香港交易及結算所有限公司、香港聯合交易所有限公司及香港中央結算有限公司對本公 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，概不會就本 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。 DOWELL SERVICE GROUP CO. LIMITED* 東原仁知城市運營服務集團股份有限公司 （於中華人民共和國註冊成立的股份有限公司） （股份代號：2352） 截至2025年6月30日止六個月之 中期業績公告 財務摘要 — 1 — • 本集團收益約為人民幣793.7百萬元，較2024年同期約人民幣769.9百萬元增加約3.1%。 • 本集團業務分部產生的收益如下： － 物業城市服務的收益約為人民幣503.3百萬元，佔總收益約63.4%，較2024年同 期約人民幣462.4百萬元增加約8.8%； － 美好生活服務的收益約為人民幣116.7百萬元，佔總收益約14.7%，較2024年同 期約人民幣115.5百萬元增加約1.0%；及 － 涉外、科技、醫療等綜合服務的收益約為人民幣173.7百萬元，佔總收益約 21.9%，較2024年同期約人民幣192.0百萬元減少約9.5%。 ...

Overview [1. Financial Highlights](index=1&type=section&id=1.%20Financial%20Highlights) The Group's total revenue, adjusted EBITDA, and adjusted net profit significantly decreased by 17.1%, 35.9%, and 56.6% respectively, while total and net assets remained stable with a healthy gearing ratio Financial Highlights for the Six Months Ended June 30, 2025 | Metric | Amount (RMB million) | YoY Change | | :--- | :--- | :--- | | Total Revenue | 894.8 | -17.1% | | Adjusted EBITDA | 247.4 | -35.9% | | Adjusted Net Profit | 57.1 | -56.6% | Financial Position as of June 30, 2025 | Metric | Amount (RMB million) | | :--- | :--- | | Total Assets | 10,710.7 | | Net Assets | 5,992.2 | - The Group's gearing ratio is approximately **42.3%**, indicating a healthy level[5](index=5&type=chunk) Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income [Overview of Profit or Loss Statement](index=2&type=section&id=Overview%20of%20Profit%20or%20Loss%20Statement) During the reporting period, the Group's revenue decreased by 17.1% year-on-year, with cost of sales increasing by 8.1%, leading to a significant 38.8% reduction in gross profit, and profit for the period decreased by 56.4%, with profit attributable to owners of the parent turning into a loss Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the Six Months Ended June 30) | Metric (RMB thousand) | 2025 (Unaudited) | 2024 (Unaudited) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 894,786 | 1,079,786 | -17.1% | | Cost of Sales | (539,374) | (498,948) | +8.1% | | Gross Profit | 355,412 | 580,838 | -38.8% | | Other Income and Gains | 55,762 | 71,543 | -22.1% | | Selling Expenses | (54,297) | (98,046) | -44.6% | | Administrative Expenses | (196,236) | (240,309) | -18.4% | | Net Other Expenses | (22,332) | (59,675) | -62.6% | | Finance Costs | (67,351) | (68,419) | -1.6% | | Profit Before Tax | 70,958 | 185,932 | -61.9% | | Income Tax Expense | (21,597) | (72,767) | -70.3% | | Profit for the Period | 49,361 | 113,165 | -56.4% | | Profit attributable to owners of the parent | (4,075) | 104,802 | Turned to loss | | Profit attributable to non-controlling interests | 53,436 | 8,363 | +539.0% | (Loss)/Earnings Per Share Attributable to Ordinary Equity Holders of the Parent (For the Six Months Ended June 30) | Metric | 2025 (Unaudited) | 2024 (Unaudited) | | :--- | :--- | :--- | | Basic and diluted (loss)/earnings per share | RMB (0.0010) | RMB 0.0248 | Interim Condensed Consolidated Statement of Financial Position [Overview of Financial Position](index=4&type=section&id=Overview%20of%20Financial%20Position) As of June 30, 2025, the Group's total assets slightly decreased, non-current assets remained stable, and current assets declined due to reduced cash and cash equivalents, while current liabilities decreased due to reduced contract liabilities, and net assets slightly increased Interim Condensed Consolidated Statement of Financial Position (As of June 30) | Metric (RMB thousand) | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | **Non-current assets** | | | | Property, plant and equipment | 3,443,788 | 3,470,600 | | Goodwill | 2,229,574 | 2,229,574 | | Total non-current assets | 6,976,905 | 7,033,089 | | **Current assets** | | | | Cash and cash equivalents | 1,695,488 | 2,520,311 | | Total current assets | 3,733,808 | 4,222,337 | | **Current liabilities** | | | | Contract liabilities | 94,034 | 835,155 | | Total current liabilities | 2,829,903 | 3,463,788 | | Net current assets | 903,905 | 758,549 | | **Total equity** | | | | Net assets/Total equity | 5,992,180 | 5,937,992 | Notes to the Interim Condensed Consolidated Financial Information [1. Company and Group Information](index=6&type=section&id=1.%20Company%20and%20Group%20Information) Minsheng Education Group Company Limited, incorporated in the Cayman Islands on December 13, 2005, operates as an investment holding company primarily providing education services in China - The company was incorporated in the Cayman Islands and primarily provides education services in China[11](index=11&type=chunk) [2.1 Basis of Preparation](index=6&type=section&id=2.1%20Basis%20of%20Preparation) The Group's unaudited interim condensed consolidated financial information for the period is prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" issued by the International Accounting Standards Board and presented in RMB - Financial information is prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" and presented in RMB[12](index=12&type=chunk) [2.2 Changes in Accounting Policies and Disclosures](index=6&type=section&id=2.2%20Changes%20in%20Accounting%20Policies%20and%20Disclosures) During the reporting period, the Group first adopted the revised International Accounting Standard 21 "Lack of Exchangeability" - First adoption of the revised International Accounting Standard 21 "Lack of Exchangeability"[13](index=13&type=chunk) [3. Operating Segment Information](index=7&type=section&id=3.%20Operating%20Segment%20Information) The Group's business is divided into campus education and online education segments; during the reporting period, online education revenue significantly decreased, leading to a reduction in total segment revenue, while campus education revenue increased - The Group is divided into two reportable operating segments: campus education and online education services[14](index=14&type=chunk) Segment Revenue (For the Six Months Ended June 30, RMB thousand) | Segment | 2025 (Unaudited) | 2024 (Unaudited) | YoY Change | | :--- | :--- | :--- | :--- | | Campus Education | 782,801 | 752,217 | +4.1% | | Online Education | 111,985 | 327,569 | -65.8% | | **Total** | **894,786** | **1,079,786** | **-17.1%** | Segment Results (For the Six Months Ended June 30, RMB thousand) | Segment | 2025 (Unaudited) | 2024 (Unaudited) | | :--- | :--- | | Campus Education | 268,826 | 283,924 | | Online Education | (98,177) | (2,372) | | **Total Segment Results** | **170,649** | **281,552** | Segment Assets and Liabilities (RMB thousand) | Metric | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | **Segment Assets** | | | | Campus Education | 9,983,401 | 10,463,743 | | Online Education | 2,436,361 | 2,516,331 | | **Segment Liabilities** | | | | Campus Education | 2,781,874 | 3,515,987 | | Online Education | 2,441,343 | 2,426,207 | [4. Revenue, Other Income and Gains](index=9&type=section&id=4.%20Revenue%2C%20Other%20Income%20and%20Gains) Total revenue decreased by 17.1% year-on-year, primarily due to a significant decline in remote education service income, while other income and gains also decreased due to reduced short-term investment income Revenue from Contracts with Customers by Type of Service (For the Six Months Ended June 30, RMB thousand) | Service Type | 2025 (Unaudited) | 2024 (Unaudited) | YoY Change | | :--- | :--- | :--- | :--- | | Tuition fees | 717,682 | 690,920 | +3.9% | | Accommodation fees | 65,119 | 61,297 | +6.2% | | Remote education services | 50,184 | 209,296 | -76.0% | | Teacher training services | 9,262 | 13,570 | -31.7% | | Online course services | 14,567 | 10,676 | +36.4% | | Sale of books | 6,406 | 15,615 | -59.0% | | Other education services | 31,566 | 78,412 | -59.7% | | **Total** | **894,786** | **1,079,786** | **-17.1%** | Other Income and Gains (For the Six Months Ended June 30, RMB thousand) | Type | 2025 (Unaudited) | 2024 (Unaudited) | YoY Change | | :--- | :--- | :--- | :--- | | Short-term investment income | 8,809 | 22,071 | -60.1% | | Rental income | 10,693 | 3,756 | +184.7% | | Bank interest income | 4,271 | 4,080 | +4.7% | | Government grants | 14,644 | 13,382 | +9.4% | | Net exchange gain | 4,763 | 9,202 | -48.3% | | **Total** | **55,762** | **71,543** | **-22.1%** | Revenue from Contracts with Customers by Segment and Timing of Recognition (For the Six Months Ended June 30, RMB thousand) | Segment/Timing of Recognition | 2025 (Unaudited) | 2024 (Unaudited) | | :--- | :--- | :--- | | **Campus Education** | | | | Recognized over time | 782,801 | 752,217 | | **Online Education** | | | | Recognized over time | 103,116 | 305,564 | | Recognized at a point in time | 8,809 | 22,005 | | **Total** | **894,786** | **1,079,786** | [5. Profit Before Tax](index=11&type=section&id=5.%20Profit%20Before%20Tax) Profit before tax was influenced by various factors, including depreciation and amortization, employee benefit expenses, and impairment losses on financial assets; during the reporting period, impairment losses on financial assets significantly decreased, while employee benefit expenses declined Items Deducted From/(Credited To) Profit Before Tax (For the Six Months Ended June 30, RMB thousand) | Item | 2025 (Unaudited) | 2024 (Unaudited) | | :--- | :--- | :--- | | Depreciation of property, plant and equipment | 85,013 | 83,433 | | Depreciation of right-of-use assets | 15,603 | 19,340 | | Amortization of other intangible assets | 15,491 | 40,053 | | Total employee benefit expenses | 367,095 | 391,146 | | Impairment of trade receivables | 17,409 | 5,553 | | Impairment of other financial assets | 458 | 52,588 | | Investment income from short-term investments | (8,809) | (22,071) | | Fair value loss/(gain) on equity investments | 2,676 | (4,182) | [6. Income Tax Expense](index=12&type=section&id=6.%20Income%20Tax%20Expense) Income tax expense significantly decreased during the reporting period, primarily due to changes in current tax levies and deferred tax Income Tax Expense (For the Six Months Ended June 30, RMB thousand) | Type | 2025 (Unaudited) | 2024 (Unaudited) | | :--- | :--- | :--- | | Current – Mainland China | 23,875 | 127,203 | | Deferred | (2,278) | (54,436) | | **Total** | **21,597** | **72,767** | [7. Interim Dividends](index=12&type=section&id=7.%20Interim%20Dividends) The Board of Directors did not declare any interim dividends for the six months ended June 30, 2025 - The Board of Directors did not declare any interim dividends for the six months ended June 30, 2025[24](index=24&type=chunk) [8. (Loss)/Earnings Per Share Attributable to Ordinary Equity Holders of the Parent](index=12&type=section&id=8.%20(Loss)%2FEarnings%20Per%20Share%20Attributable%20to%20Ordinary%20Equity%20Holders%20of%20the%20Parent) During the reporting period, basic and diluted (loss)/earnings per share attributable to ordinary equity holders of the parent turned into a loss of RMB (0.0010), compared to a profit of RMB 0.0248 in the same period last year Calculation of Basic and Diluted (Loss)/Earnings Per Share (For the Six Months Ended June 30) | Metric | 2025 (Unaudited) | 2024 (Unaudited) | | :--- | :--- | :--- | | (Loss)/Profit attributable to owners of the parent (RMB thousand) | (4,075) | 104,802 | | Weighted average number of ordinary shares outstanding (shares) | 4,217,720,000 | 4,217,720,000 | | **Basic and diluted (loss)/earnings per share** | **RMB (0.0010)** | **RMB 0.0248** | - No adjustment was made for the dilutive effect as share options had an anti-dilutive impact on basic earnings per share[25](index=25&type=chunk) [9. Trade Receivables](index=13&type=section&id=9.%20Trade%20Receivables) As of June 30, 2025, total trade receivables amounted to RMB 367.4 million, with the highest proportion aged within one year, but receivables aged one to two years significantly increased Ageing Analysis of Trade Receivables (RMB thousand) | Ageing | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Within one year | 212,199 | 295,130 | | One to two years | 134,363 | 78,513 | | Two to three years | 19,220 | 9,360 | | Over three years | 1,650 | 848 | | **Total** | **367,432** | **383,851** | [10. Trade Payables](index=13&type=section&id=10.%20Trade%20Payables) As of June 30, 2025, total trade payables amounted to RMB 449.4 million, primarily due within one year, interest-free, and typically settled within 30 to 60 days Ageing Analysis of Trade Payables (RMB thousand) | Ageing | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Within one year | 277,190 | 407,255 | | One to two years | 90,148 | 86,539 | | Two to three years | 76,991 | 6,714 | | Over three years | 5,054 | 25 | | **Total** | **449,383** | **500,533** | - Trade payables are interest-free and generally settled within 30 to 60 days[29](index=29&type=chunk) [11. Contract Liabilities](index=14&type=section&id=11.%20Contract%20Liabilities) Contract liabilities significantly decreased from RMB 835.2 million at the end of 2024 to RMB 94.0 million as of June 30, 2025, primarily due to a reduction in short-term prepayments for tuition and accommodation fees Details of Contract Liabilities (RMB thousand) | Type | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Tuition fees | 10,200 | 685,090 | | Accommodation fees | 15,960 | 77,899 | | Remote education service fees | 8,342 | 8,888 | | Other education businesses | 59,397 | 63,171 | | **Total** | **94,034** | **835,155** | [12. Other Payables and Accrued Expenses](index=14&type=section&id=12.%20Other%20Payables%20and%20Accrued%20Expenses) Total other payables and accrued expenses decreased from RMB 776.7 million at the end of 2024 to RMB 652.5 million as of June 30, 2025, mainly due to a reduction in payables for property, plant, and equipment purchases Other Payables and Accrued Expenses (RMB thousand) | Type | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Accrued bonuses and other employee benefits | 65,832 | 87,901 | | Payables for purchase of property, plant and equipment | 168,254 | 281,677 | | Miscellaneous expenses collected from students | 173,570 | 138,234 | | Consideration payable for business combinations | 42,225 | 42,225 | | **Total** | **652,466** | **776,711** | [13. Events After the Reporting Period](index=14&type=section&id=13.%20Events%20After%20the%20Reporting%20Period) No significant events occurred after the reporting period for the Group - No significant events occurred after the reporting period for the Group[31](index=31&type=chunk) Business Review [Business Overview](index=15&type=section&id=Business%20Overview) The Group is a leading "Internet+" vocational education group in China, offering integrated services from enrollment to employment, covering eight major segments with an extensive education network and talent employment service system - The Group is a leading "Internet+" vocational education group in China, providing integrated services from enrollment to employment[32](index=32&type=chunk) - Business covers **eight major segments**, including campus education, online education services, vocational skill enhancement and training, and human resource services[32](index=32&type=chunk) - As of June 30, 2025, the Group operates or manages **10 schools** in China, with approximately **100,000 enrolled students** and a cumulative total of over **50 million students and users served**[32](index=32&type=chunk) [Key Business Progress During the Reporting Period](index=15&type=section&id=Key%20Business%20Progress%20During%20the%20Reporting%20Period) The Group secured a RMB 300 million revolving loan facility from China CITIC Bank International and significantly increased its enrollment plan for the 2025/2026 academic year, particularly for undergraduate programs [1. Revolving Loan Facility](index=15&type=section&id=1.%20Revolving%20Loan%20Facility) The Company entered into a facility letter with China CITIC Bank International Limited for a revolving loan facility of up to RMB 300,000,000 or its equivalent in HKD and USD - Obtained a revolving loan facility of up to **RMB 300 million** from China CITIC Bank International Limited, with a final repayment date no later than one year from the first drawdown date[33](index=33&type=chunk) [2. Significant Increase in Enrollment Plan](index=15&type=section&id=2.%20Significant%20Increase%20in%20Enrollment%20Plan) The Group's schools' enrollment plan for the 2025/2026 academic year significantly increased by approximately 24.0% compared to the previous academic year, with undergraduate program enrollment increasing by approximately 29.0% - The 2025/2026 academic year enrollment plan increased by approximately **24.0%** year-on-year, with undergraduate program enrollment increasing by approximately **29.0%**[34](index=34&type=chunk) [Development Strategy](index=16&type=section&id=Development%20Strategy) Supported by national policies, the Group will continue to focus on high-quality development of higher education, build a digital and intelligent service platform ecosystem for "learning, employment, and entrepreneurship," and promote the integration of education and high-tech to empower talent cultivation - Government policies support the modernization and high-quality development of vocational education, with the central government allocating **RMB 31.257 billion** in funds[35](index=35&type=chunk) [(1) High-Quality Development of Higher Education](index=16&type=section&id=(1)%20High-Quality%20Development%20of%20Higher%20Education) The Group's institutions will continue to increase resource investment, optimize teaching environments and equipment, strengthen professional teaching teams, and provide high-quality teaching services to promote high-quality student employment - Continue to increase resource investment, optimize teaching environments and equipment, and strengthen professional teaching teams[36](index=36&type=chunk) - Provide high-quality teaching services to promote high-quality student employment and cultivate high-quality applied vocational talents for the country[36](index=36&type=chunk) [(2) Building a Digital and Intelligent Service Platform Ecosystem for "Learning, Employment, and Entrepreneurship"](index=16&type=section&id=(2)%20Building%20a%20Digital%20and%20Intelligent%20Service%20Platform%20Ecosystem%20for%20%22Learning%2C%20Employment%2C%20and%20Entrepreneurship%22) The Group will comprehensively advance the digitalization and intelligence of learning, employment, and entrepreneurship services, achieving full coverage of academic education and integrating the entire process from enrollment, assessment, teaching, examination, practical training, employment, to entrepreneurship - Comprehensively advance the digitalization and intelligence of learning, employment, and entrepreneurship services, achieving full coverage of academic education[37](index=37&type=chunk) - Integrate the entire process from enrollment, assessment, teaching, examination, practical training, employment, to entrepreneurship, from entry to exit[37](index=37&type=chunk) [(3) Promoting the Integration of Education and High-Tech to Empower Talent Cultivation](index=16&type=section&id=(3)%20Promoting%20the%20Integration%20of%20Education%20and%20High-Tech%20to%20Empower%20Talent%20Cultivation) The Group will accelerate the widespread application of big data and artificial intelligence in its business areas, enhance the level of educational digitalization, provide more precise learning solutions and support services for students and users, and enable teachers to teach and manage more efficiently - Accelerate the widespread application of big data and artificial intelligence in business areas, enhancing the level of educational digitalization[38](index=38&type=chunk) - Provide more precise learning solutions and support services for students and users, enabling teachers to teach and manage more efficiently[38](index=38&type=chunk) [Revenue](index=17&type=section&id=Revenue) Total revenue for the reporting period was approximately RMB 894.8 million, a year-on-year decrease of 17.1%, primarily due to reduced online education revenue resulting from changes in market conditions Revenue (For the Six Months Ended June 30) | Metric | 2025 (RMB million) | 2024 (RMB million) | YoY Change | | :--- | :--- | :--- | :--- | | Total Revenue | 894.8 | 1,079.8 | -17.1% | - Revenue decrease primarily due to reduced online education revenue resulting from changes in market conditions[39](index=39&type=chunk) [Cost of Sales](index=17&type=section&id=Cost%20of%20Sales) Cost of sales increased by 8.1% year-on-year to approximately RMB 539.4 million, mainly due to increased depreciation and amortization of the Group's schools, and an increase in the number, salaries, and allowances of teaching and administrative staff Cost of Sales (For the Six Months Ended June 30) | Metric | 2025 (RMB million) | 2024 (RMB million) | YoY Change | | :--- | :--- | :--- | :--- | | Cost of Sales | 539.4 | 498.9 | +8.1% | - Cost of sales increased primarily due to increased depreciation and amortization of schools, and an increase in the number, salaries, and allowances of teaching and administrative staff[40](index=40&type=chunk) [Gross Profit](index=17&type=section&id=Gross%20Profit) Gross profit decreased by 38.8% year-on-year to approximately RMB 355.4 million, with the gross profit margin declining from approximately 53.8% to approximately 39.7%, mainly due to increased campus education expenses of the Group's schools during the reporting period Gross Profit and Gross Profit Margin (For the Six Months Ended June 30) | Metric | 2025 (RMB million) | 2024 (RMB million) | YoY Change | | :--- | :--- | :--- | :--- | | Gross Profit | 355.4 | 580.8 | -38.8% | | Gross Profit Margin | 39.7% | 53.8% | -14.1 percentage points | - Gross profit and gross profit margin decreased primarily due to increased campus education expenses[41](index=41&type=chunk) [Other Income and Gains](index=17&type=section&id=Other%20Income%20and%20Gains) Other income and gains decreased by 22.1% year-on-year to approximately RMB 55.8 million, mainly due to a reduction in investment income from short-term investments received by the Group during the reporting period Other Income and Gains (For the Six Months Ended June 30) | Metric | 2025 (RMB million) | 2024 (RMB million) | YoY Change | | :--- | :--- | :--- | :--- | | Other Income and Gains | 55.8 | 71.5 | -22.1% | - Decrease primarily due to reduced investment income from short-term investments[42](index=42&type=chunk) [Selling Expenses](index=18&type=section&id=Selling%20Expenses) Selling expenses decreased by 44.6% year-on-year to approximately RMB 54.3 million, primarily due to reduced salaries and other benefits for sales and marketing staff, and decreased promotion and advertising costs for online education entities Selling Expenses (For the Six Months Ended June 30) | Metric | 2025 (RMB million) | 2024 (RMB million) | YoY Change | | :--- | :--- | :--- | :--- | | Selling Expenses | 54.3 | 98.0 | -44.6% | - Selling expenses decreased primarily due to reduced sales and marketing staff salaries and online education promotion costs[43](index=43&type=chunk) [Administrative Expenses](index=18&type=section&id=Administrative%20Expenses) Administrative expenses decreased by 18.4% year-on-year to approximately RMB 196.2 million, attributed to the Group's effective control over administrative expenses during the reporting period Administrative Expenses (For the Six Months Ended June 30) | Metric | 2025 (RMB million) | 2024 (RMB million) | YoY Change | | :--- | :--- | :--- | :--- | | Administrative Expenses | 196.2 | 240.3 | -18.4% | - Administrative expenses decreased primarily due to effective control by the Group[44](index=44&type=chunk) [Net Other Expenses](index=18&type=section&id=Net%20Other%20Expenses) Net other expenses significantly decreased by 62.6% year-on-year to approximately RMB 22.3 million, mainly due to a substantial reduction in expenses related to impairment losses on financial assets Net Other Expenses (For the Six Months Ended June 30) | Metric | 2025 (RMB million) | 2024 (RMB million) | YoY Change | | :--- | :--- | :--- | :--- | | Net Other Expenses | 22.3 | 59.7 | -62.6% | - Decrease primarily due to a significant reduction in expenses related to impairment losses on financial assets[45](index=45&type=chunk) [Finance Costs](index=18&type=section&id=Finance%20Costs) Finance costs slightly decreased by 1.5% year-on-year to approximately RMB 67.4 million, remaining stable during the reporting period Finance Costs (For the Six Months Ended June 30) | Metric | 2025 (RMB million) | 2024 (RMB million) | YoY Change | | :--- | :--- | :--- | :--- | | Finance Costs | 67.4 | 68.4 | -1.5% | - Finance costs remained stable[46](index=46&type=chunk) [Profit for the Period](index=19&type=section&id=Profit%20for%20the%20Period) Considering the aforementioned factors, profit for the period decreased by 56.4% year-on-year to approximately RMB 49.4 million during the reporting period Profit for the Period (For the Six Months Ended June 30) | Metric | 2025 (RMB million) | 2024 (RMB million) | YoY Change | | :--- | :--- | :--- | :--- | | Profit for the Period | 49.4 | 113.2 | -56.4% | [Adjusted Net Profit](index=19&type=section&id=Adjusted%20Net%20Profit) Adjusted net profit decreased by 56.6% year-on-year to approximately RMB 57.1 million, with the adjusted net profit margin declining from approximately 12.2% for the six months ended June 30, 2024, to approximately 6.4% during the reporting period Adjusted Net Profit Calculation (For the Six Months Ended June 30, RMB thousand) | Item | 2025 (Unaudited) | 2024 (Unaudited) | | :--- | :--- | :--- | | Profit for the Period | 49,361 | 113,165 | | Add: Unrealized exchange gain | (5,427) | (3,188) | | Share option expenses | 12 | 47 | | Amortization of intangible assets recognized upon acquisition | 10,503 | 25,705 | | Change in fair value loss/(gain) | 2,676 | (4,182) | | **Adjusted Net Profit** | **57,125** | **131,547** | Adjusted Net Profit and Profit Margin (For the Six Months Ended June 30) | Metric | 2025 | 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Adjusted Net Profit (RMB million) | 57.1 | 131.5 | -56.6% | | Adjusted Net Profit Margin | 6.4% | 12.2% | -5.8 percentage points | Financial and Liquidity Position [Net Current Assets](index=20&type=section&id=Net%20Current%20Assets) As of June 30, 2025, the Group's net current assets were approximately RMB 903.9 million, an increase from the end of 2024, with current assets decreasing mainly due to reduced cash and cash equivalents, and current liabilities decreasing primarily due to reduced contract liabilities Changes in Net Current Assets (RMB million) | Metric | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Net Current Assets | 903.9 | 758.5 | +145.4 | | Current Assets | 3,733.8 | 4,222.3 | -488.5 | | Current Liabilities | 2,829.9 | 3,463.8 | -633.9 | - Current assets decreased primarily due to a reduction in cash and cash equivalents[50](index=50&type=chunk) - Current liabilities decreased primarily due to a reduction in contract liabilities[50](index=50&type=chunk) [Interest-Bearing Bank and Other Borrowings](index=20&type=section&id=Interest-Bearing%20Bank%20and%20Other%20Borrowings) As of June 30, 2025, interest-bearing bank and other borrowings amounted to approximately RMB 2,535.9 million, with annual interest rates ranging from 2.2% to 10.0%, and some loans having rates as high as 15%-24%; the Group maintains its funding balance through operating cash flow and borrowings - As of June 30, 2025, interest-bearing bank and other borrowings amounted to approximately **RMB 2,535.9 million**[51](index=51&type=chunk) - Loan annual interest rates range from **2.2% to 10.0%**, with some loans having rates as high as **15%-24%**[51](index=51&type=chunk) - The Group maintains continuous funding supply and flexibility through cash flows generated from operating activities and other borrowings[51](index=51&type=chunk) [Grant of Option to Acquire 49% of the Issued Share Capital of Lead Group](index=21&type=section&id=Grant%20of%20Option%20to%20Acquire%2049%25%20of%20the%20Issued%20Share%20Capital%20of%20Lead%20Group) The Group is involved in arbitration disputes with the seller of Lead Group regarding a 49% equity acquisition option, concerning inflated exit prices and loan offset controversies; the Group believes the seller's exercise of the option is invalid and has fulfilled its obligation to grant the option, with arbitration ongoing and no provision made - The Group is involved in an arbitration dispute with the seller of Lead Group regarding a 49% equity acquisition option at the Hong Kong International Arbitration Centre[52](index=52&type=chunk) - The seller claims to have validly exercised the option and seeks an inflated exit price of **RMB 2,180,735,567.50**, which the Group disputes as invalid[52](index=52&type=chunk) - The Group has made no provision for the arbitration, believing it has no obligation to purchase the 49% equity interest in Lead Group[52](index=52&type=chunk) - There is also a CIETAC arbitration concerning a **RMB 400 million** loan principal and interest repayment dispute, where the seller claims offset, and the Group counter-claims for repayment[54](index=54&type=chunk) [Pledged Assets](index=23&type=section&id=Pledged%20Assets) As of June 30, 2025, certain long-term assets with a net book value of approximately RMB 78.3 million and time deposits of RMB 897.6 million have been pledged by the Group to secure bank loans and other borrowings - Approximately **RMB 78.3 million** of long-term assets and **RMB 897.6 million** of time deposits have been pledged to secure bank loans and other borrowings[56](index=56&type=chunk) [Foreign Currency Exchange Risk](index=23&type=section&id=Foreign%20Currency%20Exchange%20Risk) The Group's majority of revenue and expenses are denominated in RMB, with some bank balances denominated in USD and HKD; the Group currently has no foreign exchange hedging policy, and management will continue to monitor foreign currency exchange risk - Most revenue and expenses are denominated in RMB, with some bank balances denominated in USD and HKD[57](index=57&type=chunk) - The Group currently has no foreign exchange hedging policy, and management will continue to monitor foreign currency exchange risk[57](index=57&type=chunk) [Gearing Ratio](index=23&type=section&id=Gearing%20Ratio) As of June 30, 2025, the gearing ratio increased from approximately 37.0% as of December 31, 2024, to approximately 42.3%, but remains at a healthy level Gearing Ratio | Metric | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Gearing Ratio | 42.3% | 37.0% | +5.3 percentage points | - Gearing ratio increased but remains at a healthy level[58](index=58&type=chunk) Employee Remuneration, Training and Development [Employee Profile and Benefits](index=23&type=section&id=Employee%20Profile%20and%20Benefits) As of June 30, 2025, the Group employed approximately 6,800 employees; during the reporting period, the Group reviewed and increased employee remuneration and provided training and/or sponsored various work-related training courses for existing and newly hired employees - As of June 30, 2025, the Group employed approximately **6,800 employees**[59](index=59&type=chunk) - Employee remuneration was reviewed and increased during the reporting period, based on performance, experience, and prevailing industry practices[59](index=59&type=chunk) - Training and/or sponsorship for various work-related training courses were provided to employees[59](index=59&type=chunk) Corporate Governance Code [Corporate Governance Practices](index=23&type=section&id=Corporate%20Governance%20Practices) The Company is committed to establishing sound corporate governance practices and procedures, complying with the code provisions set out in Appendix C1 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited to ensure transparency and accountability - The Company is committed to establishing sound corporate governance practices and procedures, ensuring transparency and accountability to shareholders[60](index=60&type=chunk) - For the six months ended June 30, 2025, the Company complied with the code provisions set out in Appendix C1 of the Listing Rules[61](index=61&type=chunk) [Standard Code for Securities Transactions by Directors of Listed Issuers](index=24&type=section&id=Standard%20Code%20for%20Securities%20Transactions%20by%20Directors%20of%20Listed%20Issuers) The Company has adopted the Standard Code as set out in Appendix C3 of the Listing Rules as the code of conduct for directors' securities transactions, and all directors confirmed compliance with the code during the reporting period - The Company has adopted the Standard Code set out in Appendix C3 of the Listing Rules as the code of conduct for directors' securities transactions[62](index=62&type=chunk) - All directors confirmed compliance with the required standards set out in the Standard Code during the reporting period[62](index=62&type=chunk) [Interim Dividends](index=24&type=section&id=Interim%20Dividends) The Board of Directors did not declare any interim dividends for the reporting period - The Board of Directors did not declare any interim dividends for the reporting period[63](index=63&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=24&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) During the reporting period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities, and as of June 30, 2025, the number of treasury shares held by the Company was zero - During the reporting period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[64](index=64&type=chunk) - As of June 30, 2025, the number of treasury shares held by the Company was zero[65](index=65&type=chunk) [Audit Committee](index=24&type=section&id=Audit%20Committee) The Company's Audit Committee has reviewed and discussed with management the accounting principles and practices adopted by the Company, internal controls, financial reporting matters, and the Company's corporate governance policies and practices, and has reviewed the interim results - The Audit Committee has reviewed and discussed accounting principles, internal controls, financial reporting, and corporate governance matters with management[66](index=66&type=chunk) - The interim results have been reviewed by the Audit Committee[66](index=66&type=chunk) Other Information [Publication of Interim Results Announcement and Interim Report](index=25&type=section&id=Publication%20of%20Interim%20Results%20Announcement%20and%20Interim%20Report) This interim results announcement has been published on the HKEX website and the Company's website, and the interim report containing all information required by Appendix D2 of the Listing Rules will be dispatched to shareholders in due course - The interim results announcement has been published on the HKEX website (www.hkexnews.hk) and the Company's website (http://www.minshengedu.com)[67](index=67&type=chunk) - The interim report, containing all information required by Appendix D2 of the Listing Rules, will be dispatched to shareholders in due course[67](index=67&type=chunk)

Half-Year Performance Announcement Summary The Board of Yancoal Australia Ltd. announced its half-year results for the period ended June 30, 2025, declaring an interim cash dividend of approximately 82 million AUD (0.0620 AUD per share), expected to be paid on September 19, 2025 [Interim Distribution](index=1&type=section&id=Interim%20Distribution) The Board declared an interim cash dividend of approximately 82 million AUD, or 0.0620 AUD per share, for the half-year ended June 30, 2025, which is fully franked 2025 Half-Year Interim Dividend | Metric | Amount | | :--- | :--- | | Interim Cash Dividend | 82 million AUD | | Dividend Per Share | 0.0620 AUD/share | | Exchange Rate (1 AUD to HKD) | 5.1030 | | Record Date | September 5, 2025 | | Payment Date | September 19, 2025 | - The interim dividend is fully franked income from Australia, with tax implications varying based on individual shareholder circumstances[4](index=4&type=chunk) Appendix 4D - Key Financial Data Appendix 4D provides a key financial data overview for the half-year ended June 30, 2025, showing significant year-on-year declines in revenue, profit before tax, and net profit, alongside an increase in net tangible assets per share [Performance Announcement](index=4&type=section&id=1.%20Performance%20Announcement) For the half-year ended June 30, 2025, the company's ordinary operating revenue was 2,675 million AUD, a 15% year-on-year decrease; profit before income tax was 239 million AUD, a 58% decrease; and net profit after income tax attributable to shareholders was 163 million AUD, a 61% decrease 2025 Half-Year Performance Overview (million AUD) | Metric | June 30, 2025 | June 30, 2024 | Change Percentage | | :--- | :--- | :--- | :--- | | Ordinary Operating Revenue | 2,675 | 3,138 | (15%) | | Profit Before Income Tax | 239 | 571 | (58%) | | Net Profit After Income Tax Attributable to Shareholders | 163 | 420 | (61%) | [Earnings Per Share](index=4&type=section&id=2.%20Earnings%20Per%20Share) As of June 30, 2025, both basic and diluted earnings per share were 12.4 AUD cents, representing a 61% year-on-year decrease 2025 Half-Year Earnings Per Share (AUD cents) | Metric | June 30, 2025 | June 30, 2024 | Change Percentage | | :--- | :--- | :--- | :--- | | Basic Earnings Per Share | 12.4 | 31.9 | (61%) | | Diluted Earnings Per Share | 12.4 | 31.8 | (61%) | [Net Tangible Assets Per Security](index=4&type=section&id=3.%20Net%20Tangible%20Assets%20Per%20Security) As of June 30, 2025, net tangible assets per share were 6.57 AUD, a 4% year-on-year increase Net Tangible Assets Per Share (AUD) | Metric | June 30, 2025 | June 30, 2024 | Change Percentage | | :--- | :--- | :--- | :--- | | Net Tangible Assets Per Share | 6.57 | 6.29 | 4% | [Profit Distribution](index=4&type=section&id=4.%20Profit%20Distribution) The 2024 final dividend of 52.00 AUD cents per share, totaling 687 million AUD, was paid in April 2025, and the Board declared a 2025 interim dividend of 0.0620 AUD per share, totaling 82 million AUD, on August 19, 2025 Ordinary Share Profit Distribution (million AUD) | Dividend Type | AUD Cents Per Share | Total (million AUD) | | :--- | :--- | :--- | | 2024 Final Dividend (Paid April 2025) | 52.00 | 687 | | 2023 Final Dividend (Paid April 2024) | — | 429 | | **Total Distribution** | | **687** | - The Board declared a 2025 interim dividend of **82 million AUD**, or **0.0620 AUD/share** (fully franked), with a record date of September 5, 2025, and a payment date of September 19, 2025[12](index=12&type=chunk) [Details of Associates and Joint Venture Entities](index=5&type=section&id=6.%20Details%20of%20Associates%20and%20Joint%20Venture%20Entities) The company holds interests in several joint ventures, with declining profit contributions from Moolarben, Warkworth, Syntech, and Hunter Valley joint ventures, while Middlemount Joint Venture recorded a loss, and Port Waratah Coal Services Pty Ltd saw increased profit contribution Profit After Income Tax Contribution from Joint Venture Entities (million AUD) | Joint Venture | Ownership Interest (June 30, 2025) | Profit / (Loss) Contribution After Income Tax (June 30, 2025) | | :--- | :--- | :--- | | Moolarben Joint Venture | 95% | 129 | | Warkworth Joint Venture | 84.472% | 76 | | Syntech Joint Venture | 80% | 24 | | Hunter Valley Joint Venture | 51% | 40 | | Middlemount Joint Venture | 49.9997% | (15) | Profit After Income Tax Contribution from Associate Entities (million AUD) | Associate Entity | Ownership Interest (June 30, 2025) | Profit Contribution After Income Tax (June 30, 2025) | | :--- | :--- | :--- | | Port Waratah Coal Services Pty Ltd | 30% | 16 | Directors' Report The Directors' Report outlines Yancoal Australia's operational and financial performance for the half-year ended June 30, 2025, covering board changes, company activities, coal market conditions, dividend policy, corporate governance compliance, directors' and major shareholders' interests, and Audit and Risk Management Committee review [Board Members and Company Activities](index=6&type=section&id=Board%20Members%20and%20Company%20Activities) Mr. Ru Gang serves as Chairman, and Mr. Yue Ning is the Executive Director and Acting CEO, with other non-executive and independent non-executive directors listed; the company did not purchase, sell, or redeem listed securities, but an employee share trust holds company securities through market transactions - Mr. Ru Gang serves as Chairman, and Mr. Yue Ning serves as Executive Director and Acting Chief Executive Officer[17](index=17&type=chunk)[23](index=23&type=chunk)[27](index=27&type=chunk) - During the reporting period, neither Yancoal Australia nor any of its subsidiaries purchased, sold, or redeemed Yancoal Australia's listed securities[19](index=19&type=chunk) [Material Changes in State of Affairs](index=6&type=section&id=Material%20Changes%20in%20State%20of%20Affairs) During the reporting period, coal price indices declined due to ample supply and weak demand, experiencing short-term fluctuations influenced by geopolitical events and global trade tariffs, while Yancoal Australia's saleable coal production increased by 15% (on a 100% basis) compared to the first half of 2024 - During the reporting period, coal price indices declined due to ample supply and weak demand, with short-term fluctuations influenced by Middle East geopolitical events and the implementation of global trade tariffs[20](index=20&type=chunk) - Yancoal Australia's saleable coal production increased by **15%** (on a 100% basis) in the first half of 2025 compared to the first half of 2024[20](index=20&type=chunk) [Dividends and Dividend Policy](index=6&type=section&id=Dividends%20and%20Dividend%20Policy) The company's dividend policy stipulates that, subject to applicable laws, cash needs for business continuity, directors' duties, and shareholder approval, interim or final dividends may be distributed, typically not less than 50% of net profit after tax (before abnormal items) or free cash flow (before abnormal items) - The company's dividend policy stipulates a distribution of not less than **50%** of net profit after tax (before abnormal items) or **50%** of free cash flow (before abnormal items), whichever is higher[23](index=23&type=chunk) - If directors deem it necessary for prudent financial management, an interim and/or final dividend of not less than **25%** of net profit after tax (before abnormal items) will be distributed in a specific financial year[23](index=23&type=chunk) [Compliance with Corporate Governance Code](index=6&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) The company has adopted the provisions of Appendix C1 "Corporate Governance Code" of the Hong Kong Listing Rules and believes it has complied with the code provisions during the reporting period - The company has adopted the provisions of Appendix C1 "Corporate Governance Code" of the Hong Kong Listing Rules and believes it has complied with the code provisions during the reporting period[22](index=22&type=chunk) [Interests and Positions in Shares](index=7&type=section&id=Interests%20and%20Positions%20in%20Shares) This section discloses the share interests of the company's directors, CEO, and major shareholders, including Yanzhou Coal Mining Company Limited and Shandong Energy Group Co., Ltd., in the company and its associated corporations, emphasizing the company's strict share trading policy Directors' and CEO's Interests in Company Shares (June 30, 2025) | Name of Chief Executive or Director | Number of Shares and Related Shares | Nature of Interest | Approximate Percentage | | :--- | :--- | :--- | :--- | | Yue Ning (Director) | 75,361 | Beneficial Owner | 0.00571 % | | Gregory James Fletcher (Director) | 2,100 | Beneficial Owner | 0.00016 % | | Debra Anne Bakker (Director) | 9,000 | Beneficial Owner | 0.00068 % | | David James Moult (CEO) | 5,683,998 | Beneficial Owner | 0.07262 % | Major Shareholders' Interests in Company Shares (June 30, 2025) | Shareholder Name | Capacity | Number of Shares Held or Interested | Approximate Percentage (%) | | :--- | :--- | :--- | :--- | | Yanzhou Coal Mining Company Limited | Beneficial Owner | 822,157,715 | 62.26 | | Shandong Energy Group Co., Ltd. | Controlled Entity Interest | 822,157,715 | 62.26 | | Cinda International HGB Investment (UK) Limited | Beneficial Owner | 101,601,082 | 7.69 | - The company's share trading policy prohibits directors, officers, and other relevant employees from trading company securities during blackout periods and when in possession of "inside information"[26](index=26&type=chunk) [Audit and Risk Management Committee Review](index=8&type=section&id=Audit%20and%20Risk%20Management%20Committee%20Review) The Audit and Risk Management Committee has reviewed the company's and its subsidiaries' financial statements for the half-year ended June 30, 2025, deeming them prepared in compliance with applicable accounting standards and requirements, with the company's auditor, SW Audit, also reviewing the interim financial statements - The Audit and Risk Management Committee has reviewed the half-year financial statements and believes they are prepared in compliance with applicable accounting standards and requirements[29](index=29&type=chunk) - The company's auditor, SW Audit, has reviewed the financial report in accordance with Review Engagement Standard 2410[29](index=29&type=chunk) [Auditor's Independence Declaration](index=8&type=section&id=Auditor's%20Independence%20Declaration) In accordance with Section 307C of the Corporations Act 2001, the lead auditor declares no contraventions of auditor independence requirements or applicable professional conduct rules for the half-year ended June 30, 2025 - The lead auditor declares no contraventions of the Corporations Act 2001's auditor independence requirements for the half-year ended June 30, 2025[34](index=34&type=chunk)[36](index=36&type=chunk) - There were no contraventions of any applicable code of professional conduct in relation to this review[36](index=36&type=chunk) Business Overview and Operational Performance Yancoal Australia, a leading low-cost coal producer with a diverse portfolio of world-class assets, primarily produces thermal and metallurgical coal, actively responding to generally declining coal price indices through product optimization and market expansion, while achieving significant growth in saleable coal production, reduced cash operating costs, and continued focus on health, safety, sustainability, and environmental management [Coal Business and Market Analysis](index=10&type=section&id=Coal%20Business%20and%20Market%20Analysis) Yancoal Australia operates eight coal mines in Australia, producing approximately 70 million tonnes of run-of-mine coal and 55 million tonnes of saleable coal annually, primarily serving customers across the Asia-Pacific region; during the reporting period, all coal price indices declined due to weaker demand and ample supply, but the company actively responded by optimizing products and expanding markets - Yancoal Australia operates eight coal mines in Australia, capable of producing approximately **70 million tonnes** of run-of-mine coal and **55 million tonnes** of saleable coal annually[37](index=37&type=chunk) - For the half-year ended June 30, 2025, revenue from customers in China, Japan, Taiwan, and South Korea accounted for approximately **82%** of total coal sales revenue (June 30, 2024: 89%)[37](index=37&type=chunk) - During the reporting period, all coal price indices declined from previous levels due to a warm winter in the Northern Hemisphere leading to weaker demand, a slowdown in China's real estate market curbing steel product demand, strong domestic coal supply in China, concerns over tariff impacts, and ample supply from all exporting countries[39](index=39&type=chunk) [Operational Performance and Cost Control](index=10&type=section&id=Operational%20Performance%20and%20Cost%20Control) In the first half of 2025, the Group's overall average realized price for self-produced coal decreased by 15% to 149 AUD/tonne; despite heavy rainfall in New South Wales, saleable coal production increased by 15% year-on-year, while attributable saleable coal sales decreased by 2%; the company's "Key Focus" program reduced the average cash operating cost per tonne of product (excluding government royalties) from 101 AUD/tonne to 93 AUD/tonne Self-Produced Coal Average Realized Price (AUD/tonne) | Metric | 2025 Half-Year | 2024 Half-Year | Change (%) | | :--- | :--- | :--- | :--- | | Overall Average Realized Price | 149 | 176 | (15%) | - Attributable saleable coal production in the first half of 2025 increased by **11%** compared to the first half of 2024, while attributable saleable coal sales decreased by **2%** over the same period[41](index=41&type=chunk) - The Group's overall average cash operating cost per tonne of product (excluding government royalties) decreased from **101 AUD/tonne** in the first half of 2024 to **93 AUD/tonne** in the first half of 2025, primarily due to increased saleable coal production[43](index=43&type=chunk) [Run-of-Mine and Saleable Coal Production](index=11&type=section&id=Run-of-Mine%20and%20Saleable%20Coal%20Production) On a 100% basis, run-of-mine coal production increased by 16% from 27.9 million tonnes in the first half of 2024 to 32.2 million tonnes in the first half of 2025, and saleable coal production increased by 15% from 21.6 million tonnes to 24.8 million tonnes, mainly driven by increased output from key mines such as Moolarben, Warkworth, and Hunter Valley Run-of-Mine Production (million tonnes, 100% basis) | Mine | 2025 | 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Moolarben | 11.2 | 10.9 | 3% | | Warkworth | 7.9 | 7.6 | 4% | | Hunter Valley | 9.0 | 5.0 | 79% | | Ashton | 1.5 | 1.0 | 52% | | Duralie | 0.8 | 1.4 | (42%) | | Stratford | — | 0.1 | (100%) | | Middlemount | 1.8 | 1.9 | (3%) | | **Total** | **32.2** | **27.9** | **16%** | Saleable Coal Production (million tonnes, 100% basis) | Mine | 2025 | 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Moolarben | 9.8 | 9.5 | 3% | | Warkworth | 5.5 | 4.7 | 18% | | Hunter Valley | 6.6 | 4.8 | 38% | | Ashton | 1.3 | 0.8 | 57% | | Duralie | 0.4 | 0.6 | (42%) | | Stratford | — | 0.1 | (100%) | | Middlemount | 1.3 | 1.1 | 17% | | **Total** | **24.8** | **21.6** | **15%** | [Attributable Saleable Coal Production Trends](index=12&type=section&id=Attributable%20Saleable%20Coal%20Production%20Trends) The Group's attributable saleable coal production increased by 11% from 17.6 million tonnes in the first half of 2024 to 19.5 million tonnes in the first half of 2025, with thermal coal production increasing by 5% and metallurgical coal production significantly increasing by 47%; the company expects to achieve the upper end of its full-year attributable saleable coal production guidance range of 35 million to 39 million tonnes Attributable Saleable Coal Production (million tonnes) | Coal Type | 2025 Half-Year | 2024 Half-Year | Change (%) | | :--- | :--- | :--- | :--- | | Thermal Coal | 15.7 | 15.0 | 5% | | Metallurgical Coal | 3.8 | 2.6 | 47% | | **Total** | **19.5** | **17.6** | **11%** | - The Group's current full-year attributable saleable coal production guidance range is **35 million to 39 million tonnes**[52](index=52&type=chunk) [Health and Safety](index=12&type=section&id=Health%20and%20Safety) The company is committed to achieving zero harm and continuously implements critical hazard and control measures, with a 12-month rolling TRIFR of 6.3 as of June 30, 2025, which is below the comparable industry weighted average of 7.9, and continues to advance its mental health program - As of June 30, 2025, the company's 12-month rolling TRIFR was **6.3**, a decrease from 6.7 on December 31, 2024, and below the comparable industry weighted average of 7.9[56](index=56&type=chunk) - The third and fourth phases of the four-year, four-stage mental health program are ongoing[56](index=56&type=chunk) [Sustainability and Environmental Management](index=13&type=section&id=Sustainability%20and%20Environmental%20Management) The company adheres to its P4 Sustainability Strategy and actively responds to Australia's mandatory climate disclosure regime; in FY2024, five facilities exceeded Scope 1 baselines, while Moolarben generated Safeguard Mechanism credits; the company continues to research emissions reduction technologies, advances potential pumped hydro and solar facilities at the Stratford mine, implements environmental compliance systems, and promotes Indigenous cultural heritage management standards [Climate-Related Disclosures and Safeguard Mechanism](index=13&type=section&id=Climate-Related%20Disclosures%20and%20Safeguard%20Mechanism) Australia's mandatory climate disclosure regime became effective on January 1, 2025, applying to Tier 1 companies including Yancoal Australia, with Ashton, Hunter Valley, Middlemount, Warkworth, and Duralie mines exceeding their Scope 1 baselines in FY2024, while Moolarben generated Safeguard Mechanism credits - Australia's mandatory climate disclosure regime became effective on January 1, 2025, with mandatory climate-related disclosure reporting applicable to financial years commencing on or after January 1, 2025, for Tier 1 companies including Yancoal Australia[57](index=57&type=chunk) - In FY2024, Ashton, Hunter Valley, Middlemount, Warkworth, and Duralie mines exceeded their Scope 1 baselines, while Moolarben's Scope 1 emissions were below its baseline, resulting in the generation of Safeguard Mechanism credits[60](index=60&type=chunk) [Emissions Reduction and Environmental Protection](index=13&type=section&id=Emissions%20Reduction%20and%20Environmental%20Protection) The company acknowledges its role in reducing operational emissions and supporting research into low-emission technologies, recognizing the risks and opportunities of transitioning to a low-carbon economy; it is investigating potential pumped hydro and solar facilities at the Stratford mine, implementing environmental compliance systems, and promoting Indigenous cultural heritage management standards - Yancoal Australia is investigating a potential pumped hydro and solar facility at the Stratford mine, which, if developed, could support the repurposing of parts of the mine site after mining ceases[61](index=61&type=chunk) - Yancoal Australia implements and continuously reviews a set of environmental compliance systems, processes, and practices, which are regularly audited by third parties[67](index=67&type=chunk) - Yancoal Australia continues to implement company-level Indigenous cultural heritage management standards, ensuring control measures are applied across all mine sites to minimize the impact of mining on Indigenous cultural heritage[67](index=67&type=chunk) [Social and Governance](index=14&type=section&id=Social%20and%20Governance) The company actively contributes to communities through its Community Support Program and ensures community engagement, has established a Code of Conduct and Anti-Bribery and Sanctions Policy, submits annual statements under the Modern Slavery Act 2018, and the Board is responsible for overseeing and approving risk management and financial investment decisions, continuously improving water management infrastructure to address extreme weather - Yancoal Australia is advancing the launch of its 2025 Community Support Program, which provides funding for environmental, educational, arts, cultural, and community initiatives[68](index=68&type=chunk) - The Board holds ultimate responsibility for the oversight and approval of risk management and financial investment decisions[69](index=69&type=chunk) - The company has significantly mitigated the impact of adverse weather events during the period by constructing and maintaining water management infrastructure at its mine sites[70](index=70&type=chunk) Financial Performance Review For the half-year ended June 30, 2025, Yancoal Australia's financial performance significantly declined, with profit after tax decreasing by 61% year-on-year to 163 million AUD, primarily due to a 15% revenue decrease and a 40% reduction in operating EBITDA; the average coal sales price fell by 15%, and sales volume decreased by 2%, though purchased coal sales revenue increased; production costs saw an 8 AUD/tonne reduction in cash operating costs per tonne of saleable coal to 93 AUD/tonne, but other operating expenses rose due to foreign exchange losses and increased Safeguard Mechanism expenses; non-operating items had a net positive impact of 8 million AUD on profit before tax [Profit Attributable to Equity Holders of the Company](index=16&type=section&id=Profit%20Attributable%20to%20Equity%20Holders%20of%20the%20Company) Profit after income tax decreased by 61% from 420 million AUD in the first half of 2024 to 163 million AUD in the first half of 2025, fully attributable to Yancoal Australia shareholders, with non-operating items having a net positive impact of 8 million AUD on profit before tax in the first half of 2025 - Profit after income tax decreased by **61%** from **420 million AUD** in the first half of 2024 to **163 million AUD** in the first half of 2025[76](index=76&type=chunk) - In the first half of 2025, profit attributable to Yancoal Australia shareholders of **163 million AUD** was impacted by several non-operating items, with a total net positive impact of **8 million AUD** on profit before tax[76](index=76&type=chunk) [Operating Performance Overview](index=16&type=section&id=Operating%20Performance%20Overview) This section analyzes self-produced coal sales, saleable coal production, and self-produced coal revenue for mines including Moolarben, Warkworth, Hunter Valley, Duralie, Ashton, and Stratford/Duralie, with Middlemount's performance accounted for as an equity-accounted investment in the income statement; the company has signed an agreement to acquire an additional 3.75% interest in the Moolarben Joint Venture and exited the Donaldson Coal Joint Venture - The company has signed a binding agreement to acquire an additional **3.75%** interest in the Moolarben Joint Venture, increasing the Group's interest to **98.75%**[77](index=77&type=chunk) - The company signed an agreement with The Bloomfield Group to exit its non-producing and non-core Donaldson Coal Joint Venture, with no cash consideration for the transaction[78](index=78&type=chunk) [Revenue Analysis](index=16&type=section&id=Revenue%20Analysis) Total revenue decreased by 15% from 3.099 billion AUD in the first half of 2024 to 2.623 billion AUD in the first half of 2025, primarily due to a 16% decline in coal sales revenue; the overall average realized price for self-produced coal decreased by 15% to 149 AUD/tonne, with thermal and metallurgical coal average realized prices falling by 12% and 35% respectively; self-produced coal sales volume decreased by 2%, but purchased coal sales revenue grew by 55%; sales revenue to Japan increased, while sales to China, Taiwan, and South Korea decreased, and sales to Vietnam and Europe increased Revenue Composition (million AUD) | Revenue Source | 2025 Half-Year | 2024 Half-Year | Change (%) | | :--- | :--- | :--- | :--- | | Self-Produced Coal Sales | 2,479 | 2,980 | (17%) | | Purchased Coal Sales | 73 | 47 | 55% | | Other | 6 | 3 | 100% | | **Total Coal Sales** | **2,558** | **3,030** | **(16%)** | | Freight | 39 | 44 | (11%) | | Royalty Income | 13 | 12 | 8% | | Other | 13 | 13 | 0% | | **Total Revenue** | **2,623** | **3,099** | **(15%)** | Self-Produced Coal Sales Data (AUD/tonne, million tonnes) | Metric | 2025 Half-Year | 2024 Half-Year | Change (%) | | :--- | :--- | :--- | :--- | | **Thermal Coal** | | | | | Average Realized Price | 138 | 156 | (12%) | | Sales Volume | 13.8 | 14.9 | (7%) | | Total Revenue | 1,903 | 2,332 | (18%) | | **Metallurgical Coal** | | | | | Average Realized Price | 207 | 319 | (35%) | | Sales Volume | 2.8 | 2.0 | 39% | | Total Revenue | 576 | 648 | (11%) | | **Total Coal** | | | | | Average Realized Price | 149 | 176 | (15%) | | Sales Volume | 16.6 | 16.9 | (2%) | | Total Revenue | 2,479 | 2,980 | (17%) | - Sales revenue to Japan increased from **23%** of total coal sales revenue in the first half of 2024 to **30%** in the first half of 2025, primarily due to increased sales volume and a higher proportion of metallurgical coal sales during the reporting period[86](index=86&type=chunk) [Operating EBITDA and Margin](index=17&type=section&id=Operating%20EBITDA%20and%20Margin) Operating EBITDA decreased by 40% from 990 million AUD in the first half of 2024 to 595 million AUD in the first half of 2025, mainly due to reduced revenue, with the operating EBITDA margin decreasing from 32% to 23% - Operating EBITDA decreased by **40%** from **990 million AUD** in the first half of 2024 to **595 million AUD** in the first half of 2025[87](index=87&type=chunk) - The operating EBITDA margin as a percentage of operating revenue decreased from **32%** in the first half of 2024 to **23%** in the first half of 2025[87](index=87&type=chunk) [Other Income](index=18&type=section&id=Other%20Income) Other income decreased from 51 million AUD in the first half of 2024 to 5 million AUD in the first half of 2025, primarily due to a net foreign exchange gain of 50 million AUD recognized in the first half of 2024, whereas the first half of 2025 saw a net foreign exchange loss of 30 million AUD due to AUD appreciation, recorded in other operating expenses Other Income (million AUD) | Item | 2025 Half-Year | 2024 Half-Year | Change (%) | | :--- | :--- | :--- | :--- | | Net Foreign Exchange Gain | — | 50 | (100%) | | Miscellaneous Income | 5 | 1 | 400% | | **Total** | **5** | **51** | **(90%)** | - In the first half of 2025, AUD appreciation resulted in a net foreign exchange loss of **30 million AUD**, recorded in other operating expenses[90](index=90&type=chunk) [Production Cost Analysis](index=18&type=section&id=Production%20Cost%20Analysis) The Group's cash operating cost per tonne of saleable coal (excluding capitalized overburden removal) decreased by 8 AUD/tonne from 101 AUD/tonne in the first half of 2024 to 93 AUD/tonne in the first half of 2025, primarily due to increased saleable coal production and portfolio improvements, partially offset by ongoing inflationary cost pressures Cash Operating Cost Per Tonne of Saleable Coal (AUD/tonne, excluding royalties) | Cost Item | 2025 Half-Year | 2024 Half-Year | | :--- | :--- | :--- | | Raw Materials and Consumables Used | 32 | 34 | | Employee Benefits | 22 | 23 | | Transport | 19 | 22 | | Outsourced Services and Plant Hire | 15 | 17 | | Other Operating Expenses | 5 | 5 | | **Total Cash Operating Cost** | **93** | **101** | - The Group's cash operating cost per tonne of saleable coal (excluding capitalized overburden removal) decreased by **8 AUD/tonne** from **101 AUD/tonne** in the first half of 2024 to **93 AUD/tonne** in the first half of 2025[93](index=93&type=chunk) [Raw Materials and Consumables Used](index=19&type=section&id=Raw%20Materials%20and%20Consumables%20Used) Raw materials and consumables used increased by 3% from 585 million AUD in the first half of 2024 to 604 million AUD in the first half of 2025, primarily due to an 11% increase in attributable saleable coal production, partially offset by efficiency improvements and portfolio optimization, leading to a decrease in raw materials and consumables used per tonne of saleable coal from 34 AUD to 32 AUD over the same period - Raw materials and consumables used increased by **3%** from **585 million AUD** in the first half of 2024 to **604 million AUD** in the first half of 2025[97](index=97&type=chunk) - Raw materials and consumables used per tonne of saleable coal decreased from **34 AUD** to **32 AUD** over the same period[97](index=97&type=chunk) [Employee Benefits](index=19&type=section&id=Employee%20Benefits) Employee benefits expenses increased by 2% from 401 million AUD in the first half of 2024 to 409 million AUD in the first half of 2025, primarily due to wage and salary increases, additional hires, increased share-based payments, and higher statutory superannuation contributions, partially offset by improved production efficiency and reduced workers' compensation claims; employee benefits per tonne of saleable coal decreased from 23 AUD to 22 AUD - Employee benefits expenses increased by **2%** from **401 million AUD** in the first half of 2024 to **409 million AUD** in the first half of 2025[98](index=98&type=chunk) - Employee benefits per tonne of saleable coal decreased from **23 AUD** to **22 AUD** over the same period[98](index=98&type=chunk) [Transport](index=19&type=section&id=Transport) Transport costs decreased by 2% from 412 million AUD in the first half of 2024 to 402 million AUD in the first half of 2025, primarily due to changes in contracted volumes for long-term take-or-pay rail and port arrangements and price increases, largely offset by reduced coal price-linked charges; transport costs per tonne of saleable coal decreased from 22 AUD to 19 AUD - Transport costs decreased by **2%** from **412 million AUD** in the first half of 2024 to **402 million AUD** in the first half of 2025[99](index=99&type=chunk) - Transport costs per tonne of saleable coal decreased from **22 AUD** to **19 AUD** over the same period[99](index=99&type=chunk) [Outsourced Services and Plant Hire](index=19&type=section&id=Outsourced%20Services%20and%20Plant%20Hire) Outsourced services and plant hire expenses decreased by 1% from 295 million AUD in the first half of 2024 to 292 million AUD in the first half of 2025, primarily due to an 11 million AUD reduction in marketing fees and sales commissions driven by lower coal prices; outsourced services and plant hire costs per tonne of saleable coal decreased from 17 AUD to 15 AUD - Outsourced services and plant hire expenses decreased by **1%** from **295 million AUD** in the first half of 2024 to **292 million AUD** in the first half of 2025[100](index=100&type=chunk) - Outsourced services and plant hire costs per tonne of saleable coal decreased from **17 AUD** to **15 AUD** over the same period[100](index=100&type=chunk) [Government Royalties](index=19&type=section&id=Government%20Royalties) Government royalties expenses slightly increased from 261 million AUD in the first half of 2024 to 262 million AUD in the first half of 2025, as a 17% decrease in self-produced coal sales revenue was offset by the New South Wales government's 2.6% increase in coal export royalties; government royalties per tonne of self-produced coal sold increased from 15 AUD to 16 AUD - Government royalties expenses slightly increased from **261 million AUD** in the first half of 2024 to **262 million AUD** in the first half of 2025[101](index=101&type=chunk) - The New South Wales government increased coal export royalties by **2.6%** effective July 1, 2024[101](index=101&type=chunk) [Purchased Coal](index=19&type=section&id=Purchased%20Coal) Purchased coal decreased by 38% from 102 million AUD in the first half of 2024 to 63 million AUD in the first half of 2025, primarily due to a 17% decline in average coal prices and higher-than-target deliveries from the company's mines, reducing the need to purchase coal to fulfill contractual commitments - Purchased coal decreased by **38%** from **102 million AUD** in the first half of 2024 to **63 million AUD** in the first half of 2025[102](index=102&type=chunk) - This was primarily due to a **17%** decrease in average coal prices compared to the first half of 2024, and higher-than-target deliveries from our mines, reducing the need to purchase coal to fulfill contractual commitments[102](index=102&type=chunk) [Other Operating Expenses](index=19&type=section&id=Other%20Operating%20Expenses) Other operating expenses increased by 33% from 98 million AUD in the first half of 2024 to 130 million AUD in the first half of 2025, primarily including a net foreign exchange loss of 30 million AUD due to AUD appreciation and a 12 million AUD increase in Safeguard Mechanism expenses - Other operating expenses increased by **33%** from **98 million AUD** in the first half of 2024 to **130 million AUD** in the first half of 2025[103](index=103&type=chunk) - This includes a net foreign exchange loss of **30 million AUD** recognized during the reporting period due to AUD appreciation (first half of 2024: net gain of 52 million AUD recorded in other income) and a **12 million AUD** increase in Safeguard Mechanism expenses[103](index=103&type=chunk) [Share of Profit from Equity Accounted Investments, Net of Tax](index=19&type=section&id=Share%20of%20Profit%20from%20Equity%20Accounted%20Investments,%20Net%20of%20Tax) Share of profit from equity accounted investments, net of tax, decreased from 4 million AUD in the first half of 2024 to 1 million AUD in the first half of 2025, primarily due to a decline in the profit after tax from the Middlemount Joint Venture, partially offset by an increase in the profit after tax from the Group's 30% interest in Port Waratah Coal Services - Share of profit from equity accounted investments, net of tax, decreased from **4 million AUD** in the first half of 2024 to **1 million AUD** in the first half of 2025[104](index=104&type=chunk) - This was primarily due to a decline in the profit after tax from the Middlemount Joint Venture, partially offset by an increase in the profit after tax from the Group's **30%** interest in Port Waratah Coal Services[104](index=104&type=chunk) [Depreciation and Amortisation](index=19&type=section&id=Depreciation%20and%20Amortisation) Depreciation and amortisation expenses decreased by 4% from 400 million AUD in the first half of 2024 to 383 million AUD in the first half of 2025, including the impact of Stratford ceasing mining activities in the first half of 2024; depreciation and amortisation costs per tonne of saleable coal decreased from 24 AUD to 20 AUD over the same period - Depreciation and amortisation expenses decreased by **4%** from **400 million AUD** in the first half of 2024 to **383 million AUD** in the first half of 2025[105](index=105&type=chunk) - Depreciation and amortisation costs per tonne of saleable coal decreased from **24 AUD** to **20 AUD** over the same period[105](index=105&type=chunk) [Operating EBIT and Margin](index=19&type=section&id=Operating%20EBIT%20and%20Margin) Operating EBIT decreased by 64% from 590 million AUD in the first half of 2024 to 212 million AUD in the first half of 2025, primarily due to a reduction in operating EBITDA, with the operating EBIT margin as a percentage of operating revenue declining from 19% to 8% - Operating EBIT decreased by **64%** from **590 million AUD** in the first half of 2024 to **212 million AUD** in the first half of 2025[106](index=106&type=chunk) - The operating EBIT margin as a percentage of operating revenue decreased from **19%** in the first half of 2024 to **8%** in the first half of 2025[106](index=106&type=chunk) [Net Finance (Costs)/Income](index=19&type=section&id=Net%20Finance%20(Costs)%2FIncome) Net finance income increased by 111% from 9 million AUD in the first half of 2024 to 19 million AUD in the first half of 2025; interest expenses and bank fees and charges increased by 10% to 33 million AUD, while interest income increased by 33% to 52 million AUD, primarily due to higher cash balances during the reporting period - Net finance income increased by **111%** from **9 million AUD** in the first half of 2024 to **19 million AUD** in the first half of 2025[107](index=107&type=chunk) - Interest income increased by **33%** from **39 million AUD** in the first half of 2024 to **52 million AUD** in the first half of 2025, primarily due to higher cash balances during the reporting period[107](index=107&type=chunk) [Profit Before Income Tax and Margin](index=20&type=section&id=Profit%20Before%20Income%20Tax%20and%20Margin) Profit before income tax decreased by 58% from 571 million AUD in the first half of 2024 to 239 million AUD in the first half of 2025, with the profit before income tax margin as a percentage of operating revenue declining from 18% to 9% over the same period - Profit before income tax decreased by **58%** from **571 million AUD** in the first half of 2024 to **239 million AUD** in the first half of 2025[109](index=109&type=chunk) - The profit before income tax margin as a percentage of operating revenue decreased from **18%** to **9%** over the same period[109](index=109&type=chunk) [Income Tax Expense](index=20&type=section&id=Income%20Tax%20Expense) Income tax expense decreased from 151 million AUD in the first half of 2024 to 76 million AUD in the first half of 2025, with effective tax rates of 26.4% and 31.8% respectively, the increase primarily due to adjustments related to prior year tax provision estimates - Income tax expense decreased from **151 million AUD** in the first half of 2024 to **76 million AUD** in the first half of 2025[110](index=110&type=chunk) - The effective tax rates were **26.4%** and **31.8%** respectively, with the increase primarily due to adjustments related to prior year tax provision estimates[110](index=110&type=chunk) [Profit After Income Tax and Margin](index=20&type=section&id=Profit%20After%20Income%20Tax%20and%20Margin) Profit after income tax decreased by 61% from 420 million AUD in the first half of 2024 to 163 million AUD in the first half of 2025, with the profit after income tax margin as a percentage of operating revenue declining from 14% to 6% over the same period - Profit after income tax decreased by **61%** from **420 million AUD** in the first half of 2024 to **163 million AUD** in the first half of 2025[111](index=111&type=chunk) - The profit after income tax margin as a percentage of operating revenue decreased from **14%** to **6%** over the same period[111](index=111&type=chunk) [Earnings Per Share Attributable to Ordinary Equity Holders of the Company](index=20&type=section&id=Earnings%20Per%20Share%20Attributable%20to%20Ordinary%20Equity%20Holders%20of%20the%20Company) Basic earnings per share decreased by 61% from 31.9 AUD cents/share in the first half of 2024 to 12.4 AUD cents/share in the first half of 2025, and diluted earnings per share also decreased by 61% to 12.4 AUD cents/share, primarily due to reduced profit after income tax - Basic earnings per share decreased by **61%** from **31.9 AUD cents/share** in the first half of 2024 to **12.4 AUD cents/share** in the first half of 2025[112](index=112&type=chunk) - Diluted earnings per share decreased by **61%** from **31.8 AUD cents/share** in the first half of 2024 to **12.4 AUD cents/share** in the first half of 2025[112](index=112&type=chunk) [Non-Operating Items Overview](index=20&type=section&id=Non-Operating%20Items%20Overview) For the half-year ended June 30, 2025, non-operating items had a net positive impact of 8 million AUD on profit before tax, primarily including contingent royalty expenses, contingent royalty remeasurement gains, and royalty receivable remeasurement gains Impact of Non-Operating Items on Profit Before Tax (million AUD) | Item | 2025 Half-Year | 2024 Half-Year | | :--- | :--- | :--- | | Contingent Royalty Expense | (18) | (14) | | Contingent Royalty Remeasurement | 24 | (16) | | Royalty Receivable Remeasurement | 2 | 2 | | **Profit / (Loss) Impact Before Tax** | **8** | **(28)** | - Contingent royalty expenses are related to contingent royalties payable to Rio Tinto, triggered when the globalNewcastle index price exceeds a certain threshold[113](index=113&type=chunk) Cash Flow Analysis For the half-year ended June 30, 2025, net cash inflow from operating activities decreased by 44% to 473 million AUD, primarily due to reduced operating EBITDA and inventory changes; net cash outflow from investing activities increased by 43% to 400 million AUD, mainly due to higher capital expenditure; and net cash outflow from financing activities increased by 56% to 713 million AUD, primarily due to increased dividend payments [Net Cash Flow from Operating Activities](index=20&type=section&id=Net%20Cash%20Flow%20from%20Operating%20Activities) Net cash inflow from operating activities decreased by 378 million AUD (44%) to 473 million AUD, primarily due to a 558 million AUD reduction in net receipts from customers less payments to suppliers, reflecting a 395 million AUD decrease in operating EBITDA, a 128 million AUD change in inventories, and a 172 million AUD reduction in tax payments - Net cash inflow from operating activities decreased by **378 million AUD (44%)** to **473 million AUD**[116](index=116&type=chunk) - This was primarily due to a **558 million AUD** reduction in net receipts from customers less payments to suppliers, reflecting a **395 million AUD** decrease in operating EBITDA and a **128 million AUD** change in inventories[116](index=116&type=chunk) [Net Cash Flow from Investing Activities](index=20&type=section&id=Net%20Cash%20Flow%20from%20Investing%20Activities) Net cash outflow from investing activities increased by 121 million AUD (43%) to 400 million AUD, primarily due to a 121 million AUD increase in capital expenditure - Net cash outflow from investing activities increased by **121 million AUD (43%)** to **400 million AUD**[117](index=117&type=chunk) - This was primarily due to a **121 million AUD** increase in capital expenditure[117](index=117&type=chunk) [Net Cash Flow from Financing Activities](index=20&type=section&id=Net%20Cash%20Flow%20from%20Financing%20Activities) Net cash outflow from financing activities increased by 256 million AUD (56%) to 713 million AUD, primarily due to the payment of the 2024 final declared dividend of 687 million AUD - Net cash outflow from financing activities increased by **256 million AUD (56%)** to **713 million AUD**[118](index=118&type=chunk) - In the first half of 2025, net cash outflow from financing activities included **687 million AUD** paid for the settlement of the 2024 final declared dividend[119](index=119&type=chunk) Financial Resources and Liquidity As of June 30, 2025, current assets decreased by 658 million AUD to 2.882 billion AUD, mainly due to a reduction in cash and cash equivalents; current liabilities decreased by 27 million AUD; total assets decreased by 572 million AUD, and total equity decreased by 514 million AUD; the net cash position decreased from 2.349 billion AUD to 1.667 billion AUD, resulting in a virtually zero net gearing ratio; the company faces foreign currency risk and hedges through forward foreign exchange contracts [Liquidity Overview](index=21&type=section&id=Liquidity%20Overview) As of June 30, 2025, current assets decreased by 658 million AUD to 2.882 billion AUD, primarily due to a 666 million AUD reduction in cash and cash equivalents; current liabilities decreased by 27 million AUD to 1.207 billion AUD; total assets decreased by 572 million AUD to 11.784 billion AUD, and total equity decreased by 514 million AUD to 8.803 billion AUD Financial Position Overview (million AUD) | Metric | June 30, 2025 | December 31, 2024 | Change (million AUD) | | :--- | :--- | :--- | :--- | | Total Current Assets | 2,882 | 3,540 | (658) | | Total Current Liabilities | (1,207) | (1,234) | 27 | | Net Current Assets | 1,675 | 2,306 | (631) | | Total Assets | 11,784 | 12,356 | (572) | | Total Liabilities | (2,981) | (3,039) | 58 | | Total Equity | 8,803 | 9,317 | (514) | - The Group's primary sources of liquidity include an opening cash position of **2.461 billion AUD** and cash flow from operating activities of **473 million AUD** for the half-year ended June 30, 2025[123](index=123&type=chunk) [Capital Structure and Net Gearing Ratio](index=21&type=section&id=Capital%20Structure%20and%20Net%20Gearing%20Ratio) The Group's net cash position decreased from 2.349 billion AUD on December 31, 2024, to 1.667 billion AUD on June 30, 2025; due to holding a net cash position, the net gearing ratio is effectively zero; the company faces foreign currency risk and hedges a portion of USD-denominated contract sales and foreign currency-denominated asset purchases through forward foreign exchange contracts Capital Structure (million AUD) | Metric | June 30, 2025 | December 31, 2024 | Change (million AUD) | | :--- | :--- | :--- | :--- | | Interest-Bearing Liabilities | 128 | 112 | 16 | | Less: Cash and Cash Equivalents | (1,795) | (2,461) | 666 | | **Net (Cash) / Debt** | **(1,667)** | **(2,349)** | **682** | | Total Equity | 8,803 | 9,317 | (514) | | Net Debt + Total Equity | 7,136 | 6,968 | 168 | - The Group's net cash position decreased from **2.349 billion AUD** on December 31, 2024, to **1.667 billion AUD** on June 30, 2025[127](index=127&type=chunk) - The company hedges a portion of USD-denominated contract sales and foreign currency-denominated asset purchases with corresponding currencies to mitigate adverse impacts on cash flows from future appreciation or depreciation of the AUD against relevant currencies[131](index=131&type=chunk) [Available Debt Facilities](index=22&type=section&id=Available%20Debt%20Facilities) As of June 30, 2025, the Group had 198 million AUD in undrawn bank guarantees within its 1.2 billion AUD contingent debt facility, which is for operational purposes and provided in the ordinary course of business to support port, rail, government, and other operational departments; the contingent debt facility matures in February 2026 and is currently undergoing refinancing - As of June 30, 2025, the Group had **198 million AUD** in undrawn bank guarantees within its **1.2 billion AUD** contingent debt facility[132](index=132&type=chunk) - The contingent debt facility matures in February 2026 and is currently undergoing refinancing[132](index=132&type=chunk) - Yanzhou Coal Mining Company Limited directors have provided a letter of support, ensuring the Group's continued operation and solvency as long as Yanzhou Coal Mining Company Limited holds at least **51%** of the company's shares[132](index=132&type=chunk) Capital Expenditure and Future Development For the half-year ended June 30, 2025, cash outflow for property, plant, and equipment capital expenditure increased year-on-year to 407 million AUD; capital commitments totaled 189 million AUD at the end of the reporting period; the company continues to seek high-quality acquisition opportunities and focuses on organic growth, advancing brownfield expansions and extension projects, particularly at tier-one assets such as Moolarben, Warkworth, and Hunter Valley [Capital Expenditure and Commitments](index=22&type=section&id=Capital%20Expenditure%20and%20Commitments) For the half-year ended June 30, 2025, the Group's cash outflow for property, plant, and equipment capital expenditure was 407 million AUD (first half of 2024: 286 million AUD); as of June 30, 2025, the Group's capital commitments totaled 189 million AUD (December 31, 2024: 312 million AUD) - For the half-year ended June 30, 2025, the Group's cash outflow for property, plant, and equipment capital expenditure was **407 million AUD** (first half of 2024: 286 million AUD)[133](index=133&type=chunk) - As of June 30, 2025, the Group's commitments included capital commitments of **189 million AUD** (December 31, 2024: 312 million AUD)[133](index=133&type=chunk) [Significant Investments and Development Strategy](index=22&type=section&id=Significant%20Investments%20and%20Development%20Strategy) The company continues to seek high-quality acquisition opportunities and focuses on organic growth, advancing brownfield expansions and extension projects, particularly at tier-one assets such as Moolarben, Warkworth, and Hunter Valley; studies for the Warkworth underground mine project and the Hunter Valley mine life extension application are ongoing; any new plans are carefully evaluated and require review and approval by the Yancoal Australia Board before commencement - The Group will continue to focus on exploration and potential expansion projects at its tier-one assets in Moolarben, Warkworth, and Hunter Valley[135](index=135&type=chunk) - The Warkworth underground mine project study requires further evaluation, with a feasibility study potentially commencing in 2026[135](index=135&type=chunk) - The Hunter Valley Joint Venture proposed a significant mine life extension within existing mining leases, and an 18-month extension application to DPHI was approved[135](index=135&type=chunk) Employees and Risk Management As of June 30, 2025, the Group had approximately 3,900 employees, with total employee costs of 409 million AUD; the company is committed to employee capability development, psychological safety, and diversity, with female employees consistently at 15.6%, new female hires at 21%, and a decrease in female employee turnover; the Group faces currency, price, interest rate, credit, and liquidity risks, managed through tools such as forward foreign exchange contracts; as of June 30, 2025, total contingent liabilities were 1.002 billion AUD, primarily comprising bank guarantees and performance bonds [Employee Profile and Development](index=22&type=section&id=Employee%20Profile%20and%20Development) As of June 30, 2025, the Group had approximately 3,900 employees, with total employee costs of 409 million AUD; the company is committed to employee capability development, psychological safety, and diversity, with female employees consistently at 15.6%, new female hires at 21%, and a decrease in female employee turnover - As of June 30, 2025, the Group had approximately **3,900 employees**, with total employee costs of **409 million AUD** (first half of 2024: 401 million AUD)[138](index=138&type=chunk) - In 2025, the proportion of female employees remained stable at **15.6%**, with female new hires reaching **21%**, and female employee turnover decreasing from 14.6% in June 2024 to **10.4%**[140](index=140&type=chunk) - The company launched the "Leading the Way" leadership program and the IGNITE talent development program, and continues to implement mental health initiatives and workplace behavior training[139](index=139&type=chunk)[140](index=140&type=chunk) [Financial and Other Risk Management](index=23&type=section&id=Financial%20and%20Other%20Risk%20Management) The Group faces financial risks from its operations and use of financial instruments, primarily including currency risk, price risk, interest rate risk, credit risk, and liquidity risk, which are managed through tools such as forward foreign exchange contracts; as of June 30, 2025, 281 million AUD in provisionally priced sales remain unsettled, with a 10% price fluctuation impacting 28 million AUD - The Group faces financial risks from its operations and use of financial instruments, primarily including currency risk, price risk, interest rate risk, credit risk, and liquidity risk[143](index=143&type=chunk) - As of June 30, 2025, provisionally priced sales totaling **281 million AUD** remain unsettled; a **10%** increase/decrease in price would increase/decrease provisionally priced sales by **28 million AUD**[143](index=143&type=chunk) [Contingent Liabilities and Asset Pledges](index=23&type=section&id=Contingent%20Liabilities%20and%20Asset%20Pledges) As of June 30, 2025, the Group's contingent liabilities included 1.002 billion AUD in bank guarantees and insurance bonds, primarily for performance guarantees to third parties and reclamation cost guarantees to government departments as required by regulations for mining leases; contingent debt facilities are secured by assets of Yancoal Resources Ltd and Coal & Allied Industries Pty Ltd consolidated group Contingent Liabilities (million AUD) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Bank Guarantees and Insurance Bonds | 1,002 | 1,038 | - Contingent debt facilities are secured by assets of Yancoal Resources Ltd and Coal & Allied Industries Pty Ltd consolidated group, with a carrying value of **7.702 billion AUD** as of June 30, 2025[146](index=146&type=chunk) Outlook The Group is on track to achieve the upper end of its full-year attributable saleable coal production guidance of 35 million to 39 million tonnes and aims to control full-year cash operating costs in the lower half of the 89 AUD/tonne to 97 AUD/tonne range; full-year property, plant, and equipment capital expenditure is expected to progressively reach the guidance range of 750 million AUD to 900 million AUD; the acquisition of an additional 3.75% interest in the Moolarben Joint Venture is expected to increase full-year attributable saleable coal production by approximately 0.2 million tonnes - The Group is highly likely to achieve the upper end of its full-year attributable saleable coal production guidance target of **35 million to 39 million tonnes**[147](index=147&type=chunk) - The Group aims to control full-year cash operating costs in the lower half of the full-year guidance range of **89 AUD/tonne to 97 AUD/tonne**[147](index=147&type=chunk) - Full-year capital expenditure for property, plant, and equipment is expected to progressively reach the full-year guidance range of **750 million AUD to 900 million AUD**[147](index=147&type=chunk) - The acquisition of an additional **3.75%** interest in the Moolarben Joint Venture is expected to impact full-year attributable saleable coal production by approximately **0.2 million tonnes**[147](index=147&type=chunk) Consolidated Financial Statements This section contains the Consolidated Statement of Profit or Loss and Other Comprehensive Income, Consolidated Statement of Financial Position, Consolidated Statement of Changes in Equity, and Consolidated Statement of Cash Flows for Yancoal Australia Ltd and its subsidiaries for the half-year ended June 30, 2025, providing a formal report on the Group's financial performance and position during the period [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=25&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the half-year ended June 30, 2025, the company reported revenue of 2,675 million AUD, profit after income tax of 163 million AUD, and basic and diluted earnings per share of 12.4 AUD cents Consolidated Statement of Profit or Loss and Other Comprehensive Income (million AUD) | Metric | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Revenue | 2,675 | 3,138 | | Profit Before Income Tax | 239 | 571 | | Profit After Income Tax | 163 | 420 | | Attributable to Yancoal Australia Ltd Shareholders | 163 | 420 | | Basic Earnings Per Share (AUD cents) | 12.4 | 31.9 | | Diluted Earnings Per Share (AUD cents) | 12.4 | 31.8 | [Consolidated Statement of Financial Position](index=26&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the company's total assets were 11.784 billion AUD, total liabilities were 2.981 billion AUD, and net assets were 8.803 billion AUD; cash and cash equivalents totaled 1.795 billion AUD, and inventories were 548 million AUD Consolidated Statement of Financial Position (million AUD) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Current Assets | 2,882 | 3,540 | | Total Non-Current Assets | 8,902 | 8,816 | | **Total Assets** | **11,784** | **12,356** | | Total Current Liabilities | 1,207 | 1,234 | | Total Non-Current Liabilities | 1,774 | 1,805 | | **Total Liabilities** | **2,981** | **3,039** | | **Net Assets** | **8,803** | **9,317** | [Consolidated Statement of Changes in Equity](index=27&type=section&id=Consolidated%20Statement%20of%20Changes%20in%20Equity) As of June 30, 2025, total share capital and reserves attributable to Yancoal Australia Ltd shareholders were 8.801 billion AUD, with profit after income tax of 163 million AUD and dividends paid of 687 million AUD during the period Consolidated Statement of Changes in Equity (million AUD) | Metric | June 30, 2025 | January 1, 2024 | | :--- | :--- | :--- | | Opening Balance (Attributable to Yancoal Australia Shareholders) | 9,315 | 8,440 | | Profit After Income Tax | 163 | 420 | | Dividends Paid | (687) | (429) | | Closing Balance (Attributable to Yancoal Australia Shareholders) | 8,801 | 8,438 | [Consolidated Statement of Cash Flows](index=28&type=section&id=Consolidated%20Statement%20of%20Cash%20Flows) For the half-year ended June 30, 2025, net cash inflow from operating activities was 473 million AUD, net cash outflow from investing activities was 400 million AUD, and net cash outflow from financing activities was 713 million AUD, resulting in a net decrease of 640 million AUD in cash and cash equivalents Consolidated Statement of Cash Flows (million AUD) | Cash Flow Type | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Net Cash Inflow from Operating Activities | 473 | 851 | | Net Cash Outflow from Investing Activities | (400) | (279) | | Net Cash Outflow from Financing Activities | (713) | (457) | | Net (Decrease) / Increase in Cash and Cash Equivalents | (640) | 115 | | Cash and Cash Equivalents at End of Period | 1,795 | 1,546 | Notes to the Consolidated Financial Statements This section provides detailed notes to the consolidated financial statements for the half-year ended June 30, 2025, covering the basis of preparation, segment information, revenue, expenses, taxation, earnings per share, operating assets and liabilities (including property, plant and equipment, mining tenements, asset impairment, exploration and evaluation assets, intangible assets, trade and other receivables, inventories, trade and other payables), capital structure and financing (including interest-bearing liabilities, contributed equity, share-based payments, dividends, reserves, contingent matters, fair value measurement of assets and liabilities), group structure (including interests in other entities, related party transactions), and other information (including commitments and post-reporting period events) [Basis of Preparation of Half-Year Financial Statements](index=30&type=section&id=A%20Basis%20of%20Preparation%20of%20Half-Year%20Financial%20Statements) The half-year financial statements are prepared in accordance with AASB 134 Interim Financial Reporting and the Corporations Act 2001, complying with International Financial Reporting Standards, and the independent auditor's review report on the consolidated financial statements is unqualified - The half-year financial statements are prepared in accordance with AASB 134 Interim Financial Reporting and the Corporations Act 2001, and comply with International Financial Reporting Standards issued by the International Accounting Standards Board[160](index=160&type=chunk)[161](index=161&type=chunk) - The independent auditor's review report on the consolidated financial statements is unqualified and without modification[162](index=162&type=chunk) [Segment Information](index=31&type=section&id=B1%20Segment%20Information) The company reports performance across two geographical segments: New South Wales and Queensland; as of June 30, 2025, the New South Wales segment generated 2.277 billion AUD in revenue, and the Queensland segment generated 281 million AUD; operating EBITDA was 595 million AUD, and operating EBIT was 212 million AUD; revenue from the top five external customers accounted for approximately 36% of coal sales revenue Segment Revenue and Profit (million AUD) | Metric | New South Wales | Queensland | Head Office | Total | | :--- | :--- | :--- | :--- | :--- | | Total Segment Revenue | 2,277 | 281 | — | 2,558 | | Operating EBIT | 278 | (55) | (11) | 212 | | Operating EBITDA | 637 | (34) | (8) | 595 | - Revenue from the top five external customers was **918 million AUD** (June 30, 2024: 1.167 billion AUD), accounting for approximately **36%** of the Group's total coal sales revenue (June 30, 2024: 39%)[166](index=166&type=chunk) [Revenue Details](index=33&type=section&id=B2%20Revenue) As of June 30, 2025, total revenue was 2.675 billion AUD, with coal sales revenue at 2.558 billion AUD; revenue is disaggregated by major geographical markets and product mix, with Japan, China, Taiwan, and South Korea remaining key markets; 281 million AUD in provisionally priced sales remain unsettled Revenue Composition (million AUD) | Revenue Source | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Coal Sales | 2,558 | 3,030 | | Freight | 39 | 44 | | Interest Income | 52 | 39 | | Royalty Income | 13 | 12 | | Other Items | 13 | 13 | | **Total Revenue** | **2,675** | **3,138** | Coal Sales Revenue Disaggregated by Major Geographical Markets (million AUD) | Geographical Market | June 30, 2025 | | :--- | :--- | | Japan | 757 | | China | 688 | | Taiwan | 335 | | South Korea | 310 | | Thailand | 191 | | Vietnam | 104 | | Malaysia | 52 | | India | 45 | | Europe | 44 | | Indonesia | 20 | | Chile | 8 | | Australia | 4 | | **Total** | **2,558** | - As of June 30, 2025, revenue from provisionally priced sales of **281 million AUD** (June 30, 2024: 279 million AUD) remains unsettled[170](index=170&type=chunk) [Other Income](index=35&type=section&id=B3%20Other%20Income) As of June 30, 2025, total other income was 31 million AUD, primarily comprising 24 million AUD in contingent royalty remeasurement gains and 5 million AUD in miscellaneous income; net foreign exchange gains decreased from 50 million AUD in the first half of 2024 to zero Other Income (million AUD) | Item | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Contingent Royalty Remeasurement Gain | 24 | — | | Miscellaneous Income | 5 | 1 | | Royalty Receivable Remeasurement Gain | 2 | 2 | | Net Foreign Exchange Gain | — | 50 | | **Total** | **31** | **53** | [Expense Details](index=35&type=section&id=B4%20Expense%20Details) As of June 30, 2025, total employee benefits were 409 million AUD, and total finance costs were 21 million AUD; total other operating expenses were 160 million AUD, primarily including a net foreign exchange loss of 30 million AUD and Safeguard Mechanism expenses of 17 million AUD; operating expenses from the largest supplier and top five suppliers accounted for 8.0% and 29.0% respectively Employee Benefits (million AUD) | Item | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Employee Benefits | 370 | 367 | | Superannuation Contributions | 39 | 34 | | **Total** | **409** | **401** | Other Operating Expenses (million AUD) | Item | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Net Foreign Exchange Loss | 30 | — | | Safeguard Mechanism Expenses | 17 | 5 | | Contingent Royalty Payments | 18 | 14 | | **Total** | **160** | **138** | - For the first six months of 2025, **8.0%** of total operating expenses came from the largest supplier, and **29.0%** came from the top five suppliers[175](index=175&type=chunk) [Taxation](index=36&type=section&id=B5%20Taxation) As of June 30, 2025, income tax expense was 76 million AUD, with an effective tax rate of 31.8%; the increase in the effective tax rate was primarily due to adjustments related to prior year tax provision estimates Income Tax Expense (million AUD) | Metric | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Income Tax Expense | (76) | (151) | - For the half-year ended June 30, 2025, the estimated average tax rate used was **31.8%** (June 30, 2024: 26.4%)[176](index=176&type=chunk) [Earnings Per Share](index=36&type=section&id=B6%20Earnings%20Per%20Share) As of June 30, 2025, both basic and diluted earnings per share were 12.4 AUD cents, with the weighted average number of ordinary shares used to calculate earnings per share being 1,317,280,353 shares Earnings Per Share (AUD cents

香 港 交 易 及 結 算 所 有 限 公 司 及 香 港 聯 合 交 易 所 有 限 公 司（「聯 交 所」）對 本 公告之內容概不負責，對其準確性或完整性亦不發表任何聲明，並明確表示， 概 不 就 因 本 公 告 全 部 或 任 何 部 分 內 容 而 產 生 或 因 倚 賴 該 等 內 容 而 引 致 之 任 何 損 失 承 擔 任 何 責 任。 SOUTH CHINA FINANCIAL HOLDINGS LIMITED 南華金融控股有限公司 （於香港註冊成立之有限公司） （股份代號：00619） 截 至 二 零 二 五 年 六 月 三 十 日 止 六 個 月 之 中 期 業 績 公 告 未 經 審 核 中 期 業 績 South China Financial Holdings Limited南 華 金 融 控 股 有 限 公 司（「本 公 司」）之 董 事 會（「董 事 會」）提 呈 本 公 司 及 其 附 屬 公 司（統 稱「本 集 團」）截 至 二 零 二 五 年 六 月 三 十 日 止 六 個 月（「該 期 間」）未 經 審 核 綜 合 業 績 連 同 相 關 比 較 數 字 如 下： 簡 ...

[Company Information](index=3&type=section&id=%E5%85%AC%E5%8F%B8%E8%B3%87%E6%96%99) The company's board of directors, committees, contact information, and share details are presented [Board of Directors](index=3&type=section&id=%E8%91%A3%E4%BA%8B%E6%9C%83%E6%88%90%E5%93%A1) The company's board comprises executive directors, including the Chairman and CEO, and independent non-executive directors - Executive Directors include **Mr. Lu Ruibo (Chairman and CEO)**, Mr. Yu Yuepeng, Ms. Zhu Liwei, and Mr. Wang Dong[5](index=5&type=chunk) - Independent Non-Executive Directors include **Dr. Yan Zhenming**, Mr. Li Xiaoming, and Ms. Chow Lok Mei Ki[5](index=5&type=chunk) [Committee Members](index=3&type=section&id=%E5%A7%94%E5%93%A1%E6%9C%83%E6%88%90%E5%93%A1) Key committees, including Audit, Remuneration, Nomination, and Sustainability, are established with designated chairpersons for effective governance - The **Audit Committee** is chaired by **Ms. Chow Lok Mei Ki**[5](index=5&type=chunk) - The **Remuneration Committee** is chaired by **Mr. Li Xiaoming**[5](index=5&type=chunk) - The **Nomination Committee** is chaired by **Mr. Lu Ruibo**[5](index=5&type=chunk) - The **Sustainability Committee** is chaired by **Dr. Yan Zhenming**[5](index=5&type=chunk) [Company Contact and Registration Information](index=3&type=section&id=%E5%85%AC%E5%8F%B8%E8%81%AF%E7%B5%A1%E5%8F%8A%E8%A8%BB%E5%86%8A%E4%BF%A1%E6%81%AF) The company is registered in the Cayman Islands with headquarters in Hong Kong and a main operating location in Wuxi, Jiangsu, audited by KPMG - The company's registered office is located in the **Cayman Islands**[5](index=5&type=chunk) - The headquarters and principal place of business in Hong Kong are located at **Shui On Centre, Wan Chai, Hong Kong**[5](index=5&type=chunk) - The auditor is **KPMG**[6](index=6&type=chunk) [Share and Dividend Information](index=4&type=section&id=%E8%82%A1%E4%BB%BD%E5%8F%8A%E8%82%A1%E6%81%AF%E4%BF%A1%E6%81%AF) The company's shares are listed under stock code 1286, with an interim dividend of HKD 0.08 per share declared for 2025 - Stock code: **1286**, listing date: **June 28, 2019**[7](index=7&type=chunk) - An **interim dividend of 8.0 HK cents per share** for 2025 was declared, with an ex-dividend date of **August 25, 2025**[7](index=7&type=chunk) [Financial Highlights](index=5&type=section&id=%E8%B2%A1%E5%8B%99%E6%91%98%E8%A6%81) This section provides a concise overview of the company's financial performance, balance sheet, and key ratios for the period [Financial Performance for the Six Months Ended June 30](index=5&type=section&id=%E6%88%AA%E8%87%B3%E5%85%AD%E6%9C%88%E4%B8%89%E5%8D%81%E6%97%A5%E6%AD%A2%E5%85%AD%E5%80%8B%E6%9C%88%E8%B2%A1%E5%8B%99%E8%A1%A8%E7%8F%BE) Revenue increased by 2.0% to HKD 2,449.9 million, with profit attributable to equity holders rising 13.7% to HKD 346.3 million Financial Performance for the Six Months Ended June 30 (HKD million) | Metric | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | Revenue | 2,449.9 | 2,402.5 | 2.0% | | Gross Profit | 681.5 | 634.5 | 7.4% | | Gross Margin | 27.8% | 26.4% | 1.4% | | Profit Attributable to Equity Holders of the Company | 346.3 | 304.5 | 13.7% | | Adjusted Profit Attributable to Equity Holders | 359.6 | 322.3 | 11.6% | | Basic Earnings Per Share (HK cents) | 18.35 | 16.13 | 13.8% | | Dividend Per Share (HK cents) | 8.0 | 8.0 | 0.0% | | EBITDA | 715.3 | 694.3 | 3.0% | | EBITDA Margin | 29.2% | 28.9% | 0.3% | | Net Cash Generated from Operating Activities | 555.3 | 497.9 | 11.5% | | Free Cash Flow from Operations | 116.6 | 156.6 | -25.5% | [8](index=8&type=chunk) [Balance Sheet and Ratios for the Six Months Ended June 30](index=6&type=section&id=%E6%88%AA%E8%87%B3%E5%85%AD%E6%9C%88%E4%B8%89%E5%8D%81%E6%97%A5%E6%AD%A2%E5%85%AD%E5%80%8B%E6%9C%88%E8%B3%87%E7%94%A2%E8%B2%A0%E5%82%B5%E5%8F%8A%E6%AF%94%E7%8E%87) Cash and cash equivalents increased by 8.9% to HKD 655.2 million, while total equity grew 10.9% to HKD 5,262.2 million Balance Sheet and Ratios for the Six Months Ended June 30 (HKD million) | Metric | As of June 30, 2025 | As of December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Cash and Cash Equivalents | 655.2 | 601.7 | 8.9% | | Total Debt | 2,353.4 | 2,196.1 | 7.2% | | Net Debt | 1,698.2 | 1,594.4 | 6.5% | | Total Equity | 5,262.2 | 4,742.9 | 10.9% | | Market Capitalization | 5,567.5 | 3,680.2 | 51.3% | | Enterprise Value | 7,283.1 | 5,296.1 | 37.5% | | **Key Financial Ratios** | | | | | Adjusted Return on Equity | 13.0% | 12.8% | | | Price-to-Earnings Ratio | 8.1 | 5.7 | | | Enterprise Value to LTM Adjusted EBITDA | 5.4 | 4.0 | | | Net Debt to LTM Adjusted EBITDA | 1.3 | 1.2 | | | Net Gearing Ratio | 32.3% | 33.6% | | | Adjusted Interest Coverage Ratio | 9.8 | 7.4 | | [16](index=16&type=chunk) [Reconciliation of Non-IFRS Measures](index=7&type=section&id=%E9%9D%9E%E5%9C%8B%E9%9A%9B%E8%B2%A1%E5%8B%99%E5%A0%B1%E5%91%8A%E6%BA%96%E5%89%87%E8%A8%88%E9%87%8F%E5%B7%A5%E5%85%B7%E5%B0%8D%E8%B3%AC) Reconciliation of profit for the period to adjusted profit attributable to equity holders and EBITDA to adjusted EBITDA is provided Reconciliation of Profit for the Period to Adjusted Profit Attributable to Equity Holders (HKD million) | Metric | For the Six Months Ended June 30 | | :--- | :--- | :--- | | | 2025 | 2024 | | Profit for the period | 347.4 | 305.5 | | Adjustments: Amortization and depreciation related to past purchase price allocation, net of tax | 13.3 | 17.8 | | Adjusted profit for the period | 360.7 | 323.3 | | Less: Profit attributable to non-controlling interests | (1.1) | (1.0) | | Adjusted profit attributable to equity holders | 359.6 | 322.3 | [17](index=17&type=chunk) Reconciliation of EBITDA to Adjusted EBITDA (HKD million) | Metric | For the Six Months Ended June 30 | LTM to June 30, 2025 | For the Year Ended December 31, 2024 | | :--- | :--- | :--- | :--- | :--- | | | 2025 | 2024 | | | | EBITDA | 715.3 | 694.3 | 1,411.9 | 1,390.9 | | Adjustments: Insurance claims received for Nantong fire incident | – | – | (72.3) | (72.3) | | Adjusted EBITDA | 715.3 | 694.3 | 1,339.6 | 1,318.6 | [19](index=19&type=chunk) [Chairman's Statement](index=8&type=section&id=%E4%B8%BB%E5%B8%AD%E5%A0%B1%E5%91%8A) The Chairman's statement reviews the company's overall performance, market challenges, and strategic initiatives for future growth [Overall Results for the Six Months Ended June 30](index=8&type=section&id=%E6%88%AA%E8%87%B3%E5%85%AD%E6%9C%88%E4%B8%89%E5%8D%81%E6%97%A5%E6%AD%A2%E5%85%AD%E5%80%8B%E6%9C%88%E6%95%B4%E9%AB%94%E6%A5%AD%E7%B8%BE) The Group achieved a 2.0% revenue increase to HKD 2,449.9 million, with adjusted profit attributable to equity holders up 11.6% - Revenue reached **HKD 2,449.9 million**, a year-on-year increase of **2.0%**[24](index=24&type=chunk) - Profit attributable to equity holders of the Company was **HKD 346.3 million**, a year-on-year increase of **13.7%**[24](index=24&type=chunk) - Adjusted profit attributable to equity holders was **HKD 359.6 million**, a year-on-year increase of **11.6%**[24](index=24&type=chunk) - An interim dividend of **8.0 HK cents per share** was declared[24](index=24&type=chunk) [Macroeconomic Environment and Operating Challenges](index=8&type=section&id=%E5%AE%8F%E8%A7%80%E7%B6%93%E6%BF%9F%E7%92%B0%E5%A2%83%E8%88%87%E7%B6%93%E7%87%9F%E6%8C%91%E6%88%B0) Global economic uncertainties, including US tariff policies and geopolitical tensions, have led to cautious client orders and increased supply chain risks - The global economy is affected by **uncertain US tariff policies and geopolitical tensions**, leading to cautious client orders and a preference for multi-source suppliers[25](index=25&type=chunk) - The new **Mexico factory recorded significant losses**, and the weak European automotive market impacted the performance of the Turkey factory[26](index=26&type=chunk) - Most factories in **China demonstrated resilient performance**, and lower financing costs contributed to an **11.6% increase in adjusted profit attributable to equity holders**[26](index=26&type=chunk) [Revenue Analysis by End Market](index=8&type=section&id=%E6%8C%89%E7%B5%82%E7%AB%AF%E5%B8%82%E5%A0%B4%E5%8A%83%E5%88%86%E7%9A%84%E6%94%B6%E5%85%A5%E5%88%86%E6%9E%90) Diversified industrial end market revenue grew 13.7%, driven by strong demand for high-horsepower engines, while other segments faced declines Revenue by End Market (HKD million) | By End Market | 2025 | % of Total | 2024 | % of Total | Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Diversified Industrial | 1,293.8 | 52.8% | 1,138.2 | 47.4% | 13.7% | | – High-Horsepower Engines | 533.7 | 21.8% | 359.8 | 15.0% | 48.3% | | – Construction Equipment | 339.1 | 13.8% | 334.1 | 13.9% | 1.5% | | – Agricultural Machinery | 154.6 | 6.3% | 177.2 | 7.4% | -12.8% | | – Recreational Boats and Vehicles | 68.7 | 2.8% | 91.8 | 3.8% | -25.2% | | – Others | 197.7 | 8.1% | 175.3 | 7.3% | 12.8% | | Automotive | 802.2 | 32.7% | 866.3 | 36.0% | -7.4% | | – Passenger Vehicles | 423.2 | 17.3% | 444.5 | 18.5% | -4.8% | | – Commercial Vehicles | 379.0 | 15.4% | 421.8 | 17.5% | -10.1% | | Aerospace, Medical & Energy | 353.9 | 14.5% | 398.0 | 16.6% | -11.1% | | – Aerospace | 239.1 | 9.8% | 255.5 | 10.6% | -6.4% | | – Medical | 60.7 | 2.5% | 40.3 | 1.7% | 50.6% | | – Energy | 54.1 | 2.2% | 102.2 | 4.3% | -47.1% | | Total | 2,449.9 | 100.0% | 2,402.5 | 100.0% | 2.0% | [29](index=29&type=chunk) - Sales in the **high-horsepower engine end market significantly increased by 48.3%** year-on-year, driven by surging demand for AI data center construction[27](index=27&type=chunk) - Revenue in the **medical end market surged by 50.6%** year-on-year, benefiting from the mass production of new products[28](index=28&type=chunk) [Revenue Analysis by Business Segment](index=10&type=section&id=%E6%8C%89%E6%A5%AD%E5%8B%99%E5%88%86%E9%83%A8%E5%8A%83%E5%88%86%E7%9A%84%E6%94%B6%E5%85%A5%E5%88%86%E6%9E%90) Sand casting business saw a 35.9% increase in sales, driven by high-horsepower engines, while surface treatment revenue grew 33.8% Revenue by Business Segment (HKD million) | By Business Segment | 2025 | % of Total | 2024 | % of Total | Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Investment Castings | 922.6 | 37.7% | 957.0 | 39.8% | -3.6% | | Precision Machined Components and Others | 793.3 | 32.4% | 904.8 | 37.7% | -12.3% | | Sand Castings | 695.2 | 28.4% | 511.7 | 21.3% | 35.9% | | Surface Treatment | 38.8 | 1.5% | 29.0 | 1.2% | 33.8% | | Total | 2,449.9 | 100.0% | 2,402.5 | 100.0% | 2.0% | [32](index=32&type=chunk) - **Sand casting sales significantly increased by 35.9%** year-on-year, primarily due to strong growth in the high-horsepower engine end market[31](index=31&type=chunk) - **Surface treatment business revenue grew by 33.8%** year-on-year, as the Nantong factory completed its restoration[31](index=31&type=chunk) [Revenue Analysis by Geographical Region](index=10&type=section&id=%E6%8C%89%E5%9C%B0%E7%90%86%E5%8D%80%E5%9F%9F%E5%8A%83%E5%88%86%E7%9A%84%E6%94%B6%E5%85%A5%E5%88%86%E6%9E%90) Asia region sales increased by 22.1% due to strong performance in China, while Americas and Europe experienced declines Revenue by Geographical Region (HKD million) | By Geographical Region | 2025 | % of Total | 2024 | % of Total | Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Americas | 1,156.6 | 47.3% | 1,204.0 | 50.1% | -3.9% | | – United States | 998.1 | 40.8% | 1,090.1 | 45.4% | -8.4% | | – Others | 158.5 | 6.5% | 113.9 | 4.7% | 39.2% | | Europe | 733.2 | 29.9% | 739.9 | 30.8% | -0.9% | | Asia | 560.1 | 22.8% | 458.6 | 19.1% | 22.1% | | – China | 507.5 | 20.7% | 393.0 | 16.4% | 29.1% | | – Others | 52.6 | 2.1% | 65.6 | 2.7% | -19.8% | | Total | 2,449.9 | 100.0% | 2,402.5 | 100.0% | 2.0% | [35](index=35&type=chunk) - Overall sales in the **Asia region increased by 22.1%**, primarily driven by strong sales of high-horsepower engine products in China[34](index=34&type=chunk) - Sales in the **Americas and Europe markets decreased by 3.9% and 0.9%**, respectively, impacted by trade wars, tariff wars, and shrinking end-market demand[34](index=34&type=chunk) [Corporate Development and Strategy](index=11&type=section&id=%E4%BC%81%E6%A5%AD%E7%99%BC%E5%B1%95%E5%8F%8A%E7%AD%96%E7%95%A5) The company maintains a "global footprint, regional manufacturing, and dual-source production" strategy to mitigate trade risks and capitalize on growth markets - The company adheres to a strategy of **"global footprint, diversified end markets, and dual-source production"** to effectively hedge against trade protectionism impacts[37](index=37&type=chunk) - The **high-horsepower engine end market** has become the largest sub-segment, with sales revenue expected to maintain decent growth over the next two to three years[38](index=38&type=chunk) - The **Mexico factory's capital expenditure will increase** over the next one to two years due to client-requested capacity transfers and increased orders, with expectations to reduce losses and turn profitable[40](index=40&type=chunk) - The **Nantong factory is in a critical phase of capacity ramp-up** and is expected to maintain its growth trajectory in the second half of the year[41](index=41&type=chunk) [Outlook](index=12&type=section&id=%E5%B1%95%E6%9C%9B) The company anticipates accelerated sales growth in the second half of 2025, maintaining a mid-to-high single-digit full-year growth forecast - Sales growth rate is projected to **accelerate in the second half of 2025**, maintaining a **mid-to-high single-digit year-on-year growth forecast** for the full year[42](index=42&type=chunk) - The capital expenditure budget for the **Mexico SLP campus has increased to approximately HKD 600 million**, with phase two factory infrastructure expected to be largely completed by the end of 2026[43](index=43&type=chunk) - The workshop for producing **high-horsepower engine sand castings** within the Mexico campus will commence production in the **first quarter of next year**[43](index=43&type=chunk) - The company will continue to vigorously expand into **diversified industrial and aerospace, medical, and energy end markets**, especially products related to the AI industry[43](index=43&type=chunk) [Appreciation](index=12&type=section&id=%E8%87%B4%E8%AC%9D) The Chairman extends gratitude to all stakeholders for their continued support and contributions - The Chairman, on behalf of the Board, expresses gratitude to all stakeholders for their support[44](index=44&type=chunk) [Management Discussion and Analysis](index=13&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) This section provides a detailed analysis of the Group's financial performance, operational results, and financial position [Financial Performance Overview](index=13&type=section&id=%E8%B2%A1%E5%8B%99%E8%A1%A8%E7%8F%BE%E6%A6%82%E8%A6%BD) The Group's revenue increased by 2.0% to HKD 2,449.9 million, with profit for the period rising 13.7% to HKD 347.4 million Financial Performance Overview for the Six Months Ended June 30 (HKD million) | Metric | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | Revenue | 2,449.9 | 2,402.5 | 2.0% | | Gross Profit | 681.5 | 634.5 | 7.4% | | Gross Margin | 27.8% | 26.4% | 1.4% | | Operating Profit | 461.8 | 432.2 | 6.8% | | Operating Profit Margin | 18.8% | 18.0% | 0.8% | | Net Finance Costs | (41.0) | (55.0) | -25.5% | | Profit Before Tax | 420.8 | 377.2 | 11.6% | | Profit for the Period | 347.4 | 305.5 | 13.7% | | Net Profit Margin | 14.2% | 12.7% | 1.5% | [46](index=46&type=chunk) [Financial Review](index=14&type=section&id=%E8%B2%A1%E5%8B%99%E5%9B%9E%E9%A1%A7) A detailed review of revenue, gross profit, other income, expenses, and finance costs highlights key drivers of financial performance [Revenue](index=14&type=section&id=%E6%94%B6%E5%85%A5) Revenue increased by 2.0% to HKD 2,449.9 million for the six months ended June 30, compared to the prior period - Revenue increased by **2.0% to HKD 2,449.9 million** year-on-year[48](index=48&type=chunk) [Gross Profit and Gross Margin](index=14&type=section&id=%E6%AF%9B%E5%88%A9%E5%8F%8A%E6%AF%9B%E5%88%A9%E7%8E%87) Gross profit increased by 7.4% to HKD 681.5 million, with gross margin improving to 27.8%, driven by strong sand casting performance - Gross profit increased by **7.4% to HKD 681.5 million**[49](index=49&type=chunk) - Gross margin improved from **26.4% to 27.8%**[49](index=49&type=chunk) - Gross profit from sand casting factories significantly increased by **HKD 71.3 million**, primarily driven by sales growth in high-horsepower engine end market products[49](index=49&type=chunk) [Other Income](index=14&type=section&id=%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5) Other income decreased by HKD 0.8 million to HKD 12.7 million, primarily from government grants and technical development incentives - Other income decreased by **HKD 0.8 million to HKD 12.7 million**, mainly from government subsidies[50](index=50&type=chunk) [Net Other Gains](index=14&type=section&id=%E5%85%B6%E4%BB%96%E6%94%B6%E7%9B%8A%E6%B7%A8%E9%A1%8D) Net other gains amounted to HKD 24.1 million, a decrease from the prior year, mainly due to net exchange gains - Net other gains were **HKD 24.1 million**, a year-on-year decrease of **46.2%**[51](index=51&type=chunk) - This was primarily due to **net exchange gains of HKD 23.2 million**, resulting from the appreciation of the Euro and US Dollar against the Hong Kong Dollar[51](index=51&type=chunk) [Selling and Distribution Expenses](index=14&type=section&id=%E9%8A%B7%E5%94%AE%E5%8F%8A%E5%88%86%E9%8A%B7%E9%96%8B%E6%94%AF) Selling and distribution expenses increased by 8.5% to HKD 94.4 million, primarily due to higher US tariffs - Selling and distribution expenses increased by **8.5% to HKD 94.4 million**[52](index=52&type=chunk) - **US tariffs increased by HKD 6.3 million to HKD 16.0 million**[52](index=52&type=chunk) [Administrative and Other Operating Expenses](index=15&type=section&id=%E8%A1%8C%E6%94%BF%E5%8F%8A%E5%85%B6%E4%BB%96%E7%B6%93%E7%87%9F%E9%96%8B%E6%94%AF) Administrative and other operating expenses decreased by 6.6% to HKD 162.1 million, mainly due to reduced amortization and bad debt expenses - Administrative and other operating expenses decreased by **6.6% to HKD 162.1 million**[54](index=54&type=chunk) - The decrease was primarily due to **reduced amortization and depreciation expenses related to past purchase price allocation and lower bad debt expenses**[54](index=54&type=chunk) [Net Finance Costs](index=15&type=section&id=%E8%9E%8D%E8%B3%87%E6%88%90%E6%9C%AC%E6%B7%A8%E9%A1%8D) Net finance costs decreased by 25.5% to HKD 41.0 million, attributed to lower HKD borrowing rates and a higher proportion of RMB borrowings - Net finance costs decreased by **25.5% to HKD 41.0 million**[55](index=55&type=chunk) - The decrease was mainly due to **lower HKD borrowing rates and a higher proportion of RMB borrowings** during the period[55](index=55&type=chunk) [Income Tax](index=15&type=section&id=%E6%89%80%E5%BE%97%E7%A8%85) Income tax expense increased by 2.4% to HKD 73.4 million, reflecting the higher reported profit for the period - Income tax expense increased by **2.4% to HKD 73.4 million**, reflecting the increase in reported profit for the period[56](index=56&type=chunk) [Working Capital Analysis](index=15&type=section&id=%E7%87%9F%E9%81%8B%E8%B3%87%E9%87%91%E5%88%86%E6%9E%90) Total working capital as a percentage of revenue was 32.1%, with slight increases in inventory and trade receivables, and a decrease in trade payables [Inventories](index=16&type=section&id=%E5%AD%98%E8%B2%A8) Inventories increased by HKD 12.9 million to HKD 1,065.1 million, mainly due to higher import tariffs at US warehouses - Inventories increased by **HKD 12.9 million to HKD 1,065.1 million**[58](index=58&type=chunk) - Inventory turnover days decreased by **1 day to 117 days**[58](index=58&type=chunk) [Trade and Bills Receivables](index=16&type=section&id=%E8%B2%BF%E6%98%93%E6%87%89%E6%94%B6%E6%AC%BE%E9%A0%85%E5%8F%8A%E6%87%89%E6%94%B6%E7%A5%A8%E6%93%9A) Trade and bills receivables increased by HKD 122.8 million to HKD 1,243.4 million, with 96.3% being current or less than 30 days overdue - Trade and bills receivables increased by **HKD 122.8 million to HKD 1,243.4 million**[59](index=59&type=chunk) - Trade receivables turnover days increased by **1 day to 88 days**[59](index=59&type=chunk) - **96.3% of current and less than 30 days overdue balances** accounted for the total trade receivables[59](index=59&type=chunk) [Trade Payables](index=16&type=section&id=%E8%B2%BF%E6%98%93%E6%87%89%E4%BB%98%E6%AC%BE%E9%A0%85) Trade payables decreased by HKD 48.1 million to HKD 540.5 million, with a reduction in turnover days - Trade payables decreased by **HKD 48.1 million to HKD 540.5 million**[59](index=59&type=chunk) - Trade payables turnover days decreased by **1 day to 58 days**[59](index=59&type=chunk) [EBITDA and Net Profit](index=17&type=section&id=EBITDA%E5%8F%8A%E6%BA%A2%E5%88%A9%E6%B7%A8%E9%A1%8D) The Group's EBITDA was HKD 715.3 million, with an EBITDA margin of 29.2%, and adjusted profit attributable to equity holders was HKD 359.6 million - **EBITDA was HKD 715.3 million**, with an **EBITDA margin of 29.2%**[65](index=65&type=chunk) - Profit attributable to equity holders of the Company was **HKD 346.3 million**, with a **net profit margin of 14.2%**[65](index=65&type=chunk) - Adjusted profit attributable to equity holders was **HKD 359.6 million**, with an **adjusted net profit margin of 14.7%**[65](index=65&type=chunk) [Financial Resources and Liquidity](index=17&type=section&id=%E8%B2%A1%E5%8B%99%E8%B3%87%E6%BA%90%E5%8F%8A%E6%B5%81%E5%8B%95%E8%B3%87%E9%87%91) Total assets increased by 7.9% to HKD 8,814.2 million, with a liquidity ratio of 1.72, reflecting increased cash flow from operations - Total assets increased by **7.9% to HKD 8,814.2 million**, and total equity increased by **10.9% to HKD 5,262.2 million**[66](index=66&type=chunk) - The **current ratio was 1.72**, slightly higher than 1.63 as of December 31, 2024[66](index=66&type=chunk) Condensed Consolidated Cash Flow Statement (HKD million) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Cash Generated From/(Used In) Operating Activities | 555.3 | 497.9 | | Cash Used In Investing Activities | (438.7) | (341.3) | | Cash Used In Financing Activities | (83.7) | (333.6) | | Net Change in Cash | 32.9 | (177.0) | [67](index=67&type=chunk) [Condensed Consolidated Cash Flow Statement](index=17&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E7%8F%BE%E9%87%91%E6%B5%81%E9%87%8F%E8%A1%A8) Net cash generated from operating activities increased to HKD 555.3 million, while cash used in investing activities rose due to capital expenditures - Net cash generated from operating activities was **HKD 555.3 million**, a year-on-year increase of **HKD 57.4 million**[68](index=68&type=chunk) - Net cash used in investing activities was **HKD 438.7 million**, a year-on-year increase of **HKD 97.4 million**, primarily for payments for capital expenditures[68](index=68&type=chunk) - Net cash used in financing activities was **HKD 83.7 million**, a year-on-year decrease of **HKD 249.9 million**[69](index=69&type=chunk) [Debt and Capital Commitments](index=19&type=section&id=%E5%82%B5%E5%8B%99%E5%8F%8A%E8%B3%87%E6%9C%AC%E6%89%BF%E6%93%94) Total borrowings increased to HKD 2,353.4 million due to rising working capital and capital expenditures, with a net debt-to-equity ratio of 32.3% - Total borrowings increased by **HKD 157.3 million to HKD 2,353.4 million**, due to increased working capital and capital expenditures[71](index=71&type=chunk) - The **net gearing ratio was 32.3%** (December 31, 2024: 33.6%)[72](index=72&type=chunk) - Capital expenditure was **HKD 382.9 million**, primarily for capacity expansion at China factories and infrastructure and machinery expenses at the Mexico factory[73](index=73&type=chunk) - Contracted but unprovided capital commitments amounted to **HKD 542.7 million**, mainly related to factory construction and machinery purchases[73](index=73&type=chunk) [Debt](index=19&type=section&id=%E5%82%B5%E5%8B%99) Total borrowings increased to HKD 2,353.4 million, with available bank facilities totaling HKD 2,123.5 million and a net debt-to-equity ratio of 32.3% Total Borrowings (HKD million) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Current Bank Loans | 959.3 | 919.2 | | Non-current Bank Loans | 1,381.9 | 1,265.6 | | Current Lease Liabilities | 4.3 | 3.8 | | Non-current Lease Liabilities | 7.9 | 7.5 | | Total Borrowings | 2,353.4 | 2,196.1 | [72](index=72&type=chunk) - Total available bank facilities amounted to **HKD 2,123.5 million**[72](index=72&type=chunk) [Capital Expenditure and Commitments](index=19&type=section&id=%E8%B3%87%E6%9C%AC%E6%94%AF%E5%87%BA%E5%8F%8A%E6%89%BF%E6%93%94) Capital expenditure for the period was HKD 382.9 million, primarily for capacity expansion in China and Mexico, with unfulfilled capital commitments of HKD 542.7 million - Capital expenditure was **HKD 382.9 million**, primarily for capacity expansion at China factories and infrastructure and machinery expenses at the Mexico factory[73](index=73&type=chunk) - **HKD 242.7 million** of expenditure was incurred for the construction of the Mexico factory[73](index=73&type=chunk) - Contracted but unprovided capital commitments amounted to **HKD 542.7 million**[73](index=73&type=chunk) [Pledge of Assets](index=19&type=section&id=%E8%B3%87%E7%94%A2%E8%B3%AA%E6%8A%BC) As of June 30, 2025, the Group had no property, plant, and equipment pledged as security for bank borrowings - As of June 30, 2025, **no property, plant, and equipment were pledged** as security for bank borrowings[74](index=74&type=chunk) [Contingent Liabilities](index=19&type=section&id=%E6%88%96%E7%84%B6%E8%B2%A0%E5%82%B5) As of June 30, 2025, there were no significant contingent liabilities - As of June 30, 2025, there were **no significant contingent liabilities**[75](index=75&type=chunk) [Further Information About the Group](index=20&type=section&id=%E6%9C%89%E9%97%9C%E6%9C%AC%E9%9B%86%E5%9C%98%E7%9A%84%E9%80%B2%E4%B8%80%E6%AD%A5%E8%B3%87%E6%96%99) This section provides additional details on the Group's investments, asset changes, treasury and human resources management, and corporate governance [Investments and Changes in Assets](index=20&type=section&id=%E6%8A%95%E8%B3%87%E5%8F%8A%E8%B3%87%E7%94%A2%E8%AE%8A%E5%8B%95) The Group has no significant future investment plans or major acquisitions/disposals of subsidiaries beyond those disclosed in the Chairman's Statement - Other than those disclosed in the Chairman's Statement, there are **no other significant future plans for investments or capital assets**[76](index=76&type=chunk) - For the six months ended June 30, 2025, there were **no significant acquisitions or disposals of subsidiaries**[77](index=77&type=chunk) [Treasury and Human Resources Management](index=20&type=section&id=%E8%B2%A1%E8%B3%87%E5%8F%8A%E4%BA%BA%E5%8A%9B%E8%B3%87%E6%BA%90%E7%AE%A1%E7%90%86) The Group adopts a prudent treasury management approach and maintains a competitive compensation structure for its 7,897 full-time employees - The Group adopts a **prudent treasury management approach**, monitoring foreign exchange rates and adjusting its loan portfolio to mitigate exchange rate fluctuation impacts[78](index=78&type=chunk) - As of June 30, 2025, the Group had **7,897 full-time employees**, with total staff costs amounting to **HKD 644.3 million**[79](index=79&type=chunk) - The company maintains good relationships with employees, provides training, offers competitive remuneration packages, and discretionary bonuses and share options[79](index=79&type=chunk) [Dividends and Share-Related Matters](index=21&type=section&id=%E8%82%A1%E6%81%AF%E5%8F%8A%E8%82%A1%E4%BB%BD%E7%9B%B8%E9%97%9C%E4%BA%8B%E5%AE%9C) The Board declared an interim dividend of HKD 0.08 per share for the six months ended June 30, 2025, with no share repurchases during the period - The Board resolved to declare an **interim dividend of 8.0 HK cents per share**, totaling approximately **HKD 151.0 million**[81](index=81&type=chunk) Relevant Dates for Interim Dividend Payment | Date | Details | | :--- | :--- | | Ex-dividend Date | August 25, 2025 | | Book Closure Period | August 27 to August 29, 2025 | | Record Date | August 29, 2025 | | Dividend Payment Date | On or before September 10, 2025 | [82](index=82&type=chunk) - For the six months ended June 30, 2025, **neither the Company nor any of its subsidiaries purchased, sold, or redeemed any listed shares**[83](index=83&type=chunk) [Corporate Governance](index=21&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB) The company complies with the Corporate Governance Code, with a deviation regarding the combined roles of Chairman and CEO, which the Board deems beneficial - The company has complied with all code provisions of the Corporate Governance Code, except for the **deviation where Mr. Lu Ruibo holds both the Chairman and Chief Executive Officer roles**[84](index=84&type=chunk) - The Board believes that combining the roles of Chairman and CEO is beneficial for the Group's management, supported by an experienced senior management team and a balanced Board[84](index=84&type=chunk) - All Directors confirmed compliance with the **Model Code for Securities Transactions by Directors of Listed Issuers** for the six months ended June 30, 2025[86](index=86&type=chunk) [Equity Disclosure](index=22&type=section&id=%E8%82%A1%E6%AC%8A%E6%8A%AB%E9%9C%B2) Mr. Lu Ruibo and his controlled entities hold a significant interest in the company's issued share capital, alongside other major shareholders Directors' and Chief Executive's Interests in Shares of the Company | Director's Name | Nature of Interest/Capacity | Number of Shares | Approximate % of Issued Share Capital | | :--- | :--- | :--- | :--- | | Mr. Lu Ruibo | Interest of controlled corporation | 1,348,118,787 | 71.43 | | | Spouse's interest | 300,000 | 0.02 | | | Beneficial owner | 9,239,000 | 0.49 | [87](index=87&type=chunk) Substantial Shareholders' Interests and Short Positions in Shares and Underlying Shares of the Company | Name of Substantial Shareholder | Nature of Interest/Capacity | Number of Shares Held | Approximate % of Issued Share Capital | | :--- | :--- | :--- | :--- | | Impro Development | Beneficial owner | 1,348,118,787 | 71.43 | | Mr. Lu | Interest of controlled corporation and beneficial owner | 1,357,357,787 | 71.92 | | | Spouse's interest | 300,000 | 0.02 | | Tongbai Capital (Hong Kong) Limited | Beneficial owner | 103,989,123 | 5.51 | | Genertec Investment Management Co., Ltd. | Interest of controlled corporation | 103,989,123 | 5.51 | | Genertec Investment Capital Co., Ltd. | Interest of controlled corporation | 103,989,123 | 5.51 | | China General Technology (Group) Holding Co., Ltd. | Interest of controlled corporation | 103,989,123 | 5.51 | [90](index=90&type=chunk) [Share Option Schemes](index=25&type=section&id=%E8%B3%BC%E8%82%A1%E6%AC%8A%E8%A8%88%E5%8A%83) The company has pre-IPO and post-IPO share option schemes, with no outstanding options under the pre-IPO scheme and no grants under the post-IPO scheme - As of June 30, 2025, there were **no outstanding share options** under the Pre-IPO Share Option Scheme[92](index=92&type=chunk) - No share options have been granted under the Post-IPO Share Option Scheme since its adoption[92](index=92&type=chunk) - The Share Option Schemes aim to **incentivize eligible participants** and comply with the provisions of Chapter 17 of the Listing Rules[93](index=93&type=chunk) [Post-Reporting Period Events and Review](index=27&type=section&id=%E5%A0%B1%E5%91%8A%E6%9C%9F%E5%BE%8C%E4%BA%8B%E9%A0%85%E5%8F%8A%E5%AF%A9%E9%96%B1) No significant post-reporting period events occurred other than the interim dividend declaration, and the interim financial report was reviewed by KPMG - Other than the interim dividend, there were **no other significant events after the reporting period**[97](index=97&type=chunk) - There were **no changes in the information of Directors and chief executives** during the period[98](index=98&type=chunk) - The Audit Committee has reviewed the interim results, and the external auditor, **KPMG, has reviewed the interim financial report**[99](index=99&type=chunk) [Independent Review Report](index=28&type=section&id=%E7%8D%A8%E7%AB%8B%E5%AF%A9%E9%96%B1%E5%A0%B1%E5%91%8A) KPMG reviewed the interim financial report for the six months ended June 30, 2025, prepared in accordance with IFRS 34 and Listing Rules [Introduction](index=28&type=section&id=%E7%B7%92%E8%A8%80) KPMG reviewed the interim financial report of Impro Precision Industries Limited for the six months ended June 30, 2025 - **KPMG** has reviewed the company's interim financial report for the six months ended June 30, 2025[101](index=101&type=chunk) - The interim financial report was prepared in accordance with the **Listing Rules and International Accounting Standard 34**[101](index=101&type=chunk) [Scope of Review](index=28&type=section&id=%E5%AF%A9%E9%96%B1%E7%AF%84%E5%9C%8D) The review was conducted in accordance with HKSRS 2410, involving inquiries and analytical procedures, and does not constitute an audit opinion - The review was conducted in accordance with **Hong Kong Standard on Review Engagements 2410**[102](index=102&type=chunk) - The scope of the review is **less than an audit**, and therefore, no audit opinion is expressed[102](index=102&type=chunk) [Conclusion](index=28&type=section&id=%E7%B5%90%E8%AB%96) Based on the review, no material matters were identified suggesting the interim financial report was not prepared in accordance with IAS 34 - No matters were identified that caused the reviewer to believe the interim financial report for June 30, 2025, was not prepared in any material respect in accordance with **International Accounting Standard 34**[103](index=103&type=chunk) [Consolidated Statement of Profit or Loss](index=29&type=section&id=%E7%B6%9C%E5%90%88%E6%90%8D%E7%9B%8A%E8%A1%A8) This statement presents the Group's revenue, cost of sales, gross profit, other income, expenses, and profit for the six months ended June 30, 2025 - Revenue was **HKD 2,449,946 thousand**, and profit for the period was **HKD 347,451 thousand**[105](index=105&type=chunk) - Profit attributable to equity holders of the Company was **HKD 346,335 thousand**, with basic earnings per share of **18.35 HK cents**[105](index=105&type=chunk) [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=30&type=section&id=%E7%B6%9C%E5%90%88%E6%90%8D%E7%9B%8A%E5%8F%8A%E5%85%B6%E4%BB%96%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) This statement details the Group's profit for the period and other comprehensive income, including items not reclassified to profit or loss and those that may be reclassified - Profit for the period was **HKD 347,451 thousand**[107](index=107&type=chunk) - Exchange differences on translation of financial statements of entities with functional currencies other than HKD amounted to **HKD 332,564 thousand**[107](index=107&type=chunk) - Total comprehensive income for the period was **HKD 675,662 thousand**[107](index=107&type=chunk) [Consolidated Statement of Financial Position](index=31&type=section&id=%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) This statement outlines the Group's assets, liabilities, and equity as of June 30, 2025, with total equity amounting to HKD 5,262.2 million - Total non-current assets were **HKD 5,529,979 thousand**, with property, plant and equipment at **HKD 4,822,179 thousand**[109](index=109&type=chunk) - Total current assets were **HKD 3,284,203 thousand**, including inventories of **HKD 1,065,066 thousand**, trade and bills receivables of **HKD 1,243,412 thousand**, and cash and cash equivalents of **HKD 655,234 thousand**[109](index=109&type=chunk) - Total current liabilities were **HKD 1,913,154 thousand**, and total non-current liabilities were **HKD 1,638,813 thousand**[109](index=109&type=chunk)[110](index=110&type=chunk) - Total equity was **HKD 5,262,215 thousand**[110](index=110&type=chunk) [Consolidated Statement of Changes in Equity](index=33&type=section&id=%E7%B6%9C%E5%90%88%E6%AC%8A%E7%9B%8A%E8%AE%8A%E5%8B%95%E8%A1%A8) This statement tracks changes in the Group's equity components, including share capital, reserves, and retained profits, for the six months ended June 30, 2025 - Total equity as of January 1, 2025, was **HKD 4,742,914 thousand**[114](index=114&type=chunk) - Profit for the period was **HKD 346,335 thousand**, and other comprehensive income was **HKD 327,999 thousand**[114](index=114&type=chunk) - Total equity as of June 30, 2025, was **HKD 5,262,215 thousand**[114](index=114&type=chunk) [Condensed Consolidated Cash Flow Statement](index=35&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E7%8F%BE%E9%87%91%E6%B5%81%E9%87%8F%E8%A1%A8) This statement summarizes the Group's cash flows from operating, investing, and financing activities, resulting in a net increase in cash and cash equivalents - Net cash generated from operating activities was **HKD 555,347 thousand**[116](index=116&type=chunk) - Net cash used in investing activities was **HKD 438,711 thousand**, primarily for the purchase of property, plant and equipment[116](index=116&type=chunk) - Net cash used in financing activities was **HKD 83,684 thousand**[116](index=116&type=chunk) - Cash and cash equivalents increased by **HKD 32,952 thousand**, with an ending balance of **HKD 655,234 thousand**[116](index=116&type=chunk) [Notes to the Unaudited Interim Financial Report](index=36&type=section&id=%E6%9C%AA%E7%B6%93%E5%AF%A9%E6%A0%B8%E4%B8%AD%E6%9C%9F%E8%B2%A1%E5%8B%99%E5%A0%B1%E5%91%8A%E9%99%84%E8%A8%BB) This section provides detailed notes to the unaudited interim financial report, covering general information, basis of preparation, and accounting policies [General Information](index=36&type=section&id=%E4%B8%80%E8%88%AC%E8%B3%87%E6%96%99) Impro Precision Industries Limited is incorporated in the Cayman Islands and listed in Hong Kong, primarily engaged in manufacturing casting products and precision machined parts - The Company is incorporated in the **Cayman Islands**, and its shares are listed on the Main Board of the Stock Exchange of Hong Kong[117](index=117&type=chunk) - The Group is principally engaged in the **development and production of casting products, precision machined parts, and provision of surface treatment services**[117](index=117&type=chunk) [Basis of Preparation](index=36&type=section&id=%E7%B7%A8%E8%A3%BD%E5%9F%BA%E6%BA%96) The interim financial report is prepared in accordance with Listing Rules and IAS 34, applying consistent accounting policies with the 2024 annual financial statements - The interim financial report is prepared in accordance with the **Listing Rules and International Accounting Standard 34**[118](index=118&type=chunk) - It adopts the **same accounting policies as the 2024 annual financial statements**, except for changes in accounting policies expected to be reflected in the 2025 annual financial statements[118](index=118&type=chunk) - The interim financial report is **unaudited but has been reviewed by KPMG**[119](index=119&type=chunk) [Changes in Accounting Policies](index=37&type=section&id=%E6%9C%83%E8%A8%88%E6%94%BF%E7%AD%96%E8%AE%8A%E5%8B%95) The Group adopted amendments to IAS 21, "The Effects of Changes in Foreign Exchange Rates—Lack of Exchangeability," with no material impact on this interim report - The Group has applied the amendments to **IAS 21, "The Effects of Changes in Foreign Exchange Rates—Lack of Exchangeability,"** but these amendments have no material impact on this interim report[120](index=120&type=chunk) [Revenue and Segment Reporting](index=37&type=section&id=%E6%94%B6%E5%85%A5%E5%8F%8A%E5%88%86%E9%83%A8%E5%A0%B1%E5%91%8A) The Group's revenue is segmented by business line and geographical location, and presented across four reportable segments: investment castings, precision machined components and others, sand castings, and surface treatment [Revenue](index=37&type=section&id=%E6%94%B6%E5%85%A5) The Group's revenue for the six months ended June 30, 2025, was HKD 2,449.9 million, primarily from casting products and precision machined parts - The Group is principally engaged in the **development and production of various casting products and precision machined parts**[122](index=122&type=chunk) Revenue from Contracts with Customers by Business Line (HKD thousand) | Revenue | 2025 | 2024 | | :--- | :--- | :--- | | Investment Castings | 922,601 | 956,983 | | Precision Machined Components and Others | 793,351 | 904,839 | | Sand Castings | 695,164 | 511,663 | | Surface Treatment | 38,830 | 29,059 | | | 2,449,946 | 2,402,544 | [123](index=123&type=chunk) [Segment Reporting](index=38&type=section&id=%E5%88%86%E9%83%A8%E5%A0%B1%E5%91%8A) Segment reporting categorizes revenue by business line and geography, showing strong growth in sand castings and increased non-current assets in Mexico - The Group presents four reportable segments: **investment castings, precision machined components and others, sand castings, and surface treatment**[124](index=124&type=chunk) - The **sand castings segment showed strong revenue growth**, with reportable segment profit of **HKD 205,885 thousand**[127](index=127&type=chunk) - Revenue from external customers was **47.3% from Americas, 29.9% from Europe, and 22.8% from Asia**[131](index=131&type=chunk) - Designated non-current assets in **Mexico increased from HKD 1,634,630 thousand as of December 31, 2024, to HKD 2,005,672 thousand as of June 30, 2025**[131](index=131&type=chunk) [Other Income and Net Other Gains](index=43&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%E6%B7%A8%E9%A1%8D) Other income totaled HKD 12.7 million, mainly from government grants, while net other gains were HKD 24.1 million, primarily from exchange gains [Other Income](index=43&type=section&id=%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5) Other income amounted to HKD 12.7 million, predominantly comprising government grants Other Income (HKD thousand) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Rental income | 868 | 700 | | Government grants | 10,089 | 12,200 | | Others | 1,741 | 636 | | | 12,698 | 13,536 | [132](index=132&type=chunk) [Net Other Gains](index=43&type=section&id=%E5%85%B6%E4%BB%96%E6%94%B6%E7%9B%8A%E6%B7%A8%E9%A1%8D) Net other gains totaled HKD 24.1 million, primarily driven by net exchange gains Net Other Gains (HKD thousand) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Net exchange gains | 23,231 | 42,953 | | Net loss on disposal of property, plant and equipment | (643) | (188) | | Others | 1,470 | 2,084 | | | 24,058 | 44,849 | [133](index=133&type=chunk) [Profit Before Tax](index=44&type=section&id=%E9%99%A4%E7%A8%85%E5%89%8D%E6%BA%A2%E5%88%A9) Profit before tax is derived after accounting for net finance costs and other items, including inventory costs, depreciation, and amortization expenses [Net Finance Costs](index=44&type=section&id=%E8%9E%8D%E8%B3%87%E6%88%90%E6%9C%AC%E6%B7%A8%E9%A1%8D) Net finance costs decreased to HKD 41.0 million, mainly due to reduced interest expenses on bank borrowings Net Finance Costs (HKD thousand) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Interest income | (6,179) | (4,562) | | Interest expense on bank loans | 46,932 | 59,309 | | Interest expense on lease liabilities | 282 | 302 | | | 47,214 | 59,611 | | Net finance costs | 41,035 | 55,049 | [134](index=134&type=chunk) [Other Items](index=44&type=section&id=%E5%85%B6%E4%BB%96%E9%A0%85%E7%9B%AE) Other items include inventory costs recognized as expenses, depreciation, amortization of intangible assets, and R&D expenses Other Items (HKD thousand) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Cost of inventories recognized as expense | 1,768,427 | 1,768,026 | | Depreciation expense — owned property, plant and equipment | 196,601 | 197,580 | | Depreciation expense — right-of-use assets | 4,135 | 5,531 | | Amortization of intangible assets | 9,913 | 15,028 | | Amortization of deferred expenses | 42,855 | 43,890 | | Research and development expenses | 83,096 | 82,895 | | Provision for impairment loss on trade receivables | 593 | 4,095 | | Reversal of inventory write-down | (4,158) | (10,219) | [135](index=135&type=chunk) [Income Tax](index=45&type=section&id=%E6%89%80%E5%BE%97%E7%A8%85) Income tax expense increased to HKD 73.3 million, reflecting the higher reported profit for the period, including taxes from mainland China and Hong Kong Income Tax (HKD thousand) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Current tax — Mainland China corporate income tax | 40,057 | 42,264 | | — Super deduction for R&D expenses | (7,266) | (14,183) | | — Under/(over) provision in prior years | 14,090 | (1,331) | | Current tax — Hong Kong profits tax | 15,107 | 11,013 | | Current tax — Tax jurisdictions outside Mainland China and Hong Kong | 14,387 | 15,786 | | | 76,375 | 53,549 | | Deferred tax | (3,026) | 18,179 | | | 73,349 | 71,728 | [136](index=136&type=chunk) - Income tax expense increased by **2.4% to HKD 73,349 thousand**, reflecting the increase in reported profit for the period[136](index=136&type=chunk) [Earnings Per Share](index=45&type=section&id=%E6%AF%8F%E8%82%A1%E7%9B%88%E5%88%A9) Basic and diluted earnings per share for the six months ended June 30, 2025, were both 18.35 HK cents [Basic Earnings Per Share](index=45&type=section&id=%E6%AF%8F%E8%82%A1%E5%9F%BA%E6%9C%AC%E7%9B%88%E5%88%A9) Basic earnings per share were 18.35 HK cents, calculated based on profit attributable to ordinary equity holders and weighted average shares outstanding - Basic earnings per share were **18.35 HK cents**[137](index=137&type=chunk) [Diluted Earnings Per Share](index=45&type=section&id=%E6%AF%8F%E8%82%A1%E6%94%A9%E8%96%84%E7%9B%88%E5%88%A9) Diluted earnings per share were 18.35 HK cents, identical to basic EPS, as potential dilutive ordinary shares had an anti-dilutive effect - Diluted earnings per share were **18.35 HK cents**, the same as basic earnings per share[138](index=138&type=chunk) [Property, Plant and Equipment](index=46&type=section&id=%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 recognized additions to right-of-use assets and acquired property, plant, and equipment items during the six months ended June 30, 2025 [Right-of-use assets](index=46&type=section&id=%E4%BD%BF%E7%94%A8%E6%AC%8A%E8%B3%87%E7%94%A2) Additions to right-of-use assets amounted to HKD 3.0 million for the six months ended June 30, 2025 - Additions to right-of-use assets amounted to **HKD 3,008 thousand**[139](index=139&type=chunk) [Acquisition and disposal of own assets](index=46&type=section&id=%E6%94%B6%E8%B3%BC%E5%8F%8A%E5%87%BA%E5%94%AE%E8%87%AA%E6%9C%89%E8%B3%87%E7%94%A2) The Group acquired property, plant, and equipment items at a cost of HKD 421.8 million during the six months ended June 30, 2025 - Property, plant and equipment items were acquired at a cost of **HKD 421,838 thousand**[140](index=140&type=chunk) [Goodwill](index=46&type=section&id=%E5%95%86%E8%AD%BD) The carrying amount of goodwill increased to HKD 226.1 million as of June 30, 2025, primarily due to exchange adjustments Goodwill (HKD thousand) | Metric | HKD thousand | | :--- | :--- | | As of December 31, 2024 and January 1, 2025 | 222,654 | | Exchange adjustments | 3,439 | | As of June 30, 2025 | 226,093 | | Accumulated impairment losses | – | | Carrying amount as of June 30, 2025 | 226,093 | [141](index=141&type=chunk) [Inventories](index=47&type=section&id=%E5%AD%98%E8%B2%A8) Total inventories amounted to HKD 1,065.1 million, including raw materials, work-in-progress, and finished goods, with a reversal of inventory write-down Inventories (HKD thousand) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Raw materials | 227,017 | 209,460 | | Work-in-progress | 445,471 | 414,174 | | Finished goods | 475,308 | 511,700 | | | 1,147,796 | 1,135,334 | | Inventory write-down | (82,730) | (83,101) | | | 1,065,066 | 1,052,233 | [142](index=142&type=chunk) - For the six months ended June 30, 2025, a **reversal of inventory write-down of HKD 4,158 thousand** was recognized[142](index=142&type=chunk) [Trade and Bills Receivables](index=47&type=section&id=%E8%B2%BF%E6%98%93%E6%87%89%E6%94%B6%E6%AC%BE%E9%A0%85%E5%8F%8A%E6%87%89%E6%94%B6%E7%A5%A8%E6%93%9A) Trade and bills receivables totaled HKD 1,243.4 million, with a significant portion due within one to three months Trade and Bills Receivables (HKD thousand) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Trade receivables | 1,211,418 | 1,062,905 | | Bills receivables | 45,290 | 70,180 | | | 1,256,708 | 1,133,085 | | Less: Loss allowance | (13,296) | (12,483) | | | 1,243,412 | 1,120,602 | [143](index=143&type=chunk) Ageing Analysis of Trade and Bills Receivables (HKD thousand) | Ageing | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Within 1 month | 555,783 | 507,337 | | 1 to 3 months | 571,859 | 478,504 | | Over 3 months but within 12 months | 115,770 | 134,761 | | | 1,243,412 | 1,120,602 | [144](index=144&type=chunk) [Prepayments, Deposits and Other Receivables](index=48&type=section&id=%E9%A0%90%E4%BB%98%E6%AC%BE%E9%A0%85%E3%80%81%E6%8C%89%E9%87%91%E5%8F%8A%E5%85%B6%E4%BB%96%E6%87%89%E6%94%B6%E6%AC%BE%E9%A0%85) Prepayments, deposits, and other receivables totaled HKD 312.6 million, primarily comprising recoverable value-added tax Prepayments, Deposits and Other Receivables (HKD thousand) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Prepayments | 75,538 | 77,176 | | Recoverable value-added tax | 186,463 | 175,817 | | Other deposits and receivables | 50,639 | 85,229 | | | 312,640 | 338,222 | [145](index=145&type=chunk) [Cash and Cash Equivalents](index=48&type=section&id=%E7%8F%BE%E9%87%91%E5%8F%8A%E7%8F%BE%E9%87%91%E7%AD%89%E5%83%B9%E7%89%A9) Cash and cash equivalents amounted to HKD 655.2 million, with a substantial portion held in mainland China Cash and Cash Equivalents (HKD thousand) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash at bank | 655,108 | 601,562 | | Cash on hand | 126 | 185 | | | 655,234 | 601,747 | [146](index=146&type=chunk) - Cash and cash equivalents located in **Mainland China amounted to HKD 506,649 thousand**[146](index=146&type=chunk) [Bank Loans](index=49&type=section&id=%E9%8A%80%E8%A1%8C%E8%B2%B8%E6%AC%BE) Total interest-bearing bank loans amounted to HKD 2,341.2 million, with no bank loans pledged as security at period-end Maturity of Interest-Bearing Bank Loans (HKD thousand) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Short-term bank loans | 430,804 | 468,170 | | Current portion of long-term bank loans | 528,487 | 451,064 | | Within one year or on demand | 959,291 | 919,234 | | After one year but within two years | 612,537 | 551,719 | | After two years but within five years | 769,339 | 713,929 | | | 1,381,876 | 1,265,648 | | | 2,341,167 | 2,184,882 | [147](index=147&type=chunk) - As of June 30, 2025, **none of the Group's bank loans were pledged**[148](index=148&type=chunk) [Trade Payables](index=49&type=section&id=%E8%B2%BF%E6%98%93%E6%87%89%E4%BB%98%E6%AC%BE%E9%A0%85) Trade payables totaled HKD 540.5 million, with the majority due within one month Trade Payables (HKD thousand) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Trade payables | 540,517 | 588,573 | [149](index=149&type=chunk) Ageing Analysis of Trade Payables (HKD thousand) | Ageing | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Within 1 month | 365,490 | 350,413 | | 1 to 3 months | 127,647 | 166,508 | | Over 3 months | 47,380 | 71,652 | | | 540,517 | 588,573 | [150](index=150&type=chunk) [Other Payables and Accrued Charges](index=50&type=section&id=%E5%85%B6%E4%BB%96%E6%87%89%E4%BB%98%E6%AC%BE%E9%A0%85%E5%8F%8A%E6%87%89%E8%A8%88%E8%B2%BB%E7%94%A8) Other payables and accrued charges amounted to HKD 367.7 million, primarily including salaries, wages, bonuses, and benefits payable Other Payables and Accrued Charges (HKD thousand) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Other payables | 281,339 | 299,031 | | Accrued charges | 86,381 | 79,027 | | | 367,720 | 378,058 | [151](index=151&type=chunk) Analysis of Other Payables (HKD thousand) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Deferred consideration payable | 21,763 | 21,432 | | Salaries, wages, bonuses and benefits payable | 96,263 | 100,307 | | Payables for purchase of property, plant and equipment | 31,071 | 52,018 | | Contract liabilities | 28,380 | 23,154 | | Other tax payables | 46,298 | 36,043 | | Advances received for factory relocation | 7,823 | 8,621 | | Maintenance costs payable | 4,230 | 4,820 | | Freight costs payable | 10,859 | 7,775 | | Others | 34,652 | 44,861 | | | 281,339 | 299,031 | [152](index=152&type=chunk) [Dividends](index=51&type=section&id=%E8%82%A1%E6%81%AF) The Board declared an interim dividend of HKD 0.08 per share, totaling HKD 151.0 million, for the six months ended June 30, 2025 [Interim dividends payable to equity holders](index=51&type=section&id=%E4%B8%AD%E6%9C%9F%E6%87%89%E4%BB%98%E6%AC%8A%E7%9B%8A%E8%82%A1%E6%9D%B1%E8%82%A1%E6%81%AF) An interim dividend of HKD 0.08 per share, totaling HKD 151.0 million, was declared after the reporting period - An interim dividend of **HKD 0.08 per share**, totaling **HKD 150,983 thousand**, was declared after the end of each reporting period[153](index=153&type=chunk) [Dividends payable to equity holders of the Company approved and paid during the interim period in the previous financial year](index=51&type=section&id=%E4%B8%8A%E4%B8%80%E5%80%8B%E8%B2%A1%E6%94%BF%E5%B9%B4%E5%BA%A6%E6%87%89%E4%BB%98%E6%9C%AC%E5%85%AC%E5%8F%B8%E6%AC%8A%E7%9B%8A%E8%82%A1%E6%9D%B1%E4%B8%A6%E5%B7%B2%E6%96%BC%E4%B8%AD%E6%9C%9F%E6%89%B9%E5%87%86%E5%8F%8A%E6%94%AF%E4%BB%98%E7%9A%84%E8%82%A1%E6%81%AF) A second interim dividend of HKD 0.08 per share, totaling HKD 151.0 million, was approved and paid in the previous financial year - A second interim dividend of **HKD 0.08 per share**, totaling **HKD 150,983 thousand**, was approved and paid during the interim period in the previous financial year[154](index=154&type=chunk) [Commitments](index=51&type=section&id=%E6%89%BF%E6%93%94) Unprovided capital commitments totaled HKD 542.7 million, primarily for plant construction and machinery acquisition Unfulfilled Capital Commitments (HKD thousand) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Contracted: | 542,652 | 425,442 | | Construction of plant | 220,231 | 344,840 | | Acquisition of machinery | 322,421 | 80,602 | | | 542,652 | 425,442 | [155](index=155&type=chunk) [Non-adjusting events after the reporting period](index=51&type=section&id=%E6%AF%8B%E9%A0%88%E8%AA%BF%E6%95%B4%E7%9A%84%E5%A0%B1%E5%91%8A%E6%9C%9F%E6%97%A5%E5%BE%8C%E4%BA%8B%E4%BB%B6) The Board resolved to declare an interim dividend of HKD 0.08 per share, which is a non-adjusting event after the reporting period - The Board resolved to declare an **interim dividend of HKD 0.08 per share**, which is a non-adjusting event after the reporting period[156](index=156&type=chunk)

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其準確性 或完整性亦不發表任何聲明，並明確表示概不會就因本公告全部或任何部分內容而產生或因依 賴該等內容而引致的任何損失承擔任何責任。 PING AN HEALTHCARE AND TECHNOLOGY COMPANY LIMITED 平安健康醫療科技有限公司 （於開曼群島註冊成立的有限公司） （股份代號：1833） 截至2025年6月30日止六個月期間 未經審計中期業績公告 平安健康醫療科技有限公司（「本公司」）董事會（「董事會」）欣然公佈本公司及其 附屬公司（「本集團」）截至2025年6月30日止六個月期間未經審計中期業績公告。 本公告刊載本公司2025年中期報告（「中期報告」）全文，並符合香港聯合交易所有 限公司（「聯交所」）證券上市規則中有關中期業績初步公告附載的資料之要求。 公司審計及風險管理委員會已審閱本集團截至2025年6月30日止之六個月期間中 期業績。 本公告將於聯交所網站 www.hkexnews.hk 及本公司網站 www.pagd.net 發佈。截至 2025年6月30日止六個月期間中期報告將適時於上述聯交所及本 ...

[Interim Results Announcement for the Six Months Ended June 30, 2025](index=1&type=section&id=%E6%88%AA%E8%87%B32025%E5%B9%B46%E6%9C%8830%E6%97%A5%E6%AD%A2%E5%85%AD%E5%80%8B%E6%9C%88%E4%B8%AD%E6%9C%9F%E6%A5%AD%E7%B8%BE%E5%85%AC%E5%91%8A) [Unaudited Condensed Interim Results Highlights](index=1&type=section&id=%E6%88%AA%E8%87%B32025%E5%B9%B46%E6%9C%8830%E6%97%A5%E6%AD%A2%E5%85%AD%E5%80%8B%E6%9C%88%E6%9C%AA%E7%B6%93%E5%AF%A9%E6%A0%B8%E7%B6%9C%E5%90%88%E4%B8%AD%E6%9C%9F%E6%A5%AD%E7%B8%BE%E6%91%98%E8%A6%81) H1 2025 unaudited results show decreased revenue and profit, primarily from lower Korean project electricity prices and generation, and falling Chinese solar prices; no interim dividend declared Key Financial Highlights for H1 2025 | Indicator | H1 2025 (million USD) | H1 2024 (million USD) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 856.5 | 982.3 | -12.8% | | Profit attributable to equity holders of the Company | 163.5 | 183.5 | -10.9% | | Earnings per share (US cents) | 3.81 | 4.28 | -10.9% | - Profit decrease primarily due to **lower electricity prices and generation volume from Korean projects**, and **falling electricity prices for Chinese solar projects**[2](index=2&type=chunk) - The Board resolved **not to declare an interim dividend** for the six months ended June 30, 2025[2](index=2&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) [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=%E7%B6%9C%E5%90%88%E6%90%8D%E7%9B%8A%E5%8F%8A%E5%85%B6%E4%BB%96%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) H1 2025 group revenue decreased by 12.8% to $856.5 million; profit for the period and equity holders declined by over 10% Consolidated Statement of Profit or Loss and Other Comprehensive Income Summary (thousand USD) | Indicator | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Revenue | 856,513 | 982,273 | | Operating Profit | 254,038 | 303,865 | | Profit for the period | 168,888 | 190,757 | | Profit attributable to equity holders of the Company | 163,530 | 183,454 | | Earnings per share (US cents) | 3.81 | 4.28 | | Total comprehensive income for the period | 211,395 | 144,700 | - Other comprehensive income for the period turned from **negative $46.057 million in H1 2024** to **positive $42.507 million in H1 2025**, mainly due to exchange differences from translating overseas operations[5](index=5&type=chunk) [Consolidated Statement of Financial Position](index=4&type=section&id=%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 were $9,123.1 million and net assets $1,908.8 million; current liabilities rose significantly, expanding net current liabilities Consolidated Statement of Financial Position Summary (thousand USD) | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Non-current assets | 7,154,187 | 6,922,681 | | Current assets | 1,968,939 | 1,795,027 | | Current liabilities | 2,934,984 | 2,431,693 | | Non-current liabilities | 4,279,367 | 4,526,478 | | Net assets | 1,908,775 | 1,759,537 | | Total equity attributable to equity holders of the Company | 1,765,656 | 1,617,672 | - Net current liabilities expanded from **$636.7 million as of December 31, 2024**, to **$966.0 million as of June 30, 2025**[7](index=7&type=chunk) - Despite net current liabilities of **$966.0 million**, the Group has **$1,340.8 million in unutilized general credit facilities**, and the Board believes the Group has sufficient working capital to prepare interim financial reports on a going concern basis[11](index=11&type=chunk) [Notes to the Financial Statements](index=7&type=section&id=%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8%E9%99%84%E8%A8%BB) [Notes](index=7&type=section&id=%E9%99%84%E8%A8%BB) Detailed notes cover general information, accounting policies, segment results, EPS, receivables/payables, contract assets, and borrowings [1. General Information](index=7&type=section&id=1.%20%E4%B8%80%E8%88%AC%E8%B3%87%E6%96%99) The company, incorporated in Bermuda and listed, is ultimately controlled by CGN; interim financial reports are prepared under IAS 34 on a going concern basis - The Company's ultimate controlling company is **CGN**, a state-owned enterprise established in China[9](index=9&type=chunk) - Interim financial reports are prepared under **IAS 34** on a **going concern basis**, as the Group has sufficient working capital to meet its financial obligations[9](index=9&type=chunk)[11](index=11&type=chunk) [2. Changes in Accounting Policies](index=8&type=section&id=2.%20%E6%9C%83%E8%A8%88%E6%94%BF%E7%AD%96%E8%AE%8A%E5%8B%95) The Group applied IAS 21 (Revised) 'Effects of Changes in Foreign Exchange Rates', with no material impact on interim consolidated financial statements - The Group applied **IAS 21 (Revised)**, but it had **no material impact** on the interim consolidated financial statements[12](index=12&type=chunk)[13](index=13&type=chunk) [3. Revenue and Segment Information](index=8&type=section&id=3.%20%E6%94%B6%E5%85%A5%E5%8F%8A%E5%88%86%E9%83%A8%E8%B3%87%E6%96%99) The Group has three reportable segments: China Power Plants, Korea Power Plants, and Management Company; H1 2025 revenues were $469.3M, $378.2M, and $9.0M Revenue and Results by Reportable Segment (thousand USD) | Indicator | H1 2025 Revenue (thousand USD) | H1 2025 Results (thousand USD) | H1 2024 Revenue (thousand USD) | H1 2024 Results (thousand USD) | | :--- | :--- | :--- | :--- | :--- | | China Power Plants | 469,340 | 188,102 | 509,211 | 187,952 | | Korea Power Plants | 378,193 | 29,152 | 461,338 | 65,281 | | Management Company | 8,980 | 428 | 11,724 | 558 | | Total | 856,513 | 217,682 | 982,273 | 253,791 | - Korea Power Plants segment results significantly decreased from **$65.3 million in H1 2024** to **$29.2 million in H1 2025**[14](index=14&type=chunk)[16](index=16&type=chunk) [4. Earnings Per Share](index=9&type=section&id=4.%20%E6%AF%8F%E8%82%A1%E7%9B%88%E5%88%A9) H1 2025 basic and diluted earnings per share were 3.81 US cents, a decrease from 4.28 US cents in the prior year Earnings Per Share Calculation Summary | Indicator | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Earnings per share (US cents) | 3.81 | 4.28 | | Profit for calculation (thousand USD) | 163,530 | 183,454 | | Number of ordinary shares (thousand shares) | 4,289,924 | 4,290,824 | [5. Trade Receivables](index=10&type=section&id=5.%20%E8%B2%BF%E6%98%93%E6%87%89%E6%94%B6%E8%B3%AC%E6%AC%BE) As of June 30, 2025, total trade receivables were $987.0 million, including $882.7 million for electricity price subsidies not overdue; receivables over 180 days were largest Trade Receivables Aging Analysis (thousand USD) | Aging | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | 0 to 60 days | 153,489 | 169,513 | | 61 to 90 days | 27,034 | 18,386 | | 91 to 180 days | 87,605 | 76,634 | | Over 180 days | 718,869 | 622,105 | | Total | 986,997 | 886,638 | - As of June 30, 2025, **$882.7 million** of trade receivables balance was for **electricity price subsidies receivable**, not considered overdue or in default[19](index=19&type=chunk) [6. Contract Assets](index=11&type=section&id=6.%20%E5%90%88%E5%90%8C%E8%B3%87%E7%94%A2) Contract assets, totaling $442.3 million, are primarily renewable energy electricity price subsidies receivable, to be reclassified to trade receivables upon subsidy list inclusion Contract Assets (thousand USD) | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Electricity revenue from renewable energy sales | 461,943 | 411,547 | | Less: Provision for credit losses | (19,623) | (20,737) | | Total | 442,320 | 390,810 | - Contract assets primarily represent **renewable energy electricity price subsidies receivable** from China's local state grid, to be reclassified to trade receivables upon inclusion in the subsidy list[21](index=21&type=chunk) [7. Trade Payables](index=11&type=section&id=7.%20%E8%B2%BF%E6%98%93%E6%87%89%E4%BB%98%E8%B3%AC%E6%AC%BE) As of June 30, 2025, total trade payables were $80.6 million with an average credit period of 27 days; the Group aims to settle all payables within the credit term Trade Payables Aging Analysis (thousand USD) | Aging | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | 0 to 60 days | 69,214 | 40,571 | | 61 to 90 days | 7,337 | 1,078 | | Over 90 days | 4,036 | 4,928 | | Total | 80,587 | 46,577 | - For H1 2025, the average credit period for goods purchased was **27 days** (December 31, 2024: 41 days)[22](index=22&type=chunk) [8. Loans from Fellow Subsidiaries](index=12&type=section&id=8.%20%E4%BE%86%E8%87%AA%E5%90%8C%E7%B3%BB%E9%99%84%E5%B1%AC%E5%85%AC%E5%8F%B8%E7%9A%84%E8%B2%B8%E6%AC%BE) As of June 30, 2025, total loans from fellow subsidiaries were $1,482.4 million, mostly due within one year, primarily from CGN Finance, CGN Wind Power, and China Clean Energy Loans from Fellow Subsidiaries (thousand USD) | Source | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | CGN Finance (within one year) | 125,672 | 127,732 | | CGN Wind Power (within one year) | 780,064 | 667,742 | | China Clean Energy (within one year) | 450,000 | 450,000 | | CGN Finance (after one year) | 126,622 | 131,197 | | Total | 1,482,358 | 1,376,671 | - Loans from CGN Wind Power of **RMB 5,600.0 million (approximately $780.1 million)** are unsecured, bear interest at **2.40% per annum**, and are repayable in 2025[25](index=25&type=chunk) [9. Bank Borrowings](index=13&type=section&id=9.%20%E9%8A%80%E8%A1%8C%E5%80%9F%E8%B2%B8) As of June 30, 2025, total bank borrowings increased to $5,108.5 million, with $2,627.4 million secured; current borrowings rose, and unused credit facilities were $2,036.5 million Bank Borrowings Details (thousand USD) | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Secured | 2,627,383 | 2,725,292 | | Unsecured | 2,481,153 | 2,200,697 | | Total | 5,108,536 | 4,925,989 | | Due within one year | 1,080,558 | 644,459 | | Due after one year | 4,027,978 | 4,281,530 | - As of June 30, 2025, the Group's **unutilized bank credit facilities were $2,036.5 million**, an increase from $1,655.1 million as of December 31, 2024[24](index=24&type=chunk) [Management Discussion and Analysis](index=14&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) [I. Operating Results and Analysis](index=14&type=section&id=%E4%B8%80.%20%E7%B6%93%E7%87%9F%E6%A5%AD%E7%B8%BE%E5%8F%8A%E5%88%86%E6%9E%90) H1 2025 revenue and profit decreased due to Korean project issues, Chinese solar price drops, and a CHP project disposal; operating expenses and finance costs fell, and associate profits rose H1 2025 Operating Results Overview (million USD) | Indicator | H1 2025 | H1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 856.5 | 982.3 | -12.8% | | Profit attributable to equity holders of the Company | 163.5 | 183.5 | -10.9% | | Profit for the period | 168.9 | 190.8 | -11.5% | [Revenue](index=14&type=section&id=%E6%94%B6%E5%85%A5) H1 2025 revenue was $856.5 million, down 12.8% year-on-year, mainly due to lower Korean project electricity prices and generation, and reduced sales from a disposed China CHP project - Revenue decreased by **12.8%**, primarily due to **lower Korean project electricity prices and generation**, and the **disposal of a China CHP project**[27](index=27&type=chunk) [Operating Expenses](index=14&type=section&id=%E7%B6%93%E7%87%9F%E9%96%8B%E6%94%AF) H1 2025 operating expenses were $602.5 million, down 11.2% year-on-year, mainly due to reduced natural gas costs for Korean gas projects and lower coal costs after a China CHP project disposal - Operating expenses decreased by **11.2%**, mainly due to **reduced natural gas costs for Korean gas projects** and **lower coal costs after a China CHP project disposal**[28](index=28&type=chunk) [Operating Profit](index=14&type=section&id=%E7%B6%93%E7%87%9F%E6%BA%A2%E5%88%A9) H1 2025 operating profit was $254.0 million, down 16.4% year-on-year, primarily due to lower Korean project electricity prices and generation, and falling Chinese solar prices - Operating profit decreased by **16.4%**, primarily due to **lower Korean project electricity prices and generation** and **falling Chinese solar project electricity prices**[29](index=29&type=chunk) [Other Income](index=15&type=section&id=%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5) H1 2025 other income was $9.0 million, a $11.1 million year-on-year decrease, mainly due to reduced compensation from a Korean fuel cell project - Other income decreased by **$11.1 million**, mainly due to **reduced compensation income from a Korean fuel cell project**[30](index=30&type=chunk) [Gain on Disposal of a Subsidiary](index=15&type=section&id=%E5%87%BA%E5%94%AE%E4%B8%80%E5%AE%B6%E9%99%84%E5%B1%AC%E5%85%AC%E5%8F%B8%E7%9A%84%E6%94%B6%E7%9B%8A) The Group disposed of its entire equity interest in Nantong Meiya Cogeneration Co., Ltd. in March 2025, recognizing a $23.8 million gain on disposal - Disposal of entire equity interest in Nantong Meiya Cogeneration Co., Ltd., recognizing a **gain on disposal of $23.8 million**[31](index=31&type=chunk) [Finance Costs](index=15&type=section&id=%E8%B2%A1%E5%8B%99%E8%B2%BB%E7%94%A8) H1 2025 finance costs were $80.3 million, down 12.3% year-on-year, primarily due to a decrease in the weighted average interest rate of bank borrowings - Finance costs decreased by **12.3%**, primarily due to a **decrease in the weighted average interest rate of bank borrowings**[32](index=32&type=chunk) [Share of Profits of Associates](index=15&type=section&id=%E6%攤%E4%BD%94%E8%81%AF%E7%87%9F%E5%85%AC%E5%8F%B8%E6%A5%AD%E7%B8%BE) H1 2025 share of profits of associates was $11.3 million, a $6.7 million year-on-year increase, mainly due to falling market coal prices - Share of profits of associates increased by **$6.7 million**, mainly due to **falling market coal prices** during the period[33](index=33&type=chunk) [Income Tax](index=16&type=section&id=%E6%89%80%E5%BE%97%E7%A8%85) H1 2025 income tax expense was $43.6 million, a $1.5 million year-on-year increase, mainly due to the expiry of preferential tax rates for certain Chinese subsidiaries - Income tax expense increased by **$1.5 million**, mainly due to the **expiry of preferential tax rates for certain Chinese subsidiaries**[34](index=34&type=chunk) [Liquidity and Capital Resources](index=16&type=section&id=%E6%B5%81%E5%8B%95%E8%B3%87%E9%87%91%E5%8F%8A%E8%B3%87%E9%87%91%E4%BE%86%E6%BA%90) Group cash and cash equivalents increased, net debt-to-equity ratio decreased, but the Board resolved not to declare an interim dividend [Cash and Cash Equivalents](index=16&type=section&id=%E7%8F%BE%E9%87%91%E5%8F%8A%E7%8F%BE%E9%87%91%E7%AD%89%E5%83%B9%E7%89%A9) Cash and cash equivalents increased from $158.4 million (Dec 31, 2024) to $197.1 million (June 30, 2025), primarily due to increased net cash from financing activities - Cash and cash equivalents increased to **$197.1 million**, primarily due to **increased net cash from financing activities**[35](index=35&type=chunk) [Net Debt-to-Equity Ratio](index=16&type=section&id=%E6%B7%A8%E5%82%B5%E2%88%95%E6%AC%8A%E7%9B%8A%E6%AF%94%E7%8E%87) Net debt-to-equity ratio decreased from 3.49 (Dec 31, 2024) to 3.35 (June 30, 2025), primarily due to an increase in equity - Net debt-to-equity ratio decreased to **3.35**, primarily due to an **increase in equity**[36](index=36&type=chunk) [Interim Dividend](index=16&type=section&id=%E4%B8%AD%E6%9C%9F%E8%82%A1%E6%81%AF) The Board resolved not to declare an interim dividend for the six months ended June 30, 2025 - The Board resolved **not to declare an interim dividend** for the six months ended June 30, 2025[37](index=37&type=chunk) [Financial Position](index=16&type=section&id=%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81) As of June 30, 2025, non-current and current assets increased; current liabilities rose due to increased short-term borrowings, while non-current liabilities decreased - Non-current assets increased to **$7,154.2 million**, primarily due to an **increase in property, plant and equipment**[38](index=38&type=chunk) - Current assets increased to **$1,968.9 million**, primarily due to an **increase in trade receivables and contract assets**[38](index=38&type=chunk) - Current liabilities increased to **$2,935.0 million**, primarily due to an **increase in short-term bank borrowings and loans from fellow subsidiaries**[38](index=38&type=chunk) - Non-current liabilities decreased to **$4,279.4 million**, primarily due to a **decrease in long-term bank borrowings**[38](index=38&type=chunk) [Capital Expenditure](index=17&type=section&id=%E8%B3%87%E6%9C%AC%E9%96%8B%E6%94%AF) Capital expenditure increased from $386.4 million (H1 2024) to $398.5 million (H1 2025), mainly due to increased capital expenditure for Korean gas projects - Capital expenditure increased by **$12.1 million to $398.5 million**, primarily due to **increased capital expenditure for Korean gas projects**[39](index=39&type=chunk) [Contingent Liabilities](index=17&type=section&id=%E6%88%96%E7%84%B6%E8%B2%A0%E5%82%B5) As of June 30, 2025, and December 31, 2024, the Group had no significant contingent liabilities - The Group had **no significant contingent liabilities**[40](index=40&type=chunk) [Pledged Assets](index=17&type=section&id=%E6%8A%B5%E6%8A%BC%E8%B3%87%E7%94%A2) The Group pledged certain assets (PPE, receivables, contract assets, bank deposits) to secure credit facilities; total pledged assets increased to $2,192.2 million - The total carrying value of pledged assets increased to **$2,192.2 million** (December 31, 2024: $1,983.1 million)[41](index=41&type=chunk) [Employees and Remuneration Policy](index=17&type=section&id=%E5%83%B1%E5%93%A1%E5%8F%8A%E8%96%AA%E9%85%AC%E6%94%BF%E7%AD%96) As of June 30, 2025, the Group had approximately 1,998 full-time employees, mostly in China, providing remuneration, bonuses, and benefits, complying with social security schemes - As of June 30, 2025, the Group had approximately **1,998 full-time employees**, mostly based in China[42](index=42&type=chunk) - The Group provides **remuneration, bonuses, and employee benefits**, including retirement, medical, and life insurance plans,

Interim Report 2025 中期報告 The Repulse Bay, located on the historic site of the original 1920 Repulse Bay Hotel, is a premier residential and shopping destination on Hong Kong's Southside. Overlooking the scenic Repulse Bay beach and South China Sea, the complex features eight apartment towers and a retail arcade with exquisite dining options. In 2024, The Repulse Bay underwent significant enhancements, including lush new landscaping at Palm Court and Spices Terrace. The Arcade now features a variety of lifes ...

[Performance Highlights](index=1&type=section&id=Performance%20Highlights) [Financial Highlights](index=1&type=section&id=Financial%20Highlights) The Group achieved strong financial growth in H1 2025, with total revenue up **22%** to **RMB 5.45 billion** and net profit up **34%** to **RMB 549 million**, notably driven by a **124% surge in SaaS service revenue** Key Financial Data for the Six Months Ended June 30, 2025 | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | YoY Change | | :--- | :--- | :--- | :--- | | **Revenue** | **5,452,057** | **4,467,853** | **22%** | | - Transaction Platform Business | 4,345,653 | 3,510,459 | 24% | | - Of which: SaaS Services | 1,873,371 | 834,561 | 124% | | - Proprietary Financing Business | 1,106,404 | 957,394 | 16% | | **Gross Profit** | **2,886,203** | **2,128,937** | **36%** | | **Operating Profit** | **799,695** | **576,522** | **39%** | | **Net Profit** | **548,678** | **409,676** | **34%** | | **Adjusted Net Profit** | **648,206** | **507,477** | **28%** | [Operational Highlights](index=2&type=section&id=Operational%20Highlights) In H1 2025, the Group's total auto financing transactions increased by **11%** to **364 thousand units**, with a significant **45% rise in used car financing** driving growth, while new car financing declined by **19%** Total Auto Financing Transactions (thousands of units) for the Six Months Ended June 30, 2025 | Category | 2025 | 2024 | YoY Change | | :--- | :--- | :--- | :--- | | **Total Auto Financing Transactions** | **364** | **329** | **11%** | | - New Cars | 142 | 175 | -19% | | - Used Cars | 222 | 154 | 45% | [Chairman's Statement](index=3&type=section&id=Chairman's%20Statement) Chairman Zhang Xua'an noted robust growth for Yixin Group amidst a complex macroeconomic environment, driven by China's automotive industry transformation, with double-digit increases in revenue and net profit, rapid expansion of strategic fintech (SaaS) business to over 60 financial institutions, and planned launch of the next-generation AI model XinMM-AM1 - In H1 2025, the Group facilitated approximately **364 thousand auto financing transactions**, a **10.7% YoY increase**, with total financing volume reaching approximately **RMB 32.7 billion**, up **4.0% YoY**[9](index=9&type=chunk) - Fintech (SaaS) business, a strategic focus, facilitated over **RMB 15.3 billion** in financing, a **58.2% YoY increase**, with over **60 financial institutions** partnering on the platform[10](index=10&type=chunk) - The Group accelerated investment in cutting-edge AI, preparing to launch the next-generation Agentic large model, XinMM-AM1, designed for auto finance within the year to significantly enhance operational efficiency and service quality[11](index=11&type=chunk) Key Performance Indicators for H1 2025 | Metric | Value | YoY Growth | | :--- | :--- | :--- | | Total Revenue | approx. RMB 5.5 billion | approx. 22.0% | | Net Profit | approx. RMB 549 million | approx. 33.9% | | Total Auto Finance Assets Under Management | approx. RMB 112.1 billion | - | | Overdue Rate (90+ days) | approx. 1.86% | - | [Management Discussion and Analysis](index=6&type=section&id=Management%20Discussion%20and%20Analysis) [Macroeconomic and Industry Overview](index=6&type=section&id=Macroeconomic%20and%20Industry%20Overview) In H1 2025, China's economy grew **5.3%** YoY, with the automotive sector, driven by electrification and intelligence, seeing new car sales up **13.0%** and NEV penetration exceeding **50%**, while the used car market grew only **0.5%**, supported by government policies - China's GDP grew by **5.3% YoY** in H1 2025, maintaining a steady economic recovery[13](index=13&type=chunk) - Total passenger vehicle sales increased by **8.2% YoY**, with new car sales up **13.0%** and used car transactions only marginally increasing by **0.5%**[15](index=15&type=chunk)[16](index=16&type=chunk) - New energy vehicle retail sales surged by **33.3% YoY**, with penetration consistently exceeding **50%** for several months[16](index=16&type=chunk) - The government introduced various policies to support the automotive industry, including "trade-in" subsidies, NEV promotion in rural areas, financial digitalization transformation, and export facilitation measures[19](index=19&type=chunk)[20](index=20&type=chunk)[21](index=21&type=chunk) [Business Review](index=9&type=section&id=Business%20Review) Yixin Group achieved steady business growth and stable asset quality in H1 2025, strategically shifting focus to used car financing and SaaS services, with used car financing volume up **45%** and SaaS revenue surging **124%**, contributing **46.7%** to total financing volume, while also advancing AI innovation [Auto Financing Transactions](index=9&type=section&id=Auto%20Financing%20Transactions) Total auto financing transactions increased by **11%** to **364 thousand** and total financing volume by **4%** to **RMB 32.7 billion** in the reporting period, driven by a **45% surge in used car financing** to **61%** of total transactions, offsetting a **19% decline in new car financing** Auto Financing Transaction Details for H1 2025 | Category | Number of Financing Transactions (thousands) | YoY Change | Financing Volume (RMB millions) | YoY Change | | :--- | :--- | :--- | :--- | :--- | | **Total** | **364** | **11%** | **32,703** | **4%** | | New Cars | 142 | -19% | 14,482 | -17% | | Used Cars | 222 | 45% | 18,221 | 31% | | New Energy Vehicles | 93 | 34% | 9,501 | 34% | [SaaS Services](index=10&type=section&id=SaaS%20Services) Fintech (SaaS) business maintained high growth in H1 2025, with revenue reaching **RMB 1.9 billion** (up **124.5%**) and facilitated financing volume of **RMB 15.3 billion** (up **58.2%**), increasing its contribution to total financing volume to **46.7%**, while core customer average revenue grew **87%** - SaaS service revenue increased by **124.5% YoY** to **RMB 1.9 billion**, facilitating a total financing volume of **RMB 15.3 billion**, up **58.2% YoY**[27](index=27&type=chunk) - The fintech platform collaborates with over **60 financial institutions**, with core customers increasing to **15**, contributing **98%** of fintech business revenue[27](index=27&type=chunk)[29](index=29&type=chunk) [Technological Innovation and AI Implementation](index=11&type=section&id=Technological%20Innovation%20and%20AI%20Implementation) Yixin Group accelerated its AI strategy in H1 2025, becoming the first in the auto finance industry to fully deploy the DeepSeek framework and upgrading its vertical AI model, with AI agents deeply integrated across four strategic areas, and plans to launch the next-generation Agentic large model XinMM-AM1 - The Group became the first auto finance enterprise to fully localize the DeepSeek framework and plans to launch the next-generation Agentic large model, XinMM-AM1[30](index=30&type=chunk)[31](index=31&type=chunk) - AI agents are deeply embedded in four strategic areas, with AI voice agents handling nearly **120 million calls** and asset management doubling M1 recovery rates[31](index=31&type=chunk) [Financial Review](index=12&type=section&id=Financial%20Review) In H1 2025, the Group's total revenue grew **22%** to **RMB 5.45 billion**, driven by SaaS and proprietary financing, with gross profit up **36%** to **RMB 2.89 billion** and gross margin improving to **53%**, while R&D expenses increased **60%** and credit impairment losses rose **59%**, resulting in a **34%** net profit increase [Non-IFRS Financial Measures](index=12&type=section&id=Non-IFRS%20Financial%20Measures) To better reflect core operating performance, the company reported adjusted operating profit of **RMB 908 million** (up **33%**) and adjusted net profit of **RMB 648 million** (up **28%**) for the period, primarily excluding non-cash items like share-based compensation and intangible asset amortization Reconciliation of Operating Profit to Adjusted Operating Profit (RMB thousands) | Description | 2025 | 2024 | | :--- | :--- | :--- | | **Operating Profit** | **799,695** | **576,522** | | Add: Share-based compensation expenses | 58,764 | 26,020 | | Add: Amortization of intangible assets | 25,765 | 148,047 | | Other adjustments | 23,758 | (67,640) | | **Adjusted Operating Profit** | **907,982** | **682,949** | Reconciliation of Net Profit to Adjusted Net Profit (RMB thousands) | Description | 2025 | 2024 | | :--- | :--- | :--- | | **Net Profit** | **548,678** | **409,676** | | Add: Share-based compensation expenses | 54,096 | 21,742 | | Add: Amortization of intangible assets | 25,721 | 148,001 | | Other adjustments | 19,711 | (71,942) | | **Adjusted Net Profit** | **648,206** | **507,477** | [Operating Performance](index=15&type=section&id=Operating%20Performance) Total revenue grew **22%** to **RMB 5.45 billion**, primarily driven by a **124% increase in SaaS service revenue**, leading to a **36% rise in gross profit** and an improved gross margin of **53%**, while R&D expenses increased **60%** and credit impairment losses rose **59%**, culminating in a **34% net profit growth** - Total revenue increased by **22% YoY** to **RMB 5.452 billion**, primarily driven by increased revenue from SaaS services (**+124%**) and guarantee services (**+36%**)[43](index=43&type=chunk)[44](index=44&type=chunk)[45](index=45&type=chunk) - Gross profit increased by **36% YoY** to **RMB 2.886 billion**, with gross margin improving from **48%** in the prior period to **53%**[49](index=49&type=chunk) - Research and development expenses increased by **60% YoY** to **RMB 172 million**, primarily due to increased R&D investment in the fintech team[59](index=59&type=chunk) - Credit impairment losses increased by **59% YoY** to **RMB 1.043 billion**, mainly due to an expanded asset base, increased proportion of used car business, and higher provision coverage[60](index=60&type=chunk) [Financial Position and Asset Quality](index=22&type=section&id=Financial%20Position%20and%20Asset%20Quality) As of June 30, 2025, the Group maintained a sound financial position with total assets of **RMB 50.3 billion** and total liabilities of **RMB 34.1 billion**, while net finance lease receivables slightly increased to **RMB 28.6 billion** and provision coverage improved to **3.36%**, with the 90+ day overdue rate remaining stable at **1.86%** due to robust risk management [Balance Sheet Analysis](index=22&type=section&id=Balance%20Sheet%20Analysis) As of June 30, 2025, the Group's net finance lease receivables increased **2%** to **RMB 28.6 billion**, with expected credit loss provision coverage rising from **3.21%** to **3.36%**, and off-balance sheet loan balances subject to repurchase obligations growing to **RMB 77.4 billion**, with corresponding risk guarantee liabilities of **RMB 2.6 billion** Selected Consolidated Balance Sheet Items (RMB thousands) | Metric | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Net finance lease receivables | 28,603,069 | 28,117,882 | 2% | | Cash and cash equivalents | 5,680,546 | 4,212,760 | 35% | | Total borrowings | 28,418,480 | 26,948,957 | 5% | | Total equity | 16,280,363 | 16,480,133 | -1% | - The provision coverage ratio for net finance lease receivables increased from **3.21%** at the end of 2024 to **3.36%**[70](index=70&type=chunk) - Off-balance sheet outstanding loan balances subject to repurchase obligations increased from **RMB 73.9 billion** to **RMB 77.4 billion**[72](index=72&type=chunk) [Asset Quality and Risk Management](index=24&type=section&id=Asset%20Quality%20and%20Risk%20Management) The Group maintained resilient asset quality as of June 30, 2025, with 90+ day and 180+ day overdue rates stable at **1.86%** and **1.35%** respectively, demonstrating strong risk management capabilities through a comprehensive system encompassing data-driven credit assessment, post-lending management, and loss recovery Overdue Rates | Days Overdue | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | 180+ days | 1.35% | 1.39% | | 90+ days | 1.86% | 1.86% | - The company implements a comprehensive risk management system, including automated preliminary assessment, manual assessment, post-lending monitoring, and collection procedures, to address credit risk[80](index=80&type=chunk)[82](index=82&type=chunk)[86](index=86&type=chunk) [Liquidity and Capital Resources](index=29&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2025, cash and cash equivalents increased to **RMB 5.68 billion**, with net cash inflow from operating activities significantly rising to **RMB 1.54 billion**, while total borrowings grew to **RMB 28.4 billion** through diversified channels, maintaining a healthy financial leverage with a liquidity ratio of **1.17** and a capital-to-debt ratio of **1.75** - Cash and cash equivalents increased to **RMB 5.681 billion**, with net cash generated from operating activities significantly increasing to **RMB 1.536 billion** YoY[88](index=88&type=chunk) - Total borrowings increased to **RMB 28.4 billion**, with diversified financing channels including asset-backed securities (ABS) and bank loans[89](index=89&type=chunk) Key Financial Ratios | Ratio | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Current Ratio (x) | 1.17 | 1.25 | | Debt Ratio | 55% | 55% | | Capital-to-Debt Ratio (x) | 1.75 | 1.64 | [Other Disclosures](index=31&type=section&id=Other%20Disclosures) Capital expenditures and total investments significantly decreased to **RMB 29.28 million** in the reporting period, while the fair value of the investment in Yusheng, a used car trading platform, remained stable at approximately **RMB 2.57 billion**, and full-time employees increased to **4,539** as of June 30, 2025, with no significant acquisitions, disposals, or contingent liabilities - The fair value of the investment in Yusheng, a used car trading platform, was **US$359 million** (approximately **RMB 2.568 billion**), representing **5.1%** of the Group's total assets[101](index=101&type=chunk) - As of June 30, 2025, the Group had **4,539 full-time employees**, with total staff costs of **RMB 614 million**[104](index=104&type=chunk)[105](index=105&type=chunk) [Interim Condensed Consolidated Financial Information](index=34&type=section&id=Interim%20Condensed%20Consolidated%20Financial%20Information) This section presents the Group's unaudited interim condensed consolidated financial statements for the six months ended June 30, 2025, including the statements of profit or loss, comprehensive income, financial position, changes in equity, and cash flows, comprehensively reflecting financial performance and position Summary of Financial Statements for H1 2025 (RMB thousands) | Statement Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | **Statement of Profit or Loss** | | | | Revenue | 5,452,057 | 4,467,853 | | Gross Profit | 2,886,203 | 2,128,937 | | Operating Profit | 799,695 | 576,522 | | Profit for the period | 548,678 | 409,676 | | **Statement of Financial Position (Period-end)** | **June 30, 2025** | **December 31, 2024** | | Total Assets | 50,339,790 | 48,591,241 | | Total Liabilities | 34,059,427 | 32,111,108 | | Total Equity | 16,280,363 | 16,480,133 | | **Statement of Cash Flows** | **H1 2025** | **H1 2024** | | Net cash generated from operating activities | 1,535,606 | 634,081 | | Net cash (used in)/generated from investing activities | (442,527) | 45,743 | | Net cash generated from financing activities | 393,076 | 307,303 | [Notes to the Financial Statements](index=42&type=section&id=Notes%20to%20the%20Financial%20Statements) The notes detail the basis of financial statement preparation, significant accounting policies, and estimates, providing in-depth analysis and disclosure on financial risk management, segment information, revenue, expenses, assets, and liabilities, indicating the Group's operations are primarily in China across two segments: transaction platform and proprietary financing - The Group's business is divided into two operating segments: transaction platform business and proprietary financing business, with the transaction platform business contributing **79% of revenue** and **92% of operating profit** in H1 2025[151](index=151&type=chunk)[153](index=153&type=chunk) - The Group uses a "three-stage" impairment model to measure expected credit losses (ECL) for finance lease receivables, calculated based on probability of default (PD), exposure at default (EAD), and loss given default (LGD)[131](index=131&type=chunk)[133](index=133&type=chunk) - As of June 30, 2025, the Group recognized **RMB 58.764 million** in share-based payment expenses, primarily related to share options and restricted share units granted to employees[185](index=185&type=chunk) [Other Information](index=68&type=section&id=Other%20Information) This section covers corporate governance practices, directors' securities transaction compliance, and post-reporting period events, noting the company's adherence to governance codes, except for the combined roles of Chairman and CEO, and confirms no interim dividend recommendation and audit committee review of financial statements - The Board does not recommend the payment of an interim dividend for the reporting period[67](index=67&type=chunk)[207](index=207&type=chunk) - The company complies with the Corporate Governance Code, with a deviation where the roles of Chairman and Chief Executive Officer are not separated, both held by Mr. Zhang Xua'an, which the Board believes ensures consistent leadership and decision-making efficiency[203](index=203&type=chunk) - The Audit Committee has reviewed the Group's unaudited interim condensed consolidated financial statements for the reporting period[206](index=206&type=chunk)

[Financial Summary](index=1&type=section&id=Financial%20Summary) This section provides an overview of the company's key financial performance and position for the reporting period [Interim Results Overview](index=1&type=section&id=Interim%20Results) Consun Pharmaceutical Group announced its unaudited interim results for the six months ended June 30, 2025, with revenue increasing by 23.7% year-on-year, profit attributable to equity holders growing by 24.6%, significant increases in basic and diluted earnings per share, and an interim dividend of HKD 0.33 per share declared Key Financial Indicators for the Six Months Ended June 30, 2025 | Indicator | June 30, 2025 (RMB thousands) | June 30, 2024 (RMB thousands) | Year-on-Year Growth (%) | | :--- | :--- | :--- | :--- | | Revenue | 1,568,588 | 1,268,549 | 23.7% | | Profit Attributable to Equity Holders of the Company | 498,299 | 399,765 | 24.6% | | Basic Earnings Per Share (RMB) | 0.59 | 0.50 | 18.0% | | Diluted Earnings Per Share (RMB) | 0.58 | 0.49 | 18.4% | | Interim Dividend (HKD per share) | 0.33 | 0.30 | 10.0% | [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) This section presents the consolidated financial performance, including profit, comprehensive income, and key expense items for the period [Profit and Comprehensive Income for the Period](index=2&type=section&id=Profit%20and%20Comprehensive%20Income%20for%20the%20Period) For the six months ended June 30, 2025, the Group's profit for the period was RMB 502,849 thousand, a 25.4% increase from the prior year, driven by significant gross profit growth, a substantial decrease in finance costs, and a slight reduction in income tax expense, with total comprehensive income for the period also increasing proportionally Key Data from Consolidated Statement of Profit or Loss and Other Comprehensive Income | Indicator | June 30, 2025 (RMB thousands) | June 30, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 1,568,588 | 1,268,549 | +23.7% | | Cost of Sales | (359,907) | (321,026) | +12.1% | | Gross Profit | 1,208,681 | 947,523 | +27.6% | | Operating Profit | 538,469 | 447,333 | +20.4% | | Finance Costs | (2,468) | (13,375) | -81.5% | | Profit Before Tax | 535,238 | 433,958 | +23.3% | | Income Tax Expense | (32,389) | (32,998) | -1.8% | | Profit for the Period | 502,849 | 400,960 | +25.4% | | Profit Attributable to Equity Holders of the Company | 498,299 | 399,765 | +24.6% | | Basic Earnings Per Share (RMB) | 0.59 | 0.50 | +18.0% | | Diluted Earnings Per Share (RMB) | 0.58 | 0.49 | +18.4% | | Total Comprehensive Income for the Period | 502,853 | 401,575 | +25.2% | [Consolidated Statement of Financial Position](index=4&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) This section outlines the Group's financial position, including assets, liabilities, and equity, as of the reporting date [Assets, Liabilities and Equity Position](index=4&type=section&id=Assets%2C%20Liabilities%20and%20Equity%20Position) As of June 30, 2025, the Group's total net assets increased to RMB 4,646,473 thousand from December 31, 2024, with net current assets rising primarily due to a significant increase in bank deposits, while non-current assets remained stable, the liability structure showed minor changes, and total equity steadily improved Key Data from Consolidated Statement of Financial Position | Indicator | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Non-current Assets | 1,326,605 | 1,301,769 | +1.9% | | Current Assets | 4,766,397 | 4,551,313 | +4.7% | | Current Liabilities | 1,348,138 | 1,370,800 | -1.7% | | Net Current Assets | 3,418,259 | 3,180,513 | +7.5% | | Total Assets Less Current Liabilities | 4,744,864 | 4,482,282 | +5.9% | | Non-current Liabilities | 98,391 | 89,230 | +10.3% | | Net Assets | 4,646,473 | 4,393,052 | +5.8% | | Total Equity Attributable to Equity Holders of the Company | 4,350,151 | 4,097,603 | +6.2% | | Total Equity | 4,646,473 | 4,393,052 | +5.8% | - Bank deposits with original maturity over three months significantly increased from **RMB 958,000 thousand** as of December 31, 2024, to **RMB 1,794,000 thousand** as of June 30, 2025[8](index=8&type=chunk) [Notes to the Unaudited Interim Financial Information](index=6&type=section&id=Notes%20to%20the%20Unaudited%20Interim%20Financial%20Information) This section provides detailed explanatory notes to the unaudited interim financial statements, covering accounting policies, segment reporting, and other financial disclosures [1 Basis of Preparation](index=6&type=section&id=1%20Basis%20of%20Preparation) The interim financial information is prepared in accordance with the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and Hong Kong Accounting Standard 34 issued by the Hong Kong Institute of Certified Public Accountants, applying the same accounting policies as the 2024 annual financial statements, except for changes expected to be reflected in the 2025 annual financial statements - The interim financial report is prepared in accordance with **Hong Kong Accounting Standard 34** and was authorized for issue on August 19, 2025[10](index=10&type=chunk) [2 Changes in Accounting Policies](index=6&type=section&id=2%20Changes%20in%20Accounting%20Policies) The Group has applied HKAS 21 (Amendment) "The Effects of Changes in Foreign Exchange Rates – Lack of Exchangeability," which had no material impact on this interim report due to the absence of foreign currency non-exchangeable transactions, and no other new standards or interpretations not yet effective were applied during this accounting period - The Group has applied **HKAS 21 (Amendment)**, but it has no material impact on this interim report[11](index=11&type=chunk) [3 Revenue and Segment Reporting](index=6&type=section&id=3%20Revenue%20and%20Segment%20Reporting) The Group's operations are divided into two reportable segments, Consun Pharmaceutical and Yulin Pharmaceutical, with primary revenue generated from the Mainland China market, where nephrology drugs are the main revenue source, women's and children's drugs constitute the second largest segment, and all product lines achieved growth - The Group has two reportable segments: **Consun Pharmaceutical segment** (modern Chinese medicines and medical imaging contrast agents) and **Yulin Pharmaceutical segment** (traditional Chinese medicines)[13](index=13&type=chunk) - Over **99%** of revenue is derived from the Mainland China market[14](index=14&type=chunk) Revenue Breakdown (by Major Product) | Product Category | 2025 (RMB thousands) | 2024 (RMB thousands) | Year-on-Year Growth (%) | | :--- | :--- | :--- | :--- | | Nephrology Drugs | 1,130,615 | 883,313 | 28.0% | | Women's and Children's Drugs | 171,526 | 145,929 | 17.5% | | Orthopedic Drugs | 101,376 | 99,282 | 2.1% | | Medical Imaging Contrast Agents | 94,773 | 77,713 | 22.0% | | Dermatology Drugs | 39,796 | 33,236 | 19.7% | | Hepatobiliary Drugs | 18,489 | 17,676 | 4.6% | | Others | 12,013 | 11,400 | 5.4% | | **Total Revenue** | **1,568,588** | **1,268,549** | **23.7%** | Reportable Segment Revenue and Gross Profit | Segment | 2025 Revenue (RMB thousands) | 2024 Revenue (RMB thousands) | 2025 Gross Profit (RMB thousands) | 2024 Gross Profit (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | | Consun Pharmaceutical Segment | 1,396,175 | 1,108,284 | 1,090,242 | 853,328 | | Yulin Pharmaceutical Segment | 172,413 | 160,265 | 119,992 | 94,195 | | **Total** | **1,568,588** | **1,268,549** | **1,210,234** | **947,523** | [4 Other Income](index=9&type=section&id=4%20Other%20Income) For the six months ended June 30, 2025, total other income decreased by **36.6%** to **RMB 23,618 thousand** compared to the prior year, primarily due to reduced government grants and increased net exchange losses Composition of Other Income | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Government Grants | 3,305 | 6,096 | | Interest Income | 43,067 | 43,506 | | Net Exchange Loss | (19,033) | (13,023) | | **Total** | **23,618** | **37,263** | [5 Profit Before Tax](index=10&type=section&id=5%20Profit%20Before%20Tax) Profit before tax was **RMB 535,238 thousand**, primarily influenced by a significant decrease in finance costs, increased staff costs, and growth in research and development investments Key Components of Profit Before Tax | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Finance Costs | 2,468 | 13,375 | -81.5% | | Staff Costs | 284,398 | 255,324 | +11.4% | | Research and Development Costs | 45,901 | 40,953 | +12.1% | | Depreciation and Amortization Expenses | 30,924 | 37,427 | -17.4% | | Inventories (Reversal) / Write-down | (3,132) | 3,180 | N/A | | Impairment Loss on Trade Receivables | 607 | (9,171) | N/A | [6 Income Tax](index=11&type=section&id=6%20Income%20Tax) Income tax expense was **RMB 32,389 thousand**, a slight decrease from the prior year, as several Group subsidiaries enjoyed preferential income tax rates of **15% or 20%** due to high-tech enterprise or western encouraged industry qualifications, with some even exempt from income tax, and deferred tax liabilities increased due to expected dividend distributions Composition of Income Tax Expense | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Provision for Mainland China Income Tax | 29,848 | 19,640 | | Over-provision for Mainland China Income Tax in Prior Years | (8,120) | (2,790) | | Deferred Tax | 10,661 | 16,148 | | **Total** | **32,389** | **32,998** | - Guangzhou Consun, Inner Mongolia Consun, Yulin Pharmaceutical, and Yulin Capsule enjoy a **preferential income tax rate of 15%**[23](index=23&type=chunk)[24](index=24&type=chunk) - As of June 30, 2025, a deferred tax liability of **RMB 30,820 thousand** was recognized due to the expected distribution of dividends from Guangzhou Consun to the Company[25](index=25&type=chunk) [7 Earnings Per Share](index=12&type=section&id=7%20Earnings%20Per%20Share) For the six months ended June 30, 2025, basic earnings per share were **RMB 0.59** and diluted earnings per share were **RMB 0.58**, both increasing from the prior year, reflecting an improvement in the company's profitability Details of Earnings Per Share Calculation | Indicator | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Profit Attributable to Equity Holders of the Company (RMB thousands) | 498,299 | 399,765 | | Weighted Average Number of Ordinary Shares in Issue (thousands of shares) | 850,404 | 801,611 | | Basic Earnings Per Share (RMB) | 0.59 | 0.50 | | Weighted Average Number of Ordinary Shares for Diluted EPS (thousands of shares) | 856,748 | 810,909 | | Diluted Earnings Per Share (RMB) | 0.58 | 0.49 | [8 Investment Properties, Property, Plant and Equipment, Right-of-Use Assets and Intangible Assets](index=13&type=section&id=8%20Investment%20Properties%2C%20Property%2C%20Plant%20and%20Equipment%2C%20Right-of-Use%20Assets%20and%20Intangible%20Assets) The Group's cost of additions to property, plant, and equipment for the period was **RMB 23,489 thousand**, a decrease from the prior year, with intangible assets primarily comprising trademarks and patents, and no material difference between the carrying amount and fair value of investment properties - For the six months ended June 30, 2025, the cost of additions to property, plant, and equipment was **RMB 23,489 thousand**, a decrease from **RMB 37,234 thousand** in the prior year[31](index=31&type=chunk) - Intangible assets primarily include trademarks with a carrying amount of **RMB 250,744 thousand** and patents with a carrying amount of **RMB 16,540 thousand**[32](index=32&type=chunk) - There was no material difference between the carrying amount and fair value of investment properties[33](index=33&type=chunk) [9 Inventories](index=13&type=section&id=9%20Inventories) As of June 30, 2025, the inventory balance was **RMB 286,698 thousand**, a slight decrease from December 31, 2024, primarily comprising raw materials, work-in-progress, and finished goods Composition of Inventories | Inventory Category | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Raw Materials | 152,763 | 151,354 | | Work-in-progress | 43,863 | 36,231 | | Finished Goods | 90,072 | 102,092 | | **Total** | **286,698** | **289,677** | [10 Trade and Other Receivables](index=14&type=section&id=10%20Trade%20and%20Other%20Receivables) As of June 30, 2025, total trade and other receivables increased to **RMB 394,547 thousand** from December 31, 2024, with the aging analysis of trade receivables and bills receivable showing a significant increase in receivables aged between 3 and 12 months Aging Analysis of Trade and Other Receivables | Aging | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Within 3 months | 179,233 | 275,916 | | 3 to 12 months | 116,040 | 10,936 | | Over 12 months | 1,064 | 10,721 | | Total Trade Receivables and Bills Receivable | 296,337 | 297,573 | | Other Receivables | 98,210 | 72,548 | | **Total** | **394,547** | **370,121** | - Trade receivables are normally due within **30 to 90 days** from the invoice date[35](index=35&type=chunk) - The Group uses a provision matrix to assess expected credit losses, adjusted for debtor-specific factors and economic conditions[36](index=36&type=chunk) [11 Cash and Cash Equivalents and Restricted Cash](index=14&type=section&id=11%20Cash%20and%20Cash%20Equivalents%20and%20Restricted%20Cash) As of June 30, 2025, cash and cash equivalents in Mainland China amounted to **RMB 1,402,307 thousand**, with new restricted cash of **RMB 4,365 thousand** primarily comprising bank cash pledged as deposits for bills payable - As of June 30, 2025, cash and cash equivalents in Mainland China amounted to **RMB 1,402,307 thousand**[37](index=37&type=chunk) - Restricted cash amounted to **RMB 4,365 thousand**, used as deposits for bills payable[37](index=37&type=chunk) [12 Trade and Other Payables](index=15&type=section&id=12%20Trade%20and%20Other%20Payables) As of June 30, 2025, total trade and other payables slightly decreased to **RMB 1,052,181 thousand** from December 31, 2024, with an increase in total trade payables and bills payable, while employee benefits payable and project development deposits decreased Aging Analysis of Trade and Other Payables | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Total Trade Payables and Bills Payable | 96,864 | 75,643 | | Contract Liabilities | 51,303 | 59,272 | | Accrued Expenses | 625,041 | 505,918 | | Employee Benefits Payable | 152,144 | 230,198 | | Project Development Deposits | 3,674 | 31,674 | | **Total** | **1,052,181** | **1,061,862** | [13 Bank Loans](index=15&type=section&id=13%20Bank%20Loans) As of June 30, 2025, the Group's total bank loans decreased to **RMB 239,277 thousand** from December 31, 2024, with all loans being unsecured, unguaranteed, and repayable within one year or on demand, and the Group had not breached any loan covenants - As of June 30, 2025, total bank loans amounted to **RMB 239,277 thousand**, a decrease of approximately **5.6%** from **RMB 253,340 thousand** as of December 31, 2024[41](index=41&type=chunk) - All bank loans are unsecured and unguaranteed, and repayable within one year or on demand[40](index=40&type=chunk)[41](index=41&type=chunk) - The Group had not breached any covenants related to drawn loans as of June 30, 2025[41](index=41&type=chunk) [14 Equity-Settled Share-Based Payment Transactions](index=16&type=section&id=14%20Equity-Settled%20Share-Based%20Payment%20Transactions) For the six months ended June 30, 2025, **2,965,000 share options** were exercised for a total consideration of approximately **RMB 11,222 thousand**, with a total of **9,929,000 share options** outstanding and exercisable - For the six months ended June 30, 2025, **2,965,000 share options** were exercised for a total consideration of approximately **RMB 11,222 thousand**[42](index=42&type=chunk) - As of June 30, 2025, the total number of outstanding and exercisable share options was **9,929,000**[42](index=42&type=chunk) [15 Capital, Reserves and Dividends](index=16&type=section&id=15%20Capital%2C%20Reserves%20and%20Dividends) The Board declared an interim dividend of **HKD 0.33 per share**, and the company repurchased **2,041,000 shares** for approximately **RMB 21,023 thousand** during the period, which have not yet been cancelled, while share capital slightly increased due to the exercise of share options - The Board declared an interim dividend of **HKD 0.33 per share**, totaling approximately **RMB 254,193 thousand**[44](index=44&type=chunk) - For the six months ended June 30, 2025, the Company repurchased **2,041,000 shares** for a total consideration of approximately **RMB 21,023 thousand**, which have not yet been cancelled[48](index=48&type=chunk) Changes in Issued Share Capital | Item | Number of Shares (thousands of shares) | Paid-up Share Capital (RMB thousands) | | :--- | :--- | :--- | | As at January 1, 2025 | 849,408 | 67,308 | | Shares issued under share option scheme | 2,965 | 273 | | As at June 30, 2025 | 852,373 | 67,581 | [Management Discussion and Analysis](index=18&type=section&id=Management%20Discussion%20and%20Analysis) This section provides an overview of the Group's operational and financial performance, liquidity, and financial resources for the reporting period [Business and Financial Review](index=18&type=section&id=Business%20and%20Financial%20Review) The Group achieved double-digit growth in both revenue and gross profit in the first half of 2025, primarily driven by product market expansion and sales network development, with gross margin improvement mainly due to lower procurement prices for Chinese medicinal materials, while finance costs significantly decreased, distribution and administrative expenses increased Key Financial Review Data for H1 2025 | Indicator | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 1,568,588 | 1,268,549 | +23.7% | | Gross Profit | 1,208,681 | 947,523 | +27.6% | | Gross Margin | 77.1% | 74.7% | +2.4 percentage points | | Other Income | 23,618 | 37,263 | -36.6% | | Distribution Costs | 515,650 | 411,912 | +25.2% | | Administrative Expenses | 177,573 | 134,712 | +31.8% | | Finance Costs | 2,468 | 13,375 | -81.5% | | Income Tax Expense | 32,389 | 32,998 | -1.8% | | Interim Profit Attributable to Equity Holders of the Company | 498,299 | 399,765 | +24.6% | | Basic Earnings Per Share (RMB) | 0.59 | 0.50 | +18.0% | | Diluted Earnings Per Share (RMB) | 0.58 | 0.49 | +18.4% | - Revenue growth was primarily due to continuous expansion of product markets and development of the national sales network[52](index=52&type=chunk) - Gross margin growth was mainly attributable to a decrease in procurement prices for Chinese medicinal raw materials[53](index=53&type=chunk) - The increase in distribution costs was mainly due to increased marketing investment commensurate with sales growth and enhanced OTC brand building[55](index=55&type=chunk) - The increase in administrative expenses was primarily due to organizational structure optimization and talent acquisition[56](index=56&type=chunk) - The decrease in finance costs was mainly due to a reduction in loan size and lower bank borrowing interest rates[58](index=58&type=chunk) [Liquidity and Financial Resources](index=20&type=section&id=Liquidity%20and%20Financial%20Resources) The Group maintains a sound liquidity position, with reduced inventory turnover days and a significant increase in cash flow from operating activities, while cash and bank balances steadily grew, and the gearing ratio decreased, indicating lower financial leverage, and the Group adopts prudent financial management strategies and monitors exchange rate risks Key Data on Liquidity and Financial Resources | Indicator | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Inventory Balance | 286,698 | 289,677 | -1.0% | | Inventory Turnover Days (days) | 144.1 | 165.3 | -21.2 days | | Trade Receivables and Bills Receivable Balance | 296,337 | 297,573 | -0.4% | | Trade Receivables and Bills Receivable Turnover Days (days) | 34.1 | 34.0 | +0.1 days | | Trade Payables and Bills Payable Balance | 96,864 | 75,643 | +28.1% | | Trade Payables and Bills Payable Turnover Days (days) | 43.1 | 40.0 | +3.1 days | | Net Cash Generated from Operating Activities | 492,695 | 350,339 (H1 2024) | +40.6% | | Cash and Bank Balances | 4,041,683 | 3,865,682 | +4.6% | | Bank Loans | 239,277 | 253,340 | -5.6% | | Gearing Ratio | 5.5% | 6.2% | -0.7 percentage points | | Capital Commitments | 507,489 | 493,985 | +2.7% | - The decrease in inventory turnover days was mainly due to enhanced inventory management[61](index=61&type=chunk) - The decrease in gearing ratio was mainly due to a reduction in net bank loans and an increase in total equity attributable to equity holders resulting from higher operating profit[68](index=68&type=chunk) - The Group currently has no foreign currency hedging policy, but management monitors foreign exchange risks[69](index=69&type=chunk) - During the period, **2,964,612 ordinary shares** were issued due to the exercise of share options, and **2,041,000 shares** were repurchased but not yet cancelled[70](index=70&type=chunk) [Other Information](index=22&type=section&id=Other%20Information) This section covers various non-financial and supplementary disclosures, including employee information, significant investments, and compliance matters [Employees and Remuneration Policy](index=22&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the Group employed **3,073 employees**, with total staff costs of **RMB 284,398 thousand**, and its remuneration policy considers individual performance, experience, qualifications, and industry practices, offering various benefits and continuous education and training - As of June 30, 2025, the Group employed **3,073 employees**, with total staff costs of **RMB 284,398 thousand**[72](index=72&type=chunk) - Employee salaries are determined by individual performance, work experience, qualifications, and current industry practices, complemented by a share option scheme[72](index=72&type=chunk) [Significant Investments Held](index=22&type=section&id=Significant%20Investments%20Held) As of June 30, 2025, the Group held no significant equity investments in any other companies, apart from its investments in subsidiaries - The Group held no significant investments in the equity of any other companies[73](index=73&type=chunk) [Future Plans for Material Investments and Capital Assets](index=22&type=section&id=Future%20Plans%20for%20Material%20Investments%20and%20Capital%20Assets) As of the date of this announcement, the Group has no other future plans regarding material investments and capital assets - As of the date of this announcement, the Group has no other future plans regarding material investments and capital assets[74](index=74&type=chunk) [Material Acquisitions and Disposals of Subsidiaries, Associates and Joint Ventures](index=22&type=section&id=Material%20Acquisitions%20and%20Disposals%20of%20Subsidiaries%2C%20Associates%20and%20Joint%20Ventures) For the first half of 2025, the Group had no material acquisitions or disposals of subsidiaries, associates, or joint ventures - For the first half of 2025, the Group had no material acquisitions or disposals of subsidiaries, associates, or joint ventures[75](index=75&type=chunk) [Pledge of Assets](index=22&type=section&id=Pledge%20of%20Assets) As of June 30, 2025, the Group had no pledge of assets - As of June 30, 2025, the Group had no pledge of assets[76](index=76&type=chunk) [Contingent Liabilities](index=23&type=section&id=Contingent%20Liabilities) As of June 30, 2025, the Group had no material contingent liabilities - As of June 30, 2025, the Group had no material contingent liabilities[77](index=77&type=chunk) [Related Party Transactions](index=23&type=section&id=Related%20Party%20Transactions) For the first half of 2025, the Group did not enter into any non-exempt related party transactions as defined by the Listing Rules of the Stock Exchange - For the first half of 2025, the Group did not enter into any non-exempt related party transactions as defined by the Listing Rules of the Stock Exchange[78](index=78&type=chunk) [Principal Risks and Uncertainties](index=23&type=section&id=Principal%20Risks%20and%20Uncertainties) Management continuously manages operational, financial, and compliance risks, closely monitoring developments in national policies for the pharmaceutical industry to timely adjust Group policies in response to key uncertainties - Management manages operational, financial, and compliance risks in its daily operations[79](index=79&type=chunk) - Recent developments in national policies for the pharmaceutical industry are the principal uncertainties faced by the Group[79](index=79&type=chunk) [Environmental Policies and Performance](index=23&type=section&id=Environmental%20Policies%20and%20Performance) The Group is committed to environmental sustainability, complying with all relevant environmental rules and regulations, and encouraging the conservation and recycling of water, energy, and materials - The Group is committed to achieving environmental sustainability and complying with all relevant environmental rules and regulations[80](index=80&type=chunk) - Management encourages the conservation and recycling of water, energy, and materials[80](index=80&type=chunk) [Compliance with Relevant Laws and Regulations](index=23&type=section&id=Compliance%20with%20Relevant%20Laws%20and%20Regulations) For the first half of 2025, there were no material breaches of laws and regulations related to the Group's operations - For the first half of 2025, there were no material breaches of laws and regulations related to the Group's operations[81](index=81&type=chunk) [Major Industry Policies and Impact](index=24&type=section&id=Major%20Industry%20Policies%20and%20Impact) This section analyzes the key government policies affecting the pharmaceutical industry and their potential impact on the Group's operations [Government Work Report Deployment](index=24&type=section&id=Government%20Work%20Report%20Deployment) The 2025 Government Work Report outlined several pharmaceutical industry policies, including optimizing centralized drug procurement, strengthening quality supervision, improving drug pricing mechanisms, supporting innovative drug development, enhancing traditional Chinese medicine inheritance and innovation, deepening medical insurance payment reform, and strictly regulating medical insurance funds - The Government Work Report deployed policies to optimize centralized drug procurement and strengthen quality assessment and supervision[82](index=82&type=chunk) - It aims to improve the drug pricing mechanism, establish an innovative drug catalog, and support the development of innovative drugs and medical devices[82](index=82&type=chunk) - It also seeks to improve the inheritance and innovative development mechanism of traditional Chinese medicine, promoting its high-quality development[82](index=82&type=chunk) [Optimizing Centralized Drug Procurement Policies, Strengthening Quality Assessment and Supervision](index=24&type=section&id=Optimizing%20Centralized%20Drug%20Procurement%20Policies%2C%20Strengthening%20Quality%20Assessment%20and%20Supervision) The 11th batch of centralized procurement has commenced with optimized rules, allowing medical institutions to select specific brands for reporting demand, refining the price difference calculation anchor, and implementing "full coverage" production line inspections and product sampling for selected enterprises to ensure quality - The **11th batch of centralized procurement** has been launched, allowing medical institutions to select specific brands for reporting demand[83](index=83&type=chunk) - The "anchor point" for price difference calculation has been optimized, no longer solely relying on the lowest price as a reference[83](index=83&type=chunk) - Bidding drug production lines are required to have no violations of Good Manufacturing Practice within two years, and "full coverage" inspections and product sampling are implemented for selected enterprises[83](index=83&type=chunk) [2025 Medical Insurance Drug Catalog Adjustment, "Dual Catalog" Mechanism Launched](index=24&type=section&id=2025%20Medical%20Insurance%20Drug%20Catalog%20Adjustment%2C%20%22Dual%20Catalog%22%20Mechanism%20Launched) The 2025 National Medical Insurance Drug Catalog adjustment has officially commenced, introducing for the first time a "Commercial Health Insurance Innovative Drug Catalog" aimed at enhancing patient access to medicines and reshaping the pharmaceutical industry's payment logic and innovation ecosystem - The **2025 National Medical Insurance Drug Catalog adjustment** has officially commenced, introducing for the first time a **"Commercial Health Insurance Innovative Drug Catalog"**[84](index=84&type=chunk) - The "Commercial Health Insurance Innovative Drug Catalog" aims to enhance patient access to medicines and reshape the pharmaceutical industry's payment logic and innovation ecosystem[84](index=84&type=chunk) [Grassroots Drug Linkage Management](index=25&type=section&id=Grassroots%20Drug%20Linkage%20Management) Six departments jointly issued "Opinions on Reforming and Improving Grassroots Drug Linkage Management Mechanisms and Expanding Grassroots Drug Categories," aiming to standardize and optimize grassroots drug types, establish mechanisms for linked allocation and use, centralized supply and distribution, and shortage early warning and disposal, while requiring closely integrated medical consortia to coordinate and determine drug catalogs - The "Opinions" aim to address grassroots drug issues, with key measures including standardizing and optimizing grassroots drug categories, and establishing three mechanisms: linked allocation and use, centralized supply and distribution, and shortage early warning and disposal[85](index=85&type=chunk) - Closely integrated medical consortia are required to prioritize the National Essential Drug List, National Medical Insurance Drug Catalog, and drugs selected through national centralized procurement, coordinating to determine drug catalogs and dynamically adjusting them annually[85](index=85&type=chunk) - The goal is to fully establish a drug linkage management system and operating mechanism within closely integrated medical consortia by **2027**[85](index=85&type=chunk) [Drug Listing Consensus](index=25&type=section&id=Drug%20Listing%20Consensus) Multiple provincial medical security bureaus jointly formed the "Consensus on Drug Listing on Provincial Medical Procurement Platforms," systematically elaborating on issues such as regular listing of various drugs, listing of nationally procured and negotiated drugs, and management of listed drugs, requiring all provinces to revise and issue their local drug listing rules by the end of May 2025 - The "Drug Listing Consensus" was initiated by multiple provincial medical security bureaus, summarizing local work practices[86](index=86&type=chunk) - It elaborates on consensus issues such as price comparison for regular listing of various drugs, listing of nationally procured and negotiated drugs, and management of listed drugs[86](index=86&type=chunk) - All provinces are required to revise and issue their local drug listing rules by the end of **May 2025**[86](index=86&type=chunk) [Corporate Governance](index=26&type=section&id=Corporate%20Governance) This section details the Group's corporate governance principles, practices, and compliance with relevant codes and regulations [Corporate Governance Principles and Practices](index=26&type=section&id=Corporate%20Governance%20Principles%20and%20Practices) The Group adheres to a business philosophy of "Tao as the foundation, Virtue as the base, Righteousness above all, and Righteousness and Profit Coexistence," emphasizing righteousness in business operations and committing to continuously reviewing and improving the efficiency and effectiveness of its corporate governance principles and practices - The Group's business philosophy is "Tao as the foundation, Virtue as the base, Righteousness above all, and Righteousness and Profit Coexistence," emphasizing righteousness over profit in conflicts[87](index=87&type=chunk) - The Company is committed to continuously reviewing and improving the efficiency and effectiveness of its compliance with corporate governance principles and practices[88](index=88&type=chunk) [Deviation from Code Provision C.2.1](index=27&type=section&id=Deviation%20from%20Code%20Provision%20C.2.1) Mr. An Meng, the Chairman and Executive Director, also serves as the Chief Executive Officer, which deviates from Code Provision C.2.1, but the Board believes this arrangement enhances overall strategic planning efficiency and maintains an appropriate balance of power - Mr. An Meng, the Chairman and Executive Director, also serves as the Chief Executive Officer, which deviates from **Code Provision C.2.1**[89](index=89&type=chunk) - The Board believes this arrangement enhances the Company's overall strategic planning efficiency and maintains an appropriate balance of power[89](index=89&type=chunk) [Standard Code for Securities Transactions by Directors](index=27&type=section&id=Standard%20Code%20for%20Securities%20Transactions%20by%20Directors) The Company has adopted the Standard Code set out in Appendix C3 of the Listing Rules and confirmed that all Directors complied with the relevant requirements for the six months ended June 30, 2025 - The Company has adopted the **Standard Code** set out in **Appendix C3 of the Listing Rules**[90](index=90&type=chunk) - All Directors complied with the required standards for dealing in securities as set out in the Standard Code for the six months ended June 30, 2025[90](index=90&type=chunk) [Audit Committee](index=27&type=section&id=Audit%20Committee) The Audit Committee, comprising three independent non-executive directors, is responsible for advising on the appointment of external auditors, monitoring financial statement integrity, reviewing significant financial reporting judgments, and overseeing financial reporting systems, risk management, and internal control systems, with the interim results reviewed by both the Audit Committee and external auditor KPMG - The Audit Committee comprises three independent non-executive directors, with Mr. Li Zhuoguang as Chairman[91](index=91&type=chunk) - The Audit Committee's responsibilities include advising on the appointment of external auditors, monitoring the integrity of financial statements, reviewing significant financial reporting judgments, and overseeing financial reporting systems, risk management, and internal control systems[91](index=91&type=chunk) - The interim results have been reviewed by both the Audit Committee and KPMG, the external auditor[91](index=91&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=28&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) This section details the Company's activities related to the issuance, repurchase, and redemption of its own listed securities during the reporting period [Share Issuance and Repurchase](index=28&type=section&id=Share%20Issuance%20and%20Repurchase) For the six months ended June 30, 2025, the Company issued **2,964,612 ordinary shares** due to the exercise of share options and repurchased **2,041,000 shares** for approximately **HKD 23,009,000**, which have not yet been cancelled, and neither the Company nor its subsidiaries sold or redeemed any listed securities - **2,964,612 ordinary shares** were issued due to the exercise of share options, with a total consideration of approximately **HKD 12,111,710**[92](index=92&type=chunk) - The Company repurchased **2,041,000 shares** for a total consideration of approximately **HKD 23,009,000**, which have not yet been cancelled[92](index=92&type=chunk) - Neither the Company nor any of its subsidiaries sold or redeemed any of the Company's listed securities[92](index=92&type=chunk) [Unaudited Post-Reporting Period Events](index=28&type=section&id=Unaudited%20Post-Reporting%20Period%20Events) This section outlines significant events that occurred after the reporting period but before the financial statements were authorized for issue [Key Post-Reporting Period Events](index=28&type=section&id=Key%20Post-Reporting%20Period%20Events) Subsequent to the reporting period, the Board recommended an interim dividend of **HKD 0.33 per share**, and **244,650 ordinary shares** were issued due to the exercise of share options, while **3,154,000 of its own ordinary shares** were repurchased - The Board recommended an interim dividend of **HKD 0.33 per share** for the six months ended June 30, 2025[93](index=93&type=chunk) - Subsequent to the reporting period, **244,650 ordinary shares** were issued due to the exercise of share options[93](index=93&type=chunk) - Subsequent to the reporting period, the Company repurchased **3,154,000 of its own ordinary shares** for a total consideration of approximately **HKD 35,656,000**[93](index=93&type=chunk) [Interim Dividend](index=28&type=section&id=Interim%20Dividend) This section provides details regarding the interim dividend declared by the Board for the reporting period [Details of Interim Dividend Declaration](index=28&type=section&id=Details%20of%20Interim%20Dividend%20Declaration) The Board announced an interim dividend of **HKD 0.33 per share** for the six months ended June 30, 2025, totaling approximately **RMB 254,193 thousand**, expected to be paid on or about September 19, 2025 - The Board announced an interim dividend of **HKD 0.33 per share**, totaling approximately **RMB 254,193 thousand**[94](index=94&type=chunk) - The interim dividend is expected to be paid on or about **Friday, September 19, 2025**[94](index=94&type=chunk) - Shareholders must complete transfer procedures by **4:30 p.m. on Friday, September 5, 2025**, to be eligible for the dividend[94](index=94&type=chunk) [Publication of Interim Results Announcement and Interim Report](index=29&type=section&id=Publication%20of%20Interim%20Results%20Announcement%20and%20Interim%20Report) This section details the channels and timeline for the dissemination of the interim results announcement and the full interim report [Announcement and Report Publication](index=29&type=section&id=Announcement%20and%20Report%20Publication) This interim results announcement has been published on the Company's website and the Stock Exchange's website, and the Group's interim report for the six months ended June 30, 2025, will be dispatched to shareholders and published on the aforementioned websites in due course - This interim results announcement has been published on the Company's website (www.chinaconsun.com) and the Stock Exchange's website (www.hkexnews.hk)[95](index=95&type=chunk) - The Group's interim report for the six months ended June 30, 2025, will be dispatched to the Company's shareholders and published on the aforementioned websites in due course[95](index=95&type=chunk)