叶氏化工集团(00408) - 2025 - 中期业绩

Interim Results Announcement Summary The Group achieved significant growth in profit attributable to shareholders and maintained a healthy gearing ratio, despite economic downturn and intensified competition Key Financial Highlights Despite economic downturn and intensified industry competition, the Group achieved significant growth in profit attributable to shareholders and maintained a healthy gearing ratio through product portfolio optimization and cost control, while also increasing its interim dividend - Group revenue and sales volume decreased by 8% and 14% year-on-year respectively, impacted by the domestic economic downturn, weak consumer sentiment, and intensified industry competition[2] - The Group's overall gross profit margin increased to 24.8%, a 1.7 percentage point rise from the previous year, driven by optimized product portfolio and effective raw material cost control[2] - The solvents associate actively expanded export business, achieving a 2% sales volume increase, but intensified market competition led to a decline in product unit prices, resulting in a 22% decrease in the Group's share of profit to HKD 38.6 million[2] - Profit from the sale of idle land in Shanghai Jinshan resulted in property segment operating profit of HKD 47.2 million (HKD 21.2 million after tax), offsetting some property devaluation impacts[2] - Profit attributable to shareholders increased by 94% year-on-year, reaching HKD 66.1 million[2] - The Group's gearing ratio remained at a healthy 18.0%, providing flexibility for future investments[2] - The Board resolved to declare an interim dividend of HKD 4 cents per share, a 33% increase from the previous year[2] Key Financial Data for the Six Months Ended June 30, 2025 | Metric | June 30, 2025 (HKD Thousand) | June 30, 2024 (HKD Thousand) | % Change | | :--- | :--- | :--- | :--- | | Revenue | 1,430,396 | 1,557,365 | -8% | | Sales Volume (Tons) | 117,000 | 136,000 | -14% | | Profit Attributable to Company Shareholders | 66,112 | 34,057 | +94% | | Earnings Per Share (HK Cents) | 11.8 | 6.0 | +97% | | Interim Dividend Per Share (HK Cents) | 4 | 3 | +33% | | Gearing Ratio* | 18.0% | 18.3% | -0.3 percentage points | Calculated based on net bank borrowings as a percentage of equity attributable to company shareholders Chairman's Statement The Chairman's statement reviews the challenges of geopolitical tensions and weak domestic consumption in the first half, highlighting profit growth and strategic investments, while outlining a cautious yet proactive outlook for the second half Review In the first half, the Group faced multiple challenges including geopolitical tensions, tariff wars, and weak domestic consumption, leading to a decline in revenue; however, through management efforts and cost control, gross profit was maintained, and profit attributable to shareholders significantly increased. Associate Qianxin Chemical actively expanded exports amidst market competition and successfully commissioned new acetic acid and acetate production lines, expected to enhance competitiveness - The operating environment in the first half was uncertain, with geopolitical tensions and US tariff wars negatively impacting the global economy and indirectly affecting the Group's downstream customers' export businesses[5] - Weak private consumption, dragged by falling asset prices and economic uncertainties in the domestic market, led to an 8% year-on-year decrease in the Group's overall revenue to HKD 1.43 billion[5] - Despite a decline in product unit prices due to intense competition, the Group maintained gross profit at the same level as last year, with profit attributable to shareholders increasing by 94% to HKD 66.1 million[5] - The Group's financial position remained robust, with a healthy gearing ratio of 18.0% and an interim dividend of HKD 4 cents per share declared[6] - Associate Qianxin Chemical's solvent business was affected by intense competition and unit price reductions, but sales volume remained largely flat due to expanded exports to ASEAN and other regions, with profit decreasing by approximately 22% year-on-year to HKD 38.6 million[6] - Qianxin Chemical's new 600,000-ton acetic acid plant in Jingmen, Hubei, successfully commenced operations in May, and a new 600,000-ton acetate production line started in July, marking a new milestone in its development, expected to reduce costs and enhance competitiveness[7] Outlook For the second half, the global economy is expected to recover with easing geopolitical tensions and interest rate cuts, and China's economic growth target is achievable. However, domestic consumer sentiment and intense competition issues require time to resolve. The Group will prioritize stability, continue cost reduction, strengthen competitiveness, and actively seek M&A opportunities to expand synergies and business - The global economy is expected to recover in the second half, driven by clearer "reciprocal tariff" policies, easing geopolitical tensions, and an interest rate cut cycle[8] - The Chinese government has strategies to navigate the China-US rivalry, with sustained domestic economic growth and achievable annual growth targets[8] - Improved domestic consumer sentiment and alleviation of intense competition are two key factors affecting the Group's business, expected to be challenging to resolve in the short term, though the government has introduced targeted solutions[8] - The Group will prioritize stability, intensify cost reduction efforts, strengthen its competitiveness, and actively seek M&A targets to expand synergies and business, laying the foundation for "Yip's Centennial"[8] CEO's Report The CEO's report details the Group's resilience amidst economic slowdown and market competition, emphasizing effective cost control, profit growth, and a strategic vision for platform development through new products and M&A Review In the first half, the Group faced challenges from China's economic slowdown, reduced consumer sentiment, intense industry competition, and US tariff policies. Despite revenue decline, effective gross margin improvement and expense control led to profit growth, maintaining healthy cash flow and gearing ratios - In the first half, the Group faced a volatile economic environment, including slow economic development in China, reduced consumer sentiment, intense competition, and uncertainties in US tariff policies[10] - The Group's revenue declined, but significant improvements in gross margin and expense control led to profit growth compared to the previous year[10] - The Group's cash flow and gearing ratio both remained at healthy levels[10] Key Business Summary | Metric | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Revenue | HKD 1.43 billion | HKD 1.557 billion | Down 8% | | Sales Volume (Tons) | 117,000 | 136,000 | Down 14% | | Overall Gross Profit Margin | 24.8% | 23.1% | Up 1.7 percentage points | | Share of Profit from Solvents Associate | HKD 38.6 million | HKD 49.45 million | Down approx. 22% | | Property Segment Operating Profit | HKD 47.2 million | HKD 0.101 million | Significant Growth | | Profit Attributable to Shareholders | HKD 66.1 million | HKD 34.06 million | Up 94% | | Gearing Ratio (June 30, 2025) | 18.0% | 18.3% | Down 0.3 percentage points | Outlook The Group will uphold its vision of being a "Fine Chemical Enterprise Development Platform" by developing new product lines and strictly controlling operating costs to consolidate its market position in existing businesses. Concurrently, it will actively seek strategic investment and acquisition opportunities with synergies to accelerate platform development and create long-term value for shareholders in a volatile environment - The Group will build upon its legacy, leveraging its controlling shareholder structure, Hong Kong listed company status, strong reputation, and operational experience in China to create a "Fine Chemical Enterprise Development Platform"[18] - Management will continue to improve and consolidate the market leading positions of the coatings, inks, and lubricants businesses by developing new product lines and strictly controlling operating costs[19] - The Group actively seeks strategic investment and acquisition opportunities with synergies to accelerate platform development and deliver long-term benefits to shareholders[19] Business Review and Outlook This section reviews the performance of coatings, inks, and lubricants businesses, noting varied impacts from market conditions, and outlines strategic initiatives for product development, market expansion, and associate investments Coatings Business Coatings business sales volume decreased by 20% and revenue fell by 7%. Architectural coatings were impacted by the sluggish real estate market, but industrial coatings performed well, especially plastic coatings, benefiting from the rise of Chinese toy brands, achieving revenue and profit growth. The coatings business gross profit margin improved to 28.8%, turning losses into profits. The Group plans to establish a production base in Vietnam to accelerate its Southeast Asian expansion Key Data for Coatings Business | Metric | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Sales Volume (Tons) | 79,000 | 98,750 | Down 20% | | Revenue | HKD 676 million | HKD 731 million | Down 7% | | Gross Profit Margin | 28.8% | 25.5% | Up 3.3 percentage points | | Segment Result | HKD 19.1 million | (HKD 10.08 million) | Turned Loss to Profit | - Architectural coatings business revenue declined due to the prolonged sluggishness in China's real estate market[12] - Industrial coatings developed well, particularly the "Hengchang" brand plastic coatings business, which achieved good growth benefiting from the rise of Chinese toy brands and new product development[12] - The Group plans to establish a production base in Vietnam to accelerate its Southeast Asian expansion, serve local industrial coatings customers, and mitigate future trade war impacts[13] Inks Business Inks business sales volume remained flat, but revenue decreased by 8% due to lower selling prices. Despite gross profit margin improving to 20.9% through efficient management, segment profit fell by 64% year-on-year due to increased bad debt provisions from expanded credit risk for individual customers. The Group will continue to manage bad debt risks and leverage "Bauhinia" inks' leading position in the food packaging industry to develop new product lines such as electronic inks and inkjet Key Data for Inks Business | Metric | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Sales Volume (Tons) | 28,000 | 28,000 | Flat | | Revenue | HKD 591 million | HKD 644 million | Down 8% | | Gross Profit Margin | 20.9% | 20.0% | Up 0.9 percentage points | | Segment Profit | HKD 11.3 million | HKD 31.17 million | Down 64% | - The inks business faced challenges from intense industry competition, with flat sales volume but declining revenue due to lower selling prices[14] - The management team efficiently managed raw material and operating costs, achieving a gross profit margin of 20.9%[14] - Increased bad debt provisions due to expanded credit risk for individual customers led to a significant decline in segment profit[14] - The Group will continue to manage customer bad debt risks and leverage "Bauhinia" inks' market leadership in the food packaging industry to develop new product lines such as electronic inks and inkjet[15] Lubricants Business Lubricants business revenue decreased by 7%, gross profit margin fell by 1.7 percentage points, and profit decreased by 12% year-on-year. Automotive lubricant demand remained flat due to economic impacts. The Group will continue to steadily grow automotive lubricant sales and increase resources for R&D of industrial oils in niche markets, aiming for future growth Key Data for Lubricants Business | Metric | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Revenue | HKD 160 million | HKD 172 million | Down 7% | | Gross Profit Margin | 21.9% | 23.6% | Down 1.7 percentage points | | Profit | HKD 6.1 million | HKD 6.95 million | Down 12% | - Demand for automotive lubricants remained largely flat due to overall negative economic conditions[16] - Management's investment in the expansion of specialty industrial oils is expected to make them a future growth highlight[16] - The Group will continue to steadily grow automotive lubricant sales, expand into third and fourth-tier cities, and increase resources for R&D of industrial oils in niche markets[16] Investment in Solvents Associate The Group holds a 24% interest in Qianxin Chemical, whose sales volume slightly increased by 2%, but due to declining selling prices, it contributed HKD 38.6 million to the Group. In the first half, Qianxin Chemical completed its acetic acid plant in Hubei, with new capacities of 600,000 tons of acetic acid and 600,000 tons of acetate expected to be gradually released, potentially leading to greater economies of scale and sustained enhancement of its profit contribution to the Group - The Group holds a 24% effective interest in Qianxin Chemical, the world's largest acetate solvent company[17] - The solvents associate's sales volume slightly increased by 2%, but due to declining selling prices, it contributed HKD 38.6 million to the Group[17] - The associate completed the construction of its acetic acid plant in Hubei, with new capacities of 600,000 tons of acetic acid and 600,000 tons of acetate expected to be gradually released in the second half, potentially leading to greater economies of scale[17] Financial Review The financial review highlights the Group's stable liquidity, healthy gearing ratio, and prudent financial management, including foreign exchange risk mitigation and a focus on sustainable growth through potential investments Liquidity and Financial Resources The Group maintained a healthy and low gearing ratio of 18.0% and actively managed foreign exchange risks. Net cash outflow from operating activities decreased in the first half, primarily due to a lower increase in trade receivables. Total bank borrowings decreased, but net bank borrowings slightly increased. The Group had no significant expenditures or investments but is actively seeking potential investment and acquisition opportunities for sustainable growth Key Data for Liquidity and Financial Resources | Metric | June 30, 2025 (HKD Thousand) | June 30, 2024 (HKD Thousand) | Change | | :--- | :--- | :--- | :--- | | Gearing Ratio | 18.0% | 18.3% | Down 0.3 percentage points | | Net Cash Used in Operating Activities | (48,116) | (91,075) | Outflow Decreased | | Total Bank Borrowings | 1,103,146 | 1,226,713 (Dec 31, 2024) | Decreased | | Net Bank Borrowings | 705,000 | 632,336 (Dec 31, 2024) | Increased | | Total Bank Facilities | 2,819,931 | - | - | - The RMB exchange rate increased by 3.4%, and the Group prudently managed foreign exchange risks by increasing RMB loans and other measures[22] - There were no significant expenditures or investments in the first half, with medium-to-long-term loans accounting for 41% of all bank loans[24] - The Group entered into interest rate swap and cross-currency swap agreements with banks to hedge against interest rate and exchange rate fluctuation risks and reduce financing costs[24] - The Group has bank facilities totaling HKD 2,819,931,000, with 51% denominated in HKD and 49% in RMB[25] - The Group holds no pledged assets or significant contingent liabilities and is actively seeking potential investment and acquisition opportunities for sustainable growth[25] Human Resources This section details the Group's employee numbers and commitment to human resource development, emphasizing training, talent retention, and competitive compensation to foster a skilled workforce Staff Numbers and Management As of June 30, 2025, the Group had 2,151 employees, predominantly from mainland China. The Group highly values human resource management and development, enhancing employee skills through internal and external training, education sponsorship programs, and job rotations. The Group offers a challenging work environment and diverse incentive mechanisms, reviewing remuneration and reward policies based on market trends to attract and retain talent Employee Distribution | Region | Number of Employees | | :--- | :--- | | Mainland China | 2,080 | | Hong Kong | 60 | | Other Countries | 11 | | Total | 2,151 | - The Group encourages employee self-improvement and enhances work skills and performance through internal and external training courses, job rotations, and education sponsorship programs[27] - The Group regularly identifies employees with development potential, formulates development plans, and actively recruits outstanding management talent externally[27] - The Group offers competitive remuneration and benefits, including basic salary and performance-based bonuses, to attract and retain talent[28] Corporate Governance and Other Information This section confirms the Company's compliance with corporate governance codes, details the Audit Committee's role, and provides information on securities transactions by directors and announcement publications Purchase, Sale or Redemption of Listed Securities 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. At period-end, the Company held 10,024,000 treasury shares - For the six months ended June 30, 2025, neither the Company nor its subsidiaries purchased, sold, or redeemed any listed securities[29] - As of June 30, 2025, the Company held 10,024,000 treasury shares[30] Corporate Governance For the six months ended June 30, 2025, the Company complied with the code provisions in Part 2 of the Corporate Governance Code as set out in Appendix C1 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited - The Company complied with the code provisions in Part 2 of the Corporate Governance Code as set out in Appendix C1 to the HKEX Listing Rules[31] Audit Committee The Audit Committee comprises three independent non-executive directors, chaired by Mr. Koo Yee Tao. Its primary responsibilities include reviewing financial information, overseeing financial reporting systems, risk management, and internal control procedures, and monitoring the relationship with external auditors. The Committee has reviewed the Group's unaudited interim financial report for the six months ended June 30, 2025 - The Audit Committee comprises three independent non-executive directors: Mr. Koo Yee Tao (Chairman), Mr. Ho Pak Chuen, and Ms. Yau Ching Man[32] - Key responsibilities include reviewing the Group's financial information, overseeing financial reporting systems, risk management and internal control procedures, and monitoring the relationship with external auditors[32] - The Audit Committee reviewed the Group's unaudited interim financial report for the six months ended June 30, 2025, on August 19, 2025[32] Standard Securities Dealing Code for Directors of Listed Issuers The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 of the Listing Rules and confirmed that all directors complied with the code for the six months ended June 30, 2025 - The Company adopted the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 of the Listing Rules[33] - All directors confirmed compliance with the required standards of the Model Code for the six months ended June 30, 2025[33] Unaudited Interim Results This section presents the condensed consolidated financial statements, including the statement of profit or loss, financial position, and cash flows, along with detailed notes on accounting policies and segment information Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income For the six months ended June 30, 2025, the Group's revenue was HKD 1,430,396 thousand, and profit for the period was HKD 64,910 thousand, a significant increase from the prior year. Profit attributable to company shareholders was HKD 66,112 thousand, with basic earnings per share of HKD 11.8 cents Summary of Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income | Metric | June 30, 2025 (HKD Thousand) | June 30, 2024 (HKD Thousand) | | :--- | :--- | :--- | | Revenue | 1,430,396 | 1,557,365 | | Gross Profit | 354,294 | 359,244 | | Profit Before Tax | 100,953 | 39,337 | | Profit for the Period | 64,910 | 33,551 | | Profit for the Period Attributable to Company Shareholders | 66,112 | 34,057 | | Earnings Per Share (Basic) | 11.8 HK Cents | 6.0 HK Cents | Condensed Consolidated Statement of Financial Position As of June 30, 2025, the Group's total assets less current liabilities were HKD 4,197,676 thousand, and net assets were HKD 3,940,304 thousand. Non-current assets primarily included property, plant and equipment, investment properties, and interests in associates. Trade receivables constituted a significant portion of current assets. Current liabilities mainly comprised trade and other payables and borrowings due within one year Summary of Condensed Consolidated Statement of Financial Position | Metric | June 30, 2025 (HKD Thousand) | Dec 31, 2024 (HKD Thousand) | | :--- | :--- | :--- | | Non-current Assets | 3,721,634 | 3,716,713 | | Current Assets | 2,406,606 | 2,359,065 | | Current Liabilities | 1,930,564 | 1,927,090 | | Net Current Assets | 476,042 | 431,975 | | Net Assets | 3,940,304 | 3,811,482 | | Equity Attributable to Company Shareholders | 3,917,787 | 3,789,127 | | Trade Receivables (Net of Provision) | 1,400,192 | 1,308,119 | | Borrowings - Due within One Year | 891,546 | 932,313 | | Borrowings - Due after One Year | 211,600 | 294,400 | Condensed Consolidated Statement of Cash Flows For the six months ended June 30, 2025, the Group's net cash used in operating activities was HKD 48,116 thousand, net cash used in investing activities was HKD 2,971 thousand, and net cash used in financing activities was HKD 159,385 thousand. Cash and cash equivalents at period-end were HKD 394,457 thousand, a decrease from the beginning of the period Summary of Condensed Consolidated Statement of Cash Flows | Metric | June 30, 2025 (HKD Thousand) | June 30, 2024 (HKD Thousand) | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | (48,116) | (91,075) | | Net Cash (Used in) Generated from Investing Activities | (2,971) | 172,089 | | Net Cash Used in Financing Activities | (159,385) | (253,242) | | Net Decrease in Cash and Cash Equivalents | (210,472) | (172,228) | | Cash and Cash Equivalents at End of Period | 394,457 | 431,177 | Notes This section provides detailed notes on the basis of preparation, principal accounting policies, revenue and segment information, other income and gains/losses, profit before tax, taxation, dividends, earnings per share, movements in property, plant and equipment and investment properties, trade receivables, and trade and other payables Basis of Preparation The condensed consolidated financial information is prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" issued by the Hong Kong Institute of Certified Public Accountants and the applicable disclosure requirements of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited - The condensed consolidated financial information is prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" and the HKEX Listing Rules[41] Principal Accounting Policies The condensed consolidated financial information is prepared on a historical cost basis, except for investment properties and certain financial instruments measured at fair value. The accounting policies and methods of computation adopted for this period are consistent with those in the annual consolidated financial report for the year ended December 31, 2024 - The condensed consolidated financial information is prepared on a historical cost basis, with investment properties and certain financial instruments measured at fair value[42] - The accounting policies and methods of computation adopted for this period are consistent with those in the annual consolidated financial report for the year ended December 31, 2024[42] Revenue and Segment Information Group revenue represents amounts received and receivable from the sale of goods and rendering of services (net of discounts and value-added tax) and rental income during the period. By customer location, mainland China remains the primary market, but overseas (mainly Southeast Asian) market revenue increased. The Group reports operating segment information by four business segments: coatings, inks, lubricants, and property Geographical Market Revenue by Customer Location | Region | 2025 (HKD Thousand) | 2024 (HKD Thousand) | | :--- | :--- | :--- | | Mainland China | 1,378,350 | 1,513,038 | | Hong Kong | 29,256 | 30,123 | | Overseas (mainly Southeast Asian countries) | 22,790 | 14,204 | | Total | 1,430,396 | 1,557,365 | - The Group's reportable segments include four business divisions: coatings, inks, lubricants, and property[46] - Segment results represent profit earned by each segment before unallocated share of results of associates, unallocated income, and unallocated expenses (mainly central administrative expenses, directors' emoluments, and finance costs)[47] H1 2025 Segment Revenue and Results | Segment | Revenue (HKD Thousand) | Segment Result (HKD Thousand) | | :--- | :--- | :--- | | Coatings | 676,413 | 19,120 | | Inks | 590,661 | 11,315 | | Lubricants | 160,274 | 6,093 | | Property | 3,048 | 47,226 | | Total Segments | 1,427,348 | 83,754 | | Share of Results of Associates | - | 38,599 | | Profit Before Tax | - | 100,953 | H1 2024 Segment Revenue and Results | Segment | Revenue (HKD Thousand) | Segment Result (HKD Thousand) | | :--- | :--- | :--- | | Coatings | 730,974 | (10,076) | | Inks | 644,371 | 31,171 | | Lubricants | 172,285 | 6,949 | | Property | 5,305 | 101 | | Total Segments | 1,547,630 | 28,145 | | Share of Results of Associates | - | 49,449 | | Profit Before Tax | - | 39,337 | Other Income and Other Gains and Losses The Group's other income primarily includes interest income, government grants, dividend income from financial assets, and commissioned product processing income. Regarding other gains and losses, the period recorded a gain of HKD 35,001 thousand, mainly due to a gain of HKD 60,023 thousand from the disposal of land use rights, but offset by a significant increase of HKD 25,487 thousand in expected credit loss provisions for trade and other receivables, and a fair value loss of HKD 9,773 thousand on investment properties Other Income | Item | 2025 (HKD Thousand) | 2024 (HKD Thousand) | | :--- | :--- | :--- | | Interest Income | 7,324 | 14,043 | | Government Grants | 6,926 | 7,979 | | Dividend Income from Financial Assets at FVTPL | 11,075 | 11,591 | | Commissioned Product Processing Income | 10,751 | – | | Others | 5,757 | 8,668 | | Total | 41,833 | 42,281 | Other Gains (Losses) | Item | 2025 (HKD Thousand) | 2024 (HKD Thousand) | | :--- | :--- | :--- | | Provision for Expected Credit Losses on Trade and Other Receivables | (25,487) | (6,048) | | Fair Value Loss on Investment Properties | (9,773) | (2,737) | | Net Exchange Gains (Losses) from Foreign Currency Balances and Transactions | 12,344 | (7,754) | | Gain on Disposal of Land Use Rights | 60,023 | – | | Total | 35,001 | (21,113) | - During the period, a provision for expected credit losses of HKD 25,487 thousand was made for trade and other receivables, of which HKD 20,454 thousand was a specific loss provision for an individual customer[52] - The Group completed the disposal of idle land use rights in Shanghai Jinshan in June 2025, recognizing a pre-tax gain of HKD 60,023 thousand and receiving proceeds of HKD 20,817 thousand[53] Profit Before Tax For the six months ended June 30, 2025, the Group's profit before tax was HKD 100,953 thousand, primarily after deducting recognized cost of inventories, amortization of intangible assets, and depreciation of property, plant and equipment (net of capitalized portion) Components of Profit Before Tax | Item | 2025 (HKD Thousand) | 2024 (HKD Thousand) | | :--- | :--- | :--- | | Cost of Inventories Recognized as Cost of Sales | 1,076,102 | 1,198,121 | | Amortization of Intangible Assets | 1,015 | 1,016 | | Depreciation of Property, Plant and Equipment (Net of Capitalized Portion) | 19,510 | 22,800 | | Profit Before Tax | 100,953 | 39,337 | Taxation Total taxation for the period was HKD 36,043 thousand, primarily comprising PRC enterprise income tax and land appreciation tax. PRC subsidiaries are subject to a 25% enterprise income tax rate, with some high-tech or western encouraged industry enterprises enjoying a preferential rate of 15%. Hong Kong profits tax is calculated at 16.5% with a two-tiered profits tax regime. Withholding tax mainly applies to PRC interest income and dividend distributions Components of Taxation | Item | 2025 (HKD Thousand) | 2024 (HKD Thousand) | | :--- | :--- | :--- | | Current Tax - PRC Enterprise Income Tax | 10,235 | 4,270 | | Current Tax - Land Appreciation Tax | 26,674 | – | | Current Tax - Withholding Tax | 52 | 59 | | Current Tax - Overseas | 270 | 200 | | Over-provision in Prior Years - PRC | (940) | (1,272) | | Deferred Tax Expense (Credit) | (248) | 2,529 | | Total | 36,043 | 5,786 | - Hong Kong profits tax is calculated at 16.5% of estimated assessable profits and operates under a two-tiered system[56] - PRC subsidiaries are subject to an enterprise income tax rate of 25%, with some high-tech enterprises or western encouraged industry enterprises enjoying a preferential rate of 15%[57] - Withholding tax primarily refers to interest income (7%) and dividend distributions (10%) sourced from mainland China; a 5% dividend withholding tax rate may apply to Hong Kong resident companies directly owning 25% of the equity[58] Dividends For the six months ended June 30, 2025, the Group declared and paid a final dividend of HKD 11 cents per share for the year 2024, totaling approximately HKD 61,431 thousand. The Board resolved to declare an interim dividend of HKD 4 cents per share for the six months ended June 30, 2025, totaling approximately HKD 22,338 thousand (excluding treasury shares), payable on or about October 31, 2025 Dividend Distribution Details | Dividend Type | Payment Date | Amount Per Share (HK Cents) | Total Amount (HKD Thousand) | | :--- | :--- | :--- | :--- | | 2024 Final Dividend | July 2025 | 11 | 61,431 | | 2023 Final Dividend | July 2024 | 10 | 56,848 | | H1 2025 Interim Dividend | On or about Oct 31, 2025 | 4 | 22,338 | | H1 2024 Interim Dividend | - | 3 | - | Earnings Per Share Basic earnings per share attributable to company shareholders are calculated based on the profit for the period and the weighted average number of shares. For the six months ended June 30, 2025, basic earnings per share were HKD 11.8 cents, with a weighted average of 558,460 thousand shares (adjusted for treasury shares). Diluted earnings per share are not presented as there are no issued potential ordinary shares Basic Earnings Per Share Calculation | Item | 2025 (HKD Thousand/Thousand Shares) | 2024 (HKD Thousand/Thousand Shares) | | :--- | :--- | :--- | | Profit for the Period Attributable to Company Shareholders | 66,112 | 34,057 | | Weighted Average Number of Shares for Basic EPS Calculation | 558,460 | 568,484 | | Basic Earnings Per Share | 11.8 HK Cents | 6.0 HK Cents | - The weighted average number of shares used for calculating basic earnings per share has been adjusted for 10,024,000 treasury shares[63] - Diluted earnings per share are not presented as there are no issued potential ordinary shares[63] Movements in Property, Plant and Equipment and Investment Properties In the first half, the Group spent approximately HKD 25,157 thousand on acquiring property, plant and equipment, and recognized right-of-use assets of HKD 1,428 thousand from new lease agreements. The Group disposed of investment properties with a carrying amount of HKD 1,278 thousand and recognized a net fair value decrease of HKD 9,773 thousand on investment properties Movements in Property, Plant and Equipment and Investment Properties | Item | H1 2025 (HKD Thousand) | H1 2024 (HKD Thousand) | | :--- | :--- | :--- | | Acquisition of Property, Plant and Equipment | 25,157 | 26,462 | | Recognition of Right-of-Use Assets (Lease Agreements) | 1,428 | 4,859 | | Cash Consideration from Disposal of Investment Properties | 1,278 | Nil | | Net Fair Value Decrease on Investment Properties | 9,773 | 2,737 | Trade Receivables As of June 30, 2025, the Group's trade receivables (net of credit loss provisions) amounted to HKD 1,400,192 thousand. Ageing analysis shows that zero to three-month receivables constitute the largest portion, with the Group offering credit terms of 30 to 90 days, and longer terms for large or long-term customers with good payment records Trade Receivables and Ageing Analysis | Item | June 30, 2025 (HKD Thousand) | Dec 31, 2024 (HKD Thousand) | | :--- | :--- | :--- | | Trade Receivables (from Customer Contracts) | 1,490,864 | 1,372,606 | | Less: Provision for Credit Losses | (90,672) | (64,487) | | Net Trade Receivables | 1,400,192 | 1,308,119 | | Ageing Analysis (Net): | | | | 0-3 Months | 710,714 | 609,804 | | 4-6 Months | 193,820 | 252,477 | | Over 6 Months | 167,768 | 130,857 | | Total | 1,072,302 | 993,138 | - The Group offers credit terms ranging from 30 to 90 days to trade customers, with longer terms potentially granted to large or long-term customers with good payment records[66] Trade and Other Payables As of June 30, 2025, the Group's total trade and other payables amounted to HKD 880,764 thousand, primarily comprising trade payables, bills payable, and other payables. Ageing analysis of trade payables indicates that most are due within zero to three months Components of Trade and Other Payables | Item | June 30, 2025 (HKD Thousand) | Dec 31, 2024 (HKD Thousand) | | :--- | :--- | :--- | | Trade Payables | 419,115 | 418,549 | | Bills Payable | 257,457 | 284,187 | | Other Payables and Accrued Expenses | 204,192 | 222,436 | | Total | 880,764 | 925,172 | | Ageing Analysis of Trade Payables: | | | | 0-3 Months | 368,629 | 358,797 | | 4-6 Months | 45,304 | 55,646 | | Over 6 Months | 5,182 | 4,106 | | Total | 419,115 | 418,549 | Dividend Distribution and Share Registration This section announces the interim dividend declaration and payment details, along with the dates for the closure of the register of members to determine dividend entitlement Interim Dividend Distribution The Board resolved to declare an interim dividend of HKD 4 cents per share (H1 2024: HKD 3 cents per share) for the six months ended June 30, 2025, payable on or about October 31, 2025, to shareholders registered on the Company's register of members on September 24, 2025 - The Board resolved to declare an interim dividend of HKD 4 cents per share (H1 2024: HKD 3 cents per share) for the six months ended June 30, 2025[68] - The interim dividend will be paid on or about October 31, 2025, to shareholders registered on the Company's register of members on September 24, 2025[68] Closure of Register of Members To determine eligibility for the interim dividend, the Company's register of members will be closed from September 19, 2025, to September 24, 2025 (both dates inclusive). All transfer forms, accompanied by the relevant share certificates, must be lodged with the Company's Hong Kong Share Registrar, Tricor Investor Services Limited, by 4:30 p.m. on September 18, 2025 - The Company's register of members will be closed from September 19, 2025, to September 24, 2025, to determine eligibility for the interim dividend[69] - To qualify for the interim dividend, all transfer forms, accompanied by relevant share certificates, must be lodged with the Company's Hong Kong Share Registrar, Tricor Investor Services Limited, by 4:30 p.m. on September 18, 2025[69] Company Information This section provides details on the publication of the announcement and interim report, along with the current composition of the Board of Directors Announcement Publication This announcement has been published on the HKEX website (http://www.hkex.com.hk) and the Company's website (http://www.yipschemical.com). The Company's 2025 interim report will be published on the HKEX and Company websites in due course - This announcement has been published on the HKEX website and the Company's website[70] - The Company's 2025 interim report will be published on the HKEX and Company websites in due course[70] Board of Directors As of the date of this announcement, the Board of Directors includes Non-executive Directors Mr. Yip Chi Shing (Chairman), Mr. Ho Pak Chuen, Mr. Koo Yee Tao*, Ms. Yau Ching Man*, and Executive Directors Mr. Yip Tsz Hin (Vice Chairman), Mr. Yip Kwan (Chief Executive Officer), and Mr. Ho Sai Ho (Chief Financial Officer). (* denotes Independent Non-executive Directors) - The Board of Directors includes Non-executive Directors Mr. Yip Chi Shing (Chairman), Mr. Ho Pak Chuen*, Mr. Koo Yee Tao*, and Ms. Yau Ching Man*[71] - Executive Directors include Mr. Yip Tsz Hin (Vice Chairman), Mr. Yip Kwan (Chief Executive Officer), and Mr. Ho Sai Ho (Chief Financial Officer)[71] - Mr. Ho Pak Chuen, Mr. Koo Yee Tao, and Ms. Yau Ching Man are Independent Non-executive Directors[71]