百信国际(00574) - 2025 - 中期业绩

Company Information Details the company's governance structure, including board and committee members, and essential operational information Board of Directors and Committee Composition Discloses the composition of the board, authorized representatives, company secretary, and various committees, including changes in leadership - Executive Directors include Mr. Yuan Hongbing (Chairman) and Mr. Ma Qinghai; Independent Non-Executive Directors include Ms. Li Yan (Chairperson of Audit and Remuneration Committees), Professor Lou Zhenye, and Mr. Wang Dongyuan (Chairman of Nomination Committee)[5] - Mr. Xu Qilin retired as an Independent Non-Executive Director on June 26, 2025, with adjustments to committee roles for Mr. Wang Dongyuan and Professor Lou Zhenye[5] Company Basic Information Provides essential operational details including head office, main China operations, auditor, stock code, website, and principal bankers - The auditor changed from Zhongzheng Tianheng Certified Public Accountants Co., Ltd. to Furuimaze Certified Public Accountants Co., Ltd. on December 9, 2024[6] - The company's stock code is 00574, and its official website is www.pashun.com.cn[6](index=6&type=chunk) Condensed Consolidated Statement of Profit or Loss Presents the company's financial performance, highlighting revenue, cost of sales, gross profit, and profit or loss for the period Performance Overview for the Period The company shifted from profit to loss for the six months ended June 30, 2025, due to reduced debt restructuring gains, slight revenue decline, and significant gross profit reduction Condensed Consolidated Statement of Profit or Loss Key Data (Six Months Ended June 30) | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | Change | | :--- | :--- | :--- | :--- | | Revenue | 48,693 | 48,830 | -0.28% | | Cost of Sales | (42,481) | (39,303) | +8.09% | | Gross Profit | 6,212 | 9,527 | -34.79% | | Gain on Debt Restructuring of the Company | – | 47,356 | -100% | | Other Income | 692 | 734 | -5.72% | | Net Other Losses | (1,623) | (6,362) | -74.49% | | Selling and Distribution Expenses | (2,375) | (3,408) | -30.31% | | General and Administrative Expenses | (5,707) | (7,281) | -21.61% | | Finance Costs | (6,253) | (5,075) | +23.21% | | Profit/(Loss) Before Tax | (9,054) | 35,491 | Shift from profit to loss | | Income Tax Expense | (1) | (64) | -98.44% | | Profit/(Loss) for the Period Attributable to Equity Holders of the Company | (9,055) | 35,427 | Shift from profit to loss | - The company shifted from profit to loss for the period, primarily due to a one-off debt restructuring gain of RMB 47,356 thousand in the corresponding period of 2024, which was absent in 2025[8] Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income Outlines the company's total comprehensive income or expense, including profit or loss and other comprehensive income items Comprehensive Income and Earnings/Loss Per Share For the six months ended June 30, 2025, the company recorded a total comprehensive expense, driven by period loss and negative exchange differences, resulting in a basic loss per share of RMB (0.61) Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income Key Data (Six Months Ended June 30) | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Profit/(Loss) for the Period | (9,055) | 35,427 | | Exchange Differences Arising from Translation of Financial Statements of Foreign Operations | (3,377) | 3,158 | | Total Comprehensive Income/(Expense) for the Period Attributable to Equity Holders of the Company | (12,432) | 38,585 | Earnings/(Loss) Per Share (Six Months Ended June 30) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Basic | (0.61) | 2.4 | | Diluted | Not applicable | Not applicable | - Total comprehensive income for the period shifted from a gain of RMB 38,585 thousand in 2024 to an expense of RMB (12,432) thousand in 2025[10] Condensed Consolidated Statement of Financial Position Presents the company's financial position, detailing assets, liabilities, and equity at the end of the reporting period Assets and Liabilities Position As of June 30, 2025, net current liabilities significantly increased, reducing total assets less current liabilities and expanding net liabilities, reflecting increased liquidity pressure Condensed Consolidated Statement of Financial Position Key Data (As of June 30) | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | Change | | :--- | :--- | :--- | :--- | | Non-current Assets | 74,507 | 74,787 | -0.37% | | Current Assets | 87,455 | 104,859 | -16.69% | | Current Liabilities | 116,941 | 103,528 | +13.05% | | Net Current Assets/(Liabilities) | (29,486) | 1,331 | Shift from surplus to deficit | | Total Assets Less Current Liabilities | 45,021 | 76,118 | -40.85% | | Non-current Liabilities | 193,489 | 212,154 | -8.79% | | Net Liabilities | (148,468) | (136,036) | +9.14% | | Share Capital | 1,216 | 1,216 | 0% | | Reserves | (149,684) | (137,252) | +8.33% | | Deficiency Attributable to Equity Holders of the Company | (148,468) | (136,036) | +9.14% | - Net current assets shifted from a surplus of RMB 1,331 thousand as of December 31, 2024, to net current liabilities of RMB (29,486) thousand as of June 30, 2025[13] - Cash and cash equivalents decreased from RMB 15,972 thousand as of December 31, 2024, to RMB 3,562 thousand as of June 30, 2025[13] Condensed Consolidated Statement of Changes in Equity Details changes in the company's equity attributable to owners, including profit or loss, other comprehensive income, and transactions with owners Shareholders' Equity Changes For the six months ended June 30, 2025, the deficiency attributable to equity holders expanded due to the period's loss and negative exchange reserve impact Condensed Consolidated Statement of Changes in Equity Key Data (Six Months Ended June 30) | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Share Capital | 1,216 | 1,216 | | Share Premium | 691,882 | 691,882 | | Statutory Reserve | 33,143 | 33,143 | | China Reserve | 11,456 | 11,456 | | Exchange Reserve | (26,527) | (23,150) | | Other Reserves | (28,150) | (28,150) | | Accumulated Losses | (831,488) | (822,433) | | Total Deficiency Attributable to Equity Holders of the Company | (148,468) | (136,036) | - The deficiency attributable to equity holders of the Company increased from RMB (136,036) thousand as of December 31, 2024, to RMB (148,468) thousand as of June 30, 2025[15] - A loss of RMB 9,055 thousand for the period and a decrease of RMB 3,377 thousand in exchange reserves were key factors contributing to the expanded deficiency[15] Condensed Consolidated Statement of Cash Flows Summarizes the cash inflows and outflows from operating, investing, and financing activities for the reporting period Cash Flow Analysis For the six months ended June 30, 2025, net cash used in operating activities decreased, but increased financing outflow led to a larger net decrease in cash and cash equivalents Condensed Consolidated Statement of Cash Flows Key Data (Six Months Ended June 30) | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | Change | | :--- | :--- | :--- | :--- | | Net Cash Used in Operating Activities | (7,382) | (14,548) | Improved 49.26% | | Net Cash Used in Investing Activities | (528) | (20) | Deteriorated 2540% | | Net Cash (Used in)/From Financing Activities | (4,500) | 2,691 | Shift from inflow to outflow | | Net Decrease in Cash and Cash Equivalents | (12,410) | (11,877) | Deteriorated 4.49% | | Cash and Cash Equivalents at End of Period | 3,562 | 4,634 | -23.13% | - Financing activities shifted from a net cash inflow of RMB 2,691 thousand in 2024 to a net cash outflow of RMB 4,500 thousand in 2025, primarily due to repayment of other borrowings[16] - Cash and cash equivalents at the end of the period decreased from RMB 4,634 thousand in 2024 to RMB 3,562 thousand in 2025[16] Notes to the Condensed Consolidated Interim Financial Statements Provides detailed explanations and disclosures supporting the interim financial statements, covering accounting policies, segment information, and financial instrument details 1. Basis of Preparation of Financial Statements The condensed consolidated financial statements are prepared in accordance with HKFRSs and HK GAAP, using the historical cost convention and presented in RMB - The financial statements are prepared in accordance with Hong Kong Financial Reporting Standards (HKFRSs), including all HKFRSs, Hong Kong Accounting Standards, and Interpretations, and Hong Kong Generally Accepted Accounting Principles[17] - The condensed consolidated financial statements are prepared on a historical cost basis and presented in RMB, with all values rounded to the nearest thousand[17] 2. Application of New and Revised Hong Kong Financial Reporting Standards The application of revised HKFRSs effective in this interim period had no significant impact, and no new or revised standards were early adopted - The application of revised HKFRSs during this interim period had no significant impact on the Group's condensed consolidated financial statements[19] - The Group has not applied any new or revised HKFRSs that have been issued but are not yet effective, and directors anticipate no significant impact in the foreseeable future[20][21] 3. Revenue and Segment Reporting The Group's primary business is pharmaceutical distribution and manufacturing in China, with distribution revenue growing and manufacturing revenue declining, resulting in a slight overall revenue decrease - The Group's principal activities are pharmaceutical distribution and manufacturing of pharmaceutical products in China[22] - All of the Group's revenue and operating profit, and substantially all of its assets, are derived from or located in China, thus no geographical segment analysis is presented[25] 3(a) Revenue Details the Group's revenue composition, showing significant growth in pharmaceutical distribution revenue and a decline in manufacturing revenue Revenue Composition (Six Months Ended June 30) | Revenue Category | 2025 (RMB thousand) | 2024 (RMB thousand) | Change | | :--- | :--- | :--- | :--- | | Pharmaceutical Distribution | 43,013 | 33,267 | +29.31% | | Pharmaceutical Manufacturing | 5,680 | 15,563 | -63.51% | | Total Revenue | 48,693 | 48,830 | -0.28% | - Pharmaceutical distribution revenue significantly increased by 29.31%, while pharmaceutical manufacturing revenue substantially decreased by 63.51%[23] 3(b) Segment Reporting The Group manages its business by operating scope and distribution channels, reporting two reportable segments: pharmaceutical distribution and pharmaceutical manufacturing - The Group manages its business by operating scope and distribution channels, reporting two reportable segments: pharmaceutical distribution and pharmaceutical manufacturing[24] - Pharmaceutical distribution revenue primarily derives from selling pharmaceutical products to wholesalers, franchised retail chain pharmacies, hospitals, and rural medical institutions[24] - Pharmaceutical manufacturing revenue primarily derives from selling pharmaceutical products manufactured by the Group[25] 3(b)(i) Segment Revenue and Results This section presents the revenue and profit for the pharmaceutical distribution and manufacturing segments, highlighting changes in external customer revenue Segment Revenue and Profit (Six Months Ended June 30) | Segment | 2025 Revenue (RMB thousand) | 2025 Profit (RMB thousand) | 2024 Revenue (RMB thousand) | 2024 Profit (RMB thousand) | | :--- | :--- | :--- | :--- | :--- | | Pharmaceutical Distribution | 43,013 | 3,532 | 33,267 | 3,684 | | Pharmaceutical Manufacturing | 5,680 | 2,680 | 15,563 | 5,843 | | Total | 48,693 | 6,212 | 48,830 | 9,527 | - In the first half of 2025, pharmaceutical distribution external customer revenue grew by 29.31%, while pharmaceutical manufacturing external customer revenue decreased by 63.51%[27] 3(b)(ii) Reconciliation of Reportable Segment Revenue and Profit or Loss This section reconciles reportable segment revenue and profit to the consolidated figures, highlighting the impact of non-recurring items Reconciliation of Segment Revenue and Profit or Loss (Six Months Ended June 30) | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Reportable Segment Revenue | 48,693 | 48,830 | | Consolidated Revenue | 48,693 | 48,830 | | Reportable Segment Profit | 6,212 | 9,527 | | Gross Profit from External Customers | 6,212 | 9,527 | | Gain on Debt Restructuring of the Company | – | 47,356 | | Consolidated Profit/(Loss) Before Tax | (9,054) | 35,491 | - Consolidated loss before tax for the first half of 2025 was RMB (9,054) thousand, compared to a profit of RMB 35,491 thousand in 2024, mainly due to a RMB 47,356 thousand debt restructuring gain in 2024[29] 4. Other Income and Net Other Gains/(Losses) For the six months ended June 30, 2025, other income slightly decreased, while net other losses significantly reduced, mainly due to a reversal of impairment loss on trade receivables - Net other losses improved from RMB (6,362) thousand in the corresponding period of 2024 to RMB (1,623) thousand in the first half of 2025[31] - In the first half of 2025, a reversal of impairment loss on trade receivables of RMB 3,712 thousand effectively offset some impairment losses[31] 4(a) Other Income This section details the components of other income, showing a slight decrease in total other income for the period Other Income Composition (Six Months Ended June 30) | Category | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Bank Interest Income | 4 | 7 | | Deferred Income - Government Grants | 256 | 256 | | Short-term Lease Rental Income | 432 | 444 | | Others | – | 27 | | Total | 692 | 734 | - Total other income slightly decreased from RMB 734 thousand in the corresponding period of 2024 to RMB 692 thousand in the first half of 2025[30] 4(b) Net Other Losses This section outlines the components of net other losses, which significantly decreased due to a reversal of impairment loss on trade receivables Net Other Losses Composition (Six Months Ended June 30) | Category | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Impairment Loss: Trade Receivables | (2,734) | (2,021) | | Impairment Loss: Other Receivables | (1,430) | – | | Impairment Loss: Prepayments and Deposits Paid | (1,223) | (4,342) | | Reversal of Impairment Loss: Trade Receivables | 3,712 | – | | Reversal of Impairment Loss: Other Receivables | – | 53 | | Others | 52 | (52) | | Total | (1,623) | (6,362) | - Net other losses significantly decreased by 74.49%, primarily due to a reversal of impairment loss on trade receivables of RMB 3,712 thousand[31] 5. Finance Costs For the six months ended June 30, 2025, finance costs significantly increased, mainly due to imputed interest on repayment obligations under the debt repayment arrangement scheme Finance Costs Composition (Six Months Ended June 30) | Category | 2025 (RMB thousand) | 2024 (RMB thousand) | Change | | :--- | :--- | :--- | :--- | | Interest on Bank and Other Borrowings | 619 | 2,115 | -70.73% | | Interest on Corporate Bonds Payable | – | 519 | -100% | | Interest on Repayment Obligations under Scheme of Arrangement | 5,634 | 2,441 | +130.89% | | Total | 6,253 | 5,075 | +23.21% | - Finance costs increased by 23.21%, primarily driven by a 130.89% surge in interest on repayment obligations under the debt repayment arrangement scheme[32] 6. Profit/(Loss) Before Tax For the six months ended June 30, 2025, the company shifted from a profit to a loss before tax, mainly due to increased cost of inventories sold, slightly lower staff costs, and reduced depreciation Profit/(Loss) Before Tax Components (Six Months Ended June 30) | Category | 2025 (RMB thousand) | 2024 (RMB thousand) | Change | | :--- | :--- | :--- | :--- | | Cost of Inventories Sold | 42,481 | 39,303 | +8.09% | | Total Staff Costs | 3,143 | 3,420 | -8.09% | | Depreciation of Property, Plant and Equipment | 782 | 1,271 | -38.47% | | Depreciation of Right-of-Use Assets | 26 | 29 | -10.34% | | Auditor's Remuneration | – | 111 | -100% | - Total staff costs decreased by 8.09%, primarily due to lower salaries, wages, other benefits, and contributions to defined contribution retirement plans[33] - Depreciation of property, plant and equipment decreased by 38.47%, and depreciation of right-of-use assets decreased by 10.34%[33] 7. Income Tax Expense For the six months ended June 30, 2025, income tax expense was minimal due to no assessable profit for China corporate income tax and no tax payable in Cayman Islands, BVI, or Hong Kong Income Tax Expense (Six Months Ended June 30) | Category | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Current Tax - China Corporate Income Tax | – | – | | Deferred Tax | – | 64 | | Total | 1 | 64 | - The Group's PRC subsidiaries are subject to China Corporate Income Tax at a statutory rate of 25%, but no provision was made due to no assessable profit for the period[34] - The Group is not subject to any income tax in the Cayman Islands, British Virgin Islands, and Hong Kong[34] 8. Dividends The Board does not recommend the payment of any interim dividend for the six months ended June 30, 2025, consistent with the prior year - The Board does not recommend the payment of any interim dividend for the six months ended June 30, 2025[35] 9. Earnings/(Loss) Per Share For the six months ended June 30, 2025, the company reported a basic loss per share of RMB (0.61), compared to a basic profit per share of RMB 2.4 in the prior year, with no diluted effect - Basic loss per share for the first half of 2025 was RMB (0.61), compared to a basic profit per share of RMB 2.4 in the corresponding period of 2024[36] - Diluted earnings per share were not presented for both periods as the exercise price of share options was higher than the average market price of shares, thus having no dilutive effect[37] 9(a) Basic Earnings/(Loss) Per Share This section details the calculation of basic earnings or loss per share, based on the period's profit or loss and weighted average number of shares - Basic loss per share for the six months ended June 30, 2025, was RMB (0.61)[36] - The calculation is based on a loss attributable to equity holders of the Company of RMB 9,054 thousand and a weighted average of 1,474,993 thousand ordinary shares outstanding[36] 9(b) Diluted Earnings/(Loss) Per Share This section explains why diluted earnings or loss per share were not presented, primarily due to the non-dilutive nature of outstanding share options - The calculation of diluted earnings/(loss) per share did not assume the exercise of the Company's outstanding share options because their exercise price was higher than the average market price of the shares during both periods presented[37] - Diluted earnings per share were not presented for the six months ended June 30, 2025, and 2024, as there were no outstanding potential ordinary shares[37] 10. Property, Plant and Equipment For the six months ended June 30, 2025, depreciation expense for property, plant and equipment was RMB 782 thousand, a decrease from the prior year - For the six months ended June 30, 2025, depreciation of property, plant and equipment amounted to RMB 782 thousand[38] - Depreciation expense decreased by 38.47% from RMB 1,271 thousand in the corresponding period of 2024[38] 11. Right-of-Use Assets During this interim period, the Group did not enter into any new lease agreements - During this interim period, the Group did not enter into any new lease agreements[39] 12. Trade and Other Receivables As of June 30, 2025, total trade and other receivables significantly increased, primarily due to a substantial rise in trade receivables aged 4 to 6 months Trade and Other Receivables (As of June 30) | Category | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Trade Receivables and Bills Receivable | 41,380 | 26,136 | | Bills Receivable from Banks | 3,041 | 1,633 | | Other Receivables | 1,326 | 1,860 | | Total | 45,747 | 29,629 | - Total trade and other receivables increased by 54.39% compared to December 31, 2024[40] 12(a) Trade Receivables and Bills Receivable This section provides an aging analysis of trade receivables and bills receivable, showing a significant increase in the 4 to 6 months aging category Aging Analysis of Trade Receivables and Bills Receivable (As of June 30) | Aging | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Within 1 month | 4,561 | 9,460 | | 1 to 3 months | 6,225 | 9,222 | | 4 to 6 months | 30,594 | 7,454 | | Total | 41,380 | 26,136 | - Trade receivables and bills receivable aged 4 to 6 months significantly increased from RMB 7,454 thousand as of December 31, 2024, to RMB 30,594 thousand as of June 30, 2025[40] - The Group grants an average credit period of 30 to 180 days to its customers[40] 12(b) Bills Receivable from Banks This section details the increase in bills receivable from banks, noting that all bills are aged within 180 days - Bills receivable from banks increased from RMB 1,633 thousand as of December 31, 2024, to RMB 3,041 thousand as of June 30, 2025[40] - All bills receivable from banks are aged within 180 days[41] 13. Trade and Other Payables As of June 30, 2025, total trade and other payables slightly decreased, with all amounts reclassified as current liabilities, indicating no non-current portion Trade and Other Payables (As of June 30) | Category | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Trade Payables | 27,916 | 31,633 | | Contract Liabilities | 14,126 | 14,522 | | Accrued Interest on Other Borrowings | 3,156 | 3,455 | | Other Accrued Expenses | 2,417 | 3,414 | | Staff-related Costs Payable | 9,908 | 9,827 | | Other Payables | 24,979 | 20,189 | | Total | 82,502 | 83,040 | - As of June 30, 2025, all trade and other payables are classified as current liabilities, with the non-current portion being zero (compared to RMB 3,296 thousand as of December 31, 2024)[42] - Trade payables aged over 3 months constitute the largest portion, amounting to RMB 25,171 thousand[42] 14. Scheme of Arrangement Liabilities The debt repayment arrangement scheme, effective March 12, 2024, aims to restructure company debt through initial and annual cash payments, with potential new share issuance for remaining claims; initial and 2024 annual payments have been made - The Scheme of Arrangement became effective on March 12, 2024, aiming to restructure the Company's overall indebtedness[44] - The scheme includes an initial cash payment (1% of admitted claims) and annual cash payments from 2024 to 2028 (the higher of HK$5 million/HK$10 million or a percentage of audited consolidated net profit for the relevant financial year)[44] - If cash payments are insufficient to settle all claims, the Company is required to allot and issue new shares to the scheme creditors[45] 15. Share Capital As of June 30, 2025, the company's authorized and issued and fully paid share capital remained unchanged Share Capital Composition (As of June 30) | Category | Number of Shares (thousand shares) | Par Value of Shares (HKD thousand) | Carrying Amount (RMB thousand) | | :--- | :--- | :--- | :--- | | Authorized Share Capital | 5,000,000 | 5,000 | - | | Issued and Fully Paid | 1,474,993 | 1,475 | 1,216 | - As of June 30, 2025, the total number of issued and fully paid shares was 1,474,993 thousand, with a carrying amount of RMB 1,216 thousand, consistent with December 31, 2024[46] 16. Contingent Liabilities As of June 30, 2025, the Group faces a local Chinese court lawsuit for a construction design contract balance, but management deems the plaintiff's success highly unlikely - The Group received notice from a local Chinese court regarding a lawsuit filed by a Chinese third party against its subsidiary, Chengdu Yiming Investment Management Co., Ltd., and its controlling shareholder, claiming approximately RMB 4,656 thousand for a construction design contract balance[47] - After considering independent legal advice, the Group's management believes the plaintiff's chances of success are remote[47] Management Discussion and Analysis Provides management's perspective on the Group's financial performance, operational results, and future outlook for the reporting period Business Review For the six months ended June 30, 2025, the Group continued to focus on its pharmaceutical distribution and manufacturing businesses in China - The Group remains committed to its pharmaceutical distribution and manufacturing businesses in China[48] Revenue For the six months ended June 30, 2025, the Group recorded total revenue of RMB 48.7 million, a slight decrease of approximately 0.28% from the prior year - The Group's total revenue was RMB 48.7 million, a slight decrease of approximately 0.28% from RMB 48.8 million in the corresponding period last year[49] Cost of Sales, Gross Profit and Gross Margin For the six months ended June 30, 2025, increased cost of sales led to a significant decline in gross profit and gross margin, primarily due to rising costs and intensified competition - Cost of sales increased by approximately 8.09% to RMB 42.5 million[50] - Gross profit decreased by approximately 34.8% to RMB 6.2 million, with gross margin falling from 19.5% to 12.8%[50] - The decline in gross profit and gross margin was mainly due to rising costs and intense competition in the pharmacy distribution industry[50] Other Income and Net Other Losses For the six months ended June 30, 2025, net other losses significantly decreased, primarily due to improvements in impairment losses on trade receivables and prepayments - Net other losses were RMB 1.6 million, a significant reduction from RMB 6.4 million in the corresponding period of 2024[51] - This primarily includes impairment losses on trade and other receivables, and prepayments and deposits paid[51] Selling and Distribution Expenses For the six months ended June 30, 2025, selling and distribution expenses decreased by approximately 30.3%, attributed to strict cost control policies and reduced sales and promotional activities - Selling and distribution expenses decreased by approximately 30.3% to RMB 2.4 million[52] - The reduction is due to the Group's strict cost control policies and fewer sales and promotional activities during the review period[52] General and Administrative Expenses For the six months ended June 30, 2025, general and administrative expenses decreased by approximately 21.6%, mainly due to the absence of legal and professional fees from prior period's trading resumption and debt restructuring - General and administrative expenses decreased by approximately 21.6% to RMB 5.7 million[53] - The decrease is primarily due to the absence of legal and professional fees incurred in the corresponding period of 2024 for handling the application for resumption of trading and debt restructuring[53] Finance Costs For the six months ended June 30, 2025, finance costs increased by approximately 23.2%, primarily due to imputed interest on repayment obligations under the debt repayment arrangement scheme - Finance costs increased by approximately 23.2% to RMB 6.3 million[54] - The increase in finance costs is mainly attributable to imputed interest arising from repayment obligations under the Scheme of Arrangement for the six months ended June 30, 2025[54] Profit/(Loss) for the Period For the six months ended June 30, 2025, the Group shifted from a profit to a loss, primarily due to the absence of a one-off debt restructuring gain from the prior period - The Group's loss for the six months ended June 30, 2025, was approximately RMB 9.1 million[55] - This compares to a profit of RMB 35.5 million in the corresponding period last year, marking a shift from profit to loss[55] - Primarily due to a one-off gain of RMB 47.4 million from debt restructuring in the corresponding period of 2024, which was absent in the current period[55] Future Prospects As China's economy recovers, the company anticipates increased market demand and competition, focusing on enhancing production and distribution capabilities to capitalize on opportunities - Market demand is expected to rebound, but the number of competitors in the market will also increase[56] - Management will focus on enhancing its production and distribution capabilities to seize business opportunities arising from market recovery[56] Liquidity, Financial and Capital Resources As of June 30, 2025, the Group saw a significant decrease in cash and cash equivalents, increased net current liabilities, and a lower current ratio, indicating heightened liquidity pressure; 100,000,000 share options also expired - Total cash and cash equivalents were RMB 3.6 million, a significant decrease from RMB 16.0 million as of December 31, 2024[57] - Net current liabilities of RMB 29.5 million were recorded, and the current ratio decreased from 1.01 as of December 31, 2024, to 0.75[57] - 100,000,000 share options expired and lapsed on May 25, 2025, with no outstanding share options as of June 30, 2025[58] Contingent Liabilities As of June 30, 2025, the Group had no other significant contingent liabilities beyond those disclosed in Note 16 to the condensed consolidated interim financial statements - As of June 30, 2025, the Group had no other material contingent liabilities apart from those disclosed in Note 16 to the condensed consolidated interim financial statements[59] Exchange Rate Risk The Group faces no significant exchange rate risk as most assets, transactions, and domestic operational expenditures are denominated and paid in RMB - Most of the Group's assets and transactions are denominated in RMB, and its domestic operational expenditures are primarily paid from RMB-denominated operating income[60] - Consequently, the Group does not face any significant foreign exchange risk[60] Other Information Presents additional disclosures including material investments, human resources, dividends, corporate governance, and shareholding information Material Investments, Acquisitions and Disposals For the six months ended June 30, 2025, the Group did not undertake any material investments, acquisitions, or disposals requiring disclosure under the Listing Rules - For the six months ended June 30, 2025, the Group did not undertake any material investments, acquisitions, or disposals requiring disclosure under the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[61] Human Resources As of June 30, 2025, the Group's headcount slightly increased, while total staff costs decreased; the company prioritizes attracting, developing, and retaining talent through competitive compensation and training - As of June 30, 2025, the Group employed 106 staff members (December 31, 2024: 97)[62] - For the six months ended June 30, 2025, total staff costs were RMB 3.1 million (corresponding period of 2024: RMB 3.4 million)[62] - The Group is committed to attracting, developing, and retaining talented employees by offering continuous advancement opportunities, a positive work environment, competitive remuneration, and incentives[62] Dividends The Board does not recommend the payment of any interim dividend for the six months ended June 30, 2025, consistent with the prior year - The Board does not recommend the payment of any interim dividend for the six months ended June 30, 2025 (six months ended June 30, 2024: nil)[63] Corporate Governance The company is committed to high corporate governance standards and complies with the Corporate Governance Code, but no new directors' and officers' liability insurance arrangements were made after the prior policy expired - The Company has adopted and complied with the Corporate Governance Code as set out in Appendix C1 Part 2 of the Listing Rules[64] - Following the expiry of the previous directors' and officers' liability insurance on December 6, 2024, the Company has not made any new insurance arrangements for potential legal actions against its directors[64] - The Company will continue to review and enhance its corporate governance practices to ensure compliance with the Corporate Governance Code[65] Audit Committee The Audit Committee, comprising three independent non-executive directors, reviews financial and accounting policies, oversees internal controls and risk management, and has reviewed the interim financial statements - The Audit Committee comprises three Independent Non-Executive Directors: Ms. Li Yan (Chairperson), Professor Lou Zhenye, and Mr. Wang Dongyuan[66] - Its primary responsibilities include assisting the Board in independently reviewing and overseeing the Group's financial and accounting policies, and supervising financial controls, internal controls, and risk management systems[66] - The Audit Committee has reviewed the accounting principles and practices adopted by the Group with the Company's management and has reviewed the condensed consolidated interim financial statements for the six months ended June 30, 2025[66] Compliance with the Model Code for Securities Transactions by Directors of Listed Issuers All directors confirmed compliance with the Model Code for Securities Transactions by Directors of Listed Issuers for the six months ended June 30, 2025 - All Directors have confirmed their compliance with the relevant provisions of the Model Code for the six months ended June 30, 2025[67] Share Option Scheme The company's 2015 Share Option Scheme expired on May 25, 2025; no options were granted, exercised, or cancelled during the reporting period, and no options were outstanding at period-end - The Share Option Scheme, effective for ten years from May 26, 2015, expired and lapsed on May 25, 2025[68] - For the six months ended June 30, 2025, 100,000,000 share options lapsed, and no share options were granted, exercised, or cancelled under the Share Option Scheme[69][73] - As of June 30, 2025, no share options granted under the Share Option Scheme were available for issuing securities[69] Directors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares and Debentures of the Company or Any Associated Corporation As of June 30, 2025, no directors or chief executives held any disclosable interests or short positions in the shares, underlying shares, or debentures of the company or its associated corporations - As of June 30, 2025, no Directors or chief executives of the Company had any disclosable interests or short positions in the shares, underlying shares, or debentures of the Company or its associated corporations[77] Directors' Rights to Acquire Shares or Debentures During the review period, no rights were granted or exercised by any director, their spouse, or minor children to acquire shares or debentures of the company - During the review period, no rights were granted to any Director or their respective spouse or minor children to acquire benefits by purchasing shares or debentures of the Company, nor were any such rights exercised[78] Substantial Shareholders' and Other Persons' Interests and Short Positions in Shares and Underlying Shares of the Company As of June 30, 2025, Gabo Limited and its controlled entity interest holder, Mr. Chen Yanfei, were substantial shareholders, holding 51.05% and 51.97% of the issued share capital, respectively; other parties also held interests in pledged shares Substantial Shareholders' Long Positions in Shares (As of June 30, 2025) | Name of Shareholder | Capacity/Nature of Interest | Number of Shares Held | Approximate Percentage of Issued Share Capital | | :--- | :--- | :--- | :--- | | Gabo Limited | Beneficial Owner | 753,040,000 | 51.05% | | Mr. Chen Yanfei | Interest in Controlled Corporation | 753,040,000 | 51.05% | | | Beneficial Owner | 13,560,000 | 0.92% | | | Total | 766,600,000 | 51.97% | Other Persons' Long Positions in Shares (As of June 30, 2025) | Name of Shareholder | Capacity/Nature of Interest | Number of Shares Held | Approximate Percentage of Issued Share Capital | | :--- | :--- | :--- | :--- | | Win Win Stable No. 3 Fund SP | Person having a security interest in shares | 753,040,000 | 51.05% | | Zhongtai Innovation Capital Management Limited | Investment Manager | 753,040,000 | 51.05% | | Mr. Ma Demin | Agent | 753,040,000 | 51.05% | | Mr. Li Yinglin | Agent | 753,040,000 | 51.05% | - 753,040,000 shares (approximately 51.05% of the issued share capital) were pledged by Gabo Limited to Win Win Stable No. 3 Fund SP, with Mr. Ma Demin and Mr. Li Yinglin acting as joint and several receivers and managers[80] Purchase, Sale or Redemption of Listed Securities For the six months ended June 30, 2025, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities - For the six months ended June 30, 2025, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[81] Changes in Directors' Information Independent Non-Executive Director Mr. Xu Qilin retired on June 26, 2025, and committee roles for Mr. Wang Dongyuan and Professor Lou Zhenye were adjusted - Independent Non-Executive Director Mr. Xu Qilin retired on June 26, 2025[82] - Mr. Wang Dongyuan was appointed Chairman of the Nomination Committee and a member of the Audit and Remuneration Committees; Professor Lou Zhenye was appointed a member of the Nomination and Corporate Governance Committees[82] - Independent Non-Executive Director Mr. Wang Dongyuan resigned as an independent non-executive director of Honglong China Real Estate Group Co., Ltd. effective June 27, 2025[82] Company's Registered Office The company's registered office service provider in the Cayman Islands terminated services on July 22, 2025, and the Board is seeking a new provider - The Company's registered office service provider in the Cayman Islands terminated its services to the Company on July 22, 2025[83] - The Board is currently seeking another service provider to provide registered office services to the Company as soon as possible[83] Events After the Reporting Period The Board is unaware of any significant events occurring after June 30, 2025, up to the date of this interim report - The Board is not aware of any significant events occurring after June 30, 2025, and up to the date of this interim report[84]