易大宗(01733) - 2025 - 中期业绩

Financial Highlights and Company Overview This section presents the company's key financial highlights for the first half of 2025 and outlines its core business activities and financial reporting basis Financial Highlights The company reported its unaudited condensed consolidated results for the first half of 2025, detailing key financial performance metrics Financial Highlights (For the six months ended June 30) | Indicator | Amount (million HKD) | | :--- | :--- | | Revenue | 12,672 | | Gross Profit | 300 | | Profit | 133 | | Profit attributable to equity holders of the Company | 136 | | Basic and diluted earnings per share | 0.051 | Company Information and Basis of Preparation The company's core business activities and the basis for preparing its interim financial information are outlined - The Group is principally engaged in coal and other commodity trading and providing integrated supply chain services[10] - The interim financial information has been prepared in accordance with the HKEX Listing Rules and International Accounting Standard 34 'Interim Financial Reporting'[11] Condensed Consolidated Financial Statements This section presents the condensed consolidated statements of profit or loss, comprehensive income, and financial position for the reporting period Consolidated Statement of Profit or Loss Revenue, gross profit, and profit for the period significantly declined for the six months ended June 30, 2025, driven by increased cost of sales and reduced operating profit Consolidated Statement of Profit or Loss Key Data (For the six months ended June 30) | Indicator | 2025 (thousand HKD) | 2024 (thousand HKD) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 12,672,225 | 19,854,020 | -36.17% | | Cost of Sales | (12,372,035) | (18,627,921) | -33.58% | | Gross Profit | 300,190 | 1,226,099 | -75.50% | | Other Income | 170,928 | 94,452 | 80.97% | | Administrative Expenses | (290,039) | (420,041) | -30.95% | | Operating Profit | 181,079 | 900,510 | -79.89% | | Net Finance Costs | (67,760) | (55,942) | 21.13% | | Profit Before Tax | 101,142 | 939,260 | -89.22% | | Profit for the Period | 133,331 | 830,103 | -83.93% | | Profit attributable to equity holders of the Company | 136,240 | 782,859 | -82.63% | | Basic and diluted earnings per share (HKD) | 0.051 | 0.294 | -82.65% | Consolidated Statement of Profit or Loss and Other Comprehensive Income Total comprehensive income for the period significantly decreased by 76.6% due to reduced profit, despite a positive shift in exchange differences Consolidated Statement of Profit or Loss and Other Comprehensive Income Key Data (For the six months ended June 30) | Indicator | 2025 (thousand HKD) | 2024 (thousand HKD) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Profit for the Period | 133,331 | 830,103 | -83.93% | | Exchange differences on translation | 47,039 | (54,960) | N/A (from negative to positive) | | Other comprehensive income for the period | 48,175 | (53,509) | N/A (from negative to positive) | | Total comprehensive income for the period | 181,506 | 776,594 | -76.62% | | Attributable to equity holders of the Company | 182,756 | 746,888 | -75.51% | Consolidated Statement of Financial Position Total assets less current liabilities slightly decreased, while total current assets significantly declined, and net assets saw a modest increase as of June 30, 2025 Consolidated Statement of Financial Position Key Data (As of June 30) | Indicator | 2025 (thousand HKD) | 2024 (thousand HKD) | Change (%) | | :--- | :--- | :--- | :--- | | Total non-current assets | 6,988,995 | 7,038,412 | -0.70% | | Total current assets | 7,482,706 | 10,396,326 | -28.02% | | Total current liabilities | 4,832,182 | 7,728,922 | -37.50% | | Net current assets | 2,650,524 | 2,667,404 | -0.63% | | Total assets less current liabilities | 9,639,519 | 9,705,816 | -0.68% | | Total non-current liabilities | 461,544 | 604,843 | -23.70% | | Net assets | 9,177,975 | 9,100,973 | 0.85% | | Total equity attributable to equity holders of the Company | 8,788,761 | 8,661,550 | 1.47% | Notes to the Unaudited Interim Financial Information This section provides detailed notes on accounting policies, revenue, segment reporting, income, expenses, and balance sheet items for the interim period Changes in Accounting Policies Amendments to IAS 21 regarding foreign exchange rates were applied but had no significant impact on the interim financial information - The Group has applied the amendments to IAS 21 'The Effects of Changes in Foreign Exchange Rates – Lack of Exchangeability', but they had no significant impact on this interim financial information[12] Revenue and Segment Reporting Revenue from coal and other commodity trading and supply chain services decreased by 36.17%, with coal trading revenue significantly down, while overseas market share grew - The Group is principally engaged in coal and other commodity trading and providing integrated supply chain services[14] Disaggregation of Revenue Revenue is disaggregated by product/service and geography, showing coal as the largest but declining source, with increased overseas market share Revenue by Major Product or Service Line (thousand HKD) | Product/Service Line | 2025 | 2024 | YoY Change (%) | | :--- | :--- | :--- | :--- | | Coal | 9,667,908 | 16,858,477 | -42.65% | | Provision of supply chain integrated services | 1,802,424 | 2,100,552 | -14.19% | | Petroleum and petrochemical products | 1,024,038 | 746,656 | 37.15% | | Coke | 89,018 | – | N/A | | Iron ore | 77,356 | 112,917 | -31.50% | | Others | 11,481 | 35,418 | -67.60% | | Total | 12,672,225 | 19,854,020 | -36.17% | Revenue by Customer Geographical Location (thousand HKD) | Geographical Location | 2025 | 2024 | YoY Change (%) | | :--- | :--- | :--- | :--- | | China (including Hong Kong, Macau and Taiwan) | 8,519,404 | 14,942,943 | -42.99% | | Indonesia | 1,219,331 | 1,835,536 | -33.58% | | Mongolia | 633,834 | 422,881 | 49.89% | | South Korea | 582,729 | 713,909 | -18.49% | | Malaysia | 554,927 | 1,011,534 | -45.14% | | India | 345,855 | 295,276 | 17.13% | | Vietnam | 293,593 | 128,650 | 128.21% | | Japan | 286,228 | 503,291 | -43.00% | | Canada | 180,359 | – | N/A | | Others | 55,965 | – | N/A | | Total | 12,672,225 | 19,854,020 | -36.17% | Segment Profit or Loss, Assets and Liabilities Information Coal and other commodity trading segment profit (adjusted EBITDA) turned to a loss, and total reportable segment profit significantly decreased by 62.4% Reportable Segment Key Data (For the six months ended June 30) | Indicator | Coal and Other Commodity Trading (thousand HKD) | Provision of Supply Chain Integrated Services (thousand HKD) | Total (thousand HKD) | | :--- | :--- | :--- | :--- | | 2025 | | | | | Revenue from external customers | 10,869,801 | 1,802,424 | 12,672,225 | | Reportable segment (loss)/profit (adjusted EBITDA) | (39,825) | 486,218 | 446,393 | | Additions to non-current segment assets during the period | 78,097 | 200,986 | 279,083 | | Reportable segment assets (as of June 30) | 8,249,638 | 7,183,375 | 15,433,013 | | Reportable segment liabilities (as of June 30) | 3,608,731 | 2,700,714 | 6,309,445 | | 2024 | | | | | Revenue from external customers | 17,753,468 | 2,100,552 | 19,854,020 | | Reportable segment (loss)/profit (adjusted EBITDA) | 480,835 | 707,816 | 1,188,651 | | Additions to non-current segment assets during the period | 179,366 | 319,605 | 498,971 | | Reportable segment assets (as of December 31) | 11,333,992 | 7,296,415 | 18,630,407 | | Reportable segment liabilities (as of December 31) | 6,446,609 | 2,996,745 | 9,443,354 | - Reportable segment profit (adjusted EBITDA) significantly decreased by 62.4% from HKD 1,188,651 thousand in the first half of 2024 to HKD 446,393 thousand in the first half of 2025[20] Other Income Other income increased by 80.97% due to significant gains from derivative financial instruments and structured deposit products Other Income Components (thousand HKD) | Item | 2025 | 2024 | YoY Change (%) | | :--- | :--- | :--- | :--- | | Net realized and unrealized gains from derivative financial instruments and structured deposit products | 150,246 | 60,965 | 146.45% | | Government grants | 7,914 | 31,007 | -74.48% | | Others | 12,768 | 2,480 | 414.84% | | Total | 170,928 | 94,452 | 80.97% | - Net realized and unrealized gains from derivative financial instruments primarily refer to the Group's net gains from commodity futures contracts[22] Components of Profit Before Tax Profit before tax was influenced by increased net finance costs, decreased staff costs, and higher amortization and depreciation - Profit before tax is after deducting/(crediting) net finance costs, staff costs, and other items[23] Net Finance Costs Net finance costs increased by 21.13% due to a significant rise in net foreign exchange losses Net Finance Costs Components (thousand HKD) | Item | 2025 | 2024 | YoY Change (%) | | :--- | :--- | :--- | :--- | | Interest income | (31,010) | (28,677) | 8.13% | | Total interest expense | 55,988 | 63,327 | -11.59% | | Net foreign exchange losses | 35,789 | 10,373 | 245.02% | | Bank and other charges | 6,993 | 10,919 | -35.96% | | Net Finance Costs | 67,760 | 55,942 | 21.13% | Staff Costs Total staff costs decreased by 18.05% due to reductions in salaries, wages, bonuses, and other benefits Staff Costs Components (thousand HKD) | Item | 2025 | 2024 | YoY Change (%) | | :--- | :--- | :--- | :--- | | Salaries, wages, bonuses and other benefits | 332,447 | 417,225 | -20.32% | | Contributions to defined contribution retirement plans | 24,636 | 18,491 | 33.23% | | Total | 357,083 | 435,716 | -18.05% | Other Items Amortization and depreciation increased by 39.41%, while impairment loss reversal for trade receivables and inventory write-downs decreased Other Key Items (thousand HKD) | Item | 2025 | 2024 | YoY Change (%) | | :--- | :--- | :--- | :--- | | Amortization and depreciation | 283,270 | 203,197 | 39.41% | | Impairment loss (reversal) for trade receivables | (7,431) | (9,444) | -21.31% | | Inventory write-downs | 27,743 | 144,710 | -80.80% | Income Tax Income tax shifted from a credit to an expense, driven by reduced deferred tax movements and Pillar Two income tax recognition Income Tax Components (thousand HKD) | Item | 2025 | 2024 | YoY Change (%) | | :--- | :--- | :--- | :--- | | Current tax – Hong Kong Profits Tax | 12,595 | 13,987 | -10.09% | | Current tax – Outside Hong Kong | 49,411 | 120,061 | -58.84% | | Pillar Two income tax | 6,247 | – | N/A | | Deferred tax | (102,020) | (32,453) | 214.38% | | Total | (32,189) | 109,157 | N/A (from positive to negative) | - Certain subsidiaries of the Group enjoy a preferential tax rate of 15%, including enterprises in Hainan Free Trade Port and those encouraged by the Western Development Strategy[27] - The Company obtained a High-Tech Enterprise Certificate in October 2024, entitling it to a 15% income tax rate from 2024 to 2026[28] - The Group recognized a current tax expense of HKD 6,247 thousand related to Pillar Two top-up tax in the first half of 2025[30] Earnings Per Share Basic and diluted earnings per share significantly decreased by 82.65% due to reduced profit attributable to equity holders of the Company Earnings Per Share Calculation (For the six months ended June 30) | Indicator | 2025 | 2024 | YoY Change (%) | | :--- | :--- | :--- | :--- | | Profit attributable to equity holders of the Company (thousand HKD) | 136,240 | 782,859 | -82.63% | | Weighted average number of ordinary shares (thousand shares) | 2,646,823 | 2,663,980 | -0.64% | | Basic and diluted earnings per share (HKD) | 0.051 | 0.294 | -82.65% | - For the six months ended June 30, 2025 and 2024, basic and diluted earnings per share were identical as there were no potentially dilutive ordinary shares outstanding during the periods[32] Property, Plant and Equipment and Investment Properties Acquisitions of property, plant and equipment increased by 49.8%, with disposals generating gains and transfers from construction in progress Property, Plant and Equipment Movements (thousand HKD) | Item | H1 2025 | H1 2024 | YoY Change (%) | | :--- | :--- | :--- | :--- | | Additions to property, plant and equipment | 181,442 | 121,136 | 49.79% | | Net book value of property, plant and equipment disposed of | 9,090 | 117,271 | -92.25% | | Gain on disposal | 1,052 | 3,890 | -72.96% | | Transfer from construction in progress to property, plant and equipment | 115,589 | 146,039 | -20.85% | Other Non-current Assets Other non-current assets increased by 6.56%, mainly due to loans to joint ventures, with certain assets pledged as collateral Other Non-current Assets Components (thousand HKD) | Item | June 30, 2025 | December 31, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Loans to joint ventures | 388,745 | 361,652 | 7.49% | | Prepayments for property and equipment and construction in progress | 63,900 | 63,126 | 1.23% | | Total | 452,645 | 424,778 | 6.56% | - The Group provided loans to joint ventures with a maximum limit of USD 45,000,000 at an annual interest rate of 7%, secured by logistics facilities[35] - As of June 30, 2025, the Group had pledged HKD 660,262 thousand of property, plant and equipment as collateral for borrowings, bills payable, and lease liabilities[37] Inventories Total inventories significantly decreased by 72.95% due to reduced coal inventories, with no pledged inventories at period-end Inventories Components (thousand HKD) | Item | June 30, 2025 | December 31, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Coal | 461,452 | 1,950,968 | -76.35% | | Others | 88,259 | 81,938 | 7.71% | | Total | 549,711 | 2,032,906 | -72.95% | - As of June 30, 2025, the Group had no pledged inventories, compared to HKD 224,968 thousand pledged inventories as of December 31, 2024[38] Trade and Other Receivables Total trade and other receivables decreased by 31.53%, with a significant reduction in trade and bills receivables, and some bills pledged Trade and Other Receivables Components (thousand HKD) | Item | June 30, 2025 | December 31, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Trade and bills receivables, net of loss allowance | 884,857 | 1,708,867 | -48.22% | | Bank acceptance bills | 708,384 | 1,108,107 | -36.07% | | Other receivables | 82,471 | 166,769 | -50.54% | | Deposits and prepayments | 840,004 | 819,419 | 2.51% | | Other recoverable taxes | 367,772 | 376,329 | -2.27% | | Derivative financial instruments | 115,521 | 87,414 | 32.16% | | Investment in structured deposit products | – | 112,180 | -100.00% | | Total | 2,999,009 | 4,379,085 | -31.53% | - As of June 30, 2025, the Group's bills receivable of HKD 510,513 thousand had been pledged as collateral for borrowings and bills payable[40] Trade and Other Payables Total trade and other payables significantly decreased by 39.30%, with a substantial reduction in trade and bills payable Trade and Other Payables Components (thousand HKD) | Item | June 30, 2025 | December 31, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Total trade and bills payable | 2,120,756 | 3,570,629 | -40.68% | | Payables for construction work | 49,710 | 119,912 | -58.54% | | Payables for purchase of equipment and vehicles | 159,490 | 357,604 | -55.40% | | Staff-related costs payable | 88,788 | 301,917 | -70.62% | | Dividends payable | 85,752 | 217,781 | -60.53% | | Total | 2,997,806 | 4,955,836 | -39.30% | Analysis of Bills Payable (thousand HKD) | Collateral Type | June 30, 2025 | December 31, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Pledged by restricted bank deposits, bills receivable and structured deposits | 1,287,555 | 1,970,417 | -34.66% | | Pledged by restricted bank deposits, property, plant and equipment, land use rights and inventories | 214,206 | 218,185 | -1.82% | | Pledged by restricted bank deposits and credit guarantees | 231,993 | 37,942 | 511.44% | | Total | 1,733,754 | 2,226,544 | -22.13% | Secured Bank Loans Total secured bank loans decreased by 27.35%, with a decline across all collateralized loan categories Secured Bank Loans Analysis (thousand HKD) | Collateral Type | June 30, 2025 | December 31, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Pledged by bills receivable and restricted bank deposits | 357,613 | 643,655 | -44.45% | | Pledged by restricted bank deposits, property, plant and equipment, land use rights and inventories | 655,191 | 711,745 | -7.95% | | Pledged by restricted bank deposits and credit guarantees | 649,997 | 936,125 | -30.58% | | Total | 1,662,801 | 2,291,525 | -27.35% | Capital, Reserves and Dividends Share capital slightly decreased due to repurchased share cancellations, and no interim dividend was recommended to conserve cash for market challenges Share Capital Movements (thousand shares/thousand HKD) | Item | June 30, 2025 | December 31, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Issued and fully paid ordinary shares (number of shares) | 2,673,089 | 2,696,547 | -0.87% | | Issued and fully paid ordinary shares (thousand HKD) | 5,389,760 | 5,410,638 | -0.38% | | Cancellation of repurchased shares (number of shares) | (23,458) | (9,450) | 148.23% | | Cancellation of repurchased shares (thousand HKD) | (20,878) | (9,881) | 111.29% | - The Board did not recommend declaring or paying an interim dividend for the six months ended June 30, 2025, to retain sufficient cash reserves to address market challenges[104] - For the six months ended June 30, 2025, the Company cancelled 23,458,000 shares purchased from the open market[49] Management Discussion and Analysis This section provides management's analysis of the company's financial performance, operational highlights, and strategic outlook for the reporting period Overview Revenue and net profit significantly decreased in H1 2025, while cash and cash equivalents increased, reflecting varied financial performance H1 2025 Key Financial Indicators Overview (million HKD) | Indicator | H1 2025 | H1 2024 | H2 2024 | | :--- | :--- | :--- | :--- | | Revenue | 12,672 | 19,854 | 19,312 | | Net Profit | 133 | 830 | 154 | | Total Assets (June 30, 2025/December 31, 2024) | 14,472 | N/A | 17,435 | | Total Equity (June 30, 2025/December 31, 2024) | 9,178 | N/A | 9,101 | | Cash and Cash Equivalents (June 30, 2025/December 31, 2024) | 2,435 | N/A | 1,996 | Revenue Overview Consolidated revenue decreased by 36.17% due to coking coal price drops, while overseas market share increased, despite a significant decline in coal product revenue - In H1 2025, the average price of coking coal was USD 175/tonne, a decrease of nearly 40.00% compared to H1 2024, leading to a 42.65% reduction in coal trading revenue[62] - Revenue generated by the Group outside China was approximately HKD 4,153 million, with its proportion of total revenue increasing from 24.74% in H1 2024 to 32.78% in H1 2025[64] - The supply chain trading business segment recorded revenue of approximately HKD 10,870 million, accounting for approximately 85.78% of total revenue[66] Market Environment and Total Revenue Coking coal prices fell by nearly 40% due to market conditions, leading to a 36.17% decrease in consolidated revenue - Coking coal prices remained under pressure, with an average price of USD 175/tonne in H1 2025, a decrease of nearly 40.00% compared to H1 2024[62] - The Company recorded consolidated revenue of approximately HKD 12,672 million, a decrease of approximately 36.17% from approximately HKD 19,854 million in H1 2024[62] Geographical Revenue Distribution Overseas market revenue share increased to 32.78% as the Group pursued globalization, with top five customers contributing 39.62% of total revenue - In H1 2025, revenue generated by the Group outside China was approximately HKD 4,153 million, with its proportion of total revenue increasing from 24.74% in H1 2024 to 32.78% in H1 2025[64] - Revenue from the Group's top five customers accounted for 39.62% of total revenue, compared to 47.22% in H1 2024[65] Supply Chain Trading Revenue Supply chain trading revenue was HKD 10,870 million, with coal product revenue decreasing by 42.65% due to market pressure - The supply chain trading business segment recorded revenue of approximately HKD 10,870 million, accounting for approximately 85.78% of total revenue[66] - Revenue from coal products decreased by approximately 42.65% from approximately HKD 16,858 million in H1 2024 to approximately HKD 9,668 million in H1 2025[67] Supply Chain Integrated Services Revenue Supply chain integrated services revenue decreased by 14.19%, with mining services achieving 18.69 million cubic meters in excavation volume - The supply chain integrated services segment recorded revenue of approximately HKD 1,802 million, a decrease of approximately 14.19% compared to H1 2024[68] - Mining services achieved an excavation volume of approximately 18.69 million cubic meters, revenue of approximately HKD 623 million, and gross profit of approximately HKD 81 million[68] Business Vision The Group aims to strengthen its market position and maintain market share through enhanced customer service, business expansion, and cost control - The Group will strengthen its industry position and maintain market share by deepening customer services, expanding value-added businesses, optimizing sales strategies, and strictly implementing internal cost control[70] Cost of Sales and Purchases Cost of sales decreased by 33.58% due to falling coal prices, with total purchases declining, while hedging generated HKD 456 million in gross profit - Cost of sales was approximately HKD 12,372 million, a decrease of approximately 33.58% compared to H1 2024, primarily due to falling coal transaction prices[71] Purchase Details of Different Commodity Categories (thousand tonnes/thousand HKD) | Product | H1 2025 Purchase Volume (thousand tonnes) | H1 2025 Purchase Amount (thousand HKD) | H1 2024 Purchase Volume (thousand tonnes) | H1 2024 Purchase Amount (thousand HKD) | | :--- | :--- | :--- | :--- | :--- | | Coal | 7,385 | 7,208,249 | 8,719 | 13,881,556 | | Petroleum and petrochemical products | 141 | 1,015,160 | 82 | 739,631 | | Coke | 92 | 105,645 | – | – | | Iron ore | 93 | 66,740 | 110 | 95,992 | | Total | 7,711 | 8,395,794 | 8,911 | 14,717,179 | - The Company utilized futures to hedge risks, achieving a combined spot and futures gross profit of approximately HKD 456 million[73] Administrative Expenses Administrative expenses decreased by 30.95% due to a significant reduction in staff costs Administrative Expenses Components (thousand HKD) | Item | H1 2025 | H1 2024 | YoY Change (%) | | :--- | :--- | :--- | :--- | | Staff costs | 172,481 | 284,726 | -39.42% | | Reversal of impairment loss provision for trade and other receivables | (5,779) | (9,748) | -40.71% | | Others | 123,337 | 145,063 | -14.98% | | Total | 290,039 | 420,041 | -30.95% | Other Income Other income increased by 81% due to gains from derivative hedging in the futures market - Other income was approximately HKD 171 million, primarily due to gains of approximately HKD 156 million generated by the Company in the futures market from using derivative instruments for hedging[76] Net Finance Costs Net finance costs increased by 21.43% due to unrealized exchange losses from intercompany balances caused by exchange rate fluctuations - Net finance costs were approximately HKD 68 million, an increase of approximately 21.43% compared to H1 2024, primarily due to unrealized exchange losses from intercompany balances between domestic and overseas subsidiaries caused by exchange rate fluctuations[77] Net Finance Costs Components (thousand HKD) | Item | H1 2025 | H1 2024 | YoY Change (%) | | :--- | :--- | :--- | :--- | | Interest income | (31,010) | (28,677) | 8.13% | | Total interest expense | 55,988 | 63,327 | -11.59% | | Net foreign exchange losses | 35,789 | 10,373 | 245.02% | | Bank and other charges | 6,993 | 10,919 | -35.96% | | Net Finance Costs | 67,760 | 55,942 | 21.13% | Profit Attributable to Equity Holders and Earnings Per Share Profit attributable to equity holders significantly decreased by 82.63%, with basic and diluted earnings per share at HKD 0.051 - Profit attributable to equity holders was approximately HKD 136 million, a decrease of approximately 82.63% compared to H1 2024[79] - For the six months ended June 30, 2025, basic and diluted earnings per share were both HKD 0.051[80] Inventories Inventories decreased by 72.95% as the Group focused on accelerating turnover and reducing levels to enhance capital efficiency Inventories Amount (thousand HKD) | Item | June 30, 2025 | December 31, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Coal | 461,452 | 1,950,968 | -76.35% | | Others | 88,259 | 81,938 | 7.71% | | Total | 549,711 | 2,032,906 | -72.95% | - The Group accelerated inventory turnover and reduced inventory levels, thereby improving capital efficiency[82] Debt and Liquidity Total bank loans decreased, gearing ratio improved, but EBITDA/interest and debt/EBITDA ratios deteriorated due to reduced profit - The Group's total bank loans were approximately HKD 1,663 million, with annual interest rates ranging from 0.65% to 5.91%[83] - The gearing ratio decreased to 36.58% (December 31, 2024: 47.80%)[83] Debt and Liquidity Ratios | Indicator | H1 2025 | H1 2024 | | :--- | :--- | :--- | | EBITDA/Interest | 8.29 | 17.43 | | Debt/EBITDA | 4.41 | 2.20 | Working Capital Working capital metrics improved with a reduced cash conversion cycle of 12 days, while various assets secure bank loans and bills payable Working Capital Turnover Days | Indicator | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Days Sales Outstanding | 33 | 31 | | Days Payable Outstanding | 41 | 42 | | Inventory Days | 20 | 31 | | Overall Cash Conversion Cycle | 12 | 20 | - Bank loans and bills payable are secured by various assets, including credit guarantees, restricted bank deposits, bills receivable, property, plant and equipment, and land use rights[87][88] Cash Flow and Capital Management Operating cash inflow significantly increased due to inventory management, while investing outflow decreased and financing outflow increased, supported by prudent capital management - Net cash inflow from operating activities was approximately HKD 1,533 million, a year-on-year increase of 304.49%, primarily due to accelerated cash recovery from inventory reduction and faster turnover[89] - Net cash outflow from investing activities was approximately HKD 127 million, a year-on-year decrease of 83.02%, primarily invested in mining equipment, logistics park, and coal washing plant construction[89] - Net cash outflow from financing activities was approximately HKD 997 million, a year-on-year increase of 163.06%, primarily used for loan repayments, dividend payments, and finance lease repayments[90] - The Group adopts a prudent and conservative capital management approach, managing capital allocation, reducing inventory and receivables levels, collecting customer prepayments, and using foreign exchange derivative instruments to hedge against exchange rate fluctuation risks[91] Risk Factors This section outlines key risks including commodity price volatility, reliance on the steel industry, liquidity, currency fluctuations, and fair value measurement Commodity Price Volatility Risk Commodity prices are subject to uncontrollable factors, and their volatility may significantly impact the Group's profitability and financial position - Commodity market prices are volatile and influenced by numerous factors beyond our control, including international supply and demand, consumer demand levels, global economic trends, global or regional political events, and international incidents[93] Reliance on Steel Industry Risk Revenue is highly dependent on coking coal demand from the steel industry, making the Group vulnerable to its business cycles and alternative supplies - The Group's revenue primarily derives from commodity trading services for coking coal products and is highly dependent on the demand for coking coal from steel mills and coking plants in China and international markets[94] Liquidity Risk The Group manages liquidity risk by monitoring needs and complying with covenants to ensure sufficient cash and committed funding - The Group adopts a policy of regularly monitoring liquidity requirements and complying with loan covenants, ensuring sufficient cash reserves and committed funding from major financial institutions[95] Currency Risk RMB/USD exchange rate fluctuations pose a risk to net assets and profitability, despite hedging strategies in place - Over 56.97% of the Group's revenue is denominated in RMB, and over 59.25% of procurement costs and certain operating expenses are denominated in USD[96] - The Group has largely hedged the exchange rate risk of its commodity trading business by adopting appropriate exchange rate management policies and derivative hedging instruments[96] Fair Value Measurement Risk Valuation of certain financial assets and liabilities measured at fair value may involve uncertainties - Certain financial assets and liabilities of the Group are measured at fair value[97] Human Resources This section details the Group's employee profile, including functional and educational distribution, and outlines its training initiatives Employee Profile The Group had 2,384 full-time employees as of June 30, 2025, with 87% in frontline operations, adhering to performance-based compensation and legal compliance - As of June 30, 2025, the Group had 2,384 full-time employees (excluding 894 outsourced staff of its PRC subsidiaries)[99] Employee Functional Distribution | Function | Number of Employees | Percentage | | :--- | :--- | :--- | | Management, Administration and Finance | 188 | 8% | | Sales and Marketing | 116 | 5% | | Frontline Production and Transportation Personnel | 2,080 | 87% | | Total | 2,384 | 100% | Employee Educational Background | Education Level | Number of Employees | Percentage | | :--- | :--- | :--- | | Master's degree and above | 145 | 6% | | Bachelor's degree | 715 | 30% | | Junior college | 190 | 8% | | Secondary school and below | 1,334 | 56% | | Total | 2,384 | 100% | Training The Group conducted 1,699 hours of internal and external training for 12,968 participants, covering safety, management, and professional skills - For the six months ended June 30, 2025, the Group conducted various internal and external training courses, totaling 1,699 hours with 12,968 participants[100] Training Course Statistics | Training Course | Hours | Participants | | :--- | :--- | :--- | | Safety Training | 313 | 8,946 | | Management and Leadership Training | 339 | 2,109 | | Professional Skills Training | 1,047 | 1,913 | | Total | 1,699 | 12,968 | Health, Safety and Environment The Group prioritizes employee health, safety, and environmental protection, reporting no major incidents in H1 2025 - The Group places utmost importance on employee health and safety and environmental protection[102] - In the first half of 2025, no major incidents, environmental accidents, or occupational health and safety accidents occurred[102] Corporate Governance and Compliance This section details the company's adherence to corporate governance codes, policies on securities transactions, and interim results disclosure Purchase, Sale or Redemption of the Company's Listed Securities The Company had 2,673,088,962 issued shares, repurchased and cancelled 23,458,000 shares, and held 3,306,000 as treasury shares - As of June 30, 2025, the Company had a total of 2,673,088,962 issued shares[103] - The Company repurchased and cancelled 23,458,000 shares in the first half of 2025[49][103] - As of June 30, 2025, 3,306,000 shares were held by the Company as treasury shares[103] Dividend Policy No interim dividend was recommended to conserve cash reserves for challenging market conditions and operational flexibility - The Board did not recommend declaring or paying an interim dividend for the six months ended June 30, 2025[104] - Management believes that sufficient cash reserves should be retained to cope with changing market conditions and maintain greater flexibility for second-half operations[104] Compliance with the Corporate Governance Code The Company complied with the Corporate Governance Code, with the Chairman also serving as CEO, an arrangement deemed to provide consistent leadership and checks and balances - The Company has fully complied with the code provisions set out in Appendix C1 Part 2 of the Listing Rules, with the exception of a deviation from code provision C.2.1 (separation of the roles of Chairman and Chief Executive Officer)[105] - Ms. Cao Xinyi serves as both the Chairman of the Board and Chief Executive Officer, an arrangement the Board believes provides consistent leadership and an appropriate structure of checks and balances[105] Standard Code for Securities Transactions by Directors The Company adopted and all Directors complied with the Standard Code for Securities Transactions by Directors of Listed Issuers - The Company adopted the 'Standard Code for Securities Transactions by Directors of Listed Issuers', and all Directors confirmed compliance with the code during the reporting period[106] Interim Results Review and Disclosure The audit committee and KPMG reviewed the interim results, which were subsequently published on the Company's and HKEX websites - The Company's audit committee has reviewed the Group's interim results for the six months ended June 30, 2025[107] - The interim results are unaudited but have been reviewed by KPMG in accordance with Hong Kong Standard on Review Engagements 2410[107] - This interim results announcement was published on the Company's website (www.e-comm.com) and the HKEX website (www.hkexnews.hk)[108](index=108&type=chunk)