百宏实业(02299) - 2025 - 中期业绩

Summary The report summary outlines Baihong Industrial Holdings Limited's key financial performance for the six months ended June 30, 2025, including a decrease in revenue but significant profit growth, and earnings per share data Key Financial Data for H1 2025 | Indicator | H1 2025 (RMB) | | :--- | :--- | | Revenue | 9.485 billion | | Profit | 377 million | | Earnings Per Share | 0.18 | - Revenue for H1 2025 reached RMB 9.485 billion, a 10.7% decrease year-on-year[2] - Profit for H1 2025 reached RMB 377 million, a 15.0% increase year-on-year[2] Unaudited Condensed Consolidated Financial Statements This section presents the unaudited condensed consolidated financial statements of Baihong Industrial Holdings Limited and its subsidiaries for the six months ended June 30, 2025, including the income statement, statement of comprehensive income, and statement of financial position, with comparisons to the corresponding period in 2024 or December 31, 2024 Unaudited Condensed Consolidated Statement of Profit or Loss For the six months ended June 30, 2025, the company's revenue decreased by 10.7% year-on-year, but operating profit and profit for the period both grew due to cost control and reduced finance costs Key Data from Condensed Consolidated Statement of Profit or Loss | Indicator | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 9,484,707 | 10,619,933 | -10.7% | | Cost of sales | (8,680,344) | (9,888,027) | -12.2% | | Gross profit | 804,363 | 731,906 | +9.9% | | Operating profit | 495,838 | 428,392 | +15.7% | | Profit before tax | 429,660 | 343,006 | +25.2% | | Profit for the period attributable to owners of the Company | 376,692 | 327,465 | +15.0% | | Earnings per share (RMB) | 0.18 | 0.15 | +20.0% | Unaudited Condensed Consolidated Statement of Comprehensive Income For the six months ended June 30, 2025, profit attributable to owners of the Company increased, but total comprehensive income for the period decreased due to negative impacts from exchange differences Key Data from Condensed Consolidated Statement of Comprehensive Income | Indicator | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | | Profit for the period attributable to owners of the Company | 376,692 | 327,465 | | Other comprehensive loss for the period, net of tax | (73,495) | (4,151) | | Total comprehensive income for the period attributable to owners of the Company | 303,197 | 323,314 | - Exchange differences on translation of foreign operations expanded from a loss of RMB 5.134 million in H1 2024 to a loss of RMB 71.637 million in H1 2025[5] Unaudited Condensed Consolidated Statement of Financial Position As of June 30, 2025, total assets slightly decreased, but net current liabilities significantly improved, with both net assets and total equity increasing Key Data from Condensed Consolidated Statement of Financial Position | Indicator | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Non-current assets | 12,095,217 | 12,309,993 | -1.7% | | Current assets | 16,290,593 | 15,904,789 | +2.4% | | Current liabilities | 16,781,440 | 16,727,542 | +0.3% | | Net current liabilities | (490,847) | (822,753) | +40.4% (improvement) | | Net assets | 11,291,394 | 10,989,593 | +2.7% | | Total equity | 11,291,394 | 10,989,593 | +2.7% | Notes to the Unaudited Condensed Consolidated Financial Statements This section details the basis of preparation, accounting policies, going concern assumption, adoption of new accounting standards, revenue and segment information, income and expense breakdowns, taxation, dividends, earnings per share, significant investments, inventories, trade and other receivables/payables, bank deposits, cash and cash equivalents, bank borrowings, and share capital changes 1. Basis of Preparation The interim financial statements are prepared in accordance with HKAS 34 and the Listing Rules, on a historical cost basis, and presented in RMB. Management believes the Group can continue as a going concern based on future cash flows and credit commitments - The financial statements are prepared on a historical cost basis, presented in RMB, and have been reviewed by the Company's audit committee[3][8] - As of June 30, 2025, the Group recorded net current liabilities of approximately RMB 490.847 million, but the Board believes the Group has sufficient working capital for continuous operation in the next 12 months[10] - The adoption of HKAS 21 (Amendment) 'Lack of Exchangeability' had no significant impact on the consolidated financial statements[12] 2. Revenue and Segment Information The Group primarily manufactures and sells polyester filament yarn, polyester products, polyester industrial yarn, and ES fiber products, operating as a single reportable segment, with revenue disaggregated by major product categories and customer geographical locations - The Group's main products include polyester filament yarn, polyester products (BOPET film, polyester chips, etc.), polyester industrial yarn, and ES fiber products[13][14] Revenue by Major Product Category | Product Category | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Polyester filament yarn products | 3,399,973 | 4,502,961 | -24.5% | | Polyester products* | 5,054,138 | 5,227,993 | -3.3% | | Polyester industrial yarn products | 968,958 | 828,618 | +16.9% | | ES fiber products | 61,638 | 60,361 | +2.1% | | Total Revenue | 9,484,707 | 10,619,933 | -10.7% | Revenue by Customer Geographical Location | Customer Region | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | | People's Republic of China ("China") | 6,349,491 | 7,374,624 | | Vietnam | 497,198 | 542,367 | | Others | 2,638,018 | 2,702,942 | - The Group has a diversified customer base, with no single customer accounting for more than 10% of total revenue[15] Geographical Location of Specific Non-current Assets | Geographical Location | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | China | 9,690,812 | 9,749,612 | | Vietnam | 2,329,357 | 2,484,071 | | Hong Kong | 39,228 | 40,490 | 3. Other Income Other income decreased by 37.1% year-on-year for the six months ended June 30, 2025, primarily due to a reduction in government grants Breakdown of Other Income | Income Source | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Bank interest income | 90,472 | 95,084 | -4.8% | | Government grants | 32,667 | 115,205 | -71.6% | | Sales of raw materials | 18,428 | 16,952 | +8.7% | | Dividend income | 1,378 | – | N/A | | Others | 70 | 24 | +191.7% | | Total | 143,015 | 227,265 | -37.1% | 4. Other Gains and (Losses), Net Other net losses significantly decreased by 89.6% for the six months ended June 30, 2025, mainly due to improved net exchange gains Breakdown of Other Gains and (Losses), Net | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Net exchange gains (losses) | 9,729 | (51,958) | N/A (from loss to gain) | | Net fair value gains on financial instruments at FVTPL (unrealised) | 862 | 12,511 | -93.1% | | Net fair value gains (losses) on financial instruments at FVTPL (realised) | (16,681) | 3,432 | N/A (from gain to loss) | | Total | (3,493) | (33,469) | -89.6% | 5. Profit Before Tax Profit before tax was primarily affected by finance costs, staff costs, and other operating items, with finance costs decreasing by 22.5% year-on-year, and changes in staff and R&D costs 5. (a) Finance Costs Finance costs decreased by 22.5% year-on-year, mainly due to a reduction in other interest expenses Breakdown of Finance Costs | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Interest on bank borrowings | 28,245 | 14,439 | +95.6% | | Other interest expenses | 38,245 | 71,119 | -46.2% | | Total Finance Costs | 66,178 | 85,386 | -22.5% | - The annual interest rate for capitalised borrowing costs decreased from 2.44% in H1 2024 to 2.24% in H1 2025[25] 5. (b) Staff Costs Staff costs, including directors' emoluments, slightly increased year-on-year, primarily due to higher salaries, wages, allowances, and other benefits Breakdown of Staff Costs | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Salaries, wages, allowances and other benefits | 259,583 | 242,496 | +7.0% | | Contributions to defined contribution retirement plans | 12,406 | 10,178 | +21.9% | | Total | 271,989 | 252,674 | +7.6% | 5. (c) Other Items Other items include cost of inventories, depreciation, and research and development costs, with both inventory and R&D costs decreasing Breakdown of Other Items | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Cost of inventories | 8,680,344 | 9,888,027 | -12.2% | | Depreciation (property, plant and equipment) | 403,815 | 405,373 | -0.4% | | Depreciation (right-of-use assets) | 27,723 | 14,951 | +85.4% | | Research and development costs | 239,631 | 260,632 | -8.0% | 6. Income Tax Expense Income tax expense significantly increased by 240.8% year-on-year for the six months ended June 30, 2025, mainly due to higher PRC and Vietnam corporate income tax Breakdown of Income Tax Expense | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | PRC corporate income tax (current) | 46,343 | 8,377 | +453.2% | | Vietnam corporate income tax (current) | 2,467 | – | N/A | | Withholding tax on dividends | 1,002 | 500 | +100.4% | | Deferred tax | 6,423 | 6,664 | -3.7% | | Total | 52,968 | 15,541 | +240.8% | - Baihong Fujian and Baihong Gaoxin, as high-tech enterprises, enjoy a reduced PRC corporate income tax rate of 15%[27] - Baihong Vietnam enjoys Vietnam corporate income tax exemptions and reductions, with a two-year tax exemption from 2024 for its fully drawn yarn and drawn textured yarn products, followed by an eight-year 50% reduction[29][30] 7. Dividends The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025 and 2024 - The Board does not recommend the payment of an interim dividend for H1 2025[31] 8. Earnings Per Share Basic earnings per share for the six months ended June 30, 2025, was RMB 0.18, higher than RMB 0.15 in the prior year, with diluted earnings per share being the same as basic due to no potential dilutive ordinary shares Earnings Per Share Calculation Data | Indicator | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Profit for the period attributable to owners of the Company for basic EPS calculation (RMB thousand) | 376,692 | 327,465 | | Weighted average number of ordinary shares | 2,115,506,398 | 2,118,447,000 | | Basic and Diluted EPS (RMB) | 0.18 | 0.15 | 9. Equity Investments – Designated at Fair Value Through Other Comprehensive Income The Group holds a 1.56% equity interest in a local bank, designated as an equity investment at fair value through other comprehensive income, and received dividend income in H1 2025 - The Group holds a 1.56% equity interest in a local bank in Jinjiang, Quanzhou, Fujian Province, China, with an investment of approximately RMB 35.82 million[33] - In H1 2025, this investment generated dividend income of approximately RMB 1.378 million[33] 10. Inventories As of June 30, 2025, total inventories increased compared to the end of 2024, primarily due to growth in raw materials and finished goods stock Breakdown of Inventories | Inventory Category | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Raw materials | 838,193 | 683,839 | +22.6% | | Work in progress | 216,077 | 205,813 | +5.0% | | Finished goods | 4,691,940 | 4,425,086 | +6.0% | | Total | 5,746,210 | 5,314,738 | +8.1% | 11. Trade and Other Receivables As of June 30, 2025, total trade and other receivables slightly increased, with trade receivables and bills receivable decreasing, but deposits, prepayments, and other receivables significantly growing Breakdown of Trade and Other Receivables | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Trade receivables (net of loss allowance) | 663,526 | 1,127,178 | -41.1% | | Bills receivable | 89,955 | 69,549 | +29.3% | | Deposits, prepayments and other receivables | 3,866,457 | 3,201,994 | +20.7% | | Total | 4,372,484 | 4,257,385 | +2.7% | - As of June 30, 2025, discounted bank acceptance bills of approximately RMB 3.731 billion and endorsed bank acceptance bills of approximately RMB 102 million were derecognised as financial assets[36] Ageing Analysis of Trade Receivables and Bills Receivable | Ageing | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within 1 month | 733,274 | 1,140,691 | | 1 to 2 months | 2,417 | 48,170 | | 2 to 3 months | 12,202 | 7,586 | | Over 3 months | 5,588 | 280 | | Total | 753,481 | 1,196,727 | 12. Restricted Bank Deposits As of June 30, 2025, total restricted bank deposits amounted to RMB 5.012 billion, primarily pledged for bank borrowings and bills payable Purpose of Restricted Bank Deposits | Purpose | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Pledged for bank borrowings | 223,581 | 221,120 | | Pledged for bills payable | 4,788,549 | 5,868,227 | | Total | 5,012,130 | 6,089,347 | 13. Cash and Cash Equivalents As of June 30, 2025, bank balances and cash significantly increased by 404.6% Cash and Cash Equivalents | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Bank balances and cash | 1,148,198 | 227,528 | +404.6% | 14. Trade and Other Payables As of June 30, 2025, total trade and other payables significantly decreased, mainly due to reductions in bills payable and trade payables Breakdown of Trade and Other Payables | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Trade payables | 1,475,743 | 1,776,654 | -16.9% | | Bills payable | 10,041,349 | 13,478,598 | -25.5% | | Other payables and accrued expenses | 213,358 | 218,456 | -2.3% | | Total | 12,076,422 | 15,810,267 | -23.6% | - The Group generally obtains credit terms of 60 to 180 days from suppliers[42] Ageing Analysis of Trade Payables and Bills Payable | Ageing | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within 3 months | 6,869,987 | 7,502,733 | | Over 3 months but within 6 months | 1,603,013 | 4,693,857 | | 6 months to 1 year | 3,037,042 | 3,032,934 | | Over 1 year | 7,050 | 25,728 | | Total | 11,517,092 | 15,255,252 | 15. Bank Borrowings As of June 30, 2025, total bank borrowings significantly increased, with most repayable within one year and secured by restricted bank deposits, buildings, and corporate guarantees Bank Borrowings Repayment Schedule | Repayment Period | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Within 1 year or on demand | 3,647,077 | 501,852 | +626.8% | | After 1 year but within 2 years | 91,336 | 281,952 | -67.6% | | Total | 3,738,413 | 783,804 | +377.0% | - Bank borrowings are jointly secured by restricted bank deposits (approximately RMB 223.581 million), self-occupied buildings (approximately RMB 39.228 million), and corporate guarantees provided by Baihong Fujian and Baihong Gaoxin (approximately RMB 2.69 billion)[43] Effective Interest Rate Range for Bank Borrowings | Bank Borrowing Type | June 30, 2025 (%) | December 31, 2024 (%) | | :--- | :--- | :--- | | Fixed-rate bank borrowings | 2.00 – 4.00 | 2.00 – 2.80 | | Variable-rate bank borrowings | 5.35 | 5.98 | 16. Share Capital As of June 30, 2025, the Company's issued share capital slightly decreased due to share repurchases and cancellations Authorised and Issued Share Capital | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Number of issued ordinary shares | 2,115,328,000 | 2,115,676,000 | | Nominal value of issued ordinary shares (RMB) | 17,788,692 | 17,791,619 | - For the six months ended June 30, 2025, the Company repurchased a total of 1,184,000 shares on the Stock Exchange, of which 224,000 shares were cancelled, and 960,000 shares were cancelled after the reporting period[46][106] 17. Capital Commitments As of June 30, 2025, the Group's capital commitments significantly increased, primarily for domestic capacity expansion and development of Vietnam production operations Breakdown of Capital Commitments | Capital Commitment Category | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Authorised but not contracted for | 2,395,730 | – | N/A | | Contracted for | 1,062,692 | 623,224 | +70.5% | | Total | 3,458,422 | 623,224 | +454.9% | Management Discussion and Analysis This section covers the macroeconomic environment, industry review, Group's operating strategies, detailed financial performance analysis, future business outlook, and corporate governance Changes in Macroeconomic Environment Despite global economic challenges from the pandemic, geopolitical conflicts, and interest rate hikes, the global economy shows signs of recovery with the fading of the pandemic and implementation of stimulus policies, and China's economy is expected to expand steadily - The global economy is affected by the pandemic, Russia-Ukraine/Israel-Palestine conflicts, global interest rate hikes, and China-US relations, but is showing signs of recovery with the passing of the pandemic and stimulus policies[49] - The long-term positive fundamentals of China's economy remain unchanged, with macroeconomic policies focusing more on stable growth to stimulate consumption[49] Industry Review The textile and apparel industry faces complex external challenges and domestic structural issues, but China's long-term positive macroeconomic outlook and supportive national policies will help the industry alleviate operational pressure and achieve stable progress - The textile and apparel industry faces complex external challenges and domestic structural issues, but China's long-term positive macroeconomic outlook and policies will help the industry achieve stable growth[50] - Exports of textile machinery and chemical fibers with higher technological content and added value in China's textile industry are on an upward trend, and trade frictions may accelerate industry adjustments[50] The Group's Operating Strategies and Development The Group aims to be a premium supplier of raw materials for consumer goods globally, enhancing product value and market competitiveness through technological innovation, intelligent manufacturing, talent development, and market expansion, while actively developing new product lines and overseas markets - The Group aims for "technological innovation to enhance corporate competitiveness," pursuing a path of integrated "production, education, research, and application" to develop new products and increase product added value[51] - As a national "high-tech enterprise," the Group has pioneered fully intelligent and automated production, enhancing product quality and risk resistance through intelligent transformation[51] - The ES fiber project commenced production in June 2020, targeting high-end customers with customized products, and has broad future demand and application prospects[52][53] - The G-zone project for 255,000 tons/year of functional environmentally friendly polyester film commenced production in December 2020, using internationally advanced processes and targeting high-end domestic and international markets, doubling the Group's polyester film capacity[54] - The Group's new polyester chip production facility (300,000 tons/year) in Vietnam gradually commenced commercial production in July 2023; the polyester film production line (additional polymerization capacity of 400,000 tons/year) commenced commercial production in November 2023[55] - The polyester industrial yarn business commenced production in July 2022, with a total capacity of approximately 250,000 tons/year, positioning the Group among China's top ten polyester industrial yarn producers[56] - The Group plans to invest approximately RMB 2.396 billion from 2025-2027 to expand its nylon business, expecting an additional capacity of 120,000 tons/year, with commercial production gradually commencing from 2026[57] - The Group signed a 5G new technology strategic cooperation agreement with China Mobile, deploying a 5G intelligent factory to alleviate labor costs and improve production efficiency[57] - Phase I of the Group's "700,000 tons differentiated chemical fiber project" in Vietnam, comprising two projects, has been completed and commenced production, aiming to build a demonstration platform for China-Vietnam capacity cooperation[58] - Baihong Fujian and Baihong Gaoxin, the Group's main subsidiaries, are qualified as high-tech enterprises, with differentiated product revenue and R&D expenses accounting for 54.1% and 2.5% of total revenue, respectively[59] Financial Review This section provides a detailed review of the Group's operating performance during the reporting period, including changes and reasons for key financial indicators such as revenue, cost of sales, gross profit, other income and expenses, income tax, and profit for the period 1. Revenue For the six months ended June 30, 2025, the Group's total revenue decreased by 10.7% year-on-year, mainly due to lower revenue from polyester filament yarn and polyester products, though polyester product sales volume grew and overseas sales proportion increased Revenue and Proportion by Product Category | Product Category | H1 2025 Revenue (RMB thousand) | Proportion | H1 2024 Revenue (RMB thousand) | Proportion | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Polyester filament yarn | 3,399,973 | 35.9% | 4,502,961 | 42.4% | -24.5% | | Polyester products | 5,054,138 | 53.3% | 5,227,993 | 49.2% | -3.3% | | ES fiber | 61,638 | 0.6% | 60,361 | 0.6% | +2.1% | | Polyester industrial yarn | 968,958 | 10.2% | 828,618 | 7.8% | +16.9% | | Total | 9,484,707 | 100.0% | 10,619,933 | 100.0% | -10.7% | - The average selling price per ton of polyester filament yarn decreased by 6.7% year-on-year, and polyester products by 9.2% year-on-year[61][63] - Sales volume of polyester products increased from 773,671 tons in H1 2024 to 824,171 tons in H1 2025, a 6.5% increase[63] Revenue and Proportion by Sales Region | Sales Region | H1 2025 Revenue (RMB thousand) | Proportion | H1 2024 Revenue (RMB thousand) | Proportion | | :--- | :--- | :--- | :--- | :--- | | Domestic sales (Total) | 6,349,491 | 67.0% | 7,374,624 | 69.5% | | Fujian Province | 3,736,139 | 39.4% | 4,658,977 | 43.9% | | Guangdong Province | 1,315,230 | 13.9% | 1,369,345 | 12.9% | | Other provinces | 1,298,122 | 13.7% | 1,346,302 | 12.7% | | Overseas sales (Total) | 3,135,216 | 33.0% | 3,245,309 | 30.5% | | Vietnam | 497,198 | 5.2% | 542,367 | 5.1% | | Other overseas | 2,638,018 | 27.8% | 2,702,942 | 25.4% | 2. Cost of Sales For the six months ended June 30, 2025, cost of sales decreased by 12.2% year-on-year, primarily due to lower raw material prices for polyester filament yarn and polyester products Cost of Sales and Proportion by Product Category | Product Category | H1 2025 Cost of Sales (RMB thousand) | Proportion | H1 2024 Cost of Sales (RMB thousand) | Proportion | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Polyester filament yarn | 3,030,637 | 34.9% | 4,022,508 | 40.6% | -24.6% | | Polyester products | 4,699,418 | 54.1% | 4,999,879 | 50.6% | -6.0% | | ES fiber | 58,116 | 0.7% | 59,304 | 0.6% | -2.0% | | Polyester industrial yarn | 892,173 | 10.3% | 806,336 | 8.2% | +10.6% | | Total | 8,680,344 | 100.0% | 9,888,027 | 100.0% | -12.2% | - The average cost of sales per ton for polyester filament yarn decreased by 6.9%, with raw material prices decreasing by 9.6%. The average cost of sales per ton for polyester products decreased by 11.8%, with raw material prices decreasing by 13.3%[70][71] - PTA and MEG account for 69.7% of the total cost of sales for polyester filament yarn, with their prices influenced by crude oil prices[70] 3. Gross Profit For the six months ended June 30, 2025, gross profit increased by 9.9% year-on-year, and gross profit margin rose from 6.9% to 8.5%, mainly because the decrease in average cost per ton was greater than the decrease in average selling price Gross Profit and Gross Profit Margin Analysis | Indicator | H1 2025 | H1 2024 | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Gross profit (RMB thousand) | 804,363 | 731,906 | +9.9% | | Sales volume (tons) | 1,375,133 | 1,400,536 | -1.8% | | Average selling price per ton (RMB) | 6,897 | 7,583 | -9.0% | | Average cost per ton (RMB) | 6,312 | 7,060 | -10.6% | | Average gross profit per ton (RMB) | 585 | 523 | +11.8% | | Gross profit margin | 8.5% | 6.9% | +1.6 percentage points | - Polyester filament yarn gross profit margin increased from 10.7% to 10.9%; polyester products gross profit margin increased from 4.4% to 7.0%; ES fiber gross profit margin increased from 1.8% to 5.7%; polyester industrial yarn gross profit margin increased from 2.7% to 7.9%[76][77][81] - Despite facing loss of foreign trade orders and intensified international competition, the Group maintained steady growth in sales volume and revenue by expanding markets and production scale[78] 4. Other Income Other income decreased by 37.1% year-on-year, primarily due to a reduction in government grants Other Income | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Other income | 143,015 | 227,265 | -37.1% | 5. Other Gains and Losses, Net Other net losses significantly decreased by 89.6% year-on-year, mainly due to a reduction in net exchange losses Other Gains and Losses, Net | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Other net losses | (3,493) | (33,469) | -89.6% | 6. Selling and Distribution Expenses Selling and distribution expenses decreased by 16.2% year-on-year, primarily due to lower transportation costs resulting from reduced sales in provinces outside Fujian and overseas sales Selling and Distribution Expenses | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Selling and distribution expenses | 126,009 | 150,282 | -16.2% | 7. Administrative Expenses Administrative expenses decreased by 7.2% year-on-year, primarily due to reduced research and development expenses Administrative Expenses | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Administrative expenses | 322,038 | 347,028 | -7.2% | 8. Finance Costs Finance costs decreased by 22.5% year-on-year, primarily due to a reduction in other interest expenses Finance Costs | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Finance costs | 66,178 | 85,386 | -22.5% | 9. Income Tax Income tax expense significantly increased by 240.8% year-on-year Income Tax | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Income tax | 52,968 | 15,541 | +240.8% | 10. Profit for the Period Profit for the period increased by 15.0% year-on-year, primarily due to reduced expenses compared to the prior year Profit for the Period | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Profit for the period | 376,692 | 327,465 | +15.0% | Financial Position This section analyzes the Group's liquidity, capital resources, inventory and trade receivables/payables turnover days, capital commitments, total liabilities, capital and reserves, and bank borrowings 1. Liquidity and Capital Resources As of June 30, 2025, cash and cash equivalents significantly increased by 404.6%. Net cash outflow from operating activities was substantial, but net cash inflow from financing activities covered part of the demand. Inventory turnover days increased, trade receivables turnover days decreased, and trade payables turnover days significantly decreased Cash and Cash Equivalents | Indicator | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Cash and cash equivalents | 1,148,198 | 227,528 | +404.6% | - Net cash outflow from operating activities was RMB 2.925 billion, net cash inflow from investing activities was RMB 949 million, and net cash inflow from financing activities was RMB 2.895 billion[89] Turnover Days | Turnover Days | H1 2025 (days) | H1 2024 (days) | Change (days) | | :--- | :--- | :--- | :--- | | Inventory turnover days | 116.3 | 84.8 | +31.5 | | Trade receivables turnover days | 18.8 | 21.0 | -2.2 | | Trade payables turnover days | 196.7 | 369.8 | -173.1 | - As of June 30, 2025, capital commitments amounted to RMB 3.458 billion, primarily for domestic capacity expansion and Vietnam production operations[90] Financial Ratios | Financial Ratio | June 30, 2025 | | :--- | :--- | | Gearing ratio | 151.4% | | Debt-to-asset ratio | 1.66 times | - Total bank borrowings amounted to RMB 3.738 billion, of which RMB 3.647 billion is repayable within one year, secured by properties and restricted bank deposits[91] Significant Investments Held, Material Acquisitions and Disposals of Subsidiaries, and Plans for Material Investments or Purchases of Capital Assets in the Future Except for disclosed information, the Group had no other significant investments, acquisitions, or disposals during the reporting period. Future plans primarily focus on domestic capacity expansion and Vietnam production operations, funded by internally generated funds and bank borrowings - The Group's future plans are mainly related to domestic capacity expansion and the development of Vietnam production operations, funded by internally generated funds and bank borrowings[92] Pledge of Assets As of June 30, 2025, the Group had no other pledges of assets apart from those disclosed in the report - As of June 30, 2025, the Group had no other pledges of assets apart from those disclosed in the report[93] Contingent Liabilities As of June 30, 2025, the Group had no contingent liabilities - As of June 30, 2025, the Group had no contingent liabilities[94] Foreign Currency Risk The Group's foreign exchange risk is minimal, with most financial assets and liabilities denominated in functional currencies. Management closely monitors foreign exchange risk and enters into forward foreign exchange contracts when necessary - The Group's foreign exchange risk is minimal, with most financial assets and liabilities denominated in functional currencies[95] - As of June 30, 2025, the Group had significant outstanding foreign currency forward contracts of approximately RMB 98.562 million[97] Employees and Remuneration As of June 30, 2025, the Group had 9,562 employees, with remuneration policies based on job performance, professional experience, and market conditions, and discretionary bonuses provided - As of June 30, 2025, the Group had 9,562 employees[98] - Employee remuneration is determined based on job performance, professional experience, and market conditions, with discretionary bonuses provided[98] Business Outlook The Group anticipates continued global and Chinese economic rebound, with a solid foundation for the textile industry. The Group will continue to achieve stable business growth through technological innovation, new product launches, cost control, overseas market expansion, and capacity expansion, maintaining confidence in its medium to long-term development - The global economy is expected to continue its rebound in 2025, with stable economic development in China stimulating consumption[99] - As the largest polyester filament yarn producer in South China, the Group benefits from the economic cycle and rising crude oil prices, with polyester product prices continuing to improve[99] - The Vietnam polyester filament yarn project has commenced production, polyester industrial yarn production lines have gradually entered commercial production, and new polyester chip production facilities and polyester film production lines have also commenced commercial production, further expanding overseas markets and enhancing capacity[99][100] - The Group plans to invest approximately RMB 2.396 billion to expand its nylon business, expecting an additional capacity of 120,000 tons/year, with commercial production gradually commencing from 2026[101] - Despite short-term impacts from the pandemic, the textile industry has a solid foundation, and the Group remains confident in its medium to long-term business development[100] Corporate Governance and Other Information This section discloses the Company's interim dividend policy, compliance with corporate governance code, board diversity, directors' securities dealing standard code compliance, audit committee composition and responsibilities, and information on share repurchases and report publication Interim Dividend The Board resolved not to declare any interim dividend for the six months ended June 30, 2025 - The Board resolved not to declare an interim dividend for H1 2025[102] Compliance with Corporate Governance Code The Company has complied with the Corporate Governance Code in Appendix C1 of the Listing Rules during the reporting period. With the appointment of Ms. Shi Haiyan, the Board now meets the Listing Rule 13.92 requirement for board diversity - The Company has complied with the Corporate Governance Code set out in Appendix C1 of the Listing Rules during the reporting period[103] - With the appointment of Ms. Shi Haiyan on June 30, 2025, the Board has met the Listing Rule 13.92 requirement for at least one director of a different gender for board diversity[103] Standard Code for Securities Transactions by Directors The Company has adopted the Standard Code set out in Appendix C3 of the Listing Rules and confirmed that directors have complied with it during the reporting period - The Company has adopted the Standard Code for Securities Transactions by Directors set out in Appendix C3 of the Listing Rules and confirmed that directors have complied with it during the reporting period[104] Audit Committee The Audit Committee, comprising three independent non-executive directors, is responsible for reviewing and overseeing the Group's financial reporting process, risk management, and internal control systems, and has reviewed these interim financial statements - The Audit Committee comprises three independent non-executive directors, with Mr. Yu Weiming as Chairman[105] - The Audit Committee's primary responsibilities include reviewing and overseeing the Group's financial reporting process, risk management, and internal control systems, and it has reviewed these interim financial statements[105] Purchases, Sales or Redemptions of Listed Shares For the six months ended June 30, 2025, the Company repurchased a total of 1,184,000 shares, of which 224,000 shares were cancelled, and the remaining 960,000 shares were cancelled after the reporting period Details of Share Repurchases | Month of Repurchase | Number of Shares Repurchased | Total Price Paid (HKD) | | :--- | :--- | :--- | | January | 6,000 | 26,100 | | March | 42,000 | 178,360 | | April | 130,000 | 548,780 | | May | 106,000 | 467,880 | | June | 900,000 | 4,044,860 | | Total | 1,184,000 | 5,265,980 | - For the six months ended June 30, 2025, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any other listed securities of the Company[107] Publication of Interim Results Announcement and Interim Report This interim results announcement has been published on the Company's website and the HKEXnews website, and the interim report will be dispatched to shareholders and available on these websites in due course - This interim results announcement has been published on the Company's website (www.baihong.com) and the HKEXnews website (www.hkexnews.hk)[108](index=108&type=chunk) - The interim report will be dispatched to shareholders in due course and will be available on the aforementioned websites[108]