金达控股(00528) - 2025 - 中期业绩

Interim Results Highlights The company turned from profit to loss in H1 2025, driven by a significant drop in linen yarn prices and higher raw material costs - The company turned from profit to loss in H1 2025, mainly due to a significant drop in average linen yarn prices (approximately 30% YoY) and the use of more expensive raw materials purchased in the previous year, despite revenue growth[2] - Average linen yarn prices continuously declined from Q4 2024 to Q2 2025, primarily due to abundant raw material supply from a bumper harvest in 2024, bottoming out at the end of Q2 2025 and showing signs of recovery[2] Interim Results Summary | Indicator | H1 2025 (RMB) | H1 2024 (RMB) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 1,269,510,000 | 1,129,916,000 | 12.4% Growth | | Gross Profit/Loss | Loss 45,467,000 | Profit 198,845,000 | Turned from Profit to Loss | | Loss/Profit for the Period | Loss 121,517,000 | Profit 78,508,000 | Turned from Profit to Loss | | Loss/Profit Attributable to Owners of the Parent | Loss 118,553,000 | Profit 73,961,000 | Turned from Profit to Loss | | Loss/Earnings Per Share | Loss RMB 0.19 | Profit RMB 0.12 | Turned from Profit to Loss | Interim Condensed Consolidated Financial Statements The group's H1 2025 financial performance shifted from profit to loss, driven by substantial changes in key financial metrics Interim Condensed Consolidated Income Statement The Group turned from profit to loss in H1 2025, driven by a significant drop in gross profit and increased cost of sales Interim Condensed Consolidated Income Statement Summary | Indicator | 2025 (RMB '000) | 2024 (RMB '000) | Change (RMB '000) | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Revenue | 1,269,510 | 1,129,916 | 139,594 | 12.4% | | Cost of Sales | (1,314,977) | (931,071) | (383,906) | 41.2% | | Gross Profit | (45,467) | 198,845 | (244,312) | -122.9% | | (Loss)/Profit Before Tax | (144,174) | 108,260 | (252,434) | -233.2% | | (Loss)/Profit for the Period | (121,517) | 78,508 | (199,025) | -253.5% | | (Loss)/Profit Attributable to Owners of the Parent | (118,553) | 73,961 | (192,514) | -260.3% | | Basic (Loss)/Earnings Per Share | RMB (0.19) | RMB 0.12 | | | Interim Condensed Consolidated Statement of Comprehensive Income The Group recorded a comprehensive loss in H1 2025, a reversal from prior period income, mainly due to net loss Interim Condensed Consolidated Statement of Comprehensive Income Summary | Indicator | 2025 (RMB '000) | 2024 (RMB '000) | Change (RMB '000) | | :--- | :--- | :--- | :--- | | (Loss)/Profit for the Period | (121,517) | 78,508 | (199,025) | | Exchange differences on translation of overseas operations | 4,878 | (7,722) | 12,600 | | Total Comprehensive Income for the Period | (116,639) | 70,786 | (187,425) | | Attributable to Owners of the Parent | (113,675) | 66,239 | (179,914) | Interim Condensed Consolidated Statement of Financial Position As of June 30, 2025, total assets and net assets decreased, with inventories down and cash equivalents up Interim Condensed Consolidated Statement of Financial Position Summary | Indicator | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | Change (RMB '000) | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Total Non-current Assets | 1,031,384 | 1,041,403 | (10,019) | -1.0% | | Total Current Assets | 1,850,590 | 2,073,606 | (223,016) | -10.8% | | Inventories | 672,943 | 1,195,126 | (522,183) | -43.7% | | Cash and Cash Equivalents | 534,742 | 230,871 | 303,871 | 131.6% | | Total Current Liabilities | 1,455,674 | 1,596,119 | (140,445) | -8.8% | | Net Current Assets | 394,916 | 477,487 | (82,571) | -17.3% | | Net Assets | 1,332,539 | 1,474,829 | (142,290) | -9.6% | | Total Equity | 1,332,539 | 1,474,829 | (142,290) | -9.6% | Notes to Interim Condensed Consolidated Financial Statements This section details notes on interim consolidated financial statements, covering company info, policies, and segment data Company and Group Information Jinda Holdings Limited, a Cayman Islands-registered company listed in Hong Kong, primarily produces and sells linen yarn - The Company was incorporated in the Cayman Islands on July 21, 2006, and listed on the Hong Kong Stock Exchange on December 12, 2006[7] - The Group is principally engaged in the production and sale of linen yarn[8] Basis of Preparation and Accounting Policies Interim financial information follows IAS 34, consistent with annual statements, with IAS 21 amendments having no impact Basis of Preparation Interim condensed consolidated financial information is prepared under IAS 34 and should be read with the 2024 annual financial statements - The interim condensed consolidated financial information is prepared in accordance with IAS 34 "Interim Financial Reporting"[9] - It should be read in conjunction with the Group's annual financial statements for the year ended December 31, 2024[9] Changes in Accounting Policies Revised IFRS, including IAS 21, were adopted but had no impact as all Group transaction currencies are convertible - Revised IFRS accounting standards, including amendments to IAS 21 regarding lack of exchangeability, were adopted[10][11] - These amendments had no impact on the interim condensed consolidated financial information as all currencies in which the Group transacts are convertible[11] Operating Segment Information The Group operates as a single linen yarn business; geographical revenue shows strong China growth and EU decline Geographical Information Mainland China is the largest revenue source with 25.1% YoY growth; EU sales declined, while non-current assets are in China and Ethiopia Geographical Revenue by Region | Region | 2025 (RMB '000) | 2024 (RMB '000) | YoY Change Rate | | :--- | :--- | :--- | :--- | | Mainland China | 674,368 | 538,944 | 25.1% | | European Union | 233,383 | 253,008 | -7.8% | | Other Countries/Regions | 361,759 | 337,964 | 7.0% | | Total | 1,269,510 | 1,129,916 | 12.4% | Non-current Assets by Region | Region | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | | :--- | :--- | :--- | | Mainland China | 658,456 | 677,472 | | Ethiopia | 325,310 | 338,749 | | Total | 983,766 | 1,016,221 | Information about Major Customers No single customer accounted for 10% or more of the Group's total sales revenue during the reporting period - For the six months ended June 30, 2025, no sales to a single customer accounted for 10% or more of the Group's total revenue[14] Revenue, Other Income and Gains Revenue from yarn and waste sales increased by 12.4% YoY; other income and gains decreased - Revenue refers to the value of sales of linen yarn, hemp yarn, and waste, net of sales tax and after deducting any sales discounts and returns[15] Revenue from Contracts with Customers | Type of Goods or Services | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | Sales of linen yarn, hemp yarn and waste | 1,152,231 | 1,056,673 | | Sales of other products | 100,450 | 50,072 | | Other services | 16,829 | 23,171 | | Total Revenue from Contracts with Customers | 1,269,510 | 1,129,916 | Other Income and Gains | Other Income | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | Government grants | 1,527 | 3,084 | | Bank interest income | 480 | 567 | | Others | 1,593 | 553 | | Total Other Income and Gains | 3,602 | 4,204 | Loss/Profit Before Tax Items Loss before tax was impacted by increased cost of inventories, higher employee benefits, and net exchange differences Loss/Profit Before Tax Items Summary | Item | 2025 (RMB '000) | 2024 (RMB '000) | Change (RMB '000) | | :--- | :--- | :--- | :--- | | Cost of inventories sold | 1,298,148 | 907,900 | 390,248 | | Depreciation of property, plant and equipment and investment properties | 48,634 | 50,846 | (2,212) | | Research and development expenses | 4,747 | 8,746 | (3,999) | | Total employee benefit expenses | 110,318 | 79,101 | 31,217 | | Exchange differences, net | 12,476 | 4,268 | 8,208 | | Impairment provision for inventories | 3,140 | 5,092 | (1,952) | Income Tax The Group recorded an income tax credit in H1 2025, reversing from an expense, primarily due to deferred tax credits and Ethiopian exemptions Income Tax Summary | Item | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | Current period expense | 3,428 | 29,428 | | Deferred | (26,085) | 324 | | Total Tax (Credit)/Expense for the Period | (22,657) | 29,752 | - Ethiopian operations have enjoyed a 5-year profit tax exemption since 2020, extended for another 4 years from 2025[18] - Projects within the Egyptian free zone and dividends from such projects are exempt from income tax under current Egyptian tax laws[18] Dividends The Board decided not to declare any interim dividend for H1 2025, consistent with the previous period - The Board of Directors resolved not to declare any interim dividend for the six months ended June 30, 2025 (six months ended June 30, 2024: nil)[19] Loss/Earnings Per Share The Group recorded a basic and diluted loss per share of RMB 0.19 in H1 2025, a significant decline from H1 2024 earnings Loss/Earnings Per Share Summary | Indicator | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | (Loss)/Profit attributable to ordinary equity holders of the parent | (118,553) | 73,961 | | Weighted average number of ordinary shares in issue during the period (thousands) | 616,447 | 616,447 | | Basic (Loss)/Earnings Per Share | RMB (0.19) | RMB 0.12 | | Diluted (Loss)/Earnings Per Share | RMB (0.19) | RMB 0.12 | - The weighted average number of ordinary shares used for calculating basic earnings per share remained unchanged at 616,447,000 shares[20][22] Trade and Bills Receivables As of June 30, 2025, total trade and bills receivables decreased, with changes in aging structure for trade receivables Trade and Bills Receivables Summary | Item | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | Change (RMB '000) | | :--- | :--- | :--- | :--- | | Trade receivables | 434,000 | 500,657 | (66,657) | | Bills receivables | 68,974 | 38,051 | 30,923 | | Impairment | (1,344) | (1,943) | 599 | | Total | 501,630 | 536,765 | (35,135) | - All of the Group's bills receivables are within six months and are not overdue or impaired[23] Trade Receivables Aging | Aging | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | | :--- | :--- | :--- | | Within one month | 204,156 | 188,641 | | One to two months | 65,101 | 152,549 | | Two to three months | 122,320 | 82,736 | | Over three months | 41,079 | 74,788 | | Total | 432,656 | 498,714 | Trade and Bills Payables As of June 30, 2025, total trade and bills payables significantly decreased from year-end 2024, mainly due to reduced longer-term payables Trade and Bills Payables Aging | Aging | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | Change (RMB '000) | | :--- | :--- | :--- | :--- | | Due within one month or on demand | 96,073 | 147,390 | (51,317) | | Due after one month but within three months | 219,385 | 287,056 | (67,671) | | Over three months | – | 20,250 | (20,250) | | Total | 315,458 | 454,696 | (139,238) | Management Discussion and Analysis This section reviews the Group's business and financial performance, highlighting operational challenges, strategic initiatives, and results Business Review The Group faced declining linen yarn prices, leading to a gross loss despite sales volume growth, while expanding domestic markets and diversifying production Linen Yarn Prices and Sales Volume Average linen yarn prices declined from Q4 2024 to Q2 2025, then recovered; sales volume grew 61.7% YoY, but average selling price fell 30% - Average linen yarn prices continuously declined from Q4 2024 to Q2 2025, showing encouraging signs of recovery at the end of Q2 2025[26] - 11,606 tonnes of linen yarn were sold during the review period, an increase of 61.7% compared to 7,179 tonnes sold in the previous period[26] - The average price of linen yarn decreased by approximately 30% compared to the same period last year[26] Key Markets and Customers The Group's international sales strategy saw domestic growth of 25.1%, while overseas sales slightly increased - The Group implements an international sales strategy with a sales network covering approximately 20 countries and regions worldwide[27] - Domestic sales reached RMB 674.368 million, contributing approximately 53.1% of total revenue, an increase of approximately 25.1% compared to the same period last year[27] - Overseas sales reached approximately RMB 595.142 million, contributing approximately 46.9% of total revenue, a slight increase of approximately 0.7% year-on-year[27] - Total sales to EU countries decreased by 7.8% year-on-year, while total sales to non-EU countries increased by 7.0% year-on-year[27] - The Group continues to expand its domestic market, aiming to collaborate with more target customers in China[27] Raw Material Procurement Flax fiber imports from Europe increased 42.0% YoY in volume, but average purchase price fell 50.9% due to a bumper harvest - Flax fiber is primarily imported from high-quality suppliers in France, Belgium, and the Netherlands[28] - During the review period, the Group procured approximately 23,541 tonnes of raw materials overseas (previous period: 16,583 tonnes), an increase of approximately 42.0% year-on-year[28] - The average purchase price per tonne was approximately RMB 36,320, a decrease of approximately 50.9% compared to approximately RMB 73,999 in the same period last year, due to a bumper harvest in 2024[28] Production Capacity and Expansion The Group operates five production bases, with Chinese factories near full capacity and Ethiopian factory at 70% utilization; a new Egyptian plant is planned for H2 2025 Production Capacity and Utilization | No. | Plant | Location | Country | Annual Capacity (tonnes) | Utilization/Status | | :--- | :--- | :--- | :--- | :--- | :--- | | 1 | Haiyan Phase I Plant | Zhejiang | China | 7,000 | Near 100% | | 2 | Rugao Plant | Jiangsu | China | 6,000 | Near 100% | | 3 | Haiyan Phase II Plant | Zhejiang | China | 5,000 | Near 100% | | 4 | Qinggang Plant | Heilongjiang | China | 4,000 | Near 100% | | 5 | Ethiopia | Adama | Ethiopia | 5,000 | Approx. 70% | - The Ethiopian factory investment helps the Group save on land, labor, energy costs, and tax expenses, and benefits from the EU's "Everything But Arms (EBA)" initiative for least developed countries, enjoying duty-free and quota-free preferential treatment[30] - The Group has obtained a Golden License from the Egyptian Prime Minister's Office and will commence construction of a new plant in Egypt in H2 2025, which will offer tax incentives and qualify for duty-free exports to the EU[30] - During the review period, a total of 40 tonnes of multi-specification hemp yarn were produced, and the Group holds a 78.67% equity interest in the Heilongjiang joint venture, marking its first step into the hemp yarn market[30] Financial Review The Group turned from profit to loss in H1 2025 due to gross loss from declining linen yarn prices Revenue Revenue increased by 12.4% YoY to RMB 1.2695 billion, driven by sales volume growth, offset by a price drop - During the review period, the Group's revenue increased by approximately 12.4% to approximately RMB 1,269.510 million (previous period: RMB 1,129.916 million)[31] - The increase in revenue was mainly due to a 61.7% increase in linen yarn sales volume during the review period compared to the previous year, while the average selling price of linen yarn decreased by approximately 30%[31] Revenue by Sales Region | Sales Region | 2025 (RMB '000) | % of Total | 2024 (RMB '000) | % of Total | YoY Change (RMB '000) | YoY Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | China | 674,368 | 53.1% | 538,944 | 47.7% | 135,424 | 25.1% | | European Union | 233,383 | 18.4% | 253,008 | 22.4% | (19,625) | -7.8% | | Non-European Union | 361,759 | 28.5% | 337,964 | 29.9% | 23,795 | 7.0% | | Total Revenue | 1,269,510 | 100.0% | 1,129,916 | 100.0% | 139,594 | 12.4% | Gross Profit and Gross Margin The Group recorded a gross loss of RMB 45.467 million (3.6% margin) in H1 2025, a reversal from H1 2024 profit - The Group recorded a gross loss of approximately RMB 45.467 million during the review period (previous period: gross profit of approximately RMB 198.845 million)[34] - The gross loss margin for the review period was 3.6% (previous period: gross profit margin of approximately 17.6%)[34] - This was mainly due to the continuous decline in average linen yarn prices (down approximately 30% compared to the same period last year), coupled with the use of some more expensive raw materials from the previous year in the cost of sales for 2025[34] Other Income and Gains Other income and gains decreased, primarily comprising government grants and bank interest income - Other income and gains for the review period were approximately RMB 3.602 million (previous period: approximately RMB 4.204 million)[35] - This primarily included government grants and subsidies of approximately RMB 1.511 million and interest income of approximately RMB 0.480 million[35] Selling and Distribution Expenses Selling and distribution expenses slightly increased but remained stable as a percentage of total revenue - Selling and distribution expenses were approximately RMB 18.402 million (previous period: approximately RMB 16.163 million)[36] - This accounted for approximately 1.4% of the Group's total revenue, the same as the previous period[36] Administrative Expenses Administrative expenses decreased by 5.9% YoY, primarily due to reduced R&D expenses - Administrative expenses were approximately RMB 50.131 million (previous period: approximately RMB 53.273 million), a decrease of approximately 5.9% compared to the same period last year[37] - The decrease in administrative expenses was mainly due to a reduction of approximately RMB 4 million in research and development expenses during the review period[37] Other Expenses Other expenses significantly increased, primarily due to a rise in net exchange losses - Other expenses were approximately RMB 12.747 million (previous period: approximately RMB 7.294 million)[38] - This primarily refers to net exchange losses of RMB 12.476 million during the review period (previous period: RMB 4.268 million)[38] Finance Costs Total finance costs increased, mainly due to higher interest expenses on borrowings from increased bank rates - Total finance costs for the review period were approximately RMB 21.507 million (previous period: approximately RMB 18.660 million)[40] - Interest on borrowings was approximately RMB 21.361 million (previous period: approximately RMB 18.512 million), with the increase mainly due to higher bank borrowing interest rates compared to the previous period[39] Income Tax Credit The Group recorded an income tax credit of RMB 22.657 million in H1 2025, reversing from an expense, with the effective tax rate decreasing - Income tax credit for the review period was approximately RMB 22.657 million (previous period: income tax expense of RMB 29.752 million)[41] - The effective tax rates for the review period and the same period last year were approximately 15.7% and 27.5%, respectively[41] Loss for the Period The Group recorded a loss of RMB 121.5 million in H1 2025, a significant reversal from H1 2024 profit - The Group recorded a loss of approximately RMB 121.517 million during the review period (previous period: profit of approximately RMB 78.508 million)[42] Non-controlling Interests Non-controlling interests accounted for a loss of RMB 2.964 million in H1 2025, reflecting their share in the Group's loss - Non-controlling interests of approximately RMB 2.964 million refer to the loss attributable to minority shareholders of certain subsidiaries of the Group during the review period (previous period: profit attributable of RMB 4.547 million)[43] Loss Attributable to Owners of the Parent In H1 2025, loss attributable to owners of the parent was RMB 118.5 million, a substantial reversal from H1 2024 profit - During the review period, the Group recorded a loss attributable to owners of the parent of approximately RMB 118.553 million (previous period: profit of approximately RMB 73.961 million)[44] Liquidity and Financial Resources Net current assets and total equity decreased, but cash and cash equivalents significantly increased; gearing ratio rose to 78.3% - As of June 30, 2025, the Group's net current assets were approximately RMB 394.916 million (as of December 31, 2024: approximately RMB 477.487 million)[45] - Cash and cash equivalents were approximately RMB 534.742 million (as of December 31, 2024: approximately RMB 230.871 million), an increase of 131.6% year-on-year[45] - The current ratio as of June 30, 2025, was approximately 127.1% (as of December 31, 2024: approximately 129.9%)[45] - The total capital gearing ratio (total borrowings divided by total equity) was approximately 78.3% (as of December 31, 2024: approximately 69.4%)[46] - The Board believes that the Group's existing financial resources are relatively adequate, and if additional funds are required, the Group will consider all possible financing options[46] Capital Commitments As of June 30, 2025, outstanding contractual capital commitments for right-of-use assets decreased, with no authorized but uncontracted commitments - As of June 30, 2025, the Group's outstanding contractual capital commitments for the purchase of right-of-use assets not provided for in the interim condensed consolidated financial statements were approximately RMB 8.240 million (as of December 31, 2024: approximately RMB 13.115 million)[47] - As of June 30, 2025, the Group had no authorized but not yet contracted capital commitments[47] Contingent Liabilities As of June 30, 2025, the Group had no significant contingent liabilities - As of June 30, 2025, the Group had no significant contingent liabilities[48] Pledge of Assets Portions of the Group's property, plant, equipment, and right-of-use assets are pledged as collateral for borrowings - Current interest-bearing bank loans with a carrying amount of RMB 356.869 million are secured by property, plant and equipment with a carrying amount of approximately RMB 129.920 million and right-of-use assets of approximately RMB 31.711 million[49] - Non-current interest-bearing bank borrowings with a carrying amount of RMB 80.000 million are secured by property, plant and equipment with a carrying amount of approximately RMB 12.298 million and right-of-use assets of approximately RMB 20.809 million[49] Significant Acquisitions and Disposals The Group did not undertake any significant acquisitions or disposals of subsidiaries, associates, or joint ventures - During the review period, the Group had no significant acquisitions or disposals of subsidiaries, associates, or joint ventures[50] Material Investments Held The Group held no material investments during the reporting period - The Group held no material investments during the review period[51] Future Plans for Material Investments or Capital Assets The Group plans a new 3,800-tonne linen yarn factory in Egypt, with RMB 200 million capital expenditure funded by internal resources and bank loans - The Group plans to construct a new factory in Egypt with an annual production capacity of 3,800 tonnes of linen yarn[52] - Capital expenditure is estimated at RMB 200 million and will be funded by internal resources and bank loans[52] - Aside from disclosed plans and existing factory maintenance, there are currently no plans to acquire any material investments or capital assets[52] Foreign Currency Risk The Group's transactions are in multiple currencies; exchange rate fluctuations are monitored, with no significant derivative financial assets - The Group's transactions are primarily denominated in Renminbi, US Dollars, Euros, Hong Kong Dollars, and Ethiopian Birr[53] - The Group regularly monitors and properly manages exchange rate fluctuations between these currencies, potentially utilizing credit lines to enter into certain foreign currency forward contracts and derivative financial instruments[53] - As of June 30, 2025, no significant derivative financial assets or liabilities were recorded[53] Remuneration Policy As of June 30, 2025, the Group had 3,706 employees with RMB 110.3 million staff costs, offering competitive remuneration - As of June 30, 2025, the Group employed a total of 3,706 employees (June 30, 2024: 3,736 employees)[54] - Total staff costs incurred during the review period were approximately RMB 110.318 million (previous period: RMB 79.101 million)[54] - The Group provides comprehensive and competitive remuneration, retirement plans, and benefits to its employees, and is required to contribute to China's social security scheme[54] - The remuneration policy is formulated by the Board with reference to each employee's qualifications, experience, responsibilities, contribution to the Group, and prevailing market remuneration levels for similar positions[55] - The Group has also adopted a share option scheme and a share award scheme, aiming to provide incentives and rewards to directors and other employees who have contributed to the Group's business success[55] Miscellaneous Information No significant events affecting the Group have occurred since December 31, 2024, other than those disclosed - Except as disclosed in this announcement, no significant events affecting the Group have occurred since December 31, 2024[56] Key Risks and Uncertainties Key risks include linen yarn demand fluctuations, trade protectionism, raw material supply, transport disruptions, and project execution risks - Key risks include demand for linen yarn, trade protectionism in certain countries, and potential punitive tariffs on products manufactured in China[57] - Stable raw material supply, disruptions to transport routes due to military conflicts in different regions, and increased transport costs[57] - Depreciation of the US Dollar against the Renminbi, execution risks for Ethiopian and Egyptian projects, and epidemic outbreaks leading to production disruptions[57] Outlook and Plans The Group is optimistic about the linen yarn market, planning continued domestic and international development, and a new Egyptian factory in H2 2025 - We remain optimistic about the long-term outlook for the linen yarn market, with linen yarn prices having bottomed out at the end of Q2 2025[58] - The Group will continue to develop both domestic and overseas markets[58] - The Group's factory in Ethiopia is enhancing its operational efficiency and will contribute additional production capacity to the Group[59] - The Group will commence construction of a new factory in Egypt in H2 2025 to further diversify its production bases and meet customer demand[59] Purchase, Sale or Redemption of the Company's Listed Securities The Company and its subsidiaries did not purchase, sell, or redeem any listed securities, holding no treasury shares as of June 30, 2025 - Neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the review period[60] - As of June 30, 2025, the Company held no treasury shares[60] Corporate Strategy and Long-term Business Model The Group aims to enhance long-term shareholder returns and become a leading global linen yarn manufacturer through financial strength, global production, and innovation - The Group's primary objective is to enhance long-term total shareholder returns[61] - The Group's strategy is to build a solid financial foundation, deliver sustained returns, implement a globalized production layout strategy, commit to sustainable development and technological innovation, develop independent intellectual property rights, engage in product brand marketing, and pursue management excellence[61] - The Group is determined to become one of the largest linen yarn manufacturers globally, creating or maintaining value in the long term[61] Corporate Governance and Other Information This section details the Company's corporate governance practices, including dividend policy, share incentive schemes, and listing rule compliance Interim Dividend The Board resolved not to recommend any interim dividend for H1 2025, consistent with the previous period - The Board of Directors resolved not to recommend the declaration of any interim dividend for the six months ended June 30, 2025 (June 30, 2024: nil)[62] Share Option Scheme The Company adopted a share option scheme in 2016 to incentivize contributors; no options have been granted since adoption - The Company adopted a share option scheme on May 30, 2016, to provide incentives and rewards to any director, employee, consultant, customer, supplier, agent, business partner, or advisor or contractor who has contributed to the Group's business success[63] - No share options have been granted under the scheme since its adoption on May 30, 2016[63] - As of June 30, 2025, the number of share options available for grant under the share option scheme was 62,967,800, representing approximately 10% of the issued shares[63] Share Award Scheme The Company adopted a share award scheme in 2016 to incentivize and align interests; shares are market-purchased, with limits - The Company adopted a share award scheme on August 26, 2016, to incentivize, recognize, and reward eligible persons for their contributions to the Group, attract and retain personnel, and align the interests of award holders with those of shareholders[64] - Awards will be satisfied by shares purchased in the market at prevailing market prices, and no new shares will be allotted and issued under the share award scheme[64] - If the grant of any awarded shares to a selected person would result in the total number of shares granted to that selected person exceeding 1% of the issued shares within the 12-month period up to the date of such grant, it shall be subject to shareholders' approval at a general meeting[65] - The maximum number of shares purchased by the trustee under the share award scheme in any financial year of the Company shall not exceed 5% of the issued shares at the beginning of that financial year[65] - As of June 30, 2025, the remaining 13,230,750 shares held by the trustee (representing approximately 2.1% of the issued shares as of June 30, 2025) have not yet been granted to any eligible persons under the share award scheme and are available for future grants[66] Events After the Reporting Period As of the date of this announcement, no significant disclosable events have occurred after June 30, 2025 - No significant disclosable events after June 30, 2025, have occurred up to the date of this announcement[67] Standard Code for Securities Transactions by Directors The Company adopted a code for directors' securities transactions, no less exacting than the Model Code; all directors confirmed compliance - The Company has adopted its own code of conduct for directors' securities transactions, with terms no less exacting than the Model Code for Securities Transactions by Directors of Listed Issuers set out in Appendix C3 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[68] - Following specific enquiries made to all Directors, all Directors have confirmed that they have complied with the required standards set out in the Model Code and the Company's code of conduct regarding directors' securities transactions throughout the review period and up to the date of this announcement[68] Compliance with Corporate Governance Code The Company generally complied with the Corporate Governance Code, with one deviation regarding the Chairman's dual role - The Company has complied with the code provisions set out in Part 2 of the Code throughout the review period, except for the deviation from code provision C.2.1 of the Corporate Governance Code set out in Appendix C1 to the Listing Rules as disclosed below[69] - Deviation from code provision C.2.1: Mr. Ren Weiming is the Chairman of the Company and is also responsible for overseeing the general operations of the Group, a role that should not be held by the same individual[70] - The Board believes that this structure will not impair the balance of power and authority between the Board and the Company's management, and contributes to strong and stable leadership[70] Audit Committee and Review of Interim Results The Audit Committee, comprising three independent non-executive directors, reviews financial reporting and internal controls, and has reviewed interim results - The Company has established an Audit Committee in compliance with Listing Rules 3.21 and 3.22[71] - The Audit Committee comprises three independent non-executive directors: Mr. Liu Yingjie (Chairman), Ms. Zhang Chan, and Mr. Fan Lei[71] - The primary responsibilities of the Audit Committee are to review and monitor the Group's financial reporting process, risk management, and internal control systems[71] - The Group's interim results for the review period have been reviewed by the Audit Committee, with no disagreements[71] Acknowledgement and Board Composition The Chairman thanked the Board and employees; the Board comprises executive, non-executive, and independent non-executive directors - The Chairman of the Company expressed gratitude to all Directors for their valuable advice and guidance, and to all employees of the Group for their diligent work and loyal service to the Group[72] - As of the date of this announcement, the executive directors are Mr. Ren Weiming, Mr. Shen Yueming, Mr. Zhang Hongwen, Mr. Ren Zhong, and Mr. Tang Tianheng; the non-executive director is Mr. Yan Jintang; and the independent non-executive directors are Mr. Liu Yingjie, Ms. Zhang Chan, and Mr. Fan Lei[74]