[Announcement Information](index=1&type=section&id=Announcement%20Information) This section provides general announcements and disclaimers regarding the financial report. [Announcement Statement](index=1&type=section&id=Announcement%20Statement) The Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited disclaim responsibility for this announcement, which presents Weibo Corporation's unaudited Q2 and interim financial results for 2025. - The Hong Kong Stock Exchange and HKEX assume no responsibility for the content of this announcement, nor do they make any representation as to its accuracy or completeness - Weibo Corporation is publishing its unaudited financial results for the second quarter and six months ended June 30, 2025 - The earnings report is provided to shareholders as an interim report in accordance with Rule 13.48(1) of the Hong Kong Listing Rules [Board of Directors](index=1&type=section&id=Board%20of%20Directors) As of the announcement date, Weibo's Board of Directors is chaired by Mr. Charles Chao and includes executive and independent directors. - The Chairman of the Board is Mr. Charles Chao - Board members include Mr. Charles Chao, Mr. Gaofei Wang, Ms. Hong Du, and Mr. Bo Liu (Directors), as well as Mr. Peiqing Lu, Mr. Peihong Chen, and Mr. Yan Wang (Independent Directors) [Q2 2025 and Interim Financial Results](index=2&type=section&id=Q2%202025%20and%20Interim%20Financial%20Results) This section details Weibo's financial and operational performance for Q2 2025 and the first half of 2025. [Performance Highlights and Management Commentary](index=2&type=section&id=Performance%20Highlights%20and%20Management%20Commentary) Weibo CEO Gaofei Wang reported solid quarterly results, highlighting user product focus on social integration and recommendation system upgrades, strong growth in AI-powered search, and robust advertising performance driven by new product launches and e-commerce season budgets. - Weibo CEO Gaofei Wang stated that the quarterly performance was solid[3](index=3&type=chunk) - User products focused on social product integration and recommendation system upgrades, enhancing platform user activity and content consumption experience[3](index=3&type=chunk) - In AI technology applications, Weibo Smart Search experienced strong user growth, further driving overall user search demand[3](index=3&type=chunk) - In commercialization, advertising business showed a steady trend, benefiting from new product launch marketing advantages and the ability to capture e-commerce season advertising budgets[3](index=3&type=chunk) 2025 Q2 Key Financial and Operational Data Overview | Metric | Amount/Value | YoY Change (GAAP) | YoY Change (Fixed Exchange Rate) | | :--- | :--- | :--- | :--- | | Net Revenue | 444.8 million USD | +2% | +1% | | Advertising and Marketing Revenue | 383.4 million USD | +2% | +2% | | Value-Added Services Revenue | 61.4 million USD | -2% | -2% | | Operating Income | 145.6 million USD | +8% | - | | Operating Margin | 33% | +2pp | - | | Net Income Attributable to Weibo Shareholders | 125.7 million USD | - | - | | Diluted Net Earnings Per Share | 0.48 USD | - | - | | Non-GAAP Operating Income | 161.8 million USD | +3% | - | | Non-GAAP Operating Margin | 36% | Flat | - | | Non-GAAP Net Income Attributable to Weibo Shareholders | 143.2 million USD | - | - | | Non-GAAP Diluted Net Earnings Per Share | 0.54 USD | - | - | | June Monthly Active Users (MAU) | 588 million | - | - | | June Average Daily Active Users (DAU) | 261 million | - | - | [Financial Performance Details](index=3&type=section&id=Financial%20Performance%20Details) In Q2 2025, Weibo's total net revenue increased by 2% year-over-year to $444.8 million, with advertising and marketing revenue up 2% due to a 10% increase in Alibaba's advertising revenue from the 618 e-commerce festival, while value-added services revenue decreased by 2% year-over-year, and total costs and expenses declined by 1% primarily due to reduced general and administrative expenses, leading to an 8% increase in operating income and a 12.3% increase in net income attributable to Weibo shareholders. [Net Revenue Analysis](index=3&type=section&id=Net%20Revenue%20Analysis) Total net revenue for Q2 2025 was $444.8 million, a 2% increase from the prior year, with advertising and marketing revenue at $383.4 million, up 2% year-over-year, driven by a 10% increase in advertising revenue from Alibaba due to the 618 e-commerce festival, while value-added services revenue decreased by 2% to $61.4 million. 2025 Q2 Net Revenue Composition and YoY Change | Revenue Category | 2025 Q2 (million USD) | 2024 Q2 (million USD) | YoY Change | | :--- | :--- | :--- | :--- | | Total Net Revenue | 444.8 | 437.9 | +2% | | Advertising and Marketing Revenue | 383.4 | 375.3 | +2% | | - Excluding Alibaba | 347.6 | 342.9 | +1% | | - From Alibaba | 35.7 | 32.4 | +10% | | Value-Added Services Revenue | 61.4 | 62.6 | -2% | - Advertising and marketing revenue from Alibaba increased by **10%**, primarily due to increased marketing demand during the 618 e-commerce festival[4](index=4&type=chunk) [Costs and Expenses](index=3&type=section&id=Costs%20and%20Expenses) Total costs and expenses for Q2 2025 amounted to $299.2 million, a 1% year-over-year decrease, primarily driven by a reduction in general and administrative expenses, partially offset by increases in cost of revenues and product development expenses, with the decrease in general and administrative expenses attributed to the recovery of a previously written-off bad debt. - Total costs and expenses for Q2 2025 amounted to **299.2 million USD**, a **1% decrease** from the prior year[4](index=4&type=chunk) - The decrease was primarily due to a year-over-year reduction in general and administrative expenses, partially offset by increases in cost of revenues and product development expenses[4](index=4&type=chunk) - The reduction in general and administrative expenses was mainly due to the recovery of an accounts receivable that was previously recognized as a bad debt expense and written off in prior periods during Q2 2025[4](index=4&type=chunk) [Profitability Metrics](index=3&type=section&id=Profitability%20Metrics) In Q2 2025, operating income increased by 8% year-over-year to $145.6 million, with an operating margin of 33%, while non-GAAP operating income reached $161.8 million with a non-GAAP operating margin of 36%, and net income attributable to Weibo shareholders was $125.7 million, resulting in diluted net earnings per share of $0.48. 2025 Q2 Profitability Metrics | Metric | 2025 Q2 (million USD) | 2024 Q2 (million USD) | YoY Change | | :--- | :--- | :--- | :--- | | Operating Income | 145.6 | 135.4 | +8% | | Operating Margin | 33% | 31% | +2pp | | Non-GAAP Operating Income | 161.8 | 157.6 | +3% | | Non-GAAP Operating Margin | 36% | 36% | Flat | | Non-Operating Income | 12.8 | 11.4 | +12.3% | | Income Tax Expense | 31.7 | 33.3 | -4.8% | | Net Income Attributable to Weibo Shareholders | 125.7 | 111.9 | +12.3% | | Diluted Net Earnings Per Share Attributable to Weibo Shareholders | 0.48 | 0.43 | +11.6% | | Non-GAAP Net Income Attributable to Weibo Shareholders | 143.2 | 126.3 | +13.4% | | Non-GAAP Diluted Net Earnings Per Share Attributable to Weibo Shareholders | 0.54 | 0.48 | +12.5% | - Non-operating income primarily includes net interest and other income of **15.9 million USD**, and investment-related impairment of **4.9 million USD**[5](index=5&type=chunk) [Cash Flow and Balance Sheet](index=3&type=section&id=Cash%20Flow%20and%20Balance%20Sheet) As of June 30, 2025, Weibo's total cash, cash equivalents, and short-term investments amounted to $2.11 billion, with cash generated from operating activities totaling $24.8 million and capital expenditures amounting to $17.6 million during Q2 2025. - As of June 30, 2025, Weibo's total cash, cash equivalents, and short-term investments amounted to **2.11 billion USD**[6](index=6&type=chunk) - Cash generated from operating activities in Q2 2025 was **24.8 million USD**[6](index=6&type=chunk) - Total capital expenditures were **17.6 million USD**, and depreciation and amortization expenses were **14.8 million USD**[6](index=6&type=chunk) [Conference Call Information](index=4&type=section&id=Conference%20Call%20Information) Weibo's management team will host a conference call on August 14, 2025, from 7:00 AM to 8:00 AM ET (7:00 PM to 8:00 PM Beijing Time) to discuss the company's financial performance and business operations, with registration links and online replay available. - The conference call will be held from 7:00 AM to 8:00 AM ET (or 7:00 PM to 8:00 PM Beijing Time) on August 14, 2025[7](index=7&type=chunk) - The call will provide an update on the company's financial performance and business operations[7](index=7&type=chunk) - Participants wishing to access the conference call must register via the public participant link, with live webcast and online replay available[7](index=7&type=chunk)[8](index=8&type=chunk) [Non-GAAP Financial Measures](index=4&type=section&id=Non-GAAP%20Financial%20Measures) This press release includes non-GAAP financial measures such as non-GAAP operating income, net income, diluted net earnings per share, and adjusted EBITDA, which are supplementary to, not substitutes for, GAAP measures, providing a more comparable view of ongoing performance, used by management for decision-making and considered useful for investors, but subject to limitations and potential incomparability with other companies' metrics. - This press release contains non-GAAP financial measures, including non-GAAP operating income, non-GAAP net income attributable to Weibo shareholders, non-GAAP diluted net earnings per share attributable to Weibo shareholders, and adjusted EBITDA[9](index=9&type=chunk) - These non-GAAP financial measures should be considered as supplementary to, rather than as a substitute for, the company's financial performance measures prepared in accordance with US GAAP[9](index=9&type=chunk) - Management uses these non-GAAP financial measures to reflect the company's ongoing operating performance and to provide useful information to investors and others[10](index=10&type=chunk) - The use of non-GAAP financial measures has limitations, and they may not be comparable to non-GAAP financial measures used by other companies[10](index=10&type=chunk) [About Weibo](index=5&type=section&id=About%20Weibo) This section provides an overview of Weibo's business model and its core offerings as a social media platform. [Company Profile](index=5&type=section&id=Company%20Profile) Weibo is a leading social media platform in China, enabling users to create, share, and discover content online, combining real-time self-expression, social interaction, content aggregation, and dissemination into a powerful platform where users can publish multimedia and long-form content, forming instant, viral conversational flows through asymmetric following. - Weibo is a leading social media platform for people to create, share, and discover content online[11](index=11&type=chunk) - The platform combines public real-time self-expression with a powerful platform for social interaction, content aggregation, and content dissemination[11](index=11&type=chunk) - Weibo's simple, asymmetric, and viral nature allows an original piece of content to become an instant and viral conversational flow[11](index=11&type=chunk) [Advertising and Marketing Business](index=5&type=section&id=Advertising%20and%20Marketing%20Business) The vast majority of Weibo's revenue is derived from selling advertising and marketing services, offering diverse solutions to companies of all sizes, including social display ads and promotional marketing products, and continuously refining its social interest graph recommendation engine to enable precise marketing based on user demographics, social relationships, interests, and behaviors for greater relevance, engagement, and marketing effectiveness. - The vast majority of Weibo's revenue is derived from selling advertising and marketing services, including social display advertisements and promotional marketing products[11](index=11&type=chunk) - Weibo provides various advertising and marketing solutions to companies of all sizes[11](index=11&type=chunk) - By continuously improving its social interest graph recommendation engine, clients can target audiences and demographics based on user demographics, social relationships, interests, and behaviors to achieve greater relevance, engagement, and marketing effectiveness[11](index=11&type=chunk) [Forward-Looking Statements and Risk Factors](index=6&type=section&id=Forward-Looking%20Statements%20and%20Risk%20Factors) This press release contains forward-looking statements protected by the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995, which involve inherent risks and uncertainties that could cause actual results to differ materially from expectations, including limited operating history in new businesses, user growth and engagement, China's regulatory environment, quarterly performance fluctuations, reliance on advertising revenue, new feature development, competition, acquisition integration, investment risks, and macroeconomic and policy changes, with Weibo assuming no obligation to update such information. - This press release contains forward-looking statements made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995[12](index=12&type=chunk) - Forward-looking statements involve inherent risks and uncertainties, and many important factors could cause actual results to differ materially from those contained in any forward-looking statement[12](index=12&type=chunk) - Potential risks and uncertainties include, but are not limited to, Weibo's limited operating history in certain new businesses, failure to maintain or expand its active user base and user engagement, the uncertain regulatory environment in China, fluctuations in the company's quarterly operating results, the company's reliance on advertising and marketing sales for most of its revenue, failure to successfully develop new features and products, failure to effectively compete for advertising and marketing spending, failure to successfully integrate acquired businesses, risks related to the company's investments, changes in the macroeconomic environment, and adverse changes in China's government economic and political policies[12](index=12&type=chunk) - Except as required by applicable law, Weibo undertakes no obligation to update such information[12](index=12&type=chunk) [Investor Contact Information](index=6&type=section&id=Investor%20Contact%20Information) Weibo Corporation's investor relations contact details, including phone and email, are provided for investor inquiries. - Investor Relations contact phone: **+86 10 5898-3336**[13](index=13&type=chunk) - Investor Relations email: **ir@staff.weibo.com**[13](index=13&type=chunk) [Unaudited Condensed Consolidated Financial Statements](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section presents Weibo's unaudited condensed consolidated financial statements, including statements of operations and balance sheets. [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This section provides Weibo's unaudited condensed consolidated statements of operations for Q2 2024 and 2025, and for the six months ended June 30, detailing financial data such as net revenue, costs and expenses, operating income, non-operating income, income tax expense, net income, and earnings per share. 2025 Q2 and Interim Condensed Consolidated Statements of Operations (GAAP, thousand USD) | Metric (thousand USD) | 2024 Q2 | 2025 Q2 | 2024 H1 | 2025 H1 | | :--- | :--- | :--- | :--- | :--- | | **Net Revenue:** | | | | | | Advertising and Marketing | 375,277 | 383,352 | 714,228 | 722,458 | | Value-Added Services | 62,596 | 61,446 | 119,142 | 119,195 | | **Total Net Revenue** | **437,873** | **444,798** | **833,370** | **841,653** | | **Costs and Expenses:** | | | | | | Cost of Revenues | 89,790 | 103,451 | 176,611 | 192,253 | | Sales and Marketing | 114,232 | 109,747 | 217,859 | 205,557 | | Product Development | 71,689 | 78,068 | 152,415 | 154,089 | | General and Administrative | 26,777 | 7,962 | 51,363 | 33,874 | | **Total Costs and Expenses** | **302,488** | **299,228** | **598,248** | **585,773** | | **Operating Income** | **135,385** | **145,570** | **235,122** | **255,880** | | Non-Operating Income | 11,427 | 12,833 | (12,154) | 34,936 | | Income Tax Expense | 33,275 | 31,705 | 58,319 | 55,996 | | **Net Income Attributable to Weibo Shareholders** | **111,931** | **125,685** | **161,369** | **232,649** | | Diluted Net Earnings Per Share | 0.43 | 0.48 | 0.63 | 0.88 | - The number of shares used to calculate diluted net earnings per share attributable to Weibo shareholders was **268,346 thousand** in Q2 2025 and **265,086 thousand** in Q2 2024[15](index=15&type=chunk) [Condensed Consolidated Balance Sheets](index=9&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section presents Weibo's unaudited condensed consolidated balance sheets as of December 31, 2024, and June 30, 2025, detailing the composition of assets, liabilities, redeemable non-controlling interests, and shareholders' equity. Condensed Consolidated Balance Sheets (GAAP, thousand USD) | Metric | December 31, 2024 | June 30, 2025 | | :--- | :--- | :--- | | **Assets:** | | | | Cash and Cash Equivalents | 1,890,632 | 1,156,292 | | Short-Term Investments | 459,852 | 952,876 | | Total Current Assets | 3,491,781 | 3,278,063 | | Total Assets | 6,504,499 | 6,539,145 | | **Liabilities:** | | | | Total Current Liabilities | 968,136 | 896,878 | | Total Liabilities | 2,925,613 | 2,863,437 | | **Shareholders' Equity:** | | | | Weibo Shareholders' Equity | 3,482,771 | 3,597,121 | | Total Shareholders' Equity | 3,533,783 | 3,649,891 | - As of June 30, 2025, amounts due from SINA were **452.953 million USD**, including **410.2 million USD** in principal and interest on short-term loans[16](index=16&type=chunk)[17](index=17&type=chunk) [Non-GAAP to GAAP Reconciliations](index=11&type=section&id=Non-GAAP%20to%20GAAP%20Reconciliations) This section provides reconciliations between US GAAP and IFRS financial measures, along with detailed notes on key differences. [Operating and Net Income Reconciliations](index=11&type=section&id=Operating%20and%20Net%20Income%20Reconciliations) This section provides reconciliation tables for non-GAAP operating income and net income attributable to Weibo shareholders to GAAP for Q2 2024 and 2025, and for the six months ended June 30, with key adjustments including share-based compensation, amortization of intangible assets from business acquisitions, and net investment-related gains/losses. 2025 Q2 Non-GAAP Operating Income Reconciliation (thousand USD) | Metric | 2024 Q2 | 2025 Q2 | | :--- | :--- | :--- | | Operating Income (GAAP) | 135,385 | 145,570 | | Add: Share-Based Compensation | 17,207 | 12,019 | | Add: Amortization of Intangible Assets from Business Acquisitions | 5,011 | 4,161 | | **Non-GAAP Operating Income** | **157,603** | **161,750** | 2025 Q2 Non-GAAP Net Income Attributable to Weibo Shareholders Reconciliation (thousand USD) | Metric | 2024 Q2 | 2025 Q2 | | :--- | :--- | :--- | | Net Income Attributable to Weibo Shareholders (GAAP) | 111,931 | 125,685 | | Add: Share-Based Compensation | 17,207 | 12,019 | | Add: Amortization of Intangible Assets from Business Acquisitions | 5,011 | 4,161 | | Add: Net Investment-Related Gains/(Losses) | (245) | 3,112 | | Add: Amortization of Issuance Costs of Convertible Senior Notes, Unsecured Senior Notes, and Long-Term Borrowings | 2,277 | 1,943 | | **Non-GAAP Net Income Attributable to Weibo Shareholders** | **126,252** | **143,215** | [EPS and EBITDA Reconciliations](index=11&type=section&id=EPS%20and%20EBITDA%20Reconciliations) This section provides reconciliation tables for non-GAAP diluted net earnings per share and adjusted EBITDA to GAAP, illustrating the impact of various adjustments on these key metrics, with non-GAAP diluted net earnings per share at $0.54 and adjusted EBITDA at $175.7 million for Q2 2025. 2025 Q2 Non-GAAP Diluted Net Earnings Per Share (USD) | Metric | 2024 Q2 | 2025 Q2 | | :--- | :--- | :--- | | Non-GAAP Diluted Net Earnings Per Share Attributable to Weibo Shareholders | 0.48 | 0.54 | 2025 Q2 Adjusted EBITDA Reconciliation (thousand USD) | Metric | 2024 Q2 | 2025 Q2 | | :--- | :--- | :--- | | Net Income Attributable to Weibo Shareholders (GAAP) | 111,931 | 125,685 | | Non-GAAP Adjustments | 14,321 | 17,530 | | Non-GAAP Net Income Attributable to Weibo Shareholders | 126,252 | 143,215 | | Add: Net Interest Income | (9,410) | (10,098) | | Add: Income Tax Expense | 34,357 | 32,190 | | Add: Depreciation Expense | 9,169 | 10,363 | | **Adjusted EBITDA** | **160,368** | **175,670** | - Non-GAAP operating margin was **36%** in Q2 2025, flat compared to Q2 2024[19](index=19&type=chunk) [Net Revenue Breakdown](index=13&type=section&id=Net%20Revenue%20Breakdown) This section provides a detailed breakdown of net revenue for Q2 2024 and 2025, and for the six months ended June 30, specifically highlighting contributions from non-Alibaba advertisers and Alibaba to advertising and marketing revenue, with non-Alibaba advertiser revenue at $347.6 million and Alibaba revenue at $35.7 million in Q2 2025. 2025 Q2 Net Revenue Breakdown (thousand USD) | Revenue Category | 2024 Q2 | 2025 Q2 | 2024 H1 | 2025 H1 | | :--- | :--- | :--- | :--- | :--- | | **Advertising and Marketing:** | | | | | | Non-Alibaba Advertisers | 342,868 | 347,610 | 659,268 | 644,104 | | Alibaba | 32,409 | 35,742 | 54,960 | 78,354 | | Subtotal | 375,277 | 383,352 | 714,228 | 722,458 | | **Value-Added Services** | 62,596 | 61,446 | 119,142 | 119,195 | | **Total** | **437,873** | **444,798** | **833,370** | **841,653** | [US GAAP to IFRS Reconciliations](index=14&type=section&id=US%20GAAP%20to%20IFRS%20Reconciliations) This section provides reconciliations between US GAAP and IFRS financial measures, along with detailed notes on key differences. [Scope of Assurance Engagement](index=14&type=section&id=Scope%20of%20Assurance%20Engagement) PricewaterhouseCoopers was engaged to perform a limited assurance engagement on Weibo's reconciliation tables of financial information prepared under US GAAP and IFRS, aiming to assess the appropriateness and arithmetic accuracy of the reconciliations, with the level of assurance being lower than a reasonable assurance engagement, and without responsibility for updating or reissuing historical financial information. - The company engaged PricewaterhouseCoopers to perform a limited assurance engagement on the reconciliation tables of differences between US GAAP and IFRS[21](index=21&type=chunk) - The scope of procedures selected depended on PricewaterhouseCoopers' judgment and its assessment of risks, including comparing amounts, evaluating the appropriateness of adjustments, and checking arithmetic accuracy[21](index=21&type=chunk)[22](index=22&type=chunk) - The level of assurance obtained in a limited assurance engagement is substantially less than that obtained in a reasonable assurance engagement[21](index=21&type=chunk) - Based on the procedures performed and evidence obtained, PricewaterhouseCoopers found no matters that caused them to believe the reconciliation tables were inconsistent, not prepared on the stated basis, or arithmetically inaccurate[23](index=23&type=chunk) [Statements of Operations Reconciliations](index=15&type=section&id=Statements%20of%20Operations%20Reconciliations) This section provides reconciliations of the unaudited condensed consolidated statements of operations between US GAAP and IFRS for the six months ended June 30, 2024 and 2025, with key adjustments including convertible senior notes, leases, investments measured at fair value, share-based compensation, and redeemable non-controlling interests, showing that net income attributable to Weibo shareholders under IFRS was $240.4 million in H1 2025, higher than GAAP's $232.6 million. 2025 H1 Statements of Operations Reconciliation (thousand USD) | Metric | GAAP Amount | Total IFRS Adjustments | IFRS Amount | | :--- | :--- | :--- | :--- | | Total Costs and Expenses | 585,773 | (17,748) | 568,025 | | Net Investment-Related Gains (Losses) | 5,245 | 1,837 | 7,082 | | Net Interest and Other Income (Losses) | 29,691 | 2,812 | 32,503 | | Fair Value Change of Convertible Senior Notes | – | (12,687) | (12,687) | | Finance Costs | – | (2,295) | (2,295) | | Income Before Income Tax Expense | 290,816 | 7,415 | 298,231 | | Net Income | 234,820 | 7,448 | 242,268 | | Net Income Attributable to Weibo Shareholders | 232,649 | 7,783 | 240,432 | - Key adjustments include convertible senior notes, leases, investments measured at fair value, share-based compensation, and redeemable non-controlling interests[25](index=25&type=chunk)[27](index=27&type=chunk) [Balance Sheets Reconciliations](index=16&type=section&id=Balance%20Sheets%20Reconciliations) This section provides reconciliations of the unaudited condensed consolidated balance sheets between US GAAP and IFRS as of December 31, 2024, and June 30, 2025, involving adjustments to goodwill and intangible assets, long-term investments, liabilities, and shareholders' equity, with total assets under IFRS at $6.5853 billion, total liabilities at $2.9586 billion, and total shareholders' equity at $3.6267 billion as of June 30, 2025. June 30, 2025 Balance Sheets Reconciliation (thousand USD) | Metric | GAAP Amount | Total IFRS Adjustments | IFRS Amount | | :--- | :--- | :--- | :--- | | Total Assets | 6,539,145 | 46,161 | 6,585,306 | | Total Liabilities | 2,863,437 | 95,192 | 2,958,629 | | Total Shareholders' Equity | 3,649,891 | (23,214) | 3,626,677 | - Key adjustments include convertible senior notes, leases, investments measured at fair value, share-based compensation, and redeemable non-controlling interests[28](index=28&type=chunk)[31](index=31&type=chunk) [Reconciliation Notes](index=17&type=section&id=Reconciliation%20Notes) This section details the primary differences in reconciliation between US GAAP and IFRS, covering the measurement of convertible senior notes, lease accounting treatment, investments measured at fair value, share-based compensation vesting methods, and the classification and measurement of redeemable non-controlling interests. - Convertible Senior Notes: GAAP measures at amortized cost, while IFRS designates them as fair value through profit or loss[32](index=32&type=chunk) - Leases: GAAP records amortization of right-of-use assets and interest expense related to lease liabilities together as lease costs; IFRS requires separate presentation of right-of-use asset amortization and interest expense[32](index=32&type=chunk) - Investments Measured at Fair Value: GAAP allows an alternative measurement method for equity investments without readily determinable fair value; IFRS classifies them as financial assets measured at fair value through profit or loss[32](index=32&type=chunk) - Share-Based Compensation: GAAP allows an accounting policy election for the vesting method of awards with service-only conditions and graded vesting features; IFRS requires each tranche of an award to be treated as a separate grant, accelerating expense recognition[32](index=32&type=chunk) - Redeemable Non-Controlling Interests: GAAP classifies as redeemable non-controlling interests and mezzanine equity, recording accretion; IFRS recognizes non-controlling interests as permanent equity, with the redemption right separately recognized as a financial liability[33](index=33&type=chunk)

[Financial Summary](index=1&type=section&id=%E8%B2%A1%E5%8B%99%E6%91%98%E8%A6%81) Summarizes the company's financial performance for Q2 and H1 2025, detailing revenue, gross profit, and non-IFRS profit trends [Financial Performance for the Three Months Ended June 30](index=1&type=section&id=%E6%88%AA%E8%87%B36%E6%9C%8830%E6%97%A5%E6%AD%A2%E4%B8%89%E5%80%8B%E6%9C%88%E8%B2%A1%E5%8B%99%E8%A1%A8%E7%8F%BE) JD Logistics' Q2 2025 revenue grew by 16.6% year-over-year to **RMB 51.6 billion**, with gross profit up 4.3% and profit for the period up 4.6%, while non-IFRS profit and EBITDA margins slightly decreased Financial Performance for the Three Months Ended June 30 | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | Year-over-year change | | :--- | :--- | :--- | :--- | | Revenue | 51,564,661 | 44,207,421 | 16.6% | | Gross Profit | 5,479,117 | 5,252,911 | 4.3% | | Profit Before Tax | 2,555,615 | 2,486,100 | 2.8% | | Profit for the Period | 2,348,544 | 2,245,043 | 4.6% | | Non-IFRS Profit for the Period | 2,587,585 | 2,455,535 | 5.4% | | Non-IFRS Profit Margin | 5.0% | 5.6% | (0.5) percentage points | | Non-IFRS EBITDA | 5,719,323 | 5,633,097 | 1.5% | | Non-IFRS EBITDA Margin | 11.1% | 12.7% | (1.7) percentage points | [Financial Performance for the Six Months Ended June 30](index=2&type=section&id=%E6%88%AA%E8%87%B36%E6%9C%8830%E6%97%A5%E6%AD%A2%E5%85%AD%E5%80%8B%E6%9C%88%E8%B2%A1%E5%8B%99%E8%A1%A8%E7%8F%BE) In H1 2025, JD Logistics' total revenue reached **RMB 98.5 billion**, growing 14.1% year-over-year, with profit for the period up 15.3% and non-IFRS profit up 7.1%, despite slight decreases in non-IFRS profit and EBITDA margins Financial Performance for the Six Months Ended June 30 | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | Year-over-year change | | :--- | :--- | :--- | :--- | | Revenue | 98,531,786 | 86,344,759 | 14.1% | | Gross Profit | 8,866,295 | 8,484,133 | 4.5% | | Profit Before Tax | 3,298,755 | 2,889,199 | 14.2% | | Profit for the Period | 2,959,157 | 2,567,348 | 15.3% | | Non-IFRS Profit for the Period | 3,339,048 | 3,118,186 | 7.1% | | Non-IFRS Profit Margin | 3.4% | 3.6% | (0.2) percentage points | | Non-IFRS EBITDA | 9,475,513 | 9,283,156 | 2.1% | | Non-IFRS EBITDA Margin | 9.6% | 10.8% | (1.1) percentage points | - The Board of Directors does not recommend an interim dividend for the six months ended June 30, 2025[7](index=7&type=chunk) [CEO's Report](index=2&type=section&id=%E9%A6%96%E5%B8%AD%E5%9F%B7%E8%A1%8C%E5%AE%98%E5%A0%B1%E5%91%8A) Provides an overview of the company's business performance, strategic initiatives, and operational highlights for the first half of 2025 [Business Review](index=2&type=section&id=%E6%A5%AD%E5%8B%99%E5%9B%9E%E9%A1%A7) JD Logistics' total revenue for H1 2025 reached **RMB 98.5 billion**, a 14.1% year-over-year increase, with external client revenue accounting for 67.1% and non-IFRS profit growing 7.1% through technology, network optimization, and refined management - Total revenue for H1 2025 reached **RMB 98.5 billion**, a year-over-year increase of **14.1%**[9](index=9&type=chunk) - Revenue from external clients was **RMB 66.1 billion**, a year-over-year increase of **10.2%**, accounting for **67.1%** of total revenue[9](index=9&type=chunk) - Non-IFRS profit for H1 2025 reached **RMB 3.3 billion**, a year-over-year increase of **7.1%**[9](index=9&type=chunk) [Integrated Supply Chain Logistics Solutions and Services](index=3&type=section&id=%E4%B8%80%E9%AB%94%E5%8C%96%E4%BE%9B%E6%87%89%E9%8F%88%E7%89%A9%E6%B5%81%E8%A7%A3%E6%B1%BA%E6%96%B9%E6%A1%88%E5%92%8C%E6%9C%8D%E5%8B%99) JD Logistics continues to enhance its integrated supply chain solutions, with this business segment generating **RMB 50.1 billion** in H1 2025, a 19.9% year-over-year increase, driven by a 14.5% growth in external integrated supply chain clients and an average revenue of **RMB 239,000** per client, alongside domestic and international market expansion - Revenue from integrated supply chain clients reached **RMB 50.1 billion** in H1 2025, a year-over-year increase of **19.9%**[10](index=10&type=chunk)[14](index=14&type=chunk) - Revenue from external integrated supply chain clients reached **RMB 17.6 billion**, a year-over-year increase of **14.7%**[10](index=10&type=chunk)[14](index=14&type=chunk) - The number of external integrated supply chain clients served reached **73,713**, a year-over-year increase of **14.5%**[10](index=10&type=chunk)[14](index=14&type=chunk) - The average revenue per external integrated supply chain client reached **RMB 239,000**[10](index=10&type=chunk)[14](index=14&type=chunk) [Deepening Domestic Market Cooperation](index=5&type=section&id=%E5%9C%8B%E5%85%A7%E5%B8%82%E5%A0%B4%E6%B7%B1%E5%8C%96%E5%90%88%E4%BD%9C) - In the home appliance industry, cooperation with renowned brands expanded from "one inventory for all channels" solutions to "delivery and installation in one" mode, significantly improving damage rates, customer complaint rates, logistics timeliness, and inventory turnover rates[15](index=15&type=chunk) - In the apparel industry, warehousing and distribution services were upgraded to three tiered timeliness services: "211 warehousing and distribution, express warehousing and distribution, and preferential warehousing and distribution," combined with industry-specific customization capabilities to help merchants reduce costs, increase efficiency, and enhance customer experience[16](index=16&type=chunk) [Overseas Business Layout and Expansion](index=3&type=section&id=%E6%B5%B7%E5%A4%96%E6%A5%AD%E5%8B%99%E4%BD%88%E5%B1%80%E8%88%87%E6%8B%93%E5%B1%95) - In June 2025, the self-operated express delivery brand "JoyExpress" was launched in Saudi Arabia, offering high-timeliness express services such as door-to-door delivery, cash on delivery, and same-day/next-day delivery, establishing a comprehensive logistics network from warehousing to last-mile delivery[11](index=11&type=chunk)[17](index=17&type=chunk) - Accelerating the "Global Weaving Network" plan, multiple new overseas warehouses were opened in H1 2025 in countries including the US, UK, France, Poland, South Korea, Vietnam, and Saudi Arabia, with overseas warehouses now covering **23 countries and regions** globally[11](index=11&type=chunk)[18](index=18&type=chunk)[33](index=33&type=chunk) - Revenue from overseas integrated supply chain logistics services maintained a rapid growth trend[18](index=18&type=chunk) [Other Clients](index=6&type=section&id=%E5%85%B6%E4%BB%96%E5%AE%A2%E6%88%B6) In H1 2025, JD Logistics' revenue from other clients, including express and freight services, reached **RMB 48.4 billion**, an 8.7% year-over-year increase, driven by enhanced express service timeliness, rapid growth in high-value fresh produce delivery, recruitment of full-time riders for JD Waimai, and strong growth in Hong Kong and Macau express business - In H1 2025, revenue from other clients reached **RMB 48.4 billion**, a year-over-year increase of **8.7%**[19](index=19&type=chunk) - JD Logistics' express service customer satisfaction consistently ranks among the top tier in the industry, leading in comprehensive express service satisfaction across multiple mainstream e-commerce platforms[12](index=12&type=chunk)[21](index=21&type=chunk) - In Q2 2025, JD Logistics began recruiting and managing full-time riders to participate in JD Waimai delivery services, expecting synergistic effects and efficiency improvements[12](index=12&type=chunk)[20](index=20&type=chunk) [Express Delivery Business](index=6&type=section&id=%E5%BF%AB%E9%81%9E%E6%A5%AD%E5%8B%99) - For high-value fresh produce, the full-chain logistics solution was upgraded (e.g., "pre-cooling at origin + full-process temperature control + multimodal transport" for lychee season), driving rapid growth in delivery business and market share expansion[12](index=12&type=chunk)[19](index=19&type=chunk) - The Hong Kong Island Operations Center became operational in Q1 2025, significantly improving sorting efficiency and delivery timeliness for Hong Kong express business, leading to rapid growth in express business in Hong Kong and Macau[21](index=21&type=chunk) [Freight Business](index=7&type=section&id=%E5%BF%AB%E9%81%8B%E6%A5%AD%E5%8B%99) - The scale of the freight business (including Deppon Logistics and Kuayue Express) is among the leading positions nationwide[22](index=22&type=chunk) - Transport solutions are refined based on industry characteristics, providing stable, reliable, and flexible freight products to achieve business growth and market share expansion[22](index=22&type=chunk) [Logistics Technology](index=7&type=section&id=%E7%89%A9%E6%B5%81%E7%A7%91%E6%8A%80) JD Logistics maintains its commitment to technological innovation and investment, with over **4,700 R&D personnel** leveraging AI and digital twin technologies to optimize logistics processes, achieving significant advancements in smart warehousing and autonomous driving, and accumulating over **5,000 patents and software copyrights** - As of June 30, 2025, the company has over **4,700 professional R&D personnel**, continuously investing in automation equipment and artificial intelligence (AI) technologies[13](index=13&type=chunk) - As of June 30, 2025, over **5,000 authorized patents and software copyrights** have been obtained, with over **3,000 patents** in automation and unmanned technologies[25](index=25&type=chunk) [Smart Warehousing](index=8&type=section&id=%E6%99%BA%E8%83%BD%E5%80%89%E5%84%B2) - The independently developed "Zhilang" goods-to-person solution has entered a new phase of nationwide large-scale replication and application, deployed in core cities such as Beijing, Guangzhou, Chengdu, and Fuzhou[24](index=24&type=chunk) - The Xintang Phase III warehouse for the Guangzhou apparel industry has implemented the "Zhilang" system, integrating automated handling, multi-tier shelving, flying ladder systems, and intelligent picking workstations, significantly improving order processing efficiency and addressing pain points in the apparel industry[24](index=24&type=chunk) [Autonomous Driving](index=8&type=section&id=%E7%84%A1%E4%BA%BA%E9%A7%95%E9%A7%9B) - Hundreds of autonomous vehicles have been deployed in over ten provinces nationwide, achieving normalized operations for shuttle transportation between stations and road areas[25](index=25&type=chunk) - Effectively reduces the number of shuttle trips for delivery personnel, increases pick-up and delivery time, improves pick-up and delivery efficiency, pick-up timeliness, and successful delivery rates, and reduces last-mile operating costs[25](index=25&type=chunk) [Logistics Infrastructure Network](index=8&type=section&id=%E7%89%A9%E6%B5%81%E5%9F%BA%E7%A4%E8%A8%AD%E6%96%BD%E7%B6%B2%E7%B5%A1) JD Logistics operates a highly collaborative network of six major components, including warehousing, integrated transportation, last-mile delivery, bulky item, cold chain, and cross-border networks, forming the cornerstone for its premium supply chain solutions and logistics services - Possesses a highly collaborative network of six major components: warehousing, integrated transportation, last-mile delivery, bulky item, cold chain, and cross-border networks[26](index=26&type=chunk) [Warehousing Network](index=9&type=section&id=%E5%80%89%E5%84%B2%E7%B6%B2%E7%B5%A1) - As of June 30, 2025, operates over **1,600 warehouses** and over **2,000 cloud warehouses**, with a total managed area exceeding **34 million square meters**, covering almost all counties and districts nationwide[13](index=13&type=chunk)[27](index=27&type=chunk) - Operates **45 Asia No.1 intelligent industrial parks** in **30 cities** nationwide, demonstrating industry-leading technological innovation capabilities[27](index=27&type=chunk) [Integrated Transportation Network](index=9&type=section&id=%E7%B6%9C%E5%90%88%E9%81%8B%E8%BC%B8%E7%B6%B2%E7%B5%A1) - The integrated transportation network includes road, air, sea, and multimodal transport, utilizing algorithmic models and other technologies for intelligent full-chain management and route optimization[28](index=28&type=chunk) - As of June 30, 2025, operates nearly **60,000 self-owned transport vehicles**, with nearly **4,000 new energy vehicles** added in H1[28](index=28&type=chunk) - JD Airlines operates **10 self-owned all-cargo aircraft** on a regular basis, having opened multiple new international cargo routes in H1, including Shenzhen, China to Bangkok, Thailand, and Chengdu, China to Yangon, Myanmar[28](index=28&type=chunk) - Covers over **2,000 air cargo routes** and over **700 railway routes** through cooperative arrangements[28](index=28&type=chunk)[29](index=29&type=chunk) [Last-Mile Delivery Network](index=10&type=section&id=%E6%9C%80%E5%BE%8C%E4%B8%80%E5%85%AC%E9%87%8C%E9%85%8D%E9%80%81%E7%B6%B2%E7%B5%A1) - As of June 30, 2025, has over **550,000 self-owned delivery and operational personnel**, including full-time food delivery riders, operating over **19,000 delivery stations and outlets**[13](index=13&type=chunk)[30](index=30&type=chunk) - The network covers over **300 prefecture-level administrative regions** across **33 provinces, autonomous regions, municipalities, and special administrative regions** in China[30](index=30&type=chunk) - Continuously improves the rural penetration network and last-mile service system, enhancing delivery timeliness in rural areas[30](index=30&type=chunk) [Bulky Item Network](index=10&type=section&id=%E5%A4%A7%E4%BB%B6%E7%B6%B2%E7%B5%A1) - As of June 30, 2025, operates over **200 warehouses** and corresponding **200 sorting centers** for bulky and heavy goods, with a total managed area exceeding **5 million square meters**[31](index=31&type=chunk) - Expands network coverage in lower-tier cities using approximately **1,800 bulky item delivery and installation stations** under the "JD Bang" brand[31](index=31&type=chunk) [Cold Chain Network](index=10&type=section&id=%E5%86%B7%E9%8F%88%E7%B6%B2%E7%B5%A1) - As of June 30, 2025, operates approximately **60 temperature-controlled cold chain warehouses** for fresh, frozen, and refrigerated foods, with an operating area of approximately **400,000 square meters**[32](index=32&type=chunk) - Operates over **50 specialized warehouses** for pharmaceuticals and medical devices, with an operating area exceeding **500,000 square meters**[32](index=32&type=chunk) - Strengthens timeliness capabilities through a comprehensive cold chain network, specialized packaging design, and optimized consumable solutions, ensuring timely fulfillment and delivery of fresh produce, pharmaceuticals, and other categories[32](index=32&type=chunk) [Cross-Border Network](index=11&type=section&id=%E8%B7%A8%E5%A2%83%E7%B6%B2%E7%B5%A1) - As of June 30, 2025, operates over **130 bonded warehouses, direct mail warehouses, and overseas warehouses**, with a total managed area exceeding **1.3 million square meters**[33](index=33&type=chunk) - Overseas warehouses now cover **23 countries and regions** globally, with operations established in countries such as the US, UK, France, and Germany[33](index=33&type=chunk) - Through the "Global Weaving Network" plan, a global supply chain network is being built with overseas warehouses at its core, including an overseas warehouse network, international transit hubs, local overseas distribution networks, and cross-border trunk transportation networks[33](index=33&type=chunk) [Corporate Social Responsibility](index=11&type=section&id=%E4%BC%81%E6%A5%AD%E7%A4%BE%E6%9C%83%E8%B2%AC%E4%BB%BB) JD Logistics actively fulfills its social responsibilities by leveraging its integrated supply chain logistics advantages to participate in disaster relief and emergency support, while continuously creating employment opportunities, with total human resources expenditure reaching **RMB 95.7 billion** for the twelve months ended June 30, 2025 - Actively participates in disaster relief and emergency support, such as promptly initiating emergency relief and donating supplies during the Guizhou flood disaster[34](index=34&type=chunk) - For the twelve months ended June 30, 2025, total human resources expenditure (including self-owned employees and external personnel) reached **RMB 95.7 billion**[34](index=34&type=chunk) - The company is committed to continuously strengthening its integrated supply chain logistics capabilities, solidifying logistics infrastructure, and deepening the application and innovation of supply chain technology to help reduce overall logistics costs and promote high-quality development of the industrial economy[34](index=34&type=chunk) [Management Discussion and Analysis](index=13&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%A4%E8%A8%8E%E8%AB%96%E5%8F%8A%E5%88%86%E6%9E%90) Offers a detailed financial analysis of the company's performance for the three and six months ended June 30, 2025, including revenue, costs, and liquidity [Financial Analysis for the Three Months Ended June 30](index=13&type=section&id=%E6%88%AA%E8%87%B36%E6%9C%8830%E6%97%A5%E6%AD%A2%E4%B8%89%E5%80%8B%E6%9C%88%E8%B2%A1%E5%8B%99%E5%88%86%E6%9E%90) This section provides a detailed analysis of JD Logistics' financial performance for Q2 2025, including revenue composition, operating costs, gross profit, various expenses, and profit for the period, along with their year-over-year changes and key drivers Financial Performance for the Three Months Ended June 30 | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Revenue | 51,564,661 | 44,207,421 | | Operating Costs | (46,085,544) | (38,954,510) | | Gross Profit | 5,479,117 | 5,252,911 | | Selling and Marketing Expenses | (1,577,063) | (1,367,748) | | Research and Development Expenses | (1,005,668) | (880,807) | | General and Administrative Expenses | (929,561) | (793,799) | | Profit Before Tax | 2,555,615 | 2,486,100 | | Profit for the Period | 2,348,544 | 2,245,043 | [Revenue Analysis](index=14&type=section&id=%E6%94%B6%E5%85%A5%E5%88%86%E6%9E%90) Revenue by Client Type | Revenue Source | 2025 (RMB thousands) | 2025 (%) | 2024 (RMB thousands) | 2024 (%) | | :--- | :--- | :--- | :--- | :--- | | Integrated Supply Chain Clients | 26,906,482 | 52.2 | 21,298,667 | 48.2 | | Other Clients | 24,658,179 | 47.8 | 22,908,754 | 51.8 | | Total | 51,564,661 | 100.0 | 44,207,421 | 100.0 | - Revenue from integrated supply chain clients increased by **26.3%** year-over-year to **RMB 26.9 billion**, primarily driven by increased revenue from JD Group and growth in the number and average revenue per external integrated supply chain client[40](index=40&type=chunk) - Revenue from other clients increased by **7.6%** year-over-year to **RMB 24.7 billion**, primarily driven by increased express and freight business volumes[40](index=40&type=chunk) Revenue by Customer Type | Client Type | 2025 (RMB thousands) | 2025 (%) | 2024 (RMB thousands) | 2024 (%) | | :--- | :--- | :--- | :--- | :--- | | From JD Group | 17,761,054 | 34.4 | 13,533,049 | 30.6 | | From External Clients | 33,803,607 | 65.6 | 30,674,372 | 69.4 | | Total | 51,564,661 | 100.0 | 44,207,421 | 100.0 | [Operating Costs Analysis](index=15&type=section&id=%E7%87%9F%E6%A5%AD%E6%88%90%E6%9C%AC%E5%88%86%E6%9E%90) - Operating costs increased by **18.3%** year-over-year to **RMB 46.1 billion**[43](index=43&type=chunk) - Staff costs and welfare expenses increased by **20.1%** year-over-year to **RMB 18.2 billion**, primarily driven by an increase in the number of operational employees[43](index=43&type=chunk) - Outsourcing costs increased by **20.5%** year-over-year to **RMB 16.9 billion**, primarily driven by increased demand for outsourcing services due to business growth[43](index=43&type=chunk) - Other operating costs increased by **20.8%** year-over-year to **RMB 6.6 billion**, primarily driven by increased installation and maintenance service costs, fuel costs, road and bridge tolls, packaging and other consumable material costs, and utility expenses[44](index=44&type=chunk) [Gross Profit and Gross Profit Margin](index=16&type=section&id=%E6%AF%9B%E5%88%A9%E5%8F%8A%E6%AF%9B%E5%88%A9%E7%8E%87) - Gross profit was **RMB 5.5 billion**, a year-over-year increase of **4.3%**[45](index=45&type=chunk) - Gross profit margin was **10.6%**, a decrease of **1.3 percentage points** from **11.9%** in the same period of 2024[45](index=45&type=chunk) [Selling and Marketing Expenses](index=16&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) - Selling and marketing expenses increased by **15.3%** year-over-year to **RMB 1.6 billion**[46](index=46&type=chunk) - Primarily driven by the expansion of sales and marketing teams promoting service products[46](index=46&type=chunk) [Research and Development Expenses](index=16&type=section&id=%E7%A0%94%E7%99%BC%E9%96%8B%E6%94%AF) - Research and development expenses increased by **14.2%** year-over-year to **RMB 1.0 billion**[47](index=47&type=chunk) - Primarily driven by continuous investment in technology and innovation[47](index=47&type=chunk) [General and Administrative Expenses](index=16&type=section&id=%E4%B8%80%E8%88%AC%E5%8F%8A%E8%A1%8C%E6%94%BF%E9%96%8B%E6%94%AF) - General and administrative expenses increased by **17.1%** year-over-year to **RMB 0.9 billion**[48](index=48&type=chunk) - Primarily driven by increased staff costs and welfare expenses, including share-based payment expenses[48](index=48&type=chunk) [Profit for the Period](index=16&type=section&id=%E6%9C%9F%E9%96%93%E5%88%A9%E6%BD%A4) - Net profit was **RMB 2.3 billion**, a year-over-year increase of **4.6%**[49](index=49&type=chunk) [Financial Analysis for the Six Months Ended June 30](index=17&type=section&id=%E6%88%AA%E8%87%B36%E6%9C%8830%E6%97%A5%E6%AD%A2%E5%85%AD%E5%80%8B%E6%9C%88%E8%B2%A1%E5%8B%99%E5%88%86%E6%9E%90) This section provides a detailed analysis of JD Logistics' financial performance for H1 2025, including revenue composition, operating costs, gross profit, various expenses, and profit for the period, along with their year-over-year changes and key drivers Financial Performance for the Six Months Ended June 30 | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Revenue | 98,531,786 | 86,344,759 | | Operating Costs | (89,665,491) | (77,860,626) | | Gross Profit | 8,866,295 | 8,484,133 | | Selling and Marketing Expenses | (2,993,025) | (2,779,309) | | Research and Development Expenses | (1,898,294) | (1,743,264) | | General and Administrative Expenses | (1,805,170) | (1,663,325) | | Profit Before Tax | 3,298,755 | 2,889,199 | | Profit for the Period | 2,959,157 | 2,567,348 | [Revenue Analysis](index=18&type=section&id=%E6%94%B6%E5%85%A5%E5%88%86%E6%9E%90) Revenue by Client Type | Revenue Source | 2025 (RMB thousands) | 2025 (%) | 2024 (RMB thousands) | 2024 (%) | | :--- | :--- | :--- | :--- | :--- | | Integrated Supply Chain Clients | 50,107,239 | 50.9 | 41,800,092 | 48.4 | | Other Clients | 48,424,547 | 49.1 | 44,544,667 | 51.6 | | Total | 98,531,786 | 100.0 | 86,344,759 | 100.0 | - Revenue from integrated supply chain clients increased by **19.9%** year-over-year to **RMB 50.1 billion**, primarily driven by increased revenue from JD Group and growth in the number and average revenue per external integrated supply chain client[53](index=53&type=chunk) - Revenue from other clients increased by **8.7%** year-over-year to **RMB 48.4 billion**, primarily driven by increased express and freight business volumes[53](index=53&type=chunk) Revenue by Customer Type | Client Type | 2025 (RMB thousands) | 2025 (%) | 2024 (RMB thousands) | 2024 (%) | | :--- | :--- | :--- | :--- | :--- | | From JD Group | 32,460,440 | 32.9 | 26,415,629 | 30.6 | | From External Clients | 66,071,346 | 67.1 | 59,929,130 | 69.4 | | Total | 98,531,786 | 100.0 | 86,344,759 | 100.0 | [Operating Costs Analysis](index=19&type=section&id=%E7%87%9F%E6%A5%AD%E6%88%90%E6%9C%AC%E5%88%86%E6%9E%90) - Operating costs increased by **15.2%** year-over-year to **RMB 89.7 billion**[56](index=56&type=chunk) - Staff costs and welfare expenses increased by **17.1%** year-over-year to **RMB 35.0 billion**, primarily driven by an increase in the number of operational employees[56](index=56&type=chunk) - Outsourcing costs increased by **19.2%** year-over-year to **RMB 34.0 billion**, primarily driven by increased demand for outsourcing services due to business growth[56](index=56&type=chunk) - Other operating costs increased by **13.3%** year-over-year to **RMB 12.2 billion**, primarily driven by increased installation and maintenance service costs, fuel costs, road and bridge tolls, packaging and other consumable material costs, and utility expenses[57](index=57&type=chunk) [Gross Profit and Gross Profit Margin](index=20&type=section&id=%E6%AF%9B%E5%88%A9%E5%8F%8A%E6%AF%9B%E5%88%A9%E7%8E%87) - Gross profit was **RMB 8.9 billion**, a year-over-year increase of **4.5%**[58](index=58&type=chunk) - Gross profit margin was **9.0%**, a decrease of **0.8 percentage points** from **9.8%** in the same period of 2024[58](index=58&type=chunk) [Selling and Marketing Expenses](index=20&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) - Selling and marketing expenses remained relatively stable at **RMB 3.0 billion**[59](index=59&type=chunk) [Research and Development Expenses](index=20&type=section&id=%E7%A0%94%E7%99%BC%E9%96%8B%E6%94%AF) - Research and development expenses remained relatively stable at **RMB 1.9 billion**[60](index=60&type=chunk) [General and Administrative Expenses](index=20&type=section&id=%E4%B8%80%E8%88%AC%E5%8F%8A%E8%A1%8C%E6%94%BF%E9%96%8B%E6%94%AF) - General and administrative expenses remained relatively stable at **RMB 1.8 billion**[61](index=61&type=chunk) [Profit for the Period](index=20&type=section&id=%E6%9C%9F%E9%96%93%E5%88%A9%E6%BD%A4) - Net profit was **RMB 3.0 billion**, a year-over-year increase of **15.3%**[62](index=62&type=chunk) [Non-IFRS Metrics](index=21&type=section&id=%E9%9D%9E%E5%9C%8B%E9%9A%9B%E8%B2%A1%E5%8B%99%E5%A0%B1%E5%91%8A%E6%BA%96%E5%89%87%E6%8C%87%E6%A8%99) The company provides non-IFRS profit and EBITDA as supplementary financial metrics to better reflect core operating performance, excluding the impact of non-recurring items such as share-based payments, amortization of acquired intangible assets, fair value changes of financial assets, and gains from disposal of industrial parks - Non-IFRS metrics provide a convenient comparison of core operating performance across different periods and companies by excluding items that management believes do not reflect core operating performance[63](index=63&type=chunk) [Non-IFRS Profit Reconciliation](index=21&type=section&id=%E9%9D%9E%E5%9C%8B%E9%9A%9B%E8%B2%A1%E5%8B%99%E5%A0%B1%E5%91%8A%E6%BA%96%E5%89%87%E5%88%A9%E6%BD%A4%E8%AA%BF%E7%AF%80) Non-IFRS Profit Reconciliation for the Three Months Ended June 30 | Metric | 2025 3 Months (RMB thousands) | 2024 3 Months (RMB thousands) | | :--- | :--- | :--- | | Profit for the Period | 2,348,544 | 2,245,043 | | Share-based Payment | 116,802 | 41,830 | | Amortization of Intangible Assets from Acquisition | 141,829 | 141,829 | | Fair Value Change of Financial Assets at FVTPL | 5,725 | 73,240 | | Gain from Disposal of Industrial Parks | — | (46,407) | | Tax Impact of Non-IFRS Adjustments | (25,315) | — | | **Non-IFRS Profit for the Period** | **2,587,585** | **2,455,535** | | Non-IFRS Profit Margin | 5.0% | 5.6% | Non-IFRS Profit Reconciliation for the Six Months Ended June 30 | Metric | 2025 6 Months (RMB thousands) | 2024 6 Months (RMB thousands) | | :--- | :--- | :--- | | Profit for the Period | 2,959,157 | 2,567,348 | | Share-based Payment | 170,720 | 237,334 | | Amortization of Intangible Assets from Acquisition | 283,658 | 283,658 | | Fair Value Change of Financial Assets at FVTPL | 9,321 | 118,642 | | Gain from Disposal of Industrial Parks | (31,499) | (88,796) | | Tax Impact of Non-IFRS Adjustments | (52,309) | — | | **Non-IFRS Profit for the Period** | **3,339,048** | **3,118,186** | | Non-IFRS Profit Margin | 3.4% | 3.6% | [Non-IFRS EBITDA Reconciliation](index=23&type=section&id=%E9%9D%9E%E5%9C%8B%E9%9A%9B%E8%B2%A1%E5%8B%99EBITDA%E8%AA%BF%E7%AF%80) Non-IFRS EBITDA Reconciliation for the Three Months Ended June 30 | Metric | 2025 3 Months (RMB thousands) | 2024 3 Months (RMB thousands) | | :--- | :--- | :--- | | Profit for the Period | 2,348,544 | 2,245,043 | | Share-based Payment | 116,802 | 41,830 | | Fair Value Change of Financial Assets at FVTPL | 5,725 | 73,240 | | Gain from Disposal of Industrial Parks | — | (46,407) | | Depreciation and Amortization | 3,158,834 | 3,155,850 | | Finance Income | (331,980) | (333,406) | | Finance Costs | 214,327 | 255,890 | | Income Tax Expense | 207,071 | 241,057 | | **Non-IFRS EBITDA for the Period** | **5,719,323** | **5,633,097** | | Non-IFRS EBITDA Margin | 11.1% | 12.7% | Non-IFRS EBITDA Reconciliation for the Six Months Ended June 30 | Metric | 2025 6 Months (RMB thousands) | 2024 6 Months (RMB thousands) | | :--- | :--- | :--- | | Profit for the Period | 2,959,157 | 2,567,348 | | Share-based Payment | 170,720 | 237,334 | | Fair Value Change of Financial Assets at FVTPL | 9,321 | 118,642 | | Gain from Disposal of Industrial Parks | (31,499) | (88,796) | | Depreciation and Amortization | 6,278,190 | 6,331,885 | | Finance Income | (685,625) | (719,931) | | Finance Costs | 435,651 | 514,823 | | Income Tax Expense | 339,598 | 321,851 | | **Non-IFRS EBITDA for the Period** | **9,475,513** | **9,283,156** | | Non-IFRS EBITDA Margin | 9.6% | 10.8% | [Liquidity and Free Cash Flow](index=24&type=section&id=%E6%B5%81%E5%8B%95%E6%80%A7%E5%8F%8A%E8%87%AA%E7%94%B1%E7%8F%BE%E9%87%91%E6%B5%81) As of June 30, 2025, JD Logistics' total cash resources amounted to **RMB 44.3 billion**, with free cash inflow of **RMB 0.3 billion** in H1, a decrease from **RMB 1.4 billion** in the prior year, driven by **RMB 6.6 billion** net cash from operating activities, **RMB 7.3 billion** net cash used in investing activities, and **RMB 7.8 billion** net cash used in financing activities - As of June 30, 2025, total cash resources amounted to **RMB 44.3 billion**[71](index=71&type=chunk) - For the six months ended June 30, 2025, free cash inflow was **RMB 0.3 billion**, compared to **RMB 1.4 billion** in the same period of 2024[72](index=72&type=chunk) Cash Flow Statement Summary | Cash Flow Item | 2025 6 Months (RMB thousands) | 2024 6 Months (RMB thousands) | | :--- | :--- | :--- | | Net Cash Generated from Operating Activities | 6,568,722 | 7,382,334 | | Net Cash Used in Investing Activities | (7,324,796) | (709,497) | | Net Cash Used in Financing Activities | (7,759,491) | (5,995,724) | | Net (Decrease) / Increase in Cash and Cash Equivalents | (8,515,565) | 677,113 | | Cash and Cash Equivalents at End of Period | 17,317,766 | 17,919,821 | [Net Cash Generated from Operating Activities](index=25&type=section&id=%E7%B6%93%E7%87%9F%E6%B4%BB%E5%8B%95%E6%89%80%E5%BE%97%E7%8F%BE%E9%87%91%E6%B7%A8%E9%A1%8D) - For the six months ended June 30, 2025, net cash generated from operating activities was **RMB 6.6 billion**[74](index=74&type=chunk) - Primarily attributable to a net profit of **RMB 3.0 billion**, adjusted for depreciation of right-of-use assets of **RMB 3.7 billion** and depreciation of property and equipment of **RMB 2.3 billion**, partially offset by an increase in trade receivables of **RMB 1.9 billion**[74](index=74&type=chunk) [Net Cash Used in Investing Activities](index=25&type=section&id=%E6%8A%95%E8%B3%87%E6%B4%BB%E5%8B%95%E6%89%80%E7%94%A8%E7%8F%BE%E9%87%91%E6%B7%A8%E9%A1%8D) - For the six months ended June 30, 2025, net cash used in investing activities was **RMB 7.3 billion**[75](index=75&type=chunk) - Primarily attributable to the purchase of financial assets at fair value through profit or loss of **RMB 11.0 billion** and capital expenditures of **RMB 2.4 billion**, partially offset by maturities of time deposits and financial assets of **RMB 3.6 billion** and **RMB 3.0 billion**, respectively[75](index=75&type=chunk) [Net Cash Used in Financing Activities](index=25&type=section&id=%E8%9E%8D%E8%B3%87%E6%B4%BB%E5%8B%95%E6%89%80%E7%94%A8%E7%8F%BE%E9%87%91%E6%B7%A8%E9%A1%8D) - For the six months ended June 30, 2025, net cash used in financing activities was **RMB 7.8 billion**[76](index=76&type=chunk) - Primarily attributable to repayment of borrowings of **RMB 4.5 billion**, principal portion of lease payments of **RMB 3.4 billion**, and acquisition of partial equity interests in subsidiaries of **RMB 2.6 billion**, partially offset by proceeds from borrowings of **RMB 3.2 billion**[76](index=76&type=chunk) [Capital Gearing Ratio](index=26&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, JD Logistics' capital gearing ratio was approximately **11.1%** - As of June 30, 2025, the capital gearing ratio was approximately **11.1%**[77](index=77&type=chunk) [Significant Related Acquisition](index=26&type=section&id=%E9%87%8D%E5%A4%A7%E9%97%9C%E9%80%A3%E6%94%B6%E8%B3%BC) JD Logistics is in the process of acquiring approximately **36.43%** equity interest in Kuayue Express for a total consideration not exceeding **RMB 6.484 billion**, with the first stage completed on June 11, 2025, after which the Group will hold **100%** equity interest in Kuayue Express - The company is acquiring a total of approximately **36.43%** equity interest in Kuayue Express, with a total consideration not exceeding approximately **RMB 6.484 billion**[78](index=78&type=chunk) - The first stage was completed on June 11, 2025, and after the third tranche of transactions, the Group will hold **100%** equity interest in Kuayue Express[78](index=78&type=chunk) [Employees and Remuneration Policy](index=26&type=section&id=%E5%93%A1%E5%B7%A5%E5%8F%8A%E8%96%AA%E9%85%AC%E6%94%BF%E7%AD%96) As of June 30, 2025, JD Logistics had **686,909 employees**, with operational personnel accounting for **96.4%**, and total staff costs and welfare expenses for H1 reaching **RMB 39.2 billion**, a 17.0% year-over-year increase, as the company participates in government welfare plans and implements various equity incentive schemes Employee Headcount by Function | Function | Number of Employees | Percentage of Total | | :--- | :--- | :--- | | Operations | 662,240 | 96.4 | | Sales and Marketing | 12,845 | 1.9 | | Research and Development | 4,785 | 0.7 | | General and Administrative | 7,039 | 1.0 | | Total | 686,909 | 100.0 | - For the six months ended June 30, 2025, total staff costs and welfare expenses, including share-based payment expenses, amounted to **RMB 39.2 billion**, a year-over-year increase of **17.0%**[84](index=84&type=chunk) - The company implements pre-IPO employee equity incentive schemes, post-IPO share option schemes, and post-IPO share award schemes[84](index=84&type=chunk) [Foreign Exchange Risk](index=27&type=section&id=%E5%A4%96%E5%8C%AF%E9%A2%A8%E9%9A%AA) JD Logistics primarily conducts business in RMB, with some transactions denominated in USD and other currencies, exposing it to foreign exchange risk, which the company monitors and considers hedging with derivative financial instruments when necessary - Primarily conducts business in RMB, with some transactions denominated in USD and other currencies, exposing it to foreign exchange risk[85](index=85&type=chunk) - The company monitors foreign exchange risk and considers hedging with derivative financial instruments when necessary[85](index=85&type=chunk) [Pledge of Assets](index=27&type=section&id=%E8%B3%87%E7%94%A2%E6%8A%B5%E6%8A%BC) As of June 30, 2025, pledged restricted cash amounted to **RMB 394.1 million** - As of June 30, 2025, pledged restricted cash amounted to **RMB 394.1 million**[86](index=86&type=chunk) [Contingent Liabilities](index=27&type=section&id=%E6%88%96%E6%9C%89%E8%B2%A0%E5%82%B5) As of June 30, 2025, JD Logistics had no significant contingent liabilities or guarantees - As of June 30, 2025, there were no significant contingent liabilities or guarantees[87](index=87&type=chunk) [Borrowings](index=27&type=section&id=%E5%80%9F%E6%AC%BE) As of June 30, 2025, JD Logistics' outstanding borrowings amounted to **RMB 6.0 billion** - As of June 30, 2025, outstanding borrowings amounted to **RMB 6.0 billion**[88](index=88&type=chunk) [Material Events After June 30, 2025](index=27&type=section&id=2025%E5%B9%B46%E6%9C%8830%E6%97%A5%E5%BE%8C%E9%87%8D%E5%A4%A7%E4%BA%8B%E9%A0%85) Except for matters disclosed in this announcement, there have been no other material events affecting the Group since June 30, 2025 - Except for those disclosed in this announcement, as of the date of this announcement, there have been no other material events affecting the Group since June 30, 2025[89](index=89&type=chunk) [Condensed Consolidated Financial Statements](index=28&type=section&id=%E7%B0%A1%E6%98%8E%E5%90%88%E4%BD%B5%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8) Presents the company's condensed consolidated financial statements, including income, comprehensive income, balance sheet, and cash flow statements for the period [Condensed Consolidated Statement of Profit or Loss](index=28&type=section&id=%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, JD Logistics reported revenue of **RMB 98.53 billion**, gross profit of **RMB 8.866 billion**, and profit for the period of **RMB 2.959 billion**, with basic earnings per share of **RMB 0.41** and diluted earnings per share of **RMB 0.40** Condensed Consolidated Statement of Profit or Loss | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Revenue | 98,531,786 | 86,344,759 | | Operating Costs | (89,665,491) | (77,860,626) | | Gross Profit | 8,866,295 | 8,484,133 | | Selling and Marketing Expenses | (2,993,025) | (2,779,309) | | Research and Development Expenses | (1,898,294) | (1,743,264) | | General and Administrative Expenses | (1,805,170) | (1,663,325) | | Profit Before Tax | 3,298,755 | 2,889,199 | | Profit for the Period | 2,959,157 | 2,567,348 | | Basic Earnings Per Share (RMB) | 0.41 | 0.36 | | Diluted Earnings Per Share (RMB) | 0.40 | 0.36 | [Condensed Consolidated Statement of Comprehensive Income](index=29&type=section&id=%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, total comprehensive income for the period was **RMB 2.795 billion**, with total comprehensive income attributable to owners of the company at **RMB 2.408 billion**, primarily influenced by exchange differences from functional currency translation to presentation currency and foreign operations translation Condensed Consolidated Statement of Comprehensive Income | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Profit for the Period | 2,959,157 | 2,567,348 | | Exchange Differences on Translation of Functional Currency to Presentation Currency | (129,467) | 101,976 | | Exchange Differences Arising from Translation of Foreign Operations | (37,089) | 70,733 | | Total Comprehensive Income for the Period | 2,795,088 | 2,680,281 | | Total Comprehensive Income for the Period Attributable to Owners of the Company | 2,407,647 | 2,395,358 | [Condensed Consolidated Statement of Financial Position](index=30&type=section&id=%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, JD Logistics' total assets were **RMB 118.909 billion**, total equity was **RMB 59.086 billion**, and total liabilities were **RMB 59.823 billion**, with changes in non-current and current asset structures, and increases in financial assets and trade receivables Condensed Consolidated Statement of Financial Position | Metric | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Total Assets | 118,908,791 | 117,867,788 | | Total Non-Current Assets | 57,085,021 | 50,127,600 | | Total Current Assets | 61,823,770 | 67,740,188 | | Total Equity | 59,085,741 | 62,966,920 | | Total Liabilities | 59,823,050 | 54,900,868 | | Total Non-Current Liabilities | 20,047,334 | 15,188,819 | | Total Current Liabilities | 39,775,716 | 39,712,049 | - Financial assets at fair value through profit or loss (non-current) increased from **RMB 1.296 billion** as of December 31, 2024, to **RMB 8.550 billion** as of June 30, 2025[92](index=92&type=chunk) - Trade receivables increased from **RMB 15.745 billion** as of December 31, 2024, to **RMB 17.591 billion** as of June 30, 2025[92](index=92&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=32&type=section&id=%E7%B0%A1%E6%98%8E%E5%90%88%E4%BD%B5%E7%8F%BE%E9%87%91%E6%B5%81%E9%87%8F%E8%A1%A8) For the six months ended June 30, 2025, net cash generated from operating activities was **RMB 6.569 billion**, net cash used in investing activities was **RMB 7.325 billion**, and net cash used in financing activities was **RMB 7.759 billion**, with cash and cash equivalents at the end of the period totaling **RMB 17.318 billion** Condensed Consolidated Statement of Cash Flows | Cash Flow Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Net Cash Generated from Operating Activities | 6,568,722 | 7,382,334 | | Net Cash Used in Investing Activities | (7,324,796) | (709,497) | | Net Cash Used in Financing Activities | (7,759,491) | (5,995,724) | | Net (Decrease) / Increase in Cash and Cash Equivalents | (8,515,565) | 677,113 | | Cash and Cash Equivalents at Beginning of Period | 25,811,757 | 17,207,027 | | Cash and Cash Equivalents at End of Period | 17,317,766 | 17,919,821 | [Notes to the Financial Statements](index=33&type=section&id=%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8%E9%99%84%E8%A8%BB) Provides detailed notes on the accounting policies, income, tax, earnings per share, and trade receivables/payables for the financial statements [General Information, Basis of Preparation and Presentation](index=33&type=section&id=%E4%B8%80%E8%88%AC%E8%B3%87%E6%96%99%E3%80%81%E7%B7%A8%E8%A3%BD%E5%8F%8A%E5%91%88%E5%88%97%E5%9F%BA%E7%A4%8E) JD Logistics is an investment holding company primarily operating in China, with its condensed consolidated financial statements prepared in RMB in accordance with IAS 34 and HKEX Listing Rules, and should be read in conjunction with the 2024 annual consolidated financial statements - The Group's principal activities and geographical markets are located in China[95](index=95&type=chunk) - The condensed consolidated financial statements are prepared in accordance with International Accounting Standard 34 and the applicable disclosure requirements of Appendix 16 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[95](index=95&type=chunk) - The condensed consolidated financial statements are presented in RMB and should be read in conjunction with the Group's annual consolidated financial statements for the year ended December 31, 2024[96](index=96&type=chunk) [Application of Amendments to International Financial Reporting Standards](index=33&type=section&id=%E6%87%89%E7%94%A8%E5%9C%8B%E9%9A%9B%E8%B2%A1%E5%8B%99%E5%A0%B1%E5%91%8A%E6%9C%83%E8%A8%88%E6%BA%96%E5%88%99%E4%BF%AE%E8%A8%82%E6%9C%AC) Amendments to International Financial Reporting Standards, including IAS 21 (Lack of Exchangeability), issued by the IASB were first adopted in this interim period but had no material impact on the Group's financial position, performance, or disclosures in the condensed consolidated financial statements - The amendments to International Financial Reporting Standards issued by the IASB, including amendments to IAS 21, were first adopted in this interim period[97](index=97&type=chunk) - These amendments had no material impact on the Group's financial position and performance and/or disclosures in the condensed consolidated financial statements for the current and prior periods[97](index=97&type=chunk) [Summary of Significant Accounting Policies](index=34&type=section&id=%E9%87%8D%E5%A4%A7%E6%9C%83%E8%A8%88%E6%94%BF%E7%AD%96%E8%B3%87%E6%96%99%E6%A6%82%E8%A6%81) The condensed consolidated financial statements are prepared on a historical cost basis, except for certain financial instruments measured at fair value, with accounting policies and calculation methods consistent with those used in the 2024 annual report - The condensed consolidated financial statements are prepared on a historical cost basis, except for certain financial instruments measured at fair value[98](index=98&type=chunk) - The accounting policies and calculation methods are consistent with those followed in the preparation of the 2024 annual report[98](index=98&type=chunk) [Revenue](index=34&type=section&id=%E6%94%B6%E5%85%A5) For the six months ended June 30, 2025, total revenue was **RMB 98.532 billion**, comprising **RMB 50.107 billion** from integrated supply chain clients and **RMB 48.425 billion** from other clients, with the majority of revenue (**RMB 93.190 billion**) recognized over time - Clients are classified as integrated supply chain clients or other clients based on whether they have used the Group's warehousing or inventory management related services[99](index=99&type=chunk) Revenue by Client Type and Recognition Timing | Client Type | 2025 6 Months (RMB thousands) | 2024 6 Months (RMB thousands) | | :--- | :--- | :--- | | Integrated Supply Chain Clients | 50,107,239 | 41,800,092 | | Other Clients | 48,424,547 | 44,544,667 | | Total | 98,531,786 | 86,344,759 | | Revenue Recognition Timing: | | | | Over Time | 93,189,812 | 82,688,932 | | At a Point in Time | 5,341,974 | 3,655,827 | | Total | 98,531,786 | 86,344,759 | [Income Tax Expense](index=35&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, total income tax expense was **RMB 339.6 million**, consisting of **RMB 437.7 million** in current tax and **RMB -98.1 million** in deferred tax Income Tax Expense by Type | Tax Type | 2025 6 Months (RMB thousands) | 2024 6 Months (RMB thousands) | | :--- | :--- | :--- | | Current Tax | 437,689 | 364,008 | | Deferred Tax | (98,091) | (42,157) | | Total | 339,598 | 321,851 | [Profit Before Tax](index=35&type=section&id=%E9%99%A4%E7%A8%85%E5%89%8D%E5%88%A9%E6%BD%A4) For the six months ended June 30, 2025, profit before tax was **RMB 3.299 billion**, with key expenses deducted including staff costs and welfare expenses of **RMB 39.2 billion** and outsourcing costs of **RMB 34.0 billion** Key Expenses Deducted in Profit Before Tax Calculation | Expense Item | 2025 6 Months (RMB thousands) | 2024 6 Months (RMB thousands) | | :--- | :--- | :--- | | Staff Costs and Welfare Expenses | 39,199,921 | 33,509,170 | | Outsourcing Costs | 34,004,333 | 28,536,414 | | Depreciation of Right-of-Use Assets | 3,704,579 | 3,866,396 | | Depreciation of Property and Equipment | 2,272,450 | 2,144,389 | | Amortization of Other Intangible Assets | 294,831 | 311,787 | [Earnings Per Share](index=36&type=section&id=%E6%AF%8F%E8%82%A1%E6%94%B6%E7%9B%8A) For the six months ended June 30, 2025, basic earnings per share attributable to owners of the company was **RMB 0.41**, and diluted earnings per share was **RMB 0.40** Earnings Per Share Attributable to Owners of the Company | Metric | 2025 6 Months (RMB) | 2024 6 Months (RMB) | | :--- | :--- | :--- | | Basic Earnings Per Share Attributable to Owners of the Company | 0.41 | 0.36 | | Diluted Earnings Per Share Attributable to Owners of the Company | 0.40 | 0.36 | [Dividends](index=36&type=section&id=%E8%82%A1%E6%81%AF) No dividends were paid or proposed to ordinary shareholders during this interim period - No dividends were paid or proposed to ordinary shareholders during this interim period[104](index=104&type=chunk) [Trade Receivables](index=37&type=section&id=%E8%B2%BF%E6%98%93%E6%87%89%E6%94%B6%E6%AC%BE%E9%A0%85) As of June 30, 2025, total trade receivables amounted to **RMB 17.591 billion**, including **RMB 10.121 billion** from third parties and **RMB 5.894 billion** from related parties, with most receivables due within 3 months Trade Receivables by Type | Trade Receivables Type | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Trade Receivables from Third Parties | 10,121,445 | 11,107,254 | | Trade Receivables from Related Parties | 5,893,990 | 2,953,825 | | Less: Provision for Credit Losses | (384,831) | (379,488) | | Trade Receivables at Fair Value Through Other Comprehensive Income | 1,960,359 | 2,063,273 | | **Total** | **17,590,963** | **15,744,864** | Trade Receivables Aging Analysis | Aging | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Within 3 months | 17,588,361 | 15,711,216 | | 3 to 6 months | 146,400 | 144,011 | | 6 to 12 months | 68,933 | 95,645 | | Over 12 months | 172,100 | 173,480 | [Trade Payables](index=38&type=section&id=%E8%B2%BF%E6%98%93%E6%87%89%E4%BB%98%E6%AC%BE%E9%A0%85) As of June 30, 2025, total trade payables amounted to **RMB 8.796 billion**, including **RMB 321 million** under supplier financing arrangements, with most payables due within 3 months Trade Payables by Type | Trade Payables Type | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Trade Payables | 8,475,502 | 8,466,638 | | Trade Payables under Supplier Financing Arrangements | 320,903 | 101,446 | | **Total** | **8,796,405** | **8,568,084** | Trade Payables Aging Analysis | Aging | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Within 3 months | 8,100,696 | 8,052,360 | | 3 to 6 months | 287,743 | 148,469 | | 6 to 12 months | 160,014 | 126,812 | | Over 12 months | 247,952 | 240,443 | [Other Information](index=39&type=section&id=%E5%85%B6%E4%BB%96%E4%BF%A1%E6%81%AF) Covers corporate governance, audit committee details, dividend policy, share transactions, and the use of proceeds from fundraising activities [Compliance with Corporate Governance Code](index=39&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%89%87) The company is committed to maintaining strict corporate governance and has complied with all applicable code provisions of the HKEX Listing Rules Appendix C1 Corporate Governance Code for the six months ended June 30, 2025, except for the absence of Chairman Mr. Liu Qiangdong at the Annual General Meeting due to other commitments - The company is committed to maintaining and promoting strict corporate governance, with principles focused on implementing effective internal control measures and enhancing the Board's transparency and accountability to all shareholders of the company[109](index=109&type=chunk) - For the six months ended June 30, 2025, the company has complied with all applicable code provisions of the Corporate Governance Code, except for the absence of the Chairman of the Board, Mr. Liu Qiangdong, at the Annual General Meeting[109](index=109&type=chunk) [Audit Committee](index=39&type=section&id=%E5%AF%A9%E8%A8%88%E5%A7%94%E5%93%A1%E6%9C%83) The Audit Committee, composed of three independent non-executive directors with Ms. Gu Yi as Chair, is responsible for continuously monitoring the implementation of risk management policies and internal control systems, and has reviewed the Group's unaudited condensed consolidated financial statements for the three and six months ended June 30, 2025, which were also reviewed by the auditor - The Audit Committee comprises three members (Ms. Gu Yi, Ms. Wu Yanan, and Dr. Zhao Xiande), with Ms. Gu Yi serving as Chair[110](index=110&type=chunk) - The committee is responsible for continuously monitoring the implementation of risk management policies across the company, ensuring the internal control system effectively identifies, manages, and mitigates risks in business operations[110](index=110&type=chunk) - The Audit Committee has reviewed the Group's unaudited condensed consolidated financial statements for the three and six months ended June 30, 2025, which have also been reviewed by the auditor in accordance with International Standard on Review Engagements 2410[110](index=110&type=chunk) [Other Board Committees](index=40&type=section&id=%E5%85%B6%E4%BB%96%E8%91%A3%E4%BA%8B%E5%A7%94%E5%93%A1%E6%9C%83) In addition to the Audit Committee, the company has also established a Nomination Committee and a Remuneration Committee - In addition to the Audit Committee, the company has also established a Nomination Committee and a Remuneration Committee[111](index=111&type=chunk) [Interim Dividend](index=40&type=section&id=%E4%B8%AD%E6%9C%9F%E8%82%A1%E6%81%AF) The Board of Directors does not recommend an interim dividend for the six months ended June 30, 2025 - The Board of Directors does not recommend an interim dividend for the six months ended June 30, 2025[112](index=112&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=40&type=section&id=%E8%B3%BC%E8%B2%B7%E3%80%81%E5%87%BA%E5%94%AE%E6%88%96%E8%B4%96%E5%9B%9E%E6%9C%AC%E5%85%AC%E5%8F%B8%E4%B8%8A%E5%B8%82%E8%AD%89%E5%88%B8) For 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 on the HKEX, and the company held no treasury shares as of that date - For 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 on The Stock Exchange of Hong Kong Limited[113](index=113&type=chunk) - As of June 30, 2025, the company held no treasury shares as defined by the Listing Rules[113](index=113&type=chunk) [Use of Proceeds](index=40&type=section&id=%E5%8B%9F%E9%9B%86%E8%B3%87%E9%87%91%E7%94%A8%E9%80%94) This section discloses the use of net proceeds from the global offering, placing, and subscription, with the company having extended the expected timeline for utilizing a portion of these proceeds - The net proceeds from the global offering were approximately **RMB 22.945 billion**, and from the placing and subscription were approximately **RMB 6.924 billion**[114](index=114&type=chunk)[116](index=116&type=chunk) - The company has extended the initial expected timeline for utilizing the net proceeds from the global offering to 12 to 36 months from May 16, 2024, and for the placing and subscription to 12 to 24 months from May 16, 2024[114](index=114&type=chunk)[116](index=116&type=chunk) [Net Proceeds from Global Offering](index=41&type=section&id=%E5%85%A8%E7%90%83%E7%99%BC%E5%94%AE%E5%8B%9F%E9%9B%86%E8%B3%87%E9%87%91%E6%B7%A8%E9%A1%8D) | Purpose | Net Proceeds (RMB millions) | Unused Amount as of January 1, 2025 (RMB millions) | Amount Used for the Six Months Ended June 30, 2025 (RMB millions) | Unused Amount as of June 30, 2025 (RMB millions) | Expected Timeline for Full Utilization | | :--- | :--- | :--- | :--- | :--- | :--- | | Upgrade and Expand Our Logistics Network | 12,620 | 2,141 | 497 | 1,644 | 12 to 36 months from May 16, 2024 | | Develop Advanced Technologies Related to Supply Chain Solutions and Logistics Services | 4,589 | 2,013 | 438 | 1,575 | 12 to 36 months from May 16, 2024 | | Expand the Breadth and Depth of Our Solutions, Deepen Engagement with Existing Clients, and Attract Potential Clients | 3,442 | 198 | 99 | 99 | 12 to 36 months from May 16, 2024 | | General Corporate Purposes and Working Capital Needs | 2,294 | 335 | 122 | 213 | 12 to 36 months from May 16, 2024 | | **Total** | **22,945** | **4,687** | **1,156** | **3,531** | | [Net Proceeds from Placing and Subscription](index=42&type=section&id=%E9%85%8D%E5%94%AE%E5%8F%8A%E8%AA%8D%E8%B3%BC%E5%8B%9F%E9%9B%86%E8%B3%87%E9%87%91%E6%B7%A8%E9%A1%8D) | Purpose | Net Proceeds (RMB millions) | Unused Amount as of January 1, 2025 (RMB millions) | Amount Used for the Six Months Ended June 30, 2025 (RMB millions) | Unused Amount as of June 30, 2025 (RMB millions) | Expected Timeline for Full Utilization | | :--- | :--- | :--- | :--- | :--- | :--- | | Optimize Logistics Network and Solutions, Including Through Self-Development and/or Acquisitions | 5,885 | — | — | — | N/A | | General Corporate Purposes and Working Capital Needs | 1,039 | 662 | 312 | 350 | 12 to 24 months from May 16, 2024 | | **Total** | **6,924** | **662** | **312** | **350** | | [Publication of Interim Results Announcement and Interim Report](index=42&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 interim results announcement has been published on the HKEX website and the company's website, and the interim report will be published at an appropriate time - This interim results announcement is published on the HKEX website www.hkexnews.hk and the company's website ir.jdl.com[118](index=118&type=chunk) - The company's interim report for the six months ended June 30, 2025, will be published on the aforementioned websites at an appropriate time[118](index=118&type=chunk)

[Financial Summary](index=1&type=section&id=Financial%20Summary) During the reporting period, the Group's revenue decreased by 4.6% year-on-year to HKD 688.1 million, but strict cost control led to a 27.7% increase in core operating profit (including lease liability interest expense) to HKD 17.365 million, an 18.0% increase in profit attributable to company shareholders to HKD 15.06 million, and an 18.8% increase in basic earnings per share to HK 1.9 cents; however, the interim dividend per share decreased by 50% year-on-year to HK 1.0 cent Financial Performance Summary | Metric | 2025 (HKD Thousand) | 2024 (HKD Thousand) | Change | | :--- | :--- | :--- | :--- | | Revenue | 688,139 | 721,654 | -4.6% | | Core Operating Profit | 20,425 | 17,419 | +17.3% | | Core Operating Profit (including lease liability interest expense) | 17,365 | 13,598 | +27.7% | | Profit Attributable to Company Shareholders | 15,060 | 12,767 | +18.0% | | Basic Earnings Per Share (HK Cents) | 1.9 | 1.6 | +18.8% | | Interim Dividend Per Share (HK Cents) | 1.0 | 2.0 | -50.0% | [Operations Summary](index=2&type=section&id=Operations%20Summary) Despite a challenging business environment, the Group's revenue fell by 4.6%, but strict cost control successfully offset sales and gross margin pressures, leading to improved profitability; the Group maintains a robust financial position with HKD 167 million in net cash and no bank borrowings, while the total number of shops slightly decreased from 157 as of December 31, 2024, to 155 as of June 30, 2025 - The challenging business environment persists, with Group revenue falling by **4.6%**, but strict cost control offset sales and gross margin pressures, leading to improved profitability[6](index=6&type=chunk) - The Group maintains a robust financial position with **HKD 167 million** in net cash and no bank borrowings[6](index=6&type=chunk) Shop Count | Shop Type | As of June 30, 2025 | As of December 31, 2024 | | :--- | :--- | :--- | | Saint Honore Cake Shop (Hong Kong) | 110 | 111 | | Saint Honore Cake Shop (Macau) | 14 | 14 | | Saint Honore Cake Shop (Guangzhou) | 3 | 4 | | Mon cher Cake Shop (Hong Kong) | 7 | 7 | | Zoff Optical Shop (Hong Kong) | 16 | 16 | | Zoff Optical Shop (Singapore) | 5 | 5 | | **Total Shops under Convenience Retail Asia** | **155** | **157** | [CEO's Report](index=3&type=section&id=CEO%27s%20Report) The CEO's report highlights that despite an overall decline in the Hong Kong retail market, the Group maintained solid performance and market share; through product innovation, excellent customer experience, and talent development, the Group successfully navigated external challenges, with future plans including expanding market share, investing in talent and production facilities, and prudently growing the business - Despite an overall decline in the Hong Kong retail market, the Group maintained solid performance and market share through product innovation, excellent customer experience, and talent development[7](index=7&type=chunk) - The Group will continue to expand market share, invest in talent and production facilities, and prudently grow its business, particularly in B2B and value-added products[15](index=15&type=chunk)[16](index=16&type=chunk)[17](index=17&type=chunk) [Business Review](index=3&type=section&id=Business%20Review) The business review details the performance of each segment: Saint Honore Cake Shop offset revenue decline through product innovation and cost control, with B2B business achieving double-digit growth; Mon cher launched new products and successful collaborations; Zoff Hong Kong outperformed the market, while Singapore operations faced challenges and implemented cost-saving measures [Saint Honore Cake Shop](index=3&type=section&id=Business%20Review%EF%BC%8DSaint%20Honore%20Cake%20Shop) Saint Honore Cake Shop saw a reduction in store count across Hong Kong, Macau, and Guangzhou, with total revenue experiencing a mid-single-digit decline; facing weak consumption and market competition, the Group successfully offset some impacts through strict cost control and innovative products like European sourdough bread, frozen foods, and co-branded mini cakes, leading to an annual increase in profitability; the Group also invested in digital and social media, optimized the 'Saint Honore Cake Online' platform, reaching 1.4 million members, and B2B sales achieved double-digit growth, with investment in a new Tai Po plant to boost capacity - Saint Honore Cake Shop's store count decreased from **148** in the first half of 2024 to **127** as of June 30, 2025[8](index=8&type=chunk) - Total revenue for Hong Kong and Macau cake shops recorded a mid-single-digit decline, but profitability increased year-on-year through strict cost control and innovative product development[8](index=8&type=chunk) - Successfully launched European sourdough bread, frozen food series, and co-branded mini cakes with popular characters, offsetting the impact of weak celebration cake sales[8](index=8&type=chunk) - The 'Saint Honore Cake Online' platform has approximately **1.4 million** members, with over **220,000** 'Gold Members', and received 'Online-to-Offline Customer Experience' and 'Reputable Online Shop Certification' accolades[9](index=9&type=chunk) - Business-to-business (B2B) sales recorded double-digit growth, and a long-term lease negotiation was completed to relocate part of the Hong Kong factory to upgraded facilities in Tai Po, enhancing frozen product capacity and efficiency[10](index=10&type=chunk) [Mon cher and Merci Moncher](index=5&type=section&id=Business%20Review%EF%BC%8DMon%20cher%20and%20Merci%20Moncher) Mon cher cake shops maintained stable same-store sales and enhanced brand awareness by launching new products like mint chocolate rolls and mochi desserts, and collaborating with local cafe NOC; last December, the Group introduced 'Merci Moncher,' a new mid-range pastry shop concept blending Japanese and French baking styles, with its flagship store in Causeway Bay - Mon cher cake shops maintained stable same-store sales and enhanced brand awareness by launching new products (e.g., mint chocolate rolls, mochi desserts) and collaborating with NOC cafe[12](index=12&type=chunk) - Launched a new mid-range pastry shop concept, 'Merci Moncher,' blending Japanese and French baking styles, with its flagship store in Causeway Bay[12](index=12&type=chunk) [Zoff Optical Shops](index=5&type=section&id=Business%20Review%EF%BC%8DZoff) Zoff Hong Kong's franchise business recorded low single-digit growth in the first half, outperforming the overall shrinking Hong Kong optical market; by offering over 1,400 products, advanced eye examination services, intraocular pressure measurement, and collaborations with local brands, Zoff Hong Kong expanded its customer reach; the new Singapore franchise business faced challenges, with comparable same-store sales declining by a mid-single-digit percentage, leading to cost-saving measures that reduced operating costs by over 10% - Zoff Hong Kong's franchise business recorded low single-digit growth in the first half, outperforming the overall shrinking Hong Kong optical market[13](index=13&type=chunk) - Zoff Hong Kong offers over **1,400** products, promotes advanced eye examination and intraocular pressure measurement services, and collaborates with local brands like HSBC and Toys 'R' Us[13](index=13&type=chunk) - Zoff Singapore's comparable same-store sales recorded a mid-single-digit decline, with cost-saving measures reducing operating costs by over **10%**[14](index=14&type=chunk) [Future Outlook](index=6&type=section&id=Future%20Outlook) The Group is cautiously optimistic about revenue growth in the second half, anticipating a boost from Mid-Autumn Festival and Christmas holidays; facing retail market challenges and industry consolidation opportunities, the Group will focus on solidifying and expanding its cake shop market share through new store models and precise marketing to enhance brand image; the B2B business, a strategic pillar, will see significant investment in talent and production facilities to penetrate the mainland China market; Zoff will continue to expand in Hong Kong, adopt a prudent strategy in Singapore, and enhance eye examination services while launching more Japan-made eyewear products - The Group is cautiously optimistic about revenue growth in the second half, anticipating a boost from Mid-Autumn Festival and Christmas holidays[15](index=15&type=chunk) - The cake shop business will solidify and expand its core market share, enhancing brand image and optimizing costs through new store models, precise digital marketing, and the 'Saint Honore Cake Online' platform[15](index=15&type=chunk) - The business-to-business (B2B) segment is a strategic pillar, with significant investment in talent and production facilities to enhance capacity and profitability, and penetrate the mainland China market[15](index=15&type=chunk) - Zoff will continue to expand in Hong Kong, adopt a prudent strategy in Singapore, and enhance its range of eye examination services while launching more Japan-made fashionable eyewear products[16](index=16&type=chunk) [Discussion and Analysis](index=8&type=section&id=Discussion%20and%20Analysis) This chapter details the Group's financial performance, employee situation, and sustainability and corporate social responsibility practices; financially, revenue decreased but profitability improved, with robust cash flow; employee numbers slightly decreased, but investment in training and benefits continued; in CSR, the Group actively participated in environmental and community activities [Financial Review](index=8&type=section&id=Financial%20Review) The Group's first-half turnover decreased by 4.6% to HKD 688 million; the cake shop business was affected by store closures and local consumers traveling abroad, but B2B business and festive food sales remained flat; Zoff optical business saw a modest 0.3% growth; gross margin decreased by 2.0 percentage points to 51.7%, mainly due to promotional activities and an increased proportion of B2B business; through strict cost control, operating expenses as a percentage of turnover decreased, and both core operating profit and profit attributable to company shareholders increased; the Group holds HKD 167 million in net cash with no bank borrowings Financial Performance Overview | Metric | H1 2025 (HKD Thousand) | H1 2024 (HKD Thousand) | Change | | :--- | :--- | :--- | :--- | | Turnover | 688,000 | 721,654 | -4.6% | | Cake Shop Business Turnover | 615,000 | 648,658 | -5.2% | | Zoff Optical Business Turnover | 73,000 | 72,996 | +0.3% | | Gross Margin | 51.7% | 53.7% | -2.0 percentage points | | Operating Expenses as % of Turnover | 49.2% | 51.7% | -2.5 percentage points | | Core Operating Profit before Lease Liability Interest Expense | 20,000 | 17,419 | +17.3% | | Core Operating Profit (including lease liability interest expense) | 17,000 | 13,598 | +27.7% | | Net Profit | 15,000 | 13,000 | +18.0% | | Basic Earnings Per Share (HK Cents) | 1.9 | 1.6 | +18.8% | - The Group's net cash balance is **HKD 167 million**, with no bank borrowings, indicating a robust financial position[21](index=21&type=chunk) - The Board resolved to declare an interim dividend of **HK 1 cent** per share[22](index=22&type=chunk) [Employees](index=9&type=section&id=Employees) As of June 30, 2025, the Group had 2,704 employees, with Hong Kong employees accounting for 54%; total staff costs decreased year-on-year to HKD 245 million; the Group offers competitive remuneration, skill enhancement, and customer service training, and was recognized as a 'Manpower Developer' for its talent development achievements; through the 'Heart-to-Heart' program, the Group aims to enhance employee satisfaction and belonging, and organizes various social activities Employee Statistics | Metric | As of June 30, 2025 | | :--- | :--- | | Total Employees | 2,704 | | % of Hong Kong Employees | 54% | | % of Part-time Employees | 23% | | Total Staff Costs (HKD Thousand) | 245,000 | - The Group provides competitive remuneration packages, comprehensive skill enhancement, and customer service training, and was recognized as a 'Manpower Developer'[23](index=23&type=chunk) - Implemented the 'Heart-to-Heart' program to enhance employee satisfaction and belonging through career development, work-life balance, and social activities[24](index=24&type=chunk) [Sustainability and Corporate Social Responsibility](index=9&type=section&id=Sustainability%20and%20Corporate%20Social%20Responsibility) As a member of Fung Group, the Group adheres to the UN Global Compact, committing to sustainable operations through the '3Rs' principle (Reduce, Reuse, Recycle) to protect the environment and conserve resources; the Group actively participates in 'Earth Hour' and the 'Outdoor Lighting Charter,' collaborates with the Yindii app to redistribute unsold products, and donated over 150,000 bread and festive food items to NGOs - The Group adheres to the UN Global Compact, committing to sustainable operations through the '3Rs' principle to protect the environment and conserve resources[25](index=25&type=chunk) - Actively participates in 'Earth Hour' and the 'Outdoor Lighting Charter,' collaborates with the Yindii app to redistribute unsold products, and donated over **150,000** bread and festive food items to NGOs[25](index=25&type=chunk) - Saint Honore received the '15 Years Plus Caring Company' logo, and Zoff Hong Kong received the '5 Years Plus Caring Company' logo, demonstrating their commitment to the community[25](index=25&type=chunk) [Condensed Consolidated Financial Statements](index=10&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This chapter presents the Group's unaudited condensed consolidated statement of profit or loss, statement of comprehensive income, statement of financial position, and statement of changes in equity for the six months ended June 30, 2025, providing detailed financial data reflecting operating results, financial position, and equity changes during the reporting period [Condensed Consolidated Statement of Profit or Loss](index=10&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) For the six months ended June 30, 2025, the Group's revenue was HKD 688.1 million, with a gross profit of HKD 355.4 million; core operating profit was HKD 20.425 million, profit attributable to company shareholders was HKD 15.06 million, and basic earnings per share was HK 1.9 cents Statement of Profit or Loss | Metric | 2025 (HKD Thousand) | 2024 (HKD Thousand) | | :--- | :--- | :--- | | Revenue | 688,139 | 721,654 | | Cost of Sales | (332,698) | (334,427) | | Gross Profit | 355,441 | 387,227 | | Other Income | 3,715 | 3,333 | | Selling Expenses | (243,081) | (267,269) | | Distribution Costs | (37,188) | (42,180) | | Administrative Expenses | (58,462) | (63,692) | | Core Operating Profit | 20,425 | 17,419 | | Net Interest Expense | (1,065) | (672) | | Profit Before Income Tax | 19,360 | 16,747 | | Income Tax Expense | (4,300) | (3,980) | | Profit Attributable to Company Shareholders | 15,060 | 12,767 | | Basic Earnings Per Share (HK Cents) | 1.9 | 1.6 | [Condensed Consolidated Statement of Comprehensive Income](index=11&type=section&id=Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) For the six months ended June 30, 2025, profit attributable to company shareholders was HKD 15.06 million; other comprehensive income primarily consisted of exchange differences of HKD 0.343 million, resulting in a total comprehensive income attributable to company shareholders of HKD 15.403 million Statement of Comprehensive Income | Metric | 2025 (HKD Thousand) | 2024 (HKD Thousand) | | :--- | :--- | :--- | | Profit Attributable to Company Shareholders | 15,060 | 12,767 | | Exchange Differences | 343 | (101) | | Total Comprehensive Income Attributable to Company Shareholders | 15,403 | 12,666 | [Condensed Consolidated Statement of Financial Position](index=12&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's total assets were HKD 1.153 billion, a decrease from HKD 1.213 billion as of December 31, 2024; total equity was HKD 643.3 million; non-current assets primarily included intangible assets, property, plant and equipment, and right-of-use assets; among current assets, cash and cash equivalents amounted to HKD 149.8 million; total liabilities were HKD 510 million, with current liabilities of HKD 403.8 million, including trade payables of HKD 61.563 million and gift vouchers of HKD 99.373 million Statement of Financial Position | Metric | As of June 30, 2025 (HKD Thousand) | As of Dec 31, 2024 (HKD Thousand) | | :--- | :--- | :--- | | Total Assets | 1,153,534 | 1,213,604 | | Non-current Assets | 840,239 | 878,616 | | Current Assets | 313,295 | 334,988 | | Cash and Cash Equivalents | 149,868 | 206,016 | | Total Equity | 643,347 | 635,422 | | Non-current Liabilities | 106,387 | 125,866 | | Current Liabilities | 403,800 | 452,316 | | Trade Payables | 61,563 | 71,347 | | Gift Vouchers | 99,373 | 113,350 | [Condensed Consolidated Statement of Changes in Equity](index=13&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) For the six months ended June 30, 2025, profit attributable to company shareholders was HKD 15.06 million, which, combined with exchange differences of HKD 0.343 million, resulted in a total comprehensive income of HKD 15.403 million for the period; dividends paid amounted to HKD 7.774 million; total equity at period-end was HKD 643.3 million, an increase from HKD 635.4 million at the beginning of the period Statement of Changes in Equity | Metric | As of June 30, 2025 (HKD Thousand) | As of Jan 1, 2024 (HKD Thousand) | | :--- | :--- | :--- | | Equity at Beginning of Period | 635,422 | 660,190 | | Profit Attributable to Company Shareholders | 15,060 | 12,767 | | Exchange Differences | 343 | (101) | | Total Comprehensive Income for the Period | 15,403 | 12,666 | | Employee Share Option Benefits | 296 | 156 | | Dividends Paid | (7,774) | (31,097) | | Equity at End of Period | 643,347 | 641,915 | [Notes to the Financial Statements](index=14&type=section&id=Notes%20to%20the%20Financial%20Statements) This chapter provides detailed notes to the condensed consolidated interim financial information, covering general company information, basis of financial statement preparation, revenue and segment information, breakdown of expenses, interest income and expense, income tax, earnings per share calculation, dividend policy, aging analysis of trade receivables and payables, and significant events after the reporting period [1. General Information](index=14&type=section&id=1.%20General%20Information) Convenience Retail Asia Limited and its subsidiaries primarily operate chain businesses including Saint Honore Cake Shop, Mon cher Cake Shop, and Zoff Optical Shops, as well as wholesale of bakery and seasonal products; the company is incorporated in the Cayman Islands, with its shares listed on the Main Board of the Hong Kong Stock Exchange - The Group's principal activities include the chain operation of Saint Honore Cake Shop, Mon cher Cake Shop, and Zoff Optical Shops, as well as the wholesale of bakery and seasonal products[30](index=30&type=chunk) - The Company is incorporated in the Cayman Islands, and its shares are listed on the Main Board of The Stock Exchange of Hong Kong Limited[30](index=30&type=chunk)[31](index=31&type=chunk) [2. Basis of Preparation](index=14&type=section&id=2.%20Basis%20of%20Preparation) This condensed consolidated interim financial information is prepared in accordance with Hong Kong Accounting Standard 34 'Interim Financial Reporting' issued by the Hong Kong Institute of Certified Public Accountants and the disclosure requirements of the Listing Rules of the Stock Exchange, consistent with the accounting policies and methods of computation used in the 2024 consolidated financial statements; newly adopted standards have no significant impact on this period's financial information - The financial information is prepared in accordance with Hong Kong Accounting Standard 34 'Interim Financial Reporting' and the disclosure requirements of the Listing Rules of the Stock Exchange[32](index=32&type=chunk) - The adoption of new and revised Hong Kong Financial Reporting Standards and Interpretations has no significant impact on this condensed consolidated interim financial information[32](index=32&type=chunk) [3. Revenue, Other Income and Segment Information](index=15&type=section&id=3.%20Revenue%2C%20Other%20Income%20and%20Segment%20Information) The Group primarily operates two segments: cake shop and optical; cake shop business revenue was HKD 614.9 million, and optical business revenue was HKD 73.219 million; core operating profit for the cake shop business was HKD 22.714 million, while the optical business recorded a core operating loss of HKD 2.289 million; management assesses business performance from a product/service perspective and has restated prior year comparative segment information Revenue by Source | Revenue Source | 2025 (HKD Thousand) | 2024 (HKD Thousand) | | :--- | :--- | :--- | | Bakery Product Sales Revenue | 614,920 | 648,658 | | Optical Product Sales Revenue | 73,219 | 72,996 | | **Total Revenue** | **688,139** | **721,654** | | Service Items and Other Income | 3,715 | 3,333 | Core Operating Profit/(Loss) by Segment | Segment | 2025 Core Operating Profit/(Loss) (HKD Thousand) | 2024 Core Operating Profit/(Loss) (HKD Thousand) | | :--- | :--- | :--- | | Cake Shop Business | 22,714 | 21,370 | | Optical Business | (2,289) | (3,951) | | **Group Total** | **20,425** | **17,419** | - Management primarily considers business performance from a product/service perspective (cake shop and optical businesses) starting from 2025, and has restated prior year comparative segment information[34](index=34&type=chunk) [4. Total Cost of Sales, Selling Expenses, Distribution Costs and Administrative Expenses](index=18&type=section&id=4.%20Total%20Cost%20of%20Sales%2C%20Selling%20Expenses%2C%20Distribution%20Costs%20and%20Administrative%20Expenses) For the six months ended June 30, 2025, the total cost of sales, selling expenses, distribution costs, and administrative expenses amounted to HKD 671.4 million, a decrease from HKD 707.5 million in the same period last year; employee benefit expenses were HKD 245 million, and cost of inventories sold was HKD 184.3 million Breakdown of Expenses | Expense Item | 2025 (HKD Thousand) | 2024 (HKD Thousand) | | :--- | :--- | :--- | | Cost of Inventories Sold | 184,306 | 190,795 | | Freight Charges | 18,643 | 21,414 | | Depreciation of Property, Plant and Equipment | 22,148 | 24,372 | | Depreciation of Right-of-use Assets | 75,271 | 87,483 | | Employee Benefit Expenses | 245,205 | 257,410 | | Short-term and Contingent Lease Payments | 8,513 | 7,932 | | Utilities Expenses | 21,374 | 22,064 | | Other Expenses | 94,379 | 94,507 | | **Total** | **671,429** | **707,568** | [5. Net Interest Expense](index=18&type=section&id=5.%20Net%20Interest%20Expense) For the six months ended June 30, 2025, the Group's interest income from bank deposits was HKD 1.995 million, and interest expense on lease liabilities was HKD 3.06 million, resulting in a net interest expense of HKD 1.065 million Net Interest Expense Details | Item | 2025 (HKD Thousand) | 2024 (HKD Thousand) | | :--- | :--- | :--- | | Interest Income from Bank Deposits | 1,995 | 3,149 | | Interest Expense on Lease Liabilities | (3,060) | (3,821) | | **Net Interest Expense** | **(1,065)** | **(672)** | [6. Income Tax Expense](index=19&type=section&id=6.%20Income%20Tax%20Expense) For the six months ended June 30, 2025, the Group's total income tax expense was HKD 4.3 million, comprising Hong Kong profits tax of HKD 3.92 million, overseas profits tax of HKD 1.692 million, and a deferred tax credit of HKD 1.312 million; the Hong Kong profits tax rate is 16.5% Income Tax Expense Breakdown | Item | 2025 (HKD Thousand) | 2024 (HKD Thousand) | | :--- | :--- | :--- | | Hong Kong Profits Tax | 3,920 | 2,947 | | Overseas Profits Tax | 1,692 | 1,208 | | Deferred Tax Credit | (1,312) | (175) | | **Total Income Tax Expense** | **4,300** | **3,980** | - Hong Kong profits tax is provided at a rate of **16.5%**[40](index=40&type=chunk) [7. Earnings Per Share](index=20&type=section&id=7.%20Earnings%20Per%20Share) For the six months ended June 30, 2025, profit attributable to company shareholders was HKD 15.06 million; basic earnings per share was HK 1.9 cents, and the weighted average number of shares for diluted earnings per share was 777,553,021 shares Earnings Per Share Calculation | Metric | 2025 (HKD Thousand/Shares) | 2024 (HKD Thousand/Shares) | | :--- | :--- | :--- | | Profit Attributable to Company Shareholders (HKD Thousand) | 15,060 | 12,767 | | Weighted Average Number of Ordinary Shares in Issue | 777,416,974 | 777,416,974 | | Weighted Average Number of Ordinary Shares for Diluted EPS Calculation | 777,553,021 | 777,587,482 | - Basic and diluted earnings per share are calculated based on the profit attributable to company shareholders and the weighted average number of ordinary shares in issue during the respective periods[42](index=42&type=chunk)[43](index=43&type=chunk) [8. Dividends](index=21&type=section&id=8.%20Dividends) The Board declared an interim dividend of HK 1 cent per share, totaling HKD 7.774 million, a decrease from HK 2 cents (HKD 15.548 million) in the same period of 2024 Dividend Declaration | Dividend Type | 2025 (HKD Thousand) | 2024 (HKD Thousand) | | :--- | :--- | :--- | | Interim Dividend Per Share | 1 HK Cents | 2 HK Cents | | Total Interim Dividend Declared | 7,774 | 15,548 | [9. Trade Receivables](index=21&type=section&id=9.%20Trade%20Receivables) As of June 30, 2025, total trade receivables amounted to HKD 60.458 million, an increase from HKD 37.687 million as of December 31, 2024; the credit period for most trade receivables ranges from 30 to 60 days Aging Analysis of Trade Receivables | Aging | As of June 30, 2025 (HKD Thousand) | As of Dec 31, 2024 (HKD Thousand) | | :--- | :--- | :--- | | 0 to 30 Days | 28,230 | 32,520 | | 31 to 60 Days | 7,923 | 27,151 | | 61 to 90 Days | 1,195 | 208 | | Over 90 Days | 339 | 579 | | **Total** | **60,458** | **37,687** | - The credit period for most trade receivables ranges from **30 to 60 days**[46](index=46&type=chunk) [10. Trade Payables](index=21&type=section&id=10.%20Trade%20Payables) As of June 30, 2025, total trade payables amounted to HKD 61.563 million, a decrease from HKD 71.347 million as of December 31, 2024 Aging Analysis of Trade Payables | Aging | As of June 30, 2025 (HKD Thousand) | As of Dec 31, 2024 (HKD Thousand) | | :--- | :--- | :--- | | 0 to 30 Days | 33,928 | 39,983 | | 31 to 60 Days | 23,894 | 27,924 | | 61 to 90 Days | 893 | 953 | | Over 90 Days | 2,848 | 2,487 | | **Total** | **61,563** | **71,347** | [11. Events After the Reporting Period](index=22&type=section&id=11.%20Events%20After%20the%20Reporting%20Period) In July 2025, the Group completed two significant transactions: signing a factory lease agreement in Tai Po Industrial Estate to expand production capacity and enhance certification standards, recognizing approximately HKD 9 million in right-of-use assets; and acquiring a 20% equity interest in a Hong Kong food import, production, and distribution company for HKD 3 million, to strengthen its ingredient sourcing network and retail business model - In July 2025, the Group signed a factory lease agreement in Tai Po Industrial Estate, which will recognize approximately **HKD 9 million** in right-of-use assets to expand and enhance production capacity[48](index=48&type=chunk) - In July 2025, the Group acquired a **20%** equity interest in a Hong Kong food import, production, and distribution company for **HKD 3 million** to strengthen its ingredient sourcing network and retail business model[48](index=48&type=chunk) [Corporate Governance](index=23&type=section&id=Corporate%20Governance) The Group adheres to sound corporate governance principles, fully complying with the Corporate Governance Code set out in Appendix C1 of the Listing Rules; the Board is responsible for overall strategy, with separate roles for the Chairman and CEO, and has established Audit, Nomination, and Remuneration Committees, primarily composed of independent non-executive directors, ensuring independence - The Group fully complies with the Corporate Governance Code set out in Appendix C1 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[49](index=49&type=chunk) - The roles of Chairman and Chief Executive Officer are held by different individuals, and the Board has established three committees: Audit, Nomination, and Remuneration, primarily composed of independent non-executive directors[49](index=49&type=chunk) [Audit Committee](index=23&type=section&id=Audit%20Committee) The Audit Committee is primarily responsible for reviewing the Group's financial reporting, risk management, internal controls, and corporate governance matters, and making recommendations to the Board; Committee members possess professional qualifications, have direct access to the Corporate Governance Department and independent auditors, and have reviewed the unaudited interim financial information for the current period - The Audit Committee is responsible for reviewing the Group's financial reporting, risk management, internal controls, and corporate governance matters[50](index=50&type=chunk) - Committee members possess appropriate professional qualifications, have direct access to the Corporate Governance Department and independent auditors, and have reviewed the unaudited interim financial information for the current period[50](index=50&type=chunk)[51](index=51&type=chunk) [Securities Transactions by Directors and Relevant Employees](index=24&type=section&id=Securities%20Transactions%20by%20Directors%20and%20Relevant%20Employees) The Group has adopted a code for securities transactions no less exacting than the Model Code for Securities Transactions by Directors of Listed Issuers set out in Appendix C3 of the Listing Rules, and requires relevant employees to comply; during the reporting period, the Company was not aware of any non-compliance by directors or relevant employees - The Group has adopted a code for securities transactions no less exacting than Appendix C3 of the Listing Rules, governing securities transactions by directors and relevant employees[52](index=52&type=chunk) - During the reporting period, the Company was not aware of any non-compliance by directors or relevant employees[52](index=52&type=chunk) [Risk Management and Internal Control](index=24&type=section&id=Risk%20Management%20and%20Internal%20Control) The Board is responsible for the Group's risk management and internal control systems, reviewing their effectiveness with the assistance of the Audit Committee; for the six months ended June 30, 2025, the Group's risk management and internal control systems were deemed established, adequate, and operating effectively to identify, assess, and manage significant risks - The Board is responsible for the Group's risk management and internal control systems, reviewing their effectiveness with the assistance of the Audit Committee[53](index=53&type=chunk) - For the six months ended June 30, 2025, the Group's risk management and internal control systems were deemed established, adequate, and operating effectively[53](index=53&type=chunk) [Other Information](index=25&type=section&id=Other%20Information) This chapter contains supplementary information regarding the Group's listed securities transactions, interim dividend declaration, and suspension of share registration [Purchase, Sale or Redemption of the Company's Listed Securities](index=25&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) During the reporting period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities - During the reporting period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[54](index=54&type=chunk) [Interim Dividend](index=25&type=section&id=Interim%20Dividend) The Board resolved to declare an interim dividend of HK 1 cent per share for the six months ended June 30, 2025 - The Board resolved to declare an interim dividend of **HK 1 cent** per share for the six months ended June 30, 2025[55](index=55&type=chunk) [Closure of Register of Members](index=25&type=section&id=Closure%20of%20Register%20of%20Members) To facilitate the payment of the interim dividend, the Company will suspend its register of members from September 1 to September 2, 2025; shareholders must register their transfers by 4:30 p.m. on August 29, 2025, to be eligible for the dividend - The Company will suspend its register of members from **September 1 to September 2, 2025**, to determine eligible shareholders for the interim dividend[56](index=56&type=chunk) - Shareholders must register their transfers by **4:30 p.m. on August 29, 2025**, to be eligible for the interim dividend[56](index=56&type=chunk)

[Performance Highlights and Chairman's Report](index=1&type=section&id=I.%20Performance%20Highlights%20and%20Chairman's%20Report) [Performance Highlights](index=1&type=section&id=1.1%20Performance%20Highlights) This section outlines the unaudited results for the six months ended June 30, 2025, including revenue, EBITDA, EBIT, reported profit, underlying profit, and interim dividend per share, compared to the same period last year, providing data under both IFRS 16 post-adoption and pre-adoption accounting standards 2025 H1 Key Financial Data (Post-IFRS 16) | Metric | 2025 (HKD million) | 2024 (HKD million) | Change | | :--- | :--- | :--- | :--- | | Total Revenue | 240,663 | 232,644 | - | | Total EBITDA | 56,983 | 63,422 | - | | Total EBIT | 23,161 | 30,955 | - | | Reported Profit (Underlying) | 11,321 | 10,205 | +11% | | Reported Profit (One-off Items) | (10,469) | - | - | | Reported Profit (Total) | 852 | 10,205 | -92% | | Reported Earnings Per Share | 0.22 | 2.66 | -92% | | Interim Dividend Per Share | 0.710 | 0.688 | +3% | 2025 H1 Key Financial Data (Pre-IFRS 16) | Metric | 2025 (HKD million) | 2024 (HKD million) | Change (Reported Currency) | Change (Local Currency) | | :--- | :--- | :--- | :--- | :--- | | Total Revenue | 240,663 | 232,644 | +3% | +3% | | Total EBITDA | 44,998 | 52,201 | -14% | -15% | | Total EBIT | 20,487 | 28,843 | -29% | -30% | | Reported Profit | 440 | 10,192 | -96% | -98% | - The Group has adopted International Financial Reporting Standard 16 'Leases' ('IFRS 16') for its statutory reporting, while its management reporting continues to adopt the previous leasing accounting standard, International Accounting Standard 17 'Leases' ('IAS 17')[2](index=2&type=chunk) [Chairman's Report](index=2&type=section&id=1.2%20Chairman's%20Report) The Chairman's Report highlights a challenging economic environment in the first half of 2025, yet the Group achieved robust underlying profit growth, primarily driven by the merger of its UK telecom business with Vodafone, and strong performance in the Ports, Retail, and Infrastructure divisions, also noting a one-off non-cash loss and interim dividend distribution [Macroeconomic Environment and Group Performance](index=2&type=section&id=1.2.1%20Macroeconomic%20Environment%20and%20Group%20Performance) The economic environment in the first half of 2025 was challenging due to escalating geopolitical and trade tensions and weak consumer sentiment, with the Group's performance favorably impacted by exchange rate fluctuations but unfavorably by commodity prices, achieving a robust 11% growth in underlying profit net on a pre-IFRS 16 basis - The economic situation in the first half of **2025** was challenging, with escalating geopolitical and trade tensions, coupled with weak consumer sentiment[3](index=3&type=chunk) - Overall, exchange rate fluctuations had a favorable impact on performance, while commodity price movements did not[3](index=3&type=chunk) 2025 H1 Underlying Profit Growth (Pre-IFRS 16) | Metric | 2025 H1 (HKD million) | 2024 H1 (HKD million) | Change | | :--- | :--- | :--- | :--- | | Underlying Net Profit | 11,362 | 10,192 | +11% | | Underlying EBITDA | 55,920 | 52,201 | +7% | | Underlying EBIT | 31,409 | 28,843 | +9% | - Growth was driven by enhanced performance in the Ports division, improvements in the Retail division, increased contributions from the Infrastructure division, and strong performance from CK Hutchison Group Telecom and treasury operations[3](index=3&type=chunk) [UK Telecom Business Merger](index=2&type=section&id=1.2.2%20UK%20Telecom%20Business%20Merger) The Group completed the merger of its UK telecom business with Vodafone UK in May 2025, recognizing a one-off non-cash loss but receiving approximately GBP 1.3 billion in net cash proceeds - The Group completed a major strategic transaction in May **2025**, the merger of its UK telecom business with Vodafone UK ('UK Merger')[3](index=3&type=chunk) - On a pre-IFRS **16** basis, the Group recognized a one-off non-cash loss and related impact of **HKD 10.922 billion** from the UK Merger[4](index=4&type=chunk) - The Group also received net cash proceeds of approximately **GBP 1.3 billion** from the merger[4](index=4&type=chunk) Impact of UK Merger on Reported Profit | Metric | 2025 H1 (HKD million) | 2024 H1 (HKD million) | Change | | :--- | :--- | :--- | :--- | | Reported Profit (Pre-IFRS 16) | 440 | 10,192 | -96% | | Reported Profit (Post-IFRS 16) | 852 | 10,205 | -92% | | Reported Earnings Per Share (Post-IFRS 16) | 0.22 | 2.66 | -92% | [Dividend Policy](index=2&type=section&id=1.2.3%20Dividend%20Policy) The Board recommended an interim dividend of HKD 0.71 per share, representing an increase from the same period last year Interim Dividend Per Share | Metric | 2025 H1 (HKD) | 2024 H1 (HKD) | Change | | :--- | :--- | :--- | :--- | | Interim Dividend Per Share | 0.710 | 0.688 | +3% | - The Board recommended an interim dividend to be paid on Thursday, September **25**, **2025**, to shareholders whose names appear on the Company's register of members on Tuesday, September **16**, **2025**[5](index=5&type=chunk) [Business Segment Performance](index=3&type=section&id=II.%20Business%20Segment%20Performance) [Ports and Related Services](index=3&type=section&id=2.1%20Ports%20and%20Related%20Services) The Ports and Related Services division reported a 9% year-on-year increase in revenue, with EBITDA and EBIT growing by 10% and 12% respectively in the first half of 2025, driven by higher throughput, increased storage income, and effective cost management, with significant full-year profit growth expected Ports and Related Services Division 2025 H1 Performance | Metric | 2025 H1 (HKD million) | 2024 H1 (HKD million) | Change | Change (Local Currency) | | :--- | :--- | :--- | :--- | :--- | | Total Revenue | 23,597 | 21,594 | +9% | +10% | | EBITDA | 8,719 | 7,938 | +10% | +8% | | EBIT | 6,508 | 5,785 | +12% | +11% | | Throughput (million TEUs) | 44.0 | 42.3 | +4% | - | - The increase in throughput was mainly driven by Yantian Port, Shanghai Port, and container terminals in Asia and the Middle East[7](index=7&type=chunk) - Storage income from Mexico and European ports surged by **27%**[7](index=7&type=chunk) - The Ports division made significant progress in reducing its environmental footprint, with Scope **1** and **2** emissions per TEU decreasing by nearly **4%** year-on-year, and diesel consumption reducing by **5%** year-on-year[37](index=37&type=chunk) [Retail](index=4&type=section&id=2.2%20Retail) The Retail division's total revenue grew by 8%, with EBITDA and EBIT increasing by 12% and 14% respectively in the first half of 2025, primarily driven by significant growth in health and beauty businesses in the UK, Poland, and the Philippines, though China's business was affected by weak consumer demand, with future growth strategies focusing on optimizing store locations, expanding online presence, and enhancing customer experience Retail Division 2025 H1 Performance | Metric | 2025 H1 (HKD million) | 2024 H1 (HKD million) | Change | Change (Local Currency) | | :--- | :--- | :--- | :--- | :--- | | Total Revenue | 98,840 | 91,469 | +8% | +6% | | EBITDA | 7,974 | 7,089 | +12% | +8% | | EBIT | 6,180 | 5,433 | +14% | +9% | | Number of Stores | 16,935 | 16,548 | +2% | - | - Significant growth was observed in the health and beauty businesses in the UK, Poland, and the Philippines[9](index=9&type=chunk) - The China health and beauty business continued to underperform due to weak consumer demand, resulting in a **4%** reduction in store count[9](index=9&type=chunk)[39](index=39&type=chunk) - The number of dark stores for the China health and beauty business increased from **131** as of December **31**, **2024**, to **394** as of June **30**, **2025**, further enhancing online business capabilities[39](index=39&type=chunk) - The

[Performance Summary](index=1&type=section&id=Performance%20Summary) [Key Financial Indicators](index=1&type=section&id=Key%20Financial%20Indicators) In H1 2025, total revenue decreased by 6.0% to RMB 3.83 billion, while operating profit rose 40.8% to RMB 840 million and profit for the period surged 132.4% to RMB 1.88 billion, primarily due to a deferred tax credit, with adjusted net profit increasing 121.0% to RMB 1.95 billion Financial Summary for the Six Months Ended June 30, 2025 | Indicator | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 3,827,117 | 4,070,493 | -6.0% | | Gross Profit | 1,392,485 | 1,425,731 | -2.3% | | Operating Profit | 844,506 | 599,933 | +40.8% | | Profit for the Period | 1,882,142 | 809,949 | +132.4% | | Adjusted Net Profit | 1,946,353 | 880,749 | +121.0% | - The significant increase in profit for the period was primarily due to the recognition of a deferred income tax credit of **RMB 849 million**, arising from a wholly-owned subsidiary's tax losses carried forward[3](index=3&type=chunk)[22](index=22&type=chunk) [Non-IFRS Measures Explanation](index=2&type=section&id=Non-IFRS%20Measures) The company utilizes adjusted operating profit and adjusted net profit as supplementary financial measures to exclude non-cash items, aiming to better reflect core operating performance and enable comparative analysis, with a reminder that these metrics should not replace IFRS-reported results - The company uses non-IFRS measures, such as adjusted operating profit and adjusted net profit, to eliminate the impact of certain non-cash items like share-based compensation expenses, providing a clearer view of operating performance[4](index=4&type=chunk) [Management Discussion and Analysis](index=3&type=section&id=Management%20Discussion%20and%20Analysis) [Business Review and Outlook](index=3&type=section&id=Business%20Review%20and%20Outlook) In H1 2025, the company focused on high-quality development of its core music ecosystem, enhancing user stickiness with DAU/MAU ratio stable above 30%, while member subscription revenue grew 15.2%, boosting gross margin to 36.4%, with future strategies centered on deepening content, product innovation, and community building to improve user monetization and profitability - User engagement metrics improved, with the daily active users to monthly active users ratio stable above **30%**, and increased listening time on mobile devices[6](index=6&type=chunk) - Member subscription revenue increased by **15.2%** year-over-year, primarily driven by the expansion of the subscriber base[8](index=8&type=chunk) - Gross margin improved from **35.0%** in the prior period to **36.4%**, benefiting from business scale expansion, strong monetization, and cost optimization[8](index=8&type=chunk)[22](index=22&type=chunk) - Future strategic priorities include expanding differentiated content, optimizing user experience, fostering community ecosystems, enhancing user monetization, and continuously optimizing costs[9](index=9&type=chunk)[11](index=11&type=chunk) [Detailed Core Strategies](index=4&type=section&id=Detailed%20Core%20Strategies) The company made significant progress in core strategy execution, expanding its copyrighted music library through collaborations with Korean labels and Chinese artists, fostering an independent musician ecosystem with over **819,000** registered artists, and enhancing user experience through product innovations like 'Shenguang Player' and extending services to multi-terminal scenarios including in-car systems - Expanded copyrighted content through collaborations with Korean labels RBW and StarShip Entertainment, and renowned Chinese musicians such as Li Jian and Lay Zhang[10](index=10&type=chunk) - As of June 2025, the platform had over **819,000** registered independent musicians who uploaded approximately **4.8 million** music tracks[12](index=12&type=chunk) - Self-produced rap tracks like 'Dilemma' and 'Mochouxiang' gained market popularity, demonstrating the company's strength in unique content creation[15](index=15&type=chunk) - Enhanced user experience through product innovations, such as launching the 'Shenguang Player' to improve audio-visual enjoyment, and expanding music consumption scenarios to in-car systems of brands like Jetour and Lynk & Co[20](index=20&type=chunk)[21](index=21&type=chunk) [Financial Review](index=8&type=section&id=Financial%20Review) [Financial Performance Overview](index=8&type=section&id=Financial%20Performance%20Overview) During the reporting period, total revenue was RMB 3.83 billion, gross profit was RMB 1.39 billion, and gross margin expanded from 35.0% to 36.4%, with operating profit increasing to RMB 840 million primarily due to reduced promotion and advertising expenses, while net profit reached RMB 1.88 billion, up 132.4%, including RMB 849 million in deferred tax credits, and adjusted net profit was RMB 1.95 billion, up 121.0% - Gross margin expanded from **35.0%** in the prior period to **36.4%**, primarily due to increased online music service revenue and improved operational efficiency[22](index=22&type=chunk) - Operating profit increased from **RMB 600 million** to **RMB 840 million**, mainly due to a more prudent promotion strategy resulting in reduced promotion and advertising expenses[22](index=22&type=chunk) - Net profit significantly increased from **RMB 810 million** to **RMB 1.88 billion**, primarily due to the recognition of **RMB 849 million** in deferred income tax assets[22](index=22&type=chunk) [Revenue Analysis](index=8&type=section&id=Revenue%20Analysis) Total revenue decreased by 6.0% year-over-year, primarily due to a significant 43.1% decline in social entertainment services and other revenue resulting from a prudent operating strategy, while core online music service revenue showed strong performance, growing 15.9% to RMB 2.97 billion, with member subscription services being a key driver, reflecting healthy core business growth Revenue Composition (For the Six Months Ended June 30) | Revenue Category | 2025 (RMB millions) | 2024 (RMB millions) | YoY Change | | :--- | :--- | :--- | :--- | | Online Music Services | 2,967.3 | 2,559.7 | +15.9% | | Social Entertainment Services and Others | 859.8 | 1,510.8 | -43.1% | | **Total** | **3,827.1** | **4,070.5** | **-6.0%** | - Member subscription service revenue within online music services increased from **RMB 2.14 billion** to **RMB 2.47 billion**, serving as the primary driver for online music service growth[23](index=23&type=chunk) [Cost and Expense Analysis](index=8&type=section&id=Cost%20and%20Expense%20Analysis) The company achieved significant cost control, with operating costs decreasing by 7.9% year-over-year, primarily due to reduced revenue sharing fees from lower social entertainment revenue, while sales and marketing expenses sharply declined by 55.8% reflecting a more prudent promotion strategy, and R&D expenses slightly decreased by 4.2%, indicating improved operational efficiency - Operating costs decreased by **7.9%** year-over-year to **RMB 2.43 billion**, primarily due to reduced revenue sharing fees as social entertainment service revenue declined[24](index=24&type=chunk) - Sales and marketing expenses significantly decreased by **55.8%** year-over-year to **RMB 163 million**, mainly due to reduced promotion and advertising expenses[26](index=26&type=chunk) - Research and development expenses decreased by **4.2%** year-over-year to **RMB 379 million**, primarily due to improved operational efficiency from enhanced utilization of technological resources[28](index=28&type=chunk) [Non-IFRS Measures Reconciliation](index=10&type=section&id=Non-IFRS%20Measures%20Reconciliation) During the reporting period, adjusted operating profit was RMB 905 million, up 35.0% year-over-year, and adjusted net profit was RMB 1.946 billion, up 121.0%, with these adjustments primarily excluding the impact of approximately **RMB 60.85 million** in share-based compensation expenses (non-cash items) Reconciliation of Operating Profit and Net Profit to Adjusted Measures (For the Six Months Ended June 30) | Indicator (RMB thousands) | 2025 | 2024 | | :--- | :--- | :--- | | Operating Profit | 844,506 | 599,933 | | Add: Share-based compensation expenses | 60,854 | 70,917 | | **Adjusted Operating Profit** | **905,360** | **670,850** | | Profit for the period attributable to equity holders of the Company | 1,885,499 | 809,832 | | Add: Share-based compensation expenses | 60,854 | 70,917 | | **Adjusted Net Profit** | **1,946,353** | **880,749** | [Unaudited Consolidated Financial Statements](index=11&type=section&id=Unaudited%20Consolidated%20Financial%20Statements) [Consolidated Statement of Comprehensive Income](index=11&type=section&id=Consolidated%20Statement%20of%20Comprehensive%20Income) For the six months ended June 30, 2025, the company reported revenue of RMB 3.83 billion, gross profit of RMB 1.39 billion, operating profit of RMB 840 million, and profit for the period of RMB 1.88 billion, with basic earnings per share attributable to equity holders of the company at RMB 8.96 and diluted earnings per share at RMB 8.85, representing significant growth from the prior period Key Data from Consolidated Statement of Comprehensive Income (For the Six Months Ended June 30) | Indicator (RMB thousands) | 2025 | 2024 | | :--- | :--- | :--- | | Revenue | 3,827,117 | 4,070,493 | | Gross Profit | 1,392,485 | 1,425,731 | | Operating Profit | 844,506 | 599,933 | | Profit for the Period | 1,882,142 | 809,949 | | Basic Earnings Per Share (RMB) | 8.96 | 3.88 | | Diluted Earnings Per Share (RMB) | 8.85 | 3.84 | [Consolidated Statement of Financial Position](index=13&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the company's total assets increased to RMB 15.29 billion, total liabilities decreased to RMB 3.17 billion, and total equity rose to RMB 12.12 billion, indicating a robust financial position, with asset growth primarily driven by the recognition of RMB 849 million in deferred income tax assets and increased bank deposits, and cash and cash equivalents at RMB 2.08 billion Summary of Consolidated Statement of Financial Position | Indicator (RMB thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Non-current Assets | 2,475,532 | 1,630,064 | | Current Assets | 12,811,898 | 11,952,185 | | **Total Assets** | **15,287,430** | **13,582,249** | | Current Liabilities | 3,068,883 | 3,312,085 | | **Total Liabilities** | **3,170,808** | **3,400,736** | | **Total Equity** | **12,116,622** | **10,181,513** | - Non-current assets significantly increased, primarily due to the addition of **RMB 849 million** in deferred income tax assets[39](index=39&type=chunk) [Notes to Financial Statements](index=15&type=section&id=Notes%20to%20Financial%20Statements) [Revenue and Segment Information](index=16&type=section&id=Revenue%20and%20Segment%20Information) The company's revenue primarily derives from online music services and social entertainment services and others, with online music service revenue at RMB 2.97 billion and social entertainment services and other revenue at RMB 860 million during the reporting period, operating as a single segment with most revenue and non-current assets from China, and having one major customer A contributing over 10% of total revenue - The company's business is operated and managed as a single segment, thus no separate segment information is presented[47](index=47&type=chunk) - In H1 2025, customer A contributed **RMB 501 million** in revenue, accounting for **13.1%** of total revenue, becoming a major customer[49](index=49&type=chunk) [Taxation](index=17&type=section&id=Taxation) During the reporting period, the company recorded an income tax credit of RMB 814 million, compared to an expense of RMB 3.63 million in the prior period, primarily due to the recognition of RMB 849 million in deferred tax assets for a wholly-owned subsidiary's accumulated tax losses, and also recognized a top-up tax expense of RMB 30.7 million under OECD Pillar Two rules - The company recorded a total income tax credit of **RMB 814 million**, primarily from the recognition of **RMB 849 million** in deferred income tax assets[51](index=51&type=chunk)[56](index=56&type=chunk) - Due to the implementation of Pillar Two rules in Hong Kong, the Group recognized a top-up tax expense of **RMB 30.7 million** to ensure the effective tax rate is not lower than the **15%** global minimum tax rate[55](index=55&type=chunk) [Earnings Per Share](index=18&type=section&id=Earnings%20Per%20Share) Earnings per share significantly improved due to substantial net profit growth, with basic earnings per share at **RMB 8.96** for the six months ended June 30, 2025, a significant increase from **RMB 3.88** in the prior period, and diluted earnings per share at **RMB 8.85**, higher than **RMB 3.84** in the prior period Earnings Per Share Calculation | Indicator | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Basic Earnings Per Share (RMB) | 8.96 | 3.88 | | Diluted Earnings Per Share (RMB) | 8.85 | 3.84 | [Corporate Governance and Other Information](index=20&type=section&id=Corporate%20Governance%20and%20Other%20Information) [Compliance with Corporate Governance Code](index=20&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) The company complied with all applicable provisions of the Corporate Governance Code during the reporting period, with one deviation: Mr. Ding Lei holds both Chairman and CEO roles, which the Board believes ensures consistent leadership and efficient strategic planning, with all major decisions made in consultation with the Board, including independent non-executive directors, without compromising power balance - The company deviates from Code Provision C.2.1 of the Corporate Governance Code, as the roles of Chairman and Chief Executive Officer are held by the same individual, Mr. Ding Lei[65](index=65&type=chunk) - The Board believes that Mr. Ding Lei's dual role ensures leadership stability and decision-making efficiency, with power balance safeguarded through collective Board decisions[65](index=65&type=chunk) [Use of Proceeds and Dividends](index=21&type=section&id=Use%20of%20Proceeds%20and%20Dividends) As of June 30, 2025, approximately **HKD 3.16 billion** in net proceeds from the company's December 2021 global offering remained unutilized, held as short-term bank deposits, and are expected to be deployed within the next 18 months, while the Board resolved not to declare an interim dividend for the six months ended June 30, 2025 - Approximately **HKD 3.16 billion** in net proceeds from the 2021 global offering remained unutilized as of the end of the reporting period, expected to be deployed within the next **18 months**[68](index=68&type=chunk) - The Board resolved not to declare an interim dividend for the six months ended June 30, 2025[69](index=69&type=chunk)

Performance Overview The company reported a 6.5% decrease in total revenue to HKD 27.36 billion for the six months ended June 30, 2025, but net profit attributable to shareholders increased by 27.5% to HKD 7.71 billion, driven by a significant 218.5% rise in property development profit [Interim Results Summary](index=1&type=section&id=Interim%20Results%20Summary) For the six months ended June 30, 2025, MTR Corporation Limited recorded total revenue of HKD 27.36 billion, a 6.5% year-on-year decrease, with net profit attributable to shareholders increasing by 27.5% to HKD 7.71 billion, despite a decline in recurring business profit, due to a substantial 218.5% growth in property development profit For the six months ended June 30, 2025, Key Performance Indicators (million HKD) | Indicator | 2025 (million HKD) | 2024 (million HKD) | Change (%) | | :--- | :--- | :--- | :--- | | Total Revenue | 27,360 | 29,271 | (6.5)% | | Recurring Business Profit | 3,391 | 4,024 | (15.7)% | | Property Development Profit | 5,542 | 1,740 | 218.5% | | Fair Value Measurement of Investment Properties (Loss)/Gain | (1,224) | 280 | n.m. | | Net Profit Attributable to Equity Holders of the Company | 7,709 | 6,044 | 27.5% | | Interim Ordinary Dividend Declared Per Share | HKD 0.42 | - | - | - Hong Kong railway operations revenue showed **stable growth**, primarily driven by increased passenger volume from cross-boundary and High Speed Rail (Hong Kong Section) services[5](index=5&type=chunk) - Hong Kong property development profit reached **HKD 5.5 billion**, mainly from Ho Man Tin Station Phases 1 and 2, and "The Southside" Phases 3 and 5 projects[5](index=5&type=chunk) - The Northern Link (Phase 1) project agreement has been signed with the government, and progress continues on projects such as Sydney Metro M1, Shenzhen Metro Line 13, and Beijing Metro Line 17[5](index=5&type=chunk) - Operating rights for the UK's Elizabeth Line and South Western Railway were transferred to the next operator in May 2025[5](index=5&type=chunk) [CEO Review and Outlook](index=24&type=section&id=CEO%20Review%20and%20Outlook) CEO Dr. Jacob Kam reviewed MTR's H1 2025 performance in railway expansion, operational efficiency, financial strength, and sustainability, outlining future plans to support Hong Kong's development, address macroeconomic challenges, and explore opportunities in Mainland China and overseas, emphasizing the "Rail plus Property" model and the signing of the Northern Link (Phase 1) project agreement - MTR made **significant progress** in expanding new railway projects in H1 2025, with steady passenger growth and robust operating revenue[67](index=67&type=chunk) - The company is committed to investing approximately **HKD 140 billion** in new railway projects under the "Railway Development Strategy 2014" and "Blueprint for Hong Kong's Major Transport Infrastructure Development," and has reserved **HKD 65 billion** for railway facility upgrades and maintenance between 2023 and 2027[67](index=67&type=chunk) - Successfully issued **USD 3 billion** in public notes and an inaugural **USD 3 billion** corporate subordinated perpetual securities to enhance financial strength for major infrastructure plans[68](index=68&type=chunk) - The Northern Link (Phase 1) project agreement was signed with the government on July 8, 2025, covering partial main line construction and detailed planning and design for the spur line, targeting simultaneous opening no later than 2034[69](index=69&type=chunk) - In H1 2025, the punctuality and scheduled train service delivery of Hong Kong's heavy rail network both maintained a **world-class level of 99.9%**[70](index=70&type=chunk) - Fares for 2025/2026 remain unchanged, with fare adjustment rates of +1.45% and the previously deferred +1.91% both postponed to 2026/2027[71](index=71&type=chunk) - The property business currently has **10 residential property projects** under development, expected to provide approximately **9,000 units**, and will recognize profits from "LOHAS Park" Phase 12 and "The Southside" Phase 5 projects[71](index=71&type=chunk) - Mainland China and international operations continue to explore new opportunities, with progress on Shenzhen Metro Line 13 and Beijing Metro Line 17, but operating rights for the UK's Elizabeth Line and South Western Railway have been transferred[72](index=72&type=chunk) - Looking ahead, the company will continue to support Hong Kong's sustainable growth through projects under the "Railway Development Strategy 2014" and "Blueprint for Hong Kong's Major Transport Infrastructure Development," and seek development opportunities in Mainland China and overseas[74](index=74&type=chunk) - Macroeconomic uncertainties, an aging population, and changes in travel patterns (e.g., cross-boundary consumption, slower recovery of inbound tourism, reduced night-time passenger flow) may impact passenger volume and retail performance[74](index=74&type=chunk)[76](index=76&type=chunk) Consolidated Financial Statements The group's total revenue for the six months ended June 30, 2025, was HKD 27.36 billion, a 6.5% decrease, while net profit attributable to shareholders rose 27.5% to HKD 7.71 billion, driven by property development gains, and total assets increased 9.6% to HKD 402.60 billion, supported by strong cash and perpetual capital securities [Consolidated Income Statement](index=2&type=section&id=Consolidated%20Income%20Statement) For the six months ended June 30, 2025, the Group's total revenue was HKD 27.36 billion, a 6.5% decrease year-on-year, with net profit attributable to equity holders of the Company increasing by 27.5% to HKD 7.71 billion, driven by a significant rise in property development profit despite a decline in Mainland China and international railway and property leasing and management subsidiary revenue Consolidated Income Statement Key Revenue Items (million HKD) | Revenue Source | 2025 | 2024 | | :--- | :--- | :--- | | Hong Kong Railway Operations Revenue | 11,509 | 11,138 | | Hong Kong Station Commercial Business Revenue | 2,621 | 2,638 | | Hong Kong Property Leasing and Management Business Revenue | 2,657 | 2,688 | | Mainland China and International Railway, Property Leasing and Management Subsidiary Revenue | 10,183 | 12,429 | | Other Business Revenue | 376 | 378 | | Mainland China Property Development Revenue | 14 | - | | **Total Revenue** | **27,360** | **29,271** | Consolidated Income Statement Key Profit Items (million HKD) | Profit Item | 2025 | 2024 | | :--- | :--- | :--- | | Operating Profit before Depreciation, Amortisation and Annual Payment | 14,208 | 11,416 | | Profit before Interest, Finance Expenses and Tax | 10,176 | 7,749 | | Profit for the Period | 7,822 | 6,144 | | Net Profit Attributable to Equity Holders of the Company | 7,709 | 6,044 | | Basic Earnings Per Share | HKD 1.24 | HKD 0.97 | | Diluted Earnings Per Share | HKD 1.24 | HKD 0.97 | - Hong Kong property development profit significantly increased to **HKD 5.542 billion** (2024: HKD 1.740 billion), primarily from Hong Kong projects[11](index=11&type=chunk) - Fair value measurement of investment properties shifted from a **gain of HKD 280 million** to a **loss of HKD 1.224 billion**[11](index=11&type=chunk) [Consolidated Statement of Comprehensive Income](index=5&type=section&id=Consolidated%20Statement%20of%20Comprehensive%20Income) For the six months ended June 30, 2025, the Group's total comprehensive income for the period increased to HKD 7.08 billion from HKD 5.76 billion in the prior year, primarily due to a positive shift in exchange differences on translation, despite revaluation losses on owner-occupied properties and net changes in hedging reserves Consolidated Statement of Comprehensive Income Key Items (million HKD) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Profit for the Period | 7,822 | 6,144 | | Revaluation Loss on Owner-Occupied Properties | (136) | (59) | | Exchange Differences on Translation | 728 | (478) | | Net Change in Hedging Reserve | (1,362) | 155 | | **Total Comprehensive Income for the Period** | **7,077** | **5,755** | | Total Comprehensive Income Attributable to Equity Holders of the Company | 6,939 | 5,662 | - Exchange differences on translation shifted from a **loss of HKD 478 million** in 2024 to a **gain of HKD 728 million** in 2025, positively impacting comprehensive income[12](index=12&type=chunk) - Net change in hedging reserve shifted from a **gain of HKD 155 million** in 2024 to a **loss of HKD 1.362 billion** in 2025[12](index=12&type=chunk) [Consolidated Statement of Financial Position](index=6&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's total assets grew 9.6% to HKD 402.60 billion, driven by a substantial increase in cash, bank balances, and deposits, and growth in securities investments, while total liabilities increased 5.5% to HKD 191.39 billion due to higher net loan drawdowns, resulting in a 13.5% increase in net assets to HKD 211.21 billion Consolidated Statement of Financial Position Key Asset Items (million HKD) | Asset Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Fixed Assets | 241,997 | 243,190 | | Properties Under Development | 42,628 | 42,300 | | Interests in Associates and Joint Ventures | 13,590 | 13,039 | | Securities Investments | 6,693 | 1,952 | | Trade and Other Receivables | 11,506 | 15,780 | | Cash, Bank Balances and Deposits | 56,796 | 27,886 | | **Total Assets** | **402,597** | **367,499** | Consolidated Statement of Financial Position Key Liabilities and Equity Items (million HKD) | Liabilities and Equity Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Short-Term Loans | 17 | 847 | | Trade and Other Payables and Provisions | 64,265 | 69,417 | | Loans and Other Liabilities | 92,156 | 76,721 | | **Total Liabilities** | **191,390** | **181,366** | | Net Assets | 211,207 | 186,133 | | Total Equity Attributable to Equity Holders of the Company | 186,976 | 185,625 | | Perpetual Capital Securities | 23,574 | - | | **Total Equity** | **211,207** | **186,133** | - Cash, bank balances and deposits significantly increased by **103.7% to HKD 56.796 billion**, primarily due to the issuance of perpetual capital securities[13](index=13&type=chunk) - Perpetual capital securities were first recognized as equity, amounting to **HKD 23.574 billion**[13](index=13&type=chunk) Notes to the Financial Statements This section provides detailed notes on the interim financial report's review, accounting policies, retained profits, property development and investment property valuations, income tax, dividends, earnings per share, segment information, government-entrusted railway projects, receivables/payables, perpetual capital securities, and asset charges [Review and Basis of Preparation of Interim Financial Report](index=7&type=section&id=Review%20and%20Basis%20of%20Preparation%20of%20Interim%20Financial%20Report) This interim results announcement is extracted from the unaudited interim financial report, which has been reviewed by KPMG with an unmodified conclusion, prepared in accordance with HKEX Listing Rules, and adopts the same accounting policies as the 2024 annual financial statements, with no significant impact from new accounting standards except for perpetual capital securities - The interim financial report is unaudited but has been reviewed by KPMG in accordance with Hong Kong Standard on Review Engagements 2410, resulting in an **unmodified conclusion**[14](index=14&type=chunk) - The report is prepared in compliance with the disclosure requirements of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and should be read in conjunction with the 2024 annual financial statements[15](index=15&type=chunk) - Except for new accounting policies related to perpetual capital securities, the accounting policies adopted in preparing the interim financial report are the same as those in the 2024 annual financial statements, with **no significant impact** from newly revised standards[15](index=15&type=chunk) [Retained Profits](index=8&type=section&id=Retained%20Profits) As of June 30, 2025, the company's retained profits balance increased to HKD 125.62 billion from HKD 123.45 billion at the beginning of the year, with profit attributable to equity holders of HKD 7.71 billion partially offset by proposed and approved dividends of HKD 5.54 billion Retained Profits Movement (million HKD) | Item | Balance as of June 30, 2025 | | :--- | :--- | | Balance as of January 1, 2025 | 123,454 | | Profit for the Period Attributable to Equity Holders of the Company | 7,709 | | Award Shares Attributable to and Forfeited from Executive Share Award Scheme | (5) | | Proposed and Approved Dividends | (5,541) | | **Balance as of June 30, 2025** | **125,617** | [Hong Kong Property Development Profit](index=8&type=section&id=Hong%20Kong%20Property%20Development%20Profit) For the six months ended June 30, 2025, Hong Kong property development profit (after tax) significantly increased to HKD 5.53 billion, primarily derived from surpluses, income, and interests in unsold properties from property development Hong Kong Property Development Profit (million HKD) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Share of Surpluses, Income and Interests in Unsold Properties from Property Development | 6,592 | 1,995 | | Agency Fees and Other Income from West Rail Property Development | 5 | 33 | | Other Expenses | (3) | (4) | | **Hong Kong Property Development Profit (before tax)** | **6,594** | **2,024** | | **Hong Kong Property Development Profit (after tax)** | **5,530** | **1,722** | - Profit attributable to equity holders of the Company from Hong Kong property development was **HKD 5.530 billion**, a significant increase from HKD 1.722 billion in the prior year[18](index=18&type=chunk) [Fair Value Measurement of Investment Properties](index=9&type=section&id=Fair%20Value%20Measurement%20of%20Investment%20Properties) For the six months ended June 30, 2025, fair value measurement of investment properties shifted from a gain of HKD 280 million to a loss of HKD 1.22 billion, mainly due to a substantial increase in re-measurement losses, partially offset by fair value gains on initial recognition of investment properties from property development Fair Value Measurement of Investment Properties (million HKD) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Re-measurement Loss on Fair Value of Investment Properties | (2,702) | (810) | | Fair Value Gain on Initial Recognition of Investment Properties from Property Development | 1,478 | 1,090 | | **Total** | **(1,224)** | **280** | - Re-measurement loss on fair value of investment properties increased from **HKD 810 million to HKD 2.702 billion**[19](index=19&type=chunk) - The Group has recognized a remaining fair value gain of **HKD 1.5 billion** (2024: HKD 1.1 billion) in profit or loss for the initial recognition of investment properties from property development[20](index=20&type=chunk) [Income Tax](index=9&type=section&id=Income%20Tax) For the six months ended June 30, 2025, income tax expense in the consolidated income statement increased to HKD 1.73 billion, with Hong Kong profits tax calculated at 16.5% (8.25% for the first HKD 2 million), and the company continues to appeal a tax deduction dispute related to the Rail Merger, with a HKD 200 million tax provision made Income Tax in Consolidated Income Statement (million HKD) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Current Tax - Hong Kong Profits Tax | 1,484 | 851 | | Current Tax - Overseas Tax | 174 | 251 | | Deferred Tax | 76 | 9 | | **Total** | **1,734** | **1,111** | - Hong Kong profits tax provision is calculated at a rate of **16.5%**, with the first HKD 2 million of assessable profits taxed at 8.25%[22](index=22&type=chunk) - The company has objected to the Inland Revenue Department's assessment regarding tax deductions for amounts related to the Rail Merger and has appealed, having purchased **HKD 2.8 billion** in tax reserve certificates[25](index=25&type=chunk) - The Court of First Instance granted the company leave to appeal on May 27, 2025, with the appeal hearing scheduled for early 2027[26](index=26&type=chunk) - As of June 30, 2025, a total tax provision of **HKD 200 million** has been made for the amortization of the initial payment and assumed liabilities related to the Rail Merger[26](index=26&type=chunk) [Dividends](index=11&type=section&id=Dividends) The Board has resolved to declare an interim dividend of HKD 0.42 per share for the six months ended June 30, 2025, consistent with the prior year, in line with the company's progressive ordinary dividend policy aiming to steadily increase or at least maintain the ordinary dividend per share annually Ordinary Dividends (million HKD) | Dividend Type | 2025 | 2024 | | :--- | :--- | :--- | | Interim Ordinary Dividend of HKD 0.42 Per Share Declared After Reporting Period | 2,614 | 2,614 | | Final Ordinary Dividend of HKD 0.89 Per Share Approved and Paid (2024: Approved and Payable) During the Period | 5,541 | 5,533 | - The interim dividend is expected to be paid on **September 16, 2025**, to shareholders whose names appear on the Company's register of members on September 3, 2025[28](index=28&type=chunk) [Earnings Per Share](index=12&type=section&id=Earnings%20Per%20Share) For the six months ended June 30, 2025, both basic and diluted earnings per share increased to HKD 1.24 from HKD 0.97 in the prior year, with basic and diluted earnings per share from underlying business at HKD 1.44 Earnings Per Share (HKD) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Basic Earnings Per Share | 1.24 | 0.97 | | Diluted Earnings Per Share | 1.24 | 0.97 | | Basic Earnings Per Share from Underlying Business | 1.44 | 0.93 | | Diluted Earnings Per Share from Underlying Business | 1.44 | 0.93 | - Earnings per share are calculated based on net profit attributable to equity holders of the Company of **HKD 7.709 billion** (2024: HKD 6.044 billion) and the weighted average number of shares[30](index=30&type=chunk) [Segment Information](index=12&type=section&id=Segment%20Information) The Group's operations are segmented into recurring businesses (including Hong Kong and non-Hong Kong railway, property leasing, and management) and property development, with total revenue of HKD 27.36 billion for the six months ended June 30, 2025, of which HKD 17.16 billion was contributed by the Hong Kong Special Administrative Region - The Group's businesses primarily include Hong Kong passenger transport services, Hong Kong station commercial business, Hong Kong property leasing and management, Hong Kong property development, Mainland China and international railway/property leasing and management, Mainland China property development, and other businesses[31](index=31&type=chunk)[32](index=32&type=chunk) Revenue and Profit Contribution by Reportable Business Segment (million HKD) | Business Segment | 2025 Revenue | 2024 Revenue | 2025 Profit Contribution | 2024 Profit Contribution | | :--- | :--- | :--- | :--- | :--- | | Hong Kong Passenger Transport Services | 14,130 | 13,776 | 1,896 | 2,312 | | Hong Kong Property Leasing and Management Business | 2,657 | 2,688 | 2,084 | 2,154 | | Mainland China and International Railway, Property Leasing and Management Business | 10,183 | 12,429 | 409 | 486 | | Mainland China Property Development | 14 | - | 4 | (2) | | Other Businesses | 376 | 378 | 39 | 19 | | Hong Kong Property Development | - | - | 6,594 | 2,024 | | Fair Value Measurement of Investment Properties (Loss)/Gain | - | - | (1,224) | 280 | | **Total Revenue** | **27,360** | **29,271** | **Profit for the Period** | **7,822** | **6,144** | Revenue from External Customers by Geographical Region (million HKD) | Region | 2025 | 2024 | | :--- | :--- | :--- | | Hong Kong Special Administrative Region | 17,157 | 16,837 | | Australia | 6,785 | 7,812 | | Mainland China and Macao Special Administrative Region | 530 | 937 | | Sweden | 1,492 | 2,139 | | United Kingdom | 1,396 | 1,546 | | **Total** | **27,360** | **29,271** | [Railway Projects Entrusted by HKSAR Government](index=14&type=section&id=Railway%20Projects%20Entrusted%20by%20HKSAR%20Government) This section details MTR's entrusted agreements with the HKSAR Government for the Express Rail Link (Hong Kong Section) and Shatin to Central Link projects, outlining funding, liability caps, and ongoing disputes, with provisions made for additional project management fees and Hung Hom incident-related costs - MTR and the HKSAR Government have signed multiple entrusted agreements for the Express Rail Link (Hong Kong Section) and Shatin to Central Link projects, clarifying their respective responsibilities and funding arrangements[37](index=37&type=chunk)[42](index=42&type=chunk) - The estimated project cost for the Express Rail Link (Hong Kong Section) is **HKD 84.42 billion**, with MTR's total legal liability under the entrusted agreement capped[41](index=41&type=chunk) - The original entrusted amount for the Shatin to Central Link project was **HKD 70.827 billion**, later revised to an estimated total cost of **HKD 82.999 billion**, with the government approving an additional **HKD 10.801 billion** in funding[46](index=46&type=chunk)[47](index=47&type=chunk) - The company made a provision of **HKD 1.371 billion** in 2020 for additional project management responsibilities under Shatin to Central Link Entrustment Agreement 3, with **HKD 160 million** remaining as of June 30, 2025[48](index=48&type=chunk) - The company made a provision of **HKD 2 billion** in 2019 for costs related to the Hung Hom incident, with **HKD 721 million** remaining as of June 30, 2025[53](index=53&type=chunk) - Negotiations between the company and the HKSAR Government regarding the Hung Hom incident and related payment liabilities are ongoing, with the final outcome remaining uncertain[53](index=53&type=chunk)[56](index=56&type=chunk) [Guangzhou-Shenzhen-Hong Kong Express Rail Link (Hong Kong Section)](index=14&type=section&id=Guangzhou-Shenzhen-Hong%20Kong%20Express%20Rail%20Link%20(Hong%20Kong%20Section)) MTR and the HKSAR Government have an entrusted agreement for the Express Rail Link (Hong Kong Section), defining MTR's project management responsibilities and the government's funding up to an estimated HKD 84.42 billion, with MTR's total legal liability capped, and the government reserving arbitration rights for cost overruns, though no formal claims have been received - The HKSAR Government bears and pays up to **HKD 84.42 billion** of the project cost, including an agreed increase of **HKD 19.42 billion**[41](index=41&type=chunk) - Project management fees for the Express Rail Link (Hong Kong Section) increased from **HKD 4.59 billion to HKD 6.34 billion**, with the liability cap correspondingly rising to a maximum of **HKD 6.69 billion**[41](index=41&type=chunk) - The government reserves the right to refer to arbitration any issues regarding MTR's responsibility for current cost overruns under the entrusted agreement, but as of the interim financial report date, the company has received **no formal claims**[38](index=38&type=chunk)[41](index=41&type=chunk) - The company has made no provision for any potential further cost overruns or arbitration awards, believing no further revision to the cost estimate is needed and that it is protected by the liability cap[45](index=45&type=chunk) [Shatin to Central Link](index=16&type=section&id=Shatin%20to%20Central%20Link) The Shatin to Central Link project involves multiple entrusted agreements, with the government covering most construction costs, and the total project cost estimate revised upwards to HKD 82.999 billion due to external factors, for which the government has approved additional funding, while MTR has made provisions for extra project management fees and Hung Hom incident-related costs, with ongoing negotiations with the government on final liability - Shatin to Central Link Entrustment Agreement 3 for major construction works received **HKD 70.827 billion** in government funding, with project management fees of **HKD 7.893 billion**[43](index=43&type=chunk) - The revised total estimated cost for the Shatin to Central Link project is **HKD 82.999 billion**, an increase of **HKD 12.172 billion** from the original entrusted amount, with the government approving an additional **HKD 10.801 billion** in funding[46](index=46&type=chunk)[47](index=47&type=chunk) - The company made a provision of **HKD 1.371 billion** in 2020 for additional project management responsibilities under Shatin to Central Link Entrustment Agreement 3, with **HKD 160 million** remaining as of June 30, 2025[48](index=48&type=chunk) - The company made a provision of **HKD 2 billion** in 2019 for costs related to the Hung Hom incident, with **HKD 721 million** remaining as of June 30, 2025[53](index=53&type=chunk) - Negotiations between the company and the government regarding the Hung Hom incident and related payment liabilities are ongoing, with the final responsibility or liability amount remaining uncertain, and no additional provisions have been made by the company[53](index=53&type=chunk)[56](index=56&type=chunk) [Trade and Other Receivables and Payables](index=20&type=section&id=Trade%20and%20Other%20Receivables%20and%20Payables) As of June 30, 2025, the Group's trade and other receivables decreased to HKD 11.51 billion from December 31, 2024, while trade and other payables and provisions also decreased to HKD 64.27 billion, with most receivables being current and most payables due within 30 days or on demand Trade and Other Receivables (million HKD) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Not Yet Due | 4,117 | 8,181 | | Overdue Within 30 Days | 162 | 177 | | Overdue More Than 30 Days But Within 60 Days | 60 | 55 | | Overdue More Than 60 Days But Within 90 Days | 34 | 18 | | Overdue More Than 90 Days | 164 | 121 | | **Total Trade Receivables** | **4,537** | **8,552** | | Other Receivables and Contract Assets | 6,969 | 7,228 | | **Total** | **11,506** | **15,780** | Trade and Other Payables and Provisions (million HKD) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Due Within 30 Days or On Demand | 8,537 | 9,212 | | Due After 30 Days But Within 60 Days | 2,595 | 2,850 | | Due After 60 Days But Within 90 Days | 1,140 | 1,166 | | Due After 90 Days | 5,330 | 4,761 | | **Total Trade Payables and Accrued Expenses** | **22,292** | **23,015** | | Other Payables, Deferred Income and Provisions | 38,774 | 43,212 | | Contract Liabilities | 3,199 | 3,190 | | **Total** | **64,265** | **69,417** | [Perpetual Capital Securities](index=21&type=section&id=Perpetual%20Capital%20Securities) On June 24, 2025, the Company issued USD 3 billion (HKD 23.55 billion) in subordinated perpetual capital securities across two tranches with coupon rates of 4.875% and 5.625%, classified as equity in the Group's consolidated financial statements, with proceeds used for general corporate purposes - Issued **USD 3 billion (HKD 23.55 billion)** in subordinated perpetual capital securities, unconditionally and irrevocably guaranteed by the Company[58](index=58&type=chunk) - The first tranche of perpetual securities has a principal amount of **USD 1.5 billion** with a coupon rate of **4.875% per annum** for the first 5.5 years; the second tranche has a principal amount of **USD 1.5 billion** with a coupon rate of **5.625% per annum** for the first 10.5 years[58](index=58&type=chunk)[59](index=59&type=chunk) - The perpetual securities are classified as equity in the Group's consolidated financial statements, with proceeds on-lent to the Company for general corporate purposes[59](index=59&type=chunk) [Purchase or Redemption of Listed Securities](index=21&type=section&id=Purchase%20or%20Redemption%20of%20Listed%20Securities) For the six months ended June 30, 2025, the Company redeemed RMB 345 million (HKD 399 million) in bonds, and the trustee of the Executive Share Award Scheme purchased 4,341,500 ordinary shares of the Company for approximately HKD 113 million - The Company redeemed **RMB 345 million (HKD 399 million)** in bonds at par on January 21, 2025[61](index=61&type=chunk) - The trustee of the Executive Share Award Scheme purchased a total of **4,341,500 ordinary shares** of the Company for a total consideration of approximately **HKD 113 million**[61](index=61&type=chunk) [Charges on Group Assets](index=21&type=section&id=Charges%20on%20Group%20Assets) As of June 30, 2025, two of the Group's Mainland China subsidiaries provided collateral for bank loans totaling RMB 527 million and RMB 3.2 billion, respectively, using ticketing and non-ticketing revenue from their railway lines and interests in insurance contracts - MTR Rail Transit (Shenzhen) Company Limited provided collateral for a **RMB 527 million (HKD 577 million)** bank loan using ticketing and non-ticketing revenue and interests in insurance contracts related to Shenzhen Metro Line 4 Phase 2[62](index=62&type=chunk) - MTR CRRC Electric Traction Rail Transit (Shenzhen) Company Limited provided collateral for a **RMB 3.2 billion (HKD 3.5 billion)** bank loan using ticketing and non-ticketing revenue related to Shenzhen Metro Line 13 Phase 1[62](index=62&type=chunk) Business Performance Review This section reviews MTR's Hong Kong operations, covering passenger transport, station commercial business, property development, and network expansion, as well as its Mainland China and international railway and property businesses, other ventures, and commitments to ESG and human resources [Hong Kong Operations](index=27&type=section&id=Hong%20Kong%20Operations) MTR's Hong Kong operations encompass railway and bus passenger services, station commercial business, property development, leasing, and management, alongside investment, design, and construction of new railway lines, with continuous service enhancements, smart mobility initiatives, significant property development profit contributions, and active expansion of the Hong Kong railway network - Hong Kong operations adopt a **"Rail plus Property"** business model, leveraging property development projects to fund infrastructure initiatives[79](index=79&type=chunk) [Hong Kong Passenger Transport Services - Railway Operations](index=27&type=section&id=Hong%20Kong%20Passenger%20Transport%20Services%20-%20Railway%20Operations) In H1 2025, Hong Kong railway operations revenue grew 3.3% to HKD 11.51 billion, driven by increased cross-boundary and High Speed Rail passenger volumes, though rising operating expenses led to a decline in EBIT, while maintaining world-class punctuality and safety, with ongoing investments in automatic fare collection system upgrades, new trains, and signal system replacements, alongside smart mobility initiatives Hong Kong Railway Operations Key Financial Indicators (million HKD) | Indicator | 2025 | 2024 | Increase/(Decrease) % | | :--- | :--- | :--- | :--- | | Total Revenue | 11,509 | 11,138 | 3.3 | | EBITDA | 3,966 | 4,059 | (2.3) | | EBIT | 98 | 415 | (76.4) | | EBITDA Margin (%) | 34.5% | 36.4% | (1.9) percentage points | | EBIT Margin (%) | 0.9% | 3.7% | (2.8) percentage points | Hong Kong Railway Operations Passenger Volume and Revenue (millions/million HKD) | Service Category | 2025 Passenger Volume | 2024 Passenger Volume | Passenger Volume Increase/(Decrease) % | 2025 Revenue | 2024 Revenue | Revenue Increase/(Decrease) % | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Local Railway Services | 786.0 | - | (0.2) | 7,241 | - | 2.9 | | Cross-Boundary Services | 51.2 | - | 10.1 | 1,810 | - | 6.6 | | High Speed Rail (Hong Kong Section) and Intercity Passenger Transport | 14.7 | - | 16.2 | 1,656 | - | 2.1 | | Airport Express | 6.4 | - | 2.3 | 402 | - | 2.8 | | Light Rail and Bus | 105.4 | - | 0.9 | 355 | - | 5.7 | | **Total** | **963.7** | **957.4** | **0.7** | **11,464** | **-** | **3.4** | - Train service delivery according to schedule and passenger journey punctuality both maintained a **world-class level of 99.9%**[81](index=81&type=chunk) - MTR's overall market share in Hong Kong's franchised public transport market was **50.0%** for the first five months of 2025, with a **72.5%** share in the cross-harbour transport market[83](index=83&type=chunk) - MTR fares for 2025/2026 remain unchanged, with fare adjustment rates deferred to 2026/2027, while Airport Express fares increased by an average of **9.24%**[84](index=84&type=chunk) - Heavy rail services experienced **six delays** of 31 minutes or more due to company-controllable factors, with **no such delays** in Light Rail services[85](index=85&type=chunk) - The total number of reportable incidents decreased by **20% year-on-year**, demonstrating a strong commitment to public and staff safety[87](index=87&type=chunk) - The automatic fare collection system upgrade program has installed **1,669 new or retrofitted gates**, with replacement works completed at **37 stations**[90](index=90&type=chunk) - The new train replacement program continues to progress, with **28 new trains** operating on the Kwun Tong Line and Island Line, and new trains for the Tung Chung Line and Disneyland Resort Line currently undergoing testing or design[91](index=91&type=chunk) - Signal system replacement works are expected to commence service on the Tsuen Wan Line in 2026, with the entire program anticipated to be completed by 2029[92](index=92&type=chunk) - The plan to install approximately **1,600 pairs of automatic platform gates** along 13 stations of the East Rail Line was fully completed in May 2025[95](index=95&type=chunk) - The MTR Mobile app has been upgraded to provide more personalized real-time information and introduced an **"e-City Pass"** for passenger convenience[96](index=96&type=chunk) - Actively integrating advanced technologies such as artificial intelligence and deep learning to enhance operational resilience and create smart mobility solutions[96](index=96&type=chunk) [Hong Kong Passenger Transport Services - Station Commercial Business](index=30&type=section&id=Hong%20Kong%20Passenger%20Transport%20Services%20-%20Station%20Commercial%20Business) In H1 2025, Hong Kong station commercial business total revenue decreased by 0.6% year-on-year to HKD 2.62 billion, primarily due to lower advertising and telecommunications business revenue, despite an increase in station retail rental income, with the company responding to market challenges through promotions, new brand introductions, and adjusted advertising strategies Hong Kong Station Commercial Business Key Financial Indicators (million HKD) | Indicator | 2025 | 2024 | Increase/(Decrease) % | | :--- | :--- | :--- | :--- | | Station Retail Rental Income | 1,834 | 1,787 | 2.6 | | Advertising Income | 451 | 496 | (9.1) | | Telecommunications Business Income | 272 | 296 | (8.1) | | Other Station Commercial Business Income | 64 | 59 | 8.5 | | **Total Revenue** | **2,621** | **2,638** | **(0.6)** | | EBITDA | 2,244 | 2,328 | (3.6) | | EBIT | 1,798 | 1,897 | (5.2) | | EBITDA Margin (%) | 85.6% | 88.2% | (2.6) percentage points | | EBIT Margin (%) | 68.6% | 71.9% | (3.3) percentage points | - Station retail rental income increased by **2.6% to HKD 1.834 billion**, primarily due to higher duty-free shop rental income[98](index=98&type=chunk) - The average occupancy rate for station shops was **98.6%**, with new rental agreements seeing a **7.0% decrease**[98](index=98&type=chunk) - Advertising income decreased by **9.1% to HKD 451 million**, affected by economic uncertainty and subdued consumer sentiment[101](index=101&type=chunk) - Telecommunications business income decreased by **8.1% to HKD 272 million**, mainly due to lower bandwidth services and common system income[102](index=102&type=chunk) [Property Business](index=31&type=section&id=Property%20Business) In H1 2025, Hong Kong property leasing revenue decreased by 1.8% to HKD 2.50 billion due to cross-boundary consumption and changing spending patterns, while property management revenue grew 9.8%, and property development recorded HKD 5.53 billion in after-tax profit, mainly from Ho Man Tin Station and "The Southside" projects, with ongoing pre-sales and sales of multiple property projects and plans to tender for Tung Chung East Station Phase 2 and Tuen Mun Area 16 Station Phase 1 in the next 12 months Hong Kong Property Leasing and Property Management Business Key Financial Indicators (million HKD) | Indicator | 2025 | 2024 | Increase/(Decrease) % | | :--- | :--- | :--- | :--- | | Property Leasing Business Revenue | 2,500 | 2,545 | (1.8) | | Property Management Business Revenue | 157 | 143 | 9.8 | | **Total Revenue** | **2,657** | **2,688** | **(1.2)** | | EBITDA | 2,101 | 2,163 | (2.9) | | EBIT | 2,084 | 2,154 | (3.2) | | EBITDA Margin (%) | 79.1% | 80.5% | (1.4) percentage points | | EBIT Margin (%) | 78.4% | 80.1% | (1.7) percentage points | - Hong Kong property development recorded an after-tax profit of **HKD 5.530 billion**, primarily from profit recognition for Ho Man Tin Station Property Development Package 1 and 2, and "The Southside" Phases 3 and 5[108](index=108&type=chunk) - MTR Malls' new rental agreements saw a **7.8% decrease**, with an average occupancy rate of **99%**; IFC Tower 2 office space maintained an average occupancy rate of **98%**[105](index=105&type=chunk) - As of June 30, 2025, MTR manages over **128,000 residential units** and over **920,000 square meters** of commercial and office space[107](index=107&type=chunk) - Multiple property projects are progressing well with pre-sales, including "The Horizon," "The YOHO Hub," "The Pavilia Farm," "The Grand Mayfair," "GRAND SEASONS," "SEASONS PLACE," "PARK SEASONS," "The Aura," "Blue Coast," and "YOHO WEST"[109](index=109&type=chunk)[110](index=110&type=chunk)[112](index=112&type=chunk) - Tendering for the Tung Chung East Station Phase 2 project and Tuen Mun Area 16 Station Phase 1 project is expected in the **next 12 months** or so[113](index=113&type=chunk) - MTR has **10 residential property projects** expected to provide approximately **9,000 units** to the housing market in the coming years[114](index=114&type=chunk) [Hong Kong Network Expansion](index=33&type=section&id=Hong%20Kong%20Network%20Expansion) MTR continues to invest in new railway infrastructure projects to support Hong Kong's future growth, having signed the Northern Link (Phase 1) project agreement with the government and progressing with key new railway and station projects including the Tung Chung Line Extension, Siu Ho Wan Station, Tuen Mun South Extension, East Rail Line Kwu Tung Station, and Hung Shui Kiu Station, aiming to enhance connectivity and create growth opportunities - The Northern Link (Phase 1) project agreement was signed with the government on July 8, 2025, establishing funding and construction arrangements for part of the main line and initiating detailed planning and design for the spur line[117](index=117&type=chunk)[122](index=122&type=chunk) - Tunnel boring for the westbound tunnel of the Tung Chung Line Extension project has commenced, with completion expected by **2029**[116](index=116&type=chunk) - Bore piling works for the Siu Ho Wan Station project are **50% complete**, with the station expected to be completed by **2030**[118](index=118&type=chunk) - Foundation construction works for the Tuen Mun South Extension project have commenced, with completion expected by **2030**[119](index=119&type=chunk) - Significant progress has been made on the civil engineering works for the East Rail Line Kwu Tung Station project, with the underground structure up to ground level completed, targeting completion by **2027**[120](index=120&type=chunk) - Detailed design work for the Hung Shui Kiu Station project has commenced, with completion expected by **2030**[121](index=121&type=chunk) - The Northern Link main line and spur line are targeted to open simultaneously no later than **2034**[122](index=122&type=chunk) - The company is actively exploring various financing models, including the **"Rail plus Property"** development model, to promote railway development in Hong Kong[124](index=124&type=chunk) [Mainland China and International Operations](index=35&type=section&id=Mainland%20China%20and%20International%20Operations) Mainland China and International Operations serve as a growth pillar for MTR, transporting approximately 1.2 billion passengers across Mainland China, Europe, and Australia in H1 2025, with ongoing railway and property projects in Mainland China and exploration of overseas opportunities, despite a decline in total recurring business profit and the recent handover of UK railway operating rights Mainland China and International Operations Key Financial Indicators (million HKD) | Indicator | 2025 Revenue | 2024 Revenue | Revenue Increase/(Decrease) % | 2025 EBIT | 2024 EBIT | EBIT Increase/(Decrease) % | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Mainland China and Macao Railway, Property Leasing and Property Management Business (Subsidiaries) | 514 | 937 | (45.1) | (161) | (114) | (41.2) | | International Railway Business (Subsidiaries) | 9,669 | 11,492 | (15.9) | 570 | 600 | (5.0) | | **Total (Subsidiaries)** | **10,183** | **12,429** | **(18.1)** | **409** | **486** | **(15.8)** | | Share of Profit from Associates and Joint Ventures | - | - | - | 389 | 448 | (13.2) | | **Profit from Recurring Business Attributable to Equity Holders of the Company (after business development expenses)** | - | - | - | **418** | **542** | **(22.9)** | | **Profit from Mainland China Property Development Attributable to Equity Holders of the Company** | - | - | - | **12** | **18** | **(33.3)** | | **Profit from Underlying Business Attributable to Equity Holders of the Company** | - | - | - | **430** | **560** | **(23.2)** | - Total recurring business profit from Mainland China and Macao railway, property leasing, and property management businesses decreased, partly due to operating losses from the initial section of Shenzhen Metro Line 13 and reduced contributions from Hangzhou railway operations[128](index=128&type=chunk) - Total recurring business profit from international operations decreased, mainly due to reduced contributions from South Western Railway and no contribution after the disposal of MTRX[128](index=128&type=chunk) [Mainland China Railway Operations](index=36&type=section&id=Mainland%20China%20Railway%20Operations) MTR operates multiple metro lines in Beijing, Shenzhen and Hangzhou, with stable operating performance and punctuality rates above 99.9%. Construction continues on the middle section of Beijing Metro Line 17 and other sections of Shenzhen Metro Line 13. However, Shenzhen Metro Line 4 and Hangzhou Metro Line 1 face financial viability challenges due to a lack of fare adjustment mechanisms and slow passenger growth - Beijing Metro Line 4, Daxing Line, Line 14, Line 16, and the Southern and Northern sections of Line 17 operate stably, with an average train service punctuality rate of **over 99.9%**[129](index=129&type=chunk) - Construction of the middle section of Beijing Metro Line 17 continues to progress, with an expected opening by the **end of 2025**[129](index=129&type=chunk) - Shenzhen Metro Line 4 operates stably, but its long-term financial viability is affected as fares have **not been increased since 2010**[130](index=130&type=chunk) - The initial section of Shenzhen Metro Line 13 commenced operation in December 2024 and is operating stably, with other sections under construction as planned[131](index=131&type=chunk) - Hangzhou Metro Line 1 and its extension, and Line 5 maintain stable operations, but Line 1 recorded a loss due to slow passenger growth and the impact of the pandemic, and **lacks a passenger volume compensation mechanism**[132](index=132&type=chunk)[133](index=133&type=chunk) [Mainland China Property Business](index=36&type=section&id=Mainland%20China%20Property%20Business) MTR continues to review strategic options for its Mainland China shopping malls, and is advancing the Hangzhou West Station TOD project and providing TOD consultancy services for Shenzhen Xili Station and Beijing Sub-Centre Station, with the Tianjin Beiyunhe Station mall expected to open after 2026 - Following the exit from Beijing "Ginza Mall" business in May 2024, the company continues to review strategic options for Shenzhen "The V Walk" mall and Tianjin Beiyunhe Station mall[134](index=134&type=chunk) - Preparations for the opening of Tianjin Beiyunhe Station mall are ongoing, with an expected opening **after 2026**[134](index=134&type=chunk) - The Hangzhou West Station TOD project continues to make progress, and TOD consultancy services are being provided for Shenzhen Xili Station and Beijing Sub-Centre Station[135](index=135&type=chunk) [Other Mainland China Operations](index=37&type=section&id=Other%20Mainland%20China%20Operations) MTR continues to advance its station commercial businesses in Chengdu, Zhengzhou, and Xi'an, covering over 700 station shops, while exploring further development opportunities, and has invested in CRRC Guangdong Rolling Stock Co. Ltd., its first railway equipment industry investment in Guangdong Province - Continues to advance station commercial businesses in Chengdu, Zhengzhou, and Xi'an, covering **over 700 station shops**[136](index=136&type=chunk) - Invested in CRRC Guangdong Rolling Stock Co. Ltd., the company's **first railway equipment industry investment** in Guangdong Province[136](index=136&type=chunk) [International Railway Operations](index=37&type=section&id=International%20Railway%20Operations) MTR's railway operations in Melbourne and Sydney, Australia, and Stockholm, Sweden, show stable performance, with the Melbourne Metro Trains franchise expiring in November 2027 and Sydney Metro M1 Southwest section expected to open in 2026, while operating rights for the UK's Elizabeth Line and South Western Railway were transferred in May 2025 - Melbourne Metro Trains network operations are stable, with the franchise expiring in **November 2027**[137](index=137&type=chunk) - Construction for Sydney Metro M1 Northwest and Bankstown Line Southwest sections is ongoing, with an expected opening in **2026**[137](index=137&type=chunk) - Stockholm Metro operations are stable, with the service contract expiring in **November 2025**[138](index=138&type=chunk) - Operating rights for the UK's Elizabeth Line and South Western Railway were transferred to the next operator in **May 2025**[139](index=139&type=chunk) [Growth Outside Hong Kong](index=37&type=section&id=Growth%20Outside%20Hong%20Kong) MTR submitted a bid for the Sydney Metro West project in late 2024, with results expected in H2 2025, and continues to explore growth opportunities in Mainland China and overseas markets, including Belt and Road countries - A bid for the Sydney Metro West project was submitted in late 2024, with the tender results expected to be announced in **H2 2025**[140](index=140&type=chunk) - Continues to explore growth opportunities in Mainland China and overseas markets, including **"Belt and Road" countries**[140](index=140&type=chunk) [Other Businesses](index=37&type=section&id=Other%20Businesses) MTR's other businesses include Ngong Ping 360, Octopus, and MTR Lab, with Ngong Ping 360 revenue increasing 0.8% and 750,000 visitors, benefiting from 11 new "Crystal+ cabins," while Octopus Holdings' profit attributable to the company decreased 5.8% despite strong transaction volumes and growing digital Octopus adoption, and MTR Lab completed its first AI-driven retail tech investment and expanded strategic partnerships in Mainland China and Japan - Ngong Ping 360 revenue increased by **0.8% to HKD 241 million**, with **750,000 visitors**, and **11 new "Crystal+ cabins"** were introduced[141](index=141&type=chunk) - Profit attributable to the company from Octopus Holdings Limited decreased by **5.8% to HKD 212 million**, but daily average transaction volume and value were **15.8 million transactions** and **HKD 335 million**, respectively[142](index=142&type=chunk) - Adoption of digital Octopus showed **strong growth**, with Gen Z users accounting for approximately **one-third** of total Octopus App users[142](index=142&type=chunk) - MTR Lab completed its first investment in AI-driven retail technology, "Weavair," and established strategic partnerships with TusStar and CROSSBIE JAPAN Co. Ltd[144](index=144&type=chunk) [Environmental, Social and Governance](index=38&type=section&id=Environmental,%20Social%20and%20Governance) MTR is committed to good corporate citizenship guided by a robust ESG framework, continuously reducing carbon emissions and acquiring electric vehicles, engaging in volunteer activities, youth employment programs, and art promotion, while upholding strong corporate governance and managing risks through a comprehensive enterprise risk management framework - MTR is guided by a robust Environmental, Social and Governance (ESG) framework, setting **45 key performance indicators** across three objectives: reducing greenhouse gas emissions, promoting social inclusion, and fostering development and opportunities[145](index=145&type=chunk) - To reduce carbon emissions, the company continues to procure electric vehicles, with **ten electric buses** already in passenger service and another **25** to be delivered between 2025 and 2026[146](index=146&type=chunk) - The "Railway People, Railway Heart" volunteer program organized **178 volunteer projects**, with **2,334 volunteer participants**[147](index=147&type=chunk) - The first cohort of the "EmpowerZ" diverse talent youth employment pilot program graduated, and the "'Train' for a Bright Future 2.0" program was launched[147](index=147&type=chunk) - Promotes art appreciation through the **"Art in MTR"** program, hosting exhibitions and performances at stations[148](index=148&type=chunk) - Practices **strong corporate governance** and has a comprehensive enterprise risk management framework, with major risks regularly reviewed[149](index=149&type=chunk)[150](index=150&type=chunk) [Human Resources](index=39&type=section&id=Human%20Resources) As of June 30, 2025, MTR and its subsidiaries employed 18,641 staff in Hong Kong and 12,159 outside Hong Kong, with an additional 16,029 staff in associates and joint ventures, maintaining a stable voluntary turnover rate of 5.1% in Hong Kong, while enhancing its employer brand, offering competitive compensation and development opportunities, and promoting employee well-being - As of June 30, 2025, MTR and its subsidiaries employed **18,641 staff in Hong Kong** and **12,159 staff outside Hong Kong**[151](index=151&type=chunk) - Associates and joint ventures employed a total of **16,029 staff** in Hong Kong and globally[151](index=151&type=chunk) - The voluntary turnover rate for MTR staff in Hong Kong remained **stable at 5.1%**[151](index=151&type=chunk) - The company launched new recruitment visuals and innovative talent acquisition marketing strategies, offering trainee development programs and summer internship programs[151](index=151&type=chunk) - Implemented various well-being and family-friendly initiatives through the Wellness Connect platform to promote employee work-life balance[151](index=151&type=chunk) Financial Performance Review This section provides an in-depth analysis of the Group's consolidated income statement, statement of financial position, cash flow, financing activities, and capital expenditure, highlighting a 6.5% revenue decrease but a 27.5% net profit increase driven by property development, alongside a 9.6% asset growth, reduced leverage, and robust financial capacity for future investments [Consolidated Income Statement Analysis](index=40&type=section&id=Consolidated%20Income%20Statement%20Analysis) For the six months ended June 30, 2025, the Group's total revenue decreased by 6.5% to HKD 27.36 billion, primarily due to reduced Mainland China and international business revenue, and recurring business profit declined 15.7% to HKD 3.39 billion due to higher operating expenses in Hong Kong railway operations, yet net profit attributable to equity holders of the Company increased 27.5% to HKD 7.71 billion, driven by a substantial 218.5% growth in property development profit Consolidated Income Statement Key Financial Indicators (million HKD) | Indicator | 2025 | 2024 | Change (million HKD) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Total Revenue | 27,360 | 29,271 | (1,911) | (6.5) | | Recurring Business Profit | 3,391 | 4,024 | (633) | (15.7) | | Property Development Profit (after tax) | 5,542 | 1,740 | 3,802 | 218.5 | | Underlying Business Profit | 8,933 | 5,764 | 3,169 | 55.0 | | Fair Value Measurement of Investment Properties (Loss)/Gain (after tax) | (1,224) | 280 | (1,504) | n.m. | | Net Profit Attributable to Equity Holders of the Company | 7,709 | 6,044 | 1,665 | 27.5 | - The decrease in total revenue was primarily due to reduced revenue from Melbourne railway operations and Sweden operations, offsetting the increase in Hong Kong railway operations revenue[155](index=155&type=chunk) - The decline in recurring business profit was mainly due to a decrease in Hong Kong railway operations EBIT, driven by higher staff costs, inflation, and increased maintenance expenses[156](index=156&type=chunk)[157](index=157&type=chunk) - Hong Kong station commercial business EBIT decreased by **5.2%**, primarily affected by lower advertising business revenue, reduced telecommunications income, and an overall decline in new rental agreements[158](index=158&type=chunk) - Hong Kong property leasing and management business EBIT decreased by **3.2%**, mainly due to cross-boundary consumption and changing spending patterns, with an overall **7.8% decrease** in new mall rental agreements[158](index=158&type=chunk) - Mainland China and international railway, property leasing, and management subsidiary EBIT decreased by **15.8%**, primarily due to operating losses from the initial section of Shenzhen Metro Line 13[158](index=158&type=chunk) - The total recurring EBIT margin slightly decreased by **0.9 percentage points to 15.4%**, mainly due to increased operating costs in Hong Kong operations[161](index=161&type=chunk) - Interest and finance expenses for recurring businesses increased by **22.4% to HKD 633 million**, primarily due to increased loan drawdowns for financing activities[162](index=162&type=chunk) - Property development profit (after tax) increased by **HKD 3.802 billion to HKD 5.542 billion**, mainly from Ho Man Tin Station Phases 1 and 2, and "The Southside" Phases 3 and 5[164](index=164&type=chunk) - Fair value measurement of investment properties resulted in a **loss of HKD 1.224 billion**, including a re-measurement loss of **HKD 2.702 billion** and an initial recognition gain of **HKD 1.478 billion**[166](index=166&type=chunk) [Consolidated Statement of Financial Position Analysis](index=43&type=section&id=Consolidated%20Statement%20of%20Financial%20Position%20Analysis) As of June 30, 2025, the Group's total assets increased 9.6% to HKD 402.60 billion, primarily driven by a significant rise in cash, bank balances, and deposits, and growth in securities investments, while total liabilities increased 5.5% to HKD 191.39 billion due to higher net loan drawdowns, resulting in a 13.5% increase in net assets to HKD 211.21 billion Consolidated Statement of Financial Position Key Changes (million HKD) | Item | June 30, 2025 | December 31, 2024 | Change (million HKD) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Fixed Assets | 241,997 | 243,190 | (1,193) | (0.5) | | Railway Projects Under Construction | 15,287 | 11,375 | 3,912 | 34.4 | | Properties Under Development | 42,628 | 42,300 | 328 | 0.8 | | Securities Investments | 6,693 | 1,952 | 4,741 | 242.9 | | Trade and Other Receivables | 11,506 | 15,780 | (4,274) | (27.1) | | Cash, Bank Balances and Deposits | 56,796 | 27,886 | 28,910 | 103.7 | | **Total Assets** | **402,597** | **367,499** | **35,098** | **9.6** | | Total Loans and Other Liabilities | 92,173 | 77,568 | 14,605 | 18.8 | | Trade and Other Payables | 73,345 | 77,663 | (4,318) | (5.6) | | **Total Liabilities** | **191,390** | **181,366** | **10,024** | **5.5** | | **Net Assets** | **211,207** | **186,133** | **25,074** | **13.5** | | Perpetual Capital Securities | 23,574 | - | 23,574 | n.m. | - The increase in total assets was primarily due to an increase in cash, bank balances, and deposits following the issuance of perpetual capital securities, as well as increases in securities investments and railway projects under construction[168](index=168&type=chunk) - The increase in total liabilities was mainly due to higher net loan drawdowns, partially offset by a decrease in deferred income related to property development projects[169](index=169&type=chunk) [Cash Flow Analysis](index=44&type=section&id=Cash%20Flow%20Analysis) For the six months ended June 30, 2025, net cash from operating activities decreased to HKD 6.48 billion, primarily due to a weaker economic environment, while net cash received from property development was HKD 9.13 billion, capital expenditure amounted to HKD 8.63 billion mainly for Hong Kong railway investments, and net cash from financing activities significantly increased to HKD 28.84 billion, largely from the issuance of perpetual capital securities Cash Flow Key Items (million HKD) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Net Cash from Operating Activities | 6,481 | 8,179 | | Net Cash Received From/(Paid For) Property Development | 9,127 | (21) | | Capital Expenditure | (8,632) | (7,571) | | Net Cash Used in Investing Activities | (6,918) | (9,530) | | Net Drawdown of Debt, Net of Lease Rentals and Interest Payments | 10,913 | 10,680 | | Issuance of Perpetual Capital Securities | 23,550 | - | | Dividends Paid to Equity Holders of the Company | (5,541) | - | | Net Cash from Financing Activities | 28,844 | 10,459 | | Net Increase in Cash, Bank Balances and Deposits | 28,910 | 8,891 | - Net cash from operating activities decreased by **HKD 1.698 billion to HKD 6.481 billion**, primarily due to a decline in recurring business profit caused by a weak economic environment[172](index=172&type=chunk) - Net cash received from property development was **HKD 9.127 billion**, mainly from various property development projects including "LOHAS Park," "The Southside," and Ho Man Tin Station[173](index=173&type=chunk) - Capital expenditure amounted to **HKD 8.632 billion**, primarily for investments in existing Hong Kong railway and related operating assets (**HKD 4.560 billion**) and Hong Kong railway extension projects (**HKD 3.838 billion**)[174](index=174&type=chunk) - Net cash from financing activities significantly increased to **HKD 28.844 billion**, mainly from the issuance of perpetual capital securities totaling **HKD 23.550 billion**[171](index=171&type=chunk) - Final dividends for 2024 of **HKD 5.541 billion** were paid[176](index=176&type=chunk) [Financing Activities](index=45&type=section&id=Financing%20Activities) In H1 2025, MTR arranged HKD 52.9 billion in new financing, including medium-term notes, USD public bonds, and its inaugural USD public perpetual capital securities, to bolster financial strength, resulting in a reduced gearing ratio (net debt to equity ratio) of 18.8% and an improved interest coverage ratio of 12.5 times, demonstrating a robust financial position - In H1 2025, **HKD 52.9 billion** in new financing was arranged, including the issuance of **HKD 1.9 billion** in privately placed medium-term notes, **HKD 23.5 billion** equivalent in USD public bonds, and **HKD 23.5 billion** equivalent in USD public perpetual capital securities[178](index=178&type=chunk) - Approximately **HKD 800 million** of new financing was arranged under MTR's "Sustainable Finance Framework," with proceeds to be used for eligible investment projects[178](index=178&type=chunk) - The Group's weighted average cost of interest-bearing borrowings was **3.7%** (annualized), a decrease from 3.8% in the prior year[179](index=179&type=chunk) - The net debt to equity ratio decreased from **31.6%** as of December 31, 2024, to **18.8%** as of June 30, 2025, primarily due to cash raised from the issuance of perpetual capital securities[180](index=180&type=chunk) - The interest coverage ratio improved to **12.5 times**, up from 11.6 times in the prior year[180](index=180&type=chunk) [Capital Expenditure and Investments](index=45&type=section&id=Capital%20Expenditure%20and%20Investments) Total capital expenditure for 2025-2027 is estimated at approximately HKD 90.8 billion, with HKD 5.7 billion related to the signed Northern Link (Phase 1) project agreement, and Hong Kong railway projects will continue to account for the majority of capital expenditure, with the Group possessing ample cash, bank balances, securities investments, and available credit facilities to meet future capital expenditure and investment plans - Total capital expenditure for 2025-2027 is estimated at approximately **HKD 90.8 billion**, of which **HKD 5.7 billion** is related to project costs under the signed Northern Link (Phase 1) project agreement[181](index=181&type=chunk) - Hong Kong railway projects (including maintenance of existing railways and new projects) will continue to account for the **majority of capital expenditure**[181](index=181&type=chunk) - The Group holds **HKD 56.8 billion** in cash, bank balances and deposits, **HKD 5.7 billion** in bank medium-term notes, and **over HKD 26.2 billion** in available committed credit facilities, demonstrating sufficient financial strength[181](index=181&type=chunk) Corporate Governance and Other Information This section confirms the company's compliance with corporate governance codes, details the publication of interim results and reports, specifies the closure of the register of members and record date for dividends, and lists the members of the Board of Directors and Executive Directorate [Corporate Governance](index=22&type=section&id=Corporate%20Governance) For the six months ended June 30, 2025, the Company has complied with the code provisions in Appendix C1 "Corporate Governance Code" of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited - The Company has complied with the code provisions in Appendix C1 "Corporate Governance Code" of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[64](index=64&type=chunk) [Publication of Interim Results Announcement and Interim Report](index=22&type=section&id=Publication%20of%20Interim%20Results%20Announcement%20and%20Interim%20Report) This interim results announcement has been published on the websites of the Company and The Stock Exchange of Hong Kong Limited, and the interim report will be dispatched to shareholders and published on the Company's and HKEX's websites in mid-September 2025 - This interim results announcement has been published on the Company's website **www.mtr.com.hk** and The Stock Exchange of Hong Kong Limited's website[65](index=65&type=chunk) - The interim report will be dispatched to shareholders in **mid-September 2025** and published on the Company's website and the HKEX website[65](index=65&type=chunk) [Closure of Register of Members and Record Date](index=46&type=section&id=Closure%20of%20Register%20of%20Members%20and%20Record%20Date) To determine shareholders' entitlement to the 2025 interim dividend, the Company will suspend registration of members and share transfers from August 29 to September 3, 2025 (both dates inclusive), with the record date set for September 3, 2025 Closure of Register of Members and Record Date | Item | Date | | :--- | :--- | | Latest Time for Lodging Share Transfer Documents for Registration | 4:30 p.m. on August 28, 2025 | | Suspension of Register of Members | August 29, 2025 to September 3, 2025 | | Record Date | September 3, 2025 | [Board of Directors and Executive Directorate Members](index=46&type=section&id=Board%20of%20Directors%20and%20Executive%20Directorate%20Members) This announcement lists the members of the Board of Directors as of the announcement date, including Chairman Dr. Rex Auyeung Pak-kuen and CEO Dr. Jacob Kam Chak-pui, along with independent non-executive directors and non-executive directors, and also lists the members of the Executive Directorate - The Board of Directors includes Chairman Dr. Rex Auyeung Pak-kuen, CEO Dr. Jacob Kam Chak-pui, and several independent non-executive directors and non-executive directors[183](index=183&type=chunk) - The Executive Directorate members include Dr. Jacob Kam

[Performance Highlights](index=1&type=section&id=%E8%A6%81%E9%BB%9E) The company achieved steady growth in operating revenue and net profit in the first half of 2025, driven by rapid development in strategic emerging businesses and enhanced shareholder returns Key Financial Data for H1 2025 | Indicator | H1 2025 (RMB) | YoY Growth | | :--- | :--- | :--- | | Operating Revenue | 271.5 billion | 1.3% | | Service Revenue | 249.1 billion | 1.2% | | EBITDA | 80.6 billion | 4.9% | | Net Profit | 23.0 billion | 5.5% | | Basic EPS | 0.25 yuan | - | - Strategic emerging businesses experienced rapid growth, with **Smart Business Revenue increasing by 89.4%**, **Security Business Revenue by 18.2%**, **Video Network Revenue by 46.2%**, **Satellite Business Revenue by 20.5%**, and **Quantum Business Revenue by 171.1%**[2](index=2&type=chunk) - The company continued to strengthen shareholder returns, with the Board of Directors approving an interim dividend for 2025, representing **72% of H1 shareholder-attributable profit**, or **RMB 0.1812 per share (tax inclusive)**, a **year-on-year increase of 8.4%**[2](index=2&type=chunk) [Chairman's Report](index=2&type=section&id=%E8%91%A3%E4%BA%8B%E9%95%B7%E5%A0%B1%E5%91%8A%E6%9B%B8) The Chairman's Report details the company's robust financial performance, strategic advancements in innovation, enhanced governance, and commitment to social responsibility in the first half of 2025 [Overall Performance](index=2&type=section&id=1.%20%E7%B8%BD%E9%AB%94%E6%A5%AD%E7%B8%BE) The company achieved steady growth in operating revenue and net profit in H1 2025, with sustained service revenue, strong free cash flow, rapid development in strategic emerging businesses, and enhanced shareholder returns Key Financial Data for H1 2025 | Indicator | H1 2025 (RMB) | YoY Growth | | :--- | :--- | :--- | | Operating Revenue | 271.5 billion | 1.3% | | Service Revenue | 249.1 billion | 1.2% | | EBITDA | 80.6 billion | 4.9% | | Net Profit | 23.0 billion | 5.5% | | Basic EPS | 0.25 yuan | - | | Capital Expenditure | 34.2 billion | - | | Free Cash Flow | 13.1 billion | 13.9% | - **Mobile communication service revenue reached RMB 106.6 billion**, a **1.3% year-on-year increase**; **fixed-line and smart home service revenue reached RMB 64.1 billion**, a **0.2% year-on-year increase**[6](index=6&type=chunk) - **Industrial digitalization revenue reached RMB 74.9 billion**, with **AIDC revenue growing by 7.4% year-on-year**; **Tianyi Cloud revenue reached RMB 57.3 billion**; **Smart Business Revenue reached RMB 6.3 billion, up 89.4% year-on-year**; **Security Business Revenue reached RMB 9.1 billion, up 18.2% year-on-year**; **Video Network Revenue increased by 46.2% year-on-year**, **Satellite Business Revenue by 20.5% year-on-year**, and **Quantum Business Revenue by 171.1% year-on-year**[6](index=6&type=chunk) - The Board of Directors decided to continue distributing an interim dividend for 2025, with **cash distribution representing 72% of the profit attributable to shareholders for the first half**, amounting to **RMB 0.1812 per share (tax inclusive)**, a **year-on-year increase of 8.4%**[7](index=7&type=chunk) [Strategic Development and Innovation](index=4&type=section&id=2.%20%E6%90%B6%E6%8A%93%E6%A9%9F%E9%81%87%E8%B4%8F%E5%BE%97%E6%88%B0%E7%95%A5%E4%B8%BB%E5%8B%95%EF%BC%8C%E6%8E%A8%E5%8B%95%E4%BC%81%E6%A5%AD%E9%AB%98%E8%B3%AA%E9%87%8F%E7%99%BC%E5%B1%95%E9%82%81%E5%87%BA%E5%A0%85%E5%AF%A6%E6%AD%A5%E4%BC%90) The company fully embraces AI, building a smart cloud system, accelerating technological innovation, upgrading digital information infrastructure, and actively pursuing green development and cybersecurity strategies to navigate the new technological revolution [Smart Cloud System and "AI+" Initiative](index=4&type=section&id=2.1%20%E6%A7%8B%E5%BB%BA%E5%AE%8C%E6%88%90%E6%99%BA%E8%83%BD%E9%9B%B2%E9%AB%94%E7%B3%BB%EF%BC%8C%E6%B7%B1%E5%85%A5%E6%8E%A8%E9%80%B2%E3%80%8C%E4%BA%BA%E5%B7%A5%E6%99%BA%E8%83%BD%2B%E3%80%8D%E8%A1%8C%E5%8B%95) The company built a smart cloud system centered on "Xirang," offering integrated "computing power + platform + data + model + application" services to accelerate AI empowerment across industries, individuals, and enhance operational efficiency - A smart cloud system, centered on the primary technology "Xirang," has been established, providing integrated "computing power + platform + data + model + application" smart cloud services, with **total owned and accessed computing power reaching 77 EFLOPS**[9](index=9&type=chunk) - For government and enterprise clients, smart cloud services accelerate digital and intelligent transformation across various industries, developing **over 80 industry-specific large models** and **more than 30 intelligent agents**, serving **over 20,000 industry clients**[10](index=10&type=chunk) - The company deeply promotes AI technology empowerment, creating **over 160 AI applications**, with **smart customer service accounting for 87.5%**, **fault work orders reduced by 9.8%**, and **work order processing time reduced by 13%**[11](index=11&type=chunk) [Technological Innovation and Leading Enterprise Development](index=7&type=section&id=2.2%20%E7%9F%A2%E5%BF%97%E5%89%B5%E6%96%B0%E7%99%BC%E5%B1%95%EF%BC%8C%E5%8A%A0%E5%BF%AB%E5%BB%BA%E8%A8%AD%E7%A7%91%E6%8A%80%E9%A0%98%E8%BB%8D%E4%BC%81%E6%A5%AD) The company continues to advance high-level technological self-reliance, achieving breakthroughs in AI, computing power scheduling, large models, and quantum communication, earning multiple industry awards and certifications to solidify its leading technological position - The self-developed Tianyi Cloud server operating system passed national security and reliability assessments; breakthroughs in key technologies like computing power fusion scheduling and training inference acceleration led to the company retaining its **number one position in China's computing power interconnection scheduling market**[14](index=14&type=chunk) - The Xingchen multimodal large model was continuously upgraded, winning **championships in the ICCV 2025 and IJCAI 2025 AI anti-counterfeiting tracks**; self-developed high-performance privacy computing protocol clusters earned the **"Wu Wenjun Artificial Intelligence Science and Technology Progress Award"**[14](index=14&type=chunk) - **Quantum communication user scale exceeded 6 million**, serving **over 3,000 industry clients** in government, finance, and energy sectors; quantum computing achieved productization in three application scenarios: **physical machine deployment, cloud platform applications, and quantum information education**[12](index=12&type=chunk) [Cloud-Network Convergence and Digital Infrastructure Upgrade](index=9&type=section&id=2.3%20%E7%99%BC%E6%8F%B2%E9%9B%B2%E7%B6%B2%E8%9E%8D%E5%90%88%E5%84%AA%E5%8B%A2%EF%BC%8C%E5%8A%A0%E5%BF%AB%E6%95%B8%E5%AD%97%E4%BF%A1%E6%81%AF%E5%9F%BA%E7%A4%8E%E8%A8%AD%E6%96%BD%E6%99%BA%E8%83%BD%E5%8C%96%E5%8D%87%E7%B4%9A) Leveraging cloud-network convergence, the company accelerates intelligent upgrades of digital information infrastructure, proactively deploying computing power, building a new generation of AIDC with a center-edge tiered layout, and evolving networks towards ultra-high speed and large capacity while deepening co-construction and sharing - Proactively deploying computing power infrastructure, **owned smart computing power reached 43 EFLOPS**, **data center racks exceeded 580,000**, with **eight major hub nodes accounting for 85%**[16](index=16&type=chunk) - A smart computing network system integrating cloud-edge-device and coordinating access/inter-computing/intra-computing was built, launching the **nation's first 400G quantum-secure OTN encrypted computing private line**[16](index=16&type=chunk) - Networks are evolving towards ultra-high speed and large capacity, with **over 9.88 million 10G PON ports for gigabit optical networks**, and **gigabit residential coverage exceeding 96% in urban areas**; **total 5G mid-to-high frequency base stations reached 1.49 million**, and **low-frequency base stations reached 880,000**[16](index=16&type=chunk) [Green Empowerment and Security Escort](index=10&type=section&id=2.4%20%E7%B6%A0%E8%89%B2%E8%B3%A6%E8%83%BD%EF%BC%8C%E5%AE%89%E5%85%A8%E8%AD%B7%E8%88%AA%EF%BC%8C%E5%8A%A9%E6%8E%A8%E7%B6%93%E6%BF%9F%E7%A4%BE%E6%9C%83%E7%B6%A0%E8%89%B2%E5%AE%89%E5%85%A8%E7%99%BC%E5%B1%95) The company actively implements green development, promoting digital information infrastructure's green transformation, optimizing energy use, and enhancing green product and service empowerment, while integrating security with AI innovation to bolster cybersecurity, build large model security fences, and fortify AI defenses with quantum technology - **Carbon emissions per unit of telecom business volume decreased by double digits**; AI energy saving covered **over 5.96 million base station sectors and 3,400 equipment rooms**, with **annualized electricity savings of approximately 1.1 billion kWh**, and **green electricity usage exceeding 1.4 billion kWh**[17](index=17&type=chunk) - Accelerating "security-intelligence integration," continuously iterating the "Xingchen • Jianwei" security large model, **Cloud-Dike anti-DDoS scrubbing capacity exceeded 18 Tbps**, and **Cloud-Dike security托管 services accumulated over 7,000 connected clients**[18](index=18&type=chunk) - Strengthening "security for intelligence," building foundational security fences for large models, and deeply integrating quantum technology with next-generation networks and cloud computing to establish **quantum-level security defenses for AI**[18](index=18&type=chunk) [Reform and Opening-up and Governance System](index=11&type=section&id=3.%20%E9%80%B2%E4%B8%80%E6%AD%A5%E5%85%A8%E9%9D%A2%E6%B7%B1%E5%8C%96%E6%94%B9%E9%9D%A9%E9%96%8B%E6%94%BE%EF%BC%8C%E5%AE%8C%E5%96%84%E6%B2%BB%E7%90%86%E9%AB%94%E7%B3%BB%E6%8F%90%E5%8D%87%E6%B2%BB%E7%90%86%E8%83%BD%E5%8A%9B) The company comprehensively advances state-owned enterprise reform, optimizing talent development, refining R&D organization and innovation incentives, deepening reforms across all levels, and enhancing systemic open cooperation in technology, digital infrastructure, capital, and international markets to improve governance - Solidly advancing the "Everest," "Kunlun," and "Wuyue" programs, **24 new chief experts were selected**, improving the echelon structure of scientific and technological talent[19](index=19&type=chunk) - Deepening reforms of specialized companies, establishing Artificial Intelligence Technology (Shanghai) Co., Ltd.; Cloud Company and Digital Intelligence Company were recognized as **benchmark enterprises in SASAC's "Sci-Tech Reform Action" for three consecutive years**[19](index=19&type=chunk) - Strengthening open cooperation in technology, collaborating with Shanghai AI Lab to deeply participate in the application of DeepLink ultra-large-scale cross-domain mixed training technology; strengthening open cooperation in capital, **acquiring a controlling stake in Guodun Quantum**, and comprehensively deploying in the quantum information industry[20](index=20&type=chunk) [Social Responsibility and Capital Market Recognition](index=13&type=section&id=4.%20%E7%A9%8D%E6%A5%B5%E8%B9%A6%E8%A1%8C%E7%A4%BE%E6%9C%83%E8%B2%AC%E4%BB%BB%EF%BC%8C%E7%8D%B2%E5%BE%97%E8%B3%87%E6%9C%AC%E5%B8%82%E5%A0%B4%E5%BB%A3%E6%B3%9B%E8%AA%8D%E5%8F%AF) The company actively fulfills social responsibilities in communication assurance, rural revitalization, anti-fraud, and employee care, while prioritizing corporate governance, enhancing information disclosure, and strengthening investor relations, earning broad capital market recognition and numerous awards - Successfully completed communication assurance for major events such as the **Harbin Asian Winter Games, Boao Forum for Asia, and Shenzhou-20 manned spacecraft launch**, utilizing **Tiangong satellite and drone technologies in disaster relief efforts**[22](index=22&type=chunk) - "Caring Wing Stations" universal services covered **80,000 urban and rural business halls**, organized **over 80,000 care activities**, benefiting **over 8.6 million people**; developed the **"Yi'an Anti-Fraud" platform**[22](index=22&type=chunk) - Awarded **"Best Corporate Social Responsibility in Asia" by Corporate Governance Asia for the sixth consecutive year**; received the **"Investor Relations Management Shareholder Return Award" at the 16th Listed Company Investor Relations Management "Tianma Award" by Securities Times**; achieved an **A-level Huazheng Index ESG Comprehensive Rating in 2025**[24](index=24&type=chunk) [Strategic Outlook and Future Direction](index=14&type=section&id=5.%20%E4%B9%97%E5%8B%A2%E8%80%8C%E4%B8%8A%EF%BC%8C%E6%8A%8A%E6%8F%B2%E6%96%B9%E5%90%91%EF%BC%8C%E6%8E%A8%E5%8B%95%E4%BC%81%E6%A5%AD%E6%88%B0%E7%95%A5%E5%8D%87%E7%B4%9A) Reviewing the success of its "Cloud-Network Convergence and Digital Transformation" strategy, the company upgrades its strategy to "Cloud-Network Convergence, Digital Transformation, and Smart Empowerment," focusing on customer-centricity, reform, innovation, cloud-network integration, green security, digital platforms, and talent to build a world-class enterprise - The company fully implemented its Cloud-Network Convergence and Digital Transformation strategy, with **service revenue growth consistently above the industry average for years**, significant technological innovation achievements, and the formation of a **"1+1+1+M+N" AI development layout**[25](index=25&type=chunk) - The company's strategy is upgrading to "Cloud-Network Convergence, Digital Transformation, and Smart Empowerment," adhering to **customer-centricity, reform and opening-up as drivers, technological innovation as the core, cloud-network convergence as the foundation, green security as the baseline, digital intelligence platforms as hubs, and talent as the root**[27](index=27&type=chunk) - Looking ahead, the company will deeply advance the **"AI+" initiative**, accelerate the intelligent evolution and upgrade of digital information infrastructure, further comprehensively deepen reform and opening-up, and **expedite the construction of a world-class enterprise**[28](index=28&type=chunk) [Group Performance](index=17&type=section&id=%E9%9B%86%E5%9C%98%E6%A5%AD%E7%B8%BE) This section presents the condensed consolidated financial statements, including the statement of comprehensive income and financial position, along with detailed notes on accounting policies, segment reporting, revenue, costs, and shareholder distributions [Condensed Consolidated Statement of Comprehensive Income](index=17&type=section&id=%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%EF%BC%88%E6%9C%AA%E7%B6%93%E5%AF%A9%E6%A0%B8%EF%BC%89) For the six months ended June 30, 2025, the company's operating revenue increased by 1.3% to RMB 271.469 billion, net profit grew by 5.5% to RMB 23.019 billion, and basic earnings per share were RMB 0.25 Key Data from Condensed Consolidated Statement of Comprehensive Income | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | | :--- | :--- | :--- | | Operating Revenue | 271,469 | 268,011 | | Operating Profit | 28,549 | 27,260 | | Net Finance Costs | (294) | (250) | | Investment Income and Other | 107 | 84 | | Share of Profit of Associates and Joint Ventures | 1,233 | 1,145 | | Profit Before Tax | 29,595 | 28,239 | | Income Tax | (6,576) | (6,273) | | Profit for the Period | 23,019 | 21,966 | | Profit Attributable to Company Shareholders | 23,017 | 21,812 | | Basic EPS (RMB) | 0.25 | 0.24 | Composition of Operating Expenses | Expense Category | H1 2025 (RMB million) | H1 2024 (RMB million) | | :--- | :--- | :--- | | Depreciation and Amortization | (52,039) | (49,532) | | Network Operation and Support Costs | (78,288) | (80,131) | | Selling, General and Administrative Expenses | (32,783) | (33,090) | | Staff Costs | (50,438) | (50,566) | | Other Operating Expenses | (29,372) | (27,432) | | **Total Operating Expenses** | **(242,920)** | **(240,751)** | [Condensed Consolidated Statement of Financial Position](index=20&type=section&id=%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%EF%BC%88%E6%9C%AA%E7%B6%93%E5%AF%A9%E6%A0%B8%EF%BC%89) As of June 30, 2025, total assets reached RMB 887.224 billion, a 2.38% increase from year-end 2024, with non-current assets slightly down, current assets significantly up due to increased receivables and short-term bank deposits, and both total liabilities and equity growing Key Data from Condensed Consolidated Statement of Financial Position | Indicator | June 30, 2025 (RMB million) | Dec 31, 2024 (RMB million) | | :--- | :--- | :--- | | **Assets** | | | | Total Non-Current Assets | 662,230 | 678,500 | | Total Current Assets | 224,994 | 188,125 | | **Total Assets** | **887,224** | **866,625** | | **Liabilities and Equity** | | | | Total Current Liabilities | 330,152 | 325,377 | | Total Non-Current Liabilities | 83,063 | 84,696 | | **Total Liabilities** | **413,215** | **410,073** | | Total Equity Attributable to Company Shareholders | 466,871 | 452,390 | | Non-Controlling Interests | 7,138 | 4,162 | | **Total Equity** | **474,009** | **456,552** | - **Net current liabilities improved to RMB 105.158 billion** from RMB 137.252 billion at year-end 2024; management believes that with sustained operating cash flow, **unused credit facilities (RMB 205.266 billion)**, and a strong credit record, the company has sufficient funds for operations and debt servicing[36](index=36&type=chunk)[40](index=40&type=chunk) [Notes to the Financial Statements](index=22&type=section&id=%E9%99%84%E8%A8%BB%EF%BC%9A) These notes detail the basis of preparation for interim financial information, adoption of accounting standards, segment reporting, operating revenue breakdown, finance costs, income tax, EPS, dividend policy, accounts receivable and payable composition and aging, and post-reporting period dividend distribution [Basis of Preparation](index=22&type=section&id=1.%20%E7%B7%A8%E8%A3%BD%E5%9F%BA%E6%BA%96) The condensed consolidated interim financial information is prepared in accordance with IAS 34 and HKEX Listing Rules, and during the period, the Group gained control of Guodun Quantum through a concerted action agreement, consolidating it and recognizing RMB 991 million in goodwill - The condensed consolidated interim financial information is prepared in accordance with **International Accounting Standard 34 "Interim Financial Reporting"** issued by the IASB and complies with the applicable disclosure requirements of the **Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited**[37](index=37&type=chunk) - The Group, through a concerted action agreement with other shareholders of Guodun Quantum, collectively holds **40.43% of Guodun Quantum's voting rights**, gaining control in H1 2025, consolidating it into the financial statements, and recognizing **goodwill of RMB 991 million**[39](index=39&type=chunk) [Adoption of Revised International Financial Reporting Standards](index=22&type=section&id=2.%20%E6%8E%A1%E7%94%A8%E7%B6%93%E4%BF%AE%E8%A8%82%E7%9A%84%E5%9C%8B%E9%9A%9B%E8%B2%A1%E5%8B%99%E5%A0%B1%E5%91%8A%E6%9C%83%E8%A8%88%E6%BA%96%E5%89%87) The first-time adoption of IAS 21 "The Effects of Changes in Foreign Exchange Rates" (amended) – Lack of Exchangeability, had no material impact on the Group's condensed consolidated interim financial information - The first-time adoption of **International Accounting Standard 21 "The Effects of Changes in Foreign Exchange Rates" (amended) – Lack of Exchangeability** had no material impact on the Group's condensed consolidated interim financial information[41](index=41&type=chunk) [Segment Reporting](index=23&type=section&id=3.%20%E5%88%86%E9%83%A8%E5%A0%B1%E5%91%8A) Given the Group operates its telecommunications business in an integrated manner, management identifies only one operating segment; assets and operating revenue outside mainland China are immaterial, thus no geographical information is presented, and no single customer accounts for over 10% of revenue - The Group operates its telecommunications business in an integrated manner, and management has identified **only one operating segment**[42](index=42&type=chunk) - The Group's assets located outside mainland China and operating revenue generated from activities outside mainland China are **less than ten percent of the Group's total assets and operating revenue**, and **no single customer accounts for ten percent or more of the Group's operating revenue**[42](index=42&type=chunk) [Operating Revenue Analysis](index=23&type=section&id=4.%20%E7%B6%93%E7%87%9F%E6%94%B6%E5%85%A5) For the six months ended June 30, 2025, total operating revenue was RMB 271.469 billion, with service revenue at RMB 249.112 billion, comprising mobile, fixed-line, smart home, industrial digitalization, and other services, while revenue from sales of goods and others was RMB 22.357 billion Operating Revenue Breakdown | Type of Goods or Services | H1 2025 (RMB million) | H1 2024 (RMB million) | | :--- | :--- | :--- | | Service Revenue | 249,112 | 246,235 | | - Mobile Communication Service Revenue | 106,572 | 105,217 | | - Fixed-line and Smart Home Service Revenue | 64,133 | 63,993 | | - Industrial Digitalization Service Revenue | 74,853 | 73,750 | | - Other Service Revenue | 3,554 | 3,275 | | Revenue from Sales of Goods and Other | 22,357 | 21,776 | | **Total Operating Revenue** | **271,469** | **268,011** | - Revenue recognition timing: **RMB 20.298 billion revenue recognized at a point in time**, and **RMB 251.171 billion revenue recognized over a period of time**[43](index=43&type=chunk) [Net Finance Costs](index=24&type=section&id=5.%20%E8%B2%A1%E5%8B%99%E6%88%90%E6%9C%AC%E6%B7%A8%E9%A1%8D) For the six months ended June 30, 2025, the Group's net finance costs increased to RMB 294 million from RMB 250 million in the prior year, comprising net interest expense of RMB 1.063 billion, interest income of RMB 941 million, and net exchange losses and other items of RMB 172 million Composition of Net Finance Costs | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | | :--- | :--- | :--- | | Interest Expense on Lease Liabilities | 776 | 912 | | Interest Expense on Short-term and Long-term Loans | 322 | 320 | | Less: Capitalized Interest Expense | (35) | (40) | | **Net Interest Expense** | **1,063** | **1,192** | | Interest Income | (941) | (1,042) | | Net Exchange Losses and Other | 172 | 100 | | **Net Finance Costs** | **294** | **250** | - The applicable annual interest rate for capitalization of interest on construction in progress was **2.4%–2.9% (2024: 2.8%–3.2%)**[45](index=45&type=chunk) [Income Tax](index=24&type=section&id=6.%20%E6%89%80%E5%BE%97%E7%A8%85) For the six months ended June 30, 2025, income tax expense increased to RMB 6.576 billion from RMB 6.273 billion in the prior year, primarily comprising provisions for China income tax, other tax jurisdictions, and deferred tax Composition of Income Tax Expense | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | | :--- | :--- | :--- | | Provision for China Income Tax | 4,309 | 5,761 | | Provision for Income Tax in Other Tax Jurisdictions | 118 | 103 | | Deferred Tax | 2,149 | 409 | | **Income Tax Expense** | **6,576** | **6,273** | - Estimated income tax expense calculated at the **statutory tax rate of 25% was RMB 7.399 billion**; income tax expense is influenced by tax rate differences, non-taxable income, non-deductible expenses, unrecognized deferred tax, and R&D expense super deduction, among other factors[48](index=48&type=chunk) [Earnings Per Share](index=26&type=section&id=7.%20%E6%AF%8F%E8%82%A1%E6%B7%A8%E5%88%A9%E6%BD%A4) For the six months ended June 30, 2025, both basic and diluted earnings per share were RMB 0.25, representing an increase compared to the same period last year - **Basic earnings per share were RMB 0.25** (H1 2024: RMB 0.24)[49](index=49&type=chunk) - **Diluted earnings per share were equal to basic earnings per share**, as there were no potential ordinary shares during the reporting period[50](index=50&type=chunk) [Dividends](index=26&type=section&id=8.%20%E8%82%A1%E6%81%AF) The final dividend for the year ended December 31, 2024, was RMB 0.0927 per share (tax inclusive), totaling approximately RMB 8.483 billion, which has been declared and distributed - The final dividend for the year ended December 31, 2024, was **RMB 0.0927 per share (tax inclusive)**, totaling approximately **RMB 8.483 billion**, which has been declared[51](index=51&type=chunk) - Of this, **RMB 7.269 billion was distributed on June 11, 2025**, and **RMB 1.214 billion was distributed on July 18, 2025**[51](index=51&type=chunk) [Net Accounts Receivable](index=27&type=section&id=9.%20%E6%87%89%E6%94%B6%E8%B3%A3%E6%AC%BE%E6%B7%A8%E9%A1%8D) As of June 30, 2025, net accounts receivable significantly increased to RMB 70.135 billion from RMB 42.867 billion at year-end 2024, with third-party receivables at RMB 79.166 billion and credit loss provisions at RMB 15.981 billion Net Accounts Receivable Analysis | Category | June 30, 2025 (RMB million) | Dec 31, 2024 (RMB million) | | :--- | :--- | :--- | | Third Parties | 79,166 | 49,726 | | China Telecom Group | 5,133 | 2,556 | | China Tower | 50 | 46 | | Other China Telecom Operators | 1,767 | 1,259 | | **Total** | **86,116** | **53,587** | | Less: Provision for Credit Losses | (15,981) | (10,720) | | **Net Amount** | **70,135** | **42,867** | Accounts Receivable Aging Analysis | Aging | June 30, 2025 (RMB million) | Dec 31, 2024 (RMB million) | | :--- | :--- | :--- | | Within 1 Year | 69,222 | 42,715 | | 1 to 2 Years | 10,197 | 6,435 | | 2 to 3 Years | 3,820 | 2,273 | | Over 3 Years | 2,877 | 2,164 | [Accounts Payable](index=28&type=section&id=10.%20%E6%87%89%E4%BB%98%E8%B3%A3%E6%AC%BE) As of June 30, 2025, total accounts payable slightly decreased to RMB 157.417 billion from RMB 160.550 billion at year-end 2024, with third-party accounts payable amounting to RMB 113.150 billion Accounts Payable Analysis | Category | June 30, 2025 (RMB million) | Dec 31, 2024 (RMB million) | | :--- | :--- | :--- | | Third Parties | 113,150 | 117,720 | | China Telecom Group | 30,863 | 31,194 | | China Tower | 11,730 | 10,618 | | Other China Telecom Operators | 1,674 | 1,018 | | **Total** | **157,417** | **160,550** | Accounts Payable Aging Analysis | Aging | June 30, 2025 (RMB million) | Dec 31, 2024 (RMB million) | | :--- | :--- | :--- | | Due within 1 Month or on Demand | 34,195 | 39,275 | | Due between 1 and 3 Months | 32,383 | 32,642 | | Due between 3 and 6 Months | 36,859 | 40,409 | | Due over 6 Months | 53,980 | 48,224 | [Events After the Reporting Period](index=28&type=section&id=11.%20%E5%A0%B1%E5%91%8A%E6%9C%9F%E5%BE%8C%E4%BA%8B%E9%A0%85) Post-reporting period, the company distributed the 2024 final dividend of RMB 1.214 billion on July 18, 2025; the Board resolved on August 14, 2025, to declare an interim dividend for H1 2025 of RMB 0.1812 per share (tax inclusive), totaling approximately RMB 16.581 billion - The **2024 final dividend of RMB 1.214 billion was distributed on July 18, 2025**[57](index=57&type=chunk) - The Board of Directors resolved on August 14, 2025, to declare an **interim dividend for H1 2025 of RMB 0.1812 per share (tax inclusive)**, totaling approximately **RMB 16.581 billion**[57](index=57&type=chunk) - This dividend was **not accrued in the condensed consolidated financial information for the six months ended June 30, 2025**[57](index=57&type=chunk) [Corporate Governance and Other Information](index=29&type=section&id=%E5%85%AC%E5%8F%B8%E6%B2%BB%E7%90%86%E8%88%87%E5%85%B6%E4%BB%96%E4%BF%A1%E6%81%AF) This section covers the company's adherence to corporate governance codes, review by the audit committee, compliance with securities trading standards, details of interim dividend distribution, forward-looking statements, and board member composition [Dealings in Listed Securities](index=29&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%B9%8B%E4%B8%8A%E5%B8%82%E8%AD%89%E5%88%B8) For 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 - For 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**[58](index=58&type=chunk) [Review by Audit Committee](index=29&type=section&id=%E5%AF%A9%E6%A0%B8%E5%A7%94%E5%93%A1%E6%9C%83) The Audit Committee reviewed the Group's accounting policies, practices, risk management, internal controls, and financial reporting matters with management and external auditors, and also reviewed the interim report for the six months ended June 30, 2025 - The Audit Committee has reviewed the **accounting policies and practices adopted by the Group** with management and the company's external auditors, and has discussed the Group's **risk management, internal controls, and financial reporting matters**[59](index=59&type=chunk) - The Audit Committee has **reviewed the interim report for the six months ended June 30, 2025**[59](index=59&type=chunk) [Compliance with Corporate Governance Code](index=29&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 prioritizes corporate governance, continuously improving internal controls, enhancing information disclosure, and increasing transparency; except for the combined roles of Chairman and CEO, the company complied with the Corporate Governance Code in Appendix C1 of the HKEX Listing Rules during the reporting period - The company places high importance on corporate governance, continuously promoting the **improvement of its internal control system**, strengthening information disclosure, and **enhancing corporate transparency**[60](index=60&type=chunk) - For the six months ended June 30, 2025, the **roles of Chairman and Chief Executive Officer of the company were held by the same person**[60](index=60&type=chunk) - Save for the above, the company has **complied with the code provisions set out in Appendix C1 "Corporate Governance Code" of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited** for the six months ended June 30, 2025[60](index=60&type=chunk) [Standard Code for Securities Transactions by Directors and Supervisors](index=29&type=section&id=%E8%91%A3%E4%BA%8B%E5%92%8C%E7%9B%A3%E4%BA%8B%E9%81%B5%E5%AE%88%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) Following written inquiries, all company directors and supervisors confirmed compliance with the Standard Code for Securities Transactions by Directors of Listed Issuers, as set out in Appendix C3 of the Listing Rules, for the period from January 1 to June 30, 2025 - Following written inquiries to the directors and supervisors, they have confirmed compliance with all standard requirements of the **Standard Code for Securities Transactions by Directors of Listed Issuers** as set out in Appendix C3 of the Listing Rules for the period from **January 1, 2025, to June 30, 2025**[61](index=61&type=chunk) [Interim Dividend Distribution Details](index=30&type=section&id=%E4%B8%AD%E6%9C%9F%E8%82%A1%E6%81%AF) The Board resolved to declare an interim dividend for H1 2025 of RMB 0.1812 per share (tax inclusive), totaling approximately RMB 16.581 billion; H share register closure is from August 29 to September 3, 2025, with payment expected by September 30, 2025, and this section also details withholding tax policies and payment arrangements for various H share shareholders - The Board of Directors decided to distribute a dividend to all shareholders, representing **72% of the profit attributable to company shareholders for the six months ended June 30, 2025 (RMB 23.02 billion)**, totaling **RMB 16.58 billion**, or **RMB 0.1812 per share (tax inclusive)**[62](index=62&type=chunk) - The interim dividend is expected to be paid on or before **September 30, 2025**, to shareholders whose names appear on the company's H share register of members on **September 3, 2025**; the **H share register of members will be closed from August 29, 2025, to September 3, 2025**[63](index=63&type=chunk) - Dividends will be denominated and declared in RMB; **A share shareholders and Stock Connect investors will receive dividends in RMB**, while **H share shareholders (excluding Stock Connect investors) will receive dividends in HKD**, with the conversion rate based on the **average central parity rate of RMB to HKD for the week prior to August 14, 2025**[64](index=64&type=chunk) - Withholding income tax policy: **10% corporate income tax will be withheld for overseas H share non-resident enterprise shareholders**; **H share individual shareholders will have 10% or 20% individual income tax withheld** based on their resident status and tax treaties; **Stock Connect mainland individual investors and securities investment funds will have 20% individual income tax withheld**; **Stock Connect mainland enterprise investors will not have dividend income tax withheld**[65](index=65&type=chunk)[66](index=66&type=chunk)[68](index=68&type=chunk) [Forward-Looking Statements](index=34&type=section&id=%E5%89%8D%E7%9E%BB%E6%80%A7%E9%99%B3%E8%BF%B0) Forward-looking statements in this announcement do not constitute a commitment to investors, are subject to known and unknown risks and uncertainties that may cause actual results to differ materially, and the company will not update them, urging investors to be aware of investment risks - Forward-looking statements in this announcement, including development strategies, future operating plans, and outlooks, **do not constitute a commitment by the company to investors**[74](index=74&type=chunk) - Such forward-looking statements are subject to known and unknown risks, uncertainties, and other factors, which may cause the company's **actual performance, financial condition, or operating results to differ materially from any future performance, financial condition, or operating results implied by such forward-looking statements**[74](index=74&type=chunk) - The company will **not update these forward-looking statements**, and investors are kindly reminded to **pay attention to investment risks**[74](index=74&type=chunk) [Board Members](index=34&type=section&id=%E8%91%A3%E4%BA%8B%E6%9C%83%E6%88%90%E5%93%A1) As of the announcement date, the Board of Directors includes Chairman and CEO Ke Ruiwen, President and COO Liu Guiqing, Executive VPs Tang Ke and Li Yinghui (CFO), Non-Executive Director Lü Yongzhong, and Independent Non-Executive Directors Wu Jianing, Yang Zhiwei, Chen Dongqi, and Lü Wei - Board members include **Ke Ruiwen (Chairman and Chief Executive Officer)**, **Liu Guiqing (President and Chief Operating Officer)**, **Tang Ke (Executive Vice President)**, **Li Yinghui (Chief Financial Officer, Executive Vice President)**, **Lü Yongzhong (Non-Executive Director)**, **Wu Jianing (Independent Non-Executive Director)**, **Yang Zhiwei (Independent Non-Executive Director)**, **Chen Dongqi (Independent Non-Executive Director)**, and **Lü Wei (Independent Non-Executive Director)**[75](index=75&type=chunk)

Performance Summary [Performance Summary](index=1&type=section&id=%E6%A5%AD%E7%B8%BE%E6%91%98%E8%A6%81) This section provides a concise overview of the company's financial performance for the first half of 2025, highlighting key profit metrics and dividend declarations | Indicator | 2025 (HKD Million) | 2024 (HKD Million) | Change (%) | | :--- | :--- | :--- | :--- | | Profit before revaluation of investment properties | 6,805 | 6,726 | +1.6 | | Revaluation of investment properties (net of tax and non-controlling interests) | (503) | 1,877 | - | | Profit attributable to shareholders | 6,302 | 8,603 | -26.2 | | Interim dividend (HKD per share) | 0.39 | 0.39 | - | - In the first half of 2025, profit per share before revaluation of investment properties was **HKD 1.94**, an increase of **1.6%** compared to **HKD 1.91** in the same period last year[4](index=4&type=chunk) - In the first half of 2025, profit per share attributable to shareholders was **HKD 1.80**, a decrease of **26.2%** compared to **HKD 2.44** in the same period last year[4](index=4&type=chunk) - The Board of Directors declared an interim dividend of **HKD 0.39** per share for 2025, consistent with 2024[5](index=5&type=chunk) Business Review [Property Sales](index=2&type=section&id=%E7%89%A9%E6%A5%AD%E9%8A%B7%E5%94%AE) The Hong Kong residential property market faced challenges in the first half of 2025, with cautious sentiment despite stamp duty reductions and lower mortgage rates, leading to increased sales revenue but reduced profit due to discounts - The Hong Kong residential property market remains challenging, with a cautious market sentiment[8](index=8&type=chunk) - Central government policies supporting mainland real estate demand stimulated the property market[8](index=8&type=chunk) - The Group's property sales revenue increased in the first half of 2025, but related profit decreased[8](index=8&type=chunk) - The residential project "Kai Tak Fleur de Lis" is expected to launch pre-sales in the second half of 2025[8](index=8&type=chunk) [Property Leasing](index=2&type=section&id=%E7%89%A9%E6%A5%AD%E7%A7%9F%E5%8B%99) In the first six months of 2025, the Hong Kong retail and commercial property leasing sector was weak, with slight decreases in the Group's leasing income and profit, partially offset by earnings from the UK Civitas social infrastructure portfolio - The Hong Kong retail and commercial property leasing sector remains weak[9](index=9&type=chunk) - Earnings from the UK Civitas social infrastructure investment portfolio helped mitigate challenges faced by the Group in the Hong Kong market[9](index=9&type=chunk) - The Group's property leasing income and profit in the first half of the year both recorded slight decreases compared to the same period in 2024[9](index=9&type=chunk) - Promotional and leasing plans are actively underway for the newly completed Cheung Kong Center II[9](index=9&type=chunk) [Hotel and Serviced Suite Business](index=3&type=section&id=%E9%85%92%E5%BA%97%E5%8F%8A%E6%9C%8D%E5%8B%99%E5%A5%97%E6%88%BF%E6%A5%AD%E5%8B%99) Despite an increase in visitors to Hong Kong, average hotel room rates declined due to industry cost pressures, resulting in moderate revenue growth but a slight decrease in profit for the Group's hotel and serviced suite business - Both visitor arrivals and overnight stays in Hong Kong increased, but average hotel room rates decreased[10](index=10&type=chunk) - The Group's hotel and serviced suite business recorded moderate revenue growth compared to the same period last year, but related profit slightly decreased[10](index=10&type=chunk) - The Group will continue to optimize its hotel and serviced suite business portfolio in response to market demand and is committed to digital transformation and innovation[10](index=10&type=chunk) [Pub Business](index=3&type=section&id=%E8%8B%B1%E5%BC%8F%E9%85%92%E9%A4%A8%E6%A5%AD%E5%8B%99) The UK pub industry faces challenges from rising operating costs and changing consumer habits, yet Greene King's pub business maintained stability with increased revenue and profit in the first half of 2025, aiming for long-term growth through digital investment - The UK pub industry is affected by increasing operating cost pressures and changing consumer habits[11](index=11&type=chunk) - Greene King's pub business maintained stability amidst a continuously difficult market environment, with both revenue and profit increasing compared to the same period in 2024[11](index=11&type=chunk) - Greene King is committed to achieving long-term growth by investing in digital technology, increasing market share, and enhancing customer spending[11](index=11&type=chunk) [Infrastructure and Utility Assets Business](index=3&type=section&id=%E5%9F%BA%E5%BB%BA%E5%8F%8A%E5%AF%A6%E7%94%A8%E8%B3%87%E7%94%A3%E6%A5%AD%E5%8B%99) The Group continues to expand its infrastructure and utility assets investment portfolio, providing stable recurring income with robust growth in revenue and profit during the period, while agreeing to sell its interests in Eversholt UK Rails - The Group continuously expands its infrastructure and utility assets investment portfolio, providing stable recurring income[12](index=12&type=chunk) - Revenue and profit recorded robust growth compared to the same period in 2024[12](index=12&type=chunk) - These businesses have appropriate debt-to-equity ratios, and their income and related assets are resilient to macroeconomic changes such as inflation and high interest rates[12](index=12&type=chunk) - The Group has agreed to sell all its interests in Eversholt UK Rails, with the transaction expected to take several months to complete[12](index=12&type=chunk) [Sustainability](index=4&type=section&id=%E5%8F%AF%E6%8C%81%E7%BA%8C%E7%99%BC%E5%B1%95) The Group has achieved SBTi certification for its short-term and net-zero emission reduction targets, actively implementing decarbonization plans and sustainable construction practices in property development, earning multiple green building awards - The Group has obtained Science Based Targets initiative (SBTi) certification for its short-term and net-zero emission reduction targets[13](index=13&type=chunk) - Greene King also received SBTi approval in May this year for its net-zero emission target by 2040[13](index=13&type=chunk) - The Group intends to comply with the new mandatory climate-related disclosures under the HKEX ESG Guide ahead of schedule[13](index=13&type=chunk) - The Group's development projects have repeatedly won green building awards, including the Cheung Kong Center II receiving the BEAM Plus New Buildings Final Platinum rating certificate[14](index=14&type=chunk) Outlook [Outlook](index=4&type=section&id=%E5%B1%95%E6%9C%9B%E6%9C%AA%E4%BE%86) The global economic environment is increasingly complex, influenced by geopolitical conflicts and trade tensions, while mainland China and Hong Kong economies show improvement, and the Group maintains a robust, diversified portfolio and strong financial position - The global economic environment is becoming increasingly complex and volatile, influenced by geopolitical conflicts, policy changes, and trade tensions[15](index=15&type=chunk) - The mainland economy continues to improve, with a **5.3% year-on-year GDP growth** in the first half of 2025[15](index=15&type=chunk) - Hong Kong's real GDP increased by approximately **3% year-on-year** in the first half of 2025, solidifying its position as an international financial, trade, and shipping center through its role as a super-connector[15](index=15&type=chunk) - The Group will continue to maintain its solid and diversified investment and asset portfolio, leveraging its financial strength and low capital gearing ratio to address challenges[16](index=16&type=chunk) - The Group's net debt to total capital ratio was approximately **5.0%** at the interim balance sheet date[16](index=16&type=chunk) - The Group maintained credit ratings of "A/Stable" by S&P and "A2 Stable" by Moody's, reflecting its financial robustness[16](index=16&type=chunk) Appreciation [Appreciation](index=5&type=section&id=%E8%87%B4%E6%84%8F) The Chairman extends deep gratitude to employees, Board members, and stakeholders worldwide for their diligent work, loyal service, and long-term support - The Chairman expresses deep gratitude to employees across all global departments, Board members, and various stakeholders for their diligent work, loyal service and long-term support[17](index=17&type=chunk) Management Discussion and Analysis [Principal Business Activities](index=6&type=section&id=%E4%B8%BB%E8%A6%81%E6%A5%AD%E5%8B%99%E6%B4%BB%E5%8B%95) This section details the Group's completed and anticipated property projects in 2025 across Hong Kong, mainland China, Singapore, and London, and highlights the update of its USD 5 billion Euro Medium Term Note Programme to support financing activities 2025 Completed and Expected Property Projects | Name | Location | Floor Area (sq ft) | Group's Interest | | :--- | :--- | :--- | :--- | | The Coastline II | Yau Tong Inland Lot | 304,884 | 100% | | Blue Coast and Blue Coast II | Aberdeen Inland Lot | 999,976 | Joint Development | | Perfect Ten | Singapore | 219,518 | 100% | | High-Rise Elegant City | Putuo District, Shanghai | 1,648,685 | 60% | | Imperial Peak | Nan'an District, Chongqing | 1,056,689 | 95% | | Laguna Verde | Henggang Reservoir, Dongguan | 383,647 | 99.8% | | Imperial Bay | Jinzhou New District, Dalian | 969,537 | 100% | | Villa Verde | Zengcheng, Guangzhou | 198,351 | 100% | | Longbo Garden | Daya Bay, Huizhou | 1,216,988 | 100% | | Imperial Garden | Pudong New Area, Shanghai | 261,480 | 85% | | Lakeview Garden | Caidian District, Wuhan | 283,127 | 100% | | Chelsea Waterfront | Chelsea/Fulham, London | 431,501 | 95% | - The Group updated its existing **USD 5 billion** Euro Medium Term Note Programme, which was listed on The Stock Exchange of Hong Kong Limited on June 23, 2025[21](index=21&type=chunk) [Property Sales](index=8&type=section&id=%E7%89%A9%E6%A5%AD%E9%8A%B7%E5%94%AE) First-half property sales revenue significantly increased to **HKD 7.366 billion**, primarily from mainland China and overseas markets, but sales profit slightly decreased due to market weakness and discounts; the Group holds **HKD 28.553 billion** in contracted but unrecognised sales and approximately **67 million sq ft** of developable land bank First-Half Recognized Property Sales Revenue (including share of joint ventures) | Region | 2025 (HKD Million) | 2024 (HKD Million) | | :--- | :--- | :--- | | Hong Kong | 2,803 | 2,601 | | Mainland China | 3,827 | 1,761 | | Overseas | 736 | 273 | | **Total** | **7,366** | **4,635** | First-Half Property Sales Profit | Region | 2025 (HKD Million) | 2024 (HKD Million) | | :--- | :--- | :--- | | Hong Kong | 74 | 1,044 | | Mainland China | 1,469 | 710 | | Overseas | 225 | 67 | | **Total** | **1,768** | **1,821** | - First-half property sales revenue increased year-on-year, but sales profit decreased, mainly due to various discounts offered by the Group to promote sales in a weak market, resulting in a lower profit margin during the period[22](index=22&type=chunk) Contracted but Unrecognized Property Sales (as of June 30, 2025) | Region | Expected to be recognized in 2025 (HKD Million) | Expected to be recognized after 2025 (HKD Million) | Total (HKD Million) | | :--- | :--- | :--- | :--- | | Hong Kong | 16,474 | 5,628 | 22,102 | | Mainland China | 2,153 | 27 | 2,180 | | Overseas | 4,271 | - | 4,271 | | **Total** | **22,898** | **5,655** | **28,553** | - As of the interim balance sheet date, the Group held approximately **67 million sq ft** of developable land bank, including **6 million sq ft** in Hong Kong, **58 million sq ft** in mainland China, and **3 million sq ft** overseas[25](index=25&type=chunk) [Property Leasing](index=9&type=section&id=%E7%89%A9%E6%A5%AD%E7%A7%9F%E5%8B%99) First-half property leasing income and profit both decreased year-on-year, primarily due to the expiration of the Shanghai Meilongzhen Plaza joint venture in mainland China and the continued sluggish retail and office leasing market in Hong Kong; the Group's investment property portfolio of approximately **22.4 million sq ft** recorded a fair value decrease of **HKD 542 million** during the period First-Half Property Leasing Income (including share of joint ventures) | Property Use | 2025 (HKD Million) | 2024 (HKD Million) | | :--- | :--- | :--- | | Retail | 859 | 971 | | Office | 871 | 890 | | Industrial | 386 | 385 | | Social Infrastructure | 671 | 648 | | Other | 215 | 224 | | **Total** | **3,002** | **3,118** | First-Half Property Leasing Profit | Region | 2025 (HKD Million) | 2024 (HKD Million) | | :--- | :--- | :--- | | Hong Kong | 1,745 | 1,816 | | Mainland China | 78 | 139 | | Overseas | 492 | 489 | | **Total** | **2,315** | **2,444** | - First-half property leasing income and profit both decreased year-on-year, mainly because the Shanghai Meilongzhen Plaza and commercial building in mainland China no longer provided rental income after the expiration of the joint venture, and the Hong Kong retail and office property leasing market remained sluggish[27](index=27&type=chunk) - As of June 30, 2025, the Group held an investment property portfolio of approximately **22.4 million sq ft**[27](index=27&type=chunk) - As of June 30, 2025, a fair value decrease of **HKD 542 million** was recorded for investment properties based on professional valuation (2024 - increase of **HKD 1.42 billion**)[27](index=27&type=chunk) [Hotel and Serviced Suite Business](index=11&type=section&id=%E9%85%92%E5%BA%97%E5%8F%8A%E6%9C%8D%E5%8B%99%E5%A5%97%E6%88%BF%E6%A5%AD%E5%8B%99) During the period, despite a continuous increase in visitor arrivals to Hong Kong, per capita spending decreased, leading to slight revenue growth but a slight year-on-year decrease in profit for the Group's hotel and serviced suite business, with high average occupancy rates of **89%** for hotels and **88%** for serviced suites - During the period, visitor arrivals to Hong Kong continued to increase, while per capita spending decreased compared to last year[28](index=28&type=chunk) - First-half hotel and serviced suite business revenue was **HKD 2.192 billion** (2024 - **HKD 2.130 billion**), recording slight growth[28](index=28&type=chunk) - The average occupancy rates for hotels and serviced suites during the period were **89%** and **88%**, respectively[28](index=28&type=chunk) First-Half Hotel and Serviced Suite Business Profit | Region | 2025 (HKD Million) | 2024 (HKD Million) | | :--- | :--- | :--- | | Hong Kong | 816 | 853 | | Mainland China | (22) | (30) | | **Total** | **794** | **823** | [Property and Project Management](index=11&type=section&id=%E7%89%A9%E6%A5%AD%E5%8F%8A%E9%A0%85%E7%9B%AE%E7%AE%A1%E7%90%86) First-half property and project management revenue remained stable, with a slight increase in profit; the Group manages approximately **248 million sq ft** of properties, primarily in Hong Kong and mainland China, committed to providing quality services - First-half property and project management revenue was **HKD 444 million** (2024 - **HKD 445 million**), remaining stable[29](index=29&type=chunk) First-Half Property and Project Management Profit | Region | 2025 (HKD Million) | 2024 (HKD Million) | | :--- | :--- | :--- | | Hong Kong | 134 | 143 | | Mainland China | 22 | 20 | | Overseas | 26 | 17 | | **Total** | **182** | **180** | - As of the interim balance sheet date, the Group provided property management and related services for approximately **248 million sq ft** of properties, primarily located in Hong Kong and mainland China[30](index=30&type=chunk) [Pub Business](index=12&type=section&id=%E8%8B%B1%E5%BC%8F%E9%85%92%E9%A4%A8%E6%A5%AD%E5%8B%99) The Group's pub business (Greene King) saw first-half revenue grow to **HKD 12.524 billion**, driven by price adjustments and local currency appreciation, with increased profit, maintaining stability despite weak consumer confidence and high labor costs - First-half pub business revenue was **HKD 12.524 billion** (2024 - **HKD 11.823 billion**), an increase of **HKD 701 million** compared to the same period last year[31](index=31&type=chunk) - Revenue growth was primarily driven by price adjustments and local currency appreciation[31](index=31&type=chunk) - First-half profit was **HKD 629 million** (2024 - **HKD 597 million**)[31](index=31&type=chunk) Greene King Pub Business Performance (First Half 2025) | Division | Revenue (HKD Million) | Profit (HKD Million) | | :--- | :--- | :--- | | Pub Company | 10,392 | 403 | | Pub Partners | 1,003 | 247 | | Brewing & Brands | 1,129 | (21) | | **Total** | **12,524** | **629** | [Infrastructure and Utility Assets Business](index=13&type=section&id=%E5%9F%BA%E5%BB%BA%E5%8F%8A%E5%AF%A6%E7%94%A8%E8%B3%87%E7%94%A2%E6%A5%AD%E5%8B%99) The Group's infrastructure and utility assets business, primarily operated through joint ventures, provides stable recurring income; first-half share of joint venture revenue reached **HKD 13.598 billion**, with profit of **HKD 4.576 billion**, showing robust year-on-year growth and strong performance across diversified investments in Australia, Europe, and North America Group's Share of Joint Ventures' Revenue (First Half 2025) | Joint Venture | 2025 (HKD Million) | 2024 (HKD Million) | | :--- | :--- | :--- | | CK William JV | 2,482 | 2,366 | | CKP (Canada) JV | 2,356 | 2,325 | | ista JV | 3,791 | 3,467 | | UK Power Networks JV | 2,028 | 1,835 | | Northumbrian Water JV | 1,536 | 1,337 | | Dutch Enviro Energy JV | 397 | 342 | | Wales & West Utilities JV | 668 | 590 | | UK Rails JV | 340 | 314 | | **Total** | **13,598** | **12,576** | First-Half Profit (Infrastructure and Utility Assets Business) | Joint Venture | Australia (HKD Million) | Europe (HKD Million) | North America (HKD Million) | 2025 Total (HKD Million) | 2024 Total (HKD Million) | | :--- | :--- | :--- | :--- | :--- | :--- | | CK William JV | 589 | 159 | (6) | 742 | 720 | | CKP (Canada) JV | - | - | 694 | 694 | 708 | | ista JV | - | 1,027 | - | 1,027 | 894 | | UK Power Networks JV | - | 1,071 | - | 1,071 | 959 | | Northumbrian Water JV | - | 496 | - | 496 | 360 | | Dutch Enviro Energy JV | - | 64 | - | 64 | (54) | | Wales & West Utilities JV | - | 297 | - | 297 | 310 | | UK Rails JV | - | 167 | - | 167 | 177 | | Other | - | - | 18 | 18 | 24 | | **Total** | **589** | **3,281** | **706** | **4,576** | **4,098** | [Interests in Real Estate Investment Trusts](index=15&type=section&id=%E6%88%BF%E5%9C%B0%E7%94%A2%E6%8A%95%E8%B3%87%E4%BF%A1%E8%A8%97%E4%B9%8B%E6%AC%8A%E7%9B%8A) The Group holds interests in Hui Xian REIT, Fortune REIT, and Prosperity REIT; during the period, Hui Xian REIT turned profitable, contributing **HKD 77 million** in net profit to the Group, while investments in Fortune REIT and Prosperity REIT recorded a fair value increase of **HKD 475 million** Group's Interests in Listed Real Estate Investment Trusts (as of June 30, 2025) | Name | Principal Business | Interest | | :--- | :--- | :--- | | Hui Xian REIT | Investing in mainland hotels and serviced suites, offices, and retail properties | 35.4% | | Fortune REIT | Investing in Hong Kong and Singapore retail properties | 25.7% | | Prosperity REIT | Investing in Hong Kong office, retail, and industrial properties | 17.6% | - During the period, the Group's share of Hui Xian REIT's net profit was **HKD 77 million** (2024 - loss of **HKD 4 million**)[34](index=34&type=chunk) - The Group's investments in Fortune REIT and Prosperity REIT recorded a fair value increase of **HKD 475 million** (2024 - decrease of **HKD 634 million**)[34](index=34&type=chunk) Financial Overview [Liquidity and Financing](index=15&type=section&id=%E8%B3%87%E9%87%91%E6%B5%81%E5%8B%95%E6%80%A7%E5%8F%8A%E8%9E%8D%E8%B3%87) The Group's total bank and other borrowings increased to **HKD 54.4 billion**, with net debt at **HKD 21.4 billion** and a net debt to total capital ratio of approximately **5.0%**, maintaining robust liquidity with substantial cash and undrawn bank facilities - As of the interim balance sheet date, the Group's total bank and other borrowings were **HKD 54.4 billion**, an increase of **HKD 1.7 billion** compared to December 31, 2024[35](index=35&type=chunk) - Net debt as of the interim balance sheet date was **HKD 21.4 billion**, with a net debt to total capital ratio of approximately **5.0%**[35](index=35&type=chunk) - The Group maintains robust liquidity with substantial cash and undrawn bank facilities[35](index=35&type=chunk) [Financial Policy](index=16&type=section&id=%E7%90%86%E8%B2%A1%E6%94%BF%E7%AD%96) The Group adopts a prudent approach to managing foreign exchange and interest rate risks, utilizing hedging instruments and maintaining an appropriate mix of floating and fixed-rate borrowings, with borrowings primarily in HKD/USD and foreign currencies to match business needs - The Group adopts a prudent approach to managing foreign exchange risk and maintains an appropriate mix of floating and fixed-rate borrowings to mitigate interest rate risk[36](index=36&type=chunk) - The Group utilizes hedging instruments, including swap contracts and forward contracts, to mitigate foreign exchange and interest rate risks[36](index=36&type=chunk) - As of the interim balance sheet date, **32%** of the Group's borrowings were in HKD/USD, and **68%** were in foreign currencies (including AUD, GBP, and RMB)[36](index=36&type=chunk) - After accounting for effective swap contracts, approximately **54%** were floating-rate and **46%** were fixed-rate[36](index=36&type=chunk) [Asset Pledges](index=16&type=section&id=%E8%B3%87%E7%94%A2%E6%8A%B5%E6%8A%BC) As of the interim balance sheet date, properties totaling **HKD 7.43 billion** were pledged for bank borrowings related to property development and investment, and properties totaling **HKD 27.475 billion** were pledged for other borrowings related to the pub business - Properties totaling **HKD 7.43 billion** were pledged for bank borrowings related to property development and investment[37](index=37&type=chunk) - Properties totaling **HKD 27.475 billion** were pledged for other borrowings related to the pub business[37](index=37&type=chunk) [Contingent Liabilities](index=16&type=section&id=%E6%88%96%E6%9C%89%E8%B2%A0%E5%82%B5) The Group's contingent liabilities include guarantees of **HKD 427 million** for hotel project landowners' share of income and **HKD 1.395 billion** for property mortgage loans provided by banks to buyers of the Group's mainland development projects, with the latter significantly increasing from year-end - Guarantees for hotel project landowners' share of income amounted to **HKD 427 million**[38](index=38&type=chunk) - Guarantees for property mortgage loans provided by banks to buyers of the Group's mainland development projects amounted to **HKD 1.395 billion** (December 31, 2024 - **HKD 439 million**), a significant increase[38](index=38&type=chunk) Employees [Employees](index=17&type=section&id=%E5%83%B1%E5%93%A1) As of the interim balance sheet date, the Group employed approximately **55,000** staff, with related employee costs of approximately **HKD 6.878 billion** during the period, ensuring competitive compensation without an employee share option scheme - As of the interim balance sheet date, the Group employed approximately **55,000** staff[39](index=39&type=chunk) - Related employee costs (excluding directors' emoluments) during the period were approximately **HKD 6.878 billion**[39](index=39&type=chunk) - The Group ensures competitive employee compensation and does not have an employee share option scheme[39](index=39&type=chunk) Purchase, Sale or Redemption of Listed Securities [Purchase, Sale or Redemption of Listed Securities](index=17&type=section&id=%E8%B3%BC%E5%85%A5%E3%80%81%E5%87%BA%E5%94%AE%E6%88%96%E8%B4%A6%E5%9B%9E%E4%B8%8A%E5%B8%82%E8%AD%89%E5%88%B8) During the six months ended June 30, 2025, neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities, and no treasury shares were held as of that date - 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[40](index=40&type=chunk) - As of June 30, 2025, the Company and its subsidiaries did not hold any treasury shares in the Central Clearing and Settlement System or otherwise[40](index=40&type=chunk) Corporate Governance Code [Overview of Corporate Governance Code](index=17&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%AE%88%E5%89%87%E7%B8%BD%E8%A6%BD) The Company is committed to maintaining good corporate governance practices, complying with the HKEX Listing Rules' Corporate Governance Code, with the exception of the Chairman and Managing Director roles being held by the same individual, an arrangement deemed most appropriate for shareholders' overall interests - The Company has complied with all Corporate Governance Code provisions, except for the roles of Chairman and Managing Director being held by Mr. Victor T.K. Li concurrently[41](index=41&type=chunk)[42](index=42&type=chunk) - The Board believes the current arrangement is most appropriate for the overall interests of shareholders, emphasizing that all significant decisions are made after careful deliberation by Board members, relevant committee members, and key Group personnel[42](index=42&type=chunk) - The majority of Board members are independent non-executive directors, possessing the necessary expertise, knowledge, experience, and diverse perspectives[42](index=42&type=chunk) [Audit Committee](index=18&type=section&id=%E5%AF%A9%E6%A0%B8%E5%A7%94%E5%93%A1%E6%9C%83) The Audit Committee, comprising seven independent non-executive directors, is chaired by Mr. Cheung Ying Chow and has reviewed the Group's interim results for the six months ended June 30, 2025 - The Audit Committee consists of **7** members, all of whom are independent non-executive directors, chaired by Mr. Cheung Ying Chow[43](index=43&type=chunk) - The Group's interim results for the six months ended June 30, 2025, have been reviewed by the Audit Committee[44](index=44&type=chunk) [Remuneration Committee](index=18&type=section&id=%E8%96%AA%E9%85%AC%E5%A7%94%E5%93%A1%E6%9C%83) The Remuneration Committee, with a majority of independent non-executive directors, is chaired by Independent Non-executive Director Ms. Hung Siu-lin, with Mr. Victor T.K. Li also serving as a member - The Remuneration Committee's majority of members are independent non-executive directors, chaired by Independent Non-executive Director Ms. Hung Siu-lin[45](index=45&type=chunk) - Members include another independent non-executive director, Mr. Cheung Ying Chow, and the Chairman and Managing Director, Mr. Victor T.K. Li[45](index=45&type=chunk) [Nomination Committee](index=19&type=section&id=%E6%8F%90%E5%90%8D%E5%A7%94%E5%93%A1%E6%9C%83) The Nomination Committee, with a majority of independent non-executive directors, is chaired by Independent Non-executive Director Mr. Stephen Edward Clark, with Mr. Victor T.K. Li also serving as a member - The Nomination Committee's majority of members are independent non-executive directors, chaired by Independent Non-executive Director Mr. Stephen Edward Clark[46](index=46&type=chunk) - Members include two other independent non-executive directors, Mr. George C. Magnus and Dr. The Hon. Sir David K.P. Li, and the Chairman and Managing Director, Mr. Victor T.K. Li[46](index=46&type=chunk) [Sustainability Committee](index=19&type=section&id=%E5%8F%AF%E6%8C%81%E7%BA%8C%E7%99%BC%E5%B1%95%E5%A7%94%E5%93%A1%E6%9C%83) The Sustainability Committee comprises three directors (mostly independent non-executive directors) and the Company Secretary, chaired by Deputy Chairman Mr. Kam Hing Lam - The Sustainability Committee consists of **3** directors (mostly independent non-executive directors) and the Company Secretary[47](index=47&type=chunk) - The Committee is chaired by Deputy Chairman Mr. Kam Hing Lam[47](index=47&type=chunk) Announcement of 2025 Interim Dividend [Announcement of 2025 Interim Dividend](index=20&type=section&id=%E9%96%8B%E6%B4%BE%202025%20%E5%B9%B4%E5%BA%A6%E4%B8%AD%E6%9C%9F%E8%82%A1%E6%81%AF%E5%95%9F%E4%BA%8B) The Board of Directors declared an interim dividend of **HKD 0.39** per share for 2025, payable on September 25, 2025, to shareholders registered by the close of business on September 16, 2025 - The Board of Directors declared an interim dividend of **HKD 0.39** per share for 2025[49](index=49&type=chunk) - The interim dividend will be distributed on Thursday, September 25, 2025[49](index=49&type=chunk) - The record date for shareholders registered in the Company's register of members is the close of business on Tuesday, September 16, 2025[49](index=49&type=chunk) Financial Statements [Consolidated Income Statement](index=21&type=section&id=%E7%B6%9C%E5%90%88%E6%94%B6%E7%9B%8A%E8%A1%A8) For the six months ended June 30, 2025, the Group's total revenue (including share of joint ventures) increased to **HKD 39.126 billion**, but profit attributable to shareholders decreased by **26.2%** to **HKD 6.302 billion** due to increased operating costs and a fair value decrease in investment properties Consolidated Income Statement Summary (Six Months Ended June 30) | Indicator | 2025 (HKD Million) | 2024 (HKD Million) | | :--- | :--- | :--- | | Group revenue | 25,386 | 22,008 | | Share of joint ventures' revenue | 13,740 | 12,719 | | **Total Revenue** | **39,126** | **34,727** | | Operating costs | (20,932) | (17,155) | | Gains (losses) from financial instruments | 1,115 | (207) | | Increase (decrease) in fair value of investment properties | (542) | 1,420 | | Share of joint ventures' profit | 2,061 | 1,445 | | Share of associates' profit (loss) | 77 | (4) | | Profit before tax | 8,575 | 9,215 | | Tax | (2,017) | (608) | | Profit for the period | 6,558 | 8,607 | | Profit attributable to shareholders | 6,302 | 8,603 | | Earnings per share | HKD 1.80 | HKD 2.44 | | Interim dividend (per share) | HKD 0.39 | HKD 0.39 | [Consolidated Statement of Comprehensive Income](index=22&type=section&id=%E7%B6%9C%E5%90%88%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) For the six months ended June 30, 2025, the Group's total comprehensive income significantly increased to **HKD 11.623 billion** from **HKD 8.376 billion** in the prior year, primarily driven by exchange gains on translating financial statements of overseas operations, despite losses from derivative financial instruments Consolidated Statement of Comprehensive Income Summary (Six Months Ended June 30) | Indicator | 2025 (HKD Million) | 2024 (HKD Million) | | :--- | :--- | :--- | | Profit for the period | 6,558 | 8,607 | | Exchange gains (losses) on translating financial statements of overseas operations | 15,501 | (2,223) | | Exchange gains (losses) on translating bank borrowings for hedging | (756) | 180 | | Gains (losses) from derivative financial instruments | (9,209) | 1,955 | | Share of joint ventures' other comprehensive income | (313) | 93 | | Other comprehensive income not reclassifiable to profit or loss | 12 | (471) | | Other comprehensive income after tax | 5,065 | (231) | | **Total Comprehensive Income** | **11,623** | **8,376** | | Total comprehensive income attributable to shareholders | 11,293 | 8,372 | [Consolidated Statement of Financial Position](index=23&type=section&id=%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) As of June 30, 2025, the Group's total net assets increased to **HKD 406.834 billion**, with non-current assets growing due to increases in fixed assets, investment properties, and joint ventures, while net current assets slightly decreased, but total equity maintained robust growth Consolidated Statement of Financial Position Summary (as of June 30, 2025) | Indicator | June 30, 2025 (HKD Million) | December 31, 2024 (HKD Million) | | :--- | :--- | :--- | | **Non-current Assets** | | | | Fixed assets | 76,013 | 70,209 | | Investment properties | 152,857 | 150,708 | | Joint ventures | 88,349 | 78,998 | | Total non-current assets | 340,047 | 325,864 | | **Current Assets** | | | | Properties held for sale | 131,781 | 129,776 | | Bank balances and time deposits | 33,005 | 36,069 | | Total current assets | 175,549 | 175,917 | | **Current Liabilities** | | | | Bank and other borrowings | 10,966 | 11,139 | | Total current liabilities | 42,770 | 41,332 | | **Net Current Assets** | **132,779** | **134,585** | | **Non-current Liabilities** | | | | Bank and other borrowings | 43,385 | 41,577 | | Total non-current liabilities | 65,992 | 60,249 | | **Net Assets** | **406,834** | **400,200** | | **Shareholders' Equity** | **394,243** | **387,675** | Notes to the Financial Statements [Revenue by Principal Business Activities](index=24&type=section&id=%E5%90%84%E4%B8%BB%E8%A6%81%E6%A5%AD%E5%8B%99%E4%B9%8B%E6%94%B6%E5%85%A5) The Group's total revenue is segmented by principal business activities and geographical regions; property sales revenue significantly increased, while infrastructure and utility assets business remains the largest revenue contributor, with the UK contributing the most and mainland China showing substantial growth Revenue by Principal Business Activities (Six Months Ended June 30) | Business | 2025 Total (HKD Million) | 2024 Total (HKD Million) | | :--- | :--- | :--- | | Property Sales | 7,366 | 4,635 | | Property Leasing | 3,002 | 3,118 | | Hotel and Serviced Suite Business | 2,192 | 2,130 | | Property and Project Management | 444 | 445 | | Pub Business | 12,524 | 11,823 | | Infrastructure and Utility Assets Business | 13,598 | 12,576 | | **Total** | **39,126** | **34,727** | Revenue by Region (Six Months Ended June 30) | Region | 2025 Total (HKD Million) | 2024 Total (HKD Million) | | :--- | :--- | :--- | | Hong Kong | 7,217 | 7,016 | | Mainland China | 4,217 | 2,233 | | United Kingdom | 18,765 | 17,034 | | Other | 8,927 | 8,444 | | **Total** | **39,126** | **34,727** | [Contribution to Profit by Principal Business Activities after Allocation of Operating Costs](index=24&type=section&id=%E5%90%84%E4%B8%BB%E8%A6%81%E6%A5%AD%E5%8B%99%E7%B6%93%E5%88%86%E9%85%8D%E7%87%9F%E9%81%8B%E6%88%90%E6%9C%AC%E5%BE%8C%E4%B9%8B%E6%94%B6%E7%9B%8A%E8%B2%A2%E7%8D%BB) This section presents the profit contribution from each principal business activity after allocating operating costs, with total profit contribution increasing from **HKD 9.963 billion** to **HKD 10.264 billion**, where infrastructure and utility assets business is the largest contributor, while property sales profit decreased Contribution to Profit by Principal Business Activities after Allocation of Operating Costs (Six Months Ended June 30) | Business | 2025 Total (HKD Million) | 2024 Total (HKD Million) | | :--- | :--- | :--- | | Property Sales | 1,768 | 1,821 | | Property Leasing | 2,315 | 2,444 | | Hotel and Serviced Suite Business | 794 | 823 | | Property and Project Management | 182 | 180 | | Pub Business | 629 | 597 | | Infrastructure and Utility Assets Business | 4,576 | 4,098 | | **Total Profit Contribution** | **10,264** | **9,963** | | Financing costs for bank and other borrowings | (2,219) | (1,926) | | Gains from financial instruments | 726 | 439 | | Interests in Real Estate Investment Trusts | 184 | 109 | | Fair value changes of Real Estate Investment Trusts | 475 | (634) | | Fair value changes of investment properties (net of tax) | (520) | 1,645 | | Other | 600 | 533 | | Tax (Group and joint ventures) | (2,952) | (1,522) | | Non-controlling interests | (113) | 137 | | Perpetual capital securities | (143) | (141) | | **Profit attributable to shareholders** | **6,302** | **8,603** | [Items Deducted from Profit Before Tax](index=25&type=section&id=%E9%99%A4%E7%A8%85%E5%89%8D%E6%BA%A2%E5%88%A9%E5%B7%B2%E6%89%A3%E9%99%A4%E9%A0%85%E7%9B%AE) This section lists key cost items deducted from profit before tax, including interest and other financing costs for bank and other borrowings (net of capitalized amounts, **HKD 883 million**), as well as cost of properties sold and provision for properties held for sale Items Deducted from Profit Before Tax (Six Months Ended June 30) | Item | 2025 (HKD Million) | 2024 (HKD Million) | | :--- | :--- | :--- | | Interest and other financing costs (net) | 883 | 666 | | Lease liabilities | 117 | 104 | | Cost of properties sold | 3,779 | 2,362 | | Cost of pub products sold | 3,414 | 3,350 | | Provision for properties held for sale | 1,100 | - | [Taxation](index=25&type=section&id=%E7%A8%85%E9%A0%85) Total tax for the period was **HKD 2.017 billion**, comprising **HKD 431 million** in Hong Kong tax, **HKD 1.404 billion** in overseas tax, and **HKD 182 million** in deferred tax, representing a significant increase from the prior year Current Period Taxation (Six Months Ended June 30) | Item | 2025 (HKD Million) | 2024 (HKD Million) | | :--- | :--- | :--- | | Hong Kong | 431 | 254 | | Outside Hong Kong | 1,404 | 98 | | Deferred tax | 182 | 256 | | **Total** | **2,017** | **608** | [Earnings Per Share](index=25&type=section&id=%E6%AF%8F%E8%82%A1%E6%BA%A2%E5%88%A9) Earnings per share are calculated based on profit attributable to shareholders and the number of shares in issue during the period, which was **3,499,778,333** shares (2024 - weighted average of **3,529,123,152** shares) - Earnings per share are calculated based on profit attributable to shareholders and the **3,499,778,333** shares in issue during the period (2024 - weighted average of **3,529,123,152** shares)[57](index=57&type=chunk) [Trade and Other Receivables and Payables](index=25&type=section&id=%E6%87%89%E6%94%B6%E8%B3%87%E6%AC%BE%E5%8F%8A%E6%87%89%E4%BB%98%E8%B3%87%E6%AC%BE) This section provides an aging analysis of trade and other receivables and payables; as of June 30, 2025, total trade and other receivables amounted to **HKD 1.486 billion**, and total trade and other payables amounted to **HKD 4.122 billion** Aging Analysis of Trade and Other Receivables by Contract Terms (as of June 30, 2025) | Aging | June 30, 2025 (HKD Million) | December 31, 2024 (HKD Million) | | :--- | :--- | :--- | | Within 1 month | 1,183 | 1,803 | | 2 to 3 months | 73 | 101 | | Over 3 months | 230 | 210 | | **Total** | **1,486** | **2,114** | Aging Analysis of Trade and Other Payables by Invoice Date and Credit Terms (as of June 30, 2025) | Aging | June 30, 2025 (HKD Million) | December 31, 2024 (HKD Million) | | :--- | :--- | :--- | | Within 1 month | 4,058 | 3,658 | | 2 to 3 months | 30 | 30 | | Over 3 months | 34 | 27 | | **Total** | **4,122** | **3,715** | [Accounting Policies](index=25&type=section&id=%E6%9C%83%E8%A8%88%E6%94%BF%E7%AD%96) The significant accounting policies used in preparing these interim financial statements are consistent with those used for the financial statements for the year ended December 31, 2024, and the Group is currently assessing the impact of new and revised IFRS accounting standards not yet in effect - The significant accounting policies used in preparing these interim financial statements are consistent with those used for the financial statements for the year ended December 31, 2024[58](index=58&type=chunk) - The adoption of revised IFRS accounting standards effective for accounting periods beginning on or after January 1, 2025, has no significant impact on the Group's results and financial position[58](index=58&type=chunk) - The Group is currently assessing the impact of new and revised IFRS accounting standards not yet in effect on its results and financial position[58](index=58&type=chunk) [Audit Committee Review](index=25&type=section&id=%E5%AF%A9%E6%A0%B8%E5%A7%94%E5%93%A1%E6%9C%83%E5%AF%A9%E9%96%B1) These unaudited interim financial statements have been reviewed by the Audit Committee - These unaudited interim financial statements have been reviewed by the Audit Committee[58](index=58&type=chunk)

[Performance Summary](index=1&type=section&id=Performance%20Summary) The company achieved modest growth in turnover and recurring underlying profit for the six months ended June 30, 2025, while maintaining its interim dividend [Financial and Operational Highlights](index=1&type=section&id=Financial%20and%20Operational%20Highlights) For the six months ended June 30, 2025, the company reported modest year-on-year growth in turnover and recurring underlying profit, alongside improved office occupancy and a new capital recycling program Key Financial Indicators for H1 2025 | Metric | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Turnover (billion HKD) | 1.730 | 1.693 | +2.2% | | Recurring Underlying Profit (billion HKD) | 1.031 | 1.019 | +1.2% | | Reported Profit (billion HKD) | 0.075 | 0.427 | n/m | | Basic Earnings Per Share (HK cents) | 7 | 42 | n/m | | First Interim Dividend Per Share (HK cents) | 27 | 27 | ±0% | | Shareholders' Equity (Period-end, billion HKD) | 65.181 | 65.993 (2024 year-end) | -1.2% | | Net Asset Value Per Share (Period-end, HKD) | 63.5 | 64.3 (2024 year-end) | -1.2% | - Retail business turnover increased by **2.1% year-on-year**, driven by portfolio optimization and new luxury brand flagship stores[2](index=2&type=chunk) - Office business turnover grew by **0.8% year-on-year**, with occupancy rising from **90% to 92%**, easing rental pressure[2](index=2&type=chunk) - The company plans to launch an **HKD 8 billion capital recycling program** over the next five years, funded by asset disposals and residential project sales[2](index=2&type=chunk) [Chairman's Statement](index=3&type=section&id=Chairman's%20Statement) The Chairman's Statement highlights robust business performance in H1 2025, driven by the "Core and Pillars" strategy, Lee Garden area transformation, and diversified expansion, affirming confidence in Hong Kong's long-term prospects [Core and Pillars Strategy](index=3&type=section&id=Core%20and%20Pillars%20Strategy) The company's long-term growth is anchored by its "Core and Pillars" strategy, focusing on enhancing the Lee Garden area and diversifying value creation through heavy and light asset investments - The "Core" strategy aims to consolidate and expand the Lee Garden area, positioning it as a vibrant commercial and cultural hub[6](index=6&type=chunk) - The "Pillars" strategy combines heavy asset development with light asset investments, forming a diversified value-added model[6](index=6&type=chunk) [Lee Garden Area Optimization and Development](index=3&type=section&id=Lee%20Garden%20Area%20Optimization%20and%20Development) Lee Garden's optimization is yielding results with over ten luxury brand flagships completed, while the flagship Lee Garden Eight project and new pedestrian links are set to enhance the area by 2026 - Since 2024, over **ten newly renovated and expanded luxury brand flagship stores**, including Hermès, Dior, Cartier, and Chanel, have opened[7](index=7&type=chunk) - The flagship **Lee Garden Eight** project is expected to be completed in **2026**, increasing the Lee Garden area's total leasable area by nearly **30%**[8](index=8&type=chunk) - A new pedestrian link system, expected to be completed in **2026**, will connect the Lee Garden area to Causeway Bay MTR Station, enhancing community connectivity[9](index=9&type=chunk) [Strategic Pillars and Business Diversification](index=4&type=section&id=Strategic%20Pillars%20and%20Business%20Diversification) The company's strategic pillars drive business and geographical diversification, with successful tenant attraction at Lee Garden Shanghai, growth in Greater Bay Area co-working spaces, and healthcare investments, alongside retail upgrades at Hysan Place - The **Lee Garden Shanghai** project has successfully attracted prominent financial institutions and multinational corporations[10](index=10&type=chunk) - The joint venture with IWG in the Greater Bay Area's co-working space business continues to record **robust growth**[10](index=10&type=chunk) - **Hysan Place** has undergone upgrades, renovations, and repositioning to introduce new retail and dining concepts, catering to local youth and international visitors[11](index=11&type=chunk) [Market Outlook](index=5&type=section&id=Market%20Outlook) The company anticipates continued market uncertainty in 2025, maintaining cautious risk management while remaining confident in Hong Kong's long-term position and pursuing diversified growth strategies - The company remains confident in Hong Kong's long-term position as a **major global financial center** and a **key hub in the Greater Bay Area**[13](index=13&type=chunk) - The company will continue to maintain prudent financial and risk management, steadfastly advancing its "Core and Pillars" strategy to create sustainable long-term value for stakeholders[13](index=13&type=chunk) [Business Review and Outlook](index=6&type=section&id=Business%20Review%20and%20Outlook) In H1 2025, the Group achieved overall turnover and recurring underlying profit growth of 2.2% and 1.2% respectively, driven by solid performance across retail, office, and residential segments, alongside strategic project advancements and a new capital recycling program [Overall Performance Review](index=6&type=section&id=Overall%20Performance%20Review) In H1 2025, Group turnover increased by **2.2%** to **HKD 1.73 billion**, and recurring underlying profit grew by **1.2%** to **HKD 1.031 billion**, supported by core business strength and a maintained interim dividend Turnover by Business Segment (million HKD) | Business Segment | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | **Total Turnover** | **1,730** | **1,693** | **+2.2%** | | Retail | 862 | 844 | +2.1% | | Office | 750 | 744 | +0.8% | | Residential | 118 | 105 | +12.4% | - The Board declared a **first interim dividend of 27 HK cents per share**, consistent with the same period in 2024[17](index=17&type=chunk) [Retail Business](index=7&type=section&id=Retail%20Business) Retail business turnover increased by **2.1%** to **HKD 862 million**, driven by strong Hong Kong performance and mainland growth, with Hong Kong occupancy rising to **94%** and Shanghai Lee Garden to **64%**, supported by strategic marketing Retail Business Turnover (million HKD) | Region | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | **Total** | **862** | **844** | **+2.1%** | | Hong Kong | 851 | 844 | +0.8% | | Mainland China | 11 | - | n/m | - Hong Kong retail occupancy was **94%** as of June 30, 2025, up from **92%** at the end of 2024[20](index=20&type=chunk) - Mainland retail (Lee Garden Shanghai) occupancy significantly increased from **41%** at the end of 2024 to **64%** as of June 30, 2025[22](index=22&type=chunk) - Various marketing activities, including exclusive pop-up events with international stars like Korean artist Jisoo, effectively boosted mall traffic and sales during the period[23](index=23&type=chunk) [Office Business](index=9&type=section&id=Office%20Business) Office business turnover slightly increased by **0.8%** to **HKD 750 million**, with Hong Kong occupancy stable at **92%** despite a **2.4%** revenue decline, while mainland operations saw significant growth due to rising occupancy Office Business Turnover (million HKD) | Region | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | **Total** | **750** | **744** | **+0.8%** | | Hong Kong | 703 | 720 | -2.4% | | Mainland China | 47 | 24 | n/m | - Hong Kong office portfolio occupancy remained stable at **92%** as of June 30, 2025, up from **90%** at the end of 2024[27](index=27&type=chunk) - Mainland office portfolio occupancy increased to **68%** (end of 2024: **66%**), driving significant turnover growth[28](index=28&type=chunk) [Residential Business](index=10&type=section&id=Residential%20Business) Residential leasing turnover significantly increased by **12.4%** to **HKD 118 million**, driven by a recovering high-end market, despite a slight dip in occupancy to **70%**, with average rental rates trending upwards Residential Business Key Metrics | Metric | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Turnover (million HKD) | 118 | 105 | +12.4% | | Occupancy Rate (Period-end, %) | 70 | 73 (2024 year-end) | -3 p.p. | [Expansion of Core Business and Strategic Pillars](index=10&type=section&id=Expansion%20of%20Core%20Business%20and%20Strategic%20Pillars) The company is actively advancing expansion projects, including the **Lee Garden Eight** commercial development and residential projects, while diversifying through joint ventures in Shanghai, Greater Bay Area co-working spaces, and mainland healthcare - Commercial property development: The flagship **Lee Garden Eight** project is expected to be completed in **2026** and has received multiple accolades, including "Best Mixed-use Development (Hong Kong)"[30](index=30&type=chunk) - Residential development: The **"Forest Hills"** project in Tai Po has signed contracts for **140 units**; the To Kwa Wan URA residential project is expected to obtain its occupation permit in **Q2 2027**[32](index=32&type=chunk)[33](index=33&type=chunk) - Greater Bay Area co-working spaces: The joint venture with IWG signed **five new locations** in H1, now operating **40 centers** in the Greater Bay Area[36](index=36&type=chunk) - Healthcare: Investment in **New Frontier Health Corporation** provides exposure to the fast-growing mainland healthcare sector, with the group opening a new hospital in Ningbo during H1[38](index=38&type=chunk) [Capital Recycling Program](index=12&type=section&id=Capital%20Recycling%20Program) The company has launched an **HKD 8 billion, five-year capital recycling program** to optimize its capital structure, unlock asset value through non-core disposals, and redeploy capital into strategic focus areas for sustainable value enhancement - Launched a **five-year capital recycling program** totaling **HKD 8 billion**[40](index=40&type=chunk) - Program objectives include deleveraging to optimize capital structure, unlocking value from mature residential assets, and redeploying capital into strategic focus areas[40](index=40&type=chunk) [Financial Review](index=13&type=section&id=Financial%20Review) In H1 2025, the Group saw increased operating and finance expenses, a slight rise in investment property valuation despite a fair value loss of **HKD 964 million**, and a modest increase in total debt to **HKD 28.8 billion** with a **32.9%** gearing ratio, while maintaining a strong financial position and investment-grade credit ratings [Operating and Finance Expenses](index=13&type=section&id=Operating%20and%20Finance%20Expenses) Operating expenses increased by **5.7%** to **HKD 447 million**, representing **25.8%** of turnover, while finance expenses rose to **HKD 289 million** due to increased borrowings, despite a lower effective interest rate of **3.8%** Expense Overview (million HKD) | Item | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Operating Expenses | 447 | 423 | +5.7% | | Finance Expenses | 289 | 213 | +35.7% | [Asset Valuation and Investments](index=13&type=section&id=Asset%20Valuation%20and%20Investments) As of June 30, 2025, the investment property portfolio was valued at **HKD 96.893 billion**, a **0.4%** increase from year-end 2024, despite a fair value loss of **HKD 964 million**, while associate and joint venture contributions were **HKD 115 million** and a **HKD 7 million** loss, respectively - The investment property portfolio was valued at **HKD 96.893 billion** as of June 30, 2025, a **0.4%** increase from the end of 2024[43](index=43&type=chunk) - A fair value loss on investment properties of **HKD 964 million** was recorded during the period (H1 2024: loss of **HKD 197 million**), primarily reflecting increased market risks in the office business[43](index=43&type=chunk) [Treasury Policy](index=14&type=section&id=Treasury%20Policy) The Group maintains a robust capital structure with diversified financing, ending the period with total debt of **HKD 28.8 billion**, a **32.9%** gearing ratio, and a **7.5x** net interest cover, while retaining investment-grade credit ratings and managing interest rate risk with **56%** fixed-rate debt - As of June 30, 2025, the Group's total debt increased to **HKD 28.796 billion**, with bank loans and capital market debt each accounting for approximately **50%**[50](index=50&type=chunk) - The gearing ratio (net debt to equity) was **32.9%** at period-end, a slight increase from **31.4%** at the end of 2024[56](index=56&type=chunk) - Net interest cover was **7.5 times**, lower than **10.8 times** in the same period of 2024[56](index=56&type=chunk) - Moody's and Fitch credit ratings for the Group are **Baa2** and **BBB**, respectively[58](index=58&type=chunk) - The fixed-rate debt ratio (after interest rate swaps) was **56%** at period-end[61](index=61&type=chunk) [Condensed Consolidated Financial Statements](index=17&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section presents the Group's unaudited condensed consolidated financial statements for the six months ended June 30, 2025, including the statement of profit or loss, statement of comprehensive income, and statement of financial position, reflecting period-end operating results, financial position, and cash flow changes [Condensed Consolidated Statement of Profit or Loss](index=17&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) For the six months ended June 30, 2025, the Group reported turnover of **HKD 1.73 billion** (+**2.2%**), but pre-tax profit significantly declined to **HKD 252 million** due to a **HKD 964 million** fair value loss on investment properties, resulting in **HKD 75 million** profit attributable to owners and **7 HK cents** basic EPS Condensed Consolidated Statement of Profit or Loss Summary (million HKD) | Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Turnover | 1,730 | 1,693 | | Gross Profit | 1,426 | 1,407 | | Fair Value Change of Investment Properties | (964) | (197) | | Profit Before Tax | 252 | 875 | | Profit for the Period | 97 | 717 | | Profit Attributable to Owners of the Company | 75 | 427 | [Condensed Consolidated Statement of Financial Position](index=19&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's total assets were **HKD 115.454 billion**, with net assets of **HKD 76.816 billion**, primarily comprising **HKD 96.893 billion** in investment properties, while total borrowings stood at **HKD 28.641 billion**, and shareholders' equity decreased by **1.2%** to **HKD 65.181 billion** Condensed Consolidated Statement of Financial Position Summary (million HKD) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Investment Properties | 96,893 | 96,547 | | Total Assets | 115,454 | 114,089 | | **Liabilities and Equity** | | | | Borrowings (Current + Non-current) | 28,641 | 26,514 | | Net Assets | 76,816 | 77,429 | | Equity Attributable to Owners of the Company | 65,181 | 65,993 | [Notes to the Financial Statements](index=21&type=section&id=Notes%20to%20the%20Financial%20Statements) This section provides essential notes to the condensed consolidated financial statements, including independent review, basis of preparation, significant accounting policies, turnover breakdown, segment information, taxation, dividends, and receivables/payables, offering crucial context and supplementary data [Segment Information](index=23&type=section&id=Segment%20Information) The Group operates in four segments: Retail, Office, Residential, and Property Development, with the Retail segment contributing the highest revenue of **HKD 862 million** and segment profit of **HKD 723 million** in H1 2025 H1 2025 Segment Performance (million HKD) | Segment | Segment Revenue | Segment Gross Profit | Segment Profit | | :--- | :--- | :--- | :--- | | Retail | 862 | 723 | 723 | | Office | 750 | 620 | 620 | | Residential | 118 | 83 | 83 | | Property Development | - | - | 13 | | **Consolidated** | **1,730** | **1,426** | **1,439** | [Dividends](index=28&type=section&id=Dividends) The Board declared a first interim dividend of **27 HK cents per share** for the six months ended June 30, 2025, totaling approximately **HKD 277 million**, consistent with 2024, and not recognized as a liability in the current financial statements - The **2025 first interim dividend** of **27 HK cents per share** was declared, consistent with the same period in 2024[95](index=95&type=chunk) [Other Information](index=30&type=section&id=Other%20Information) This section covers corporate governance, securities transactions, human resources, and dividend arrangements, noting full compliance with governance codes, the repurchase and cancellation of **USD 690 million** in perpetual capital securities, and the interim dividend payment schedule [Repurchase, Sale or Redemption of Listed Securities](index=30&type=section&id=Repurchase%2C%20Sale%20or%20Redemption%20of%20Listed%20Securities) During the review period, the Group repurchased and cancelled **USD 690 million** in aggregate principal amount of subordinated guaranteed perpetual capital securities for approximately **HKD 5.365 billion**, representing about **81.2%** of the initial issuance - During the review period, the Group repurchased and cancelled subordinated guaranteed perpetual capital securities with an aggregate principal amount of **USD 690 million**[102](index=102&type=chunk) [Human Resources Policy](index=30&type=section&id=Human%20Resources%20Policy) The Group is committed to attracting, retaining, and developing talent, with **493 employees** as of June 30, 2025, aligning HR policies with corporate goals for shareholder value creation and sustainable growth - As of June 30, 2025, the Group's total number of employees was **493**[104](index=104&type=chunk) [Closure of Register of Members](index=31&type=section&id=Closure%20of%20Register%20of%20Members) To facilitate the first interim dividend payment, the company will close its register of members on **August 29, 2025**, with dividends payable on **September 9, 2025**, to shareholders registered on that date - The **first interim dividend** will be distributed on **September 9, 2025**[105](index=105&type=chunk) - The record date for dividend entitlement is **August 29, 2025**[105](index=105&type=chunk)

香港交易及結算所有限公司及香港聯合交易所有限公司對本公佈之內容概不負責，對其 準確性或完整性亦不發表任何聲明，並表明不會就因本公佈全部或任何部份內容而產生 或因倚賴該等內容而引致之任何損失承擔任何責任。 吉利汽車控股有限公司 GEELY AUTOMOBILE HOLDINGS LIMITED （於開曼群島註冊成立之有限公司） 股份代號：175（港幣櫃台）及 80175（人民幣櫃台） 截至二零二五年六月三十日止六個月的中期業績公佈 財務摘要 | | 截至六月三十日止六個月 | | | | --- | --- | --- | --- | | | 二零二五年 | 二零二四年 | 變動 | | | | （未經審核 | | | | （未經審核） | 及經重列） | % | | 收益（人民幣千元） | 150,284,734 | 118,792,689 | 27 | | 視為出售附屬公司之收益及分類為持作出售 | | | | | 的資產之減值虧損（人民幣千元） | – | 7,726,187 | (100) | | 歸屬本公司股權持有人溢利 | | | | | （人民幣千元） | 9,289,807 | 10,789,5 ...