武汉有机(02881) - 2025 - 中期业绩

Financial Summary and Performance Announcement Financial Summary Wuhan Organic Holdings Company Limited announced its interim results for the six months ended June 30, 2025, with revenue, gross profit, net profit, and basic earnings per share all decreasing compared to the same period last year H1 2025 Financial Summary (Year-on-Year) | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | Change (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | 1,440.2 | 1,651.1 | (210.9) | (12.8%) | | Gross Profit | 163.0 | 186.6 | (23.6) | (12.7%) | | Net Profit | 38.7 | 48.1 | (9.4) | (19.4%) | | Basic and Diluted EPS (RMB) | 0.42 | 0.63 | (0.21) | (33.3%) | Performance Announcement The company's board of directors announced the unaudited condensed consolidated interim results for the six months ended June 30, 2025, with comparable data for the same period in 2024 - The Group announced its unaudited condensed consolidated interim results for the six months ended June 30, 2025, providing comparable data for the same period in 2024[3] Condensed Consolidated Interim Financial Statements Condensed Consolidated Interim Statement of Profit or Loss For the six months ended June 30, 2025, the company's revenue, gross profit, and profit for the period all decreased compared to the same period last year Key Data from Condensed Consolidated Interim Statement of Profit or Loss (RMB thousand) | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Revenue | 1,440,232 | 1,651,158 | | Cost of Sales | (1,277,195) | (1,464,482) | | Gross Profit | 163,037 | 186,676 | | Profit Before Tax | 47,492 | 63,424 | | Income Tax Expense | (8,762) | (15,375) | | Profit for the Period | 38,730 | 48,049 | | Profit Attributable to Owners of the Parent | 38,730 | 48,049 | | Basic and Diluted EPS (RMB) | 0.42 | 0.63 | Condensed Consolidated Interim Statement of Comprehensive Income Total comprehensive income for the six months ended June 30, 2025, decreased due to lower profit and exchange differences Key Data from Condensed Consolidated Interim Statement of Comprehensive Income (RMB thousand) | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Profit for the Period | 38,730 | 48,049 | | Exchange Differences on Translation of Foreign Operations | (51) | 26 | | Other Comprehensive Income for the Period (Net of Tax) | (51) | 26 | | Total Comprehensive Income for the Period | 38,679 | 48,075 | | Attributable to Owners of the Parent | 38,679 | 48,075 | Condensed Consolidated Interim Statement of Financial Position As of June 30, 2025, total non-current and current assets increased, but net current liabilities remained negative, indicating liquidity pressure, while total assets less current liabilities and total non-current liabilities also increased Key Data from Condensed Consolidated Interim Statement of Financial Position (RMB thousand) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Non-current Assets | 1,507,752 | 1,401,521 | | Total Current Assets | 1,102,244 | 950,201 | | Total Current Liabilities | 1,641,759 | 1,574,966 | | Net Current Liabilities | (539,515) | (624,765) | | Total Assets Less Current Liabilities | 968,237 | 776,756 | | Total Non-current Liabilities | 300,722 | 103,131 | | Net Assets | 667,515 | 673,625 | | Total Equity | 667,515 | 673,625 | Condensed Consolidated Interim Statement of Changes in Equity Total equity attributable to owners of the parent as of June 30, 2025, slightly decreased from the beginning of the year, influenced by profit, declared dividends, and exchange fluctuations Key Data from Condensed Consolidated Interim Statement of Changes in Equity (RMB thousand) | Metric | January 1, 2025 | Profit for the Period | Exchange Fluctuations | Dividends Declared | Share-based Payments | June 30, 2025 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Total Equity | 673,625 | 38,730 | (51) | (44,999) | 210 | 667,515 | H1 2024 Changes in Equity (RMB thousand) | Metric | January 1, 2024 | Profit for the Period | Exchange Fluctuations | Issue of New Shares | Share Issue Expenses | Share-based Payments | June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Total Equity | 529,617 | 48,049 | 26 | 91,687 | (26,263) | 210 | 643,326 | Condensed Consolidated Interim Statement of Cash Flows Net cash from operating activities significantly decreased, net cash used in investing activities increased, and net cash from financing activities substantially grew, resulting in a net increase in cash and cash equivalents Key Data from Condensed Consolidated Interim Statement of Cash Flows (RMB thousand) | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Net Cash from Operating Activities | 2,501 | 126,124 | | Net Cash Used in Investing Activities | (128,048) | (28,097) | | Net Cash from Financing Activities | 246,331 | 43,525 | | Net Increase in Cash and Cash Equivalents | 120,784 | 141,552 | | Cash and Cash Equivalents at End of Period | 194,413 | 207,011 | - Net cash from operating activities significantly decreased year-on-year, primarily due to increased inventories, trade receivables, and income tax paid[11] - Net cash used in investing activities significantly increased, mainly due to a substantial increase in expenditures for the purchase of property, plant, and equipment[12] - Net cash from financing activities substantially grew, primarily benefiting from increased proceeds from interest-bearing bank and other borrowings[12] Notes to the Condensed Consolidated Interim Financial Information Company and Group Information Wuhan Organic Holdings Company Limited, incorporated in the Cayman Islands, manufactures and sells toluene derivatives through its Chinese subsidiaries and was listed on the Hong Kong Stock Exchange in June 2024 - The Company was incorporated in the Cayman Islands on September 23, 2016, as an investment holding company[13] - Its principal subsidiaries in China are engaged in the manufacturing and sale of toluene oxidation products, toluene chlorination products, and their derivatives[13] - The Company's shares have been listed on the Main Board of The Stock Exchange of Hong Kong Limited since June 18, 2024[13] Basis of Preparation The condensed consolidated interim financial information is prepared under HKAS 34 and on a going concern basis, as management believes the Group has sufficient funds to continue operations despite net current liabilities - The condensed consolidated interim financial information is prepared in accordance with Hong Kong Accounting Standard 34 'Interim Financial Reporting'[14] - Despite net current liabilities of approximately RMB 540 million as of June 30, 2025, the Board believes the Group has sufficient available funds to continue as a going concern, including future operating cash inflows and approximately RMB 650 million in available credit facilities[15] Changes in Accounting Policies This period saw the first-time adoption of the revised HKAS 21 'Lack of Exchangeability', clarifying currency exchangeability assessment and spot exchange rate estimation methods, and requiring related disclosures - The revised Hong Kong Accounting Standard 21 'Lack of Exchangeability' was adopted for the first time in the current period[16] - This amendment clarifies how an entity should assess currency exchangeability and estimate the spot exchange rate in the absence of exchangeability, and requires disclosure of related information[16] Operating Segment Information No operating segment information is presented as the chief operating decision-maker reviews overall financial performance, with all non-current assets in mainland China and no single customer exceeding 10% of revenue - The chief operating decision-maker reviews the Group's overall financial performance, thus no operating segment information is presented[17] - As of June 30, 2025, and December 31, 2024, all of the Group's non-current assets were located in mainland China[19] - For the six months ended June 30, 2024, and 2025, no revenue from transactions with a single external customer accounted for 10% or more of the Group's total revenue[21] Revenue For the six months ended June 30, 2025, total revenue was RMB 1,440,232 thousand, primarily from toluene oxidation products, toluene chlorination products, and product trading, with mainland China contributing the largest share Revenue Analysis (RMB thousand) | Type of Goods or Services | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Toluene Oxidation Products | 894,653 | 1,025,415 | | Toluene Chlorination Products | 348,943 | 335,685 | | Product Trading | 196,636 | 290,058 | | Total | 1,440,232 | 1,651,158 | | Geographical Market | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Mainland China | 1,100,924 | 1,219,025 | | Asia (excluding Mainland China) | 158,832 | 171,413 | | European Union | 107,574 | 135,583 | | Americas | 64,930 | 111,118 | | Other Countries/Regions | 7,972 | 14,019 | | Total | 1,440,232 | 1,651,158 | - All revenue is recognized at a point in time when goods are transferred[24] Profit Before Tax For the six months ended June 30, 2025, profit before tax decreased, with key adjustments including increased depreciation, amortization, R&D expenses, and government grants and exchange differences Profit Before Tax Adjustments (RMB thousand) | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Profit Before Tax | 47,492 | 63,424 | | Finance Costs | 17,487 | 21,134 | | Depreciation of Property, Plant and Equipment | 65,131 | 58,757 | | Research and Development Costs (Expensed in the Year) | 72,737 | 58,855 | | Government Grants Related to Income | (9,708) | (3,705) | | Employee Benefit Expenses | 61,803 | 51,123 | - Amortization of other intangible assets is included in 'Administrative expenses' in the statement of profit or loss[25] Income Tax Expense For the six months ended June 30, 2025, income tax expense decreased, with varying tax rates by region, including a 15% preferential rate for high-tech enterprises in mainland China Income Tax Expense Analysis (RMB thousand) | Region | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Hong Kong Current | 38 | 92 | | Mainland China Current | 12,132 | 6,371 | | Deferred Income Tax | (3,408) | 8,912 | | Total Tax Expense for the Period | 8,762 | 15,375 | - Entities incorporated in the Cayman Islands and British Virgin Islands are not subject to income tax[28] - The statutory corporate income tax rate in mainland China is 25%, but high-tech enterprises (such as Wuhan Organic Industrial Co., Ltd. and Qianjiang Xinyihong Organic Chemical Co., Ltd.) enjoy a preferential tax rate of 15%[30] Dividends On May 15, 2025, the company's shareholders approved and declared a final dividend of RMB 0.4823 per ordinary share for 2024, totaling approximately RMB 44,999 thousand - On May 15, 2025, the Company declared a final dividend of RMB 0.4823 per ordinary share for 2024, totaling approximately RMB 44,999 thousand[31] Earnings Per Share Attributable to Ordinary Equity Holders of the Parent For the six months ended June 30, 2025, basic earnings per share decreased due to lower profit and an increase in the weighted average number of ordinary shares outstanding EPS Calculation (RMB) | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Profit for the Period Attributable to Ordinary Equity Holders of the Parent (RMB thousand) | 38,730 | 48,049 | | Weighted Average Number of Ordinary Shares Outstanding for the Period | 93,300,000 | 76,307,143 | | Earnings Per Share (Basic and Diluted) | 0.42 | 0.63 | - For the six months ended June 30, 2025, and 2024, the Company had no potential dilutive share options or other financial instruments related to its ordinary shares outstanding[32] Property, Plant and Equipment For the six months ended June 30, 2025, the Group acquired assets at a cost of RMB 151,745 thousand, generated a net gain of RMB 27 thousand from asset disposals, and pledged certain buildings for bank loans - For the six months ended June 30, 2025, the Group's cost of acquiring property, plant, and equipment was RMB 151,745 thousand, a significant increase from RMB 90,654 thousand in the same period last year[37] - As of June 30, 2025, certain buildings with a gross carrying amount of RMB 133,337 thousand were pledged to secure bank and other borrowings[37] Trade and Bills Receivables As of June 30, 2025, total trade and bills receivables increased, with a higher proportion of bills receivables and most trade receivables aged within 4 months Trade and Bills Receivables (RMB thousand) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Trade Receivables | 152,059 | 154,044 | | Bills Receivables | 185,003 | 158,781 | | Impairment | (1,282) | (1,410) | | Total | 335,780 | 311,415 | Trade Receivables Aging Analysis (RMB thousand) | Aging | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Within 4 months | 127,556 | 133,608 | | Over 4 months but within 6 months | 20,084 | 13,839 | | Over 6 months but within 12 months | 3,137 | 5,188 | Bills Receivables Maturity Analysis (RMB thousand) | Maturity | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Within 3 months | 85,624 | 101,203 | | Over 3 months but within 6 months | 99,379 | 57,578 | Trade and Bills Payables As of June 30, 2025, total trade and bills payables slightly increased, with the vast majority aged within 1 year Trade and Bills Payables Aging Analysis (RMB thousand) | Aging | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Within 1 year | 371,354 | 360,695 | | 1 to 2 years | — | 61 | | Over 2 years | 21 | 22 | | Total | 371,375 | 360,778 | Interest-bearing Bank and Other Borrowings As of June 30, 2025, total interest-bearing bank and other borrowings significantly increased, with a higher proportion of current borrowings and new non-current secured and unsecured bank loans Interest-bearing Bank and Other Borrowings Analysis (RMB thousand) | Type | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Current Borrowings | | | | Bank Loans — Secured | 288,500 | 98,500 | | Bank Loans — Unsecured | 668,408 | 709,950 | | Current Portion of Long-term Bank Loans — Secured | 10,428 | 42,000 | | Current Portion of Long-term Bank Loans — Unsecured | — | 23,500 | | Other Borrowings — Unsecured | 30,000 | 49,000 | | Total Current | 997,336 | 922,950 | | Non-current Borrowings | | | | Bank Loans — Secured | 157,412 | — | | Bank Loans — Unsecured | 48,000 | — | | Total Non-current | 205,412 | — | | Total | 1,202,748 | 922,950 | - Most bank and other borrowings are denominated in RMB and bear fixed interest rates, while some secured bank loans bear floating interest rates[46] - The Group plans to repay maturing loans on schedule through extensions, utilization of unused bank financing, and operating cash inflows[46] Share Capital As of June 30, 2025, the Company's issued and fully paid share capital remained consistent with December 31, 2024, comprising 93,300,000 ordinary shares of USD 0.0001 each Share Capital Information (RMB thousand) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Issued and Fully Paid Share Capital | 61 | 61 | | Number of Ordinary Shares | 93,300,000 | 93,300,000 | Commitments As of June 30, 2025, the Group's contractual commitments were RMB 38,911 thousand, primarily related to plant and machinery, with bank and other borrowings secured by certain assets Contractual Commitments (RMB thousand) | Category | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Contracted but not provided for: Plant and machinery | 38,911 | 27,794 | - The Group's bank and other borrowings are secured by property, plant and equipment, and buildings with a gross carrying amount of RMB 133,337 thousand, and leasehold land with a gross carrying amount of RMB 112,844 thousand[46] Management Discussion and Analysis Performance Review The Group's overall revenue and gross profit decreased due to weak global chemical industry demand, declining raw material prices, and intensified competition, while striving to maintain profitability through optimized strategies - The Group is a renowned supplier of toluene derivatives, primarily engaged in the manufacturing and sale of toluene oxidation products, toluene chlorination products, and their derivatives, as well as product trading[47] - During the reporting period, the Group's overall revenue decreased by 12.8% year-on-year to RMB 1,440.2 million, and gross profit decreased by 12.7% year-on-year to RMB 163.0 million, primarily due to a decrease in the overall average selling price per unit of products[51] - Profit attributable to owners of the parent decreased by 19.4% to RMB 38.7 million, and net profit margin decreased by 0.2 percentage points to 2.7%[52][53] Performance by Product Type Toluene oxidation product revenue decreased but gross margin improved, toluene chlorination product revenue grew but gross margin declined, and product trading revenue and gross profit both significantly fell Performance Overview by Product Type (RMB thousand) | Product Type | H1 2025 Revenue | H1 2024 Revenue | H1 2025 Gross Margin | H1 2024 Gross Margin | | :--- | :--- | :--- | :--- | :--- | | Toluene Oxidation Products and Their Derivatives | 894,653 | 1,025,415 | 12.9% | 11.6% | | Toluene Chlorination Products and Their Derivatives | 348,943 | 335,685 | 13.5% | 18.8% | | Product Trading | 196,636 | 290,058 | 0.4% | 1.4% | | Total | 1,440,232 | 1,651,158 | 11.3% | 11.3% | - The overall average selling price per ton of products decreased by approximately RMB 1,341/ton, which was the primary reason for the reduction in revenue and gross profit[51] - Overall gross margin remained flat year-on-year, mainly due to the improved gross margin of toluene oxidation products offsetting declines in other products[51] Revenue by Customer Geographical Location During the reporting period, both domestic and export sales decreased, with a more significant decline in export sales Revenue by Customer Geographical Location (RMB thousand) | Sales Type | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Domestic Sales | 1,100,924 | 1,219,025 | | Export Sales | 339,308 | 432,133 | | Total | 1,440,232 | 1,651,158 | Toluene Oxidation Products and Their Derivatives Revenue from toluene oxidation products and their derivatives decreased by 12.8% year-on-year, but gross margin increased by 1.3 percentage points to 12.9%, driven by differentiated strategies and high-value-added products - Revenue from toluene oxidation products and their derivatives accounted for approximately 62.1% of the Group's total revenue[54] - Revenue decreased by 12.8% to RMB 894.7 million, mainly due to the pass-through of lower raw material costs to reduced average product selling prices[54] - Gross margin increased by 1.3 percentage points to 12.9%, primarily due to differentiated business strategies, improved capacity utilization, and increased gross margin for high-value-added products[55] Toluene Chlorination Products and Their Derivatives Revenue from toluene chlorination products and their derivatives increased by 3.9% year-on-year, with sales volume up 46.5%, but gross profit and gross margin declined due to weak downstream demand and price promotions - Revenue from toluene chlorination products and their derivatives accounted for approximately 24.2% of the Group's total revenue[57] - Revenue increased by 3.9% to RMB 348.9 million, with sales volume growing by 46.5% to 62,046 tons, but the average unit selling price decreased by 29.1%[57][58] - Gross profit decreased by 25.2% to RMB 47.3 million, and gross margin decreased by 5.3 percentage points to 13.5%, primarily because the decline in unit price was greater than the decline in cost[58] Product Trading Product trading revenue decreased by 32.2% year-on-year to RMB 196.6 million, gross profit fell to RMB 0.7 million, and gross margin decreased to 0.4%, primarily due to losses from toluene trading - Product trading revenue accounted for approximately 13.7% of the Group's total revenue[59] - Revenue decreased by 32.2% to RMB 196.6 million, primarily affected by both price and sales volume declines[59] - Gross profit decreased to RMB 0.7 million, and gross margin decreased to 0.4%, primarily due to losses from toluene trading[59][60] Exports Export revenue decreased by 21.5% year-on-year, with its proportion of total revenue declining, mainly due to lower raw material costs, sluggish global chemical demand, and US tariff policies - Export revenue decreased by 21.5% to RMB 339.3 million[61] - Export revenue accounted for approximately 23.6% of total revenue, a decrease of 2.6 percentage points from the same period last year[61] - Reasons for the decline include lower raw material costs leading to reduced selling prices, persistent sluggish demand in the global chemical industry, and US tariff policies[61] Business Outlook The Group will monitor market dynamics, adjust strategies, expand sales networks, enhance R&D, and implement cost reduction measures to improve profitability, while continuing investment in the Hubei Xinxuanhong production base expansion - The global chemical industry faces weak demand and high competitive pressure, with weakening macroeconomic growth momentum, volatile downward trends in the international crude oil market, and US tariff policies exacerbating trade friction[62] - The Group will implement several strategic initiatives, including flexible scheduling of production facility maintenance, optimizing product sales strategies, expanding global sales and marketing networks, enhancing R&D capabilities to develop high-value products, and achieving cost reduction and efficiency improvement through production process optimization, energy efficiency enhancement, and technological transformation[63] - The second phase expansion plan for the Hubei Xinxuanhong production base is expected to commence construction in the second half of 2025, with some capacity commencing production in 2026 and the remainder phased into use until 2029, to promote business growth[64] Financial Review The Group experienced decreased revenue and gross profit, partially offset by expense control and capitalized interest, maintaining sound liquidity despite increased borrowings and a higher debt-to-equity ratio, while continuing investment in capacity expansion and managing working capital - The Group's daily working capital is primarily sourced from operating cash flows, bank borrowings, and net proceeds from the global offering[74] - As of June 30, 2025, interest-bearing bank and other borrowings increased by 30.3% to RMB 1,202.7 million, primarily for daily business operations and capacity expansion[75] - The Group has RMB 650 million in unused bank credit facilities to meet liquidity needs[75] Revenue and Gross Profit During the reporting period, revenue and gross profit decreased by 12.8% and 12.7% respectively, but gross margin remained flat at 11.3% year-on-year Revenue and Gross Profit (RMB million) | Metric | H1 2025 | H1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 1,440.2 | 1,651.2 | (12.8%) | | Gross Profit | 163.0 | 186.7 | (12.7%) | | Gross Margin | 11.3% | 11.3% | 0.0% | Other Income and Gains Other income and gains decreased by RMB 2.3 million to RMB 28.4 million, primarily due to reduced VAT super deduction, partially offset by government grants Other Income and Gains (RMB million) | Metric | H1 2025 | H1 2024 | Change (RMB million) | | :--- | :--- | :--- | :--- | | Other Income and Gains | 28.4 | 30.7 | (2.3) | - The decrease was mainly due to a reduction in VAT super deduction, partially offset by government grants received for foreign economic and trade development[66] Selling and Distribution Expenses Selling and distribution expenses decreased by RMB 1.1 million to RMB 12.3 million, primarily due to reduced staff remuneration resulting from lower sales volume Selling and Distribution Expenses (RMB million) | Metric | H1 2025 | H1 2024 | Change (RMB million) | | :--- | :--- | :--- | :--- | | Selling and Distribution Expenses | 12.3 | 13.4 | (1.1) | - Selling and distribution expenses as a percentage of revenue increased from 0.8% to 0.9%[67] Administrative Expenses Administrative expenses decreased by RMB 10.1 million to RMB 50.1 million, primarily due to the absence of listing expenses in the current period Administrative Expenses (RMB million) | Metric | H1 2025 | H1 2024 | Change (RMB million) | | :--- | :--- | :--- | :--- | | Administrative Expenses | 50.1 | 60.2 | (10.1) | - Administrative expenses as a percentage of revenue decreased from 3.6% to 3.5%[68] Research and Development Expenses R&D expenses increased by RMB 13.8 million to RMB 72.7 million, primarily due to increased material input as new process R&D projects entered the verification and testing phase Research and Development Expenses (RMB million) | Metric | H1 2025 | H1 2024 | Change (RMB million) | | :--- | :--- | :--- | :--- | | Research and Development Expenses | 72.7 | 58.9 | 13.8 | - R&D expenses as a percentage of revenue increased from 3.6% to 5.1%[69] Finance Costs Finance costs decreased by RMB 3.6 million to RMB 17.5 million, primarily due to lower borrowing interest rates and capitalization of interest for the Xinxuanhong project Finance Costs (RMB million) | Metric | H1 2025 | H1 2024 | Change (RMB million) | | :--- | :--- | :--- | :--- | | Finance Costs | 17.5 | 21.1 | (3.6) | Income Tax Expense Income tax expense decreased by RMB 6.6 million to RMB 8.8 million, primarily due to lower profit before tax and the absence of non-deductible listing expenses in the current period, with the effective tax rate decreasing Income Tax Expense (RMB million) | Metric | H1 2025 | H1 2024 | Change (RMB million) | | :--- | :--- | :--- | :--- | | Income Tax Expense | 8.8 | 15.4 | (6.6) | - The effective tax rate decreased from 24.2% to 18.5%, primarily due to the absence of non-deductible listing expenses in the current period[71] Profit for the Period Net profit for the period decreased by RMB 9.4 million to RMB 38.7 million, with net profit margin decreasing from 2.9% to 2.7% Profit for the Period (RMB million) | Metric | H1 2025 | H1 2024 | Change (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Net Profit | 38.7 | 48.1 | (9.4) | (19.4%) | | Net Profit Margin | 2.7% | 2.9% | (0.2%) | | Liquidity and Capital Structure The Group maintained sound liquidity with increased cash and cash equivalents, while interest-bearing bank and other borrowings increased for operations and capacity expansion Liquidity and Borrowings (RMB million) | Metric | June 30, 2025 | December 31, 2024 | Change (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Cash and Cash Equivalents | 194.4 | 73.7 | 120.7 | 163.8% | | Pledged Deposits | 81.2 | 125.4 | (44.2) | (35.2%) | | Interest-bearing Bank and Other Borrowings | 1,202.7 | 923.0 | 279.7 | 30.3% | - The Group has revolving credit accounts totaling RMB 1.94 billion, of which RMB 650 million is unused credit facilities[75] - The Group does not have any risk hedging instruments or foreign currency investment hedges[76] Gearing Ratio As of June 30, 2025, the equity-to-debt ratio increased to 140.5% from 108.4% as of December 31, 2024, primarily due to increased borrowings Gearing Ratio | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Equity-to-Debt Ratio | 140.5% | 108.4% | - The increase in the equity-to-debt ratio was primarily due to increased borrowings[77] Basic and Diluted Earnings Per Share For the six months ended June 30, 2025, basic and diluted earnings per share was RMB 0.42, a year-on-year decrease of 33.3% Basic and Diluted Earnings Per Share (RMB) | Metric | H1 2025 | H1 2024 | Change (RMB) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Basic and Diluted Earnings Per Share | 0.42 | 0.63 | (0.21) | (33.3%) | Current Assets As of June 30, 2025, total current assets increased to RMB 1,102.2 million, primarily comprising inventories, trade and bills receivables, prepayments, and cash equivalents Current Assets Composition (RMB million) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Current Assets | 1,102.2 | 950.2 | | Inventories | 335.8 | 292.4 | | Trade and Bills Receivables | 335.8 | 311.4 | | Prepayments, Deposits and Other Receivables | 155.0 | 147.3 | | Cash and Cash Equivalents | 194.4 | 73.7 | | Pledged Deposits | 81.2 | 125.4 | Inventories Inventories increased by RMB 43.4 million to RMB 335.8 million, and inventory turnover days increased from 37 to 45, primarily due to the full-capacity rapid turnover strategy being affected by weak market demand and new products' market expansion not meeting expectations Inventories and Turnover Days (RMB million) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Inventories | 335.8 | 292.4 | | Inventory Turnover Days | 45 days | 37 days | - The increase in inventories was mainly due to the full-capacity rapid turnover strategy being affected by weak downstream demand for chlorination products, and the market expansion of new products from Xinxuanhong not meeting expectations[80] Trade and Bills Receivables Trade and bills receivables increased by RMB 24.4 million to RMB 335.8 million, and turnover days increased from 34 to 41, primarily due to an increase in bills receivables received that did not meet derecognition criteria Trade and Bills Receivables (RMB million) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Trade and Bills Receivables | 335.8 | 311.4 | | Turnover Days | 41 days | 34 days | - The increase in trade receivables balance and turnover days was primarily attributable to an increase in bills receivables received by the Group that did not meet derecognition criteria[81] Prepayments and Other Receivables Prepayments and other receivables increased by RMB 7.7 million to RMB 155.0 million, primarily due to increased prepayments for raw material purchases Prepayments and Other Receivables (RMB million) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Prepayments and Other Receivables | 155.0 | 147.3 | | Change | 7.7 | | - The increase was mainly due to increased prepayments for raw material purchases[82] Current Liabilities Total current liabilities increased to RMB 1,641.8 million, primarily including trade and bills payables, other payables, accrued expenses and contract liabilities, and interest-bearing bank and other borrowings Current Liabilities Composition (RMB million) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Current Liabilities | 1,641.8 | 1,575.0 | | Trade and Bills Payables | 371.4 | 360.8 | | Other Payables, Accrued Expenses and Contract Liabilities | 263.1 | 286.0 | | Interest-bearing Bank and Other Borrowings | 997.3 | 923.0 | | Lease Liabilities | 10.0 | 3.9 | Trade and Bills Payables Trade and bills payables increased by RMB 10.6 million to RMB 371.4 million, and turnover days increased from 32 to 52, primarily due to suppliers offering more relaxed payment terms Trade and Bills Payables (RMB million) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Trade and Bills Payables | 371.4 | 360.8 | | Turnover Days | 52 days | 32 days | - The increase was primarily attributable to suppliers providing more relaxed payment terms[84] Other Payables, Accrued Expenses and Contract Liabilities Total other payables, accrued expenses, and contract liabilities decreased by RMB 22.9 million to RMB 263.1 million, primarily due to the settlement of Xinxuanhong Phase I project payments Other Payables, Accrued Expenses and Contract Liabilities (RMB million) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total | 263.1 | 286.0 | | Change | (22.9) | | - The decrease was mainly due to the settlement of Xinxuanhong Phase I project payments[85] Pledge of Assets As of June 30, 2025, the Group pledged property, plant and equipment, and leasehold land with a net book value of approximately RMB 246.2 million to secure bank and other borrowings and bank facilities Net Book Value of Pledged Assets (RMB million) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Net Book Value of Pledged Assets | 246.2 | 258.8 | Material Acquisitions, Disposals and Major Investments Aside from the production expansion of the Hubei Xinxuanhong production base, the Group had no other material acquisitions, disposals, or major investments during the reporting period - Aside from the production expansion of the Hubei Xinxuanhong production base, the Group had no other material acquisitions, disposals, or major investments during the reporting period[87] Capital Expenditure and Capital Commitments Capital expenditure during the reporting period was RMB 166.1 million, primarily related to the purchase of property, plant and equipment, and leasehold land, with period-end contractual commitments of RMB 38.9 million Capital Expenditure and Commitments (RMB million) | Metric | H1 2025 | | :--- | :--- | | Capital Expenditure | 166.1 | | Contractual Commitments (Period-end) | 38.9 | Future Plans for Material Investments or Capital Assets Aside from the Hubei Xinxuanhong production base expansion plan and the construction of Kangxin Industrial Park, the Group has no other future plans for material investments or capital assets - The Group's future plans include the Hubei Xinxuanhong production base expansion plan and the construction of Kangxin Industrial Park[89] Contingent Liabilities As of June 30, 2025, the Group had no material contingent liabilities - As of June 30, 2025, the Group had no material contingent liabilities[90] Other Information Foreign Exchange and Interest Rate Risks The Group's primary business is RMB-denominated, facing minimal foreign exchange and interest rate risks, with no current hedging policies - The Group's principal operations are conducted in China and denominated in RMB, and management believes there is no significant foreign exchange risk[91] - Currently, the Group does not have any foreign currency hedging policies[91] - Except for some floating-rate borrowings, all bank and other borrowings are denominated in RMB and bear fixed interest rates, and interest rate risk is considered minimal and controllable[91] Use of Proceeds from Global Offering The Company, listed in June 2024, utilized HKD 10.0 million of its HKD 25.9 million global offering proceeds for working capital and sales & marketing, with most funds still allocated for Hubei Xinxuanhong production base expansion Use of Proceeds from Global Offering and Utilization (HKD million) | Use of Proceeds | Percentage (%) | Net Proceeds from Global Offering | Amount Utilized as of June 30, 2025 | Amount Unutilized as of June 30, 2025 | Expected Timeline for Full Utilization | | :--- | :--- | :--- | :--- | :--- | :--- | | Construction of new production facilities to increase capacity at Hubei Xinxuanhong production base | 82.0% | 21.2 | 6.4 | 14.8 | On or before December 2028 | | Research and Development Activities | 3.0% | 0.8 | 0.2 | 0.6 | On or before December 2026 | | Sales and Marketing Activities | 5.0% | 1.3 | 0.8 | 0.5 | On or before December 2026 | | Working Capital and General Corporate Purposes | 10.0% | 2.6 | 2.6 | — | — | | Total | 100% | 25.9 | 10.0 | 15.9 | | - Net proceeds from the global offering were approximately HKD 25.9 million[92] Employees and Remuneration Policy The Group had 631 employees, with total employee costs of RMB 61.8 million, a year-on-year increase, mainly due to salary adjustments, increased social security expenses, and employee bonuses from cost reduction and efficiency improvement measures Employee and Remuneration Information (RMB million) | Metric | June 30, 2025 | December 31, 2024 | H1 2025 Employee Costs | H1 2024 Employee Costs | | :--- | :--- | :--- | :--- | :--- | | Number of Employees | 631 | 626 | | | | Total Employee Costs | | | 61.8 | 51.1 | - The increase in employee costs was mainly due to salary adjustments, increased social security expenses, and increased employee bonuses resulting from cost reduction and efficiency improvement measures[95] Events After Reporting Period After the reporting period, Hubei Kangxin Chemical Trading Co., Ltd., an indirect wholly-owned subsidiary of the Company, entered into a construction contract with Hubei Tongsheng Construction Engineering Co., Ltd. for the construction of Kangxin Industrial Park - On July 8, 2025, Hubei Kangxin Chemical Trading Co., Ltd. entered into a construction contract with Hubei Tongsheng Construction Engineering Co., Ltd. for the construction of Kangxin Industrial Park[96] Interim Dividend The Board does not recommend the payment of an interim dividend for the reporting period - The Board does not recommend the payment of an interim dividend for the reporting period[97] Purchase, Sale or Redemption of the Company's Listed Securities During the reporting period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed shares, and the Company held no treasury shares - During the reporting period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed shares[98] - As of June 30, 2025, the Company held no treasury shares[98] Compliance with Corporate Governance Code The Group is committed to maintaining high standards of corporate governance and has complied with all applicable code provisions of the Corporate Governance Code set out in Appendix C1 to the Listing Rules of the Stock Exchange throughout the reporting period - The Group is committed to maintaining high standards of corporate governance and has adopted the Corporate Governance Code set out in Appendix C1 to the Listing Rules of the Stock Exchange[99] - Throughout the reporting period, the Company has complied with all applicable code provisions set out in the Corporate Governance Code[100] Compliance with Model Code for Securities Transactions by Directors The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers set out in Appendix C3 to the Listing Rules, and all directors confirmed compliance with the code throughout the reporting period - The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers set out in Appendix C3 to the Listing Rules[101] - Following enquiry, each Director confirmed compliance with the requirements set out in the Model Code throughout the reporting period, and the Company was not aware of any non-compliance[101] Audit Committee and Review of Financial Statements The Audit Committee has reviewed the Group's unaudited interim financial statements for the six months ended June 30, 2025, and Ernst & Young, the independent auditor, has performed an independent review - The Audit Committee has reviewed the Group's unaudited interim financial statements for the six months ended June 30, 2025[102] - Ernst & Young, the independent auditor, has performed an independent review of the interim financial information in accordance with Hong Kong Standard on Review Engagements 2410[102] Publication of Interim Results Announcement and Interim Report This interim results announcement will be published on the Stock Exchange website and the Company's website, and the interim report will be dispatched to shareholders and published on the websites in due course - This interim results announcement will be published on the Stock Exchange website www.hkexnews.hk and the Company's website www.chinaorganic.com[103](index=103&type=chunk) - The Company's interim report for the six months ended June 30, 2025, will be dispatched to shareholders and published on the aforementioned websites in due course[103] Board of Directors Information As of the announcement date, the Board of Directors comprises Executive, Non-executive, and Independent Non-executive Directors - The Board of Directors comprises Executive Directors Mr. Zou Xiaohong (Chairman) and Mr. Chen Ping[104] - Non-executive Directors include Mr. Gao Lei, Mr. Shen Yingming, and Ms. Li Deye[104] - Independent Non-executive Directors include Mr. Liao Qiyu, Dr. Liu Zhongdong, and Dr. Yuan Kang[104]