Performance Summary [Financial Summary](index=1&type=section&id=财务摘要) The company experienced a significant decline in performance for FY2023, with revenue decreasing by 32.9% to approximately HKD 36.3 million and the annual loss widening by 317.9% to approximately HKD 36.2 million | Indicator | 2023 | 2022 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Revenue | Approx. HKD 36.3 million | Approx. HKD 54.2 million | -32.9% | | Gross Profit | Approx. HKD 20.3 million | Approx. HKD 31.1 million | -34.5% | | Gross Margin | Approx. 56.0% | Approx. 57.4% | -1.4pp | | Loss for the Year | Approx. HKD 36.2 million | Approx. HKD 8.7 million | +317.9% | | Loss Attributable to Equity Holders | Approx. HKD 35.9 million | Approx. HKD 8.9 million | +306.0% | - The Board of Directors resolved not to recommend any dividend for the year ended December 31, 2023[3](index=3&type=chunk) Consolidated Financial Statements [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=综合损益及其他全面收益表) For FY2023, the company's revenue decreased by 32.9% to HKD 36.33 million, with the annual loss significantly expanding to HKD 36.24 million due to reduced income, increased impairment losses, and a loss from de-consolidation of a subsidiary | Item | 2023 (HKD '000) | 2022 (HKD '000) | | :--- | :--- | :--- | | Revenue | 36,332 | 54,154 | | Gross Profit | 20,341 | 31,058 | | Impairment of Trade and Other Receivables | (6,162) | (30) | | Loss on De-consolidation of a Subsidiary | (3,777) | – | | Loss Before Income Tax | (36,238) | (8,672) | | **Loss for the Year** | **(36,238)** | **(8,672)** | | Item | 2023 | 2022 | | :--- | :--- | :--- | | Basic and Diluted Loss Per Share | (7.90 HK cents) | (1.98 HK cents) | [Consolidated Statement of Financial Position](index=4&type=section&id=综合财务状况表) As of the end of 2023, the company's total assets decreased from HKD 210 million to HKD 124 million, and net assets declined from HKD 196 million to HKD 114 million, primarily due to a significant reduction in cash and cash equivalents and a decrease in the fair value of equity instruments | Item | December 31, 2023 (HKD '000) | December 31, 2022 (HKD '000) | | :--- | :--- | :--- | | **Total Assets** | **124,298** | **209,528** | | Non-current Assets | 84,927 | 124,528 | | Current Assets | 39,371 | 85,000 | | **Total Liabilities** | **9,993** | **13,400** | | Current Liabilities | 8,694 | 12,867 | | Non-current Liabilities | 1,299 | 533 | | **Net Assets** | **114,305** | **196,128** | | **Total Equity** | **114,305** | **196,128** | Notes to the Financial Statements [Company Information and Significant Accounting Policies](index=6&type=section&id=2.%20编製基準及重大會計政策資料) The Group primarily engages in advertising services, healthcare product sales, e-commerce, and IP development design services, with a significant accounting event being the de-consolidation of subsidiary Kingkey Tianzi due to loss of control, resulting in a loss of approximately HKD 3.78 million - The Group's principal activities include: (i) provision of advertising services; (ii) sales of medical and healthcare products; (iii) e-commerce; and (iv) provision of intellectual property (IP) development and design services[10](index=10&type=chunk) - The Board decided to de-consolidate Kingkey Tianzi from July 1, 2023, due to the inability to obtain its books and records and the loss of effective control[12](index=12&type=chunk)[15](index=15&type=chunk) - The de-consolidation resulted in a net loss of approximately **HKD 3.78 million** and an impairment loss of approximately **HKD 3.59 million** on receivables from Kingkey Tianzi[16](index=16&type=chunk) [Segment Information](index=8&type=section&id=3.%20分部资料) In 2023, advertising services remained the primary revenue source at HKD 32.48 million, while sales of medical and healthcare products plummeted to HKD 0.37 million and e-commerce revenue decreased to HKD 2.90 million, with all segments reporting operating losses | Segment | 2023 Revenue (HKD '000) | 2022 Revenue (HKD '000) | 2023 Results (HKD '000) | 2022 Results (HKD '000) | | :--- | :--- | :--- | :--- | :--- | | Provision of Advertising Services | 32,483 | 33,143 | (595) | 556 | | Sales of Medical and Healthcare Products | 373 | 13,475 | (619) | 363 | | E-commerce | 2,900 | 7,536 | (2,004) | (944) | | Provision of IP Development Design Services | 576 | – | (6,859) | – | | **Total** | **36,332** | **54,154** | **(10,077)** | **(25)** | - Geographically, almost all revenue in 2023 (HKD 36.33 million) was derived from Hong Kong, compared to HKD 7.54 million from Mainland China in 2022[25](index=25&type=chunk) - No single customer contributed more than **10%** of the Group's total revenue in 2023[28](index=28&type=chunk) Extracts from Independent Auditor's Report [Disclaimer of Opinion](index=18&type=section&id=不发表意见) The independent auditor issued a "Disclaimer of Opinion" on the company's 2023 consolidated financial statements due to significant audit scope limitations, including issues with subsidiary de-consolidation, investment in an associate, and the validity of certain transactions - The auditor explicitly stated that due to the significance of the matters described in the "Basis for Disclaimer of Opinion" section, sufficient and appropriate audit evidence could not be obtained to form an audit opinion on the consolidated financial statements[45](index=45&type=chunk) - **De-consolidation of a subsidiary**: The auditor could not obtain the books and records of Kingkey Tianzi, preventing assessment of the appropriateness of the de-consolidation accounting treatment and the date of loss of control[46](index=46&type=chunk)[50](index=50&type=chunk) - **Scope limitation on interest in an associate**: The auditor could not obtain audited financial statements for the associate, Olori, making it impossible to determine the share of results or impairment, and raising doubts about its classification as an associate[53](index=53&type=chunk)[54](index=54&type=chunk) - **Scope limitation on revenue, costs, and impairment of receivables**: For certain significant transactions in the e-commerce and IP development design services segments, incomplete records prevented the auditor from obtaining sufficient evidence to confirm their authenticity, validity, and recoverability[56](index=56&type=chunk)[59](index=59&type=chunk)[61](index=61&type=chunk) - **Opening balances and related party transactions**: Due to the aforementioned limitations, the auditor could not confirm the accuracy of opening balances or ascertain whether all related party transactions were properly identified and disclosed[63](index=63&type=chunk)[65](index=65&type=chunk) Management Discussion and Analysis [Financial Review](index=24&type=section&id=财务回顾) In 2023, the Group's total revenue decreased by 32.9% to HKD 36.3 million, primarily due to a sharp decline in medical and healthcare product sales and e-commerce revenue, leading to a 317.9% increase in loss before income tax despite stable gross margin | Business Segment | 2023 (HKD million) | 2022 (HKD million) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Provision of Advertising Services | 32.5 | 33.1 | -2.0% | | Sales of Medical and Healthcare Products | 0.37 | 13.5 | -97.2% | | E-commerce | 2.9 | 7.5 | -61.5% | | IP Development Design Services | 0.58 | 0 | N/A | | **Total** | **36.3** | **54.2** | **-32.9%** | - Gross profit decreased by **34.5%** from HKD 31.1 million to HKD 20.3 million, with gross margin slightly declining from 57.4% to **56.0%**, remaining relatively stable[73](index=73&type=chunk)[74](index=74&type=chunk) - Key drivers of the increased loss include: - **Administrative expenses**: Increased by **15.4%** to HKD 34.8 million, mainly due to higher legal and professional fees[77](index=77&type=chunk) - **Impairment losses**: Surged from HKD 0.03 million to **HKD 6.2 million**[78](index=78&type=chunk) - **Loss on de-consolidation**: A loss of **HKD 3.8 million** was recorded[79](index=79&type=chunk) [Business Review and Outlook](index=27&type=section&id=业务回顾与展望) In 2023, the Group's core advertising business remained stable, but other segments faced severe disruption due to incomplete document handover from a former executive director, leading the Group to focus on consolidating its core advertising business and exploring expansion into Mainland China - **Advertising business**: As the core business, it remained largely unaffected by internal issues and continues to be the cornerstone of the Group's operations[85](index=85&type=chunk)[88](index=88&type=chunk) - **Disruption of other businesses**: The medical and healthcare products, e-commerce, and IP development design services segments were all disrupted due to the former director's failure to hand over complete document records, leading the Group to cease further development in these segments[86](index=86&type=chunk)[87](index=87&type=chunk)[88](index=88&type=chunk) - **Future outlook**: The Group will strengthen its core advertising business and actively explore strategic expansion opportunities in Mainland China, including leveraging digital platforms like Douyin and establishing its own factories to support promotional services and event management[89](index=89&type=chunk)[90](index=90&type=chunk)[91](index=91&type=chunk)[93](index=93&type=chunk) [Liquidity and Capital Management](index=30&type=section&id=流动资金及财政资源) As of the end of 2023, the Group's financial position weakened, with net current assets significantly decreasing to HKD 30.7 million and cash and bank balances falling to HKD 30 million, while all proceeds from the 2018 share placement have been fully utilized | Indicator | December 31, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Net Current Assets | HKD 30.7 million | HKD 72.1 million | | Cash and Bank Balances | HKD 30 million | HKD 69.9 million | | Current Ratio | 4.5 | 6.6 | - As of December 31, 2023, the Group had no bank loans or other borrowings[95](index=95&type=chunk) - The net proceeds of approximately **HKD 103 million** from the 2018 share placement were fully utilized as of December 31, 2023[98](index=98&type=chunk)[99](index=99&type=chunk) [Post-Reporting Period Events and Significant Events](index=32&type=section&id=报告期后事项) Subsequent to the reporting period, the company undertook restructuring and remedial actions, including the disposal of problematic subsidiaries and an associate, initiating litigation against a former director, and addressing a trading suspension by appointing a new auditor and commencing forensic and internal control reviews - **Asset disposal**: Subsequent to the reporting period, the company disposed of its entire interests in Beyond Noble (the holding company of Kingkey Tianzi), Smart Path (the holding company of Haotuo), and the associate Olori[103](index=103&type=chunk)[104](index=104&type=chunk) - **Significant litigation**: The company initiated legal proceedings against a former director for breach of fiduciary duties, while also facing a defamation lawsuit filed by the same former director[106](index=106&type=chunk)[109](index=109&type=chunk) - **Suspension of trading and resumption guidance**: The company's shares were suspended from trading effective April 2, 2024, and the Stock Exchange issued resumption guidance requiring a forensic investigation, demonstration of management integrity, internal control review, and publication of all financial results[116](index=116&type=chunk)[121](index=121&type=chunk) - **Remedial actions**: To meet the resumption guidance, the company appointed Tianjian International Certified Public Accountants as the new auditor and engaged independent third-party institutions to conduct a forensic investigation and an internal control review[119](index=119&type=chunk)[120](index=120&type=chunk)[122](index=122&type=chunk)

[Audit Issue Background and Overview](index=1&type=section&id=Audit%20Issue%20Background%20and%20Overview) The company's auditor issued a qualified opinion on its financial statements due to insufficient audit evidence for revenue and profit from Chinese entities [Auditor's Qualified Opinion](index=1&type=section&id=Auditor's%20Qualified%20Opinion) Dahua Ma Shi Yun, the auditor, issued a qualified opinion on the company's 2023 and 2024 annual reports due to insufficient audit evidence for Chinese entities' revenue and profit, raising doubts about current tax payables and income tax expenses - The auditor, Dahua Ma Shi Yun, issued a qualified opinion on the company's 2023 and 2024 annual financial reports due to insufficient audit evidence for revenue and profit from Chinese entities[2](index=2&type=chunk) Affected Financial Items by Qualified Opinion (RMB) | Item | Year Ended December 31, 2024 | Year Ended December 31, 2023 | | :--- | :--- | :--- | | Current Tax Payables | 11.3 Million | 13.3 Million | | Income Tax Expense | Zero | Zero | - This audit issue was initially raised by Dahua Ma Shi Yun in the company's report for the year ended December 31, 2021[5](index=5&type=chunk) [Company's Response and Progress](index=1&type=section&id=Company's%20Response%20and%20Progress) The company is implementing a phased action plan to resolve audit issues, primarily by divesting the last affected Chinese entity by the end of 2025 [Action Plan](index=1&type=section&id=Action%20Plan) The company is executing a phased action plan to resolve audit issues, with a core strategy to sell the last affected Chinese entity by the end of 2025 to reduce current tax payables to zero - The company plans to sell the last affected Chinese entity by **December 31, 2025**, to fully resolve current tax payables and income tax issues[3](index=3&type=chunk) - To facilitate the equity sale, the company established a new subsidiary in **December 2024** to take over the core business of the Chinese entity[3](index=3&type=chunk) - As of the announcement date, the company is in discussions with two potential investors regarding the sale of the Chinese entity[4](index=4&type=chunk) [Measures Taken and Progress](index=2&type=section&id=Measures%20Taken%20and%20Progress) The company has made significant progress in resolving audit issues through divestitures, tax settlements, and enhanced internal controls, substantially reducing current tax payables Trend of Decreasing Current Tax Payables (RMB) | Time Point | Amount | | :--- | :--- | | In 2021 Annual Report | Approximately 39.5 Million | | In 2024 Annual Report | 11.3 Million | | As of June 30, 2025 | Approximately 3.2 Million | | Target (End of 2025) | Zero | - Specific measures taken by the company include: - Selling two Chinese entities in **2024**, reducing tax by **RMB 1.1 million** - Settling supplementary tax payments of **RMB 7.3 million** as required by tax authorities - Selling another Chinese entity in **June 2025**, reducing tax by **RMB 1.7 million**[7](index=7&type=chunk) - The company has strengthened internal controls, established alternative roles for key financial positions, and maintains financial data in both electronic and paper forms to prevent data loss[7](index=7&type=chunk) [Root Cause of Audit Issues](index=2&type=section&id=Root%20Cause%20of%20Audit%20Issues) The audit issues stem from incomplete handover after a former finance staff's resignation and subsequent COVID-19 restrictions, preventing the provision of complete profit data for Chinese entities from 2015-2019 - The root cause is the inability to provide Dahua Ma Shi Yun with complete records and the full calculation logic for the profit data of the relevant Chinese entities from **2015 to 2019**[6](index=6&type=chunk) - Key reasons include incomplete handover after the resignation of financial personnel and restrictions due to COVID-19 prevention and control measures after Dahua Ma Shi Yun's appointment[6](index=6&type=chunk) - The company's attempts to contact former financial personnel and seek support from previous auditors were unsuccessful, thus preventing the provision of further supporting documents[8](index=8&type=chunk) [Audit Committee and New Auditor's Opinion](index=3&type=section&id=Audit%20Committee%20and%20New%20Auditor's%20Opinion) The company has appointed a new auditor, and both the Audit Committee and the new auditor believe the action plan to resolve audit issues is effective and will be completed by year-end 2025 [Auditor Change and Opinion](index=3&type=section&id=Auditor%20Change%20and%20Opinion) The company appointed Quan On (Hong Kong) CPA Limited as its new auditor, with both the Audit Committee and the new auditor affirming the effectiveness of the company's action plan to resolve audit issues - Dahua Ma Shi Yun has resigned, and Quan On (Hong Kong) CPA Limited ("Quan On") has been appointed as the new auditor, effective **June 18, 2025**[9](index=9&type=chunk) - Both the Audit Committee and the new auditor, Quan On, consider the company's action plan to be effective[9](index=9&type=chunk) - The company expects to reduce current tax payables to zero by **December 31, 2025**, based on the implementation of the action plan[9](index=9&type=chunk)

[Company Announcement and Forward-Looking Statements](index=1&type=section&id=Company%20Announcement%20and%20Forward-Looking%20Statements) BeiGene announced Q2 and H1 2025 unaudited financial results and updated full-year guidance, including forward-looking statements and risk disclosures [Announcement Overview](index=1&type=section&id=Announcement%20Overview) BeiGene, Ltd. announced unaudited condensed consolidated financial results and business updates for Q2 and H1 2025, updating its full-year 2025 financial guidance, prepared under U.S. GAAP - BeiGene announced unaudited Q2 and H1 2025 financial results and business updates, along with updated full-year financial guidance[1](index=1&type=chunk)[2](index=2&type=chunk) - Financial statements are prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP), differing from International Financial Reporting Standards (IFRS)[2](index=2&type=chunk) [Forward-Looking Statements and Risk Disclosures](index=2&type=section&id=Forward-Looking%20Statements%20and%20Risk%20Disclosures) This announcement contains forward-looking statements regarding R&D milestones, clinical development, global expansion, and future financial performance, with actual results potentially differing due to various risk factors - The report includes forward-looking statements concerning R&D milestones, clinical development, global expansion, future revenue, operating profit, cash flow, and gross margin[3](index=3&type=chunk) - Actual results may differ materially due to risks such as drug efficacy and safety, clinical outcomes, regulatory actions, commercialization capabilities, intellectual property protection, third-party reliance, and working capital[3](index=3&type=chunk) - The company advises shareholders and potential investors not to over-rely on Q2 results and 2025 financial guidance, and to exercise caution when trading company securities[4](index=4&type=chunk) [Q2 2025 Financial Results and Business Progress](index=3&type=section&id=Q2%202025%20Financial%20Results%20and%20Business%20Progress) BeiGene reported strong Q2 2025 financial results with significant revenue growth, improved profitability, and positive free cash flow, driven by core product performance and operational efficiency [CEO's Remarks and Performance Highlights](index=3&type=section&id=CEO's%20Remarks%20and%20Performance%20Highlights) CEO John Oyler highlighted the company's leadership in oncology and sustainable growth, particularly the strong performance of Brukinsa® and over 20 R&D milestones expected within 18 months - Co-founder, Chairman, and CEO John Oyler stated that the strong Q2 performance solidified the company's global leadership in oncology and demonstrated its capacity for sustainable, long-term growth[7](index=7&type=chunk) - Brukinsa® as a core product, set the benchmark for best-in-class BTK inhibitors, maintaining a leading position in the U.S. market[7](index=7&type=chunk) - Over **20 milestone advancements** are anticipated in the hematology and solid tumor pipelines within the next 18 months[7](index=7&type=chunk) 2025 Q2 Key Financial Data | Indicator | 2025 Q2 (Million USD) | YoY Growth Rate | | :--- | :--- | :--- | | Total Revenue | 1,300 | 42% | | Brukinsa® Global Revenue | 950 | 49% | | GAAP Diluted EPS | 0.84 | - | | Non-GAAP Diluted EPS | 2.25 | - | [Condensed Consolidated Financial Results](index=4&type=section&id=Condensed%20Consolidated%20Financial%20Results) BeiGene achieved total revenue of $1.315 billion in Q2 2025, a 42% year-over-year increase, with H1 total revenue of $2.433 billion, and GAAP operating and net income turning profitable 2025 Q2 and H1 Condensed Consolidated Financial Results (GAAP) | Indicator | 2025 Q2 (Thousand USD) | 2024 Q2 (Thousand USD) | Change (%) | 2025 H1 (Thousand USD) | 2024 H1 (Thousand USD) | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Net Product Revenue | 1,302,076 | 921,146 | 41% | 2,410,606 | 1,668,064 | 45% | | Collaboration Revenue | 13,224 | 8,020 | 65% | 21,973 | 12,754 | 72% | | Total Revenue | 1,315,300 | 929,166 | 42% | 2,432,579 | 1,680,818 | 45% | | GAAP Operating Income (Loss) | 87,885 | (107,161) | 182% | 98,987 | (368,509) | 127% | | GAAP Net Income (Loss) | 94,320 | (120,405) | 178% | 95,590 | (371,555) | 126% | | GAAP Diluted EPS | 0.84 | (1.15) | 173% | 0.85 | (3.56) | 124% | | Free Cash Flow | 219,772 | (205,538) | 207% | 207,447 | (670,688) | 131% | [Revenue Analysis](index=4&type=section&id=Revenue%20Analysis) Q2 2025 total revenue reached $1.3 billion, primarily driven by increased Brukinsa® sales in the U.S. and Europe, with product revenue also at $1.3 billion, and the U.S. contributing $685 million - Total revenue for Q2 2025 was **$1.3 billion**, a **42% year-over-year increase**, primarily driven by increased sales of Brukinsa® in the U.S. and Europe[9](index=9&type=chunk) - Product revenue was **$1.3 billion**, with the U.S. market contributing **$685 million**, a **43% year-over-year increase**[9](index=9&type=chunk) - Sales of Amgen-licensed products and Tislelizumab also contributed to product revenue growth[9](index=9&type=chunk) [Gross Margin](index=5&type=section&id=Gross%20Margin) Q2 2025 GAAP gross margin increased to 87.4%, mainly due to a higher proportion of Brukinsa® global sales and improved production efficiency for Brukinsa® and Tislelizumab - GAAP gross margin on global product revenue for Q2 2025 increased to **87.4%** from 85.0% in the prior year period[10](index=10&type=chunk) - The increase in gross margin is primarily attributed to a higher proportion of Brukinsa® in global sales and improved production efficiency for Brukinsa® and Tislelizumab[10](index=10&type=chunk) - Adjusted gross margin (excluding depreciation and amortization) increased to **88.1%** from 85.4% in the prior year period[10](index=10&type=chunk) [Operating Expenses](index=5&type=section&id=Operating%20Expenses) Total operating expenses for Q2 2025 increased by 18% year-over-year to $1.063 billion, with R&D expenses up 15% and SG&A expenses up 21%, driven by clinical program advancement and global commercialization 2025 Q2 Operating Expenses (GAAP) | Indicator | 2025 Q2 (Thousand USD) | 2024 Q2 (Thousand USD) | Change (%) | | :--- | :--- | :--- | | R&D Expenses | 524,896 | 454,466 | 15% | | SG&A Expenses | 537,913 | 443,729 | 21% | | Total Operating Expenses | 1,062,809 | 898,195 | 18% | - The increase in R&D expenses was primarily due to higher costs associated with advancing preclinical programs into clinical stages and early-stage clinical programs into later-stage development[13](index=13&type=chunk) - The increase in SG&A expenses was primarily due to the company's continued investment in global commercialization expansion, particularly in the U.S. and Europe[14](index=14&type=chunk) - In Q2 2025, SG&A expenses as a percentage of product revenue were **41%**, down from 48% in the prior year period, indicating improved operating leverage[14](index=14&type=chunk) [Core Product Sales Performance](index=5&type=section&id=Core%20Product%20Sales%20Performance) Brukinsa® demonstrated strong performance in the U.S. and European markets, with sales increasing by 43% and 85% year-over-year respectively, maintaining its lead in new patient market share among BTK inhibitors - Brukinsa® U.S. sales reached **$684 million**, a **43% year-over-year increase**, driven by strong demand growth across all approved indications[12](index=12&type=chunk) - Brukinsa® European sales reached **$150 million**, an **85% year-over-year increase**, primarily due to market share gains in all major European markets[12](index=12&type=chunk) - Brukinsa® continues to maintain a leading position in new patient market share among BTK inhibitor drugs[12](index=12&type=chunk) - Tislelizumab sales for Q2 2025 were **$194 million**, a **22% year-over-year increase**[12](index=12&type=chunk) [Net Income and Free Cash Flow](index=6&type=section&id=Net%20Income%20and%20Free%20Cash%20Flow) Q2 2025 GAAP net income was $94 million, a significant improvement from a loss in the prior year, driven by revenue growth and improved operating leverage, with free cash flow reaching $220 million - GAAP net income for Q2 2025 was **$94 million**, an increase of **$215 million** compared to a loss in the prior year period, primarily due to revenue growth and improved operating leverage[15](index=15&type=chunk) - Free cash flow was **$220 million**, an increase of **$425 million** compared to the prior year period[15](index=15&type=chunk) [Updated Full-Year 2025 Financial Guidance](index=7&type=section&id=Updated%20Full-Year%202025%20Financial%20Guidance) BeiGene updated its full-year 2025 revenue guidance to $5.0 billion to $5.3 billion, maintained operating expense guidance, and expects gross margin in the mid-to-high 80-90% range, with positive GAAP operating income and free cash flow 2025 Full-Year Financial Guidance Update | Indicator | Previous 2025 FY Guidance | Current 2025 FY Guidance | | :--- | :--- | :--- | | Total Revenue | $4.9 billion to $5.3 billion | $5.0 billion to $5.3 billion | | GAAP Operating Expenses | $4.1 billion to $4.4 billion | $4.1 billion to $4.4 billion | | GAAP Gross Margin % | Mid-80-90% range | Mid-to-High 80-90% range | | GAAP Operating Income | Positive for full year | Positive for full year | | Cash Flow | Positive cash flow from operations for full year | Positive free cash flow for full year | - Total revenue guidance was raised, benefiting from Brukinsa®'s leading position in the U.S. and continued expansion in Europe and other key global markets[17](index=17&type=chunk) - Gross margin is expected to be in the **mid-to-high 80-90% range**, attributed to improved product mix and enhanced production efficiency[17](index=17&type=chunk) - The company's GAAP operating expense guidance includes anticipated investments to support commercialization and research growth, aiming for sustained meaningful operating leverage[17](index=17&type=chunk) [Q2 Business Highlights](index=7&type=section&id=Q2%20Business%20Highlights) Key business highlights for Q2 include significant global regulatory and reimbursement progress for core products Brukinsa® and Tislelizumab, alongside advancements in multiple clinical-stage oncology and immunology programs [Core Commercial Product Progress](index=7&type=section&id=Core%20Commercial%20Product%20Progress) Brukinsa® received approvals in 75 markets, expanded reimbursement in 5, and gained FDA approval for a new film-coated tablet. Tislelizumab was approved in 47 markets, expanded reimbursement in 20, and received EU Commission and FDA approvals for new indications and dosing - Brukinsa® has been approved in **75 markets globally**, with new or expanded reimbursement in **5 markets** this quarter[18](index=18&type=chunk) - Brukinsa® received U.S. FDA approval for a new film-coated tablet formulation and a positive opinion from the European Medicines Agency's Committee for Medicinal Products for Human Use[18](index=18&type=chunk) - Tislelizumab has been approved in **47 markets globally**, with new or expanded reimbursement in **20 markets** this quarter, including Japan, Europe, and Australia[19](index=19&type=chunk) - Tislelizumab received European Commission approval for first-line treatment of metastatic or recurrent nasopharyngeal carcinoma and extensive-stage small cell lung cancer[19](index=19&type=chunk) - Tislelizumab received FDA approval for alternative dosing regimens of 150mg every two weeks and 300mg every four weeks for gastric cancer and esophageal squamous cell carcinoma[19](index=19&type=chunk) [Selected Clinical Stage Programs](index=8&type=section&id=Selected%20Clinical%20Stage%20Programs) The company made significant progress across multiple clinical programs, including hematology (Sonrotoclax, BGB-16673), lung cancer (Tarlatamab), GI cancer (Zanidatamab), and inflammation/immunology (BGB-45035, BGB-16673) [Hematology](index=8&type=section&id=Hematology) Sonrotoclax (BCL2 inhibitor) received priority review for its marketing application in China, with global Phase 3 trial enrollment initiated. BGB-16673 (BTK CDAC) received EU PRIME designation and initiated multiple Phase 3 and 2 trials - Sonrotoclax (BCL2 inhibitor) marketing applications for relapsed or refractory (R/R) chronic lymphocytic leukemia (CLL) and R/R mantle cell lymphoma (MCL) have been accepted in China and granted priority review[19](index=19&type=chunk) - The global Phase 3 trial of Sonrotoclax combined with an anti-CD20 antibody for R/R CLL has enrolled its first patient[19](index=19&type=chunk) - BGB-16673 (BTK CDAC) received Priority Medicines (PRIME) designation from the European Medicines Agency for the treatment of Waldenström's macroglobulinemia (WM) patients previously treated with a BTK inhibitor[19](index=19&type=chunk) - The global Phase 3 BGB-16673-302 trial and China Phase 3 BGB-16673-303 trial for BGB-16673 in R/R CLL have both enrolled their first patients[19](index=19&type=chunk)[20](index=20&type=chunk) - Patient enrollment has commenced for a potential registrational Phase 2 study of BGB-16673 for R/R WM[20](index=20&type=chunk) [Lung Cancer](index=9&type=section&id=Lung%20Cancer) Tarlatamab (AMG 757) marketing applications for third-line+ and second-line small cell lung cancer treatment in China have been accepted and granted priority review - The Biologics License Application (BLA) for Tarlatamab (AMG 757) for third-line and above treatment of small cell lung cancer has been accepted in China and granted priority review[20](index=20&type=chunk) - The BLA for Tarlatamab for second-line treatment of small cell lung cancer has been accepted in China[20](index=20&type=chunk) [Gastrointestinal Cancers](index=9&type=section&id=Gastrointestinal%20Cancers) Zanidatamab (HER2-targeted bispecific antibody) received regulatory approval in China for second-line treatment of HER2-high expressing biliary tract cancer and has been commercialized - Zanidatamab (Chinese trade name: Baihe'an®; HER2-targeted bispecific antibody) has received regulatory approval in China for second-line treatment of HER2-high expressing biliary tract cancer and has been commercialized[20](index=20&type=chunk) [Inflammation and Immunology](index=9&type=section&id=Inflammation%20and%20Immunology) Phase 1b trials for BGB-45035 (IRAK4 CDAC) in atopic dermatitis and prurigo nodularis, and BGB-16673 (BTK CDAC) in chronic spontaneous urticaria, have both enrolled their first patients - The Phase 1b trial for BGB-45035 (IRAK4 CDAC) in atopic dermatitis and prurigo nodularis has enrolled its first patient[21](index=21&type=chunk) - The Phase 1 trial for BGB-16673 (BTK CDAC) in chronic spontaneous urticaria has also enrolled its first patient[21](index=21&type=chunk) [Future Milestones](index=10&type=section&id=Future%20Milestones) BeiGene anticipates achieving key milestones across multiple products and therapeutic areas from H2 2025 to 2026, including Brukinsa® tablet approval, Tislelizumab subcutaneous formulation trial, Sonrotoclax data readout, and BGB-16673 head-to-head trial Expected Milestones (H2 2025 - 2026) | Product/Therapeutic Area | Expected Milestone | Expected Timeline | | :--- | :--- | :--- | | Brukinsa® | Marketing application for tablet formulation expected to receive European Commission approval | H2 2025 | | | Interim analysis of Phase 3 MANGROVE trial for first-line MCL expected to be completed | H2 2025 | | Tislelizumab | Marketing application for neoadjuvant and adjuvant treatment of early-stage NSCLC expected to receive European Commission approval | H2 2025 | | | Initiation of Phase 3 subcutaneous formulation trial expected | H2 2025 | | Hematology (Sonrotoclax) | Phase 2 data readout for R/R MCL expected, with potential for global accelerated approval submission | H2 2025 | | Hematology (BGB-16673) | Initiation of Phase 3 head-to-head trial against non-covalent BTK inhibitor pirtobrutinib for R/R CLL expected | H2 2025 | | Breast Cancer (BGB-43395) | Initiation of Phase 3 trial for second-line HR+/HER2- metastatic breast cancer expected | 2026 | | | Initiation of Phase 3 trial for first-line HR+/HER2- metastatic breast cancer expected | 2026 | | Lung Cancer (BGB-58067 & BG89894) | Completion of first patient enrollment for combination therapy trial expected | H2 2025 | | Gastrointestinal Cancers (Zanidatamab) | Primary progression-free survival data readout for Phase 3 trial in first-line HER2+ gastroesophageal adenocarcinoma, in collaboration with Zymeworks/Jazz, expected | H2 2025 | | Inflammation and Immunology (BGB-45035) | Completion of first patient enrollment for Phase 2 trial expected | H2 2025 | | | Potential proof-of-concept data for tissue IRAK4 degradation expected | H2 2025 | [Other Company Information](index=11&type=section&id=Other%20Company%20Information) The company announced its new English name BeOne Medicines Ltd. and domicile change to Switzerland, along with details for its Q2 2025 earnings conference call and general company overview [Company Name and Domicile Change](index=11&type=section&id=Company%20Name%20and%20Domicile%20Change) The company officially adopted its new English name, BeOne Medicines Ltd., and completed its domicile transfer from Cayman to Switzerland - The company officially adopted its new English name, **BeOne Medicines Ltd**[25](index=25&type=chunk) - Completed the transfer of its domicile from Cayman to Switzerland[25](index=25&type=chunk) [Conference Call and Webcast](index=11&type=section&id=Conference%20Call%20and%20Webcast) The company will host its Q2 2025 earnings conference call via webcast on Wednesday, August 6, 2025, at 8:00 AM ET (8:00 PM Beijing Time), accessible through its official website - The company will host its Q2 2025 earnings conference call via webcast on **Wednesday, August 6, 2025, at 8:00 AM ET** (8:00 PM Beijing Time)[26](index=26&type=chunk) - The webcast link is accessible through the investor page of BeiGene's official website (www.beonemedicines.com)[26](index=26&type=chunk) [About BeiGene](index=11&type=section&id=About%20BeiGene) BeiGene is a Switzerland-domiciled global oncology innovator focused on developing novel anti-cancer drugs for patients worldwide, boasting a rich portfolio, strong R&D, and a global team dedicated to enhancing drug accessibility and affordability - BeiGene is a Switzerland-domiciled global oncology innovation company dedicated to developing novel anti-cancer drugs for cancer patients worldwide[27](index=27&type=chunk) - The company possesses a rich product portfolio in hematology and solid tumors, coupled with strong in-house R&D capabilities and external strategic collaborations[27](index=27&type=chunk) - With a team of over **11,000 people** across six continents, the company is committed to comprehensively improving drug accessibility and affordability for more patients globally[27](index=27&type=chunk) [Investor and Media Contacts](index=12&type=section&id=Investor%20and%20Media%20Contacts) Provides contact information for investor relations and media inquiries Investor and Media Contacts | Investor Contact | Media Contact | | :--- | :--- | | Mi Zhou | Yiwei Yu | | +86 10 5895 8058 | +86 21 3159 1070 | | ir@beonemed.com | media@beonemed.com | [Notes to Financial Statements](index=13&type=section&id=Notes%20to%20Financial%20Statements) This section provides detailed U.S. GAAP condensed consolidated financial statements, including statements of operations, balance sheets, cash flows, and reconciliations of GAAP to non-GAAP financial measures [Condensed Consolidated Statements of Operations (U.S. GAAP)](index=13&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20(U.S.%20GAAP)) Presents condensed consolidated statements of operations for the three and six months ended June 30, 2025, detailing key financial metrics including revenue, cost of sales, gross profit, operating expenses, operating income, net income, and EPS Condensed Consolidated Statements of Operations (GAAP) - Three Months Ended June 30 | Indicator | 2025 (Thousand USD) | 2024 (Thousand USD) | | :--- | :--- | :--- | | Net Product Revenue | 1,302,076 | 921,146 | | Collaboration Revenue | 13,224 | 8,020 | | Total Revenue | 1,315,300 | 929,166 | | Cost of Sales - Product | 164,606 | 138,132 | | Gross Profit | 1,150,694 | 791,034 | | R&D Expenses | 524,896 | 454,466 | | SG&A Expenses | 537,913 | 443,729 | | Operating Income (Loss) | 87,885 | (107,161) | | Net Income (Loss) | 94,320 | (120,405) | | Diluted EPS (Loss) | 0.84 | (1.15) | Condensed Consolidated Statements of Operations (GAAP) - Six Months Ended June 30 | Indicator | 2025 (Thousand USD) | 2024 (Thousand USD) | | :--- | :--- | :--- | | Net Product Revenue | 2,410,606 | 1,668,064 | | Collaboration Revenue | 21,973 | 12,754 | | Total Revenue | 2,432,579 | 1,680,818 | | Cost of Sales - Product | 329,608 | 263,067 | | Gross Profit | 2,102,971 | 1,417,751 | | R&D Expenses | 1,006,783 | 915,104 | | SG&A Expenses | 997,201 | 871,156 | | Operating Income (Loss) | 98,987 | (368,509) | | Net Income (Loss) | 95,590 | (371,555) | | Diluted EPS (Loss) | 0.85 | (3.56) | [Condensed Consolidated Balance Sheet Summary Data (U.S. GAAP)](index=14&type=section&id=Condensed%20Consolidated%20Balance%20Sheet%20Summary%20Data%20(U.S.%20GAAP)) Provides a summary of condensed consolidated balance sheet data as of June 30, 2025, and December 31, 2024, showing key items such as cash, accounts receivable, inventory, property, plant, and equipment, total assets, liabilities, and shareholders' equity Condensed Consolidated Balance Sheet Summary Data (GAAP) | Indicator | 2025-06-30 (Thousand USD) | 2024-12-31 (Thousand USD) | | :--- | :--- | :--- | | Cash, Cash Equivalents & Restricted Cash | 2,786,086 | 2,638,747 | | Accounts Receivable, Net | 770,776 | 676,278 | | Inventory | 502,867 | 494,986 | | Property, Plant & Equipment, Net | 1,615,792 | 1,578,423 | | Total Assets | 6,298,394 | 5,920,910 | | Total Liabilities | 2,527,919 | 2,588,688 | | Total Shareholders' Equity | 3,770,475 | 3,332,222 | [Unaudited Condensed Consolidated Statements of Cash Flows Summary Data (U.S. GAAP)](index=15&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20Summary%20Data%20(U.S.%20GAAP)) Presents unaudited condensed consolidated statements of cash flows for the three and six months ended June 30, 2025, including net cash from operating, investing, and financing activities, and cash and cash equivalents at period-end Condensed Consolidated Statements of Cash Flows Summary Data (GAAP) - Three Months Ended June 30 | Indicator | 2025 (Thousand USD) | 2024 (Thousand USD) | | :--- | :--- | :--- | | Net Cash from Operating Activities | 263,598 | (95,588) | | Net Cash Used in Investing Activities | (66,605) | (111,032) | | Net Cash Provided by Financing Activities | 35,025 | 23,017 | | Cash, Cash Equivalents & Restricted Cash at Period End | 2,786,086 | 2,617,931 | Condensed Consolidated Statements of Cash Flows Summary Data (GAAP) - Six Months Ended June 30 | Indicator | 2025 (Thousand USD) | 2024 (Thousand USD) | | :--- | :--- | :--- | | Net Cash from Operating Activities | 307,680 | (404,160) | | Net Cash Used in Investing Activities | (188,546) | (320,863) | | Net Cash Provided by Financing Activities | 1,248 | 185,310 | | Cash, Cash Equivalents & Restricted Cash at Period End | 2,786,086 | 2,617,931 | [Explanation Regarding the Use of Non-GAAP Financial Measures](index=16&type=section&id=Explanation%20Regarding%20the%20Use%20of%20Non-GAAP%20Financial%20Measures) The company provides non-GAAP financial measures to offer a more comprehensive view of operating performance by excluding non-cash and special items, supplementing but not replacing GAAP metrics for investor understanding and comparison - The company provides non-GAAP financial measures, including adjusted operating expenses, operating loss, net income, and EPS, to offer additional information on its operating performance[37](index=37&type=chunk) - Non-GAAP measures adjust GAAP data by excluding non-cash items such as share-based compensation expense, depreciation, and amortization, as well as certain unusual or significant items[37](index=37&type=chunk) - These non-GAAP financial measures should be considered supplementary to, and not as a substitute for or superior to, financial measures prepared in accordance with U.S. GAAP[37](index=37&type=chunk) [Reconciliation of Selected GAAP to Non-GAAP Financial Measures](index=17&type=section&id=Reconciliation%20of%20Selected%20GAAP%20to%20Non-GAAP%20Financial%20Measures) This section provides detailed reconciliation tables between GAAP and non-GAAP financial measures, covering cost of sales, R&D, SG&A, operating expenses, operating income, net income, EPS, and free cash flow, to clearly illustrate specific adjustments and their impact GAAP to Adjusted Cost of Sales - Product Reconciliation | Indicator | 2025 Q2 (Thousand USD) | 2024 Q2 (Thousand USD) | | :--- | :--- | :--- | | GAAP Cost of Sales - Product | 164,606 | 138,132 | | Less: Depreciation | 3,321 | 2,684 | | Less: Amortization of Intangible Assets | 5,749 | 1,177 | | Adjusted Cost of Sales - Product | 154,643 | 134,271 | GAAP to Adjusted R&D Expenses Reconciliation | Indicator | 2025 Q2 (Thousand USD) | 2024 Q2 (Thousand USD) | | :--- | :--- | :--- | | GAAP R&D Expenses | 524,896 | 454,466 | | Less: Share-based Compensation Expense | 64,392 | 55,406 | | Less: Depreciation | 16,447 | 16,551 | | Adjusted R&D Expenses | 444,057 | 382,509 | GAAP to Adjusted Operating Income (Loss) Reconciliation | Indicator | 2025 Q2 (Thousand USD) | 2024 Q2 (Thousand USD) | | :--- | :--- | :--- | | GAAP Operating Income (Loss) | 87,885 | (107,161) | | Add: Share-based Compensation Expense | 150,553 | 130,694 | | Add: Depreciation | 29,854 | 23,754 | | Add: Amortization of Intangible Assets | 5,760 | 1,177 | | Adjusted Operating Income (Loss) | 274,945 | 48,464 | GAAP to Adjusted Diluted EPS (Loss) Reconciliation | Indicator | 2025 Q2 (USD) | 2024 Q2 (USD) | | :--- | :--- | :--- | | GAAP Diluted EPS (Loss) | 0.84 | (1.13) | | Add: Share-based Compensation Expense | 1.34 | 1.23 | | Add: Depreciation | 0.27 | 0.22 | | Add: Amortization of Intangible Assets | 0.05 | 0.01 | | Adjusted Diluted EPS (Loss) | 2.25 | 0.22 | Free Cash Flow (Non-GAAP) Reconciliation | Indicator | 2025 Q2 (Thousand USD) | 2024 Q2 (Thousand USD) | | :--- | :--- | :--- | | Net Cash from Operating Activities (GAAP) | 263,598 | (95,588) | | Less: Purchases of Property, Plant & Equipment | (43,826) | (109,950) | | Free Cash Flow (Non-GAAP) | 219,772 | (205,538) |

[Supplemental Announcement Regarding the 2024 Annual Report](index=1&type=section&id=%E6%9C%89%E9%97%9C2024%E5%B9%B4%E5%A0%B1%E7%9A%84%E8%A3%9C%E5%85%85%E5%85%AC%E5%91%8A) This supplemental announcement provides additional details on the 2021 Share Option Scheme for the 2024 Annual Report, maintaining all other previously disclosed information [Announcement Overview](index=1&type=section&id=Announcement%20Overview) This announcement supplements Future Development Holdings Limited's 2024 Annual Report by providing additional information on the 2021 Share Option Scheme as required by listing rules - This announcement aims to supplement the 2024 Annual Report published on April 24, 2025[3](index=3&type=chunk) - The supplementary information provides additional details regarding the 2021 Share Option Scheme, as required by Listing Rule 17.07(2)[3](index=3&type=chunk) - All other information in the 2024 Annual Report remains unchanged, except for the disclosed supplementary details[3](index=3&type=chunk) [2021 Share Option Scheme Details](index=1&type=section&id=2021%20Share%20Option%20Scheme%20Details) This section details the number of share options available for grant under the 2021 Share Option Scheme, which remained constant throughout 2024 Number of Share Options Available for Grant under 2021 Share Option Scheme | Date | Number of Share Options Available for Grant (Options) | | :--- | :--- | | January 1, 2024 | 191,212,300 | | December 31, 2024 | 191,212,300 | [Board of Directors Information](index=1&type=section&id=Board%20of%20Directors%20Information) This section outlines the composition of the company's Board of Directors as of the announcement date, including executive, non-executive, and independent non-executive directors - As of August 6, 2025, the company's Board of Directors comprises the following members: * **Executive Directors**: Mr. Lau Ka Ho (Chief Executive Officer), Mr. Chan Hoi Tik * **Non-Executive Director**: Mr. Shi Rong Xin * **Independent Non-Executive Directors**: Ms. Chan Sze Man, Ms. Bu Ya Nan, Mr. Wong Sai Hung[4](index=4&type=chunk)[5](index=5&type=chunk)

（於百慕達註冊成立之有限公司） 股份代號：626 卓越表現 是我們的承諾 互相關顧 追求卓越 彼此信賴 維護道德及 提倡廉正 嚴守紀律 審慎而行 (Incorporated in Bermuda with limited liability) Stock Code: 626 2025 Interim Report CARING EXCELLENCE TRUST ETHICS & INTEGRITY DISCIPLINE PRUDENCE EXCELLENCE is our Commitment 2025 中期報告 PUBLIC FINANCIAL HOLDINGS LIMITED 大眾金融控股有限公司 INTERIM REPORT 2025 中期報告 大眾金融控股有限公司 中期報告2025 目錄 2 公司資料 3 簡明綜合收益表 4 簡明綜合全面收益表 5 五年財務摘要 6 簡明綜合財務狀況表 8 簡明綜合權益變動表 9 簡明綜合現金流量表 11 中期財務報表附註 70 管理層討論及分析 75 其他資料 中期報告2025 公司資料 董事會 非執行主席 賴雲 執行董事 鍾炎強 非執行董事 拿督鄭國謙 柯寶傑 L ...

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其準確性或 完整性亦不發表任何聲明，並明確表示，概不就因本公告全部或任何部分內容而產生或因依賴該 等內容而引致的任何損失承擔任何責任。 （於開曼群島註冊成立之有限公司） （股份代號：220） 2025年中期業績公告 統一企業中國控股有限公司（「本公司」）董事（「董事」）會（「董事會」）欣然提呈本公司及其附屬公 司（合稱「本集團」或「我們」）截至2025年6月30日止6個月（「回顧期」）未經審核中期簡明綜合財務資 料。該中期簡明綜合財務資料未經審核，但已由董事會之審核委員會（「審核委員會」）及本公司獨 立核數師羅兵咸永道會計師事務所按照香港會計師公會頒布之香港審閱準則第2410號「由實體的 獨立核數師執行中期財務資料審閱」進行審閱。 1 • 收益為人民幣17,086.6百萬元，上升10.6% • 本集團毛利率為34.3%，上升0.5個百分點 • 未計利息、稅項、折舊及攤銷前盈利為人民幣2,329.7百萬元，上升23.0% • 本公司權益持有人期間應佔溢利為人民幣1,286.7百萬元，上升33.2% 經濟環境分析 2025年上半年中華人民共 ...

[Announcement Overview](index=1&type=section&id=I.%20Announcement%20Overview) This section provides a high-level summary of Cathay Group's business, financial performance, and fleet information [Company and Business Scope](index=2&type=section&id=1.1%20Company%20and%20Business%20Scope) Cathay Pacific Airways Limited and its subsidiaries (Cathay Group) primarily offer products and services across four business areas: Cathay Pacific, Cathay Cargo, Lifestyle Business, and HK Express - Cathay Group's four core businesses include Cathay Pacific (passenger), Cathay Cargo, Lifestyle Business, and HK Express (low-cost airline)[3](index=3&type=chunk) [Financial and Operating Summary](index=2&type=section&id=1.2%20Financial%20and%20Operating%20Summary) Cathay Group achieved HKD 54.309 billion in revenue for H1 2025, a 9.5% YoY increase, with profit attributable to shareholders of HKD 3.651 billion, up 1.1% YoY Cathay Group H1 2025 Key Financial and Operating Statistics | Indicator | H1 2025 (HKD million/unit) | H1 2024 (HKD million/unit) | Change | | :--- | :--- | :--- | :--- | | **Financial Statistics** | | | | | Revenue | 54,309 | 49,604 | +9.5% | | Profit attributable to Cathay Group shareholders | 3,651 | 3,613 | +1.1% | | Basic earnings per ordinary share (HK cents) | 56.7 | 52.4 | +8.2% | | Diluted earnings per ordinary share (HK cents) | 54.8 | 47.0 | +16.6% | | Dividend per ordinary share (HK cents) | 20 | 20 | - | | Profit margin (%) | 6.7 | 7.3 | -0.6 percentage points | | Net borrowings | 56,342 | 57,941 | -2.8% | | Available unrestricted liquidity | 21,504 | 19,073 | +12.7% | | **Operating Statistics (Company)** | | | | | Available tonne kilometers (million) | 13,699 | 11,822 | +15.9% | | Revenue tonne kilometers (million) | 9,701 | 8,214 | +18.1% | | Cost per available tonne kilometer (incl. fuel) (HKD) | 3.28 | 3.42 | -4.1% | | Aircraft utilization (daily hours) | 10.8 | 9.0 | +20.0% | | Average fleet age (years) | 12.3 | 11.5 | +0.8 years | | **Operating Statistics (Cathay Pacific)** | | | | | Available seat kilometers (million) | 66,792 | 52,881 | +26.3% | | Revenue passenger kilometers (million) | 56,651 | 43,583 | +30.0% | | Passenger load factor (%) | 84.8 | 82.4 | +2.4 percentage points | | Passenger yield (HK cents) | 60.4 | 68.9 | -12.3% | | **Operating Statistics (Cathay Cargo)** | | | | | Available cargo tonne kilometers (million) | 7,336 | 6,788 | +8.1% | | Cargo revenue tonne kilometers (million) | 4,302 | 4,063 | +5.9% | | Cargo load factor (%) | 58.6 | 59.9 | -1.3 percentage points | | Cargo yield (HKD) | 2.59 | 2.68 | -3.4% | | **Operating Statistics (HK Express)** | | | | | Available seat kilometers (million) | 8,810 | 6,370 | +38.3% | | Revenue passenger kilometers (million) | 6,947 | 5,415 | +28.3% | | Passenger load factor (%) | 78.9 | 85.0 | -6.1 percentage points | | Passenger yield (HK cents) | 43.2 | 55.1 | -21.6% | [Fleet Information](index=3&type=section&id=1.3%20Fleet%20Information) As of June 30, 2025, Cathay Group's total fleet comprised 234 aircraft with an average age of 11.5 years, with 93 aircraft on order, indicating continuous investment in future expansion Cathay Group Fleet Overview (as of June 30, 2025) | Aircraft Type | Total (units) | Average Age (years) | On Order (units) | | :--- | :--- | :--- | :--- | | **Company (Passenger)** | 179 | 12.3 | 71 | | A321/A320-200neo | 16 | 2.6 | 14 | | A330-300 | 43 | 16.8 | 0 | | A330-900 | 0 | - | 30 | | A350-900 | 30 | 7.2 | 0 | | A350-1000 | 18 | 5.6 | 0 | | 777-300 | 17 | 23.2 | 0 | | 777-300ER | 35 | 12.7 | 0 | | 777-9 | 0 | - | 21 | | **Company (Cargo)** | 20 | 14.0 | 6 | | A350F Freighter | 0 | - | 6 | | 747-400ERF Freighter | 6 | 16.5 | 0 | | 747-8F Freighter | 14 | 12.4 | 0 | | **HK Express** | 41 | 7.6 | 22 | | **Air Hong Kong** | 14 | 13.1 | 0 | | **Total** | 234 | 11.5 | 93 | - The Group holds rights to acquire an additional **103 aircraft** and possesses sufficient financing capacity to support fleet investments[7](index=7&type=chunk) [Chairman's Letter and Group Performance](index=4&type=section&id=II.%20Chairman's%20Letter%20and%20Group%20Performance) This section covers the Chairman's message, overall group performance, and details on bond repurchases and liquidity [Chairman's Letter](index=4&type=section&id=2.1%20Chairman's%20Letter) The Chairman expressed satisfaction with Cathay Group's robust financial performance and achievements amidst uncertainties, highlighting the Group's solid foundation, network expansion, and enhanced customer experience - Cathay Pacific and HK Express have launched or announced **19 new routes**, with passenger flights to over **100 destinations worldwide**, and all aircraft are fully resourced and operational[8](index=8&type=chunk) - Cathay Pacific was ranked among the **top three best airlines globally by Skytrax**, also winning "World's Best Economy Class" and "World's Best Inflight Entertainment"; Cathay Cargo was named "Cargo Operator of the Year" by Air Transport World; HK Express was listed among the **top five "World's Best Low-Cost Airlines" by Airline Ratings**[8](index=8&type=chunk) [Cathay Group Overall Performance](index=4&type=section&id=2.2%20Cathay%20Group%20Overall%20Performance) Cathay Group reported a profit attributable to shareholders of HKD 3.651 billion for H1 2025, a 1.1% YoY increase, driven by increased passenger volume, stable cargo operations, and lower fuel prices Cathay Group H1 2025 Profit Attributable to Shareholders | Indicator | H1 2025 (HKD million) | H1 2024 (HKD million) | Change | | :--- | :--- | :--- | :--- | | Profit attributable to Cathay Group shareholders | 3,651 | 3,613 | +1.1% | | Earnings per ordinary share (HK cents) | 56.7 | 52.4 | +8.2% | | Share of results of associates (loss) | (181) | (342) | -47.1% | - The Group declared a **first interim dividend of HKD 20 cents per ordinary share**, totaling **HKD 1.288 billion**[9](index=9&type=chunk) [Bond Repurchase and Liquidity](index=4&type=section&id=2.3%20Bond%20Repurchase%20and%20Liquidity) The Group repurchased approximately 68% of its 2026 convertible bonds in early 2025, demonstrating confidence in long-term business prospects, with available unrestricted liquidity of HKD 21.504 billion as of June 30, 2025 - Approximately **68% (HKD 4.558 billion)** of the 2026 secured convertible bonds were repurchased in early January 2025, with an outstanding principal of **HKD 2.164 billion**[10](index=10&type=chunk) Cathay Group Liquidity Position | Indicator | June 30, 2025 (HKD million) | December 31, 2024 (HKD million) | Change | | :--- | :--- | :--- | :--- | | Available unrestricted liquidity | 21,504 | 19,073 | +12.7% | [Performance of Four Core Businesses](index=4&type=section&id=III.%20Performance%20of%20Four%20Core%20Businesses) This section details the performance of Cathay Pacific Passenger, Cathay Cargo, Lifestyle Business, and HK Express [Cathay Pacific Passenger](index=4&type=section&id=3.1%20Cathay%20Pacific%20Passenger) Cathay Pacific Passenger revenue grew 14.0% to HKD 34.208 billion in H1 2025, with passenger volume up 30.0% and load factor increasing to 84.8%, despite a 12.3% decline in yield due to increased market capacity Cathay Pacific Passenger H1 2025 Key Data | Indicator | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Passenger revenue | HKD 34.208 billion | HKD 30.017 billion | +14.0% | | Available seat kilometers (million) | 66,792 | 52,881 | +26.3% | | Revenue passenger kilometers (million) | 56,651 | 43,583 | +30.0% | | Passengers carried (thousand) | 13,627 | 10,660 | +27.8% | | Load factor (%) | 84.8 | 82.4 | +2.4 percentage points | | Yield (HK cents) | 60.4 | 68.9 | -12.3% | [Regional Market Performance](index=6&type=section&id=3.1.1%20Regional%20Market%20Performance) Cathay Pacific increased capacity and flights across all major regional markets, with significant growth in the Americas, South Asia, Middle East, and Africa, improving overall load factor despite yield declines due to market competition Cathay Pacific Passenger Regional Performance (H1 2025) | Region | Capacity Change (%) | Load Factor Change (percentage points) | Yield Change (%) | | :--- | :--- | :--- | :--- | | Americas | +35.6% | -0.9 | -17.5% | | Southeast Asia & Oceania | +20.9% | +5.3 | -10.7% | | North Asia | +17.6% | +3.2 | -14.3% | | Europe | +24.5% | - | -1.5% | | South Asia, Middle East & Africa | +41.3% | +5.7 | -9.0% | | Overall | +26.3% | +2.4 | -12.3% | - Launched **Urumqi route**, increased summer flights to major mainland China cities, and introduced code-share shuttle buses to enhance Greater Bay Area connectivity[21](index=21&type=chunk)[22](index=22&type=chunk) - Commenced **direct flights to Dallas Fort Worth International Airport**, with plans to increase to daily service by October 2025[22](index=22&type=chunk) - Resumed **seasonal service to Rome** and launched **first direct passenger flights to Munich**[25](index=25&type=chunk) [Cathay Cargo](index=4&type=section&id=3.2%20Cathay%20Cargo) Cathay Cargo revenue grew 2.2% to HKD 11.141 billion in H1 2025, with cargo volume up 5.9% and total tonnage carried increasing by 11.4%, demonstrating adaptability in reallocating capacity across its global network despite slight declines in load factor and yield Cathay Cargo H1 2025 Key Data | Indicator | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Cargo revenue | HKD 11.141 billion | HKD 10.902 billion | +2.2% | | Available cargo tonne kilometers (million) | 7,336 | 6,788 | +8.1% | | Cargo revenue tonne kilometers (million) | 4,302 | 4,063 | +5.9% | | Cargo carried (thousand tonnes) | 801 | 719 | +11.4% | | Cargo load factor (%) | 58.6 | 59.9 | -1.3 percentage points | | Cargo yield (HKD) | 2.59 | 2.68 | -3.4% | - Cathay Cargo, as the largest cargo operator at Hong Kong International Airport, contributed to HKIA being ranked the **world's busiest air cargo airport for the 14th time**[25](index=25&type=chunk) [Regional Market Performance](index=7&type=section&id=3.2.1%20Regional%20Market%20Performance) Cargo operations faced uncertainties like tariff changes across regions but successfully adapted to demand shifts by flexibly reallocating capacity, particularly in the Americas and Southeast Asia, with high-tech electronics, fresh goods, and pharmaceuticals driving growth - US tariff increases and the elimination of de minimis exemptions negatively impacted cargo demand, but demand rebounded after temporary tariff reductions, with increased cargo volumes offsetting e-commerce decline[25](index=25&type=chunk) - Increased trans-Pacific cargo flights to meet peak season demand, with strong demand for "Valuable Cargo" and "Special Cargo" from the Americas to Asia[25](index=25&type=chunk) - Southeast Asia performed strongly driven by demand to the Americas, with good performance in high-tech electronics, apparel, general cargo, and fresh goods[25](index=25&type=chunk) - Strong demand for general cargo in mainland China, significant growth in high-tech electronics to India and Southwest Pacific markets, and robust growth in mail and pharmaceutical shipments[29](index=29&type=chunk) - European routes saw increased general cargo export tonnage, continued growth in pharmaceutical and fresh cargo solutions, and successful transport of Terracotta Warriors and artifacts to Perth for exhibition[25](index=25&type=chunk)[29](index=29&type=chunk) [Lifestyle Business](index=8&type=section&id=3.3%20Lifestyle%20Business) The Lifestyle Business continues to grow with an increasing number of active Cathay members, and will further expand payment, insurance, lifestyle partnerships, Cathay Holidays, and Cathay Dining to build customer engagement beyond travel - The Lifestyle Business aims to build deep customer relationships and foster loyalty through Asia Miles and sales of new products like hotels, retail, experiences, and insurance[28](index=28&type=chunk) [HK Express](index=5&type=section&id=3.4%20HK%20Express) HK Express reported a loss before net finance costs and tax of HKD 524 million in H1 2025, compared to a profit of HKD 66 million in the prior year, with load factor and yield declining due to earthquake rumors affecting Japan travel and new routes requiring time to mature, despite significant growth in passenger volume and available seat kilometers HK Express H1 2025 Key Data | Indicator | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Passenger revenue | HKD 3.004 billion | HKD 3.004 billion | Similar | | Available seat kilometers (million) | 8,810 | 6,370 | +38.3% | | Revenue passenger kilometers (million) | 6,947 | 5,415 | +28.3% | | Passengers carried (thousand) | 3,791 | 2,839 | +33.5% | | Load factor (%) | 78.9 | 85.0 | -6.1 percentage points | | Yield (HK cents) | 43.2 | 55.1 | -21.6% | | Profit/(Loss) before net finance costs and tax | (HKD 524 million) | HKD 66 million | Turnaround from profit to loss | - The loss was primarily due to travelers temporarily avoiding popular destinations like Japan due to earthquake rumors, and new routes requiring time to mature[14](index=14&type=chunk) [Financial Review](index=9&type=section&id=IV.%20Financial%20Review) This section provides a detailed analysis of Cathay Group's revenue, operating expenses, operating results, fuel costs, and financial position [Revenue Analysis](index=9&type=section&id=4.1%20Revenue%20Analysis) Cathay Group's total revenue reached HKD 54.309 billion in H1 2025, a 9.5% YoY increase, with passenger services revenue up 12.7%, cargo services revenue up 1.2%, and other services and recoveries revenue up 8.7% Cathay Group H1 2025 Revenue Composition | Revenue Category | H1 2025 (HKD million) | H1 2024 (HKD million) | Change | | :--- | :--- | :--- | :--- | | Passenger services | 37,212 | 33,004 | +12.7% | | Cargo services | 12,761 | 12,610 | +1.2% | | Other services and recoveries | 4,336 | 3,990 | +8.7% | | **Total Revenue** | **54,309** | **49,604** | **+9.5%** | - Cathay Pacific passenger revenue increased by **14.0%**, with available seat kilometers increasing by **26.3%**; Cathay Cargo revenue increased by **2.2%**, with available cargo tonne kilometers increasing by **8.1%**[30](index=30&type=chunk) [Operating Expenses Analysis](index=9&type=section&id=4.2%20Operating%20Expenses%20Analysis) Cathay Group's total operating expenses for H1 2025 were HKD 48.383 billion, a 10.7% YoY increase, with significant growth in staff costs, in-flight services and passenger expenses, landing, parking, and en-route charges, and a rise in net fuel costs Cathay Group H1 2025 Operating Expenses Composition | Expense Category | H1 2025 (HKD million) | H1 2024 (HKD million) | Change | | :--- | :--- | :--- | :--- | | Staff | 9,382 | 7,770 | +20.7% | | In-flight services and passenger expenses | 2,583 | 1,957 | +32.0% | | Landing, parking and en-route charges | 8,076 | 6,572 | +22.9% | | Fuel (incl. hedging loss/(gain)) | 14,654 | 14,160 | +3.5% | | Aircraft maintenance | 4,295 | 4,047 | +6.1% | | Aircraft depreciation and rentals | 4,589 | 4,929 | -6.9% | | Other depreciation, amortisation and rentals | 1,401 | 1,256 | +11.5% | | Other | 3,403 | 3,006 | +13.2% | | **Total Operating Expenses** | **48,383** | **43,697** | **+10.7%** | - The company's cost per available tonne kilometer (including fuel) decreased by **4.1% to HKD 3.28**, and cost per available tonne kilometer (excluding fuel) decreased by **0.9% to HKD 2.30**[31](index=31&type=chunk)[32](index=32&type=chunk) [Operating Results Analysis](index=10&type=section&id=4.3%20Operating%20Results%20Analysis) The company's profit before non-recurring items and tax increased by 8.8% to HKD 4.776 billion, driven by higher passenger and cargo volumes, partially offset by declining yields, while costs rose due to increased capacity, headcount, and flight hours Company Profit Before Non-Recurring Items and Tax Change Analysis | Item | HKD million | | :--- | :--- | | 2024 Company interim profit before non-recurring items and tax | 4,391 | | **Increase in Revenue** | | | - Passenger and cargo revenue | 4,430 | | - Other services and recoveries | 504 | | **Increase in Costs** | | | - Staff | (1,232) | | - In-flight services and passenger expenses | (614) | | - Landing, parking and en-route charges | (1,302) | | - Fuel (incl. hedging loss/(gain)) | (452) | | - Aircraft maintenance | (169) | | - Asset ownership (incl. aircraft and other depreciation, rentals and net finance costs) | (39) | | - Other | (741) | | **2025 Company interim profit before non-recurring items and tax** | **4,776** | - Group basic profit attributable to shareholders (excluding non-recurring items) increased by **4.2% to HKD 3.651 billion**[33](index=33&type=chunk) [Fuel Expenses and Hedging](index=11&type=section&id=4.4%20Fuel%20Expenses%20and%20Hedging) The Group's net fuel cost for H1 2025 was HKD 14.654 billion, a 3.5% YoY increase, primarily due to a 19.0% increase in fuel consumption, partially offset by a 14.3% decrease in average aircraft fuel prices Cathay Group H1 2025 Fuel Cost Breakdown | Indicator | H1 2025 (HKD million) | H1 2024 (HKD million) | | :--- | :--- | :--- | | Total fuel cost | 14,436 | 14,221 | | Fuel hedging loss/(gain) | 218 | (61) | | **Net Fuel Cost** | **14,654** | **14,160** | - Fuel consumption increased by **19.0%**, while average aircraft fuel prices decreased by **14.3%**[36](index=36&type=chunk) [Financial Position](index=11&type=section&id=4.5%20Financial%20Position) As of June 30, 2025, the Group's net borrowings decreased by 2.8% to HKD 56.342 billion, and available unrestricted liquidity increased by 12.7% to HKD 21.504 billion, while equity attributable to Cathay Group shareholders slightly decreased by 1.6% due to dividend payments and lower other comprehensive income Cathay Group H1 2025 Financial Position Overview | Indicator | June 30, 2025 (HKD million) | December 31, 2024 (HKD million) | Change | | :--- | :--- | :--- | :--- | | Additions to property, plant and equipment | 3,759 | - | - | | Total borrowings | 65,254 | 68,475 | -4.7% | | Net borrowings | 56,342 | 57,941 | -2.8% | | Available unrestricted liquidity | 21,504 | 19,073 | +12.7% | | Equity attributable to Cathay Group shareholders | 51,654 | 52,500 | -1.6% | | Net debt to equity ratio (excluding leases without asset transfer elements) | 0.87x | 0.90x | -0.03x | | Net debt to equity ratio (incl. HKFRS 16 impact) | 1.09x | 1.10x | -0.01x | - Borrowings are primarily denominated in **USD and HKD**, with **40% at fixed interest rates**[37](index=37&type=chunk) [Review of Subsidiary and Associate Performance](index=5&type=section&id=V.%20Review%20of%20Subsidiary%20and%20Associate%20Performance) This section reviews the financial performance of the Group's key subsidiaries and associates [Performance of Key Subsidiaries](index=5&type=section&id=5.1%20Performance%20of%20Key%20Subsidiaries) Air Hong Kong reported a solid profit before net finance costs and tax of HKD 474 million in H1 2025, while other subsidiaries like Cathay Pacific Catering Services, Cathay Pacific Services, Hong Kong Airport Services, and Vogue Laundry all showed improved results Key Subsidiaries H1 2025 Performance | Company | H1 2025 Profit/(Loss) before net finance costs and tax (HKD million) | H1 2024 Profit/(Loss) before net finance costs and tax (HKD million) | | :--- | :--- | :--- | | HK Express | (524) | 66 | | Air Hong Kong | 474 | 488 | | Cathay Pacific Catering Services (Hong Kong) Limited and overseas catering facilities | Improved | - | | Cathay Pacific Services Limited | Improved | - | | Hong Kong Airport Services Limited | Improved | - | | Vogue Laundry Limited | Improved | - | [Performance of Associates](index=5&type=section&id=5.2%20Performance%20of%20Associates) The share of losses from associates improved YoY, primarily due to Air China's enhanced revenue management and cost control, and Air China Cargo's business expansion, with results for both calculated based on financial statements delayed by three months Associates H1 2025 Share of Losses | Indicator | H1 2025 (HKD million) | H1 2024 (HKD million) | Change | | :--- | :--- | :--- | :--- | | Share of losses from associates | (181) | (342) | -47.1% | - Air China's financial performance improved YoY, and Air China Cargo also expanded its business[15](index=15&type=chunk)[38](index=38&type=chunk) [Outlook and Sustainability](index=5&type=section&id=VI.%20Outlook%20and%20Sustainability) This section outlines Cathay Group's future prospects and its commitment to sustainable development initiatives [Outlook](index=5&type=section&id=6.1%20Outlook) Cathay Group is confident in Hong Kong's international aviation hub, investing over HKD 100 billion in fleet, cabins, lounge products, and digital innovation, with Cathay Pacific continuing to increase flights and destinations, Cathay Cargo remaining vigilant to market uncertainties, and HK Express facing short-term challenges but expected to be profitable long-term - The Group will invest over **HKD 100 billion** in fleet, cabin and lounge products, and digital innovation to solidify Hong Kong's international aviation hub status[16](index=16&type=chunk) - Cathay Pacific will continue to **increase flights and destinations** and introduce more enhanced customer experiences[16](index=16&type=chunk) - Cathay Cargo will remain vigilant and flexible in responding to market uncertainties, while enhancing special cargo solutions, digital capabilities, and leadership in sustainability[16](index=16&type=chunk) - HK Express faces short-term challenges, with Japan ticket bookings not yet returning to normal levels, but is expected to be profitable in the long term through continued development, efficiency improvements, and consolidation of its foundation[16](index=16&type=chunk) [Leading in Sustainability](index=13&type=section&id=6.2%20Leading%20in%20Sustainability) Cathay Group has made progress in sustainability, including a sustainable aviation fuel agreement with Sinopec, inspiring youth through the "I Can Fly" program, sponsoring UNICEF activities, and partnering with Foodlink Foundation for food donation - Signed an agreement with China Petrochemical Corporation (Sinopec) to uplift domestically produced **Sustainable Aviation Fuel (SAF)** at Hong Kong International Airport[39](index=39&type=chunk) - Helped approximately **2,000 young people** pursue their dreams through the "I Can Fly" program and sponsored UNICEF activities supporting children's emotional well-being and protection[39](index=39&type=chunk) - Partnered with Foodlink Foundation for over ten years, collecting **2,250 tonnes of unopened packaged food** through the "Food Donation Program" for vulnerable communities, benefiting **260,000 people**[39](index=39&type=chunk) - Became the **exclusive travel partner for the new Kai Tak Sports Park**, supporting Hong Kong's sports, arts, and cultural development[39](index=39&type=chunk) - As of June 30, 2025, the Group employed over **32,200 staff globally**, with approximately **27,300 in Hong Kong**[39](index=39&type=chunk) [Consolidated Financial Statements](index=14&type=section&id=VII.%20Consolidated%20Financial%20Statements) This section presents the consolidated income statement, statement of comprehensive income, statement of financial position, and statement of cash flows for Cathay Group [Consolidated Income Statement](index=14&type=section&id=7.1%20Consolidated%20Income%20Statement) Cathay Group reported total revenue of HKD 54.309 billion, operating profit of HKD 5.926 billion, profit for the period of HKD 3.651 billion, and basic earnings per ordinary share of 56.7 HK cents for H1 2025 Cathay Group H1 2025 Consolidated Income Statement Summary | Indicator | H1 2025 (HKD million) | H1 2024 (HKD million) | | :--- | :--- | :--- | | Total Revenue | 54,309 | 49,604 | | Operating expenses | (48,383) | (43,697) | | Operating profit before non-recurring items | 5,926 | 5,907 | | Operating profit | 5,926 | 6,016 | | Net finance costs | (1,477) | (1,455) | | Share of losses from associates | (128) | (320) | | Profit before tax | 4,321 | 4,241 | | Tax | (670) | (628) | | Profit for the period | 3,651 | 3,613 | | Profit attributable to Cathay Group ordinary shareholders | 3,651 | 3,372 | | Basic earnings per ordinary share (HK cents) | 56.7 | 52.4 | | Diluted earnings per ordinary share (HK cents) | 54.8 | 47.0 | [Consolidated Statement of Comprehensive Income](index=15&type=section&id=7.2%20Consolidated%20Statement%20of%20Comprehensive%20Income) Cathay Group's total comprehensive income for H1 2025 was HKD 2.309 billion, a decrease from HKD 4.390 billion in the prior year, mainly due to cash flow hedging losses and reduced share of other comprehensive income from associates Cathay Group H1 2025 Consolidated Statement of Comprehensive Income Summary | Indicator | H1 2025 (HKD million) | H1 2024 (HKD million) | | :--- | :--- | :--- | | Profit for the period | 3,651 | 3,613 | | Cash flow hedges (loss/gain recognised during the period) | (2,148) | 1,789 | | Share of other comprehensive income of associates (recognised during the period) | (24) | (68) | | Exchange differences on translation of foreign operations (gain/loss recognised during the period) | 513 | (383) | | Defined benefit plans (remeasurement loss recognised during the period) | (2) | (1) | | Other comprehensive income for the period, net of tax | (1,342) | 777 | | **Total Comprehensive Income for the Period** | **2,309** | **4,390** | [Consolidated Statement of Financial Position](index=16&type=section&id=7.3%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, Cathay Group's total assets less current liabilities were HKD 117.452 billion, and total shareholders' equity was HKD 51.661 billion, with an increase in net non-current assets but an expansion in net current liabilities Cathay Group June 30, 2025 Consolidated Statement of Financial Position Summary | Indicator | June 30, 2025 (HKD million) | December 31, 2024 (HKD million) | | :--- | :--- | :--- | | Property, plant and equipment | 116,085 | 116,457 | | Investments in associates | 16,497 | 16,371 | | Net non-current assets | 86,091 | 83,500 | | Cash and cash equivalents | 8,912 | 10,534 | | Net current liabilities | (34,430) | (30,993) | | Total assets less current liabilities | 117,452 | 121,005 | | Total shareholders' equity | 51,661 | 52,507 | [Consolidated Statement of Cash Flows](index=17&type=section&id=7.4%20Consolidated%20Statement%20of%20Cash%20Flows) Cathay Group's net cash inflow from operating activities was HKD 11.153 billion, net cash outflow from investing activities was HKD 4.267 billion, and net cash outflow from financing activities was HKD 9.130 billion in H1 2025, resulting in a net decrease of HKD 2.244 billion in cash and cash equivalents Cathay Group H1 2025 Consolidated Statement of Cash Flows Summary | Indicator | H1 2025 (HKD million) | H1 2024 (HKD million) | | :--- | :--- | :--- | | Net cash inflow from operating activities | 11,153 | 10,613 | | Net cash outflow from investing activities | (4,267) | (4,082) | | Net cash outflow from financing activities | (9,130) | (4,779) | | Net (decrease)/increase in cash and cash equivalents | (2,244) | 1,752 | | Cash and cash equivalents at June 30 | 3,321 | 9,621 | [Notes to the Financial Statements](index=18&type=section&id=VIII.%20Notes%20to%20the%20Financial%20Statements) This section provides detailed notes on the basis of preparation, accounting policies, segment information, and other financial disclosures [Basis of Preparation and Accounting Policies](index=18&type=section&id=8.1%20Basis%20of%20Preparation%20and%20Accounting%20Policies) This interim financial report is prepared in accordance with the HKEX Listing Rules and HKAS 34, with the Group applying the revised HKAS 21, which had no material impact on the condensed financial statements or accounting policies - This report is prepared in accordance with the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and Hong Kong Accounting Standard 34 "Interim Financial Reporting"[44](index=44&type=chunk) - The Group has applied the revised Hong Kong Accounting Standard 21 "The Effects of Changes in Foreign Exchange Rates: Lack of Exchangeability", which had no material impact on the condensed financial statements or accounting policies[46](index=46&type=chunk) [Segment Information](index=18&type=section&id=8.2%20Segment%20Information) The Group is segmented by business nature into Company (international passenger and cargo), HK Express (low-cost passenger), Air Hong Kong (air cargo express), and airline-related services, with segment results presented on an EBIT basis and geographical revenue information provided by source of sale - Segment results are now presented on an **EBIT (Earnings Before Interest and Tax) basis**, and prior year presentations have been restated to conform to this revised presentation[49](index=49&type=chunk) [Segment Results](index=18&type=section&id=8.2.1%20Segment%20Results) In H1 2025, the Company segment reported a profit of HKD 5.842 billion, HK Express recorded a loss of HKD 524 million, Air Hong Kong a profit of HKD 474 million, airline-related services a profit of HKD 134 million, and share of losses from associates was HKD 128 million Cathay Group H1 2025 Segment Results | Segment | Sales to External Customers (HKD million) | Segment Profit/(Loss) (HKD million) | | :--- | :--- | :--- | | Company | 48,986 | 5,842 | | HK Express | 3,171 | (524) | | Air Hong Kong | 1,595 | 474 | | Airline-related services | 557 | 134 | | Associates | - | (128) | | **Total** | **54,309** | **5,926** | [Geographical Information](index=19&type=section&id=8.2.2%20Geographical%20Information) By source of sale, North Asia (mainland China, Hong Kong, and Taiwan) contributed HKD 30.078 billion in revenue, with revenue also growing in the Americas, Southeast Asia & Oceania, Europe, and South Asia, Middle East & Africa regions Cathay Group H1 2025 Revenue by Source of Sale | Region | H1 2025 (HKD million) | H1 2024 (HKD million) | | :--- | :--- | :--- | | North Asia - Mainland China, Hong Kong & Taiwan | 30,078 | 29,235 | | North Asia - Japan & Korea | 2,151 | 2,019 | | Americas | 7,934 | 7,186 | | Southeast Asia & Oceania | 7,024 | 5,540 | | Europe | 4,852 | 3,892 | | South Asia, Middle East & Africa | 2,270 | 1,732 | | **Total** | **54,309** | **49,604** | [Gain on Deemed Disposal of Partial Interests in Associates](index=20&type=section&id=8.3%20Gain%20on%20Deemed%20Disposal%20of%20Partial%20Interests%20in%20Associates) Air China's new share issuance in February 2024 diluted the Group's interest from 16.26% to 15.87%, resulting in a HKD 90 million gain, while Air China Cargo's exercise of an over-allotment option in February 2025 diluted the Group's ownership from 21.36% to 21.01%, with no material financial impact - Air China's new share issuance led to a dilution of the Group's interest, resulting in a **HKD 90 million gain**[52](index=52&type=chunk) - Air China Cargo's exercise of an over-allotment option resulted in a dilution of the Group's ownership, with **no material financial impact**[53](index=53&type=chunk) [Components of Operating Profit](index=20&type=section&id=8.4%20Components%20of%20Operating%20Profit) Operating profit includes expenses such as depreciation of property, plant and equipment, amortisation of intangible assets, and short-term lease expenses, as well as income from net gain on disposal of property, plant and equipment, government grants, and dividends from unlisted equity investments H1 2025 Expenses/(Income) Included in Operating Profit | Item | H1 2025 (HKD million) | H1 2024 (HKD million) | | :--- | :--- | :--- | | Depreciation of property, plant and equipment | 5,399 | 5,672 | | Amortisation of intangible assets | 332 | 286 | | Expenses relating to short-term leases and leases of low-value assets | 6 | 8 | | Net gain on disposal of property, plant and equipment | (2) | (51) | | Government grants | (87) | (147) | | Dividend income from unlisted equity investments | (141) | (66) | [Taxation](index=20&type=section&id=8.5%20Taxation) The Group's tax expense for H1 2025 was HKD 670 million, a 6.7% YoY increase, with Hong Kong profits tax calculated at 16.5% and overseas tax at local rates, and the Group is subject to global minimum tax reforms (Pillar Two rules), with an estimated investment of no more than HKD 150 million H1 2025 Taxation Expense | Item | H1 2025 (HKD million) | H1 2024 (HKD million) | | :--- | :--- | :--- | | Current tax expense | 254 | 157 | | Deferred tax expense | 416 | 471 | | **Total** | **670** | **628** | - The Group is subject to the Organisation for Economic Co-operation and Development's (OECD) Global Anti-Base Erosion Model Rules (Pillar Two rules), with Hong Kong enacting Pillar Two legislation effective January 1, 2025, and an estimated investment of no more than **HKD 150 million**[56](index=56&type=chunk) [Earnings Per Ordinary Share](index=21&type=section&id=8.6%20Earnings%20Per%20Ordinary%20Share) Cathay Group's basic earnings per ordinary share for H1 2025 were 56.7 HK cents, and diluted earnings per ordinary share were 54.8 HK cents, with convertible bonds having a dilutive effect H1 2025 Earnings Per Ordinary Share | Indicator | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Basic earnings (HK cents) | 56.7 | 52.4 | | Diluted earnings (HK cents) | 54.8 | 47.0 | - Convertible bonds have a dilutive effect on earnings per ordinary share, with a dilutive impact of **HKD 32 million** in H1 2025[58](index=58&type=chunk)[59](index=59&type=chunk) [Interest-Bearing Liabilities and Liquidity](index=21&type=section&id=8.7%20Interest-Bearing%20Liabilities%20and%20Liquidity) As of June 30, 2025, the Group's total borrowings were HKD 65.254 billion and net borrowings were HKD 56.342 billion, both lower than year-end 2024, with available unrestricted liquidity of HKD 21.504 billion, comprising HKD 8.912 billion in cash and HKD 12.595 billion in committed undrawn facilities Cathay Group June 30, 2025 Interest-Bearing Liabilities and Liquidity | Indicator | June 30, 2025 (HKD million) | December 31, 2024 (HKD million) | | :--- | :--- | :--- | | Total borrowings | 65,254 | 68,475 | | Cash and cash equivalents | (8,912) | (10,534) | | Net borrowings | 56,342 | 57,941 | | Available unrestricted liquidity | 21,504 | 19,073 | | Committed undrawn facilities | 12,595 | 8,542 | [Trade and Other Payables](index=23&type=section&id=8.8%20Trade%20and%20Other%20Payables) As of June 30, 2025, the Group's total trade and other payables were HKD 18.503 billion, similar to year-end 2024, with trade payables at HKD 7.597 billion and a significant increase in the current portion of derivative financial liabilities Cathay Group June 30, 2025 Trade and Other Payables | Item | June 30, 2025 (HKD million) | December 31, 2024 (HKD million) | | :--- | :--- | :--- | | Trade payables | 7,597 | 7,480 | | Derivative financial liabilities – current portion | 1,459 | 277 | | Other payables | 8,784 | 9,935 | | Amounts due to associates | 282 | 334 | | Amounts due to other related companies | 381 | 451 | | **Total** | **18,503** | **18,477** | [Share Capital](index=23&type=section&id=8.9%20Share%20Capital) As of June 30, 2025, the company had 6,439,409,250 issued and fully paid ordinary shares, with HKD 4.558 billion of convertible bonds repurchased and cancelled before January 2, 2025, leaving HKD 2.164 billion outstanding principal Cathay Group June 30, 2025 Share Capital Status | Item | June 30, 2025 Number of Shares | June 30, 2025 HKD million | | :--- | :--- | :--- | | Balance of issued and fully paid ordinary shares | 6,439,409,250 | 28,841 | - Before January 2, 2025, **HKD 4.558 billion (67.89% of the principal amount)** of the 2026 secured convertible bonds were repurchased and cancelled, with an outstanding principal amount of **HKD 2.164 billion**[66](index=66&type=chunk) [Dividends](index=24&type=section&id=8.10%20Dividends) The Board has declared a first interim dividend of 20 HK cents per ordinary share for 2025, totaling HKD 1.288 billion, to be paid on October 9, 2025, with the company's ordinary shares going ex-dividend from September 3, 2025 H1 2025 Interim Dividend Paid for Previous Financial Year | Item | H1 2025 (HKD million) | H1 2024 (HKD million) | | :--- | :--- | :--- | | Interim dividend paid for previous financial year | 3,155 | 2,768 | - The Board has declared a **first interim dividend of 20 HK cents per ordinary share for 2025**, totaling **HKD 1.288 billion**, to be paid on **October 9, 2025**[67](index=67&type=chunk) - The company's ordinary shares will go **ex-dividend from September 3, 2025**[67](index=67&type=chunk) [Events After the Reporting Period](index=24&type=section&id=8.11%20Events%20After%20the%20Reporting%20Period) Subsequent to the reporting period, the company's wholly-owned subsidiary exercised purchase rights for 14 Boeing 777-9 aircraft with an option for up to 7 more, and some convertible bonds were converted on August 5, 2025, leaving HKD 1.76 billion in outstanding principal - The company's wholly-owned subsidiary exercised purchase rights to acquire **14 Boeing 777-9 aircraft** and obtained rights to acquire up to **7 additional aircraft**[69](index=69&type=chunk) - On August 5, 2025, **HKD 404 million** of convertible bonds were converted, leaving a total outstanding principal amount of **HKD 1.76 billion**[70](index=70&type=chunk) [Corporate Governance and Interim Report](index=24&type=section&id=8.12%20Corporate%20Governance%20and%20Interim%20Report) The company is committed to maintaining high standards of corporate governance, complying with all code provisions of Appendix C1 of the Listing Rules, and the 2025 Interim Report will be published on the HKEX and company websites by August 22, 2025 - The company complies with all code provisions contained in Part 2 of Appendix C1 "Corporate Governance Code" of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[71](index=71&type=chunk) - The company has adopted a code of conduct for directors' securities transactions, with terms no less stringent than Appendix C3 "Model Code for Securities Transactions by Directors of Listed Issuers" of the Listing Rules[71](index=71&type=chunk) - The "2025 Interim Report" will be published on the HKEX website and the company's website on or before **August 22, 2025**[72](index=72&type=chunk) [Disclaimer and Company Information](index=25&type=section&id=IX.%20Disclaimer%20and%20Company%20Information) This section includes a disclaimer regarding forward-looking statements and lists the company's directors [Disclaimer](index=25&type=section&id=9.1%20Disclaimer) This document may contain forward-looking statements based on various assumptions, estimates, and forecasts, subject to inherent risks and uncertainties beyond the company's control, where actual results may differ materially due to changes in economic conditions, competition, exchange rates, interest rates, and commodity prices, and the company assumes no obligation to update or revise such statements - This document may contain forward-looking statements based on various assumptions, estimates, and forecasts, subject to inherent risks, uncertainties, or other factors beyond the company's control[73](index=73&type=chunk) - Actual results may differ materially and/or adversely due to changes in economic conditions, competitive environment, exchange rates, interest rates, and commodity prices[73](index=73&type=chunk) - Neither the company nor its directors, officers, employees, agents, affiliates, advisors, or representatives assume any obligation to update such forward-looking statements[73](index=73&type=chunk) [Company Directors' Information](index=25&type=section&id=9.2%20Company%20Directors'%20Information) The announcement lists the company's executive directors, non-executive directors, and independent non-executive directors, with Patrick Healy as Chairman - The company's current directors include Executive Directors (Patrick Healy, Chairman; Ronald Lam, Lavinia Lau, Alex McGowan, Rebecca Sharpe), Non-Executive Directors (Ma Chongxian, Deputy Chairman, etc.), and Independent Non-Executive Directors (Bernard Chan, etc.)[74](index=74&type=chunk)

[Financial Highlights](index=1&type=section&id=Financial%20Highlights) [Financial Highlights](index=1&type=section&id=Financial%20Highlights) The Group reported strong H1 2025 operating results, with revenue up 13% and EBITDA up 63%, narrowing loss attributable to shareholders to HKD 289 million 2025 Interim Results Summary | Metric | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change | | :--- | :--- | :--- | :--- | | **Operating Revenue^ (HKD Million)** | 3,281 | 2,908 | 13% | | **Operating EBITDA^ (HKD Million)** | 643 | 395 | 63% | | **Loss Attributable to Shareholders (HKD Million)** | (289) | (448) | 35% (Loss Narrowed) | | **Basic Loss Attributable to Shareholders (HKD Million)** | (216) | (257) | 16% (Loss Narrowed) | | **Metric** | **As of June 30, 2025** | **As of December 31, 2024** | **Change** | | **Net Asset Value Per Share (HKD)** | 21.30 | 21.24 | – | | **Net External Debt to Total Assets Ratio** | 25% | 23% | +2pp | - Excluding the non-recurring income from the sale of London Peninsula residential apartments in the same period of 2024, the Group's consolidated operating revenue achieved a **robust 13% growth**[2](index=2&type=chunk) - The London Peninsula residential apartment project is progressing well, with **17 out of 24 units sold** as of June 30, 2025, and the remaining **6 units officially launched** to the market[2](index=2&type=chunk) - Loss attributable to shareholders narrowed from **HKD 448 million** in the prior year to **HKD 289 million**, primarily due to a reduction in unrealized revaluation losses on investment properties (from **HKD 139 million** to **HKD 61 million**)[2](index=2&type=chunk)[11](index=11&type=chunk) [CEO Review](index=3&type=section&id=CEO%20Review) [Business Performance](index=4&type=section&id=Business%20Performance) The Group's business segments, including Hotels, Commercial Properties, and Peak Tram, showed mixed performance, with strong international hotel and Peak Tram results offsetting weakness in Greater China [Hotels Segment](index=4&type=section&id=Hotels%20Segment) The Hotels segment's total revenue grew 14% year-on-year, driven by strong double-digit growth in New York, Tokyo, Paris, and London Peninsula hotels, while Greater China hotels saw revenue declines due to weak demand Hotel Revenue Performance (HKD Million) | Hotel | Revenue (HKD Million) | Year-on-Year Change (in HKD) | | :--- | :--- | :--- | | The Peninsula Hong Kong | 518 | – | | The Peninsula Shanghai* | 212 | -3% | | The Peninsula Beijing | 149 | -6% | | The Peninsula London | 373 | +12% | | The Peninsula Paris* | 426 | +23% | | The Peninsula Istanbul* | 206 | +36% | | The Peninsula New York | 348 | +54% | | The Peninsula Chicago | 286 | +6% | | The Peninsula Beverly Hills* | 341 | +9% | | The Peninsula Tokyo | 499 | +24% | | The Peninsula Bangkok | 121 | +18% | | The Peninsula Manila | 118 | +6% | - Following a major renovation completed in 2024, The Peninsula New York demonstrated strong performance in H1 2025, with revenue increasing by **54% year-on-year**[33](index=33&type=chunk) - The Peninsula Tokyo showed strong growth momentum, benefiting from international group business and the cherry blossom season, with Revenue Per Available Room (RevPAR) significantly increasing by **28% year-on-year**[41](index=41&type=chunk) - Due to weak demand in the Greater China region, The Peninsula Beijing's Revenue Per Available Room (RevPAR) decreased by **9% year-on-year**[23](index=23&type=chunk) [Commercial Properties Segment](index=11&type=section&id=Commercial%20Properties%20Segment) Commercial Properties recurring revenue grew 5%, with Hong Kong's Repulse Bay Complex and The Peak Tower outperforming, while St. John's Building revenue declined due to a weak office market, and Vietnam's The Landmark land use rights expire in January 2026 - Hong Kong's Repulse Bay Complex outperformed the previous year, with both residential revenue and occupancy rates improving[47](index=47&type=chunk) - Due to a weak and oversupplied Hong Kong office market, St. John's Building's H1 2025 revenue declined, with its occupancy rate falling to **78%**[49](index=49&type=chunk) - The joint venture and land use rights for The Landmark property in Vietnam will expire and dissolve in **January 2026**, with no possibility of extension[49](index=49&type=chunk)[50](index=50&type=chunk) [Peak Tram, Retail and Other Businesses Segment](index=13&type=section&id=Peak%20Tram%2C%20Retail%20and%20Other%20Businesses%20Segment) This segment's revenue grew 15% year-on-year, primarily driven by the Peak Tram business, which saw a 17% revenue increase and record passenger volume, with other businesses showing mixed growth Segment Business Revenue Performance (HKD Million) | Business | Revenue (HKD Million) | Year-on-Year Change | | :--- | :--- | :--- | | Peak Tram | 171 | +17% | | Quail Lodge Golf Club | 74 | +27% | | Peninsula Merchandising | 64 | +7% | | Tai Pan Laundry | 30 | -7% | - The Peak Tram business performed robustly, achieving a **record-high passenger volume** during the May Golden Week holiday, driving an increase in ticket sales[51](index=51&type=chunk) [Talent Development](index=14&type=section&id=Talent%20Development) The Group focuses on talent development and succession, with a new recruitment website increasing job applications by 25%, and a global full-time workforce of 7,698 employees at period-end - The Group launched a new recruitment website, successfully increasing job applications by **25%** and strengthening the company's talent pool[57](index=57&type=chunk) - As of June 30, 2025, the Group employed a total of **7,698 full-time staff**[58](index=58&type=chunk) [Valued Legacy (Sustainability)](index=14&type=section&id=Valued%20Legacy) The Group advances its 'Valued Legacy 2030 Vision' sustainability strategy, achieving BREEAM certification for new hotels, expanding renewable energy use, and raising USD 4.8 million for Turkiye earthquake relief - Both The Peninsula London and The Peninsula Istanbul received **'Excellent' certification** under the Building Research Establishment Environmental Assessment Method (BREEAM)[60](index=60&type=chunk) - To aid earthquake-affected areas in Turkiye, the Group's 'Hope for Turkiye' initiative, funded by allocations from global Peninsula hotel room revenues, successfully raised **USD 4.8 million** in donations[62](index=62&type=chunk) [Outlook](index=15&type=section&id=Outlook) The Group maintains a cautiously optimistic H2 outlook, expecting strong European and American hotel performance, but anticipating continued geopolitical and trade impacts in Greater China and Hong Kong, while focusing on prudent expense management - Business at The Peninsula Paris, Tokyo, Beverly Hills, and the newly renovated New York is expected to remain strong[63](index=63&type=chunk) - Geopolitical concerns and trade tensions are anticipated to continue adversely impacting the Group's hotels in Greater China[64](index=64&type=chunk) - The ongoing trend of Hong Kong residents traveling north to Shenzhen for consumption may affect the Group's food and beverage revenue in Hong Kong[64](index=64&type=chunk) - The Group will continue to prudently manage business expenses to navigate the weak market conditions[65](index=65&type=chunk) [Financial Review](index=17&type=section&id=Financial%20Review) [Financial Performance Summary](index=17&type=section&id=Financial%20Performance%20Summary) In H1 2025, the Group's consolidated operating revenue rose 13% to HKD 3.3 billion, and operating EBITDA grew 63% to HKD 643 million, with loss attributable to shareholders narrowing to HKD 289 million and available funds reaching HKD 3.5 billion - Excluding the impact of residential sales, consolidated operating revenue increased by **13% year-on-year**, primarily driven by significant revenue growth from The Peninsula New York, London, and Tokyo[71](index=71&type=chunk) - Basic loss attributable to shareholders narrowed from **HKD 257 million** in the prior year to **HKD 216 million**[72](index=72&type=chunk) - As of end-June 2025, the Group had unutilized credit facilities of **HKD 2.7 billion** and cash of **HKD 832 million**, totaling **HKD 3.5 billion** in available funds, indicating ample liquidity[73](index=73&type=chunk) [Adjusted Net Asset Value](index=18&type=section&id=The%20Group%27s%20Adjusted%20Net%20Asset%20Value) Adjusting hotels and golf courses to fair value would increase shareholders' net assets by 14% to HKD 40.402 billion, with adjusted net asset value per share at HKD 24.24 Adjusted Shareholders' Net Assets (HKD Million) | Item | As of June 30, 2025 | As of December 31, 2024 | | :--- | :--- | :--- | | Shareholders' Net Assets (Financial Statements) | 35,507 | 35,401 | | Adjustment of Hotels and Golf Courses to Fair Value | 4,895 | 4,632 | | **Adjusted Shareholders' Net Assets** | **40,402** | **40,033** | | **Net Asset Value Per Share (HKD)** | 21.30 | 21.24 | | **Adjusted Net Asset Value Per Share (HKD)** | **24.24** | **24.01** | [Basic Loss Attributable to Shareholders](index=18&type=section&id=The%20Group%27s%20Basic%20Profit%20or%20Loss%20Attributable%20to%20Shareholders) To reflect core operating performance, the Group's basic loss attributable to shareholders, excluding non-recurring items, improved to HKD 216 million for H1 2025 from HKD 257 million in the prior year Reconciliation of Basic Loss Attributable to Shareholders (HKD Million) | Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Loss Attributable to Shareholders | (289) | (448) | | Add: Net Loss on Investment Property Valuation* | 73 | 153 | | Add: Non-recurring Expenses** | – | 38 | | **Basic Loss Attributable to Shareholders** | **(216)** | **(257)** | [Income Statement Analysis](index=19&type=section&id=Income%20Statement%20Analysis) Operating revenue grew 13% this period, driving a 63% increase in operating EBITDA, though total revenue declined 29% year-on-year; depreciation and amortization rose, and taxes increased, resulting in a 35% narrowed loss attributable to shareholders of HKD 289 million Key Income Statement Items (HKD Million) | Item | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Operating Revenue | 3,281 | 2,908 | 13% | | Operating EBITDA | 643 | 395 | 63% | | Residential Sales Revenue | – | 1,707 | Not Applicable | | Total EBITDA | 643 | 542 | 19% | | Depreciation and Amortization | (358) | (333) | (8%) | | Net Finance Costs | (362) | (366) | 1% | | Fair Value Loss on Investment Properties | (61) | (139) | 56% | | **Loss Attributable to Shareholders** | **(289)** | **(448)** | **35%** | - Depreciation and amortization expenses increased, primarily due to the completion of renovation works at The Peninsula New York in **2024**[80](index=80&type=chunk) - The increase in taxation was mainly due to improved profitability at The Peninsula Tokyo, Repulse Bay Complex, The Peak Tower, and The Peak Tram[80](index=80&type=chunk) [Statement of Financial Position Analysis](index=25&type=section&id=Statement%20of%20Financial%20Position%20Analysis) As of June 30, 2025, the Group's total assets were HKD 55.946 billion, shareholders' net assets HKD 35.507 billion, and net asset value per share HKD 21.30, largely stable, with fixed assets and interest-bearing loans increasing Statement of Financial Position Summary (HKD Million) | Item | As of June 30, 2025 | As of December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Fixed Assets | 49,399 | 47,864 | 3% | | **Total Assets** | **55,946** | **54,176** | **3%** | | Interest-Bearing Loans | (14,566) | (13,389) | (9%) | | **Total Liabilities** | **(20,390)** | **(18,730)** | **(9%)** | | **Shareholders' Equity** | **35,507** | **35,401** | **–** | - The total fair value of the Group's property assets is approximately **HKD 62.7 billion**, exceeding their carrying value of **HKD 54.1 billion** in the financial statements[103](index=103&type=chunk) [Cash Flow Statement Analysis](index=28&type=section&id=Cash%20Flow%20Statement%20Analysis) Net cash inflow from recurring operating activities reached HKD 366 million, a nine-fold increase from the prior year, driven by strong operating EBITDA; the Group continued project investments and successfully issued JPY 16 billion in private placement Samurai bonds - Net cash inflow from recurring operating activities, after deducting normal capital expenditure, was **HKD 366 million**, a significant increase from only **HKD 38 million** in the prior year (excluding residential sales)[108](index=108&type=chunk) - Total project-related cash outflow amounted to **HKD 331 million**, primarily for The Peninsula London development, capital injection into The Peninsula Istanbul, and The Peninsula New York renovation[108](index=108&type=chunk) - In June 2025, the Group successfully issued **JPY 16 billion** (approximately **HKD 869 million**) in private placement Samurai bonds, expanding its financing channels[109](index=109&type=chunk) [Treasury Management](index=29&type=section&id=Treasury%20Management) The Group maintains a robust financial position with HKD 2.7 billion in unutilized credit facilities and a 25% net debt to total assets ratio, while successfully issuing its first JPY 16 billion private placement Samurai bond and refinancing a GBP 425 million green syndicated loan, with 62% of committed credit facilities now green or sustainability-linked - The Group successfully issued its first **JPY 16 billion** private placement Samurai bond and completed refinancing for a **GBP 425 million** green syndicated loan, effectively expanding financing channels and extending debt maturity[111](index=111&type=chunk) - As of June 30, 2025, the Group's net external debt to total assets ratio remained at a **healthy 25%**[110](index=110&type=chunk) - The Group is committed to sustainable finance, with **62%** of its total committed credit facilities classified as green loans or sustainability-linked loans as of period-end[112](index=112&type=chunk) [Dividends](index=30&type=section&id=Dividends) The company's dividend policy aims for stable and sustainable dividends; however, due to the basic loss recorded for the period, the Board decided not to declare an interim dividend for H1 2025 - Given the basic loss recorded, the company did not declare or pay an interim dividend for the six months ended June 30, 2025 (H1 2024: nil)[116](index=116&type=chunk) [Consolidated Financial Statements](index=31&type=section&id=Consolidated%20Financial%20Statements) [Consolidated Income Statement and Consolidated Statement of Comprehensive Income](index=31&type=section&id=Consolidated%20Income%20Statement%20and%20Consolidated%20Statement%20of%20Comprehensive%20Income) For H1 2025, the Group recorded revenue of HKD 3.281 billion and a loss attributable to shareholders of HKD 289 million, with other comprehensive income of HKD 395 million, primarily from exchange gains, resulting in a positive total comprehensive income of HKD 106 million Income Statement and Comprehensive Income Statement Summary (HKD Million) | Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Revenue | 3,281 | 4,615 | | **Loss for the Period** | **(289)** | **(448)** | | Other Comprehensive Income for the Period | 395 | 82 | | **Total Comprehensive Income for the Period** | **106** | **(366)** | [Consolidated Statement of Financial Position](index=33&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's total assets were HKD 55.946 billion, total liabilities HKD 20.390 billion, and net assets HKD 35.556 billion, maintaining a robust financial position Statement of Financial Position Summary (HKD Million) | Item | As of June 30, 2025 | As of December 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | **55,946** | **54,176** | | **Total Liabilities** | **20,390** | **18,730** | | **Net Assets** | **35,556** | **35,446** | | **Total Equity Attributable to Shareholders** | **35,507** | **35,401** | [Condensed Consolidated Cash Flow Statement](index=35&type=section&id=Condensed%20Consolidated%20Cash%20Flow%20Statement) For H1 2025, net cash inflow from operating activities was HKD 610 million, with net cash outflows from investing activities of HKD 571 million and financing activities of HKD 220 million, resulting in HKD 560 million cash and cash equivalents at period-end Cash Flow Statement Summary (HKD Million) | Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Net Cash Inflow from Operating Activities | 610 | 1,853 | | Net Cash Outflow from Investing Activities | (571) | (731) | | Net Cash Outflow from Financing Activities | (220) | (1,259) | | **Net Decrease in Cash and Cash Equivalents** | **(181)** | **(137)** | | **Cash and Cash Equivalents at Period-End** | **560** | **560** | [Notes to the Financial Statements](index=36&type=section&id=Notes%20to%20the%20Unaudited%20Interim%20Financial%20Report) [Note 3: Segment Reporting](index=37&type=section&id=Note%203.%20Segment%20Reporting) The Group's business is managed across three segments: Hotels, Commercial Properties, and Peak Tram & Other Businesses, with Hotels as the largest revenue contributor at HKD 2.483 billion, Commercial Properties revenue decreasing, and Peak Tram & Other Businesses growing steadily Segment Revenue and Operating Profit (HKD Million) | Segment | Revenue (2025 H1) | Revenue (2024 H1) | Operating Profit (2025 H1) | Operating Profit (2024 H1) | | :--- | :--- | :--- | :--- | :--- | | Hotels | 2,483 | 2,174 | 115 | (98) | | Commercial Properties | 455 | 2,142 | 224 | 360 | | Peak Tram, Retail and Other Businesses | 343 | 299 | (54) | (53) | | **Consolidated** | **3,281** | **4,615** | **285** | **209** | [Note 9: Property, Plant and Equipment](index=43&type=section&id=Note%209.%20Investment%20Properties%2C%20Other%20Property%2C%20Plant%20and%20Equipment) During the period, the Group incurred HKD 202 million for London Peninsula development and HKD 102 million for Hong Kong Peninsula fixed assets; investment properties were revalued, resulting in a net loss of HKD 61 million due to Hong Kong property market decline - A net loss of **HKD 61 million** was recorded due to the revaluation of investment properties, which has been recognized in the consolidated income statement[139](index=139&type=chunk) [Note 17: Interest-Bearing Loans](index=49&type=section&id=Note%2017.%20Interest-Bearing%20Loans) As of June 30, 2025, the Group's total interest-bearing loans increased to HKD 14.566 billion, with HKD 9.15 billion repayable within one year, and the Group issued HKD 869 million (JPY 16 billion) in private placement Samurai bonds Interest-Bearing Loans Summary (HKD Million) | Item | As of June 30, 2025 | As of December 31, 2024 | | :--- | :--- | :--- | | Total Available Credit Facilities | 17,370 | 16,308 | | Amount Utilized | 14,591 | 13,420 | | **Total Interest-Bearing Loans (Recognized)** | **14,566** | **13,389** | [Note 20: Commitments](index=51&type=section&id=Note%2020.%20Commitments) As of June 30, 2025, the Group's total capital commitments significantly decreased to HKD 480 million, with HKD 95 million in contracted but unprovided commitments primarily for existing properties and major renovations Capital Commitments (HKD Million) | Item | Contracted | Authorized but Not Contracted | Total | | :--- | :--- | :--- | :--- | | Capital Commitments | 89 | 340 | 429 | | Share of Commitments in Joint Ventures and Associates | 6 | 45 | 51 | | **Total** | **95** | **385** | **480** | [Corporate Governance and Other Information](index=52&type=section&id=Corporate%20Governance%20and%20Other%20Information) [Corporate Governance and Risk Management](index=52&type=section&id=Corporate%20Governance%20and%20Risk%20Management) The Board confirmed the Group's compliance with the HKEX Corporate Governance Code in H1 2025, and its risk management and internal control systems were deemed effective and adequate, with no material issues found - The Company has complied with all code provisions and recommended best practices of the Corporate Governance Code for the six months ended June 30, 2025, with minor disclosed exceptions[160](index=160&type=chunk) - The Board reviewed and confirmed that the Group's risk management and internal control systems remained effective and adequate in H1 2025[161](index=161&type=chunk) [Other Information](index=53&type=section&id=Other%20Information) During the reporting period, neither the company nor its subsidiaries purchased, sold, or redeemed listed securities; all directors confirmed compliance with the securities dealing code, and no interim dividend was declared due to basic loss - Neither the company nor any of its subsidiaries purchased, sold, or redeemed the company's listed securities during the period[163](index=163&type=chunk) - Given the basic loss recorded by the company, the Board resolved not to declare an interim dividend for the six months ended June 30, 2025[165](index=165&type=chunk)

Corporate Information [BOARD OF DIRECTORS](index=4&type=section&id=BOARD%20OF%20DIRECTORS) The Board of Directors, chaired by Dr. Lei Qian, provides overall strategic guidance and oversight, comprising executive, non-executive, and independent non-executive directors - Board members include Dr. Lei Qian (Chairperson), Mr. Lin Jiawei, Ms. Lin Yanling (Executive Directors); Ms. Lin Shuhua, Mr. Chen Shouhuang (Non-executive Directors); Mr. Chen Ruilong, Mr. Yang Shijian, Mr. Lin Cangxiang (Independent Non-executive Directors)[5](index=5&type=chunk) [AUTHORISED REPRESENTATIVES](index=4&type=section&id=AUTHORISED%20REPRESENTATIVES) Mr. Lin Jiawei serves as the authorized representative, with Ms. Li Meiyi appointed on August 5, 2025, following Ms. Guo Yanting's resignation, to handle listing rule authorizations - Ms. Guo Yanting resigned as authorized representative on August 5, 2025, and Ms. Li Meiyi was appointed on the same day[6](index=6&type=chunk) [COMPANY SECRETARY](index=4&type=section&id=COMPANY%20SECRETARY) Ms. Li Meiyi was appointed Company Secretary on August 5, 2025, succeeding Ms. Guo Yanting, who resigned on the same date, to manage corporate secretarial functions - Ms. Guo Yanting resigned as Company Secretary on August 5, 2025, and Ms. Li Meiyi was appointed on the same day[6](index=6&type=chunk) [Committees](index=4&type=section&id=Committees) The report details the composition of the Audit, Remuneration, Executive, and Nomination Committees, crucial for corporate governance, oversight, and decision-making - Mr. Chen Ruilong chairs the Audit Committee, Mr. Lin Cangxiang chairs the Remuneration Committee, Dr. Lei Qian chairs the Executive Committee, and Mr. Yang Shijian chairs the Nomination Committee[7](index=7&type=chunk)[8](index=8&type=chunk)[9](index=9&type=chunk) [REGISTERED OFFICE AND PRINCIPAL PLACE OF BUSINESS](index=5&type=section&id=REGISTERED%20OFFICE) The company's registered office is in the Cayman Islands, with its principal place of business in Hong Kong, defining its legal and operational headquarters - The registered office is located at P.O. Box 309, Ugland House, Grand Cayman, KY1–1104, Cayman Islands[9](index=9&type=chunk) - The principal place of business in Hong Kong is Unit 1916, 19/F, The Lee Gardens, 33 Hysan Avenue, Causeway Bay, Hong Kong[10](index=10&type=chunk) [AUDITORS AND LEGAL ADVISERS](index=6&type=section&id=AUDITORS) RSM Hong Kong is the company's auditor, and Jingtian & Gongcheng is its Hong Kong legal adviser, ensuring independent financial audits and legal compliance - The auditor is RSM Hong Kong, registered under the Financial Reporting Council Ordinance (Cap. 588 of the Laws of Hong Kong)[10](index=10&type=chunk) - The Hong Kong legal adviser is Jingtian & Gongcheng[11](index=11&type=chunk) [PRINCIPAL SHARE REGISTRAR AND TRANSFER AGENT](index=6&type=section&id=PRINCIPAL%20SHARE%20REGISTRAR%20AND%20TRANSFER%20AGENT) Maples Fund Services (Cayman) Limited is the principal share registrar, with Hong Kong Registrars Limited as the branch registrar, managing shareholder registration and transfers - The principal share registrar and transfer agent is Maples Fund Services (Cayman) Limited[11](index=11&type=chunk) - The Hong Kong branch share registrar and transfer office is Hong Kong Registrars Limited[12](index=12&type=chunk) [LISTING INFORMATION](index=7&type=section&id=LISTING%20INFORMATION) The company is listed on The Stock Exchange of Hong Kong Limited under stock code 00157, indicating its public trading status - The company is listed on The Stock Exchange of Hong Kong Limited, with stock code **00157**[13](index=13&type=chunk) [PRINCIPAL BANKERS](index=7&type=section&id=PRINCIPAL%20BANKERS) The company's principal bankers include HSBC, Bank of Taipei, CTBC Bank, China Merchants Bank, Bank of Communications, and E.SUN Commercial Bank, covering financial institutions across Hong Kong, Taiwan, and mainland China - Principal bankers include The Hongkong and Shanghai Banking Corporation Limited, Bank of Taipei, CTBC Bank Co., Ltd., China Merchants Bank Co., Ltd., Bank of Communications Co., Ltd., and E.SUN Commercial Bank (China) Co., Ltd[13](index=13&type=chunk)[14](index=14&type=chunk)[15](index=15&type=chunk) [WEBSITE](index=7&type=section&id=WEBSITE) The company's official website, www.ir-cloud.com/hongkong/00157/irwebsite, provides investor relations information - The company's official website is www.ir-cloud.com/hongkong/00157/irwebsite[14](index=14&type=chunk) Management Discussion and Analysis [FINANCIAL REVIEW](index=8&type=section&id=FINANCIAL%20REVIEW) For the six months ended June 30, 2025, turnover increased by 68.7% to HK$264.5 million, driven by mainland China, with gross profit margin declining due to product mix, but profit for the period turned positive Turnover by Geographical Segment (1H 2025 vs 1H 2024) | Region | 1H 2025 (thousand HKD) | 1H 2025 (%) | 1H 2024 (thousand HKD) | 1H 2024 (%) | Change (thousand HKD) | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Mainland China | 216,872 | 82.0% | 107,833 | 68.8% | 109,039 | 101.1% | | Taiwan | 45,943 | 17.4% | 45,953 | 29.3% | (10) | 0.0% | | Others | 1,689 | 0.6% | 2,963 | 1.9% | (1,274) | -43.0% | | **Total** | **264,504** | **100%** | **156,749** | **100.0%** | **107,755** | **68.7%** | - The Group's overall gross profit margin decreased from **59.5% in 1H 2024** to **55.6% in 1H 2025**, primarily due to changes in product bundling sales mix in mainland China[21](index=21&type=chunk) Turnover by Business Segment (1H 2025 vs 1H 2024) | Business | 1H 2025 (thousand HKD) | 1H 2025 (%) | 1H 2024 (thousand HKD) | 1H 2024 (%) | Change (thousand HKD) | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Products | 262,625 | 99.3% | 155,626 | 99.3% | 106,999 | 68.8% | | Services | 1,879 | 0.7% | 1,123 | 0.7% | 756 | 67.3% | | **Total** | **264,504** | **100%** | **156,749** | **100.0%** | **107,755** | **68.7%** | - Profit before tax turned from a **loss of HK$28.7 million in 1H 2024** to a **profit of HK$12.5 million in 1H 2025**, representing a **143.6% increase**[38](index=38&type=chunk) - Profit for the period turned from a **loss of HK$30.5 million in 1H 2024** to a **profit of HK$10.9 million in 1H 2025**, representing a **135.7% increase**[39](index=39&type=chunk) Liquidity and Financial Resources (June 30, 2025 vs December 31, 2024) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities (1H) | 14.0 million HKD | 26.5 million HKD | | Cash and cash equivalents | 93.5 million HKD | 109.0 million HKD | | Bank borrowings | 200.9 million HKD | 192.2 million HKD | | Gearing ratio | 41.4% | 43.0% | | Current ratio | 1.45 times | 1.54 times | - As of June 30, 2025, approximately **52.3% of the Group's bank balances and cash** were denominated in New Taiwan Dollars, **29.4% in Renminbi**, with the remainder in US Dollars, Hong Kong Dollars, and Malaysian Ringgit[46](index=46&type=chunk) [BUSINESS REVIEW](index=13&type=section&id=BUSINESS%20REVIEW) In 1H 2025, the Group achieved strong growth in mainland China and stable performance in Taiwan, with significant increases in franchised/self-operated spa and counter sales, while R&D focused on anti-aging, smart devices, and exosome technology - Mainland China market turnover increased by **101.1% to HK$216.9 million**, but product sales gross profit margin decreased from **61.5% to 56.0%** due to changes in product revenue mix[50](index=50&type=chunk) - Taiwan market turnover remained stable at **HK$46.0 million**, with product sales gross profit margin increasing from **55.9% to 56.3%** due to changes in revenue mix from business channel adjustments[51](index=51&type=chunk) Turnover by Distribution Channel (1H 2025 vs 1H 2024) | Distribution Channel | 1H 2025 (thousand HKD) | 1H 2025 (%) | 1H 2024 (thousand HKD) | 1H 2024 (%) | Change (thousand HKD) | | :--- | :--- | :--- | :--- | :--- | :--- | | Franchised/Self-operated Spa and Counters | 243,000 | 91.9% | 134,300 | 85.7% | 108,700 | | E-commerce, TV Shopping and Telemarketing | 21,500 | 8.1% | 22,400 | 14.3% | (900) | Number of Stores by Ownership (June 30, 2025 vs June 30, 2024) | Region | June 30, 2025 (Total) | June 30, 2024 (Total) | | :--- | :--- | :--- | | Mainland China | 1,653 | 1,298 | | Taiwan | 293 | 323 | | Others | 19 | 32 | | **Total** | **1,965** | **1,653** | *During 1H 2025, the Group opened 244 new stores and closed 59 stores* - R&D strategy focuses on anti-aging innovation upgrades (flagship "Diamond Peptide Series" fully upgraded), smart device applications (upgraded AI skin detection device launched), and deepening exosome technology (over 20 exosome products expected to be launched)[62](index=62&type=chunk)[63](index=63&type=chunk)[64](index=64&type=chunk)[68](index=68&type=chunk) - Successfully developed an **AI massage robot with visual recognition capabilities**, capable of simulating professional manual techniques for standardized operations, enhancing service consistency and customer experience[69](index=69&type=chunk) - A new product launch event in April 2025 introduced **6 skincare items, 2 Diamond skincare gift sets, 5 health food products, and 4 hair care products**, generating **HK$58.0 million in sales**, with health food series revenue growing by **109.3% to HK$28.0 million** year-on-year[74](index=74&type=chunk)[75](index=75&type=chunk)[76](index=76&type=chunk) - Established a strategic partnership with Giffard Education Group, launching the first "Bio-up Fanity" biotechnology beauty SPA club in Xi'an, Shaanxi, pioneering cross-industry integration in the beauty sector[77](index=77&type=chunk)[79](index=79&type=chunk) - As of June 30, 2025, the Group had **525 employees**, with total remuneration of approximately **HK$74.9 million** (1H 2024: HK$64.0 million)[80](index=80&type=chunk) - Capital expenditure for 1H 2025 was **HK$33.2 million**, primarily for new factory construction in mainland China (**HK$19.4 million**) and new store renovation and equipment (**HK$10.4 million**)[82](index=82&type=chunk)[86](index=86&type=chunk) [OUTLOOK FOR 2025](index=20&type=section&id=OUTLOOK%20FOR%202025) Natural Beauty views 2025 as a pivotal year for structural breakthroughs, focusing on expanding into the broader health sector, diversifying business, and fully integrating AI technology across product innovation, digital stores, marketing, and management systems - 2025 is a crucial year for structural breakthroughs, with continued deep cultivation in the big health sector and steady expansion of diversified business segments, driving the company into a new stage of high-quality growth[89](index=89&type=chunk)[91](index=91&type=chunk) - The number of new franchised stores in mainland China increased by **88.1% year-on-year**, significantly enhancing channel penetration and consumer reach efficiency[89](index=89&type=chunk)[91](index=91&type=chunk) - The Taiwan market will continue to advance a dual strategy of "multi-channel marketing" and "high repurchase products," actively deploying AI beauty instruments to help franchised stores upgrade their profit models[90](index=90&type=chunk)[92](index=92&type=chunk) - The mainland China market will implement a multi-channel, multi-brand strategy, accelerate the layout of its agent system, and enhance market penetration efficiency through a "online live streaming + offline conference" integrated strategy[93](index=93&type=chunk) - Looking ahead to the second half, the Group will continue to implement its "AI Technology • Beauty Industry • Holistic Health" strategy, leveraging strategic partnerships with Baidu and Fudan University to fully utilize AI technology in product innovation, digital store development, marketing, and management system upgrades[94](index=94&type=chunk) Corporate Governance Highlights [Commitment to Corporate Governance](index=22&type=section&id=Commitment%20to%20Corporate%20Governance) The company is committed to high-level corporate governance to protect and enhance shareholder interests, with established committees whose terms of reference comply with the Corporate Governance Code - The company is committed to high-level corporate governance, having established an Audit Committee, Executive Committee, Remuneration Committee, and Nomination Committee, with terms of reference compliant with the Corporate Governance Code in Appendix C1 of the Listing Rules[95](index=95&type=chunk)[96](index=96&type=chunk) [AUDIT COMMITTEE AND REVIEW OF INTERIM FINANCIAL STATEMENTS](index=22&type=section&id=AUDIT%20COMMITTEE%20AND%20REVIEW%20OF%20INTERIM%20FINANCIAL%20STATEMENTS) The Audit Committee reviewed the unaudited condensed consolidated interim financial statements for the six months ended June 30, 2025, confirming compliance with accounting standards, legal requirements, and Listing Rules, with an independent review by RSM Hong Kong - The Audit Committee has reviewed the unaudited condensed consolidated interim financial statements for the six months ended June 30, 2025, deeming them compliant with applicable accounting standards, legal requirements, and the Listing Rules[97](index=97&type=chunk) - The company's auditor, RSM Hong Kong, has conducted an independent review of the interim financial statements in accordance with Hong Kong Standard on Review Engagements 2410[98](index=98&type=chunk) [REMUNERATION COMMITTEE](index=22&type=section&id=REMUNERATION%20COMMITTEE) The Remuneration Committee determines executive directors' remuneration policies, assesses performance, approves service contract terms, and advises the Board on compensation for directors and senior management - The Remuneration Committee's primary responsibilities include determining the remuneration policy and structure for executive directors, assessing their performance, approving service contract terms, and making recommendations to the Board on remuneration for directors and senior management[99](index=99&type=chunk)[102](index=102&type=chunk) [NOMINATION COMMITTEE](index=23&type=section&id=NOMINATION%20COMMITTEE) The Nomination Committee establishes director nomination policies, annually reviews the Board's structure, size, composition, and diversity, recommends director candidates based on the Board Diversity Policy, and assesses the independence of independent non-executive directors - The Nomination Committee is responsible for determining director nomination policies, annually reviewing the Board's structure, size, composition and diversity, recommending director candidates, and assessing the independence of independent non-executive directors[103](index=103&type=chunk)[108](index=108&type=chunk) [EXECUTIVE COMMITTEE](index=23&type=section&id=EXECUTIVE%20COMMITTEE) The Executive Committee formulates business policies, makes decisions on key business matters, assists in approving corporate actions, reviews financial, marketing, retail, operational, and other business performance, and approves annual budgets and KPIs - The Executive Committee's main duties include formulating business policies, making decisions on important business matters, assisting in approving corporate actions, reviewing financial, marketing, retail, operational and other business performance, and approving annual budgets and key performance indicators[104](index=104&type=chunk)[109](index=109&type=chunk) [COMPLIANCE WITH THE CG CODE](index=23&type=section&id=COMPLIANCE%20WITH%20THE%20CG%20CODE) The Board confirms the company fully complied with all code provisions of the Corporate Governance Code for the six months ended June 30, 2025, demonstrating its commitment to good governance - The Board believes the company has fully complied with all code provisions of the Corporate Governance Code for the entire six-month period ended June 30, 2025[106](index=106&type=chunk)[110](index=110&type=chunk) [COMPLIANCE WITH THE MODEL CODE](index=23&type=section&id=COMPLIANCE%20WITH%20THE%20MODEL%20CODE) The company adopted a code of conduct for securities transactions by directors no less stringent than the Model Code, confirming all directors and relevant employees complied during 1H 2025, ensuring regulatory adherence - The company has adopted a code of conduct for directors' securities transactions, with terms no less stringent than the Model Code set out in Appendix C3 of the Listing Rules[107](index=107&type=chunk)[111](index=111&type=chunk) - All directors have confirmed compliance with the required standards of the Model Code for the entire six-month period ended June 30, 2025, and up to the date of this interim report[107](index=107&type=chunk)[111](index=111&type=chunk) [Disclosure of Information of Directors and Chief Executive Officer pursuant to Rule 13.51B(1) of the Listing Rules](index=24&type=section&id=Disclosure%20of%20Information%20of%20Directors%20and%20Chief%20Executive%20Officer%20pursuant%20to%20Rule%2013.51B(1)%20of%20the%20Listing%20Rules) Disclosures under Listing Rule 13.51B(1) include Ms. Lin Shuhua's re-appointment as independent director of Cashbox Partyworld, Mr. Yang Shijian's cessation as independent director of Topkey Corporation, and Mr. Chen Ruilong's cessation as director of Tatung Company and Vice Chairman of Cross-Strait Entrepreneurs Summit - Non-executive Director Ms. Lin Shuhua was re-appointed as an independent director of Cashbox Partyworld Co., Ltd. on June 18, 2025[113](index=113&type=chunk)[117](index=117&type=chunk) - Independent Non-executive Director Mr. Yang Shijian ceased to be an independent director of Topkey Corporation from May 28, 2025[114](index=114&type=chunk)[117](index=117&type=chunk) - Independent Non-executive Director Mr. Chen Ruilong ceased to be a director of Tatung Company from May 28, 2025, and ceased to be Vice Chairman of the Cross-Strait Entrepreneurs Summit from July 17, 2025[115](index=115&type=chunk)[119](index=119&type=chunk) [CHANGES OF COMPANY SECRETARY AND AUTHORISED REPRESENTATIVE](index=24&type=section&id=CHANGES%20OF%20COMPANY%20SECRETARY%20AND%20AUTHORISED%20REPRESENTATIVE) Ms. Guo Yanting resigned as Company Secretary and Authorized Representative on August 5, 2025, with Ms. Li Meiyi appointed on the same day, ensuring a smooth transition for these key roles - Ms. Guo Yanting resigned as Company Secretary and Authorized Representative on August 5, 2025, and Ms. Li Meiyi was appointed on the same day to succeed her[115](index=115&type=chunk)[118](index=118&type=chunk) Other Information [PURCHASE, SALE OR REDEMPTION OF THE LISTED SECURITIES OF THE COMPANY](index=25&type=section&id=PURCHASE%2C%20SALE%20OR%20REDEMPTION%20OF%20THE%20LISTED%20SECURITIES%20OF%20THE%20COMPANY) Neither the company nor its subsidiaries purchased, sold, or redeemed any of its listed securities during the six months ended June 30, 2025, indicating no share buybacks or issuances - Neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities during the six months ended June 30, 2025[121](index=121&type=chunk)[124](index=124&type=chunk) [INTERIM DIVIDEND](index=25&type=section&id=INTERIM%20DIVIDEND) No interim dividend was declared for the six months ended June 30, 2025, consistent with the prior year, indicating a focus on reinvestment - No interim dividend was declared for the six months ended June 30, 2025 (2024: nil)[122](index=122&type=chunk)[125](index=125&type=chunk) [DIRECTORS' AND CHIEF EXECUTIVES' INTERESTS IN SHARES](index=25&type=section&id=DIRECTORS'%20AND%20CHIEF%20EXECUTIVES'%20INTERESTS%20IN%20SHARES) As of June 30, 2025, no directors, chief executives, or their close associates held any disclosable interests or short positions in the company's shares, underlying shares, or debentures under the SFO - As of June 30, 2025, no directors, chief executives, or their close associates held any interests or short positions in the company's shares, underlying shares, or debentures that are required to be notified to the company and the Stock Exchange[123](index=123&type=chunk)[126](index=126&type=chunk) [SHARE AWARDS](index=26&type=section&id=SHARE%20AWARDS) The company adopted two share award schemes on May 25, 2022, to recognize contributions, incentivize, and retain key management and attract talent, with no awards granted during the six months ended June 30, 2025 - The company adopted two share award schemes (Scheme I and Scheme II) on May 25, 2022, aiming to recognize contributions, incentivize, retain key management, and attract talent[128](index=128&type=chunk)[129](index=129&type=chunk)[130](index=130&type=chunk)[131](index=131&type=chunk) - No share awards were granted under the share award schemes for the six months ended June 30, 2025[132](index=132&type=chunk) - The maximum number of shares available for grant under the share award schemes is **60,006,027 shares**[132](index=132&type=chunk) [DIRECTORS' RIGHTS TO ACQUIRE SHARES OR DEBENTURES](index=27&type=section&id=DIRECTORS'%20RIGHTS%20TO%20ACQUIRE%20SHARES%20OR%20DEBENTURES) During the review period, neither the company nor its subsidiaries participated in any arrangements enabling directors to acquire shares or debentures, nor were any such rights granted or exercised by directors or their associates - During the review period, neither the company nor any of its subsidiaries was a party to any arrangement that would enable the directors to acquire benefits by means of the acquisition of shares or debentures of the company or any other body corporate[134](index=134&type=chunk)[136](index=136&type=chunk) [SUBSTANTIAL SHAREHOLDERS](index=28&type=section&id=SUBSTANTIAL%20SHAREHOLDERS) As of June 30, 2025, the report discloses substantial shareholders and their long positions in the company's shares and underlying shares, including Eastern Media International Corporation, Mr. Chao Shih-Heng, Dr. Tsai Yen-Yu, and her spouse Mr. Lee Ming-Ta, detailing their respective shareholding percentages Substantial Shareholders' Long Positions in the Company's Shares and Underlying Shares (June 30, 2025) | Substantial Shareholder Name | Nature of Interest | Number of Ordinary Shares Beneficially Held | Approximate Percentage of the Company's Issued Share Capital | | :--- | :--- | :--- | :--- | | Eastern Media International Corporation | Interest in controlled corporation | 600,630,280(L) | 30.00% | | Far Eastern Silo & Shipping (Panama) S.A. | Beneficial owner | 600,630,280(L) | 30.00% | | CHAO Shih-Heng | Interest in controlled corporation | 455,630,196(L) | 22.76% | | Good Titanic Limited | Interest in controlled corporation | 455,630,196(L) | 22.76% | | Insbro Holdings Limited | Beneficial owner | 455,630,196(L) | 22.76% | | TSAI Yen-Yu | Interest in controlled corporation | 445,315,083(L) | 22.24% | | LEE Ming-Ta | Spouse's interest | 445,315,083(L) | 22.24% | | Next Focus Holdings Limited | Beneficial owner/Interest in controlled corporation | 445,315,083(L) | 22.24% | | Starsign International Limited | Interest in controlled corporation | 292,958,524(L) | 14.63% | | Standard Cosmos Limited | Beneficial owner/Interest in controlled corporation | 292,958,524(L) | 14.63% | Independent Review Report [INTRODUCTION](index=30&type=section&id=INTRODUCTION) RSM Hong Kong reviewed the company's interim financial information for the six months ended June 30, 2025, including the condensed consolidated statement of financial position and profit or loss, prepared by the directors - RSM Hong Kong has reviewed the company's interim financial information for the six months ended June 30, 2025, including the condensed consolidated statement of financial position, statement of profit or loss and other comprehensive income, and other related statements[145](index=145&type=chunk)[146](index=146&type=chunk) [SCOPE OF REVIEW](index=31&type=section&id=SCOPE%20OF%20REVIEW) The review was conducted in accordance with Hong Kong Standard on Review Engagements 2410, which is less extensive than an audit, thus no audit opinion is expressed, only a review conclusion - The review was conducted in accordance with Hong Kong Standard on Review Engagements 2410 issued by the Hong Kong Institute of Certified Public Accountants, which is less extensive than an audit, and therefore no audit opinion is expressed[147](index=147&type=chunk)[149](index=149&type=chunk) [CONCLUSION](index=31&type=section&id=CONCLUSION) Based on the review, no matters were identified that suggest the interim financial information was not prepared in all material respects in accordance with Hong Kong Accounting Standard 34, confirming the reliability of the financial report - Based on the review, nothing has come to the reviewer's attention that causes them to believe the interim financial information is not prepared, in all material respects, in accordance with Hong Kong Accounting Standard 34[148](index=148&type=chunk)[150](index=150&type=chunk) Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income [Financial Performance Overview](index=32&type=section&id=Financial%20Performance%20Overview) For the six months ended June 30, 2025, the company achieved revenue of HK$264.5 million and gross profit of HK$147.2 million, turning a prior-year loss into a profit for the period of HK$10.9 million, with total comprehensive income reaching HK$37.1 million Summary of Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the six months ended June 30, 2025) | Metric | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | Revenue | 264,504 | 156,749 | | Cost of sales | (117,335) | (63,419) | | Gross profit | 147,169 | 93,330 | | Other income and gains | 2,020 | 3,810 | | Distribution and selling expenses | (92,815) | (82,045) | | Administrative expenses | (33,890) | (38,855) | | Other expenses and losses | (6,414) | (979) | | Operating profit/(loss) | 16,156 | (24,579) | | Profit/(loss) before tax | 12,456 | (28,673) | | Income tax expense | (1,526) | (1,781) | | Profit/(loss) for the period | 10,930 | (30,454) | | Exchange differences arising on translation of foreign operations | 26,150 | (17,686) | | Total comprehensive income for the period | 37,080 | (48,140) | | Basic earnings/(loss) per share | 0.55 HK cents | (1.52) HK cents | Condensed Consolidated Statement of Financial Position [Assets and Liabilities Overview](index=34&type=section&id=Assets%20and%20Liabilities%20Overview) As of June 30, 2025, the Group's total assets less current liabilities were HK$627.6 million, with net assets of HK$484.7 million, reflecting an expanded asset base and changes in working capital, primarily driven by property, plant and equipment, investment properties, and increased trade and other receivables Summary of Condensed Consolidated Statement of Financial Position (As of June 30, 2025) | Metric | June 30, 2025 (thousand HKD) | December 31, 2024 (thousand HKD) | | :--- | :--- | :--- | | Property, plant and equipment | 268,422 | 239,614 | | Investment properties | 196,719 | 190,021 | | Right-of-use assets | 36,278 | 34,871 | | Investment in an associate | 1,569 | – | | Deferred tax assets | 21,134 | 18,123 | | **Total non-current assets** | **525,872** | **484,172** | | Inventories | 92,487 | 81,204 | | Trade and other receivables | 135,895 | 89,614 | | Bank and cash balances | 97,163 | 116,507 | | **Total current assets** | **325,854** | **288,759** | | Trade and other payables | 125,165 | 93,452 | | Borrowings (current) | 72,475 | 68,209 | | Lease liabilities (current) | 6,899 | 6,090 | | **Total current liabilities** | **224,161** | **187,508** | | **Net current assets** | **101,693** | **101,251** | | Borrowings (non-current) | 128,420 | 124,043 | | Lease liabilities (non-current) | 14,472 | 13,787 | | **Total non-current liabilities** | **142,892** | **137,830** | | **Net assets** | **484,673** | **447,593** | | **Total equity** | **484,673** | **447,593** | Condensed Consolidated Statement of Changes in Equity [Equity Movement Overview](index=36&type=section&id=Equity%20Movement%20Overview) For the six months ended June 30, 2025, total equity attributable to owners increased from HK$447.6 million to HK$484.7 million, primarily due to total comprehensive income of HK$37.1 million, with a significant contribution from exchange reserve increases Summary of Condensed Consolidated Statement of Changes in Equity (For the six months ended June 30, 2025) | Metric | January 1, 2025 (thousand HKD) | Total Comprehensive Income for the Period (thousand HKD) | June 30, 2025 (thousand HKD) | | :--- | :--- | :--- | :--- | | Share capital | 200,210 | – | 200,210 | | Capital surplus | 42,554 | – | 42,554 | | Share premium | 29,004 | – | 29,004 | | Statutory reserve | 180,448 | – | 180,448 | | Exchange reserve | 27,136 | 26,150 | 53,286 | | Property revaluation reserve | 29,157 | – | 29,157 | | Remeasurement of defined benefit retirement plan | 3,578 | – | 3,578 | | Retained profits | (64,494) | 10,930 | (53,564) | | **Total** | **447,593** | **37,080** | **484,673** | Condensed Consolidated Statement of Cash Flows [Cash Flow Activities Overview](index=37&type=section&id=Cash%20Flow%20Activities%20Overview) For the six months ended June 30, 2025, net cash used in operating activities significantly decreased to HK$14.0 million, indicating improved operational efficiency, while investment and financing activities remained cash outflows, with a positive impact from exchange rate changes Summary of Condensed Consolidated Statement of Cash Flows (For the six months ended June 30, 2025) | Cash Flow Category | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | Net cash used in operating activities | (13,952) | (26,532) | | Net cash used in investing activities | (21,099) | (16,781) | | Net cash used in financing activities | (4,070) | (11,585) | | Net decrease in cash and cash equivalents | (39,121) | (54,898) | | Effect of foreign exchange rate changes | 23,614 | (8,341) | | Cash and cash equivalents at January 1 | 109,038 | 158,743 | | Cash and cash equivalents at June 30 | 93,531 | 95,504 | Notes to the Condensed Financial Statements [BASIS OF PREPARATION](index=39&type=section&id=BASIS%20OF%20PREPARATION) The condensed financial statements are prepared in accordance with HKAS 34 "Interim Financial Reporting" and Listing Rules, consistent with 2024 annual financial statements, ensuring reporting consistency and compliance - The condensed financial statements are prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" issued by the HKICPA and the applicable disclosure requirements of the Listing Rules[164](index=164&type=chunk)[168](index=168&type=chunk) - The accounting policies and methods of computation used in the preparation of these condensed financial statements are consistent with those adopted in the annual financial statements for the year ended December 31, 2024[165](index=165&type=chunk)[168](index=168&type=chunk) [ADOPTION OF NEW AND REVISED HONG KONG FINANCIAL REPORTING STANDARDS](index=39&type=section&id=ADOPTION%20OF%20NEW%20AND%20REVISED%20HONG%20KONG%20FINANCIAL%20REPORTING%20STANDARDS) The Group first applied amendments to HKAS 21 "Lack of Exchangeability" from January 1, 2025, without changing accounting policies or making retrospective adjustments, indicating limited impact on current financial reporting - The Group has first applied the amendments to Hong Kong Accounting Standard 21 "Lack of Exchangeability" from January 1, 2025[166](index=166&type=chunk)[169](index=169&type=chunk) - The Group has not changed its accounting policies or made retrospective adjustments due to the aforementioned amended standards[166](index=166&type=chunk)[169](index=169&type=chunk) [FAIR VALUE MEASUREMENTS OF FINANCIAL INSTRUMENTS](index=39&type=section&id=FAIR%20VALUE%20MEASUREMENTS%20OF%20FINANCIAL%20INSTRUMENTS) As of June 30, 2025, and December 31, 2024, no financial assets or liabilities were measured at fair value, with their carrying amounts approximating fair values, indicating stable valuation of the company's financial instruments - As of June 30, 2025, and December 31, 2024, no financial assets or financial liabilities were measured at fair value[167](index=167&type=chunk)[170](index=170&type=chunk) - The carrying amounts of financial assets and financial liabilities reflected in the condensed consolidated statement of financial position approximate their respective fair values[167](index=167&type=chunk)[170](index=170&type=chunk) [SEGMENT INFORMATION](index=40&type=section&id=SEGMENT%20INFORMATION) The report segments the Group's revenue and results by geography, with mainland China contributing most revenue and segment profit, and non-current assets primarily concentrated in mainland China and Taiwan Revenue and Segment Profit/(Loss) by Geographical Segment (For the period ended June 30, 2025) | Region | Revenue from External Customers (thousand HKD) | Segment Profit/(Loss) (thousand HKD) | | :--- | :--- | :--- | | Mainland China | 216,872 | 15,162 | | Taiwan | 45,943 | 5,474 | | Others | 1,689 | (5,077) | | **Total** | **264,504** | **15,559** | | Unallocated corporate expenses | | (3,406) | | Unallocated income | | 303 | | **Consolidated loss before tax** | | **12,456** | Non-current Assets by Location of Assets (As of June 30, 2025) | Region | June 30, 2025 (thousand HKD) | December 31, 2024 (thousand HKD) | | :--- | :--- | :--- | | Mainland China | 448,055 | 411,086 | | Taiwan | 56,683 | 52,137 | | Others | – | 2,826 | | **Consolidated Total** | **504,738** | **466,049** | [REVENUE](index=42&type=section&id=REVENUE) For the six months ended June 30, 2025, total revenue was HK$264.5 million, predominantly from product sales (HK$262.6 million), with service income of HK$1.9 million, primarily from mainland China and recognized at a point in time Revenue by Major Product or Service Category (For the six months ended June 30, 2025) | Product/Service | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | Product sales | 262,625 | 155,626 | | Service income | 1,879 | 1,123 | | **Total** | **264,504** | **156,749** | Revenue by Major Geographical Market and Timing of Revenue Recognition (For the six months ended June 30, 2025) | Market/Timing | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | Mainland China | 216,872 | 107,833 | | Taiwan | 45,943 | 45,953 | | Others | 1,689 | 2,963 | | **Total** | **264,504** | **156,749** | | At a point in time | 262,625 | 155,626 | | Over time | 1,879 | 1,123 | - As of June 30, 2025, the transaction price allocated to remaining performance obligations was **HK$18,656 thousand**, expected to be recognized as revenue within one year[189](index=189&type=chunk) [PROFIT/(LOSS) FOR THE PERIOD](index=44&type=section&id=PROFIT%2F(LOSS)%20FOR%20THE%20PERIOD) For the six months ended June 30, 2025, the Group achieved a profit of HK$10.9 million, a significant improvement from the prior year's loss of HK$30.5 million, reflecting efforts in cost control and revenue growth Key Components of Profit/(Loss) for the Period (For the six months ended June 30, 2025) | Item | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | Depreciation of property, plant and equipment | 14,445 | 11,078 | | Depreciation of right-of-use assets | 3,847 | 2,308 | | Total staff costs (including directors' emoluments) | 74,930 | 63,978 | | Loss on disposal of property, plant and equipment | 1,304 | 35 | | Provision for obsolete inventories | 1,245 | 512 | | Cost of inventories recognized as cost of sales | 102,184 | 53,665 | | Net exchange loss/(gain) | 4,178 | (1,106) | | Research and development expenses | 3,269 | 2,419 | [INCOME TAX EXPENSE](index=45&type=section&id=INCOME%20TAX%20EXPENSE) For the six months ended June 30, 2025, total income tax expense was HK$1.5 million, primarily comprising Taiwan corporate income tax, Hong Kong profits tax, and withholding tax, reflecting varying tax burdens across jurisdictions Breakdown of Income Tax Expense (For the six months ended June 30, 2025) | Tax Category | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | China corporate income tax | 78 | – | | Taiwan corporate income tax | 1,314 | 793 | | Hong Kong profits tax and others | 947 | 797 | | Withholding tax | 1,231 | 88 | | Deferred tax | (2,044) | 103 | | **Total** | **1,526** | **1,781** | - China corporate income tax is accrued at a rate of **25%**, and Taiwan corporate income tax at a rate of **20%**[194](index=194&type=chunk) - Under Hong Kong's two-tiered profits tax regime, the first **HK$2 million of assessable profits** is taxed at **8.25%**, with the remainder at **16.5%**[196](index=196&type=chunk) [DIVIDENDS](index=46&type=section&id=DIVIDENDS) No dividends were paid or proposed for the period ended June 30, 2025, consistent with the prior year, indicating the company's strategy to reinvest earnings into business development - No dividends were paid or proposed for the period ended June 30, 2025 (2024: HK$nil)[198](index=198&type=chunk)[200](index=200&type=chunk) [EARNINGS/(LOSS) PER SHARE](index=47&type=section&id=EARNINGS%2F(LOSS)%20PER%20SHARE) For the six months ended June 30, 2025, basic earnings per share were **0.55 HK cents**, a significant improvement from the prior year's loss of **1.52 HK cents**, reflecting enhanced profitability - Basic earnings per share were **0.55 HK cents** (2024: loss of **1.52 HK cents**), calculated based on profit for the period attributable to owners of approximately **HK$10.93 million** and a weighted average of approximately **2,002,100,932 ordinary shares** in issue[201](index=201&type=chunk)[205](index=205&type=chunk)[154](index=154&type=chunk) - Diluted earnings/(loss) per share are not presented as the company had no potential ordinary shares outstanding[202](index=202&type=chunk)[208](index=208&type=chunk) [PROPERTY, PLANT AND EQUIPMENT](index=47&type=section&id=PROPERTY%2C%20PLANT%20AND%20EQUIPMENT) For the six months ended June 30, 2025, the Group acquired approximately **HK$33.2 million** in property, plant, and equipment, demonstrating continuous capital investment to support business expansion and operational needs - For the six months ended June 30, 2025, the Group acquired approximately **HK$33.2 million** (2024: HK$22.3 million) of property, plant and equipment[203](index=203&type=chunk)[208](index=208&type=chunk) [RIGHT-OF-USE ASSETS](index=47&type=section&id=RIGHT-OF-USE%20ASSETS) For the six months ended June 30, 2025, the Group added **HK$4.6 million** in right-of-use assets due to new lease agreements, primarily for office premises, reflecting increased leasing activities - For the six months ended June 30, 2025, the Group added **HK$4.6 million** (2024: HK$1.1 million) in right-of-use assets due to new lease agreements for office premises with lease terms of 2 to 5 years[204](index=204&type=chunk)[206](index=206&type=chunk) [TRADE AND OTHER RECEIVABLES](index=48&type=section&id=TRADE%20AND%20OTHER%20RECEIVABLES) As of June 30, 2025, net trade receivables increased to **HK$107.5 million** from **HK$68.2 million** at year-end 2024, reflecting sales growth and credit policies, with average credit terms of 30 to 150 days, and up to 3 years for some beauty equipment sales Trade and Other Receivables (As of June 30, 2025) | Item | June 30, 2025 (thousand HKD) | December 31, 2024 (thousand HKD) | | :--- | :--- | :--- | | Trade receivables | 108,415 | 69,076 | | Less: provision for credit losses | (866) | (904) | | **Net trade receivables** | **107,549** | **68,172** | | Prepayments | 20,704 | 14,485 | | Deposits | 3,894 | 2,931 | | Other receivables | 3,748 | 4,026 | | **Total** | **135,895** | **89,614** | - The Group generally grants an average credit period of **30 to 150 days** to trade customers, with credit sales of certain beauty equipment extending credit periods of **12 months to 3 years**[211](index=211&type=chunk)[214](index=214&type=chunk) Ageing Analysis of Trade Receivables (As of June 30, 2025) | Ageing | June 30, 2025 (thousand HKD) | December 31, 2024 (thousand HKD) | | :--- | :--- | :--- | | Within 30 days | 22,748 | 17,337 | | 31 to 150 days | 69,702 | 33,627 | | Over 150 days | 15,099 | 17,208 | | **Total** | **107,549** | **68,172** | [TRADE AND OTHER PAYABLES](index=49&type=section&id=TRADE%20AND%20OTHER%20PAYABLES) As of June 30, 2025, total trade and other payables increased to **HK$125.2 million** from **HK$93.5 million** at year-end 2024, primarily due to increased trade payables and accrued expenses, reflecting expanded business activities Trade and Other Payables (As of June 30, 2025) | Item | June 30, 2025 (thousand HKD) | December 31, 2024 (thousand HKD) | | :--- | :--- | :--- | | Trade payables | 43,376 | 25,604 | | Franchisee deposits | 20,350 | 26,207 | | Other taxes payable | 4,934 | 2,791 | | Accrued expenses | 35,150 | 32,190 | | Payables for property, plant and equipment | 10,968 | – | | Other payables | 10,387 | 6,660 | | **Total** | **125,165** | **93,452** | Ageing Analysis of Trade Payables (As of June 30, 2025) | Ageing | June 30, 2025 (thousand HKD) | December 31, 2024 (thousand HKD) | | :--- | :--- | :--- | | Within 90 days | 40,201 | 25,178 | | 91 to 365 days | 3,175 | 426 | | **Total** | **43,376** | **25,604** | [BORROWINGS](index=50&type=section&id=BORROWINGS) As of June 30, 2025, the Group's total bank borrowings were **HK$200.9 million**, with **HK$72.5 million** as current liabilities and **HK$128.4 million** as non-current liabilities, indicating reliance on external financing and its debt structure Bank Borrowings Analysis (As of June 30, 2025) | Term | June 30, 2025 (thousand HKD) | December 31, 2024 (thousand HKD) | | :--- | :--- | :--- | | Within one year | 57,339 | 57,215 | | Between one and two years | 12,035 | 11,693 | | Between two and five years | 116,385 | 112,350 | | **Subtotal** | **185,759** | **181,258** | | Portion of bank loans repayable within one year and containing a repayment on demand clause | 15,136 | 10,994 | | **Total** | **200,895** | **192,252** | | Less: Amount repayable within 12 months | (72,475) | (68,209) | | **Amount repayable after 12 months** | **128,420** | **124,043** | [SHARE CAPITAL](index=51&type=section&id=SHARE%20CAPITAL) As of June 30, 2025, the company's authorized share capital was **HK$400.0 million** (4,000,000,000 ordinary shares of HK$0.1 each), with issued and fully paid share capital of **HK$200.2 million** (2,002,100,932 shares), maintaining a stable capital structure Share Capital Structure (As of June 30, 2025) | Category | Number of Shares | Share Par Value (thousand HKD) | | :--- | :--- | :--- | | Authorized ordinary shares (HK$0.1 each) | 4,000,000,000 | 400,000 | | Issued and fully paid ordinary shares (HK$0.1 each) | 2,002,100,932 | 200,210 | [RELATED PARTY TRANSACTIONS](index=52&type=section&id=RELATED%20PARTY%20TRANSACTIONS) For the six months ended June 30, 2025, the Group engaged in various related party transactions, including sales to Eastern Media International Corporation and Shanghai Fanity Health Technology Co., Ltd., and advertising expenses paid to Eastern New Media Holdings Co., Ltd., all conducted on normal commercial terms Summary of Related Party Transactions (For the six months ended June 30, 2025) | Related Party Name | Nature of Transaction | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | :--- | | Eastern Media International Corporation | Sales of goods | 1,480 | – | | Eastern New Media Holdings Co., Ltd. | Advertising expenses | 400 | 616 | | Shanghai Fanity Health Technology Co., Ltd. | Sales of goods | 2,553 | – | - Amounts payable to a related party (Eastern New Media) were unsecured, interest-free, and generally had a credit period of **120 days** from invoice date, totaling **HK$207 thousand** as of June 30, 2025[225](index=225&type=chunk) - Remuneration for directors and other key management personnel during the period was **HK$3,931 thousand** (2024: HK$3,068 thousand)[225](index=225&type=chunk) [CONTINGENT LIABILITIES](index=53&type=section&id=CONTINGENT%20LIABILITIES) As of June 30, 2025, the Group had no significant contingent liabilities, indicating a low level of potential financial risk - As of June 30, 2025, the Group had no significant contingent liabilities (December 31, 2024: nil)[225](index=225&type=chunk)[227](index=227&type=chunk) [CAPITAL COMMITMENTS](index=54&type=section&id=CAPITAL%20COMMITMENTS) As of the reporting period end, contracted but unprovided capital commitments primarily for property, plant, and equipment amounted to **HK$32.1 million**, reflecting future investment plans in fixed assets Capital Commitments (As of June 30, 2025) | Item | June 30, 2025 (thousand HKD) | December 31, 2024 (thousand HKD) | | :--- | :--- | :--- | | Property, plant and equipment | 32,117 | 8,008 | [APPROVAL OF FINANCIAL STATEMENTS](index=54&type=section&id=APPROVAL%20OF%20FINANCIAL%20STATEMENTS) The interim financial statements were approved and authorized for issue by the Board of Directors on August 5, 2025, confirming review and endorsement by the company's top management - The interim financial statements were approved and authorized for issue by the Board of Directors on August 5, 2025[230](index=230&type=chunk)[231](index=231&type=chunk)

[Interim Results Announcement and Proposals](index=1&type=section&id=Interim%20Results%20Announcement%20and%20Proposals) This section covers the unaudited interim results, proposed adoption of a new share option scheme, amendments to Share Award Scheme II, and the current composition of the Board of Directors [Interim Results Announcement](index=1&type=section&id=Interim%20Results%20Announcement) Natural Beauty Bio-Technology Limited is pleased to announce its unaudited consolidated results for the six months ended June 30, 2025, with the printed interim report to be dispatched in August 2025 and available on the HKEX and company website - The company announced its unaudited consolidated results for the six months ended June 30, 2025[2](index=2&type=chunk) - The printed interim report will be dispatched in August 2025 and available on the HKEX and company website[2](index=2&type=chunk) [Proposed Adoption of 2025 Share Option Scheme](index=2&type=section&id=Proposed%20Adoption%20of%202025%20Share%20Option%20Scheme) To continue the share option scheme and incentivize eligible individuals contributing to the Group, the Board proposes adopting a new 2025 Share Option Scheme with a ten-year validity, subject to EGM approval and HKEX Listing Committee consent for listing and trading of option shares - The Board proposes adopting a new 2025 Share Option Scheme with a **ten-year validity** to incentivize and reward contributors[3](index=3&type=chunk) - The scheme's effectiveness is subject to shareholder approval by ordinary resolution at an EGM and HKEX Listing Committee approval for listing and trading of option shares[4](index=4&type=chunk) [Proposed Amendments to Share Award Scheme II](index=2&type=section&id=Proposed%20Amendments%20to%20Share%20Award%20Scheme%20II) The Board proposes amending Share Award Scheme II to allow new share issuance for new grants and expand eligible participants to include company distributors, subject to EGM approval and HKEX Listing Committee consent for listing and trading of award shares - Amendments to Share Award Scheme II are proposed to allow new share issuance and expand eligible participants to include company distributors[5](index=5&type=chunk) - The amendments' effectiveness is subject to shareholder approval by ordinary resolution at an EGM and HKEX Listing Committee approval for listing and trading of award shares[5](index=5&type=chunk) [Board of Directors Composition](index=3&type=section&id=Board%20of%20Directors%20Composition) As of August 5, 2025, the Board comprises three executive directors (including Dr. Ray Chen, Chairman), two non-executive directors, and three independent non-executive directors - The Board of Directors consists of Dr. Ray Chen (Chairman), Mr. Lin Chia-Wei, Ms. Lin Yen-Ling (Executive Directors); Ms. Lin Shu-Hua, Mr. Chen Shou-Huang (Non-Executive Directors); and Mr. Chen Ruey-Long, Mr. Lin Tsang-Hsiang, Mr. Yang Shih-Chien (Independent Non-Executive Directors)[7](index=7&type=chunk) [Corporate Information](index=5&type=section&id=Corporate%20Information) This section details the company's board and committee structures, key personnel changes, and essential corporate information including registered office, auditors, legal advisors, and banking relationships [Board and Committees](index=5&type=section&id=Board%20and%20Committees) As of August 5, 2025, the company's Board comprises executive, non-executive, and independent non-executive directors, with established Audit, Remuneration, Executive, and Nomination Committees, all chaired by independent non-executive directors except for the Executive Committee - Board members include Executive Directors Dr. Ray Chen (Chairman), Mr. Lin Chia-Wei, Ms. Lin Yen-Ling; Non-Executive Directors Ms. Lin Shu-Hua, Mr. Chen Shou-Huang; and Independent Non-Executive Directors Mr. Chen Ruey-Long, Mr. Yang Shih-Chien, Mr. Lin Tsang-Hsiang[9](index=9&type=chunk) - The Audit Committee is chaired by Mr. Chen Ruey-Long, the Remuneration Committee by Mr. Lin Tsang-Hsiang, the Nomination Committee by Mr. Yang Shih-Chien, and the Executive Committee by Dr. Ray Chen[11](index=11&type=chunk)[12](index=12&type=chunk) [Key Personnel Changes](index=5&type=section&id=Key%20Personnel%20Changes) Ms. Kuo Yen-Ting resigned as authorized representative and company secretary on August 5, 2025, with Ms. Li Mei-Yi appointed as her successor on the same day - Ms. Kuo Yen-Ting resigned as authorized representative and company secretary on August 5, 2025[10](index=10&type=chunk) - Ms. Li Mei-Yi was appointed as authorized representative and company secretary on August 5, 2025[10](index=10&type=chunk) [Company Details and Contacts](index=6&type=section&id=Company%20Details%20and%20Contacts) The company's registered office is in the Cayman Islands, with its principal place of business in Hong Kong at Lee Garden One, Causeway Bay. RSM Hong Kong is the auditor, and Jingtian & Gongcheng is the Hong Kong legal advisor. The principal share registrar is in the Cayman Islands, with Hong Kong branch being Hong Kong Central Securities Registrars Limited. The company's stock code is 00157, and its principal bankers include HSBC, King's Town Bank, CTBC Bank, China Merchants Bank, Bank of Communications, and E.SUN Bank - The registered office is in the Cayman Islands, with the principal place of business in Hong Kong at Lee Garden One, Hysan Avenue, Causeway Bay[13](index=13&type=chunk)[14](index=14&type=chunk) - RSM Hong Kong is the auditor, and Jingtian & Gongcheng is the Hong Kong legal advisor[14](index=14&type=chunk)[15](index=15&type=chunk) - The company's stock code is **00157**, and its principal bankers include HSBC, King's Town Bank, CTBC Bank, China Merchants Bank, Bank of Communications, and E.SUN Bank[17](index=17&type=chunk)[18](index=18&type=chunk)[19](index=19&type=chunk) [Management Discussion and Analysis](index=9&type=section&id=Management%20Discussion%20and%20Analysis) This section provides a comprehensive review of the Group's financial performance, business operations, and future outlook for 2025, highlighting key market strategies and operational achievements [Financial Review](index=9&type=section&id=Financial%20Review) For the six months ended June 30, 2025, the Group's turnover increased by 68.7% year-on-year to HK$264.5 million, driven by strong growth in the PRC market, achieving a profit before tax of HK$12.5 million from a loss, while maintaining a solid liquidity position despite a slight decrease in gross profit margin due to product mix changes 2025 H1 Turnover Overview | Metric | 2025 H1 (HK$ thousand) | 2024 H1 (HK$ thousand) | Change (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Total Turnover | 264,504 | 156,749 | 107,755 | 68.7% | | PRC Turnover | 216,872 | 107,833 | 109,039 | 101.1% | | Taiwan Turnover | 45,943 | 45,953 | (10) | 0.0% | | Other Regions Turnover | 1,689 | 2,963 | (1,274) | -43.0% | - The Group's overall gross profit margin decreased from **59.5% in 2024 H1** to **55.6% in 2025 H1**, primarily due to changes in the revenue mix from product bundle sales in the PRC market[25](index=25&type=chunk)[26](index=26&type=chunk) - Profit before tax turned from a **loss of HK$28.7 million in 2024 H1** to a **profit of HK$12.5 million in 2025 H1**, representing a **143.6% increase**[42](index=42&type=chunk)[47](index=47&type=chunk) - Profit for the period turned from a **loss of HK$30.5 million in 2024 H1** to a **profit of HK$10.9 million in 2025 H1**, representing a **135.7% increase**[43](index=43&type=chunk)[48](index=48&type=chunk) [Turnover by Geographical Region](index=9&type=section&id=Turnover%20by%20Geographical%20Region) In 2025 H1, the Group's total turnover increased by 68.7% year-on-year, with the PRC market turnover growing by 101.1% to HK$216.9 million, accounting for 82.0% of total turnover; Taiwan market turnover remained largely flat; and sales in other regions decreased by 43.0% 2025 H1 Turnover by Geographical Region | Region | 2025 H1 (HK$ thousand) | % of Total | 2024 H1 (HK$ thousand) | % of Total | Change (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | PRC | 216,872 | 82.0% | 107,833 | 68.8% | 109,039 | 101.1% | | Taiwan | 45,943 | 17.4% | 45,953 | 29.3% | (10) | 0.0% | | Others | 1,689 | 0.6% | 2,963 | 1.9% | (1,274) | -43.0% | | Total | 264,504 | 100% | 156,749 | 100.0% | 107,755 | 68.7% | [Turnover by Activities](index=10&type=section&id=Turnover%20by%20Activities) In 2025 H1, product sales increased by 68.8% year-on-year to HK$262.6 million, accounting for 99.3% of total revenue, primarily driven by a 100.9% growth in product sales in the PRC market, while service income grew by 67.3% to HK$1.9 million 2025 H1 Turnover by Activities | Activity | 2025 H1 (HK$ thousand) | % of Total | 2024 H1 (HK$ thousand) | % of Total | Change (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Products | 262,625 | 99.3% | 155,626 | 99.3% | 106,999 | 68.8% | | Services | 1,879 | 0.7% | 1,123 | 0.7% | 756 | 67.3% | | Total | 264,504 | 100% | 156,749 | 100.0% | 107,755 | 68.7% | - The increase in product sales was primarily due to a **100.9% growth** in turnover for this segment in the PRC market, reaching **HK$215.2 million**[29](index=29&type=chunk)[32](index=32&type=chunk) - Service income primarily derived from self-operated spa services, training, and other services, with the Group owning **six self-operated spa centers** in the PRC[30](index=30&type=chunk)[33](index=33&type=chunk) [Other Income and Other Gains](index=12&type=section&id=Other%20Income%20and%20Other%20Gains) In 2025 H1, other income and other gains decreased by 47.4% year-on-year to HK$2 million, primarily comprising rental income, government grants, and interest income 2025 H1 Other Income and Other Gains | Metric | 2025 H1 (HK$ thousand) | 2024 H1 (HK$ thousand) | Change (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Other Income and Gains | 2,000 | 3,800 | (1,800) | -47.4% | - Key components include rental income of **HK$0.6 million**, government grants of **HK$0.4 million**, and interest income of **HK$0.3 million**[34](index=34&type=chunk)[38](index=38&type=chunk) [Selling and Administrative Expenses](index=12&type=section&id=Selling%20and%20Administrative%20Expenses) In 2025 H1, distribution and selling expenses as a percentage of turnover decreased to 35.1%, with the total increasing by HK$10.8 million to HK$92.8 million, mainly due to higher wages and travel expenses, while total administrative expenses decreased by 12.9% year-on-year to HK$33.9 million - Distribution and selling expenses as a percentage of turnover decreased from **52.3% in 2024 H1** to **35.1% in 2025 H1**[35](index=35&type=chunk)[39](index=39&type=chunk) - Distribution and selling expenses increased by **HK$10.8 million** to **HK$92.8 million**, primarily due to a **HK$9.1 million increase in wages** and a **HK$1.3 million increase in travel expenses**[35](index=35&type=chunk)[39](index=39&type=chunk) - Total administrative expenses decreased by **HK$5 million** or **12.9%** to **HK$33.9 million**, mainly comprising staff costs and retirement benefits, depreciation expenses, consulting and professional fees, and research and development expenses[37](index=37&type=chunk)[40](index=40&type=chunk) [Other Expenses and Other Losses](index=13&type=section&id=Other%20Expenses%20and%20Other%20Losses) In 2025 H1, other expenses and other losses increased by HK$5.4 million year-on-year to HK$6.4 million, primarily including exchange losses of HK$4.2 million and losses on disposal of fixed assets of HK$1.3 million 2025 H1 Other Expenses and Other Losses | Metric | 2025 H1 (HK$ thousand) | 2024 H1 (HK$ thousand) | Change (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Other Expenses and Losses | 6,400 | 1,000 | 5,400 | 540.0% | | Of which: Exchange losses | 4,200 | - | - | - | | Loss on disposal of fixed assets | 1,300 | - | - | - | [Liquidity and Financial Resources](index=13&type=section&id=Liquidity%20and%20Financial%20Resources) As of June 30, 2025, the Group's cash used in operating activities was approximately HK$14 million, with cash and cash equivalents at approximately HK$93.5 million, maintaining a solid liquidity position with a gearing ratio of 41.4% and a current ratio of 1.45 times - Cash used in operating activities in 2025 H1 was approximately **HK$14 million**, an improvement from **HK$26.5 million in 2024 H1**[44](index=44&type=chunk)[49](index=49&type=chunk) Liquidity and Financial Resources Metrics | Metric | June 30, 2025 (HK$ thousand) | Dec 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Cash and Cash Equivalents | 93,500 | 109,000 | | External Bank Borrowings | 200,900 | 192,200 | | Gearing Ratio | 41.4% | 43.0% | | Current Ratio | 1.45x | 1.54x | - The Group has no significant contingent liabilities and maintains a **solid liquidity position**[45](index=45&type=chunk)[49](index=49&type=chunk) [Treasury Policies and Exchange Rate Exposure](index=14&type=section&id=Treasury%20Policies%20and%20Exchange%20Rate%20Exposure) The Group's majority of revenue is denominated in RMB and NTD. As of June 30, 2025, approximately 29.4% of bank balances and cash were in RMB and 52.3% in NTD, with the Group adopting prudent foreign exchange risk management policies and using derivative financial instruments for hedging when necessary - The Group's majority of revenue is denominated in **RMB and NTD**, with principal operations in the PRC and Taiwan[50](index=50&type=chunk)[51](index=51&type=chunk) Bank Balances and Cash Currency Composition as of June 30, 2025 | Currency | % of Total as of June 30, 2025 | % of Total as of Dec 31, 2024 | | :--- | :--- | :--- | | RMB | 29.4% | 46.0% | | NTD | 52.3% | 38.2% | | Others (USD, HKD, MYR) | 18.3% | 15.8% | - The Group regularly reviews foreign exchange risks and uses derivative financial instruments for hedging when necessary[50](index=50&type=chunk)[51](index=51&type=chunk) [Business Review](index=14&type=section&id=Business%20Review) In 2025 H1, the Group achieved strong growth in the PRC market and stable performance in Taiwan. Distribution channels saw significant sales growth from franchised/self-operated spas and counters, with a substantial increase in new store openings. R&D focused on anti-aging innovation, smart instruments, and exosome technology, applying AI to massage robots. Health food business performed exceptionally, growing by 109.3% year-on-year - PRC market turnover increased by **101.1%** year-on-year to **HK$216.9 million**, but product sales gross profit margin decreased from **61.5% to 56.0%**, mainly due to changes in product revenue mix[54](index=54&type=chunk)[57](index=57&type=chunk) - Taiwan market turnover remained largely flat, with product sales gross profit margin increasing from **55.9% to 56.3%**, primarily due to changes in revenue mix from business channel shifts[55](index=55&type=chunk)[58](index=58&type=chunk) - Sales from franchised/self-operated spas and department store counters increased by **HK$108.7 million** to **HK$243 million**, accounting for **91.9% of total turnover**[56](index=56&type=chunk)[59](index=59&type=chunk) - In 2025 H1, the Group opened **244 new stores** and closed **59 stores**[65](index=65&type=chunk)[69](index=69&type=chunk) - R&D focuses on anti-aging innovation upgrades (NB-1 Diamond Peptide Series), smart instrument applications (AI skin detection device), and exosome technology deepening, alongside the development of AI massage robots[66](index=66&type=chunk)[67](index=67&type=chunk)[68](index=68&type=chunk)[70](index=70&type=chunk)[71](index=71&type=chunk)[72](index=72&type=chunk)[73](index=73&type=chunk)[76](index=76&type=chunk) - Health food series achieved revenue of **HK$28 million**, a year-on-year increase of **109.3%**, becoming a high-growth engine in the wellness sector[80](index=80&type=chunk)[82](index=82&type=chunk) [The PRC Market](index=15&type=section&id=The%20PRC%20Market) In 2025 H1, the PRC market turnover increased by 101.1% year-on-year to HK$216.9 million. Product sales gross profit margin decreased from 61.5% to 56.0%, mainly due to changes in the revenue mix from product bundle sales PRC Market Turnover and Gross Profit Margin | Metric | 2025 H1 (HK$ thousand) | 2024 H1 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Turnover | 216,900 | 107,800 | 101.1% | | Product Sales Gross Profit Margin | 56.0% | 61.5% | -5.5%pt | [Taiwan Market](index=15&type=section&id=Taiwan%20Market) In 2025 H1, Taiwan market turnover was HK$46 million, largely flat year-on-year. Product sales gross profit margin increased from 55.9% to 56.3%, mainly due to changes in revenue mix from business channel shifts Taiwan Market Turnover and Gross Profit Margin | Metric | 2025 H1 (HK$ thousand) | 2024 H1 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Turnover | 46,000 | 46,000 | 0.0% | | Product Sales Gross Profit Margin | 56.3% | 55.9% | +0.4%pt | [Distribution Channels](index=15&type=section&id=Distribution%20Channels) In 2025 H1, sales from franchised/self-operated spas and department store counters increased by HK$108.7 million to HK$243 million, accounting for 91.9% of total revenue, while e-commerce, TV shopping, and telemarketing channels saw a slight decline. As of June 30, 2025, the Group had 1,958 spa centers and 7 counters, with 1,952 being franchised spas, opening 244 new stores and closing 59 during the period 2025 H1 Turnover by Distribution Channel | Channel | 2025 H1 (HK$ thousand) | % of Total | 2024 H1 (HK$ thousand) | % of Total | Change (HK$ thousand) | | :--- | :--- | :--- | :--- | :--- | :--- | | Franchised/Self-operated Spas & Counters | 243,000 | 91.9% | 134,300 | 85.7% | 108,700 | | E-commerce, TV Shopping & Telemarketing | 21,500 | 8.1% | 22,400 | 14.3% | (900) | Number of Stores as of June 30, 2025 | Region | Franchised Spas | Self-operated Spas | Self-operated Counters | Total | | :--- | :--- | :--- | :--- | :--- | | PRC | 1,640 | 6 | 7 | 1,653 | | Taiwan | 293 | – | – | 293 | | Others | 19 | – | – | 19 | | Total | 1,952 | 6 | 7 | 1,965 | - During the period, **244 new stores** were opened, and **59 stores** were closed[65](index=65&type=chunk)[69](index=69&type=chunk) [Research and Development](index=17&type=section&id=Research%20and%20Development) In 2025, Natural Beauty's core R&D strategy focuses on advanced technology and high-end formula upgrades, emphasizing anti-aging innovation, smart instrument applications, and exosome technology. The NB-1 Diamond Peptide Series was successfully upgraded, an enhanced skin detection device with AI skin texture recognition was launched, and an AI massage robot with visual recognition was developed. Over 20 exosome products are expected to be launched throughout the year, with active promotion of industry-academia collaboration - R&D strategy focuses on anti-aging innovation upgrades, smart instrument applications, and exosome technology deepening[66](index=66&type=chunk)[70](index=70&type=chunk) - Completed comprehensive technology and formula upgrades for the flagship **"Diamond Peptide Series"**, targeting mature skin issues in Asian women[67](index=67&type=chunk)[70](index=70&type=chunk) - Launched an upgraded skin detection device, equipped with a **100x magnifying lens** and an **AI skin texture recognition model**, already introduced in multiple franchised stores[68](index=68&type=chunk)[70](index=70&type=chunk) - Exosome technology is a key focus for annual expansion, with over **20 products** expected to be launched across multiple channels[72](index=72&type=chunk)[76](index=76&type=chunk) - Successfully developed an **AI massage robot** with visual recognition capabilities, capable of simulating professional manual techniques for standardized operations[73](index=73&type=chunk)[76](index=76&type=chunk) [Products and Marketing Activities](index=19&type=section&id=Products%20and%20Marketing%20Activities) In April 2025, Natural Beauty held a "Diamond Peptide & Health Food" new product launch, introducing various skincare, health food, and hair care products, achieving HK$58 million in sales. The company fully implemented a standardized sales conference tour strategy, hosting over 90 themed events to effectively strengthen brand recognition. Health food series revenue reached HK$28 million, a 109.3% year-on-year increase. Additionally, a partnership with Kid Castle Educational Group led to the establishment of "Bio–up Fanity" biotechnology beauty SPA clubs, pioneering a cross-industry integration model - The April 2025 new product launch introduced **6 skincare items, 2 Diamond skincare gift sets, 5 health food products, and 4 hair care products**, achieving **HK$58 million in sales performance**[78](index=78&type=chunk)[79](index=79&type=chunk)[82](index=82&type=chunk) - Fully implemented a standardized sales conference tour strategy, hosting over **90 themed events** to strengthen brand recognition and product stickiness within the franchised chain system[80](index=80&type=chunk)[82](index=82&type=chunk) - Health food series revenue reached **HK$28 million**, a year-on-year increase of **109.3%**, solidifying its position as a high-growth engine in the wellness sector[80](index=80&type=chunk)[82](index=82&type=chunk) - Strategic cooperation with Kid Castle Educational Group led to the establishment of the first **"Bio–up Fanity" biotechnology beauty SPA club** in Xi'an, Shaanxi, with **4 locations completed**, targeting young parents of children[81](index=81&type=chunk)[83](index=83&type=chunk) [Human Resources](index=20&type=section&id=Human%20Resources) As of June 30, 2025, the Group employed a total of 525 employees, with 424 in the PRC and 101 in Taiwan. Total remuneration for 2025 H1 was approximately HK$74.9 million, a 17.0% year-on-year increase, including HK$11.8 million in retirement benefit-related costs. The Group is committed to employee training and development and maintains a competitive compensation package Human Resources Overview | Metric | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Total Employees | 525 persons | - | | PRC Employees | 424 persons | - | | Taiwan Employees | 101 persons | - | | Total Remuneration (HK$ thousand) | 74,900 | 64,000 | | Retirement Benefit Related Costs (HK$ thousand) | 11,800 | 10,000 | - The Group maintains good cooperative relationships with employees, regularly providing professional training courses[85](index=85&type=chunk)[89](index=89&type=chunk) [Capital Expenditure](index=20&type=section&id=Capital%20Expenditure) In 2025 H1, the Group's capital expenditure was HK$33.2 million, primarily allocated to new factory construction in the PRC (HK$19.4 million) and new store renovations and equipment (HK$10.4 million) 2025 H1 Capital Expenditure | Item | Amount (HK$ thousand) | | :--- | :--- | | Total Capital Expenditure | 33,200 | | New Factory Construction in PRC | 19,400 | | New Store Renovation & Equipment | 10,400 | [Right-of-use Assets and Lease Liability](index=20&type=section&id=Right-of-use%20Assets%20and%20Lease%20Liability) As of June 30, 2025, the Group's right-of-use assets amounted to HK$36.3 million and lease liabilities to HK$21.4 million, primarily located in the PRC and Taiwan. Depreciation expense for right-of-use assets was HK$3.8 million, and interest expense on lease liabilities was HK$0.6 million during the period Right-of-Use Assets and Lease Liabilities Overview | Metric | June 30, 2025 (HK$ thousand) | June 30, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Right-of-Use Assets | 36,300 | 28,300 | | Lease Liabilities | 21,400 | 12,800 | | Depreciation Expense for Right-of-Use Assets (Period) | 3,800 | - | | Interest Expense on Lease Liabilities (Period) | 600 | - | [Pledged Assets](index=20&type=section&id=Pledged%20Assets) As of June 30, 2025, the Group's secured short-term and long-term bank borrowings were collateralized by certain freehold land, buildings, and right-of-use assets related to leasehold land with a carrying value of HK$336.8 million - Secured bank borrowings are collateralized by land, buildings, and right-of-use assets with a carrying value of **HK$336.8 million**[88](index=88&type=chunk)[92](index=92&type=chunk) [Outlook for 2025](index=21&type=section&id=Outlook%20for%202025) 2025 is a pivotal year for Natural Beauty to achieve structural breakthroughs, as the company will continue to deepen its presence in the wellness sector, expand diversified businesses, and accelerate the deployment of its agent system, focusing on five core regions. In H1, new franchised stores in the PRC increased by 88.1% year-on-year, with steady growth in single-store revenue. In H2, the company will continue to implement its "AI Technology, Beauty, and Holistic Health" strategy, collaborating with Baidu and Fudan University to strengthen brand building, deepen membership system operations, and fully accelerate core business development - **2025** is a crucial year for Natural Beauty to achieve structural breakthroughs, continuing to deepen its presence in the wellness sector and expand diversified businesses[93](index=93&type=chunk)[95](index=95&type=chunk) - Accelerate the deployment of the agent system, focusing on **five core regions**: Central China, East China, West, South China, and North China[93](index=93&type=chunk)[95](index=95&type=chunk) - In 2025 H1, the number of new franchised stores in the PRC increased by **88.1%** year-on-year, with steady growth in single-store revenue[93](index=93&type=chunk)[95](index=95&type=chunk) - In H2, the company will implement the **"AI Technology, Beauty, and Holistic Health" strategy**, strategically collaborating with Baidu and Fudan University to leverage AI technology's core empowering role in product innovation, digital stores, marketing, and management system upgrades[97](index=97&type=chunk)[98](index=98&type=chunk) [Key Market Development Strategies - Taiwan](index=21&type=section&id=Key%20Market%20Development%20Strategies%20-%20Taiwan) In 2025 H1, the Taiwan market continued to implement a dual-track strategy of "multi-channel marketing" and "high repurchase products," flexibly integrating online and offline momentum. Despite economic fluctuations, operational performance remained stable. The company actively deployed AI technology beauty instruments to assist franchised stores in upgrading, and expanded brand reach through live streaming, social interaction, and other digital promotions, laying the foundation for full-year performance growth - The Taiwan market continues to advance a dual-track strategy of **"multi-channel marketing"** and **"high repurchase products"**, integrating online platforms and physical store momentum[94](index=94&type=chunk)[96](index=96&type=chunk) - Actively deploying **AI technology beauty instruments** to assist franchised stores in upgrading their profit models and strengthening terminal competitiveness[94](index=94&type=chunk)[96](index=96&type=chunk) - Expanding brand reach through live streaming, social interaction, and digital promotions to drive traffic conversion[94](index=94&type=chunk)[96](index=96&type=chunk) [Key Market Development Strategies - PRC](index=22&type=section&id=Key%20Market%20Development%20Strategies%20-%20PRC) The PRC market continues to implement multi-channel, multi-brand strategies, deepening its presence in the beauty and wellness sector, and accelerating store deployment through an agent system. Marketing efforts advance an integrated "online live streaming + offline conference" strategy, deeply covering key national regions. In brand building, the B.U.T. ESSE brand continues to expand its channel footprint, successfully implementing a "counter × beauty salon" dual-mode operation model to enhance brand influence - Continues to implement multi-channel, multi-brand strategies, deepening its presence in the beauty and wellness sector, and accelerating store deployment through an agent system[97](index=97&type=chunk)[98](index=98&type=chunk) - Marketing advances an integrated **"online live streaming + offline conference" strategy** to comprehensively improve market penetration efficiency and deeply cover key national regions[97](index=97&type=chunk)[98](index=98&type=chunk) - Deep collaboration with local core agents to rapidly advance localized business implementation and expansion[97](index=97&type=chunk)[98](index=98&type=chunk) - The **B.U.T. ESSE brand** continues to expand its channel footprint, opening counters at Xujiahui Oriental Commercial Building and deploying self-operated beauty salons in core business districts like New World and Hopson One, successfully implementing a **"counter × beauty salon" dual-mode operation model**[97](index=97&type=chunk)[98](index=98&type=chunk) [Corporate Governance Highlights](index=23&type=section&id=Corporate%20Governance%20Highlights) This section outlines the company's commitment to high-level corporate governance, detailing the roles and responsibilities of its Board committees, compliance with governance codes, and recent changes in directors' and CEO's information [Commitment to Corporate Governance](index=23&type=section&id=Commitment%20to%20Corporate%20Governance) The company is committed to achieving high-level corporate governance to protect and enhance shareholder interests. The Board has established Audit, Executive, Remuneration, and Nomination Committees, whose terms of reference comply with the Listing Rules' Corporate Governance Code, and all but the Executive Committee are chaired by independent non-executive directors - The company is committed to achieving a **high level of corporate governance** to properly safeguard and enhance shareholder interests[99](index=99&type=chunk)[104](index=104&type=chunk) - The Board has established an Audit Committee, Executive Committee, Remuneration Committee, and Nomination Committee, whose terms of reference comply with the Corporate Governance Code in the Listing Rules[100](index=100&type=chunk)[104](index=104&type=chunk) - All committees, except for the Executive Committee, are chaired by independent non-executive directors[100](index=100&type=chunk)[104](index=104&type=chunk) [Audit Committee and Review of Interim Financial Statements](index=23&type=section&id=Audit%20Committee%20and%20Review%20of%20Interim%20Financial%20Statements) The Audit Committee has reviewed the unaudited condensed consolidated financial statements for the six months ended June 30, 2025, deeming them compliant with applicable accounting standards, legal requirements, and the Listing Rules. The company's auditor, RSM Hong Kong, also conducted a review in accordance with Hong Kong Standard on Review Engagements 2410 - The Audit Committee has reviewed the interim financial statements, deeming them compliant with applicable accounting standards, legal requirements, and the Listing Rules[101](index=101&type=chunk)[105](index=105&type=chunk) - The company's auditor, RSM Hong Kong, has reviewed the interim financial statements in accordance with Hong Kong Standard on Review Engagements 2410[102](index=102&type=chunk)[105](index=105&type=chunk) [Remuneration Committee](index=23&type=section&id=Remuneration%20Committee) The Remuneration Committee's responsibilities include determining executive directors' remuneration policy and structure, assessing their performance, approving service contract terms, recommending remuneration for directors and senior management to the Board, and reviewing and approving share scheme-related matters - The Remuneration Committee is responsible for determining the remuneration policy and structure for executive directors, assessing their performance, and approving service contract terms[103](index=103&type=chunk)[106](index=106&type=chunk) - The Committee also recommends remuneration for directors and senior management to the Board, and reviews and approves matters related to share schemes[103](index=103&type=chunk)[106](index=106&type=chunk) [Nomination Committee](index=24&type=section&id=Nomination%20Committee) The Nomination Committee is responsible for determining director nomination policy, annually reviewing the Board's structure, size, composition, and diversity, and recommending director candidates to the Board in accordance with the Board Diversity Policy, while also assessing the independence of independent non-executive directors - The Nomination Committee is responsible for determining the director nomination policy and annually reviewing the Board's structure, size, composition, and diversity[107](index=107&type=chunk)[112](index=112&type=chunk) - The Committee recommends director candidates based on the Board Diversity Policy and assesses the independence of independent non-executive directors[107](index=107&type=chunk)[112](index=112&type=chunk) [Executive Committee](index=24&type=section&id=Executive%20Committee) The Executive Committee is primarily responsible for formulating business policies, making decisions on key business issues and policies, assisting in approving corporate actions, and exercising powers delegated by the Board. The Committee also reviews financial, marketing, retail, operational, and other business performance, and approves annual budgets and key performance indicators - The Executive Committee's primary responsibilities include formulating business policies, making decisions on important business matters and policies, and assisting in approving corporate actions[108](index=108&type=chunk)[113](index=113&type=chunk) - The Committee reviews financial, marketing, retail, operational, and other business performance, and approves annual budgets and key business indicators[108](index=108&type=chunk)[113](index=113&type=chunk) [Compliance with CG Code and Model Code](index=24&type=section&id=Compliance%20with%20CG%20Code%20and%20Model%20Code) For the six months ended June 30, 2025, the Board consistently met the Listing Rules' requirements for the number of independent non-executive directors, and the company fully complied with all provisions of the Corporate Governance Code. All directors confirmed adherence to the Model Code for Securities Transactions by Directors of Listed Issuers, with no non-compliance by relevant employees with company guidelines - The Board has consistently complied with the Listing Rules' requirement to appoint at least **three independent non-executive directors**, constituting at least **one-third of the Board's members**[109](index=109&type=chunk)[113](index=113&type=chunk) - The company has fully complied with the code provisions of the Corporate Governance Code throughout the six months ended June 30, 2025[110](index=110&type=chunk)[114](index=114&type=chunk) - All directors confirmed compliance with the Model Code for Securities Transactions by Directors of Listed Issuers[111](index=111&type=chunk)[115](index=115&type=chunk) - The company has adopted written guidelines no less stringent than the Model Code, with no instances of non-compliance found among relevant employees[116](index=116&type=chunk)[120](index=120&type=chunk) [Disclosure of Directors and CEO Information under Listing Rule 13.51B(1)](index=25&type=section&id=Disclosure%20of%20Directors%20and%20CEO%20Information%20under%20Listing%20Rule%2013.51B(1)) Since the last annual report, Non-Executive Director Ms. Lin Shu-Hua was re-appointed as an independent director of Cashbox Partyworld Co., Ltd. Independent Non-Executive Director Mr. Yang Shih-Chien ceased to be an independent director of Topkey Corporation. Independent Non-Executive Director Mr. Chen Ruey-Long ceased to be a director of Tatung Company and Vice Chairman of the Cross-Strait Entrepreneurs Summit. The company secretary and authorized representative changed from Ms. Kuo Yen-Ting to Ms. Li Mei-Yi - Non-Executive Director Ms. Lin Shu-Hua was re-appointed as an independent director of Cashbox Partyworld Co., Ltd. on **June 18, 2025**[117](index=117&type=chunk)[121](index=121&type=chunk) - Independent Non-Executive Director Mr. Yang Shih-Chien ceased to be an independent director of Topkey Corporation effective **May 28, 2025**[118](index=118&type=chunk)[121](index=121&type=chunk) - Independent Non-Executive Director Mr. Chen Ruey-Long ceased to be a director of Tatung Company effective **May 28, 2025**, and ceased to be Vice Chairman of the Cross-Strait Entrepreneurs Summit effective **July 17, 2025**[119](index=119&type=chunk)[123](index=123&type=chunk) - Ms. Kuo Yen-Ting resigned as company secretary and authorized representative, with Ms. Li Mei-Yi appointed as her successor on **August 5, 2025**[119](index=119&type=chunk)[122](index=122&type=chunk) [Other Information](index=26&type=section&id=Other%20Information) This section covers details regarding the company's listed securities transactions, interim dividends, directors' and chief executives' share interests, share award schemes, and information on substantial shareholders [Purchase, Sale or Redemption of Listed Securities](index=26&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20Listed%20Securities) For the six months ended June 30, 2025, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities - For the six months ended June 30, 2025, neither the company nor its subsidiaries purchased, sold, or redeemed any listed securities[125](index=125&type=chunk)[128](index=128&type=chunk) [Interim Dividend](index=26&type=section&id=Interim%20Dividend) For the six months ended June 30, 2025, no interim dividend was declared by the company - No interim dividend was declared for the six months ended June 30, 2025[126](index=126&type=chunk)[129](index=129&type=chunk) [Directors' and Chief Executives' Interests in Shares](index=26&type=section&id=Directors%27%20and%20Chief%20Executives%27%20Interests%20in%20Shares) As of June 30, 2025, to the best of the directors' knowledge, no director or chief executive, or their close associates, held any interests or short positions in the shares, underlying shares, or debentures of the company or its associated corporations that are required to be disclosed under the Securities and Futures Ordinance - As of June 30, 2025, no director or chief executive, or their close associates, held any disclosable interests or short positions in the company's shares or debentures[127](index=127&type=chunk)[130](index=130&type=chunk) [Share Awards](index=27&type=section&id=Share%20Awards) The company adopted two share award schemes (Scheme I and Scheme II) on May 25, 2022, aimed at recognizing contributions, incentivizing, and retaining key management, and attracting talent. As of June 30, 2025, the maximum number of shares available for grant under the schemes was 60,006,027, but no share awards were granted during the period - The company adopted two share award schemes (Scheme I and Scheme II) on **May 25, 2022**[132](index=132&type=chunk)[134](index=134&type=chunk) - Scheme I aims to recognize contributions from connected persons and incentivize senior management; Scheme II aims to recognize contributions from non-connected persons, retain, and attract talent[132](index=132&type=chunk)[133](index=133&type=chunk)[134](index=134&type=chunk)[135](index=135&type=chunk) - As of June 30, 2025, the maximum number of shares available for grant was **60,006,027 shares**, but no share awards were granted during the period[136](index=136&type=chunk)[139](index=139&type=chunk) [Directors' Rights to Acquire Shares or Debentures](index=28&type=section&id=Directors%27%20Rights%20to%20Acquire%20Shares%20or%20Debentures) During the review period, neither the company nor any of its subsidiaries participated in any arrangements enabling directors to benefit from acquiring shares or debentures of the company or any other body corporate, and no director, their spouse, or minor children were granted or exercised any rights to subscribe for equity or debt securities of the company - During the review period, neither the company nor its subsidiaries participated in any arrangements enabling directors to benefit from acquiring shares or debentures[138](index=138&type=chunk)[140](index=140&type=chunk) - No director, their spouse, or minor children were granted or exercised any rights to subscribe for the company's equity or debt securities[138](index=138&type=chunk)[140](index=140&type=chunk) [Substantial Shareholders](index=29&type=section&id=Substantial%20Shareholders) As of June 30, 2025, the company's substantial shareholders include Eastern Media International Corporation (holding 30.00% through its wholly-owned subsidiary Far Eastern Warehousing & Shipping (Panama) Co., Ltd.), Mr. Chao Shih-Heng (holding 22.76% through controlled corporations), Dr. Tsai Yen-Yu (holding 22.24% directly and through controlled corporations), and her spouse Mr. Lee Ming-Ta (deemed to have the same interest) Substantial Shareholders' Shareholdings as of June 30, 2025 | Name of Substantial Shareholder | Nature of Interest | Number of Ordinary Shares Beneficially Held | Approximate % of Issued Share Capital | | :--- | :--- | :--- | :--- | | Eastern Media International Corporation | Interest in controlled corporation | 600,630,280(L) | 30.00% | | Far Eastern Warehousing & Shipping (Panama) Co., Ltd. | Beneficial owner | 600,630,280(L) | 30.00% | | Chao Shih-Heng | Interest in controlled corporation | 455,630,196(L) | 22.76% | | Good Titanic Limited | Interest in controlled corporation | 455,630,196(L) | 22.76% | | Insbro Holdings Limited | Beneficial owner | 455,630,196(L) | 22.76% | | Tsai Yen-Yu | Interest in controlled corporation | 445,315,083(L) | 22.24% | | Lee Ming-Ta | Spouse's interest | 445,315,083(L) | 22.24% | | Next Focus Holdings Limited | Beneficial owner / Interest in controlled corporation | 445,315,083(L) | 22.24% | | Starsign International Limited | Interest in controlled corporation | 292,958,524(L) | 14.63% | | Standard Cosmos Limited | Beneficial owner / Interest in controlled corporation | 292,958,524(L) | 14.63% | [Independent Review Report](index=31&type=section&id=Independent%20Review%20Report) This section presents the independent review report by RSM Hong Kong on the company's interim financial information, outlining the scope of their review and their conclusion regarding its preparation in accordance with HKAS 34 [Introduction](index=31&type=section&id=Introduction) RSM Hong Kong has reviewed Natural Beauty Bio-Technology Limited's interim financial information for the six months ended June 30, 2025, including the condensed consolidated financial statements and notes. Directors are responsible for preparing and presenting this information in accordance with HKAS 34, while the auditor's responsibility is to express a conclusion based on the review - RSM Hong Kong has reviewed the company's interim financial information for the six months ended June 30, 2025[149](index=149&type=chunk)[150](index=150&type=chunk) - Directors are responsible for preparing and presenting the interim financial information in accordance with Hong Kong Accounting Standard 34[149](index=149&type=chunk)[150](index=150&type=chunk) [Scope of Review](index=32&type=section&id=Scope%20of%20Review) The review was conducted in accordance with Hong Kong Standard on Review Engagements 2410 issued by the Hong Kong Institute of Certified Public Accountants, primarily involving inquiries with personnel responsible for financial and accounting matters, and performing analytical and other review procedures. The scope of a review is less than an audit, thus no audit opinion is expressed - The review was conducted in accordance with Hong Kong Standard on Review Engagements 2410, primarily involving inquiries and analytical procedures[151](index=151&type=chunk)[153](index=153&type=chunk) - The scope of a review is less than an audit, therefore no audit opinion is expressed[151](index=151&type=chunk)[153](index=153&type=chunk) [Conclusion](index=32&type=section&id=Conclusion) Based on the review results, RSM Hong Kong found no matters that lead them to believe the interim financial information was not prepared in all material respects in accordance with Hong Kong Accounting Standard 34 - The auditor found no matters that lead them to believe the interim financial information was not prepared in all material respects in accordance with Hong Kong Accounting Standard 34[152](index=152&type=chunk)[154](index=154&type=chunk) [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=33&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) This statement presents the Group's financial performance for the period, including revenue, gross profit, operating profit, profit before tax, and total comprehensive income, highlighting the shift from loss to profit [Profit or Loss Performance](index=33&type=section&id=Profit%20or%20Loss%20Performance) For the six months ended June 30, 2025, the company's revenue increased year-on-year to HK$264.5 million, with gross profit reaching HK$147.2 million. Operating profit was HK$16.16 million, profit before tax was HK$12.46 million, and profit for the period was HK$10.93 million, achieving a turnaround from loss to profit 2025 H1 Key Profit or Loss Statement Data | Metric | 2025 H1 (HK$ thousand) | 2024 H1 (HK$ thousand) | | :--- | :--- | :--- | | Revenue | 264,504 | 156,749 | | Cost of Sales | (117,335) | (63,419) | | Gross Profit | 147,169 | 93,330 | | Other Income and Gains | 2,020 | 3,810 | | Distribution and Selling Expenses | (92,815) | (82,045) | | Administrative Expenses | (33,890) | (38,855) | | Other Expenses and Losses | (6,414) | (979) | | Operating Profit/(Loss) | 16,156 | (24,579) | | Profit/(Loss) Before Tax | 12,456 | (28,673) | | Income Tax Expense | (1,526) | (1,781) | | Profit/(Loss) for the Period | 10,930 | (30,454) | [Other Comprehensive Income and Total Comprehensive Income](index=33&type=section&id=Other%20Comprehensive%20Income%20and%20Total%20Comprehensive%20Income) In 2025 H1, other comprehensive income from exchange differences on translating foreign operations amounted to HK$26.15 million. Total comprehensive income for the period was HK$37.08 million, entirely attributable to owners of the company, marking a turnaround from loss to profit 2025 H1 Other Comprehensive Income and Total Comprehensive Income | Metric | 2025 H1 (HK$ thousand) | 2024 H1 (HK$ thousand) | | :--- | :--- | :--- | | Exchange differences on translating foreign operations | 26,150 | (17,686) | | Total Comprehensive Income for the Period | 37,080 | (48,140) | | Attributable to Owners of the Company | 37,080 | (48,140) | [Earnings per Share](index=34&type=section&id=Earnings%20per%20Share) In 2025 H1, basic earnings per share were 0.55 HK cents, compared to a basic loss per share of 1.52 HK cents in the prior period. Diluted earnings per share are not presented as the company has no potential ordinary shares Earnings/(Loss) per Share | Metric | 2025 H1 (HK cents) | 2024 H1 (HK cents) | | :--- | :--- | :--- | | Basic Earnings/(Loss) per Share | 0.55 | (1.52) | | Diluted Earnings/(Loss) per Share | Not Applicable | Not Applicable | [Condensed Consolidated Statement of Financial Position](index=35&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) This statement provides a snapshot of the Group's financial position, detailing its non-current and current assets, liabilities, and equity as of the reporting date [Assets Overview](index=35&type=section&id=Assets%20Overview) As of June 30, 2025, the company's total non-current assets were HK$525.9 million, primarily comprising property, plant and equipment, investment properties, and right-of-use assets. Total current assets were HK$325.9 million, mainly consisting of inventories, trade and other receivables, and bank and cash balances Asset Composition as of June 30, 2025 | Asset Category | June 30, 2025 (HK$ thousand) | Dec 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | **Non-Current Assets** | | | | Property, Plant and Equipment | 268,422 | 239,614 | | Investment Properties | 196,719 | 190,021 | | Right-of-Use Assets | 36,278 | 34,871 | | Investment in an Associate | 1,569 | – | | Deferred Tax Assets | 21,134 | 18,123 | | **Total Non-Current Assets** | **525,872** | **484,172** | | **Current Assets** | | | | Inventories | 92,487 | 81,204 | | Trade and Other Receivables | 135,895 | 89,614 | | Bank and Cash Balances | 97,163 | 116,507 | | **Total Current Assets** | **325,854** | **288,759** | [Liabilities and Equity Overview](index=35&type=section&id=Liabilities%20and%20Equity%20Overview) As of June 30, 2025, the company's total current liabilities were HK$224.2 million, primarily comprising trade and other payables, borrowings, and lease liabilities. Total non-current liabilities were HK$142.9 million. Net assets amounted to HK$484.7 million, total equity was HK$484.7 million, and share capital was HK$200.2 million Liabilities and Equity Composition as of June 30, 2025 | Liability and Equity Category | June 30, 2025 (HK$ thousand) | Dec 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | **Current Liabilities** | | | | Trade and Other Payables | 125,165 | 93,452 | | Borrowings | 72,475 | 68,209 | | Lease Liabilities | 6,899 | 6,090 | | **Total Current Liabilities** | **224,161** | **187,508** | | **Non-Current Liabilities** | | | | Borrowings | 128,420 | 124,043 | | Lease Liabilities | 14,472 | 13,787 | | **Total Non-Current Liabilities** | **142,892** | **137,830** | | **Net Assets** | **484,673** | **447,593** | | **Total Equity** | **484,673** | **447,593** | | Share Capital | 200,210 | 200,210 | | Reserves | 284,463 | 247,383 | [Condensed Consolidated Statement of Changes in Equity](index=37&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) This statement details the changes in the Group's equity attributable to owners of the company for the period, reflecting the impact of total comprehensive income and other equity movements [Equity Changes for the Period](index=37&type=section&id=Equity%20Changes%20for%20the%20Period) For the six months ended June 30, 2025, total comprehensive income attributable to owners of the company was HK$37.08 million, primarily driven by an increase of HK$26.15 million in exchange reserves and HK$10.93 million in retained profits, increasing total equity from HK$447.6 million at the beginning of the year to HK$484.7 million 2025 H1 Changes in Equity | Equity Item | Jan 1, 2025 (HK$ thousand) | Total Comprehensive Income for the Period (HK$ thousand) | June 30, 2025 (HK$ thousand) | | :--- | :--- | :--- | :--- | | Share Capital | 200,210 | – | 200,210 | | Capital Surplus | 42,554 | – | 42,554 | | Share Premium | 29,004 | – | 29,004 | | Statutory Reserve | 180,448 | – | 180,448 | | Exchange Reserve | 27,136 | 26,150 | 53,286 | | Property Revaluation Reserve | 29,157 | – | 29,157 | | Remeasurement of Defined Benefit Retirement Plan | 3,578 | – | 3,578 | | Retained Profits | (64,494) | 10,930 | (53,564) | | **Total** | **447,593** | **37,080** | **484,673** | - Total comprehensive income for the period was **HK$37.08 million**, primarily from the increase in exchange reserves and the turnaround in retained profits[163](index=163&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=38&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) This statement summarizes the Group's cash inflows and outflows from operating, investing, and financing activities for the period, indicating the net change in cash and cash equivalents [Cash Flow Activities](index=38&type=section&id=Cash%20Flow%20Activities) For the six months ended June 30, 2025, net cash used in operating activities was HK$13.95 million, a decrease from the prior period. Net cash used in investing activities was HK$21.10 million, primarily for purchasing property, plant, and equipment. Net cash used in financing activities was HK$4.07 million. Cash and cash equivalents at period-end amounted to HK$93.53 million 2025 H1 Cash Flow Overview | Cash Flow Category | 2025 H1 (HK$ thousand) | 2024 H1 (HK$ thousand) | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | (13,952) | (26,532) | | Net Cash Used in Investing Activities | (21,099) | (16,781) | | Net Cash Used in Financing Activities | (4,070) | (11,585) | | Net Decrease in Cash and Cash Equivalents | (39,121) | (54,898) | | Effect of Exchange Rate Changes | 23,614 | (8,341) | | Cash and Cash Equivalents at Jan 1 | 109,038 | 158,743 | | Cash and Cash Equivalents at June 30 | 93,531 | 95,504 | - Investing activities primarily included the purchase of property, plant and equipment of **HK$23.6 million** and investment in an associate of **HK$1.64 million**[165](index=165&type=chunk) - Financing activities included raising borrowings of **HK$24.81 million** and repayment of borrowings of **HK$22.82 million**[165](index=165&type=chunk) [Notes to the Condensed Financial Statements](index=40&type=section&id=Notes%20to%20the%20Condensed%20Financial%20Statements) This section provides detailed notes to the condensed financial statements, covering the basis of preparation, adoption of new accounting standards, fair value measurements of financial instruments, segment information, revenue breakdown, profit/loss components, income tax, dividends, earnings per share, asset movements, and related party transactions [Basis of Preparation](index=40&type=section&id=Basis%20of%20Preparation) The condensed financial statements are prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" and applicable disclosure requirements of the Listing Rules, and should be read in conjunction with the 2024 annual financial statements. Accounting policies and methods of computation are consistent with those used in the 2024 annual financial statements - The condensed financial statements are prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" and the Listing Rules[168](index=168&type=chunk)[172](index=172&type=chunk) - Accounting policies and methods of computation are consistent with those used in the 2024 annual financial statements[169](index=169&type=chunk)[172](index=172&type=chunk) [Adoption of New and Revised Hong Kong Financial Reporting Standards](index=40&type=section&id=Adoption%20of%20New%20and%20Revised%20Hong%20Kong%20Financial%20Reporting%20Standards) The Group first applied the amendments to Hong Kong Accounting Standard 21 "Lack of Exchangeability" from January 1, 2025, but did not change accounting policies or make retrospective adjustments as a result - The Group first applied the amendments to Hong Kong Accounting Standard 21 "Lack of Exchangeability" from **January 1, 2025**[170](index=170&type=chunk)[173](index=173&type=chunk) - No changes to accounting policies or retrospective adjustments were made due to the adoption of the aforementioned revised standard[170](index=170&type=chunk)[173](index=173&type=chunk) [Fair Value Measurements of Financial Instruments](index=40&type=section&id=Fair%20Value%20Measurements%20of%20Financial%20Instruments) As of June 30, 2025, and December 31, 2024, no financial assets or financial liabilities were measured at fair value. The carrying amounts of financial assets and financial liabilities reflected in the condensed consolidated statement of financial position approximate their respective fair values - As of **June 30, 2025**, and **December 31, 2024**, no financial assets or financial liabilities were measured at fair value[171](index=171&type=chunk)[174](index=174&type=chunk) - The carrying amounts of financial assets and financial liabilities approximate their respective fair values[171](index=171&type=chunk)[174](index=174&type=chunk) [Segment Information](index=41&type=section&id=Segment%20Information) In 2025 H1, the Group's total revenue from external customers was HK$264.5 million, with the PRC contributing HK$216.9 million and Taiwan HK$45.94 million. PRC segment profit was HK$15.16 million, and Taiwan segment profit was HK$5.47 million. Segment profit or loss excludes central administrative expenses, directors' remuneration, and interest income. Non-current assets are primarily concentrated in the PRC (HK$448.1 million) and Taiwan (HK$56.68 million) 2025 H1 Revenue and Segment Profit by Geographical Region | Region | Revenue from External Customers (HK$ thousand) | Segment Profit/(Loss) (HK$ thousand) | | :--- | :--- | :--- | | PRC | 216,872 | 15,162 | | Taiwan | 45,943 | 5,474 | | Others | 1,689 | (5,077) | | Total | 264,504 | 15,559 | | Unallocated Corporate Expenses | - | (3,406) | | Unallocated Income | - | 303 | | Consolidated Profit Before Tax | - | 12,456 | Non-Current Assets by Location as of June 30, 2025 | Region | Non-Current Assets (HK$ thousand) | | :--- | :--- | | PRC | 448,055 | | Taiwan | 56,683 | | Others | – | | Consolidated Total | 504,738 | - Segment profit or loss excludes central administrative expenses, directors' remuneration, and interest income[177](index=177&type=chunk)[179](index=179&type=chunk) [Revenue](index=43&type=section&id=Revenue) In 2025 H1, the Group's total revenue was HK$264.5 million, with product sales accounting for HK$262.6 million and service income for HK$1.88 million. Revenue primarily originated from the PRC (HK$216.9 million) and Taiwan (HK$45.94 million). Most product sales and service income are recognized at a point in time or over time 2025 H1 Revenue by Major Product or Service Category | Product or Service Category | 2025 H1 (HK$ thousand) | 2024 H1 (HK$ thousand) | | :--- | :--- | :--- | | Product Sales | 262,625 | 155,626 | | Service Income | 1,879 | 1,123 | | Total | 264,504 | 156,749 | 2025 H1 Revenue by Major Geographical Market and Timing of Recognition | Region/Timing of Recognition | 2025 H1 (HK$ thousand) | 2024 H1 (HK$ thousand) | | :--- | :--- | :--- | | **Major Geographical Markets** | | | | PRC | 216,872 | 107,833 | | Taiwan | 45,636 | 45,953 | | Others | 1,996 | 2,963 | | **Timing of Revenue Recognition** | | | | Products transferred at a point in time | 262,625 | 155,626 | | Products and services transferred over time | 1,879 | 1,123 | - As of June 30, 2025, the transaction price allocated to remaining performance obligations was **HK$18.66 million**, expected to be recognized as revenue within one year[193](index=193&type=chunk) [Profit/(Loss) for the Period](index=45&type=section&id=Profit%2F%28Loss%29%20for%20the%20Period) In 2025 H1, profit for the period was HK$10.93 million. Key expenses included depreciation of property, plant and equipment of HK$14.45 million, depreciation of right-of-use assets of HK$3.85 million, total staff costs of HK$74.93 million, and exchange losses of HK$4.18 million 2025 H1 Major Components of Profit/(Loss) for the Period | Item | 2025 H1 (HK$ thousand) | 2024 H1 (HK$ thousand) | | :--- | :--- | :--- | | Depreciation of Property, Plant and Equipment | 14,445 | 11,078 | | Depreciation of Right-of-Use Assets | 3,847 | 2,308 | | Total Staff Costs | 74,930 | 63,978 | | Loss on Disposal of Property, Plant and Equipment | 1,304 | 35 | | Provision for Obsolete Inventories | 1,245 | 512 | | Net Exchange Loss/(Gain) | 4,178 | (1,106) | | Research and Development Expenses | 3,269 | 2,419 | [Income Tax Expense](index=46&type=section&id=Income%20Tax%20Expense) In 2025 H1, income tax expense was HK$1.53 million. PRC corporate income tax is accrued at 25%, and Taiwan corporate income tax at 20%. Hong Kong profits tax and other provisions amounted to HK$0.95 million, withholding tax to HK$1.23 million, and deferred tax was a reversal of HK$2.04 million 2025 H1 Income Tax Expense | Tax Category | 2025 H1 (HK$ thousand) | 2024 H1 (HK$ thousand) | | :--- | :--- | :--- | | PRC Corporate Income Tax | 78 | – | | Taiwan Corporate Income Tax | 1,314 | 793 | | Hong Kong Profits Tax and Others | 947 | 797 | | Withholding Tax | 1,231 | 88 | | Deferred Tax | (2,044) | 103 | | **Total** | **1,526** | **1,781** | - The PRC corporate income tax rate is **25%**, and the Taiwan corporate income tax rate is **20%**[197](index=197&type=chunk)[198](index=198&type=chunk) - Under Hong Kong's two-tiered profits tax regime, the first **HK$2 million of assessable profits** is taxed at **8.25%**, and the remainder at **16.5%**[200](index=200&type=chunk) [Dividends](index=47&type=section&id=Dividends) For the period ended June 30, 2025, no dividends were paid or proposed by the company - No dividends were paid or proposed for the period ended June 30, 2025[202](index=202&type=chunk)[204](index=204&type=chunk) [Earnings/(Loss) per Share](index=48&type=section&id=Earnings%2F%28Loss%29%20per%20Share) In 2025 H1, basic earnings per share were 0.55 HK cents, based on profit attributable to owners of the company of HK$10.93 million and a weighted average of 2,002,100,932 ordinary shares outstanding. Diluted earnings per share are