中庆股份(01855) - 2025 - 中期业绩

Unaudited Interim Results Announcement This section presents the unaudited interim results announcement for the six months ended June 30, 2025, including comparative figures for 2024 Announcement Details The Board of Directors of Zhongqing Environment Co., Ltd. (Stock Code: 1855) announces the unaudited interim results for the six months ended June 30, 2025, with comparative figures for the six months ended June 30, 2024 - This announcement publishes the unaudited interim results of Zhongqing Environment Co., Ltd. for the six months ended June 30, 2025[2] Consolidated Statement of Profit or Loss This section provides an overview of the company's financial performance, highlighting changes in revenue, gross profit, and profit for the period Profit or Loss Overview For the six months ended June 30, 2025, the company experienced a slight decrease in revenue, with both gross profit and profit for the period declining, reflecting macroeconomic pressures and increased industry competition Consolidated Statement of Profit or Loss Key Data (Six Months Ended June 30) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 761,932 | 775,648 | -1.8% | | Cost of sales | (610,937) | (600,287) | 1.8% | | Gross profit | 150,995 | 175,361 | -13.9% | | Operating profit | 73,889 | 72,036 | 2.6% | | Profit before tax | 40,483 | 47,141 | -14.1% | | Profit for the period | 36,332 | 43,412 | -16.3% | | Profit attributable to equity holders of the Company | 29,333 | 34,259 | -14.4% | | Basic and diluted earnings per share (RMB cents) | 4 | 4 | 0.0% | Consolidated Statement of Profit or Loss and Other Comprehensive Income This section details the total comprehensive income for the period, reflecting changes from profit for the period and other comprehensive income components Comprehensive Income Overview For the six months ended June 30, 2025, total comprehensive income for the period decreased to RMB 35,592 thousand from RMB 43,916 thousand in the prior year, primarily due to reduced profit for the period and changes in other comprehensive income Consolidated Statement of Comprehensive Income Key Data (Six Months Ended June 30) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Profit for the period | 36,332 | 43,412 | -16.3% | | Other comprehensive income for the period | (740) | 504 | -246.0% | | Total comprehensive income for the period | 35,592 | 43,916 | -19.0% | | Total comprehensive income attributable to equity holders of the Company | 28,593 | 34,763 | -17.7% | - Net change in fair value reserve for equity investments at fair value through other comprehensive income was RMB (33) thousand (2024: RMB 66 thousand), and exchange differences on translating financial statements of overseas companies were RMB (707) thousand (2024: RMB 438 thousand)[5] Consolidated Statement of Financial Position This section presents the company's financial position, detailing assets, liabilities, and equity, and highlighting improvements in financial structure Financial Position Overview As of June 30, 2025, the Group's total assets and total equity both increased, net current assets rose, and the gearing ratio decreased, indicating an improved financial structure Consolidated Statement of Financial Position Key Data (As of June 30) | Indicator | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Non-current assets | 487,185 | 483,674 | 0.7% | | Current assets | 4,026,934 | 3,899,855 | 3.3% | | Current liabilities | 3,687,085 | 3,578,496 | 3.0% | | Net current assets | 339,849 | 321,359 | 5.7% | | Total assets less current liabilities | 827,034 | 805,033 | 2.7% | | Non-current liabilities | 6,154 | 9,841 | -37.5% | | Net assets | 820,880 | 795,192 | 3.2% | | Total equity | 820,880 | 795,192 | 3.2% | - Among current assets, contract assets increased to RMB 1,149,451 thousand (December 31, 2024: RMB 1,132,150 thousand), while trade and bills receivables slightly decreased to RMB 2,282,587 thousand (December 31, 2024: RMB 2,301,133 thousand)[7] - Among current liabilities, trade and bills payables significantly decreased to RMB 1,285,561 thousand (December 31, 2024: RMB 1,578,145 thousand), while contract liabilities substantially increased to RMB 1,105,062 thousand (December 31, 2024: RMB 726,695 thousand)[9] Notes to the Interim Financial Information This section provides detailed explanatory notes supporting the interim financial statements, covering accounting policies, segment reporting, and financial performance components 1. Basis of Preparation The interim financial information is prepared in accordance with HKEX Listing Rules and IAS 34, using consistent accounting policies as the 2024 annual financial statements, and was authorized for issue on August 21, 2025 - The interim financial report is prepared in accordance with International Accounting Standard 34 and was authorized for issue on August 21, 2025[12] - The interim financial information comprises condensed consolidated financial statements and selected explanatory notes, not including all information required for complete financial statements[12] - The statutory financial statements for the financial year ended December 31, 2024, received an unqualified opinion from the auditor[13] 2. Changes in Accounting Policies The Group adopted IAS 21 (Amendment) 'The Effects of Changes in Foreign Exchange Rates – Lack of Exchangeability,' which had no material impact on interim financial information as the Group is not involved in transactions with non-exchangeable foreign currencies - The Group has applied International Accounting Standard 21 (Amendment) 'The Effects of Changes in Foreign Exchange Rates – Lack of Exchangeability'[14] - This amendment had no material impact on the interim financial information as the Group is not involved in foreign currency transactions that cannot be exchanged into another currency[14] 3. Revenue and Segment Reporting The Group manages its business across four reportable segments: urban renewal, urban operations and maintenance, urban planning and design, and cultural tourism, with significant growth in cultural tourism revenue and a decline in urban renewal services - The Group's business is divided into four reportable segments: urban renewal services, urban operations and maintenance services, urban planning and design services, and cultural tourism[18] - The cultural tourism segment generated revenue in 2024 and is expected to contribute to stable cash flow and diversify the business portfolio[17] 3(a) Revenue Breakdown Revenue from urban renewal services decreased, while urban operations and maintenance, urban planning and design, and cultural tourism services all saw increases, with cultural tourism showing the largest growth Revenue Breakdown by Major Product or Service (Six Months Ended June 30) | Segment | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Urban Renewal Services | 580,505 | 613,016 | -5.3% | | Urban Operations and Maintenance Services | 121,635 | 115,586 | 5.2% | | Urban Planning and Design Services | 42,841 | 39,015 | 9.8% | | Cultural Tourism | 16,951 | 8,031 | 111.1% | | Total | 761,932 | 775,648 | -1.8% | 3(b) Segment Reporting Segment results are measured by gross profit, with urban renewal services and cultural tourism experiencing a decrease in gross profit, and all Group revenue originating from mainland China - Reportable segment results are measured by gross profit, and the chief executive officer monitors the Group's overall assets and liabilities[21] Reportable Segment Gross Profit (Six Months Ended June 30) | Segment | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Urban Renewal Services | 117,940 | 143,449 | -17.7% | | Urban Operations and Maintenance Services | 21,476 | 21,934 | -2.1% | | Urban Planning and Design Services | 6,217 | 3,867 | 60.8% | | Cultural Tourism | 5,362 | 6,111 | -12.3% | | Total | 150,995 | 175,361 | -13.9% | - All of the Group's revenue is derived from the People's Republic of China ('China'), with no significant assets or operations outside China[25] 4. Profit Before Tax Profit before tax is determined after deducting finance costs and other items, with finance costs significantly increasing and notable changes in research and development and inventory costs Finance Costs (Six Months Ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Interest on bank and other loans and related party loans | 31,578 | 24,847 | 27.1% | | Interest on lease liabilities | 110 | 113 | -2.7% | | Total | 31,688 | 24,960 | 26.9% | Other Items (Six Months Ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Depreciation of property, plant and equipment | 4,429 | 4,773 | -7.2% | | Depreciation of right-of-use assets | 2,308 | 2,687 | -14.1% | | Amortization of intangible assets | 901 | 381 | 136.5% | | Short-term lease and low-value asset lease expenses | 7,021 | 8,131 | -13.6% | | Research and development costs | 52,264 | 36,677 | 42.5% | | Inventory costs | 176,987 | 242,873 | -27.1% | 5. Income Tax The Group's income tax increased from RMB 3.7 million to RMB 4.2 million, primarily due to a reduced deferred tax credit from lower credit losses, with Chinese subsidiaries subject to a 25% corporate income tax rate, and some high-tech enterprises enjoying a 15% preferential rate and 100% additional deductible tax credit for R&D costs Income Tax (Six Months Ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Current tax | 9,575 | 14,102 | -32.1% | | Deferred tax | (5,424) | (10,373) | -47.7% | | Total | 4,151 | 3,729 | 11.3% | - Hong Kong subsidiaries are subject to a 16.5% profits tax rate, but had no assessable profits during the period[28] - Chinese subsidiaries are subject to a 25% corporate income tax rate, with four high-tech enterprises enjoying a 15% preferential tax rate and a 100% additional deductible tax credit for eligible R&D costs[28] 6. Earnings Per Share Basic earnings per share remained stable at RMB 4 cents for the six months ended June 30, 2025, with diluted earnings per share being identical due to the absence of potentially dilutive shares Basic Earnings Per Share (Six Months Ended June 30) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Profit attributable to equity holders of the Company (RMB thousands) | 29,333 | 34,259 | | Number of ordinary shares issued (shares) | 825,000,000 | 825,000,000 | | Basic earnings per share (RMB cents) | 4 | 4 | - Effective August 1, 2024, the company's shares underwent a subdivision, with each share of HK$0.001 par value split into three subdivided shares of HK$0.0003 par value, adjusting the number of issued ordinary shares to 825,000,000 shares[29] - There were no potentially dilutive shares outstanding for the six months ended June 30, 2025, and 2024, thus diluted earnings per share were the same as basic earnings per share[30] 7. Contract Assets and Contract Liabilities Total contract assets increased, primarily from receivables from third parties, while contract liabilities grew significantly due to increased amounts payable to third parties, with most expected to be billed or recognized as revenue within one year Contract Assets (As of June 30) | Item | 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Receivables from third parties | 1,195,481 | 1,168,054 | 2.3% | | Less: Loss allowance | (179,199) | (166,170) | 7.8% | | Net contract assets | 1,149,451 | 1,132,150 | 1.5% | - Contract assets expected to be billed after one year amounted to RMB 509,304 thousand (December 31, 2024: RMB 471,056 thousand)[33] Contract Liabilities (As of June 30) | Item | 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Payables to third parties | 1,075,960 | 695,283 | 54.7% | | Total | 1,105,062 | 726,695 | 52.1% | - All contract liabilities are expected to be recognized as revenue within one year[34] 8. Trade Receivables and Bills Receivable Total trade and bills receivables slightly decreased, but loss allowance increased, with aging analysis showing the largest proportion within one year, while receivables aged two to three years and over five years increased Trade Receivables (As of June 30) | Item | 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Receivables from third parties | 2,437,137 | 2,433,812 | 0.1% | | Less: Loss allowance | (424,157) | (408,413) | 3.8% | | Net trade receivables | 2,283,132 | 2,301,678 | -0.8% | Aging Analysis of Trade Receivables and Bills Receivable (As of June 30) | Aging | 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Within one year | 995,621 | 1,014,258 | -1.8% | | One to two years | 646,937 | 719,257 | -10.1% | | Two to three years | 334,395 | 203,285 | 64.5% | | Three to four years | 147,891 | 229,910 | -35.7% | | Four to five years | 55,292 | 47,957 | 15.3% | | Over five years | 102,996 | 87,011 | 18.4% | 9. Trade Payables and Bills Payable Total trade and bills payables significantly decreased, mainly due to reduced amounts payable to third parties, with aging analysis showing a substantial drop in payables within one year, while those aged one to three years increased Trade Payables and Bills Payable (As of June 30) | Item | 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Payables to third parties | 1,183,053 | 1,496,232 | -20.9% | | Bills payable | 19,500 | 9,500 | 105.3% | | Total | 1,285,561 | 1,578,145 | -18.6% | Aging Analysis of Trade Payables and Bills Payable (As of June 30) | Aging | 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Within one year | 297,827 | 721,926 | -58.7% | | One to three years | 858,080 | 713,244 | 20.3% | | Over three years | 129,654 | 142,975 | -9.2% | - All trade and bills payables are expected to be settled or repaid on demand within one year[41] 10. Dividends The Board does not recommend paying a dividend for the first half of 2025, contrasting with the prior year when a final dividend of RMB 0.071 per share was declared - The Board does not recommend paying a dividend for the six months ended June 30, 2025 (first half of 2024: nil HKD)[42] - For the six months ended June 30, 2024, a final dividend of RMB 0.071 per share was declared for the year ended December 31, 2023, totaling RMB 19,747 thousand[42] Management Discussion and Analysis This section provides management's perspective on the Group's operational performance, financial condition, strategic initiatives, and future outlook Business Overview and Strategy In the first half of 2025, the Group continued to develop its four core businesses—urban renewal, operations and maintenance, planning and design, and cultural tourism—implementing a national development strategy focused on enhancing competitiveness through quality rather than quantity of bids, resulting in increased bid submissions but a lower success rate, with new contract value of approximately RMB 715.26 million - The Group continues to consolidate and expand its urban renewal services, urban operations and maintenance services, urban planning and design services, and cultural tourism businesses[44] - In the first half of 2025, 427 bids were submitted, with a successful bid rate of approximately 18.97%, and new project contract value of approximately RMB 715.26 million[44] - The decrease in the successful bid rate reflects the Group's more cautious and quality-focused bidding strategy, prioritizing project quality[44] - The Group achieved 7 invention patents, 15 utility model patents, and 3 software copyrights in technological innovation, enhancing the commercialization of core technological achievements[45][46] Risk Management The Group's management assists the Board in assessing significant risks and implementing risk management and internal control measures, with no material internal control deficiencies identified in financial reporting for the first half of 2025 - Management assesses significant risks such as investment risk, interest rate risk, and liquidity risk, and formulates risk management and internal control measures[47] - There were no material internal control deficiencies in financial reporting for the first half of 2025[47] Outlook New orders decreased in the first half due to macroeconomic conditions, local finances, and intensified industry competition; however, China's economic resilience and supportive national policies for urban renewal and infrastructure investment offer growth opportunities, with local debt optimization expected to ease financial pressure in the second half as the Group focuses on 'urban ecology + infrastructure + cultural tourism landscape' - In the first half of 2025, the number and contract value of new orders decreased due to multiple factors, including the macroeconomic environment, local government finances, and intensified industry competition[48] - China's GDP grew by 5.3% year-on-year, infrastructure investment increased by 4.6% year-on-year, with urban renewal and renovation of old residential areas being key focus areas[48] - National policies supporting 'urban renewal actions' and urban village renovation provide broad development space for the Group's business[48][50] - Looking ahead to the second half, optimization of local government debt and the implementation of special bonds are expected to alleviate financial pressure, and the Group will continue to focus on the three major directions of 'urban ecology + infrastructure + cultural tourism landscape'[49][50] Financial Review The Group's revenue slightly decreased by 1.8% in the first half, with gross profit down 13.9%, driven by reduced urban renewal service revenue and growth in urban operations and maintenance, urban planning and design, and cultural tourism, alongside increased selling expenses, decreased impairment losses, and higher finance costs Revenue The Group's revenue slightly decreased by 1.8% to approximately RMB 761.9 million in the first half of 2025 from RMB 775.6 million in the first half of 2024, primarily due to macroeconomic fluctuations, increased industry competition, and fewer newly approved large contracts Revenue Changes (Six Months Ended June 30) | Indicator | 2025 (RMB millions) | 2024 (RMB millions) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 761.9 | 775.6 | -1.8% | - The decrease in revenue was primarily due to macroeconomic fluctuations, intensified industry competition, and a reduction in the number and value of newly approved large contracts[51] Urban Renewal Services Revenue from urban renewal services decreased by 5.3% to RMB 580.5 million, primarily due to fewer newly approved large contracts, reduced contract values, and a decline in average revenue recognized per contract Urban Renewal Services Revenue Changes (Six Months Ended June 30) | Indicator | 2025 (RMB millions) | 2024 (RMB millions) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 580.5 | 613.0 | -5.3% | - The decrease in revenue was primarily attributable to a reduction in the number and value of newly approved large contracts, as well as a decline in the average revenue recognized per contract[52] Urban Operations and Maintenance Services Revenue from urban operations and maintenance services increased by 5.2% to RMB 121.6 million, primarily driven by national policy guidance and industry trends leading to an increase in the number of projects undertaken Urban Operations and Maintenance Services Revenue Changes (Six Months Ended June 30) | Indicator | 2025 (RMB millions) | 2024 (RMB millions) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 121.6 | 115.6 | 5.2% | - The revenue growth was primarily attributable to an increase in the number of urban operations and maintenance projects undertaken, driven by national policy guidance and industry development trends[53] Urban Planning and Design Services Revenue from urban planning and design services increased by 9.8% to RMB 42.8 million, primarily due to the steady release of existing orders in line with project progress Urban Planning and Design Services Revenue Changes (Six Months Ended June 30) | Indicator | 2025 (RMB millions) | 2024 (RMB millions) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 42.8 | 39.0 | 9.8% | - The increase in revenue was primarily due to the steady release of existing orders in line with project progress[54] Cultural Tourism Cultural tourism revenue significantly increased by 112.5% to RMB 17.0 million, primarily benefiting from the Group's enhanced online marketing, membership system operations, and data-driven decision-making, improving customer acquisition efficiency and experience Cultural Tourism Revenue Changes (Six Months Ended June 30) | Indicator | 2025 (RMB millions) | 2024 (RMB millions) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 17.0 | 8.0 | 112.5% | - The revenue growth primarily benefited from the Group's increased investment in online marketing, membership system operations, and data-driven decision-making, enhancing customer acquisition efficiency, management levels, and customer experience[55] Gross Profit and Gross Margin Gross profit decreased by 13.9% from RMB 175.4 million to RMB 151.0 million, primarily due to reduced operating revenue caused by slowing market demand and intensified industry competition Gross Profit Changes (Six Months Ended June 30) | Indicator | 2025 (RMB millions) | 2024 (RMB millions) | Change (%) | | :--- | :--- | :--- | :--- | | Gross profit | 151.0 | 175.4 | -13.9% | - The decrease in gross profit was mainly due to slowing market demand and intensified industry competition, leading to reduced operating revenue[56] Net Other Income Net other income decreased by 47.2% to RMB 3.8 million, primarily due to lower interest income Net Other Income Changes (Six Months Ended June 30) | Indicator | 2025 (RMB millions) | 2024 (RMB millions) | Change (%) | | :--- | :--- | :--- | :--- | | Net other income | 3.8 | 7.2 | -47.2% | - The decrease was primarily due to lower interest income[57] Selling Expenses Selling expenses increased by 17.6% to RMB 14.7 million, primarily due to the Group's increased resource allocation for market promotion and channel development to expand market share and new businesses, such as cultural tourism Selling Expenses Changes (Six Months Ended June 30) | Indicator | 2025 (RMB millions) | 2024 (RMB millions) | Change (%) | | :--- | :--- | :--- | :--- | | Selling expenses | 14.7 | 12.5 | 17.6% | - The increase was primarily due to the Group's increased resource allocation for market promotion and channel development to expand market share and new businesses (such as cultural tourism and other fields)[58] Administrative Expenses Administrative expenses remained relatively stable at approximately RMB 37.4 million Administrative Expenses Changes (Six Months Ended June 30) | Indicator | 2025 (RMB millions) | 2024 (RMB millions) | Change (%) | | :--- | :--- | :--- | :--- | | Administrative expenses | 37.4 | 38.0 | -1.6% | Impairment Losses under ECL Model Impairment losses on trade and other receivables and contract assets decreased by 52.0% to RMB 28.8 million, primarily due to improved financial conditions of key clients, faster collections, and the Group's optimization of accounts receivable management and increased contract prepayment ratios Impairment Losses Changes (Six Months Ended June 30) | Indicator | 2025 (RMB millions) | 2024 (RMB millions) | Change (%) | | :--- | :--- | :--- | :--- | | Impairment losses | 28.8 | 60.0 | -52.0% | - The decrease was primarily due to improved financial conditions of the Group's major cooperative clients and accelerated collection speed; concurrently, the Group optimized its accounts receivable collection management mechanism and increased the proportion of contract prepayments, reducing credit risk[60] Finance Costs Finance costs increased by 26.8% to RMB 31.7 million, primarily due to the Group's additional funding for core project construction and operating cash flow supplementation, leading to an increase in the average balance of bank and other loans Finance Costs Changes (Six Months Ended June 30) | Indicator | 2025 (RMB millions) | 2024 (RMB millions) | Change (%) | | :--- | :--- | :--- | :--- | | Finance costs | 31.7 | 25.0 | 26.8% | - Primarily due to the Group's additional funding used to support core project construction and supplement operating cash flow, which affected the increase in the average balance of bank and other loans[61] Share of (Losses)/Profits of Associates The share of results from associates shifted from a profit to a loss of RMB 1.8 million compared to the prior year, primarily influenced by the performance of Changchun Xianbang and Tianjin Nangang associates Share of (Losses)/Profits of Associates Changes (Six Months Ended June 30) | Indicator | 2025 (RMB millions) | 2024 (RMB millions) | Change (RMB millions) | | :--- | :--- | :--- | :--- | | Share of (losses)/profits of associates | (1.8) | 0.4 | -2.2 | - The Group's share of results from associates decreased from a profit of RMB 0.4 million to a loss of RMB 1.8 million[63] - Associates include Changchun Xianbang Municipal Landscape Engineering Co., Ltd. (50% equity interest) and Tianjin Nangang Municipal Landscape Engineering Co., Ltd. (20% equity interest)[62][63] Share of Profits/(Losses) of a Joint Venture The share of results from a joint venture shifted from a loss to a profit of RMB 0.1 million compared to the prior year, primarily due to a reduction in the joint venture's expected credit losses Share of Profits/(Losses) of a Joint Venture Changes (Six Months Ended June 30) | Indicator | 2025 (RMB millions) | 2024 (RMB millions) | Change (RMB millions) | | :--- | :--- | :--- | :--- | | Share of profits/(losses) of a joint venture | 0.1 | (0.3) | 0.4 | - This fluctuation was mainly due to a reduction in the expected credit losses of the joint venture (Ulanhot Tianjiao Tianjun Tourism Development Co., Ltd.)[64] Income Tax Income tax increased to RMB 4.2 million, primarily due to a reduction in deferred tax credits resulting from decreased credit losses in the first half of 2025 Income Tax Changes (Six Months Ended June 30) | Indicator | 2025 (RMB millions) | 2024 (RMB millions) | Change (RMB millions) | | :--- | :--- | :--- | :--- | | Income tax | 4.2 | 3.7 | 0.5 | - Primarily due to a reduction in the Group's credit losses in the first half of 2025 compared to the first half of 2024, leading to a decrease in deferred income tax credits[65] Net Current Assets Net current assets increased by 5.7% to RMB 339.8 million, primarily driven by profit for the period Net Current Assets Changes (As of June 30) | Indicator | June 30, 2025 (RMB millions) | December 31, 2024 (RMB millions) | Change (%) | | :--- | :--- | :--- | :--- | | Net current assets | 339.8 | 321.4 | 5.7% | - The increase was primarily due to profit for the current period[66] Liquidity and Financial Resources Cash and cash equivalents decreased to RMB 47.2 million, with total borrowings of approximately RMB 889.5 million, most of which are repayable within one year, and the Group has not breached any loan covenants Liquidity Position (As of June 30) | Indicator | June 30, 2025 (RMB millions) | December 31, 2024 (RMB millions) | Change (%) | | :--- | :--- | :--- | :--- | | Cash and cash equivalents | 47.2 | 122.8 | -61.5% | | Total borrowings | 889.5 | 884.6 | 0.5% | | Borrowings repayable within one year | 889.5 | 882.8 | 0.8% | - Some borrowings are secured and guaranteed by bank deposits of the controlling shareholder, trade receivables, contract assets, and the Group, related parties, or third-party guarantee companies[67] - As of June 30, 2025, the Group had not breached any loan covenants related to bank and other borrowings[68] Gearing Ratio The gearing ratio decreased from 1.11 times as of December 31, 2024, to 1.08 times as of June 30, 2025, primarily due to an increase in equity value from retained earnings Gearing Ratio Changes (As of June 30) | Indicator | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Gearing ratio | 1.08 times | 1.11 times | -0.03 | - The decrease in the gearing ratio was primarily due to an increase in equity value from retained earnings in the first half of 2025[69] Material Acquisitions and Disposals The Group had no material acquisitions or disposals of subsidiaries, associates, or joint ventures in the first half of 2025 - The Group had no material acquisitions or disposals of subsidiaries, associates, or joint ventures in the first half of 2025[70] Material Investments Held The Group holds no other material investments apart from the associates and joint ventures disclosed in this announcement - Apart from the Group's associates and joint ventures disclosed in this announcement, the Group holds no other material investments[71] Contingent Liabilities The Group provides guarantees for bank loans of joint venture Tianjun Tourism and associate Changchun Xianbang, with unamortized balances of financial guarantees issued amounting to RMB 22,775 thousand and RMB 9,513 thousand, respectively, as of June 30, 2025 - The Group provides guarantees for bank loans of joint venture Tianjun Tourism; as of June 30, 2025, the bank loan balance was RMB 270,000 thousand, and the Group's guaranteed amount was RMB 310,000 thousand (including principal and interest)[72] - The unamortized balance of financial guarantees issued for Tianjun Tourism was RMB 22,775 thousand (December 31, 2024: RMB 24,000 thousand)[73] - The Group provides guarantees for bank loans of associate Changchun Xianbang; as of June 30, 2025, the bank loan balance was RMB 106,500 thousand, and the Group's guaranteed amount was RMB 330,000 thousand (including principal and interest)[74] - The unamortized balance of financial guarantees issued for Changchun Xianbang was RMB 9,513 thousand (December 31, 2024: RMB 10,600 thousand)[74] Financial Guarantees Issued (As of June 30) | Indicator | June 30, 2025 (RMB millions) | December 31, 2024 (RMB millions) | Change (%) | | :--- | :--- | :--- | :--- | | Financial guarantees issued | 32.3 | 34.6 | -6.7% | Future Plans for Material Investments or Capital Assets As of the date of this announcement, the Group has no specific plans regarding material investments or capital assets - As of the date of this announcement, the Group has no specific plans regarding material investments or capital assets[76] Other Information This section provides additional disclosures on various corporate matters, including dividends, employee policies, securities transactions, corporate governance, and board composition Dividends The Board recommends not declaring an interim dividend for the first half of 2025 - The Board recommends not declaring an interim dividend for the first half of 2025 (first half of 2024: nil)[77] Employees and Remuneration Policy As of June 30, 2025, the Group had 806 employees, with a 'Remuneration Management Policy' and welfare system in place, and a Remuneration Committee to review compensation policies and structures for directors, senior management, and employees - As of June 30, 2025, the Group had 806 employees[78] - The Group has formulated a 'Remuneration Management Policy' and welfare system to establish a systematic remuneration structure and enhance transparency and fairness[78] - The Remuneration Committee, comprising three independent non-executive directors, is responsible for reviewing the remuneration policies and structures for directors, senior management, and employees[78] Purchase, Sale or Redemption of Listed Securities Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities in the first half of 2025 - Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities in the first half of 2025[79] Directors' Securities Transactions The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers and confirms that directors complied with the relevant trading standards and code of conduct in the first half of 2025 - The Company has adopted a code of conduct regarding directors' securities transactions in accordance with the Model Code for Securities Transactions by Directors of Listed Issuers[80] - Following specific inquiries with each director, the Company is unaware of any non-compliance by directors with the trading standards and their code of conduct regarding securities transactions in the first half of 2025[80] Events After Reporting Period No material events occurred between June 30, 2025, and the date of this announcement - No material events occurred between June 30, 2025, and the date of this announcement[81] Corporate Governance Practices The Company has adopted the Corporate Governance Code set out in Appendix C1 of the Listing Rules and will continue to review and strengthen its corporate governance - The Company has adopted the Corporate Governance Code set out in Appendix C1 of the Listing Rules and will continue to review and strengthen its corporate governance[83] Review by Audit Committee The Group's unaudited interim results and interim financial report for the six months ended June 30, 2025, have been reviewed by the Audit Committee - The Group's unaudited interim results and interim financial report for the six months ended June 30, 2025, have been reviewed by the Audit Committee[84] - The Audit Committee comprises three independent non-executive directors: Mr. Li Guodong (Chairman), Mr. Gao Xiangnong, and Mr. Yin Jun[84] Publication of Interim Results Announcement and Interim Report This interim results announcement has been published on the Company's website and the HKEX website, and the interim report will be dispatched to shareholders upon request and posted on the aforementioned websites - This interim results announcement is published on the Company's website (www.zonqing.net) and the HKEX website (www.hkexnews.hk)[85](index=85&type=chunk) - The Company's interim report for the six months ended June 30, 2025, will be dispatched to shareholders upon request and posted on the aforementioned websites in due course[85] Board Members As of the announcement date, the Board of Directors comprises executive directors Mr. Liu Haitao (Vice Chairman) and Ms. Wang Yan; non-executive directors Mr. Sun Juqing (Chairman), Ms. Lu Hongyan, and Mr. Shao Zhangguang; and independent non-executive directors Mr. Gao Xiangnong, Mr. Yin Jun, and Mr. Li Guodong - The Board of Directors includes executive directors Mr. Liu Haitao (Vice Chairman) and Ms. Wang Yan[87] - Non-executive directors include Mr. Sun Juqing (Chairman), Ms. Lu Hongyan, and Mr. Shao Zhangguang[87] - Independent non-executive directors include Mr. Gao Xiangnong, Mr. Yin Jun, and Mr. Li Guodong[87]