中国罕王(03788) - 2025 - 中期业绩

Performance Highlights 1. Proposed Spin-off and Separate Listing of Hanking Gold on the Main Board of the Stock Exchange The company proposes to spin off and list Hanking Gold to create an independent capital platform for its gold business[2] - The proposed spin-off and separate listing of Hanking Gold on the Main Board of the Stock Exchange aims to build an independent capital platform for the gold mining business, promoting its development and enhancing shareholder value[2] - Hanking Gold owns the Mt Bundy Gold Project and the Cygnet Gold Project, with plans to become an internationally influential medium-sized gold producer, and the pre-feasibility study for the Cygnet Gold Project is nearing completion[2] 2. Stable Production and Operation with a Slight Decrease in Profit for the Period Stable production and sales volumes were offset by lower selling prices, resulting in higher revenue but a slight profit decline - Production and sales of iron concentrate and high-purity iron were higher than the same period last year and the budget, maintaining stable operations[3] - Influenced by overall market conditions, the average selling price per tonne for products was lower than the same period last year[3] Key Financial Indicators for H1 2025 | Indicator | H1 2025 (RMB'000) | H1 2024 (RMB'000) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 1,405,188 | 1,268,564 | +10.77% | | Profit for the Period | 104,537 | 106,658 | -1.99% | 3. High-Purity Iron Business Turns Profitable The high-purity iron business achieved a turnaround to profitability through enhanced end-to-end process management - The high-purity iron business improved management across the entire process from procurement, production, to sales, achieving a turnaround to profitability in line with strategic goals[4] Pre-tax Profit of High-Purity Iron Business | Indicator | H1 2025 (RMB'000) | H1 2024 (RMB'000) | | :--- | :--- | :--- | | Pre-tax Profit | 14,956 | (35,503) | 4. Newly Added 79.76 Million Tonnes of Resources at Shangma Iron Mine Included in the Mining License The Shangma Iron Mine's license was updated to include 79.76 million tonnes of new resources, elevating it to a large-scale mine - The Shangma Iron Mine obtained an updated mining license, expanding its area and incorporating approximately 79.76 million tonnes of newly added iron ore resources[5] - The Shangma Iron Mine now has a total iron ore resource of approximately 110 million tonnes, reaching the "large-scale iron mine" level and solidifying the foundation for the sustainable development of the Group's iron ore business[5] Financial Summary - In H1 2025, the company's revenue increased by 10.77% YoY, but profit attributable to owners of the Company decreased by 2.93% YoY, with earnings per share at RMB 5.4 cents, and no interim dividend was declared for the period[6] Condensed Consolidated Results Summary for H1 2025 | Indicator | H1 2025 (RMB'000) | H1 2024 (RMB'000) | Change | | :--- | :--- | :--- | :--- | | Revenue | 1,405,188 | 1,268,564 | 10.77% | | Profit for the period attributable to owners of the Company | 104,318 | 107,467 | (2.93%) | | Earnings per share (RMB cents) | 5.4 | 5.6 | (3.57%) | | Interim dividend (HKD per share) | — | 0.02 | N/A | | Net Profit Margin | 7.44% | 8.41% | Decreased by 0.97 p.p. | | Return on Equity | 7.01% | 7.19% | Decreased by 0.18 p.p. | I. Iron Ore Business 1. Industry Overview Iron ore prices fluctuated, falling 9.07% in H1 2025 due to shifting supply-demand dynamics and policy expectations - In H1 2025, iron ore prices rose first and then fell, with the 62% iron ore port cash price index at US$92.39/tonne as of June 30, a decrease of 9.07% from the beginning of the year[7] - Price fluctuations were affected by multiple factors including overseas mine shipments, steel mill profitability, dual increases in supply and demand, inventory accumulation, and policy expectations[7] - Looking ahead to H2 2025, international mine shipments are expected to grow steadily, while domestic crude steel control and seasonal declines in molten iron production may lead to a weaker price trend amid expectations of looser supply and falling demand[7] 2. Operating Performance Increased sales volume was offset by a 15.50% price decline, leading to lower gross profit and margin for the iron ore business - The iron ore business implemented refined management based on a smart mining system, achieving an iron concentrate production of 518,000 tonnes (+1.57% YoY) and sales of 521,000 tonnes (+2.36% YoY)[8] - The cash operating cost per tonne of iron concentrate was RMB 348, an increase of only RMB 9 or 2.65% YoY, and a decrease of RMB 6 or 1.69% compared to the full year of 2024[9] Operating Performance Details of Iron Ore Business | Indicator | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Production & Sales ('000 tonnes) | 518 (Prod), 521 (Sales) | 510 (Prod), 509 (Sales) | 1.57% (Prod), 2.36% (Sales) | | Average Selling Price (RMB/tonne) | 856 | 1,013 | (15.50%) | | Average Cost of Sales (RMB/tonne) | 339 | 375 | (9.60%) | | Revenue (RMB'000) | 447,978 | 515,444 | (13.09%) | | Gross Profit (RMB'000) | 271,398 | 324,607 | (16.39%) | | Gross Profit Margin | 60.58% | 62.98% | Decreased by 2.40 p.p. | Cash Operating Cost Breakdown per Tonne of Iron Concentrate | Cash Operating Cost Component (RMB/tonne of iron concentrate) | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Mining | 174 | 160 | 8.75% | | Beneficiation | 73 | 80 | (8.75%) | | Transportation | 22 | 13 | 69.23% | | Taxes and Fees | 51 | 61 | (16.39%) | | Mine Management Fee | 28 | 25 | 12.00% | | Total | 348 | 339 | 2.65% | 3. Resources and Reserves The company expanded its resource base with a new discovery at Maogong and a significant license upgrade at Shangma Iron Mine - New iron ore resources were discovered within the existing pit of the Maogong Iron Mine, with estimated additional reserves of approximately 3.39 million tonnes, acquired at a low cost, which will extend the mine's life and further enhance economic benefits[12] - The Shangma Iron Mine obtained an updated mining license, expanding its area and incorporating approximately 79.76 million tonnes of newly added iron ore resources, bringing the total resource to about 110 million tonnes, reaching the "large-scale iron mine" level[14] - As of the end of June 2025, there were no material changes in the Group's iron ore resources and reserves compared to the end of 2024[14] II. High-Purity Iron Business 1. Industry Overview China's wind power industry grew rapidly in H1 2025, with favorable policies expected to drive a new installation boom - In H1 2025, China's cumulative installed wind power capacity reached 570 million kW, a 22.7% YoY increase, while new installations grew 98.9% YoY to 51.39 million kW[15] - New wind power installations for the full year of 2025 are projected to be around 100 million kW, with cumulative capacity reaching 640 million kW by year-end[15] - Favorable policies are expected to trigger a new wave of installations from H2 2025 into the next year, likely boosting both demand and prices for wind power components[15] 2. Operating Performance The high-purity iron business achieved a profit turnaround by increasing sales volume and significantly reducing costs - The high-purity iron business turned profitable in H1 2025, recording a pre-tax profit of RMB 14,956 thousand (compared to a pre-tax loss of RMB 35,503 thousand in H1 2024)[16] - Production and sales of high-purity iron reached 471,000 tonnes (+15.44% YoY) and 473,000 tonnes (+21.59% YoY) respectively, with wind power ductile iron accounting for about 93% of total sales[16] - By actively exploring new alternative suppliers and adjusting raw material ratios, the average cost of sales was reduced to RMB 2,494/tonne, a decrease of 18.26% YoY[16] Operating Performance Details of High-Purity Iron Business | Indicator | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Production & Sales ('000 tonnes) | 471 (Prod), 473 (Sales) | 408 (Prod), 389 (Sales) | 15.44% (Prod), 21.59% (Sales) | | Average Selling Price (RMB/tonne) | 2,685 | 3,131 | (14.24%) | | Average Cost of Sales (RMB/tonne) | 2,494 | 3,051 | (18.26%) | | Revenue (RMB'000) | 1,272,118 | 1,216,935 | 4.53% | | Gross Profit (RMB'000) | 92,792 | 30,865 | 200.64% | | Gross Profit Margin | 7.29% | 2.54% | Increased by 4.75 p.p. | III. Australian Gold Mining Business 1. Industry Overview International gold prices surged in H1 2025 amid heightened safe-haven demand, with central banks expected to continue buying - In H1 2025, international gold prices rose sharply, with the London spot gold fixing price reaching US$3,287.45/ounce by June 30, an increase of 24.31% from the beginning of the year[19] - A World Gold Council survey shows that about 95% of central banks expect to continue increasing gold holdings in the next 12 months, and nearly 43% plan to increase their own reserves, providing long-term support for gold prices[19] 2. Operating Performance The company proposes to spin off and list its Australian gold business, which is advancing two major projects - The company proposes to spin off Hanking Gold for a separate listing on the Main Board of the Stock Exchange by way of introduction to create an independent capital platform for its gold mining business[20] - The Mt Bundy Gold Project has JORC-compliant resources of approximately 3.01 million ounces of gold and reserves of 1.64 million ounces, with final feasibility studies completed and key approvals obtained[21] - The previous share sale agreement for the Mt Bundy Gold Project was terminated as the buyer failed to satisfy certain conditions precedent[21] - The Cygnet Gold Project has JORC-compliant resources of approximately 2.06 million ounces of gold, with construction planned to start in Q2 2026 and commissioning by the end of 2027[22] Capital Expenditure of Gold Mining Business | Indicator | H1 2025 (RMB'000) | H1 2024 (RMB'000) | | :--- | :--- | :--- | | Capital Expenditure of Gold Mining Business | 66,021 | 16,318 | 3. Resources and Reserves The Group's total gold resources increased to 5.07 million ounces following a resource update at the Cygnet project in July 2025 - As of the end of June 2025, there were no material changes in the Group's gold resources and reserves compared to the end of 2024[23] - On July 22, 2025, the resource of the Cygnet Gold Project increased by 20% to 2.06 million ounces, bringing the Group's total gold resources to 5.07 million ounces[23] Future Plans for Major Investments or Capital Assets - As of June 30, 2025, other than those disclosed, the Group had no concrete plans for any material investments or acquisitions of capital assets[24] - The Group will actively explore investment opportunities in response to market changes to broaden its revenue base and enhance future financial performance and profitability[24] Financial Review 1. Revenue, Cost of Sales, and Gross Profit Group revenue grew 10.77% YoY driven by higher sales volumes, but gross profit margin declined to 25.67% - The Group's revenue for H1 2025 was RMB 1,405,188 thousand, an increase of 10.77% YoY, primarily due to increased sales volumes of high-purity iron and iron concentrate[25] Overview of Revenue, Cost of Sales, and Gross Profit | Indicator | H1 2025 (RMB'000) | H1 2024 (RMB'000) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 1,405,188 | 1,268,564 | +10.77% | | Cost of Sales | 1,044,411 | 921,590 | +13.33% | | Gross Profit | 360,777 | 346,974 | +3.98% | | Gross Profit Margin | 25.67% | 27.35% | Decreased by 1.68 p.p. | Revenue by Major Product | Product | H1 2025 Revenue (RMB'000) | H1 2024 Revenue (RMB'000) | | :--- | :--- | :--- | | Iron concentrate | 131,957 | 52,603 | | High-purity iron | 1,269,405 | 1,196,518 | | Others | 3,826 | 19,443 | | Total | 1,405,188 | 1,268,564 | 2. Other Income, Other Expenses, Other Gains and Losses, and Expected Credit Losses Other gains and losses shifted from a loss to a gain, primarily due to the absence of an impairment loss on an associate - The significant improvement in other gains and losses was mainly because the Group recognized an impairment of RMB 5,976 thousand on its interest in an associate company during the same period last year[28] Overview of Other Income, Expenses, Gains/Losses, and ECL | Indicator | H1 2025 (RMB'000) | H1 2024 (RMB'000) | YoY Change | | :--- | :--- | :--- | :--- | | Other income | 5,077 | 5,587 | -9.13% | | Other expenses | 409 | 200 | +104.5% | | Other gains or losses | 5,242 (gain) | (3,348) (loss) | +256.57% | | Impairment losses under ECL model | (5,964) | 5,442 (reversal) | +209.59% | 3. Distribution and Selling Expenses, Administrative Expenses Distribution and selling expenses rose by 24.43% due to increased sales volumes, while administrative expenses remained stable - The increase in distribution and selling expenses was mainly due to the increased sales volume of high-purity iron (84,000 tonnes) and iron concentrate (12,000 tonnes)[29] Overview of Distribution, Selling, and Administrative Expenses | Indicator | H1 2025 (RMB'000) | H1 2024 (RMB'000) | YoY Change | | :--- | :--- | :--- | :--- | | Distribution and selling expenses | 50,701 | 40,747 | +24.43% | | Administrative expenses | 101,450 | 101,101 | +0.35% | 4. Finance Costs, Income Tax Expense Finance costs and income tax expense both saw modest increases during the period - The increase in finance costs for the period was mainly due to higher interest expenses resulting from increased borrowings[30] Overview of Finance Costs and Income Tax Expense | Indicator | H1 2025 (RMB'000) | H1 2024 (RMB'000) | YoY Change | | :--- | :--- | :--- | :--- | | Finance costs | 37,154 | 35,892 | +3.52% | | Income tax expense | 70,424 | 67,394 | +4.50% | 5. Profit and Total Comprehensive Income for the Period Profit for the period slightly decreased, while total comprehensive income grew significantly due to foreign currency translation effects - The increase in total comprehensive income was mainly influenced by factors such as foreign currency translation[31] Overview of Profit and Total Comprehensive Income | Indicator | H1 2025 (RMB'000) | H1 2024 (RMB'000) | YoY Change | | :--- | :--- | :--- | :--- | | Profit for the period | 104,537 | 106,658 | -1.99% | | Total comprehensive income for the period | 127,974 | 97,790 | +30.87% | 6. Property, Plant and Equipment, Inventories, and Intangible Assets Intangible assets increased significantly due to the reversal of assets held for sale and additional exploration expenditures - The decrease in inventories was mainly due to the combined effect of lower per-tonne costs and reduced inventory levels in the high-purity iron business[32] - The increase in intangible assets was primarily due to the reversal of assets previously reclassified as held for sale following the cancellation of the Primary Gold Pty Ltd disposal, as well as expenditures on mining rights, exploration, and feasibility studies for iron and gold mines during the period[32] Overview of Key Asset Changes | Indicator | 30 June 2025 (RMB'000) | 31 Dec 2024 (RMB'000) | Change | | :--- | :--- | :--- | :--- | | Net value of property, plant and equipment | 617,818 | 654,085 | -5.54% | | Inventories | 183,419 | 261,314 | -29.81% | | Intangible assets | 647,570 | 279,655 | +131.56% | 7. Trade and Other Receivables, Trade and Other Payables Trade receivables and bills receivable increased significantly, while trade and other payables decreased - The increase in trade receivables was mainly due to an increase in trade receivables from the high-purity iron segment[33] - The increase in bills receivable was mainly due to receiving more bills that have not yet been discounted or endorsed[33] Overview of Receivables Changes | Indicator | 30 June 2025 (RMB'000) | 31 Dec 2024 (RMB'000) | Change | | :--- | :--- | :--- | :--- | | Trade receivables | 271,546 | 156,299 | +73.73% | | Other receivables | 67,680 | 66,332 | +2.03% | | Bills receivable | 463,204 | 286,076 | +61.92% | Overview of Payables Changes | Indicator | 30 June 2025 (RMB'000) | 31 Dec 2024 (RMB'000) | Change | | :--- | :--- | :--- | :--- | | Trade payables | 184,925 | 195,391 | -5.36% | | Other payables | 112,109 | 129,160 | -13.20% | 8. Summary of Cash Flow Statement The Group experienced a net cash outflow from operating activities, driven by changes in working capital and tax payments - Net cash outflow from operating activities was primarily due to profit before tax plus depreciation, amortization, and finance costs being offset by net changes in working capital and income tax paid[35] - Net cash outflow from investing activities mainly included payments for new plant and equipment to expand capacity and for technological upgrades, purchase of intangible assets, and net placement of pledged deposits for loans and bills[36] - Net cash inflow from financing activities was mainly from new bank loans, proceeds from discounting bills not fully derecognized, and proceeds from factoring trade receivables with full recourse to non-bank financial institutions[37] Condensed Consolidated Cash Flow Statement Summary | Indicator | H1 2025 (RMB'000) | H1 2024 (RMB'000) | | :--- | :--- | :--- | | Net cash flow from operating activities | (126,045) | 98,608 | | Net cash flow from investing activities | (342,580) | 10,146 | | Net cash flow from financing activities | 559,290 | (35,239) | | Net increase in cash and cash equivalents | 90,665 | 73,515 | | Cash and cash equivalents at end of period | 449,873 | 344,440 | 9. Cash and Borrowings The Group's available cash and acceptance bills increased by 58.63%, while net borrowings and bills payable rose by 16.51% Available Cash and Acceptance Bills | Indicator | 30 June 2025 (RMB'000) | 31 Dec 2024 (RMB'000) | Change | | :--- | :--- | :--- | :--- | | Available cash and acceptance bills | 596,234 | 375,854 | +58.63% | | Cash and bank balances | 449,873 | 358,128 | +25.62% | | Acceptance bills (undiscounted and unendorsed) | 146,361 | 17,726 | +725.69% | Net Borrowings and Bills Payable | Indicator | 30 June 2025 (RMB'000) | 31 Dec 2024 (RMB'000) | Change | | :--- | :--- | :--- | :--- | | Borrowings - due within one year | 1,041,347 | 895,857 | +16.24% | | Borrowings - due after one year | 58,000 | — | N/A | | Bills payable | 884,657 | 594,578 | +48.79% | | Net borrowings and bills payable | 941,491 | 808,091 | +16.51% | 10. Gearing Ratio The Group's gearing ratios saw a slight increase as of June 30, 2025 Gearing Ratio Overview | Indicator | 30 June 2025 | 31 Dec 2024 | Change | | :--- | :--- | :--- | :--- | | Liabilities to total assets ratio | 62.03% | 59.87% | Increased by 2.16 p.p. | | Net gearing ratio | 31.94% | 31.21% | Increased by 0.73 p.p. | 11. Principal Risks The Group faces risks from commodity price volatility, national policy changes, interest rate fluctuations, and foreign currency movements - Commodity price risk: The Group's product prices are affected by international and domestic market prices and global supply and demand, which could materially impact revenue and consolidated income[42] - National policy risk: The Group has assets in China and Australia, and policy changes in these countries could have a significant impact on its operations[42] - Interest rate risk: The Group's fair value interest rate risk is mainly related to bank borrowings, which management will continuously monitor and consider hedging[42] - Foreign currency risk: The non-free convertibility of RMB and the impact of exchange rate fluctuations on AUD assets pose risks, which management will monitor and consider hedging[43] 12. Pledge of Assets, Contingent Liabilities Certain Group assets are pledged as security for bank borrowings and bills payable, with no significant contingent liabilities - Certain of the Group's bank borrowings and bills payable are secured by bank deposits, property, plant and equipment, mining rights, and right-of-use assets[44] - As at 30 June 2025, the Group had no significant contingent liabilities[45] Net Book Value of Pledged Assets | Pledged Asset Type | Net Book Value (RMB'000) | | :--- | :--- | | Bank deposits | 813,713 | | Acceptance bills | 171,800 | | Trade receivables | 55,729 | | Property, plant and equipment | 59,901 | | Mining rights | 54,544 | | Right-of-use assets | 13,245 | 13. Capital Commitments Capital commitments decreased significantly, mainly comprising minor engineering expenditures for the iron ore and high-purity iron businesses - Capital commitments are mainly for miscellaneous engineering expenditures for the iron ore and high-purity iron businesses[46] Capital Commitments Overview | Indicator | 30 June 2025 (RMB'000) | 31 Dec 2024 (RMB'000) | Change | | :--- | :--- | :--- | :--- | | Capital commitments | 3,277 | 41,544 | -92.11% | 14. Capital Expenditure Capital expenditure increased by 26.34% YoY, primarily driven by spending on intangible assets - Expenditures in H1 2025 mainly included RMB 8,632 thousand for plant, machinery, and equipment; RMB 66,217 thousand for intangible assets; and RMB 4,163 thousand for additions to right-of-use assets[47] Capital Expenditure Overview | Indicator | H1 2025 (RMB'000) | H1 2024 (RMB'000) | YoY Change | | :--- | :--- | :--- | :--- | | Capital expenditure | 79,012 | 62,541 | +26.34% | 15. Material Investments Held As of June 30, 2025, the Group did not hold any material investments - As of 30 June 2025, the Group did not hold any material investments[48] 16. Material Acquisitions and Disposals of Subsidiaries, Associates and Joint Ventures The Group had no material acquisitions or disposals of subsidiaries, associates, or joint ventures in H1 2025 - The Group had no material acquisitions or disposals of subsidiaries, associates and joint ventures during the first half of 2025[49] 17. Material Subsequent Events No other material events occurred after the reporting period, apart from the proposed spin-off and listing of the gold mining business - Other than the proposed spin-off and listing of the Group's gold mining business as disclosed on page 9 of this announcement, no other material events have occurred after the six months ended 30 June 2025[50] 18. Material Changes There have been no material changes in the Group's future business development since the 2024 annual report - Other than the proposed spin-off and listing of the Group's gold mining business as disclosed on page 9 of this announcement, there have been no material changes in the future development of the Group's business since the publication of the Company's 2024 annual report[51] Other Information Corporate Governance The company complied with the Corporate Governance Code, though the Chairman also serves as CEO - During the six months ended 30 June 2025, the Company has complied with the principles and all applicable code provisions of the Corporate Governance Code set out in Appendix C1 to the Listing Rules[52] - Mr Yang Jiyie, the Chairman of the Board, also serves as the CEO and President of the Company, which deviates from code provision C.2.1 of the CG Code, but the Company believes this arrangement provides strong and consistent leadership and enables more effective planning and execution of long-term business strategies[52] Model Code for Securities Transactions by Directors of Listed Issuers The company adopted the Model Code, and all directors and relevant employees confirmed compliance during H1 2025 - The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 to the Listing Rules and has formulated its own "Written Guidelines on Dealings in the Company's Securities by Directors and Relevant Employees"[53] - Upon specific enquiry made to all directors and relevant employees of the Company, all directors and relevant employees confirmed that they had complied with the requirements of the Model Code and the Company's guidelines during the six months ended 30 June 2025[53] Purchase, Sale or Redemption of the Company's Listed Securities Neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed securities in H1 2025 - During the six months ended 30 June 2025, neither the Company nor any of its subsidiaries had purchased, sold or redeemed any of the Company's listed securities[54] - As at 30 June 2025, the Company did not have any treasury shares[54] Audit Committee The Audit Committee reviewed the 2025 interim results and found them to be properly prepared and disclosed - The Audit Committee consists of three independent non-executive directors and is primarily responsible for reviewing and supervising the Group's financial reporting, risk management and internal controls, and reviewing the accounting policies and practices adopted by the Company with management[55] - The Audit Committee has reviewed the unaudited interim results for 2025 and is of the opinion that such interim results have been prepared in accordance with the applicable accounting standards, rules and regulations and that appropriate disclosures have been made[55] Interim Dividend The Board decided not to declare an interim dividend for 2025 to support the spin-off and listing of the Australian gold business - Despite the Group recording a net profit for the interim period of 2025, the Board has decided not to declare an interim dividend after careful consideration of the Company's overall financial arrangements and strategic direction[56] - The decision not to declare an interim dividend is intended to support the spin-off and listing of the Australian gold mining business, ensuring its smooth progress and safeguarding the long-term interests of shareholders[56] Publication of Interim Results and Report The results announcement and interim report will be published on the websites of the Hong Kong Stock Exchange and the company - This results announcement will be published on the website of the Hong Kong Stock Exchange at www.hkexnews.hk and on the Company's website at www.hankingmining.com[57](index=57&type=chunk) - The Company's 2025 Interim Report containing all the information required by the Listing Rules will be despatched to shareholders and published on the Company's website and the Hong Kong Stock Exchange's website in due course[57] Acknowledgement The Board expresses its sincere gratitude to shareholders, management, employees, business partners, and customers for their support - The Board would like to express its sincere gratitude to the shareholders, management team, employees, business partners and customers for their strong support[58] Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (Unaudited) | Indicator | H1 2025 (RMB'000) | H1 2024 (RMB'000) | | :--- | :--- | :--- | | Revenue | 1,405,188 | 1,268,564 | | Cost of sales | (1,044,411) | (921,590) | | Gross profit | 360,777 | 346,974 | | Other income | 5,077 | 5,587 | | Other gains and losses | 5,242 | (3,348) | | Impairment losses under expected credit loss model | (5,964) | 5,442 | | Distribution and selling expenses | (50,701) | (40,747) | | Administrative expenses | (101,450) | (101,101) | | Research and development expenses | (68) | (59) | | Other expenses | (409) | (200) | | Share of results of associates | (389) | (2,604) | | Finance costs | (37,154) | (35,892) | | Profit before tax | 174,961 | 174,052 | | Income tax expense | (70,424) | (67,394) | | Profit for the period | 104,537 | 106,658 | | Other comprehensive income (expense) for the period | 23,437 | (8,868) | | Total comprehensive income for the period | 127,974 | 97,790 | | Profit for the period attributable to owners of the Company | 104,318 | 107,467 | | Basic and diluted earnings per share (RMB cents) | 5.4 | 5.6 | Condensed Consolidated Statement of Financial Position - As of June 30, 2025, the Group's total assets were RMB 4,053,642 thousand, total liabilities were RMB 2,514,657 thousand, and net assets were RMB 1,538,985 thousand[61][62][73][74] - Intangible assets increased significantly by 131.56% to RMB 647,570 thousand, mainly due to the reversal of a cancelled disposal and mining exploration expenditures[32][61] Condensed Consolidated Statement of Financial Position (Unaudited) | Indicator | 30 June 2025 (RMB'000) | 31 Dec 2024 (RMB'000) | | :--- | :--- | :--- | | Non-current Assets | | | | Property, plant and equipment | 617,818 | 654,085 | | Goodwill | 209,132 | 209,132 | | Intangible assets | 647,570 | 279,655 | | Right-of-use assets | 191,343 | 194,559 | | Deferred tax assets | 82,256 | 212,949 | | Current Assets | | | | Inventories | 183,419 | 261,314 | | Trade and other receivables | 339,226 | 222,469 | | Receivables at FVTOCI | 463,204 | 286,076 | | Pledged bank deposits | 813,713 | 454,162 | | Cash and cash equivalents | 449,873 | 358,128 | | Current Liabilities | | | | Trade, bills and other payables | 1,181,691 | 914,987 | | Borrowings | 1,041,347 | 895,857 | | Non-current Liabilities | | | | Borrowings | 58,000 | — | | Total Equity | 1,538,985 | 1,441,602 | Notes to the Condensed Consolidated Financial Statements 1. Basis of Preparation The financial statements were prepared on a going concern basis despite current liabilities exceeding current assets - The condensed consolidated financial statements have been prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" and the applicable disclosure requirements of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[63] - In view of the Group's current liabilities exceeding its current assets by RMB 157,479 thousand as at 30 June 2025, the directors have given careful consideration to the Group's going concern[64] - The directors are confident that the Group will be successful in obtaining approval for its available conditional banking facilities and that the vast majority of its bank borrowings can be successfully renewed upon maturity, thus the condensed consolidated financial statements have been prepared on a going concern basis[64] A. General Information - The condensed consolidated financial statements have been prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" issued by the International Accounting Standards Board and the applicable disclosure requirements of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[63] B. Going Concern Assessment - In view of the Group's current liabilities exceeding its current assets by RMB 157,479 thousand as at 30 June 2025, the directors have given careful consideration to the Group's going concern[64] - As at 30 June 2025, the Group had available conditional banking facilities of RMB 887,190 thousand, for which the directors are confident of obtaining approval[64] - After considering the above factors and other available financial resources, the directors are of the opinion that the Group has sufficient working capital to meet its present requirements for at least the next twelve months from the end of the reporting period, and therefore the condensed consolidated financial statements have been prepared on a going concern basis[64] 2. Significant Accounting Policies The financial statements are prepared under the historical cost convention, with no material impact from new IFRS amendments - The condensed consolidated financial statements have been prepared on the historical cost basis, except for certain financial instruments that are measured at fair values[65] - The application of the amendments to IFRSs in the current interim period has had no material effect on the financial position and performance of the Group for the current and prior periods and/or on the disclosures set out in these condensed consolidated financial statements[66] Application of amendments to IFRSs - In the current interim period, the Group has applied, for the first time, the following amendments to IFRSs issued by the IASB that are mandatorily effective for the annual period beginning on 1 January 2025 for the preparation of the Group's condensed consolidated financial statements: Amendments to IAS 21 Lack of Exchangeability[66] - The application of the amendments to IFRSs in the current interim period has had no material effect on the financial position and performance of the Group for the current and prior periods and/or on the disclosures set out in these condensed consolidated financial statements[66] 3A. Revenue from Contracts with Customers The Group's revenue is primarily derived from the sale of iron concentrate and high-purity iron within Mainland China - All revenue from contracts with customers is derived from Mainland China[67] Disaggregation of Revenue from Contracts with Customers | Revenue Source | H1 2025 (RMB'000) | H1 2024 (RMB'000) | | :--- | :--- | :--- | | Sales of iron concentrate | 131,957 | 52,603 | | Sales of high-purity iron | 1,269,405 | 1,196,518 | | Sales of construction materials | 177 | 995 | | Sales of raw and residual materials | 2,213 | 18,448 | | Iron ore processing services | 1,436 | — | | Total | 1,405,188 | 1,268,564 | 3B. Segment Information The Group operates three main segments: iron ore, high-purity iron, and gold mining, with the iron ore business being the most profitable - The Group is principally engaged in the exploration, mining, processing and sale of iron ores ("iron ore business") and the production and sale of high-purity iron ("high-purity iron business") in the PRC and the exploration of gold ores ("gold mining business") in Australia[68] - Other operating segments include the production and sale of construction materials (i.e. foamed ceramics)[70] Segment revenue and results Segment Revenue (External Sales, RMB'000) | Segment | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Iron ore business | 134,038 | 53,091 | | High-purity iron business | 1,270,973 | 1,214,291 | | Gold mining business | — | — | | Others | 177 | 1,182 | | Total | 1,405,188 | 1,268,564 | Segment Profit (Loss) (RMB'000) | Segment | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Iron ore business | 172,142 | 235,248 | | High-purity iron business | 14,956 | (35,503) | | Gold mining business | (5,154) | (1,207) | | Others | (2,897) | (5,048) | | Consolidated profit before tax | 174,961 | 174,052 | Segment assets and liabilities Segment Assets (RMB'000) | Segment | 30 June 2025 | 31 Dec 2024 | | :--- | :--- | :--- | | Iron ore business | 1,229,847 | 1,090,381 | | High-purity iron business | 1,984,183 | 1,657,039 | | Gold mining business | 516,480 | 560,234 | | Total reportable segment assets | 3,730,510 | 3,307,654 | | Consolidated assets | 4,053,642 | 3,591,948 | Segment Liabilities (RMB'000) | Segment | 30 June 2025 | 31 Dec 2024 | | :--- | :--- | :--- | | Iron ore business | 853,191 | 616,182 | | High-purity iron business | 1,598,325 | 1,352,664 | | Gold mining business | 22,414 | 141,938 | | Total reportable segment liabilities | 2,473,930 | 2,110,784 | | Consolidated liabilities | 2,514,657 | 2,150,346 | 4A. Other Income Other income in H1 2025 primarily consisted of bank interest income Breakdown of Other Income (RMB'000) | Revenue Source | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Bank interest income | 4,450 | 4,382 | | Government grants | 27 | 605 | | Rental income | 600 | 600 | | Total | 5,077 | 5,587 | 4B. Other Gains and Losses The Group recorded other gains of RMB 5,242 thousand, a significant improvement from a loss in the prior year - The significant improvement in other gains or losses was mainly because the Group recognized an impairment of RMB 5,976 thousand on its interest in an associate company during the same period last year[76] Items of Other Gains and Losses (RMB'000) | Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Impairment loss on interest in an associate | — | (5,976) | | Fair value loss on financial assets at FVTPL | (37) | (698) | | Net foreign exchange gain | 1,150 | 1,891 | | Gain on disposal of property, plant and equipment | 1,546 | 918 | | Others | 2,583 | 517 | | Total | 5,242 | (3,348) | 5. Profit for the Period The Group's profit for H1 2025 was RMB 104,537 thousand after accounting for depreciation, amortization, and staff costs - Profit for the period was RMB 104,537 thousand[59] Items Deducted from Profit for the Period (RMB'000) | Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Total depreciation and amortisation | 74,958 | 79,248 | | - Capitalised in inventories | (64,090) | (66,209) | | Total staff costs | 104,687 | 99,247 | | - Capitalised in inventories | (46,383) | (40,212) | 6. Income Tax Expense The Group's income tax expense for H1 2025 was RMB 70,424 thousand, with a key subsidiary no longer renewing its preferential tax status - Fushun Hanking Aoniu Mining Co, Ltd was eligible for a preferential tax rate of 15% from 2022 to 2024, but management decided not to renew the "High and New Technology Enterprise" tax preferential qualification during the current interim period[79] Breakdown of Income Tax Expense (RMB'000) | Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | PRC Enterprise Income Tax (Current) | 47,452 | 65,773 | | Withholding tax | 3,575 | 3,578 | | Under-provision of EIT in prior years | 750 | 2,768 | | Deferred tax expense | 18,647 | (4,725) | | Total income tax expense | 70,424 | 67,394 | 7. Dividends A final dividend for 2024 was paid during the period, but no interim dividend for 2025 has been proposed - During the current interim period, a final dividend of HK$0.02 per share, totaling HK$39,200,000 (equivalent to RMB 35,851,000), was declared for the year ended 31 December 2024, of which RMB 35,131,000 has been paid to the owners of the Company[80] - No dividend was proposed during the interim period[80] 8. Earnings Per Share Basic and diluted earnings per share for H1 2025 was RMB 5.4 cents, a slight decrease from the prior year - The Company did not repurchase any of its ordinary shares during both interim periods[81] Earnings Per Share Calculation Data | Indicator | H1 2025 (RMB'000) | H1 2024 (RMB'000) | | :--- | :--- | :--- | | Profit for the period attributable to owners of the Company for the purpose of basic and diluted EPS | 104,318 | 107,467 | | Weighted average number of ordinary shares for the purpose of basic and diluted EPS | 1,920,461,000 | 1,920,461,000 | | Basic and diluted earnings per share (RMB cents) | 5.4 | 5.6 | 9. Trade and Other Receivables Trade receivables increased by 73.73%, mainly driven by the high-purity iron segment - The increase in trade receivables mainly includes third-party trade receivables of RMB 57,000 thousand factored to non-bank financial institutions, primarily from the high-purity iron segment[33] Overview of Trade and Other Receivables | Indicator | 30 June 2025 (RMB'000) | 31 Dec 2024 (RMB'000) | | :--- | :--- | :--- | | Trade receivables | 271,546 | 156,299 | | Total other receivables | 67,680 | 66,332 | | Total trade and other receivables | 339,226 | 222,631 | Ageing Analysis of Trade Receivables (Net of Loss Allowance) | Ageing | 30 June 2025 (RMB'000) | 31 Dec 2024 (RMB'000) | | :--- | :--- | :--- | | - Within 7 days | 147,348 | 72,975 | | - 8 to 30 days | 27,625 | 2,266 | | - 31 to 60 days | 33,086 | 45,308 | | - 61 to 90 days | 18,780 | 14,545 | | - 91 days to 1 year | 44,707 | 21,205 | | Total | 271,546 | 156,299 | 10. Receivables at Fair Value through Other Comprehensive Income Receivables at FVTOCI, comprising bills receivable, increased by 61.92% from the end of 2024 - The Group's receivables at FVTOCI are bills receivable, all of which have a maturity of within 6 months[85] Receivables at FVTOCI (Bills Receivable) | Indicator | 30 June 2025 (RMB'000) | 31 Dec 2024 (RMB'000) | | :--- | :--- | :--- | | Bills receivable | 463,204 | 286,076 | 10A. Transfers of Financial Assets The Group continues to recognize certain transferred financial assets as it has not transferred substantially all risks and rewards - The Group transfers financial assets to banks, suppliers or non-bank financial institutions by discounting/endorsing or factoring on a full recourse basis, and continues to recognise the full carrying amount of the receivables as it has not transferred substantially all the risks and rewards of the financial assets[86] - As at 30 June 2025, the Group had derecognised bills of RMB 393,464 thousand that were discounted to banks or endorsed to certain suppliers on a full recourse basis but had not yet matured[87] 10A.1 Transferred financial assets that are not derecognised in their entirety - The Group transfers financial assets to banks, suppliers or non-bank financial institutions by discounting/endorsing or factoring on a full recourse basis, and continues to recognise the full carrying amount of the receivables as it has not transferred substantially all the risks and rewards of the financial assets[86] Carrying Amount of Transferred Financial Assets (30 June 2025) | Type of Transferred Financial Asset | Carrying Amount (RMB'000) | | :--- | :--- | | Trade receivables factored to non-bank financial institutions with full recourse | 57,000 | | Bills discounted to banks that are not derecognised in their entirety | 171,800 | | Bills endorsed to suppliers that are not derecognised in their entirety | 145,043 | | Total | 373,843 | 10A.2 Transferred financial assets that are derecognised in their entirety but where the Group has continuing involvement - As at 30 June 2025, the Group had derecognised bills of RMB 393,464 thousand that were discounted to banks or endorsed to certain suppliers on a full recourse basis but had not yet matured[87] - These bills were issued or guaranteed by reputable PRC banks with high credit ratings, posing minimal credit risk, but the Group has continuing involvement as the banks or suppliers have the right to request repayment if the bills are not honored at maturity[87] 11. Disposal Group Classified as Held for Sale The agreement to sell Primary Gold Pty Ltd was terminated, and its assets are no longer classified as held for sale - On 1 July 2024, HGM Resources Pty Ltd, a subsidiary of the Company, entered into a share sale agreement to dispose of its 100% equity interest in Primary Gold Pty Ltd and its wholly-owned subsidiary, Primary Minerals Pty Ltd (the "Disposal Group")[88] - On the sunset date (1 July 2025), the buyer failed to satisfy one of the key conditions, the Foreign Investment Review Board of Australia condition, leading the seller to terminate the share sale agreement on 2 July 2025[91] - Following the termination, the Company no longer classifies the relevant assets and liabilities of the then Disposal Group as "assets held for sale" in the interim financial statements[91] Assets and Liabilities Classified as Held for Sale as at 31 Dec 2024 (RMB'000) | Item | Amount | | :--- | :--- | | Property, plant and equipment | 13,791 | | Intangible assets | 313,643 | | Restricted deposits | 12,284 | | Other receivables | 162 | | Cash and cash equivalents | 1,817 | | Total assets classified as held for sale | 341,697 | | Provisions | 12,496 | | Deferred tax liabilities | 59,304 | | Trade and other payables | 4,142 | | Total liabilities classified as held for sale | 75,942 | 12. Trade, Bills and Other Payables Bills payable increased significantly by 48.79%, while trade and other payables decreased - Payment terms with suppliers are mainly on credit periods of 90 days and 15 days from the receipt of goods from suppliers of the iron ore business and high-purity iron business, respectively[92] Overview of Trade, Bills and Other Payables | Indicator | 30 June 2025 (RMB'000) | 31 Dec 2024 (RMB'000) | | :--- | :--- | :--- | | Trade payables | 184,925 | 195,391 | | Bills payable under bills financing arrangements | 884,657 | 594,578 | | Other payables | 112,109 | 129,160 | | Total trade, bills and other payables | 1,181,691 | 919,129 | Maturity of Bills Payable (RMB'000) | Maturity | 30 June 2025 | 31 Dec 2024 | | :--- | :--- | :--- | | Within 6 months | 824,657 | 594,578 | | 6 months to 1 year | 60,000 | — | | Total | 884,657 | 594,578 | 13. Borrowings Total borrowings increased by 22.71% to RMB 1,099,347 thousand, with effective interest rates ranging from 3.45% to 8.60% - The effective interest rates on the Group's interest-bearing borrowings range from 3.45% to 8.60%[97] - Borrowings are in various forms including secured and guaranteed, secured and unguaranteed, and unsecured and guaranteed, secured by assets of subsidiaries, bank deposits, receivables, and guaranteed by the controlling shareholder[97][98] Borrowings Overview (RMB'000) | Indicator | 30 June 2025 | 31 Dec 2024 | Change | | :--- | :--- | :--- | :--- | | Bank loans | 1,042,347 | 846,257 | +23.17% | | Other loans | 57,000 | 49,600 | +14.92% | | Total borrowings | 1,099,347 | 895,857 | +22.71% | Carrying Amount of Borrowings Repayable (RMB'000) | Maturity | 30 June 2025 | 31 Dec 2024 | | :--- | :--- | :--- | | Within one year | 1,041,347 | 895,857 | | Over one year but not exceeding two years | 58,000 | — | | Total | 1,099,347 | 895,857 | 14. Share Capital The company's share capital structure remained unchanged as of June 30, 2025 - As of 30 June 2025, the Company's share capital structure remained unchanged from 31 December 2024[100] Share Capital Details | Share Capital Type | Number of Shares | Share Capital (HKD'000) | Amount (RMB'000) | | :--- | :--- | :--- | :--- | | Authorised (Ordinary shares of HK$0.1 each) | 10,000,000,000 | N/A | N/A | | Issued and fully paid (Ordinary shares of HK$0.1 each) | 1,960,000,000 | 196,000 | 160,203 | Definitions - This section provides definitions for key terms and abbreviations used in the report, including company names, subsidiaries, currency units, geographical areas, regulatory bodies, mine names, and relevant accounting and industry standards[101][102][104]