[Definitions](index=3&type=section&id=Definitions) This chapter defines key terms and abbreviations used in the report, ensuring clear understanding of the content - This section defines key terms and abbreviations used in the report, covering company entities, financial terms, regulatory bodies, and geographical references for clear understanding[4](index=4&type=chunk)[5](index=5&type=chunk) [Company Information](index=5&type=section&id=Company%20Information) This chapter details the company's board members, committee changes, auditor, and stock code - The company's board of directors includes executive directors Mr. Lu Bo (Chairman and CEO), Ms. Lu Xiaojing, Ms. Bai Wei, Mr. Shao Song, Ms. Wu Rui, and independent non-executive directors Mr. Bao Xiaofeng, Mr. Shen Cheng, Mr. Jiang Li (appointed on May 19, 2025), and Mr. Tu Shenwei (resigned on May 19, 2025)[6](index=6&type=chunk) - Changes occurred in the company's Audit, Remuneration, and Nomination Committees, with **Mr. Jiang Li appointed Chairman of the Audit and Remuneration Committees on May 19, 2025**, and **Mr. Shen Cheng appointed Chairman of the Nomination Committee on June 30, 2025**[6](index=6&type=chunk) - The company's auditor is Zhonghui Anda Certified Public Accountants Limited, and its stock code is **1334**[6](index=6&type=chunk)[8](index=8&type=chunk) [Key Financial Highlights](index=7&type=section&id=Key%20Financial%20Highlights) This chapter summarizes the company's key financial performance for H1 2025, noting a shift from profit to net loss Key Financial Highlights for the Six Months Ended June 30 (RMB thousands) | Indicator | 2025 (Unaudited) | 2024 (Unaudited) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Revenue | 151,799 | 224,894 | -32.5% | | Gross Profit | 39,910 | 75,254 | -47.0% | | Gross Margin | 26.3% | 33.5% | -7.2 ppts | | (Net Loss)/Profit | (38,060) | 11,525 | Shift from profit to loss | | Basic and Diluted (Loss)/Earnings Per Share (RMB cents) | (7.59) | 3.07 | Shift from profit to loss | - The company shifted from profit to **net loss in the first half of 2025**, primarily due to a significant decline in revenue and gross profit[10](index=10&type=chunk) [Management Discussion and Analysis](index=8&type=section&id=Management%20Discussion%20and%20Analysis) This chapter reviews the company's operational performance, strategies, and financial results [Operating Review](index=8&type=section&id=Operating%20Review) This section reviews H1 2025 economic impacts on the petrochemical industry and details the company's strategic responses and operational focus - Global economic growth expectations diverged in the first half of 2025, with the IMF forecasting a **slowdown in global GDP growth to 3.3%**, constraining downstream demand in the petrochemical industry[11](index=11&type=chunk) - International crude oil prices generally showed a volatile and weak trend, with geopolitical events (e.g., Israel-Iran conflict) and OPEC+ production policies significantly impacting market sentiment, causing **WTI crude spot prices to fall to $65.11/barrel by June 30, 2025**[11](index=11&type=chunk) - The Chinese market promoted "anti-involution" policies, encouraging the elimination of outdated capacity, with new investments in the petrochemical industry focusing on **high-end chemical new materials (18% growth in H1)**, green and low-carbon transformation, and refining-chemical integration to address industry changes[12](index=12&type=chunk)[13](index=13&type=chunk)[14](index=14&type=chunk) - The company actively responded to challenges, with key focuses in H1 including: aligning with the "dual carbon" strategy, increasing R&D in green energy technologies like biomass gasifiers, with parts of the new smart factory operational by July 2025; securing exclusive after-sales business authorization from Honeywell UOP's Callidus in China; establishing a Dubai subsidiary to expand into the Middle East and North Africa markets and joining ADNOC's supplier list; and fully commencing the "phosphorus-containing waste recycling" project to create a green benchmark[16](index=16&type=chunk)[17](index=17&type=chunk)[18](index=18&type=chunk)[19](index=19&type=chunk) - In the first half of 2025, the Group achieved **revenue of approximately RMB 151.8 million**, **gross profit of approximately RMB 39.9 million**, and a **loss attributable to owners of the parent company of approximately RMB 38.1 million**, primarily due to strategic investments in green technology R&D, Middle East market expansion, and circular economy projects[20](index=20&type=chunk) [Company Development Strategies](index=11&type=section&id=Company%20Development%20Strategies) The company's strategy focuses on enhancing R&D, deepening client services, accelerating green transition, global market penetration, and investing in phosphorus resource recovery for sustainable growth - The company will **increase R&D investment**, strategically focusing on deepening and breaking through its core businesses, enhancing product and service competitiveness through cutting-edge technological innovation, and promoting the commercialization of R&D achievements[21](index=21&type=chunk) - Leveraging the after-sales business authorization with Callidus, the company will **optimize domestic operational efficiency and costs**, provide efficient and high-quality after-sales services to existing customers, and explore energy-saving and consumption-reducing demands[22](index=22&type=chunk) - The company will continue to provide environmentally friendly and efficient energy solutions, deeply explore customer demands for energy saving and consumption reduction, and **strengthen the market promotion of green energy technologies like biomass gasifiers**[23](index=23&type=chunk) - Regarding overseas markets, the company will **focus on key regions where it has entered and has project experience (e.g., Middle East and North Africa)**, flexibly adjust business strategies, formulate differentiated market strategies, and drive overseas business growth[24](index=24&type=chunk) - The company is fully committed to making the **Huangshan phosphorus-containing waste recycling project an industry benchmark**, with Phase I expected to be completed and trial-operated by December 2025, and plans to strategically invest in similar projects in other key regions[25](index=25&type=chunk) [Financial Overview](index=12&type=section&id=Financial%20Overview) This section analyzes the company's H1 2025 financial performance, explaining revenue decline, margin contraction, and the shift to loss - The Group's revenue **decreased by 32.5% from RMB 224.9 million in H1 2024 to RMB 151.8 million in H1 2025**[26](index=26&type=chunk) Revenue Breakdown (RMB thousands) | Product Category | 2025 | Proportion | 2024 | Proportion | Year-on-Year Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Sulfur Recovery and VOC Incineration Equipment | 39,621 | 26.1% | 73,112 | 32.5% | -45.8% | | Catalytic Cracking Equipment | 53,079 | 35.0% | 132,673 | 59.0% | -60.0% | | Process Burners | 37,580 | 24.7% | 16,552 | 7.4% | +126.5% | | Heat Exchangers | 21,519 | 14.2% | 2,557 | 1.1% | +726.9% | | **Total** | **151,799** | **100.0%** | **224,894** | **100.0%** | **-32.5%** | - Gross profit **decreased by 47.0% from RMB 75.3 million in H1 2024 to RMB 39.9 million in H1 2025**, with gross margin falling from **33.5% to 26.3%**, primarily due to intensified market competition and securing sales orders at lower prices[36](index=36&type=chunk) - Selling expenses, administrative expenses, and R&D expenses all increased, leading to a **shift from a net profit of RMB 11.5 million to a net loss of RMB 38.1 million** for the period[38](index=38&type=chunk)[39](index=39&type=chunk)[40](index=40&type=chunk)[43](index=43&type=chunk) - As of June 30, 2025, cash and cash equivalents were **RMB 92.7 million** (December 31, 2024: RMB 129.9 million), total bank and other borrowings increased to **RMB 189.7 million** (December 31, 2024: RMB 105.2 million), and the **gearing ratio rose to 57.0%** (December 31, 2024: 29.4%)[45](index=45&type=chunk)[46](index=46&type=chunk)[48](index=48&type=chunk) [Significant Acquisitions and Disposals](index=16&type=section&id=Significant%20Acquisitions%20and%20Disposals) This section discloses the establishment of Huangshan Zhonglin Technology Co., Ltd., a new subsidiary focused on phosphorus pollution control and waste recycling - The Group established a new subsidiary, **Huangshan Zhonglin Technology Co., Ltd., on March 4, 2025**, with a registered capital of **RMB 45 million**, and the company indirectly holds an **80% stake**[53](index=53&type=chunk) - Huangshan Zhonglin primarily engages in phosphorus pollution control deployment, phosphorus-containing waste treatment technology, and related waste product recycling to produce concentrated nutrient solutions[53](index=53&type=chunk) [Use of Net Proceeds](index=23&type=section&id=Use%20of%20Net%20Proceeds) This section updates the utilization of net proceeds from the company's July 2024 listing, allocated to capacity, R&D, and working capital - The company was listed on July 10, 2024, with **net proceeds of approximately HKD 60.6 million (approximately RMB 55.6 million)**[84](index=84&type=chunk) Intended Use and Application of Net Proceeds (RMB millions) | Intended Use | Approximate Percentage of Net Proceeds | Net Proceeds Utilized During the Reporting Period | Net Proceeds Unutilized as of June 30, 2025 | Expected Timeline for Full Utilization of Unutilized Net Proceeds | | :--- | :--- | :--- | :--- | :--- | | Increase capacity and capabilities of new production facilities | 73.0% | 8.5 | 25.9 | On or before June 30, 2026 | | Further enhance design and R&D capabilities | 17.5% | 3.0 | 3.7 | On or before December 31, 2025 | | General working capital | 9.5% | 1.7 | 1.8 | On or before June 30, 2026 | | **Total** | **100.0%** | **13.2** | **31.4** | | - The company has no plans to deviate from the use of proceeds and business strategies disclosed in the prospectus[84](index=84&type=chunk) [Corporate Governance and Other Information](index=17&type=section&id=Corporate%20Governance%20and%20Other%20Information) This chapter covers the company's corporate governance practices, including directors' and major shareholders' interests, share incentive schemes, and compliance [Directors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares, and Debentures of the Company or its Associated Corporations](index=17&type=section&id=Directors'%20and%20Chief%20Executive's%20Interests%20and%20Short%20Positions%20in%20Shares,%20Underlying%20Shares,%20and%20Debentures%20of%20the%20Company%20or%20its%20Associated%20Corporations) This section discloses directors' and chief executive's interests and short positions in shares and associated corporations as of June 30, 2025 Directors'/Chief Executive's Interests in the Company's Shares (As of June 30, 2025) | Name of Director/Chief Executive | Capacity/Nature of Interest | Number of Shares Held | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Mr. Lu Bo | Beneficiary of a trust | 164,171,263 | 32.83% | | | Interest in controlled corporation | 5,598,240 | 1.12% | | Ms. Lu Xiaojing | Beneficiary of a trust | 164,171,263 | 32.83% | | | Interest in controlled corporation | 5,598,240 | 1.12% | | Ms. Bai Wei (Spouse of Mr. Lu Bo) | Interest of spouse | 169,769,503 | 33.95% | | Mr. Shao Song (Spouse of Ms. Lu Xiaojing) | Interest of spouse | 169,769,503 | 33.95% | - All listed interests are long positions, calculated based on the **total issued shares of 500,000,000 as of June 30, 2025**[62](index=62&type=chunk) [Substantial Shareholders' Interests and Short Positions in Shares and Underlying Shares](index=18&type=section&id=Substantial%20Shareholders'%20Interests%20and%20Short%20Positions%20in%20Shares%20and%20Underlying%20Shares) This section lists substantial shareholders' interests and short positions in the company's shares and underlying shares as of June 30, 2025 Substantial Shareholders' Interests in the Company's Shares (As of June 30, 2025) | Name of Shareholder | Capacity/Nature of Interest | Number of Shares Held | Approximate Percentage of Shareholding in the Company | | :--- | :--- | :--- | :--- | | One Ideal Limited | Beneficial interest | 164,171,263 | 32.83% | | Now Wealth Limited | Beneficial interest | 164,171,263 | 32.83% | | Lady Jing Limited | Beneficial interest | 164,171,263 | 32.83% | | LXJ Limited | Beneficial interest | 164,171,263 | 32.83% | | TCT (BVI) Limited | Beneficial interest | 328,342,526 | 65.66% | | THE CORE TRUST COMPANY LIMITED | Trustee | 328,342,526 | 65.66% | | Huangshan Jiantou Private Equity Fund Management Co., Ltd. | Beneficial interest | 28,570,000 | 5.71% | - The interests of TCT (BVI) Limited and THE CORE TRUST COMPANY LIMITED represent the **aggregate shareholdings of individual trusts established by Mr. Lu Bo and Ms. Lu Xiaojing**, respectively[64](index=64&type=chunk) [Share Incentive Scheme](index=19&type=section&id=Share%20Incentive%20Scheme) This section outlines the post-IPO share option scheme adopted on June 24, 2024, detailing maximum shares, participant limits, and vesting period - The company adopted a **post-IPO share option scheme on June 24, 2024**, aiming to provide eligible participants with opportunities to acquire ownership interests in the company and encourage them to enhance the company and share price[67](index=67&type=chunk)[68](index=68&type=chunk) - Under the scheme, the **maximum number of share options that can be granted is 50,000,000**, representing **10% of the issued shares as of June 30, 2025**[67](index=67&type=chunk)[69](index=69&type=chunk) - The vesting period for share options is generally **not less than 12 months**, and the subscription price shall not be less than the highest of the closing price on the grant date, the average closing price for the five business days immediately preceding the grant date, and the nominal value of the shares[70](index=70&type=chunk)[71](index=71&type=chunk) - No share options were granted, nor were any new shares issued for the grant of share options and awards during the reporting period and up to the date of this interim report[73](index=73&type=chunk) [Compliance with Corporate Governance Code](index=21&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) This section states the company's compliance with the Corporate Governance Code, noting one deviation where Chairman and CEO roles are combined - The company has adopted the principles and code provisions of the Corporate Governance Code as the basis for its corporate governance practices and has **complied with all applicable code provisions** during the reporting period and up to the date of this interim report[75](index=75&type=chunk)[76](index=76&type=chunk) - There is one deviation from Code Provision C.2.1 of the Corporate Governance Code, where the roles of **Chairman and Chief Executive Officer are combined and held by Mr. Lu Bo**[76](index=76&type=chunk) - The Board believes that, given Mr. Lu Bo's experience and understanding of the business, this arrangement facilitates the effective execution of strategic initiatives and information flow, and all significant decisions are made after consulting Board members, ensuring that the balance of power is not undermined[76](index=76&type=chunk) [Audit Committee and Review of Interim Results](index=22&type=section&id=Audit%20Committee%20and%20Review%20of%20Interim%20Results) This section details the Audit Committee's composition and its review of the unaudited interim financial information, noting no independent auditor review - The Audit Committee comprises **three independent non-executive directors**: Mr. Jiang Li (Chairman), Mr. Bao Xiaofeng, and Mr. Shen Cheng[80](index=80&type=chunk) - The Audit Committee has discussed and reviewed the Group's **unaudited condensed consolidated financial information** for the reporting period, concluding that the interim results comply with applicable accounting standards, laws, and regulations, and are appropriately disclosed[80](index=80&type=chunk) - The interim results have **not been reviewed by the company's independent auditor**[80](index=80&type=chunk) [Events After the Reporting Period](index=23&type=section&id=Events%20After%20the%20Reporting%20Period) This section discloses the resignation of Mr. Fu Cong as CFO and Joint Company Secretary on July 31, 2025, with no other significant subsequent events - **Mr. Fu Cong resigned as the company's Chief Financial Officer and Joint Company Secretary on July 31, 2025**[81](index=81&type=chunk) - Save for the aforementioned, no other significant subsequent events occurred after the reporting period up to the date of this interim report[82](index=82&type=chunk) [Changes in Board and Directors' Information](index=24&type=section&id=Changes%20in%20Board%20and%20Directors'%20Information) This section reports changes in the Board of Directors, including director resignations, appointments, and Nomination Committee changes - **Independent non-executive director Mr. Tu Shenwei resigned on May 19, 2025**, and **Mr. Jiang Li was appointed independent non-executive director, Chairman of the Audit Committee, Chairman of the Remuneration Committee, and member of the Nomination Committee on the same day**[87](index=87&type=chunk) - The **Chairman of the Nomination Committee changed from Mr. Lu Bo to Mr. Shen Cheng**, and **Ms. Lu Xiaojing was appointed a member of the Nomination Committee**, both effective from June 30, 2025[88](index=88&type=chunk) [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=24&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) This chapter presents the condensed consolidated statement of profit or loss and other comprehensive income for H1 2025 Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (RMB thousands) | Indicator | 2025 (Unaudited) | 2024 (Unaudited) | | :--- | :--- | :--- | | Revenue | 151,799 | 224,894 | | Cost of sales | (111,889) | (149,640) | | Gross profit | 39,910 | 75,254 | | Other income and gains, net | 1,548 | 3,191 | | Selling expenses | (14,948) | (14,427) | | Administrative expenses | (35,408) | (21,448) | | Research and development expenses | (22,473) | (14,723) | | (Loss)/Profit before tax | (37,861) | 15,515 | | Income tax expense | (199) | (3,990) | | (Loss)/Profit for the period | (38,060) | 11,525 | | (Loss)/Profit for the period attributable to owners of the Company | (37,967) | 11,525 | | Basic and diluted (loss)/earnings per share (RMB cents) | (7.59) | 3.07 | - The company shifted from profit to **net loss in the first half of 2025**, primarily due to a significant decline in revenue and gross profit, coupled with increased selling, administrative, and R&D expenses[93](index=93&type=chunk) [Condensed Consolidated Statement of Financial Position](index=25&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) This chapter presents the condensed consolidated statement of financial position, providing a snapshot of assets, liabilities, and equity as of June 30, 2025 Condensed Consolidated Statement of Financial Position (RMB thousands) | Indicator | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Non-current assets | 166,295 | 141,280 | | Current assets | 612,050 | 585,670 | | Current liabilities | 343,727 | 331,200 | | Net current assets | 268,323 | 254,470 | | Non-current liabilities | 86,696 | 7,404 | | Net assets | 347,922 | 388,346 | | Total equity | 347,922 | 388,346 | - **Non-current liabilities significantly increased**, primarily due to new non-current bank and other borrowings, leading to higher total liabilities and reduced total equity[95](index=95&type=chunk) - The increase in **property, plant and equipment and right-of-use assets** was the primary reason for the growth in non-current assets[94](index=94&type=chunk) [Condensed Consolidated Statement of Changes in Equity](index=27&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) This chapter presents the condensed consolidated statement of changes in equity, illustrating movements in equity attributable to owners for H1 2025 - For the six months ended June 30, 2025, equity attributable to owners of the company **decreased from RMB 388,046 thousand at the beginning of the period to RMB 330,085 thousand at the end of the period**[96](index=96&type=chunk) - The primary reasons for the equity decrease were a **loss for the period of RMB 37,967 thousand** and **dividends declared and paid of RMB 20,000 thousand**, partially offset by **contributions from non-controlling shareholders of RMB 17,630 thousand**[96](index=96&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=28&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) This chapter presents the condensed consolidated statement of cash flows, detailing cash flows from operating, investing, and financing activities for H1 2025 Condensed Consolidated Statement of Cash Flows (RMB thousands) | Cash Flow Category | 2025 (Unaudited) | 2024 (Unaudited) | | :--- | :--- | :--- | | Net cash used in operating activities | (96,685) | (11,257) | | Net cash used in investing activities | (16,740) | (2,974) | | Net cash from/(used in) financing activities | 76,383 | (9,752) | | Net decrease in cash and cash equivalents | (37,042) | (23,983) | | Cash and bank balances at end of period | 92,732 | 21,670 | - **Cash outflow from operating activities significantly increased**, cash outflow from investing activities also rose, but financing activities turned into a **net inflow due to new bank borrowings**[97](index=97&type=chunk) - Cash and bank balances at the end of the period were **RMB 92,732 thousand**, a decrease from the beginning of the period[97](index=97&type=chunk) [Notes to the Condensed Consolidated Financial Statements](index=29&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) This chapter provides detailed explanatory notes to the condensed consolidated financial statements, covering general information, basis of preparation, and specific financial line items [General Information](index=29&type=section&id=General%20Information) This section states that Ruichang International Holding Limited is an investment holding company engaged in manufacturing and selling petroleum refining and petrochemical equipment - The company is an investment holding company incorporated in the Cayman Islands, primarily engaged in the **manufacturing and sale of petroleum refining and petrochemical equipment**[98](index=98&type=chunk) - The company's shares have been **listed on the Main Board of The Stock Exchange of Hong Kong Limited since July 10, 2024**[98](index=98&type=chunk) [Basis of Preparation](index=29&type=section&id=Basis%20of%20Preparation) This section explains that the unaudited condensed consolidated financial statements are prepared in accordance with HKAS 34 and HKEX Listing Rules - The unaudited condensed consolidated financial statements are prepared in accordance with **Hong Kong Accounting Standard 34 "Interim Financial Reporting"** and the requirements of the Listing Rules[99](index=99&type=chunk) - The accounting policies and methods of computation used are **consistent with those adopted in the annual financial statements for the year ended December 31, 2024**[99](index=99&type=chunk) [Adoption of New and Revised Hong Kong Financial Reporting Standards](index=30&type=section&id=Adoption%20of%20New%20and%20Revised%20Hong%20Kong%20Financial%20Reporting%20Standards) This section notes the Group's adoption of all new and revised HKFRSs effective January 1, 2025, with no significant changes to accounting policies - The Group has **adopted all new and revised Hong Kong Financial Reporting Standards** effective for accounting periods beginning on January 1, 2025[100](index=100&type=chunk) - The adoption of these new and revised Hong Kong Financial Reporting Standards has **not resulted in any significant changes to the Group's accounting policies** or the amounts reported for the current and prior periods in the consolidated financial statements[100](index=100&type=chunk) [Fair Value Measurement](index=30&type=section&id=Fair%20Value%20Measurement) This section details the Group's fair value measurements using a three-level hierarchy for financial assets - Fair value measurements utilize a **three-level fair value hierarchy**, comprising Level 1 (quoted prices in active markets), Level 2 (observable inputs), and Level 3 (unobservable inputs)[101](index=101&type=chunk)[102](index=102&type=chunk)[103](index=103&type=chunk) Fair Value Hierarchy Disclosure (As of June 30, 2025, RMB thousands) | Description | Level 1 | Level 2 | Level 3 | Total | | :--- | :--- | :--- | :--- | :--- | | Financial assets at fair value through profit or loss — Funds | – | 9,262 | – | 9,262 | | Financial assets at fair value through other comprehensive income — Unlisted equity investments | – | – | 18,594 | 18,594 | - The valuation technique for unlisted equity investments is the **proportionate share of net assets**; if the net assets of the relevant investment increase/decrease by 5%, their carrying amount would increase/decrease by **RMB 930 thousand**, respectively[111](index=111&type=chunk) [Revenue](index=33&type=section&id=Revenue) This section provides a breakdown of the Group's revenue for two interim periods, primarily from equipment manufacturing and sales Revenue from Contracts with Customers (RMB thousands) | Product Category | 2025 (Unaudited) | 2024 (Unaudited) | | :--- | :--- | :--- | | Sulfur Recovery and VOC Incineration Equipment | 39,621 | 73,112 | | Catalytic Cracking Equipment | 53,079 | 132,673 | | Process Burners | 37,580 | 16,552 | | Heat Exchangers | 21,519 | 2,557 | | **Total** | **151,799** | **224,894** | - Revenue recognized from contract liabilities at the beginning of the period was **RMB 7,990 thousand in H1 2025**, compared to **RMB 59,191 thousand in H1 2024**[112](index=112&type=chunk) - Performance obligations are satisfied upon customer acceptance of the relevant products, with payments generally due within **30 to 90 days after delivery**[113](index=113&type=chunk) [Segment Information](index=34&type=section&id=Segment%20Information) This section states that the Group primarily manufactures and sells petroleum refining and petrochemical equipment to mainland China customers - The Group is primarily engaged in the **manufacturing and sale of petroleum refining and petrochemical equipment to customers in mainland China**, and no financial information for separate operating segments is presented[114](index=114&type=chunk) - As substantially all revenue is derived from mainland China and all non-current assets are located in mainland China, **no geographical information is presented**[115](index=115&type=chunk) [Other Income and Gains, Net](index=34&type=section&id=Other%20Income%20and%20Gains,%20Net) This section presents the Group's other income and gains, net, which decreased primarily due to reduced government grants Other Income and Gains, Net (RMB thousands) | Item | 2025 (Unaudited) | 2024 (Unaudited) | | :--- | :--- | :--- | | Government grants | 445 | 2,716 | | Interest income | 668 | 132 | | Net rental income | – | 47 | | Others | 435 | 296 | | **Total** | **1,548** | **3,191** | - The **decrease in government grants** was the primary reason for the decline in other income and gains, net, with these grants mainly subsidizing high-tech enterprises[117](index=117&type=chunk) [Finance Costs](index=35&type=section&id=Finance%20Costs) This section discloses the Group's finance costs, which decreased mainly due to lower interest on bank and other borrowings Finance Costs (RMB thousands) | Item | 2025 (Unaudited) | 2024 (Unaudited) | | :--- | :--- | :--- | | Interest on bank and other borrowings | 2,297 | 2,748 | | Interest on lease liabilities | 175 | 88 | | **Total** | **2,472** | **2,836** | - The decrease in finance costs was primarily due to a **reduction in the Group's bank and other borrowings in H1 2025**[41](index=41&type=chunk) [Income Tax Expense](index=36&type=section&id=Income%20Tax%20Expense) This section details the Group's income tax expense, which significantly decreased due to reduced taxable income of Chinese subsidiaries Income Tax Expense (RMB thousands) | Item | 2025 (Unaudited) | 2024 (Unaudited) | | :--- | :--- | :--- | | Current income tax — Mainland China | 199 | 3,497 | | Withholding tax | – | 1,000 | | Deferred income tax | – | (507) | | **Total** | **199** | **3,990** | - The decrease in income tax expense was primarily due to a **reduction in the taxable income of Chinese subsidiaries**[42](index=42&type=chunk) - Luoyang Ruichang and Shanghai Ruicheer, as high-tech enterprises, are **eligible for a preferential corporate income tax rate of 15%**[123](index=123&type=chunk) - As of June 30, 2025, the Group had **accumulated tax losses in China of RMB 120,188 thousand**, but no deferred tax assets were recognized due to the unpredictability of future profit sources[125](index=125&type=chunk) [Loss / Profit for the Period](index=37&type=section&id=Loss%20/%20Profit%20for%20the%20Period) This section lists the key items impacting the Group's loss or profit for the period, reflecting their influence on overall profitability Key Items Affecting (Loss)/Profit for the Period (RMB thousands) | Item | 2025 (Unaudited) | 2024 (Unaudited) | | :--- | :--- | :--- | | Cost of inventories sold | 103,721 | 146,668 | | Depreciation of property, plant and equipment | 3,529 | 3,154 | | Depreciation of right-of-use assets | 1,532 | 2,158 | | Amortisation of intangible assets | 400 | 208 | | Research and development costs | 22,473 | 14,723 | | Impairment losses on financial assets and contract assets | 3,993 | 1,969 | | Total staff costs (including directors' emoluments) | 38,905 | 31,118 | - Total staff costs (including directors' emoluments) **increased from RMB 31,118 thousand in H1 2024 to RMB 38,905 thousand in H1 2025**[126](index=126&type=chunk) [Loss / Earnings Per Share](index=38&type=section&id=Loss%20/%20Earnings%20Per%20Share) This section calculates the basic (loss)/earnings per share attributable to owners, with no diluted (loss)/earnings per share presented Loss / Earnings Per Share (RMB thousands) | Indicator | 2025 (Unaudited) | 2024 (Unaudited) | | :--- | :--- | :--- | | (Loss)/Profit for the period attributable to owners of the Company for the purpose of calculating basic (loss)/earnings per share | (37,967) | 11,525 | | Number of ordinary shares for the purpose of calculating basic (loss)/earnings per share | 500,000,000 | 375,000,000 | | Basic and diluted (loss)/earnings per share (RMB cents) | (7.59) | 3.07 | - No diluted (loss)/earnings per share is presented for the six months ended June 30, 2025 and 2024, as there were **no outstanding potential ordinary shares**[127](index=127&type=chunk) [Dividends](index=38&type=section&id=Dividends) This section reports the final dividend declared and paid for 2024, with no interim dividend recommended for the current reporting period - During the interim period, a **final dividend of RMB 0.04 per share**, totaling **RMB 20,000 thousand**, was declared to owners of the company for the year ended December 31, 2024[128](index=128&type=chunk) - The directors of the company **do not recommend the payment of any interim dividend** for the reporting period[129](index=129&type=chunk) [Movements in Property and Equipment](index=39&type=section&id=Movements%20in%20Property%20and%20Equipment) This section discloses the Group's acquisition of property and equipment and a transfer from investment properties - The Group acquired **property and equipment of RMB 15,243 thousand in H1 2025**, a significant increase compared to RMB 2,719 thousand in H1 2024[130](index=130&type=chunk) - During the interim period, **RMB 4,098 thousand of property and equipment was transferred from investment properties**[130](index=130&type=chunk) [Investment Property](index=39&type=section&id=Investment%20Property) This section states the market value of investment property as of April 30, 2024, and its depreciation impact - The market value of investment property was **RMB 15,790 thousand as of April 30, 2024**[131](index=131&type=chunk) - If these assets were accounted for at this valuation, an **additional depreciation of RMB 158 thousand** would be recognized in the consolidated statement of profit or loss and other comprehensive income for the year ended December 31, 2024[131](index=131&type=chunk) [Trade and Bills Receivables](index=40&type=section&id=Trade%20and%20Bills%20Receivables) This section details the Group's trade and bills receivables, providing an aging analysis and changes in impairment provisions Trade and Bills Receivables (RMB thousands) | Item | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Trade receivables (net of impairment allowance) | 259,138 | 236,909 | | Bills receivables | 6,463 | 15,697 | | **Total** | **265,601** | **252,606** | Aging Analysis of Trade Receivables (As of June 30, 2025, RMB thousands) | Aging | Amount | | :--- | :--- | | Within 90 days | 91,518 | | 91 to 180 days | 6,115 | | 181 to 365 days | 123,725 | | Over 1 year but not exceeding 2 years | 25,019 | | Over 2 years but not exceeding 3 years | 10,799 | | Over 3 years but not exceeding 4 years | 1,962 | | **Total** | **259,138** | - Impairment allowance for trade receivables **increased from RMB 16,908 thousand at the beginning of the period to RMB 19,971 thousand at the end of the period**[135](index=135&type=chunk) [Trade and Bills Payables](index=41&type=section&id=Trade%20and%20Bills%20Payables) This section lists the Group's trade and bills payables, providing an aging analysis and noting their interest-free nature Trade and Bills Payables (RMB thousands) | Item | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Trade payables | 104,355 | 134,786 | | Bills payables | 24,554 | 19,644 | | **Total** | **128,909** | **154,430** | Aging Analysis of Trade and Bills Payables (As of June 30, 2025, RMB thousands) | Aging | Amount | | :--- | :--- | | Within 90 days | 60,196 | | 91 to 180 days | 37,374 | | 181 to 365 days | 17,508 | | Over 1 year | 13,831 | | **Total** | **128,909** | - Trade payables are **interest-free** and are normally settled within a **60-day period**[136](index=136&type=chunk) [Bank and Other Borrowings](index=42&type=section&id=Bank%20and%20Other%20Borrowings) This section details the Group's bank and other borrowings, including secured and unsecured loans and maturity profiles Bank and Other Borrowings (RMB thousands) | Item | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Secured loans | 119,700 | 99,800 | | Unsecured loans | 70,000 | 5,358 | | **Total** | **189,700** | **105,158** | | Current portion | (109,700) | (105,158) | | Non-current portion | 80,000 | – | Maturity Profile of Bank and Other Borrowings (As of June 30, 2025, RMB thousands) | Term | Amount | | :--- | :--- | | Within one year or on demand | 109,700 | | In the second year | – | | In the third to fifth years (inclusive) | 80,000 | | **Total** | **189,700** | - All borrowings are **fixed-rate loans** and are denominated in RMB[47](index=47&type=chunk) [Share Capital](index=43&type=section&id=Share%20Capital) This section states the company's authorized and issued share capital, which remained unchanged during the reporting period - The authorized share capital is **5,000,000,000 ordinary shares of USD 0.00001 each**, totaling **USD 50,000**[139](index=139&type=chunk) - The issued and fully paid share capital is **500,000,000 ordinary shares of USD 0.00001 each**, equivalent to **RMB 35,671 thousand**, and remained unchanged during the reporting period[139](index=139&type=chunk) [Capital Commitments](index=44&type=section&id=Capital%20Commitments) This section discloses the Group's capital commitments for property and equipment, which significantly decreased Capital Commitments (RMB thousands) | Item | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Property and equipment — contracted but not provided for | 372 | 11,194 | - Capital commitments for property and equipment **significantly decreased**, indicating a reduction in future capital expenditure pressure[140](index=140&type=chunk) [Related Party Transactions](index=44&type=section&id=Related%20Party%20Transactions) This section identifies ultimate controlling shareholders and discloses non-trade balances and transactions with related parties - **Mr. Lu Bo and Ms. Lu Xiaojing are the ultimate controlling shareholders** of the Group[141](index=141&type=chunk) - As of June 30, 2025, amounts due from controlling shareholders were **RMB 179 thousand**[142](index=142&type=chunk) - Related party lease payments for the reporting period were **RMB 83 thousand** (H1 2024: RMB 57 thousand)[143](index=143&type=chunk)

[CORPORATE INFORMATION](index=2&type=section&id=CORPORATE%20INFORMATION) This section provides an overview of the company's key corporate details, including its board of directors, committees, executive officers, registered offices, and shareholder information [BOARD OF DIRECTORS](index=3&type=section&id=BOARD%20OF%20DIRECTORS) The Board of Directors comprises executive directors Mr. Wang Jun (Chairman) and Mr. Guo Liyuan, and independent non-executive directors Mr. Liang Xiang, Ms. Luo Ying, and Ms. Xin Zhu - Mr. Wang Jun serves as Executive Director and Chairman[8](index=8&type=chunk) - Mr. Guo Liyuan was appointed Executive Director on April 30, 2025[8](index=8&type=chunk) - Ms. Dai Jiling resigned as Executive Director on April 30, 2025, and Mr. Shi Shushan resigned as Executive Director on February 1, 2025[8](index=8&type=chunk) [BOARD COMMITTEES](index=3&type=section&id=BOARD%20COMMITTEES) The Board has established Audit, Remuneration, and Nomination Committees, each composed of independent non-executive and executive directors to ensure effective corporate governance - The Audit Committee is chaired by Ms. Xin Zhu[8](index=8&type=chunk) - The Remuneration Committee is chaired by Ms. Luo Ying[8](index=8&type=chunk) - The Nomination Committee is chaired by Mr. Wang Jun[9](index=9&type=chunk) [CHIEF EXECUTIVE OFFICER](index=3&type=section&id=CHIEF%20EXECUTIVE%20OFFICER) Mr. Wang Jun was appointed Chief Executive Officer on April 30, 2025, succeeding Ms. Dai Jiling, who resigned on the same day - Mr. Wang Jun was appointed Chief Executive Officer on April 30, 2025[10](index=10&type=chunk) - Ms. Dai Jiling resigned as Chief Executive Officer on April 30, 2025[10](index=10&type=chunk) [COMPANY SECRETARY](index=3&type=section&id=COMPANY%20SECRETARY) Mr. Tam Kok Ching serves as the Company Secretary - The Company Secretary is Mr. Tam Kok Ching[10](index=10&type=chunk) [AUTHORISED REPRESENTATIVES](index=3&type=section&id=AUTHORISED%20REPRESENTATIVES) Mr. Wang Jun and Mr. Tam Kok Ching are the authorized representatives of the company - The authorized representatives are Mr. Wang Jun and Mr. Tam Kok Ching[10](index=10&type=chunk) [REGISTERED OFFICE](index=4&type=section&id=REGISTERED%20OFFICE) The company's registered office is located in the Cayman Islands - The registered office is located at Cricket Square, Hutchins Drive, P.O. Box 2681, Grand Cayman, KY1–1111, Cayman Islands[12](index=12&type=chunk) [PRINCIPAL PLACE OF BUSINESS IN THE PRC](index=4&type=section&id=PRINCIPAL%20PLACE%20OF%20BUSINESS%20IN%20THE%20PRC) The company's principal place of business in the PRC is located in Zhengzhou, Henan Province - The principal place of business in the PRC is located at Room 411, 4th Floor, Building 2, Jianye Headquarters Port, No. 19 Dirun Road, Zhengdong New District, Zhengzhou, Henan Province[12](index=12&type=chunk) [PRINCIPAL PLACE OF BUSINESS IN HONG KONG](index=4&type=section&id=PRINCIPAL%20PLACE%20OF%20BUSINESS%20IN%20HONG%20KONG) The company's principal place of business in Hong Kong is located in Harbour City, Canton Road, Tsim Sha Tsui, Kowloon - The principal place of business in Hong Kong is located at Units 1602–1605, 16th Floor, Tower 2, Gateway, Harbour City, 25 Canton Road, Tsim Sha Tsui, Kowloon, Hong Kong[13](index=13&type=chunk) [PRINCIPAL SHARE REGISTRAR AND TRANSFER OFFICE](index=4&type=section&id=PRINCIPAL%20SHARE%20REGISTRAR%20AND%20TRANSFER%20OFFICE) Conyers Trust Company (Cayman) Limited serves as the principal share registrar and transfer office - The principal share registrar and transfer office is Conyers Trust Company (Cayman) Limited[14](index=14&type=chunk) [HONG KONG BRANCH SHARE REGISTRAR AND TRANSFER OFFICE](index=4&type=section&id=HONG%20KONG%20BRANCH%20SHARE%20REGISTRAR%20AND%20TRANSFER%20OFFICE) Hong Kong Central Share Registrar and Transfer Office Limited serves as the Hong Kong branch share registrar and transfer office - The Hong Kong branch share registrar and transfer office is Hong Kong Central Share Registrar and Transfer Office Limited[14](index=14&type=chunk) [PRINCIPAL BANKERS](index=4&type=section&id=PRINCIPAL%20BANKERS) The principal bankers include Bank of China (Hong Kong) Limited and Industrial and Commercial Bank of China (Asia) Limited - The principal bankers include Bank of China (Hong Kong) Limited and Industrial and Commercial Bank of China (Asia) Limited[14](index=14&type=chunk) [LEGAL ADVISERS](index=5&type=section&id=LEGAL%20ADVISERS) Legal advisers include Stevenson, Wong & Co. (Hong Kong Law) and Conyers Dill & Pearman (Cayman Islands Law) - The Hong Kong legal adviser is Stevenson, Wong & Co[15](index=15&type=chunk) - The Cayman Islands legal adviser is Conyers Dill & Pearman[15](index=15&type=chunk) [INDEPENDENT AUDITOR](index=5&type=section&id=INDEPENDENT%20AUDITOR) The independent auditor is BDO Limited - The independent auditor is BDO Limited[15](index=15&type=chunk) [WEBSITE OF THE COMPANY](index=5&type=section&id=WEBSITE%20OF%20THE%20COMPANY) The company's official website is www.ccnewlife.com.cn - The company's website is www.ccnewlife.com.cn[15](index=15&type=chunk) [SHAREHOLDERS' INFORMATION](index=5&type=section&id=SHAREHOLDERS'%20INFORMATION) The company's shares are listed on the Main Board of The Stock Exchange of Hong Kong Limited, with 1,299,276,000 ordinary shares issued as of June 30, 2025, at HK$0.01 par value per share - The company's shares are listed on the Main Board of The Stock Exchange of Hong Kong Limited[16](index=16&type=chunk) - As of June 30, 2025, 1,299,276,000 shares were issued, with a par value of HK$0.01 per share[16](index=16&type=chunk) [INVESTOR RELATIONS CONTACT](index=5&type=section&id=INVESTOR%20RELATIONS%20CONTACT) The investor relations contact email address is ir@ccnewlife.com.cn - The investor relations contact email address is ir@ccnewlife.com.cn[16](index=16&type=chunk) [STOCK CODE](index=5&type=section&id=STOCK%20CODE) The company's stock code is 9983 - The stock code is 9983[16](index=16&type=chunk) [CORPORATE PROFILE](index=5&type=section&id=CORPORATE%20PROFILE) CCNL is the largest property management service provider in Central China, managing diverse properties across 18 cities in Henan and other provinces, serving over 2.8 million owners and residents - The company is the largest property management service provider in Central China by total GFA under management as of June 30, 2025, and by total revenue for the year ended June 30, 2025[19](index=19&type=chunk) - As of June 30, 2025, property management and value-added services covered all 18 prefecture-level cities in Henan Province and other provinces and cities in Central China, Hainan, and Xinjiang, serving over **2.8 million** owners and residents in more than **1,000** properties[20](index=20&type=chunk) - The company has been ranked 11th among China's Top 100 Property Service Enterprises for five consecutive years since 2021[20](index=20&type=chunk) - The company's business lines include property management services, community value-added services, and value-added services to non-property owners[24](index=24&type=chunk) [CHAIRMAN'S STATEMENT](index=7&type=section&id=CHAIRMAN'S%20STATEMENT) The Chairman's report highlights the group's financial performance for H1 2025, strategic focus on customer-centricity, service quality, and future outlook amidst a dynamic market environment - In H1 2025, the group's revenue was **RMB 1,433.8 million**, and net profit was **RMB 112.2 million**[28](index=28&type=chunk) - Excluding specific items, core net profit attributable to shareholders decreased by approximately **0.3%** year-on-year to **RMB 147.9 million**[28](index=28&type=chunk) - The group adheres to a customer-centric service philosophy, promotes a service quality enhancement strategy, optimizes its business structure, and strengthens its core competitive advantages[33](index=33&type=chunk) [PERFORMANCE REVIEW](index=9&type=section&id=PERFORMANCE%20REVIEW) In H1 2025, the group achieved significant growth in basic property services, with property management revenue reaching RMB 1,154.3 million, while enhancing service quality through the "Renewal Action" - In H1 2025, property management revenue reached **RMB 1,154.3 million**, reflecting continuous investment in service quality improvement[34](index=34&type=chunk) - As of June 30, 2025, total contracted GFA reached **288.0 million sqm**, and total GFA under management reached **200.1 million sqm**, with **2.5 million sqm** of new third-party expansion area added during the period[40](index=40&type=chunk) - The group received multiple brand awards, including "2025 China Top 100 Property Service Enterprises TOP 11"[45](index=45&type=chunk) [Strong Property Management Revenue with Enhanced Quality and Efficiency in Basic Services](index=9&type=section&id=Strong%20Property%20Management%20Revenue%20with%20Enhanced%20Quality%20and%20Efficiency%20in%20Basic%20Services) In H1 2025, basic property management revenue significantly increased to RMB 1,154.3 million, driven by the "Renewal Action" which upgraded smart hardware, refined service standards, and branded service image - In H1 2025, property management revenue reached **RMB 1,154.3 million**[34](index=34&type=chunk) - The "Renewal Action" promotes intelligent upgrades of park hardware facilities, refinement of service standards, and branding of service image[36](index=36&type=chunk) [Steady Advancement in Lifestyle Services through Demand-Driven Focus](index=10&type=section&id=Steady%20Advancement%20in%20Lifestyle%20Services%20through%20Demand-Driven%20Focus) The group in H1 2025 accurately grasped market trends, adjusted its business layout, focused on high-potential niche markets, stabilized traditional operations, and actively explored innovative service models, achieving steady overall development - Accurately grasp market trends, focus on high-potential niche markets, and achieve efficient resource allocation and vertical development[38](index=38&type=chunk) - Stabilize traditional businesses such as space operations and community commerce, and actively explore innovative service models[42](index=42&type=chunk) [Proactively Exploring Existing Market and Promoting Multi-business Deployment](index=10&type=section&id=Proactively%20Exploring%20Existing%20Market%20and%20Promoting%20Multi-business%20Deployment) The group adheres to a high-quality development path, deepening its regional presence, prudently selecting investment and expansion projects, and actively exploring opportunities in the existing market - Adhere to a high-quality development path, deepen regional and vertical development strategies, and explore potential opportunities in the existing market[39](index=39&type=chunk) - As of June 30, 2025, GFA under management reached **200.1 million sqm**, with **2.5 million sqm** of new third-party expansion area added[40](index=40&type=chunk) [Cultivating Cultural Empowerment and Elevating Brand Value](index=10&type=section&id=Cultivating%20Cultural%20Empowerment%20and%20Elevating%20Brand%20Value) In H1 2025, the group organized 4,750 community activities themed "This is My Home," engaging 398,402 residents, upgrading community governance, and earning multiple industry brand awards - Organized **4,750** community activities themed "This is My Home," with **398,402** residents participating[41](index=41&type=chunk) - Awarded "2025 China Top 100 Property Service Enterprises TOP 11" and "2025 China Listed Property Service Investment Value Excellent Enterprise" and other series of awards[45](index=45&type=chunk) [OUTLOOK](index=11&type=section&id=OUTLOOK) The group will align with policy requirements, deepen service innovation, refine service standards, optimize business layout, expand diversified partnerships, strengthen brand building, and upgrade its management system for sustainable development - Closely align with policy requirements, deepen service innovation, refine service standards, and continue the "Renewal Action"[47](index=47&type=chunk) - Actively respond to national urban renewal and old community renovation policies, focusing on high-potential niche markets such as community elderly care services[48](index=48&type=chunk) - Adhere to a high-quality development path, expand diversified cooperation models, accelerate market expansion, and strengthen brand building[52](index=52&type=chunk)[53](index=53&type=chunk) - Continuously upgrade the management system, adjust departmental settings and responsibilities, and strengthen talent cultivation and team building[56](index=56&type=chunk) [Embracing Policy Direction and Deepening Service Transformation](index=11&type=section&id=Embracing%20Policy%20Direction%20and%20Deepening%20Service%20Transformation) The group will align with policy requirements, deepen service innovation, refine service standards, and continue the "Renewal Action" to build a distinctive "Good Service" system that preserves and enhances property asset value - Closely align with policy requirements, deepen service innovation, refine service standards, and continue the Renewal Action[47](index=47&type=chunk) - Combine deep understanding of customer needs to create a distinctive "Good Service" system that preserves and enhances the value of property assets[49](index=49&type=chunk) [Deepening Market Insights and Optimising Business Presence](index=11&type=section&id=Deepening%20Market%20Insights%20and%20Optimising%20Business%20Presence) Facing a complex property management market, the group will deeply analyze market demand changes, optimize its business layout, actively respond to urban renewal policies, and focus on high-potential segments like community elderly care services - Deeply analyze changes in market demand and optimize business layout[48](index=48&type=chunk) - Actively respond to national urban renewal and old community renovation policies, fully leveraging professional advantages to participate[50](index=50&type=chunk) - Focus on high-potential niche markets, such as community elderly care services, to meet the growing and diverse service needs of owners[50](index=50&type=chunk) [Expanding Diversified Partnerships and Accelerating Market Development](index=12&type=section&id=Expanding%20Diversified%20Partnerships%20and%20Accelerating%20Market%20Development) To achieve sustainable growth, the group will pursue high-quality development, actively expand diversified cooperation models, accelerate market expansion, deepen regional penetration, and establish a robust project evaluation system - Adhere to a high-quality development path, actively expand diversified cooperation models, and accelerate market expansion[52](index=52&type=chunk) - Firmly advance the regional deep cultivation strategy, increase service density, reduce operating costs, and build regional competitive advantages[54](index=54&type=chunk) - In investment and expansion, focus on project quality and efficiency, and establish a comprehensive project evaluation system[54](index=54&type=chunk) [Enhancing Brand Identity and Communicating Brand Warmth](index=12&type=section&id=Enhancing%20Brand%20Identity%20and%20Communicating%20Brand%20Warmth) In the second half of the year, the group will further strengthen brand building, intensify online and offline promotion, widely disseminate its brand philosophy, and organize themed community cultural activities to enhance owner identification and belonging - In the second half of the year, brand building will be further strengthened to comprehensively enhance brand influence[53](index=53&type=chunk) - Increase online and offline promotion, and enhance owners' sense of identity and belonging to the brand through various themed community cultural activities[55](index=55&type=chunk) - Actively participate in industry standard setting and public welfare activities, establish an industry benchmark image, and demonstrate corporate social responsibility[55](index=55&type=chunk) [Enhancing Organisational Structure and Talent Excellence](index=13&type=section&id=Enhancing%20Organisational%20Structure%20and%20Talent%20Excellence) The group will continuously upgrade its management system, optimize organizational structure, adjust departmental settings and responsibilities, reduce management layers, and develop a comprehensive talent development plan to foster an excellent team - Continuously upgrade the management system, optimize organizational structure, adjust departmental settings and responsibilities, reduce management layers, and improve decision-making efficiency and execution[56](index=56&type=chunk)[58](index=58&type=chunk) - Formulate a comprehensive talent development plan, increase internal training and external recruitment, and enhance employees' business capabilities and overall quality[58](index=58&type=chunk) [FINANCIAL HIGHLIGHTS](index=13&type=section&id=FINANCIAL%20HIGHLIGHTS) In H1 2025, Joyful Ascent New Life's revenue decreased by 3.3% year-on-year to RMB 1,433.8 million, but net profit increased by 2.8% to RMB 112.2 million, with gross profit margin declining by 2.0 percentage points to 20.8% 2025 H1 Key Financial Data (Consolidated Statement) | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | Change | | :--- | :--- | :--- | :--- | | **Income Statement:** | | | | | Revenue | 1,433,780 | 1,482,932 | -3.3% | | Gross Profit | 298,669 | 337,849 | -11.6% | | Gross Profit Margin | 20.8% | 22.8% | -2.0 percentage points | | Net Profit | 112,239 | 109,179 | 2.8% | | Net Profit Margin | 7.8% | 7.4% | 0.4 percentage points | | Profit attributable to owners of the Company | 106,166 | 103,394 | 2.7% | | Core net profit attributable to owners of the Company | 147,903 | 148,398 | -0.3% | | Basic earnings per share (RMB) | 0.08 | 0.08 | 2.2% | | Diluted earnings per share (RMB) | 0.08 | 0.08 | 1.3% | | Interim dividend per share (HK cents) | 3.3 | 10.59 | -68.8% | | **Balance Sheet (Period-end):** | | | | | Total Cash | 833,723 | 1,198,019 | -30.4% | | Total Assets | 4,451,900 | 4,726,961 | -5.8% | | Total Liabilities | 2,437,338 | 2,737,588 | -11.0% | | Total Equity | 2,014,562 | 1,989,373 | 1.3% | | Equity attributable to owners of the Company | 1,887,482 | 1,863,154 | 1.3% | | Current Ratio | 1.6 times | 1.6 times | 0.0% | | Net asset value per share (RMB) | 1.55 | 1.53 | 1.3% | [MANAGEMENT DISCUSSION AND ANALYSIS](index=14&type=section&id=MANAGEMENT%20DISCUSSION%20AND%20ANALYSIS) This section provides a detailed analysis of the group's operational and financial performance for H1 2025, covering revenue streams, cost structures, financial resources, and future strategies - Revenue for the period was **RMB 1,433.8 million**, a **3.3%** decrease compared to H1 2024[67](index=67&type=chunk) - Net profit for the period was **RMB 112.2 million**, a **2.8%** increase compared to H1 2024[67](index=67&type=chunk) - Property management service revenue increased by **1.8%**, while community value-added service revenue and value-added service revenue to non-property owners decreased by **14.6%** and **48.8%** respectively[92](index=92&type=chunk)[99](index=99&type=chunk)[101](index=101&type=chunk) - Gross profit margin decreased from approximately **22.8%** in H1 2024 to approximately **20.8%**, mainly due to a decrease in gross profit margins for property management services and community value-added services[109](index=109&type=chunk) - Net impairment losses on financial assets increased by **RMB 22.5 million** to **RMB 71.6 million**, primarily due to the downturn in the domestic real estate sector[118](index=118&type=chunk) [BUSINESS REVIEW](index=15&type=section&id=BUSINESS%20REVIEW) The group's revenue for H1 2025 decreased by 3.3% to RMB 1,433.8 million, while net profit increased by 2.8% to RMB 112.2 million, with property management services showing growth and value-added services declining - Revenue for the period was **RMB 1,433.8 million**, a **3.3%** decrease compared to H1 2024[67](index=67&type=chunk) - Net profit for the period was **RMB 112.2 million**, a **2.8%** increase compared to H1 2024[67](index=67&type=chunk) - As of June 30, 2025, GFA under management increased by **1.7%** compared to 2024, reaching **200.1 million sqm**[70](index=70&type=chunk) - Community value-added service revenue decreased by **14.6%** year-on-year, and value-added service revenue to non-property owners decreased by **48.8%** year-on-year, mainly affected by the continuous downturn in the real estate market[99](index=99&type=chunk)[101](index=101&type=chunk) [Property management services](index=15&type=section&id=Property%20management%20services) The group's property management service revenue reached RMB 1,154.3 million during the period, an increase of 1.8% year-on-year, primarily due to the growth in total GFA under management - Property management service revenue for the period reached **RMB 1,154.3 million**, an increase of **1.8%** compared to H1 2024[92](index=92&type=chunk) - As of June 30, 2025, total GFA under management was **200.1 million sqm**, an increase of **1.7%** compared to December 31, 2024[95](index=95&type=chunk) GFA under Management Breakdown (as of June 30, 2025) | Source | GFA ('000 sqm) | Percentage (%) | | :--- | :--- | :--- | | Central China Group and its associates or joint ventures | 79,114 | 39.5 | | Third-party property developers | 121,023 | 60.5 | | **Total** | **200,137** | **100.0** | [Community value-added services](index=16&type=section&id=Community%20value-added%20services) Community value-added service revenue for the period was RMB 251.2 million, a 14.6% year-on-year decrease, mainly due to the downturn in the domestic real estate market and reduced consumer confidence - Community value-added service revenue for the period was **RMB 251.2 million**, a **14.6%** decrease compared to the same period last year[99](index=99&type=chunk) - The decrease was mainly due to the continuous downturn in the domestic real estate market, leading to a decrease in the group's smart community solutions revenue[100](index=100&type=chunk) - Reduced consumer confidence in the domestic market led to a decrease in the group's park sales service revenue[100](index=100&type=chunk) [Value-added services to non-property owners](index=17&type=section&id=Value-added%20services%20to%20non-property%20owners) Value-added services to non-property owners generated RMB 28.2 million in revenue, a significant 48.8% year-on-year decrease, primarily due to the group's proactive scaling back of these services amidst real estate market adjustments - Value-added service revenue to non-property owners for the period was **RMB 28.2 million**, a **48.8%** decrease compared to the same period last year[101](index=101&type=chunk) - The decrease was mainly due to the continuous adjustments in the real estate industry, leading the group to proactively adjust its value-added businesses and scale back value-added services to non-property owners[104](index=104&type=chunk) - Revenue from pre-delivery services and on-site sales services decreased by **RMB 18.6 million**[104](index=104&type=chunk) [PROSPECTS AND STRATEGIES](index=17&type=section&id=PROSPECTS%20AND%20STRATEGIES) The group aims to extract value from the existing market, enhance customer loyalty, and achieve high-quality sustainable development by innovating lifestyle services, maintaining consistent basic service quality, strengthening community culture, and focusing on efficiency - Entering H2 2025, the industry competition intensified, with value extraction from existing markets and enhancing customer loyalty becoming core challenges[75](index=75&type=chunk) - Lifestyle services will seek innovation while maintaining stability, optimizing existing service structures, increasing penetration and repurchase rates, and prudently introducing new services[76](index=76&type=chunk) - Basic services will maintain consistent standards and stable quality, and build a multi-tiered service standard and response system[81](index=81&type=chunk) - Strengthen community culture building, systematically and regularly organize online and offline community activities, and cultivate community cultural brands[82](index=82&type=chunk) - Investment and expansion businesses will be prudently evaluated, and existing projects (especially loss-making ones) will undergo in-depth diagnosis and governance to improve efficiency and reduce costs[83](index=83&type=chunk)[86](index=86&type=chunk) [Seeking Innovation in Lifestyle Services While Maintaining Stability, and Building a Resilient Ecosystem](index=17&type=section&id=Seeking%20Innovation%20in%20Lifestyle%20Services%20While%20Maintaining%20Stability,%20and%20Building%20a%20Resilient%20Ecosystem) The group will optimize existing lifestyle service structures, enhance penetration and repurchase rates, accurately assess owner needs, and prudently introduce new services with long-term potential, while strengthening supply chain resilience - Focus on optimizing the existing service structure to increase penetration and repurchase rates[76](index=76&type=chunk) - Accurately assess owner needs, prudently introduce new services with long-term potential, and ensure the sustainability and profitability of innovative businesses[79](index=79&type=chunk) - Continuously improve online and offline service scenarios covering the entire owner's life cycle, use data insights for precise matching, and continuously strengthen supply chain resilience[79](index=79&type=chunk) [Maintaining Consistent Quality in Basic Services and Deepening Service Tiering](index=18&type=section&id=Maintaining%20Consistent%20Quality%20in%20Basic%20Services%20and%20Deepening%20Service%20Tiering) The group will ensure consistent standards and stable quality in basic services, and based on project positioning, owner needs, and willingness to pay, scientifically build multi-tiered service standards and response systems - Ensure consistent standards and stable quality in basic services, and continuously invest to guarantee high-standard execution of core modules[81](index=81&type=chunk) - Scientifically build multi-tiered service standards and response systems based on project positioning, owner needs, and willingness to pay[84](index=84&type=chunk) - Consolidate the achievements of the "Quality Improvement Year" to normalize and refine quality control mechanisms[84](index=84&type=chunk) [Strengthening Community Culture Construction and Fostering Neighbourhood Value](index=18&type=section&id=Strengthening%20Community%20Culture%20Construction%20and%20Fostering%20Neighbourhood%20Value) The group will systematically and regularly plan and organize online and offline community activities, fostering a warm, vibrant, and mutually supportive community atmosphere, and actively build interactive communication platforms - Systematically and regularly plan and organize online and offline community activities to create a warm, vibrant, and mutually supportive community atmosphere[82](index=82&type=chunk) - Cultivate distinctive community cultural brands or event IPs by combining regional characteristics and project features[85](index=85&type=chunk) - Actively build online and offline interactive communication platforms to promote neighborly exchange and emotional connection, fostering community spirit[85](index=85&type=chunk) [Continuing the Path of High-Quality Development and Focusing on Effectiveness](index=18&type=section&id=Continuing%20the%20Path%20of%20High-Quality%20Development%20and%20Focusing%20on%20Effectiveness) The group will prudently evaluate investment and expansion projects for their alignment with existing layout, service capabilities, and cost structure, ensuring a healthy profit model, and optimize operations for existing projects - Prudently evaluate investment and expansion projects for their alignment with existing layout, service capabilities, and cost structure to ensure a healthy profit model[83](index=83&type=chunk) - For existing projects, especially loss-making ones, conduct in-depth diagnosis and governance, improve efficiency, increase revenue, and reduce expenditure to continuously optimize operating conditions[86](index=86&type=chunk) [FINANCIAL REVIEW](index=19&type=section&id=FINANCIAL%20REVIEW) This section provides a detailed review of the group's financial performance for H1 2025, including revenue, gross profit, operating expenses, impairment losses, and net profit - Revenue for the period was **RMB 1,433.8 million**, a **3.3%** decrease compared to H1 2024[87](index=87&type=chunk) - Gross profit was **RMB 298.7 million**, an **11.6%** decrease compared to H1 2024; gross profit margin decreased to approximately **20.8%**[109](index=109&type=chunk) - Selling and marketing expenses decreased by **33.4%** to **RMB 6.4 million**, and administrative expenses decreased by **25.4%** to **RMB 72.9 million**[116](index=116&type=chunk)[117](index=117&type=chunk) - Net impairment losses on financial assets were **RMB 71.6 million**, an increase of **RMB 22.5 million** compared to H1 2024[118](index=118&type=chunk) - Net profit for the period was **RMB 112.2 million**, a **2.8%** increase compared to H1 2024; income tax expense decreased by **43.0%**[126](index=126&type=chunk)[129](index=129&type=chunk) [Revenue](index=19&type=section&id=Revenue) In H1 2025, the group's total revenue was RMB 1,433.8 million, a 3.3% year-on-year decrease, primarily derived from property management services, community value-added services, and non-property owner value-added services - Revenue for the period was **RMB 1,433.8 million**, a **3.3%** decrease compared to H1 2024[87](index=87&type=chunk) Revenue Breakdown by Business Line (as of June 30, 2025) | Business Line | 2025 Revenue (RMB thousand) | 2025 Share (%) | 2024 Revenue (RMB thousand) | 2024 Share (%) | | :--- | :--- | :--- | :--- | :--- | | Property management services | 1,154,310 | 80.5 | 1,133,606 | 76.4 | | Community value-added services | 251,231 | 17.5 | 294,163 | 19.8 | | Value-added services to non-property owners | 28,239 | 2.0 | 55,163 | 3.8 | | **Total** | **1,433,780** | **100.0** | **1,482,932** | **100.0** | [PROPERTY MANAGEMENT SERVICES](index=19&type=section&id=PROPERTY%20MANAGEMENT%20SERVICES) Property management service revenue reached RMB 1,154.3 million, growing by 1.8% year-on-year, driven by an increase in total GFA under management, with an average residential property management fee rate of RMB 1.75/sqm/month - Property management service revenue for the period reached **RMB 1,154.3 million**, an increase of **1.8%** compared to H1 2024[92](index=92&type=chunk) - As of June 30, 2025, total GFA under management was **200.1 million sqm**, an increase of **1.7%** compared to December 31, 2024, mainly due to an increase in third-party projects[95](index=95&type=chunk) - The average property management fee rate for residential property projects was approximately **RMB 1.75/sqm/month**[95](index=95&type=chunk) [COMMUNITY VALUE-ADDED SERVICES](index=20&type=section&id=COMMUNITY%20VALUE-ADDED%20SERVICES) Community value-added service revenue decreased by 14.6% to RMB 251.2 million, primarily due to the ongoing downturn in the domestic real estate market affecting smart community solutions and reduced consumer confidence impacting park sales services - Community value-added service revenue for the period was **RMB 251.2 million**, a **14.6%** decrease compared to the same period last year[99](index=99&type=chunk) - The decrease was mainly due to the continuous downturn in the domestic real estate market, leading to a decrease in the group's smart community solutions revenue[100](index=100&type=chunk) - Reduced consumer confidence in the domestic market led to a decrease in the group's park sales service revenue[100](index=100&type=chunk) [VALUE-ADDED SERVICES TO NON-PROPERTY OWNERS](index=21&type=section&id=VALUE-ADDED%20SERVICES%20TO%20NON-PROPERTY%20OWNERS) Value-added services to non-property owners saw a substantial 48.8% decrease in revenue to RMB 28.2 million, mainly attributed to the group's strategic reduction in business scale due to the continuous adjustments in the real estate industry - Value-added service revenue to non-property owners for the period was **RMB 28.2 million**, a **48.8%** decrease compared to the same period last year[101](index=101&type=chunk) - The decrease was mainly due to the continuous adjustments in the real estate industry, leading the group to proactively adjust its value-added businesses and scale back value-added services to non-property owners[104](index=104&type=chunk) - Revenue from pre-delivery services and on-site sales services decreased by **RMB 18.6 million**[104](index=104&type=chunk) [COST OF SALES](index=21&type=section&id=COST%20OF%20SALES) Cost of sales for the period was RMB 1,135.1 million, a 0.9% year-on-year decrease, primarily due to a reduction in certain services provided by the group - Cost of sales for the period was **RMB 1,135.1 million**, a **0.9%** decrease compared to H1 2024[103](index=103&type=chunk) - The decrease was mainly due to a reduction in some of the group's services[105](index=105&type=chunk) - Cost of sales primarily includes employee benefit expenses, subcontracting costs, landscaping and cleaning fees, and cost of goods sold[102](index=102&type=chunk) [GROSS PROFIT AND GROSS PROFIT MARGIN](index=22&type=section&id=GROSS%20PROFIT%20AND%20GROSS%20PROFIT%20MARGIN) The group's gross profit for the period was RMB 298.7 million, an 11.6% year-on-year decrease, with the gross profit margin declining to 20.8% due to lower margins in property management and community value-added services - Gross profit for the period was **RMB 298.7 million**, an **11.6%** decrease compared to H1 2024[109](index=109&type=chunk) - Gross profit margin decreased from approximately **22.8%** in H1 2024 to approximately **20.8%** in the current period, mainly due to a decrease in gross profit margins for property management services and community value-added services[109](index=109&type=chunk) Gross Profit and Gross Profit Margin by Business Line (as of June 30, 2025) | Business Line | 2025 Gross Profit (RMB thousand) | 2025 Gross Profit Margin (%) | 2024 Gross Profit (RMB thousand) | 2024 Gross Profit Margin (%) | | :--- | :--- | :--- | :--- | :--- | | Property management services | 236,663 | 20.5 | 249,725 | 22.0 | | Community value-added services | 56,682 | 22.6 | 76,776 | 26.1 | | Value-added services to non-property owners | 5,324 | 18.9 | 11,348 | 20.6 | | **Total** | **298,669** | **20.8** | **337,849** | **22.8** | [SELLING AND MARKETING EXPENSES](index=23&type=section&id=SELLING%20AND%20MARKETING%20EXPENSES) Selling and marketing expenses for the period decreased by approximately 33.4% to RMB 6.4 million, representing about 0.4% of revenue, primarily due to strict control over sales expenditures - Selling and marketing expenses for the period were **RMB 6.4 million**, a decrease of approximately **33.4%** compared to the same period last year[116](index=116&type=chunk) - This decrease was mainly due to the company's strict control over various sales expenses[119](index=119&type=chunk) [ADMINISTRATIVE EXPENSES](index=23&type=section&id=ADMINISTRATIVE%20EXPENSES) Administrative expenses for the period decreased by 25.4% to RMB 72.9 million, representing about 5.1% of revenue, as a result of the group's measures to control administrative costs - Administrative expenses for the period were **RMB 72.9 million**, a **25.4%** decrease compared to H1 2024[117](index=117&type=chunk) - This accounted for approximately **5.1%** of the group's revenue, a decrease of **1.5 percentage points** compared to H1 2024[120](index=120&type=chunk) - The decrease was mainly due to the group's various measures to control administrative expenses, thereby reducing costs[120](index=120&type=chunk) [NET IMPAIRMENT LOSSES ON FINANCIAL ASSETS](index=23&type=section&id=NET%20IMPAIRMENT%20LOSSES%20ON%20FINANCIAL%20ASSETS) Net impairment losses on financial assets increased by RMB 22.5 million to RMB 71.6 million, primarily due to increased credit risk on receivables amidst the downturn in the domestic real estate sector - Net impairment losses on financial assets for the period were **RMB 71.6 million**, an increase of **RMB 22.5 million** compared to H1 2024[118](index=118&type=chunk) - This was mainly due to the downturn in the domestic real estate sector, leading to an increase in credit risk on receivables[121](index=121&type=chunk) [OTHER INCOME](index=24&type=section&id=OTHER%20INCOME) Other income for the period was RMB 2.1 million, a 34.5% year-on-year decrease, mainly attributable to reduced interest income from third-party loans - Other income for the period was **RMB 2.1 million**, a **34.5%** decrease compared to H1 2024[123](index=123&type=chunk) - This was mainly due to a decrease in interest income from third-party loans obtained during the period[127](index=127&type=chunk) [OTHER GAINS/(LOSSES) — NET](index=24&type=section&id=OTHER%20GAINS%2F(LOSSES)%20%E2%80%94%20NET) Net other gains for the period amounted to RMB 3.7 million, a positive turnaround from a net loss of RMB 3.6 million in H1 2024, primarily due to gains from the disposal of subsidiaries - Net other gains for the period were **RMB 3.7 million**, compared to a net loss of **RMB 3.6 million** in the same period last year[124](index=124&type=chunk) - This was mainly due to gains from the disposal of subsidiaries during the period[128](index=128&type=chunk) [INCOME TAX EXPENSES](index=24&type=section&id=INCOME%20TAX%20EXPENSES) Income tax expense for the period decreased by 43.0% to RMB 40.6 million, with the effective tax rate falling to 26.6% due to increased withholding tax provisions in the prior period - Income tax expense for the period was **RMB 40.6 million**, a **43.0%** decrease compared to the same period last year[125](index=125&type=chunk) - The income tax rate for the period was **26.6%** (H1 2024: **39.5%**), with the decrease mainly due to increased withholding tax provisions for dividends distributed by the group's domestic companies to overseas companies in H1 2024[129](index=129&type=chunk) [PROFITS](index=24&type=section&id=PROFITS) The group's net profit for the period was RMB 112.2 million, with a net profit margin of 7.8%, and core net profit attributable to shareholders remained largely stable at RMB 147.9 million - Net profit for the period was **RMB 112.2 million**, with a net profit margin of **7.8%**[126](index=126&type=chunk) - Profit attributable to owners of the Company was **RMB 106.2 million**[130](index=130&type=chunk) - Core net profit attributable to owners of the Company was approximately **RMB 147.9 million**, largely stable compared to H1 2024[130](index=130&type=chunk) - Basic earnings per share were **RMB 0.08**[130](index=130&type=chunk) [FINANCIAL RESOURCES MANAGEMENT AND CAPITAL STRUCTURE](index=25&type=section&id=FINANCIAL%20RESOURCES%20MANAGEMENT%20AND%20CAPITAL%20STRUCTURE) As of June 30, 2025, the group's cash and cash equivalents decreased, bank borrowings remained stable, and the capital-to-debt ratio was maintained, with an interim dividend declared - As of June 30, 2025, the group's cash and cash equivalents were approximately **RMB 831.6 million** (December 31, 2024: approximately **RMB 1,190.1 million**)[131](index=131&type=chunk) - As of June 30, 2025, the group had total bank borrowings of **RMB 52.0 million**, consistent with the end of 2024[131](index=131&type=chunk) - As of June 30, 2025, the capital-to-debt ratio was **2.6%**, consistent with December 31, 2024[132](index=132&type=chunk) - The Board has declared an interim dividend totaling approximately **RMB 39.4 million** to shareholders[131](index=131&type=chunk) [TRADE AND OTHER RECEIVABLES AND PREPAYMENTS](index=25&type=section&id=TRADE%20AND%20OTHER%20RECEIVABLES%20AND%20PREPAYMENTS) As of June 30, 2025, total trade and other receivables and prepayments increased by 3.6% to RMB 2,955.3 million, primarily due to an increase in receivables from property owners - As of June 30, 2025, trade and other receivables and prepayments were **RMB 2,955.3 million**, an increase of **3.6%** compared to December 31, 2024[133](index=133&type=chunk) - The increase was mainly due to an increase in amounts receivable from property owners as GFA under management continuously increased[136](index=136&type=chunk) [TRADE AND OTHER PAYABLES](index=25&type=section&id=TRADE%20AND%20OTHER%20PAYABLES) As of June 30, 2025, total trade and other payables remained largely stable at RMB 1,304.0 million compared to the end of 2024 - As of June 30, 2025, trade and other payables amounted to **RMB 1,304.0 million**, largely stable compared to December 31, 2024[134](index=134&type=chunk)[137](index=137&type=chunk) [BORROWINGS](index=26&type=section&id=BORROWINGS) As of June 30, 2025, total borrowings remained stable at RMB 52.0 million, primarily consisting of bank borrowings incurred by Henan Tianming Property Management Co., Ltd. before its acquisition - As of June 30, 2025, borrowings were **RMB 52.0 million**, remaining stable compared to December 31, 2024[139](index=139&type=chunk) - This borrowing was a bank loan incurred by Henan Tianming Property Management Co., Ltd. before its acquisition by the group[141](index=141&type=chunk) [PROCEEDS FROM THE LISTING](index=26&type=section&id=PROCEEDS%20FROM%20THE%20LISTING) The net proceeds from the listing were approximately RMB 2,088.7 million, with RMB 655.9 million remaining unutilized, and the board has revised the allocation plan to align with business strategies - The net proceeds from the listing were approximately **RMB 2,088.7 million**[140](index=140&type=chunk) - As of June 30, 2025, the group had utilized approximately **RMB 1,432.8 million** of the net proceeds, with an unutilized amount of approximately **RMB 655.9 million**[142](index=142&type=chunk) - The Board resolved to change the proposed use and corresponding timetable for the unutilized net proceeds in response to recent business environment changes and the company's business strategy adjustments[142](index=142&type=chunk) Revised Allocation and Use of Net Proceeds from Listing (as of June 30, 2025) | Main Category | Revised Allocated Net Proceeds (RMB thousand) | Actual Use as of June 30, 2025 (RMB thousand) | Unused Net Proceeds as of June 30, 2025 (RMB thousand) | Updated Timeline | | :--- | :--- | :--- | :--- | :--- | | 1. Strategic investments, collaborations, and acquisitions | 132,723 | 132,723 | – | – | | 2. Strengthening the Jianye+ platform to optimize user experience | 505,889 | 146,303 | 359,586 | Before end of December 2025 | | 3. Investing in advanced information technology systems | 346,575 | 192,022 | 154,553 | Before end of December 2025 | | 4. General working capital | 656,189 | 656,189 | – | Before end of December 2025 | | 5. Renovation and upgrading of old communities | 149,106 | 7,359 | 141,747 | Before end of December 2025 | | 6. Developing value-added service businesses | 298,212 | 298,212 | – | Before end of December 2025 | | **Total** | **2,088,694** | **1,432,808** | **655,886** | | [PLEDGE OF ASSETS](index=29&type=section&id=PLEDGE%20OF%20ASSETS) As of June 30, 2025, the group had not pledged any assets as security for loans - As of June 30, 2025, the group had not pledged any assets as security for loans[150](index=150&type=chunk)[156](index=156&type=chunk) [MAJOR ACQUISITION AND DISPOSALS](index=29&type=section&id=MAJOR%20ACQUISITION%20AND%20DISPOSALS) The group did not undertake any major acquisitions or disposals of subsidiaries and associates during the period - The group did not undertake any major acquisitions or disposals of subsidiaries and associates during the period[151](index=151&type=chunk)[157](index=157&type=chunk) [MAJOR INVESTMENT](index=29&type=section&id=MAJOR%20INVESTMENT) As of June 30, 2025, the group did not hold any major investments - As of June 30, 2025, the group did not hold any major investments[152](index=152&type=chunk)[157](index=157&type=chunk) [CONTINGENT LIABILITIES AND CAPITAL COMMITMENT](index=29&type=section&id=CONTINGENT%20LIABILITIES%20AND%20CAPITAL%20COMMITMENT) As of June 30, 2025, the group had no significant contingent liabilities or capital commitments - As of June 30, 2025, the group had no significant contingent liabilities or capital commitments[153](index=153&type=chunk)[158](index=158&type=chunk) [FOREIGN EXCHANGE RISK](index=29&type=section&id=FOREIGN%20EXCHANGE%20RISK) The group's primary operations are in China, with most revenues and expenses denominated in RMB, thus not exposed to significant foreign exchange fluctuation risks - The group's primary operations are in China, with most revenues and expenses denominated in RMB, and is not exposed to significant risks directly related to foreign exchange rate fluctuations[154](index=154&type=chunk)[159](index=159&type=chunk) - Currently, no contracts have been entered into to hedge foreign exchange risk, but management will continue to monitor and take prudent measures to mitigate foreign exchange risk[159](index=159&type=chunk) [EMPLOYEES AND REMUNERATION POLICY](index=30&type=section&id=EMPLOYEES%20AND%20REMUNERATION%20POLICY) As of June 30, 2025, the group had 5,516 employees and continued to optimize its organizational structure, talent management, and remuneration policies to enhance overall efficiency and competitiveness - As of June 30, 2025, the group had **5,516** employees[161](index=161&type=chunk) - The company continues to promote the flattening of its organizational structure to enhance overall organizational efficiency and responsiveness[161](index=161&type=chunk) - In talent management, the group adheres to the principle of balancing professional ethics and work ability, strengthens internal training, encourages continuous education, and designs clear career progression paths[162](index=162&type=chunk)[164](index=164&type=chunk) - The remuneration structure closely monitors external market dynamics, establishes an efficient performance appraisal mechanism, and closely links employee performance with remuneration[163](index=163&type=chunk)[165](index=165&type=chunk) [DISCLOSURE OF INTERESTS](index=30&type=section&id=DISCLOSURE%20OF%20INTERESTS) This section details the interests and short positions of directors, chief executives, and substantial shareholders in the company's shares, along with information on the 2023 Share Award Scheme - As of June 30, 2025, directors and chief executives held long positions in the company's shares and underlying shares[167](index=167&type=chunk)[168](index=168&type=chunk) - The 2023 Share Award Scheme aims to align the interests of eligible participants with the group through share ownership, dividends, and share appreciation, and to encourage and retain their contributions to the group's long-term development and profitability[173](index=173&type=chunk)[177](index=177&type=chunk) - As of June 30, 2025, substantial shareholder Mr. Hu Baosen and his controlled corporation, Joyful Ascent Limited, held a **65.27%** equity interest in the company[218](index=218&type=chunk) [DIRECTORS' AND CHIEF EXECUTIVES' INTERESTS AND SHORT POSITIONS IN SHARES, UNDERLYING SHARES OR DEBENTURES OF THE COMPANY OR ITS ASSOCIATED CORPORATIONS](index=31&type=section&id=DIRECTORS'%20AND%20CHIEF%20EXECUTIVES'%20INTERESTS%20AND%20SHORT%20POSITIONS%20IN%20SHARES,%20UNDERLYING%20SHARES%20OR%20DEBENTURES%20OF%20THE%20COMPANY%20OR%20ITS%20ASSOCIATED%20CORPORATIONS) As of June 30, 2025, the company's directors and chief executives held long positions in the company's shares and underlying shares, including awards granted under the 2023 Share Award Scheme Long Positions of Directors or Chief Executives in the Company's Shares and Underlying Shares (as of June 30, 2025) | Name of Director or Chief Executive | Capacity and Nature of Interest | Number of Shares Held | Approximate Percentage of the Company's Issued Share Capital | | :--- | :--- | :--- | :--- | | Mr. Wang Jun | Interest in controlled corporation | 44,640,000 | 3.44% | | Mr. Wang Jun | Beneficial owner | 4,358,000 | 0.34% | | Mr. Guo Liyuan | Beneficial owner | 852,236 | 0.07% | | Mr. Shi Shushan | Beneficial owner | 900,000 | 0.07% | - These share interests include share awards of the company granted and vested to each director under the 2023 Share Award Scheme[178](index=178&type=chunk) [SHARE AWARD SCHEME](index=32&type=section&id=SHARE%20AWARD%20SCHEME) The 2023 Share Award Scheme aims to incentivize and retain eligible participants through share ownership, with a total share pool not exceeding 10% of issued shares and vesting subject to performance targets - The 2023 Share Award Scheme aims to align the interests of eligible participants with the group through share ownership, dividends, and share appreciation, and to encourage and retain their contributions to the group's long-term development and profitability[173](index=173&type=chunk)[177](index=177&type=chunk) - The total number of shares that can be issued under the scheme will not exceed **127,872,600** shares, representing no more than **10%** of the total issued shares as of the adoption date[180](index=180&type=chunk)[183](index=183&type=chunk) - The vesting of awarded shares is subject to the fulfillment and/or waiver of all vesting conditions and performance targets stated in the award letter, including financial and management objectives[188](index=188&type=chunk)[191](index=191&type=chunk) - During the period, **6,060,000** awarded shares vested, and a total expense of **RMB 4.6 million** was recognized for employee services under the 2023 Share Award Scheme[203](index=203&type=chunk)[201](index=201&type=chunk) [2023 Share Award Scheme](index=32&type=section&id=2023%20Share%20Award%20Scheme) The 2023 Share Award Scheme was adopted and approved on August 7, 2023, with awarded shares to be settled through new share allotments or market purchases of existing shares - The 2023 Share Award Scheme was adopted and approved by shareholders on August 7, 2023[172](index=172&type=chunk) - Awarded shares will be settled by new shares allotted and issued by the company to the trustee or by existing shares acquired by the trustee in the market at prevailing market prices[176](index=176&type=chunk) [Purpose](index=32&type=section&id=Purpose) The 2023 Share Award Scheme aims to align eligible participants' interests with the group through share ownership, dividends, and share appreciation, while encouraging and retaining their contributions to long-term development and profitability - Aims to align the interests of eligible participants with the group through share ownership, dividends and other distributions paid on shares, and/or share appreciation[173](index=173&type=chunk)[177](index=177&type=chunk) - To encourage and retain eligible participants to contribute to the long-term development and profitability of the group[177](index=177&type=chunk) [Participants](index=33&type=section&id=Participants) Eligible participants include directors and employees who have contributed or will contribute to the group, excluding those who have resigned or whose employment contracts have been terminated, or those prohibited by local laws - Eligible participants include only directors and employees of the group who, in the absolute discretion of the Board, have contributed (and will continue to contribute) or will contribute to the group[179](index=179&type=chunk)[182](index=182&type=chunk) - Excludes employees or directors who have tendered their resignation or whose employment contracts have been terminated, and individuals whose participation is prohibited or deemed inconvenient by local laws or regulations or the Board[182](index=182&type=chunk) [Award of Shares and pool of awarded Shares](index=33&type=section&id=Award%20of%20Shares%20and%20pool%20of%20awarded%20Shares) The total number of shares that can be issued under the 2023 Share Award Scheme and other share schemes will not exceed 10% of the total issued shares as of the adoption date, capped at 127,872,600 shares - The total number of shares that may be issued for all awards under the 2023 Share Award Scheme and other share schemes of the company will not exceed **127,872,600** shares[180](index=180&type=chunk) - This represents no more than **10%** of the total issued shares as of the adoption date of the 2023 Share Award Scheme[183](index=183&type=chunk) [Maximum entitlement of each participant](index=33&type=section&id=Maximum%20entitlement%20of%20each%20participant) The number of shares awarded to a selected participant within any 12-month period, including options, shall not exceed 1% of the company's issued share capital at the scheme's adoption date, subject to Listing Rules - The maximum number of shares that may be awarded to a selected participant within any 12-month period ending on the award date, together with any shares granted under any share option scheme, shall not exceed **1%** of the company's issued share capital as of the adoption date of the 2023 Share Award Scheme[181](index=181&type=chunk)[184](index=184&type=chunk) - Any award of shares to any director, chief executive, or substantial shareholder of the company or any of their respective associates requires prior approval from the independent non-executive directors[186](index=186&type=chunk) - If the award of shares results in the total exceeding **0.1%** of the issued shares, it requires approval from shareholders in a general meeting[186](index=186&type=chunk) [Vesting of the awarded Shares and performance targets](index=35&type=section&id=Vesting%20of%20the%20awarded%20Shares%20and%20performance%20targets) Awarded shares will vest according to the vesting schedule in the award letter, contingent upon meeting specified conditions and performance targets, which may include financial and management objectives - Each awarded share will vest to the selected participant according to the applicable vesting schedule set out in the award letter, provided that all vesting conditions contained therein have been met and/or waived[188](index=188&type=chunk)[191](index=191&type=chunk) - Performance targets may include financial targets and management targets, which will be determined based on individual performance, group performance, and/or the performance of the business groups, business units, business lines, functional departments, projects, and/or geographical regions managed by the selected participant[189](index=189&type=chunk)[191](index=191&type=chunk) - The vesting date for any award shall not be less than **12 months** from the award date, except for employees, where it may be less than **12 months** under specific circumstances[193](index=193&type=chunk)[194](index=194&type=chunk) [Purchase price of awarded Shares](index=37&type=section&id=Purchase%20price%20of%20awarded%20Shares) The purchase price of awarded shares, if any, will be determined by the Board based on factors such as the prevailing closing price, award purpose, and participant characteristics, balancing incentives with shareholder interests - The purchase price (if any) of the awarded shares will be determined by the Board from time to time based on considerations such as the prevailing closing price of the shares, the purpose of the award, and the characteristics and profile of the selected participant[195](index=195&type=chunk)[199](index=199&type=chunk) - This discretion provides the Board with flexibility to stipulate a purchase price for awarded shares when necessary, while balancing the purpose of the award and the interests of shareholders[199](index=199&type=chunk) [Remaining life](index=37&type=section&id=Remaining%20life) The 2023 Share Award Scheme is valid for ten years from its adoption date of August 7, 2023, with approximately 8 years remaining as of the interim report date - The 2023 Share Award Scheme will be valid and effective for a period of **ten years** from its adoption date, which was August 7, 2023[196](index=196&type=chunk)[200](index=200&type=chunk) - As of the date of this interim report, the remaining life of the 2023 Share Award Scheme is approximately **8 years**[200](index=200&type=chunk) [Movements of awarded Shares](index=37&type=section&id=Movements%20of%20awarded%20Shares) On May 29, 2023, the Board resolved to award 21,800,000 shares to 16 employee participants; during the period, 6,060,000 shares vested, 1,120,000 lapsed, and RMB 4.6 million in expenses were recognized - On May 29, 2023, the Board resolved to award a total of **21,800,000** awarded shares to a total of **16** employee participants (including **4** directors) free of charge[197](index=197&type=chunk)[201](index=201&type=chunk) - During the period, **6,060,000** shares vested, and **1,120,000** shares lapsed[203](index=203&type=chunk)[215](index=215&type=chunk) - For the six months ended June 30, 2025, a total expense of **RMB 4.6 million** was recognized for employee services under the 2023 Share Award Scheme[198](index=198&type=chunk)[201](index=201&type=chunk) Movements of 2023 Awarded Shares During the Period (as of June 30, 2025) | Selected Participant | Unvested as of January 1, 2025 | Granted During the Period | Vested During the Period | Lapsed/Cancelled During the Period | Unvested as of June 30, 2025 | | :--- | :--- | :--- | :--- | :--- | :--- | | Directors | 7,720,000 | – | (3,480,000) | – | 4,240,000 | | Other employee participants | 8,440,000 | – | (2,580,000) | (1,120,000) | 4,740,000 | | **Total** | **16,160,000** | **–** | **(6,060,000)** | **(1,120,000)** | **8,980,000** | [SUBSTANTIAL SHAREHOLDERS' INTERESTS IN THE SHARE CAPITAL OF THE COMPANY](index=41&type=section&id=SUBSTANTIAL%20SHAREHOLDERS'%20INTERESTS%20IN%20THE%20SHARE%20CAPITAL%20OF%20THE%20COMPANY) As of June 30, 2025, Mr. Hu Baosen and his controlled corporation, Joyful Ascent Limited, held 65.27% of the company's issued share capital, with other substantial shareholders also disclosed Long Positions of Substantial Shareholders in the Company's Shares (as of June 30, 2025) | Name of Shareholder | Capacity and Nature of Interest | Number of Shares Held | Approximate Percentage of the Company's Issued Share Capital | | :--- | :--- | :--- | :--- | | Mr. Hu Baosen | Interest in controlled corporation | 848,092,944 | 65.27% | | Joyful Ascent Limited | Beneficial owner | 848,092,944 | 65.27% | | Ms. Li Lin | Spouse's interest | 848,092,944 | 65.27% | | Gaoling Fund, L.P. | Beneficial owner | 84,857,000 | 6.53% | | Hillhouse Capital Advisors, Ltd. | Interest in controlled corporation | 84,867,000 | 6.53% | - Mr. Hu Baosen holds the entire issued share capital of Joyful Ascent Limited and is deemed to have an interest in the shares held by it[223](index=223&type=chunk) - Ms. Li Lin, being the spouse of Mr. Hu Baosen, is deemed to have an interest in the same number of shares in which Mr. Hu Baosen has an interest[223](index=223&type=chunk) [CORPORATE GOVERNANCE AND OTHER INFORMATION](index=42&type=section&id=CORPORATE%20GOVERNANCE%20AND%20OTHER%20INFORMATION) This section outlines the company's corporate governance practices, compliance with the Model Code, share repurchases, changes in director information, and interim dividend declaration - The company has complied with all code provisions and mandatory disclosure requirements of the Corporate Governance Code, except for the deviation where the roles of Chairman and Chief Executive Officer are combined[225](index=225&type=chunk) - The Board believes that combining the roles of Chairman and Chief Executive Officer helps ensure consistent leadership within the group and maximizes the effectiveness and efficiency of overall planning and strategy execution[226](index=226&type=chunk)[228](index=228&type=chunk) - The company confirmed that all directors have complied with the Model Code for Securities Transactions by Directors of Listed Issuers during the period[229](index=229&type=chunk)[231](index=231&type=chunk) - For the six months ended June 30, 2025, the company repurchased a total of **138,000** shares on the Stock Exchange[230](index=230&type=chunk)[232](index=232&type=chunk) - The Board has resolved to recommend the declaration and payment of an interim dividend of **HK$0.033** per share for the six months ended June 30, 2025[242](index=242&type=chunk)[245](index=245&type=chunk) [CORPORATE GOVERNANCE PRACTICES](index=43&type=section&id=CORPORATE%20GOVERNANCE%20PRACTICES) The company generally complies with the Corporate Governance Code, with a deviation where the Chairman and CEO roles are combined, which the board believes enhances leadership consistency and efficiency - The company has complied with all code provisions and mandatory disclosure requirements of the Corporate Governance Code, except for the deviation where the roles of Chairman and Chief Executive Officer are combined and held by Mr. Wang Jun[225](index=225&type=chunk) - The Board believes that combining the roles of Chairman and Chief Executive Officer helps ensure consistent leadership within the group and maximizes the effectiveness and efficiency of overall planning and strategy execution[226](index=226&type=chunk)[228](index=228&type=chunk) [MODEL CODE FOR SECURITIES TRANSACTIONS BY DIRECTORS](index=44&type=section&id=MODEL%20CODE%20FOR%20SECURITIES%20TRANSACTIONS%20BY%20DIRECTORS) The company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers, and all directors confirmed compliance during the period - The company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers as its code of conduct for directors' dealings in the company's securities[229](index=229&type=chunk)[231](index=231&type=chunk) - Following specific enquiries made to each director, the company confirmed that all directors have complied with the required standards set out in the Model Code throughout the period[231](index=231&type=chunk) [PURCHASE, SALE OR REDEMPTION OF LISTED SECURITIES OF THE COMPANY](index=44&type=section&id=PURCHASE,%20SALE%20OR%20REDEMPTION%20OF%20LISTED%20SECURITIES%20OF%20THE%20COMPANY) During the six months ended June 30, 2025, the company repurchased 138,000 shares on the Stock Exchange for HK$150,500, which remained uncancelled at period-end - For the six months ended June 30, 2025, the company repurchased a total of **138,000** shares on the Stock Exchange[230](index=230&type=chunk)[232](index=232&type=chunk) - The total consideration paid was **HK$150,500**[233](index=233&type=chunk) - As of June 30, 2025, these **138,000** repurchased shares had not yet been cancelled[230](index=230&type=chunk) [CHANGES OF INFORMATION IN RESPECT OF DIRECTORS](index=45&type=section&id=CHANGES%20OF%20INFORMATION%20IN%20RESPECT%20OF%20DIRECTORS) Several changes in director information occurred during the period, including resignations of Mr. Shi Shushan and Ms. Dai Jiling, and appointments of Mr. Wang Jun as CEO and Mr. Guo Liyuan as Executive Director and CFO - Mr. Shi Shushan resigned as Executive Director, effective February 1, 2025[240](index=240&type=chunk) - Ms. Dai Jiling resigned as Executive Director and Chief Executive Officer, effective April 30, 2025[240](index=240&type=chunk) - Mr. Wang Jun was appointed Chief Executive Officer, effective April 30, 2025[240](index=240&type=chunk) - Mr. Guo Liyuan was appointed Executive Director and Chief Financial Officer, effective April 30, 2025[240](index=240&type=chunk) - Ms. Luo Ying resigned from all positions at GL China Equity HK Management Limited on June 30, 2025[240](index=240&type=chunk) [REVIEW OF INTERIM RESULTS BY AUDIT COMMITTEE](index=45&type=section&id=REVIEW%20OF%20INTERIM%20RESULTS%20BY%20AUDIT%20COMMITTEE) The company's Audit Committee discussed and reviewed the unaudited interim condensed consolidated financial statements for H1 2025 with management and approved the interim results - The company's Audit Committee discussed the accounting principles and policies adopted by the group with management and reviewed the group's unaudited interim condensed consolidated financial statements for the six months ended June 30, 2025[237](index=237&type=chunk)[239](index=239&type=chunk) - The Audit Committee has agreed with the company's management on the group's interim results for the period[239](index=239&type=chunk) [EVENTS AFTER THE REPORTING PERIOD](index=46&type=section&id=EVENTS%20AFTER%20THE%20REPORTING%20PERIOD) As of the report date, no significant e

[Company Information](index=2&type=section&id=%E5%85%AC%E5%8F%B8%E8%B3%87%E6%96%99) This section details the company's board, governance, legal and administrative information, and listing details [Board of Directors and Corporate Governance Structure](index=3&type=section&id=2.1%20%E8%91%A3%E4%BA%8B%E6%9C%83%E5%8F%8A%E5%85%AC%E5%8F%B8%E6%B2%BB%E7%90%86%E6%9E%B6%E6%A7%8B) This section lists the company's board members, authorized representatives, and the composition of various committees - The Chairman of the Board is **Mr. Xiang Jie**, and the Chief Executive Officer is **Mr. Gong Renyuan**[3](index=3&type=chunk) - **Mr. Gong Renyuan** resigned as a member of the Nomination Committee on **June 6, 2025**, and **Ms. Cai Ge** was appointed[3](index=3&type=chunk) - The Chairman of the Audit Committee is **Mr. Chen Shimin**, the Remuneration Committee is **Mr. Liang Mingshu**, the Nomination Committee is **Mr. Zhang Xuejun**, and the Strategy and Sustainable Development Committee is **Mr. Xiang Jie**[3](index=3&type=chunk) [Legal and Administrative Information](index=3&type=section&id=2.2%20%E6%B3%95%E5%BE%8B%E5%8F%8A%E8%A1%8C%E6%94%BF%E4%BF%A1%E6%81%AF) This section provides details on the company's legal counsel, external auditor, registered office, headquarters, and listing information - The Company Secretary is **Ms. He Lina**, legal counsel is **Loeb & Loeb LLP**, and external auditor is **Ernst & Young**[3](index=3&type=chunk) - The company is registered in the **Cayman Islands**, headquartered in **Beijing, China**, with its principal place of business in Hong Kong at **Times Square, Causeway Bay**[3](index=3&type=chunk)[4](index=4&type=chunk) - The company's shares are listed on the Main Board of The Stock Exchange of Hong Kong Limited, stock code **580**[4](index=4&type=chunk) [Chairman's Report](index=4&type=section&id=%E4%B8%BB%E5%B8%AD%E5%A0%B1%E5%91%8A) This report provides an overview of the company's performance, strategic developments, and future outlook [2025 First Half Performance Overview](index=4&type=section&id=3.1%202025%E5%B9%B4%E4%B8%8A%E5%8D%8A%E5%B9%B4%E6%A5%AD%E7%B8%BE%E6%A6%82%E8%A7%88) The group achieved significant revenue and net profit growth in H1 2025, driven by conventional and flexible DC transmission, new energy generation, and energy storage businesses 2025 First Half Key Financial Indicators | Indicator | 2025 First Half (RMB million) | Year-on-year Growth Rate | | :--- | :--- | :--- | | Revenue | 888.3 | 35.5% | | Net Profit Attributable to Parent Company | 93.8 | 178.3% | - Revenue in the flexible DC transmission sector increased by **approximately 123%** year-on-year, primarily due to the delivery of products for projects such as the **Saudi Central-South ±500kV Flexible DC Transmission Converter Station** and the **Gansu-Zhejiang ±800kV UHVDC Transmission Project**[6](index=6&type=chunk) - Delivery volume in the conventional DC transmission sector decreased compared to H1 2024, but the **Southeast Tibet to Guangdong-Hong Kong-Macao Greater Bay Area** and **Inner Mongolia West to Beijing-Tianjin-Hebei UHVDC Transmission Projects** have been approved, expected to drive demand for power electronic devices[6](index=6&type=chunk) [Power Semiconductor Business Development](index=4&type=section&id=3.2%20%E5%8A%9F%E7%8E%87%E5%8D%8A%E5%B0%8E%E9%AB%94%E6%A5%AD%E5%8B%99%E7%99%BC%E5%B1%95) The group's self-developed power semiconductor business saw substantial revenue growth, enhancing R&D capabilities and supply chain security through an acquisition 2025 First Half Power Semiconductor Revenue | Indicator | 2025 First Half (RMB million) | Year-on-year Growth Rate | | :--- | :--- | :--- | | Self-developed Power Semiconductor Revenue | 53.1 | 231.4% | - New products include the **i23 series 7th generation IGBT chips** and multiple **IGBT modules**, enriching product variety and expanding market coverage[7](index=7&type=chunk) - Saichim Power Semiconductor will acquire **100% equity of Hunan Hongan Microelectronics Co., Ltd.**, to be paid by issuing new registered capital representing **approximately 9.00%**, which will enhance R&D capabilities, supply chain security, and reduce costs[7](index=7&type=chunk) [Outlook and Appreciation](index=4&type=section&id=3.3%20%E5%B1%95%E6%9C%9B%E8%88%87%E8%87%B4%E8%AC%9D) The group plans to continue delivering existing orders, secure new UHVDC projects, and expand power semiconductor R&D and market presence in emerging sectors - In the second half, the group will continue to deliver products for projects such as the **Shaanxi-Anhui Project**, **Saudi Central-South Project**, and **Gansu-Zhejiang Power Transmission Project**[8](index=8&type=chunk) - The group aims to secure new orders in bids for the **Southeast Tibet Project**, **Inner Mongolia West to Beijing-Tianjin-Hebei Project**, and other newly approved **UHVDC projects**[8](index=8&type=chunk) - The group will continue to intensify R&D and market expansion for self-developed power semiconductor products, focusing on emerging fields such as **electrified vessels** and **controlled nuclear fusion**[8](index=8&type=chunk) [Management Discussion and Analysis](index=5&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%A4%E8%A8%8E%E8%AB%96%E5%8F%8A%E5%88%86%E6%9E%90) This section provides a detailed review of the group's operational and financial performance, including market segment analysis, financial position, and future outlook [Business Review](index=5&type=section&id=4.1%20%E4%B8%9A%E5%8A%A1%E5%9B%9E%E9%A1%B5) The group's total revenue increased by 35.5% to RMB 888.3 million in H1 2025, but the average gross profit margin declined, with the domestic market and power transmission remaining key contributors 2025 First Half Domestic and Overseas Market Performance | Market | 2025 Revenue (RMB thousand) | 2025 Gross Profit Margin | 2024 Revenue (RMB thousand) | 2024 Gross Profit Margin | | :--- | :--- | :--- | :--- | :--- | | Domestic Market | 845,968 | 24.7% | 617,047 | 35.1% | | Overseas Market | 42,352 | 47.4% | 38,711 | 46.9% | | Total | 888,320 | 25.8% | 655,758 | 35.8% | - Total revenue increased by **35.5%** year-on-year, but the average gross profit margin decreased from **35.8% to 25.8%**, primarily due to a reduced proportion of high-margin products[11](index=11&type=chunk)[26](index=26&type=chunk) [Domestic Market Performance](index=5&type=section&id=4.1.1%20%E5%9B%BD%E5%86%85%E5%B8%82%E5%9C%BA%E4%B8%9A%E7%BB%A9) Domestic market revenue grew by 36.9%, with power transmission remaining core, while electrified transportation declined and industrial and other sectors saw significant growth 2025 First Half Domestic Market Performance by Application Sector | Application Sector | 2025 Revenue (RMB thousand) | 2025 Gross Profit Margin | 2024 Revenue (RMB thousand) | 2024 Gross Profit Margin | | :--- | :--- | :--- | :--- | :--- | | Power Transmission and Distribution | 466,654 | 35.4% | 358,098 | 47.8% | | Electrified Transportation | 23,641 | 15.6% | 31,840 | 23.1% | | Industrial and Other | 355,673 | 11.3% | 227,109 | 16.7% | | Total | 845,968 | 24.7% | 617,047 | 35.1% | - The revenue share of the power transmission and distribution sector decreased from **58% to 55%**, electrified transportation from **5% to 3%**, and industrial and other sectors increased from **37% to 42%**[13](index=13&type=chunk)[14](index=14&type=chunk) [Power Transmission and Distribution Sector](index=6&type=section&id=4.1.1.1%20%E8%BE%93%E9%85%8D%E7%94%B5%E9%A2%86%E5%9F%9F) Revenue in the power transmission and distribution sector increased by 30%, driven by a 123% surge in flexible DC transmission, despite a 39% decrease in conventional DC transmission 2025 First Half Power Transmission and Distribution Sector Performance | Sub-sector | 2025 Revenue (RMB thousand) | 2024 Revenue (RMB thousand) | Change | | :--- | :--- | :--- | :--- | | Power Transmission and Distribution Sector | 466,654 | 358,098 | 30% | | Conventional DC Transmission | 89,205 | 146,945 | -39% | | Flexible DC Transmission | 295,960 | 132,914 | 123% | | Other Power Transmission and Distribution | 81,489 | 78,239 | 4% | - Flexible DC transmission revenue growth was primarily due to order deliveries for the **Saudi Central-South Project**, **Gansu-Zhejiang Power Transmission Project**, and **Peru/Chile Project**[16](index=16&type=chunk) - Conventional DC transmission revenue decreased mainly due to fewer order products delivered compared to the prior period in 2024[16](index=16&type=chunk) [Electrified Transportation Sector](index=7&type=section&id=4.1.1.2%20%E7%94%B5%E6%B0%94%E5%8C%96%E4%BA%A4%E9%80%9A%E9%A2%86%E5%9F%9F) Revenue in the electrified transportation sector decreased by 26%, primarily due to significant declines in rail transit and electric vehicle businesses, though other transportation areas doubled 2025 First Half Electrified Transportation Sector Performance | Sub-sector | 2025 Revenue (RMB thousand) | 2024 Revenue (RMB thousand) | Change | | :--- | :--- | :--- | :--- | | Electrified Transportation | 23,641 | 31,840 | -26% | | Rail Transit | 17,532 | 27,712 | -37% | | Electric Vehicles | 44 | 1,097 | -96% | | Other Transportation | 6,065 | 3,031 | 100% | - Rail transit revenue decreased by **37%**, mainly due to reduced orders from rolling stock manufacturers; electric vehicle revenue decreased by **96%**, primarily due to fewer industry orders[19](index=19&type=chunk) - Other transportation revenue increased by **100%**, mainly due to increased orders in the electrified vessel industry[19](index=19&type=chunk) [Industrial and Other Sectors](index=7&type=section&id=4.1.1.3%20%E5%B7%A5%E4%B8%9A%E5%8F%8A%E5%85%B6%E4%BB%96%E9%A2%86%E5%9F%9F) Revenue in the industrial and other sectors surged by 57%, driven by increased sales of self-developed power semiconductors and the scaling of new energy power station construction 2025 First Half Industrial and Other Sectors Performance | Sub-sector | 2025 Revenue (RMB thousand) | 2024 Revenue (RMB thousand) | Change | | :--- | :--- | :--- | :--- | | Industrial and Other | 355,673 | 227,109 | 57% | | Industrial Control | 196,368 | 151,130 | 30% | | New Energy Generation and Storage | 156,382 | 75,345 | 108% | | Research Institutes and Other | 2,923 | 634 | 361% | - New energy generation and storage revenue increased by **108%**, and research institutes and other revenue increased by **361%**[20](index=20&type=chunk) - Revenue growth was primarily due to increased sales of self-developed power semiconductors, laminated busbars, and DC-link capacitors, as well as higher revenue from new energy power station construction-related businesses[21](index=21&type=chunk) [Overseas Market Performance](index=8&type=section&id=4.1.2%20%E5%9B%BD%E5%A4%96%E5%B8%82%E5%9C%BA%E4%B8%9A%E7%BB%A9) Overseas market revenue increased by 9%, primarily due to higher sales of laminated busbars, DC-link capacitors, and solid-state DC circuit breakers 2025 First Half Overseas Market Performance | Category | 2025 Revenue (RMB thousand) | 2024 Revenue (RMB thousand) | Change | | :--- | :--- | :--- | :--- | | Overseas Market | 42,352 | 38,711 | 9% | | Domestic Subsidiary Products | 4,916 | 2,595 | 89% | | Overseas Subsidiary Products | 37,436 | 36,116 | 4% | - Domestic subsidiary product revenue in overseas markets increased by **89%**, while overseas subsidiary product revenue increased by **4%**[23](index=23&type=chunk) [Financial Review](index=8&type=section&id=4.2%20%E8%B4%A2%E5%8A%A1%E5%9B%9E%E9%A1%B5) The group's H1 2025 revenue grew by 35.5%, but gross margin declined due to a lower proportion of high-margin products, while profit before tax and profit attributable to owners significantly increased, mainly from other income and gains 2025 First Half Key Financial Indicators Changes | Indicator | 2025 First Half (RMB million) | 2024 First Half (RMB million) | Change Rate | | :--- | :--- | :--- | :--- | | Revenue | 888.3 | 655.8 | 35.5% | | Cost of Sales | 659.1 | 421.0 | 56.6% | | Gross Profit | 229.3 | 234.8 | -2.3% | | Gross Profit Margin | 25.8% | 35.8% | -10.0pp | | Other Income and Gains | 130.7 | 34.3 | 281.0% | | Selling and Distribution Costs | 60.9 | 47.9 | 27.1% | | Administrative Expenses | 106.1 | 83.7 | 26.8% | | Research and Development Costs | 67.9 | 67.8 | 0.1% | | Other Expenses and Losses | 3.5 | 24.9 | -85.9% | | Finance Costs | 8.8 | 8.5 | 3.5% | | Profit Before Tax | 112.8 | 36.3 | 210.7% | | Income Tax Expense | 27.3 | 15.4 | 77.3% | | Profit Attributable to Owners of Parent | 93.8 | 33.7 | 178.3% | | Net Profit Margin | 10.6% | 5.1% | +5.5pp | - Other income and gains significantly increased by **281.0%**, primarily due to fair value gains on forward foreign exchange contracts and exchange gains[27](index=27&type=chunk) - Other expenses and losses decreased by **85.9%**, mainly due to exchange rate fluctuations[32](index=32&type=chunk) [Balance Sheet Analysis](index=9&type=section&id=4.2.1%20%E8%B5%84%E4%BA%A7%E8%B4%9F%E5%80%BA%E8%A1%A8%E5%88%86%E6%9E%90) The group's inventory and trade receivables and bills decreased, with shorter turnover days, indicating improved operational efficiency, while trade payables and bills slightly increased 2025 First Half Balance Sheet Key Indicators | Indicator | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | Change Rate | | :--- | :--- | :--- | :--- | | Inventory | 253.9 | 289.9 | -12.4% | | Average Inventory Turnover Days | 82 days | 94 days | -12 days | | Trade and Bills Receivables | 1,147.1 | 1,161.2 | -1.2% | | Average Turnover Days | 204 days | 233 days | -29 days | | Trade and Bills Payables | 434.0 | 416.7 | 4.2% | | Average Turnover Days | 116 days | 120 days | -4 days | [Liquidity and Financial Resources](index=10&type=section&id=4.2.2%20%E6%B5%81%E5%8A%A8%E8%B5%84%E9%87%91%E5%8F%8A%E8%B4%A2%E5%8A%A1%E8%B5%84%E6%BA%90) The group's current ratio remained stable, cash and cash equivalents increased, interest-bearing bank and other borrowings decreased, and the gearing ratio declined, indicating a solid financial position 2025 First Half Liquidity and Financial Resources | Indicator | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | Change Rate | | :--- | :--- | :--- | :--- | | Current Ratio | approx. 2.2 | approx. 2.2 | Stable | | Cash and Cash Equivalents | 454.7 | 415.5 | 9.4% | | Interest-bearing Bank and Other Borrowings | 285.3 | 299.3 | -4.7% | | Gearing Ratio | 13.9% | 15.0% | -1.1pp | - The group continues to implement prudent financial management policies and monitors its capital structure based on the ratio of total liabilities to total assets[42](index=42&type=chunk) [Foreign Currency Risk and Contingent Liabilities](index=10&type=section&id=4.2.3%20%E5%A4%96%E5%B8%81%E9%A3%8E%E9%99%A9%E4%B8%8E%E6%88%96%E7%84%B6%E8%B4%9F%E5%80%BA) The group manages transactional currency risk through forward currency contracts and had no significant contingent liabilities at the end of the reporting period - The group's primary functional currency is **RMB**, and it hedges exchange rate risk through forward currency contracts[43](index=43&type=chunk) - As of **June 30, 2025**, the group had no significant contingent liabilities[44](index=44&type=chunk) [Pledge of Group Assets and Major Investment Plans](index=10&type=section&id=4.2.4%20%E9%9B%86%E5%9B%A2%E8%B5%84%E4%BA%A7%E6%8A%B5%E6%8A%BC%E5%8F%8A%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B5%84%E8%AE%A1%E5%88%92) The group's certain bills payable and bank loans are secured by bills receivable, land use rights, and property, plant, and equipment, with no major investment plans during the period - Bills payable of approximately **RMB 50.1 million** are secured by bills receivable of approximately **RMB 50.1 million**[45](index=45&type=chunk) - Bank loans of **RMB 78.7 million** are secured by land use rights and property, plant, and equipment[45](index=45&type=chunk) - For the six months ended **June 30, 2025**, the group held no significant investments and made no material acquisitions or disposals of subsidiaries, associates, or joint ventures[46](index=46&type=chunk) [Events After Reporting Period](index=11&type=section&id=4.3%20%E6%8A%A5%E5%91%8A%E6%9C%9F%E5%90%8E%E4%BA%8B%E9%A1%B9) Subsequent to the reporting period, Saichim Power Semiconductor signed an capital increase agreement and equity transfer agreement to acquire Hunan Hongan Microelectronics, which will dilute the company's equity interest in Saichim Power Semiconductor - Saichim Power Semiconductor will issue new registered capital, which investors will subscribe for a total consideration of **RMB 180,000,000**, representing approximately **9.00%** of Saichim Power Semiconductor's enlarged equity[48](index=48&type=chunk) - The subscription price will be satisfied by the investors transferring **100% equity of Hunan Hongan Microelectronics Co., Ltd.** to Saichim Power Semiconductor[48](index=48&type=chunk) - Upon completion of the transaction, the company's equity interest in Saichim Power Semiconductor will decrease from **approximately 70.5406% to approximately 64.1918%** on an enlarged basis[48](index=48&type=chunk) [Human Resources](index=11&type=section&id=4.4%20%E4%BA%BA%E5%8A%9B%E8%B5%84%E6%BA%90) As of June 30, 2025, the group had 1,066 employees, offering competitive compensation, benefits, and training programs, while maintaining good employee relations - As of **June 30, 2025**, the group had a total of **1,066 employees**[50](index=50&type=chunk) - The remuneration package includes basic salaries, medical insurance, discretionary cash bonuses, and retirement benefit schemes, with employees eligible to participate in the **2020 Share Option Scheme**[50](index=50&type=chunk) - The group focuses on establishing an internal management training and development system, enhancing employee skills through diversified training models[50](index=50&type=chunk) [Outlook](index=11&type=section&id=4.5%20%E5%B1%95%E6%9C%9B) The group will continue to deliver existing transmission project orders, actively pursue new UHVDC project bids, and intensify R&D and market expansion for power semiconductor products in emerging fields - In the second half, the group will continue to advance the delivery of products for multiple conventional and flexible DC transmission projects, including the **Shaanxi-Anhui Project**, **Saudi Central-South Project**, and **Gansu-Zhejiang Power Transmission Project**[51](index=51&type=chunk) - The group aims to secure new orders in bids for the **Southeast Tibet Project**, **Inner Mongolia West to Beijing-Tianjin-Hebei Project**, and other newly approved **UHVDC projects**[51](index=51&type=chunk) - The group will continue to intensify R&D and market expansion for self-developed power semiconductor products, focusing on pioneering advanced technologies such as **solid-state switches** and **pulsed power switches** in emerging fields like **electrified vessels** and **controlled nuclear fusion**[51](index=51&type=chunk) [Share Repurchases](index=11&type=section&id=4.6%20%E8%82%A1%E4%BB%BD%E5%9B%9E%E8%B4%AD) The company repurchased 1,296,000 shares in H1 2025 for approximately HK$1,524,145, aiming to enhance market price per share and improve investor confidence 2025 First Half Share Repurchase Details | Repurchase Month | Number of Shares Repurchased | Highest Purchase Price Per Share (HKD) | Lowest Purchase Price Per Share (HKD) | Purchase Price Paid (Approximate, HKD) | | :--- | :--- | :--- | :--- | :--- | | January | 240,000 | 1.33 | 1.28 | 314,862 | | March | 440,000 | 1.29 | 1.19 | 555,096 | | April | 616,000 | 1.17 | 1.00 | 654,187 | | Total | 1,296,000 | | | 1,524,145 | - Repurchased shares are held as **treasury shares**, and the company will not exercise shareholder rights or receive any benefits from them[53](index=53&type=chunk) - All repurchases were for the overall benefit of the company and its shareholders, aiming to enhance the **market price per share** and improve **investor confidence**[54](index=54&type=chunk) [Corporate Governance](index=12&type=section&id=4.7%20%E4%BC%81%E4%B8%9A%E7%AE%A1%E6%B2%BB) The company prioritizes corporate governance, adhering to the Listing Rules' Corporate Governance Code, with the audit committee reviewing interim financial statements - The company has adopted the **Corporate Governance Code** set out in Appendix C1 of the Listing Rules and complied with the applicable code provisions in **H1 2025**[55](index=55&type=chunk) - The Board has confirmed that all directors complied with the **Model Code for Securities Transactions by Directors** set out in Appendix C3 of the Listing Rules throughout **H1 2025**[56](index=56&type=chunk) - The Audit Committee, together with management, reviewed the accounting principles and practices adopted by the group and discussed matters related to **audit, risk management, internal control, and financial reporting**[57](index=57&type=chunk) [Dividend Policy](index=12&type=section&id=4.8%20%E8%82%A1%E6%81%AF%E6%94%BF%E7%AD%96) The Board resolved to declare an interim dividend of HK$0.01 per share for H1 2025, totaling approximately HK$15,933,980, payable around October 22, 2025 - The Board resolved to declare an interim dividend of **HK$0.01 per share** for the six months ended **June 30, 2025** (H1 2024: nil)[58](index=58&type=chunk) - The dividend will be paid from the company's **share premium account** and is expected to be paid on or about **October 22, 2025**[58](index=58&type=chunk) - The total amount to be absorbed is estimated at **HK$15,933,980**[58](index=58&type=chunk) [Changes in Shareholdings of Directors and Chief Executive](index=13&type=section&id=4.9%20%E8%91%A3%E4%BA%8B%E5%8F%8A%E4%B8%BB%E8%A6%81%E8%A1%8C%E6%94%BF%E4%BA%BA%E5%91%98%E6%8C%81%E8%82%A1%E5%8F%98%E5%8A%A8) As of June 30, 2025, the company's directors and chief executive held long positions in company shares, with Mr. Xiang Jie holding the largest proportion June 30, 2025 Long Positions in Shares of Directors and Chief Executive | Director Name | Nature of Interest | Number of Ordinary Shares Held | Number of Ordinary Shares Issuable from Equity Derivatives | Total | Approximate Percentage of Company's Equity | | :--- | :--- | :--- | :--- | :--- | :--- | | Mr. Xiang Jie | Beneficial Owner | 51,666,000 | – | 51,666,000 | | | | Founder of Discretionary Trust | 338,328,347 | – | 338,328,347 | | | | | | | 389,994,347 | 24.32% | | Mr. Gong Renyuan | Beneficial Owner | 15,060,000 | 10,000,000 | 25,060,000 | | | | Spouse's Interest | 4,300,000 | 4,000,000 | 8,300,000 | | | | | | | 33,360,000 | 2.08% | | Mr. Yue Zhoumin | Beneficial Owner | 2,000,000 | 5,000,000 | 7,000,000 | 0.44% | - **Mr. Chen Shimin** and **Mr. Liang Mingshu** no longer serve as independent non-executive directors of other HKEX-listed companies[60](index=60&type=chunk) - As of **June 30, 2025**, none of the directors or chief executive had any short positions in the shares, underlying shares, or debentures of the company or any associated corporation[62](index=62&type=chunk) [Changes in Shareholdings of Substantial Shareholders](index=14&type=section&id=4.10%20%E4%B8%BB%E8%A6%81%E8%82%A1%E4%B8%9C%E6%8C%81%E8%82%A1%E5%8F%98%E5%8A%A8) As of June 30, 2025, Max Vision Holdings Limited and its affiliates were substantial shareholders holding long positions, with Ms. Meng Fankun also holding shares through spousal interest and trust beneficiary status June 30, 2025 Long Positions in Shares of Substantial Shareholders | Substantial Shareholder Name/Entity | Nature of Interest | Number of Ordinary Shares Held | Approximate Percentage of Company's Equity | | :--- | :--- | :--- | :--- | | Max Vision Holdings Limited | Beneficial Owner | 338,328,347 | 21.09% | | Jiekun Limited | Interest in Controlled Corporation | 338,328,347 | 21.09% | | Sapphire Skye Holdings Limited | Interest in Controlled Corporation | 338,328,347 | 21.09% | | Zedra Trust Company (Singapore) Limited | Interest in Controlled Corporation | 338,328,347 | 21.09% | | Ms. Meng Fankun | Spouse's Interest | 51,666,000 | | | | Beneficiary of Trust | 338,328,347 | | | | | 389,994,347 | 24.32% | - **Max Vision Holdings Limited** is wholly owned by **Jiekun Limited**, which is wholly owned by **Sapphire Skye Holdings Limited**, which is wholly owned by **Zedra Trust Company (Singapore) Limited**, the trustee of a private trust established by **Mr. Xiang Jie**[65](index=65&type=chunk) - **Ms. Meng Fankun** is deemed to have an interest due to her spouse, **Mr. Xiang Jie**, holding shares[65](index=65&type=chunk) [Share Option Schemes](index=15&type=section&id=4.11%20%E8%B4%AD%E8%82%A1%E6%9D%83%E8%AE%A1%E5%88%92) The company operates two share option schemes to incentivize eligible participants; in H1 2025, no options were exercised under the 2010 scheme, and a proposed grant to Mr. Xiang Jie under the 2020 scheme was not approved by shareholders - The **2010 Share Option Scheme** terminated on **June 3, 2020**, but options granted before termination remain exercisable[66](index=66&type=chunk) 2010 Share Option Scheme Movements (As of June 30, 2025) | Grantee | Unexercised as of January 1, 2025 | Granted During Period | Exercised During Period | Cancelled During Period | Lapsed During Period | Unexercised as of June 30, 2025 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Employees | 5,120,000 | – | – | – | – | 5,120,000 | - The **2020 Share Option Scheme** aims to grant options to eligible participants including employees, non-executive directors, suppliers, customers, R&D supporters, shareholders, and consultants[70](index=70&type=chunk)[72](index=72&type=chunk) - The resolution for **Mr. Xiang Jie** to be granted **20,000,000 share options** was not approved at the **2025 Annual General Meeting**, thus no options were granted to him[75](index=75&type=chunk) - The company intends to re-grant **Mr. Xiang Jie** share options to subscribe for up to **20,000,000 shares**, subject to separate approval at an extraordinary general meeting[76](index=76&type=chunk) [Independent Review Report](index=18&type=section&id=%E7%8D%A8%E7%AB%8B%E5%AF%A9%E9%96%B1%E5%A0%B1%E5%91%8A) Ernst & Young reviewed the interim financial information in accordance with HKSRS 2410 and found no material matters, concluding it was prepared in all material respects according to IAS 34 [Scope of Review and Conclusion](index=19&type=section&id=5.1%20%E5%AF%A9%E9%96%B1%E7%AF%84%E5%9C%8D%E8%88%87%E7%B5%90%E8%AB%96) The auditor reviewed the interim financial information, including the condensed consolidated financial statements, and found no matters suggesting non-compliance with IAS 34 - The auditor has completed the review of the interim financial information on pages **19 to 34**, including the condensed consolidated statement of financial position, statement of profit or loss and other comprehensive income, statement of changes in equity, and statement of cash flows[78](index=78&type=chunk) - The scope of review is substantially less than an audit, and therefore the auditor does not express an audit opinion[79](index=79&type=chunk) - Based on the review, the auditor has not noted any matters that cause them to believe the interim financial information is not prepared, in all material respects, in accordance with **International Accounting Standard 34**[80](index=80&type=chunk) [Condensed Consolidated Interim Financial Statements](index=19&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8) This section presents the group's condensed consolidated interim financial statements, including the statement of profit or loss, financial position, changes in equity, and cash flows [Condensed Consolidated Interim Statement of Profit or Loss and Other Comprehensive Income](index=19&type=section&id=6.1%20%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%90%8D%E7%9B%8A%E5%8F%8A%E5%85%B6%E4%BB%96%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) For H1 2025, the group's revenue grew by 35.5% to RMB 888.3 million, with profit for the period significantly increasing to RMB 85.47 million and profit attributable to owners rising by 178.3% to RMB 93.77 million 2025 First Half Profit or Loss and Other Comprehensive Income Overview | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Revenue | 888,320 | 655,758 | | Gross Profit | 229,254 | 234,784 | | Other Income and Gains | 130,747 | 34,335 | | Profit Before Tax | 112,808 | 36,349 | | Profit for the Period | 85,470 | 20,933 | | Profit Attributable to Owners of Parent | 93,773 | 33,722 | | Basic Earnings Per Share | RMB 5.85 cents | RMB 2.09 cents | - Total other comprehensive income/(loss) was **RMB (14,691) thousand**, primarily impacted by exchange differences on translation of overseas operations[82](index=82&type=chunk) [Condensed Consolidated Interim Statement of Financial Position](index=21&type=section&id=6.2%20%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) As of June 30, 2025, the group's total assets less current liabilities were RMB 2,150.16 million, with net assets of RMB 2,057.99 million, showing an increase in net current assets and slight decreases in inventory and trade receivables June 30, 2025 Financial Position Overview | Indicator | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Total Non-current Assets | 1,030,009 | 1,012,660 | | Total Current Assets | 2,040,579 | 2,022,187 | | Total Current Liabilities | 920,425 | 935,050 | | Net Current Assets | 1,120,154 | 1,087,137 | | Net Assets | 2,057,990 | 1,995,956 | | Total Equity | 2,057,990 | 1,995,956 | - Cash and cash equivalents increased from approximately **RMB 415.5 million** as of **December 31, 2024**, to approximately **RMB 454.7 million** as of **June 30, 2025**[84](index=84&type=chunk) - Trade and bills receivables decreased from approximately **RMB 1,161.2 million** as of **December 31, 2024**, to approximately **RMB 1,147.1 million** as of **June 30, 2025**[84](index=84&type=chunk) [Condensed Consolidated Interim Statement of Changes in Equity](index=23&type=section&id=6.3%20%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%AC%8A%E7%9B%8A%E8%AE%8A%E5%8B%95%E8%A1%A8) For H1 2025, the group's total equity increased from RMB 1,995.96 million to RMB 2,057.99 million, primarily influenced by profit for the period and share-based payment expenses 2025 First Half Equity Changes Overview | Equity Item | January 1, 2025 (RMB thousand) | Profit for the Period (RMB thousand) | Total Comprehensive Income for the Period (RMB thousand) | Share Repurchases (RMB thousand) | Dividends Declared (RMB thousand) | Share-based Payments (RMB thousand) | June 30, 2025 (RMB thousand) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Equity Attributable to Owners of Parent | 1,924,376 | 93,773 | 82,452 | (1,409) | (14,530) | 6,794 | 1,997,983 | | Non-controlling Interests | 71,580 | (8,303) | (11,673) | – | – | – | 60,007 | | Total Equity | 1,995,956 | 85,470 | 70,779 | (1,409) | (14,530) | 6,794 | 2,057,990 | - Fair value loss on investments at fair value through other comprehensive income for the period was **RMB (2,730) thousand**, and exchange differences on translation of overseas operations were **RMB (8,591) thousand**[87](index=87&type=chunk) [Condensed Consolidated Interim Statement of Cash Flows](index=24&type=section&id=6.4%20%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E7%8F%BE%E9%87%91%E6%B5%81%E9%87%8F%E8%A1%A8) For H1 2025, net cash from operating activities was RMB 85.88 million, net cash used in investing activities was RMB (20.23) million, net cash used in financing activities was RMB (31.99) million, and cash and cash equivalents at period-end were RMB 454.69 million 2025 First Half Cash Flow Overview | Cash Flow Category | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Net Cash From/(Used In) Operating Activities | 85,881 | (231,324) | | Net Cash Used In Investing Activities | (20,225) | (84,118) | | Net Cash Used In Financing Activities | (31,987) | (19,124) | | Net Increase/(Decrease) in Cash and Cash Equivalents | 33,669 | (334,566) | | Cash and Cash Equivalents at End of Period | 454,691 | 463,093 | - Net cash from operating activities turned positive from a negative value in the prior period of 2024, indicating improved operating conditions[91](index=91&type=chunk) - Net cash used in investing activities decreased, primarily due to reduced expenditure on the purchase of financial investments[91](index=91&type=chunk) [Notes to the Condensed Consolidated Interim Financial Information](index=26&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E8%B3%87%E6%96%99%E9%99%84%E8%A8%BB) This section provides detailed notes to the condensed consolidated interim financial information, covering company details, basis of preparation, accounting policy changes, segment information, and financial instrument fair values [Company Information (Note 1)](index=26&type=section&id=7.1%20%E5%85%AC%E5%8F%B8%E8%B5%84%E6%96%99%20(%E9%99%84%E6%B3%A81)) The company was incorporated in the Cayman Islands and listed on the Hong Kong Stock Exchange, with its principal business being the trading and manufacturing of power electronic components - The company was incorporated in the **Cayman Islands** as an exempted company with limited liability on **March 19, 2010**[92](index=92&type=chunk) - The group's principal activities are the trading and manufacturing of **power electronic components**[93](index=93&type=chunk) - The condensed consolidated interim financial information is presented in **RMB**[94](index=94&type=chunk) [Basis of Preparation (Note 2)](index=26&type=section&id=7.2%20%E7%BC%96%E5%88%B6%E5%9F%BA%E5%87%86%20(%E9%99%84%E6%B3%A82)) The condensed consolidated interim financial information is prepared in accordance with IAS 34 and should be read in conjunction with the group's annual consolidated financial statements for the year ended December 31, 2024 - The condensed consolidated interim financial information is prepared in accordance with **International Accounting Standard 34 "Interim Financial Reporting"** issued by the International Accounting Standards Board[95](index=95&type=chunk) [Changes in Accounting Policies (Note 3)](index=26&type=section&id=7.3%20%E4%BC%9A%E8%AE%A1%E6%94%BF%E7%AD%96%E7%9A%84%E5%8F%98%E5%8A%A8%20(%E9%99%84%E6%B3%A83)) The revised IAS 21 (Amendment) "Lack of Exchangeability" was adopted for the first time this period but had no impact on the financial information as the group's transactional and functional currencies are convertible - The revised **International Financial Reporting Standard, IAS 21 (Amendment) "Lack of Exchangeability"**, was adopted for the first time in the current period[96](index=96&type=chunk)[97](index=97&type=chunk) - This amendment had no impact on the condensed consolidated interim financial information, as the currencies in which the group conducts transactions and the functional currencies used by group entities for translation into the group's presentation currency are convertible[97](index=97&type=chunk) [Operating Segment Information (Note 4)](index=26&type=section&id=7.4%20%E7%BB%8F%E8%90%A5%E5%88%86%E9%83%A8%E8%B5%84%E6%96%99%20(%E9%99%84%E6%B3%A84)) The group has one reportable operating segment, primarily engaged in manufacturing and trading power electronic components, with over 95% of revenue and all non-current assets attributable to mainland China - The group has established one reportable operating segment, primarily engaged in the manufacturing and trading of **power electronic components**[98](index=98&type=chunk) - Over **95%** of the group's revenue is attributable to customers located in **mainland China**, and all non-current assets are located in **mainland China**[99](index=99&type=chunk) [Revenue, Other Income and Gains (Note 5)](index=27&type=section&id=7.5%20%E6%94%B6%E5%85%A5%E3%80%81%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5%E5%8F%8A%E6%94%B6%E7%9B%8A%20(%E9%99%84%E6%B3%A85)) The group's H1 2025 revenue from customer contracts was RMB 888.32 million, with other income and gains significantly increasing to RMB 130.75 million, mainly due to government grants, exchange gains, and fair value gains on forward foreign exchange contracts 2025 First Half Revenue, Other Income and Gains | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Revenue from Customer Contracts (Sales of Power Electronic Components) | 888,320 | 655,758 | | Other Income (Government Grants, Bank Interest, etc.) | 38,462 | 33,013 | | Gains (Net Exchange Gains, Net Fair Value Gains on Forward Foreign Exchange Contracts, etc.) | 92,285 | 1,322 | | Total | 130,747 | 34,335 | - Government grants increased from **RMB 20,348 thousand** to **RMB 33,270 thousand**[100](index=100&type=chunk) - Net exchange gains were **RMB 31,342 thousand**, and net fair value gains on forward foreign exchange contracts were **RMB 59,939 thousand**, significantly contributing to other gains[100](index=100&type=chunk) [Profit Before Tax (Note 6)](index=28&type=section&id=7.6%20%E9%99%A4%E7%A8%8E%E5%89%8D%E6%BA%A2%E5%88%A9%20(%E9%99%84%E6%B3%A86)) The group's H1 2025 profit before tax was RMB 112.81 million, a significant increase from the prior period, primarily due to favorable movements in fair value of forward foreign exchange contracts and exchange gains 2025 First Half Key Adjustments to Profit Before Tax | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Cost of Inventories Sold | 659,985 | 420,321 | | Depreciation of Property, Plant and Equipment | 26,187 | 21,413 | | Depreciation of Right-of-use Assets | 3,067 | 2,580 | | Amortisation of Deferred Development Costs | 4,617 | 4,200 | | Net Impairment Loss on Trade Receivables and Contract Assets | 3,118 | 1,622 | | Net Fair Value Loss on Forward Foreign Exchange Contracts | – | 10,648 | | Net Exchange Losses | – | 11,366 | - In H1 2025, net fair value loss on forward foreign exchange contracts and net exchange losses were both **zero**, compared to significant losses in H1 2024, which positively impacted profit before tax[101](index=101&type=chunk) [Finance Costs (Note 7)](index=28&type=section&id=7.7%20%E8%9E%8D%E8%B5%84%E6%88%90%E6%9C%AC%20(%E9%99%84%E6%B3%A87)) The group's H1 2025 finance costs were RMB 8.84 million, a slight increase from the prior period, mainly comprising interest on bank and other loans 2025 First Half Finance Costs Composition | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Interest on Bank Loans | 4,471 | 4,130 | | Interest on Other Loans | 4,241 | 4,265 | | Interest on Lease Liabilities | 123 | 146 | | Total | 8,835 | 8,541 | [Income Tax (Note 8)](index=29&type=section&id=7.8%20%E6%89%80%E5%BE%97%E7%A8%8E%20(%E9%99%84%E6%B3%A88)) The group's H1 2025 income tax expense was RMB 27.34 million, a 77.3% increase year-on-year, primarily due to increased revenue, with varying corporate income tax rates applied to subsidiaries 2025 First Half Income Tax Expense Composition | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Current (Mainland China) | 17,802 | 15,837 | | Current (Europe) | 133 | 308 | | Deferred | 9,456 | (616) | | Total Tax Expense for the Period | 27,338 | 15,416 | - The corporate income tax rate in **mainland China is 25%**, and for high-tech enterprises, it is **15%**[103](index=103&type=chunk) - Subsidiaries in **Switzerland, Germany, and the Netherlands** pay local corporate tax at rates of approximately **18%, 32%, and 25.8%**, respectively[103](index=103&type=chunk) [Dividends (Note 9)](index=29&type=section&id=7.9%20%E8%82%A1%E6%81%AF%20(%E9%99%84%E6%B3%A89)) The Board declared an interim dividend of HK$0.01 per ordinary share on August 22, 2025, totaling approximately RMB 14.53 million - The Board declared an interim dividend of **HK$0.01 per ordinary share** (H1 2024: nil)[105](index=105&type=chunk) - The total interim dividend amounts to approximately **RMB 14,531,000**[105](index=105&type=chunk) [Earnings Per Share Attributable to Ordinary Equity Holders of the Parent (Note 10)](index=30&type=section&id=7.10%20%E6%AF%8D%E5%85%AC%E5%8F%B8%E6%99%AE%E9%80%9A%E8%82%A1%E6%9D%83%E6%8C%81%E6%9C%89%E4%BA%BA%E5%BA%94%E5%8D%A0%E6%AF%8F%E8%82%A1%E7%9B%88%E5%88%A9%20(%E9%99%84%E6%B3%A810)) The group's H1 2025 basic and diluted earnings per share were both RMB 5.85 cents, a significant increase from RMB 2.09 cents in the prior period 2025 First Half Earnings Per Share | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Profit Attributable to Ordinary Equity Holders of Parent | 93,773 | 33,722 | | Basic Earnings Per Share | RMB 5.85 cents | RMB 2.09 cents | | Diluted Earnings Per Share | RMB 5.85 cents | RMB 2.09 cents | - The weighted average number of ordinary shares outstanding for calculating basic earnings per share for the period was **1,603,302,772 shares**[107](index=107&type=chunk) - The dilutive effect of share options resulted in an increase of **643,752 shares** in the weighted average number of ordinary shares[107](index=107&type=chunk) [Property, Plant and Equipment (Note 11)](index=30&type=section&id=7.11%20%E7%89%A9%E4%B8%9A%E3%80%81%E5%8E%82%E6%88%BF%E5%8F%8A%E8%AE%BE%E5%A4%87%20(%E9%99%84%E6%B3%A811)) The group's total cost of assets acquired in H1 2025 was RMB 36.37 million, with a total net book value of assets disposed of amounting to RMB 0.512 million 2025 First Half Property, Plant and Equipment Movements | Item | 2025 First Half (RMB thousand) | 2024 First Half (RMB thousand) | | :--- | :--- | :--- | | Total Cost of Assets Acquired | 36,370 | 45,630 | | Total Net Book Value of Assets Disposed | 512 | 246 | [Trade and Bills Receivables (Note 12)](index=31&type=section&id=7.12%20%E8%B4%B8%E6%98%93%E5%BA%94%E6%94%B6%E6%AC%BE%E9%A1%B9%E5%8F%8A%E5%BA%94%E6%94%B6%E7%A5%A8%E6%8D%AE%20(%E9%99%84%E6%B3%A812)) As of June 30, 2025, the group's total trade and bills receivables were RMB 1,147.05 million, a slight decrease from year-end 2024, with credit terms typically ranging from one to three months June 30, 2025 Trade and Bills Receivables | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Trade Receivables (Net of Impairment) | 966,778 | 906,644 | | Bills Receivables | 180,275 | 254,525 | | Total | 1,147,053 | 1,161,169 | June 30, 2025 Trade Receivables Ageing Analysis | Ageing | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within 3 Months | 567,263 | 518,522 | | 4th to 6th Month | 172,174 | 188,948 | | 7th to 12th Month | 138,302 | 117,107 | | Over 1 Year | 89,039 | 82,067 | | Total | 966,778 | 906,644 | - The ageing of the group's bills receivables is within **six months**[111](index=111&type=chunk) [Trade and Bills Payables (Note 13)](index=31&type=section&id=7.13%20%E8%B4%B8%E6%98%93%E5%BA%94%E4%BB%98%E6%AC%BE%E9%A1%B9%E5%8F%8A%E5%BA%94%E4%BB%98%E7%A5%A8%E6%8D%AE%20(%E9%99%84%E6%B3%A813)) As of June 30, 2025, the group's total trade and bills payables were RMB 434.02 million, a slight increase from year-end 2024 June 30, 2025 Trade and Bills Payables Ageing Analysis | Ageing | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within Six Months | 338,705 | 366,017 | | Over Six Months | 95,311 | 50,707 | | Total | 434,016 | 416,724 | [Issued Share Capital (Note 14)](index=32&type=section&id=7.14%20%E5%B7%B2%E5%8F%91%E8%A1%8C%E8%82%A1%E6%9C%AC%20(%E9%99%84%E6%B3%A814)) For H1 2025, the company repurchased 1,296,000 shares for a total consideration of RMB 1.41 million, with no share options exercised - For the six months ended **June 30, 2025**, no share options were exercised[113](index=113&type=chunk) - The company repurchased a total of **1,296,000** of its own shares for a total consideration of **RMB 1,409,000**[113](index=113&type=chunk) - In the prior period of 2024, the company repurchased and cancelled **18,244,000** and **18,178,000 shares** for a total consideration of **RMB 19,207,000**[113](index=113&type=chunk) [Commitments (Note 15)](index=32&type=section&id=7.15%20%E6%89%BF%E6%8B%85%20(%E9%99%84%E6%B3%A815)) As of June 30, 2025, the group's total contractual commitments were RMB 43.10 million, primarily for property, plant, and equipment, with forward foreign exchange contract commitments totaling RMB 614.90 million June 30, 2025 Contractual Commitments | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Buildings | 10,842 | 14,565 | | Plant and Equipment | 32,261 | 41,391 | | Total | 43,103 | 55,956 | June 30, 2025 Forward Foreign Exchange Contract Commitments | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Purchase Swiss Francs | 614,904 | 810,333 | | Purchase Japanese Yen | – | 5,534 | | Total | 614,904 | 815,867 | [Related Party Transactions (Note 16)](index=32&type=section&id=7.16%20%E5%85%B3%E8%81%94%E6%96%B9%E4%BA%A4%E6%98%93%20(%E9%99%84%E6%B3%A816)) The group's total remuneration paid to key management personnel in H1 2025 was RMB 25.50 million, an increase from the prior period, mainly due to a significant rise in share-based payment expenses 2025 First Half Key Management Personnel Remuneration | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Short-term Employee Benefits | 18,462 | 16,123 | | Post-employment Benefits | 1,597 | 1,461 | | Share-based Payment Expenses | 5,440 | 33 | | Total Remuneration Paid to Key Management Personnel | 25,499 | 17,617 | [Fair Value and Fair Value Hierarchy of Financial Instruments (Note 17)](index=33&type=section&id=7.17%20%E9%87%91%E8%9E%8D%E5%B7%A5%E5%85%B7%E5%85%AC%E5%B9%B3%E4%BB%B7%E5%80%BC%E5%8F%8A%E5%85%AC%E5%B9%B3%E4%BB%B7%E5%80%BC%E5%B1%82%E7%BA%A7%20(%E9%99%84%E6%B3%A817)) The fair value measurement of the group's financial instruments primarily uses Level 2 and Level 3, with bills receivable and derivative financial instruments measured at Level 2, and equity investments designated at fair value through other comprehensive income measured at Level 3 June 30, 2025 Fair Value of Financial Assets | Item | Carrying Amount (RMB thousand) | Fair Value (RMB thousand) | | :--- | :--- | :--- | | Bills Receivables | 180,275 | 180,275 | | Equity Investments Designated at Fair Value Through Other Comprehensive Income | 6,357 | 6,357 | | Time Deposits | 80,000 | 81,298 | | Derivative Financial Instruments | 53,524 | 53,524 | | Total | 320,156 | 321,454 | June 30, 2025 Fair Value of Financial Liabilities | Item | Carrying Amount (RMB thousand) | Fair Value (RMB thousand) | | :--- | :--- | :--- | | Interest-bearing Bank and Other Borrowings | 285,255 | 287,986 | | Derivative Financial Instruments | – | – | | Total | 285,255 | 287,986 | - The fair value of unlisted equity investments designated at fair value through other comprehensive income is estimated using market-based valuation techniques, which are based on assumptions not supported by observable market prices or rates, considering **peer price-to-sales ratios** and a **discount for lack of marketability**[117](index=117&type=chunk)[119](index=119&type=chunk) [Events After Reporting Period (Note 18)](index=35&type=section&id=7.18%20%E6%8A%A5%E5%91%8A%E6%9C%9F%E5%90%8E%E4%BA%8B%E9%A1%B9%20(%E9%99%84%E6%B3%A818)) Subsequent to the reporting period, Saichim Power Semiconductor signed a capital increase agreement with investors to acquire Hunan Hongan Microelectronics, which will dilute the company's equity interest in Saichim Power Semiconductor - Saichim Power Semiconductor will issue new registered capital, which investors will subscribe for at the subscription price, totaling approximately **9.00%** of Saichim Power Semiconductor's enlarged equity[121](index=121&type=chunk) - The subscription price will be satisfied by the investors transferring **100% equity of Hunan Hongan Microelectronics Co., Ltd.** to Saichim Power Semiconductor[121](index=121&type=chunk) - Upon completion of the transaction, the company's equity interest in Saichim Power Semiconductor, calculated on an enlarged basis, will decrease from approximately **70.5406% to 64.1918%**[121](index=121&type=chunk) [Approval of Condensed Consolidated Interim Financial Information (Note 19)](index=35&type=section&id=7.19%20%E6%89%B9%E5%87%86%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E8%B3%87%E6%96%99%20(%E9%99%84%E6%B3%A819)) The condensed consolidated interim financial information was approved and authorized for issue by the Board of Directors on August 22, 2025 - The condensed consolidated interim financial information was approved and authorized for issue by the Board of Directors on **August 22, 2025**[122](index=122&type=chunk)

中期報告 2025 * 僅供識別 目錄 | 公司資料 | 2 | | --- | --- | | 財務摘要 | 4 | | 管理層討論及分析 | 5 | | 企業管治及其他資料 | 24 | | 獨立執業會計師審閱報告 | 31 | | 中期簡明綜合財務報表 | | | －中期簡明綜合收益表 | 36 | | －中期簡明綜合全面收益表 | 37 | | －中期簡明綜合財務狀況表 | 38 | | －中期簡明綜合權益變動表 | 40 | | －中期簡明綜合現金流量表 | 41 | | －中期簡明綜合財務報表附註 | 42 | 頁次 公司資料 董事會 執行董事 胡吉春先生 （主席兼行政總裁） 胡曰明先生 陳永道先生 周志瑾先生 鄭青女士 顧曉斌先生 非執行董事 葉興明先生 獨立非執行董事 江希和先生 （首席獨立非執行董事） 蔣建華女士 陳友正博士 Nathan Yu Li先生 審核委員會 江希和先生 （主席） 陳友正博士 Nathan Yu Li先生 薪酬委員會 陳友正博士 （主席） 江希和先生 陳永道先生 提名委員會 胡吉春先生 （主席） 江希和先生 Nathan Yu Li先生 蔣建華女士 註冊辦事處 VIS ...

[Company Information](index=2&type=section&id=Company%20Information) This section details the company's registration, principal business locations, share listing, and board composition [Company Basic Information](index=3&type=section&id=Company%20Basic%20Information) This section outlines Changhong Jiahua Holdings Limited's registered office, principal place of business, share registrar, principal bankers, exchange, and contact details - The company is registered in Bermuda, with its principal place of business in Hong Kong, and its shares are listed on the Main Board of the Hong Kong Stock Exchange, stock code **3991**[3](index=3&type=chunk)[4](index=4&type=chunk) [Board of Directors and Committees](index=4&type=section&id=Board%20of%20Directors%20and%20Committees) This section lists the company's board members, including executive and independent non-executive directors, and the composition of the Audit, Remuneration, and Nomination Committees - Mr. Zhu Jianqiu serves as the **Chairman of the Board and President**[5](index=5&type=chunk) - Mr. Chan Ming Shun is the **Chairman of the Audit Committee** and **Chairman of the Remuneration Committee**, while Mr. Zhu Jianqiu is the **Chairman of the Nomination Committee**[5](index=5&type=chunk) [Chairman's Report](index=4&type=section&id=Chairman%27s%20Report) This report reviews the group's business performance amidst global economic challenges and outlines future strategic directions [Business Review](index=5&type=section&id=Business%20Review) Despite global economic slowdowns and increased geopolitical conflicts, the Group achieved stable growth in revenue and profit attributable to shareholders by focusing on smart distribution services and strategic collaborations - The global economic outlook for the first half of 2025 deteriorated, while China's economy maintained steady progress, with the Group facing challenges from an unfavorable operating environment and industry changes[8](index=8&type=chunk) - The Group steadfastly implemented its "Ecological Value Creation, High-Quality Growth Partner" strategy, building on smart distribution services and accelerating its shift towards an ecological mindset, leveraging digital intelligence technology to develop diverse capabilities and professional services[8](index=8&type=chunk) - The Group deepened collaboration with ecological partners, strategically expanding into cloud applications, metaverse, security, low-altitude economy, and digital marketing to cultivate new competitive advantages[8](index=8&type=chunk) 2025 First Half Key Financial Indicators Comparison | Indicator | 2025 First Half (million HKD) | 2024 First Half (million HKD) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Revenue | 21,168.69 | 19,286.17 | **+9.76%** | | Overall Gross Profit Margin | 3.07% | 3.34% | **-0.27 percentage points** | | Profit Attributable to Shareholders | 181.19 | 164.48 | **+10.16%** | | Basic Earnings Per Share | 7.05 HK cents | 6.40 HK cents | **+0.65 HK cents** | - The increase in **R&D expenses** was primarily due to an increase in R&D personnel; the rise in **distribution and selling expenses** was mainly due to increased operating costs for e-commerce business; and the decrease in **finance costs** was primarily due to lower bank loan interest rates[9](index=9&type=chunk) 2025 First Half Revenue and Profit by Business Segment | Business Segment | Revenue (million HKD) | Year-on-Year Change | Profit (million HKD) | Year-on-Year Change | | :--- | :--- | :--- | :--- | :--- | | ICT Consumer Product Distribution | 8,471.25 | **-0.28%** | 129.55 | **+5.62%** | | ICT Enterprise Product Distribution | 8,378.27 | **+23.67%** | 221.86 | **-8.08%** | | Other Businesses | 4,319.18 | **+7.53%** | 45.10 | **+21.23%** | [Outlook](index=7&type=section&id=Outlook) For the second half of 2025, the Group anticipates continued global economic recovery challenges but expects China to increase policy support, focusing on technological innovation and digital intelligence to expand new ecosystems - Global economic recovery faces pressure in the second half of 2025, while China will strengthen fiscal and monetary policy coordination, expand domestic demand, and develop new quality productive forces[12](index=12&type=chunk) - The Group will uphold its core as a technology service enterprise, driven by innovation and digital intelligence technology, with smart distribution services as its foundation, to expand into new industry ecosystems such as cloud applications, metaverse, security, and low-altitude economy[12](index=12&type=chunk) [Management Discussion and Analysis](index=7&type=section&id=Management%20Discussion%20and%20Analysis) This section provides an in-depth review of the group's financial performance, liquidity, and operational aspects for the reporting period [Financial Summary](index=8&type=section&id=Financial%20Summary) The Group maintained a sound financial and liquidity position in the first half of 2025, with both revenue and profit growing, despite a relatively high net gearing ratio 2025 First Half Financial and Liquidity Position | Indicator | Amount (million HKD) | | :--- | :--- | | Total Interest-Bearing Borrowings | 2,749.99 | | Cash and Bank Balances | 3,371.76 | | Net Current Assets | 2,976.75 | | Net Gearing Ratio | **3.59 times** | - For the six months ended June 30, 2025, **revenue was approximately 21,168.69 million HKD**, representing a **9.76% year-on-year increase**; **profit was approximately 181.19 million HKD**, a **10.16% year-on-year increase**[19](index=19&type=chunk) - Total comprehensive income was approximately **241.06 million HKD**, primarily due to **fluctuations in the RMB exchange rate**[19](index=19&type=chunk) [Asset Pledges](index=8&type=section&id=Asset%20Pledges) As of June 30, 2025, the Group had not mortgaged or pledged any of its fixed assets - During the reporting period, the Group had **no fixed asset pledges**[16](index=16&type=chunk) [Exchange Rate Fluctuation Risk and Related Hedging](index=8&type=section&id=Exchange%20Rate%20Fluctuation%20Risk%20and%20Related%20Hedging) The Group primarily transacts in RMB, HKD, and USD, facing minimal foreign exchange risk due to the RMB's small fluctuation range and the HKD's peg to the USD, thus no hedging is currently undertaken - The Group faces **extremely low foreign exchange risk**, with its primary currencies being RMB, HKD, and USD[17](index=17&type=chunk) - As of June 30, 2025, the Group had **not undertaken any foreign currency investment hedging**[18](index=18&type=chunk) [Treasury Policy](index=9&type=section&id=Treasury%20Policy) The Group's cash and bank deposits are denominated in RMB, HKD, and USD, and due to minimal foreign exchange risk, no derivative instruments are used for hedging - The Group's cash and bank deposits are denominated in RMB, HKD, and USD, and **no derivative instruments are used to hedge foreign currency risk**[21](index=21&type=chunk) [Transfer of Financial Assets](index=9&type=section&id=Transfer%20of%20Financial%20Assets) The Group transfers financial assets by endorsing bills receivable to settle trade payables and discounting bills receivable with banks to raise cash, believing significant risks have been transferred, thus related assets and liabilities are not recognized in the consolidated financial statements - The Group transfers financial assets by **endorsing and discounting bills receivable**, believing that **significant risks have been transferred** and the **risk of default is low**[22](index=22&type=chunk) Maximum Exposure to Risk from Unrecovered Endorsed and Discounted Bills Receivable with Recourse | Item | June 30, 2025 (thousand HKD) | December 31, 2024 (thousand HKD) | | :--- | :--- | :--- | | Settlement of Trade and Other Payables | 74,177 | 132,139 | | Discounted Bills for Cash Generation | 2,003,174 | 1,803,800 | | **Total** | **2,077,351** | **1,935,939** | [Material Investments and Future Plans](index=10&type=section&id=Material%20Investments%20and%20Future%20Plans) During the reporting period, the Group did not undertake any material investments, acquisitions, or disposals, nor did it have any significant capital commitments or future investment plans - There were **no material investments, acquisitions, disposals, or future capital asset plans** during the reporting period[23](index=23&type=chunk)[24](index=24&type=chunk) [Events After Reporting Period](index=10&type=section&id=Events%20After%20Reporting%20Period) No events with a material impact on the Group occurred from the end of the reporting period up to the date of this report - **No material events occurred after the reporting period**[25](index=25&type=chunk) [Employment and Remuneration Policies](index=10&type=section&id=Employment%20and%20Remuneration%20Policies) As of June 30, 2025, the Group's total number of employees decreased, with remuneration policies based on performance, experience, and industry practice, alongside retirement benefits Employee Headcount Comparison | Date | Total Employees | | :--- | :--- | | June 30, 2025 | **1,359 employees** | | June 30, 2024 | **1,552 employees** | - The Group remunerates employees based on their **performance, experience, and industry practice**, providing Mandatory Provident Fund or social old-age insurance and housing provident fund for Hong Kong and PRC employees[26](index=26&type=chunk) [Dividends](index=10&type=section&id=Dividends) The Board does not recommend any dividend payment for the first half of 2025, but the 2024 final dividend was paid on June 20, 2025 - The Board does **not recommend the payment of any dividend** for the six months ended June 30, 2025[27](index=27&type=chunk) - A **final dividend of HKD 0.05 per share** for the year ended December 31, 2024, totaling approximately **128.53 million HKD**, was paid on June 20, 2025[27](index=27&type=chunk) [Other Information](index=10&type=section&id=Other%20Information) This section covers corporate governance, directors' and major shareholders' interests, and other statutory disclosures [Purchase, Sale and Redemption of the Company's Listed Securities](index=11&type=section&id=Purchase%2C%20Sale%20and%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) During the reporting period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities - During the reporting period, neither the Company nor its subsidiaries engaged in the **purchase, sale, or redemption of listed securities**[29](index=29&type=chunk) [Compliance with Corporate Governance Code](index=11&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) The Company has complied with all provisions of the Corporate Governance Code, with a deviation where the Chairman and Chief Executive roles are combined, but the Board believes sufficient balance of power exists - The Company complies with the Corporate Governance Code, but the roles of **Chairman and Chief Executive are combined by Mr. Zhu Jianqiu**, deviating from Code Provision C.2.1[30](index=30&type=chunk) - The Board believes that with **three independent non-executive directors** and all major decisions discussed by the Board and senior management, there is **sufficient balance of power and safeguards**[30](index=30&type=chunk) [Directors' Securities Transactions](index=11&type=section&id=Directors%27%20Securities%20Transactions) Upon enquiry, all Directors confirmed compliance with the Model Code for Securities Transactions by Directors of Listed Issuers during the reporting period - All Directors confirmed compliance with the **Model Code for Securities Transactions by Directors** as set out in Appendix C3 of the Listing Rules[31](index=31&type=chunk) [Audit Committee and Review of Interim Results](index=11&type=section&id=Audit%20Committee%20and%20Review%20of%20Interim%20Results) The Audit Committee has reviewed the Group's results for the six months ended June 30, 2025, but the financial information has not been reviewed or audited by the Company's auditors - The Audit Committee has **reviewed the financial information** in this interim results report[32](index=32&type=chunk) - The financial information in this report has **not been reviewed or audited by the Company's auditors**[32](index=32&type=chunk) [Remuneration Committee](index=12&type=section&id=Remuneration%20Committee) The Remuneration Committee is responsible for reviewing and recommending remuneration policies for Directors and senior management, with members including Mr. Chan Ming Shun (Chairman), Mr. Zhu Jianqiu, and Mr. Meng Qingbin - The Remuneration Committee is responsible for **reviewing remuneration policies for Directors and senior management**, with **Mr. Chan Ming Shun as Chairman**[33](index=33&type=chunk) [Nomination Committee](index=12&type=section&id=Nomination%20Committee) The Nomination Committee is responsible for formulating nomination policies and making recommendations to the Board on director nominations, appointments, and succession, with members including Mr. Zhu Jianqiu (Chairman), Mr. Chan Ming Shun, and Mr. Gao Xudong - The Nomination Committee is responsible for **formulating nomination policies** and making recommendations on **director nominations, appointments, and succession**, with **Mr. Zhu Jianqiu as Chairman**[34](index=34&type=chunk) [Directors' and Chief Executive's Interests and Short Positions in the Company](index=12&type=section&id=Directors%27%20and%20Chief%20Executive%27s%20Interests%20and%20Short%20Positions%20in%20the%20Company) This section discloses the interests of Directors and the Chief Executive in the Company's shares as of June 30, 2025 Directors' Interests in the Company's Ordinary Shares (as of June 30, 2025) | Director Name | Capacity | Number of Ordinary Shares Interested (L) | Approximate Percentage of Interest | | :--- | :--- | :--- | :--- | | Mr. Zhu Jianqiu | Beneficial Owner | **115,165,762** | **7.92%** | | Mr. Zhao Qilin | Beneficial Owner | **750,000** | **0.05%** | | Ms. Su Huiqing | Beneficial Owner | **34,589,636** | **2.38%** | [Directors' Rights to Subscribe for Shares or Debentures](index=13&type=section&id=Directors%27%20Rights%20to%20Subscribe%20for%20Shares%20or%20Debentures) During the reporting period, no Director or their associates were granted or exercised any rights to subscribe for shares or debentures of the Company - During the reporting period, **no Director or their associates were granted or exercised any rights to subscribe for the Company's shares or debentures**[37](index=37&type=chunk) [Major Shareholders' Interests in the Company](index=13&type=section&id=Major%20Shareholders%27%20Interests%20in%20the%20Company) This section discloses the interests of major shareholders in the Company's shares or related shares as of June 30, 2025 Major Shareholders' Long Positions in the Company's Shares (as of June 30, 2025) | Major Shareholder Name | Capacity | Share Class | Number of Shares Interested (L) | Approximate Percentage of Interest in Relevant Class | | :--- | :--- | :--- | :--- | :--- | | Sichuan Changhong Electric Co., Ltd. | Controlled Corporation Interest | Ordinary Shares | **874,650,000** | **60.13%** | | | | Preference Shares | **1,115,868,000** | **100.00%** | | Changhong (Hong Kong) Trading Co., Ltd. | Controlled Corporation Interest and Beneficial Owner | Ordinary Shares | **874,650,000** | **60.13%** | | | | Preference Shares | **1,115,868,000** | **100.00%** | | Anjian Holdings Limited | Beneficial Owner | Ordinary Shares | **858,650,000** | **59.03%** | | | | Preference Shares | **1,115,868,000** | **100.00%** | | Sichuan Chuan Investment Asset Management Co., Ltd. | Beneficial Owner | Ordinary Shares | **83,009,340** | **5.70%** | | Sichuan Energy Development Group Co., Ltd. | Controlled Corporation Interest | Ordinary Shares | **83,009,340** | **5.70%** | - Sichuan Changhong Holdings is the **single largest shareholder of Sichuan Changhong**, holding approximately **23.22% equity**, and has **actual control over Sichuan Changhong's board of directors**[40](index=40&type=chunk) - Sichuan Energy Development Group Co., Ltd. is deemed to have an interest in the shares held by Chuan Investment Asset Management through **equity transfer**[40](index=40&type=chunk) [Directors' and Controlling Shareholders' Interests in Competing Businesses](index=15&type=section&id=Directors%27%20and%20Controlling%20Shareholders%27%20Interests%20in%20Competing%20Businesses) Except for Sichuan Changhong primarily engaged in wholesale of consumer home electronics, no other Directors or controlling shareholders and their close associates had any business or interest competing with the Group during the reporting period - Sichuan Changhong primarily engages in the **wholesale business of "Changhong" brand consumer home electronic products**[41](index=41&type=chunk) - During the reporting period, **no other Directors or controlling shareholders and their close associates had any business or interest that competed with the Group's business**[41](index=41&type=chunk) [Changes in Directors' Information](index=15&type=section&id=Changes%20in%20Directors%27%20Information) During the reporting period, there were no changes in Directors' information required to be disclosed under Rule 13.51B(1) of the Listing Rules - **No changes in Directors' information** occurred during the reporting period[42](index=42&type=chunk) [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=15&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) This statement presents the group's financial performance, including revenue, profit, and other comprehensive income for the period Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (for the six months ended June 30, 2025) | Indicator | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | Revenue | **21,168,691** | 19,286,174 | | Cost of Sales | (20,519,053) | (18,642,526) | | Gross Profit | **649,638** | 643,648 | | Other Income | 43,349 | 35,462 | | Research and Development Expenses | (17,602) | (12,226) | | Administrative Expenses | (89,527) | (85,480) | | Net Impairment Loss on Trade Receivables | (42,949) | (33,972) | | Net Exchange Loss | (11,098) | (14,300) | | Distribution and Selling Expenses | (210,179) | (208,466) | | Finance Costs | (104,942) | (145,580) | | Profit Before Tax | **216,690** | 179,086 | | Income Tax Expense | (35,498) | (14,602) | | Profit for the Period Attributable to Owners of the Company | **181,192** | 164,484 | | Total Comprehensive Income for the Period Attributable to Owners of the Company | **241,058** | 134,936 | | Basic and Diluted Earnings Per Share (HK cents) | **7.05** | 6.40 | [Condensed Consolidated Statement of Financial Position](index=16&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) This statement provides a snapshot of the group's assets, liabilities, and equity at the end of the reporting period Condensed Consolidated Statement of Financial Position (as of June 30, 2025) | Indicator | June 30, 2025 (thousand HKD) | December 31, 2024 (thousand HKD) | | :--- | :--- | :--- | | **Non-current Assets** | | | | Property, Plant and Equipment | 2,665 | 2,934 | | Investment Properties | 430 | 430 | | Intangible Assets | 22,748 | 25,601 | | Right-of-use Assets | 20,410 | 25,494 | | Deferred Income Tax Assets | 44,022 | 43,357 | | Financial Assets at Fair Value Through Profit or Loss | 33,745 | 34,989 | | **Total Non-current Assets** | **124,020** | **132,805** | | **Current Assets** | | | | Inventories | 3,913,815 | 5,582,487 | | Trade Receivables | 5,239,554 | 4,460,739 | | Bills Receivable at Fair Value Through Other Comprehensive Income | 283,889 | 174,219 | | Prepayments, Deposits and Other Receivables | 326,958 | 391,364 | | Amounts Due from Related Companies | 46,084 | 34,699 | | Refundable Prepayments | 875,440 | 1,128,433 | | Pledged Bank Deposits | 2,114,040 | 5,602,464 | | Cash and Cash Equivalents | 1,257,718 | 561,776 | | **Total Current Assets** | **14,057,498** | **17,936,181** | | **Current Liabilities** | | | | Trade and Bills Payables | 4,977,310 | 5,194,413 | | Bills Payable under Supply Chain Financing | 2,333,710 | 5,865,134 | | Other Payables | 553,949 | 474,401 | | Tax Payables | 10,317 | 17,510 | | Borrowings | 2,749,991 | 2,723,459 | | Amounts Due to Related Companies | 18,500 | 24,063 | | Contract Liabilities | 425,644 | 765,228 | | Lease Liabilities | 11,327 | 12,130 | | **Total Current Liabilities** | **11,080,748** | **15,076,338** | | **Net Current Assets** | **2,976,750** | **2,859,843** | | **Total Assets Less Current Liabilities** | **3,100,770** | **2,992,648** | | **Non-current Liabilities** | | | | Lease Liabilities | 9,083 | 13,493 | | **Net Assets** | **3,091,687** | **2,979,155** | | **Total Equity** | **3,091,687** | **2,979,155** | [Condensed Consolidated Statement of Changes in Equity](index=18&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) This statement details the changes in the group's equity components over the reporting period Condensed Consolidated Statement of Changes in Equity (for the six months ended June 30, 2025) | Item | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | Total Equity as at January 1 | **2,979,155** | 2,812,545 | | Dividend Distribution | (128,526) | (128,526) | | Decrease in Exchange Differences Arising from Translation | 59,866 | (29,548) | | Total Profit for the Period Attributable to Shareholders | **181,192** | 164,484 | | **Total Equity as at June 30** | **3,091,687** | **2,818,955** | [Condensed Consolidated Statement of Cash Flows](index=19&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) This statement summarizes the cash inflows and outflows from operating, investing, and financing activities Condensed Consolidated Statement of Cash Flows (for the six months ended June 30, 2025) | Item | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | **(1,187,739)** | (3,193,175) | | Net Cash From Investing Activities | **3,577,174** | 3,054,038 | | Net Cash (Used In) / From Financing Activities | **(1,693,493)** | 104,760 | | Net Increase / (Decrease) in Cash and Cash Equivalents | **695,942** | (34,377) | | Cash and Cash Equivalents at Beginning of Year | 561,776 | 1,087,803 | | **Cash and Cash Equivalents at End of Period** | **1,257,718** | **1,053,426** | [Notes to the Condensed Consolidated Interim Financial Statements](index=20&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Interim%20Financial%20Statements) These notes provide additional information and explanations supporting the condensed consolidated interim financial statements [1. General Information](index=21&type=section&id=1.%20General%20Information) This section introduces the company's registered office, listing status, principal activities, functional and presentation currencies, and identifies the controlling shareholder group - The Company's **functional currency is RMB**, and the condensed consolidated financial statements are **presented in HKD**[50](index=50&type=chunk) - As of June 30, 2025, Sichuan Changhong Holdings, Sichuan Changhong, Changhong (Hong Kong) Trading Co., Ltd., and Anjian Holdings Limited constitute a **group of controlling shareholders**[51](index=51&type=chunk) [2. Basis of Preparation and Principal Accounting Policies](index=21&type=section&id=2.%20Basis%20of%20Preparation%20and%20Principal%20Accounting%20Policies) This section clarifies the basis of preparation for the condensed consolidated financial statements, which comply with HKAS 34, and notes that while the statements were reviewed by the Audit Committee, they were not reviewed or audited by external auditors - The condensed consolidated financial statements are prepared in accordance with **Hong Kong Accounting Standard 34 "Interim Financial Reporting"**[52](index=52&type=chunk) - The condensed consolidated results for the six months ended June 30, 2025, have **not been reviewed or audited by the Company's external auditors**, but have been **reviewed by the Audit Committee**[53](index=53&type=chunk) - The accounting policies adopted by the Company are **consistent with those followed in the preparation of the 2024 financial statements**[53](index=53&type=chunk) [3. Revenue](index=22&type=section&id=3.%20Revenue) This section details the Group's principal business activities, including providing ICT solutions and services, and distributing ICT consumer products, enterprise products, smartphones, and own-brand products, with amounts provided by major revenue categories - The Group's principal activities include providing **professional and comprehensive Information and Communication Technology (ICT) solutions and services**, as well as **distributing ICT consumer products, ICT enterprise products, smartphones, and own-brand products**[54](index=54&type=chunk) Revenue by Major Category (for the six months ended June 30) | Revenue Category | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | ICT Consumer Products | **8,471,250** | 8,495,043 | | ICT Enterprise Products | **8,378,265** | 6,774,592 | | Others | **4,319,176** | 4,016,539 | | **Total Revenue** | **21,168,691** | **19,286,174** | [4. Segment Information](index=22&type=section&id=4.%20Segment%20Information) This section provides an analysis of the Group's revenue and results by reportable and operating segments, including ICT consumer products, ICT enterprise products, and other businesses, along with sales by geographical market - The Group has **three reportable and operating segments**: ICT Consumer Products, ICT Enterprise Products, and Others[57](index=57&type=chunk) 2025 First Half Revenue and Profit by Segment | Segment | External Sales (thousand HKD) | Segment Profit (thousand HKD) | | :--- | :--- | :--- | | ICT Consumer Products | **8,471,250** | **129,547** | | ICT Enterprise Products | **8,378,265** | **221,864** | | Others | **4,319,176** | **45,099** | | **Total** | **21,168,691** | **396,510** | 2025 First Half Sales by Geographical Market | Region | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | Mainland China | **20,906,633** | 19,007,151 | | Other Regions | **262,058** | 279,023 | | **Total** | **21,168,691** | **19,286,174** | [5. Profit for the Period](index=25&type=section&id=5.%20Profit%20for%20the%20Period) This section details the major expenses deducted from operating profit for the six months ended June 30, 2025, and the corresponding period in 2024 Expenses Deducted from Operating Profit for the Period (for the six months ended June 30) | Item | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | Cost of Inventories Sold | **20,519,053** | 18,642,526 | | Depreciation of Plant and Equipment | **553** | 923 | | Depreciation of Right-of-use Assets | **5,932** | 5,974 | | Salaries and Related Staff Costs | **149,465** | 151,923 | | Contributions to Retirement Benefit Schemes | **42,165** | 41,654 | | Net Exchange Loss | **11,098** | 14,300 | [6. Income Tax Expense](index=25&type=section&id=6.%20Income%20Tax%20Expense) This section explains the Group's income tax policies across different jurisdictions, including Bermuda's tax exemption, Hong Kong's two-tiered profits tax, and the standard and preferential tax rates for PRC subsidiaries - The Company is **exempt from income tax in Bermuda**[63](index=63&type=chunk) - Hong Kong profits tax operates under a **two-tiered system**, with the first **2 million HKD of assessable profits taxed at 8.25%** and profits above that at **16.5%**[63](index=63&type=chunk) - PRC subsidiaries are subject to a **standard corporate income tax rate of 25%**, but certain "encouraged enterprises" located in western regions may enjoy a **preferential tax rate of 15%**[63](index=63&type=chunk)[64](index=64&type=chunk) [7. Earnings Per Share](index=26&type=section&id=7.%20Earnings%20Per%20Share) This section provides basic and diluted earnings per share calculations for the six months ended June 30, 2025, and the corresponding period in 2024, noting that basic and diluted EPS are identical due to no potentially dilutive shares Earnings Per Share Calculation (for the six months ended June 30) | Item | 2025 (thousand HKD / thousand shares) | 2024 (thousand HKD / thousand shares) | | :--- | :--- | :--- | | Profit Attributable to Owners of the Company (thousand HKD) | **181,192** | 164,484 | | Weighted Average Number of Ordinary Shares and Convertible Preference Shares (thousand shares) | **2,570,520** | 2,570,520 | | **Basic and Diluted Earnings Per Share (HK cents)** | **7.05** | **6.40** | - As there were **no potentially dilutive shares** during the reporting period, diluted earnings per share are **identical to basic earnings per share**[65](index=65&type=chunk) [8. Trade Receivables](index=27&type=section&id=8.%20Trade%20Receivables) This section outlines the Group's credit policy and provides an aging analysis of trade receivables by invoice date as of the end of the reporting period - The Group's credit period with third-party trade customers ranges from **0 to 180 days**, with customer credit limits reviewed annually[66](index=66&type=chunk) Aging Analysis of Trade Receivables (as of June 30, 2025) | Aging | June 30, 2025 (thousand HKD) | December 31, 2024 (thousand HKD) | | :--- | :--- | :--- | | Within 30 days | **1,419,410** | 1,111,255 | | 31 to 60 days | **802,571** | 775,144 | | 61 to 90 days | **413,331** | 417,505 | | 91 to 180 days | **986,218** | 601,759 | | 181 to 365 days | **565,574** | 512,339 | | Over one year | **1,052,450** | 1,042,737 | | **Total** | **5,239,554** | **4,460,739** | [9. Trade Payables and Bills Payable / Bills Payable under Supply Chain Financing](index=28&type=section&id=9.%20Trade%20Payables%20and%20Bills%20Payable%20%2F%20Bills%20Payable%20under%20Supply%20Chain%20Financing) This section presents the total trade and bills payables as of the reporting period end, an aging analysis of trade payables by goods receipt date, and details the credit period for goods purchased Trade and Bills Payables (as of June 30, 2025) | Item | June 30, 2025 (thousand HKD) | December 31, 2024 (thousand HKD) | | :--- | :--- | :--- | | Trade and Bills Payables | **4,977,310** | 5,194,413 | | Bills Payable under Supply Chain Financing | **2,333,710** | 5,865,134 | | **Total** | **7,311,020** | **11,059,547** | Aging Analysis of Trade Payables (as of June 30, 2025) | Aging | June 30, 2025 (thousand HKD) | December 31, 2024 (thousand HKD) | | :--- | :--- | :--- | | Within 30 days | **699,781** | 520,984 | | 31 to 60 days | **523,312** | 428,416 | | 61 to 90 days | **75,507** | 100,414 | | 91 to 180 days | **198,081** | 142,300 | | 181 to 365 days | **144,082** | 113,739 | | Over one year | **116,805** | 84,330 | | **Total** | **1,757,568** | **1,390,183** | - The credit period for goods purchased ranges from **30 to 120 days**, and the Group has established financial risk management policies to ensure all payables are settled within the credit period[67](index=67&type=chunk) [10. Borrowings](index=29&type=section&id=10.%20Borrowings) This section discloses the Group's total borrowings as of the reporting period end, primarily unsecured bank borrowings, and presents the effective interest rate range Borrowings Analysis (as of June 30, 2025) | Item | June 30, 2025 (thousand HKD) | December 31, 2024 (thousand HKD) | | :--- | :--- | :--- | | Bank Borrowings, Unsecured | **2,749,991** | 2,723,459 | - For the six months ended June 30, 2025, the Group's borrowings had an **effective interest rate fixed between 0.9981% and 4.6727%**[68](index=68&type=chunk) [11. Dividends](index=29&type=section&id=11.%20Dividends) This section confirms the Board's recommendation not to declare a dividend for the first half of 2025 and lists the dividend amount recognized as a distribution during the period - The Board does **not recommend the payment of any dividend** for the six months ended June 30, 2025[70](index=70&type=chunk) Dividends Recognized as Distribution During the Period (for the six months ended June 30) | Item | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | 2024 Final — HKD 0.05 per share | **128,526** | 128,526 |

[Supplementary Announcement Overview](index=1&type=section&id=Supplementary%20Announcement%20Overview) [Purpose and Scope of the Announcement](index=1&type=section&id=Purpose%20and%20Scope%20of%20the%20Announcement) This announcement serves as a supplementary disclosure to Wei Ye Holdings Limited's 2024 annual report, providing detailed additional information regarding the impairment loss on property, plant, and equipment of **RMB 110 million** for the year ended December 31, 2024 - This announcement is a supplementary disclosure to the 2024 annual report of Wei Ye Holdings Limited (Hong Kong Stock Code: 1570)[2](index=2&type=chunk) - The supplementary information primarily addresses the **RMB 110 million** impairment loss on property, plant and equipment disclosed in the 2024 annual report[2](index=2&type=chunk) [Impairment Loss on Property, Plant and Equipment](index=1&type=section&id=Impairment%20Loss%20on%20Property%2C%20Plant%20and%20Equipment) [Reasons and Background for Impairment](index=1&type=section&id=Reasons%20and%20Background%20for%20Impairment) Wei Ye Holdings' non-wholly owned subsidiary, Yizheng Honglin Real Estate Co., Ltd., developed a residential and commercial project in Yangzhou, where a portion of completed construction (no less than **10,000 square meters**) was classified as permanent freehold buildings due to lack of legal ownership and transfer restrictions. This property, a cash-generating unit, recorded no sales and incurred a net loss of approximately **RMB 10 million** in 2024, leading the company to cease further investment and recognize an impairment due to adverse challenges in the Yangzhou real estate market - A commercial property (no less than **10,000 square meters**) developed by the non-wholly owned subsidiary, Yizheng Honglin Real Estate Co., Ltd., in Yangzhou, with a carrying amount of approximately **RMB 110 million**, was classified as a permanent freehold building due to lack of legal ownership and transfer restrictions[3](index=3&type=chunk) - As a cash-generating unit, the property recorded **no sales** and incurred a net loss of approximately **RMB 10 million** for the year ended December 31, 2024[5](index=5&type=chunk) - The company believes the overall economic environment in the Yangzhou real estate development market faces adverse challenges, hindering business expansion and making it difficult to reverse the loss-making situation in the short term, thus deciding against further investment in Yizheng Honglin[5](index=5&type=chunk) [Impairment Amount](index=1&type=section&id=Impairment%20Amount) The company recognized an impairment loss on property, plant and equipment of **RMB 110 million** for the year ended December 31, 2024, primarily related to Yizheng Honglin's permanent freehold buildings 2024 Impairment Loss on Property, Plant and Equipment | Metric | Amount (RMB) | | :--- | :--- | | Impairment Loss on Property, Plant and Equipment | 110 million | [Impairment Assessment Methodology and Assumptions](index=2&type=section&id=Impairment%20Assessment%20Methodology%20and%20Assumptions) [Assessment Methodology](index=2&type=section&id=Assessment%20Methodology) The company engaged an independent professional valuer (Huicheng Appraisal Consulting Co., Ltd.) to conduct a valuation on December 31, 2024, using the income approach's discounted cash flow analysis to determine the value in use of the cash-generating unit, in compliance with Hong Kong Accounting Standard 36 - The company engaged an independent professional valuer (Huicheng Appraisal Consulting Co., Ltd.) with relevant qualifications and experience to conduct the valuation on **December 31, 2024**[5](index=5&type=chunk)[6](index=6&type=chunk) - The valuation method adopted the income approach, specifically discounted cash flow analysis, to determine the value in use of the cash-generating unit, in compliance with **Hong Kong Accounting Standard 36 – Impairment of Assets**[6](index=6&type=chunk)[7](index=7&type=chunk) [Key Valuation Assumptions and Input Data](index=3&type=section&id=Key%20Valuation%20Assumptions%20and%20Input%20Data) The valuation is based on management-approved financial budgets, with a three-year forecast period, zero revenue growth, and a gross profit margin referencing **20% above** the carrying cost of remaining commercial properties at the valuation date. Estimated net cash flow during the forecast period is approximately **RMB 601,000**, with a present value of **RMB 531,000**, and an applied discount rate of **9.49%** - The valuation is based on Yizheng Honglin's financial budgets approved by company management, with key assumptions including revenue growth rate, gross profit margin, forecast period, expected cash flows at the end of the forecast period, and discount rate[8](index=8&type=chunk) - The forecast period is set at **three years**, with **zero revenue growth** during this period, and a gross profit margin adopted at **above 20.0%** of the carrying cost of the remaining commercial properties at the valuation date[8](index=8&type=chunk)[9](index=9&type=chunk) Key Valuation Financial Data | Metric | Value | | :--- | :--- | | Net Cash Flow during Forecast Period | Approx. RMB 601,000 | | Present Value of Net Cash Flow during Forecast Period | RMB 531,000 | | Discount Rate | 9.49% | - Given the transfer restrictions, the property is not expected to generate proceeds from sale at the end of the forecast period[9](index=9&type=chunk) [Other Information](index=3&type=section&id=Other%20Information) [Unchanged Report Information](index=3&type=section&id=Unchanged%20Report%20Information) Except for the impairment-related information disclosed in this supplementary announcement, all other information contained in the 2024 annual report remains unchanged - Except for the impairment-related information disclosed in this supplementary announcement, all other information contained in the 2024 annual report remains unchanged[10](index=10&type=chunk) [Board of Directors](index=3&type=section&id=Board%20of%20Directors) As of the announcement date, Mr. Chen Zhiyong serves as the Executive Director of Wei Ye Holdings Limited, with Mr. Liu Ning, Mr. Dong Xincheng, and Ms. Chen Shimin as Independent Non-Executive Directors - As of the date of this announcement, the Executive Director is **Mr. Chen Zhiyong**[11](index=11&type=chunk) - The Independent Non-Executive Directors are **Mr. Liu Ning**, **Mr. Dong Xincheng**, and **Ms. Chen Shimin**[11](index=11&type=chunk)

[Clarification Announcement Overview](index=1&type=section&id=Clarification%20Announcement%20Overview) [Purpose and Background](index=1&type=section&id=Purpose%20and%20Background) This announcement clarifies specific financial data in the condensed and consolidated cash flow statements from Fengzhan Holdings Limited's 2025 interim results, 2024 interim report, and 2024 annual report - The clarification pertains to the 2025 interim results announcement, 2024 interim report, and 2024 annual report[2](index=2&type=chunk) - The primary clarification concerns the condensed consolidated cash flow statements and consolidated cash flow statements[3](index=3&type=chunk)[5](index=5&type=chunk) [Financial Data Restatement Details](index=1&type=section&id=Financial%20Data%20Restatement%20Details) [H1 2024 Interim Report Restatement](index=1&type=section&id=H1%202024%20Interim%20Report%20Restatement) For the condensed consolidated cash flow statement for the six months ended June 30, 2024, the company restated 'Advances to joint ventures' and 'Repayments to joint ventures' under financing activities to offset non-cash transactions related to subcontracting services H1 2024 Financing Activities Cash Flow Restatement (HKD Thousands) | Metric | Originally Disclosed | Adjusted for Non-Cash Transactions | Restated | | :--- | :--- | :--- | :--- | | Advances to joint ventures | 134,042 | (97,907) | 36,135 | | Repayments to joint ventures | (109,879) | 97,907 | (11,972) | - Restatement reason: to offset non-cash transactions related to subcontracting services[3](index=3&type=chunk) [2024 Annual Report Restatement](index=2&type=section&id=2024%20Annual%20Report%20Restatement) For the consolidated cash flow statement for the year ended December 31, 2024, the company restated 'Advances to joint ventures' and 'Repayments to joint ventures' under financing activities to offset non-cash transactions related to subcontracting services Full Year 2024 Financing Activities Cash Flow Restatement (HKD Thousands) | Metric | Originally Disclosed | Adjusted for Non-Cash Transactions | Restated | | :--- | :--- | :--- | :--- | | Advances to joint ventures | 510,252 | (406,995) | 103,257 | | Repayments to joint ventures | (500,434) | 406,995 | (93,439) | - Restatement reason: to offset non-cash transactions related to subcontracting services[5](index=5&type=chunk) [Conclusion and Board Information](index=2&type=section&id=Conclusion%20and%20Board%20Information) [Impact on Total Financials](index=2&type=section&id=Impact%20on%20Total%20Financials) Despite the restatements, the total net cash from financing activities for the six months ended June 30, 2024, and the year ended December 31, 2024, remains unaffected - All other information remains unchanged[6](index=6&type=chunk) - The clarifications do not impact the total net cash from financing activities for the six months ended June 30, 2024, and the year ended December 31, 2024[6](index=6&type=chunk) [Board of Directors Information](index=2&type=section&id=Board%20of%20Directors%20Information) At the time of the announcement, the Board of Directors comprises Executive Director Mr. Wu Jian Shao (Chairman and Chief Executive Officer) and three independent non-executive directors - Chairman and Chief Executive Officer of the Board: **Mr. Wu Jian Shao**[7](index=7&type=chunk) - Independent Non-Executive Directors: **Mr. Siu Wai Lam**, **Ms. Ng Chung Chi**, and **Mr. Wong Chun Wah**[7](index=7&type=chunk)

[Financial Highlights](index=3&type=section&id=Financial%20Highlights) Key Financial Metrics Changes for the Six Months Ended 30 June 2025 | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | Change (%) | Remarks | | :--- | :--- | :--- | :--- | :--- | | Revenue | 260.5 | 742.8 | -64.9% | Primarily due to disposal of paper packaging business and decline in e-cigarette sales | | Gross Profit | 57.8 | 153.6 | -62.3% | | | Gross Margin | 22.2% | 20.7% | +1.5% | Primarily due to disposal of less profitable paper packaging business | | Loss/Profit Attributable to Owners of the Company | (16.8) | 14.8 | Shifted from profit to loss | | | Average Trade and Bills Receivables Turnover Days | 139 days | 74 days (End of 2024) | Increased by 65 days | | | Average Trade and Bills Payables Turnover Days | 104 days | 124 days (End of 2024) | Decreased by 20 days | | | Average Inventory Turnover Days | 79 days | 51 days (End of 2024) | Increased by 28 days | | | Interim Dividend | Not recommended for distribution | None | - | | [Company Information](index=4&type=section&id=Company%20Information) - The Board of Directors includes Executive Directors Mr. Yang Yong'an (Chairman) and Mr. Li Lin, Non-executive Director Mr. Yang Fan, and Independent Non-executive Directors Mr. Gong Jinjun, Mr. Wang Ping, and Ms. Guo Wei; Mr. Feng Bin resigned as a Non-executive Director on **20 June 2025**[6](index=6&type=chunk) - The Company's registered office is in the Cayman Islands, its China headquarters are in Shenzhen, Guangdong Province, and its principal place of business in Hong Kong is in Causeway Bay[6](index=6&type=chunk) - The Company has an Audit Committee, Remuneration Committee, and Nomination Committee, and has published its company website and primary banking relationship information[6](index=6&type=chunk) [Chairman's Statement](index=5&type=section&id=Chairman's%20Statement) The Chairman's Statement outlines the complex and challenging global operating environment in H1 2025, particularly the tightening regulations and market volatility in the e-cigarette industry. The Group adopted a prudent strategy, focusing on operational resilience, supply chain consolidation, and strategic cooperation, while increasing investment in proprietary brands to navigate challenges and achieve sustainable long-term development [Global Operating Environment and Industry Challenges](index=5&type=section&id=Global%20Operating%20Environment%20and%20Industry%20Challenges) In H1 2025, the global economic environment was complex, with inflationary pressures, geopolitical friction, and market volatility dampening industry activity and investment sentiment. The e-cigarette industry faced an increasingly fragmented and stringent regulatory network, leading to restricted market access and logistical disruptions, directly impacting the Group's operations - Global operating environment in H1 2025 was complex and challenging, marked by entrenched inflationary pressures, significant geopolitical friction, and notable market volatility[9](index=9&type=chunk) - The global e-cigarette industry faces an increasingly fragmented and stringent regulatory network, with strict compliance frameworks implemented across jurisdictions worldwide, directly impacting market access and causing logistical disruptions[9](index=9&type=chunk) [Group Strategic Response and Future Outlook](index=5&type=section&id=Group%20Strategic%20Response%20and%20Future%20Outlook) Facing external pressures, the Group's management actively monitored the regulatory environment, implementing targeted strategic measures to maintain operational integrity, consolidate the supply chain, and preserve core market relationships. Future development will be guided by prudent principles, strengthening financial resilience, optimizing operational efficiency, and increasing investment in proprietary brand development and production to adapt to global e-cigarette regulatory fluctuations and international trade disputes - The Group actively monitors the evolving regulatory environment, implementing strategic responses to maintain operational integrity, consolidate the supply chain, and preserve core market relationships[9](index=9&type=chunk) - The Group has expanded close cooperation with key local distributors in various countries and regions, and increased investment in proprietary brand development and production based on local consumer preferences and e-cigarette product regulations[10](index=10&type=chunk) - Looking ahead, the Group will adopt a more conservative approach to capital allocation and risk management, focusing on strengthening financial resilience, optimizing operational efficiency, and only pursuing strategic initiatives that offer clear and reliable returns to achieve sustainable, long-term stable development[12](index=12&type=chunk) [Management Discussion and Analysis](index=7&type=section&id=Management%20Discussion%20and%20Analysis) This section details the macroeconomic headwinds and e-cigarette industry challenges faced by the Group in H1 2025, reviewing its business performance and financial position. The Group responded to market changes by adjusting sales strategies, strengthening operational management, optimizing product portfolios, and expanding distribution networks, but performance was still significantly affected, resulting in a shift from profit to loss. Future focus will remain on compliance, innovation, and global market expansion [Market Review](index=7&type=section&id=Market%20Review) In H1 2025, global economic growth was weak, with global GDP growth projected to slow due to geopolitical tensions, restrictive financial conditions, and a fragmented trade environment. China's economy showed moderate resilience but consumer confidence was low, and the real estate sector continued to drag down investment. The global e-cigarette industry faced increased regulatory scrutiny in North American and European markets, and maturing tax frameworks and comprehensive legislation in the Asia-Pacific region, leading to increased compliance costs and market access challenges - Global economic growth was weak in H1 2025, with the IMF projecting global GDP growth to slow from **3.3%** in 2024 to approximately **3.0%** in 2025[15](index=15&type=chunk) - China's economy grew by **5.3%** in H1 2025, but depressed consumer confidence and the real estate sector continued to drag down investment sentiment, with deflationary trends highlighting domestic demand weaknesses[15](index=15&type=chunk) - The global e-cigarette industry faces increased regulatory scrutiny in North American and European markets, and maturing tax frameworks and comprehensive legislation in the Asia-Pacific region (e.g., Malaysia, Philippines, Indonesia), leading to increased compliance costs and market access challenges[16](index=16&type=chunk) [Business Review](index=7&type=section&id=Business%20Review) In H1 2025, the Group's performance was significantly impacted by macroeconomic and industry headwinds, leading to restricted demand for non-essential goods. The Group executed a dual-pronged strategy, strengthening operational resilience, strictly managing efficiency and inventory, and pursuing strategic market diversification. Concurrently, it focused on commercial risks, collaborating with local distributors to ensure products met consumer preferences and regulatory environments. The Group continued to drive innovation, optimize production line efficiency, increase investment in core technology R&D, and implement stringent cost control measures [Sales and Distribution](index=8&type=section&id=Sales%20and%20Distribution) During the review period, the Group's revenue contracted due to macroeconomic uncertainties and tightening e-cigarette regulations. The Group managed operational headwinds by strategically optimizing its inventory portfolio, adjusting production volumes, and re-aligning labor cost allocation, while committing to strategic investments in global market development and brand positioning to solidify future market leadership - Group revenue contraction is a direct result of macroeconomic uncertainties and increasingly stringent and divergent regulatory frameworks for e-cigarette products in major international markets[20](index=20&type=chunk) - The Group strategically optimized its inventory portfolio to align with evolving demand patterns and optimized production volumes, and re-aligned labor cost allocation[20](index=20&type=chunk) - The Group is committed to strategic and forward-looking investments in global market development and brand positioning, maintaining a strong presence in key markets across Europe, the Americas, and Asia through establishing strategic relationships with key local distributors in target markets[20](index=20&type=chunk) [Product Research, Development and Design](index=8&type=section&id=Product%20Research%2C%20Development%20and%20Design) The Group continuously drives innovation, leveraging advanced production lines and facilities to produce mid-to-high-end products to maintain market leadership. During the reporting period, the Group reviewed its product development technologies, fully considering automation production requirements during the design phase to enhance product manufacturability and the feasibility of automation implementation - The Group leverages its technological expertise and development achievements, including advanced production lines and state-of-the-art manufacturing facilities, aiming to maximize production capacity for mid-to-high-end products[21](index=21&type=chunk) - During the reporting period, the Group reviewed its product development technologies, fully considering product manufacturability and automation integration requirements during the product design phase to enhance manufacturability and feasibility of automation implementation[21](index=21&type=chunk) [Technology Development and Quality Control](index=9&type=section&id=Technology%20Development%20and%20Quality%20Control) The Group adheres to the philosophy of "management innovation and system leadership," continuously increasing investment in core technology R&D and improving management levels. Proprietary brand e-cigarettes gained rapid customer recognition and achieved satisfactory sales growth during the reporting period due to high safety and better user experience. Concurrently, the Group actively implements environmental protection measures, controlling raw materials and manufacturing processes to provide high-quality, safe, and environmentally friendly products - The Group advocates the philosophy of "management innovation and system leadership," continuously increasing investment in core technology R&D and constantly improving management levels[23](index=23&type=chunk) - Proprietary brand e-cigarettes quickly gained recognition from multiple customers due to high safety and better user experience, and achieved satisfactory sales growth during the reporting period[23](index=23&type=chunk) - The Group actively implements environmental protection measures, including strict environmental indicators, controlling raw material and auxiliary material input and manufacturing processes, to provide high-quality, safe, and environmentally friendly products[23](index=23&type=chunk) [Cost Control](index=9&type=section&id=Cost%20Control) The Group is committed to integrating core businesses and controlling costs by optimizing processes and materials, improving productivity, introducing new suppliers, and conducting competitive negotiations to reduce raw material costs. Additionally, measures such as rolling inventory preparation and consolidating production orders for increased batch production have strengthened control over production processes, effectively enhancing production efficiency - The Group adopts strategies such as optimizing processes and materials, improving productivity, introducing new suppliers, and conducting competitive negotiations to reduce raw material costs[24](index=24&type=chunk) - The Group strengthens control over production processes and drives improvements in production efficiency through measures such as rolling inventory preparation, consolidating production orders for increased batch production, reducing production costs, and preventing inefficiencies caused by secondary loading due to insufficient delivery quantities[24](index=24&type=chunk) [Financial Review](index=9&type=section&id=Financial%20Review) This section provides a detailed review of the Group's financial performance in H1 20

[Company Information](index=3&type=section&id=%E5%85%AC%E5%8F%B8%E8%B3%87%E6%96%99) [Board of Directors and Supervisors](index=3&type=section&id=%E8%91%A3%E4%BA%8B%E5%8F%8A%E7%9B%A3%E4%BA%8B%E6%9C%83%E6%88%90%E5%93%A1) The company's Board of Directors comprises executive, non-executive, and independent non-executive directors, with established audit, nomination, and remuneration committees, and lists its Supervisory Board members - Board members include Mr. Gao Feng (Chairman), Mr. Yuan Yuan, Mr. Zhang Jia'an, Mr. Yao Jun, Ms. Shen Zhigen, Ms. Ni Jingjing, Mr. Wang Fei (Executive Directors); Ms. Wei Yan (Non-executive Director); Mr. Lin Jiade, Mr. Zheng Manjun, Mr. Zheng Yu, Mr. Zhu Bo (Independent Non-executive Directors)[6](index=6&type=chunk) - Supervisory Board members include Ms. Zhan Mingyu, Mr. Xia Zhonglin, and Ms. Zhu Aizhen[6](index=6&type=chunk) - The Audit Committee is chaired by Mr. Lin Jiade, the Nomination Committee by Mr. Zheng Manjun, and the Remuneration Committee by Mr. Zheng Yu[6](index=6&type=chunk) [Company Secretary, Auditor, and Legal Advisors](index=3&type=section&id=%E5%85%AC%E5%8F%B8%E7%A7%98%E6%9B%B8%E3%80%81%E6%A0%B8%E6%95%B8%E5%B8%AB%E5%8F%8A%E6%B3%95%E5%BE%8B%E9%A1%A7%E5%95%8F) The company has appointed joint company secretaries, KPMG as auditor, and engaged Glory Capital Limited as compliance advisor, with DeHeng Law Offices (Hong Kong) LLP and Beijing Deheheng Law Firm as legal advisors - Joint Company Secretaries are Ms. Xu Chunling and Mr. Xu Hongqun[7](index=7&type=chunk) - The auditor is KPMG[7](index=7&type=chunk) - The compliance advisor is Glory Capital Limited, Hong Kong legal advisor is DeHeng Law Offices (Hong Kong) LLP, and PRC legal advisor is Beijing Deheheng Law Firm[8](index=8&type=chunk) [Registered Office and Principal Places of Business](index=4&type=section&id=%E8%A8%BB%E5%86%8A%E8%BE%A6%E4%BA%8B%E8%99%95%E5%8F%8A%E4%B8%BB%E8%A6%81%E7%87%9F%E6%A5%AD%E5%9C%B0%E9%BB%9E) The company's registered office and principal place of business in China are located in Shaobo Town Industrial Concentration Zone Logistics Park, Jiangdu District, Yangzhou City, Jiangsu Province, with its principal place of business in Hong Kong at 28/F, Hennessey Building, 5 Queen's Road Central - Registered office and principal place of business in China: Logistics Park, Shaobo Town Industrial Concentration Zone, Jiangdu District, Yangzhou City, Jiangsu Province, PRC[8](index=8&type=chunk) - Principal place of business in Hong Kong: 28/F, Hennessey Building, 5 Queen's Road Central, Hong Kong[8](index=8&type=chunk) [H Share Registrar and Principal Bankers](index=4&type=section&id=H%E8%82%A1%E9%81%8E%E6%88%B6%E7%99%BB%E8%A8%98%E8%99%95%E5%8F%8A%E4%B8%BB%E8%A6%81%E5%BE%80%E4%BE%86%E9%8A%80%E8%A1%8C) The H share registrar is Hong Kong Registrars Limited, and principal bankers include Agricultural Bank of China, Bank of China, China Construction Bank, Agricultural Development Bank of China, and Jiangsu Jiangdu Rural Commercial Bank - H Share Registrar: Hong Kong Registrars Limited[8](index=8&type=chunk) - Principal bankers: Agricultural Bank of China Yangzhou Jiangdu Sub-branch, Bank of China Jiangdu Sub-branch, China Construction Bank Corporation Jiangdu Sub-branch, Agricultural Development Bank of China Yangzhou Jiangdu District Sub-branch, and Jiangsu Jiangdu Rural Commercial Bank Co., Ltd[8](index=8&type=chunk)[10](index=10&type=chunk) [Company Website and Listing Information](index=5&type=section&id=%E5%85%AC%E5%8F%B8%E7%B6%B2%E7%AB%99%E5%8F%8A%E4%B8%8A%E5%B8%82%E4%BF%A1%E6%81%AF) The company's website is www.hxsupermarket.cn, with stock code 2625 and listing date of March 31, 2025 - Company website: www.hxsupermarket.cn[10](index=10&type=chunk) - Stock code: **2625**[10](index=10&type=chunk) - Listing date: March 31, 2025[10](index=10&type=chunk) [Management Discussion and Analysis](index=6&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%A4%E8%A8%8E%E8%AB%96%E5%8F%8A%E5%88%86%E6%9E%90) [Business Review and Outlook](index=6&type=section&id=%E6%A5%AD%E5%8B%99%E5%9B%9E%E9%A1%A7%E5%8F%8A%E5%B1%95%E6%9C%9B) The company, a grain and oil wholesaler, operates "Hongxinlong" brand supermarkets and convenience stores in central Jiangsu, with a central kitchen for meal supply, actively expanding omni-channel retail, smart unmanned stores, and logistics, while planning to increase market share, warehousing, and meal processing capacity, and enhancing its ERP system - The company's main businesses include grain and oil wholesale, operating "Hongxinlong" brand supermarkets and convenience stores, mall sales (fashion, cosmetics, home appliances, etc.), leasing, and central kitchen meal supply[11](index=11&type=chunk)[12](index=12&type=chunk)[13](index=13&type=chunk)[14](index=14&type=chunk) - In the first half of 2025, the company's total revenue was **RMB 771.3 million**, a year-on-year increase of **16.2%**, primarily from retail, wholesale, and meal supply[16](index=16&type=chunk) - Future strategies include expanding market share and retail store count, establishing new distribution centers to increase warehousing capacity, building new central kitchens to expand meal processing capacity, and enhancing ERP and infrastructure systems to improve operational efficiency[18](index=18&type=chunk) [Market and Industry Overview](index=7&type=section&id=%E5%B8%82%E5%9C%BA%E5%8F%8A%E8%A1%8C%E4%B8%9A%E6%A6%82%E8%A7%88) China's retail sector accelerated its shift to omni-channel in 2023 amid economic recovery, with online retail growing, while chain supermarkets declined but small-to-medium formats showed resilience, and convenience stores saw strong growth, facing opportunities in a large consumer base and technology integration, but challenges from e-commerce and operating costs - China's economy recovered in 2023, with **GDP growth of 5.2%** and an increase in per capita disposable income, supporting consumer spending[17](index=17&type=chunk) - Retail formats accelerated their transformation to omni-channel strategies, with online retail accounting for **32.7%** in 2023[17](index=17&type=chunk) China Retail Market Compound Annual Growth Rate (CAGR) | Market Type | 2017-2023 CAGR | 2024-2027 Estimated CAGR | | :------- | :--------------- | :------------------- | | China Chain Supermarkets | -1.28% | 1.43% | | Jiangsu Province Small-to-Medium Chain Supermarkets | 15.7% | 8.7% | | Yangzhou City Small-to-Medium Supermarkets | 14.6% | 4.7% | | National Convenience Stores | 14.3% | 9.0% | | Yangzhou Convenience Stores | 14.3% | 8.0% | - Key opportunities include China's vast consumer base, urbanization, increasing demand for quality and fresh goods, and technological integration (omni-channel)[20](index=20&type=chunk) - Major challenges include intense market competition (especially e-commerce), shifting consumer preferences, and managing operating costs such as labor and rent[20](index=20&type=chunk) [Financial Review](index=8&type=section&id=%E8%B2%A1%E5%8B%99%E5%9B%9E%E9%A1%A7) For the six months ended June 30, 2025, total revenue increased by 16.2% to RMB 771.3 million, driven by wholesale and retail bulk sales, but gross profit decreased by 6.7% to RMB 138.9 million, with gross margin falling to 18.0% due to rising grain and oil costs, declining high-end liquor sales, and increased promotions, resulting in a 26.6% decrease in profit for the period to RMB 13.5 million, mainly due to increased listing expenses Key Financial Indicators for H1 2025 | Indicator | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | Y-o-Y Change | | :--- | :----------------------- | :----------------------- | :------- | | Revenue | 771,288 | 663,625 | +16.2% | | Cost of Sales | (632,409) | (514,765) | +22.9% | | Gross Profit | 138,879 | 148,860 | -6.7% | | Gross Margin | 18.0% | 22.4% | -4.4 percentage points | | Profit for the Period | 13,516 | 18,421 | -26.6% | [Revenue](index=8&type=section&id=%E6%94%B6%E5%85%A5) Total revenue increased by 16.2% year-on-year to RMB 771.3 million, with wholesale revenue up 24.1% to RMB 441.1 million due to market expansion, retail bulk sales surging 104.0% to RMB 33.9 million from group purchasing, and meal supply revenue soaring 409.8% to RMB 13.9 million as schools resumed catering bids, while operating lease rental income decreased by 12.9% to RMB 7.0 million Revenue Composition and Changes | Revenue Source | H1 2025 (RMB million) | H1 2024 (RMB million) | Y-o-Y Change | | :------- | :----------------------- | :----------------------- | :------- | | Total Revenue | 771.3 | 663.6 | +16.2% | | Wholesale Revenue | 441.1 | 355.5 | +24.1% | | Retail General Sales Revenue | 261.6 | 262.0 | Stable | | Retail Bulk Sales Revenue | 33.9 | 16.6 | +104.0% | | Meal Supply and Sales Revenue | 13.9 | 2.7 | +409.8% | | Operating Lease Rental Income | 7.0 | 8.0 | -12.9% | - Wholesale revenue growth was primarily due to the introduction of various brands and specifications of grain and oil, and the gradual expansion into the northern Jiangsu grain and oil wholesale market[21](index=21&type=chunk) - The increase in retail bulk sales revenue was mainly due to active expansion of group purchasing business with local enterprises and government agencies[21](index=21&type=chunk) - The increase in meal supply revenue was mainly due to some schools resuming catering tender processes in the second half of 2024[23](index=23&type=chunk) [Cost of Sales](index=9&type=section&id=%E9%94%80%E5%94%AE%E6%88%90%E6%9C%AC) For the six months ended June 30, 2025, cost of sales increased by 22.9% year-on-year to RMB 632.4 million, primarily due to higher wholesale and bulk sales costs in the retail business Cost of Sales | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | Y-o-Y Change | | :--- | :----------------------- | :----------------------- | :------- | | Cost of Sales | 632.4 | 514.8 | +22.9% | - The increase in cost of sales was primarily attributable to higher wholesale and bulk sales costs in the retail business[24](index=24&type=chunk) [Gross Profit and Gross Margin](index=9&type=section&id=%E6%AF%9B%E5%88%A9%E5%8F%8A%E6%AF%9B%E5%88%A9%E7%8E%87) Gross profit decreased by 6.7% year-on-year to RMB 138.9 million, with gross margin falling by 4.4 percentage points to 18.0%, mainly due to slight increases in grain and oil costs, lower gross margins for new grain and oil categories, decreased sales of high-end liquor (affected by alcohol ban), and increased promotional activities Gross Profit and Gross Margin | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | Y-o-Y Change | | :--- | :----------------------- | :----------------------- | :------- | | Gross Profit | 138.9 | 148.9 | -6.7% | | Gross Margin | 18.0% | 22.4% | -4.4 percentage points | - The decrease in gross margin was mainly due to a slight increase in grain and oil costs and lower gross margins for new grain and oil categories; a decline in high-end liquor sales volume due to the alcohol ban issued by the PRC central government; and a decrease in retail business gross margin due to holiday promotions and post-listing "promotion frenzy"[25](index=25&type=chunk) [Other Income and Net Gains](index=9&type=section&id=%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5%E5%8F%8A%E6%94%B6%E7%9B%8A%E6%B7%A8%E9%A1%8D) Other income increased to RMB 3.4 million, primarily due to higher service income and government grants, while net other gains decreased to RMB 0.4 million, mainly from lower net exchange gains Other Income and Net Gains | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | Y-o-Y Change | | :--- | :----------------------- | :----------------------- | :------- | | Other Income | 3.4 | 2.5 | +36.0% | | Net Other Gains | 0.4 | 1.0 | -60.0% | - The increase in other income was mainly due to higher service income from processing meals for two catering operators in Yangzhou and increased government grants[26](index=26&type=chunk) - The decrease in net other gains was mainly due to lower net exchange gains[27](index=27&type=chunk) [Selling and Distribution Costs](index=10&type=section&id=%E9%8A%B7%E5%94%AE%E5%8F%8A%E5%88%86%E9%8A%B7%E6%88%90%E6%9C%AC) Selling and distribution costs decreased by 5.5% year-on-year to RMB 75.1 million, primarily due to reduced staff costs Selling and Distribution Costs | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | Y-o-Y Change | | :--- | :----------------------- | :----------------------- | :------- | | Selling and Distribution Costs | 75.1 | 79.5 | -5.5% | - The decrease in selling and distribution costs was mainly due to reduced staff costs[28](index=28&type=chunk) [Administrative and Other Operating Expenses](index=10&type=section&id=%E8%A1%8C%E6%94%BF%E5%8F%8A%E5%85%B6%E4%BB%96%E9%81%8B%E7%87%9F%E9%96%8B%E6%94%AF) Administrative and other operating expenses increased by 7.1% year-on-year to RMB 32.7 million, primarily due to higher listing expenses, partially offset by reduced staff costs Administrative and Other Operating Expenses | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | Y-o-Y Change | | :--- | :----------------------- | :----------------------- | :------- | | Administrative and Other Operating Expenses | 32.7 | 30.5 | +7.1% | - The increase in administrative and other operating expenses was mainly due to higher listing expenses, partially offset by reduced staff costs[29](index=29&type=chunk) [Impairment Loss on Trade and Other Receivables](index=10&type=section&id=%E8%B2%BF%E6%98%93%E5%8F%8A%E5%85%B6%E4%BB%96%E6%87%89%E6%94%B6%E6%AC%BE%E9%A0%85%E6%B8%9B%E5%80%BC%E虧%E6%90%8D) Impairment loss on financial assets decreased by RMB 1.5 million year-on-year to RMB 2.9 million, primarily due to a reduction in trade receivables Impairment Loss on Financial Assets | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | Y-o-Y Change | | :--- | :----------------------- | :----------------------- | :------- | | Impairment Loss | 2.9 | 4.3 | -1.5 | - The decrease in impairment loss was mainly due to a reduction in trade receivables compared to the same period last year[30](index=30&type=chunk) [Net Finance Costs](index=10&type=section&id=%E8%9E%8D%E8%B3%87%E6%88%90%E6%9C%AC%E6%B7%A8%E9%A1%8D) Net finance costs decreased by RMB 2.2 million year-on-year to RMB 9.2 million, primarily due to increased interest income from bank deposits and reduced interest expenses on lease liabilities Net Finance Costs | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | Y-o-Y Change | | :--- | :----------------------- | :----------------------- | :------- | | Net Finance Costs | 9.2 | 11.4 | -2.2 | - The decrease in net finance costs was mainly due to increased interest income from bank deposits and reduced interest expenses on lease liabilities[31](index=31&type=chunk) [Income Tax](index=10&type=section&id=%E6%89%80%E5%BE%97%E7%A8%85) Income tax expense increased year-on-year to RMB 9.3 million, primarily due to higher non-deductible listing expenses Income Tax Expense | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | Y-o-Y Change | | :--- | :----------------------- | :----------------------- | :------- | | Income Tax Expense | 9.3 | 8.3 | +1.0 | - The increase in income tax expense was mainly due to higher non-deductible listing expenses[32](index=32&type=chunk) [Profit for the Period](index=10&type=section&id=%E6%9C%9F%E5%85%A7%E6%BA%A2%E5%88%A9) Profit for the period decreased by 26.6% year-on-year to RMB 13.5 million, primarily due to increased listing expenses Profit for the Period | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | Y-o-Y Change | | :--- | :----------------------- | :----------------------- | :------- | | Profit for the Period | 13.5 | 18.4 | -26.6% | - The decrease in profit for the period was mainly due to increased listing expenses[33](index=33&type=chunk) [Non-IFRS Measures](index=11&type=section&id=%E9%9D%9E%E5%9C%8B%E9%9A%9B%E8%B2%A1%E5%8B%99%E5%A0%B1%E5%91%8A%E6%BA%96%E5%89%87%E8%A8%88%E9%87%8F) To provide a more comprehensive view of operational performance, the company presents adjusted net profit and adjusted net profit margin (non-IFRS measures), which add back listing expenses, with adjusted net profit at RMB 26.1 million and adjusted net profit margin at 3.4% for the six months ended June 30, 2025 - Non-IFRS measures (adjusted net profit and adjusted net profit margin) aim to provide a more comprehensive view of operating performance, especially when comparing periods and evaluating the overall operating and financial performance[35](index=35&type=chunk)[36](index=36&type=chunk) - Listing expenses are added back as they are incurred solely due to the listing[36](index=36&type=chunk) Adjusted Net Profit and Net Profit Margin (Non-IFRS Measures) | Indicator | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :----------------------- | :----------------------- | | Profit for the Period | 13,516 | 18,421 | | Adjusted for: Listing Expenses | 12,552 | 7,040 | | Adjusted Net Profit for the Period | 26,068 | 25,461 | | Adjusted Net Profit Margin | 3.4% | 3.8% | [Financial Position](index=12&type=section&id=%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81) As of June 30, 2025, shareholders' equity increased to RMB 662.5 million, driven by global offering and profit for the period, with a current ratio of approximately 1.41 indicating sound liquidity, a gearing ratio of approximately 86.0%, and a debt-to-asset ratio of approximately 59.7%, while capital expenditure for the period was RMB 71.3 million, mainly for property, plant, and equipment acquisition Key Financial Position Indicators | Indicator | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | | :--- | :----------------------- | :----------------------- | | Shareholders' Equity | 662.5 | 540.9 | | Cash and Cash Equivalents | 167.9 | 216.9 | | Total Current Assets | 1,212.3 | 1,056.6 | | Total Current Liabilities | 861.9 | 774.6 | | Current Ratio | 1.41 | 1.36 | | Gearing Ratio | 86.0% | 86.6% | | Debt-to-Asset Ratio | 59.7% | - | - The increase in shareholders' equity was mainly due to the global offering and profit for the reporting period[38](index=38&type=chunk) - For the six months ended June 30, 2025, net cash used in operating activities was approximately **RMB 141.8 million** (H1 2024: RMB 45.4 million)[39](index=39&type=chunk) - Capital expenditure amounted to **RMB 71.3 million**, mainly comprising the acquisition of property, plant and equipment, financial assets measured at fair value through other comprehensive income, and interests in associates[43](index=43&type=chunk) - The Group pledged land use rights with a net book value of **RMB 27.6 million** and buildings with a net book value of **RMB 28.7 million** as collateral for bank loans and other borrowings totaling **RMB 376.8 million**[44](index=44&type=chunk) - As of June 30, 2025, the company had no contingent liabilities, and controlling shareholders had not pledged any shares[45](index=45&type=chunk)[46](index=46&type=chunk) [Significant Acquisitions and Disposals of Subsidiaries, Associates, and Joint Ventures](index=14&type=section&id=%E9%87%8D%E5%A4%A7%E6%94%B6%E8%B3%BC%E5%8F%8A%E5%87%BA%E5%94%AE%E9%99%84%E5%B1%AC%E5%85%AC%E5%8F%B8%E3%80%81%E8%81%AF%E7%87%9F%E5%85%AC%E5%8F%B8%E5%8F%8A%E5%90%88%E7%87%9F%E4%BC%81%E6%A5%AD) During the reporting period, the Group invested RMB 25.0 million in Haike Hongxin Digital Technology (Jiangsu) Co., Ltd. (18% stake) and HKD 20.0 million (approximately RMB 18.3 million) in Han Hong Holdings Limited (40% stake), with Haike classified as a financial asset measured at fair value through other comprehensive income and Han Hong as an associate accounted for using the equity method - Investment of **RMB 25.0 million** in Haike Hongxin Digital Technology (Jiangsu) Co., Ltd., holding an **18%** equity interest, classified as a financial asset measured at fair value through other comprehensive income[48](index=48&type=chunk) - Investment of **HKD 20.0 million** (approximately **RMB 18.3 million**) in Han Hong Holdings Limited, holding a **40%** equity interest, classified as an associate and accounted for using the equity method[48](index=48&type=chunk) - Haike is primarily engaged in providing IT-related information services, while Han Hong is mainly engaged in providing business consulting services[48](index=48&type=chunk) [Future Plans for Material Investments and Capital Assets](index=14&type=section&id=%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B3%87%E5%8F%8A%E8%B3%87%E6%9C%AC%E8%B3%87%E7%94%A2%E7%9A%84%E6%9C%AA%E4%BE%86%E8%A8%88%E5%8A%83) As of June 30, 2025, the company has no other material investment and capital asset plans beyond those disclosed in the "Future Plans and Use of Proceeds" section of the prospectus - As of June 30, 2025, the company had no plans for material investments and capital assets other than those disclosed in the "Future Plans and Use of Proceeds" section of the prospectus[50](index=50&type=chunk) [Risks of Foreign Currency Exchange Rate Fluctuations](index=14&type=section&id=%E5%A4%96%E5%B9%A3%E5%8C%AF%E7%8E%87%E6%B3%A2%E5%8B%95%E7%9A%84%E9%A2%A8%E9%9A%AA) The Group's assets, liabilities, and cash flows are primarily denominated in RMB, with some in HKD, and management believes RMB exchange rate fluctuations against foreign currencies have no material impact on its financial position or performance, with no hedging activities undertaken during the reporting period - The majority of the Group's assets, liabilities, and cash flows are denominated in RMB, with some assets denominated in HKD[51](index=51&type=chunk) - Management believes that changes in the RMB exchange rate against foreign currencies have no material impact on the Group's financial position and performance[51](index=51&type=chunk) - For the six months ended June 30, 2025, the Group did not undertake any hedging activities and has no intention to do so in the foreseeable future[51](index=51&type=chunk) [Material Investments and Significant Events During the Reporting Period](index=14&type=section&id=%E5%A0%B1%E5%91%8A%E6%9C%9F%E5%85%A7%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B3%87%E5%8F%8A%E9%87%8D%E5%A4%A7%E4%BA%8B%E4%BB%B6) As of June 30, 2025, the Group had not made any material investments (5% or more of total assets) - As of June 30, 2025, the Group had not made any material investments (including any investment value in investee companies accounting for 5% or more of the Group's total assets as of June 30, 2025)[52](index=52&type=chunk) [Events After the Reporting Period](index=15&type=section&id=%E5%A0%B1%E5%91%8A%E6%9C%9F%E5%BE%8C%E4%BA%8B%E9%A0%85) Except as disclosed in this report, no other material events affecting the Group occurred after the reporting period up to the latest practicable date - Except as disclosed in this report, no other material events affecting the Group occurred after June 30, 2025, and up to the latest practicable date[54](index=54&type=chunk) [Employees and Remuneration Policy](index=15&type=section&id=%E5%83%B1%E5%93%A1%E5%8F%8A%E8%96%AA%E9%85%AC%E6%94%BF%E7%AD%96) As of June 30, 2025, the company had 1,412 employees, with total employee benefits amounting to RMB 43.7 million, a year-on-year decrease, providing social insurance and housing provident fund contributions, basic salaries, and discretionary bonuses, despite past non-compliance in underpaying contributions without administrative action or penalties Number of Employees and Total Employee Benefits | Indicator | June 30, 2025 | June 30, 2024 | | :--- | :------------- | :------------- | | Total Employees | 1,412 people | - | | Total Employee Benefits | RMB 43.7 million | RMB 52.2 million | - Total employee benefits (including directors' emoluments) decreased year-on-year, mainly due to reduced staff costs[55](index=55&type=chunk) - The company contributes to five types of social insurance and housing provident fund for its employees in accordance with China's social insurance system[57](index=57&type=chunk) - The company had instances of non-compliance in failing to pay full social insurance and housing provident fund contributions for all employees, but has not been subject to administrative actions, fines, or penalties by government authorities[57](index=57&type=chunk) [Recruitment Policy and Training](index=16&type=section&id=%E6%8B%9B%E8%81%98%E6%94%BF%E7%AD%96%E5%8F%8A%E5%9F%B9%E8%A8%93) The company primarily recruits employees through the open market, providing mandatory new employee induction training and regular customized training for management and frontline staff to enhance retention and cultivate managerial talent, with no significant labor disputes during the reporting period - The company generally recruits employees from the open market by publishing recruitment advertisements and continuously assesses human resource needs[58](index=58&type=chunk) - Mandatory training for new employees (company introduction and work procedures) and store manager training are provided, along with regular and tailored training for management and frontline staff to cultivate candidates for promotion[59](index=59&type=chunk) - During the reporting period and up to the latest practicable date, the company experienced no strikes or significant labor disputes, nor did it encounter any material difficulties in recruiting or retaining qualified employees[59](index=59&type=chunk) [Corporate Governance and Other Information](index=17&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%8F%8A%E5%85%B6%E4%BB%96%E8%B3%87%E6%96%99) [Corporate Governance](index=17&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB) The company has adopted and complied with all principles and applicable code provisions of the Corporate Governance Code in Appendix C1 of the Listing Rules since its listing date, committed to maintaining high standards of corporate governance - The company has adopted and complied with all principles and applicable code provisions of the Corporate Governance Code set out in Appendix C1 to the Listing Rules since its listing date[61](index=61&type=chunk) - The Board will continue to review corporate governance policies and compliance to maintain high standards of corporate governance[61](index=61&type=chunk) [Material Legal Proceedings](index=17&type=section&id=%E9%87%8D%E5%A4%A7%E6%B3%95%E5%BE%8B%E8%A8%B4%E8%A8%9F) During the reporting period, no Group member companies were involved in any material litigation, arbitration, or claims, nor were there any pending or threatened material legal disputes to the directors' knowledge - During the reporting period, no member companies of the Group were involved in any material litigation, arbitration, or claims, and to the best knowledge of the directors, no member companies of the Group had any pending or threatened material litigation, arbitration, or claims[62](index=62&type=chunk) [Audit Committee](index=17&type=section&id=%E5%AF%A9%E8%A8%88%E5%A7%94%E5%93%A1%E6%9C%83) The Audit Committee, comprising four independent non-executive directors and one non-executive director, has reviewed and confirmed the unaudited interim condensed consolidated results for the six months ended June 30, 2025, deeming them compliant with relevant accounting standards, rules, and regulations - The Audit Committee comprises Mr. Lin Jiade (Chairman), Mr. Zheng Manjun, Mr. Zheng Yu, Mr. Zhu Bo (Independent Non-executive Directors), and Ms. Wei Yan (Non-executive Director)[63](index=63&type=chunk) - The Audit Committee has reviewed the unaudited interim condensed consolidated results for the six months ended June 30, 2025, and confirmed compliance with applicable accounting principles, standards, and requirements, with adequate disclosures made[63](index=63&type=chunk) [Interim Dividend](index=18&type=section&id=%E4%B8%AD%E6%9C%9F%E8%82%A1%E6%81%AF) The Board of Directors recommends not to declare an interim dividend for the six months ended June 30, 2025 - The Board recommends not to declare an interim dividend for the six months ended June 30, 2025 (for the six months ended June 30, 2024: nil)[64](index=64&type=chunk) [Compliance with Laws and Regulations](index=18&type=section&id=%E9%81%B5%E5%AE%88%E6%B3%95%E5%BE%8B%E6%B3%95%E8%A6%8F) Except for the "non-compliance" matters disclosed in the prospectus, the Group has complied in all material respects with relevant laws and regulations significantly affecting it during the reporting period - Except for those disclosed in the "Business - Non-compliance" section of the prospectus, the Group has complied in all material respects with relevant laws and regulations that have a significant impact on the Group during the reporting period[65](index=65&type=chunk) [Central Kitchen Relocation Plan](index=18&type=section&id=%E4%B8%AD%E5%A4%AE%E5%BB%9A%E6%88%BF%E6%90%AC%E9%81%B7%E8%A8%88%E5%8A%83) The company initially planned to relocate its Muyuan Central Kitchen due to defective land and property, but after receiving official confirmation from Shaobo Town People's Government around June 2025 that the land met planning requirements and assistance would be provided for land use conversion, the company decided to temporarily suspend the relocation and instead pursue the legalization of property rights for the defective property and related land - The company originally planned to relocate the Muyuan Central Kitchen because it was located on defective land and property for which land use rights certificates and property ownership certificates could not be obtained[66](index=66&type=chunk) - Around June 2025, the company received an official confirmation letter from the Shaobo Town People's Government, stating that the defective land met the village and town land planning requirements and was primarily used for vegetable processing and central kitchen purposes[68](index=68&type=chunk) - The Shaobo Town People's Government will assist the company in completing the procedures for converting agricultural land use, expected to be finalized by the end of December 2026, and confirmed that the company has not been subject to any penalties for land, property, construction, fire safety, or other related matters[68](index=68&type=chunk)[69](index=69&type=chunk) - Given the confirmation letter and the path to legalizing property rights, the company has decided to temporarily suspend the central kitchen relocation plan and instead proceed with obtaining land use rights and property ownership for the defective property and related land[69](index=69&type=chunk) [Gongnong Road Defective Property](index=20&type=section&id=%E5%B7%A5%E8%BE%B2%E8%B7%AF%E7%91%B6%E7%96%B5%E7%89%A9%E6%A5%AD) The defective portion of Gongnong Road property, lacking property ownership certificates, was primarily used for storage, but its storage activities were relocated to other validly certified areas within the same building before the listing date, rendering this defective portion idle - The defective portion of Gongnong Road property, approximately **2,500 square meters** in area, lacked property ownership certificates due to temporary structures not obtaining necessary permits and acceptance procedures, and was primarily used for storage[70](index=70&type=chunk) - The relocation of storage functions from the defective portion of Gongnong Road property was completed before the listing date, and this area has become an idle property with no operational activities[70](index=70&type=chunk) [Continuing Disclosure Obligations under Listing Rules](index=20&type=section&id=%E4%B8%8A%E5%B8%82%E8%A6%8F%E5%89%87%E8%A6%8F%E5%AE%9A%E7%9A%84%E6%8C%81%E7%BA%8C%E6%8A%AB%E9%9C%B2%E8%B2%AC%E4%BB%BB) Except as disclosed in this report, the company has no other continuing disclosure obligations under Rules 13.20, 13.21, and 13.22 of the Listing Rules - Except as disclosed in this report, the company has no other disclosure obligations under Rules 13.20, 13.21, and 13.22 of the Listing Rules[71](index=71&type=chunk) [Purchase, Sale, or Redemption of the Company's Listed Securities](index=20&type=section&id=%E8%B3%BC%E8%B2%B7%E3%80%81%E5%87%BA%E5%94%AE%E6%88%96%E8%B4%96%E5%9B%9E%E6%9C%AC%E5%85%AC%E5%8F%B8%E4%B8%8A%E5%B8%82%E8%AD%89%E5%88%B8) From the listing date to the date of this report, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities, and as of June 30, 2025, the company held no treasury shares - From the listing date to the date of this report, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities[72](index=72&type=chunk) - As of June 30, 2025, the company held no treasury shares[72](index=72&type=chunk) [Standard Code for Securities Transactions by Directors and Supervisors](index=20&type=section&id=%E8%91%A3%E4%BA%8B%E5%8F%8A%E7%9B%A3%E4%BA%8B%E9%80%B2%E8%A1%8C%E8%AD%89%E5%88%B8%E4%BA%A4%E6%98%93%E7%9A%84%E6%A8%99%E6%BA%96%E5%AE%88%E5%89%87) The company has adopted a standard code governing securities transactions by directors, supervisors, and relevant employees, and all directors and supervisors confirmed strict compliance, with no violations by relevant employees found during the reporting period - The company has adopted a standard code governing all dealings in the company's securities by directors, supervisors, and relevant employees[73](index=73&type=chunk) - All directors and supervisors have confirmed strict compliance with the required standards set out in the standard code from the listing date up to the latest practicable date[73](index=73&type=chunk) - During the period from the listing date to June 30, 2025, the company found no instances of non-compliance with the standard code by any relevant employees of the company[74](index=74&type=chunk) [Global Offering and Use of Proceeds](index=21&type=section&id=%E5%85%A8%E7%90%83%E7%99%BC%E5%94%AE%E5%8F%8A%E6%89%80%E5%BE%97%E6%AC%BE%E9%A0%85%E7%94%A8%E9%80%94) The company's H shares were listed on the Main Board of the Stock Exchange on March 31, 2025, through a global offering of 53,562,000 H shares at HKD 2.50 per share, yielding net proceeds of approximately HKD 89.04 million (after adjusting for actual listing expenses), of which approximately HKD 21.7 million has been utilized, primarily for opening new retail stores, store renovations, and purchasing shelves - The company's H shares were listed on the Main Board of the Stock Exchange on March 31, 2025, through a global offering of **53,562,000 H shares** at an offer price of **HKD 2.50 per H share**[76](index=76&type=chunk) - The net proceeds from the global offering were approximately **HKD 92.55 million**, with actual listing expenses of approximately **RMB 41.4 million** (approximately **HKD 44.9 million**), resulting in actual net proceeds of approximately **HKD 89.04 million**[78](index=78&type=chunk) Details of Use of Net Proceeds from Global Offering (as of the date of this report) | Purpose | Estimated Allocation in Prospectus (approx. HKD million) | Revised Allocation (approx. HKD million) | Utilized (approx. HKD million) | Remaining Amount (approx. HKD million) | | :--- | :----------------------- | :----------------------- | :----------------------- | :----------------------- | | Opening new retail stores | 32.5 | 27.5 | 20.7 | 6.8 | | Store renovations | 9.7 | 8.2 | 8.2 | – | | Purchasing shelves | 9.4 | 7.9 | 5.2 | 2.7 | | Purchasing refrigeration facilities, lighting, air conditioning, CCTV surveillance systems, and POS systems | 8.8 | 7.5 | 3.4 | 4.1 | | Installing fire safety systems | 4.6 | 3.9 | 3.9 | – | | Establishing new distribution centers | 43.3 | 36.7 | – | 36.7 | | Establishing new central kitchens | 28.1 | 23.9 | – | 23.9 | | Enhancing ERP and infrastructure systems | 1.2 | 1.0 | 1.0 | – | | **Total** | **137.6** | **116.6** | **42.4** | **74.2** | [Interests and Short Positions of Directors, Supervisors, and Chief Executive in Shares, Underlying Shares, and Debentures](index=23&type=section&id=%E8%91%A3%E4%BA%8B%E3%80%81%E7%9B%A3%E4%BA%8B%E5%8F%8A%E6%9C%80%E9%AB%98%E8%A1%8C%E6%94%BF%E4%BA%BA%E5%93%A1%E6%96%BC%E8%82%A1%E4%BB%BD%E3%80%81%E7%9B%B8%E9%97%9C%E8%82%A1%E4%BB%BD%E5%8F%8A%E5%82%B5%E6%AC%8A%E8%AD%89%E7%9A%84%E6%AC%8A%E7%9B%8A%E5%8F%8A%E6%B7%A1%E5%80%89) As of June 30, 2025, several directors, supervisors, and the chief executive held interests in the company's shares, with Mr. Gao Feng, Mr. Yuan Yuan, and Mr. Zhang Jia'an, along with their concert parties, collectively holding approximately 31.11% of the equity Interests of Directors, Supervisors, and Chief Executive in the Company | Name | Nature of Interest | Number of Shares | Approximate Percentage of Shareholding (%) | | :--- | :------- | :------- | :----------------- | | Mr. Gao Feng | Beneficial owner, interest in controlled corporation, interest of concert parties | 66,674,976 | 31.11 | | Mr. Yuan Yuan | Beneficial owner, interest of concert parties | 66,674,976 | 31.11 | | Mr. Zhang Jia'an | Beneficial owner, interest of concert parties | 66,674,976 | 31.11 | | Mr. Yao Jun | Beneficial owner | 500,000 | 0.23 | | Ms. Shen Zhigen | Beneficial owner | 600,000 | 0.28 | | Ms. Zhan Mingyu | Beneficial owner | 2,700,000 | 1.26 | | Mr. Xia Zhonglin | Beneficial owner | 550,000 | 0.26 | | Ms. Zhu Aizhen | Beneficial owner | 200,000 | 0.09 | - All disclosed interests are long positions[83](index=83&type=chunk) - The interests of Mr. Gao Feng, Mr. Yuan Yuan, and Mr. Zhang Jia'an include shares directly held by them and shares deemed to be owned due to their concert party relationship[83](index=83&type=chunk) [Interests and Short Positions of Substantial Shareholders and Other Persons in Shares, Underlying Shares, and Debentures](index=25&type=section&id=%E4%B8%BB%E8%A6%81%E8%82%A1%E6%9D%B1%E5%8F%8A%E5%85%B6%E4%BB%96%E4%BA%BA%E5%A3%AB%E5%90%84%E8%87%AA%E6%96%BC%E8%82%A1%E4%BB%BD%E3%80%81%E7%9B%B8%E9%97%9C%E8%82%A1%E4%BB%BD%E5%8F%8A%E5%82%B5%E6%AC%8A%E8%AD%89%E7%9A%84%E6%AC%8A%E7%9B%8A%E5%8F%8A%E6%B7%A1%E5%80%89) As of June 30, 2025, substantial shareholders and their associates, excluding directors, supervisors, and the chief executive, held interests in the company's shares, with Mr. Gao Feng, Ruichuanda Investment, and his spouse Ms. Leng Yuemei, Mr. Yuan Yuan and his spouse Ms. Gu Xia, and Mr. Zhang Jia'an and his spouse Ms. Wang Xia, all deemed to hold approximately 31.11% equity; Qiequan Fund and its associates held approximately 10.07% equity; Jiangdu Fund and its associates held approximately 7.65% equity; and Mr. Xu Shihe and his spouse Ms. Yu Qin held approximately 5.07% equity Interests of Substantial Shareholders and Other Persons in the Company | Shareholder Name/Name | Nature of Interest | Number of Shares | Approximate Percentage of Interest in the Company (%) | | :--- | :------- | :------- | :----------------- | | Mr. Gao Feng | Beneficial owner, interest in controlled corporation, interest of concert parties | 66,674,976 | 31.11 | | Ruichuanda Investment | Beneficial owner, interest of concert parties | 66,674,976 | 31.11 | | Ms. Leng Yuemei | Spouse's interest | 66,674,976 | 31.11 | | Mr. Yuan Yuan | Beneficial owner, interest of concert parties | 66,674,976 | 31.11 | | Ms. Gu Xia | Spouse's interest | 66,674,976 | 31.11 | | Mr. Zhang Jia'an | Beneficial owner, interest of concert parties | 66,674,976 | 31.11 | | Ms. Wang Xia | Spouse's interest | 66,674,976 | 31.11 | | Qiequan Fund | Beneficial owner | 21,558,441 | 10.07 | | Xingongxiao Fund | Interest in controlled corporation | 21,558,441 | 10.07 | | Jiangdu Fund | Beneficial owner | 16,393,442 | 7.65 | | Mr. Xu Shihe | Beneficial owner | 10,870,051 | 5.07 | | Ms. Yu Qin | Spouse's interest | 10,870,051 | 5.07 | - All disclosed interests are long positions, and both unlisted domestic shares and H shares are ordinary shares in the company's share capital[86](index=86&type=chunk)[87](index=87&type=chunk) - Qiequan Fund, Xingongxiao Fund, Jiangdu Fund, and others are linked to multiple state-owned or local government-related entities through complex equity structures[89](index=89&type=chunk)[90](index=90&type=chunk)[91](index=91&type=chunk) [Changes in Information of Directors, Supervisors, and Chief Executive of the Company](index=28&type=section&id=%E6%9C%AC%E5%85%AC%E5%8F%B8%E8%91%A3%E4%BA%8B%E3%80%81%E7%9B%A3%E4%BA%8B%E5%8F%8A%E6%9C%80%E9%AB%98%E8%A1%8C%E6%94%BF%E4%BA%BA%E5%93%A1%E8%B3%87%E6%96%99%E8%AE%8A%E5%8B%95) During the reporting period, there were no changes in the information of the company's directors, supervisors, and chief executive required to be disclosed under the Listing Rules - During the reporting period, there were no changes in the information of the company's directors, supervisors, and chief executive required to be disclosed under Rules 13.51B(1) and 13.51B(2) of the Listing Rules[92](index=92&type=chunk) [Changes in Constitutional Documents](index=28&type=section&id=%E7%AB%A0%E7%A8%8B%E6%96%87%E4%BB%B6%E8%AE%8A%E6%9B%B4) The company adopted its Articles of Association on March 12, 2025, effective from the listing date, with no changes during the reporting period - The company adopted its Articles of Association on March 12, 2025, which became effective from the listing date[93](index=93&type=chunk) - There were no changes to the Articles of Association during the reporting period[93](index=93&type=chunk) [Consolidated Statement of Comprehensive Income and Other Comprehensive Income](index=29&type=section&id=%E7%B6%9C%E5%90%88%E5%85%A8%E9%9D%A2%E6%90%8D%E7%9B%8A%E5%8F%8A%E5%85%B6%E4%BB%96%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) For the six months ended June 30, 2025, the company reported revenue of RMB 771.3 million and a profit for the period of RMB 13.5 million, a 26.6% year-on-year decrease, with basic and diluted earnings per share at RMB 0.07 and total comprehensive income for the period at RMB 14.4 million Summary of Consolidated Statement of Comprehensive Income and Other Comprehensive Income | Indicator | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :----------------------- | :----------------------- | | Revenue | 771,288 | 663,625 | | Gross Profit | 138,879 | 148,860 | | Operating Profit | 32,049 | 38,085 | | Profit Before Tax | 22,844 | 26,709 | | Profit for the Period | 13,516 | 18,421 | | Profit Attributable to Equity Holders of the Company | 12,499 | 18,002 | | Basic and Diluted Earnings Per Share (RMB yuan) | 0.07 | 0.11 | | Total Comprehensive Income for the Period | 14,356 | 19,877 | [Consolidated Statement of Financial Position](index=31&type=section&id=%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) As of June 30, 2025, the company's total assets less current liabilities amounted to RMB 781.6 million, with share capital increasing to RMB 214.2 million and total equity rising to RMB 662.5 million, while total current assets were RMB 1,212.3 million and total current liabilities were RMB 861.9 million Summary of Consolidated Statement of Financial Position | Indicator | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :----------------------- | :----------------------- | | Non-current Assets | 431,093 | 399,108 | | Current Assets | 1,212,323 | 1,056,580 | | Current Liabilities | 861,864 | 774,555 | | Net Current Assets | 350,459 | 282,025 | | Total Assets Less Current Liabilities | 781,552 | 681,133 | | Non-current Liabilities | 119,096 | 140,223 | | Net Assets | 662,456 | 540,910 | | Share Capital | 214,247 | 160,685 | | Total Equity | 662,456 | 540,910 | [Consolidated Statement of Changes in Equity](index=33&type=section&id=%E7%B6%9C%E5%90%88%E6%AC%8A%E7%9B%8A%E8%AE%8A%E5%8B%95%E8%A1%A8) For the six months ended June 30, 2025, the company's total equity increased from approximately RMB 540.9 million as of January 1, 2025, to approximately RMB 662.5 million, primarily due to profit for the period and shares issued from the initial public offering Summary of Consolidated Statement of Changes in Equity | Indicator | Balance as of January 1, 2025 (RMB thousand) | Balance as of June 30, 2025 (RMB thousand) | | :--- | :----------------------- | :----------------------- | | Share Capital | 160,685 | 214,247 | | Capital Reserve | 147,996 | 201,624 | | Statutory Reserve | 28,891 | 28,891 | | Fair Value Reserve (Non-transferable) | 20,072 | 20,876 | | Retained Profits | 166,145 | 178,644 | | Total Equity Attributable to Equity Holders of the Company | 523,789 | 644,282 | | Non-controlling Interests | 17,121 | 18,174 | | Total Equity | 540,910 | 662,456 | - The increase in total equity was mainly due to profit for the period and shares issued upon completion of the initial public offering[103](index=103&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=35&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E7%8F%BE%E9%87%91%E6%B5%81%E9%87%8F%E8%A1%A8) For the six months ended June 30, 2025, net cash used in operating activities was RMB 141.8 million, net cash used in investing activities was RMB 69.4 million, and net cash from financing activities was RMB 162.6 million, primarily from bank loans and IPO proceeds, with cash and cash equivalents at period-end totaling RMB 167.9 million Summary of Condensed Consolidated Statement of Cash Flows | Indicator | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :----------------------- | :----------------------- | | Net cash used in operating activities | (141,783) | (45,425) | | Net cash used in investing activities | (69,372) | (25,810) | | Net cash from/(used in) financing activities | 162,590 | (33,479) | | Net decrease in cash and cash equivalents | (48,565) | (104,714) | | Cash and cash equivalents at end of period | 167,902 | 131,673 | - Net cash from financing activities primarily came from proceeds from bank loans and other borrowings (**RMB 363.1 million**) and proceeds from the issuance of ordinary shares in the initial public offering (**RMB 107.2 million**)[105](index=105&type=chunk) [Notes to the Unaudited Interim Financial Report](index=37&type=section&id=%E6%9C%AA%E7%B6%93%E5%AF%A9%E6%A0%B8%E4%B8%AD%E6%9C%9F%E8%B2%A1%E5%8B%99%E5%A0%B1%E5%91%8A%E9%99%84%E8%A8%BB) [1 General Information](index=37&type=section&id=1%20%E4%B8%80%E8%88%AC%E8%B3%87%E6%96%99) Jiangsu Hongxin Supermarket Chain Co., Ltd. was established in China on October 19, 2005, restructured into a joint stock company on September 30, 2007, and its H shares were listed on the Hong Kong Stock Exchange Main Board on March 31, 2025, with the Group primarily engaged in grain and oil wholesale and operating "Hongxinlong" brand supermarkets and convenience stores - The company was established in China as a limited liability company on October 19, 2005, and restructured into a joint stock company on September 30, 2007[107](index=107&type=chunk) - The company's shares were listed on the Main Board of the Hong Kong Stock Exchange on March 31, 2025[107](index=107&type=chunk) - The Group is primarily engaged in grain and oil wholesale business and operates "Hongxinlong" brand supermarkets and convenience stores in central Jiangsu[107](index=107&type=chunk) [2 Basis of Preparation](index=37&type=section&id=2%20%E7%B7%A8%E8%A3%BD%E5%9F%BA%E6%BA%96) This interim financial report is prepared in accordance with the applicable disclosure requirements of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and International Accounting Standard 34, adopting the same accounting policies as the 2024 annual financial statements, and is unaudited - This interim financial report has been prepared in accordance with the applicable disclosure requirements of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and International Accounting Standard 34[108](index=108&type=chunk) - The interim financial report has been prepared in accordance with the same accounting policies adopted in the 2024 annual financial statements[108](index=108&type=chunk) - This interim financial report is unaudited[109](index=109&type=chunk) [3 Changes in Accounting Policies](index=38&type=section&id=3%20%E6%9C%83%E8%A8%88%E6%94%BF%E7%AD%96%E8%AE%8A%E5%8B%95) The Group has applied amendments to IAS 21, but these had no material impact on the interim report as no foreign currency non-exchangeable transactions were undertaken, and no other new standards or interpretations not yet effective were applied during this accounting period - The Group has applied the amendments to IAS 21, but these had no material impact on this interim report as no foreign currency transactions that are not exchangeable into another currency were undertaken[111](index=111&type=chunk) - The Group has not applied any new standards or interpretations that are not yet effective during this accounting period[112](index=112&type=chunk) [4 Revenue and Segment Reporting](index=39&type=section&id=4%20%E6%94%B6%E5%85%A5%E5%8F%8A%E5%88%86%E9%83%A8%E5%A0%B1%E5%91%8A) The Group's revenue primarily derives from goods sales (retail and wholesale), commission income, and meal supply, and as the chief operating decision-maker assesses the Group's performance as an integrated business, only one operating segment is presented, with no segment or geographical information provided Details of Revenue from Contracts with Customers | Revenue Source | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :------- | :----------------------- | :----------------------- | | Subtotal for sales of goods | 736,669 | 634,177 | | Subtotal for commission income | 13,758 | 18,710 | | Supply and sales of meals | 13,877 | 2,722 | | Other sources of income (operating lease rental income) | 6,984 | 8,016 | | **Total Revenue** | **771,288** | **663,625** | - The Group's revenue from contracts with customers is recognized at a point in time for the six months ended June 30, 2025, and 2024[114](index=114&type=chunk) - The Group has only one operating segment, and as the majority of its revenue and almost all non-current operating assets are located in China, no segment or geographical information is presented[115](index=115&type=chunk) [5 Other Income and Net Other Gains](index=41&type=section&id=5%20%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5%E5%8F%8A%E5%85%B6%E4%BB%96%E6%94%B6%E7%9B%8A%E6%B7%A8%E9%A1%8D) Other income, totaling RMB 3.4 million, primarily includes service income, government grants, and dividend income, while net other gains amounted to RMB 0.4 million, mainly from realized net gains on structured deposits and wealth management products and net exchange gains Other Income | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :----------------------- | :----------------------- | | Service income | 2,707 | 2,338 | | Government grants | 508 | 61 | | Dividend income | 165 | 79 | | **Total** | **3,380** | **2,478** | Net Other Gains | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :----------------------- | :----------------------- | | Net realized gains on structured deposits and wealth management products | 34 | 152 | | Net exchange gains | 210 | 970 | | Net loss on disposal of property, plant and equipment | (2) | (51) | | Others | 174 | (36) | | **Total** | **416** | **1,035** | [6 Profit Before Tax](index=42&type=section&id=6%20%E9%99%A4%E7%A8%85%E5%89%8D%E6%BA%A2%E5%88%A9) Profit before tax was RMB 22.8 million, with net finance costs of RMB 9.2 million primarily comprising interest expenses on bank loans and lease liabilities, and other major expenses including cost of inventories, depreciation, impairment losses, and listing expenses Net Finance Costs | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :----------------------- | :----------------------- | | Interest income from bank deposits | (1,728) | (929) | | Interest expense on bank loans and other borrowings | 9,083 | 9,591 | | Interest expense on lease liabilities | 1,850 | 2,714 | | **Net Finance Costs** | **9,205** | **11,376** | Other Major Expenses | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :----------------------- | :----------------------- | | Cost of inventories recognized as expense | 624,338 | 509,676 | | Depreciation expense (owned property, plant and equipment) | 26,552 | 21,575 | | Depreciation expense (right-of-use assets) | 15,266 | 13,961 | | Impairment loss on trade and other receivables | 2,873 | 4,335 | | Listing expenses | 12,552 | 7,040 | | Auditor's remuneration (other services) | 1,855 | 1,575 | [7 Income Tax](index=43&type=section&id=7%20%E6%89%80%E5%BE%97%E7%A8%85) Income tax expense in the consolidated statement of comprehensive income was RMB 9.3 million, primarily comprising current tax provision and deferred tax, with PRC income tax provisions determined by applicable corporate income tax rates and Hong Kong profits tax estimated at an annual effective rate of 16.5% Income Tax Expense | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :----------------------- | :----------------------- | | Current tax – provision for the period | 10,662 | 10,450 | | Deferred tax – origination and reversal of temporary differences | (1,334) | (2,162) | | **Total** | **9,328** | **8,288** | - PRC income tax provision is made based on the applicable corporate income tax rates determined by relevant PRC income tax rules and regulations for subsidiaries located in China[120](index=120&type=chunk) - Hong Kong profits tax provision is calculated at an estimated annual effective tax rate of **16.5%** adopted for the six months ended June 30, 2025[120](index=120&type=chunk) [8 Earnings Per Share](index=43&type=section&id=8%20%E6%AF%8F%E8%82%A1%E7%9B%88%E5%88%A9) For the six months ended June 30, 2025, basic earnings per share were RMB 0.07, based on profit attributable to ordinary equity holders of RMB 12.5 million and a weighted average of 187.5 million ordinary shares outstanding, with diluted earnings per share being the same as basic earnings per share due to no potential dilutive ordinary shares Earnings Per Share | Indicator | H1 2025 | H1 2024 | | :--- | :----------- | :----------- | | Basic and Diluted Earnings Per Share (RMB yuan) | 0.07 | 0.11 | | Profit Attributable to Ordinary Equity Holders (RMB thousand) | 12,499 | 18,002 | | Weighted Average Number of Ordinary Shares in Issue (thousand shares) | 187,466 | 160,685 | - The company had no potential dilutive ordinary shares outstanding for the six months ended June 30, 2025, and 2024, thus diluted earnings per share were the same as basic earnings per share[122](index=122&type=chunk) [9 Inventories](index=44&type=section&id=9%20%E5%AD%98%E8%B2%A8) For the six months ended June 30, 2025, the decrease in the amount of inventories recognized (reversal of write-downs to net realizable value) was RMB 1.59 million, a significant increase compared to the same period last year Decrease in Inventory Amount | Indicator | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :----------------------- | :----------------------- | | Decrease in inventory amount | 1,590 | 152 | [10 Trade and Bills Receivables](index=44&type=section&id=10%20%E8%B2%BF%E6%98%93%E6%87%89%E6%94%B6%E6%AC%BE%E9%A0%85%E5%8F%8A%E6%87%89%E6%94%B6%E7%A5%A8%E6%93%9A) As of June 30, 2025, total trade and bills receivables amounted to RMB 313.1 million, an increase from December 31, 2024, with all amounts expected to be recovered within one year, and the company endorsed bank acceptance bills to suppliers to settle payables, fully derecognizing them with limited perceived risk Trade and Bills Receivables | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :----------------------- | :----------------------- | | Trade receivables | 213,841 | 173,007 | | Bills receivable | 99,286 | 17,000 | | **Total** | **313,127** | **190,007** | Aging Analysis of Trade Receivables (Net of Loss Allowance) | Aging | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :----------------------- | :----------------------- | | Within 3 months | 200,614 | 122,506 | | Over 3 months but within 6 months | 11,980 | 44,062 | | Over 6 months but within 9 months | 1,051 | 3,293 | | Over 9 months but within 12 months | 196 | 3,021 | | Over 12 months | – | 125 | - The Group endorsed certain bank acceptance bills to suppliers to settle equivalent trade and other payables on a full recourse basis and has fully derecognized them[126](index=126&type=chunk) - The Group considers the issuing banks of these bills to have good credit quality and that it is unlikely the issuing banks will fail to settle the bills at maturity, thus the risk is limited[126](index=126&type=chunk) [11 Prepayments, Deposits, and Other Receivables](index=45&type=section&id=11%20%E9%A0%90%E4%BB%98%E6%AC%BE%E9%A0%85%E3%80%81%E6%8C%89%E9%87%91%E5%8F%8A%E5%85%B6%E4%BB%96%E6%87%89%E6%94%B6%E6%AC%BE%E9%A0%85) As of June 30, 2025, total prepayments, deposits, and other receivables amounted to RMB 408.2 million, an increase from December 31, 2024, with all amounts expected to be recovered or recognized as expenses within one year Prepayments, Deposits, and Other Receivables | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :----------------------- | :----------------------- | | Prepayments | 378,670 | 295,909 | | Recoverable VAT | 1,666 | 488 | | Other deposits and receivables | 30,067 | 23,824 | | Less: Loss allowance | (2,168) | (2,168) | | **Total** | **408,235** | **318,053** | - All prepayments, deposits, and other receivables are expected to be recovered or recognized as expenses within one year[127](index=127&type=chunk) [12 Restricted Deposits and Cash and Cash Equivalents](index=46&type=section&id=12%20%E5%8F%97%E9%99%90%E5%88%B6%E5%AD%98%E6%AC%BE%E4%BB%A5%E5%8F%8A%E7%8F%BE%E9%87%91%E5%8F%8A%E7%8F%BE%E9%87%91%E7%AD%89%E5%83%B9%E7%89%A9) As of June 30, 2025, restricted deposits amounted to RMB 6.1 million, primarily pledged letters of credit, while total cash and cash equivalents were RMB 167.9 million, mainly bank deposits, with outward remittances from mainland China subject to foreign exchange controls Restricted Deposits | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :----------------------- | :----------------------- | | Pledged letters of credit | 6,100 | 1,600 | Cash and Cash Equivalents | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :----------------------- | :----------------------- | | Bank deposits | 167,054 | 215,959 | | Cash on hand | 848 | 899 | | **Total** | **167,902** | **216,858** | - Outward remittances of funds from mainland China are subject to foreign exchange control regulations and rules[129](index=129&type=chunk) [13 Bank Loans and Other Borrowings](index=47&type=section&id=13%20%E9%8A%80%E8%A1%8C%E8%B2%B8%E6%AC%BE%E5%8F%8A%E5%85%B6%E4%BB%96%E5%80%9F%E6%AC%BE) As of June 30, 2025, total bank loans and other borrowings amounted to RMB 569.5 million, comprising RMB 528.0 million in short-term borrowings and RMB 41.5 million in long-term borrowings Bank Loans and Other Borrowings | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :----------------------- | :----------------------- | | Short-term bank loans and other borrowings | 527,463 | 409,265 | | Accrued interest (current) | 496 | 423 | | Long-term bank loans and other borrowings | 41,523 | 58,775 | | Accrued interest (non-current) | 24 | 54 | | **Total** | **569,506** | **468,517** | Maturity Profile of Interest-bearing Bank Loans and Other Borrowings | Maturity | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :----------------------- | :----------------------- | | Within 1 year or on demand | 527,959 | 409,688 | | After 1 year but within 2 years | 37,397 | 48,787 | | After 2 years but within 5 years | 4,150 | 10,042 | | **Total** | **569,506** | **468,517** | [14 Trade and Bills Payables](index=48&type=section&id=14%20%E8%B2%BF%E6%98%93%E6%87%89%E4%BB%98%E6%AC%BE%E9%A0%85%E5%8F%8A%E6%87%89%E4%BB%98%E7%A5%A8%E6%93%9A) As of June 30, 2025, total trade and bills payables amounted to RMB 83.1 million, a decrease from December 31, 2024, with all amounts expected to be settled or repaid on demand within one year Trade and Bills Payables | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :----------------------- | :----------------------- | | Trade payables | 83,039 | 110,285 | | Bills payable | 100 | – | | **Total** | **83,139** | **110,285** | Aging Analysis of Trade and Bills Payables | Aging | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :----------------------- | :----------------------- | | Within 3 months | 63,664 | 89,894 | | 3 to 12 months | 12,809 | 12,856 | | Over 12 months | 6,666 | 7,535 | | **Total** | **83,139** | **110,285** | [15 Other Payables and Accrued Expenses](index=49&type=section&id=15%20%E5%85%B6%E4%BB%96%E6%87%89%E4%BB%98%E6%AC%BE%E9%A0%85%E5%8F%8A%E6%87%89%E8%A8%88%E8%B2%BB%E7%94%A8) As of June 30, 2025, total other payables and accrued expenses amounted to RMB 99.2 million, an increase from December 31, 2024, primarily including staff-related costs, deposits received, and other taxes payable Other Payables and Accrued Expenses | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :----------------------- | :----------------------- | | Staff-related costs payable | 5,982 | 15,878 | | Deposits received | 14,054 | 12,423 | | Other taxes payable | 22,542 | 12,169 | | Others | 56,599 | 48,054 | | **Total** | **99,177** | **88,524** | - All other payables and accrued expenses are expected to be settled or repaid on demand within one year[132](index=132&type=chunk) [16 Capital, Reserves, and Dividends](index=49&type=section&id=16%20%E8%B3%87%E6%9C%AC%E3%80%81%E5%84%B2%E5%82%99%E5%8F%8A%E8%82%A1%E6%81%AF) As of June 30, 2025, the company's share capital increased to RMB 214.2 million and capital reserve to RMB 201.6 million, primarily due to the issuance of H shares in the initial public offering, with no dividends paid or declared during the reporting period Changes in Share Capital and Capital Reserve | Item | Number of Ordinary Shares | Share Capital (RMB thousand) | Capital Reserve (RMB thousand) | Total (RMB thousand) | | :--- | :--------- | :---------------- | :---------------- | :---------------- | | As of December 31, 2024 | 160,684,910 | 160,685 | 147,996 | 308,681 | | Issuance of H shares through initial public offering | 53,562,000 | 53,562 | 53,628 | 107,190 | | As of June 30, 2025 | 214,246,910 | 214,247 | 201,624 | 415,871 | - On March 31, 2025, the company issued **53,562,000 new H shares** with a par value of **RMB 1.0 yuan** each at a price of **HKD 2.5 per share** through the Hong Kong Public Offering and International Placing[133](index=133&type=chunk) - The company neither paid nor declared any dividends for the six months ended June 30, 2025, and 2024[134](index=134&type=chunk) [17 Commitments](index=50&type=section&id=17%20%E6%89%BF%E6%93%94) As of June 30, 2025, authorized and contracted commitments not provided for in the interim financial report amounted to RMB 15.8 million, a significant increase from December 31, 2024 Unfulfilled Commitments | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :----------------------- | :----------------------- | | Authorized and contracted | 15,786 | 1,453 | [18 Material Related Party Transactions](index=50&type=section&id=18%20%E9%87%8D%E5%A4%A7%E9%97%9C%E8%81%AF%E6%96%B9%E4%BA%A4%E6%98%93) As of June 30, 2025, certain bank loans and other borrowings granted to the Group (RMB 328.2 million) were guaranteed by controlling shareholder Mr. Gao Feng and his spouse Ms. Leng Yuemei, controlling shareholder Mr. Zhang Jia'an, and key management personnel Ms. Yin Qin Bank Loans and Other Borrowings Guaranteed by Related Parties | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :----------------------- | :----------------------- | | Guarantees for bank loans and other borrowings granted | 328,186 | 327,040 | - Certain financings granted to the Group were guaranteed by controlling shareholder Mr. Gao Feng and his spouse Ms. Leng Yuemei, controlling shareholder Mr. Zhang Jia'an, and key management personnel Ms. Yin Qin[136](index=136&type=chunk) [Definitions](index=50&type=section&id=%E9%87%8B%E7%BE%A9) This section provides definitions for key terms and terminology used in the interim report to ensure readers have a clear understanding of the report's content

| | | | | | Attributable to owners of the parent | | | | --- | --- | --- | --- | --- | --- | --- | --- | | | | | | | 母公司擁有人應佔 | | | | | | | | Statutory | Safety | | | | | | Share | Share | surplus | production | Retained | Total | | | | capital | premium | reserve | reserve | profits | equity | | | | | | 法定盈餘 | 安全生產 | | | | | | 股本 | 股份溢價 | 儲備 | 儲備 | 保留溢利 | 總權益 | | | | RMB'000 | RMB'000 | RMB'000 | RMB'000 | RMB'000 | RMB'000 | | | | | | 人民幣千元 人民幣千元 人民幣千元 人民幣千元 人民幣千元 人民幣千元 | | | | | At 1 January 2025 (Audite ...