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，並明確表示概不會就本公告全部或任何部份內容而產生或因倚賴該等內容而引 致之任何損失承擔任何責任。 DEVGREAT GROUP LIMITED 大方廣瑞德集團有限公司 茲提述大方廣瑞德集團有限公司（「本公司」，連同其附屬公司統稱「本集團」）截至二零二 四年十二月三十一日止年度（「本年度」）之年度報告，該報告已於二零二五年四月二十九日 刊發（「二零二四年年度報告」）。除另有指明外，本公告所用詞彙與二零二四年年度報告所 界定者具有相同涵義。本公告旨在向二零二四年年度報告補充資料，應與二零二四年年度報告 一併閱讀。 持續關連交易 董事會謹此根據上市規則第14A.71(6)條的規定，就二零二四年年度報告董事會報告部分提供更 多資料。 關於持續關連交易，即協議期由二零二二年十二月二十七日起至二零二四年十二月三十一日止 有關提供物業建設及管理服務的框架協議，就董事所知、所悉及所信，並在作出合理查詢後， 本集團於本年度並無進行任何持續關連交易，交易金額為零。 獨立非執行董事已審閱上述持續關連交易，並確認該交易乃(i ...

[Business Summary](index=1&type=section&id=%E6%A5%AD%E5%8B%99%E6%91%98%E8%A6%81) The company achieved significant clinical progress with its core products and anticipates key milestones in the latter half of 2025 [Clinical Trial Progress](index=1&type=section&id=%E8%87%A8%E5%BA%8A%E8%A9%A6%E9%A9%97%E9%80%B2%E5%B1%95) The company achieved significant clinical progress during the reporting period, advancing core products LAE102 (obesity) and LAE002 (afuresertib) in various clinical trials, alongside preclinical candidates - The self-developed obesity drug LAE102 (an ActRIIA-targeting monoclonal antibody) successfully completed its Phase I SAD study in China, demonstrating **good tolerability**, **no serious adverse events**, and **sustained pathway blockade**, laying the foundation for further development[4](index=4&type=chunk)[5](index=5&type=chunk) - The company entered a clinical collaboration with **Eli Lilly** to accelerate LAE102's global development, with Lilly responsible for and bearing the costs of the US Phase I clinical trial, where the **first subject was dosed in May 2025**[7](index=7&type=chunk) - The Phase III clinical trial AFFIRM–205 of LAE002 (afuresertib) combined with fulvestrant for HR+/HER2- breast cancer is ongoing in China, with patient enrollment planned for completion by **Q4 2025** and an NDA submission targeted for **H1 2026**[11](index=11&type=chunk) - The company has established a comprehensive ActRII product portfolio, including LAE103 (ActRIIB selective antibody) and LAE123 (ActRIIA/IIB dual antagonist antibody) in addition to LAE102, actively advancing their clinical research for muscle and other diseases[8](index=8&type=chunk)[10](index=10&type=chunk) [LAE102 for Obesity, Phase I](index=1&type=section&id=LAE102%E6%B2%BB%E7%99%82%E8%82%A5%E8%83%96%E7%97%87%EF%BC%8CI%E6%9C%9F) - In the China Phase I SAD study, LAE102 demonstrated **good tolerability** after intravenous (IV) and subcutaneous (SC) administration, with no serious adverse events or treatment-discontinuing adverse events reported[5](index=5&type=chunk) - The Phase I multiple ascending dose (MAD) study was initiated in China in **March 2025**, and the first subject was dosed in the US Phase I clinical trial in collaboration with Eli Lilly in **May 2025**[6](index=6&type=chunk)[7](index=7&type=chunk) [LAE002 (afuresertib) + Fulvestrant for HR+/HER2– Breast Cancer, Phase III](index=3&type=section&id=LAE002%20%28afuresertib%29%20%2B%E6%B0%9F%E7%B6%AD%E5%8F%B8%E7%BE%A4%E6%B2%BB%E7%99%82HR%2B%2FHER2%E2%80%93%20%E4%B9%B3%E8%85%BA%E7%99%8C%EF%BC%8CIII%E6%9C%9F) - The AFFIRM–205 Phase III clinical trial was initiated in China in **May 2024**, with ongoing recruitment targeting completion by **Q4 2025**[11](index=11&type=chunk) [LAE002 (afuresertib) + LAE001/Prednisone for mCRPC, Phase II](index=4&type=section&id=LAE002%20%28afuresertib%29%20%2B%20LAE001%E2%88%95%E6%BD%91%E5%B0%BC%E6%9D%BE%E6%B2%BB%E7%99%82mCRPC%2C%20II%E6%9C%9F) - The international multi-center Phase II clinical trial completed in **2024** showed a median radiographic progression-free survival (rPFS) of **8.1 months**, a significant improvement over the 2-4 months for standard therapy, with the combination therapy being well-tolerated[12](index=12&type=chunk) - The company has received **US FDA approval** for the Phase III clinical trial protocol for this indication and plans to seek strategic partners to accelerate development and commercialization[13](index=13&type=chunk) [Preclinical Candidate Drugs (PCC)](index=4&type=section&id=%E8%87%A8%E5%BA%8A%E5%89%8D%E5%80%99%E9%81%B8%E8%97%A5%E7%89%A9%28PCC%29) - The IND application for LAE103 was submitted to the US FDA in **June 2025**, with a Phase I clinical study planned for initiation in **H2 2025**; LAE123 is projected to advance to Phase I clinical trials in **2026**[14](index=14&type=chunk) - In oncology, the USP1 inhibitor LAE120 received **FDA approval** for clinical trials in **February 2025**, and the WRN inhibitor LAE122 completed PCC confirmation in **March 2025**[14](index=14&type=chunk) [Expected Milestones in H2 2025](index=4&type=section&id=2025%E5%B9%B4%E4%B8%8B%E5%8D%8A%E5%B9%B4%E7%9A%84%E9%A0%90%E6%9C%9F%E9%87%8C%E7%A8%8B%E7%A2%91) The company anticipates key milestones in H2 2025, including announcing LAE102 Phase I results, completing AFFIRM–205 patient enrollment, and initiating LAE103 Phase I clinical studies - LAE102: Expected to announce **topline results** from the China Phase I MAD study and US Phase I clinical trial[15](index=15&type=chunk) - AFFIRM–205: Expected to complete **subject enrollment** for the China Phase III trial[16](index=16&type=chunk) - Other ActRII-targeted drugs: Expected to initiate **LAE103 Phase I clinical study**[17](index=17&type=chunk) [Financial Summary and Statements](index=5&type=section&id=%E8%B2%A1%E5%8B%99%E6%91%98%E8%A6%81%E8%88%87%E5%A0%B1%E8%A1%A8) This section details the company's financial performance, position, and cash flows for the reporting period, highlighting key changes in expenses and liquidity [Financial Summary](index=5&type=section&id=%E8%B2%A1%E5%8B%99%E6%91%98%E8%A6%81) For the six months ended June 30, 2025, R&D expenses decreased by 16.6% to RMB 105.2 million due to prior-period milestone payments, while administrative expenses increased by 39.1% to RMB 42.3 million, narrowing the period's loss to RMB 129.6 million Financial Summary (For the six months ended June 30) | Metric | 2025 (RMB '000) | 2024 (RMB '000) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | R&D Expenses | 105,192 | 126,148 | -16.6% | | Administrative Expenses | 42,321 | 30,380 | +39.1% | | Loss for the Period | 129,637 | 143,706 | -9.8% | | Total Comprehensive Loss for the Period | 133,399 | 138,548 | -3.7% | - The decrease in R&D expenses was primarily due to a **RMB 17.8 million** milestone payment related to the AFFIRM-205 Phase III clinical trial in H1 2024, with no such expenses in the current reporting period[19](index=19&type=chunk) - The increase in administrative expenses was mainly attributable to higher **equity-settled share-based payment expenses**[20](index=20&type=chunk) [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=6&type=section&id=%E7%B6%9C%E5%90%88%E6%90%8D%E7%9B%8A%E5%8F%8A%E5%85%B6%E4%BB%96%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) During the period, other income grew 40.7% to RMB 19.91 million, operating loss narrowed to RMB 127.6 million from RMB 142.4 million, and net loss was RMB 129.6 million, with basic and diluted loss per share at RMB 0.35 Key Items from Consolidated Statement of Profit or Loss (For the six months ended June 30) | Item | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | Other Income | 19,908 | 14,149 | | Administrative Expenses | (42,321) | (30,380) | | R&D Expenses | (105,192) | (126,148) | | Loss from Operations | (127,605) | (142,383) | | Loss Before Tax | (129,637) | (143,706) | | Loss for the Period | (129,637) | (143,706) | | Basic and Diluted Loss Per Share (RMB) | (0.35) | (0.40) | [Consolidated Statement of Financial Position](index=7&type=section&id=%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) As of June 30, 2025, the company reported total assets of RMB 913.4 million, total liabilities of RMB 200.6 million, and net assets of RMB 712.9 million, with cash and cash equivalents increasing to RMB 676.6 million Key Items from Consolidated Statement of Financial Position | Item | As of June 30, 2025 (RMB '000) | As of Dec 31, 2024 (RMB '000) | | :--- | :--- | :--- | | **Assets** | | | | Non-current Assets | 151,048 | 146,636 | | Current Assets | 762,362 | 813,401 | | Of which: Cash and Cash Equivalents | 676,562 | 636,422 | | **Liabilities and Equity** | | | | Current Liabilities | 194,705 | 148,473 | | Non-current Liabilities | 5,849 | 6,772 | | Net Assets | 712,856 | 804,792 | | Total Equity | 712,856 | 804,792 | [Condensed Consolidated Statement of Cash Flows](index=8&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E7%8F%BE%E9%87%91%E6%B5%81%E9%87%8F%E8%A1%A8) Net cash outflow from operating activities significantly decreased to RMB 74.15 million, while investing activities generated RMB 105.9 million net cash inflow, and financing activities generated RMB 10.84 million, increasing period-end cash and cash equivalents to RMB 674.5 million Condensed Consolidated Statement of Cash Flows (For the six months ended June 30) | Item | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | (74,149) | (143,382) | | Net Cash From Investing Activities | 105,926 | 101,835 | | Net Cash From Financing Activities | 10,841 | 5,575 | | Net Increase/(Decrease) in Cash and Cash Equivalents | 42,618 | (35,972) | | Cash and Cash Equivalents at Beginning of Period | 634,323 | 440,815 | | Cash and Cash Equivalents at End of Period | 674,542 | 407,331 | [Management Discussion and Analysis](index=17&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%A4%E8%A8%8E%E8%AB%96%E5%8F%8A%E5%88%86%E6%9E%90) This section provides an overview of the company's strategic pipeline, financial performance, liquidity, and future development plans, including the use of proceeds [Overview and Pipeline Review](index=17&type=section&id=%E6%A6%82%E8%A7%88%E8%88%87%E7%AE%A1%E7%B7%9A%E5%9B%9E%E9%A1%A7) The company is a science-driven clinical-stage biopharmaceutical firm focused on metabolic diseases, cancer, and liver fibrosis, actively advancing its ActRII product portfolio and AKT inhibitor afuresertib through clinical trials and strategic partnerships - The company has established a comprehensive ActRII product portfolio in the metabolic field, with LAE102 showing promise as a potential drug for **muscle-preserving weight loss**[51](index=51&type=chunk) - In oncology, the core product LAE002 (afuresertib) is one of only two AKT inhibitors globally in late-stage clinical development for breast and prostate cancer, with a **Phase III pivotal study initiated in China**[52](index=52&type=chunk) - The Phase II trial of LAE002 combined with LAE001 for mCRPC showed a median rPFS of **8.1 months**, significantly outperforming standard therapy[68](index=68&type=chunk) - In the Phase I trial of LAE002 combined with LAE005 and chemotherapy for triple-negative breast cancer (TNBC), the objective response rate (ORR) was **35.7%**, and the disease control rate (DCR) was **64.3%**[74](index=74&type=chunk) [Financial Review](index=24&type=section&id=%E8%B2%A1%E5%8B%99%E5%9B%9E%E9%A1%A7) During the period, other income increased by 41.1% due to government grants, administrative expenses rose by 39.1% from equity-settled share-based payments, and R&D expenses decreased by 16.6% primarily due to the absence of prior-period milestone payments R&D Expense Breakdown (For the six months ended June 30) | Item | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | Staff Costs | 41,806 | 34,580 | | R&D Research Expenses | 30,392 | 13,140 | | Clinical Development Expenses | 28,052 | 54,417 | | Clinical Trial Milestone Payments | – | 17,758 | | Other | 4,942 | 6,253 | | **Total** | **105,192** | **126,148** | [Liquidity and Financial Resources](index=25&type=section&id=%E6%B5%81%E5%8B%95%E8%B3%87%E9%87%91%E5%8F%8A%E8%B2%A1%E5%8B%99%E8%B3%87%E6%BA%90) As of June 30, 2025, the company held RMB 743.8 million in cash and bank balances, with current assets of RMB 762.4 million and current liabilities of RMB 194.7 million, resulting in a current ratio of 3.92 and a net cash position - As of June 30, 2025, cash and cash equivalents were **RMB 676.6 million**, a **6.3% increase** from **RMB 636.4 million** at the end of 2024[81](index=81&type=chunk) - As of June 30, 2025, the current ratio was **3.92**, compared to **5.48** as of December 31, 2024[85](index=85&type=chunk) - The company is in a **net cash position**, thus the debt-to-asset ratio is not applicable[86](index=86&type=chunk) [Use of Net Proceeds](index=27&type=section&id=%E6%89%80%E5%BE%97%E6%AC%BE%E9%A0%8D%E6%B7%A8%E9%A1%8D%E7%94%A8%E9%80%94) The company detailed the use of net proceeds from its global offering and placing, with HKD 489.8 million utilized from the HKD 724.4 million global offering and HKD 51.6 million from the HKD 230.4 million November 2024 placing, primarily for LAE102 and ActRII drug R&D Use of Net Proceeds from Global Offering (As of June 30, 2025) | Intended Use | Allocated Amount (HKD Million) | Cumulative Utilized (HKD Million) | Unutilized Amount (HKD Million) | | :--- | :--- | :--- | :--- | | Core Product Clinical Development | 407.8 | 269.7 | 138.1 | | Other Pipeline Product R&D | 150.7 | 144.4 | 6.3 | | Enhance Production Capacity and Manufacturing Capabilities | 71.7 | 4.9 | 66.8 | | Business Development Activities | 55.1 | 26.7 | 28.4 | | Working Capital and Other | 39.1 | 39.1 | – | Use of Net Proceeds from Placing (As of June 30, 2025) | Intended Use | Allocated Amount (HKD Million) | Cumulative Utilized (HKD Million) | Unutilized Amount (HKD Million) | | :--- | :--- | :--- | :--- | | Accelerate LAE102 and ActRII Drug R&D | 230.4 | 51.6 | 178.7 | [Future Developments](index=30&type=section&id=%E6%9C%AA%E4%BE%86%E7%99%BC%E5%B1%95) The company plans to expand its metabolic and oncology portfolios, focusing on ActRII product development, aiming to advance one candidate to clinical stage annually, and seeking strategic collaborations to accelerate clinical development and commercialization - The company will continue to build and expand its ActRII product portfolio to maximize the development value of ActRII receptor targeting[98](index=98&type=chunk) - The goal is to advance **one candidate drug into clinical stage annually** and continuously explore the potential for combination therapies[99](index=99&type=chunk)[100](index=100&type=chunk) - Following the collaboration with Eli Lilly, the company plans to establish **strategic partnerships with more global leading pharmaceutical companies** to accelerate asset clinical development and commercialization[101](index=101&type=chunk) [Corporate Governance and Other Information](index=31&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E7%9B%B8%E9%97%9C%E8%B3%87%E6%96%99) This section outlines the company's adherence to corporate governance principles, the Audit Committee's review, and the Board's decision regarding interim dividends [Corporate Governance and Compliance](index=31&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E8%88%87%E5%90%88%E8%A6%8F) The company adopted and complied with the Corporate Governance Code, with the exception of the Chairman and CEO roles being held by the same individual, Dr. Lu Xiangyang, an arrangement the Board believes benefits strategic execution - The company complied with all relevant provisions of the Corporate Governance Code during the reporting period, with **one deviation**[102](index=102&type=chunk) - The deviation is that the roles of Chairman and Chief Executive Officer are not separated, both held by founder **Dr. Lu Xiangyang**, an arrangement the Board believes benefits strategic execution and communication efficiency[103](index=103&type=chunk) [Audit Committee and Interim Results Review](index=32&type=section&id=%E5%AF%A9%E8%A8%88%E5%A7%94%E5%93%A1%E6%9C%83%E5%8F%8A%E4%B8%AD%E6%9C%9F%E6%A5%AD%E7%B8%BE%E5%AF%A9%E9%96%B1) The company's Audit Committee, comprising independent non-executive and non-executive directors, reviewed the unaudited interim financial information, which was also independently reviewed by KPMG - The Audit Committee has reviewed the Group's accounting principles, policies, and **unaudited interim financial information** with management[108](index=108&type=chunk) - Independent auditor **KPMG** has reviewed the interim financial information in accordance with Hong Kong Standard on Review Engagements 2410[108](index=108&type=chunk) [Dividends](index=32&type=section&id=%E8%82%A1%E6%81%AF) The Board did 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[110](index=110&type=chunk)

[Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=1&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) The company experienced a **10.80% decrease in turnover** but significantly narrowed its loss before tax and net loss, with total comprehensive income turning positive | Indicator | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Turnover | 86,314 | 96,759 | -10.80% | | Cost of sales | (62,657) | (71,078) | -11.99% | | Gross profit | 23,657 | 25,681 | -7.88% | | Other income and gains, net | 4,463 | 4,195 | 6.39% | | Loss before tax | (4,954) | (13,315) | 62.80% (Loss narrowed) | | Income tax expense | (1,063) | (1,748) | -39.20% | | Loss for the period and attributable to owners of the Company | (6,017) | (15,063) | 60.07% (Loss narrowed) | | Total comprehensive income/(loss) for the period and attributable to owners of the Company | 614 | (21,214) | Turned from loss to profit | | Loss per share - basic and diluted | (HK$0.019) | (HK$0.047) | 59.57% (Loss narrowed) | [Condensed Consolidated Statement of Financial Position](index=2&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) The company maintained stable non-current and current assets, with a notable increase in trade receivables and a slight decrease in net current assets | Indicator | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Non-current assets | 562,112 | 560,007 | 0.38% | | Current assets | 257,574 | 256,335 | 0.48% | | Inventories | 75,234 | 81,255 | -7.39% | | Trade receivables | 26,072 | 16,424 | 58.75% | | Cash and cash equivalents | 142,509 | 141,733 | 0.55% | | Current liabilities | 29,464 | 25,106 | 17.36% | | Trade and other payables | 25,935 | 22,314 | 16.23% | | Net current assets | 228,110 | 231,229 | -1.35% | | Net assets | 755,260 | 754,646 | 0.08% | | Total equity | 755,260 | 754,646 | 0.08% | [Notes](index=4&type=section&id=Notes) This section provides detailed explanations of the accounting policies, financial performance, and position, including segment information and tax expenses [1. Basis of Preparation](index=4&type=section&id=1.%20Basis%20of%20Preparation) The interim financial statements are prepared in accordance with HKAS 34 and other relevant HKFRSs, as required by the HKEX Listing Rules - The financial statements are prepared in accordance with the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, Hong Kong Accounting Standard 34 "Interim Financial Reporting" issued by the Hong Kong Institute of Certified Public Accountants, and other relevant Hong Kong Financial Reporting Standards[6](index=6&type=chunk) [2. Accounting Policies](index=4&type=section&id=2.%20Accounting%20Policies) Current accounting policies align with the prior year, with new HKFRSs adopted having no material impact on the group's performance or financial position - The accounting policies adopted in the current period are consistent with those followed in the consolidated financial statements for the year ended December 31, 2024[7](index=7&type=chunk) - The Group first adopted the revised Hong Kong Financial Reporting Standards effective from January 1, 2025, including amendments to HKAS 21 "Lack of Exchangeability"[7](index=7&type=chunk) - The adoption of the revised HKFRSs had no material impact on the results and financial position for the current or prior accounting periods, requiring no retrospective adjustments[7](index=7&type=chunk) [3. Turnover and Other Income](index=4&type=section&id=3.%20Turnover%20and%20Other%20Income) Turnover represents net invoiced sales of goods, while other income and gains, net, increased due to fair value changes in financial assets and exchange gains - Turnover refers to the net invoiced value of goods sold[8](index=8&type=chunk) Other Income and Gains Items | Other Income and Gains Item | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Bank interest income | 1,832 | 2,035 | -9.98% | | Fair value changes of financial assets at fair value through profit or loss | 179 | - | N/A | | Rental income under operating leases | 1,091 | 1,080 | 1.02% | | Exchange gains, net | 362 | - | N/A | | Dividend income from equity instruments at fair value through other comprehensive income | 684 | 837 | -18.39% | | Dividend income from financial assets at fair value through profit or loss | 141 | - | N/A | | Other income | 174 | 243 | -28.39% | | **Total** | **4,463** | **4,195** | **6.39%** | [4. Segment Information](index=5&type=section&id=4.%20Segment%20Information) The group operates a single segment of manufacturing and trading electronic components, with varying sales performance across geographical markets - The Group has only one operating segment, primarily engaged in the manufacturing and trading of electronic components in Hong Kong and overseas markets[10](index=10&type=chunk) Geographical Sales | Region | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Hong Kong (place of registration) | 1,385 | 321 | 331.46% | | China | 3,753 | 5,261 | -28.67% | | United States | 76,016 | 84,621 | -10.17% | | European Union | 3,069 | 1,328 | 131.10% | | Other countries | 2,091 | 5,228 | -60.00% | | **Total** | **86,314** | **96,759** | **-10.80%** | [5. Loss Before Tax](index=5&type=section&id=5.%20Loss%20Before%20Tax) The loss before tax significantly narrowed, primarily driven by reduced cost of inventories recognized as an expense and lower depreciation Loss Before Tax Items | Item | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Cost of inventories recognized as an expense | 62,657 | 71,078 | -11.99% | | Depreciation of property, plant and equipment | 8,545 | 8,884 | -3.81% | | Exchange (gains)/losses, net | (362) | 159 | Turned from loss to profit | | **Loss before tax** | **(4,954)** | **(13,315)** | **62.80% (Loss narrowed)** | [6. Income Tax Expense](index=6&type=section&id=6.%20Income%20Tax%20Expense) Income tax expense decreased due to adjustments for over-provision in overseas tax and the impact of deferred tax credits Income Tax Expense Items | Item | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Current tax—Hong Kong Profits Tax (provision for the current period) | 1,438 | 928 | 54.96% | | Current tax—Overseas (provision for the current period) | 535 | 1,084 | -50.65% | | Current tax—Overseas (over-provision in prior years) | (688) | (264) | 160.61% | | Deferred tax credit | (222) | - | N/A | | **Total income tax expense** | **1,063** | **1,748** | **-39.20%** | - Hong Kong Profits Tax is calculated at 16.5% (8.25% for the first HK$2,000,000 of assessable profits), while overseas tax is calculated at the rates applicable in the respective jurisdictions[13](index=13&type=chunk) [7. Interim Dividend](index=6&type=section&id=7.%20Interim%20Dividend) The Board does not recommend the payment of any interim dividend for the six months ended June 30, 2025 - The Board does not recommend the payment of any interim dividend for the six months ended June 30, 2025 (2024: nil)[14](index=14&type=chunk) [8. Loss Per Share](index=6&type=section&id=8.%20Loss%20Per%20Share) Basic and diluted loss per share significantly narrowed due to a substantial reduction in the loss attributable to owners of the Company Loss Per Share Data | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Loss attributable to owners of the Company (HK$ Thousand) | 6,017 | 15,063 | | Number of ordinary shares in issue | 320,000,000 | 320,000,000 | | Basic and diluted loss per share | (HK$0.019) | (HK$0.047) | - As there were no dilutive potential ordinary shares in existence during both reporting periods, the diluted loss per share is equal to the basic loss per share[16](index=16&type=chunk) [9. Trade Receivables](index=6&type=section&id=9.%20Trade%20Receivables) The group's credit terms range from 30 to 90 days, with a significant increase in total trade receivables, particularly in the 30-60 day ageing categories - The Group generally grants credit periods of 30 to 90 days to its customers and closely monitors overdue trade receivables[17](index=17&type=chunk) Trade Receivables Ageing | Ageing | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Within 30 days | 15,244 | 9,584 | 59.05% | | 31 to 60 days | 8,825 | 4,472 | 97.34% | | 61 to 90 days | 2,064 | 2,390 | -13.64% | | Over 90 days | 627 | 666 | -5.86% | | Less: Loss allowance | (688) | (688) | 0.00% | | **Total trade receivables** | **26,072** | **16,424** | **58.75%** | [10. Trade and Other Payables](index=7&type=section&id=10.%20Trade%20and%20Other%20Payables) Total trade and other payables increased, driven by higher trade payables and other payables, while accrued charges for production plant decreased Trade and Other Payables Breakdown | Item | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Trade payables | 8,936 | 5,740 | 55.68% | | Other payables and accrued expenses | 16,999 | 16,177 | 5.08% | | Accrued charges for production plant | - | 397 | -100.00% | | **Total trade and other payables** | **25,935** | **22,314** | **16.23%** | Trade Payables Ageing | Trade Payables Ageing | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Within 30 days | 4,206 | 2,571 | 63.59% | | 31 to 60 days | 2,572 | 1,600 | 60.75% | | 61 to 90 days | 1,737 | 1,122 | 54.81% | | Over 90 days | 421 | 447 | -5.82% | | **Total trade payables** | **8,936** | **5,740** | **55.68%** | [11. Share Capital](index=7&type=section&id=11.%20Share%20Capital) The company's authorized and issued share capital remained unchanged during the period, with ordinary shares having a par value of HK$0.1 each Share Capital Structure | Share Capital Type | Number of Shares | Amount (HK$ Thousand) | | :--- | :--- | :--- | | Authorised ordinary shares of HK$0.1 each | 1,000,000,000 | 100,000 | | Issued and fully paid ordinary shares of HK$0.1 each | 320,000,000 | 32,000 | - The authorised and issued share capital remained unchanged as at January 1, 2025 and June 30, 2025[20](index=20&type=chunk) [Management Discussion and Analysis](index=8&type=section&id=Management%20Discussion%20and%20Analysis) This section reviews the group's business, market, and financial performance, highlighting liquidity, capital structure, and future prospects [Business Review](index=8&type=section&id=Business%20Review) Revenue declined due to US tariff uncertainties, but gross margin improved, and operating and net losses significantly narrowed, with the group maintaining a strong cash position - The announcement of additional reciprocal tariffs by the US government created uncertainty, disrupting sales channels and affecting operational delays and customer decision-making processes[22](index=22&type=chunk) Key Financial Performance Indicators | Indicator | H1 2025 (HK$ Thousand) | H1 2024 (HK$ Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 86,300 | 96,759 | -10.81% | | Gross profit margin | 27.4% | 26.5% | 0.9 percentage points increase | | Operating loss | (5,000) | (13,300) | 62.41% (Loss narrowed) | | Net loss | (6,000) | (15,100) | 60.26% (Loss narrowed) | - As at June 30, 2025, the Group's cash amounted to **HK$142,500,000** with no bank borrowings[24](index=24&type=chunk) [Market Review](index=8&type=section&id=Market%20Review) Overall sales decreased, but the Industrial Applications segment grew by 15% to become the largest contributor, while Data Processing sales significantly declined [Communications and Networking](index=8&type=section&id=Communications%20and%20Networking) Sales in the communications market segment experienced a slight decrease, contributing 21% to the group's total sales | Indicator | H1 2025 (HK$ Thousand) | H1 2024 (HK$ Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Sales | 18,400 | 18,900 | -2.65% | | % of total sales | 21% | - | - | [Data Processing](index=8&type=section&id=Data%20Processing) The data processing segment saw a substantial 46% decrease in sales, accounting for 10% of the group's total sales | Indicator | H1 2025 (HK$ Thousand) | H1 2024 (HK$ Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Sales | 9,000 | 16,800 | -46.43% | | % of total sales | 10% | - | - | [Industrial Applications](index=8&type=section&id=Industrial%20Applications) Sales in the industrial applications segment increased by 15%, making it the largest contributor to the group's total sales at 43% | Indicator | H1 2025 (HK$ Thousand) | H1 2024 (HK$ Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Sales | 36,900 | 32,200 | 14.60% | | % of total sales | 43% | - | - | [High Reliability Products Segment](index=8&type=section&id=High%20Reliability%20Products%20Segment) Sales in the high reliability products segment decreased, contributing 26% to the group's total sales | Indicator | H1 2025 (HK$ Thousand) | H1 2024 (HK$ Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Sales | 22,000 | 28,900 | -23.88% | | % of total sales | 26% | - | - | [Financial Review](index=8&type=section&id=Financial%20Review) Turnover decreased by 11%, but gross margin improved, and both operating and net losses significantly narrowed, leading to a better loss per share Financial Performance Summary | Indicator | H1 2025 (HK$ Thousand) | H1 2024 (HK$ Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Turnover | 86,300 | 96,700 | -10.75% | | Gross profit | 23,700 | 25,700 | -7.78% | | Gross profit margin | 27.4% | 26.5% | 0.9 percentage points increase | | Operating results (loss) | (5,000) | (13,300) | 62.41% (Loss narrowed) | | Net loss | (6,000) | (15,100) | 60.26% (Loss narrowed) | | Loss per share | HK$0.019 | HK$0.047 | 59.57% (Loss narrowed) | [Liquidity, Financial Resources and Capital Structure](index=9&type=section&id=Liquidity%2C%20Financial%20Resources%20and%20Capital%20Structure) The group maintains a strong financial position with increased total equity and cash, no bank borrowings, and sufficient working capital Liquidity and Capital Structure | Indicator | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Total equity | 755,300 | 754,600 | 0.09% | | Cash and cash equivalents | 142,500 | 141,700 | 0.56% | | Capital expenditure | 3,400 (Current period) | 4,200 (Prior period) | -19.05% | | Bank borrowings | Nil | Nil | - | - The Group's cash is primarily held in US dollars, Hong Kong dollars, and Renminbi, with sufficient resources to meet working capital needs for the foreseeable future[31](index=31&type=chunk) [Employees and Remuneration Policy](index=9&type=section&id=Employees%20and%20Remuneration%20Policy) The group employs approximately 810 people globally and provides a staff training sponsorship scheme covering various operational and technical courses Employee Headcount by Region | Region | Number of Employees | | :--- | :--- | | Global | 810 | | Hong Kong | 40 | | People's Republic of China | 340 | | Overseas | 430 | - The Group has a staff training sponsorship scheme and provides employees with courses on operating systems, product and technology development, and product safety[33](index=33&type=chunk) [Capital Commitments](index=9&type=section&id=Capital%20Commitments) Capital commitments for property, plant, and equipment decreased during the period, reflecting reduced future investment obligations Capital Commitments for Property, Plant and Equipment | Item | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Capital commitments for property, plant and equipment | 1,000 | 1,600 | -37.50% | [Contingent Liabilities](index=9&type=section&id=Contingent%20Liabilities) The group had no significant contingent liabilities as of June 30, 2025 - As at June 30, 2025, the Group had no significant contingent liabilities (December 31, 2024: nil)[35](index=35&type=chunk) [Prospects](index=9&type=section&id=Prospects) The impact of US tariffs has stabilized, sales activities are recovering, and the group is expanding its market presence through new sales representatives in key regions - The impact of US tariffs is temporary and has stabilized, with sales activities gradually beginning to recover[36](index=36&type=chunk) - The Group has appointed new sales representatives in Europe, Japan, and Southeast Asia to strengthen its market presence and enhance customer interaction, preparing for future growth[36](index=36&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=9&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) The company and its subsidiaries did not engage in any purchase, sale, or redemption of its listed securities during the six months ended June 30, 2025 - The Company or any of its subsidiaries did not purchase, sell or redeem any of the Company's listed securities during the six months ended June 30, 2025[37](index=37&type=chunk) [Audit Committee](index=9&type=section&id=Audit%20Committee) The Audit Committee reviewed the unaudited interim results and discussed financial reporting procedures and internal control systems with the Board - The Audit Committee has reviewed the unaudited interim results and discussed the Group's financial reporting procedures and internal control systems with the Board[38](index=38&type=chunk) [Corporate Governance](index=9&type=section&id=Corporate%20Governance) This section addresses the company's adherence to corporate governance code provisions, including deviations regarding the roles of Chairman and CEO and directors' retirement by rotation [Code Provision C.2.1](index=9&type=section&id=Code%20Provision%20C.2.1) The roles of Chairman and Chief Executive Officer are held by the same individual, deviating from the code but deemed to provide sufficient power balance by the Board - The positions of Chairman and Chief Executive Officer of the Company are held by Mr. Siu Yau Chung, which deviates from Code Provision C.2.1[39](index=39&type=chunk) - The Board believes that all major decisions are made after discussion by the Board (including independent non-executive directors), providing sufficient balance of power and maintaining strong management and leadership[39](index=39&type=chunk) [Code Provision B.2.2](index=9&type=section&id=Code%20Provision%20B.2.2) The company's Chairman is not subject to retirement by rotation, which deviates from the code provision requiring directors to retire at least once every three years - According to Code Provision B.2.2, every director should be subject to retirement by rotation, at least once every three years[40](index=40&type=chunk) - Pursuant to the Company's Articles of Association, the Chairman of the Company is not required to retire by rotation or be counted in the number of directors subject to retirement each year, constituting a deviation[41](index=41&type=chunk) [Model Code for Securities Transactions by Directors](index=10&type=section&id=Model%20Code%20for%20Securities%20Transactions%20by%20Directors) The company adopted and all directors confirmed full compliance with the Model Code for Securities Transactions by Directors of Listed Issuers - The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 to the Listing Rules, and all Directors confirmed full compliance with the Model Code during the review period[42](index=42&type=chunk) [Publication of Interim Results Announcement and Interim Report](index=10&type=section&id=Publication%20of%20Interim%20Results%20Announcement%20and%20Interim%20Report) The interim results announcement is published on the HKEX and company websites, with the interim report to follow for shareholders - This interim results announcement has been published on the website of Hong Kong Exchanges and Clearing Limited and the Company's website[43](index=43&type=chunk) - The Company's interim report will be despatched to shareholders later and will be available on the HKEX website and the Company's website[43](index=43&type=chunk) [Directors](index=10&type=section&id=Directors) The Board comprises executive directors Mr. Siu Yau Chung (Chairman), Ms. Tsui Wai Mei (Vice Chairman), Mr. Shang Cheng Fai, and Ms. Siu Lena, along with independent non-executive directors Mr. Li Kit Wah, Mr. Wong Wah Sang, and Mr. Wan Chit Kai - As of the date of this announcement, the members of the Board include Executive Directors Mr. Siu Yau Chung (Chairman), Ms. Tsui Wai Mei (Vice Chairman), Mr. Shang Cheng Fai and Ms. Siu Lena, and Independent Non-executive Directors Mr. Li Kit Wah, Mr. Wong Wah Sang and Mr. Wan Chit Kai[44](index=44&type=chunk) [By Order of the Board](index=10&type=section&id=By%20Order%20of%20the%20Board) This announcement is issued by the Chairman, Mr. Siu Yau Chung, on behalf of the Board on August 13, 2025 - This announcement is issued by the Chairman, Mr. Siu Yau Chung, on behalf of the Board on August 13, 2025[45](index=45&type=chunk)

Company Information [Company Overview and Business Scope](index=4&type=section&id=Company%20Overview%20and%20Business%20Scope) The company is an investment holding company with subsidiaries offering diversified financial services in Hong Kong, notably virtual asset services, led by CEO Ms. Gao Juan - The company is an investment holding company, with subsidiaries providing diversified financial services in Hong Kong, including securities/futures brokerage, financing, asset management, financial advisory, and virtual asset services[18](index=18&type=chunk) - One subsidiary is approved by the SFC to provide virtual asset trading, advisory, and asset management services, making it Hong Kong's first and only financial group offering all these services simultaneously[19](index=19&type=chunk) - The ultimate controlling shareholder is Ms. Gao Juan, the Executive Director and Chief Executive Officer[20](index=20&type=chunk) Financial Highlights [Key Financial Performance](index=5&type=section&id=Key%20Financial%20Performance) For the six months ended June 30, 2025, the company achieved a significant 318.5% revenue growth to approximately HKD 124 million and turned profitable with HKD 40.72 million, driven by strong virtual asset service revenue growth | Metric | 2025 (HKD) | 2024 (HKD) | Difference (HKD) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | 123,716,188 | 29,559,993 | 94,156,195 | 318.5 | | Commission Expenses | 33,797,579 | 3,548,210 | 30,249,369 | 852.5 | | Staff Costs | 23,784,939 | 17,741,235 | 6,043,704 | 34.1 | | Other Operating Expenses | 14,567,120 | 8,039,185 | 6,527,935 | 81.2 | | Profit/(Loss) for the Period | 40,723,054 | (5,818,738) | 46,541,792 | 799.9 | | Basic Earnings/(Loss) Per Share (HK cents) | 21.27 | (3.04) | | | | Diluted Earnings/(Loss) Per Share (HK cents) | 21.13 | (3.04) | | | - Revenue increased by **318.5%** year-on-year to approximately **HKD 124 million**, primarily driven by growth in securities/futures brokerage, virtual assets, financing, fee income, asset management, and financial advisory services[6](index=6&type=chunk) - Profit for the period was approximately **HKD 40.72 million**, a significant improvement from a loss of HKD 5.82 million in the prior period, mainly due to a **2,000.0%** increase in virtual asset-related service revenue[7](index=7&type=chunk) - Interim dividend declared was **1.50 HK cents per share**, a significant increase from 0.10 HK cents per share in the prior period[7](index=7&type=chunk) Interim Condensed Consolidated Financial Statements [Interim Condensed Consolidated Statement of Profit or Loss](index=6&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) For the six months ended June 30, 2025, the Group's revenue reached HKD 124 million, a substantial increase from HKD 29.56 million in the prior period, achieving a profit of HKD 40.72 million, reversing a loss of HKD 5.82 million, with basic earnings per share of 21.27 HK cents | Metric | 2025 (HKD) | 2024 (HKD) | | :--- | :--- | :--- | | Revenue | 123,716,188 | 29,559,993 | | Other Income | 328,241 | 316,258 | | Other Gains/(Losses), Net | 1,602,683 | (1,103,877) | | Total Revenue, Gains/(Losses) and Other Income | 125,647,112 | 28,772,374 | | Commission Expenses | (33,797,579) | (3,548,210) | | Staff Costs | (23,784,939) | (17,741,235) | | Total Expenses | (78,284,030) | (34,649,010) | | Profit/(Loss) Before Tax | 47,036,101 | (5,698,633) | | Income Tax Expense | (6,313,047) | (120,105) | | Profit/(Loss) for the Period | 40,723,054 | (5,818,738) | | Basic Earnings/(Loss) Per Share Attributable to Owners of the Company (HK cents) | 21.27 | (3.04) | [Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=7&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended June 30, 2025, the Group's profit for the period was HKD 40.72 million, a reversal from a loss in the prior period, with total comprehensive income of HKD 34.15 million, significantly improved from a prior period comprehensive loss, primarily due to revaluation losses on owner-occupied land and buildings | Metric | 2025 (HKD) | 2024 (HKD) | | :--- | :--- | :--- | | Profit/(Loss) for the Period | 40,723,054 | (5,818,738) | | Exchange Differences on Translation of Overseas Operations | 322,762 | (506,359) | | Revaluation Loss on Leasehold Land and Buildings for Own Use (Net of Tax) | (6,895,939) | (1,056,552) | | Other Comprehensive Loss for the Period, Net of Tax | (6,573,177) | (1,562,911) | | Total Comprehensive Income/(Loss) for the Period | 34,149,877 | (7,381,649) | | Attributable to Owners of the Company | 34,621,935 | (7,292,313) | | Attributable to Non-controlling Interests | (472,058) | (89,336) | - Total comprehensive income for the period was **HKD 34.1499 million**, a significant improvement from a total comprehensive loss of HKD 7.3816 million in the prior period[9](index=9&type=chunk) - Revaluation loss on leasehold land and buildings for own use was **HKD 8.2586 million**, significantly impacting other comprehensive loss[9](index=9&type=chunk) [Interim Condensed Consolidated Statement of Financial Position](index=8&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's total assets less current liabilities were HKD 229 million, with net assets of HKD 212 million, driven by a significant increase in net current assets to HKD 175 million due to growth in receivables, other investments, and cash and cash equivalents | Metric | June 30, 2025 (HKD) | December 31, 2024 (HKD) | | :--- | :--- | :--- | | Total Non-current Assets | 53,993,125 | 62,116,832 | | Total Current Assets | 648,019,119 | 457,926,031 | | Total Current Liabilities | 473,493,967 | 341,619,086 | | Net Current Assets | 174,525,152 | 116,306,945 | | Total Assets Less Current Liabilities | 228,518,277 | 178,423,777 | | Total Non-current Liabilities | 17,008,696 | 952,551 | | Net Assets | 211,509,581 | 177,471,226 | | Total Equity | 211,509,581 | 177,471,226 | - Total current assets increased to **HKD 648.02 million**, primarily driven by growth in trade receivables (**HKD 489.00 million**), other investments (**HKD 40.63 million**), and cash and cash equivalents (**HKD 87.61 million**)[10](index=10&type=chunk) - Total non-current liabilities significantly increased to **HKD 17.01 million**, mainly due to an increase in issued bonds (**HKD 10.24 million**) and deferred tax liabilities (**HKD 5.87 million**)[11](index=11&type=chunk) [Interim Condensed Consolidated Statement of Changes in Equity](index=10&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) For the six months ended June 30, 2025, total equity attributable to owners of the company increased to HKD 207 million, with a profit for the period of HKD 41.25 million, offset by a HKD 6.90 million decrease in property revaluation reserve due to revaluation losses, and an increase in share capital from share option exercises and share issuance | Equity Item | January 1, 2025 (Audited) (HKD) | Profit/(Loss) for the Period (HKD) | Other Comprehensive Loss for the Period (HKD) | Issue of Shares (HKD) | Equity-settled Share Option Arrangements (HKD) | Final Dividend (HKD) | June 30, 2025 (Unaudited) (HKD) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Share Capital | 2,080,218 | – | – | 14,190 | – | – | 2,094,408 | | Share Premium | 74,731,662 | – | – | 3,235,320 | 862,996 | – | 78,829,978 | | Property Revaluation Reserve | 33,947,775 | – | (6,895,939) | – | – | – | 27,051,836 | | Share Option Reserve | 3,503,315 | – | – | – | (857,711) | – | 2,645,604 | | Exchange Fluctuation Reserve | (312,706) | – | 271,466 | – | – | – | (41,240) | | Retained Profits/(Accumulated Losses) | (19,065,846) | 41,246,408 | – | – | 137,473 | (3,503,790) | 18,814,245 | | Total Attributable to Owners of the Company | 172,548,658 | 41,246,408 | (6,895,939) | 3,249,510 | 142,758 | (3,503,790) | 207,059,071 | | Non-controlling Interests | 4,922,568 | (523,354) | 51,296 | – | – | – | 4,450,510 | | Total Equity | 177,471,226 | 40,723,054 | (6,844,643) | 3,249,510 | 142,758 | (3,503,790) | 211,509,581 | - Profit for the period attributable to owners of the company was **HKD 41.2464 million**[13](index=13&type=chunk) - Property revaluation reserve decreased by **HKD 6.8959 million** due to revaluation losses[13](index=13&type=chunk) - Share capital increased by **HKD 14,190** due to the exercise of share options and issuance of shares[13](index=13&type=chunk)[110](index=110&type=chunk) [Interim Condensed Consolidated Statement of Cash Flows](index=12&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) For the six months ended June 30, 2025, the Group's net cash generated from operating activities significantly increased to HKD 78.74 million, while net cash used in investing activities decreased to HKD 1.08 million, and net cash generated from financing activities was HKD 18.29 million, resulting in period-end cash and cash equivalents increasing to HKD 92.07 million | Cash Flow Category | 2025 (HKD) | 2024 (HKD) | | :--- | :--- | :--- | | Net Cash Generated From Operating Activities | 78,743,235 | 1,143,582 | | Net Cash Used In Investing Activities | (1,083,009) | (5,907,865) | | Net Cash Generated From Financing Activities | 18,294,951 | 28,216,001 | | Net Increase in Cash and Cash Equivalents | 95,955,177 | 23,451,718 | | Cash and Cash Equivalents at Beginning of Period | (4,075,788) | 17,028,695 | | Effect of Exchange Rate Changes, Net | 194,584 | (417,088) | | Cash and Cash Equivalents at End of Period | 92,073,973 | 40,063,325 | - Net cash generated from operating activities significantly increased to **HKD 78.7432 million**, primarily due to an increase in amounts due to margin clients[16](index=16&type=chunk)[184](index=184&type=chunk) - Net cash generated from financing activities was **HKD 18.2950 million**, mainly from proceeds from share issuance and new bank borrowings[16](index=16&type=chunk) - Cash and cash equivalents at period-end increased to **HKD 92.0740 million**[17](index=17&type=chunk) Notes to the Interim Condensed Consolidated Financial Statements [1. Company Information](index=14&type=section&id=1.%20Company%20Information) The company is an investment holding company with subsidiaries primarily offering diversified financial services in Hong Kong, including virtual asset trading, advisory, and asset management, with Ms. Gao Juan as the ultimate controlling shareholder - The company is an investment holding company, with subsidiaries providing diversified financial services in Hong Kong, including securities/futures brokerage, financing, asset management, financial advisory, and virtual asset services[18](index=18&type=chunk) - One subsidiary is approved by the SFC to provide virtual asset trading, advisory, and asset management services, making it Hong Kong's first and only financial group offering all these services simultaneously[19](index=19&type=chunk) - The ultimate controlling shareholder is Ms. Gao Juan, the Executive Director and Chief Executive Officer[20](index=20&type=chunk) [2. Basis of Preparation](index=17&type=section&id=2.%20Basis%20of%20Preparation) The interim condensed consolidated financial statements are prepared in accordance with HKAS 34 and GEM Listing Rule Chapter 18, primarily using the historical cost convention, except for certain assets and liabilities measured at fair value, with consolidation based on the Group's control over entities - The financial statements are prepared in accordance with HKAS 34 and Chapter 18 of the GEM Listing Rules[22](index=22&type=chunk) - The historical cost convention is primarily adopted, except for investment properties, certain property, plant and equipment, and financial assets and liabilities at fair value through profit or loss[22](index=22&type=chunk) - The basis of consolidation is the Group's control over an entity, meaning it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity[23](index=23&type=chunk) [3. Changes in Accounting Policies](index=19&type=section&id=3.%20Changes%20in%20Accounting%20Policies) Accounting policies for the six months ended June 30, 2025, are consistent with those used in the audited consolidated financial statements for the year ended December 31, 2024, with changes only due to new and revised HKFRSs issued by the HKICPA, none of which had a material impact on the Group's financial position or performance - Accounting policies are consistent with the 2024 annual consolidated financial statements, with changes only due to new and revised HKFRSs[28](index=28&type=chunk) - The adoption of HKAS 21 and HKFRS 1 (Amendments) "Lack of Exchangeability" had no material impact on the financial position and performance[28](index=28&type=chunk) [4. Operating Segment Information](index=20&type=section&id=4.%20Operating%20Segment%20Information) The Group operates six reportable segments: securities/futures brokerage, financing, asset management, insurance advisory, financial advisory, and virtual asset services, with virtual asset services contributing HKD 64.24 million in revenue for the period ended June 30, 2025, and no single customer contributing over 10% of total revenue - The Group has six reportable operating segments: securities/futures brokerage, financing, asset management, insurance advisory, financial advisory, and virtual asset services[30](index=30&type=chunk) | Segment | 2025 Revenue (HKD) | 2024 Revenue (HKD) | | :--- | :--- | :--- | | Securities/Futures Brokerage Services | 43,618,349 | 14,293,057 | | Financing Services | 9,645,061 | 8,209,567 | | Asset Management Services | 5,306,649 | 3,406,072 | | Insurance Advisory Services | 184,838 | 296,276 | | Financial Advisory Services | 720,000 | 280,000 | | Virtual Asset Services | 64,241,291 | 3,075,021 | | Total | 123,716,188 | 29,559,993 | - For the six months ended June 30, 2025, no customer contributed more than **10%** to the Group's total revenue[33](index=33&type=chunk) [5. Revenue](index=23&type=section&id=5.%20Revenue) The Group's total revenue for the first half of 2025 reached HKD 124 million, a substantial increase from HKD 29.56 million in the prior period, with virtual asset trading and related income being the largest contributor at HKD 64.24 million, and commission and brokerage income also significantly increasing, with revenue from contracts with customers forming the vast majority of total revenue | Revenue Source | 2025 (HKD) | 2024 (HKD) | | :--- | :--- | :--- | | Revenue from Contracts with Customers | 105,503,522 | 16,588,353 | | Revenue from Other Sources | 18,212,666 | 12,971,640 | | Total Revenue | 123,716,188 | 29,559,993 | | Main Service Lines | 2025 (HKD) | 2024 (HKD) | | :--- | :--- | :--- | | Commission and Brokerage Income | 21,329,812 | 4,016,080 | | Placing and Underwriting Commission Income | 1,260,579 | 4,432,693 | | Virtual Asset Trading and Related Income | 64,241,291 | 3,075,021 | | Fee Income | 13,671,564 | 1,082,211 | | Asset Management Fees | 4,095,438 | 3,406,072 | | Financial Advisory Income | 720,000 | 280,000 | | Insurance Advisory Fees | 184,838 | 296,276 | | Total Revenue from Contracts with Customers | 105,503,522 | 16,588,353 | - Virtual asset trading and related income was the largest component of revenue from contracts with customers, reaching **HKD 64.24 million**, a significant increase from HKD 3.08 million in the prior period[35](index=35&type=chunk) [6. Other Income and Other Gains/(Losses), Net](index=25&type=section&id=6.%20Other%20Income%20and%20Other%20Gains%2F(Losses),%20Net) For the six months ended June 30, 2025, the Group's total other income was HKD 0.3282 million, and net other gains were HKD 1.6027 million, a significant improvement from a loss of HKD 1.1039 million in the prior period, primarily driven by fair value gains on other investments and investment properties | Item | 2025 (HKD) | 2024 (HKD) | | :--- | :--- | :--- | | Total Rental Income | 237,000 | 237,000 | | Miscellaneous Income | 91,241 | 79,258 | | Total Other Income | 328,241 | 316,258 | | Fair Value Gains/(Losses) on Other Investments | 1,239,093 | (84,727) | | Fair Value Gains/(Losses) on Investment Properties | 300,000 | (1,081,600) | | Other Gains/(Losses), Net | 1,602,683 | (1,103,877) | - Net other gains/(losses) improved from a loss of **HKD 1.1039 million** in 2024 to a gain of **HKD 1.6027 million** in 2025[36](index=36&type=chunk) - Fair value gain on investment properties was **HKD 0.30 million**, compared to a loss of HKD 1.0816 million in the prior period[36](index=36&type=chunk) [7. Staff Costs](index=26&type=section&id=7.%20Staff%20Costs) For the six months ended June 30, 2025, the Group's total staff costs amounted to HKD 23.78 million, an increase of 34.1% from HKD 17.74 million in the prior period, primarily due to higher salaries, allowances, and benefits in kind | Item | 2025 (HKD) | 2024 (HKD) | | :--- | :--- | :--- | | Salaries, Allowances and Benefits in Kind | 23,247,594 | 17,198,490 | | Mandatory Provident Fund and Occupational Retirement Scheme Contributions | 537,345 | 542,745 | | Total | 23,784,939 | 17,741,235 | - Total staff costs increased by **34.1%** year-on-year to **HKD 23.7849 million**[6](index=6&type=chunk)[37](index=37&type=chunk) [8. Finance Costs](index=26&type=section&id=8.%20Finance%20Costs) For the six months ended June 30, 2025, the Group's total finance costs increased to HKD 3.6287 million from HKD 2.7534 million in the prior period, with interest on bank and other borrowings being the main component at HKD 3.1171 million | Item | 2025 (HKD) | 2024 (HKD) | | :--- | :--- | :--- | | Interest on Bank and Other Borrowings | 3,117,083 | 2,576,951 | | Interest on Issued Bonds | 244,110 | 20,765 | | Interest on Amounts Due to Clients (No Fixed Repayment Terms) | 237,204 | 108,332 | | Interest on Lease Liabilities | 30,272 | 47,341 | | Total | 3,628,669 | 2,753,389 | - Total finance costs increased to **HKD 3.6287 million** year-on-year[38](index=38&type=chunk) - Interest on bank and other borrowings was the primary finance cost, amounting to **HKD 3.1171 million**[38](index=38&type=chunk) [9. Profit/(Loss) Before Tax](index=27&type=section&id=9.%20Profit%2F(Loss)%20Before%20Tax) For the six months ended June 30, 2025, the Group's profit before tax was HKD 47.0361 million, successfully reversing a loss of HKD 5.6986 million in the prior period, reflecting significant revenue growth alongside increased operating expenses such as transaction and clearing fees and information service expenses | Item | 2025 (HKD) | 2024 (HKD) | | :--- | :--- | :--- | | Auditor's Remuneration | 31,300 | 2,167 | | Amortization | 402,833 | 126,092 | | Depreciation of Property, Plant and Equipment | 1,408,737 | 1,521,741 | | Depreciation of Right-of-Use Assets | 380,676 | 959,980 | | Transaction and Clearing Fees | 1,095,979 | 281,741 | | Information Service Expenses | 1,375,265 | 1,338,238 | | Expected Credit Loss Provision for Trade Receivables, Net | 170,720 | (40,822) | | Share-based Payment Expenses | 142,757 | – | - Profit before tax was **HKD 47.0361 million**, a significant improvement from a loss of HKD 5.6986 million in the prior period[8](index=8&type=chunk) - Transaction and clearing fees significantly increased to **HKD 1.0960 million**, reflecting increased business activity[39](index=39&type=chunk) [10. Income Tax Expense](index=28&type=section&id=10.%20Income%20Tax%20Expense) For the six months ended June 30, 2025, the Group's total income tax expense was HKD 6.3130 million, a substantial increase from HKD 0.1201 million in the prior period, with no Hong Kong profits tax provision for Hong Kong entities due to sufficient tax losses, and corporate income tax provided at a 25% rate as per PRC Enterprise Income Tax Law | Item | 2025 (HKD) | 2024 (HKD) | | :--- | :--- | :--- | | Deferred Tax | 6,313,047 | 120,105 | | Total Tax Expense for the Period | 6,313,047 | 120,105 | - Total income tax expense was **HKD 6.3130 million**, a substantial increase from the prior period[41](index=41&type=chunk) - No Hong Kong profits tax provision was made for Hong Kong entities due to sufficient tax losses carried forward to offset taxable profits[40](index=40&type=chunk) - Corporate income tax is provided at a rate of **25%** as stipulated by the Enterprise Income Tax Law of the People's Republic of China[40](index=40&type=chunk) [11. Dividends](index=29&type=section&id=11.%20Dividends) For the six months ended June 30, 2025, the company declared a final dividend of HKD 3.5038 million and an interim dividend of HKD 3.1424 million, with the interim dividend of 1.50 HK cents per share significantly higher than 0.10 HK cents in the prior period | Item | 2025 (HKD) | 2024 (HKD) | | :--- | :--- | :--- | | Final Dividend Declared | 3,503,790 | 967,540 | | Interim Dividend Declared | 3,142,365 | 208,022 | - Interim dividend of **1.50 HK cents per share** declared for the six months ended June 30, 2025, a significant increase from 0.10 HK cents per share in the prior period[43](index=43&type=chunk) [12. Earnings/(Loss) Per Share Attributable to Owners of the Company](index=29&type=section&id=12.%20Earnings%2F(Loss)%20Per%20Share%20Attributable%20to%20Owners%20of%20the%20Company) For the six months ended June 30, 2025, basic earnings per share attributable to owners of the company was 21.27 HK cents and diluted earnings per share was 21.13 HK cents, both significantly improved from a loss of 3.04 HK cents in the prior period, based on profit for the period and the weighted average number of ordinary shares outstanding | Metric | 2025 (HK cents) | 2024 (HK cents) | | :--- | :--- | :--- | | Basic Earnings/(Loss) Per Share | 21.27 | (3.04) | | Diluted Earnings/(Loss) Per Share | 21.13 | (3.04) | - Basic earnings per share was **21.27 HK cents**, compared to a loss of 3.04 HK cents in the prior period[42](index=42&type=chunk) - Diluted earnings per share calculation considered the dilutive effect of share options, with a weighted average of **195,227,671 shares**[45](index=45&type=chunk) [13. Property, Plant and Equipment](index=31&type=section&id=13.%20Property,%20Plant%20and%20Equipment) As of June 30, 2025, the net book value of property, plant and equipment was HKD 35.4276 million, a decrease from HKD 43.3829 million at the beginning of the year, with a revaluation loss of HKD 8.2586 million recognized during the period in property revaluation reserve and other comprehensive income, and certain leasehold land and buildings pledged as collateral for bank financing | Item | June 30, 2025 (HKD) | January 1, 2025 (HKD) | | :--- | :--- | :--- | | Net Book Value | 35,427,628 | 43,382,862 | | Additions | 2,051,919 | 470,296 | | Depreciation Charged During the Period | (1,789,413) | (4,844,610) | | Revaluation Loss | (8,258,610) | (5,954,470) | - Revaluation loss of **HKD 8.2586 million** recognized during the period, recorded in property revaluation reserve and other comprehensive income[48](index=48&type=chunk) - Leasehold land and buildings with a carrying amount of **HKD 29.90 million** are pledged as collateral for bank financing[49](index=49&type=chunk) [14. Investment Properties](index=36&type=section&id=14.%20Investment%20Properties) As of June 30, 2025, the carrying amount of investment properties was HKD 7.50 million, an increase from HKD 7.20 million at the end of 2024, with a fair value adjustment resulting in a gain of HKD 0.30 million during the period, and the investment property pledged as collateral for the Group's bank financing | Item | June 30, 2025 (HKD) | December 31, 2024 (HKD) | | :--- | :--- | :--- | | Carrying Amount at Beginning/End of Period | 7,200,000 | 9,081,600 | | Net Fair Value Adjustment Gains/(Losses) | 300,000 | (1,881,600) | | Carrying Amount at End/Beginning of Period | 7,500,000 | 7,200,000 | - Fair value adjustment on investment properties resulted in a gain of **HKD 0.30 million**[54](index=54&type=chunk) - Investment properties with a carrying amount of **HKD 7.50 million** are pledged as collateral for the Group's bank financing[55](index=55&type=chunk) [15. Leases](index=39&type=section&id=15.%20Leases) As a lessee, the Group's right-of-use assets increased to HKD 1.4348 million and lease liabilities to HKD 1.5303 million, with total lease-related expenses of HKD 0.8229 million, while as a lessor, the Group earned HKD 0.237 million in rental income from investment properties | Item | June 30, 2025 (HKD) | December 31, 2024 (HKD) | | :--- | :--- | :--- | | Carrying Amount of Right-of-Use Assets | 1,434,795 | 437,538 | | Carrying Amount of Lease Liabilities | 1,530,306 | 455,326 | | Total Recognized in Profit or Loss (Lease-related) | 822,905 | 2,189,048 | | Total Rental Income (as Lessor) | 237,000 | 237,000 | - Right-of-use assets increased to **HKD 1.4348 million** and lease liabilities increased to **HKD 1.5303 million**[59](index=59&type=chunk)[60](index=60&type=chunk) - Total lease-related expenses were **HKD 0.8229 million**, including interest on lease liabilities, depreciation of right-of-use assets, and short-term lease expenses[61](index=61&type=chunk) [16. Intangible Assets](index=42&type=section&id=16.%20Intangible%20Assets) As of June 30, 2025, the Group's total intangible assets amounted to HKD 5.4341 million, primarily comprising trading rights and software, with trading rights considered to have an indefinite useful life and software having a net book value of HKD 5.4341 million | Item | June 30, 2025 (HKD) | December 31, 2024 (HKD) | | :--- | :--- | :--- | | Trading Rights | 1 | 1 | | Software | 5,434,094 | 5,836,927 | | Total | 5,434,095 | 5,836,928 | - Trading rights are considered to have an indefinite useful life due to their perpetual contribution to net cash flows[64](index=64&type=chunk) - Software had a net book value of **HKD 5.4341 million**, with amortization of HKD 0.4028 million recognized during the period[65](index=65&type=chunk) [17. Investment in a Joint Venture/Associate](index=44&type=section&id=17.%20Investment%20in%20a%20Joint%20Venture%2FAssociate) The Group has joint control over the joint venture VS Fintech Holding Limited and significant influence over associates Nest Asset Management Pte. Ltd. and VDX Group Limited, with the carrying amount of investment in associates at HKD 0.7141 million as of June 30, 2025, and the Group effectively holding a 23% interest in VDX | Item | June 30, 2025 (HKD) | December 31, 2024 (HKD) | | :--- | :--- | :--- | | Investment in a Joint Venture | – | – | | Investment in Associates | 714,077 | 909,922 | - The Group has joint control over the joint venture VS Fintech Holding Limited, not control[69](index=69&type=chunk) - The Group effectively holds a **23%** interest in VDX Group Limited and can exercise significant influence over it[71](index=71&type=chunk)[74](index=74&type=chunk) [18. Other Assets](index=46&type=section&id=18.%20Other%20Assets) As of June 30, 2025, the Group's total other assets amounted to HKD 0.43 million, primarily comprising guarantee fund deposits, participation fees, compensation fund deposits, mutual guarantee fund deposits, and stamp duty deposits with Hong Kong Clearing and the Stock Exchange | Item | June 30, 2025 (HKD) | December 31, 2024 (HKD) | | :--- | :--- | :--- | | HKSCC – Guarantee Fund Deposits | 100,000 | 100,000 | | HKSCC – Participation Fees | 100,000 | 100,000 | | SEHK – Compensation Fund Deposits | 100,000 | 100,000 | | SEHK – Mutual Guarantee Fund Deposits | 100,000 | 100,000 | | SEHK – Stamp Duty Deposits | 30,000 | 30,000 | | Total | 430,000 | 430,000 | - Other assets primarily consist of various deposits with Hong Kong Clearing and the Stock Exchange[73](index=73&type=chunk) [19. Trade Receivables](index=47&type=section&id=19.%20Trade%20Receivables) As of June 30, 2025, the Group's total trade receivables amounted to HKD 489 million, an increase from HKD 411 million at the end of 2024, with amounts due from brokers and margin clients being the main components, and a total provision for expected credit losses of HKD 38.5144 million | Item | June 30, 2025 (HKD) | December 31, 2024 (HKD) | | :--- | :--- | :--- | | Amounts Due from Margin Clients | 205,227,934 | 195,798,257 | | Amounts Due from Cash Clients | 46,704,742 | 59,400,366 | | Amounts Due from Clearing Houses | 2,398,414 | 23,046,645 | | Amounts Due from Brokers | 267,591,867 | 168,903,428 | | Total Trade Receivables | 488,987,317 | 410,786,577 | | Less: Provision for Expected Credit Losses | (38,514,362) | (38,343,642) | - Amounts due from brokers significantly increased to **HKD 267.59 million**, and amounts due from margin clients increased to **HKD 205.23 million**, collateralized by securities of approximately HKD 697 million[75](index=75&type=chunk)[76](index=76&type=chunk) - Total provision for expected credit losses was **HKD 38.5144 million**, with the majority being Stage 3 loss allowance[75](index=75&type=chunk)[84](index=84&type=chunk) [20. Prepayments and Other Receivables](index=51&type=section&id=20.%20Prepayments%20and%20Other%20Receivables) As of June 30, 2025, the Group's total prepayments and other receivables amounted to HKD 25.4403 million, a significant increase from HKD 15.4419 million at the end of 2024, including HKD 4.2299 million due from a joint venture, which are non-trade, interest-free, unsecured, and without fixed repayment terms | Item | June 30, 2025 (HKD) | December 31, 2024 (HKD) | | :--- | :--- | :--- | | Prepayments, Other Receivables and Deposits | 19,833,605 | 10,279,259 | | Amounts Due from a Joint Venture | 4,229,940 | 4,229,940 | | Amounts Due from a Holding Company | 220,870 | 188,716 | | Amounts Due from Related Companies | 1,155,877 | 744,021 | | Total | 25,440,292 | 15,441,936 | - Amounts due from a joint venture were **HKD 4.2299 million**, which are non-trade in nature, interest-free, unsecured, and without fixed repayment terms[85](index=85&type=chunk)[86](index=86&type=chunk) - No impairment was recognized for other receivables at period-end[85](index=85&type=chunk) [21. Other Investments](index=52&type=section&id=21.%20Other%20Investments) As of June 30, 2025, the Group's total other investments amounted to HKD 45.1182 million, a substantial increase from HKD 18.2187 million at the end of 2024, with investments in cryptocurrencies significantly increasing to HKD 33.1557 million and listed equity securities at HKD 5.5502 million, and certain listed equity securities and unlisted investments pledged as collateral for bank financing | Item | June 30, 2025 (HKD) | December 31, 2024 (HKD) | | :--- | :--- | :--- | | Unlisted Investments Designated at FVTPL (Non-current) | 4,487,325 | 4,357,120 | | Listed Equity Securities (Current) | 5,550,172 | 4,307,598 | | Other Unlisted Investments (Current) | 1,925,000 | 1,300,000 | | Investments in Cryptocurrencies (Current) | 33,155,692 | 8,254,007 | | Total | 45,118,189 | 18,218,725 | - Investments in cryptocurrencies significantly increased to **HKD 33.1557 million**, resulting in a fair value loss of HKD 0.5113 million during the period[87](index=87&type=chunk)[92](index=92&type=chunk) - Certain listed equity securities and unlisted investments are pledged as collateral for bank financing[93](index=93&type=chunk) [22. Cash and Cash Equivalents and Pledged Deposits](index=54&type=section&id=22.%20Cash%20and%20Cash%20Equivalents%20and%20Pledged%20Deposits) As of June 30, 2025, the Group's total cash and cash equivalents (excluding bank overdrafts) amounted to HKD 87.6138 million, a significant increase from HKD 12.5598 million at the end of 2024, with pledged deposits of HKD 4.4711 million, and client funds held in segregated accounts totaling HKD 873 million not treated as assets or liabilities | Item | June 30, 2025 (HKD) | December 31, 2024 (HKD) | | :--- | :--- | :--- | | Bank Balances | 87,601,906 | 12,516,402 | | Time Deposits | 4,471,092 | 4,400,423 | | Cash on Hand | 11,937 | 43,377 | | Total | 92,084,935 | 16,960,202 | | Less: Pledged Time Deposits for Bank Overdraft Facilities | (4,471,092) | (4,400,423) | | Cash and Cash Equivalents (Excluding Bank Overdrafts) | 87,613,843 | 12,559,779 | - Pledged deposits of **HKD 4.4711 million** serve as collateral for bank financing[95](index=95&type=chunk) - Client monies held in segregated accounts amounted to **HKD 873 million** and are not treated as assets or liabilities in the financial statements[95](index=95&type=chunk) [23. Trade Payables](index=55&type=section&id=23.%20Trade%20Payables) As of June 30, 2025, the Group's total trade payables amounted to HKD 291 million, a substantial increase from HKD 161 million at the end of 2024, with amounts due to margin and cash clients being the main component at HKD 274 million, and amounts due to clearing houses at HKD 10.95 million | Item | June 30, 2025 (HKD) | December 31, 2024 (HKD) | | :--- | :--- | :--- | | Amounts Due to Margin and Cash Clients | 273,930,522 | 157,397,804 | | Amounts Due to Clearing Houses | 10,949,623 | 3,492,359 | | Amounts Due to Brokers | 5,731,607 | – | | Amounts Due to Insurance Companies | 791,782 | 127,832 | | Total | 291,403,534 | 161,017,995 | - Amounts due to margin and cash clients were **HKD 273.93 million**, with the majority repayable on demand[96](index=96&type=chunk)[97](index=97&type=chunk) - Amounts due to clearing houses were **HKD 10.95 million**, with a legally enforceable right to offset corresponding receivables[97](index=97&type=chunk) [24. Other Payables and Accrued Expenses](index=56&type=section&id=24.%20Other%20Payables%20and%20Accrued%20Expenses) As of June 30, 2025, the Group's other payables and accrued expenses amounted to HKD 27.2896 million, a significant increase from HKD 7.7613 million at the end of 2024, which are interest-free and have an average repayment period of one month - Other payables and accrued expenses amounted to **HKD 27.2896 million**, are interest-free, and have an average repayment period of one month[10](index=10&type=chunk)[99](index=99&type=chunk) [25. Interest-Bearing Bank and Other Borrowings](index=56&type=section&id=25.%20Interest-Bearing%20Bank%20and%20Other%20Borrowings) As of June 30, 2025, the Group's total interest-bearing bank and other borrowings amounted to HKD 154 million, slightly lower than HKD 167 million at the end of 2024, secured by client securities, the Group's own securities, unlisted investments, time deposits, leasehold land and buildings, and investment properties, and bearing interest at floating rates | Item | June 30, 2025 (HKD) | December 31, 2024 (HKD) | | :--- | :--- | :--- | | Bank Overdrafts – Secured | 10,962 | 21,035,990 | | Bank Loans – Secured | 154,154,000 | 145,654,000 | | Total | 154,164,962 | 166,689,990 | - Bank borrowings are secured by client securities, the Group's own securities, unlisted investments, time deposits, leasehold land and buildings, and investment properties[101](index=101&type=chunk) - Bank loans bear interest at floating rates ranging from **1.07% to 7.90%** per annum[101](index=101&type=chunk) [26. Other Liabilities](index=57&type=section&id=26.%20Other%20Liabilities) As of June 30, 2025, the Group's other liabilities were zero, a significant decrease from HKD 5.7273 million at the end of 2024, primarily related to loss protection discretionary account management agreements (guarantee contracts) - Other liabilities were **zero**, a significant decrease from HKD 5.7273 million at the end of 2024[10](index=10&type=chunk)[102](index=102&type=chunk) - These liabilities were primarily related to loss protection discretionary account management agreements (guarantee contracts)[102](index=102&type=chunk) [27. Issued Bonds](index=57&type=section&id=27.%20Issued%20Bonds) As of June 30, 2025, the Group's issued bonds had a carrying amount of HKD 10.2441 million, a significant increase from zero at the end of 2024, with HKD 10 million of 5.5% non-convertible bonds issued during the period and measured at amortized cost | Item | June 30, 2025 (HKD) | December 31, 2024 (HKD) | | :--- | :--- | :--- | | Carrying Amount at Beginning/End of Period | – | 1,079,235 | | Additions | 10,000,000 | – | | Redemptions | – | (1,100,000) | | Interest Expense Recognized During the Period/Year | 244,110 | 20,765 | | Carrying Amount at End/Beginning of Period | 10,244,110 | – | - During the period, **HKD 10 million** of 5.5% non-convertible bonds were issued[103](index=103&type=chunk) - Issued bonds are measured at amortized cost, with a carrying amount of **HKD 10.2441 million** at period-end[104](index=104&type=chunk) [28. Deferred Tax Liabilities](index=59&type=section&id=28.%20Deferred%20Tax%20Liabilities) As of June 30, 2025, the Group's total deferred tax liabilities amounted to HKD 5.8701 million, a significant increase from HKD 0.9197 million at the end of 2024, primarily due to deferred tax of HKD 6.3130 million charged to profit or loss during the period, and a decrease of HKD 1.3627 million in deferred tax recognized in other comprehensive income | Item | June 30, 2025 (HKD) | December 31, 2024 (HKD) | | :--- | :--- | :--- | | Total | (5,870,121) | (919,745) | | Deferred Tax Charged to Profit or Loss During the Period | (6,313,047) | (163,405) | | Decrease in Deferred Tax Recognized in Other Comprehensive Income | 1,362,671 | 982,488 | - Total deferred tax liabilities amounted to **HKD 5.8701 million**, a significant increase from the end of 2024[11](index=11&type=chunk)[105](index=105&type=chunk) - Deferred tax of **HKD 6.3130 million** was charged to profit or loss during the period[105](index=105&type=chunk) [29. Share Capital](index=60&type=section&id=29.%20Share%20Capital) As of June 30, 2025, the company's total issued and fully paid ordinary shares were 209,441,000, with share capital of HKD 2.0944 million, primarily changing due to the exercise of share options during the period, resulting in the issuance of 1,419,000 new shares | Item | June 30, 2025 (HKD) | December 31, 2024 (HKD) | | :--- | :--- | :--- | | Issued and Fully Paid Ordinary Share Capital | 2,094,408 | 2,080,218 | | Number of Issued Shares | 209,441,000 | 208,022,000 | - Share capital increased by **HKD 14,190** due to the issuance of **1,419,000 shares** upon exercise of share options during the period[107](index=107&type=chunk)[110](index=110&type=chunk) - Total authorized ordinary shares are **2,000,000,000** with a par value of HKD 0.01 each[106](index=106&type=chunk) [30. Share Option Scheme](index=61&type=section&id=30.%20Share%20Option%20Scheme) As of June 30, 2025, the company's share option scheme had 15,307,000 outstanding share options, representing 7.3% of issued shares, with 11,190,000 options granted and 1,419,000 exercised during the period, and share option expenses of HKD 0.1428 million recognized - The Share Option Scheme, effective June 14, 2018, for a period of 10 years, aims to reward eligible participants for their contributions to the Group's business[109](index=109&type=chunk) | Share Option Movement | June 30, 2025 (Shares) | December 31, 2024 (Shares) | | :--- | :--- | :--- | | Outstanding at Beginning/End of Period | 5,761,000 | 6,387,000 | | Granted During the Period | 11,190,000 | – | | Lapsed or Forfeited During the Period | (225,000) | (170,000) | | Exercised During the Period | (1,419,000) | (456,000) | | Outstanding at End/Beginning of Period | 15,307,000 | 5,761,000 | - As of June 30, 2025, the number of outstanding share options was **15,307,000**[113](index=113&type=chunk)[116](index=116&type=chunk) - Share option expenses of **HKD 0.1428 million** were recognized during the period[114](index=114&type=chunk) [31. Share Award Scheme](index=65&type=section&id=31.%20Share%20Award%20Scheme) The company adopted a share award scheme on August 11, 2020, to reward and retain eligible individuals contributing to the Group, with Victory Global Trustee Limited acting as trustee, and no awarded shares granted or ordinary shares purchased by the trustee during the period ended June 30, 2025 - The Share Award Scheme was adopted on August 11, 2020, to reward and retain eligible persons contributing to the Group[117](index=117&type=chunk) - Victory Global Trustee Limited acts as the trustee, having purchased **14,430,000** ordinary shares of the Company for a total consideration of HKD 18.4768 million[117](index=117&type=chunk)[119](index=119&type=chunk) - No awarded shares were granted during the period ended June 30, 2025[119](index=119&type=chunk) [32. Group Reserves](index=67&type=section&id=32.%20Group%20Reserves) The Group's reserves include share premium, property revaluation reserve, share option reserve, merger reserve, and exchange fluctuation reserve, representing the excess of issue price over par value, fair value increases of land and buildings, fair value of unexercised share options, reorganization and acquisition-related balances, and foreign exchange differences from overseas operations, respectively - Share premium represents the excess of issue price over par value of shares issued, distributable under certain conditions[121](index=121&type=chunk) - Property revaluation reserve relates to land and buildings included in property, plant and equipment, reflecting fair value increases[122](index=122&type=chunk) - Share option reserve represents the fair value of unexercised share options recognized under equity-settled share-based payment arrangements[123](index=123&type=chunk) - Exchange fluctuation reserve comprises all foreign exchange differences arising from the translation of financial statements of overseas operations[126](index=126&type=chunk) [33. Partially Owned Subsidiaries with Material Non-Controlling Interests](index=68&type=section&id=33.%20Partially%20Owned%20Subsidiaries%20with%20Material%20Non-Controlling%20Interests) The Group's partially owned subsidiaries include Victory Asset Management Japan Limited, with a 9.375% non-controlling interest, and BTC Fund, accounted for as a consolidated structured entity with a 63.76% non-controlling interest, with non-controlling interests attributable losses of HKD 0.0713 million for Victory Japan and HKD 0.4631 million for BTC Fund as of June 30, 2025 | Subsidiary | Percentage of Equity Held by Non-Controlling Interests | Profit/(Loss) for the Period/Year Allocated to Non-Controlling Interests (HKD) | Accumulated Balance of Non-Controlling Interests at Reporting Date (HKD) | | :--- | :--- | :--- | :--- | | Victory Asset Management Japan Limited | 9.375% | (71,269) | 27,301 | | BTC Fund | 63.76% | (463,135) | 4,422,857 | - Victory Asset Management Japan Limited has a non-controlling interest of **9.375%**, with a loss attributable to NCI of HKD 0.0713 million for the period[128](index=128&type=chunk) - BTC Fund, a consolidated structured entity, has a non-controlling interest of **63.76%**, with a loss attributable to NCI of HKD 0.4631 million for the period[129](index=129&type=chunk) [34. Interests in Consolidated Structured Entities](index=71&type=section&id=34.%20Interests%20in%20Consolidated%20Structured%20Entities) The Group consolidates structured entities, including private equity funds, based on whether it is exposed to significant variable returns from the entity's activities as an investment manager and investor, indicating it acts as a principal, with BTC Fund being a significant consolidated structured entity with a size of USD 799,970, a 36.24% interest held by the Group, and primarily investing in virtual assets and Bitcoin - The Group consolidates structured entities, based on whether it is exposed to significant variable returns from the entity's activities as an investment manager and investor, indicating it acts as a principal[130](index=130&type=chunk) | Structured Entity Name | Size of Paid-up Capital/Fund | Percentage of Ownership Interest | Principal Activities | | :--- | :--- | :--- | :--- | | BTC Fund | USD 799,970 | 36.24% | Investment in virtual assets and Bitcoin | - As of June 30, 2025, the Company's direct interest in all consolidated structured entities was **HKD 2.5138 million**[131](index=131&type=chunk) [35. Notes to the Interim Condensed Consolidated Statement of Cash Flows](index=72&type=section&id=35.%20Notes%20to%20the%20Interim%20Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) This note details changes in liabilities arising from financing activities and total cash outflow for leases, with bank and other loans increasing by HKD 8.5 million and issued bonds by HKD 10 million as of June 30, 2025, and total lease cash outflow amounting to HKD 0.7494 million | Liability Category | January 1, 2025 (HKD) | Changes from Financing Cash Flows (HKD) | Additions (HKD) | Interest Expense (HKD) | Interest Paid (HKD) | Exchange Adjustments (HKD) | June 30, 2025 (HKD) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Bank and Other Loans | 145,654,000 | 8,500,000 | – | 3,117,083 | (3,117,083) | – | 154,154,000 | | Lease Liabilities | 455,326 | (307,204) | 1,349,330 | 30,272 | (30,272) | 32,854 | 1,530,306 | | Issued Bonds | – | 10,000,000 | – | 244,110 | – | – | 10,244,110 | | Total Cash Outflow for Leases | 2025 (HKD) | 2024 (HKD) | | :--- | :--- | :--- | | Within Operating Activities | 411,957 | 304,654 | | Within Financing Activities | 337,476 | 1,973,249 | | Total | 749,433 | 2,277,903 | - Total cash outflow for leases was **HKD 0.7494 million**, with HKD 0.4120 million from operating activities and HKD 0.3375 million from financing activities[133](index=133&type=chunk) [36. Related Party Transactions](index=74&type=section&id=36.%20Related%20Party%20Transactions) The Group engaged in several significant transactions with immediate family members of directors, key management personnel, and related companies, including brokerage income, commission expenses, interest income/expenses, asset management fees, and IT expenses, with related party balances typically unsecured, interest-free, and without fixed repayment terms | Related Party Category | Transaction Type | 2025 (HKD) | 2024 (HKD) | | :--- | :--- | :--- | :--- | | Immediate Family Members of Directors | Brokerage Income | 365 | – | | | Interest Expense | (97) | (10) | | Key Management Personnel | Brokerage Income | 10,603 | 3,634 | | | Interest Income | 1,787,629 | 1,701,750 | | Victory Global Trustee | Asset Management Fees | 501,088 | 186,905 | | Victory Overseas Consulting Limited | IT Expenses | (1,973,421) | (411,751) | | VDX | Commission Expenses | (2,593,876) | – | - Interest income from key management personnel amounted to **HKD 1.7876 million**[134](index=134&type=chunk) - Amounts due from key management personnel were **HKD 31.0352 million**, and amounts due from Fintech Holding were HKD 4.2299 million[136](index=136&type=chunk) - Related party balances are generally unsecured, interest-free, and without fixed repayment terms[137](index=137&type=chunk) [37. Retirement Benefit Schemes](index=77&type=section&id=37.%20Retirement%20Benefit%20Schemes) The Group operates a Mandatory Provident Fund Scheme (MPF Scheme) for employees governed by the Hong Kong Employment Ordinance, which is a defined contribution retirement plan where both employer and employee contribute 5% of the employee's relevant income, subject to a monthly cap of HKD 1,500 - The Group operates a Mandatory Provident Fund Scheme (MPF Scheme) for employees governed by the Hong Kong Employment Ordinance, which is a defined contribution retirement plan[138](index=138&type=chunk) - Both employer and employee contribute **5%** of the employee's relevant income to the scheme, subject to a monthly cap of **HKD 1,500**[138](index=138&type=chunk) [38. Fair Value of Financial Instruments](index=78&type=section&id=38.%20Fair%20Value%20of%20Financial%20Instruments) The Group's total financial assets were HKD 617 million and total financial liabilities were HKD 485 million, with financial instruments classified at amortized cost or fair value through profit or loss, and fair value measurements using a three-level hierarchy, where listed equity securities are Level 1, unlisted investments are Level 2, and some other unlisted investments are Level 3, and the fair value of issued bonds is calculated by discounting expected future cash flows at current interest rates for similar instruments | Item | June 30, 2025 (HKD) | December 31, 2024 (HKD) | | :--- | :--- | :--- | | Total Financial Assets | 617,029,930 | 451,986,999 | | Total Financial Liabilities | 484,632,542 | 341,215,382 | | Financial Assets at Fair Value Through Profit or Loss | 11,962,497 | 9,964,718 | | Issued Bonds (Carrying Amount) | 10,244,110 | – | | Issued Bonds (Fair Value) | 10,030,505 | – | - Fair value measurements of financial assets and liabilities use a three-level hierarchy: Level 1 (quoted prices in active markets), Level 2 (significant observable inputs), and Level 3 (significant unobservable inputs)[144](index=144&type=chunk) - The fair value of issued bonds was **HKD 10.0305 million**, calculated by discounting expected future cash flows at current interest rates for similar instruments[150](index=150&type=chunk) [39. Offsetting Financial Assets and Financial Liabilities](index=86&type=section&id=39.%20Offsetting%20Financial%20Assets%20and%20Financial%20Liabilities) The Group has a legally enforceable right to offset continuously net settled monetary obligations with Hong Kong Clearing for receivables and payables, with net trade receivables from clearing houses of HKD 2.3984 million and net trade payables to clearing houses of HKD 10.9496 million as of June 30, 2025 - The Group has a legally enforceable right to offset continuously net settled monetary obligations with Hong Kong Clearing for receivables and payables[152](index=152&type=chunk) | Item | June 30, 2025 (HKD) | December 31, 2024 (HKD) | | :--- | :--- | :--- | | Net Trade Receivables from Clearing Houses | 2,398,414 | 23,046,645 | | Net Trade Payables to Clearing Houses | 10,949,623 | 3,492,359 | [40. Comparative Amounts](index=87&type=section&id=40.%20Comparative%20Amounts) Certain comparative figures in the unaudited interim condensed consolidated financial statements have been reclassified to conform with the current period's presentation - Certain comparative figures in the unaudited interim condensed consolidated financial statements have been reclassified to conform with the current period's presentation[155](index=155&type=chunk) Management Discussion and Analysis [Introduction](index=88&type=section&id=Introduction) The Group, a comprehensive financial services provider with over 50 years of history in Hong Kong, offers diversified securities brokerage and related financial services, including virtual asset services, leveraging its strong business model to navigate complex market environments - The Group is a comprehensive financial services provider with over 50 years of history in Hong Kong, offering diversified securities brokerage and related financial services[156](index=156&type=chunk) - Services include securities/futures/insurance brokerage, placing and underwriting, securities advisory, financing, asset management, financial advisory, investment advisory, and virtual asset services[156](index=156&type=chunk) [Updates on Business Development](index=88&type=section&id=Updates%20on%20Business%20Development) For the six months ended June 30, 2025, there are no new material updates on the Group's business development, consistent with disclosures in the 2024 annual report - No further material updates on business development for the six months ended June 30, 2025[157](index=157&type=chunk) [Business Review, Prospects and Outlook](index=89&type=section&id=Business%20Review,%20Prospects%20and%20Outlook) The Group achieved significant strategic progress in the first half of 2025, particularly in its virtual asset business segment, which contributed approximately 51.9% of total revenue, benefiting from increased Hong Kong stock market turnover despite economic challenges in Hong Kong and China, and plans to continue expanding asset management and financial advisory services while prudently managing capital and liquidity risks to address market volatility and uncertainties - The Group achieved significant strategic progress in the virtual asset business segment in H1 2025, with this segment contributing approximately **51.9%** of total revenue (10.4% in H1 2024)[158](index=158&type=chunk) - Average daily turnover on the Hong Kong Stock Exchange increased by **117.6%** year-on-year to **HKD 240.21 billion**, positively impacting brokerage income[159](index=159&type=chunk) - The Group will continue to allocate resources to expand its asset management segment and explore potential opportunities in financial advisory services[160](index=160&type=chunk) - Hong Kong's economic outlook is generally optimistic, with an expected real GDP growth of **2% to 3%** in 2025, despite challenges from declining private consumption expenditure and external uncertainties[161](index=161&type=chunk) [Overview of Virtual Asset Business Segment](index=91&type=section&id=Overview%20of%20Virtual%20Asset%20Business%20Segment) Hong Kong's virtual asset segment is rapidly developing with government support and robust regulation, positioning the Group as a market leader as the first and only financial group approved by the SFC to provide virtual asset trading, advisory, and asset management services, with virtual asset business revenue accounting for 51.9% of total revenue and 4,522 active clients, further enhanced by the launch of the "Victory Pass" application for one-stop securities and virtual asset trading, demonstrating a commitment to investor safety under strict regulation - The Hong Kong government is committed to building a vibrant virtual asset ecosystem, solidifying its position as a digital asset hub[162](index=162&type=chunk) - The Group is the first and only financial group in Hong Kong approved by the SFC to simultaneously provide virtual asset trading, advisory, and asset management services[163](index=163&type=chunk) - For the six months ended June 30, 2025, the virtual asset segment contributed approximately **51.9%** of total revenue, with **4,522** active clients[164](index=164&type=chunk) - The Group launched the 'Victory Pass' application, the first platform in Hong Kong enabling one-stop trading for both securities and virtual assets[165](index=165&type=chunk) - Its associate, Victory Digital Technology Limited, is applying for virtual asset trading platform licenses to offer comprehensive services to various investor levels[167](index=167&type=chunk) [Financial Review](index=93&type=section&id=Financial%20Review) The Group's total revenue increased by 318.5% year-on-year to HKD 124 million, primarily driven by a 1,989.1% surge in virtual asset trading and related service revenue to HKD 64.241 million, alongside a 205.2% growth in securities/futures brokerage service revenue, while placing and underwriting service revenue declined due to reduced corporate activities, resulting in a significant 799.9% increase in profit for the period to HKD 40.72 million, mainly attributable to the strong performance of the virtual asset business | Service Category | 2025 (Thousand HKD) | 2024 (Thousand HKD) | Change (%) | | :--- | :--- | :--- | :--- | | Securities/Futures Brokerage Services, Placing and Underwriting Services, and Securities Advisory Services | 43,619 | 14,293 | 205.2 | | Virtual Asset Trading and Related Services | 64,241 | 3,075 | 1,989.1 | | Financing Services | 9,645 | 8,210 | 17.5 | | Asset Management Services | 4,095 | 3,406 | 20.2 | | Financial Advisory Services | 720 | 280 | 157.1 | | Insurance Brokerage Services | 185 | 296 | (37.6) | | Guarantee Contract Profit | 1,211 | – | Not Applicable | | Total | 123,716 | 29,560 | 318.5 | - Revenue from virtual asset trading and related services surged by **1,989.1%** to **HKD 64.241 million**, becoming the primary revenue source[168](index=168&type=chunk)[173](index=173&type=chunk) - Revenue from securities/futures brokerage services increased by **431.1%** to **HKD 21.33 million**, driven by increased Hong Kong stock market turnover[170](index=170&type=chunk) - Revenue from placing and underwriting services decreased by **71.6%** to **HKD 1.261 million** due to reduced corporate activities[171](index=171&type=chunk) - Profit for the period significantly increased by **799.9%** to **HKD 40.72 million**, primarily attributable to strong growth in the virtual asset business[181](index=181&type=chunk) [Liquidity, Financial Resources and Capital Structure](index=99&type=section&id=Liquidity,%20Financial%20Resources%20and%20Capital%20Structure) The Group maintains a healthy liquidity position, with net cash generated from operating activities significantly increasing to HKD 78.74 million, total cash and bank balances of HKD 92.09 million, a current ratio of 1.37 times as of June 30, 2025, and a gearing ratio decreasing to 23.4% due to increased total assets and reduced bank borrowings - Net cash generated from operating activities was approximately **HKD 78.74 million**, a significant increase from HKD 1.14 million in the prior period[184](index=184&type=chunk) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Cash and Bank Balances | HKD 92.09 million | HKD 16.96 million | | Current Assets | HKD 648.02 million | HKD 457.93 million | | Current Liabilities | HKD 473.49 million | HKD 341.62 million | | Current Ratio | 1.37 times | 1.34 times | | Bank and Other Borrowings and Issued Bonds | HKD 164.41 million | HKD 166.69 million | | Gearing Ratio | 23.4% | 32.1% | - The gearing ratio decreased to **23.4%**, mainly due to an increase in total assets and a decrease in bank and other borrowings[185](index=185&type=chunk) [Pledge of Assets](index=100&type=section&id=Pledge%20of%20Assets) As of June 30, 2025, the Group's bank loans are secured by client securities, the Group's own securities, unlisted investments, time deposits, leasehold land and buildings, and investment properties, with a total pledged asset value of approximately HKD 223 million - Bank loans are secured by client securities and the Group's own securities (**HKD 177 million**), unlisted investments (**HKD 4.49 million**), time deposits (**HKD 4.47 million**), leasehold land and buildings, and investment properties (**HKD 37.40 million**)[187](index=187&type=chunk) [Foreign Exchange Risk](index=101&type=section&id=Foreign%20Exchange%20Risk) The Group is exposed to foreign exchange risk from assets and liabilities denominated in Renminbi and US dollars, and while there is no current hedging policy, management continuously monitors and implements measures to reduce foreign currency-denominated assets to mitigate this risk - The Group is exposed to foreign exchange risk arising from assets and liabilities denominated in Renminbi and US dollars[188](index=188&type=chunk) - Management continuously monitors foreign exchange risk and implements measures to reduce foreign currency-denominated assets to mitigate this risk[188](index=188&type=chunk) [Capital and Other Commitments](index=101&type=section&id=Capital%20and%20Other%20Commitments) Except for lease commitments disclosed in Note 15 to the interim condensed consolidated financial statements, the Group had no other significant capital and other commitments as of June 30, 2025, and December 31, 2024 - Save for lease commitments disclosed in Note 15 to the interim condensed consolidated financial statements, the Group had no other significant capital and other commitments as at June 30, 2025 and December 31, 2024[189](index=189&type=chunk) [Contingent Liabilities](index=101&type=section&id=Contingent%20Liabilities) The Group had no significant contingent liabilities as of June 30, 2025, and December 31, 2024 - The Group had no significant contingent liabilities as at June 30, 2025 and December 31, 2024[190](index=190&type=chunk) [Significant Acquisitions or Disposals of Subsidiaries and Associates and Significant Investments](index=101&type=section&id=Significant%20Acquisitions%20or%20Disposals%20of%20Subsidiaries%20and%20Associates%20and%20Significant%20Investments) Except for those disclosed in Note 17 to the interim condensed financial statements, the Group held no other significant acquisitions or disposals of subsidiaries and associates and significant investments for the six months ended June 30, 2025 - Save for those disclosed in Note 17 to the interim condensed financial statements, the Group had no other significant acquisitions or disposals of subsidiaries and associates and significant investments for the six months ended June 30, 2025[191](index=191&type=chunk) [Events After Reporting Period](index=101&type=section&id=Events%20After%20Reporting%20Period) As of the date of this report, the Directors are not aware of any significant post-reporting period events concerning the Group's business or financial performance - As of the date of this report, the Directors are not aware of any significant post-reporting period events concerning the Group's business or financial performance[192](index=192&type=chunk) Other Information [Employees and Remuneration Policy](index=102&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the Group had 59 full-time employees with total staff costs of HKD 23.78 million, and its remuneration policy, based on qualifications, experience, market conditions, and individual performance, offers competitive compensation, retirement plans, and benefits, supplemented by a share option scheme and share award scheme to incentivize staff - As of June 30, 2025, the Group had **59** full-time employees (excluding independent non-executive directors), with total staff costs of **HKD 23.78 million**[193](index=193&type=chunk) - Remuneration packages are based on employee qualifications, experience, market conditions, and individual performance, supplemented by a share option scheme and share award scheme[193](index=193&type=chunk) - The Group operates a Mandatory Provident Fund Scheme for eligible employees[193](index=193&type=chunk) [Directors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares and Debentures](index=103&type=section&id=Directors'%20and%20Chief%20Executive's%20Interests%20and%20Short%20Positions%20in%20Shares,%20Underlying%20Shares%20and%20Debentures) As of June 30, 2025, the company's directors and chief executive held interests in the company's shares, with CEO Ms. Gao Juan directly and through a controlled corporation holding 51.61% of the total issued shares, Chairman Mr. Chan Ying Kit deemed to have the same interest, and Mr. Chan Pui Chuen holding a 6.61% interest | Director Name | Capacity/Nature of Interest | Number of Shares (Long Position) | Interest in Share Options (Long Position) | Percentage of Total Issued Shares of the Company | | :--- | :--- | :--- | :--- | :--- | | Ms. Gao Juan | Interest of Controlled Corporation | 80,193,750 | – | 38.29% | | | Beneficial Owner | 27,596,090 | 300,000 | 13.32% | | Mr. Chan Ying Kit | Spouse's Interest | 107,789,840 | 300,000 | 51.61% | | Mr. Chiu Tsz Leung | Beneficial Owner | 280,000 | 300,000 | 0.28% | | Mr. Chan Pui Chuen | Beneficial Owner | 13,394,000 | 455,000 | 6.61% | - Ms. Gao Juan (CEO) directly and through controlled corporation DTTKF holds **51.61%** of the Company's total issued shares[194](index=194&type=chunk) - Mr. Chan Ying Kit (Chairman) is deemed to be interested in the same number of shares held by Ms. Gao Juan due to spousal relationship[194](index=194&type=chunk) [Substantial Shareholders' Interests and Short Positions in Shares and Underlying Shares of the Company](index=105&type=section&id=Substantial%20Shareholders'%20Interests%20and%20Short%20Positions%20in%20Shares%20and%20Underlying%20Shares%20of%20the%20Company) As of June 30, 2025, excluding directors and the chief executive, substantial shareholder DTTKF (Dr. TT Kou's Family Company Limited) held 38.29% of the company's issued share capital, with Ms. Gao Juan deemed to be interested in this interest | Shareholder Name | Capacity/Nature of Interest | Number of Shares (Long Position) | Percentage of Total Issued Shares of the Company | | :--- | :--- | :--- | :--- | | DTTKF | Beneficial Owner | 80,193,750 | 38.29% | - DTTKF holds **38.29%** of the Company's issued share capital, and Ms. Ga

[Chairman's Report](index=1&type=section&id=董事局主席報告) [Interim Results Overview](index=1&type=section&id=中期業績概覽) The Group achieved stable financial performance in the first half of 2025, with unaudited profit increasing by 1% to HKD 3.042 billion, demonstrating resilience amidst global market volatility | Metric | H1 2025 (HKD million) | H1 2024 (HKD million) | | :--- | :--- | :--- | | Unaudited Profit | 3,042 | 3,006 | [Interim Dividend](index=1&type=section&id=中期股息) The Board declared an interim dividend of HKD 0.78 per share, consistent with the prior year, payable on September 23, 2025 | Metric | 2025 (HKD per share) | 2024 (HKD per share) | | :--- | :--- | :--- | | Interim Dividend | 0.78 | 0.78 | [Robust Financial Foundation](index=1&type=section&id=強健的財務基礎) The Group is committed to maintaining a strong financial position, evidenced by an "A/Stable" credit rating from S&P and a low net debt to total capital net ratio (2%), providing a solid base for future growth - The Group secured an "A/Stable" credit rating from S&P[5](index=5&type=chunk) | Metric | Ratio | | :--- | :--- | | Net Debt to Total Capital Net Ratio | 2% | | (Pro-forma for International Investment Portfolio) | 46% | [International Energy Investment Portfolio](index=2&type=section&id=國際能源投資組合) The Group's international energy investment portfolio performed steadily, with significant growth from UK operations, a slight decline in Australian operations due to exchange rates and contract expirations, and stable or project-specific progress in Canadian and other regions - The Group actively explores renewable energy opportunities to strengthen and expand its business scope[10](index=10&type=chunk) [UK Operations](index=2&type=section&id=英國業務) UK operations' profit contribution increased by 11% to HKD 1.724 billion, driven by strong performance from UK Power Networks (UKPN), which maintained leading safety standards and customer service rankings, while Northern Gas Networks (NGN), Wales & West Utilities (WWU), and Phoenix Energy actively participated in environmental initiatives | Region | H1 2025 Profit Contribution (HKD million) | H1 2024 Profit Contribution (HKD million) | | :--- | :--- | :--- | | UK Operations | 1,724 | 1,550 | - UKPN reported no lost-time injuries in H1 2025 and achieved a customer satisfaction rate of **94.7%**[6](index=6&type=chunk) - NGN and WWU are actively involved in the UK's 2050 net-zero carbon emissions target, leading the East Coast Hydrogen project and the Bradford low-carbon hydrogen plant[7](index=7&type=chunk) - Phoenix Energy completed **4** reinforcement projects ahead of schedule within the GD23 price control period[8](index=8&type=chunk) [Australian Operations](index=2&type=section&id=澳洲業務) Australian operations contributed HKD 652 million in profit, a decrease from the prior year, primarily due to a weaker Australian dollar exchange rate and the expiration of some Energy Developments Pty Ltd (EDL) contracts, alongside lower market electricity prices; Victoria Power Networks and United Energy submitted new regulatory proposals for multi-billion AUD investments to support energy transition and resilience | Region | H1 2025 Profit Contribution (HKD million) | H1 2024 Profit Contribution (HKD million) | | :--- | :--- | :--- | | Australian Operations | 652 | 681 | - Victoria Power Networks submitted a **AUD 4.8 billion** investment plan draft to support Victoria's energy transition[12](index=12&type=chunk) - United Energy submitted a **AUD 1.4 billion** investment plan draft to enhance energy resilience on the Mornington Peninsula and integrate smart technologies[12](index=12&type=chunk) - Dampier Bunbury Pipeline achieved record gas throughput and **100%** reliability[13](index=13&type=chunk) [Canadian Operations](index=3&type=section&id=加拿大業務) Husky Midstream delivered stable cash flows and returns, while Canadian Power's profit contribution declined due to reduced generation from Alberta's gas-fired power plants and lower electricity prices - Husky Midstream recorded stable cash flow and returns[14](index=14&type=chunk) - Canadian Power's profit contribution decreased due to reduced generation from Alberta's gas-fired power plants and lower electricity prices[14](index=14&type=chunk) [Other Operations](index=3&type=section&id=其他業務) Zhuhai Jinwan Power Plant in mainland China is developing combined heat and power and energy-saving projects, while Dali and Laoting wind farms continue to reduce carbon emissions; the AVR Rozenburg incinerator in the Netherlands is progressing well with restoration, with power generation expected to commence commercial operation in Q1 2026; Wellington Electricity in New Zealand entered a new regulatory period, and Ratchaburi Power Company in Thailand secured guaranteed returns - Zhuhai Jinwan Power Plant in mainland China is developing combined heat and power and energy-saving projects, and Dali and Laoting wind farms continue to reduce carbon emissions[15](index=15&type=chunk) - The AVR Rozenburg incinerator in the Netherlands is in the final stages of restoration, with power generation equipment expected to commence commercial operation in **Q1 2026**[15](index=15&type=chunk) - Wellington Electricity in New Zealand commenced a new regulatory period on April 1, 2025, maintaining stable operations[15](index=15&type=chunk) - Ratchaburi Power Company in Thailand secured guaranteed returns from the state-owned off-taker, EGAT[16](index=16&type=chunk) [Investment in HK Electric Investments](index=4&type=section&id=投資於港燈電力投資) HK Electric Investments contributed HKD 334 million in profit, providing stable returns, though HK Electric's electricity sales decreased by 3.2% year-on-year due to mild weather; capital projects for the new L13 gas-fired combined cycle generating unit and three new open cycle gas turbine units are progressing well, expected to be commissioned in 2029 and 2027/2028, respectively | Metric | H1 2025 Profit Contribution (HKD million) | H1 2024 Profit Contribution (HKD million) | | :--- | :--- | :--- | | HK Electric Investments | 334 | 316 | - HK Electric's electricity sales decreased by **3.2%** compared to H1 2024, primarily due to milder weather during the period[17](index=17&type=chunk) - The new L13 gas-fired combined cycle generating unit is expected to be commissioned in **2029**, and three new open cycle gas turbine units are expected to be operational in phases in **2027** and **2028**[17](index=17&type=chunk) [Sustainability Highlights](index=4&type=section&id=可持續發展重點) The Group's international investment portfolio prioritizes supporting green electricity and natural gas, transitioning to renewable energy, and assisting customers in addressing climate change, with several businesses completing climate scenario analyses, actively promoting advanced technologies to protect power grids, and committing to supporting green renewable gases - The Group's businesses prioritize supporting green electricity and natural gas, transitioning to renewable energy, and assisting customers in addressing climate change[18](index=18&type=chunk) - Several businesses have completed climate scenario analyses, identifying climate-related risks and opportunities[18](index=18&type=chunk) - AGN has signed an agreement to connect the gas produced from its first biomethane project to the South Australian gas distribution network[19](index=19&type=chunk) - Phoenix Energy partnered with Radius Housing to pilot new home heating solutions, providing affordable and sustainable warmth[19](index=19&type=chunk) [Post-Reporting Period Events](index=4&type=section&id=回顧期後事項) In July 2025, Eversholt UK Rails Group Limited, jointly owned by Power Assets Holdings, Cheung Kong Infrastructure, CK Asset Holdings, and CK Hutchison Holdings, reached an agreement to sell its UK Rails business - In July 2025, Eversholt UK Rails Group Limited (jointly owned by Power Assets Holdings and others) reached an agreement to sell its UK Rails business[20](index=20&type=chunk) [Outlook](index=4&type=section&id=展望) Leveraging its strong financial position and international business portfolio, the Group will continue to seek growth investment opportunities globally, focusing on well-regulated, mature energy markets to achieve predictable and attractive returns, while strengthening strategic partnerships with Cheung Kong Infrastructure and CK Asset Holdings - The Group will continue to seek suitable investment opportunities globally that drive growth[21](index=21&type=chunk) - The Group will focus on expanding high-quality businesses in well-regulated, mature energy markets to achieve predictable and attractive returns[21](index=21&type=chunk) - Power Assets Holdings will continue to strengthen its successful strategic partnerships with Cheung Kong Infrastructure and CK Asset Holdings[21](index=21&type=chunk) [Financial Review](index=6&type=section&id=財務回顧) [Capital Expenditure, Liquidity, and Financial Resources](index=6&type=section&id=資本開支、流動性及財政資源) The Group's capital expenditure and investments are primarily funded by operating cash flow, dividends, and other investment income; as of June 30, 2025, total unsecured bank loans increased, bank deposits and cash decreased, and committed but undrawn credit facilities significantly declined - The Group's capital expenditure and investments are primarily funded by cash generated from operating activities, dividends, and other investment income[24](index=24&type=chunk) | Metric | June 30, 2025 (HKD million) | December 31, 2024 (HKD million) | Change | | :--- | :--- | :--- | :--- | | Total Unsecured Bank Loans | 3,768 | 2,505 | Increase | | Bank Balances and Cash | 1,561 | 2,733 | Decrease | | Committed but Undrawn Bank Credit Facilities | 150 | 1,000 | Significant Decrease | [Treasury Policy, Financing Activities, and Debt Structure](index=6&type=section&id=庫務政策、融資活動及債務結構) The Group adheres to the treasury policy approved by the Board, managing currency, interest rate, and counterparty risks, and maintaining a prudent capital structure; S&P reaffirmed its "A/Stable" credit rating; as of June 30, 2025, the Group's net debt was HKD 2.207 billion, with the net debt to total capital net ratio (pro-forma) slightly increasing to 46%; the loan structure is primarily in AUD and HKD, consisting entirely of floating-rate bank loans repayable within one year - The Group's treasury policy aims to manage currency, interest rate, and counterparty risks, ensuring adequate financial resources and a prudent capital structure[25](index=25&type=chunk) - S&P reaffirmed the company's long-term issuer credit rating of "A" with a "Stable" outlook on February 19, 2025[25](index=25&type=chunk) | Metric | June 30, 2025 (HKD million) | December 31, 2024 (HKD million) | Change | | :--- | :--- | :--- | :--- | | Net Debt Level | 2,207 | Net Cash 228 | Shift from Net Cash to Net Debt | | Net Debt to Total Capital Net Ratio (Pro-forma) | 46% | 44% | Slight Increase | - The Group's external loan structure is **65% AUD**, **35% HKD**; **100%** bank loans; **100%** repayable within one year; **100%** floating interest rates[26](index=26&type=chunk) | Metric | June 30, 2025 (HKD million) | December 31, 2024 (HKD million) | | :--- | :--- | :--- | | Notional Amount of Outstanding Financial Derivative Contracts | 29,784 | 32,377 | [Contingent Liabilities](index=7&type=section&id=或有債務) As of June 30, 2025, the Group had no guarantees or indemnities - As of June 30, 2025, the Group had no guarantees or indemnities[29](index=29&type=chunk) [Employees](index=7&type=section&id=僱員) The Group adopts a performance-based remuneration policy to ensure competitive compensation; for the six months ended June 30, 2025, total staff costs were HKD 14 million, the number of employees increased to 16, and there was no share option scheme - The Group adopts a performance-based remuneration policy and regularly monitors compensation levels to ensure competitiveness[30](index=30&type=chunk) | Metric | H1 2025 (HKD million) | H1 2024 (HKD million) | | :--- | :--- | :--- | | Total Staff Costs | 14 | 14 | | Number of Employees (Period-end) | 16 | 14 (December 31, 2024) | [Unaudited Consolidated Financial Statements](index=8&type=section&id=未經審核綜合財務報表) [Unaudited Consolidated Income Statement](index=8&type=section&id=未經審核綜合損益表) For the six months ended June 30, 2025, the Group's revenue was HKD 352 million, and profit attributable to the Company's shareholders was HKD 3.042 billion, a slight increase from the prior year; basic and diluted earnings per share were HKD 1.43 | Metric | H1 2025 (HKD million) | H1 2024 (HKD million) | | :--- | :--- | :--- | | Revenue | 352 | 454 | | Share of Results of Joint Ventures | 2,136 | 2,014 | | Share of Results of Associates | 781 | 711 | | Profit Before Tax | 3,149 | 3,134 | | Profit Attributable to Company's Shareholders | 3,042 | 3,006 | | Basic and Diluted Earnings Per Share | HKD 1.43 | HKD 1.41 | [Unaudited Consolidated Statement of Comprehensive Income](index=9&type=section&id=未經審核綜合全面收益表) For the six months ended June 30, 2025, total comprehensive income attributable to the Company's shareholders significantly increased to HKD 6.189 billion from HKD 2.159 billion in the prior year, primarily due to positive exchange differences on translating foreign operations | Metric | H1 2025 (HKD million) | H1 2024 (HKD million) | | :--- | :--- | :--- | | Profit Attributable to Company's Shareholders | 3,042 | 3,006 | | Exchange Differences on Translating Foreign Operations | 4,979 | (926) | | Net Investment Hedge | (1,550) | 443 | | Total Comprehensive Income Attributable to Company's Shareholders | 6,189 | 2,159 | [Unaudited Consolidated Statement of Financial Position](index=10&type=section&id=未經審核綜合財務狀況表) As of June 30, 2025, the Group's total non-current assets increased to HKD 94.860 billion, driven mainly by an increase in interests in joint ventures; net current liabilities significantly increased to HKD 5.245 billion, leading to a slight decrease in total assets less current liabilities; net assets increased to HKD 88.917 billion | Metric | June 30, 2025 (HKD million) | December 31, 2024 (HKD million) | Change | | :--- | :--- | :--- | :--- | | Non-current Assets | 94,860 | 90,589 | Increase | | Interests in Joint Ventures | 66,260 | 60,963 | Increase | | Bank Balances and Cash | 1,561 | 2,733 | Decrease | | Net Current Liabilities | (5,245) | (589) | Increase in Liabilities | | Net Assets | 88,917 | 87,076 | Increase | [Unaudited Consolidated Statement of Changes in Equity](index=11&type=section&id=未經審核綜合股本權益變動表) For the six months ended June 30, 2025, total equity attributable to the Company's shareholders increased to HKD 88.917 billion, primarily due to positive changes in profit for the period and exchange reserves, despite the interim dividend payment | Metric | June 30, 2025 (HKD million) | June 30, 2024 (HKD million) | | :--- | :--- | :--- | | Share Capital | 6,610 | 6,610 | | Exchange Reserve | (3,314) | (6,017) | | Retained Earnings | 83,097 | 82,781 | | Total Equity Attributable to Company's Shareholders | 88,917 | 86,563 | [Notes to the Unaudited Interim Financial Statements](index=12&type=section&id=未經審核中期財務報表附註) [Review of Unaudited Interim Financial Statements](index=12&type=section&id=審閱未經審核中期財務報表) These unaudited consolidated interim financial statements have been reviewed by the Audit Committee - These unaudited consolidated interim financial statements have been reviewed by the Audit Committee[35](index=35&type=chunk) [Basis of Preparation](index=12&type=section&id=編製基準) These interim financial statements are prepared in accordance with Hong Kong Accounting Standard 34 and the disclosure requirements of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, with accounting policies consistent with the 2024 annual financial statements, which received an unqualified audit opinion from the auditors - These interim financial statements are prepared in accordance with Hong Kong Accounting Standard 34 issued by the Hong Kong Institute of Certified Public Accountants and the disclosure requirements of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[36](index=36&type=chunk) - The accounting policies adopted in preparing these interim financial statements are consistent with those applied in the preparation of the 2024 annual financial statements[36](index=36&type=chunk) - The Company's auditors issued an unqualified audit report on the financial statements for the year ended December 31, 2024[37](index=37&type=chunk) [Changes in Accounting Policies](index=13&type=section&id=會計政策變動) Several amendments to Hong Kong Financial Reporting Standards issued by the Hong Kong Institute of Certified Public Accountants became effective for the first time in the current accounting period but did not have a significant impact on the Group's results or financial position for the current or prior periods, and the Group has not early adopted any new standards or interpretations not yet effective - Several amendments to Hong Kong Financial Reporting Standards issued by the Hong Kong Institute of Certified Public Accountants became effective for the first time in the current accounting period[38](index=38&type=chunk) - These developments did not have a significant impact on the Group's results or financial position for the current or prior periods[38](index=38&type=chunk) [Business Segment Information](index=13&type=section&id=業務分部資料) The Group's business segment information shows that UK operations contributed the highest profit before tax in H1 2025, reaching HKD 1.724 billion, followed by Australia and HK Electric Investments, with total reportable business segment profit at HKD 2.821 billion | Business Segment | H1 2025 Profit Before Tax (HKD million) | H1 2024 Profit Before Tax (HKD million) | | :--- | :--- | :--- | | Investment in HK Electric Investments | 334 | 316 | | UK | 1,724 | 1,550 | | Australia | 658 | 694 | | Other | 546 | 618 | | Subtotal | 2,928 | 2,862 | | All Other Activities | (113) | (44) | | Total | 3,149 | 3,134 | | Business Segment | H1 2025 Reportable Business Segment Profit (HKD million) | H1 2024 Reportable Business Segment Profit (HKD million) | | :--- | :--- | :--- | | Investment in HK Electric Investments | 334 | 316 | | UK | 1,724 | 1,550 | | Australia | 652 | 681 | | Other | 445 | 503 | | Subtotal | 2,821 | 2,734 | | All Other Activities | (113) | (44) | | Total | 3,042 | 3,006 | [Revenue](index=14&type=section&id=收入) The Group's revenue primarily comprises interest income from loans to joint ventures and associates; for the six months ended June 30, 2025, interest income was HKD 352 million, and share of revenue from joint ventures was HKD 10.215 billion - The Group's revenue includes interest income from loans to joint ventures and associates[41](index=41&type=chunk) | Metric | H1 2025 (HKD million) | H1 2024 (HKD million) | | :--- | :--- | :--- | | Interest Income | 352 | 454 | | Share of Revenue from Joint Ventures | 10,215 | 9,258 | [Profit Before Tax](index=15&type=section&id=除稅前溢利) For the six months ended June 30, 2025, profit before tax included finance costs of HKD 112 million, depreciation of HKD 2 million, and interest income from financial assets measured at amortized cost of HKD 7.6 million | Metric | H1 2025 (HKD million) | H1 2024 (HKD million) | | :--- | :--- | :--- | | Finance Costs - Loan Interest and Other Finance Costs | 112 | 80 | | Depreciation | 2 | 2 | | Interest Income from Financial Assets Measured at Amortized Cost | (76) | (104) | [Income Tax](index=15&type=section&id=所得稅) For the six months ended June 30, 2025, total income tax was HKD 107 million, comprising current tax of HKD 9.9 million and deferred tax of HKD 8 million, with tax provisions calculated based on estimated taxable profit and applicable tax rates | Metric | H1 2025 (HKD million) | H1 2024 (HKD million) | | :--- | :--- | :--- | | Current Tax | 99 | 91 | | Deferred Tax | 8 | 37 | | Total Income Tax | 107 | 128 | - Tax provision is calculated based on estimated taxable profit after deducting available tax losses at applicable tax rates[44](index=44&type=chunk) [Earnings Per Share](index=15&type=section&id=每股溢利) For the six months ended June 30, 2025, basic and diluted earnings per share were HKD 1.43, calculated based on profit attributable to the Company's shareholders of HKD 3.042 billion and 2,131,105,154 ordinary shares outstanding, with no potentially dilutive ordinary shares during the period | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Basic and Diluted Earnings Per Share | HKD 1.43 | HKD 1.41 | | Profit Attributable to Company's Shareholders | 3,042 million | 3,006 million | | Ordinary Shares Outstanding | 2,131,105,154 shares | 2,131,105,154 shares | - There were no potentially dilutive ordinary shares for the six months ended June 30, 2025 and 2024[46](index=46&type=chunk) [Interests in Joint Ventures](index=16&type=section&id=合營公司權益) As of June 30, 2025, the Group's share of net assets of unlisted joint ventures increased to HKD 57.945 billion, and loans receivable from unlisted joint ventures increased to HKD 7.944 billion, bringing total interests in joint ventures to HKD 66.260 billion | Metric | June 30, 2025 (HKD million) | December 31, 2024 (HKD million) | | :--- | :--- | :--- | | Share of Net Assets of Unlisted Joint Ventures | 57,945 | 53,247 | | Loans Receivable from Unlisted Joint Ventures | 7,944 | 7,435 | | Total Interests in Joint Ventures | 66,260 | 60,963 | [Interests in Associates](index=16&type=section&id=聯營公司權益) As of June 30, 2025, the Group's total share of net assets of associates was HKD 25.779 billion, comprising HKD 16.417 billion from listed associates and HKD 9.362 billion from unlisted associates, with total interests in associates amounting to HKD 26.625 billion | Metric | June 30, 2025 (HKD million) | December 31, 2024 (HKD million) | | :--- | :--- | :--- | | Share of Net Assets of Listed Associates | 16,417 | 16,676 | | Share of Net Assets of Unlisted Associates | 9,362 | 8,807 | | Total Interests in Associates | 26,625 | 26,450 | [Other Receivables](index=16&type=section&id=其他應收款項) As of June 30, 2025, the Group's total other receivables were HKD 672 million, primarily consisting of financial derivative instruments of HKD 571 million and interest and other receivables of HKD 9.8 million, with receivables generally due within one month of invoice issuance | Metric | June 30, 2025 (HKD million) | December 31, 2024 (HKD million) | | :--- | :--- | :--- | | Interest and Other Receivables | 98 | 30 | | Financial Derivative Instruments | 571 | 722 | | Total Other Receivables | 672 | 755 | - Receivables are on credit terms, and payments are generally due within **1 month** of invoice issuance[47](index=47&type=chunk) [Other Payables](index=17&type=section&id=其他應付款項) As of June 30, 2025, the Group's total other payables were HKD 3.623 billion, mainly comprising payables measured at amortized cost of HKD 3.556 billion, with all other payables expected to be settled within one year | Metric | June 30, 2025 (HKD million) | December 31, 2024 (HKD million) | | :--- | :--- | :--- | | Payables Measured at Amortized Cost | 3,556 | 3,967 | | Financial Derivative Instruments | 64 | - | | Total Other Payables | 3,623 | 3,970 | - All other payables are expected to be settled within **1 year**[48](index=48&type=chunk) [Interim Dividend](index=17&type=section&id=中期股息_附註) The Board declared an interim dividend of HKD 0.78 per ordinary share, totaling HKD 1.662 billion, consistent with the prior year | Metric | H1 2025 (HKD million) | H1 2024 (HKD million) | | :--- | :--- | :--- | | Interim Dividend (per ordinary share) | HKD 0.78 | HKD 0.78 | | Total Interim Dividend | 1,662 | 1,662 | [Other Information](index=18&type=section&id=其他資料) [Interim Dividend](index=18&type=section&id=中期股息_其他資料) The Board declared an interim dividend of HKD 0.78 per share for 2025, payable on September 23, 2025, to shareholders registered on the company's register by September 11, 2025 - The 2025 interim dividend is **HKD 0.78** per share, payable on September 23, 2025[50](index=50&type=chunk) - The dividend record date is September 11, 2025[50](index=50&type=chunk) [Repurchase, Sale or Redemption of the Company's Shares](index=18&type=section&id=購回、出售或贖回本公司之股份) For the six months ended June 30, 2025, neither the Company nor its subsidiaries repurchased, sold, or redeemed any listed securities, and no treasury shares were held at period-end - For the six months ended June 30, 2025, neither the Company nor its subsidiaries repurchased, sold, or redeemed any listed securities[51](index=51&type=chunk) - As of June 30, 2025, neither the Company nor its subsidiaries held any treasury shares[51](index=51&type=chunk) [Corporate Governance](index=18&type=section&id=企業管治) The Company is committed to maintaining high standards of corporate governance, complying with the Corporate Governance Code set out in Appendix C1 of the Listing Rules, with independent oversight provided by the Audit, Nomination, Remuneration, and Sustainability Committees, and established procedures for handling misconduct and policies for inside information and securities dealing - The Company complied with the applicable code provisions of the Corporate Governance Code set out in Appendix C1 of the Listing Rules for the six months ended June 30, 2025[52](index=52&type=chunk) - The Audit Committee, Nomination Committee, and Remuneration Committee are all chaired by independent non-executive directors, providing independent oversight[52](index=52&type=chunk) - The Sustainability Committee oversees the development and implementation of the Group's sustainability initiatives[52](index=52&type=chunk) - The Company has established policies on inside information and securities dealing for compliance by all Group employees[52](index=52&type=chunk) [Standard of Conduct for Securities Transactions by Directors](index=19&type=section&id=董事進行證券交易的標準守則) The Board adopted the Standard of Conduct for Securities Transactions by Directors as set out in Appendix C3 of the Listing Rules, and all Directors confirmed compliance with the code for the six months ended June 30, 2025 - The Board adopted the Standard of Conduct for Securities Transactions by Directors as set out in Appendix C3 of the Listing Rules as its code of conduct[53](index=53&type=chunk) - All Directors confirmed compliance with the Standard of Conduct for the six months ended June 30, 2025[53](index=53&type=chunk) [Board Composition](index=19&type=section&id=董事局組成) As of the date of this announcement, the Board comprises executive directors, non-executive directors, and independent non-executive directors, including Mr. Kam-an Yen as Chairman and Mr. Siu-chung Choi as Chief Executive Officer - The Board comprises executive directors, non-executive directors, and independent non-executive directors[54](index=54&type=chunk) - Mr. Kam-an Yen serves as Chairman, and Mr. Siu-chung Choi serves as Chief Executive Officer[54](index=54&type=chunk)

[Performance Summary](index=1&type=section&id=2025%20Interim%20Results) This section provides an overview of the Group's financial performance and dividend policy for the first half of 2025 [Overall Performance](index=1&type=section&id=Overall%20Performance) CK Infrastructure recorded solid performance in the first half of 2025, with profit attributable to shareholders at HKD 4.348 billion, a 1% year-on-year increase, maintaining robust financial strength despite geopolitical and economic uncertainties Key Financial Data for H1 2025 | Indicator | Amount | YoY Change | | :--- | :--- | :--- | | Profit Attributable to Shareholders | HKD 4.348 billion | +1% | - The Group's performance remained robust despite market uncertainties including volatile political situations, complex interest rate outlooks, trade barriers, and inflationary pressures[3](index=3&type=chunk) [Dividend Growth](index=1&type=section&id=Dividend%20Growth) The Board declared an interim dividend of HKD 0.73 per share for 2025, a 1.4% increase from the prior year, reflecting the company's stable shareholder return policy 2025 Interim Dividend | Item | Amount/Date | | :--- | :--- | | Interim Dividend | HKD 0.73 per share | | YoY Growth | +1.4% | | Register Closing Date | September 11, 2025 | | Payment Date | September 24, 2025 | [Business Review](index=1&type=section&id=Business%20Review) This section details the performance of the Group's various infrastructure operations across different geographical segments [Power Assets](index=1&type=section&id=Power%20Assets) Power Assets contributed HKD 1.095 billion in profit to the Group, a 1% year-on-year increase, with its international operations and HK Electric maintaining stable performance Power Assets Profit Contribution | Item | Amount | YoY Change | | :--- | :--- | :--- | | Profit Contribution | HKD 1.095 billion | +1% | [UK Operations](index=2&type=section&id=UK%20Operations) UK operations' profit contribution increased by 19% year-on-year to HKD 2.223 billion, driven by enhanced contributions from Northumbrian Water, three gas distribution networks, and UK Power Networks UK Operations Profit Contribution | Item | Amount | YoY Change (HKD) | YoY Change (Local Currency) | | :--- | :--- | :--- | :--- | | Profit Contribution | HKD 2.223 billion | +19% | +17% | - Draft determinations for the new regulatory period for NGN and WWU gas networks propose increased returns[7](index=7&type=chunk) - NWG's profit growth benefited from inflation-linked capital value increases, with the company seeking a redetermination from the CMA on new regulatory terms[8](index=8&type=chunk) [Australia Infrastructure Operations](index=3&type=section&id=Australia%20Infrastructure%20Operations) Australia operations' profit contribution decreased by 8% year-on-year to HKD 793 million, impacted by a weak exchange rate, expiry of high-margin contracts, and declining market electricity prices Australia Operations Profit Contribution | Item | Amount | YoY Change (HKD) | YoY Change (Local Currency) | | :--- | :--- | :--- | :--- | | Profit Contribution | HKD 793 million | -8% | -5% | - SA Power Networks (SAPN) commenced a new regulatory period on July 1, 2025, with increased allowed returns and asset base growth[10](index=10&type=chunk) [Continental Europe Infrastructure Operations](index=3&type=section&id=Continental%20Europe%20Infrastructure%20Operations) Continental Europe operations' profit contribution grew 3% year-on-year to HKD 432 million, driven by strong ista performance and progress in Dutch Enviro Energy's waste-to-energy facility reconstruction Continental Europe Operations Profit Contribution | Item | Amount | YoY Change (HKD) | YoY Change (Local Currency) | | :--- | :--- | :--- | :--- | | Profit Contribution | HKD 432 million | +3% | Largely Similar | - The first phase of Dutch Enviro Energy's waste-to-energy facility reconstruction is complete, with power generation expected to resume early next year[13](index=13&type=chunk) [Canada Infrastructure Operations](index=4&type=section&id=Canada%20Infrastructure%20Operations) Canada operations' profit contribution declined 9% year-on-year to HKD 275 million, primarily due to reduced power generation and prices from Canadian Power, despite strong growth from Reliance Home Comfort Canada Operations Profit Contribution | Item | Amount | YoY Change (HKD) | YoY Change (Local Currency) | | :--- | :--- | :--- | :--- | | Profit Contribution | HKD 275 million | -9% | -5% | [New Zealand and Hong Kong/Mainland China Operations](index=4&type=section&id=New%20Zealand%20and%20Hong%20Kong%2FMainland%20China%20Operations) New Zealand operations contributed HKD 80 million in profit, consistent with the prior year, while Hong Kong and Mainland China operations saw a slight 2% increase to HKD 98 million New Zealand, Hong Kong, and Mainland China Operations Profit Contribution | Region | Profit Contribution (HKD) | YoY Change | | :--- | :--- | :--- | | New Zealand | 80 million | Similar | | Hong Kong and Mainland China | 98 million | +2% | [Financial Position and Outlook](index=5&type=section&id=Financial%20Position%20and%20Outlook) This section outlines the Group's financial strength, ongoing sustainable development initiatives, post-balance sheet events, and future strategic outlook [Continued Strong Financial Position](index=5&type=section&id=Continued%20Strong%20Financial%20Position) The Group maintains a robust financial position with HKD 4.7 billion in cash and a stable net debt to total capital ratio of 10.6%, retaining an 'A/Stable' credit rating from S&P Financial Position (June 30, 2025) | Indicator | Value | | :--- | :--- | | Cash Holdings | HKD 4.7 billion | | Net Debt to Total Capital Ratio | 10.6% | | Pro-forma Net Debt to Total Capital Ratio | 48.7% | | S&P Credit Rating | A/Stable | [Sustainable Development Projects](index=5&type=section&id=Sustainable%20Development%20Projects) The Group is actively advancing sustainable development projects in its UK and Australian distribution networks, including smart grids, EV charging, and clean hydrogen/biomethane initiatives, aligning with global decarbonization trends - The Group is advancing sustainable development projects in the UK and Australia, including smart grids, EV charging infrastructure, and clean hydrogen/biomethane initiatives[19](index=19&type=chunk) [Post Balance Sheet Events](index=5&type=section&id=Post%20Balance%20Sheet%20Events) In July 2025, the Group's joint venture signed an agreement to dispose of the UK Rails project, which is expected to significantly reduce the Group's net debt to total capital ratio upon completion - The Group signed an agreement in July 2025 to dispose of the UK Rails project, which is expected to significantly reduce the Group's gearing ratio upon completion[20](index=20&type=chunk) [Outlook](index=6&type=section&id=Outlook) Chairman Mr. Victor Li noted that despite challenging macro conditions, infrastructure modernization and decarbonization present growth opportunities, positioning CK Infrastructure to pursue acquisitions while balancing stability and growth - The company demonstrates strength through its strong recurring income and predictable cash flows amidst global economic uncertainties[21](index=21&type=chunk) - Tightening public finances, rising cost of capital, and infrastructure modernization demands create competitive advantages for financially strong players[21](index=21&type=chunk) - The Group will continue to collaborate with strategic partners like CK Asset and Power Assets to pursue acquisition opportunities, maintaining prudence without a 'must-win' mentality[21](index=21&type=chunk) [Financial Overview and Corporate Governance](index=7&type=section&id=Financial%20Overview%20and%20Corporate%20Governance) This section details the Group's financial resources, treasury management, gearing ratio, and commitment to corporate governance and employee management [Financial Resources, Treasury Arrangements, and Gearing Ratio](index=7&type=section&id=Financial%20Resources%2C%20Treasury%20Arrangements%2C%20and%20Gearing%20Ratio) As of June 30, 2025, the Group held HKD 4.721 billion in cash and deposits and HKD 20.706 billion in total loans, with the net debt to total capital ratio rising to 10.6% due to hedging derivative cash movements Financial Resources Summary (June 30, 2025) | Indicator | Amount (HKD) | | :--- | :--- | | Total Cash and Deposits | HKD 4.721 billion | | Total Loans | HKD 20.706 billion | | Net Debt | HKD 15.985 billion | | Net Debt to Total Capital Ratio | 10.6% | - The Group uses derivatives to hedge currency and interest rate risks, with a total notional amount of **HKD 58.199 billion** for such instruments at period-end[24](index=24&type=chunk) [Employees and Corporate Governance](index=8&type=section&id=Employees%20and%20Corporate%20Governance) As of period-end, the Group employed 2,277 staff with HKD 510 million in employee expenses, maintaining high corporate governance standards and complying with all provisions of the Corporate Governance Code - The Group, excluding associates, employed **2,277 staff** with related expenses of **HKD 510 million**[27](index=27&type=chunk) - The company complied with the Corporate Governance Code under Hong Kong Listing Rules during the reporting period, with established Audit, Remuneration, Nomination, and Sustainability Committees[29](index=29&type=chunk)[30](index=30&type=chunk)[32](index=32&type=chunk)[33](index=33&type=chunk)[34](index=34&type=chunk) [Consolidated Financial Statements](index=12&type=section&id=Consolidated%20Financial%20Statements) This section presents the Group's consolidated financial statements, including the income statement, statement of financial position, and segment information [Consolidated Income Statement](index=12&type=section&id=Consolidated%20Income%20Statement) For the six months ended June 30, 2025, the Group's revenue was HKD 20.359 billion, up 6.6% year-on-year, with profit for the period at HKD 4.565 billion and profit attributable to shareholders at HKD 4.348 billion Consolidated Income Statement Summary (Six Months Ended June 30) | Indicator (HKD millions) | 2025 | 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 20,359 | 19,090 | +6.6% | | Profit Before Tax | 4,619 | 4,577 | +0.9% | | Profit for the Period | 4,565 | 4,524 | +0.9% | | Profit Attributable to Company Shareholders | 4,348 | 4,311 | +0.9% | | Earnings Per Share (HKD) | 1.73 | 1.71 | +1.2% | [Consolidated Statement of Financial Position](index=13&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's total assets were HKD 164.622 billion, total liabilities HKD 29.387 billion, and net assets HKD 135.235 billion, with equity attributable to company shareholders at HKD 125.271 billion Consolidated Statement of Financial Position Summary (HKD millions) | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Non-Current Assets | 159,050 | 148,365 | | Total Current Assets | 5,572 | 9,472 | | Net Assets | 135,235 | 131,243 | | Equity Attributable to Company Shareholders | 125,271 | 121,280 | [Segment Information](index=16&type=section&id=Segment%20Information) Geographically, the UK was the largest profit contributor at HKD 2.223 billion, up 19%, while Power Assets contributed HKD 1.095 billion, with Australia and Canada declining and Continental Europe, Hong Kong, and Mainland China growing Segment Profit Attributable to Company Shareholders (HKD millions) | Segment | 2025 H1 | 2024 H1 | YoY Change | | :--- | :--- | :--- | :--- | | Power Assets | 1,095 | 1,082 | +1.2% | | UK | 2,223 | 1,865 | +19.2% | | Australia | 793 | 864 | -8.2% | | Continental Europe | 432 | 419 | +3.1% | | Hong Kong and Mainland China | 98 | 96 | +2.1% | | Canada | 275 | 301 | -8.6% | | New Zealand | 80 | 80 | 0.0% |

Financial Performance Summary [Key Financial Metrics](index=1&type=section&id=Key%20Financial%20Metrics) The Group achieved robust growth in Q2 and H1 2025, with Q2 revenue increasing by 15% year-over-year to RMB 184.5 billion and Non-IFRS profit attributable to equity holders growing by 10% to RMB 63.1 billion, while H1 revenue increased by 14% year-over-year with Non-IFRS profit attributable to equity holders growing by 16% 2025 Q2 Financial Summary (YoY and QoQ) | Metric | 2025 Q2 (RMB million) | YoY Change | QoQ Change | | :--- | :--- | :--- | :--- | | Revenue | 184,504 | 15% | 2% | | Gross Profit | 105,013 | 22% | 4% | | Operating Profit | 60,104 | 18% | 4% | | Profit Attributable to Equity Holders | 55,628 | 17% | 16% | | Non-IFRS Profit Attributable to Equity Holders | 63,052 | 10% | 3% | | Non-IFRS Diluted EPS (RMB) | 6.793 | 13% | 3% | 2025 H1 Financial Summary (YoY) | Metric | 2025 H1 (RMB million) | YoY Change | | :--- | :--- | :--- | | Revenue | 364,526 | 14% | | Gross Profit | 205,506 | 21% | | Operating Profit | 117,670 | 14% | | Profit Attributable to Equity Holders | 103,449 | 16% | | Non-IFRS Profit Attributable to Equity Holders | 124,381 | 16% | [Key Operating Metrics](index=3&type=section&id=Key%20Operating%20Metrics) As of June 30, 2025, the combined monthly active users (MAU) of Weixin and WeChat continued to grow, increasing by 3% year-over-year to 1.411 billion, while QQ mobile terminal MAU decreased by 7% year-over-year, and fee-based value-added services subscribers remained stable Key Platform Operating Data as of End of 2025 Q2 | Metric | June 30, 2025 (million) | YoY Change | QoQ Change | | :--- | :--- | :--- | :--- | | Weixin and WeChat Combined MAU | 1,411 | 3% | 0.6% | | QQ Mobile Terminal MAU | 532 | -7% | -0.4% | | Fee-based VAS Subscribers | 264 | 0.4% | -1% | Business Review and Outlook [Overall Business Review](index=3&type=section&id=Overall%20Business%20Review) In Q2 2025, the company continued to increase investment in AI, achieving significant results with AI technology empowering various business segments like games, advertising, and enterprise services, driving revenue and profit growth, while FinTech services also recovered due to improved consumption trends - The company continues to invest in and benefit from AI, with AI technology widely applied in evergreen games (e.g., Honor of Kings), new games (e.g., Delta Force), and advertising platforms, driving growth in game business and marketing services revenue[7](index=7&type=chunk) - Local game Delta Force performed outstandingly, with daily active users exceeding **20 million in July**; internationally, Clash Royale achieved a **seven-year high in monthly revenue**[9](index=9&type=chunk) - Mini-game ecosystem continues to thrive, with **total gross receipts growing by 20%** year-over-year, benefiting from technology platform upgrades[9](index=9&type=chunk) - Hunyuan 3D model ranked first on Hugging Face, demonstrating the company's leading capabilities in foundational model research and development, and has begun to be adopted by game developers and designers[9](index=9&type=chunk) Management Discussion and Analysis [Quarterly Financial Analysis](index=5&type=section&id=Quarterly%20Financial%20Analysis) This quarter's financial performance was strong, with both year-over-year and quarter-over-quarter growth driven by games and advertising, leading to a significant increase in gross margin, while quarter-over-quarter growth benefited from seasonal recovery in advertising, partially offsetting the post-Chinese New Year seasonal decline in games [Year-over-Year Analysis (2025 Q2 vs 2024 Q2)](index=5&type=section&id=Year-over-Year%20Analysis%20(2025%20Q2%20vs%202024%20Q2)) Q2 2025 revenue increased by 15% year-over-year to RMB 184.5 billion, primarily driven by Value Added Services and Marketing Services, with gross profit increasing by 22% and gross margin improving from 53% to 57% due to contributions from high-margin businesses (e.g., domestic games, Video Accounts) and improved cost efficiency, while Non-IFRS net profit attributable to equity holders grew by 10% Revenue Year-over-Year Change by Business Segment (2025 Q2) | Business Segment | Revenue (RMB million) | YoY Change | Key Drivers | | :--- | :--- | :--- | :--- | | Value Added Services | 91,368 | 16% | Domestic and international game growth, social network growth | | Marketing Services | 35,762 | 20% | AI-driven advertising platform improvements, strong demand for Video Accounts and Mini Programs | | FinTech and Business Services | 55,536 | 10% | Growth in consumer loans, commercial payments, and AI-related enterprise services | Gross Profit and Gross Margin Year-over-Year Change by Business Segment (2025 Q2) | Business Segment | Gross Profit (RMB million) | YoY Change | Gross Margin (2025 Q2) | Gross Margin (2024 Q2) | | :--- | :--- | :--- | :--- | :--- | | Value Added Services | 55,223 | 23% | 60% | 57% | | Marketing Services | 20,585 | 24% | 58% | 56% | | FinTech and Business Services | 28,952 | 21% | 52% | 48% | | **Group Overall** | **105,013** | **22%** | **57%** | **53%** | - General and administrative expenses increased by **16%** year-over-year, primarily due to increased R&D expenses and employee costs supporting AI-related business development[17](index=17&type=chunk) [Quarter-over-Quarter Analysis (2025 Q2 vs 2025 Q1)](index=9&type=section&id=Quarter-over-Quarter%20Analysis%20(2025%20Q2%20vs%202025%20Q1)) Q2 2025 revenue increased by 2% quarter-over-quarter to RMB 184.5 billion, with Marketing Services revenue growing by 12% quarter-over-quarter driven by post-Chinese New Year peak season and AI capability deployment, offsetting a 6% seasonal decline in domestic games, while gross profit increased by 4% quarter-over-quarter and gross margin slightly rose from 56% to 57% - Value Added Services revenue slightly decreased by **0.8%** quarter-over-quarter, mainly due to the seasonal decline in domestic games after the Chinese New Year, partially offset by strong **13% growth** in international games[23](index=23&type=chunk) - Marketing Services revenue increased by **12%** quarter-over-quarter, benefiting from AI advertising capability deployment and the post-Chinese New Year peak season[23](index=23&type=chunk) - FinTech and Business Services revenue increased by **1%** quarter-over-quarter, with growth in cloud services and merchant technical service fees offset by a decrease in FinTech services revenue[23](index=23&type=chunk) - Sales and marketing expenses increased by **20%** quarter-over-quarter, primarily due to increased game-related promotional activities[25](index=25&type=chunk) [Other Financial Metrics and Cash Position](index=12&type=section&id=Other%20Financial%20Metrics%20and%20Cash%20Position) As of the end of Q2 2025, the Group's adjusted EBITDA margin increased to 46%, indicating enhanced profitability, while net cash at period-end was RMB 74.6 billion, a decrease from the previous quarter primarily due to annual dividend payments, with Q2 free cash flow at RMB 43.0 billion and significantly increased capital expenditure mainly supporting AI-related business development Other Financial Metrics (2025 Q2) | Metric | Amount (RMB million) | Notes | | :--- | :--- | :--- | | Adjusted EBITDA | 85,122 | 24% YoY increase | | Adjusted EBITDA Margin | 46% | 43% in prior year period | | Capital Expenditure | 19,107 | 119% YoY increase | | Net Cash (Period-end) | 74,592 | 17% QoQ decrease | - As of June 30, 2025, net cash was **RMB 74.6 billion**, a decrease from **RMB 90.2 billion** at the end of the previous quarter, primarily due to the payment of the 2024 fiscal year-end dividend of **RMB 37.5 billion**[34](index=34&type=chunk) - Free cash flow generated in Q2 2025 was **RMB 43.0 billion**, with net cash generated from operating activities of **RMB 74.4 billion**, partially offset by capital expenditure payments of **RMB 22.9 billion** (primarily for AI business)[35](index=35&type=chunk) [Non-IFRS Financial Measures](index=13&type=section&id=Non-IFRS%20Financial%20Measures) The company provides Non-IFRS financial measures to exclude the impact of certain non-cash items (e.g., share-based compensation, amortization of intangible assets) and investment-related transactions, aiming to help investors assess core business performance, with Non-IFRS net profit attributable to equity holders at RMB 63.1 billion in Q2 2025 - Management believes that Non-IFRS financial measures provide useful supplementary information for investors to assess the Group's core business performance by excluding the impact of certain non-cash items and investment-related transactions[28](index=28&type=chunk) IFRS to Non-IFRS Profit Reconciliation (2025 Q2) | Item (RMB million) | Amount | | :--- | :--- | | **Profit Attributable to Equity Holders (IFRS)** | **55,628** | | Add: Share-based compensation | 8,071 | | Less: Net (gain)/loss from investee companies | (3,192) | | Add: Amortization of intangible assets | 2,848 | | Other adjustments and income tax effects | (303) | | **Non-IFRS Profit Attributable to Equity Holders** | **63,052** | Financial Information [Condensed Consolidated Statements](index=18&type=section&id=Condensed%20Consolidated%20Statements) This section provides the unaudited condensed consolidated income statements, statements of comprehensive income, statements of financial position, and statements of cash flows for the three and six months ended June 30, 2025, comprehensively presenting the Group's financial position and operating results Summary of Condensed Consolidated Income Statement (Six Months Ended June 30, 2025) | Metric (RMB million) | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | | Revenue | 364,526 | 320,618 | | Gross Profit | 205,506 | 169,765 | | Operating Profit | 117,670 | 103,288 | | Profit for the Period | 105,769 | 91,017 | Summary of Condensed Consolidated Statement of Financial Position | Metric (RMB million) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Assets | 2,013,310 | 1,780,995 | | Total Liabilities | 810,461 | 727,099 | | Total Equity | 1,202,849 | 1,053,896 | Summary of Condensed Consolidated Cash Flow Statement (Six Months Ended June 30) | Metric (RMB million) | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | | Net Cash Flows from Operating Activities | 151,265 | 126,458 | | Net Cash Flows Used in Investing Activities | (72,407) | (45,449) | | Net Cash Flows Used in Financing Activities | (30,111) | (99,781) | [Notes to Financial Information](index=25&type=section&id=Notes%20to%20Financial%20Information) The notes provide detailed explanations of the basis of preparation, accounting policies, and specific composition of each financial statement item, with key areas including segment information, investment details, share-based payments, borrowings and bills payable, and business combinations [Segment Information](index=25&type=section&id=Segment%20Information) The Group's operations are divided into three segments: Value Added Services, Marketing Services, and FinTech and Business Services. In Q2 2025, Value Added Services contributed 50% of revenue and 53% of gross profit, FinTech and Business Services contributed 30% of revenue and 28% of gross profit, while Marketing Services contributed 19% of revenue and 20% of gross profit Segment Revenue and Gross Profit (2025 Q2) | Business Segment | Revenue (RMB million) | Gross Profit (RMB million) | | :--- | :--- | :--- | | Value Added Services | 91,368 | 55,223 | | Marketing Services | 35,762 | 20,585 | | FinTech and Business Services | 55,536 | 28,952 | | Others | 1,838 | 253 | | **Total** | **184,504** | **105,013** | [Investments](index=34&type=section&id=Investments) As of June 30, 2025, the carrying value of the Group's investments in associates was RMB 307.6 billion, with the fair value of listed associates approximately RMB 340.2 billion, and total financial assets measured at fair value exceeding RMB 630 billion, representing a significant component of the Group's assets - As of June 30, 2025, the fair value of investments in associates (listed portion) was approximately **RMB 340.187 billion**[73](index=73&type=chunk) - Total financial assets measured at fair value (FVTPL + FVTOCI) amounted to **RMB 633.858 billion**[76](index=76&type=chunk)[77](index=77&type=chunk) [Share-based Payments](index=37&type=section&id=Share-based%20Payments) As of June 30, 2025, the company had approximately 91.4 million unexercised share options under the 2023 Share Option Scheme and approximately 123 million unvested award shares under the 2023 Share Award Scheme, which are important tools for employee incentives - As of June 30, 2025, there were **91,400,760** unexercised share options under the 2023 Share Option Scheme[80](index=80&type=chunk) - As of June 30, 2025, there were **122,768,570** unvested award shares under the Share Award Scheme[83](index=83&type=chunk) [Borrowings and Bills Payable](index=40&type=section&id=Borrowings%20and%20Bills%20Payable) As of June 30, 2025, the Group's total borrowings were RMB 261.6 billion, and total bills payable were RMB 132.2 billion, denominated in various currencies, primarily USD and RMB, with most being unsecured - As of June 30, 2025, the Group's total borrowings amounted to **RMB 261.6 billion**[85](index=85&type=chunk) - As of June 30, 2025, the Group's total bills payable amounted to **RMB 132.2 billion**, all of which were unsecured USD-denominated bills[87](index=87&type=chunk)[88](index=88&type=chunk) Other Information [Share Repurchases](index=44&type=section&id=Share%20Repurchases) For the six months ended June 30, 2025, the company repurchased a total of 81,867,000 shares on the Stock Exchange for a total consideration of approximately HKD 36.5 billion, aiming to enhance long-term shareholder value, with all repurchased shares having been cancelled Share Repurchase Details for H1 2025 | Month of Purchase | Number of Shares Purchased | Total Consideration Paid (HKD) | | :--- | :--- | :--- | | January | 37,060,000 | 14,117,031,503.00 | | March | 5,924,000 | 3,003,627,164.10 | | April | 8,430,000 | 3,905,420,932.80 | | May | 9,784,000 | 5,004,217,423.60 | | June | 20,669,000 | 10,509,720,949.40 | | **Total** | **81,867,000** | **36,540,017,972.90** | [Employees and Remuneration Policy](index=44&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the Group had 111,221 employees, an increase from the same period last year, with total remuneration costs for the first half of the year amounting to RMB 65.0 billion - As of June 30, 2025, the Group had **111,221** employees, representing a **5.4%** year-over-year increase[95](index=95&type=chunk) - Total remuneration costs for the six months ended June 30, 2025, amounted to **RMB 65.0 billion**, a **19.7%** year-over-year increase[95](index=95&type=chunk) [Corporate Governance](index=45&type=section&id=Corporate%20Governance) The Audit Committee has reviewed the interim financial information, and while the company deviates from the Corporate Governance Code's provision on directors' rotation, the Board believes this deviation has no material impact on the company's overall operations - The Audit Committee has reviewed the Group's unaudited interim financial information[96](index=96&type=chunk) - The company deviates from Rule B.2.2 of the Corporate Governance Code (regarding directors retiring by rotation at least once every three years), concerning the re-election of Mr. Ian Charles Stone[97](index=97&type=chunk)

[Performance Summary](index=2&type=section&id=Performance%20Summary) The company achieved a significant H1 2025 turnaround, with total revenue up 14.8% to RMB 1.078 billion and a net profit of RMB 62.17 million, reversing a prior-year loss [Financial Highlights](index=2&type=section&id=Financial%20Highlights) The company achieved a significant turnaround in H1 2025, with total revenue growing 14.8% to RMB 1.078 billion and a net profit of RMB 62.17 million, reversing a prior-year loss of RMB 249 million Financial Highlights for the Six Months Ended June 30 | Metric | H1 2025 (RMB Thousand) | H1 2024 (RMB Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 1,078,425 | 939,162 | 14.8% | | Gross Profit | 413,929 | 359,254 | 15.2% | | Profit/(Loss) for the Period | 62,174 | (249,072) | N/A | | Adjusted Profit from Continuing Operations for the Period | 77,012 | 30,497 | 152.5% | [Key Financial Statements](index=3&type=section&id=Key%20Financial%20Statements) Financial statements for the period reflect significant improvements, with profit or loss shifting from substantial loss to profitability and the financial position showing stable asset and liability structures [Consolidated Statement of Profit or Loss](index=3&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss) For the six months ended June 30, 2025, the company achieved a significant turnaround from a RMB 249 million loss to a RMB 62.17 million profit, driven by revenue growth and the absence of large fair value changes in convertible preferred shares Key Items from Consolidated Statement of Profit or Loss (RMB Thousand) | Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Revenue | 1,078,425 | 939,162 | | Gross Profit | 413,929 | 359,254 | | Operating Profit/(Loss) | 60,145 | (81,156) | | Fair Value Change of Convertible Redeemable Preferred Shares | – | (397,118) | | Profit/(Loss) from Continuing Operations for the Period | 62,174 | (482,206) | | Profit/(Loss) for the Period | 62,174 | (249,072) | | Basic Earnings/(Loss) Per Share (RMB) | 0.08 | (0.45) | [Consolidated Statement of Financial Position](index=6&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, total assets were RMB 1.399 billion, total liabilities RMB 766 million, and net assets RMB 633 million, with net current assets of RMB 326 million indicating strong short-term solvency Consolidated Statement of Financial Position Summary (RMB Thousand) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Assets | 1,399,189 | 1,659,186 | | Total Liabilities | 766,191 | 1,018,157 | | Net Assets | 632,998 | 641,029 | | Cash and Cash Equivalents | 565,864 | 801,046 | | Bank Loans and Other Borrowings | 369,308 | 529,646 | [Management Discussion and Analysis](index=16&type=section&id=Management%20Discussion%20and%20Analysis) This section details the company's strategic business advancements, including AI-driven product innovation and Web3 expansion, alongside a comprehensive analysis of its strong financial performance [Business Review](index=16&type=section&id=Business%20Review) In H1 2025, the company achieved high-quality business growth driven by AI technology, product innovation, and a dual-dimensional strategy, while actively expanding into Web3 through strategic partnerships - The company leverages AI technology as a core driver, comprehensively advancing product upgrades and innovation, and integrating AI coding into internal R&D processes to enhance efficiency[34](index=34&type=chunk) - As of June 30, 2025, the customer net revenue retention rate for the twelve months was **107%**, consistently exceeding 100% over multiple periods[36](index=36&type=chunk) - The company signed a strategic cooperation agreement with HashKey Group to expand into digital asset trading, Web3 technology, and blockchain ecosystems, initiating Bitcoin investments and preparing for stablecoin license applications[38](index=38&type=chunk)[40](index=40&type=chunk) [AI Retail Core Solutions Review](index=18&type=section&id=AI%20Retail%20Core%20Solutions%20Review) The AI Retail Core Solutions business achieved continuous upgrades and market expansion, launching its first overseas AI-powered TMS system, integrating with local life service platforms, and securing new domestic and international clients - Successfully launched the first overseas AI-powered Transportation Management System (TMS) at DFI Retail Group's Wellcome Supermarket in Hong Kong, utilizing AI for intelligent route planning to enhance dispatch efficiency and punctuality[42](index=42&type=chunk) - As one of the first technical service providers, the company integrated with Douyin's group-buying feature, developing a mini-program for coupon redemption and product add-ons, and using AI to optimize coupon strategies and inventory forecasting[45](index=45&type=chunk) - New benchmark clients signed in the domestic market include Shanghai Sugar & Wine Group, Xinjiang Huijia Times, and Ningxia Xiaoren Fruit Industry; international collaborations deepened with DFI Retail Group and SM Group[35](index=35&type=chunk)[50](index=50&type=chunk)[51](index=51&type=chunk) [AI Retail Value-added Services Review](index=24&type=section&id=AI%20Retail%20Value-added%20Services%20Review) AI Retail Value-added Services saw continuous innovation, with smart loss prevention recovering over RMB 3 million in losses and remote guarding serving over 400 stores, while expanding partnerships with leading enterprises and new clients - The smart loss prevention solution continued to iterate, helping a major retailer recover over **RMB 3 million** in merchandise losses within one year of deployment, saving **30%** in labor costs and improving loss recovery efficiency by **60 times**[54](index=54&type=chunk) - The remote guarding system served over **400 stores**, generating **1.86 million** unmanned night service orders, **RMB 28.13 million** in new night sales, and acquiring **510,000** new customers[54](index=54&type=chunk) - Business expansion achieved significant results, with a comprehensive partnership established with Xinjiang Aijia, one of the top three supermarket chains in Xinjiang, providing smart store services including loss prevention, inspection, and cashiering[57](index=57&type=chunk) [Business Outlook for 2025](index=26&type=section&id=Business%20Outlook%20for%202025) Looking ahead, the company will continue to embrace AI and technological innovation to develop smarter solutions, while actively exploring new opportunities in stablecoins and blockchain payments within the Web3 sector - The company will steadfastly embrace AI, with technological innovation as its core engine[58](index=58&type=chunk) - The company is optimistic about the future of the Web3 industry and will continue to actively explore potential new businesses in stablecoins and blockchain payments to serve its retail customers[58](index=58&type=chunk) [Financial Review](index=26&type=section&id=Financial%20Review) H1 2025 saw strong financial performance with total revenue up 14.8% to RMB 1.078 billion, gross profit up 15.2% to RMB 414 million, and a net profit of RMB 62.17 million, driven by revenue growth and cost control [Revenue Analysis](index=26&type=section&id=Revenue%20Analysis) Total revenue increased 14.8% to RMB 1.078 billion, with AI Retail Core Solutions growing 16.2% to RMB 488 million and AI Retail Value-added Services growing 13.7% to RMB 591 million Revenue by Business Segment (RMB Thousand) | Business Segment | H1 2025 | H1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | AI Retail Core Solutions | 487,868 | 419,838 | 16.2% | | AI Retail Value-added Services | 590,557 | 519,324 | 13.7% | | **Total** | **1,078,425** | **939,162** | **14.8%** | Revenue by Geographical Location (RMB Thousand) | Region | H1 2025 | H1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Mainland China | 1,002,180 | 864,121 | 16.0% | | Overseas | 76,245 | 75,041 | 1.6% | | **Total** | **1,078,425** | **939,162** | **14.8%** | [Cost and Gross Profit Analysis](index=31&type=section&id=Cost%20and%20Gross%20Profit%20Analysis) Operating costs increased 14.6% to RMB 664 million, maintaining a stable gross margin of 38.4%, with AI Retail Core Solutions' margin decreasing due to project ramp-up and AI Retail Value-added Services' margin significantly improving Gross Profit and Gross Margin Analysis | Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Gross Profit (RMB Thousand) | 413,929 | 359,254 | | Gross Margin (%) | 38.4% | 38.3% | | **Segment Gross Margin** | | | | AI Retail Core Solutions | 68.3% | 76.8% | | AI Retail Value-added Services | 13.7% | 7.1% | [Operating Expenses Analysis](index=33&type=section&id=Operating%20Expenses%20Analysis) Sales and marketing expenses increased 47.7% to RMB 63.4 million due to overseas expansion, while R&D expenses decreased 6.5% to RMB 190 million, reflecting cost control and efficiency gains from AI tools - Sales and marketing expenses increased **47.7%** year-on-year to **RMB 63.4 million**, primarily due to overseas business development and increased marketing activities[76](index=76&type=chunk) - R&D expenses decreased **6.5%** year-on-year to **RMB 190 million**, attributed to cost control, enhanced efficiency through AI tools, and accumulated technological capabilities[78](index=78&type=chunk) [Profitability Analysis](index=35&type=section&id=Profitability%20Analysis) The company's profitability fundamentally improved, with profit from continuing operations reaching RMB 62.17 million, reversing a RMB 482 million loss, and adjusted profit from continuing operations surging 152.5% to RMB 77.01 million - The company recorded a profit of **RMB 62.17 million** from continuing operations for the period, compared to a loss of **RMB 482 million** in the prior year, successfully turning losses into profit[81](index=81&type=chunk) Adjusted Profit Reconciliation Statement (RMB Thousand) | Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Profit/(Loss) from Continuing Operations for the Period | 62,174 | (482,206) | | Add: Equity-settled Share-based Payment Expenses | 15,720 | 8,330 | | Add: Fair Value Change of Convertible Redeemable Preferred Shares | – | 397,118 | | Add: Fair Value Change of Equity Investments | 2,433 | 86,883 | | Add: Listing Expenses | – | 20,372 | | **Adjusted Profit from Continuing Operations for the Period** | **77,012** | **30,497** | [Liquidity and Capital Resources](index=39&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2025, the company maintained a strong financial position with RMB 566 million in cash and cash equivalents, a reduced debt-to-asset ratio of 54.8%, and decreased bank loans, indicating a robust capital structure - As of June 30, 2025, cash and cash equivalents were **RMB 566 million**, a decrease from **RMB 801 million** at the end of 2024, primarily due to repayment of bank loans, acquisition of non-controlling interests, and ordinary share repurchases[94](index=94&type=chunk) - The adjusted debt-to-asset ratio decreased from **61.4%** at the end of 2024 to **54.8%** as of June 30, 2025[93](index=93&type=chunk) - Total outstanding bank loans and other borrowings decreased from **RMB 530 million** at the end of 2024 to **RMB 369 million**[96](index=96&type=chunk) [Notes to Financial Statements](index=8&type=section&id=Notes%20to%20Financial%20Statements) This section provides detailed disclosures for key financial statement items, including revenue segmentation, earnings per share, trade receivables and payables, and dividend policies [Revenue and Segment Reporting](index=8&type=section&id=Revenue%20and%20Segment%20Reporting) The company restructured revenue into AI Retail Core Solutions and AI Retail Value-added Services, contributing RMB 488 million and RMB 591 million respectively to the total RMB 1.078 billion revenue, with mainland China accounting for 92.9% - The company restructured its revenue into two core segments: AI Retail Core Solutions (formerly Operating Systems) and AI Retail Value-added Services (formerly AIoT Solutions and Other Businesses)[15](index=15&type=chunk) Segment Revenue and Gross Profit (H1 2025, RMB Thousand) | Segment | Revenue | Gross Profit | | :--- | :--- | :--- | | AI Retail Core Solutions | 487,868 | 333,316 | | AI Retail Value-added Services | 590,557 | 80,613 | | **Total** | **1,078,425** | **413,929** | - During the reporting period, revenue from the single largest customer group (Customer A) was **RMB 743 million**, accounting for approximately **68.9%** of total revenue[17](index=17&type=chunk) [Earnings Per Share](index=12&type=section&id=Earnings%20Per%20Share) The company achieved profitability with a net profit of RMB 67.53 million attributable to equity holders, resulting in basic and diluted earnings per share of RMB 0.08, a significant improvement from a loss of RMB 0.45 per share in the prior year Earnings Per Share Calculation | Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Profit/(Loss) Attributable to Equity Holders (RMB Thousand) | 67,526 | (234,875) | | Weighted Average Number of Ordinary Shares | 892,749,239 | 525,150,000 | | Basic Earnings/(Loss) Per Share (RMB) | 0.08 | (0.45) | | Diluted Earnings/(Loss) Per Share (RMB) | 0.08 | (0.45) | [Trade Receivables and Payables](index=13&type=section&id=Trade%20Receivables%20and%20Payables) As of June 30, 2025, net trade receivables increased to RMB 308 million and trade payables to RMB 115 million, with the majority of both balances aged within three months, indicating healthy working capital management - Trade receivables increased from **RMB 248 million** to **RMB 308 million**, and trade payables increased from **RMB 98.53 million** to **RMB 115 million**[28](index=28&type=chunk)[29](index=29&type=chunk) - As of June 30, 2025, approximately **68.7%** of trade receivables (**RMB 212 million**) and **94.2%** of trade payables (**RMB 108 million**) were aged within three months[29](index=29&type=chunk) [Dividends](index=15&type=section&id=Dividends) The company neither paid nor declared any dividends for the six months ended June 30, 2025, nor did it propose any interim dividends after the reporting period - The company neither paid nor declared any dividends for the six-month periods ended June 30, 2025, and June 30, 2024[30](index=30&type=chunk) [Other Important Information](index=42&type=section&id=Other%20Important%20Information) This section covers additional significant disclosures, including the utilization of global offering proceeds, post-reporting period events, human resources, and corporate governance practices [Use of Proceeds from Global Offering](index=44&type=section&id=Use%20of%20Proceeds%20from%20Global%20Offering) The company utilized HKD 220 million of the HKD 630 million net proceeds from its December 2024 global offering by June 30, 2025, primarily for new application development, talent acquisition, and sales network expansion Use of Net Proceeds (HKD Million) | Planned Use | Total Amount | Utilized During Reporting Period | Unutilized Amount | | :--- | :--- | :--- | :--- | | Development of New Applications and Service Modules | 265.5 | 82.0 | 177.2 | | Talent Acquisition | 189.1 | 76.8 | 112.2 | | Strategic Cooperation, Investments, and Acquisitions | 63.0 | 0 | 63.0 | | Expansion of Sales Network and Brand Reputation | 49.8 | 21.4 | 28.4 | | Working Capital and General Corporate Purposes | 63.0 | 39.3 | 5.7 | | **Total** | **630.4** | **219.5** | **386.5** | [Events After the Reporting Period](index=45&type=section&id=Events%20After%20the%20Reporting%20Period) Subsequent to the reporting period, the company completed a placement and subscription in July 2025, raising approximately HKD 388 million in net proceeds for R&D investments in stablecoins and blockchain, technology enhancement, and general corporate purposes - In July 2025, the company completed a placement and subscription, issuing **35,400,000** shares at **HKD 11.1** per share[110](index=110&type=chunk) - The net proceeds from this subscription, approximately **HKD 388 million**, are intended for R&D investments in stablecoins and blockchain, technology enhancement, and general corporate purposes[110](index=110&type=chunk) [Human Resources](index=42&type=section&id=Human%20Resources) As of June 30, 2025, the group had 1,340 employees, with R&D personnel comprising 56.0%, and employee costs decreased from RMB 349 million to RMB 322 million, reflecting cost optimization efforts Number of Employees by Function (As of June 30, 2025) | Function | Number of Employees | Percentage | | :--- | :--- | :--- | | Sales and Marketing | 84 | 6.3% | | Research and Development | 752 | 56.0% | | Operations | 321 | 24.0% | | General and Administrative | 183 | 13.7% | | **Total** | **1,340** | **100%** | - Employee costs decreased from **RMB 349 million** for the six months ended June 30, 2024, to **RMB 322 million** during the reporting period[106](index=106&type=chunk) [Corporate Governance](index=46&type=section&id=Corporate%20Governance) The company maintains high corporate governance standards, adhering to all applicable provisions of the HKEX Corporate Governance Code during the reporting period, with the audit committee reviewing the unaudited consolidated financial statements - During the reporting period, the company consistently complied with all applicable provisions of the Corporate Governance Code[113](index=113&type=chunk) - The Audit Committee reviewed the Group's unaudited consolidated financial statements for the reporting period[115](index=115&type=chunk)

[Announcement Overview](index=1&type=section&id=%E5%85%AC%E5%91%8A%E6%A6%82%E8%A7%88) This supplemental announcement by Qianxun Technology Co., Ltd. (Stock Code: 1640), issued on August 13, 2025, provides additional information on the use of proceeds from new share placement for the 2024 annual report, to be read with the Management Discussion and Analysis section[2](index=2&type=chunk)[3](index=3&type=chunk)[7](index=7&type=chunk) [Use of Proceeds from Share Placement](index=1&type=section&id=%E9%85%8D%E5%94%AE%E6%96%B0%E8%82%A1%E6%89%80%E5%BE%97%E6%AC%BE%E9%A1%B9%E7%94%A8%E9%80%94) This chapter details Qianxun Technology's May 2024 share placement, with net proceeds of approximately HK$39.4 million fully utilized by December 31, 2024, for bank loan repayment and general working capital - The company entered into an agreement on May 24, 2024, to place **80,000,000 new shares** at **HK$0.50 per share**, with the placement completed on June 7, 2024[4](index=4&type=chunk) Use of Proceeds from Share Placement | Metric | Amount (HK$ Million) | Planned Use | Actual Use (as of December 31, 2024) | | :--- | :--- | :--- | :--- | | Net Proceeds from Placement | 39.4 | - | - | | Repayment of Bank Loans | 23.6 | Repayment of bank loans | 23.6 | | General Working Capital | 15.8 | Staff costs, rental expenses, and other office expenses | 15.8 | | **Total** | **39.4** | **Utilized as planned** | **Utilized as planned** | [Other Information](index=2&type=section&id=%E5%85%B6%E4%BB%96%E4%BF%A1%E6%81%AF) This supplemental announcement confirms that all other information in the 2024 annual report remains unchanged, except for the additional details on the use of placement proceeds, and lists the company's board members and announcement date - The information in this supplemental announcement does not affect any other information in the 2024 annual report, with all other details remaining unchanged[5](index=5&type=chunk) - The announcement date is **August 13, 2025**, listing the company's executive directors (Mr. Sun Changpeng, Mr. Leng Xuejun, Mr. Li Tianzi) and independent non-executive directors (Ms. Lam Oi Yan, Mr. Wong Sing Sze, Mr. Niu Zhongjie)[6](index=6&type=chunk)[7](index=7&type=chunk)

```markdown [Financial Highlights](index=1&type=section&id=Financial%20Highlights) Financial Highlights for the Six Months Ended June 30, 2025 Financial Highlights for the Six Months Ended June 30, 2025 | Metric | H1 2025 | H1 2024 | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Revenue | 2,305 million USD | 2,067 million USD | +11.5% | | Profit | 30 million USD | 33 million USD | -7.5% | | Basic EPS | 0.44 cents | 0.46 cents | -3.4% | | Interim Dividend | None | None | - | [Condensed Consolidated Interim Financial Statements](index=2&type=section&id=Condensed%20Consolidated%20Interim%20Financial%20Statements) [Condensed Consolidated Interim Income Statement](index=2&type=section&id=Condensed%20Consolidated%20Interim%20Income%20Statement) For the six months ended June 30, 2025, the Group's revenue increased by **11.5%** year-on-year to **$2.305 billion**; however, due to increased cost of sales, administrative expenses, and income tax expense, profit for the period decreased by **7.5%** year-on-year to **$30.21 million**, and basic earnings per share declined from **0.46 cents** to **0.44 cents** Key Income Statement Items (thousand USD) | Item | H1 2025 | H1 2024 | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Revenue | 2,304,962 | 2,066,760 | +11.5% | | Gross Profit | 428,517 | 421,193 | +1.7% | | Operating Profit | 105,119 | 93,175 | +12.8% | | Profit Before Tax | 80,491 | 61,395 | +31.1% | | Profit for the Period | 30,213 | 32,672 | -7.5% | | Profit Attributable to Owners of the Company | 31,511 | 32,524 | -3.1% | | Basic EPS (cents) | 0.44 | 0.46 | -4.3% | [Condensed Consolidated Interim Statement of Comprehensive Income](index=3&type=section&id=Condensed%20Consolidated%20Interim%20Comprehensive%20Income%20Statement) Total comprehensive income for the period shifted from a loss of **$51.78 million** in the prior period to an income of **$71.44 million**, primarily driven by a **$41.31 million** foreign currency exchange gain, compared to an **$84.55 million** exchange loss in the prior period - Foreign currency exchange differences were the primary factor influencing the change in total comprehensive income, shifting from a loss of **$84.55 million** in the prior period to a gain of **$41.31 million** in the current period[5](index=5&type=chunk) [Condensed Consolidated Interim Balance Sheet](index=4&type=section&id=Condensed%20Consolidated%20Interim%20Balance%20Sheet) As of June 30, 2025, the Group's total assets increased to **$5.736 billion** and total liabilities increased to **$3.182 billion**, with asset growth primarily from property, plant, and equipment and inventory, and liability growth mainly from increased bank borrowings Key Balance Sheet Items (thousand USD) | Item | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Total Assets | 5,736,239 | 5,470,183 | +4.9% | | Total Liabilities | 3,182,084 | 2,987,095 | +6.5% | | Total Equity | 2,554,155 | 2,483,088 | +2.9% | [Notes to Financial Statements](index=6&type=section&id=Notes%20to%20Condensed%20Consolidated%20Interim%20Financial%20Information) [Segment Information](index=7&type=section&id=4%20Segment%20Information) The Group's operations are divided into two main segments, Semi-finished Products and Consumer Goods, with Semi-finished Products contributing the vast majority of revenue; by product line, Automotive business doubled due to acquisition, and Cloud and Network Infrastructure business performed strongly driven by AI demand, while the US remained the largest market despite a year-on-year decline, with growth recorded in China, Taiwan, and parts of Europe [Revenue by Operating Segment](index=8&type=section&id=Revenue%20by%20Operating%20Segment) Revenue from the Semi-finished Products segment increased by **14.3%** year-on-year to **$2.018 billion**, while the Consumer Goods segment's revenue decreased by **4.7%** year-on-year to **$287 million** Revenue from External Customers (thousand USD) | Operating Segment | H1 2025 | H1 2024 | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Semi-finished Products | 2,018,217 | 1,765,915 | +14.3% | | Consumer Goods | 286,745 | 300,845 | -4.7% | | **Total** | **2,304,962** | **2,066,760** | **+11.5%** | [Revenue by Product Line](index=9&type=section&id=Revenue%20by%20Product%20Line) Automotive and Cloud and Network Infrastructure businesses were the primary growth drivers, with revenues increasing by **102.3%** and **35.7%** year-on-year respectively, while Smartphone and System Terminal Products businesses experienced revenue declines Revenue by Product Line (thousand USD) | Product Line | H1 2025 | H1 2024 | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Automotive | 459,755 | 227,270 | +102.3% | | Cloud and Network Infrastructure | 353,901 | 260,729 | +35.7% | | Computer and Consumer Electronics | 432,403 | 378,226 | +14.3% | | Smartphone | 365,123 | 415,228 | -12.1% | | System Terminal Products | 588,516 | 671,576 | -12.4% | [Revenue by Geographical Region](index=9&type=section&id=Revenue%20by%20Geographical%20Region) Revenue from the US market decreased by **10.4%** year-on-year but remained the largest market, while China, Singapore, Germany, and Ireland markets achieved significant growth Revenue by Geographical Region (thousand USD) | Region | H1 2025 | H1 2024 | Y-o-Y Change | | :--- | :--- | :--- | :--- | | United States | 812,496 | 906,525 | -10.4% | | China | 382,372 | 347,731 | +9.9% | | Taiwan | 204,742 | 185,138 | +10.6% | | Singapore | 133,002 | 72,077 | +84.5% | | Germany | 79,629 | 37,071 | +114.8% | | Ireland | 79,959 | 39,031 | +104.9% | [Major Customers](index=10&type=section&id=Major%20Customers) The Group has a high reliance on major customers, with two key clients collectively contributing over **43%** of total revenue, where Customer A's revenue decreased while Customer B's revenue increased Major Customer Revenue Contribution (thousand USD) | Customer | H1 2025 | H1 2024 | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Customer A | 717,741 | 812,794 | -11.7% | | Customer B | 284,238 | 244,853 | +16.1% | [Other Gains and Expenses](index=12&type=section&id=6%20Other%20Gains%20-%20Net) The period recorded goodwill impairment losses of **$20.94 million** and property, plant, and equipment impairment losses of **$5.38 million**, primarily related to the acoustics business, which faces a pessimistic outlook due to challenges in raw material supply, production efficiency, and trade policies, leading to recoverable amounts of assets being lower than their carrying values - Due to severe challenges and failure to meet budget targets in the acoustics business, the Group conducted an impairment assessment, recognizing goodwill impairment losses of approximately **$20.94 million** and property, plant, and equipment impairment losses of **$5.38 million**[27](index=27&type=chunk) [Dividends](index=15&type=section&id=9%20Dividends) The Board did not declare any interim dividend for the six months ended June 30, 2025, consistent with the policy in the prior period - The company did not declare an interim dividend for 2025[32](index=32&type=chunk) [Management Discussion and Analysis](index=17&type=section&id=Management%20Discussion%20and%20Analysis) [Business Overview and Outlook](index=17&type=section&id=Business%20Overview%20and%20Outlook) The Group's first-half revenue grew by **11.5%**, primarily driven by strong growth in Automotive business (**+102.3%**) and Cloud and Network Infrastructure business (**+35.7%**), benefiting from the acquisition of Auto-Kabel and demand from the AI server market; looking ahead, the company is optimistic about long-term opportunities from the AI wave and will continue to invest in 5GAIoT, acoustics, and electric vehicle sectors, while remaining cautious about macroeconomic uncertainties - Cloud and Network Infrastructure business revenue increased by **35.7%** year-on-year, benefiting from AI server demand[36](index=36&type=chunk) - Automotive business revenue significantly increased by **102.3%** year-on-year due to the successful acquisition of Auto-Kabel Group[37](index=37&type=chunk) - The company expects the connector industry to recover with the AI wave driving the consumer electronics industry, and will continue to invest in end markets such as 5GAIoT, acoustics, and electric vehicles[42](index=42&type=chunk) [Operating Results](index=20&type=section&id=Operating%20Results) Despite an **11.5%** revenue increase, profit decreased by **7.5%**, primarily due to a decline in gross margin from **20.4%** to **18.6%** and a substantial **75.0%** year-on-year increase in income tax expense, with the gross margin decline attributed to product mix changes and exchange rate impacts, and increased taxes stemming from withholding tax on profit distributions from Chinese subsidiaries Revenue Share by End Market | End Market | H1 2025 Share | H1 2024 Share | | :--- | :--- | :--- | | System Terminal Products | 25.5% | 32.5% | | Automotive | 19.9% | 11.0% | | Computer and Consumer Electronics | 18.8% | 18.3% | | Smartphone | 15.8% | 20.1% | | Cloud and Network Infrastructure | 15.4% | 12.6% | - Gross margin decreased from **20.4%** in the prior period to **18.6%**, primarily due to changes in product mix and exchange rate impacts[47](index=47&type=chunk) - Income tax expense increased by **75.0%** year-on-year, mainly due to withholding tax expenses on profit distributions from Chinese subsidiaries and increased operating profit in certain regions[52](index=52&type=chunk) [Liquidity and Capital Resources](index=22&type=section&id=Liquidity%20and%20Capital%20Resources) The company's financial position is robust, though leverage has increased; as of period-end, cash and cash equivalents were **$1.101 billion**, total bank borrowings increased to **$1.823 billion**, and the debt-to-equity ratio (net debt/total capital) rose from **15.4%** at year-end to **22.1%**, with capital expenditure increasing year-on-year to **$275 million**, primarily for new production facilities Liquidity Metrics | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and Cash Equivalents | 1,101 million USD | 1,113 million USD | | Total Bank Borrowings | 1,823 million USD | 1,538 million USD | | Current Ratio | 1.4 times | 1.4 times | | Quick Ratio | 0.9 times | 1.0 times | | Debt-to-Equity Ratio | 22.1% | 15.4% | - Capital expenditure for the first half was **$275 million**, a **30.3%** year-on-year increase (compared to **$211 million** in the prior period), primarily for establishing new production facilities and upgrading existing ones[57](index=57&type=chunk) [Human Resources and Foreign Exchange Risk](index=25&type=section&id=Human%20Resources%20and%20Foreign%20Exchange%20Risk) As of June 30, 2025, the Group's employee count was approximately **68,970**, an increase of about **11.7%** from year-end, with total employee benefit expenses growing by **15.6%** year-on-year to **$533 million**; the Group faces foreign exchange risk across multiple currencies and has adopted a prudent hedging policy, managing risk through forward foreign exchange contracts - As of June 30, 2025, the Group had approximately **68,970** employees, with total employee benefit expenses of **$533 million**[66](index=66&type=chunk) - The Group hedges foreign exchange risk by entering into forward foreign exchange contracts, with a notional principal amount of **$540 million** as of period-end[68](index=68&type=chunk) [Other Disclosures](index=26&type=section&id=Other%20Disclosures) [Audit and Governance](index=26&type=section&id=Audit%20and%20Governance) The unaudited interim financial information for the period has been reviewed by the Audit Committee and external auditor PricewaterhouseCoopers; the company complied with most provisions of the Corporate Governance Code, with the sole exception being the Chairman and Chief Executive Officer roles held by the same individual (Mr. Lu Songqing), which the Board believes contributes to strong and consistent leadership - The interim financial information has been reviewed by the Audit Committee and external auditor PricewaterhouseCoopers[69](index=69&type=chunk) - The company did not comply with Code Provision C.2.1 regarding the separation of Chairman and Chief Executive Officer roles, with Mr. Lu Songqing holding both positions; the Board believes this arrangement facilitates strong and consistent leadership[70](index=70&type=chunk) ```