidated Statement of Profit or Loss](index=14&type=section&id=3.1%20Interim%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) For the six months ended June 30, 2025, the company reported revenue of RMB 53,182 thousand and a gross profit of RMB 42,908 thousand, with the loss for the period significantly narrowing to RMB 76,378 thousand from RMB 167,033 thousand in the prior year Interim Condensed Consolidated Statement of Profit or Loss (For the six months ended June 30) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Revenue | 53,182 | 60,779 | | Cost of sales | (10,274) | (8,856) | | Gross profit | 42,908 | 51,923 | | Other income and gains | 38,126 | 27,317 | | R&D costs | (79,935) | (130,841) | | Selling and distribution expenses | (36,990) | (56,028) | | Administrative expenses | (39,304) | (58,478) | | Other expenses | (985) | (478) | | Finance costs | (198) | (448) | | Loss before tax | (76,378) | (167,033) | | Income tax expense | – | – | | Loss for the period | (76,378) | (167,033) | | Basic and diluted loss per share attributable to owners of the parent | RMB (0.12) | RMB (0.27) | [Interim Condensed Consolidated Statement of Comprehensive Income](index=15&type=section&id=3.2%20Interim%20Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) For the six months ended June 30, 2025, the company's total comprehensive loss for the period significantly decreased to RMB 87,994 thousand from RMB 168,242 thousand in the prior year, primarily due to the narrowed loss for the period Interim Condensed Consolidated Statement of Comprehensive Income (For the six months ended June 30) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Loss for the period | (76,378) | (167,033) | | Exchange differences on translation of overseas operations | (11,616) | (1,209) | | Other comprehensive loss for the period, net of tax | (11,616) | (1,209) | | **Total comprehensive loss for the period** | **(87,994)** | **(168,242)** | | Attributable to owners of the parent | (87,994) | (168,242) | [Interim Condensed Consolidated Statement of Financial Position](index=16&type=section&id=3.3%20Interim%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the company's total assets were RMB 1,075,557 thousand, with net assets of RMB 766,327 thousand and net current assets of RMB 660,371 thousand, indicating healthy liquidity and debt-to-asset ratios Interim Condensed Consolidated Statement of Financial Position (As of June 30, 2025) | Indicator | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Total non-current assets | 415,186 | 388,577 | | Total current assets | 850,435 | 956,155 | | Total current liabilities | 190,064 | 146,325 | | Net current assets | 660,371 | 809,830 | | Total assets less current liabilities | 1,075,557 | 1,198,407 | | Total non-current liabilities | 309,230 | 347,606 | | Net assets | 766,327 | 850,801 | | Total equity | 766,327 | 850,801 | [Notes to the Financial Statements](index=17&type=section&id=IV.%20Notes%20to%20the%20Financial%20Statements) This section provides detailed explanations and breakdowns of the financial statements, covering company information, accounting policies, segment reporting, revenue analysis, loss components, tax, dividends, loss per share, and various payables [Company and Group Information](index=17&type=section&id=4.1%20Company%20and%20Group%20Information) Antengene Corporation Limited, an investment holding company incorporated in the Cayman Islands on August 28, 2018, with its shares listed on the Main Board of the Hong Kong Stock Exchange on November 20, 2020, primarily engages in the R&D and commercialization of pharmaceutical products through its subsidiaries - The company was incorporated in the Cayman Islands on **August 28, 2018**[46](index=46&type=chunk) - The company is an investment holding company, with subsidiaries involved in the R&D and commercialization of pharmaceutical products[47](index=47&type=chunk) - The company's shares were listed on the Main Board of The Stock Exchange of Hong Kong Limited on **November 20, 2020**[48](index=48&type=chunk) [Basis of Preparation and Changes in Accounting Policies](index=17&type=section&id=4.2%20Basis%20of%20Preparation%20and%20Changes%20in%20Accounting%20Policies) The interim condensed consolidated financial information is prepared in accordance with IAS 34 and is consistent with the accounting policies used for the annual consolidated financial statements for the year ended December 31, 2024, with the initial adoption of IAS 21 (Amendments) "Lack of Exchangeability" having no impact on the Group's financial information - The interim condensed consolidated financial information is prepared in accordance with **International Accounting Standard 34 "Interim Financial Reporting"**[49](index=49&type=chunk) - Accounting policies are consistent with the annual consolidated financial statements for the year ended December 31, 2024, except for the initial adoption of **IAS 21 (Amendments) "Lack of Exchangeability"**[50](index=50&type=chunk) - IAS 21 (Amendments) has no impact on the interim condensed consolidated financial information as all the Group's transaction currencies are exchangeable[51](index=51&type=chunk) [Operating Segments and Geographical Information](index=18&type=section&id=4.3%20Operating%20Segments%20and%20Geographical%20Information) The Group operates in a single reportable operating segment, the R&D and commercialization of pharmaceutical products, with Mainland China remaining the primary source of revenue, though revenue from other countries/regions has grown, and non-current assets are mainly concentrated in Mainland China - The Group has only **one reportable operating segment**: the research and development and commercialization of pharmaceutical products[52](index=52&type=chunk) Revenue from External Customers (by Geographical Region) | Region | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Mainland China | 43,621 | 53,569 | | Other countries/regions | 9,561 | 7,210 | | **Total Revenue** | **53,182** | **60,779** | Non-current Assets (by Geographical Region) | Region | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Mainland China | 379,523 | 353,622 | | Other countries/regions | 1,885 | 4,651 | | **Total Non-current Assets** | **381,408** | **358,273** | [Analysis of Revenue, Other Income and Gains](index=19&type=section&id=4.4%20Analysis%20of%20Revenue,%20Other%20Income%20and%20Gains) The company's revenue primarily stems from the sale of pharmaceutical products, with Mainland China contributing the majority, while other income and gains are mainly composed of government grants, bank interest income, and foreign exchange gains, with government grants showing a significant increase Analysis of Revenue from Customer Contracts | Category | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | **Type of goods** | | | | Sale of pharmaceutical products | 53,182 | 60,779 | | **Geographical market** | | | | Mainland China | 43,621 | 53,569 | | Other countries/regions | 9,561 | 7,210 | | **Timing of revenue recognition** | | | | Goods transferred at a point in time | 53,182 | 60,779 | - Performance obligations are satisfied upon delivery of pharmaceutical products, with payments generally due within **60 to 150 days** after the billing date[56](index=56&type=chunk) Analysis of Other Income and Gains | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | **Other income** | | | | Government grants | 14,614 | 811 | | Bank interest income | 10,270 | 20,292 | | Others | 382 | – | | Other interest income from financial assets | 1 | 1 | | **Other gains** | | | | Gain on disposal of right-of-use assets from early termination of leases | 624 | – | | Foreign exchange gains | 12,235 | 6,181 | | Fair value change of equity investments | – | 32 | | **Total other income and gains** | **38,126** | **27,317** | - Government grants refer to subsidies received from local governments with no unfulfilled conditions[56](index=56&type=chunk) [Components of Loss Before Tax](index=21&type=section&id=4.5%20Components%20of%20Loss%20Before%20Tax) Loss before tax primarily comprises cost of inventories sold, depreciation and amortization, lease payments, and employee benefit expenses; during the reporting period, both employee benefit expenses and depreciation and amortization decreased, while foreign exchange gains positively impacted loss reduction Components of Loss Before Tax (For the six months ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Cost of inventories sold | 10,274 | 8,856 | | Depreciation of property, plant and equipment | 6,257 | 8,149 | | Depreciation of right-of-use assets | 3,250 | 4,763 | | Amortization of other intangible assets | 241 | 334 | | Lease payments not included in the measurement of lease liabilities | 340 | 1,498 | | Total employee benefit expenses | 66,560 | 97,644 | | Foreign exchange gains | (12,235) | (6,181) | | Fair value loss/(gain) on financial assets | 21 | (32) | | Gain on disposal of right-of-use assets from early termination of leases | (624) | – | | Loss on disposal of items of property, plant and equipment | 317 | 43 | - Employee benefit expenses include wages and salaries, contributions to pension schemes, staff welfare expenses, and equity-settled share-based payment expenses[57](index=57&type=chunk) [Income Tax](index=22&type=section&id=4.6%20Income%20Tax) The Group is subject to income tax in various jurisdictions at local rates, including Hong Kong (16.5%/8.25%), Macau (12%), Mainland China (25%), Australia (25%), Singapore (17%), South Korea (10%), and the US (21% federal + 8.7% state); no income tax provision was made for the reporting period due to the absence of assessable profits - The Group is subject to income tax on profits arising in or derived from the jurisdictions where its member companies are located and operate[58](index=58&type=chunk) - Corporate income tax rates in major jurisdictions: Hong Kong **16.5%** (partially **8.25%**), Macau **12%**, Mainland China **25%**, Australia **25%**, Singapore **17%**, South Korea **10%**, US federal **21%** plus Delaware state **8.7%**[61](index=61&type=chunk)[62](index=62&type=chunk)[63](index=63&type=chunk)[64](index=64&type=chunk)[65](index=65&type=chunk)[66](index=66&type=chunk)[67](index=67&type=chunk) - No income tax provision was made for the six months ended June 30, 2025, as the Group did not generate any assessable profits[68](index=68&type=chunk) [Dividends](index=23&type=section&id=4.7%20Dividends) The company did not pay or declare any dividends for the six months ended June 30, 2025 - The company did not pay or declare any dividends for the six months ended June 30, 2025[69](index=69&type=chunk) [Loss Per Share](index=23&type=section&id=4.8%20Loss%20Per%20Share) For the six months ended June 30, 2025, the basic and diluted loss per share attributable to ordinary equity holders of the parent was RMB (0.12), an improvement from RMB (0.27) in the prior year, with outstanding share options and restricted share units having an anti-dilutive effect - The calculation of basic loss per share is based on the loss for the period attributable to ordinary equity holders of the parent and the weighted average number of ordinary shares outstanding during the period, which was **620,441,464 shares**[70](index=70&type=chunk) - For the six months ended June 30, 2025, basic and diluted loss per share was **RMB (0.12)** (2024: RMB (0.27))[42](index=42&type=chunk) - Outstanding share options and restricted share units had an anti-dilutive effect on the basic loss per share, thus no dilutive adjustment was made[70](index=70&type=chunk) Data for Basic and Diluted Loss Per Share Calculation | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Loss for the period attributable to owners of the parent used in calculating basic and diluted loss per share | (76,378) | (167,033) | | Weighted average number of ordinary shares outstanding during the period used in calculating basic and diluted loss per share | 620,441,464 | 618,974,062 | [Trade Receivables](index=24&type=section&id=4.9%20Trade%20Receivables) As of June 30, 2025, total trade receivables amounted to RMB 22,636 thousand, all of which are due within six months Aging Analysis of Trade Receivables | Aging | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Within six months | 22,636 | 18,675 | | **Total** | **22,636** | **18,675** | [Trade Payables](index=24&type=section&id=4.10%20Trade%20Payables) As of June 30, 2025, total trade payables amounted to RMB 4,627 thousand, all due within three months and non-interest bearing Aging Analysis of Trade Payables | Aging | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Within three months | 4,627 | 3,579 | | **Total** | **4,627** | **3,579** | - Trade payables are non-interest bearing and generally settled within **two to three months**[75](index=75&type=chunk) [Other Payables and Accruals](index=25&type=section&id=4.11%20Other%20Payables%20and%20Accruals) As of June 30, 2025, total other payables and accruals amounted to RMB 142,711 thousand, primarily comprising deferred income, accrued salaries, payables for property, plant and equipment purchases, and fees for CRO, CDMO, and SMO services Components of Other Payables and Accruals | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Deferred income | 22,317 | 22,987 | | Accrued salaries | 13,478 | 17,455 | | Other taxes payable | 5,697 | 5,730 | | Payables for purchase of property, plant and equipment | 24,574 | 368 | | Other payables and accruals | 76,645 | 72,460 | | **Total** | **142,711** | **119,000** | - Deferred income refers to government grants related to assets, which will be recognized in profit or loss over the expected useful life of the related assets[78](index=78&type=chunk) - Other payables and accruals mainly include accrued or invoiced but unpaid fees for services provided by Contract Research Organizations (CRO), Contract Development and Manufacturing Organizations (CDMO), and Site Management Organizations (SMO)[78](index=78&type=chunk) [Other Information](index=29&type=section&id=V.%20Other%20Information) This section covers various non-financial aspects of the company, including employee and remuneration policies, liquidity and financial resources, investment activities, foreign exchange risk, contingent liabilities, corporate governance, use of listing proceeds, interim results review, public float, and material litigation [Employees and Remuneration Policy](index=29&type=section&id=5.1%20Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the company had 152 employees, with R&D personnel constituting the largest proportion, and provides comprehensive remuneration, benefits, and on-the-job training to support employee career development Number of Employees by Function (As of June 30, 2025) | Function | Number of Employees | % of Total Employees | | :--- | :--- | :--- | | General and Administration | 41 | 27.0 | | R&D | 73 | 48.0 | | Commercialization | 16 | 10.5 | | Manufacturing | 22 | 14.5 | | **Total** | **152** | **100.0** | - The company has **125 employees in China** and **27 employees overseas**[90](index=90&type=chunk) - Employee remuneration includes salaries, bonuses, provident fund and social insurance contributions, and other benefit payments[90](index=90&type=chunk) - The company provides extensive on-the-job training, induction training, and mentorship programs to help employees develop professional knowledge and management skills[90](index=90&type=chunk) [Liquidity and Financial Resources](index=30&type=section&id=5.2%20Liquidity%20and%20Financial%20Resources) As of June 30, 2025, the company's cash and bank balances were RMB 794.1 million, with a current ratio of 447.4% and a gearing ratio of 39.5%, indicating healthy liquidity and financial stability - As of June 30, 2025, cash and bank balances were **RMB 794.1 million** (December 31, 2024: RMB 900.1 million), with the decrease primarily due to operating expenses[91](index=91&type=chunk) - Current assets were **RMB 850.4 million**, and current liabilities were **RMB 190.1 million**[92](index=92&type=chunk) - The current ratio was **447.4%** (December 31, 2024: 653.4%)[93](index=93&type=chunk) - The gearing ratio was **39.5%** (December 31, 2024: 36.7%)[94](index=94&type=chunk) [Material Investments, Acquisitions and Disposals](index=30&type=section&id=5.3%20Material%20Investments,%20Acquisitions%20and%20Disposals) As of June 30, 2025, the company held no material investments and had no material acquisitions or disposals of subsidiaries, associates, and joint ventures during the reporting period - As of June 30, 2025, the company held **no material investments**[95](index=95&type=chunk) - For the six months ended June 30, 2025, the company had **no material acquisitions or disposals** of subsidiaries, associates, and joint ventures[95](index=95&type=chunk) [Future Plans for Material Investments or Capital Assets](index=31&type=section&id=5.4%20Future%20Plans%20for%20Material%20Investments%20or%20Capital%20Assets) As of June 30, 2025, the company had no specific plans for material investments or capital assets - As of June 30, 2025, the company had **no specific plans** for material investments or capital assets[96](index=96&type=chunk) [Foreign Exchange Risk](index=31&type=section&id=5.5%20Foreign%20Exchange%20Risk) The company is exposed to transactional currency risk, with a significant portion of bank balances and interest receivables denominated in foreign currencies; currently, there is no foreign exchange hedging policy, but management monitors and considers hedging significant foreign exchange risks when necessary - The company is exposed to transactional currency risk, with a majority of bank balances and interest receivables denominated in foreign currencies[97](index=97&type=chunk) - Currently, there is **no foreign exchange hedging policy**, but management monitors foreign exchange risk and will consider hedging when necessary[97](index=97&type=chunk) [Contingent Liabilities and Pledged Assets](index=31&type=section&id=5.6%20Contingent%20Liabilities%20and%20Pledged%20Assets) As of June 30, 2025, the company had no material contingent liabilities and had pledged leased land totaling RMB 41.8 million to secure bank financing - As of June 30, 2025, the company had **no material contingent liabilities**[98](index=98&type=chunk) - The Group has pledged leased land totaling **RMB 41.8 million** to secure bank financing[99](index=99&type=chunk) [Corporate Governance and Securities Transactions](index=31&type=section&id=5.7%20Corporate%20Governance%20and%20Securities%20Transactions) The company is committed to maintaining high standards of corporate governance and complies with the Corporate Governance Code, with the Chairman and CEO roles held by the same individual, an arrangement the Board believes facilitates strategy execution and communication, supported by sufficient checks and balances; directors and relevant employees adhere to the Standard Securities Dealing Code - The company complies with the Corporate Governance Code set out in Appendix C1 Part 2 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[100](index=100&type=chunk) - The roles of Chairman and Chief Executive Officer are held by the founder, Dr. Jianming Mei, an arrangement the Board believes facilitates strategy execution and information communication[100](index=100&type=chunk) - The Board of Directors comprises **two executive directors** and **three independent non-executive directors**, ensuring sufficient checks and balances[101](index=101&type=chunk) - All directors confirmed compliance with the Standard Securities Dealing Code for Directors of Listed Issuers during the reporting period[102](index=102&type=chunk) - During the reporting period, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities[103](index=103&type=chunk) [Use of Proceeds from Listing](index=33&type=section&id=5.8%20Use%20of%20Proceeds%20from%20Listing) The net proceeds from the initial public offering were approximately RMB 2,274.70 million, with an unutilized net amount of approximately RMB 376.61 million as of June 30, 2025; a portion of the proceeds was reallocated on March 22, 2024, and the remaining funds are expected to be fully utilized by December 31, 2026 - Net proceeds from the initial public offering were approximately **RMB 2,274.70 million**[104](index=104&type=chunk) - As of June 30, 2025, the total unutilized net proceeds amounted to approximately **RMB 376.61 million**[104](index=104&type=chunk) - On March 22, 2024, the Board resolved to reallocate approximately **RMB 553.93 million** of unutilized net proceeds to "fund ongoing preclinical research and planned clinical trials for other preclinical candidates in our pipeline"[108](index=108&type=chunk) - The unutilized net proceeds of **RMB 376.61 million** as of June 30, 2025, are expected to be fully utilized by **December 31, 2026**[108](index=108&type=chunk) Use of Net Proceeds from Listing | Purpose | Original Allocation (RMB million) | After Revised Allocation (RMB million) | Unutilized as of Dec 31, 2024 (RMB million) | Actual Use during Reporting Period (RMB million) | Unutilized as of June 30, 2025 (RMB million) | Expected Full Utilization Timeline | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Clinical trials and commercialization of core products | 932.63 | 932.63 | – | – | – | Not applicable | | Clinical trials for other clinical-stage candidates | 568.67 | 117.29 | 2.29 | 0.14 | 2.15 | By December 31, 2026 | | Research and clinical trials for preclinical candidates | 204.72 | 758.65 | 391.17 | 43.39 | 347.78 | By December 31, 2026 | | Pipeline expansion and business development | 318.46 | 215.91 | 29.44 | 2.76 | 26.68 | By December 31, 2026 | | Capital expenditure | 22.75 | 22.75 | – | – | – | Not applicable | | General corporate purposes | 227.47 | 227.47 | – | – | – | Not applicable | | **Total** | **2,274.70** | **2,274.70** | **422.90** | **46.29** | **376.61** | | [Review of Interim Results](index=34&type=section&id=5.9%20Review%20of%20Interim%20Results) The Audit Committee has reviewed the accounting principles and practices adopted by the Group and discussed internal controls and financial reporting matters with management, while external auditor Ernst & Young has conducted an independent review of the interim financial information - The Audit Committee, composed of **three independent non-executive directors**, has reviewed the accounting principles and practices adopted by the Group[105](index=105&type=chunk) - External auditor Ernst & Young has conducted an independent review of the interim financial information in accordance with **Hong Kong Standard on Review Engagements 2410**[105](index=105&type=chunk) [Public Float and Material Litigation](index=34&type=section&id=5.10%20Public%20Float%20and%20Material%20Litigation) Since the listing date, at least 25% of the company's total issued shares have been held by the public, complying with Listing Rules; during the reporting period, the company was not involved in any material litigation or arbitration - Since the listing date, at least **25%** of the company's total issued shares have been held by the public, in compliance with the Listing Rules[106](index=106&type=chunk) - During the reporting period, the company was **not involved in any material litigation or arbitration**, and the directors are unaware of any pending or threatened material litigation or claims against the Group[107](index=107&type=chunk) [Interim Dividend and Publication of Report](index=35&type=section&id=5.11%20Interim%20Dividend%20and%20Publication%20of%20Report) The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025; the interim results announcement has been published on the HKEX and company websites, and the interim report will be published in September 2025 - The Board does **not recommend the payment of an interim dividend** for the six months ended June 30, 2025[109](index=109&type=chunk) - The interim results announcement has been published on the HKEX website and the company's website[110](index=110&type=chunk) - The interim report for the six months ended June 30, 2025, will be published on the HKEX and company websites in **September 2025**[110](index=110&type=chunk)

[Financial and Operational Summary](index=1&type=section&id=Financial%20and%20Operational%20Summary) The Group achieved robust financial growth in the first half of 2025, with double-digit increases in revenue, gross profit, and net profit, alongside improved gross and net profit margins, demonstrating strong operational efficiency and profitability Overview of Financial Performance in H1 2025 | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | Y-o-Y Growth (%) | Change (percentage points) | | :--- | :--- | :--- | :--- | :--- | | Revenue | 1,058 | 949 | 11.5% | - | | Gross Profit | 243 | 199 | 22.1% | - | | Gross Margin | 23.0% | 21.0% | - | +2.0 | | Net Profit | 145 | 116 | 25.0% | - | | Net Margin | 13.7% | 12.2% | - | +1.5 | [Condensed Consolidated Financial Statements](index=2&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section provides the unaudited condensed consolidated financial statements for H1 2025, outlining the Group's financial performance, position, equity, and cash flows [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 revenue increased by 11.5% to RMB1,058 million, gross profit grew by 22.1% to RMB243 million, and profit for the period rose by 25.0% to RMB145 million, with basic and diluted earnings per share both at RMB0.17, an increase from the prior year period Key Data from Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income | Metric | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Revenue | 1,058,485 | 949,415 | | Cost of Sales and Services | (815,446) | (750,145) | | Gross Profit | 243,039 | 199,270 | | Other Income and Gains | 21,250 | 11,874 | | Other Expenses and Losses | (8,547) | (1,359) | | Selling and Distribution Expenses | (9,184) | (10,039) | | Administrative Expenses | (47,612) | (48,409) | | Research and Development Expenses | (28,302) | (23,595) | | Net Impairment Loss on Financial and Contract Assets | (8,113) | 2,922 | | Share of Profit of Associates | 3,337 | 5,647 | | Finance Costs | (7,424) | (7,944) | | Profit Before Tax | 158,444 | 128,367 | | Income Tax Expense | (13,657) | (12,470) | | Profit for the Period | 144,787 | 115,897 | | Profit Attributable to Owners of the Company | 142,709 | 113,665 | | Basic Earnings Per Share (RMB) | 0.17 | 0.11 | | Diluted Earnings Per Share (RMB) | 0.17 | 0.11 | [Condensed Consolidated Statement of Financial Position](index=3&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's total non-current assets increased to RMB2,630 million, driven by a significant rise in long-term receivables, while total current assets decreased due to a reduction in cash and cash equivalents, and both current and non-current liabilities decreased, leading to a slight decline in net current assets and net assets Key Data from Condensed Consolidated Statement of Financial Position | Metric | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Total Non-current Assets | 2,630,889 | 2,450,814 | | Total Current Assets | 2,460,540 | 2,956,943 | | Total Current Liabilities | 1,600,247 | 1,805,190 | | Total Non-current Liabilities | 271,267 | 318,126 | | Net Current Assets | 860,293 | 1,151,753 | | Net Assets | 3,219,915 | 3,284,441 | | Equity Attributable to Owners of the Company | 3,185,570 | 3,252,174 | | Cash and Cash Equivalents | 322,474 | 629,018 | | Long-term Receivables | 396,768 | 163,697 | [Condensed Consolidated Statement of Changes in Equity](index=5&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) For the six months ended June 30, 2025, total equity attributable to owners of the Company decreased from RMB3,252 million at the beginning of the year to RMB3,185 million, primarily due to increased profit for the period, transfer to statutory surplus reserve, and dividend distribution, while share capital and share premium reserve decreased due to ordinary share repurchases and cancellations Key Data from Condensed Consolidated Statement of Changes in Equity | Metric | June 30, 2025 (RMB thousand) | January 1, 2024 (RMB thousand) | | :--- | :--- | :--- | | Total Equity Attributable to Owners of the Company | 3,185,570 | 3,047,471 | | Profit for the Period | 142,709 | 113,665 | | Transfer to Statutory Surplus Reserve | 25,951 | 9,336 | | Dividends Recognized as Distribution | (35,837) | - | | Repurchase of Ordinary Shares | (173,363) | - | | Cancellation of Treasury Shares | (11) | - | | Share-based Payments | (102) | 402 | [Condensed Consolidated Statement of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) For the six months ended June 30, 2025, the Group's operating cash flow shifted from net inflow to net outflow, investment cash outflow significantly decreased, and financing cash flow changed from net inflow to net outflow, mainly due to share repurchases and loan repayments, resulting in a substantial decrease in cash and cash equivalents at period-end Key Data from Condensed Consolidated Statement of Cash Flows | Metric | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Net Cash (Used in) / From Operating Activities | (47,981) | 33,337 | | Net Cash Used in Investing Activities | (25,531) | (126,713) | | Net Cash (Used in) / From Financing Activities | (232,087) | 90,518 | | Net Decrease in Cash and Cash Equivalents | (305,599) | (2,858) | | Cash and Cash Equivalents at End of Period | 322,474 | 346,029 | [Notes to the Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) This section details the basis of preparation, significant accounting policies, segment revenue and results, other income and expenses, taxation, dividends, earnings per share, asset and liability breakdowns, share capital changes, share option schemes, and related party transactions, providing supplementary information for understanding the Group's financial position [Basis of Preparation](index=8&type=section&id=Basis%20of%20Preparation) The condensed consolidated financial statements are prepared in accordance with IAS 34 Interim Financial Reporting and the applicable disclosure requirements of Appendix D2 to the Listing Rules of The Stock Exchange of Hong Kong Limited - The condensed consolidated financial statements are prepared in accordance with IAS 34 Interim Financial Reporting and Appendix D2 of the HKEX Listing Rules[11](index=11&type=chunk) [Significant Accounting Policies](index=8&type=section&id=Significant%20Accounting%20Policies) The condensed consolidated financial statements are prepared on a historical cost basis, applying new and revised IFRSs issued by the IASB, which have not had a significant impact on the Group's interim and prior year financial statement disclosures - Financial statements are prepared on a historical cost basis, with certain properties and financial instruments measured at revalued or fair value[12](index=12&type=chunk) - New and revised IFRSs, including IAS 21 (Amendment) Lack of Exchangeability, were applied this year but had no significant impact on financial statement disclosures[12](index=12&type=chunk) - The Group has not yet applied new and revised IFRSs, such as IFRS 18 Presentation and Disclosure in Financial Statements, which have been issued but are not yet effective[13](index=13&type=chunk) [Revenue and Segment Information](index=9&type=section&id=Revenue%20and%20Segment%20Information) The Group's revenue primarily derives from four business segments: flue gas treatment, water treatment, hazardous and solid waste treatment, and dual carbon new energy+. In H1 2025, total revenue was RMB1,058 million, with flue gas treatment contributing the most, and significant growth in EPC and O&M revenue, while water treatment and dual carbon new energy+ revenue decreased. The Group operates almost exclusively in

Financial Summary The group's financial performance for the six months ended June 30, 2025, shows significant growth in revenue, gross profit, and net profit, with adjusted net profit attributable to owners increasing by **62.0%** Financial Summary for the Six Months Ended June 30, 2025 | Metric | 2025 (Million HKD) | 2024 (Million HKD) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 54,777 | 45,494 | 20.4% | | Gross Profit | 8,366 | 7,213 | 16.0% | | Profit After Tax | 1,048 | 653 | 60.5% | | Net Profit Attributable to Owners | 1,090 | 650 | 67.8% | | Adjusted Net Profit Attributable to Owners | 1,060 | 654 | 62.0% | - The Group voluntarily reclassified warranty expenses from sales and distribution expenses to cost of sales in accordance with China Accounting Standards for Business Enterprises Interpretation No. 18, and restated comparative amounts for the first half of 2024[5](index=5&type=chunk) [Business Review and Outlook](index=2&type=section&id=%E6%A5%AD%E5%8B%99%E5%9B%9E%E9%A1%A7%E8%88%87%E5%B1%95%E6%9C%9B) [Overview](index=2&type=section&id=1.%20%E7%B6%9C%E8%BF%B0) The Group achieved quality growth in H1 2025, driven by strategic R&D investment and a focus on premium large-screen TVs, Mini LED, and AI, resulting in significant increases in revenue, gross profit, and net profit - Global TV industry shipments in H1 2025 saw a slight increase of **0.1%** year-on-year, with Mini LED TV global industry shipments growing **149.6%** to **4.8 million units**, and 75-inch and above TV global industry shipments increasing **20.5%** to **11.49 million units**[7](index=7&type=chunk) - China's TV industry retail sales achieved **10.9%** double-digit growth, stimulated by the "trade-in" policy, while domestic photovoltaic industry newly added grid-connected installed capacity grew **106.5%** to **212 GW** year-on-year[8](index=8&type=chunk) - Global shipments of AI smart glasses are projected to reach **5.5 million units** in 2025, increasing to **22 million units** by 2027, with a compound annual growth rate of approximately **100.0%**[10](index=10&type=chunk) Key Financial Indicators for H1 2025 | Metric | H1 2025 (Billion HKD) | Year-on-Year Growth | | :--- | :--- | :--- | | Revenue | 54.777 | 20.4% | | Gross Profit | 8.366 | 16.0% | | Profit After Tax | 1.048 | 60.5% | | Net Profit Attributable to Owners | 1.090 | 67.8% | | Adjusted Net Profit Attributable to Owners | 1.060 | 62.0% | - As of June 30, 2025, the net gearing ratio remained stable at **0.0%**, with cash and cash equivalents increasing **30.4%** year-on-year to **HKD 11.442 billion**[14](index=14&type=chunk) - R&D expenses increased **5.6%** year-on-year to **HKD 1.154 billion**, focusing on cutting-edge display technologies like Mini LED and Quantum Dot, and AI[19](index=19&type=chunk) - The Group launched TCL AiMe, the world's first split-type smart home companion robot, at CES 2025, and introduced several new AR/XR smart glasses, with RayNeo glasses achieving the top online sales market share during the 618 shopping festival[20](index=20&type=chunk)[21](index=21&type=chunk) - TCL officially became a top-tier global partner of the Olympics, with the TCL TV global brand index increasing **1.7%** year-on-year to **93**[22](index=22&type=chunk) [Display Business](index=7&type=section&id=2.%20%E9%A1%AF%E7%A4%BA%E6%A5%AD%E5%8B%99) The Group's display business achieved quality growth in H1 2025, with revenue increasing **10.9%** to **HKD 33.419 billion** and gross profit rising **11.4%** to **HKD 5.197 billion**, driven by optimized product structure and a successful mid-to-high-end strategy, securing TCL TV's global top two shipment ranking and Mini LED TV's global top spot - TCL TV global shipments reached **13.46 million units**, a **7.6%** year-on-year increase, with global market share rising **0.9 percentage points** to **14.2%**, maintaining a stable top two ranking globally[23](index=23&type=chunk) - The gross profit margin of the large-screen display business increased by **0.5 percentage points** year-on-year to **15.9%**[16](index=16&type=chunk) - TCL Mini LED TV global shipments surged **176.1%** year-on-year to **1.37 million units**, ranking first globally[16](index=16&type=chunk) [Large-Screen Display](index=7&type=section&id=2.1%20%E5%A4%A7%E5%90%8B%E5%AF%B8%E9%A1%AF%E7%A4%BA) Large-screen display business revenue grew **9.4%** to **HKD 28.352 billion** and gross profit increased **12.9%** to **HKD 4.514 billion**, with TCL TV global shipments reaching **13.46 million units**, up **7.6%**, securing a top two global market share, driven by rapid growth in Mini LED and large-screen products - Large-screen business revenue recorded a year-on-year increase of **9.4%** to **HKD 28.352 billion**, with gross profit growing **12.9%** to **HKD 4.514 billion**[25](index=25&type=chunk) - TCL Mini LED TV global shipment market share increased by **4.1 percentage points** year-on-year to **28.7%**, ranking first globally[25](index=25&type=chunk) [China Market](index=8&type=section&id=%E4%B8%AD%E5%9C%8B%E5%B8%82%E5%A0%B4) China market revenue grew **4.4%** to **HKD 8.72 billion**, with gross profit up **14.0%** to **HKD 1.69 billion** and gross profit margin increasing **1.7 percentage points** to **19.4%**, as TCL TV shipments rose **3.5%** and Mini LED TV shipments surged **154.2%**, securing top two retail rankings - China market revenue increased **4.4%** year-on-year to **HKD 8.72 billion**, with gross profit growing **14.0%** to **HKD 1.69 billion**, and gross profit margin improving by **1.7 percentage points** year-on-year to **19.4%**[26](index=26&type=chunk) - TCL TV shipments increased **3.5%** year-on-year, with TCL brand TV shipments growing **10.2%** year-on-year, ranking among the top two in both retail volume and value[26](index=26&type=chunk) - TCL Mini LED TV shipments increased **154.2%** year-on-year, with its share of total shipments rising **12.6 percentage points** year-on-year to **21.2%**[26](index=26&type=chunk) [International Market](index=9&type=section&id=%E5%9C%8B%E9%9A%9B%E5%B8%82%E5%A0%B4) International market TCL TV shipments grew **8.7%**, with revenue increasing **11.8%** to **HKD 19.632 billion** and gross profit rising **12.3%** to **HKD 2.824 billion**, leading to a **0.1 percentage point** increase in gross profit margin to **14.4%**, while overseas TCL Mini LED TV shipments surged **196.8%** - TCL TV international shipments increased **8.7%** year-on-year, with revenue growing **11.8%** to **HKD 19.632 billion** and gross profit rising **12.3%** to **HKD 2.824 billion**, and gross profit margin improving by **0.1 percentage points** year-on-year to **14.4%**[28](index=28&type=chunk) - TCL Mini LED TV overseas shipment volume increased **196.8%** year-on-year, with its share of total shipments rising **4.9 percentage points** year-on-year to **7.7%**[28](index=28&type=chunk) - TCL TV retail volume consistently ranked among the top three in nearly **twenty countries** globally[29](index=29&type=chunk) [North America Market](index=9&type=section&id=%E5%8C%97%E7%BE%8E%E5%B8%82%E5%A0%B4) North America market TCL TV overall shipments decreased **7.3%** year-on-year, but product structure significantly improved, with brand index up **17.8%**, 65-inch and above TV shipments growing **60.5%**, and Mini LED TV shipments surging **349.6%**, securing a stable top two retail market share in the US - North America market TCL TV overall shipments decreased **7.3%** year-on-year, but the TCL TV brand index improved by **17.8%** year-on-year[29](index=29&type=chunk) - Shipments of 65-inch and above TCL TVs increased **60.5%** year-on-year, with their share of total shipments rising **13.0 percentage points** year-on-year[29](index=29&type=chunk) - TCL Mini LED TV shipments surged **349.6%** year-on-year, with their share of total shipments rising **6.0 percentage points** year-on-year, maintaining a stable top two retail market share in the US market[31](index=31&type=chunk) [Europe Market](index=10&type=section&id=%E6%AD%90%E6%B4%B2%E5%B8%82%E5%A0%B4) Europe market TCL brand TV shipments grew **13.3%** year-on-year, with 65-inch and above TV shipments increasing **29.6%** and Mini LED TV shipments surging **91.0%**, securing top two retail rankings in France and Poland, and top three in Sweden, Spain, Greece, and Czech Republic - TCL brand TV shipments in Europe increased **13.3%** year-on-year[34](index=34&type=chunk) - Shipments of 65-inch and above TCL TVs increased **29.6%** year-on-year, and TCL Mini LED TV shipments surged **91.0%** year-on-year[34](index=34&type=chunk) - TCL TV retail volume consistently ranked among the top two in France and Poland, and among the top three in Sweden, Spain, Greece, and the Czech Republic[34](index=34&type=chunk) [Emerging Markets](index=10&type=section&id=%E6%96%B0%E8%88%88%E5%B8%82%E5%A0%B4) Emerging markets TCL TV shipments grew **17.9%** year-on-year, with 65-inch and above TV shipments increasing **45.8%**, securing top retail rankings in the Philippines, Australia, Saudi Arabia, Argentina, and Pakistan, top two in Brazil, Thailand, and Myanmar, and top three in Vietnam and South Korea - TCL TV shipments increased **17.9%** year-on-year, with 65-inch and above TCL TV shipments growing **45.8%** year-on-year[34](index=34&type=chunk) - TCL TV retail volume ranked first in the Philippines, Australia, Saudi Arabia, Argentina, and Pakistan, among the top two in Brazil, Thailand, and Myanmar, and among the top three in Vietnam and South Korea[34](index=34&type=chunk) [Small and Medium-Sized Display](index=10&type=section&id=2.2%20%E4%B8%AD%E5%B0%8F%E5%90%8B%E5%AF%B8%E9%A1%AF%E7%A4%BA) Small and medium-sized display business revenue grew **21.3%** to **HKD 4.563 billion** and gross profit increased **2.7%** to **HKD 627 million**, driven by focus on key markets, penetration of top-tier network operator channels in Europe and North America, and successful launch of popular new products like the TCL 60 series phones and TCL NXTPAPER 11 Plus tablet - Global mobile phone shipments in H1 2025 saw a slight decrease of **1.2%** year-on-year, while tablet industry shipments increased **12.4%** year-on-year[32](index=32&type=chunk) - Small and medium-sized display business revenue increased **21.3%** year-on-year to **HKD 4.563 billion**, with gross profit growing **2.7%** year-on-year to **HKD 627 million**[35](index=35&type=chunk) - Launched TCL 60 series phones featuring NXTPAPER 3.0 color e-ink eye-care display technology, and the flagship tablet TCL NXTPAPER 11 Plus, equipped with NXTPAPER 4.0 eye-care display technology and an AI toolbox for the first time[35](index=35&type=chunk) [Smart Commercial Display](index=11&type=section&id=2.3%20%E6%99%BA%E6%85%A7%E5%95%86%E9%A1%AF) Smart commercial display business revenue grew **9.4%** to **HKD 504 million**, with gross profit reaching **HKD 56 million**, driven by product structure improvement in the domestic market, where digital signage shipments ranked first, and successful expansion to key clients like Starbucks and Luckin Coffee, while overseas markets focused on education and launched the flagship office smart screen 98E60 - Domestic digital signage shipments ranked first in the industry, successfully expanding to key clients such as Starbucks, Luckin Coffee, Mixue Ice Cream & Tea, and Li Auto[36](index=36&type=chunk) - Smart commercial display business revenue increased **9.4%** year-on-year to **HKD 504 million**, with gross profit reaching **HKD 56 million**[38](index=38&type=chunk) - Launched the flagship office smart screen 98E60, featuring Future Paper display technology and integrating core technologies such as professional display, audio-video, conference systems, and AI algorithms[38](index=38&type=chunk) [Internet Business](index=12&type=section&id=3.%20%E4%BA%92%E8%81%AF%E7%B6%B2%E6%A5%AD%E5%8B%99) The Group's global internet business revenue reached **HKD 1.458 billion**, a **20.3%** year-on-year increase, with gross profit growing **21.5%** to **HKD 794 million** and gross profit margin increasing **0.5 percentage points** to **54.4%**, driven by user experience-centric TV-side AI interaction upgrades and robust overseas market expansion, achieving high profitability - Global internet business revenue reached **HKD 1.458 billion**, a **20.3%** year-on-year increase[39](index=39&type=chunk) - Gross profit increased **21.5%** year-on-year to **HKD 794 million**, with gross profit margin increasing **0.5 percentage points** year-on-year to **54.4%**[39](index=39&type=chunk) [China Market](index=12&type=section&id=3.1%20%E4%B8%AD%E5%9C%8B%E5%B8%82%E5%A0%B4) China market internet business focused on user experience, emphasizing TV-side AI technology and interaction upgrades, successfully completing the "Lingkong Desktop 3.0" major upgrade and launching ultra-high-definition services on TV terminals, with UHD content duration exceeding **30,000 hours** - Successfully completed the major upgrade of "Lingkong Desktop 3.0," achieving minimalist desktop optimization and fully leveraging the advantages of Mini LED display technology[40](index=40&type=chunk) - Ultra-high-definition services were launched on TV terminals, with UHD content duration exceeding **30,000 hours**[40](index=40&type=chunk) [International Market](index=13&type=section&id=3.2%20%E5%9C%8B%E9%9A%9B%E5%B8%82%E5%A0%B4) The international market continued to deepen strategic cooperation with internet giants like Google, Roku, and Netflix, with TCL Channel completing a comprehensive upgrade, significantly improving content distribution efficiency and achieving content localization; as of June 30, 2025, TCL Channel's cumulative user base exceeded **39.3 million**, effectively driving robust growth in the international internet business - Continuously deepened close cooperation with internet giants such as Google, Roku, and Netflix, driving continuous breakthroughs in overseas business models[42](index=42&type=chunk) - TCL Channel completed a comprehensive upgrade, significantly improving content distribution efficiency and achieving content localization in multiple countries[42](index=42&type=chunk) - As of June 30, 2025, TCL Channel's cumulative user base exceeded **39.3 million**[42](index=42&type=chunk) [Innovative Businesses](index=13&type=section&id=4.%20%E5%89%B5%E6%96%B0%E6%A5%AD%E5%8B%99) Innovative businesses maintained strong growth, with H1 2025 revenue surging **42.4%** to **HKD 19.875 billion** and gross profit increasing **25.7%** to **HKD 2.374 billion**, driven by doubled revenue and gross profit in the photovoltaic business, steady expansion of all-category marketing, significantly improved profitability in smart connectivity and smart home businesses, and breakthrough progress in AR/XR smart glasses and AI companion robots - Innovative businesses maintained strong growth, with H1 2025 revenue surging **42.4%** year-on-year to **HKD 19.875 billion** and gross profit increasing **25.7%** year-on-year to **HKD 2.374 billion**[17](index=17&type=chunk) - Photovoltaic business revenue and gross profit increased **111.3%** and **98.5%** year-on-year, respectively, to **HKD 11.136 billion** and **HKD 1.073 billion**[17](index=17&type=chunk) [Photovoltaic Business](index=13&type=section&id=4.1%20%E5%85%89%E4%BC%8F%E6%A5%AD%E5%8B%99) Photovoltaic business revenue grew **111.3%** to **HKD 11.136 billion** and gross profit increased **98.5%** to **HKD 1.073 billion**, driven by a focus on the distributed photovoltaic end-market, strengthened power market trading capabilities, deepened channel cooperation, and steady overseas business development, with products and operations launched in the European market - Photovoltaic business revenue increased **111.3%** year-on-year to **HKD 11.136 billion**, with gross profit improving **98.5%** year-on-year to **HKD 1.073 billion**[17](index=17&type=chunk)[45](index=45&type=chunk) - As of June 30, 2025, the photovoltaic business in the China market had accumulated over **290** industrial and commercial signed projects, over **2,380** dealer channels, and nearly **280,000** signed rural households[45](index=45&type=chunk) - Steadily advanced overseas business development, actively explored integrated solar-storage solutions, and achieved product and business launches in Europe[44](index=44&type=chunk) [All-Category Marketing](index=14&type=section&id=4.2%20%E5%85%A8%E5%93%81%E9%A1%9E%E7%87%9F%E9%8A%B7) All-category marketing revenue grew **1.2%** to **HKD 7.842 billion**, with air conditioners accounting for **82.2%** and refrigeration/washing products for **17.8%**, as the Group leveraged its global brand influence and channel network to expand branded distribution of smart products like air conditioners, refrigerators, and washing machines, and launched several new products - All-category marketing revenue increased **1.2%** year-on-year to **HKD 7.842 billion**[46](index=46&type=chunk) - Air conditioner revenue accounted for **82.2%**, and refrigeration/washing product revenue accounted for **17.8%**[46](index=46&type=chunk) - Launched several new products, including the TCL Big Eye AI Super Drum Washer-Dryer Set, TCL Little Blue Wing Fresh Air Conditioner, and TCL Ice Kirin Magnetic Fresh Refrigerator[46](index=46&type=chunk) [Smart Connectivity and Smart Home](index=14&type=section&id=4.3%20%E6%99%BA%E8%83%BD%E9%80%A3%E6%8E%A5%E5%8F%8A%E6%99%BA%E8%83%BD%E5%AE%B6%E5%B1%85) Smart connectivity and smart home business revenue reached **HKD 897 million**, with gross profit and gross profit margin increasing **13.2%** and **3.5 percentage points** to **HKD 211 million** and **23.6%** respectively, showing significant improvement in profitability, while AR/XR smart glasses achieved breakthrough progress, with RayNeo glasses exceeding **52%** sales market share during the 618 shopping festival, and the world's first split-type smart home companion robot, TCL AiMe, was launched - Smart connectivity and smart home business revenue reached **HKD 897 million**, with gross profit increasing **13.2%** year-on-year to **HKD 211 million**, and gross profit margin improving **3.5 percentage points** year-on-year to **23.6%**[47](index=47&type=chunk) - RayNeo glasses achieved over **52%** sales market share during the 2025 618 shopping festival, with sales **3.4 times** that of the same period last year, securing the top sales position in the XR industry across both JD.com and Tmall platforms[48](index=48&type=chunk)[50](index=50&type=chunk) - Launched TCL AiMe, the world's first split-type smart home companion robot, at CES, integrating AI, IoT control hub, and home companion robot functionalities[49](index=49&type=chunk) [Outlook](index=16&type=section&id=5.%20%E5%B1%95%E6%9C%9B) The Group will pursue a "mid-to-high-end + globalization" strategy, investing in core technologies like Mini LED and AI to build technological barriers, expand its premium product matrix, and leverage global channels, aiming to become a leading global smart terminal enterprise - Global trends towards larger screens and premiumization are expected to further emerge, with 75-inch and above, Mini LED, and other large-screen and mid-to-high-end TV products anticipated to maintain high growth[51](index=51&type=chunk) - Will continue to deepen the "mid-to-high-end + globalization" dual-driven strategy, increasing investment in core technologies to build technological barriers[51](index=51&type=chunk) - Actively seize new market opportunities brought by AI, increase AI-related R&D investment, and accelerate product development and business promotion for AR/XR smart glasses and companion robots[52](index=52&type=chunk) - Adhere to the long-term operational goal of "Net Profit Growth > Gross Profit Growth > Revenue Growth > Sales Volume Growth," striving to become a leading global smart terminal enterprise with global operations[53](index=53&type=chunk) [Management Discussion and Analysis](index=18&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%A4%E8%A8%8E%E8%AB%96%E5%8F%8A%E5%88%86%E6%9E%90) [Comparison of H1 2025 with H1 2024](index=18&type=section&id=2025%E4%B8%8A%E5%8D%8A%E5%B9%B4%E5%BA%A6%E8%88%872024%E5%B9%B4%E4%B8%8A%E5%8D%8A%E5%B9%B4%E5%BA%A6%E6%AF%94%E8%BC%83) The Group's H1 2025 financial performance was strong, with revenue up **20.4%** to **HKD 54.777 billion** and gross profit up **16.0%** to **HKD 8.366 billion**, while profit before tax and net profit attributable to owners surged **61.1%** and **67.8%** respectively, and adjusted net profit attributable to owners increased **62.0%**, indicating significant improvements in operational quality and profitability Consolidated Income Statement Comparison for H1 2025 vs H1 2024 | Metric | H1 2025 (Thousand HKD) | H1 2024 (Thousand HKD) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 54,777,049 | 45,493,620 | 20.4% | | Cost of Sales | (46,411,098) | (38,280,761) | 21.2% | | Gross Profit | 8,365,951 | 7,212,859 | 16.0% | | Other Income and Gains | 894,483 | 1,094,792 | -18.3% | | Selling and Distribution Expenses | (4,011,576) | (3,832,293) | 4.7% | | Administrative Expenses | (2,312,964) | (1,860,323) | 24.3% | | Research and Development Expenses | (1,154,499) | (1,092,783) | 5.6% | | Other Operating Expenses | (17,875) | (171,529) | -89.6% | | Net Impairment Loss on Financial and Contract Assets | (18,325) | (10,053) | 82.3% | | Finance Costs | (392,234) | (521,358) | -24.8% | | Profit Before Tax | 1,420,846 | 881,796 | 61.1% | | Income Tax Expense | (373,196) | (228,882) | 63.1% | | Profit for the Period | 1,047,650 | 652,914 | 60.5% | | Net Profit Attributable to Owners | 1,090,419 | 649,920 | 67.8% | | Adjusted Net Profit Attributable to Owners | 1,059,892 | 654,211 | 62.0% | [Revenue](index=19&type=section&id=%E6%94%B6%E5%85%A5) The Group's H1 2025 revenue increased **20.4%** year-on-year to **HKD 54.777 billion**, primarily driven by comprehensive growth in display, internet, and innovative businesses, with innovative businesses showing the most significant increase - The Group's revenue increased **20.4%** year-on-year from **HKD 45.494 billion** in H1 2024 to **HKD 54.777 billion** in H1 2025[55](index=55&type=chunk) Revenue by Business Segment (Six Months Ended June 30) | Business Segment | 2025 (Million HKD) | % of Total | 2024 (Million HKD) | % of Total | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Display Business | 33,419 | 61.0% | 30,135 | 66.3% | 10.9% | | Large-Screen Display | 28,352 | 51.8% | 25,914 | 57.0% | 9.4% | | Small and Medium-Sized Display | 4,563 | 8.3% | 3,761 | 8.3% | 21.3% | | Smart Commercial Display | 504 | 0.9% | 460 | 1.0% | 9.4% | | Internet Business | 1,458 | 2.7% | 1,212 | 2.7% | 20.3% | | Innovative Businesses | 19,875 | 36.3% | 13,953 | 30.6% | 42.4% | | Photovoltaic Business | 11,136 | 20.4% | 5,269 | 11.6% | 111.3% | | All-Category Marketing | 7,842 | 14.3% | 7,753 | 17.0% | 1.2% | | Smart Connectivity and Smart Home | 897 | 1.6% | 931 | 2.0% | -3.6% | | Others | 25 | 0.0% | 194 | 0.4% | -87.1% | | **Total Revenue** | **54,777** | **100.0%** | **45,494** | **100.0%** | **20.4%** | [Display Business (Revenue)](index=20&type=section&id=%E9%A1%AF%E7%A4%BA%E6%A5%AD%E5%8B%99_%E6%94%B6%E5%85%A5) Display business revenue increased **10.9%** year-on-year to **HKD 33.419 billion**, primarily driven by global market expansion, enhanced brand influence, and improved product structure, leading to comprehensive revenue growth across large-screen, small and medium-sized, and smart commercial display businesses - Display business revenue increased **10.9%** year-on-year from **HKD 30.135 billion** in H1 2024 to **HKD 33.419 billion** in H1 2025[57](index=57&type=chunk) - Large-screen display business revenue increased **9.4%** year-on-year to **HKD 28.352 billion**[57](index=57&type=chunk) - Small and medium-sized business revenue increased **21.3%** year-on-year to **HKD 4.563 billion**[57](index=57&type=chunk) - Smart commercial display business revenue increased **9.4%** year-on-year to **HKD 504 million**[57](index=57&type=chunk) [Internet Business (Revenue)](index=20&type=section&id=%E4%BA%92%E8%81%AF%E7%B6%B2%E6%A5%AD%E5%8B%99_%E6%94%B6%E5%85%A5) Internet business revenue increased **20.3%** year-on-year to **HKD 1.458 billion**, primarily due to continuous breakthroughs in overseas internet business monetization models and significant improvements in content development, product experience, and commercialization capabilities - Internet business revenue increased **20.3%** year-on-year from **HKD 1.212 billion** in H1 2024 to **HKD 1.458 billion** in H1 2025[58](index=58&type=chunk) - Primarily benefiting from continuous breakthroughs in overseas internet business monetization models and significant improvements in content development, product experience, and commercialization capabilities[58](index=58&type=chunk) [Innovative Businesses (Revenue)](index=20&type=section&id=%E5%89%B5%E6%96%B0%E6%A5%AD%E5%8B%99_%E6%94%B6%E5%85%A5) Innovative businesses revenue increased **42.4%** year-on-year to **HKD 19.875 billion**, primarily due to a **111.3%** growth in photovoltaic business revenue to **HKD 11.137 billion**, achieved through strengthened power market trading capabilities, flexible market strategy adjustments, and deepened channel cooperation - Innovative businesses revenue increased **42.4%** year-on-year from **HKD 13.953 billion** in H1 2024 to **HKD 19.875 billion** in H1 2025[59](index=59&type=chunk) - Photovoltaic business revenue increased **111.3%** to **HKD 11.137 billion**[59](index=59&type=chunk) [Gross Profit and Gross Profit Margin](index=20&type=section&id=%E6%AF%9B%E5%88%A9%E5%8F%8A%E6%AF%9B%E5%88%A9%E7%8E%87) The Group's overall gross profit increased **16.0%** year-on-year to **HKD 8.366 billion**, primarily due to its mid-to-high-end transformation strategy and cost control, though the overall gross profit margin decreased **0.6 percentage points** year-on-year to **15.3%** due to the increased revenue contribution from the relatively lower-margin photovoltaic business - The Group's overall gross profit increased **16.0%** year-on-year from **HKD 7.213 billion** in H1 2024 to **HKD 8.366 billion** in H1 2025[60](index=60&type=chunk) - The gross profit margin for H1 2025 was **15.3%**, a **0.6 percentage point** decrease year-on-year compared to H1 2024[60](index=60&type=chunk) - The decrease in gross profit margin was primarily due to the increased revenue contribution from the relatively lower-margin photovoltaic business[60](index=60&type=chunk) [Display Business (Gross Profit Margin)](index=21&type=section&id=%E9%A1%AF%E7%A4%BA%E6%A5%AD%E5%8B%99_%E6%AF%9B%E5%88%A9%E7%8E%87) Display business gross profit margin was **15.6%**, an increase of **0.1 percentage points** year-on-year, primarily benefiting from the implementation of the mid-to-high-end strategy and improved product structure, with large-screen display business gross profit margin increasing **0.5 percentage points** year-on-year to **15.9%** - The gross profit margin for the display business in H1 2025 was **15.6%**, an increase of **0.1 percentage points** year-on-year[61](index=61&type=chunk) - The gross profit margin for the large-screen display business increased by **0.5 percentage points** year-on-year to **15.9%**[61](index=61&type=chunk) [Internet Business (Gross Profit Margin)](index=21&type=section&id=%E4%BA%92%E8%81%AF%E7%B6%B2%E6%A5%AD%E5%8B%99_%E6%AF%9B%E5%88%A9%E7%8E%87) Internet business gross profit margin was **54.4%**, an increase of **0.5 percentage points** year-on-year, primarily due to enhanced monetization capabilities driven by improved overseas internet commercialization, leading to further expansion of high-margin overseas internet revenue - The gross profit margin for the internet business in H1 2025 was **54.4%**, an increase of **0.5 percentage points** year-on-year[62](index=62&type=chunk) - Primarily benefiting from the Group's enhanced overseas internet commercialization capabilities, leading to stronger monetization[62](index=62&type=chunk) [Innovative Businesses (Gross Profit Margin)](index=21&type=section&id=%E5%89%B5%E6%96%B0%E6%A5%AD%E5%8B%99_%E6%AF%9B%E5%88%A9%E7%8E%87) Innovative businesses gross profit margin was **11.9%**, a decrease of **1.6 percentage points** year-on-year, primarily due to the increased revenue contribution from the relatively lower-margin photovoltaic business - The gross profit margin for innovative businesses in H1 2025 was **11.9%**, a decrease of **1.6 percentage points** year-on-year[63](index=63&type=chunk) - Primarily due to the increased revenue contribution from the relatively lower-margin photovoltaic business[63](index=63&type=chunk) [Other Income and Gains](index=21&type=section&id=%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5%E5%8F%8A%E6%94%B6%E7%9B%8A) Other income and gains decreased **18.3%** year-on-year to **HKD 894 million**, primarily due to reduced interest income resulting from a decrease in the Group's wealth management scale - Other income and gains decreased **18.3%** year-on-year from **HKD 1.095 billion** in H1 2024 to **HKD 894 million** in H1 2025[64](index=64&type=chunk) - Primarily due to reduced interest income resulting from a decrease in the Group's wealth management scale[64](index=64&type=chunk) [Selling and Distribution Expenses](index=21&type=section&id=%E9%8A%B7%E5%94%AE%E5%8F%8A%E5%88%86%E9%8A%B7%E6%94%AF%E5%87%BA) Selling and distribution expenses increased **4.7%** year-on-year to **HKD 4.012 billion**, primarily due to the Group's strategic increase in brand marketing and product promotion investments - Selling and distribution expenses increased **4.7%** year-on-year from **HKD 3.832 billion** in H1 2024 to **HKD 4.012 billion** in H1 2025[65](index=65&type=chunk) - Primarily due to the Group's strategic increase in brand marketing and product promotion investments[65](index=65&type=chunk) [Administrative Expenses](index=21&type=section&id=%E8%A1%8C%E6%94%BF%E6%94%AF%E5%87%BA) Administrative expenses increased **24.3%** year-on-year to **HKD 2.313 billion**, primarily due to increased realized losses from the liquidation of derivative financial instruments and higher bonus provisions resulting from the Group's strong performance - Administrative expenses increased **24.3%** year-on-year from **HKD 1.860 billion** in H1 2024 to **HKD 2.313 billion** in H1 2025[66](index=66&type=chunk) - Primarily due to increased realized losses from the liquidation of derivative financial instruments in H1 2025 and higher bonus provisions resulting from the Group's strong performance in H1 2025[66](index=66&type=chunk) [Research and Development Expenses](index=22&type=section&id=%E7%A0%94%E7%99%BC%E8%B2%BB%E7%94%A8) Research and development expenses increased **5.6%** year-on-year to **HKD 1.154 billion**, primarily due to the Group's continued increased investment in high-end display technologies and AI - Research and development expenses increased **5.6%** year-on-year from **HKD 1.093 billion** in H1 2024 to **HKD 1.154 billion** in H1 2025[67](index=67&type=chunk) - Primarily due to the Group's continued increased investment in high-end display technologies and AI[67](index=67&type=chunk) [Other Operating Expenses](index=22&type=section&id=%E5%85%B6%E4%BB%96%E7%87%9F%E9%81%8B%E6%94%AF%E5%87%BA) Other operating expenses significantly decreased **89.6%** year-on-year to **HKD 17.88 million**, primarily because the Group recognized goodwill impairment in H1 2024, which did not recur in the current period - Other operating expenses significantly decreased **89.6%** year-on-year from **HKD 172 million** in H1 2024 to **HKD 17.88 million** in H1 2025[68](index=68&type=chunk) - Primarily because the Group recognized goodwill impairment in H1 2024[68](index=68&type=chunk) [Net Impairment Loss on Financial and Contract Assets](index=22&type=section&id=%E9%87%91%E8%9E%8D%E5%8F%8A%E5%90%88%E7%B4%84%E8%B3%87%E7%94%A2%E6%B8%9B%E5%80%BC%E虧%E6%90%8D%E6%B7%A8%E9%A1%8D) Net impairment loss on financial and contract assets significantly increased **82.3%** year-on-year to **HKD 18.33 million**, primarily due to an increase in bad debt provisions for trade receivables - Net impairment loss on financial and contract assets significantly increased **82.3%** year-on-year from **HKD 10.05 million** in H1 2024 to **HKD 18.33 million** in H1 2025[69](index=69&type=chunk) - Primarily due to an increase in bad debt provisions for trade receivables[69](index=69&type=chunk) [Finance Costs](index=22&type=section&id=%E8%9E%8D%E8%B3%87%E6%88%90%E6%9C%AC) Finance costs decreased **24.8%** year-on-year to **HKD 392 million**, primarily due to reduced interest expenses from bill discounting and factoring trade receivables during the reporting period - Finance costs decreased **24.8%** year-on-year from **HKD 521 million** in H1 2024 to **HKD 392 million** in H1 2025[70](index=70&type=chunk) - Primarily due to reduced interest expenses from bill discounting and factoring trade receivables during the reporting period[70](index=70&type=chunk) [Share of Profits and Losses - Joint Ventures and Associates](index=22&type=section&id=%E5%88%86%E4%BD%94%E6%90%8D%E7%9B%8A%EF%BC%8D%E5%90%88%E8%B3%87%E5%85%AC%E5%8F%B8%E5%8F%8A%E8%81%AF%E7%96%B6%E5%85%AC%E5%8F%B8) Share of profits increased **8.6%** year-on-year to **HKD 67.89 million**, primarily due to improved performance and increased profitability of the Group's associate companies - Share of profits increased **8.6%** year-on-year from **HKD 62.48 million** in H1 2024 to **HKD 67.89 million** in H1 2025[71](index=71&type=chunk) - Primarily due to improved performance and increased profitability of the Group's associate companies[71](index=71&type=chunk) [Profit Before Tax](index=22&type=section&id=%E9%99%A4%E7%A8%85%E5%89%8D%E5%88%A9%E6%BD%A4) Profit before tax increased **61.1%** year-on-year to **HKD 1.421 billion**, primarily due to significant improvements in operational quality across multiple business lines, including display, internet, and innovative businesses, benefiting from economies of scale and efficiency enhancements, which effectively lowered the overall expense ratio - Profit before tax increased **61.1%** year-on-year from **HKD 882 million** in H1 2024 to **HKD 1.421 billion** in H1 2025[72](index=72&type=chunk) - Primarily due to significant improvements in operational quality across multiple business lines, including display, internet, and innovative businesses, during the reporting period, benefiting from economies of scale and efficiency enhancements, which effectively lowered the overall expense ratio[72](index=72&type=chunk) [Income Tax Expense](index=22&type=section&id=%E6%89%80%E5%BE%97%E7%A8%85) Income tax expense increased **63.1%** year-on-year to **HKD 373 million**, primarily due to increased profit before tax for certain subsidiaries during the reporting period, with the Group's effective tax rate increasing **0.3 percentage points** year-on-year from **26.0%** in H1 2024 to **26.3%** in H1 2025 - Income tax expense increased **63.1%** year-on-year from **HKD 229 million** in H1 2024 to **HKD 373 million** in H1 2025[73](index=73&type=chunk) - The Group's effective tax rate increased **0.3 percentage points** year-on-year from **26.0%** in H1 2024 to **26.3%** in H1 2025[73](index=73&type=chunk) [Profit for the Period and Net Profit Attributable to Owners](index=23&type=section&id=%E6%9C%AC%E6%9C%9F%E5%88%A9%E6%BD%A4%E5%8F%8A%E6%AD%B8%E6%AF%8D%E6%B7%A8%E5%88%A9%E6%BD%A4) Profit for the period increased **60.5%** year-on-year to **HKD 1.048 billion**, and net profit attributable to owners grew **67.8%** year-on-year to **HKD 1.090 billion**, primarily due to the Group's continued increased R&D investment in high-end display technologies and AI, active global supply chain and channel deployment, and ongoing optimization of cost structure, leading to improved operational quality and enhanced profitability - Profit for the period increased **60.5%** year-on-year from **HKD 653 million** in H1 2024 to **HKD 1.048 billion** in H1 2025[74](index=74&type=chunk) - Net profit attributable to owners increased **67.8%** year-on-year from **HKD 650 million** in H1 2024 to **HKD 1.090 billion** in H1 2025[74](index=74&type=chunk) - The primary reasons for the increase are the Group's continued increased R&D investment in high-end display technologies and AI, active global supply chain and channel deployment, and ongoing optimization of cost structure, leading to improved operational quality and enhanced profitability[74](index=74&type=chunk) [Non-HKFRS Measures: Adjusted Net Profit Attributable to Owners](index=23&type=section&id=%E9%9D%9E%E9%A6%99%E6%B8%AF%E8%B2%A1%E5%8B%99%E5%A0%B1%E5%91%8A%E6%BA%96%E5%89%87%E8%A8%88%E9%87%8F%EF%BC%9A%E7%B6%93%E8%AA%BF%E6%95%B4%E6%AD%B8%E6%AF%8D%E6%B7%A8%E5%88%A9%E6%BD%A4) Adjusted net profit attributable to owners increased **62.0%** year-on-year to **HKD 1.060 billion**, primarily due to significant improvements in operating performance across multiple business lines, including display, internet, and innovative businesses, benefiting from economies of scale and efficiency enhancements, which effectively lowered the overall expense ratio and continuously improved operational efficiency; this non-HKFRS measure provides supplementary data for investors to assess the Group's core business performance - Adjusted net profit attributable to owners increased **62.0%** year-on-year from **HKD 654 million** in H1 2024 to **HKD 1.060 billion** in H1 2025[75](index=75&type=chunk) Reconciliation of Adjusted Net Profit Attributable to Owners to Net Profit Attributable to Owners | Metric | H1 2025 (Thousand HKD) | H1 2024 (Thousand HKD) | | :--- | :--- | :--- | | Net profit attributable to owners, as presented | 1,090,419 | 649,920 | | Net (gains) / losses from investment companies | (5,181) | 253 | | Net (gains) / losses from disposal and liquidation of subsidiaries | (745) | – | | Net (gains) / losses related to call and put options | (18,425) | 449 | | Net (gains) / losses from disposal of non-current assets | (8,643) | 4,764 | | Related income tax impact | 2,467 | (1,175) | | **Adjusted Net Profit Attributable to Owners** | **1,059,892** | **654,211** | [Financial Review](index=25&type=section&id=%E8%B2%A1%E5%8B%99%E5%9B%9E%E9%A1%A7) [Major Investments, Acquisitions and Disposals](index=25&type=section&id=%E4%B8%BB%E8%A6%81%E6%8A%95%E8%B3%87%E3%80%81%E6%94%B6%E8%B3%BC%E5%8F%8A%E5%87%BA%E5%94%AE) As of June 30, 2025, the Group held no major investments and made no significant acquisitions or disposals of subsidiaries, associates, or joint ventures during the six months ended on that date - The Group held no major investments as of **June 30, 2025**[80](index=80&type=chunk) - There were no significant acquisitions or disposals of subsidiaries, associates, or joint ventures during the six months ended **June 30, 2025**[80](index=80&type=chunk) [Future Plans for Material Investments or Capital Assets](index=25&type=section&id=%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B3%87%E6%88%96%E8%B3%87%E6%9C%AC%E8%B3%87%E7%94%A2%E7%9A%84%E6%9C%AA%E4%BE%86%E8%A8%88%E5%8A%83) Except as disclosed in this announcement, the Group currently has no specific plans for material investments or capital assets - Except as disclosed in this announcement, the Group currently has no specific plans for material investments or capital assets[81](index=81&type=chunk) [Liquidity and Financial Resources](index=25&type=section&id=%E6%B5%81%E5%8B%95%E8%B3%87%E9%87%91%E5%8F%8A%E8%B2%A1%E5%8B%99%E8%B3%87%E6%BA%90) The Group maintains ample liquidity, with cash and cash equivalents increasing **30.4%** year-on-year to **HKD 11.442 billion** as of June 30, 2025, and a stable net gearing ratio of **0.0%**, indicating a robust financial structure and sufficient liquidity - As of **June 30, 2025**, the Group's cash and cash equivalents totaled approximately **HKD 11.442 billion**, an increase of **30.4%** compared to **December 31, 2024**[82](index=82&type=chunk) - As of **June 30, 2025**, the Group's gearing ratio was **0.0%**[83](index=83&type=chunk) [Pledged Assets](index=26&type=section&id=%E8%B3%87%E7%94%A2%E6%8A%B5%E6%8A%BC) As of June 30, 2025, several of the Group's assets, including restricted cash and pledged deposits, debt instrument investments, bills receivable, inventories, other receivables, and trade receivables, were pledged as collateral for performance and quality assurance balances, financial assets, and bank facilities Pledged Assets as of June 30, 2025 | Pledged Assets | June 30, 2025 (HKD) | December 31, 2024 (HKD) | | :--- | :--- | :--- | | Restricted cash and pledged deposits | 543,179,000 | 669,910,000 | | Debt instruments at amortized cost | 161,821,000 | 107,637,000 | | Bills receivable | 116,124,000 | 192,282,000 | | Inventories | 99,577,000 | 400,087,000 | | Other receivables | 57,121,000 | 4,428,000 | | Trade receivables | 548,000 | 無 | [Capital Commitments and Contingent Liabilities](index=26&type=section&id=%E8%B3%87%E6%9C%AC%E6%89%BF%E6%93%94%E5%8F%8A%E6%88%96%E7%84%B6%E8%B2%A0%E5%82%B5) As of June 30, 2025, the Group had contracted but unprovided capital commitments of approximately **HKD 533 million**, with no authorized but uncontracted capital commitments; additionally, TCL SEMP Eletroeletronicos is involved in a Brazilian tax assessment dispute for which the Group has made no provision based on legal advice - As of **June 30, 2025**, the Group had contracted but unprovided capital commitments of approximately **HKD 533 million**[85](index=85&type=chunk) - TCL SEMP Eletroeletronicos is involved in a Brazilian tax assessment dispute, for which the Group has made no provision based on legal counsel's opinion that an effective defense can be mounted[86](index=86&type=chunk) [Pending Litigation](index=26&type=section&id=%E6%9C%AA%E6%B1%BA%E8%A8%B4%E8%A8%9F) Aside from the aforementioned Brazilian tax dispute, the Group was not involved in any other material litigation as of June 30, 2025 - Aside from the aforementioned, the Group was not involved in any material litigation as of **June 30, 2025**[87](index=87&type=chunk) [Foreign Currency Exchange Risk](index=26&type=section&id=%E5%A4%96%E5%B9%A3%E5%8C%AF%E5%85%8C%E9%A2%A8%E9%9A%AA) The Group effectively monitors and manages foreign currency exchange risk through a centralized foreign exchange management strategy, emphasizing functional currency transactions for natural hedging, and avoiding high-risk derivative instrument transactions - The Group adopts a centralized foreign exchange management strategy to monitor overall foreign exchange risk, offset positions of various associated companies, and conduct centralized hedging transactions with banks[88](index=88&type=chunk) - Emphasizes the importance of conducting trade, investments, and borrowings in functional currencies to achieve natural hedging effects[88](index=88&type=chunk) - For sound financial management purposes, the Group does not engage in any high-risk derivative instrument transactions or leveraged foreign exchange contracts[88](index=88&type=chunk) [Employees and Remuneration Policy](index=27&type=section&id=%E5%83%B1%E5%93%A1%E5%8F%8A%E9%85%AC%E9%87%91%E6%94%BF%E7%AD%96) As of June 30, 2025, the Group had **32,603** employees with total employee costs of approximately **HKD 3.342 billion**, offering competitive benefits, performance bonuses, and continuous training, and granted **91,497,900** award shares under the 2023 Share Award Scheme on April 9, 2025 - As of **June 30, 2025**, the Group had **32,603** employees, with total employee costs of approximately **HKD 3.342 billion**[89](index=89&type=chunk) - The Group provides competitive benefits, performance bonuses based on Group performance and individual employee contributions, and continuous training and development programs[89](index=89&type=chunk) - On **April 9, 2025**, **91,497,900** award shares were granted under the 2023 Share Award Scheme[90](index=90&type=chunk) [Financial Information](index=28&type=section&id=%E8%B2%A1%E5%8B%99%E8%B3%87%E6%96%99) [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=28&type=section&id=%E7%B6%9C%E5%90%88%E6%90%8D%E7%9B%8A%E5%8F%8A%E5%85%B6%E4%BB%96%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) Profit for the period increased **60.5%** year-on-year to **HKD 1.048 billion**, and profit attributable to owners of the parent increased **67.8%** to **HKD 1.090 billion**, with total comprehensive income significantly growing to **HKD 1.101 billion**, basic earnings per share at **45.14 HK cents**, and diluted earnings per share at **43.04 HK cents** Consolidated Statement of Profit or Loss and Other Comprehensive Income (Six Months Ended June 30) | Metric | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | Revenue | 54,777,049 | 45,493,620 | | Gross Profit | 8,365,951 | 7,212,859 | | Profit Before Tax | 1,420,846 | 881,796 | | Profit for the Period | 1,047,650 | 652,914 | | Profit Attributable to Owners of the Parent | 1,090,419 | 649,920 | | Total Comprehensive Income for the Period | 1,100,547 | 313,878 | | Basic Earnings Per Share Attributable to Ordinary Equity Holders of the Parent | 45.14港仙 | 26.69港仙 | | Diluted Earnings Per Share Attributable to Ordinary Equity Holders of the Parent | 43.04港仙 | 25.62港仙 | [Consolidated Statement of Financial Position](index=31&type=section&id=%E7%B6%9C%E5%90%88%E8%B3%87%E7%94%A2%E8%B2%A0%E5%82%B5%E8%A1%A8) As of June 30, 2025, the Group's total assets were **HKD 82.679 billion**, with net assets of **HKD 17.726 billion**; total current assets amounted to **HKD 69.442 billion**, including **HKD 20.013 billion** in inventories and **HKD 11.442 billion** in cash and cash equivalents, while total current liabilities were **HKD 63.337 billion**, with trade payables at **HKD 31.075 billion** Consolidated Statement of Financial Position (As of June 30) | Metric | June 30, 2025 (Thousand HKD) | December 31, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Total Non-Current Assets | 13,236,644 | 11,833,477 | | Total Current Assets | 69,442,484 | 64,533,927 | | Inventories | 20,012,987 | 15,288,555 | | Trade Receivables | 21,826,741 | 22,332,884 | | Cash and Cash Equivalents | 11,441,935 | 8,771,691 | | Total Current Liabilities | 63,336,670 | 57,128,936 | | Trade Payables | 31,075,322 | 26,646,451 | | Net Assets | 17,725,820 | 17,676,418 | [Notes](index=33&type=section&id=%E9%99%84%E8%A8%BB) This section provides detailed notes to the interim condensed consolidated financial statements, covering basis of preparation, changes in accounting policies, new HKFRSs not yet effective, operating segment information, revenue, finance costs, profit before tax, income tax, dividends, earnings per share, goodwill, trade receivables, trade payables, interest-bearing bank and other borrowings, share capital, and restatement of comparative amounts [1. Basis of Preparation](index=33&type=section&id=1.%20%E7%B7%A8%E8%A3%BD%E5%9F%BA%E6%BA%96) These unaudited interim condensed consolidated financial statements are prepared in accordance with Hong Kong Accounting Standard 34 and Appendix D2 of the Listing Rules, using the historical cost convention and presented in Hong Kong dollars - These unaudited interim condensed consolidated financial statements are prepared in accordance with Hong Kong Accounting Standard **34** and the disclosure requirements of Appendix **D2** of the Listing Rules issued by the Hong Kong Institute of Certified Public Accountants[98](index=98&type=chunk) - Prepared under the historical cost convention, except for derivative financial instruments and certain financial assets and equity investments which are measured at fair value[98](index=98&type=chunk) - Presented in Hong Kong dollars, with all values rounded to the nearest thousand[98](index=98&type=chunk) [2. Changes in Accounting Policies and Disclosures](index=33&type=section&id=2.%20%E6%9C%83%E8%A8%88%E6%94%BF%E7%AD%96%E5%8F%8A%E6%8A%AB%E9%9C%B2%E7%9A%84%E8%AE%8A%E5%8B%95) The financial information for the current period first adopted HKAS 21 amendment "Lack of Exchangeability," which clarifies currency exchange assessment and spot exchange rate estimation methods, but had no significant impact on the interim condensed consolidated financial information - First adopted the HKAS **21** amendment "Lack of Exchangeability"[99](index=99&type=chunk)[100](index=100&type=chunk) - These amendments will not have any significant impact on the interim condensed consolidated financial information[100](index=100&type=chunk) [3. New and Revised HKFRSs Issued But Not Yet Effective](index=34&type=section&id=3.%20%E5%B7%B2%E9%A0%92%E5%B8%83%E4%BD%86%E5%B0%9A%E6%9C%AA%E7%94%9F%E6%95%88%E7%9A%84%E9%A6%99%E6%B8%AF%E8%B2%A1%E5%8B%99%E5%A0%B1%E5%91%8A%E6%BA%96%E5%88%99%E6%9C%83%E8%A8%88%E6%BA%96%E5%88%99) The Group has not yet applied several new and revised HKFRSs issued but not yet effective, including HKFRS 18, 19, and amendments to HKFRS 9 and 7, and is currently assessing the impact of their initial application - The Group has not applied the following new and revised HKFRSs issued but not yet effective in these unaudited interim condensed financial statements[101](index=101&type=chunk) - Including HKFRS **18**, HKFRS **19**, and amendments to HKFRS **9** and HKFRS **7**[102](index=102&type=chunk) - The Group is assessing the impact of the initial application of these new and revised HKFRSs[102](index=102&type=chunk) [4. Operating Segment Information](index=34&type=section&id=4.%20%E7%B6%93%E7%87%9F%E5%88%86%E9%A1%9E%E8%B3%87%E6%96%99) The Group is organized into six reportable operating segments based on regional TV categories and other product types: TCL TV (China Market and International Market), Internet Business, Smart Mobile, Connected Devices and Services, All-Category Marketing, Photovoltaic Business, and Smart Commercial Display, Smart Home and Other Businesses; segment performance is assessed based on each segment's revenue and gross profit - The Group is organized into six reportable operating segments: TCL TV (China Market and International Market), Internet Business, Smart Mobile, Connected Devices and Services, All-Category Marketing, Photovoltaic Business, and Smart Commercial Display, Smart Home and Other Businesses[105](index=105&type=chunk) - Segment performance is assessed based on each segment's revenue and gross profit[103](index=103&type=chunk) Operating Segment Revenue and Gross Profit (Six Months Ended June 30) | Segment | 2025 Revenue (Thousand HKD) | 2024 Revenue (Thousand HKD) | 2025 Gross Profit (Thousand HKD) | 2024 Gross Profit (Thousand HKD) | | :--- | :--- | :--- | :--- | :--- | | TCL TV - China Market | 8,720,454 | 8,353,344 | 1,689,451 | 1,482,275 | | TCL TV - International Market | 19,631,732 | 17,560,766 | 2,824,399 | 2,515,916 | | Internet Business | 1,457,871 | 1,212,056 | 793,226 | 653,093 | | Smart Mobile, Connected Devices and Services | 5,170,279 | 4,410,323 | 790,447 | 756,258 | | All-Category Marketing | 7,842,078 | 7,752,507 | 1,089,555 | 1,161,976 | | Photovoltaic Business | 11,136,594 | 5,269,368 | 1,073,390 | 540,859 | | Smart Commercial Display, Smart Home and Other Businesses | 818,041 | 935,256 | 105,483 | 102,482 | | **Consolidated** | **54,777,049** | **45,493,620** | **8,365,951** | **7,212,859** | [5. Revenue](index=36&type=section&id=5.%20%E6%94%B6%E5%85%A5_%E9%99%84%E8%A8%BB) This note provides a detailed analysis of revenue from contracts with customers, categorized by type of goods or services, geographical market, and timing of revenue recognition, with sales of goods being the primary revenue source, Mainland China as the largest geographical market, and most revenue recognized at a point in time Disaggregated Revenue Information from Contracts with Customers (Six Months Ended June 30, 2025) | Category | TV and Others (Thousand HKD) | Internet Business (Thousand HKD) | Total (Thousand HKD) | | :--- | :--- | :--- | :--- | | **Type of goods or services** | | | | | Sales of goods | 52,664,558 | 92,953 | 52,757,511 | | Construction services | 654,620 | – | 654,620 | | Video-on-demand services | – | 301,099 | 301,099 | | Advertising, vertical applications and other new businesses | – | 1,063,819 | 1,063,819 | | **Total revenue from contracts with customers** | **53,319,178** | **1,457,871** | **54,777,049** | | **Geographical markets** | | | | | Mainland China | 24,171,944 | 957,223 | 25,129,167 | | Europe | 6,691,562 | 77,395 | 6,768,957 | | North America | 8,459,101 | 211,355 | 8,670,456 | | Emerging markets | 13,996,571 | 211,898 | 14,208,469 | | **Total revenue from contracts with customers** | **53,319,178** | **1,457,871** | **54,777,049** | | **Timing of revenue recognition** | | | | | Transfer of goods at a point in time | 52,664,558 | 92,953 | 52,757,511 | | Services transferred over time | 654,620 | 301,099 | 955,719 | | Services transferred at a point in time | – | 1,063,819 | 1,063,819 | | **Total revenue from contracts with customers** | **53,319,178** | **1,457,871** | **54,777,049** | [6. Finance Costs](index=38&type=section&id=6.%20%E8%9E%8D%E8%B3%87%E6%88%90%E6%9C%AC_%E9%99%84%E8%A8%BB) This note details the components of finance costs, primarily comprising interest on bank/factoring loans and bill discounting, totaling **HKD 392 million**, a decrease from the same period last year Finance Costs (Six Months Ended June 30) | Metric | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | Interest on bank/factoring loans and bill discounting | 378,176 | 497,732 | | Interest on deposits and loans from companies controlled by TCL Industries Holdings | 3,861 | 15,187 | | Interest on deposits from associate companies of TCL Industries Holdings | 72 | – | | Interest expense on lease liabilities | 10,125 | 8,439 | | **Total finance costs for the period** | **392,234** | **521,358** | [7. Profit Before Tax](index=38&type=section&id=7.%20%E9%99%A4%E7%A8%85%E5%89%8D%E5%88%A9%E6%BD%A4_%E9%99%84%E8%A8%BB) This note details expenses deducted from profit before tax, including depreciation of property, plant and equipment, amortization of other intangible assets, and share-based employee benefits, notably with no goodwill impairment recognized in H1 2025, compared to **HKD 126 million** in H1 2024 Items Deducted from Profit Before Tax (Six Months Ended June 30) | Metric | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | Depreciation of property, plant and equipment | 203,617 | 188,058 | | Depreciation of investment properties | 5,942 | 7,450 | | Depreciation of right-of-use assets | 93,278 | 89,743 | | Impairment of goodwill | – | 126,040 | | Amortisation of other intangible assets | 276,047 | 241,031 | | Share-based employee benefits under TCL Share Award Scheme | 101,389 | 44,645 | [8. Income Tax Expense](index=39&type=section&id=8.%20%E6%89%80%E5%BE%97%E7%A8%85_%E9%99%84%E8%A8%BB) This note provides a detailed analysis of income tax expense, including current tax expense for Hong Kong and other regions, under-provision in prior periods, and deferred tax, with total tax expense at **HKD 373 million** and an effective tax rate of **26.3%** Income Tax Expense (Six Months Ended June 30) | Metric | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | Current period – Hong Kong current tax expense | 145,912 | 2,640 | | Current period – Other regions current tax expense | 315,478 | 218,749 | | Under-provision in prior periods | 58,633 | 14,429 | | Deferred | (146,827) | (6,936) | | **Total tax expense for the period** | **373,196** | **228,882** | - Hong Kong profits tax is provided at a rate of **16.5%**, while other regions are calculated at local tax rates[112](index=112&type=chunk) [9. Dividends](index=39&type=section&id=9.%20%E8%82%A1%E6%81%AF_%E9%99%84%E8%A8%BB) The Board of Directors has resolved not to declare any dividends for the six months ended June 30, 2025, consistent with the same period in 2024 - The Board of Directors has resolved not to declare any dividends for the six months ended **June 30, 2025** (June 30, 2024: nil)[114](index=114&type=chunk) [10. Earnings Per Share Attributable to Ordinary Equity Holders of the Parent](index=40&type=section&id=10.%20%E6%AF%8D%E5%85%AC%E5%8F%B8%E6%99%AE%E9%80%9A%E8%82%A1%E8%82%A1%E6%9D%B1%E6%87%89%E4%BD%94%E6%AF%8F%E8%82%A1%E7%9B%88%E5%88%A9) This note details the calculation of basic and diluted earnings per share; in H1 2025, profit attributable to ordinary equity holders of the parent was **HKD 1.090 billion**, with basic earnings per share at **45.14 HK cents** and diluted earnings per share at **43.04 HK cents** Earnings Per Share Calculation (Six Months Ended June 30) | Metric | 2025 (Thousand HKD/Number of Shares) | 2024 (Thousand HKD/Number of Shares) | | :--- | :--- | :--- | | Profit attributable to ordinary equity holders of the parent used for calculating basic and diluted earnings per share | 1,090,419 | 649,920 | | Weighted average number of ordinary shares outstanding during the period for calculating basic earnings per share, less shares held for TCL Share Award Scheme | 2,415,542,163 | 2,434,812,243 | | Dilutive effect - weighted average number of award shares | 117,713,978 | 102,298,251 | | Weighted average number of ordinary shares outstanding during the period for calculating diluted earnings per share | 2,533,256,141 | 2,537,110,494 | [11. Goodwill](index=41&type=section&id=11.%20%E5%95%86%E8%AD%BD) As of June 30, 2025, the net carrying amount of goodwill was **HKD 3.167 billion**, an increase from the beginning of the year, primarily due to the recognition of provisional goodwill of **HKD 168 million** from subsidiary acquisitions during the period Movement in Goodwill (As of June 30, 2025) | Metric | Thousand HKD | | :--- | :--- | | Net carrying amount as at January 1, 2025 | 2,947,380 | | Acquisition of subsidiaries | 168,103 | | Exchange adjustments | 51,563 | | Net carrying amount as at June 30, 2025 (unaudited) | 3,167,046 | - Provisional goodwill of **HKD 168 million** was recognized, as the fair value assessment of identifiable assets and liabilities of subsidiaries acquired during the period has not yet been finalized[117](index=117&type=chunk) [12. Trade Receivables](index=41&type=section&id=12.%20%E6%87%89%E6%94%B6%E8%B2%BF%E6%98%93%E8%B3%87%E6%AC%BE) As of June 30, 2025, net trade receivables amounted to **HKD 21.827 billion**, a slight decrease from year-end 2024, with credit terms typically ranging from **30 to 180 days**, some receivables held as collateral, and impairment provisions increasing to **HKD 288 million** Ageing Analysis of Trade Receivables (By Invoice Date) | Ageing | June 30, 2025 (Thousand HKD) | December 31, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Current to 90 days | 15,642,677 | 16,595,138 | | 91 to 180 days | 2,690,791 | 2,857,168 | | 181 to 365 days | 2,096,588 | 2,059,204 | | Over 365 days | 1,684,448 | 1,088,325 | | **Total** | **22,114,504** | **22,599,835** | | Impairment allowance | (287,763) | (266,951) | | **Net** | **21,826,741** | **22,332,884** | - Most of the Group's sales in Mainland China are settled by cash on delivery or bank-guaranteed commercial bills, with credit terms of **30 to 90 days**; for overseas sales, settlement is generally required using letters of credit with terms of **90 to 180 days**[118](index=118&type=chunk) - Approximately **HKD 548,000** of trade receivables have been pledged as collateral for the Group's bank loans[119](index=119&type=chunk) [13. Trade Payables](index=42&type=section&id=13.%20%E6%87%89%E4%BB%98%E8%B2%BF%E6%98%93%E8%B3%87%E6%AC%BE) As of June 30, 2025, total trade payables amounted to **HKD 31.075 billion**, an increase from year-end 2024; trade payables are interest-free and typically settled within credit terms ranging from **30 to 120 days** Ageing Analysis of Trade Payables (By Invoice Date) | Ageing | June 30, 2025 (Thousand HKD) | December 31, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Current to 90 days | 25,007,522 | 21,779,822 | | 91 to 180 days | 4,917,774 | 3,852,823 | | 181 to 365 days | 932,785 | 860,845 | | Over 365 days | 217,241 | 152,961 | | **Total** | **31,075,322** | **26,646,451** | - Trade payables are interest-free and typically settled within credit terms ranging from **30 to 120 days**[121](index=121&type=chunk) [14. Interest-Bearing Bank and Other Borrowings](index=43&type=section&id=14.%20%E8%A8%88%E6%81%AF%E9%8A%80%E8%A1%8C%E8%B2%B8%E6%AC%BE%E5%8F%8A%E5%85%B6%E4%BB%96%E8%B2%B8%E6%AC%BE) As of June 30, 2025, total interest-bearing bank and other borrowings amounted to **HKD 5.805 billion**, with most being current and unsecured loans; TCL Industries Holdings provided guarantees for certain of the Group's bank loans totaling **HKD 2.915 billion** Interest-Bearing Bank and Other Borrowings (As of June 30) | Category | June 30, 2025 (Thousand HKD) | December 31, 2024 (Thousand HKD) | | :--- | :--- | :--- | | **Current** | | | | Bank loans – unsecured | 5,350,612 | 3,755,295 | | Bank loans – secured | 209,472 | 400,318 | | Bank advances as consideration for factored trade receivables | 2,612 | 11,927 | | Loans from a company controlled by TCL Industries Holdings | 20,089 | 4,859 | | **Total Current** | **5,582,785** | **4,172,399** | | **Non-current** | | | | Bank loans – unsecured | 218,771 | 434,423 | | Bank loans – secured | 3,168 | 3,237 | | **Total Non-Current** | **221,939** | **437,660** | | **Total** | **5,804,724** | **4,610,059** | - TCL Industries Holdings has separately guaranteed certain of the Group's bank loans, with a guaranteed amount of **HKD 2.915 billion**[124](index=124&type=chunk) - Certain of the Group's bank loans are secured by debt instruments measured at amortized cost, inventories, future receivables, and trade receivables[124](index=124&type=chunk) [15. Share Capital](index=44&type=section&id=15.%20%E8%82%A1%E6%9C%AC) As of June 30, 2025, the Company's issued and fully paid share capital was **HKD 2.521 billion**, consistent with December 31, 2024 Share Capital (As of June 30) | Metric | June 30, 2025 (Thousand HKD) | December 31, 2024 (Thousand HKD) | | :--- | :--- | :--- | | 3,000,000,000 shares of HKD 1.00 each (authorized) | 3,000,000 | 3,000,000 | | 2,520,935,155 shares of HKD 1.00 each (issued and fully paid) | 2,520,935 | 2,520,935 | [16. Comparative Amounts](index=44&type=section&id=16.%20%E6%AF%94%E8%BC%83%E9%87%91%E9%A1%8D) Certain comparative amounts have been reclassified to conform with the current period's presentation and disclosure - Certain comparative amounts have been reclassified to conform with the current period's presentation and disclosure[124](index=124&type=chunk) [Purchase, Sale or Redemption of Shares](index=45&type=section&id=%E8%B3%BC%E8%B2%B7%E3%80%81%E5%87%BA%E5%94%AE%E6%88%96%E8%B4%96%E5%9B%9E%E8%82%A1%E4%BB%BD) During the six months ended June 30, 2025, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities, including treasury shares - During the six months ended **June 30, 2025**, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities (including treasury shares)[125](index=125&type=chunk) [Interim Dividend](index=45&type=section&id=%E4%B8%AD%E6%9C%9F%E8%82%A1%E6%81%AF) The Board of Directors has resolved not to declare any dividends for the six months ended June 30, 2025, consistent with the same period in 2024 - The Board of Directors has resolved not to declare any dividends for the six months ended **June 30, 2025** (June 30, 2024: nil)[126](index=126&type=chunk) [Corporate Governance](index=45&type=section&id=%E4%BC%81%E6%A5%AD%E6%B2%BB%E7%90%86) The Company has established and will continuously optimize its risk management and internal control systems, with management regularly reporting corporate governance status to the Board and Audit Committee - The Company has established and will continuously optimize its risk management and internal control systems, with management regularly reporting corporate governance status to the Board and Audit Committee[127](index=127&type=chunk) - The Company has complied with the code provisions of the Corporate Governance Code during the six months ended **June 30, 2025**[128](index=128&type=chunk) - The Audit Committee, together with the Company's management, has reviewed the Group's unaudited interim condensed consolidated financial statements for the six months ended **June 30, 2025**[129](index=129&type=chunk) [Standa