五菱汽车(00305) - 2025 - 中期业绩

Interim Results Announcement Condensed Consolidated Statement of Profit or Loss This section presents the unaudited condensed consolidated statement of profit or loss for the six months ended June 30, 2025, compared to the same period in 2024, showing significant growth in revenue, gross profit, operating expenses, and profit for the period Key Financial Data from Condensed Consolidated Statement of Profit or Loss | Metric | Six Months Ended June 30, 2025 (thousand RMB) | Six Months Ended June 30, 2024 (thousand RMB) | Change (%) | | :--- | :--- | :--- | :--- | | Total Revenue | 4,025,400 | 3,946,324 | +2.0% | | Cost of Sales and Services | (3,542,053) | (3,520,500) | +0.6% | | Gross Profit | 483,347 | 425,824 | +13.5% | | Profit Before Tax | 97,583 | 22,397 | +335.7% | | Profit for the Period | 85,809 | 21,125 | +306.2% | | Profit Attributable to Owners of the Company | 39,416 | 1,586 | +2385.2% | | Basic Earnings Per Share | RMB 1.20 cents | RMB 0.05 cents | +2300.0% | Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income This statement presents the total comprehensive income for the six months ended June 30, 2025, including profit for the period and other comprehensive income (expense), reflecting the company's overall financial performance Key Data from Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income | Metric | Six Months Ended June 30, 2025 (thousand RMB) | Six Months Ended June 30, 2024 (thousand RMB) | Change (%) | | :--- | :--- | :--- | :--- | | Profit for the Period | 85,809 | 21,125 | +306.2% | | Other Comprehensive (Expense) Income for the Period | (6,118) | 17,615 | -134.7% | | Total Comprehensive Income for the Period | 79,691 | 38,740 | +105.7% | | Total Comprehensive Income Attributable to Owners of the Company | 33,861 | 12,003 | +182.1% | - Other comprehensive income shifted from an income in the same period of 2024 to an expense in 2025, primarily due to net changes in fair value reserves and exchange differences[6] Condensed Consolidated Statement of Financial Position This section provides the condensed consolidated statement of financial position as of June 30, 2025, showing the company's asset, liability, and equity structure, reflecting its financial health at period-end Key Data from Condensed Consolidated Statement of Financial Position | Metric | June 30, 2025 (thousand RMB) | December 31, 2024 (thousand RMB) | Change (%) | | :--- | :--- | :--- | :--- | | Non-current Assets | 4,162,391 | 4,029,991 | +3.3% | | Current Assets | 9,606,525 | 10,417,837 | -7.8% | | Current Liabilities | 9,532,503 | 9,860,693 | -3.3% | | Non-current Liabilities | 1,501,893 | 1,195,363 | +25.6% | | Net Assets | 3,085,242 | 3,041,050 | +1.5% | | Equity Attributable to Owners of the Company | 1,992,026 | 1,973,393 | +0.9% | - Net current assets significantly improved from 74,022 thousand RMB as of December 31, 2024, to 557,144 thousand RMB as of June 30, 2025, partly due to an increase in long-term bank borrowings[123] - Bank balances and cash decreased to 3,160,344 thousand RMB, while bills receivable and bills receivable at fair value through other comprehensive income decreased to 2,271,952 thousand RMB[7] Notes to the Condensed Consolidated Financial Statements This section provides detailed notes to the condensed consolidated financial statements, explaining the basis of preparation, changes in accounting policies, revenue and segment information, other income and losses, profit before tax components, income tax expense, earnings per share calculation, property-related assets and liabilities, receivables and payables, provisions, bank borrowings, and share capital and dividends 1. Basis of Preparation The condensed consolidated financial statements are prepared in accordance with applicable disclosure requirements of the Listing Rules of The Stock Exchange of Hong Kong Limited and Hong Kong Accounting Standard 34, on a going concern basis - The financial statements were authorized for issue on August 26, 2025[9] - The Board believes that preparing the financial statements on a going concern basis is appropriate, given the continuous financial support from Guangxi Automobile Group and the Group's existing financial resources[10][11] 2. Changes in Accounting Policies The Group has applied HKAS 21 (Amendment) 'The Effects of Changes in Foreign Exchange Rates—Lack of Exchangeability', but it has no significant impact on the condensed consolidated financial statements as the Group has no relevant foreign currency transactions - The Group has not applied any new standards or interpretations that are not yet effective for the current accounting period[13] 3. Revenue and Segment Information This section details the Group's revenue sources and operating segments, including automotive powertrain systems, auto parts and other industrial services, commercial vehicles, and other businesses, analyzing revenue and performance contributions from each segment 3(a) Disaggregation of Revenue Revenue is disaggregated by type of goods and services, timing of revenue recognition, and geographical market, showing auto parts and accessories sales as the primary revenue source, with most revenue recognized at a point in time and originating from Mainland China Revenue Disaggregation (thousand RMB) | Revenue Type | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Sales of Engines and Related Components and Other Powertrain Products | 858,640 | 902,113 | | Sales of Auto Parts and Accessories | 2,490,680 | 2,331,161 | | Sales of Special Purpose Vehicles | 312,918 | 330,671 | | Other Goods and Services | 349,019 | 366,933 | | Rental Income | 14,143 | 15,446 | | Total Revenue | 4,025,400 | 3,946,324 | | Revenue Recognized at a Point in Time | 3,999,684 | 3,877,326 | | Revenue Recognized Over Time | 25,716 | 68,998 | | Revenue from Mainland China | 3,787,610 | 3,893,526 | | Revenue from Other Regions | 237,790 | 52,798 | - Revenue from other regions significantly increased from 52,798 thousand RMB in the same period of 2024 to 237,790 thousand RMB in 2025[14] 3(b) Segment Information The Group's operating segments include automotive powertrain systems, auto parts and other industrial services, commercial vehicles, and other businesses, with analysis of revenue and adjusted EBIT for each segment Segment Revenue and Profit (thousand RMB) | Segment | 2025 H1 External Revenue | 2025 H1 Segment Profit (Adjusted EBIT) | 2024 H1 External Revenue | 2024 H1 Segment (Loss) Profit (Adjusted EBIT) | | :--- | :--- | :--- | :--- | :--- | | Automotive Powertrain Systems | 858,640 | 6,609 | 902,113 | (17,112) | | Auto Parts and Other Industrial Services | 2,839,699 | 77,874 | 2,698,094 | 75,883 | | Commercial Vehicles | 312,918 | 27,970 | 330,671 | 26,329 | | Others | 14,143 | 16,558 | 15,446 | 2,399 | | Consolidated Total | 4,025,400 | 129,011 | 3,946,324 | 87,499 | - The Automotive Powertrain Systems segment successfully turned profitable, shifting from a loss of 17,112 thousand RMB in the same period of 2024 to a profit of 6,609 thousand RMB in 2025[19][20] - The Auto Parts and Other Industrial Services segment achieved growth in both revenue and profit, serving as a primary growth driver for the Group[19][20] 3(c) Seasonality of Operations The Group's major business segments experience higher product demand in the second half of the year, consistent with automotive industry seasonality, typically resulting in higher revenue and segment performance in H2 than H1 - For the twelve months ended June 30, 2025, the Group's three major reportable segments generated revenue of 7,997,074 thousand RMB and segment profit of 225,188 thousand RMB[21] 4. Other Income and Losses This section lists the components of other income and losses, including fair value changes of investment properties, exchange gains/losses, and losses on disposal of property, plant and equipment Other Income and Losses (thousand RMB) | Item | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Impairment Loss on Property, Plant and Equipment | – | (10,000) | | Fair Value Increase (Decrease) of Investment Properties | 2,415 | (13,047) | | Net Exchange Gain (Loss) | 3,685 | (104) | | Loss on Disposal of Property, Plant and Equipment | (248) | (961) | | Others | 918 | 1,509 | | Total | 6,770 | (22,603) | - Other income and losses shifted from a net loss of 22,603 thousand RMB in the same period of 2024 to a net gain of 6,770 thousand RMB in 2025, primarily benefiting from fair value increases in investment properties and exchange gains[22] 5. Profit Before Tax This section details the various expenses and income affecting profit before tax, including finance costs, staff costs, depreciation expense, cost of inventories, bank interest income, and government grants 5(a) Finance Costs Finance costs primarily include interest on bank borrowings, advances from discounted bills receivable, and lease liabilities, with a decrease in the current period compared to the prior period Finance Costs (thousand RMB) | Item | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Interest on Bank Borrowings | 37,590 | 32,257 | | Interest on Advances from Discounted Bills Receivable | 12,413 | 27,426 | | Interest on Lease Liabilities | 529 | 175 | | Total | 50,532 | 59,858 | - Total finance costs decreased by 15.6% year-on-year, primarily due to a significant decrease in interest on advances from discounted bills receivable[23][120] 5(b) Staff Costs Staff costs include salaries, wages and other benefits, and contributions to defined contribution retirement plans, with a decrease in the current period Staff Costs (thousand RMB) | Item | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Salaries, Wages and Other Benefits | 311,671 | 353,458 | | Contributions to Defined Contribution Retirement Plans | 41,887 | 44,682 | | Equity-settled Share-based Payment Credit | – | (9,276) | | Total | 353,558 | 388,864 | - Total staff costs decreased by 9.1% year-on-year, mainly due to a reduction in salaries, wages and other benefits, and the presence of a share-based payment credit in 2024[24] 5(c) Other Items Other items include depreciation expense, net reversal of inventory write-downs, cost of inventories, bank interest income, and government grants, with a significant decrease in government grants Other Items (thousand RMB) | Item | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Depreciation Expense | 197,398 | 207,881 | | Net Reversal of Write-down of Inventories | (17,265) | (5,714) | | Cost of Inventories | 3,544,707 | 3,475,894 | | Bank Interest Income | (60,378) | (61,401) | | Government Grants | (21,611) | (63,228) | - Government grant income significantly decreased by 65.8% year-on-year, from 63,228 thousand RMB in the same period of 2024 to 21,611 thousand RMB[24] 6. Income Tax Expense This section outlines the Group's income tax expense components, including current and deferred tax, and explains tax policies in Mainland China, Hong Kong, Indonesia, and the impact of Pillar Two income tax Income Tax Expense (thousand RMB) | Item | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Current Tax | 9,451 | 4,157 | | Deferred Tax | 2,323 | (2,885) | | Total | 11,774 | 1,272 | - Total income tax expense significantly increased from 1,272 thousand RMB in the same period of 2024 to 11,774 thousand RMB in 2025, mainly due to increased current tax and a shift from deferred tax income to expense[25] Mainland China Mainland China subsidiaries enjoy tax reductions, with some high-tech enterprises taxed at a preferential rate of 15%, others at 25%, and subject to 5% or 10% withholding tax - Liuzhou Wuling Liuji Power, Wuling Liuji Casting, and Hubei Zhuoda Auto Parts are recognized as high-tech enterprises, enjoying a 15% preferential tax rate[26] - Liuzhou Zhuotong and Chongqing Zhuotong are eligible for tax reductions under China's Western Development policy, enjoying a 15% preferential tax rate[26] Hong Kong and Indonesia Hong Kong profits tax is calculated at 16.5%, and no tax provision is made for Indonesia as the subsidiary has no assessable profits - Hong Kong profits tax is calculated at 16.5% of estimated assessable profits[28] Pillar Two Income Tax The Group falls within the scope of the OECD Pillar Two legislative model, has been exempted from recognizing and disclosing deferred tax assets and liabilities, and assesses its impact on income tax position as not significant - The Group's consolidated annual revenue exceeds EUR 750 million, falling within the scope of the OECD Pillar Two legislative model[30] - In accordance with HKAS 12 (Amendment), the Group has been exempted from recognizing and disclosing deferred tax assets and liabilities related to Pillar Two income tax[31] - As the main business is located in Mainland China, the impact of these rules on the Group's income tax position is not significant[31] 7. Earnings Per Share This section calculates basic and diluted earnings per share, showing a significant improvement in earnings per share for the current period 7(a) Basic Earnings Per Share Basic earnings per share is calculated based on profit attributable to equity holders of the Company and the weighted average number of ordinary shares outstanding, showing significant growth in the current period Basic Earnings Per Share Calculation | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Profit Attributable to Equity Holders of the Company (thousand RMB) | 39,416 | 1,586 | | Weighted Average Number of Ordinary Shares in Issue (thousand shares) | 3,298,161 | 3,298,161 | | Basic Earnings Per Share | RMB 1.20 cents | RMB 0.05 cents | 7(b) Diluted Earnings Per Share Diluted earnings per share is the same as basic earnings per share, as there were no dilutive potential ordinary shares in both the current and prior periods - There were no dilutive potential ordinary shares for any of the six months ended June 30, 2025 and 2024[33] 8. Investment Properties, Right-of-Use Assets, Lease Liabilities and Other Property, Plant and Equipment This section discloses changes in investment properties, right-of-use assets, lease liabilities, and property, plant and equipment, including transfers, fair value changes, new lease agreements, and acquisition costs 8(a) Investment Properties The carrying amount of investment properties slightly changed due to transfers, fair value increases, and exchange adjustments Changes in Investment Properties (thousand RMB) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | At Beginning of Period | 437,974 | 436,351 | | Transfers (Net) | (5,779) | 7,285 | | Fair Value Increase Recognized in Other Comprehensive Income | 4,133 | 9,520 | | Fair Value Increase (Decrease) Recognized in Profit or Loss | 2,415 | (15,285) | | Exchange Adjustments | (73) | 103 | | At End of Period | 438,670 | 437,974 | 8(b) Right-of-Use Assets and Lease Liabilities New lease agreements in the current period led to an increase in right-of-use assets and lease liabilities, while amounts leased from Guangxi Automobile Group decreased - An increase in right-of-use assets of 12,259 thousand RMB and corresponding lease liabilities of 12,259 thousand RMB were recognized in the current period[36] - Right-of-use assets leased from Guangxi Automobile Group decreased from 48,578 thousand RMB as of December 31, 2024, to 18,846 thousand RMB as of June 30, 2025[36] 8(c) Property, Plant and Equipment Acquisition costs for property, plant and equipment significantly increased in the current period, while losses from disposals decreased Acquisition and Disposal of Property, Plant and Equipment (thousand RMB) | Item | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Acquisition Cost | 133,727 | 80,527 | | Net Book Value of Disposals | 16,061 | 12,622 | | Loss on Disposal | 248 | 961 | - Acquisition costs for property, plant and equipment increased by 66.1% year-on-year, indicating increased capital expenditure[37] 9. Trade and Other Receivables This section details the composition of trade and other receivables, including amounts from major customers and third parties, providing aging analysis and credit loss provisions Trade and Other Receivables (thousand RMB) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Gross Trade Receivables | 2,119,433 | 2,153,960 | | Less: Provision for Credit Losses | (108,502) | (96,185) | | Gross Other Receivables | 253,512 | 217,109 | | Less: Provision for Credit Losses | (13,679) | (19,445) | | Prepayments | 78,276 | 117,463 | | Recoverable VAT | 18,274 | 13,320 | | Total | 2,347,314 | 2,386,222 | - Total trade and other receivables slightly decreased, while provision for credit losses increased[38] - Receivables from SAIC-GM-Wuling increased from 838,324 thousand RMB as of December 31, 2024, to 1,049,607 thousand RMB as of June 30, 2025[38] 10. Bills Receivable and Bills Receivable at Fair Value Through Other Comprehensive Income This section discloses the composition and aging analysis of bills receivable and bills receivable at fair value through other comprehensive income, primarily bank acceptance bills, with most maturing within 180 days Bills Receivable and Bills Receivable at Fair Value Through Other Comprehensive Income (thousand RMB) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Bills Receivable at Fair Value Through Other Comprehensive Income | 342,178 | 489,014 | | Bills Receivable (Discounted with Recourse) | 1,929,774 | 2,444,371 | | Total | 2,271,952 | 2,933,385 | - Total bills receivable decreased by 22.5% year-on-year, mainly due to a reduction in discounted bills receivable with recourse[41] 11. Trade and Other Payables This section details the composition of trade and other payables, including amounts due to related parties and third parties, as well as accrued R&D expenses and staff costs Trade and Other Payables (thousand RMB) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Trade and Bills Payables | 4,607,663 | 4,529,142 | | VAT Payables and Other Tax Payables | 3,610 | 14,612 | | Accrued R&D Expenses | 203,474 | 164,000 | | Accrued Staff Costs | 57,187 | 89,379 | | Deposits Received from Suppliers | 43,010 | 49,439 | | Other Payables | 166,443 | 148,756 | | Total | 5,081,387 | 4,995,328 | - Total trade and other payables slightly increased, with a significant rise in accrued R&D expenses, while amounts due to related parties (e.g., SAIC-GM-Wuling) substantially decreased[43] 12. Warranty Provision This section discloses changes in warranty provision, which is estimated based on sales volume and historical repair return levels, and is continuously reviewed and revised Changes in Warranty Provision (thousand RMB) | Item | Amount | | :--- | :--- | | At January 1, 2024 | 105,481 | | Provision Made During the Period (2024) | 43,704 | | Provision Utilized (2024) | (45,519) | | At December 31, 2024 and January 1, 2025 | 103,666 | | Provision Made During the Period (2025) | 15,333 | | Provision Utilized (2025) | (12,524) | | At June 30, 2025 | 106,475 | - Total warranty provision slightly increased, reflecting more provisions made than utilized during the period[44] 13. Bank Borrowings / Advances from Discounted Bills Receivable with Recourse This section details the total amount, collateral, and effective annual interest rate range for bank borrowings and advances from discounted bills receivable with recourse Bank Borrowings and Advances (thousand RMB) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Bank Borrowings | 4,068,396 | 2,980,139 | | Of which: Secured | 654,479 | 165,564 | | Of which: Unsecured | 3,413,917 | 2,814,575 | | Advances from Discounted Bills Receivable with Recourse | 1,932,109 | 2,448,817 | | Total | 6,000,505 | 5,428,956 | - Total bank borrowings increased by 36.5% year-on-year, with a significant increase in secured borrowings[45][126] - Advances from discounted bills receivable with recourse decreased by 21.1% year-on-year[45][126] - Effective annual interest rate range: fixed-rate borrowings 0.6–3.00%, floating-rate borrowings 0.6–3.35%[45] 14. Share Capital, Reserves and Dividends This section provides information on share capital, reserves, and dividends, including the number of shares issued and the decision not to declare an interim dividend for the current period 14(a) Share Capital As of June 30, 2025, the Group's share capital remained unchanged, with 3,298,161,000 shares outstanding Share Capital (thousand RMB) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | As Presented in the Condensed Consolidated Financial Statements at Period End | 11,782 | 11,782 | 14(b) Dividends The Board decided not to declare an interim dividend for the six months ended June 30, 2025, but a final dividend for the previous financial year was declared and paid after the interim period - The Board does not recommend the declaration of an interim dividend for the six months ended June 30, 2025[47][135] - A final dividend of HK 0.5 cents per share, totaling HK 16,491 thousand (approximately 15,228 thousand RMB), was declared to the owners of the Company for the previous financial year and paid after the interim period[48] Chairman's Statement The Chairman's Statement outlines the Group's operating strategy, key progress in H1 2025, and H2 work plan, emphasizing steady growth and efficiency improvement amidst a challenging market, focusing on industrial transformation and upgrading Foreword Facing intensified market competition and economic downturn, the Group focused on 'stable growth, improved efficiency, and new beginnings' to transform its industries towards mid-to-high-end, digitalization, intelligence, and green development, achieving moderate revenue growth and significant gross profit improvement - The Group's total revenue was 4,025,400 thousand RMB, an increase of 2% compared to the same period in 2024[50] - Gross profit was 483,347 thousand RMB, an increase of 13.5%, with gross margin improving from 10.8% to 12%[50] - Net profit was 85,809 thousand RMB, a substantial increase of 306% year-on-year, and profit attributable to owners of the Company significantly improved to 39,416 thousand RMB[51] I. Key Work Progress in the First Half of 2025 In the first half of the year, the Group focused on core businesses, implemented the 'Lingshi Project', made progress in market expansion, product innovation, and efficiency improvement across all segments, and actively pursued loss reduction and efficiency enhancement (I) Concentrating Efforts, Focusing on Core Business, Ensuring High-Quality Implementation of 'Lingshi Project' The Group made significant progress in auto parts, commercial vehicles, powertrain systems, and new energy vehicles in H1, ensuring high-quality implementation of the 'Lingshi Project' through market expansion, product innovation, and base construction 1. Auto Parts Business Seizes Opportunities for New Journey The auto parts business, guided by 'stabilizing existing, capturing incremental, expanding variables', secured 125 projects from 46 customers in H1, with revenue growing 5.2% year-on-year, expanding overseas markets and new technology R&D - In the first half, the auto parts business achieved revenue of 2,839,699 thousand RMB, a year-on-year increase of 5.2%[53] - Successfully expanded into new markets such as SAIC Passenger Vehicle, Zhengzhou Yutong, and Weichai New Energy, and secured projects in overseas markets including Vietnam, Indonesia, and Turkey[52] - A new manufacturing base was established in Rizhao, Shandong, enhancing industrial reach in East China; relying on the Shanghai Technology R&D Foresight Center, a product layout of 'traditional energy technology upgrade + new energy parts integrated development' was built[52] 2. Commercial Vehicle Business Advances Steadily for a New Chapter The commercial vehicle business focused on four categories: civilian, official, off-road, and intelligent driving, achieving highlights in niche markets, with strong performance in off-road vehicles domestically and internationally, despite a slight decrease in total revenue - In the first half, the commercial vehicle business achieved revenue of 312,918 thousand RMB, a slight decrease compared to the same period last year[55] - Off-road vehicles sold 1,093 units domestically and 552 units overseas, with the Shandong Nanshan International golf cart order becoming the largest domestic order[54] - The intelligent driving business achieved a breakthrough, securing a single bulk order for hundreds of intelligent charging robots[54] 3. Powertrain Business Unleashes Momentum for New Prospects The powertrain business, driven by 'engine technology upgrade and new energy integrated application', completed approximately 77,000 engines in H1, with casting sales increasing 24.5% year-on-year, making new strides in domestic and international markets - Casting business sales amounted to 257,138 thousand RMB in the first half, a year-on-year increase of 24.5%[56] - Stabilized the domestic market, with increased sales in new markets such as BAIC Foton, SAIC Maxus, and JAC, and promoted the H15TD-DHT hybrid project and H16B project[56] - Expanded international markets, securing a strategic project in Vietnam's overseas market[56] 4. New Energy Vehicle Business Consolidates Foundation with Synergistic Empowerment The new energy vehicle business optimized technology and products, refined its product matrix, achieved a 9% year-on-year sales increase in H1, and actively expanded domestic and international market partners and sales channels - In the first half, new energy vehicle sales reached 8,640 units, a year-on-year increase of 9%[58] - Launched models such as the Golden Warehouse medium-range electric vehicle and Golden Card extended-range large-capacity hybrid 2.0 version, aiming to increase market segment penetration to 60%[57] - Collaborated with leading enterprises like Lalamove, SF Express, and Meituan; overseas sales channels cumulatively reached 33, covering 39 countries and regions[57][58] (II) Reducing Losses and Increasing Efficiency, Refined Management, Deepening Reforms to Stimulate High-Quality Development Vitality The Group initiated loss reduction efforts and implemented refined management in H1, aiming for a 'dual decline' in the number and amount of loss-making enterprises, while enhancing efficiency through cost reduction, strict control of labor costs, and revitalization of idle assets - Continuously improved the 'one enterprise, one policy' strategy for turning losses into profits, striving to achieve a year-on-year 'dual decline' in the number and amount of loss-making subsidiaries within three years[59] - Continuously implemented 'cost reduction and efficiency improvement', set structural cost control targets, strictly controlled labor costs, and enhanced asset returns by reviewing asset status and revitalizing idle assets[60] II. Work Plan and Key Measures for the Second Half of 2025 The Group plans to continue adjusting product structure, strengthening service and sales synergy, accelerating powertrain system transformation, seizing new energy vehicle market opportunities, and deepening loss management and refined management for high-quality development in H2 (I) Continuously Adjusting Product Structure, Accelerating Transformation and Upgrading of Auto Parts Business In H2, the Group will leverage advantageous products, actively support new energy vehicle models, expand into mid-to-high-end customer markets, and accelerate the application and industrialization of new products/processes - Actively undertake more new energy vehicle model support to enhance product added value[61] - Vigorously expand into mid-to-high-end customer markets of China's top 10 brands, including Chery, Geely, BYD, and SAIC[61] - Accelerate the application and industrialization of new products/processes such as hydroforming, 3-in-1 electric drive axles, and magnesium-aluminum alloy die-casting[61] (II) Strengthening Synergy in Automotive Services and Sales, Enhancing Brand Competitiveness The plan is to integrate service and sales resources, build a unified brand image, enhance customer loyalty and brand effect, and promote sales growth, using brand synergy as a breakthrough - Integrate service and sales resources to form a synergistic advantage and build a unified brand image[62] - Accelerate capital turnover efficiency, optimize resource allocation, and enhance customer loyalty and brand effect[62] (III) Accelerating Transformation and Upgrading, Driving Powertrain Business to Enhance Core Competitiveness In H2, the focus will be on R&D of high-thermal efficiency engines and hybrid powertrain systems, establishing a collaborative development mechanism with vehicle projects, and actively expanding external markets to create new growth poles - Focus on R&D breakthroughs for high-thermal efficiency engines and hybrid powertrain systems, accelerating the industrialization of technological achievements[63] - Identify high-quality potential customers through precise market research and customer profiling, creating new growth poles for the powertrain business[63] (IV) Seizing Domestic and International Market Opportunities, Expanding New Energy Vehicle Business The plan is to continuously improve the product matrix, strengthen marketing, promote new products like medium-range Golden Mini-Truck, Golden Truck, and Golden Warehouse, expand into overseas markets such as Japan, South Korea, and Italy, and deepen cooperation with leading enterprises - Significantly increase promotion of new products such as the medium-range Golden Mini-Truck, Golden Truck, Golden Warehouse, and double-cab mini-trucks to enhance market share[64] - Accelerate the launch and sales of G050 platform cost-reduced models and Golden Warehouse right-hand drive models, expanding into high-potential overseas markets such as Japan, South Korea, and Italy[65] - Actively expand cooperation with major clients, partnering with leading enterprises like Lalamove, Didi, SF Express, and Meituan[65] (V) Strictly Implementing 'One Enterprise, One Policy', Further Strengthening Loss Management In H2, the Group will continue to intensify loss management, reduce costs and increase efficiency for new energy strategic emerging enterprises through technical optimization and business control, and strictly control expenses and initiate liquidation for enterprises unable to turn profitable - Strive to achieve the goal set by the Autonomous Region SASAC: 'by 2025, achieve a year-on-year dual decline in the number and amount of loss-making subsidiaries'[66] - For new energy strategic emerging enterprises, implement a dual approach of technical optimization and business control to reduce production and procurement costs[66] (VI) Deepening Internal Refined Management, Improving Asset Efficiency The Group will continue to advance the 'Three Reductions' initiative, strengthen 'Two Funds' control, specifically promote the cleanup of non-performing inventory and overdue receivables, and revitalize idle assets to enhance asset efficiency - Continuously advance the 'Three Reductions' initiative, strengthen 'Two Funds' control, and promote the cleanup of non-performing inventory, overdue receivables, and revitalization of idle assets[67] Management Discussion and Analysis This section provides an in-depth analysis of the Group's major business segments, joint ventures, and associates' operating performance, along with a detailed review of financial position, liquidity, capital structure, seasonality, asset pledges, exchange rate risks, and contingent liabilities Operating Review — Major Business Segments This section reviews the operating performance of the Automotive Powertrain Systems, Auto Parts and Other Industrial Services, and Commercial Vehicles segments in H1 2025, including revenue, business volume, market challenges, and response strategies Automotive Powertrain Systems The Automotive Powertrain Systems segment's total revenue decreased by 4.8% year-on-year, but it successfully turned profitable with an operating profit of 6,609 thousand RMB, driven by strong casting product sales and cost control, actively transitioning to new energy powertrains Key Data for Automotive Powertrain Systems Segment (thousand RMB) | Metric | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | | Total Revenue (External Sales) | 858,640 | 902,113 | | Operating Profit (Loss) | 6,609 | (17,112) | | Casting Product Sales Revenue | 257,138 | (Not provided) | | Sales to Core Customer SAIC-GM-Wuling | 426,588 | (Approx.) 387,807 | | Sales to Other Customers | 432,052 | (Approx.) 514,306 | - Engine sales volume was approximately 77,000 units, a year-on-year decrease of approximately 8.3%, influenced by the market shift from fuel vehicles to new energy vehicles[69] - Casting product sales revenue increased by approximately 24.5% year-on-year, mitigating unfavorable market factors[69] - Completed the product layout of 'traditional powertrain technology upgrade + new energy powertrain integrated development' and launched HEV hybrid power solutions[73][78][79] Auto Parts and Other Industrial Services The Auto Parts and Other Industrial Services segment saw a moderate 5.2% increase in total revenue and a 2.6% growth in operating profit, driven by core customer business rebound, new customer contributions, and cost reduction initiatives, actively expanding overseas markets and new technology applications Key Data for Auto Parts and Other Industrial Services Segment (thousand RMB) | Metric | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | | Total Revenue (External Sales) | 2,839,699 | 2,698,094 | | Operating Profit | 77,874 | 75,883 | | Sales to Core Customer SAIC-GM-Wuling | 1,606,971 | 1,486,464 | | Sales to Expanded Accounts | 1,159,301 | (Not provided) | | Sales to Wuling New Energy | 73,427 | (Not provided) | - Sales to core customer SAIC-GM-Wuling increased by 8.1%, and sales to expanded accounts grew to 1,159,301 thousand RMB, accounting for approximately 40.8% of total revenue[83][84] - New production bases were established in Jingmen, Hubei, and Rizhao, Shandong, enhancing industrial reach and market competitiveness[85] - Cumulative production and sales of micro electric drive axles exceeded 2,000,000 units, and hydroforming technology is widely applied in new energy vehicles and passenger cars[87][89] Commercial Vehicles The Commercial Vehicles segment's total revenue decreased by 5.4% year-on-year, but operating profit moderately increased by 6.2%, benefiting from stable business volume, reduced raw material costs, and cost control measures, actively developing low-speed intelligent driving products Key Data for Commercial Vehicles Segment (thousand RMB) | Metric | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | | Total Revenue (External Sales) | 312,918 | 330,671 | | Operating Profit | 27,970 | 26,329 | | Vehicle Sales Volume (units) | 3,870 | 3,650 | - Vehicle sales volume increased by 6% year-on-year, with approximately 2,170 units of modified vehicles and 1,700 units of sightseeing vehicles sold[95] - Actively developed low-speed intelligent driving products, independently developing core chassis components such as front and rear axles, EPB, EHB, and the Lingyu intelligent driving system[98] - Established joint venture Wuling New Energy with Guangxi Automobile, focusing on R&D, manufacturing, and sales of new energy vehicles, which helps streamline this segment's existing operations[101][102] Performance of Joint Ventures and Associates This section evaluates the operating performance and financial contributions of the Group's major joint ventures and associates (including Wuling New Energy, Guangxi Weixiang, Faurecia Seating, Faurecia Interiors, and Faurecia Exhaust) in H1 2025 Wuling New Energy Wuling New Energy's total revenue was 565,487 thousand RMB, incurring a net operating loss of 211,348 thousand RMB due to initial operational phase and significant R&D expenses, but new energy vehicle sales moderately increased by 9.4% year-on-year Key Data for Wuling New Energy (thousand RMB) | Metric | 2025 H1 | | :--- | :--- | | Total Revenue | 565,487 | | Net Operating Loss | (211,348) | | Loss Attributable to the Group | (54,316) | | New Energy Vehicle Sales Volume (units) | 8,640 | - Sales growth was primarily attributed to new models launched in the domestic market, including the 'Lingshi Golden Warehouse' series and 'Lingshi Golden Mini-Truck' series[106] - Continuously expanding overseas markets, building on existing market foundations, and further developing markets in Southeast Asia, South America, and other regions[108] Other Significant Joint Ventures and Associates This section outlines the operating performance of other significant joint ventures and associates, including Guangxi Weixiang, Faurecia Seating, Faurecia Interiors, and Faurecia Exhaust, showing continued profitable growth for Guangxi Weixiang and Faurecia Interiors, and narrowed losses or turnarounds for Faurecia Seating and Exhaust Guangxi Weixiang Machinery Co., Ltd. Guangxi Weixiang's total revenue increased by 42% year-on-year, and net operating profit increased by 60%, maintaining its profitability Key Data for Guangxi Weixiang (thousand RMB) | Metric | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | | Total Revenue | 391,428 | (Approx.) 275,653 | | Net Operating Profit | 7,606 | 4,748 | | Profit Attributable to the Group | 3,803 | (Approx.) 2,374 | Faurecia (Liuzhou) Automotive Seating Co., Ltd. Faurecia Seating's total revenue increased by 44% year-on-year, but it still recorded a net operating loss due to intense competition, though the loss significantly narrowed compared to the prior period Key Data for Faurecia Seating (thousand RMB) | Metric | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | | Total Revenue | 265,835 | (Approx.) 184,608 | | Net Operating Loss | (7,356) | (30,406) | | Loss Attributable to the Group | (3,678) | (15,203) | - Net operating loss significantly narrowed, primarily due to the impact of a fire incident in the same period last year[110] Faurecia (Liuzhou) Automotive Interior Systems Co., Ltd. Faurecia Interiors' total revenue increased by 30% year-on-year, and net operating profit further increased, maintaining business momentum and profitability Key Data for Faurecia Interiors (thousand RMB) | Metric | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | | Total Revenue | 191,860 | (Approx.) 147,585 | | Net Operating Profit | 21,509 | 15,848 | | Profit Attributable to the Group | 10,755 | (Approx.) 7,924 | Faurecia (Liuzhou) Exhaust Control Technology Co., Ltd. Faurecia Exhaust's total revenue remained stable, but it successfully turned profitable with a net operating profit of 2,406 thousand RMB due to improved gross margin Key Data for Faurecia Exhaust (thousand RMB) | Metric | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | | Total Revenue | 137,016 | 137,016 | | Net Operating Profit (Loss) | 2,406 | (5,880) | | Profit Attributable to the Group | 1,203 | (2,940) | Financial Review This section provides a detailed financial review of the condensed consolidated statement of profit or loss and other comprehensive income and the condensed consolidated statement of financial position, analyzing the main reasons for changes in revenue, gross profit, net profit, asset-liability structure, and various expenses Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income The Group's total revenue moderately grew by 2%, gross profit increased by 13.5% to 483,347 thousand RMB, and gross margin improved to 12%. Net profit surged by 306% to 85,809 thousand RMB, mainly due to core business improvements and reduced losses from associates - Total revenue was 4,025,400 thousand RMB, an increase of 2% compared to the same period last year, primarily benefiting from business growth in the Auto Parts and Other Industrial Services segment[113] - Gross profit was 483,347 thousand RMB, an increase of 13.5%, with gross margin improving from 10.8% to 12%[114] - Net profit was 85,809 thousand RMB, a substantial increase of 306% compared to the same period last year, and profit attributable to owners of the Company was 39,416 thousand RMB[115] - R&D expenses were 184,154 thousand RMB, a significant increase of 42.6%, mainly for new product and business development projects in the Auto Parts and Other Industrial Services segment[119] - Finance costs were 50,532 thousand RMB, a decrease of 15.6%, due to lower borrowing interest rates during the period[120] Condensed Consolidated Statement of Financial Position As of June 30, 2025, the Group's total assets and total liabilities were 14,447,828 thousand RMB and 11,362,586 thousand RMB, respectively. Net current assets significantly improved to 557,144 thousand RMB, partly due to an increase in long-term bank borrowings - Total assets were 14,447,828 thousand RMB, and total liabilities were 11,362,586 thousand RMB[121] - Net current assets were 557,144 thousand RMB, a further improvement compared to 74,022 thousand RMB as of December 31, 2024[123] - Non-current assets were 4,029,991 thousand RMB, and current assets were 10,417,837 thousand RMB[121][122] - Receivables from related company SAIC-GM-Wuling were 1,049,607 thousand RMB[122] Liquidity and Capital Structure The Group finances through bank borrowings and discounted bills receivable, with total bank borrowings increasing and advances from discounted bills receivable with recourse decreasing. The Group maintains a high bank cash balance and is committed to financial stability - Total bank borrowings were 4,068,396 thousand RMB, an increase of 36.5% compared to December 31, 2024[126] - Advances from discounted bills receivable with recourse decreased by 21.1% to 1,932,109 thousand RMB[126] - Bank cash balances (together with pledged bank deposits) were 5,195,075 thousand RMB, a slight increase[126] - Total equity attributable to shareholders of the Company was 1,992,026 thousand RMB, with net asset value per share of approximately RMB 60.4 cents[127] Seasonality or Cyclicality of Interim Operations The Group's major business segments experience higher product demand in the second half of the year, consistent with automotive industry seasonality, typically resulting in higher revenue and segment performance in H2 than H1 - Product demand is higher in the second half of the year, primarily stimulated by exhibitions and promotional activities held in September and October[129] - For the twelve months ended June 30, 2025, the Group's three major business segments generated revenue of 7,997,074 thousand RMB, a decrease compared to the same period last year, mainly due to unfavorable market conditions and the repositioning strategy of the commercial vehicle segment[130] Pledge of Assets As of June 30, 2025, bank deposits of 636,042 thousand RMB and discounted bills receivable with recourse of 1,929,774 thousand RMB held by the Group were pledged to banks as collateral for financing - Pledged bank deposits of 636,042 thousand RMB[131] - Pledged discounted bills receivable with recourse not yet due of 1,929,774 thousand RMB[131] Exchange Rate Fluctuation Risk The Group holds a small amount of HKD, USD, and EUR denominated assets; relative to the scale of RMB denominated assets, exchange rate fluctuation risk is considered reasonable and will continue to be monitored - Holds bank deposits and trade receivables denominated in HKD, USD, and EUR, totaling 14,965 thousand RMB equivalent[132] Commitments As of June 30, 2025, the Group had contracted but unprovided commitments of 95,027 thousand RMB for the acquisition of property, plant and equipment - Contracted but unprovided commitments for the acquisition of property, plant and equipment amounted to 95,027 thousand RMB[133] Contingent Liabilities As of June 30, 2025, the Group had no significant contingent liabilities - The Group had no significant contingent liabilities[134] Interim Dividend The Board of Directors does not recommend the declaration of an interim dividend for the six months ended June 30, 2025 - The Board does not recommend the declaration of an interim dividend for the six months ended June 30, 2025[135] Purchase, Redemption and Sale of the Company's Listed Securities For the six months ended June 30, 2025, neither the Company nor any of its subsidiaries purchased, redeemed, or sold any of the Company's listed securities - Neither the Company nor any of its subsidiaries purchased, redeemed, or sold any of the Company's listed securities[136] Corporate Governance The Company confirms full compliance with all code provisions of the Corporate Governance Code set out in Appendix 14 of the HKEX Listing Rules for the six months ended June 30, 2025 - The Company has fully complied with all code provisions of the Corporate Governance Code set out in Appendix 14 of the Listing Rules[137] Compliance with the Model Code for Securities Transactions by Directors The Company has adopted its own code of conduct, whose terms are no less exacting than the Model Code, and all Directors confirmed compliance with it during the period - The Company made specific enquiries to all Directors, who confirmed their compliance with both their own code and the Model Code during the period[138] Audit Committee The Audit Committee, comprising three independent non-executive directors and one non-executive director, is responsible for reviewing and monitoring the Group's financial reporting, internal control, and risk management systems, and has reviewed the interim financial information for the period - The Audit Committee comprises Mr. Ye Xiang (Chairman), Mr. Wang Yuben, Mr. Xu Jinli (Independent Non-executive Directors), and Mr. Li Zheng (Non-executive Director)[139] - The Audit Committee has reviewed the Group's unaudited interim financial information for the six months ended June 30, 2025[140] Change of Chief Executive Officer Mr. Song Wei resigned as CEO due to a parent company management reassignment plan, with Mr. Yang Jie succeeding him, effective February 18, 2025 - Mr. Song Wei resigned as the Company's Chief Executive Officer due to a parent company management reassignment plan, effective February 18, 2025[141] - Mr. Yang Jie succeeded as the current Chief Executive Officer[141] Interim Report The interim report for the six months ended June 30, 2025, will be dispatched to shareholders and published on the HKEX and Company websites in due course - The interim report will be dispatched to the Company's shareholders in due course and published on the HKEX website (www.hkexnews.hk) and the Company's website (www.wuling.com.hk)[142](index=142&type=chunk) Board of Directors As of the announcement date, the Board comprises Mr. Yuan Zhijun (Chairman), Mr. Wei Mingfeng, and Ms. Zhu Fengyan as Executive Directors; Mr. Li Zheng as Non-executive Director; and Mr. Ye Xiang, Mr. Wang Yuben, and Mr. Xu Jinli as Independent Non-executive Directors - The Board of Directors comprises three executive directors, one non-executive director, and three independent non-executive directors[143]