集信国控(08629) - 2025 - 中期业绩

Report Overview and Company Information This section provides an overview of the report, company details, accounting policies, and operating segment information Report Declaration and GEM Characteristics Unaudited H1 2025 interim results released, highlighting GEM market features and directors' full responsibility for accuracy - The company released its unaudited condensed consolidated interim results for the six months ended June 30, 2025[3] - The GEM market is positioned for small and medium-sized companies with high investment risks, requiring investors to understand potential risks[4] - The company's directors jointly and individually bear full responsibility for the accuracy, completeness, and non-misleading nature of the information contained in this announcement[4] Company Basic Information The company provides testing and inspection services in China, established in 2000, listed on GEM in September 2024, and controlled by a state-owned entity - The company primarily engages in testing and inspection services for construction engineering, building materials, food, and agricultural products in China[8] - The company was established on March 28, 2000, completed its shareholding reform in 2023, and was listed on GEM on September 6, 2024[8][29] - The company's direct controlling entity is Xinyi Construction Engineering Quality and Safety Affairs Center, a state-owned enterprise[8] Basis of Preparation and Accounting Policies Interim condensed consolidated financial information is prepared under HKAS 34, consistent with annual statements, with no impact from HKAS 21 (Revised) - The interim condensed consolidated financial information has been prepared in accordance with Hong Kong Accounting Standard 34 'Interim Financial Reporting'[9] - The adoption of HKAS 21 (Revised) 'The Effects of Changes in Foreign Exchange Rates – Lack of Exchangeability' had no impact on the interim condensed consolidated financial information[10][12] Operating Segment Information The Group's operating activities are managed as a single segment, with all business activities, revenue, and non-current assets located in Mainland China - The Group's operations are managed as a single operating segment, and therefore no segment information is presented[13] - All of the Group's revenue and non-current assets are derived from and located in Mainland China[14][15] Financial Performance Summary This section summarizes the Group's financial performance, including profit or loss, comprehensive income, and financial position Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income For H1 2025, revenue grew 9.32% to RMB 24.96 million, but profit and total comprehensive income significantly decreased by 74.29% to RMB 1.89 million due to increased costs, with basic and diluted EPS falling to RMB 0.04 Summary of Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the six months ended June 30) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 24,958 | 22,830 | 9.32% | | Cost of sales | (12,120) | (6,658) | 82.04% | | Gross profit | 12,838 | 16,172 | (20.61%) | | Other income | 362 | 109 | 232.11% | | Administrative expenses | (6,877) | (5,485) | 25.38% | | Research and development expenses | (616) | (280) | 120.00% | | Net impairment losses on financial assets at amortised cost | (1,638) | (127) | 1189.76% | | Profit before tax | 3,279 | 9,817 | (66.59%) | | Income tax expense | (1,391) | (2,474) | (43.86%) | | Profit and total comprehensive income for the period | 1,888 | 7,343 | (74.29%) | | Basic and diluted earnings per share attributable to owners of the parent | RMB 0.04 | RMB 0.31 | (87.10%) | Condensed Consolidated Statement of Financial Position As of June 30, 2025, total net assets increased by 3.20% to RMB 184.51 million, with increases in non-current and current assets, significant growth in trade receivables, and a 52.71% rise in current liabilities Summary of Condensed Consolidated Statement of Financial Position (As of June 30) | Indicator | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Total non-current assets | 76,644 | 67,523 | 13.51% | | Total current assets | 173,171 | 167,522 | 3.37% | | Total current liabilities | 27,355 | 17,914 | 52.71% | | Net current assets | 145,816 | 149,608 | (2.53%) | | Total assets less current liabilities | 222,460 | 217,131 | 2.45% | | Total non-current liabilities | 37,949 | 38,342 | (1.03%) | | Net assets | 184,511 | 178,789 | 3.20% | Business Overview and Market Analysis This section introduces the Group's business, reviews market trends, and analyzes its core competitiveness Business Introduction The Group, a testing and inspection service provider in Maoming, Guangdong, listed on GEM in September 2024, offers comprehensive construction engineering, water conservancy, food, and agricultural testing services, holding qualifications for 42 service categories covering over 3,446 parameters - The Group, a testing and inspection service provider in Maoming, Guangdong, China, was listed on GEM on September 6, 2024[29] - It provides comprehensive construction engineering testing and inspection services, including foundation, infrastructure, building materials, slope and foundation pit monitoring, water conservancy projects, and food and agricultural-related testing[29] - The Group has obtained qualifications for 42 service categories, covering over 3,446 parameters[29] Market Review and Industry Trends National and provincial policies drive the growth of the independent testing market in Western Guangdong, projected to reach RMB 6.5 billion by 2028, creating opportunities in water conservancy and transportation infrastructure, but also intensifying competition and demanding business diversification into new testing areas - National policies support the development of the testing and inspection industry, with the independent testing market in Western Guangdong projected to reach RMB 6.5 billion by 2028, at a CAGR of 12.7%[30][31] - With over 100 construction engineering testing institutions in Western Guangdong, market competition is intense, requiring the Group to adjust its operating strategies[32] - The testing and inspection industry shows a trend towards business diversification, requiring the Group to actively expand into new testing projects and areas such as food, transportation, water conservancy, and fire safety[33] Core Competitiveness Analysis The Group's core competitiveness stems from its brand and credibility as the first state-owned enterprise listed in Western Guangdong, supported by an experienced team, continuous R&D in smart systems and labs, multiple patents, a broad customer base, and diversified services including food, agricultural, and environmental testing - As the first listed company in Xinyi City and the first state-owned enterprise listed in Western Guangdong, the Group enjoys high brand recognition and credibility[34] - It possesses an experienced management team and professional talent, including 12 senior engineers, and has obtained multiple professional qualification certificates[35] - Continuous technological R&D has led to the successful development of the Xince Testing Information Smart Management System V2.0 and the nation's first unattended smart construction laboratory, securing multiple patents and copyrights[36] - Implementing a diversified service strategy, the Group launched food and agricultural product testing services in May 2024, focusing on air environmental testing, and holds qualifications for 42 categories with over 3,446 testing parameters[38] Business Review and Development This section details the Group's main business activities, including new service introductions and updates to its qualifications Main Business Introduction The Group provides comprehensive, high-quality testing and inspection services, expanding into water conservancy engineering, alongside construction engineering and food testing, serving diverse clients with qualifications in 42 service categories, demonstrating strong professionalism and market competitiveness - The Group's main business now includes water conservancy engineering testing services, covering construction engineering testing, construction engineering inspection, water conservancy engineering testing and inspection, and food testing services[39] - With qualifications in 42 different categories of construction engineering testing and inspection services, the Group meets the diverse needs of various client groups[39] Construction Engineering Testing Services Construction engineering testing services provide comprehensive, professional assessments for project quality and safety, covering foundations, infrastructure, materials, structures, and environmental factors, including precise air quality monitoring for pollutants like formaldehyde, benzene, and TVOC - Construction engineering testing services cover foundation, infrastructure and public roads, engineering materials, building structures, and product and material testing[40] - Environmental testing focuses on indoor air quality, accurately monitoring pollutants such as formaldehyde, benzene, and TVOC[40] Construction Engineering Inspection Services Construction engineering inspection services primarily involve slope and foundation pit monitoring, assessing safety, changes, and trends through regular patrols and data analysis to identify risks, enable timely intervention, minimize hazards, and ensure structural integrity for project safety - Construction engineering inspection services primarily provide slope and foundation pit monitoring, assessing safety conditions through measurements and inspections[41] - Monitoring services help identify potential risks early, enabling intervention measures to ensure the structural integrity of slopes and foundation pits[41] Water Conservancy Engineering Testing and Inspection Services On April 16, 2025, the Group acquired a 51% stake in Maoming Yueshui Engineering Testing Co., Ltd. for RMB 9.33 million, expanding into water conservancy engineering testing services, which cover raw materials and intermediate products to ensure structural safety and operational efficiency of critical facilities - On April 16, 2025, the Group subscribed for a 51% equity interest in Yueshui Engineering Testing for RMB 9.33 million, expanding into water conservancy engineering testing and inspection services[42] - Water conservancy engineering testing and inspection services cover raw materials, intermediate products, and material testing, aiming to ensure the structural safety and functional stability of water conservancy projects[42][43] Food and Agricultural Product Testing Business The food and agricultural product testing department, operational since May 2024, provides comprehensive food safety and quality testing, covering physical, chemical, additive, and contaminant analyses using quantitative and rapid methods, and is entrusted by Chinese government administrative departments for municipal and county-level food safety sampling tasks - The food and agricultural product testing department officially commenced operations in May 2024, providing food safety and quality testing services[44] - Services include testing for physical and chemical properties, additives, veterinary drug residues, harmful substances, elements, and toxins, utilizing both quantitative and rapid testing methods[44] - Entrusted by Chinese government administrative departments, the Group undertakes municipal and county-level food safety sampling tasks[44] Business Development and Qualification Updates The Group is expanding new business areas and updating qualifications, with food and agricultural product testing contributing revenue since May 2024 and water conservancy engineering testing expanded via acquisition; it now holds 42 construction engineering testing qualifications and a new certificate in July 2025 covering seven specialized areas, enhancing its professional and market competitiveness - The Group has obtained testing qualifications in three areas, covering 42 categories of construction engineering testing and inspection services with over 3,446 parameters, and the single pile vertical compressive static load testing tonnage for foundation testing services has been increased to 35,000 kN[45] - The food and agricultural product testing department officially commenced operations in May 2024, generating approximately RMB 5.40 million in revenue as of June 30, 2025, and has obtained testing qualifications for 851 parameters[46] - On April 16, 2025, the Group entered into a capital increase agreement to subscribe for a 51% equity interest in Yueshui Engineering Testing, entering the water conservancy engineering testing service industry[47] - On July 22, 2025, the Company obtained the 'Construction Engineering Quality Testing Institution Qualification Certificate' issued by the Department of Housing and Urban-Rural Development of Guangdong Province, covering seven specialized qualifications: building materials and components, main structure and decoration, steel structure, foundation, building energy efficiency, municipal engineering materials, and road engineering[49] Detailed Financial Performance Analysis This section provides an in-depth analysis of the Group's revenue, costs, other income and expenses, net profit, EPS, and key balance sheet changes Revenue Analysis For H1 2025, total revenue grew 9.32% to RMB 24.96 million, driven by an 83.42% increase in food and agricultural product testing and new water conservancy engineering services, while construction engineering testing revenue declined by 10.98%, reflecting business diversification Revenue Breakdown by Service Category (For the six months ended June 30) | Service Category | 2025 (RMB thousands) | 2024 (RMB thousands) | Year-on-year Change (%) | Proportion (2025) | | :--- | :--- | :--- | :--- | :--- | | Construction engineering testing services | 16,682 | 18,739 | (10.98%) | 66.8% | | Construction engineering inspection services | 1,228 | 1,292 | (4.95%) | 4.9% | | Food and agricultural testing services | 5,134 | 2,799 | 83.42% | 20.6% | | Water conservancy engineering testing services | 1,798 | — | New | 7.2% | | Other businesses | 116 | — | New | 0.5% | | Total | 24,958 | 22,830 | 9.32% | 100.0% | Cost of Sales and Gross Profit For H1 2025, cost of sales surged by 82.04% to RMB 12.12 million due to increased depreciation and engineer salaries, leading to a drop in overall gross profit margin from 70.8% to 51.4%, despite high margins in water conservancy engineering testing - Cost of sales increased by 82.04% year-on-year to RMB 12.12 million, primarily due to increased depreciation expenses and higher salaries resulting from an increase in the number of engineers[52] Gross Profit and Gross Profit Margin by Service Category (For the six months ended June 30) | Service Category | 2025 Gross Profit (RMB thousands) | 2025 Gross Profit Margin (%) | 2024 Gross Profit (RMB thousands) | 2024 Gross Profit Margin (%) | Gross Profit Change (%) | Gross Profit Margin Change (percentage points) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Construction engineering testing services | 9,551 | 57.3 | 13,982 | 74.6 | (31.7%) | (17.3) | | Foundation testing services | 7,587 | 78.2 | 12,513 | 88.7 | (39.4%) | (10.5) | | Building materials testing services | (197) | (7.8) | 492 | 20.4 | (140.0%) | (28.2) | | Building structure testing services | 503 | 36.2 | 469 | 57.9 | 7.2% | (21.7) | | Infrastructure and public road testing services | 1,658 | 54.0 | 508 | 36.1 | 226.4% | 17.9 | | Construction engineering inspection services | (6) | (0.5) | 476 | 36.8 | (101.3%) | (37.3) | | Food and agricultural testing services | 1,691 | 32.9 | 1,714 | 61.2 | (1.3%) | (28.3) | | Water conservancy engineering testing services | 1,507 | 83.8 | — | — | — | 83.8 | | Other businesses | 95 | 81.9 | — | — | — | 81.9 | | Total | 12,838 | 51.4 | 16,172 | 70.8 | (20.6%) | (19.4) | - Overall gross profit margin decreased by 19.4 percentage points to 51.4%, primarily attributable to increased employee remuneration and depreciation expenses[55] Other Income and Expenses For H1 2025, other income surged by 232.11% to RMB 0.36 million due to increased interest from cash, while administrative expenses rose by 25.38% to RMB 6.88 million (27.55% of total revenue) due to higher depreciation and professional fees; net impairment losses on financial assets increased to RMB 1.64 million due to trade receivables, and finance costs rose to RMB 0.75 million from lease liability interest - Other income increased to RMB 0.36 million, primarily from interest income due to increased cash and cash equivalents after listing[56] - Administrative expenses increased to RMB 6.88 million, representing 27.55% of total revenue, mainly due to increased depreciation, amortization, and professional fees[57] - Net impairment losses on financial assets at amortised cost increased to RMB 1.64 million, primarily due to an increase in trade receivables[58] - Finance costs increased to RMB 0.75 million, mainly due to increased interest expenses on lease liabilities[59] Income Tax and Net Profit For H1 2025, income tax expense decreased by 43.86% to RMB 1.39 million due to lower profit before tax from increased costs, resulting in a 74.29% decline in profit and total comprehensive income to RMB 1.89 million - Income tax provision decreased to RMB 1.39 million, primarily due to a reduction in total profit caused by increased costs and expenses[60] - Profit and total comprehensive income for the period decreased by 74.29% year-on-year to RMB 1.89 million[61] Earnings Per Share and Dividends For H1 2025, basic and diluted earnings per share attributable to owners of the parent significantly decreased to RMB 0.04 from RMB 0.31, and the Board decided not to recommend any interim dividend - Basic and diluted earnings per share attributable to owners of the parent were RMB 0.04 (2024: RMB 0.31)[25][61] - The Board has decided not to recommend the payment of any interim dividend (2024: nil)[63] Key Balance Sheet Item Changes As of June 30, 2025, key balance sheet items changed, with increases in property, plant, equipment, inventories, deferred tax assets, cash, and trade payables reflecting business expansion and subcontracting; trade receivables significantly grew with extended turnover days due to slower client payments, while right-of-use assets, prepayments, other receivables, and fixed deposits decreased Property, Plant and Equipment As of June 30, 2025, property, plant, and equipment increased to RMB 29.76 million (December 31, 2024: RMB 24.38 million), primarily due to the acquisition of additional machinery for business expansion - Property, plant and equipment increased to RMB 29.76 million (December 31, 2024: RMB 24.38 million), primarily due to the acquisition of additional machinery and equipment for business expansion[62] Right-of-Use Assets As of June 30, 2025, right-of-use assets decreased to RMB 38.11 million (December 31, 2024: RMB 38.66 million), mainly due to depreciation of existing assets by RMB 1.0 million, partially offset by new assets from newly established and acquired subsidiaries of RMB 0.45 million - Right-of-use assets decreased to RMB 38.11 million (December 31, 2024: RMB 38.66 million), primarily due to depreciation of existing assets and new assets from newly acquired subsidiaries[64] Deferred Tax Assets As of June 30, 2025, deferred tax assets increased to RMB 3.78 million (December 31, 2024: RMB 2.30 million), mainly due to increased bad debt provisions and a reduction in one-off listing incentive receivables - Deferred tax assets increased to RMB 3.78 million (December 31, 2024: RMB 2.30 million), primarily due to increased bad debt provisions and a reduction in listing incentive receivables[65] Inventories As of June 30, 2025, inventories increased to RMB 4.08 million (December 31, 2024: RMB 2.98 million), primarily due to assets related to recognized contract costs for testing services, with performance costs increasing by RMB 1.1 million - Inventories increased to RMB 4.08 million (December 31, 2024: RMB 2.98 million), primarily due to an increase in assets related to contract costs for testing services[66] Trade Receivables As of June 30, 2025, trade receivables increased to RMB 65.64 million (December 31, 2024: RMB 48.64 million), with turnover days rising from 257 to 414, primarily due to slower client payments in the first half of 2025 - Trade receivables increased to RMB 65.64 million (December 31, 2024: RMB 48.64 million)[67] - Trade receivables turnover days increased from 257 days to 414 days, primarily due to slower client payment progress[67] Prepayments and Other Receivables As of June 30, 2025, prepayments and other receivables decreased to RMB 5.28 million (December 31, 2024: RMB 7.73 million), primarily because the RMB 3.0 million one-off listing incentive receivable recognized at the end of 2024 was fully received in January 2025 - Prepayments and other receivables decreased to RMB 5.28 million (December 31, 2024: RMB 7.73 million), primarily due to the recovery of listing incentive receivables[68] Fixed Deposits As of June 30, 2025, fixed deposits were zero (December 31, 2024: RMB 10 million), primarily because the 6-month fixed deposit purchased by the Group in December 2024 had matured and been redeemed - Fixed deposits decreased to zero (December 31, 2024: RMB 10 million), primarily due to the maturity and redemption of a 6-month fixed deposit purchased in December 2024[69] Cash and Cash Equivalents As of June 30, 2025, cash and cash equivalents increased to RMB 100.57 million (December 31, 2024: RMB 99.86 million), primarily due to normal cash inflows exceeding outflows - Cash and cash equivalents increased to RMB 100.57 million (December 31, 2024: RMB 99.86 million), primarily due to normal cash inflows exceeding outflows[70] Trade Payables As of June 30, 2025, trade payables increased to RMB 5.71 million (December 31, 2024: RMB 4.83 million) due to increased subcontracting, with turnover days rising from 49 to 79, primarily due to extended settlement periods for service purchases - Trade payables increased to RMB 5.71 million (December 31, 2024: RMB 4.83 million), primarily due to increased subcontracting[71] - Trade payables turnover days increased from 49 days to 79 days, primarily due to extended settlement periods for purchased services[72] Financial Management and Capital Operations This section covers the Group's liquidity, financial resources, capital structure, treasury policies, risk management, significant investments, and use of listing proceeds Liquidity, Financial Resources and Capital Structure The Group maintains a robust financial position with a liquidity ratio of 6.33 (December 31, 2024: 9.35) and a net cash position; the gearing ratio is not applicable due to a net surplus of RMB 77.35 million as of June 30, 2025, with net proceeds from listing of approximately HKD 54.4 million and total cash and cash equivalents of RMB 100.57 million - The Group's current ratio is 6.33 (December 31, 2024: 9.35), maintaining a net cash position[73] - The gearing ratio is not applicable as the Group had a net surplus of RMB 77.35 million as of June 30, 2025[73] - The listing successfully raised net proceeds of approximately HKD 54.4 million[73] Treasury Policy and Risk Management The Group adopts a prudent treasury policy, mitigating credit risk through continuous assessment and monitoring liquidity; it faces foreign exchange translation risk for RMB against HKD and USD without hedging, has no significant contingent liabilities, asset pledges, or interest-bearing debts, and has capital commitments of RMB 2.85 million primarily for property and machinery acquisition - The Group adopts a prudent treasury policy, reducing credit risk through continuous credit assessment and monitoring its liquidity position[74] - It faces foreign exchange translation risk for RMB against HKD and USD, but currently has no foreign currency hedging policy[75][79] - There are no significant contingent liabilities, asset pledges, or interest-bearing debts, and interest rate risk is not material[77][78][80] - Capital commitments amount to RMB 2.85 million, primarily for the acquisition of buildings and machinery and equipment[76] Significant Investments and Mergers & Acquisitions For H1 2025, the Group had no significant investments, but on April 16, 2025, it agreed to subscribe for a 51% equity interest in Yueshui Engineering Testing for RMB 9.33 million through a capital increase agreement - For the six months ended June 30, 2025, the Group had no significant investments[81] - On April 16, 2025, the Group subscribed for a 51% equity interest in Yueshui Engineering Testing for RMB 9,330,000[82] Use of Listing Proceeds The Group's net listing proceeds of approximately HKD 54.4 million are planned for use from September 2024 to December 2026; as of June 30, 2025, most proceeds remain unutilized, with funds for diversified testing services not used as planned, prompting a Board review and separate announcement, while unutilized funds are held as interest-bearing deposits at Bank of China - Net proceeds from the listing of approximately HKD 54.4 million are planned for use from September 2024 to December 2026[87] Planned and Actual Use of Net Listing Proceeds (As of June 30, 2025) | Business Objective | Planned Use as per Prospectus (HKD thousands) | Net Unutilized Proceeds as of June 30, 2025 (HKD thousands) | | :--- | :--- | :--- | | Expansion of construction engineering testing services | 14,950.3 | 13,280.4 | | Consolidate Maoming market position and expand to third- to fifth-tier cities in Western Guangdong | 15,102.3 | 15,102.3 | | Diversification of testing and inspection services (food and agriculture, transportation, fire safety, etc.) | 20,327.9 | (19,838.2) | | Upgrade ERP system | 3,000.4 | 3,000.4 | | General working capital | 1,019.6 | 513.1 | | Total | 54,400.5 | 51,734.4 | - Funds for diversified testing and inspection services were not used as planned, and the Board stated it would review and issue a separate announcement[87] - The unutilized net proceeds have been placed as interest-bearing deposits with Bank of China[89] Prospects and Risks This section outlines the Group's market outlook, potential risks, and strategic business objectives Market Outlook New policies will drive growth in transportation and water conservancy testing markets; the Group will seize these opportunities, focusing on food, agricultural products, transportation, water conservancy, and fire safety testing for diversified development and enhanced competitiveness - Policies such as the 'Highway and Waterway Engineering Quality Testing Management Measures' and 'Water Conservancy Central Budget Investment Special Management Measures' will bring new growth points to the transportation and water conservancy testing markets[90] - The Group will focus on food and agricultural products, transportation engineering, water conservancy engineering, and fire safety testing to achieve diversified development[90] Potential Risks The Group faces three main risks: the impact of China's real estate slowdown (34.25% of H1 2025 revenue from property developers), high operational concentration in Maoming, Guangdong, and complex M&A decision-making and integration risks; the Group has established response departments, optimized strategies, expanded markets, and conducts due diligence to manage M&A risks - Business may be affected by the slowdown in China's real estate development, with 34.25% of H1 2025 revenue derived from property developers, and slowing property investment adversely impacting client businesses[91][92] - The vast majority of business operations are concentrated in Maoming, Guangdong, and are affected by the region's economic conditions, government policies, or business environment developments[93] - Undertaking mergers and acquisitions involves decision-making and integration risks, which the Group will mitigate through due diligence, expert review, and post-investment management[94] Business Objectives The Group has three business objectives: expanding construction engineering testing services (now meeting seven specialized qualifications), strengthening its Maoming market position and expanding to third- to fifth-tier cities in Western Guangdong (entered Gaozhou and Huazhou), and diversifying testing and inspection services into food, agriculture, transportation, and fire safety (achieved transportation Class C assessment, agricultural product testing qualifications, and plans for a fire safety testing subsidiary in H2 2025) - Expand construction engineering testing services, now meeting seven specialized qualification requirements, including building materials and components, main structure and decoration, foundation, building energy efficiency, municipal engineering materials, road engineering, and steel structures[95][96] - Strengthen Maoming's market position and expand service coverage to third- to fifth-tier cities in Western Guangdong, having successfully entered Gaozhou City and Huazhou City[97][98] - Provide diversified testing and inspection services, expanding into food and agriculture, transportation, and fire safety, having passed the transportation Class C assessment, obtained qualifications for 851 agricultural product testing parameters, and plans to establish a fire safety testing subsidiary in H2 2025[100][101] Other Information and Corporate Governance This section covers employee and remuneration policies, post-reporting period events, securities transactions, corporate governance compliance, and competing business interests Employees and Remuneration Policy As of June 30, 2025, the Group had 115 employees (June 30, 2024: 94), with total employee benefit expenses of approximately RMB 8.66 million (2024: RMB 6.76 million); remuneration is based on qualifications, experience, and performance, while discretionary bonuses depend on individual performance, Group financial results, and market conditions - As of June 30, 2025, the Group had 115 employees (June 30, 2024: 94 employees)[85] - Total employee benefit expenses were approximately RMB 8.66 million (2024: RMB 6.76 million)[85] - Remuneration is determined based on qualifications, experience, and performance, while discretionary bonuses depend on work performance, the Group's financial performance, and general market conditions[85] Events After Reporting Period On August 5, 2025, the Group conditionally agreed to acquire 100% equity of Xinyi Rongli Motor Vehicle Testing Co., Ltd. for RMB 12.57 million; no other significant subsequent events occurred from June 30, 2025, to the announcement date - On August 5, 2025, the Group agreed to acquire a 100% equity interest in Xinyi Rongli Motor Vehicle Testing Co., Ltd. for RMB 12.57 million[86] Securities Transactions For the six months ended June 30, 2025, and up to the announcement date, the Company neither purchased, sold, nor redeemed any of its listed securities, nor held any treasury shares - For the six months ended June 30, 2025, and up to the date of this announcement, the Company neither purchased, sold, nor redeemed any of its listed securities, nor held any treasury shares[102] Compliance with Corporate Governance Code The Company complies with all provisions of the GEM Listing Rules' Corporate Governance Code, though the roles of Chairman and CEO are combined under Executive Director Mr. Lai Feng, an arrangement the Board believes enhances responsiveness, efficiency, and effectiveness in strategy and execution, while maintaining balanced power distribution - The Company has adopted and complied with all provisions of the Corporate Governance Code set out in Appendix C1 to the GEM Listing Rules[103] - The roles of Chairman and Chief Executive Officer are not segregated, both held by Executive Director Mr. Lai Feng, an arrangement the Board believes enhances responsiveness, efficiency, and effectiveness[103] Review and Approval Securities transactions by directors, supervisors, and senior management complied with the code of conduct; the Audit Committee reviewed the unaudited interim results for the six months ended June 30, 2025, confirming compliance with accounting standards and GEM Listing Rules, with adequate disclosure, and the financial figures in this announcement were agreed upon by the Group's auditor, Ernst & Young - Securities transactions by directors, supervisors, and senior management complied with the code of conduct, with no breaches[104] - The Audit Committee has reviewed these interim results, deeming them compliant with applicable accounting standards and GEM Listing Rules, with adequate disclosure[105] - The financial statement figures contained in this announcement have been agreed upon by the Group's auditor, Ernst & Young[105] Competing Business Interests As of June 30, 2025, and up to the announcement date, no directors, supervisors, controlling shareholders, or their associates (as defined by GEM Listing Rules) held interests in any business directly or indirectly competing or potentially competing with the Company's business - No directors, supervisors, controlling shareholders, or their associates held interests in any business directly or indirectly competing with the Company's business[106]