[First Quarter Results](index=1&type=section&id=First%20Quarter%20Results) [Financial Summary](index=1&type=section&id=Financial%20Summary) Lenovo Group reported strong Q1 FY2025/26 results with **$18.83 billion revenue** (up 22% YoY) and **$505 million profit** (up 108% YoY), supported by R&D and non-PC growth | Metric | As of June 30, 2025 (Million USD) | As of June 30, 2024 (Million USD) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 18,830 | 15,447 | 22% | | Gross Profit | 2,774 | 2,560 | 8% | | Gross Margin | 14.7% | 16.6% | (1.9) percentage points | | Operating Profit | 785 | 494 | 59% | | Profit Before Tax | 622 | 313 | 99% | | Profit for the Period | 538 | 253 | 112% | | Profit Attributable to Equity Holders of the Company | 505 | 243 | 108% | | Basic EPS | 4.12 US Cents | 1.99 US Cents | 2.13 US Cents | | Diluted EPS | 3.65 US Cents | 1.92 US Cents | 1.73 US Cents | | Non-HKFRS Operating Profit | 631 | 572 | 10% | | Non-HKFRS Profit Attributable to Equity Holders of the Company | 389 | 320 | 22% | - R&D expenses increased by **10% year-over-year**, demonstrating the Group's long-term commitment to driving hybrid AI innovation[5](index=5&type=chunk) - Non-PC revenue increased to **47%** of the total revenue across the three business groups[5](index=5&type=chunk) [Business Review and Outlook](index=2&type=section&id=Business%20Review%20and%20Outlook) [Group Highlights](index=2&type=section&id=Group%20Highlights) Lenovo Group achieved record **$18.8 billion revenue** (up 22% YoY) and **108% profit growth** in Q1 FY2025/26, driven by double-digit growth across all business groups and strong AI server performance - The Group's revenue increased by **22% to $18.8 billion**, marking the highest-ever first-quarter revenue[6](index=6&type=chunk) - Profit attributable to equity holders, calculated under HKFRS, increased by **108% year-over-year to $505 million**[6](index=6&type=chunk) - The PC business achieved a new high with a **24.6% global PC market share**, solidifying its global leadership position[7](index=7&type=chunk) - AI server business revenue more than **doubled year-over-year**[7](index=7&type=chunk) - R&D investment increased by **10% year-over-year**, driving the development of hybrid AI strategy and enhancing the Group's AI capabilities across its product portfolio[8](index=8&type=chunk) [Performance by Business Group](index=2&type=section&id=Performance%20by%20Business%20Group) All three business groups, IDG, ISG, and SSG, achieved strong growth, driven by AI PC and server demand, alongside advanced services and AI solutions [Intelligent Devices Group (IDG)](index=2&type=section&id=Intelligent%20Devices%20Group%20(IDG)) IDG reported **18% revenue growth** and **15% profit growth**, driven by record **24.6% PC market share**, strong smartphone performance, and AI PC innovation | Metric | As of June 30, 2025 (Thousand USD) | As of June 30, 2024 (Thousand USD) | YoY Growth | | :--- | :--- | :--- | :--- | | Revenue | 13,459,338 | 11,421,635 | 18% | | Segment Profit | 950,430 | 828,377 | 15% | - Global PC market share reached a new high of **24.6%**, an increase of **1.7 percentage points** from the prior year period[9](index=9&type=chunk) - The smartphone business achieved **double-digit year-over-year revenue growth** for seven consecutive quarters, with Motorola maintaining its position as the global sales leader for foldable phones in Q2 2025 with a **74% market share**[10](index=10&type=chunk) - IDG is fully capitalizing on the rising trend of personal AI within the broader hybrid AI landscape, accelerating its transformation through strategic AI initiatives[11](index=11&type=chunk) [Infrastructure Solutions Group (ISG)](index=3&type=section&id=Infrastructure%20Solutions%20Group%20(ISG)) ISG revenue grew **36% YoY**, with AI server revenue more than doubling, despite an **$86 million operating loss** due to strategic investments in AI capabilities | Metric | As of June 30, 2025 (Thousand USD) | As of June 30, 2024 (Thousand USD) | YoY Growth | | :--- | :--- | :--- | :--- | | Revenue | 4,290,149 | 3,159,797 | 36% | | Segment Operating Profit/(Loss) | (85,520) | (37,274) | Loss Widened | - Revenue from the AI server business more than **doubled year-over-year**[12](index=12&type=chunk) - The segment operating result recorded an **operating loss of $86 million**, due to increased investments in expanding AI capabilities and accelerating the transformation of the enterprise infrastructure business[12](index=12&type=chunk) [Solutions and Services Group (SSG)](index=4&type=section&id=Solutions%20and%20Services%20Group%20(SSG)) SSG achieved record revenue with **20% YoY growth** and **26% segment profit growth**, reaching a **22% profit margin**, driven by advanced services and strong TruScale adoption | Metric | As of June 30, 2025 (Thousand USD) | As of June 30, 2024 (Thousand USD) | YoY Growth | | :--- | :--- | :--- | :--- | | Revenue | 2,257,718 | 1,885,338 | 20% | | Segment Profit | 500,772 | 396,102 | 26% | | Segment Profit Margin | 22% | 20.8% | 1.2 percentage points | - Managed services and project and solution services collectively increased their share of SSG's total revenue by **3 percentage points year-over-year to 58%**[14](index=14&type=chunk) - TruScale's order volume showed strong growth momentum, primarily driven by **double-digit year-over-year growth** in Device-as-a-Service and **triple-digit year-over-year growth** in Infrastructure-as-a-Service[14](index=14&type=chunk) - In the future, SSG's hybrid AI framework will stand out by offering full-stack AI solutions, simplifying AI applications, minimizing risks, and delivering higher returns on investment for customers[15](index=15&type=chunk) [Regional Performance](index=4&type=section&id=Regional%20Performance) Lenovo Group achieved balanced growth across all regions, with Asia Pacific (ex-China) revenue up **39%**, China up **36%**, Americas up **14%**, and EMEA up **9%**, driven by strong demand and AI | Region | As of June 30, 2025 (Thousand USD) | As of June 30, 2024 (Thousand USD) | YoY Growth | | :--- | :--- | :--- | :--- | | China | 4,675,698 | 3,443,196 | 36% | | Asia Pacific | 3,714,575 | 2,680,064 | 39% | | EMEA | 4,185,894 | 3,837,547 | 9% | | Americas | 6,253,702 | 5,486,249 | 14% | | **Total** | **18,829,869** | **15,447,056** | **22%** | - Revenue in Asia Pacific (excluding China) significantly increased by **39% year-over-year**, driven by opportunities such as the Windows 11 refresh cycle in Japan, increased commercial enterprise customers, and sustained strong growth in the Indian market[16](index=16&type=chunk) - The China market resumed **double-digit growth**, with revenue increasing by **36% year-over-year**, demonstrating strong performance across key business segments[17](index=17&type=chunk) - Americas revenue increased by **14% year-over-year**, benefiting from strong performance in both PC and smartphone businesses, with PC market share growing for the ninth consecutive quarter[17](index=17&type=chunk) [Outlook and Strategic Highlights](index=5&type=section&id=Outlook%20and%20Strategic%20Highlights) Lenovo Group is confident in its "3S to AI Twin" strategy, aiming for sustainable profitable growth by strengthening its hybrid AI framework and delivering hyper-personalized experiences via a "client-edge-cloud" architecture - The Group is confident in its "3S to AI Twin" strategy, which will drive sustainable profitable growth through precise execution, advancing its vision of achieving an AI Twin[19](index=19&type=chunk) - The Group will continue to strengthen the Lenovo Hybrid AI Advantage Framework, a key differentiator, focusing on developing horizontal building blocks and providing simple, scalable AI-driven solutions through digital workplace solutions, hybrid cloud, and sustainability initiatives[19](index=19&type=chunk) - By advancing the "one device, multiple screens" strategy, the Group aims to use devices as entry points for personal AI, building cross-device and cross-OS platforms based on a "client-edge-cloud" architecture to provide hyper-personalized user experiences[19](index=19&type=chunk) [Financial Review](index=6&type=section&id=Financial%20Review) [Results for the Three Months Ended June 30, 2025](index=6&type=section&id=Results%20for%20the%20Three%20Months%20Ended%20June%2030%2C%202025) The Group reported **$18.83 billion in sales**, with gross margin at **14.7%** (down 1.9 percentage points), and **$505 million profit** attributable to equity holders, while operating expenses decreased by **4%** due to fair value gains | Metric | As of June 30, 2025 (Million USD) | As of June 30, 2024 (Million USD) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 18,830 | 15,447 | 22% | | Gross Profit | 2,774 | 2,560 | 8% | | Gross Margin | 14.7% | 16.6% | (1.9) percentage points | | Operating Expenses | (1,989) | (2,066) | (4)% | | Operating Profit | 785 | 494 | 59% | | Profit for the Period | 538 | 253 | 112% | | Profit Attributable to Equity Holders of the Company | 505 | 243 | 108% | | Basic EPS | 4.12 US Cents | 1.99 US Cents | 2.13 US Cents | | Diluted EPS | 3.65 US Cents | 1.92 US Cents | 1.73 US Cents | - Operating expenses for the period decreased by **4%** year-over-year, primarily due to a **$157 million increase** in employee benefit costs, an **$81 million increase** in advertising and promotion expenses, and a **$152 million fair value gain** on derivative financial liabilities related to warrants[23](index=23&type=chunk) - Finance expenses for the period decreased by **7%** year-over-year, mainly due to lower interest on bank borrowings and overdrafts, notes interest, and factoring costs, partially offset by increased interest on convertible bonds[25](index=25&type=chunk) [Use of Non-HKFRS Measures](index=9&type=section&id=Use%20of%20Non-HKFRS%20Measures) Lenovo Group uses Non-HKFRS measures to assess financial performance by excluding non-recurring or non-cash items like fair value changes, amortization, and impairments, providing a clearer view of core operating results - Non-HKFRS adjusted profit is defined as profit for the period, adjusted by excluding (i) net fair value changes of financial assets measured at fair value through profit or loss; (ii) amortization of intangible assets arising from acquisitions; (iii) gains on deemed disposal of subsidiaries; (iv) impairment and write-off of intangible assets, property, plant and equipment, and construction in progress; (v) fair value changes of derivative financial liabilities related to warrants; and (vi) notional interest on convertible bonds, along with their corresponding income tax effects[27](index=27&type=chunk) - Management uses these Non-HKFRS financial measures to assess Lenovo's past and future financial performance, as the excluded items do not reflect ongoing operating results, thus providing a better understanding of the consolidated financial performance[28](index=28&type=chunk) Reconciliation of Non-HKFRS Financial Measures to HKFRS Financial Measures (For the Three Months Ended June 30, 2025): | Metric | Operating Profit (Thousand USD) | Profit Before Tax (Thousand USD) | Profit for the Period (Thousand USD) | Profit Attributable to Equity Holders of the Company (Thousand USD) | | :--- | :--- | :--- | :--- | :--- | | Reported | 784,809 | 622,104 | 537,550 | 505,333 | | Total Non-HKFRS Adjustments | (153,763) | (124,763) | (125,334) | (115,930) | | **Non-HKFRS** | **631,046** | **497,341** | **412,216** | **389,403** | [Capital Expenditures](index=11&type=section&id=Capital%20Expenditures) Capital expenditures for the three months ended June 30, 2025, significantly increased to **$468 million** (up from $305 million), primarily for property, plant, equipment, and intangible assets | Metric | As of June 30, 2025 (Million USD) | As of June 30, 2024 (Million USD) | YoY Change | | :--- | :--- | :--- | :--- | | Capital Expenditures | 468 | 305 | 53.4% | - Capital expenditures were primarily for the acquisition of property, plant and equipment, new construction in progress, and intangible assets[32](index=32&type=chunk) - The higher capital expenditures during the period were mainly due to increased investments in patents, technology, and buildings under construction[32](index=32&type=chunk) [Liquidity and Financial Resources](index=11&type=section&id=Liquidity%20and%20Financial%20Resources) As of June 30, 2025, total assets reached **$46.323 billion**, with equity holders' equity at **$6.807 billion**, a current ratio of **0.95**, and a net cash position of **$154 million** | Metric | As of June 30, 2025 (Million USD) | As of March 31, 2025 (Million USD) | Change | | :--- | :--- | :--- | :--- | | Total Assets | 46,323 | 44,231 | 2,092 | | Equity Attributable to Equity Holders of the Company | 6,807 | 6,069 | 738 | | Total Liabilities | 38,882 | 37,571 | 1,311 | | Current Ratio | 0.95 | 0.93 | 0.02 | | Bank Deposits, Cash and Cash Equivalents | 4,587 | 4,817 | (230) | | Net Cash / (Debt) | 154 | (551) | 705 | | Loan-to-Equity Ratio | 0.60 | 0.81 | (0.21) | - The Group continues to maintain high liquidity and ample credit facilities, preparing for future business development[34](index=34&type=chunk) Credit Facilities (As of June 30, 2025): | Category | Available Amount (Million USD) | Utilized Amount (Million USD) | | :--- | :--- | :--- | | Trade Credit Facilities | 6,149 | 4,209 | | Short-term Money Market Credit | 3,500 | 63 | | Forward Foreign Exchange Contracts | 13,550 | 12,698 | [Contingent Liabilities](index=12&type=section&id=Contingent%20Liabilities) Lenovo Group is involved in various claims and legal proceedings, which, while not expected to materially impact financial position, have unpredictable outcomes that could affect operating results or cash flows - The Group is involved in various other claims, litigations, investigations, and legal proceedings from time to time in its ordinary course of business[39](index=39&type=chunk) - While the Group does not expect the outcome of any such other legal proceedings (individually or in aggregate) to have a material adverse effect on its financial position or operating results, the outcomes of legal proceedings are unpredictable[39](index=39&type=chunk) [Financial Information](index=13&type=section&id=Financial%20Information) [Consolidated Statement of Profit or Loss](index=13&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss) This section presents the Consolidated Statement of Profit or Loss for the three months ended June 30, 2025, detailing revenue, costs, profits, finance income/expenses, and taxation, reflecting strong quarterly earnings growth | Metric | As of June 30, 2025 (Thousand USD) | As of June 30, 2024 (Thousand USD) | | :--- | :--- | :--- | | Revenue | 18,829,869 | 15,447,056 | | Cost of Sales | (16,055,392) | (12,887,207) | | Gross Profit | 2,774,477 | 2,559,849 | | Selling and Distribution Expenses | (955,293) | (835,611) | | Administrative Expenses | (677,121) | (650,457) | | R&D Expenses | (524,201) | (475,995) | | Other Operating Income / (Expenses) – Net | 166,947 | (103,317) | | Operating Profit | 784,809 | 494,469 | | Finance Income | 27,726 | 26,405 | | Finance Expenses | (186,563) | (200,377) | | Share of Loss of Associates and Joint Ventures | (3,868) | (7,502) | | Profit Before Tax | 622,104 | 312,995 | | Taxation | (84,554) | (59,500) | | Profit for the Period | 537,550 | 253,495 | | Profit Attributable to: Equity Holders of the Company | 505,333 | 243,365 | | Profit Attributable to: Other Non-Controlling Interests | 32,217 | 10,130 | | Basic EPS | 4.12 US Cents | 1.99 US Cents | | Diluted EPS | 3.65 US Cents | 1.92 US Cents | [Consolidated Statement of Financial Position](index=15&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) This section presents the Consolidated Statement of Financial Position, showing total assets increased from **$44.231 billion to $46.323 billion** and total equity from **$6.660 billion to $7.441 billion**, reflecting asset and equity growth | Metric | As of June 30, 2025 (Thousand USD) | As of March 31, 2025 (Thousand USD) | | :--- | :--- | :--- | | **Assets** | | | | Non-current Assets | 16,562,272 | 16,326,729 | | Current Assets | 29,760,938 | 27,904,083 | | **Total Assets** | **46,323,210** | **44,230,812** | | **Equity** | | | | Equity Attributable to Equity Holders of the Company | 6,806,994 | 6,068,987 | | Other Non-controlling Interests | 1,181,257 | 1,138,283 | | Put Option Granted to Non-controlling Interests | (547,353) | (547,353) | | **Total Equity** | **7,440,898** | **6,659,917** | | **Liabilities** | | | | Non-current Liabilities | 7,597,202 | 7,576,762 | | Current Liabilities | 31,285,110 | 29,994,133 | | **Total Liabilities** | **38,882,312** | **37,570,895** | | **Total Equity and Liabilities** | **46,323,210** | **44,230,812** | [Consolidated Statement of Cash Flows](index=17&type=section&id=Consolidated%20Statement%20of%20Cash%20Flows) This section presents the Consolidated Statement of Cash Flows, showing **$1.219 billion net cash inflow** from operations, **$421 million net outflow** from investing, and **$1.087 billion net outflow** from financing activities | Metric | As of June 30, 2025 (Thousand USD) | As of June 30, 2024 (Thousand USD) | | :--- | :--- | :--- | | Net Cash Generated from Operating Activities | 1,219,084 | 791,392 | | Net Cash Used in Investing Activities | (420,772) | (319,752) | | Net Cash Used in Financing Activities | (1,087,193) | (47,210) | | (Decrease) / Increase in Cash and Cash Equivalents | (288,881) | 424,430 | | Cash and Cash Equivalents at Beginning of Period | 4,728,124 | 3,559,831 | | Cash and Cash Equivalents at End of Period | 4,504,440 | 3,911,121 | [Consolidated Statement of Changes in Equity](index=18&type=section&id=Consolidated%20Statement%20of%20Changes%20in%20Equity) This section details the Consolidated Statement of Changes in Equity for the three months ended June 30, 2025, showing period-end balances and changes in share capital, various reserves, and non-controlling interests, including profit attribution and other comprehensive income | Equity Item | As of April 1, 2025 (Thousand USD) | Profit for the Period (Thousand USD) | Other Comprehensive Income/(Loss) (Thousand USD) | Total Comprehensive Income/(Loss) for the Period (Thousand USD) | Other Changes (Thousand USD) | As of June 30, 2025 (Thousand USD) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Share Capital | 3,500,987 | – | – | – | – | 3,500,987 | | Investment Revaluation Reserve | (79,741) | – | 1,640 | 1,640 | – | (78,101) | | Employee Share Fund | (141,352) | – | – | – | (97,306) | (140,481) | | Share-based Payment Reserve | (802,729) | – | – | – | (25,806) | (826,977) | | Hedging Reserve | (59,997) | – | (92,157) | (92,157) | – | (152,154) | | Exchange Fluctuation Reserve | (2,822,347) | – | 345,385 | 345,385 | – | (2,476,962) | | Other Reserves | 502,588 | – | – | – | 20,698 | 523,286 | | Retained Earnings | 5,971,578 | 505,333 | 1,183 | 506,516 | (20,698) | 6,457,396 | | Total Attributable to Equity Holders of the Company | **6,068,987** | **505,333** | **255,991** | **761,324** | **(123,112)** | **6,806,994** | | Other Non-controlling Interests | 1,138,283 | 32,217 | 12,043 | 44,260 | (1,286) | 1,181,257 | | Put Option Granted to Non-controlling Interests | (547,353) | – | – | – | – | (547,353) | | **Total** | **6,659,917** | **537,550** | **268,034** | **805,584** | **(124,398)** | **7,440,898** | [Notes](index=19&type=section&id=Notes) [General Information and Basis of Preparation](index=19&type=section&id=General%20Information%20and%20Basis%20of%20Preparation) This section confirms financial data is extracted from consolidated statements, prepared under HKEX Listing Rules and HKFRS, with consistent accounting policies and no retrospective adjustments from new standards - The above financial information and notes are extracted from the Group's consolidated financial statements, which are prepared in accordance with Appendix 16 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[47](index=47&type=chunk) - The Group's consolidated financial statements are the responsibility of the Board of Directors and are prepared in accordance with Hong Kong Financial Reporting Standards[47](index=47&type=chunk) - The accounting policies adopted are consistent with those of the previous fiscal year, and the Group was not required to change accounting policies or make retrospective adjustments due to the adoption of these revised standards[47](index=47&type=chunk) [Segment Information](index=19&type=section&id=Segment%20Information) This section details operating segments (IDG, ISG, SSG) based on LEC reports, providing revenue and profit/loss by segment and region, and disclosing goodwill and indefinite-lived trademarks - Management has determined the operating segments based on reports reviewed by the Chief Operating Decision Maker, the Lenovo Executive Committee ("LEC"), and used for making strategic decisions. The business segments include the Intelligent Devices Group, Infrastructure Solutions Group, and Solutions and Services Group[48](index=48&type=chunk) Revenue and Operating Profit/(Loss) by Reportable Segment (For the Three Months Ended June 30, 2025): | Segment | Revenue (Thousand USD) | Operating Profit/(Loss) (Thousand USD) | | :--- | :--- | :--- | | Intelligent Devices Group | 13,459,338 | 950,430 | | Infrastructure Solutions Group | 4,290,149 | (85,520) | | Solutions and Services Group | 2,257,718 | 500,772 | | **Total** | **20,007,205** | **1,365,682** | Regional Revenue Analysis (For the Three Months Ended June 30, 2025): | Region | Revenue (Thousand USD) | | :--- | :--- | | China | 4,675,698 | | Asia Pacific | 3,714,575 | | EMEA | 4,185,894 | | Americas | 6,253,702 | | **Total** | **18,829,869** | - The Directors assessed goodwill and trademarks and trade names with indefinite useful lives totaling **$6.227 billion** and determined there was no impairment as of June 30, 2025[50](index=50&type=chunk)[52](index=52&type=chunk) [Operating Profit](index=22&type=section&id=Operating%20Profit) This section details expenses and gains impacting operating profit, including depreciation, amortization, employee benefits, advertising, and fair value changes of financial assets and warrant-related derivative liabilities | Item | As of June 30, 2025 (Thousand USD) | As of June 30, 2024 (Thousand USD) | | :--- | :--- | :--- | | Depreciation of Property, Plant and Equipment | 119,978 | 107,323 | | Depreciation of Right-of-Use Assets | 31,233 | 28,922 | | Amortization of Intangible Assets | 194,359 | 210,112 | | Employee Benefit Costs | 1,565,173 | 1,411,029 | | Fair Value (Gain) / Loss on Financial Assets Measured at Fair Value Through Profit or Loss | (20,893) | 11,339 | | Fair Value Gain on Derivative Financial Liabilities Related to Warrants | (152,361) | - | [Finance Income and Expenses](index=22&type=section&id=Finance%20Income%20and%20Expenses) This section details finance income from bank deposits and money market funds, and finance expenses including interest on borrowings, convertible bonds, notes, lease liabilities, and factoring costs Finance Income (For the Three Months Ended June 30, 2025): | Item | Thousand USD | | :--- | :--- | | Bank Deposits | 23,363 | | Interest on Money Market Funds | 4,363 | | **Total** | **27,726** | Finance Expenses (For the Three Months Ended June 30, 2025): | Item | Thousand USD | | :--- | :--- | | Interest on Bank Borrowings and Overdrafts | 11,771 | | Interest on Convertible Bonds | 33,599 | | Interest on Notes | 30,045 | | Factoring Costs | 105,459 | | **Total** | **186,563** | - Finance expenses for the period decreased by **7%** year-over-year, primarily due to a **$5 million reduction** in interest on bank borrowings and overdrafts, a **$10 million reduction** in notes interest, and a **$25 million reduction** in factoring costs, partially offset by a **$24 million increase** in interest on convertible bonds[25](index=25&type=chunk) [Taxation](index=23&type=section&id=Taxation) This section details current and deferred taxation in the Consolidated Statement of Profit or Loss, with Hong Kong profits tax at **16.5%** and other regions taxed at applicable jurisdictional rates | Item | As of June 30, 2025 (Thousand USD) | As of June 30, 2024 (Thousand USD) | | :--- | :--- | :--- | | Current Tax: Hong Kong Profits Tax | (36,807) | 26,169 | | Current Tax: Taxation Outside Hong Kong | 165,680 | 108,303 | | Deferred Tax: Credit for the Period | (44,319) | (74,972) | | **Total** | **84,554** | **59,500** | - Hong Kong profits tax has been provided at **16.5%** on the estimated assessable profit for the period[55](index=55&type=chunk) - Taxation outside Hong Kong refers to income tax and non-refundable withholding tax of subsidiaries operating in mainland China and overseas, calculated at the applicable tax rates in each jurisdiction[55](index=55&type=chunk) [Earnings Per Share](index=23&type=section&id=Earnings%20Per%20Share) This section explains basic and diluted EPS calculations, with basic EPS based on profit attributable to equity holders and diluted EPS considering potential ordinary shares like incentive awards and convertible bonds Basic Earnings Per Share Calculation (For the Three Months Ended June 30, 2025): | Metric | Value | | :--- | :--- | | Profit Attributable to Equity Holders of the Company for Basic EPS Calculation (Thousand USD) | 505,333 | | Weighted Average Number of Ordinary Shares for Basic EPS Denominator | 12,265,154,456 | | **Basic Earnings Per Share** | **4.12 US Cents** | Diluted Earnings Per Share Calculation (For the Three Months Ended June 30, 2025): | Metric | Value | | :--- | :--- | | Profit Attributable to Equity Holders of the Company for Diluted EPS Calculation (Thousand USD) | 538,932 | | Weighted Average Number of Ordinary Shares for Diluted EPS Denominator | 14,746,010,930 | | **Diluted Earnings Per Share** | **3.65 US Cents** | - The Company has four classes of potential ordinary shares: long-term incentive awards, warrants, put options granted to non-controlling interests, and convertible bonds[59](index=59&type=chunk) [Inventories](index=24&type=section&id=Inventories) This section details inventory composition as of June 30, 2025, including raw materials, finished goods, and warranty parts, with total inventory increasing from **$7.924 billion to $8.743 billion** | Inventory Category | As of June 30, 2025 (Thousand USD) | As of March 31, 2025 (Thousand USD) | | :--- | :--- | :--- | | Raw Materials and Work-in-Progress | 4,562,568 | 3,995,173 | | Finished Goods | 3,583,492 | 3,320,441 | | Warranty Parts | 596,575 | 608,190 | | **Total** | **8,742,635** | **7,923,804** | [Trade and Lease Receivables and Bills, and Trade and Bills Payables](index=24&type=section&id=Trade%20and%20Lease%20Receivables%20and%20Bills%2C%20and%20Trade%20and%20Bills%20Payables) This section analyzes trade and lease receivables (net **$10.532 billion**) and trade and bills payables (total **$14.188 billion**), detailing customer credit terms, aging analysis, and loss allowance changes Trade and Lease Receivables and Bills (As of June 30, 2025): | Item | Thousand USD | | :--- | :--- | | Trade Receivables | 10,532,147 | | Lease Receivables | 229,368 | | Bills Receivable | 35,058 | | **Total** | **10,796,573** | Aging Analysis of Trade Receivables (As of June 30, 2025): | Aging | Thousand USD | | :--- | :--- | | 0 to 30 days | 7,512,165 | | 31 to 60 days | 1,767,144 | | 61 to 90 days | 517,144 | | Over 90 days | 915,937 | | **Total** | **10,712,390** | | Less: Loss Allowance | (180,243) | | **Trade Receivables – Net** | **10,532,147** | Trade and Bills Payables (As of June 30, 2025): | Item | Thousand USD | | :--- | :--- | | Trade Payables | 11,159,127 | | Bills Payable | 3,028,626 | | **Total** | **14,187,753** | [Deposits, Prepayments and Other Receivables](index=26&type=section&id=Deposits%2C%20Prepayments%20and%20Other%20Receivables) This section details deposits, prepayments, and other receivables, totaling **$5.228 billion**, with other receivables being the largest component, primarily from raw material deliveries to subcontractors | Item | As of June 30, 2025 (Thousand USD) | As of March 31, 2025 (Thousand USD) | | :--- | :--- | :--- | | Deposits | 30,231 | 26,779 | | Other Receivables | 3,703,031 | 2,874,521 | | Prepayments | 1,495,158 | 1,322,358 | | **Total** | **5,228,420** | **4,223,658** | - The majority of other receivables are amounts due from subcontractors for raw materials delivered in the ordinary course of business[66](index=66&type=chunk) [Provisions, Other Payables and Accrued Expenses](index=27&type=section&id=Provisions%2C%20Other%20Payables%20and%20Accrued%20Expenses) This section details provisions, other payables, and accrued expenses, with total other payables and accrued expenses at **$13.785 billion** and total provisions at **$871 million**, including warranty and restructuring costs Other Payables and Accrued Expenses (As of June 30, 2025): | Item | Thousand USD | | :--- | :--- | | Accrued Expenses | 3,834,721 | | Sales Adjustment Provisions | 2,480,407 | | Put Option Liabilities Granted | 313,408 | | Other Payables | 7,062,040 | | Lease Liabilities | 94,599 | | **Total** | **13,785,175** | - Sales adjustment provisions primarily relate to future volume discounts, price protection, rebates, and customer returns[69](index=69&type=chunk) Components of Provisions (As of June 30, 2025): | Provision Category | Thousand USD | | :--- | :--- | | Warranty Costs | 834,743 | | Environmental Remediation | 4,630 | | Restructuring | 31,495 | | **Total** | **870,868** | - The Group records expected warranty liabilities based on estimated costs at the time of sale, accounts for environmental remediation provisions based on estimated costs for recycling electrical and electronic waste from end customers, and restructuring provisions primarily include employee termination payments[71](index=71&type=chunk) [Other Non-Current Liabilities](index=29&type=section&id=Other%20Non-Current%20Liabilities) This section details other non-current liabilities totaling **$732 million**, including deferred consideration, lease liabilities, environmental remediation, and government grants related to R&D and asset construction | Item | As of June 30, 2025 (Thousand USD) | As of March 31, 2025 (Thousand USD) | | :--- | :--- | :--- | | Deferred Consideration | 25,072 | 25,072 | | Lease Liabilities | 295,672 | 269,828 | | Environmental Remediation Costs | 24,040 | 23,159 | | Government Grants and Subsidies Received in Advance | 109,204 | 98,350 | | Others | 278,182 | 301,375 | | **Total** | **732,170** | **717,784** | - Government grants and subsidies received in advance by certain Group companies and included in other non-current liabilities are primarily related to research and development projects and the construction of property, plant and equipment[73](index=73&type=chunk) [Borrowings](index=29&type=section&id=Borrowings) This section details current and non-current borrowings totaling **$4.433 billion**, including short-term loans, notes, and convertible bonds, with ample credit facilities and repayment concentrated within two to five years Composition of Borrowings (As of June 30, 2025): | Category | Thousand USD | | :--- | :--- | | Current Liabilities: Short-term Loans | 65,139 | | Non-current Liabilities: Notes | 2,050,878 | | Non-current Liabilities: Convertible Bonds | 2,316,892 | | **Total** | **4,432,909** | - As of June 30, 2025, the Group had available revolving and short-term loan credit facilities of **$6.35 billion**, with **$63 million** utilized[72](index=72&type=chunk) Outstanding Notes (As of June 30, 2025): | Note | Outstanding Principal (USD) | Annual Interest Rate | Maturity Date | | :--- | :--- | :--- | :--- | | 2030 Notes | 900,000,000 | 3.421% | November 2030 | | 2028 Notes | 600,000,000 | 5.831% | January 2028 | | 2032 Notes | 563,000,000 | 6.536% | July 2032 | Outstanding Convertible Bonds (As of June 30, 2025): | Bond | Outstanding Principal (USD) | Annual Interest Rate | Maturity Date | | :--- | :--- | :--- | :--- | | 2029 Convertible Bonds | 675,000,000 | 2.5% | August 2029 | | 2028 Convertible Bonds | 2,000,000,000 | 0% | January 2028 | Loan Repayment Schedule (As of June 30, 2025): | Term | Thousand USD | | :--- | :--- | | Within one year | 65,139 | | Two to five years | 2,913,753 | | Over five years | 1,454,017 | | **Total** | **4,432,909** | [Derivative Financial Liabilities](index=31&type=section&id=Derivative%20Financial%20Liabilities) This section details derivative financial liabilities totaling **$368 million**, including foreign exchange contracts and warrants, with warrants issued on January 8, 2025, for **$212 million** at fair value Derivative Financial Liabilities (As of June 30, 2025): | Category | Thousand USD | | :--- | :--- | | Current Liabilities: Foreign Exchange Forward and Option Contracts | 193,145 | | Current Liabilities: Warrants | 46,488 | | Non-current Liabilities: Warrants | 127,844 | | **Total** | **367,737** | - On January 8, 2025, a total of **1,150,000,000 warrants** were fully subscribed and issued, raising gross proceeds of **HK$1.645 billion (approximately $212 million)**[79](index=79&type=chunk) - Warrant holders are entitled to subscribe for shares of the Company at an initial subscription price of **HK$12.31 per share** (subject to adjustment) at any time before January 8, 2028 (extendable by three months)[79](index=79&type=chunk) [Share Capital](index=32&type=section&id=Share%20Capital) This section details issued and fully paid share capital as of June 30, 2025, with **12,404,659,302 ordinary shares** and **$3,500,987 thousand** in share capital, consistent with the prior period | Item | Number of Shares | Thousand USD | | :--- | :--- | :--- | | Issued and fully paid share capital: Ordinary shares with voting rights: Beginning / End of Period / Year | 12,404,659,302 | 3,500,987 | [Notes to the Consolidated Statement of Cash Flows](index=32&type=section&id=Notes%20to%20the%20Consolidated%20Statement%20of%20Cash%20Flows) This section provides notes to the Consolidated Statement of Cash Flows, including a reconciliation of profit before tax to net cash from operations and an analysis of financing liabilities and their changes Reconciliation of Profit Before Tax to Net Cash Generated from Operating Activities (For the Three Months Ended June 30, 2025): | Item | Thousand USD | | :--- | :--- | | Profit Before Tax | 622,104 | | Finance Expenses | 186,563 | | Depreciation of Property, Plant and Equipment | 119,978 | | Amortization of Intangible Assets | 194,359 | | Share-based Payments | 79,915 | | Fair Value Gain on Derivative Financial Liabilities Related to Warrants | (152,361) | | Increase in Inventories | (749,949) | | Increase in Trade and Lease Receivables and Bills, Deposits, Prepayments and Other Receivables | (1,049,599) | | Increase in Trade and Bills Payables, Provisions, Other Payables and Accrued Expenses | 2,292,092 | | **Net Cash Generated from Operating Activities** | **1,565,957** | Reconciliation of Financing Liabilities (As of June 30, 2025): | Financing Liability Category | Thousand USD | | :--- | :--- | | Short-term Loans - Current | 65,139 | | Notes - Non-current | 2,050,878 | | Convertible Bonds - Non-current | 2,316,892 | | Derivative Financial Liabilities Related to Warrants - Current | 46,488 | | Derivative Financial Liabilities Related to Warrants - Non-current | 127,844 | | Lease Liabilities - Current | 94,599 | | Lease Liabilities - Non-current | 295,672 | | **Total** | **4,997,512** | [Corporate Governance](index=34&type=section&id=Corporate%20Governance) [Purchase, Sale or Redemption of the Company's Listed Securities](index=34&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) For the three months ended June 30, 2025, the Company did not purchase, sell, or redeem any listed securities, except for **82,287,475 shares** acquired by trustees for employee incentive plans - Save for a total of **82,287,475 shares** acquired in the market by the trustees for the Company's long-term incentive scheme and employee share ownership plan for awarding employees upon vesting, neither the Company nor any of its subsidiaries purchased, sold or redeemed any of the Company's listed securities during the three months ended June 30, 2025[84](index=84&type=chunk) [Review by Audit Committee](index=34&type=section&id=Review%20by%20Audit%20Committee) The Audit Committee reviewed the Group's unaudited financial results for the three months ended June 30, 2025, regularly meeting with management and auditors to discuss accounting, internal controls, and financial reporting - The Company's Audit Committee has reviewed the Group's unaudited financial results for the three months ended June 30, 2025[85](index=85&type=chunk) - The Audit Committee regularly meets with management, external auditors, and internal audit personnel to discuss the accounting standards and practices adopted by the Group, as well as internal controls and financial reporting matters[85](index=85&type=chunk) - The Audit Committee currently comprises three independent non-executive directors and one non-executive director, including Mr. Wu Xianzhang (Chairman), Mr. Gordon Robert Halyburton Orr, Mr. Kasper Bo Roersted, and Mr. Wong Wai Ming[85](index=85&type=chunk) [Compliance with Corporate Governance Code](index=34&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) Lenovo Group complied with the Corporate Governance Code for Q1 FY2025/26, with the exception of the combined Chairman and CEO roles, which the Board deems beneficial and balanced by a Lead Independent Director - For the three months ended June 30, 2025, the Company complied with the Corporate Governance Code in Appendix C1 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, except that the roles of the Chairman of the Board ("Chairman") and Chief Executive Officer ("CEO") were not separated as required by Code Provision C.2.1 of the Corporate Governance Code[86](index=86&type=chunk) - The Board believes that Mr. Yang Yuanqing serving as both Chairman and CEO is appropriate and in the Group's best interest, as it maintains continuity in the Group's strategic execution and stability in business operations[86](index=86&type=chunk) - The Board also appointed Mr. John Lawson Thornton as the Lead Independent Director, granting him extensive powers and responsibilities to ensure effective checks and balances between the Company's Board and management[87](index=87&type=chunk)

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內 容 概 不 負 責，對 其 準 確 性 或 完 整 性 亦 不 發 表 任 何 聲 明，並 明 確 表 示，概 不對因本公告全部或任何部分內容而產生或因倚賴該等內容而引致的 任 何 損 失 承 擔 任 何 責 任。 截 至2025年6月30日止六個月之 中期業績公告 清科創業控股有限公司（「本公司」，連同其附屬公司及合併聯屬實體統稱「本 集 團」）董 事（「董 事」）會（「董事會」）欣 然 公 佈 本 集團截至2025年6月30日 止 六個月（「報告期」）之 未 經 審 核 簡 明 合 併 中 期 業 績，連 同 其 截 至2024年6月 30日止六個月之比較數字，有 關 業 績 已 由 本 公 司 審 核 委 員 會（「審核委員 會」）審 閱。 於 本 公 告 內，「我 們」、「我 們 的」及「清 科 創 業」指 本 公 司 及 倘 文 義 另 有 指 明， 則 指 本 集 團。 ZERO2IPO HOLDINGS INC. 清科創業控股有限公司* （於 開曼群島註冊成立之有限公司） （股份代號：1945） 財務摘要 截 至6月30日止六個月 | ...

[Financial Highlights](index=1&type=section&id=Financial%20Highlights) The company's financial performance for H1 2025 shows a decline in sales and profit, alongside stable gross margin - **Financial Highlights for the Six Months Ended June 30, 2025** | Metric | Value | | :--- | :--- | | Sales Revenue | **$45.9 million** (-25.8% YoY) | | Gross Profit | **$18.2 million** | | Gross Margin | **39.6%** | | Net Profit Attributable to Owners of the Company for the Period | **$4.0 million** | | Earnings Per Share | **0.16 US Cents** | [Interim Results](index=2&type=section&id=Interim%20Results) This section provides a comprehensive overview of the company's financial performance and position for H1 2025 [Interim Condensed Consolidated Statement of Profit or Loss](index=2&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) For H1 2025, sales revenue and net profit declined significantly due to weak market demand, despite an improved gross margin - **Key Profit or Loss Statement Data (For the Six Months Ended June 30)** | Item (Thousand USD) | 2025 | 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Sales Revenue | 45,934 | 61,915 | -25.8% | | Gross Profit | 18,175 | 19,843 | -8.4% | | Research and Development Costs | (9,943) | (7,999) | +24.3% | | Profit Before Tax | 4,104 | 7,557 | -45.7% | | Profit Attributable to Owners of the Company | 4,003 | 7,471 | -46.4% | | Basic Earnings Per Share (US Cents) | 0.16 | 0.30 | -46.7% | [Interim Condensed Consolidated Statement of Financial Position](index=4&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the company's financial position remained robust with increased total assets and net assets, supported by strong liquidity - **Key Financial Position Statement Data (Thousand USD)** | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Inventories | 23,861 | 13,357 | | Cash and Cash Equivalents | 112,513 | 104,242 | | Total Current Assets | 164,941 | 152,710 | | Total Assets | 176,492 | 163,706 | | **Liabilities and Equity** | | | | Accounts Payable and Other Payables | 30,930 | 22,974 | | Total Current Liabilities | 34,182 | 24,762 | | Net Assets | 141,123 | 137,041 | | Total Equity | 141,123 | 137,041 | [Summary of Notes to Financial Statements](index=5&type=section&id=中期簡明綜合財務資料附註) The notes detail the company's core IC chip business, revealing declining sales across all regions and product categories, with no interim dividend declared - The company operates as a fabless semiconductor group, specializing in the design, development, and sale of IC chips and system solutions for various smart product display and touch applications[6](index=6&type=chunk)[11](index=11&type=chunk) - **Sales Revenue by Geographical Market (Thousand USD)** | Region | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Hong Kong | 28,033 | 36,878 | | Europe | 7,243 | 11,891 | | Taiwan | 7,029 | 8,538 | | Others | 3,629 | 4,508 | - **Sales Revenue by Product Category (Thousand USD)** | Product Category | H1 2025 | H1 2024 | | :--- | :--- | :--- | | New Display ICs | 29,621 | 36,385 | | OLED Display ICs | 7,270 | 8,843 | | Mobile Display and Mobile Touch ICs | 5,879 | 9,826 | | Large Display ICs | 3,164 | 6,861 | - The Board resolved not to declare an interim dividend for the six months ended June 30, 2025[29](index=29&type=chunk) [Management Discussion and Analysis](index=12&type=section&id=Management%20Discussion%20and%20Analysis) This section reviews the company's operational performance, financial results, and strategic outlook [Business Review and Outlook](index=12&type=section&id=Business%20Review%20and%20Outlook) In H1 2025, sales revenue declined due to market pressures, but the company aims to drive future growth through strategic new product introductions - Influenced by macroeconomic conditions and industry competition, the company faced downward pricing pressure on end products, leading to decreased shipment volume and average selling prices[32](index=32&type=chunk) - Looking ahead to the second half, despite market uncertainties, the company plans to expand its market reach by launching new products, including seven-color e-paper label ICs, automotive display ICs, and portable e-book reader ICs, which are expected to drive shipment volume and profitability[41](index=41&type=chunk)[42](index=42&type=chunk) [New Display ICs](index=12&type=section&id=New%20Display%20ICs) The company adapts to electronic shelf label market shifts by developing advanced multi-color display ICs and expanding into new e-paper applications - The electronic shelf label market completed its transition from three-color to four-color displays, with a temporary suspension of US tariff policy stimulating early orders from retailers, boosting short-term demand, though market competition also led to lower average selling prices[33](index=33&type=chunk) - The company is developing IC products supporting seven-color (E5 3-bit) e-paper display label IC products, with samples planned for Q4 this year, and is committed to expanding color e-paper technology into new applications like digital photo frames and electronic badges[34](index=34&type=chunk) [OLED Display ICs](index=13&type=section&id=OLED%20Display%20ICs) As a leading PMOLED display driver IC manufacturer, the company expands its portfolio and pioneers mini/micro-LED solutions for high-value applications - The company is the world's largest PMOLED display driver IC manufacturer, and despite a decline in shipment volume and revenue for this business during the period, gross margin remained stable as the company continues to promote icon ICs for smart home appliances and new ICs supporting transparent displays[35](index=35&type=chunk) - In the mini/micro-LED segment, the company is a pioneer, having launched the world's first small-sized passive micro-LED display driver IC and actively expanding its application in high-value-added projects such as automotive devices[36](index=36&type=chunk) [Mobile Display and Mobile Touch ICs](index=13&type=section&id=Mobile%20Display%20and%20Mobile%20Touch%20ICs) This business line experienced significant declines in shipment and revenue due to delayed new product launches, but the company is developing new automotive display solutions - Affected by delayed new product launches, this business line experienced a significant decline in shipment volume and revenue, while demand for game controller ICs slowed due to market saturation[37](index=37&type=chunk) - The company is leveraging its TDDI technology to develop mini-LED backlight solutions, with standard ICs for automotive HUD (Head-Up Display) applications expected to be launched in H2 2025[38](index=38&type=chunk) [Large Display ICs](index=14&type=section&id=Large%20Display%20ICs) Facing intense competition in monitor and smart TV markets, the company accelerates product upgrades and expands its e-paper market presence with new display ICs - Due to intense competition in the monitor and smart TV markets, shipment volume and revenue for large display IC products experienced a significant decline, prompting the company to accelerate product upgrades and launch more high refresh rate, high-resolution premium products[39](index=39&type=chunk) - The company has a broad presence in the e-paper market, with ultra-large e-paper whiteboard and retail signage driver ICs scheduled for mass production in H2 2025, while also developing new driver ICs for portable black and white e-book readers to explore new niche markets[40](index=40&type=chunk) [Financial Review](index=16&type=section&id=Financial%20Review) Revenue decreased by **25.8%** in H1 2025, but gross margin improved to **39.6%**, and the company maintained a strong financial position with ample cash and liquidity - **Financial Performance Review** | Item | H1 2025 (Million USD) | H1 2024 (Million USD) | | :--- | :--- | :--- | | Revenue | **$45.9** | **$61.9** | | Gross Profit | **$18.2** | **$19.8** | | Gross Margin | **39.6%** | **32.0%** | | R&D Expenses | **$9.9** | **$8.0** | | Net Profit | **$4.0** | **$7.5** | - **Liquidity Ratios** | Item | June 30, 2025 (Million USD) | December 31, 2024 (Million USD) | | :--- | :--- | :--- | | Net Current Assets | **$130.8** | **$127.9** | | Current Ratio | **4.83** | **6.17** | | Total Cash and Deposits | **$116.0** | **$107.7** | - As of June 30, 2025, the company had **322** employees, with total staff costs and benefits increasing by **7.2%** year-over-year to **$11.9 million**, primarily due to an increase in R&D personnel[52](index=52&type=chunk) [Corporate Governance and Other Information](index=18&type=section&id=Corporate%20Governance%20and%20Other%20Information) This section details the company's adherence to corporate governance standards and provides additional disclosures [Compliance and Review](index=18&type=section&id=Compliance%20and%20Review) The company strictly adhered to corporate governance codes, with its unaudited interim financial information reviewed by the Audit Committee and independent auditor - The company has consistently complied with all applicable provisions of the Corporate Governance Code for the six months ended June 30, 2025[54](index=54&type=chunk) - During the reporting period, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities[56](index=56&type=chunk) - The unaudited condensed consolidated interim financial information has been reviewed by the company's independent auditor, Ernst & Young[57](index=57&type=chunk) [Definitions and Glossary](index=19&type=section&id=Definitions%20and%20Glossary) This section provides clear definitions for key professional terms and abbreviations used throughout the report - This section provides definitions for professional terms and abbreviations used in the report, such as IC (Integrated Circuit chips), OLED (Organic Light-Emitting Diode), and TDDI (Touch and Display Driver Integration)[59](index=59&type=chunk)

[Company Information and GEM Characteristics](index=1&type=section&id=%E5%85%AC%E5%8F%B8%E4%BF%A1%E6%81%AF%E4%B8%8EGEM%E7%89%B9%E8%89%B2) [Company Overview](index=1&type=section&id=%E5%85%AC%E5%8F%B8%E6%A6%82%E5%86%B5) K W Nelson Interior Design and Contracting Group Limited, a Cayman Islands-registered company (stock code 8411), released its interim results announcement for the six months ended 30 June 2025 - Company Name: **K W Nelson Interior Design and Contracting Group Limited**[1](index=1&type=chunk) - Place of Registration: **Cayman Islands**[1](index=1&type=chunk) - Stock Code: **8411**[1](index=1&type=chunk) - Reporting Period: **Six months ended 30 June 2025**[1](index=1&type=chunk) [GEM Market Features and Investment Risks](index=1&type=section&id=GEM%E5%B8%82%E5%9C%BA%E7%89%B9%E8%89%B2%E4%B8%8E%E6%8A%95%E8%B5%84%E9%A3%8E%E9%99%A9) The GEM market provides a listing platform for SMEs, but these companies typically carry higher investment risks, requiring investors to prudently assess potential market volatility and liquidity concerns - GEM Market Positioning: Provides a listing market for small and medium-sized companies, with **higher investment risks**[2](index=2&type=chunk) - Investment Risk Warning: Investors should understand potential risks and make investment decisions after careful consideration[2](index=2&type=chunk) - Market Volatility and Liquidity: GEM securities may be subject to **significant market volatility risks**, and high liquidity cannot be guaranteed[2](index=2&type=chunk) [Disclaimer of Announcement Responsibility](index=1&type=section&id=%E5%85%AC%E5%91%8A%E8%B4%A3%E4%BB%BB%E5%A3%B0%E6%98%8E) This announcement provides company information under GEM Listing Rules, with all directors jointly assuming full responsibility for its accuracy, completeness, non-misleading nature, and absence of fraud - Basis of Announcement: **GEM Listing Rules** of the Stock Exchange[3](index=3&type=chunk) - Directors' Responsibility: Jointly and severally assume full responsibility, confirming the announcement information is **accurate, complete, not misleading, and not fraudulent**[3](index=3&type=chunk) [Financial Highlights](index=2&type=section&id=%E8%B4%A2%E5%8A%A1%E6%91%98%E8%A6%81) [Key Financial Performance](index=2&type=section&id=%E5%85%B3%E9%94%AE%E8%B4%A2%E5%8A%A1%E8%A1%A8%E7%8E%B0) For the six months ended 30 June 2025, the Group's revenue grew 42.7% to HK$12.3 million, gross profit increased to HK$4.0 million, but loss attributable to owners expanded to HK$2.3 million, with no interim dividend recommended Key Financial Data for the Six Months Ended 30 June 2025 | Indicator | 30 June 2025 (HK$'000) | 30 June 2024 (HK$'000) | Year-on-year Change | Primary Driving Factors | | :--- | :--- | :--- | :--- | :--- | | Revenue | 12,300 | 8,600 | +42.7% | Increased revenue from office property and medical center projects | | Gross Profit | 4,000 | 2,300 | +73.9% | | | Loss attributable to owners of the Company | (2,300) | (2,000) | +15.0% | | | Interim Dividend | Not recommended | Nil | | | [Unaudited Condensed Consolidated Interim Financial Results](index=3&type=section&id=%E6%9C%AA%E7%BB%8F%E5%AE%A1%E6%A0%B8%E7%BB%BC%E5%90%88%E4%B8%AD%E6%9C%9F%E8%B4%A2%E5%8A%A1%E4%B8%9A%E7%BB%A9) [Condensed Consolidated Interim Statement of Profit or Loss](index=3&type=section&id=%E4%B8%AD%E6%9C%9F%E7%AE%80%E6%98%8E%E7%BB%BC%E5%90%88%E6%8D%9F%E7%9B%8A%E8%A1%A8) Revenue significantly increased by 42.7% to HK$12,264 thousand, and gross profit rose to HK$4,017 thousand, but increased expenses and impairment provisions led to an operating loss of HK$2,160 thousand and a loss attributable to owners of HK$2,268 thousand, with basic loss per share at HK0.24 cents Condensed Consolidated Interim Statement of Profit or Loss (For the six months ended 30 June) | Indicator | 2025 (HK$'000) | 2024 (HK$'000) | Change (HK$'000) | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Revenue | 12,264 | 8,594 | 3,670 | +42.7% | | Cost of sales | (8,247) | (6,300) | (1,947) | +30.9% | | Gross Profit | 4,017 | 2,294 | 1,723 | +75.1% | | Other income | 818 | 924 | (106) | -11.5% | | Selling and distribution expenses | (817) | (454) | (363) | +79.9% | | Administrative expenses | (5,902) | (5,045) | (857) | +17.0% | | Impairment (provision)/reversal for trade receivables and contract assets | (276) | 315 | (591) | -187.6% | | Operating loss | (2,160) | (1,966) | (194) | +9.9% | | Finance costs | (23) | (13) | (10) | +76.9% | | Loss before income tax | (2,183) | (1,979) | (204) | +10.3% | | Income tax expense | (85) | – | (85) | N/A | | Loss for the period attributable to owners of the Company | (2,268) | (1,979) | (289) | +14.6% | | Basic and diluted loss per share (HK cents) | (0.24) | (0.21) | (0.03) | +14.3% | [Condensed Consolidated Interim Statement of Comprehensive Income](index=4&type=section&id=%E4%B8%AD%E6%9C%9F%E7%AE%80%E6%98%8E%E7%BB%BC%E5%90%88%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) Total comprehensive loss attributable to owners expanded to HK$2,182 thousand, up from HK$2,029 thousand in the prior period, primarily due to increased loss for the period and exchange differences Condensed Consolidated Interim Statement of Comprehensive Income (For the six months ended 30 June) | Indicator | 2025 (HK$'000) | 2024 (HK$'000) | Change (HK$'000) | | :--- | :--- | :--- | :--- | | Loss for the period | (2,268) | (1,979) | (289) | | Exchange differences arising on translation of foreign operations | 86 | (15) | 101 | | Fair value change of financial assets at fair value through other comprehensive income | – | (35) | 35 | | Other comprehensive income/(loss) for the period, net of tax | 86 | (50) | 136 | | Total comprehensive loss for the period attributable to owners of the Company | (2,182) | (2,029) | (153) | [Condensed Consolidated Interim Statement of Financial Position](index=5&type=section&id=%E4%B8%AD%E6%9C%9F%E7%AE%80%E6%98%8E%E7%BB%BC%E5%90%88%E8%B4%A2%E5%8A%A1%E7%8A%B6%E5%86%B5%E8%A1%A8) As of 30 June 2025, total assets slightly increased to HK$66,409 thousand, with non-current assets decreasing and cash and cash equivalents significantly rising to HK$46,139 thousand, while total liabilities notably grew to HK$6,792 thousand, mainly due to contract liabilities Condensed Consolidated Interim Statement of Financial Position (As at 30 June 2025) | Indicator | 30 June 2025 (HK$'000) | 31 December 2024 (HK$'000) | Change (HK$'000) | | :--- | :--- | :--- | :--- | | **Assets** | | | | | Non-current assets | 2,041 | 2,709 | (668) | | Current assets | 64,368 | 63,406 | 962 | | - Cash and cash equivalents | 46,139 | 9,040 | 37,099 | | - Fixed deposits with original maturity of more than three months | 7,803 | 41,694 | (33,891) | | Total assets | 66,409 | 66,115 | 294 | | **Equity** | | | | | Total equity | 59,617 | 61,799 | (2,182) | | **Liabilities** | | | | | Non-current liabilities | 925 | 1,042 | (117) | | Current liabilities | 5,867 | 3,274 | 2,593 | | - Contract liabilities | 3,422 | – | 3,422 | | Total liabilities | 6,792 | 4,316 | 2,476 | [Condensed Consolidated Interim Statement of Changes in Equity](index=6&type=section&id=%E4%B8%AD%E6%9C%9F%E7%AE%80%E6%98%8E%E7%BB%BC%E5%90%88%E6%9D%83%E7%9B%8A%E5%8F%98%E5%8A%A8%E8%A1%A8) As of 30 June 2025, equity attributable to owners decreased from HK$61,799 thousand at year-start to HK$59,617 thousand, primarily due to a HK$2,268 thousand loss for the period, partially offset by HK$86 thousand in exchange differences from foreign operations Condensed Consolidated Interim Statement of Changes in Equity (For the six months ended 30 June) | Indicator | 30 June 2025 (HK$'000) | 1 January 2025 (HK$'000) | Change (HK$'000) | | :--- | :--- | :--- | :--- | | Share capital | 10,000 | 10,000 | – | | Share premium | 33,728 | 33,728 | – | | Exchange reserve | (223) | (309) | 86 | | Fair value reserve | – | – | – | | Shares held for share award scheme | (8,824) | (8,824) | – | | Merger reserve | (380) | (380) | – | | Contribution reserve | 5,000 | 5,000 | – | | Retained profits | 20,316 | 22,584 | (2,268) | | Total equity | 59,617 | 61,799 | (2,182) | [Condensed Consolidated Interim Statement of Cash Flows](index=7&type=section&id=%E4%B8%AD%E6%9C%9F%E7%AE%80%E6%98%8E%E7%BB%BC%E5%90%88%E7%8E%B0%E9%87%91%E6%B5%81%E9%87%8F%E8%A1%A8) Net cash from operating activities turned to an inflow of HK$2,769 thousand, while net cash from investing activities significantly increased to HK$34,484 thousand due to reduced fixed deposits, resulting in a substantial increase in period-end cash and cash equivalents to HK$46,139 thousand Condensed Consolidated Interim Statement of Cash Flows (For the six months ended 30 June) | Indicator | 2025 (HK$'000) | 2024 (HK$'000) | Change (HK$'000) | | :--- | :--- | :--- | :--- | | Net cash from/(used in) operating activities | 2,769 | (3,766) | 6,535 | | Net cash from investing activities | 34,484 | 24 | 34,460 | | Net cash used in financing activities | (240) | (321) | 81 | | Net increase/(decrease) in cash and cash equivalents | 37,013 | (4,063) | 41,076 | | Cash and cash equivalents at 1 January | 9,040 | 19,062 | (10,022) | | Effect of exchange rate changes | 86 | (15) | 101 | | Cash and cash equivalents at 30 June | 46,139 | 14,984 | 31,155 | [Notes to the Unaudited Interim Financial Results](index=8&type=section&id=%E6%9C%AA%E7%BB%8F%E5%AE%A1%E6%A0%B8%E4%B8%AD%E6%9C%9F%E8%B4%A2%E5%8A%A1%E4%B8%9A%E7%BB%A9%E9%99%84%E6%B3%A8) [General Information](index=8&type=section&id=%E4%B8%80%E8%88%AC%E8%B5%84%E6%96%99) K W Nelson Interior Design and Contracting Group Limited, registered in the Cayman Islands, primarily engages in interior design, project management, and interior fitting-out works, with its principal place of business in Hong Kong - Place of Registration: **Cayman Islands**[13](index=13&type=chunk) - Principal Business: Provision of **interior design, project management services, and interior fitting-out works**[13](index=13&type=chunk) - Principal Place of Business: **Hong Kong**[13](index=13&type=chunk) [Basis of Preparation](index=8&type=section&id=%E7%BC%96%E5%88%B6%E5%9F%BA%E5%87%86) The interim financial results are prepared in accordance with GEM Listing Rules and HKAS 34 "Interim Financial Reporting" issued by the HKICPA, using historical cost convention, and have been reviewed by the review committee - Basis of Preparation: **GEM Listing Rules** and **HKAS 34 "Interim Financial Reporting"** issued by the HKICPA[15](index=15&type=chunk) - Measurement Basis: **Historical cost**[17](index=17&type=chunk) - Review Status: Unaudited, but **reviewed by the review committee**[16](index=16&type=chunk) [Changes in Accounting Policies](index=9&type=section&id=%E4%BC%9A%E8%AE%A1%E6%94%BF%E7%AD%96%E5%8F%98%E5%8A%A8) Revisions to Hong Kong Financial Reporting Standards effective for the first time in this accounting period had no significant impact on the Group's results or financial position, and no new standards or interpretations not yet effective have been applied - No significant impact from changes in accounting policies during the period[18](index=18&type=chunk) - No new standards or interpretations not yet effective have been applied[18](index=18&type=chunk) [Revenue and Segment Reporting](index=9&type=section&id=%E6%94%B6%E7%9B%8A%E5%8F%8A%E5%88%86%E9%83%A8%E6%8A%A5%E5%91%8A) The Group has a single reportable operating segment, providing interior design, project management services, and interior fitting-out works, with all external customer revenue and most non-current assets derived from Hong Kong - Single Operating Segment: Provision of **interior design, project management services, and interior fitting-out works**[19](index=19&type=chunk) External Customer Revenue by Geographical Location (For the six months ended 30 June) | Region | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | | Hong Kong | 12,264 | 8,594 | Non-current Assets by Geographical Location (As at 30 June 2025) | Region | 30 June 2025 (HK$'000) | 31 December 2024 (HK$'000) | | :--- | :--- | :--- | | Hong Kong | 2,037 | 2,705 | | China and Macau | 4 | 4 | | Total | 2,041 | 2,709 | [Other Income](index=10&type=section&id=%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5) Other income for the period primarily consisted of interest income of HK$818 thousand, which decreased compared to the prior period Other Income (For the six months ended 30 June) | Item | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | | Interest income | 818 | 921 | | Others | – | 3 | | Total | 818 | 924 | [Expenses by Nature](index=10&type=section&id=%E6%8C%89%E6%80%A7%E8%B4%A8%E5%88%92%E5%88%86%E7%9A%84%E5%BC%80%E6%94%AF) Total cost of sales, selling and distribution expenses, and administrative expenses increased to HK$14,966 thousand, mainly due to higher material and subcontracting costs, employee benefit costs, legal and professional fees, and depreciation Total Expenses by Nature (For the six months ended 30 June) | Item | 2025 (HK$'000) | 2024 (HK$'000) | Change (HK$'000) | | :--- | :--- | :--- | :--- | | Material and subcontracting costs | 7,635 | 5,635 | 2,000 | | Depreciation of property, plant and equipment | 670 | 490 | 180 | | Depreciation of right-of-use assets | 223 | 302 | (79) | | Employee benefit costs | 3,989 | 3,484 | 505 | | Legal and professional fees | 1,143 | 1,034 | 109 | | Travel expenses | 251 | 119 | 132 | | Others | 864 | 529 | 335 | | Total | 14,966 | 11,799 | 3,167 | [Finance Costs](index=11&type=section&id=%E8%B4%A2%E5%8A%A1%E6%88%90%E6%9C%AC) Finance costs for the period primarily comprised interest expense on lease liabilities of HK$23 thousand, which increased compared to the prior period Finance Costs (For the six months ended 30 June) | Item | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | | Interest expense on lease liabilities | 23 | 13 | [Income Tax Expense](index=11&type=section&id=%E6%89%80%E5%BE%97%E7%A8%8E%E5%BC%80%E6%94%AF) Income tax expense for the period was HK$85 thousand, mainly due to under-provision for Hong Kong profits tax in prior years, while no enterprise income tax was provided for the Chinese subsidiary due to losses Income Tax Expense Analysis (For the six months ended 30 June) | Item | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | | Hong Kong profits tax — Under-provision in prior years | 85 | – | - No enterprise income tax was provided for the Chinese subsidiary due to losses[25](index=25&type=chunk) [Loss Per Share](index=12&type=section&id=%E6%AF%8F%E8%82%A1%E4%BA%8F%E6%8D%9F) Basic loss per share for the period was HK0.24 cents, an increase from HK0.21 cents in the prior period, with diluted loss per share equaling basic loss per share due to the absence of potential dilutive ordinary shares Loss Per Share (For the six months ended 30 June) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Loss for the period attributable to owners of the Company (HK$'000) | (2,268) | (1,979) | | Weighted average number of ordinary shares in issue (thousands) | 950,400 | 950,677 | | Basic Loss Per Share (HK cents) | (0.24) | (0.21) | - Diluted loss per share equals basic loss per share due to the absence of potential dilutive ordinary shares[29](index=29&type=chunk) [Dividends](index=12&type=section&id=%E8%82%A1%E6%81%AF) The Board of Directors does not recommend the payment of an interim dividend for the period - No interim dividend recommended for the period (2024: nil)[30](index=30&type=chunk) [Property, Plant and Equipment](index=12&type=section&id=%E7%89%A9%E6%A5%AD%E3%80%81%E5%8E%82%E6%88%BF%E5%8F%8A%E8%AE%BE%E5%A4%87) As of 30 June 2025, the carrying amount of property, plant and equipment decreased to HK$1,230 thousand, with additions of HK$225 thousand and depreciation of HK$670 thousand during the period Changes in Property, Plant and Equipment (For the six months ended 30 June) | Item | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | | At 1 January | 1,675 | 2,533 | | Additions | 225 | 13 | | Depreciation | (670) | (490) | | At 30 June | 1,230 | 2,056 | [Right-of-Use Assets](index=13&type=section&id=%E4%BD%BF%E7%94%A8%E6%AC%8A%E8%B3%87%E7%94%A2) The Group made no additions to right-of-use assets for the six months ended 30 June 2025 - No additions to right-of-use assets during the period (2024: **HK$452 thousand**)[32](index=32&type=chunk) [Trade and Other Receivables](index=13&type=section&id=%E8%B2%BF%E6%98%93%E5%8F%8A%E5%85%B6%E4%BB%96%E6%87%89%E6%94%B6%E6%AC%BE%E9%A0%85) As of 30 June 2025, the current portion of trade and other receivables decreased to HK$7,466 thousand from HK$8,001 thousand at the end of 2024, with a reduction in impairment provision for trade receivables but an increase in the aging proportion over 90 days Trade and Other Receivables (As at 30 June 2025) | Item | 30 June 2025 (HK$'000) | 31 December 2024 (HK$'000) | | :--- | :--- | :--- | | Trade receivables | 5,716 | 6,714 | | Less: Provision for impairment losses | (334) | (887) | | Prepayments | 1,588 | 1,327 | | Deposits and other receivables | 602 | 953 | | Total current portion | 7,466 | 8,001 | Aging Analysis of Trade Receivables (As at 30 June 2025) | Aging | 30 June 2025 (HK$'000) | 31 December 2024 (HK$'000) | | :--- | :--- | :--- | | Within 30 days | 1,924 | 2,451 | | 31 to 60 days | 80 | 3,218 | | 61 to 90 days | 377 | – | | Over 90 days | 3,001 | 158 | | Total | 5,382 | 5,827 | [Provisions, Trade and Other Payables](index=14&type=section&id=%E6%92%A5%E5%82%99%E3%80%81%E8%B2%BF%E6%98%93%E5%8F%8A%E5%85%B6%E4%BB%96%E6%87%89%E4%BB%98%E6%AC%BE%E9%A0%85) As of 30 June 2025, total trade and other payables decreased to HK$2,073 thousand from HK$2,834 thousand at the end of 2024, while total provisions slightly increased to HK$580 thousand, mainly for reinstatement costs and long service payment provisions Provisions, Trade and Other Payables (As at 30 June 2025) | Item | 30 June 2025 (HK$'000) | 31 December 2024 (HK$'000) | | :--- | :--- | :--- | | **Provisions** | | | | Provision for reinstatement costs | 449 | 449 | | Provision for long service payments | 131 | 99 | | Total provisions | 580 | 548 | | **Trade and Other Payables** | | | | Trade payables | 2,054 | 1,950 | | Other payables and accrued expenses | 19 | 884 | | Total trade and other payables | 2,073 | 2,834 | Aging Analysis of Trade Payables (As at 30 June 2025) | Aging | 30 June 2025 (HK$'000) | 31 December 2024 (HK$'000) | | :--- | :--- | :--- | | 1 to 30 days | 410 | 196 | | 31 to 90 days | 777 | 389 | | Over 90 days | 867 | 1,365 | | Total | 2,054 | 1,950 | [Notes to the Condensed Consolidated Interim Statement of Cash Flows](index=15&type=section&id=%E4%B8%AD%E6%9C%9F%E7%AE%80%E6%98%8E%E7%BB%BC%E5%90%88%E7%8E%B0%E9%87%91%E6%B5%81%E9%87%8F%E8%A1%A8%E9%99%84%E6%B3%A8) Cash generated from operating activities for the period was HK$2,854 thousand, a shift from an outflow in the prior period, primarily driven by a decrease in contract assets and an increase in contract liabilities, offsetting the impact of loss before income tax Adjustments for Cash Generated From/(Used In) Operating Activities (For the six months ended 30 June) | Item | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | | Loss before income tax | (2,183) | (1,979) | | Depreciation of property, plant and equipment | 670 | 490 | | Depreciation of right-of-use assets | 223 | 302 | | Interest income | (818) | (921) | | Impairment loss provision/(reversal) for trade receivables and contract assets | 276 | (315) | | Operating loss before working capital changes | (1,777) | (2,415) | | Changes in trade and other receivables | 259 | (120) | | Changes in contract assets | 1,711 | 59 | | Changes in trade and other payables | (761) | (1,202) | | Changes in contract liabilities | 3,422 | (88) | | Cash generated from/(used in) operating activities | 2,854 | (3,766) | [Significant Related Party Transactions](index=16&type=section&id=%E9%87%8D%E5%A4%A7%E9%97%9C%E8%81%AF%E6%96%B9%E4%BA%A4%E6%98%93) The Group engaged in related party transactions with Further Concept Limited, a company controlled by Mr. Lau King Wai (controlling shareholder) and his spouse Ms. Chan Pui Shan, primarily involving lease liabilities and interest expenses, with increased remuneration for key management personnel and the controlling shareholder's spouse - Related parties include: **Mr. Lau King Wai** (Director and controlling shareholder), **Ms. Chan Pui Shan** (Personal Assistant to CEO and spouse of controlling shareholder), and **Further Concept Limited** (controlled by the controlling shareholder)[36](index=36&type=chunk) Amounts Due to a Related Company and Related Interest Expenses (For the six months ended 30 June) | Item | 30 June 2025 (HK$'000) | 31 December 2024 (HK$'000) | 2025 Interest Expense (HK$'000) | 2024 Interest Expense (HK$'000) | | :--- | :--- | :--- | :--- | :--- | | Lease liabilities due to a related company — Further Concept Limited | 554 | 665 | 16 | 5 | Key Management Personnel Remuneration (For the six months ended 30 June) | Item | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | | Emoluments, salaries and other benefits | 2,073 | 1,719 | | Contributions to defined contribution retirement plans | 19 | 19 | | Total | 2,092 | 1,738 | Remuneration of Spouse of Controlling Shareholder (For the six months ended 30 June) | Item | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | | Salaries and other benefits | 428 | 321 | | Contributions to defined contribution retirement plans | 9 | 9 | | Total | 437 | 330 | [Management Discussion and Analysis](index=18&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%82%E8%AE%A8%E8%AE%BA%E5%8F%8A%E5%88%86%E6%9E%90) [Business Review](index=18&type=section&id=%E4%B8%9A%E5%8A%A1%E5%9B%9E%E9%A1%B5) The Group, a Hong Kong interior fitting-out company, focuses on commercial premises, providing interior design, project management, and fitting-out works, with revenue growing 42.7% to HK$12.3 million and gross profit to HK$4.0 million, primarily driven by office property and medical center projects, despite an expanded loss attributable to owners of HK$2.3 million - Core business: **Interior design, project management services, and interior fitting-out works**, focusing on commercial premises (offices, retail shops) in Hong Kong[42](index=42&type=chunk) - Project types: Design and fitting-out projects, fitting-out projects, and other interior design and fitting-out services[42](index=42&type=chunk) Summary of Business Performance for the Period | Indicator | 30 June 2025 (HK$ million) | 30 June 2024 (HK$ million) | Year-on-year Growth | | :--- | :--- | :--- | :--- | | Revenue | 12.3 | 8.6 | 42.7% | | Gross Profit | 4.0 | 2.3 | 73.9% | | Loss attributable to owners of the Company | 2.3 | 2.0 | 15.0% | [Outlook](index=18&type=section&id=%E5%B1%95%E6%9C%9B) The Group is optimistic about the interior design and fitting-out market, particularly in commercial premises and medical centers, and will continue to strengthen core competencies, invest in large projects, and explore new business opportunities to deliver long-term shareholder returns - Market recovery: Anticipated rebound in demand for office property renovation, having passed the most challenging period[44](index=44&type=chunk) - Growth areas: Optimistic about commercial premises and medical center markets due to increased awareness of health issues and an aging population in Hong Kong[44](index=44&type=chunk) - Strategic focus: Consolidate core competencies, enhance capabilities, prioritize quality, strengthen adaptability to market trends, undertake more large-scale projects, and explore new business opportunities[44](index=44&type=chunk) [Financial Review](index=19&type=section&id=%E8%B4%A2%E5%8A%A1%E5%9B%9E%E9%A1%B5) [Revenue](index=19&type=section&id=%E6%94%B6%E7%9B%8A) Revenue for the period increased to HK$12.3 million, primarily from design and fitting-out projects, especially medical center projects, which contributed 71.0% of total revenue Revenue and Number of Projects by Project Type and Geographical Location (For the six months ended 30 June) | Project Type and Location | 2025 Number of Projects | 2025 Revenue (HK$'000) | 2025 Revenue Share (%) | 2024 Number of Projects | 2024 Revenue (HK$'000) | 2024 Revenue Share (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Design and Fitting-out** | | | | | | | | Hong Kong | 3 | 8,703 | 71.0 | 6 | 7,242 | 84.3 | | **Others** | | | | | | | | Hong Kong | | 3,469 | 29.0 | | 1,352 | 15.7 | | **Total** | 3 | 12,264 | 100.0 | 6 | 8,594 | 100.0 | - Revenue from design and fitting-out projects increased by **HK$1.5 million** to **HK$8.7 million**, primarily driven by medical center projects (an increase of **HK$1.4 million**)[45](index=45&type=chunk) [Cost of Sales and Gross Margin](index=20&type=section&id=%E9%94%80%E5%94%AE%E6%88%90%E6%9C%AC%E5%8F%8A%E6%AF%9B%E5%88%A9%E7%8E%87) The Group's overall gross margin increased from 26.7% in the prior period to 32.8% in the current period, mainly due to higher gross margins from other projects, such as office property renovation and maintenance works - Cost of sales primarily includes subcontracting costs, direct staff costs, material procurement costs, and insurance costs[46](index=46&type=chunk) Gross Margin by Project Type (For the six months ended 30 June) | Project Type | 2025 Gross Margin (%) | 2024 Gross Margin (%) | | :--- | :--- | :--- | | Design and Fitting-out | 22.1 | 28.0 | | Others | 58.8 | 19.7 | | **Overall** | **32.8** | **26.7** | - Overall gross margin increased mainly due to higher gross margins from other projects, such as office property renovation and maintenance works[47](index=47&type=chunk) [Selling and Distribution Expenses](index=20&type=section&id=%E9%94%80%E5%94%AE%E5%8F%8A%E5%88%86%E9%94%80%E5%BC%80%E6%94%AF) Selling and distribution expenses increased to HK$0.8 million, primarily due to a HK$0.2 million increase in staff costs to explore business opportunities - Selling and distribution expenses increased from **HK$0.4 million** to **HK$0.8 million**[48](index=48&type=chunk) - Primary driver: Increase in staff costs by **HK$0.2 million** to explore business opportunities[48](index=48&type=chunk) [Administrative Expenses](index=20&type=section&id=%E8%A1%8C%E6%94%BF%E5%BC%80%E6%94%AF) Administrative expenses increased to HK$5.9 million, primarily due to an approximate HK$0.7 million increase in staff costs and directors' emoluments - Administrative expenses increased from **HK$5.0 million** to **HK$5.9 million**[49](index=49&type=chunk) - Primary driver: Increase in staff costs and directors' emoluments by approximately **HK$0.7 million**[49](index=49&type=chunk) [Income Tax Expense](index=20&type=section&id=%E6%89%80%E5%BE%97%E7%A8%8E%E5%BC%80%E6%94%AF) Income tax expense of HK$85 thousand was recognized for the period, mainly due to under-provision for tax expenses in prior years - Income tax expense of **HK$85 thousand** recognized for the period (prior period: nil)[50](index=50&type=chunk) - Reason: Under-provision for tax expenses in prior years[50](index=50&type=chunk) [Loss for the Period](index=20&type=section&id=%E6%9C%9F%E5%86%85%E4%BA%8F%E6%8D%9F) The Group's loss for the period expanded to HK$2.3 million - Loss for the period expanded to **HK$2.3 million** (prior period: HK$2.0 million)[51](index=51&type=chunk) [Dividends](index=20&type=section&id=%E8%82%A1%E6%81%AF) The Board of Directors does not recommend the payment of any dividends for the period - No dividend recommended for the period (prior period: nil)[52](index=52&type=chunk) [Impairment Loss Provision for Trade Receivables and Contract Assets](index=21&type=section&id=%E8%AE%A1%E6%8F%90%E8%B4%B8%E6%98%93%E5%BA%94%E6%94%B6%E6%AC%BE%E9%A1%B9%E5%8F%8A%E5%90%88%E7%B4%84%E8%B3%87%E7%94%A2%E4%BA%8F%E6%8D%9F%E6%8B%A8%E5%A4%87) Impairment loss provision for trade receivables and contract assets for the period was approximately HK$0.3 million, a decrease from HK$0.9 million at the end of 2024, with no amounts related to customers with known financial difficulties - Impairment loss provision for the period approximately **HK$0.3 million** (31 December 2024: HK$0.9 million)[53](index=53&type=chunk) - No amounts are related to customers with known financial difficulties or significant doubts about recoverability[53](index=53&type=chunk) [Liquidity, Financial Resources, Gearing Ratio and Capital Structure](index=21&type=section&id=%E6%B5%81%E5%8B%95%E8%B3%87%E9%87%91%E3%80%81%E8%B2%A1%E5%8B%99%E8%B3%87%E6%BA%90%E3%80%81%E8%B3%87%E7%94%A2%E8%B2%A0%E5%82%B5%E6%AF%94%E7%8E%87%E5%8F%8A%E8%B3%87%E6%9C%AC%E7%B5%90%E6%A7%8B) The Group funds its operations through internal resources, with net current assets of approximately HK$58.5 million and cash and cash equivalents significantly increasing to HK$46.1 million; the current ratio decreased to 11.0 times mainly due to increased lease liabilities, with no outstanding borrowings and no significant changes to the capital structure - Working capital source: **Internal resources**[54](index=54&type=chunk) Key Liquidity and Capital Structure Indicators (As at 30 June) | Indicator | 30 June 2025 (HK$ million) | 31 December 2024 (HK$ million) | Change | | :--- | :--- | :--- | :--- | | Net current assets | 58.5 | 60.1 | (1.6) | | Cash and cash equivalents | 46.1 | 9.0 | +37.1 | | Unutilised banking facilities | 2.0 | 2.0 | – | | Current ratio | 11.0 times | 19.4 times | Decrease | | Outstanding borrowings | Nil | Nil | – | | Equity attributable to owners of the Company | 59.6 | 61.8 | (2.2) | - Current ratio decreased mainly due to an increase in lease liabilities[54](index=54&type=chunk) - Capital structure has not changed significantly since the listing date, with share capital comprising only ordinary shares[54](index=54&type=chunk) [Pledge of Assets](index=21&type=section&id=%E8%B3%87%E7%94%A2%E6%8A%B5%E6%8A%BC) As of 30 June 2025, the Group pledged bank deposits of HK$2.0 million to secure banking facilities, with no other assets pledged - Pledged bank deposits: **HK$2.0 million** (31 December 2024: HK$2.0 million) to secure banking facilities[55](index=55&type=chunk) - No other assets pledged[55](index=55&type=chunk) [Foreign Exchange Risk and Treasury Policy](index=21&type=section&id=%E5%A4%96%E5%8C%AF%E9%A2%A8%E9%99%A9%E5%8F%8A%E5%BA%AB%E5%8B%99%E6%94%BF%E7%AD%96) The Group's business is primarily conducted in Hong Kong, with transactions and monetary assets/liabilities denominated in HKD, resulting in no significant impact from exchange rate fluctuations during the period, and no derivative instruments were used for hedging; the company adopts prudent financial management to maintain sound liquidity and continuously assesses customer credit risk - Foreign exchange risk: Business primarily conducted in Hong Kong, with transactions and monetary assets/liabilities denominated in HKD, no significant impact from exchange rate fluctuations during the period[56](index=56&type=chunk) - Treasury policy: Adopts prudent financial management measures, maintains a sound liquidity position, and reduces credit risk exposure through credit assessments[56](index=56&type=chunk) - No derivative instruments entered into to hedge foreign exchange risk[56](index=56&type=chunk) [Capital Commitments](index=22&type=section&id=%E8%B3%87%E6%9C%AC%E6%89%BF%E6%93%94) As of 30 June 2025, the Group had no significant capital commitments - No significant capital commitments (31 December 2024: nil)[57](index=57&type=chunk) [Human Resources Management](index=22&type=section&id=%E4%BA%BA%E5%8A%9B%E8%B3%87%E6%BA%90%E7%AE%A1%E7%90%86) As of 30 June 2025, the Group had 13 employees and attracts and retains talent through regular reviews of remuneration packages, discretionary bonuses, and a share award scheme - Number of employees: **13** (31 December 2024: 13)[58](index=58&type=chunk) - Remuneration policy: Regular review of remuneration packages, discretionary bonuses, and a share award scheme to attract and retain talent[58](index=58&type=chunk) [Material Investments, Material Acquisitions and Disposals of Subsidiaries and Affiliated Companies, and Future Plans for Material Investments or Additions to Capital Assets](index=22&type=section&id=%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B3%87%E3%80%81%E9%87%8D%E5%A4%A7%E6%94%B6%E8%B3%BC%E5%8F%8A%E5%87%BA%E5%94%AE%E9%99%84%E5%B1%AC%E5%85%AC%E5%8F%B8%E5%8F%8A%E8%81%AF%E5%B1%AC%E5%85%AC%E5%8F%B8%E4%BB%A5%E5%8F%8A%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B3%87%E6%88%96%E6%B7%BB%E7%BD%AE%E8%B3%87%E6%9C%AC%E8%B3%87%E7%94%A2%E7%9A%84%E6%9C%AA%E4%BE%86%E8%A8%88%E5%8A%83) During the period, the Group had no material investments, acquisitions, or disposals of subsidiaries and affiliated companies, nor any future plans for material investments or additions to capital assets - No material investments, acquisitions, or disposals of subsidiaries and affiliated companies during the period[59](index=59&type=chunk) - No future plans for material investments or additions to capital assets[59](index=59&type=chunk) [Contingent Liabilities](index=22&type=section&id=%E6%88%96%E7%84%B6%E8%B2%A0%E5%82%B5) As of 30 June 2025, the Group had no significant contingent liabilities - No significant contingent liabilities (31 December 2024: nil)[60](index=60&type=chunk) [Other Information](index=23&type=section&id=%E5%85%B6%E4%BB%96%E8%B3%87%E6%96%99) [Directors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares and Debentures of the Company and its Associated Corporations](index=23&type=section&id=%E8%91%A3%E4%BA%8B%E5%8F%8A%E6%9C%80%E9%AB%98%E8%A1%8C%E6%94%BF%E4%BA%BA%E5%93%A1%E6%96%BC%E6%9C%AC%E5%85%AC%E5%8F%B8%E5%8F%8A%E5%85%B6%E7%9B%B8%E8%81%AF%E6%B3%95%E5%9C%98%E4%B9%8B%E8%82%A1%E4%BB%BD%E3%80%81%E7%9B%B8%E9%97%9C%E8%82%A1%E4%BB%BD%E5%8F%8A%E5%82%B5%E6%AC%8A%E8%AD%89%E4%B8%AD%E4%B9%8B%E6%AC%8A%E7%9B%8A%E5%8F%8A%E6%B7%A1%E5%80%89) As of 30 June 2025, Chairman and CEO Mr. Lau King Wai held 75% of the Company's shares through his controlled corporation, Sino Emperor Group Limited, with no other directors or chief executives holding disclosable interests or short positions Directors' Interests in Shares of the Company (As at 30 June) | Name | Capacity/Nature of Interest | Number of Shares | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Mr. Lau King Wai | Interest in controlled corporation | 750,000,000 | 75% | - Mr. Lau King Wai beneficially owns the entire issued share capital of Sino Emperor Group Limited and is deemed to be interested in all shares held by Sino Emperor[62](index=62&type=chunk) [Substantial Shareholders' and Other Persons' Interests and Short Positions in Shares and Underlying Shares of the Company](index=24&type=section&id=%E4%B8%BB%E8%A6%81%E8%82%A1%E6%9D%B1%E5%8F%8A%E5%85%B6%E4%BB%96%E4%BA%BA%E5%A3%AB%E6%96%BC%E6%9C%AC%E5%85%AC%E5%8F%B8%E8%82%A1%E4%BB%BD%E5%8F%8A%E7%9B%B8%E9%97%9C%E8%82%A1%E4%BB%BD%E4%B9%8B%E6%AC%8A%E7%9B%8A%E5%8F%8A%E6%B7%A1%E5%80%89) As of 30 June 2025, substantial shareholder Sino Emperor Group Limited held 75% of the shares, and Ms. Chan Pui Shan, Mr. Lau King Wai's spouse, was deemed to have the same interest due to spousal interest; no other persons held 5% or more disclosable interests or short positions Substantial Shareholders' Interests in Shares (As at 30 June) | Name of Shareholder | Nature of Interest | Number of Shares | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Sino Emperor Group Limited | Beneficial owner | 750,000,000 | 75% | | Ms. Chan Pui Shan | Interest of spouse | 750,000,000 | 75% | - Sino Emperor is wholly-owned by Mr. Lau King Wai, and Ms. Chan Pui Shan is deemed to be interested in these shares due to her spousal relationship[64](index=64&type=chunk) [Competing Business](index=24&type=section&id=%E7%AB%B6%E7%88%AD%E4%B8%9A%E5%8A%A1) During the period and up to the announcement date, no directors, controlling shareholders, or their close associates owned any business interests that competed with the Group's business - No directors, controlling shareholders, or their close associates own any business interests that compete with the Group's business during the period and up to the announcement date[66](index=66&type=chunk) [Share-linked Agreements](index=25&type=section&id=%E8%82%A1%E7%A5%A8%E6%8E%9B%E9%88%95%E5%8D%94%E8%AD%B0) Other than the Share Award Scheme, the Company did not enter into or have any share-linked agreements during the period that could result in the issuance of shares - No share-linked agreements, other than the Share Award Scheme, were entered into or existed during the period that could result in the issuance of shares[67](index=67&type=chunk) [Share Award Scheme](index=25&type=section&id=%E8%82%A1%E4%BB%BD%E7%8D%8E%E5%8B%B5%E8%A8%88%E5%8A%83) The Company adopted a Share Award Scheme on 17 May 2021 to retain and incentivize employees; during the period, no share awards were granted, vested, cancelled, or lapsed, nor did the trustee purchase company shares, and the scheme limits total granted shares to 10% of issued shares and an individual limit of 1% - Adoption date: **17 May 2021**[68](index=68&type=chunk) - Purpose: To retain participants and encourage their contribution to the Group's development[68](index=68&type=chunk) - Status during the period: No share awards granted, vested, cancelled, or lapsed; no shares of the Company purchased by the trustee[69](index=69&type=chunk)[70](index=70&type=chunk) - Grant limits: Total number of shares granted not to exceed **10%** of issued shares, with an individual limit of **1%**[69](index=69&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=26&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) Neither the Company nor its subsidiaries purchased, sold, or redeemed any listed securities during the period, and the Company held no treasury shares - No purchase, sale, or redemption of any listed securities (including sale of treasury shares) by the Company or its subsidiaries during the period[72](index=72&type=chunk) - As at 30 June 2025, the Company held no treasury shares[72](index=72&type=chunk) [Changes in Directors' Information](index=26&type=section&id=%E8%91%A3%E4%BA%8B%E8%B3%87%E6%96%99%E8%AE%8A%E5%8B%95) During the period and up to the announcement date, there were no other disclosable changes in directors' information, except for Mr. Lee Wai Leung being recognized as a Certified Public Accountant by the Association of Chartered Certified Accountants in January 2025 - Mr. Lee Wai Leung was recognized as a Certified Public Accountant by the Association of Chartered Certified Accountants in **January 2025**[74](index=74&type=chunk) - No other changes in directors' information requiring disclosure[73](index=73&type=chunk) [Corporate Governance](index=26&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB) The Company adopted and complied with the Corporate Governance Code during the period, with a deviation from Code Provision C.2.1 where Mr. Lau King Wai concurrently holds the roles of Chairman and Chief Executive Officer, an arrangement the Board believes benefits business prospects and operational efficiency, balanced by appropriate power allocation and independent non-executive director oversight - Adopted and complied with the Corporate Governance Code set out in Appendix C1 of the GEM Listing Rules[75](index=75&type=chunk) - Deviation from Code Provision C.2.1: The roles of Chairman and Chief Executive Officer are not segregated, with **Mr. Lau King Wai holding both positions concurrently**[75](index=75&type=chunk) - The Board believes this arrangement benefits business prospects and operational efficiency, with appropriate power allocation and checks by independent non-executive directors[75](index=75&type=chunk) [Code of Conduct for Securities Transactions by Directors](index=26&type=section&id=%E8%91%A3%E4%BA%8B%E9%80%B2%E8%A1%8C%E8%AD%89%E5%88%B8%E4%BA%A4%E6%98%93%E4%B9%8B%E8%A1%8C%E7%82%BA%E5%AE%88%E5%88%99) The Company adopted a code of conduct for directors' securities transactions no less exacting than the GEM Listing Rules' required standard of dealings, and all directors confirmed compliance throughout the period with no non-compliance noted - Adopted a code of conduct for directors' securities transactions that is no less exacting than the required standard of dealings set out in the GEM Listing Rules[76](index=76&type=chunk) - All directors confirmed compliance with the required standard of dealings throughout the period, with no non-compliance noted[76](index=76&type=chunk) [Audit Committee](index=27&type=section&id=%E5%AF%A9%E6%A0%B8%E5%A7%94%E5%93%A1%E6%9C%83) The Audit Committee, established on 18 November 2016 with three members and Ms. So Ying Chi as Chairman, reviewed the unaudited consolidated interim financial results and found them compliant with applicable accounting standards, GEM Listing Rules, and other regulatory requirements - Establishment date: **18 November 2016**[77](index=77&type=chunk) - Composition: Three members, with **Ms. So Ying Chi as Chairman**[77](index=77&type=chunk) - Review conclusion: The interim financial results comply with applicable accounting standards, GEM Listing Rules, and other regulatory requirements, and are adequately disclosed[77](index=77&type=chunk) [Publication of Interim Results Announcement](index=27&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) This interim results announcement has been published on the Company's website and the HKEXnews website and will remain on the GEM website for at least seven days - Announcement publication platforms: Company website (**www.kwnelson.com.hk**) and HKEXnews website (**www.hkexnews.hk**)[78](index=78&type=chunk) - Retention on GEM website: At least **seven days** from the date of publication[78](index=78&type=chunk)

[Operating and Financial Summary](index=5&type=section&id=Operating%20and%20Financial%20Summary) [Operating Performance](index=5&type=section&id=Operating%20Performance) Key financial indicators declined year-over-year for the six months ended June 30, 2025, with net sales down 6.0% and operating profit falling sharply by 24.2% Consolidated Operating Results for the Six Months Ended June 30, 2025 | Indicator | H1 2025 | H1 2024 (Restated) | YoY Change | | :--- | :--- | :--- | :--- | | **Net Sales** | 1,661.7 million USD | 1,768.5 million USD | (6.0)% | | **Gross Profit** | 983.8 million USD | 1,064.8 million USD | (7.6)% | | **Gross Profit Margin** | 59.2% | 60.2% | (100 bps) | | **Operating Profit** | 238.4 million USD | 314.7 million USD | (24.2)% | | **Profit for the Period** | 130.0 million USD | 184.2 million USD | (29.4)% | | **Profit Attributable to Equity Holders** | 118.2 million USD | 169.4 million USD | (30.2)% | | **Adjusted EBITDA** | 268.7 million USD | 333.5 million USD | (19.4)% | | **Adjusted EBITDA Margin** | 16.2% | 18.9% | (270 bps) | | **Basic Earnings Per Share** | 0.085 USD | 0.116 USD | (26.8)% | | **Diluted Earnings Per Share** | 0.085 USD | 0.115 USD | (26.4)% | [Financial Summary](index=6&type=section&id=Financial%20Summary) Net sales declined due to macroeconomic uncertainty, while gross margin contracted and the company reduced marketing expenses to manage costs - Net sales decreased by **6.0%** year-over-year (5.2% on a constant currency basis) due to cautious wholesale purchasing and weaker consumer demand amid macroeconomic uncertainty[13](index=13&type=chunk) - Gross margin declined to **59.2%** from 60.2%, impacted by an unfavorable regional sales mix and strategic promotional activities[13](index=13&type=chunk) - Adjusted free cash flow significantly decreased to **$11.5 million** from $81.6 million in the prior year, driven by lower Adjusted EBITDA and increased net working capital[13](index=13&type=chunk) - The company repurchased **16,690,800 shares** for $42.9 million, and net debt increased to **$1.16 billion** from $1.10 billion at the end of 2024[13](index=13&type=chunk) [Chairman's Statement](index=7&type=section&id=Chairman's%20Statement) The Chairman addresses the challenging macroeconomic environment's impact on sales while highlighting business resilience and confidence in long-term travel trends - Net sales declined by **5.2%** year-over-year on a constant currency basis, with North America and Asia down 7.7% and 7.3% respectively, while Europe grew 1.6%[14](index=14&type=chunk) - Premium brands TUMI and Samsonite showed greater resilience with sales declines of **2.5%** and **4.7%** respectively, while American Tourister sales fell **12.7%** (all on a constant currency basis)[15](index=15&type=chunk) - The Direct-to-Consumer (DTC) channel's sales share increased to **39.6%** from 38.1%, with sales declining only 1.6%, outperforming the wholesale channel's 7.4% drop (constant currency)[16](index=16&type=chunk) - Non-travel product sales grew **0.1%** year-over-year (constant currency), increasing their share of total sales to **36.2%** from 34.4%, reflecting product diversification efforts[17](index=17&type=chunk) - The company strictly controlled costs, reducing marketing expenses by **15.9%**, while the Adjusted EBITDA margin contracted to **16.2%** from 18.9% in the prior year[18](index=18&type=chunk)[19](index=19&type=chunk) [Chief Executive Officer's Report](index=9&type=section&id=Chief%20Executive%20Officer's%20Report) The CEO discusses performance normalization post-pandemic, highlighting strategic investments and a cautious short-term outlook while maintaining long-term confidence - While H1 2025 net sales decreased by **5.2%** vs H1 2024, they grew **24.4%** vs pre-pandemic H1 2019 (constant currency), indicating a normalization of business trends[24](index=24&type=chunk)[25](index=25&type=chunk) - Channel performance diverged, with DTC sales down only **1.6%** and its share rising to 39.6%, while wholesale sales fell **7.4%** due to cautious customer purchasing (constant currency)[26](index=26&type=chunk) - Premium brands TUMI (**-2.5%**) and Samsonite (**-4.7%**) were more resilient, whereas American Tourister (**-12.7%**) was more affected by consumer sentiment and competition (constant currency)[27](index=27&type=chunk)[28](index=28&type=chunk) - Non-travel product sales grew **0.1%** (constant currency), increasing their sales mix by 180 bps to **36.2%**, with the Gregory brand growing **14.7%**[29](index=29&type=chunk) - The company made strategic investments in product innovation and retail expansion (net 21 new stores in H1) while maintaining strict cost controls[30](index=30&type=chunk)[31](index=31&type=chunk) - The short-term outlook remains uncertain due to macroeconomic pressures, and preparations for a U.S. dual listing are on hold pending improved market conditions[34](index=34&type=chunk)[35](index=35&type=chunk) [Condensed Consolidated Interim Financial Statements](index=13&type=section&id=Condensed%20Consolidated%20Interim%20Financial%20Statements) This section presents the unaudited interim financial statements, which reflect a year-over-year decline in revenue and profit and include a voluntary change in accounting policy [Condensed Consolidated Statement of Profit or Loss](index=13&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) For the six months ended June 30, 2025, net sales, gross profit, and operating profit all declined, resulting in a 29.4% decrease in profit for the period Condensed Consolidated Statement of Profit or Loss Summary (in millions of USD) | Item | H1 2025 | H1 2024 (Restated) | | :--- | :--- | :--- | | **Net Sales** | 1,661.7 | 1,768.5 | | **Gross Profit** | 983.8 | 1,064.8 | | **Operating Profit** | 238.4 | 314.7 | | **Profit Before Income Tax** | 184.6 | 250.1 | | **Profit for the Period** | 130.0 | 184.2 | | **Profit Attributable to Equity Holders** | 118.2 | 169.4 | [Condensed Consolidated Statement of Financial Position](index=15&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, total assets and liabilities increased, while total equity slightly decreased, leading to a significant reduction in net current assets Condensed Consolidated Statement of Financial Position Summary (in millions of USD) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Non-current Assets** | 3,395.9 | 3,336.6 | | **Total Current Assets** | 1,835.8 | 1,742.6 | | **Total Assets** | 5,231.7 | 5,079.2 | | **Total Equity** | 1,498.2 | 1,545.0 | | **Total Non-current Liabilities** | 2,111.0 | 2,443.9 | | **Total Current Liabilities** | 1,622.6 | 1,090.3 | | **Total Liabilities** | 3,733.6 | 3,534.2 | [Condensed Consolidated Statement of Cash Flows](index=18&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) Net cash from operating activities decreased significantly in H1 2025, while financing outflows increased due to share repurchases and lease payments Condensed Consolidated Statement of Cash Flows Summary (in millions of USD) | Item | H1 2025 | H1 2024 (Restated) | | :--- | :--- | :--- | | **Net Cash from Operating Activities** | 121.7 | 192.9 | | **Net Cash Used in Investing Activities** | (30.4) | (41.2) | | **Net Cash Used in Financing Activities** | (134.0) | (39.6) | | **Net Decrease/Increase in Cash and Cash Equivalents** | (42.6) | 112.1 | | **Cash and Cash Equivalents at End of Period** | 669.1 | 815.5 | [Notes to the Financial Statements](index=19&type=section&id=Notes%20to%20the%20Financial%20Statements) The notes detail a voluntary change in accounting policy for put option liabilities and provide segment information, debt structure, and share-based payment details - The company voluntarily changed its accounting policy to recognize fair value changes of put option financial liabilities related to non-controlling interests in profit or loss, with retrospective adjustments[59](index=59&type=chunk)[60](index=60&type=chunk) Net Sales by Brand (in millions of USD) | Brand | H1 2025 | H1 2024 | | :--- | :--- | :--- | | **Samsonite** | 854.1 | 903.8 | | **TUMI** | 402.4 | 413.9 | | **American Tourister** | 264.6 | 307.4 | | **Other** | 140.5 | 143.4 | | **Total** | 1,661.7 | 1,768.5 | - In H1 2025, the company granted new time-based and performance-based RSUs involving approximately **8.5 million target shares** to incentivize and retain key employees[136](index=136&type=chunk)[140](index=140&type=chunk) - As of June 30, 2025, total loans and borrowings were **$1.831 billion**, with the $413 million book value of Senior Notes due in May 2026 classified as current liabilities[101](index=101&type=chunk)[117](index=117&type=chunk) [Management's Discussion and Analysis (MD&A)](index=47&type=section&id=Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) [Overview and Key Factors Affecting Performance](index=47&type=section&id=Overview%20and%20Key%20Factors%20Affecting%20Performance) Management discusses the company's diversified business model and key performance drivers, including macroeconomic conditions, travel trends, and tariff policies - The company's business is highly diversified, with travel products accounting for **63.8%** of H1 2025 net sales and non-travel products for 36.2%; the DTC channel represented 39.6% of sales[182](index=182&type=chunk)[183](index=183&type=chunk) - In response to weaker global consumer sentiment, the company reduced advertising investment by **15.9%** year-over-year, lowering marketing expenses to **5.9%** of net sales from 6.6%[187](index=187&type=chunk)[188](index=188&type=chunk) - U.S. tariff policies create uncertainty; the company has reduced its sourcing from China for U.S.-bound products to **~12%** from ~85% in 2018 and is taking mitigating actions[190](index=190&type=chunk)[191](index=191&type=chunk) [Analysis of Operating Results](index=50&type=section&id=Analysis%20of%20Operating%20Results) This section details the decline in net sales, driven by wholesale and travel categories, and the resulting contraction in gross margin and operating profit [Net Sales Analysis](index=50&type=section&id=Net%20Sales%20Analysis) Net sales fell 5.2% on a constant currency basis, with declines across most brands, channels, and regions except for Europe YoY Change in Net Sales by Brand (Constant Currency) | Brand | YoY Change | | :--- | :--- | | **Samsonite** | (4.7)% | | **TUMI** | (2.5)% | | **American Tourister** | (12.7)% | | **Other** | 0.2% | YoY Change in Net Sales by Distribution Channel (Constant Currency) | Channel | YoY Change | | :--- | :--- | | **Wholesale** | (7.4)% | | **DTC Retail** | (1.9)% | | **DTC E-commerce** | (0.7)% | YoY Change in Net Sales by Region (Constant Currency) | Region | YoY Change | | :--- | :--- | | **Asia** | (7.3)% | | **North America** | (7.7)% | | **Europe** | 1.6% | | **Latin America** | (1.0)% | [Profitability Analysis](index=54&type=section&id=Profitability%20Analysis) Gross margin contracted due to sales mix and promotions, and despite cost controls, operating profit fell significantly due to operating deleverage - Gross margin decreased by **100 basis points** to 59.2%, primarily due to an unfavorable sales mix with a lower proportion of sales from higher-margin Asia and strategic promotional activities[226](index=226&type=chunk) - Marketing expenses decreased by **15.9%** year-over-year to $98.7 million, representing 5.9% of net sales compared to 6.6% in the prior year[228](index=228&type=chunk) - Operating profit decreased by **24.2%** year-over-year to $238.4 million, mainly due to the decline in net sales[234](index=234&type=chunk) [Liquidity and Capital Resources](index=58&type=section&id=Liquidity%20and%20Capital%20Resources) This section details the company's cash flow, capital expenditures, and debt profile, noting a decrease in operating cash flow and an increase in leverage Cash Flow Overview (in millions of USD) | Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | **Net Cash from Operating Activities** | 121.7 | 192.9 | | **Net Cash Used in Investing Activities** | (30.4) | (41.2) | | **Net Cash Used in Financing Activities** | (134.0) | (39.6) | - Total capital expenditures decreased by **26.4%** year-over-year to $30.4 million, mainly due to lower investment in machinery, equipment, and retail store renovations[247](index=247&type=chunk) - As of June 30, 2025, total loans and borrowings were **$1.831 billion**, and the leverage ratio (Total Debt / Total Equity) increased to **122.2%** from 115.1% at the end of 2024[267](index=267&type=chunk)[285](index=285&type=chunk) [Non-IFRS Financial Measures](index=59&type=section&id=Non-IFRS%20Financial%20Measures) Key non-IFRS metrics like Adjusted EBITDA and Adjusted Net Income declined, and the report provides detailed reconciliations to their IFRS counterparts Key Non-IFRS Financial Metrics (in millions of USD) | Indicator | H1 2025 | H1 2024 (Restated) | YoY Change | | :--- | :--- | :--- | :--- | | **Adjusted EBITDA** | 268.7 | 333.5 | (19.4)% | | **Adjusted EBITDA Margin** | 16.2% | 18.9% | (270 bps) | | **Adjusted Net Income** | 123.4 | 174.0 | (29.1)% | | **Adjusted Free Cash Flow** | 11.5 | 81.6 | (85.9)% | Reconciliation of Adjusted EBITDA to Profit for the Period (in millions of USD) | Item | H1 2025 | H1 2024 (Restated) | | :--- | :--- | :--- | | **Profit for the period** | 130.0 | 184.2 | | Add: Income tax expense | 54.6 | 65.9 | | Add: Finance costs | 59.2 | 72.5 | | Less: Finance income | (5.4) | (7.9) | | **Operating profit** | 238.4 | 314.7 | | Add: Adjustments for depreciation, amortization, etc | 30.3 | 18.8 | | **Adjusted EBITDA** | 268.7 | 333.5 | [Strategic Assessment and Future Outlook](index=68&type=section&id=Strategic%20Assessment%20and%20Future%20Outlook) Management expresses a cautious short-term outlook due to macroeconomic headwinds but remains confident in long-term growth driven by strong travel trends - **Cautious short-term outlook**: Demand in H2 2025 is expected to be impacted by ongoing macroeconomic and trade policy uncertainties, though Q3 sales may improve over Q2[298](index=298&type=chunk) - **Long-term strategic priorities**: Continue to invest in brand elevation, product innovation, market penetration, value-accretive M&A, and driving operating leverage[298](index=298&type=chunk) - **U.S. dual listing plan**: Preparations are ongoing, but the company is monitoring market uncertainties and will proceed when conditions improve[299](index=299&type=chunk) [Corporate Governance Report](index=70&type=section&id=Corporate%20Governance%20Report) This section outlines the company's governance structure, compliance with codes, and details on share award schemes, dividends, and share repurchases [Board of Directors and Committees](index=70&type=section&id=Board%20of%20Directors%20and%20Committees) The board comprises eight members with a majority of independent directors, and its Audit, Nomination, and Remuneration committees are properly constituted - The Board of Directors consists of **8 members**, including the CEO, Chairman, and 6 Independent Non-executive Directors, in compliance with governance requirements[302](index=302&type=chunk) - The Audit, Nomination, and Remuneration Committees are established and functioning, with their primary duties and composition detailed in the report[303](index=303&type=chunk)[305](index=305&type=chunk)[306](index=306&type=chunk) [Share Award Schemes](index=71&type=section&id=Share%20Award%20Schemes) The company utilizes share award schemes to grant options and RSUs, with details on movements and new grants provided for the reporting period - As of June 30, 2025, the company had **65,050,449 outstanding share options** with a weighted average exercise price of HK$21.28[131](index=131&type=chunk) - On June 12, 2025, the company granted **4,247,499 time-based RSUs** and **4,247,499 performance-based RSUs** (at target), with vesting tied to future annual LTIP Adjusted EBITDA growth targets[328](index=328&type=chunk)[332](index=332&type=chunk) [Dividends and Share Repurchases](index=78&type=section&id=Dividends%20and%20Share%20Repurchases) The company paid a $150 million cash dividend in July 2025 and repurchased 16.7 million shares for $42.9 million during the first half of the year - A cash dividend totaling **$150 million**, or approximately $0.1085 per share (before tax), was paid on July 15, 2025[341](index=341&type=chunk) Share Repurchases in H1 2025 | Month of Repurchase | Total Shares Repurchased | Total Purchase Price Paid (in millions of USD) | | :--- | :--- | :--- | | **January** | 4,164,900 | 12.0 | | **March** | 12,525,900 | 30.8 | | **Total** | 16,690,800 | 42.9 |

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 布 的 內 容 概 不 負 責，對 其 準 確 性 或 完 整 性 亦 不 發 表 任 何 聲 明，並 明 確 表 示，概 不 會 就 因 本 公 布 全 部 或 任 何 部 分 內 容 而 產 生 或 因 倚 賴 該 等 內 容 而 引 致 的 任 何 損 失 承 擔 任 何 責 任。 VALUE PARTNERS GROUP LIMITED 惠理集團有限公 司 （於開曼群島註冊之有限責任公司） （股份代號：806） 截至二零二五年六月三十日止期間的 中期業績公布 財務摘要 下 列 為 報 告 期 間 的 主 要 財 務 摘 要： | | | 截至六月三十日止期間 | | | --- | --- | --- | --- | | （百 萬 港 元） | 二零二五年 | 二零二四年 | 變 動 % | | 收入總額 | 220.8 | 235.7 | -6.3% | | 管理費總額 | 185.6 | 200.8 | -7.6% | | 表現費總額 | 5.8 | 9.7 | -40.2% | | 經營（ ...

[Financial Highlights](index=2&type=section&id=Financial%20Highlights) [Consolidated Statement of Comprehensive Income Summary](index=2&type=section&id=Consolidated%20Statement%20of%20Comprehensive%20Income) The Group's total revenue increased 47.0% to HKD 219 million, with operating profit surging 443% and net profit growing 63.9% for the six months ended June 30, 2025 Key Interim Financial Performance Indicators (For the six months ended June 30) | Indicator | 2025 (HKD thousands) | 2024 (HKD thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 218,909 | 148,891 | +47.0% | | Gross Profit | 11,865 | 8,148 | +45.6% | | Operating Profit | 5,803 | 1,069 | +443.0% | | Profit for the Period | 4,298 | 2,622 | +63.9% | | Profit Attributable to Owners of the Company | 4,298 | 2,231 | +92.6% | | Basic EPS (HK cents) | 16.51 | 9.52 | +73.4% | [Consolidated Statement of Financial Position Summary](index=4&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, total assets increased 5.9% to HKD 183 million, total equity grew 3.7% to HKD 169 million, while total liabilities rose 46.5% to HKD 13.58 million Key Balance Sheet Items (As of June 30) | Indicator | 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | Change | | :--- | :--- | :--- | :--- | | Total Assets | 182,549 | 172,216 | +5.9% | | Total Equity | 168,971 | 162,946 | +3.7% | | Total Liabilities | 13,578 | 9,270 | +46.5% | | Cash and Cash Equivalents | 29,287 | 39,678 | -26.2% | | Trade and Other Receivables | 136,660 | 119,001 | +14.8% | [Management Discussion and Analysis](index=16&type=section&id=Management%20Discussion%20and%20Analysis) [Business Review](index=16&type=section&id=Business%20Review) The Group significantly enhanced profitability in IT product sales and distribution, with segment profit up 184.7%, and is expanding its repair services, particularly in the US market - The company's two core businesses are IT product sales and distribution, and repair and service support[34](index=34&type=chunk) - Segment profit from sales and distribution of IT products significantly increased by **184.7%** from **HKD 2.68 million** to **HKD 7.62 million** due to readjusted gross margins on sales transactions[35](index=35&type=chunk) - The company is expanding its service scope and capitalizing on growth opportunities in the US market by outsourcing repair business processes through service framework agreements with controlling and major shareholders[36](index=36&type=chunk) [Financial Review](index=18&type=section&id=Financial%20Review) Total revenue grew 47.0% driven by IT product sales and distribution, while effective cost control and increased gross profit led to a strong 65.4% rise in net profit despite a slight dip in overall gross margin Revenue by Business Segment (For the six months ended June 30) | Business Segment | 2025 (HKD thousands) | 2024 (HKD thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Sales and Distribution of IT Products | 202,894 | 134,741 | +50.6% | | Repair and Service Support | 16,015 | 14,150 | +12.8% | | **Total** | **218,909** | **148,891** | **+47.0%** | Revenue by Geographical Region (For the six months ended June 30) | Region | 2025 (HKD thousands) | 2024 (HKD thousands) | Revenue Share (2025) | | :--- | :--- | :--- | :--- | | Hong Kong | 187,777 | 130,919 | 85.8% | | Japan | 12,958 | 11,513 | 5.9% | | United States | 8,523 | 2,134 | 3.9% | | Australia | 3,458 | 3,748 | 1.6% | | China | 2,336 | – | 1.1% | | Others | 3,857 | 577 | 1.8% | - Overall gross margin slightly decreased from **5.5%** to **5.4%**, primarily due to the increased revenue contribution from the lower-margin sales and distribution business[43](index=43&type=chunk) - Sales and distribution expenses were reduced by **10.5%**, and administrative expenses decreased by **11.0%**, through improved operational efficiency and stringent financial policies[44](index=44&type=chunk)[45](index=45&type=chunk) - Net profit increased by **65.4%** to **HKD 4.3 million**, primarily driven by higher gross profit and reduced operating expenses[46](index=46&type=chunk) [Liquidity, Financial Resources and Gearing Ratio](index=22&type=section&id=Liquidity%2C%20Financial%20Resources%20and%20Gearing%20Ratio) As of June 30, 2025, the Group maintained a robust financial position with HKD 153 million in net current assets and no outstanding borrowings, while the gearing ratio slightly increased to 8.0% Liquidity and Capital Structure | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Net Current Assets | Approx. HKD 153,200,000 | Approx. HKD 149,500,000 | | Cash and Cash Equivalents | Approx. HKD 29,300,000 | Approx. HKD 39,700,000 | | Outstanding Borrowings | None | None | | Gearing Ratio | Approx. 8.0% | Approx. 5.7% | [Use of Proceeds](index=23&type=section&id=Use%20of%20Proceeds) The company utilized HKD 6.1 million of the HKD 7.1 million net proceeds from its November 2024 share subscription, with the remaining HKD 1 million for overseas expansion delayed until Q4 2025 - The first tranche of share subscriptions was completed in November 2024, raising net proceeds of approximately **HKD 7.1 million**[55](index=55&type=chunk)[56](index=56&type=chunk) - As of June 30, 2025, **HKD 6.1 million** has been utilized, with **HKD 1 million** remaining; the investment plan for establishing overseas repair centers is expected to be delayed by **3 to 6 months**[57](index=57&type=chunk) [Business Outlook](index=21&type=section&id=Business%20Outlook) The Group will prioritize the 'circular economy' by focusing on 3C product after-sales services, particularly repair and refurbishment, and anticipates potential future fundraising to support this growth - The strategic focus is to advance market share in the 'circular economy,' with a core emphasis on developing after-sales services for 3C products, including repair and refurbishment[51](index=51&type=chunk) - The company will prioritize and allocate resources to develop the repair and service support segment, planning to establish repair centers to serve renowned IT brands and its own products[51](index=51&type=chunk) - Management anticipates potential further fundraising to support working capital expenditures, overseas organizational expansion, and potential capital expenditures[52](index=52&type=chunk) [Notes to the Interim Condensed Consolidated Financial Information](index=6&type=section&id=Notes%20to%20the%20Interim%20Condensed%20Consolidated%20Financial%20Information) [Note 4 & 5: Revenue and Segment Information](index=7&type=section&id=Note%204%20%26%205%3A%20Revenue%20and%20Segment%20Information) The Group's revenue is primarily from IT product sales and distribution (HKD 203 million revenue, HKD 7.62 million segment profit) and repair services (HKD 16.02 million revenue, HKD 1.95 million segment profit), with Hong Kong as the largest market Revenue and Profit by Business Segment (For the six months ended June 30, 2025) | Business Segment | Revenue (HKD thousands) | Segment Profit (HKD thousands) | | :--- | :--- | :--- | | Sales and Distribution of IT Products | 202,894 | 7,621 | | Repair and Service Support | 16,015 | 1,948 | | **Total** | **218,909** | **9,569** | - By customer location, Hong Kong is the largest market, contributing **HKD 188 million** in revenue and accounting for **85.8%** of total revenue[21](index=21&type=chunk) [Note 8 & 9: Dividends and Earnings Per Share](index=12&type=section&id=Note%208%20%26%209%3A%20Dividends%20and%20Earnings%20Per%20Share) The Board does not recommend an interim dividend, while basic earnings per share significantly increased to HKD 16.51 cents for the six months ended June 30, 2025 - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025[27](index=27&type=chunk) Basic Earnings Per Share Calculation | Item | 2025 | 2024 | | :--- | :--- | :--- | | Profit Attributable to Owners of the Company (HKD thousands) | 4,298 | 2,231 | | Weighted Average Number of Ordinary Shares (thousands) | 26,039 | 23,434 | | Basic EPS (HK cents) | 16.51 | 9.52 | [Other Information](index=25&type=section&id=Other%20Information) [Directors' and Chief Executive's Interests](index=26&type=section&id=Directors%27%20and%20Chief%20Executive%27s%20Interests) As of June 30, 2025, Foxconn (Far East) Limited held 45.52% of shares, while Non-executive Director Mr. Lam Wai Yu held 10.46% through controlled entities and spouse's interests - Major shareholder Foxconn (Far East) Limited, a wholly-owned subsidiary of Hon Hai Precision Industry Co., Ltd., holds **45.52%** of the company's issued share capital[71](index=71&type=chunk) - Non-executive Director Mr. Lam Wai Yu collectively holds **10.46%** of the company's shares through controlled corporations and spouse's interests[68](index=68&type=chunk)[71](index=71&type=chunk)[72](index=72&type=chunk)

香 港 交 易 及 結 算 所 有 限 公 司 及 香 港 聯 合 交 易 所 有 限 公 司 對 本 公 告 之 內 容 概 不 負 責，對 其 準 確 性 或 完 整 性 亦 不 發 表 任 何 聲 明，並 明 確 表 示 概 不 就 因 本 公 告 全 部 或 任 何 部 分 內 容 而 產 生 或 因 倚 賴 該 等 內 容 而 引 致 之 任 何 損 失 承 擔 任 何 責 任。 BEST LINKING GROUP HOLDINGS LIMITED 永聯豐集團控股有限公司 （於 開曼群島註冊成立的有限公司） （股份代號：9882） 截 至 二 零 二 五 年 六 月 三 十 日 止 六 個 月 的 中 期 業 績 公 告 財 務 摘 要 | | | | | | | 收 | 益 | | | | | | | 103,007 | 45,999 | 123.93% | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | 毛 | 利 | | | | | | | 16,054 | 18,031 | (10.96%) | | ...

[Financial Highlights](index=2&type=section&id=%E8%B4%A2%E5%8A%A1%E6%91%98%E8%A6%81) [Condensed Consolidated Interim Statement of Profit or Loss](index=2&type=section&id=%E7%AE%80%E6%98%8E%E5%90%88%E5%B9%B6%E4%B8%AD%E6%9C%9F%E5%88%A9%E6%BD%A4%E8%A1%A8) For the six months ended June 30, 2025, the company achieved a 6.8% revenue growth to $2.242 billion, a 22.7% increase in gross profit to $259 million, and a 299.4% surge in net profit attributable to equity holders to $63.48 million, with basic EPS at $0.025 Condensed Consolidated Interim Statement of Profit or Loss | Indicator | Six Months Ended June 30, 2025 (USD Thousands) | Six Months Ended June 30, 2024 (USD Thousands) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 2,242,248 | 2,098,927 | 6.8% | | Cost of sales | (1,983,341) | (1,888,000) | 5.0% | | Gross profit | 258,907 | 210,927 | 22.7% | | Engineering and product development costs | (75,393) | (88,628) | -14.9% | | Selling and distribution expenses | (10,704) | (10,790) | -0.8% | | Administrative expenses | (81,474) | (71,622) | 13.8% | | Net other income | 1,792 | 1,424 | 25.9% | | Operating profit | 93,128 | 41,311 | 125.4% | | Profit before income tax | 95,681 | 40,790 | 134.6% | | Profit for the period | 69,014 | 23,061 | 199.3% | | Profit for the period attributable to equity holders of the Company | 63,480 | 15,695 | 299.4% | | Basic earnings per share (USD) | 0.025 | 0.006 | 316.7% | [Condensed Consolidated Interim Statement of Comprehensive Income](index=3&type=section&id=%E7%AE%80%E6%98%8E%E5%90%88%E5%B9%B6%E4%B8%AD%E6%9C%9F%E7%BB%BC%E5%90%88%E6%94%B6%E7%9B%8A%E8%A1%A8) For the six months ended June 30, 2025, the company's total comprehensive income for the period was $116.2 million, a significant improvement from a $2.2 million loss in the prior year, primarily driven by a substantial increase in profit for the period and a positive shift in exchange differences Condensed Consolidated Interim Statement of Comprehensive Income | Indicator | Six Months Ended June 30, 2025 (USD Thousands) | Six Months Ended June 30, 2024 (USD Thousands) | | :--- | :--- | :--- | | Profit for the period | 69,014 | 23,061 | | Other comprehensive income (loss) | | | | Exchange differences | 47,187 | (25,256) | | Total comprehensive income (loss) for the period | 116,201 | (2,195) | | Attributable to equity holders of the Company | 109,734 | (8,330) | | Attributable to non-controlling interests | 6,467 | 6,135 | [Condensed Consolidated Interim Statement of Financial Position](index=4&type=section&id=%E7%AE%80%E6%98%8E%E5%90%88%E5%B9%B6%E4%B8%AD%E6%9C%9F%E8%B5%84%E4%BA%A7%E8%B4%9F%E5%80%BA%E8%A1%A8) As of June 30, 2025, the company's total assets increased to $3.617 billion, total equity rose to $2.108 billion, and total liabilities grew to $1.508 billion, with cash and cash equivalents increasing by $36.9 million to $459 million Condensed Consolidated Interim Statement of Financial Position | Indicator | June 30, 2025 (USD Thousands) | December 31, 2024 (USD Thousands) | | :--- | :--- | :--- | | **Assets** | | | | Non-current assets | 1,811,367 | 1,794,818 | | Current assets | 1,805,185 | 1,684,324 | | Total assets | 3,616,552 | 3,479,142 | | **Equity** | | | | Capital and reserves attributable to equity holders of the Company | 2,066,776 | 1,978,877 | | Non-controlling interests | 41,456 | 51,024 | | Total equity | 2,108,232 | 2,029,901 | | **Liabilities** | | | | Non-current liabilities | 323,213 | 296,861 | | Current liabilities | 1,185,107 | 1,152,380 | | Total liabilities | 1,508,320 | 1,449,241 | | Total equity and liabilities | 3,616,552 | 3,479,142 | - Cash and cash equivalents increased by **$36.9 million** from $422.3 million as of December 31, 2024, to **$459.2 million** as of June 30, 2025[7](index=7&type=chunk)[53](index=53&type=chunk) [Notes to the Condensed Consolidated Interim Financial Information](index=6&type=section&id=%E7%AE%80%E6%98%8E%E5%90%88%E5%B9%B6%E4%B8%AD%E6%9C%9F%E8%B4%A2%E5%8A%A1%E8%B5%84%E6%96%99%E9%99%84%E6%B3%A8) [General Information](index=6&type=section&id=1.%20%E4%B8%80%E8%88%AC%E8%B5%84%E6%96%99) Nexteer Automotive Group Limited primarily designs and manufactures steering and driveline systems and components, including advanced driver assistance systems and autonomous driving, operating globally with key markets in North America, Europe, South America, China, and India, and is ultimately controlled by Aviation Industry Corporation of China, Ltd - The Group primarily designs and manufactures **steering and driveline systems and components**, including advanced driver assistance systems and autonomous driving, for automotive manufacturers[9](index=9&type=chunk) - The Group primarily operates in the **United States, Mexico, China, Poland, India, Morocco, and Brazil**, with key markets in North America, Europe, South America, China, and India[9](index=9&type=chunk) - The Company's ultimate controlling entity is **Aviation Industry Corporation of China, Ltd.**, and its shares have been listed on the Main Board of the Hong Kong Stock Exchange since October 7, 2013[10](index=10&type=chunk)[11](index=11&type=chunk) [Basis of Preparation and Accounting Policies](index=6&type=section&id=%E7%BC%96%E8%A3%BD%E5%9F%BA%E6%BA%96%E5%8F%8A%E4%BC%9A%E8%AE%A1%E6%94%BF%E7%AD%96) The condensed financial information is prepared in accordance with International Accounting Standard 34 and Appendix D2 of the Hong Kong Listing Rules, consistent with the accounting policies used in the 2024 annual financial statements, with no significant impact from the adoption of IAS 21 (Amendment) "Lack of Exchangeability" - The condensed financial information is prepared in accordance with **International Accounting Standard 34 "Interim Financial Reporting"** and the applicable disclosure requirements of Appendix D2 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[13](index=13&type=chunk) - The accounting policies applied are **consistent with those used in the annual financial statements** for the year ended December 31, 2024[14](index=14&type=chunk) - The Group has adopted **IAS 21 (Amendment) "Lack of Exchangeability"**, effective January 1, 2025, which has no significant impact on the condensed financial information[15](index=15&type=chunk)[16](index=16&type=chunk) [Revenue and Segment Information](index=8&type=section&id=2.%20%E6%94%B6%E5%85%A5%E5%8F%8A%E5%88%86%E9%83%A8%E8%B5%84%E6%96%99) The Group's revenue primarily stems from selling steering and driveline systems and components to OEMs, along with providing tooling and prototype parts, categorizing its business into three reportable segments: North America, Asia Pacific, and Europe, Middle East, Africa, and South America, with total revenue of $2.242 billion for the six months ended June 30, 2025, where North America contributed 50.8%, Asia Pacific 30.6%, and Europe, Middle East, Africa, and South America 17.9%, with Electric Power Steering (EPS) being the main product line contributing 68.0% of revenue - The Group primarily recognizes revenue from the **sale of production parts, tooling, and engineering design and development/prototypes**[17](index=17&type=chunk)[19](index=19&type=chunk)[32](index=32&type=chunk) - The Group's business is organized into three reportable segments: **North America, Asia Pacific, and Europe, Middle East, Africa, and South America**[22](index=22&type=chunk) 2025 First Half Revenue by Geographic Segment | Geographic Segment | Revenue (USD Thousands) | Percentage (%) | | :--- | :--- | :--- | | North America | 1,138,304 | 50.8 | | Asia Pacific | 686,533 | 30.6 | | Europe, Middle East, Africa and South America | 400,851 | 17.9 | | Other | 16,560 | 0.7 | | **Total** | **2,242,248** | **100.0** | 2025 First Half Revenue by Product Line | Product Line | Revenue (USD Thousands) | Percentage (%) | | :--- | :--- | :--- | | EPS (Electric Power Steering) | 1,525,379 | 68.0 | | CIS (Column and Intermediate Shaft) | 228,499 | 10.2 | | HPS (Hydraulic Power Steering) | 91,624 | 4.1 | | DL (Driveline) | 396,746 | 17.7 | | **Total** | **2,242,248** | **100.0** | [Revenue from Contracts with Customers](index=8&type=section&id=%E5%AE%A2%E6%88%B7%E5%90%88%E7%B4%84%E6%94%B6%E5%85%A5) The Group primarily generates revenue by selling production parts, tooling, and providing engineering design and development services to OEMs, with revenue recognized upon the fulfillment of performance obligations, and contract assets and liabilities reflecting unbilled engineering work and customer prepayments - The Group enters into contracts with original equipment manufacturers to **sell steering and driveline systems and components**, and to provide tooling and prototype parts[17](index=17&type=chunk) - Revenue from production parts is recognized upon **shipment to customers and transfer of ownership and risk of loss**, while revenue from customized products is recognized using the input method[19](index=19&type=chunk) - Revenue from tooling and non-production related engineering design and development/prototypes is also recognized using the **input method** as performance obligations are satisfied[19](index=19&type=chunk) Contract Assets and Liabilities | Indicator | June 30, 2025 (USD Thousands) | December 31, 2024 (USD Thousands) | | :--- | :--- | :--- | | Contract assets | 36,937 | 46,219 | | Current contract liabilities | 24,382 | 25,329 | | Non-current contract liabilities | 107,313 | 108,062 | [Segment Information](index=9&type=section&id=%E5%88%86%E9%83%A8%E8%B5%84%E6%96%99) The Group's operations are divided into three reportable segments—North America, Asia Pacific, and Europe, Middle East, Africa, and South America—all offering identical steering and driveline products, with Adjusted EBITDA as the primary performance indicator, totaling $230.35 million for the six months ended June 30, 2025, a 16.8% increase year-on-year, with Asia Pacific contributing the highest at $115.7 million - The Group's business is organized into three reportable segments: **North America, Asia Pacific, and Europe, Middle East, Africa, and South America**, all offering the same steering and driveline products[22](index=22&type=chunk) - The key performance indicator is **Adjusted EBITDA** (operating earnings before interest, taxes, depreciation and amortization, impairment of intangible assets, impairment-related customer compensation income, and share of results of a joint venture)[23](index=23&type=chunk) 2025 First Half Adjusted EBITDA by Geographic Segment | Geographic Segment | 2025 First Half (USD Thousands) | 2024 First Half (USD Thousands) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | North America | 86,016 | 87,329 | -1.5% | | Asia Pacific | 115,704 | 104,737 | 10.5% | | Europe, Middle East, Africa and South America | 35,114 | 7,422 | 373.1% | | Other | (6,481) | (2,193) | 195.5% | | **Total** | **230,353** | **197,295** | **16.8%** | 2025 First Half Revenue by Geographic Segment | Region | 2025 First Half (USD Thousands) | 2024 First Half (USD Thousands) | | :--- | :--- | :--- | | North America | 1,138,304 | 1,118,983 | | Asia Pacific | 686,533 | 594,578 | | Europe, Middle East, Africa and South America | 400,851 | 366,348 | | Other | 16,560 | 19,018 | | **Total** | **2,242,248** | **2,098,927** | [Revenue Breakdown](index=12&type=section&id=%E6%94%B6%E5%85%A5%E5%8A%83%E5%88%86) The Group's revenue is segmented by product line into Electric Power Steering (EPS), Column and Intermediate Shaft (CIS), Hydraulic Power Steering (HPS), and Driveline (DL), with EPS being the largest contributor at $1.525 billion in the first half of 2025, an 8.6% increase year-on-year, and major customers including General Motors, Customer A, and Customer B collectively contributing over $1.5 billion 2025 First Half Revenue by Product Line | Product Line | 2025 First Half (USD Thousands) | 2024 First Half (USD Thousands) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | EPS | 1,525,379 | 1,404,555 | 8.6% | | CIS | 228,499 | 221,999 | 2.9% | | HPS | 91,624 | 90,129 | 1.7% | | DL | 396,746 | 382,244 | 3.8% | | **Total** | **2,242,248** | **2,098,927** | **6.8%** | 2025 First Half Major Customer Revenue | Customer | 2025 First Half (USD Thousands) | 2024 First Half (USD Thousands) | | :--- | :--- | :--- | | General Motors | 771,142 | 754,995 | | Customer A | 414,764 | 408,694 | | Customer B | 349,576 | 342,660 | | **Total** | **1,535,482** | **1,506,349** | [Cost of Sales and Expense Analysis](index=14&type=section&id=3.%20%E9%94%80%E5%94%AE%E6%88%90%E6%9C%AC%E5%8F%8A%E5%BC%80%E6%94%AF%E5%88%86%E6%9E%90) For the six months ended June 30, 2025, total cost of sales, engineering and product development, selling and distribution, and administrative expenses amounted to $2.151 billion, a 4.5% increase year-on-year, with raw material costs being the largest component, rising 10.5%, and a significant 95.8% decrease in intangible asset impairment expenses to $1.6 million 2025 First Half Costs and Expenses | Item | 2025 First Half (USD Thousands) | 2024 First Half (USD Thousands) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Raw materials (including work-in-progress and finished goods) | 1,479,635 | 1,339,211 | 10.5% | | Employee labor and benefit costs | 302,559 | 322,679 | -6.2% | | Temporary labor costs | 60,036 | 49,496 | 21.3% | | Depreciation of property, plant and equipment | 70,492 | 72,866 | -3.3% | | Amortization of intangible assets | 60,811 | 60,186 | 1.0% | | Impairment of intangible assets | 1,579 | 37,699 | -95.8% | | Total cost of sales, engineering and product development costs, selling and distribution, and administrative expenses | 2,150,912 | 2,059,040 | 4.5% | - Impairment of intangible assets significantly decreased from **$37.7 million** in the first half of 2024 to **$1.6 million** in the first half of 2025[33](index=33&type=chunk) [Net Other Income](index=14&type=section&id=4.%20%E5%85%B6%E4%BB%96%E6%94%B6%E7%9B%8A%E5%87%80%E9%A2%9D) For the six months ended June 30, 2025, net other income was $1.79 million, a 25.9% increase from $1.42 million in the prior year, primarily influenced by increased net foreign exchange losses and gains from the disposal of property, plant and equipment 2025 First Half Net Other Income | Item | 2025 First Half (USD Thousands) | 2024 First Half (USD Thousands) | | :--- | :--- | :--- | | Net foreign exchange loss | (7,038) | (253) | | Gain (loss) on disposal of property, plant and equipment | 262 | (1,497) | | Other | 8,568 | 3,174 | | **Total** | **1,792** | **1,424** | [Finance Income and Costs](index=15&type=section&id=5.%20%E8%9E%8D%E8%B5%84%E6%94%B6%E7%9B%8A%E5%8F%8A%E6%88%90%E6%9C%AC) For the six months ended June 30, 2025, net finance income was $0.79 million, a positive shift from a net finance cost of $2.18 million in the prior year, mainly due to a significant reduction in interest on bank borrowings 2025 First Half Finance Income and Costs | Item | 2025 First Half (USD Thousands) | 2024 First Half (USD Thousands) | | :--- | :--- | :--- | | Interest income from bank deposits | 4,182 | 3,131 | | Interest expense on bank borrowings | 1,648 | 3,246 | | Interest on lease liabilities | 1,389 | 1,309 | | Other finance costs | 2,402 | 4,150 | | Less: Amount capitalized on qualifying assets | (2,049) | (3,396) | | **Net finance income (costs)** | **792** | **(2,178)** | [Income Tax Expense](index=15&type=section&id=6.%20%E6%89%80%E5%BE%97%E7%A8%8E%E5%BC%80%E6%94%AF) For the six months ended June 30, 2025, income tax expense increased by 50.4% to $26.67 million from $17.73 million in the prior year, with the Group assessing Pillar Two legislation and expecting no significant Pillar Two income tax liabilities due to compliance with transitional safe harbor rules in most jurisdictions, while the potential impact of the US Inflation Reduction Act is still under evaluation 2025 First Half Income Tax Expense | Indicator | 2025 First Half (USD Thousands) | 2024 First Half (USD Thousands) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Income tax expense | 26,667 | 17,729 | 50.4% | | Percentage of profit before income tax | 27.9% | 43.5% | -15.6 percentage points | - The Group has assessed Pillar Two legislation and believes that the effective tax rates in most jurisdictions where it operates comply with **transitional safe harbor rules**, thus no significant Pillar Two income tax liabilities are expected[38](index=38&type=chunk)[74](index=74&type=chunk) - The potential impact of the **US Inflation Reduction Act**, which introduces significant changes to tax legislation, is currently being evaluated for its effects on the consolidated financial statements[39](index=39&type=chunk)[75](index=75&type=chunk) [Earnings Per Share](index=16&type=section&id=7.%20%E6%AF%8F%E8%82%A1%E7%9B%88%E5%88%A9) For the six months ended June 30, 2025, basic earnings per share significantly increased to $0.025 from $0.006 in the prior year, with diluted earnings per share remaining the same as basic earnings per share because the adjusted exercise price of share options was higher than the average market price per share 2025 First Half Earnings Per Share | Indicator | 2025 First Half | 2024 First Half | | :--- | :--- | :--- | | Profit attributable to equity holders of the Company (USD Thousands) | 63,480 | 15,695 | | Weighted average number of ordinary shares in issue (thousands) | 2,509,824 | 2,509,824 | | Basic earnings per share (USD) | 0.025 | 0.006 | | Diluted earnings per share (USD) | 0.025 | 0.006 | - Diluted earnings per share is the same as basic earnings per share because the **adjusted exercise price of share options was higher than the average market price per share**, thus no assumption was made that share options were exercised[42](index=42&type=chunk) [Dividends](index=17&type=section&id=8.%20%E8%82%A1%E6%81%AF) The Board does not recommend an interim dividend for the six months ended June 30, 2025, but declared a dividend of approximately $21.84 million on June 18, 2025, for the year ended December 31, 2024, while two joint ventures declared dividends totaling approximately RMB 288 million in June 2025, with approximately $16.04 million attributable to non-controlling interests - The Board does not recommend the payment of any **interim dividend** for the six months ended June 30, 2025[44](index=44&type=chunk)[100](index=100&type=chunk) - On June 18, 2025, the Board declared a dividend of approximately **$21.835 million** for the profit for the year ended December 31, 2024[44](index=44&type=chunk) - Nexteer Lingyun Driveline Systems (Zhuozhou) Co., Ltd. and Nexteer Lingyun Driveline Systems (Wuhu) Co., Ltd. declared dividends totaling approximately **RMB 288 million** in June 2025, with approximately **$16.04 million** attributable to non-controlling interests[44](index=44&type=chunk)[45](index=45&type=chunk) [Trade Receivables](index=17&type=section&id=9.%20%E5%BA%94%E6%94%B6%E8%B4%A6%E6%AC%BE) As of June 30, 2025, total trade receivables amounted to $848 million, a 2.56% increase from December 31, 2024, with credit terms primarily ranging from 30 to 90 days, and the carrying amount of trade receivables pledged as collateral increasing to $494 million Total Trade Receivables and Impairment Allowance | Indicator | June 30, 2025 (USD Thousands) | December 31, 2024 (USD Thousands) | | :--- | :--- | :--- | | Total trade receivables | 848,264 | 827,051 | | Less: Impairment allowance | (6,822) | (6,656) | | **Net trade receivables** | **841,442** | **820,395** | - As of June 30, 2025, the carrying amount of trade receivables pledged as collateral increased to **$493.6 million**, a **34.5% increase** from $367.0 million as of December 31, 2024[47](index=47&type=chunk) [Notes Receivable](index=18&type=section&id=10.%20%E5%BA%94%E6%94%B6%E7%A5%A8%E6%8D%AE) As of June 30, 2025, the amount of notes receivable outstanding was $86.61 million, a 49.0% increase from December 31, 2024, with notes receivable measured at fair value through other comprehensive income Notes Receivable Amount | Indicator | June 30, 2025 (USD Thousands) | December 31, 2024 (USD Thousands) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Amount of notes receivable outstanding | 86,605 | 58,114 | 49.0% | - Notes receivable are measured at **fair value through other comprehensive income**[48](index=48&type=chunk) [Trade Payables](index=18&type=section&id=11.%20%E5%BA%94%E4%BB%98%E8%B4%A6%E6%AC%BE) As of June 30, 2025, total trade payables amounted to $890 million, a 1.94% increase from December 31, 2024, including notes payable of $46.35 million Total Trade Payables | Indicator | June 30, 2025 (USD Thousands) | December 31, 2024 (USD Thousands) | | :--- | :--- | :--- | | Trade payables | 843,721 | 821,874 | | Notes payable | 46,352 | 51,298 | | **Total** | **890,073** | **873,172** | [Financial Review](index=19&type=section&id=%E8%B4%A2%E5%8A%A1%E5%9B%9E%E9%A1%A7) [Financial Highlights](index=19&type=section&id=%E8%B4%A2%E5%8A%A1%E6%91%98%E8%A6%81_2) In the first half of 2025, the Group's revenue reached $2.2 billion, a 6.8% year-on-year increase (7.6% adjusted), outperforming the market by 450 basis points, primarily driven by the Asia Pacific region, with Adjusted EBITDA growing 16.8% to $230.4 million due to increased sales and improved efficiency, and cash balance increasing by $36.9 million to $459.2 million, with net cash from operating activities at $142.3 million - In the first half of 2025, revenue reached **$2.2 billion**, a **6.8% year-on-year increase** (7.6% adjusted), outperforming the market by **450 basis points**, primarily driven by the Asia Pacific region[52](index=52&type=chunk) - Adjusted EBITDA was **$230.4 million**, a **16.8% year-on-year increase**, with improved profitability mainly due to increased sales, efficiency, and performance[52](index=52&type=chunk) - Cash balance increased by **$36.9 million** to **$459.2 million**; net cash generated from operating activities was **$142.3 million**, net cash used in investing activities was **$105.7 million**, and net cash used in financing activities was **$11.7 million**[53](index=53&type=chunk)[78](index=78&type=chunk) [Operating Environment](index=19&type=section&id=%E7%BB%8F%E8%90%A5%E7%8E%AF%E5%A2%83) The global automotive market directly impacts the Group's business, influenced by macroeconomic factors such as consumer confidence, commodity prices, currency fluctuations, fuel prices, and regulatory environments, with global light vehicle production increasing by 3.1% in the first half of 2025, as growth in Asia Pacific and South America offset declines in North America and Europe, while US dollar fluctuations against RMB and Euro negatively affected revenue, and the Group successfully launched 31 new customer programs, including 23 new businesses and 21 pure electric vehicle projects - The global automotive market is influenced by macroeconomic factors such as **consumer confidence, commodity prices, currency, fuel price fluctuations, and the regulatory environment**[54](index=54&type=chunk) 2025 First Half Year-on-Year Change in Light Vehicle Production by Major Market | Region | Year-on-Year Change (%) | | :--- | :--- | | North America | (4.2)% | | China | 12.3% | | India | 3.7% | | Europe | (3.7)% | | South America | 8.9% | - In the first half of 2025, **US dollar exchange rate fluctuations against the RMB and Euro** had an unfavorable impact on the Group's revenue[56](index=56&type=chunk) - The Group successfully launched **31 new customer programs**, of which 23 were new business and 21 were pure EV projects[56](index=56&type=chunk) [Revenue Analysis](index=20&type=section&id=%E6%94%B6%E5%85%A5%E5%88%86%E6%9E%90) In the first half of 2025, revenue reached $2.2422 billion, a 6.8% year-on-year increase, primarily driven by increased global light vehicle production by OEMs and numerous new program launches, despite negative impacts from unfavorable foreign currency translation (USD appreciation against RMB) and commodity price reductions, resulting in an adjusted revenue growth of 7.6%, outperforming the market by 450 basis points, with Asia Pacific revenue growing 15.5%, North America 1.7%, and Europe, Middle East, Africa, and South America 9.4%, and Electric Power Steering (EPS) revenue increasing 8.6% as the main growth driver - In the first half of 2025, revenue was **$2.2422 billion**, a **6.8% year-on-year increase**, primarily driven by increased global light vehicle production by OEMs and new program launches[57](index=57&type=chunk) - Unfavorable foreign currency translation (USD appreciation against RMB) had a negative impact of approximately **$13.0 million** on revenue, with commodity price reductions further reducing revenue by **$2.4 million**[57](index=57&type=chunk) - After adjusting for unfavorable foreign currency translation and commodity price reductions, revenue increased by **7.6% year-on-year**, outperforming the market by **450 basis points**[57](index=57&type=chunk) [Revenue by Geographic Segment](index=21&type=section&id=%E6%8C%89%E5%9C%B0%E5%8C%BA%E5%88%86%E9%83%A8%E5%8A%83%E5%88%86%E7%9A%84%E6%94%B6%E5%85%A5) Asia Pacific revenue increased by 15.5% year-on-year, driven by new program launches and a 12.3% growth in Chinese OEM production, with an adjusted growth of 16.7%, outperforming the market by 870 basis points, while North America revenue grew 1.7% despite a 4.2% regional production decline due to strong Nexteer customer program performance, and Europe, Middle East, Africa, and South America revenue increased 9.4%, benefiting from the resolution of Brazil flood impacts and European program launches, with an adjusted growth of 10.8%, outperforming the market by 1,330 basis points - North America segment revenue increased by **1.7% year-on-year**, primarily due to strong Nexteer customer program performance, despite a **4.2% decline** in regional light vehicle production[59](index=59&type=chunk) - Asia Pacific revenue increased by **15.5% year-on-year**, driven by new program launches and a **12.3% growth** in Chinese OEM production; adjusted growth was **16.7%**, outperforming the market by **870 basis points**[59](index=59&type=chunk) - Europe, Middle East, Africa, and South America segment revenue increased by **9.4% year-on-year**, benefiting from the resolution of Brazil flood impacts and European program launches; adjusted growth was **10.8%**, outperforming the market by **1,330 basis points**[61](index=61&type=chunk) [Revenue by Product](index=22&type=section&id=%E6%8C%89%E4%BA%A7%E5%93%81%E5%8A%83%E5%88%86%E7%9A%84%E6%94%B6%E5%85%A5) Electric Power Steering (EPS) revenue increased by 8.6% to $1.525 billion, primarily driven by rising customer demand in the Asia Pacific region, while Column and Intermediate Shaft (CIS) revenue grew 2.9%, Driveline (DL) revenue increased 3.8%, and Hydraulic Power Steering (HPS) revenue rose 1.7% - EPS revenue increased by **8.6% to $1.525 billion**, primarily driven by rising customer demand in the Asia Pacific region[60](index=60&type=chunk) - CIS revenue increased by **2.9%**, DL revenue increased by **3.8%**, and HPS revenue increased by **1.7%**[60](index=60&type=chunk) [Net Profit and Gross Profit](index=23&type=section&id=%E5%87%80%E5%88%A9%E6%B6%A6%E5%8F%8A%E6%AF%9B%E5%88%A9) For the six months ended June 30, 2025, net profit attributable to equity holders of the Company was $63.5 million, representing 2.8% of total revenue, a significant increase of $47.8 million from $15.7 million in the prior year, while gross profit grew 22.7% to $258.9 million, with the gross profit margin improving from 10.0% to 11.5%, mainly due to increased revenue and improved operational performance - Net profit attributable to equity holders of the Company was **$63.5 million**, representing **2.8% of total revenue**, an increase of **$47.8 million** from the prior year[62](index=62&type=chunk) - Gross profit increased by **22.7% to $258.9 million**, with the gross profit margin improving from **10.0% to 11.5%**, primarily due to increased revenue and improved operational performance[65](index=65&type=chunk) [Cost and Expense Analysis](index=23&type=section&id=%E6%88%90%E6%9C%AC%E5%8F%8A%E5%BC%80%E6%94%AF%E5%88%86%E6%9E%90) In the first half of 2025, the cost of sales as a percentage of revenue decreased from 90.0% to 88.5% compared to the prior year, engineering and product development costs decreased by 14.9% to $75.4 million, representing 3.4% of revenue, mainly due to a significant reduction in intangible asset impairment, while selling, distribution, and administrative expenses increased by 11.9% to $92.2 million, representing 4.1% of revenue [Cost of Sales](index=23&type=section&id=%E9%94%80%E5%94%AE%E6%88%90%E6%9C%AC) Cost of sales increased by 5.0% year-on-year to $1.9833 billion, with raw material costs, the largest component, rising 10.5% to $1.4796 billion, representing 66.0% of revenue, primarily due to increased revenue and higher tariff costs, while the cost of sales as a percentage of revenue decreased from 90.0% to 88.5% compared to the prior year - Cost of sales increased by **5.0% to $1.9833 billion** year-on-year[62](index=62&type=chunk) - Raw material costs increased by **10.5% to $1.4796 billion**, representing **66.0% of revenue**, primarily due to increased revenue and higher tariff costs[62](index=62&type=chunk) - The cost of sales as a percentage of revenue decreased from **90.0% to 88.5%** compared to the prior year[64](index=64&type=chunk) [Engineering and Product Development Costs](index=24&type=section&id=%E5%B7%A5%E7%A8%8B%E5%8F%8A%E4%BA%A7%E5%93%81%E5%BC%80%E5%8F%91%E6%88%90%E6%9C%AC) Engineering and product development costs decreased by 14.9% to $75.4 million, representing 3.4% of revenue, primarily due to a significant reduction in product development intangible asset impairment from $7.3 million in the prior year to $1.6 million, with total investment decreasing by 4.5% to $129.3 million - Engineering and product development costs decreased by **14.9% to $75.4 million**, representing **3.4% of revenue**[67](index=67&type=chunk) - Impairment of product development intangible assets significantly decreased from **$7.3 million** in the prior year to **$1.6 million**[67](index=67&type=chunk) - Total investment in engineering and product development costs decreased by **4.5% to $129.3 million**[68](index=68&type=chunk) [Selling, Distribution and Administrative Expenses](index=24&type=section&id=%E9%94%80%E5%94%AE%E3%80%81%E5%88%86%E9%94%80%E5%8F%8A%E8%A1%8C%E6%94%BF%E5%BC%80%E6%94%AF) Selling, distribution, and general and administrative expenses increased by 11.9% to $92.2 million, representing 4.1% of revenue - Selling, distribution, and general and administrative expenses increased by **11.9% to $92.2 million**, representing **4.1% of revenue**[69](index=69&type=chunk) [Net Other Income](index=24&type=section&id=%E5%85%B6%E4%BB%96%E6%94%B6%E7%9B%8A%E5%87%80%E9%A2%9D_%E8%B4%A2%E5%8A%A1%E5%9B%9E%E9%A1%A7) For the six months ended June 30, 2025, net other income was $1.8 million, an increase of $0.4 million from $1.4 million in the prior year, primarily due to reasons consistent with the previous period - Net other income was **$1.8 million**, an increase of **$0.4 million** from the prior year[70](index=70&type=chunk) [Finance Income/Costs](index=25&type=section&id=%E8%9E%8D%E8%B5%84%E6%94%B6%E7%9B%8A%2F%E6%88%90%E6%9C%AC_%E8%B4%A2%E5%8A%A1%E5%9B%9E%E9%A1%A7) For the six months ended June 30, 2025, the Group achieved net finance income of $0.8 million, a positive shift from a net finance cost of $2.2 million in the prior year, mainly due to reduced finance costs resulting from fluctuations in short-term borrowings - The Group achieved net finance income of **$0.8 million**, compared to a net finance cost of **$2.2 million** in the prior year[71](index=71&type=chunk) - The reduction in finance costs was primarily due to **fluctuations in short-term borrowings**[71](index=71&type=chunk) [Share of Results of Joint Ventures](index=25&type=section&id=%E5%88%86%E4%BD%94%E5%90%88%E8%90%A5%E4%BC%81%E4%B8%9A%E4%B8%9A%E7%BB%A9) For the six months ended June 30, 2025, the Group's share of results of joint ventures (Chongqing Nexteer) was $1.8 million, slightly higher than $1.7 million in the prior year - The Group's share of results of joint ventures (Chongqing Nexteer) was **$1.8 million**, compared to **$1.7 million** in the prior year[72](index=72&type=chunk) [Income Tax Expense](index=25&type=section&id=%E6%89%80%E5%BE%97%E7%A8%8E%E5%BC%80%E6%94%AF_%E8%B4%A2%E5%8A%A1%E5%9B%9E%E9%A1%A7) For the six months ended June 30, 2025, income tax expense was $26.7 million, representing 27.9% of profit before tax, a decrease from 43.5% in the prior year, with the Group assessing Pillar Two legislation and expecting no significant Pillar Two income tax liabilities due to compliance with transitional safe harbor rules in most jurisdictions, while the potential impact of the US Inflation Reduction Act is still under evaluation - Income tax expense was **$26.7 million**, representing **27.9% of profit before tax**, a decrease from **43.5%** in the prior year[73](index=73&type=chunk) - The Group has assessed Pillar Two legislation and believes that the effective tax rates in most jurisdictions where it operates comply with **transitional safe harbor rules**, thus no significant Pillar Two income tax liabilities are expected[74](index=74&type=chunk) - The potential impact of the **US Inflation Reduction Act** is still under evaluation[75](index=75&type=chunk) [Provisions](index=26&type=section&id=%E6%8B%A8%E5%A4%87) As of June 30, 2025, the Group's total provisions amounted to $110.9 million, an increase of $11.2 million from December 31, 2024, primarily due to a net change in warranty provision reflecting $26.7 million in new warranty expenses - As of June 30, 2025, the Group's total provisions amounted to **$110.9 million**, an increase of **$11.2 million** from December 31, 2024[76](index=76&type=chunk) - The increase in provisions was primarily due to a net change in warranty provision, reflecting **$26.7 million in new warranty expenses**[76](index=76&type=chunk) [Liquidity and Capital Resources](index=26&type=section&id=%E6%B5%81%E5%8A%A8%E8%B5%84%E9%87%91%E5%8F%8A%E8%B5%84%E6%9C%AC%E8%B5%84%E6%BA%90) [Cash Flow](index=26&type=section&id=%E7%8E%B0%E9%87%91%E6%B5%81%E9%87%8F) The Group's business requires substantial working capital, primarily met through cash generated from operations and borrowings from third-party financial institutions; in the first half of 2025, net cash generated from operating activities was $142.3 million, a $10.1 million decrease year-on-year due to unfavorable net working capital offsetting profit increases, net cash used in investing activities was $105.7 million, a $49.0 million decrease year-on-year reflecting reduced capital expenditures for property, plant and equipment and intangible assets, and net cash used in financing activities was $11.7 million, an $8.0 million decrease year-on-year primarily due to lower dividend payments to non-controlling interests in the prior year - The Group primarily meets its working capital and other capital requirements through **cash generated from operations and borrowings from third-party financial institutions**[77](index=77&type=chunk) 2025 First Half Cash Flow | Cash Flow Category | 2025 First Half (USD Thousands) | 2024 First Half (USD Thousands) | | :--- | :--- | :--- | | Net cash generated from operating activities | 142,316 | 152,387 | | Net cash used in investing activities | (105,650) | (154,648) | | Net cash used in financing activities | (11,730) | (19,703) | | **Net increase (decrease) in cash and cash equivalents** | **24,936** | **(21,964)** | - Net cash generated from operating activities decreased by **$10.1 million**, primarily due to **unfavorable net working capital** offsetting the increase in profit[79](index=79&type=chunk) - Net cash used in investing activities decreased by **$49.0 million**, primarily reflecting reduced capital expenditures for property, plant and equipment and intangible assets[81](index=81&type=chunk) - Net cash used in financing activities decreased by **$8.0 million**, primarily due to lower dividend payments to non-controlling interests in the prior year[82](index=82&type=chunk) [Debt](index=27&type=section&id=%E5%80%BA%E5%8A%A1) As of June 30, 2025, the Group's total borrowings amounted to $48.7 million, an increase of $0.9 million from December 31, 2024, primarily due to foreign exchange impacts on RMB-denominated China term loan borrowings, with most borrowings being non-current and maturing mainly within 2 to 5 years Total Borrowings and Maturity Profile | Indicator | June 30, 2025 (USD Thousands) | December 31, 2024 (USD Thousands) | | :--- | :--- | :--- | | Current borrowings | 139 | 137 | | Non-current borrowings | 48,541 | 47,625 | | **Total borrowings** | **48,680** | **47,762** | | **Maturity profile** | | | | Within 1 year | 139 | 137 | | 1 to 2 years | 139 | 137 | | 2 to 5 years | 48,402 | 47,488 | - Total borrowings increased by **$0.9 million**, primarily due to **foreign exchange impacts** on RMB-denominated China term loan borrowings[83](index=83&type=chunk) [Pledge of Assets](index=28&type=section&id=%E8%B5%84%E4%BA%A7%E6%8A%B5%E6%8A%BC) As of June 30, 2025, the Group's total assets pledged as collateral amounted to approximately $835.6 million, an increase of $107.7 million from December 31, 2024, primarily related to increased balances of the underlying pledged assets, which include trade receivables, inventories, and property, plant and equipment - As of June 30, 2025, the Group's total assets pledged as collateral amounted to approximately **$835.6 million**, an increase of **$107.7 million** from December 31, 2024[85](index=85&type=chunk) - Pledged assets include **trade receivables, inventories, and property, plant and equipment**[85](index=85&type=chunk) [Foreign Exchange Fluctuation Risk and Related Hedging](index=28&type=section&id=%E6%B1%87%E7%8E%87%E6%B3%A2%E5%8A%A8%E9%A3%8E%E9%99%A9%E5%8F%8A%E7%9B%B8%E5%85%B3%E5%AF%B9%E5%86%B2) The Group mitigates foreign currency risk by matching material purchases and finished goods sales in the same currency and regularly monitors remaining foreign currency exposure to reduce operational foreign currency fluctuation risk - The Group limits foreign currency risk by **matching material purchases and finished goods sales in the same currency**[86](index=86&type=chunk) - The Group regularly monitors its remaining foreign currency exposure to **reduce foreign currency fluctuation risk** in its operations[86](index=86&type=chunk) [Gearing Ratio](index=29&type=section&id=%E8%B5%84%E6%9C%AC%E8%B4%9F%E5%80%BA%E7%8E%87) As of June 30, 2025, the gearing ratio was 2.3%, a 10 basis point decrease from 2.4% as of December 31, 2024 - As of June 30, 2025, the gearing ratio was **2.3%**, a **10 basis point decrease** from 2.4% as of December 31, 2024[87](index=87&type=chunk) [Other Information](index=29&type=section&id=%E5%85%B6%E4%BB%96%E8%B5%84%E6%96%99) [Future Outlook](index=29&type=section&id=%E6%9C%AA%E6%9D%A5%E5%89%8D%E6%99%AF) The Group is committed to maintaining its market leadership in global motion control technologies, including Steer-by-Wire, by aligning with major trends such as Software-Defined Vehicles, Automation, and Electrification, and leveraging its five key strengths—innovation, product portfolio depth, system integration experience, in-house R&D capabilities, and global manufacturing footprint—to enhance its future prospects, with no significant future investment or capital asset plans for the remainder of the year - The Group is committed to maintaining its market leadership in **global motion control technologies**, including Steer-by-Wire[88](index=88&type=chunk) - The Group aims to enhance its future prospects by aligning with major trends such as **Software-Defined Vehicles, Automation, and Electrification**, and leveraging its five key strengths: **innovation, product portfolio depth, system integration experience, in-house R&D capabilities, and global manufacturing footprint**[88](index=88&type=chunk)[90](index=90&type=chunk) - As of June 30, 2025, there are **no future plans for significant investments or capital assets** for the remainder of the year[89](index=89&type=chunk) [Employee Remuneration Policy](index=30&type=section&id=%E5%83%B1%E5%93%A1%E8%96%AA%E9%85%AC%E6%94%BF%E7%AD%96) As of June 30, 2025, the Group employed approximately 12,000 full-time employees and 1,800 contract employees, with a remuneration policy based on individual performance and Group results, offering retirement benefits, disability benefits, workers' compensation, and employee incentive plans to attract, retain, and motivate staff while enhancing shareholder value - As of June 30, 2025, the Group had approximately **12,000 full-time employees** and approximately **1,800 contract employees**[91](index=91&type=chunk)[92](index=92&type=chunk) - The remuneration policy is based on **individual employee performance and Group results**, and includes retirement benefits, disability benefits, workers' compensation, and employee incentive plans[91](index=91&type=chunk) [Corporate Governance Practices](index=30&type=section&id=%E4%BC%81%E4%B8%9A%E7%AE%A1%E6%B2%BB%E5%AE%9E%E5%8A%A1) The Company is committed to maintaining high standards of corporate governance, having adopted internal control and corporate governance policies in accordance with the Corporate Governance Code in Appendix C1 of the Hong Kong Listing Rules; despite the Chairman and Chief Executive Officer roles being held by the same individual, which deviates from the Code, the Board believes this arrangement provides consistent leadership and ensures significant decisions are made in consultation with the Board, with the Chairman responsible for leading and overseeing Board operations to ensure alignment with the Group's best interests - The Company has adopted **internal control and corporate governance policies** in accordance with the Corporate Governance Code in Appendix C1 of the Listing Rules on The Stock Exchange of Hong Kong Limited[93](index=93&type=chunk) - The roles of Chairman and Chief Executive Officer are held by the same individual, which deviates from Code Provision C.2.1 of Part 2 of Appendix C1 of the Listing Rules, but the Board believes this arrangement provides **consistent leadership** and ensures significant decisions are made in consultation with the Board[95](index=95&type=chunk) - The Chairman is responsible for **leading and overseeing the Board's operations**, ensuring they align with the Group's best interests, and fostering an open culture with full director participation[96](index=96&type=chunk) [Compliance with the Model Code for Securities Transactions by Directors](index=31&type=section&id=%E9%81%B5%E5%AE%88%E8%91%A3%E4%BA%8B%E8%BF%9B%E8%A1%8C%E8%AF%81%E5%88%B8%E4%BA%A4%E6%98%93%E7%9A%84%E6%93%8D%E5%AE%88%E5%AE%88%E5%88%99) The Company has adopted the Model Code set out in Appendix C3 of the Listing Rules as its code of conduct for directors' securities transactions and confirmed compliance by all directors in the first half of 2025, also establishing a code of conduct for employees with access to inside information, no less stringent than the Model Code, and providing regular training to ensure understanding of disclosure duties and responsibilities - The Company has adopted the **Model Code set out in Appendix C3 of the Listing Rules** as its code of conduct for directors' securities transactions and confirmed that all directors complied with the Model Code in the first half of 2025[97](index=97&type=chunk) - The Company has also established a code of conduct for employees who may have access to inside information, which is **no less stringent than the Model Code**, and provides regular training to help employees understand their disclosure duties and responsibilities[97](index=97&type=chunk)[98](index=98&type=chunk) [Risk Management and Internal Control Systems](index=32&type=section&id=%E9%A3%8E%E9%99%A9%E7%AE%A1%E7%90%86%E5%8F%8A%E5%86%85%E9%83%A8%E7%9B%91%E6%8E%A7%E5%88%B6%E5%BA%A6) The Company has adopted risk management and internal control systems and related procedures, and regularly reviews their effectiveness - The Company has adopted **risk management and internal control systems and related procedures**, and regularly reviews their effectiveness[99](index=99&type=chunk) [Interim Dividends](index=32&type=section&id=%E4%B8%AD%E6%9C%9F%E8%82%A1%E6%81%AF) The Board does not recommend the payment of any interim dividend for the six months ended June 30, 2025 - The Board does not recommend the payment of any **interim dividend** for the six months ended June 30, 2025[100](index=100&type=chunk) [Review by the Audit and Compliance Committee](index=32&type=section&id=%E5%AE%A1%E6%A0%B8%E5%8F%8A%E5%90%88%E8%A7%84%E5%A7%94%E5%91%98%E4%BC%9A%E5%AE%A1%E9%98%85) The Audit and Compliance Committee has reviewed the Company's unaudited condensed financial information for the six months ended June 30, 2025, with management and the external auditor, and there were no disagreements between the parties regarding the accounting treatments adopted - The Audit and Compliance Committee has reviewed the Company's **unaudited condensed financial information** for the six months ended June 30, 2025, with management and the external auditor[101](index=101&type=chunk) - There were **no disagreements** between the Audit and Compliance Committee or the auditor regarding the accounting treatments adopted by the Company[101](index=101&type=chunk) [Purchase, Sale or Redemption of Listed Securities by the Company](index=32&type=section&id=%E6%9C%AC%E5%85%AC%E5%8F%B8%E8%B4%AD%E4%B9%B0%E3%80%81%E5%87%BA%E5%94%AE%E6%88%96%E8%B5%8E%E5%9B%9E%E4%B8%8A%E5%B8%82%E8%AF%81%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**[102](index=102&type=chunk) [Subsequent Events](index=32&type=section&id=%E5%85%B6%E5%90%8E%E4%BA%8B%E9%A1%B9) No significant subsequent events occurred after June 30, 2025, and up to the date of this announcement - **No significant subsequent events** occurred after June 30, 2025, and up to the date of this announcement[103](index=103&type=chunk) [Forward-Looking Statements](index=33&type=section&id=%E5%89%8D%E7%9E%BB%E6%80%A7%E9%99%88%E8%BF%B0) The forward-looking statements and opinions contained in this announcement are based on current plans, estimates, and projections, involving risks and uncertainties that could cause actual results to differ materially, and the Company, its directors, and employees assume no obligation to correct or update these statements, nor any liability for their non-realization or inaccuracy - The forward-looking statements and opinions in this announcement are based on **current plans, estimates, and projections**, involving risks and uncertainties that could cause actual results to differ materially[104](index=104&type=chunk) - The Company, its directors, and employees assume **no obligation to correct or update these statements**, nor any liability for their non-realization or inaccuracy[104](index=104&type=chunk)

[Summary of Key Operations and Financial Performance](index=1&type=section&id=Summary%20of%20Key%20Operations%20and%20Financial%20Performance) During the reporting period, the company's key operating and financial indicators declined, with average realized crude oil prices, total crude oil production, net production, and net sales all decreasing year-over-year, leading to a significant reduction in total revenue and operating profit, and an expanded loss for the period Summary of Key Operating and Financial Performance for the Six Months Ended June 30, 2025 | Indicator | As of June 30, 2025 (USD/barrel or barrels/RMB thousands) | As of June 30, 2024 (USD/barrel or barrels/RMB thousands) | Change | Change Percentage | | :--- | :--- | :--- | :--- | :--- | | Average Realized Crude Oil Price (USD/barrel) | 69.63 | 81.31 | (11.68) | (14.4%) | | Total Crude Oil Production (barrels) | 1,522,118 | 1,698,093 | (175,975) | (10.4%) | | Net Crude Oil Production (barrels) | 729,939 | 797,321 | (67,382) | (8.5%) | | Net Crude Oil Sales (barrels) | 731,238 | 798,902 | (67,664) | (8.5%) | | Daily Average Net Crude Oil Production (barrels) | 4,033 | 4,381 | (348) | (7.9%) | | Number of Wells Drilled During the Period (Total) | – | – | – | Not applicable | | Total Revenue (RMB thousands) | 365,702 | 461,288 | (95,586) | (20.7%) | | Operating Profit (RMB thousands) | 55,171 | 113,611 | (58,440) | (51.4%) | | Loss for the Period (RMB thousands) | (148,019) | (110,090) | (37,929) | 34.5% | | Basic Loss Per Share (RMB per share) | (0.04) | (0.03) | (0.01) | 33.3% | | EBITDA (RMB thousands) | 214,001 | 286,652 | (72,651) | (25.3%) | | Adjusted EBITDA (RMB thousands) | 213,183 | 281,215 | (68,032) | (24.2%) | [Condensed Interim Consolidated Financial Statements](index=2&type=section&id=Condensed%20Interim%20Consolidated%20Financial%20Statements) This section presents the condensed interim consolidated statement of comprehensive income and statement of financial position for the six months ended June 30, 2025, reflecting the company's financial performance and position, with revenue declining, losses expanding, current liabilities exceeding current assets, and negative shareholders' equity [Condensed Interim Consolidated Statement of Comprehensive Income](index=2&type=section&id=Condensed%20Interim%20Consolidated%20Statement%20of%20Comprehensive%20Income) For the six months ended June 30, 2025, the company's revenue decreased by 20.7% year-over-year to **RMB 365,702 thousand**, with loss for the period expanding to **RMB 148,019 thousand** and basic loss per share at **RMB 0.04** Summary of Condensed Interim Consolidated Statement of Comprehensive Income (RMB thousands) | Indicator | As of June 30, 2025 (Unaudited) | As of June 30, 2024 (Unaudited) | | :--- | :--- | :--- | | Revenue from contracts with customers | 365,702 | 461,288 | | Depreciation, depletion and amortization | (158,830) | (173,041) | | Taxes (other than income tax) | (7,158) | (24,949) | | Staff costs | (46,337) | (46,177) | | Purchases, services and other direct costs | (110,811) | (100,640) | | Other gains/(losses), net | 2,400 | 7,300 | | Interest income | 17 | 85 | | Finance costs | (184,520) | (193,884) | | Loss before income tax | (129,332) | (80,188) | | Income tax expense | (18,687) | (29,902) | | Loss for the period attributable to owners of the Company | (148,019) | (110,090) | | Other comprehensive income for the period (after tax) | 11,845 | (14,865) | | Total comprehensive income for the period attributable to owners of the Company | (136,174) | (124,955) | | Basic loss per share (RMB) | (0.04) | (0.03) | | Diluted loss per share (RMB) | (0.04) | (0.03) | [Condensed Interim Consolidated Statement of Financial Position](index=4&type=section&id=Condensed%20Interim%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the company's total assets were **RMB 1,266,126 thousand**, a decrease of approximately **8.4%** from the end of 2024, with current liabilities exceeding current assets by **RMB 203,542 thousand** and total shareholders' deficit expanding to **RMB 2,405,999 thousand**, indicating severe liquidity and solvency pressures Summary of Condensed Interim Consolidated Statement of Financial Position (RMB thousands) | Indicator | As of June 30, 2025 (Unaudited) | As of December 31, 2024 (Audited) | | :--- | :--- | :--- | | **Assets** | | | | Total non-current assets | 1,078,458 | 1,168,778 | | Total current assets | 187,668 | 213,415 | | **Total assets** | **1,266,126** | **1,382,193** | | **Equity** | | | | Equity attributable to owners of the Company (Total shareholders' deficit) | (2,405,999) | (2,269,825) | | **Liabilities** | | | | Total non-current liabilities | 3,280,915 | 3,216,406 | | Total current liabilities | 391,210 | 435,612 | | **Total liabilities** | **3,672,125** | **3,652,018** | | Net current liabilities | 203,542 | 222,197 | [Notes to the Financial Statements](index=6&type=section&id=Notes%20to%20the%20Financial%20Statements) This section provides detailed notes to the financial statements, covering general information, accounting policies, basis of preparation, segment information, taxes, loss per share, dividend policy, receivables and payables, borrowings, and litigation, highlighting significant uncertainties regarding the going concern assumption and measures taken to address liquidity pressure [General Information](index=6&type=section&id=General%20Information) MI Energy Holdings Limited, a Cayman Islands-registered company, primarily engages in crude oil exploration, development, production, and sales in China, is indirectly controlled by Far East Energy Limited, with the Da'an Product Sharing Contract extended to February 29, 2028 - The company's principal business is crude oil exploration, development, production, and sales in China, conducted through product sharing contracts[8](index=8&type=chunk) - The expiry date of the Da'an Product Sharing Contract has been extended from December 31, 2024, to **February 29, 2028**[8](index=8&type=chunk)[37](index=37&type=chunk) - The company is indirectly controlled by Far East Energy Limited (FEEL), which holds **43.39%** of the company's share capital, with Mr. Zhang Ruilin, Mr. Zhao Jiangwei, and Ms. Zhao Jiangbo as ultimate beneficial owners[9](index=9&type=chunk) [Adoption of International Financial Reporting Standards](index=6&type=section&id=Adoption%20of%20International%20Financial%20Reporting%20Standards) The accounting policies adopted for preparing these condensed interim consolidated financial information are consistent with the previous year, incorporating only new standards effective from January 1, 2025, which have no material impact on the current period's financial information - The accounting policies adopted for preparing these condensed interim consolidated financial information are consistent with those used for the annual consolidated financial statements for the year ended December 31, 2024[11](index=11&type=chunk) - New standards effective from **January 1, 2025**, have been adopted, but these amendments will not impact the Group's condensed interim consolidated financial information[11](index=11&type=chunk) [Basis of Preparation](index=7&type=section&id=Basis%20of%20Preparation) These condensed interim consolidated financial information are prepared in accordance with IAS 34 "Interim Financial Reporting" and comply with IFRS and Hong Kong Companies Ordinance disclosure requirements, despite significant going concern uncertainties, with management implementing cash flow forecasts and mitigation measures, though future outcomes remain inherently uncertain [Statement of Compliance](index=7&type=section&id=Statement%20of%20Compliance) - The condensed interim consolidated financial information is prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting"[13](index=13&type=chunk) - The report complies with International Financial Reporting Standards, International Accounting Standards and Interpretations, and the disclosure requirements of the Hong Kong Companies Ordinance and the Listing Rules of the Stock Exchange[14](index=14&type=chunk) [Basis of Measurement](index=7&type=section&id=Basis%20of%20Measurement) - The condensed interim consolidated financial information is prepared on a historical cost basis, except for certain financial instruments[15](index=15&type=chunk) - The preparation process requires the use of certain critical accounting estimates and management judgments[15](index=15&type=chunk) [Going Concern Assumption](index=7&type=section&id=Going%20Concern%20Assumption) - As of June 30, 2025, the company reported a net loss of **RMB 148.0 million**, with current liabilities exceeding current assets by **RMB 203.5 million**, and accumulated shareholders' deficit of **RMB 2,406.0 million**[16](index=16&type=chunk) - The company's total borrowings amounted to **RMB 3,002.4 million**, with cash and cash equivalents of only **RMB 51.9 million**, indicating significant liquidity pressure[16](index=16&type=chunk) - Management has prepared cash flow forecasts up to **December 31, 2026**, and plans to mitigate liquidity pressure by maintaining production, improving operational efficiency, reducing discretionary expenditures, and seeking alternative financing[17](index=17&type=chunk)[19](index=19&type=chunk) - The ability to continue as a going concern depends on actual crude oil prices aligning with forecast levels and the ability to obtain additional financing[18](index=18&type=chunk)[20](index=20&type=chunk) [Segment Information](index=9&type=section&id=Segment%20Information) The company's Chief Operating Decision Maker (CODM) assesses performance geographically, identifying a single operating segment in China focused on oil exploration, development, production, and sales, with all revenue derived from China and primarily from PetroChina Company Limited [Segment Description](index=9&type=section&id=Segment%20Description) - The CODM is the company's Executive Director and President, responsible for reviewing internal reports to assess performance and allocate resources[21](index=21&type=chunk) - The Group has only one operating segment, primarily engaged in oil exploration, development, production, and sales in China[21](index=21&type=chunk) [Revenue from Contracts with Customers](index=9&type=section&id=Revenue%20from%20Contracts%20with%20Customers) Analysis of Revenue from Contracts with Customers by Category (RMB thousands) | Timing of revenue recognition | As of June 30, 2025 | As of June 30, 2024 | | :--- | :--- | :--- | | At a point in time — Sales of crude oil | 365,702 | 461,231 | | Over a period of time — Provision of services | – | 57 | | **Total** | **365,702** | **461,288** | - For the six months ended June 30, 2025, **100%** of the company's crude oil sales revenue was derived from PetroChina Company Limited[23](index=23&type=chunk) [Geographical Information](index=9&type=section&id=Geographical%20Information) - For the six months ended June 30, 2025, all of the Group's revenue was derived from China[25](index=25&type=chunk) - The Group's non-current assets (excluding financial assets measured at fair value) are primarily located in China[25](index=25&type=chunk) [Taxes (Other than Income Tax)](index=10&type=section&id=Taxes%20%28Other%20than%20Income%20Tax%29) For the six months ended June 30, 2025, the company's taxes (other than income tax) amounted to **RMB 7,158 thousand**, a significant year-over-year decrease of **71.1%**, primarily due to reduced crude oil prices leading to lower special oil gain levy Taxes (Other than Income Tax) for the Six Months Ended June 30, 2025 (RMB thousands) | Tax category | As of June 30, 2025 (Unaudited) | As of June 30, 2024 (Unaudited) | | :--- | :--- | :--- | | Special oil gain levy | 5,976 | 23,469 | | City construction tax and education surcharge | 1,160 | 1,458 | | Others | 22 | 22 | | **Total** | **7,158** | **24,949** | - The threshold for special oil gain levy is **USD 65/barrel**. The special oil gain levy for the current period was **RMB 6.0 million**, a significant decrease from **RMB 23.5 million** in the prior period, primarily due to lower crude oil prices[27](index=27&type=chunk)[50](index=50&type=chunk) [Income Tax Expense](index=10&type=section&id=Income%20Tax%20Expense) For the six months ended June 30, 2025, the company's income tax expense was **RMB 18,687 thousand**, a **37.5%** year-over-year decrease, primarily influenced by changes in current and deferred income tax Income Tax Expense for the Six Months Ended June 30, 2025 (RMB thousands) | Tax category | As of June 30, 2025 (Unaudited) | As of June 30, 2024 (Unaudited) | | :--- | :--- | :--- | | Current income tax | 37,117 | 51,906 | | Deferred income tax | (18,430) | (22,004) | | **Total** | **18,687** | **29,902** | - Income tax expense decreased by **RMB 11.2 million** or **37.5%** year-over-year[56](index=56&type=chunk) [Loss Per Share](index=11&type=section&id=Loss%20Per%20Share) For the six months ended June 30, 2025, both basic and diluted loss per share were **RMB 0.04**, an increase from **RMB 0.03** in the prior period, reflecting the expanded loss for the current period Basis for Loss Per Share Calculation | Indicator | As of June 30, 2025 (Unaudited) | As of June 30, 2024 (Unaudited) | | :--- | :--- | :--- | | Loss attributable to owners of the Company (RMB thousands) | (148,019) | (110,090) | | Weighted average number of ordinary shares in issue (thousands) | 3,386,526 | 3,386,526 | | Basic loss per share (RMB) | (0.04) | (0.03) | | Diluted loss per share (RMB) | (0.04) | (0.03) | - As a loss was recorded for the period, the anti-dilutive effect of share options was not considered in calculating diluted loss per share, thus diluted loss per share is the same as basic loss per share[29](index=29&type=chunk) [Dividends](index=11&type=section&id=Dividends) The Board did not recommend the payment of an interim dividend for the six months ended June 30, 2025, consistent with the prior period - The Board did not recommend the payment of an interim dividend for the six months ended June 30, 2025[30](index=30&type=chunk)[72](index=72&type=chunk) [Trade and Other Receivables](index=12&type=section&id=Trade%20and%20Other%20Receivables) As of June 30, 2025, the company's trade and other receivables aging analysis shows most receivables are within six months, with credit terms of one to six months, maximum credit risk exposure equal to the carrying value of receivables, no collateral held, and receivables under the Da'an Product Sharing Contract pledged as security for borrowings - The company typically grants credit terms of **1 to 6 months** for trade receivables[32](index=32&type=chunk) - Receivables under the Da'an Product Sharing Contract have been pledged as security for borrowings[34](index=34&type=chunk) - No impairment losses on trade receivables were recognized, as the assessed expected credit losses were not material[33](index=33&type=chunk) [Trade and Other Payables](index=12&type=section&id=Trade%20and%20Other%20Payables) As of June 30, 2025, the company's total trade and other payables were **RMB 79,158 thousand**, a decrease from **RMB 139,722 thousand** at the end of 2024, with most payables aged within six months Aging Analysis of Trade and Other Payables as of June 30, 2025 (RMB thousands) | Aging | As of June 30, 2025 (Unaudited) | As of December 31, 2024 (Audited) | | :--- | :--- | :--- | | Within 6 months | 65,961 | 101,428 | | 6 months to 1 year | 944 | 17,587 | | 1 to 2 years | 133 | 7,866 | | 2 to 3 years | 1,553 | 1,241 | | More than 3 years | 10,567 | 11,600 | | **Total** | **79,158** | **139,722** | [Borrowings](index=13&type=section&id=Borrowings) As of June 30, 2025, the company's total borrowings were **RMB 3,000,273 thousand**, with **RMB 151,993 thousand** due within one year, following a debt restructuring that capitalized accrued interest on cross-defaulted borrowings and 2022 senior notes, waived penalty interest, revised new secured borrowing interest rates to **5% or 11%**, made 2024 senior notes non-interest bearing for the remaining term, and linked repayment dates to the Da'an Product Sharing Contract extension Composition of Borrowings as of June 30, 2025 (RMB thousands) | Borrowing category | As of June 30, 2025 (Unaudited) | As of December 31, 2024 (Audited) | | :--- | :--- | :--- | | Secured borrowings | 1,107,122 | 1,161,875 | | Senior notes | 1,376,715 | 1,305,374 | | Interest payable | 516,436 | 449,880 | | Derivative component | 2,104 | 2,933 | | **Total** | **3,002,377** | **2,919,062** | | Less: Current portion | (151,993) | (133,217) | | **Non-current portion** | **2,850,384** | **2,786,845** | - The company has completed debt restructuring, capitalizing accrued unpaid interest on cross-defaulted borrowings and 2022 senior notes, and waiving penalty interest[36](index=36&type=chunk) - The annual interest rate for new secured borrowings has been revised to **5% or 11%**, and the 2024 senior notes will not accrue interest for the remaining repayment period[36](index=36&type=chunk) - Repayment dates are linked to the extension of the Da'an Product Sharing Contract, with further deferral if the contract is extended beyond **March 1, 2028**[40](index=40&type=chunk) [Litigation](index=14&type=section&id=Litigation) The company is involved in two legal disputes with a power supplier, with total claims of approximately **RMB 20.5 million**, of which **RMB 14.1 million** was included in trade and other payables as of June 30, 2025, and management believes the likelihood of significant economic outflow is remote - The company faces two legal disputes related to a power supplier, with total claims of approximately **RMB 20.5 million**[38](index=38&type=chunk) - As of June 30, 2025, **RMB 14.1 million** has been included in trade and other payables in the condensed interim consolidated statement of financial position[38](index=38&type=chunk) - Management believes the probability of a significant outflow of economic benefits due to the litigation is remote[39](index=39&type=chunk) [Management Discussion and Analysis](index=15&type=section&id=Management%20Discussion%20and%20Analysis) This section provides a detailed review of the company's business performance, financial condition, and outlook for the first half of 2025, highlighting significant declines in revenue and profit, and expanded losses due to lower international crude oil prices and production, while the company actively addresses macroeconomic challenges through cost control and technological innovation for sustainable development, facing market risks from crude oil prices and exchange rates [Business Review and Outlook](index=15&type=section&id=Business%20Review%20and%20Outlook) In the first half of 2025, the international crude oil market experienced ample supply and year-over-year price declines due to macroeconomic trade disputes and OPEC+ production increases, resulting in decreased total and net crude oil production for the company and a **14.4%** drop in average realized oil prices, prompting the company to actively manage production, enhance efficiency, and promote green and low-carbon initiatives to strengthen its cost advantage - In the first half of 2025, the international crude oil market saw ample supply and year-over-year price declines, influenced by macroeconomic trade disputes and OPEC+ production increases[41](index=41&type=chunk) - The company's total crude oil production decreased by **10.4%** year-over-year to approximately **1.52 million barrels**, and net production decreased by **8.5%** to approximately **0.73 million barrels**[42](index=42&type=chunk) - The average realized oil price decreased by **14.4%** year-over-year to **USD 69.63/barrel**[42](index=42&type=chunk) - The company actively responded to the complex macroeconomic situation by advancing production and operations, improving quality and efficiency, and promoting green and low-carbon initiatives to consolidate its cost advantage[41](index=41&type=chunk) [2025 Outlook](index=17&type=section&id=2025%20Outlook) - International crude oil prices are expected to remain under pressure with volatility in the second half of **2025**, with market focus returning to supply and demand[45](index=45&type=chunk) - The company will continue to promote digital and intelligent management, empowering oilfield development through technological innovation to achieve high-quality sustainable development[45](index=45&type=chunk) [Review of Operating Results](index=17&type=section&id=Review%20of%20Operating%20Results) This section details the company's operating results for the first half of 2025, covering revenue, operating expenses, taxes, and loss for the period, noting that revenue decline was primarily due to oil prices and sales volume, with cost control measures partially offsetting the negative impact, but overall loss still expanded [Revenue](index=17&type=section&id=Revenue) - Revenue from sales of petroleum products decreased by **20.7%** year-over-year to **RMB 365.7 million**[47](index=47&type=chunk) - The average realized oil price decreased by **14.4%** to **USD 69.63/barrel**, and net crude oil sales decreased by **8.5%** to **0.73 million barrels**, which were the primary reasons for the revenue decline[47](index=47&type=chunk) - For the six months ended June 30, 2025, the company had no revenue from provision of services, compared to **RMB 0.1 million** in the prior period[48](index=48&type=chunk) [Operating Expenses](index=18&type=section&id=Operating%20Expenses) During the reporting period, the company's operating expenses generally decreased, with depreciation, depletion and amortization, taxes (other than income tax), and purchases, services and other direct costs all declining, partially offsetting the impact of reduced revenue, while staff costs remained largely flat, other net gains decreased, and finance costs fell due to exchange rate fluctuations [Depreciation, Depletion and Amortization](index=18&type=section&id=Depreciation%2C%20Depletion%20and%20Amortization) - Depreciation, depletion and amortization decreased by **8.2%** year-over-year to **RMB 158.8 million**[49](index=49&type=chunk) - The decrease was primarily due to lower net crude oil production[49](index=49&type=chunk) [Taxes (Other than Income Tax)](index=18&type=section&id=Taxes%20%28Other%20than%20Income%20Tax%29) - Taxes (other than income tax) decreased by **71.1%** year-over-year to **RMB 7.2 million**[50](index=50&type=chunk) - The special oil gain levy decreased from **RMB 23.5 million** in the prior period to **RMB 6.0 million** in the current period, which was the main reason[50](index=50&type=chunk) [Staff Costs](index=19&type=section&id=Staff%20Costs) - Staff costs were **RMB 46.3 million**, a slight increase of **0.2%** year-over-year[51](index=51&type=chunk) [Purchases, Services and Other Direct Costs](index=19&type=section&id=Purchases%2C%20Services%20and%20Other%20Direct%20Costs) - Purchases, services and other direct costs decreased by **9.2%** year-over-year to **RMB 100.6 million**[52](index=52&type=chunk) - The decrease was primarily due to a reduction of approximately **RMB 8.0 million** in operating expenses for old well stimulation measures due to lower oil prices, and a reduction of approximately **RMB 1.8 million** in administrative expenses due to strict budget management and cost control[52](index=52&type=chunk) [Other Gains/(Losses), Net](index=19&type=section&id=Other%20Gains%2F%28Losses%29%2C%20Net) - Other net gains were **RMB 2.4 million**, a year-over-year decrease[53](index=53&type=chunk) - The decrease was mainly due to a reduction of approximately **RMB 4.6 million** in net fair value gains from the derivative component of borrowings[53](index=53&type=chunk) [Finance Costs](index=19&type=section&id=Finance%20Costs) - Finance costs decreased by **4.8%** year-over-year to **RMB 184.5 million**, primarily due to exchange rate fluctuations[54](index=54&type=chunk) - After deducting the impact of interest expenses, a net profit of **RMB 27.4 million** would have been generated for the period[54](index=54&type=chunk) [Loss Before Income Tax](index=19&type=section&id=Loss%20Before%20Income%20Tax) - Loss before income tax was **RMB 129.3 million**, an increase of **RMB 49.1 million** year-over-year[55](index=55&type=chunk) - The increased loss was primarily due to a revenue decrease of approximately **RMB 95.5 million** resulting from lower oil prices and net crude oil sales, partially offset by reductions in operating expenses and finance costs of approximately **RMB 37.1 million** and **RMB 9.3 million**, respectively[55](index=55&type=chunk) [Income Tax Expense](index=19&type=section&id=Income%20Tax%20Expense) - Income tax expense was **RMB 18.7 million**, a **37.5%** year-over-year decrease[56](index=56&type=chunk) [Loss for the Period](index=20&type=section&id=Loss%20for%20the%20Period) - Loss for the period was **RMB 148.0 million**, an increase of **RMB 37.9 million** year-over-year[57](index=57&type=chunk) - The increased loss was primarily due to the cumulative impact of decreased revenue, partially offset by reduced operating and finance costs[55](index=55&type=chunk)[57](index=57&type=chunk) [EBITDA and Adjusted EBITDA](index=20&type=section&id=EBITDA%20and%20Adjusted%20EBITDA) Reconciliation of EBITDA and Adjusted EBITDA to Loss Before Income Tax (RMB thousands) | Indicator | As of June 30, 2025 (Unaudited) | As of June 30, 2024 (Unaudited) | | :--- | :--- | :--- | | Loss before income tax | (129,332) | (80,188) | | Interest income | (17) | (85) | | Finance costs | 184,520 | 193,884 | | Depreciation, depletion and amortization | 158,830 | 173,041 | | **EBITDA** | **214,001** | **286,652** | | Net fair value change of derivative component of new secured borrowings and 2024 senior notes | (818) | (5,437) | | **Adjusted EBITDA** | **213,183** | **281,215** | - **EBITDA** decreased by **25.3%** year-over-year to **RMB 214.0 million**, and **Adjusted EBITDA** decreased by **24.2%** year-over-year to **RMB 213.2 million**[60](index=60&type=chunk)[61](index=61&type=chunk) - The decrease was primarily due to a revenue reduction of approximately **RMB 95.5 million** resulting from lower oil prices and net crude oil sales[60](index=60&type=chunk)[61](index=61&type=chunk) - **EBITDA** and **Adjusted EBITDA** are common financial metrics in the oil and gas industry, used to assess operating performance, cash flow, and financing capacity[59](index=59&type=chunk) [Liquidity and Capital Resources](index=23&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2025, the company generated **RMB 165.1 million** in net cash from operating activities, but investing and financing activities resulted in net cash outflows, leading to a decrease in cash and cash equivalents, while total borrowings increased, and both net debt and adjusted EBITDA ratios rose, indicating increased liquidity pressure [Overview](index=23&type=section&id=Overview) - Net cash generated from operating activities was **RMB 165.1 million**[63](index=63&type=chunk) - Net cash used in investing activities was **RMB 110.4 million**, and net cash used in financing activities was **RMB 74.5 million**[63](index=63&type=chunk) - Cash and cash equivalents decreased by **RMB 20.0 million** compared to the end of 2024[63](index=63&type=chunk) [Borrowings](index=23&type=section&id=Borrowings) - As of June 30, 2025, the company's total borrowings were approximately **RMB 3,002.4 million**, an increase of approximately **RMB 82.3 million** from the end of 2024[64](index=64&type=chunk) - Borrowings repayable within one year were approximately **RMB 152.0 million**, an increase of **RMB 18.8 million** from the end of 2024[64](index=64&type=chunk) - All borrowings are denominated in **USD or HKD**, are fixed-rate, and the company has not engaged in hedging activities[64](index=64&type=chunk) [Adjusted EBITDA Ratio](index=23&type=section&id=Adjusted%20EBITDA%20Ratio) - The gearing ratio increased from **492.4%** at the end of 2024 to **541.9%** as of June 30, 2025[64](index=64&type=chunk) - The adjusted EBITDA ratio increased from **5.3** at the end of 2024 to **7.0** as of June 30, 2025[65](index=65&type=chunk) [Market Risks](index=23&type=section&id=Market%20Risks) The company's primary market risks include crude oil price fluctuations and currency risk, with unstable international crude oil prices significantly impacting revenue and profit, and the non-convertible nature of RMB posing exchange rate risks, while the company currently does not engage in foreign exchange hedging [Crude Oil Price Risk](index=23&type=section&id=Crude%20Oil%20Price%20Risk) - Fluctuations in international crude oil prices have a significant impact on the company's revenue and profit[67](index=67&type=chunk) [Currency Risk](index=24&type=section&id=Currency%20Risk) - Most of the company's sales are denominated in **USD**, while production and other expenses within China are recorded in **RMB**[68](index=68&type=chunk) - The non-convertible nature of RMB and Chinese government restrictions on foreign exchange transactions may lead to significant future exchange rate fluctuations[68](index=68&type=chunk) - The company currently does not engage in foreign exchange hedging activities[68](index=68&type=chunk) [Pledge of Group Assets](index=24&type=section&id=Pledge%20of%20Group%20Assets) As of June 30, 2025, the company pledged its interests in product sharing contracts, certain bank accounts, and subsidiary shares located in China as collateral to secure borrowings totaling **RMB 1,624.9 million** - As of June 30, 2025, the company pledged interests in product sharing contracts, bank accounts, and subsidiary shares as collateral to secure borrowings totaling **RMB 1,624.9 million**[69](index=69&type=chunk) [Employees](index=24&type=section&id=Employees) As of June 30, 2025, the company had **920 employees**, all located in China (mainland and Hong Kong), with no significant changes in employee remuneration, compensation policies, or staff development information compared to the 2024 annual report - As of June 30, 2025, the company had **920 employees**, all located in China (mainland and Hong Kong)[70](index=70&type=chunk) - Information regarding employee remuneration, compensation policies, and staff development showed no material changes compared to the 2024 annual report[70](index=70&type=chunk) [Contingent Matters](index=24&type=section&id=Contingent%20Matters) As of June 30, 2025, the company's Board of Directors was not aware of any significant contingent matters - As of June 30, 2025, the company's Board of Directors was not aware of any significant contingent matters[71](index=71&type=chunk) [Dividends](index=24&type=section&id=Dividends) The Board resolved not to declare an interim dividend for the six months ended June 30, 2025, consistent with the prior period - The Board resolved not to declare an interim dividend for the six months ended June 30, 2025[72](index=72&type=chunk) [Other Information](index=25&type=section&id=Other%20Information) This section covers corporate governance information, including the Audit Committee's responsibilities, repurchase of listed securities, compliance with the Corporate Governance Code, and the Standard Code for Securities Transactions by Directors, confirming the company's full compliance with relevant regulations and timely publication of interim results and reports [Audit Committee](index=25&type=section&id=Audit%20Committee) The Audit Committee has reviewed the company's accounting principles, internal controls, and financial reporting matters, including the unaudited interim results, and has adopted terms of reference compliant with Appendix C1 Part 2 of the Listing Rules' Corporate Governance Code - The Audit Committee has reviewed the company's accounting principles, internal controls, and financial reporting matters, including the unaudited interim results[73](index=73&type=chunk) - The Audit Committee has adopted terms of reference compliant with Appendix C1 Part 2 of the Listing Rules' Corporate Governance Code[73](index=73&type=chunk) [Repurchase, Sale or Redemption of the Company's Listed Securities](index=25&type=section&id=Repurchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) As of June 30, 2025, neither the company nor its subsidiaries repurchased, sold, or redeemed any of the company's listed securities - As of June 30, 2025, neither the company nor its subsidiaries repurchased, sold, or redeemed any of the company's listed securities[74](index=74&type=chunk) [Corporate Governance Code](index=25&type=section&id=Corporate%20Governance%20Code) For the period from January 1, 2025, to June 30, 2025, the company complied with the principles and code provisions of the Corporate Governance Code set out in Appendix C1 Part 2 of the Listing Rules - The company complied with the principles and code provisions of the Corporate Governance Code set out in Appendix C1 Part 2 of the Listing Rules during the reporting period[75](index=75&type=chunk) [Standard Code for Securities Transactions](index=25&type=section&id=Standard%20Code%20for%20Securities%20Transactions) The company has adopted the Standard Code for Securities Transactions by Directors as set out in Appendix C3 of the Listing Rules, applying it to directors and employees who may possess unpublished inside information, with all directors confirming compliance during the reporting period and no instances of non-compliance by employees identified - The company has adopted the Standard Code for Securities Transactions by Directors as set out in Appendix C3 of the Listing Rules[76](index=76&type=chunk) - All directors have confirmed continuous compliance with the Standard Code during the reporting period, and the company found no instances of non-compliance by employees[76](index=76&type=chunk) [Publication of Interim Results and Interim Report](index=26&type=section&id=Publication%20of%20Interim%20Results%20and%20Interim%20Report) The electronic version of this interim results announcement has been published on the company's, Hong Kong Stock Exchange's, and Singapore Exchange's websites, with the interim report containing all information required by Appendix D2 of the Listing Rules to be issued to shareholders and posted on the aforementioned websites in due course - The electronic version of this interim results announcement has been published on the websites of the company, the Hong Kong Stock Exchange, and the Singapore Exchange[77](index=77&type=chunk) - The interim report, containing all information required by Appendix D2 of the Listing Rules, will be issued to shareholders and posted on the aforementioned websites in due course[77](index=77&type=chunk) [Board Information](index=26&type=section&id=Board%20Information) As of the announcement date, the Board of Directors comprises **2 executive directors**, **3 non-executive directors**, and **5 independent non-executive directors** - As of the announcement date, the Board of Directors includes **2 executive directors**, **3 non-executive directors**, and **5 independent non-executive directors**[79](index=79&type=chunk)