Performance Highlights [Financial Highlights](index=1&type=section&id=Financial%20Highlights) For the six months ended June 30, 2025, the company significantly improved its financial position, with revenue of RMB 51 million, gross profit of RMB 29 million, and a narrowed net loss of RMB 75 million, supported by strong cash reserves Key Financial Indicators for the Six Months Ended June 30, 2025 | Metric | H1 2025 (Million RMB) | H1 2024 (Million RMB) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | Approx. 51 | Approx. 6.3 | +704% | | Gross Profit | Approx. 29 | Approx. 1.6 | +1712% | | Net Loss | Approx. 75 | Approx. 352 | Loss narrowed by 78.7% | | Adjusted Net Loss | Approx. 72 | Approx. 342 | Loss narrowed by 79.0% | | Cash and Bank Balances at Period-End | Approx. 1,261 | - | - | - The significant reduction in net loss was primarily due to: (i) increased net other income; (ii) a **RMB 116 million** decrease in R&D expenses; (iii) a **RMB 47 million** decrease in administrative expenses; and (iv) increased gross profit[5](index=5&type=chunk) - As of June 30, 2025, cash and bank balances were approximately **RMB 1.261 billion**, with existing funds projected to support operations until 2028[7](index=7&type=chunk) [Business Highlights](index=3&type=section&id=Business%20Highlights) The company achieved significant business progress, with successful commercialization of core product CT053, NDA acceptance for CT041, and active advancement of differentiated allogeneic CAR-T pipelines using proprietary platforms - Commercialization of **CT053 (Zevor-cel)** in mainland China, in collaboration with Huadong Medicine, progressed smoothly, securing **111 valid orders** in H1 2025[9](index=9&type=chunk) - The New Drug Application (NDA) for **CT041 (Sure-cel)** for advanced gastric cancer was accepted by China's NMPA, granted priority review, and designated as a breakthrough therapy[10](index=10&type=chunk) - The company is advancing multiple allogeneic CAR-T cell products, including CT0596, using its proprietary THANK-uCAR® and upgraded THANK-u Plus™ platforms to overcome limitations of existing therapies[11](index=11&type=chunk) Business Review and Outlook [Company Overview and Strategy](index=4&type=section&id=Company%20Overview%20and%20Strategy) Coherent Biopharma is a biopharmaceutical company focused on innovative CAR-T cell therapies with end-to-end capabilities, strategically optimizing its pipeline for differentiated clinical and commercial value while expanding into the US market - The company is positioned as a biopharmaceutical firm dedicated to developing innovative CAR-T cell therapies addressing unmet clinical needs in hematological malignancies, solid tumors, and autoimmune diseases[12](index=12&type=chunk) - The company's strategy focuses on developing breakthrough CAR-T products, regularly evaluating its pipeline for differentiated projects, and actively integrating resources to advance its US market strategy[13](index=13&type=chunk) [Product Pipeline Review](index=4&type=section&id=Product%20Pipeline%20Review) The company boasts a rich product pipeline, including commercialized CT053, NDA-accepted CT041, and multiple clinical and preclinical candidates targeting novel antigens and allogeneic CAR-T, demonstrating robust R&D innovation Key Product Pipeline Progress | Candidate Product | Target | Primary Indication | Latest Progress | | :--- | :--- | :--- | :--- | | **Zevor-cel (CT053)** | BCMA | Relapsed/Refractory Multiple Myeloma | Commercialized in China | | **Sure-cel (CT041)** | Claudin18.2 | Gastric Cancer/GEJ Adenocarcinoma | NDA accepted in China | | **CT071** | GPRC5D | Relapsed/Refractory Multiple Myeloma | Phase I clinical, ORR data 100% | | **CT011** | GPC3 | Hepatocellular Carcinoma | NMPA IND approved | | **Allogeneic CAR-T** | BCMA, CD19/20, etc. | Multiple Myeloma, B-cell Lymphoma, etc. | Multiple products in IIT stage, CT0596 showing positive preliminary efficacy | [Zevor-cel (CT053) - BCMA CAR-T](index=5&type=section&id=Zevor-cel%20(CT053)%20-%20BCMA%20CAR-T) Zevor-cel (CT053), an NMPA-approved all-human BCMA CAR-T product, is commercializing well in China with 111 orders in H1 2025 and showed a 92.2% ORR in LUMMICAR-1, though its US/Canada LUMMICAR-2 study priority has been strategically reduced - In collaboration with Huadong Medicine for commercialization in mainland China, Coherent Biopharma is eligible for up to **RMB 1.025 billion** in regulatory and sales milestone payments, having secured **111 valid orders** in H1 2025[17](index=17&type=chunk) - LUMMICAR-1 study data showed an **Overall Response Rate (ORR) of 92.2%** and a **stringent Complete Response (sCR)/Complete Response (CR) rate of 71.6%** in 102 patients[20](index=20&type=chunk) - As part of a strategic adjustment, the company decided to de-prioritize the LUMMICAR-2 study for Zevor-cel in the US and Canada[21](index=21&type=chunk) [Sure-cel (CT041) - Claudin18.2 CAR-T](index=6&type=section&id=Sure-cel%20(CT041)%20-%20Claudin18.2%20CAR-T) Sure-cel (CT041), a potential global first-in-class Claudin18.2 CAR-T, received NMPA NDA acceptance, priority review, and breakthrough therapy designation in June 2025 for advanced gastric/GEJ adenocarcinoma, demonstrating significant PFS/OS improvement and manageable safety in a confirmatory Phase II trial - In June 2025, the NDA for Sure-cel was accepted by China's NMPA for Claudin18.2-positive advanced gastric/gastroesophageal junction adenocarcinoma patients who failed at least two prior lines of therapy[23](index=23&type=chunk) - Confirmatory Phase II clinical trial (CT041-ST-01) data showed a **median Overall Survival (mOS) of 9.17 months** for Sure-cel-treated patients, compared to only **3.98 months** for the control group[24](index=24&type=chunk) - The company is actively exploring the product's application in earlier cancer treatment and perioperative settings, including adjuvant therapy for pancreatic cancer and post-gastrectomy consolidation therapy for gastric cancer[25](index=25&type=chunk) [CT011 - GPC3 CAR-T](index=8&type=section&id=CT011%20-%20GPC3%20CAR-T) CT011, an autologous GPC3-targeted CAR-T product for hepatocellular carcinoma (HCC), received NMPA IND approval in January 2024 for adjuvant therapy in GPC3-positive Stage IIIa HCC patients at risk of recurrence post-surgery, building on the founder's pioneering work - CT011 is an autologous GPC3-targeted CAR-T product for the treatment of hepatocellular carcinoma (HCC)[30](index=30&type=chunk) - In January 2024, CT011 received NMPA IND approval for adjuvant therapy in GPC3-positive Stage IIIa HCC patients at risk of recurrence after surgical resection[30](index=30&type=chunk) [CT071 - GPRC5D CAR-T](index=9&type=section&id=CT071%20-%20GPRC5D%20CAR-T) CT071, an autologous GPRC5D-targeted CAR-T developed with the CARcelerate® platform to reduce manufacturing time to 30 hours, demonstrated a **100% ORR** and **70% sCR** in a Phase I investigator-initiated trial for newly diagnosed multiple myeloma, highlighting its significant therapeutic potential - CT071, developed using the proprietary CARcelerate® platform, reduces manufacturing time to approximately **30 hours**, yielding younger and more potent CAR-T cells[32](index=32&type=chunk) - In a Phase I study for high-risk newly diagnosed multiple myeloma, CT071 achieved a **100% Overall Response Rate (ORR)**, with **70% of patients achieving stringent Complete Response (sCR)**[32](index=32&type=chunk) [Allogeneic CAR-T Cell Products](index=9&type=section&id=Allogeneic%20CAR-T%20Cell%20Products) Leveraging its proprietary THANK-uCAR® and upgraded THANK-u Plus™ platforms, the company is aggressively advancing its allogeneic CAR-T pipeline, with BCMA-targeted CT0596 showing encouraging efficacy and safety in R/R MM, and a dedicated subsidiary, Youkai-cel, established for R&D and commercialization of multiple allogeneic products - The company developed the THANK-u Plus™ platform as an upgrade to THANK-uCAR® technology, aiming to overcome the potential impact of NKG2A expression levels on allogeneic CAR-T efficacy[34](index=34&type=chunk) - In a preliminary clinical study of allogeneic product CT0596 for R/R MM, **3 out of 5 (60%)** patients who completed initial efficacy assessment achieved sCR/CR, **4 (80%)** achieved MRD negativity, with good safety[36](index=36&type=chunk) - The company established Youkai-cel, a subsidiary, and secured **RMB 80 million** in external investment, focusing on the R&D, manufacturing, and commercialization of allogeneic CAR-T cell therapies in China[38](index=38&type=chunk) [Technology Platforms and Innovation](index=11&type=section&id=Technology%20Platforms%20and%20Innovation) The company addresses CAR-T challenges through innovative platforms: THANK-uCAR®/THANK-u Plus™ for effective allogeneic CAR-T, CARcelerate® for 30-hour manufacturing, and CycloCAR®/LADAR™ for enhanced solid tumor efficacy and improved target availability/safety, holding over 300 patents Core Technology Platforms | Technology Platform | Goals and Advantages | | :--- | :--- | | **THANK-uCAR® / THANK-u Plus™** | Develop allogeneic CAR-T, improve patient accessibility, enhance cell expansion and persistence | | **CARcelerate®** | Reduce CAR-T cell manufacturing time to approximately 30 hours, improving production efficiency and cell potency | | **CycloCAR®** | Co-express IL-7 and CCL21, enhance efficacy against solid tumors, reduce lymphodepletion requirements | | **LADAR™** | Precisely control CAR-T cell activation through dual-antigen recognition, enhance safety, and address target availability challenges | - As of June 30, 2025, the company holds over **300 patents**, including **140 globally authorized patents**, demonstrating a robust intellectual property portfolio[44](index=44&type=chunk) [Manufacturing Capabilities](index=14&type=section&id=Manufacturing%20Capabilities) The company has established vertically integrated GMP manufacturing capabilities for plasmids, lentiviral vectors, and CAR-T cell products, supporting clinical trials and commercialization, with its Shanghai Jinshan plant serving China and the US RTP facility cleared by FDA for overseas clinical trials - The company has established vertically integrated CAR-T manufacturing capabilities, encompassing plasmids, lentiviral vectors, and CAR-T cell products, enhancing efficiency, control, and cost reduction[46](index=46&type=chunk) - The Shanghai Jinshan facility supports the commercial production of Zevor-cel and prepares for the commercialization of Sure-cel[46](index=46&type=chunk) - The RTP manufacturing facility in North Carolina, USA, passed an FDA re-inspection with zero deficiencies in September 2024, leading to the lifting of clinical hold on three trials by the FDA in October of the same year[47](index=47&type=chunk) [Market Outlook and Future Prospects](index=15&type=section&id=Market%20Outlook%20and%20Future%20Prospects) The global CAR-T market shows strong growth, with significant unmet needs in solid tumors; the company aims to advance core products into earlier treatment, develop innovative technologies, expand manufacturing, and seek collaborations to maximize value - The global CAR-T market is experiencing strong growth, yet significant unmet needs persist in solid tumor treatment, presenting development opportunities for the company[48](index=48&type=chunk) - The company's future focus includes: 1) advancing core products into earlier treatment; 2) developing other clinical and preclinical products; 3) continuously innovating CAR-T technologies; 4) expanding US and China manufacturing capabilities; and 5) establishing more external collaborations[49](index=49&type=chunk) Financial Review [Operating Performance Analysis](index=16&type=section&id=Operating%20Performance%20Analysis) During the reporting period, the company's operating loss significantly narrowed from RMB 362 million to RMB 77 million, with net loss decreasing by RMB 277 million to RMB 75 million, primarily due to controlled expenses, increased foreign exchange gains, and higher gross profit Operating Loss and Net Loss | Metric | H1 2025 (Million RMB) | H1 2024 (Million RMB) | | :--- | :--- | :--- | | Operating Loss | 77 | 362 | | Net Loss | 75 | 352 | - The reduction in loss was primarily attributed to decreased R&D expenses, reduced administrative expenses, increased net foreign exchange gains, and higher gross profit[51](index=51&type=chunk) [Non-IFRS Measures](index=16&type=section&id=Non-IFRS%20Measures) To better assess core business performance, the company reported Non-IFRS measures, with adjusted net loss for the six months ended June 30, 2025, significantly narrowing to RMB 71.8 million from RMB 342 million after excluding non-cash items like share-based compensation Reconciliation of Net Loss to Adjusted Net Loss (RMB Thousand) | Item | H1 2025 (Unaudited) | H1 2024 (Unaudited) | | :--- | :--- | :--- | | Loss for the period | (75,483) | (351,558) | | Add: Share-based payment expenses | 3,684 | 9,190 | | **Adjusted Net Loss** | **(71,799)** | **(342,368)** | [Analysis of Key Financial Items](index=17&type=section&id=Analysis%20of%20Key%20Financial%20Items) During the period, the company effectively controlled expenses, with revenue growing over 7-fold to RMB 50.96 million, R&D expenses decreasing by **47%** to RMB 130 million, and administrative expenses by **54%** to RMB 39 million, primarily due to lower staff costs, professional fees, and depreciation - R&D expenses decreased by **47%** from **RMB 246 million** to **RMB 130 million**, primarily due to reduced employee benefit expenses, testing and clinical expenses, and depreciation of property, plant, and equipment[58](index=58&type=chunk) - Administrative expenses decreased by **54%** from **RMB 86 million** to **RMB 39 million**, mainly due to reduced employee benefit expenses, professional service fees, and depreciation of property, plant, and equipment[59](index=59&type=chunk)[60](index=60&type=chunk) - Total employee benefit expenses decreased from **RMB 154 million** to **RMB 89.79 million**, primarily due to a reduction in headcount and lower remuneration[60](index=60&type=chunk) [Liquidity and Capital Resources](index=20&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2025, the company held RMB 1.261 billion in cash and bank balances, with improved net cash outflow from operating activities of RMB 196 million and a net outflow of RMB 30 million from financing activities, resulting in zero total borrowings and a reduced liability ratio of **7.2%**, indicating a more robust financial structure Condensed Cash Flow Statement (RMB Thousand) | Item | H1 2025 (Unaudited) | H1 2024 (Unaudited) | | :--- | :--- | :--- | | Net cash used in operating activities | (196,308) | (255,947) | | Net cash generated from investing activities | 1,715 | 6,584 | | Net cash (used in)/generated from financing activities | (29,635) | 24,688 | | **Cash and cash equivalents at period-end** | **1,260,793** | **1,652,569** | - As of June 30, 2025, the Group's total borrowings decreased to **zero**, and the liability ratio (sum of borrowings and lease liabilities/total equity) decreased from **15.75%** at the end of 2024 to **7.2%**[69](index=69&type=chunk) - As of June 30, 2025, the company's total headcount was **371**, a reduction from **468** at the end of 2024[78](index=78&type=chunk) Supplemental Announcement Regarding 2024 Annual Report [Impairment Background and Reasons](index=24&type=section&id=Impairment%20Background%20and%20Reasons) This supplemental announcement clarifies asset impairments in the 2024 annual report, stemming from a strategic shift to allogeneic CAR-T pipelines due to strong data and competitive changes, reallocating resources from certain autologous pipelines lacking clear commercialization plans - For the year ended December 31, 2024, the company recorded an impairment of **RMB 162.3 million** for property, plant, and equipment, **RMB 26.5 million** for right-of-use assets, and **RMB 0.3 million** for intangible assets[81](index=81&type=chunk) - The primary reason for impairment was a strategic shift: due to excellent allogeneic CAR-T data, the company decided to reallocate resources from certain autologous CAR-T pipelines to allogeneic pipelines[82](index=82&type=chunk)[83](index=83&type=chunk) [Key Assumptions and Impairment Testing](index=24&type=section&id=Key%20Assumptions%20and%20Impairment%20Testing) The company conducted impairment tests on long-term assets based on strategic adjustments, using the Value in Use (VIU) method for autologous pipeline assets without clear commercialization plans, and fully impairing assets solely dedicated to these pipelines due to zero expected future cash inflows - Key impairment testing assumptions included reduced resource allocation to autologous pipelines without clear commercialization plans, and no definite commercialization plans for other autologous pipelines beyond those already marketed or in NDA stage[83](index=83&type=chunk) - The company used the Value in Use (VIU) method for impairment testing, with assets solely dedicated to de-prioritized autologous pipelines assigned a **zero VIU**, leading to a full impairment provision[84](index=84&type=chunk)[85](index=85&type=chunk) Condensed Consolidated Financial Statements [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=26&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended June 30, 2025, the company reported a gross profit of RMB 29.37 million, a significantly narrowed operating loss of RMB 76.70 million from RMB 362 million, and a net loss of RMB 75.48 million, representing a **78.5%** year-over-year reduction, with basic loss per share at **RMB 0.14** Condensed Interim Consolidated Statement of Profit or Loss Summary (RMB Thousand) | Item | H1 2025 (Unaudited) | H1 2024 (Unaudited) | | :--- | :--- | :--- | | Revenue | 50,961 | 6,340 | | Gross Profit | 29,369 | 1,617 | | Operating Loss | (76,704) | (361,540) | | Loss before income tax | (75,483) | (351,558) | | **Loss for the period attributable to owners of the parent** | **(75,483)** | **(351,558)** | | Basic and diluted loss per share (RMB) | (0.14) | (0.63) | [Consolidated Statement of Financial Position](index=27&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the company reported total assets of RMB 1.513 billion, total liabilities of RMB 551 million, and net assets of RMB 962 million, with strong liquidity from RMB 1.380 billion in current assets, including RMB 1.261 billion in cash and bank balances, and an optimized balance sheet with zero interest-bearing bank borrowings Condensed Interim Consolidated Statement of Financial Position Summary (RMB Thousand) | Item | As of June 30, 2025 (Unaudited) | As of December 31, 2024 (Audited) | | :--- | :--- | :--- | | Total non-current assets | 133,498 | 142,759 | | Total current assets | 1,379,893 | 1,530,275 | | **Total Assets** | **1,513,391** | **1,673,034** | | Total current liabilities | 213,799 | 254,007 | | Total non-current liabilities | 337,459 | 362,320 | | **Total Liabilities** | **551,258** | **616,327** | | **Net Assets** | **962,133** | **1,056,707** | | Total Equity | 962,133 | 1,056,707 | Corporate Governance and Other Information [Dividends and Securities Transactions](index=36&type=section&id=Dividends%20and%20Securities%20Transactions) The Board recommends no interim dividend for the six months ended June 30, 2025, with no purchases, sales, or redemptions of listed securities by the company or its subsidiaries during the period, and all directors confirmed compliance with the adopted standard code - The Board recommends no interim dividend for the reporting period[116](index=116&type=chunk) - During the reporting period, neither the company nor its subsidiaries acquired, disposed of, or redeemed any of the company's listed securities[117](index=117&type=chunk) [Use of Proceeds from Global Offering](index=37&type=section&id=Use%20of%20Proceeds%20from%20Global%20Offering) The company, listed in June 2021, utilized approximately RMB 2.497 billion of its HKD 3.008 billion net global offering proceeds by June 30, 2025, primarily for CT053 development, pipeline R&D, and manufacturing, with the remaining balance expected to be fully used by 2026 Use of Proceeds from Global Offering (As of June 30, 2025) | Use of Proceeds | Planned Allocation (Million RMB) | Amount Utilized (Million RMB) | Balance (Million RMB) | | :--- | :--- | :--- | :--- | | Development of core product BCMA CAR-T (CT053) | 851.7 | 851.7 | 0 | | R&D for other pipelines | 849.9 | 759.6 | 90.3 | | Manufacturing and commercialization capabilities | 548.3 | 415.2 | 133.1 | | Technology upgrades and early-stage R&D | 274.1 | 214.7 | 59.4 | | Working capital and others | 255.5 | 255.5 | 0 | | **Total** | **2,779.5** | **2,496.7** | **282.8** | - The unutilized portion of the net proceeds is expected to be fully used for its intended purposes by 2026[124](index=124&type=chunk)

[Company Information and Report Declaration](index=1&type=section&id=%E5%85%AC%E5%8F%B8%E4%BF%A1%E6%81%AF%E4%B8%8E%E6%8A%A5%E5%91%8A%E5%A3%B0%E6%98%8E) This section provides an overview of the company, its reporting standards, and the responsibilities of its directors [Company Overview and Report Publication](index=1&type=section&id=%E5%85%AC%E5%8F%B8%E6%A6%82%E5%86%B5%E4%B8%8E%E6%8A%A5%E5%91%8A%E5%8F%91%E5%B8%83) TL Natural Gas Holdings Limited (Stock Code: 8536) announced its unaudited interim results for the six months ended June 30, 2025, with the full report published on HKEX and the company website - TL Natural Gas Holdings Limited (Stock Code: 8536) released its unaudited interim results for the six months ended June 30, 2025[2](index=2&type=chunk) - This announcement contains the full 2025 interim report, complying with GEM Listing Rules[2](index=2&type=chunk) - The report is published on the HKEX website www.hkexnews.hk and the company website www.tl-cng.com[5](index=5&type=chunk) [Characteristics of GEM Market and Directors' Responsibilities](index=2&type=section&id=GEM%E5%B8%82%E5%9C%BA%E7%89%B9%E7%82%B9%E4%B8%8E%E8%91%A3%E4%BA%8B%E8%B4%A3%E4%BB%BB) The Stock Exchange's GEM market offers a listing platform for SMEs with higher investment risks, and the company's directors collectively and individually assume full responsibility for the report's accuracy - The Stock Exchange's GEM market is positioned for small and medium-sized companies, carrying higher investment risks and potential for significant market volatility[6](index=6&type=chunk) - The company's directors collectively and individually assume full responsibility for the information in this report, confirming its accuracy and completeness in all material aspects, without misleading or fraudulent content[7](index=7&type=chunk) [Currency and Terminology Definitions](index=2&type=section&id=%E8%B4%A7%E5%B8%81%E4%B8%8E%E6%9C%AF%E8%AF%AD%E5%AE%9A%E4%B9%89) All monetary values in this report are presented in RMB, with definitions provided for Compressed Natural Gas (CNG) and Liquefied Natural Gas (LNG) as clean alternative vehicle fuels - All monetary values are presented in Renminbi ("RMB")[8](index=8&type=chunk) - Compressed Natural Gas (CNG) refers to natural gas compressed to high density under high pressure, used as a clean alternative vehicle fuel[8](index=8&type=chunk) - Liquefied Natural Gas (LNG) refers to natural gas converted into liquid form[8](index=8&type=chunk) [Financial Performance Overview](index=3&type=section&id=%E8%B4%A2%E5%8A%A1%E4%B8%9A%E7%BB%A9%E6%A6%82%E8%A7%88) This section provides a concise summary of the group's financial results, including income, comprehensive expenses, financial position, equity changes, and cash flows for the period [Condensed Consolidated Statement of Profit or Loss](index=3&type=section&id=%E7%AE%80%E6%98%8E%E7%BB%BC%E5%90%88%E6%8D%9F%E7%9B%8A%E8%A1%A8) For the six months ended June 30, 2025, the Group's revenue decreased by 3.47% to **RMB 42,882 thousand**, while loss for the period narrowed by 40.43% to **RMB 2,679 thousand** Key Data from Condensed Consolidated Statement of Profit or Loss | Indicator | Six Months Ended June 30, 2025 (Thousand RMB) | Six Months Ended June 30, 2024 (Thousand RMB) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 42,882 | 44,424 | -3.47% | | Cost of sales | (39,263) | (40,563) | -3.21% | | Gross profit | 3,619 | 3,861 | -6.31% | | Loss before tax | (2,679) | (4,000) | -33.03% | | Loss for the period | (2,679) | (4,497) | -40.43% | | Basic and diluted loss per share attributable to owners of the Company | RMB (1.46) cents | RMB (2.43) cents | -39.92% | [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=4&type=section&id=%E7%AE%80%E6%98%8E%E7%BB%BC%E5%90%88%E6%8D%9F%E7%9B%8A%E5%8F%8A%E5%85%B6%E4%BB%96%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) For the six months ended June 30, 2025, the Group's total comprehensive expense significantly decreased by 45.65% to **RMB 2,977 thousand**, driven by a narrower loss for the period and improved exchange differences Key Data from Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income | Indicator | Six Months Ended June 30, 2025 (Thousand RMB) | Six Months Ended June 30, 2024 (Thousand RMB) | Change (%) | | :--- | :--- | :--- | :--- | | Loss for the period | (2,679) | (4,497) | -40.43% | | Exchange differences on translation of foreign operations | – | (1,958) | -100.00% | | Exchange differences on translation of the Company's financial statements | (298) | 977 | -130.50% | | Total comprehensive expense for the period | (2,977) | (5,478) | -45.65% | [Condensed Consolidated Statement of Financial Position](index=5&type=section&id=%E7%AE%80%E6%98%8E%E7%BB%BC%E5%90%88%E8%B4%A2%E5%8A%A1%E7%8A%B6%E5%86%B5%E8%A1%A8) As of June 30, 2025, the Group's total assets less current liabilities increased by 3.96% to **RMB 56,008 thousand**, with net assets growing by 4.85% to **RMB 55,880 thousand** Key Data from Condensed Consolidated Statement of Financial Position | Indicator | June 30, 2025 (Thousand RMB) | December 31, 2024 (Thousand RMB) | Change (%) | | :--- | :--- | :--- | :--- | | Total non-current assets | 15,793 | 19,997 | -21.02% | | Total current assets | 48,574 | 42,204 | 15.10% | | Total current liabilities | 8,359 | 8,324 | 0.42% | | Net current assets | 40,215 | 33,880 | 18.70% | | Total assets less current liabilities | 56,008 | 53,877 | 3.96% | | Net assets | 55,880 | 53,298 | 4.85% | [Condensed Consolidated Statement of Changes in Equity](index=7&type=section&id=%E7%AE%80%E6%98%8E%E7%BB%BC%E5%90%88%E6%9D%83%E7%9B%8A%E5%8F%98%E5%8A%A8%E8%A1%A8) For the six months ended June 30, 2025, total equity attributable to owners of the Company increased to **RMB 55,880 thousand**, primarily due to reduced loss for the period and increased share capital from new share issuance Key Data from Condensed Consolidated Statement of Changes in Equity | Indicator | June 30, 2025 (Thousand RMB) | June 30, 2024 (Thousand RMB) | Change (%) | | :--- | :--- | :--- | :--- | | Equity attributable to owners of the Company at beginning of period | 53,298 | 60,093 | -11.31% | | Loss for the period | (2,679) | (4,423) | -39.44% | | Total comprehensive expense for the period | (2,977) | (5,404) | -44.91% | | Issue of shares, net of transaction costs | 5,559 | 3,489 | 59.32% | | Lapse of share options | – | – | N/A | | Equity attributable to owners of the Company at end of period | 55,880 | 58,178 | -3.95% | - Lapse of share options resulted in a **RMB 4,300 thousand** reduction in share option reserve, transferred back to accumulated losses[15](index=15&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=8&type=section&id=%E7%AE%80%E6%98%8E%E7%BB%BC%E5%90%88%E7%8E%B0%E9%87%91%E6%B5%81%E9%87%8F%E8%A1%A8) For the six months ended June 30, 2025, the Group's cash and cash equivalents increased by **RMB 2,521 thousand**, reaching **RMB 32,101 thousand** at period-end, primarily driven by financing activities Key Data from Condensed Consolidated Statement of Cash Flows | Indicator | Six Months Ended June 30, 2025 (Thousand RMB) | Six Months Ended June 30, 2024 (Thousand RMB) | Change (%) | | :--- | :--- | :--- | :--- | | Net cash used in operating activities | (2,769) | (3,506) | -21.02% | | Net cash from investing activities | 31 | 79 | -60.76% | | Net cash from financing activities | 5,259 | 2,932 | 79.37% | | Net increase (decrease) in cash and cash equivalents | 2,521 | (495) | 609.29% | | Cash and cash equivalents at end of period | 32,101 | 27,913 | 15.00% | [Notes to the Financial Statements](index=9&type=section&id=%E8%B4%A2%E5%8A%A1%E6%8A%A5%E8%A1%A8%E9%99%84%E6%B3%A8) This section details the company's general information, accounting policies, segment reporting, and specific financial item breakdowns [General Information](index=9&type=section&id=%E4%B8%80%E8%88%AC%E8%B5%84%E6%96%99) The Company, incorporated in the Cayman Islands and listed on the Stock Exchange, primarily engages in natural gas sales and digital marketing services, with Yong Sheng Industrial Limited and Hong Sheng Industrial Limited as its holding and ultimate holding companies - The Company is incorporated in the Cayman Islands, with its shares listed on the Stock Exchange[18](index=18&type=chunk) - The Group's principal activities are natural gas sales and the provision of digital marketing services[19](index=19&type=chunk) - The Company's holding company and ultimate holding company are Yong Sheng Industrial Limited and Hong Sheng Industrial Limited, respectively, both incorporated in the British Virgin Islands[18](index=18&type=chunk) [Basis of Preparation and Principal Accounting Policies](index=9&type=section&id=%E7%BC%96%E5%88%B6%E5%9F%BA%E7%A1%80%E4%B8%8E%E4%B8%BB%E8%A6%81%E4%BC%9A%E8%AE%A1%E6%94%BF%E7%AD%96) The condensed consolidated financial statements are prepared in accordance with HKAS 34 and GEM Listing Rules, using the historical cost convention, consistent with prior year policies, with no significant impact from revised HKFRSs - The condensed consolidated financial statements are prepared in accordance with Hong Kong Accounting Standard 34 and the GEM Listing Rules of the Stock Exchange[20](index=20&type=chunk) - The historical cost convention is adopted, and accounting policies are consistent with the annual consolidated financial statements for the year ended December 31, 2024[21](index=21&type=chunk) - The application of revised Hong Kong Financial Reporting Standards (such as amendments to HKAS 21) has no significant impact on the financial position and performance for the current and prior periods[22](index=22&type=chunk)[23](index=23&type=chunk) [Revenue and Operating Segment Information](index=10&type=section&id=%E6%94%B6%E5%85%A5%E5%8F%8A%E7%BB%8F%E8%90%A5%E5%88%86%E9%83%A8%E8%B5%84%E6%96%99) The Group's main operating segments are natural gas sales and digital marketing services, with other businesses not meeting reportable thresholds; all revenue and non-current assets are derived from China - The Group's reportable segments include sales of compressed natural gas and liquefied natural gas, natural gas transmission services, and the provision of digital marketing services[27](index=27&type=chunk) - Other operating segments, such as automatic car wash services and fast-food catering services, do not meet the quantitative thresholds for reportable segments and are classified as “Others”[25](index=25&type=chunk) Segment Revenue and Results (Six Months Ended June 30, 2025) | Segment | Revenue (Thousand RMB) | Segment Results (Thousand RMB) | | :--- | :--- | :--- | | Natural gas sales | 42,882 | (574) | | Digital marketing services | – | (364) | | Others | – | (129) | | Total | 42,882 | (1,067) | - All of the Group's revenue is generated from customers located in China, and all non-current assets are also located in China[31](index=31&type=chunk)[32](index=32&type=chunk) [Other Income, Gains and Losses](index=14&type=section&id=%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5%E3%80%81%E6%94%B6%E7%9B%8A%E5%8F%8A%E4%BA%8F%E6%8D%9F) For the six months ended June 30, 2025, the Group's total other income, gains, and losses amounted to **RMB 88 thousand**, a 44.7% decrease from the prior year, primarily comprising bank interest income, net exchange losses, and sundry income Components of Other Income, Gains and Losses | Item | Six Months Ended June 30, 2025 (Thousand RMB) | Six Months Ended June 30, 2024 (Thousand RMB) | Change (%) | | :--- | :--- | :--- | :--- | | Bank interest income | 75 | 137 | -45.26% | | Net exchange losses | (1) | (1) | 0.00% | | Sundry income | 14 | 23 | -39.00% | | Total | 88 | 159 | -44.65% | [Components of Loss Before Tax](index=14&type=section&id=%E9%99%A4%E7%A8%8E%E5%89%8D%E4%BA%8F%E6%8D%9F%E6%9E%84%E6%88%90) For the six months ended June 30, 2025, the Group's loss before tax was **RMB 2,679 thousand**, primarily driven by cost of inventories sold, depreciation, utility expenses, transportation expenses, auditor's remuneration, and employee benefit expenses, with decreases in cost of inventories sold and depreciation Major Components of Loss Before Tax | Item | Six Months Ended June 30, 2025 (Thousand RMB) | Six Months Ended June 30, 2024 (Thousand RMB) | Change (%) | | :--- | :--- | :--- | :--- | | Cost of inventories sold | 37,119 | 38,152 | -2.71% | | Depreciation of property, plant and equipment | 1,197 | 1,313 | -8.83% | | Depreciation of right-of-use assets | 276 | 520 | -46.92% | | Employee benefit expenses (including directors' and chief executive's emoluments) | 3,055 | 3,148 | -2.95% | | Administrative expenses | 6,080 | 7,722 | -21.26% | | Selling and distribution expenses | 285 | 301 | -5.29% | [Finance Costs](index=15&type=section&id=%E8%9E%8D%E8%B5%84%E6%88%90%E6%9C%AC) For the six months ended June 30, 2025, the Group's finance costs decreased by 46.15% to **RMB 14 thousand**, primarily consisting of interest on lease liabilities Analysis of Finance Costs | Item | Six Months Ended June 30, 2025 (Thousand RMB) | Six Months Ended June 30, 2024 (Thousand RMB) | Change (%) | | :--- | :--- | :--- | :--- | | Interest on lease liabilities | 14 | 26 | -46.15% | [Taxation](index=15&type=section&id=%E7%A8%8E%E9%A1%B9) For the six months ended June 30, 2025, the Group did not provide for current income tax expense due to no taxable profit and no significant deferred tax, with Chinese subsidiaries taxed at 25% and other entities having no income tax provision - For the six months ended June 30, 2025, the Group did not provide for current income tax expense as no taxable profit was generated and there was no significant deferred tax[38](index=38&type=chunk) - Chinese subsidiaries are subject to Enterprise Income Tax at a statutory rate of **25%**[38](index=38&type=chunk) - No income tax provision was made for subsidiaries in the Cayman Islands, British Virgin Islands, and Hong Kong, as they are either exempt from income tax or did not generate taxable profits[38](index=38&type=chunk) [Loss Per Share](index=16&type=section&id=%E6%AF%8F%E8%82%A1%E4%BA%8F%E6%8D%9F) For the six months ended June 30, 2025, basic loss per share attributable to owners of the Company improved to **RMB (1.46) cents**, with diluted loss per share being the same due to the anti-dilutive effect of share options Loss Per Share Calculation | Indicator | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Loss attributable to ordinary equity holders of the Company (Thousand RMB) | (2,679) | (4,423) | -39.44% | | Weighted average number of ordinary shares in issue (Thousand shares) | 183,839 | 182,249 | 0.87% | | Basic loss per share (cents) | (1.46) | (2.43) | -39.92% | - The diluted loss per share amount was not adjusted as the outstanding share options had an anti-dilutive effect on the basic loss per share amount[40](index=40&type=chunk) [Dividends](index=16&type=section&id=%E8%82%A1%E6%81%AF) The Board of Directors did not recommend the payment of any dividend for the six months ended June 30, 2025, consistent with the prior corresponding period - The Board of Directors did not declare any dividend for the six months ended June 30, 2025 (six months ended June 30, 2024: nil)[41](index=41&type=chunk) [Changes in Property, Plant and Equipment and Right-of-Use Assets](index=16&type=section&id=%E7%89%A9%E4%B8%9A%E3%80%81%E5%8E%82%E6%89%BF%E5%8F%8A%E8%AE%BE%E5%A4%87%E4%B8%8E%E4%BD%BF%E7%94%A8%E6%9D%83%E8%B5%84%E4%BA%A7%E5%8F%98%E5%8A%A8) During the interim period, the Group acquired property, plant and equipment at a cost of **RMB 44 thousand**, a decrease from the prior year, with no additions to right-of-use assets in either period Acquisition Cost of Property, Plant and Equipment | Item | Six Months Ended June 30, 2025 (Thousand RMB) | Six Months Ended June 30, 2024 (Thousand RMB) | Change (%) | | :--- | :--- | :--- | :--- | | Cost of acquisition of property, plant and equipment | 44 | 58 | -24.14% | - No additions to right-of-use assets were identified in either period[43](index=43&type=chunk) [Trade Receivables](index=17&type=section&id=%E8%B4%B8%E6%98%93%E5%BA%94%E6%94%B6%E6%AC%BE%E9%A1%B9) As of June 30, 2025, the Group's net trade receivables increased by 4.66% to **RMB 1,886 thousand**, with all receivables aged within 3 months and no collateral held Net Trade Receivables | Indicator | June 30, 2025 (Thousand RMB) | December 31, 2024 (Thousand RMB) | Change (%) | | :--- | :--- | :--- | :--- | | Gross trade receivables | 1,907 | 1,816 | 5.01% | | Less: Provision for expected credit losses | (21) | (14) | 50.00% | | Net trade receivables | 1,886 | 1,802 | 4.66% | - The Group primarily enters into trade terms with customers on credit, with a typical credit period of one month[44](index=44&type=chunk) - All trade receivables are aged within 3 months, and the Group does not hold any collateral or other credit enhancements for its trade receivable balances[44](index=44&type=chunk)[46](index=46&type=chunk) [Trade Payables](index=18&type=section&id=%E8%B4%B8%E6%98%93%E5%BA%94%E4%BB%98%E6%AC%BE%E9%A1%B9) As of June 30, 2025, the Group's trade payables significantly decreased by 81.51% to **RMB 22 thousand**, with a typical credit period of 30 to 90 days from suppliers Ageing Analysis of Trade Payables | Ageing | June 30, 2025 (Thousand RMB) | December 31, 2024 (Thousand RMB) | Change (%) | | :--- | :--- | :--- | :--- | | Within 3 months | – | 119 | -100.00% | | 3 to 6 months | 22 | – | N/A | | Total | 22 | 119 | -81.51% | - The Group is generally granted a credit period of **30 to 90 days** by its suppliers[48](index=48&type=chunk) [Share Capital](index=18&type=section&id=%E8%82%A1%E6%9C%AC) As of June 30, 2025, the Company's issued and fully paid share capital increased to **RMB 7,280 thousand**, with **212,505,000 shares** in issue, following the issuance of **29,310,000 new shares** for approximately **RMB 6,018 thousand** Changes in Share Capital | Indicator | June 30, 2025 (Thousand RMB) | December 31, 2024 (Thousand RMB) | Change (%) | | :--- | :--- | :--- | :--- | | Issued and fully paid share capital | 7,280 | 6,210 | 17.23% | | Number of shares in issue | 212,505,000 | 183,195,000 | 15.99% | | Shares issued during the period | 29,310,000 | 220 | N/A | | Gross proceeds from share issuance | 6,018 | 3,597 | 67.30% | | Net proceeds from share issuance | 5,559 | 3,489 | 59.32% | - On June 27, 2025, a total of **29,310,000 shares** were placed at a placing price of **HKD 0.225** per share to no less than six placees, in accordance with the terms of the placing agreement[49](index=49&type=chunk) [Related Party Transactions](index=19&type=section&id=%E5%85%B3%E8%BF%9E%E6%96%B9%E4%BA%A4%E6%98%93) For the six months ended June 30, 2025, total emoluments paid to key management personnel decreased by 12.6% to **RMB 515 thousand**, primarily comprising short-term employee benefits and pension scheme contributions Key Management Personnel Emoluments | Item | Six Months Ended June 30, 2025 (Thousand RMB) | Six Months Ended June 30, 2024 (Thousand RMB) | Change (%) | | :--- | :--- | :--- | :--- | | Short-term employee benefits | 507 | 581 | -12.74% | | Pension scheme contributions | 8 | 8 | 0.00% | | Total emoluments paid to key management personnel | 515 | 589 | -12.60% | [Management Discussion and Analysis](index=20&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%82%E8%AE%A8%E8%AE%BA%E5%8F%8A%E5%88%86%E6%9E%90) This section reviews the Group's business operations, financial performance, future outlook, capital structure, and risk management strategies [Business Review](index=20&type=section&id=%E4%B8%9A%E5%8A%A1%E5%9B%9E%E9%A1%BE) The Group operates primarily in Jingzhou, Hubei Province, China, engaging in CNG and LNG sales and transmission services, sourcing natural gas from PetroChina for retail and wholesale customers - The Group's principal place of business is located in Jingzhou, Hubei Province, China[51](index=51&type=chunk) - The Company is engaged in the sales of CNG and LNG and the provision of transmission services in China[51](index=51&type=chunk) - CNG is primarily supplied to retail customers (vehicle end-users) and wholesale customers (town gas companies, gas station operators, and industrial users), with natural gas purchased from PetroChina Company Limited[52](index=52&type=chunk) [Financial Review](index=20&type=section&id=%E8%B4%A2%E5%8A%A1%E5%9B%9E%E9%A1%BE) For the six months ended June 30, 2025, the Group's revenue decreased by 3.38% to **RMB 42.9 million**, while loss for the period narrowed by 38.6% to **RMB 2.7 million**, mainly due to a significant reduction in administrative expenses Key Financial Review Data | Indicator | Six Months Ended June 30, 2025 (Million RMB) | Six Months Ended June 30, 2024 (Million RMB) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 42.9 | 44.4 | -3.38% | | Cost of sales | 39.3 | 40.6 | -3.20% | | Gross profit | 3.6 | 3.9 | -7.69% | | Gross profit margin | 8.4% | 8.7% | -0.3 percentage points | | Administrative expenses | 6.1 | 7.7 | -20.78% | | Loss attributable to owners of the Company | 2.7 | 4.4 | -38.64% | - The decrease in revenue was primarily due to a significant reduction in CNG sales to wholesale customers, partially offset by an increase in LNG sales[53](index=53&type=chunk) - The decline in gross profit margin was mainly due to the inability to fully pass on increased natural gas procurement costs in a timely manner and the low gross profit margin of LNG sales[55](index=55&type=chunk) - The reduction in administrative expenses was mainly due to a decrease of approximately **RMB 0.7 million** in legal and professional fees and consultancy fees, and approximately **RMB 0.4 million** in staff costs[57](index=57&type=chunk) [Prospects](index=22&type=section&id=%E5%89%8D%E6%99%AF) The Group anticipates a challenging global economic landscape but remains optimistic about China's natural gas consumption growth due to supportive government policies, actively exploring new business opportunities and considering new investments to enhance shareholder value - The global economic landscape is expected to remain challenging, with geopolitical tensions and a slowdown in China's property market potentially prolonging financial difficulties[61](index=61&type=chunk) - The Group remains optimistic about the growth in natural gas consumption, supported by Chinese government policies promoting natural gas and clean energy development[61](index=61&type=chunk) - The Group will actively explore new business opportunities to diversify its revenue streams and prudently consider new investments to enhance shareholder value[61](index=61&type=chunk) [Dividends](index=22&type=section&id=%E8%82%A1%E6%81%AF) The Board of Directors does not recommend the payment of any dividend for the six months ended June 30, 2025, consistent with the prior corresponding period - The Board of Directors does not recommend the payment of any dividend for the six months ended June 30, 2025 (six months ended June 30, 2024: nil)[62](index=62&type=chunk) [Capital Structure, Liquidity and Financial Resources](index=22&type=section&id=%E8%B5%84%E6%9C%AC%E6%9E%B6%E6%9E%84%E3%80%81%E6%B5%81%E5%8A%A8%E8%B5%84%E9%87%91%E5%8F%8A%E8%B4%A2%E5%8A%A1%E8%B5%84%E6%BA%90) As of June 30, 2025, the Group's total equity was approximately **RMB 55.9 million**, with cash and cash equivalents of approximately **RMB 32.1 million**, working capital of approximately **RMB 40.2 million**, and a current ratio of **5.8**, indicating sufficient liquidity without interest-bearing bank borrowings Capital Structure and Liquidity | Indicator | June 30, 2025 (Million RMB) | | :--- | :--- | | Total equity | 55.9 | | Cash and cash equivalents | 32.1 | | Working capital (Net current assets) | 40.2 | | Current ratio | 5.8 | | Gearing ratio | Not applicable (no interest-bearing bank borrowings) | - The Group possesses sufficient liquidity and financial resources to meet its working capital requirements[63](index=63&type=chunk) [Prepayments and Other Receivables](index=23&type=section&id=%E9%A2%84%E4%BB%98%E6%AC%BE%E9%A1%B9%E5%8F%8A%E5%85%B6%E4%BB%96%E5%BA%94%E6%94%B6%E6%AC%BE%E9%A1%B9) As of June 30, 2025, the Group's prepayments and other receivables increased by 33.03% to **RMB 14.5 million**, primarily due to higher supplier deposits and advances to third parties Components of Prepayments and Other Receivables | Item | June 30, 2025 (Million RMB) | December 31, 2024 (Million RMB) | Change (%) | | :--- | :--- | :--- | :--- | | Total prepayments and other receivables | 14.5 | 10.9 | 33.03% | | Deposits to suppliers and advances to third parties | 8.7 | 4.9 | 77.55% | | Prepaid expenses | 3.3 | 3.5 | -5.71% | | Amounts due from directors | 2.5 | 2.5 | 0.00% | [Commitments](index=23&type=section&id=%E6%89%BF%E6%93%94) As of June 30, 2025, the Group had zero contracted but unprovided capital commitments, a decrease from **RMB 539 thousand** at December 31, 2024, which primarily related to plant and machinery Capital Commitments | Item | June 30, 2025 (Thousand RMB) | December 31, 2024 (Thousand RMB) | Change (%) | | :--- | :--- | :--- | :--- | | Contracted, but not provided for: Plant and machinery | – | 539 | -100.00% | [Contingent Liabilities and Guarantees](index=23&type=section&id=%E6%88%96%E7%84%B6%E8%B2%A0%E5%82%B5%E5%8F%8A%E6%93%94%E4%BF%9D) As of June 30, 2025, the Group had no significant contingent liabilities or guarantees, consistent with the situation at December 31, 2024 - As of June 30, 2025, the Group had no significant contingent liabilities or guarantees (December 31, 2024: nil)[66](index=66&type=chunk) [Pledge of Assets](index=23&type=section&id=%E8%B3%87%E7%94%A2%E6%8A%B5%E6%8A%BC) As of June 30, 2025, the Group had no pledge of assets, consistent with the situation at December 31, 2024 - As of June 30, 2025, the Group had no pledge of assets (December 31, 2024: nil)[67](index=67&type=chunk) [Foreign Currency Risk](index=23&type=section&id=%E5%A4%96%E5%B9%A3%E9%A2%A8%E9%99%A9) The Group primarily operates in China with most transactions denominated in RMB, and exchange rate fluctuations during the period had no significant impact on operational liquidity, with no hedging or forward contracts in place - The Group operates its businesses in China, with most of its transactions denominated in RMB[68](index=68&type=chunk) - Exchange rate fluctuations during the period did not have any significant impact or difficulties on operational liquidity[68](index=68&type=chunk) - The Group has not entered into any hedging transactions or forward contract arrangements[68](index=68&type=chunk) [Interest Rate Risk](index=23&type=section&id=%E5%88%A9%E7%8E%87%E9%A2%A8%E9%99%A9) The Group has no significant interest rate risk and currently has no specific policies or interest rate swap transactions to manage it, but will closely monitor future related risks - The Group has no significant interest rate risk[69](index=69&type=chunk) - The Group currently has no specific policies to manage interest rate risk and has not entered into any interest rate swap transactions[69](index=69&type=chunk) [Significant Investments, Acquisitions and Disposals](index=23&type=section&id=%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B5%84%E3%80%81%E6%94%B6%E8%B3%BC%E5%8F%8A%E5%87%BA%E5%94%AE) The Company held no significant investments, acquisitions, or disposals of subsidiaries, associates, or joint ventures during the period, and no other major investment plans have been authorized by the Board as of the report date - The Company held no significant investments, nor any significant acquisitions and disposals of subsidiaries, associates, and joint ventures during the period[70](index=70&type=chunk) - As of the date of this report, the Board has not authorized any other plans for significant investments or additions to capital assets[71](index=71&type=chunk) [Other Information](index=24&type=section&id=%E5%85%B6%E4%BB%96%E4%BF%A1%E6%81%AF) This section covers employee and remuneration policies, fundraising activities, use of proceeds, interests of directors and major shareholders, share option scheme, and corporate governance matters [Employees and Remuneration Policy](index=24&type=section&id=%E5%83%B1%E5%93%A1%E5%8F%8A%E8%96%AA%E9%85%AC%E6%94%BF%E7%AD%96) As of June 30, 2025, the Group had **66 employees** with staff costs of approximately **RMB 3.1 million**, and remuneration is determined based on market salaries, performance, time commitment, and responsibilities, with training and regular performance appraisals provided Employees and Remuneration | Indicator | June 30, 2025 | December 31, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Total number of employees | 66 | 69 | -4.35% | | Staff costs (Six months ended June 30) | Approximately RMB 3.1 million | Approximately RMB 2.7 million | 14.81% | - Remuneration is determined with reference to comparable market salaries, individual performance, time commitment, and responsibilities[72](index=72&type=chunk) [Fundraising Activities](index=24&type=section&id=%E9%9B%86%E8%B3%87%E6%B4%BB%E5%8B%95) The Group conducted two placings in 2024 and 2025, raising net proceeds of approximately **HKD 3 million** and **HKD 6 million** respectively, for renewable energy investments, a potential joint venture in black granule trading, and general working capital - The 2024 placing successfully placed **5,940,000 shares**, raising net proceeds of approximately **HKD 3 million**, used for investments in renewable energy-related businesses and general working capital[73](index=73&type=chunk)[74](index=74&type=chunk)[75](index=75&type=chunk) - The 2025 placing successfully placed **29,310,000 shares**, raising net proceeds of approximately **HKD 6 million**, planned for the possible establishment of a joint venture engaged in black granule trading and general working capital[76](index=76&type=chunk)[77](index=77&type=chunk)[78](index=78&type=chunk) - Both placings aimed to broaden the Company's shareholder base and capital base, and enable the Group to raise funds[73](index=73&type=chunk)[76](index=76&type=chunk) [Use of Proceeds](index=27&type=section&id=%E6%89%80%E5%BE%97%E6%AC%BE%E9%A0%85%E7%94%A8%E9%80%94) The Company's net proceeds from listing, approximately **HKD 29.2 million**, were partially used for Jingzhou mother station infrastructure upgrades completed in 2021, while other CNG and integrated CNG/LNG station construction plans are delayed due to government approvals and site relocation, with unutilized funds held in banks Use of Listing Proceeds and Progress | Intended Use | Intended Amount (Thousand HKD) | Actual Use (Thousand HKD) | Unutilized Amount (Thousand HKD) | | :--- | :--- | :--- | :--- | | Construction of CNG filling stations | 5,212 | 2,400 | 2,812 | | Construction of integrated CNG/LNG filling stations | 12,250 | 2,334 | 9,916 | | Jingzhou mother station upgrade | 8,772 | 8,772 | – | | Working capital and general corporate purposes | 2,916 | 2,916 | – | | Total | 29,150 | 16,422 | 12,728 | - The implementation plan to upgrade the infrastructure and equipment of the Jingzhou mother station to equip it with LNG refueling capabilities was completed in **2021**[81](index=81&type=chunk)[82](index=82&type=chunk) - Other filling station construction plans are delayed due to government approvals and site relocation, and the Company is seeking relocation opportunities and awaiting approval from relevant government authorities[82](index=82&type=chunk) - As of June 30, 2025, the unutilized net proceeds were deposited in licensed banks in China[82](index=82&type=chunk) [Directors' and Chief Executive's Interests](index=29&type=section&id=%E8%91%A3%E4%BA%8B%E5%8F%8A%E4%B8%BB%E8%A6%81%E8%A1%8C%E6%94%BF%E4%BA%BA%E5%91%98%E6%AC%8A%E7%9B%8A) As of June 30, 2025, Executive Directors Mr. Liu Yongcheng and Mr. Liu Yongqiang held approximately **35.82%** of the Company's ordinary shares through controlled corporations and parties acting in concert, with no other directors or chief executives having disclosable interests Directors' and Chief Executive's Long Positions in the Company's Shares | Name | Capacity/Nature of Interest | Number of Shares Held | Approximate Percentage of Total Issued Shares | | :--- | :--- | :--- | :--- | | Mr. Liu Yongcheng | Interest in controlled corporations and parties acting in concert | 76,125,000 | 35.82% | | Mr. Liu Yongqiang | Interest in controlled corporations and parties acting in concert | 76,125,000 | 35.82% | - Mr. Liu Yongcheng holds interests through Yong Sheng Industrial Limited and is a party acting in concert with Mr. Liu Yongqiang[86](index=86&type=chunk) - Mr. Liu Yongqiang holds interests through Hong Sheng Industrial Limited and is a party acting in concert with Mr. Liu Yongcheng[86](index=86&type=chunk) [Substantial Shareholders' Interests](index=31&type=section&id=%E4%B8%BB%E8%82%A1%E6%9D%B1%E6%AC%8A%E7%9B%8A) As of June 30, 2025, Yong Sheng Industrial Limited and Hong Sheng Industrial Limited, as beneficial owners and parties acting in concert, each held approximately **35.82%** of the Company's shares, while Anwen Development Limited held approximately **6.53%** Substantial Shareholders' Long Positions in the Company's Shares | Name | Capacity | Number of Shares Held | Approximate Percentage of Total Issued Shares | | :--- | :--- | :--- | :--- | | Yong Sheng Industrial Limited | Beneficial owner and party acting in concert | 76,125,000 | 35.82% | | Hong Sheng Industrial Limited | Beneficial owner and party acting in concert | 76,125,000 | 35.82% | | Anwen Development Limited | Beneficial owner | 13,872,500 | 6.53% | - The interests of Yong Sheng Industrial Limited and Hong Sheng Industrial Limited are related to the parties acting in concert relationship with Executive Directors Mr. Liu Yongcheng and Mr. Liu Yongqiang[89](index=89&type=chunk)[93](index=93&type=chunk) [Share Option Scheme](index=32&type=section&id=%E8%B3%BC%E8%82%A1%E6%AC%8A%E8%A8%88%E5%8A%83) The Company's share option scheme was approved on April 20, 2018; all existing share options lapsed during the six months ended June 30, 2025, with no outstanding options at period-end, but **8,500,000 options** were granted post-period on July 8, 2025, representing approximately **4.00%** of issued shares - The share option scheme was approved and adopted by the Company's shareholders on April 20, 2018[92](index=92&type=chunk) - During the six months ended June 30, 2025, all existing share options lapsed, with no outstanding share options at period-end[100](index=100&type=chunk) - Subsequent to the reporting period, on July 8, 2025, the Company granted a total of **8,500,000 share options**, representing approximately **4.00%** of the issued shares as of the date of this report[101](index=101&type=chunk) - The fair value of the share options is calculated using a binomial option pricing model, with a vesting period of three years and an exercise period of five years[98](index=98&type=chunk) [Directors' Rights to Acquire Shares](index=35&type=section&id=%E8%91%A3%E4%BA%8B%E8%B3%BC%E8%B2%B7%E8%82%A1%E4%BB%BD%E7%9A%84%E6%AC%8A%E5%88%A9) Apart from the share option scheme, the Company granted no rights to any directors or their associates to acquire shares or debentures during the six months ended June 30, 2025, nor were any such rights exercised - Save for the share option scheme, the Company did not grant any rights to any directors or their respective spouses or children under 18 years of age to acquire benefits by way of acquisition of shares or debentures of the Company during the six months ended June 30, 2025[102](index=102&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=35&type=section&id=%E8%B3%BC%E8%B2%B7%E3%80%81%E5%87%BA%E5%94%AE%E6%88%96%E8%B4%96%E5%9B%9E%E6%9C%AC%E5%85%AC%E5%8F%B8%E4%B8%8A%E4%BB%BF%E8%AD%89%E5%88%B8) 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, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[103](index=103&type=chunk) [Compliance with the Required Standard of Dealings by Directors in Securities](index=35&type=section&id=%E9%81%B5%E5%AE%88%E8%91%A3%E4%BA%8B%E9%80%B2%E8%A1%8C%E8%AD%89%E5%88%B8%E4%BA%A4%E6%98%93%E7%9A%84%E4%BA%A4%E6%98%93%E5%BF%85%E5%AE%88%E6%A8%99%E6%BA%96) The Company adopted the Model Code for Securities Transactions by Directors of Listed Issuers as its code of conduct, and all directors confirmed compliance for the six months ended June 30, 2025 - The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Rules 5.48 to 5.67 of the GEM Listing Rules of the Stock Exchange as its code of conduct for directors' dealings in securities[104](index=104&type=chunk) - Following specific enquiries made to all directors, all directors confirmed their compliance with the Model Code for the six months ended June 30, 2025[104](index=104&type=chunk) [Non-Competition Undertaking](index=36&type=section&id=%E4%B8%8D%E7%AB%B6%E7%88%AD%E5%A5%91%E6%93%9A) The Group's controlling shareholders signed a non-competition undertaking on April 20, 2018, committing not to engage in any competing business, and each confirmed compliance during the period - The Group's controlling shareholders entered into a non-competition undertaking on April 20, 2018[105](index=105&type=chunk) - Each controlling shareholder undertook not to directly or indirectly engage in, operate, or participate in any business that competes or may compete with the existing business activities of any member of the Group[105](index=105&type=chunk) - Each controlling shareholder confirmed to the Company that they had complied with the non-competition undertaking during the period[105](index=105&type=chunk) [Competing Interests](index=36&type=section&id=%E7%AB%B6%E7%88%AD%E5%88%A9%E7%9B%8A) As of June 30, 2025, no directors, controlling shareholders, or substantial shareholders, or their close associates, held any positions or interests in businesses that compete or may significantly compete with the Group's operations - As of the six months ended June 30, 2025, to the best knowledge of the directors, none of the directors, controlling shareholders, and substantial shareholders of the Company, or their respective close associates, held any position or interest in any restricted business or any business or company that competes or may significantly compete with the Group's business[106](index=106&type=chunk) [Corporate Governance Code](index=36&type=section&id=%E4%BC%81%E4%B8%9A%E7%AE%A1%E6%B2%BB%E5%AE%88%E5%88%99) The Company adopted and complied with the Corporate Governance Code, with one deviation where the Chairman and CEO roles are held by the same person (Mr. Liu Yongcheng), which the Board believes is in the Group's best interest with proper checks and balances - The Company has adopted and complied with the Corporate Governance Code as set out in Appendix C1 to the GEM Listing Rules of the Stock Exchange[107](index=107&type=chunk) - There is one deviation: the roles of Chairman and Chief Executive Officer are held by the same person (Mr. Liu Yongcheng)[107](index=107&type=chunk) - The Board believes this arrangement is in the best interests of the Group, with appropriate checks and balances exercised through the Board and three independent non-executive directors[107](index=107&type=chunk) [Update on Directors' Information](index=37&type=section&id=%E8%91%A3%E4%BA%8B%E8%B3%87%E6%96%99%E6%9B%B4%E6%96%B0) For the six months ended June 30, 2025, there were no changes in directors' information requiring disclosure under Rule 17.50A(1) of the GEM Listing Rules - For the six months ended June 30, 2025, there were no changes in directors' information requiring disclosure under Rule 17.50A(1) of the GEM Listing Rules of the Stock Exchange[108](index=108&type=chunk) [Audit and Risk Management Committee](index=37&type=section&id=%E5%AF%A9%E6%A0%B8%E5%8F%8A%E9%A2%A8%E9%99%A9%E7%AE%A1%E7%90%86%E5%A7%94%E5%91%98%E6%9C%83) The Company has established an Audit and Risk Management Committee, comprising three independent non-executive directors, which has reviewed the Group's unaudited condensed consolidated financial statements and this report for the six months ended June 30, 2025 - The Company has established an Audit and Risk Management Committee, whose written terms of reference comply with Code Provision D.3.3 of the Corporate Governance Code[109](index=109&type=chunk) - The Committee comprises three independent non-executive directors: Mr. Yang Zhenyu (Chairman), Ms. Luo Hongru, and Ms. Zeng Li[109](index=109&type=chunk) - The Audit and Risk Management Committee has reviewed the Group's unaudited condensed consolidated financial statements and this report for the six months ended June 30, 2025[109](index=109&type=chunk) [Events After the Reporting Period](index=37&type=section&id=%E6%9C%9F%E5%BE%8C%E4%BA%8B%E4%BB%B6) Save as disclosed in this report, no significant events occurred after the end of the reporting period - Save as disclosed in this report, no significant events occurred after the end of the reporting period[110](index=110&type=chunk) [Forward-Looking Statements](index=37&type=section&id=%E5%89%8D%E7%9E%BB%E6%80%A7%E9%99%B3%E8%BF%B0) This report contains forward-looking statements regarding the Group's financial condition, operating results, and business, which involve known and unknown risks and uncertainties that could cause actual results to differ materially from expectations - This report contains forward-looking statements regarding the Group's financial condition, operating results, and business[111](index=111&type=chunk) - These forward-looking statements involve known and unknown risks and uncertainties that could cause actual results, performance, or events to differ materially from those expressed or implied in such statements[111](index=111&type=chunk) [By Order of the Board](index=37&type=section&id=%E6%89%BF%E8%91%A3%E4%BA%8B%E6%9C%83%E5%91%BD) This report was signed by Mr. Liu Yongcheng, Executive Director, Chairman, and Chief Executive Officer, on behalf of the Board on August 14, 2025, with the Board comprising three executive and three independent non-executive directors - This report was signed by Mr. Liu Yongcheng, Executive Director, Chairman, and Chief Executive Officer, on behalf of the Board on August 14, 2025[112](index=112&type=chunk) - The Board members include Executive Directors Mr. Liu Yongcheng, Mr. Liu Yongqiang, and Mr. Liu Yongsheng; and Independent Non-executive Directors Ms. Luo Hongru, Ms. Zeng Li, and Mr. Yang Zhenyu[112](index=112&type=chunk)

2025 2025 香港聯合交易所有限公司（「聯交所」）GEM的特色 GEM的定位乃為相比其他在聯交所上市的公司可能帶有較高投資風險的中小型公司提供一個上 市的市場。有意投資者應了解投資於該等公司的潛在風險，並應經過審慎周詳的考慮後方作出投 資決定。 由於GEM上市公司一般為中小型公司，在GEM買賣的證券可能會較於聯交所主板買賣的證券承 受較大的市場波動風險，同時無法保證在GEM買賣的證券會有高流通量的市場。 香港交易及結算所有限公司及香港聯合交易所有限公司對本報告的內容概不負責，對其準確性或 完整性亦不發表任何聲明，並明確表示概不會就因本報告全部或部份內容而產生或因倚賴該等內 容而引致的任何損失承擔任何責任。 本報告（吉林省輝南長龍生化藥業股份有限公司的董事（「董事」）願共同及個別對此負全責）乃遵照 GEM證券上市規則（「GEM上市規則」）的規定而提供有關吉林省輝南長龍生化藥業股份有限公司 及其附屬公司（「本集團」）的資料。董事經作出一切合理查詢後，確認就彼等所知及所信：(1)本 報告所載資料在各重大方面均屬準確及完整，且無誤導成份；(2)並無遺漏任何事實致使本報告 所載任何聲明產生誤導；及(3)本報告內表 ...

Jilin Province Huinan Changlong Bio-pharmacy Company Limited （於中華人民共和國註冊成立之股份有限公司） （股份代號：8049） 中期業績公告 截至二零二五年六月三十日止六個月 香 港 聯 合 交 易 所 有 限 公 司（「聯 交 所」）GEM的特色 GEM的定位乃為相比其他在聯交所上市的公司可能帶有較高投資風險的中小 型 公 司 提 供 一 個 上 市 的 市 場。有 意 投 資 者 應 了 解 投 資 於 該 等 公 司 的 潛 在 風 險， 並 應 經 過 審 慎 周 詳 的 考 慮 後 方 作 出 投 資 決 定。 由 於GEM上 市 公 司 一 般 為 中 小 型 公 司，在GEM買賣的證券可能會較於聯交所 主 板 買 賣 的 證 券 承 受 較 大 的 市 場 波 動 風 險，同 時 無 法 保 證 在GEM買賣的證券 會 有 高 流 通 量 的 市 場。 香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不 負 責，對 其 準 確 性 或 完 整 性 亦 不 發 表 任 何 聲 明，並 明 確 表 示 概 不 會 就 因 ...

Announcement Information [Company Basic Information](index=1&type=section&id=Company%20Basic%20Information) JX Energy Ltd., a limited liability company registered in Alberta, Canada (stock code 3395), has reviewed and approved its unaudited condensed interim financial results for the three and six months ended June 30, 2025 - Company Name: **JX Energy Ltd.** (吉星新能源有限責任公司)[2](index=2&type=chunk) - Registration Place: **Alberta, Canada**[2](index=2&type=chunk) - Stock Code: **3395**[2](index=2&type=chunk) - The Board of Directors has reviewed and approved the unaudited condensed interim financial results for the three and six months ended June 30, 2025[2](index=2&type=chunk) [Unaudited Results Announcement](index=1&type=section&id=Unaudited%20Results%20Announcement) This announcement, published under HKEX Listing Rule 13.49(6), discloses the company's unaudited condensed interim financial results for the three and six months ended June 30, 2025 - Announcement Basis: **Hong Kong Stock Exchange Listing Rule 13.49(6)**[2](index=2&type=chunk) - Disclosure Content: Unaudited condensed interim financial results for the three and six months ended June 30, 2025[2](index=2&type=chunk) Condensed Interim Financial Statements [Notice of No Auditor Review](index=2&type=section&id=Notice%20of%20No%20Auditor%20Review) These unaudited condensed interim financial statements, prepared by management and approved by the Board, have not been reviewed by an independent auditor as per National Instrument 51-102 - Financial statements are **unaudited by an independent auditor**[4](index=4&type=chunk) - Financial statements were prepared by company management and approved by the Board of Directors[4](index=4&type=chunk) [Statement of Financial Position](index=3&type=section&id=Statement%20of%20Financial%20Position) As of June 30, 2025, total assets decreased to CAD 21.9 million from CAD 25.9 million, with a significant increase in total current liabilities expanding the shareholder equity deficit Key Financial Position Data (as of June 30) | Indicator | June 30, 2025 (CAD) | December 31, 2024 (CAD) | Change (%) | | :--- | :--- | :--- | :--- | | **Assets** | | | | | Total Current Assets | 1,208,996 | 1,146,135 | 5.49% | | Exploration and Evaluation Assets | 1,536,087 | 3,884,949 | -60.45% | | Property, Plant and Equipment | 19,126,139 | 20,660,091 | -7.43% | | Total Assets | 21,923,917 | 25,888,120 | -15.31% | | **Liabilities** | | | | | Total Current Liabilities | 25,237,749 | 17,424,108 | 44.84% | | Total Liabilities | 51,469,964 | 47,349,095 | 8.70% | | **Shareholders' Equity** | | | | | Total Shareholders' Equity | (29,546,047) | (21,460,975) | -37.68% | - Total current liabilities **increased significantly by 44.84%**, primarily due to the current portion of long-term debt and an increase in convertible debentures[5](index=5&type=chunk) - Exploration and evaluation assets decreased by **60.45%**, reflecting asset write-offs[5](index=5&type=chunk) [Statement of Loss and Other Comprehensive Loss](index=4&type=section&id=Statement%20of%20Loss%20and%20Other%20Comprehensive%20Loss) For the six months ended June 30, 2025, total net revenue increased by 30.5%, but increased operating costs, depreciation, and impairment led to an expanded loss of CAD 8.9 million Key Loss and Other Comprehensive Loss Data (for the six months ended June 30) | Indicator | 2025 (CAD) | 2024 (CAD) | Change (%) | | :--- | :--- | :--- | :--- | | Total Net Revenue | 4,689,745 | 3,593,719 | 30.50% | | Operating Costs | (8,188,178) | (6,973,605) | 17.41% | | Depletion, Depreciation and Amortization | (1,514,131) | (1,307,810) | 15.78% | | Impairment Recovery and Write-offs | (2,351,223) | (18,694) | 12476.00% | | Operating Loss | (7,825,387) | (5,543,159) | 41.17% | | Loss and Comprehensive Loss | (8,888,838) | (7,277,834) | 22.14% | | Basic Loss Per Share | (0.02) | (0.01) | -100.00% | - Impairment and write-offs of exploration and evaluation assets significantly increased from **CAD 18,694 in 2024 to CAD 2,351,223 in 2025**, a **12476% increase**[6](index=6&type=chunk) - Basic loss per share expanded from **CAD 0.01 in 2024 to CAD 0.02 in 2025**[6](index=6&type=chunk) [Statement of Changes in Shareholders' Equity](index=5&type=section&id=Statement%20of%20Changes%20in%20Shareholders'%20Equity) As of June 30, 2025, total shareholders' equity deteriorated to a deficit of CAD 29.5 million, primarily due to a current period loss of CAD 8.9 million Key Shareholders' Equity Changes (as of June 30) | Indicator | June 30, 2025 (CAD) | January 1, 2024 (CAD) | Change (CAD) | | :--- | :--- | :--- | :--- | | Share Capital | 222,417,603 | 220,212,755 | 2,204,848 | | Contributed Surplus | 15,996,981 | 13,091,943 | 2,905,038 | | Accumulated Deficit | (267,960,631) | (238,804,683) | (29,155,948) | | Total Equity | (29,546,047) | (5,499,985) | (24,046,062) | - A current period loss of **CAD 8,888,838** was the primary factor contributing to the expanded shareholders' equity deficit[7](index=7&type=chunk) - Fair value adjustment of long-term payables increased contributed surplus by **CAD 800,210**[7](index=7&type=chunk) [Statement of Cash Flows](index=6&type=section&id=Statement%20of%20Cash%20Flows) For the six months ended June 30, 2025, operating cash flow turned into a net inflow of CAD 275,254, driven by improved non-cash working capital, despite increased investment outflows Key Cash Flow Data (for the six months ended June 30) | Indicator | 2025 (CAD) | 2024 (CAD) | Change (CAD) | | :--- | :--- | :--- | :--- | | Net Cash From (Used In) Operations | 275,254 | (2,111,481) | 2,386,735 | | Net Cash From (Used In) Investing | (619,576) | 1,587,241 | (2,206,817) | | Net Cash From Financing | 633,986 | 738,560 | (104,574) | | Increase in Cash and Cash Equivalents | 289,664 | 214,320 | 75,344 | | Cash and Cash Equivalents, End of Period | 501,047 | 577,677 | (76,630) | - Operating cash flow shifted from a net outflow in the prior period of 2024 to a **net inflow in 2025**, primarily due to the positive impact of non-cash working capital changes[8](index=8&type=chunk) - Cash outflow from investing activities increased, mainly due to higher expenditures on property, plant and equipment and exploration and evaluation assets, compared to proceeds from asset sales in the prior year[8](index=8&type=chunk) Notes to the Financial Statements [1. Company Information](index=7&type=section&id=1.%20Company%20Information) JX Energy Ltd., incorporated in Alberta, Canada in 2005, focuses on oil and gas exploration, listed on HKEX in 2017, and rebranded in 2022 - The company was incorporated in **Calgary, Alberta, Canada in 2005**[9](index=9&type=chunk) - Principal business activities involve **oil and natural gas exploration and development** in Alberta, Canada[9](index=9&type=chunk) - The company's shares were listed on the **Hong Kong Stock Exchange (stock code: 3395) on March 10, 2017**[9](index=9&type=chunk) - The company name changed from Persta Resources Inc. to **JX Energy Ltd. on June 22, 2022**[9](index=9&type=chunk) [2. Basis of Preparation](index=7&type=section&id=2.%20Basis%20of%20Preparation) These unaudited condensed interim financial statements are prepared in CAD, adhering to IAS 34 and HKEX Listing Rules, using consistent accounting policies as the 2024 annual statements - Prepared in accordance with **International Accounting Standard 34 "Interim Financial Reporting"** and the Hong Kong Stock Exchange Listing Rules[10](index=10&type=chunk) - Accounting policies are consistent with the audited annual financial statements for the year ended December 31, 2024[10](index=10&type=chunk) - Financial statements are presented in **Canadian Dollars (CAD)**, which is the company's functional currency[11](index=11&type=chunk) [3. Going Concern](index=8&type=section&id=3.%20Going%20Concern) The company faces going concern uncertainties with a CAD 24 million working capital deficit and expanded operating losses, relying on positive cash flow or additional financing - As of June 30, 2025, the company had a **working capital deficit of CAD 24 million**[12](index=12&type=chunk) - Operating losses for the three and six months ended June 30, 2025, were **CAD 5.3 million and CAD 7.8 million**, respectively[12](index=12&type=chunk) - Global economic uncertainties (e.g., war, global warming, tariff threats, supply chain disruptions) and natural gas price volatility significantly impact the company's operating results[12](index=12&type=chunk) - The company's ability to continue as a going concern depends on generating positive cash flow from operations, securing equity and/or additional financing, or disposing of assets[12](index=12&type=chunk) [4. Cash and Cash Equivalents](index=9&type=section&id=4.%20Cash%20and%20Cash%20Equivalents) As of June 30, 2025, cash and cash equivalents significantly increased to CAD 501,047, primarily due to improved non-cash working capital changes from operating activities Cash and Cash Equivalents (as of June 30) | Indicator | June 30, 2025 (CAD) | December 31, 2024 (CAD) | Change (%) | | :--- | :--- | :--- | :--- | | Deposits with banks and other financial institutions | 499,042 | 209,486 | 138.23% | | Cash on hand | 2,005 | 2,005 | 0.00% | | Total | 501,047 | 211,491 | 137.87% | Non-Cash Working Capital Changes (for the six months ended June 30) | Indicator | 2025 (CAD) | 2024 (CAD) | Change (CAD) | | :--- | :--- | :--- | :--- | | Accounts Receivable | 493,709 | 701,438 | (207,729) | | Prepaid Expenses and Deposits | (267,014) | 571,008 | (838,022) | | Accounts Payable and Accrued Liabilities | 1,663,106 | (2,667,269) | 4,330,375 | | Non-cash working capital changes from operating activities | 4,336,788 | 2,692,699 | 1,644,089 | [5. Accounts Receivable](index=10&type=section&id=5.%20Accounts%20Receivable) As of June 30, 2025, total accounts receivable decreased significantly to CAD 198,621, mainly due to a reduction in trade receivables, with all trade receivables due within one month Accounts Receivable (as of June 30) | Indicator | June 30, 2025 (CAD) | December 31, 2024 (CAD) | Change (%) | | :--- | :--- | :--- | :--- | | Trade Accounts Receivable | 198,621 | 691,842 | -71.29% | | Other Receivables | – | 488 | -100.00% | | Total | 198,621 | 692,330 | -71.29% | - As of June 30, 2025, all trade accounts receivable were **due within 1 month**[16](index=16&type=chunk) - No significant impairment losses were recognized for trade or other accounts receivable for the three and six months ended June 30, 2025[17](index=17&type=chunk) [6. Exploration and Evaluation Assets](index=11&type=section&id=6.%20Exploration%20and%20Evaluation%20Assets) As of June 30, 2025, exploration and evaluation assets decreased significantly to CAD 1.5 million, primarily due to CAD 2.35 million in asset write-offs from expiring land leases Changes in Exploration and Evaluation Assets (as of June 30) | Indicator | June 30, 2025 (CAD) | December 31, 2024 (CAD) | Change (CAD) | | :--- | :--- | :--- | :--- | | Balance, beginning of period | 3,884,949 | 5,914,591 | (2,029,642) | | Additions/(Disposals) net | 2,361 | (1,881,306) | 1,883,667 | | Write-offs | (2,351,223) | (148,336) | (2,202,887) | | Balance, end of period | 1,536,087 | 3,884,949 | (2,348,862) | - For the three and six months ended June 30, 2025, the company wrote off **CAD 2.4 million** of exploration and evaluation assets due to expiring land leases[19](index=19&type=chunk) - The company sold five non-producing Basing assets for **CAD 1.9 million on April 1, 2024**[19](index=19&type=chunk) [7. Property, Plant and Equipment](index=12&type=section&id=7.%20Property,%20Plant%20and%20Equipment) As of June 30, 2025, the net book value of property, plant and equipment decreased to CAD 19.1 million, mainly due to depletion and depreciation of CAD 1.37 million Changes in Property, Plant and Equipment (as of June 30) | Indicator | June 30, 2025 (CAD) | January 1, 2025 (CAD) | Change (CAD) | | :--- | :--- | :--- | :--- | | Cost | 169,514,835 | 169,678,906 | (164,071) | | Accumulated Depletion, Depreciation and Impairment | (150,388,696) | (149,018,815) | (1,369,881) | | Net Book Value | 19,126,139 | 20,660,091 | (1,533,952) | - For the six months ended June 30, 2025, depletion and depreciation amounted to **CAD 1,369,881**[20](index=20&type=chunk) - As of June 30, 2025, the company did not record any impairment or recovery for cash-generating units[21](index=21&type=chunk) [8. Right-of-Use Assets and Leases](index=13&type=section&id=8.%20Right-of-Use%20Assets%20and%20Leases) As of June 30, 2025, right-of-use assets decreased significantly to CAD 52,695, primarily due to CAD 144,250 in amortization, with a corresponding reduction in lease liabilities Changes in Right-of-Use Assets (as of June 30) | Indicator | June 30, 2025 (CAD) | January 1, 2025 (CAD) | Change (CAD) | | :--- | :--- | :--- | :--- | | Oil and Gas Production | 18,400 | 55,198 | (36,798) | | Office Space | 33,717 | 132,395 | (98,678) | | Vehicles | 578 | 9,352 | (8,774) | | Total | 52,695 | 196,945 | (144,250) | Changes in Lease Liabilities (as of June 30) | Indicator | June 30, 2025 (CAD) | January 1, 2025 (CAD) | Change (CAD) | | :--- | :--- | :--- | :--- | | Total | 67,617 | 251,065 | (183,448) | | Due within 1 year | 57,070 | 240,519 | (183,449) | | Due in 1 to 2 years | 10,547 | 10,547 | 0 | - For the six months ended June 30, 2025, amortization expense was **CAD 144,250**[22](index=22&type=chunk) [9. Accounts Payable and Accrued Liabilities](index=14&type=section&id=9.%20Accounts%20Payable%20and%20Accrued%20Liabilities) As of June 30, 2025, total current accounts payable and accrued liabilities decreased significantly to CAD 5.6 million, driven by reductions in trade, capital, and other payables Accounts Payable and Accrued Liabilities (as of June 30) | Indicator | June 30, 2025 (CAD) | December 31, 2024 (CAD) | Change (%) | | :--- | :--- | :--- | :--- | | Trade Accounts Payable | 1,688,921 | 2,233,327 | -24.38% | | Accrued Liabilities | 1,398,002 | 1,281,133 | 9.12% | | Capital Accounts Payable | – | 2,788,265 | -100.00% | | Other Payables | 386,671 | 2,586,764 | -85.05% | | Total Current Accounts Payable and Accrued Liabilities | 5,625,870 | 8,889,489 | -36.71% | - All trade accounts payable, accrued liabilities, capital accounts payable, and other payables are expected to be settled within one year or are payable on demand[23](index=23&type=chunk) - As of June 30, 2025, other payables included **CAD 0.37 million** owed under the shadow unit plan (2024: CAD 0.44 million)[23](index=23&type=chunk) [10. Long-Term Debt, Long-Term Payables and Convertible Debentures](index=15&type=section&id=10.%20Long-Term%20Debt,%20Long-Term%20Payables%20and%20Convertible%20Debentures) As of June 30, 2025, total long-term debt was CAD 14.4 million, with most reclassified as current due to default risks, while convertible debentures increased with significant fair value changes Long-Term Debt (as of June 30) | Indicator | June 30, 2025 (CAD) | December 31, 2024 (CAD) | Change (%) | | :--- | :--- | :--- | :--- | | Shareholder Loans (net) | 11,197,333 | 10,331,024 | 8.39% | | Term Debt | 3,261,861 | 3,435,944 | -5.07% | | Total | 14,365,456 | 13,646,448 | 5.27% | | Current Portion | 13,669,903 | 4,544,566 | 200.80% | | Long-Term Portion | 695,553 | 9,101,882 | -92.36% | Convertible Debentures (as of June 30) | Indicator | June 30, 2025 (CAD) | December 31, 2024 (CAD) | Change (%) | | :--- | :--- | :--- | :--- | | Debt Component | 4,750,824 | 2,372,260 | 100.27% | | Derivative Component | (201,478) | 41,714 | -583.90% | - The entire balances of the CIMC Loan and JX Loan were reclassified as current liabilities due to the expiration of the grace period and failure to repay overdue amounts[28](index=28&type=chunk) - As of June 30, 2025, the JX Loan was approximately **USD 1.6 million** in arrears, and the CIMC Loan was approximately **USD 0.7 million** in arrears[28](index=28&type=chunk) [Term Debt](index=16&type=section&id=Term%20Debt) The company's CIMC loan and JX loan, totaling CAD 4.7 million and CAD 10.8 million respectively, were reclassified as current due to a payment default - The company obtained a **USD 3.5 million (CAD 4.7 million)** CIMC Loan from CIMC Leasing USA, Inc., with a 9.25% annual interest rate over 48 months[27](index=27&type=chunk) - The CIMC Loan takes precedence over all other debt and equity payments[27](index=27&type=chunk) - The company's failure to fully repay the underpaid amount within the grace period by April 25, 2025, resulted in the entire balances of the CIMC Loan and JX Loan being classified as current[28](index=28&type=chunk) [Shareholder Loans](index=16&type=section&id=Shareholder%20Loans) The company received CAD 1.2 million from a shareholder, with various shareholder loans having extended terms, some classified as current due to maturity - For the six months ended June 30, 2025, the company received **CAD 1.2 million** from a shareholder, with the balance classified as current pending a long-term loan agreement[29](index=29&type=chunk) - The 2019 Shareholder Loan term was extended to December 23, 2026, with the entire balance classified as long-term[29](index=29&type=chunk) - The 2020 Shareholder Loan term was extended to June 2, 2026, with the entire balance classified as current[29](index=29&type=chunk) - The company received an **USD 8 million (CAD 10.8 million)** JX Loan from JX Company, with a 9.25% annual interest rate over 48 months[30](index=30&type=chunk) [Long-Term Payables](index=17&type=section&id=Long-Term%20Payables) Long-term payables increased to CAD 25.6 million, with CAD 4.6 million in JX GHCA related costs and a CAD 0.8 million contributed surplus adjustment Changes in Long-Term Payables (as of June 30) | Indicator | June 30, 2025 (CAD) | December 31, 2024 (CAD) | Change (CAD) | | :--- | :--- | :--- | :--- | | Carrying Value, beginning of period | 20,696,153 | 13,286,657 | 7,409,496 | | Additions | 5,002,996 | 8,207,778 | (3,204,782) | | Less: Repayments | (282,000) | (523,000) | 241,000 | | Carrying Value, end of period | 25,622,878 | 20,696,153 | 4,926,725 | | Current Portion | 644,112 | 644,112 | 0 | | Long-Term Portion | 24,978,766 | 20,052,041 | 4,926,725 | - For the six months ended June 30, 2025, JX GHCA related costs increased by **CAD 4.6 million**, and a contributed surplus adjustment of **CAD 0.8 million** was recognized[32](index=32&type=chunk) - The company classified **CAD 0.64 million** as the current portion of long-term payables[32](index=32&type=chunk) [Convertible Debentures](index=18&type=section&id=Convertible%20Debentures) Convertible debentures increased to CAD 4.75 million (debt portion), with significant fair value changes in the derivative component, valued using the Black-Scholes model - As of June 30, 2025, the convertible debenture debt component was **CAD 4,750,824**, and the derivative component was **(CAD 201,478)**[34](index=34&type=chunk) - The company entered into a **USD 1.52 million (approx. CAD 2.2 million)** convertible debenture agreement on March 19, 2025, with a 9% annual interest rate, maturing on December 10, 2025[35](index=35&type=chunk) - The company entered into a **USD 1.6 million (approx. CAD 2.1 million)** convertible debenture agreement on July 24, 2024, with a 12% annual interest rate, maturing on July 24, 2025[35](index=35&type=chunk) - The fair value of the convertible debenture derivative component is calculated using the **Black-Scholes valuation model**[35](index=35&type=chunk) [11. Decommissioning Liabilities](index=20&type=section&id=11.%20Decommissioning%20Liabilities) As of June 30, 2025, decommissioning liabilities decreased to CAD 1.24 million, primarily due to a CAD 240,090 reduction from changes in estimates Changes in Decommissioning Liabilities (as of June 30) | Indicator | June 30, 2025 (CAD) | December 31, 2024 (CAD) | Change (CAD) | | :--- | :--- | :--- | :--- | | Balance, beginning of period | 1,451,965 | 2,372,611 | (920,646) | | Changes in Estimates | (240,090) | (968,297) | 728,207 | | Accretion Expense | 26,922 | 47,651 | (20,729) | | Balance, end of period | 1,238,797 | 1,451,965 | (213,168) | | Current Portion | 691,448 | 691,448 | 0 | | Long-Term Portion | 547,349 | 760,517 | (213,168) | - The company estimates total undiscounted cash flows required to settle decommissioning obligations to be approximately **CAD 1.6 million** (2024: CAD 1.5 million), expected to occur between 2025 and 2072[37](index=37&type=chunk) - Decommissioning liabilities are calculated using an average risk-free interest rate of **3.19%** (2024: 3.32%) and an inflation rate of **2.0%** (2024: 3.32%)[37](index=37&type=chunk) [12. Share Capital](index=20&type=section&id=12.%20Share%20Capital) As of June 30, 2025, the company had 522,886,520 ordinary shares issued for CAD 222.4 million, with 800,200 unexercised stock options Issued Ordinary Shares (as of June 30) | Indicator | June 30, 2025 | January 1, 2024 | | :--- | :--- | :--- | | Number of Ordinary Shares | 522,886,520 | 459,886,520 | | Amount (CAD) | 222,417,603 | 220,212,755 | Unexercised Share Options (as of June 30) | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Number of Options | 800,200 | 3,080,200 | | Exercise Price (HKD) | $0.48 | $0.51 | - As of June 30, 2025, the exercise price of remaining outstanding and exercisable share options exceeded the company's share price[41](index=41&type=chunk) [Authorized Share Capital](index=20&type=section&id=Authorized%20Share%20Capital) The company is authorized to issue an unlimited number of ordinary shares - The company is authorized to issue an **unlimited number of ordinary shares**[38](index=38&type=chunk) [Issued Share Capital](index=21&type=section&id=Issued%20Share%20Capital) As of June 30, 2025, 522,886,520 ordinary shares were issued for CAD 222.4 million - As of December 31, 2024, and June 30, 2025, the number of issued ordinary shares was **522,886,520**, with an amount of **CAD 222,417,603**[39](index=39&type=chunk) [Share Options and Share-Based Payments](index=21&type=section&id=Share%20Options%20and%20Share-Based%20Payments) The company's share option plan limits issuance to 10% of outstanding shares, with 800,200 unexercised options at a weighted average exercise price of HKD 0.48 - The company has a share option scheme where the number of ordinary shares that may be issued shall not exceed **10% of the total number of ordinary shares** issued and outstanding on the date the option scheme was approved by shareholders[40](index=40&type=chunk) - As of May 15, 2025, **2.3 million share options expired unexercised**[41](index=41&type=chunk) - As of June 30, 2025, **800,200 share options remained unexercised**, with a weighted average exercise price of **HKD 0.48**[42](index=42&type=chunk) [Contributed Surplus](index=22&type=section&id=Contributed%20Surplus) Contributed surplus includes fair value differences on shareholder loans and long-term payables, share-based payments, and share issuance allocations above market value - Contributed surplus includes the difference between the fair value and total value of shareholder loans and long-term payables at initial recognition, share-based payments during the period, and allocations for shares issued above market value during the year[43](index=43&type=chunk) [13. Revenue](index=23&type=section&id=13.%20Revenue) For the six months ended June 30, 2025, total revenue increased by 42% to CAD 5.04 million, driven by higher sales of natural gas, NGLs, and condensate Revenue Composition (for the six months ended June 30) | Revenue Source | 2025 (CAD) | 2024 (CAD) | Change (%) | | :--- | :--- | :--- | :--- | | Sales of Natural Gas, NGLs and Condensate | 4,523,012 | 2,884,484 | 56.80% | | Sales of Crude Oil | 509,972 | 657,514 | -22.44% | | Total Sales of Produced Commodities | 5,032,984 | 3,541,998 | 42.09% | | Total Trading Revenue (Loss) | 2,112 | 3,256 | -35.14% | | Total Other Revenue | 4,380 | 10,104 | -56.65% | | Total Revenue | 5,039,476 | 3,555,358 | 41.74% | - The company sells products under floating price contracts, with revenue typically collected on the **25th day of each month** following production[44](index=44&type=chunk) - For the six months ended June 30, 2025, the largest customer accounted for **71% of revenue**, and the second largest for **14%**[46](index=46&type=chunk) [14. Finance Costs](index=24&type=section&id=14.%20Finance%20Costs) For the six months ended June 30, 2025, total finance costs decreased by 36% to CAD 1.11 million, as foreign exchange gains offset increased interest and amortization expenses Finance Cost Composition (for the six months ended June 30) | Expense Item | 2025 (CAD) | 2024 (CAD) | Change (%) | | :--- | :--- | :--- | :--- | | Total Interest Expense and Financing Costs | 675,884 | 582,135 | 16.00% | | Total Accretion Expense | 1,162,277 | 708,366 | 64.08% | | Foreign Exchange Loss (Gain) | (739,372) | 404,175 | -283.00% | | Total Finance Costs | 1,108,833 | 1,734,675 | -36.08% | - For the six months ended June 30, 2025, convertible debentures generated **CAD 234,752** in interest expense[49](index=49&type=chunk) - For the six months ended June 30, 2025, foreign exchange gains primarily resulted from the conversion of USD-denominated term debt, shareholder loans, and convertible debentures[49](index=49&type=chunk) [15. Income Tax](index=25&type=section&id=15.%20Income%20Tax) For the six months ended June 30, 2025, the company's blended statutory tax rate was 23%, with approximately CAD 166 million in tax deductions, including CAD 56 million in loss carryforwards - The blended statutory tax rate for the six months ended June 30, 2025, was **23%** (2024: 23%)[50](index=50&type=chunk) - The company has approximately **CAD 166 million** in tax deductions, including approximately **CAD 56 million** in loss carryforwards, which begin to expire in 2037[50](index=50&type=chunk) [16. Earnings (Loss) Per Share](index=25&type=section&id=16.%20Earnings%20(Loss)%20Per%20Share) For the six months ended June 30, 2025, basic and diluted loss per share expanded to CAD 0.01, reflecting an increase in total comprehensive loss Loss Per Share (for the six months ended June 30) | Indicator | 2025 (CAD) | 2024 (CAD) | Change (CAD) | | :--- | :--- | :--- | :--- | | Loss and Comprehensive Loss | (8,888,838) | (7,277,834) | (1,611,004) | | Weighted Average Number of Ordinary Shares | 522,886,520 | 489,260,146 | 33,626,374 | | Basic Loss Per Share | (0.02) | (0.01) | (0.01) | | Diluted Loss Per Share | (0.01) | (0.01) | 0 | - Dilutive shares represent the maximum number of shares issuable related to convertible debentures, totaling **104,577,304 ordinary shares**[51](index=51&type=chunk) - For the six months ended June 30, 2025, **800,000 share options** were not included in the weighted average share calculation as they were anti-dilutive[52](index=52&type=chunk) [17. Dividends](index=25&type=section&id=17.%20Dividends) The Board did not recommend any dividends for the three and six months ended June 30, 2025 and 2024 - The Board of Directors did not recommend any dividends for the three and six months ended June 30, 2025 and 2024[53](index=53&type=chunk) [18. Related Party Transactions, Personnel Costs and Remuneration Policy](index=26&type=section&id=18.%20Related%20Party%20Transactions,%20Personnel%20Costs%20and%20Remuneration%20Policy) For the six months ended June 30, 2025, key management personnel remuneration decreased significantly to CAD 267,372 due to reduced severance, while director remuneration increased Key Management Personnel Remuneration (for the six months ended June 30) | Remuneration Item | 2025 (CAD) | 2024 (CAD) | Change (%) | | :--- | :--- | :--- | :--- | | Directors' Fees | 54,507 | 20,000 | 172.54% | | Salaries, Allowances and Other Benefits | 197,604 | 209,585 | -5.72% | | Share-Based Payments and Shadow Unit Adjustments | 3,556 | 10,823 | -67.15% | | Severance Payments | – | 385,000 | -100.00% | | Total | 267,372 | 640,392 | -58.25% | - The company's remuneration and bonus policy is determined based on individual employee performance, with executive remuneration recommended by the Remuneration Committee[54](index=54&type=chunk) - For the six months ended June 30, 2025, total director remuneration was **CAD 0.5 million** (2024: CAD 20,000)[56](index=56&type=chunk) [Transactions with Key Management Personnel](index=26&type=section&id=Transactions%20with%20Key%20Management%20Personnel) Key management personnel remuneration for the six months ended June 30, 2025, decreased by 58.25% to CAD 267,372, mainly due to lower severance payments - For the six months ended June 30, 2025, total key management personnel remuneration was **CAD 267,372**, a **58.25% decrease** from the prior year, primarily due to **CAD 385,000 in severance payments in 2024**[55](index=55&type=chunk) [Transactions with Directors](index=26&type=section&id=Transactions%20with%20Directors) Director remuneration for the six months ended June 30, 2025, increased to CAD 0.5 million, with accrued compensation under the shadow unit plan totaling CAD 0.39 million - For the six months ended June 30, 2025, total director remuneration was **CAD 0.5 million** (2024: CAD 20,000)[56](index=56&type=chunk) - As of June 30, 2025, total accrued compensation under the shadow unit plan was **CAD 0.39 million** (2024: CAD 0.46 million)[57](index=57&type=chunk) [Receipt of Shareholder Loans](index=27&type=section&id=Receipt%20of%20Shareholder%20Loans) For the six months ended June 30, 2025, the company received CAD 1.2 million from a shareholder, with the loan agreement yet to be signed - For the six months ended June 30, 2025, the company received **CAD 1.2 million** from a shareholder, with the loan agreement yet to be signed[58](index=58&type=chunk) [19. Financial Instruments and Risk Management](index=27&type=section&id=19.%20Financial%20Instruments%20and%20Risk%20Management) The company manages credit, liquidity, and market risks through high-credit-rated counterparties, cash flow monitoring, and assessing price, interest, and exchange rate fluctuations, without using derivatives for commodity price risk - The company is exposed to **credit risk, liquidity risk, and market risk** from its use of financial instruments[60](index=60&type=chunk) - The company manages liquidity by ensuring sufficient liquidity to meet liabilities as they fall due under normal and stressed conditions[63](index=63&type=chunk) - For the three and six months ended June 30, 2025 and 2024, the company did not enter into any financial derivative instruments to mitigate commodity price risk[69](index=69&type=chunk) [Credit Risk](index=27&type=section&id=Credit%20Risk) The company mitigates credit risk by transacting with high-credit-rated financial institutions and has not recognized significant impairment provisions for accounts receivable - The company transacts only with financial institutions with **high credit ratings** to limit credit risk for cash transactions[61](index=61&type=chunk) - As of June 30, 2025, accounts receivable included **CAD 0.2 million** due from crude oil and natural gas purchasers (June 30, 2024: CAD 0.12 million)[61](index=61&type=chunk) - As of June 30, 2025, the company had not identified the need for impairment provisions and had not written off any accounts receivable[62](index=62&type=chunk) [Liquidity Risk](index=28&type=section&id=Liquidity%20Risk) Liquidity risk, the inability to meet financial obligations, is managed by monitoring cash flows and ensuring sufficient liquidity for liabilities - Liquidity risk refers to the risk that the company will not be able to meet its financial obligations as they fall due[63](index=63&type=chunk) Contractual Maturities of Financial Liabilities (as of June 30, 2025) | Liability Type | Carrying Amount (CAD) | Total (CAD) | 1 Year or Less (CAD) | 1-2 Years (CAD) | | :--- | :--- | :--- | :--- | :--- | | Accounts Payable and Accrued Liabilities | 5,625,870 | 5,625,870 | 5,625,870 | – | | Long-Term Payables | 25,622,878 | 30,002,347 | 644,112 | 29,358,235 | | Lease Liabilities | 67,617 | 75,005 | 63,482 | 11,523 | | Shareholder Loans | 11,197,333 | 11,380,832 | 10,618,832 | 762,000 | | Convertible Debentures | 4,750,824 | 4,597,672 | 4,597,672 | – | | Term Debt | 3,168,123 | 3,261,861 | 3,261,861 | – | | Total | 50,432,645 | 54,943,587 | 24,811,829 | 30,131,758 | [Market Risk](index=29&type=section&id=Market%20Risk) Market risk, affecting financial instrument valuations and operating profits, is influenced by commodity prices, exchange rates, and interest rates, with no commodity price hedging - Market risk refers to the risk that changes in commodity prices, exchange rates, and interest rates will affect the valuation of the company's financial instruments, debt levels, and operating profit and cash flows[68](index=68&type=chunk) - For the three and six months ended June 30, 2025 and 2024, the company did not enter into any financial derivative instruments to mitigate commodity price risk[69](index=69&type=chunk) - The company's debt bears interest at fixed rates, so changes in interest rates will not alter net loss[70](index=70&type=chunk) - A +/- USD 0.01 change in the USD to CAD exchange rate would increase/decrease foreign exchange gains by approximately **CAD 0.1 million**[71](index=71&type=chunk) [Capital Management](index=30&type=section&id=Capital%20Management) The company aims to maintain financial flexibility and optimize capital use, with a capital structure including equity, debt, and working capital, facing ongoing capital acquisition challenges - The company's objective in managing capital is to maintain financial flexibility, preserve its ability to meet financial obligations, and optimize capital use to provide an appropriate return on investment[73](index=73&type=chunk) - The company's capital structure comprises shareholders' equity, long-term payables, long-term debt, convertible debentures, and working capital[73](index=73&type=chunk) Capital Structure (as of June 30) | Indicator | 2025 (CAD) | 2024 (CAD) | Change (%) | | :--- | :--- | :--- | :--- | | Net Debt | 49,713,619 | 45,442,443 | 9.40% | | Shareholders' Equity | (29,546,047) | (21,460,975) | -37.68% | | Total | 20,167,572 | 23,981,468 | -15.90% | [Performance Security Guarantee ("PSG") Facility](index=31&type=section&id=Performance%20Security%20Guarantee%20(%22PSG%22)%20Facility) The company's PSG facility from EDC, reduced to CAD 780,000, guarantees eligible letters of credit without cash collateral, with CAD 650,000 currently guaranteed - The company obtained a PSG loan from Export Development Canada (EDC), with the total amount reduced to **CAD 0.78 million**[76](index=76&type=chunk) - Under the PSG facility terms, EDC guarantees eligible letters of credit for the company without requiring cash collateral[76](index=76&type=chunk) - As of June 30, 2025, the company had **CAD 0.65 million** in letters of credit guaranteed by the PSG, maturing on March 16, 2026[76](index=76&type=chunk) - During the three months ended June 30, 2025, a **CAD 80,000** letter of credit holder was called upon, which the company repaid to EDC on time[76](index=76&type=chunk) [Fair Value Measurement of Financial Instruments](index=32&type=section&id=Fair%20Value%20Measurement%20of%20Financial%20Instruments) Fair value measurements for financial liabilities, particularly convertible debenture derivatives, are determined using the Black-Scholes model based on various market parameters Fair Value of Financial Liabilities (as of June 30, 2025) | Financial Liability | Fair Value (CAD) | Fair Value Level | Valuation Technique and Data Used | | :--- | :--- | :--- | :--- | | Derivative component of July Debenture | (118,562) | Level 3 | Black-Scholes Model | | Derivative component of December Debenture | (82,916) | Level 3 | Black-Scholes Model | | Total | (201,478) | | | - Fair value estimates are based on time to maturity, share price, conversion price, risk-free interest rate, discount rate, expected volatility, and expected dividends[79](index=79&type=chunk) [20. Commitments](index=33&type=section&id=20.%20Commitments) As of June 30, 2025, total commitments were CAD 117.9 million, predominantly from the JX Agreement, with most obligations maturing in over five years Commitments Overview (as of June 30, 2025) | Commitment Type | Total (CAD) | Less than 1 Year (CAD) | 1-2 Years (CAD) | 3-5 Years (CAD) | After 5 Years (CAD) | | :--- | :--- | :--- | :--- | :--- | :--- | | Transportation Commitments | 2,936,813 | 2,328,044 | 608,769 | – | – | | JX Agreement | 114,349,938 | 10,055,750 | 13,272,313 | 10,402,500 | 80,619,375 | | PSG Facility | 650,000 | 650,000 | – | – | – | | Total | 117,936,751 | 13,033,794 | 13,881,082 | 10,402,500 | 80,619,375 | - The JX Agreement commitments represent the vast majority of total commitments, with most maturing in over 5 years[82](index=82&type=chunk) - Transportation commitments are "take-or-pay" firm service transportation agreements, with a term extending to November 30, 2026[84](index=84&type=chunk) [21. Subsequent Events](index=34&type=section&id=21.%20Subsequent%20Events) Post-period, the company issued 62.5 million ordinary shares on August 1, 2025, to convert a USD 1.6 million convertible debenture and announced a private placement to raise HKD 594,139 - On August 1, 2025, the company issued **62,548,866 ordinary shares** to convert the principal portion of the **USD 1.6 million** convertible debenture that matured on July 24, 2025[85](index=85&type=chunk) - After the principal conversion, the remaining accrued and unpaid interest of **USD 0.192 million** will continue to accrue interest at an annual rate of 12%[85](index=85&type=chunk) - On August 14, 2025, the company announced a private placement of **7,775,884 ordinary shares at HKD 0.436 per share**, raising approximately **HKD 594,139.00** in total proceeds[85](index=85&type=chunk) Management Discussion and Analysis [Forward-Looking Information](index=36&type=section&id=Forward-Looking%20Information) This MD&A contains forward-looking statements about future expectations and performance, subject to significant risks and uncertainties, and investors are cautioned against undue reliance - Certain statements in the MD&A are forward-looking statements, subject to significant risks and uncertainties[89](index=89&type=chunk) - Forward-looking statements involve discussions of expectations, beliefs, plans, objectives, assumptions, or future events or performance[89](index=89&type=chunk) - The company strongly cautions investors not to place undue reliance on any such forward-looking statements and has no obligation to update them[90](index=90&type=chunk) [Non-IFRS Financial Measures](index=37&type=section&id=Non-IFRS%20Financial%20Measures) This MD&A uses non-IFRS measures like "Netback" and "Adjusted EBITDA" to assess operational performance and cash generation, acknowledging they may not be comparable to other companies - "Netback" and "Adjusted EBITDA" are non-IFRS financial measures and are not defined by IFRS[92](index=92&type=chunk) - Management believes Netback is an important indicator for evaluating the company's oilfield profitability[92](index=92&type=chunk) - Management uses Adjusted EBITDA to measure the company's efficiency and its ability to generate cash to fund future growth or repay debt[92](index=92&type=chunk) [Outlook](index=37&type=section&id=Outlook) The company, primarily reliant on Basing region oil and gas, anticipates significant increases in Western Canadian natural gas prices in H2 2025 and plans a 9.6 MW gas power plant project - Approximately **90% of the company's revenue** is derived from the Basing area[93](index=93&type=chunk) - Western Canadian natural gas prices are forecast to increase significantly in the second half of 2025 compared to the 2024 average price[93](index=93&type=chunk) - The company intends to pursue the construction of a **9.6 MW natural gas power plant project**, with an estimated EPC phase cost of approximately **CAD 5.84 million**, and plans to raise funds through equity financing[94](index=94&type=chunk) - The company entered into convertible debenture agreements for **USD 1.5 million on March 19, 2025, and USD 1.6 million on July 24, 2024**[95](index=95&type=chunk)[96](index=96&type=chunk) [Selected Quarterly Information](index=39&type=section&id=Selected%20Quarterly%20Information) Total production is seasonal, with natural gas prices falling in Q2 2025 leading to temporary well closures, while net losses were higher in Q4 2024 and Q4 2023 due to impairments Average Daily Production (barrels of oil equivalent/day) | Indicator | Q2 2025 | Q1 2025 | Q2 2024 | Q1 2024 | | :--- | :--- | :--- | :--- | :--- | | Total Production | 1,297 | 1,807 | 280 | 1,461 | | Average Daily Sales Volume | 1,300 | 1,820 | 284 | 1,492 | Financial Data (CAD thousands) | Indicator | Q2 2025 | Q1 2025 | Q2 2024 | Q1 2024 | | :--- | :--- | :--- | :--- | :--- | | Production Revenue | 2,125 | 2,908 | 715 | 2,827 | | Net Loss | (5,313) | (3,576) | (3,848) | (3,430) | | Adjusted EBITDA | 137 | 574 | (726) | 574 | | Net Working Capital | (24,029) | (16,261) | (13,307) | (12,177) | - In late Q2 2025, natural gas commodity prices significantly declined, leading the company to temporarily shut in natural gas production in June and July due to uneconomic conditions[101](index=101&type=chunk) - Low natural gas prices in Q1 2024 resulted in an overall decrease in the company's revenue and net loss, leading to the shut-in of gas wells in April[102](index=102&type=chunk) [Daily Production and Sales Volumes](index=41&type=section&id=Daily%20Production%20and%20Sales%20Volumes) For the three months ended June 30, 2025, total sales volumes increased significantly by 358% due to the resumption of natural gas production, despite a decline in oil output Daily Production and Sales Volume Changes (for the three months ended June 30) | Indicator | 2025 | 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Natural Gas (Mcf/day) | 7,194 | 1,361 | 429% | | Oil (Bbls/day) | 31 | 36 | (14%) | | Total Production (Boe/day) | 1,297 | 280 | 364% | | Total Sales Volume (Boe/day) | 1,300 | 284 | 358% | - Total sales volumes for the three and six months ended June 30, 2025, were **429% and 86% higher**, respectively, than the comparative periods, primarily due to the resumption of full natural gas production in Q1 2025 after well shut-ins in Q2 2024[105](index=105&type=chunk) - Oil production was **14% and 20% lower** than the comparative periods in 2024 due to natural decline and maintenance impacting optimal production[107](index=107&type=chunk) [Revenue](index=42&type=section&id=Revenue) For the three months ended June 30, 2025, production revenue increased by 197% due to higher natural gas prices and increased production, while crude oil revenue declined Revenue Changes (for the three months ended June 30) | Revenue Source | 2025 (CAD thousands) | 2024 (CAD thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Natural Gas | 1,502 | 193 | 678% | | Crude Oil | 237 | 352 | (33%) | | Total Production Revenue | 2,125 | 715 | 197% | | Total Revenue | 2,118 | 724 | 193% | - Production revenue for the three and six months ended June 30, 2025, increased by **197% and 42%**, respectively, compared to the 2024 comparative periods, mainly due to higher natural gas prices and increased production[108](index=108&type=chunk) - Crude oil production revenue decreased due to a decline in overall production and lower average sales prices[109](index=109&type=chunk) [Commodity Prices](index=43&type=section&id=Commodity%20Prices) For the three months ended June 30, 2025, realized natural gas prices increased by 39%, while average selling prices for crude oil, NGLs, and condensate decreased Average Commodity Sales Prices (for the three months ended June 30) | Commodity | 2025 (CAD) | 2024 (CAD) | Change (%) | | :--- | :--- | :--- | :--- | | Natural Gas (per Mcf) | 2.15 | 1.55 | 39% | | Crude Oil (per Bbl) | 82.50 | 99.88 | (17%) | | NGLs (per Bbl) | 21.41 | 28.32 | (24%) | | Condensate (per Bbl) | 95.63 | 145.79 | (34%) | - For the three months ended June 30, 2025, realized natural gas sales prices increased by **39%** compared to the prior period in 2024, primarily due to higher average market prices[110](index=110&type=chunk) - Average sales prices for crude oil, NGLs, and condensate all decreased[110](index=110&type=chunk) [Royalties](index=44&type=section&id=Royalties) For the three months ended June 30, 2025, royalties shifted from a recovery to an expense, with the effective average royalty rate changing from (10%) to 7% Royalty Expense/(Recovery) (CAD thousands, for the three months ended June 30) | Item | 2025 | 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Natural Gas, NGLs and Condensate | 71 | (212) | (134%) | | Crude Oil | 80 | 142 | (44%) | | Total Royalty Expense/(Recovery) | 151 | (70) | (316%) | | Effective Average Royalty Rate | 7% | (10%) | (173%) | - For the three months ended June 30, 2025, royalty expense shifted from a recovery in the prior period of 2024 to an expense, with the effective average royalty rate changing from **(10%) to 7%**[112](index=112&type=chunk) - Alberta royalties are determined by a sliding scale formula, with rates fluctuating based on changes in production, market prices, and cost allowances[113](index=113&type=chunk) [Operating Costs](index=45&type=section&id=Operating%20Costs) For the three months ended June 30, 2025, total operating costs for natural gas, NGLs, and condensate increased by 24% due to higher production, but unit costs decreased due to efficiency Operating Cost Changes (CAD thousands, for the three months ended June 30) | Item | 2025 | 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Natural Gas, NGLs and Condensate | 3,912 | 3,159 | 24% | | Crude Oil | 78 | 159 | (51%) | | Total Operating Costs | 3,990 | 3,318 | 20% | | Average Unit Cost (CAD/Boe) | 33.80 | 130.41 | (74%) | - For the three and six months ended June 30, 2025, total operating costs (OPEX) for natural gas, NGLs, and condensate were **24% higher** than the comparative period in 2024, reflecting increased production during the period[114](index=114&type=chunk) - On a unit cost basis, OPEX was lower than the comparative period due to operational efficiencies from increased production[114](index=114&type=chunk) - Total OPEX for crude oil decreased by **51% and 39%**, respectively, compared to the comparative periods, primarily due to reduced trucking expenses[116](index=116&type=chunk) [General and Administrative Costs](index=46&type=section&id=General%20and%20Administrative%20Costs) For the six months ended June 30, 2025, total G&A costs decreased by 45%, primarily due to reduced personnel expenses and office costs following management changes and office relocation General and Administrative Cost Changes (CAD thousands, for the six months ended June 30) | Item | 2025 | 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Personnel Expenses | 209 | 610 | (66%) | | Directors' Fees | 55 | 20 | 175% | | Accounting, Legal and Consulting Fees | 207 | 302 | (31%) | | Total General and Administrative Expenses | 462 | 837 | (45%) | - For the six months ended June 30, 2025, the reduction in staff costs and shadow unit expenses reflects changes in the CEO and Board of Directors[117](index=117&type=chunk) - Office expenses decreased, primarily due to the company's headquarters relocation and sublease ending in February 2025[118](index=118&type=chunk) [Finance Costs](index=47&type=section&id=Finance%20Costs) For the six months ended June 30, 2025, total finance costs decreased by 36%, driven by foreign exchange gains offsetting increased interest and amortization expenses Finance Cost Changes (CAD thousands, for the six months ended June 30) | Item | 2025 | 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Interest Expense and Financing Costs | 675 | 582 | 16% | | Accretion Expense | 1,162 | 708 | 64% | | Foreign Exchange (Gain)/Loss | (739) | 404 | (283%) | | Total Finance Costs | 1,109 | 1,735 | (36%) | - For the six months ended June 30, 2025, total finance costs decreased by **36%**, primarily due to foreign exchange gains offsetting increased interest expense and accretion expense[120](index=120&type=chunk) - Foreign exchange gains primarily resulted from the conversion of USD-denominated term debt, shareholder loans, and convertible debentures[122](index=122&type=chunk) [Depletion, Depreciation and Amortization](index=48&type=section&id=Depletion,%20Depreciation%20and%20Amortization) For the six months ended June 30, 2025, total DD&A increased by 16%, but DD&A per barrel of oil equivalent decreased by 35% due to reduced reserves and asset retirement adjustments Depletion, Depreciation and Amortization Changes (CAD thousands, for the six months ended June 30) | Item | 2025 | 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Depletion | 1,369 | 1,002 | 37% | | Amortization of Right-of-Use Assets | 144 | 303 | (53%) | | Total | 1,514 | 1,308 | 16% | | Per Barrel of Oil Equivalent | 5.31 | 8.17 | (35%) | - For the six months ended June 30, 2025, total depletion, depreciation, and amortization increased by **16%**, but DD&A per barrel of oil equivalent decreased by **35%**, primarily due to reduced proved reserves and asset retirement obligation adjustments[124](index=124&type=chunk) [Impairment and Write-offs](index=48&type=section&id=Impairment%20and%20Write-offs) For the six months ended June 30, 2025, impairment and write-offs increased significantly by 12476% to CAD 2.35 million, primarily due to expiring land leases in the Voyager CGU Impairment and Write-off Changes (CAD thousands, for the six months ended June 30) | Item | 2025 | 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Exploration and Evaluation Write-offs | 2,351 | 19 | 12476% | | Total | 2,351 | 19 | 12476% | - For the three months ended June 30, 2025, the company wrote off the value of expired leases related to its exploration and evaluation assets, primarily due to six leases in the Voyager CGU expiring and not being renewed[126](index=126&type=chunk) - For the three and six months ended June 30, 2025 and 2024, the company did not identify any impairment of exploration and evaluation and PP&E assets[126](index=126&type=chunk) [Loss and Comprehensive Loss](index=49&type=section&id=Loss%20and%20Comprehensive%20Loss) For the six months ended June 30, 2025, loss and comprehensive loss increased by 22%, mainly due to write-offs of exploration and evaluation assets, partially offset by foreign exchange gains Total Loss and Comprehensive Loss Changes (CAD thousands, for the six months ended June 30) | Item | 2025 | 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Total Loss and Comprehensive Loss | (8,889) | (7,278) | (22%) | - Loss and comprehensive loss for the six months ended June 30, 2025, increased by **22%** compared to the 2024 comparative period, primarily due to the write-off of exploration and evaluation asset values and severance payments incurred in 2024, partially offset by foreign exchange gains[127](index=127&type=chunk) [Capital Expenditures](index=50&type=section&id=Capital%20Expenditures) For the six months ended June 30, 2025, PP&E capital expenditures increased by 139% due to power plant project spending, while E&E expenditures decreased due to asset sales Capital Expenditure Changes (CAD thousands, for the six months ended June 30) | Item | 2025 | 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Total PP&E | 76 | 32 | 139% | | Total Exploration and Evaluation | 2 | 19 | (89%) | | Total PP&E and Exploration and Evaluation | 78 | 50 | 54% | | Total (including non-cash working capital changes) | (517) | (231) | 124% | - For the six months ended June 30, 2025, PP&E capital expenditures increased by **139%**, primarily due to expenditures on the power plant project[128](index=128&type=chunk) - Drilling, completion, and workover costs for exploration and evaluation assets were written off due to the asset sale on April 1, 2024[129](index=129&type=chunk) [Capital Management](index=51&type=section&id=Capital%20Management) The company aims to maintain financial flexibility and optimize capital use, with a capital structure including equity, debt, and working capital, facing ongoing capital acquisition challenges - The company's objective in managing capital is to maintain financial flexibility, preserve its ability to meet financial obligations, and optimize capital use to provide an appropriate return on investment[130](index=130&type=chunk) - The company's capital structure comprises shareholders' equity, shareholder loans, term debt, long-term payables, convertible debentures, other liabilities, lease liabilities, and working capital[130](index=130&type=chunk) Capital Structure (CAD thousands, as of June 30) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Net Debt | 49,715 | 45,443 | | Shareholders' Equity | (29,546) | (21,461) | | Total Capital | 20,169 | 23,981 | | Debt-to-Capital Ratio | 246% | 189% | - The company's future viability depends on its ability to obtain additional capital on acceptable terms[130](index=130&type=chunk) [Capital Resources](index=53&type=section&id=Capital%20Resources) The company's funding sources include debt, equity, shareholder loans, and operating cash flow, but faces significant going concern uncertainty due to working capital deficits and loan defaults - The company's primary sources of funding are proceeds from debt financing, equity financing, shareholder loans, and cash generated from operations[134](index=134&type=chunk) - For the six months ended June 30, 2025, the company received **CAD 1.2 million** from a shareholder[134](index=134&type=chunk) - The company entered into convertible debenture agreements for **USD 1.5 million on March 19, 2025, and USD 1.6 million on July 24, 2024**[134](index=134&type=chunk) - The company's failure to repay the overdue amounts within the grace period for the CIMC Group and JX Loans by April 25, 2025, creates significant uncertainty regarding its ability to continue as a going concern[136](index=136&type=chunk)[137](index=137&type=chunk)[138](index=138&type=chunk) [Use of Proceeds from March 2024 Subscription](index=55&type=section&id=Use%20of%20Proceeds%20from%20March%202024%20Subscription) The net proceeds of CAD 1.26 million from the March 2024 subscription were fully utilized for general working capital purposes Use of Proceeds from March 2024 Subscription (CAD millions) | Business Objective | Planned Use of Net Proceeds | Actual Use of Net Proceeds | | :--- | :--- | :--- | | General Working Capital | 1.26 | 1.26 | - The March 2024 subscription closed on **May 29, 2024**[140](index=140&type=chunk) [Use of Proceeds from November 2023 Subscription](index=56&type=section&id=Use%20of%20Proceeds%20from%20November%202023%20Subscription) The net proceeds of CAD 1.20 million from the November 2023 subscription were fully utilized for general working capital purposes Use of Proceeds from November 2023 Subscription (CAD millions) | Business Objective | Planned Use of Net Proceeds | Actual Use of Net Proceeds | | :--- | :--- | :--- | | General Working Capital | 1.20 | 1.20 | - The November 2023 subscription closed on **February 8, 2024**[142](index=142&type=chunk) [Issued Shares, Warrants, Convertible Debentures and Share Options](index=57&type=section&id=Issued%20Shares,%20Warrants,%20Convertible%20Debentures%20and%20Share%20Options) As of August 1, 2025, 62.5 million ordinary shares were issued to convert a USD 1.6 million convertible debenture, with 522.9 million ordinary shares outstanding and 800,000 unexercised options as of June 30, 2025 - On August 1, 2025, the company issued **62,548,866 ordinary shares** to repay the principal portion of the **USD 1.6 million** convertible debenture that matured on July 24, 2025[143](index=143&type=chunk) - As of June 30, 2025, the company had **522,886,520 ordinary shares** issued[143](index=143&type=chunk) - As of June 30, 2025, accrued and unpaid interest for the company's December and July debentures totaled **CAD 0.23 million**[145](index=145&type=chunk) - As of June 30, 2025, the company had **800,000 unexercised share options**[146](index=146&type=chunk) [Commitments](index=58&type=section&id=Commitments) The company has various agreements, business commitments, and contingencies in its normal course of business, detailed in Notes 20 and 28 of the financial statements - The company has various agreements, business commitments, and contingencies in its normal course of business[147](index=147&type=chunk) - Details regarding commitments are disclosed in Note 20 of the interim statements and Note 28 of the financial statements[147](index=147&type=chunk) [Dividends](index=58&type=section&id=Dividends) The Board did not approve any dividends for the three and six months ended June 30, 2025 and 2024 - The Board of Directors did not approve any dividends for the three and six months ended June 30, 2025 and 2024[148](index=148&type=chunk) [Related Party Transactions](index=58&type=section&id=Related%20Party%20Transactions) Disclosures regarding the company's related party transactions are provided in Notes 10, 18, and 20 of the interim statements, and Notes 13, 19, and 26 of the financial statements - Disclosures regarding the company's related party transactions are provided in Notes 10, 18, and 20 of the interim statements, and Notes 13, 19, and 26 of the financial statements[149](index=149&type=chunk) [Off-Balance Sheet Transactions](index=58&type=section&id=Off-Balance%20Sheet%20Transactions) The company was not involved in any off-balance sheet transactions for the three and six months ended June 30, 2025, or for the full year - For the three and six months ended June 30, 2025, and for the full year, the company was not involved in any off-balance sheet transactions[150](index=150&type=chunk) [Pledged Assets](index=58&type=section&id=Pledged%20Assets) All physical property, plant, and equipment assets with a cost of approximately CAD 5.2 million are pledged to support the company's debt arrangements, with remaining assets unpledged - All physical property, plant, and equipment assets with a cost of approximately **CAD 5.2 million** are pledged to support the company's debt arrangements[151](index=151&type=chunk) - The company's remaining assets are unpledged[151](index=151&type=chunk) [Contingent Liabilities](index=59&type=section&id=Contingent%20Liabilities) As of June 30, 2025, and the date of this MD&A, the company had no significant undisclosed contingent liabilities - As of June 30, 2025, and the date of this Management Discussion and Analysis, the company had no significant undisclosed contingent liabilities[152](index=152&type=chunk) [Material Investments, Acquisitions and Disposals of Subsidiaries](index=59&type=section&id=Material%20Investments,%20Acquisitions%20and%20Disposals%20of%20Subsidiaries) Except as disclosed in this MD&A, the company had no other material investments, acquisitions, or disposals of subsidiaries, associates, or joint ventures during the period - Except as disclosed in this MD&A, the company had no other material investments, acquisitions, or disposals of subsidiaries, associates, or joint ventures[153](index=153&type=chunk) [Future Plans for Material Investments and Capital Assets](index=59&type=section&id=Future%20Plans%20for%20Material%20Investments%20and%20Capital%20Assets) Except as disclosed in this MD&A, the company has no other future plans for material investments or capital assets as of the date of this MD&A - Except as disclosed in this MD&A, the company has no other future plans for material investments or capital assets[154](index=154&type=chunk) [Subsequent Events](index=59&type=section&id=Subsequent%20Events) Post-period, the company issued 62.5 million ordinary shares on August 1, 2025, to convert a USD 1.6 million convertible debenture and announced a private placement to raise approximately CAD 0.54 million - On August 1, 2025, the company issued **62,548,866 ordinary shares** to convert the principal portion of the **USD 1.6 million** convertible debenture that matured in July 2025[155](index=155&type=chunk) - As of July 24, 2025, unpaid accrued interest related to the July convertible debenture was **USD 0.192 million**[155](index=155&type=chunk) - On August 14, 2025, the company announced a private placement of **7,775,884 ordinary shares at HKD 0.436 per share**, raising approximately **CAD 0.54 million** in total proceeds[155](index=155&type=chunk) [Financial Risk Management](index=59&type=section&id=Financial%20Risk%20Management) The Board oversees the risk management framework for credit, liquidity, and market risks, monitoring foreign exchange exposure without a formal hedging policy - The Board of Directors is fully responsible for establishing and overseeing the company's risk management framework[156](index=156&type=chunk) - The company holds various financial instruments, including accounts receivable, accounts payable, cash and cash equivalents, long-term payables, loans, convertible debentures, and shareholder loans[157](index=157&type=chunk) - For the six months ended June 30, 2025, the company recorded an unrealized foreign exchange gain of **CAD 0.74 million** (2024: loss of CAD 0.4 million)[158](index=158&type=chunk) - The company currently has no foreign currency hedging policy, but management closely monitors foreign exchange risk[158](index=158&type=chunk) [Relationship with Stakeholders](index=60&type=section&id=Relationship%20with%20Stakeholders) The company actively maintains good relationships with Indigenous communities, local stakeholders, and government bodies, ensuring regulatory compliance, and had 3 employees as of June 30, 2025 - The company actively fosters, builds, and maintains good relationships with Indigenous peoples, all individuals near or interested in the company's projects, and other businesses[159](index=159&type=chunk) - The company works closely with municipal, provincial, and federal stakeholders to ensure regulatory authorities are aware of its compliance with all necessary rules, regulations, and laws[159](index=159&type=chunk) - As of June 30, 2025, the company had **3 employees** (2024: 5 employees)[160](index=160&type=chunk) - Employee remuneration (including directors' fees) for the six months ended June 30, 2025, totaled **CAD 0.27 million** (2024: CAD 0.67 million, including CAD 0.39 million in severance payments)[160](index=160&type=chunk) [Application of Critical Accounting Estimates](index=61&type=section&id=Application%20of%20Critical%20Accounting%20Estimates) Financial statement preparation requires management judgments, estimates, and assumptions that influence accounting policies and reported amounts, with continuous review and recognition of revisions - The preparation of financial statements requires management to make judgments, estimates, and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, and income and expenses[161](index=161&type=chunk) - Estimates and underlying assumptions are reviewed on an ongoing basis, and revisions to accounting estimates are recognized in the period in which the estimate is revised and in any affected future periods[161](index=161&type=chunk) [Changes in Accounting Policies](index=61&type=section&id=Changes%20in%20Accounting%20Policies) The financial statements are prepared under applicable IFRS, and the company has adopted all new and revised IFRS effective for the period ended June 30, 2025 - The financial statements are prepared in accordance with all applicable International Financial Reporting Standards issued by the International Accounting Standards Board[162](index=162&type=chunk) - The company has adopted all new and revised IFRS applicable for the period ended June 30, 2025[162](index=162&type=chunk) [Disclosure Controls and Procedures and Internal Control Over Financial Reporting](index=62&type=section&id=Disclosure%20Controls%20and%20Procedures%20and%20Internal%20Control%20Over%20Financial%20Reporting) The interim CEO and CFO designed and oversee DC&P and ICFR to ensure accurate and timely information, which management deems effective as

[Company Announcements and Disclaimers](index=1&type=section&id=Company%20Announcements%20and%20Disclaimers) This section provides official announcements and disclaimers regarding the interim results and market characteristics [Interim Results Announcement](index=1&type=section&id=Interim%20Results%20Announcement) Shenglong Jinxiu International Limited is pleased to announce its unaudited condensed consolidated interim results for the six months ended June 30, 2025, with this announcement containing the full interim report and complying with relevant GEM Listing Rules of the Stock Exchange - The Company announced its unaudited condensed consolidated interim results for the six months ended June 30, 2025[2](index=2&type=chunk) - This announcement complies with the information requirements of the GEM Listing Rules of the Stock Exchange regarding preliminary announcements of interim results[2](index=2&type=chunk) [Board Members and Responsibility Statement](index=2&type=section&id=Board%20Members%20and%20Responsibility%20Statement) As of the announcement date, the Board comprises three executive directors (Sheng Yingming, Fang Xu, Sheng Sainan) and three independent non-executive directors (Ma Lingfei, Cao Bingchang, Zheng Yong); all directors jointly and individually assume full responsibility for the announcement's content and confirm its accuracy, completeness, and lack of misleading information - The Board of Directors includes three executive directors: **Mr. Sheng Yingming**, **Mr. Fang Xu**, and **Ms. Sheng Sainan**[4](index=4&type=chunk) - The Board of Directors includes three independent non-executive directors: **Mr. Ma Lingfei**, **Mr. Cao Bingchang**, and **Mr. Zheng Yong**[4](index=4&type=chunk) - The directors confirm that the information contained in the announcement is accurate and complete in all material respects, and contains no misleading or fraudulent statements[5](index=5&type=chunk) [GEM Market Characteristics and Disclaimer](index=3&type=section&id=GEM%20Market%20Characteristics%20and%20Disclaimer) The GEM market provides a listing platform for small and medium-sized companies with higher investment risks, requiring investors to exercise caution; Hong Kong Exchanges and Clearing Limited and The Stock Exchange are not responsible for this report's content, make no statement as to its accuracy or completeness, and accept no liability for any loss - The GEM market provides a listing platform for small and medium-sized companies with higher investment risks, and investors should understand the potential risks[7](index=7&type=chunk) - Hong Kong Exchanges and Clearing Limited and The Stock Exchange take no responsibility for the contents of this report, make no representation as to its accuracy or completeness[7](index=7&type=chunk) [Company Information](index=4&type=section&id=Company%20Information) This section details the company's board members, committees, key advisors, and operational locations [Board and Committee Members](index=4&type=section&id=Board%20and%20Committee%20Members) The Company's Board of Directors consists of executive directors Sheng Yingming, Fang Xu, Sheng Sainan, and independent non-executive directors Cao Bingchang, Ma Lingfei, Zheng Yong; Mr. Cao Bingchang chairs the Audit Committee, Mr. Zheng Yong chairs the Remuneration Committee, and Mr. Ma Lingfei chairs the Nomination Committee - Executive directors include **Mr. Sheng Yingming**, **Mr. Fang Xu**, and **Ms. Sheng Sainan**[9](index=9&type=chunk) - Independent non-executive directors include **Mr. Cao Bingchang**, **Mr. Ma Lingfei**, and **Mr. Zheng Yong**[9](index=9&type=chunk) - The Audit Committee Chairman is **Mr. Cao Bingchang**, the Remuneration Committee Chairman is **Mr. Zheng Yong**, and the Nomination Committee Chairman is **Mr. Ma Lingfei**[9](index=9&type=chunk) [Key Advisors and Offices](index=4&type=section&id=Key%20Advisors%20and%20Offices) The Company's legal advisor is Tongli Law Firm (Limited Liability Partnership), and its auditor is Tianjian International Certified Public Accountants Co., Ltd. Principal bankers include China Construction Bank and Shanghai Pudong Development Bank. The Company maintains a registered office in the Cayman Islands and principal places of business in Hong Kong and Zhejiang Province, China - The legal advisor as to Hong Kong law is Tongli Law Firm (Limited Liability Partnership)[9](index=9&type=chunk) - The auditor is Tianjian International Certified Public Accountants Co., Ltd[9](index=9&type=chunk) - The principal bankers are China Construction Bank Corporation and Shanghai Pudong Development Bank Co., Ltd[9](index=9&type=chunk) [Management Discussion and Analysis](index=5&type=section&id=Management%20Discussion%20and%20Analysis) This section offers a comprehensive review of the group's business operations, financial performance, liquidity, and future outlook [Business Review](index=5&type=section&id=Business%20Review) The Group is primarily engaged in manufacturing and selling decorative printing material products, including decorative paper, melamine impregnated paper, and PVC floor film, serving over 500 domestic and international clients across more than 40 countries during the period - The Group is principally engaged in the manufacture and sale of decorative printing material products, including decorative paper, melamine impregnated paper, and PVC floor film[11](index=11&type=chunk) - During the period, the Group served over **500+ customers** in domestic and international markets, with overseas sales spanning more than **40+ countries** across Asia, North America, South America, Europe, Oceania, and Africa[11](index=11&type=chunk) [Financial Review](index=5&type=section&id=Financial%20Review) Revenue for the period increased by **3.8%** to **RMB 270.5 million**, driven primarily by increased overseas market demand; cost of sales decreased by **8.4%**, gross profit significantly grew by **34.5%** to **RMB 99.7 million**, and gross profit margin improved to **36.9%**; administrative expenses rose by **33.3%** due to increased salaries, benefits, and pre-operating costs for the new plant, while net other income significantly decreased by **98.5%** due to exchange losses Key Financial Metrics Changes (For the six months ended June 30, 2025) | Metric | 2025 (RMB million) | 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 270.5 | 260.6 | +3.8% | | Cost of sales | 170.8 | 186.5 | -8.4% | | Gross profit | 99.7 | 74.1 | +34.5% | | Gross profit margin | 36.9% | 28.4% | +8.5 percentage points | | Selling expenses | 22.5 | 21.1 | +6.4% | | Administrative expenses | 48.8 | 36.6 | +33.3% | | Net other income and gains | 0.1 | 5.2 | -98.5% | | Net finance costs | 5.3 | 5.1 | +5.0% | | Income tax expense | 3.3 | 1.4 | +135.7% | | Profit attributable to owners of the Company | 19.9 | 15.1 | +31.8% | - The increase in revenue was mainly driven by increased demand from overseas markets (especially the United Arab Emirates and India) and the Chinese market[12](index=12&type=chunk) - The decrease in cost of sales was primarily due to lower production materials such as base paper and other production costs[13](index=13&type=chunk) - The increase in administrative expenses was mainly due to higher staff salaries and benefits for administrative employees, entertainment expenses, and pre-operating infrastructure costs for the new manufacturing plant in Shexian[16](index=16&type=chunk) - The significant decrease in net other income and gains was mainly due to exchange losses recorded from the depreciation of the US dollar against the RMB[17](index=17&type=chunk) [Liquidity, Financial Resources, and Capital Structure](index=7&type=section&id=Liquidity%2C%20Financial%20Resources%2C%20and%20Capital%20Structure) As of June 30, 2025, the Group's current assets were approximately **RMB 354.6 million**, current liabilities approximately **RMB 187.0 million**, with the current ratio increasing to **1.90 times**; total bank borrowings rose to **RMB 468.9 million**, and the gearing ratio increased to **1.61**, primarily due to higher long-term bank borrowings Liquidity and Capital Structure (As of June 30, 2025) | Metric | As of June 30, 2025 (RMB million) | As of December 31, 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Current assets | 354.6 | 324.4 | +9.3% | | Current liabilities | 187.0 | 287.9 | -35.0% | | Current ratio | 1.90 times | 1.13 times | +0.77 times | | Total bank borrowings | 468.9 | 380.8 | +23.1% | | Gearing ratio | 1.61 | 1.37 | +0.24 | - The increase in the current ratio was mainly due to a decrease in bills payable and payables for the acquisition of property, plant and equipment[21](index=21&type=chunk) - The increase in the gearing ratio was mainly due to an increase in long-term bank borrowings during the period[22](index=22&type=chunk) - The Group faces various currency foreign exchange risks primarily related to USD, EUR, and HKD, which are regularly monitored and hedged[23](index=23&type=chunk) [Capital Commitments and Employee Information](index=8&type=section&id=Capital%20Commitments%20and%20Employee%20Information) As of June 30, 2025, the Group's contracted but unprovided capital expenditure for the acquisition of property, plant and equipment was approximately **RMB 108.9 million**; the number of employees increased to **460**, with staff costs of approximately **RMB 48.7 million**; there were no significant investments, acquisitions, or disposals of subsidiaries during the period Capital Commitments and Employee Data | Metric | As of June 30, 2025 (RMB million) | As of December 31, 2024 (RMB million) | | :--- | :--- | :--- | | Capital expenditure for acquisition of

[Announcement Overview](index=1&type=section&id=Announcement%20Overview) [Announcement Overview and GEM Characteristics](index=1&type=section&id=Announcement%20Overview%20and%20GEM%20Characteristics) This announcement presents the unaudited interim results of Xinli Software (Group) Co., Ltd. for the six months ended June 30, 2025, highlighting GEM's higher investment risks for SMEs - This announcement presents the unaudited interim results of Xinli Software (Group) Co., Ltd. for the six months ended June 30, 2025[1](index=1&type=chunk) - GEM is positioned as a listing platform for small and medium-sized companies, carrying higher investment risks, potential market volatility, and no guarantee of high liquidity[2](index=2&type=chunk) - Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited are not responsible for the accuracy or completeness of this announcement[2](index=2&type=chunk) [Financial Performance](index=2&type=section&id=Financial%20Performance) [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended June 30, 2025, the Group's revenue decreased by 27.2% year-on-year to RMB 18,201 thousand, but gross profit turned from loss to profit, and total loss and comprehensive expenses narrowed by 26.6% to RMB 7,655 thousand Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the six months ended June 30) | Indicator | 2025 (thousand RMB) | 2024 (thousand RMB) | | :--- | :--- | :--- | | Sales Revenue | 18,201 | 25,009 | | Cost of Sales and Services | (18,114) | (25,443) | | Gross Profit/(Loss) | 87 | (434) | | Other Income | 93 | 224 | | Reversal of impairment loss on expected credit losses | 808 | – | | Other Gains and Losses | 671 | (524) | | Distribution and Selling Expenses | (3,027) | (2,670) | | Administrative Expenses | (5,774) | (6,503) | | Finance Costs | (513) | (519) | | Loss Before Tax | (7,655) | (10,426) | | Income Tax Expense | – | – | | Total Loss and Comprehensive Expenses for the Period | (7,655) | (10,426) | | Loss Per Share (Basic) | (0.58) | (0.79) | | Loss Per Share (Diluted) | (0.58) | (0.79) | - Sales revenue decreased by **27.2%** year-on-year, primarily due to a decline in technical support service income[3](index=3&type=chunk)[34](index=34&type=chunk) - Gross profit turned from a loss of **RMB 434 thousand** in the same period last year to a profit of **RMB 87 thousand**[3](index=3&type=chunk) - Total loss and comprehensive expenses for the period decreased by **26.6%** year-on-year, narrowing from **RMB 10,426 thousand** to **RMB 7,655 thousand**[3](index=3&type=chunk)[35](index=35&type=chunk) [Consolidated Statement of Financial Position](index=3&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's net assets decreased compared to December 31, 2024, mainly due to a reduction in bank balances and cash, though current liabilities also decreased Consolidated Statement of Financial Position (As of June 30, 2025) | Indicator | June 30, 2025 (thousand RMB) | December 31, 2024 (thousand RMB) | | :--- | :--- | :--- | | **Non-current Assets** | | | | Property, Plant and Equipment | 7,601 | 7,934 | | Right-of-use Assets | 208 | 193 | | **Current Assets** | | | | Inventories – Finished Goods | 973 | 933 | | Trade and Other Receivables | 29,538 | 21,311 | | Contract Assets | 401 | 488 | | Financial Assets at Fair Value Through Profit or Loss | – | 189 | | Restricted Bank Deposits | 976 | 626 | | Bank Balances and Cash | 10,170 | 28,528 | | **Current Liabilities** | | | | Trade and Other Payables | 7,214 | 9,387 | | Amounts Due to Related Parties | 1,751 | 1,878 | | Borrowings | 1,000 | 1,000 | | Lease Liabilities | 85 | 73 | | **Non-current Liabilities** | | | | Borrowings | 27,899 | 28,291 | | **Net Assets** | 11,918 | 19,573 | | **Total Equity** | 11,918 | 19,573 | - Net assets decreased from **RMB 19,573 thousand** as of December 31, 2024, to **RMB 11,918 thousand** as of June 30, 2025[4](index=4&type=chunk) - Bank balances and cash significantly decreased from **RMB 28,528 thousand** as of December 31, 2024, to **RMB 10,170 thousand** as of June 30, 2025[4](index=4&type=chunk) - Trade and other receivables increased from **RMB 21,311 thousand** as of December 31, 2024, to **RMB 29,538 thousand** as of June 30, 2025[4](index=4&type=chunk) [Consolidated Statement of Changes in Equity](index=4&type=section&id=Consolidated%20Statement%20of%20Changes%20in%20Equity) For the six months ended June 30, 2025, the Group's total equity decreased due to the loss for the period and expiry of share options, leading to an expansion of accumulated losses Consolidated Statement of Changes in Equity (For the six months ended June 30) | Indicator | January 1, 2025 (thousand RMB) | Total Loss and Comprehensive Expenses for the Period (thousand RMB) | Share Options Lapsed (thousand RMB) | June 30, 2025 (thousand RMB) | | :--- | :--- | :--- | :--- | :--- | | Share Capital | 12,538 | – | – | 12,538 | | Share Premium | 179,132 | – | – | 179,132 | | Statutory Reserve | 3,917 | 62 | – | 3,979 | | Shareholders' Contribution | 6,641 | – | – | 6,641 | | Exchange Reserve | 5,217 | – | – | 5,217 | | Share-based Payment Reserve | 5,461 | – | (2,329) | 3,132 | | Accumulated Losses | (193,333) | (7,655) | 2,329 | (198,721) | | Total | 19,573 | (7,655) | – | 11,918 | - As of June 30, 2025, accumulated losses increased to **RMB 198,721 thousand**, compared to **RMB 193,333 thousand** as of January 1, 2024[5](index=5&type=chunk) - Total loss and comprehensive expenses for the period amounted to **RMB 7,655 thousand**[5](index=5&type=chunk) - Lapse of share options resulted in a **RMB 2,329 thousand** reduction in share-based payment reserve and a corresponding reduction in accumulated losses[5](index=5&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=5&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash used in operating activities decreased, but total cash and cash equivalents still showed a net decrease Condensed Consolidated Statement of Cash Flows (For the six months ended June 30) | Indicator | 2025 (thousand RMB) | 2024 (thousand RMB) | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | (17,768) | (23,060) | | Net Cash From Investing Activities | 44 | 60 | | Net Cash (Used in)/From Financing Activities | (634) | 857 | | Net Decrease in Cash and Cash Equivalents | (18,358) | (22,143) | | Cash and Cash Equivalents at Beginning of Period | 28,528 | 35,107 | | Cash and Cash Equivalents at End of Period | 10,170 | 12,964 | - Net cash used in operating activities decreased from **RMB 23,060 thousand** in the same period of 2024 to **RMB 17,768 thousand** in 2025[7](index=7&type=chunk) - Cash and cash equivalents at the end of the period were **RMB 10,170 thousand**, a significant decrease from **RMB 28,528 thousand** at the beginning of the period[7](index=7&type=chunk) [Notes to the Financial Statements](index=6&type=section&id=Notes%20to%20the%20Financial%20Statements) [1. General Information](index=6&type=section&id=1.%20General%20Information) This note outlines the basis of preparation for the Group's unaudited condensed interim financial statements, adhering to GEM Listing Rules, IAS 34, and IFRS, with RMB as the functional currency - Financial statements are prepared in accordance with Chapter 18 of the GEM Listing Rules, IAS 34, and IFRS[8](index=8&type=chunk) - The Group's functional currency is RMB[9](index=9&type=chunk) - The adoption of new IFRS had no significant impact on the Group's condensed consolidated financial statements for the period[10](index=10&type=chunk) [2. Revenue and Operating Segments](index=7&type=section&id=2.%20Revenue%20and%20Operating%20Segments) The Group's revenue is segmented into software products, hardware products, and technical support services, with the latter being the primary source but experiencing a significant decline this period; all revenue and non-current assets originate from mainland China - The Group's reportable and operating segments include sales of software products, sales of hardware products, and provision of technical support services[12](index=12&type=chunk)[14](index=14&type=chunk) Revenue and Segment Results (For the six months ended June 30, 2025) | Segment | Sales Revenue (thousand RMB) | Segment Results (thousand RMB) | | :--- | :--- | :--- | | Software Products | 536 | (807) | | Hardware Products | 1,424 | (67) | | Technical Support Services | 16,241 | (5,332) | | Total | 18,201 | (6,206) | Revenue and Segment Results (For the six months ended June 30, 2024) | Segment | Sales Revenue (thousand RMB) | Segment Results (thousand RMB) | | :--- | :--- | :--- | | Software Products | 573 | (1,196) | | Hardware Products | 947 | (762) | | Technical Support Services | 23,489 | (5,887) | | Total | 25,009 | (7,845) | - All the Group's sales revenue is derived from customers in mainland China, and all non-current assets are located in China[18](index=18&type=chunk)[19](index=19&type=chunk) [3. Other Income](index=10&type=section&id=3.%20Other%20Income) The Group's other income primarily comprises interest income and other miscellaneous income, totaling RMB 93 thousand for the six months ended June 30, 2025, a decrease from the prior year Other Income (For the six months ended June 30) | Category | 2025 (thousand RMB) | 2024 (thousand RMB) | | :--- | :--- | :--- | | Interest Income | 59 | 78 | | Others | 34 | 146 | | **Total** | **93** | **224** | - Total other income decreased from **RMB 224 thousand** in the same period of 2024 to **RMB 93 thousand** in 2025[20](index=20&type=chunk) [4. Income Tax Expense](index=10&type=section&id=4.%20Income%20Tax%20Expense) The Group's Chinese subsidiaries are subject to varying corporate income tax rates, with Hangzhou Xinli Technology Co., Ltd. enjoying a 15% preferential rate as a high-tech enterprise, while others are at 25%; no taxable profit was generated in the current or prior period, resulting in no income tax expense - Hangzhou Xinli Technology Co., Ltd., as a high-tech enterprise, enjoys a **15%** preferential corporate income tax rate, extended until 2025[21](index=21&type=chunk) - Hangzhou Xinli Software Co., Ltd. and Xinyintong Technology Co., Ltd. are subject to an applicable tax rate of **25%**[21](index=21&type=chunk) - For the six months ended June 30, 2025, and 2024, the Group generated no taxable profit in China or Hong Kong, thus no income tax expense was provided[21](index=21&type=chunk) [5. Loss Per Share](index=11&type=section&id=5.%20Loss%20Per%20Share) Basic and diluted loss per share for the period was RMB 0.58 cents, narrowing from RMB 0.79 cents in the prior year, primarily due to a reduction in loss attributable to owners of the Company Loss Per Share Calculation (For the six months ended June 30) | Indicator | 2025 (thousand RMB/thousand shares) | 2024 (thousand RMB/thousand shares) | | :--- | :--- | :--- | | Loss Attributable to Owners of the Company for the Period | (7,655) | (10,426) | | Number of Ordinary Shares | 1,317,240 | 1,317,240 | | Basic/Diluted Loss Per Share (RMB cents) | (0.58) | (0.79) | - The calculation of diluted loss per share did not assume the exercise of outstanding share options, as their exercise price was higher than the average market price[22](index=22&type=chunk) [6. Dividends](index=11&type=section&id=6.%20Dividends) The Board of Directors does not recommend the payment of any dividend for the six months ended June 30, 2025 - The Board of Directors does not recommend the payment of any dividend for the six months ended June 30, 2025 (2024: nil)[23](index=23&type=chunk) [7. Trade and Other Receivables](index=12&type=section&id=7.%20Trade%20and%20Other%20Receivables) As of June 30, 2025, the Group's trade and other receivables totaled RMB 29,538 thousand, an increase from December 31, 2024; trade receivables overdue by 90 days or more amounted to RMB 2,678 thousand, but are still considered fully recoverable due to debtors' good financial standing Trade and Other Receivables (As of June 30, 2025) | Category | June 30, 2025 (thousand RMB) | December 31, 2024 (thousand RMB) | | :--- | :--- | :--- | | Trade Receivables (net of allowance for credit losses) | 17,816 | 14,925 | | Other Receivables, Prepayments and Deposits | 11,722 | 6,386 | | **Total** | **29,538** | **21,311** | Ageing Analysis of Trade Receivables (net of allowance for credit losses) | Ageing | June 30, 2025 (thousand RMB) | December 31, 2024 (thousand RMB) | | :--- | :--- | :--- | | 0 to 120 days | 12,471 | 12,294 | | 121 to 180 days | 1,348 | 103 | | 181 to 365 days | 2,666 | 1,280 | | Over 365 days | 1,331 | 1,248 | | **Total** | **17,816** | **14,925** | - The general credit period ranges from **90 to 180 days** after delivery or service provision[24](index=24&type=chunk) - As of June 30, 2025, trade receivables overdue by **90 days or more** amounted to **RMB 2,678 thousand**, but are not considered in default due to the debtors' sound financial position[25](index=25&type=chunk) [8. Contract Assets](index=13&type=section&id=8.%20Contract%20Assets) Contract assets primarily represent the Group's right to consideration for completed but unbilled work, typically retention money, which is reclassified to trade receivables after the warranty period Contract Assets (As of June 30, 2025) | Category | June 30, 2025 (thousand RMB) | December 31, 2024 (thousand RMB) | | :--- | :--- | :--- | | Retention Money Receivable | 401 | 488 | - Contract assets primarily represent the right to consideration for completed but unbilled work, typically retention money[26](index=26&type=chunk) - The warranty period ranges from **one to two years**, representing **5% to 10%** of the contract value, and contract assets are reclassified to trade receivables upon the end of the warranty period[26](index=26&type=chunk) [9. Trade and Other Payables](index=13&type=section&id=9.%20Trade%20and%20Other%20Payables) As of June 30, 2025, the Group's trade and other payables totaled RMB 7,214 thousand, a decrease from December 31, 2024, mainly due to reduced staff salaries payable and other domestic taxes payable Trade and Other Payables (As of June 30, 2025) | Category | June 30, 2025 (thousand RMB) | December 31, 2024 (thousand RMB) | | :--- | :--- | :--- | | Trade Payables | 1,691 | 1,406 | | Staff Salaries Payable | 3,090 | 4,279 | | Other Domestic Taxes Payable | 369 | 727 | | Employee Reimbursements Payable | 193 | 757 | | Accrued Expenses | 613 | 610 | | Contract Liabilities | 324 | 430 | | Professional Service Fees Payable | – | 441 | | Others | 934 | 737 | | **Total** | **7,214** | **9,387** | Ageing Analysis of Trade Payables (As of reporting date) | Ageing | June 30, 2025 (thousand RMB) | December 31, 2024 (thousand RMB) | | :--- | :--- | :--- | | Within 90 days | 1,203 | 87 | | 91 to 180 days | 378 | 814 | | 181 to 365 days | 10 | 160 | | Over 365 days | 100 | 345 | | **Total** | **1,691** | **1,406** | - The credit period for goods purchased ranges from **120 to 180 days**[28](index=28&type=chunk) [10. Borrowings](index=14&type=section&id=10.%20Borrowings) The Group's total borrowings amounted to RMB 28,899 thousand, primarily comprising unsecured related party loans and unsecured bank loans, with related party loans mainly from Mr. Xiong Rongli, mostly long-term, at effective interest rates between 3.69% and 4.14% Total Borrowings (As of June 30, 2025) | Category | June 30, 2025 (thousand RMB) | December 31, 2024 (thousand RMB) | | :--- | :--- | :--- | | Fixed-rate borrowings: | | | | Unsecured Related Party Borrowings | 27,899 | 28,291 | | Unsecured Bank Borrowings | 1,000 | 1,000 | | **Total** | **28,899** | **29,291** | Borrowings Repayment Schedule Analysis | Repayment Period | June 30, 2025 (thousand RMB) | December 31, 2024 (thousand RMB) | | :--- | :--- | :--- | | Within one year | 1,000 | 1,000 | | Over two years but not exceeding five years | 27,899 | 1,197 | | Over five years | – | 27,094 | | **Total** | **28,899** | **29,291** | - Related party borrowings are primarily provided by Mr. Xiong Rongli, with effective interest rates ranging from **3.69% – 4.14%**[29](index=29&type=chunk) - Bank borrowings have an effective interest rate of **3.95%**, utilizing a secured bank credit facility of **RMB 1,000,000**[31](index=31&type=chunk)[32](index=32&type=chunk) [11. Share Capital](index=16&type=section&id=11.%20Share%20Capital) The Company's authorized share capital is 10,000,000 thousand shares, with 1,317,240 thousand issued and fully paid shares, each with a par value of HKD 0.01, equivalent to RMB 12,538 thousand Share Capital Structure (As of June 30, 2025) | Category | Number of Shares (thousand shares) | Amount (thousand HKD) | Amount (thousand RMB) | | :--- | :--- | :--- | :--- | | Authorized Share Capital | 10,000,000 | 100,000 | 95,187 | | Issued and Fully Paid Share Capital | 1,317,240 | 13,173 | 12,538 | - Ordinary shares have a par value of **HKD 0.01** each, and both authorized and issued share capital remained unchanged during the reporting period[33](index=33&type=chunk) [Management Discussion and Analysis](index=17&type=section&id=Management%20Discussion%20and%20Analysis) [Financial Review and Performance](index=17&type=section&id=Financial%20Review%20and%20Performance) The Group's sales revenue decreased by 27.2% year-on-year in H1 2025, mainly due to reduced technical support services; despite increased distribution and selling expenses, loss for the period narrowed by 26.6% due to lower staff costs and impairment loss reversals - Sales revenue was approximately **RMB 18,201,000**, a **27.2%** decrease year-on-year, primarily due to a decline in technical support service income[34](index=34&type=chunk) - Cost of sales was approximately **RMB 16,241,000**, a **30.9%** decrease year-on-year, mainly due to lower staff costs[34](index=34&type=chunk) - Administrative expenses decreased by **11.2%** to **RMB 5,774,000**, primarily due to lower staff salaries and welfare expenses[34](index=34&type=chunk) - Distribution and selling expenses increased by **13.4%** to **RMB 3,027,000**, mainly due to higher staff expenses and business development costs[34](index=34&type=chunk) - Loss for the period was approximately **RMB 7,655,000**, a **26.6%** decrease year-on-year, mainly attributable to reversal of impairment losses, increased exchange gains, and reduced administrative expenses[35](index=35&type=chunk) [Overall Business Performance](index=18&type=section&id=Overall%20Business%20Performance) In H1 2025, the FinTech and services industry faced a complex economic environment and intense competition, leading to reduced capital expenditure from financial clients; the Group responded with product innovation, client expansion, and cost-efficiency measures, making progress in payment scenario integration and cooperation with state-owned banks - The FinTech and services industry remained under pressure in H1 2025, affected by global inflation, geopolitical conflicts, and insufficient domestic consumer confidence, leading to reduced capital expenditure from financial clients[36](index=36&type=chunk) - The Group actively addressed challenges by exploring product innovation, client expansion, and business model optimization, while also initiating cost reduction and efficiency improvement measures[36](index=36&type=chunk) - In payment scenario integration, the Group upgraded the "One-Code Pass" ecosystem for commercial districts, "Face-Scan + Contactless Payment" systems for smart catering and scenic areas, and implemented full-chain management and payment solutions for the elderly care and pet industries[36](index=36&type=chunk) - Regarding client expansion, the Group broadened its cooperation with the five major state-owned banks and added **2 city commercial banks** and **3 rural commercial banks** as partners[37](index=37&type=chunk) - In H1, **18 operational projects** were launched in provinces including Hebei, Hubei, Anhui, Guangxi, Guangdong, Ningxia, and Jiangsu, with further progress expected in H2 to generate sustained revenue[37](index=37&type=chunk) [Future Outlook](index=19&type=section&id=Future%20Outlook) The Group anticipates industry demand to gradually recover, driven by national digital economy policies and technological upgrades; H2 will focus on new product R&D, business expansion, client development, and scenario implementation, while maintaining strict cost control and risk prevention - National digital economy development priorities are expected to drive industry demand recovery, leading to a period of sustainable development[38](index=38&type=chunk) - Adhering to the core value of "Seeking Profit from Innovation," the Group's H2 focus will be on new product R&D, new business expansion, new client development, and new scenario implementation[38](index=38&type=chunk) - The Group will continue to strictly control costs and strengthen overall and business-line specific risk monitoring and prevention[38](index=38&type=chunk) [Liquidity, Financial Resources, and Gearing Ratio](index=19&type=section&id=Liquidity%2C%20Financial%20Resources%2C%20and%20Gearing%20Ratio) The Group's liquidity primarily stems from operating cash income and borrowings; as of June 30, 2025, cash and cash equivalents decreased, but the current ratio remained stable, while the gearing ratio increased, and prepayments to employees significantly rose - The Group's working capital sources are cash income from business operations and borrowings, with sufficient funds to meet working capital needs[39](index=39&type=chunk) - As of June 30, 2025, cash and cash equivalents were approximately **RMB 10,170,000**, a decrease from **RMB 28,528,000** as of December 31, 2024[39](index=39&type=chunk) - The current ratio (total current assets divided by total current liabilities) was approximately **4.2 times**, consistent with December 31, 2024[39](index=39&type=chunk) Outstanding Borrowings (As of June 30, 2025) | Category | June 30, 2025 (thousand RMB) | December 31, 2024 (thousand RMB) | | :--- | :--- | :--- | | Fixed-rate borrowings: | | | | Unsecured Related Party Borrowings | 27,899 | 28,291 | | Unsecured Bank Borrowings | 1,000 | 1,000 | | **Total** | **28,899** | **29,291** | - The gearing ratio (total liabilities divided by total assets) was approximately **76.1%**, an increase from **67.5%** as of December 31, 2024[42](index=42&type=chunk) - Prepayments to employees were approximately **RMB 8,054,000**, a significant increase from **RMB 2,252,000** as of December 31, 2024, primarily for business-related expenses[42](index=42&type=chunk) [Other Information](index=20&type=section&id=Other%20Information) [Acquisitions and Disposals of Subsidiaries and Associates](index=20&type=section&id=Acquisitions%20and%20Disposals%20of%20Subsidiaries%20and%20Associates) The Group did not undertake any significant acquisitions or disposals of subsidiaries or associates during the reporting period - The Group did not undertake any significant acquisitions or disposals of subsidiaries or associates during the reporting period[43](index=43&type=chunk) [Employee Information](index=21&type=section&id=Employee%20Information) As of June 30, 2025, the Group's employee count decreased to 401, with a corresponding reduction in staff costs; the Group operates a share option scheme to incentivize employees - As of June 30, 2025, the Group employed **401 staff**, a decrease from **649** in the same period of 2024[44](index=44&type=chunk) - Staff costs for the reporting period were approximately **RMB 20,026,000**, a decrease from **RMB 28,835,000** in the same period of 2024[44](index=44&type=chunk) - The Group has adopted a share option scheme, under which certain employees were granted share options[45](index=45&type=chunk) [Pledged Assets](index=21&type=section&id=Pledged%20Assets) As of June 30, 2025, the Group's self-owned property in Hangzhou, with a net book value of approximately RMB 7,368,000, was pledged for bank financing - The Group's self-owned property in Hangzhou, with a total net book value of approximately **RMB 7,368,000**, was pledged for bank financing[46](index=46&type=chunk) [Details of Future Plans for Material Investments or Capital Asset Acquisitions](index=21&type=section&id=Details%20of%20Future%20Plans%20for%20Material%20Investments%20or%20Capital%20Asset%20Acquisitions) Details of the Group's future plans for material investments or capital asset acquisitions are outlined in the Company's prospectus dated August 30, 2001 - Details of future plans for material investments or capital asset acquisitions are listed in the Company's prospectus dated August 30, 2001[47](index=47&type=chunk) [Exchange Rate Risk](index=21&type=section&id=Exchange%20Rate%20Risk) The vast majority of the Group's revenue-generating business is transacted in RMB, leading the Directors to consider foreign exchange risk to be very low - The vast majority of the Group's revenue-generating business is transacted in RMB, and the Directors consider foreign exchange risk to be very low[48](index=48&type=chunk) [Contingent Liabilities](index=21&type=section&id=Contingent%20Liabilities) As of June 30, 2025, the Group had no contingent liabilities - As of June 30, 2025, the Group had no contingent liabilities[49](index=49&type=chunk) [New Product Prospects](index=21&type=section&id=New%20Product%20Prospects) Discussion regarding new product prospects can be found in the business review section of the Management Discussion and Analysis - Discussion regarding new product prospects can be found in the business review section of the Management Discussion and Analysis[50](index=50&type=chunk) [Shareholding Structure and Directors' Interests](index=22&type=section&id=Shareholding%20Structure%20and%20Directors'%20Interests) [Major Shareholders' Interests](index=22&type=section&id=Major%20Shareholders'%20Interests) As of June 30, 2025, Goldcorp Industrial Limited and its associates (including Mr. Xiong Rongli and Ms. Li Qiling) are the Company's major shareholders, holding over 10% of shares; Ms. Yao Bin and Ms. Zhou Cuilian are also deemed to have significant interests due to spousal relationships Major Shareholders' Interests in the Company's Ordinary Shares (As of June 30, 2025) | Shareholder Name | Capacity/Nature of Interest | Number of Shares Held (Long Position) | Percentage of Share Capital Held | | :--- | :--- | :--- | :--- | | Goldcorp Industrial Limited | Beneficial Owner | 136,307,500 | 10.35% | | Great Song Enterprises Limited | Interest of Controlled Corporation | 136,307,500 | 10.35% | | Mr. Xiong Rongli | Interest of Controlled Corporation | 136,307,500 | 10.35% | | Mr. Xiong Rongli | Beneficial Owner | 38,532,500 | 2.92% | | Ms. Li Qiling | Interest of Controlled Corporation | 136,307,500 | 10.35% | | Ms. Yao Bin | Spouse's Interest | 174,840,000 | 13.27% | | Mr. Lin Xuexin | Beneficial Owner | 118,560,000 | 9.00% | | Ms. Zhou Cuilian | Spouse's Interest | 120,003,382 | 9.11% | | Mr. Li Dong | Beneficial Owner | 65,860,000 | 5.00% | | Ms. Lei Ying | Spouse's Interest | 69,409,300 | 5.27% | - Goldcorp Industrial Limited is jointly held by Mr. Xiong Rongli and Great Song Enterprises Limited, with Great Song Enterprises Limited wholly owned by Ms. Li Qiling[53](index=53&type=chunk) - Ms. Yao Bin is the wife of Mr. Xiong Rongli and is deemed to have an interest in Mr. Xiong Rongli's interests under the Securities and Futures Ordinance[53](index=53&type=chunk) [Directors' and Chief Executive's Interests](index=24&type=section&id=Directors'%20and%20Chief%20Executive's%20Interests) As of June 30, 2025, several directors held interests in the Company's ordinary shares and share options; the Company has a share option scheme with updated authorization limits, and while no options were granted or exercised this period, some have lapsed Directors' Interests in the Company's Securities (As of June 30, 2025) | Director Name | Capacity/Nature of Interest | Ordinary Share Interests | Interests in Underlying Shares of Share Options | Total Interests | Percentage of Total Interests | | :--- | :--- | :--- | :--- | :--- | :--- | | Mr. Lin Xuexin | Beneficial Owner | 118,560,000 | 1,443,382 | 120,003,382 | 9.11% | | Mr. Li Dong | Beneficial Owner | 65,860,000 | 3,549,300 | 69,409,300 | 5.27% | | Mr. Xiong Ying | Beneficial Owner | 14,547,500 | 1,567,608 | 16,115,108 | 1.22% | | Mr. Pu Bingrong | Beneficial Owner | – | 307,606 | 307,606 | 0.02% | - The Company's share option scheme was adopted on **August 27, 2001**, and replaced by a new scheme upon its expiry on August 27, 2011, primarily to reward directors and eligible employees[55](index=55&type=chunk) - The share option scheme's authorization limit has been updated multiple times, most recently on **June 30, 2025**, allowing subscription for a total of **131,724,000 shares**, representing approximately **10%** of the issued share capital[56](index=56&type=chunk) - No share options were granted or exercised during the six months ended June 30, 2025[62](index=62&type=chunk) Changes in Outstanding Share Options (As of June 30, 2025) | Director Name | Exercise Period | Adjusted Exercise Price (HKD) | Number of Outstanding Share Options as of Jan 1, 2025 | Number of Share Options Lapsed During Period | Number of Outstanding Share Options as of June 30, 2025 | | :--- | :--- | :--- | :--- | :--- | :--- | | Xiong Ying | 2015/5/15-2025/5/14 | 0.3635 | 2,247,890 | (2,247,890) | – | | Lin Xuexin | 2015/5/15-2025/5/14 | 0.3635 | 3,549,300 | (3,549,300) | – | | Li Dong | 2015/5/15-2025/5/14 | 0.3635 | 1,774,650 | (1,774,650) | – | | Continuing Contract Employees (excluding Directors) | 2015/5/15-2025/5/14 | 0.3635 | 6,861,980 | (6,681,980) | – | | Xiong Ying | 2017/4/7-2027/4/6 | 0.1538 | 1,567,608 | – | 1,567,608 | | Lin Xuexin | 2017/4/7-2027/4/6 | 0.1538 | 1,443,382 | – | 1,443,382 | | Li Dong | 2017/4/7-2027/4/6 | 0.1538 | 3,549,300 | – | 3,549,300 | | Pu Bingrong | 2017/4/7-2027/4/6 | 0.1538 | 307,606 | – | 307,606 | | Continuing Contract Employees (excluding Directors) | 2017/4/7-2027/4/6 | 0.1538 | 9,109,870 | – | 9,109,870 | | Consultants | 2017/4/7-2027/4/6 | 0.1538 | 32,422,855 | – | 32,422,855 | | **Total** | | | **62,834,441** | **(14,433,820)** | **48,400,621** | [Corporate Governance and Other Information](index=29&type=section&id=Corporate%20Governance%20and%20Other%20Information) [Dealings in Listed Securities](index=29&type=section&id=Dealings%20in%20Listed%20Securities) Neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the reporting period - During the reporting period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[64](index=64&type=chunk) [Competition and Conflicts of Interest](index=29&type=section&id=Competition%20and%20Conflicts%20of%20Interest) For the six months ended June 30, 2025, no directors, management shareholders, major shareholders, or their associates engaged in any business competing with or potentially conflicting with the Group's business - No directors, management shareholders, major shareholders, or any of their respective associates engaged in any business competing or likely to compete with the Group's business or had any other conflicts of interest with the Group[65](index=65&type=chunk) [Corporate Governance Practices](index=29&type=section&id=Corporate%20Governance%20Practices) As of the announcement date, the Company has complied with the applicable code provisions of the Corporate Governance Code in Appendix C1 of the GEM Listing Rules, except for the CEO position being vacant since November 1, 2022, which constitutes a deviation - The Company has complied with the applicable code provisions of the Corporate Governance Code set out in Appendix C1 of the GEM Listing Rules[66](index=66&type=chunk) - The Chief Executive Officer position has been vacant since Mr. Lin Xuexin's resignation on **November 1, 2022**, constituting a deviation from code provision C.2.1[66](index=66&type=chunk) [Directors' Securities Transactions](index=29&type=section&id=Directors'%20Securities%20Transactions) For the six months ended June 30, 2025, the Company complied with GEM Listing Rules regarding directors' securities transactions, with no breaches of the code of conduct identified - The Company has complied with Rules 5.48 to 5.67 of the GEM Listing Rules regarding directors' securities transactions[67](index=67&type=chunk) - The Company is not aware of any non-compliance with the required procedures for directors' securities transactions, nor any breaches of the code of conduct[67](index=67&type=chunk) [Remuneration Committee](index=29&type=section&id=Remuneration%20Committee) The Company's Remuneration Committee, established in November 2005, is responsible for reviewing and recommending remuneration policies for directors and senior management, chaired by Mr. Chen Zengwu - The Remuneration Committee was established in **November 2005**, with its primary function to review and make recommendations on the remuneration policy for directors and senior management[68](index=68&type=chunk) - The Remuneration Committee is chaired by Mr. Chen Zengwu, with other members including Mr. Lin Xuexin, Mr. Pu Bingrong, and Ms. Chen Xin'ai[68](index=68&type=chunk) [Nomination Committee](index=30&type=section&id=Nomination%20Committee) The Company's Nomination Committee, established in March 2012, is responsible for formulating nomination policies, recommending director nominations, appointments, and board succession arrangements, and developing and reviewing the Board Diversity Policy, chaired by Mr. Lin Xuexin - The Nomination Committee was established in **March 2012**, with its primary functions to formulate nomination policies, make recommendations on the nomination and appointment of directors and board succession arrangements, and develop and review the "Board Diversity Policy"[69](index=69&type=chunk) - The Nomination Committee is chaired by Mr. Lin Xuexin, with other members including Mr. Pu Bingrong, Mr. Chen Zengwu, and Ms. Chen Xin'ai[69](index=69&type=chunk) [Audit and Risk Management Committee](index=30&type=section&id=Audit%20and%20Risk%20Management%20Committee) The Company's Audit and Risk Management Committee, established in August 2001, reviews and oversees the Group's financial reporting, internal control, and risk management systems; the committee has reviewed the unaudited results for the period and found them compliant with applicable accounting standards - The Audit and Risk Management Committee was established on **August 27, 2001**, with its primary functions to review and oversee the Group's financial reporting process, internal control system, and risk management system[70](index=70&type=chunk) - The Committee is chaired by Mr. Chen Zengwu, with other members including Mr. Pu Bingrong and Ms. Chen Xin'ai, all of whom are independent non-executive directors[70](index=70&type=chunk) - The Committee has reviewed the Group's unaudited results for the six months ended June 30, 2025, and believes they are prepared in accordance with applicable accounting standards and requirements and are adequately disclosed[70](index=70&type=chunk) [Board Members](index=30&type=section&id=Board%20Members) The Company's Board of Directors comprises executive directors including Lin Xuexin, Xiong Ying, Zang Jingjing, Li Dong, Cai Jin, and independent non-executive directors such as Pu Bingrong, Chen Xin'ai, and Chen Zengwu - Board members include executive directors Lin Xuexin, Xiong Ying, Zang Jingjing, Li Dong, Cai Jin[71](index=71&type=chunk) - Board members include independent non-executive directors Pu Bingrong, Chen Xin'ai, Chen Zengwu[71](index=71&type=chunk)

[Company Information and Report Overview](index=1&type=section&id=%E5%85%AC%E5%8F%B8%E4%BF%A1%E6%81%AF%E4%B8%8E%E6%8A%A5%E5%91%8A%E6%A6%82%E8%A7%88) [Company Profile](index=1&type=section&id=%E5%85%AC%E5%8F%B8%E7%AE%80%E4%BB%8B) CStone Pharmaceuticals (Stock Code: 2616) announced its unaudited condensed consolidated interim results for the six months ended June 30, 2025 - CStone Pharmaceuticals (Stock Code: 2616) released its unaudited condensed consolidated interim results for the six months ended June 30, 2025[2](index=2&type=chunk) [Financial Highlights](index=1&type=section&id=%E8%B4%A2%E5%8A%A1%E6%91%98%E8%A6%81) For the six months ended June 30, 2025, revenue significantly decreased by 80.5% to RMB 49.4 million, leading to a RMB 270.2 million loss due to gross loss, increased R&D, and reduced administrative and marketing expenses Key Financial Indicators for H1 2025 (IFRS) | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 49.4 | 254.2 | -80.5% | | Cost of Revenue | 142.2 | 82.1 | +73.2% | | Gross Loss (Profit) | (92.8) | 172.0 | -153.9% | | R&D Expenses | 105.2 | 66.2 | +59.0% | | Administrative Expenses | 43.5 | 46.7 | -6.9% | | Selling and Marketing Expenses | 35.7 | 62.8 | -43.1% | | Loss (Profit) for the Period | (270.2) | 15.7 | -1827.4% | | Cash and Cash Equivalents and Time Deposits (Period-end) | 652.8 | 672.9 (Dec 31, 2024) | -3.0% | - Revenue significantly decreased by **80.5%**, primarily due to Pralsetinib price adjustments and related one-time channel compensation, alongside reduced one-time milestone payments from Sugemalimab gastric cancer approval in H1 2024[3](index=3&type=chunk) - Cost of revenue increased, mainly due to **inventory write-downs** included in cost of revenue and related costs from early supply of Pralsetinib for patient assistance programs[3](index=3&type=chunk) - The company switched from profit to a **loss of RMB 270.2 million** for the period, primarily due to the gross profit turning into a gross loss[5](index=5&type=chunk) [Business Overview](index=3&type=section&id=%E4%B8%9A%E5%8A%A1%E6%A6%82%E8%A7%88) [Commercial Product Overview](index=3&type=section&id=%E5%95%86%E4%B8%9A%E4%BA%A7%E5%93%81%E6%A6%82%E8%A7%88) Commercial products are advancing globally with regulatory approvals and strategic partnerships, expanding international reach to over 60 countries, while localized production and national medical insurance inclusion are set to enhance profitability - Sugemalimab (Cejemly®) has submitted a **new indication application for Phase III NSCLC** to the EMA after receiving approval in the EU and UK for IV NSCLC[7](index=7&type=chunk) - Sugemalimab has expanded its international presence to **over 60 countries** through strategic collaborations with SteinCares and Gentili[8](index=8&type=chunk) - Pralsetinib (Gavreto®) received approval for **localized production**, with a gradual transition to domestic manufacturing expected from 2026 to improve cost-effectiveness and supply chain resilience[9](index=9&type=chunk) - Pralsetinib has passed the formal review for the **2025 National Medical Insurance Drug List negotiation**[10](index=10&type=chunk) - Avapritinib (Ayvakit®) commenced **domestic supply in February 2025**, expected to drive gross margin growth[11](index=11&type=chunk) [Clinical Stage Core Assets Overview](index=4&type=section&id=%E4%B8%B4%E5%BA%8A%E9%98%B6%E6%AE%B5%E6%A0%B8%E5%BF%83%E8%B5%84%E4%BA%A7%E6%A6%82%E8%A7%88) Core clinical assets CS5001 and CS2009 show promising trial progress with good tolerability and anti-tumor activity, while Nofazinlimab demonstrates clinical benefit trends in OS, prompting registration pathway discussions - CS5001 global multi-center Phase Ib trial is actively recruiting patients in Australia, China, and the US, with **no dose-limiting toxicity (DLT) observed** to date[12](index=12&type=chunk) - CS2009 global multi-center Phase I/II clinical study is actively recruiting patients in Australia and China, with plans to **expand to the US for Phase II enrollment**[13](index=13&type=chunk) - CS2009 Phase Ia data demonstrated **good tolerability, excellent PK characteristics, and anti-tumor activity**, with Phase Ia data to be presented at the ESMO Congress in October 2025[14](index=14&type=chunk) - Final analysis of Nofazinlimab combined with Lenvatinib in a Phase III study showed a clear trend of **clinical benefit in OS**, and the company will engage with regulatory authorities to seek a registration pathway[15](index=15&type=chunk) [Pre-clinical/IND Stage Projects and Proprietary ADC Platform Overview](index=5&type=section&id=%E4%B8%B4%E5%BA%8A%E5%89%8D%2FIND%E9%98%B6%E6%AE%B5%E9%A1%B9%E7%9B%AE%E4%B8%8E%E4%B8%93%E6%9C%89ADC%E5%B9%B3%E5%8F%B0%E6%A6%82%E8%A7%88) The pre-clinical pipeline includes over nine potential FIC/BIC candidates, leveraging an innovative proprietary ADC platform, with two autoimmune/inflammatory candidates expected to initiate IND preparation in H2 2025 - The pre-clinical pipeline includes **over nine potential candidates**, such as multi-specific antibodies and ADCs, covering oncology, autoimmune, and inflammatory diseases[16](index=16&type=chunk) - The innovative in-house ADC technology platform features **optimized proprietary linkers**, supporting multiple ADC products in Pipeline 2.0[16](index=16&type=chunk) - Two autoimmune/inflammatory candidates, CS2013 and CS2015, possess **FIC/BIC potential** and are expected to initiate IND preparation in H2 2025[17](index=17&type=chunk) [Future Outlook and Vision](index=6&type=section&id=%E6%9C%AA%E6%9D%A5%E5%B1%95%E6%9C%9B%E4%B8%8E%E6%84%BF%E6%99%AF) The company is committed to delivering revolutionary therapies through scientific and technological innovation, focusing on advancing early-stage candidates, core clinical trials, maximizing commercial product value, and strengthening proprietary technology platforms in H2 2025 - The company's mission is to provide **revolutionary therapies** through scientific and technological innovation, benefiting patients worldwide[18](index=18&type=chunk) - Key drivers for H2 2025 include advancing early-stage candidates to clinical phases, progressing key CS5001 and CS2009 trials, maximizing the value of Ayvakit® and Gavreto®, accelerating Sugemalimab commercialization outside China, strengthening proprietary platforms, and publishing key clinical data[18](index=18&type=chunk)[20](index=20&type=chunk) [Management Discussion and Analysis](index=7&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%82%E8%AE%A8%E8%AE%BA%E4%B8%8E%E5%88%86%E6%9E%90) [Company Vision and Overview](index=7&type=section&id=%E5%85%AC%E5%8F%B8%E6%84%BF%E6%99%AF%E4%B8%8E%E6%A6%82%E8%A7%88) CStone Pharmaceuticals aims to be an innovation leader in improving global patient health, with four successfully launched innovative drugs, 16 NDA approvals, and a balanced pipeline of 16 potential FIC/BIC candidates - The company's vision is to be an innovation-driven leader in **improving global patient health**[21](index=21&type=chunk) - **Four innovative drugs** have been successfully launched, with **16 New Drug Application (NDA) approvals** covering nine indications[22](index=22&type=chunk) - The current R&D pipeline is balanced with **16 candidate drugs**, including potential first-in-class or best-in-class ADCs, multi-specific antibodies, immunotherapies, and precision therapies[22](index=22&type=chunk) [Product Pipeline Details](index=7&type=section&id=%E4%BA%A7%E5%93%81%E7%AE%A1%E7%BA%BF%E8%AF%A6%E6%83%85) The company provides updates on its commercial products, core clinical assets, and pre-clinical/IND candidates, highlighting regulatory approvals, commercial collaborations, clinical trial data, and technological platform innovations - The product pipeline chart illustrates the milestones and development status of selected assets as of the reporting date, covering regions including Mainland China, Taiwan, Hong Kong, the US, EU, and UK[23](index=23&type=chunk)[24](index=24&type=chunk)[26](index=26&type=chunk) [Commercialized Products](index=9&type=section&id=%E5%B7%B2%E4%B8%8A%E5%B8%82%E5%95%86%E4%B8%9A%E4%BA%A7%E5%93%81) The company enhances commercialization efficiency through partnerships, expanding Sugemalimab's global market to over 60 countries, while Pralsetinib and Avapritinib advance through collaborations, localized production, and medical insurance inclusion - Collaborations with pharmaceutical and biotechnology companies are fundamental to the company's recent commercial plans and global vision, aiming to **enhance commercialization efficiency** and strategically focus on R&D[27](index=27&type=chunk) [Cejemly® (Sugemalimab)](index=9&type=section&id=%E6%8B%A9%E6%8D%B7%E7%BE%8E%C2%AE%EF%BC%88%E8%88%92%E6%A0%BC%E5%88%A9%E5%8D%95%E6%8A%97%EF%BC%89) Sugemalimab, a fully human anti-PD-L1 monoclonal antibody, has received multiple approvals in China, the EU, and the UK for various indications, with an EMA application for Phase III NSCLC, and its global market reach has expanded to over 60 countries through strategic partnerships - Sugemalimab has been approved in China, the EU, and the UK for **five indications**, including IV NSCLC, III NSCLC, NK/T-cell lymphoma, ESCC, and G/GEJ[28](index=28&type=chunk) - A **new indication application for Phase III NSCLC** has been submitted to the EMA, which, if approved, will solidify its position as a core immunotherapy for lung cancer[29](index=29&type=chunk) - Strategic agreements with SteinCares and Gentili have expanded Sugemalimab's global market coverage to **over 60 countries and regions**, with the Gentili agreement potentially reaching up to **USD 192.5 million** in total consideration[29](index=29&type=chunk) - Sugemalimab is recommended by ESMO guidelines as a **Class [I, A] combination therapy** for first-line treatment of non-driver gene positive metastatic squamous and non-squamous NSCLC[29](index=29&type=chunk) - Final analysis results of PFS and OS from the GEMSTONE-303 and GEMSTONE-302 studies were published in **JAMA** and **The Lancet Oncology**, respectively[29](index=29&type=chunk) [Gavreto® (Pralsetinib)](index=11&type=section&id=%E6%99%AE%E5%90%89%E8%8F%AF%C2%AE%EF%BC%88%E6%99%AE%E6%8B%89%E6%9B%BF%E5%B0%BC%EF%BC%89) Pralsetinib, China's first-in-class RET inhibitor, has received NMPA approval for RET fusion-positive NSCLC and RET-mutant thyroid cancer, with localized production approved and formal review passed for the 2025 National Medical Insurance Drug List negotiation - Pralsetinib has been approved by China's NMPA for patients with **RET fusion-positive NSCLC** and **RET-mutant thyroid cancer**[32](index=32&type=chunk) - A commercial collaboration with Allist Pharmaceuticals allows Pralsetinib to benefit from **Allist's mature commercial team and market coverage**[32](index=32&type=chunk) - In July 2025, the localized marketing application for Pralsetinib capsules was approved by China's NMPA, with a gradual transition to **domestic production expected from 2026**[32](index=32&type=chunk) - In August 2025, Pralsetinib passed the formal review for the **2025 National Medical Insurance Drug List negotiation**[32](index=32&type=chunk) - Pralsetinib has been included in **11 Chinese clinical practice guidelines** and upgraded to a Class I recommendation in the CSCO NSCLC Treatment Guidelines (2024 edition)[32](index=32&type=chunk) [Ayvakit® (Avapritinib)](index=11&type=section&id=%E6%B3%B0%E5%90%89%E8%8F%AF%C2%AE%EF%BC%88%E9%98%BF%E4%BC%90%E6%9B%BF%E5%B0%BC%EF%BC%89) Avapritinib, a first-in-class KIT/PDGFRA inhibitor, has received NMPA approval for PDGFRA exon 18 mutant GIST, with domestic supply commencing in February 2025 through a collaboration with Hengrui Medicine, expected to significantly boost gross margins and included in China's 2023 National Medical Insurance Drug List - Avapritinib has been approved by China's NMPA for adult patients with unresectable or metastatic GIST carrying **PDGFRA exon 18 mutations** (including PDGFRA D842V mutation)[31](index=31&type=chunk) - A commercial collaboration with Hengrui Medicine, with its localized production application approved in August 2024, led to **domestic supply starting in February 2025**, expected to significantly boost gross margins[35](index=35&type=chunk) - Avapritinib has been included in China's **2023 National Medical Insurance Drug List** and passed the formal review for renewal negotiation in the 2025 National Medical Insurance Drug List[35](index=35&type=chunk) - Avapritinib is recommended by the updated **CSCO Guidelines for Gastrointestinal Stromal Tumors (2022 edition)** and the Chinese Guidelines for Diagnosis and Treatment of Adult Systemic Mastocytosis (2022 edition)[35](index=35&type=chunk) [Clinical Stage Core Products](index=12&type=section&id=%E4%B8%B4%E5%BA%8A%E9%98%B6%E6%AE%B5%E6%A0%B8%E5%BF%83%E4%BA%A7%E5%93%81) The core clinical pipeline, including CS5001 and CS2009, shows significant progress with promising efficacy and safety, while CS1002 advances through strategic collaboration, and Nofazinlimab demonstrates clinical benefit trends in OS, prompting registration pathway discussions - As of the reporting date, the company's product pipeline has achieved **significant progress**[33](index=33&type=chunk) [CS5001 (ROR1 ADC)](index=12&type=section&id=CS5001%20(ROR1%20ADC)) CS5001, a clinical-stage ROR1 ADC with a tumor-specific activated PBD dimer prodrug payload and linker, is advancing in global multi-center Ia/Ib trials in the US, Australia, and China, exploring monotherapy for advanced lymphoma and combination therapies for DLBCL and solid tumors - CS5001 is a clinical-stage ROR1-targeted ADC, utilizing a **dual-control mechanism to reduce toxicity** and offering precision treatment potential[34](index=34&type=chunk) - Global multi-center Phase Ia/Ib clinical trials are simultaneously progressing in the US, Australia, and China, exploring its potential as a **monotherapy for advanced lymphoma** and in combination therapies for DLBCL and solid tumors[37](index=37&type=chunk) - CS5001 is the **first ROR1 ADC to demonstrate clinical anti-tumor activity** in both solid tumors and lymphoma[34](index=34&type=chunk) [CS2009 (PD-1/VEGF/CTLA-4 Tri-specific Antibody)](index=13&type=section&id=CS2009%20(PD-1%2FVEGF%2FCTLA-4%E4%B8%89%E7%89%B9%E5%BC%82%E6%80%A7%E6%8A%97%E4%BD%93)) CS2009, a potential FIC/BIC PD-1/VEGF/CTLA-4 tri-specific antibody, is advancing in global multi-center Phase I/II studies, with Ia data showing good tolerability, excellent PK characteristics, and anti-tumor activity, slated for presentation at the ESMO Congress in October 2025 - CS2009 is a potential **first-in-class/best-in-class PD-1/VEGF/CTLA-4 tri-specific antibody**, featuring balanced monovalent PD-1 and CTLA-4 binding arms, and a bivalent anti-VEGFA binding arm[37](index=37&type=chunk) - Global multi-center Phase I/II studies are actively recruiting patients in Australia and China, with plans to **expand to the US for Phase II enrollment**[37](index=37&type=chunk) - The Phase Ia dose-escalation study has completed five dose levels, with **no DLT observed**, demonstrating good tolerability, excellent PK characteristics, and anti-tumor activity[14](index=14&type=chunk)[37](index=37&type=chunk)[40](index=40&type=chunk) - Phase Ia data (including safety, PK, PD, and anti-tumor activity) are expected to be presented at the **ESMO Congress in October 2025**[40](index=40&type=chunk) [CS1002 (Anti-CTLA-4 Antibody)](index=14&type=section&id=CS1002%20(%E6%8A%97CTLA-4%E6%8A%97%E4%BD%93)) CS1002 (SHR-8068) is advancing through a strategic collaboration with Hengrui Medicine, which holds exclusive rights in Greater China for its development, registration, manufacturing, and commercialization, actively progressing two major late-stage clinical trials for advanced NSCLC and HCC, with plans for additional combination therapies in various solid tumors - An exclusive license agreement with Hengrui grants them exclusive rights for the development, registration, manufacturing, and commercialization of **CS1002/SHR-8068 in Greater China**[40](index=40&type=chunk) - Hengrui is actively advancing **two major late-stage clinical trials**: a Phase II/III trial for first-line treatment of advanced or metastatic non-squamous NSCLC, and a Phase III trial for first-line treatment of advanced HCC[40](index=40&type=chunk) - Hengrui plans several other clinical trials to evaluate CS1002/SHR-8068 combination therapies in various solid tumors, including an **IND for a Phase II CRC study** that has been accepted[40](index=40&type=chunk) [Nofazinlimab (Anti-PD-1 Antibody)](index=14&type=section&id=Nofazinlimab%20(%E6%8A%97PD-1%E6%8A%97%E4%BD%93)) The CS1003-305 study, an international multi-center Phase III registration trial evaluating nofazinlimab combined with lenvatinib for first-line unresectable or metastatic HCC, showed a clear trend of clinical benefit in OS, PFS, and ORR, with no new safety signals, prompting discussions with regulatory authorities for a registration pathway - The CS1003-305 study is an international multi-center Phase III registration study evaluating nofazinlimab combined with lenvatinib for **first-line treatment of unresectable or metastatic HCC patients**[39](index=39&type=chunk) - Final analysis results showed a clear trend of **clinical benefit in OS**, with clinically meaningful improvements in PFS and ORR, and no new safety signals observed[15](index=15&type=chunk)[41](index=41&type=chunk) - The company will engage with regulatory authorities to seek a **registration pathway** for this combination therapy[15](index=15&type=chunk)[41](index=41&type=chunk) [Pre-clinical/IND Candidate Drugs](index=15&type=section&id=%E4%B8%B4%E5%BA%8A%E5%89%8D%2FIND%E7%94%B3%E5%A0%B1%E5%80%99%E9%81%B8%E8%97%A5%E7%89%A9) The company is dedicated to pioneering next-generation cancer therapies, including multi-specific antibodies and ADCs, expanding early-stage research into autoimmune and inflammatory diseases, leveraging its proprietary ADC technology platform, and developing FIC/BIC potential autoimmune/inflammatory multi-specific antibodies CS2013 and CS2015 - The company is committed to pioneering **next-generation cancer therapies**, including multi-specific antibodies and ADCs, and has expanded early-stage research projects into autoimmune and inflammatory diseases[42](index=42&type=chunk) [Proprietary ADC Technology Platform](index=15&type=section&id=%E8%87%AA%E6%9C%89%E5%B0%88%E6%9C%89ADC%E6%8A%80%E8%A1%93%E5%B9%B3%E5%8F%B0) CStone Pharmaceuticals is advancing next-generation linker technology to enhance ADC systemic stability and tumor selectivity, featuring a unique tandem cleavable β-glucuronide linker that improves hydrophilicity, enables tumor-selective payload release via tandem cleavage, and supports multiple ADC candidates - The proprietary ADC technology platform has optimized ADC safety/efficacy profiles, broadened target compatibility, and **supports multiple ADC candidates**[43](index=43&type=chunk) - The unique tandem cleavable β-glucuronide linker features **enhanced hydrophilicity**, tumor-selective payload release via tandem cleavage, and manufacturability[44](index=44&type=chunk) [Core ADC Pipeline](index=15&type=section&id=%E6%A0%B8%E5%BF%83ADC%E7%AE%A1%E7%B7%9A) The company's core ADC pipeline includes CS5007 (EGFR/HER3 bi-specific ADC) for tumor heterogeneity, CS5005 (SSTR2 ADC) and CS5008 (SSTR2/DLL3 bi-specific ADC) for SSTR2-positive solid tumors, and CS5006 (ITGB4 ADC), a first-in-class pan-cancer ADC targeting ITGB4 for broad indications - CS5007 (EGFR/HER3 bi-specific ADC) aims to address tumor heterogeneity by simultaneously targeting EGFR and HER3, with the potential to be a **best-in-class candidate for various solid tumors**[45](index=45&type=chunk) - CS5005 (SSTR2 ADC) and CS5008 (SSTR2/DLL3 bi-specific ADC) target SSTR2-positive solid tumors like NEN and SCLC, with CS5008 overcoming tumor heterogeneity through **dual targeting**[46](index=46&type=chunk) - CS5006 (ITGB4 ADC) is a **first-in-class ADC** targeting the novel pan-cancer target ITGB4, addressing a wide range of indications[46](index=46&type=chunk) [Autoimmune and Inflammatory Multi-specific Antibodies](index=16&type=section&id=%E8%87%AA%E8%BA%AB%E5%85%8D%E7%96%AB%E8%88%87%E7%82%8E%E7%97%87%E5%A4%9A%E7%89%B9%E5%BC%82%E6%80%A7%E6%8A%97%E4%BD%93) The company is developing multi-specific antibodies for autoimmune and inflammatory diseases, including CS2013 (BAFF/APRIL bi-specific antibody) for B-cell mediated autoimmune diseases and CS2015 (OX40L/TSLP bi-specific antibody) as a potential first-in-class treatment for Th2-mediated inflammatory diseases - CS2013 (BAFF/APRIL bi-specific antibody) aims to treat various B-cell mediated autoimmune diseases like SLE, RA, and IgAN by **simultaneously blocking BAFF and APRIL**[46](index=46&type=chunk) - CS2015 (OX40L/TSLP bi-specific antibody), a potential first-in-class, potently blocks OX40L and TSLP, with the potential to treat Th2-mediated inflammatory diseases such as AD, asthma, and COPD[46](index=46&type=chunk) [Business Development and Strategic Partnerships](index=17&type=section&id=%E5%95%86%E5%8A%A1%E6%8B%93%E5%B1%95%E5%8F%8A%E6%88%98%E7%95%A5%E5%90%88%E4%BD%9C%E5%85%B3%E7%B3%BB) The business development team drives strategic growth by expanding commercialization of launched drugs, strengthening the clinical pipeline, and acquiring innovative technologies through strategic collaborations with leading companies, particularly for Sugemalimab's global commercialization - The business development team plays a crucial role in **expanding commercialization of launched drugs**, strengthening the clinical pipeline, and acquiring innovative technologies[48](index=48&type=chunk) - Strategic collaborations have been established with leading companies including Pfizer, Sanofi, Hengrui, 3SBio, Allist, Ewopharma, Pharmalink, SteinCares, and Gentili[48](index=48&type=chunk) - An exclusive commercialization agreement for Gavreto® was signed with Allist, and a **strategic commercialization partnership for Ayvakit®** was established with Hengrui[48](index=48&type=chunk) - Sugemalimab's global commercialization continues to expand through collaborations with Ewopharma, Pharmalink, SteinCares, and Gentili, covering regions such as Switzerland, Central and Eastern Europe, the Middle East, North Africa, South Africa, Latin America, Western Europe, and the UK[49](index=49&type=chunk) [Financial Performance Analysis](index=27&type=section&id=%E8%B4%A2%E5%8A%A1%E8%A1%A8%E7%8E%B0%E5%88%86%E6%9E%90) For the six months ended June 30, 2025, revenue significantly decreased by 80.5% to RMB 49.4 million, leading to a RMB 270.2 million loss due to gross loss, increased R&D expenses, and decreased administrative, selling, and marketing expenses, with adjusted loss for the period also increasing significantly [Revenue](index=27&type=section&id=%E6%94%B6%E5%85%A5) For the six months ended June 30, 2025, revenue decreased by 80.5% to RMB 49.4 million, primarily due to Pralsetinib price adjustments and reduced one-time Sugemalimab milestone payments, with authorization fee income expected in H2 2025 from the Gentili agreement Revenue Comparison | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | Change (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | 49.4 | 254.2 | -204.8 | -80.5% | - Pralsetinib sales revenue significantly decreased year-over-year, primarily due to **price adjustments** and related one-time channel compensation in preparation for National Medical Insurance Drug List negotiations[76](index=76&type=chunk) - License fee income significantly decreased year-over-year, mainly due to the substantial contribution from a **one-time milestone payment** for Sugemalimab gastric cancer approval in H1 2024[76](index=76&type=chunk) - A significant external licensing agreement was entered with Gentili in July 2025, with **license fee income expected in H2 2025**[76](index=76&type=chunk) [Cost of Revenue](index=27&type=section&id=%E6%94%B6%E5%85%A5%E6%88%90%E6%9C%AC) For the six months ended June 30, 2025, cost of revenue increased by RMB 60.1 million to RMB 142.2 million, primarily due to inventory write-downs and related costs from early supply of Pralsetinib for patient assistance programs to mitigate trade uncertainties Cost of Revenue Comparison | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | Change (RMB million) | | :--- | :--- | :--- | :--- | | Cost of Revenue | 142.2 | 82.1 | +60.1 | - The increase in cost of revenue was mainly due to **inventory write-downs** included in cost of revenue and related costs from early supply of Pralsetinib for patient assistance programs[77](index=77&type=chunk) [Other Income](index=28&type=section&id=%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5) For the six months ended June 30, 2025, other income decreased by RMB 5.5 million to RMB 9.3 million, primarily due to reduced bank and other interest income Other Income Comparison | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | Change (RMB million) | | :--- | :--- | :--- | :--- | | Other Income | 9.3 | 14.8 | -5.5 | - The decrease in other income was mainly due to **reduced bank and other interest income**[77](index=77&type=chunk) [Other Gains and Losses](index=28&type=section&id=%E5%85%B6%E4%BB%96%E6%94%B6%E7%9B%8A%E5%8F%8A%E8%99%A7%E6%8D%9F) For the six months ended June 30, 2025, other gains and losses decreased by RMB 8.3 million to RMB 4.6 million, primarily due to a net loss from fair value changes of financial assets measured at fair value through profit or loss Other Gains and Losses Comparison | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | Change (RMB million) | | :--- | :--- | :--- | :--- | | Other Gains and Losses | 4.6 | 12.9 | -8.3 | - The decrease was mainly due to a **net loss from fair value changes of financial assets** measured at fair value[77](index=77&type=chunk) [Research and Development Expenses](index=28&type=section&id=%E7%A0%94%E7%99%BC%E9%96%8B%E6%94%AF) For the six months ended June 30, 2025, R&D expenses increased by RMB 39.0 million to RMB 105.2 million, primarily due to increased milestone fees and third-party contract costs at different stages of clinical trials R&D Expenses Comparison | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | Change (RMB million) | | :--- | :--- | :--- | :--- | | R&D Expenses | 105.2 | 66.2 | +39.0 | - The increase was mainly attributable to **increased milestone fees and third-party contract costs** at different stages of clinical trials[78](index=78&type=chunk) [Administrative Expenses](index=28&type=section&id=%E8%A1%8C%E6%94%BF%E9%96%8B%E6%94%AF) For the six months ended June 30, 2025, administrative expenses decreased by RMB 3.2 million to RMB 43.5 million, primarily due to reduced depreciation and amortization Administrative Expenses Comparison | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | Change (RMB million) | | :--- | :--- | :--- | :--- | | Administrative Expenses | 43.5 | 46.7 | -3.2 | - The decrease was mainly due to **reduced depreciation and amortization**[79](index=79&type=chunk) [Selling and Marketing Expenses](index=29&type=section&id=%E9%8A%B7%E5%94%AE%E5%8F%8A%E5%B8%82%E5%A0%B4%E6%8E%A8%E5%BB%A3%E9%96%8B%E6%94%AF) For the six months ended June 30, 2025, selling and marketing expenses decreased by RMB 27.1 million to RMB 35.7 million, primarily due to reduced channel service fees and other expenses Selling and Marketing Expenses Comparison | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | Change (RMB million) | | :--- | :--- | :--- | :--- | | Selling and Marketing Expenses | 35.7 | 62.8 | -27.1 | - The decrease was mainly due to **reduced channel service fees and other expenses**[80](index=80&type=chunk) [Finance Costs](index=29&type=section&id=%E8%9E%8D%E8%B3%87%E6%88%90%E6%9C%AC) For the six months ended June 30, 2025, finance costs decreased by RMB 1.4 million to RMB 6.9 million, primarily due to reduced interest on bank borrowings Finance Costs Comparison | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | Change (RMB million) | | :--- | :--- | :--- | :--- | | Finance Costs | 6.9 | 8.3 | -1.4 | - The decrease was mainly due to **reduced interest on bank borrowings**[81](index=81&type=chunk) [Loss (Profit) for the Period and Adjusted Loss (Profit) for the Period](index=30&type=section&id=%E6%9C%9F%E5%85%A7%EF%BC%88%E8%99%A7%E6%90%8D%EF%BC%89%E6%BA%A2%E5%88%A9%E5%8F%8A%E7%B6%93%E8%AA%BF%E6%95%B4%EF%BC%88%E8%99%A7%E6%90%8D%EF%BC%89%E6%BA%A2%E5%88%A9) For the six months ended June 30, 2025, the company switched from profit to a loss of RMB 270.2 million, with the adjusted loss (excluding share-based payment expenses) for the period significantly increasing to RMB 265.1 million from a profit of RMB 10.8 million in the prior year Loss (Profit) for the Period and Adjusted Loss (Profit) for the Period Comparison | Indicator | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Loss (Profit) for the Period | (270,183) | 15,699 | | Add: Share-based payment expenses | 5,084 | (4,889) | | Adjusted Loss (Profit) for the Period | (265,099) | 10,810 | - The loss for the period was **RMB 270.2 million**, an increase in loss of **RMB 285.9 million** compared to a profit of RMB 15.7 million in H1 2024, primarily due to gross profit turning into gross loss[5](index=5&type=chunk) - After adjustment (excluding share-based payment expenses), the adjusted loss for the period was **RMB 265.1 million**, an increase in loss of **RMB 275.9 million** compared to a profit of RMB 10.8 million in H1 2024[5](index=5&type=chunk) [Employees and Remuneration Policy](index=31&type=section&id=%E5%83%B1%E5%93%A1%E5%8F%8A%E8%96%AA%E9%85%AC%E6%94%BF%E7%AD%96) As of June 30, 2025, the company had 131 employees, with R&D personnel accounting for 63.36% and sales, general, and administrative personnel for 36.64%, with remuneration including salaries, bonuses, provident funds, social insurance contributions, and other benefits in compliance with applicable Chinese laws Employee Functional Distribution (As of June 30, 2025) | Function | Number of Employees | % of Total Employees | | :--- | :--- | :--- | | R&D | 83 | 63.36 | | Sales, General and Administrative | 48 | 36.64 | | Total | 131 | 100.0 | - Employee remuneration includes salaries, bonuses, employee provident funds, social insurance contributions, and other benefit payments[87](index=87&type=chunk) [Liquidity and Financial Resources](index=31&type=section&id=%E6%B5%81%E5%8B%95%E8%B3%87%E9%87%91%E5%8F%8A%E8%B2%A1%E5%8B%99%E8%B3%87%E6%BA%90) The company maintains prudent capital management, funding operations through various sources, with cash and cash equivalents and time deposits at RMB 652.8 million as of June 30, 2025, a slight decrease due to R&D expenses, salaries, and inventory purchases, and a gearing ratio of 73.6% with no assets pledged - The company adopts a prudent capital management policy, funding operations and meeting capital needs for development through **multiple sources**[88](index=88&type=chunk) Cash and Cash Equivalents and Time Deposits | Indicator | As of June 30, 2025 (RMB million) | As of December 31, 2024 (RMB million) | Change (RMB million) | | :--- | :--- | :--- | :--- | | Cash and Cash Equivalents and Time Deposits | 652.8 | 672.9 | -20.1 | - The decrease in cash was mainly due to payments for **R&D expenses, salaries, and inventory purchases**[90](index=90&type=chunk) - As of June 30, 2025, the **gearing ratio was 73.6%** (December 31, 2024: 73.9%)[91](index=91&type=chunk) - As of June 30, 2025, the Group had **no assets pledged**[92](index=92&type=chunk) [Material Investments, Acquisitions and Disposals](index=33&type=section&id=%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B3%87%E3%80%81%E9%87%8D%E5%A4%A7%E6%94%B6%E8%B3%BC%E5%8F%8A%E5%87%BA%E5%94%AE%E4%BA%8B%E9%A0%85) As of June 30, 2025, the company held no material investments, nor were there any material acquisitions or disposals, and no specific future plans for material investments or capital assets, or significant acquisitions or disposals of subsidiaries, associates, and joint ventures - As of June 30, 2025, the company held **no material investments**, nor were there any material acquisitions or disposals[93](index=93&type=chunk) [Foreign Exchange Risk](index=33&type=section&id=%E5%A4%96%E5%8C%AF%E9%A2%A8%E9%9A%AA) The company's financial statements are presented in RMB, but some assets and liabilities are denominated in foreign currencies, exposing it to foreign exchange risk; while currently without a hedging policy, management monitors this risk and considers hedging significant exposures when necessary - The company's financial statements are presented in RMB, but some assets and liabilities are denominated in foreign currencies, exposing it to **foreign exchange risk**[94](index=94&type=chunk) - The company currently has **no foreign exchange hedging policy**, but management monitors foreign exchange risk and considers hedging significant exposures when necessary[94](index=94&type=chunk) [Bank Loans and Other Borrowings](index=33&type=section&id=%E9%8A%80%E8%A1%8C%E8%B2%B8%E6%AC%BE%E5%8F%8A%E5%85%B6%E4%BB%96%E5%80%9F%E6%AC%BE) As of June 30, 2025, the company's bank borrowings totaled RMB 363.2 million, all denominated in RMB - As of June 30, 2025, the company's bank borrowings amounted to **RMB 363.2 million**, all denominated in RMB[95](index=95&type=chunk) [Contingent Liabilities](index=33&type=section&id=%E6%88%96%E7%84%B6%E8%B2%A0%E5%80%B5) As of June 30, 2025, the company had no material contingent liabilities - As of June 30, 2025, the company had **no material contingent liabilities**[96](index=96&type=chunk) [Financial Statements](index=18&type=section&id=%E8%B4%A2%E5%8A%A1%E6%8A%A5%E8%A1%A8) [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=18&type=section&id=%E7%AE%80%E6%98%8E%E7%BB%BC%E5%90%88%E6%8D%9F%E7%9B%8A%E5%8F%8A%E5%85%B6%E4%BB%96%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) For the six months ended June 30, 2025, revenue significantly decreased to RMB 49,451 thousand, with cost of revenue increasing, resulting in a gross loss of RMB 92,790 thousand and a loss for the period of RMB 270,183 thousand, leading to a basic and diluted loss per share of RMB 0.21 Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the six months ended June 30) | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Revenue | 49,451 | 254,165 | | Cost of Revenue | (142,241) | (82,136) | | Gross Loss (Profit) | (92,790) | 172,029 | | Other Income | 9,315 | 14,824 | | Other Gains and Losses | 4,566 | 12,884 | | R&D Expenses | (105,166) | (66,248) | | Selling and Marketing Expenses | (35,654) | (62,769) | | Administrative Expenses | (43,546) | (46,672) | | Finance Costs | (6,908) | (8,349) | | Loss (Profit) for the Period | (270,183) | 15,699 | | Total Comprehensive Expense (Income) for the Period | (269,914) | 15,688 | | Basic Loss (Earnings) Per Share (RMB) | (0.21) | 0.01 | [Condensed Consolidated Statement of Financial Position](index=19&type=section&id=%E7%AE%80%E6%98%8E%E7%BB%BC%E5%90%88%E8%B4%A2%E5%8A%A1%E7%8A%B6%E5%86%B5%E8%A1%A8) As of June 30, 2025, total assets less current liabilities decreased to RMB 566,109 thousand, with net assets falling to RMB 315,044 thousand, and net current assets also decreasing from RMB 407,902 thousand to RMB 275,693 thousand Condensed Consolidated Statement of Financial Position (As of June 30, 2025) | Indicator | As of June 30, 2025 (RMB thousand) | As of December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Non-current Assets | 290,416 | 303,558 | | Current Assets | 901,489 | 1,089,908 | | Current Liabilities | 625,796 | 682,006 | | Net Current Assets | 275,693 | 407,902 | | Total Assets Less Current Liabilities | 566,109 | 711,460 | | Non-current Liabilities | 251,065 | 347,589 | | Net Assets | 315,044 | 363,871 | | Total Equity | 315,044 | 363,871 | [Notes to the Financial Statements](index=21&type=section&id=%E8%B4%A2%E5%8A%A1%E6%8A%A5%E8%A1%A8%E9%99%84%E6%B3%A8) [General Information and Basis of Preparation](index=21&type=section&id=%E4%B8%80%E8%88%AC%E8%B3%87%E6%96%99%E5%8F%8A%E7%B7%A8%E8%A3%BD%E5%9F%BA%E6%BA%96) The company, incorporated in the Cayman Islands, focuses on R&D and sales of complex biopharmaceutical products, with condensed consolidated financial statements prepared under IAS 34 and HKEX Listing Rules, using a going concern basis - The company is a listed company incorporated in the Cayman Islands, primarily engaged in the **R&D and sales of highly complex biopharmaceutical products**[54](index=54&type=chunk) - The condensed consolidated financial statements are prepared in accordance with **International Accounting Standard 34** and the HKEX Listing Rules, adopting a going concern basis[54](index=54&type=chunk) [Accounting Policies](index=21&type=section&id=%E6%9C%83%E8%A8%88%E6%94%BF%E7%AD%96) The condensed consolidated financial statements are prepared on a historical cost basis, with certain financial instruments measured at fair value, and the first-time application of revised IFRS accounting standards in this interim period had no significant impact on financial position or performance - The condensed consolidated financial statements are prepared on a **historical cost basis**, except for certain financial instruments measured at fair value where appropriate[55](index=55&type=chunk) - The revised IFRS accounting standards were first applied in this interim period, but had **no significant impact** on the financial position or performance[56](index=56&type=chunk) [Revenue Disaggregation and Segment Information](index=22&type=section&id=%E6%94%B6%E5%85%A5%E7%B4%B0%E5%88%86%E8%88%87%E5%88%86%E9%83%A8%E8%B3%87%E6%96%99) For the six months ended June 30, 2025, revenue primarily comprised drug sales (RMB 20,216 thousand), license fees (RMB 17,934 thousand), and royalty income (RMB 11,301 thousand), all recognized at a point in time, with the company operating in a single reportable segment of biopharmaceutical R&D, sales, and IP licensing, and revenue mainly derived from Mainland China and outside Mainland China Disaggregation of Revenue from Contracts with Customers (For the six months ended June 30) | Type of Goods or Services | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Sales of pharmaceutical products | 20,216 | 118,279 | | License fee income | 17,934 | 122,567 | | Royalty income | 11,301 | 13,319 | | **Total Revenue** | **49,451** | **254,165** | - The company operates in a **single reportable segment**, which is the R&D, sales, and intellectual property licensing of highly complex biopharmaceutical products[59](index=59&type=chunk) Geographical Information of Revenue (For the six months ended June 30) | Region | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Mainland China | 26,942 | 232,106 | | Outside Mainland China | 22,509 | 22,059 | | **Total Revenue** | **49,451** | **254,165** | [Other Income and Other Gains and Losses](index=23&type=section&id=%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5%E5%8F%8A%E5%85%B6%E4%BB%96%E6%94%B6%E7%9B%8A%E5%8F%8A%E8%99%A7%E6%8D%9F) For the six months ended June 30, 2025, other income was RMB 9,315 thousand, mainly from amortization of exclusive promotion rights and government grants, while other gains and losses were RMB 4,566 thousand, primarily from net foreign exchange gains and a net loss from fair value changes of financial assets Other Income (For the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Bank and other interest income | 1,087 | 7,439 | | Government grants income | 2,712 | 525 | | Amortisation of amounts received for exclusive promotion rights granted | 5,193 | 3,443 | | Scrap sales income | – | 2,723 | | Others | 323 | 694 | | **Total** | **9,315** | **14,824** | Other Gains and Losses (For the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Net foreign exchange gains | 7,021 | 3,235 | | Net fair value gains on money market funds | 136 | 196 | | Net fair value (losses) gains on financial assets measured at fair value | (2,617) | 9,132 | | Gain on disposal of property, plant and equipment | – | 340 | | Others | 26 | (19) | | **Total** | **4,566** | **12,884** | [Income Tax Expense](index=24&type=section&id=%E6%89%80%E5%BE%97%E7%A8%85%E9%96%8B%E6%94%AF) For the six months ended June 30, 2025 and 2024, no income tax expense was recognized as the company did not generate any taxable profit in its operating entities - As the Group did not generate any taxable profit in its operating entities, **no income tax expense** was recognized for the six months ended June 30, 2025 and 2024[63](index=63&type=chunk) [Details of Loss (Profit) for the Period](index=24&type=section&id=%E6%9C%9F%E5%85%A7%EF%BC%88%E8%99%A7%E6%90%8D%EF%BC%89%E6%BA%A2%E5%88%A9%E8%A9%B3%E6%83%85) For the six months ended June 30, 2025, the loss for the period was RMB 270,183 thousand, after deducting total depreciation and amortization of RMB 22,095 thousand, directors' emoluments of RMB 10,909 thousand, other staff costs of RMB 51,722 thousand, and including inventory write-downs of RMB 64,901 thousand Items Deducted from (Included in) Loss (Profit) for the Period (For the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Total depreciation and amortisation | 22,095 | 24,007 | | Directors' emoluments | 10,909 | 15,423 | | Other staff costs | 51,722 | 51,930 | | Impairment loss recognised on construction in progress | 4,303 | 4,161 | | Inventory write-down (reversal) | 64,901 | (2,710) | | Cost of inventories recognised as cost of revenue | 53,181 | 43,529 | [Dividends](index=25&type=section&id=%E8%82%A1%E6%81%AF) During the interim period, no dividends were paid, declared, or proposed to the company's ordinary shareholders, nor have any been proposed since the end of the reporting period - No dividends were paid, declared, or proposed to the company's ordinary shareholders during the interim period, nor have any been proposed since the end of the reporting period[66](index=66&type=chunk) [Loss (Earnings) Per Share](index=25&type=section&id=%E6%AF%8F%E8%82%A1%EF%BC%88%E8%99%A7%E6%8D%9F%EF%BC%89%E7%9B%88%E5%88%A9) For the six months ended June 30, 2025, the loss attributable to owners of the company was RMB 270,183 thousand, resulting in a basic and diluted loss per share of RMB 0.21, with diluted loss per share not assuming the exercise of share options and vesting of restricted share units due to their anti-dilutive effect Calculation of Loss (Earnings) Per Share (For the six months ended June 30) | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Loss (Profit) for the period attributable to owners of the company | (270,183) | 15,699 | | Weighted average number of ordinary shares (thousand shares) | 1,314,139 | 1,275,512 | | Basic and diluted loss (earnings) per share (RMB) | (0.21) | 0.01 | - Diluted loss (earnings) per share did not assume the exercise of share options and vesting of restricted share units, as their inclusion would have an **anti-dilutive effect**[69](index=69&type=chunk) [Trade Receivables](index=25&type=section&id=%E6%87%89%E6%94%B6%E8%B3%87%E6%AC%BE) The company generally grants an average credit period of 60 days to its customers, with total trade receivables amounting to RMB 62,536 thousand as of June 30, 2025, of which RMB 35,786 thousand were overdue by more than 90 days - The Group generally grants an **average credit period of 60 days** to its customers[70](index=70&type=chunk) Ageing Analysis of Trade Receivables (As of the end of the reporting period) | Ageing | As of June 30, 2025 (RMB thousand) | As of December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | 0 to 60 days | 24,923 | 48,688 | | 61 to 90 days | 1,827 | – | | Over 90 days | 35,786 | 35,241 | | **Total** | **62,536** | **83,929** | [Trade and Other Payables and Accrued Expenses](index=26&type=section&id=%E6%87%89%E4%BB%98%E8%B3%87%E6%AC%BE%E5%8F%8A%E5%85%B6%E4%BB%96%E6%87%89%E4%BB%98%E6%AC%BE%E9%A0%85%E5%8F%8A%E6%87%89%E8%A8%88%E9%96%8B%E6%94%AF) As of June 30, 2025, total trade and other payables and accrued expenses amounted to RMB 387,690 thousand, with trade payables of RMB 212,085 thousand, having a credit period of 0 to 90 days, and RMB 141,887 thousand overdue by more than 90 days Trade and Other Payables and Accrued Expenses (As of the end of the reporting period) | Item | As of June 30, 2025 (RMB thousand) | As of December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Trade payables | 212,085 | 338,029 | | Other payables and accrued expenses | 175,605 | 238,152 | | **Total** | **387,690** | **576,181** | - The credit period for trade payables is **0 to 90 days**[73](index=73&type=chunk) Ageing Analysis of Trade Payables (As of the end of the reporting period) | Ageing | As of June 30, 2025 (RMB thousand) | As of December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | 0 to 30 days | 47,336 | 74,545 | | 31 to 60 days | 16,635 | 142,635 | | 61 to 90 days | 6,227 | 24,848 | | Over 90 days | 141,887 | 96,001 | | **Total** | **212,085** | **338,029** | [Events After the Reporting Period](index=26&type=section&id=%E5%A0%B1%E5%91%8A%E6%9C%9F%E5%BE%8C%E7%9A%84%E4%BA%8B%E9%A0%85) On July 16, 2025, the company completed the placing of 100,000,000 placing shares at HKD 4.72 per share, raising net proceeds of approximately HKD 467.28 million (equivalent to RMB 425.79 million) - On July 16, 2025, the company completed the placing of **100,000,000 placing shares** at a placing price of **HKD 4.72 per share**[75](index=75&type=chunk) - The net proceeds from the placing amounted to approximately **HKD 467.28 million** (equivalent to **RMB 425.79 million**)[75](index=75&type=chunk) [Corporate Governance and Other Information](index=33&type=section&id=%E4%BC%81%E4%B8%9A%E7%AE%A1%E6%B2%BB%E5%8F%8A%E5%85%B6%E4%BB%96%E4%BF%A1%E6%81%AF) [Company Registration and Listing Information](index=33&type=section&id=%E5%85%AC%E5%8F%B8%E6%B3%A8%E5%86%8C%E4%B8%8E%E4%B8%8A%E5%B8%82%E4%BF%A1%E6%81%AF) CStone Pharmaceuticals was incorporated in the Cayman Islands on December 2, 2015, and its shares were listed on the Stock Exchange on February 26, 2019 - The company was incorporated in the Cayman Islands on **December 2, 2015**, and its shares were listed on the Stock Exchange on **February 26, 2019**[97](index=97&type=chunk) [Compliance with Corporate Governance Code](index=33&type=section&id=%E9%81%B5%E5%AE%88%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%AE%88%E5%88%99) The company's Board of Directors is committed to achieving high standards of corporate governance and complied with all code provisions of the Corporate Governance Code in Appendix C1 of the HKEX Listing Rules during the reporting period - The company's Board of Directors is committed to achieving high standards of corporate governance and complied with all code provisions of the **Corporate Governance Code in Appendix C1 of the HKEX Listing Rules** during the reporting period[98](index=98&type=chunk) [Model Code for Securities Transactions by Directors of Listed Issuers](index=34&type=section&id=%E4%B8%8A%E5%B8%82%E7%99%BC%E8%A1%8C%E4%BA%BA%E8%91%A3%E4%BA%8B%E9%80%B2%E8%A1%8C%E8%AD%89%E5%88%B8%E4%BA%A4%E6%98%93%E7%9A%84%E6%A8%99%E6%BA%96%E5%AE%88%E5%88%99) The company adopted a policy for directors' securities transactions, no less exacting than the Model Code in Appendix C3 of the Listing Rules, and all directors confirmed compliance during the reporting period, with no instances of non-compliance by employees noted - The company adopted a policy for directors' securities transactions, with terms **no less exacting than the Model Code** in Appendix C3 of the Listing Rules[99](index=99&type=chunk) - All directors confirmed compliance with the securities transaction code during the reporting period, and **no instances of non-compliance by employees** with the Model Code were noted[99](index=99&type=chunk) [Purchase, Sale or Redemption of Listed Securities](index=34&type=section&id=%E8%B3%BC%E8%B2%B7%E3%80%81%E5%87%BA%E5%94%AE%E6%88%96%E8%B3%96%E5%9B%9E%E4%B8%8A%E5%B8%82%E8%AD%89%E5%88%B8) During the reporting period, neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed securities, and as of June 30, 2025, the company held no treasury shares - During the reporting period, neither the company nor its subsidiaries purchased, sold, or redeemed **any of the company's listed securities**[100](index=100&type=chunk) - As of June 30, 2025, the company held **no treasury shares**[100](index=100&type=chunk) [Material Litigation](index=34&type=section&id=%E9%87%8D%E5%A4%A7%E8%A8%B4%E8%A8%9F) During the reporting period, the company was not involved in any material litigation or arbitration, and the directors were unaware of any pending or threatened material litigation or claims against the Group - During the reporting period, the company was **not involved in any material litigation or arbitration**[101](index=101&type=chunk) - The directors were also unaware of any pending or threatened **material litigation or claims** against the Group[101](index=101&type=chunk) [Material Events After the Reporting Period](index=34&type=section&id=%E5%A0%B1%E5%91%8A%E6%9C%9F%E5%BE%8C%E7%9A%84%E9%87%8D%E5%A4%A7%E4%BA%8B%E9%A0%85) On July 16, 2025, the company completed the placing of 100,000,000 placing shares at HKD 4.72 per share, raising net proceeds of approximately HKD 467.28 million - On July 16, 2025, the company completed the placing of **100,000,000 placing shares** at a placing price of **HKD 4.72 per share**[102](index=102&type=chunk) - The net proceeds from the placing amounted to approximately **HKD 467.28 million**[102](index=102&type=chunk) [Use of Net Proceeds](index=34&type=section&id=%E6%89%80%E5%BE%97%E6%AC%BE%E9%A0%85%E6%B7%A8%E9%A1%8D%E7%94%A8%E9%80%94) The company detailed the planned and actual use of net proceeds from the Pfizer share subscription and the April 2025 placing, with Pfizer proceeds primarily for development activities under the collaboration agreement, and April 2025 placing proceeds mainly for R&D Pipeline 2.0, specifically CS5001 and CS2009 - The total proceeds from the Pfizer share subscription were approximately **USD 200.0 million** (approximately **RMB 1,355.9 million**), used to fund development activities under the collaboration agreement[103](index=103&type=chunk) Use of Pfizer Subscription Proceeds (As of June 30, 2025) | Purpose | Percentage of Use | Proceeds from Subscription (RMB million) | Unutilized as of Dec 31, 2024 (RMB million) | Actual Use During Reporting Period (RMB million) | Unutilized as of June 30, 2025 (RMB million) | | :--- | :--- | :--- | :--- | :--- | :--- | | Funding development activities under the collaboration agreement | 100% | 1,355.9 | 409.3 | 40.6 | 368.7 | - The net proceeds from the April 2025 placing were approximately **HKD 232.29 million** (approximately **RMB 215.82 million**), primarily used for R&D Pipeline "2.0"[106](index=106&type=chunk) Use of April 2025 Placing Proceeds (As of June 30, 2025) | Purpose | Percentage of Use | Proceeds from Placing (RMB million) | Actual Use During Reporting Period (RMB million) | Unutilized Net Proceeds (RMB million) | | :--- | :--- | :--- | :--- | :--- | | R&D Pipeline "2.0" (CS5001, CS2009, etc.) | 90% | 194.24 | 25.97 | 168.27 | | General corporate purposes | 10% | 21.58 | 4.28 | 17.30 | | **Total** | **100%** | **215.82** | **30.25** | **185.57** | [Audit Committee Review](index=36&type=section&id=%E5%AF%A9%E6%A0%B8%E5%A7%94%E5%91%A1%E6%9C%83%E5%AF%A9%E9%96%B1) The Audit Committee reviewed the Group's accounting principles and practices, discussed internal controls and financial reporting with management, and confirmed that the interim financial results for the six months ended June 30, 2025, complied with relevant accounting standards, rules, and regulations, with appropriate disclosures - The Audit Committee reviewed and confirmed that the interim financial results for the six months ended June 30, 2025, complied with relevant accounting standards, rules, and regulations, with **appropriate disclosures**[108](index=108&type=chunk) [Review of Interim Results](index=36&type=section&id=%E4%B8%AD%E6%9C%9F%E6%A5%AD%E7%B8%BE%E5%AF%A9%E9%96%B1) Deloitte Touche Tohmatsu, the company's independent auditor, reviewed the interim financial information in accordance with International Standard on Review Engagements 2410, and the Audit Committee, with management, reviewed accounting principles, policies, internal controls, and financial reporting - Deloitte Touche Tohmatsu, the company's independent auditor, reviewed the interim financial information in accordance with **International Standard on Review Engagements 2410**[109](index=109&type=chunk) [Interim Dividend](index=36&type=section&id=%E4%B8%AD%E6%9C%9F%E8%82%A1%E6%81%AF) The Board of Directors does not recommend the payment of an interim dividend for the six months ended June 30, 2025 - The Board of Directors does not recommend the payment of an interim dividend for the six months ended June 30, 2025 (2024: nil)[110](index=110&type=chunk) [Publication of Interim Results Announcement and Interim Report](index=36&type=section&id=%E5%88%8A%E7%99%BC%E4%B8%AD%E6%9C%9F%E6%A5%AD%E7%B8%BE%E5%85%AC%E5%91%8A%E5%8F%8A%E4%B8%AD%E6%9C%9F%E5%A0%B1%E5%91%8A) This announcement will be published on the HKEX and company websites, and the interim report for the six months ended June 30, 2025, will be published on the HKEX and company websites in due course - This announcement will be published on the **HKEX website (www.hkexnews.hk)** and the **company website (www.cstonepharma.com)**[111](index=111&type=chunk) - The interim report for the six months ended June 30, 2025, will be published on the **HKEX and company websites in due course**[111](index=111&type=chunk) [Acknowledgements and Board of Directors](index=37&type=section&id=%E8%87%B4%E8%AC%9D%E8%88%87%E8%91%A3%E4%BA%8B%E6%9C%83%E6%88%90%E5%93%A1) The Board of Directors extends sincere gratitude to shareholders, management, employees, business partners, and customers for their support and contributions, and lists the Board members as of the announcement date - The Board of Directors extends its sincere gratitude to the Group's shareholders, management team, employees, business partners, and customers for their **support and contributions**[112](index=112&type=chunk) - As of the announcement date, the Board of Directors includes Dr. Li Wei (Chairman and Non-executive Director), Dr. Yang Jianxin (Executive Director), Mr. Kenneth Walton Hitchner III and Mr. Hu Zhengguo (Non-executive Directors), and Mr. Hu Dingxu and Ms. He Ye (Independent Non-executive Directors)[113](index=113&type=chunk)

[Interim Financial Statements](index=2&type=section&id=Interim%20Financial%20Statements) [Un-audited Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=Un-audited%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended June 30, 2025, the company's revenue significantly increased by 32.4% to RM113.1 million, profit for the period surged by 165.9% year-on-year to RM11.7 million, and basic earnings per share rose to 1.36 cents | Indicator | For the six months ended June 30, 2025 (RM thousand) | For the six months ended June 30, 2024 (RM thousand) | | :--- | :--- | :--- | | Revenue | 113,071 | 85,372 | | Cost of sales and services | (82,449) | (61,649) | | Gross profit | 30,622 | 23,723 | | Profit for the period | 11,690 | 4,351 | | Total comprehensive income for the period | 8,434 | 4,365 | | Basic and diluted earnings per share (cents) | 1.36 | 0.72 | [Un-audited Condensed Consolidated Statement of Financial Position](index=4&type=section&id=Un-audited%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the company's total assets less current liabilities significantly increased to RM209.2 million, primarily driven by non-current asset growth, with net assets also rising to RM204.0 million | Indicator | As of June 30, 2025 (RM thousand) | As of December 31, 2024 (RM thousand) | | :--- | :--- | :--- | | Non-current assets | 123,859 | 61,760 | | Current assets | 146,232 | 144,285 | | Current liabilities | 60,875 | 57,637 | | Net current assets | 85,357 | 86,648 | | Total assets less current liabilities | 209,216 | 148,408 | | Non-current liabilities | 5,238 | 5,646 | | Net assets | 203,978 | 142,762 | | Total equity | 203,978 | 142,762 | [Un-audited Condensed Consolidated Statement of Changes in Equity](index=6&type=section&id=Un-audited%20Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) For the six months ended June 30, 2025, the company's total equity increased from RM142.8 million at the beginning of the period to RM204.0 million, primarily due to profit for the period and new share issuance | Indicator | As of June 30, 2025 (RM thousand) | As of June 30, 2024 (RM thousand) | | :--- | :--- | :--- | | Balance at beginning of period | 142,762 | 138,399 | | Profit for the period | 11,690 | 4,351 | | Total comprehensive income | 8,434 | 4,365 | | Shares issued during the period | 57,742 | – | | Dividends paid | (4,960) | – | | Balance at end of period | 203,978 | 142,754 | [Un-audited Condensed Consolidated Statement of Cash Flows](index=7&type=section&id=Un-audited%20Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash from operating activities turned positive to RM6.67 million, but net cash outflow from investing activities significantly increased, resulting in a net decrease of RM11.05 million in cash and cash equivalents | Indicator | For the six months ended June 30, 2025 (RM thousand) | For the six months ended June 30, 2024 (RM thousand) | | :--- | :--- | :--- | | Net cash from/(used in) operating activities | 6,673 | (9,693) | | Net cash used in investing activities | (10,738) | (1,066) | | Net cash (used in)/from financing activities | (6,984) | 920 | | Net decrease in cash and cash equivalents | (11,049) | (9,839) | | Cash and cash equivalents at end of period | 37,517 | 32,883 | [Notes to Interim Financial Information](index=8&type=section&id=Notes%20to%20Interim%20Financial%20Information) [1. General Information](index=8&type=section&id=1.%20General%20Information) The company is incorporated in the Cayman Islands, primarily engaged in investment holding, with subsidiaries involved in manufacturing and selling elastic textiles, webbing, tape products, and energy efficiency businesses. The ultimate holding company is PRG Holdings Berhad - The company was incorporated on March 3, 2017, under the laws of the Cayman Islands and listed on the GEM of the Hong Kong Stock Exchange since October 16, 2017[11](index=11&type=chunk) - The company's principal business is investment holding, with its subsidiaries engaged in the manufacturing and sale of elastic textiles, webbing, and tape-related products, as well as energy efficiency businesses[12](index=12&type=chunk) - The ultimate holding company of the company is PRG Holdings Berhad, whose shares are listed on the Main Market of Bursa Malaysia Securities Berhad[12](index=12&type=chunk) [2. Basis of Preparation and Accounting Policies](index=8&type=section&id=2.%20Basis%20of%20Preparation%20and%20Accounting%20Policies) The unaudited condensed consolidated interim financial statements are prepared in accordance with IFRS 34 and GEM Listing Rules, presented in Malaysian Ringgit, adopting the same accounting policies as the 2024 annual financial statements, with no significant impact from new standard adoptions - The financial statements are prepared in accordance with International Financial Reporting Standard 34 and the GEM Listing Rules, presented on a historical cost basis[13](index=13&type=chunk) - The financial statements are presented in Malaysian Ringgit, with all values rounded to the nearest thousand[13](index=13&type=chunk) - The adoption of new or revised International Financial Reporting Standards has not resulted in any significant changes or material impact on the Group's financial statements[14](index=14&type=chunk) [3. Revenue and Segment Reporting](index=9&type=section&id=3.%20Revenue%20and%20Segment%20Reporting) The Group identified three reportable segments: production, energy efficiency, and others. For the six months ended June 30, 2025, total revenue increased by 32.4% year-on-year, primarily driven by the energy efficiency segment, which saw a significant revenue growth of 71.0% - The Group identified three reportable segments: production, energy efficiency, and others (including property investment, money lending, and head office operations)[15](index=15&type=chunk) Segment Revenue and Profit (RM thousand) | Segment | 2025 Revenue | 2024 Revenue | 2025 Profit | 2024 Profit | | :--- | :--- | :--- | :--- | :--- | | Production | 43,474 | 44,569 | 5,028 | 5,110 | | Energy Efficiency | 69,562 | 40,734 | 12,045 | 3,624 | | Others | 35 | 69 | (1,407) | (2,702) | | **Total** | **113,071** | **85,372** | **15,666** | **6,032** | [3. (a) Business Segments](index=9&type=section&id=3.%20%28a%29%20Business%20Segments) The Group's business segments include production (elastic textiles, webbing, and tape products) and energy efficiency, as well as others (property investment, money lending, and head office operations). The energy efficiency segment achieved significant growth in the first half of 2025, becoming a major revenue contributor - The Group's operating segments include production (manufacturing and sale of elastic textiles, webbing, and tape-related products) and energy efficiency businesses[15](index=15&type=chunk) - Revenue from the energy efficiency segment significantly increased by **71.0%** from **RM40.7 million** in the same period of 2024 to **RM69.6 million** in the same period of 2025, primarily due to increased income from Malaysian projects[17](index=17&type=chunk)[47](index=47&type=chunk) - Revenue from the production segment slightly decreased by **2.5%** to **RM43.5 million**, mainly due to lower sales of tape and furniture webbing products and the depreciation of the US dollar against the Ringgit[17](index=17&type=chunk)[46](index=46&type=chunk) [3. (b) Geographical Information](index=11&type=section&id=3.%20%28b%29%20Geographical%20Information) The Group's manufacturing and sales facilities are located in Malaysia, Vietnam, and Singapore. The Asia Pacific region remains the primary market, with Malaysia's revenue contribution significantly increasing - The Group's manufacturing facilities and sales offices are based in Malaysia and Vietnam, while its energy efficiency business is based in Singapore and Malaysia[19](index=19&type=chunk) Revenue by Geographical Location (RM thousand) | Region | 2025 | 2024 | | :--- | :--- | :--- | | Asia Pacific — Malaysia | 42,958 | 11,697 | | Asia Pacific — Singapore | 31,710 | 33,328 | | Asia Pacific — Vietnam | 8,868 | 8,877 | | Asia Pacific — Others | 15,553 | 16,687 | | Europe | 4,431 | 4,394 | | North America | 8,993 | 9,905 | | Others | 558 | 484 | | **Total** | **113,071** | **85,372** | [3. (c) Information about Major Customers](index=11&type=section&id=3.%20%28c%29%20Information%20about%20Major%20Customers) In the first half of 2025, Customer A emerged as a new major customer, contributing RM38.36 million in revenue, primarily from the energy efficiency segment. In 2024, major customers B, C, and D each accounted for less than 10% of revenue Major Customer Revenue (RM thousand) | Customer | 2025 | 2024 | | :--- | :--- | :--- | | Customer A | 38,364 | Not applicable | | Customer B | Not applicable | 10,003 | | Customer C | Not applicable | 10,368 | | Customer D | Not applicable | 10,362 | - In 2025, revenue from **Customer A** accounted for **10% or more** of total revenue, while major customers B, C, and D in 2024 each accounted for less than 10% of revenue[20](index=20&type=chunk) - Revenue from major customers is primarily reported under the energy efficiency segment (2024: energy efficiency and production segments)[21](index=21&type=chunk) [4. Other Income and Net Other Gains or Losses](index=14&type=section&id=4.%20Other%20Income%20and%20Net%20Other%20Gains%20or%20Losses) For the six months ended June 30, 2025, total other income and net other gains or losses increased by 75.0% to RM0.7 million, primarily due to a significant improvement in net foreign exchange gains Other Income (RM thousand) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Commission income | 53 | 43 | | Government grants | 55 | – | | Others | 184 | 377 | | **Total** | **292** | **420** | Net Other Gains or Losses (RM thousand) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Net foreign exchange gains/(losses) | 446 | (58) | | Net loss/(gain) on disposal of property, plant and equipment | (39) | 10 | | Loss on lease modification | (4) | – | | **Total** | **403** | **(48)** | - Total other income and net other gains or losses increased by **RM0.3 million** or **75.0%**, mainly due to a net foreign exchange gain of **RM0.45 million** for the current period (2024: net loss of **RM0.06 million**)[51](index=51&type=chunk) [5. Finance Costs](index=14&type=section&id=5.%20Finance%20Costs) For the six months ended June 30, 2025, finance costs decreased by 22.8% year-on-year to RM437 thousand, primarily due to lower interest on borrowings and lease liabilities | Indicator | 2025 (RM thousand) | 2024 (RM thousand) | | :--- | :--- | :--- | | Interest on borrowings | 325 | 395 | | Interest on lease liabilities | 112 | 171 | | **Total** | **437** | **566** | [6. Profit Before Income Tax Expense](index=15&type=section&id=6.%20Profit%20Before%20Income%20Tax%20Expense) For the six months ended June 30, 2025, profit before income tax expense significantly increased to RM15.8 million, influenced by factors such as reduced amortisation and depreciation, lower interest income, and a slight decrease in staff costs Components of Profit Before Income Tax Expense (RM thousand) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Auditors' remuneration | 271 | 266 | | Amortisation and depreciation | 2,581 | 2,808 | | Net loss/(gain) on disposal of property, plant and equipment | 39 | (10) | | Interest income | (324) | (658) | | Net provision for/(reversal of) write-down of inventories | 487 | (73) | | Bad debts recovered | (149) | – | | Staff costs | 26,158 | 27,120 | [7. Income Tax Expense](index=15&type=section&id=7.%20Income%20Tax%20Expense) For the six months ended June 30, 2025, income tax expense significantly increased year-on-year to RM4.11 million, primarily due to higher current tax expenses for Malaysian and overseas income tax | Indicator | 2025 (RM thousand) | 2024 (RM thousand) | | :--- | :--- | :--- | | Current tax expense — Malaysian income tax | 3,080 | 716 | | Current tax expense — Overseas income tax | 1,086 | 1,111 | | Underprovision in prior periods | – | 201 | | Deferred tax — current year | (60) | (65) | | **Total** | **4,106** | **1,963** | - Malaysian income tax is calculated at the statutory tax rate of **24%** on the estimated assessable profit[28](index=28&type=chunk) - The company is not subject to any income tax in the Cayman Islands[28](index=28&type=chunk) [8. Dividends](index=16&type=section&id=8.%20Dividends) The Board does not recommend any dividend payment for the six months ended June 30, 2025. The final dividend of HK$0.01 per share (approximately RM4.96 million) for FY2024 was paid in June 2025 - The Board does not recommend any dividend payment for the six months ended June 30, 2025[30](index=30&type=chunk) - The final dividend for the year ended December 31, 2024, of **HK$0.01** per ordinary share, amounting to **HK$9,233,000** (equivalent to approximately **RM4,960,000**), was paid in June 2025[30](index=30&type=chunk) [9. Earnings Per Share](index=16&type=section&id=9.%20Earnings%20Per%20Share) For the six months ended June 30, 2025, basic earnings per share were 1.36 cents, a significant increase from 0.72 cents in the same period of 2024, primarily due to higher profit for the period | Indicator | 2025 (RM thousand) | 2024 (RM thousand) | | :--- | :--- | :--- | | Profit for the period attributable to owners of the Company | 11,690 | 4,351 | | Weighted average number of ordinary shares in issue (thousand shares) | 857,548 | 601,566 | | **Basic earnings per share (cents)** | **1.36** | **0.72** | - Diluted earnings per share are the same as basic earnings per share, as there were no dilutive potential ordinary shares outstanding during the period[32](index=32&type=chunk) [10. Property, Plant and Equipment](index=16&type=section&id=10.%20Property%2C%20Plant%20and%20Equipment) For the six months ended June 30, 2025, additions to property, plant and equipment amounted to RM0.7 million, a significant decrease from RM4.7 million in the same period of 2024 | Indicator | For the six months ended June 30, 2025 (RM million) | For the six months ended June 30, 2024 (RM million) | | :--- | :--- | :--- | | Additions to property, plant and equipment | 0.7 | 4.7 | [11. Trade and Other Receivables](index=17&type=section&id=11.%20Trade%20and%20Other%20Receivables) As of June 30, 2025, total trade and other receivables were RM40.73 million, a decrease from RM47.39 million as of December 31, 2024, primarily due to a reduction in net other receivables | Indicator | As of June 30, 2025 (RM thousand) | As of December 31, 2024 (RM thousand) | | :--- | :--- | :--- | | Trade receivables, net | 32,079 | 31,123 | | Other receivables and loans receivable, net | 8,651 | 16,263 | | **Total** | **40,730** | **47,386** | Ageing Analysis of Trade Receivables (RM thousand) | Ageing | As of June 30, 2025 | As of December 31, 2024 | | :--- | :--- | :--- | | Within 30 days | 17,149 | 21,227 | | 31 to 60 days | 5,416 | 8,598 | | 61 to 90 days | 3,096 | 4,017 | | 91 to 180 days | 1,645 | 2,467 | | Over 180 days | 230 | 123 | | **Total** | **32,461** | **31,507** | [12. Trade and Other Payables](index=18&type=section&id=12.%20Trade%20and%20Other%20Payables) As of June 30, 2025, total trade and other payables were RM40.13 million, a slight increase from RM38.13 million as of December 31, 2024, primarily due to an increase in other payables offsetting a decrease in trade payables | Indicator | As of June 30, 2025 (RM thousand) | As of December 31, 2024 (RM thousand) | | :--- | :--- | :--- | | Trade payables | 10,565 | 12,975 | | Other payables | 29,568 | 25,155 | | **Total** | **40,133** | **38,130** | Ageing Analysis of Trade Payables (RM thousand) | Ageing | As of June 30, 2025 | As of December 31, 2024 | | :--- | :--- | :--- | | Within 30 days | 5,744 | 9,806 | | 31 to 60 days | 2,225 | 1,888 | | 61 to 90 days | 398 | 1,127 | | Over 90 days | 2,198 | 154 | | **Total** | **10,565** | **12,975** | [13. Borrowings](index=18&type=section&id=13.%20Borrowings) As of June 30, 2025, the Group's total borrowings were RM14.53 million, a slight decrease from RM15.26 million as of December 31, 2024, primarily due to reductions in term loans and bank overdrafts | Indicator | As of June 30, 2025 (RM thousand) | As of December 31, 2024 (RM thousand) | | :--- | :--- | :--- | | Term loans (secured) | 11,178 | 12,757 | | Bank overdrafts (secured) | 550 | 583 | | Bankers' acceptances (secured) | 867 | – | | Trust receipts loans (secured) | 1,931 | 1,920 | | **Total** | **14,526** | **15,260** | Borrowings Maturity Analysis (RM thousand) | Maturity | As of June 30, 2025 | As of December 31, 2024 | | :--- | :--- | :--- | | Within one year | 4,818 | 4,805 | | After one year but within two years | 1,544 | 1,507 | | After two years but within five years | 3,617 | 4,102 | | After five years | 4,547 | 4,846 | | **Total** | **14,526** | **15,260** | [14. Share Capital](index=19&type=section&id=14.%20Share%20Capital) As of June 30, 2025, the company's issued and fully paid share capital increased to 923,322 thousand shares, amounting to RM50.97 million, primarily due to the allotment of 321,756 thousand new shares to PRG Holdings for property acquisition | Indicator | As of June 30, 2025 (thousand shares) | As of June 30, 2025 (HKD thousand) | As of June 30, 2025 (RM thousand) | | :--- | :--- | :--- | :--- | | Issued and fully paid share capital at beginning of period | 601,566 | 60,157 | 32,633 | | Additions (Note) | 321,756 | 32,175 | 18,340 | | **Issued and fully paid share capital at end of period** | **923,322** | **92,332** | **50,973** | - On February 7, 2025, the company completed the purchase of **50 multi-storey residential units** within the Picasso Residence development in Malaysia, with **88%** of the total consideration paid by allotting **321,756,000 ordinary shares** of the company to the vendor, PRG Holdings[39](index=39&type=chunk) [15. Related Party Transactions](index=20&type=section&id=15.%20Related%20Party%20Transactions) The Group engaged in various related party transactions, including sales of goods and services to a joint venture, commission and dividend income, and rental expenses and interest income with the ultimate holding company, PRG Holdings. Key management personnel compensation decreased year-on-year Related Party Transactions (RM thousand) | Related party name | Nature of transaction | 2025 | 2024 | | :--- | :--- | :--- | :--- | | Trunet (Vietnam) Co., Ltd. (Joint venture) | Sales of goods | 698 | 576 | | | Sales of services | 39 | 36 | | | Commission received/receivable | 53 | 43 | | | Rental income | 56 | 60 | | | Dividends received | 500 | 236 | | PRG Holdings (Ultimate holding company) | Rental expenses | (4) | (25) | | | Interest income | 147 | 149 | | Netventure Properties Two Pte. Ltd. (Subsidiary director's spouse has equity interest) | Rental expenses | (267) | (284) | | Netventure Reality Pte. Ltd. (Subsidiary director has equity interest) | Rental expenses | (95) | (86) | [15. (a) Related Party Transactions](index=20&type=section&id=15.%20%28a%29%20Related%20Party%20Transactions) The Group conducted sales, services, rental, and interest transactions with related parties such as joint venture Trunet (Vietnam) Co., Ltd. and ultimate holding company PRG Holdings, all under negotiated terms - Rental expense transactions with PRG Holdings, Netventure Properties Two Pte. Ltd., and Netventure Reality Pte. Ltd. constitute connected transactions that meet the minimum exemption level[41](index=41&type=chunk) - Interest income from advances to PRG Holdings constitutes a discloseable and connected transaction, for which the company has complied with the applicable requirements of the GEM Listing Rules[41](index=41&type=chunk) [15. (b) Key Management Personnel Compensation](index=21&type=section&id=15.%20%28b%29%20Key%20Management%20Personnel%20Compensation) For the six months ended June 30, 2025, total key management personnel compensation was RM2.72 million, a decrease from RM3.72 million in the same period of 2024, primarily due to RM1.0 million in terminal benefits in 2024 that were absent in 2025 | Indicator | 2025 (RM thousand) | 2024 (RM thousand) | | :--- | :--- | :--- | | Fees, salaries, allowances and other benefits | 2,533 | 2,542 | | Contributions to defined contribution plans | 190 | 173 | | Terminal benefits | – | 1,000 | | **Total** | **2,723** | **3,715** | [16. Capital Commitments](index=21&type=section&id=16.%20Capital%20Commitments) As of June 30, 2025, the Group had zero contracted but unprovided capital commitments, compared to RM54.83 million as of December 31, 2024, primarily for the acquisition of investment properties | Indicator | As of June 30, 2025 (RM thousand) | As of December 31, 2024 (RM thousand) | | :--- | :--- | :--- | | Contracted but not provided for — acquisition of property, plant and equipment | – | 284 | | Contracted but not provided for — acquisition of investment properties | – | 54,544 | | **Total** | **–** | **54,828** | [Management Discussion and Analysis](index=22&type=section&id=Management%20Discussion%20and%20Analysis) [Business Review](index=22&type=section&id=Business%20Review) The Group's production segment revenue slightly decreased, mainly due to lower sales of tape and furniture webbing and a depreciating US dollar; while the energy efficiency segment revenue surged by 71.0%, primarily driven by increased Malaysian project income, becoming the main driver of performance growth for the period - Production segment revenue was approximately **RM43.5 million**, a **2.5%** decrease compared to the same period in 2024, mainly due to lower sales of tape and furniture webbing products and the depreciation of the US dollar against the Malaysian Ringgit[46](index=46&type=chunk) - Energy efficiency segment revenue was approximately **RM69.6 million**, a **71.0%** increase compared to the same period in 2024, primarily due to increased income from Malaysian projects[47](index=47&type=chunk) [Business Review (a) Production Segment](index=22&type=section&id=Business%20Review%20%28a%29%20Production%20Segment) The production segment, a manufacturer of elastic textiles and webbing in Malaysia and Vietnam, exports products to over 30 countries. Domestic sales slightly increased to 31.2% of total production segment revenue, with export sales at 68.8% for the period - The production segment is a long-established manufacturer of elastic textiles and webbing in Malaysia and Vietnam, exporting products to over **30 countries**[45](index=45&type=chunk) - Domestic sales and export sales accounted for approximately **31.2%** and **68.8%** respectively of the production segment's total revenue for the period (2024: **28.7%** and **71.3%**)[45](index=45&type=chunk) [Business Review (b) Energy Efficiency Segment](index=22&type=section&id=Business%20Review%20%28b%29%20Energy%20Efficiency%20Segment) The energy efficiency segment's revenue primarily derives from energy solution contracts, maintenance service contracts, and other services, with energy solution contracts accounting for the largest share. Revenue for the period significantly increased by 71.0%, mainly due to higher Malaysian project income - Revenue from the energy efficiency segment primarily includes energy solution contracts (**78.4%**), maintenance service contracts (**10.9%**), other services (**10.6%**), and sales of goods (**0.1%**)[47](index=47&type=chunk) - Revenue for the period was approximately **RM69.6 million**, an increase of **RM28.9 million** or **71.0%** compared to the same period in 2024, mainly due to increased income from Malaysian projects[47](index=47&type=chunk) [Financial Review](index=23&type=section&id=Financial%20Review) The Group's revenue grew by 32.4% for the period, primarily driven by the energy efficiency segment. Gross profit increased by 29.1%, but gross profit margin slightly decreased due to rising labor costs. Profit for the period surged by 165.9%, mainly attributable to increased contributions from the energy efficiency segment and reduced administrative expenses - The Group's revenue was approximately **RM113.1 million**, an increase of **32.4%** compared to the same period in 2024, primarily contributed by the energy efficiency segment[48](index=48&type=chunk) - Profit for the period was approximately **RM11.7 million**, a **165.9%** increase compared to the same period in 2024, mainly due to increased profit contribution from the energy efficiency segment[54](index=54&type=chunk) [Revenue](index=23&type=section&id=Financial%20Review%20Revenue) The Group's revenue reached RM113.1 million for the period, a 32.4% year-on-year increase, primarily contributed by the energy efficiency segment, whose share of total revenue rose from 47.7% to 61.5% - Revenue for the period was approximately **RM113.1 million**, an increase of **RM27.7 million** or **32.4%** compared to the same period in 2024[48](index=48&type=chunk) - The energy efficiency segment accounted for approximately **61.5%** of the Group's total revenue (2024: **47.7%**), becoming the main growth driver[48](index=48&type=chunk) [Cost of Sales and Services](index=23&type=section&id=Financial%20Review%20Cost%20of%20Sales%20and%20Services) Cost of sales and services for the period was approximately RM82.4 million, a 33.8% year-on-year increase, consistent with the revenue growth trend - Cost of sales and services was approximately **RM82.4 million**, an increase of **RM20.8 million** or **33.8%** compared to the same period in 2024, consistent with the increase in revenue[49](index=49&type=chunk) [Gross Profit and Gross Profit Margin](index=23&type=section&id=Financial%20Review%20Gross%20Profit%20and%20Gross%20Profit%20Margin) Gross profit for the period increased by 29.1% to RM30.6 million, but the gross profit margin decreased from 27.8% to 27.1%, primarily due to rising labor costs following the increase in Malaysia's minimum wage - Gross profit was approximately **RM30.6 million**, an increase of **RM6.9 million** or **29.1%** compared to the same period in 2024[50](index=50&type=chunk) - Gross profit margin decreased from **27.8%** to **27.1%**, mainly due to increased labor costs after the minimum wage hike in Malaysia effective February 2025[50](index=50&type=chunk) [Other Income and Net Other Gains or Losses](index=23&type=section&id=Financial%20Review%20Other%20Income%20and%20Net%20Other%20Gains%20or%20Losses) Total other income and net other gains or losses for the period increased by 75.0% to RM0.7 million, primarily due to an improvement in net foreign exchange gains - Total other income and net other gains or losses were approximately **RM0.7 million**, an increase of **RM0.3 million** or **75.0%** compared to the same period in 2024[51](index=51&type=chunk) - This was mainly due to a net foreign exchange gain of **RM0.45 million** for the current period (2024: net loss of **RM0.06 million**)[51](index=51&type=chunk) [Selling and Distribution Costs](index=24&type=section&id=Financial%20Review%20Selling%20and%20Distribution%20Costs) Selling and distribution costs for the period were approximately RM1.1 million, a 10.0% year-on-year increase, consistent with revenue growth - Selling and distribution costs were approximately **RM1.1 million**, an increase of **RM0.1 million** or **10.0%** compared to the same period in 2024, consistent with the increase in revenue for the period[52](index=52&type=chunk) [Administrative Expenses](index=24&type=section&id=Financial%20Review%20Administrative%20Expenses) Administrative expenses for the period were approximately RM14.7 million, a 13.5% year-on-year decrease, primarily due to reduced directors' remuneration following the retirement or resignation of certain directors - Administrative expenses were approximately **RM14.7 million**, a decrease of **RM2.3 million** or **13.5%** compared to the same period in 2024[53](index=53&type=chunk) - The decrease was mainly due to reduced directors' remuneration following the retirement or resignation of certain directors in 2024[53](index=53&type=chunk) [Profit for the Period](index=24&type=section&id=Financial%20Review%20Profit%20for%20the%20Period) Profit for the period was approximately RM11.7 million, a significant 165.9% year-on-year increase, primarily due to increased profit contribution from the energy efficiency segment, consistent with revenue growth - Profit for the period was approximately **RM11.7 million**, an increase of **RM7.3 million** or **165.9%** compared to the same period in 2024[54](index=54&type=chunk) - This significant increase was primarily due to increased profit contribution from the energy efficiency segment, consistent with the revenue growth for the period[54](index=54&type=chunk) [Liquidity and Financial Resources](index=24&type=section&id=Liquidity%20and%20Financial%20Resources) As of June 30, 2025, the Group's total equity increased to RM204.0 million, net current assets slightly decreased to RM85.4 million, and cash and cash equivalents (net of bank overdrafts) decreased to RM37.5 million. The current ratio was 2.4 times, indicating a net cash position with sufficient financial resources - The Group's total equity attributable to owners of the Company was approximately **RM204.0 million** (December 31, 2024: **RM142.8 million**)[56](index=56&type=chunk) - Net current assets were approximately **RM85.4 million** (December 31, 2024: **RM86.6 million**), and cash and cash equivalents (net of bank overdrafts) were approximately **RM37.5 million** (December 31, 2024: **RM49.6 million**)[56](index=56&type=chunk) - The current ratio was approximately **2.4 times** (December 31, 2024: **2.5 times**), indicating a net cash position with sufficient financial resources to fund future working capital requirements for business operations[57](index=57&type=chunk) [Capital Structure](index=25&type=section&id=Capital%20Structure) The Group's capital structure remained unchanged during the period, with share capital comprising solely ordinary shares - The Group's capital structure remained unchanged during the period, with the company's share capital comprising solely ordinary shares[58](index=58&type=chunk) [Dividends](index=25&type=section&id=Dividends) The Board does not recommend any dividend payment for the six months ended June 30, 2025. The final dividend of HK$0.01 per share for FY2024 was paid in June 2025 - The Board does not recommend any dividend payment for the six months ended June 30, 2025[59](index=59&type=chunk) - The final dividend for the year ended December 31, 2024, of **HK$0.01** per ordinary share (approximately **RM4.96 million**), was paid in June 2025[59](index=59&type=chunk) [Significant Investments Held by the Group](index=25&type=section&id=Significant%20Investments%20Held%20by%20the%20Group) As of June 30, 2025, the Group held no significant investments - As of June 30, 2025, the Group held no significant investments[60](index=60&type=chunk) [Material Acquisitions and Disposals of Subsidiaries, Associates and Joint Ventures](index=26&type=section&id=Material%20Acquisitions%20and%20Disposals%20of%20Subsidiaries%2C%20Associates%20and%20Joint%20Ventures) Except as disclosed under "Material Events During the Period" in this announcement, the Group had no material acquisitions or disposals of subsidiaries, associates, and joint ventures during the period - Except as disclosed under "Material Events During the Period" in this announcement, the Group had no material acquisitions or disposals of subsidiaries, associates, and joint ventures during the period[61](index=61&type=chunk) [Pledge of Assets](index=26&type=section&id=Pledge%20of%20Assets) As of June 30, 2025, the Group's freehold land, buildings, right-of-use assets, life insurance policy investments, and fixed deposits with a carrying value of RM28.7 million were pledged to financial institutions as collateral for credit facilities - As of June 30, 2025, the Group's freehold land, buildings, right-of-use assets, life insurance policy investments, and fixed deposits with a carrying value of **RM28.7 million** were pledged to banks and other financial institutions[62](index=62&type=chunk) - The pledged assets serve as collateral for credit facilities granted to the Group[62](index=62&type=chunk) [Future Plans for Material Investments and Capital Assets](index=26&type=section&id=Future%20Plans%20for%20Material%20Investments%20and%20Capital%20Assets) Except as disclosed under "Material Events During the Period" in this announcement, the Group has no other plans for material investments and capital assets for the year ending December 31, 2025 - Except as disclosed under "Material Events During the Period" in this announcement, as of the date of this announcement, the Group has no other plans for material investments and capital assets for the year ending December 31, 2025[63](index=63&type=chunk) [Contingent Liabilities](index=26&type=section&id=Contingent%20Liabilities) As of June 30, 2025, the Group had no significant contingent liabilities - As of June 30, 2025, and December 31, 2024, the Group had no significant contingent liabilities[64](index=64&type=chunk) [Capital Commitments](index=26&type=section&id=Capital%20Commitments) As of June 30, 2025, the Group had no significant capital commitments, compared to RM54.8 million as of December 31, 2024, for the acquisition of property, plant and equipment and investment properties - As of June 30, 2025, the Group had no significant capital commitments[65](index=65&type=chunk) - As of December 31, 2024, capital commitments were **RM0.3 million** for the acquisition of property, plant and equipment and **RM54.5 million** for investment properties[65](index=65&type=chunk) [Employees and Remuneration Policy](index=26&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the Group's employee count increased to 707, with staff costs for the period approximately RM26.2 million. The company is committed to providing competitive remuneration, performance evaluations, and diverse on-the-job training to foster employee development - As of June 30, 2025, the Group employed **707 employees** (June 30, 2024: **678 employees**)[66](index=66&type=chunk) - Staff costs for the period were approximately **RM26.2 million** (2024: approximately **RM27.1 million**)[66](index=66&type=chunk) - The Group is committed to ensuring employee salary levels are competitive with industry practices and current market conditions, determining remuneration based on performance, and providing diverse on-the-job training and development programs[66](index=66&type=chunk)[67](index=67&type=chunk) [Foreign Exchange Risk](index=27&type=section&id=Foreign%20Exchange%20Risk) The Group's production segment faces net US dollar exposure, with the depreciation and continued volatility of the US dollar against the Ringgit impacting revenue. The company is closely monitoring currency trends and considering forward contracts, hedging instruments, and negotiating pricing adjustments with customers to mitigate risks - The production segment's majority of US dollar revenue comes from international customers, and after offsetting US dollar-denominated purchases, the Group maintains a net US dollar exposure[69](index=69&type=chunk) - Since mid-April 2025, the US dollar has depreciated and remained volatile against the Ringgit, impacting the Group's profitability[70](index=70&type=chunk) - The Group is closely monitoring currency trends and considering entering into forward contracts or other hedging instruments, or negotiating pricing adjustments with customers to mitigate the impact of foreign exchange fluctuations[70](index=70&type=chunk) [Future Prospects and Outlook](index=28&type=section&id=Future%20Prospects%20and%20Outlook) In 2025, the global economy faces challenges such as inflation, interest rate volatility, and geopolitical tensions, with rising trade protectionism exacerbating supply chain pressures. The production segment, affected by a weaker US dollar and subdued demand, is adjusting its strategy; while the energy efficiency segment benefits from growing global energy demand and decarbonisation policies, showing strong momentum. The Group will address challenges through flexible management and a diversified business portfolio - In 2025, the global economy faces ongoing macroeconomic challenges, including inflationary pressures, an unstable interest rate environment, and geopolitical tensions, with increasing trade protectionism further disrupting global trade flows[71](index=71&type=chunk) - The production segment is affected by a weaker US dollar, currency volatility, subdued consumer demand, and inflationary cost pressures, leading the Group to realign market strategies, review pricing structures, and streamline cost structures[72](index=72&type=chunk) - The energy efficiency segment continues to demonstrate strong momentum, benefiting from rising global energy demand, government decarbonisation and energy saving policies, and corporate ESG commitments[73](index=73&type=chunk) [Business Activities in Sanctioned Countries](index=28&type=section&id=Business%20Activities%20in%20Sanctioned%20Countries) The Group has not entered into any transactions in sanctioned countries or with sanctioned persons during the period and has adopted risk management measures to continuously monitor and assess international sanction risks - The Group has not entered into any transactions during the period in countries or regions subject to certain economic sanctions under US, EU, UN, and Australian laws, or with certain individuals and entities listed on restricted persons lists[74](index=74&type=chunk) - The Group has established a Risk Management Committee responsible for monitoring management's activities in managing key risks and assessing sanction risks[75](index=75&type=chunk)[77](index=77&type=chunk) [Other Information](index=29&type=section&id=Other%20Information) [Corporate Governance Practices](index=29&type=section&id=Corporate%20Governance%20Practices) The company has complied with the code provisions set out in Appendix C1 of the GEM Listing Rules' Corporate Governance Code during the period and has established a Risk Management Committee to monitor key risks - The company has complied with the code provisions set out in Appendix C1 of the GEM Listing Rules' Corporate Governance Code during the period[76](index=76&type=chunk) - The Group has established a Risk Management Committee, comprising two independent non-executive directors and one executive director, responsible for monitoring risk management activities[77](index=77&type=chunk) [Directors' and Controlling Shareholder's Interests in Significant Contracts](index=30&type=section&id=Directors%27%20and%20Controlling%20Shareholder%27s%20Interests%20in%20Significant%20Contracts) Except as disclosed under "Material Events During the Period" in this announcement, neither the directors nor their associated entities, nor the controlling shareholder or its subsidiaries, had any direct or indirect material interest in any arrangement, transaction, or contract significant to the Group's business during the period - Except as disclosed under "Material Events During the Period" in this announcement, neither the directors nor their associated entities had any direct or indirect material interest in any arrangement, transaction, or contract significant to the Group's business during the period or subsisting at the end of the period[78](index=78&type=chunk) - Except as disclosed under "Material Events During the Period" in this announcement, no material arrangement, transaction, or contract was entered into between the company or any of its subsidiaries or fellow subsidiaries and the controlling shareholder or any of its subsidiaries during the period[78](index=78&type=chunk) [Non-Competition Undertaking](index=30&type=section&id=Non-Competition%20Undertaking) The controlling shareholder has provided a confirmation to the company, affirming compliance with the non-competition undertaking during the period, and independent non-executive directors also confirmed no non-compliance was found - The controlling shareholder has entered into a non-competition undertaking, committing not to engage in any business that competes or may compete with the Group's business in Malaysia, Vietnam, and/or any other country or jurisdiction where any member of the Group conducts business from time to time[79](index=79&type=chunk)[80](index=80&type=chunk) - The controlling shareholder has provided a confirmation to the company, confirming compliance with the non-competition undertaking during the period[81](index=81&type=chunk) - The independent non-executive directors have also confirmed that, after reasonable enquiry and review, no non-compliance by the controlling shareholder with the terms of the non-competition undertaking was found during the period[81](index=81&type=chunk) [Competing Interests of Directors, Controlling Shareholder and their Respective Close Associates](index=31&type=section&id=Competing%20Interests%20of%20Directors%2C%20Controlling%20Shareholder%20and%20their%20Respective%20Close%20Associates) During the period, other than the businesses operated by members of the Group, neither the directors nor the controlling shareholder or their respective close associates had any business or interest in any business that competes or is likely to compete, directly or indirectly, with the Group's business - During the period, other than the businesses operated by members of the Group, neither the directors nor the controlling shareholder or their respective close associates had any business or interest in any business that competes or is likely to compete, directly or indirectly, with the Group's business[82](index=82&type=chunk) [Material Events During the Period](index=32&type=section&id=Material%20Events%20During%20the%20Period) On February 7, 2025, the company completed the acquisition of 50 multi-storey residential units within the Picasso Residence development in Malaysia, allotting 321,756,000 new shares to PRG Holdings as consideration, increasing PRG Holdings' stake to 67.72% - On February 7, 2025, the company completed the purchase of **50 multi-storey residential units** within the Picasso Residence development in Malaysia[84](index=84&type=chunk) - **88%** of the total consideration was paid by allotting **321,756,000 ordinary shares** of the company to the vendor, PRG Holdings[84](index=84&type=chunk) - PRG Holdings' percentage of shareholding in the company increased from **50.45%** to **67.72%**[84](index=84&type=chunk) [Important Events Subsequent to 30 June 2025 and Up to the Date of this Announcement](index=32&type=section&id=Important%20Events%20Subsequent%20to%2030%20June%202025%20and%20Up%20to%20the%20Date%20of%20this%20Announcement) The Board is not aware of any important events subsequent to June 30, 2025, and up to the date of this announcement that require disclosure under the GEM Listing Rules - The Board is not aware of any important events subsequent to June 30, 2025, and up to the date of this announcement that require disclosure under the GEM Listing Rules[86](index=86&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%27s%20Listed%20Securities) Neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities during the period, and as of June 30, 2025, the company held no treasury shares - Neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities during the period[87](index=87&type=chunk) - As of June 30, 2025, the company held no treasury shares[87](index=87&type=chunk) [Directors' and Chief Executive's Interests in Securities of the Company and/or its Associated Corporations](index=33&type=section&id=Directors%27%20and%20Chief%20Executive%27s%20Interests%20in%20Securities%20of%20the%20Company%20and%2For%20its%20Associated%20Corporations) As of June 30, 2025, directors and the chief executive held interests in the securities of the company and/or its associated corporations, with Kang Boon Lian holding 0.02% of the company's shares, and several directors also holding shares or share options in associated corporation PRG Holdings [(1) Interests in Ordinary Shares of HK$0.10 Each of the Company ("Shares") (Long Position)](index=33&type=section&id=%281%29%20Interests%20in%20Ordinary%20Shares%20of%20HK%240.10%20Each%20of%20the%20Company%20%28%22Shares%22%29%20%28Long%20Position%29) As of June 30, 2025, Director Kang Boon Lian beneficially owned 200,000 shares of the company, representing 0.02% of the issued shares | Director's Name | Capacity/Nature of interest | Number of securities | Approximate percentage of shareholding | | :--- | :--- | :--- | :--- | | Kang Boon Lian | Beneficial owner | 200,000 shares (L) | 0.02% | - The percentage of shareholding is calculated based on the company's **923,321,600 issued shares** as of June 30, 2025[91](index=91&type=chunk) [(2) Interests in Ordinary Shares and/or Related Shares of Associated Corporations (Long Position)](index=34&type=section&id=%282%29%20Interests%20in%20Ordinary%20Shares%20and%2For%20Related%20Shares%20of%20Associated%20Corporations%20%28Long%20Position%29) As of June 30, 2025, several directors held shares in PRG Holdings, an associated corporation of the company, with Tan Chuan Dyi holding 0.42% of PRG Holdings' shares and share options | Director's Name | Name of Associated Corporation | Capacity/Nature of interest | Number of related shares held | Approximate percentage of shareholding | | :--- | :--- | :--- | :--- | :--- | | Dato' Lim Heen Peok | PRG Holdings | Beneficial owner | 108,800 shares (L) | 0.02% | | Kang Boon Lian | PRG Holdings | Beneficial owner | 664,880 shares (L) | 0.14% | | Tan Chuan Dyi | PRG Holdings | Beneficial owner | 721,388 shares (L) (including 1,309,081 share options) | 0.42% | - PRG Holdings is the company's holding company and an associated corporation[93](index=93&type=chunk) [Major Shareholders' Interests in Securities of the Company](index=35&type=section&id=Major%20Shareholders%27%20Interests%20in%20Securities%20of%20the%20Company) As of June 30, 2025, PRG Holdings held 67.72% of the company's shares, Chan Ka Man held 5.70% of shares and a 0.41% spouse's interest, and Ng Yan Cheng held 7.22% of shares, all being major shareholders Major Shareholders' Interests in Shares and Underlying Shares (Long and Short Positions) | Shareholder's Name | Capacity/Nature of interest | Number of securities | Approximate percentage of shareholding | | :--- | :--- | :--- | :--- | | PRG Holdings | Beneficial owner | 625,224,000 shares (L) | 67.72% | | Chan Ka Man | Beneficial owner | 52,612,000 shares (L) | 5.70% | | | Interest of spouse | 3,796,000 shares (L) | 0.41% | | Ng Yan Cheng | Beneficial owner | 66,693,600 shares (L) | 7.22% | - PRG Holdings is a public limited company incorporated in Malaysia, with its issued shares listed on the Main Market of Bursa Malaysia Securities Berhad[97](index=97&type=chunk) - The percentage of shareholding is calculated based on the company's **923,321,600 issued shares** as of June 30, 2025[97](index=97&type=chunk)[100](index=100&type=chunk) [Directors' Securities Transactions](index=36&type=section&id=Directors%27%20Securities%20Transactions) The company has adopted the required standard of dealings set out in the GEM Listing Rules as its code for securities transactions. Following specific enquiries, all directors confirmed compliance with the standard during the period, with no non-compliance - The company has adopted the required standard of dealings as set out in Rules 5.48 to 5.67 of the GEM Listing Rules as its own code for securities transactions[98](index=98&type=chunk) - Following specific enquiries made by the company to all directors, all directors have confirmed their compliance with the required standard of dealings during the period, with no non-compliance[98](index=98&type=chunk) [Review of Financial Statements](index=36&type=section&id=Review%20of%20Financial%20Statements) The company's Audit Committee has reviewed the Group's unaudited condensed consolidated results for the period, confirming their preparation in compliance with applicable accounting standards, GEM Listing Rules, and other relevant legal requirements, with adequate disclosures made - The Audit Committee currently comprises four independent non-executive directors, with Mr. Ho Ming Hon serving as the Chairman of the Audit Committee[99](index=99&type=chunk) - The Audit Committee has reviewed the Group's unaudited condensed consolidated results for the period and discussed accounting principles and practices with management[100](index=100&type=chunk) - The Audit Committee is of the opinion that the results have been prepared in compliance with applicable accounting standards, the requirements under the GEM Listing Rules, and other applicable legal requirements, and that adequate disclosures have been made[100](index=100&type=chunk)

[2025 Interim Results Highlights](index=1&type=section&id=2025%E5%B9%B4%E4%B8%AD%E6%9C%9F%E6%A5%AD%E7%B8%BE%E6%91%98%E8%A6%81) Weilong Delicious Global Holdings Ltd. reported interim results for H1 2025, with total revenue and profit for the period both growing by 18.5%, while gross profit margin slightly decreased to 47.2% Key Interim Financial Data for H1 2025 | Metric | Six Months Ended June 30, 2025 (RMB million) | YoY Change | | :--- | :--- | :--- | | Total Revenue | 3,482.9 | +18.5% | | Gross Profit | 1,642.4 | +12.3% | | Gross Profit Margin | 47.2% | -2.6 percentage points | | Profit for the Period | 736.2 | +18.5% | | Basic Earnings Per Share | 0.31 yuan | +14.8% | | Interim Dividend | 0.18 yuan per share | N/A | [Interim Condensed Consolidated Financial Statements](index=2&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E5%90%88%E4%BD%B5%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8) This section presents the interim condensed consolidated financial statements, including the statement of profit or loss, comprehensive income, and financial position [Interim Condensed Consolidated Statement of Profit or Loss](index=2&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E5%90%88%E4%BD%B5%E6%90%8D%E7%9B%8A%E8%A1%A8) For the six months ended June 30, 2025, the company's revenue grew by 18.5% to RMB 3,482,935 thousand, with profit for the period reaching RMB 736,204 thousand Key Data from Interim Condensed Consolidated Statement of Profit or Loss | Metric | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Revenue from contracts with customers | 3,482,935 | 2,938,649 | | Cost of sales | (1,840,519) | (1,476,364) | | Gross Profit | 1,642,416 | 1,462,285 | | Operating Profit | 948,518 | 784,880 | | Profit before income tax | 1,028,481 | 872,558 | | Profit for the Period | 736,204 | 621,200 | | Basic earnings per share (RMB yuan) | 0.31 | 0.27 | [Interim Condensed Consolidated Statement of Comprehensive Income](index=3&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E5%90%88%E4%BD%B5%E7%B6%9C%E5%90%88%E6%94%B6%E7%9B%8A%E8%A1%A8) For the six months ended June 30, 2025, profit for the period was RMB 736,204 thousand, with total comprehensive income reaching RMB 690,230 thousand Key Data from Interim Condensed Consolidated Statement of Comprehensive Income | Metric | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Profit for the Period | 736,204 | 621,200 | | Exchange differences on translation of foreign operations | 13,747 | (2,485) | | Exchange differences on translation of the Company | (59,721) | 11,171 | | Total comprehensive income for the period | 690,230 | 629,886 | [Interim Condensed Consolidated Statement of Financial Position](index=4&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E5%90%88%E4%BD%B5%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) As of June 30, 2025, total assets reached RMB 9,556,540 thousand, a 16.8% increase from year-end 2024, driven by a 49.9% rise in current assets Key Data from Interim Condensed Consolidated Statement of Financial Position | Metric | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | Change Rate | | :--- | :--- | :--- | :--- | | Total assets | 9,556,540 | 8,182,413 | +16.8% | | Total non-current assets | 4,248,720 | 4,662,715 | -8.9% | | Total current assets | 5,307,820 | 3,519,698 | +49.9% | | Total liabilities | 2,491,941 | 2,175,983 | +14.5% | | Total non-current liabilities | 269,558 | 475,972 | -43.4% | | Total current liabilities | 2,222,383 | 1,700,011 | +30.7% | | Net assets | 7,064,599 | 6,006,430 | +17.6% | [Notes to the Interim Condensed Consolidated Financial Statements](index=6&type=section&id=%E7%B0%A1%E6%98%8E%E5%90%88%E4%BD%B5%E5%A0%B1%E8%A1%A8%E9%99%84%E8%A8%BB) This section provides explanatory notes to the interim condensed consolidated financial statements [1. Basis of Preparation](index=6&type=section&id=1.%20%E7%B7%A8%E8%A3%BD%E5%9F%BA%E6%BA%96) The interim condensed consolidated financial information is prepared in RMB under IAS 34 and should be read with the annual consolidated financial statements - Financial information is prepared in accordance with **IAS 34**, presented in **RMB**, and serves as supplementary reading material to the annual financial statements[9](index=9&type=chunk) [2. Changes in Accounting Policies](index=6&type=section&id=2.%20%E6%9C%83%E8%A8%88%E6%94%BF%E7%AD%96%E7%9A%84%E8%AE%8A%E5%8B%95) The adoption of revised IFRS accounting standards, specifically IAS 21 (amended) on lack of exchangeability, had no impact on the interim financial information - The new accounting policy under **IAS 21 (amended)** regarding lack of exchangeability has **no impact** on the Group's financial information, as its transaction currencies are all convertible[10](index=10&type=chunk)[11](index=11&type=chunk) [3. Segment Information](index=7&type=section&id=3.%20%E5%88%86%E9%83%A8%E8%B3%87%E6%96%99) The Group primarily operates in the spicy snack food sector in China, with three reportable segments assessed by gross profit, and vegetable products showing significant revenue growth - The Group primarily operates in **spicy snack foods** with business concentrated in **China**, divided into three operating segments, and uses **gross profit** as the performance evaluation standard[12](index=12&type=chunk)[13](index=13&type=chunk) Revenue and Gross Profit by Product Category | Product Category | 2025 Revenue (RMB thousand) | 2025 Gross Profit (RMB thousand) | 2024 Revenue (RMB thousand) | 2024 Gross Profit (RMB thousand) | | :--- | :--- | :--- | :--- | :--- | | Seasoned Flour Products | 1,309,964 | 633,449 | 1,353,826 | 647,804 | | Vegetable Products | 2,108,786 | 981,780 | 1,461,256 | 768,343 | | Other Products | 64,185 | 27,187 | 123,567 | 46,138 | | Total | 3,482,935 | 1,642,416 | 2,938,649 | 1,462,285 | External Customer Revenue by Customer Location | Region | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | China | 3,429,466 | 2,904,025 | | Overseas | 53,469 | 34,624 | | Total | 3,482,935 | 2,938,649 | - As of June 30, 2025, sales revenue to a major third-party customer was **RMB 389.6 million**, accounting for approximately **11% of total revenue**, while no single customer exceeded 10% in the prior period[18](index=18&type=chunk) [4. Cost of Sales, Distribution and Selling Expenses, and Administrative Expenses](index=9&type=section&id=4.%20%E9%8A%B7%E8%B2%A8%E6%88%90%E6%9C%AC%E3%80%81%E7%B6%93%E9%8A%B7%E5%8F%8A%E9%8A%B7%E5%94%AE%E8%B2%BB%E7%94%A8%E5%8F%8A%E7%AE%A1%E7%90%86%E8%B2%BB%E7%94%A8%E7%B8%BD%E9%A1%8D) For the six months ended June 30, 2025, total cost of sales, distribution, selling, and administrative expenses increased by 17.1% to RMB 2,568,890 thousand Major Expense Components | Expense Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Raw material consumption | 1,372,274 | 1,147,250 | | Employee benefit expenses | 532,388 | 540,127 | | Transportation expenses | 109,334 | 92,966 | | Promotion and advertising expenses | 161,255 | 120,263 | | Total | 2,568,890 | 2,194,122 | [5. Income Tax Expense](index=9&type=section&id=5.%20%E6%89%80%E5%BE%97%E7%A8%85%E8%B2%BB%E7%94%A8) For the six months ended June 30, 2025, income tax expense increased by 16.3% to RMB 292,277 thousand, primarily due to higher current tax on profit Composition of Income Tax Expense | Tax Type | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Current tax on profit for the period | 277,576 | 212,673 | | Total deferred tax expense | 14,701 | 38,685 | | Income tax expense | 292,277 | 251,358 | [6. Earnings Per Share](index=10&type=section&id=6.%20%E6%AF%8F%E8%82%A1%E7%9B%88%E5%88%A9) For the six months ended June 30, 2025, both basic and diluted earnings per share increased to RMB 0.31, with a weighted average of 2,338,730 thousand ordinary shares outstanding Earnings Per Share Data | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Profit attributable to owners of the Company (RMB thousand) | 733,019 | 621,200 | | Weighted average number of ordinary shares in issue (thousand shares) | 2,338,730 | 2,312,489 | | Basic earnings per share (RMB yuan) | 0.31 | 0.27 | | Diluted earnings per share (RMB yuan) | 0.31 | 0.27 | - As of June 30, 2025, a total of **10,805,243 restricted share units** were vested and included in the basic earnings per share calculation[25](index=25&type=chunk) [7. Dividends](index=11&type=section&id=7.%20%E8%82%A1%E6%81%AF) For the six months ended June 30, 2025, the Board resolved to declare an interim dividend of RMB 0.18 per share, totaling approximately RMB 437,606 thousand, representing about 60% of net profit Dividends Declared and Paid | Dividend Type | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Final and special dividends declared | 705,032 | 493,741 | | 2025 Interim dividend (per share) | 0.18 yuan (Total approx. 437,606 thousand) | N/A | [8. Trade and Other Receivables and Prepayments](index=11&type=section&id=8.%20%E8%B2%BF%E6%98%93%E5%8F%8A%E5%85%B6%E4%BB%96%E6%87%89%E6%94%B6%E6%AC%BE%E9%A0%85%E5%8F%8A%E9%A0%90%E4%BB%98%E6%AC%BE%E9%A0%85) As of June 30, 2025, trade receivables increased to RMB 73,390 thousand, primarily from credit sales, while prepayments decreased by 8.8% due to reduced input VAT Trade and Other Receivables and Prepayments | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Trade receivables | 73,390 | 52,838 | | Other receivables | 7,201 | 8,695 | | Prepayments | 174,943 | 191,820 | | Total | 255,534 | 253,353 | Ageing Analysis of Trade Receivables | Ageing | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within 90 days | 69,808 | 47,392 | | 91 to 180 days | 3,587 | 5,451 | | Total | 73,395 | 52,843 | [9. Trade and Other Payables](index=12&type=section&id=9.%20%E8%B2%BF%E6%98%93%E5%8F%8A%E5%85%B6%E4%BB%96%E6%87%89%E4%BB%98%E6%AC%BE%E9%A0%85) As of June 30, 2025, trade payables slightly decreased to RMB 205,243 thousand, while other payables, including salaries and deposits, totaled RMB 547,988 thousand Trade and Other Payables | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Trade payables | 205,243 | 212,614 | | Other payables | 547,988 | 614,013 | | Total | 753,231 | 826,627 | Ageing Analysis of Trade Payables | Ageing | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within 90 days | 205,243 | 212,614 | [10. Events After the Reporting Period](index=13&type=section&id=10.%20%E5%A0%B1%E5%91%8A%E6%9C%9F%E5%BE%8C%E7%9A%84%E4%BA%8B%E4%BB%B6) On August 14, 2025, the Board resolved to declare an interim dividend of RMB 0.18 per share for H1 2025, totaling approximately RMB 437,606 thousand - The Board resolved on August 14, 2025, to declare an interim dividend of **RMB 0.18 per share**, totaling approximately **RMB 437.6 million**, representing about **60% of net profit**[33](index=33&type=chunk) [Management Discussion and Analysis](index=14&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%A4%E8%A8%8E%E8%AB%96%E8%88%87%E5%88%86%E6%9E%90) This section provides an overview and analysis of the Group's business and financial performance [Macroeconomic and Industry Environment](index=14&type=section&id=%E5%AE%8F%E8%A7%80%E5%8F%8A%E8%A1%8C%E6%A5%AD%E7%92%B0%E5%A2%83) In H1 2025, China's economy grew steadily with GDP up 5.3%, while the snack food market saw robust growth, driven by evolving consumer preferences and channel restructuring - In H1 2025, China's GDP grew by **5.3% year-on-year**, demonstrating strong resilience in the real economy and sustained recovery momentum in the consumer market[34](index=34&type=chunk) - China's snack food market experienced **steady growth**, with Chinese spicy snack foods holding a significant position, as consumer demand shifts towards **diversification and personalization**, emphasizing nutrition, convenience, packaging, and brand[36](index=36&type=chunk)[37](index=37&type=chunk) - Retail channels are undergoing multiple changes, with the rise of snack bulk stores, warehouse membership supermarkets, and emerging channels like O2O and community group buying, driving the industry into an **omnichannel integration and restructuring cycle**[37](index=37&type=chunk) [Business Review](index=15&type=section&id=%E6%A5%AD%E5%8B%99%E5%9B%9E%E9%A1%A7) The Group continued its mission to transform traditional Chinese cuisine into accessible snack foods, focusing on innovation, consumer insights, and R&D, while enhancing brand image through collaborations and endorsements - The Group continues to uphold its mission of 'making the world fall in love with Chinese flavors,' dedicated to transforming traditional Chinese cuisine into snack foods[39](index=39&type=chunk) - The Group focuses on **innovation**, deeply understands consumer needs, strengthens R&D capabilities, and adheres to a **multi-category product strategy**, enriching its product portfolio across new products, flavors, processes, and packaging[40](index=40&type=chunk) - Through co-branding with partners like **KFC** and **Linli Lemon Tea**, and announcing **Wang Anyu** as the spokesperson for konjac products, the Group deepens its youthful and engaging brand image, effectively reaching younger demographics[41](index=41&type=chunk) [Our Products](index=16&type=section&id=%E6%88%91%E5%80%91%E7%9A%84%E7%94%A2%E5%93%81) As a leader in China's spicy snack food industry, the Group maintains a multi-category strategy, with vegetable products revenue growing by 44.3% to account for 60.5% of total revenue - The Group is a leader in China's **spicy snack food industry**, with products covering **seasoned flour products, vegetable products, bean products, and other products**[44](index=44&type=chunk) - During the reporting period, the Group launched **sesame paste flavored konjac snacks** and **spicy beef flavored Qinzhishao**, responding to consumer demand with innovative flavors[45](index=45&type=chunk)[46](index=46&type=chunk) Revenue Breakdown by Product Category | Product Category | 2025 (RMB thousand) | % of Total Revenue (2025) | 2024 (RMB thousand) | % of Total Revenue (2024) | | :--- | :--- | :--- | :--- | :--- | | Seasoned Flour Products | 1,309,964 | 37.6% | 1,353,826 | 46.1% | | Vegetable Products | 2,108,786 | 60.5% | 1,461,256 | 49.7% | | Bean Products and Other Products | 64,185 | 1.9% | 123,567 | 4.2% | | Total | 3,482,935 | 100.0% | 2,938,649 | 100.0% | - Revenue from **vegetable products** increased by **44.3% year-on-year** to **RMB 2,108.8 million**, raising its share of total revenue from 49.7% to **60.5%**, driven by product innovation, expanded capacity, and omnichannel development[47](index=47&type=chunk) [Our Customers and Sales Channels](index=18&type=section&id=%E6%88%91%E5%80%91%E7%9A%84%E5%AE%A2%E6%88%B6%E5%8F%8A%E9%8A%B7%E5%94%AE%E6%B8%A0%E9%81%93) The Group's customers are primarily online and offline distributors and direct sales clients, with offline channel revenue growing by 21.5% to RMB 3,147.2 million, while online direct sales increased by 7.3% - As of June 30, 2025, the Group collaborated with **1,777 offline distributors**, serving national or regional supermarkets, snack bulk stores, and convenience stores[48](index=48&type=chunk) - The Group actively builds an **online omni-platform ecosystem**, cultivating traditional e-commerce platforms like Tmall, JD, and Pinduoduo, while expanding into content and social e-commerce platforms such as Douyin, Kuaishou, and Xiaohongshu to reach younger demographics through short videos and live streaming[49](index=49&type=chunk) Revenue Breakdown by Sales Channel | Sales Channel | 2025 (RMB thousand) | % of Total Revenue (2025) | 2024 (RMB thousand) | % of Total Revenue (2024) | | :--- | :--- | :--- | :--- | :--- | | Offline Channels | 3,147,223 | 90.4% | 2,589,623 | 88.1% | | Online Channels | 335,712 | 9.6% | 349,026 | 11.9% | | - Online Distribution | 107,762 | 3.1% | 136,589 | 4.7% | | - Online Direct Sales | 227,950 | 6.5% | 212,437 | 7.2% | | Total | 3,482,935 | 100.0% | 2,938,649 | 100.0% | - Offline channel revenue increased by **21.5% year-on-year**, raising its share of total revenue to **90.4%**; online channel revenue decreased by **3.8%**, with online distribution revenue falling by **21.1%** and online direct sales revenue growing by **7.3%**[50](index=50&type=chunk)[51](index=51&type=chunk) Offline Channel Revenue Contribution by Region | Region | 2025 (RMB thousand) | % of Total Offline Revenue (2025) | 2024 (RMB thousand) | % of Total Offline Revenue (2024) | | :--- | :--- | :--- | :--- | :--- | | East China | 746,130 | 23.7% | 607,284 | 23.5% | | Central China | 481,596 | 15.3% | 419,790 | 16.2% | | North China | 420,960 | 13.4% | 370,777 | 14.3% | | South China | 637,576 | 20.3% | 473,598 | 18.3% | | Southwest China | 406,419 | 12.9% | 346,359 | 13.4% | | Northwest China | 401,073 | 12.7% | 337,191 | 13.0% | | Overseas | 53,469 | 1.7% | 34,624 | 1.3% | | Total | 3,147,223 | 100% | 2,589,623 | 100.0% | [Our Production Facilities and Capacity](index=20&type=section&id=%E6%88%91%E5%80%91%E7%9A%84%E7%94%A2%E7%94%9F%E8%A8%AD%E6%96%BD%E5%8F%8A%E7%94%A2%E8%83%BD) The Group continues to advance automation and digitalization in its five Henan factories, with plans for a new factory in Nanning, Guangxi, and overall capacity utilization increased to 79.0% - The Group continuously advances the **automation, lean management, and digitalization** of its production facilities to enhance efficiency and product quality[54](index=54&type=chunk) - As of June 30, 2025, the Group operates **five factories in Henan Province** and signed an agreement on April 22, 2025, to plan a new factory in **Nanning, Guangxi**, to support business expansion[54](index=54&type=chunk) Capacity Utilization Rate by Product Category | Product Category | 2025 Designed Capacity (tons) | 2025 Actual Output (tons) | 2025 Capacity Utilization Rate | 2024 Designed Capacity (tons) | 2024 Actual Output (tons) | 2024 Capacity Utilization Rate | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Seasoned Flour Products | 81,317.1 | 65,711.7 | 80.8% | 117,106.9 | 66,112.3 | 56.5% | | Vegetable Products | 94,734.0 | 73,433.1 | 77.5% | 59,406.0 | 50,445.0 | 84.9% | | Bean Products and Other Products | 2,619.1 | 1,982.9 | 75.7% | 2,777.6 | 2,639.3 | 95.0% | | Total | 178,670.2 | 141,127.7 | 79.0% | 179,290.5 | 119,196.6 | 66.5% | - Overall capacity utilization rate increased from **66.5%** in the prior period to **79.0%**, primarily due to sales growth; seasoned flour products saw a decrease in designed capacity, while vegetable products saw an increase, reflecting product line adjustments[56](index=56&type=chunk)[57](index=57&type=chunk) [Our Food Safety and Quality Control](index=22&type=section&id=%E6%88%91%E5%80%91%E7%9A%84%E9%A3%9F%E5%93%81%E5%AE%89%E5%85%A8%E5%92%8C%E5%93%81%E8%B3%AA%E6%8E%A7%E5%88%B6) The Group prioritizes food safety as its lifeline, continuously enhancing its management system from raw materials to production, and actively pursuing R&D for healthier snacks - The Group regards **food safety as its lifeline**, strictly controlling the entire process from raw materials to production to ensure product quality and safety[58](index=58&type=chunk) - Actively promotes **innovative R&D** to offer healthier and more delicious snack foods, aiming to win market trust and support[58](index=58&type=chunk) [Our R&D Capabilities](index=22&type=section&id=%E6%88%91%E5%80%91%E7%9A%84%E7%A0%94%E7%99%BC%E8%83%BD%E5%8A%9B) Adhering to an industrial R&D philosophy, the Group continuously invests in food texture, flavor, sterilization, and preservation technologies, while collaborating with top universities to strengthen its R&D advantages - The Group continuously increases **R&D investment**, focusing on key areas such as food texture, flavor, sterilization, and preservation technologies, and actively promotes new product reserve R&D[59](index=59&type=chunk) - Collaborates with top domestic universities to establish a **food engineering technology research center** and assemble multi-disciplinary professional research teams, solidifying its leading position in product and technology R&D[60](index=60&type=chunk) [Our Information Technology](index=22&type=section&id=%E6%88%91%E5%80%91%E7%9A%84%E4%BF%A1%E6%81%AF%E6%8A%80%E8%A1%93) During the reporting period, the Group advanced its digital transformation strategy, strengthening infrastructure to optimize procurement, sales, and production processes, enhancing operational efficiency and delivery - The Group continuously advances **digital transformation**, strengthening digital infrastructure to effectively monitor and optimize procurement, sales, and production processes[61](index=61&type=chunk) - Strengthens sales management systems and optimizes **AGV automated transport processes** to enhance business expansion, store coverage, operational efficiency, and delivery fulfillment[62](index=62&type=chunk) [Financial Review](index=23&type=section&id=%E8%B2%A1%E5%8B%99%E5%9B%9E%E9%A1%A7) This section reviews financial performance, including revenue, gross profit, expenses, net profit, and liquidity, noting 18.5% growth in revenue and net profit, with a slight gross margin decline [Revenue and Gross Profit](index=23&type=section&id=%E6%94%B6%E5%85%A5%E5%8F%8A%E6%AF%9B%E5%88%A9) Total revenue for the period increased by 18.5% to RMB 3,482.9 million, while gross profit grew by 12.3% to RMB 1,642.4 million, despite a 2.6 percentage point drop in gross profit margin Revenue and Gross Profit Performance | Metric | 2025 (RMB million) | 2024 (RMB million) | YoY Change | | :--- | :--- | :--- | :--- | | Total Revenue | 3,482.9 | 2,938.6 | +18.5% | | Gross Profit | 1,642.4 | 1,462.3 | +12.3% | | Gross Profit Margin | 47.2% | 49.8% | -2.6 percentage points | [Distribution and Selling Expenses](index=23&type=section&id=%E7%B6%93%E9%8A%B7%E5%8F%8A%E9%8A%B7%E5%94%AE%E8%B2%BB%E7%94%A8) Distribution and selling expenses increased by 10.9% to RMB 527.2 million, decreasing as a percentage of total revenue from 16.2% to 15.1% Distribution and Selling Expenses | Metric | 2025 (RMB million) | 2024 (RMB million) | YoY Change | % of Total Revenue (2025) | % of Total Revenue (2024) | | :--- | :--- | :--- | :--- | :--- | :--- | | Distribution and selling expenses | 527.2 | 475.5 | +10.9% | 15.1% | 16.2% | [Administrative Expenses](index=23&type=section&id=%E7%AE%A1%E7%90%86%E8%B2%BB%E7%94%A8) Administrative expenses decreased by 17.0% year-on-year to RMB 201.1 million, reducing their proportion of total revenue from 8.2% to 5.8% Administrative Expenses | Metric | 2025 (RMB million) | 2024 (RMB million) | YoY Change | % of Total Revenue (2025) | % of Total Revenue (2024) | | :--- | :--- | :--- | :--- | :--- | :--- | | Administrative expenses | 201.1 | 242.3 | -17.0% | 5.8% | 8.2% | [Other Net Income](index=24&type=section&id=%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5%E6%B7%A8%E9%A1%8D) Other net income for the reporting period was RMB 34.7 million, representing a year-on-year decrease of 21.8% Other Net Income | Metric | 2025 (RMB million) | 2024 (RMB million) | YoY Change | | :--- | :--- | :--- | :--- | | Other net income | 34.7 | 44.4 | -21.8% | [Net Finance Income](index=24&type=section&id=%E8%9E%8D%E8%B3%87%E6%94%B6%E5%85%A5%E6%B7%A8%E9%A1%8D) Net finance income decreased by 8.8% year-on-year to RMB 80.0 million, primarily due to a reduction in bank interest Net Finance Income | Metric | 2025 (RMB million) | 2024 (RMB million) | YoY Change | | :--- | :--- | :--- | :--- | | Net finance income | 80.0 | 87.7 | -8.8% | [Income Tax Expense](index=24&type=section&id=%E6%89%80%E5%BE%97%E7%A8%85%E8%B2%BB%E7%94%A8) Income tax expense increased by 16.3% year-on-year to RMB 292.3 million, primarily driven by an increase in taxable income Income Tax Expense | Metric | 2025 (RMB million) | 2024 (RMB million) | YoY Change | | :--- | :--- | :--- | :--- | | Income tax expense | 292.3 | 251.4 | +16.3% | [Profit for the Period](index=24&type=section&id=%E6%9C%9F%E5%85%A7%E5%88%A9%E6%BD%A4) Net profit for the period increased by 18.5% year-on-year to RMB 736.2 million, with the net profit margin maintained at 21.1%, reflecting improved operating profit Profit for the Period | Metric | 2025 (RMB million) | 2024 (RMB million) | YoY Change | Net Profit Margin (2025) | Net Profit Margin (2024) | | :--- | :--- | :--- | :--- | :--- | :--- | | Net profit for the period | 736.2 | 621.2 | +18.5% | 21.1% | 21.1% | [Dividends](index=24&type=section&id=%E8%82%A1%E6%81%AF) The Board resolved to declare an interim dividend of RMB 0.18 per share for H1 2025, totaling approximately RMB 437.6 million, representing about 60% of net profit - The Board resolved to declare an interim dividend of **RMB 0.18 per share**, totaling approximately **RMB 437.6 million**, representing about **60% of net profit**[70](index=70&type=chunk) [Fixed Deposits with Initial Term Over Three Months, Cash and Cash Equivalents, and Borrowings](index=24&type=section&id=%E5%88%9D%E5%A7%8B%E6%9C%9F%E9%99%90%E7%82%BA%E4%B8%89%E5%80%8B%E6%9C%88%E4%BB%A5%E4%B8%8A%E7%9A%84%E5%AE%9A%E6%9C%9F%E5%AD%98%E6%AC%BE%E3%80%81%E7%8F%BE%E9%87%91%E5%8F%8A%E7%8F%BE%E9%87%91%E7%AD%89%E5%83%B9%E7%89%A9%E5%8F%8A%E5%80%9F%E6%AC%BE) As of June 30, 2025, total fixed deposits and cash equivalents increased by 24.0% to RMB 6,529.9 million, while total borrowings reached RMB 1,176.2 million Cash and Borrowings | Metric | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | Change Rate | | :--- | :--- | :--- | :--- | | Total fixed deposits and cash equivalents | 6,529.9 | 5,267.5 | +24.0% | | Total borrowings | 1,176.2 | 389.0 | +202.4% | [Inventories](index=25&type=section&id=%E5%AD%98%E8%B2%A8) Inventories decreased by 3.1% to RMB 851.2 million from year-end, while inventory turnover days increased from 73 to 85, mainly due to increased raw material reserves Inventories and Turnover Days | Metric | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | Change Rate | | :--- | :--- | :--- | :--- | | Inventories | 851.2 | 878.3 | -3.1% | | Inventory turnover days | 85 days | 73 days | +12 days | [Trade and Other Receivables and Prepayments](index=25&type=section&id=%E8%B2%BF%E6%98%93%E5%8F%8A%E5%85%B6%E4%BB%96%E6%87%89%E6%94%B6%E6%AC%BE%E9%A0%85%E5%8F%8A%E9%A0%90%E4%BB%98%E6%AC%BE%E9%A0%85) Trade receivables increased by 39.0% to RMB 73.4 million, with turnover days rising to 3.3; other receivables and prepayments decreased by 17.2% and 8.8% respectively Receivables and Prepayments | Metric | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | Change Rate | | :--- | :--- | :--- | :--- | | Trade receivables | 73.4 | 52.8 | +39.0% | | Trade receivables turnover days | 3.3 days | 3.0 days | +0.3 days | | Other receivables | 7.2 | 8.7 | -17.2% | | Prepayments | 174.9 | 191.8 | -8.8% | [Trade and Other Payables](index=25&type=section&id=%E8%B2%BF%E6%98%93%E5%8F%8A%E5%85%B6%E4%BB%96%E6%87%89%E4%BB%98%E6%AC%BE%E9%A0%85) Trade payables decreased by 3.5% to RMB 205.2 million, with turnover days reducing to 20.5, while other payables decreased by 10.7% to RMB 548.0 million Payables | Metric | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | Change Rate | | :--- | :--- | :--- | :--- | | Trade payables | 205.2 | 212.6 | -3.5% | | Trade payables turnover days | 20.5 days | 21.2 days | -0.7 days | | Other payables | 548.0 | 614.0 | -10.7% | [Contract Liabilities and Refund Liabilities](index=25&type=section&id=%E5%90%88%E5%90%8C%E8%B2%A0%E5%82%B5%E5%8F%8A%E9%80%80%E6%AC%BE%E8%B2%A0%E5%82%B5) Contract liabilities and refund liabilities decreased by 59.1% to RMB 244.3 million, primarily due to a high base from increased Chinese New Year orders in the prior year-end Contract Liabilities and Refund Liabilities | Metric | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | Change Rate | | :--- | :--- | :--- | :--- | | Contract liabilities and refund liabilities | 244.3 | 597.3 | -59.1% | [Capital Gearing Ratio](index=25&type=section&id=%E8%B3%87%E6%9C%AC%E8%B2%A0%E5%82%B5%E6%AF%94%E7%8E%87) As of June 30, 2025, the capital gearing ratio significantly increased to 16.6% from 6.5% at year-end, primarily reflecting higher total borrowings Capital Gearing Ratio | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Capital gearing ratio | 16.6% | 6.5% | [Treasury Policy](index=25&type=section&id=%E5%BA%AB%E5%8B%99%E6%94%BF%E7%AD%96) The Group adopts a conservative treasury policy, ensuring sufficient liquidity for operations and capital commitments, while regularly reviewing fund management to mitigate investment risks - The Group adopts a **conservative treasury policy**, ensuring **ample liquidity** and regularly reviewing fund management policies to mitigate investment risks[77](index=77&type=chunk) [Foreign Exchange Risk](index=26&type=section&id=%E5%A4%96%E5%8C%AF%E9%A2%A8%E9%9A%AA) Operating primarily in China with RMB-denominated transactions, the Group closely monitors and manages foreign exchange risks from overseas assets and liabilities denominated in HKD, USD, or IDR - The Group primarily operates in **China**, with most transactions settled in **RMB**, and closely monitors and manages foreign exchange risks associated with overseas assets and liabilities denominated in **HKD, USD, or IDR**[78](index=78&type=chunk) [Contingent Liabilities](index=26&type=section&id=%E6%88%96%E6%9C%89%E8%B2%A0%E5%82%B5) As of June 30, 2025, the Group had no significant contingent liabilities - As of June 30, 2025, the Group had **no significant contingent liabilities**[79](index=79&type=chunk) [Capital Commitments](index=26&type=section&id=%E8%B3%87%E6%9C%AC%E6%89%BF%E8%AB%BE) As of June 30, 2025, the Group's capital commitments totaled approximately RMB 183.0 million, primarily for property, plant, and equipment construction Capital Commitments | Metric | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | | :--- | :--- | :--- | | Capital commitments | 183.0 | 169.4 | [Pledge of Assets](index=26&type=section&id=%E8%B3%87%E7%94%A2%E6%8A%B5%E6%8A%BC) As of June 30, 2025, the Group had pledged certain land use rights valued at RMB 88.9 million Pledge of Assets | Metric | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | | :--- | :--- | :--- | | Pledged land use rights | 88.9 | 89.8 | [Material Investments, Acquisitions, and Disposals](index=26&type=section&id=%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B3%87%E3%80%81%E9%87%8D%E5%A4%A7%E6%94%B6%E8%B3%BC%E5%8F%8A%E5%87%BA%E5%94%AE%E4%BA%8B%E9%A0%85) During the reporting period, the Group held no material investments and undertook no significant acquisitions or disposals of subsidiaries, associates, or joint ventures - During the reporting period, the Group did not undertake any **material investments, acquisitions, or disposals**[82](index=82&type=chunk) [Future Material Investments or Capital Asset Plans](index=26&type=section&id=%E6%9C%AA%E4%BE%86%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B3%87%E6%88%96%E8%B3%87%E6%9C%AC%E8%B3%87%E7%94%A2%E8%A8%88%E5%8A%83) Beyond the prospectus-disclosed uses and a new snack food production base in Nanning, Guangxi, the Group currently has no plans for other material investments or capital assets - The Group plans to invest in building a **snack food production base in Nanning, Guangxi**, with no other material investment or capital asset plans beyond this[83](index=83&type=chunk) [Future Outlook](index=27&type=section&id=%E6%9C%AA%E4%BE%86%E5%B1%95%E6%9C%9B) The Group will deepen its multi-category strategy, enhance R&D, build a youthful brand image, advance omnichannel development, improve supply chain efficiency, and strengthen talent cultivation for sustainable growth - Regarding products, the Group will continue to deepen its **multi-category strategy**, strengthen R&D advantages, launch innovative products, and create more consumption scenarios through category synergy[84](index=84&type=chunk) - For branding, the Group will continue to build a **young, engaging, and creative brand image**, enhancing emotional connections with young consumers through cross-industry collaborations and integrated marketing activities[85](index=85&type=chunk) - In terms of channels, the Group will continue to advance **omnichannel development**, strengthen online-offline synergy, improve store-level execution, accelerate expansion into emerging channels, and reinforce operational strategies for traditional, content, and social e-commerce[86](index=86&type=chunk) - Continuously enhances **supply chain efficiency**, deepens automation and digitalization upgrades across key nodes like procurement, production, and logistics, comprehensively promotes digital transformation, and strengthens talent selection and development mechanisms[87](index=87&type=chunk) [Use of Proceeds from Listing](index=28&type=section&id=%E4%B8%8A%E5%B8%82%E6%89%80%E5%BE%97%E6%AC%BE%E9%A0%85%E7%94%A8%E9%80%94) This section details the utilization of proceeds obtained from the company's listing activities [Use of Net Proceeds from Initial Public Offering](index=28&type=section&id=%E9%A6%96%E6%AC%A1%E5%85%AC%E9%96%8B%E7%99%BC%E5%94%AE%E6%89%80%E5%BE%97%E6%AC%BE%E9%A0%85%E7%94%A8%E9%80%94) As of June 30, 2025, the company's net IPO proceeds of approximately HKD 903.3 million were fully utilized for production facilities, sales network expansion, brand building, R&D, and digitalization, with the Yunnan Qujing factory plan cancelled Use of Net Proceeds from Initial Public Offering | Intended Use | Net Proceeds Available (HKD million) | Net Amount Actually Used as of June 30, 2025 (HKD million) | | :--- | :--- | :--- | | Production facilities and supply chain system | 514.9 | 514.9 | | Expansion of sales and distribution network | 135.5 | 135.5 | | Brand building | 90.3 | 90.3 | | Product R&D activities and R&D capability enhancement | 90.3 | 90.3 | | Advancement of digitalization | 72.3 | 72.3 | | Total | 903.3 | 903.3 | - The **net proceeds from the IPO have been fully utilized**, with the expected usage timeline advanced, and the plan for a new factory in **Qujing, Yunnan, has been cancelled**[90](index=90&type=chunk) [Proceeds from Placing of Existing Shares and Top-up Subscription of New Shares under General Mandate](index=29&type=section&id=%E6%A0%B9%E6%93%9A%E4%B8%80%E8%88%AC%E6%8E%88%E6%AC%8A%E9%85%8D%E5%94%AE%E7%8F%BE%E6%9C%89%E8%82%A1%E4%BB%BD%E5%8F%8A%E8%A3%9C%E8%B6%B3%E8%AA%8D%E8%B3%BC%E6%96%B0%E8%82%A1%E4%BB%BD%E7%9A%84%E6%89%80%E5%BE%97%E6%AC%BE%E9%A0%85) In May 2025, the company completed a placing and subscription of 80,000,000 shares, generating net proceeds of approximately HKD 1,167.04 million, to be used over two years for production facilities, sales network, brand building, and general corporate purposes - In May 2025, the Company completed the placing and subscription of **80,000,000 shares**, generating net proceeds of approximately **HKD 1,167.04 million**, aimed at enhancing financial strength, market competitiveness, and overall capabilities[92](index=92&type=chunk)[93](index=93&type=chunk) Use of Net Proceeds from Placing and Subscription | Intended Use | Percentage of Proceeds | Net Proceeds Available (HKD million) | Net Amount Actually Used During Reporting Period (HKD million) | Net Amount Unutilized as of June 30, 2025 (HKD million) | Expected Timeline for Full Utilization of Net Proceeds | | :--- | :--- | :--- | :--- | :--- | :--- | | Expansion and upgrade of production facilities and supply chain system | 50% | 583.5 | 113.4 | 470.1 | 1-2 years | | Expansion of sales and distribution network | 20% | 233.4 | 56.2 | 177.2 | 1-2 years | | Brand building | 20% | 233.4 | 95.7 | 137.7 | 1-2 years | | Other general corporate purposes | 10% | 116.7 | 33.8 | 82.9 | 1-2 years | | Total | 100% | 1,167.0 | 299.1 | 867.9 | 1-2 years | - The intended use of net proceeds from the placing and subscription remains unchanged, with gradual utilization planned over the **next 2 years** based on actual business conditions[94](index=94&type=chunk) [Significant Events After Reporting Period](index=30&type=section&id=%E5%A0%B1%E5%91%8A%E6%9C%9F%E5%BE%8C%E9%87%8D%E5%A4%A7%E4%BA%8B%E9%A0%85) No other significant events occurred from June 30, 2025, up to the date of this announcement, apart from those already disclosed herein - No other **significant events** occurred after the reporting period[97](index=97&type=chunk) [Human Resources and Remuneration Policy](index=30&type=section&id=%E4%BA%BA%E5%8A%9B%E8%B3%87%E6%BA%90%E8%88%87%E9%85%AC%E9%87%91%E6%94%BF%E7%AD%96) As of June 30, 2025, the Group had 6,720 employees with total benefits of RMB 532.4 million, emphasizing talent development, competitive remuneration, and a restricted share unit plan for incentives Human Resources Overview | Metric | June 30, 2025 | | :--- | :--- | | Total number of employees | 6,720 | | Total employee benefits (RMB million) | 532.4 | - The Group's remuneration policy is determined based on regional salary levels, employee rank, performance, and market conditions, providing comprehensive benefits including **social insurance, housing provident fund, annual health checks, and holiday benefits**[99](index=99&type=chunk) - Introduces a **human resource management system** for systematic talent selection and assessment, emphasizes internal talent development, and establishes an online knowledge and information sharing platform, 'Sharing Hall,' to enhance organizational efficiency and employee capabilities[100](index=100&type=chunk)[101](index=101&type=chunk) - To incentivize employees, the Company has adopted a **restricted share unit scheme** with a ten-year validity period[102](index=102&type=chunk) [Interim Dividend](index=32&type=section&id=%E4%B8%AD%E6%9C%9F%E8%82%A1%E6%81%AF) On August 14, 2025, the Board resolved to declare an interim dividend of RMB 0.18 per share (tax inclusive), totaling approximately RMB 437.6 million, payable in HKD around October 20, 2025 - The Board resolved to declare an interim dividend of **RMB 0.18 per share (tax inclusive)**, totaling approximately **RMB 437.6 million**, with an expected payment date around **October 20, 2025**[104](index=104&type=chunk) - The dividend will be paid in **HKD**, amounting to **HKD 0.1980 per share (tax inclusive)**, with the exchange rate based on the PBOC's RMB to HKD central parity rate on the announcement date[104](index=104&type=chunk) [Closure of Register of Members](index=32&type=section&id=%E6%9A%AB%E5%81%9C%E8%BE%A6%E7%90%86%E8%82%A1%E4%BB%BD%E9%81%8E%E6%88%B6%E7%99%BB%E8%A8%98%E6%89%8B%E7%BA%8C) The company's share register will be closed from September 24 to September 26, 2025, to determine shareholders entitled to the interim dividend, with all transfer documents due by September 23 - The share transfer registration will be suspended from **September 24 to September 26, 2025**, with the record date set for **September 26, 2025**, to determine interim dividend entitlements[105](index=105&type=chunk) - All share transfer documents must be submitted to **Tricor Investor Services Limited** by **4:30 p.m. on September 23, 2025**[105](index=105&type=chunk) [Environmental, Social and Governance (ESG)](index=33&type=section&id=%E7%92%B0%E5%A2%83%E3%80%81%E7%A4%BE%E6%9C%83%E8%88%87%E7%AE%A1%E6%B2%BB) The Group integrates ESG principles into its strategy and operations, focusing on environmental protection, employee welfare, community engagement, robust corporate governance, and sustainable product quality and supply chain management - The Group integrates **sustainable development** into its strategy and operations, improving corporate governance and **ESG management systems**, and encouraging stakeholder participation[106](index=106&type=chunk) - Environmentally, the Group is committed to **carbon reduction, waste reduction, improving energy and water resource efficiency**, and addressing climate change risks[107](index=107&type=chunk) - Regarding employees, the Group adheres to **compliant employment, ensures occupational health and safety**, and builds a talent development system; for the community, it actively engages in **charitable and public welfare activities**[107](index=107&type=chunk) - In corporate governance, the Group refines its governance structure, strengthens risk control, and upholds business ethics; for products and services, it prioritizes **quality**, implements full-chain quality management, and builds a **sustainable supply chain**[108](index=108&type=chunk) [Purchase, Sale, and Redemption of the Company's Listed Securities](index=34&type=section&id=%E8%B3%BC%E8%B2%B7%E3%80%81%E5%87%BA%E5%94%AE%E5%8F%8A%E8%B4%96%E5%9B%9E%E6%9C%AC%E5%85%AC%E5%8F%B8%E4%B8%8A%E5%B8%82%E8%AD%89%E5%88%B8) During the reporting period, neither the company nor its subsidiaries purchased, sold, or redeemed any listed securities, except for disclosed placings and subscriptions of new shares, and no treasury shares were held - During the reporting period, neither the Company nor its subsidiaries purchased, sold, or redeemed any listed securities, apart from the placing and subscription of new shares, and **no treasury shares were held**[109](index=109&type=chunk) [Audit Committee](index=34&type=section&id=%E5%AF%A9%E6%A0%B8%E5%A7%94%E5%93%A1%E6%9C%83) The Audit Committee, comprising three independent non-executive directors, reviewed the unaudited interim consolidated results for H1 2025, confirming compliance with accounting principles, and the results were reviewed by EY - The Audit Committee, composed of **three independent non-executive directors**, reviewed the interim results and confirmed compliance with accounting principles and requirements[110](index=110&type=chunk) - Although the interim results are unaudited, they have been reviewed by **Ernst & Young** in accordance with **International Standard on Review Engagements 2410**[110](index=110&type=chunk) [Compliance with Corporate Governance Code in Appendix C1 of Listing Rules](index=34&type=section&id=%E9%81%B5%E5%AE%88%E3%80%8A%E4%B8%8A%E5%B8%82%E8%A6%8F%E5%89%87%E3%80%8B%E9%99%84%E9%8C%84C1%E6%89%80%E8%BC%89%E7%9A%84%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%AE%88%E5%89%87) The company has complied with all applicable code provisions of the Corporate Governance Code in Appendix C1 of the Listing Rules from January 1, 2025, to the announcement date - The Company has complied with all applicable provisions of the **Corporate Governance Code in Appendix C1 of the Listing Rules** from January 1, 2025, to the date of this announcement[111](index=111&type=chunk) [Compliance with Model Code in Appendix C3 of Listing Rules](index=34&type=section&id=%E7%AC%A6%E5%90%88%E3%80%8A%E4%B8%8A%E5%B8%82%E8%A6%8F%E5%89%87%E3%80%8B%E9%99%84%E9%8C%84C3%E6%89%80%E8%BC%89%E7%9A%84%E6%A8%99%E6%BA%96%E5%AE%88%E5%89%87) The company adopted the Model Code for Securities Transactions by Directors of Listed Issuers in Appendix C3 of the Listing Rules, and all directors complied with its provisions during the reporting period - The Company has adopted the **Model Code in Appendix C3 of the Listing Rules**, and all directors complied with its provisions during the reporting period[112](index=112&type=chunk) [Publication of Interim Results Announcement and Interim Report](index=35&type=section&id=%E5%88%8A%E7%99%BC%E4%B8%AD%E6%9C%9F%E6%A5%AD%E7%B8%BE%E5%85%AC%E5%91%8A%E5%8F%8A%E4%B8%AD%E6%9C%9F%E5%A0%B1%E5%91%8A) This announcement and the interim report for the six months ended June 30, 2025, have been published on the HKEX and company websites - This announcement and the interim report for the six months ended June 30, 2025, have been published on the **HKEX website** and the **Company's website**[113](index=113&type=chunk)