TL NATURAL GAS(08536) - 2025 - 中期业绩

Company Information and Report Declaration This section provides an overview of the company, its reporting standards, and the responsibilities of its directors Company Overview and Report Publication TL Natural Gas Holdings Limited (Stock Code: 8536) announced its unaudited interim results for the six months ended June 30, 2025, with the full report published on HKEX and the company website - TL Natural Gas Holdings Limited (Stock Code: 8536) released its unaudited interim results for the six months ended June 30, 2025[2] - This announcement contains the full 2025 interim report, complying with GEM Listing Rules[2] - The report is published on the HKEX website www.hkexnews.hk and the company website www.tl-cng.com[5](index=5&type=chunk) Characteristics of GEM Market and Directors' Responsibilities The Stock Exchange's GEM market offers a listing platform for SMEs with higher investment risks, and the company's directors collectively and individually assume full responsibility for the report's accuracy - The Stock Exchange's GEM market is positioned for small and medium-sized companies, carrying higher investment risks and potential for significant market volatility[6] - The company's directors collectively and individually assume full responsibility for the information in this report, confirming its accuracy and completeness in all material aspects, without misleading or fraudulent content[7] Currency and Terminology Definitions All monetary values in this report are presented in RMB, with definitions provided for Compressed Natural Gas (CNG) and Liquefied Natural Gas (LNG) as clean alternative vehicle fuels - All monetary values are presented in Renminbi ("RMB")[8] - Compressed Natural Gas (CNG) refers to natural gas compressed to high density under high pressure, used as a clean alternative vehicle fuel[8] - Liquefied Natural Gas (LNG) refers to natural gas converted into liquid form[8] Financial Performance Overview This section provides a concise summary of the group's financial results, including income, comprehensive expenses, financial position, equity changes, and cash flows for the period Condensed Consolidated Statement of Profit or Loss For the six months ended June 30, 2025, the Group's revenue decreased by 3.47% to RMB 42,882 thousand, while loss for the period narrowed by 40.43% to RMB 2,679 thousand Key Data from Condensed Consolidated Statement of Profit or Loss | Indicator | Six Months Ended June 30, 2025 (Thousand RMB) | Six Months Ended June 30, 2024 (Thousand RMB) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 42,882 | 44,424 | -3.47% | | Cost of sales | (39,263) | (40,563) | -3.21% | | Gross profit | 3,619 | 3,861 | -6.31% | | Loss before tax | (2,679) | (4,000) | -33.03% | | Loss for the period | (2,679) | (4,497) | -40.43% | | Basic and diluted loss per share attributable to owners of the Company | RMB (1.46) cents | RMB (2.43) cents | -39.92% | Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income For the six months ended June 30, 2025, the Group's total comprehensive expense significantly decreased by 45.65% to RMB 2,977 thousand, driven by a narrower loss for the period and improved exchange differences Key Data from Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income | Indicator | Six Months Ended June 30, 2025 (Thousand RMB) | Six Months Ended June 30, 2024 (Thousand RMB) | Change (%) | | :--- | :--- | :--- | :--- | | Loss for the period | (2,679) | (4,497) | -40.43% | | Exchange differences on translation of foreign operations | – | (1,958) | -100.00% | | Exchange differences on translation of the Company's financial statements | (298) | 977 | -130.50% | | Total comprehensive expense for the period | (2,977) | (5,478) | -45.65% | Condensed Consolidated Statement of Financial Position As of June 30, 2025, the Group's total assets less current liabilities increased by 3.96% to RMB 56,008 thousand, with net assets growing by 4.85% to RMB 55,880 thousand Key Data from Condensed Consolidated Statement of Financial Position | Indicator | June 30, 2025 (Thousand RMB) | December 31, 2024 (Thousand RMB) | Change (%) | | :--- | :--- | :--- | :--- | | Total non-current assets | 15,793 | 19,997 | -21.02% | | Total current assets | 48,574 | 42,204 | 15.10% | | Total current liabilities | 8,359 | 8,324 | 0.42% | | Net current assets | 40,215 | 33,880 | 18.70% | | Total assets less current liabilities | 56,008 | 53,877 | 3.96% | | Net assets | 55,880 | 53,298 | 4.85% | Condensed Consolidated Statement of Changes in Equity For the six months ended June 30, 2025, total equity attributable to owners of the Company increased to RMB 55,880 thousand, primarily due to reduced loss for the period and increased share capital from new share issuance Key Data from Condensed Consolidated Statement of Changes in Equity | Indicator | June 30, 2025 (Thousand RMB) | June 30, 2024 (Thousand RMB) | Change (%) | | :--- | :--- | :--- | :--- | | Equity attributable to owners of the Company at beginning of period | 53,298 | 60,093 | -11.31% | | Loss for the period | (2,679) | (4,423) | -39.44% | | Total comprehensive expense for the period | (2,977) | (5,404) | -44.91% | | Issue of shares, net of transaction costs | 5,559 | 3,489 | 59.32% | | Lapse of share options | – | – | N/A | | Equity attributable to owners of the Company at end of period | 55,880 | 58,178 | -3.95% | - Lapse of share options resulted in a RMB 4,300 thousand reduction in share option reserve, transferred back to accumulated losses[15] Condensed Consolidated Statement of Cash Flows For the six months ended June 30, 2025, the Group's cash and cash equivalents increased by RMB 2,521 thousand, reaching RMB 32,101 thousand at period-end, primarily driven by financing activities Key Data from Condensed Consolidated Statement of Cash Flows | Indicator | Six Months Ended June 30, 2025 (Thousand RMB) | Six Months Ended June 30, 2024 (Thousand RMB) | Change (%) | | :--- | :--- | :--- | :--- | | Net cash used in operating activities | (2,769) | (3,506) | -21.02% | | Net cash from investing activities | 31 | 79 | -60.76% | | Net cash from financing activities | 5,259 | 2,932 | 79.37% | | Net increase (decrease) in cash and cash equivalents | 2,521 | (495) | 609.29% | | Cash and cash equivalents at end of period | 32,101 | 27,913 | 15.00% | Notes to the Financial Statements This section details the company's general information, accounting policies, segment reporting, and specific financial item breakdowns General Information The Company, incorporated in the Cayman Islands and listed on the Stock Exchange, primarily engages in natural gas sales and digital marketing services, with Yong Sheng Industrial Limited and Hong Sheng Industrial Limited as its holding and ultimate holding companies - The Company is incorporated in the Cayman Islands, with its shares listed on the Stock Exchange[18] - The Group's principal activities are natural gas sales and the provision of digital marketing services[19] - The Company's holding company and ultimate holding company are Yong Sheng Industrial Limited and Hong Sheng Industrial Limited, respectively, both incorporated in the British Virgin Islands[18] Basis of Preparation and Principal Accounting Policies The condensed consolidated financial statements are prepared in accordance with HKAS 34 and GEM Listing Rules, using the historical cost convention, consistent with prior year policies, with no significant impact from revised HKFRSs - The condensed consolidated financial statements are prepared in accordance with Hong Kong Accounting Standard 34 and the GEM Listing Rules of the Stock Exchange[20] - The historical cost convention is adopted, and accounting policies are consistent with the annual consolidated financial statements for the year ended December 31, 2024[21] - The application of revised Hong Kong Financial Reporting Standards (such as amendments to HKAS 21) has no significant impact on the financial position and performance for the current and prior periods[22][23] Revenue and Operating Segment Information The Group's main operating segments are natural gas sales and digital marketing services, with other businesses not meeting reportable thresholds; all revenue and non-current assets are derived from China - The Group's reportable segments include sales of compressed natural gas and liquefied natural gas, natural gas transmission services, and the provision of digital marketing services[27] - Other operating segments, such as automatic car wash services and fast-food catering services, do not meet the quantitative thresholds for reportable segments and are classified as “Others”[25] Segment Revenue and Results (Six Months Ended June 30, 2025) | Segment | Revenue (Thousand RMB) | Segment Results (Thousand RMB) | | :--- | :--- | :--- | | Natural gas sales | 42,882 | (574) | | Digital marketing services | – | (364) | | Others | – | (129) | | Total | 42,882 | (1,067) | - All of the Group's revenue is generated from customers located in China, and all non-current assets are also located in China[31][32] Other Income, Gains and Losses For the six months ended June 30, 2025, the Group's total other income, gains, and losses amounted to RMB 88 thousand, a 44.7% decrease from the prior year, primarily comprising bank interest income, net exchange losses, and sundry income Components of Other Income, Gains and Losses | Item | Six Months Ended June 30, 2025 (Thousand RMB) | Six Months Ended June 30, 2024 (Thousand RMB) | Change (%) | | :--- | :--- | :--- | :--- | | Bank interest income | 75 | 137 | -45.26% | | Net exchange losses | (1) | (1) | 0.00% | | Sundry income | 14 | 23 | -39.00% | | Total | 88 | 159 | -44.65% | Components of Loss Before Tax For the six months ended June 30, 2025, the Group's loss before tax was RMB 2,679 thousand, primarily driven by cost of inventories sold, depreciation, utility expenses, transportation expenses, auditor's remuneration, and employee benefit expenses, with decreases in cost of inventories sold and depreciation Major Components of Loss Before Tax | Item | Six Months Ended June 30, 2025 (Thousand RMB) | Six Months Ended June 30, 2024 (Thousand RMB) | Change (%) | | :--- | :--- | :--- | :--- | | Cost of inventories sold | 37,119 | 38,152 | -2.71% | | Depreciation of property, plant and equipment | 1,197 | 1,313 | -8.83% | | Depreciation of right-of-use assets | 276 | 520 | -46.92% | | Employee benefit expenses (including directors' and chief executive's emoluments) | 3,055 | 3,148 | -2.95% | | Administrative expenses | 6,080 | 7,722 | -21.26% | | Selling and distribution expenses | 285 | 301 | -5.29% | Finance Costs For the six months ended June 30, 2025, the Group's finance costs decreased by 46.15% to RMB 14 thousand, primarily consisting of interest on lease liabilities Analysis of Finance Costs | Item | Six Months Ended June 30, 2025 (Thousand RMB) | Six Months Ended June 30, 2024 (Thousand RMB) | Change (%) | | :--- | :--- | :--- | :--- | | Interest on lease liabilities | 14 | 26 | -46.15% | Taxation For the six months ended June 30, 2025, the Group did not provide for current income tax expense due to no taxable profit and no significant deferred tax, with Chinese subsidiaries taxed at 25% and other entities having no income tax provision - For the six months ended June 30, 2025, the Group did not provide for current income tax expense as no taxable profit was generated and there was no significant deferred tax[38] - Chinese subsidiaries are subject to Enterprise Income Tax at a statutory rate of 25%[38] - No income tax provision was made for subsidiaries in the Cayman Islands, British Virgin Islands, and Hong Kong, as they are either exempt from income tax or did not generate taxable profits[38] Loss Per Share For the six months ended June 30, 2025, basic loss per share attributable to owners of the Company improved to RMB (1.46) cents, with diluted loss per share being the same due to the anti-dilutive effect of share options Loss Per Share Calculation | Indicator | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Loss attributable to ordinary equity holders of the Company (Thousand RMB) | (2,679) | (4,423) | -39.44% | | Weighted average number of ordinary shares in issue (Thousand shares) | 183,839 | 182,249 | 0.87% | | Basic loss per share (cents) | (1.46) | (2.43) | -39.92% | - The diluted loss per share amount was not adjusted as the outstanding share options had an anti-dilutive effect on the basic loss per share amount[40] Dividends The Board of Directors did not recommend the payment of any dividend for the six months ended June 30, 2025, consistent with the prior corresponding period - The Board of Directors did not declare any dividend for the six months ended June 30, 2025 (six months ended June 30, 2024: nil)[41] Changes in Property, Plant and Equipment and Right-of-Use Assets During the interim period, the Group acquired property, plant and equipment at a cost of RMB 44 thousand, a decrease from the prior year, with no additions to right-of-use assets in either period Acquisition Cost of Property, Plant and Equipment | Item | Six Months Ended June 30, 2025 (Thousand RMB) | Six Months Ended June 30, 2024 (Thousand RMB) | Change (%) | | :--- | :--- | :--- | :--- | | Cost of acquisition of property, plant and equipment | 44 | 58 | -24.14% | - No additions to right-of-use assets were identified in either period[43] Trade Receivables As of June 30, 2025, the Group's net trade receivables increased by 4.66% to RMB 1,886 thousand, with all receivables aged within 3 months and no collateral held Net Trade Receivables | Indicator | June 30, 2025 (Thousand RMB) | December 31, 2024 (Thousand RMB) | Change (%) | | :--- | :--- | :--- | :--- | | Gross trade receivables | 1,907 | 1,816 | 5.01% | | Less: Provision for expected credit losses | (21) | (14) | 50.00% | | Net trade receivables | 1,886 | 1,802 | 4.66% | - The Group primarily enters into trade terms with customers on credit, with a typical credit period of one month[44] - All trade receivables are aged within 3 months, and the Group does not hold any collateral or other credit enhancements for its trade receivable balances[44][46] Trade Payables As of June 30, 2025, the Group's trade payables significantly decreased by 81.51% to RMB 22 thousand, with a typical credit period of 30 to 90 days from suppliers Ageing Analysis of Trade Payables | Ageing | June 30, 2025 (Thousand RMB) | December 31, 2024 (Thousand RMB) | Change (%) | | :--- | :--- | :--- | :--- | | Within 3 months | – | 119 | -100.00% | | 3 to 6 months | 22 | – | N/A | | Total | 22 | 119 | -81.51% | - The Group is generally granted a credit period of 30 to 90 days by its suppliers[48] Share Capital As of June 30, 2025, the Company's issued and fully paid share capital increased to RMB 7,280 thousand, with 212,505,000 shares in issue, following the issuance of 29,310,000 new shares for approximately RMB 6,018 thousand Changes in Share Capital | Indicator | June 30, 2025 (Thousand RMB) | December 31, 2024 (Thousand RMB) | Change (%) | | :--- | :--- | :--- | :--- | | Issued and fully paid share capital | 7,280 | 6,210 | 17.23% | | Number of shares in issue | 212,505,000 | 183,195,000 | 15.99% | | Shares issued during the period | 29,310,000 | 220 | N/A | | Gross proceeds from share issuance | 6,018 | 3,597 | 67.30% | | Net proceeds from share issuance | 5,559 | 3,489 | 59.32% | - On June 27, 2025, a total of 29,310,000 shares were placed at a placing price of HKD 0.225 per share to no less than six placees, in accordance with the terms of the placing agreement[49] Related Party Transactions For the six months ended June 30, 2025, total emoluments paid to key management personnel decreased by 12.6% to RMB 515 thousand, primarily comprising short-term employee benefits and pension scheme contributions Key Management Personnel Emoluments | Item | Six Months Ended June 30, 2025 (Thousand RMB) | Six Months Ended June 30, 2024 (Thousand RMB) | Change (%) | | :--- | :--- | :--- | :--- | | Short-term employee benefits | 507 | 581 | -12.74% | | Pension scheme contributions | 8 | 8 | 0.00% | | Total emoluments paid to key management personnel | 515 | 589 | -12.60% | Management Discussion and Analysis This section reviews the Group's business operations, financial performance, future outlook, capital structure, and risk management strategies Business Review The Group operates primarily in Jingzhou, Hubei Province, China, engaging in CNG and LNG sales and transmission services, sourcing natural gas from PetroChina for retail and wholesale customers - The Group's principal place of business is located in Jingzhou, Hubei Province, China[51] - The Company is engaged in the sales of CNG and LNG and the provision of transmission services in China[51] - CNG is primarily supplied to retail customers (vehicle end-users) and wholesale customers (town gas companies, gas station operators, and industrial users), with natural gas purchased from PetroChina Company Limited[52] Financial Review For the six months ended June 30, 2025, the Group's revenue decreased by 3.38% to RMB 42.9 million, while loss for the period narrowed by 38.6% to RMB 2.7 million, mainly due to a significant reduction in administrative expenses Key Financial Review Data | Indicator | Six Months Ended June 30, 2025 (Million RMB) | Six Months Ended June 30, 2024 (Million RMB) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 42.9 | 44.4 | -3.38% | | Cost of sales | 39.3 | 40.6 | -3.20% | | Gross profit | 3.6 | 3.9 | -7.69% | | Gross profit margin | 8.4% | 8.7% | -0.3 percentage points | | Administrative expenses | 6.1 | 7.7 | -20.78% | | Loss attributable to owners of the Company | 2.7 | 4.4 | -38.64% | - The decrease in revenue was primarily due to a significant reduction in CNG sales to wholesale customers, partially offset by an increase in LNG sales[53] - The decline in gross profit margin was mainly due to the inability to fully pass on increased natural gas procurement costs in a timely manner and the low gross profit margin of LNG sales[55] - The reduction in administrative expenses was mainly due to a decrease of approximately RMB 0.7 million in legal and professional fees and consultancy fees, and approximately RMB 0.4 million in staff costs[57] Prospects The Group anticipates a challenging global economic landscape but remains optimistic about China's natural gas consumption growth due to supportive government policies, actively exploring new business opportunities and considering new investments to enhance shareholder value - The global economic landscape is expected to remain challenging, with geopolitical tensions and a slowdown in China's property market potentially prolonging financial difficulties[61] - The Group remains optimistic about the growth in natural gas consumption, supported by Chinese government policies promoting natural gas and clean energy development[61] - The Group will actively explore new business opportunities to diversify its revenue streams and prudently consider new investments to enhance shareholder value[61] Dividends The Board of Directors does not recommend the payment of any dividend for the six months ended June 30, 2025, consistent with the prior corresponding period - The Board of Directors does not recommend the payment of any dividend for the six months ended June 30, 2025 (six months ended June 30, 2024: nil)[62] Capital Structure, Liquidity and Financial Resources As of June 30, 2025, the Group's total equity was approximately RMB 55.9 million, with cash and cash equivalents of approximately RMB 32.1 million, working capital of approximately RMB 40.2 million, and a current ratio of 5.8, indicating sufficient liquidity without interest-bearing bank borrowings Capital Structure and Liquidity | Indicator | June 30, 2025 (Million RMB) | | :--- | :--- | | Total equity | 55.9 | | Cash and cash equivalents | 32.1 | | Working capital (Net current assets) | 40.2 | | Current ratio | 5.8 | | Gearing ratio | Not applicable (no interest-bearing bank borrowings) | - The Group possesses sufficient liquidity and financial resources to meet its working capital requirements[63] Prepayments and Other Receivables As of June 30, 2025, the Group's prepayments and other receivables increased by 33.03% to RMB 14.5 million, primarily due to higher supplier deposits and advances to third parties Components of Prepayments and Other Receivables | Item | June 30, 2025 (Million RMB) | December 31, 2024 (Million RMB) | Change (%) | | :--- | :--- | :--- | :--- | | Total prepayments and other receivables | 14.5 | 10.9 | 33.03% | | Deposits to suppliers and advances to third parties | 8.7 | 4.9 | 77.55% | | Prepaid expenses | 3.3 | 3.5 | -5.71% | | Amounts due from directors | 2.5 | 2.5 | 0.00% | Commitments As of June 30, 2025, the Group had zero contracted but unprovided capital commitments, a decrease from RMB 539 thousand at December 31, 2024, which primarily related to plant and machinery Capital Commitments | Item | June 30, 2025 (Thousand RMB) | December 31, 2024 (Thousand RMB) | Change (%) | | :--- | :--- | :--- | :--- | | Contracted, but not provided for: Plant and machinery | – | 539 | -100.00% | Contingent Liabilities and Guarantees As of June 30, 2025, the Group had no significant contingent liabilities or guarantees, consistent with the situation at December 31, 2024 - As of June 30, 2025, the Group had no significant contingent liabilities or guarantees (December 31, 2024: nil)[66] Pledge of Assets As of June 30, 2025, the Group had no pledge of assets, consistent with the situation at December 31, 2024 - As of June 30, 2025, the Group had no pledge of assets (December 31, 2024: nil)[67] Foreign Currency Risk The Group primarily operates in China with most transactions denominated in RMB, and exchange rate fluctuations during the period had no significant impact on operational liquidity, with no hedging or forward contracts in place - The Group operates its businesses in China, with most of its transactions denominated in RMB[68] - Exchange rate fluctuations during the period did not have any significant impact or difficulties on operational liquidity[68] - The Group has not entered into any hedging transactions or forward contract arrangements[68] Interest Rate Risk The Group has no significant interest rate risk and currently has no specific policies or interest rate swap transactions to manage it, but will closely monitor future related risks - The Group has no significant interest rate risk[69] - The Group currently has no specific policies to manage interest rate risk and has not entered into any interest rate swap transactions[69] Significant Investments, Acquisitions and Disposals The Company held no significant investments, acquisitions, or disposals of subsidiaries, associates, or joint ventures during the period, and no other major investment plans have been authorized by the Board as of the report date - The Company held no significant investments, nor any significant acquisitions and disposals of subsidiaries, associates, and joint ventures during the period[70] - As of the date of this report, the Board has not authorized any other plans for significant investments or additions to capital assets[71] Other Information This section covers employee and remuneration policies, fundraising activities, use of proceeds, interests of directors and major shareholders, share option scheme, and corporate governance matters Employees and Remuneration Policy As of June 30, 2025, the Group had 66 employees with staff costs of approximately RMB 3.1 million, and remuneration is determined based on market salaries, performance, time commitment, and responsibilities, with training and regular performance appraisals provided Employees and Remuneration | Indicator | June 30, 2025 | December 31, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Total number of employees | 66 | 69 | -4.35% | | Staff costs (Six months ended June 30) | Approximately RMB 3.1 million | Approximately RMB 2.7 million | 14.81% | - Remuneration is determined with reference to comparable market salaries, individual performance, time commitment, and responsibilities[72] Fundraising Activities The Group conducted two placings in 2024 and 2025, raising net proceeds of approximately HKD 3 million and HKD 6 million respectively, for renewable energy investments, a potential joint venture in black granule trading, and general working capital - The 2024 placing successfully placed 5,940,000 shares, raising net proceeds of approximately HKD 3 million, used for investments in renewable energy-related businesses and general working capital[73][74][75] - The 2025 placing successfully placed 29,310,000 shares, raising net proceeds of approximately HKD 6 million, planned for the possible establishment of a joint venture engaged in black granule trading and general working capital[76][77][78] - Both placings aimed to broaden the Company's shareholder base and capital base, and enable the Group to raise funds[73][76] Use of Proceeds The Company's net proceeds from listing, approximately HKD 29.2 million, were partially used for Jingzhou mother station infrastructure upgrades completed in 2021, while other CNG and integrated CNG/LNG station construction plans are delayed due to government approvals and site relocation, with unutilized funds held in banks Use of Listing Proceeds and Progress | Intended Use | Intended Amount (Thousand HKD) | Actual Use (Thousand HKD) | Unutilized Amount (Thousand HKD) | | :--- | :--- | :--- | :--- | | Construction of CNG filling stations | 5,212 | 2,400 | 2,812 | | Construction of integrated CNG/LNG filling stations | 12,250 | 2,334 | 9,916 | | Jingzhou mother station upgrade | 8,772 | 8,772 | – | | Working capital and general corporate purposes | 2,916 | 2,916 | – | | Total | 29,150 | 16,422 | 12,728 | - The implementation plan to upgrade the infrastructure and equipment of the Jingzhou mother station to equip it with LNG refueling capabilities was completed in 2021[81][82] - Other filling station construction plans are delayed due to government approvals and site relocation, and the Company is seeking relocation opportunities and awaiting approval from relevant government authorities[82] - As of June 30, 2025, the unutilized net proceeds were deposited in licensed banks in China[82] Directors' and Chief Executive's Interests As of June 30, 2025, Executive Directors Mr. Liu Yongcheng and Mr. Liu Yongqiang held approximately 35.82% of the Company's ordinary shares through controlled corporations and parties acting in concert, with no other directors or chief executives having disclosable interests Directors' and Chief Executive's Long Positions in the Company's Shares | Name | Capacity/Nature of Interest | Number of Shares Held | Approximate Percentage of Total Issued Shares | | :--- | :--- | :--- | :--- | | Mr. Liu Yongcheng | Interest in controlled corporations and parties acting in concert | 76,125,000 | 35.82% | | Mr. Liu Yongqiang | Interest in controlled corporations and parties acting in concert | 76,125,000 | 35.82% | - Mr. Liu Yongcheng holds interests through Yong Sheng Industrial Limited and is a party acting in concert with Mr. Liu Yongqiang[86] - Mr. Liu Yongqiang holds interests through Hong Sheng Industrial Limited and is a party acting in concert with Mr. Liu Yongcheng[86] Substantial Shareholders' Interests As of June 30, 2025, Yong Sheng Industrial Limited and Hong Sheng Industrial Limited, as beneficial owners and parties acting in concert, each held approximately 35.82% of the Company's shares, while Anwen Development Limited held approximately 6.53% Substantial Shareholders' Long Positions in the Company's Shares | Name | Capacity | Number of Shares Held | Approximate Percentage of Total Issued Shares | | :--- | :--- | :--- | :--- | | Yong Sheng Industrial Limited | Beneficial owner and party acting in concert | 76,125,000 | 35.82% | | Hong Sheng Industrial Limited | Beneficial owner and party acting in concert | 76,125,000 | 35.82% | | Anwen Development Limited | Beneficial owner | 13,872,500 | 6.53% | - The interests of Yong Sheng Industrial Limited and Hong Sheng Industrial Limited are related to the parties acting in concert relationship with Executive Directors Mr. Liu Yongcheng and Mr. Liu Yongqiang[89][93] Share Option Scheme The Company's share option scheme was approved on April 20, 2018; all existing share options lapsed during the six months ended June 30, 2025, with no outstanding options at period-end, but 8,500,000 options were granted post-period on July 8, 2025, representing approximately 4.00% of issued shares - The share option scheme was approved and adopted by the Company's shareholders on April 20, 2018[92] - During the six months ended June 30, 2025, all existing share options lapsed, with no outstanding share options at period-end[100] - Subsequent to the reporting period, on July 8, 2025, the Company granted a total of 8,500,000 share options, representing approximately 4.00% of the issued shares as of the date of this report[101] - The fair value of the share options is calculated using a binomial option pricing model, with a vesting period of three years and an exercise period of five years[98] Directors' Rights to Acquire Shares Apart from the share option scheme, the Company granted no rights to any directors or their associates to acquire shares or debentures during the six months ended June 30, 2025, nor were any such rights exercised - Save for the share option scheme, the Company did not grant any rights to any directors or their respective spouses or children under 18 years of age to acquire benefits by way of acquisition of shares or debentures of the Company during the six months ended June 30, 2025[102] Purchase, Sale or Redemption of the Company's Listed Securities During 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 - During 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[103] Compliance with the Required Standard of Dealings by Directors in Securities The Company adopted the Model Code for Securities Transactions by Directors of Listed Issuers as its code of conduct, and all directors confirmed compliance for the six months ended June 30, 2025 - The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Rules 5.48 to 5.67 of the GEM Listing Rules of the Stock Exchange as its code of conduct for directors' dealings in securities[104] - Following specific enquiries made to all directors, all directors confirmed their compliance with the Model Code for the six months ended June 30, 2025[104] Non-Competition Undertaking The Group's controlling shareholders signed a non-competition undertaking on April 20, 2018, committing not to engage in any competing business, and each confirmed compliance during the period - The Group's controlling shareholders entered into a non-competition undertaking on April 20, 2018[105] - Each controlling shareholder undertook not to directly or indirectly engage in, operate, or participate in any business that competes or may compete with the existing business activities of any member of the Group[105] - Each controlling shareholder confirmed to the Company that they had complied with the non-competition undertaking during the period[105] Competing Interests As of June 30, 2025, no directors, controlling shareholders, or substantial shareholders, or their close associates, held any positions or interests in businesses that compete or may significantly compete with the Group's operations - As of the six months ended June 30, 2025, to the best knowledge of the directors, none of the directors, controlling shareholders, and substantial shareholders of the Company, or their respective close associates, held any position or interest in any restricted business or any business or company that competes or may significantly compete with the Group's business[106] Corporate Governance Code The Company adopted and complied with the Corporate Governance Code, with one deviation where the Chairman and CEO roles are held by the same person (Mr. Liu Yongcheng), which the Board believes is in the Group's best interest with proper checks and balances - The Company has adopted and complied with the Corporate Governance Code as set out in Appendix C1 to the GEM Listing Rules of the Stock Exchange[107] - There is one deviation: the roles of Chairman and Chief Executive Officer are held by the same person (Mr. Liu Yongcheng)[107] - The Board believes this arrangement is in the best interests of the Group, with appropriate checks and balances exercised through the Board and three independent non-executive directors[107] Update on Directors' Information For the six months ended June 30, 2025, there were no changes in directors' information requiring disclosure under Rule 17.50A(1) of the GEM Listing Rules - For the six months ended June 30, 2025, there were no changes in directors' information requiring disclosure under Rule 17.50A(1) of the GEM Listing Rules of the Stock Exchange[108] Audit and Risk Management Committee The Company has established an Audit and Risk Management Committee, comprising three independent non-executive directors, which has reviewed the Group's unaudited condensed consolidated financial statements and this report for the six months ended June 30, 2025 - The Company has established an Audit and Risk Management Committee, whose written terms of reference comply with Code Provision D.3.3 of the Corporate Governance Code[109] - The Committee comprises three independent non-executive directors: Mr. Yang Zhenyu (Chairman), Ms. Luo Hongru, and Ms. Zeng Li[109] - The Audit and Risk Management Committee has reviewed the Group's unaudited condensed consolidated financial statements and this report for the six months ended June 30, 2025[109] Events After the Reporting Period Save as disclosed in this report, no significant events occurred after the end of the reporting period - Save as disclosed in this report, no significant events occurred after the end of the reporting period[110] Forward-Looking Statements This report contains forward-looking statements regarding the Group's financial condition, operating results, and business, which involve known and unknown risks and uncertainties that could cause actual results to differ materially from expectations - This report contains forward-looking statements regarding the Group's financial condition, operating results, and business[111] - These forward-looking statements involve known and unknown risks and uncertainties that could cause actual results, performance, or events to differ materially from those expressed or implied in such statements[111] By Order of the Board This report was signed by Mr. Liu Yongcheng, Executive Director, Chairman, and Chief Executive Officer, on behalf of the Board on August 14, 2025, with the Board comprising three executive and three independent non-executive directors - This report was signed by Mr. Liu Yongcheng, Executive Director, Chairman, and Chief Executive Officer, on behalf of the Board on August 14, 2025[112] - The Board members include Executive Directors Mr. Liu Yongcheng, Mr. Liu Yongqiang, and Mr. Liu Yongsheng; and Independent Non-executive Directors Ms. Luo Hongru, Ms. Zeng Li, and Mr. Yang Zhenyu[112]