Report Cover and Basic Information This section provides the company's basic information, report type, and disclaimers regarding the GEM market's characteristics and associated risks [Company Overview and Report Statement](index=1&type=section&id=Company%20Overview%20and%20Report%20Statement) China CBM Group Company Limited (Stock Code: 8270) released its unaudited interim results for the six months ended June 30, 2025, with the Board confirming the report's accuracy and completeness - Company Name: **China CBM Group Company Limited** (Stock Code: **8270**)[2](index=2&type=chunk) - Report Type: Unaudited interim results announcement for the six months ended June 30, 2025[2](index=2&type=chunk)[3](index=3&type=chunk) - Board Statement: Directors jointly and individually accept full responsibility for this announcement, confirming the information is accurate, complete, and not misleading[5](index=5&type=chunk) [GEM Market Characteristics and Disclaimer](index=2&type=section&id=GEM%20Market%20Characteristics%20and%20Disclaimer) The report highlights the HKEX GEM market's high investment risk and volatility, suitable for professional investors, and reiterates the HKEX's non-responsibility for report content - GEM Market Positioning: Provides a listing market for companies with **higher investment risks**, suitable for professional and sophisticated investors[6](index=6&type=chunk)[11](index=11&type=chunk) - GEM Market Risks: Securities may be subject to **significant market volatility** and high liquidity cannot be guaranteed[7](index=7&type=chunk)[11](index=11&type=chunk) - HKEX Disclaimer: Hong Kong Exchanges and Clearing Limited and the Stock Exchange take **no responsibility** for the contents of this report, make no representation as to its accuracy or completeness, and expressly disclaim any liability for any loss whatsoever[8](index=8&type=chunk)[11](index=11&type=chunk) Corporate Information This section details the company's governance structure, including board and committee members, key personnel, office locations, and share registration details [Board and Committee Members](index=3&type=section&id=Board%20and%20Committee%20Members) Disclosure of the company's Board members, including executive, non-executive, and independent non-executive directors, and the composition of its Audit, Nomination, and Remuneration Committees - Executive Directors: **Wang Zhong Sheng** (Chairman), **Chang Jian**, **Wang Chen**, **Chen Yi Kai**, and **Liang Zhi Hao**[14](index=14&type=chunk)[15](index=15&type=chunk) - Non-executive Director: **Li Si Liang**[14](index=14&type=chunk)[15](index=15&type=chunk) - Independent Non-executive Directors: **Liu Zhen Bang**, **Wang Zhi He**, and **Xu Yuan Jian**[14](index=14&type=chunk)[15](index=15&type=chunk) - Committee Chairmen: Audit Committee Chairman is **Liu Zhen Bang**, Nomination Committee Chairman is **Wang Zhi He**, and Remuneration Committee Chairman is **Liu Zhen Bang**[14](index=14&type=chunk)[15](index=15&type=chunk)[16](index=16&type=chunk)[17](index=17&type=chunk) [Company Secretary and Authorized Representatives](index=4&type=section&id=Company%20Secretary%20and%20Authorized%20Representatives) Names of the company's Company Secretary, Compliance Officer, and Authorized Representatives are listed - Company Secretary: **Mr. Tse Chun Lai**[16](index=16&type=chunk)[17](index=17&type=chunk) - Compliance Officer: **Mr. Wang Zhong Sheng**[16](index=16&type=chunk)[17](index=17&type=chunk) - Authorized Representatives: **Mr. Wang Zhong Sheng** and **Mr. Tse Chun Lai**[16](index=16&type=chunk)[17](index=17&type=chunk) [Offices and Registration Information](index=4&type=section&id=Offices%20and%20Registration%20Information) Provides the addresses for the company's Hong Kong head office, principal place of business, and registered office - Hong Kong Head Office and Principal Place of Business: **Unit 20, 19/F, Tsuen Fat Commercial Building, 362 Sha Tsui Road, Tsuen Wan, Hong Kong**[16](index=16&type=chunk)[17](index=17&type=chunk) - Registered Office: **Clarendon House, 2 Church Street, Hamilton HM11, Bermuda**[16](index=16&type=chunk)[17](index=17&type=chunk) [Share Registration and Other Information](index=5&type=section&id=Share%20Registration%20and%20Other%20Information) Discloses the company's principal share registrar, Hong Kong branch share registrar, auditor, principal banker, and stock code - Principal Share Registrar: **Codan Services Limited**[18](index=18&type=chunk) - Hong Kong Branch Share Registrar: **Tricor Tengis Limited**[19](index=19&type=chunk) - Auditor: **ZHONG RUI HE XIN CPA Limited**[19](index=19&type=chunk) - Principal Banker: **Bank of China (Hong Kong) Limited**[19](index=19&type=chunk) - Stock Code: **08270**[19](index=19&type=chunk) Financial Highlights For the six months ended June 30, 2025, group revenue significantly decreased by **52.1%** to **RMB 57.5 million**, with a loss attributable to equity holders of **RMB 11.1 million** and a loss per share of **RMB 2.85 cents**, and no dividend recommended 2025年上半年财务摘要 | Indicator | 2025年上半年 (RMB'000) | 2024年上半年 (RMB'000) | 同比变化 | | :--- | :--- | :--- | :--- | | Revenue | 57,520 | 120,057 | -52.1% | | Loss attributable to equity holders of the Company | (11,116) | (4,113) | 170.3% (Loss widened) | | Loss per share | (2.85) cents | (1.05) cents | 171.4% (Loss widened) | - The Board does not recommend the payment of any interim dividend for the period[20](index=20&type=chunk) Condensed Consolidated Financial Statements This section presents the group's unaudited interim financial statements, including the income statement, comprehensive income, financial position, cash flows, and changes in equity [Condensed Consolidated Income Statement](index=7&type=section&id=CONDENSED%20CONSOLIDATED%20INCOME%20STATEMENT) For the six months ended June 30, 2025, group revenue was **RMB 57.520 million**, gross profit was **RMB 8.373 million**, and loss for the period was **RMB 11.116 million**, significantly widening from the prior year 简明综合收益表关键数据 (截至6月30日止半年) | Indicator | 2025年 (RMB'000) | 2024年 (RMB'000) | | :--- | :--- | :--- | | Revenue | 57,520 | 120,057 | | Cost of sales | (49,147) | (105,362) | | Gross profit | 8,373 | 14,695 | | Other income and gains or losses | 1,046 | 85 | | Selling and distribution costs | (2,038) | (1,959) | | Administrative and other expenses | (19,096) | (14,687) | | Finance costs | (511) | (463) | | Loss before taxation | (12,226) | (2,329) | | Income tax credit/(expense) | 1,110 | (1,784) | | Loss for the period | (11,116) | (4,113) | | Basic loss per share | (2.85) cents | (1.05) cents | [Condensed Consolidated Statement of Comprehensive Income](index=9&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENT%20OF%20COMPREHENSIVE%20INCOME) For the six months ended June 30, 2025, the group recorded a total comprehensive loss of **RMB 12.036 million**, primarily due to loss for the period and exchange differences on foreign currency financial statements, with the loss widening year-on-year 简明综合全面收益表关键数据 (截至6月30日止半年) | Indicator | 2025年 (RMB'000) | 2024年 (RMB'000) | | :--- | :--- | :--- | | Loss for the period | (11,116) | (4,113) | | Exchange differences on translation of financial statements of foreign entities | (920) | (718) | | Total comprehensive loss for the period | (12,036) | (4,831) | [Condensed Consolidated Statement of Financial Position](index=10&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENT%20OF%20FINANCIAL%20POSITION) As of June 30, 2025, group total assets were **RMB 342.952 million**, a slight increase from year-end 2024; net current liabilities expanded to **RMB (138.798) million**, and total equity decreased to **RMB 111.016 million** 简明综合财务状况表关键数据 | Indicator | 2025年6月30日 (RMB'000) | 2024年12月31日 (RMB'000) | | :--- | :--- | :--- | | Non-current assets | 237,193 | 252,629 | | Current assets | 90,556 | 90,323 | | Total assets | 342,952 | 327,749 | | Current liabilities | 229,121 | 201,725 | | Non-current liabilities | 2,815 | 2,972 | | Net assets | 111,016 | 123,052 | | Share capital | 26,305 | 26,305 | | Reserves | 88,928 | 100,964 | | Total equity | 111,016 | 123,052 | - Net current liabilities expanded from **RMB (111.169) million** as of December 31, 2024, to **RMB (138.798) million** as of June 30, 2025[26](index=26&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=12&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENT%20OF%20CASH%20FLOWS) For the six months ended June 30, 2025, the group's net cash inflow from operating activities was **RMB 4.482 million**, net cash outflow from investing activities was **RMB (0.178) million**, and net cash outflow from financing activities was **RMB (5.332) million**, resulting in a net decrease in cash and bank balances of **RMB (1.028) million** 简明综合现金流量表关键数据 (截至6月30日止六个月) | Indicator | 2025年 (RMB'000) | 2024年 (RMB'000) | | :--- | :--- | :--- | | Net cash inflow from operating activities | 4,482 | 8,623 | | Net cash outflow from investing activities | (178) | (5,567) | | Net cash (outflow)/inflow from financing activities | (5,332) | 9,557 | | Net (decrease)/increase in cash and bank balances | (1,028) | 12,613 | | Cash and bank balances at end of period | 47,456 | 58,057 | [Condensed Consolidated Statement of Changes in Equity](index=13&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENT%20OF%20CHANGES%20IN%20EQUITY) For the six months ended June 30, 2025, the group's total equity decreased from **RMB 123.052 million** at the beginning of the year to **RMB 111.016 million**, primarily due to loss for the period and a reduction in translation reserve 简明综合权益变动表关键数据 | Equity Item | 2025年1月1日 (RMB'000) | Loss for the period (RMB'000) | Other comprehensive expense (RMB'000) | 2025年6月30日 (RMB'000) | | :--- | :--- | :--- | :--- | :--- | | Share capital | 26,305 | – | – | 26,305 | | Share premium | 33,998 | – | – | 33,998 | | General reserve | 1,892 | – | – | 1,892 | | Translation reserve | (5,399) | – | (920) | (6,319) | | Share option reserve | 2,814 | – | – | 2,814 | | Convertible bond reserve | 9,820 | – | – | 9,820 | | Other reserve | (31,012) | – | – | (31,012) | | Accumulated losses | 88,851 | (11,116) | – | 77,735 | | Total equity attributable to equity holders of the Company | 127,269 | (11,116) | (920) | 115,233 | | Non-controlling interests | (4,217) | – | – | (4,217) | | **Total Equity** | **123,052** | **(11,116)** | **(920)** | **111,016** | Notes to the Condensed Consolidated Financial Statements This section provides detailed explanations and breakdowns for various financial statement items, including accounting policies, revenue, expenses, and balance sheet components [5.1 Basis of presentation of financial statements](index=14&type=section&id=1.%20Basis%20of%20presentation%20of%20financial%20statements) Financial statements are prepared under Hong Kong GAAP and HKICPA standards, presented on a historical cost basis, reviewed by the Audit Committee, with the group primarily operating in China and business activities denominated in RMB - Preparation Basis: Hong Kong Generally Accepted Accounting Principles and accounting standards issued by the Hong Kong Institute of Certified Public Accountants[29](index=29&type=chunk)[32](index=32&type=chunk) - Review Status: Unaudited by the Company's auditor, but reviewed by the Company's Audit Committee[30](index=30&type=chunk)[32](index=32&type=chunk) - Operating Region and Currency: Primarily operates in China, with business activities mainly conducted in RMB, and results prepared in RMB[31](index=31&type=chunk)[32](index=32&type=chunk) [5.2 Application of New and Revised Hong Kong Financial Reporting Standards ("HKFRSs")](index=15&type=section&id=2.%20Application%20of%20New%20and%20Revised%20Hong%20Kong%20Financial%20Reporting%20Standards%20(%22HKFRSs%22)) The group has applied new and revised HKFRSs effective this period, with no material impact on current or prior financial performance, and is assessing the impact of standards issued but not yet effective - Standards Applied: New and revised HKFRSs effective for the current period have been applied[33](index=33&type=chunk)[37](index=37&type=chunk) - Impact: No **material impact** on the Group's current or prior period financial performance and position[33](index=33&type=chunk)[37](index=37&type=chunk) - Future Standards: The HKICPA has issued several amendments, new standards, and interpretations not yet effective, and the Group is assessing their impact[34](index=34&type=chunk)[35](index=35&type=chunk)[37](index=37&type=chunk) [5.3 Revenue and segment information](index=15&type=section&id=3.%20Revenue%20and%20segment%20information) The company is an investment holding company, with subsidiaries primarily engaged in liquefied CBM production and sales (including processing services) and pipeline natural gas sales; total revenue decreased by **52.1%** year-on-year in H1 2025 due to a significant drop in liquefied CBM sales, despite growth in pipeline natural gas sales - Principal Business: Production and sales of liquefied coalbed methane (including CBM liquefaction processing services) and sales of pipeline natural gas[36](index=36&type=chunk)[38](index=38&type=chunk) 收益构成 (截至6月30日止半年) | Revenue Category | 2025年 (RMB'000) | 2024年 (RMB'000) | | :--- | :--- | :--- | | Liquefied CBM sales (including processing services) | 37,228 | 108,150 | | Pipeline natural gas sales | 20,292 | 11,907 | | **Total Revenue** | **57,520** | **120,057** | 其他收入及收益或亏损 (截至6月30日止半年) | Category | 2025年 (RMB'000) | 2024年 (RMB'000) | | :--- | :--- | :--- | | Interest income from bank deposits | 31 | 8 | | Others | 1,015 | 77 | | **Total** | **1,046** | **85** | - The Group's revenue and assets primarily derive from and relate to the liquefied CBM business in China, with other segments being **immaterial**, thus no geographical segment information is presented[40](index=40&type=chunk) [5.4 Loss before taxation](index=17&type=section&id=4.%20Loss%20before%20taxation) For the six months ended June 30, 2025, the group's loss before taxation was **RMB 12.226 million**, significantly widening from **RMB 2.329 million** in the prior year, primarily due to increased staff costs and reduced depreciation 除税前亏损构成 (截至6月30日止半年) | Item | 2025年 (RMB'000) | 2024年 (RMB'000) | | :--- | :--- | :--- | | Staff costs (including directors' emoluments) | 12,981 | 10,819 | | Depreciation of property, plant and equipment | 7,077 | 14,543 | [5.5 Income tax](index=18&type=section&id=5.%20Income%20tax) The group incurred no assessable income in Hong Kong, thus no Hong Kong profits tax provision was made; PRC subsidiaries are subject to a **25%** corporate income tax rate, and there are no significant unprovided deferred taxes for the period - Hong Kong Profits Tax: No provision was made as the Group earned no assessable income subject to Hong Kong profits tax during the interim period[44](index=44&type=chunk)[47](index=47&type=chunk) - Overseas Income Tax: PRC subsidiaries are subject to a tax rate of **25%** since January 1, 2008[45](index=45&type=chunk)[48](index=48&type=chunk) - Deferred Tax: There were **no significant unprovided deferred taxes** during the interim period[46](index=46&type=chunk)[48](index=48&type=chunk) [5.6 Dividends](index=19&type=section&id=6.%20Dividends) The Board does not recommend paying any interim dividend for the six months ended June 30, 2025, consistent with the prior year - Interim Dividend: The Board does not recommend the payment of any interim dividend (2024 corresponding period: nil)[50](index=50&type=chunk)[51](index=51&type=chunk) [5.7 Loss per share](index=19&type=section&id=7.%20Loss%20per%20share) For the six months ended June 30, 2025, basic loss per share was **RMB 2.85 cents**, widening from **RMB 1.05 cents** in the prior year, with no diluted loss per share presented due to the absence of potential dilutive ordinary shares 每股亏损计算 (截至6月30日止半年) | Indicator | 2025年 | 2024年 | | :--- | :--- | :--- | | Loss attributable to equity holders of the Company (RMB'000) | (11,116) | (4,113) | | Weighted average number of ordinary shares for basic loss per share calculation ('000 shares) | 390,451 | 390,451 | | Basic loss per share (RMB cents) | (2.85) | (1.05) | - No diluted loss per share is presented as there were **no potential dilutive ordinary shares** for the quarters and six-month periods ended June 30, 2025, and June 30, 2024[54](index=54&type=chunk) [5.8 Additions and disposals of property, plant and equipment](index=20&type=section&id=8.%20Additions%20and%20disposals%20of%20property,%20plant%20and%20equipment) For the six months ended June 30, 2025, the group added approximately **RMB 23.045 million** in property, plant, and equipment, a significant increase from the prior year, with no material disposals during the period - Additions: Property, plant and equipment acquired during the interim period amounted to approximately **RMB 23.045 million** (2024 corresponding period: approximately **RMB 1.419 million**)[55](index=55&type=chunk)[57](index=57&type=chunk) - Disposals: There were **no major disposals** during the interim period (2024 corresponding period: nil)[55](index=55&type=chunk)[57](index=57&type=chunk) [5.9 Trade and other receivables](index=20&type=section&id=9.%20Trade%20and%20other%20receivables) As of June 30, 2025, the group's total trade and other receivables were **RMB 34.170 million**, an increase from **RMB 28.590 million** at year-end 2024, with a significant rise in trade receivables within one month 贸易及其他应收款项构成 | Item | 2025年6月30日 (RMB'000) | 2024年12月31日 (RMB'000) | | :--- | :--- | :--- | | Trade receivables | 4,180 | 828 | | Prepayments and other receivables | 26,365 | 23,298 | | Other recoverable taxes | 3,625 | 4,464 | | **Total** | **34,170** | **28,590** | 应收账款账龄分析 (按发票日期) | Ageing | 2025年6月30日 (RMB'000) | 2024年12月31日 (RMB'000) | | :--- | :--- | :--- | | Within 1 month | 3,639 | 374 | | After 1 month but within 3 months | – | 90 | | After 3 months but within 6 months | 537 | 90 | | After 6 months but within 12 months | – | 270 | | After 12 months | 4 | 4 | | **Total** | **4,180** | **828** | - The Group does not require collateral for trade receivables and continuously performs customer credit assessments[58](index=58&type=chunk) [5.10 Trade and other payables](index=22&type=section&id=10.%20Trade%20and%20other%20payables) As of June 30, 2025, the group's total trade and other payables were **RMB 197.618 million**, an increase from **RMB 160.408 million** at year-end 2024, with a significant rise in trade payables due after 12 months 贸易及其他应付款项构成 | Item | 2025年6月30日 (RMB'000) | 2024年12月31日 (RMB'000) | | :--- | :--- | :--- | | Trade payables | 40,431 | 35,440 | | Accruals and other payables | 156,616 | 124,328 | | Other taxes payable | 571 | 640 | | **Total** | **197,618** | **160,408** | 应付账款账龄分析 (按发票日期) | Ageing | 2025年6月30日 (RMB'000) | 2024年12月31日 (RMB'000) | | :--- | :--- | :--- | | Within 1 month | 1,705 | 7,921 | | After 1 month but within 3 months | 5,781 | 26,041 | | After 3 months but within 6 months | 2,917 | 88 | | After 6 months but within 12 months | 415 | 173 | | After 12 months | 29,613 | 1,217 | | **Total** | **40,431** | **35,440** | [5.11 Bank and other borrowings](index=23&type=section&id=11.%20Bank%20and%20other%20borrowings) As of June 30, 2025, the group's total bank and other borrowings were **RMB 20.400 million**, a decrease from **RMB 23.400 million** at year-end 2024, with all borrowings repayable within one year or on demand, including secured bank loans and unsecured other loans 银行及其他借贷构成 | Type of Borrowing | 2025年6月30日 (RMB'000) | 2024年12月31日 (RMB'000) | | :--- | :--- | :--- | | Secured bank loans repayable within 1 year or on demand | 10,000 | 13,000 | | Unsecured other loans repayable within 1 year or on demand | 10,400 | 10,400 | | **Total** | **20,400** | **23,400** | - Secured bank loans bear interest at annual rates ranging from **3.1% to 3.45%**[67](index=67&type=chunk) - Unsecured other loans refer to loans payable to non-controlling shareholders of PRC subsidiaries, bearing a **fixed interest rate of 4.35% per annum**[67](index=67&type=chunk) [5.12 Share capital](index=24&type=section&id=12.%20%E8%82%A1%E6%9C%AC) As of June 30, 2025, the company's authorized share capital was **2,500,000 thousand shares** with a total par value of **RMB 174.064 million**; issued and fully paid share capital was **390,451 thousand shares** with a total par value of **RMB 26.305 million**, consistent with year-end 2024 股本信息 | Type of Share Capital | 2025年6月30日 股份数目 ('000) | 2025年6月30日 总面值 (RMB'000) | 2024年12月31日 股份数目 ('000) | 2024年12月31日 总面值 (RMB'000) | | :--- | :--- | :--- | :--- | :--- | | Authorized share capital | 2,500,000 | 174,064 | 2,500,000 | 174,064 | | Issued and fully paid share capital | 390,451 | 26,305 | 390,451 | 26,305 | [5.13 Commitments](index=24&type=section&id=13.%20Commitments) As of June 30, 2025, the group's capital commitments contracted but not provided for in the financial statements amounted to **RMB 8.806 million**, primarily for property, plant, and equipment acquisitions and construction in progress, a decrease from year-end 2024 资本承擔 | Item | 2025年6月30日 (RMB'000) | 2024年12月31日 (RMB'000) | | :--- | :--- | :--- | | Capital commitments contracted but not provided for in the financial statements | 8,806 | 15,636 | Management Discussion and Analysis This section offers a comprehensive review of the group's financial performance, business operations, development prospects, and key operational aspects for the interim period [6.1 Financial Review](index=25&type=section&id=FINANCIAL%20REVIEW) For the six months ended June 30, 2025, consolidated turnover decreased by **52.1%** to **RMB 57.5 million**, and loss attributable to shareholders expanded to **RMB 11.1 million**, primarily due to suspended liquefied CBM production for equipment upgrades and increased administrative expenses from Board expansion and new subsidiary R&D costs 财务业绩概览 (截至6月30日止半年) | Indicator | 2025年 (RMB'000) | 2024年 (RMB'000) | 同比变化 | | :--- | :--- | :--- | :--- | | Consolidated turnover | 57,500 | 120,100 | -52.1% | | Loss attributable to shareholders | (11,100) | (4,100) | 170.7% (Loss widened) | - The decrease in revenue was primarily due to a subsidiary suspending liquefied CBM production in May 2025 for a comprehensive technical modification and upgrade of its liquefaction machinery and equipment[73](index=73&type=chunk) - Administrative expenses increased from **RMB 14.6 million** to **RMB 19.1 million**, mainly driven by the expansion of the Board (adding three new directors, increasing directors' emoluments by approximately **RMB 2.0 million**) and R&D costs of a newly established wholly-owned subsidiary[74](index=74&type=chunk)[75](index=75&type=chunk)[76](index=76&type=chunk)[78](index=78&type=chunk) [6.2 Business Review and Development Prospects](index=26&type=section&id=BUSINESS%20REVIEW%20AND%20DEVELOPMENT%20PROSPECTS) The group primarily engages in CBM business, including exploration, extraction, liquefaction, and sales; CBM reserve assessments were updated, and gas wellheads increased, but liquefaction operations paused for equipment upgrades, while market sales faced downward price trends due to the overall economic environment, and the group is actively developing new hydrocarbon-to-natural gas and thermal recovery technologies to boost production and profit growth - Core Business: CBM exploration, extraction, liquefaction, and sales[77](index=77&type=chunk)[79](index=79&type=chunk) - R&D Investment: The Group is independently developing "Ultra-High Temperature Steam Catalyzed Coal Mineral Accelerated Metamorphic Hydrocarbon Generation Technology" (hydrocarbon-to-natural gas project) and "Thermal Recovery Technology" to increase production and create new profit growth points[106](index=106&type=chunk)[108](index=108&type=chunk)[109](index=109&type=chunk)[110](index=110&type=chunk) [6.2.1 Resources and reserves](index=26&type=section&id=Resources%20and%20reserves) Updated CBM reserve assessments show an Original Gas-in-Place of **193.6 BCF** across all blocks, with Proved Net Reserves significantly increasing to **108.9 BCF**, reflecting continuous field development and data accumulation - CBM Asset Location: Yangcheng area, Shanxi Province, China, covering approximately **96 square kilometers**[77](index=77&type=chunk)[79](index=79&type=chunk) 煤层气资产储量评估 (十亿立方英呎 BCF) | Reserve Type | 2025年6月30日 | 2012年3月31日 | | :--- | :--- | :--- | | Original Gas-in-Place (OGIP) for all blocks | 193.6 | 272.4 | | Proved (1P) Net Reserves | 108.9 | 3.5 | | Proved plus Probable (2P) Net Reserves | 154.7 | 27.7 | | Proved plus Probable plus Possible (3P) Net Reserves | 193.6 | 205.0 | - The improvement in reserve assessment is attributed to the Company's continuous development of gas field blocks, increasing the number and scope of producing wellheads, thereby collecting more data for more accurate evaluations[84](index=84&type=chunk)[86](index=86&type=chunk) [6.2.2 Natural gas exploration and extraction](index=29&type=section&id=Natural%20gas%20exploration%20and%20extraction) The group has completed surface construction and drilling for **235 CBM wells**, with **170** of them in stable production since commissioning - Number of CBM Wells: **235 CBM wells** have completed surface construction and drilling[88](index=88&type=chunk)[90](index=90&type=chunk) - Number of Producing Wells: **170 wells** have commenced production and maintained stable output since commissioning[88](index=88&type=chunk)[90](index=90&type=chunk) [6.2.3 Liquefaction operation](index=29&type=section&id=Liquefaction%20operation) Shuntai Company suspended liquefied CBM production on May 18, 2025, for comprehensive technical modification and upgrade, with average daily production previously around **162,000 cubic meters** - Production Suspension: Shuntai Company suspended liquefied CBM production on **May 18, 2025**[89](index=89&type=chunk)[91](index=91&type=chunk) - Reason: Severe wear and tear of liquefaction machinery and equipment made maintenance uneconomical, leading to a decision for comprehensive technical modification and upgrade[89](index=89&type=chunk)[91](index=91&type=chunk) - Production Before Modification: Average daily production in Q1 2025 was approximately **162,000 cubic meters**[89](index=89&type=chunk)[91](index=91&type=chunk) [6.2.4 Marketing and sales](index=30&type=section&id=Marketing%20and%20sales) The group's sales system and strategy remain largely consistent, but sales performance was impacted by a **downward trend in prices** due to the overall economic environment - Sales System and Strategy: Largely consistent, with **no significant changes**[92](index=92&type=chunk)[94](index=94&type=chunk) - Market Impact: Sales prices showed a **downward trend** due to the overall economic environment, affecting sales performance[92](index=92&type=chunk)[94](index=94&type=chunk) [6.2.5 Liquidity, Financial Resources and Capital Structure](index=30&type=section&id=Liquidity,%20Financial%20Resources%20and%20Capital%20Structure) As of June 30, 2025, the group's net assets were **RMB 111.016 million**, cash and bank balances were **RMB 47.456 million**, and the capital to debt ratio was **17.70%**, with plans to seek financing to accelerate natural gas drilling projects 流动资金及资本结构 (截至6月30日) | Indicator | 2025年 (RMB'000) | | :--- | :--- | | Net assets | 111,016 | | Cash and bank balances | 47,456 | | Capital to debt ratio | 17.70% | - The Group adopts a **prudent financial and risk management strategy**, avoiding financing arrangements with high leverage ratios[93](index=93&type=chunk)[95](index=95&type=chunk) - The Group will seek financing to further improve its cash position and accelerate natural gas drilling projects[96](index=96&type=chunk)[98](index=98&type=chunk) - Apart from planned investments in upstream CBM exploration and extraction, the Group has **no other plans** for acquisitions, investments, disposals, or scaling down any current business operations[96](index=96&type=chunk)[98](index=98&type=chunk) [6.2.6 Employees](index=32&type=section&id=Employees) The group has **236 employees**, comprising R&D, engineering, customer service, administrative, and marketing personnel, with staff costs of **RMB 12.981 million**, and remuneration policies based on individual performance and professional training - Total Employees: **236**[100](index=100&type=chunk)[103](index=103&type=chunk) - Employee Composition: **23 R&D personnel**, **122 engineering and customer service personnel**, **86 administrative personnel**, and **5 marketing and sales personnel**[100](index=100&type=chunk)[103](index=103&type=chunk) 员工成本 (截至6月30日止半年) | Indicator | 2025年 (RMB'000) | 2024年 (RMB'000) | | :--- | :--- | :--- | | Staff costs (including directors' emoluments) | 12,981 | 10,819 | - Remuneration and bonus policies are primarily determined by individual employee performance, with continuous professional development and training opportunities provided[100](index=100&type=chunk)[103](index=103&type=chunk) [6.2.7 Risk in Foreign Exchange](index=32&type=section&id=Risk%20in%20Foreign%20Exchange) The Board considers the group's foreign exchange risk **not significant**, as most transactions are denominated in the respective functional currencies of individual group entities - Foreign Exchange Risk Assessment: The Directors believe the Group's foreign exchange risk is **not significant**[101](index=101&type=chunk)[104](index=104&type=chunk) - Reason: Most transactions are denominated in the respective functional currencies of individual group entities[101](index=101&type=chunk)[104](index=104&type=chunk) [6.2.8 Significant investment, material acquisitions and disposal of subsidiaries](index=32&type=section&id=Significant%20investment,%20material%20acquisitions%20and%20disposal%20of%20subsidiaries) During the interim period, the group made **no significant investments**, material acquisitions, or disposals of subsidiaries and associates - No Significant Investments/Acquisitions/Disposals: There were **no significant investments**, material acquisitions, or disposals of subsidiaries and associates during the interim period[102](index=102&type=chunk)[105](index=105&type=chunk) [6.2.9 Outlook](index=33&type=section&id=Outlook) The group is actively developing hydrocarbon-to-natural gas and thermal recovery technologies to boost production, create new profit growth points, and ensure stable gas supply for LNG plants, anticipating continued strong growth in clean energy market demand - Hydrocarbon-to-Natural Gas Technology ("the Technology") R&D Progress: R&D began in **2016**, entering the industrial scale-up design phase in H2 **2019**. Progress was slow due to the pandemic, with the first trial run in **June 2021** and improved design proposed in **November 2021**. A small-scale pilot plant was completed in **June 2024**, but domestic heat-resistant steel could not sustain stable operation at **1,100°C** for extended periods. In **January 2025**, R&D shifted to lowering reaction temperatures, now largely achieving a **1,000°C** reaction environment, with a small-scale pilot plant still under construction. Future Plans: Upon completion, advanced demonstrations will be conducted overseas with international expert review; once mature, it will supply feedstock gas to LNG projects, charging technology usage fees and selling related raw materials[106](index=106&type=chunk)[107](index=107&type=chunk) - Thermal Recovery Technology Discovery and Outlook: Discovered during the R&D of "the Technology," aiming to accelerate metamorphic hydrocarbon generation, increase reserves, and boost production from underground coal minerals in CBM fields. Currently in the preparatory stage, upon maturity, it will be applied to increase upstream wellhead production and provide thermal recovery technical services and related equipment sales[108](index=108&type=chunk)[110](index=110&type=chunk) - Strategic Significance: Both technologies are expected to become **new profit growth points** for the Group, ensuring a **stable gas source supply** for LNG plants, reducing external influences and operational risks, and achieving full production commercial value[109](index=109&type=chunk)[110](index=110&type=chunk) - Market Outlook: With increasing environmental concerns, highly polluting energy sources will be phased out faster, clean energy will become widespread, and natural gas market demand is expected to maintain **strong growth momentum**[111](index=111&type=chunk)[113](index=113&type=chunk) Disclosure of Shareholders' and Directors' Interests This section details the interests and short positions of the company's directors, chief executive, and substantial shareholders in the company's shares and underlying shares [7.1 Directors' and Chief Executive's Interests or Short Positions in Shares, Underlying Shares and Debentures](index=35&type=section&id=DIRECTORS'%20AND%20CHIEF%20EXECUTIVE'S%20INTERESTS%20OR%20SHORT%20POSITIONS%20IN%20SHARES,%20UNDERLYING%20SHARES%20AND%20DEBENTURES) As of June 30, 2025, several directors held long positions in the company's shares, with Chairman **Mr. Wang Zhong Sheng** holding **74.51%** through controlled corporations and as a beneficial owner 董事及最高行政人员于本公司股份之好仓 (截至2025年6月30日) | Name | Capacity | Nature of Interest | Number of Shares/Underlying Shares | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | :--- | | Mr. Wang Zhong Sheng | Interest in controlled corporation | Corporate interest | 2,264,812 | 0.58% | | | Beneficial owner | Personal | 288,661,440 | 73.93% | | Mr. Chang Jian | Beneficial owner | Personal | 2,500,000 | 0.64% | | Mr. Wang Chen | Beneficial owner | Personal | 250,000 | 0.06% | | Mr. Liang Zhi Hao | Share option grantee | Personal | 800,000 | 0.2% | | Ms. Li Si Liang | Beneficial owner | Personal | 487,500 | 0.12% | - Save as disclosed above, as at June 30, 2025, no Director or chief executive had any other disclosable interests or short positions in the shares, underlying shares or debentures of the Company or any of its associated corporations[121](index=121&type=chunk)[122](index=122&type=chunk) - The Group did not issue any debentures during the interim period[121](index=121&type=chunk)[122](index=122&type=chunk) [7.2 Substantial Shareholders and Persons with Disclosable Interest and Short Position in Shares and Options under SFO](index=40&type=section&id=SUBSTANTIAL%20SHAREHOLDERS%20AND%20PERSONS%20WITH%20DISCLOSEABLE%20INTEREST%20AND%20SHORT%20POSITION%20IN%20SHARES%20AND%20OPTIONS%20UNDER%20SFO) As of June 30, 2025, apart from directors, **Ms. Zhao Xin** (spouse of Mr. Wang Zhong Sheng) was deemed to have an interest in her spouse's shares, representing approximately **74.51%** of the company's shareholding 主要股东于本公司股份之好仓 (截至2025年6月30日) | Name | Number of Shares | Nature of Interest | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Ms. Zhao Xin | 290,926,252 | Interest of spouse | 74.51% | - **Ms. Zhao Xin** (spouse of Mr. Wang Zhong Sheng) is deemed under the Securities and Futures Ordinance to have an interest in the Company by virtue of her spouse's interests[125](index=125&type=chunk) - Save as disclosed above, no other person had any disclosable interests or short positions in the shares and underlying shares of the Company[125](index=125&type=chunk) [7.3 Directors' and Chief Executive's Rights to Acquire Shares or Debentures](index=41&type=section&id=DIRECTORS'%20AND%20CHIEF%20EXECUTIVE'S%20RIGHTS%20TO%20ACQUIRE%20SHARES%20OR%20DEBENTURES) Apart from disclosed directors' share interests and share option schemes, no rights to acquire company shares or debentures were granted or exercised by any director, their spouse/minor children, or chief executive during the interim period, nor did the company or its subsidiaries enter into any arrangements for directors to acquire such rights in other corporations - No Additional Acquisition Rights: During the interim period, no rights to acquire shares or debentures of the Company were granted to or exercised by any Director, their spouse/minor children, or chief executive[126](index=126&type=chunk)[128](index=128&type=chunk) - No Related Arrangements: Neither the Company nor any of its subsidiaries entered into any arrangements enabling Directors to acquire such rights in any other body corporate[126](index=126&type=chunk)[128](index=128&type=chunk) [7.4 Directors' and Controlling Shareholders' Interests in Competing Business](index=41&type=section&id=DIRECTORS'%20AND%20CONTROLLING%20SHAREHOLDERS'%20INTERESTS%20IN%20COMPETING%20BUSINESS) As of the report date, the Directors are unaware of any business or interests held by directors, controlling shareholders, or their close associates that compete or may compete with the group's business, nor any other conflicts of interest - No Competing Business: The Directors are unaware of any business or interests held by directors, controlling shareholders, or their close associates that compete or may compete with the Group's business[127](index=127&type=chunk)[129](index=129&type=chunk) - No Conflicts of Interest: Nor are they aware of any other conflicts of interest existing or potentially existing between any such persons and the Group[127](index=127&type=chunk)[129](index=129&type=chunk) Share Option Scheme This section outlines the company's previous and new share option schemes, including their terms, eligible participants, and the status of granted and outstanding options [8.1 Previous Share Option Scheme](index=42&type=section&id=%E5%85%88%E5%89%8D%E8%B3%BC%E8%82%A1%E6%AC%8A%E8%A8%88%E5%8A%83) The company's previous share option scheme, adopted on May 18, 2011, expired on May 18, 2021; all **32,119,074** options granted under it were unexercised and lapsed, with no outstanding options currently - Scheme Term: The previous share option scheme expired on **May 18, 2021**[130](index=130&type=chunk)[132](index=132&type=chunk) - Share Option Status: All **32,119,074** share options granted were unexercised and lapsed, with **no outstanding share options**[130](index=130&type=chunk)[132](index=132&type=chunk) [8.2 New Share Option Scheme](index=42&type=section&id=%E6%96%B0%E8%B3%BC%E8%82%A1%E6%AC%8A%E8%A8%88%E5%8A%83) The company adopted a new share option scheme on March 28, 2022, valid for **10 years**, to incentivize eligible participants; as of June 30, 2025, **zero** options are available for grant, and **10,865,003** options remain outstanding at an exercise price of **HK$0.455** - Adoption Date and Validity: Adopted on **March 28, 2022**, valid for **10 years**, expiring on **March 27, 2032**[131](index=131&type=chunk)[132](index=132&type=chunk)[134](index=134&type=chunk)[136](index=136&type=chunk) - Purpose: To grant share options to selected eligible participants as an incentive or reward for their contributions or potential contributions[133](index=133&type=chunk)[135](index=135&type=chunk) - Eligible Participants: Include full-time/part-time employees, consultants/advisers, and directors of any group member company[133](index=133&type=chunk)[135](index=135&type=chunk) - Scheme Limit: As of June 30, 2025, the number of share options authorized for grant under the scheme was **zero shares**[134](index=134&type=chunk)[136](index=136&type=chunk) 新购股权计划下已授出购股权信息 (截至2025年6月30日) | Category of Participants | Outstanding at January 1, 2025 | Granted during the period | Exercised during the period | Lapsed during the period | Outstanding at June 30, 2025 | Date of Grant | Exercise Period | Exercise Price per Share at Date of Grant (HK$) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Executive Director (Mr. Liang Zhi Hao) | 800,000 | – | – | – | 800,000 | 2022/10/13 | 2022/10/13–2032/10/12 | 0.456 | | Employees | 8,190,003 | – | – | – | 8,190,003 | 2022/10/13 | 2022/10/13–2032/10/12 | 0.456 | | Corporate Finance Adviser | 1,875,000 | – | – | – | 1,875,000 | 2022/4/7 | 2022/4/7–2032/4/6 | 0.448 | | **Total** | **10,865,003** | **–** | **–** | **–** | **10,865,003** | | | | - Share options may be exercised in full or in part at any time during the period determined by the Directors and notified to the grantee, but not exceeding **ten years** from the date of grant[138](index=138&type=chunk)[140](index=140&type=chunk) - The subscription price shall not be less than the highest of the closing price on the Stock Exchange on the offer date, the average closing price for the five consecutive business days immediately preceding the offer date, and the nominal value of the share[141](index=141&type=chunk)[142](index=142&type=chunk) Other Financial and Operating Information This section covers additional financial and operational details such as contingent liabilities, capital commitments, asset charges, and events after the balance sheet date [9.1 Contingent Liabilities](index=48&type=section&id=CONTINGENT%20LIABILITIES) As of June 30, 2025, the group had **no significant contingent liabilities** - No Significant Contingent Liabilities: As of June 30, 2025, the Group had **no significant contingent liabilities**[151](index=151&type=chunk)[155](index=155&type=chunk) [9.2 Amount of Capitalised Interest](index=48&type=section&id=AMOUNT%20OF%20CAPITALISED%20INTEREST) Save as disclosed in this report, the group did **not capitalize any interest** during the interim period - No Capitalized Interest: Save as disclosed in this report, the Group did **not capitalize any interest** during the interim period[152](index=152&type=chunk)[156](index=156&type=chunk) [9.3 Future Plans for Material Investments or Capital Assets](index=48&type=section&id=FUTURE%20PLANS%20FOR%20MATERIAL%20INVESTMENTS%20OR%20CAPITAL%20ASSETS) As of June 30, 2025, and December 31, 2024, the group had **no other plans** regarding material investments and capital assets - No Other Material Plans: As of June 30, 2025, and December 31, 2024, the Group had **no other plans** regarding material investments and capital assets[153](index=153&type=chunk)[157](index=157&type=chunk) [9.4 Charges on Group Assets](index=48&type=section&id=CHARGES%20ON%20GROUP%20ASSETS) As of June 30, 2025, the group's self-occupied buildings with a carrying value of approximately **RMB 8.847 million** and leasehold land use rights of **RMB 7.797 million** were pledged as security for bank borrowings - Charged Assets: Self-occupied buildings with a carrying value of approximately **RMB 8.847 million** (before impairment) and leasehold land use rights of **RMB 7.797 million**[154](index=154&type=chunk)[158](index=158&type=chunk) - Purpose: Pledged as security for bank borrowings granted to the Group[154](index=154&type=chunk)[158](index=158&type=chunk) [9.5 Events After Balance Sheet Date](index=49&type=section&id=EVENTS%20AFTER%20BALANCE%20SHEET%20DATE) As of the report date, the Board is unaware of any **significant disclosable events** after the balance sheet date - No Significant Events After Balance Sheet Date: As of the report date, the Board is unaware of any **significant events** that have occurred and require disclosure[159](index=159&type=chunk)[164](index=164&type=chunk) [9.6 Convertible Securities, Warrants or Similar Rights](index=49&type=section&id=CONVERTIBLE%20SECURITIES,%20WARRANTS%20OR%20SIMILAR%20RIGHTS) As of June 30, 2025, there were **10,865,003 outstanding share options** under the company's share option scheme adopted on March 28, 2022, entitling holders to subscribe for shares - Outstanding Share Options: As of June 30, 2025, there were **10,865,003 outstanding share options** entitling holders to subscribe for shares[160](index=160&type=chunk)[164](index=164&type=chunk) - Source: Under the share option scheme adopted on **March 28, 2022**[160](index=160&type=chunk)[164](index=164&type=chunk) [9.7 Pre-emptive Rights](index=49&type=section&id=PRE-EMPTIVE%20RIGHTS) Neither the company's bye-laws nor Bermuda law contains provisions for pre-emptive rights requiring the company to offer new shares proportionally to existing shareholders - No Pre-emptive Rights: Neither the company's bye-laws nor Bermuda law contains provisions for pre-emptive rights[161](index=161&type=chunk)[165](index=165&type=chunk) [9.8 Purchase, Sale or Redemption of the Company's Listed Securities](index=49&type=section&id=PURCHASE,%20SALE%20OR%20REDEMPTION%20OF%20THE%20COMPANY'S%20LISTED%20SECURITIES) During the interim period, neither the company nor any of its subsidiaries purchased, sold, or redeemed any listed securities - No Securities Transactions: During the interim period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's or its subsidiaries' listed securities[162](index=162&type=chunk)[166](index=166&type=chunk) Corporate Governance This section describes the company's corporate governance practices, including compliance with the GEM Listing Rules, the role of the Audit Committee, and any deviations from the Corporate Governance Code [10.1 Disclosure on Changes of Information of Directors](index=50&type=section&id=DISCLOSURE%20ON%20CHANGES%20OF%20INFORMATION%20OF%20DIRECTORS) In accordance with GEM Listing Rules, there were **no changes** in directors' positions or updated information during the interim period since the release of the 2024 annual report - No Changes in Directors' Information: Since the release of the 2024 annual report, there have been **no changes** in directors' positions or updated information during the interim period[168](index=168&type=chunk)[172](index=172&type=chunk) [10.2 Audit Committee](index=50&type=section&id=AUDIT%20COMMITTEE) The Audit Committee, comprising three independent non-executive directors chaired by **Mr. Liu Zhen Bang**, reviews and monitors financial reporting principles, internal control procedures, and group results, having met twice this interim period to review unaudited consolidated results and confirm adequate staffing for accounting, finance, and internal control - Composition: Composed of **three independent non-executive directors**, including Mr. Wang Zhi He, Mr. Xu Yuan Jian, and Mr. Liu Zhen Bang (Chairman)[170](index=170&type=chunk)[173](index=173&type=chunk) - Responsibilities: To review and monitor financial reporting principles and practices, internal control procedures and matters, and to review the Group's quarterly, interim, and annual results[169](index=169&type=chunk)[173](index=173&type=chunk) - Meetings and Review: Two meetings were held during the interim period, and the unaudited consolidated results were reviewed[170](index=170&type=chunk)[173](index=173&type=chunk) - Staff Adequacy: The Audit Committee believes the Group has employed **sufficient staff** to handle accounting, financial, and internal control work[171](index=171&type=chunk)[173](index=173&type=chunk) [10.3 Compliance with Corporate Governance Code](index=51&type=section&id=CORPORATE%20GOVERNANCE) The group largely complied with the GEM Listing Rules' Corporate Governance Code during the interim period, with two deviations: non-executive directors lack fixed terms (but retire by rotation) and the Chairman and CEO roles are combined in **Mr. Wang Zhong Sheng**; the Board believes the current structure promotes efficient operations and will consider appointing an independent CEO, while all independent non-executive directors confirmed their independence and no non-compliance with the adopted code for directors' securities transactions was found - Compliance Status: Save as disclosed below, the Group has **complied with the Corporate Governance Code**[174](index=174&type=chunk)[177](index=177&type=chunk) - Deviation from Code Provision A.4.1: Non-executive directors do not have fixed terms but are subject to retirement by rotation at annual general meetings; the Board believes this arrangement provides **flexibility**[175](index=175&type=chunk)[177](index=177&type=chunk) - Deviation from Code Provision A.2.1: The Chairman (**Mr. Wang Zhong Sheng**) also oversees the Group's daily operations, and the Company has no "Chief Executive Officer" position; the Board believes this structure facilitates **strong and consistent leadership** and will continue to consider the feasibility of appointing an independent Chief Executive Officer[176](index=176&type=chunk)[177](index=177&type=chunk)[178](index=178&type=chunk)[179](index=179&type=chunk)[181](index=181&type=chunk)[182](index=182&type=chunk) - Code of Conduct for Securities Transactions by Directors: The Company has adopted the relevant code, and **no non-compliance** was noted during the interim period[180](index=180&type=chunk)[182](index=182&type=chunk) - Independent Directors: All independent non-executive directors have confirmed their independence, and the Company considers them to be **fully independent**[183](index=183&type=chunk)[184](index=184&type=chunk)

[Company Information and Report Statement](index=1&type=section&id=%E5%85%AC%E5%8F%B8%E4%BF%A1%E6%81%AF%E4%B8%8E%E6%8A%A5%E5%91%8A%E5%A3%B0%E6%98%8E) [Report Statement and Company Profile](index=1&type=section&id=%E5%A0%B1%E5%91%8A%E8%81%B2%E6%98%8E%E8%88%87%E5%85%AC%E5%8F%B8%E6%A6%82%E6%B3%81) This announcement presents the unaudited interim results of Shengyuan Holdings Limited, an investment holding company, for the six months ended June 30, 2025 - This interim results announcement covers the unaudited consolidated results for the six months ended June 30, 2025, and has been reviewed by the external auditor and the Audit Committee[3](index=3&type=chunk)[4](index=4&type=chunk) - Shengyuan Holdings Limited is an investment holding company whose subsidiaries are principally engaged in securities brokerage and financial services, asset management, proprietary trading, and trading business[8](index=8&type=chunk) [Condensed Interim Consolidated Financial Information](index=2&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E8%B3%87%E6%96%99) [Condensed Interim Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%90%8D%E7%9B%8A%E5%8F%8A%E5%85%B6%E4%BB%96%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) For the six months ended June 30, 2025, revenue decreased by 16% to HKD 12,098 thousand, and profit for the period fell sharply to HKD 5,332 thousand Key Data from the Condensed Interim Consolidated Statement of Profit or Loss and Other Comprehensive Income | Item | June 30, 2025 (HKD in thousands) | June 30, 2024 (HKD in thousands) | | :--- | :--- | :--- | | Revenue | 12,098 | 14,410 | | Other gains and losses | 1,172 | 17,476 | | Profit before income tax | 6,984 | 30,384 | | Profit for the period | 5,332 | 29,803 | | Basic earnings per share (HK cents) | 0.60 | 3.38 | | Diluted earnings per share (HK cents) | 0.60 | 3.38 | - **Profit for the period decreased significantly by 82.1% year-over-year**, primarily due to a reduction in other gains and losses from HKD 17,476 thousand to HKD 1,172 thousand[5](index=5&type=chunk) [Condensed Interim Consolidated Statement of Financial Position](index=3&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) As of June 30, 2025, the company's total assets less current liabilities increased to HKD 122,064 thousand, driven by a rise in net current assets Key Data from the Condensed Interim Consolidated Statement of Financial Position | Item | June 30, 2025 (HKD in thousands) | December 31, 2024 (HKD in thousands) | | :--- | :--- | :--- | | Non-current assets | 2,622 | 3,414 | | Current assets | 139,371 | 143,332 | | Current liabilities | 19,929 | 29,162 | | Net current assets | 119,442 | 114,170 | | Total assets less current liabilities | 122,064 | 117,584 | | Net assets | 121,919 | 116,586 | | Total equity | 121,919 | 116,586 | - **Trade and other receivables, deposits and prepayments increased significantly** from HKD 5,995 thousand as of December 31, 2024, to HKD 28,773 thousand as of June 30, 2025[6](index=6&type=chunk) - **Trade and other payables and accrued expenses decreased** from HKD 24,827 thousand as of December 31, 2024, to HKD 13,793 thousand as of June 30, 2025[6](index=6&type=chunk) [Notes to the Condensed Interim Consolidated Financial Information](index=5&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E8%B3%87%E6%96%99%E9%99%84%E8%A8%BB) The notes detail the Group's accounting policies, segment information, and breakdowns of financial statement items, providing deeper context for the financial data [Accounting Policies and Basis of Preparation](index=5&type=section&id=2.%20%E6%8E%A1%E7%B4%8D%E6%96%B0%E8%A8%82%E6%88%96%E7%B6%93%E4%BF%AE%E8%A8%82%E9%A6%99%E6%B8%AF%E8%B2%A1%E5%8B%99%E5%A0%B1%E5%91%8A%E6%BA%96%E5%89%87%E6%9C%83%E8%A8%88%E6%BA%96%E5%89%87) The Group has applied new and revised HKFRSs effective from January 1, 2025, with no material impact on the interim condensed consolidated financial information - The Group has adopted new and revised Hong Kong Financial Reporting Standards effective from January 1, 2025, with **no material impact** on the interim financial information[9](index=9&type=chunk) - The interim condensed consolidated financial information is prepared in accordance with HKAS 34 issued by the HKICPA and is consistent with the accounting policies of the previous annual financial statements[10](index=10&type=chunk) [Segment Information](index=6&type=section&id=4.%20%E5%88%86%E9%83%A8%E8%B3%87%E6%96%99) The Group's operating segments include securities brokerage, asset management, and proprietary trading, with all external revenue from the first two segments - The Group's operating segments include securities brokerage and financial services, asset management services, and proprietary trading and trading business, with each segment managed independently[11](index=11&type=chunk)[12](index=12&type=chunk) - For the first half of 2025, total reportable segment results were **HKD 12,375 thousand**, a significant decrease from HKD 35,640 thousand in the same period of 2024[16](index=16&type=chunk)[17](index=17&type=chunk) Reportable Segment Revenue (For the six months ended June 30, 2025) | Segment | Revenue (HKD in thousands) | | :--- | :--- | | Securities brokerage and financial services | 7,427 | | Asset management services | 4,671 | | Proprietary trading | – | | Trading business | – | | **Total** | **12,098** | Reportable Segment Results (For the six months ended June 30, 2025) | Segment | Results (HKD in thousands) | | :--- | :--- | | Securities brokerage and financial services | 6,202 | | Asset management services | 4,098 | | Proprietary trading | 2,078 | | Trading business | (3) | | **Total** | **12,375** | [Revenue](index=9&type=section&id=5.%20%E6%94%B6%E7%9B%8A) Revenue from contracts with customers totaled HKD 12,098 thousand, primarily from corporate finance and fund management, with a notable drop in brokerage income - **Securities and futures brokerage income decreased sharply** from HKD 1,157 thousand in the prior period to HKD 164 thousand in the first half of 2025[17](index=17&type=chunk) - **Custody fee income decreased** from HKD 2,165 thousand in the prior period to HKD 1,180 thousand in the first half of 2025[17](index=17&type=chunk) Breakdown of Revenue from Contracts with Customers | Revenue Source | June 30, 2025 (HKD in thousands) | June 30, 2024 (HKD in thousands) | | :--- | :--- | :--- | | Securities and futures brokerage | 164 | 1,157 | | Corporate finance services income | 6,000 | 6,480 | | Consultancy fee income | 83 | 127 | | Custody fee | 1,180 | 2,165 | | Fund and portfolio management | 4,671 | 4,309 | | **Total** | **12,098** | **14,238** | [Other Gains and Losses](index=10&type=section&id=6.%20%E5%85%B6%E4%BB%96%E6%94%B6%E7%9B%8A%E5%8F%8A%E8%99%A7%E6%90%8D) Other gains and losses were HKD 1,172 thousand, a steep decline from HKD 17,476 thousand in the prior year, which included a large one-off gain - The first half of 2024 included a **one-off gain of HKD 17,326 thousand** from the disposal of debt investments related to the Atta Note and Kin Wo Note, with no such gain in 2025[18](index=18&type=chunk)[19](index=19&type=chunk)[20](index=20&type=chunk) Breakdown of Other Gains and Losses | Item | June 30, 2025 (HKD in thousands) | June 30, 2024 (HKD in thousands) | | :--- | :--- | :--- | | Net gain on disposal of debt investments at FVTPL | – | 17,326 | | Fair value change of investments held for trading | 1,155 | 15 | | Net foreign exchange gain | 17 | 135 | | **Total** | **1,172** | **17,476** | [Other Income](index=11&type=section&id=7.%20%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5) Other income for the period was HKD 1,569 thousand, mainly from interest and dividend income, remaining stable compared to the prior year Breakdown of Other Income | Revenue Source | June 30, 2025 (HKD in thousands) | June 30, 2024 (HKD in thousands) | | :--- | :--- | :--- | | Bank and other interest income | 1,087 | 1,048 | | Dividend income | 482 | 451 | | Sundry income | – | 161 | | **Total** | **1,569** | **1,660** | [Profit Before Income Tax and Income Tax Expense](index=12&type=section&id=8.%20%E9%99%A4%E6%89%80%E5%BE%97%E7%A8%85%E5%89%8D%E6%BA%A2%E5%88%A9) Profit before tax was HKD 6,984 thousand, with major expenses including staff costs and auditor's remuneration, and an income tax expense of HKD 1,652 thousand - Hong Kong Profits Tax is calculated under a two-tiered system, with a rate of **8.25% on the first HKD 2 million** of profits and **16.5% on the remainder**[24](index=24&type=chunk) Items Deducted from Profit Before Income Tax | Item | June 30, 2025 (HKD in thousands) | June 30, 2024 (HKD in thousands) | | :--- | :--- | :--- | | Finance costs | 68 | 114 | | Auditor's remuneration | 200 | 340 | | Staff costs | 3,852 | 4,284 | Income Tax Expense | Item | June 30, 2025 (HKD in thousands) | June 30, 2024 (HKD in thousands) | | :--- | :--- | :--- | | Current tax - Hong Kong Profits Tax | 1,652 | 581 | [Dividends and Earnings Per Share](index=12&type=section&id=10.%20%E8%82%A1%E6%81%AF) The company did not declare any dividends for the period, and basic earnings per share fell to 0.60 HK cents due to lower profit - The company **did not propose or declare any dividends** for the six months ended June 30, 2025, and June 30, 2024[26](index=26&type=chunk) - **Basic earnings per share was 0.60 HK cents** (H1 2024: 3.38 HK cents), calculated based on a profit of HKD 5,332 thousand and 881,970,541 weighted average ordinary shares[28](index=28&type=chunk) - There were **no dilutive potential ordinary shares** during the period, so diluted earnings per share was the same as basic earnings per share[28](index=28&type=chunk) [Property, Plant and Equipment and Leases](index=13&type=section&id=12.%20%E7%89%A9%E6%A5%AD%E3%80%81%E5%BB%A0%E6%88%BF%E5%8F%8A%E8%A8%AD%E5%82%99) The Group did not acquire or dispose of any property, plant and equipment, while the carrying values of right-of-use assets and lease liabilities decreased - The Group **did not purchase or dispose of any property, plant and equipment** during the six months ended June 30, 2025[29](index=29&type=chunk) Lease-Related Assets and Liabilities | Item | June 30, 2025 (HKD in thousands) | December 31, 2024 (HKD in thousands) | | :--- | :--- | :--- | | Carrying amount of right-of-use assets | 1,730 | 2,471 | | Carrying amount of lease liabilities | 1,827 | 2,631 | Lease-Related Expenses | Item | June 30, 2025 (HKD in thousands) | June 30, 2024 (HKD in thousands) | | :--- | :--- | :--- | | Depreciation expense of right-of-use assets | 741 | 741 | | Interest on lease liabilities | 68 | 114 | | Expense relating to short-term leases | 68 | 71 | [Trade and Other Receivables, Deposits and Prepayments](index=14&type=section&id=14.%20%E6%87%89%E6%94%B6%E8%B3%AC%E6%AC%BE%E5%8F%8A%E5%85%B6%E4%BB%96%E6%87%89%E6%94%B6%E6%AC%BE%E9%A0%85%E3%80%81%E6%8C%89%E9%87%91%E5%8F%8A%E9%A0%90%E4%BB%98%E6%AC%BE%E9%A0%85) Total trade and other receivables increased sharply to HKD 29,283 thousand, driven by a significant rise in prepayments and receivables from corporate finance services - **Prepayments increased substantially** from HKD 615 thousand as of December 31, 2024, to HKD 19,134 thousand as of June 30, 2025[33](index=33&type=chunk) - **Trade receivables from corporate finance services increased** from HKD 200 thousand as of December 31, 2024, to HKD 3,283 thousand as of June 30, 2025[34](index=34&type=chunk) Breakdown of Trade and Other Receivables | Item | June 30, 2025 (HKD in thousands) | December 31, 2024 (HKD in thousands) | | :--- | :--- | :--- | | Trade receivables | 21,256 | 18,161 | | Less: Allowance for impairment loss recognised | (13,518) | (13,492) | | Prepayments | 19,134 | 615 | | Other receivables and deposits | 1,901 | 711 | | **Total** | **29,283** | **6,505** | [Investments Held for Trading](index=16&type=section&id=15.%20%E6%8C%81%E4%BD%9C%E8%B2%B7%E8%B3%A3%E7%94%A8%E9%80%94%E6%8A%95%E8%B3%87) As of June 30, 2025, investments held for trading consisted of listed equity securities valued at HKD 15,155 thousand, a slight increase from year-end 2024 Investments Held for Trading | Item | June 30, 2025 (HKD in thousands) | December 31, 2024 (HKD in thousands) | | :--- | :--- | :--- | | Listed equity securities | 15,155 | 14,000 | [Trade and Other Payables and Accrued Expenses](index=17&type=section&id=16.%20%E6%87%89%E4%BB%98%E8%B3%AC%E6%AC%BE%E5%8F%8A%E5%85%B6%E4%BB%96%E6%87%89%E4%BB%98%E6%AC%BE%E9%A0%85%E4%BB%A5%E5%8F%8A%E6%87%89%E8%A8%88%E8%B2%BB%E7%94%A8) Total trade and other payables decreased significantly to HKD 13,793 thousand, primarily due to a reduction in payables from securities and futures trading - **Trade payables from securities and futures contract trading (cash clients) decreased** from HKD 20,029 thousand as of December 31, 2024, to HKD 10,400 thousand as of June 30, 2025[36](index=36&type=chunk) Breakdown of Trade and Other Payables | Item | June 30, 2025 (HKD in thousands) | December 31, 2024 (HKD in thousands) | | :--- | :--- | :--- | | Trade payables from securities and futures contract trading | 12,709 | 22,336 | | Other payables | 144 | 793 | | Accrued expenses | 940 | 1,698 | | **Total** | **13,793** | **24,827** | [Share Capital](index=18&type=section&id=17.%20%E8%82%A1%E6%9C%AC) The company's share capital structure remained unchanged, with an issued and fully paid capital of HKD 88,197 thousand as of June 30, 2025 - All issued shares rank pari passu in all respects, including rights to dividends, voting, and return of capital[37](index=37&type=chunk) Share Capital Structure | Item | Number of Ordinary Shares | Nominal Value (HKD in thousands) | | :--- | :--- | :--- | | Authorised share capital | 6,000,000,000 | 600,000 | | Issued and fully paid share capital | 881,970,541 | 88,197 | [Events After the Reporting Period](index=18&type=section&id=18.%20%E5%A0%B1%E5%91%8A%E6%9C%9F%E5%BE%8C%E4%BA%8B%E9%A0%85) The Group had no significant events after the reporting period up to the date of the interim financial information's publication - There were **no significant events** relating to the Group after June 30, 2025, and up to the date of publication of the interim condensed consolidated financial information[38](index=38&type=chunk) [Business and Financial Review](index=19&type=section&id=%E6%A5%AD%E5%8B%99%E5%8F%8A%E8%B2%A1%E5%8B%99%E5%9B%9E%E9%A1%A7) [Financial Summary](index=19&type=section&id=%E8%B2%A1%E5%8B%99%E6%A6%82%E8%A6%81) The Group's fee and commission income was approximately HKD 12.1 million, a 14.8% decrease, while profit for the period fell sharply to HKD 5.3 million - **Fee and commission income was approximately HKD 12.1 million**, a decrease of 14.8% year-over-year, mainly due to reduced income from securities brokerage and general custody services[40](index=40&type=chunk) - **Profit for the period was approximately HKD 5.3 million**, compared to HKD 29.8 million in the prior period, with the decrease mainly due to the absence of a one-off gain from the disposal of debt instruments in 2024[40](index=40&type=chunk) - **Basic and diluted earnings per share were both approximately 0.6 HK cents**, compared to 3.38 HK cents in the prior period[40](index=40&type=chunk) [Business Segment Operations](index=19&type=section&id=%E6%A5%AD%E5%8B%99%E5%88%86%E9%83%A8%E4%B9%8B%E7%B6%93%E7%87%9F) The Group provides securities brokerage, financial services, and asset management through its subsidiaries, with varied performance across segments during the period [Securities Brokerage and Financial Services](index=19&type=section&id=%E6%A5%AD%E5%8B%99%E5%88%86%E9%83%A8%E4%B9%8B%E7%B6%93%E7%87%9F%EF%BC%8D%E8%AD%89%E5%88%B8%E7%B6%93%E7%B4%80%E5%8F%8A%E9%87%91%E8%9E%8D%E6%9C%8D%E5%8B%99) Shengyuan Securities provides brokerage and financing services, with its client trust bank balances decreasing by 43.0% to HKD 12.7 million due to client withdrawals - Shengyuan Securities is licensed for Type 1 (dealing in securities), Type 2 (dealing in futures contracts), and Type 4 (advising on securities) regulated activities[41](index=41&type=chunk) - Shengyuan Capital is licensed for Type 6 (advising on corporate finance) regulated activities, providing corporate advisory services[42](index=42&type=chunk) - **Client trust bank balances at Shengyuan Securities were approximately HKD 12.7 million**, a 43.0% decrease from HKD 22.3 million as of December 31, 2024, mainly due to client fund withdrawals[42](index=42&type=chunk) [Asset Management Services](index=20&type=section&id=%E6%A5%AD%E5%8B%99%E5%88%86%E9%83%A8%E4%B9%8B%E7%B6%93%E7%87%9F%EF%BC%8D%E8%B3%87%E7%94%A2%E7%AE%A1%E7%90%86) Shengyuan Asset Management's assets under management decreased sharply to HKD 0.15 million following the termination of an overseas fund in July 2024 - Shengyuan Asset Management is licensed for Type 4 (advising on securities) and Type 9 (asset management) regulated activities[43](index=43&type=chunk) - **Total assets under management decreased sharply** from HKD 658.9 million as of June 30, 2024, to HKD 0.15 million as of June 30, 2025[44](index=44&type=chunk) - The decrease in AUM was primarily due to the **termination of an overseas fund in July 2024**[45](index=45&type=chunk) [Proprietary Trading](index=21&type=section&id=%E6%A5%AD%E5%8B%99%E5%88%86%E9%83%A8%E4%B9%8B%E7%B6%93%E7%87%9F%EF%BC%8D%E8%87%AA%E7%87%9F%E8%B2%B7%E8%B3%A3) The proprietary trading business, focused on the Hong Kong market, recorded a significantly lower profit of approximately HKD 2.1 million compared to the prior year - The proprietary trading business primarily invests in listed shares, corporate bonds, and private funds in the Hong Kong market[46](index=46&type=chunk) - **Proprietary trading profit was approximately HKD 2.1 million**, a significant decrease from HKD 19.7 million in the same period last year[46](index=46&type=chunk) [Prospects and Future Plans](index=21&type=section&id=%E5%89%8D%E6%99%AF%E5%8F%8A%E6%9C%AA%E4%BE%86%E8%A6%8F%E5%8A%83) The Group maintains a cautiously optimistic outlook, focusing on enhancing its fund management platform, expanding services, and exploring fintech opportunities - The Group maintains a **cautiously optimistic outlook** for the second half of 2025 and beyond, continuing to follow a prudent strategy and monitor macroeconomic developments[47](index=47&type=chunk) - It will leverage Hong Kong's position as a financial hub in the Greater Bay Area to **strengthen cross-border cooperation** and expand its securities brokerage, asset management, and corporate finance services[47](index=47&type=chunk) - The management team is committed to enhancing the fund management platform, expanding discretionary account services, and actively researching fintech areas such as **Web 3.0, stablecoins, and virtual currencies**[48](index=48&type=chunk) [Liquidity and Financial Resources](index=22&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's cash and cash equivalents stood at approximately HKD 25.8 million, with no borrowing debt and operations funded by internal cash flow - **Cash and cash equivalents were approximately HKD 25.8 million**, a decrease of about HKD 18.2 million from December 31, 2024[50](index=50&type=chunk) - **Net current assets stood at HKD 119.4 million**, with current assets of approximately HKD 139.4 million and current liabilities of approximately HKD 19.9 million[51](index=51&type=chunk) - The Group has **no borrowings or other debt**, making the gearing ratio not applicable, and funds its operations through internally generated cash flow[51](index=51&type=chunk) [Other Financial and Operational Information](index=23&type=section&id=%E5%85%B6%E4%BB%96%E8%B2%A1%E5%8B%99%E5%8F%8A%E9%81%8B%E7%87%9F%E4%BF%A1%E6%81%AF) The Group's transactions are mainly in HKD, USD, and RMB, with 19 employees, and no significant contingent liabilities or pledged assets - The Group's transactions are mainly denominated in HKD, USD, and RMB, and it **does not have a foreign currency hedging policy**, but management monitors exchange rate fluctuations[52](index=52&type=chunk) - The Group's capital structure, comprising issued share capital and reserves, remained unchanged during the period[53](index=53&type=chunk)[54](index=54&type=chunk) - As of June 30, 2025, the Group had **no significant contingent liabilities or pledged assets**[55](index=55&type=chunk)[57](index=57&type=chunk) - The Group employed **19 employees**, maintained competitive remuneration policies, and provided regular training, but granted no share options during the period[58](index=58&type=chunk)[59](index=59&type=chunk)[60](index=60&type=chunk) - Neither the company nor any of its subsidiaries purchased, redeemed, or sold any of the company's listed securities during the six months ended June 30, 2025[61](index=61&type=chunk) [Corporate Governance and Other Information](index=24&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%8F%8A%E5%85%B6%E4%BB%96%E4%BF%A1%E6%81%AF) [Review of Interim Report](index=24&type=section&id=%E4%B8%AD%E6%9C%9F%E5%A0%B1%E5%91%8A%E4%B9%8B%E5%AF%A9%E9%96%B1) The interim report for the period has been reviewed by Beijing Xinghua in accordance with Hong Kong Standard on Review Engagements 2410 - This interim report has been reviewed by **Beijing Xinghua** in accordance with Hong Kong Standard on Review Engagements 2410[62](index=62&type=chunk) - The interim report will be published on the websites of the company and the Stock Exchange and dispatched to shareholders in due course[62](index=62&type=chunk) [Audit Committee](index=25&type=section&id=%E5%AF%A9%E6%A0%B8%E5%A7%94%E5%93%A1%E6%9C%83) The Audit Committee, comprising three non-executive directors with relevant financial expertise, has reviewed the Group's accounting principles and interim results - The Audit Committee is composed of Ms. Huang Qin (Chairlady), Mr. Zhang Jinfan, and Mr. Huang Shuanggang, all of whom are non-executive directors with appropriate professional qualifications and financial experience[63](index=63&type=chunk) - The Audit Committee has reviewed the Group's accounting principles and practices, discussed internal control and financial reporting matters, and reviewed the interim results and unaudited financial statements for the period[63](index=63&type=chunk) [Corporate Governance](index=25&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB) The company has complied with the Corporate Governance Code as set out in Appendix C1 of the Listing Rules throughout the reporting period - The company is committed to maintaining high standards of corporate governance and has complied with the Corporate Governance Code in Appendix C1 of the Listing Rules during the reporting period[64](index=64&type=chunk) [Model Code for Securities Transactions by Directors](index=25&type=section&id=%E8%91%A3%E4%BA%8B%E9%80%B2%E8%A1%8C%E8%AD%89%E5%88%B8%E4%BA%A4%E6%98%93%E7%9A%84%E6%A8%99%E6%BA%96%E5%AE%88%E5%89%87) The company has adopted the Model Code for securities transactions by directors and confirmed all directors' compliance during the period - The company has adopted the Model Code set out in Appendix C3 of the Listing Rules as the code of conduct for securities transactions by directors[65](index=65&type=chunk) - Following specific enquiry, all directors have confirmed their compliance with the required standards set out in the Model Code during the reporting period[65](index=65&type=chunk) [Board of Directors](index=25&type=section&id=%E8%91%A3%E4%BA%8B%E6%9C%83) As of the announcement date, the Board of Directors consists of two executive, one non-executive, and three independent non-executive directors - The Board of Directors comprises executive directors Mr. Zhou Quan and Mr. Zhao Yun, non-executive director Mr. Huang Shuanggang, and independent non-executive directors Mr. Zhang Jinfan, Ms. Huang Qin, and Mr. Kwok Yiu Lai[66](index=66&type=chunk)[68](index=68&type=chunk)

[Company Information and Announcement](index=1&type=section&id=%E5%85%AC%E5%8F%B8%E4%BF%A1%E6%81%AF%E4%B8%8E%E5%85%AC%E5%91%8A%E5%A3%B0%E6%98%8E) [Company Basic Information](index=1&type=section&id=%E5%85%AC%E5%8F%B8%E5%9F%BA%E6%9C%AC%E4%BF%A1%E6%81%AF) Minmetals Land Limited (Stock Code: 230) is a Bermuda-incorporated company, with June Glory International Limited as its direct holding company and China Minmetals Corporation Limited as its ultimate holding company - Minmetals Land Limited (Stock Code: 230) is a company incorporated in Bermuda[2](index=2&type=chunk) - Its direct holding company is June Glory International Limited, and its ultimate holding company is China Minmetals Corporation Limited[6](index=6&type=chunk) [Announcement Statement](index=1&type=section&id=%E5%85%AC%E5%91%8A%E5%A3%B0%E6%98%8E) This announcement discloses the unaudited interim results of Minmetals Land Limited and its subsidiaries for the six months ended June 30, 2025, including comparative figures for the same period in 2024 - This announcement discloses the unaudited interim results of the Company and its subsidiaries for the six months ended June 30, 2025, and provides comparative figures for the same period in 2024[2](index=2&type=chunk) [Interim Condensed Consolidated Financial Statements](index=1&type=section&id=%E4%B8%AD%E6%9C%9F%E7%AE%80%E6%98%8E%E7%BB%BC%E5%90%88%E8%B4%A2%E5%8A%A1%E6%8A%A5%E8%A1%A8) [Interim Condensed Consolidated Statement of Profit or Loss](index=1&type=section&id=%E4%B8%AD%E6%9C%9F%E7%AE%80%E6%98%8E%E7%BB%BC%E5%90%88%E6%8D%9F%E7%9B%8A%E8%A1%A8) For the six months ended June 30, 2025, the company's revenue significantly decreased by 60.7% to HKD 1.976 billion, and gross profit decreased by 40.3% to HKD 224 million, with loss for the period narrowing by 44.8% to HKD 580 million and basic loss per share at 17.49 HK cents Interim Condensed Consolidated Statement of Profit or Loss Key Data | Indicator | June 30, 2025 (HKD '000) | June 30, 2024 (HKD '000) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 1,976,005 | 5,023,251 | -60.7% | | Cost of sales | (1,752,319) | (4,648,058) | -62.4% | | Gross profit | 223,686 | 375,193 | -40.3% | | Other income | 55,062 | 30,310 | 81.7% | | Fair value changes of investment properties | (97,700) | (87,504) | 11.7% | | Selling and marketing expenses | (129,459) | (253,848) | -49.0% | | Administrative and other expenses | (230,800) | (279,434) | -17.4% | | Impairment provision for inventories | (30,947) | (278,557) | -88.9% | | Net impairment loss under expected credit loss model | (79,513) | (249,464) | -68.1% | | Finance income | 88,956 | 114,151 | -22.1% | | Finance costs | (291,093) | (297,354) | -2.1% | | Share of results of associates | (28,566) | (157,715) | -81.9% | | Share of results of joint ventures | 10,288 | 71,371 | -85.6% | | Loss before tax | (510,086) | (1,012,851) | -49.6% | | Income tax expense | (69,601) | (37,099) | 87.6% | | Loss for the period | (579,687) | (1,049,950) | -44.8% | | Loss attributable to equity holders of the Company | (585,290) | (1,044,489) | -44.0% | | Basic and diluted loss per share (HK cents) | (17.49) | (31.21) | -44.0% | [Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=%E4%B8%AD%E6%9C%9F%E7%AE%80%E6%98%8E%E7%BB%BC%E5%90%88%E6%8D%9F%E7%9B%8A%E5%8F%8A%E5%85%B6%E4%BB%96%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) For the six months ended June 30, 2025, the company's loss for the period was HKD 580 million, but other comprehensive income turned positive at HKD 294 million due to exchange differences and fair value gains on financial assets, significantly narrowing the total comprehensive expense to HKD 286 million Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income Key Data | Indicator | June 30, 2025 (HKD '000) | June 30, 2024 (HKD '000) | | :--- | :--- | :--- | | Loss for the period | (579,687) | (1,049,950) | | Other comprehensive income/(expense) | 293,769 | (120,481) | | Total comprehensive expense for the period | (285,918) | (1,170,431) | | Total comprehensive expense attributable to equity holders of the Company | (409,364) | (1,076,689) | | Total comprehensive income attributable to non-controlling interests | 123,446 | (93,742) | | Exchange differences | 204,474 | (80,852) | | Fair value (loss)/gain on cash flow hedges | (11,053) | 2,439 | | Fair value gain/(loss) on financial assets measured at fair value through other comprehensive income | 49,548 | (27,489) | [Interim Condensed Consolidated Statement of Financial Position](index=3&type=section&id=%E4%B8%AD%E6%9C%9F%E7%AE%80%E6%98%8E%E7%BB%BC%E5%90%88%E8%B4%A2%E5%8A%A1%E7%8A%B6%E5%86%B5%E8%A1%A8) As of June 30, 2025, the company's total assets were HKD 39.372 billion, a 4.0% decrease from the end of 2024, with total liabilities at HKD 30.402 billion and total equity at HKD 8.969 billion; net current assets increased to HKD 10.533 billion, but current borrowings remain high Interim Condensed Consolidated Statement of Financial Position Key Data | Indicator | June 30, 2025 (HKD '000) | December 31, 2024 (HKD '000) | Change (%) | | :--- | :--- | :--- | :--- | | Total non-current assets | 5,711,904 | 5,400,538 | 5.8% | | Total current assets | 33,659,959 | 35,630,382 | -5.5% | | Total assets | 39,371,863 | 41,030,920 | -4.0% | | Total equity | 8,969,425 | 9,256,969 | -3.1% | | Total non-current liabilities | 7,275,601 | 5,751,906 | 26.5% | | Total current liabilities | 23,126,837 | 26,022,045 | -11.2% | | Total liabilities | 30,402,438 | 31,773,951 | -4.3% | | Net current assets | 10,533,122 | 9,608,337 | 9.6% | | Inventories | 23,646,262 | 24,699,194 | -4.3% | | Cash and cash equivalents | 1,983,197 | 2,821,859 | -29.7% | | Current borrowings | 14,614,344 | 16,294,582 | -10.3% | [Notes to the Interim Condensed Consolidated Financial Information](index=4&type=section&id=%E4%B8%AD%E6%9C%9F%E7%AE%80%E6%98%8E%E7%BB%BC%E5%90%88%E8%B4%A2%E5%8A%A1%E8%B5%84%E6%96%99%E9%99%84%E6%B3%A8) [General Information](index=4&type=section&id=%E4%B8%80%E8%88%AC%E8%B5%84%E6%96%99) The Group's principal activities are property development, property management, professional construction, and property investment, primarily operating in the PRC, with the company incorporated in Bermuda and listed on the Hong Kong Stock Exchange - The Group's principal activities include property development, property management, professional construction, and property investment, with its primary market in the PRC[6](index=6&type=chunk) - The Company is incorporated in Bermuda and listed on The Stock Exchange of Hong Kong Limited[6](index=6&type=chunk) [Basis of Preparation](index=4&type=section&id=%E7%BC%96%E5%88%B6%E5%9F%BA%E5%87%86) The condensed consolidated financial information is prepared in accordance with HKAS 34 and the Listing Rules, presented in HKD '000; despite a net loss and non-compliance with certain bank loan covenants, the directors believe the Group can continue as a going concern based on cash flow forecasts, financial position, holding company support, and unutilized credit facilities - The condensed consolidated financial information is prepared in accordance with Hong Kong Accounting Standard 34 issued by the Hong Kong Institute of Certified Public Accountants and the Listing Rules of the Hong Kong Stock Exchange[8](index=8&type=chunk) - For the six months ended June 30, 2025, the Group recorded a net loss of approximately **HKD 580 million**, with net current assets of **HKD 10.533 billion**, current portion of interest-bearing bank and other borrowings of **HKD 14.614 billion**, and cash and cash equivalents of **HKD 1.983 billion**[9](index=9&type=chunk) - The Group is applying to banks for waivers of non-compliance with certain financial covenants of bank borrowings, but the directors are satisfied that the Group is able to meet its financial obligations in the next twelve months, thus preparing the financial information on a going concern basis[9](index=9&type=chunk) [Accounting Policies](index=5&type=section&id=%E4%BC%9A%E8%AE%A1%E6%94%BF%E7%AD%96) The condensed consolidated financial statements are primarily prepared on a historical cost basis, with certain properties and financial instruments measured at revalued amounts or fair value; newly applied revised HKFRS accounting standards in this period had no significant impact on financial position or performance - The condensed consolidated financial statements are prepared on the historical cost basis, with certain properties and financial instruments measured at revalued amounts or fair value[10](index=10&type=chunk) - The revised Hong Kong Financial Reporting Standards accounting standards issued by the Hong Kong Institute of Certified Public Accountants were first applied in this interim period but had no significant impact on the financial position or performance[11](index=11&type=chunk) [Revenue and Segment Information](index=5&type=section&id=%E6%94%B6%E5%85%A5%E5%8F%8A%E5%88%86%E9%83%A8%E8%B5%84%E6%96%99) The Group's revenue primarily derives from contracts with customers and rental income from investment properties, totaling HKD 1.976 billion for the six months ended June 30, 2025, with property development contributing HKD 1.743 billion (88.2%) and property management HKD 210 million (10.6%); operating segments were reorganized to separately present property management services Revenue Analysis | Revenue Source | June 30, 2025 (HKD '000) | June 30, 2024 (HKD '000) | | :--- | :--- | :--- | | Revenue from contracts with customers | 1,954,153 | 4,997,329 | | Rental income from investment properties | 21,852 | 25,922 | | **Total Revenue** | **1,976,005** | **5,023,251** | Revenue from Contracts with Customers Breakdown (June 30, 2025) | Segment | Property Development (HKD '000) | Property Management (HKD '000) | Professional Construction (HKD '000) | Total (HKD '000) | | :--- | :--- | :--- | :--- | :--- | | Sale of properties | 1,719,035 | — | — | 1,719,035 | | Professional construction services | — | — | 545 | 545 | | Management services | 24,218 | 210,355 | — | 234,573 | | **Total** | **1,743,253** | **210,355** | **545** | **1,954,153** | | **Geographical Market** | | | | | | Mainland China | 1,592,273 | 205,533 | — | 1,797,806 | | Hong Kong | 150,980 | 4,822 | 545 | 156,347 | - The executive directors reorganized the operating segments, with "Property Management Services," previously integrated into "Property Development," now considered a separate segment[15](index=15&type=chunk) Segment Revenue and Results (June 30, 2025) | Segment | 2025 Revenue (HKD '000) | 2024 Revenue (HKD '000) | 2025 Results (HKD '000) | 2024 Results (HKD '000) | | :--- | :--- | :--- | :--- | :--- | | Property Development | 1,743,253 | 4,808,026 | (102,162) | (574,418) | | Property Management | 210,355 | 189,046 | 30,206 | 23,410 | | Professional Construction | 545 | 257 | 1,691 | (12,718) | | Property Investment | 21,852 | 25,922 | (86,209) | (53,212) | | **Total Sales to External Customers** | **1,976,005** | **5,023,251** | **(156,474)** | **(616,938)** | [Other Income](index=9&type=section&id=%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5) For the six months ended June 30, 2025, other income significantly increased by 81.7% year-on-year to HKD 55.062 million, primarily driven by a notable rise in project management income, liquidated damages, and other miscellaneous income Other Income Components | Income Item | June 30, 2025 (HKD '000) | June 30, 2024 (HKD '000) | | :--- | :--- | :--- | | Government grants | 8,719 | 9,278 | | Dividend income | 334 | 592 | | Management fee income from fellow subsidiaries | 1,228 | 1,246 | | Project management income | 12,913 | 1,290 | | Liquidated damages income | 8,456 | 7,209 | | Others | 23,412 | 10,695 | | **Total** | **55,062** | **30,310** | [Income Tax Expense](index=9&type=section&id=%E6%89%80%E5%BE%97%E7%A8%8E%E5%BC%80%E6%94%AF) For the six months ended June 30, 2025, income tax expense significantly increased by 87.6% year-on-year to HKD 69.601 million, mainly due to higher PRC corporate income tax and land appreciation tax - Hong Kong profits tax rate is **16.5%** (with the first HKD 2 million of assessable profits taxed at 8.25%)[19](index=19&type=chunk) - Land appreciation tax is levied at progressive rates from **30% to 60%**[20](index=20&type=chunk) Income Tax Expense Components | Tax Type | June 30, 2025 (HKD '000) | June 30, 2024 (HKD '000) | | :--- | :--- | :--- | | PRC corporate income tax | 32,712 | 16,240 | | PRC land appreciation tax | 22,395 | (9,758) | | Hong Kong profits tax | 952 | 1,361 | | **Total Current Tax** | **56,059** | **7,843** | | Deferred tax | 13,542 | 29,256 | | **Total** | **69,601** | **37,099** | [Loss Before Tax](index=10&type=section&id=%E9%99%A4%E7%A8%8E%E5%89%8D%E4%BA%8F%E6%8D%9F) For the six months ended June 30, 2025, loss before tax narrowed by 49.6% year-on-year to HKD 510 million, primarily driven by significant decreases in cost of properties sold, selling and marketing expenses, administrative and other expenses, impairment provision for inventories, and net impairment loss under expected credit loss model Loss Before Tax Key Components | Item | June 30, 2025 (HKD '000) | June 30, 2024 (HKD '000) | | :--- | :--- | :--- | | Cost of properties sold | 1,563,704 | 4,473,986 | | Cost of management services | 185,689 | 172,568 | | Employee benefits expense | 123,337 | 141,761 | | Net exchange loss | 57,311 | 78,428 | - Cost of properties sold includes capitalized interest expenses of **HKD 125 million** (2024: HKD 557 million)[25](index=25&type=chunk) - Of the employee benefits expense, **HKD 18.155 million** (2024: HKD 24.846 million) was capitalized into properties under development[25](index=25&type=chunk) [Dividends](index=10&type=section&id=%E8%82%A1%E6%81%AF) The Board of Directors does not recommend an interim dividend for the six months ended June 30, 2025, consistent with the prior year - The directors do not recommend the payment of an interim dividend for the six months ended June 30, 2025 (2024: nil)[23](index=23&type=chunk) [Earnings Per Share](index=10&type=section&id=%E6%AF%8F%E8%82%A1%E7%9B%88%E5%88%A9) Basic earnings per share are calculated by dividing the loss attributable to equity holders of the Company by the weighted average number of ordinary shares outstanding during the period; diluted earnings per share are the same as basic earnings per share due to the absence of dilutive potential ordinary shares - Basic earnings per share are calculated by dividing the loss attributable to equity holders of the Company by the weighted average number of ordinary shares outstanding during the period[24](index=24&type=chunk) - As there were no dilutive potential ordinary shares for the periods ended June 30, 2025 and 2024, diluted earnings per share are the same as basic earnings per share[26](index=26&type=chunk) [Inventories](index=11&type=section&id=%E5%AD%98%E8%B4%A7) As of June 30, 2025, the company's total inventories amounted to HKD 23.646 billion, a 4.3% decrease from the end of 2024, with properties under development slightly increasing and properties held for sale decreasing; some inventories are pledged as collateral for bank borrowings Inventories Components | Inventory Type | June 30, 2025 (HKD '000) | December 31, 2024 (HKD '000) | | :--- | :--- | :--- | | Properties under development – located in Mainland China | 10,765,173 | 10,079,451 | | Properties held for sale – located in Mainland China | 8,596,188 | 10,188,165 | | Properties held for sale – located in Hong Kong | 4,284,901 | 4,431,578 | | **Total** | **23,646,262** | **24,699,194** | - As of June 30, 2025, inventories with a carrying amount of **HKD 3.682 billion** (December 31, 2024: HKD 4.265 billion) were pledged as collateral for bank borrowings[27](index=27&type=chunk) [Prepayments, Trade and Other Receivables](index=11&type=section&id=%E9%A2%84%E4%BB%98%E6%AC%BE%E9%A1%B9%E3%80%81%E8%B4%B8%E6%98%93%E5%8F%8A%E5%85%B6%E4%BB%96%E5%BA%94%E6%94%B6%E6%AC%BE%E9%A1%B9) As of June 30, 2025, total trade receivables amounted to HKD 229 million, a slight increase from the end of 2024, with the largest portion due within 90 days; an impairment provision of HKD 51.829 million has been made Trade Receivables Ageing Analysis | Ageing | June 30, 2025 (HKD '000) | December 31, 2024 (HKD '000) | | :--- | :--- | :--- | | Within 90 days | 23,854 | 79,844 | | 91 to 180 days | 57,466 | 13,986 | | 181 days to one year | 47,217 | 23,025 | | One to two years | 25,350 | 39,745 | | Over two years | 75,418 | 55,033 | | **Total** | **229,305** | **211,633** | | Less: Impairment provision | (51,829) | (54,409) | | **Net Amount** | **177,476** | **157,224** | [Contract Assets](index=12&type=section&id=%E5%90%88%E7%B4%84%E8%B3%87%E7%94%A2) As of June 30, 2025, net contract assets amounted to HKD 53.108 million, a decrease from the end of 2024, primarily comprising construction services and retention receivables, with impairment provisions already made Contract Assets Components | Item | June 30, 2025 (HKD '000) | December 31, 2024 (HKD '000) | | :--- | :--- | :--- | | Construction services | 112,054 | 120,734 | | Retention receivables | 31,006 | 48,949 | | **Total** | **143,060** | **169,683** | | Impairment | (89,952) | (101,286) | | **Net Amount** | **53,108** | **68,397** | [Borrowings](index=12&type=section&id=%E5%80%9F%E6%AC%BE) As of June 30, 2025, total borrowings amounted to HKD 21.309 billion, a slight decrease from the end of 2024, with non-current borrowings increasing and current borrowings decreasing; the company failed to comply with certain financial covenants of financing agreements, leading to the reclassification of some non-current borrowings as current liabilities Borrowings Components | Borrowing Type | June 30, 2025 (HKD '000) | December 31, 2024 (HKD '000) | | :--- | :--- | :--- | | **Non-current Borrowings** | | | | Bank borrowings, secured | 1,198,593 | 926,986 | | Bank borrowings, unsecured | 953,078 | 380,665 | | Guaranteed bonds, unsecured | 2,352,660 | 2,325,828 | | Bonds, unsecured | 442,242 | — | | Loans from holding company | 1,273,497 | 1,254,218 | | Loans from non-controlling shareholders of subsidiaries | 474,741 | 500,890 | | **Total Non-current Borrowings** | **6,694,811** | **5,388,587** | | **Current Borrowings** | | | | Bank borrowings, secured | 278,679 | 870,140 | | Bank borrowings, unsecured | 12,371,506 | 11,920,603 | | Guaranteed bonds, unsecured | 51,419 | 51,341 | | Bonds, unsecured | 924,777 | 3,300,346 | | Loans from holding company | 872,813 | — | | Loans from non-controlling shareholders of subsidiaries | 115,150 | 152,152 | | **Total Current Borrowings** | **14,614,344** | **16,294,582** | | **Total Borrowings** | **21,309,155** | **21,683,169** | - The Group issued 2021 guaranteed bonds (USD 300 million, 4.95% annual interest, due 2026), 2025 bonds (RMB 404 million, 4.3% annual interest, due 2027), and 2022 bonds (RMB 800 million, 4.6% annual interest, due 2025)[30](index=30&type=chunk) - The Group failed to comply with financial covenants of certain financing agreements, involving **HKD 9.929 billion** in bank borrowings, leading to cross-default on **HKD 2.365 billion** of other bank borrowings; **HKD 8.318 billion** of the non-current portion was reclassified as current liabilities[31](index=31&type=chunk) [Trade and Other Payables](index=14&type=section&id=%E8%B4%B8%E6%98%93%E5%8F%8A%E5%85%B6%E4%BB%96%E5%BA%94%E4%BB%98%E6%AC%BE%E9%A1%B9) As of June 30, 2025, total trade and other payables amounted to HKD 1.699 billion, a decrease from the end of 2024, with the largest portion due within 90 days Trade and Other Payables Ageing Analysis | Ageing | June 30, 2025 (HKD '000) | December 31, 2024 (HKD '000) | | :--- | :--- | :--- | | Within 90 days | 798,870 | 887,832 | | 91 to 180 days | 299,462 | 87,377 | | 181 days to one year | 118,392 | 349,378 | | One to two years | 133,349 | 169,758 | | Over two years | 348,511 | 360,039 | | **Total** | **1,698,584** | **1,854,384** | [Management Discussion and Analysis](index=15&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%82%E8%AE%A8%E8%AE%BA%E5%8F%8A%E5%88%86%E6%9E%90) [Operating Review](index=15&type=section&id=%E7%BB%8F%E8%90%A5%E5%9B%9E%E9%A1%BE) In the first half of 2025, despite a persistent downturn in the real estate market, the Group's loss narrowed by 44.8% year-on-year, actively addressing market challenges with progress in property development, professional construction, property investment, and property management, while continuously optimizing its land bank structure [Overview](index=15&type=section&id=%E6%A6%82%E8%BF%B0) In the first half of 2025, the real estate market remained in a deep adjustment phase with sluggish sales, yet the Group's loss for the period decreased by 44.8% to HKD 580 million, and loss attributable to equity holders was HKD 585 million - In the first half of 2025, the real estate market remained in a deep adjustment phase, with property development investment continuing to decline and sales remaining sluggish[34](index=34&type=chunk) Core Loss Data | Indicator | June 30, 2025 (HKD) | June 30, 2024 (HKD) | | :--- | :--- | :--- | | Loss for the period | 580 million | 1.05 billion | | Loss attributable to equity holders | 585 million | 1.044 billion | | Core loss attributable to equity holders of the Company | 292 million | 159 million | [Market Review](index=15&type=section&id=%E5%B8%82%E5%9C%BA%E5%9B%9E%E9%A1%BE) In the first half of 2025, national commercial property sales decreased by 5.5% year-on-year to RMB 4,424.1 billion, with sales area down 3.5% to 458.51 million square meters; real estate development investment fell 11.2% to RMB 4,665.8 billion, and construction area declined by 9.1% H1 2025 National Real Estate Market Data | Indicator | Jan-Jun 2025 | YoY Change (%) | | :--- | :--- | :--- | | Commercial property sales (RMB) | 4,424.1 billion | -5.5% | | Commercial property sales area (sq.m.) | 458.51 million | -3.5% | | Real estate development investment (RMB) | 4,665.8 billion | -11.2% | | Housing construction area (sq.m.) | 633.32 million | -9.1% | [Business Development](index=16&type=section&id=%E4%B8%9A%E5%8A%A1%E5%8F%91%E5%B1%95%E6%83%85%E5%86%B5) The Group's property development, professional construction, property investment, and property management businesses showed varied performance amidst market challenges, with property development contract sales and GFA decreasing, professional construction securing new projects, property investment experiencing lower occupancy, and property management achieving stable expansion [Property Development](index=16&type=section&id=%E6%88%BF%E5%9C%B0%E7%94%A2%E7%99%BC%E5%B1%95) In the first half of 2025, the Company, together with its subsidiaries, joint ventures, and associates, recorded a 28.4% year-on-year decrease in contract sales to RMB 2.29 billion, and a 16.9% decrease in total contract sales GFA to 138 thousand square meters Contract Sales and Gross Floor Area | Indicator | H1 2025 | H1 2024 | YoY Change (%) | | :--- | :--- | :--- | :--- | | Contract sales (RMB billion) | 2.29 | 3.20 | -28.4% | | Contract sales GFA ('000 sq.m.) | 138 | 166 | -16.9% | - Contract sales primarily originated from property development projects in **first-tier and core second-tier cities**[37](index=37&type=chunk) Contract Sales Composition (H1 2025) | Location | Contract Amount (RMB million) | Contract GFA (sq.m.) | | :--- | :--- | :--- | | Bohai Rim Region | 633 | 44,000 | | Yangtze River Delta Region | 277 | 12,000 | | Central China Region | 585 | 45,000 | | Chengdu-Chongqing Region | 275 | 22,000 | | Pearl River Delta Region (including Hong Kong) | 524 | 15,000 | | **Total** | **2,294** | **138,000** | [Professional Construction](index=16&type=section&id=%E5%B0%88%E6%A5%AD%E5%BB%BA%E7%AF%89) The Group operates professional construction business, primarily curtain wall projects, in the Hong Kong market; despite a sluggish market, it successfully secured one curtain wall project and one steel structure project during the period, while continuously optimizing its operational structure and strengthening risk management - The Group operates professional construction business in the Hong Kong market, primarily focusing on the design, manufacturing, and installation of curtain wall systems[40](index=40&type=chunk) - During the period, it successfully secured one curtain wall project and one steel structure project, and continued to optimize its operational structure and strengthen risk management[40](index=40&type=chunk)[41](index=41&type=chunk) [Property Investment](index=17&type=section&id=%E7%89%A9%E6%A5%AD%E6%8A%95%E8%B3%87) The Group's property investment business primarily comprises two commercial buildings in Hong Kong; as of June 30, 2025, occupancy rates for both LKF29 and China Minmetals Tower decreased compared to the prior year, mainly due to tenant departures and a subdued market sentiment - The Group's property investment business primarily includes China Minmetals Tower and LKF29 in Central, Hong Kong[42](index=42&type=chunk) Property Occupancy Rates | Property | June 30, 2025 Occupancy Rate | June 30, 2024 Occupancy Rate | Change | | :--- | :--- | :--- | :--- | | LKF29 | 75.63% | 80.64% | -5.01% | | China Minmetals Tower | 80.27% | 86.89% | -6.62% | - The decrease in occupancy rates was mainly due to more tenants whose contracts expired and moved out during the period compared to the same period last year, with the Hong Kong office and retail leasing market expected to continue facing challenges in the second half of the year[42](index=42&type=chunk) [Property Management](index=17&type=section&id=%E7%89%A9%E6%A5%AD%E7%AE%A1%E7%90%86) The Group's property management services cover over 70 projects in nearly 20 cities across Mainland China and Hong Kong, committed to providing high-quality living experiences; despite a challenging operating environment, it achieved stable expansion of its operating scale during the period - The Group's property management services cover over **70 projects** in nearly **20 cities** across Mainland China and Hong Kong[43](index=43&type=chunk) - The Group actively improved its 37ºC Living Community service system and achieved stable expansion of its operating scale[43](index=43&type=chunk)[44](index=44&type=chunk) [Land Bank](index=18&type=section&id=%E5%9C%9F%E5%9C%B0%E5%84%B2%E5%82%99) As of June 30, 2025, the Group's total land bank was 5.295 million square meters, with first-tier, second-tier, and third-tier cities accounting for 30.5%, 34.3%, and 35.2% respectively; the Bohai Rim region holds the largest land bank - As of June 30, 2025, the Group's total developable land bank was **5,295,000 square meters**[45](index=45&type=chunk) Land Bank Composition | City Tier | Land Bank ('000 sq.m.) | Proportion (%) | | :--- | :--- | :--- | | First-tier cities | 1,614 | 30.5% | | Second-tier cities | 1,814 | 34.3% | | Third-tier cities | 1,867 | 35.2% | | **Total** | **5,295** | **100.0%** | | **Location** | | | | Bohai Rim Region | 2,016 | 38.1% | | Yangtze River Delta Region | 195 | 3.7% | | Central China Region | 947 | 17.9% | | Chengdu-Chongqing Region | 1,054 | 19.9% | | Pearl River Delta Region (including Hong Kong) | 1,083 | 20.4% | | **Total** | **5,295** | **100.0%** | [Entrusted Asset Management](index=18&type=section&id=%E5%A7%94%E8%A8%97%E8%B3%87%E7%94%A2%E7%AE%A1%E7%90%86) During the period, the Group recorded RMB 1.13 million in management service income under entrusted management service agreements, managing China Minmetals' unlisted property development business assets - During the period, the Group recorded **RMB 1.13 million** in management service income under entrusted management service agreements[46](index=46&type=chunk) - The entrusted assets include property development projects located in Beijing, Tianjin, Shenyang, Liaoning, Jiangsu, Hunan, and Guangdong, among other places[46](index=46&type=chunk) [Outlook](index=19&type=section&id=%E5%B1%95%E6%9C%9B) Looking ahead to the second half of the year, the national real estate market continues to face adjustment pressure, with financing contraction and liquidity risks coexisting; the Group will persistently enhance sales and collection capabilities, reduce costs and increase efficiency, prevent and resolve debt risks, and strengthen sustainable development capabilities - Looking ahead to the second half of the year, the national real estate market continues to face adjustment pressure, with property developers' financing showing a contraction trend, and some developers still facing liquidity crises and default risks[47](index=47&type=chunk) - The Group will make unremitting efforts to continuously enhance sales and collection capabilities, effectively reduce costs and increase efficiency, prevent and resolve debt risks, and strengthen sustainable development capabilities[47](index=47&type=chunk) [Financial Review](index=19&type=section&id=%E8%B4%A2%E5%8A%A1%E5%9B%9E%E9%A1%BE) In the first half of 2025, the Group's consolidated revenue decreased by 60.7% year-on-year to HKD 1.976 billion, mainly due to a decline in property development business settlement scale; the overall gross profit margin increased to 11.3%, and loss for the period narrowed, primarily benefiting from cost control, reduced impairment provisions, and lower losses from associates [Revenue](index=19&type=section&id=%E6%94%B6%E5%85%A5) The Group's consolidated revenue for the first half of 2025 was HKD 1.976 billion, a 60.7% year-on-year decrease; property development revenue decreased by 63.7%, but its gross profit margin increased by 3.4 percentage points to 10.3%; professional construction revenue grew by 111.5%, property investment revenue decreased by 15.7%, and property management revenue increased by 11.3%; the overall gross profit margin rose from 7.5% to 11.3% Consolidated Revenue Components | Business | 2025 (HKD million) | Proportion (%) | 2024 (HKD million) | Proportion (%) | YoY Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Property Development | 1,743.25 | 88.2% | 4,808.03 | 95.7% | –63.7% | | Professional Construction | 0.55 | 0.1% | 0.26 | 0.0% | 111.5% | | Property Investment | 21.85 | 1.1% | 25.92 | 0.5% | –15.7% | | Property Management | 210.36 | 10.6% | 189.04 | 3.8% | 11.3% | | **Total** | **1,976.01** | **100.0%** | **5,023.25** | **100%** | **–60.7%** | - The gross profit margin for property development business increased by **3.4 percentage points** to **10.3%** compared to the same period last year, mainly due to changes in product mix[50](index=50&type=chunk) - The gross profit margin for property investment business decreased by **8.7 percentage points** to **62.8%**, mainly due to reduced rental income and fixed costs[50](index=50&type=chunk) - The Group's overall gross profit margin increased from **7.5%** in the same period last year to **11.3%**[51](index=51&type=chunk) [Other Income](index=20&type=section&id=%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5) The Group's other income increased by 83.3% year-on-year to HKD 55 million, primarily due to increased forfeited deposits from customers breaching property development sales agreements, penalties from suppliers, and project management income - The Group's other income increased by **83.3%** year-on-year to **HKD 55 million** (June 30, 2024: HKD 30 million)[52](index=52&type=chunk) - This was mainly due to increased forfeited deposits from customers breaching property development sales agreements, penalties from suppliers for engineering projects, and project management income[52](index=52&type=chunk) [Fair Value Changes of Investment Properties](index=21&type=section&id=%E6%8A%95%E8%B3%87%E7%89%A9%E6%A5%AD%E5%85%AC%E5%85%81%E5%80%BC%E8%AE%8A%E5%8B%95) The Group's non-cash fair value loss on investment properties increased by 11.4% year-on-year to HKD 98 million during the period, mainly due to pressure on rental levels in the Hong Kong market, but with no material impact on cash flow - The Group's non-cash fair value loss on investment properties increased by **11.4%** year-on-year to **HKD 98 million** (June 30, 2024: HKD 88 million)[53](index=53&type=chunk) - This was mainly due to the market not fully recovering, with market rental levels for renewed and newly leased properties still under pressure, leading to fair value losses on investment properties in Hong Kong[53](index=53&type=chunk) [Selling and Marketing Expenses](index=21&type=section&id=%E9%8A%B7%E5%94%AE%E5%8F%8A%E7%87%9F%E9%8A%B7%E8%B2%BB%E7%94%A8) The Group's selling and marketing expenses decreased by 49.2% year-on-year to HKD 129 million, primarily due to lower property development business settlement revenue, resulting in reduced sales commissions and related expenses - The Group's selling and marketing expenses decreased by **49.2%** year-on-year to **HKD 129 million** (June 30, 2024: HKD 254 million)[54](index=54&type=chunk) - This was mainly due to lower property development business settlement revenue compared to the same period last year, resulting in reduced sales commissions and related selling and marketing expenses recognized in profit or loss[54](index=54&type=chunk) [Administrative and Other Expenses](index=21&type=section&id=%E8%A1%8C%E6%94%BF%E5%8F%8A%E5%85%B6%E4%BB%96%E9%96%8B%E6%94%AF) The Group's administrative and other expenses decreased by 17.2% year-on-year to HKD 231 million, primarily benefiting from strict cost control principles and improved operational efficiency, leading to reduced total remuneration and benefits for directors and employees, and professional fees - The Group's administrative and other expenses decreased by **17.2%** year-on-year to **HKD 231 million** (June 30, 2024: HKD 279 million)[55](index=55&type=chunk) - This was mainly due to the Group adhering to strict cost control principles and continuously improving operational efficiency, resulting in reduced total remuneration and benefits for directors and employees, and professional fees compared to the same period last year[55](index=55&type=chunk) [Impairment Provision for Inventories](index=21&type=section&id=%E5%AD%98%E8%B2%A8%E6%B8%9B%E5%80%BC%E6%92%A5%E5%82%99) During the period, the Group recorded a one-off non-cash impairment provision for inventories of HKD 31 million, a significant 88.9% year-on-year decrease, primarily benefiting from market stabilization under real estate policy adjustments, which mitigated the extent of price declines for some projects - During the period, the Group recorded a one-off non-cash impairment provision for inventories of **HKD 31 million** (June 30, 2024: HKD 279 million), a significant year-on-year decrease[56](index=56&type=chunk) - The main reason is that under continuous real estate policy adjustments, local governments further relaxed administrative controls to stabilize real estate market development[56](index=56&type=chunk) [Net Impairment Loss Under Expected Credit Loss Model](index=21&type=section&id=%E9%A0%90%E6%9C%9F%E4%BF%A1%E8%B2%B8%E虧%E6%90%8D%E6%A8%A1%E5%9E%8B%E9%A0%85%E4%B8%8B%E6%B8%9B%E5%80%BC%E虧%E6%90%8D%E6%B7%A8%E9%A1%8D) The Group made an impairment provision of HKD 80 million for receivables related to certain joint ventures and associates, a 67.9% year-on-year decrease, mainly because joint ventures and associates did not undertake significant inventory impairments as in the prior year - The Group made an impairment provision of **HKD 80 million** for receivables related to certain joint ventures and associates, a **67.9%** decrease compared to **HKD 249 million** in the same period last year[57](index=57&type=chunk) - The main reason is that during the period, joint ventures and associates did not undertake significant inventory impairments as in the same period last year, thereby reducing the expected loss on receivables for the period[57](index=57&type=chunk) [Finance Costs](index=22&type=section&id=%E8%B2%A1%E5%8B%99%E6%88%90%E6%9C%AC) The Group's finance costs recognized in profit or loss decreased by 2.0% year-on-year to HKD 291 million, primarily benefiting from active capital management, debt portfolio restructuring leading to lower loan interest rates, and a concurrent decrease in the one-month Hong Kong Interbank Offered Rate - The Group's finance costs recognized in profit or loss decreased by **2.0%** year-on-year to **HKD 291 million** (June 30, 2024: HKD 297 million)[58](index=58&type=chunk) - This was mainly achieved through active capital management and restructuring of the debt portfolio, leading to lower loan interest rates, coupled with a concurrent decrease in the one-month Hong Kong Interbank Offered Rate[58](index=58&type=chunk) [Share of Results of Associates](index=22&type=section&id=%E6%87%89%E4%BD%94%E8%81%AF%E7%87%9F%E5%85%AC%E5%8F%B8%E6%A5%AD%E7%B8%BE) The Group's share of loss from associates decreased by 81.6% year-on-year to HKD 29 million, primarily because associates made significant inventory impairment provisions in the prior year, while market performance did not further deteriorate in the current period, leading to reduced impairment provisions - The Group's share of loss from associates decreased by **81.6%** year-on-year to **HKD 29 million** (June 30, 2024: HKD 158 million)[59](index=59&type=chunk) - This was mainly due to associates making significant inventory impairment provisions in the same period last year, while in the current period, with no further deterioration in real estate market performance, associates did not make substantial inventory impairment provisions[59](index=59&type=chunk) [Share of Results of Joint Ventures](index=22&type=section&id=%E6%87%89%E4%BD%94%E5%90%88%E7%87%9F%E5%85%AC%E5%8F%B8%E6%A5%AD%E7%B8%BE) The Group's share of profit from joint ventures decreased by 85.9% year-on-year to HKD 10 million, primarily due to concentrated deliveries by joint ventures in the prior year leading to higher profits, while the scale of real estate projects recognized in the current period decreased - The Group's share of profit from joint ventures decreased by **85.9%** year-on-year to **HKD 10 million** (June 30, 2024: HKD 71 million)[60](index=60&type=chunk) - This was mainly due to concentrated deliveries by joint ventures in the same period last year, while the scale of real estate projects recognized by joint ventures decreased during the period[60](index=60&type=chunk) [Loss for the Period](index=22&type=section&id=%E6%9C%9F%E5%85%A7%E虧%E6%90%8D) Considering all factors, the Group recorded a net loss of HKD 580 million for the period, with loss attributable to equity holders of the Company at HKD 585 million, and basic loss per share at 17.49 HK cents Loss for the Period Data | Indicator | June 30, 2025 (HKD) | June 30, 2024 (HKD) | | :--- | :--- | :--- | | Net loss | 580 million | 1.05 billion | | Loss attributable to equity holders of the Company | 585 million | 1.044 billion | | Basic loss per share (HK cents) | 17.49 | 31.21 | [Financial Position](index=22&type=section&id=%E8%B2%A1%E5%8B%99%E7%8A%B6%E6%B3%81) As of June 30, 2025, the Group's total assets decreased by 4.0% to HKD 39.372 billion, and net assets decreased by 3.1% to HKD 8.969 billion; the asset-liability ratio was 77.2%, and the net gearing ratio increased by 12.1 percentage points to 215.4% Financial Position Key Indicators | Indicator | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Total assets | HKD 39.372 billion | HKD 41.031 billion | -4.0% | | Net assets | HKD 8.969 billion | HKD 9.257 billion | -3.1% | | Asset-liability ratio | 77.2% | 77.4% | -0.2 percentage points | | Asset-liability ratio excluding contract liabilities and deferred income | 72.9% | 76.4% | -3.5 percentage points | | Net gearing ratio | 215.4% | 203.3% | +12.1 percentage points | - The decrease in net assets was mainly due to the loss attributable to equity holders of the Company of **HKD 585 million** during the period; however, the increase in RMB exchange rate and financial assets measured at fair value through other comprehensive income increased the Group's net assets by **HKD 254 million** during the period[62](index=62&type=chunk) [Liquidity and Financial Resources](index=23&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's working capital primarily comes from operating cash flow and borrowings; during the period, it successfully signed a RMB 1 billion dim sum bond and renewed a RMB 490 million revolving loan, actively adjusting its borrowing structure; as of June 30, 2025, total borrowings were HKD 21.309 billion, cash and bank deposits were HKD 1.983 billion, and unutilized bank financing facilities amounted to HKD 3.615 billion - The Group signed a **RMB 1 billion** dim sum bond and successfully renewed a **RMB 490 million** revolving loan during the period[64](index=64&type=chunk) - The Group actively adjusted its borrowing structure, increasing the proportion of RMB loans and reducing the scale of offshore loans, while actively reducing the overall loan scale[64](index=64&type=chunk) Borrowings Maturity Profile | Maturity Period | June 30, 2025 (HKD million) | Proportion (%) | December 31, 2024 (HKD million) | Proportion (%) | | :--- | :--- | :--- | :--- | :--- | | Within one year | 14,614 | 68.6% | 16,295 | 75.2% | | Second year | 4,815 | 22.6% | 4,315 | 19.9% | | Third to fifth year | 1,488 | 7.0% | 743 | 3.4% | | Over five years | 392 | 1.8% | 330 | 1.5% | | **Total** | **21,309** | **100.0%** | **21,683** | **100.0%** | Borrowings Currency Composition | Currency | June 30, 2025 (HKD million) | Proportion (%) | December 31, 2024 (HKD million) | Proportion (%) | | :--- | :--- | :--- | :--- | :--- | | RMB | 10,105 | 47.4% | 10,521 | 48.5% | | HKD | 8,800 | 41.3% | 8,785 | 40.5% | | USD | 2,404 | 11.3% | 2,377 | 11.0% | | **Total** | **21,309** | **100.0%** | **21,683** | **100.0%** | - As of June 30, 2025, the Group had cash and bank deposits of **HKD 1.983 billion** (December 31, 2024: HKD 2.822 billion), of which **71.0% was in RMB**, **23.2% in HKD**, and **5.8% in USD**[66](index=66&type=chunk) - The Group's unutilized bank financing facilities amounted to **HKD 3.615 billion** as of June 30, 2025 (December 31, 2024: HKD 4.089 billion)[66](index=66&type=chunk) [Exchange Rate and Interest Rate Fluctuation Risks](index=24&type=section&id=%E5%8C%AF%E7%8E%87%E5%8F%8A%E5%88%A9%E7%8E%87%E6%B3%A2%E5%8B%95%E9%A2%A8%E9%99%AA) The Group faces exchange rate and interest rate fluctuation risks; to mitigate these, the company adjusts its foreign currency borrowing proportion, uses exchange rate hedging instruments, and enters into interest rate swap agreements to manage floating-rate borrowings [Exchange Rate Risk](index=24&type=section&id=%E5%8C%AF%E7%8E%87%E9%A2%A8%E9%99%AA) The Group's primary operations are in Mainland China, with revenue mainly in RMB and external financing primarily in HKD, exposing it to exchange rate fluctuation risks; the company mitigates this by adjusting foreign currency borrowing proportions and using hedging instruments like forward foreign exchange contracts - The Group's primary business is in Mainland China, with external financing mainly in HKD and revenue mainly in RMB, exposing it to exchange rate fluctuation risks[67](index=67&type=chunk) - The Group reduces the impact of exchange rate fluctuations by adjusting the proportion of foreign currency borrowings and using exchange rate hedging instruments (such as forward foreign exchange contracts or capped forward contracts)[67](index=67&type=chunk) [Interest Rate Risk](index=24&type=section&id=%E5%88%A9%E7%8E%87%E9%A2%A8%E9%99%AA) Most of the Group's borrowings are interest-bearing at floating rates; to mitigate interest rate risk, it has entered into interest rate swap agreements to pay fixed interest on a notional amount of HKD 800 million in borrowings; as of June 30, 2025, 42.1% of borrowings were interest-bearing at fixed rates - Most of the Group's borrowings are interest-bearing at floating rates, and an increase in interest rates would raise finance costs[68](index=68&type=chunk) - To mitigate interest rate risk, the Group has entered into interest rate swap agreements to pay fixed interest monthly on a notional amount of **HKD 800 million**[68](index=68&type=chunk) - As of June 30, 2025, **42.1%** (December 31, 2024: 41.3%) of the Group's borrowings were interest-bearing at fixed rates[68](index=68&type=chunk) [Pledges of Group Assets](index=25&type=section&id=%E9%9B%86%E5%9C%98%E8%B3%87%E7%94%A2%E6%8A%B5%E6%8A%BC) As of June 30, 2025, the Group pledged inventories with a carrying amount of HKD 3.682 billion, property, plant and equipment of HKD 570 million, investment properties of HKD 523 million, and 100% equity interest in a subsidiary as collateral for bank credit facilities and mortgage loans Pledged Assets | Asset Type | June 30, 2025 (HKD billion) | December 31, 2024 (HKD billion) | | :--- | :--- | :--- | | Inventories | 3.682 | 4.265 | | Property, plant and equipment | 0.570 | 0.312 | | Investment properties | 0.523 | 0.317 | | 100% equity interest in a subsidiary | - | - | [Financial Guarantees and Contingent Liabilities](index=25&type=section&id=%E8%B2%A1%E5%8B%99%E6%93%94%E4%BF%9D%E5%8F%8A%E6%88%96%E7%84%B6%E8%B2%A0%E5%82%B5) As of June 30, 2025, the Group provided bank guarantees of HKD 3.938 billion for mortgage financing granted to property purchasers; the directors consider the fair value of these financial guarantees not to be material - As of June 30, 2025, guarantees provided to banks for mortgage financing granted to purchasers of the Group's properties amounted to **HKD 3.938 billion** (December 31, 2024: HKD 4.681 billion)[69](index=69&type=chunk) - These guarantees will terminate upon the issuance of property ownership certificates or repayment of mortgage loans by the purchasers[69](index=69&type=chunk) - The directors consider the fair value of the financial guarantees not to be material at initial recognition and at the end of each subsequent reporting period[69](index=69&type=chunk) [Employees](index=25&type=section&id=%E5%83%B1%E5%93%A1) As of June 30, 2025, the Group's total number of employees (including directors) decreased by 6.3% to 926; total remuneration and benefits for directors and employees amounted to HKD 141 million during the period - As of June 30, 2025, the Group's total number of employees (including directors) decreased by **6.3%** to **926** (June 30, 2024: 988)[70](index=70&type=chunk) - For the six months ended June 30, 2025, the total remuneration and benefits for the Group's directors and employees amounted to **HKD 141 million** (June 30, 2024: HKD 167 million)[70](index=70&type=chunk) [Other Information](index=25&type=section&id=%E5%85%B6%E4%BB%96%E4%BF%A1%E6%81%AF) [Corporate Governance](index=25&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB) The Company complied with the Corporate Governance Code in Appendix C1 of the Listing Rules for the six months ended June 30, 2025, except for code provisions B.2.2 (Chairman and Managing Director not subject to retirement by rotation), C.2.1 (Chairman also Executive Director), and F.1.3 (Chairman unable to attend AGM) - The Company has complied with the code provisions set out in the Corporate Governance Code in Appendix C1 of the Listing Rules for the six months ended June 30, 2025[71](index=71&type=chunk) - Deviations include: the Chairman and Managing Director are not required to retire by rotation; Mr. He Jianbo, an executive director, also serves as the Chairman of the Board; and Chairman Mr. He Jianbo was unable to attend the Annual General Meeting due to other work arrangements[71](index=71&type=chunk)[73](index=73&type=chunk) [Code for Securities Transactions by Directors](index=26&type=section&id=%E8%91%A3%E4%BA%8B%E9%80%B2%E8%A1%8C%E8%AD%89%E5%88%B8%E4%BA%A4%E6%98%93%E4%B9%8B%E5%AE%88%E5%89%87) The Company has established a code for securities transactions, and all directors have confirmed their compliance with this code for the six months ended June 30, 2025 - The Company has established a set of guidelines, "Rules and Procedures for Securities Transactions by Directors and Relevant Employees of the Company," whose provisions are no less stringent than the Model Code set out in Appendix C3 of the Listing Rules[74](index=74&type=chunk) - All directors have confirmed their compliance with the Code for Securities Transactions for the six months ended June 30, 2025[74](index=74&type=chunk) [Review by Audit Committee](index=26&type=section&id=%E5%AF%A9%E6%A0%B8%E5%A7%94%E5%93%A1%E6%9C%83%E4%B9%8B%E5%AF%A9%E9%96%B1%E5%B7%A5%E4%BD%9C) The Company's Audit Committee has reviewed the Group's unaudited interim condensed consolidated financial statements for the six months ended June 30, 2025, and Deloitte Touche Tohmatsu, the independent auditor, has also reviewed these statements in accordance with Hong Kong Standard on Review Engagements 2410 - The Company's Audit Committee has reviewed the Group's unaudited interim condensed consolidated financial statements for the six months ended June 30, 2025[75](index=75&type=chunk) - Deloitte Touche Tohmatsu, the independent auditor, has also reviewed these financial statements in accordance with Hong Kong Standard on Review Engagements 2410 issued by the Hong Kong Institute of Certified Public Accountants[75](index=75&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=27&type=section&id=%E8%B3%BC%E8%B2%B7%E3%80%81%E5%87%BA%E5%94%AE%E6%88%96%E8%B4%96%E5%9B%9E%E6%9C%AC%E5%85%AC%E5%8F%B8%E4%B8%8A%E5%B8%82%E8%AD%89%E5%88%B8) Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the six months ended June 30, 2025 - Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the six months ended June 30, 2025[76](index=76&type=chunk) [Board of Directors](index=27&type=section&id=%E8%91%A3%E4%BA%8B%E6%9C%83) As of the date of this announcement, the Board of Directors comprises nine directors, including Mr. He Jianbo as Chairman and Executive Director, three other Executive Directors, two Non-executive Directors, and three Independent Non-executive Directors - As of the date of this announcement, the Board of Directors comprises nine directors, including Mr. He Jianbo as Chairman and Executive Director, Mr. Dai Pengyu, Mr. Chen Xingwu, and Mr. Yang Shangping as Executive Directors, Ms. He Xiaoli and Mr. Huang Guoping as Non-executive Directors, and Ms. Lo Fan Chiu Fun, Professor Wang Xiuli, and Mr. Su Luming as Independent Non-executive Directors[77](index=77&type=chunk)

[Unaudited Interim Results Announcement](index=1&type=section&id=Unaudited%20Interim%20Results%20Announcement) This section presents the unaudited interim results announcement for the six months ended June 30, 2025, including comparative figures for 2024 [Announcement Details](index=1&type=section&id=Announcement%20Details) The Board of Directors of Zhongqing Environment Co., Ltd. (Stock Code: 1855) announces the unaudited interim results for the six months ended June 30, 2025, with comparative figures for the six months ended June 30, 2024 - This announcement publishes the unaudited interim results of Zhongqing Environment Co., Ltd. for the six months ended June 30, 2025[2](index=2&type=chunk) [Consolidated Statement of Profit or Loss](index=2&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss) This section provides an overview of the company's financial performance, highlighting changes in revenue, gross profit, and profit for the period [Profit or Loss Overview](index=2&type=section&id=Profit%20or%20Loss%20Overview) For the six months ended June 30, 2025, the company experienced a slight decrease in revenue, with both gross profit and profit for the period declining, reflecting macroeconomic pressures and increased industry competition Consolidated Statement of Profit or Loss Key Data (Six Months Ended June 30) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 761,932 | 775,648 | -1.8% | | Cost of sales | (610,937) | (600,287) | 1.8% | | Gross profit | 150,995 | 175,361 | -13.9% | | Operating profit | 73,889 | 72,036 | 2.6% | | Profit before tax | 40,483 | 47,141 | -14.1% | | Profit for the period | 36,332 | 43,412 | -16.3% | | Profit attributable to equity holders of the Company | 29,333 | 34,259 | -14.4% | | Basic and diluted earnings per share (RMB cents) | 4 | 4 | 0.0% | [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=3&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) This section details the total comprehensive income for the period, reflecting changes from profit for the period and other comprehensive income components [Comprehensive Income Overview](index=3&type=section&id=Comprehensive%20Income%20Overview) For the six months ended June 30, 2025, total comprehensive income for the period decreased to RMB 35,592 thousand from RMB 43,916 thousand in the prior year, primarily due to reduced profit for the period and changes in other comprehensive income Consolidated Statement of Comprehensive Income Key Data (Six Months Ended June 30) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Profit for the period | 36,332 | 43,412 | -16.3% | | Other comprehensive income for the period | (740) | 504 | -246.0% | | Total comprehensive income for the period | 35,592 | 43,916 | -19.0% | | Total comprehensive income attributable to equity holders of the Company | 28,593 | 34,763 | -17.7% | - Net change in fair value reserve for equity investments at fair value through other comprehensive income was **RMB (33) thousand** (2024: RMB 66 thousand), and exchange differences on translating financial statements of overseas companies were **RMB (707) thousand** (2024: RMB 438 thousand)[5](index=5&type=chunk) [Consolidated Statement of Financial Position](index=4&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) This section presents the company's financial position, detailing assets, liabilities, and equity, and highlighting improvements in financial structure [Financial Position Overview](index=4&type=section&id=Financial%20Position%20Overview) As of June 30, 2025, the Group's total assets and total equity both increased, net current assets rose, and the gearing ratio decreased, indicating an improved financial structure Consolidated Statement of Financial Position Key Data (As of June 30) | Indicator | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Non-current assets | 487,185 | 483,674 | 0.7% | | Current assets | 4,026,934 | 3,899,855 | 3.3% | | Current liabilities | 3,687,085 | 3,578,496 | 3.0% | | Net current assets | 339,849 | 321,359 | 5.7% | | Total assets less current liabilities | 827,034 | 805,033 | 2.7% | | Non-current liabilities | 6,154 | 9,841 | -37.5% | | Net assets | 820,880 | 795,192 | 3.2% | | Total equity | 820,880 | 795,192 | 3.2% | - Among current assets, contract assets increased to **RMB 1,149,451 thousand** (December 31, 2024: RMB 1,132,150 thousand), while trade and bills receivables slightly decreased to **RMB 2,282,587 thousand** (December 31, 2024: RMB 2,301,133 thousand)[7](index=7&type=chunk) - Among current liabilities, trade and bills payables significantly decreased to **RMB 1,285,561 thousand** (December 31, 2024: RMB 1,578,145 thousand), while contract liabilities substantially increased to **RMB 1,105,062 thousand** (December 31, 2024: RMB 726,695 thousand)[9](index=9&type=chunk) [Notes to the Interim Financial Information](index=7&type=section&id=Notes%20to%20the%20Interim%20Financial%20Information) This section provides detailed explanatory notes supporting the interim financial statements, covering accounting policies, segment reporting, and financial performance components [1. Basis of Preparation](index=7&type=section&id=1.%20Basis%20of%20Preparation) The interim financial information is prepared in accordance with HKEX Listing Rules and IAS 34, using consistent accounting policies as the 2024 annual financial statements, and was authorized for issue on August 21, 2025 - The interim financial report is prepared in accordance with International Accounting Standard 34 and was authorized for issue on August 21, 2025[12](index=12&type=chunk) - The interim financial information comprises condensed consolidated financial statements and selected explanatory notes, not including all information required for complete financial statements[12](index=12&type=chunk) - The statutory financial statements for the financial year ended December 31, 2024, received an unqualified opinion from the auditor[13](index=13&type=chunk) [2. Changes in Accounting Policies](index=8&type=section&id=2.%20Changes%20in%20Accounting%20Policies) The Group adopted IAS 21 (Amendment) 'The Effects of Changes in Foreign Exchange Rates – Lack of Exchangeability,' which had no material impact on interim financial information as the Group is not involved in transactions with non-exchangeable foreign currencies - The Group has applied International Accounting Standard 21 (Amendment) 'The Effects of Changes in Foreign Exchange Rates – Lack of Exchangeability'[14](index=14&type=chunk) - This amendment had no material impact on the interim financial information as the Group is not involved in foreign currency transactions that cannot be exchanged into another currency[14](index=14&type=chunk) [3. Revenue and Segment Reporting](index=8&type=section&id=3.%20Revenue%20and%20Segment%20Reporting) The Group manages its business across four reportable segments: urban renewal, urban operations and maintenance, urban planning and design, and cultural tourism, with significant growth in cultural tourism revenue and a decline in urban renewal services - The Group's business is divided into four reportable segments: urban renewal services, urban operations and maintenance services, urban planning and design services, and cultural tourism[18](index=18&type=chunk) - The cultural tourism segment generated revenue in 2024 and is expected to contribute to stable cash flow and diversify the business portfolio[17](index=17&type=chunk) [3(a) Revenue Breakdown](index=9&type=section&id=3%28a%29%20Revenue%20Breakdown) Revenue from urban renewal services decreased, while urban operations and maintenance, urban planning and design, and cultural tourism services all saw increases, with cultural tourism showing the largest growth Revenue Breakdown by Major Product or Service (Six Months Ended June 30) | Segment | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Urban Renewal Services | 580,505 | 613,016 | -5.3% | | Urban Operations and Maintenance Services | 121,635 | 115,586 | 5.2% | | Urban Planning and Design Services | 42,841 | 39,015 | 9.8% | | Cultural Tourism | 16,951 | 8,031 | 111.1% | | **Total** | **761,932** | **775,648** | **-1.8%** | [3(b) Segment Reporting](index=9&type=section&id=3%28b%29%20Segment%20Reporting) Segment results are measured by gross profit, with urban renewal services and cultural tourism experiencing a decrease in gross profit, and all Group revenue originating from mainland China - Reportable segment results are measured by gross profit, and the chief executive officer monitors the Group's overall assets and liabilities[21](index=21&type=chunk) Reportable Segment Gross Profit (Six Months Ended June 30) | Segment | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Urban Renewal Services | 117,940 | 143,449 | -17.7% | | Urban Operations and Maintenance Services | 21,476 | 21,934 | -2.1% | | Urban Planning and Design Services | 6,217 | 3,867 | 60.8% | | Cultural Tourism | 5,362 | 6,111 | -12.3% | | **Total** | **150,995** | **175,361** | **-13.9%** | - All of the Group's revenue is derived from the People's Republic of China ('China'), with no significant assets or operations outside China[25](index=25&type=chunk) [4. Profit Before Tax](index=12&type=section&id=4.%20Profit%20Before%20Tax) Profit before tax is determined after deducting finance costs and other items, with finance costs significantly increasing and notable changes in research and development and inventory costs Finance Costs (Six Months Ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Interest on bank and other loans and related party loans | 31,578 | 24,847 | 27.1% | | Interest on lease liabilities | 110 | 113 | -2.7% | | **Total** | **31,688** | **24,960** | **26.9%** | Other Items (Six Months Ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Depreciation of property, plant and equipment | 4,429 | 4,773 | -7.2% | | Depreciation of right-of-use assets | 2,308 | 2,687 | -14.1% | | Amortization of intangible assets | 901 | 381 | 136.5% | | Short-term lease and low-value asset lease expenses | 7,021 | 8,131 | -13.6% | | Research and development costs | 52,264 | 36,677 | 42.5% | | Inventory costs | 176,987 | 242,873 | -27.1% | [5. Income Tax](index=12&type=section&id=5.%20Income%20Tax) The Group's income tax increased from RMB 3.7 million to RMB 4.2 million, primarily due to a reduced deferred tax credit from lower credit losses, with Chinese subsidiaries subject to a 25% corporate income tax rate, and some high-tech enterprises enjoying a 15% preferential rate and 100% additional deductible tax credit for R&D costs Income Tax (Six Months Ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Current tax | 9,575 | 14,102 | -32.1% | | Deferred tax | (5,424) | (10,373) | -47.7% | | **Total** | **4,151** | **3,729** | **11.3%** | - Hong Kong subsidiaries are subject to a **16.5% profits tax rate**, but had no assessable profits during the period[28](index=28&type=chunk) - Chinese subsidiaries are subject to a **25% corporate income tax rate**, with four high-tech enterprises enjoying a **15% preferential tax rate** and a **100% additional deductible tax credit** for eligible R&D costs[28](index=28&type=chunk) [6. Earnings Per Share](index=13&type=section&id=6.%20Earnings%20Per%20Share) Basic earnings per share remained stable at RMB 4 cents for the six months ended June 30, 2025, with diluted earnings per share being identical due to the absence of potentially dilutive shares Basic Earnings Per Share (Six Months Ended June 30) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Profit attributable to equity holders of the Company (RMB thousands) | 29,333 | 34,259 | | Number of ordinary shares issued (shares) | 825,000,000 | 825,000,000 | | Basic earnings per share (RMB cents) | 4 | 4 | - Effective August 1, 2024, the company's shares underwent a subdivision, with each share of HK$0.001 par value split into three subdivided shares of HK$0.0003 par value, adjusting the number of issued ordinary shares to **825,000,000 shares**[29](index=29&type=chunk) - There were no potentially dilutive shares outstanding for the six months ended June 30, 2025, and 2024, thus diluted earnings per share were the same as basic earnings per share[30](index=30&type=chunk) [7. Contract Assets and Contract Liabilities](index=14&type=section&id=7.%20Contract%20Assets%20and%20Contract%20Liabilities) Total contract assets increased, primarily from receivables from third parties, while contract liabilities grew significantly due to increased amounts payable to third parties, with most expected to be billed or recognized as revenue within one year Contract Assets (As of June 30) | Item | 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Receivables from third parties | 1,195,481 | 1,168,054 | 2.3% | | Less: Loss allowance | (179,199) | (166,170) | 7.8% | | **Net contract assets** | **1,149,451** | **1,132,150** | **1.5%** | - Contract assets expected to be billed after one year amounted to **RMB 509,304 thousand** (December 31, 2024: RMB 471,056 thousand)[33](index=33&type=chunk) Contract Liabilities (As of June 30) | Item | 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Payables to third parties | 1,075,960 | 695,283 | 54.7% | | **Total** | **1,105,062** | **726,695** | **52.1%** | - All contract liabilities are expected to be recognized as revenue within one year[34](index=34&type=chunk) [8. Trade Receivables and Bills Receivable](index=16&type=section&id=8.%20Trade%20Receivables%20and%20Bills%20Receivable) Total trade and bills receivables slightly decreased, but loss allowance increased, with aging analysis showing the largest proportion within one year, while receivables aged two to three years and over five years increased Trade Receivables (As of June 30) | Item | 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Receivables from third parties | 2,437,137 | 2,433,812 | 0.1% | | Less: Loss allowance | (424,157) | (408,413) | 3.8% | | **Net trade receivables** | **2,283,132** | **2,301,678** | **-0.8%** | Aging Analysis of Trade Receivables and Bills Receivable (As of June 30) | Aging | 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Within one year | 995,621 | 1,014,258 | -1.8% | | One to two years | 646,937 | 719,257 | -10.1% | | Two to three years | 334,395 | 203,285 | 64.5% | | Three to four years | 147,891 | 229,910 | -35.7% | | Four to five years | 55,292 | 47,957 | 15.3% | | Over five years | 102,996 | 87,011 | 18.4% | [9. Trade Payables and Bills Payable](index=17&type=section&id=9.%20Trade%20Payables%20and%20Bills%20Payable) Total trade and bills payables significantly decreased, mainly due to reduced amounts payable to third parties, with aging analysis showing a substantial drop in payables within one year, while those aged one to three years increased Trade Payables and Bills Payable (As of June 30) | Item | 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Payables to third parties | 1,183,053 | 1,496,232 | -20.9% | | Bills payable | 19,500 | 9,500 | 105.3% | | **Total** | **1,285,561** | **1,578,145** | **-18.6%** | Aging Analysis of Trade Payables and Bills Payable (As of June 30) | Aging | 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Within one year | 297,827 | 721,926 | -58.7% | | One to three years | 858,080 | 713,244 | 20.3% | | Over three years | 129,654 | 142,975 | -9.2% | - All trade and bills payables are expected to be settled or repaid on demand within one year[41](index=41&type=chunk) [10. Dividends](index=18&type=section&id=10.%20Dividends) The Board does not recommend paying a dividend for the first half of 2025, contrasting with the prior year when a final dividend of RMB 0.071 per share was declared - The Board does not recommend paying a dividend for the six months ended June 30, 2025 (first half of 2024: nil HKD)[42](index=42&type=chunk) - For the six months ended June 30, 2024, a final dividend of **RMB 0.071 per share** was declared for the year ended December 31, 2023, totaling **RMB 19,747 thousand**[42](index=42&type=chunk) [Management Discussion and Analysis](index=19&type=section&id=Management%20Discussion%20and%20Analysis) This section provides management's perspective on the Group's operational performance, financial condition, strategic initiatives, and future outlook [Business Overview and Strategy](index=19&type=section&id=Business%20Overview%20and%20Strategy) In the first half of 2025, the Group continued to develop its four core businesses—urban renewal, operations and maintenance, planning and design, and cultural tourism—implementing a national development strategy focused on enhancing competitiveness through quality rather than quantity of bids, resulting in increased bid submissions but a lower success rate, with new contract value of approximately RMB 715.26 million - The Group continues to consolidate and expand its urban renewal services, urban operations and maintenance services, urban planning and design services, and cultural tourism businesses[44](index=44&type=chunk) - In the first half of 2025, **427 bids were submitted**, with a successful bid rate of approximately **18.97%**, and new project contract value of approximately **RMB 715.26 million**[44](index=44&type=chunk) - The decrease in the successful bid rate reflects the Group's more cautious and quality-focused bidding strategy, prioritizing project quality[44](index=44&type=chunk) - The Group achieved **7 invention patents**, **15 utility model patents**, and **3 software copyrights** in technological innovation, enhancing the commercialization of core technological achievements[45](index=45&type=chunk)[46](index=46&type=chunk) [Risk Management](index=20&type=section&id=Risk%20Management) The Group's management assists the Board in assessing significant risks and implementing risk management and internal control measures, with no material internal control deficiencies identified in financial reporting for the first half of 2025 - Management assesses significant risks such as investment risk, interest rate risk, and liquidity risk, and formulates risk management and internal control measures[47](index=47&type=chunk) - There were no material internal control deficiencies in financial reporting for the first half of 2025[47](index=47&type=chunk) [Outlook](index=20&type=section&id=Outlook) New orders decreased in the first half due to macroeconomic conditions, local finances, and intensified industry competition; however, China's economic resilience and supportive national policies for urban renewal and infrastructure investment offer growth opportunities, with local debt optimization expected to ease financial pressure in the second half as the Group focuses on 'urban ecology + infrastructure + cultural tourism landscape' - In the first half of 2025, the number and contract value of new orders decreased due to multiple factors, including the macroeconomic environment, local government finances, and intensified industry competition[48](index=48&type=chunk) - China's GDP grew by **5.3% year-on-year**, infrastructure investment increased by **4.6% year-on-year**, with urban renewal and renovation of old residential areas being key focus areas[48](index=48&type=chunk) - National policies supporting 'urban renewal actions' and urban village renovation provide broad development space for the Group's business[48](index=48&type=chunk)[50](index=50&type=chunk) - Looking ahead to the second half, optimization of local government debt and the implementation of special bonds are expected to alleviate financial pressure, and the Group will continue to focus on the three major directions of 'urban ecology + infrastructure + cultural tourism landscape'[49](index=49&type=chunk)[50](index=50&type=chunk) [Financial Review](index=21&type=section&id=Financial%20Review) The Group's revenue slightly decreased by 1.8% in the first half, with gross profit down 13.9%, driven by reduced urban renewal service revenue and growth in urban operations and maintenance, urban planning and design, and cultural tourism, alongside increased selling expenses, decreased impairment losses, and higher finance costs [Revenue](index=21&type=section&id=Revenue) The Group's revenue slightly decreased by 1.8% to approximately RMB 761.9 million in the first half of 2025 from RMB 775.6 million in the first half of 2024, primarily due to macroeconomic fluctuations, increased industry competition, and fewer newly approved large contracts Revenue Changes (Six Months Ended June 30) | Indicator | 2025 (RMB millions) | 2024 (RMB millions) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 761.9 | 775.6 | -1.8% | - The decrease in revenue was primarily due to macroeconomic fluctuations, intensified industry competition, and a reduction in the number and value of newly approved large contracts[51](index=51&type=chunk) [Urban Renewal Services](index=21&type=section&id=Urban%20Renewal%20Services) Revenue from urban renewal services decreased by 5.3% to RMB 580.5 million, primarily due to fewer newly approved large contracts, reduced contract values, and a decline in average revenue recognized per contract Urban Renewal Services Revenue Changes (Six Months Ended June 30) | Indicator | 2025 (RMB millions) | 2024 (RMB millions) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 580.5 | 613.0 | -5.3% | - The decrease in revenue was primarily attributable to a reduction in the number and value of newly approved large contracts, as well as a decline in the average revenue recognized per contract[52](index=52&type=chunk) [Urban Operations and Maintenance Services](index=21&type=section&id=Urban%20Operations%20and%20Maintenance%20Services) Revenue from urban operations and maintenance services increased by 5.2% to RMB 121.6 million, primarily driven by national policy guidance and industry trends leading to an increase in the number of projects undertaken Urban Operations and Maintenance Services Revenue Changes (Six Months Ended June 30) | Indicator | 2025 (RMB millions) | 2024 (RMB millions) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 121.6 | 115.6 | 5.2% | - The revenue growth was primarily attributable to an increase in the number of urban operations and maintenance projects undertaken, driven by national policy guidance and industry development trends[53](index=53&type=chunk) [Urban Planning and Design Services](index=22&type=section&id=Urban%20Planning%20and%20Design%20Services) Revenue from urban planning and design services increased by 9.8% to RMB 42.8 million, primarily due to the steady release of existing orders in line with project progress Urban Planning and Design Services Revenue Changes (Six Months Ended June 30) | Indicator | 2025 (RMB millions) | 2024 (RMB millions) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 42.8 | 39.0 | 9.8% | - The increase in revenue was primarily due to the steady release of existing orders in line with project progress[54](index=54&type=chunk) [Cultural Tourism](index=22&type=section&id=Cultural%20Tourism) Cultural tourism revenue significantly increased by 112.5% to RMB 17.0 million, primarily benefiting from the Group's enhanced online marketing, membership system operations, and data-driven decision-making, improving customer acquisition efficiency and experience Cultural Tourism Revenue Changes (Six Months Ended June 30) | Indicator | 2025 (RMB millions) | 2024 (RMB millions) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 17.0 | 8.0 | 112.5% | - The revenue growth primarily benefited from the Group's increased investment in online marketing, membership system operations, and data-driven decision-making, enhancing customer acquisition efficiency, management levels, and customer experience[55](index=55&type=chunk) [Gross Profit and Gross Margin](index=22&type=section&id=Gross%20Profit%20and%20Gross%20Margin) Gross profit decreased by 13.9% from RMB 175.4 million to RMB 151.0 million, primarily due to reduced operating revenue caused by slowing market demand and intensified industry competition Gross Profit Changes (Six Months Ended June 30) | Indicator | 2025 (RMB millions) | 2024 (RMB millions) | Change (%) | | :--- | :--- | :--- | :--- | | Gross profit | 151.0 | 175.4 | -13.9% | - The decrease in gross profit was mainly due to slowing market demand and intensified industry competition, leading to reduced operating revenue[56](index=56&type=chunk) [Net Other Income](index=22&type=section&id=Net%20Other%20Income) Net other income decreased by 47.2% to RMB 3.8 million, primarily due to lower interest income Net Other Income Changes (Six Months Ended June 30) | Indicator | 2025 (RMB millions) | 2024 (RMB millions) | Change (%) | | :--- | :--- | :--- | :--- | | Net other income | 3.8 | 7.2 | -47.2% | - The decrease was primarily due to lower interest income[57](index=57&type=chunk) [Selling Expenses](index=22&type=section&id=Selling%20Expenses) Selling expenses increased by 17.6% to RMB 14.7 million, primarily due to the Group's increased resource allocation for market promotion and channel development to expand market share and new businesses, such as cultural tourism Selling Expenses Changes (Six Months Ended June 30) | Indicator | 2025 (RMB millions) | 2024 (RMB millions) | Change (%) | | :--- | :--- | :--- | :--- | | Selling expenses | 14.7 | 12.5 | 17.6% | - The increase was primarily due to the Group's increased resource allocation for market promotion and channel development to expand market share and new businesses (such as cultural tourism and other fields)[58](index=58&type=chunk) [Administrative Expenses](index=23&type=section&id=Administrative%20Expenses) Administrative expenses remained relatively stable at approximately RMB 37.4 million Administrative Expenses Changes (Six Months Ended June 30) | Indicator | 2025 (RMB millions) | 2024 (RMB millions) | Change (%) | | :--- | :--- | :--- | :--- | | Administrative expenses | 37.4 | 38.0 | -1.6% | [Impairment Losses under ECL Model](index=23&type=section&id=Impairment%20Losses%20under%20ECL%20Model) Impairment losses on trade and other receivables and contract assets decreased by 52.0% to RMB 28.8 million, primarily due to improved financial conditions of key clients, faster collections, and the Group's optimization of accounts receivable management and increased contract prepayment ratios Impairment Losses Changes (Six Months Ended June 30) | Indicator | 2025 (RMB millions) | 2024 (RMB millions) | Change (%) | | :--- | :--- | :--- | :--- | | Impairment losses | 28.8 | 60.0 | -52.0% | - The decrease was primarily due to improved financial conditions of the Group's major cooperative clients and accelerated collection speed; concurrently, the Group optimized its accounts receivable collection management mechanism and increased the proportion of contract prepayments, reducing credit risk[60](index=60&type=chunk) [Finance Costs](index=23&type=section&id=Finance%20Costs) Finance costs increased by 26.8% to RMB 31.7 million, primarily due to the Group's additional funding for core project construction and operating cash flow supplementation, leading to an increase in the average balance of bank and other loans Finance Costs Changes (Six Months Ended June 30) | Indicator | 2025 (RMB millions) | 2024 (RMB millions) | Change (%) | | :--- | :--- | :--- | :--- | | Finance costs | 31.7 | 25.0 | 26.8% | - Primarily due to the Group's additional funding used to support core project construction and supplement operating cash flow, which affected the increase in the average balance of bank and other loans[61](index=61&type=chunk) [Share of (Losses)/Profits of Associates](index=23&type=section&id=Share%20of%20%28Losses%29%2FProfits%20of%20Associates) The share of results from associates shifted from a profit to a loss of RMB 1.8 million compared to the prior year, primarily influenced by the performance of Changchun Xianbang and Tianjin Nangang associates Share of (Losses)/Profits of Associates Changes (Six Months Ended June 30) | Indicator | 2025 (RMB millions) | 2024 (RMB millions) | Change (RMB millions) | | :--- | :--- | :--- | :--- | | Share of (losses)/profits of associates | (1.8) | 0.4 | -2.2 | - The Group's share of results from associates decreased from a profit of **RMB 0.4 million** to a loss of **RMB 1.8 million**[63](index=63&type=chunk) - Associates include Changchun Xianbang Municipal Landscape Engineering Co., Ltd. (**50% equity interest**) and Tianjin Nangang Municipal Landscape Engineering Co., Ltd. (**20% equity interest**)[62](index=62&type=chunk)[63](index=63&type=chunk) [Share of Profits/(Losses) of a Joint Venture](index=24&type=section&id=Share%20of%20Profits%2F%28Losses%29%20of%20a%20Joint%20Venture) The share of results from a joint venture shifted from a loss to a profit of RMB 0.1 million compared to the prior year, primarily due to a reduction in the joint venture's expected credit losses Share of Profits/(Losses) of a Joint Venture Changes (Six Months Ended June 30) | Indicator | 2025 (RMB millions) | 2024 (RMB millions) | Change (RMB millions) | | :--- | :--- | :--- | :--- | | Share of profits/(losses) of a joint venture | 0.1 | (0.3) | 0.4 | - This fluctuation was mainly due to a reduction in the expected credit losses of the joint venture (Ulanhot Tianjiao Tianjun Tourism Development Co., Ltd.)[64](index=64&type=chunk) [Income Tax](index=24&type=section&id=Income%20Tax) Income tax increased to RMB 4.2 million, primarily due to a reduction in deferred tax credits resulting from decreased credit losses in the first half of 2025 Income Tax Changes (Six Months Ended June 30) | Indicator | 2025 (RMB millions) | 2024 (RMB millions) | Change (RMB millions) | | :--- | :--- | :--- | :--- | | Income tax | 4.2 | 3.7 | 0.5 | - Primarily due to a reduction in the Group's credit losses in the first half of 2025 compared to the first half of 2024, leading to a decrease in deferred income tax credits[65](index=65&type=chunk) [Net Current Assets](index=24&type=section&id=Net%20Current%20Assets) Net current assets increased by 5.7% to RMB 339.8 million, primarily driven by profit for the period Net Current Assets Changes (As of June 30) | Indicator | June 30, 2025 (RMB millions) | December 31, 2024 (RMB millions) | Change (%) | | :--- | :--- | :--- | :--- | | Net current assets | 339.8 | 321.4 | 5.7% | - The increase was primarily due to profit for the current period[66](index=66&type=chunk) [Liquidity and Financial Resources](index=25&type=section&id=Liquidity%20and%20Financial%20Resources) Cash and cash equivalents decreased to RMB 47.2 million, with total borrowings of approximately RMB 889.5 million, most of which are repayable within one year, and the Group has not breached any loan covenants Liquidity Position (As of June 30) | Indicator | June 30, 2025 (RMB millions) | December 31, 2024 (RMB millions) | Change (%) | | :--- | :--- | :--- | :--- | | Cash and cash equivalents | 47.2 | 122.8 | -61.5% | | Total borrowings | 889.5 | 884.6 | 0.5% | | Borrowings repayable within one year | 889.5 | 882.8 | 0.8% | - Some borrowings are secured and guaranteed by bank deposits of the controlling shareholder, trade receivables, contract assets, and the Group, related parties, or third-party guarantee companies[67](index=67&type=chunk) - As of June 30, 2025, the Group had not breached any loan covenants related to bank and other borrowings[68](index=68&type=chunk) [Gearing Ratio](index=25&type=section&id=Gearing%20Ratio) The gearing ratio decreased from 1.11 times as of December 31, 2024, to 1.08 times as of June 30, 2025, primarily due to an increase in equity value from retained earnings Gearing Ratio Changes (As of June 30) | Indicator | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Gearing ratio | 1.08 times | 1.11 times | -0.03 | - The decrease in the gearing ratio was primarily due to an increase in equity value from retained earnings in the first half of 2025[69](index=69&type=chunk) [Material Acquisitions and Disposals](index=25&type=section&id=Material%20Acquisitions%20and%20Disposals) The Group had no material acquisitions or disposals of subsidiaries, associates, or joint ventures in the first half of 2025 - The Group had no material acquisitions or disposals of subsidiaries, associates, or joint ventures in the first half of 2025[70](index=70&type=chunk) [Material Investments Held](index=25&type=section&id=Material%20Investments%20Held) The Group holds no other material investments apart from the associates and joint ventures disclosed in this announcement - Apart from the Group's associates and joint ventures disclosed in this announcement, the Group holds no other material investments[71](index=71&type=chunk) [Contingent Liabilities](index=25&type=section&id=Contingent%20Liabilities) The Group provides guarantees for bank loans of joint venture Tianjun Tourism and associate Changchun Xianbang, with unamortized balances of financial guarantees issued amounting to RMB 22,775 thousand and RMB 9,513 thousand, respectively, as of June 30, 2025 - The Group provides guarantees for bank loans of joint venture Tianjun Tourism; as of June 30, 2025, the bank loan balance was **RMB 270,000 thousand**, and the Group's guaranteed amount was **RMB 310,000 thousand** (including principal and interest)[72](index=72&type=chunk) - The unamortized balance of financial guarantees issued for Tianjun Tourism was **RMB 22,775 thousand** (December 31, 2024: RMB 24,000 thousand)[73](index=73&type=chunk) - The Group provides guarantees for bank loans of associate Changchun Xianbang; as of June 30, 2025, the bank loan balance was **RMB 106,500 thousand**, and the Group's guaranteed amount was **RMB 330,000 thousand** (including principal and interest)[74](index=74&type=chunk) - The unamortized balance of financial guarantees issued for Changchun Xianbang was **RMB 9,513 thousand** (December 31, 2024: RMB 10,600 thousand)[74](index=74&type=chunk) Financial Guarantees Issued (As of June 30) | Indicator | June 30, 2025 (RMB millions) | December 31, 2024 (RMB millions) | Change (%) | | :--- | :--- | :--- | :--- | | Financial guarantees issued | 32.3 | 34.6 | -6.7% | [Future Plans for Material Investments or Capital Assets](index=26&type=section&id=Future%20Plans%20for%20Material%20Investments%20or%20Capital%20Assets) As of the date of this announcement, the Group has no specific plans regarding material investments or capital assets - As of the date of this announcement, the Group has no specific plans regarding material investments or capital assets[76](index=76&type=chunk) [Other Information](index=27&type=section&id=Other%20Information) This section provides additional disclosures on various corporate matters, including dividends, employee policies, securities transactions, corporate governance, and board composition [Dividends](index=27&type=section&id=Dividends) The Board recommends not declaring an interim dividend for the first half of 2025 - The Board recommends not declaring an interim dividend for the first half of 2025 (first half of 2024: nil)[77](index=77&type=chunk) [Employees and Remuneration Policy](index=27&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the Group had 806 employees, with a 'Remuneration Management Policy' and welfare system in place, and a Remuneration Committee to review compensation policies and structures for directors, senior management, and employees - As of June 30, 2025, the Group had **806 employees**[78](index=78&type=chunk) - The Group has formulated a 'Remuneration Management Policy' and welfare system to establish a systematic remuneration structure and enhance transparency and fairness[78](index=78&type=chunk) - The Remuneration Committee, comprising three independent non-executive directors, is responsible for reviewing the remuneration policies and structures for directors, senior management, and employees[78](index=78&type=chunk) [Purchase, Sale or Redemption of Listed Securities](index=27&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20Listed%20Securities) Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities in the first half of 2025 - Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities in the first half of 2025[79](index=79&type=chunk) [Directors' Securities Transactions](index=27&type=section&id=Directors'%20Securities%20Transactions) The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers and confirms that directors complied with the relevant trading standards and code of conduct in the first half of 2025 - The Company has adopted a code of conduct regarding directors' securities transactions in accordance with the Model Code for Securities Transactions by Directors of Listed Issuers[80](index=80&type=chunk) - Following specific inquiries with each director, the Company is unaware of any non-compliance by directors with the trading standards and their code of conduct regarding securities transactions in the first half of 2025[80](index=80&type=chunk) [Events After Reporting Period](index=27&type=section&id=Events%20After%20Reporting%20Period) No material events occurred between June 30, 2025, and the date of this announcement - No material events occurred between June 30, 2025, and the date of this announcement[81](index=81&type=chunk) [Corporate Governance Practices](index=27&type=section&id=Corporate%20Governance%20Practices) The Company has adopted the Corporate Governance Code set out in Appendix C1 of the Listing Rules and will continue to review and strengthen its corporate governance - The Company has adopted the Corporate Governance Code set out in Appendix C1 of the Listing Rules and will continue to review and strengthen its corporate governance[83](index=83&type=chunk) [Review by Audit Committee](index=28&type=section&id=Review%20by%20Audit%20Committee) The Group's unaudited interim results and interim financial report for the six months ended June 30, 2025, have been reviewed by the Audit Committee - The Group's unaudited interim results and interim financial report for the six months ended June 30, 2025, have been reviewed by the Audit Committee[84](index=84&type=chunk) - The Audit Committee comprises three independent non-executive directors: Mr. Li Guodong (Chairman), Mr. Gao Xiangnong, and Mr. Yin Jun[84](index=84&type=chunk) [Publication of Interim Results Announcement and Interim Report](index=28&type=section&id=Publication%20of%20Interim%20Results%20Announcement%20and%20Interim%20Report) This interim results announcement has been published on the Company's website and the HKEX website, and the interim report will be dispatched to shareholders upon request and posted on the aforementioned websites - This interim results announcement is published on the Company's website (www.zonqing.net) and the HKEX website (www.hkexnews.hk)[85](index=85&type=chunk) - The Company's interim report for the six months ended June 30, 2025, will be dispatched to shareholders upon request and posted on the aforementioned websites in due course[85](index=85&type=chunk) [Board Members](index=28&type=section&id=Board%20Members) As of the announcement date, the Board of Directors comprises executive directors Mr. Liu Haitao (Vice Chairman) and Ms. Wang Yan; non-executive directors Mr. Sun Juqing (Chairman), Ms. Lu Hongyan, and Mr. Shao Zhangguang; and independent non-executive directors Mr. Gao Xiangnong, Mr. Yin Jun, and Mr. Li Guodong - The Board of Directors includes executive directors Mr. Liu Haitao (Vice Chairman) and Ms. Wang Yan[87](index=87&type=chunk) - Non-executive directors include Mr. Sun Juqing (Chairman), Ms. Lu Hongyan, and Mr. Shao Zhangguang[87](index=87&type=chunk) - Independent non-executive directors include Mr. Gao Xiangnong, Mr. Yin Jun, and Mr. Li Guodong[87](index=87&type=chunk)

鍋圈食品 ( 上海 ) 股份有限公司 INTERIM REPORT （於中華人民共和國註冊成立的股份有限公司） Stock Code 股份代號 : 2517 中期報告 2025 INTERIM REPORT GUOQUAN FOOD (SHANGHAI) CO., LTD. CONTENTS 目錄 page | | | 頁次 | | --- | --- | --- | | Corporate Profile | 公司介紹 | 2 | | Corporate Information | 公司資料 | 4 | | Definitions | 釋義 | 7 | | Business Review and Outlook | 業務回顧及展望 | 12 | | Management Discussion and Analysis | 管理層討論及分析 | 21 | | Corporate Governance and Other Information | 企業管治及其他資料 | 32 | | Independent Review Report | 獨立審閱報告 | 42 | | Interim Condensed C ...

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其準確性 或完整性亦不發表任何聲明，並明確表示，概不對因本公告全部或任何部分內容而產生或因倚賴 該等內容而引致的任何損失承擔任何責任。 Simcere Pharmaceutical Group Limited 先聲藥業集團有限公司 （於香港註冊成立的有限公司） （股份代號：2096） 截 至2025年6月30日止六個月中期業績公告 財務摘要 截 至2025年6月30日止六個月，本集團錄得以下未經審核的財務業績： 1 為了對按照香港財務報告準則呈列的財務資料進行補充，本集團亦使用經調整歸屬於本公 司權益股東的利潤作為非香港財務報告準則指標，該指標屬於未經審核性質且並非香港財 務報告準則規定或根據香港財務報告準則呈列。 本集團將經調整歸屬於本公司權益股東的利潤界定為對下列項目作出調整的歸屬於本公司 權益股東的利潤：(i)以公允價值計量且其變動計入損益的金融資產的已變現及未變現虧損 淨額；(ii)以公允價值計量且其變動計入損益的聯營公司的已變現及未變現收益淨額；(iii)贖 回負債的利息費用；及(iv)上述項目的相關所得稅影響。 – 1 – ...

[Financial Performance Summary](index=1&type=section&id=%E8%B2%A1%E5%8B%99%E6%A5%AD%E7%B8%BE%E6%91%98%E8%A6%81) [Operating Performance Summary](index=1&type=section&id=%E7%B6%93%E7%87%9F%E6%A5%AD%E7%B8%BE%E6%91%98%E8%A6%81) Li Ning Company Limited's H1 2025 revenue grew 3.3% to RMB 14.817 billion, with healthy operating cash flow and declared interim dividend, despite a slight gross margin decline H1 2025 Operating Results | Metric | H1 2025 (RMB) | | :--- | :--- | | Revenue | 14.817 billion (up 3.3% YoY) | | Gross Profit Margin | 50% (down 0.4 percentage points) | | Net Operating Cash Inflow | 2.411 billion | | Net Profit Attributable to Equity Holders | 1.737 billion | | Net Profit Margin | 11.7% | | EBITDA Margin | 23.7% | - Working capital remained healthy, with average total working capital accounting for **7.3% of revenue**, and cash conversion cycle stable at **31 days** compared to the same period last year[5](index=5&type=chunk) - The Board resolved to declare an interim dividend of **RMB 33.59 cents per share** for the six months ended June 30, 2025[5](index=5&type=chunk) - Overall retail sell-through (including online and offline) increased by **low single digits** year-on-year, channel inventory also rose by **low single digits** year-on-year, maintaining a healthy inventory turnover and aging structure[5](index=5&type=chunk) [Interim Condensed Consolidated Financial Statements](index=2&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8) [Interim Condensed Consolidated Statement of Profit or Loss](index=2&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%90%8D%E7%9B%8A%E8%A1%A8) For the six months ended June 30, 2025, revenue increased by 3.3% to RMB 14.817 billion, but profit for the period and basic earnings per share decreased, mainly due to higher income tax expense Interim Condensed Consolidated Statement of Profit or Loss (For the six months ended June 30) | Item | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | Revenue | 14,816,763 | 14,345,288 | | Gross Profit | 7,414,803 | 7,235,602 | | Operating Profit | 2,438,485 | 2,401,895 | | Profit before Income Tax | 2,606,516 | 2,613,130 | | Income Tax Expense | (869,094) | (661,098) | | Profit for the Period | 1,737,422 | 1,952,032 | | Basic Earnings Per Share (RMB cents) | 67.43 | 75.80 | | Diluted Earnings Per Share (RMB cents) | 67.19 | 75.49 | [Interim Condensed Consolidated Statement of Comprehensive Income](index=3&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) For the six months ended June 30, 2025, total comprehensive income for the period was RMB 1.696 billion, a decrease from the prior year, primarily due to negative foreign currency translation differences from overseas operations Interim Condensed Consolidated Statement of Comprehensive Income (For the six months ended June 30) | Item | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | Profit for the Period | 1,737,422 | 1,952,032 | | Exchange differences on translation of foreign operations | (41,697) | 12,493 | | Total Comprehensive Income for the Period | 1,695,725 | 1,964,525 | [Interim Condensed Consolidated Statement of Financial Position](index=4&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) As of June 30, 2025, total assets increased to RMB 36.78 billion, with a significant rise in total current assets, mainly driven by a substantial increase in cash and cash equivalents, while total equity and liabilities also increased Interim Condensed Consolidated Statement of Financial Position (As of June 30) | Metric | June 30, 2025 (RMB '000) | Dec 31, 2024 (RMB '000) | | :--- | :--- | :--- | | Total Assets | 36,780,388 | 35,708,406 | | Total Non-current Assets | 14,637,412 | 15,180,164 | | Total Current Assets | 22,142,976 | 20,528,242 | | Total Equity | 27,168,693 | 26,103,689 | | Total Liabilities | 9,611,695 | 9,604,717 | | Cash and Cash Equivalents | 11,798,043 | 7,498,596 | | Inventories | 2,428,290 | 2,598,226 | | Trade Receivables | 1,352,242 | 1,004,591 | | Trade Payables | 1,872,089 | 1,625,132 | [Notes to the Interim Financial Statements](index=6&type=section&id=%E4%B8%AD%E6%9C%9F%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8%E9%99%84%E8%A8%BB) [General Information](index=6&type=section&id=%E4%B8%80%E8%88%AC%E8%B3%87%E6%96%99) The Group primarily engages in brand development, design, manufacturing, retail, and wholesale of sports footwear, apparel, equipment, and accessories in China, with the company incorporated in the Cayman Islands and listed on the HKEX, reporting unaudited interim results in RMB - The Group's principal activities are brand development, design, manufacturing, retail, and wholesale of sports products, primarily in China[10](index=10&type=chunk) - The company is incorporated in the Cayman Islands, its shares are listed on the Hong Kong Stock Exchange, and the interim condensed consolidated results are presented in RMB and are unaudited[10](index=10&type=chunk)[11](index=11&type=chunk)[12](index=12&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 should be read with the 2024 annual consolidated financial statements; the revised IAS 21, applied for the first time this period, had no impact due to the Group's convertible transaction currencies - The interim condensed consolidated financial information is prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting'[13](index=13&type=chunk) - The revised International Accounting Standard 21 'Lack of Exchangeability' was first applied during this period, but as all the Group's transaction currencies are convertible, this revision had no impact on the interim condensed consolidated financial information[14](index=14&type=chunk)[15](index=15&type=chunk) [Segment Information and Revenue](index=7&type=section&id=%E5%88%86%E9%83%A8%E8%B3%87%E6%96%99%E5%8F%8A%E6%94%B6%E5%85%A5) The Group operates a single business segment primarily in China; H1 2025 revenue saw footwear as the largest contributor and equipment/accessories as the fastest-growing product category, while franchised dealers and e-commerce were key sales channels, with e-commerce growing fastest - The Group has only one reportable segment, with its primary market in China, and revenue from overseas customers not exceeding **10%**[16](index=16&type=chunk) Revenue Breakdown by Product Category (For the six months ended June 30) | Product Category | 2025 (RMB '000) | % of Total Revenue | 2024 (RMB '000) | % of Total Revenue | Revenue Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Footwear | 8,230,716 | 55.6 | 7,844,159 | 54.7 | 4.9 | | Apparel | 5,192,797 | 35.0 | 5,375,222 | 37.5 | (3.4) | | Equipment and Accessories | 1,393,250 | 9.4 | 1,125,907 | 7.8 | 23.7 | | Total | 14,816,763 | 100.0 | 14,345,288 | 100.0 | 3.3 | Revenue Breakdown by Sales Channel (For the six months ended June 30) | Sales Channel | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | Sales to Franchised Dealers | 6,883,188 | 6,590,009 | | Directly Operated Sales | 3,383,162 | 3,502,705 | | E-commerce Channel Sales | 4,300,337 | 4,004,262 | | Other Regions | 250,076 | 248,312 | | Total | 14,816,763 | 14,345,288 | [Other Income and Other Gains – Net](index=8&type=section&id=%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5%E5%8F%8A%E5%85%B6%E4%BB%96%E6%94%B6%E7%9B%8A%EF%BC%8D%E6%B7%A8%E9%A1%8D) H1 2025 other income and other gains, net, decreased significantly to RMB 93.90 million, primarily due to an RMB 106 million impairment loss on investment properties and changes in government grants and royalty income Other Income and Other Gains – Net (For the six months ended June 30) | Item | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | Government grants | 173,673 | 141,552 | | Rental income | 52,188 | 47,198 | | Depreciation and related expenses of investment properties | (65,015) | (53,286) | | Impairment of investment properties | (105,938) | – | | Royalty income | 21,747 | 30,621 | | Investment income from wealth management products at FVTPL | 17,240 | 14,971 | | Fair value gains on investments at FVTPL | – | 2,685 | | Total | 93,895 | 183,741 | - Due to challenges in the real estate markets in mainland China and Hong Kong, the Group recognized an impairment loss of **RMB 105,938,000** on investment properties[19](index=19&type=chunk) [Finance Income – Net](index=9&type=section&id=%E8%9E%8D%E8%B3%87%E6%94%B6%E5%85%A5%EF%BC%8D%E6%B7%A8%E9%A1%8D) H1 2025 net finance income significantly decreased to RMB 34.31 million, primarily due to increased foreign exchange losses and higher interest on borrowings Finance Income – Net (For the six months ended June 30) | Item | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | Finance income (interest income from bank balances and deposits) | 193,993 | 221,238 | | Finance expenses (total) | (159,686) | (120,863) | | Of which: Net foreign exchange losses | (70,921) | (27,446) | | Of which: Interest on borrowings | (24,245) | (12,525) | | Net finance income | 34,307 | 100,375 | [Expenses by Nature](index=9&type=section&id=%E6%8C%89%E6%80%A7%E8%B3%AA%E5%88%97%E7%A4%BA%E4%B9%8B%E9%96%8B%E6%94%AF) In H1 2025, the Group saw increased inventory costs recognized in cost of sales, advertising and marketing, commission and trade fair expenses, transportation and logistics, and R&D expenses, alongside significant impairment charges for intangible assets, property, plant and equipment, and right-of-use assets Expenses by Nature (For the six months ended June 30) | Item | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | Cost of inventories recognized as expense in cost of sales | 7,180,828 | 6,911,525 | | Advertising and promotion expenses | 1,335,904 | 1,248,791 | | Staff costs | 1,140,452 | 1,217,301 | | Research and product development expenses | 344,797 | 317,257 | | Depreciation of property, plant and equipment | 344,022 | 470,250 | | Impairment of intangible assets | 76,428 | – | | Impairment of property, plant and equipment | 48,430 | 18,389 | | Impairment of right-of-use assets | 104,311 | 50,820 | [Income Tax Expense](index=10&type=section&id=%E6%89%80%E5%BE%97%E7%A8%85%E9%96%8B%E6%94%AF) H1 2025 income tax expense significantly increased to RMB 869 million, with the effective tax rate rising to 33.3%, primarily due to the company's strategic planning of domestic and overseas capital structures and corresponding withholding tax provisions Income Tax Expense (For the six months ended June 30) | Item | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | Current income tax | 872,901 | 795,206 | | Deferred income tax | (3,807) | (134,108) | | Income tax expense | 869,094 | 661,098 | - The effective tax rate increased from **25.3% in 2024** to **33.3% in 2025**, primarily due to the provision for withholding income tax[22](index=22&type=chunk)[25](index=25&type=chunk)[54](index=54&type=chunk) [Dividends](index=10&type=section&id=%E8%82%A1%E6%81%AF) The Board resolved to declare an H1 2025 interim dividend of RMB 33.59 cents per share, a decrease from the prior year, with the 2024 final dividend paid in June 2025 Dividends Declared and Paid (For the six months ended June 30) | Item | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | Final dividend declared and paid for 2024 (per share) | 536,148 (20.73 RMB cents) | 473,560 (18.54 RMB cents) | | Interim dividend resolved to be declared (per share) | 868,711 (33.59 RMB cents) | 976,016 (37.75 RMB cents) | [Earnings Per Share](index=11&type=section&id=%E6%AF%8F%E8%82%A1%E6%94%B6%E7%9B%8A) H1 2025 basic earnings per share were RMB 67.43 cents and diluted earnings per share were RMB 67.19 cents, both decreasing from the prior year, primarily due to changes in profit attributable to equity holders and weighted average shares outstanding Earnings Per Share Calculation Data (For the six months ended June 30) | Metric | 2025 (RMB '000/shares) | 2024 (RMB '000/shares) | | :--- | :--- | :--- | | Profit attributable to ordinary equity holders of the Company for basic EPS calculation | 1,737,422 | 1,952,032 | | Weighted average number of ordinary shares outstanding for basic EPS calculation | 2,576,734 | 2,575,186 | | Basic earnings per share (RMB cents) | 67.43 | 75.80 | | Diluted earnings per share (RMB cents) | 67.19 | 75.49 | [Inventories](index=12&type=section&id=%E5%AD%98%E8%B2%A8) As of June 30, 2025, total inventories were RMB 2.428 billion, a decrease from year-end 2024, with inventory provisions increasing to RMB 188 million, reflecting the company's ongoing control over inventory aging and turnover Inventory Details (As of June 30) | Item | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | Raw materials | 25,857 | 19,355 | | Work in progress | 22,341 | 19,486 | | Finished goods | 2,568,026 | 2,726,202 | | Total | 2,616,224 | 2,765,043 | | Less: Provision for write-down of inventories to net realizable value | (187,934) | (166,817) | | Net | 2,428,290 | 2,598,226 | - For the six months ended June 30, 2025, the cost of inventories recognized as expense and included in cost of sales was **RMB 7.181 billion**, including inventory provisions of **RMB 21.12 million**[28](index=28&type=chunk) [Trade Receivables](index=12&type=section&id=%E6%87%89%E6%94%B6%E8%B2%BF%E6%98%93%E6%AC%BE%E9%A0%85) As of June 30, 2025, net trade receivables increased to RMB 1.352 billion from year-end 2024, with expected credit loss provisions remaining stable, as the company continues to monitor aging structure and collection status Trade Receivables Details and Aging Analysis (As of June 30) | Item | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | Trade receivables | 1,393,873 | 1,046,249 | | Less: ECL provision for trade receivables | (41,631) | (41,658) | | Net | 1,352,242 | 1,004,591 | | **Aging Analysis (based on invoice date):** | | | | 0 to 30 days | 898,439 | 578,293 | | 31 to 60 days | 273,902 | 395,312 | | 61 to 90 days | 125,925 | 28,912 | | 91 to 180 days | 62,531 | 13,085 | | Over 180 days | 33,076 | 30,647 | Movement in Expected Credit Loss Provisions for Trade Receivables (For the six months ended June 30) | Item | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | As at January 1 | 41,658 | 38,215 | | ECL provision for trade receivables recognized | 2 | 10,282 | | Irrecoverable trade receivables written off during the period | (30) | (121) | | Exchange difference on foreign currency translation | 1 | 18 | | As at June 30 | 41,631 | 48,394 | [Trade Payables](index=13&type=section&id=%E6%87%89%E4%BB%98%E8%B2%BF%E6%98%93%E6%AC%BE%E9%A0%85) As of June 30, 2025, total trade payables increased to RMB 1.872 billion from year-end 2024, primarily concentrated within the 30-60 day aging period Trade Payables Aging Analysis (As of June 30) | Aging | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | 0 to 30 days | 1,311,861 | 1,256,889 | | 31 to 60 days | 504,913 | 324,869 | | 61 to 90 days | 52,541 | 23,734 | | 91 to 180 days | 1,646 | 19,364 | | 181 to 365 days | 974 | 28 | | Over 365 days | 154 | 248 | | Total | 1,872,089 | 1,625,132 | [Contingent Liabilities](index=14&type=section&id=%E6%88%96%E7%84%B6%E8%B2%A0%E5%82%B5) Li Ning Information (Hong Kong) Limited, a wholly-owned subsidiary, received a statutory demand from a liquidator claiming a short-term loan of HKD 500 million with an outstanding total of HKD 1.955 billion; although the demand was withdrawn, a writ of summons was served, and the Group intends to vigorously defend against the claim, believing the target company has no obligation to repay the loan - Li Ning Information (Hong Kong) Limited received a statutory demand from a liquidator, claiming a short-term loan with a principal of **HKD 500 million** and an outstanding total of **HKD 1.955 billion**[33](index=33&type=chunk) - The statutory demand has been withdrawn, but the liquidator has served a writ of summons on the target company, case number **HCA 770/2025**[33](index=33&type=chunk) - The company was previously unaware of the loan's existence and believes the target company has no obligation to repay it, and will vigorously defend the claim[34](index=34&type=chunk) [Events After the Reporting Period](index=14&type=section&id=%E5%A0%B1%E5%91%8A%E6%9C%9F%E5%BE%8C%E4%BA%8B%E9%A0%85) Subsequent to the reporting period, the company granted restricted shares and share options to certain directors and eligible participants in July 2025 - On July 15 and 17, 2025, the company granted a total of **14,174,100 restricted shares** and **11,017,500 share options**, with an exercise price of **HKD 16.14 per share**[35](index=35&type=chunk) [Dividend Policy and Distribution](index=15&type=section&id=%E8%82%A1%E6%81%AF%E6%94%BF%E7%AD%96%E8%88%87%E6%B4%BE%E7%99%BC) The Board resolved to declare an H1 2025 interim dividend of RMB 33.59 cents per share, payable on September 5 or 10, 2025, with share and convertible securities transfer registration suspended from August 27-28, 2025, to determine eligible shareholders and convertible securities holders - The Board resolved to declare an interim dividend of **RMB 33.59 cents per share** for the six months ended June 30, 2025 (H1 2024: **RMB 37.75 cents per share**)[36](index=36&type=chunk) - The interim dividend will be converted into HKD at the official benchmark exchange rate of RMB to HKD reported by the People's Bank of China on **August 21, 2025**, and will be distributed free of withholding tax[36](index=36&type=chunk) Details of Suspension of Share and Convertible Securities Transfer Registration | Item | Date/Time | | :--- | :--- | | Latest time for lodging transfer documents | August 26, 2025 (Tuesday) 4:30 p.m. | | Period of closure of register of members and convertible securities | August 27, 2025 (Wednesday) to August 28, 2025 (Thursday) | | Record date for interim dividend | August 28, 2025 (Thursday) | [Management Discussion and Analysis](index=16&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%A4%E8%A8%8E%E8%AB%96%E8%88%87%E5%88%86%E6%9E%90) [Financial Review](index=16&type=section&id=%E8%B2%A1%E5%8B%99%E5%9B%9E%E9%A1%A7) In H1 2025, the Group achieved steady revenue growth, but profit attributable to equity holders and basic earnings per share decreased due to lower gross margin, increased administrative expenses (goodwill impairment), and a significantly higher effective tax rate, while the company continued to optimize channel layout, enhance marketing, and actively manage liquidity and material investments Key Operating and Financial Indicators (For the six months ended June 30) | Metric | 2025 | 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Revenue (RMB '000) | 14,816,763 | 14,345,288 | 3.3 | | Gross Profit (RMB '000) | 7,414,803 | 7,235,602 | 2.5 | | Operating Profit (RMB '000) | 2,438,485 | 2,401,895 | 1.5 | | Profit Attributable to Equity Holders (RMB '000) | 1,737,422 | 1,952,032 | (11.0) | | Basic Earnings Per Share (RMB cents) | 67.43 | 75.80 | (11.0) | | Gross Profit Margin (%) | 50.0 | 50.4 | (0.4) | | Operating Profit Margin (%) | 16.5 | 16.7 | (0.2) | | Effective Tax Rate (%) | 33.3 | 25.3 | 8.0 | | Profit Margin Attributable to Equity Holders (%) | 11.7 | 13.6 | (1.9) | | Return on Equity Attributable to Equity Holders (%) | 6.5 | 7.8 | (1.3) | [Key Operating and Financial Indicators](index=16&type=section&id=%E4%B8%BB%E8%A6%81%E7%B6%93%E7%87%9F%E5%8F%8A%E8%B2%A1%E5%8B%99%E6%8C%87%E6%A8%99) In H1 2025, company revenue grew 3.3% year-on-year, but profit attributable to equity holders and basic earnings per share both decreased by 11.0%; gross profit margin and operating profit margin slightly declined, while the effective tax rate significantly increased by 8 percentage points, with asset efficiency showing slightly shorter average inventory turnover and improved trade receivables and payables turnover Key Financial Ratios (For the six months ended June 30) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Gross Profit Margin (%) | 50.0 | 50.4 | | Operating Profit Margin (%) | 16.5 | 16.7 | | Effective Tax Rate (%) | 33.3 | 25.3 | | Profit Margin Attributable to Equity Holders (%) | 11.7 | 13.6 | | Return on Equity Attributable to Equity Holders (%) | 6.5 | 7.8 | | Staff Costs as % of Revenue (%) | 7.7 | 8.5 | | Advertising and Promotion Expenses as % of Revenue (%) | 9.0 | 8.7 | | Research and Product Development Expenses as % of Revenue (%) | 2.3 | 2.2 | | Average Inventory Turnover Period (days) | 61 | 62 | | Average Trade Receivables Turnover Period (days) | 14 | 15 | | Average Trade Payables Turnover Period (days) | 44 | 46 | | Debt-to-Equity Ratio (%) | 35.4 | 36.8 | | Net Asset Value Per Share (RMB cents) | 1,054.73 | 1,013.56 | [Revenue Analysis](index=18&type=section&id=%E6%94%B6%E5%85%A5%E5%88%86%E6%9E%90) H1 2025 revenue increased by 3.3% year-on-year to RMB 14.817 billion, with e-commerce contributing the largest growth at 7.4%, franchised dealer revenue growing steadily by 4.4%, and retail channel revenue declining by 3.4% due to store adjustments and shifting consumption scenarios; footwear and equipment/accessories revenue grew, while apparel revenue decreased, and southern market revenue grew slightly faster than northern - Revenue grew steadily by **3.3%** year-on-year to **RMB 14,816,763,000**[43](index=43&type=chunk) - E-commerce channel revenue increased by **7.4%** year-on-year, contributing the largest increment; franchised dealer revenue grew steadily by **4.4%** year-on-year, with its proportion rising to **46.5%**; retail channel revenue decreased by **3.4%** year-on-year[43](index=43&type=chunk) Revenue Breakdown by Product Category (For the six months ended June 30) | Product Category | 2025 (RMB '000) | % of Total Revenue | 2024 (RMB '000) | % of Total Revenue | Revenue Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Footwear | 8,230,716 | 55.6 | 7,844,159 | 54.7 | 4.9 | | Apparel | 5,192,797 | 35.0 | 5,375,222 | 37.5 | (3.4) | | Equipment and Accessories | 1,393,250 | 9.4 | 1,125,907 | 7.8 | 23.7 | Percentage of Revenue by Sales Channel (For the six months ended June 30) | Sales Channel | 2025 % of Revenue | 2024 % of Revenue | Change (%) | | :--- | :--- | :--- | :--- | | Sales to Franchised Dealers | 46.5 | 46.0 | 0.5 | | Directly Operated Sales | 22.8 | 24.4 | (1.6) | | E-commerce Channel Sales | 29.0 | 27.9 | 1.1 | Revenue Breakdown by Region (For the six months ended June 30) | Region | 2025 (RMB '000) | % of Revenue | 2024 (RMB '000) | % of Revenue | Revenue Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | North | 7,034,893 | 47.5 | 6,841,952 | 47.7 | 2.8 | | South | 7,531,794 | 50.8 | 7,255,024 | 50.6 | 3.8 | [Cost of Sales and Gross Profit Margin](index=20&type=section&id=%E9%8A%B7%E5%94%AE%E6%88%90%E6%9C%AC%E5%8F%8A%E6%AF%9B%E5%88%A9%E7%8E%87) H1 2025 cost of sales increased to RMB 7.402 billion, with gross profit margin decreasing by 0.4 percentage points to 50.0%, primarily due to channel structure adjustments leading to a lower proportion of direct-to-consumer channel revenue and increased promotional competition in direct retail resulting in higher discounts - Overall cost of sales was **RMB 7,401,960,000**, with an overall gross profit margin of **50.0%** (2024: **50.4%**)[46](index=46&type=chunk) - The decrease in gross profit margin was mainly due to channel structure adjustments (lower proportion of direct-to-consumer channel revenue) and increased promotional competition in direct retail leading to higher discounts[46](index=46&type=chunk) [Selling and Distribution Expenses](index=20&type=section&id=%E9%8A%B7%E5%94%AE%E5%8F%8A%E7%B6%93%E9%8A%B7%E9%96%8B%E6%94%AF) H1 2025 selling and distribution expenses were RMB 4.293 billion, accounting for 29.0% of total revenue, a slight decrease of 0.8% year-on-year, primarily due to optimized channel layout and closure of inefficient directly operated stores, reducing operating costs, while strategically increasing marketing investment - Selling and distribution expenses were **RMB 4,292,730,000**, accounting for **29.0%** of total revenue (2024: **30.2%**), a year-on-year decrease of **0.8%**[47](index=47&type=chunk) - The decrease in expenses was primarily due to continuous optimization of channel layout, closure of inefficient directly operated stores, reducing operating costs such as store renovation and fixture amortization; simultaneously, strategic increases in marketing investment were made to strengthen brand competitiveness[47](index=47&type=chunk) [Administrative Expenses](index=20&type=section&id=%E8%A1%8C%E6%94%BF%E9%96%8B%E6%94%AF) H1 2025 administrative expenses increased to RMB 777 million, accounting for 5.2% of total revenue, up 0.5 percentage points year-on-year, primarily due to the full impairment of RMB 72.39 million in goodwill from the 2009 acquisition of Kason brand - Administrative expenses were **RMB 776,642,000**, accounting for **5.2%** of total revenue (2024: **4.7%**), a year-on-year increase of **0.5 percentage points**[48](index=48&type=chunk) - The increase in administrative expenses was mainly due to the full impairment of goodwill of **RMB 72,387,000** arising from the acquisition of the Kason brand in 2009, recognized in this period[48](index=48&type=chunk) [Share of Profits of Joint Ventures and Associates](index=20&type=section&id=%E4%BA%AB%E6%9C%89%E5%90%88%E7%87%9F%E4%BC%81%E6%A5%AD%E5%8F%8A%E8%81%AF%E7%87%9F%E5%85%AC%E5%8F%B8%E7%9A%84%E6%BA%A2%E5%88%A9%E4%BB%BD%E9%A1%8D) H1 2025 share of profits of joint ventures and associates increased to RMB 134 million, a growth from the same period last year - Share of profits of joint ventures and associates was **RMB 133,724,000** (2024: **RMB 110,860,000**)[49](index=49&type=chunk) [EBITDA (Earnings Before Interest, Tax, Depreciation and Amortization)](index=21&type=section&id=%E6%81%AF%E7%A8%85%E5%89%8D%E5%88%A9%E6%BD%A4%E5%8A%A0%E6%8A%98%E8%88%8A%E5%8F%8A%E6%攤%E9%8A%B7(EBITDA)) H1 2025 EBITDA was RMB 3.513 billion, an increase of 2.0% year-on-year, with reconciliation items including income tax expense, net finance income, and various depreciation and impairment charges - EBITDA was **RMB 3,512,607,000** (2024: **RMB 3,443,608,000**), a year-on-year increase of **2.0%**[50](index=50&type=chunk) Reconciliation of EBITDA to Profit for the Period (For the six months ended June 30) | Item | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | Profit for the period | 1,737,422 | 1,952,032 | | Income tax expense | 869,094 | 661,098 | | Finance income | (193,993) | (221,238) | | Finance expenses | 159,686 | 120,863 | | Depreciation of property, plant and equipment | 344,022 | 470,250 | | Impairment of property, plant and equipment | 48,430 | 18,389 | | Amortization of land use rights and intangible assets | 33,236 | 31,145 | | Impairment of intangible assets - trademark rights | 4,041 | – | | Depreciation of right-of-use assets | 250,817 | 319,210 | | Impairment of right-of-use assets | 104,311 | 50,820 | | Depreciation of investment properties | 49,603 | 41,039 | | Impairment of investment properties | 105,938 | – | | EBITDA | 3,512,607 | 3,443,608 | [Net Finance Income](index=22&type=section&id=%E8%9E%8D%E8%B3%87%E6%94%B6%E5%85%A5%E6%B7%A8%E9%A1%8D) H1 2025 net finance income significantly decreased to RMB 34.31 million year-on-year, primarily due to increased exchange losses and lower interest income from declining interest rates - Net finance income was **RMB 34,307,000** (2024: **RMB 100,375,000**), a year-on-year decrease[53](index=53&type=chunk) - The decrease was mainly due to increased exchange losses in the current period and lower interest income resulting from declining interest rates[53](index=53&type=chunk) [Income Tax Expense](index=22&type=section&id=%E6%89%80%E5%BE%97%E7%A8%85%E9%96%8B%E6%94%AF) H1 2025 income tax expense was RMB 869 million, with an effective tax rate of 33.3%, a significant increase from the prior year, primarily due to the company's strategic planning of domestic and overseas capital structures and corresponding withholding tax provisions - Income tax expense was **RMB 869,094,000** (2024: **RMB 661,098,000**), with an effective tax rate of **33.3%** (2024: **25.3%**)[54](index=54&type=chunk) - The increase in tax rate was primarily due to comprehensive factors such as exchange rate fluctuations and capital yield rates, leading the company to make more reasonable plans for its domestic and overseas capital structure, thus providing for corresponding withholding income tax[54](index=54&type=chunk) [Consolidated Profitability Indicators](index=22&type=section&id=%E7%B6%9C%E5%90%88%E7%9B%88%E5%88%A9%E6%8C%87%E6%A8%99) In H1 2025, despite steady revenue growth and optimized expense ratios, profit attributable to equity holders, profit margin, and return on equity all decreased due to lower gross profit margin and a significantly higher income tax rate Consolidated Profitability Indicators (For the six months ended June 30) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Profit attributable to equity holders (RMB '000) | 1,737,422 | 1,952,032 | | Profit margin attributable to equity holders (%) | 11.7 | 13.6 | | Return on equity attributable to equity holders (%) | 6.5 | 7.8 | [Inventory Provisions](index=22&type=section&id=%E5%AD%98%E8%B2%A8%E6%92%A5%E5%82%99) As of June 30, 2025, cumulative inventory provisions increased to RMB 188 million from year-end 2024, as the company continues to manage inventory aging and turnover - As of June 30, 2025, cumulative inventory provisions amounted to **RMB 187,934,000** (December 31, 2024: **RMB 166,817,000**)[56](index=56&type=chunk) [Expected Credit Loss Provisions](index=22&type=section&id=%E9%A0%90%E6%9C%9F%E4%BF%A1%E8%B2%B8%E虧%E6%90%8D%E6%92%A5%E5%82%99) As of June 30, 2025, cumulative expected credit loss provisions totaled RMB 46.48 million, with trade receivables provisions at RMB 41.63 million, as the company continues to monitor aging structure and collection status - As of June 30, 2025, cumulative expected credit loss provisions amounted to **RMB 46,484,000** (December 31, 2024: **RMB 45,678,000**)[57](index=57&type=chunk) - Of which, cumulative expected credit loss provisions for trade receivables amounted to **RMB 41,631,000**[57](index=57&type=chunk) [Liquidity and Financial Resources](index=23&type=section&id=%E8%B3%87%E9%87%91%E6%B5%81%E5%8B%95%E6%80%A7%E5%8F%8A%E8%B2%A1%E6%94%BF%E8%B3%87%E6%BA%90) H1 2025 net cash generated from operating activities decreased to RMB 2.411 billion year-on-year; cash and cash equivalents increased by RMB 4.299 billion, primarily due to net cash inflow from investment activities from matured time deposits, with cash flow management remaining a key focus - Net cash generated from operating activities was **RMB 2,411,101,000** (2024: **RMB 2,730,305,000**), a year-on-year decrease[58](index=58&type=chunk) - As of June 30, 2025, cash and cash equivalents amounted to **RMB 11,798,043,000**, a net increase of **RMB 4,299,447,000** from December 31, 2024[58](index=58&type=chunk) - Net cash generated from investment activities significantly increased due to the redemption of matured time deposits[60](index=60&type=chunk) [Use of Net Proceeds from Placing of Existing Shares and Subscription of New Shares](index=24&type=section&id=%E5%85%88%E8%88%8A%E5%BE%8C%E6%96%B0%E9%85%8D%E5%94%AE%E6%89%80%E5%BE%97%E6%AC%BE%E9%A0%85%E6%B7%A8%E9%A1%8D%E4%BD%BF%E7%94%A8%E6%83%85%E6%B3%81) As of June 30, 2025, RMB 382 million of the 2021 placing net proceeds have been used, with RMB 529 million remaining, primarily for investing in infrastructure restructuring and supply chain system enhancement, expected to be fully utilized by December 31, 2026; other investment plans have been fully utilized - For the six months ended June 30, 2025, **RMB 382,187,000** of the net proceeds from the placing of existing shares and subscription of new shares has been utilized[61](index=61&type=chunk) - As of June 30, 2025, **RMB 529,434,000** remained unutilized, primarily for investing in infrastructure restructuring and further enhancing the supply chain system, with expected utilization by **December 31, 2026**[61](index=61&type=chunk) - Plans for investing in newly launched product categories and future business investments, brand/IT system construction, and general working capital have been fully utilized[61](index=61&type=chunk) [Foreign Exchange Risk](index=25&type=section&id=%E5%A4%96%E5%8C%AF%E9%A2%A8%E9%9A%AA) The Group primarily operates in mainland China, with most transactions settled in RMB; some cash and bank balances are denominated in various foreign currencies, and dividend payments and certain expenses involve foreign currencies, with no hedging undertaken during the period, making the Group susceptible to foreign exchange fluctuations - The Group primarily operates in mainland China, with most transactions settled in RMB, and the reporting currency is RMB[63](index=63&type=chunk) - The Group holds some cash and bank balances denominated in HKD, USD, EUR, KRW, GBP, MOP, and SGD, pays dividends in HKD, and settles certain royalty fees, sponsorship fees, and consulting fees in USD or EUR[63](index=63&type=chunk) - No hedging arrangements were undertaken during the period for foreign exchange fluctuation risks, and any significant exchange rate fluctuations may have a financial impact on the Group[63](index=63&type=chunk) [Material Investments](index=25&type=section&id=%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B3%87) In January 2024, the Group completed the acquisition of a property in Hong Kong comprising commercial/office space and retail areas for approximately RMB 2.013 billion; a portion will serve as the Hong Kong headquarters, with an investment cost of RMB 2.021 billion and a carrying value of RMB 1.847 billion as of June 30, 2025 - The Group completed the acquisition of a property in Hong Kong comprising **22 floors of commercial/office space** and **two floors of retail area** in January 2024, with a total consideration of approximately **HKD 2.221 billion** (approximately **RMB 2.013 billion**)[64](index=64&type=chunk)[65](index=65&type=chunk) - A portion of the property will be used as the Group's Hong Kong headquarters, with an investment cost of **RMB 2,021,450,000**[65](index=65&type=chunk) - As of June 30, 2025, the carrying value of the property after depreciation and impairment was **RMB 1,847,079,000**, accounting for approximately **5.0%** of the Group's total assets[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%E8%99%95%E7%BD%AE) For the six months ended June 30, 2025, the Group did not undertake any material acquisitions or disposals of subsidiaries, associates, or joint ventures - For the six months ended June 30, 2025, the Group did not undertake any material acquisitions or disposals of subsidiaries, associates, or joint ventures[66](index=66&type=chunk) [Future Plans for Material Investments and Capital Assets](index=26&type=section&id=%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B3%87%E5%92%8C%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) The Group plans to build a high-end intelligent manufacturing and flexible supply chain base, along with a high-level R&D and experience center, in Guangxi Zhuang Autonomous Region, with an estimated maximum investment of RMB 3.3 billion; as of June 30, 2025, relevant land use rights have been acquired and investments made, with non-current assets carrying value of RMB 1.945 billion, and remaining investment to be funded by net proceeds from placing and internal resources - The Group plans to build a supply chain base in Guangxi Zhuang Autonomous Region to increase capacity and output of differentiated sports products, and for R&D and experience, with an estimated maximum investment of approximately **RMB 3.3 billion**[67](index=67&type=chunk) - As of June 30, 2025, the carrying value of non-current assets within this investment, after depreciation and impairment, was **RMB 1,945,279,000**, accounting for approximately **5.3%** of the Group's total assets[68](index=68&type=chunk) - The remaining investment amount will be funded by the Group's unutilized net proceeds from the placing of existing shares and subscription of new shares, as well as internal resources[68](index=68&type=chunk) [Pledge of Assets](index=26&type=section&id=%E8%B3%87%E7%94%A2%E6%8A%B5%E6%8A%BC) As of June 30, 2025, and December 31, 2024, the Group had no assets under pledge - As of June 30, 2025, and December 31, 2024, the Group had no assets under pledge[69](index=69&type=chunk) [Contingent Liabilities](index=27&type=section&id=%E6%88%96%E7%84%B6%E8%B2%A0%E5%82%B5) Li Ning Information (Hong Kong) Limited, a wholly-owned subsidiary, faces a claimed short-term loan lawsuit totaling HKD 1.955 billion; although the statutory demand was withdrawn, a writ of summons was served, and the Group intends to vigorously defend against the claim, believing the target company has no obligation to repay the loan - Li Ning Information (Hong Kong) Limited received a statutory demand from a liquidator, claiming a short-term loan with a principal of **HKD 500 million** and an outstanding total of **HKD 1.955 billion**[71](index=71&type=chunk) - The statutory demand has been withdrawn, but the liquidator has served a writ of summons on the target company, case number **HCA 770/2025**[71](index=71&type=chunk) - The company was previously unaware of the loan's existence and believes the target company has no obligation to repay it, and will vigorously defend the claim[72](index=72&type=chunk) [Business Review](index=28&type=section&id=%E6%A5%AD%E5%8B%99%E5%9B%9E%E9%A1%A7) In H1 2025, Li Ning Group steadily advanced its 'single brand, multi-category, multi-channel' strategy amidst a volatile market, making progress in product upgrades, brand marketing, and channel optimization; the company deepened its Olympic marketing strategy, solidified its professional sports brand positioning through technological innovation and a diversified product matrix, and continuously optimized its omni-channel layout, enhancing operational efficiency and strengthening human resources to support business development - In H1, the macroeconomic economy operated steadily, and the consumer market experienced a moderate recovery, but consumer confidence fluctuated, with increased attention to value for money[73](index=73&type=chunk) - The Group steadily strengthened its operational foundation, actively prepared for business development, achieved results largely in line with expectations, and advanced product upgrades, brand marketing, and channel optimization as planned[73](index=73&type=chunk) - Firmly implementing the core 'single brand, multi-category, multi-channel' strategy, continuously increasing R&D investment and technological innovation, promoting aerospace technology to empower sports innovation, and launching value-for-money products based on consumer demand[73](index=73&type=chunk) [Overall Market and Strategic Layout](index=28&type=section&id=%E6%95%B4%E9%AB%94%E5%B8%82%E5%A0%B4%E8%88%87%E6%88%B0%E7%95%A5%E4%BD%88%E5%B1%80) In H1 2025, facing a volatile external environment and a moderately recovering consumer market, Li Ning Group steadily strengthened its operational foundation, actively prepared for business development, and achieved results largely in line with expectations; the Group firmly implemented its core 'single brand, multi-category, multi-channel' strategy, continuously increased R&D investment and technological innovation, and steadily advanced brand marketing and channel optimization as planned - In H1, the macroeconomic economy operated steadily, and the consumer market experienced a moderate recovery, but consumer confidence fluctuated, with increased attention to value for money[73](index=73&type=chunk) - The Group firmly implemented the core 'single brand, multi-category, multi-channel' strategy, continuously increasing R&D investment and technological innovation, promoting aerospace technology to empower sports innovation[73](index=73&type=chunk) - In brand marketing, the Group successfully implemented its cooperation rights with the Chinese Olympic Committee and integrated traditional cultural elements with products through collaboration with the Palace Museum[74](index=74&type=chunk) [Deepening Olympic Marketing Strategy, Solidifying Professional Sports Brand Positioning](index=29&type=section&id=%E6%B7%B1%E5%8C%96%E5%A5%A7%E9%81%8B%E7%87%9F%E9%8A%B7%E6%88%B0%E7%95%A5%EF%BC%8C%E5%A0%85%E5%AF%A6%E5%B0%88%E6%A5%AD%E9%81%8B%E5%8B%95%E5%93%81%E7%89%8C%E5%AE%9A%E4%BD%8D) Li Ning Group successfully signed as the official sportswear partner for the Chinese Olympic Committee and Chinese Sports Delegation for 2025-2028, reinforcing its professional brand image with 'Chinese Glory, Li-Ning Together' as the core marketing theme, and continuously deepening its professional sports brand positioning and influence through store visual upgrades, mini-program interactive experiences, International Olympic Day activities, and aerospace technology innovation application laboratories - The Group successfully signed as the official sportswear partner for the Chinese Olympic Committee and Chinese Sports Delegation for **2025-2028**[75](index=75&type=chunk) - Reinforcing the brand's professional image with the new Olympic marketing theme 'Chinese Glory, Li-Ning Together' as the core leverage point[75](index=75&type=chunk) - Jointly established an aerospace technology innovation application laboratory with an aerospace technology innovation application platform, applying advanced aerospace technology to professional sports equipment, launching 'Aerospace Quick-Dry' and 'Aerospace Sun Protection' technological achievements[76](index=76&type=chunk) [Deepening 'Single Brand, Multi-Category, Multi-Channel' Strategy, Enhancing Li-Ning Experience Value](index=30&type=section&id=%E6%B7%B1%E5%8C%96%E3%80%8C%E5%96%AE%E5%93%81%E7%89%8C%E3%80%81%E5%A4%9A%E5%93%81%E9%A1%9E%E3%80%81%E5%A4%9A%E6%B8%A0%E9%81%93%E3%80%8D%E6%88%B0%E7%95%A5%E4%BD%88%E5%B1%80%EF%BC%8C%E6%8E%A8%E5%8B%95%E6%9D%8E%E5%AF%A7%E5%BC%8F%E7%B6%93%E9%A9%97%E5%83%B9%E5%80%BC%E5%8D%87%E7%B4%9A) Li Ning Group continues to deepen its 'single brand, multi-category, multi-channel' strategy, focusing on six core categories like running, basketball, and training, while expanding into new segments such as outdoor and tennis; through technological innovation, product iteration, and omni-channel marketing, it continuously enhances product strength, brand influence, and consumer experience, with key products and marketing activities across all categories, and Li-Ning YOUNG achieving steady development in children's sports - Focusing on six core categories: running, basketball, training, badminton, table tennis, and sports casual, while actively expanding into new niche sports categories such as outdoor sports, tennis, and pickleball[77](index=77&type=chunk) - Empowering product strength upgrades with technological innovation capabilities, increasing professional sports resource allocation, and strengthening differentiated brand advantages from three standpoints: solidifying professional sports mindset, showcasing sports fashion aesthetics, and inheriting Chinese cultural values[77](index=77&type=chunk) [Running Category](index=30&type=section&id=%E8%B7%91%E6%AD%A5%E5%93%81%E9%A1%9E) Li-Ning Running category, driven by technology, launched upgraded products for its three core running shoe IPs 'Featherlight,' 'Chitu,' and 'Feidian,' with total sales exceeding 5.26 million pairs; running apparel focused on marathon and daily road running needs, introducing 'Longque' racing vests and 'Chuanshanjia' trail running jackets, while marketing successfully secured Wuxi and Beijing Half Marathon sponsorships and helped athletes achieve excellent results - The three core running shoe IPs 'Featherlight,' 'Chitu,' and 'Feidian' achieved total sales exceeding **5.26 million pairs** during the period, with the 'Feidian' family fully upgrading to 'BOOM' midsole technology, offering an energy return rate of up to **89%**[78](index=78&type=chunk) - Running apparel launched the racing 'Longque' vest and 'Chuanshanjia' trail running jacket, enhancing the product experience for core consumers[79](index=79&type=chunk) - Successfully signed sponsorship for 'Wuxi Marathon' and 'Beijing Half Marathon' events, and helped athletes achieve a total of **44 championships** in international and domestic competitions[80](index=80&type=chunk) [Basketball Category](index=31&type=section&id=%E7%B1%83%E7%90%83%E5%93%81%E9%A1%9E) Li-Ning Basketball focuses on three series: Professional Basketball, 'Wade' Basketball, and 'Badfive' Basketball; Professional Basketball enhanced brand exposure through CBA League and NBA Draft, launching the 'ULTRALIGHT 2025' bestseller; Wade Basketball released the new 'Wade 808 ULTRA' and signature shoe 'DLO1,' successfully debuting at Fanatics Fest; Badfive Basketball targets Chinese outdoor enthusiasts, launching 'Guerrilla,' 'Pursuit,' and 'Badfive' series, strengthening street basketball brand recognition - Professional Basketball enhanced brand exposure through the CBA League and NBA Draft, launching the new bestseller 'ULTRALIGHT 2025,' with cumulative omni-channel sales exceeding **100,000 pairs**[81](index=81&type=chunk) - 'Wade' Basketball released the new generation 'Wade 808 ULTRA' and signature shoe 'DLO1,' with the 'DLO1 × KICKCREW' limited edition colorway achieving **100% sell-out** on the international stage[82](index=82&type=chunk) - 'Badfive' basketball shoes target Chinese outdoor basketball enthusiasts, launching 'Guerrilla,' 'Pursuit,' and 'Badfive' series, equipped with 'BOOM' technology and ultra-wear-resistant rubber, enhancing practical performance[83](index=83&type=chunk) [Training Category](index=32&type=section&id=%E7%B6%9C%E8%A8%93%E5%93%81%E9%A1%9E) Li-Ning Training category, centered on technological innovation, builds a sports equipment product matrix with both tech empowerment and market advantages; women's fitness products target multi-scenario needs, launching windbreakers with 'intelligent protection technology' and 'air-cool sensation T-shirts'; men's training products focus on functional technology, with core 'functional pants' achieving million-level shipments and 'instant-dry T-shirts' high sell-through rates; marketing leverages the dual endorsement of aerospace technology and professional athletes - The women's fitness exclusive IP matrix continues to be enriched, launching products such as windbreakers equipped with 'intelligent protection technology' and hoodies/pants offering exclusive softness, as well as 'air-cool sensation T-shirts' certified by aerospace technology[84](index=84&type=chunk) - Men's training products focus on functional technology, with core 'functional pants' achieving **million-level shipments**, and 'instant-dry T-shirts' driving performance growth with high sell-through rates[85](index=85&type=chunk) - In marketing, Li-Ning meticulously planned its first cross-category women's marketing 'Beautiful as Light' theme event, fully leveraging the dual endorsement advantages of aerospace technology and professional athletes[84](index=84&type=chunk)[85](index=85&type=chunk) [Badminton Category](index=32&type=section&id=%E7%BE%BD%E6%AF%9B%E7%90%83%E5%93%81%E9%A1%9E) Li-Ning Badminton category continuously expands its influence through technological innovation, product upgrades, and precise market positioning; tournament apparel series utilize top-tier fabric technology, badminton shoes optimize classification, and 'War Halberd 2.0' remains a bestseller; in equipment, increased investment in materials, craftsmanship, and automated equipment led to professional products like 'Thunder 80 Light' and 'Thunder 90NEW'; marketing, themed 'Good Products, Made by Li-Ning, Made in China,' sponsors domestic and international events and top athletes, solidifying its professional image - The badminton tournament apparel series applied top-tier fabric technology such as integrated weaving and COOLMAX yarn, receiving positive feedback from Indonesian and Singaporean teams[87](index=87&type=chunk) - Equipment product sales maintained high growth, launching professional badminton rackets like 'Thunder 80 Light' and 'Thunder 90NEW,' enhancing brand competitiveness and market share[87](index=87&type=chunk) - Marketing adopted 'Good Products, Made by Li-Ning, Made in China' as the category communication theme, completing sponsorships for events such as the China (Ruichang) International Badminton Master Tournament and the 2025 Singapore Open, and renewing the contract with the Indonesian national team[88](index=88&type=chunk) [Table Tennis Category](index=34&type=section&id=%E4%B9%92%E4%B9%93%E7%90%83%E5%93%81%E9%A1%9E) Li-Ning Table Tennis category continues to lead the market, driven by product iteration and global event marketing; footwear features 'BOOM FIBER technology' and a zoned midsole tuning system, while apparel applies aerospace material technology; the product matrix covers professional athletes, advanced users, and entry-level enthusiasts; marketing deeply integrates with WTT series events, achieving breakthrough results in the Doha World Table Tennis Championships marketing campaign, establishing 'professional table tennis first choice' brand recognition - In footwear, breakthrough 'BOOM FIBER technology' achieved lightweight design and strong support, with innovative R&D of a zoned midsole tuning system integrating multiple core technologies[89](index=89&type=chunk) - In apparel, aerospace material technology and original yarn antibacterial processes were adopted to enhance moisture-wicking and quick-drying performance[89](index=89&type=chunk) - As an official partner of the WTT series events, deeply tied to **18 international top-tier tournaments**, the Doha World Table Tennis Championships marketing campaign achieved breakthrough results, with Weibo topic readership exceeding **16.08 billion**[90](index=90&type=chunk) [Sports Casual Series](index=35&type=section&id=%E9%81%8B%E5%8B%95%E4%BC%91%E9%96%92%E7%B3%BB%E5%88%97) Li-Ning Sports Casual series, centered on Chinese culture, deeply integrates traditional aesthetics with modern design, reinforcing its 'cultural leader' brand positioning through Forbidden City and Disney co-branded collections; product strategy focuses on scenario-based functional upgrades and cost-performance optimization, with skate shoes and casual shoes exceeding expectations, and 'SOFT' series and women's IP 'Starlight' performing strongly; 'China Li-Ning' deepens collaborations with leading trend brands to expand international influence - Anchored in Chinese culture, the Forbidden City co-branded series innovatively transformed cultural elements like corner towers and mythical beasts into daily apparel, leveraging Spring Festival themed marketing and Shanghai Fashion Week to achieve omni-channel brand penetration[91](index=91&type=chunk) - Sports casual footwear saw steady growth, with key products 'Buou' and 'Maozhua' achieving significant year-on-year sales growth; the 'SOFT' series successfully ranked first in commuter shoe category penetration, and women's IP 'Starlight' achieved a **48% sell-through rate within 60 days of launch**[91](index=91&type=chunk) - 'China Li-Ning' continues to deepen strategic collaborations with leading trend brands such as M.E.D.M, TYAKASHA, G-SHOCK, and CHUMS, and jointly launched a co-branding initiative with STAPLE to expand international influence[92](index=92&type=chunk) [LI-NING 1990](index=35&type=section&id=LI-NING%201990) 'LI-NING 1990', centered on golf, integrates technological innovation with fashion aesthetics, building a brand image that combines professional sports and high-end fashion; in H1, the 'Golf Series' was fully upgraded, launching the 'Qicheng Series' G902 golf shoes with 'Carbon Core' technology; commuter shoes 'Guanlan' and co-branded 'Xinwu G' women's golf shoes performed excellently, with the Group solidifying differentiated brand perception through 'Gold Medal' and 'Blue' series IPs - 'LI-NING 1990', centered on golf, deeply integrates technological innovation with fashion aesthetics, leveraging international events and professional athletes as professional endorsements[93](index=93&type=chunk) - The 'Golf Series' was fully upgraded, utilizing cooling technology and functional fabrics, launching the 'Qicheng Series' G902 golf shoes equipped with 'Carbon Core' technology[93](index=93&type=chunk) - Commuter shoes 'Guanlan' achieved a sell-through rate of over **50% within 60 days of launch**, and the co-branded 'Xinwu G' women's golf shoes gained favor among female consumers[93](index=93&type=chunk) [Outdoor Category](index=36&type=section&id=%E6%88%B6%E5%A4%96%E5%93%81%E9%A1%9E) Li-Ning Outdoor category saw significant omni-channel sales growth in H1, with footwear performing exceptionally; product R&D enriched the 'Wanlongjia' jacket series with exclusive fabrics and craftsmanship; market positioning precisely targets young consumers, completing the footwear price matrix with 'Xingchuan,' 'Xingjing,' and 'Xun' family series; marketing deeply collaborates with light outdoor hiking platforms, showcasing core IP performance and boosting brand search index - In H1, the outdoor category saw significant omni-channel sales growth, with footwear products performing even more remarkably[94](index=94&type=chunk) - Enriched the 'Wanlongjia' jacket series with ultra-light **7D fabric** and industry-exclusive fabrics and manufacturing processes such as 'storm-proof double-permeable nano-technology'[94](index=94&type=chunk) - Market positioning precisely targets young consumers, launching 'Xingchuan' hiking shoes for brisk walking, 'Xingjing' for a general business casual commuter style, and the 'Xun' family series of stream-trekking shoes and sandals for an outdoor relaxed style[94](index=94&type=chunk) [Tennis and Pickleball Category](index=36&type=section&id=%E7%B6%B2%E7%90%83%E5%92%8C%E5%8C%B9%E5%85%8B%E7%90%83%E5%93%81%E9%A1%9E) Li-Ning continuously refines its professional pickleball and tennis product matrix, comprehensively covering multi-level user needs from entry-level to professional; products include competition, club, culture, and youth series, supported by a dedicated tennis technology platform; brand influence is expanded through athlete endorsements, event sponsorships, and online/offline promotions - Continuously refining the professional pickleball and tennis product matrix, comprehensively covering multi-level user needs from entry-level to professional[96](index=96&type=chunk) - Products include tennis competition series, club series, culture series, and youth series, with a dedicated tennis technology platform established[96](index=96&type=chunk) - Continuously expanding brand influence in pickleball and tennis through athlete endorsements, event sponsorships, and online/offline promotions[96](index=96&type=chunk) [Li-Ning YOUNG](index=37&type=section&id=%E6%9D%8E%E5%AF%A7YOUNG) Li-Ning YOUNG steadily developed in children's and youth sports through product optimization, channel expansion, retail efficiency, and brand marketing; product-wise, running shoes launched the 'Agile Tech' platform, basketball shoes leveraged the 'INFINITE' series, and apparel saw strong performance from 'Vientiane' IP and summer cooling matrix; channel development expanded into emerging and outlet markets, accelerating e-commerce and campus channel layouts; retail efficiency improved wholesale and direct-to-consumer performance through systematic measures; marketing deeply linked with elementary school basketball leagues and CBA resources, collaborating with industry leaders to significantly boost brand awareness - In product optimization, running shoes launched the 'Agile Tech' platform, with the 'Cloud' series focusing on breathability, lightness, and protection; basketball shoes leveraged the trendy basketball 'INFINITE' series to achieve **tens of millions of exposures**[97](index=97&type=chunk) - In channel development, strategically expanding into emerging markets and strengthening outlet channel layout, accelerating e-commerce platform deployment, focusing on strengthening private domain operation matrices such as Douyin, community marketing, and internal purchase events, and actively expanding campus channels[98](index=98&type=chunk) - In marketing and promotion, deeply linking with popular events such as the Elementary School Basketball League and Xinjiang Li-Ning YOUNG Cup Basketball Tournament, integrating CBA resources, achieving brand exposure exceeding **14 million**[99](index=99&type=chunk) [Deepening Omni-Channel Layout, Enhancing Operational Efficiency](index=38&type=section&id=%E6%B7%B1%E5%8C%96%E5%85%A8%E6%B8%A0%E9%81%93%E4%BD%88%E5%B1%80%EF%BC%8C%E6%8F%90%E5%8D%87%E9%81%8B%E7%87%9F%E8%B3%AA%E6%95%88) In H1 2025, Li Ning Group continuously advanced diversified channel development, retail digitalization, and supply chain/logistics optimization to enhance operational efficiency and market competitiveness; the company optimized high-tier and emerging market layouts, strengthened store operating cost control, and deepened strategic cooperation with business partners; new retail business improved service and conversion efficiency through digital platforms and AI technology, while e-commerce operations grew steadily; supply chain and logistics systems achieved comprehensive upgrades through supplier structure optimization, cost control, flexible supply, and national warehousing network deployment - In channels, actively building a multi-dimensional channel network, deepening strategic synergy with top commercial complexes and leading outlet projects, and implementing deep expansion in emerging markets[100](index=100&type=chunk) - New retail business comprehensively deepened digital upgrades, by upgrading user digital platforms and sales assistant systems, successfully integrating with mainstream ecosystem platforms like Douyin Local Life, and leveraging AI technology to empower the private domain digital management tool 'Ningdaogou'[104](index=104&type=chunk) - The supply chain focuses on four core objectives: quality control, delivery assurance, cost optimization, and sustainable development, deepening dynamic supplier management, accelerating supply chain expansion into inland regions, and achieving breakthrough progress in flexible supply capabilities[106](index=106&type=chunk) - The logistics system launched an omni-channel logistics project, established an advanced inbound goods collaboration system, optimized logistics automation, and completed the activation of the Nanning Central Warehouse, completing the national logistics warehousing network layout[107](index=107&type=chunk) [Number of Sales Outlets](index=39&type=section&id=%E9%8A%B7%E5%94%AE%E9%BB%9E%E6%95%B8%E9%87%8F) As of June 30, 2025, Li-Ning brand (including Li-Ning core brand and Li-Ning YOUNG) had 7,534 sales outlets, a net decrease of 51 from December 31, 2024; Li-Ning YOUNG stores saw a larger decrease, while store count in the southern region remained stable Number of Li-Ning Brand Sales Outlets (As of June 30) | Brand | June 30, 2025 | Dec 31, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Franchised Dealers | 4,821 | 4,820 | 0.0 | | Directly Operated Retail | 1,278 | 1,297 | (1.5) | | Li-Ning YOUNG | 1,435 | 1,468 | (2.2) | | Total | 7,534 | 7,585 | (0.7) | Number of Li-Ning Brand Sales Outlets by Region (As of June 30) | Region | Li-Ning Core Brand (2025) | Li-Ning YOUNG (2025) | Total (2025) | Li-Ning Core Brand (2024) | Li-Ning YOUNG (2024) | Total (2024) | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | North | 3,039 | 842 | 3,881 | 3,076 | 856 | 3,932 | (1.3) | | South | 3,060 | 593 | 3,653 | 3,041 | 612 | 3,653 | 0.0 | [New Retail Business](index=40&type=section&id=%E6%96%B0%E9%9B%B6%E5%94%AE%E6%A5%AD%E5%8B%99) The Group comprehensively deepened its new retail business system, centered on digitalization, by upgrading user digital platforms and sales assistant systems to optimize consumer service experience and off-store sales conversion efficiency; the company actively expanded multi-platform new business cooperation models, integrating with mainstream ecosystem platforms like Douyin Local Life, and leveraging AI technology to empower its private domain digital management tool 'Ningdaogou,' enhancing overall operational efficiency - Through upgrading user digital platforms and sales assistant systems, consumer service experience is continuously optimized, and off-store sales conversion efficiency is continuously improved[104](index=104&type=chunk) - Actively expanding multi-platform new business cooperation models, successfully integrating with mainstream ecosystem platforms like Douyin Local Life, enhancing the precise customer acquisition capabilities of offline stores[104](index=104&type=chunk) - Leveraging AI technology to empower the private domain digital management tool 'Ningdaogou,' significantly strengthening terminal sales assistants' data analysis and service levels, and improving overall operational efficiency[104](index=104&type=chunk) [E-commerce Operations](index=40&type=section&id=%E9%9B%BB%E5%95%86%E9%81%8B%E7%87%9F) The Group's e-commerce operations remained stable amidst industry pressure, continuously enhancing operational efficiency through online-offline synergy, exclusive marketing IP creation, and precise promotional event planning; star products like D'Angelo Russell's first signature shoe 'DLO1' and 'Blade 5V2' basketball shoes performed well, while the new running shoe IP 'Zhuifeng' series captured Gen Z consumer attention; the Group created the 'Malusong' IP concept, leveraged Olympic champion Wang Chuqin's star power, and boosted brand awareness through Tmall Super Brand Day and Douyin Super Product Day events - Star products performed ideally, D'Angelo Russell's first signature shoe 'DLO1' won the sales champion for Li-Ning Basketball's initial launch period, and 'Blade 5V2' basketball shoes remained among the industry's TOP3[105](index=105&type=chunk) - Created the exclusive 'Malusong' IP concept, fully leveraging Olympic champion Wang Chuqin's star power, continuously boosting brand attention[105](index=105&type=chunk) - Omni-channel business, by integrating with various business lines, assisted the Group in inventory optimization, and fully leveraged the explosive potential of e-commerce exclusive products, using online popularity to boost offline business[105](index=105&type=chunk) [Supply Chain](index=41&type=section&id=%E4%BE%9B%E6%87%89%E9%8F%88) The Group continuously advanced deep supply chain optimization and strategic upgrades, focusing on quality control, delivery assurance, cost optimization, and sustainable development; by deepening dynamic supplier management, establishing a core strategic supplier echelon, and accelerating supply chain expansion into inland regions, operational efficiency improved through deep integration and streamlining of key raw materials, achieving successful cost optimization; flexible supply capabilities made breakthrough progress, and sustainability concepts were deeply integrated into supply chain practices - Deepening dynamic supplier management, strategically focusing on high-end sports, outdoor, and premium product line quality resources, and accelerating the promotion of supply chain layout towards inland regions[106](index=106&type=chunk) - Implementing deep integration and streamlining of key raw materials, significantly optimizing procurement and production efficiency, successfully achieving cost optimization[106](index=106&type=chunk) - Breakthrough progress in flexible supply capabilities, successfully expanding to e-commerce exclusive product lines, and establishing a rolling replenishment system and cross-channel collaboration mechanism[106](index=106&type=chunk) [Logistics System](index=41&type=section&id=%E7%89%A9%E6%B5%81%E9%AB%94%E7%B3%BB) The Group vigorously advanced strategic logistics system development, focusing on omni-channel logistics integration, digitalization, and automation; the omni-channel logistics project w

[Financial Summary and Performance Overview](index=1&type=section&id=%E8%B2%A1%E5%8B%99%E6%91%98%E8%A6%81%E8%88%87%E6%A5%AD%E7%B8%BE%E6%A6%82%E8%A6%BD) [Financial Highlights](index=1&type=section&id=%E8%B2%A1%E5%8B%99%E6%91%98%E8%A6%81) H1 2025 revenue was HK$3.037 billion, with losses narrowing 34.4% to HK$435.3 million due to optimized selling expenses, maintaining a 58.1% gross margin, and an interim dividend of HK$0.08 per share proposed Key Financial Indicators for H1 2025 | Indicator | H1 2025 (HK$ Thousand) | H1 2024 (HK$ Thousand) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Revenue | 3,036,826 | 3,131,155 | -3.0% | | Gross Profit | 1,764,493 | 1,836,435 | -3.9% | | Gross Margin | 58.1% | 58.7% | -0.6pp | | Loss Before Income Tax | (456,361) | (810,723) | +43.7% (Loss Reduction) | | Loss for the Period | (435,329) | (663,745) | +34.4% (Loss Reduction) | - The Board recommended an interim dividend of **HK$0.08 per share**[2](index=2&type=chunk) - Through strategic optimization, the Group significantly reduced selling expenses while maintaining a stable gross margin, leading to a substantial year-on-year reduction in losses[3](index=3&type=chunk) [Consolidated Financial Statements](index=2&type=section&id=%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8) [Condensed Consolidated Interim Statement of Comprehensive Income](index=2&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E4%B8%AD%E6%9C%9F%E5%85%A8%E9%9D%A2%E6%94%B6%E5%85%A5%E8%A1%A8) For H1 2025, Group revenue was HK$3.037 billion, a 3.0% decrease, with operating loss narrowing from HK$939 million to HK$526 million due to expense control, resulting in a 34.4% reduction in loss attributable to equity holders to HK$435 million Summary of Consolidated Statement of Comprehensive Income | Item (HK$ Thousand) | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Revenue | 3,036,826 | 3,131,155 | | Gross Profit | 1,764,493 | 1,836,435 | | Selling and Distribution Expenses | (1,909,910) | (2,201,429) | | General and Administrative Expenses | (450,001) | (565,377) | | Operating Loss | (526,357) | (938,535) | | Loss for the Period | (435,329) | (663,745) | | Basic Loss Per Share | (0.0822) HK$ | (0.1200) HK$ | - Selling and distribution expenses decreased by **13.2%** year-on-year, and general and administrative expenses decreased by **20.4%** year-on-year, primarily contributing to the narrowed loss[4](index=4&type=chunk) [Condensed Consolidated Interim Statement of Financial Position](index=4&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E4%B8%AD%E6%9C%9F%E8%B3%87%E7%94%A2%E8%B2%A0%E5%82%B5%E8%A1%A8) As of June 30, 2025, total assets decreased to HK$9.050 billion, primarily due to reduced cash, while total liabilities fell to HK$1.273 billion, with total equity at HK$7.777 billion and net current assets at HK$5.368 billion Summary of Statement of Financial Position | Item (HK$ Thousand) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Assets | 9,049,784 | 10,305,598 | | Total Liabilities | 1,272,932 | 1,640,999 | | Total Equity | 7,776,852 | 8,664,599 | | Cash and Cash Equivalents | 3,734,470 | 5,216,379 | | Net Current Assets | 5,368,033 | 6,350,872 | - Trade receivables and inventories within current assets both decreased, from **HK$1.208 billion** to **HK$919 million** and from **HK$488 million** to **HK$399 million**, respectively[7](index=7&type=chunk) [Notes to the Condensed Consolidated Interim Financial Information](index=6&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E4%B8%AD%E6%9C%9F%E8%B2%A1%E5%8B%99%E8%B3%87%E6%96%99%E9%99%84%E8%A8%BB) [Basis of Preparation and Accounting Policies](index=6&type=section&id=%E7%B7%A8%E8%A3%BD%E5%9F%BA%E6%BA%96%E8%88%87%E6%9C%83%E8%A8%88%E6%94%BF%E7%AD%96) This interim financial information is prepared under HKAS 34, with accounting policies consistent with the 2024 annual report, and adopted HKAS 21 amendments on January 1, 2025, with no significant impact - The financial information is prepared based on **HKAS 34**[9](index=9&type=chunk) - Accounting policies are consistent with the prior year, and amendments to standards effective during the period have been adopted[10](index=10&type=chunk)[11](index=11&type=chunk) [Segment Information](index=7&type=section&id=%E5%88%86%E9%83%A8%E8%B3%87%E6%96%99) The Group operates as a single segment, manufacturing, selling, and distributing cleaning products, with executive directors assessing performance on a consolidated basis, thus no separate segment analysis is presented - In accordance with **HKFRS 8**, the Group has only one single operating segment, the cleaning products business[16](index=16&type=chunk) [Revenue Analysis](index=8&type=section&id=%E6%94%B6%E7%9B%8A%E5%88%86%E6%9E%90) H1 2025 total revenue was HK$3.037 billion, with laundry care products contributing 87.0%, personal care products growing 12.4% year-on-year, and all revenue sourced from customers in China Revenue by Product Category | Product Category | H1 2025 Revenue (HK$ Thousand) | H1 2024 Revenue (HK$ Thousand) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Laundry Care Products | 2,641,020 | 2,767,339 | -4.6% | | Personal Care Products | 215,676 | 191,870 | +12.4% | | Home Care Products | 180,130 | 171,946 | +4.8% | - All of the Group's revenue is derived from customers in China[17](index=17&type=chunk) [Dividends](index=11&type=section&id=%E8%82%A1%E6%81%AF) The Board proposed an interim dividend of HK$0.08 per share for H1 2025, totaling HK$442 million, subject to approval, and a 2024 final dividend of HK$0.06 per share, totaling HK$333 million, was paid during the period - An interim dividend of **HK$0.08 per share** for 2025 was proposed[26](index=26&type=chunk) - A final dividend of **HK$0.06 per share** for 2024, totaling approximately **HK$333 million**, was paid[25](index=25&type=chunk)[26](index=26&type=chunk) [Management Discussion and Analysis](index=15&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%A4%E8%A8%8E%E8%AB%96%E8%88%87%E5%88%86%E6%9E%90) [Business Review and Outlook](index=15&type=section&id=%E6%A5%AD%E5%8B%99%E5%9B%9E%E9%A1%A7%E5%8F%8A%E5%B1%95%E6%9C%9B) H1 2025 saw effective control of selling expenses, increased user reach through knowledge marketing and omnichannel expansion, and growth in offline channels, with future strategies focusing on comprehensive solutions, omnichannel penetration, digital transformation, and sustainability - Management optimization: Effective control of selling and distribution expenses, decreasing by **13.2%** year-on-year[34](index=34&type=chunk) - Increased user reach: The 'Amazing Future Laundry Technology II' IP project achieved over **1.8 billion** online exposures, attracting younger target demographics[35](index=35&type=chunk) - Omnichannel expansion: Offline channels expanded with year-on-year growth in distributors and retail stores; online channels maintained a leading position during the '618 Shopping Festival' across multiple platforms[35](index=35&type=chunk) - Future strategy: Focus on product innovation, enhancing omnichannel networks, knowledge marketing, digital transformation, and sustainable development[38](index=38&type=chunk) [Financial Review](index=17&type=section&id=%E8%B2%A1%E5%8B%99%E5%9B%9E%E9%A1%A7) H1 2025 saw significant financial improvement, with revenue at HK$3.037 billion (-3.0%), operating loss narrowing 43.9% and net loss 34.4% due to expense reductions, gross margin stable at 58.1%, and cash balances decreasing due to dividends and share awards [Revenue, Gross Profit, and Gross Margin](index=17&type=section&id=%E6%94%B6%E7%9B%8A%E3%80%81%E6%AF%9B%E5%88%A9%E8%88%87%E6%AF%9B%E5%88%A9%E7%8E%87) Total revenue slightly decreased by 3.0% to HK$3.037 billion, with offline channels growing 15.0% and online sales declining 8.9%; gross profit was HK$1.765 billion, and gross margin slightly decreased to 58.1% due to higher raw material costs Revenue Contribution by Sales Channel | Sales Channel | H1 2025 Revenue (HK$ Thousand) | Share (%) | H1 2024 Revenue (HK$ Thousand) | Share (%) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Online Sales Channels | 2,068,455 | 68.1 | 2,271,654 | 72.6 | (8.9) | | Offline Distributors | 836,812 | 27.6 | 727,737 | 23.2 | 15.0 | | Direct Sales to Key Accounts | 131,559 | 4.3 | 131,764 | 4.2 | (0.2) | - Gross margin slightly decreased from **58.7%** to **58.1%**, primarily due to increased costs of key raw materials[46](index=46&type=chunk) [Operating Expenses and Profitability](index=19&type=section&id=%E7%B6%93%E7%87%9F%E9%96%8B%E6%94%AF%E8%88%87%E7%87%9F%E5%88%A9%E8%83%BD%E5%8A%9B) Selling and distribution expenses decreased 13.2% to HK$1.910 billion, and general and administrative expenses fell 20.4% to HK$450 million due to efficiency, leading to operating loss narrowing from HK$939 million to HK$526 million and loss attributable to equity holders decreasing 34.4% to HK$435 million - Selling and distribution expenses decreased by **13.2%** year-on-year due to optimized marketing and omnichannel sales strategies[49](index=49&type=chunk) - General and administrative expenses decreased by **20.4%** year-on-year, primarily due to reduced staff costs from improved operational efficiency[50](index=50&type=chunk) - Operating loss decreased by **43.9%** year-on-year, from **HK$938.5 million** to **HK$526.4 million**[52](index=52&type=chunk) [Liquidity and Financial Resources](index=20&type=section&id=%E6%B5%81%E5%8B%95%E8%B3%87%E9%87%91%E8%88%87%E8%B2%A1%E5%8B%99%E8%B3%87%E6%BA%90) As of June 30, 2025, total bank deposits and cash decreased 17.3% to HK$4.361 billion due to operating outflows, dividends, and share purchases; the Group had no bank borrowings, and its current ratio improved from 5.46x to 5.92x, indicating a robust financial position - Total bank deposits and cash decreased by **17.3%** from **HK$5.271 billion** to **HK$4.361 billion**[58](index=58&type=chunk) - The current ratio (current assets/current liabilities) improved to approximately **5.92 times** from **5.46 times** at the beginning of the year[58](index=58&type=chunk) - As of the end of the reporting period, the Group had no bank borrowings[58](index=58&type=chunk) [Corporate Governance and Other Information](index=22&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%8F%8A%E5%85%B6%E4%BB%96%E8%B3%87%E6%96%99) [Interim Dividend and Share Transfer Registration](index=22&type=section&id=%E4%B8%AD%E6%9C%9F%E8%82%A1%E6%81%AF%E5%8F%8A%E8%82%A1%E4%BB%BD%E9%81%8E%E6%88%B6%E7%99%BB%E8%A8%98) The Board proposed an interim dividend of HK$0.08 per share, payable on September 30, 2025, to shareholders registered on September 22, 2025, with specific share transfer registration suspension dates detailed for eligibility - An interim dividend of **HK$0.08 per share** was proposed[68](index=68&type=chunk) - The record date for the interim dividend is **September 22, 2025**, with payment on **September 30, 2025**[68](index=68&type=chunk) [Corporate Governance Practices](index=23&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%B8%B8%E8%A6%8F) The company complied with HKEX Corporate Governance Code provisions, adopted the Model Code for directors' securities transactions with all directors confirming compliance, and the audit committee reviewed the interim results - The Board believes the company complied with the applicable code provisions of the **Corporate Governance Code** for the six months ended June 30, 2025[71](index=71&type=chunk) - The Audit Committee reviewed the Group's unaudited condensed consolidated financial information with management[73](index=73&type=chunk) [Use of Net Proceeds from Global Offering](index=24&type=section&id=%E5%85%A8%E7%90%83%E7%99%BC%E5%94%AE%E6%89%80%E5%BE%97%E6%AC%BE%E9%9D%9C%E9%A1%8D%E7%94%A8%E9%80%94) The company disclosed the use of HK$11.004 billion net IPO proceeds, with HK$2.166 billion unutilized as of June 30, 2025, allocated for business expansion, brand awareness, and R&D, expected to be fully utilized by end of 2028 Unutilized Net Proceeds by Intended Use (HK$ Million) | Intended Use | Unutilized Amount as of June 30, 2025 | | :--- | :--- | | Business Expansion and Capacity Expansion | 608 | | Enhancing Brand Awareness and Sales Network | 1,527 | | Strengthening Research and Development Capabilities | 31 | | **Total** | **2,166** | - For the six months ended June 30, 2025, approximately **HK$1.194 billion** of net proceeds were utilized[77](index=77&type=chunk)

[Definitions](index=3&type=section&id=Definitions) [Company Information](index=8&type=section&id=Company%20Information) [Business Highlights](index=10&type=section&id=Business%20Highlights) [Advancing Clinical Trials](index=10&type=section&id=Advancing%20Clinical%20Trials) LAE102 (ActRIIA monoclonal antibody) Phase I SAD study for obesity completed in China, showing good tolerability and sustained pathway blockade, with Phase I MAD study initiated in China and a Phase I clinical trial started in the US in collaboration with Eli Lilly - LAE102 Phase I SAD study completed in China, showing good tolerability, no serious adverse events reported, and dose-dependent increase in Activin A levels, indicating sustained pathway blockade[14](index=14&type=chunk)[15](index=15&type=chunk) - LAE102 Phase I MAD study initiated recruitment in China by end of March 2025, aiming to assess safety, tolerability, pharmacokinetics, and pharmacodynamics[16](index=16&type=chunk) - Clinical collaboration agreement signed with Eli Lilly, with Lilly responsible for the US Phase I clinical trial, the Group retaining global rights, and the first subject dosed in the US Phase I clinical trial in May 2025[16](index=16&type=chunk) [ActRII Product Portfolio](index=10&type=section&id=ActRII%20Product%20Portfolio) Beyond LAE102, the company is developing LAE103 (ActRIIB selective antibody) and LAE123 (ActRIIA/IIB dual antagonist monoclonal antibody), both with IND-enabling studies initiated, LAE103 received FDA IND approval for Phase I, and LAE123 is planned for Phase I in 2026 - LAE103 (ActRIIB selective antibody) and LAE123 (ActRIIA/IIB dual antagonist monoclonal antibody) initiated IND-enabling studies in 2024[17](index=17&type=chunk) - LAE103's IND application submitted to US FDA by end of June 2025, received IND approval in July 2025, with Phase I clinical study planned for H2 2025[19](index=19&type=chunk) - Preclinical results for LAE102, LAE103, and LAE123 show them to be high-affinity functional antagonists, inhibiting ligands causing muscle atrophy and fat accumulation; LAE102 demonstrates excellent potential in weight management, and LAE123 can treat diseases requiring complete ActRIIA and ActRIIB inhibition[18](index=18&type=chunk) [LAE002 (afuresertib) + Fulvestrant for HR+/HER2– Breast Cancer, Phase III](index=11&type=section&id=LAE002%20%28afuresertib%29%20%2B%E6%B0%9F%E7%BB%B4%E5%8F%B8%E7%BE%A4%E6%B2%BB%E7%96%97HR%2B%2FHER2%E2%80%93%20Breast%20Cancer%2C%20Phase%20III) LAE002 (afuresertib) combined with fulvestrant for HR+/HER2– breast cancer Phase III clinical trial AFFIRM–205 has initiated recruitment in China, with subject enrollment planned for Q4 2025 and NDA submission in H1 2026 - LAE002 (afuresertib) combined with fulvestrant for HR+/HER2– locally advanced or metastatic breast cancer Phase III clinical trial AFFIRM–205 initiated recruitment in China in May 2024[20](index=20&type=chunk) - Subject enrollment is planned for completion in Q4 2025, with New Drug Application (NDA) submission to China CDE in H1 2026[20](index=20&type=chunk) [LAE002 (afuresertib) + LAE001/Prednisone for mCRPC, Phase II](index=11&type=section&id=LAE002%20%28afuresertib%29%20%2B%20LAE001%E2%81%84%E6%B3%BC%E5%B0%BC%E6%9D%BE%E6%B2%BB%E7%99%8CmCRPC%2C%20Phase%20II) LAE002 (afuresertib) combined with LAE001 for mCRPC Phase II international multi-center clinical trial completed, showing a median rPFS of **8.1 months**, good efficacy, and tolerability, with FDA approval for Phase III pivotal trial protocol - LAE002 (afuresertib) combined with LAE001 for mCRPC Phase II international multi-center clinical trial completed in 2024[21](index=21&type=chunk) - Median rPFS was **8.1 months**, a significant improvement compared to **2-4 months** for standard treatment, with the combination therapy generally well-tolerated[21](index=21&type=chunk) - The Group received FDA approval for the LAE201 Phase III pivotal trial protocol in mCRPC patients after SOC treatment[21](index=21&type=chunk) [Preclinical Candidate (PCC) Progress](index=12&type=section&id=Preclinical%20Candidate%20%28PCC%29%20Progress) In addition to ActRII series drugs, the company has multiple PCC advancements in oncology, including PI3Kα mutant selective inhibitor LAE118 entering IND-enabling studies, USP1 inhibitor LAE120's IND application submitted and approved by FDA, and WRN mutant selective inhibitor LAE122 completing PCC confirmation - PI3Kα mutant selective inhibitor LAE118 entered IND-enabling study phase in Q4 2024[22](index=22&type=chunk) - USP1 inhibitor LAE120's IND application submitted to FDA in January 2025, and a 'Study May Proceed' letter received in February 2025[22](index=22&type=chunk) - WRN mutant selective inhibitor LAE122 completed PCC confirmation in March 2025[22](index=22&type=chunk) [Expected Milestones in H2 2025](index=12&type=section&id=Expected%20Milestones%20in%20H2%202025) The company expects to complete subject recruitment for AFFIRM–205 China Phase III trial, initiate LAE103 Phase I clinical study, and announce key results from LAE102 China Phase I MAD study and US Phase I clinical trial in H2 2025 - Complete subject recruitment for AFFIRM–205 China Phase III trial[23](index=23&type=chunk) - Initiate LAE103 Phase I clinical study[24](index=24&type=chunk) - Announce key results from LAE102 China Phase I MAD study and US Phase I clinical trial[25](index=25&type=chunk) [Financial Summary](index=13&type=section&id=Financial%20Summary) Financial Summary for the Six Months Ended June 30, 2025 | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | R&D Expenses | 105,192 | 126,148 | (20,956) | -16.6% | | Administrative Expenses | 42,321 | 30,380 | 11,941 | 39.3% | | Loss for the Period | 129,637 | 143,706 | (14,069) | -9.8% | | Total Comprehensive Loss for the Period | 133,399 | 138,548 | (5,149) | -3.7% | - The decrease in R&D expenses was primarily due to a **RMB 17.8 million** milestone payment related to the AFFIRM-205 Phase III clinical trial incurred in H1 2024, with no such expense in the current reporting period[26](index=26&type=chunk) - The increase in administrative expenses was mainly due to higher equity-settled share-based payment expenses[26](index=26&type=chunk) [Management Discussion and Analysis](index=14&type=section&id=Management%20Discussion%20and%20Analysis) [Company Overview and Strategic Focus](index=14&type=section&id=Company%20Overview%20and%20Strategic%20Focus) The company is a clinical-stage biopharmaceutical company focused on metabolic diseases, cancer, and liver fibrosis, with seven clinical trials initiated, an experienced management and R&D team, a comprehensive ActRII and cancer pipeline, and plans to seek strategic collaborations for accelerated development and commercialization - The company is a science-driven, clinical-stage biopharmaceutical company focused on metabolic diseases, cancer, and liver fibrosis[27](index=27&type=chunk) - As of June 30, 2025, seven clinical trials have been initiated for LAE102, LAE002 (afuresertib), LAE001, and LAE005[27](index=27&type=chunk) - The company has an excellent R&D team of **60** employees, including **11** PhDs and **33** Masters[27](index=27&type=chunk) - A comprehensive ActRII product portfolio (LAE102, LAE103, LAE123) and oncology pipeline (LAE002 (afuresertib), LAE001, and seven other preclinical candidates) has been established[28](index=28&type=chunk)[29](index=29&type=chunk) - Plans to seek strategic partners to accelerate the development and commercialization of candidate drugs[30](index=30&type=chunk) [Market Opportunity Analysis](index=15&type=section&id=Market%20Opportunity%20Analysis) Global obesity patients are projected to exceed **1.2 billion** by 2030, driving urgent treatment demand for associated diseases, while significant unmet medical needs persist in cancer treatment, particularly for HR+/HER2- metastatic breast cancer, mCRPC, PROC, and TNBC, where existing therapies are limited and suboptimal - The global obese population is

Financial Performance - For the six months ended June 30, 2025, the Group's revenue was RMB 80.7 million, a decrease of 10.6% compared to RMB 90.3 million for the same period in 2024[2][3][12]. - The gross profit for the same period was RMB 16.2 million, with a gross profit margin of 20.1%, representing a decrease of 38.6% in gross profit and a decline of 9.2 percentage points in margin compared to the previous year[3][12]. - The Group recorded a net loss of RMB 9.9 million, resulting in a net loss margin of 12.3%, compared to a net loss of RMB 4.8 million and a margin of 5.3% for the same period in 2024[4][12]. - Loss attributable to owners of the Company was RMB 7.3 million, an increase from RMB 5.3 million in the prior year[5][12]. - Basic and diluted loss per share attributable to owners of the Company was RMB 0.551 cents, compared to RMB 0.395 cents for the same period in 2024[6][12]. - The loss before tax for the period was RMB 8,700,000, compared to a loss of RMB 4,388,000 in the same period last year, indicating a worsening financial position[32]. - For the six months ended June 30, 2025, the company reported a loss before tax of RMB 7,341,000, compared to a loss of RMB 5,267,000 for the same period in 2024, representing an increase in loss of approximately 39.4%[55]. - Income tax expense increased to RMB 1,186,000 in 2025 from RMB 411,000 in 2024, reflecting higher tax obligations despite losses[45]. Assets and Liabilities - Non-current assets as of June 30, 2025, amounted to RMB 320.9 million, an increase from RMB 309.9 million at the end of 2024[14][15]. - Current assets totaled RMB 442.0 million as of June 30, 2025, down from RMB 463.8 million at the end of 2024[14][15]. - Current liabilities totaled RMB 258,460,000, down from RMB 276,763,000, indicating a reduction of 6.6%[16]. - Non-current liabilities increased significantly to RMB 41,702,000 from RMB 24,877,000, representing a rise of 67.5%[16]. - Borrowings under current liabilities rose to RMB 43,348,000, up 10.4% from RMB 39,311,000[16]. - The company reported a total of RMB 504,449,000 in total assets less current liabilities, reflecting an increase of 1.1% from RMB 496,910,000[16]. - As of June 30, 2025, the Group's total assets were approximately RMB 762.9 million, with total liabilities of RMB 300.2 million, resulting in a debt-to-asset ratio of approximately 39.3%[142]. Revenue Breakdown - The solid waste treatment segment reported external sales of RMB 32,357,000, down from RMB 36,872,000, reflecting a decline of 13.6%[32]. - The oilfield auxiliary services segment generated revenue of RMB 48,352,000, a decrease of 9.9% from RMB 53,472,000 in the previous year[37]. - The hazardous waste incineration solutions segment saw revenue drop to RMB 10,994,000 from RMB 17,939,000, a decrease of 38.8%[37]. - Revenue from hazardous waste incineration solutions decreased by 38.5% from RMB 17.9 million for the six months ended June 30, 2024, to RMB 11.0 million for the same period in 2025[82]. - Revenue from oilfield auxiliary services decreased by 9.5% from RMB 53.5 million for the six months ended June 30, 2024, to RMB 48.4 million for the same period in 2025[83]. - Revenue from cement plant parallel kiln co-treatment services increased by 48.0% from RMB 12.3 million for the six months ended June 30, 2024, to RMB 18.2 million for the same period in 2025[84]. - Revenue from oil sludge thermal desorption treatment services decreased by 93.2% from RMB 5.9 million for the six months ended June 30, 2024, to RMB 0.4 million for the same period in 2025[85]. - Revenue from other services increased by 250.0% from RMB 0.8 million for the six months ended June 30, 2024, to RMB 2.8 million for the same period in 2025[86]. Expenses and Costs - The Group's administrative expenses were RMB 25.2 million, a decrease from RMB 27.1 million in the previous year[12]. - Total depreciation and amortization expenses for the first half of 2025 amounted to RMB 23,061,000, significantly higher than RMB 9,134,000 in the first half of 2024, indicating an increase of approximately 153.5%[55]. - Research and development costs increased to RMB 4,847,000 in the first half of 2025, up from RMB 3,336,000 in the same period of 2024, reflecting a growth of approximately 45.3%[55]. - Cost of services increased by 0.9% from RMB 63.9 million to RMB 64.5 million, mainly due to increased revenue from cement plant parallel kiln co-treatment services[89]. - The gross profit of hazardous waste incineration solutions decreased by 35% from RMB 11.7 million to RMB 7.6 million, mainly due to a 38.5% drop in revenue[104]. - The gross profit of oilfield auxiliary services decreased by 27.8% from RMB 9.0 million to RMB 6.5 million, primarily due to a 9.5% decrease in revenue[102]. - The gross profit of cement plant parallel kiln co-treatment services increased by 5.6% from RMB 3.6 million to RMB 3.8 million, attributed to a 48.0% increase in revenue[103]. Corporate Governance and Compliance - The financial statements are prepared in accordance with International Accounting Standards, ensuring compliance with applicable disclosure requirements[21]. - The company has established written guidelines to regulate dealings by relevant employees who may possess inside information regarding the company's securities[165]. - The company has fully complied with the corporate governance code provisions during the reporting period[163]. - The Audit Committee has reviewed the interim results for the six months ended June 30, 2025[176]. Future Outlook and Strategy - The Group plans to enhance its market position in hazardous waste incineration by improving treatment techniques and expanding customer relationships both domestically and internationally[148]. - The Group aims to capitalize on the growing demand for solid waste treatment driven by national policies supporting the industry, including initiatives for "Waste-Free City" and comprehensive utilization of bulk solid waste[144]. - The Group will explore new solid waste treatment applications, including waste plastics and waste paper residues, through the industrialization of pyrolysis technology[150]. - The Group intends to adopt various project models to enhance competitiveness and risk management in solid waste treatment projects, including the operation and maintenance services project in Karamay[151]. - The Group will actively explore the application of artificial intelligence in environmental technology to improve operational efficiency and environmental data analysis capabilities[152]. - The Group's capital strength will be leveraged to enter the solid waste treatment sector through technology cooperation, investment, and mergers and acquisitions, aiming to build an integrated environmental industry group[156]. Employee and Remuneration - The Group employed 392 employees as of June 30, 2025, an increase from 341 employees as of December 31, 2024, with over 250 personnel dedicated to R&D and project management[157]. - The Group's remuneration policy considers individual performance and market levels, with a focus on attracting and retaining skilled personnel in R&D and project execution[158]. Capital and Funding - The company raised approximately HK$259.4 million (around RMB 227.2 million) from its global offering, utilizing RMB 217.1 million, which represents approximately 95.6% of the net proceeds as of June 30, 2025[167]. - The company has reallocated unutilized net proceeds for establishing a research and engineering center, extending the expected utilization timeline from the second half of 2024 to the second half of 2026[172]. - The total utilized amount of net proceeds as of June 30, 2025, is RMB 217.1 million, with an unutilized amount of RMB 10.1 million remaining[174]. Dividends - The company did not declare or pay any dividends for the six months ended June 30, 2025, consistent with the previous year[52]. - The company does not recommend the payment of an interim dividend for the six months ended June 30, 2025[175].