爱康医疗(01789) - 2025 - 中期业绩

Financial Highlights Financial Highlights Overview AK Medical Holdings Limited reported unaudited interim results for the six months ended June 30, 2025, with revenue increasing by 5.6% to RMB 694.2 million and profit for the period rising by 15.3% to RMB 160.6 million, driven by volume-based procurement and import substitution | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 694,227 | 657,102 | 5.6% | | Gross Profit | 410,335 | 398,480 | 3.0% | | Profit for the Period | 160,611 | 139,253 | 15.3% | | Profit Attributable to Equity Holders of the Company | 160,611 | 139,253 | 15.3% | | Earnings Per Share | 2025 (RMB) | 2024 (RMB) | | :--- | :--- | :--- | | Basic | 0.14 yuan | 0.12 yuan | | Diluted | 0.14 yuan | 0.12 yuan | - Revenue growth was primarily driven by volume-based procurement policies, accelerating import substitution, and sustained growth in demand for the company's products' surgical volume[5] Consolidated Financial Statements Consolidated Statement of Profit or Loss and Other Comprehensive Income For the six months ended June 30, 2025, the Group reported 5.6% revenue growth, 3.0% gross profit growth, 9.7% operating profit growth, and 15.3% profit for the period, with significant increases in net other income and net finance income | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Revenue | 694,227 | 657,102 | | Cost of Sales | (283,892) | (258,622) | | Gross Profit | 410,335 | 398,480 | | Net Other Income | 18,263 | 2,904 | | Selling and Distribution Expenses | (117,297) | (113,007) | | General and Administrative Expenses | (77,386) | (72,308) | | Research and Development Expenses | (66,701) | (63,575) | | Operating Profit | 167,214 | 152,494 | | Net Finance Income | 19,457 | 10,030 | | Profit Before Tax | 186,671 | 162,524 | | Income Tax | (26,060) | (23,271) | | Profit for the Period | 160,611 | 139,253 | | Profit Attributable to Equity Holders of the Company | 160,611 | 139,253 | | Total Comprehensive Income | 163,259 | 140,513 | - Net other income significantly increased from RMB 2,904 thousands in 2024 to RMB 18,263 thousands in 2025[6] - Net finance income nearly doubled from RMB 10,030 thousands in 2024 to RMB 19,457 thousands in 2025[6] Consolidated Statement of Financial Position As of June 30, 2025, the Group's total net assets grew to RMB 2,731.5 million, driven by increased net current assets from other financial assets and fixed deposits, despite a decrease in non-current fixed deposits and an increase in current bank loans and bills payable | Metric | 2025 June 30 (RMB thousands) | 2024 Dec 31 (RMB thousands) | | :--- | :--- | :--- | | Non-current Assets | | | | Property, Plant and Equipment | 702,746 | 683,616 | | Fixed Deposits | 10,179 | 206,301 | | Total Non-current Assets | 977,109 | 1,157,343 | | Current Assets | | | | Inventories | 460,051 | 488,668 | | Trade Receivables | 520,662 | 494,820 | | Other Financial Assets | 759,617 | 615,235 | | Fixed Deposits | 306,639 | 64,784 | | Cash and Cash Equivalents | 375,064 | 352,173 | | Total Current Assets | 2,582,497 | 2,178,055 | | Current Liabilities | | | | Trade Payables | 106,599 | 122,100 | | Bills Payable | 66,579 | 30,001 | | Bank Loans | 136,094 | 60,447 | | Total Current Liabilities | 737,041 | 596,416 | | Net Current Assets | 1,845,456 | 1,581,639 | | Net Assets | 2,731,467 | 2,638,186 | - Non-current fixed deposits significantly decreased from RMB 206,301 thousands as of December 31, 2024, to RMB 10,179 thousands as of June 30, 2025[7] - Other financial assets and fixed deposits within current assets significantly increased from RMB 615,235 thousands to RMB 759,617 thousands and from RMB 64,784 thousands to RMB 306,639 thousands, respectively[7] - Bank loans and bills payable within current liabilities increased from RMB 60,447 thousands to RMB 136,094 thousands and from RMB 30,001 thousands to RMB 66,579 thousands, respectively[7] Notes to the Interim Consolidated Financial Statements Basis of Preparation and Changes in Accounting Policies This interim financial report, prepared under HKEX Listing Rules and IAS 34, was approved for issue on August 27, 2025, with IAS 21 amendments having no material impact - The interim financial report was prepared in accordance with the HKEX Listing Rules and International Accounting Standard 34, and approved for issue on August 27, 2025[9] - The revised International Accounting Standard 21 was applied during the period but had no material impact on the interim report[11] - This interim financial report is unaudited but has been reviewed by KPMG in accordance with Hong Kong Standard on Review Engagements 2410[10] Revenue and Segment Information The Group's core business involves orthopedic implants and surgical instruments; H1 2025 saw 14.0% hip implant revenue growth, slight knee implant decline, 26.5% drop in spine/trauma implants, and 6.0% growth in the dominant China market - The Group's principal activities are the manufacture and sale of orthopedic joint implants, spine implants, trauma implants, and complete sets of surgical instruments[13] Major Product Categories | Major Product Categories | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Hip Replacement Implants | 409,675 | 359,357 | | Knee Replacement Implants | 194,489 | 195,804 | | Spine and Trauma Implants | 50,732 | 69,056 | | Digital Orthopedic Customized Products and Services | 18,424 | 17,725 | | Others | 20,907 | 15,160 | | Total Revenue | 694,227 | 657,102 | Customer Geographical Location | Customer Geographical Location | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | China | 566,019 | 533,811 | | United Kingdom | 33,095 | 27,586 | | Other Countries | 95,113 | 95,705 | | Total Revenue | 694,227 | 657,102 | Reportable Segments | Reportable Segments | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Orthopedic Implants - China (External Customer Revenue) | 630,327 | 597,257 | | Orthopedic Implants - UK (External Customer Revenue) | 63,900 | 59,845 | | Reportable Segment Profit (China) | 182,840 | 162,186 | | Reportable Segment Profit (UK) | 3,211 | 1,160 | Income Tax For the six months ended June 30, 2025, income tax expense increased to RMB 26.1 million, with Chinese subsidiaries benefiting from a 15% preferential tax rate and UK subsidiaries taxed at 19% Tax Category | Tax Category | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Current Tax | 23,173 | 27,066 | | Deferred Tax | 2,887 | (3,795) | | Total Income Tax | 26,060 | 23,271 | - The Company's Chinese subsidiaries (AK Medical Beijing, Tianyan Medical, Libel) hold High-Tech Enterprise Certificates, enjoying a 15% preferential income tax rate[20] - The tax for subsidiaries in England and Wales is calculated at the statutory corporate income tax rate of 19%[20] Earnings Per Share For the six months ended June 30, 2025, basic and diluted earnings per share both increased to RMB 0.14 yuan from RMB 0.12 yuan in the prior period Earnings Per Share | Earnings Per Share | 2025 (RMB) | 2024 (RMB) | | :--- | :--- | :--- | | Basic | 0.14 yuan | 0.12 yuan | | Diluted | 0.14 yuan | 0.12 yuan | - Basic earnings per share are calculated based on the profit attributable to ordinary equity holders of the Company of RMB 160,611,000 and the weighted average number of ordinary shares outstanding of 1,116,429,570 shares[21] Property, Plant and Equipment For the six months ended June 30, 2025, total acquisitions of property, plant, and equipment decreased to RMB 62.9 million, with some assets pledged for bank loans and bills payable - The Group acquired property, plant and equipment items at a total cost of RMB 62,864,000, a decrease from RMB 104,451,000 in the same period of 2024[25] - As of June 30, 2025, non-current bank loans of RMB 5,692,000 and bills payable of RMB 38,448,000 were secured by property, plant and equipment with a total carrying value of RMB 83,930,000[25] Bills Receivable / Trade Receivables As of June 30, 2025, net trade receivables increased to RMB 520.7 million, while bills receivable pledged for bills payable decreased Trade Receivables | Metric | 2025 June 30 (RMB thousands) | 2024 Dec 31 (RMB thousands) | | :--- | :--- | :--- | | Bills Receivable | 78,338 | 81,858 | | Trade Receivables | 600,212 | 561,392 | | Less: Provision for Credit Losses | (79,550) | (66,572) | | Net Trade Receivables | 520,662 | 494,820 | - Bills receivable of approximately RMB 5,200,000 were pledged for bills payable, a decrease from RMB 22,907,000 as of December 31, 2024[26] Aging of Trade Receivables | Aging of Trade Receivables | 2025 June 30 (RMB thousands) | 2024 Dec 31 (RMB thousands) | | :--- | :--- | :--- | | Current to Three Months | 339,875 | 315,041 | | Four to Six Months | 67,407 | 57,641 | | Seven to Twelve Months | 58,386 | 65,512 | | Over Twelve Months | 54,994 | 56,626 | | Total | 520,662 | 494,820 | Trade Payables As of June 30, 2025, total trade payables decreased to RMB 106.6 million, with all amounts expected to be settled within one year Aging of Trade Payables | Aging of Trade Payables | 2025 June 30 (RMB thousands) | 2024 Dec 31 (RMB thousands) | | :--- | :--- | :--- | | Within Three Months | 90,884 | 70,926 | | Four to Six Months | 8,034 | 29,527 | | Seven to Twelve Months | 2,372 | 12,990 | | One to Two Years | 1,733 | 5,490 | | Over Two Years | 3,576 | 3,167 | | Total | 106,599 | 122,100 | - All trade payables are expected to be settled within one year[28] Bank Loans As of June 30, 2025, total bank loans reached RMB 141.8 million, with a significant increase in current loans, some of which are secured by pledged deposits Bank Loan Category | Bank Loan Category | 2025 June 30 (RMB thousands) | 2024 Dec 31 (RMB thousands) | | :--- | :--- | :--- | | Current Secured Bank Loans | 33,201 | 30,707 | | Current Unsecured Bank Loans | 102,893 | 29,740 | | Non-current Secured Bank Loans | 5,692 | 17,667 | | Total | 141,786 | 78,114 | - Current unsecured bank loans significantly increased from RMB 29,740 thousands as of December 31, 2024, to RMB 102,893 thousands as of June 30, 2025[28] - Bank loans of RMB 33,201,000 were secured by pledged deposits of approximately RMB 199,921,000[28] Capital, Reserves and Dividends As of June 30, 2025, issued and paid-up ordinary shares slightly increased, share capital remained stable, and dividends approved for equity holders rose to RMB 73.7 million Share Capital Movement | Share Capital Movement | 2025 June 30 (Number of Shares) | 2025 June 30 (RMB thousands) | 2024 Dec 31 (Number of Shares) | 2024 Dec 31 (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | | As at January 1 | 1,122,671,437 | 9,515 | 1,121,896,437 | 9,508 | | Shares Issued Under Share Option Scheme | 24,341 | – | 400,000 | 4 | | As at June 30 | 1,122,695,778 | 9,515 | 1,122,296,437 | 9,512 | Dividends | Dividends | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Interim Dividend Per Ordinary Share | 73,717 | 46,079 | Management Discussion and Analysis Business Review and Outlook In H1 2025, AK Medical strengthened its market position through import substitution and policy alignment, launched the K3 intelligent surgical robot, enhanced its iCOS platform, expanded internationally, and opened a new industrial park for future growth - In H1 2025, the full implementation of national volume-based procurement policies for artificial joints accelerated import substitution, creating new market and customer opportunities for the Group[32] - The new industrial park was completed, establishing a smart orthopedic interactive platform and experience center, enabling integrated full-process digital orthopedic solutions[32] - The K3 intelligent surgical robot received approval from the National Medical Products Administration, enhancing the iCOS digital orthopedic customized products and services platform, and establishing a comprehensive solution for pre-operative planning, intra-operative navigation, and post-operative monitoring[33] - As of June 30, 2025, the Group's sales revenue was approximately RMB 694.2 million, a 5.6% year-on-year increase, and net profit was approximately RMB 160.6 million, a 15.3% year-on-year increase[33] Hip and Knee Joint Implant Business In H1 2025, hip and knee implant revenue rose 8.8% to RMB 604.2 million, driven by strategic collaborations and successful import substitution in economically developed regions - As of June 30, 2025, hip and knee joint products generated revenue of approximately RMB 604.2 million, an 8.8% year-on-year increase[34] - The Group's products achieved large-scale clinical application in top-tier hospitals in economically developed regions like the Yangtze River Delta and Pearl River Delta, successfully breaking the long-standing dominance of imported brands[34] Spine and Trauma Implant Business In H1 2025, spine and trauma implant revenue decreased 26.5% to RMB 50.7 million due to policy impacts, yet new product expansion saw 87% growth in atlantoaxial lateral mass fusion implants and entry into 49 new hospitals - As of June 30, 2025, spine and trauma implant products generated revenue of approximately RMB 50.7 million, a 26.5% year-on-year decrease[35] - The implantation growth rate for atlantoaxial lateral mass fusion products reached 87%, expanding hospital coverage from over 20 to over 40[35] - The spine product line entered 49 new hospitals, including 4 T1-level and 16 T2-level hospitals[35] Digital Orthopedic Customized Products and Services In H1 2025, digital orthopedic customized products and services revenue grew 3.9% to RMB 18.4 million, with the K3 intelligent surgical robot's approval enhancing the digital orthopedic ecosystem, promising future growth despite policy adjustments - As of June 30, 2025, digital orthopedic customized products and services generated revenue of approximately RMB 18.4 million, an increase of approximately 3.9% compared to the same period in 2024[36] - AK Medical's fully self-developed robot system, the K3 intelligent surgical robot, received approval for market launch from the National Medical Products Administration on May 14, 2025[36] Overseas Business In H1 2025, overseas product revenue increased 4.0% to RMB 128.2 million, driven by expansion into 4 new countries and enhanced international influence through the Silk Road Health International Exchange Program - As of June 30, 2025, overseas products generated revenue of approximately RMB 128.2 million, an increase of approximately 4.0% compared to the same period in 2024[37] - In H1 2025, the Group added registrations in 4 new countries, with 15 more countries undergoing registration, and added 5 new distributors[37] - Six series of Silk Road Health International Cooperation Alliance activities were held, covering three continents and four countries, with over 140 participants[37] Research and Development The Group continues to build an innovation-driven R&D system, with 3 new products entering the innovation approval channel (7 total), the K3 intelligent surgical robot's approval marking a new phase in digital orthopedic intelligent equipment, and breakthroughs in smart medical imaging and digital orthopedics - The National Medical Products Administration supports the development of innovative products such as medical surgical robots and metal additive manufacturing bone implants[38] - The "Magnetically Controlled Non-invasive Extendable Prosthesis System" successfully entered the special review procedure for innovative medical devices, filling a domestic technological gap[39] - As of June 30, 2025, the Group had 3 new products enter the innovation approval channel, bringing the cumulative total to 7 products in the national innovation channel[39] - The independently developed K3 intelligent surgical robot obtained its registration certificate from the National Medical Products Administration on May 14, 2025, featuring high degrees of freedom and sub-millimeter precision control[39] - Breakthroughs were achieved in intelligent medical imaging and digital orthopedics, with the independent development of a deep learning-based multi-modal image fusion algorithm and the innovative establishment of an "implant-bone interface dynamic mechanical matching" model[40] Academic Promotion and Education AK Academy, a global education platform, established a 'technical training-product innovation-international exchange' academic promotion system in H1 2025, expanding from local to global, with multiple academic events driving 30% CAGR for vertebral reconstruction products - AK Academy established a "technical training-product innovation-international exchange" three-in-one academic promotion system, achieving expansion from local deep cultivation to global outreach[41] - Multiple academic events were held, such as the AC ONE Hip Prosthesis Seminar, HAUK Unicondylar Multi-center Academic Conference, and Complex Hip and Knee Revision Technology Summit, filling domestic technological gaps[42] - The "Bone Warrior" series of academic activities was launched, with a compound annual growth rate of 30% for vertebral reconstruction products[42] Digital Orthopedics Capacity Building Project Following its approval, one K3 intelligent surgical robot has been commercialized, successfully assisting in the world's first domestic robot-assisted knee replacement revision surgery, with smart auxiliary equipment completing over 1,700 clinical procedures by June 30, 2025 - Following its market approval, one K3 intelligent surgical robot has been commercialized[43] - Peking University Third Hospital successfully completed the world's first domestic robot-assisted knee replacement revision surgery with the assistance of the K3 intelligent surgical robot[43] - As of June 30, 2025, the Group's intelligent auxiliary equipment had cumulatively completed over 1,700 clinical surgeries[44] Silk Road Health International Exchange Program As the lead for the 'Silk Road Health International Cooperation Alliance,' the Group hosted 6 events across three continents and four countries in H1 2025, promoting the international export of China's 3D printing personalized implant technology standards - In H1 2025, a total of 6 series of Silk Road Health International Cooperation Alliance activities were held, covering three continents and four countries, with over 140 participants[45] - A cross-continental orthopedic innovation exchange platform was successfully established, systematically exporting China's technical standards in 3D printing personalized implants[45] Industrial Park Construction AK Medical Industrial Park, officially opened on May 7, 2025, spans over 39,500 sqm, integrates digital management, adopts green building concepts, and features three digital manufacturing systems (iCOS R&D, 3D printing, digital manufacturing) to drive full-chain digital transformation - AK Medical Industrial Park officially commenced operations on May 7, 2025, with a total construction area exceeding 39,500 square meters, supporting future growth[46] - The park adopts green building concepts, including a ground-source heat pump system and a 1.5 MW rooftop photovoltaic clean energy power station, expected to reduce carbon dioxide emissions by 1,575 tons annually[46] - The industrial park features three independent digital manufacturing systems: iCOS R&D and production workshop, 3D printing workshop, and digital manufacturing workshop[47] Outlook The Group will actively respond to national policies, building a dual-driven development model of 'digital transformation and international market expansion,' leveraging the iCOS platform for smart interactive ecosystem development and accelerating overseas market presence through the 'AK Medical + JRI' dual-brand strategy - The Group will build a dual-driven development model of "digital transformation and international market expansion"[48] - Leveraging the iCOS digital orthopedic platform, the Group will advance the construction of an intelligent interactive ecosystem and explore innovative business models[48] - The Group will accelerate its overseas market presence through the "AK Medical + JRI" dual-brand synergistic development strategy[48] Financial Review This section reviews the Group's financial performance for the six months ended June 30, 2025, covering revenue, costs, expenses, liquidity, and capital structure, noting revenue growth driven by volume-based procurement, a slight decrease in gross margin, robust financial health, ample cash, and ongoing capital expenditures for future development | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 694,227 | 657,102 | 5.6% | | Gross Profit | 410,335 | 398,480 | 3.0% | | Profit for the Period | 160,611 | 139,253 | 15.3% | - Revenue growth was primarily due to the promotion of sales of hip and knee replacement implant products within the scope of national joint implant volume-based procurement policies[55] Revenue Analysis Total Group revenue increased 5.6% year-on-year, with hip replacement implants up 14.0%, knee implants down 0.7%, spine and trauma implants down 26.5%, digital orthopedic customized products and services up 3.9%, domestic sales up 6.0%, and overseas sales up 4.0% Product Categories | Product Categories | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Hip Replacement Implants | 409,675 | 359,357 | 14.0% | | Knee Replacement Implants | 194,489 | 195,804 | -0.7% | | Spine and Trauma Implants | 50,732 | 69,056 | -26.5% | | Digital Orthopedic Customized Products and Services | 18,424 | 17,725 | 3.9% | | Others | 20,907 | 15,160 | 37.9% | | Total | 694,227 | 657,102 | 5.6% | - Revenue from knee replacement implants slightly decreased, mainly due to a decline in sales prices of unicondylar implant products outside the volume-based procurement scope[56] - Revenue from spine and trauma implants decreased by 26.5%, primarily affected by policies, but the implantation volume of 3D printing technology products significantly increased[58] Sales Region | Sales Region | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | China | 566,019 | 533,811 | 6.0% | | Other Countries | 128,208 | 123,291 | 4.0% | | Total | 694,227 | 657,102 | 5.6% | Cost of Sales, Gross Profit and Gross Margin Cost of sales increased 9.8% to RMB 283.9 million due to higher sales volume; gross profit rose 3.0% to RMB 410.3 million, but gross margin declined 1.5 percentage points to 59.1%, mainly due to a lower proportion of spine and trauma implant revenue - Cost of sales was approximately RMB 283.9 million, an increase of 9.8% compared to the same period in 2024, mainly due to an increase in product sales volume[61] - Gross profit was approximately RMB 410.3 million, an increase of 3.0% compared to the same period in 2024[62] - The gross margin was 59.1%, a decrease of 1.5 percentage points from 60.6% in the same period of 2024, primarily attributed to a decrease in the revenue contribution from spine and trauma implant products[62] Net Other Income Net other income significantly increased by RMB 15.4 million to RMB 18.3 million, primarily from government subsidies and R&D project grants - Net other income was approximately RMB 18.3 million, an increase of RMB 15.4 million compared to the same period in 2024[63] - This increase primarily stemmed from government subsidies and R&D project grants[63] Selling and Distribution Expenses Selling and distribution expenses increased 3.8% to RMB 117.3 million, primarily due to increased domestic and international market activities - Selling and distribution expenses were approximately RMB 117.3 million, an increase of 3.8% compared to the same period in 2024[64] - The increase was mainly due to increased domestic and international market activities undertaken during the current year[64] General and Administrative Expenses General and administrative expenses increased 7.1% to RMB 77.4 million, mainly due to one-off relocation costs and credit loss provisions in the first half - General and administrative expenses were approximately RMB 77.4 million, an increase of 7.1% compared to the same period in 2024[65] - The increase primarily resulted from one-off expenses incurred due to the Group's relocation in the first half of the year and credit loss provisions based on the aging and balances of trade receivables[65] Research and Development Expenses R&D expenses increased 4.9% to RMB 66.7 million, primarily linked to the progress of the company's R&D projects, with the Group committed to continued investment - Research and development expenses were approximately RMB 66.7 million, an increase of 4.9% compared to the same period in 2024[66] - The increase was mainly related to the progress schedule of the company's R&D projects, and the Group will continue to actively invest in R&D[66] Net Finance Income Net finance income significantly increased by RMB 9.5 million to RMB 19.5 million, driven by higher interest income and foreign exchange gains from currency fluctuations - Net finance income was approximately RMB 19.5 million, an increase of approximately RMB 9.5 million compared to the same period in 2024[67] - The increase was primarily influenced by higher interest income and foreign exchange gains resulting from currency fluctuations[67] Income Tax Expense Income tax expense increased 12.0% to RMB 26.1 million, primarily due to higher profits - Income tax expense was approximately RMB 26.1 million, an increase of 12.0% compared to the same period in 2024[68] - The increase was primarily due to higher profits[68] Liquidity and Financial Resources As of June 30, 2025, cash and cash equivalents, structured deposits, fixed deposits, and restricted deposits totaled RMB 1,436.5 million, an increase from December 31, 2024, with net current assets rising by RMB 263.9 million to RMB 1,845.5 million - As of June 30, 2025, cash and cash equivalents, structured deposits, fixed deposits exceeding three months, and restricted deposits totaled approximately RMB 1,436.5 million, an increase from RMB 1,027.7 million as of December 31, 2024[69] - Net current assets were approximately RMB 1,845.5 million, an increase of approximately RMB 263.9 million from December 31, 2024, primarily derived from operations[70] - The Group generated net exchange gains of approximately RMB 5.3 million for the six months ended June 30, 2025, compared to exchange losses of approximately RMB 0.9 million in the same period of 2024[71] Capital Expenditure For the six months ended June 30, 2025, total capital expenditure was RMB 76.6 million, primarily for plant construction, patent acquisition, and production equipment, instrument, and software purchases - Total capital expenditure was approximately RMB 76.6 million, primarily used for plant construction, patent acquisition, and the purchase of equipment, instruments, and software for production[72] Pledge of Assets As of June 30, 2025, certain bank loans and bills payable were secured by property, plant and equipment, bills receivable, and restricted deposits, totaling approximately RMB 312.0 million, an increase from December 31, 2024 - As of June 30, 2025, bank loans and bills payable were secured by property, plant and equipment of approximately RMB 83.9 million, bills receivable of approximately RMB 5.2 million, and restricted deposits of approximately RMB 222.9 million, totaling approximately RMB 312.0 million[73] Borrowings and Gearing Ratio As of June 30, 2025, the Group's short-term bank loans totaled RMB 136.1 million and long-term borrowings RMB 5.7 million, with the gearing ratio increasing to 5.2% from 3.0% at December 31, 2024 - As of June 30, 2025, the outstanding balance of short-term bank loans was approximately RMB 136.1 million, and the outstanding balance of long-term borrowings was approximately RMB 5.7 million[74] - The gearing ratio was approximately 5.2%, an increase from 3.0% as of December 31, 2024[74] 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[75] Significant Investments and Acquisitions/Disposals As of June 30, 2025, the Group held no significant equity investments in other companies and made no material acquisitions or disposals of subsidiaries, associates, or joint ventures - As of June 30, 2025, the Group held no significant equity investments in any other companies[76] - For the six months ended June 30, 2025, the Group did not undertake any significant acquisitions or disposals of subsidiaries, associates, or joint ventures[77] Future Material Investments and Capital Asset Plans As of June 30, 2025, the Group's ongoing construction project is a new plant in Changzhou Xitaihu Park, expected to be funded by internal and/or external sources, with no other material investment or capital asset plans - As of June 30, 2025, the Group had one ongoing construction project, a new plant in Changzhou Xitaihu Park[78] - This project is expected to be funded through internal and/or external sources[78] Other Information Employees and Remuneration As of June 30, 2025, the Group had 1,003 employees, with total staff remuneration expenses of RMB 131.8 million, primarily due to an increase in headcount - As of June 30, 2025, the Group had 1,003 employees (December 31, 2024: 954 employees)[79] - Total staff remuneration expenses were approximately RMB 131.8 million, primarily due to an increase in the number of employees[79] Events After Reporting Period No significant events affecting the Group have occurred from June 30, 2025, up to the date of this announcement - No significant events affecting the Group have occurred from June 30, 2025, up to the date of this announcement[80] Purchase, Sale or Redemption of the Company's Listed Securities For the six months ended June 30, 2025, neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities, and no treasury shares were held at period-end - For the six months ended June 30, 2025, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[81] - As of June 30, 2025, the Company held no treasury shares[81] Corporate Governance For the six months ended June 30, 2025, the Company complied with Appendix C1 of the Listing Rules' Corporate Governance Code, except for provision C.2.1 regarding the separation of Chairman and CEO roles, both held by Mr. Li Zhijiang - For the six months ended June 30, 2025, the Company complied with the Corporate Governance Code set out in Appendix C1 of the Listing Rules, except for code provision C.2.1[82] - The roles of Chairman and Chief Executive Officer are both held by Mr. Li Zhijiang, and the Board believes this structure does not undermine the balance of power and authority[82] - The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 of the Listing Rules and has established written guidelines for employees, with no non-compliance found during the period[83] Audit Committee Review and Independent Review by Auditor The Audit Committee reviewed the Group's interim results for the six months ended June 30, 2025, confirming compliance with applicable accounting standards; the unaudited interim financial results were independently reviewed by KPMG - The Audit Committee has reviewed the Group's interim results for the six months ended June 30, 2025, and is satisfied that they were prepared in accordance with applicable accounting standards[84] - The interim financial results are unaudited but have been independently reviewed by KPMG in accordance with Hong Kong Standard on Review Engagements 2410[85] Interim Dividend The Board does not recommend declaring any interim dividend for the six months ended June 30, 2025 - The Board does not recommend declaring any interim dividend for the six months ended June 30, 2025 (six months ended June 30, 2024: nil)[86]