微盟集团(02013) - 2025 - 中期业绩

H1 2025 Performance Highlights The company achieved its first adjusted EBITDA and net profit turnaround since 2022 and 2021 respectively, driven by AI technology and improved gross margin H1 2025 Financial Performance Summary (RMB Million) | Indicator | 2025 | 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 775.5 | 867.4 | (10.6%) | | Adjusted Revenue | 775.5 | 719.1 | 7.8% | | Gross Profit | 582.3 | 575.9 | 1.1% | | Adjusted Gross Profit | 583.2 | 428.5 | 36.1% | | Operating Profit / (Loss) | 0.3 | (287.3) | (100.1%) | | Loss Before Income Tax | (29.7) | (547.1) | (94.6%) | | Loss for the Period | (47.2) | (569.8) | (91.7%) | | Adjusted EBITDA / (Loss) | 71.8 | (176.3) | (140.7%) | | Adjusted Net Profit / (Loss) | 16.9 | (187.4) | (109.0%) | - The company firmly positions AI technology as its core driver, continuously deepening its SaaS and precision marketing business layout, and promoting the widespread application and implementation of AI Agent technology in key scenarios like e-commerce and retail[5] - Gross margin increased from 66.4% to 75.1%, indicating continuous improvement in revenue quality, achieving the first adjusted EBITDA turnaround since 2022 and the first adjusted net profit turnaround since 2021[6] - AI-related revenue achieved a breakthrough, reaching RMB 34 million in H1 2025, contributing to the quarter-over-quarter stabilization and rebound of subscription solutions revenue[5][7][9] - As of June 30, 2025, the Group's cash and bank balances were approximately RMB 1.574 billion, indicating a healthy cash and financial position[6] I. Subscription Solutions Subscription solutions revenue declined due to macro factors and business adjustments, but AI-related income is emerging as a new growth driver Subscription Solutions Key Data (H1 2025 vs H1 2024) | Indicator | 2025 | 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Revenue (RMB Million) | 438.0 | 487.0 | (10.1%) | | Number of Paying Merchants | 59,149 | 68,725 | (13.9%) | | Average Revenue Per User (ARPU) (RMB) | 7,402 | 7,083 | 4.5% | - Revenue decline was primarily due to the reduction of low-quality subscription businesses in 2024 and a temporary delay in demand caused by existing customers' business contraction amidst the external macro environment[7][13] - AI-related revenue contributed RMB 34 million in H1 2025, helping subscription solutions revenue stabilize and rebound quarter-over-quarter[7][13] - Smart retail customer GMV increased by 13.4% year-on-year, with the number of accounts generating over RMB 100 million in GMV growing by 60%, and accounts generating over RMB 1 million in GMV growing by 34%[14] - Actively exploring internationalization, the one-stop e-commerce growth solution Markivo has become a Shopify app service provider, and its Haiding business is expanding into Southeast Asian and European and American markets[15] II. Merchant Solutions Merchant solutions achieved significant adjusted revenue growth and improved gross margin, driven by business restructuring and multi-platform expansion Merchant Solutions Key Data (H1 2025 vs H1 2024) | Indicator | 2025 (RMB Million) | 2024 (RMB Million) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 337.6 | 380.6 | (11.3%) | | Adjusted Revenue | 337.6 | 232.3 | 45.3% | | Gross Profit | 308.2 | 283.5 | 8.7% | | Gross Margin | 91.3% | 74.5% | 16.8 ppt | | Gross Advertising Revenue | 8,623.1 | 8,341.8 | 3.4% | | Number of Paying Merchants | 39,281 | 38,706 | 1.5% | | Average Spending Per Paying Merchant (RMB) | 219,523 | 215,434 | 1.9% | - Adjusted revenue significantly increased by 45.3% year-on-year, and gross margin rose from 74.5% to 91.3%, primarily due to the reduction of low-margin businesses and customer structure adjustments[8][16] - Consolidated its leading position in Tencent advertising, with video account advertising consumption growing by 46% year-on-year, and received multiple Tencent advertising service provider honors[17] - Actively expanded its multi-platform strategy, achieving an 87% year-on-year increase in annual consumption on Xiaohongshu, and received awards such as Kuaishou Magnet Engine's "2025 Annual Top Ten Benchmark Partner"[17] - Continuously deepened "AI + Marketing" applications, achieving cost reduction and efficiency improvement, with the average monthly generated content volume being 25 times that at its 2024 launch[17] Business Outlook The company plans to deepen AI applications, expand the WeChat e-commerce ecosystem, explore multi-channel opportunities, focus on local life services, and actively pursue internationalization 1. Fully Embrace AI and Promote AI Agent Application The company will expand AI technology applications in SaaS and precision marketing, leveraging AI product matrices to enhance merchant capabilities and deploy AI Agents in e-commerce, retail, and local life - Continuously expand AI technology application scenarios in SaaS and precision marketing, utilizing AI product matrices such as WAI SaaS, WAI Pro, and WIME to comprehensively help merchants enhance operational strategy planning, efficiency, business management, and marketing content creation capabilities[18] - Promote the application and implementation of AI Agent in e-commerce retail, local life, and precision marketing, with WIME also integrating with super applications like WPS to expand commercialization opportunities[18] 2. Deeply Cultivate WeChat E-commerce Ecosystem The company will optimize its integrated WeChat e-commerce solutions, enhance merchant operational efficiency, and drive traffic and sales growth through social commerce features and video account MCN business - Long-term comprehensive layout of the WeChat e-commerce ecosystem, continuously optimizing Weimob x WeChat Mini-Store integrated solutions to improve merchant operational efficiency and user experience[19] - Layout the "Tuike" section to leverage social distribution coverage, enhancing conversion efficiency and user stickiness; combining "Group Buy" and "Send Gifts" social e-commerce features to help merchants acquire traffic at low cost and precisely convert customers[19] - Focus on video account MCN business, driving brand exposure and sales growth for merchants through live streaming, short video content, and influencer recommendations and interactions[19] 3. Expand Multi-Channel Business Opportunities The company will deepen multi-platform cooperation in SaaS and actively expand into new advertising channels like Douyin for merchant solutions, integrating public domain platforms with mini-program businesses - In SaaS, beyond existing WeChat channels, continue to deepen multi-platform business opportunities with Douyin, Huawei HarmonyOS, Meituan, Xiaohongshu, and Alipay, building integrated capabilities between public domain platforms and mini-program businesses[20] - In precision marketing, new channels like Xiaohongshu and Kuaishou have achieved rapid growth in the past two years, and active expansion into Douyin channels is planned for Q4 2025 and next year, expected to bring new growth momentum for merchant solutions[20] 4. Focus on Local Life Services Market The company will strengthen its support for offline local services, integrate multi-channel traffic, and provide comprehensive capabilities to merchants, accelerating digital transformation and business growth in the local life sector - Focus on the local life sector, increasing system support capabilities for offline local "product, store service, and experience" business scenarios[21] - Integrate resources through industry empowerment and ecosystem cooperation, connecting multi-channel traffic and providing merchants with multi-dimensional capabilities including membership operations and precision marketing, to accelerate digital transformation and business growth in the local life sector[21] 5. Actively Explore Internationalization The company will expand into mature overseas markets like North America with AI applications, help Chinese brands go global, and grow its Haiding business internationally by researching localized operational strategies - Further expand into mature overseas markets like North America, with Markivo becoming a Shopify app service provider, leveraging deep industry accumulation and technical experience to promote AI application capabilities overseas[22] - Weimob International launched its "Weimob Go Global" business, dedicated to helping Chinese brands expand globally, offering AI-powered rapid website building, multi-channel traffic acquisition, and brand consulting services[22] - Further promote the expansion and growth of its Haiding business in overseas markets, using the overseas expansion of high-quality new consumer merchants in China as a foundation, gradually penetrating and expanding to local overseas merchants[22] Management Discussion and Analysis This section provides a detailed review of the company's financial and operational performance, highlighting key trends, drivers, and strategic initiatives for the period Comparison of the Six Months Ended June 30, 2025, and June 30, 2024 This section compares the financial performance for H1 2025 and H1 2024, showing a decrease in total revenue but growth in adjusted revenue, significant improvements in gross profit, and a substantial reduction in operating loss Condensed Consolidated Statement of Comprehensive Loss Summary (H1 2025 vs H1 2024) | Indicator | 2025 (RMB Thousand) | 2024 (RMB Thousand) | | :--- | :--- | :--- | | Revenue | 775,467 | 867,434 | | Cost of Sales | (193,211) | (291,529) | | Gross Profit | 582,256 | 575,905 | | Selling and Distribution Expenses | (389,495) | (565,260) | | General and Administrative Expenses | (216,605) | (287,008) | | Operating Profit / (Loss) | 270 | (287,323) | | Loss for the Period | (47,242) | (569,842) | Key Operating Data (H1 2025 vs H1 2024) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | New Paying Merchants for Subscription Solutions | 4,793 | 8,515 | | Number of Paying Merchants for Subscription Solutions | 59,149 | 68,725 | | Churn Rate for Subscription Solutions | 13.6% | 9.2% | | ARPU for Subscription Solutions (RMB) | 7,402 | 7,083 | | Number of Paying Merchants for Merchant Solutions | 39,281 | 38,706 | | Revenue for Merchant Solutions (RMB Million) | 337.6 | 232.4 | | ARPU for Merchant Solutions (RMB) | 8,595 | 6,003 | | Gross Revenue for Merchant Solutions (RMB Million) | 8,623.1 | 8,341.8 | Key Financial Ratios (H1 2025 vs H1 2024) | Indicator | 2025 (%) | 2024 (%) | | :--- | :--- | :--- | | Total Adjusted Revenue Growth | 7.8 | (37.3) | | Adjusted Gross Margin | 75.2 | 59.6 | | Adjusted EBITDA Margin | 9.3 | (24.5) | | Net Margin Attributable to Equity Holders of the Company | (4.3) | (63.5) | | Adjusted Net Margin Attributable to Equity Holders of the Company | 3.1 | (24.4) | Revenue Total revenue decreased by 10.6% to RMB 775.5 million, while adjusted total revenue increased by 7.8% to RMB 775.5 million, primarily driven by strong growth in adjusted merchant solutions revenue Revenue Breakdown (H1 2025 vs H1 2024) | Revenue Category | 2025 (RMB Million) | Share (%) | 2024 (RMB Million) | Share (%) | | :--- | :--- | :--- | :--- | :--- | | Subscription Solutions | 437.9 | 56.5 | 486.8 | 56.1 | | Merchant Solutions | 337.6 | 43.5 | 380.6 | 43.9 | | Total | 775.5 | 100.0 | 867.4 | 100.0 | Adjusted Revenue Breakdown (H1 2025 vs H1 2024) | Revenue Category | 2025 (RMB Million) | Share (%) | 2024 (RMB Million) | Share (%) | | :--- | :--- | :--- | :--- | :--- | | Subscription Solutions | 437.9 | 56.5 | 486.8 | 67.7 | | Merchant Solutions | 337.6 | 43.5 | 232.3 | 32.3 | | Total | 775.5 | 100.0 | 719.1 | 100.0 | Subscription Solutions Subscription solutions revenue decreased by 10.1% to RMB 437.9 million, impacted by a weak macro economy and small merchant churn, though AI-related business is an emerging revenue stream - Subscription solutions revenue decreased by 10.1% from RMB 486.8 million in H1 2024 to RMB 437.9 million in H1 2025[31] - The revenue decrease was primarily due to the negative impact of a weak macro economy and sluggish consumption on the churn rate of small merchants; persistent deflationary pressure hindering new brand merchant expansion; and new revenue channels like AI-related businesses still being in early development stages[31] - In H1 2025, AI-related business revenue was approximately RMB 30 million to RMB 40 million[31] Merchant Solutions Merchant solutions gross revenue increased by 3.4% to RMB 8.6231 billion, with adjusted revenue significantly growing by 45.3% to RMB 337.6 million due to increased advertising platform rebates and business restructuring Merchant Solutions Gross Revenue and Revenue (H1 2025 vs H1 2024) | Indicator | 2025 (RMB Million) | 2024 (RMB Million) | YoY Change | | :--- | :--- | :--- | :--- | | Gross Revenue | 8,623.1 | 8,341.8 | 3.4% | | Revenue | 337.6 | 380.6 | (11.3%) | Merchant Solutions Adjusted Revenue (H1 2025 vs H1 2024) | Indicator | 2025 (RMB Million) | 2024 (RMB Million) | YoY Change | | :--- | :--- | :--- | :--- | | Adjusted Revenue | 337.6 | 232.3 | 45.3% | - Adjusted revenue increased by 45.3%, primarily due to an increase of approximately RMB 171.1 million in net rebates from advertising platforms, and a decrease of approximately RMB 65.8 million in TSO service and credit technology service revenue due to business restructuring[35] - The increase in merchant solutions gross revenue was mainly due to an increase in the number of paying merchants and average spending per advertiser[34] Cost of Sales Total cost of sales decreased significantly by 33.7% to RMB 193.2 million, mainly due to reduced intangible asset amortization after a full impairment of self-developed software in 2024 Cost of Sales Breakdown (By Nature, H1 2025 vs H1 2024) | Cost of Sales | 2025 (RMB Million) | Share (%) | 2024 (RMB Million) | Share (%) | | :--- | :--- | :--- | :--- | :--- | | Advertising Traffic Costs | – | – | 42.8 | 14.7 | | Staff Costs | 52.9 | 27.4 | 27.1 | 9.3 | | Broadband and Hardware Costs | 58.5 | 30.3 | 13.6 | 4.7 | | Operating Service Costs | 74.1 | 38.3 | 100.0 | 34.3 | | Intangible Asset Amortization | 0.9 | 0.5 | 99.5 | 34.1 | | Taxes and Surcharges | 6.1 | 3.2 | 7.5 | 2.6 | | Depreciation and Amortization | 0.7 | 0.3 | 1.0 | 0.3 | | Total | 193.2 | 100.0 | 291.5 | 100.0 | Cost of Sales Breakdown (By Business Segment, H1 2025 vs H1 2024) | Cost of Sales | 2025 (RMB Million) | Share (%) | 2024 (RMB Million) | Share (%) | | :--- | :--- | :--- | :--- | :--- | | Subscription Solutions | 163.8 | 84.8 | 194.4 | 66.7 | | Merchant Solutions | 29.4 | 15.2 | 97.1 | 33.3 | | Total | 193.2 | 100.0 | 291.5 | 100.0 | - Total cost of sales decreased by 33.7%, primarily due to a RMB 98.6 million reduction in intangible asset amortization[38] Subscription Solutions Subscription solutions cost of sales decreased by 15.8% to RMB 163.8 million, primarily due to reduced intangible asset amortization, despite increased broadband, hardware, and staff costs for new business development - Subscription solutions cost of sales decreased by 15.8%, mainly due to a RMB 98.6 million reduction in intangible asset amortization after the full impairment of self-developed software in 2024; however, broadband and hardware costs and staff costs increased by RMB 70.7 million due to new business development[41] Merchant Solutions Merchant solutions cost of sales significantly decreased by 69.7% to RMB 29.4 million, driven by reduced advertising traffic costs and contract operating service costs, aligning with the decline in TSO and credit tech service revenues - Merchant solutions cost of sales decreased by 69.7%, primarily due to reduced advertising traffic costs and contract operating service costs, which is consistent with the decline in TSO service revenue and credit technology solution sales commission revenue[42] Gross Profit and Gross Margin Gross profit increased by 1.1% to RMB 582.3 million, with the overall gross margin improving from 66.4% to 75.1%, primarily due to business restructuring in merchant solutions and reduced intangible asset amortization Gross Profit and Gross Margin Breakdown (H1 2025 vs H1 2024) | Business Segment | 2025 Gross Profit (RMB Million) | 2025 Gross Margin (%) | 2024 Gross Profit (RMB Million) | 2024 Gross Margin (%) | | :--- | :--- | :--- | :--- | :--- | | Subscription Solutions | 274.1 | 62.6 | 292.4 | 60.1 | | Merchant Solutions | 308.2 | 91.3 | 283.5 | 74.5 | | Total | 582.3 | 75.1 | 575.9 | 66.4 | Adjusted Gross Profit and Gross Margin Breakdown (H1 2025 vs H1 2024) | Business Segment | 2025 Adjusted Gross Profit (RMB Million) | 2025 Adjusted Gross Margin (%) | 2024 Adjusted Gross Profit (RMB Million) | 2024 Adjusted Gross Margin (%) | | :--- | :--- | :--- | :--- | :--- | | Subscription Solutions | 275.0 | 62.8 | 293.3 | 60.3 | | Merchant Solutions | 308.2 | 91.3 | 135.2 | 58.2 | | Total | 583.2 | 75.2 | 428.5 | 59.6 | - Adjusted gross profit increased by 36.1% year-on-year to RMB 583.2 million, with adjusted gross margin rising from 59.6% to 75.2%[46] - The adjusted gross margin for merchant solutions significantly increased to 91.3%, primarily due to a higher percentage of net rebate income from merchant solutions after the restructuring of TSO and credit technology services[46] Selling and Distribution Expenses Selling and distribution expenses decreased by 31.1% to RMB 389.5 million, mainly due to reduced staff costs from organizational optimization, lower contract acquisition costs, and savings in rent and property services - Selling and distribution expenses decreased by 31.1% to RMB 389.5 million[47] - Staff costs decreased by RMB 101.9 million, contract acquisition costs decreased by RMB 57 million, and rent and property service expenses decreased by RMB 10.8 million[47] General and Administrative Expenses General and administrative expenses decreased by 24.5% to RMB 216.6 million, primarily due to reduced staff costs and savings in server, network, and communication expenses - General and administrative expenses decreased by 24.5% to RMB 216.6 million[48] - Staff costs decreased by RMB 63.3 million, and server costs, network, and communication expenses decreased by RMB 4.4 million[48] Research and Development Expenses Total R&D expenses decreased by 41.8% to RMB 136.1 million, mainly due to a significant reduction in R&D expenses capitalized as development costs and intangible assets Total R&D Expenses (H1 2025 vs H1 2024) | Indicator | 2025 (RMB Million) | 2024 (RMB Million) | | :--- | :--- | :--- | | R&D Expenses Capitalized as Development Costs and Intangible Assets | – | 55.4 | | R&D Expenses Included in General and Administrative Expenses | 136.1 | 178.4 | | Total R&D Expenses | 136.1 | 233.8 | - Total R&D expenses decreased by 41.8% to RMB 136.1 million[50] Net Impairment Loss on Financial Assets Net impairment loss on financial assets decreased by RMB 3.2 million to RMB 1.6 million, primarily due to improved collection of trade receivables in the precision marketing business - Net impairment loss on financial assets decreased by RMB 3.2 million to RMB 1.6 million[51] - This was primarily due to improved collection of trade receivables in the precision marketing business[51] Other Income Other income slightly increased to RMB 22.2 million, primarily driven by an increase in government grants - Other income slightly increased to RMB 22.2 million, primarily due to an increase in government grants[52] Net Other Gains / (Losses) The Group recorded a net other gain of RMB 3.5 million, a significant improvement from a loss of RMB 27.19 million in H1 2024, mainly due to fair value changes in financial investments and rental property income - A net other gain of RMB 3.5 million was recorded, primarily due to fair value changes in financial investments of RMB 3.3 million and rental property income (net of bank charges) of RMB 1.6 million[53] Operating Profit / (Loss) The Group achieved an operating profit of RMB 0.3 million in H1 2025, a significant turnaround from an operating loss of RMB 287.3 million in H1 2024 - An operating profit of RMB 0.3 million was achieved, compared to an operating loss of RMB 287.3 million in H1 2024[54] Finance Costs Finance costs significantly decreased by RMB 176.6 million to RMB 36.4 million, primarily due to a reduction in amortized interest expenses from the early redemption of 2021 convertible bonds - Finance costs significantly decreased by RMB 176.6 million to RMB 36.4 million[55] - This was primarily due to a RMB 162.2 million reduction in amortized interest expenses resulting from the early redemption of the 2021 convertible bonds[55] Finance Income Finance income decreased to RMB 2.9 million, primarily due to a reduction in interest income from bank deposits - Finance income decreased to RMB 2.9 million, primarily due to a reduction in interest income from bank deposits[56] Share of Net Profit / (Loss) of Associates Accounted for Using the Equity Method The Group recorded a net profit of RMB 3.6 million from associates accounted for using the equity method, representing its share of profit from equity investment funds - A net profit of RMB 3.6 million from associates accounted for using the equity method was recorded, representing the share of profit from equity investment funds[57] Fair Value Change of Convertible Bonds No fair value change of convertible bonds was recorded for H1 2025, as the convertible bonds issued in April 2024 have been settled - No fair value change of convertible bonds was recorded for the six months ended June 30, 2025, as the convertible bonds issued in April 2024 have been settled[58] Income Tax Expense Income tax expense was RMB 17.6 million, primarily due to reduced impairment losses on financial assets offsetting decreased taxable income from Chinese subsidiaries, leading to derecognition of deferred tax assets - Income tax expense was RMB 17.6 million, primarily due to reduced impairment losses on financial assets offsetting decreased taxable income from Chinese subsidiaries, leading to the derecognition of deferred tax assets, resulting in a reduction in current income tax expense[59] Loss for the Period The Group recorded a loss of RMB 47.2 million for H1 2025, a significant reduction from a loss of RMB 569.8 million in H1 2024 - Loss for the period was RMB 47.2 million, compared to a loss of RMB 569.8 million in H1 2024[60] Non-HKFRS Measures: Adjusted EBITDA and Adjusted Net Loss The Group utilized non-HKFRS measures, Adjusted EBITDA and Adjusted Net Loss, to better reflect operating performance, showing a significant turnaround to a profit of RMB 71.8 million and RMB 16.9 million respectively in H1 2025 - Adjusted EBITDA significantly improved from a loss of RMB 176.3 million in H1 2024 to a profit of RMB 71.8 million[63][65] - Adjusted net profit significantly improved from a loss of RMB 187.4 million in H1 2024 to a profit of RMB 16.9 million[63][65] Adjusted Financial Metrics Reconciliation (H1 2025) | Indicator | As Reported (RMB Million) | As Adjusted (RMB Million) | | :--- | :--- | :--- | | Gross Profit | 582.3 | 583.2 | | Operating Profit / (Loss) | 0.3 | 46.4 | | EBITDA | 49.9 | 71.8 | | Net Loss | (47.2) | 16.9 | | Net (Loss) / Profit Attributable to Equity Holders of the Company | (33.1) | 23.8 | Adjusted Financial Metrics Reconciliation (H1 2024) | Indicator | As Reported (RMB Million) | As Adjusted (RMB Million) | | :--- | :--- | :--- | | Gross Profit | 575.9 | 428.5 | | Operating Profit / (Loss) | (287.3) | (331.4) | | EBITDA | (183.6) | (176.3) | | Net Loss | (569.8) | (187.4) | | Net Loss Attributable to Equity Holders of the Company | (550.8) | (175.4) | Liquidity and Financial Resources The Group's liquidity is primarily from operations, bank borrowings, and equity injections, with cash and bank balances of RMB 1.5736 billion as of June 30, 2025, despite facing some bank covenant breaches that have received temporary waivers Cash and Bank Balances As of June 30, 2025, the Group's total cash and bank balances were approximately RMB 1.5736 billion, including bank wealth management products, restricted cash, and cash and cash equivalents - As of June 30, 2025, the Group's cash and bank balances totaled approximately RMB 1.5736 billion[66] Cash and Bank Balances Breakdown (As of June 30, 2025) | Category | Amount (RMB Million) | | :--- | :--- | | Bank wealth management products at fair value through profit or loss | 35.7 | | Restricted cash* | 532.9 | | Cash and cash equivalents | 1,004.8 | | Subtotal (Current Assets) | 1,573.4 | | Non-current restricted cash | 0.2 | | Total | 1,573.6 | * Restricted cash primarily refers to cash deposited in offshore banks as collateral for domestic loans denominated in RMB Net Debt to Equity Ratio The Group's net debt to equity ratio increased to 44.4% as of June 30, 2025, up from 37.8% in the prior year Debt to Equity Ratio (As of June 30) | Indicator | 2025 (RMB Thousand) | 2024 (RMB Thousand) | | :--- | :--- | :--- | | Net Debt | 890,502 | 947,855 | | Total Equity | 2,007,064 | 2,510,642 | | Total Capital | 2,897,566 | 3,458,497 | | Net Debt to Equity Ratio | 44.4% | 37.8% | - The net debt to equity ratio increased from 37.8% in 2024 to 44.4% in 2025[69] Bank Borrowings As of June 30, 2025, the Group's total bank borrowings were approximately RMB 2.1985 billion, with some covenant breaches temporarily waived, and management is confident in refinancing and securing new facilities - As of June 30, 2025, the Group's bank borrowings totaled approximately RMB 2.1985 billion[70] - The Group has breached certain covenants related to bank borrowings totaling RMB 371.75 million, but the lenders have granted temporary waivers for the syndicated loan-related breaches[99] - Management is confident in renewing existing financing and obtaining new financing, and continuously monitors compliance with all bank borrowing and financing covenant requirements[101] Capital Expenditures Total capital expenditures for H1 2025 increased by 13% to RMB 113.7 million, primarily due to increased spending on fixed assets Capital Expenditures (H1 2025 vs H1 2024) | Category | 2025 (RMB Million) | 2024 (RMB Million) | | :--- | :--- | :--- | | Fixed Assets | 113.3 | 45.2 | | Intangible Assets | 0.4 | 55.4 | | Total | 113.7 | 100.6 | - Total capital expenditures increased to RMB 113.7 million, primarily due to increased expenditures on fixed assets, including computer equipment, office furniture, vehicles, renovation of leased offices, and construction[75][77] Significant Investments Held, Material Acquisitions and Disposals of Subsidiaries, Associates and Joint Ventures, and Future Plans for Material Investments or Capital Assets As of June 30, 2025, the Group held no significant investments, nor did it undertake any material acquisitions or disposals, with no board-approved future plans for major investments or capital asset purchases - As of June 30, 2025, the Group held no significant investments, nor did it undertake any material acquisitions or disposals of subsidiaries, associates, or joint ventures[78] - As of the date of this announcement, the Group had no board-approved future plans for material investments or purchases of capital assets[78] Pledged Assets As of June 30, 2025, the Group pledged land use rights, property, plant and equipment, and investment properties totaling RMB 833.532 million as collateral for long-term bank borrowings - As of June 30, 2025, land use rights of RMB 301.122 million, property, plant and equipment of RMB 507.1 million, and investment properties of RMB 25.31 million were pledged as collateral for the Group's long-term borrowings of RMB 249.894 million and long-term bank borrowings repayable within one year of RMB 47.898 million[79] Foreign Exchange Risk Management The Group primarily operates in China with most transactions settled in RMB, facing foreign exchange risks mainly related to USD and HKD, without hedging through long-term contracts or currency borrowings in H1 2025 - The Group primarily operates in China, with most transactions settled in RMB, and faces foreign exchange risks from various currencies, mainly related to USD and HKD[80] - For the six months ended June 30, 2025, the Group did not hedge foreign currency risks through any long-term contracts, currency borrowings, or other means[80] Contingent Liabilities As of June 30, 2025, the Group had no significant contingent liabilities - As of June 30, 2025, the Group had no significant contingent liabilities[81] Employees As of June 30, 2025, the Group had 3,400 full-time employees, with 951 in sales and marketing and 778 in R&D, attracting and retaining talent through competitive compensation and comprehensive training - As of June 30, 2025, the Group had 3,400 full-time employees, including 951 in sales and marketing and 778 in R&D[82] - The company provides employees with competitive salaries, performance-linked cash incentives, and other motivational measures, along with robust training programs and customized professional development[82] Condensed Interim Consolidated Statement of Comprehensive Loss The condensed interim consolidated statement of comprehensive loss shows a significant reduction in loss for the period and loss attributable to equity holders, driven by a turnaround in operating profit and reduced finance costs Condensed Interim Consolidated Statement of Comprehensive Loss (H1 2025 vs H1 2024) | Indicator | 2025 (RMB Thousand) | 2024 (RMB Thousand) | | :--- | :--- | :--- | | Revenue | 775,467 | 867,434 | | Cost of Sales | (193,211) | (291,529) | | Gross Profit | 582,256 | 575,905 | | Selling and Distribution Expenses | (389,495) | (565,260) | | General and Administrative Expenses | (216,605) | (287,008) | | Operating Profit / (Loss) | 270 | (287,323) | | Finance Costs | (36,354) | (212,986) | | Finance Income | 2,873 | 8,097 | | Loss Before Income Tax | (29,654) | (547,145) | | Income Tax Expense | (17,588) | (22,697) | | Loss for the Period | (47,242) | (569,842) | | Loss Attributable to Equity Holders of the Company | (33,056) | (550,784) | | Total Comprehensive Loss for the Period | (48,422) | (570,538) | | Basic Loss Per Share (RMB) | (0.01) | (0.19) | | Diluted Loss Per Share (RMB) | (0.01) | (0.19) | - Loss for the period significantly narrowed by 91.7% to RMB 47.242 million, and loss attributable to equity holders of the Company narrowed by 94% to RMB 33.056 million[83] - The turnaround from operating loss to profit and a significant decrease in finance costs were the main reasons for the narrowed loss[83] Condensed Interim Consolidated Statement of Financial Position The condensed interim consolidated statement of financial position indicates a slight decrease in total assets, a reduction in total liabilities, and an increase in total equity, with current liabilities exceeding current assets Condensed Interim Consolidated Statement of Financial Position Summary (As of June 30, 2025 vs December 31, 2024) | Indicator | June 30, 2025 (RMB Thousand) | December 31, 2024 (RMB Thousand) | | :--- | :--- | :--- | | Total Non-current Assets | 2,627,719 | 2,553,212 | | Total Current Assets | 4,038,915 | 4,407,424 | | Total Assets | 6,666,634 | 6,960,636 | | Total Equity | 2,007,064 | 1,812,756 | | Total Non-current Liabilities | 510,634 | 635,528 | | Total Current Liabilities | 4,148,936 | 4,512,352 | | Total Liabilities | 4,659,570 | 5,147,880 | | Total Equity and Liabilities | 6,666,634 | 6,960,636 | - Total assets slightly decreased, total liabilities reduced, and total equity increased[86][87] - Current liabilities exceeded current assets by RMB 110.021 million, indicating some short-term liquidity pressure[99] Condensed Interim Consolidated Statement of Changes in Equity The condensed interim consolidated statement of changes in equity shows an increase in total equity attributable to equity holders, primarily due to convertible bond conversions and share-based employee compensation expenses Changes in Share Capital and Reserves Attributable to Equity Holders of the Company (H1 2025) | Indicator | January 1, 2025 (RMB Thousand) | June 30, 2025 (RMB Thousand) | | :--- | :--- | :--- | | Share Capital | 2,298 | 2,470 | | Shares Held for Restricted Share Unit Scheme | (144) | (142) | | Share Premium | 9,449,301 | 9,761,217 | | Equity Component of Convertible Bonds | 76,842 | 1,141 | | Other Reserves | (596,843) | (591,453) | | Accumulated Losses | (7,204,478) | (7,237,534) | | Subtotal | 1,726,976 | 1,935,699 | | Non-controlling Interests | 85,780 | 71,365 | | Total Equity | 1,812,756 | 2,007,064 | - Total equity attributable to equity holders of the Company increased from RMB 1.727 billion as of January 1, 2025, to RMB 1.936 billion as of June 30, 2025[89] - The increase in equity was primarily influenced by convertible bond conversions (increasing share capital and share premium) and share-based employee compensation expenses[89] Condensed Interim Consolidated Statement of Cash Flows The condensed interim consolidated statement of cash flows reflects a shift to net cash outflow from operating activities, increased net cash outflow from investing activities, and a significant reduction in net cash outflow from financing activities Condensed Interim Consolidated Statement of Cash Flows Summary (H1 2025 vs H1 2024) | Indicator | 2025 (RMB Thousand) | 2024 (RMB Thousand) | | :--- | :--- | :--- | | Net Cash (Used in) / Generated from Operating Activities | (28,061) | 29,498 | | Net Cash (Used in) / Generated from Investing Activities | (125,647) | 92,767 | | Net Cash Used in Financing Activities | (35,796) | (562,499) | | Net Decrease in Cash and Cash Equivalents | (189,504) | (440,234) | | Cash and Cash Equivalents at End of Period | 1,004,853 | 1,213,720 | - Net cash flow from operating activities shifted from a net inflow to a net outflow of RMB 28.061 million[92] - Net cash outflow from investing activities increased to RMB 125.647 million, primarily due to increased purchases of property, plant and equipment and loans to related parties[92] - Net cash outflow from financing activities significantly decreased to RMB 35.796 million, mainly due to reduced repurchase of convertible bonds and increased proceeds from bank borrowings[94] Notes to the Condensed Interim Financial Information This section provides detailed notes on the basis of preparation, significant accounting policies, segment information, and other financial disclosures for the interim period 1. General Information Weimob Inc. incorporated in the Cayman Islands in 2018, provides digital commerce and media services to merchants in China, with its shares listed on the HKEX since January 2019 - Weimob Inc. was incorporated as an exempted company in the Cayman Islands on January 30, 2018, primarily engaged in providing digital commerce and media services to merchants in the People's Republic of China[95] - The Company's shares have been listed on the Main Board of The Stock Exchange of Hong Kong Limited since January 15, 2019[96] 2. Basis of Preparation The interim financial information is prepared in accordance with HKAS 34, addressing going concern uncertainties through operational efficiency improvements, refinancing, and potential capital raising - As of June 30, 2025, the Group recorded a net loss of RMB 47.242 million and a net cash outflow from operating activities of RMB 28.061 million[99] - The Group's total borrowings amounted to RMB 2.201659 billion, of which RMB 1.951765 billion is repayable within twelve months, and current liabilities exceeded current assets by RMB 110.021 million[99] - The Group has breached certain bank borrowing covenants totaling RMB 371.75 million, but the lenders have granted temporary waivers for the syndicated loan-related breaches[99] - Management plans to address going concern uncertainties by improving operational efficiency, continuously renewing bank borrowings and obtaining new financing, and raising additional capital through share issuance or convertible bonds if needed[101] 3. Significant Accounting Policies The accounting policies applied are consistent with the 2024 financial statements, with new and revised standards having no material impact on the Group's policies or financial statements - The accounting policies applied are consistent with those applied in the 2024 financial statements, except for the adoption of new and revised standards[103] - Certain new or revised standards are applicable but have no impact on the Group's accounting policies and require no retrospective adjustments[104] - Several new standards and amendments to standards that have been issued but are not yet effective are not expected to have a significant impact on the Group's condensed consolidated financial statements[105] 4. Segment Information The Group operates in two segments: Subscription Solutions (SaaS products, custom software) and Merchant Solutions (value-added services, precision marketing), with performance assessed based on segment revenue and gross profit - The Group's operations are structured into two segments: Subscription Solutions (primarily including standard cloud-hosted SaaS products, customized software, and other software-related services) and Merchant Solutions (primarily including precision marketing services and in-depth operational and marketing services)[107] - The chief operating decision-makers primarily assess the performance of operating segments based on segment revenue and segment gross profit[107] Segment Revenue and Gross Profit (H1 2025 vs H1 2024) | Business Segment | 2025 Revenue (RMB Thousand) | 2025 Gross Profit (RMB Thousand) | 2024 Revenue (RMB Thousand) | 2024 Gross Profit (RMB Thousand) | | :--- | :--- | :--- | :--- | :--- | | Subscription Solutions | 437,836 | 274,073 | 486,779 | 292,350 | | Merchant Solutions | 337,631 | 308,183 | 380,655 | 283,555 | | Total | 775,467 | 582,256 | 867,434 | 575,905 | 5. Revenue The Group's total revenue for H1 2025 was RMB 775.5 million, a 10.6% year-on-year decrease, with subscription solutions accounting for 56.5% and merchant solutions for 43.5% Revenue Analysis by Category (H1 2025 vs H1 2024) | Revenue Category | 2025 (RMB Thousand) | 2024 (RMB Thousand) | | :--- | :--- | :--- | | Subscription Solutions | 437,836 | 486,779 | | Merchant Solutions | 337,631 | 380,655 | | Total Revenue | 775,467 | 867,434 | 6. Expenses by Nature Total expenses by nature for H1 2025 decreased by 30% to RMB 799.311 million, primarily due to significant reductions in employee benefit expenses, outsourcing fees, promotional costs, and depreciation and amortization Total Expenses by Nature (H1 2025 vs H1 2024) | Expense Category | 2025 (RMB Thousand) | 2024 (RMB Thousand) | | :--- | :--- | :--- | | Employee Benefit Expenses | 492,025 | 631,371 | | Outsourcing Service Fees | 77,961 | 102,676 | | Promotion and Advertising Expenses | 68,514 | 127,653 | | Depreciation and Amortization of Intangible Assets and Property, Plant and Equipment | 27,924 | 128,275 | | Server and SMS Fees Related to Subscription Solutions Revenue | 24,557 | 31,248 | | Utilities and Office Expenses | 21,445 | 28,989 | | Depreciation of Right-of-Use Assets | 15,177 | 22,245 | | Broadband and Hardware Costs | 48,300 | 1,763 | | Travel and Entertainment Expenses | 7,920 | 9,020 | | Other Consulting Fees | 3,097 | 5,675 | | Auditor's Remuneration | 2,700 | 2,700 | | Advertising Traffic Costs | – | 42,818 | | Others | 9,691 | 9,364 | | Total | 799,311 | 1,143,797 | - Employee benefit expenses decreased by RMB 139.346 million, primarily due to organizational optimization[111] - Depreciation and amortization of intangible assets and property, plant and equipment decreased by RMB 100.351 million[111] 7. Other Income Other income for H1 2025 was RMB 22.186 million, a slight increase from H1 2024, primarily due to increased government grants Other Income Breakdown (H1 2025 vs H1 2024) | Income Category | 2025 (RMB Thousand) | 2024 (RMB Thousand) | | :--- | :--- | :--- | | Interest Income from Time Deposits and Loans to Related Parties and Third Parties | 12,203 | 12,904 | | Government Grants | 9,448 | 8,136 | | Operating Lease Income | 535 | – | | Total | 22,186 | 21,040 | - Increased government grants were the main reason for the growth in other income[112] 8. Net Other Gains / (Losses) The Group recorded a net other gain of RMB 3.492 million in H1 2025, a significant improvement from a loss of RMB 27.19 million in H1 2024, mainly due to fair value changes in listed equity securities investments and foreign exchange gains Net Other Gains / (Losses) Breakdown (H1 2025 vs H1 2024) | Category | 2025 (RMB Thousand) | 2024 (RMB Thousand) | | :--- | :--- | :--- | | Fair Value Change of Listed Equity Securities Investments | 8,867 | 1,066 | | Net Foreign Exchange Gains / (Losses) | 248 | (19,446) | | Gains from Disposal of Short-term Investments Measured at Fair Value Through Profit or Loss | 147 | 998 | | Loss from Disposal of Financial Assets Measured at Fair Value Through Other Comprehensive Income | – | (890) | | Fair Value Change of Non-current Financial Assets Measured at Fair Value Through Profit or Loss | – | (7,169) | | Fair Value Change of Current Financial Assets Measured at Fair Value Through Profit or Loss | (5,613) | 124 | | Other Net | (157) | (1,873) | | Total | 3,492 | (27,190) | - The shift from a loss in H1 2024 to a gain in H1 2025 was primarily due to fair value changes in listed equity securities investments and foreign exchange gains[113] 9. Finance Costs Finance costs for H1 2025 significantly decreased by 82.9% to RMB 36.354 million, primarily due to a substantial reduction in amortized cost adjustments from the early redemption of 2021 convertible bonds Finance Costs Breakdown (H1 2025 vs H1 2024) | Category | 2025 (RMB Thousand) | 2024 (RMB Thousand) | | :--- | :--- | :--- | | Interest Expense on Borrowings | 34,712 | 35,832 | | Interest Expense on Put Option Liabilities | 3,019 | 2,890 | | Interest Expense on Liability Component of Convertible Bonds | 988 | 25,378 | | Interest Expense on Lease Liabilities | 653 | 1,393 | | Amortized Cost Adjustment Arising from Early Redemption of 2021 Convertible Bonds | – | 137,804 | | Bond Offering Issuance Costs | – | 17,455 | | Less: Interest Capitalized | (3,018) | (7,766) | | Total | 36,354 | 212,986 | - Finance costs significantly decreased by RMB 176.632 million, primarily due to a RMB 137.804 million reduction in amortized cost adjustments resulting from the early redemption of the 2021 convertible bonds[114] 10. Finance Income Finance income for H1 2025 decreased by 64.5% to RMB 2.873 million, primarily due to reduced interest income from bank deposits held for cash management Finance Income Breakdown (H1 2025 vs H1 2024) | Category | 2025 (RMB Thousand) | 2024 (RMB Thousand) | | :--- | :--- | :--- | | Interest Income from Bank Deposits Held for Cash Management | 2,873 | 8,097 | - Finance income decreased by RMB 5.224 million, primarily due to reduced interest income from bank deposits[115] 11. Taxation The Group's taxation includes VAT and income tax, with H1 2025 income tax expense at RMB 17.588 million, and certain Chinese subsidiaries enjoying a preferential 15% corporate income tax rate as high-tech enterprises Value Added Tax The Group primarily pays VAT at rates of 6% and 13%, along with surcharges on VAT payments - The Group primarily pays VAT at 6% and 13%, along with surcharges on VAT payments[116] Income Tax The Group's H1 2025 income tax expense was RMB 17.588 million, primarily contributed by deferred income tax, with current tax being negative Income Tax Expense (H1 2025 vs H1 2024) | Category | 2025 (RMB Thousand) | 2024 (RMB Thousand) | | :--- | :--- | :--- | | Current Tax | (4,096) | (96) | | Deferred Income Tax | 21,684 | 22,793 | | Income Tax Expense | 17,588 | 22,697 | Pillar Two Income Tax The Group operates in jurisdictions where Pillar Two regulations have not yet been enacted or substantially enacted, and it does not anticipate significant Pillar Two income tax risks - The Group operates in jurisdictions where Pillar Two regulations have not yet been enacted or substantially enacted, and it does not anticipate significant Pillar Two income tax risks[118] Cayman Islands Income Tax The Company, incorporated as an exempted company in the Cayman Islands, is not subject to Cayman Islands income tax - The Company, incorporated as an exempted company in the Cayman Islands under the Companies Act of the Cayman Islands, is not subject to Cayman Islands income tax[119] Hong Kong Profits Tax No provision for Hong Kong profits tax was made for H1 2025, as the Group had no assessable income subject to Hong Kong profits tax - No provision for Hong Kong profits tax was made for the six months ended June 30, 2025, as the Group had no assessable income subject to Hong Kong profits tax[120] China Corporate Income Tax The general corporate income tax rate in China is 25%, with certain Chinese subsidiaries enjoying a preferential 15% rate as "High and New Technology Enterprises" for three years - The general corporate income tax rate in China is 25%[121] - Certain Chinese subsidiaries of the Group meet the criteria for "High and New Technology Enterprises" and enjoy a preferential corporate income tax rate of 15% for a period of three years, from 2023 to 2026 or 2024 to 2027[121] China Withholding Tax Dividends distributed by Chinese companies to foreign investors are generally subject to a 10% withholding income tax, with no provision made for H1 2024 and H1 2025 due to accumulated losses in most Chinese subsidiaries - Dividends distributed by Chinese companies to foreign investors from profits earned after January 1, 2008, are generally subject to a 10% withholding income tax, which can be reduced to 5% for eligible Hong Kong investors[122] - No provision for withholding tax was made for the six months ended June 30, 2024, and June 30, 2025, as most subsidiaries incorporated in China recorded accumulated losses during these periods[122] 12. Dividends The Company neither paid nor declared any dividends for the six months ended June 30, 2024, and June 30, 2025 - The Company neither paid nor declared any dividends for the six months ended June 30, 2024, and June 30, 2025[123] 13. Loss Per Share The Group's basic loss per share for H1 2025 was RMB 0.01, a significant improvement from RMB 0.19 in H1 2024, with diluted loss per share being the same due to anti-dilution effects Basic The net loss attributable to equity holders for H1 2025 was RMB 33.056 million, resulting in a basic loss per share of RMB 0.01 Basic Loss Per Share (H1 2025 vs H1 2024) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Net Loss Attributable to Equity Holders of the Company (RMB Thousand) | (33,056) | (550,784) | | Weighted Average Number of Ordinary Shares Issued | 3,579,959,455 | 2,862,176,129 | | Basic Loss Per Share (RMB) | (0.01) | (0.19) | Diluted Diluted loss per share for H1 2024 and H1 2025 was the same as basic loss per share, as potential ordinary shares from convertible bonds and restricted share units were anti-dilutive due to the Group's loss - Diluted loss per share for the six months ended June 30, 2024, and June 30, 2025, was the same as the basic loss per share for the respective periods, as the inclusion of potential dilutive ordinary shares from convertible bonds and restricted share units would be anti-dilutive[126] 14. Prepayments, Deposits and Other Assets Total current prepayments, deposits, and other assets amounted to RMB 1.811778 billion as of June 30, 2025, a decrease from year-end 2024, primarily due to a reduction in other receivables collected on behalf of advertisers Prepayments, Deposits and Other Assets Breakdown (As of June 30, 2025 vs December 31, 2024) | Category | 2025 (RMB Thousand) | 2024 (RMB Thousand) | | :--- | :--- | :--- | | Non-current Deposits - Third Parties | 7,289 | 4,900 | | Current Other Receivables Collected on Behalf of Advertisers - Third Parties | 1,432,502 | 1,596,266 | | Current Prepayments for Advertising Traffic Purchases by the Group | 237,167 | 220,871 | | Current Other Receivables from Related Parties | 197,068 | 182,489 | | Current Recoverable VAT | 131,444 | 130,038 | | Current Prepayments to Other Suppliers | 53,621 | 52,334 | | Current Deposits - Third Parties | 46,833 | 50,503 | | Current Contract Fulfillment Costs | 27,531 | 27,993 | | Current Receivables Related to VAT Refunds | 4,218 | 4,731 | | Current Other Loans Receivable from Third Parties | – | 9,506 | | Current Others | 14,805 | 10,810 | | Less: Impairment Provision for Other Receivables | (333,411) | (336,168) | | Total (Current) | 1,811,778 | 1,949,373 | - Total current prepayments, deposits, and other assets decreased, primarily due to a RMB 163.764 million reduction in other receivables collected on behalf of advertisers[127] 15. Trade and Bills Receivables Total trade and bills receivables amounted to RMB 195.851 million as of June 30, 2025, an increase from year-end 2024, primarily due to increased trade receivables from third parties, with typical credit terms of 30 to 90 days Trade and Bills Receivables Breakdown (As of June 30, 2025 vs December 31, 2024) | Category | 2025 (RMB Thousand) | 2024 (RMB Thousand) | | :--- | :--- | :--- | | Trade Receivables from Third Parties | 243,719 | 210,758 | | Bills Receivable | 4,637 | 3,849 | | Trade Receivables from Related Parties | 4,488 | 3,962 | | Less: Impairment Provision for Trade and Bills Receivables | (56,993) | (52,262) | | Total | 195,851 | 166,307 | - Total trade and bills receivables increased, primarily due to a RMB 32.961 million increase in trade receivables from third parties[128] - The Group typically grants credit terms of 30 to 90 days to its customers[128] 16. Trade and Other Payables Total trade and other payables amounted to RMB 1.979296 billion as of June 30, 2025, a decrease from year-end 2024. Current portion primarily includes advertiser advances, trade payables for advertising traffic, and accrued salaries and benefits Trade and Other Payables Breakdown (As of June 30, 2025 vs December 31, 2024) | Category | 2025 (RMB Thousand) | 2024 (RMB Thousand) | | :--- | :--- | :--- | | Non-current Payables Related to Property, Plant and Equipment | 23,378 | – | | Non-current Payables Related to Business Acquisitions | 2,906 | 2,906 | | Current Advances from Advertisers - Third Parties | 1,000,999 | 908,179 | | Current Trade Payables for Advertising Traffic Purchases | 315,972 | 485,312 | | Current Accrued Salaries and Benefits | 215,931 | 264,191 | | Current Payables Related to Property, Plant and Equipment | 92,728 | 129,790 | | Current Payables Related to Investments and Business Acquisitions | 85,562 | 84,062 | | Current Commissions Payable | 60,939 | 60,517 | | Current Advances from Subscription Solutions Customers - Third Parties | 56,135 | 50,981 | | Current Other Taxes Payable | 46,870 | 104,077 | | Current Trade Payables Related to Subscription Solutions | 38,252 | 48,882 | | Current Deposits | 11,672 | 11,197 | | Current Accrued Auditor's Remuneration | 2,700 | 3,000 | | Current Payables for Purchase of Non-controlling Interests | 1,500 | – | | Current Amounts Due to Related Parties | 5 | 5 | | Current Other Payables and Accrued Expenses | 23,747 | 37,226 | | Total | 1,979,296 | 2,190,325 | - Total current trade and other payables decreased, primarily due to a RMB 169.34 million reduction in trade payables for advertising traffic purchases and a RMB 48.26 million reduction in accrued salaries and benefits[130] - The aging of trade payables is all within 3 months[130] Use of Proceeds This section details the utilization of net proceeds from the 2021 convertible bonds and 2023 placing, primarily for enhancing R&D, upgrading marketing systems, and supplementing working capital Use of Proceeds from 2021 Convertible Bonds As of June 30, 2025, the Company had utilized the net proceeds of USD 275.6 million from the 2021 convertible bonds as planned, focusing on R&D, marketing system upgrades, and working capital - As of June 30, 2025, the Company had utilized the net proceeds of USD 275.6 million from the 2021 convertible bonds as planned[131] Use of Net Proceeds from 2021 Convertible Bonds (As of June 30, 2025) | Purpose | Utilized (USD Million) | Unutilized (USD Million) | Expected Timeframe for Full Utilization | | :--- | :--- | :--- | :--- | | Enhancing the Group's Integrated R&D Capabilities | 128.8 | 18.0 | Before December 31, 2025 | | Upgrading the Group's Marketing System | 44.0 | – | Not Applicable | | Supplementing Funds for Potential Strategic Investments and M&A and Working Capital | 58.8 | – | Not Applicable | | General Corporate Purposes | 44.0 | – | Not Applicable | Use of Proceeds from 2023 Placing As of June 30, 2025, the Company had utilized the net proceeds of HKD 1.4118 billion from the 2023 placing as planned, primarily for marketing system upgrades, working capital, and general corporate purposes, with some R&D funds remaining - As of June 30, 2025, the Company had utilized the net proceeds of HKD 1.4118 billion from the 2023 placing as planned[132] Use of Net Proceeds from 2023 Placing (As of June 30, 2025) | Purpose | Utilized (HKD Million) | Unutilized (HKD Million) | Expected Timeframe for Full Utilization | | :--- | :--- | :--- | :--- | | Enhancing the Group's Integrated R&D Capabilities | – | 156.9 | Before December 31, 2025 | | Upgrading the Group's Marketing System | 313.7 | – | Not Applicable | | Supplementing Working Capital | 470.6 | – | Not Applicable | | General Corporate Purposes | 627.5 | – | Not Applicable | Corporate Governance The Group maintains high corporate governance standards, adhering to the HKEX Listing Rules' Corporate Governance Code, with a noted deviation regarding the combined roles of Chairman and CEO - The Group is committed to maintaining a high standard of corporate governance and has adopted the principles and code provisions of the Corporate Governance Code set out in Appendix C1 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[135] - For the six months ended June 30, 2025, the Company has complied with all applicable code provisions, except for a deviation from code provision C.2.1 (the roles of chairman and chief executive officer should be separate)[135] - Mr. Sun Taoyong serves concurrently as the Chairman of the Board and Chief Executive Officer, which the Board believes is beneficial to the Company and its shareholders as a whole at the current stage of the Group's development[135] Standard Code for Securities Transactions by Directors The Company has adopted the Standard Code for Securities Transactions by Directors of Listed Issuers, and all directors confirmed compliance for the six months ended June 30, 2025 - The Company has adopted the Standard Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 to the Listing Rules. Following specific inquiries to all Directors, each Director has confirmed that they have complied with the required standards set out in the Standard Code for the six months ended June 30, 2025[137] 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 for the six months ended June 30, 2025 - For the six months ended June 30, 2025, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[138] Post-Balance Sheet Events A significant post-balance sheet event includes Weimob Global Limited's subscription of new redeemable preference shares in Genstore Inc. for USD 10 million in July 2025 - On July 21, 2025,