[Financial Summary and Interim Dividend](index=1&type=section&id=Financial%20Summary%20and%20Interim%20Dividend) [Summary of Operating Results](index=1&type=section&id=Summary%20of%20Operating%20Results) The Group achieved steady growth in the first half of 2025, with revenue slightly increasing by **1.8%** to **RMB 259 million**, and gross profit margin modestly rising to **68.6%**, while total comprehensive income increased by **45.9%** to **RMB 12.4 million** due to effective operating expense control, with basic earnings per share rising to **RMB 10.14 cents** Key Financial Indicators for H1 2025 | Indicator | H1 2025 | H1 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | RMB 258.9 million | RMB 254.3 million | +1.8% | | Gross Profit | RMB 177.6 million | RMB 173.4 million | +2.4% | | Gross Profit Margin | 68.6% | 68.2% | +0.4pp | | Operating Expenses | RMB 164.6 million | RMB 169.3 million | -2.8% | | Total Comprehensive Income | RMB 12.4 million | RMB 8.5 million | +45.9% | | Basic and Diluted Earnings Per Share | RMB 10.14 cents | RMB 6.39 cents | +58.7% | [Interim Dividend](index=2&type=section&id=Interim%20Dividend) The Board proposes an interim dividend of **HKD 0.15** per share for the six months ended June 30, 2025, totaling approximately **HKD 18.3 million**, subject to shareholder approval at a special general meeting - The Board proposes an interim dividend of **HKD 0.15** per share, totaling **HKD 18,339,837.75**, subject to shareholder approval[5](index=5&type=chunk) [Interim Condensed Consolidated Financial Statements](index=3&type=section&id=Interim%20Condensed%20Consolidated%20Financial%20Statements) [Interim Condensed Consolidated Statement of Comprehensive Income](index=3&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) For the six months ended June 30, 2025, the Group recorded revenue of **RMB 259 million**, a **1.8%** year-on-year increase, achieving a profit for the period of **RMB 12.402 million**, up **58.7%** from **RMB 7.813 million** in the prior period, despite increased sales and marketing expenses partially offset by reduced administrative and R&D costs Interim Condensed Consolidated Statement of Comprehensive Income | Item | H1 2025 (RMB in thousands) | H1 2024 (RMB in thousands) | | :--- | :--- | :--- | | Revenue | 258,913 | 254,286 | | Gross Profit | 177,551 | 173,435 | | Operating Profit | 15,682 | 11,655 | | Profit Before Income Tax | 20,544 | 13,125 | | **Profit for the Period** | **12,402** | **7,813** | | **Total Comprehensive Income for the Period** | **12,402** | **8,465** | [Interim Condensed Consolidated Statement of Financial Position](index=5&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's total assets were **RMB 592 million**, a **5.6%** increase from the end of 2024, with total liabilities at **RMB 104 million**, and the debt-to-asset ratio rising from **15.2%** to **17.6%**, while total equity increased to **RMB 488 million** Summary of Interim Condensed Consolidated Statement of Financial Position | Item | June 30, 2025 (RMB in thousands) | December 31, 2024 (RMB in thousands) | | :--- | :--- | :--- | | **Total Non-current Assets** | 312,394 | 325,331 | | **Total Current Assets** | 279,872 | 235,362 | | **Total Assets** | **592,266** | **560,693** | | **Total Equity** | 487,778 | 475,376 | | **Total Liabilities** | 104,488 | 85,317 | | **Total Equity and Liabilities** | **592,266** | **560,693** | [Notes to the Financial Statements](index=7&type=section&id=Notes%20to%20the%20Financial%20Statements) The notes detail the company's basic information, accounting policies, segment information, tax status, and financial data composition, including its primary business of producing and selling functional health teas and weight-loss drugs, segmenting operations into tea products and weight-loss and other pharmaceuticals, and disclosing key customer, tax rate, EPS calculation, and dividend details - The Group's principal activities are the manufacturing and sale of functional health tea products and the sale of weight-loss and other pharmaceutical products[11](index=11&type=chunk) Segment Results for H1 2025 | Segment | Revenue (RMB in thousands) | Segment Results (RMB in thousands) | | :--- | :--- | :--- | | Tea Products Segment | 159,668 | 46,470 | | Weight-Loss and Other Pharmaceutical Products Segment | 99,245 | 1,443 | | **Total** | **258,913** | **47,913** | - In H1 2025, revenue from Customer B and Customer C (both e-commerce platforms) each accounted for over **10%** of the Group's total revenue, at **RMB 30.28 million** and **RMB 30.01 million** respectively[22](index=22&type=chunk) - Basic and diluted earnings per share for H1 2025 were **RMB 10.14 cents**, higher than **RMB 6.39 cents** in the same period last year[31](index=31&type=chunk) [Management Discussion and Analysis](index=17&type=section&id=Management%20Discussion%20and%20Analysis) [Performance Review](index=17&type=section&id=Performance%20Review) In the first half of 2025, the Group maintained a profit-centric, stable operating strategy, achieving smooth transition in offline OTC business and maturing online agency operation models through optimized channel management, significantly enhancing overall operational quality, and making progress in marketing, channel expansion, international business, and R&D innovation, laying a foundation for H2 development [Channel Strategy and Operations](index=18&type=section&id=Channel%20Strategy%20and%20Operations) The Group solidified its market position in offline channels by deepening cooperation with chain pharmacies, multi-platform promotion, and maintaining price systems, while significantly boosting online performance through refined agency operations, platform differentiation, price optimization, AI digital human live streaming, and new media marketing like Xiaohongshu, particularly focusing on core best-selling products on Douyin and leveraging digital marketing systems for efficiency - Offline channels ensured market share and sales scale through deepened cooperation with chain pharmacies, multi-platform promotion, and price control[41](index=41&type=chunk)[42](index=42&type=chunk)[43](index=43&type=chunk) - E-commerce agency operation models were refined, improving operating results across platforms through differentiated strategies, targeted price optimization initiatives, and content operation innovations, such as AI digital human live streaming[44](index=44&type=chunk)[45](index=45&type=chunk)[46](index=46&type=chunk)[48](index=48&type=chunk) - The Xiaohongshu platform was relaunched and strategically focused, driving brand awareness and sales growth through a 'three-dimensional content seeding model' and content loop[49](index=49&type=chunk) - On new business platforms like Douyin, the focus was on core best-selling products in the weight management category, applying AI technology (e.g., 'Kouzi workflow') to enhance content production efficiency and compliance, saving **40%** in labor costs[50](index=50&type=chunk)[52](index=52&type=chunk) [International Business and R&D](index=22&type=section&id=International%20Business%20and%20R%26D) International business made substantial progress with trial orders from Southeast Asian e-commerce platforms and an OEM agreement with a Vietnamese company, alongside packaging upgrades and compliance modifications for US market products; R&D expanded health efficacy research for core products through industry-academia collaboration, actively maintained health food approvals, and strengthened intellectual property by applying for **6** new patents in H1 - International business focused on the Southeast Asian market, securing trial orders with local e-commerce platforms and signing an OEM agreement with a Vietnamese company, while also completing product upgrades for the US market[53](index=53&type=chunk)[54](index=54&type=chunk)[55](index=55&type=chunk) - Through collaboration with Beijing Technology and Business University, industry-academia integration was promoted, with research indicating significant efficacy of Changrun Tea and Changjing Tea in uric acid reduction and liver damage protection, leading to **2** invention patent applications[56](index=56&type=chunk) - In H1, **3** invention patents and **3** utility model patents were applied for, and **1** invention patent was granted, deepening the intellectual property layout[58](index=58&type=chunk) [Business Outlook](index=25&type=section&id=Business%20Outlook) In the second half of 2025, the Group will leverage the 'Weight Management Year' initiative to deepen reforms, integrate online and offline sales advantages, and focus on the 'weight management' and 'bowel regularity and gastrointestinal health' sectors, continuing to promote brand rejuvenation, increase investment in new media and new retail, and continuously develop new products to meet market demand - In the second half, the focus will be on the two core areas of 'weight management' and 'gastrointestinal health,' deepening reforms, integrating online and offline channels, and leveraging new media and new retail to enhance competitiveness[60](index=60&type=chunk) [Financial Review](index=26&type=section&id=Financial%20Review) This financial review details the Group's H1 financial performance, with revenue slightly up **1.8%** driven by strong online channel growth, a modest increase in gross profit margin, higher sales and marketing expenses due to increased e-commerce platform fees, but significantly lower administrative and R&D costs, resulting in healthy operating cash flow, a stable financial position, and a low debt-to-asset ratio [Revenue Analysis](index=26&type=section&id=Revenue%20Analysis) Total revenue for H1 2025 was **RMB 259 million**, a **1.8%** year-on-year increase, primarily driven by weight-loss pharmaceuticals (**+15.0%**) and online channel products 'Orlistat' and 'Xianxian Tea' (growing **41.6%** and **53.5%** respectively), offsetting declines in the Four Teas series (**-4.7%**) and offline channels H1 2025 Revenue Composition (by Product) | Product Category | Revenue (RMB in thousands) | % of Total Revenue | YoY Change | | :--- | :--- | :--- | :--- | | Bishengyuan Changrun Tea | 30,352 | 11.7% | -35.2% | | Bishengyuan Changjing Tea | 50,290 | 19.4% | -7.5% | | Bishengyuan Xianxian Tea | 45,732 | 17.7% | +47.5% | | Bishengyuan Qingyuan Tea | 2,753 | 1.1% | -15.8% | | **Weight-Loss Pharmaceuticals** | **94,368** | **36.4%** | **+15.0%** | | Other Health Foods | 30,541 | 11.8% | -5.0% | | Other Pharmaceuticals | 4,877 | 1.9% | +6.5% | | **Total** | **258,913** | **100.0%** | **+1.8%** | - Online channel products 'Bishengyuan Orlistat' and 'Bishengyuan Xianxian Tea' achieved significant year-on-year sales growth of **41.6%** and **53.5%** respectively[62](index=62&type=chunk) [Cost, Gross Profit, and Expense Analysis](index=27&type=section&id=Cost%2C%20Gross%20Profit%2C%20and%20Expense%20Analysis) Gross profit margin for H1 was **68.6%**, a slight increase of **0.4** percentage points year-on-year; sales and marketing expenses rose **13.3%** to **RMB 125 million**, primarily due to increased e-commerce platform service and traffic acquisition fees, while administrative and R&D costs significantly decreased by **19.6%** and **68.4%** respectively, effectively controlling overall expenses - Gross profit margin slightly increased from **68.2%** to **68.6%**, primarily due to changes in product mix and higher gross profit margins for certain products[63](index=63&type=chunk) - Sales and marketing expenses increased by **13.3%** year-on-year, mainly due to higher e-commerce platform agency operation service fees and platform traffic acquisition costs[64](index=64&type=chunk)[65](index=65&type=chunk) - Administrative expenses decreased by **19.6%** year-on-year, primarily due to a reduction in non-recurring expenditures[66](index=66&type=chunk) - Research and development costs significantly decreased by **68.4%** year-on-year to **RMB 5.0 million**, mainly due to reduced investment in outsourced R&D activities[67](index=67&type=chunk) [Liquidity, Capital Resources, and Investments](index=29&type=section&id=Liquidity%2C%20Capital%20Resources%2C%20and%20Investments) The Group's working capital primarily originates from operating activities, with net cash inflow from operating activities significantly increasing to **RMB 31.8 million** in H1; period-end cash and cash equivalents rose to **RMB 165 million**, with no bank borrowings and a debt-to-asset ratio of **17.6%**, while financial assets measured at fair value were approximately **RMB 78.3 million**, mainly equity investments in various funds and companies Summary of Net Cash Flows (For the Six Months Ended June 30) | Item | 2025 (RMB in thousands) | 2024 (RMB in thousands) | | :--- | :--- | :--- | | Net Cash Inflow from Operating Activities | 31,801 | 12,354 | | Net Cash Inflow from Investing Activities | 389 | 5,574 | | Net Cash Outflow from Financing Activities | (1,803) | (2,414) | | **Cash and Cash Equivalents at End of Period** | **164,542** | **184,518** | - As of June 30, 2025, the Group had no bank borrowings, and its debt-to-asset ratio was **17.6%**[79](index=79&type=chunk)[87](index=87&type=chunk) - The Group held financial assets measured at fair value through profit or loss of **RMB 78.3 million**, and through the consolidated 'Fund No. 6,' held loans receivable of approximately **RMB 69.8 million** and restricted bank deposits of approximately **RMB 13.5 million**[73](index=73&type=chunk)[75](index=75&type=chunk) [Other Information](index=34&type=section&id=Other%20Information) [Compliance, Human Resources, and Corporate Governance](index=34&type=section&id=Compliance%2C%20Human%20Resources%2C%20and%20Corporate%20Governance) The Group strictly adheres to all laws and regulations, with no significant compliance incidents, maintaining good relationships with employees, suppliers, and customers; as of period-end, the Group had **129** employees, and in corporate governance, it complies with the Corporate Governance Code, having completed the separation of CEO and Chairman functions in June 2025, with the Audit Committee reviewing the current financial information - The Group's operations comply with relevant laws and regulations, with no significant non-compliance issues identified, and maintains good stakeholder relationships[90](index=90&type=chunk)[91](index=91&type=chunk) - As of June 30, 2025, the Group had **129** employees, with staff costs of **RMB 22.5 million** in H1[92](index=92&type=chunk) - In June 2025, Mr. Zhao Yihong was re-designated from Chief Executive Officer to Chief Strategy Officer, and Mr. Feng Bing was appointed Chief Executive Officer, with the company subsequently complying with the Corporate Governance Code's requirement for separation of Chairman and CEO functions[94](index=94&type=chunk) [Dividends, Share Repurchases, and Other Disclosures](index=36&type=section&id=Dividends%2C%20Share%20Repurchases%2C%20and%20Other%20Disclosures) The Board proposes an interim dividend of **HKD 0.15** per share and announced the specific timetable for dividend payment; during the reporting period, neither the company nor its subsidiaries purchased, sold, or redeemed any listed securities, and the company is discussing arrangements for full redemption of its participating shares in 'Fund No. 6' with the fund manager - During the first half, neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed securities[96](index=96&type=chunk) - The company is discussing arrangements and a timetable for the full cash redemption of its participating shares in 'Zhongzhou Longteng Global Opportunity Fund No. 6' with the fund manager[99](index=99&type=chunk) - Other than the disclosed dividend proposal, no other post-balance sheet events with significant impact on the Group have occurred from the end of the period to the date of this announcement[100](index=100&type=chunk)

[Company Information and Declarations](index=1&type=section&id=Company%20Information%20and%20Declarations) This section provides an overview of the company and its interim results, along with disclaimers regarding the GEM market's inherent risks [Company Overview and Disclaimer](index=1&type=section&id=1.1%20Company%20Overview%20and%20Disclaimer) This announcement presents the interim results of Xinyi Storage Holdings Limited for the six months ended June 30, 2025, with a disclaimer regarding GEM market risks - Xinyi Storage Holdings Limited (Stock Code: 08328) released its interim results announcement for the six months ended June 30, 2025[2](index=2&type=chunk) - The GEM market provides a listing platform for small and medium-sized companies, carrying higher investment risks that investors should carefully consider[2](index=2&type=chunk) [Financial Highlights](index=2&type=section&id=Financial%20Highlights) This section summarizes key financial performance indicators for the period, highlighting significant changes in revenue and profit [Summary of Key Financial Data](index=2&type=section&id=2.1%20Summary%20of%20Key%20Financial%20Data) Revenue decreased by **26.2%** to **HK$477,436 thousand**, with profit attributable to owners down **61.6%** to **HK$4,708 thousand** Key Financial Data for the Six Months Ended June 30 | Metric | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 477,436 | 646,517 | -26.2% | | Profit Attributable to Owners of the Company | 4,708 | 12,250 | -61.6% | | Earnings Per Share - Basic | 0.60 HK cents | 1.56 HK cents | -61.5% | [Condensed Consolidated Financial Statements](index=3&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements, including statements of profit or loss, financial position, changes in equity, and cash flows [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=3&type=section&id=3.1%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) Profit for the period decreased to **HK$5,854 thousand**, while total comprehensive income turned positive due to exchange differences - Profit for the period decreased from **HK$16,054 thousand** in H1 2024 to **HK$5,854 thousand** in H1 2025[4](index=4&type=chunk) - Exchange differences on translation of financial statements of overseas operations shifted from a **negative HK$37,851 thousand** in H1 2024 to a **positive HK$50,991 thousand** in H1 2025, resulting in total comprehensive income for the period changing from a **negative HK$23,948 thousand** to a **positive HK$58,512 thousand**[4](index=4&type=chunk) [Condensed Consolidated Statement of Financial Position](index=5&type=section&id=3.2%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) Total assets slightly increased, with net assets rising from **HK$963,892 thousand** to **HK$1,023,070 thousand** as of June 30, 2025 - As of June 30, 2025, total assets were **HK$2,022,722 thousand**, a slight increase from **HK$2,013,775 thousand** as of December 31, 2024[23](index=23&type=chunk) - Net assets increased from **HK$963,892 thousand** as of December 31, 2024, to **HK$1,023,070 thousand** as of June 30, 2025[8](index=8&type=chunk) [Condensed Consolidated Statement of Changes in Equity](index=7&type=section&id=3.3%20Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) Total equity attributable to owners increased from **HK$940,147 thousand** to **HK$996,677 thousand**, driven by positive comprehensive income - Total equity attributable to owners of the Company increased from **HK$940,147 thousand** as of January 1, 2025, to **HK$996,677 thousand** as of June 30, 2025[9](index=9&type=chunk) - Total comprehensive income for the period was **HK$55,729 thousand**, primarily due to exchange differences of **HK$49,354 thousand** arising from the translation of financial statements of overseas operations[9](index=9&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=8&type=section&id=3.4%20Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) Net cash from operating activities significantly increased, yet cash and cash equivalents saw a net decrease of **HK$22,222 thousand** - Net cash generated from operating activities significantly increased from **HK$26,907 thousand** in H1 2024 to **HK$129,861 thousand** in H1 2025[10](index=10&type=chunk) - Net cash used in investing activities was **HK$30,667 thousand**, and net cash used in financing activities was **HK$121,416 thousand**[10](index=10&type=chunk) - Cash and cash equivalents at the end of the period amounted to **HK$92,124 thousand**, a decrease of **HK$22,222 thousand** from the beginning of the period[10](index=10&type=chunk) [Notes to the Financial Statements](index=9&type=section&id=Notes%20to%20the%20Financial%20Statements) This section provides detailed notes supporting the condensed consolidated financial statements, covering general information, accounting policies, segment data, and other financial disclosures [General Information](index=9&type=section&id=4.1%20General%20Information) The Group's core businesses include energy storage products, PV encapsulant film production, EPC services, and automotive glass repair across multiple regions - The Group's core businesses include the production and sale of energy storage products and photovoltaic encapsulant films, as well as solar project EPC services[11](index=11&type=chunk) - Business operations span China, Malaysia, and Hong Kong[11](index=11&type=chunk) [Basis of Preparation and Accounting Policies](index=9&type=section&id=4.2%20Basis%20of%20Preparation%20and%20Accounting%20Policies) Interim financial information adheres to GEM Listing Rules and HKAS 34, with no significant impact from new or revised accounting standards - This interim financial information is prepared in accordance with the GEM Listing Rules and Hong Kong Accounting Standard 34[12](index=12&type=chunk) - The newly adopted Hong Kong Accounting Standard 21 (Amendment) "Lack of Exchangeability" has no significant impact on the Group's results and financial position[13](index=13&type=chunk) - New or revised Hong Kong Financial Reporting Standards issued but not yet effective are not expected to have a significant impact on the Group's consolidated financial performance and position[14](index=14&type=chunk) [Adoption of New or Revised Hong Kong Financial Reporting Standards](index=9&type=section&id=4.2.1%20Adoption%20of%20New%20or%20Revised%20Hong%20Kong%20Financial%20Reporting%20Standards) HKAS 21 (Amendment) "Lack of Exchangeability" was adopted, with no significant impact on the Group's financial performance - Hong Kong Accounting Standard 21 (Amendment) "Lack of Exchangeability" was first applied, effective from January 1, 2025[13](index=13&type=chunk) - The adoption of new standards has no significant impact on the Group's results and financial position[13](index=13&type=chunk) [New or Revised Hong Kong Financial Reporting Standards Issued But Not Yet Effective](index=10&type=section&id=4.2.2%20New%20or%20Revised%20Hong%20Kong%20Financial%20Reporting%20Standards%20Issued%20But%20Not%20Yet%20Effective) Several new or revised HKFRSs are issued but not yet effective, with no anticipated material impact on the Group's financials - Several new or revised Hong Kong Financial Reporting Standards have been issued but are not yet effective, including HKFRS 9, 7, 18, and 19[14](index=14&type=chunk) - Directors anticipate that the application of these new standards will not have a significant impact on the Group's consolidated financial performance and position[14](index=14&type=chunk) [Revenue and Segment Information](index=11&type=section&id=4.3%20Revenue%20and%20Segment%20Information) Total revenue for H1 2025 decreased by **26.2%**, driven by declines in EPC and PV encapsulant film, despite energy storage growth - The Group identifies five operating segments: energy storage business, EPC services, photovoltaic encapsulant film, automotive glass repair and replacement services, and other segments[16](index=16&type=chunk) - Total revenue for H1 2025 was **HK$477,436 thousand**, a **26.2%** decrease from **HK$646,517 thousand** in H1 2024[17](index=17&type=chunk)[18](index=18&type=chunk) [Segment Results](index=11&type=section&id=4.3.1%20Segment%20Results) Energy storage revenue grew **60.1%**, while EPC and PV encapsulant film declined, resulting in a **25.5%** drop in total gross profit Segment Revenue and Gross Profit (For the Six Months Ended June 30) | Segment | 2025 Revenue (HK$ thousand) | 2024 Revenue (HK$ thousand) | Revenue Change (%) | 2025 Gross Profit (HK$ thousand) | 2024 Gross Profit (HK$ thousand) | Gross Profit Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Energy Storage Business | 105,521 | 65,926 | +60.1% | 6,370 | 5,728 | +11.2% | | EPC Services | 256,620 | 323,963 | -20.8% | 61,249 | 89,516 | -31.6% | | Photovoltaic Encapsulant Film | 74,241 | 224,172 | -66.9% | 572 | 8,391 | -93.2% | | Automotive Glass Repair and Replacement Services | 30,028 | 25,976 | +15.6% | 9,545 | 7,340 | +30.0% | | Others | 11,026 | 6,480 | +70.2% | 5,553 | 778 | +613.8% | | **Total** | **477,436** | **646,517** | **-26.2%** | **83,289** | **111,753** | **-25.5%** | - In H1 2025, revenue from Customer A accounted for **HK$75,941 thousand** of total energy storage business revenue, whereas no single customer contributed over **10%** in H1 2024[20](index=20&type=chunk) [Geographical Information of Revenue](index=14&type=section&id=4.3.2%20Geographical%20Information%20of%20Revenue) China and Canada's revenue declined in H1 2025, while Hong Kong and other regions experienced growth Sales by Geographical Location of Customers (For the Six Months Ended June 30) | Region | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | China | 278,300 | 396,828 | -29.9% | | Canada | 152,341 | 217,671 | -30.0% | | Hong Kong | 30,034 | 25,993 | +15.5% | | Others | 16,761 | 6,025 | +178.2% | | **Total** | **477,436** | **646,517** | **-26.2%** | [Segment Assets and Liabilities](index=15&type=section&id=4.3.3%20Segment%20Assets%20and%20Liabilities) Total assets reached **HK$2,022,427 thousand** and liabilities **HK$636,175 thousand**, with non-current assets mainly in China Segment Assets and Liabilities (As of June 30, 2025) | Segment | Total Assets (HK$ thousand) | Total Liabilities (HK$ thousand) | | :--- | :--- | :--- | | Energy Storage Business | 460,857 | (229,780) | | EPC Services | 986,049 | (245,112) | | Photovoltaic Encapsulant Film | 470,859 | (132,498) | | Automotive Glass Repair and Replacement Services | 42,646 | (13,690) | | Others | 62,016 | (15,095) | | **Total** | **2,022,427** | **(636,175)** | - As of June 30, 2025, the Group's non-current assets, excluding financial instruments and deferred tax assets, were primarily located in China (**HK$530,300 thousand**), followed by Hong Kong (**HK$36,310 thousand**) and Malaysia (**HK$20,723 thousand**)[24](index=24&type=chunk) [Other Income and Net Other Gains](index=16&type=section&id=4.4%20Other%20Income%20and%20Net%20Other%20Gains) Other income decreased due to reduced government grants, while net other gains significantly increased from asset disposals Other Income and Net Other Gains (For the Six Months Ended June 30) | Metric | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | **Other Income** | | | | | Government grants | 409 | 1,756 | -76.7% | | Others | 7,159 | 8,872 | -19.3% | | **Total Other Income** | **7,568** | **10,628** | **-28.7%** | | **Net Other Gains** | | | | | Net gain on disposal of scrap, property, plant and equipment or intangible assets | 5,366 | 411 | +1205.6% | | Net exchange (loss)/gain | (3,750) | 518 | -824.3% | | **Total Net Other Gains** | **1,616** | **929** | **+73.9%** | - The decrease in other income was primarily due to reduced additional input VAT deductions[70](index=70&type=chunk) - The increase in net other gains was mainly attributable to gains from the disposal of intangible assets and other assets of the mobile energy storage business, partially offset by net exchange losses[71](index=71&type=chunk) [Finance Income and Finance Costs](index=17&type=section&id=4.5%20Finance%20Income%20and%20Finance%20Costs) Finance income and costs both decreased in H1 2025, with lower finance costs driven by optimized borrowing rates and reduced average balances Finance Income and Finance Costs (For the Six Months Ended June 30) | Metric | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Finance income | 445 | 675 | -34.1% | | Finance costs (before capitalisation) | 7,830 | 11,630 | -32.7% | | Less: Amount capitalised | (392) | (2,414) | -83.7% | | **Finance costs (after capitalisation)** | **7,438** | **9,216** | **-19.3%** | - The decrease in finance costs was primarily due to the refinancing of HKD bank borrowings with RMB bank borrowings and a reduction in the average balance of bank borrowings[75](index=75&type=chunk) - The capitalisation rate for borrowing costs decreased from **2.02%** in 2024 to **1.54%** in 2025[26](index=26&type=chunk) [Profit Before Income Tax](index=18&type=section&id=4.6%20Profit%20Before%20Income%20Tax) Profit before income tax significantly decreased to **HK$11,367 thousand** in H1 2025, impacted by various operating expenses Deductions from Profit Before Income Tax (For the Six Months Ended June 30) | Item | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Cost of inventories | 325,445 | 346,457 | | Write-down and provision for impairment of inventories | 37 | 812 | | Depreciation expenses | 23,337 | 28,419 | | Amortisation expenses | 2,163 | 2,021 | | Employee benefit expenses | 45,742 | 52,802 | | Research and development expenses | 14,563 | 20,014 | - Profit before income tax decreased from **HK$24,686 thousand** in H1 2024 to **HK$11,367 thousand** in H1 2025[19](index=19&type=chunk) [Income Tax Expense](index=18&type=section&id=4.7%20Income%20Tax%20Expense) Income tax expense decreased by **36.1%** to **HK$5,513 thousand**, primarily due to lower Canadian EPC profit and preferential tax rates for some Chinese subsidiaries Income Tax Expense (For the Six Months Ended June 30) | Tax Type | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Hong Kong profits tax | 560 | 234 | +139.3% | | PRC corporate income tax | 2,042 | 14,478 | -85.9% | | Canada corporate income tax | 300 | 1,664 | -82.0% | | Deferred tax expense/(credit) | 2,611 | (7,744) | +133.7% | | **Total Income Tax Expense** | **5,513** | **8,632** | **-36.1%** | - The decrease in income tax expense was mainly due to a reduction in profit before income tax attributable to Canadian EPC services[76](index=76&type=chunk) - Three PRC subsidiaries are recognised as high-tech enterprises, enjoying a **15%** preferential corporate income tax rate[33](index=33&type=chunk) [Earnings Per Share](index=19&type=section&id=4.8%20Earnings%20Per%20Share) Basic earnings per share decreased by **61.5%** to **0.60 HK cents**, with diluted EPS remaining equal due to no dilutive shares Basic Earnings Per Share (For the Six Months Ended June 30) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Profit attributable to owners of the Company (HK$ thousand) | 4,708 | 12,250 | | Weighted average number of ordinary shares in issue (thousand shares) | 785,534 | 785,437 | | **Basic earnings per share (HK cents)** | **0.60** | **1.56** | - Diluted earnings per share were the same as basic earnings per share, as there were no potential dilutive shares[31](index=31&type=chunk) [Basic Earnings Per Share](index=19&type=section&id=4.8.1%20Basic%20Earnings%20Per%20Share) Basic earnings per share for H1 2025 was **0.60 HK cents**, calculated from profit attributable to owners and weighted average shares - Basic earnings per share was **0.60 HK cents**, a decrease from **1.56 HK cents** in the prior year[30](index=30&type=chunk) [Diluted Earnings Per Share](index=19&type=section&id=4.8.2%20Diluted%20Earnings%20Per%20Share) Diluted earnings per share equals basic earnings per share, as no potential dilutive ordinary shares existed - For the six months ended June 30, 2025 and 2024, diluted earnings per share were equal to basic earnings per share, as there were no potential dilutive ordinary shares[31](index=31&type=chunk) [Dividends](index=19&type=section&id=4.9%20Dividends) No interim dividend was declared for the six months ended June 30, 2025 - No interim dividend was declared for H1 2025, consistent with H1 2024[32](index=32&type=chunk) [Property, Plant and Equipment and Intangible Assets](index=20&type=section&id=4.10%20Property%2C%20Plant%20and%20Equipment%20and%20Intangible%20Assets) Carrying amounts of property, plant and equipment and intangible assets slightly decreased to **HK$527,046 thousand** and **HK$35,676 thousand** Changes in Carrying Amounts of Property, Plant and Equipment and Intangible Assets (For the Six Months Ended June 30) | Item | June 30, 2025 (HK$ thousand) | January 1, 2025 (HK$ thousand) | June 30, 2024 (HK$ thousand) | January 1, 2024 (HK$ thousand) | | :--- | :--- | :--- | :--- | :--- | | Property, plant and equipment | 527,046 | 534,033 | 716,927 | 735,904 | | Intangible assets | 35,676 | 36,816 | 102,765 | 89,200 | - In H1 2025, additions to property, plant and equipment amounted to **HK$7,896 thousand**, with no additions to intangible assets[34](index=34&type=chunk) - Exchange adjustments had a positive impact of **HK$14,929 thousand** on property, plant and equipment and **HK$1,023 thousand** on intangible assets[34](index=34&type=chunk) [Contract Assets, Trade and Other Receivables and Prepayments](index=21&type=section&id=4.11%20Contract%20Assets%2C%20Trade%20and%20Other%20Receivables%20and%20Prepayments) Current contract assets, trade and other receivables, and prepayments decreased to **HK$609,912 thousand**, reflecting shifts in trade receivables aging and reduced bills receivable Contract Assets, Trade and Other Receivables and Prepayments (As of June 30, 2025) | Item | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Finance lease — present value of minimum lease payments | 541,356 | 504,051 | | Trade receivables | 338,387 | 340,492 | | Contract assets | 132,934 | 143,931 | | Bills receivable at fair value through other comprehensive income | 33,264 | 92,837 | | Prepayments | 56,558 | 27,102 | | **Total current portion** | **609,912** | **652,323** | [Trade Receivables](index=22&type=section&id=4.11.1%20Trade%20Receivables) Trade receivables totaled **HK$338,387 thousand**, with a shift in aging from **0-90 days** to **91-365 days** as of June 30, 2025 Aging Analysis of Trade Receivables (As of June 30, 2025) | Aging | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | 0 to 90 days | 181,942 | 232,797 | | 91 to 180 days | 68,876 | 42,878 | | 181 to 365 days | 59,806 | 28,770 | | Over 365 days | 27,763 | 36,047 | | **Total** | **338,387** | **340,492** | [Bills Receivable and Transferred Financial Assets](index=22&type=section&id=4.11.2%20Bills%20Receivable%20and%20Transferred%20Financial%20Assets) Bills receivable mature within six months; endorsed bills not fully derecognized totaled **HK$24,365 thousand**, while derecognized bills significantly decreased - As of June 30, 2025, the carrying amount of endorsed bills not fully derecognized was **HK$24,365 thousand**, and discounted bills had a carrying amount of zero[37](index=37&type=chunk) - The total carrying amount of outstanding endorsed bills transferred and derecognized was **HK$23,219 thousand**, and outstanding discounted bills was **HK$74,668 thousand**, a significant decrease from December 31, 2024[38](index=38&type=chunk) [Contract Liabilities, Trade and Other Payables](index=24&type=section&id=4.12%20Contract%20Liabilities%2C%20Trade%20and%20Other%20Payables) Total contract liabilities, trade and other payables increased to **HK$567,488 thousand**, with a shift in trade payables aging Contract Liabilities, Trade and Other Payables (As of June 30, 2025) | Item | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Trade payables | 204,802 | 175,281 | | Bills payable | 215,468 | 163,297 | | Contract liabilities | 24,400 | 19,696 | | Accrued salaries and bonuses | 13,162 | 24,645 | | Other payables for acquisition of property, plant and equipment | 36,345 | 60,003 | | Other creditors and accrued charges | 43,439 | 36,041 | | VAT payable | 3,620 | 9,237 | | Deferred income related to government grants | 26,252 | 25,513 | | **Total** | **567,488** | **513,713** | - Total trade payables increased from **HK$175,281 thousand** as of December 31, 2024, to **HK$204,802 thousand** as of June 30, 2025[39](index=39&type=chunk) [Bank Borrowings](index=25&type=section&id=4.13%20Bank%20Borrowings) Bank borrowings decreased by **22.6%** to **HK$362,269 thousand**, with a shift to fixed rates and **HK$1,018.5 million** in unutilized facilities Repayment Schedule of Bank Borrowings (As of June 30, 2025) | Repayment Term | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | On demand or within one year | 238,612 | 312,927 | | In the second year | 123,657 | 154,896 | | **Repayable in full within five years** | **362,269** | **467,823** | - Borrowings at floating annual interest rates decreased from **HK$346,915 thousand** to **HK$101,782 thousand**, while those at fixed annual interest rates increased from **HK$108,309 thousand** to **HK$260,487 thousand**[41](index=41&type=chunk) - The Group had **HK$1,018,503 thousand** in unutilized bank facilities[41](index=41&type=chunk) [Share Capital](index=25&type=section&id=4.14%20Share%20Capital) Authorised share capital was **HK$20,000,000 thousand**, with issued and fully paid capital of **HK$7,855 thousand**, and share count unchanged Share Capital Information (As of June 30, 2025) | Item | Number of Shares | HK$ thousand | | :--- | :--- | :--- | | Authorised: Ordinary shares of HK$0.01 each | 2,000,000,000,000 | 20,000,000 | | Issued and fully paid: As of June 30, 2025 | 785,533,629.38 | 7,855 | [Share Options](index=26&type=section&id=4.15%20Share%20Options) Outstanding share options decreased to **7,341,103** as of June 30, 2025, with new grants offset by significant forfeitures Movements in Share Options (For the Six Months Ended June 30) | Item | 2025 Average Exercise Price (HK$) | 2025 Share Options (units) | 2024 Average Exercise Price (HK$) | 2024 Share Options (units) | | :--- | :--- | :--- | :--- | :--- | | At January 1 | 2.71 | 16,779,504 | 2.87 | 16,079,071 | | Granted | 0.81 | 1,680,000 | 1.78 | 2,200,000 | | Exercised | Not applicable | — | 1.36 | (217,648) | | Forfeited | 2.24 | (11,118,401) | 2.99 | (300,550) | | **At June 30** | **2.98** | **7,341,103** | **2.75** | **17,760,873** | - On March 20, 2025, **1,680,000** share options were granted with an exercise price of **HK$0.81**, valid until March 31, 2029[42](index=42&type=chunk) - As of June 30, 2025, **2,351,403** share options were exercisable[42](index=42&type=chunk) [Fair Value Measurement](index=27&type=section&id=4.16%20Fair%20Value%20Measurement) Financial assets and liabilities' fair values approximate carrying amounts, with Level 2 bills receivable and Level 3 financial assets measured at fair value through OCI - The fair values of financial assets and liabilities carried at amortised cost approximate their carrying amounts[46](index=46&type=chunk) - The relative reliability of significant inputs used in fair value measurements of financial assets or liabilities is categorised into three levels: Level 1 (quoted prices in active markets), Level 2 (observable inputs), and Level 3 (unobservable inputs)[46](index=46&type=chunk)[47](index=47&type=chunk) [Fair Value Hierarchy](index=28&type=section&id=4.16.1%20Fair%20Value%20Hierarchy) Level 2 fair value measurement was used for bills receivable (**HK$33,264 thousand**), and Level 3 for financial assets (**HK$42,552 thousand**) Financial Assets Measured at Fair Value (As of June 30, 2025) | Item | Level 1 (HK$ thousand) | Level 2 (HK$ thousand) | Level 3 (HK$ thousand) | Total (HK$ thousand) | | :--- | :--- | :--- | :--- | :--- | | Bills receivable at fair value through other comprehensive income | — | 33,264 | — | 33,264 | | Financial assets at fair value through other comprehensive income | — | — | 42,552 | 42,552 | - Level 2 fair value measurement for bills receivable is calculated by discounting available interest rates for instruments with similar terms, credit risk, and remaining maturities offered by banks[48](index=48&type=chunk) - Level 3 instruments refer to unlisted equity, with fair value determined using the discounted cash flow method[49](index=49&type=chunk) [Reconciliation of Level 3 Fair Value Measurements](index=29&type=section&id=4.16.2%20Reconciliation%20of%20Level%203%20Fair%20Value%20Measurements) Unlisted equity investments totaled **HK$42,552 thousand**, impacted by fair value changes in OCI and exchange adjustments Reconciliation of Level 3 Fair Value Measurements for Unlisted Equity Investments (As of June 30, 2025) | Item | HK$ thousand | | :--- | :--- | | At January 1, 2025 (audited) | 39,783 | | Fair value changes recognised in other comprehensive income | 1,583 | | Exchange adjustments | 1,186 | | **At June 30, 2025 (unaudited)** | **42,552** | - There were no changes in the valuation methods and techniques used for fair value measurements compared to prior reporting periods[51](index=51&type=chunk) [Related Party Transactions](index=30&type=section&id=4.17%20Related%20Party%20Transactions) The Group conducted diverse transactions with Xinyi Glass, Xinyi Solar subsidiaries, and other related parties, while key management compensation decreased - Related party transactions with subsidiaries of Xinyi Glass Holdings Limited included purchases of automotive glass and consumables, sales of energy storage products, automotive glass, and electricity, and receipt of management fees[52](index=52&type=chunk) - Related party transactions with subsidiaries of Xinyi Solar Holdings Limited primarily involved sales of energy storage products and photovoltaic encapsulant films[52](index=52&type=chunk) - Key management personnel compensation decreased from **HK$6,091 thousand** in H1 2024 to **HK$5,071 thousand** in H1 2025[53](index=53&type=chunk) [Capital Commitments](index=31&type=section&id=4.18%20Capital%20Commitments) Contracted but unprovided capital expenditure significantly increased to **HK$25,800 thousand**, mainly for Indonesian encapsulant film facilities Capital Commitments (As of June 30, 2025) | Item | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Contracted but not provided for | 25,800 | 12,800 | - Capital commitments primarily relate to the acquisition of property, plant and equipment and the development of the encapsulant film business in Indonesia[80](index=80&type=chunk) [Business Review and Prospects](index=32&type=section&id=Business%20Review%20and%20Prospects) This section reviews the Group's business performance across its segments and outlines future strategies and market outlook [Energy Storage Business](index=32&type=section&id=5.1%20Energy%20Storage%20Business) Energy storage business revenue grew **60.1%** in H1 2025, driven by resumed production and delivery of industrial and commercial projects - The Group focuses on lithium battery-based energy storage systems and household "PV-storage-charging" products, continuously increasing R&D investment[56](index=56&type=chunk) - Industrial and commercial energy storage project revenue was low in H1 2024, but production and delivery normalised in Q4 2024 after technology switching and design optimisation[57](index=57&type=chunk) - Energy storage business revenue increased by **60.1%** in H1 2025 compared to the prior year[57](index=57&type=chunk) [Photovoltaic Power Station Engineering, Procurement and Construction ("EPC") Services Business](index=33&type=section&id=5.2%20Photovoltaic%20Power%20Station%20Engineering%2C%20Procurement%20and%20Construction%20%28%22EPC%22%29%20Services%20Business) PV EPC services saw **62.7%** growth in China, a decline in Canada, and a nearing completion project in Indonesia - Driven by policies, China's industrial and commercial distributed PV projects experienced a rush to install in H1 2025, with installation volume increasing by **62.7%** year-on-year[59](index=59&type=chunk) - EPC service revenue in Canada decreased due to the federal government's suspension of subsidy applications, but the Group is expanding industrial and commercial projects and transitioning to a "PV-storage EPC" model[59](index=59&type=chunk) - A joint venture was established in Indonesia to provide PV EPC services, with its first project nearing completion of installation[60](index=60&type=chunk) [Photovoltaic Encapsulant Film Business](index=34&type=section&id=5.3%20Photovoltaic%20Encapsulant%20Film%20Business) PV encapsulant film business faces oversupply and price declines, leading to cautious sales and reduced H1 2025 revenue - The Group's photovoltaic encapsulant film products primarily include EVA, POE, and co-extruded POE (EPE) films[61](index=61&type=chunk) - The photovoltaic encapsulant film industry faces severe challenges from supply-demand imbalance, intensified competition, and declining product sales prices and gross margins[61](index=61&type=chunk) - The Group adopted a cautious sales strategy, controlling order intake, which led to a decrease in photovoltaic encapsulant film business revenue in H1 2025 compared to the prior year[61](index=61&type=chunk) [Outlook](index=34&type=section&id=5.4%20Outlook) The Group, now a 3E new energy solution provider, plans R&D, overseas expansion, an Indonesian PV encapsulant film base, and North American PV-storage EPC integration - The Group has transformed into a diversified comprehensive solution provider primarily focused on energy storage, EPC services, and EVA encapsulant film, referred to as the "3E" new energy businesses[62](index=62&type=chunk) - The Group will continue to focus on market expansion, strengthening R&D, optimising product quality, and expanding into overseas markets[63](index=63&type=chunk) - Plans include establishing a photovoltaic encapsulant film production base in Surabaya, Indonesia, to meet local and regional demand and address international trade barriers[64](index=64&type=chunk) - The Group will further deepen its North American PV-storage EPC business layout, enhance the penetration rate of integrated PV-storage solutions, and expand the Canadian commercial PV EPC market[63](index=63&type=chunk) [Financial Review](index=35&type=section&id=Financial%20Review) This section provides a detailed analysis of the Group's financial performance, resources, and related policies for the reporting period [Revenue](index=35&type=section&id=6.1%20Revenue) Total revenue decreased by **26.2%** to **HK$477.4 million**, with energy storage and automotive glass growing, but EPC and PV encapsulant film declining Segment Revenue Contribution and Changes (For the Six Months Ended June 30) | Segment | 2025 (HK$ million) | Contribution (%) | 2024 (HK$ million) | Contribution (%) | Change (HK$ million) | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Energy Storage Business | 105.5 | 22.1 | 65.9 | 10.2 | 39.6 | 60.1 | | EPC Services | 256.6 | 53.7 | 324.0 | 50.1 | (67.4) | (20.8) | | Photovoltaic Encapsulant Film | 74.2 | 15.6 | 224.2 | 34.7 | (150.0) | (66.9) | | Automotive Glass Repair and Replacement Services | 30.1 | 6.3 | 26.0 | 4.0 | 4.1 | 15.8 | | Others | 11.0 | 2.3 | 6.4 | 1.0 | 4.6 | 71.9 | | **Total Revenue** | **477.4** | **100.0** | **646.5** | **100.0** | **(169.1)** | **(26.2)** | - The increase in energy storage business revenue was mainly due to the resumption of industrial and commercial energy storage product deliveries[65](index=65&type=chunk) - The decrease in EPC service revenue was primarily due to lower average selling prices in the PRC market and reduced installation volume in the Canadian market[65](index=65&type=chunk) - The decrease in photovoltaic encapsulant film revenue was mainly due to lower average selling prices caused by market oversupply[65](index=65&type=chunk) [Cost of Revenue](index=37&type=section&id=6.2%20Cost%20of%20Revenue) Cost of revenue totaled **HK$394.1 million**, yielding **HK$83.3 million** gross profit and a **17.4%** margin, despite declines in EPC and PV encapsulant film margins - The increase in gross profit from the energy storage business was mainly due to increased revenue, but the gross profit margin decreased due to the relatively lower gross profit margin of industrial and commercial energy storage products[67](index=67&type=chunk) - The decrease in gross profit from EPC services was mainly due to reduced revenue and gross profit margin, with the latter attributed to lower average selling prices in the PRC market[68](index=68&type=chunk) - The decrease in gross profit from photovoltaic encapsulant film was mainly due to reduced revenue and gross profit margin, with the latter attributed to increased unit costs due to lower sales volume[68](index=68&type=chunk) - Total gross profit decreased from **HK$111.8 million** in H1 2024 to **HK$83.3 million** in H1 2025, while the gross profit margin slightly increased from **17.3%** to **17.4%**[69](index=69&type=chunk) [Other Income](index=38&type=section&id=6.3%20Other%20Income) Other income decreased in H1 2025, mainly due to reduced additional input VAT deductions and electricity sales - Other income in H1 2025 primarily refers to additional input VAT deductions and electricity sales revenue[70](index=70&type=chunk) - The decrease in other income was mainly due to reduced additional input VAT deductions during the period[70](index=70&type=chunk) [Net Other Gains](index=38&type=section&id=6.4%20Net%20Other%20Gains) Net other gains in H1 2025 comprised asset disposal gains, partially offset by net exchange losses - Net other gains in H1 2025 included gains from the disposal of intangible assets and other assets of the mobile energy storage business, partially offset by net exchange losses[71](index=71&type=chunk) [Selling and Marketing Costs](index=38&type=section&id=6.5%20Selling%20and%20Marketing%20Costs) Selling and marketing costs rose by **HK$3.0 million** to **HK$18.6 million** in H1 2025, mainly due to increased advertising - Selling and marketing costs increased from **HK$15.6 million** in H1 2024 to **HK$18.6 million** in H1 2025, primarily due to increased advertising expenses[72](index=72&type=chunk) [Administrative Expenses](index=38&type=section&id=6.6%20Administrative%20Expenses) Administrative expenses decreased by **HK$6.5 million** to **HK$67.9 million** in H1 2025, driven by lower share-based payments, R&D, and depreciation - Administrative expenses decreased from **HK$74.4 million** in H1 2024 to **HK$67.9 million** in H1 2025[73](index=73&type=chunk) - The decrease was attributed to reduced share-based payments, lower lithium battery R&D expenses, and decreased depreciation of property and equipment[73](index=73&type=chunk) [Share of Results of Joint Ventures](index=38&type=section&id=6.7%20Share%20of%20Results%20of%20Joint%20Ventures) Share of results of joint ventures significantly increased, mainly from PT Xinkai Solar Indonesia, whose first project installation concentrated in H1 2025 - Share of results of joint ventures primarily came from the Indonesian joint venture PT Xinkai Solar Indonesia, with increased contribution compared to H1 2024[74](index=74&type=chunk) - The increase in results was mainly because PT Xinkai's operations commenced in H2 2024, and the installation of its first project was primarily concentrated in H1 2025[74](index=74&type=chunk) [Finance Costs](index=39&type=section&id=6.8%20Finance%20Costs) Finance costs decreased by **HK$1.8 million** to **HK$7.4 million**, driven by refinancing to lower-interest RMB borrowings and reduced average bank balances - Finance costs decreased from **HK$9.2 million** in H1 2024 to **HK$7.4 million** in H1 2025[75](index=75&type=chunk) - The decrease was due to refinancing HKD borrowings with RMB borrowings (which have lower interest rates) and a reduction in the average balance of bank borrowings[75](index=75&type=chunk) [Income Tax Expense](index=39&type=section&id=6.9%20Income%20Tax%20Expense) Income tax expense decreased to **HK$5.5 million**, mainly due to lower Canadian EPC profit and preferential tax rates for some Chinese subsidiaries - Income tax expense decreased from **HK$8.6 million** in H1 2024 to **HK$5.5 million** in H1 2025[76](index=76&type=chunk) - The decrease in income tax expense was mainly due to a reduction in profit before income tax attributable to Canadian EPC services[76](index=76&type=chunk) - Three PRC subsidiaries enjoy a **15%** preferential corporate income tax rate and R&D expense tax incentives[76](index=76&type=chunk) [Profit Attributable to Owners of the Company](index=39&type=section&id=6.10%20Profit%20Attributable%20to%20Owners%20of%20the%20Company) Profit attributable to owners significantly decreased to **HK$4.7 million** in H1 2025, reflecting the Group's operational performance - Profit attributable to owners of the Company decreased from **HK$12.3 million** in H1 2024 to **HK$4.7 million** in H1 2025[77](index=77&type=chunk) - The decrease in profitability was primarily due to the Group's operational performance[77](index=77&type=chunk) [Financial Resources and Liquidity](index=39&type=section&id=6.11%20Financial%20Resources%20and%20Liquidity) Net current assets were **HK$48.8 million**, cash and cash equivalents **HK$92.1 million**, and gearing ratio decreased to **26.4%** due to reduced bank borrowings - As of June 30, 2025, net current assets were **HK$48.8 million**, a decrease from **HK$70.5 million** as of December 31, 2024[78](index=78&type=chunk) - Cash and cash equivalents amounted to **HK$92.1 million**, a decrease from **HK$111.7 million** as of December 31, 2024[78](index=78&type=chunk) - The gearing ratio decreased from **36.9%** as of December 31, 2024, to **26.4%** as of June 30, 2025, primarily due to reduced bank borrowings[78](index=78&type=chunk) [Capital Expenditure and Commitments](index=40&type=section&id=6.12%20Capital%20Expenditure%20and%20Commitments) Capital expenditure was **HK$19.5 million** for new PV encapsulant film equipment, with commitments rising to **HK$25.8 million** for Indonesian film business development - Capital expenditure for H1 2025 was **HK$19.5 million**, primarily related to the acquisition of new equipment for the photovoltaic encapsulant film business[80](index=80&type=chunk) - Contracted but unprovided capital commitments amounted to **HK$25.8 million**, mainly related to land acquisition, plant construction, and machinery procurement for the Indonesian encapsulant film business[80](index=80&type=chunk) [Pledge of Assets](index=40&type=section&id=6.13%20Pledge%20of%20Assets) Bank balances of **HK$0.7 million** were pledged as security for the Group's bills payable as of June 30, 2025 - As of June 30, 2025, bank balances of **HK$0.7 million** were pledged to secure the Group's bills payable[81](index=81&type=chunk) [Employees and Remuneration Policy](index=40&type=section&id=6.14%20Employees%20and%20Remuneration%20Policy) The Group had **350** full-time employees, a decrease from **445**, offering training, market-aligned remuneration, and retirement plans - As of June 30, 2025, the Group had **350** full-time employees, a decrease from **445** as of December 31, 2024[82](index=82&type=chunk) - Employees are distributed across China (**200**), Hong Kong (**70**), and Malaysia and Canada (**80**)[82](index=82&type=chunk) - The Group provides employee training, remuneration and benefits aligned with market conditions, and offers discretionary bonuses and defined contribution retirement plans[82](index=82&type=chunk) [Treasury Policy and Foreign Currency Fluctuation Risk](index=41&type=section&id=6.15%20Treasury%20Policy%20and%20Foreign%20Currency%20Fluctuation%20Risk) Operating in HKD, RMB, and CAD, the Group saw RMB appreciation increase exchange reserves by **HK$49.4 million**, with no significant exchange difficulties and potential future hedging - The Group's primary transaction currencies are HKD, RMB, and CAD[83](index=83&type=chunk) - In H1 2025, the appreciation of RMB against HKD led to an increase of **HK$49.4 million** in exchange reserves[83](index=83&type=chunk) - The Group has not encountered significant difficulties due to exchange rate fluctuations and may use financial instruments for hedging purposes when appropriate, though none were used in H1 2025[83](index=83&type=chunk) [Material Investments, Acquisitions and Disposals](index=41&type=section&id=6.16%20Material%20Investments%2C%20Acquisitions%20and%20Disposals) No material investments exceeding **5%** of total assets, significant acquisitions, or disposals occurred, with no other major investment plans beyond the Indonesian encapsulant film business - As of June 30, 2025, no material investments exceeding **5%** of the Group's total assets were held[84](index=84&type=chunk) - In H1 2025, there were no material acquisitions or disposals of subsidiaries and associates[84](index=84&type=chunk) - Other than the disclosed plans for the Indonesian encapsulant film business production facilities, there were no other material investment or capital asset increase plans[84](index=84&type=chunk) [Contingent Liabilities](index=41&type=section&id=6.17%20Contingent%20Liabilities) The Group had no material contingent liabilities as of June 30, 2025 - As of June 30, 2025, the Group had no material contingent liabilities[85](index=85&type=chunk) [Events After the Reporting Period](index=41&type=section&id=6.18%20Events%20After%20the%20Reporting%20Period) No significant events occurred after June 30, 2025, up to the announcement date - No significant events occurred after June 30, 2025, and up to the date of this announcement[86](index=86&type=chunk) [Other Information](index=42&type=section&id=Other%20Information) This section covers additional disclosures including share option schemes, securities transactions, corporate governance, and board information [Share Option Scheme](index=42&type=section&id=7.1%20Share%20Option%20Scheme) Under the 2017 scheme, **1,680,000** share options were granted in March 2025, vesting over three years until March 2029 - In March 2025, **1,680,000** share options were granted under the share option scheme adopted in May 2017[87](index=87&type=chunk) - The share options are valid from March 20, 2025, to March 31, 2029, and vest over three years[87](index=87&type=chunk) [Purchase, Sale or Redemption of Listed Securities](index=42&type=section&id=7.2%20Purchase%2C%20Sale%20or%20Redemption%20of%20Listed%20Securities) Neither the company nor its subsidiaries purchased, sold, or redeemed any listed securities in H1 2025 - In H1 2025, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[88](index=88&type=chunk) [No Competing Business](index=42&type=section&id=7.3%20No%20Competing%20Business) No directors, controlling shareholders, or their associates have interests in competing businesses or other conflicts of interest - Neither the directors nor the controlling shareholders and their associates hold any interests in any business directly or indirectly competing with the Group[89](index=89&type=chunk) - There are no other existing or potential conflicts of interest between any such persons and the Group[89](index=89&type=chunk) [Corporate Governance](index=42&type=section&id=7.4%20Corporate%20Governance) Directors confirm compliance with GEM Listing Rules' Corporate Governance Code throughout H1 2025 - The Company has complied with the applicable code provisions of the Corporate Governance Code as set out in Appendix C1 Part 2 of the GEM Listing Rules throughout H1 2025[90](index=90&type=chunk) [Model Code for Securities Transactions by Directors](index=42&type=section&id=7.5%20Model%20Code%20for%20Securities%20Transactions%20by%20Directors) The company adopted a strict model code for directors' securities transactions, with all directors confirming compliance in H1 2025 - The Company has adopted a model code for securities transactions by directors with terms no less exacting than those in the GEM Listing Rules[91](index=91&type=chunk) - All directors have confirmed compliance with the required standards of dealings and their code of conduct in H1 2025[91](index=91&type=chunk) [Interim Dividend](index=42&type=section&id=7.6%20Interim%20Dividend) Directors do not recommend paying any interim dividend for H1 2025 - The directors do not recommend paying any interim dividend for H1 2025, consistent with H1 2024[92](index=92&type=chunk) [Audit Committee](index=43&type=section&id=7.7%20Audit%20Committee) The Audit Committee, composed of three independent non-executive directors, reviewed H1 2025 unaudited interim results and oversees financial reporting and controls - The Audit Committee comprises entirely independent non-executive directors Mr. Wang Guisheng (Chairman), Mr. Wu Weixiong, and Mr. Chen Keqin[93](index=93&type=chunk) - Its primary responsibilities include reviewing and overseeing the Group's financial reporting process, risk management, and internal control systems[93](index=93&type=chunk) - The Audit Committee has reviewed the Company's unaudited interim results for H1 2025[93](index=93&type=chunk) [Publication of Interim Report](index=43&type=section&id=7.8%20Publication%20of%20Interim%20Report) The H1 2025 interim report will be published on the Stock Exchange and company website in due course - The Company's interim report for H1 2025 will be published on the Stock Exchange and the Company's website in due course[94](index=94&type=chunk) [Board of Directors Information](index=43&type=section&id=7.9%20Board%20of%20Directors%20Information) The Board comprises executive directors Mr. Wu Yinhe, Ms. Li Birong, Mr. Wang Mohan; non-executive directors Tan Sri Dato' Ong Thian Seng (Chairman), Mr. Li Shenggan; and independent non-executive directors Mr. Wang Guisheng, Mr. Wu Weixiong, Mr. Chen Keqin - Executive Directors are Mr. Wu Yinhe, Ms. Li Birong, and Mr. Wang Mohan[96](index=96&type=chunk) - Non-executive Directors are Tan Sri Dato' Ong Thian Seng (Chairman) and Mr. Li Shenggan[96](index=96&type=chunk) - Independent Non-executive Directors are Mr. Wang Guisheng, Mr. Wu Weixiong, and Mr. Chen Keqin[96](index=96&type=chunk)

[Company Information](index=3&type=section&id=Company%20Information) This section provides essential company details, including board and committee members, registered and principal business addresses, and key professional advisors - The report details the company's fundamental information, including board and committee members, registered office, principal business address, share registrar, auditor, legal counsel, and principal banks[4](index=4&type=chunk)[6](index=6&type=chunk)[10](index=10&type=chunk) - The report discloses important personnel changes, with **CEO Mr. Lun Zhaoming resigning effective January 1, 2025**, and **Ms. Wang Di appointed Executive Director effective May 16, 2025**[4](index=4&type=chunk)[178](index=178&type=chunk) [Financial Summary](index=6&type=section&id=Financial%20Summary) The company's financial performance has significantly deteriorated over the past five years, marked by a shift from profit to substantial losses and negative total equity by 2024 - The company's financial performance has significantly deteriorated over the past five years, shifting from profitability to **substantial losses since 2022**, with **total equity turning negative by the end of 2024**, indicating insolvency[11](index=11&type=chunk) Five-Year Financial Summary (As of December 31) | Metric | 2020 (RMB thousands) | 2021 (RMB thousands) | 2022 (RMB thousands) | 2023 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | :--- | | **Revenue** | 5,153,233 | 5,309,290 | 85,893 | 941,219 | 240,915 | | **Profit/(Loss) Before Tax** | 1,329,129 | 1,102,164 | (2,806,057) | (664,729) | (744,325) | | **Total Assets** | 12,738,992 | 15,182,212 | 12,213,441 | 10,417,205 | 10,150,391 | | **Total Liabilities** | 8,909,356 | 10,930,837 | 10,894,770 | 9,891,786 | 10,484,866 | | **Total Equity/(Deficit)** | 3,829,636 | 4,251,375 | 1,318,671 | 525,419 | (334,475) | [Chairman's Report](index=7&type=section&id=Chairman%27s%20Report) This report outlines the Group's operational performance, financial status, and strategic outlook, highlighting key achievements and future development directions [Full Year Results and Financial Position](index=7&type=section&id=Full%20Year%20Results%20and%20Financial%20Position) In FY2024, the Group experienced significant performance fluctuations, with revenue declining 74.4% to RMB 241 million, a net loss of RMB 801 million, and a high gearing ratio of 93.8% FY2024 Key Performance Indicators | Metric | 2024 | YoY Change | | :--- | :--- | :--- | | Revenue (RMB millions) | 240.9 | -74.4% | | Gross Profit (RMB millions) | 62.6 | - | | Gross Profit Margin | 26.0% | - | | Net Loss (RMB millions) | 801.3 | - | | Contract Sales (RMB millions) | 102.2 | -65.0% | | Contract Sales GFA (square meters) | 9,795 | - | Financial Position as of December 31, 2024 | Metric | As of December 31, 2024 | YoY Change | | :--- | :--- | :--- | | Total Assets (RMB billions) | 10.1504 | -2.6% | | Gearing Ratio | 93.8% | - | - The board does not recommend a final dividend for the year ended December 31, 2024[18](index=18&type=chunk) [Business Review](index=8&type=section&id=Business%20Review) The Group continued its "one core, two wings" strategy in 2024, focusing on residential development and urban renewal, achieving progress with 9 preliminary service provider qualifications - The company adheres to the **"one core, two wings" strategy**, focusing on residential development, urban renewal, and cultural tourism/tech innovation to diversify revenue and enhance competitiveness[19](index=19&type=chunk) - By the end of 2024, the Group secured **preliminary service provider qualifications for 9 urban renewal projects**, with an additional 9 projects in progress to obtain similar qualifications[20](index=20&type=chunk) [Business Outlook](index=9&type=section&id=Business%20Outlook) The Group will focus on "three old transformations" projects in Dongguan, Guangdong, supported by approximately 2.8 million square meters of land reserves across 18 projects and 4 land parcels - Future strategy will focus on South China, particularly **Dongguan's "three old transformations" projects** in Guangdong[25](index=25&type=chunk)[27](index=27&type=chunk) Land Reserve as of December 31, 2024 | Project Type | Quantity | | :--- | :--- | | Real Estate Projects | 18 | | Land Parcels | 4 | | **Total Gross Floor Area** | **2,799,191 square meters** | [Management Discussion and Analysis](index=10&type=section&id=Management%20Discussion%20and%20Analysis) This section provides a comprehensive review of the Group's operational and financial performance, detailing revenue trends, cost structures, liquidity, and future strategies [Business Review](index=11&type=section&id=Business%20Review%20%28MDA%29) In 2024, the Group's total revenue significantly decreased by 74.4% to RMB 241 million, driven by sharp declines in property sales and average selling prices, while actively pursuing urban renewal projects 2024 Contract Sales Performance | Metric | Amount/Area | YoY Change | | :--- | :--- | :--- | | Contract Sales (RMB millions) | 102.2 | -65.0% | | Contract Sales GFA (square meters) | 9,795 | -53.3% | 2024 Property Sales Details | Metric | Amount/Area | YoY Change | | :--- | :--- | :--- | | Property Sales Revenue (RMB millions) | 201.2 | -77.9% | | GFA of Properties Recognized as Sold (square meters) | 31,530 | -53.0% | | Average Selling Price (RMB/square meter) | 6,381 | -53.0% | - As of the end of 2024, the Group's total land reserve GFA was approximately **2,799,191 square meters**, primarily located in Hengyang, Heyuan, and Xuzhou[48](index=48&type=chunk)[50](index=50&type=chunk) - The Group actively participates in urban renewal, particularly Dongguan's "three old transformations" projects, with progress in Zhangmutou Baoshan, Humen Xinwan, and Shatian Nianzhou, and **9 preliminary service provider agreements signed covering 2.23 million square meters**[51](index=51&type=chunk)[54](index=54&type=chunk) [Financial Review](index=18&type=section&id=Financial%20Review) In FY2024, the Group's financial performance deteriorated significantly, with total revenue down 74.4%, gross profit down 75.8%, and net loss expanding to RMB 801 million, primarily due to increased finance costs and inventory impairment FY2024 Key Income Statement Items | Item | 2024 (RMB millions) | 2023 (RMB millions) | YoY Change | | :--- | :--- | :--- | | Total Revenue | 240.9 | 941.2 | -74.4% | | Gross Profit | 62.6 | 258.4 | -75.8% | | Gross Profit Margin | 26.0% | 27.5% | -1.5pp | | Loss for the Year | 801.3 | 730.4 | Loss expanded | | Finance Costs | 441.3 | 178.4 | +147.4% | | Write-down of inventories to net realizable value | 144.4 | 48.5 | +197.7% | - Finance costs significantly increased by **147% from RMB 178 million to RMB 441 million**, primarily due to increased loan balances and overdue interest[80](index=80&type=chunk) - Sales and distribution expenses and administrative expenses both significantly decreased by **75% and 62% respectively**, primarily due to reductions in marketing, human resources, and office expenses[64](index=64&type=chunk)[69](index=69&type=chunk) [Future Outlook](index=22&type=section&id=Future%20Outlook) Despite real estate pressures, the Group will focus on project completion, accelerated sales, operational optimization, and creditor negotiations, particularly for Dongguan's "three old transformations" projects - The Group will continue to focus on three core tasks: - Completing and delivering property projects - Accelerating the sale of properties under development and completed properties - Integrating resources, optimizing operations, and reducing expenses[90](index=90&type=chunk) - The Group is facing significant financing pressure from lenders and creditors and is actively negotiating to seek solutions[91](index=91&type=chunk) [Liquidity and Capital Resources](index=23&type=section&id=Liquidity%20and%20Capital%20Resources) As of end-2024, the Group faces severe liquidity issues, with cash at RMB 37.2 million, net current liabilities at RMB 3.92 billion, a 93.8% gearing ratio, and RMB 1.37 billion in financial guarantees Liquidity and Financial Ratios (As of December 31) | Metric | 2024 | 2023 | | :--- | :--- | :--- | | Total Cash and Bank Balances (RMB millions) | 37.2 | 126.2 | | Net Current Liabilities (RMB billions) | 3.9196 | 3.0788 | | Gearing Ratio | 93.8% | 83.8% | | Current Ratio | 0.62 times | 0.69 times | - As of the end of 2024, the Group's total bank financing was **RMB 2.838 billion**, with **81.8% (approximately RMB 2.322 billion) utilized**[100](index=100&type=chunk) - The Group provided **RMB 1.369 billion in mortgage financing guarantees** to property customers, a decrease from RMB 2.501 billion in 2023[115](index=115&type=chunk) - As of the end of 2024, the Group's total capital commitments amounted to **RMB 2.284 billion**, primarily for properties under development[112](index=112&type=chunk) [Management's Position, Views and Assessment on Disclaimer of Opinion](index=30&type=section&id=Management%27s%20Position%2C%20Views%20and%20Assessment%20on%20Disclaimer%20of%20Opinion) In response to the auditor's disclaimer of opinion on going concern, the board outlined six plans to improve liquidity and financial position, including debt negotiation, strategic investment, and accelerated sales - Auditor BDO Limited issued a **"disclaimer of opinion"** on the financial statements due to significant uncertainty regarding the appropriateness of the going concern assumption[130](index=130&type=chunk) - The board has adopted six measures to improve liquidity: - Negotiating with creditors for repayment extensions - Introducing strategic partners or investors for key projects - Accelerating property sales to generate cash flow - Developing diversified sales channels - Improving occupancy rates and rental income for leased properties - Streamlining headcount and controlling operating costs for efficiency[131](index=131&type=chunk)[139](index=139&type=chunk) - The audit committee has reviewed and agreed with management's position, requesting necessary actions to address the going concern uncertainty[134](index=134&type=chunk) [Profile of Directors and Senior Management](index=32&type=section&id=Profile%20of%20Directors%20and%20Senior%20Management) This chapter details the backgrounds of the company's board members and senior management, including their positions, responsibilities, industry experience, and educational qualifications - This section details the backgrounds of the company's board members and senior management, including their positions, responsibilities, industry experience, and educational qualifications[140](index=140&type=chunk)[142](index=142&type=chunk)[147](index=147&type=chunk) [Corporate Governance Report](index=37&type=section&id=Corporate%20Governance%20Report) This report details the company's corporate governance framework, including board composition, committee structures, and risk management and internal control systems [Board and Committees](index=38&type=section&id=Board%20and%20Committees) The company's board comprises 8 members, including 1 non-executive, 3 executive, and 3 independent non-executive directors, meeting listing rule requirements, with separate Chairman and CEO roles, and three independent committees - The board is led by **Chairman Mr. Lun Ruixiang (Non-executive)**, with **CEO Mr. Lun Zhaoming (resigned effective January 1, 2025)** responsible for daily management, ensuring separation of powers[179](index=179&type=chunk)[183](index=183&type=chunk) - The company has an Audit Committee, Remuneration Committee, and Nomination Committee, all **chaired by independent non-executive directors** to ensure independence and effective oversight[210](index=210&type=chunk)[213](index=213&type=chunk)[219](index=219&type=chunk)[227](index=227&type=chunk) - The company has adopted a **board diversity policy**, considering gender, age, cultural background, and professional experience in director selection[243](index=243&type=chunk) [Risk Management and Internal Control](index=52&type=section&id=Risk%20Management%20and%20Internal%20Control) The board oversees the Group's risk management and internal control systems, reviewing their effectiveness annually through a "three lines of defense" model, confirmed as effective for 2024 - The Group's risk management framework adopts a **"three lines of defense model"**: - **First line of defense:** Operational management and internal control measures - **Second line of defense:** Functional departments like finance, cost, and legal compliance - **Third line of defense:** Internal audit[271](index=271&type=chunk) - The board, through the audit committee, reviewed the risk management and internal control systems for the year ended December 31, 2024, deeming them **effective and sound**[283](index=283&type=chunk) [Directors' Report](index=57&type=section&id=Directors%27%20Report) This report covers the Group's annual performance, dividend policy, use of IPO proceeds, directors' and major shareholders' interests, share option schemes, and significant related party transactions and litigation disclosures [Results and Dividends](index=57&type=section&id=Results%20and%20Dividends) The Group's 2024 annual results are detailed in the consolidated financial statements, and given the current financial performance, the board does not recommend a final dividend - The board does not recommend a final dividend for the year ended December 31, 2024[303](index=303&type=chunk) [Use of Net Proceeds from Listing](index=60&type=section&id=Use%20of%20Net%20Proceeds%20from%20Listing) The company's HKD 1.3911 billion net IPO proceeds from January 2020 have been fully utilized as disclosed, primarily for urban renewal, property development, debt repayment, and working capital Allocation of Net Proceeds from Listing (HKD millions) | Use | Planned Amount | Amount Used | | :--- | :--- | :--- | | Advancing urban renewal projects | 765.1 | 765.1 | | Development of existing property projects | 278.2 | 278.2 | | Repayment of interest-bearing borrowings | 278.2 | 278.2 | | Working capital and general corporate purposes | 69.6 | 69.6 | | **Total** | **1,391.1** | **1,391.1** | [Directors' and Major Shareholders' Interests in Shares](index=63&type=section&id=Directors%27%20and%20Major%20Shareholders%27%20Interests%20in%20Shares) As of December 31, 2024, Chairman Mr. Lun Ruixiang is the controlling shareholder, holding approximately 75.82% of shares through controlled entities, with other executive directors holding share options - Company Chairman **Mr. Lun Ruixiang** holds **3,937,331,000 shares (74.94% equity)** through his wholly-owned Wealthy Yield Holdings Limited, making him the controlling shareholder[348](index=348&type=chunk)[349](index=349&type=chunk) [Share Option Schemes](index=67&type=section&id=Share%20Option%20Schemes) The company has Pre-IPO and Post-IPO Share Option Schemes; the former has 45.25 million unexercised options as of end-2024, while no options have been granted under the latter - As of December 31, 2024, **45,250,000 unexercised share options** remain under the Pre-IPO Share Option Scheme, representing **0.86% of issued share capital**[363](index=363&type=chunk)[373](index=373&type=chunk) - The Post-IPO Share Option Scheme has a 10-year validity from listing, but **no options have been granted** under it as of this annual report[381](index=381&type=chunk)[389](index=389&type=chunk) [Connected Transactions](index=76&type=section&id=Connected%20Transactions) The company engaged in multiple continuing connected transactions with related parties for property management, commercial operations, and other services, all within annual caps and deemed fair and reasonable - The company signed four framework agreements with Dongguan Huijing Property Services Co., Ltd. for property management, marketing, and engineering consulting, with a **combined 2024 annual cap of RMB 63.8 million**[402](index=402&type=chunk)[410](index=410&type=chunk)[417](index=417&type=chunk)[424](index=424&type=chunk)[431](index=431&type=chunk) - The company signed a commercial operation and value-added services framework agreement with Dongguan Huisheng Commercial Operation Management Co., Ltd., with a **2024 annual cap of RMB 28.8 million**[434](index=434&type=chunk)[440](index=440&type=chunk) - The company signed an interior decoration services framework agreement with Guangdong Huifeng Ecological Technology Co., Ltd., with a **2024 annual cap of RMB 100 million**[441](index=441&type=chunk)[446](index=446&type=chunk) [Disclosure Made Under Rule 13.21 of the Listing Rules](index=89&type=section&id=Disclosure%20Made%20Under%20Rule%2013.21%20of%20the%20Listing%20Rules) During the reporting period, the Group experienced multiple loan agreement defaults and civil lawsuits, with creditors initiating legal actions for overdue loans totaling over RMB 1 billion - The Group is involved in multiple significant civil lawsuits and loan defaults, including: - **Trust Company A:** Overdue trust loans of approximately **RMB 300 million**, now in enforcement - **Trust Company B:** Unredeemed financial products of approximately **RMB 156 million**, now in enforcement with some collateral under auction - **A certain creditor:** Overdue entrusted loans of approximately **RMB 530 million**, now in enforcement - **Asset Management Company:** Loan defaults of approximately **RMB 394 million**, settled via mediation and in enforcement[473](index=473&type=chunk)[474](index=474&type=chunk)[478](index=478&type=chunk)[479](index=479&type=chunk) [Independent Auditor's Report](index=93&type=section&id=Independent%20Auditor%27s%20Report) This report presents the independent auditor's opinion on the consolidated financial statements, highlighting key audit matters and the basis for their conclusion, particularly regarding the Group's going concern ability [Disclaimer of Opinion](index=93&type=section&id=Disclaimer%20of%20Opinion) Auditor BDO Limited issued a "disclaimer of opinion" on the Group's consolidated financial statements due to significant uncertainty regarding going concern, stemming from substantial losses, insolvency, and widespread debt defaults - The auditor explicitly stated a **"disclaimer of opinion"** on the Group's consolidated financial statements due to insufficient appropriate audit evidence to form an opinion[498](index=498&type=chunk) - The disclaimer of opinion is based on **"material uncertainty related to going concern,"** evidenced by: - **Huge losses:** Net loss of **RMB 801 million** in 2024 - **Insolvency:** Net current liabilities of **RMB 3.92 billion** and net liabilities of **RMB 334 million** - **Debt defaults:** Totaling **RMB 5.95 billion** in interest-bearing borrowings and senior notes in default or cross-default as of end-2024 - **Liquidity depletion:** Available cash and cash equivalents of only **RMB 2.327 million**[499](index=499&type=chunk) [Consolidated Financial Statements](index=97&type=section&id=Consolidated%20Financial%20Statements) This section presents the Group's consolidated financial statements, including the statement of profit or loss, statement of financial position, statement of cash flows, and detailed notes [Consolidated Statement of Profit or Loss](index=97&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss) In FY2024, Group revenue significantly decreased by 74.4% to RMB 241 million, with loss for the year expanding to RMB 801 million, resulting in a basic and diluted loss per share of RMB 0.15 Consolidated Statement of Profit or Loss Summary (RMB thousands) | Item | 2024 | 2023 | | :--- | :--- | :--- | | Revenue | 240,915 | 941,219 | | Gross Profit | 62,644 | 258,416 | | Loss Before Tax | (744,325) | (664,729) | | Loss for the Year | (801,318) | (730,350) | | Loss Attributable to Owners of the Parent | (799,479) | (696,720) | | Basic Loss Per Share (RMB) | (0.15) | (0.13) | [Consolidated Statement of Financial Position](index=99&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of December 31, 2024, the Group's financial position deteriorated, with total assets at RMB 10.15 billion, total liabilities at RMB 10.485 billion, and total equity turning into a deficit of RMB 334 million Consolidated Statement of Financial Position Summary (RMB thousands) | Item | As of December 31, 2024 | As of December 31, 2023 | | :--- | :--- | :--- | | **ASSETS** | | | | Total Non-current Assets | 3,645,378 | 3,684,504 | | Total Current Assets | 6,505,013 | 6,732,701 | | **Total Assets** | **10,150,391** | **10,417,205** | | **LIABILITIES AND EQUITY** | | | | Total Current Liabilities | 10,424,641 | 9,811,525 | | Total Non-current Liabilities | 60,225 | 80,261 | | **Total Liabilities** | **10,484,866** | **9,891,786** | | **Total (Deficit)/Equity** | **(334,475)** | **525,419** | [Consolidated Statement of Cash Flows](index=103&type=section&id=Consolidated%20Statement%20of%20Cash%20Flows) In FY2024, operating cash flow turned negative with a net outflow of RMB 170 million, while investing and financing activities saw net inflows, resulting in year-end cash and cash equivalents of only RMB 2.327 million Consolidated Statement of Cash Flows Summary (RMB thousands) | Item | 2024 | 2023 | | :--- | :--- | :--- | | Net Cash Flows from Operating Activities | (170,057) | 12,730 | | Net Cash Flows from/(used in) Investing Activities | 84,944 | (27,602) | | Net Cash Flows from Financing Activities | 108,216 | 9,618 | | **Net Increase/(Decrease) in Cash and Cash Equivalents** | **23,103** | **(5,254)** | | Cash and Cash Equivalents at Beginning of Year | 6,009 | 27,269 | | **Cash and Cash Equivalents at End of Year** | **2,327** | **6,009** | [Notes to the Consolidated Financial Statements](index=106&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) These notes provide detailed explanations of the company's financial position and performance, covering critical areas such as going concern assumptions, revenue recognition, financial instruments, debt details, and related party transactions [Note 2.1 Basis of Presentation (Going Concern)](index=110&type=section&id=Note%202.1%20Basis%20of%20Presentation%20%28Going%20Concern%29) This note reveals significant doubts about the Group's going concern ability due to substantial losses, net liabilities, severe liquidity shortfalls, and multiple loan defaults - The note explicitly states that as of end-2024, the Group had **RMB 5.95 billion in interest-bearing borrowings and senior notes in default or cross-default**, raising significant doubts about its going concern ability[536](index=536&type=chunk) - Management's plans to alleviate liquidity pressure include: - Accelerating property sales and delivery - Integrating resources, optimizing operations, and reducing expenses - Actively negotiating with lenders for renewal or refinancing[537](index=537&type=chunk)[543](index=543&type=chunk) [Note 29 & 30 Interest-bearing Bank and Other Borrowings and Senior Notes](index=182&type=section&id=Note%2029%20%26%2030%20Interest-bearing%20Bank%20and%20Other%20Borrowings%20and%20Senior%20Notes) As of end-2024, the Group's interest-bearing bank and other borrowings totaled RMB 4.13 billion, with senior notes at RMB 1.05 billion, detailing multiple debt defaults, including RMB 1.95 billion in overdue bank loans Debt Status (As of December 31) | Item | 2024 (RMB thousands) | 2023 (RMB thousands) | | :--- | :--- | :--- | | Interest-bearing bank and other borrowings | 4,134,446 | 4,012,871 | | Senior notes (principal + interest) | 1,051,260 | 908,543 | - As of end-2024, the Group's total overdue bank loans amounted to **RMB 1.945 billion**[954](index=954&type=chunk) - The **2023 senior notes matured in July 2023** but remained unsettled as of the reporting period, constituting a default event[961](index=961&type=chunk) [Note 46 Financial Risk Management Objectives and Policies](index=206&type=section&id=Note%2046%20Financial%20Risk%20Management%20Objectives%20and%20Policies) This note outlines the Group's primary financial risks: interest rate, credit, and liquidity, highlighting extremely high financial leverage with a net debt-to-equity ratio of -1540% and severe liquidity risk Net Debt-to-Equity Ratio | Item | 2024 (RMB thousands) | 2023 (RMB thousands) | | :--- | :--- | :--- | | Net Debt | 5,149,845 | 4,820,790 | | Total (Deficit)/Equity | (334,475) | 525,419 | | **Net Debt-to-Equity Ratio** | **-1,540%** | **918%** | - The Group faces severe liquidity risk, with undiscounted contractual financial liabilities due within one year or on demand totaling as high as **RMB 8.221 billion**[1096](index=1096&type=chunk)

[Company Overview](index=1&type=section&id=I.%20Company%20Overview) [Key Financial Highlights](index=1&type=section&id=Key%20Financial%20Highlights) Techtronic Industries demonstrated strong performance in H1 2025, achieving double-digit growth in sales and net profit, significant improvements in gross margin and EPS, and robust free cash flow | Metric | H1 2025 (million USD) | H1 2024 (million USD) | Change | | :--- | :--- | :--- | :--- | | Revenue | 7,833 | 7,312 | +7.1% | | Gross Margin | 40.3% | 39.9% | +34 basis points | | Profit Before Interest and Tax | 709 | 626 | +13.3% | | Profit Attributable to Shareholders | 628 | 550 | +14.2% | | Basic EPS (US cents) | 34.37 | 30.12 | +14.1% | | Interim Dividend Per Share (approx. US cents) | 16.09 | 13.90 | +15.7% | - Sales grew by **7.5%** to **$7.8 billion** in local currency, with net profit increasing by **14.2%** to **$628 million**[4](index=4&type=chunk) - Flagship brand MILWAUKEE's sales grew by **11.9%** in local currency, while RYOBI increased by **8.7%**[4](index=4&type=chunk) - Free cash flow reached **$468 million**, with the company in a net cash position at period-end[4](index=4&type=chunk) [Interim Dividend](index=2&type=section&id=Interim%20Dividend) The Board resolved to declare an interim dividend of HK$125.00 cents (approximately US$16.09 cents) per share, representing a 15.7% increase from the prior year, payable around September 19, 2025 - The Board resolved to declare an interim dividend of **HK$125.00 cents** (approximately **US$16.09 cents**) per share for the six months ended June 30, 2025[5](index=5&type=chunk) - The interim dividend for the same period in 2024 was **HK$108.00 cents** (approximately **US$13.90 cents**), marking a **15.7%** increase this period[3](index=3&type=chunk)[5](index=5&type=chunk) - The dividend will be paid to shareholders whose names appear on the company's register of members on September 5, 2025, with an expected payment date on or about September 19, 2025[5](index=5&type=chunk) [Management Discussion and Analysis](index=2&type=section&id=II.%20MD%26A) [Business Review](index=2&type=section&id=Business%20Review) Techtronic Industries achieved record sales in H1, driven by strong growth in MILWAUKEE and RYOBI brands, while optimizing product mix and operational efficiency improved gross margin and profit before interest and tax, leading to positive free cash flow - Record sales of **$7.8 billion** were recorded in H1 2025, representing a **7.5%** increase in local currency and **7.1%** in reported currency[6](index=6&type=chunk) - MILWAUKEE business grew by **11.9%** in local currency, and RYOBI grew by **8.7%**[6](index=6&type=chunk) - Sales in North America increased by **8.1%**, Europe by **10.4%**, while other regions saw a **3.4%** decrease[6](index=6&type=chunk) - Gross margin rose by **34 basis points** to **40.3%**, primarily due to improved profitability of consumer brands, enhanced operational efficiency, and MILWAUKEE's business growth[6](index=6&type=chunk) - Total selling and general administrative expenses as a percentage of sales decreased by **18 basis points** to **31.3%**, reflecting the company's investment in R&D and new product development while reducing non-strategic administrative expenses[6](index=6&type=chunk) - Profit before interest and tax was **$709 million**, a **13.3%** year-on-year increase, with the profit margin improving by **49 basis points** to **9.1%**[7](index=7&type=chunk) - Net profit increased by **14.2%** to **$628 million**, and EPS grew by **14.1%** to **34.37 US cents**[8](index=8&type=chunk) - Working capital as a percentage of sales improved by **190 basis points** to **16.8%**, and inventory days shortened by **1 day** to **103 days**[8](index=8&type=chunk) - Capital expenditure was **$96 million**, a **4.1%** year-on-year decrease, primarily invested in new products, production network adjustments, automation, and productivity initiatives[8](index=8&type=chunk) - Positive free cash flow of **$468 million** was recorded, with the company in a net cash position at period-end, indicating a robust financial standing[8](index=8&type=chunk) - The company actively recruits, retains, and invests in top global talent to solidify its foundation for success and achieve its mission of dominating the cordless product market[9](index=9&type=chunk) [Business Summary](index=3&type=section&id=Business%20Summary) Techtronic Industries' power tools business showed strong performance with significant growth in MILWAUKEE and RYOBI brands, particularly in cordless tools and outdoor power equipment, while the floor care and cleaning business saw increased operating profit despite a slight revenue decline, actively transitioning to cordless cleaning products - Power tools business sales grew by **8.3%** in local currency to **$7.4 billion**[10](index=10&type=chunk) - RYOBI power tools achieved low double-digit growth, and outdoor power equipment saw mid-single-digit growth[14](index=14&type=chunk) - The RYOBI ONE+ 18V battery platform continues to deliver value to cordless tool users, with the introduction of the RYOBI 40V series and RYOBI USB Lithium platform[14](index=14&type=chunk) - RYOBI's growth strategy focuses on strengthening its existing user base, attracting new users, and driving strong growth in both new and established regional markets globally[14](index=14&type=chunk) - RYOBI collaborates with leading distribution partners such as The Home Depot, Bunnings, and key European retail partners[15](index=15&type=chunk) [Power Tools](index=3&type=section&id=Power%20Tools) [MILWAUKEE Brand](index=3&type=section&id=MILWAUKEE%20Brand) - MILWAUKEE business recorded double-digit sales growth of **11.9%** in local currency[11](index=11&type=chunk) - North American sales grew by **12.9%**, European sales by **11.6%**, and other regions by **2.6%**[11](index=11&type=chunk) - Outdoor Power Equipment (OPE) and Personal Protective Equipment (PPE) businesses outperformed the overall product portfolio average[11](index=11&type=chunk) - Growth is driven by a steadfast commitment to the technical industry and a user-first approach[11](index=11&type=chunk) - Three key initiatives are being pursued: developing existing businesses and vertical segments, opening new businesses and vertical segments, and expanding global market coverage[11](index=11&type=chunk) - Successful expansion from the transportation maintenance sector into mining, with products like the M18 FUEL Brushless 1-inch D-Handle Short Head High Torque Impact Wrench gaining favor in the mining sector[12](index=12&type=chunk)[13](index=13&type=chunk) - Mining operations in Australia and Latin America have global influence, helping to accelerate expansion into relevant regional markets[13](index=13&type=chunk) [RYOBI Brand](index=4&type=section&id=RYOBI%20Brand) - RYOBI brand grew by **8.7%** in local currency[14](index=14&type=chunk) - Power tools achieved low double-digit growth, while outdoor power equipment saw mid-single-digit growth[14](index=14&type=chunk) - The RYOBI ONE+ 18V battery platform continues to deliver value to cordless tool users, with the introduction of the RYOBI 40V series and RYOBI USB Lithium platform[14](index=14&type=chunk) - The growth strategy focuses on strengthening the existing user base, attracting new users, and driving strong growth in both new and established regional markets globally[14](index=14&type=chunk) - Collaboration with top distribution partners including The Home Depot, Bunnings, and key European retail partners[15](index=15&type=chunk) [Floor Care and Cleaning](index=4&type=section&id=Floor%20Care%20and%20Cleaning) - Operating profit for the Floor Care and Cleaning business increased by **3.6%** to **$9.7 million** compared to H1 2024, while revenue decreased by **4.8%** in local currency to **$408 million**[16](index=16&type=chunk) - RYOBI's innovative cleaning products achieved strong global results, with double-digit sales growth[16](index=16&type=chunk) - The VAX brand in the UK and Australia was affected by a slowdown in non-essential consumer spending[16](index=16&type=chunk) - Across all brands and regional markets in the floor care business, the company is driving a transition from AC to cordless cleaning products while focusing on improving overall business profitability[16](index=16&type=chunk) [Financial Review](index=5&type=section&id=Financial%20Review) Techtronic Industries' H1 financial performance was robust, with growth in both revenue and profit attributable to shareholders. Gross margin increased due to high-margin businesses and operational efficiency, while operating expenses were primarily for strategic investments. The company maintains a strong financial position with ample cash flow and effective management of working capital and debt - Revenue for the reporting period was **$7.833 billion**, a **7.1%** year-on-year increase[17](index=17&type=chunk) - Profit attributable to shareholders was **$628 million**, a **14.2%** year-on-year increase[18](index=18&type=chunk) - Basic EPS was **34.37 US cents**, a **14.1%** year-on-year increase[18](index=18&type=chunk) - Total shareholders' funds amounted to **$6.7 billion**, an increase of **4.6%** from December 31, 2024[21](index=21&type=chunk) - Net asset value per share was **$3.63**, an increase of **4.6%** from **$3.47** as of December 31, 2024[21](index=21&type=chunk) - As of June 30, 2025, the Group held cash and cash equivalents totaling **$1.608 billion**, an increase from **$1.232 billion** as of December 31, 2024[22](index=22&type=chunk) - Free cash flow generated during the period was **$468 million**, compared to **$508 million** in the prior year period[22](index=22&type=chunk) - The net debt-to-equity ratio was a net cash position, compared to **9.2%** as of June 30, 2024[22](index=22&type=chunk) - Long-term borrowings accounted for **50.7%** of total debt, a decrease from **59.8%** as of December 31, 2024[23](index=23&type=chunk) - Fixed-rate debt, after interest rate hedging, accounted for **60.7%** of total bank borrowings[24](index=24&type=chunk) - Working capital as a percentage of sales was **16.8%**, compared to **18.7%** in the prior year period[28](index=28&type=chunk) - Total capital expenditure for the period was **$96 million**, representing **1.2%** of revenue[29](index=29&type=chunk) [Financial Performance](index=5&type=section&id=Financial%20Performance) | Metric | H1 2025 (million USD) | H1 2024 (million USD) | Change | | :--- | :--- | :--- | :--- | | Revenue | 7,833 | 7,312 | +7.1% | | Profit Before Interest and Tax | 709 | 626 | +13.3% | | Profit Attributable to Shareholders | 628 | 550 | +14.2% | | Basic EPS (US cents) | 34.37 | 30.12 | +14.1% | [Performance Analysis](index=5&type=section&id=Performance%20Analysis) - Gross margin increased to **40.3%** from **39.9%** in the prior year period, primarily attributable to high-margin businesses, improved profitability of consumer brands, and enhanced global manufacturing operations[19](index=19&type=chunk) - Total operating expenses for the period were **$2.452 billion**, an increase of **6.5%** from **$2.302 billion** in the prior year period, mainly due to strategic investments in new products and technologies[20](index=20&type=chunk) - Research and development expenses were **$359 million**, representing **4.6%** of revenue (2024: **4.1%**), reflecting the company's continuous focus on innovation[20](index=20&type=chunk) - Net interest expense was **$27.8 million**, a **14.5%** decrease from **$32.5 million** in the prior year period, a result of effective financial resource management[20](index=20&type=chunk) - The effective tax rate for the period increased to **7.8%** (2024: **7.3%**)[20](index=20&type=chunk) [Liquidity and Financial Resources](index=5&type=section&id=Liquidity%20and%20Financial%20Resources) - Total shareholders' funds amounted to **$6.7 billion**, an increase of **4.6%** from December 31, 2024[21](index=21&type=chunk) - Net asset value per share was **$3.63**, an increase of **4.6%** from **$3.47** as of December 31, 2024[21](index=21&type=chunk) - As of June 30, 2025, the Group held cash and cash equivalents totaling **$1.608 billion**, with **37.9%** in USD, **33.9%** in Euro, **16.0%** in AUD, and **12.2%** in other currencies[22](index=22&type=chunk) - Free cash flow generated during the period was **$468 million**, compared to **$508 million** in the prior year period[22](index=22&type=chunk) - The net debt-to-equity ratio was a net cash position, compared to **9.2%** as of June 30, 2024[22](index=22&type=chunk) - Long-term borrowings accounted for **50.7%** of total debt (December 31, 2024: **59.8%**)[23](index=23&type=chunk) - Fixed-rate debt, after interest rate hedging, accounted for **60.7%** of total bank borrowings[24](index=24&type=chunk) - Total inventory was **$4.293 billion**, with inventory turnover days decreasing by **1 day** to **103 days**[25](index=25&type=chunk) - Finished goods inventory increased by **6 days**, raw materials inventory decreased by **6 days** to **13 days**, and work-in-progress inventory decreased by **1 day** to **3 days**[25](index=25&type=chunk) - Trade receivables turnover days remained at **60 days**[26](index=26&type=chunk) - Trade payables turnover days were **102 days**, compared to **96 days** as of June 30, 2024[27](index=27&type=chunk) - Working capital as a percentage of sales was **16.8%**, compared to **18.7%** in the prior year period[28](index=28&type=chunk) - Total capital expenditure for the period was **$96 million**, representing **1.2%** of revenue[29](index=29&type=chunk) [Capital Commitments and Pledges](index=7&type=section&id=Capital%20Commitments%20and%20Pledges) - As of June 30, 2025, total capital commitments contracted but not provided for in respect of the acquisition of property, plant and equipment and equity investments amounted to **$153 million** (December 31, 2024: **$167 million**)[30](index=30&type=chunk) - The Group has no significant guarantees or off-balance sheet commitments[30](index=30&type=chunk) - None of the Group's assets are pledged or subject to any encumbrances[31](index=31&type=chunk) [Human Resources](index=7&type=section&id=Human%20Resources) - The Group employed a total of **47,539 employees** globally (June 30, 2024: **49,778 employees**)[32](index=32&type=chunk) - Total staff costs for the review period were **$1.436 billion**, compared to **$1.359 billion** in the prior year period[32](index=32&type=chunk) - The company is committed to enhancing the quality, competence, and technical skills of all employees, providing job-related training and leadership development programs[32](index=32&type=chunk) - Share options, share awards, and bonuses are granted to eligible employees at the discretion of the Group, based on Group performance and individual employee performance[32](index=32&type=chunk) [Outlook](index=9&type=section&id=Outlook) Techtronic Industries is satisfied with its H1 performance and has invested over $1.9 billion to enhance capacity and strengthen its global manufacturing footprint. Looking ahead to H2, the company is well-positioned to navigate macroeconomic and geopolitical challenges, will continue R&D investment to maintain market leadership, and remains focused on improving profitability, confident in achieving its 2026 sales growth targets for MILWAUKEE and RYOBI, and committed to its medium-term goal of 10% profit before interest and tax as a percentage of sales - The company is satisfied with its H1 total sales growth, substantial free cash flow, growth in profit before interest and tax, and improved net profit margin[39](index=39&type=chunk) - Over **$1.9 billion** has been invested since 2015 to enhance production capacity and strengthen the global manufacturing footprint[39](index=39&type=chunk) - Looking ahead to H2 2025, the company is very well-positioned to address challenges arising from the macroeconomic and geopolitical environment, as well as evolving global trade policies[39](index=39&type=chunk) - The company will continue its commitment to R&D investment to maintain market leadership in innovative and technologically advanced cordless products[39](index=39&type=chunk) - The focus for H2 2025 is on enhancing profitability[39](index=39&type=chunk) - Confidence remains high for MILWAUKEE's double-digit sales growth and RYOBI's mid-single-digit sales growth in 2026[40](index=40&type=chunk) - The team will continue efforts to achieve the medium-term internal target of **10%** profit before interest and tax as a percentage of sales[40](index=40&type=chunk) [Corporate Governance and Compliance](index=7&type=section&id=III.%20CG%20%26%20Compliance) [Compliance with Listing Rules' Corporate Governance Code](index=7&type=section&id=Compliance%20with%20Listing%20Rules'%20Corporate%20Governance%20Code) The company complied with all code provisions of the Corporate Governance Code in Appendix C1 of the Hong Kong Stock Exchange Listing Rules throughout H1 2025, except for directors not having a specific term of appointment, but they are subject to retirement by rotation and re-election under the company's articles of association - The company complied with all code provisions of the Corporate Governance Code as set out in Appendix C1 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited throughout the six months ended June 30, 2025[33](index=33&type=chunk) - Directors are not appointed for a specific term but are subject to retirement by rotation and re-election in accordance with the company's Articles of Association[33](index=33&type=chunk) [Compliance with Listing Rules' Model Code](index=7&type=section&id=Compliance%20with%20Listing%20Rules'%20Model%20Code) The Board adopted the Model Code for Securities Transactions by Directors of Listed Issuers in Appendix C3 of the Listing Rules, and all directors confirmed full compliance with the relevant standards in H1 2025 - The Board adopted the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 to the Listing Rules[34](index=34&type=chunk) - All directors confirmed their full compliance with the relevant standards set out in the Model Code during the six months ended June 30, 2025[34](index=34&type=chunk) [Review of Accounts](index=7&type=section&id=Review%20of%20Accounts) The Audit Committee, with independent auditor Deloitte Touche Tohmatsu and senior management, reviewed the H1 2025 unaudited financial statements, accounting principles, and practices, and discussed internal controls and financial reporting matters. The Board confirmed its responsibility for preparing the Group's accounts - The Audit Committee, together with the company's independent auditor Deloitte Touche Tohmatsu and the Group's senior management, reviewed the company's unaudited financial statements for the six months ended June 30, 2025[35](index=35&type=chunk) - The review included the accounting principles and practices adopted by the Group, and discussions on internal controls and financial reporting matters[35](index=35&type=chunk) - The Board confirmed its responsibility for preparing the Group's accounts[35](index=35&type=chunk) [Purchase, Sale or Redemption of Securities](index=8&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20Securities) The company repurchased a total of 1,250,000 ordinary shares in H1 2025 for approximately $15.521 million, aiming to enhance net asset value and EPS. The repurchased shares were settled and cancelled, reducing the issued share capital accordingly. No other listed securities were purchased, sold, or redeemed by the company or its subsidiaries - The company repurchased a total of **1,250,000 ordinary shares** during the period, at prices ranging from **HK$83.55** to **HK$106.20** per share[36](index=36&type=chunk) - The consideration paid for the repurchased shares, approximately **$15.521 million**, was deducted from retained earnings[36](index=36&type=chunk) - The share repurchases aimed to enhance the company's net asset value per share and EPS, benefiting all shareholders[36](index=36&type=chunk) - **750,000 shares** were settled and cancelled during the period, and **500,000 shares** were cancelled on July 2, 2025[36](index=36&type=chunk) - Save as disclosed above, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities[36](index=36&type=chunk) [Closure of Register of Members](index=8&type=section&id=Closure%20of%20Register%20of%20Members) The company's register of members will be closed from September 4 to September 5, 2025, to determine eligibility for the interim dividend. To qualify, all transfer documents must be lodged with the share registrar by 4:00 p.m. on September 3, 2025 - The company's register of members will be closed from September 4, 2025, to September 5, 2025 (both dates inclusive)[37](index=37&type=chunk) - To qualify for the interim dividend, all transfer documents, together with the relevant share certificates, must be lodged with the company's share registrar by 4:00 p.m. on September 3, 2025[37](index=37&type=chunk) [Publication of Interim Results and Interim Report](index=8&type=section&id=Publication%20of%20Interim%20Results%20and%20Interim%20Report) This results announcement has been published on the company's website and the HKEXnews website. The 2025 Interim Report, containing all information required by the Listing Rules, will be dispatched to shareholders and published on the aforementioned websites in due course - This results announcement is published on the company's website (www.ttigroup.com) and the HKEXnews website (www.hkexnews.hk)[38](index=38&type=chunk) - The company's 2025 Interim Report, containing all information required by the Listing Rules, will be dispatched to shareholders and published on the aforementioned websites in due course[38](index=38&type=chunk) [Consolidated Financial Statements](index=10&type=section&id=IV.%20Financial%20Statements) [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=10&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) In H1 2025, the company reported revenue of $7.833 billion, gross profit of $3.156 billion, and profit attributable to shareholders of $628 million. Other comprehensive loss was primarily impacted by fair value losses on foreign exchange forward contracts and cross-currency interest rate swaps in hedge accounting | Metric | H1 2025 (thousand USD) | H1 2024 (thousand USD) | | :--- | :--- | :--- | | Revenue | 7,833,083 | 7,311,988 | | Cost of Sales | (4,677,276) | (4,391,271) | | Gross Profit | 3,155,807 | 2,920,717 | | Profit Before Tax | 681,496 | 593,706 | | Profit Attributable to Shareholders for the Period | 628,339 | 550,365 | | Total Comprehensive Income for the Period | 600,883 | 515,282 | | Basic EPS (US cents) | 34.37 | 30.12 | | Diluted EPS (US cents) | 34.29 | 29.98 | - Fair value loss on foreign exchange forward contracts and cross-currency interest rate swaps in hedge accounting was **$191 million**, compared to a gain of **$11.532 million** in the prior year period[45](index=45&type=chunk) - Exchange differences on translation of overseas operations resulted in a gain of **$164 million**, compared to a loss of **$43.785 million** in the prior year period[45](index=45&type=chunk) [Consolidated Statement of Financial Position](index=11&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the company's total non-current assets were $5.137 billion, total current assets were $8.758 billion, including inventory of $4.293 billion and bank balances, deposits, and cash of $1.608 billion. Total current liabilities were $5.676 billion, and total non-current liabilities were $1.563 billion. Total equity attributable to shareholders was $6.655 billion | Metric | June 30, 2025 (thousand USD) | December 31, 2024 (thousand USD) | | :--- | :--- | :--- | | **Non-current Assets** | | | | Property, Plant and Equipment | 2,215,563 | 2,248,541 | | Intangible Assets | 1,388,139 | 1,369,494 | | **Current Assets** | | | | Inventories | 4,293,010 | 4,076,210 | | Trade and Other Receivables | 2,587,042 | 1,993,138 | | Bank Balances, Deposits and Cash | 1,608,391 | 1,232,347 | | **Current Liabilities** | | | | Trade and Other Payables | 4,248,273 | 3,849,627 | | Unsecured Borrowings - Due within one year | 680,914 | 509,850 | | **Non-current Liabilities** | | | | Unsecured Borrowings - Due after one year | 751,692 | 763,650 | | **Equity** | | | | Total Equity Attributable to Shareholders | 6,655,351 | 6,363,597 | - Net current assets increased to **$3.082 billion** from **$2.780 billion** as of December 31, 2024[46](index=46&type=chunk) [Consolidated Statement of Cash Flows](index=13&type=section&id=Consolidated%20Statement%20of%20Cash%20Flows) In H1 2025, net cash from operating activities was $719 million, net cash used in investing activities was $218 million, and net cash used in financing activities was $178 million. Cash and cash equivalents at period-end totaled $1.608 billion, an increase of $323 million from the beginning of the period | Metric | H1 2025 (thousand USD) | H1 2024 (thousand USD) | | :--- | :--- | :--- | | Net Cash From Operating Activities | 719,108 | 774,916 | | Net Cash Used In Investing Activities | (218,086) | (234,591) | | Net Cash Used In Financing Activities | (177,831) | (246,845) | | Net Increase in Cash and Cash Equivalents | 323,191 | 293,480 | | Cash and Cash Equivalents at End of Period | 1,608,391 | 1,226,545 | - Net cash from operating activities was primarily influenced by profit before tax, depreciation and amortization, and changes in working capital[48](index=48&type=chunk) - Net cash used in investing activities was mainly for additions to intangible assets and purchases of property, plant and equipment[49](index=49&type=chunk) - Net cash used in financing activities was primarily affected by proceeds from and repayment of unsecured borrowings, dividends paid, and payments for share repurchases[49](index=49&type=chunk) [Notes to the Condensed Consolidated Financial Statements](index=15&type=section&id=V.%20Notes) [Basis of Preparation](index=15&type=section&id=Basis%20of%20Preparation) The condensed consolidated financial statements are prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" issued by the Hong Kong Institute of Certified Public Accountants and the applicable disclosure requirements of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited - These condensed consolidated financial statements are prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" issued by the Hong Kong Institute of Certified Public Accountants and the applicable disclosure requirements of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[50](index=50&type=chunk) - Comparative information is derived from the statutory annual consolidated financial statements for the year ended December 31, 2024[50](index=50&type=chunk) [Significant Accounting Policies](index=15&type=section&id=Significant%20Accounting%20Policies) The condensed consolidated financial statements are prepared on a historical cost basis, except for certain financial instruments measured at fair value. The application of amendments to Hong Kong Financial Reporting Standards during this interim period had no significant impact on the financial position and performance - These condensed consolidated financial statements are prepared on a historical cost basis, except for certain financial instruments measured at fair value[50](index=50&type=chunk) - The accounting policies and methods of computation adopted in the condensed consolidated financial statements for the six months ended June 30, 2025, are consistent with those presented in the Group's annual financial statements for the year ended December 31, 2024[50](index=50&type=chunk) - The application of amendments to Hong Kong Financial Reporting Standards (such as the amendment to HKAS 21 "Lack of Exchangeability") had no significant impact on the Group's financial position and performance for the current and prior periods[51](index=51&type=chunk) [Segment Information](index=16&type=section&id=Segment%20Information) The Group's revenue and results are analyzed across two reportable operating segments: Power Tools and Floor Care and Cleaning. The Power Tools segment contributes the vast majority of revenue and results, with inter-segment sales calculated at prevailing market prices | Segment | H1 2025 Revenue (thousand USD) | H1 2024 Revenue (thousand USD) | H1 2025 Segment Results (thousand USD) | H1 2024 Segment Results (thousand USD) | | :--- | :--- | :--- | :--- | :--- | | Power Tools | 7,425,059 | 6,884,453 | 699,588 | 616,850 | | Floor Care and Cleaning | 408,024 | 427,535 | 9,664 | 9,325 | | **Consolidated Total** | **7,833,083** | **7,311,988** | **709,252** | **626,175** | - Inter-segment sales are calculated at prevailing market prices[53](index=53&type=chunk) - Segment results represent the profit earned by each segment before interest income and finance costs, which is the basis reported to the executive directors[54](index=54&type=chunk) - The Group does not disclose an analysis of assets and liabilities by operating segment, as such information is not regularly provided to the chief operating decision-makers for their review[55](index=55&type=chunk) [Revenue](index=17&type=section&id=Revenue) Total revenue for H1 2025 was $7.833 billion, primarily from the sale of goods, with commissions and royalty income contributing a smaller portion. Geographically, North America accounted for the majority of revenue, followed by Europe, while other countries saw a decrease | Revenue Source | H1 2025 (thousand USD) | H1 2024 (thousand USD) | | :--- | :--- | :--- | | Sale of Goods | 7,826,450 | 7,306,377 | | Commission and Royalty Income | 6,633 | 5,611 | | **Total Revenue** | **7,833,083** | **7,311,988** | - Revenue from the sale of goods is recognized at a point in time, while commission and royalty income are recognized over time[56](index=56&type=chunk) | Region (Customer Location) | H1 2025 (thousand USD) | H1 2024 (thousand USD) | | :--- | :--- | :--- | | North America | 5,871,986 | 5,461,455 | | Europe | 1,400,825 | 1,251,320 | | Other Countries | 560,272 | 599,213 | | **Total Revenue** | **7,833,083** | **7,311,988** | [Tax Expense](index=17&type=section&id=Tax%20Expense) Tax expense for H1 2025 was $53.157 million, primarily comprising overseas taxation. Hong Kong profits tax is calculated at 16.5%. The Group recognized current top-up tax under Pillar Two legislation and applied the temporary mandatory exception, not recognizing or disclosing deferred tax assets and liabilities | Tax Type | H1 2025 (thousand USD) | H1 2024 (thousand USD) | | :--- | :--- | :--- | | Hong Kong Profits Tax | (815) | (790) | | Overseas Taxation | (53,601) | (40,653) | | Deferred Tax | 1,259 | (1,898) | | **Total Tax Expense** | **(53,157)** | **(43,341)** | - Hong Kong profits tax is calculated at a rate of **16.5%**, while taxes in other jurisdictions are calculated at their respective applicable rates[57](index=57&type=chunk) - The Group is subject to global minimum top-up tax under Pillar Two legislation and has recognized the expected current tax expense[58](index=58&type=chunk) - The Group has applied the temporary mandatory exception regarding the impact of Pillar Two legislation, not recognizing or disclosing deferred tax assets and liabilities[58](index=58&type=chunk) [Profit for the Period](index=18&type=section&id=Profit%20for%20the%20Period) Profit for H1 2025 is stated after deducting (crediting) intangible asset amortization of $109 million, depreciation of property, plant and equipment of $137 million, and depreciation of right-of-use assets of $83.407 million, totaling $329 million in depreciation and amortization. Additionally, it includes impairment loss on trade receivables of $8.983 million, net exchange gain of $59.292 million, and inventory write-downs of $39.007 million | Item | H1 2025 (thousand USD) | H1 2024 (thousand USD) | | :--- | :--- | :--- | | Amortization of Intangible Assets | 109,262 | 94,643 | | Depreciation of Property, Plant and Equipment | 136,866 | 142,561 | | Depreciation of Right-of-Use Assets | 83,407 | 88,436 | | **Total Depreciation and Amortization** | **329,535** | **325,640** | | Fair Value (Gain) Loss on Listed Equity Securities | (569) | 6,444 | | Impairment Loss on Trade Receivables | 8,983 | 23,568 | | Net Exchange Gain | (59,292) | (6,106) | | Inventory Write-downs | 39,007 | 31,214 | | Staff Costs | 1,436,495 | 1,359,469 | [Dividends](index=19&type=section&id=Dividends) A final dividend of $278 million (HK$118.00 cents per share) for 2024 was paid to shareholders on June 27, 2025. The Board resolved to declare an interim dividend of $295 million (HK$125.00 cents per share), an increase from the prior year period - A final dividend for 2024 of **HK$118.00 cents** (approximately **US$15.19 cents**) per share, totaling approximately **$278 million**, was paid to shareholders on June 27, 2025[60](index=60&type=chunk) - The Directors resolved to declare an interim dividend of **HK$125.00 cents** (approximately **US$16.09 cents**) per share, totaling approximately **$295 million**, to shareholders whose names appear on the register of members on September 5, 2025[60](index=60&type=chunk) - The interim dividend for the same period in 2024 was **HK$108.00 cents** (approximately **US$13.90 cents**) per share, totaling approximately **$255 million**[60](index=60&type=chunk) [Earnings Per Share](index=19&type=section&id=Earnings%20Per%20Share) Basic EPS for H1 2025 was 34.37 US cents, and diluted EPS was 34.29 US cents. Diluted EPS calculations did not assume the exercise of share options and vesting of share awards because their exercise prices were higher than the average market price of shares | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Profit Attributable to Shareholders for the Period (thousand USD) | 628,339 | 550,365 | | Weighted Average Number of Ordinary Shares for Basic EPS | 1,828,073,756 | 1,827,109,617 | | Weighted Average Number of Ordinary Shares for Diluted EPS | 1,832,691,734 | 1,835,526,768 | | Basic EPS (US cents) | 34.37 | 30.12 | | Diluted EPS (US cents) | 34.29 | 29.98 | - The exercise prices of the company's share options and the adjusted exercise prices of the company's share awards were higher than the average market price of shares for both six-month periods ended June 30, 2025, and 2024, thus the exercise of these share options and vesting of share awards were not assumed in the calculation of diluted EPS[61](index=61&type=chunk) [Additions to Property, Plant and Equipment / Intangible Assets / Right-of-Use Assets](index=20&type=section&id=Additions%20to%20Property%2C%20Plant%20and%20Equipment%20%2F%20Intangible%20Assets%20%2F%20Right-of-Use%20Assets) During the period, the Group spent $95.815 million on property, plant and equipment and $156 million on intangible assets. Additionally, right-of-use assets and lease liabilities of $42.294 million were recognized due to new lease agreements - During the period, the Group spent approximately **$95.815 million** (H1 2024: **$99.885 million**) on the acquisition of property, plant and equipment[62](index=62&type=chunk) - Approximately **$156 million** (H1 2024: **$170 million**) was spent on the acquisition of intangible assets[62](index=62&type=chunk) - Right-of-use assets of **$42.294 million** (H1 2024: **$102 million**) and lease liabilities of **$42.294 million** were recognized[62](index=62&type=chunk) [Trade and Other Receivables / Bills Receivable](index=20&type=section&id=Trade%20and%20Other%20Receivables%20%2F%20Bills%20Receivable) As of June 30, 2025, total trade receivables were $2.492 billion, with the zero to sixty-day aging category being the largest. Other receivables amounted to $94.555 million. All bills receivable were aged within one hundred and twenty days | Aging | June 30, 2025 (thousand USD) | December 31, 2024 (thousand USD) | | :--- | :--- | :--- | | 0 to 60 days | 2,013,132 | 1,514,752 | | 61 to 120 days | 393,682 | 314,890 | | 121 days or more | 85,673 | 54,489 | | **Total Trade Receivables** | **2,492,487** | **1,884,131** | | Other Receivables | 94,555 | 109,007 | | **Total** | **2,587,042** | **1,993,138** | - The Group's policy grants credit terms to customers ranging from **30 to 120 days**[63](index=63&type=chunk) - All bills receivable of the Group as of June 30, 2025, and December 31, 2024, were aged within **120 days**[63](index=63&type=chunk) [Trade Receivables from Associates](index=20&type=section&id=Trade%20Receivables%20from%20Associates) As of June 30, 2025, and December 31, 2024, trade receivables from associates were all aged within one hundred and twenty days - Trade receivables from associates as of June 30, 2025, and December 31, 2024, were aged within **120 days**[64](index=64&type=chunk) [Trade and Other Payables / Bills Payable](index=21&type=section&id=Trade%20and%20Other%20Payables%20%2F%20Bills%20Payable) As of June 30, 2025, total trade payables were $2.193 billion, with the zero to sixty-day aging category being the largest. Other payables amounted to $2.133 billion, primarily representing accrued selling, general, and administrative expenses. All bills payable were aged within one hundred and twenty days | Aging | June 30, 2025 (thousand USD) | December 31, 2024 (thousand USD) | | :--- | :--- | :--- | | 0 to 60 days | 1,154,696 | 1,202,460 | | 61 to 120 days | 894,314 | 585,127 | | 121 days or more | 143,729 | 63,270 | | **Total Trade Payables** | **2,192,739** | **1,850,857** | | Other Payables | 2,133,383 | 2,086,767 | | **Total** | **4,326,122** | **3,937,624** | | Non-current Portion of Other Payables | (77,849) | (87,997) | - Other payables primarily represent accrued selling, general, and administrative expenses of **$1.886 billion** (2024: **$1.884 billion**)[66](index=66&type=chunk) - Non-current other payables primarily represent accrued supplier expenses and accrued long-term incentive benefits provided to certain senior management personnel of the Group[66](index=66&type=chunk) - All bills payable of the Group as of June 30, 2025, and December 31, 2024, were aged within **120 days** from the invoice date[65](index=65&type=chunk) [Unsecured Borrowings](index=21&type=section&id=Unsecured%20Borrowings) During the period, the Group obtained $3.258 billion in new unsecured borrowings and repaid $3.108 billion. As of June 30, 2025, unsecured borrowings had a carrying value of $752 million, and the company complied with financial ratio covenants linked to the consolidated statement of profit or loss - During the period, the Group obtained new unsecured borrowings of **$3.258 billion** (2024: **$2.252 billion**)[67](index=67&type=chunk) - The Group also repaid unsecured borrowings of **$3.108 billion** (2024: **$2.387 billion**)[67](index=67&type=chunk) - For unsecured borrowings with a carrying value of **$752 million** as of June 30, 2025 (December 31, 2024: **$764 million**), the Group is required to comply with certain financial ratios linked to the consolidated statement of profit or loss for the relevant period[67](index=67&type=chunk) - The Group complied with the relevant covenants at each testing date on or before the end of the reporting period and classified the related bank loan balances as non-current[67](index=67&type=chunk) [Share Capital](index=22&type=section&id=Share%20Capital) As of June 30, 2025, issued and fully paid share capital was $689.991 million, with 1,831,094,941 ordinary shares. During the period, the company repurchased and cancelled 1,250,000 ordinary shares, paying $15.521 million in consideration | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Number of Ordinary Shares (shares) | 1,831,094,941 | 1,832,304,941 | | Share Capital (thousand USD) | 689,991 | 689,684 | - During the period, **40,000 shares** were issued due to the exercise of share options, and **1,250,000 shares** were repurchased[68](index=68&type=chunk) - **750,000 shares** were repurchased in March 2025 for **$10.013 million**; **500,000 shares** were repurchased in June 2025 for **$5.508 million**[68](index=68&type=chunk) - The consideration paid for the repurchased shares, approximately **$15.521 million**, was deducted from retained earnings[68](index=68&type=chunk) - Of the **1,250,000 ordinary shares** repurchased in 2025, **750,000 shares** were cancelled during the six months ended June 30, 2025, and the remaining **500,000 shares** were cancelled in July 2025[68](index=68&type=chunk) [Fair Value Measurement of Financial Instruments](index=23&type=section&id=Fair%20Value%20Measurement%20of%20Financial%20Instruments) The Group's financial assets and liabilities are measured at fair value on a recurring basis and categorized into Level 1 to 3 based on the observability of input data. Key financial instruments include derivative financial instruments (e.g., foreign exchange forward contracts, cross-currency interest rate swaps) and financial assets at fair value through profit or loss (e.g., listed equity securities, club debentures, unlisted equity securities) - The fair value of the Group's financial assets and financial liabilities is measured on a recurring basis[70](index=70&type=chunk) - Fair value measurement inputs are categorized into Level 1 (quoted prices in active markets), Level 2 (observable input data), and Level 3 (unobservable input data)[72](index=72&type=chunk) | Financial Instrument | Fair Value (June 30, 2025) | Level | Valuation Techniques and Key Inputs | | :--- | :--- | :--- | :--- | | Rights to acquire certain property, plant and equipment (derivative financial instruments) | $8.785 million | Level 2 | Valued by independent third-party valuers, measured at fair value of the underlying land and buildings | | Foreign exchange forward contracts (derivative financial instruments) (assets/liabilities) | $19.707 million / $113.015 million | Level 2 | Discounted cash flow, estimated based on forward exchange rates and contract rates | | Listed equity securities | $24.174 million | Level 1 | Quoted prices in active markets | | Club debentures | $4.958 million | Level 2 | Reference to recent transaction prices of similar transactions under comparable circumstances | | Unlisted equity securities | $3.8 million | Level 2 | Reference to recent per-share purchase prices of privately placed equity investments | | Cross-currency interest rate swaps (derivative financial instruments) (assets) | $7.504 million | Level 2 | Estimated and discounted based on the present value of future cash flows using applicable yield curves from interest rate quotations | - The Directors of the company believe that the carrying amounts of financial assets and financial liabilities recognized at amortized cost in the condensed consolidated financial statements approximate their fair values[71](index=71&type=chunk) [Capital Commitments](index=24&type=section&id=Capital%20Commitments) As of June 30, 2025, total capital expenditures contracted but not provided for in the condensed consolidated financial statements, related to the acquisition of property, plant and equipment and equity investments, amounted to $153 million | Item | June 30, 2025 (thousand USD) | December 31, 2024 (thousand USD) | | :--- | :--- | :--- | | Capital expenditure contracted but not provided for in the condensed consolidated financial statements in respect of the acquisition of property, plant and equipment and equity investments | 153,077 | 166,875 |

Financial Performance - Operating profit increased by 14% to $304 million, achieving a second-quarter record[4] - Total revenue rose by 4% to $2.8 billion, also reflecting a 4% increase excluding foreign currency translation effects[7] - The company's operating profit increased by 11% to $292 million, setting a new second-quarter record[19] - Total revenue for the quarter was $2,096 million, a 4% increase year-over-year[11] - Total revenue for the quarter ended June 30, 2025, was $2,787 million, a 4% increase from $2,679 million in 2024[27] - Company restaurant revenue increased by 3% to $2,613 million for the quarter, compared to $2,528 million in the same period last year[27] - The net profit attributable to Yum China Holdings, Inc. was $215 million, a slight increase of 1% from $212 million in the same quarter of 2024[27] - For the six months ended June 30, 2025, total revenue reached $5,768 million, a 2% increase from $5,637 million in 2024[27] - The company reported a net income of $291 million for KFC, while Pizza Hut reported a loss of $1 million, highlighting the disparity in performance between the two brands[49] Sales and Growth - Same-store sales grew by 1%, with a 2% increase in same-store transaction volume, marking the tenth consecutive quarter of growth[7] - Delivery sales grew by 22%, representing about 45% of the company's restaurant revenue[7] - Membership numbers for KFC and Pizza Hut combined reached approximately 560 million, a 13% increase year-over-year[7] - The company aims to add approximately 1,600 to 1,800 new stores in 2025, with a target franchisee ratio of 40%-50% for KFC and 20%-30% for Pizza Hut[20] - The company plans to continue expanding its market presence and investing in new product development to drive future growth[49] Shareholder Returns - The company returned $274 million to shareholders, including $184 million in stock repurchases and $90 million in cash dividends[7] - The company plans to return $3 billion to shareholders between 2025 and 2026, building on the $1.5 billion returned in 2024[12] - The company expects at least $1.2 billion in total shareholder returns for 2025, including $536 million in the first half[12] Operational Efficiency - Operating margin improved by 100 basis points to 10.9%, driven by increased restaurant profitability and reduced management expenses[7] - The company reported a restaurant profit margin of 13.3% for the quarter, up from 13.2% in the same quarter of 2024, reflecting a 0.1 percentage point increase[31] - The total costs and expenses for the quarter were $2,483 million, compared to $2,413 million in the same quarter of 2024, reflecting a rise of 2.9%[50] - The company plans to continue focusing on central procurement to enhance efficiency and profitability across its franchise operations[53] Digital and Innovation - Digital order revenue reached $2.4 billion, accounting for approximately 94% of restaurant revenue[7] - Strong digital capabilities and membership programs enable the company to reach customers faster and provide better service[24] - Yum China aims to become the most innovative restaurant pioneer globally[24] Market Presence - Yum China operates over 16,000 restaurants across more than 2,400 cities in China[24] - The company is a leading brand in Western fast food and casual dining, with KFC and Pizza Hut as its flagship brands[24] - The total number of stores reached 16,978, with 12,238 KFC and 3,864 Pizza Hut locations[7] Financial Metrics - Diluted earnings per share increased by 5% to $0.58, with a 15% increase when excluding the impact of market valuation and foreign currency translation[7] - The effective tax rate for the quarter was 25.8%, slightly up from 25.2% in the previous year[27] - The average number of shares outstanding decreased to 373 million from 389 million year-over-year[27] - Cash and cash equivalents decreased to $592 million as of June 30, 2025, down from $723 million at the end of 2024[33] - Total assets decreased to $10,983 million as of June 30, 2025, compared to $11,121 million at the end of 2024[33] Future Strategies - Future growth strategies include new product innovations and potential market expansions[23] - Management expects revenue growth to continue in the upcoming quarters, supported by strategic initiatives and market expansion efforts[50]

[Chairman's Statement](index=1&type=section&id=Chairman's%20Statement) TOM Group focused on investing in high-growth potential businesses and divesting loss-making operations to enhance shareholder returns in H1 2025, achieving revenue growth and narrowing losses despite macroeconomic challenges [H1 2025 Performance Overview](index=1&type=section&id=H1%202025%20Performance%20Overview) TOM Group focused on investing in high-growth potential businesses and divesting loss-making operations to enhance shareholder returns in H1 2025. Despite macroeconomic headwinds, consolidated revenue from continuing operations increased by 1.1% to HKD 339 million, with gross profit margin improving to 42.7%. Loss attributable to shareholders narrowed by 31% to HKD 96 million, primarily due to lower finance costs and increased share of profits from associates - Despite geopolitical tensions, trade barriers, and policy uncertainties, consolidated revenue from continuing operations increased by **1.1% to HKD 339 million**[2](index=2&type=chunk) - Total gross profit increased from **HKD 139 million to HKD 145 million**, with gross profit margin improving from **41.5% to 42.7%**[2](index=2&type=chunk) - Loss attributable to shareholders from continuing operations narrowed by **31% to HKD 96 million**, mainly due to lower finance costs and increased share of profits from associates[2](index=2&type=chunk) - Profit from continuing operations before net finance costs and tax was **HKD 6 million**, compared to a loss of HKD 19 million in the prior period[2](index=2&type=chunk) [Business Highlights and Strategy](index=1&type=section&id=Business%20Highlights%20and%20Strategy) Youle achieved growth in supply chain innovation and rural e-commerce, recording a net profit of RMB 23 million, reversing a loss from the prior period. The Taiwan publishing group maintained market leadership with revenue of HKD 327 million and segment profit of HKD 19 million, and plans growth through diversified revenue and digital integration. The Group divested its social media business, Pixnet, to optimize resource allocation - Invested in Youle, an e-commerce enterprise operated by China Post, which recorded a net profit of **RMB 23 million**, reversing a loss of RMB 33 million in the prior period[3](index=3&type=chunk) - Taiwan publishing group generated total revenue of **HKD 327 million** and segment profit of **HKD 19 million**, planning to explore diversified revenue streams and accelerate digital integration[4](index=4&type=chunk) - The Group divested its social media business, Pixnet, to consider resource efficiency and capital allocation[5](index=5&type=chunk) [Outlook and Financial Prudence](index=2&type=section&id=Outlook%20and%20Financial%20Prudence) Management will selectively pursue growth opportunities, maintain stable business performance, and uphold a prudent financial position through rigorous monitoring of operating and capital expenditures, along with cash flow and working capital management - Management will selectively pursue growth opportunities and maintain stable business performance[5](index=5&type=chunk) - Maintain a prudent financial position through close monitoring of operating and capital expenditures and investments, implementing rigorous cash flow and working capital management[5](index=5&type=chunk) [Management Discussion and Analysis](index=3&type=section&id=Management%20Discussion%20and%20Analysis) This section provides a detailed review of the Group's financial performance, business segment results, capital resources, and key financial metrics for the period [Financial Summary](index=3&type=section&id=Financial%20Summary) In H1 2025, the Group's continuing operations revenue grew by 1.1% to HKD 339 million, with profit before net finance costs and tax turning profitable at HKD 5.7 million. Loss attributable to equity holders (excluding discontinued operations) narrowed to HKD 95.66 million, with loss per share (excluding discontinued operations) at 2.42 HK cents Condensed Consolidated Interim Financial Summary (For the six months ended June 30) | Indicator | 2025 (HKD thousand) | 2024 (HKD thousand, restated) | | :--- | :--- | :--- | | Consolidated revenue from continuing operations | 338,692 | 334,917 | | Profit/(loss) before net finance costs and tax | 5,722 | (18,804) | | Loss attributable to equity holders (excluding discontinued operations) | (95,663) | (138,676) | | Loss attributable to equity holders (including discontinued operations) | (98,698) | (145,414) | | Loss per share (excluding discontinued operations) | (2.42) HK cents | (3.50) HK cents | | Loss per share (including discontinued operations) | (2.49) HK cents | (3.67) HK cents | | Net debt | (1,696,236) | (1,551,841) | [Business Review](index=4&type=section&id=Business%20Review) Despite a challenging macroeconomic environment, the Group focused on revenue growth, operational efficiency, and cost optimization. Media business revenue was HKD 336 million with a segment profit of HKD 19 million. Technology platform and investment business revenue was HKD 3 million with a segment profit of HKD 9 million, including a reversal from e-commerce business. The Group divested its social media business, Pixnet, and will continue to support the development of the Cite Publishing business - Media business generated total revenue of **HKD 336 million** and segment profit of **HKD 19 million**[8](index=8&type=chunk) - Technology platform and investment business generated total revenue of **HKD 3 million** and segment profit of **HKD 9 million**, including a reversal from e-commerce business[8](index=8&type=chunk) - The Group divested all shares of its social media business, Pixnet, in May 2025[10](index=10&type=chunk) - TOM Group holds a **7.94% equity interest** in WeLab's issued shares, which operates digital banking and online financial services in Asia with over 70 million users[11](index=11&type=chunk) - TOM Group holds a **6.22% equity interest** in Miaoying Technology's issued shares, a leading sustainable development data and software provider in Asia[12](index=12&type=chunk) - The Group invested in Youle, an e-commerce enterprise operated by China Post, committed to supply chain innovation and rural e-commerce business growth[12](index=12&type=chunk) [Media Business](index=4&type=section&id=Media%20Business) Taiwan's Cite Publishing business maintained market leadership through digital transformation, AI applications, new revenue models, and deepened industry collaboration, recording revenue of HKD 327 million and segment profit of HKD 19 million. The Mainland China advertising group recorded revenue of HKD 9 million and a segment loss of HKD 0.6 million - Taiwan's Cite Publishing business generated total revenue of **HKD 327 million** and segment profit of **HKD 19 million**, maintaining leadership through digital transformation, AI applications, and new revenue models[9](index=9&type=chunk) - Mainland China advertising group generated total revenue of **HKD 9 million** and a segment loss of **HKD 0.6 million**[9](index=9&type=chunk) [Technology Platform and Investment](index=4&type=section&id=Technology%20Platform%20and%20Investment) The Group divested its social media business, Pixnet, in May 2025 to facilitate its future development and optimize resources. The Group continues to hold equity interests in WeLab (7.94% stake), a leading Asian fintech company, and Miaoying Technology (6.22% stake), a sustainable development data provider, and has invested in Youle, an e-commerce enterprise operated by China Post - In May 2025, TOM Group divested all shares of its social media business, Pixnet[10](index=10&type=chunk) - TOM Group holds a **7.94% equity interest** in WeLab's issued shares, which operates digital banking and online financial services in Hong Kong, Mainland China, and Indonesia[11](index=11&type=chunk) - TOM Group holds a **6.22% equity interest** in Miaoying Technology's issued shares, a leading sustainable development data and software provider in Asia[12](index=12&type=chunk) - The Group invested in Youle, an e-commerce enterprise operated by China Post, committed to supply chain innovation and rural e-commerce business growth[12](index=12&type=chunk) [Capital Resources and Financial Position](index=5&type=section&id=Capital%20Resources%20and%20Financial%20Position) As of June 30, 2025, the Group's cash and bank balances were approximately HKD 495 million. Total credit facilities were HKD 4.52 billion, with 88.1% (HKD 3.98 billion) utilized. Total principal amount of loans was approximately HKD 3.98 billion, all long-term bank loans at floating rates. The gearing ratio was 174.3%, a slight decrease from 175.6% at the end of 2024. Net current assets increased to HKD 287 million, and the current ratio was 1.54. Net debt was approximately HKD 1.696 billion - As of June 30, 2025, cash and bank balances were approximately **HKD 495 million**[13](index=13&type=chunk) - Total credit facilities were **HKD 4.52 billion**, with **88.1% (HKD 3.98 billion)** utilized[13](index=13&type=chunk) - Total principal amount of loans was approximately **HKD 3.98 billion**, all long-term bank loans at floating rates[13](index=13&type=chunk) - Gearing ratio was **174.3%** (December 31, 2024: 175.6%)[13](index=13&type=chunk) - Net current assets were approximately **HKD 287 million** (December 31, 2024: HKD 233 million)[14](index=14&type=chunk) - Current ratio was **1.54** (December 31, 2024: 1.44)[14](index=14&type=chunk) - Net debt was approximately **HKD 1.696 billion** (December 31, 2024: HKD 1.664 billion)[14](index=14&type=chunk) - Net cash outflow from operating activities after interest and tax narrowed to **HKD 43 million** (prior period: HKD 62 million)[14](index=14&type=chunk) [Analysis of Key Financial Metrics](index=6&type=section&id=Analysis%20of%20Key%20Financial%20Metrics) Despite macroeconomic headwinds, continuing operations revenue was HKD 339 million, and profit before net finance costs and tax turned profitable at HKD 6 million, primarily due to a reversal of long-aged payables and increased share of profits from associates. The divestment of discontinued business Pixnet resulted in a loss of approximately HKD 1 million, with a period loss of approximately HKD 4 million. Loss attributable to equity holders (excluding discontinued operations) was HKD 96 million, and including discontinued operations was HKD 99 million - Continuing operations revenue was **HKD 339 million**, with profit before net finance costs and tax at **HKD 6 million** (prior period: loss of HKD 19 million)[15](index=15&type=chunk) - Profit improvement was mainly due to a reversal of long-aged payables and increased share of profits from associates[15](index=15&type=chunk) - Divestment of social media business Pixnet recorded a loss of approximately **HKD 1 million**, with a period loss from discontinued operations of approximately **HKD 4 million**[15](index=15&type=chunk) - Loss attributable to equity holders (excluding discontinued operations) was **HKD 96 million**, and including discontinued operations was **HKD 99 million**[16](index=16&type=chunk) - Restricted cash was approximately **HKD 5 million**, mainly for performance guarantees and bank credit card advances guarantees[17](index=17&type=chunk) - As of June 30, 2025, the Group had no significant contingent liabilities or post-balance sheet events[18](index=18&type=chunk)[19](index=19&type=chunk) [Condensed Consolidated Interim Financial Statements](index=8&type=section&id=Condensed%20Consolidated%20Interim%20Financial%20Statements) This section presents the Group's interim financial statements, including the income statement, statement of comprehensive income, statement of financial position, and statement of changes in equity [Condensed Consolidated Interim Income Statement](index=8&type=section&id=Condensed%20Consolidated%20Interim%20Income%20Statement) In H1 2025, continuing operations revenue was HKD 339 million, cost of sales HKD 194 million, and gross profit HKD 145 million. Share of profits from investments accounted for using the equity method turned profitable at HKD 7.4 million. Loss for the period was HKD 94.67 million, a significant narrowing from HKD 143 million in the prior period. Basic loss per share was 2.49 HK cents Condensed Consolidated Interim Income Statement (For the six months ended June 30) | Indicator | 2025 (HKD thousand) | 2024 (HKD thousand, restated) | | :--- | :--- | :--- | | **Continuing operations** | | | | Revenue | 338,692 | 334,917 | | Cost of sales | (193,973) | (196,050) | | Selling and marketing expenses | (55,722) | (54,274) | | Administrative expenses | (34,333) | (34,463) | | Other operating expenses, net | (56,314) | (63,578) | | Other (losses)/gains, net | (62) | 155 | | Share of profits less losses of investments accounted for using the equity method | 7,434 | (5,511) | | Profit/(loss) before net finance costs and tax | 5,722 | (18,804) | | Finance costs, net | (92,202) | (110,293) | | Loss before tax | (86,480) | (129,097) | | Loss for the period from continuing operations | (90,983) | (135,245) | | **Discontinued operations** | | | | Loss for the period from discontinued operations | (3,689) | (8,214) | | **Loss for the period** | (94,672) | (143,459) | | Loss for the period attributable to equity holders of the Company | (98,698) | (145,414) | | Basic and diluted loss per share (HK cents) | (2.49) | (3.67) | [Condensed Consolidated Interim Statement of Comprehensive Income](index=10&type=section&id=Condensed%20Consolidated%20Interim%20Statement%20of%20Comprehensive%20Income) In H1 2025, the loss for the period was HKD 94.67 million. Other comprehensive income primarily included exchange differences of HKD 62.05 million and revaluation surplus of financial assets at fair value through other comprehensive income of HKD 0.405 million. Total comprehensive expense for the period was HKD 32.33 million, a significant reduction from HKD 261 million in the prior period Condensed Consolidated Interim Statement of Comprehensive Income (For the six months ended June 30) | Indicator | 2025 (HKD thousand) | 2024 (HKD thousand, restated) | | :--- | :--- | :--- | | Loss for the period | (94,672) | (143,459) | | **Other comprehensive income/(expense), net of tax** | | | | Revaluation surplus/(deficit) of financial assets at fair value through other comprehensive income | 405 | (94,436) | | Exchange differences | 62,050 | (23,485) | | Transfer of exchange reserve on disposal of a subsidiary | (111) | – | | **Total comprehensive expense for the period** | (32,328) | (261,380) | | Total comprehensive expense for the period attributable to equity holders of the Company | (54,699) | (249,465) | [Condensed Consolidated Interim Statement of Financial Position](index=11&type=section&id=Condensed%20Consolidated%20Interim%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's total assets were HKD 2.886 billion, comprising non-current assets of HKD 2.063 billion and current assets of HKD 823 million. Total liabilities were HKD 4.582 billion, with non-current liabilities of HKD 4.047 billion. Net debt was HKD 1.696 billion Condensed Consolidated Interim Statement of Financial Position (As at June 30) | Indicator | June 30, 2025 (HKD thousand) | December 31, 2024 (HKD thousand, audited) | | :--- | :--- | :--- | | **Assets** | | | | Total non-current assets | 2,063,237 | 2,037,383 | | Total current assets | 822,953 | 763,830 | | **Liabilities** | | | | Total current liabilities | 535,755 | 530,632 | | Total non-current liabilities | 4,046,671 | 3,934,477 | | **Net current assets** | 287,198 | 233,198 | | **Net debt** | (1,696,236) | (1,663,896) | | **Total equity** | (1,696,236) | (1,663,896) | [Condensed Consolidated Interim Statement of Changes in Equity](index=13&type=section&id=Condensed%20Consolidated%20Interim%20Statement%20of%20Changes%20in%20Equity) As of June 30, 2025, the total deficit attributable to equity holders of the Company was HKD 2.013 billion, with non-controlling interests at HKD 317 million, resulting in a total deficit of HKD 1.696 billion. Total comprehensive expense for the period was HKD 32.33 million - As of June 30, 2025, accumulated losses attributable to equity holders of the Company were **HKD 7.115 billion**, with a total deficit of **HKD 2.013 billion**[31](index=31&type=chunk) - Non-controlling interests increased to **HKD 317 million**[31](index=31&type=chunk) - Total comprehensive expense attributable to equity holders of the Company for the period ended June 30, 2025, was **HKD 54.7 million**[31](index=31&type=chunk) [Notes to the Condensed Consolidated Interim Financial Information](index=15&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Interim%20Financial%20Information) This section provides detailed notes on the basis of preparation, accounting policies, revenue, segment information, investments, expenses, finance costs, taxation, discontinued operations, loss per share, and receivables/payables [Basis of Preparation and Accounting Policies](index=15&type=section&id=Basis%20of%20Preparation%20and%20Accounting%20Policies) The financial information is prepared in accordance with HKAS 34 and the Listing Rules. The Group has sufficient financial resources for continued operations and is prepared on a going concern basis. Accounting policies are consistent with the 2024 financial statements, with no significant impact from newly adopted standard amendments - Financial information is prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" issued by the HKICPA and the Listing Rules[34](index=34&type=chunk) - The Group has sufficient financial resources to support its continued operations and the financial information is prepared on a going concern basis[34](index=34&type=chunk) - Newly adopted standard amendments have no significant impact on the Group's accounting policies[35](index=35&type=chunk) [Revenue and Segment Information](index=16&type=section&id=Revenue%20and%20Segment%20Information) The Group has four continuing operating segments: e-commerce, mobile internet, publishing, and advertising. The social networking group (Pixnet) was classified as a discontinued operation after its divestment on May 31, 2025. In H1 2025, net revenue from external customers for continuing operations was HKD 339 million, with the publishing business group being the largest contributor. The technology platform and investment segment profit was HKD 8.89 million, and the media business segment profit was HKD 18.69 million - The Group has four continuing operating segments: e-commerce group, mobile internet group, publishing business group, and advertising business group[40](index=40&type=chunk) - The social networking group (Pixnet) was classified as a discontinued operation after its divestment on May 31, 2025[37](index=37&type=chunk)[39](index=39&type=chunk) Net Revenue from External Customers for Continuing Operations in H1 2025 | Segment | Net Revenue (HKD thousand) | | :--- | :--- | | E-commerce Group | – | | Mobile Internet Group | 2,458 | | Publishing Business Group | 326,689 | | Advertising Business Group | 9,545 | | **Total Continuing Operations** | **338,692** | Segment Profit/(Loss) in H1 2025 | Segment | Segment Profit/(Loss) (HKD thousand) | | :--- | :--- | | E-commerce Group | 8,947 | | Mobile Internet Group | (58) | | Publishing Business Group | 19,281 | | Advertising Business Group | (591) | | **Total Continuing Operations** | **27,579** | | Discontinued Operations (Social Networking Group) | (2,471) | [Investments Accounted for Using the Equity Method](index=20&type=section&id=Investments%20Accounted%20for%20Using%20the%20Equity%20Method) As of June 30, 2025, the carrying amount of investments in associates was HKD 371 million. In H1 2025, the share of net profit from associates was HKD 7.4 million, a significant improvement from a loss of HKD 5.5 million in the prior period. Management assessed no further impairment provision was needed - As of June 30, 2025, the carrying amount of investments in associates was **HKD 371 million**[48](index=48&type=chunk) - In H1 2025, the share of net profit from associates was **HKD 7.4 million**, compared to a loss of HKD 5.5 million in the prior period[48](index=48&type=chunk) - Management assessed no indication that the carrying amount of investments accounted for using the equity method required further impairment provision or reversal of impairment provision[48](index=48&type=chunk) [Other Operating Expenses and Gains/Losses](index=20&type=section&id=Other%20Operating%20Expenses%20and%20Gains%2FLosses) In H1 2025, net other operating expenses from continuing operations were HKD 56.31 million, a decrease from HKD 63.58 million in the prior period. Key expenses included staff costs, inventory provisions, depreciation, and amortization. Net other (losses)/gains were a loss of HKD 0.062 million, primarily impacted by exchange losses Other Operating Expenses, Net (For the six months ended June 30) | Expense Category | 2025 Continuing Operations (HKD thousand) | 2024 Continuing Operations (HKD thousand, restated) | | :--- | :--- | :--- | | Staff costs | 37,356 | 38,280 | | Provision for inventories | 7,158 | 5,945 | | Depreciation of property, plant and equipment | 4,184 | 1,869 | | Depreciation of right-of-use assets | 9,059 | 11,405 | | Other (income)/expenses, net | (2,288) | 5,348 | | **Total** | **56,314** | **63,578** | Other (Losses)/Gains, Net (For the six months ended June 30) | Item | 2025 Continuing Operations (HKD thousand) | 2024 Continuing Operations (HKD thousand, restated) | | :--- | :--- | :--- | | Dividend income | 540 | 272 | | Gain on disposal of property, plant and equipment | 1 | 233 | | Exchange losses, net | (603) | (350) | | **Total** | **(62)** | **155** | - Improvement in profit/(loss) before net finance costs and tax was partly attributable to a net reversal of other payables of **HKD 8.933 million**[52](index=52&type=chunk) [Finance Costs and Taxation](index=22&type=section&id=Finance%20Costs%20and%20Taxation) In H1 2025, net finance costs from continuing operations were HKD 92.2 million, a decrease from HKD 110 million in the prior period, mainly due to reduced interest on bank loans and borrowing costs. Tax expense was HKD 4.5 million, primarily for overseas taxation Finance Costs, Net (For the six months ended June 30) | Item | 2025 Continuing Operations (HKD thousand) | 2024 Continuing Operations (HKD thousand, restated) | | :--- | :--- | :--- | | Interest on bank loans and borrowing costs | 92,199 | 110,803 | | Interest cost on lease liabilities | 1,229 | 1,348 | | Bank interest income | (1,162) | (1,771) | | **Total** | **92,202** | **110,293** | Tax Expense (For the six months ended June 30) | Item | 2025 (HKD thousand) | 2024 (HKD thousand, restated) | | :--- | :--- | :--- | | Overseas taxation | 4,409 | 6,303 | | Underprovision in prior years | 167 | 946 | | Deferred tax | (51) | (1,103) | | **Total Tax Expense** | **4,525** | **6,146** | | Tax attributable to loss from continuing operations | 4,503 | 6,148 | | Tax attributable to loss from discontinued operations | 22 | (2) | [Discontinued Operations](index=23&type=section&id=Discontinued%20Operations) The social networking group (Pixnet) was classified as a discontinued operation after its divestment on May 31, 2025. As of the disposal date, its revenue was HKD 5.6 million, operating expenses HKD 8.1 million, and loss before tax HKD 2.57 million. The disposal of the subsidiary resulted in a loss of HKD 1.09 million. Loss for the period from discontinued operations was HKD 3.69 million, a significant narrowing from HKD 8.21 million in the prior period - The social networking group (Pixnet) was classified as a discontinued operation after its divestment on May 31, 2025[58](index=58&type=chunk) Financial Results of Discontinued Operations (For the six months ended June 30) | Indicator | 2025 (HKD thousand) | 2024 (HKD thousand) | | :--- | :--- | :--- | | Revenue | 5,629 | 7,845 | | Operating expenses | (8,100) | (15,926) | | Loss before tax from discontinued operations | (2,574) | (8,216) | | Loss on disposal of a subsidiary | (1,093) | – | | **Loss for the period from discontinued operations** | **(3,689)** | **(8,214)** | [Loss Per Share and Dividends](index=23&type=section&id=Loss%20Per%20Share%20and%20Dividends) In H1 2025, basic loss per share from continuing operations was 2.42 HK cents, from discontinued operations was 0.07 HK cents, totaling 2.49 HK cents. Diluted loss per share was the same as basic loss per share. The Company did not pay or declare any dividends Loss Per Share (For the six months ended June 30) | Item | 2025 (HK cents) | 2024 (HK cents) | | :--- | :--- | :--- | | From continuing operations | (2.42) | (3.50) | | From discontinued operations | (0.07) | (0.17) | | **Total** | **(2.49)** | **(3.67)** | - Diluted loss per share was equivalent to basic loss per share[65](index=65&type=chunk) - The Company did not pay or declare any dividends for the six months ended June 30, 2025[62](index=62&type=chunk) [Trade and Other Receivables/Payables](index=24&type=section&id=Trade%20and%20Other%20Receivables%2FPayables) As of June 30, 2025, total trade receivables were HKD 181 million, with current receivables accounting for HKD 86.14 million. Total trade payables were HKD 112 million, with current payables accounting for HKD 49.18 million. The average credit period for trade receivables was 30 to 180 days Trade and Other Receivables (As at June 30) | Item | June 30, 2025 (HKD thousand) | December 31, 2024 (HKD thousand) | | :--- | :--- | :--- | | Trade receivables | 180,956 | 177,878 | | Prepayments, deposits and other receivables | 42,630 | 41,677 | | **Total** | **223,586** | **219,555** | Ageing Analysis of Trade Receivables (As at June 30) | Ageing | June 30, 2025 (HKD thousand) | December 31, 2024 (HKD thousand) | | :--- | :--- | :--- | | Current | 86,135 | 84,304 | | 31 to 60 days | 40,721 | 47,670 | | 61 to 90 days | 23,455 | 24,056 | | Over 90 days | 59,425 | 49,470 | | **Total (net of impairment allowance)** | **180,956** | **177,878** | Trade and Other Payables (As at June 30) | Item | June 30, 2025 (HKD thousand) | December 31, 2024 (HKD thousand) | | :--- | :--- | :--- | | Trade payables | 111,648 | 103,713 | | Other payables and accrued expenses | 264,357 | 282,132 | | Contract liabilities | 117,463 | 102,711 | | **Total** | **493,468** | **488,556** | Ageing Analysis of Trade Payables (As at June 30) | Ageing | June 30, 2025 (HKD thousand) | December 31, 2024 (HKD thousand) | | :--- | :--- | :--- | | Current | 49,178 | 49,972 | | 31 to 60 days | 12,268 | 8,543 | | 61 to 90 days | 5,910 | 5,541 | | Over 90 days | 44,292 | 39,657 | | **Total** | **111,648** | **103,713** | [Corporate Governance and Other Information](index=26&type=section&id=Corporate%20Governance%20and%20Other%20Information) This section covers the Group's sustainability initiatives, compliance with corporate governance standards, strategic outlook, and key definitions [Sustainability](index=26&type=section&id=Sustainability) The Group is committed to creating long-term value for all stakeholders by aligning sustainability goals with business strategies, supporting the UN Sustainable Development Goals. Its sustainability governance framework is deeply integrated across all levels and guided by four pillars: business, people, environment, and community - The Group's primary sustainability mission is to create long-term value for all stakeholders by aligning sustainability goals with business strategy development[69](index=69&type=chunk) - The sustainability governance framework is deeply integrated across the Board, Sustainability Committee, and business units[69](index=69&type=chunk) - The Group's sustainability approach and priorities are based on four pillars: business, people, environment, and community[69](index=69&type=chunk) [Review and Compliance](index=26&type=section&id=Review%20and%20Compliance) The interim financial statements have been reviewed by PricewaterhouseCoopers and the Audit Committee. The Company complied with all applicable provisions of the Corporate Governance Code during the reporting period, except for the Chairman's absence from the Annual General Meeting. Directors have complied with the Model Code for Securities Transactions - The unaudited condensed consolidated interim financial statements have been reviewed by PricewaterhouseCoopers and the Company's Audit Committee[70](index=70&type=chunk) - The Company complied with all applicable code provisions of the Corporate Governance Code during the six months ended June 30, 2025, except for code provision F.1.3 (Chairman's absence from the Annual General Meeting)[71](index=71&type=chunk)[72](index=72&type=chunk) - All Directors confirmed compliance with the Model Code for Securities Transactions by Directors of Listed Issuers during the reporting period[73](index=73&type=chunk) - During the reporting period, neither the Company nor any of its subsidiaries repurchased, sold, or redeemed any of the Company's listed securities[74](index=74&type=chunk) [Corporate Strategy and Outlook](index=27&type=section&id=Corporate%20Strategy%20and%20Outlook) The Company's main objective is to enhance long-term total returns for all stakeholders, focusing on revenue growth, rigorous profit and cost management, capital and investment return targets, M&A activities, and organic growth. The Group also emphasizes sustainability. The report contains forward-looking statements, but actual results may differ, and the Company assumes no obligation to update them - The Company's main objective is to enhance long-term total returns for all its stakeholders, focusing on revenue growth, rigorous profit and cost management, capital and investment return ratio targets, M&A activities, and organic growth[76](index=76&type=chunk) - The Group also emphasizes sustainable development and provides business solutions that support addressing social and environmental challenges[76](index=76&type=chunk) - Any forward-looking statements and opinions in the report are based on existing plans, estimates, and forecasts, involving risks and uncertainties, and actual results may differ materially[77](index=77&type=chunk) [Definitions and Board of Directors](index=28&type=section&id=Definitions%20and%20Board%20of%20Directors) This section provides definitions of key terms used in the report and lists the members of the Board of Directors as of the announcement date - This section provides definitions of key terms used in the report, such as "Associate," "B2B," "B2C," "China Post," "WeLab," etc[78](index=78&type=chunk)[79](index=79&type=chunk) - As of the announcement date, the Company's Board of Directors includes Executive Director Mr. Yeung Kwok Mung, Non-executive Directors Mr. Frank John Sixt (Chairman) and Ms. Chang Pei Wei, and Independent Non-executive Directors Mr. Sze Cheng George, Dr. Fong Chi Wai, and Mrs. Lee Wang Pui Ling[81](index=81&type=chunk)

[Performance Summary](index=1&type=section&id=Group%20Performance) [Group Performance Summary](index=1&type=section&id=Group%20Performance%20Summary) For the six months ended June 30, 2025, the Group turned from profit to loss, recorded an underlying net loss of **HKD 86 million**, primarily due to increased impairment provisions for development properties. After accounting for revaluation losses on investment properties, loss attributable to shareholders expanded to **HKD 199 million**. The Board decided not to declare an interim dividend Key Interim Performance Indicators | Indicator | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | | Underlying Net (Loss)/Profit | Loss HKD 86 million | Profit HKD 74 million | | Group Loss Attributable to Shareholders | HKD 199 million | HKD 8 million | | Basic Loss Per Share | HKD 0.28 | HKD 0.01 | | Interim Dividend | Nil | Nil | - The primary reason for the performance decline was a doubling of the share of impairment provisions for development properties to **HKD 211 million**, compared to the same period last year's **HKD 103 million**[2](index=2&type=chunk) - Net revaluation losses on investment properties expanded to **HKD 113 million**, further exacerbating the Group's loss[2](index=2&type=chunk) [Business Review](index=1&type=section&id=Business%20Review) [Market Environment](index=1&type=section&id=Market%20Environment) During the period, Hong Kong's consumer market remained sluggish, with pressure on retail and hospitality sectors, though visitor arrivals increased by **12%** year-on-year and retail sales showed signs of stabilization. The Mainland China market faced continued adversity and intense competition in the hotel sector due to weak economic growth and subdued consumer sentiment - Hong Kong's consumer market remained sluggish, coupled with the trend of Hong Kong residents traveling abroad, posing significant pressure on the local retail and hotel industries[5](index=5&type=chunk) - Despite the weak market, Hong Kong's visitor arrivals increased by **12%** year-on-year in the first half, and retail sales in May also grew by **2.4%** year-on-year, showing initial signs of stabilization[5](index=5&type=chunk) - Weak economic growth and subdued consumer sentiment in Mainland China, coupled with intense competition among regional attractions, intensified operational pressure on the hotel industry[6](index=6&type=chunk) [Segment Business Performance](index=2&type=section&id=Segment%20Business%20Performance) All business segments faced challenges. Hong Kong hotel operations, despite higher occupancy, performed poorly. Investment properties saw declines in both revenue and profit due to cautious spending. Mainland China hotel operations experienced revenue decreases due to market weakness and increased competition. Development property sales were slow, leading to significant impairment provisions - Hong Kong hotel operations (The Murray, Marco Polo Hotels) recorded higher occupancy rates but overall underperformed, requiring capital investment to enhance competitiveness[7](index=7&type=chunk) - Investment property revenue and operating profit decreased by **22%** and **23%** respectively, with a revaluation loss of **HKD 113 million** recorded[8](index=8&type=chunk) - Mainland China hotel (Niccolo Suzhou) experienced declines in both room and non-room revenue due to market weakness and pricing pressure[9](index=9&type=chunk) - Development property sales were slow, with only **RMB 19 million** in contracted sales recorded during the period, and an impairment provision of **HKD 211 million** made[10](index=10&type=chunk) [Outlook](index=3&type=section&id=Outlook) [Market Outlook and Group Strategy](index=3&type=section&id=Market%20Outlook%20and%20Group%20Strategy) The Group anticipates that while Hong Kong's retail and tourism sectors show signs of recovery, their foundation remains fragile, and Mainland China's luxury hotel industry will continue to be affected by economic downturn and cautious consumer spending. To address these challenges, the Group's strategic focus is on enhancing operational efficiency, service quality, and optimizing its asset portfolio, leveraging a robust balance sheet to navigate market changes - Hong Kong's consumer sentiment is expected to remain fragile, with competition from surrounding regions continuing to lead to consumer outflow[11](index=11&type=chunk) - Mainland China's economic growth is projected to remain sluggish, and the hotel industry will face intense domestic competition and challenges from consumer outflow to outbound tourism[11](index=11&type=chunk) - The Group's strategic focus is on enhancing operational efficiency, service quality, and optimizing its asset portfolio, leveraging a robust balance sheet to seek long-term growth opportunities[11](index=11&type=chunk) [Financial Review](index=4&type=section&id=Financial%20Review) [Review of 2025 Interim Results](index=4&type=section&id=Review%20of%202025%20Interim%20Results) The Group's total revenue increased by **5%** year-on-year to **HKD 654 million**, but operating profit significantly decreased by **40%** to **HKD 125 million**. The results turned from profit to loss, recording a net loss attributable to shareholders of **HKD 199 million**, primarily due to increased impairment provisions for development properties and revaluation losses on investment properties Group Revenue and Operating Profit Overview (HKD Million) | Indicator | 2025 H1 | 2024 H1 | YoY Change | | :--- | :--- | :--- | :--- | | Total Revenue | 654 | 623 | +5% | | Operating Profit | 125 | 209 | -40% | Performance by Business Segment (HKD Million) | Business Segment | Item | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | :--- | | **Hotels** | Revenue | 426 | 422 | | | Operating Loss | (29) | (43) | | **Investment Properties** | Revenue | 96 | 123 | | | Operating Profit | 85 | 111 | | **Development Properties** | Revenue | 58 | 8 | | | Operating (Loss)/Profit | (1) | 74 | - Loss attributable to associates expanded to **HKD 155 million**, primarily due to impairment provisions of **HKD 178 million** for their development properties[18](index=18&type=chunk) Reconciliation of Underlying Net Profit to Loss Attributable to Shareholders (HKD Million) | Item | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | | Underlying Net (Loss)/Profit | (86) | 74 | | Share of Net Revaluation Loss on Investment Properties | (113) | (82) | | **Loss Attributable to Shareholders** | **(199)** | **(8)** | [Financial Position and Liquidity](index=5&type=section&id=Review%20of%20Financial%20Position%2C%20Liquidity%2C%20Financial%20Resources%20and%20Commitments) Despite recording a loss, the Group's financial position remains robust. Shareholders' equity increased to **HKD 14.6 billion** due to investment revaluation surplus. The Group's total assets are approximately **HKD 16.1 billion**, with **80%** located in Hong Kong. At period-end, the Group held net cash of **HKD 167 million** and possessed sufficient standby credit facilities and a liquid equity investment portfolio - As at June 30, 2025, shareholders' equity increased to **HKD 14.597 billion**, primarily due to an investment revaluation surplus of **HKD 596 million**[21](index=21&type=chunk) - The Group's total assets were **HKD 16.09 billion**, with Hong Kong assets accounting for **80%** and Mainland China assets for **12%**[22](index=22&type=chunk) Equity Investment Portfolio (HKD Million) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **By Industry** | | | | Property | 2,633 | 2,171 | | Others | 418 | 334 | | **By Geography** | | | | Hong Kong | 1,745 | 1,498 | | Overseas | 1,306 | 1,007 | | **Total** | **3,051** | **2,505** | - At period-end, the Group held net cash of **HKD 167 million** and had total standby credit facilities of **HKD 1.333 billion**, of which **HKD 429 million** had been utilized[28](index=28&type=chunk)[29](index=29&type=chunk) - Net cash inflow from operating activities was **HKD 94 million**, and net cash inflow from investing activities was **HKD 44 million**[30](index=30&type=chunk) [Human Resources](index=7&type=section&id=Human%20Resources) As at June 30, 2025, the Group employed approximately **1,100** staff. Remuneration policy is based on job responsibilities and market trends, with discretionary performance bonuses linked to individual and Group performance - As at June 30, 2025, the Group employed approximately **1,100** staff[32](index=32&type=chunk) [Consolidated Financial Statements](index=8&type=section&id=Consolidated%20Financial%20Statements) [Consolidated Statement of Profit or Loss](index=8&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss) For the six months ended June 30, 2025, the Group's revenue was **HKD 654 million**, a year-on-year increase. However, due to fair value changes in investment properties, increased other net expenses, and expanded losses from associates, a pre-tax loss of **HKD 189 million** was recorded, with loss attributable to shareholders at **HKD 199 million** Consolidated Statement of Profit or Loss Summary (HKD Million) | Item | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | | Revenue | 654 | 623 | | Operating Profit | 125 | 209 | | Fair Value Changes of Investment Properties | (113) | (82) | | Share of Post-tax Results of Associates | (155) | (113) | | (Loss)/Profit Before Tax | (189) | 3 | | **Loss Attributable to Company Shareholders** | **(199)** | **(8)** | [Consolidated Statement of Comprehensive Income](index=9&type=section&id=Consolidated%20Statement%20of%20Comprehensive%20Income) During the period, despite an operating loss of **HKD 211 million**, other comprehensive income recorded a positive value due to a **HKD 596 million** gain from fair value changes in equity investments, resulting in a total comprehensive income of **HKD 405 million** for the period Consolidated Statement of Comprehensive Income Summary (HKD Million) | Item | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | | Loss for the Period | (211) | (17) | | Fair Value Changes of Equity Investments | 596 | (421) | | Other Comprehensive Income for the Period | 616 | (430) | | **Total Comprehensive Income for the Period** | **405** | **(447)** | [Consolidated Statement of Financial Position](index=10&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As at June 30, 2025, the Group's total assets were **HKD 16.09 billion**, total liabilities were **HKD 1.39 billion**, and net assets were **HKD 14.7 billion**. Shareholders' equity increased from end-2024 to **HKD 14.597 billion** Consolidated Statement of Financial Position Summary (HKD Million) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Non-current Assets** | 14,530 | 14,325 | | Investment Properties | 4,833 | 4,946 | | Hotel Properties, Plant and Equipment | 6,425 | 6,504 | | Equity Investments | 3,051 | 2,505 | | **Current Assets** | 1,560 | 1,476 | | **Total Assets** | **16,090** | **15,801** | | **Total Liabilities** | (1,390) | (1,471) | | **Net Assets** | **14,700** | **14,330** | | **Shareholders' Equity** | 14,597 | 14,217 | [Notes to Interim Financial Information](index=11&type=section&id=Notes%20to%20Unaudited%20Interim%20Financial%20Information) [Principal Accounting Policies and Basis of Preparation](index=11&type=section&id=Principal%20Accounting%20Policies%20and%20Basis%20of%20Preparation) This interim financial information is prepared in accordance with Hong Kong Accounting Standard 34, with accounting policies consistent with the 2024 annual financial statements. The Group adopted amendments to Accounting Standard 21 during the period, but assessed no significant impact on its financial position - The interim financial information is prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting"[36](index=36&type=chunk) - Except for the adoption of Accounting Standard 21 (Revised), the accounting policies used are consistent with the 2024 annual financial statements, and this revision has no significant impact on the Group[36](index=36&type=chunk)[37](index=37&type=chunk) [Segment Information](index=12&type=section&id=Segment%20Information) The Group's operating segments are classified into four sectors: Hotels, Investment Properties, Development Properties, and Investments. During the period, the Development Properties segment recorded the largest loss of **HKD 202 million**, while the Investments segment contributed a profit of **HKD 70 million**. Hotel business losses narrowed, and investment property profits declined - The Group identified four reportable operating segments: Hotels, Investment Properties, Development Properties, and Investments[39](index=39&type=chunk) Segment Performance Analysis (For the six months ended June 30, 2025, HKD Million) | Segment | Revenue | Operating Profit/(Loss) | Profit/(Loss) Before Tax | | :--- | :--- | :--- | :--- | | Hotels | 426 | (29) | (29) | | Investment Properties | 96 | 85 | (28) | | Development Properties | 58 | (1) | (202) | | Investments | 70 | 70 | 70 | | **Group Total** | **654** | **125** | **(189)** | [Other Disclosures](index=18&type=section&id=Other%20Disclosures) [Corporate Governance and Securities Transactions](index=18&type=section&id=Corporate%20Governance%20and%20Securities%20Transactions) During the reporting period, the Company complied with all applicable provisions of the Corporate Governance Code, with the sole exception of the roles of Chairman and Chief Executive Officer being held by the same individual, which the Board believes contributes to efficient execution of long-term strategies. Furthermore, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the period - The Company complied with the Corporate Governance Code, with a deviation where the Chairman and Chief Executive Officer roles are held by the same person, an arrangement the Board considers more effective[56](index=56&type=chunk) - During the financial period under review, neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[57](index=57&type=chunk)

[Performance Highlights](index=1&type=section&id=Performance%20Highlights) China Tower Corporation Limited reported stable performance growth in H1 2025, with operating revenue up 2.8% to RMB 49.601 billion, profit attributable to shareholders up 8.0%, and EBITDA up 3.6% | Metric | H1 2025 (RMB Billion) | YoY Growth (%) | | :--- | :--- | :--- | | Operating Revenue | 49.601 | 2.8% | | Telecommunication Operators Business Revenue | 42.461 | 0.8% | | - Tower Business Revenue | 37.797 | Flat | | - Indoor DAS Business Revenue | 4.664 | 12.0% | | Smart Tower Business Revenue | 4.726 | 18.7% | | Energy Business Revenue | 2.209 | 9.2% | | EBITDA | 34.227 | 3.6% | | Profit Attributable to Equity Holders of the Company | 5.757 | 8.0% | | Net Cash Flow from Operating Activities | 28.679 | - | | Free Cash Flow | 16.287 | - | | Interim Dividend (per share) | 0.13250 RMB | - | [Management Discussion and Analysis](index=2&type=section&id=Management%20Discussion%20and%20Analysis) The company maintained its strategic positioning and deepened the "One Core, Two Wings" strategy in H1 2025, achieving steady growth, robust financial health, enhanced profitability, and strong shareholder returns [Strategic Positioning and Overall Performance](index=2&type=section&id=Strategic%20Positioning%20and%20Overall%20Performance) The company solidified its strategic positioning as a world-class digital infrastructure and information/new energy application service provider, leveraging national strategic opportunities and the "One Core, Two Wings" strategy for high-quality development - The company's strategic positioning is to be a **world-class integrated digital infrastructure service provider**, a **highly competitive information application service provider**, and a **highly competitive new energy application service provider**[5](index=5&type=chunk) - The company capitalized on opportunities from the national strategies of **Cyber Superpower**, **Digital China**, and **Dual Carbon goals**, deepening its **"One Core, Two Wings" strategy**[5](index=5&type=chunk) [Financial Performance](index=2&type=section&id=Financial%20Performance) In H1 2025, operating revenue grew 2.8% to RMB 49.601 billion, EBITDA increased 3.6% to RMB 34.227 billion, and profit attributable to shareholders rose 8.0% to RMB 5.757 billion, with a robust financial position marked by a 1.5 percentage point decrease in net debt leverage ratio to 29.5% | Metric | H1 2025 (RMB Billion) | YoY Growth (%) | | :--- | :--- | :--- | | Operating Revenue | 49.601 | 2.8% | | EBITDA | 34.227 | 3.6% | | EBITDA Margin | 69.0% | Up 0.5 percentage points | | Profit Attributable to Equity Holders of the Company | 5.757 | 8.0% | | Net Profit Margin | 11.6% | - | | Net Cash Flow from Operating Activities | 28.679 | Decreased by RMB 4.151 billion | | Capital Expenditure | 12.392 | - | | Free Cash Flow | 16.287 | Decreased by RMB 2.814 billion | | Total Assets (as of June 30) | 331.127 | - | | Interest-Bearing Debt (as of June 30) | 92.639 | - | | Net Debt Leverage Ratio (as of June 30) | 29.5% | Down 1.5 percentage points | | Interim Dividend (per share) | 0.13250 RMB | - | [Business Performance](index=2&type=section&id=Business%20Performance) The company optimized resource allocation and deepened reform in H1, achieving stable and quality-driven business growth, with steady operator business, increasing tower sites and tenants, rapid indoor DAS growth, and double-digit revenue increases in both Smart Tower and Energy businesses [Telecommunication Operators Business](index=3&type=section&id=Telecommunication%20Operators%20Business) Leveraging its role as a key player in 5G new infrastructure, the company capitalized on 5G network expansion, enhancing resource sharing and specialized operational capabilities to meet customer network deployment needs, resulting in RMB 42.461 billion in revenue, a 0.8% year-on-year increase - Telecommunication Operators Business revenue reached **RMB 42.461 billion**, a **0.8% year-on-year increase**[9](index=9&type=chunk) - The company, as a national team for mobile communication infrastructure construction and a main force in 5G new infrastructure, continuously enhanced its capabilities in **resource coordination, sharing, and specialized operations**[9](index=9&type=chunk) [Tower Business](index=3&type=section&id=Tower%20Business) Tower business revenue was RMB 37.797 billion, remaining flat year-on-year, with tower sites reaching 2.119 million and operator tower tenants increasing to 3.579 million by June 2025, achieving an average of 1.72 tenants per site | Metric | H1 2025 | Change from Year-End Last Year | | :--- | :--- | :--- | | Tower Business Revenue | RMB 37.797 Billion | Flat | | Number of Tower Sites | 2.119 Million Units | Increased by 25,000 units | | Number of Operator Tower Tenants | 3.579 Million Households | Increased by 35,000 households | | Average Number of Operator Tower Tenants per Site | 1.72 Households | - | [Indoor DAS Business](index=3&type=section&id=Indoor%20DAS%20Business) Indoor DAS business revenue grew 12.0% year-on-year to RMB 4.664 billion, maintaining high-speed growth, with cumulative building coverage reaching 13.85 billion square meters and high-speed rail/subway coverage extending to 30,878 kilometers | Metric | H1 2025 | YoY Growth (%) | | :--- | :--- | :--- | | Indoor DAS Business Revenue | RMB 4.664 Billion | 12.0% | | Cumulative Building Indoor DAS Coverage Area | 13.85 Billion Sq. Meters | 20.0% | | Cumulative High-Speed Rail Tunnel and Subway Coverage Mileage | 30,878 Kilometers | 17.0% | [Two Wings Business](index=4&type=section&id=Two%20Wings%20Business) Two Wings Business revenue reached RMB 6.935 billion, increasing its share of operating revenue to 14.0%, a 1.6 percentage point rise year-on-year, driven by rapid development in both Smart Tower and Energy businesses | Metric | H1 2025 (RMB Billion) | Share of Operating Revenue | | :--- | :--- | :--- | | Two Wings Business Revenue | 6.935 | 14.0% (Up 1.6 percentage points YoY) | [Smart Tower Business](index=4&type=section&id=Smart%20Tower%20Business) Smart Tower Business revenue grew 18.7% year-on-year to RMB 4.726 billion, with Tower Vision business contributing RMB 2.822 billion, representing 59.7% of Smart Tower revenue, as the company transforms communication towers into digital towers for spatial digital governance | Metric | H1 2025 (RMB Billion) | YoY Growth (%) | | :--- | :--- | :--- | | Smart Tower Business Revenue | 4.726 | 18.7% | | Tower Vision Business Revenue | 2.822 | - | | Tower Vision Business Share of Smart Tower Business Revenue | 59.7% | - | - Smart Tower Business focused on key scenarios such as **farmland protection, fishery law enforcement, forest fire prevention, disaster early warning, and emergency rescue**, enhancing market share and leading advantages[12](index=12&type=chunk) [Energy Business](index=5&type=section&id=Energy%20Business) Energy Business revenue increased 9.2% year-on-year to RMB 2.209 billion, with Tower Battery Swap business contributing RMB 1.323 billion, accounting for 59.9% of energy revenue, maintaining its leading position in the low-speed electric vehicle battery swap market with 1.47 million users | Metric | H1 2025 (RMB Billion) | YoY Growth (%) | | :--- | :--- | :--- | | Energy Business Revenue | 2.209 | 9.2% | | Tower Battery Swap Business Revenue | 1.323 | - | | Tower Battery Swap Business Share of Energy Business Revenue | 59.9% | - | | Number of Tower Battery Swap Users (as of June 30) | 1.47 Million Households | Increased by 166,000 households from year-end last year | - Energy Business focused on core services like **battery swap and backup power**, deeply cultivating the **C-end food delivery market and B-end customers**, and expanding its **community charging facility network**[14](index=14&type=chunk) [Technological Innovation](index=5&type=section&id=Technological%20Innovation) The company intensified its technology innovation drive in H1, increasing R&D personnel by 29% year-on-year and cumulative authorized invention patents by 16% from year-end 2024, focusing on key core technologies and accelerating technology commercialization - **R&D personnel increased by 29%** compared to the same period last year[15](index=15&type=chunk) - **Cumulative authorized invention patents increased by 16%** from year-end 2024[15](index=15&type=chunk) - Strengthened R&D in key core technologies including **next-generation mobile communication, artificial intelligence, edge computing, 5G+Beidou, 5G shared indoor DAS, new energy, and IoT**[15](index=15&type=chunk) [Corporate Governance and Social Responsibility](index=6&type=section&id=Corporate%20Governance%20and%20Social%20Responsibility) The company prioritizes sustainable development and actively fulfills its ESG responsibilities, promoting green development, resource recycling, clean energy, social welfare, communication assurance, and robust corporate governance - Adhered to **green development principles**, promoted **resource recycling**, and increased the application of **photovoltaic and other clean energy** at base stations[16](index=16&type=chunk) - Enhanced social well-being by providing **communication assurance for major events**, **emergency early warning for natural disasters**, and contributing to **rural revitalization**[16](index=16&type=chunk) - Continuously improved **corporate governance**, strictly complied with **listing regulatory rules**, optimized governance mechanisms, and enhanced **legal and compliant operational management**[16](index=16&type=chunk) [Future Outlook](index=6&type=section&id=Future%20Outlook) The company will continue its shared development philosophy and "One Core, Two Wings" strategy, enhancing core competitiveness, expanding operator business through 5G and national policies, deepening digital technology applications in Smart Tower business, optimizing energy networks, and focusing on core technology breakthroughs for high-quality development - Telecommunication Operators Business will seize opportunities from **"Signal Upgrade" and "Broadband Frontier" special actions** and **5G-A construction**, enhancing its **"three advantages and one low" competitive edge**[17](index=17&type=chunk) - Smart Tower Business will leverage its **"location + computing + power + security" resource advantages** to deepen the application of **digital intelligence technology in social governance** and strategically deploy in **emerging industries like edge computing**[18](index=18&type=chunk) - Energy Business will **optimize its battery swap network layout**, deepen the operation of its **VIP star-rated user system**, and promote **"backup power+" integrated industry solutions**[18](index=18&type=chunk) - The company will continue to focus on **core technology breakthroughs**, increase the promotion and commercialization of scientific and technological achievements, and cultivate **new quality productive forces**[18](index=18&type=chunk) [Group Performance](index=8&type=section&id=Group%20Performance) This section presents China Tower Corporation Limited's unaudited consolidated financial statements for the six months ended June 30, 2025, including the consolidated statement of comprehensive income and consolidated statement of financial position, detailing key financial data such as revenue, expenses, profit, assets, liabilities, and equity [Unaudited Interim Consolidated Statement of Comprehensive Income](index=8&type=section&id=Unaudited%20Interim%20Consolidated%20Statement%20of%20Comprehensive%20Income) For the six months ended June 30, 2025, operating revenue was RMB 49,601 million, a 2.8% year-on-year increase, with profit attributable to equity holders of the Company at RMB 5,757 million, up 8.0%, and basic and diluted earnings per share at RMB 0.3293 | Metric | 2025 (RMB Million) | 2024 (RMB Million) | | :--- | :--- | :--- | | Operating Revenue | 49,601 | 48,247 | | Operating Profit | 8,629 | 8,146 | | Profit Before Tax | 7,605 | 7,037 | | Income Tax Expense | (1,847) | (1,707) | | Profit Attributable to Equity Holders of the Company | 5,757 | 5,330 | | Basic and Diluted Earnings Per Share (RMB) | 0.3293 | 0.3049 | [Unaudited Interim Consolidated Statement of Financial Position](index=9&type=section&id=Unaudited%20Interim%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, total assets were RMB 331,127 million, a slight decrease from year-end 2024, with equity attributable to equity holders of the Company at RMB 200,351 million and total liabilities at RMB 130,774 million, notably with a significant reduction in non-current borrowings | Metric | June 30, 2025 (RMB Million) | December 31, 2024 (RMB Million) | | :--- | :--- | :--- | | Total Assets | 331,127 | 332,834 | | Non-Current Assets | 234,272 | 241,474 | | Current Assets | 96,855 | 91,360 | | Equity Attributable to Equity Holders of the Company | 200,351 | 199,978 | | Total Equity | 200,353 | 199,979 | | Total Liabilities | 130,774 | 132,855 | | Non-Current Liabilities (Borrowings) | 24,882 | 41,084 | | Current Liabilities (Borrowings) | 44,212 | 28,525 | [Notes to the Unaudited Interim Financial Report](index=11&type=section&id=Notes%20to%20the%20Unaudited%20Interim%20Financial%20Report) This section provides detailed supplementary information for understanding the interim financial report, covering the basis of preparation, accounting policy changes, segment reporting, revenue composition, income tax calculation, earnings per share, dividend policy, receivables and payables, restricted share scheme, and leasing information [Basis of Preparation and Changes in Accounting Policies](index=11&type=section&id=Basis%20of%20Preparation%20and%20Changes%20in%20Accounting%20Policies) The interim financial report is prepared in accordance with IAS 34 and should be read in conjunction with the 2024 annual audited consolidated financial statements, with consistent accounting policies and no significant changes in financial risk management or material impact from IAS 21 amendments - The interim financial report is prepared in accordance with **International Accounting Standard 34 "Interim Financial Reporting"**[24](index=24&type=chunk) - The Group has applied the amendments to **IAS 21 "The Effects of Changes in Foreign Exchange Rates: Lack of Exchangeability"**, which had no material impact on performance or financial position[25](index=25&type=chunk) [Segment Reporting](index=11&type=section&id=Segment%20Reporting) The company's chief operating decision maker assesses performance based on revenue from tower, indoor DAS, Smart Tower, and energy businesses but reviews the Group as a whole, thus determining it has only one operating segment, with nearly all long-term assets, revenue, and operating profit originating from mainland China - The Group is determined to have **only one operating segment**, with the chief operating decision maker reviewing the Group's performance and resources as a whole[26](index=26&type=chunk) - Almost all of the Group's **long-term assets, revenue, and operating profit originate from mainland China**[26](index=26&type=chunk) [Operating Revenue](index=12&type=section&id=Operating%20Revenue) Total operating revenue for H1 2025 was RMB 49,601 million, with tower business contributing RMB 37,797 million, indoor DAS RMB 4,664 million, Smart Tower RMB 4,726 million, and energy business RMB 2,209 million, primarily from the three major telecommunication operators, accounting for 85.7% of total revenue | Business Type | H1 2025 (RMB Million) | H1 2024 (RMB Million) | | :--- | :--- | :--- | | Tower Business | 37,797 | 37,957 | | Indoor DAS Business | 4,664 | 4,164 | | Smart Tower Business | 4,726 | 3,982 | | Energy Business | 2,209 | 2,023 | | Others | 205 | 121 | | **Total** | **49,601** | **48,247** | | Major Customers | H1 2025 (RMB Million) | H1 2024 (RMB Million) | | :--- | :--- | :--- | | China Mobile Group | 21,189 | 21,281 | | China Telecom Group | 10,870 | 10,617 | | China Unicom Group | 10,428 | 10,505 | | **Total for Three Telecommunication Operators** | **42,487** | **42,403** | | **Share of Total Revenue** | **85.7%** | **87.9%** | [Income Tax Expense](index=13&type=section&id=Income%20Tax%20Expense) Income tax expense for H1 2025 was RMB 1,847 million, with the company generally subject to China's statutory corporate income tax rate of 25%, though certain provincial branches and subsidiaries benefit from a preferential 15% rate | Metric | 2025 (RMB Million) | 2024 (RMB Million) | | :--- | :--- | :--- | | Current Tax | 2,099 | 1,839 | | Deferred Tax | (252) | (132) | | **Income Tax Expense** | **1,847** | **1,707** | | Tax payable at China's statutory rate of 25% | 1,901 | 1,759 | | Tax impact of preferential tax rates | (124) | (112) | - Certain provincial branches and subsidiaries, including those in **Western Development regions, Hainan Free Trade Port, and high-tech enterprise China Tower Smart Technology Co., Ltd.**, enjoy a **preferential income tax rate of 15%**[31](index=31&type=chunk) [Basic and Diluted Earnings Per Share](index=14&type=section&id=Basic%20and%20Diluted%20Earnings%20Per%20Share) Basic earnings per share for H1 2025 was RMB 0.3293, with the weighted average number of ordinary shares outstanding retrospectively adjusted to 17,481 million due to a share consolidation and capital reduction effective February 20, 2025, resulting in diluted EPS equaling basic EPS due to no dilutive potential ordinary shares | Metric | 2025 (Restated) | 2024 (Restated) | | :--- | :--- | :--- | | Profit Attributable to Equity Holders of the Company (RMB Million) | 5,757 | 5,330 | | Weighted Average Number of Ordinary Shares Outstanding after Share Consolidation and Capital Reduction (Million) | 17,481 | 17,481 | | Basic Earnings Per Share (RMB) | 0.3293 | 0.3049 | - A **share consolidation and capital reduction** effective February 20, 2025, merged every ten shares into one, reducing the total issued share capital from **RMB 176,008,471,024 to RMB 17,600,847,102**[32](index=32&type=chunk) - For the six months ended June 30, 2024, and 2025, there were **no dilutive potential ordinary shares**, thus diluted earnings per share equaled basic earnings per share[35](index=35&type=chunk) [Dividends](index=15&type=section&id=Dividends) The Board resolved to declare an interim dividend of RMB 0.13250 per ordinary share (before tax) for the six months ended June 30, 2025, totaling approximately RMB 2,316 million, which was declared after the reporting period and thus not recognized as a liability as of June 30, 2025 - The Board resolved to declare an **interim dividend of RMB 0.13250 per ordinary share (before tax)** for the six months ended June 30, 2025, totaling approximately **RMB 2,316 million**[36](index=36&type=chunk) - The **2024 final dividend** was **RMB 0.30796 per share (before tax)**, totaling approximately **RMB 5,384 million**[36](index=36&type=chunk) [Trade and Other Receivables](index=15&type=section&id=Trade%20and%20Other%20Receivables) As of June 30, 2025, total trade and other receivables were RMB 85,110 million, a slight decrease from year-end 2024, with net trade receivables of RMB 78,011 million primarily from the three major telecommunication operators, and net other receivables of RMB 7,099 million mainly comprising payments on behalf of others and deposits | Metric | June 30, 2025 (RMB Million) | December 31, 2024 (RMB Million) | | :--- | :--- | :--- | | Trade Receivables - Net | 78,011 | 79,436 | | Other Receivables - Net | 7,099 | 6,471 | | **Total Trade and Other Receivables** | **85,110** | **85,907** | | Trade Receivables by Customer (June 30, 2025) | Amount (RMB Million) | | :--- | :--- | | China Mobile Group | 39,234 | | China Unicom Group | 16,912 | | China Telecom Group | 13,056 | | Others | 13,680 | - Trade receivables included **bank and finance company acceptance bills of RMB 798 million** and **commercial acceptance bills of RMB 22,740 million**[39](index=39&type=chunk) [Trade Payables](index=17&type=section&id=Trade%20Payables) As of June 30, 2025, total trade payables were RMB 30,668 million, a decrease from year-end 2024, primarily comprising amounts due for construction, maintenance, and other operating expenses, predominantly denominated in RMB | Ageing | June 30, 2025 (RMB Million) | December 31, 2024 (RMB Million) | | :--- | :--- | :--- | | Not exceeding 6 months | 18,906 | 24,418 | | 6 months to 1 year | 6,562 | 4,095 | | Over 1 year | 5,200 | 4,756 | | **Total** | **30,668** | **33,269** | [Shares Held for Restricted Share Incentive Scheme](index=17&type=section&id=Shares%20Held%20for%20Restricted%20Share%20Incentive%20Scheme) As of June 30, 2025, the total number of shares held for the restricted share incentive scheme was 120 million, valued at RMB 1,954 million, adjusted from 1,196 million shares due to a share consolidation and capital reduction effective February 20, 2025, with no active restricted share incentive schemes currently in place | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Number of Restricted Shares (Million Shares) | 120 | 1,196 | | Shares Held for Restricted Share Incentive Scheme (RMB Million) | 1,954 | 1,954 | - The **share consolidation and capital reduction** resulted in the total number of shares held for the restricted share incentive scheme changing from **1,196,475,000 shares to 119,647,500 shares**[45](index=45&type=chunk) - As of June 30, 2025, all previously granted restricted shares were **cancelled in 2022**, and there are **no active restricted share incentive schemes**[43](index=43&type=chunk) [Leases](index=18&type=section&id=Leases) As of June 30, 2025, total right-of-use assets amounted to RMB 32,775 million, and total lease liabilities were RMB 23,545 million, with H1 depreciation of right-of-use assets at RMB 5,594 million, interest expense at RMB 566 million, and short-term and low-value lease expenses at RMB 604 million | Metric | June 30, 2025 (RMB Million) | December 31, 2024 (RMB Million) | | :--- | :--- | :--- | | Right-of-Use Assets | 32,775 | 32,247 | | Lease Liabilities (Current) | 6,931 | 7,378 | | Lease Liabilities (Non-Current) | 16,614 | 15,555 | | **Total Lease Liabilities** | **23,545** | **22,933** | | Lease-Related Expenses (H1 2025) | Amount (RMB Million) | | :--- | :--- | | Depreciation Expense of Right-of-Use Assets | 5,594 | | Interest Expense | 566 | | Short-Term and Low-Value Lease Expenses | 604 | [Non-Adjusting Post-Reporting Period Events](index=19&type=section&id=Non-Adjusting%20Post-Reporting%20Period%20Events) The Board declared an interim dividend after the reporting period, details of which are disclosed in Note 7 - The Board declared an **interim dividend after the reporting period**, which is a **non-adjusting post-reporting period event**[50](index=50&type=chunk) [Financial Overview](index=20&type=section&id=Financial%20Overview) This section details the company's H1 2025 financial performance, including operating revenue growth drivers, expense composition and changes, financing cost management, profitability improvements, capital expenditure and cash flow specifics, and a summary of the asset and liability position [Operating Revenue](index=20&type=section&id=Operating%20Revenue) Operating revenue for H1 2025 reached RMB 49.601 billion, a 2.8% year-on-year increase, with operator business revenue up 0.8%, Smart Tower business up 18.7%, and energy business up 9.2%, leading to a continuously optimized revenue structure with non-tower business revenue share rising from 21.3% to 23.8% | Business Type | H1 2025 (RMB Billion) | YoY Growth (%) | | :--- | :--- | :--- | | Operating Revenue | 49.601 | 2.8% | | Telecommunication Operators Business Revenue | 42.461 | 0.8% | | Smart Tower Business Revenue | 4.726 | 18.7% | | Energy Business Revenue | 2.209 | 9.2% | | Non-Tower Business Revenue Share | 23.8% | Up 1.6 percentage points YoY | [Operating Expenses](index=20&type=section&id=Operating%20Expenses) Total operating costs for H1 2025 amounted to RMB 40.972 billion, a 2.2% year-on-year increase, representing 82.6% of operating revenue, a 0.5 percentage point decrease, as the company effectively managed expenses through cost benchmarking and lean operations, with maintenance and site operation/support fees declining | Metric | H1 2025 (RMB Billion) | YoY Growth (%) | | :--- | :--- | :--- | | Operating Costs | 40.972 | 2.2% | | Operating Costs as % of Operating Revenue | 82.6% | Down 0.5 percentage points | [Depreciation and Amortization](index=20&type=section&id=Depreciation%20and%20Amortization) Depreciation and amortization totaled RMB 25.598 billion in H1, a 2.8% year-on-year increase, primarily due to increased depreciation from assets formed by past investments as the company actively met new construction demands - **Depreciation and amortization totaled RMB 25.598 billion**, a **2.8% year-on-year increase**[52](index=52&type=chunk) [Maintenance Expenses](index=20&type=section&id=Maintenance%20Expenses) Maintenance expenses totaled RMB 3.187 billion in H1, a 6.2% year-on-year decrease, reducing its share of operating revenue by 0.6 percentage points, primarily due to improved equipment quality and enhanced cost control through market-oriented outsourcing tenders - **Maintenance expenses totaled RMB 3.187 billion**, a **6.2% year-on-year decrease**[53](index=53&type=chunk) [Staff Costs](index=21&type=section&id=Staff%20Costs) Staff costs totaled RMB 4.767 billion in H1, an increase of RMB 0.392 billion year-on-year, primarily due to the company's push for R&D innovation and regional reforms, moderate recruitment of mid-to-high-end tech talent and frontline personnel, and strengthened performance-oriented incentives - **Staff costs totaled RMB 4.767 billion**, an **increase of RMB 0.392 billion year-on-year**[54](index=54&type=chunk) [Site Operation and Support Fees](index=21&type=section&id=Site%20Operation%20and%20Support%20Fees) Site operation and support fees totaled RMB 2.535 billion in H1, a year-on-year decrease of RMB 0.367 billion, as the company effectively reduced operating expenses through precise rectification of external power, enhanced battery backup capabilities, and reasonable control over site rental renewal increases - **Site operation and support fees totaled RMB 2.535 billion**, a **year-on-year decrease of RMB 0.367 billion**[55](index=55&type=chunk) [Other Operating Expenses](index=21&type=section&id=Other%20Operating%20Expenses) Other operating expenses totaled RMB 4.885 billion in H1, a year-on-year increase of RMB 0.357 billion, primarily driven by a RMB 0.281 billion increase in business expansion costs, including technical support service fees for the Two Wings Business - **Other operating expenses totaled RMB 4.885 billion**, a **year-on-year increase of RMB 0.357 billion**[56](index=56&type=chunk) [Financing Costs](index=21&type=section&id=Financing%20Costs) The company's net finance costs for H1 were RMB 1.236 billion, remaining flat year-on-year, reflecting a prudent financing strategy, strengthened centralized cash management, and maintenance of a reasonable interest-bearing debt scale with low financing costs - The company's **net finance costs for H1 were RMB 1.236 billion**, remaining **flat year-on-year**[57](index=57&type=chunk) [Profitability](index=21&type=section&id=Profitability) In H1, the company achieved an operating profit of RMB 8.629 billion, with profit attributable to equity holders of the Company at RMB 5.757 billion, an 8.0% year-on-year increase, and EBITDA reaching RMB 34.227 billion, up 3.6%, with an EBITDA margin of 69.0%, a 0.5 percentage point improvement | Metric | H1 2025 (RMB Billion) | YoY Growth (%) | | :--- | :--- | :--- | | Operating Profit | 8.629 | - | | Profit Attributable to Equity Holders of the Company | 5.757 | 8.0% | | EBITDA | 34.227 | 3.6% | | EBITDA as % of Operating Revenue | 69.0% | Up 0.5 percentage points | [Capital Expenditure and Cash Flow](index=22&type=section&id=Capital%20Expenditure%20and%20Cash%20Flow) H1 capital expenditure was RMB 12.392 billion, a year-on-year decrease of RMB 1.337 billion, with reductions in new site construction and shared renovation, and site upgrade/reconstruction, offset by increases in Two Wings Business and IT/R&D capital expenditure, while net cash flow from operating activities was RMB 28.679 billion and free cash flow was RMB 16.287 billion | Capital Expenditure Category | H1 2025 (RMB Billion) | YoY Change (RMB Billion) | | :--- | :--- | :--- | | Total Capital Expenditure | 12.392 | Decreased by 1.337 | | New Site Construction and Shared Renovation | 6.60 | Decreased by 1.435 | | Site Upgrade and Reconstruction | 2.377 | Decreased by 0.829 | | Two Wings Business | 2.475 | Increased by 0.595 | | IT Support and R&D | 0.940 | Increased by 0.332 | | Net Cash Flow from Operating Activities | 28.679 | Decreased by 4.151 | | Free Cash Flow | 16.287 | Decreased by 2.814 | [Assets and Liabilities](index=22&type=section&id=Assets%20and%20Liabilities) As of June 30, 2025, total assets were RMB 331.127 billion, total liabilities RMB 130.774 billion, and net debt RMB 83.966 billion, with a debt-to-asset ratio of 39.5%, down 0.4 percentage points from the beginning of the year, maintaining a robust financial position | Metric (as of June 30, 2025) | Amount (RMB Billion) | | :--- | :--- | | Total Assets | 331.127 | | Total Liabilities | 130.774 | | Net Debt | 83.966 | | Debt-to-Asset Ratio | 39.5% (Down 0.4 percentage points from the beginning of the year) | [Other Information](index=22&type=section&id=Other%20Information) This section provides other important information for the reporting period, including listed securities transactions, audit committee review, compliance with corporate governance and standard codes, contingent liabilities and material legal proceedings, detailed interim dividend distribution and tax treatment, and share transfer registration suspension arrangements and report publication details [Transactions in Listed Securities](index=22&type=section&id=Transactions%20in%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 - Neither the company nor any of its subsidiaries **purchased, sold, or redeemed any of the company's listed securities**[61](index=61&type=chunk) [Audit Committee](index=22&type=section&id=Audit%20Committee) The Board's Audit Committee reviewed the company's adopted accounting standards and practices, discussed financial reporting matters, and specifically reviewed the unaudited interim financial report for the six months ended June 30, 2025 - The Audit Committee reviewed the company's **adopted accounting standards and practices** and the **interim financial report**[62](index=62&type=chunk) [Corporate Governance and Standard Code](index=23&type=section&id=Corporate%20Governance%20and%20Standard%20Code) The company is committed to maintaining high standards of corporate governance, complying with the Corporate Governance Code in Appendix C1 of the HKEX Listing Rules for H1 2025, with all Directors and Supervisors confirming adherence to the company's own securities dealing code and the Model Code - The company has consistently complied with the **Corporate Governance Code in Appendix C1 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited**[63](index=63&type=chunk) - All Directors and Supervisors confirmed compliance with the company's self-developed **"China Tower Corporation Limited Code for Securities Transactions by Directors, Supervisors and Relevant Employees"** and the **"Model Code for Securities Transactions by Directors of Listed Issuers"**[64](index=64&type=chunk) [Contingent Liabilities and Legal Proceedings](index=23&type=section&id=Contingent%20Liabilities%20and%20Legal%20Proceedings) As of June 30, 2025, the company had no contingent liabilities and was not involved in any material litigation or arbitration during the six-month period ended June 30, 2025 - As of June 30, 2025, the company had **no contingent liabilities**[65](index=65&type=chunk) - For the six months ended June 30, 2025, the company was **not involved in any material litigation or arbitration**[66](index=66&type=chunk) [Interim Dividend Distribution Arrangements](index=23&type=section&id=Interim%20Dividend%20Distribution%20Arrangements) The Board resolved to distribute a 2025 interim dividend of RMB 0.13250 per share (before tax), payable on October 31, 2025, to shareholders on record as of September 12, 2025, with dividends paid in RMB or HKD and applicable income taxes withheld based on shareholder type and tax agreements - The **2025 interim dividend is RMB 0.13250 per share (before tax)**, expected to be paid on **October 31, 2025**[67](index=67&type=chunk) - Dividends for **domestic shares and H-shares via Stock Connect** will be paid in **RMB**, while dividends for **H-shareholders other than Stock Connect shareholders** will be paid in **HKD**[68](index=68&type=chunk) - The company will **withhold 10% corporate income tax** for **non-resident enterprise H-shareholders** and **individual income tax** for **individual H-shareholders** based on their resident status and tax agreements[68](index=68&type=chunk)[69](index=69&type=chunk) - Dividends obtained by **mainland individual investors and securities investment funds via Stock Connect** will be subject to a **20% individual income tax withholding**, while **mainland enterprise investors** will declare and pay taxes themselves[71](index=71&type=chunk) [Suspension of H Share Register of Members](index=25&type=section&id=Suspension%20of%20H%20Share%20Register%20of%20Members) To determine H-shareholders' entitlement to the 2025 interim dividend, the company's H-share register of members will be suspended from September 9 to September 12, 2025 (both dates inclusive), with the record date set for September 12, 2025 | Item | Date/Time | | :--- | :--- | | Latest time for lodging transfer documents for registration | 2025 September 8, 4:30 p.m. | | Period of closure of H Share Register of Members | 2025 September 9 to 2025 September 12 | | Record Date | 2025 September 12 | [Publication of Report](index=26&type=section&id=Publication%20of%20Report) This announcement has been published on the company's website and the HKEX website, and the 2025 interim report will be published on both websites and provided to shareholders in due course - This announcement and the **2025 interim report** will be published on the **company's website (www.china-tower.com)** and the **HKEX website (www.hkexnews.hk)**[75](index=75&type=chunk) [Forward-Looking Statements and Board of Directors](index=26&type=section&id=Forward-Looking%20Statements%20and%20Board%20of%20Directors) Forward-looking statements in this announcement are based on current plans, estimates, and forecasts, with actual results potentially differing, and the company undertakes no obligation to update or correct them, while the announcement concludes with the Board of Directors list, acknowledging resigned directors and welcoming new ones - Forward-looking statements in this announcement involve **risks and uncertainties**, and **actual results may differ materially from expectations**[76](index=76&type=chunk) - The Board of Directors includes **Executive Directors Zhang Zhiyong (Chairman) and Chen Li (General Manager)**, **Non-executive Directors Cheng Jianjun, Miao Shouye, Liu Guiqing, and Fang Xiaobing**, and **Independent Non-executive Directors Pei Zhenjiang, Hu Zhanghong, Zhang Wei, and Wen Bugao**[76](index=76&type=chunk)

[Supplemental Announcement and Change in Use of Proceeds](index=1&type=section&id=Supplemental%20Announcement%20and%20Change%20in%20Use%20of%20Proceeds) This section outlines the updated use of placement proceeds and the reallocation of unutilized funds [Update on Use of Proceeds from Placement](index=1&type=section&id=Update%20on%20Use%20of%20Proceeds%20from%20Placement) The company details the utilization of HKD 3.31 billion net proceeds from the placement, with HKD 249 million unutilized as of December 31, 2024 - The net proceeds from the placement (after deducting related expenses and fees) totaled approximately **HKD 3.31 billion**[4](index=4&type=chunk) Details of Proceeds Utilization as of December 31, 2024 | Purpose | Net Proceeds Allocated (Thousand HKD) | Net Proceeds Utilized as of December 31, 2024 (Thousand HKD) | Unutilized Net Proceeds Balance (Thousand HKD) | | :--- | :--- | :--- | :--- | | Increasing PVDF and Raw Material Production Capacity | 2,000,000 | 1,895,760 | 104,240 | | Increasing PTFE and Raw Material Production Capacity | 800,000 | 655,520 | 144,480 | | Supplementing General Working Capital | 510,000 | 510,000 | 0 | | **Total** | **3,310,000** | **3,061,280** | **248,720** | [Change in Use of Unutilized Proceeds](index=2&type=section&id=Change%20in%20Use%20of%20Proceeds) The Board reallocates HKD 192 million of unutilized proceeds to high-end PTFE, green transformation, and new refrigerant projects - Reason for change: Severe supply-demand imbalance in the PVDF and PTFE product markets led to changes in product unit prices and lower-than-expected prior investment returns[6](index=6&type=chunk) - As of the announcement date, the unutilized net proceeds amounted to approximately **HKD 191.9 million**, and the Board has resolved to change their use[6](index=6&type=chunk) New Allocation Plan for Unutilized Net Proceeds | New Purpose | Allocated Amount (Thousand HKD) | Proposed Utilization Timeline | | :--- | :--- | :--- | | PTFE Ultra-High Purity Quality Improvement (High-End PTFE) | 89,558 | December 2026 | | Green and Intelligent Transformation of Tetrafluoroethylene Production Line | 68,234 | December 2026 | | Pilot Project for Tetrafluoropropylene (New Refrigerant) Production | 34,117 | December 2025 | | **Total** | **191,909** | — | - The Board believes that changing the use allows the company to more effectively allocate financial resources, enhancing the Group's operating performance in the long term and aligning with the overall interests of the Group and its shareholders[7](index=7&type=chunk)

和譽開曼有限責任公司（「本公司」）董事會（「董事會」）欣然宣佈本公司及其附屬 公司（「本集團」或「我們」）截至2025年6月30日止六個月（「報告期」）的未經審核 簡明綜合中期業績連同2024年相應期間的比較數字。 業務亮點 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所產生或因依 賴該等內容而引致的任何損失承擔任何責任。 Abbisko Cayman Limited 和譽開曼有限責任公司 （於開曼群島註冊成立的有限公司） （股份代號：2256） 截至2025年6月30日止六個月的中期業績公告 2025年年初至今，我們在諸多方面取得重大進展： 我們領先資產CSF-1R抑制劑匹米替尼 (ABSK021)的重要里程碑 治療腱鞘巨細胞瘤（「TGCT」）的NDA申請獲中華人民共和國國家藥品監督管理局 （「中國NMPA」）受理 1 • 於2025年6月，中國NMPA正式受理用於治療TGCT的匹米替尼的NDA。本 次NDA申請是基於全球III期MANEUVER研究第一部分的研究結果。在該 研究中，經盲法獨立評審委 ...