脑洞科技(02203) - 2025 - 中期业绩

Financial Performance This section provides an overview of the company's financial results, including income, balance sheet, equity, and cash flow statements, highlighting key changes and performance indicators Unaudited Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income During the reporting period, the company experienced a decrease in both turnover and gross profit, leading to a shift from profit to loss, an expanded loss for the period, and a significant increase in basic and diluted loss per share Key Data from Profit or Loss and Other Comprehensive Income | Metric | 2025 H1 (HK$ thousand) | 2024 H1 (HK$ thousand) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Turnover | 52,173 | 83,084 | -37.2% | | Cost of sales | (43,080) | (72,146) | -40.3% | | Gross profit | 9,093 | 10,938 | -16.9% | | Other income | 7,620 | 2,787 | +173.4% | | Other gains / (losses) | 1,158 | 20,505 | -94.4% | | Selling and distribution costs | (2,277) | (3,771) | -39.6% | | Administrative expenses | (26,652) | (24,602) | +8.3% | | Impairment loss on trade receivables and contract assets | (1,802) | – | N/A | | Finance costs | (3,291) | (4,755) | -30.8% | | Profit / (Loss) before tax | (16,151) | 1,102 | Shift from profit to loss | | Income tax expense | (1,093) | (450) | +142.9% | | Profit / (Loss) for the period | (17,244) | 652 | Shift from profit to loss | | Total comprehensive expense for the period attributable to owners of the Company | (15,174) | 270 | Shift from profit to loss | | Earnings / (Loss) per share – basic and diluted (HK cents) | (2.16) | 0.08 | Shift from profit to loss | Unaudited Condensed Consolidated Statement of Financial Position As of June 30, 2025, the company's net current assets, total assets less current liabilities, and net assets all shifted from negative to positive, primarily due to the issuance of perpetual bonds, significantly improving the capital structure Key Financial Position Data | Metric | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change | | :--- | :--- | :--- | :--- | | Non-current assets | 27,372 | 31,462 | -13.0% | | Current assets | 107,896 | 121,278 | -11.0% | | Current liabilities | 107,063 | 211,128 | -49.3% | | Net current assets / (liabilities) | 833 | (89,850) | Shift from negative to positive | | Total assets less current liabilities / (net current liabilities) | 28,205 | (58,388) | Shift from negative to positive | | Non-current liabilities | 287 | 681 | -57.8% | | Net assets / (net liabilities) | 27,918 | (59,069) | Shift from negative to positive | | Share capital | 8,000 | 8,000 | 0% | | Reserves | (80,082) | (67,069) | -19.4% | | Deficiency in shareholders' equity | (72,082) | (59,069) | -22.0% | | Perpetual bonds | 100,000 | – | New addition | | Total equity / (deficiency) | 27,918 | (59,069) | Shift from negative to positive | - The company significantly improved its capital structure by issuing HK$100,000 thousand in perpetual bonds, shifting total equity from a deficiency to a positive value[7] Unaudited Condensed Consolidated Statement of Changes in Equity During the reporting period, the company significantly increased total equity by issuing HK$100,000 thousand in perpetual bonds, resulting in a substantial improvement in overall equity despite recording a loss for the period Key Data on Changes in Equity | Metric | 2025 H1 (HK$ thousand) | 2024 H1 (HK$ thousand) | | :--- | :--- | :--- | | Profit / (Loss) for the period | (17,241) | 652 | | Exchange differences arising from translation of overseas operations | 4,228 | (382) | | Total comprehensive expense for the period | (13,013) | 270 | | Issuance of perpetual bonds | 100,000 | – | | Total at end of period | 27,918 | 71,228 | - The issuance of HK$100,000 thousand in perpetual bonds was a key factor in the period's equity changes, significantly improving the company's total equity position[8] Unaudited Condensed Consolidated Statement of Cash Flows During the reporting period, cash outflow from operating activities decreased, and cash inflow from investing activities significantly increased, but financing activities shifted from net inflow to net outflow, resulting in a net decrease in cash and cash equivalents Key Cash Flow Data | Metric | 2025 H1 (HK$ thousand) | 2024 H1 (HK$ thousand) | Change | | :--- | :--- | :--- | :--- | | Net cash used in operating activities | (11,443) | (24,642) | Outflow decreased | | Net cash generated from investing activities | 9,077 | 844 | Significantly increased | | Net cash (used in) / generated from financing activities | (2,964) | 26,583 | Shifted from inflow to outflow | | Net (decrease) / increase in cash and cash equivalents | (5,330) | 2,785 | Shifted from increase to decrease | | Cash and cash equivalents at end of period | 25,054 | 45,838 | -45.3% | - Net cash inflow from investing activities significantly increased, primarily due to proceeds from the disposal of property, plant and equipment and non-current assets classified as held for sale[10] - Financing activities shifted from net inflow to net outflow, mainly due to repayment of loans from the ultimate controlling party and principal portions of lease liabilities[10] Notes to the Unaudited Condensed Consolidated Financial Results This section provides detailed explanatory notes to the unaudited condensed consolidated financial statements, covering general information, accounting policies, segment information, and specific financial items 1. General Information The company is incorporated in the Cayman Islands, primarily engaged in investment holding, with subsidiaries involved in semiconductor production and trading, broadband infrastructure construction, and smart field solutions, and Mr Zhang Liang is the ultimate controlling party - The company was incorporated in the Cayman Islands and has been listed on the Stock Exchange since 2017[11] - Its principal business is investment holding, with subsidiaries engaged in semiconductor production and trading, broadband infrastructure construction, and integrated solutions for smart field applications[11] - The ultimate controlling party is Mr Zhang Liang[11] 2. Basis of Preparation and Accounting Policies The interim financial statements are prepared in accordance with HKAS 34 and HKEX Listing Rules, with accounting policies consistent with the 2024 annual financial statements, and new amendments are assessed to have no significant impact - The interim financial statements have been prepared in accordance with Hong Kong Accounting Standard 34 Interim Financial Reporting issued by the HKICPA and the applicable disclosure requirements of the Listing Rules[12] - The accounting policies are consistent with those adopted in the 2024 annual financial statements, and the impact of HKAS 21 (Revised) The Effects of Changes in Foreign Exchange Rates has been assessed as having no significant effect on performance and financial position[12][14] 3. Turnover and Segment Information The company's business is divided into four reportable segments: production, trading, broadband infrastructure and smart fields, and strategic investments, with significant growth in broadband infrastructure and smart fields, and a substantial decline in production and trading revenue this period - The Group's reportable and operating segments include: production, trading, broadband infrastructure and smart fields, and strategic investments[17][18] Segment Revenue Analysis (HK$ thousand) | Segment | 2025 H1 | 2024 H1 | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Production | – | 34,559 | -100% | | Trading | 713 | 22,859 | -96.9% | | Broadband Infrastructure and Smart Fields | 51,929 | 25,666 | +102.3% | | Strategic Investments | – | – | N/A | | Total | 52,642 | 83,084 | -36.6% | Segment Revenue and Results In 2025 H1, production and trading segment revenue significantly decreased, broadband infrastructure and smart fields revenue doubled, but strategic investment segment profit substantially declined, leading to an overall loss before tax Segment Revenue and Results (HK$ thousand) | Segment | 2025 H1 Revenue | 2024 H1 Revenue | 2025 H1 (Loss) Profit | 2024 H1 (Loss) Profit | | :--- | :--- | :--- | :--- | :--- | | Production | – | 34,559 | – | (1,956) | | Trading | 713 | 22,859 | 58 | 721 | | Broadband Infrastructure and Smart Fields | 51,929 | 25,666 | (266) | 3,605 | | Strategic Investments | – | – | 529 | 21,197 | | Total | 52,642 | 83,084 | 321 | 23,567 | | Profit / (Loss) before tax | | | (16,151) | 1,102 | - Strategic investment segment profit significantly decreased from HK$21,197 thousand in 2024 H1 to HK$529 thousand in 2025 H1, a 97.5% decrease[20] Segment Assets and Liabilities As of June 30, 2025, production and trading segment assets were zeroed out, broadband infrastructure and smart fields assets increased, strategic investment assets slightly grew, and unallocated liabilities significantly decreased Segment Assets and Liabilities (HK$ thousand) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Segment Assets | | | | Production | – | 18,267 | | Trading | – | 2,482 | | Broadband Infrastructure and Smart Fields | 60,331 | 56,424 | | Strategic Investments | 51,539 | 48,228 | | Unallocated | 23,398 | 27,339 | | Total Assets | 135,268 | 152,740 | | Segment Liabilities | | | | Production | – | 3,286 | | Trading | – | 822 | | Broadband Infrastructure and Smart Fields | 40,723 | 39,899 | | Unallocated | 66,627 | 167,802 | | Total Liabilities | 107,350 | 212,434 | - Production and trading segment assets both decreased to zero as of June 30, 2025, reflecting business adjustments[21] - Unallocated liabilities significantly decreased from HK$167,802 thousand as of December 31, 2024, to HK$66,627 thousand as of June 30, 2025[21] 4. Other Gains / (Losses) During the reporting period, gains from fair value changes of financial assets at fair value through profit or loss significantly decreased, leading to a substantial decline in total other gains Other Gains / (Losses) (HK$ thousand) | Metric | 2025 H1 | 2024 H1 | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Fair value changes of financial assets at fair value through profit or loss | 1,158 | 20,505 | -94.4% | | Total | 1,158 | 20,505 | -94.4% | 5. Finance Costs During the reporting period, finance costs primarily stemmed from interest on loans from the ultimate controlling party, with total finance costs decreasing year-on-year Finance Costs (HK$ thousand) | Metric | 2025 H1 | 2024 H1 | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Interest on lease liabilities | 99 | 136 | -27.3% | | Interest on loans from ultimate controlling party | 3,192 | 4,424 | -27.8% | | Loss on early repayment of loans | – | 195 | -100% | | Total | 3,291 | 4,755 | -30.8% | 6. Income Tax Expense Income tax expense for the reporting period was primarily driven by PRC enterprise income tax and under-provision in prior years, leading to an increase in total tax expense year-on-year Income Tax Expense (HK$ thousand) | Metric | 2025 H1 | 2024 H1 | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Current tax: PRC | 7 | – | N/A | | Under-provision in prior years: PRC | 1,086 | – | N/A | | Deferred tax | – | 450 | -100% | | Total | 1,093 | 450 | +142.9% | - Guangzhou Zhiwang is recognized as a 'High and New Technology Enterprise' by the PRC government, enjoying a preferential tax rate of 15%[26] - Hong Kong profits tax is calculated under a two-tiered system, with the first HK$2,000,000 of assessable profits taxed at 8.25% and the remainder at 16.5%[27] 7. Profit / (Loss) for the Period During the reporting period, the company shifted from profit to loss, primarily influenced by factors such as inventory amounts, depreciation, R&D costs, staff costs, and gains from disposal of property, plant and equipment Factors Affecting Profit / (Loss) for the Period (HK$ thousand) | Metric | 2025 H1 | 2024 H1 | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Amount of inventories recognized as expense | 711 | 57,419 | -98.8% | | Amortization of intangible assets | 93 | 89 | +4.5% | | Depreciation of property, plant and equipment | 1,825 | 2,430 | -24.9% | | Depreciation of right-of-use assets | 1,246 | 1,109 | +12.4% | | Research and development costs | 2,212 | 2,232 | -0.9% | | Write-off of property, plant and equipment | 174 | 3 | +5700% | | Government grants | (36) | (22) | +63.6% | | Gain on disposal of property, plant and equipment | (4,648) | (885) | +425.2% | | Total staff costs | 15,077 | 22,305 | -32.4% | - Total staff costs significantly decreased, mainly due to reduced salaries and allowances and a shift from contributions to refunds in retirement benefit schemes[28] 8. Earnings / (Loss) Per Share During the reporting period, the company's basic and diluted earnings per share shifted from positive to negative, reflecting an overall deterioration in performance Earnings / (Loss) Per Share | Metric | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | | (Loss) / Profit for the purpose of calculating basic and diluted (loss) / earnings per share | (17,244,000) HK$ | 652,000 HK$ | | Weighted average number of ordinary shares | 800,000,000 | 800,000,000 | | Basic and diluted (loss) / earnings per share (HK cents) | (2.16) | 0.08 | - As there were no potential dilutive ordinary shares during the period, diluted earnings / (loss) per share was the same as basic earnings / (loss) per share[31] 9. Dividends During the reporting period, the company neither declared nor proposed any interim dividends - No interim dividends were declared or proposed for the period[32] 10. Property, Plant and Equipment During the reporting period, acquisitions of property, plant and equipment significantly decreased, while proceeds and gains from disposals substantially increased, alongside an increase in write-offs Changes in Property, Plant and Equipment (HK$ thousand) | Metric | 2025 H1 | 2024 H1 | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Acquisition of property, plant and equipment | 3 | 273 | -98.9% | | Proceeds from disposal of property, plant and equipment | 1,776.2 | 885 | +100.7% | | Net gain on disposal | 1,057.8 | 885 | +19.5% | | Write-off of property, plant and equipment | 174 | 3 | +5700% | 11. Trade and Other Receivables As of June 30, 2025, total trade and other receivables significantly decreased, primarily due to a substantial decline in trade receivables, with an increased proportion of trade receivables over 365 days Trade and Other Receivables (HK$ thousand) | Metric | June 30, 2025 | December 31, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Trade receivables (net of impairment allowance) | 11,227 | 32,782 | -65.8% | | Deposits and other receivables | 2,803 | 1,561 | +79.6% | | Recoverable VAT | – | 872 | -100% | | Prepayments | 2,282 | 2,900 | -21.4% | | Total trade and other receivables | 16,312 | 38,115 | -57.2% | Ageing Analysis of Trade Receivables (HK$ thousand) | Ageing | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | 0 to 30 days | – | 10,166 | | 31 to 90 days | – | 8,666 | | 91 to 365 days | 6,350 | 9,461 | | Over 365 days | 4,877 | 4,489 | | Total | 11,227 | 32,782 | - The Group grants credit terms of up to 90 days to customers in the production and trading segments, while credit terms for broadband infrastructure and smart fields customers are mutually agreed upon[36] 12. Trade and Other Payables As of June 30, 2025, total trade and other payables slightly decreased, with trade payables remaining stable, but accrued staff costs significantly declined, and the proportion of trade payables aged seven to twelve months increased Trade and Other Payables (HK$ thousand) | Metric | June 30, 2025 | December 31, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Trade payables | 32,886 | 32,908 | -0.1% | | Accrued staff costs | 1,269 | 3,964 | -68.0% | | Accrued expenses and other payables | 8,321 | 7,024 | +18.5% | | Total trade and other payables | 42,476 | 43,896 | -3.2% | Ageing Analysis of Trade Payables (HK$ thousand) | Ageing | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Within 3 months | 7,500 | 7,820 | | 4 to 6 months | 4,592 | 5,815 | | 7 to 12 months | 14,875 | 10,531 | | Over 1 year | 6,119 | 8,742 | | Total | 32,886 | 32,908 | - Credit terms for purchases range from 30 to 180 days, and the Group has established financial risk management policies to ensure all payables are settled within the credit period[39] 13. Capital Commitments As of June 30, 2025, the Group's contracted but unprovided capital commitments were approximately HK$ zero, consistent with December 31, 2024 Capital Commitments (HK$ thousand) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Capital commitments | – | – | 14. Approval of Unaudited Condensed Consolidated Financial Results The unaudited condensed consolidated financial results were approved and authorized for issue by the Board on August 27, 2025 - The unaudited condensed consolidated financial results were approved and authorized for issue by the Board on August 27, 2025[41] 15. Events After the Reporting Period As of the date of this announcement, no significant events have occurred after the reporting period - No significant events occurred after June 30, 2025, subsequent to the period and up to the date of this announcement[42] Business Review This section provides an overview of the company's operational performance across its key business segments, including broadband infrastructure, smart fields, semiconductors, and strategic investments Broadband Infrastructure and Smart Fields Business Affected by China's real estate market controls and 'speed-up and fee-reduction' policies, this business faces challenges but achieved new growth by optimizing product portfolios, managing costs, and expanding overseas smart product sales - Primarily engaged in broadband infrastructure construction and providing integrated solutions for smart field applications, including smart homes, smart parks, and smart communities[43] - Challenges faced include: liquidity contraction in China's real estate sector, extended project completion cycles, and 'speed-up and fee-reduction' policies exerting downward pressure on broadband infrastructure profitability[43] - Response strategies include: implementing more prudent and conservative cost management and new project investment strategies, focusing resources on projects with stronger profitability and more stable cash flow[43] - New growth drivers include: integrating internal resources to develop smart product sales and successfully entering overseas markets[43] Semiconductor Business Affected by global inflation, monetary tightening policies, and geopolitical risks, weak demand in the consumer electronics market led to a 99.0% plunge in semiconductor business revenue, prompting management to shut down relevant production lines to curb losses - Core business primarily involves packaging and testing of discrete devices and manufacturing of proprietary products, supplemented by third-party semiconductor product trading[44] - Market environment: global inflation and monetary tightening policies severely suppressed demand in the consumer electronics market, leading to a downturn in traditional products like smartphones and personal computers[44] - Performance impact: revenue from semiconductor manufacturing and trading plummeted by 99.0% year-on-year[44] - Countermeasures: management decided to shut down relevant production lines to curb further losses[44] - Future outlook: the Board will continue to review this business line to ensure the Group's overall financial stability[45] Strategic Investment Business The company is optimistic about technological innovation and Web3.0, aiming to diversify its investment portfolio, and has invested in listed equity securities, but held no cryptocurrencies during the period, with future consideration for increased cryptocurrency investments - The Group believes technological innovation is a key engine for future economic development, aiming to seize investment opportunities and actively diversify its investment portfolio in innovative technology sectors[46] - Consistent with the Hong Kong government's views on regional virtual asset development, the company explores new prospects offered by blockchain and Web3.0, and will strive to strengthen and diversify its investment portfolio, considering increased cryptocurrency investments when appropriate[48][49] - During the period, investments in listed equity securities had a total acquisition cost of approximately HK$106.9 million, a total book value of disposals of approximately HK$91.1 million, net realized gains of approximately HK$9.5 million, and unrealized losses of approximately HK$9.0 million[50] Listed Equity Securities The company primarily invests in equity securities and options of leading technology companies and high-quality large enterprise groups listed in the US, China, and Hong Kong, realizing gains but also incurring unrealized losses during the period - Investment targets primarily include leading technology companies and high-quality large enterprise groups listed in the US, mainland China, and Hong Kong[50] Listed Equity Securities Investment Status (HK$ thousand) | Metric | Amount | | :--- | :--- | | Total acquisition cost | 106,900 | | Total book value of disposals | 91,100 | | Net proceeds from disposals | 100,600 | | Net realized gains | 9,500 | | Unrealized losses | 9,000 | - The Group will closely monitor and evaluate the performance of these investments and make timely and appropriate adjustments to the investment portfolio[50] Financial Review This section provides a detailed analysis of the company's financial performance, including turnover, gross profit, financial asset fair value changes, operating expenses, and liquidity Turnover Turnover decreased by 36.6% year-on-year during the reporting period, primarily due to a 98.8% substantial reduction in semiconductor business turnover, while broadband infrastructure and smart fields segment turnover increased by 102.3% year-on-year Turnover Comparison (HK$ million) | Segment | 2025 H1 | 2024 H1 | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Total Turnover | 52.6 | 83.1 | -36.6% | | Semiconductor Business | 0.7 | 57.4 | -98.8% | | Broadband Infrastructure and Smart Fields | 51.9 | 25.7 | +102.3% | - The decrease in semiconductor business turnover was mainly due to concerns over high inflation and interest rate hikes, and the Board's decision to temporarily suspend certain related production lines to curb losses[51] - The increase in broadband infrastructure and smart fields segment turnover was primarily due to an increase in smart field solution projects[52] Gross Profit and Gross Profit Margin Gross profit decreased by 13.8% year-on-year during the reporting period, mainly impacted by declining semiconductor business turnover and gross profit margin; overall gross profit margin increased by 4.7 percentage points to 17.9%, but the broadband infrastructure and smart fields segment's gross profit margin decreased due to increased smart field solution services Gross Profit and Gross Profit Margin Comparison (HK$ million) | Metric | 2025 H1 | 2024 H1 | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Total Gross Profit | 9.4 | 10.9 | -13.8% | | Overall Gross Profit Margin | 17.9% | 13.2% | +4.7 percentage points | | Semiconductor Business Gross Profit | 0.1 | 0.8 | -87.5% | | Semiconductor Business Gross Profit Margin | 9.3% | 1.4% | +7.9 percentage points | | Broadband Infrastructure and Smart Fields Gross Profit | 9.4 | 10.1 | -6.9% | | Broadband Infrastructure and Smart Fields Gross Profit Margin | 18.0% | 41.0% | -23.0 percentage points | - The decrease in semiconductor business gross profit and increase in gross profit margin were mainly due to changes in product types and quantities sold, as well as management's implementation of operational suspension[54] - The decrease in broadband infrastructure and smart fields gross profit margin was primarily due to an increase in smart field solution services, which have relatively lower gross profit margins[54] Fair Value Changes of Financial Assets at Fair Value Through Profit or Loss During the reporting period, the company realized gains from the disposal of listed equity securities, but incurred unrealized losses on held securities and options, resulting in total other gains of HK$0.5 million Fair Value Changes of Financial Assets (HK$ million) | Metric | Amount | | :--- | :--- | | Net realized gains | 9.5 | | Unrealized losses | (9.0) | | Total other gains | 0.5 | Selling and Distribution Costs Selling and distribution costs decreased by 39.5% year-on-year during the reporting period, primarily due to reduced commission expenses paid to third-party agents as a result of declining semiconductor business sales Selling and Distribution Costs Comparison (HK$ million) | Metric | 2025 H1 | 2024 H1 | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Selling and distribution costs | 2.3 | 3.8 | -39.5% | - The decrease was mainly due to reduced commission expenses paid to third-party agents, consistent with the decline in semiconductor customer sales[56] Administrative Expenses Administrative expenses increased by 8.5% year-on-year during the reporting period, primarily due to increased employee severance costs Administrative Expenses Comparison (HK$ million) | Metric | 2025 H1 | 2024 H1 | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Administrative expenses | 26.7 | 24.6 | +8.5% | - The increase was mainly due to higher employee severance costs incurred by the Group during the period[58] Income Tax Expense Income tax expense increased year-on-year during the reporting period, primarily due to deferred tax implications arising from the disposal of property, plant and equipment Income Tax Expense Comparison (HK$ million) | Metric | 2025 H1 | 2024 H1 | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Income tax expense | 1.1 | 0.5 | +120% | - The increase in income tax expense was mainly due to deferred tax implications arising from the disposal of property, plant and equipment[59] Profit / (Loss) for the Period During the reporting period, the company shifted from profit to a net loss of HK$17.2 million, a HK$17.9 million decrease compared to the same period last year, primarily influenced by the combined financial factors mentioned above Profit / (Loss) for the Period Comparison (HK$ million) | Metric | 2025 H1 | 2024 H1 | Change | | :--- | :--- | :--- | :--- | | Net Loss | (17.2) | 0.7 (Net Profit) | Decrease of HK$17.9 million | Liquidity, Financial Resources and Capital Structure The company's operations are primarily funded by internal cash flow, with reduced capital commitments, no outstanding bank borrowings, a zero gearing ratio, and maintained prudent cash and financial management policies - The Group's operations are primarily funded by internally generated cash flows[61] Capital Commitments Comparison (HK$ million) | Metric | June 30, 2025 | December 31, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Outstanding capital commitments | 3.0 | 3.9 | -23.1% | - The Group has no outstanding bank borrowings, and its gearing ratio is zero[62] - The Group adopts prudent cash and financial management policies, with financial activities primarily conducted through bank deposits denominated in HKD, USD, or RMB[62] Material Investments / Material Acquisitions and Disposals Aside from investments in listed equity securities disclosed in the strategic investment business, there were no other material investments, acquisitions, or disposals of subsidiaries during the reporting period - Except as disclosed in the strategic investment business, the Group made no other material investments or material acquisitions and disposals of subsidiaries during the period[64] Contingent Liabilities As of June 30, 2025, the company had no material contingent liabilities - As of June 30, 2025, the Group had no material contingent liabilities[65] Foreign Exchange Fluctuation Risk The company faces foreign currency risk, primarily involving USD and RMB, but currently has no foreign currency hedging policy; the Board will continue to monitor and consider hedging when necessary - The Group is exposed to foreign currency risk, with approximately 23.5% of sales and 2.1% of purchases denominated in currencies other than the functional currency of the relevant Group entities[66] Foreign Currency Denominated Monetary Assets and Liabilities (HK$ thousand) | Currency | June 30, 2025 Assets | December 31, 2024 Assets | June 30, 2025 Liabilities | December 31, 2024 Liabilities | | :--- | :--- | :--- | :--- | :--- | | USD | 52,029 | 83,289 | 710 | 610 | | RMB | 613 | 24 | 0 | 7 | | Total | 52,642 | 83,313 | 710 | 617 | - The Group currently has no foreign currency hedging policy, but the Directors will continue to monitor foreign exchange risk and consider hedging when necessary[66] Other Information This section covers additional important details including human resources, reserves, dividends, business outlook, corporate governance, and securities trading policies Staff and Remuneration As of June 30, 2025, the company employed 67 full-time staff, with a year-on-year decrease in staff costs, and actively recruits, develops, and retains talent through training, performance-linked remuneration, and clear career paths - As of June 30, 2025, the Group employed 67 full-time staff, with approximately 96.7% employed in China and 3.3% in Hong Kong[67] Staff Costs Comparison (HK$ million) | Metric | 2025 H1 | 2024 H1 | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Staff costs (including Directors' emoluments) | 15.1 | 22.3 | -32.7% | - The Group actively implements strategies for recruiting, developing, and retaining talent through regular training, performance-linked remuneration and rewards, and establishing clear career paths[67] Reserves Changes in the company's reserves during the reporting period are presented in the unaudited condensed consolidated statement of changes in equity - Changes in the Group's reserves during the period are set out in the unaudited condensed consolidated statement of changes in equity above[68] Dividends The Board does not recommend the payment of any interim dividend for the period - The Board does not recommend the payment of any interim dividend for the period[69] Business Outlook Looking ahead, the semiconductor business will continue to face challenges, prompting the company to adopt a cautious stance and seek technological innovation opportunities; the broadband infrastructure and smart fields business, supported by Chinese policies, will expand into overseas markets and pursue acquisition targets in smart living, AI, and IoT, while diversifying Web3.0 investments - Semiconductor business: the unpredictable global economic environment, US-China trade tensions, and geopolitical conflicts impact supply chains, with uncertain growth momentum in the consumer market; the Group will adopt a cautious stance, potentially suspending business operations and reallocating resources to smart product trading[70] - Broadband infrastructure and smart fields business: benefiting from China's '14th Five-Year Plan' support for innovation and technological development, aiming to become a smart field solution integrator and successfully expanding its smart product business into overseas markets[71] - Strategic investments: will continue to explore other acquisition targets, primarily focusing on smart living-related technologies, AI, and IoT sectors, and considering diversification into innovative technology and Web3.0 investments[71] Code of Conduct Regarding Securities Transactions by Directors The company has adopted a standard code for directors' securities transactions no less exacting than Appendix C3 of the Listing Rules, with no instances of non-compliance identified during the reporting period - The company has adopted a standard code for directors' securities transactions, with terms no less exacting than the required standards set out in Appendix C3 of the Listing Rules[72] - Following enquiry, the company is not aware of any non-compliance with the standard code for directors' securities transactions during the period[72] Competing Interests During the reporting period, none of the company's directors or controlling shareholders and their close associates held any interests competing with the Group's business or had any other conflicts of interest - During the period, none of the company's Directors or controlling shareholders and their respective close associates had any interests in businesses competing or likely to compete with the Group's business, or any other conflicts of interest with the Group[73] Corporate Governance Practices The company is committed to high standards of corporate governance, with a separation of Chairman and Chief Executive roles; however, the Chief Executive position remains vacant, and the Board considers the current arrangements appropriate and will continue to review them - The company is committed to achieving high standards of corporate governance, believing that sound and reasonable corporate governance practices are crucial for the Group's sustained growth and safeguarding shareholders' interests[74] - The roles of Chairman and Chief Executive should be separate and not held by the same individual; Mr Zhang Liang serves as the Chairman of the Board, while the Chief Executive position has been vacant since February 1, 2021[75] - The Board believes the current arrangements are appropriate and in the best interests of the company, and will continue to review the effectiveness of the company's structure[75] Audit Committee The Audit Committee comprises three independent non-executive Directors, with Mr Xu Liang as Chairman possessing appropriate professional accounting qualifications, and has reviewed and approved the financial results for the period - The company's Audit Committee consists of three independent non-executive Directors, with Mr Xu Liang as Chairman, possessing appropriate professional accounting qualifications and experience[76] - Key responsibilities include providing recommendations on the appointment of external auditors, monitoring the integrity of financial statements, and overseeing financial reporting, risk management, and internal control systems[76] - The Audit Committee has reviewed this announcement and the Group's unaudited condensed consolidated financial results for the period, deeming them compliant with applicable accounting standards and adequately disclosed[76] Purchase, Sale or Redemption of the Company's Listed Securities During the reporting period, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities - Neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities during the period[77] Definitions This section provides definitions for key terms used throughout the report to ensure consistent understanding of the content Definitions This chapter provides definitions for key terms used in the report to ensure consistent understanding of the content - This chapter defines key terms used in the report, such as 'Board', 'Corporate Governance Code', 'Company', 'Group', 'Guangzhou Zhiwang', 'HKFRSs', 'Listing Rules', 'Period', 'PRC', 'RMB', 'USD', and others[78][81] Board of Directors This section lists the members of the Board of Directors as of the announcement date, including executive and independent non-executive directors Board Members This chapter lists the Board members as of the announcement date, including Executive Director Mr Zhang Liang and Independent Non-executive Directors Mr Xu Liang, Mr Chan Sit, and Ms Zhang Yibo - As of the announcement date, the Board includes Executive Director Mr Zhang Liang (Chairman and Executive Director)[79][80] - Independent Non-executive Directors include Mr Xu Liang, Mr Chan Sit, and Ms Zhang Yibo[80]