[Financial Overview](index=1&type=section&id=Financial%20Overview) The group's H1 2025 consolidated results show a revenue decline and a shift from profit to loss, while total assets and equity increased [Financial Overview](index=1&type=section&id=Financial%20Overview) The group's H1 2025 consolidated results show an 18% year-on-year revenue decrease and a shift from profit to loss, with total assets and equity increasing H1 2025 vs H1 2024 Performance Overview (HKD thousands) | Metric | H1 2025 | H1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 961,708 | 1,176,888 | -18% | | Gross Profit | 332,110 | 413,836 | -20% | | Segment EBITDA | 8,839 | 75,379 | -88% | | Operating (Loss) / Profit | (140,575) | 9,488 | N/A | | Adjusted Net Profit | 59,886 | 164,280 | -64% | | Net (Loss) / Profit for the Period | (27,143) | 23,415 | N/A | | Net (Loss) / Profit Attributable to Owners of the Company | (11,415) | 3,397 | N/A | | Basic (Loss) / Earnings Per Share (HKD) | (0.004) | 0.001 | N/A | | Diluted (Loss) / Earnings Per Share (HKD) | (0.040) | (0.032) | N/A | Financial Position Summary as of June 30, 2025 vs December 31, 2024 (HKD thousands) | Metric | June 30, 2025 | December 31, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Total Equity | 7,915,882 | 7,722,876 | +2% | | Net Current Assets | 3,948,578 | 3,844,654 | +3% | | Total Assets | 13,812,111 | 11,858,778 | +16% | | Net Assets Per Share (HKD) | 2.851 | 2.781 | +3% | [Interim Condensed Consolidated Financial Statements](index=3&type=section&id=Interim%20Condensed%20Consolidated%20Financial%20Statements) This section presents the group's interim financial statements, including income, comprehensive income, and balance sheets, detailing performance and financial position [Interim Condensed Consolidated Statement of Profit or Loss](index=3&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) The group's H1 2025 revenue decreased by 18.3%, leading to an operating loss of HKD 140,575 thousand, primarily due to increased selling expenses and share-based payments H1 2025 vs H1 2024 Consolidated Statement of Profit or Loss (HKD thousands) | Metric | H1 2025 | H1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 961,708 | 1,176,888 | -18.3% | | Cost of Sales | (629,598) | (763,052) | -17.5% | | Gross Profit | 332,110 | 413,836 | -19.8% | | Other Income | 68,040 | 89,322 | -23.8% | | Operating (Loss) / Profit | (140,575) | 9,488 | N/A | | Share of Results of Associates | 119,224 | 141,385 | -15.7% | | Net (Loss) / Profit for the Period | (27,143) | 23,415 | N/A | | Net (Loss) / Profit Attributable to Owners of the Company | (11,415) | 3,397 | N/A | - Selling expenses increased from HKD 55,452 thousand to HKD 82,173 thousand, with new share-based payments under subsidiary share option schemes amounting to **HKD 87,029 thousand**[4](index=4&type=chunk) [Interim Condensed Consolidated Statement of Comprehensive Income](index=4&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) The group's H1 2025 total comprehensive income shifted from a loss to a gain of HKD 115,470 thousand, mainly driven by foreign currency translation differences H1 2025 vs H1 2024 Consolidated Statement of Comprehensive Income (HKD thousands) | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Net (Loss) / Profit for the Period | (27,143) | 23,415 | | Exchange differences on translating foreign operations | 91,700 | (74,198) | | Share of other comprehensive income / (loss) of associates | 51,279 | (61,012) | | Total Comprehensive Income / (Loss) for the Period | 115,470 | (111,619) | | Total Comprehensive Income / (Loss) Attributable to Owners of the Company | 112,795 | (116,962) | - In H1 2025, exchange differences on translating foreign operations shifted from a loss to a gain of **HKD 91,700 thousand**, positively impacting comprehensive income[6](index=6&type=chunk) [Interim Condensed Consolidated Statement of Financial Position](index=5&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, total assets increased by 16% to HKD 13,812,111 thousand, while total liabilities rose by 42.6%, mainly due to increased payables for payment and digitalization services Consolidated Statement of Financial Position as of June 30, 2025 vs December 31, 2024 (HKD thousands) | Metric | June 30, 2025 | December 31, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Total Assets | 13,812,111 | 11,858,778 | +16.48% | | Total Non-Current Assets | 3,982,989 | 3,893,895 | +2.29% | | Total Current Assets | 9,829,122 | 7,964,883 | +23.40% | | Total Equity | 7,915,882 | 7,722,876 | +2.50% | | Total Liabilities | 5,896,229 | 4,135,902 | +42.59% | | Total Non-Current Liabilities | 15,685 | 15,673 | +0.08% | | Total Current Liabilities | 5,880,544 | 4,120,229 | +42.72% | - Restricted bank balances significantly increased to **HKD 4,053,794 thousand** (December 31, 2024: HKD 2,593,913 thousand), and cash and cash equivalents rose to **HKD 3,671,885 thousand** (December 31, 2024: HKD 3,011,282 thousand)[7](index=7&type=chunk) - Payables for payment and digitalization services substantially increased to **HKD 4,178,198 thousand** (December 31, 2024: HKD 2,623,537 thousand), with new asset-backed securities amounting to **HKD 308,387 thousand**[8](index=8&type=chunk) [Notes](index=7&type=section&id=Notes) This section provides detailed notes on the group's general information, accounting policies, revenue breakdown, segment information, and other financial disclosures [General Information](index=7&type=section&id=General%20Information) The group primarily engages in payment and digitalization services, fintech, platform operation, and financial solutions, is listed on HKEX, and presents unaudited interim financial information in HKD thousands - The group primarily provides payment and digitalization services, fintech services, platform operation solutions, and financial solutions[9](index=9&type=chunk) - The company is incorporated in Bermuda and listed on The Stock Exchange of Hong Kong Limited[9](index=9&type=chunk)[10](index=10&type=chunk) - This interim condensed consolidated financial information is presented in **HKD thousands**, approved for publication on August 18, 2025, and is unaudited[11](index=11&type=chunk)[12](index=12&type=chunk)[13](index=13&type=chunk) [Basis of Preparation](index=7&type=section&id=Basis%20of%20Preparation) The interim condensed consolidated financial information is prepared in accordance with HKAS 34 and should be read in conjunction with the annual consolidated financial statements - The interim condensed consolidated financial information is prepared in accordance with Hong Kong Accounting Standard 34 Interim Financial Reporting issued by the HKICPA[14](index=14&type=chunk) - This information does not include all note disclosures normally required in annual consolidated financial statements and should be read in conjunction with the annual consolidated financial statements prepared in accordance with HKFRSs[14](index=14&type=chunk) [Accounting Policies](index=7&type=section&id=Accounting%20Policies) Accounting policies are consistent with the prior annual financial statements, except for income tax estimates and the adoption of new/revised standards - The accounting policies adopted are consistent with those applied in the annual consolidated financial statements for the year ended December 31, 2024, except for income tax estimates and the adoption of new and revised standards[15](index=15&type=chunk) - The group was not required to change its accounting policies or make retrospective adjustments due to the adoption of certain standard amendments[16](index=16&type=chunk) - Certain new accounting standards issued but not yet effective are not expected to have a significant impact on the group in current or future reporting periods[17](index=17&type=chunk) [Revenue, Other Income and Other (Losses) / Gains, Net](index=8&type=section&id=Revenue%2C%20Other%20Income%20and%20Other%20(Losses)%20%2F%20Gains%2C%20Net) The group's H1 2025 total revenue decreased by 18.3% due to reduced service and goods sales, while interest income declined and government grants increased H1 2025 vs H1 2024 Revenue Composition (HKD thousands) | Revenue Source | H1 2025 | H1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Provision of Services | 918,252 | 1,055,482 | -13.0% | | Sale of Goods | 5,864 | 83,887 | -93.0% | | Provision of Fintech Services | 37,592 | 37,519 | +0.2% | | **Total Revenue** | **961,708** | **1,176,888** | **-18.3%** | H1 2025 vs H1 2024 Other Income (HKD thousands) | Other Income Source | H1 2025 | H1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Interest Income | 58,064 | 80,755 | -28.1% | | Government Grants | 9,570 | 7,855 | +21.8% | | Rental Income | 173 | 437 | -60.4% | | Others | 233 | 275 | -15.3% | | **Total Other Income** | **68,040** | **89,322** | **-23.8%** | - Other (losses) / gains, net, shifted from a gain of HKD 269 thousand in H1 2024 to a loss of **HKD 3,234 thousand** in H1 2025, primarily due to increased fair value losses on financial assets at fair value through profit or loss[18](index=18&type=chunk) [Segment Information](index=9&type=section&id=Segment%20Information) The group's operations are categorized into four segments: payment and digitalization services, fintech services, platform operation solutions, and financial solutions, with performance assessed by EBITDA and segment operating profit/loss - The group's internal reporting categorizes operations into four main segments: payment and digitalization services, fintech services, platform operation solutions, and financial solutions[21](index=21&type=chunk)[22](index=22&type=chunk) - The Board assesses segment performance based on (loss) / profit before interest expense, tax, depreciation, and amortization (EBITDA) and segment operating (loss) / profit[21](index=21&type=chunk) [Segment Revenue and Results](index=10&type=section&id=Segment%20Revenue%20and%20Results) In H1 2025, payment and digitalization services, platform operation solutions, and financial solutions saw declines in revenue and EBITDA, while fintech services achieved revenue growth and a shift to profit H1 2025 vs H1 2024 Segment Revenue and EBITDA (HKD thousands) | Segment | H1 2025 Revenue | H1 2024 Revenue | Change (%) | H1 2025 EBITDA | H1 2024 EBITDA | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Payment and Digitalization Services | 800,534 | 892,230 | -10.3% | 26,555 | 117,472 | -77.4% | | Fintech Services | 46,232 | 43,904 | +5.3% | 28,242 | (20,372) | N/A | | Platform Operation Solutions | 41,340 | 57,057 | -27.6% | (19,049) | (16,080) | N/A | | Financial Solutions | 73,602 | 99,810 | -26.3% | (27,472) | 384 | N/A | | Others | – | 83,887 | -100% | 563 | (6,025) | N/A | | **Total** | **961,708** | **1,176,888** | **-18.3%** | **8,839** | **75,379** | **-88.3%** | - Payment and digitalization services, platform operation solutions, and financial solutions all recorded operating losses, while fintech services achieved an operating profit[23](index=23&type=chunk) [Segment Assets and Liabilities](index=12&type=section&id=Segment%20Assets%20and%20Liabilities) As of June 30, 2025, the payment and digitalization services segment held the largest share of assets and liabilities, with non-current asset additions primarily comprising property, plant, and equipment and right-of-use assets Segment Assets as of June 30, 2025 (HKD thousands) | Segment | Segment Assets | | :--- | :--- | | Payment and Digitalization Services | 7,133,700 | | Fintech Services | 2,253,603 | | Platform Operation Solutions | 552,385 | | Financial Solutions | 403,323 | | Others | 294,024 | | Unallocated | 5,057,071 | | Eliminations | (1,881,995) | | **Group Total** | **13,812,111** | Segment Liabilities as of June 30, 2025 (HKD thousands) | Segment | Segment Liabilities | | :--- | :--- | | Payment and Digitalization Services | (5,527,427) | | Fintech Services | (787,007) | | Platform Operation Solutions | (330,499) | | Financial Solutions | (565,158) | | Others | (110,340) | | Unallocated | (457,793) | | Eliminations | 1,881,995 | | **Group Total** | **(5,896,229)** | - Total non-current asset additions in H1 2025 amounted to **HKD 28,179 thousand**, mainly comprising property, plant, and equipment and right-of-use assets[25](index=25&type=chunk)[26](index=26&type=chunk) [Expenses by Nature](index=13&type=section&id=Expenses%20by%20Nature) In H1 2025, employee benefits and R&D costs increased, while commissions, depreciation of property, plant, and equipment, and cost of inventories sold decreased, with credit impairment losses shifting to a reversal H1 2025 vs H1 2024 Key Expense Items (HKD thousands) | Expense Item | H1 2025 | H1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Commissions and Incentives Paid / Payable to Business Channel Partners | 463,791 | 513,035 | -9.6% | | Interest Expense on Asset-Backed Securities | 1,908 | – | N/A | | Depreciation of Property, Plant and Equipment | 14,406 | 24,672 | -41.6% | | Depreciation of Right-of-Use Assets | 15,438 | 13,892 | +11.1% | | Amortization of Intangible Assets | 4,622 | 177 | +2500% | | Employee Benefit Expenses (including Share-Based Payments under Subsidiary Share Option Schemes) | 521,458 | 454,638 | +14.7% | | Cost of Inventories Sold | 5,491 | 61,776 | -91.1% | | Research and Development Costs (including Staff Costs) | 176,557 | 165,965 | +6.4% | | (Reversal of) / Credit Impairment Losses | 5,554 | (33,823) | N/A | - Credit impairment shifted from a loss of HKD 33,823 thousand in H1 2024 to a reversal of **HKD 5,554 thousand** in H1 2025[28](index=28&type=chunk) [Income Tax (Expense) / Credit](index=14&type=section&id=Income%20Tax%20(Expense)%20%2F%20Credit) The group's H1 2025 income tax shifted from a credit to an expense of HKD 7,074 thousand, primarily due to Hong Kong profits tax and reduced over-provision from prior years, with Chinese subsidiaries enjoying preferential tax rates H1 2025 vs H1 2024 Income Tax (Expense) / Credit (HKD thousands) | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Current Income Tax - Hong Kong Profits Tax | (4,577) | – | | Current Income Tax - China Corporate Income Tax | (4,734) | (7,075) | | Over-provision in Prior Years | 2,237 | 23,924 | | Deferred Income Tax | – | 6 | | **Income Tax (Expense) / Credit** | **(7,074)** | **16,855** | - Hong Kong profits tax is calculated at a rate of **16.5%**, resulting in an expense in H1 2025, while there was no assessable profit in H1 2024[29](index=29&type=chunk) - Beijing Jiehui was recognized as a software and integrated circuit enterprise, enjoying preferential tax rates of **0% or 12.5%**, leading to an over-provision of income tax in prior years[32](index=32&type=chunk)[33](index=33&type=chunk) [Dividends](index=15&type=section&id=Dividends) The company neither paid nor declared any dividends in H1 2025 or H1 2024 - No dividends were paid or declared by the company for the six months ended June 30, 2025[34](index=34&type=chunk) [(Loss) / Earnings Per Share](index=15&type=section&id=(Loss)%20%2F%20Earnings%20Per%20Share) The group's H1 2025 basic loss per share was HKD 0.004 and diluted loss per share was HKD 0.040, both shifting from profit or widening losses year-on-year, primarily due to the dilutive effect of PAX Global share options H1 2025 vs H1 2024 (Loss) / Earnings Per Share (HKD) | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Basic (Loss) / Earnings Per Share | (0.004) | 0.001 | | Diluted (Loss) / Earnings Per Share | (0.040) | (0.032) | - Basic (loss) / earnings per share is calculated by dividing the net (loss) / profit attributable to owners of the company by the weighted average number of ordinary shares outstanding during the period[35](index=35&type=chunk) - Unexercised share options issued by PAX Global may have a dilutive effect, while share options issued by VBill Cayman and Shenzhen Gaoyang have an anti-dilutive effect on basic loss per share[37](index=37&type=chunk)[38](index=38&type=chunk) [Loans Receivable](index=17&type=section&id=Loans%20Receivable) As of June 30, 2025, the group's net loans receivable decreased to HKD 1,425,713 thousand, with current loans forming the largest portion and higher impairment provisions for those overdue by over three months Loans Receivable Aging Analysis as of June 30, 2025 vs December 31, 2024 (HKD thousands) | Aging | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Current | 1,419,297 | 1,780,001 | | Overdue 1 to 3 Months | – | – | | Overdue Over 3 Months | 154,604 | 152,868 | | **Total Loans Receivable** | **1,573,901** | **1,932,869** | | Less: Impairment Provision for Loans Receivable | (148,188) | (147,731) | | **Net Loans Receivable** | **1,425,713** | **1,785,138** | - Loans receivable represent amounts due from customers in the ordinary course of the fintech services business, primarily denominated in RMB[40](index=40&type=chunk) - As of June 30, 2025, the Stage 3 impairment provision for loans receivable was **HKD 142,602 thousand**[42](index=42&type=chunk) [Investments in Associates](index=19&type=section&id=Investments%20in%20Associates) The group holds investments in several associates, primarily PAX Global and Zhaoxun Hengda, with H1 2025 share of results from associates decreasing to HKD 119,224 thousand Investments in Associates as of June 30, 2025 vs December 31, 2024 (HKD thousands) | Associate | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | PAX Global | 3,176,133 | 3,090,237 | | Zhaoxun Hengda Technology Co., Ltd | 319,005 | 322,878 | | Beijing Zhongjin Yun Chuang Software Co., Ltd | 23,829 | 23,746 | | Shenzhen Guofu Yunlian Technology Co., Ltd | 3,262 | 3,152 | | Chengdu Qiche Technology Co., Ltd | 2,889 | – | | **Total** | **3,525,119** | **3,442,562** | H1 2025 vs H1 2024 Share of Results of Associates (HKD thousands) | Associate | H1 2025 | H1 2024 | | :--- | :--- | :--- | | PAX Global | 134,085 | 154,525 | | Zhaoxun Hengda | (13,778) | (12,349) | | Beijing Zhongjin | (651) | (758) | | Chengdu Qiche | (388) | – | | **Total** | **119,224** | **141,385** | [(a) Investment in PAX Global](index=20&type=section&id=(a)%20Investment%20in%20PAX%20Global) The group's interest in PAX Global increased to 34.35%, with H1 2025 share of profit decreasing, mainly due to share repurchases and employee option exercises - The group's interest in PAX Global increased from **34.29% to 34.35%**[48](index=48&type=chunk) - The H1 2025 share of profit from PAX Global was **HKD 134,085 thousand**, a decrease compared to H1 2024[48](index=48&type=chunk) - Changes in the group's interest in PAX Global were due to PAX Global's repurchase and cancellation of **2,162,000 ordinary shares** and the exercise of share options by certain employees[48](index=48&type=chunk) [(b) Investment in Zhaoxun Hengda](index=21&type=section&id=(b)%20Investment%20in%20Zhaoxun%20Hengda) Zhaoxun Hengda recognized an impairment of HKD 140,865 thousand in H1 2024 due to withdrawal of its listing application, but as of June 30, 2025, its recoverable amount exceeded its carrying value - The company has withdrawn Zhaoxun Hengda's application for listing on the STAR Market of the Shanghai Stock Exchange[49](index=49&type=chunk) - As of June 30, 2024, Zhaoxun Hengda's recoverable amount was lower than its carrying value, resulting in an impairment of **HKD 140,865 thousand**[49](index=49&type=chunk) - As of June 30, 2025, an impairment test was performed to determine the recoverable amount of the investment, which exceeded its carrying value[49](index=49&type=chunk) [(c) Investment in Beijing Fangyun](index=21&type=section&id=(c)%20Investment%20in%20Beijing%20Fangyun) The group holds a 23.1% equity interest in Beijing Fangyun, engaged in business analytics, and as of June 30, 2025, its share of losses exceeded its equity interest, with unrecognised losses of HKD 2,891 thousand - The group holds a **23.1%** equity interest in Beijing Fangyun, which primarily engages in business analytics services[50](index=50&type=chunk) - As of June 30, 2025, the group's share of losses in Beijing Fangyun exceeded its equity interest in ordinary shares, with unrecognised losses amounting to **HKD 2,891 thousand**[50](index=50&type=chunk) [(d) Investment in Beijing Zhongjin](index=21&type=section&id=(d)%20Investment%20in%20Beijing%20Zhongjin) The group holds a 20% equity interest in Beijing Zhongjin, a fintech services company, and accounts for it using the equity method, having appointed a representative to its board - The group holds a **20%** equity interest in Beijing Zhongjin, which primarily engages in fintech services[51](index=51&type=chunk) - The group has appointed a representative to Beijing Zhongjin's board of directors and accounts for this equity investment as an investment in an associate using the equity method[51](index=51&type=chunk) [(e) Investment in Cloopen](index=21&type=section&id=(e)%20Investment%20in%20Cloopen) The group holds Class A ordinary shares in Cloopen Group Holding Limited and accounts for its investment as an associate using the equity method, having appointed two representatives to its board - The group holds **55,677,341 Class A ordinary shares** in Cloopen, which primarily provides cloud communication solutions[52](index=52&type=chunk) - Two of the group's representatives have been appointed to Cloopen's board of directors, and its interest in Cloopen is accounted for as an investment in an associate using the equity method[52](index=52&type=chunk) [(f) Investment in Dian Sansan](index=22&type=section&id=(f)%20Investment%20in%20Dian%20Sansan) The group holds a 49% interest in Dian Sansan, a retail and digitalization services provider, and as of June 30, 2025, its share of losses exceeded its equity interest, with unrecognised losses of HKD 3,857 thousand - The group holds a **49%** interest in Dian Sansan, which primarily provides retail and digitalization services[53](index=53&type=chunk) - As of June 30, 2025, the group's share of losses in Dian Sansan exceeded its equity interest in ordinary shares, with unrecognised losses amounting to **HKD 3,857 thousand**[53](index=53&type=chunk) [(g) Investment in Beijing Chongxiang](index=22&type=section&id=(g)%20Investment%20in%20Beijing%20Chongxiang) The group holds a 49% interest in Beijing Chongxiang, a software and IT services provider, and as of June 30, 2025, its share of losses exceeded its equity interest, with unrecognised losses of HKD 530 thousand - The group holds a **49%** interest in Beijing Chongxiang, which primarily provides software and information technology services[54](index=54&type=chunk) - As of June 30, 2025, the group's share of losses in Beijing Chongxiang exceeded its equity interest in ordinary shares, with unrecognised losses amounting to **HKD 530 thousand**[54](index=54&type=chunk) [(h) Investment in Chengdu Qiche](index=22&type=section&id=(h)%20Investment%20in%20Chengdu%20Qiche) The group holds a 30% equity interest in Chengdu Qiche, a software and IT services provider, and accounts for it using the equity method, having appointed a representative to its board - The group holds a **30%** equity interest in Chengdu Qiche, which primarily provides software and information technology services[55](index=55&type=chunk) - The group has appointed a representative to Chengdu Qiche's board of directors and accounts for its interest as an investment in an associate using the equity method[55](index=55&type=chunk) [Trade Receivables](index=23&type=section&id=Trade%20Receivables) As of June 30, 2025, the group's net trade receivables decreased to HKD 118,722 thousand, with credit terms ranging from 0 to 180 days, and the largest portion being current to 90 days overdue Trade Receivables Aging Analysis as of June 30, 2025 vs December 31, 2024 (HKD thousands) | Aging | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Current to 90 Days | 85,400 | 164,853 | | 91 to 180 Days | 13,961 | 16,135 | | 181 to 365 Days | 17,949 | 2,810 | | Over 365 Days | 5,397 | 5,788 | | **Total Trade Receivables** | **122,707** | **189,586** | | Less: Impairment Provision for Trade Receivables | (3,985) | (3,864) | | **Net Trade Receivables** | **118,722** | **185,722** | - The group grants credit terms to trade debtors ranging from **0 to 180 days**[56](index=56&type=chunk) [Trade Payables](index=23&type=section&id=Trade%20Payables) As of June 30, 2025, the group's total trade payables decreased to HKD 386,640 thousand, with supplier credit terms ranging from 0 to 180 days, and the largest portion being current to 90 days overdue Trade Payables Aging Analysis as of June 30, 2025 vs December 31, 2024 (HKD thousands) | Aging | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Current to 90 Days | 380,096 | 422,633 | | 91 to 180 Days | 214 | 148 | | 181 to 365 Days | 3,215 | 14 | | Over 365 Days | 3,115 | 4,638 | | **Total Trade Payables** | **386,640** | **427,433** | - Credit terms granted by suppliers range from **0 to 180 days**[57](index=57&type=chunk) [Payables for Payment and Digitalization Services Business and Other Payables and Accruals](index=24&type=section&id=Payables%20for%20Payment%20and%20Digitalization%20Services%20Business%20and%20Other%20Payables%20and%20Accruals) As of June 30, 2025, payables for payment and digitalization services business significantly increased by 59.3% to HKD 4,178,198 thousand, mainly representing amounts collected on behalf of merchants, while other payables and accruals slightly decreased Payables for Payment and Digitalization Services Business and Other Payables and Accruals as of June 30, 2025 vs December 31, 2024 (HKD thousands) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Payables for Payment and Digitalization Services Business | 4,178,198 | 2,623,537 | | Other Payables and Accruals | 872,648 | 925,445 | | **Total** | **5,050,846** | **3,548,982** | - Payables for payment and digitalization services business primarily represent amounts collected on behalf of merchants from relevant banks and financial institutions, to be settled with merchants on contractually stipulated settlement dates[58](index=58&type=chunk) Composition of Other Payables and Accruals as of June 30, 2025 vs December 31, 2024 (HKD thousands) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Accrued Staff Costs and Retirement Benefit Obligations | 143,070 | 223,907 | | Deposits | 34,517 | 33,667 | | Customer Advances | 40,295 | 27,382 | | Deposits from Business Channel Partners | 468,945 | 445,864 | | Others | 184,464 | 193,934 | | **Total** | **871,291** | **924,754** | [Asset-Backed Securities](index=26&type=section&id=Asset-Backed%20Securities) Ronghui Zhidabao Factoring, a partially owned subsidiary, was approved to issue asset-backed securities, with the first tranche of RMB 335 million issued, and the group retaining substantially all risks and rewards of the underlying loans - Ronghui Zhidabao Factoring was approved to issue an asset-backed special plan with a maximum size of **RMB 2,000,000,000** (approximately HKD 2,151,926 thousand)[60](index=60&type=chunk) - On April 16, 2025, the first tranche of the asset-backed special plan was formally established, with an issuance size of **RMB 335,000,000** (approximately HKD 360,448 thousand), comprising senior and subordinated tranches[61](index=61&type=chunk) - The group holds all subordinated asset-backed special plan securities, retaining substantially all the risks and rewards of ownership of the loans receivable, thus continuing to recognize the full amount of these loans receivable and recognizing the consideration received as a financial liability[61](index=61&type=chunk) - As of June 30, 2025, the group held asset-backed securities with a carrying value of approximately **HKD 308,387 thousand**, collateralized by loans receivable with a carrying value of approximately **HKD 363,259 thousand**[61](index=61&type=chunk) [Management Discussion and Analysis](index=31&type=section&id=Management%20Discussion%20and%20Analysis) This section reviews the group's segment performance, overall financial results, and key investment and financing activities for the period [Segment Performance Review](index=31&type=section&id=Segment%20Performance%20Review) The group's business segments showed mixed performance, with payment and digitalization services, platform operation solutions, and financial solutions experiencing declines or losses, while fintech services achieved revenue growth and profitability H1 2025 vs H1 2024 Segment Performance Overview (HKD thousands) | Segment | H1 2025 Revenue | H1 2024 Revenue | Change (%) | H1 2025 Operating (Loss) / Profit | H1 2024 Operating (Loss) / Profit | Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Payment and Digitalization Services | 800,534 | 892,230 | -10% | (83,330) | 90,753 | N/A | | Fintech Services | 46,232 | 43,904 | +5% | 25,446 | (20,536) | N/A | | Platform Operation Solutions | 41,340 | 57,057 | -28% | (23,893) | (21,091) | N/A | | Financial Solutions | 73,602 | 99,810 | -26% | (32,109) | (2,523) | N/A | [(1) Payment and Digitalization Services](index=31&type=section&id=(1)%20Payment%20and%20Digitalization%20Services) In H1 2025, revenue for payment and digitalization services decreased by 10%, shifting to an operating loss of HKD 83,300 thousand, mainly due to non-cash share option expenses and strategic resource allocation to overseas business - Segment revenue was **HKD 800,500 thousand**, a year-on-year decrease of **10%**[67](index=67&type=chunk) - Segment operating loss was **HKD 83,300 thousand**, compared to a profit of HKD 90,800 thousand in H1 2024[67](index=67&type=chunk) - This was primarily attributable to approximately **HKD 85,200 thousand** in non-cash share option expenses and the strategic reallocation of resources towards overseas and cross-border businesses as digital payments replace traditional payment markets[68](index=68&type=chunk) [(2) Fintech Services](index=32&type=section&id=(2)%20Fintech%20Services) In H1 2025, fintech services revenue grew by 5% to HKD 46,200 thousand, shifting from a loss to a profit of HKD 25,400 thousand, driven by increased loan origination and reduced credit impairment losses - Segment revenue was **HKD 46,200 thousand**, a year-on-year increase of **5%**, mainly due to an increase in the number of loans originated during the period[70](index=70&type=chunk)[71](index=71&type=chunk) - Segment operating profit was **HKD 25,400 thousand**, compared to a loss of HKD 20,500 thousand in H1 2024, primarily due to a decrease in credit impairment losses during the period[70](index=70&type=chunk)[71](index=71&type=chunk) [(3) Platform Operation Solutions](index=32&type=section&id=(3)%20Platform%20Operation%20Solutions) In H1 2025, platform operation solutions revenue decreased by 28% to HKD 41,300 thousand, with operating loss widening to HKD 23,900 thousand, mainly due to increased fair value losses on financial assets at fair value through profit or loss - Segment revenue was **HKD 41,300 thousand**, a year-on-year decrease of **28%**[72](index=72&type=chunk) - Segment operating loss was **HKD 23,900 thousand**, primarily due to increased fair value losses on financial assets at fair value through profit or loss[72](index=72&type=chunk) [(4) Financial Solutions](index=33&type=section&id=(4)%20Financial%20Solutions) In H1 2025, financial solutions revenue decreased by 26% to HKD 73,600 thousand, shifting from a profit to an operating loss of HKD 32,100 thousand, mainly due to upfront costs for multiple projects - Segment revenue was **HKD 73,600 thousand**, a year-on-year decrease of **26%**[74](index=74&type=chunk) - Segment operating loss was **HKD 32,100 thousand**, primarily due to upfront costs incurred for multiple projects[74](index=74&type=chunk) [(5) Others](index=33&type=section&id=(5)%20Others) Other business operations primarily include the results of subsidiaries under the electricity metering and solutions business, which were sold in July and August 2024 - Other business operations primarily include the results of subsidiaries under the electricity metering and solutions business, which were sold in July and August 2024[75](index=75&type=chunk) [Overall Financial Performance and Position](index=33&type=section&id=Overall%20Financial%20Performance%20and%20Position) The group's H1 2025 consolidated revenue decreased by 18%, shifting to a net loss, with reduced cost of sales and administrative expenses, but increased selling and share option expenses, and a decline in associate contributions - H1 2025 consolidated revenue was **HKD 961.7 million**, a decrease of approximately **18%** compared to H1 2024, mainly due to reduced segment revenue from payment and digitalization services and electricity metering and solutions[76](index=76&type=chunk) - A loss of **HKD 27.1 million** was recorded in H1 2025, compared to a profit of HKD 23.4 million in H1 2024[66](index=66&type=chunk) - Share option expenses of approximately **HKD 87 million** in H1 2025 were primarily attributable to share options granted by a subsidiary under the payment and digitalization services segment[79](index=79&type=chunk) - The reversal of credit impairment losses was mainly due to the recovery of overdue loans receivable balances under the fintech services segment that were previously provided for[79](index=79&type=chunk) [(A) Revenue](index=33&type=section&id=(A)%20Revenue) The group's H1 2025 consolidated revenue was HKD 961,700 thousand, a decrease of approximately 18% year-on-year, primarily due to reduced segment revenue from payment and digitalization services and electricity metering and solutions - H1 2025 consolidated revenue was **HKD 961,700 thousand**, a decrease of approximately **18%** compared to H1 2024[76](index=76&type=chunk) - The decrease was mainly due to reduced segment revenue from the group's payment and digitalization services and electricity metering and solutions segments[76](index=76&type=chunk) [(B) Other Income](index=33&type=section&id=(B)%20Other%20Income) The group's other income primarily comprises interest income and government grants - Other income primarily includes interest income and government grants[76](index=76&type=chunk) [(C) Cost of Sales and Operating Expenses](index=33&type=section&id=(C)%20Cost%20of%20Sales%20and%20Operating%20Expenses) In H1 2025, cost of sales decreased due to lower revenue, administrative expenses decreased (offset by R&D), selling expenses increased for digital products, share option expenses were HKD 87 million, and credit impairment losses reversed - In H1 2025, cost of sales decreased, primarily due to a decline in total revenue[77](index=77&type=chunk) - Administrative expenses decreased, mainly due to lower staff costs, partially offset by increased research and development costs[77](index=77&type=chunk) - Selling expenses increased, primarily due to additional sales investment in digital operation products[77](index=77&type=chunk) - Share option expenses of approximately **HKD 87,000 thousand** in H1 2025 were mainly attributable to share options granted by a subsidiary under the payment and digitalization services segment[79](index=79&type=chunk) - The reversal of credit impairment losses was mainly due to the recovery of overdue loans receivable balances under the fintech services segment that were previously provided for[79](index=79&type=chunk) [(D) Share of Results of Associates](index=34&type=section&id=(D)%20Share%20of%20Results%20of%20Associates) The share of results of associates primarily refers to the group's share of results from PAX Global Technology Limited and Zhaoxun Hengda Technology Co., Ltd - The amount primarily refers to the share of results from the company's associates, including PAX Global Technology Limited and Zhaoxun Hengda Technology Co., Ltd[80](index=80&type=chunk) [(E) Investments in Associates](index=34&type=section&id=(E)%20Investments%20in%20Associates) The group's investments in associates primarily consist of interests in PAX Global and Zhaoxun Hengda, maintaining an optimistic outlook and continuously evaluating investment strategies to enhance shareholder value - The balance primarily refers to the group's interests in PAX Global and Zhaoxun Hengda[81](index=81&type=chunk) - The group maintains an optimistic outlook for future prospects and will continue to prudently and flexibly evaluate its investment strategies to enhance shareholder value[81](index=81&type=chunk) [(i) PAX Global](index=34&type=section&id=(i)%20PAX%20Global) As of June 30, 2025, the group held an approximate 34.4% effective interest in PAX Global, valued at HKD 2,202,200 thousand, and despite a decrease in net profit due to global economic uncertainties, the group remains positive on future market demand - As of June 30, 2025, the group held **364,000,000 ordinary shares** in PAX Global, with an approximate **34.4%** effective interest valued at approximately **HKD 2,202,200 thousand**[82](index=82&type=chunk) - PAX Global is one of the world's leading providers of electronic payment terminal solutions[82](index=82&type=chunk) - In H1 2025, PAX Global's unaudited net profit decreased primarily due to lower revenue, attributed to reduced procurement orders in certain markets amidst global economic uncertainties[83](index=83&type=chunk) - The group maintains a positive outlook on PAX Global's payment terminal market demand and is prepared to seize significant opportunities in the global payment industry[84](index=84&type=chunk) [(ii) Zhaoxun Hengda](index=35&type=section&id=(ii)%20Zhaoxun%20Hengda) As of June 30, 2025, the group held approximately 45.73% of Zhaoxun Hengda's issued shares; despite a slowdown in the information security chip industry due to global economic conditions and semiconductor supply chain tensions, R&D projects are progressing well, and cost reduction efforts are underway - As of June 30, 2025, the group held approximately **45.73%** of Zhaoxun Hengda's issued shares[85](index=85&type=chunk) - The information security chip industry is experiencing slower growth and increased competition, affected by global economic conditions and tensions in the global semiconductor supply chain[85](index=85&type=chunk) - Other R&D projects are progressing smoothly, and cost reduction efforts for various products are proceeding in an orderly manner[85](index=85&type=chunk) [(F) Financial Assets at Fair Value Through Profit or Loss](index=35&type=section&id=(F)%20Financial%20Assets%20at%20Fair%20Value%20Through%20Profit%20or%20Loss) Financial assets at fair value through profit or loss primarily refer to an unlisted investment fund located outside Hong Kong - The amount primarily refers to an unlisted investment fund located outside Hong Kong[86](index=86&type=chunk) [(G) Trade Receivables, Other Financial Assets at Amortized Cost and Other Current Assets](index=35&type=section&id=(G)%20Trade%20Receivables%2C%20Other%20Financial%20Assets%20at%20Amortized%20Cost%20and%20Other%20Current%20Assets) As of June 30, 2025, net trade receivables decreased to HKD 118,722 thousand, while other financial assets at amortized cost and other current assets combined increased to HKD 392,952 thousand, mainly due to higher other receivables from cross-border business Trade Receivables and Other Current Assets as of June 30, 2025 vs December 31, 2024 (HKD thousands) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Net Trade Receivables | 118,722 | 185,722 | | Other Financial Assets at Amortized Cost and Other Current Assets | 392,952 | 204,035 | | **Total** | **511,674** | **389,757** | - Changes in trade receivables aging from current to 90 days and 181 to 365 days were mainly due to changes in outstanding balances from the financial solutions and platform operation solutions segments[88](index=88&type=chunk) - The increase in balances of other financial assets at amortized cost and other current assets was primarily due to an increase in other receivables from cross-border business[89](index=89&type=chunk) [(H) Loans Receivable](index=36&type=section&id=(H)%20Loans%20Receivable) Loans receivable represent amounts due from customers in the fintech services business, primarily denominated in RMB, with the balance decreasing due to fewer loans originated during the period - Loans receivable represent amounts due from customers in the ordinary course of business under the fintech services segment, primarily denominated in RMB[90](index=90&type=chunk) - The decrease in the balance was due to a reduction in the number of loans originated during the period[90](index=90&type=chunk) [(I) Time Deposits, Restricted Bank Balances and Cash and Cash Equivalents](index=36&type=section&id=(I)%20Time%20Deposits%2C%20Restricted%20Bank%20Balances%20and%20Cash%20and%20Cash%20Equivalents) As of June 30, 2025, restricted bank balances significantly increased by 56.3% to HKD 4,053,794 thousand, and cash and cash equivalents rose by 21.9% to HKD 3,671,885 thousand, mainly due to regulatory measures on customer reserve funds for third-party payment institutions Cash and Bank Balances as of June 30, 2025 vs December 31, 2024 (HKD thousands) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Long-Term Bank Deposits | 273,613 | 265,280 | | Short-Term Bank Deposits | 165,104 | 177,207 | | **Total Time Deposits** | **438,717** | **442,487** | | Restricted Bank Balances | 4,053,794 | 2,593,913 | | Cash and Cash Equivalents | 3,671,885 | 3,011,282 | | **Restricted Bank Balances and Cash and Cash Equivalents** | **7,725,679** | **5,605,195** | - Restricted bank balances significantly increased, primarily including customer reserve funds deposited in designated accounts at the People's Bank of China and funds used for the group's cross-border payment business operations[92](index=92&type=chunk) [(J) Trade Payables, Payables for Payment and Digitalization Services Business and Other Payables and Accruals](index=37&type=section&id=(J)%20Trade%20Payables%2C%20Payables%20for%20Payment%20and%20Digitalization%20Services%20Business%20and%20Other%20Payables%20and%20Accruals) As of June 30, 2025, payables for payment and digitalization services business significantly increased to HKD 4,178,198 thousand, mainly representing amounts payable to merchants, while trade payables decreased, and accrued staff costs and retirement benefit obligations reduced due to year-end bonus payments Various Payables as of June 30, 2025 vs December 31, 2024 (HKD thousands) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Trade Payables | 386,640 | 427,433 | | Payables for Payment and Digitalization Services Business | 4,178,198 | 2,623,537 | | Other Payables and Accruals | 872,648 | 925,445 | | **Total** | **5,437,486** | **3,976,415** | - Payables for payment and digitalization services business significantly increased, primarily representing amounts payable to merchants for payment and digitalization services business[94](index=94&type=chunk) - The decrease in accrued staff costs and retirement benefit obligations was mainly due to the payment of 2024 year-end bonuses in H1 2025[95](index=95&type=chunk)[99](index=99&type=chunk) [(K) Asset-Backed Securities](index=38&type=section&id=(K)%20Asset-Backed%20Securities) The balance of asset-backed securities represents the carrying value of outstanding senior tranche asset-backed securities, issued by Ronghui Zhidabao Factoring to diversify financing channels and improve funding structure, with proceeds primarily used for general working capital in the fintech services segment - The balance refers to the carrying value of outstanding senior tranche asset-backed securities[96](index=96&type=chunk) - Ronghui Zhidabao Factoring approved the Suixin Yunlian - E-Credit Supply Chain Financial Asset-Backed Special Plan and issued asset-backed securities, with a maximum issuance size of **RMB 2,000,000,000**[97](index=97&type=chunk) - The proceeds from the issuance are primarily used for general working capital in the fintech services segment, which will broaden the group's access to low-cost funding channels, thereby improving the company's financing structure and facilitating its operating activities and investments[97](index=97&type=chunk) [(L) Income Tax (Expense) / Credit](index=39&type=section&id=(L)%20Income%20Tax%20(Expense)%20%2F%20Credit) In H1 2024, the income tax credit was primarily due to a subsidiary under the payment and digitalization services segment obtaining qualifications as a software and integrated circuit enterprise - In H1 2024, the income tax credit was primarily due to a subsidiary under the payment and digitalization services segment obtaining qualifications as a software and integrated circuit enterprise[100](index=100&type=chunk) [Major Investment and Financing Activities](index=39&type=section&id=Major%20Investment%20and%20Financing%20Activities) During the period, the group undertook two major financing activities: granting share options under the VBill (Cayman) Share Option Scheme and issuing asset-backed securities by Ronghui Zhidabao Factoring to broaden financing channels [Grant of Share Options under VBill (Cayman) Share Option Scheme](index=39&type=section&id=Grant%20of%20Share%20Options%20under%20VBill%20(Cayman)%20Share%20Option%20Scheme) On March 7, 2025, VBill (Cayman)'s board conditionally granted 2,401 share options to nine eligible participants, representing approximately 29.998% of VBill (Cayman)'s issued share capital, with an exercise price of HKD 235,000, vesting over three years - VBill (Cayman)'s board resolved to conditionally grant share options to nine eligible participants under the VBill (Cayman) Share Option Scheme[101](index=101&type=chunk) - A total of **2,401 VBill (Cayman) share options** (if fully exercised) represent approximately **29.998%** of VBill (Cayman)'s issued share capital as of the adoption and grant dates of the VBill (Cayman) Share Option Scheme[101](index=101&type=chunk) - Each VBill (Cayman) share option grants the grantee the right to subscribe for one VBill (Cayman) share at a subscription price of **HKD 235,000**, with approximately **40%, 30%, and 30%** of the options vesting on the first, second, and third anniversaries of the grant date, respectively[102](index=102&type=chunk) [Issuance of Asset-Backed Securities](index=40&type=section&id=Issuance%20of%20Asset-Backed%20Securities) Ronghui Zhidabao Factoring was approved to issue asset-backed securities up to RMB 2,000,000,000, with the first tranche of RMB 335,000,000 issued, primarily for general working capital in fintech services to broaden financing channels - Ronghui Zhidabao Factoring approved the Suixin Yunlian - E-Credit Supply Chain Financial Asset-Backed Special Plan and issued asset-backed securities, with a maximum issuance size of **RMB 2,000,000,000**[106](index=106&type=chunk) - The first tranche of the asset-backed securities plan, with an issuance size of **RMB 335,000,000**, was established on April 16, 2025[106](index=106&type=chunk) - The proceeds from the issuance are primarily used for general working capital in the fintech services segment, which will broaden the group's access to low-cost funding channels[106](index=106&type=chunk) [Business Outlook](index=41&type=section&id=Business%20Outlook) This section outlines the macroeconomic outlook and specific strategies for the group's payment and digitalization, fintech, platform operation, and financial solutions segments [Macroeconomic Outlook](index=41&type=section&id=Macroeconomic%20Outlook) In 2025, China's economy maintains overall stability and progress, despite external uncertainties and the need to strengthen domestic demand, with the second half focusing on new development patterns and expanding internal demand for high-quality growth - In 2025, China's national economy maintains overall stability and steady progress, with the effects of policy combinations continuously released and economic stabilization and development promotion evident[108](index=108&type=chunk) - External instability and uncertainties are numerous, the expansion of domestic demand still needs strengthening, and the foundation for sustained economic recovery and improvement still needs to be consolidated[108](index=108&type=chunk) - Looking ahead to the second half, the country will accelerate the construction of a new development pattern, coordinate domestic and international economic and trade work, expand domestic demand, strengthen the internal circulation, and promote sustained, healthy, and high-quality economic development[108](index=108&type=chunk) [Payment and Digitalization Services](index=41&type=section&id=Payment%20and%20Digitalization%20Services) The group's payment and digitalization services continue their digitalization strategy, with an 8% increase in payment transactions and over 150% growth in cross-border transaction volume, while investing in stablecoin applications and enhancing payment convenience for inbound visitors - Payment transaction volume continued to grow steadily, with an **8%** year-on-year increase[109](index=109&type=chunk) - Cross-border business transaction volume increased by over **150%** year-on-year, continuously building differentiated service capabilities in overseas regions such as South America, the Middle East, and Southeast Asia, with service trade growing more than fourfold[109](index=109&type=chunk) - Increased research and investment in stablecoin applications, attempting to complement traditional payment systems to build a more comprehensive, efficient, and secure payment service infrastructure[109](index=109&type=chunk) - Actively participated in the "Greatly Improve Payment Convenience for Foreigners Visiting China" special initiative led by the People's Bank of China, successfully obtaining CNP business licenses from the three major international card organizations[110](index=110&type=chunk) - Self-developed digitalization operation products now cover the retail, used car dealership, and catering industries, and have expanded to over **20 countries** in North America, Europe, Southeast Asia, and mainland China[111](index=111&type=chunk) [Fintech Services](index=42&type=section&id=Fintech%20Services) The group's fintech services platform, Suixin Yunlian, adheres to the philosophy of "technology empowering finance, finance activating industry," building a "dual-driven" capital supply system through strategic partnerships with financial institutions and innovative asset securitization tools, successfully completing China's first "N+N" model credit note ABS issuance - The fintech services platform, Suixin Yunlian, has built a unique "dual-driven" capital supply system, relying on strategic collaboration with traditional banking financial institutions and innovatively utilizing asset securitization tools[112](index=112&type=chunk) - Continuously advancing business innovation, launching innovative products such as the bill 1+N model, N+N model, and credit note E-financing N+N model[112](index=112&type=chunk) - Successfully obtained a **RMB 2 billion** shelf-registration credit note ABS no-objection letter from the Shanghai Stock Exchange and innovatively completed China's first "**N+N**" model credit note ABS issuance[112](index=112&type=chunk) [Platform Operation Solutions](index=42&type=section&id=Platform%20Operation%20Solutions) The group's platform operation solutions business with major clients signed new contracts, maintaining stable business scale, while actively expanding new clients, exploring new business models, and continuing R&D investment in stablecoins, digital RMB, and AI - Successfully signed new annual contracts for product development and business operations with major clients, maintaining a stable business scale[113](index=113&type=chunk) - Increased efforts to expand new clients and explore new business models, while focusing on cost reduction and efficiency improvement to adapt to market changes[113](index=113&type=chunk) - Continued investment in R&D, focusing on stablecoins, digital RMB, and artificial intelligence, leading to the development and implementation of multiple applications[113](index=113&type=chunk) [Financial Solutions](index=43&type=section&id=Financial%20Solutions) HiSun FinTech is committed to providing system services for domestic financial institutions, actively promoting low-cost financial innovation and domestic substitution in the Xinchuang market, while HiSun Global expands overseas, planning local offices and signing new clients to enhance international service capabilities and product R&D - HiSun FinTech is committed to low-cost financial innovation, actively promoting clients' digital innovation in hot businesses such as asset management, cross-border payments, risk monitoring, and compliance auditing[114](index=114&type=chunk) - HiSun FinTech focuses on the Xinchuang market, assisting clients in achieving domestic substitution of key technologies for business systems and optimizing IBS products on Loong Arch architecture servers[114](index=114&type=chunk) - HiSun Global is establishing overseas offices, actively expanding markets and developing new product solutions, planning to set up local offices in Bangladesh and Myanmar, and has signed three new clients in Bangladesh, Hong Kong, and the United States[115](index=115&type=chunk) - Overseas products/services continue to improve in three directions: core banking products, internet products (e-banking, wallets, payments), and mainframe migration projects[115](index=115&type=chunk) [Liquidity and Financial Resources](index=43&type=section&id=Liquidity%20and%20Financial%20Resources) This section details the group's liquidity and financial resources, including an overview, capital structure, major investments, acquisitions/disposals, future plans, exchange rate risk, and financial guarantees [Overview of Liquidity and Financial Resources](index=43&type=section&id=Overview%20of%20Liquidity%20and%20Financial%20Resources) As of June 30, 2025, the group's total assets increased to HKD 13,812,100 thousand, with net cash of HKD 4,038,200 thousand and a capital gearing ratio of 5.0%, considered robust for sustained business development - As of June 30, 2025, the group recorded total assets of **HKD 13,812,100 thousand**, total liabilities of **HKD 5,896,200 thousand**, and total equity of **HKD 7,915,900 thousand**[116](index=116&type=chunk) - Net cash as of June 30, 2025, was **HKD 4,038,200 thousand**, an increase of **19.7%** compared to December 31, 2024[117](index=117&type=chunk) - As of June 30, 2025, the capital gearing ratio increased from **1.5%** as of December 31, 2024, to **5.0%**, which is considered robust and suitable for the group's continued business development[117](index=117&type=chunk) [Capital Structure and Pledge Details](index=44&type=section&id=Capital%20Structure%20and%20Pledge%20Details) As of June 30, 2025, the group had bank borrowings of HKD 72,400 thousand and bank facilities of approximately HKD 217,300 thousand, with restricted bank balances and cash and cash equivalents primarily denominated in RMB, HKD, and USD - As of June 30, 2025, the group had bank borrowings of **HKD 72,400 thousand** at fixed interest rates and bank facilities of approximately **HKD 217,300 thousand**[118](index=118&type=chunk) - As of June 30, 2025, the group's restricted bank balances and cash and cash equivalents were primarily denominated in **RMB (HKD 5,630,300 thousand)**, **HKD (HKD 755,000 thousand)**, and **USD (HKD 1,266,600 thousand)**[118](index=118&type=chunk) [Material Investments](index=44&type=section&id=Material%20Investments) Except for investments in associates, the group held no other material investments as of June 30, 2025 - Except as disclosed in Note E under the section titled "Overall Financial Performance and Position" on pages 34 to 35, the group held no other material investments as of June 30, 2025[119](index=119&type=chunk) [Material Acquisitions and Disposals of Subsidiaries, Associates and Joint Ventures](index=44&type=section&id=Material%20Acquisitions%20and%20Disposals%20of%20Subsidiaries%2C%20Associates%20and%20Joint%20Ventures) The group did not undertake any material acquisitions or disposals of subsidiaries, associates, or joint ventures during the six months ended June 30, 2025 - The group did not undertake any material acquisitions or disposals of subsidiaries, associates, or joint ventures during the six months ended June 30, 2025[120](index=120&type=chunk) [Future Plans for Material Investments or Capital Assets](index=44&type=section&id=Future%20Plans%20for%20Material%20Investments%20or%20Capital%20Assets) As of June 30, 2025, the group had no specific plans for material investments or capital assets - As of June 30, 2025, the group had no specific plans for material investments or capital assets[121](index=121&type=chunk) [Exchange Rate Risk](index=45&type=section&id=Exchange%20Rate%20Risk) The group's revenue, purchases, and expenses are primarily denominated in multiple currencies, but no hedging instruments were used during the period, and significant fluctuations in HKD or RMB exchange rates could impact operating results - The group's revenue, purchases, and expenses are primarily denominated in USD, RMB, EUR, JPY, GBP, SGD, CAD, and HKD[122](index=122&type=chunk) - During the period, the group did not enter into any agreements or purchase any instruments to hedge its exchange rate risk[122](index=122&type=chunk) - Any significant fluctuations in the exchange rates of HKD or RMB could impact the group's operating results[122](index=122&type=chunk) [Financial Guarantees and Contingent Liabilities](index=45&type=section&id=Financial%20Guarantees%20and%20Contingent%20Liabilities) The company provided two financial guarantee agreements for its associates, totaling up to USD 30,000,000, to guarantee debts arising from manufacturing orders, with related provisions assessed as immaterial as of June 30, 2025 - The company entered into a guarantee agreement ("2021 Manufacturer Guarantee Agreement") with an associate, guaranteeing repayment of the associate's due and outstanding debts arising from manufacturing orders placed with designated manufacturers, with a maximum margin of **USD 20,000,000**[123](index=123&type=chunk) - The company entered into a guarantee agreement ("2020 OEM Guarantee Agreement") with an associate and an independent manufacturer, guaranteeing repayment of the associate's due and outstanding debts to the original equipment manufacturer arising from manufacturing orders, with a maximum guarantee amount of **USD 10,000,000**[123](index=123&type=chunk) - As of June 30, 2025, the provisions for the 2021 Manufacturer Guarantee Agreement and the 2020 OEM Guarantee Agreement were assessed as immaterial[123](index=123&type=chunk) [Other Information](index=46&type=section&id=Other%20Information) This section includes disclaimers for non-GAAP measures, details on securities transactions, corporate governance, audit committee review, and publication of results [Disclaimer: Non-GAAP Measures](index=46&type=section&id=Disclaimer%3A%20Non-GAAP%20Measures) The group uses non-GAAP measures like EBITDA to assess performance, but these are not recognized under HK GAAP, may not be comparable, and are provided solely to enhance overall understanding of financial performance - Certain non-GAAP measures, such as EBITDA, are used to assess the group's performance but are not explicitly recognized under HK GAAP and may not be comparable to similar measures used by other companies[125](index=125&type=chunk) - Non-GAAP measures are provided solely to enhance the overall understanding of the group's current financial performance and to provide consistency in financial reporting[125](index=125&type=chunk) [Purchase, Sale or Redemption of Securities](index=46&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20Securities) Neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's shares during the period - During the period, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's shares (including sales of treasury shares)[126](index=126&type=chunk) [Corporate Governance](index=46&type=section&id=Corporate%20Governance) The company's corporate governance practices adhere to the principles and code provisions of the Corporate Governance Code in Appendix C1 of the Listing Rules, with full compliance throughout the period - The company's corporate governance practices are established in accordance with the principles and code provisions of the Corporate Governance Code set out in Appendix C1 of the Listing Rules[127](index=127&type=chunk) - The company applied the principles and fully complied with all applicable code provisions during the six months ended June 30, 2025[127](index=127&type=chunk) - The Board regularly reviews and monitors the company's policies and practices regarding corporate governance or compliance with laws and regulations, and provides ongoing training for directors and senior management[127](index=127&type=chunk) [Audit Committee Review of 2025 Interim Results](index=47&type=section&id=Audit%20Committee%20Review%20of%202025%20Interim%20Results) The company's Audit Committee has reviewed the unaudited interim condensed consolidated results for the six months ended June 30, 2025 - The company's Audit Committee has reviewed the unaudited interim condensed consolidated results for the six months ended June 30, 2025[128](index=128&type=chunk) [Publication of Results Announcement and Interim Report](index=47&type=section&id=Publication%20of%20Results%20Announcement%20and%20Interim%20Report) The 2025 interim results announcement has been published on the company's and HKEX websites, and the interim report will be published and dispatched to shareholders in due course - The 2025 interim results announcement has been published on the company's website www.hisun.com.hk and the HKEX website www.hkexnews.hk[129](index=129&type=chunk) - The company's 2025 interim report will be published on the aforementioned websites and dispatched to the company's shareholders in due course[129](index=129&type=chunk)

Interim Results Announcement [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=1&type=section&id=簡明綜合損益及其他全面收益表) The company significantly narrowed its loss during the reporting period, primarily due to a substantial reduction in net fair value losses on financial assets at fair value through profit or loss, despite an increase in general and administrative expenses Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the Six Months Ended June 30) | Indicator | For the Six Months Ended June 30, 2025 (HKD) | For the Six Months Ended June 30, 2024 (HKD) | Change (HKD) | | :--- | :--- | :--- | :--- | | Net fair value losses on financial assets at fair value through profit or loss | (4,688,904) | (124,407,119) | 119,718,215 (Loss narrowed) | | Realized gains on disposal of financial assets at fair value through profit or loss | 129,363 | – | 129,363 | | General and administrative expenses | (12,257,082) | (4,062,310) | (8,194,772) (Expense increased) | | Net other income | 115,236 | 3,285,078 | (3,169,842) (Income decreased) | | Finance income | 5,372,132 | 958,654 | 4,413,478 (Income increased) | | Finance costs | (352,696) | – | (352,696) (Cost increased) | | Loss before income tax | (11,681,951) | (124,225,697) | 112,543,746 (Loss narrowed) | | Loss and total comprehensive expense for the period attributable to owners of the Company | (11,681,951) | (124,225,697) | 112,543,746 (Loss narrowed) | | Basic loss per share (HK cents) | (0.40) | (4.28) | 3.88 (Loss narrowed) | | Diluted loss per share (HK cents) | (0.40) | (4.28) | 3.88 (Loss narrowed) | [Condensed Consolidated Statement of Financial Position](index=2&type=section&id=簡明綜合財務狀況報表) As of June 30, 2025, the company's total assets and equity slightly decreased, while total liabilities significantly reduced, indicating a stable financial structure Condensed Consolidated Statement of Financial Position (As of June 30) | Indicator | June 30, 2025 (HKD) | December 31, 2024 (HKD) | Change (HKD) | | :--- | :--- | :--- | :--- | | **Assets** | | | | | Non-current assets | 686,762,064 | 700,058,544 | (13,296,480) | | Current assets | 313,066,845 | 317,280,983 | (4,214,138) | | **Total assets** | 999,828,909 | 1,017,339,527 | (17,510,618) | | **Equity and Liabilities** | | | | | Total equity | 982,444,081 | 994,126,032 | (11,681,951) | | Non-current liabilities | 4,486,918 | 9,327,461 | (4,840,543) | | Current liabilities | 12,897,910 | 13,886,034 | (988,124) | | **Total liabilities** | 17,384,828 | 23,213,495 | (5,828,667) | | **Total equity and liabilities** | 999,828,909 | 1,017,339,527 | (17,510,618) | Notes to the Condensed Consolidated Financial Statements [Basis of Preparation](index=3&type=section&id=1.%20編製基準) The condensed consolidated financial statements are prepared in accordance with HKAS 34 "Interim Financial Reporting" and should be read in conjunction with the 2024 annual financial statements, involving significant management estimates and judgments - The condensed consolidated financial statements are prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" issued by the Hong Kong Institute of Certified Public Accountants[5](index=5&type=chunk) - The preparation of the statements involves significant accounting estimates and judgments by management[5](index=5&type=chunk) [Accounting Policies](index=3&type=section&id=2.%20會計政策) The accounting policies applied by the Group are consistent with the 2024 annual financial statements, with new and revised standards adopted having no material impact on the current period's financial statements - Accounting policies are consistent with the 2024 annual financial statements, except for the adoption of new and revised standards[6](index=6&type=chunk) - Revisions to Hong Kong Financial Reporting Standards adopted in the current period (e.g., Hong Kong Accounting Standard 21 and Hong Kong Financial Reporting Standard 1 "Lack of Exchangeability") have no material impact on the condensed consolidated financial statements[7](index=7&type=chunk) - Standards issued but not yet applied by the Group (e.g., revisions to Hong Kong Financial Reporting Standard 9, 7, 18) are not expected to have a significant impact on the Group's accounting policies[8](index=8&type=chunk) Standards Issued But Not Yet Applied by the Group | Standard | Amendments | Effective Date | | :--- | :--- | :--- | | HKFRS 9 and 7 (Amendments) | Classification and Measurement of Financial Instruments | January 1, 2026 | | HKFRS 9 and 7 (Amendments) | Contracts that rely on natural energy production for electricity | January 1, 2026 | | HKFRS 1, 7, 9, 10 and HKAS 7 (Amendments) | Annual Improvements to HKFRS Standards – Volume 11 | January 1, 2026 | | HKFRS 18 | Presentation and Disclosure in Financial Statements | January 1, 2027 | | HK(IFRIC)-Int 5 (Amendments) | Presentation of Financial Statements – Classification by a Borrower of a Term Loan that Contains a Repayment on Demand Clause | January 1, 2027 | | HKFRS 19 | Disclosure Simplification for Non-Publicly Accountable Subsidiaries | January 1, 2027 | | HKFRS 10 and HKAS 28 (2011) (Amendments) | Sale or Contribution of Assets between an Investor and its Associate or Joint Venture | To be determined | [Segment Information](index=5&type=section&id=3.%20分部資料) The Group's primary business is investing in equity and other financial instruments, with the chief operating decision maker regularly reviewing the investment portfolio as a single "investment holding" operating segment, thus no separate segment information is disclosed - The chief operating decision maker, a non-executive director of the Company, regularly reviews the investment portfolio[9](index=9&type=chunk) - The Group's principal business is investing in equity and other financial instruments, with financial assets at fair value through profit or loss managed and valued on a total return basis[9](index=9&type=chunk) - The Group recognizes only one operating segment, investment holding, and does not disclose separate segment information[9](index=9&type=chunk) - The Group's principal place of business is Hong Kong, and non-current assets (excluding financial assets) and revenue are all located in Hong Kong[10](index=10&type=chunk) [Income Tax Expense](index=5&type=section&id=4.%20所得稅開支) No Hong Kong profits tax provision was made for the current period as the Group did not generate assessable profits, but gains from the disposal of investments in mainland China are subject to a 10% withholding tax - Hong Kong profits tax is calculated at **16.5%**, but no assessable profits were generated in the current period, so no provision was made[11](index=11&type=chunk) - Gains from the disposal of investments in mainland China are subject to a **10%** withholding tax[12](index=12&type=chunk) [Expenses by Nature](index=6&type=section&id=5.%20按性質劃分的開支) During the reporting period, the Group's total general and administrative expenses significantly increased, primarily due to substantial rises in depreciation of right-of-use assets, other staff costs, and other expenses Expenses by Nature (For the Six Months Ended June 30) | Expense Item | For the Six Months Ended June 30, 2025 (HKD) | For the Six Months Ended June 30, 2024 (HKD) | Change (HKD) | | :--- | :--- | :--- | :--- | | Employee benefit expenses – Basic salaries and other benefits | 3,359,306 | 2,834,493 | 524,813 | | Employee benefit expenses – Retirement benefit contributions | 168,307 | 291,353 | (123,046) | | Depreciation of right-of-use assets | 4,959,784 | – | 4,959,784 | | Auditor's remuneration | 184,500 | 180,000 | 4,500 | | Investment management fees | 100,000 | 95,200 | 4,800 | | Legal and professional fees | 278,214 | 139,281 | 138,933 | | Others | 3,206,971 | 521,983 | 2,684,988 | | **Total general and administrative expenses** | **12,257,082** | **4,062,310** | **8,194,772** | [Loss Per Share](index=7&type=section&id=6.%20每股虧損) For the six months ended June 30, 2025, the loss attributable to owners of the Company significantly narrowed, leading to a substantial reduction in basic and diluted loss per share Loss Per Share (For the Six Months Ended June 30) | Indicator | For the Six Months Ended June 30, 2025 (HKD) | For the Six Months Ended June 30, 2024 (HKD) | Change (HKD) | | :--- | :--- | :--- | :--- | | Loss attributable to owners of the Company | (11,681,951) | (124,225,697) | 112,543,746 (Loss narrowed) | | Basic and diluted loss per share (HK cents) | (0.40) | (4.28) | 3.88 (Loss narrowed) | - For the periods ended June 30, 2025 and 2024, the Group had no potential dilutive ordinary shares outstanding, thus the basic loss per share amount was not adjusted for dilution[14](index=14&type=chunk) [Net Asset Value Per Share](index=7&type=section&id=7.%20每%20股資產淨值) As of June 30, 2025, the net asset value per share remained stable, consistent with December 31, 2024, reflecting a slight decrease in total net assets with an unchanged total number of shares Net Asset Value Per Share | Indicator | June 30, 2025 (HKD) | December 31, 2024 (HKD) | Change (HKD) | | :--- | :--- | :--- | :--- | | Net asset value per share | 0.34 | 0.34 | 0.00 | - Net asset value per share is calculated based on the condensed consolidated net assets of **HKD982,444,081** as of June 30, 2025 (December 31, 2024: HKD994,126,032) and 2,902,215,360 issued ordinary shares[16](index=16&type=chunk) [Events After the Reporting Date](index=7&type=section&id=8.%20報告日後事項) As of the date of this announcement, the directors are not aware of any significant events after the reporting date that require disclosure - The directors are not aware of any significant disclosable events occurring after June 30, 2025, and up to the date of this announcement[17](index=17&type=chunk) Management Discussion and Analysis [Overall Performance](index=8&type=section&id=整體表現) During the reporting period, the Group's loss significantly narrowed, primarily due to a substantial reduction in net fair value losses on financial assets, despite an increase in general and administrative expenses - The Group recorded a loss of approximately **HKD11.68 million** for the period, a significant reduction compared to approximately **HKD124.23 million** in the same period last year[19](index=19&type=chunk) - The narrowed loss is mainly attributable to net fair value losses on financial assets at fair value through profit or loss of approximately **HKD4.69 million**, significantly lower than approximately **HKD124.41 million** in the same period last year[19](index=19&type=chunk) - General and administrative expenses increased to approximately **HKD12.26 million**, compared to approximately **HKD4.06 million** in the same period last year[19](index=19&type=chunk) - Interest income was approximately **HKD5.37 million**, compared to approximately **HKD0.96 million** in the same period last year[19](index=19&type=chunk) - As of June 30, 2025, net assets decreased to approximately **HKD982.44 million** (December 31, 2024: approximately HKD994.13 million), with loss per share of approximately **HKD0.40 cents** (same period last year: approximately HKD4.28 cents)[19](index=19&type=chunk) [Liquidity, Financial Resources and Capital Structure](index=8&type=section&id=流%20動%20資%20金、財%20政%20資%20源%20及%20資%20本%20架%20構) The Group adopts a prudent financial management strategy to maintain adequate liquidity and minimize financial risks, with no borrowings, a 0% debt-to-equity ratio, and sufficient cash and cash equivalents, indicating a robust financial position - The Group adopts a prudent financial management strategy aimed at maintaining adequate liquidity and minimizing financial risks[20](index=20&type=chunk) - As of June 30, 2025, the Group had no borrowings, and the debt-to-equity ratio was **0%**[22](index=22&type=chunk) - As of June 30, 2025, cash and cash equivalents were approximately **HKD312.99 million** (December 31, 2024: approximately HKD317.28 million)[22](index=22&type=chunk) - Over half of the retained cash is denominated in USD and deposited with major banks in Hong Kong, resulting in minor foreign exchange fluctuation risk[22](index=22&type=chunk) - The **USD100 million** uncommitted revolving loan facility agreement with China Construction Bank (Asia) was terminated on September 26, 2024[21](index=21&type=chunk) [Pledged Assets, Capital Commitments and Contingent Liabilities](index=9&type=section&id=資%20產%20抵%20押、資%20本%20承%20擔%20及%20或%20然%20負%20債) As of June 30, 2025, the Group had no pledged assets, significant capital commitments, or material contingent liabilities, nor was it involved in any major litigation or arbitration - As of June 30, 2025, the Group had no pledged assets, significant capital commitments, or any material contingent liabilities[23](index=23&type=chunk) - As of June 30, 2025, the Group was not involved in any major litigation or arbitration[23](index=23&type=chunk) [Material Acquisitions and Disposals of Subsidiaries and Associates](index=9&type=section&id=重大收購及出售附屬公司及聯營公司) During the reporting period, the Company did not undertake any material acquisitions or disposals of subsidiaries and associates - During the period, the Company had no material acquisitions or disposals of subsidiaries and associates[24](index=24&type=chunk) [Events After the Reporting Date](index=9&type=section&id=結算日後事項) As of the date of this announcement, the directors are not aware of any significant events after the reporting date that require disclosure - The directors are not aware of any significant disclosable events occurring after the period and up to the date of this announcement[25](index=25&type=chunk) [Investment Details and Review](index=10&type=section&id=投資詳情及回顧) The Group's investment portfolio primarily focuses on logistics infrastructure, supply chain services, advanced manufacturing, and new energy sectors, including unlisted investments Meicai and G7, and listed investments J&T Express, Best Inc., and Jinko Power. Best Inc. completed privatization during the period, and the Group received consideration - The Group is committed to identifying and exploring high-quality investment opportunities, having established an investment footprint in logistics infrastructure and supply chain services, advanced manufacturing, and new energy sectors[28](index=28&type=chunk)[45](index=45&type=chunk) - The Group will leverage China Development Bank's resources in agricultural modernization, logistics infrastructure, and credit to assist investee companies in improving efficiency and expanding business[28](index=28&type=chunk)[45](index=45&type=chunk) Group Investment Details (As of June 30, 2025) | Investee | Market Value/Book Value as of June 30, 2025 (HKD) | Market Value/Book Value as of December 31, 2024 (HKD) | Percentage of Total Assets (June 30, 2025) | | :--- | :--- | :--- | :--- | | B&H Ventures | 86,706,118 | 87,359,226 | 8.7% | | Best Inc | – | 3,428,249 | 0% | | Meicai | 267,496,320 | 279,428,760 | 26.8% | | G7 Connect Inc | 222,175,980 | 223,104,960 | 22.2% | | J&T Express | 90,305,227 | 81,647,646 | 9.0% | - Best Inc. completed privatization on March 10, 2025, and the Group received consideration of approximately **USD478,000** on March 11, 2025, no longer holding its issued share capital[27](index=27&type=chunk)[38](index=38&type=chunk) - B&H Ventures recovered approximately **HKD208 million** from the sale of Jinko Power shares[27](index=27&type=chunk) [Unlisted Investment Review](index=11&type=section&id=未上市投資回顧) The Group's unlisted investments primarily include Meicai and G7, both in logistics and supply chain technology; Meicai has achieved breakeven and continues to grow, while G7 faces challenges from slow industry recovery and is actively integrating resources to enhance competitiveness [Meicai](index=12&type=section&id=Meicai) Meicai, a catering supply chain service provider, has achieved breakeven through business structure optimization and improved synergy, with anticipated sustained growth - Meicai provides catering supply chain related services, reducing costs by shortening agricultural product circulation links and offering one-stop procurement services[29](index=29&type=chunk)[30](index=30&type=chunk) - Meicai has achieved breakeven, with continuously improving financial performance, and is expected to maintain a satisfactory growth rate and become an industry leader[31](index=31&type=chunk) - The Group holds **34,441,169 Series D preferred shares** of Meicai, representing approximately **1.06%** of its issued share capital[29](index=29&type=chunk) [G7](index=12&type=section&id=G7) G7, a leading IoT technology company in China's logistics sector, provides SaaS services and digital solutions; despite slow industry recovery post-pandemic, G7 is actively integrating R&D and sales teams and expanding its product portfolio to enhance competitiveness - G7 is a leading IoT technology company in China, operating the largest IoT smart logistics integrated platform in China, providing SaaS services[32](index=32&type=chunk) - G7 offers full-scenario digital services such as vehicle management, driver safety, and asset services through its big data cloud platform and AI algorithms[32](index=32&type=chunk) - The slow recovery of China's logistics industry after the COVID-19 pandemic has adversely affected G7's revenue growth[33](index=33&type=chunk) - G7 is actively integrating its R&D and sales teams and expanding its product portfolio to assist customers in enhancing their digitalization levels with technological advantages[33](index=33&type=chunk) - The Group holds **39,720,160 Series C preferred shares** of G7, representing approximately **2.92%** of its issued share capital[29](index=29&type=chunk)[32](index=32&type=chunk) [Listed Investment Review](index=13&type=section&id=上市投資回顧) The Group's listed investments include J&T Express, Best Inc., and Jinko Power; J&T Express is listed in Hong Kong, Best Inc. completed privatization, and Jinko Power is listed in Shanghai, all expected to contribute to the Company's performance [J&T Express](index=13&type=section&id=極兔速遞) The Group indirectly and then directly holds J&T Express Class B ordinary shares through the Yimidida merger and reorganization; J&T Express is now listed in Hong Kong and is expected to improve financial performance through overseas business expansion and economies of scale - The Group, through the Yimidida merger and reorganization, completed the closing procedures in January 2022 and directly holds J&T Express Class B ordinary shares via a Yimeter in-specie dividend on March 4, 2024[34](index=34&type=chunk)[35](index=35&type=chunk)[36](index=36&type=chunk) - J&T Express was listed on the Hong Kong Stock Exchange on October 27, 2023, stock code 1519.HK[35](index=35&type=chunk) - As of June 30, 2025, the Company directly holds **13,319,355 Class B ordinary shares** of J&T Express, representing approximately **0.15%** of its issued share capital[29](index=29&type=chunk)[36](index=36&type=chunk) - J&T Express is expected to rapidly improve its financial performance through economies of scale, leveraging its overseas business presence[36](index=36&type=chunk) [Best Inc.](index=14&type=section&id=百世集團) Best Inc., an integrated logistics service provider, completed its privatization in March 2025, and the Group has received consideration and no longer holds its shares - Best Inc. integrates internet, information technology, and traditional logistics services to create a one-stop logistics and supply chain service platform[38](index=38&type=chunk) - Best Inc. completed privatization on March 10, 2025, and the Group received approximately **USD478,000** in consideration on March 11, 2025, no longer owning its issued share capital[27](index=27&type=chunk)[38](index=38&type=chunk) [Jinko Power](index=14&type=section&id=晶科科技) The Group indirectly holds Jinko Power shares through B&H Ventures; Jinko Power is listed on the Shanghai Stock Exchange, with business revenue comparable to the prior year, and is expected to meet expectations in the second half and make a significant contribution to the Company's performance - The Company indirectly holds Jinko Power shares through B&H Ventures, which subscribed for Jinko Solar Power preferred shares in 2014, later converted to Jinko Power ordinary shares[39](index=39&type=chunk)[40](index=40&type=chunk) - Jinko Power completed its A-share initial public offering on the Shanghai Stock Exchange in May 2020, stock code 601778[40](index=40&type=chunk) - As of June 30, 2025, B&H Ventures directly holds approximately **1.00%** equity interest in Jinko Power[27](index=27&type=chunk)[40](index=40&type=chunk) - Jinko Power's business revenue for the current period is comparable to the same period last year, with second-half performance expected to meet expectations and make a significant contribution to the Company's performance[41](index=41&type=chunk) [Employees](index=15&type=section&id=僱%20員) As of June 30, 2025, the Company's employee count increased to 9, with total staff costs rising; remuneration is determined based on market levels, qualifications, and performance, with training provided - As of June 30, 2025, the Company had **9 employees** (June 30, 2024: 6 employees)[42](index=42&type=chunk) - Total staff costs (excluding directors' fees) for the period were approximately **HKD3.53 million** (same period last year: HKD3.13 million)[42](index=42&type=chunk) - Remuneration is determined based on market salary levels, individual qualifications, and performance, and is reviewed regularly[42](index=42&type=chunk) - The Company does not have a share option scheme but provides training to employees[42](index=42&type=chunk) [Gearing Ratio](index=15&type=section&id=資產負債比率) As of June 30, 2025, the Group had no outstanding bank borrowings, and both the current ratio and total liabilities to total assets ratio remained at healthy levels, indicating a robust financial position - As of June 30, 2025, the Group had no outstanding bank borrowings[43](index=43&type=chunk) - The current ratio (current assets to current liabilities) was approximately **2,427%** (December 31, 2024: approximately 2,285%)[43](index=43&type=chunk) - The ratio of total liabilities to total assets was approximately **1.74%** (December 31, 2024: approximately 2.28%)[43](index=43&type=chunk) [Exchange Rate Risk](index=15&type=section&id=匯兌風險) Over half of the Group's retained cash is denominated in USD and held in major Hong Kong banks, resulting in minor exchange rate risk; currently, no foreign currency hedging policy is in place, but it will be closely monitored and considered for hedging - Over half of the retained cash is denominated in USD and deposited with major banks in Hong Kong, with no significant exchange rate risk during the period[44](index=44&type=chunk) - The Group currently has no foreign currency hedging policy but will closely monitor foreign exchange risks and consider hedging when necessary[44](index=44&type=chunk) [Outlook](index=16&type=section&id=展%20望) Looking ahead, the Group will continue to identify high-quality investment opportunities, particularly diversifying investments in logistics, information technology, advanced manufacturing, healthcare, new energy, and energy conservation, while strengthening risk management and operational capabilities to navigate a complex and volatile economic environment - The Company is committed to identifying and exploring high-quality investment opportunities, particularly in logistics infrastructure and supply chain services, advanced manufacturing, and new energy sectors[45](index=45&type=chunk) - The logistics industry is expected to maintain good growth and is a key industry supported by China Development Bank[45](index=45&type=chunk) - The Group will continue to diversify investments across different segments, including logistics, information technology, advanced manufacturing, healthcare, new energy, and energy conservation and environmental protection[46](index=46&type=chunk) - Management will comprehensively strengthen risk management and continuously enhance operational capabilities through improved communication to address uncertainties arising from the volatile global political and economic environment[46](index=46&type=chunk) [Interim Dividend](index=16&type=section&id=中期股息) The directors do not recommend the payment of an interim dividend for the current period - The directors do not recommend the payment of an interim dividend for the current period (June 30, 2024: nil)[47](index=47&type=chunk) Other Information [Audit Committee](index=17&type=section&id=審核委員會) The Audit Committee, comprising four non-executive directors, is responsible for reviewing financial reporting, internal control systems, risk management, and audit procedures, and has reviewed the interim results announcement and financial information for the current period - The Audit Committee comprises four non-executive directors, with Mr Zhang Yilin, an independent non-executive director, serving as Chairman[48](index=48&type=chunk) - The Audit Committee is responsible for reviewing financial reporting, internal control systems, risk management, and audit procedures[48](index=48&type=chunk) - The Audit Committee has reviewed the Group's interim results announcement and interim report for the current period, including the unaudited condensed consolidated interim financial information[48](index=48&type=chunk) [Purchase, Sale or Redemption of Shares](index=17&type=section&id=買賣或贖回股份) During the reporting period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities - During the period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[49](index=49&type=chunk) [Compliance with Corporate Governance Code](index=17&type=section&id=遵守企業管治守則) The Company complied with all code provisions of the Corporate Governance Code during the reporting period, with a deviation due to a vacancy for an executive director, which the Board is actively seeking to fill - The Company has complied with all code provisions of the Corporate Governance Code as set out in Appendix C1 to the Listing Rules throughout the current period[50](index=50&type=chunk) - Deviation: Following the resignation of Mr Bai Zhe as an executive director, the Board has no executive directors, deviating from Code Provision B.1 of Part 2 of the Corporate Governance Code[50](index=50&type=chunk) - The Board is actively seeking suitable candidates to fill the vacancy and will maintain the existing investment policies and strategies until a new executive director is appointed[51](index=51&type=chunk) [Compliance with the Standard Code for Securities Transactions by Directors](index=18&type=section&id=遵守董事進行證券交易之標準守則) Following inquiry by the Company, the directors confirmed compliance with the required standards set out in the Standard Code in Appendix C3 to the Listing Rules throughout the reporting period - The directors confirmed compliance with the required standards set out in the Standard Code in Appendix C3 to the Listing Rules throughout the current period[52](index=52&type=chunk) [Acknowledgements](index=18&type=section&id=致%20謝) The Board of Directors extends its sincere gratitude to external professionals, directors, company employees, and shareholders - The Board expresses its gratitude to external professionals, all directors, company employees, and shareholders for their support and contributions[53](index=53&type=chunk) [Publication of Interim Report](index=18&type=section&id=刊發中期報告) The 2025 Interim Report will be published on the HKEX and Company websites and dispatched to shareholders in due course - The 2025 Interim Report will be published on the HKEX website (www.hkexnews.hk) and the Company's website (www.cdb-intl.com) and dispatched to shareholders in due course[54](index=54&type=chunk)

Financial Performance - For the six months ended June 30, 2025, the group's revenue was HKD 45.0 million, a decrease of 62.8% compared to the same period last year[4] - The group recorded a gross profit of HKD 16.5 million, down from HKD 37.7 million for the same period in 2024[4] - The loss attributable to owners of the company was HKD 30.0 million, compared to a profit of HKD 53.2 million in the previous year[4] - Basic loss per share for the six months ended June 30, 2025, was HKD 1.21, compared to earnings of HKD 2.14 per share in 2024[4] - The group's operating loss for the period was HKD 28.3 million, compared to an operating profit of HKD 53.3 million in the previous year[5] - Other income and net gains for the six months ended June 30, 2025, were HKD 11.7 million, down from HKD 76.9 million in 2024[5] - The group reported a total comprehensive loss of HKD 28,049,000 for the period, which includes a loss of HKD 30,070,000[8] - The group recognized a net revaluation loss of HKD 5.7 million on investment properties, compared to a net gain of HKD 0.6 million last year, attributed to the downturn in the Chinese real estate market[54] - The group recorded a loss attributable to shareholders of HKD 30.0 million, compared to a profit of HKD 53.2 million in the same period last year[58] Equity and Assets - As of June 30, 2025, total equity attributable to owners of the company was HKD 1,611.0 million, slightly down from HKD 1,639.0 million at the end of 2024[4] - The net asset value per share was HKD 0.65, compared to HKD 0.66 at the end of 2024[4] - The group's total assets less current liabilities amounted to HKD 1,653.1 million as of June 30, 2025[7] - The group’s retained earnings decreased to HKD 930,675,000 as of June 30, 2025, down from HKD 960,667,000 at the beginning of the year[8] - The total equity attributable to owners decreased to HKD 1,611,041,000 as of June 30, 2025, from HKD 1,639,012,000 at the beginning of the year[8] Revenue Breakdown - For the six months ended June 30, 2025, total revenue was HKD 44,974,000, with contributions from Information Appliances (HKD 31,860,000) and IDC (HKD 13,114,000)[16] - The company reported a significant decline in revenue from the information appliance business, dropping 65.9% from HKD 93.3 million for the six months ended June 30, 2024, to HKD 31.9 million for the six months ended June 30, 2025[47] - The IDC business experienced a 52.1% decrease in revenue, falling from HKD 27.4 million to HKD 13.1 million during the same period[48] Expenses and Costs - Distribution and selling expenses decreased by 66.6% to HKD 1.0 million, down from HKD 2.9 million, in line with the decline in sales orders[55] - General and administrative expenses decreased by 4.1% to HKD 48.8 million, compared to HKD 50.8 million in the previous year, due to strict cost control measures[55] - Employee costs for the period amounted to HKD 16.2 million, compared to HKD 20.5 million for the same period last year[72] Dividends - The board of directors did not recommend the payment of an interim dividend for the six months ended June 30, 2025[4] - The company did not declare an interim dividend for the six months ended June 30, 2024[26] - The group has not declared an interim dividend for the period, consistent with the previous year[76] Loans and Receivables - The company has a loan receivable of HKD 248,076,000 as of June 30, 2025, with a provision for losses of HKD 218,897,000, resulting in a net receivable of HKD 29,179,000[35] - A loan of HKD 41,000,000 was provided to an independent third party, with an annual interest rate of 8%, and a provision for loan impairment of HKD 37,613,000 was confirmed[36] - A loan of HKD 60,000,000 was extended to an independent third party at an annual interest rate of 5%, with a provision for loan impairment of HKD 51,106,000 confirmed[38] Market and Investment - The company continues to focus on its core businesses, including Information Appliances and IDC, while exploring opportunities for expansion and investment[9] - The company’s investment business benefited from a significant increase in cryptocurrency market prices, leading to realized gains of HKD 2.3 million from digital asset sales[50] - The fair value net gain from financial assets in the investment business was HKD 1.1 million, down from HKD 11.6 million year-on-year[50] Compliance and Governance - The group emphasizes compliance with applicable laws and regulations in China, Hong Kong, and the United States, maintaining adherence throughout the reporting period[74] - The group has established an audit committee consisting of two independent non-executive directors to oversee financial reporting and risk management[81] Employee and Management - The group has 70 full-time employees as of June 30, 2025, down from over 100 employees as of June 30, 2024[72] - The executive directors include Mr. Li Qiang, Mr. Cong Yu, Mr. Shi Guangrong, Mr. Zhu Jiang, and Mr. Chen Biao[84] - Independent non-executive directors are Ms. Shen Yan and Ms. Huo Qiwei[84]

Financial Performance - The company's revenue for the six months ended June 30, 2025, increased by 16.6% to HKD 35.8 million, compared to HKD 30.7 million in 2024[6] - Gross profit for the same period was HKD 11.5 million, with a gross margin of 32.1%, down from 35.1% in 2024[6] - The company achieved a net profit of HKD 3.4 million, recovering from a loss of HKD 6.1 million in 2024, primarily due to a 45.2% reduction in administrative expenses[7] - Revenue for the six months ended June 30, 2025, was HKD 35,771,000, representing a 16.7% increase from HKD 30,704,000 in the same period of 2024[42] - Gross profit for the six months ended June 30, 2025, was HKD 11,483,000, compared to HKD 10,790,000 for the same period in 2024, reflecting a 6.4% increase[42] - The company reported a net profit attributable to owners of HKD 3,353,000 for the six months ended June 30, 2025, compared to a loss of HKD 6,093,000 in the same period of 2024[39] - Operating cash flow generated for the six months ended June 30, 2025, was HKD 1,676,000, a significant improvement from cash used of HKD 11,513,000 in the same period of 2024[40] - The company incurred a loss of HKD 15,131,000 from fair value changes in financial assets for the six months ended June 30, 2024, compared to a loss of HKD 2,815,000 in the same period of 2025[1] - The company recorded a fair value loss of HKD 2,815,000 on listed equity investments during the first half of 2025[55] Cash Flow and Assets - Cash generated from operating activities was HKD 1.7 million, compared to an outflow of HKD 11.5 million in 2024[10] - The company's current assets increased by HKD 7.3 million to HKD 5.5 million, with cash and bank balances at HKD 9.9 million[9] - Cash and cash equivalents increased to HKD 9,923,000 as of June 30, 2025, from HKD 4,051,000 at the end of the same period in 2024[40] - Total assets as of June 30, 2025, were HKD 44,346,000, with total liabilities of HKD 38,537,000, resulting in a net asset value of HKD 5,809,000[45] - Total assets as of June 30, 2025, amounted to HKD 54,667,000, with reported segment assets of HKD 50,372,000[46] - Trade receivables decreased significantly to HKD 9,885,000 as of June 30, 2025, down from HKD 16,739,000 at the end of 2024[56] Liabilities and Equity - The company maintains a total debt level of HKD 31.3 million, similar to HKD 33.1 million as of December 31, 2024[9] - Total liabilities as of June 30, 2025, were HKD 52,211,000, with reported segment liabilities of HKD 31,703,000[46] - The company’s bank loans decreased to HKD 13,293,000 as of June 30, 2025, from HKD 14,436,000 at the end of 2024[58] - The company’s total equity increased to HKD 5,809,000 as of June 30, 2025, compared to HKD 2,456,000 at the beginning of the year[39] Market Outlook and Strategy - The Hong Kong medical equipment market is expected to grow at a rate of 8.3% by 2025 and continue at a CAGR of 7.6% from 2025 to 2030[5] - The company plans to expand its product offerings and strengthen financial resources to participate in suitable public sector project tenders[5] - The company remains optimistic about the Hong Kong medical device market and aims for organic growth through improved business models and increased market penetration[11] Employee and Management - As of June 30, 2025, the company had 20 employees, with employee costs amounting to HKD 1.9 million for the six months ended June 30, 2025, compared to HKD 3.2 million in 2024[19] - The company has implemented a prudent financial management policy, closely monitoring liquidity ratios to meet capital requirements[18] Corporate Governance - The company is committed to maintaining high standards of corporate governance and has complied with the relevant corporate governance code provisions[36] - The audit committee, consisting of three independent non-executive directors, reviewed the interim financial statements, which were not audited but deemed compliant with applicable accounting standards[37] Stock Options and Securities - The total number of stock options available for grant under the plan as of June 30, 2025, is 32,603,682, representing 10% of the issued shares[33] - There were no stock options granted, exercised, expired, or canceled during the six months ended June 30, 2025[27] - The company has a stock option plan that aims to recognize past contributions and incentivize future contributions from eligible participants[25] - The company has not purchased, sold, or redeemed any of its listed securities during the six months ended June 30, 2025[24] - The company has not established a foreign currency hedging policy due to its assets and liabilities being primarily denominated in HKD[17] - The company has not reported any significant foreign exchange risk exposure and will consider hedging measures if necessary[17] Dividends - The company did not declare an interim dividend for the reporting period, consistent with 2024[52] Other Information - No significant capital raising activities or major investments were completed during the six months ended June 30, 2025[12][13] - There were no significant events affecting the company's operations or financial performance after June 30, 2025[60]

Financial Performance - The company reported revenue of HKD 30,704,000 for the six months ended June 30, 2025, compared to HKD 30,704,000 for the same period in 2024, indicating no growth year-over-year[4] - Gross profit for the period was HKD 10,790,000, with a gross margin of approximately 35.1%[4] - The company incurred a loss attributable to owners of HKD 6,093,000, compared to a loss of HKD 4,793,000 in the previous year, reflecting a deterioration in performance[4] - The company reported a revenue growth of 16.6% to HKD 35.8 million for the six months ended June 30, 2025, compared to HKD 30.7 million in 2024[28] - The gross profit for the same period was HKD 11.5 million, with a gross margin of 32.1%, down from 35.1% in 2024[28] - The company achieved a net profit of HKD 3.4 million for the six months ended June 30, 2025, recovering from a loss of HKD 6.1 million in 2024[29] - The company’s basic and diluted loss per share for the period was HKD 1.0 cents, compared to a loss of HKD 1.9 cents per share in the previous year[4] Assets and Liabilities - The total assets as of June 30, 2025, were HKD 44,346,000, while total liabilities were HKD 38,537,000, resulting in a net asset value of HKD 2,456,000[5] - The company’s total liabilities increased from HKD 52,211,000 as of December 31, 2024, to HKD 38,537,000 as of June 30, 2025, indicating a reduction in overall debt[10] - As of June 30, 2025, the group's net current assets increased by HKD 7.3 million to HKD 5.5 million, including cash and bank balances of HKD 9.9 million (December 31, 2024: HKD 8.8 million)[31] - The group's current ratio improved to 1.15 as of June 30, 2025 (December 31, 2024: 1.05)[31] - The total borrowings remained relatively stable at HKD 31.3 million as of June 30, 2025 (December 31, 2024: HKD 33.1 million)[31] Income and Expenses - The company reported other income of HKD 8,471,000, which included rental income of HKD 309,000 and other income of HKD 8,162,000[12] - The financing costs for the period amounted to HKD 486,000, which included interest expenses on bank loans and lease liabilities[13] - Administrative expenses decreased by 45.2% to HKD 4.6 million, down from HKD 8.4 million in 2024, due to effective cost control measures[29] - The fair value loss on listed equity investments was HKD 2.8 million for the six months ended June 30, 2025, compared to HKD 15.1 million in 2024[30] Business Operations - The company’s medical and health business generated external sales of HKD 35,771,000, with a segment profit of HKD 8,662,000[9] - The company has one reportable segment, which is the distribution of medical and health equipment and products, with no new segments introduced during the reporting period[8] - The company has not acquired any property, plant, and equipment during the six months ended June 30, 2025[18] - The Hong Kong medical equipment market is expected to grow at a rate of 8.3% in 2025 and continue at a compound annual growth rate of 7.6% from 2025 to 2030[27] - The company plans to expand its product sources and portfolio while maintaining its market position and providing high-quality services[27] - The group remains optimistic about the Hong Kong medical device market and aims for organic growth through improved business models and increased market penetration[33] Employee and Management - As of June 30, 2025, the group had 20 employees, with employee costs amounting to HKD 1.9 million for the six months ended June 30, 2025 (2024: HKD 3.2 million)[41] - The board of directors is actively seeking suitable candidates to fill the vacant positions of chairman and CEO[58] Corporate Governance - The company is committed to maintaining high standards of corporate governance and has complied with the corporate governance code during the reporting period[58] - The audit committee, composed of three independent non-executive directors, has reviewed the interim financial statements and found them compliant with applicable accounting standards[59] - The company has adopted the standards set out in Appendix C3 of the listing rules to regulate securities trading by directors[57] Stock Options - The stock option plan is effective for 10 years starting from June 30, 2025, subject to early termination provisions[53] - The total number of stock options available for grant as of June 30, 2025, is 32,603,682, representing 10% of the issued shares as of the report date[55] - The board of directors must not grant stock options that would result in any participant holding more than 1% of the total issued shares within any 12-month period without shareholder approval[54] - There are no other share-linked agreements in place during the reporting period or as of June 30, 2025, apart from the stock option plan[56] Financial Management - The group maintained a cautious financial management policy, closely monitoring liquidity ratios to meet capital requirements[40] - The group has not completed any equity fundraising activities during the six months ended June 30, 2025[34] - There were no significant investments or acquisitions during the six months ended June 30, 2025[35] - The group has no significant assets pledged as collateral as of June 30, 2025[37]

Financial Performance - Revenue for the six months ended June 30, 2025, decreased by 17.1% to approximately RMB 672.9 million from approximately RMB 811.3 million in the same period of 2024[4] - Gross profit for the same period decreased by 16.5% to RMB 354.2 million, with a gross margin increase from 52.3% to 52.6%[4] - Profit for the six months ended June 30, 2025, decreased to RMB 48.7 million from RMB 69.1 million in 2024[4] - Basic earnings per share for the period were RMB 0.04, down from RMB 0.06 in the previous year[4] - For the six months ended June 30, 2025, the company's total revenue was RMB 672,943 thousand, a decrease of 17.0% compared to RMB 811,278 thousand for the same period in 2024[22] - Revenue from tea sales was RMB 462,654 thousand, down 19.1% from RMB 571,793 thousand in the previous year[22] - The company reported a net profit of RMB 48,747 thousand for the six months ended June 30, 2025, compared to RMB 69,114 thousand for the same period in 2024, reflecting a decline of 29.5%[22][23] - For the six months ended June 30, 2025, the company's profit attributable to shareholders was RMB 48,747,000, a decrease of 29.5% compared to RMB 69,114,000 for the same period in 2024[34] - The basic earnings per share for the six months ended June 30, 2025, was RMB 0.04, down from RMB 0.06 in 2024, reflecting a decline of 33.3%[34] - Total other income for the six months ended June 30, 2025, was RMB 9,299,000, a decrease of 36.5% from RMB 14,678,000 in 2024[25] - The company incurred income tax expenses of RMB 23,083,000 for the six months ended June 30, 2025, down from RMB 30,705,000 in 2024, reflecting a reduction of 24.8%[27] Assets and Liabilities - Total assets as of June 30, 2025, were RMB 2,951.5 million, slightly down from RMB 2,973.6 million as of December 31, 2024[7] - Total liabilities increased to RMB 1,219.6 million from RMB 1,208.2 million at the end of 2024[7] - Total assets as of June 30, 2025, amounted to RMB 2,951,453 thousand, while total liabilities were RMB 1,219,554 thousand[23] - The total assets for the company as of December 31, 2024, amounted to RMB 2,973,619,000, with total liabilities of RMB 1,208,193,000[24] - The company’s rental liabilities as of June 30, 2025, were RMB 154,268,000, a decrease from RMB 162,679,000 as of December 31, 2024[38] - The company’s total liabilities related to short-term leases amounted to RMB 8,289,000 for the period ending June 30, 2025, down from RMB 12,293,000 in the previous year[39] Cash Flow and Financing - Cash and cash equivalents increased to RMB 542.4 million from RMB 340.5 million at the end of 2024[6] - The net cash inflow from operating activities for the six months ended June 30, 2025, was RMB 292.0 million, while net cash outflow from investing activities was RMB 26.0 million and from financing activities was RMB 63.1 million[69] - The company had long-term bank loans of RMB 15 million, guaranteed by directors, and short-term bank loans of RMB 559.193 million, an increase from RMB 546.380 million as of December 31, 2024[50] - Financing costs rose by 4.3% from RMB 12.0 million for the six months ended June 30, 2024, to RMB 12.5 million for the six months ended June 30, 2025, reflecting an increase in net foreign exchange losses[65] Operational Highlights - The company operates in tea classification, packaging, sales, and related food and beverage sectors primarily in China[8] - The company continues to focus on its core business segments, primarily in tea classification, packaging, and sales, with all sales and operating profits derived from China[19][21] - The company has adjusted its retail network, reducing the number of retail outlets and specialty stores to 1,335 as of June 30, 2025, a net decrease of 14 from 1,349 as of December 31, 2024[52] - The company has established a food research and development department to diversify its product line, including traditional delicacies such as pork floss strips and ready-to-eat bird's nest[52] - The company has strengthened cost control measures, resulting in a reduction in distribution costs and administrative expenses compared to the same period in 2024[52] - The company plans to expand its retail network and optimize its distribution channels, focusing on third and fourth-tier cities to increase market penetration[53] - New product development will focus on tea-related products to align with changing consumer preferences and trends[53] Shareholder Returns - The board declared an interim dividend of HKD 0.02 per share, equivalent to RMB 0.018 per share[4] - The company declared an interim dividend of RMB 19,504,000 for the six months ended June 30, 2025, compared to RMB 29,326,000 for the same period in 2024, representing a decrease of 33.5%[35] - The interim dividend declared is HKD 0.02 per share, equivalent to RMB 0.018, which is 50% of the group's after-tax consolidated profit for the six months ended June 30, 2025[84] Corporate Governance and Compliance - The company has complied with the corporate governance code and has not deviated from any of its provisions during the six months ended June 30, 2025[82] - The audit committee reviewed the group's accounting principles and discussed risk management and internal controls for the six months ended June 30, 2025[86] Employee and Labor Costs - As of June 30, 2025, the group had a total of 3,302 employees, with labor costs amounting to RMB 145.4 million, a decrease from RMB 163.3 million in the same period of 2024[78] - The company did not encounter any significant difficulties in recruitment or experience any major employee turnover during the reporting period[78] Market Position and Recognition - The company received the "Best Practice Award" in the Wind ESG Hong Kong Stock Consumer Goods Industry for 2022 and ranked fourth in the Wind ESG rating distribution for beverages in 2023[52] - The company continues to enhance its brand positioning, having received multiple awards and recognitions in the tea industry, including being named one of the top 10 tea brands in China for 2024[51] - The board believes that the current trading price of the shares does not reflect their intrinsic value, indicating confidence in the long-term business outlook[80]

香 港 交 易 及 結 算 所 有 限 公 司 及 香 港 聯 合 交 易 所 有 限 公 司 對 本 公 告 的 內 容 概 不 負 責，對 其 準 確 性 或 完 整 性 亦 不 發 表 任 何 聲 明，並 明 確 表 示，概 不 對 因 本 公 告 全 部 或 任 何 部 分 內 容 而 產 生 或 因 倚 賴 該 等 內 容 而 引 致 的 任 何 損 失 承 擔 任 何 責 任。 WUXI XDC CAYMAN INC. 藥明合聯生物技術有限公司* （於開曼群島註冊成立的有限公司） （股份代號：2268） 截 至2025年6月30日 止 六 個 月 之 中 期 業 績 公 告 | 財 | 務 | 摘 | 要 | | | | | | | | | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | | | | | | | | | | | | | | | 截 2025年 | 至6月30日 ...

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其準確性 或完整性亦不發表任何聲明，並明確表示，概不就因本公告全部或任何部分內容所產生或因依 賴該等內容而引致的任何損失承擔任何責任。 Jiangxi Rimag Group Co., Ltd 江西一脈陽光集團股份有限公司 （於中華人民共和國註冊成立的股份有限公司） （股份代號：2522） 截至2025年6月30日止六個月的中期業績公告 董事會欣然宣佈本集團截至2025年6月30日止六個月的未經審核簡明綜合中期業 績，連同截至2024年6月30日止六個月的比較數字。 財務摘要 | | 截至6月30日止六個月 | | | | --- | --- | --- | --- | | | 2025年 | 2024年 | 同比變動 | | | 未經審核 | 未經審核 | | | | 人民幣千元 | 人民幣千元 | | | 收入 | 467,049 | 413,713 | 12.9% | | 毛利 | 137,246 | 159,659 | -14.0% | | 期內溢利 | 15,834 | 962 | 1,545.9% | | 本公司擁有人應佔期 ...

[Financial Summary](index=1&type=section&id=Financial%20Summary%20Table) This section provides a concise overview of the group's key financial performance metrics for the six months ended June 30, 2025, compared to the prior year [Financial Summary for the Six Months Ended June 30, 2025](index=1&type=table&id=Financial%20Summary%20for%20the%20Six%20Months%20Ended%20June%2030%2C%202025) | Metric | 2025 (RMB '000) | 2024 (RMB '000) | Percentage Change | | :--- | :--- | :--- | :--- | | Revenue | 1,621,157 | 1,582,285 | +2.5% | | Gross Profit | 703,462 | 709,254 | -0.8% | | Gross Profit Margin | 43.4% | 44.8% | -1.4% | | EBITDA | 293,690 | 262,021 | +12.1% | | EBITDA Margin | 18.1% | 16.6% | +1.5% | | Operating Profit | 122,194 | 100,287 | +21.8% | | Operating Profit Margin | 7.5% | 6.3% | +1.2% | | Profit for the Period | 119,650 | 46,286 | +158.5% | | Profit attributable to owners of the Company | 118,081 | 29,662 | +298.1% | | Basic and Diluted Earnings Per Share | RMB 3.66 cents | RMB 0.92 cents | - | | Proposed/Paid Interim Dividend Per Share | HK 1.2 cents | HK 0.3 cents | +300% | | Proposed/Paid Special Dividend Per Share | HK 3.2 cents | HK 3.2 cents | 0% | | Adjusted EBITDA | 366,450 | 356,172 | +2.9% | | Adjusted EBITDA Margin | 22.6% | 22.5% | +0.1% | | Adjusted Operating Profit | 194,954 | 194,438 | +0.3% | | Adjusted Operating Profit Margin | 12.0% | 12.3% | -0.3% | | Adjusted Profit for the Period | 192,410 | 188,396 | +2.1% | [Condensed Consolidated Financial Statements](index=2&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section presents the group's condensed consolidated financial statements, including the statement of profit or loss, comprehensive income, and financial position [Condensed Consolidated Statement of Profit or Loss](index=2&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) For the six months ended June 30, 2025, the group's revenue increased by 2.5% to RMB 1.621 billion, with profit attributable to owners significantly up by 298.1% to RMB 118 million [Key Data from Condensed Consolidated Statement of Profit or Loss](index=2&type=table&id=Key%20Data%20from%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) | Metric | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | Revenue | 1,621,157 | 1,582,285 | | Gross Profit | 703,462 | 709,254 | | Operating Profit | 122,194 | 100,287 | | Profit Before Tax | 175,568 | 78,999 | | Profit for the Period | 119,650 | 46,286 | | Profit attributable to owners of the Company | 118,081 | 29,662 | | Basic and Diluted Earnings Per Share | RMB 3.66 cents | RMB 0.92 cents | - Profit for the period and profit attributable to owners of the Company significantly increased, primarily due to the recognition of goodwill impairment losses, other asset impairment losses, and impairment provisions for investments in associates in the prior period, with no similar impairment provisions in the reporting period[50](index=50&type=chunk) [Condensed Consolidated Statement of Comprehensive Income](index=3&type=section&id=Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) For the six months ended June 30, 2025, total comprehensive income after tax increased by 70.5% to RMB 95.859 million, despite other comprehensive income turning into a loss [Key Data from Condensed Consolidated Statement of Comprehensive Income](index=3&type=table&id=Key%20Data%20from%20Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) | Metric | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | Profit for the Period | 119,650 | 46,286 | | Other Comprehensive (Loss)/Income for the Period, After Tax | (23,791) | 9,931 | | Total Comprehensive Income for the Period, After Tax | 95,859 | 56,217 | | Total Comprehensive Income attributable to owners of the Company | 84,275 | 38,532 | - Other comprehensive income after tax for the period turned from income in the corresponding period of 2024 to a loss in the corresponding period of 2025, primarily due to currency translation differences of the Company and its non-overseas operations, shifting from an income of RMB 23.240 million to a loss of RMB 21.245 million[7](index=7&type=chunk) [Condensed Consolidated Statement of Financial Position](index=4&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, total assets slightly decreased to RMB 14.805 billion, with a notable shift from cash to fair value financial assets [Key Data from Condensed Consolidated Statement of Financial Position](index=4&type=table&id=Key%20Data%20from%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) | Metric | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | | :--- | :--- | :--- | | Total Assets | 14,804,909 | 15,002,076 | | Non-current Assets | 6,970,443 | 6,838,549 | | Current Assets | 7,834,466 | 8,163,527 | | Total Equity | 13,749,754 | 13,720,356 | | Total Liabilities | 1,055,155 | 1,281,720 | | Cash and Bank Balances | 4,501,462 | 5,562,231 | | Financial Assets at Fair Value Through Profit or Loss (Current) | 1,464,721 | 706,890 | | Trade and Other Receivables | 811,947 | 860,105 | | Trade and Other Payables | 611,226 | 700,879 | - Cash and bank balances within current assets decreased by **RMB 1.06 billion**, while financial assets at fair value through profit or loss (current) increased by **RMB 750 million**[8](index=8&type=chunk) - Total liabilities decreased by **RMB 226 million**, primarily due to a reduction in borrowings, trade and other payables, and contract liabilities within current liabilities[9](index=9&type=chunk) [Notes to the Financial Statements](index=6&type=section&id=Notes%20to%20the%20Financial%20Statements) This section provides detailed notes explaining the basis of preparation, accounting policies, and specific financial statement line items [Basis of Preparation](index=6&type=section&id=Basis%20of%20Preparation) The condensed consolidated interim financial information for the six months ended June 30, 2025, is prepared in accordance with HKAS 34 - The interim financial information is prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" issued by the Hong Kong Institute of Certified Public Accountants[10](index=10&type=chunk) [Accounting Policies](index=6&type=section&id=Accounting%20Policies) New and revised standards adopted during the period had no material impact, and management is assessing future standards - New and revised standards adopted during the reporting period had no material impact on the group's current period results and financial position, requiring no changes to accounting policies or retrospective adjustments[12](index=12&type=chunk) - Management is evaluating several new and revised standards issued but not yet effective, including HKFRS 9, 7, 18, 19, and HKAS 28 amendments, with expected effective dates on or after January 1, 2026[13](index=13&type=chunk)[14](index=14&type=chunk) [Revenue and Segment Information](index=7&type=section&id=Revenue%20and%20Segment%20Information) The group operates in four segments: Flavors and Food Ingredients, Tobacco Raw Materials, Fragrance Raw Materials, and Seasoning, with varied performance across segments - The group's operations are divided into four main operating segments: Flavors and Food Ingredients, Tobacco Raw Materials, Fragrance Raw Materials, and Seasoning[15](index=15&type=chunk)[17](index=17&type=chunk) [Segment Revenue and Results for the Six Months Ended June 30, 2025](index=7&type=table&id=Segment%20Revenue%20and%20Results%20for%20the%20Six%20Months%20Ended%20June%2030%2C%202025) | Segment | Net Revenue (RMB '000) | Segment Results (RMB '000) | | :--- | :--- | :--- | | Flavors and Food Ingredients | 595,730 | 18,766 | | Tobacco Raw Materials | 238,424 | 31,342 | | Fragrance Raw Materials | 405,373 | 61,709 | | Seasoning | 381,630 | 38,930 | | Others | — | (28,553) | | **Total** | **1,621,157** | **122,194** | [Segment Revenue and Results for the Six Months Ended June 30, 2024](index=7&type=table&id=Segment%20Revenue%20and%20Results%20for%20the%20Six%20Months%20Ended%20June%2030%2C%202024) | Segment | Net Revenue (RMB '000) | Segment Results (RMB '000) | | :--- | :--- | :--- | | Flavors and Food Ingredients | 651,838 | 137,858 | | Tobacco Raw Materials | 164,103 | (3,417) | | Fragrance Raw Materials | 376,763 | (16,333) | | Seasoning | 389,072 | 55,457 | | Others | 509 | (73,278) | | **Total** | **1,582,285** | **100,287** | [Other Income and Other Gains – Net](index=10&type=section&id=Other%20Income%20and%20Other%20Gains%20%E2%80%93%20Net) Net other income and gains increased by 28.5% to RMB 85.386 million, driven by gains from subsidiary disposal and foreign exchange [Other Income and Other Gains – Net](index=10&type=table&id=Other%20Income%20and%20Other%20Gains%20%E2%80%93%20Net) | Item | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | Fair value changes of financial assets at fair value through profit or loss | 26,342 | 17,794 | | Gain/(Loss) on disposal of a subsidiary | 13,176 | (2,592) | | Government grants | 52,412 | 68,021 | | Net foreign exchange gain/(loss) | 10,051 | (17,669) | | Fair value changes of previously held interest in an associate upon becoming a subsidiary | (14,296) | (938) | | **Total** | **85,386** | **66,424** | - Gain on disposal of a subsidiary turned from a loss of **RMB 2.592 million** in the prior period to a gain of **RMB 13.176 million** in the reporting period[23](index=23&type=chunk) - Foreign exchange results turned from a loss of **RMB 17.669 million** in the prior period to a gain of **RMB 10.051 million** in the reporting period[23](index=23&type=chunk) [Expenses by Nature](index=10&type=section&id=Expenses%20by%20Nature) Employee and welfare expenses increased by 14.5% to RMB 424.891 million, with a significant rise in inventory impairment provisions [Expenses by Nature](index=10&type=table&id=Expenses%20by%20Nature) | Item | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | Depreciation | 109,980 | 101,672 | | Amortisation | 52,294 | 51,429 | | Impairment provision for inventories | 30,756 | 577 | | Employee and welfare expenses | 424,891 | 370,992 | | Research and development expenses | 125,146 | 121,362 | - Impairment provision for inventories significantly increased from **RMB 577 thousand** in the corresponding period of 2024 to **RMB 30.756 million** in the corresponding period of 2025[24](index=24&type=chunk) - Employee and welfare expenses included in R&D expenses amounted to **RMB 78.917 million**, accounting for **63%** of total R&D expenses[26](index=26&type=chunk) [Income Tax Expense](index=11&type=section&id=Income%20Tax%20Expense) Income tax expense increased by 70.9% to RMB 55.918 million, primarily due to higher profit before tax [Income Tax Expense](index=11&type=table&id=Income%20Tax%20Expense) | Item | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | Current tax: China corporate income tax | 76,378 | 70,178 | | Deferred income tax | (20,800) | (37,702) | | **Total** | **55,918** | **32,713** | - The increase in income tax expense was primarily due to the rise in profit before tax during the reporting period[72](index=72&type=chunk) - The group incurs income tax expenses in Mainland China, Hong Kong, Germany, and Indonesia, with China corporate income tax being the largest component[26](index=26&type=chunk)[27](index=27&type=chunk)[28](index=28&type=chunk) [Earnings Per Share](index=12&type=section&id=Earnings%20Per%20Share) Basic and diluted earnings per share significantly increased to RMB 3.66 cents, reflecting a substantial rise in profit attributable to owners [Earnings Per Share Data](index=12&type=table&id=Earnings%20Per%20Share%20Data) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Profit attributable to owners of the Company (RMB '000) | 118,081 | 29,662 | | Weighted average number of ordinary shares in issue (thousands) | 3,229,927 | 3,229,927 | | Basic Earnings Per Share (RMB cents) | 3.66 | 0.92 | | Diluted Earnings Per Share (RMB cents) | 3.66 | 0.92 | - Both basic and diluted earnings per share significantly increased, consistent with the growth trend in profit attributable to owners of the Company[31](index=31&type=chunk)[32](index=32&type=chunk) - The employee share incentive scheme of Guangdong Jiahao Food Co., Ltd. resulted in an adjustment to the diluted EPS calculation, but some restricted shares were excluded due to their anti-dilutive effect[32](index=32&type=chunk) [Dividends](index=13&type=section&id=Dividends) The Board resolved to declare an interim dividend of HK 1.2 cents and a special dividend of HK 3.2 cents per share for the period [Dividend Distribution](index=13&type=table&id=Dividend%20Distribution) | Item | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | Proposed interim dividend of HK 1.2 cents per share for the six months ended June 30, 2025 | 35,346 | — | | Proposed special dividend of HK 3.2 cents per share for the six months ended June 30, 2025 | 94,257 | — | | Interim dividend paid of HK 0.3 cents per share for the six months ended June 30, 2024 | — | 8,839 | | Special dividend paid of HK 3.2 cents per share for the six months ended June 30, 2024 | — | 94,285 | | **Total** | **129,603** | **103,124** | - The proposed interim dividend for H1 2025 is **HK 1.2 cents per share**, representing a **300% increase** compared to HK 0.3 cents in H1 2024[34](index=34&type=chunk)[102](index=102&type=chunk) - As the interim and special dividends were declared after the reporting date, these payable dividends were not recognized as at June 30, 2025[35](index=35&type=chunk) [Trade and Other Receivables](index=13&type=section&id=Trade%20and%20Other%20Receivables) Net trade and other receivables decreased to RMB 811.947 million, with an increase in impairment provisions for trade receivables [Trade and Other Receivables](index=13&type=table&id=Trade%20and%20Other%20Receivables) | Item | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | | :--- | :--- | :--- | | Trade receivables – net | 559,098 | 642,223 | | Impairment provision for trade receivables | (134,353) | (127,652) | | Bills receivable | 17,034 | 33,751 | | Prepayments and other receivables | 207,706 | 161,448 | | **Total** | **811,947** | **860,105** | - Impairment provision for trade receivables increased from **RMB 127.652 million** as of December 31, 2024, to **RMB 134.353 million** as of June 30, 2025[36](index=36&type=chunk)[37](index=37&type=chunk) - The credit period granted to customers generally ranges from **0 to 180 days**, with the aging of trade receivables primarily concentrated within **0 to 1 year**[37](index=37&type=chunk) [Borrowings](index=14&type=section&id=Borrowings) Total bank borrowings decreased to RMB 155.160 million, with all loans repayable within one year and a decrease in average interest rates [Borrowings Situation](index=14&type=table&id=Borrowings%20Situation) | Item | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | | :--- | :--- | :--- | | Short-term secured bank loans | 22,000 | 18,000 | | Unsecured bank loans | 133,160 | 140,000 | | Current portion of secured bank loans under non-current liabilities | — | 36,000 | | **Total Borrowings** | **155,160** | **194,000** | - The average annual interest rate for secured bank loans decreased from **4.2%** in H1 2024 to **4.0%** in H1 2025[38](index=38&type=chunk) - The average annual interest rate for unsecured bank loans decreased from **2.6%** in H1 2024 to **1.4%** in H1 2025[38](index=38&type=chunk) [Trade and Other Payables](index=15&type=section&id=Trade%20and%20Other%20Payables) Total trade and other payables decreased to RMB 611.226 million, with trade payables primarily aged within 0 to 90 days [Trade and Other Payables](index=15&type=table&id=Trade%20and%20Other%20Payables) | Item | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | | :--- | :--- | :--- | | Trade payables | 264,139 | 266,504 | | Bills payable | 7,271 | — | | Accrued payroll | 114,645 | 166,238 | | Other taxes payable | 39,712 | 54,971 | | Other payables | 174,487 | 202,036 | | Deferred income from government grants | 10,972 | 11,130 | | **Total** | **611,226** | **700,879** | - The non-current portion under trade and other payables primarily refers to deferred income from various government grants from Chinese government agencies[40](index=40&type=chunk) - The credit period granted by suppliers to the group ranges from **0 to 180 days**, with the aging of trade payables primarily concentrated within **0 to 90 days**[40](index=40&type=chunk)[80](index=80&type=chunk) [Reconciliation of HKFRS Measures to Non-HKFRS Measures](index=17&type=section&id=Reconciliation%20of%20HKFRS%20Measures%20to%20Non-HKFRS%20Measures) The group provides adjusted non-HKFRS measures to exclude non-cash items like share-based payments and impairment losses, offering a clearer view of core operating performance - Non-HKFRS measures, such as adjusted EBITDA, operating profit, and profit for the period, aim to exclude non-cash items to provide a clearer perspective on core operating performance[41](index=41&type=chunk) [Reconciliation of Adjusted Financial Measures (Six Months Ended June 30, 2025)](index=17&type=table&id=Reconciliation%20of%20Adjusted%20Financial%20Measures%20(Six%20Months%20Ended%20June%2030%2C%202025)) | Item | As Reported (RMB '000) | Share-based Payment Expenses (RMB '000) | Impairment of Property, Plant and Equipment (RMB '000) | Adjusted (RMB '000) | | :--- | :--- | :--- | :--- | :--- | | EBITDA | 293,690 | 72,390 | 370 | 366,450 | | Operating Profit | 122,194 | 72,390 | 370 | 194,954 | | Profit for the Period | 119,650 | 72,390 | 370 | 192,410 | [Reconciliation of Adjusted Financial Measures (Six Months Ended June 30, 2024)](index=17&type=table&id=Reconciliation%20of%20Adjusted%20Financial%20Measures%20(Six%20Months%20Ended%20June%2030%2C%202024)) | Item | As Reported (RMB '000) | Share-based Payment Expenses (RMB '000) | Goodwill Impairment (RMB '000) | Intangible Assets Impairment (RMB '000) | Impairment of Property, Plant and Equipment (RMB '000) | Impairment Provision for Investments in Associates (RMB '000) | Adjusted (RMB '000) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | EBITDA | 262,021 | 44,653 | 29,309 | 14,380 | 5,809 | — | 356,172 | | Operating Profit | 100,287 | 44,653 | 29,309 | 14,380 | 5,809 | — | 194,438 | | Profit for the Period | 46,286 | 44,653 | 29,309 | 14,380 | 5,809 | 47,959 | 188,396 | [Management Discussion and Analysis](index=19&type=section&id=Management%20Discussion%20and%20Analysis) This section provides management's perspective on the group's operational and financial performance, industry trends, and future outlook [Overview](index=19&type=section&id=Overview) In H1 2025, the group navigated global economic challenges by adopting AI, expanding into Southeast Asia, and enhancing risk management - The global economy faced challenges from high inflation, high interest rates, and supply chain disruptions, leading to weak domestic consumption and intensified market competition[46](index=46&type=chunk) - The group introduced artificial intelligence technology to enhance intelligence and digitalization, and steadily advanced overseas market development by establishing factories in Southeast Asia[46](index=46&type=chunk) - The group strengthened risk management, optimized operational processes, and improved regulations to mitigate operational risks[46](index=46&type=chunk) [Industry Overview](index=20&type=section&id=Industry%20Overview) The tobacco, food, beverage, daily chemical, and seasoning industries face evolving consumer trends and intensified competition, requiring innovation and digital transformation [Tobacco Industry Overview](index=20&type=section&id=Tobacco%20Industry%20Overview) Traditional cigarettes dominate the domestic market, while international companies accelerate investment in new tobacco products like HNB - In H1 2025, cigarette production reached **27.513 million cases**, a **0.8% year-on-year increase**[47](index=47&type=chunk) - International tobacco companies continued to increase investment in technology, production capacity, and market layout for heated-not-burn (HNB) tobacco products, making new smokeless products a core strategic direction for the industry chain[47](index=47&type=chunk) [Food, Beverage, and Daily Chemical Industry Overview](index=20&type=section&id=Food%2C%20Beverage%20and%20Daily%20Chemical%20Industry%20Overview) Increased value-added in related sectors, driven by health, emotional, and rational consumption trends, necessitates R&D and digital marketing upgrades - Value-added of agricultural and sideline food processing industry increased by **7.5% year-on-year**, food manufacturing industry by **6.3% year-on-year**, and liquor, beverage, and refined tea manufacturing industry by **4.7% year-on-year**[48](index=48&type=chunk) - Health consumption, emotional consumption, and rational consumption became major trends in the food and beverage industry, with consumers favoring low-price, high-quality products with health elements and functional properties[48](index=48&type=chunk) - Consumers in the daily chemical industry showed increased demand for natural, environmentally friendly, and additive-free products, with social media and online stores becoming important sales channels[48](index=48&type=chunk) [Seasoning Industry Overview](index=21&type=section&id=Seasoning%20Industry%20Overview) The seasoning industry faces slower growth and intense competition in the catering sector, requiring differentiation and supply chain optimization - National catering industry revenue reached **RMB 27.48 billion**, a **4.3% year-on-year increase**, but the growth rate decreased by **3.6 percentage points** compared to the prior period, indicating a slower growth cycle for the industry[49](index=49&type=chunk) - Seasoning companies need to enhance digital marketing capabilities, expand online sales channels, strengthen product and service differentiation, and improve supply chain management to adapt to changes in the catering industry[49](index=49&type=chunk) [Performance](index=21&type=section&id=Performance) Group revenue grew by 2.5% to RMB 1.621 billion, with profit attributable to owners surging by 298.1% due to lower prior-year impairment provisions [Group Overall Performance Overview](index=21&type=table&id=Group%20Overall%20Performance%20Overview) | Metric | H1 2025 | H1 2024 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Sales Revenue | Approx. RMB 1.621 billion | Approx. RMB 1.582 billion | +2.5% | | Gross Profit Margin | 43.4% | 44.8% | -1.4 percentage points | | Operating Profit | Approx. RMB 122 million | Approx. RMB 100 million | +21.8% | | Profit attributable to owners of the Company | Approx. RMB 118 million | Approx. RMB 29.662 million | +298.1% | | Basic Earnings Per Share | Approx. RMB 3.66 cents | Approx. RMB 0.92 cents | - | - The significant growth in operating profit and profit attributable to owners was primarily due to the recognition of goodwill impairment losses, other asset impairment losses, and impairment provisions for investments in associates in the prior period, with no similar impairment provisions in the reporting period[50](index=50&type=chunk) [Business Review](index=22&type=section&id=Business%20Review) Business segments showed mixed performance, with tobacco raw materials turning profitable, while flavors and food ingredients and seasoning faced challenges [Flavors and Food Ingredients Business Review](index=22&type=section&id=Flavors%20and%20Food%20Ingredients%20Business%20Review) Revenue declined by 8.6% to RMB 596 million, and operating profit significantly decreased due to demand shifts and share incentive termination costs [Flavors and Food Ingredients Business Performance](index=22&type=table&id=Flavors%20and%20Food%20Ingredients%20Business%20Performance) | Metric | H1 2025 | H1 2024 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Sales Revenue | Approx. RMB 596 million | Approx. RMB 652 million | -8.6% | | Proportion of Group's Total Revenue | Approx. 36.7% | 41.2% | -4.5 percentage points | | Operating Profit | Approx. RMB 18.766 million | Approx. RMB 138 million | -86.4% | | Operating Profit Margin | Approx. 3.2% | Approx. 21.1% | -17.9 percentage points | - The decline in operating profit and operating profit margin was primarily due to changes in product sales structure and the recognition of approximately **RMB 70.056 million** in expenses from the termination of the share incentive scheme[51](index=51&type=chunk) - The group actively explored demand for tobacco flavors in Southeast Asian and Middle Eastern markets, strengthened microwave drying, extraction, and encapsulation technologies, and built flavor base modules, while establishing a comprehensive food technology base in Indonesia to expand Southeast Asian market coverage[51](index=51&type=chunk)[52](index=52&type=chunk) [Tobacco Raw Materials Business Review](index=23&type=section&id=Tobacco%20Raw%20Materials%20Business%20Review) Revenue surged by 45.3% to RMB 238 million, achieving profitability driven by overseas sales growth and subsidiary disposal gains [Tobacco Raw Materials Business Performance](index=23&type=table&id=Tobacco%20Raw%20Materials%20Business%20Performance) | Metric | H1 2025 | H1 2024 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Sales Revenue | Approx. RMB 238 million | Approx. RMB 164 million | +45.3% | | Proportion of Group's Total Revenue | Approx. 14.7% | 10.4% | +4.3 percentage points | | Operating Profit | Approx. RMB 31.342 million | Approx. RMB (3.417) million | Turned profitable | | Operating Profit Margin | Approx. 13.1% | - | - | - The segment turned profitable primarily due to increased revenue and gross profit, and the recognition of a **RMB 13.176 million** gain from the disposal of a subsidiary[53](index=53&type=chunk) - The new reconstituted tobacco production base in Indonesia, with an annual capacity of **3,000 tons**, has been fully completed and is supplying international tobacco company customers in bulk[53](index=53&type=chunk) - The tobacco new materials (tobacco capsules) business actively expanded overseas markets, applying technologies such as drip-speed acceleration and optical AI visual inspection to enhance product delivery capabilities and efficiency, and advanced the development of regionally distinctive flavors[54](index=54&type=chunk) [Fragrance Raw Materials Business Review](index=24&type=section&id=Fragrance%20Raw%20Materials%20Business%20Review) Revenue increased by 7.6% to RMB 405 million, with operating profit significantly up due to lower prior-year impairment provisions and cost control [Fragrance Raw Materials Business Performance](index=24&type=table&id=Fragrance%20Raw%20Materials%20Business%20Performance) | Metric | H1 2025 | H1 2024 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Sales Revenue | Approx. RMB 405 million | Approx. RMB 377 million | +7.6% | | Proportion of Group's Total Revenue | Approx. 25.0% | Approx. 23.8% | +1.2 percentage points | | Operating Profit | Approx. RMB 61.709 million | Approx. RMB (16.333) million | Significant growth | - The significant growth in operating profit was primarily due to the recognition of goodwill and asset impairment of approximately **RMB 49.498 million** in the prior period, with no related impairment provisions recognized in the reporting period[55](index=55&type=chunk) - The group successfully developed new domestic customers by controlling costs and enhancing price competitiveness, and implemented "lean production" initiatives at major factories, introducing intelligent management systems to optimize production processes and reduce costs[55](index=55&type=chunk) [Seasoning Business Review](index=24&type=section&id=Seasoning%20Business%20Review) Revenue remained stable at RMB 382 million, but operating profit decreased by 29.8% due to increased sales network expansion costs [Seasoning Business Performance](index=24&type=table&id=Seasoning%20Business%20Performance) | Metric | H1 2025 | H1 2024 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Sales Revenue | Approx. RMB 382 million | Approx. RMB 389 million | Largely stable | | Proportion of Group's Total Revenue | Approx. 23.5% | Approx. 24.6% | -1.1 percentage points | | Operating Profit | Approx. RMB 38.930 million | Approx. RMB 55.457 million | -29.8% | | Operating Profit Margin | Approx. 10.2% | Approx. 14.3% | -4.1 percentage points | - The decline in operating profit and operating profit margin was primarily due to increased expenses for expanding the sales network[56](index=56&type=chunk) - The group launched new Chinese soup base and soy sauce products, enriching its product portfolio, and focused marketing strategies on "catering channel value innovation" through live streaming and "Jinba Fireworks Flavor" series events to interact with customers[57](index=57&type=chunk) - The number of first-tier distributors reached **956**, and the group began deploying products for overseas market sales, formulating preliminary international expansion plans[57](index=57&type=chunk) [R&D Review](index=25&type=section&id=R%26D%20Review) R&D expenses increased by 3.1% to RMB 125 million, maintaining 7.7% of sales revenue, with all expenses recognized as incurred [R&D Expenses Overview](index=25&type=table&id=R%26D%20Expenses%20Overview) | Metric | H1 2025 | H1 2024 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | R&D Expenses | Approx. RMB 125 million | Approx. RMB 121 million | +3.1% | | R&D Expenses as % of Sales Revenue | 7.7% | 7.7% | Stable | - All R&D expenses were recognized as incurred, with no R&D costs capitalized[58](index=58&type=chunk) [Human Resources and Corporate Culture Development](index=25&type=section&id=Human%20Resources%20and%20Corporate%20Culture%20Development) As of June 30, 2025, the group employed 3,910 people globally, a slight decrease from the end of 2024 - As of June 30, 2025, the group employed **3,910 people** across Mainland China, Hong Kong, Germany, Indonesia, Singapore, and other regions, a decrease from **4,056 people** as of December 31, 2024[59](index=59&type=chunk) [Digital Transformation](index=25&type=section&id=Digital%20Transformation) The group rapidly integrated AI technology into operations and management, enhancing efficiency in various business functions - The group's information technology team integrated AI models into internal work systems, completing high-computing power local deployment to improve employee efficiency in information retrieval and problem-solving[60](index=60&type=chunk) - AI technology was applied in areas such as customer visits, knowledge base establishment, intelligent flavor blending, and quality screening, effectively expanding the operational capabilities and efficiency of various business departments[60](index=60&type=chunk) - The group will continue to monitor the development and application of AI technology to enhance corporate management and deepen its application in business areas like flavor blending[61](index=61&type=chunk) [Outlook](index=26&type=section&id=Outlook) The group maintains a cautious outlook for H2 2025, focusing on strategic initiatives like R&D, AI integration, internationalization, and M&A to drive growth - The group maintains a cautious and conservative outlook for the domestic and international economic and operating environment in the second half of the year, anticipating insufficient domestic consumer confidence and intensified competition, along with uncertainties in overseas market tariff policies[62](index=62&type=chunk) - The group will continue to implement eight strategic measures formulated at the beginning of the year, including strengthening R&D innovation, AI empowerment, accelerating international development, enhancing supply chain management, relying on lean production management, strengthening value-creating corporate culture and employee share incentive schemes, achieving dual-wheel drive through acquisitions and mergers, and strengthening communication with capital markets[62](index=62&type=chunk) - Each business segment will pursue targeted development: Flavors and Food Ingredients will focus on health and natural products; Tobacco Raw Materials will increase overseas market development and investment in new tobacco products; Fragrance Raw Materials will continue to develop new products and reduce costs and increase efficiency; Seasoning will broaden product categories, develop compound seasonings, and strengthen brand building and overseas deployment[63](index=63&type=chunk) [Review of Financial Position](index=27&type=section&id=Review%20of%20Financial%20Position) This section reviews the group's financial performance, including revenue, costs, profitability, and financial resources [Revenue](index=27&type=section&id=Revenue) Group revenue increased by 2.5% to RMB 1.621 billion, primarily driven by tobacco raw materials and fragrance raw materials segments [Revenue Year-on-Year Change](index=27&type=table&id=Revenue%20Year-on-Year%20Change) | Metric | H1 2025 (RMB '000) | H1 2024 (RMB '000) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Total Revenue | 1,621,157 | 1,582,285 | +2.5% | | Tobacco Raw Materials Segment Revenue | 238,424 | 164,103 | +45.3% | | Fragrance Raw Materials Segment Revenue | 405,373 | 376,763 | +7.6% | | Flavors and Food Ingredients Segment Revenue | 595,730 | 651,838 | -8.6% | - Revenue growth was primarily driven by the rapid growth of overseas business in new tobacco materials and the release of production capacity and new customer acquisition in the fragrance raw materials segment[64](index=64&type=chunk) [Cost of Sales](index=27&type=section&id=Cost%20of%20Sales) Cost of sales increased by 5.1% to RMB 917.695 million for the six months ended June 30, 2025 [Cost of Sales Year-on-Year Change](index=27&type=table&id=Cost%20of%20Sales%20Year-on-Year%20Change) | Metric | H1 2025 (RMB '000) | H1 2024 (RMB '000) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Cost of Sales | 917,695 | 873,031 | +5.1% | [Gross Profit and Gross Profit Margin](index=27&type=section&id=Gross%20Profit%20and%20Gross%20Profit%20Margin) Gross profit slightly decreased by 0.8% to RMB 703.462 million, with gross profit margin declining by 1.4 percentage points to 43.4% [Gross Profit and Gross Profit Margin Year-on-Year Change](index=27&type=table&id=Gross%20Profit%20and%20Gross%20Profit%20Margin%20Year-on-Year%20Change) | Metric | H1 2025 (RMB '000) | H1 2024 (RMB '000) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Gross Profit | 703,462 | 709,254 | -0.8% | | Gross Profit Margin | 43.4% | 44.8% | -1.4 percentage points | - The decline in gross profit margin was primarily due to intensified market competition and changes in the group's product mix[66](index=66&type=chunk) [Other Income and Other Gains – Net](index=28&type=section&id=Other%20Income%20and%20Other%20Gains%20%E2%80%93%20Net) Net other income and gains increased by RMB 18.962 million to RMB 85.386 million, driven by gains from subsidiary disposal and foreign exchange [Other Income and Other Gains – Net Year-on-Year Change](index=28&type=table&id=Other%20Income%20and%20Other%20Gains%20%E2%80%93%20Net%20Year-on-Year%20Change) | Item | H1 2025 (RMB '000) | H1 2024 (RMB '000) | Change (RMB '000) | | :--- | :--- | :--- | :--- | | Other income and other gains (net) | 85,386 | 66,424 | +18,962 | | Gain/(Loss) on disposal of a subsidiary | 13,176 | (2,592) | +15,768 | | Net foreign exchange gain/(loss) | 10,051 | (17,669) | +27,720 | | Government grants | 52,412 | 68,021 | -15,609 | | Fair value changes of previously held interest in an associate upon becoming a subsidiary | (14,296) | (938) | -13,358 | - The gain on disposal of a subsidiary turning from a loss in the prior period to a gain in the reporting period, and foreign exchange turning from a loss to a gain, were the main drivers of growth[67](index=67&type=chunk) [Selling and Marketing Expenses](index=28&type=section&id=Selling%20and%20Marketing%20Expenses) Selling and marketing expenses increased by 15.6% to RMB 191.158 million, primarily due to expansion of overseas operations [Selling and Marketing Expenses Year-on-Year Change](index=28&type=table&id=Selling%20and%20Marketing%20Expenses%20Year-on-Year%20Change) | Metric | H1 2025 (RMB '000) | H1 2024 (RMB '000) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Selling and Marketing Expenses | 191,158 | 165,416 | +15.6% | | As % of Total Revenue | Approx. 11.8% | Approx. 10.5% | +1.3 percentage points | - The increase in expenses was primarily due to the group's expansion and development of overseas business, leading to an increase in sales and marketing staff and related expenses[68](index=68&type=chunk) [Administrative Expenses](index=28&type=section&id=Administrative%20Expenses) Administrative expenses increased by 3.0% to RMB 472.163 million, mainly due to higher share-based payment expenses [Administrative Expenses Year-on-Year Change](index=28&type=table&id=Administrative%20Expenses%20Year-on-Year%20Change) | Metric | H1 2025 (RMB '000) | H1 2024 (RMB '000) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Administrative Expenses | 472,163 | 458,285 | +3.0% | | Share-based Payment Expenses | 69,859 | 42,578 | +27,281 | | As % of Total Revenue | Approx. 29.1% | 29.0% | Stable | - The increase in administrative expenses was primarily due to the termination of the first phase of the restricted share incentive scheme by subsidiary HuaBao Flavours & Fragrances Co., Ltd., resulting in accelerated vesting treatment and increased recognition of share-based payment expenses[69](index=69&type=chunk) [Operating Profit](index=29&type=section&id=Operating%20Profit) Operating profit increased by 21.8% to RMB 122.194 million, driven by higher other income and reduced impairment provisions [Operating Profit Year-on-Year Change](index=29&type=table&id=Operating%20Profit%20Year-on-Year%20Change) | Metric | H1 2025 (RMB '000) | H1 2024 (RMB '000) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Operating Profit | 122,194 | 100,287 | +21.8% | | Adjusted Operating Profit | 194,954 | 194,438 | +0.3% | | Adjusted Operating Profit Margin | Approx. 12.0% | Approx. 12.3% | -0.3 percentage points | - The increase in operating profit was primarily due to increased net other income and other gains, reduced impairment provisions for receivables, reduced impairment provisions for property, plant and equipment, and the impact of goodwill impairment and intangible asset impairment provisions recognized in the prior period[70](index=70&type=chunk) - The adjusted operating profit margin decreased by **0.3 percentage points**, mainly due to the decline in gross profit margin during the reporting period[71](index=71&type=chunk) [Tax Expense](index=29&type=section&id=Tax%20Expense) Tax expense increased by RMB 23.205 million to RMB 55.918 million, primarily due to higher profit before tax [Tax Expense Year-on-Year Change](index=29&type=table&id=Tax%20Expense%20Year-on-Year%20Change) | Metric | H1 2025 (RMB '000) | H1 2024 (RMB '000) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Tax Expense | 55,918 | 32,713 | +70.9% | - The increase in tax expense was primarily due to the rise in profit before tax during the reporting period[72](index=72&type=chunk) [Profit for the Period](index=30&type=section&id=Profit%20for%20the%20Period) Profit for the period surged by 158.5% to RMB 119.650 million, mainly due to increased other income and reduced impairment provisions [Profit for the Period Year-on-Year Change](index=30&type=table&id=Profit%20for%20the%20Period%20Year-on-Year%20Change) | Metric | H1 2025 (RMB '000) | H1 2024 (RMB '000) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Profit for the Period | 119,650 | 46,286 | +158.5% | | Adjusted Profit for the Period | 192,410 | 188,396 | +2.1% | - The significant increase in profit was primarily attributable to increased net other income and other gains, reduced impairment provisions for receivables, reduced impairment provisions for property, plant and equipment, increased net finance income, and the impact of goodwill impairment, intangible asset impairment provisions, and impairment provisions for investments in associates recognized in the prior period[73](index=73&type=chunk) [Net Current Assets and Financial Resources](index=30&type=section&id=Net%20Current%20Assets%20and%20Financial%20Resources) Net current assets slightly decreased to RMB 6.911 billion, with a shift from cash to bank wealth management products and long-term deposits [Net Current Assets and Financial Resources](index=30&type=table&id=Net%20Current%20Assets%20and%20Financial%20Resources) | Item | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | | :--- | :--- | :--- | | Net Current Assets | 6,910,690 | 7,034,542 | | Cash and Bank Balances | 4,501,462 | 5,562,231 | | Bank Wealth Management Products (Financial assets at fair value through profit or loss) | 1,372,909 | 649,498 | | Long-term Bank Deposits (Other non-current assets) | 253,684 | 51,435 | - The group primarily funds its operations through operating activities, maintaining a sound financial position[75](index=75&type=chunk) - Over **74%** of cash and bank balances are held in RMB[75](index=75&type=chunk) [Bank Borrowings and Gearing Ratio](index=31&type=section&id=Bank%20Borrowings%20and%20Gearing%20Ratio) Total bank borrowings decreased to RMB 155.160 million, with a lower gearing ratio of 1.3% and reduced average interest rates [Bank Borrowings and Gearing Ratio](index=31&type=table&id=Bank%20Borrowings%20and%20Gearing%20Ratio) | Metric | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | | :--- | :--- | :--- | | Total Bank Borrowings | 155,160 | 194,000 | | Secured Borrowings | 22,000 | 54,000 | | Unsecured Borrowings | 133,160 | 140,000 | | Gearing Ratio | 1.3% | 1.6% | - The average annual interest rate for secured borrowings was **4.0%** (H1 2024: 4.2%), and for unsecured borrowings was **1.4%** (H1 2024: 2.6%), both showing a decrease[76](index=76&type=chunk) [Investing Activities](index=31&type=section&id=Investing%20Activities) Net cash used in investing activities was RMB 909.004 million, primarily for purchasing bank wealth management products and long-term deposits [Investing Activities Cash Flow](index=31&type=table&id=Investing%20Activities%20Cash%20Flow) | Metric | H1 2025 (RMB '000) | H1 2024 (RMB '000) | | :--- | :--- | :--- | | Net Cash Used in Investing Activities | 909,004 | (39,886) | - Investing activities primarily include purchases of property, plant and equipment; investments in financial assets; and acquisition activities related to strategic development strategies[77](index=77&type=chunk) - Net cash outflow from investing activities during the reporting period was mainly due to the purchase of bank wealth management products and deposits into long-term bank accounts[77](index=77&type=chunk) [Financing Activities](index=31&type=section&id=Financing%20Activities) Net cash used in financing activities was RMB 301.080 million, mainly for repaying bank loans and paying dividends [Financing Activities Cash Flow](index=31&type=table&id=Financing%20Activities%20Cash%20Flow) | Metric | H1 2025 (RMB '000) | H1 2024 (RMB '000) | | :--- | :--- | :--- | | Net Cash Used in Financing Activities | 301,080 | 444,621 | - This primarily included repayment of bank loans of **RMB 227 million**, cash dividends paid to shareholders of **RMB 147.998 million**, cash dividends paid to non-controlling interests of **RMB 31.171 million**, and new bank loans of **RMB 126.260 million**[78](index=78&type=chunk) [Trade Receivables Turnover Days](index=31&type=section&id=Trade%20Receivables%20Turnover%20Days) Average trade receivables turnover days remained stable at 81 days for the six months ended June 30, 2025 [Trade Receivables Turnover Days](index=31&type=table&id=Trade%20Receivables%20Turnover%20Days) | Metric | H1 2025 (Days) | H1 2024 (Days) | | :--- | :--- | :--- | | Average Trade Receivables Turnover Days | 81 | 83 | - The group generally grants customers a credit period of approximately **0 to 180 days**, depending on the customer's business volume and length of business relationship[79](index=79&type=chunk) [Trade Payables Turnover Days](index=31&type=section&id=Trade%20Payables%20Turnover%20Days) Average trade payables turnover days remained stable at 52 days for the six months ended June 30, 2025 [Trade Payables Turnover Days](index=31&type=table&id=Trade%20Payables%20Turnover%20Days) | Metric | H1 2025 (Days) | H1 2024 (Days) | | :--- | :--- | :--- | | Average Trade Payables Turnover Days | 52 | 51 | - Suppliers grant the group a credit period ranging from **0 to 180 days**[80](index=80&type=chunk) [Inventories and Inventory Turnover Days](index=32&type=section&id=Inventories%20and%20Inventory%20Turnover%20Days) Inventory balance increased to RMB 916.336 million, while inventory turnover days decreased to 177 days due to lower average inventory and higher cost of sales [Inventories and Inventory Turnover Days](index=32&type=table&id=Inventories%20and%20Inventory%20Turnover%20Days) | Metric | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | | :--- | :--- | :--- | | Inventory Balance | 916,336 | 893,330 | | Inventory Turnover Days (Days) | 177 | 209 (Prior Period) | - The decrease in inventory turnover days was primarily due to a decrease in the average inventory balance compared to the prior period, while the cost of sales increased year-on-year in the reporting period[81](index=81&type=chunk) [Foreign Exchange and Exchange Rate Risk](index=32&type=section&id=Foreign%20Exchange%20and%20Exchange%20Rate%20Risk) The group's revenue is primarily RMB-denominated, with limited foreign currency exposure from imported raw materials and equipment - The group's principal operations are in Mainland China, with the vast majority of revenue settled in RMB, and only a portion of imported raw materials and equipment settled in foreign currencies such as USD or EUR[82](index=82&type=chunk) - Management agrees with the People's Bank of China's view that the RMB exchange rate has the conditions to remain generally stable within a reasonable and balanced range[82](index=82&type=chunk) [Pledge of Assets](index=32&type=section&id=Pledge%20of%20Assets) As of June 30, 2025, certain properties, right-of-use assets, and intangible assets totaling RMB 25.504 million were pledged for secured bank loans [Pledge of Assets Situation](index=32&type=table&id=Pledge%20of%20Assets%20Situation) | Item | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | | :--- | :--- | :--- | | Total Book Value of Pledged Assets | 25,504 | 43,063 | | Secured Bank Loans | 22,000 | 54,000 | - Pledged assets include properties, right-of-use assets, and intangible assets of Hunan Jiapin Jiawei Technology Development Group Co., Ltd. and its subsidiaries[83](index=83&type=chunk) [Capital Commitments](index=32&type=section&id=Capital%20Commitments) Capital commitments for contracted purchases of property, plant, equipment, and investments increased to RMB 116.093 million [Capital Commitments](index=32&type=table&id=Capital%20Commitments) | Metric | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | | :--- | :--- | :--- | | Capital Commitments | 116,093 | 97,854 | [Contingent Liabilities](index=32&type=section&id=Contingent%20Liabilities) As of June 30, 2025, the group had no significant contingent liabilities - As of June 30, 2025, the group had no significant contingent liabilities based on information available to the Board[85](index=85&type=chunk) [Other Significant Matters](index=33&type=section&id=Other%20Significant%20Matters) This section covers key events and disclosures, including the use of subsidiary IPO proceeds, termination of a share incentive scheme, and profit guarantee issues [Use of Proceeds from Subsidiary](index=33&type=section&id=Use%20of%20Proceeds%20from%20Subsidiary) HuaBao Flavours & Fragrances Co., Ltd. (HuaBao) utilized RMB 953 million of its IPO proceeds, with project timelines adjusted to align with actual progress - HuaBao Flavours & Fragrances Co., Ltd.'s IPO raised a total of approximately **RMB 2.377 billion**, with net proceeds of approximately **RMB 2.312 billion** after deducting issuance expenses[86](index=86&type=chunk) [Overview of HuaBao IPO Proceeds Utilization](index=33&type=table&id=Overview%20of%20HuaBao%20IPO%20Proceeds%20Utilization) | Project | Unused Proceeds as of Dec 31, 2024 (RMB million) | Proceeds Used in H1 2025 (RMB million) | Unused Proceeds as of June 30, 2025 (RMB million) | | :--- | :--- | :--- | :--- | | HuaBao Sci-Tech Innovation Center Project | 439.82 | 0.80 | 439.02 | | HuaBao Digital Transformation Project | 31.19 | 0.99 | 30.20 | | Unused Proceeds Special Account | 889.56 | — | 889.56 | | **Total** | **1,360.57** | **1.79** | **1,358.78** | - The expected completion date for the HuaBao Sci-Tech Innovation Center Project has been extended to **June 30, 2029**, and the HuaBao Digital Transformation Project to **December 31, 2026**, to accommodate land procedures and actual project progress[88](index=88&type=chunk)[89](index=89&type=chunk) [Termination of Subsidiary's Share Incentive Scheme](index=36&type=section&id=Termination%20of%20Subsidiary%27s%20Share%20Incentive%20Scheme) HuaBao's share incentive scheme was terminated, leading to accelerated vesting treatment and a RMB 70.06 million share-based payment expense in H1 2025 - The Board of Directors and shareholders of HuaBao Flavours & Fragrances Co., Ltd. have approved the termination of its share incentive scheme[91](index=91&type=chunk) - Upon termination, all unvested restricted shares will not vest and will be subject to accelerated vesting treatment in accordance with relevant HKFRS provisions[92](index=92&type=chunk) - This termination resulted in the recognition of approximately **RMB 70.06 million** in share-based payment expenses in H1 2025, with the final impact on the net profit of the Company and HuaBao subject to final audit results[92](index=92&type=chunk) [Disclosure Regarding Failure to Meet Profit Guarantee under Listing Rule 14.36B](index=36&type=section&id=Disclosure%20Regarding%20Failure%20to%20Meet%20Profit%20Guarantee%20under%20Listing%20Rule%2014.36B) Shanghai Yifang Agricultural Technology Co., Ltd. failed to meet its profit guarantee, leading HuaBao to initiate arbitration for compensation of RMB 606 million - HuaBao Flavours & Fragrances Co., Ltd. acquired a **27% equity interest** in Shanghai Yifang Agricultural Technology Co., Ltd. in 2022, making it an indirect non-wholly owned subsidiary[94](index=94&type=chunk) [Shanghai Yifang Performance Commitment vs. Actual Net Loss](index=36&type=table&id=Shanghai%20Yifang%20Performance%20Commitment%20vs.%20Actual%20Net%20Loss) | Year | Committed Net Profit (RMB '000) | Actual Net Loss (RMB '000) | Performance Difference (RMB '000) | | :--- | :--- | :--- | :--- | | 2022 | Not less than 41,000 | 42,195.6 | 83,195.6 | | 2023 | Not less than 55,000 | 65,755.9 | 120,755.9 | | 2024 | Not less than 74,000 | 70,036.0 | 144,036.0 | - As Shanghai Yifang failed to meet its performance commitment, HuaBao has submitted an arbitration application to the Shanghai International Arbitration Center, demanding Qian Rong and Huang Jinrong pay performance compensation of approximately **RMB 606 million**, with the total arbitration claim temporarily amounting to **RMB 636 million**[97](index=97&type=chunk) - As of the announcement date, the arbitration hearing process has not yet commenced, and the group cannot accurately predict the final outcome or assess the impact on its financial position[98](index=98&type=chunk) [Events After Reporting Period](index=39&type=section&id=Events%20After%20Reporting%20Period) No significant events occurred after the reporting period, other than those already disclosed in this announcement - No significant events occurred after the reporting period[99](index=99&type=chunk) [Corporate Governance](index=39&type=section&id=Corporate%20Governance) This section details the company's adherence to corporate governance principles, including compliance with the code and director's securities transactions [Compliance with Corporate Governance Code](index=39&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) The company generally complied with the Corporate Governance Code, with an exception for the combined roles of Chairman and CEO - The Company has complied with the Corporate Governance Code set out in Appendix C1 of the Listing Rules, but did not fully comply with Code Provision C.2.1 regarding the segregation of roles between the Chairman and Chief Executive Officer[100](index=100&type=chunk) - Ms. Zhu Linyao, the Chairman of the Board and Executive Director, has also served as the Chief Executive Officer since April 9, 2013, and the Board believes this arrangement does not undermine the balance of power and authority[100](index=100&type=chunk) [Model Code for Securities Transactions by Directors of Listed Issuers](index=39&type=section&id=Model%20Code%20for%20Securities%20Transactions%20by%20Directors%20of%20Listed%20Issuers) The company adopted and confirmed compliance with the Model Code for Securities Transactions by Directors of Listed Issuers during the reporting period - The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 of the Listing Rules and confirmed that the directors have complied with the said code for the six months ended June 30, 2025[101](index=101&type=chunk) [Interim and Special Dividends](index=39&type=section&id=Interim%20and%20Special%20Dividends) The Board declared an interim dividend of HK 1.2 cents and a special dividend of HK 3.2 cents per share, payable on October 10, 2025 [Interim and Special Dividend Declaration](index=39&type=table&id=Interim%20and%20Special%20Dividend%20Declaration) | Dividend Type | 2025 (Per Share) | 2024 (Per Share) | | :--- | :--- | :--- | | Interim Dividend | HK 1.2 cents | HK 0.3 cents | | Special Dividend | HK 3.2 cents | HK 3.2 cents | - The interim and special dividends are expected to be paid on **October 10, 2025**, to shareholders whose names appear on the Company's register of members on **September 19, 2025**[102](index=102&type=chunk) [Closure of Register of Members](index=40&type=section&id=Closure%20of%20Register%20of%20Members) The register of members will be closed from September 16 to September 19, 2025, to determine eligibility for interim and special dividends - The register of members will be closed from **September 16 to September 19, 2025** (both dates inclusive), to determine shareholders' eligibility for the interim and special dividends[103](index=103&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=40&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) Neither the company nor its subsidiaries purchased, sold, or redeemed any listed securities during the reporting period - During the six months ended June 30, 2025, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[104](index=104&type=chunk) - As of June 30, 2025, the Company did not hold any treasury shares[104](index=104&type=chunk) [Audit Committee](index=40&type=section&id=Audit%20Committee) The Audit Committee, comprising independent non-executive directors, reviewed and approved the unaudited condensed consolidated interim financial information - The Audit Committee comprises Mr. Li Luk Shiu, Mr. Jonathan Jun YAN, and Mr. Hou Haitao, all of whom are independent non-executive directors[105](index=105&type=chunk) - The Audit Committee has reviewed and approved the unaudited condensed consolidated interim financial information of the group for the six months ended June 30, 2025[105](index=105&type=chunk) [Publication of Interim Results and Interim Report](index=40&type=section&id=Publication%20of%20Interim%20Results%20and%20Interim%20Report) The interim results announcement is available on HKEX and the company's website, with the interim report to follow - This interim results announcement has been published on the website of The Stock Exchange of Hong Kong Limited (www.hkexnews.hk) and the Company's website (www.hbglobal.com)[106](index=106&type=chunk) - The Company's 2025 interim report will be dispatched to shareholders and published on the aforementioned websites in due course[106](index=106&type=chunk)

[Report Overview](index=1&type=section&id=ReportOverview) This section provides a high-level summary of the company's financial performance and key balance sheet items for the interim period [Financial Summary (Summary Table)](index=1&type=section&id=FinancialSummaryTable) PAX Global Technology reported a 9.9% revenue decrease to **HKD 2.716 billion** and a 14.9% profit decline to **HKD 391 million** for the six months ended June 30, 2025 Financial Summary for the Six Months Ended June 30 | Metric | 2025 (HKD Thousands) | 2024 (HKD Thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 2,716,164 | 3,013,241 | -9.9% | | Gross Profit | 1,272,545 | 1,409,236 | -9.7% | | Operating Profit | 470,997 | 537,525 | -12.4% | | Profit for the Period | 391,351 | 459,760 | -14.9% | | Profit Attributable to Owners of the Company | 390,877 | 454,583 | -14.0% | | R&D Costs | (305,174) | (304,219) | +0.3% | | Basic EPS (HKD) | 0.369 | 0.425 | -13.2% | | Diluted EPS (HKD) | 0.363 | 0.416 | -12.7% | | Interim Dividend per Ordinary Share (HKD) | 0.25 | 0.24 | +4.2% | Key Balance Sheet Items (As of June 30) | Metric | 2025 (HKD Thousands) | 2024 (HKD Thousands) | Change (%) | | :--- | :--- | :--- | :--- | | **Assets** | | | | | Total Current Assets | 7,708,931 | 7,646,119 | +0.8% | | Total Assets | 9,208,715 | 9,169,505 | +0.4% | | **Equity** | | | | | Net Current Assets | 6,400,937 | 6,130,960 | +4.4% | | Total Equity | 7,805,146 | 7,564,587 | +3.2% | [Financial Statements](index=2&type=section&id=FinancialStatements) This section presents the interim condensed consolidated statements of profit or loss, comprehensive income, and financial position [Interim Condensed Consolidated Statement of Profit or Loss](index=2&type=section&id=InterimCondensedConsolidatedStatementOfProfitOrLoss) Revenue decreased by **9.9%** to **HKD 2.716 billion**, with operating profit and profit for the period declining by **12.4%** and **14.9%** respectively, driven by revenue reduction and increased other losses Key Data from Interim Condensed Consolidated Statement of Profit or Loss | Metric | 2025 (HKD Thousands) | 2024 (HKD Thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 2,716,164 | 3,013,241 | -9.9% | | Cost of Sales | (1,443,619) | (1,604,005) | -9.9% | | Gross Profit | 1,272,545 | 1,409,236 | -9.7% | | Other Income | 29,568 | 36,851 | -19.8% | | Other (Losses) / Gains | (9,871) | 1,589 | -721.2% | | Selling Expenses | (302,663) | (346,978) | -12.8% | | Administrative Expenses | (515,821) | (576,796) | -10.6% | | Net Impairment Loss on Financial Assets / Net Reversal of Impairment Loss | (2,761) | 13,623 | -120.3% | | Operating Profit | 470,997 | 537,525 | -12.4% | | Finance Costs | (2,446) | (2,908) | -15.9% | | Share of Results of Investments Accounted for Using Equity Method | (2,601) | 4,686 | -155.5% | | Profit Before Income Tax | 465,950 | 539,303 | -13.6% | | Income Tax Expense | (74,599) | (79,543) | -6.3% | | Profit for the Period | 391,351 | 459,760 | -14.9% | | Profit Attributable to Owners of the Company | 390,877 | 454,583 | -14.0% | | Basic EPS (HKD) | 0.369 | 0.425 | -13.2% | | Diluted EPS (HKD) | 0.363 | 0.416 | -12.7% | [Interim Condensed Consolidated Statement of Comprehensive Income](index=3&type=section&id=InterimCondensedConsolidatedStatementOfComprehensiveIncome) Total comprehensive income increased by **35.1%** to **HKD 515 million**, primarily due to favorable exchange differences from overseas subsidiaries' financial statement translations Key Data from Interim Condensed Consolidated Statement of Comprehensive Income | Metric | 2025 (HKD Thousands) | 2024 (HKD Thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Profit for the Period | 391,351 | 459,760 | -14.9% | | Exchange Differences on Translation of Financial Statements of Overseas Subsidiaries (may be reclassified to profit or loss) | 119,159 | (77,283) | +254.1% | | Exchange Differences on Translation of Financial Statements of Overseas Subsidiaries (will not be reclassified to profit or loss) | 4,491 | (1,416) | +417.2% | | Total Comprehensive Income for the Period, Net of Tax | 515,001 | 381,061 | +35.1% | | Total Comprehensive Income Attributable to Owners of the Company | 510,036 | 377,300 | +35.2% | [Interim Condensed Consolidated Statement of Financial Position](index=4&type=section&id=InterimCondensedConsolidatedStatementOfFinancialPosition) Total assets increased by **0.4%** to **HKD 9.209 billion**, total equity grew by **3.2%** to **HKD 7.805 billion**, and total liabilities decreased by **12.6%** to **HKD 1.404 billion** Key Data from Interim Condensed Consolidated Statement of Financial Position | Metric | June 30, 2025 (HKD Thousands) | December 31, 2024 (HKD Thousands) | Change (%) | | :--- | :--- | :--- | :--- | | **Assets** | | | | | Total Non-current Assets | 1,499,784 | 1,523,386 | -1.5% | | Total Current Assets | 7,708,931 | 7,646,119 | +0.8% | | Total Assets | 9,208,715 | 9,169,505 | +0.4% | | **Equity** | | | | | Equity Attributable to Owners of the Company | 7,765,647 | 7,530,053 | +3.1% | | Total Equity | 7,805,146 | 7,564,587 | +3.2% | | **Liabilities** | | | | | Total Non-current Liabilities | 95,575 | 89,759 | +6.5% | | Total Current Liabilities | 1,307,994 | 1,515,159 | -13.7% | | Total Liabilities | 1,403,569 | 1,604,918 | -12.6% | | Total Equity and Liabilities | 9,208,715 | 9,169,505 | +0.4% | [Notes to Financial Statements](index=6&type=section&id=NotesToFinancialStatements) This section provides detailed explanations of the accounting policies, segment information, and specific financial items presented in the interim financial statements [General Information](index=6&type=section&id=GeneralInformation) The Group primarily develops and sells electronic payment terminal products and provides related services, with its shares listed on the Hong Kong Stock Exchange since December 20, 2010 - The Group primarily engages in the development and sale of electronic payment terminal products, along with providing maintenance, installation, and payment solution services[9](index=9&type=chunk) - The company's shares were listed on the Main Board of The Stock Exchange of Hong Kong Limited on **December 20, 2010**[10](index=10&type=chunk) [Basis of Preparation](index=6&type=section&id=BasisOfPreparation) The interim condensed consolidated financial information is prepared under HKAS 34 "Interim Financial Reporting" and should be read with the 2024 annual consolidated financial statements - The interim condensed consolidated financial information has been prepared in accordance with Hong Kong Accounting Standard 34 “Interim Financial Reporting” issued by the Hong Kong Institute of Certified Public Accountants[14](index=14&type=chunk) - This interim condensed consolidated financial information should be read in conjunction with the annual consolidated financial statements for the year ended **December 31, 2024**[14](index=14&type=chunk) [Accounting Policies](index=6&type=section&id=AccountingPolicies) Accounting policies align with the 2024 annual consolidated financial statements, with HKFRS 18 expected to broadly impact presentation and disclosure upon its mandatory application from **January 1, 2027** - The accounting policies adopted are consistent with those described in the annual consolidated financial statements for the year ended **December 31, 2024**, except for income tax estimates and the adoption of new and revised standards as set out below[15](index=15&type=chunk) - HKFRS 18 will replace HKAS 1 “Presentation of Financial Statements” and is expected to have a broad impact on presentation and disclosure[17](index=17&type=chunk) - The Group expects to apply the new standard from its mandatory effective date of **January 1, 2027**[17](index=17&type=chunk) [Revenue, Other Income and Other (Losses) / Gains](index=8&type=section&id=RevenueOtherIncomeAndOtherLossesGains) Sales of electronic payment terminals decreased by **10.7%** to **HKD 2.544 billion**, while service revenue grew **4.7%** to **HKD 172 million**, with other income declining due to reduced VAT refunds Details of Revenue, Other Income and Other (Losses) / Gains | Item | 2025 (HKD Thousands) | 2024 (HKD Thousands) | Change (%) | | :--- | :--- | :--- | :--- | | **Revenue** | | | | | Sales of electronic payment terminal products | 2,544,491 | 2,849,245 | -10.7% | | Providing services | 171,673 | 163,996 | +4.7% | | **Total Revenue** | 2,716,164 | 3,013,241 | -9.9% | | **Other Income** | | | | | Interest income | 9,480 | 9,928 | -4.5% | | Government grants | 1,142 | 2,691 | -57.5% | | VAT refunds | 8,011 | 11,426 | -29.9% | | Others | 10,935 | 12,806 | -14.5% | | **Total Other Income** | 29,568 | 36,851 | -19.8% | | **Other (Losses) / Gains** | | | | | Fair value (losses) / gains on investments at fair value through profit or loss | (7,873) | 1,589 | -595.4% | | Fair value loss on contingent consideration | (1,998) | – | N/A | | **Total Other (Losses) / Gains** | (9,871) | 1,589 | -721.2% | [Segment Information](index=9&type=section&id=SegmentInformation) The Group operates in electronic payment terminal solutions, with **HKD 1.811 billion** revenue from Hong Kong and other regions, and **HKD 498 million** from the US, where segment operating loss expanded to **HKD 139 million** - The Group primarily engages in the electronic payment terminal solutions business and considers itself to operate in a single business segment[19](index=19&type=chunk) Revenue from External Customers by Geographical Region (For the Six Months Ended June 30, 2025) | Region | Revenue (HKD Thousands) | | :--- | :--- | | China (excluding Hong Kong, Macau and Taiwan) | 184,447 | | Hong Kong and Others | 1,810,711 | | United States | 498,033 | | Italy | 222,973 | | **Total** | 2,716,164 | Segment Operating Profit / (Loss) by Geographical Region (For the Six Months Ended June 30, 2025) | Region | Operating Profit / (Loss) (HKD Thousands) | | :--- | :--- | | China (excluding Hong Kong, Macau and Taiwan) | 67,121 | | Hong Kong and Others | 326,377 | | United States | (139,660) | | Italy | 5,245 | | Elimination and Corporate Expenses | 211,914 | | **Total** | 470,997 | - For the six months ended **June 30, 2025**, revenue from the largest customer was **HKD 232 million**, accounting for **8.6%** of total revenue, attributable to the Hong Kong business segment[24](index=24&type=chunk) - As of **June 30, 2025**, total non-current assets amounted to **HKD 1.499 billion**, with China (excluding Hong Kong, Macau and Taiwan) accounting for the largest portion at **HKD 1.187 billion**[27](index=27&type=chunk) [Expenses by Nature](index=12&type=section&id=ExpensesByNature) Cost of inventories sold, sales commissions, and net foreign exchange gains decreased, while provision for obsolete inventories and intangible asset amortization significantly increased, with employee benefits and R&D costs remaining stable Details of Expenses by Nature | Item | 2025 (HKD Thousands) | 2024 (HKD Thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Cost of inventories sold | 1,327,135 | 1,529,980 | -13.2% | | Provision for obsolete inventories | 62,347 | 4,590 | +1258.3% | | Employee benefit expenses | 404,538 | 392,024 | +3.2% | | R&D costs | 305,174 | 304,219 | +0.3% | | Sales commissions | 60,960 | 74,808 | -18.5% | | Depreciation of property, plant and equipment | 34,811 | 29,197 | +19.2% | | Depreciation of right-of-use assets | 14,098 | 15,268 | -7.6% | | Amortisation of intangible assets | 5,337 | 1,595 | +234.6% | | Net foreign exchange (gains) / losses | (43,385) | 32,273 | -234.5% | | Net impairment loss on financial assets / (net reversal of impairment loss) | 2,761 | (13,623) | -120.3% | [Employee Benefit Expenses](index=13&type=section&id=EmployeeBenefitExpenses) Total employee benefit expenses, including directors' emoluments, increased by **3.2%** to **HKD 405 million**, primarily due to higher wages and salaries Details of Employee Benefit Expenses | Item | 2025 (HKD Thousands) | 2024 (HKD Thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Wages and salaries | 376,269 | 364,481 | +3.2% | | Social security and pension costs | 28,269 | 27,543 | +2.6% | | **Total** | 404,538 | 392,024 | +3.2% | [Income Tax Expense](index=13&type=section&id=IncomeTaxExpense) Total income tax expense decreased by **6.3%** to **HKD 74.6 million**, with a significant drop in China corporate income tax offset by increased Hong Kong profits tax, while R&D tax incentives continue Details of Income Tax Expense | Item | 2025 (HKD Thousands) | 2024 (HKD Thousands) | Change (%) | | :--- | :--- | :--- | :--- | | China corporate income tax | 27,361 | 69,971 | -60.9% | | Hong Kong profits tax | 36,004 | 20,180 | +78.4% | | Overseas profits tax | 11,597 | 11,389 | +1.8% | | R&D expense tax incentives | (30,946) | (27,632) | +12.0% | | Total current income tax | 44,016 | 74,596 | -41.0% | | Deferred income tax | 30,583 | 4,947 | +518.2% | | **Total Income Tax Expense** | 74,599 | 79,543 | -6.3% | - PAX Computer Technology (Shenzhen) Co., Ltd., as a high-tech enterprise, enjoys a preferential corporate income tax rate of **15%**[31](index=31&type=chunk) - The Group's subsidiaries in China benefit from tax incentives issued by Chinese tax authorities for their R&D expenses, allowing for additional tax deductions up to **100%** of the relevant R&D expenses incurred[34](index=34&type=chunk) [Earnings Per Share](index=14&type=section&id=EarningsPerShare) Basic earnings per share decreased by **13.2%** to **HKD 0.369**, while diluted earnings per share declined by **12.7%** to **HKD 0.363** for the period Basic Earnings Per Share | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Profit Attributable to Owners of the Company (HKD Thousands) | 390,877 | 454,583 | | Weighted Average Number of Ordinary Shares in Issue (Thousands) | 1,060,685 | 1,070,525 | | **Basic EPS (HKD per share)** | 0.369 | 0.425 | Diluted Earnings Per Share | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Profit Attributable to Owners of the Company (HKD Thousands) | 390,877 | 454,583 | | Weighted Average Number of Ordinary Shares for Diluted EPS (Thousands) | 1,075,344 | 1,092,547 | | **Diluted EPS (HKD per share)** | 0.363 | 0.416 | [Dividends](index=15&type=section&id=Dividends) The Board declared an interim dividend of **HKD 0.25** per ordinary share for the six months ended June 30, 2025, marking a **4.2%** increase year-on-year - The Board resolved to declare an interim dividend of **HKD 0.25** per ordinary share for the six months ended **June 30, 2025** (for the six months ended June 30, 2024: HKD 0.24 per ordinary share)[37](index=37&type=chunk) [Trade and Other Receivables](index=16&type=section&id=TradeAndOtherReceivables) Total trade and other receivables increased by **8.3%** to **HKD 2.755 billion**, with **HKD 1.368 billion** due within 90 days, and **HKD 9.268 million** in retention receivables from Chinese customers Details of Trade and Other Receivables | Item | June 30, 2025 (HKD Thousands) | December 31, 2024 (HKD Thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Trade receivables | 2,839,136 | 2,625,573 | +8.1% | | Less: Impairment allowance for trade receivables | (85,296) | (81,959) | +4.1% | | Net trade receivables | 2,753,840 | 2,543,614 | +8.3% | | Bills receivable | 673 | 270 | +149.3% | | **Total Trade and Other Receivables** | 2,754,513 | 2,543,884 | +8.3% | Ageing Analysis of Trade Receivables (As of June 30, 2025) | Ageing | Amount (HKD Thousands) | | :--- | :--- | | Within 90 days | 1,368,447 | | 91 to 180 days | 488,607 | | 181 to 365 days | 605,099 | | Over 365 days | 376,983 | | **Total** | 2,839,136 | - Trade receivables include retention receivables of **HKD 9.268 million**, representing approximately **2% to 5%** of the total contract value granted to certain customers in China, with retention periods ranging from three to seven years[39](index=39&type=chunk) [Trade and Other Payables](index=17&type=section&id=TradeAndOtherPayables) Total trade and other payables decreased by **11.2%** to **HKD 833 million**, with **HKD 717 million** due within 90 days Details of Trade and Other Payables | Item | June 30, 2025 (HKD Thousands) | December 31, 2024 (HKD Thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Trade payables | 832,910 | 935,193 | -11.0% | | Amount due to an associate | – | 2,018 | -100.0% | | **Total** | 832,910 | 937,211 | -11.2% | Ageing Analysis of Trade Payables (As of June 30, 2025) | Ageing | Amount (HKD Thousands) | | :--- | :--- | | Within 90 days | 716,651 | | 91 to 180 days | 113,235 | | 181 to 365 days | 3,024 | | **Total** | 832,910 | [Capital Commitments](index=18&type=section&id=CapitalCommitments) Contracted but unrecognized capital commitments for property, plant, and equipment in China decreased by **14.2%** to **HKD 6.962 million** as of June 30, 2025 Details of Capital Commitments | Item | June 30, 2025 (HKD Thousands) | December 31, 2024 (HKD Thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Property, plant and equipment in China | 6,962 | 8,110 | -14.2% | [Management Discussion and Analysis](index=19&type=section&id=ManagementDiscussionAndAnalysis) This section provides an overview of the company's financial performance, including revenue, gross profit, expenses, and profit for the period, along with key drivers [Financial Summary: Revenue](index=19&type=section&id=FinancialSummaryRevenue) Total revenue decreased by **9.9%** to **HKD 2.716 billion** due to global economic uncertainty, with LACIS revenue down **36.0%** and USCA revenue up **39.0%** Sales by Geographical Region | Region | 2025 (HKD Thousands) | 2024 (HKD Thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Europe, Middle East and Africa (EMEA) | 1,083,949 | 1,103,965 | -1.8% | | Latin America and CIS (LACIS) | 684,151 | 1,069,814 | -36.0% | | United States and Canada (USCA) | 498,679 | 358,721 | +39.0% | | Asia Pacific (APAC) | 449,385 | 480,741 | -6.5% | | **Total** | 2,716,164 | 3,013,241 | -9.9% | - The decrease in revenue was primarily due to a decline in purchase orders in certain markets during the period, mainly attributable to global economic uncertainty[42](index=42&type=chunk) Sales by Product Category | Product Category | 2025 (HKD Thousands) | 2024 (HKD Thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Sales of electronic payment terminal products | 2,544,491 | 2,849,245 | -10.7% | | Providing services | 171,673 | 163,996 | +4.7% | | **Total** | 2,716,164 | 3,013,241 | -9.9% | - The increase in revenue from providing services was mainly due to the growing demand for SaaS (Software-as-a-Service) solutions[45](index=45&type=chunk) [Financial Summary: Gross Profit Margin](index=21&type=section&id=FinancialSummaryGrossProfitMargin) Gross profit margin remained stable at **46.9%** for the six months ended June 30, 2025, consistent with **46.8%** in the prior period - The gross profit margin remained relatively stable at **46.9%** and **46.8%** for the six months ended **June 30, 2025**, and **June 30, 2024**, respectively[46](index=46&type=chunk) [Financial Summary: Other Income](index=21&type=section&id=FinancialSummaryOtherIncome) Other income decreased by **19.8%** to **HKD 29.6 million**, primarily attributed to a reduction in VAT refunds - Other income decreased by **19.8%** from **HKD 36.9 million** for the six months ended **June 30, 2024**, to **HKD 29.6 million** for the six months ended **June 30, 2025**, mainly due to reduced VAT refunds[47](index=47&type=chunk) [Financial Summary: Selling Expenses](index=21&type=section&id=FinancialSummarySellingExpenses) Selling expenses decreased by **12.8%** to **HKD 303 million**, primarily due to lower sales commissions and reduced transportation costs for delivered goods - Selling expenses decreased by **12.8%** from **HKD 347.0 million** for the six months ended **June 30, 2024**, to **HKD 302.7 million** for the six months ended **June 30, 2025**, primarily due to a decrease in sales commissions and transportation costs for delivered goods[48](index=48&type=chunk) [Financial Summary: Administrative Expenses](index=21&type=section&id=FinancialSummaryAdministrativeExpenses) Administrative expenses decreased by **10.6%** to **HKD 516 million**, mainly due to favorable foreign exchange movements, partially offset by increased employee benefits and other expenses - Administrative expenses decreased by **10.6%** from **HKD 576.8 million** for the six months ended **June 30, 2024**, to **HKD 515.8 million** for the six months ended **June 30, 2025**, primarily due to favorable foreign exchange movements (e.g., JPY, EUR, and RMB), partially offset by increased employee benefits and other expenses[49](index=49&type=chunk) [Financial Summary: Net Impairment Loss on Financial Assets / Net Reversal of Impairment Loss](index=21&type=section&id=FinancialSummaryImpairmentLossOnFinancialAssets) A net impairment loss of **HKD 2.8 million** on financial assets was recognized, contrasting with a net reversal of **HKD 13.6 million** in the prior period - The Group recognized a net impairment loss on financial assets of **HKD 2.8 million** and a net reversal of impairment loss on financial assets of **HKD 13.6 million** for the six months ended **June 30, 2025**, and **June 30, 2024**, respectively[50](index=50&type=chunk) [Financial Summary: Profit for the Period and Profit Attributable to Owners of the Company](index=21&type=section&id=FinancialSummaryProfitForThePeriodAndProfitAttributableToOwners) Profit for the period decreased by **14.9%** to **HKD 391 million**, and profit attributable to owners declined by **14.0%** to **HKD 391 million**, influenced by various factors - Profit for the period was **HKD 391.4 million**, a **14.9%** decrease compared to **HKD 459.8 million** for the six months ended **June 30, 2024**[51](index=51&type=chunk) - Profit attributable to owners of the company decreased by **14.0%** from **HKD 454.6 million** for the six months ended **June 30, 2024**, to **HKD 390.9 million** for the six months ended **June 30, 2025**[51](index=51&type=chunk) [Business Review and Industry Trends](index=22&type=section&id=BusinessReviewAndIndustryTrends) This section reviews the company's market performance, industry trends, product development, and strategic initiatives across various geographical regions [Market Analysis and Industry Trends](index=22&type=section&id=MarketAnalysisAndIndustryTrends) Rapid growth in digital payments and blockchain, supported by favorable policies, creates opportunities for the payment terminal industry, with the company maintaining a **46.9%** gross profit margin and **14.4%** net profit margin - The increasing popularity of digital payments, new opportunities from blockchain technology, and favorable policy environments (e.g., the US GENIUS Act and Hong Kong's Stablecoin Ordinance) are driving payment market development[52](index=52&type=chunk) - The Group actively seizes industry development opportunities, with PAX payment terminals now supporting emerging payment methods like stablecoins in multiple regions worldwide[52](index=52&type=chunk) - The Group's gross profit margin remained stable at **46.9%**, with profit for the period reaching **HKD 391.4 million** and a net profit margin of **14.4%**[52](index=52&type=chunk) [Leading Global Payment Security Standards, Setting New Industry Benchmarks](index=22&type=section&id=LeadingGlobalPaymentSecurityStandards) PAX was re-elected to the PCI SSC Board of Advisors as the sole Asian payment terminal vendor, with its A920Pro and A77 Android MiniPOS achieving significant security certifications, reinforcing its leadership in payment security - PAX was re-elected to the Payment Card Industry Security Standards Council (PCI SSC) Board of Advisors, becoming the only Asian payment terminal vendor among over sixty global companies[53](index=53&type=chunk) - The A920Pro smart terminal successfully passed **EMVCo C-8 certification**, laying the foundation for the industry's transition to next-generation contactless standards[53](index=53&type=chunk) - The A77 Android MiniPOS became the world's first payment terminal to receive **PCI PTS POI v7.0 certification**, the highest security specification for PIN entry devices[53](index=53&type=chunk) [Promoting Global Adoption of Android Smart Payment Terminals, Expanding Diverse Application Scenarios](index=23&type=section&id=PromotingGlobalAdoptionOfAndroidSmartPaymentTerminals) The company is expanding Android smart payment terminal adoption across diverse sectors, with Android products contributing over **65%** of the Group's total revenue during the period - PAX smart payment terminals are widely applied across various key industry scenarios, including retail, catering, fast-food chains, transportation, vending machines, theme parks, tourist hotspots, and electric vehicle charging stations[55](index=55&type=chunk) - During the period, Android products accounted for over **65%** of the Group's total revenue[55](index=55&type=chunk) [SaaS Ecosystem Expansion](index=23&type=section&id=SaaSEcosystemExpansion) The company continues investing in its MAXSTORE SaaS solution, which now supports **15 million** connected terminals and offers over **16,000** diverse applications as of June 30, 2025 - As of **June 30, 2025**, the MAXSTORE platform has reached a milestone of **15 million** connected terminals[56](index=56&type=chunk) - The MAXSTORE platform offers over **16,000** diverse applications[56](index=56&type=chunk) [Regional Analysis](index=23&type=section&id=RegionalAnalysis) EMEA sales reached **HKD 1.084 billion**, remaining the largest contributor, while LACIS faced pressure, USCA sales grew **39.0%**, and APAC saw Japan sales double with Australia's RKI service gaining PCI PIN certification - EMEA region sales reached **HKD 1,083.9 million**, consistently remaining PAX's largest sales contributor, with significant sales contributions from key markets such as Italy, the United Kingdom, and France[57](index=57&type=chunk) - The LACIS region faced some sales pressure, particularly in the Brazilian market, but achieved significant sales growth in Panama[58](index=58&type=chunk) - USCA market sales increased by **39.0%** year-on-year, with further penetration of flagship payment products and significant progress in expanding the Android Commercial POS (EPOS) market[59](index=59&type=chunk) - Japan sales in the APAC region doubled, with the A8700 smart payment terminal being massively deployed by one of Japan's largest retail chains; Australia's newly established Remote Key Injection (RKI) service successfully obtained **PCI PIN certification**[60](index=60&type=chunk) [Seizing Stablecoin Opportunities](index=25&type=section&id=SeizingStablecoinOpportunities) The company will actively embrace emerging stablecoin payment methods, leveraging its global network and SaaS ecosystem to capitalize on new opportunities as the policy environment matures - **2025** is hailed as the inaugural year for stablecoin payments, with the implementation of the US GENIUS Act and Hong Kong's Stablecoin Ordinance signaling a new landscape for the payment market[62](index=62&type=chunk) - PAX will actively embrace emerging digital currency payment methods, providing more diversified, secure, and efficient payment solutions for global merchants[62](index=62&type=chunk) [Optimizing Payment Terminal Product Line, Focusing on High-Potential Android Models](index=25&type=section&id=OptimizingPaymentTerminalProductLine) To enhance competitiveness, the company will streamline its payment terminal product line, focusing resources on high-demand Android models to strengthen brand influence and improve efficiency - The Group will streamline its payment terminal product line, concentrating resources on high-demand and high-value Android models to strengthen brand influence[63](index=63&type=chunk) [Strengthening SaaS Ecosystem, Enhancing Value-Added Service Capabilities](index=25&type=section&id=StrengtheningSaaSEcosystem) The company is actively building a comprehensive SaaS ecosystem, including AirViewer, GoInsight, Cyberlab, and PCI-certified RKI services, with plans to integrate AI technology for enhanced intelligent support and data application - The Group is actively building a comprehensive SaaS ecosystem, including value-added services such as remote assistance AirViewer, big data analytics GoInsight, cloud payment application testing platform Cyberlab, and PCI-certified RKI (Remote Key Injection)[64](index=64&type=chunk) - PAX is also accelerating the integration of Artificial Intelligence (AI) technology to enhance intelligent support and data application capabilities, laying a solid foundation for building next-generation smart payment infrastructure[64](index=64&type=chunk) [Liquidity and Financial Resources](index=26&type=section&id=LiquidityAndFinancialResources) This section details the Group's cash position, capital structure, and management of foreign exchange risk [Liquidity and Financial Resources Overview](index=26&type=section&id=LiquidityAndFinancialResourcesOverview) As of June 30, 2025, the Group held **HKD 2.976 billion** in cash and equivalents with no borrowings, net current assets increased to **HKD 6.401 billion**, but net cash from operations decreased by **64.3%** to **HKD 154 million** Key Data on Liquidity and Financial Resources | Metric | June 30, 2025 (HKD Thousands) | December 31, 2024 (HKD Thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Cash and cash equivalents | 2,976,100 | 3,083,600 | -3.5% | | Short-term bank deposits | 165,800 | 162,500 | +2.0% | | Net current assets | 6,400,900 | 6,131,000 | +4.4% | | Net cash generated from operating activities (For the six months ended June 30) | 153,700 | 430,700 | -64.3% | - As of **June 30, 2025**, the Group had no borrowings, thus the gearing ratio is not applicable[65](index=65&type=chunk) [Capital Structure and Pledging Details](index=26&type=section&id=CapitalStructureAndPledgingDetails) As of June 30, 2025, the Group had no significant borrowings or pledged assets, with cash and equivalents primarily denominated in RMB, USD, and HKD - As of **June 30, 2025**, the Group had no significant borrowings or bank credit facilities, and no assets were pledged[66](index=66&type=chunk) Cash and Cash Equivalents by Currency Denomination | Currency | June 30, 2025 (HKD Thousands) | December 31, 2024 (HKD Thousands) | | :--- | :--- | :--- | | RMB | 2,133,922 | 1,726,723 | | USD | 589,405 | 982,728 | | HKD | 76,001 | 138,012 | | EUR | 74,367 | 113,772 | | INR | 48,738 | 53,517 | | JPY | 37,415 | 36,171 | | Others | 16,210 | 32,675 | | **Total** | 2,976,058 | 3,083,598 | [Exchange Rate Risk](index=27&type=section&id=ExchangeRateRisk) The Group's financial items are primarily denominated in RMB, HKD, USD, EUR, INR, and JPY, with management monitoring exchange rates and deeming USD-related foreign exchange risk not significant - The Group's revenue, purchases, and expenses are primarily denominated in RMB, HKD, USD, EUR, INR, and JPY[70](index=70&type=chunk) - Currently, the Group has not entered into any agreements or purchased instruments to hedge most of its exchange rate risk[70](index=70&type=chunk) - Management considers the foreign exchange risk related to USD not significant, as HKD is pegged to USD[70](index=70&type=chunk) [Other Significant Information](index=27&type=section&id=OtherSignificantInformation) This section covers human resources, dividend declarations, share repurchases, corporate governance practices, and the audit committee's review of interim results [Human Resources and Remuneration Policy](index=27&type=section&id=HumanResourcesAndRemunerationPolicy) As of June 30, 2025, the Group had **1,500** employees, with **882** in R&D, and offers comprehensive remuneration including fixed salaries, bonuses, share options, and training subsidies Number of Employees by Function | Function | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Management | 12 | 12 | | Sales, After-sales Service and Marketing | 284 | 292 | | R&D | 882 | 881 | | Quality Control | 87 | 89 | | Administration and Human Resources | 91 | 93 | | Accounting | 43 | 41 | | Production, Procurement and Inventory Control | 101 | 101 | | **Total** | 1,500 | 1,509 | - The Group ensures its remuneration packages are comprehensive and attractive, including fixed directors' emoluments, discretionary bonuses, share options, and external training subsidies[74](index=74&type=chunk) [Interim Dividend and Closure of Register of Members](index=28&type=section&id=InterimDividendAndClosureOfRegisterOfMembers) The Board declared an interim dividend of **HKD 0.25** per ordinary share for the six months ended June 30, 2025, with share transfer registration suspended from **September 9 to September 11, 2025**, to determine dividend entitlements - The Board resolved on **September 25, 2025**, to declare an interim dividend of **HKD 0.25** per ordinary share for the six months ended **June 30, 2025**, payable to shareholders whose names appear on the company's register of members at the close of business on **September 11, 2025**[76](index=76&type=chunk) - To determine shareholders' entitlement to the interim dividend, the company's share transfer registration will be suspended from **Tuesday, September 9, 2025**, to **Thursday, September 11, 2025** (both days inclusive)[77](index=77&type=chunk) [Purchase, Sale or Redemption of Shares](index=29&type=section&id=PurchaseSaleOrRedemptionOfShares) For the six months ended June 30, 2025, the company repurchased **2,162,000** ordinary shares for **HKD 9,863,740**, believing it to be in the best interest of the company and shareholders, with all repurchased shares cancelled - For the six months ended **June 30, 2025**, the company repurchased a total of **2,162,000** ordinary shares for a total consideration of **HKD 9,863,740**[78](index=78&type=chunk) - The Board believes that the share repurchases are in the best interests of the company and its shareholders, and can enhance the company's net asset value per share and/or earnings per share[78](index=78&type=chunk) - As of the date of this announcement, all the aforementioned repurchased shares have been cancelled[78](index=78&type=chunk) [Corporate Governance Practices](index=30&type=section&id=CorporateGovernancePractices) The company adheres to the Corporate Governance Code, with the CEO also serving as Chairman, a deviation from C.2.1, which the Board believes enhances strategy execution and operational efficiency - The company's corporate governance practices are based on the principles and code provisions of good corporate governance as set out in Appendix C1 of the Listing Rules[82](index=82&type=chunk) - Following the appointment of Mr. Nie Guoming as Chief Executive Officer (effective **July 3, 2025**), he also serves as the Chairman of the Board and Chief Executive Officer, which deviates from code provision C.2.1 of the Corporate Governance Code[83](index=83&type=chunk) - The Board believes that combining the roles of Chairman of the Board and Chief Executive Officer in the same person facilitates the execution of the Group's business strategies and enhances its operational efficiency[83](index=83&type=chunk) [Audit Committee Review of Interim Results](index=30&type=section&id=AuditCommitteeReviewOfInterimResults) The Audit Committee reviewed the Group's accounting principles, risk management, internal controls, and financial reporting, including the unaudited interim condensed consolidated financial information for the six months ended June 30, 2025 - The Audit Committee has reviewed the accounting principles and practices adopted by the Group with management, and discussed risk management, internal control, and financial reporting matters with the Directors[84](index=84&type=chunk)