[Financial Highlights](index=1&type=section&id=Financial%20Highlights) [Financial Highlights](index=1&type=section&id=Financial%20Highlights) The company experienced a 9.5% revenue decline and a 63.6% gross profit drop, with loss attributable to equity holders expanding to HK$79 million, while net asset value per share slightly rose Key Financial Indicators for H1 2025 | Indicator | Six Months Ended June 30, 2025 | Y-o-Y Change | | :--- | :--- | :--- | | Revenue (HK$ million) | Approx. 2,715 | Down approx. 9.5% | | Gross Profit (HK$ million) | Approx. 73 | Down approx. 63.6% | | Gross Margin (%) | Approx. 2.7% | Down from 6.6% | | Loss Attributable to Equity Holders (HK$ million) | Approx. 79 | Loss expanded (prior period loss HK$69 million) | | Basic Loss Per Share (HK cents) | Approx. 9.4 | Loss expanded (prior period loss 8.1 HK cents) | | Net Asset Value Per Share (End of Period) (HK$) | Approx. 4.0 | Increased (HK$3.9 at end of 2024) | [Condensed Consolidated Financial Statements](index=2&type=section&id=Condensed%20Consolidated%20Financial%20Statements) [Condensed Consolidated Statement of Profit or Loss](index=2&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) Revenue declined by 9.5% to HK$2.715 billion, with gross profit significantly reduced to HK$72.68 million, leading to an expanded pre-tax loss of HK$130 million and a total loss of HK$133 million Condensed Consolidated Statement of Profit or Loss Summary (HK$ '000) | Item | 2025 H1 (Unaudited) | 2024 H1 (Unaudited) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Revenue | 2,714,737 | 2,999,320 | -9.5% | | Gross Profit | 72,681 | 199,416 | -63.6% | | Loss Before Tax | (130,312) | (94,559) | +37.8% | | Loss for the Period | (133,125) | (101,863) | +30.7% | | Loss Attributable to Equity Holders of the Company | (79,072) | (68,699) | +15.1% | | Basic Loss Per Share (HK cents) | (9.4) | (8.1) | +16.0% | [Condensed Consolidated Statement of Comprehensive Income](index=3&type=section&id=Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) Despite a HK$133 million loss, total comprehensive income turned positive to HK$96.52 million, driven by HK$227 million in exchange gains from overseas operations, a significant improvement year-on-year - Benefiting from positive exchange differences from overseas operations, total comprehensive income for the period turned profitable, recording **HK$96.52 million**, compared to a total comprehensive expense of **HK$308 million** in the prior period[5](index=5&type=chunk) [Condensed Consolidated Statement of Financial Position](index=4&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) Total assets reached HK$10.68 billion, with net assets at HK$5.80 billion, a slight increase from 2024 year-end, and net current assets improved to HK$134 million, while borrowings rose Key Items from Statement of Financial Position (HK$ '000) | Item | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Total Non-current Assets | 5,809,036 | 5,729,626 | | Total Current Assets | 4,872,854 | 4,612,833 | | Total Current Liabilities | 4,739,290 | 4,513,891 | | Total Non-current Liabilities | 141,359 | 114,244 | | Net Assets | 5,801,241 | 5,714,324 | | Equity Attributable to Equity Holders of the Company | 4,785,457 | 4,637,196 | [Notes to the Financial Statements](index=6&type=section&id=Notes%20to%20the%20Financial%20Statements) [Note 1: Basis of Preparation and Going Concern](index=6&type=section&id=Note%201%3A%20Basis%20of%20Preparation%20and%20Going%20Concern) Prepared under HKAS 34, the Group obtained a post-period waiver for syndicated loan covenant breaches and is implementing measures like refinancing and asset recovery to ensure going concern - The Group breached two covenants of its **HK$1.126 billion** syndicated loan at the end of the reporting period but subsequently obtained a one-time waiver from the bank[9](index=9&type=chunk) - To ensure going concern, management plans to improve liquidity through loan refinancing, utilizing approximately **HK$1.677 billion** in unutilized credit facilities, and recovering approximately **HK$485 million** from asset disposals[10](index=10&type=chunk) [Note 2: Segment Information](index=7&type=section&id=Note%202%3A%20Segment%20Information) The Group operates as a single segment, manufacturing notebook and handheld device casings, with approximately 88.5% of revenue generated from Mainland China Revenue by Geographical Region (HK$ '000) | Region | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | | Mainland China (excluding Hong Kong) | 2,401,545 | 2,705,649 | | Others | 313,192 | 293,671 | [Note 3: Revenue, Other Income and Gains](index=7&type=section&id=Note%203%3A%20Revenue%2C%20Other%20Income%20and%20Gains) Revenue of HK$2.715 billion was solely from casing sales, while other income and gains surged to HK$209 million, largely due to a HK$139 million gain from asset disposals - A disposal gain of **HK$139 million** was recognized during the period from the sale of assets related to a production plant in Suzhou, China, which is the primary reason for the significant year-on-year increase in other income and gains[19](index=19&type=chunk)[24](index=24&type=chunk) [Note 7 & 8: Dividends and Loss Per Share](index=10&type=section&id=Note%207%20%26%208%3A%20Dividends%20and%20Loss%20Per%20Share) The Board recommends no interim dividend, with basic loss per share calculated at 9.4 HK cents based on a HK$79.07 million loss - The Board decided not to declare an interim dividend for the six months ended June 30, 2025[26](index=26&type=chunk) - Basic loss per share attributable to equity holders of the Company was **9.4 HK cents**, compared to **8.1 HK cents** in the prior period[27](index=27&type=chunk) [Management Discussion and Analysis](index=13&type=section&id=Management%20Discussion%20and%20Analysis) [Business Review and Outlook](index=13&type=section&id=Business%20Review%20and%20Outlook) Sales faced pressure from tariffs and Vietnam factory ramp-up, leading to revenue decline and expanded losses, while the company strategically shifts production to Vietnam and eyes future growth from Windows upgrades and AI PCs - Sales performance was under pressure in the first half, primarily due to tariff fluctuations in export markets and the initial underutilization of the Vietnam factory's production capacity[36](index=36&type=chunk) - The company is strategically relocating some of its Chinese production capacity to Vietnam to reduce costs, improve efficiency, and enhance supply chain resilience[37](index=37&type=chunk) - Looking ahead, Windows system upgrades (expected to phase out **240 million** PCs) and the rapid growth of AI PCs (shipments projected to surge **165.5%** in 2025) are key market growth drivers[39](index=39&type=chunk) [Financial Review](index=14&type=section&id=Financial%20Review) Revenue declined 9.5% with gross margin at 2.7% due to weak demand and factory ramp-up, while asset disposal gains boosted other income, but foreign exchange losses and increased turnover days led to an expanded HK$79 million loss [Revenue and Gross Margin](index=14&type=section&id=Revenue%20and%20Gross%20Margin) Revenue fell 9.5% to HK$2.715 billion due to tariff uncertainties and factory ramp-up, while gross margin dropped to 2.7%, or 6.3% excluding inventory provisions Revenue and Gross Margin Performance | Indicator | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | | Revenue (HK$ million) | Approx. 2,715 | Approx. 2,999 | | Gross Margin (%) | Approx. 2.7% | Approx. 6.6% | | Gross Margin Excluding Inventory Provisions (%) | Approx. 6.3% | Approx. 8.2% | [Operating Costs and Other Expenses](index=15&type=section&id=Operating%20Costs%20and%20Other%20Expenses) Operating costs decreased by 14.6% to HK$297 million due to cost controls, but other expenses surged 546.9% to HK$35 million, primarily from a shift from foreign exchange gain to loss - Operating costs decreased by **14.6%** year-on-year, primarily due to reductions in staff costs, depreciation, professional fees, and transportation expenses[43](index=43&type=chunk) - Other expenses significantly increased, mainly due to the appreciation of RMB against USD, which resulted in a shift from net foreign exchange gain to net loss[44](index=44&type=chunk) [Liquidity and Financial Ratios](index=16&type=section&id=Liquidity%20and%20Financial%20Ratios) Total borrowings rose to HK$2.81 billion, with gearing at 26.3%, while operating cash flow significantly decreased to HK$149 million, and all key turnover days lengthened Key Financial Ratios | Indicator | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | | Inventory Turnover Days | Approx. 78 | Approx. 88 | | Trade Receivables Turnover Days | Approx. 145 | Approx. 134 | | Trade Payables and Notes Turnover Days | Approx. 65 | Approx. 50 | - Net cash flow from operating activities significantly decreased from **HK$480 million** in the prior period to **HK$149 million**, primarily due to increased loss before tax and higher inventory[49](index=49&type=chunk) [Corporate Governance and Other Disclosures](index=18&type=section&id=Corporate%20Governance%20and%20Other%20Disclosures) [Interim Dividend](index=18&type=section&id=Interim%20Dividend) The Board has decided not to recommend any interim dividend for the six-month period ended June 30, 2025 - The Board does not recommend the payment of an interim dividend for the current period[59](index=59&type=chunk) [Corporate Governance Practices](index=18&type=section&id=Corporate%20Governance%20Practices) The company largely complies with the Corporate Governance Code, with a deviation where the Chairman also serves as CEO, an arrangement the Board believes ensures unified strategic leadership - The company deviates from the Corporate Governance Code's requirement for separation of Chairman and Chief Executive Officer roles, with Mr. Zheng Liyu currently holding both positions[60](index=60&type=chunk) [Audit Committee](index=19&type=section&id=Audit%20Committee) The Audit Committee has reviewed the Group's accounting policies and the unaudited interim financial results for the period, expressing no disagreement - The Audit Committee has reviewed the interim results for the current period and has no disagreement[63](index=63&type=chunk)

Company Information [Board of Directors and Company Secretary](index=4&type=section&id=Board%20of%20Directors%20and%20Company%20Secretary) The Board comprises five executive and three independent non-executive directors, with Ms. Shen Juanjuan as Chairperson and Mr. Yao Junyuan as CEO, supported by audit, remuneration, and nomination committees - The Board members include Ms. Shen Juanjuan (Chairperson), Mr. Yao Junyuan (Chief Executive Officer), Mr. Chan Pui Keong (Chief Operating Officer), Mr. Chan Ming Leong (Chief Legal Officer), Mr. Han Xiangfeng (Executive Director), and Mr. Lau Kin Chung, Mr. Ma Yiu Leung, Mr. Lim Choon Fong (Independent Non-Executive Directors)[8](index=8&type=chunk) - Mr. Lau Kin Chung chairs the Audit Committee, Mr. Ma Yiu Leung chairs the Remuneration Committee, and Mr. Lim Choon Fong chairs the Nomination Committee[8](index=8&type=chunk) - The Joint Company Secretaries are Ms. Ho Wing Yan (Hong Kong Law) and Mr. Chan Kam Sui (Singapore Law)[8](index=8&type=chunk) [Other Company Information](index=4&type=section&id=Other%20Company%20Information) The company's compliance officer is Mr. Chan Ming Leong, compliance adviser is Ascent Capital (Holdings) Limited, and auditor is Ernst & Young LLP, with registered and principal offices in Singapore and Hong Kong - The Compliance Officer is Mr. Chan Ming Leong, the Compliance Adviser is Ascent Capital (Holdings) Limited, and the Auditor is Ernst & Young LLP[9](index=9&type=chunk) - The Registered Office and Principal Place of Business in Singapore are located at 300 Beach Road 34-05 The Concourse, Singapore 199555[9](index=9&type=chunk) - The Principal Place of Business in Hong Kong is located at Unit 2703, 27th Floor, Shui On Centre, 6–8 Harbour Road, Wanchai, Hong Kong[9](index=9&type=chunk) Financial Highlights [Interim Results and Five-Year Financial Summary](index=5&type=section&id=Interim%20Results%20and%20Five-Year%20Financial%20Summary) The Group reports interim results for the six months ended June 30, 2025, alongside a five-year financial summary covering key metrics like revenue, profit/loss, EPS, and total assets Interim Results and Five-Year Financial Summary (S$ thousand) | Indicator | June 30, 2025 (Interim) | June 30, 2024 (Interim) | 2024 (Annual) | 2023 (Annual) | 2022 (Annual) | 2021 (Annual) | 2020 (Annual) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | 1,390 | 1,755 | 4,964 | 9,906 | 3,983 | 5,596 | 5,325 | | (Loss)/Profit Before Tax | (703) | (1,249) | (1,089) | 2,414 | (2,423) | 7,515 | (20,330) | | (Loss)/Profit for the Period/Year | (726) | (1,419) | (1,204) | 1,737 | (2,707) | 7,461 | (20,263) | | (Loss)/Earnings Per Share (SGD cents) | (0.04) | (0.07) | (0.06) | 0.09 | (0.14) | 0.37 | (1.01) | **Financial Position (S$ thousand):** | Indicator | June 30, 2025 | December 31, 2024 | December 31, 2023 | December 31, 2022 | December 31, 2021 | December 31, 2020 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Total Assets | 32,484 | 33,078 | 31,596 | 27,454 | 28,316 | 21,600 | | Total Liabilities | 12,968 | 12,651 | 9,109 | 6,501 | 4,586 | 5,009 | | Net Current Assets | 19,824 | 21,012 | 21,736 | 20,443 | 23,429 | 17,342 | | Net Assets | 19,516 | 20,427 | 22,487 | 20,953 | 23,730 | 16,591 | | Net Assets Per Share (SGD cents) | 0.98 | 1.02 | 1.12 | 1.05 | 1.19 | 0.83 | [Key Financial Performance Analysis](index=6&type=section&id=Key%20Financial%20Performance%20Analysis) The Group's net loss significantly improved by 48.6% during the review period, primarily driven by fair value gains on financial derivatives and reduced staff and income tax expenses, despite a decrease in revenue - For the six months ended June 30, 2025, the Group's net loss was **S$0.73 million**, a positive improvement of approximately **S$0.69 million or 48.6%** compared to the net loss of S$1.42 million in the same period of 2024[12](index=12&type=chunk) - The improvement in net loss was mainly attributable to a fair value gain on financial derivatives of approximately **S$0.67 million**, a positive swing of S$0.96 million from a loss of S$0.29 million in the prior period[12](index=12&type=chunk) - Revenue decreased by **S$0.37 million** from S$1.76 million in the prior period to **S$1.39 million** in the review period, primarily due to lower dividend income, management fees, and performance fees, partially offset by a one-off project tender fee[12](index=12&type=chunk) - Total staff costs decreased by **S$0.23 million (11.6%)** to **S$1.75 million**, mainly due to lower discretionary bonuses and operational streamlining[12](index=12&type=chunk) - Basic and diluted loss per share was approximately **0.04 SGD cents**, compared to a loss of 0.07 SGD cents in the prior period[12](index=12&type=chunk) Review Report on Interim Condensed Consolidated Financial Statements [Scope of Review and Conclusion](index=7&type=section&id=Scope%20of%20Review%20and%20Conclusion) Ernst & Young LLP reviewed the Group's interim condensed consolidated financial statements in accordance with International Standard on Review Engagements 2410, finding no issues suggesting non-compliance with IAS 34 - The review was conducted in accordance with International Standard on Review Engagements 2410, with a scope smaller than an audit, thus no audit opinion is expressed[14](index=14&type=chunk) - The review concluded that nothing has come to the attention of the reviewers that causes them to believe the interim condensed consolidated financial statements are not prepared, in all material respects, in accordance with International Accounting Standard 34[15](index=15&type=chunk) - The review report was issued by Ernst & Young LLP on August 14, 2025[16](index=16&type=chunk) Interim Condensed Consolidated Financial Statements [Interim Condensed Consolidated Statement of Profit or Loss](index=8&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) For the six months ended June 30, 2025, the Group reported revenue of S$1,390 thousand, a loss for the period of S$726 thousand, and basic and diluted loss per share of 0.04 SGD cents Interim Condensed Consolidated Statement of Profit or Loss (S$ thousand) | Indicator | June 30, 2025 (Unaudited) | June 30, 2024 (Unaudited) | | :--- | :--- | :--- | | Revenue | 1,390 | 1,755 | | Other income and gains | 202 | 472 | | Staff costs | (1,754) | (1,984) | | Fair value gain/(loss) on financial derivatives | 672 | (285) | | Loss before tax | (703) | (1,249) | | Income tax expense | (23) | (170) | | Loss for the period attributable to owners of the Company | (726) | (1,419) | | Basic and diluted loss per share (SGD cents) | (0.04) | (0.07) | [Interim Condensed Consolidated Statement of Comprehensive Income](index=9&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) For the six months ended June 30, 2025, the Group's loss for the period was S$726 thousand, with other comprehensive loss of S$185 thousand, resulting in a total comprehensive loss of S$911 thousand Interim Condensed Consolidated Statement of Comprehensive Income (S$ thousand) | Indicator | June 30, 2025 (Unaudited) | June 30, 2024 (Unaudited) | | :--- | :--- | :--- | | Loss for the period | (726) | (1,419) | | Fair value changes of equity securities investments | (145) | (189) | | Fair value changes of investments in fund entities | (67) | (159) | | Exchange differences arising from translation of foreign operations | 27 | (13) | | Other comprehensive loss for the period | (185) | (361) | | Total comprehensive loss for the period attributable to owners of the Company | (911) | (1,780) | [Interim Condensed Consolidated Statement of Financial Position](index=10&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's total assets were S$32,484 thousand and net assets were S$19,516 thousand, representing a decrease from December 31, 2024 Interim Condensed Consolidated Statement of Financial Position (S$ thousand) | Indicator | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Total non-current assets | 1,687 | 2,086 | | Total current assets | 30,797 | 30,992 | | Total current liabilities | 10,973 | 9,980 | | Net current assets | 19,824 | 21,012 | | Total non-current liabilities | 1,995 | 2,671 | | Net assets | 19,516 | 20,427 | | Total equity | 19,516 | 20,427 | [Interim Condensed Consolidated Statement of Changes in Equity](index=12&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) For the six months ended June 30, 2025, the Group's total equity decreased from S$20,427 thousand at the beginning of the period to S$19,516 thousand at the end, primarily due to the loss for the period and other comprehensive loss Interim Condensed Consolidated Statement of Changes in Equity (S$ thousand) | Equity Item | January 1, 2025 (Audited) | Loss for the period | Other comprehensive (loss)/gain | June 30, 2025 (Unaudited) | | :--- | :--- | :--- | :--- | :--- | | Share capital | 29,866 | – | – | 29,866 | | Revaluation reserve for equity securities investments | 203 | – | (145) | 58 | | Revaluation reserve for investments in fund entities | (151) | – | (67) | (218) | | Exchange fluctuation reserve | 30 | – | 27 | 57 | | Capital reserve | 1,491 | – | – | 1,491 | | Accumulated losses | (11,012) | (726) | – | (11,738) | | Total equity | 20,427 | (726) | (185) | 19,516 | | Equity Item | January 1, 2024 (Audited) | Loss for the period | Other comprehensive loss | June 30, 2024 (Unaudited) | | :--- | :--- | :--- | :--- | :--- | | Share capital | 29,866 | – | – | 29,866 | | Revaluation reserve for equity securities investments | 570 | – | (189) | 381 | | Revaluation reserve for investments in fund entities | 353 | – | (159) | 194 | | Exchange fluctuation reserve | 15 | – | (13) | 2 | | Capital reserve | 1,491 | – | – | 1,491 | | Accumulated losses | (9,808) | (1,419) | – | (11,227) | | Total equity | 22,487 | (1,419) | (380) | 20,707 | [Interim Condensed Consolidated Statement of Cash Flows](index=14&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) For the six months ended June 30, 2025, the Group reported net cash outflow from operating activities of S$832 thousand, net cash outflow from investing activities of S$1,105 thousand, and net cash inflow from financing activities of S$893 thousand, leading to a net decrease in cash and cash equivalents of S$1,044 thousand Interim Condensed Consolidated Statement of Cash Flows (S$ thousand) | Cash Flow Category | June 30, 2025 (Unaudited) | June 30, 2024 (Unaudited) | | :--- | :--- | :--- | | Net cash flows used in operating activities | (832) | (879) | | Net cash flows used in investing activities | (1,105) | (4,393) | | Net cash flows generated from/(used in) financing activities | 893 | (546) | | Net decrease in cash and cash equivalents | (1,044) | (5,818) | | Cash and cash equivalents at beginning of period | 5,314 | 14,605 | | Cash and cash equivalents at end of period | 4,298 | 8,775 | Notes to the Interim Condensed Consolidated Financial Statements [Company Information and Basis of Preparation](index=16&type=section&id=Company%20Information%20and%20Basis%20of%20Preparation) The Company is a Singapore-registered investment holding company, with subsidiaries primarily providing investment management, acquisition and project management, property and lease management, and financial advisory services, with interim financial statements prepared in Singapore Dollars under IAS 34 - The Company is an investment holding company incorporated in Singapore, with principal activities including investment management, acquisition and project management, property and lease management, and financial advisory services[37](index=37&type=chunk)[39](index=39&type=chunk) - The interim condensed consolidated financial statements are prepared in accordance with International Accounting Standard 34 and presented in Singapore Dollars[38](index=38&type=chunk) - The new standards, interpretations, and amendments adopted by the Group had no significant impact on the interim results[40](index=40&type=chunk) [Operating Segment Information](index=17&type=section&id=Operating%20Segment%20Information) The Group's operating segments include investment management (special purpose entity investment management and fund management), acquisition and project management, property and lease management, and financial advisory services, with detailed disclosure of segment revenue and performance, and geographical revenue by customer location - The Group's main operating segments include investment management (special purpose entity investment management, fund management), acquisition and project management, property and lease management, and financial advisory[41](index=41&type=chunk)[47](index=47&type=chunk)[48](index=48&type=chunk)[49](index=49&type=chunk) Segment Revenue (S$ thousand) | Segment | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Special Purpose Entity Investment Management | 174 | 108 | | Fund Management | 1,145 | 1,532 | | Acquisition and Project Management | 53 | 98 | | Property and Lease Management | 18 | 17 | | Financial Advisory | – | – | | **Total** | **1,390** | **1,755** | Revenue by Customer Location (S$ thousand) | Region | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Singapore | 1,099 | 1,428 | | Malaysia | 18 | 17 | | Australia | 53 | 90 | | British Virgin Islands | 220 | 220 | | **Total** | **1,390** | **1,755** | [Revenue, Other Income and Gains](index=28&type=section&id=Revenue%2C%20Other%20Income%20and%20Gains) The Group's revenue primarily stems from investment management services, including special purpose entity investment management fees and fund management fees, as well as acquisition and project management fees, and property and lease management fees, while other income and gains comprise interest income, government grants, and corporate business service fees Revenue Details (S$ thousand) | Revenue Category | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Special Purpose Entity Investment Management Fees | 174 | 108 | | Fund Management Fees | 1,145 | 1,532 | | Acquisition and Project Management Fees | 53 | 98 | | Property and Lease Management Fees | 18 | 17 | | **Total Revenue** | **1,390** | **1,755** | Other Income and Gains Details (S$ thousand) | Other Income and Gains Category | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Interest income | 33 | 374 | | Government grants | 8 | 3 | | Corporate business service fees | 75 | 80 | | Gain on disposal of property, plant and equipment | 6 | – | | Operating lease income | 8 | 8 | | Net foreign exchange differences | – | 7 | | Others | 72 | – | | **Total** | **202** | **472** | - Government grants primarily include wage subsidies, Job Support Scheme, and Special Employment Credit from the Singapore Government, and the JobKeeper Payment scheme from the Australian Government[63](index=63&type=chunk) [Components of Loss Before Tax](index=31&type=section&id=Components%20of%20Loss%20Before%20Tax) The Group's loss before tax is primarily influenced by auditor's remuneration, professional fees, impairment loss on trade receivables, interest expense, and fair value changes of financial derivatives Key Deductions from Loss Before Tax (S$ thousand) | Item | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Auditor's remuneration | 90 | 70 | | Dividend income from formation shares | (150) | (284) | | Professional fees | 185 | 12 | | Impairment loss/(reversal) on trade receivables, net | 14 | (7) | | Fair value gain/(loss) on financial derivatives | 672 | (285) | | Total interest expense | 275 | 292 | [Income Tax Expense](index=32&type=section&id=Income%20Tax%20Expense) For the six months ended June 30, 2025, the Group's current income tax expense was S$23 thousand, a significant reduction from S$170 thousand in the prior year Income Tax Expense (S$ thousand) | Item | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Current income tax | 23 | 170 | [Loss Per Share](index=32&type=section&id=Loss%20Per%20Share) For the six months ended June 30, 2025, the basic and diluted loss per share attributable to owners of the Company was 0.04 SGD cents, an improvement from 0.07 SGD cents in the prior year Loss Per Share Calculation (S$ thousand) | Indicator | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Loss for the period attributable to owners of the Company | (703) | (1,419) | | Weighted average number of ordinary shares | 2,000,000,000 | 2,000,000,000 | | Basic and diluted loss per share (SGD cents) | (0.04) | (0.07) | [Dividends](index=33&type=section&id=Dividends) The Company neither paid nor proposed any dividends for the six months ended June 30, 2025, consistent with the prior year - The Company did not pay or propose any dividends for the six months ended June 30, 2025 (2024: S$nil)[69](index=69&type=chunk) [Property, Plant and Equipment and Right-of-Use Assets](index=33&type=section&id=Property%2C%20Plant%20and%20Equipment%20and%20Right-of-Use%20Assets) For the six months ended June 30, 2025, the Group made no acquisitions of property, plant and equipment but disposed of S$19 thousand in assets, while right-of-use assets saw no additions or disposals and stable amortization expenses - For the six months ended June 30, 2025, the cost of property, plant and equipment acquired was S$nil, and the net book value of assets disposed of was S$19 thousand[70](index=70&type=chunk) - Depreciation of property, plant and equipment was **S$31 thousand** (2024: S$52 thousand)[70](index=70&type=chunk) - Amortization of right-of-use assets was **S$126 thousand** (2024: S$126 thousand), with no additions or disposals[70](index=70&type=chunk) [Equity Securities Investments and Investments in Fund Entities](index=33&type=section&id=Equity%20Securities%20Investments%20and%20Investments%20in%20Fund%20Entities) The Group's equity securities investments and investments in fund entities are measured at fair value, with changes recognized in other comprehensive income, primarily related to real estate development projects, including formation shares and investments in development funds Equity Securities Investments and Investments in Fund Entities (S$ thousand) | Investment Category | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Equity securities investments (at fair value) | 58 | 203 | | Investments in fund entities (at fair value) | 1,261 | 1,328 | - For the six months ended June 30, 2025, the fair value change for equity securities investments was a **loss of S$145 thousand**, and for investments in fund entities, it was a **loss of S$67 thousand**[72](index=72&type=chunk)[74](index=74&type=chunk) - Equity securities investments represent formation shares received as consideration for the Company's services in establishing and registering investment special purpose entities[73](index=73&type=chunk) - Investments in fund entities include investments in development funds such as ZACD Mount Emily Residential Development Fund, ZACD (BBEC) Pte Ltd, and ZACD (Development4) Ltd[74](index=74&type=chunk) [Trade Receivables](index=36&type=section&id=Trade%20Receivables) The Group's trade receivables totaled S$4,545 thousand as of June 30, 2025, with an impairment loss provision of S$203 thousand, primarily settled on 30-day credit terms and regularly monitored Trade Receivables and Impairment Provision (S$ thousand) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Trade receivables | 4,748 | 4,962 | | Less: Provision for impairment loss | (203) | (214) | | **Net** | **4,545** | **4,748** | - As of June 30, 2025, the change in provision for impairment loss on trade receivables was a net increase of **S$14 thousand**[76](index=76&type=chunk) Ageing Analysis of Trade Receivables (S$ thousand) | Ageing | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Within 1 month | 1,118 | 1,168 | | 1 to 2 months | 4 | 8 | | 2 to 3 months | 74 | 8 | | Over 3 months | 3,349 | 3,564 | | **Total** | **4,545** | **4,748** | - Trade receivables from related parties amounted to **S$4,258 thousand** as of June 30, 2025, representing the vast majority of total trade receivables[79](index=79&type=chunk)[80](index=80&type=chunk) [Capitalized Contract Costs](index=39&type=section&id=Capitalized%20Contract%20Costs) As of June 30, 2025, the Group's capitalized contract costs were S$346 thousand, primarily commissions paid to agents, with S$60 thousand amortized during the period Changes in Capitalized Contract Costs (S$ thousand) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Beginning of period/year | 406 | 337 | | Additions | – | 182 | | Amortization | (60) | (113) | | **End of period/year** | **346** | **406** | [Prepayments, Deposits and Other Receivables](index=40&type=section&id=Prepayments%2C%20Deposits%20and%20Other%20Receivables) As of June 30, 2025, the Group's current prepayments, deposits, and other receivables totaled S$568 thousand, with a non-current portion of S$176 thousand Prepayments, Deposits and Other Receivables (S$ thousand) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Current:** | | | | Prepayments | 213 | 332 | | Deposits | 79 | 134 | | Accrued interest | 174 | 143 | | Other receivables | 102 | 24 | | **Non-current:** | | | | Others | 176 | 186 | | **Total** | **744** | **819** | [Loans and Related Receivables](index=41&type=section&id=Loans%20and%20Related%20Receivables) The Group provided bridging loans to several related parties, with net loans and related receivables totaling S$19,756 thousand as of June 30, 2025, including an impairment loss provision of S$5,085 thousand, and some loans were temporarily interest-free from January 1, 2025 Loans and Related Receivables (S$ thousand) | Borrower | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | ZACD LV Development Fund | 12,777 | 11,872 | | ZACD Mount Emily Residential Development Fund | 4,050 | 3,750 | | ZACD (Development4) Ltd | 5,085 | 5,085 | | ZACD (Development2) Ltd | 1,210 | 1,210 | | Kurnia Rezeki Utama Sdn. Bhd. | 379 | 379 | | ARO II (Tebrau) Pte. Ltd. | 375 | 375 | | ZACD Media Circle Fund | – | 300 | | ZACD Laserblue Pte. Ltd. | – | 600 | | **Total Loans** | **23,876** | **23,571** | | Less: Provision for impairment loss | (5,085) | (5,085) | | **Net** | **19,756** | **19,422** | - Loans provided to ZACD LV Development Fund, ZACD Mount Emily Residential Development Fund, and ZACD (Development2) Ltd were temporarily interest-free from January 1, 2025[88](index=88&type=chunk)[90](index=90&type=chunk)[92](index=92&type=chunk) - Loans and related receivables from ZACD Media Circle Fund and ZACD Laserblue Pte Ltd were fully repaid as of June 30, 2025[96](index=96&type=chunk)[97](index=97&type=chunk) [Cash and Cash Equivalents](index=48&type=section&id=Cash%20and%20Cash%20Equivalents) As of June 30, 2025, the Group's cash and cash equivalents totaled S$4,298 thousand, primarily held in reputable banks and denominated in Singapore Dollars, Hong Kong Dollars, and Australian Dollars Cash and Cash Equivalents (S$ thousand) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | 4,298 | 5,314 | Cash and Bank Balances Denominated in Foreign Currencies (S$ thousand) | Currency | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | HKD | 35 | 38 | | AUD | 288 | 291 | [Bank Borrowings](index=48&type=section&id=Bank%20Borrowings) As of June 30, 2025, the Group's total bank borrowings were S$198 thousand, consisting of unsecured bridging loans bearing a fixed annual interest rate of 3.0% Bank Borrowings (S$ thousand) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Bridging loan, unsecured: Current | 198 | 590 | | **Total Bank Borrowings** | **198** | **590** | - The bridging loan is guaranteed under the Enterprise Financing Scheme, with a fixed interest rate of **3.0% per annum**, repayable in 60 monthly installments[100](index=100&type=chunk)[101](index=101&type=chunk) [Lease Liabilities](index=49&type=section&id=Lease%20Liabilities) As of June 30, 2025, the Group's total lease liabilities amounted to S$114 thousand, comprising both current and non-current portions, primarily for office property leases Lease Liabilities (S$ thousand) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Office property leases — Current | 108 | 262 | | Office property leases — Non-current | 6 | 10 | | **Total Lease Liabilities** | **114** | **272** | [Financial Derivatives](index=50&type=section&id=Financial%20Derivatives) The Group granted a put option to investor Top Global Limited, with the fair value of financial derivatives at S$1,902 thousand as of June 30, 2025, and a fair value gain of S$672 thousand recognized during the period Fair Value of Financial Derivatives (S$ thousand) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Financial derivatives | 1,902 | 2,574 | - The Company granted a put option to Top Global Limited, an investor in ZACD LV Development Fund[104](index=104&type=chunk) - A fair value gain on financial derivatives of **S$672 thousand** was recognized in profit or loss during the period (2024: loss of S$285 thousand)[104](index=104&type=chunk) [Share Capital](index=50&type=section&id=Share%20Capital) As of June 30, 2025, the Company's issued and fully paid share capital consisted of 2,000,000,000 ordinary shares, totaling S$29,866 thousand, consistent with the prior year-end Share Capital (S$ thousand) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Issued and fully paid ordinary shares (2,000,000,000 shares) | 29,866 | 29,866 | [Related Party Transactions](index=51&type=section&id=Related%20Party%20Transactions) The Group engaged in transactions with various related parties, including investment special purpose entities, private funds, development special purpose entities, and companies under common control of the controlling shareholders, primarily involving dividend income, performance fees, fund management fees, and office and transportation expenses - Related parties include various investment special purpose entities, private funds managed by the Group, development special purpose entities, and companies under common control of the controlling shareholders[107](index=107&type=chunk)[113](index=113&type=chunk)[116](index=116&type=chunk) Related Party Transaction Details (S$ thousand) | Transaction Category | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Investment management — Dividend income | 150 | 284 | | Investment management — Performance fees | 167 | 943 | | Investment management — Fund management fees | 578 | 232 | | Office and transportation expenses | 30 | 30 | - Dividend income is derived from formation shares in investment special purpose entities or preference shares in fund vehicles, performance fees from private real estate funds, and fund management income includes fund establishment fees and fund management fees[123](index=123&type=chunk) [Commitments](index=60&type=section&id=Commitments) The Company granted a put option to investor TGL and committed to coupon payments totaling S$1,920 thousand, of which S$1,200 thousand has been paid as of the reporting date - The Company granted a put option to TGL, an investor in ZACD LV Development Fund, and committed to coupon payments at an annual interest rate of 8%[125](index=125&type=chunk) - Total coupon payments over the coupon period amount to **S$1,920 thousand**, with **S$1,200 thousand** paid as of the reporting date[125](index=125&type=chunk) [Financial Guarantees](index=61&type=section&id=Financial%20Guarantees) The Company provides financial guarantees for several real estate development projects, including La Ville Development, BBEC Development, Mount Emily Properties, Mandai Development, and Landmark Development, with total guaranteed amounts reaching hundreds of millions of Singapore Dollars - The Company provides a loan facility guarantee of **S$129,086 thousand** for La Ville Development, representing **75.0%** of the total liabilities of the related development special purpose entity[127](index=127&type=chunk) - The Company provides a loan facility guarantee of **S$29,980 thousand** for BBEC Development, representing **10.0%** of the total liabilities of the related development special purpose entity[128](index=128&type=chunk) - The Company provides a loan facility guarantee of **S$19,253 thousand** for Mount Emily Properties[129](index=129&type=chunk) - The Company provides a loan facility guarantee of **S$28,985 thousand** for Mandai Development, representing **60.0%** of the total liabilities of the related development special purpose entity[130](index=130&type=chunk) - The Company provides a loan facility guarantee of **S$150,744 thousand** for Landmark Development, representing **39.2%** of the total liabilities of the related development special purpose entity[131](index=131&type=chunk) [Contingent Liabilities](index=63&type=section&id=Contingent%20Liabilities) The Group is involved in legal actions concerning ZACD Australia Hospitality Fund and ZACD US Fund to recover losses from the iProsperity Group incident, with external legal counsel finding no negligence, fraud, or dishonesty by Group management, thus no provision has been made - The Group is pursuing recovery actions against iProsperity Group and its managers to recover losses from ZACD Australia Hospitality Fund and ZACD US Fund[132](index=132&type=chunk)[133](index=133&type=chunk) - External legal counsel believes there is no evidence of negligence, fraud, or dishonesty by the Group or its management, hence no provision has been made for contingent liabilities[134](index=134&type=chunk) - As of June 30, 2025, cumulative legal fees incurred for legal actions against the defendants and iProsperity Group amounted to **S$1,808 thousand**[134](index=134&type=chunk) [Financial Instruments by Category](index=65&type=section&id=Financial%20Instruments%20by%20Category) The Group's financial instruments are categorized as fair value through other comprehensive income and financial assets and liabilities measured at amortized cost, with carrying amounts provided as of June 30, 2025, and December 31, 2024 Financial Assets (S$ thousand) | Category | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Fair value through other comprehensive income | 1,319 | 1,531 | | Financial assets measured at amortized cost | 30,414 | 30,440 | | **Total** | **31,733** | **31,971** | Financial Liabilities (S$ thousand) | Category | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Fair value through profit or loss | 1,902 | 2,574 | | Financial liabilities measured at amortized cost | 10,163 | 9,048 | | **Total** | **12,065** | **11,622** | [Fair Value and Fair Value Hierarchy of Financial Instruments](index=69&type=section&id=Fair%20Value%20and%20Fair%20Value%20Hierarchy%20of%20Financial%20Instruments) The Group's financial instruments are measured at fair value using discounted cash flow and Black Scholes models, primarily classified as Level 3, with valuations involving significant unobservable inputs related to projected cash flow uncertainty and project selling price volatility - Fair values of unlisted equity securities and investments in fund entities are estimated using discounted cash flow valuation models, classified as Level 3 of the fair value hierarchy[142](index=142&type=chunk) - Fair values of financial derivatives are estimated using the Black Scholes model valuation technique, classified as Level 3 of the fair value hierarchy[142](index=142&type=chunk) Level 3 Fair Value Measurements Changes (S$ thousand) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Equity securities investments — Unlisted | 58 | 203 | | Investments in fund entities — Unlisted | 1,261 | 1,328 | | Financial derivatives | 1,902 | 2,574 | - The uncertainty of the underlying projected cash flow inputs and the volatility of project selling prices are significant unobservable inputs used in the valuations[144](index=144&type=chunk)[145](index=145&type=chunk)[146](index=146&type=chunk) [Authorization for Issue of Interim Condensed Consolidated Financial Statements](index=77&type=section&id=Authorization%20for%20Issue%20of%20Interim%20Condensed%20Consolidated%20Financial%20Statements) The interim condensed consolidated financial statements for the six months ended June 30, 2025, were authorized for issue by the Board of Directors on August 14, 2025 - The interim condensed consolidated financial statements were authorized for issue by the Board of Directors on August 14, 2025, in accordance with a resolution of the Board[151](index=151&type=chunk) Management Discussion and Analysis [Executive Summary](index=78&type=section&id=Executive%20Summary) ZACD Group is a Singapore-based integrated asset management company strategically focused on "Investment Management" and "Acquisition and Project Management," currently operating 23 investment portfolios and providing services to a family office with approximately US$100 million in assets under management - ZACD Group is a Singapore-based integrated asset management company providing real estate value chain solutions[154](index=154&type=chunk) - Core business strategy focuses on "Investment Management" (fund management) and "Acquisition and Project Management" (end-to-end real estate development cycle management)[154](index=154&type=chunk) - The Group operates 23 investment portfolios, covering 22 real estate projects and assets in Singapore, Malaysia, Indonesia, and Australia[154](index=154&type=chunk) - Currently provides corporate support and fund management services to a family office with approximately **US$100 million** in assets under management[154](index=154&type=chunk) [Financial and Business Review](index=79&type=section&id=Financial%20and%20Business%20Review) The Group's net loss significantly improved by 48.6% during the review period, primarily due to fair value gains on financial derivatives, reduced staff costs, and lower income tax expenses, despite a decrease in revenue, with varied performance across business segments - The Group recorded a net loss of **S$0.73 million** during the review period, a positive improvement of approximately **S$0.69 million or 48.6%** compared to the net loss of S$1.42 million in the prior period[157](index=157&type=chunk) - The improvement in net loss was mainly attributable to a fair value gain on financial derivatives of approximately **S$0.67 million** (prior period loss of S$0.29 million), as well as a reduction in staff costs of approximately **S$0.23 million** and a decrease in income tax expense of approximately **S$0.15 million**[157](index=157&type=chunk) - Total revenue decreased by **21.0%** from S$1.76 million in the prior period to **S$1.39 million** in the review period[158](index=158&type=chunk) [Revenue Analysis](index=79&type=section&id=Revenue%20Analysis) The Group's revenue decline was primarily due to reduced dividend income, management fees, and performance fees, partially offset by a one-off project tender fee, with varied performance across business segments, including a decrease in fund management revenue and an increase in special purpose entity investment management revenue - The decrease in revenue was mainly attributable to a reduction in dividend income of approximately **S$0.13 million**, management fees of approximately **S$0.30 million**, and performance fees of approximately **S$0.59 million**[158](index=158&type=chunk) - The decrease in revenue was partially offset by a one-off project tender fee of approximately **S$0.50 million** and an increase in corporate fees of approximately **S$0.11 million**[158](index=158&type=chunk) [Investment Management Services](index=82&type=section&id=Investment%20Management%20Services) Special purpose entity investment management revenue grew by 54.5% due to dividend income and performance fees, while fund management revenue decreased by 24.8% primarily from lower performance fees, partially offset by a one-off project tender fee - Special purpose entity investment management revenue increased from **S$0.11 million** in the prior period to **S$0.17 million** in the review period, a **54.5% increase**[161](index=161&type=chunk) - Fund management revenue decreased from **S$1.53 million** in the prior period to **S$1.15 million** in the review period, a **24.8% decrease**, mainly due to a reduction in performance fees of approximately **S$0.78 million**[161](index=161&type=chunk) - The decrease in fund management revenue was partially offset by a one-off project tender fee of approximately **S$0.50 million** from Media Circle Fund and Laserblue special purpose entity developers[161](index=161&type=chunk) [Acquisition and Project Management Services](index=83&type=section&id=Acquisition%20and%20Project%20Management%20Services) Acquisition and project management services revenue decreased by 50.0%, primarily because related projects are still under development - Acquisition and project management services revenue decreased by **50.0%** from **S$0.10 million** in the prior period to **S$0.05 million** in the review period[162](index=162&type=chunk) [Property and Lease Management Services](index=83&type=section&id=Property%20and%20Lease%20Management%20Services) Property and lease management services revenue remained stable at S$20 thousand, with no new contracts signed since the strategic adjustment as the Group evaluates the strategic direction of this business segment - Property and lease management services revenue remained relatively stable at **S$0.02 million**[163](index=163&type=chunk) - No new contracts have been signed since the strategic adjustment of this business segment, as the Group is still evaluating its strategic direction[163](index=163&type=chunk) [Financial Advisory Services](index=83&type=section&id=Financial%20Advisory%20Services) The Group has ceased SFC-regulated activities and has not undertaken new advisory mandates, now focusing on the new family office management business segment - The Board of Directors resolved to cease Securities and Futures Commission regulated activities and has not entered into new advisory mandates[164](index=164&type=chunk) - The Group continues to focus on the new business segment of family office management, particularly for family offices in the Southeast Asia region[164](index=164&type=chunk) [Other Income and Gains](index=84&type=section&id=Other%20Income%20and%20Gains) Other income and gains decreased by 57.4%, mainly due to reduced interest income from bridging loans to fund structures, partially offset by gains from the disposal of property, plant and equipment - Other income and gains decreased by **S$0.27 million or 57.4%** from S$0.47 million in the prior period to **S$0.20 million** in the review period[165](index=165&type=chunk) - The decrease primarily resulted from a **S$0.34 million** reduction in interest income, partially offset by a **S$0.06 million** gain from the disposal of property, plant and equipment[165](index=165&type=chunk) [Staff Costs](index=84&type=section&id=Staff%20Costs) Total staff costs decreased by 11.6%, primarily due to lower discretionary bonuses and operational streamlining, remaining the Group's largest single cost factor at 59% of total expenses - Total staff costs decreased by **S$0.23 million or 11.6%** from S$1.98 million in the prior period to **S$1.75 million** in the review period[166](index=166&type=chunk) - The decrease was mainly attributable to lower discretionary bonuses and operational streamlining[166](index=166&type=chunk) - As of the end of the review period, the Group had 27 employees, with staff costs accounting for **59%** of total expenses (prior period: 62%)[166](index=166&type=chunk) [Impairment Loss or Reversal of Impairment Loss on Financial Assets](index=84&type=section&id=Impairment%20Loss%20or%20Reversal%20of%20Impairment%20Loss%20on%20Financial%20Assets) The Group recognized an impairment loss of S$10 thousand on trade receivables during the review period, and management will continue to assess the adequacy of expected credit loss provisions - During the review period, the Group recognized an impairment loss of **S$0.01 million** on its trade receivables (prior period: reversal of impairment loss of S$0.01 million)[167](index=167&type=chunk) [Other Expenses, Net](index=85&type=section&id=Other%20Expenses%20%2C%20Net) Other expenses remained relatively stable at S$710 thousand in both the prior and review periods - Other expenses remained relatively stable at **S$0.71 million** in both the prior and review periods[168](index=168&type=chunk) [Interest Expense](index=85&type=section&id=Interest%20Expense) Interest expense remained unchanged at S$280 thousand in both the prior and review periods, primarily representing coupon payments due to investor Top Global Limited - Interest expense remained unchanged at **S$0.28 million** in both the prior and review periods[169](index=169&type=chunk) - Interest expense refers to coupon payments due to investor Top Global Limited during the review period[169](index=169&type=chunk) [Fair Value Gain/(Loss) on Financial Derivatives](index=85&type=section&id=Fair%20Value%20Gain%2F%28Loss%29%20on%20Financial%20Derivatives) The Group recognized a fair value gain of approximately S$670 thousand on financial derivatives during the review period, mainly due to a reduction in the put option exercise price - A fair value gain on financial derivatives of approximately **S$0.67 million** was recognized during the review period (prior period: loss of approximately S$0.29 million)[170](index=170&type=chunk) - The gain primarily arose from a reduction in the put option exercise price[170](index=170&type=chunk) [Income Tax Expense](index=85&type=section&id=Income%20Tax%20Expense) During the review period, Singapore income tax of S$20 thousand was provided at a rate of 17% - During the review period, Singapore income tax of **S$0.02 million** was provided at a rate of **17%** on estimated assessable profits arising in Singapore[171](index=171&type=chunk) [Net Assets](index=85&type=section&id=Net%20Assets) As of June 30, 2025, the Group's total assets were S$32.48 million and net assets were S$19.52 million, with a S$0.91 million decrease in net assets primarily due to fair value losses on investments Net Assets Overview (S$ thousand) | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Assets | 32,484 | 33,078 | | Net Assets | 19,516 | 20,427 | | Net Asset Decrease | (911) | - | | Net Assets Per Share (SGD cents) | 0.98 | 1.02 | - The decrease in net assets of **S$0.91 million** was mainly due to the impact of fair value losses on the Group's investments during the review period[172](index=172&type=chunk) [Liquidity and Capital Resources](index=86&type=section&id=Liquidity%20and%20Capital%20Resources) The Group maintains a prudent financial management approach to ensure a robust liquidity position, funded by bank balances, internal operating cash flows, and bank financing, with liquidity management including regular review of trade receivables recoverability - The Group adopts a prudent financial management approach to ensure a robust liquidity position and centrally manages financing risks, funding, and treasury activities[174](index=174&type=chunk) - Working capital management includes regular credit assessments of trade receivables, monitoring timely collection, and establishing recovery procedures for doubtful debts[174](index=174&type=chunk) [Cash and Cash Equivalents](index=86&type=section&id=Cash%20and%20Cash%20Equivalents) As of June 30, 2025, cash and cash equivalents totaled S$4.30 million, a decrease of S$1.01 million from the year-end, primarily due to investments in funds, partially offset by repayment of bridging advances and debt recovery Cash and Cash Equivalents (S$ thousand) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | 4,298 | 5,314 | - Cash and cash equivalents decreased by **S$1.01 million**, mainly due to investments in ZACD La Ville Development Fund, ZACD Mount Emily Residential Development Fund, and ZACD Media Circle Fund totaling approximately **S$1.91 million**[175](index=175&type=chunk) - The decrease was partially offset by the repayment of bridging advances of approximately **S$1.00 million** from ZACD Media Circle Fund and debt recovery from the Group's customers[175](index=175&type=chunk) [Bank Borrowings and Gearing Ratio](index=87&type=section&id=Bank%20Borrowings%20and%20Gearing%20Ratio) As of June 30, 2025, the Group's net cash position was S$3.99 million, with bank borrowings (including lease liabilities) of S$0.31 million, resulting in a gearing ratio of 1.6% Bank Borrowings and Gearing Ratio (S$ thousand) | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Bank borrowings and lease liabilities | 312 | 862 | | Less: Cash and cash equivalents | (4,298) | (5,314) | | Net cash | 3,986 | 4,452 | | Gearing ratio | 1.6% | 4.2% | [Other Matters](index=87&type=section&id=Other%20Matters) As of June 30, 2025, the Group had no pledged assets, with details on financial guarantees, contingent liabilities, and commitments provided in the notes to the financial statements; no dividends were paid or proposed, no share options were issued, and no significant events occurred after the reporting period - As of June 30, 2025, the Group had no pledged assets[178](index=178&type=chunk) - The Company did not pay or propose any dividends for the six months ended June 30, 2025[182](index=182&type=chunk) - As of June 30, 2025, no share options were granted under the share option scheme[183](index=183&type=chunk) - No significant events occurred after June 30, 2025, up to the date of this report that would materially affect the Group's operations and financial results[184](index=184&type=chunk) [Business Outlook](index=89&type=section&id=Business%20Outlook) The Group made substantial progress on projects and strategic initiatives in Q2 2025, with rising private residential property prices and rents in Singapore, successful development project advancements, and the sale of The Sebel West Perth hotel, with future plans to launch a new industrial fund to capitalize on industrial property market growth - Singapore's private residential property price index increased by **1.0%** in Q2 2025, and the overall private residential rental index rose by **0.8%**[186](index=186&type=chunk) - Arina East Residences (Tanjong Rhu freehold condominium) had a soft launch on May 31, 2025, with an official launch planned for August[187](index=187&type=chunk) - Bloomsbury Residences and Bloomsbury Shoppes (Media Circle condominium development) officially launched in April 2025, achieving a **46.9% sales rate** as of June 30[187](index=187&type=chunk) - The Landmark is expected to obtain its Temporary Occupation Permit in the second half of 2025[187](index=187&type=chunk) - The successful sale of The Sebel West Perth hotel, held under ZACD Income Trust, generated a significant gain above its original cost[190](index=190&type=chunk) - In-depth discussions are underway to launch a new industrial fund in Singapore, aiming to acquire industrial land, develop high-specification properties, and sell them for capital gains[189](index=189&type=chunk) Corporate Governance and Other Information [Corporate Governance Practices](index=91&type=section&id=Corporate%20Governance%20Practices) The Company has adopted the principles and code provisions of the Corporate Governance Code set out in Appendix C1 to the GEM Listing Rules and complied with all applicable code provisions for the six months ended June 30, 2025 - The Company has adopted the principles and code provisions of the Corporate Governance Code set out in Appendix C1 to the GEM Listing Rules[192](index=192&type=chunk) - The Company has complied with all applicable code provisions for the six months ended June 30, 2025[192](index=192&type=chunk) [Directors' and Chief Executive's Interests and Short Positions in Shares and Underlying Shares and Debentures](index=91&type=section&id=Directors%27%20and%20Chief%20Executive%27s%20Interests%20and%20Short%20Positions%20in%20Shares%20and%20Underlying%20Shares%20and%20Debentures) As of June 30, 2025, Mr. Yao and Ms. Shen held 64.93% of the Company's shares through their controlled corporation, ZACD Investments Pte Ltd, with Mr. Chan Pui Keong and Mr. Chan Ming Leong holding minor stakes Directors' Long Positions in Ordinary Shares of the Company | Director's Name | Nature and Capacity of Interest | Number of Shares Held | Percentage of Total Issued Shares | | :--- | :--- | :--- | :--- | | Mr. Yao | Interest in controlled corporation | 1,298,600,000 ordinary shares | 64.93% | | Ms. Shen | Interest in controlled corporation | 1,298,600,000 ordinary shares | 64.93% | | Mr. Chan Pui Keong | Beneficial owner | 5,500,000 ordinary shares | 0.275% | | Mr. Chan Ming Leong | Beneficial owner | 30,000 ordinary shares | 0.0015% | - Mr. Yao and Ms. Shen are spouses and hold 46.28% and 51.83% respectively of the total issued share capital of ZACD Investments Pte Ltd, and are therefore deemed to be interested in all shares held by ZACD Investments[195](index=195&type=chunk) [Substantial Shareholders' and Other Persons' Interests and Short Positions in Shares and Underlying Shares](index=94&type=section&id=Substantial%20Shareholders%27%20and%20Other%20Persons%27%20Interests%20and%20Short%20Positions%20in%20Shares%20and%20Underlying%20Shares) As of June 30, 2024, Mr. Yao, Ms. Shen, and ZACD Investments were the Company's substantial shareholders, holding 64.93% of the shares, while Mr. Rachman Sastra and his controlled corporation, Harmonious Tidings Limited, held 8.77% Substantial Shareholders' Interests and Short Positions in Shares of the Company | Name | Capacity/Nature of Interest | Number of Ordinary Shares Held | Percentage of Total Issued Share Capital of the Company | | :--- | :--- | :--- | :--- | | Mr. Yao | Interest in controlled corporation | 1,298,600,000 | 64.93% | | Ms. Shen | Interest in controlled corporation | 1,298,600,000 | 64.93% | | ZACD Investments | Beneficial owner | 1,298,600,000 | 64.93% | | Mr. Rachman Sastra | Beneficial owner and interest in controlled corporation | 175,350,000 | 8.77% | | Harmonious Tidings Limited | Beneficial owner | 125,600,000 | 6.28% | - Mr. Yao and Ms. Shen are deemed to be interested in all shares held by ZACD Investments Pte Ltd[206](index=206&type=chunk) - Mr. Rachman Sastra is the ultimate shareholder of Harmonious Tidings Limited and is therefore deemed to be interested in the shares held by it[206](index=206&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=95&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the six months ended June 30, 2025 - Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the six months ended June 30, 2025[204](index=204&type=chunk) [Interests of Compliance Adviser](index=95&type=section&id=Interests%20of%20Compliance%20Adviser) Ascent Capital (Holdings) Limited, the Group's compliance adviser, and its directors, employees, or close associates, hold no notifiable interests in the securities of the Company or any Group member - Ascent Capital (Holdings) Limited, the Group's compliance adviser, or any of its directors, employees, or close associates, have no interests in the securities of the Company or any member of the Group that are required to be notified to the Company under Rule 6A.32 of the GEM Listing Rules[205](index=205&type=chunk) [Audit Committee](index=96&type=section&id=Audit%20Committee) The Audit Committee, composed of three independent non-executive directors with Mr. Lau Kin Chung as chairman, is responsible for advising on external auditors, reviewing financial statements, monitoring internal controls and risk management, and has reviewed the Group's interim results for the six months ended June 30, 2025 - The Audit Committee comprises all three independent non-executive directors, with Mr. Lau Kin Chung as chairman[208](index=208&type=chunk) - Its primary responsibilities include recommending the appointment and removal of external auditors, reviewing and overseeing financial statements, monitoring internal controls, risk management procedures, and corporate governance[208](index=208&type=chunk) - The Audit Committee has reviewed the Group's interim results for the six months ended June 30, 2025, with senior management[208](index=208&type=chunk)

[Announcement Background and Purpose](index=1&type=section&id=Announcement%20Background%20and%20Purpose) This announcement supplements Splendecor International Holdings Limited's 2024 annual report, providing additional details on the share option scheme [Announcement Overview and Annual Report Reference](index=1&type=section&id=Announcement%20Overview%20and%20Annual%20Report%20Reference) This announcement supplements Splendecor International Holdings Limited's 2024 annual report, primarily providing information related to the share option scheme - This announcement supplements Splendecor International Holdings Limited's 2024 annual report, primarily providing information related to the share option scheme[2](index=2&type=chunk) [Supplemental Disclosure on Share Option Scheme](index=1&type=section&id=Supplemental%20Disclosure%20on%20Share%20Option%20Scheme) This section provides additional details regarding the company's share option scheme, including ungranted options and exercise periods [Ungranted Share Options](index=1&type=section&id=Ungranted%20Share%20Options) No share options were granted from the listing date to December 31, 2024, with 50,000,000 unexercised options available - No share options were granted by the company from its listing date up to December 31, 2024[3](index=3&type=chunk) Number of Unexercised Share Options | Date | Number of Unexercised Share Options (units) | | :--- | :--- | | January 1, 2024 | 50,000,000 | | December 31, 2024 | 50,000,000 | [Share Option Exercise Period](index=1&type=section&id=Share%20Option%20Exercise%20Period) The exercise period for share options is determined by the Board, not exceeding ten years from the offer date - The exercise period for share options is determined at the Board's sole discretion, not exceeding ten years from the offer date[3](index=3&type=chunk) [Impact of Supplemental Information on Annual Report](index=2&type=section&id=Impact%20of%20Supplemental%20Information%20on%20Annual%20Report) This supplemental information does not alter other details in the 2024 annual report, which remain unchanged - The supplemental information provided does not affect other details in the 2024 annual report, with all other information remaining unchanged[4](index=4&type=chunk) [Other Information Disclosure](index=2&type=section&id=Other%20Information%20Disclosure) This section covers the Board's composition, directors' responsibilities, and publication details of the announcement [Board of Directors Composition](index=2&type=section&id=Board%20of%20Directors%20Composition) As of the announcement date, the Board comprises three executive directors and three independent non-executive directors - As of the announcement date, the Board includes three executive directors and three independent non-executive directors[6](index=6&type=chunk) - Executive directors are Mr Sheng Yingming (Chairman, CEO), Mr Fang Xu, and Ms Sheng Sainan[6](index=6&type=chunk) - Independent non-executive directors are Mr Ma Lingfei, Mr Cao Bingchang, and Ms Wong Yuetyuen[6](index=6&type=chunk) [Directors' Responsibility Statement](index=2&type=section&id=Directors'%20Responsibility%20Statement) Directors assume full responsibility for the announcement's content, confirming its accuracy, completeness, and integrity - Directors collectively and individually assume full responsibility for this announcement, confirming its accuracy, completeness, and absence of misleading or fraudulent content[7](index=7&type=chunk) [Announcement Publication and Language Versions](index=2&type=section&id=Announcement%20Publication%20and%20Language%20Versions) The announcement will be published on GEM and company websites for at least seven days; English version prevails - This announcement will be published on the GEM website (http://www.hkgem.com) and the company website (http://www.splendecor.com) for at least seven days from the publication date[8](index=8&type=chunk) - In case of any discrepancy between the Chinese and English versions of this announcement, the English version shall prevail[9](index=9&type=chunk)

| 2 | Corporate Information | | --- | --- | | | 公司資料 | | 4 | Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income | | | 簡明綜合損益及其他全面收益表 | | 6 | Condensed Consolidated Statement of Financial Position | | | 簡明綜合財務狀況表 | | 8 | Condensed Consolidated Statement of Cash Flows | | | 簡明綜合現金流量表 | | 9 | Condensed Consolidated Statement of Changes in Equity | | | 簡明綜合權益變動表 | | 10 | Notes to the Condensed Consolidated Financial Statements | | | 簡明綜合財務報表附註 | | 26 | Interim Dividend/Closure of ...

[Management Discussion and Analysis](index=1&type=section&id=Management%20Discussion%20and%20Analysis) [Performance Overview](index=1&type=section&id=Performance%20Overview) In H1 2025, the company's revenue sharply declined by **58% to HKD 186 million**, resulting in a **net loss of HKD 25.6 million** due to a high prior-year base, slower core brand demand, and trade tensions, with gross margin also pressured by tariffs and increased costs Key Financial Indicators for H1 2025 | Indicator | H1 2025 (HKD Thousands) | H1 2024 (HKD Thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 185,514 | 445,141 | -58.3% | | Gross Profit | 79,360 | 249,447 | -68.2% | | Operating (Loss)/Profit | (45,293) | 68,435 | N/A | | (Loss)/Profit Attributable to Owners of the Company | (25,610) | 91,458 | N/A | | Basic (Loss)/Earnings Per Share | (2.17) HK Cents | 7.75 HK Cents | N/A | | Interim Dividend Per Share | 1.00 HK Cents | 2.00 HK Cents | -50.0% | - Three main reasons for revenue decline include: (i) decreased shipments of **Godzilla x Kong** products due to fading movie effects; (ii) slower demand for the **Ninja Turtles** brand due to a lack of major entertainment events; and (iii) **trade tensions** hindering product shipments to the US market[2](index=2&type=chunk) - Gross margin decreased from **56%** in the prior period to **43%**, primarily affected by **US tariffs**, increased **development costs** for new products, and **clearance costs** for discontinued products[3](index=3&type=chunk) - The company anticipates **ongoing challenges** from global trade changes, with **current tariff measures** negatively impacting profitability, and is evaluating **alternative sourcing options** while planning **selective price adjustments** to mitigate some effects[4](index=4&type=chunk) [Brand Overview and Development](index=2&type=section&id=Brand%20Overview%20and%20Development) The company is actively developing new product lines for core IPs, including a **Ninja Turtles** series, newly acquired global licensing for **Hasbro's Power Rangers** with positive reception, and new toy series for **Godzilla x Kong** and **Winx** aligned with upcoming media content - **Ninja Turtles**: A **four-season series** is being produced to connect the movie and its **2027 sequel**, with the company actively developing **new products** to align with the content release[5](index=5&type=chunk) - **Power Rangers**: A **global licensing agreement** has been signed with **Hasbro** to develop the **Mighty Morphin Power Rangers: Re-Ignition** toy series, with initial products shipped and **positive preliminary consumer response**[6](index=6&type=chunk) - **Godzilla x Kong**: As a **major global toy licensee**, the company will continue to **develop and expand its product series**[7](index=7&type=chunk) - **Winx**: To coincide with the reboot series premiering on **Netflix** in **October 2025**, a **new fashion doll and role-play toy series** will be launched this autumn[8](index=8&type=chunk) [Condensed Consolidated Financial Information](index=3&type=section&id=Condensed%20Consolidated%20Financial%20Information) [Condensed Consolidated Statement of Profit or Loss](index=3&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) For H1 2025, the company reported revenue of **HKD 186 million**, a **58.3% decrease**, resulting in an **operating loss of HKD 45.29 million** and a **net loss of HKD 25.61 million** due to reduced revenue and gross margin H1 2025 Statement of Profit or Loss Summary | Item (HKD Thousands) | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Revenue | 185,514 | 445,141 | | Gross Profit | 79,360 | 249,447 | | Operating (Loss)/Profit | (45,293) | 68,435 | | (Loss)/Profit Before Income Tax | (15,517) | 117,420 | | (Loss)/Profit Attributable to Owners of the Company | (25,610) | 91,458 | [Condensed Consolidated Statement of Financial Position](index=4&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the company's **total assets were HKD 1.32 billion**, with **net assets of HKD 1.10 billion** and **net current assets of HKD 1.07 billion**, indicating a **strong financial position** with **HKD 1.03 billion in cash and bank balances** Statement of Financial Position Summary | Item (HKD Thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Assets | 1,320,066 | 1,425,132 | | Total Liabilities | 215,294 | 224,010 | | Net Assets | 1,104,772 | 1,201,122 | | Cash and Bank Balances | 1,028,781 | 1,043,325 | | Trade Receivables | 44,435 | 136,670 | [Notes to the Condensed Consolidated Financial Information](index=5&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Information) Notes reveal a **single business segment**, significant revenue decline in the **Americas**, **high customer concentration**, decreased **other income** due to lower investment and interest gains, and a **50% reduction in interim dividend** to **HKD 0.01 per share** [Revenue and Segment Information](index=5&type=section&id=Revenue%20and%20Segment%20Information) The company operates in a **single segment** (toys and home entertainment), with the **Americas** as the primary but significantly declining revenue source, **European revenue halved**, and **high customer concentration** where the **top three clients account for approximately 71% of total revenue** Revenue by Region (HKD Thousands) | Region | H1 2025 | H1 2024 | | :--- | :--- | :--- | | United States | 131,459 | 309,454 | | Other Americas | 20,217 | 25,826 | | Europe | 31,351 | 90,536 | | Other Asia Pacific excluding Hong Kong | 2,487 | 18,549 | - The Group has **three major customers** whose transactions account for **over 10% of total revenue**, with sales revenue of approximately **HKD 56.57 million**, **HKD 51.05 million**, and **HKD 24.01 million**, respectively[18](index=18&type=chunk) [Net Other Income](index=6&type=section&id=Net%20Other%20Income) Net other income decreased from **HKD 50.82 million** to **HKD 30.72 million**, primarily due to reduced **unrealized and realized gains from financial assets** and **lower interest income** Net Other Income Details (HKD Thousands) | Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Net Gains from Financial Assets | 9,009 | 20,742 | | Interest Income | 21,149 | 29,811 | | **Total** | **30,718** | **50,822** | [Dividends](index=8&type=section&id=Dividends) The Board declared an **interim dividend of HKD 0.01 per share** for H1 2025, a **50% reduction** from **HKD 0.02 per share** in the prior period - The Board resolved to declare an **interim dividend** of **HKD 0.01 per share**, compared to **HKD 0.02 per share** in the prior period[23](index=23&type=chunk) [Loss/Earnings Per Share](index=9&type=section&id=Loss%2FEarnings%20Per%20Share) Due to the company's shift from profit to loss, **basic loss per share was HKD 0.0217**, compared to **basic earnings per share of HKD 0.0775** in the prior period - **Basic loss per share** was **HKD 0.0217**, calculated based on the loss attributable to owners of the company of **HKD 25.61 million**[26](index=26&type=chunk) [Trade Receivables](index=9&type=section&id=Trade%20Receivables) Trade receivables significantly decreased from **HKD 137 million** to **HKD 44.44 million**, reflecting lower H1 sales, with approximately **85% of receivables aged within 60 days** Trade Receivables Aging Analysis (HKD Thousands) | Aging | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | 0 to 60 days | 37,981 | 89,307 | | 61 to 90 days | 5,334 | 35,777 | | Over 90 days | 1,120 | 11,586 | | **Total** | **44,435** | **136,670** | [Financial Analysis and Other Information](index=11&type=section&id=Financial%20Analysis%20and%20Other%20Information) [Financial Analysis](index=11&type=section&id=Financial%20Analysis) The Group maintains a **robust financial position** with a **current ratio of 6.0** and **HKD 1.03 billion in cash**, holding an **HKD 85.04 million listed securities portfolio** (6.4% of total assets), with **USD sales naturally hedged** by the HKD-USD peg - As of **June 30, 2025**, the Group's **current ratio was 6.0**, with ample cash and bank balances of **HKD 1.029 billion**[30](index=30&type=chunk) - The treasury investment portfolio was valued at **HKD 85.04 million**, representing **6.4% of total assets**, with top ten holdings including **NVIDIA**, **Amazon**, **Microsoft**, **Tencent Holdings**, and **Alibaba**[31](index=31&type=chunk) [Share Repurchases and Corporate Governance](index=11&type=section&id=Share%20Repurchases%20and%20Corporate%20Governance) During the period, the **share award scheme trustee purchased 3 million shares** in the open market, and while the company largely complied with corporate governance codes, the **roles of Chairman and CEO are not separated**, though the Board deems the current structure appropriate - During the period, the trustee of the **share award scheme** purchased a total of **3 million shares** in the open market for a total consideration of approximately **HKD 1.68 million**[33](index=33&type=chunk) - The company did not comply with **Corporate Governance Code Provision C.2.1**, which stipulates that the roles of **Chairman and Chief Executive Officer** should be **separate**; however, the Board believes the current structure, where **executive directors jointly manage daily operations**, ensures **effective management**[34](index=34&type=chunk)

Financial Performance - Revenue for the six months ended June 30, 2025, was $83,550,000, representing a 5.9% increase compared to $78,910,000 for the same period in 2024[4] - Gross profit for the same period was $55,897,000, slightly up by 0.2% from $55,776,000 in 2024[4] - Profit attributable to owners of the company increased by 5.1% to $19,785,000 from $18,828,000 year-over-year[4] - Basic and diluted earnings per share rose to 2.40 cents, a 5.3% increase from 2.28 cents in the previous year[4] - Operating profit for the period was $16,833,000, an increase from $15,871,000 in the prior year[5] - Total comprehensive income for the period was $25,635,000, compared to $14,871,000 in 2024[6] - Revenue for the six months ended June 30, 2025, was $83,550 thousand, an increase from $78,910 thousand for the same period in 2024, representing a growth of approximately 2.0%[17] - The cost of goods sold for the six months ended June 30, 2025, was $14,857 thousand, an increase from $12,288 thousand in 2024, representing a rise of about 20.9%[22] - The income tax expense for the six months ended June 30, 2025, was $3,322 thousand, compared to $2,103 thousand in 2024, reflecting an increase of approximately 58.0%[23] - Employee benefits expenses increased to $30,959 thousand for the six months ended June 30, 2025, compared to $29,043 thousand in 2024, marking an increase of about 6.6%[22] - The depreciation of property, plant, and equipment for the six months ended June 30, 2025, was $1,212 thousand, up from $1,003 thousand in 2024, indicating a growth of approximately 20.8%[22] - The group recorded a net foreign exchange gain of $1.5 million for the six months ended June 30, 2025, compared to a net loss of $0.7 million for the same period in 2024[81] - Net income attributable to the company's owners increased by 5.1% from $18.8 million to $19.8 million, driven by increased foreign exchange gains and reduced tax expenses[75] Assets and Liabilities - Non-current assets increased to $82,543,000 from $69,553,000 as of December 31, 2024[7] - Current assets totaled $363,259,000, slightly up from $361,457,000 at the end of 2024[7] - Total liabilities decreased to $35,819,000 from $36,633,000 in the previous year[8] - Cash and bank balances decreased from $248.6 million as of December 31, 2024, to $237.1 million as of June 30, 2025, primarily due to dividend payments of $10.6 million[77] - The current ratio was approximately 12.2 times as of June 30, 2025, compared to 11.8 times as of December 31, 2024[78] - The net current asset value increased by 0.8% from $330.7 million as of December 31, 2024, to $333.5 million as of June 30, 2025[79] Revenue Breakdown - Revenue from external customers in the Asia-Pacific region was $27,311 thousand for the six months ended June 30, 2025, compared to $23,955 thousand in 2024, reflecting a growth of about 14.0%[18] - Revenue from the Asia-Pacific region increased significantly to $27.3 million, a year-on-year growth of 14.0%[44] - Revenue from Europe, the Middle East, and Africa rose by 17.0% to $22.4 million, driven by sales growth of proprietary balloon products in direct and distribution markets[45] - Revenue from Japan decreased by 14.8% to $16.1 million due to a shift in sales strategy, although marketing expenses were significantly reduced[46] - Revenue from the U.S. market increased by 20.0% to $8.0 million, attributed to significant sales growth of coronary and peripheral balloons[48] - Revenue from third-party products increased by 20.6% to $4.6 million, driven by sales growth in Indonesia[61] Corporate Governance and Compliance - The company is focused on compliance with the corporate governance code as per the listing rules, ensuring transparency and accountability[101] - The independent auditor has conducted a review of the interim financial data in accordance with the relevant standards, ensuring the integrity of the financial reporting[98] - The company is committed to adhering to the regulations set forth by the Hong Kong Stock Exchange and other applicable laws, reinforcing its operational legitimacy[101] Future Plans and Developments - The company plans to adopt new accounting standards effective January 1, 2026, which are not expected to have a significant impact on the financial position or performance[15] - The company plans to accelerate product registration in Taiwan following the acquisition of a local distributor, aiming to expand its product portfolio[57] - The company expects the new generation Scoreflex QUAD balloon to launch in Q4 2025, which is anticipated to reverse the revenue decline in the Japanese market[57] - The company is constructing its largest R&D and manufacturing facility in Hangzhou, China, expected to be operational by 2027, increasing annual production capacity by approximately 2.4 million units[55] - The group plans to utilize the net proceeds from the global offering for ongoing product development and capacity expansion, with a total expected use of $31.6 million[90] Employee and Talent Management - The group employed 1,432 employees as of June 30, 2025, with employee benefit expenses amounting to approximately $31.0 million for the six months ended June 30, 2025, compared to $29.0 million for the same period in 2024[89] - The company has adopted various incentive plans, including stock option plans and share reward plans, to motivate and retain talent[103] Dividends - The company declared a final dividend of HKD 0.10 per share (approximately USD 0.0128), totaling about USD 10.61 million for the year ending December 31, 2024[30] - The board declared a special dividend of HKD 0.15 per ordinary share, payable on October 6, 2025, in addition to a previously declared final dividend of HKD 0.10 per ordinary share[91]

[Performance Summary](index=1&type=section&id=Performance%20Summary) [Overall Performance Overview](index=1&type=section&id=Overall%20Performance%20Overview) The Group achieved steady growth in H1 2025, with core business profit and profit attributable to shareholders both increasing by 2%, driven by renewable energy and stable gas business, and declared its first interim dividend Core Financial Indicators | Indicator | H1 2025 | Change | | :--- | :--- | :--- | | Business Core Profit | HKD 719 million | +2% | | Profit Attributable to Company Shareholders | HKD 758 million | +2% | | Interim Dividend | HKD 0.05 per share | First-time payout | - Growth was primarily driven by the continuous development of the renewable energy business and the stable performance of gas business profits, with contributions also from quality and efficiency improvement measures and successful reduction in financing costs[4](index=4&type=chunk) [Segment Business Highlights](index=1&type=section&id=Segment%20Business%20Highlights) Renewable energy net profit grew 5% with expanding grid-connected solar and storage capacity, while city gas maintained stable sales volume and improved comprehensive price spread despite challenges, and the Group successfully issued its second quasi-REIT product to enhance cash flow and reinvestment capacity - Renewable energy business net profit increased by **5%** to approximately **HKD 172 million**, with cumulative grid-connected solar PV reaching **2.6 GW** and industrial and commercial energy storage reaching **260 MWh**[4](index=4&type=chunk) - City gas business comprehensive price spread increased by **RMB 0.01** to **RMB 0.57 per cubic meter**, with customer base growing by **380,000 households**[4](index=4&type=chunk) - Successfully issued 'Zero-Carbon Smart Phase 2' quasi-REIT product, raising a total of **RMB 1 billion** across two phases, with funds allocated for renewable energy project investments[4](index=4&type=chunk) [Key Performance Indicators](index=2&type=section&id=Key%20Performance%20Indicators) The Group's H1 2025 turnover was HKD 10.437 billion, largely flat year-on-year, with profit attributable to shareholders at HKD 758 million, up 2%, and basic earnings per share at HKD 0.218, while grid-connected solar PV capacity and gas customer numbers both achieved steady growth Unaudited Business Highlights for H1 2025 | Indicator | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Turnover (HKD million) | 10,437 | 10,501 | | Business Core Profit (HKD million) | 719 | 707 | | Profit Attributable to Shareholders (HKD million) | 758 | 743 | | Basic Earnings Per Share (HK cents) | 21.8 | 22.1 | | Gas Sales Volume (million cubic meters) | 8,746 | 8,741 | | Cumulative Grid-connected Solar PV (GW) | 2.6 | 2.1 | | City Gas Customer Accounts (million accounts) | 18.02 | 17.22 | [Financial Statements](index=3&type=section&id=Financial%20Statements) [Condensed Consolidated Income Statement](index=3&type=section&id=Condensed%20Consolidated%20Income%20Statement) For the six months ended June 30, 2025, the Group's turnover was HKD 10.437 billion, a slight year-on-year decrease, while profit before tax remained stable at HKD 1.105 billion due to lower financing costs and increased share of results from associates/joint ventures, resulting in a 2% increase in profit attributable to company shareholders to HKD 758 million Summary of Condensed Consolidated Income Statement (For the six months ended June 30) | Item (HKD thousand) | 2025 (Unaudited) | 2024 (Unaudited) | | :--- | :--- | :--- | | Turnover | 10,436,971 | 10,500,990 | | Total Operating Expenses | (9,626,493) | (9,550,931) | | Share of Results of Associates | 211,784 | 110,949 | | Financing Costs | (331,135) | (359,423) | | Profit Before Tax | 1,105,216 | 1,101,864 | | Profit for the Period Attributable to Company Shareholders | 758,391 | 742,714 | | Basic Earnings Per Share (HK cents) | 21.8 | 22.1 | [Condensed Consolidated Statement of Financial Position](index=5&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's total assets increased to HKD 55.238 billion and net assets to HKD 26.649 billion, with non-current assets growing due to increased property, plant, and equipment, while net current liabilities expanded primarily due to higher borrowings due within one year Summary of Financial Position | Item (HKD thousand) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Assets | 55,237,808 | 53,042,747 | | Total Liabilities | 28,589,269 | 27,284,727 | | Net Assets | 26,648,539 | 25,758,020 | | Equity Attributable to Company Shareholders | 24,214,813 | 23,447,738 | - As of June 30, 2025, the Group's current liabilities exceeded current assets by approximately **HKD 6.719 billion**, but the Directors believe the Group has sufficient unutilized credit facilities and financing channels to maintain its going concern[11](index=11&type=chunk) [Segment Information](index=8&type=section&id=Segment%20Information) The Group's businesses are primarily categorized into gas, renewable energy, and extended businesses, with gas remaining the main revenue source contributing HKD 9.674 billion in turnover, while renewable energy turnover was HKD 762 million with a HKD 171 million performance contribution, showing year-on-year growth, following a reorganization of the Group's internal reporting structure for business segments H1 2025 Segment Turnover and Performance (HKD thousand) | Business Segment | Turnover | Performance | | :--- | :--- | :--- | | Gas Business | 9,674,490 | 911,675 | | Renewable Energy Business | 762,481 | 170,877 | | Extended Business | - | 21,562 | - Compared to the same period last year, gas business turnover slightly decreased, primarily due to reduced gas connection revenue, while renewable energy business turnover and performance both achieved growth[17](index=17&type=chunk)[18](index=18&type=chunk) - During the period, the Group reorganized its extended businesses and adjusted its internal reporting structure, reclassifying gas appliance sales and similar items under the gas business[14](index=14&type=chunk) [Management Discussion and Analysis](index=18&type=section&id=Management%20Discussion%20and%20Analysis) [Business Review](index=18&type=section&id=Business%20Review) In H1 2025, the Group navigated a complex market, with city gas enhancing profitability through refined management and price adjustments while maintaining stable sales, and renewable energy achieving rapid growth as a key profit driver via its 'PV+Storage+Power Sales' integrated model and innovative asset management strategies [City Gas Business](index=18&type=section&id=City%20Gas%20Business) Despite challenges from a warm winter and sluggish real estate market, the Group maintained stable gas sales, growing customers to 18.02 million, while improving city gas comprehensive price spread to RMB 0.57 per cubic meter through active price adjustments and cost control, and expanding 'Gas+' integrated energy services with AI for enhanced operational efficiency and safety - Despite a **0.9%** decline in national natural gas consumption, the Group maintained stable gas sales volume[31](index=31&type=chunk) - City gas comprehensive price spread increased by **RMB 0.01** to **RMB 0.57 per cubic meter**[31](index=31&type=chunk) - Actively promoted 'Gas+' business, expanding integrated energy services such as industrial and commercial energy-saving renovations and energy trusteeship[31](index=31&type=chunk) [Renewable Energy Business](index=19&type=section&id=Renewable%20Energy%20Business) Renewable energy business achieved HKD 172 million net profit, up 5%, with the Group focusing on 'Zero-Carbon Smart Industrial Parks' as its core model, reaching 2.6 GW of industrial and commercial distributed PV and 260 MWh of grid-connected storage, building an integrated 'PV+Storage+Power Sales' service system through 'Energy-as-a-Service' (EaaS) and 'Assets Under Management' (AuM) strategies, and expanding financing channels via quasi-REITs - The renewable energy segment achieved a net profit of approximately **HKD 172 million** in the first half, a **5%** year-on-year increase[33](index=33&type=chunk) - Vigorously developed 'Energy-as-a-Service' (EaaS), building an integrated 'PV+Storage+Power Sales' service system[34](index=34&type=chunk) - Deepened the 'Assets Under Management' (AuM) strategy, successfully issuing two tranches of quasi-REIT products, raising **RMB 1 billion**[34](index=34&type=chunk) [Environmental, Social and Governance (ESG)](index=20&type=section&id=Environmental%2C%20Social%20and%20Governance%20%28ESG%29) The Group deeply integrates ESG strategy into operational decisions, establishing an ESG Committee led by the CEO, maintaining leading ESG ratings in H1, including three consecutive years in S&P Global's 'Sustainability Yearbook (China Edition)', and continuously enhancing its sustainable development performance through green financial products like quasi-REITs and community initiatives - An ESG Committee, led by the CEO, has been established at the Board level, specifically responsible for coordinating sustainable development goals[35](index=35&type=chunk) - Selected for S&P Global's 'Sustainability Yearbook (China Edition)' for **three consecutive years**, with improved performance in the FTSE4Good Index[35](index=35&type=chunk) [Business Outlook](index=21&type=section&id=Business%20Outlook) Looking ahead to H2, the Group anticipates a challenging business environment and will adopt a prudent financial strategy, with gas business deepening 'Gas+' integrated energy services and advancing AI-enabled initiatives for efficiency and cost reduction, while renewable energy is expected to remain a primary profit driver, focusing on technological innovation and energy storage R&D, aiming for stable gas growth with renewable energy as the development engine - Gas Business: Focus on breaking into the public institution energy cost trusteeship and industrial and commercial energy-saving renovation markets, fully advancing AI empowerment initiatives[37](index=37&type=chunk) - Renewable Energy Business: Expected to continue as one of the main drivers of the Group's profit growth, accelerating technological innovation and energy storage technology R&D[37](index=37&type=chunk) - Overall Strategy: Maintain steady growth in the city gas business, use renewable energy business as the development engine, and optimize cash flow management[38](index=38&type=chunk) [Financial Review](index=22&type=section&id=Financial%20Review) [Operating Performance Analysis](index=22&type=section&id=Operating%20Performance%20Analysis) In H1 2025, the Group's total turnover was HKD 10.437 billion, a slight 1% year-on-year decrease primarily due to reduced gas connection sales from a sluggish real estate market, while total operating expenses increased by 1%, yet profit attributable to company shareholders grew by 2% to HKD 758 million, benefiting from significant profit growth from associates and joint ventures and lower financing costs Segment Turnover (HKD billion) | Business Segment | H1 2025 | H1 2024 (Restated) | | :--- | :--- | :--- | | Gas Business | 9.674 | 9.746 | | Renewable Energy Business | 0.763 | 0.755 | | **Total** | **10.437** | **10.501** | - Share of profit from associates increased by **91%** year-on-year to **HKD 212 million**, primarily due to price adjustment efforts and the disposal of interests in certain subsidiaries[44](index=44&type=chunk) - Financing costs decreased by **8%** year-on-year to **HKD 331 million**, attributed to strict control over capital expenditures and securing lower-interest loans[46](index=46&type=chunk) [Liquidity and Capital Resources](index=24&type=section&id=Liquidity%20and%20Capital%20Resources) The Group maintains prudent financial management, with total borrowings at HKD 16.23 billion and a gearing ratio of 36% as of June 30, 2025, possessing ample liquidity including HKD 3.343 billion in cash and deposits, approximately HKD 13.582 billion in medium-term note facilities, and HKD 10.442 billion in unutilized credit facilities, further expanding financing channels with the successful issuance of RMB 470 million in quasi-REIT products in H1 Summary of Financial Position | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Borrowings | HKD 16.23 billion | HKD 15.427 billion | | Cash and Deposits | HKD 3.343 billion | HKD 2.73 billion | | Gearing Ratio | 36% | 36% | - The Group possesses approximately **HKD 13.582 billion** in medium-term note facilities and **HKD 10.442 billion** in unutilized credit facilities, indicating ample financial resources[50](index=50&type=chunk) - Most non-RMB borrowings have been hedged using cross-currency swap contracts to mitigate foreign exchange risk[49](index=49&type=chunk) [Other Significant Matters](index=25&type=section&id=Other%20Significant%20Matters) [Credit Ratings](index=25&type=section&id=Credit%20Ratings) The Group maintained strong investment-grade credit ratings from Moody's (Baa1), S&P (BBB+), and China Chengxin International (AAA), all with a 'stable' outlook, reflecting rating agencies' recognition of the Group's robust business and credit history Key Credit Ratings | Rating Agency | Rating | Outlook | | :--- | :--- | :--- | | Moody's | Baa1 | Stable | | S&P | BBB+ | Stable | | China Chengxin International | AAA | Stable | [Dividend Policy](index=25&type=section&id=Dividend%20Policy) The Board declared an interim dividend of HKD 0.05 per share with a scrip dividend option, aiming to reward shareholder support, with share transfer registration suspended from September 2 to 4, 2025 - Declared an interim dividend of **HKD 0.05 per share**, with shareholders having the option of a scrip dividend[55](index=55&type=chunk) - The record date for shareholders entitled to the interim dividend is set for **September 4, 2025**[5](index=5&type=chunk) [Human Resources](index=25&type=section&id=Human%20Resources) As of June 30, 2025, the Group employed 23,556 staff, a slight decrease from the prior year, implementing a performance-based remuneration policy and providing comprehensive benefits and training to attract and retain talent - As of **June 30, 2025**, the Group's total number of employees was **23,556**, compared to **24,171** in the same period last year[54](index=54&type=chunk) [Corporate Governance and Compliance](index=26&type=section&id=Corporate%20Governance%20and%20Compliance) During the reporting period, the Company consistently complied with the Corporate Governance Code in the Hong Kong Listing Rules, with all Directors confirming adherence to the Model Code for Securities Transactions by Directors, and no purchases, sales, or redemptions of the Company's listed securities by the Company or its subsidiaries occurred, except for the share award scheme - The Company consistently complied with the Corporate Governance Code during the reporting period[57](index=57&type=chunk) - During the period, the trustee purchased **11,607,000** Company shares under the share award scheme[59](index=59&type=chunk)

[Financial Statements](index=1&type=section&id=Financial%20Statements) [Interim Condensed Consolidated Income Statement](index=1&type=section&id=Interim%20Condensed%20Consolidated%20Income%20Statement) The Group's total revenue increased by 14.9% to RMB 2.10 billion, with operating profit up 7.6% to RMB 850 million, and profit attributable to equity holders of the Company rising 14.9% to RMB 361 million Six-Month Performance Summary as of June 30, 2025 | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 2,099,133 | 1,826,884 | +14.9% | | Operating Profit | 850,644 | 790,520 | +7.6% | | Profit Before Income Tax | 715,826 | 634,718 | +12.8% | | Profit for the Period | 543,342 | 467,595 | +16.2% | | Profit Attributable to Equity Holders of the Company | 360,764 | 313,938 | +14.9% | | Basic Earnings Per Share (RMB) | 0.2156 | 0.1876 | +14.9% | [Interim Condensed Consolidated Statement of Comprehensive Income](index=2&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) During the reporting period, the Group's total comprehensive income was RMB 543 million, a 16.1% increase from RMB 468 million in the prior year, with RMB 360 million attributable to equity holders of the Company, up 14.8% Total Comprehensive Income | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Profit for the Period | 543,342 | 467,595 | +16.2% | | Other Comprehensive (Loss)/Income for the Period | (319) | 178 | - | | **Total Comprehensive Income for the Period** | **543,023** | **467,773** | **+16.1%** | | Attributable to Equity Holders of the Company | 360,445 | 314,116 | +14.8% | [Interim Condensed Consolidated Statement of Financial Position](index=3&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's total assets were RMB 37.38 billion, largely unchanged from the beginning of the year, while total liabilities decreased by 2.1% to RMB 21.63 billion, and total equity increased to RMB 15.75 billion, with RMB 12.01 billion attributable to equity holders of the Company Financial Position Summary | Metric | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change | | :--- | :--- | :--- | :--- | | **Total Assets** | **37,379,135** | **37,506,791** | **-0.3%** | | Non-Current Assets | 34,802,264 | 35,255,778 | -1.3% | | Current Assets | 2,576,871 | 2,251,013 | +14.5% | | **Total Liabilities** | **21,633,700** | **22,100,654** | **-2.1%** | | Non-Current Liabilities | 17,225,199 | 16,837,687 | +2.3% | | Current Liabilities | 4,408,501 | 5,262,967 | -16.2% | | **Total Equity** | **15,745,435** | **15,406,137** | **+2.2%** | | Equity Attributable to Equity Holders of the Company | 12,007,565 | 11,848,306 | +1.3% | - At the end of the reporting period, the Group's current liabilities exceeded current assets by **RMB 1.832 billion**; however, the Board believes the Group can meet its obligations within the next twelve months, based on projected cash flows, available bank financing, and internal funds, thus preparing financial statements on a going concern basis[9](index=9&type=chunk) [Notes to the Financial Information](index=5&type=section&id=Notes%20to%20the%20Financial%20Information) [Revenue and Segment Information](index=6&type=section&id=Revenue%20and%20Segment%20Information) The Group's primary business involves investing, constructing, operating, and managing expressways and bridges in Guangdong and other high-growth provinces in China, with total revenue of RMB 2.10 billion entirely from the toll road operation segment, where toll revenue accounts for 98.1% Revenue Composition for H1 2025 | Revenue Source | Amount (RMB thousands) | % of Total Revenue | | :--- | :--- | :--- | | Toll Revenue | 2,059,330 | 98.1% | | Revenue from Service Areas and Gas Stations | 19,109 | 0.9% | | Revenue from Entrusted Highway Management Services | 16,554 | 0.8% | | Other Toll Operation Revenue | 4,140 | 0.2% | | **Total** | **2,099,133** | **100.0%** | - Geographical segment information is not presented separately as all major operating entities, revenue sources, and most assets of the Group are located in China[17](index=17&type=chunk) [Expenses by Nature](index=9&type=section&id=Expenses%20by%20Nature) During the reporting period, amortization of intangible operating rights was the largest component of total expenses, reaching **RMB 885 million**, a 26.3% increase, while total staff costs amounted to **RMB 217 million**, up 16.4% Key Expense Items | Expense Item | 2025 (RMB thousands) | 2024 (RMB thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Amortization of Intangible Operating Rights | 884,751 | 700,470 | +26.3% | | Total Staff Costs | 217,421 | 186,337 | +16.7% | | Maintenance Expenses for Toll Roads and Bridges | 56,982 | 65,908 | -13.5% | | Operating Expenses for Toll Roads and Bridges | 54,797 | 45,209 | +21.2% | [Dividends](index=11&type=section&id=Dividends) The Board resolved to declare an interim dividend of **HKD 0.12** per share for 2025, consistent with the prior year, totaling approximately **RMB 183 million** - The Board resolved on August 15, 2025, to declare an interim dividend of **HKD 0.12** per share, totaling approximately **RMB 183 million**[31](index=31&type=chunk) [Management Discussion and Analysis](index=14&type=section&id=Management%20Discussion%20and%20Analysis) [Business Review](index=14&type=section&id=Business%20Review) This section outlines the Group's portfolio of toll roads, bridges, and port assets, detailing their operational metrics, equity interests, and toll expiry dates, alongside analyses of H1 average daily toll revenue, traffic volume changes, quarterly distribution, and vehicle type composition H1 2025 YoY Change in Average Daily Toll Revenue and Traffic Volume for Selected Road Assets | Project Name | Average Daily Toll Revenue (RMB/day) | YoY Change | Average Daily Toll Traffic Volume (Vehicles/day) | YoY Change | | :--- | :--- | :--- | :--- | :--- | | **Subsidiaries** | | | | | | Guangzhou Northern Second Ring Expressway | 2,722,765 | 0.0% | 294,098 | 1.8% | | Hubei Suiyue South Expressway | 1,981,048 | 6.9% | 32,059 | 2.1% | | Hubei Hancai Expressway | 789,586 | 18.0% | 54,099 | 8.5% | | Hubei Han'e Expressway | 850,045 | 57.5% | 57,667 | 31.8% | | **Associates and Joint Ventures** | | | | | | Humen Bridge | 2,128,420 | -26.5% | 80,791 | -24.7% | [Overview of Operating Performance](index=20&type=section&id=Overview%20of%20Operating%20Performance) In H1 2025, China's economy showed stable growth with national GDP up 5.3%, while key operating regions like Guangdong, Guangxi, Hunan, Hubei, and Henan also reported strong GDP growth, providing a favorable macro environment for traffic infrastructure, further supported by continuous growth in national vehicle ownership H1 2025 GDP Growth in Key Operating Regions | Region | H1 2025 GDP (RMB hundred millions) | YoY Growth Rate | | :--- | :--- | :--- | | National | 660,536 | 5.3% | | Guangdong Province | 68,725 | 4.2% | | Guangxi Zhuang Autonomous Region | 13,851 | 5.5% | | Hunan Province | 26,167 | 5.6% | | Hubei Province | 29,643 | 6.2% | | Henan Province | 31,684 | 5.7% | - Revisions to the Highway Law and Toll Road Management Regulations are included in the Ministry of Transport's 2025 legislative plan, indicating potential future changes in industry policy[52](index=52&type=chunk) [Business Enhancement and Innovation](index=22&type=section&id=Business%20Enhancement%20and%20Innovation) The Group achieved significant results through lean management, enhancing profitability, efficiency, and service quality by expanding revenue streams via traffic diversion, combating toll evasion, and developing 'expressway+' businesses, while also promoting new technologies, digital transformation, and building an integrated smart transportation platform - Actively expanding diversified revenue sources, deepening the 'expressway+' concept, revitalizing resources such as service areas and roadside land, and advancing roadside photovoltaic power generation projects[55](index=55&type=chunk) - Continuously advancing innovative technology applications, including promoting smart tolling technology, building an integrated smart transportation system platform, and having multiple projects selected as Ministry of Transport pilot programs for infrastructure digital transformation and upgrading[57](index=57&type=chunk) [Investment Progress and Risks](index=24&type=section&id=Investment%20Progress%20and%20Risks) The Group's core investment, the Guangzhou Northern Second Ring Expressway expansion project, commenced full construction in June 2024, with work progressing orderly, while management has identified and addressed key risks including parallel road competition, construction, operation, investment, and integrity risks to ensure smooth project execution - The core strategic project, the **Guangzhou Northern Second Ring Expressway expansion project**, achieved critical progress, obtaining construction permits and commencing full construction on June 20, 2024[60](index=60&type=chunk) - The company faces key risks including: 1) diversion impact on some road assets from surrounding parallel expressways (e.g., Anluo, Wuyang, Shenzhen-Zhongshan Link); 2) construction, operation, investment overrun, and integrity risks for the Guangzhou Northern Second Ring expansion project[61](index=61&type=chunk)[63](index=63&type=chunk)[66](index=66&type=chunk)[67](index=67&type=chunk) [Operating Performance of Road Assets](index=28&type=section&id=Operating%20Performance%20of%20Road%20Assets) Most projects saw increased traffic and toll revenue due to travel growth and a low base; however, key assets like Henan Weixu/Lanwei Expressways, Hubei Daguangnan Expressway, and Humen Bridge experienced YoY declines in average daily toll revenue due to diversion from newly opened or discounted parallel routes, with Humen Bridge notably seeing over 20% drops in both revenue and traffic - Hubei Han'e Expressway's average daily toll revenue increased by **57.5%** YoY, primarily due to traffic (mainly trucks) rerouting from the closed Wuhan-Huangshi Expressway, a competing route[78](index=78&type=chunk) - Humen Bridge's average daily toll revenue decreased by **26.5%** YoY, with traffic volume down **24.7%**, primarily due to significant diversion caused by the opening of the Shenzhen-Zhongshan Link, a competing route, on June 30, 2024[83](index=83&type=chunk) - Henan Weixu Expressway and Henan Lanwei Expressway's average daily toll revenues decreased by **7.6%** and **4.4%** respectively, mainly due to diversion from Anluo Expressway's differentiated toll policy and traffic restrictions on Beijing-Hong Kong-Macau Expressway construction, leading to reduced high-toll truck traffic[73](index=73&type=chunk)[74](index=74&type=chunk) [Financial Review](index=34&type=section&id=Financial%20Review) This section reviews the Group's financial performance and position, highlighting a 14.9% YoY increase in revenue and profit attributable to equity holders, driven by new acquisitions and strong road asset growth, while operating costs rose, financial expenses decreased due to lower interest rates and optimized debt structure, and the capital gearing ratio improved from 50.0% to 48.5% [Overview of Operating Results](index=34&type=section&id=Overview%20of%20Operating%20Results) During the reporting period, the Group's revenue grew by 14.9% to **RMB 2.10 billion**, and profit attributable to equity holders increased by 14.9% to **RMB 361 million**, driven by the consolidation of Henan Pinglin Expressway, increased revenue from Hubei Han'e Expressway due to competitor road closure, and reduced finance costs from lower interest rates and optimized debt structure, with the Board declaring an interim dividend of **HKD 0.12** per share, representing a payout ratio of **50.6%** Key Operating Performance Data | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | Change | | :--- | :--- | :--- | :--- | | Revenue | 2,099,133 | 1,826,884 | 14.9% | | Operating Profit | 850,644 | 790,520 | 7.6% | | Profit Attributable to Equity Holders of the Company | 360,764 | 313,938 | 14.9% | | Basic Earnings Per Share (RMB) | 0.2156 | 0.1876 | 14.9% | [Analysis of Operating Results](index=35&type=section&id=Analysis%20of%20Operating%20Results) During the reporting period, toll revenue increased by 15.2% to **RMB 2.06 billion**, primarily from the newly consolidated Henan Pinglin Expressway, while operating costs rose by 22.7% to **RMB 1.12 billion** due to consolidation and increased amortization of intangible operating rights, leading to a 3.3 percentage point decrease in gross profit margin to **46.8%**, and finance costs decreased by 11.1% to **RMB 222 million** due to lower interest rates and optimized debt structure, with share of results of associates and joint ventures declining by 4.4% mainly due to Humen Bridge's performance - Toll revenue increased by **15.2%** YoY, primarily due to the consolidation of Henan Pinglin Expressway's financial performance and increased revenue from Hubei Han'e Expressway due to the closure of a competing road section[93](index=93&type=chunk) - Operating costs increased by **22.7%** YoY, mainly due to the consolidation of Henan Pinglin Expressway and increased amortization of intangible operating rights, leading to an overall cost ratio increase of **3.3 percentage points** to **53.2%**[97](index=97&type=chunk) - Finance costs decreased by **11.1%** YoY, primarily due to management's continuous optimization of debt structure, reduction in debt interest rates, and a decline in market interest rates, with the overall weighted average interest rate falling from **3.05%** to **2.57%**[106](index=106&type=chunk) [Analysis of Financial Position](index=42&type=section&id=Analysis%20of%20Financial%20Position) At the end of the reporting period, the Group's total assets were **RMB 37.38 billion**, total liabilities were **RMB 21.63 billion**, and the capital gearing ratio improved from **50.0%** at the beginning of the year to **48.5%**, with total debt of **RMB 17.02 billion**, of which bank borrowings accounted for **63.4%**, and the debt structure was primarily domestic RMB long-term borrowings with a fixed-to-floating interest rate ratio of approximately **38:62**, while net cash generated from operating activities was **RMB 1.45 billion**, a 22.3% YoY increase, demonstrating strong cash generation capability Capital Structure and Financial Ratios | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Net Debt (RMB thousands) | 14,852,769 | 15,409,268 | | Total Equity (RMB thousands) | 15,745,435 | 15,406,137 | | **Capital Gearing Ratio (Net Debt/Total Capital)** | **48.5%** | **50.0%** | | **Debt-to-Equity Ratio (Net Debt/Total Equity)** | **94.3%** | **100.0%** | - Net cash generated from operating activities was **RMB 1.45 billion**, a **22.3%** increase from **RMB 1.18 billion** in the prior year[128](index=128&type=chunk) - Of total external borrowings, domestic financing accounted for **99.7%** and was denominated in RMB, with fixed-rate borrowings at **37.8%** and floating-rate borrowings at **62.2%**[142](index=142&type=chunk) [Future Outlook](index=51&type=section&id=Future%20Outlook) [Macroeconomic and Industry Policy Outlook](index=51&type=section&id=Macroeconomic%20and%20Industry%20Policy%20Outlook) Despite international uncertainties, the IMF raised China's 2025 economic growth forecast to **4.8%**, demonstrating economic resilience, while domestic travel continues to recover, benefiting the expressway industry, and revisions to regulations like the 'Toll Road Management Regulations,' particularly the new rule extending the maximum concession period to generally no more than 40 years, could provide longer operating terms for large-scale, long-payback projects - The IMF has raised China's 2025 economic growth forecast to **4.8%**, indicating continued resilience in China's economic growth[147](index=147&type=chunk) - The new 'Administrative Measures for Concession of Infrastructure and Public Utilities' adjusts the maximum concession period to generally no more than **40 years**, benefiting projects with large investment scales and long payback periods[149](index=149&type=chunk) [Company Development Strategy](index=52&type=section&id=Company%20Development%20Strategy) The company will continue the Guangzhou Northern Second Ring Expressway expansion to extend core asset operating periods and solidify its Greater Bay Area strategic position, while adhering to the '3331' development strategy, perfecting three platforms, enhancing three core capabilities, and focusing on three directions, aiming to become a leading domestic transportation infrastructure asset management company - The core strategy is to advance the **Guangzhou Northern Second Ring Expressway expansion**, expected to extend the toll operating period and continuously benefit from the Greater Bay Area's development dividends[150](index=150&type=chunk) - The company will be guided by the **'3331' development strategy**, strengthening its main business through three platforms, three core capabilities, and three focus areas, aiming to become a leading domestic transportation infrastructure asset management company[151](index=151&type=chunk) [Other Information](index=52&type=section&id=Other%20Information) [Corporate Governance and Interim Results Review](index=52&type=section&id=Corporate%20Governance%20and%20Interim%20Results%20Review) The company complied with the Corporate Governance Code, with Mr. He Baiqing, Executive Director and General Manager, resigning due to retirement, and the Group's H1 2025 results have been reviewed by the Board's Audit Committee and company auditors - The company's interim results have been reviewed by the Board's Audit Committee and the company's auditors[154](index=154&type=chunk) [Dividends and Share Transfer Registration](index=53&type=section&id=Dividends%20and%20Share%20Transfer%20Registration) To qualify for the interim dividend, shareholders must complete share transfer registration by 4:30 p.m. on October 31, 2025, as the company will suspend share transfer registration from November 3 to November 5, 2025 - The record date for the interim dividend is November 5, 2025, requiring shareholders to submit transfer documents by 4:30 p.m. on October 31, 2025[156](index=156&type=chunk)

Financial Results - The board meeting for Leoch International Technology Limited is scheduled for August 29, 2025, to consider and approve the unaudited interim results for the six months ending June 30, 2025[2] - The weighted average closing price of the company's shares prior to the exercise of stock options for the fiscal year ending December 31, 2024, was HKD 1.51 per share[2]

[Corporate Information](index=3&type=section&id=CORPORATE%20INFORMATION) This section provides details on the company's board of directors, committees, and administrative contact information [Board of Directors and Committees](index=3&type=section&id=Board%20of%20Directors%20and%20Committees) This section lists the composition of the company's board, including executive, non-executive, and independent non-executive directors, as well as members of the Audit, Remuneration, and Nomination Committees - The Board of Directors includes Chairperson Ms. Wai Siu Kee, CEO Mr. Lee Man Yuen as executive directors, Professor Chan Sun Chi as a non-executive director, and Mr. Wan Chi Keung, Mr. Hing Ka Wai, and Mr. Wong King Wai as independent non-executive directors[4](index=4&type=chunk) - Mr. Hing Ka Wai chairs both the Audit Committee and Remuneration Committee, while Ms. Wai Siu Kee chairs the Nomination Committee, with all committee members being independent non-executive or executive directors[4](index=4&type=chunk)[5](index=5&type=chunk) [Company Administration and Contacts](index=3&type=section&id=Company%20Administration%20and%20Contacts) This section provides the company's administrative contact information, including the company secretary, authorized representatives, registered office, Hong Kong headquarters, principal bankers, auditor, share registrar, and website - The Company Secretary is Mr. Hung Siu Yin, and authorized representatives are Ms. Wai Siu Kee and Mr. Hung Siu Yin[5](index=5&type=chunk)[6](index=6&type=chunk) - The company's registered office is in the Cayman Islands, with its Hong Kong headquarters and principal place of business located in Electric Road, North Point, Hong Kong[5](index=5&type=chunk)[7](index=7&type=chunk) - The auditor is Deloitte Touche Tohmatsu, and the Hong Kong share registrar is Tricor Investor Services Limited[8](index=8&type=chunk)[9](index=9&type=chunk) [Interim Results](index=5&type=section&id=INTERIM%20RESULTS) This section presents the condensed consolidated financial statements for the six months ended June 30, 2025, including profit or loss, financial position, equity changes, and cash flows [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=5&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENT%20OF%20PROFIT%20OR%20LOSS%20AND%20OTHER%20COMPREHENSIVE%20INCOME) For the six months ended June 30, 2025, group revenue slightly decreased, but gross profit and profit for the period significantly increased, with improved basic earnings per share, driven by cost control and foreign exchange differences Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income Key Data | Indicator | For the six months ended June 30, 2025 (thousand HKD) | For the six months ended June 30, 2024 (thousand HKD) | Year-on-year change (%) | | :----------------------- | :----------------------------------- | :----------------------------------- | :----------- | | Revenue | 1,931,959 | 1,989,690 | -2.9% | | Cost of sales | (1,230,588) | (1,414,476) | -13.0% | | Gross profit | 701,371 | 575,214 | +21.9% | | Profit before tax | 394,923 | 297,776 | +32.6% | | Profit for the period | 326,627 | 240,085 | +36.0% | | Other comprehensive income for the period | 93,111 | 283 | +32890.1% | | Total comprehensive income for the period | 419,738 | 240,368 | +74.6% | | Basic earnings per share (HK cents) | 39.6 | 29.1 | +36.1% | - Other comprehensive income for the period significantly increased, primarily due to exchange differences on translation, rising from **615 thousand HKD in 2024** to **92,349 thousand HKD in 2025**[11](index=11&type=chunk) [Condensed Consolidated Statement of Financial Position](index=6&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENT%20OF%20FINANCIAL%20POSITION) As of June 30, 2025, the group's financial position remained robust, with increases in total assets less current liabilities and net assets, and a significant rise in net current assets, indicating improved liquidity Condensed Consolidated Statement of Financial Position Key Data | Indicator | June 30, 2025 (thousand HKD) | December 31, 2024 (thousand HKD) | Change (%) | | :----------------------- | :----------------------- | :----------------------- | :------- | | Non-current assets | 5,911,794 | 5,809,033 | +1.8% | | Current assets | 1,403,568 | 1,387,410 | +1.2% | | Current liabilities | 974,661 | 1,146,176 | -14.9% | | Net current assets | 428,907 | 241,234 | +77.8% | | Total assets less current liabilities | 6,340,701 | 6,050,267 | +4.8% | | Non-current liabilities | 108,743 | 114,297 | -4.8% | | Net assets | 6,231,958 | 5,935,970 | +5.0% | | Total equity | 6,231,958 | 5,935,970 | +5.0% | - Bank borrowings within current liabilities decreased from **587,937 thousand HKD** as of December 31, 2024, to **418,601 thousand HKD** as of June 30, 2025, indicating a reduction in short-term debt burden[13](index=13&type=chunk) [Condensed Consolidated Statement of Changes in Equity](index=8&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENT%20OF%20CHANGES%20IN%20EQUITY) For the six months ended June 30, 2025, the group's total equity increased due to profit for the period and an increase in exchange reserves, also reflecting dividend distributions and transfers to non-distributable and safety fund reserves Condensed Consolidated Statement of Changes in Equity Key Data | Indicator | January 1, 2025 (thousand HKD) | June 30, 2025 (thousand HKD) | Change (thousand HKD) | | :------------------- | :-------------------- | :-------------------- | :------------ | | Total equity | 5,935,970 | 6,231,958 | +295,988 | | Profit for the period | - | 326,627 | +326,627 | | Other comprehensive income for the period | - | 93,111 | +93,111 | | Dividends recognized as distribution | - | (123,750) | -123,750 | | Transfer to non-distributable reserves | - | 41,044 | +41,044 | | Transfer to safety fund reserves | - | 10,387 | +10,387 | | Release from safety fund reserves | - | (9,357) | -9,357 | - According to relevant Chinese laws, foreign-invested enterprises must transfer at least **10% of their after-tax profit** to non-distributable reserves until the reserve reaches **50% of the registered capital**[22](index=22&type=chunk)[24](index=24&type=chunk) - Some subsidiaries are required to accrue safety fund reserves based on sales revenue[23](index=23&type=chunk)[25](index=25&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=10&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENT%20OF%20CASH%20FLOWS) For the six months ended June 30, 2025, net cash from operating activities slightly decreased, but net cash outflow from investing activities reduced, and net cash outflow from financing activities also slightly decreased, leading to a significantly narrowed net decrease in cash and cash equivalents Condensed Consolidated Statement of Cash Flows Key Data | Indicator | For the six months ended June 30, 2025 (thousand HKD) | For the six months ended June 30, 2024 (thousand HKD) | Year-on-year change (%) | | :----------------------- | :----------------------------------- | :----------------------------------- | :----------- | | Net cash from operating activities | 583,075 | 606,222 | -3.8% | | Net cash used in investing activities | (282,179) | (351,096) | -19.6% | | Net cash used in financing activities | (307,315) | (310,630) | -1.1% | | Net decrease in cash and cash equivalents | (6,419) | (55,504) | -88.4% | | Cash and cash equivalents at end of period | 203,434 | 208,401 | -2.4% | - Payments for the acquisition of property, plant, and equipment significantly decreased from **295,666 thousand HKD in 2024** to **167,468 thousand HKD in 2025**[27](index=27&type=chunk) - New bank borrowings amounted to **332,106 thousand HKD**, while repayment of bank borrowings was **503,930 thousand HKD**[27](index=27&type=chunk) [Notes to the Condensed Consolidated Financial Statements](index=11&type=section&id=NOTES%20TO%20THE%20CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) This section provides detailed notes to the condensed consolidated financial statements, covering basis of preparation, accounting policies, revenue classification, segment information, other income and expenses, income tax, profit for the period, dividends, earnings per share, asset and liability details, capital commitments, related party transactions, and share option scheme [1. Basis of Preparation](index=11&type=section&id=1.%20BASIS%20OF%20PREPARATION) - 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 and the Hong Kong Stock Exchange Listing Rules[28](index=28&type=chunk)[32](index=32&type=chunk) - The company's functional currency is RMB, but due to its listing on the Hong Kong Stock Exchange, the condensed consolidated financial statements are presented in HKD[29](index=29&type=chunk)[32](index=32&type=chunk) [2. Accounting Policies](index=11&type=section&id=2.%20ACCOUNTING%20POLICIES) - The condensed consolidated financial statements are prepared on a historical cost basis, except for certain derivative financial instruments and investment properties measured at fair value[30](index=30&type=chunk)[33](index=33&type=chunk) - The accounting policies and methods of computation for the six months ended June 30, 2025, are consistent with those adopted in the financial statements for the year ended December 31, 2024[30](index=30&type=chunk)[33](index=33&type=chunk) - The revised Hong Kong Financial Reporting Standards (HKAS 21 "Lack of Exchangeability") adopted for the first time in the current period had no significant impact on the group's financial position and performance[31](index=31&type=chunk)[34](index=34&type=chunk) [3. Revenue](index=12&type=section&id=3.%20REVENUE) Revenue Classification (thousand HKD) | Product Category | For the six months ended June 30, 2025 | For the six months ended June 30, 2024 | | :----------------------- | :-------------------- | :-------------------- | | Caustic soda | 882,965 | 798,288 | | Methane chloride | 414,123 | 457,431 | | Fluorochemical products | 164,912 | 133,091 | | Hydrogen peroxide | 128,494 | 188,876 | | Liquid chlorine | 1,830 | 8,010 | | Polymer materials | 193,629 | 230,974 | | Styrene-acrylic sizing agent | 31,728 | 49,657 | | Lithium battery additives | 10,334 | 1,190 | | Others | 102,255 | 101,337 | | **Manufacturing and sales of chemical products** | **1,930,270** | **1,968,854** | | Property sales | – | 18,994 | | Rental income | 1,689 | 1,842 | | **Total revenue** | **1,931,959** | **1,989,690** | - All of the group's revenue from customer contracts is recognized at a point in time, with chemical product revenue recognized when goods arrive at the customer's designated location, and property sales revenue recognized when the customer obtains control of the completed property[38](index=38&type=chunk)[39](index=39&type=chunk)[41](index=41&type=chunk)[42](index=42&type=chunk)[43](index=43&type=chunk) [4. Segment Information](index=13&type=section&id=4.%20SEGMENT%20INFORMATION) - The group primarily operates in two segments: Chemicals (manufacturing and sales of chemical products) and Property (property development and sales, properties held for rental, and provision of related property services)[47](index=47&type=chunk) Operating Segment Results (thousand HKD) | Segment | Revenue for the six months ended June 30, 2025 | Segment results for the six months ended June 30, 2025 | Revenue for the six months ended June 30, 2024 | Segment results for the six months ended June 30, 2024 | | :----- | :-------------------- | :-------------------- | :-------------------- | :-------------------- | | Chemicals | 1,930,270 | 418,108 | 1,968,854 | 298,997 | | Property | 1,689 | (495) | 20,836 | 1,645 | | Consolidated | 1,931,959 | 417,613 | 1,989,690 | 300,642 | - Both of the group's operating segments are located in China, with the vast majority of revenue from external customers and non-current assets originating from China[54](index=54&type=chunk)[55](index=55&type=chunk) - For the six months ended June 30, 2025, the Chemicals segment's depreciation expense was **54,249 thousand HKD**, and amortization expense was **1,313 thousand HKD**[56](index=56&type=chunk) [5. Other Income and Expenses](index=15&type=section&id=5.%20OTHER%20INCOME%20AND%20EXPENSES) Other Income and Expenses (thousand HKD) | Item | For the six months ended June 30, 2025 | For the six months ended June 30, 2024 | | :----------- | :-------------------- | :-------------------- | | Government subsidies | 11,375 | 21,834 | | Net income from electricity and steam | 4,284 | 2,295 | | Bank interest income | 3,234 | 3,056 | | Rental income | 1,742 | 1,774 | | Others | 1,870 | 3,193 | | Scrap income | – | 384 | | Interest income from joint ventures | – | 169 | | **Total** | **22,505** | **32,705** | [6. Other Gains or Losses](index=15&type=section&id=6.%20OTHER%20GAINS%20OR%20LOSSES) Other Gains or Losses (thousand HKD) | Item | For the six months ended June 30, 2025 | For the six months ended June 30, 2024 | | :----------------------- | :-------------------- | :-------------------- | | Net change in fair value of derivative financial instruments | (1,311) | – | | Net loss on disposal of property, plant and equipment | (1,236) | (1,178) | | **Total** | **(2,547)** | **(1,178)** | [7. Income Tax Expense](index=16&type=section&id=7.%20INCOME%20TAX%20EXPENSE) Income Tax Expense Components (thousand HKD) | Item | For the six months ended June 30, 2025 | For the six months ended June 30, 2024 | | :----------------------- | :-------------------- | :-------------------- | | China corporate income tax | 71,860 | 69,356 | | China land appreciation tax | – | 420 | | Withholding tax on dividend income | 8,982 | 7,096 | | Hong Kong profits tax | – | 64 | | Over-provision of China corporate income tax in prior years | (2,063) | (12,070) | | Deferred tax | (10,483) | (7,175) | | **Total** | **68,296** | **57,691** | - Chinese subsidiaries are subject to a **25% tax rate**, with high-tech enterprises enjoying a **15% preferential tax rate**[62](index=62&type=chunk)[63](index=63&type=chunk)[66](index=66&type=chunk) - Hong Kong profits tax is calculated at **16.5%** on estimated assessable profits[65](index=65&type=chunk)[67](index=67&type=chunk) [8. Profit for the Period](index=17&type=section&id=8.%20PROFIT%20FOR%20THE%20PERIOD) Profit for the Period Components (thousand HKD) | Item | For the six months ended June 30, 2025 | For the six months ended June 30, 2024 | | :----------------------- | :-------------------- | :-------------------- | | Total staff costs | 183,428 | 187,618 | | Finance costs | 9,508 | 13,154 | | Cost of inventories recognized as expense | 1,230,588 | 1,414,476 | | Impairment of inventories | 9,369 | 3,684 | | Total depreciation and amortization | 205,581 | 199,591 | | Gross rental income from investment properties | (1,689) | (1,842) | - Profit for the period is stated after deducting (crediting) directors' emoluments of **8,428 thousand HKD** (2024: **7,635 thousand HKD**) and other staff costs of **175,000 thousand HKD** (2024: **179,983 thousand HKD**)[69](index=69&type=chunk) [9. Dividends](index=18&type=section&id=9.%20DIVIDENDS) Dividends Paid and Declared (thousand HKD) | Dividend Type | For the six months ended June 30, 2025 | For the six months ended June 30, 2024 | | :----------------------- | :-------------------- | :-------------------- | | 2024 final dividend (15 HK cents per share) | 123,750 | – | | 2023 final dividend (14 HK cents per share) | – | 115,500 | | 2025 interim dividend (19.5 HK cents per share) | 160,875 | – | | 2024 interim dividend (14 HK cents per share) | – | 115,500 | - The Board resolved to declare an interim dividend of **19.5 HK cents per share** for the six months ended June 30, 2025, an increase from **14 HK cents per share** for the same period in 2024[71](index=71&type=chunk)[74](index=74&type=chunk) [10. Earnings Per Share](index=18&type=section&id=10.%20EARNINGS%20PER%20SHARE) Earnings Per Share Calculation (HK cents) | Indicator | For the six months ended June 30, 2025 | For the six months ended June 30, 2024 | | :----------- | :-------------------- | :-------------------- | | Basic earnings per share | 39.6 | 29.1 | | Diluted earnings per share | 39.5 | 29.1 | - Basic and diluted earnings per share are calculated based on profit for the period attributable to owners of the company of **326,627 thousand HKD** (2024: **240,085 thousand HKD**) and **825,000,000 issued shares**[72](index=72&type=chunk) - For the six months ended June 30, 2025, the calculation of diluted earnings per share does not assume the exercise of the company's share options[77](index=77&type=chunk) [11. Additions to Property, Plant and Equipment](index=19&type=section&id=11.%20ADDITIONS%20TO%20PROPERTY%2C%20PLANT%20AND%20EQUIPMENT) - During the period, the group added approximately **214 million HKD** in property, plant, and equipment to expand its business[77](index=77&type=chunk) [12. Inventories](index=19&type=section&id=12.%20INVENTORIES) Inventories Components (thousand HKD) | Item | June 30, 2025 | December 31, 2024 | | :----------- | :------------ | :-------------- | | Raw materials and consumables | 431,691 | 428,461 | | Work in progress | 21,407 | 25,647 | | Finished goods | 205,458 | 146,832 | | **Total** | **658,556** | **600,940** | [13. Trade, Bills and Other Receivables](index=20&type=section&id=13.%20TRADE%2C%20BILLS%20AND%20OTHER%20RECEIVABLES) - The group generally grants trade customers credit terms of **7 to 90 days**[78](index=78&type=chunk) Trade, Bills and Other Receivables (thousand HKD) | Item | June 30, 2025 | December 31, 2024 | | :----------------------- | :------------ | :-------------- | | Trade receivables, at amortized cost | 205,685 | 209,621 | | Bills receivable, at fair value through other comprehensive income | 108,500 | 146,485 | | Prepayments and deposits to suppliers | 57,587 | 43,034 | | Value-added tax receivables | 42,694 | 56,529 | | Other receivables | 18,441 | 12,238 | | **Total** | **432,907** | **467,907** | [14. Trade, Bills and Other Payables](index=21&type=section&id=14.%20TRADE%2C%20BILLS%20AND%20OTHER%20PAYABLES) - The average credit period for trade purchases is **7 to 45 days**[80](index=80&type=chunk) Trade, Bills and Other Payables (thousand HKD) | Item | June 30, 2025 | December 31, 2024 | | :----------------------- | :------------ | :-------------- | | Trade payables | 155,056 | 157,586 | | Bills payable | 38,557 | – | | Accrued construction costs and accrued expenses | 127,172 | 185,835 | | Other payables | 125,932 | 126,370 | | Accrued value-added tax | 14,117 | 13,773 | | Other accrued expenses | 42,306 | 31,651 | | **Total** | **503,140** | **515,215** | | Non-current liabilities | 22,766 | 21,798 | | Current liabilities | 480,374 | 493,417 | - As of June 30, 2025, other payables include **15,512 thousand HKD** of non-current deferred income from innovation and technology projects from the Chinese government[82](index=82&type=chunk) [15. Share Capital](index=22&type=section&id=15.%20SHARE%20CAPITAL) Share Capital Components (thousand HKD) | Item | Number of Ordinary Shares | Amount (thousand HKD) | | :----------- | :----------- | :------------ | | Authorized share capital | 5,000,000,000 | 500,000 | | Issued and fully paid share capital | 825,000,000 | 82,500 | [16. Capital Commitments](index=22&type=section&id=16.%20CAPITAL%20COMMITMENTS) Capital Commitments (thousand HKD) | Item | June 30, 2025 | December 31, 2024 | | :----------- | :------------ | :-------------- | | Acquisition of property, plant and equipment | 142,725 | 148,663 | [17. Connected and Related Party Transactions](index=23&type=section&id=17.%20CONNECTED%20AND%20RELATED%20PARTY%20TRANSACTIONS) Major Connected and Related Party Transactions (thousand HKD) | Related Party | Nature of Transaction | For the six months ended June 30, 2025 | For the six months ended June 30, 2024 | | :----------------------- | :----------- | :-------------------- | :-------------------- | | Lee & Man Paper Manufacturing Limited and its subsidiaries | Electricity and steam charges paid | 43,804 | 43,475 | | | Sales of chemical products | 67,318 | 92,565 | | | Electricity and steam charges received | 45,114 | 56,290 | | | Rental income received | 1,532 | 1,632 | | | Loading and unloading charges paid | 5,435 | 5,309 | | Changshu Donggang Property Co., Ltd. (joint venture) | Management fees paid | 3,652 | 3,918 | | Ruichang Lee & Man Logistics Co., Ltd. (joint venture) | Wharf leasing fees paid | 1,285 | 1,308 | | Ruichang Wharf Thermal Power Co., Ltd. (associate) | Steam charges received | 13,774 | 10,652 | [18. Share Option Scheme](index=24&type=section&id=18.%20SHARE%20OPTION%20SCHEME) - The company's share option scheme was adopted on **July 14, 2017**, to incentivize directors and eligible persons, and expired on **June 12, 2026**[89](index=89&type=chunk)[93](index=93&type=chunk) - Mr. Lee Man Yuen was granted **82,500,000 share options** with an exercise price of **3.72 HKD per share**, exercisable from **April 1, 2022, to March 31, 2027**[91](index=91&type=chunk)[92](index=92&type=chunk)[96](index=96&type=chunk) - For the six months ended June 30, 2025, and 2024, the group did not recognize any share option-related expenses[97](index=97&type=chunk)[99](index=99&type=chunk) [19. Review of Unaudited Interim Financial Information](index=25&type=section&id=19.%20REVIEW%20OF%20UNAUDITED%20INTERIM%20FINANCIAL%20INFORMATION) - The unaudited interim financial information for the six months ended June 30, 2025, has been reviewed by the company's Audit Committee with no disagreements[98](index=98&type=chunk)[100](index=100&type=chunk) [Interim Dividend](index=26&type=section&id=INTERIM%20DIVIDEND) The Board has declared an interim dividend of **19.5 HK cents per share** for the six months ended June 30, 2025, expected to be paid around September 9, 2025 - The Board resolved to declare an interim dividend of **19.5 HK cents per share** for the six months ended June 30, 2025[101](index=101&type=chunk)[103](index=103&type=chunk) - The dividend will be paid to shareholders whose names appear on the register of members on **August 25, 2025**[101](index=101&type=chunk)[103](index=103&type=chunk) - The interim dividend is expected to be paid on or about **September 9, 2025**[101](index=101&type=chunk)[103](index=103&type=chunk) [Closure of Register of Members](index=26&type=section&id=CLOSURE%20OF%20REGISTER%20OF%20MEMBERS) To determine eligibility for the interim dividend, the company will suspend share transfer registration from August 21, 2025, to August 25, 2025 - Share transfer registration will be suspended from **August 21, 2025, to August 25, 2025** (both dates inclusive)[102](index=102&type=chunk)[104](index=104&type=chunk) - All transfer documents, accompanied by the relevant share certificates, must be lodged with the company's share registrar by **4:30 p.m. on August 20, 2025**[102](index=102&type=chunk)[104](index=104&type=chunk) [Management Discussion and Analysis](index=27&type=section&id=MANAGEMENT%20DISCUSSION%20AND%20ANALYSIS) This section provides a comprehensive review of the group's business performance, financial position, and future outlook for the period [Business Review](index=27&type=section&id=BUSINESS%20REVIEW) For the six months ended June 30, 2025, group revenue slightly decreased, but profit for the period significantly grew by **36.0%**, with improved gross and net profit margins; chemical business benefited from cost reductions, property business maintained stable rental income, and the group's financial position remained robust Business Review Key Financial Data | Indicator | H1 2025 | H1 2024 | Year-on-year change | | :----------- | :----------- | :----------- | :------- | | Revenue | 1.932 billion HKD | 1.990 billion HKD | -2.9% | | Profit for the period | 327 million HKD | 240 million HKD | +36.0% | | Gross profit margin | 36.3% | 28.9% | +7.4 percentage points | | Net profit margin | 16.9% | 12.1% | +4.8 percentage points | - The increase in gross profit for the chemical business was due to a significant decrease in energy costs and a decline in raw material prices[106](index=106&type=chunk)[111](index=111&type=chunk) - The property business "Xin Yue Xi" has **11 residential units remaining for sale**, with rental income of approximately **1.7 million HKD** during the period[106](index=106&type=chunk)[111](index=111&type=chunk) - The group's financial position is robust, with an interim net gearing ratio of **3.2%**[107](index=107&type=chunk)[112](index=112&type=chunk) [Prospects](index=27&type=section&id=PROSPECTS) Facing an uncertain global economic environment, the group will address challenges and seize opportunities by accelerating factory automation, developing high-end fluoropolymer production lines, expanding overseas sales channels, investing in R&D for high-value-added chemical products, and implementing sustainable development plans - The group will accelerate the implementation of automation in **three factories** to enhance cost-effectiveness and production efficiency[108](index=108&type=chunk)[113](index=113&type=chunk) - Actively developing high-end fluoropolymer production lines in the new Jiangxi site and continuing to expand overseas sales channels[109](index=109&type=chunk)[113](index=113&type=chunk) - Continuing to invest resources in R&D for diversified high-value-added chemical products to strengthen the product portfolio and achieve vertical integration of the production chain[110](index=110&type=chunk)[113](index=113&type=chunk) - Actively promoting multiple sustainable development initiatives, including optimizing energy efficiency, conserving water resources, expanding green energy applications, significantly reducing carbon emissions, and building green factories[114](index=114&type=chunk)[120](index=120&type=chunk) [Results of Operation](index=28&type=section&id=RESULTS%20OF%20OPERATION) This section details the group's operating results for the six months ended June 30, 2025, including specific changes in revenue, selling and distribution expenses, administrative expenses, R&D costs, and finance costs, along with their primary reasons - For the six months ended June 30, 2025, the group's revenue was approximately **1.932 billion HKD**, and profit for the period was approximately **327 million HKD**, representing a **2.9% decrease** and a **36.0% increase**, respectively[115](index=115&type=chunk)[121](index=121&type=chunk) - Basic earnings per share were **39.6 HK cents**, compared to **29.1 HK cents** in the same period last year[115](index=115&type=chunk)[121](index=121&type=chunk) [Revenue](index=28&type=section&id=Revenue_Operation) - Chemical business turnover was approximately **1.930 billion HKD**, a slight decrease of **2.0%** compared to the same period last year, with average selling prices of major products remaining similar to the prior year[116](index=116&type=chunk)[122](index=122&type=chunk) Major Chemical Products Average Selling Price and Actual Production Volume | Product | H1 2025 Average Selling Price (RMB/tonne) | H1 2025 Actual Production Volume (ten thousand tonnes/thousand tonnes) | | :----------------------- | :--------------------------------- | :--------------------------------- | | Methane chloride | 2,600 (flat) | 211 thousand tonnes | | Caustic soda | 1,000 (up approx. 11%) | 310 thousand tonnes (100% basis) | | PTFE | 45,000 (flat) | 5 thousand tonnes | | Hydrogen peroxide | 700 (down approx. 22%) | 198 thousand tonnes (27.5%) | - Property business rental turnover was approximately **1.7 million HKD**, with **11 unsold residential units** remaining at period-end[119](index=119&type=chunk)[123](index=123&type=chunk) [Selling and Distribution Expenses](index=29&type=section&id=Selling%20and%20distribution%20expenses) Selling and Distribution Expenses (million HKD) | Indicator | H1 2025 | H1 2024 | Year-on-year change | | :----------- | :----------- | :----------- | :------- | | Selling and distribution expenses | 99 | 108 | -9.0 | | Percentage of total revenue | 5.1% | 5.4% | -0.3 percentage points | - The decrease in expenses was primarily due to reduced commission fees in property sales during the period[124](index=124&type=chunk)[128](index=128&type=chunk) [Administrative Expenses](index=29&type=section&id=General%20and%20administrative%20expenses) Administrative Expenses (million HKD) | Indicator | H1 2025 | H1 2024 | Year-on-year change | | :----------- | :----------- | :----------- | :------- | | Administrative expenses | 131 | 135 | -4.0 | | Percentage of total revenue | 6.8% | 6.8% | 0.0 percentage points | - The decrease in expenses was mainly due to a reduction in carbon emission fees after implementing carbon reduction measures[125](index=125&type=chunk)[129](index=129&type=chunk) [Research and Development Costs](index=29&type=section&id=Research%20and%20development%20cost) Research and Development Costs (million HKD) | Indicator | H1 2025 | H1 2024 | Year-on-year change | | :----------- | :----------- | :----------- | :------- | | Research and development costs | 83 | 55 | +28.0 | - The increase in R&D costs was primarily for optimizing process technology, improving quality of main products, and developing new chemical products to solidify market competitiveness[126](index=126&type=chunk)[130](index=130&type=chunk) [Finance Costs](index=29&type=section&id=Finance%20costs) Finance Costs (million HKD) | Indicator | H1 2025 | H1 2024 | Year-on-year change | | :----------- | :----------- | :----------- | :------- | | Interest expense | 10 | 13 | -3.0 | - The decrease in interest expense was mainly due to a reduction in the average loan amount during the period[127](index=127&type=chunk)[131](index=131&type=chunk) [Liquidity, Financial Resources and Capital Structure](index=30&type=section&id=LIQUIDITY%2C%20FINANCIAL%20RESOURCES%20AND%20CAPITAL%20STRUCTURE) The group's financial resources remained robust, with increases in total shareholders' equity and net current assets, and an improved current ratio; net debt and net debt to equity ratio significantly decreased, reflecting the group's active optimization of financing cost structure Liquidity and Capital Structure Key Data (billion HKD) | Indicator | June 30, 2025 | December 31, 2024 | Change (%) | | :----------------------- | :------------ | :-------------- | :------- | | Total shareholders' equity | 6.232 | 5.936 | +5.0% | | Current assets | 1.404 | 1.387 | +1.2% | | Current liabilities | 975 million | 1.146 billion | -14.9% | | Current ratio | 1.44 | 1.21 | +19.0% | | Bank balances and cash | 283 million | 291 million | -2.7% | | Net debt | 201 million | 358 million | -43.9% | | Net debt to equity ratio | 3.23% | 6.03% | -2.8 percentage points | - The group actively optimized its financing cost structure across different currencies to respond to moderately declining interest rates[134](index=134&type=chunk)[136](index=136&type=chunk) - The group will continue to maintain ample cash on hand and available bank credit facilities to meet capital commitments, working capital needs, and future investment development[134](index=134&type=chunk)[136](index=136&type=chunk) [Human Resources](index=30&type=section&id=HUMAN%20RESOURCES) As of June 30, 2025, the group had approximately **1,900 employees**, maintained competitive remuneration, and provided internal training and performance bonuses; the group maintained good employee relations, without significant labor disputes or recruitment difficulties - As of June 30, 2025, the group had approximately **1,900 employees**[135](index=135&type=chunk)[137](index=137&type=chunk) - Employee remuneration is maintained at a competitive level, reviewed annually, and internal training and performance-based bonuses are provided based on employee performance and group profitability[135](index=135&type=chunk)[137](index=137&type=chunk) - The group maintains good employee relations and has not encountered any significant employee issues or operational disruptions due to labor disputes[135](index=135&type=chunk)[137](index=137&type=chunk) [Other Information](index=31&type=section&id=OTHER%20INFORMATION) This section covers arrangements for purchasing shares or debentures, directors' interests, substantial shareholders, and compliance with corporate governance codes [Arrangements to Purchase Shares or Debentures](index=31&type=section&id=ARRANGEMENTS%20TO%20PURCHASE%20SHARES%20OR%20DEBENTURES) Neither the company nor any of its subsidiaries participated in any arrangements during the period that would enable the company's directors to acquire benefits by purchasing shares or debentures of the company or any other body corporate - Neither the company nor any of its subsidiaries participated in any arrangements during the period that would enable directors to acquire benefits by purchasing shares or debentures[138](index=138&type=chunk)[141](index=141&type=chunk) [Directors' Interests in Shares, Underlying Shares and Debentures](index=31&type=section&id=DIRECTORS'%20INTERESTS%20IN%20SHARES%2C%20UNDERLYING%20SHARES%20AND%20DEBENTURES) As of June 30, 2025, the company's directors and chief executive had interests in the company's shares and share options, with Mr. Lee Man Yuen holding **65% of ordinary shares** and **10% of share options** Directors' Long Positions in the Company's Shares (June 30, 2025) | Director's Name | Capacity | Number of Issued Ordinary Shares Held | Percentage of Company's Issued Share Capital | | :--------- | :------- | :-------------------- | :----------------------- | | Mr. Lee Man Yuen | Beneficial owner | 536,250,000 | 65% | | Ms. Wai Siu Kee | Beneficial owner | 82,500,000 | 10% | Directors' Interests in the Company's Share Options (June 30, 2025) | Director's Name | Capacity | Number of Ordinary Shares Involved in Granted Share Options | Percentage of Company's Issued Share Capital | | :--------- | :------- | :-------------------------- | :----------------------- | | Mr. Lee Man Yuen | Beneficial owner | 82,500,000 | 10% | [Substantial Shareholders](index=32&type=section&id=SUBSTANTIAL%20SHAREHOLDERS) As of June 30, 2025, apart from directors and the chief executive, Ms. Kwok Ching Yee (spouse of Mr. Lee Man Yuen) was deemed to have an interest in **65% of the company's shares**, making her a substantial shareholder Substantial Shareholders' Long Positions in the Company's Shares (June 30, 2025) | Shareholder's Name | Capacity | Number of Ordinary Shares | Percentage of Issued Share Capital | | :----------- | :------- | :--------- | :----------- | | Ms. Kwok Ching Yee | Spouse's interest | 536,250,000 | 65% | - Ms. Kwok Ching Yee is the spouse of Mr. Lee Man Yuen, and under the Securities and Futures Ordinance, she is deemed to have an interest in the shares held by Mr. Lee Man Yuen[148](index=148&type=chunk)[156](index=156&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=32&type=section&id=PURCHASE%2C%20SALE%20OR%20REDEMPTION%20OF%20THE%20COMPANY'S%20LISTED%20SECURITIES) Neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities during the six months ended June 30, 2025 - Neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities during the reporting period[150](index=150&type=chunk)[153](index=153&type=chunk) [Model Code for Securities Transactions](index=32&type=section&id=MODEL%20CODE%20FOR%20SECURITIES%20TRANSACTIONS) The company has adopted the Model Code for Securities Transactions, and all directors confirmed compliance with the code during the six months ended June 30, 2025 - The company has adopted the Model Code as the code of conduct for directors' securities transactions[151](index=151&type=chunk)[154](index=154&type=chunk) - All directors confirmed compliance with the required standards set out in the Model Code for the six months ended June 30, 2025[151](index=151&type=chunk)[154](index=154&type=chunk) [Compliance with the Code on Corporate Governance Practices](index=32&type=section&id=COMPLIANCE%20WITH%20THE%20CODE%20ON%20CORPORATE%20GOVERNANCE%20PRACTICES) The directors believe that the company has complied with the code provisions set out in Appendix 14 of the Listing Rules' Corporate Governance Code for the six months ended June 30, 2025 - The company has complied with the code provisions set out in Appendix 14 of the Listing Rules' Corporate Governance Code for the six months ended June 30, 2025[152](index=152&type=chunk)[155](index=155&type=chunk) [Audit Committee](index=33&type=section&id=AUDIT%20COMMITTEE) The Audit Committee reviewed the group's results for the six months ended June 30, 2025, and discussed accounting principles, internal controls, and financial reporting with management, with no disagreements - The Audit Committee is composed of all independent non-executive directors[158](index=158&type=chunk)[161](index=161&type=chunk) - The committee reviewed the interim results and discussed accounting principles, internal controls, and financial reporting with management[158](index=158&type=chunk)[161](index=161&type=chunk) [Remuneration Committee](index=33&type=section&id=REMUNERATION%20COMMITTEE) The company has established a Remuneration Committee, whose members are all independent non-executive directors, and has adopted written terms of reference to clarify its authority and responsibilities - The Remuneration Committee members include Mr. Wan Chi Keung, Mr. Hing Ka Wai, and Mr. Wong King Wai, all of whom are independent non-executive directors[159](index=159&type=chunk)[162](index=162&type=chunk) - The committee has adopted written terms of reference to clarify its authority and responsibilities[159](index=159&type=chunk)[162](index=162&type=chunk) [Nomination Committee](index=33&type=section&id=NOMINATION%20COMMITTEE) The company has established a Nomination Committee, chaired by Ms. Wai Siu Kee, and includes three independent non-executive directors, with written terms of reference adopted - The Nomination Committee members include Ms. Wai Siu Kee (Chairperson), Mr. Wan Chi Keung, Mr. Hing Ka Wai, and Mr. Wong King Wai, three of whom are independent non-executive directors[160](index=160&type=chunk)[163](index=163&type=chunk) - The committee has adopted written terms of reference to clarify its authority and responsibilities[160](index=160&type=chunk)[163](index=163&type=chunk) [Appreciation](index=33&type=section&id=APPRECIATION) The Chairperson of the Board extends sincere gratitude to shareholders, customers, business partners, and all employees, acknowledging their strong support and dedicated contributions during the reporting period - Ms. Wai Siu Kee, Chairperson of the Board, on behalf of the Board, extends sincere gratitude to shareholders, customers, business partners, and all employees[161](index=161&type=chunk)[164](index=164&type=chunk)