山东国信(01697) - 2025 - 中期业绩

General Information General Information Shandong International Trust Co., Ltd. (Shandong Trust) is a company registered in the PRC, listed on HKEX with stock code 1697, and its legal representative is Yue Zengguang - The company's official Chinese name is Shandong International Trust Co., Ltd., abbreviated as Shandong Trust[4] - H shares are listed on The Stock Exchange of Hong Kong Limited, stock code 1697[4] - The legal representative is Yue Zengguang[4] Contact Person and Information The company's Board Secretary and Company Secretary is He Chuangye, with its registered office in Jinan, Shandong Province, and a principal place of business in Hong Kong - The Board Secretary and Company Secretary is He Chuangye[4] - The registered office is located at Tower A, No. 2788 Aoti West Road, Lixia District, Jinan, Shandong Province, China[4] - Email is ir1697@luxin.cn, and the international internet address is http://www.sitic.com.cn[4](index=4&type=chunk) Summary of Unaudited Interim Condensed Consolidated Financial Statements Summary of Unaudited Interim Condensed Consolidated Income Statement For the six months ended June 30, 2025, the company's total operating income was RMB 633,861 thousand, net profit was RMB 167,419 thousand, and total comprehensive income was RMB 110,717 thousand Interim Condensed Consolidated Income Statement Summary (RMB thousand yuan) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Total Operating Income | 633,861 | 587,752 | | Total Operating Costs | 358,508 | 295,780 | | Operating Profit | 275,353 | 291,972 | | Total Profit | 230,402 | 253,327 | | Income Tax Expense | 62,983 | 82,819 | | Net Profit | 167,419 | 170,508 | | Total Comprehensive Income | 110,717 | 167,769 | Summary of Unaudited Interim Condensed Consolidated Balance Sheet As of June 30, 2025, the company's total assets were RMB 14,084,394 thousand, total liabilities were RMB 2,736,951 thousand, and total shareholders' equity was RMB 11,347,443 thousand Interim Condensed Consolidated Balance Sheet Summary (RMB thousand yuan) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Assets | 14,084,394 | 14,279,338 | | Total Liabilities | 2,736,951 | 3,042,612 | | Total Shareholders' Equity | 11,347,443 | 11,236,726 | | Total Liabilities and Shareholders' Equity | 14,084,394 | 14,279,338 | Summary of Unaudited Interim Condensed Consolidated Cash Flow Statement For the six months ended June 30, 2025, net cash flow from operating activities was RMB 34,134 thousand, from investing activities was RMB 28,151 thousand, and from financing activities was RMB -194,613 thousand Interim Condensed Consolidated Cash Flow Statement Summary (RMB thousand yuan) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 34,134 | 576,953 | | Net Cash Flow from Investing Activities | 28,151 | 189,906 | | Net Cash Flow from Financing Activities | -194,613 | -469,526 | | Net Increase in Cash and Cash Equivalents | -132,328 | 297,333 | | Cash and Cash Equivalents at End of Period | 344,340 | 466,230 | Management Discussion and Analysis Environmental Review In H1 2025, global economic growth slowed due to regional conflicts and trade protectionism, while China's economy maintained stable growth with optimized structure and resilience, with GDP growing 5.3% and domestic demand contributing 68.8% - In H1 2025, the global economic recovery process was significantly slowed by uncertainties such as regional conflicts and trade protectionism[7] - China's economy grew by 5.3% year-on-year in H1, with domestic demand contributing 68.8% to GDP growth, becoming the main driver of economic growth[7] - Under the guidance of new regulatory frameworks, China's trust industry accelerated its transformation, with trust asset scale continuously growing, approaching RMB 30 trillion by the end of 2024, and asset service trusts rapidly increasing their proportion[9] Business Review In H1 2025, Shandong Trust focused on its core business, with family trust AUM reaching RMB 61.927 billion, a 19.3% year-on-year increase, actively expanding capital market business and supporting technology and green industries - In H1 2025, Shandong Trust focused on its core business, with family trust AUM reaching RMB 61.927 billion, a 19.3% increase from the beginning of the year[10] - The company was approved to open CFETS interbank deposit business and successfully launched its first transaction, enriching its business product lines[11] - As of the end of June 2025, the company's green trust AUM was RMB 4.229 billion, a 22.4% year-on-year increase[12] Segment Revenue Contribution (RMB thousand yuan) | Business Type | 2025 Amount | 2025 Share | 2024 Amount | 2024 Share | | :--- | :--- | :--- | :--- | :--- | | Trust Business Operating Income | 227,821 | 35.9% | 270,866 | 46.0% | | Proprietary Business Operating Income | 406,040 | 64.1% | 316,886 | 53.9% | | Total | 633,911 | 100.0% | 588,214 | 100.0% | Trust Classification The company classifies trusts into administrative trusts and active management trusts based on roles and responsibilities, with active management trusts further divided into financing and investment trusts; total AUM was RMB 207,822 million as of June 30, 2025 - The company classifies trusts into administrative trusts and active management trusts, with active management trusts further subdivided into financing trusts and investment trusts[18] Asset Under Management by Trust Type (RMB million yuan) | Trust Type | Number as of June 30, 2025 | AUM as of June 30, 2025 | Number as of December 31, 2024 | AUM as of December 31, 2024 | | :--- | :--- | :--- | :--- | :--- | | Financing Trusts | 214 | 35,562 | 227 | 39,276 | | Investment Trusts | 1,881 | 94,906 | 1,838 | 126,961 | | Administrative Trusts | 1,088 | 44,201 | 847 | 47,586 | | Total | 3,183 | 174,669 | 2,912 | 213,823 | - As of June 30, 2025, the company's AUM (including insurance trust AUM) was RMB 207,822 million, a decrease from RMB 240,173 million as of December 31, 2024[19] Revenue Contribution by Trust Type (RMB million yuan) | Trust Type | 2025 Revenue | 2025 Share (%) | 2024 Revenue | 2024 Share (%) | | :--- | :--- | :--- | :--- | :--- | | Financing Trusts | 118 | 51.8 | 151 | 55.3 | | Investment Trusts | 65 | 28.5 | 77 | 28.2 | | Administrative Trusts | 45 | 19.7 | 45 | 16.5 | | Total | 228 | 100.0 | 273 | 100.0 | Trust Business Segmentation The company's trust business is segmented into asset service trusts, asset management trusts, and charitable trusts, with asset service trusts having an AUM of approximately RMB 62 billion and asset management trusts focusing on capital markets and real estate - The company's trust business can be further divided into asset service trusts, asset management trusts, and charitable trusts[22] Asset Service Trusts Asset service trusts provide wealth planning, inheritance, custody, and risk isolation services, with family trusts and similar businesses accumulating approximately 5,800 cases and an AUM of RMB 62 billion as of June 30, 2025 - Asset service trusts aim to provide professional trust services such as wealth planning, intergenerational inheritance, custody, bankruptcy isolation, and risk disposal for settlors[22] - As of June 30, 2025, the company had cumulatively established approximately 5,800 family trusts, household service trusts, insurance trusts, and other businesses, with an AUM of approximately RMB 62 billion[25] - The company managed 130 corporate and non-corporate wealth management trusts, with trust assets totaling approximately RMB 24.393 billion[26] - As of June 30, 2025, the company had four asset-backed securities projects with an outstanding scale of RMB 1.844 billion[28] Asset Management Trusts Asset management trusts are private asset management businesses primarily investing in capital markets, real estate, industrial and commercial enterprises, and infrastructure, with securities investment trust AUM reaching RMB 72.81 billion - Asset management trusts are private asset management businesses, primarily investing in capital markets, real estate, industrial and commercial enterprises, and infrastructure[31] - As of June 30, 2025, the company's outstanding securities investment trust business AUM was RMB 72.81 billion, and the total capital market trust business AUM was RMB 78.434 billion[34] - Real estate trust business AUM decreased due to the real estate market conditions, with future support for long-term rental housing and affordable housing construction[35] - Industrial and commercial enterprise trusts and infrastructure trusts actively responded to national calls, increasing support for the real economy, technological innovation, and green development[37][38] Charitable Trusts Charitable trusts aim to conduct poverty alleviation, disaster relief, and education support activities for public benefit, with 69 trusts established and a cumulative delivery scale of approximately RMB 190 million as of June 30, 2025 - Charitable trusts aim to conduct poverty alleviation, disaster relief, education support, and natural disaster relief activities for public benefit[39][40] - As of June 30, 2025, the company had cumulatively established 69 charitable trusts, with a cumulative delivery scale of approximately RMB 190 million, cumulative trust funds utilized of approximately RMB 38 million, and direct beneficiaries totaling nearly 14,000 people[40] - The company continuously innovated in the charitable trust sector, launching the first dual-trustee model charitable trust in Shandong Province, the first charitable trust with a foreign settlor in the trust industry, and a listed company DAF model charitable trust[41] Proprietary Business Review In H1 2025, the company's proprietary business segment revenue increased by 28.0% to RMB 406.1 million, driven by higher fair value changes and investment income, with asset allocation focusing on safety, liquidity, and diversification - In H1 2025, the company's proprietary business segment revenue was RMB 406.1 million, a 28.0% year-on-year increase[43] - The increase in proprietary business revenue was mainly due to the increase in fair value change gains from RMB 241.8 million in H1 2024 to RMB 319.3 million in H1 2025, and investment income from RMB 42.1 million to RMB 84.0 million[43] - The company's proprietary asset allocation strategy adheres to a combination of long, medium, and short-term approaches, prudently utilizing its own funds for investment, optimizing asset structure, and actively disposing of inefficient assets[43] Proprietary Asset Allocation Proprietary asset allocation includes monetary asset investments, securities investments, long-term equity investments, proprietary fund loans, and the trust industry guarantee fund, with monetary asset investment balances increasing and certain securities investment balances shifting Proprietary Asset Allocation (RMB thousand yuan) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Monetary Asset Investments | 1,458,822 | 921,998 | | Securities Investments | 9,475,332 | 9,737,676 | | Long-term Equity Investments | 849,259 | 1,259,477 | | Proprietary Fund Loans | 77,331 | 70,188 | | Trust Industry Guarantee Fund | 115,498 | 113,962 | | Total | 11,976,242 | 12,103,301 | Monetary Asset Investments and Interest Income (RMB thousand yuan) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Monetary Asset Investments | 1,458,822 | 921,998 | | Total Interest Income (H1) | 4,776 | 2,779 | | Average Investment Return (Annualized) | 0.8% | 0.8% | - In H1 2025, the average investment balance of equity products increased by 2.1% to RMB 2,271.5 million, and the average investment balance of trust plans increased by 8.2% to RMB 4,051.5 million[50] - The average investment balance of debt investments decreased by 17.3% to RMB 2,470.4 million, and the average investment balance of asset management products decreased by 12.0% to RMB 794.5 million[50] - As of June 30, 2025, the outstanding balance of proprietary fund loans was RMB 77.3 million, an 8.7% increase from the beginning of the year[54] - The company's equity in the trust industry guarantee fund increased by 1.3% to RMB 115.5 million[55] Financial Review In H1 2025, net profit decreased by 1.8% to RMB 167.4 million, mainly due to reduced net fee and commission income and increased credit impairment losses, partially offset by higher fair value changes and investment income - In H1 2025, the company achieved a net profit of RMB 167.4 million, a 1.8% year-on-year decrease[56] - The decrease in net profit was mainly due to a year-on-year decrease in net fee and commission income and a year-on-year increase in credit impairment losses, partially offset by a year-on-year increase in fair value change gains and investment income[15] Operating Performance Summary (RMB thousand yuan) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Total Operating Income | 633,861 | 587,752 | | Total Operating Costs | 358,508 | 295,780 | | Operating Profit | 275,353 | 291,972 | | Total Profit | 230,402 | 253,327 | | Net Profit | 167,419 | 170,508 | Analysis of Unaudited Interim Condensed Consolidated Income Statement In H1 2025, total operating income grew 7.8%, but net profit declined 1.8%, with negative net interest income, a 16.7% drop in net fee and commission income, and significant increases in investment and fair value change gains Total Operating Income In H1 2025, total operating income increased by 7.8%, with negative net interest income, a 16.7% decrease in net fee and commission income, a 99.3% increase in investment income, and a 32.0% increase in fair value change gains Net Interest Income Details (RMB thousand yuan) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Interest Income | 17,843 | 24,969 | | Interest Expense | 25,678 | 29,519 | | Net Interest Income | -7,835 | -4,550 | - Net fee and commission income decreased by 16.7% to RMB 225.6 million, mainly due to reduced fee and commission income from trust business transformation[61] - Investment income increased by 99.3% to RMB 84.0 million, mainly due to a year-on-year increase of RMB 47.4 million in investment income from financial assets held during the period[63] - Fair value change gains increased by 32.0% to RMB 319.3 million, mainly due to increased fair value change gains from trading financial assets such as equity investments[65] Total Operating Costs In H1 2025, total operating costs increased, with business and management expenses decreasing by 12.2% due to reduced employee compensation, while credit impairment losses significantly rose by 50.8% - Business and management expenses decreased by 12.2% to RMB 116.6 million, mainly due to reduced employee compensation[66] - Credit impairment losses increased by 50.8% to RMB 233.7 million, mainly due to increased provisions based on actual credit risk and prior provisions[67] - Non-operating expenses increased to RMB 45.0 million, mainly due to increased provisions for compensation, including RMB 45.0 million for litigation-related compensation[69] Total Profit and Operating Profit Margin In H1 2025, total profit decreased to RMB 230.4 million, and the operating profit margin declined from 43.1% to 36.3% Total Profit and Operating Profit Margin (RMB thousand yuan) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Total Profit | 230,402 | 253,327 | | Operating Profit Margin | 36.3% | 43.1% | Income Tax Expense In H1 2025, income tax expense was RMB 63.0 million, a decrease from RMB 82.8 million in the prior year, primarily due to lower total profit Income Tax Expense (RMB thousand yuan) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Current Income Tax Expense | 28,957 | 67,234 | | Deferred Income Tax Expense | 34,026 | 15,585 | | Total | 62,983 | 82,819 | - The decrease in income tax expense was mainly due to a year-on-year decrease in the Group's total profit in H1 2025[73] Net Profit and Net Profit Margin In H1 2025, net profit decreased to RMB 167.4 million, and the net profit margin declined from 29.0% to 26.4% Net Profit and Net Profit Margin (RMB thousand yuan) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Net Profit | 167,419 | 170,508 | | Net Profit Margin | 26.4% | 29.0% | Segment Operating Results Trust business total profit decreased by 36.8% due to reduced segment revenue, while proprietary business total profit increased by 9.7% due to higher segment revenue, partially offset by increased operating expenses Segment Revenue (RMB thousand yuan) | Business Type | 2025 | 2024 | | :--- | :--- | :--- | | Trust Business Segment Revenue | 227,821 | 270,866 | | Proprietary Business Segment Revenue | 406,090 | 317,348 | Segment Total Profit (RMB thousand yuan) | Business Type | 2025 | 2024 | | :--- | :--- | :--- | | Trust Business | 64,505 | 102,100 | | Proprietary Business | 165,897 | 151,227 | | Total | 230,402 | 253,327 | Segment Profit Margin | Business Type | 2025 | 2024 | | :--- | :--- | :--- | | Trust Business | 28.3% | 37.7% | | Proprietary Business | 40.9% | 47.7% | - Trust business total profit decreased by 36.8% to RMB 64.5 million, mainly due to a 15.9% decrease in segment revenue[84] - Proprietary business total profit increased by 9.7% to RMB 165.9 million, mainly due to a 28.0% increase in segment revenue, partially offset by a 44.6% increase in operating expenses[87] Selected Interim Condensed Consolidated Financial Position As of June 30, 2025, the Group's total assets were RMB 14,084.4 million, with loans and advances, debt investments, and trading financial assets being significant components; total liabilities were RMB 2,737.0 million, primarily third-party trust beneficiaries' net assets and other liabilities - As of June 30, 2025, the Group's total assets were RMB 14,084.4 million, with loans and advances accounting for 14.5%, debt investments for 31.2%, and trading financial assets for 26.0%[91] - As of June 30, 2025, the Group's total liabilities were RMB 2,737.0 million, with other liabilities accounting for 85.3%[110] - As of June 30, 2025, the Group had no off-balance sheet guarantees or foreign currency forward contracts[116] Loans and Advances As of June 30, 2025, net loans and advances were RMB 2,038,788 thousand, primarily from consolidated trust plans, with impaired loans increasing by 12.0% to RMB 2,151.9 million, representing 90.6% of total loans and advances Net Loans and Advances (RMB thousand yuan) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Principal of Loans and Advances | 2,373,854 | 2,420,407 | | Less: Provision for Expected Credit Losses | 423,912 | 399,143 | | Net Loans and Advances | 2,038,788 | 2,159,052 | - Total impaired loans increased by 12.0% from RMB 1,922.0 million as of December 31, 2024, to RMB 2,151.9 million as of June 30, 2025[95] - As of June 30, 2025, total impaired loans accounted for 90.6% of the Group's total loans and advances[95] Investments in Other Equity Instruments The company strategically holds A shares of Guolian Minsheng Securities, designated as financial assets at fair value through other comprehensive income since January 2025, with a balance of RMB 302.9 million - The company holds 31,039,606 A shares of Guolian Minsheng Securities, designated as financial assets at fair value through other comprehensive income since January 2025[101] - As of June 30, 2025, the balance of this investment was RMB 302.9 million[101] Long-term Equity Investments As of June 30, 2025, the company's total long-term equity investments were RMB 723,809 thousand, primarily comprising investments in associates accounted for using the equity method and enterprises invested by consolidated structured entities Long-term Equity Investments (RMB thousand yuan) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Associates accounted for using equity method | 407,021 | 403,743 | | Enterprises invested by consolidated structured entities | 316,788 | 319,639 | | Total | 723,809 | 723,382 | Trading Financial Assets As of June 30, 2025, trading financial assets decreased by 16.1% to RMB 3,668.2 million, mainly due to reduced investments in public funds, unlisted equity, and asset management plans; the company holds Zhejiang Merchants Bank A shares with a fair value of RMB 1.942 billion Composition of Trading Financial Assets (RMB thousand yuan) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Equity Investments | 1,942,510 | 1,723,067 | | Public Fund Investments | 170,051 | 515,420 | | Asset Management Plan Investments | 770,043 | 917,316 | | Unlisted Equity Investments | 498,694 | 910,100 | | Total | 3,668,185 | 4,372,519 | - Trading financial assets decreased by 16.1% to RMB 3,668.2 million, mainly due to reduced investments in public funds, unlisted equity investments, and asset management plans[106] - The company holds 572,992,903 A shares of Zhejiang Merchants Bank, with a fair value of RMB 1.942 billion as of June 30, 2025[105] Cash and Bank Balances As of June 30, 2025, the Group's cash and bank balances were RMB 344.3 million, a decrease from RMB 591.7 million as of December 31, 2024 - As of June 30, 2025, the Group's cash and bank balances were RMB 344.3 million, a decrease from RMB 591.7 million as of December 31, 2024[107] Accounts Receivable As of June 30, 2025, accounts receivable increased by 1.9% to RMB 100.5 million, primarily for accrued trust remuneration; 43.0% of receivable trust remuneration was recovered by July 31, 2025 - Accounts receivable increased by 1.9% from RMB 98.7 million as of December 31, 2024, to RMB 100.5 million as of June 30, 2025[108] - As of July 31, 2025, 43.0% of the receivable trust remuneration had been recovered[108] Financial Assets Held Under Resale Agreements Financial assets held under resale agreements, mainly reverse repurchase agreements on government bonds, increased from RMB 390.0 million to RMB 1,171.7 million, reflecting flexible adjustments based on market conditions and interest rates - Reverse repurchase agreements on government bonds increased from RMB 390.0 million as of December 31, 2024, to RMB 1,171.7 million as of June 30, 2025[109] - The change was mainly due to the company's flexible adjustments to the scale of reverse repurchase agreement business based on overall market conditions and interest rates[109] Liabilities As of June 30, 2025, the Group's total liabilities were RMB 2,737.0 million, a decrease from RMB 3,042.6 million as of December 31, 2024, primarily comprising short-term borrowings, employee benefits payable, provisions, and other liabilities - As of June 30, 2025, the Group's total liabilities were RMB 2,737.0 million, a decrease from RMB 3,042.6 million as of December 31, 2024[110] - Major liabilities include short-term borrowings, employee benefits payable, provisions, and other liabilities, with other liabilities accounting for 85.3% of total liabilities[110] Short-term Borrowings As of June 30, 2025, short-term borrowings were interest-bearing loans from China Trust Protection Fund Co., Ltd., amounting to RMB 100.1 million, which were repaid in July 2025 - As of June 30, 2025, short-term borrowings were interest-bearing loans from China Trust Protection Fund Co., Ltd., amounting to RMB 100.1 million[111] - This borrowing was repaid in July 2025[111] Provisions As of June 30, 2025, provisions amounted to RMB 96.5 million, primarily for estimated litigation compensation - As of June 30, 2025, provisions amounted to RMB 96.5 million, for estimated litigation compensation[112] Other Liabilities Other liabilities primarily consist of net assets attributable to third-party trust beneficiaries of consolidated structured entities, amounts payable to the National Council for Social Security Fund, and trust industry guarantee funds collected on behalf of financing parties - Other liabilities primarily consist of net assets attributable to third-party trust beneficiaries of consolidated structured entities, amounts payable to the National Council for Social Security Fund, and trust industry guarantee funds collected on behalf of financing parties of financing trust plans[113] - Net assets attributable to third-party trust beneficiaries of consolidated structured entities decreased by 10.3% to RMB 780.5 million[114] - As of June 30, 2025, the company had an outstanding balance of RMB 700.0 million in non-current fund borrowings from the Trust Protection Fund Company[115] Off-Balance Sheet Arrangements As of June 30, 2025, the Group had no off-balance sheet guarantees or foreign currency forward contracts - As of June 30, 2025, the Group had no off-balance sheet guarantees or foreign currency forward contracts[116] Asset Scale, Asset Quality, and Financial Performance of Consolidated Trust Plans As of June 30, 2025, the company consolidated 29 trust plans with total trust assets of RMB 4,692.9 million, which increased total assets and liabilities but had a reduced impact on net profit - As of June 30, 2025, the company consolidated 29 trust plans it managed, with total trust assets of these consolidated trust plans amounting to RMB 4,692.9 million[117] Number of Consolidated Trust Plans | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Beginning of Period | 30 | 22 | | Newly Consolidated Trust Plans | – | 11 | | Terminated Consolidated Trust Plans | 1 | 3 | | End of Period | 29 | 30 | - The impact of trust plan consolidation on the Group's net profit was RMB 13 million in H1 2025, compared to RMB 7 million in H1 2024[123] - The company assesses whether a trust plan is consolidated based on its exposure to variable returns from its involvement with the trust, or its rights to variable returns, and its ability to use its power over the trust's activities to affect the amount of those returns[123] Risk Management The company is committed to establishing a sound risk management and internal control system covering credit, market, liquidity, compliance, operational, reputational, policy/legal/ethical risks, and anti-money laundering management - The company is committed to establishing a sound risk management and internal control system, covering all aspects of business operations[126] Risk Management Organizational Structure The company's comprehensive risk management organizational structure is integrated into all levels of corporate governance, including the shareholders' meeting, board of directors and its committees, supervisory board, general manager's office, and various functional departments - The comprehensive risk management organizational structure is integrated into all levels of corporate governance, including the shareholders' meeting, the Board of Directors and its Strategy and Risk Management Committee and Audit Committee, the Supervisory Board, and the General Manager's Office[127] Factors Affecting Our Operations Key factors affecting the company's operations include China's overall economic and financial market conditions, the regulatory environment, business lines and product mix, competition, and the interest rate environment - China's overall economic and financial market conditions have a significant impact on the company's business, financial position, operating results, and prospects, with economic slowdown and structural adjustments posing challenges[130] - The regulatory environment of China's trust industry is continuously changing, requiring the company to adjust its trust business structure and operating model, which may have positive or negative impacts[132] - The company faces fierce competition from other trust companies, commercial banks, securities companies, and other financial institutions[136][137] - Interest rate changes affect the financing willingness of counterparty clients, the investment returns of entrusted clients, the amount of interest income, and the value of financial assets[139] Credit Risk Management Credit risk refers to the risk of clients and counterparties failing to fulfill contractual obligations; the company manages this through improved systems, enhanced risk control in key areas, and separate credit risk management for trust and proprietary businesses - Credit risk refers to the risk that the company's clients and counterparties fail to fulfill contractual obligations, arising from both trust business and proprietary business[138] - Credit risk management for trust business is conducted through comprehensive due diligence, strict internal approval, post-event monitoring, and obtaining third-party guarantees and collateral[141] - Proprietary business's credit risk management is conducted through formulating annual asset allocation plans, maintaining a diversified investment portfolio, and establishing detailed internal risk management policies and procedures[142] Market Risk Management Market risk primarily refers to the risk of fluctuations in the fair value or future cash flows of financial instruments due to changes in market prices, managed through diversified and carefully selected investment portfolios and strict investment decision-making mechanisms - Market risk primarily refers to the risk that the fair value or future cash flows of financial instruments will fluctuate due to changes in market prices, mainly caused by price risk, interest rate risk, and exchange rate risk[143] - The company primarily manages such risks through diversified and carefully selected investment portfolios and strict investment decision-making mechanisms[143] Liquidity Risk Management Liquidity risk refers to the risk of the company being unable to obtain sufficient cash to settle its debts; the company regularly forecasts cash flows, monitors capital needs, and holds sufficient liquid assets - Liquidity risk refers to the risk that the company may not be able to obtain sufficient cash to fully settle its debts when they fall due[144] - The company regularly forecasts cash flows and monitors short-term and long-term capital needs to ensure sufficient cash reserves and financial assets that can be easily converted into cash[144] Compliance Risk Management Compliance risk refers to the risk of sanctions or losses due to business or employee activities violating laws and regulations; the company has established compliance systems and policies, monitored by the Compliance and Legal Department - Compliance risk refers to the risk of legal sanctions, regulatory measures, disciplinary actions, property losses, or reputational damage due to the company's business activities or employee activities violating relevant laws, regulations, or rules[145] - The company has formulated several compliance systems and policies, with the Compliance and Legal Department specifically monitoring the overall compliance status of various aspects of daily operations[145] Operational Risk Management Operational risk refers to the risk of financial losses due to improper operations in transaction processes or management systems; the company has established a three-line defense system to mitigate technical violations or human errors - Operational risk refers to the risk of financial losses caused by improper operations in transaction processes or management systems[146] - The company has formulated the "Operational Risk Management Measures (Trial)", establishing a three-line defense for operational risk management to reduce the risk of technical violations or human errors[146] Reputational Risk Management The company actively takes measures to avoid and prevent reputational risks, formulating "Reputational Risk Management Measures" and enhancing corporate core values through wealth management, external promotion, and social responsibility - The company has formulated the "Reputational Risk Management Measures", enhancing customer loyalty through excellent wealth management capabilities, strengthening external promotion, and actively fulfilling social responsibilities[147] Policy, Legal, and Ethical Risk Management The company controls policy risk by analyzing macroeconomic and industry policies, and manages legal and ethical risks through sound corporate governance, internal controls, employee education, and dedicated legal positions - The company controls policy risk by analyzing and researching national macroeconomic policies and industry policies, enhancing foresight and adaptability[148] - By establishing and improving corporate governance structure, internal control systems, and business operating procedures, the completeness and scientific nature of work processes are ensured[148] - Strengthening employee ideological and legal awareness education, and setting up dedicated legal positions, effectively controls legal and ethical risks[148] Anti-Money Laundering Management The company complies with Chinese anti-money laundering laws and regulations, implementing "Anti-Money Laundering Management Measures," establishing a leadership group and suspicious transaction reporting system, and continuously updating customer identity information - The company complies with applicable Chinese anti-money laundering laws and regulations, fulfilling its anti-money laundering obligations, and has implemented the "Anti-Money Laundering Management Measures"[149] - An anti-money laundering working group and anti-money laundering office have been established to be responsible for anti-money laundering management[149] - A customer identification system has been established, requiring employees to effectively verify and continuously update customer identity information, identify suspicious transactions, and report them to the China Anti-Money Laundering Monitoring and Analysis Center led by the People's Bank of China[150][151] Capital Management The company's capital management focuses on net capital and risk capital, aiming to meet regulatory requirements, balance risk and return, and maintain liquidity; all capital management indicators met regulatory requirements as of June 30, 2025 - The company's capital management is centered on net capital and risk capital, aiming to meet external regulatory requirements, balance risk and return, and maintain appropriate liquidity levels[152] Capital Management Indicators (As of June 30, 2025) | Indicator | Amount/Ratio | | :--- | :--- | | Net Capital | Approximately RMB 9.401 billion | | Total Risk Capital | Approximately RMB 2.889 billion | | Net Capital to Total Risk Capital Ratio | 325.48% | | Net Capital to Net Assets Ratio | 82.72% | - All capital management indicators comply with regulatory requirements (net capital not less than RMB 200 million, net capital to total risk capital ratio not less than 100%, and net capital to net assets ratio not less than 40%)[152][153] Outlook Despite global economic uncertainties, China's economy is expected to remain stable and grow steadily, with the trust industry accelerating its transformation and expanding service scenarios in areas like pension and inclusive finance - In the coming period, the world economy will remain shrouded in uncertainty, but China's economy will continue to operate stably and improve in the long term, still achieving steady growth[155] - Under the guidance of the Central Financial Work Conference spirit and a series of policy documents, the trust industry is accelerating its return to its origins and deepening reforms, with broader service scenarios in areas such as pension finance and inclusive finance[155] - Shandong Trust will continue to focus on risk resolution and business transformation as its overall goals, scientifically plan its "15th Five-Year Plan" development, and continuously deepen high-quality development and high-level security[156] Profit and Dividends Profit and Dividends The company will not declare an interim dividend for 2025 - The company will not declare an interim dividend for 2025[158] Directors, Supervisors, and Senior Management of the Company Directors, Supervisors, and Senior Management of the Company As of the date of this interim results announcement, the Board of Directors includes Executive Director Yue Zengguang, Non-executive Directors Chen Liuyi, Duan Xiaoxu, Chen Xuebin, and Independent Non-executive Directors Zheng Wei, Zhang Haiyan, Liu Wanwen - The Board of Directors includes Mr. Yue Zengguang (Chairman, Executive Director); Mr. Chen Liuyi (Vice Chairman, Non-executive Director), Ms. Duan Xiaoxu, and Mr. Chen Xuebin (Non-executive Directors); Mr. Zheng Wei, Ms. Zhang Haiyan, and Ms. Liu Wanwen (Independent Non-executive Directors)[159] - The Supervisory Board members include Mr. Guo Xiangzhong (Chairman of the Supervisory Board, Shareholder Representative Supervisor), Ms. Wang Qian (External Supervisor), and Ms. Li Yan (Employee Representative Supervisor)[159] - Senior management includes Mr. Tian Zhiguo (Chief Risk Officer, acting as General Manager) and Ms. Zhou Jianqu (Deputy General Manager)[159] Changes in Directors The appointments of Mr. Chen Liuyi and Mr. Chen Xuebin as non-executive directors were approved by the Shandong Financial Regulatory Bureau in July 2025, and Mr. Wang Zengye no longer serves as non-executive director and vice chairman - The appointment of Mr. Chen Liuyi as a non-executive director and vice chairman was approved by the Shandong Financial Regulatory Bureau on July 10, 2025, and Mr. Wang Zengye no longer serves as a non-executive director and vice chairman[161] - The appointment of Mr. Chen Xuebin as a non-executive director was approved by the Shandong Financial Regulatory Bureau on July 30, 2025[161] Changes in Supervisors There were no changes in supervisors during the reporting period; the company plans to abolish the Supervisory Board and supervisors, with the Audit Committee exercising the functions of the Supervisory Board - There were no changes in the company's supervisors during the reporting period[162] - The company plans to no longer establish a Supervisory Board and supervisors, with the Audit Committee exercising the functions of the Supervisory Board as stipulated by laws and regulations[162] Changes in Senior Management There were no changes in the company's senior management during the reporting period - There were no changes in the company's senior management during the reporting period[163] Corporate Governance Code Corporate Governance Code The company is committed to maintaining high standards of corporate governance, has adopted the Corporate Governance Code set out in Appendix C1 of the Listing Rules, and has complied with all code provisions during the reporting period - The company has adopted the Corporate Governance Code set out in Appendix C1 of the Listing Rules and has complied with all code provisions during the reporting period[164] Standard Code for Securities Transactions Standard Code for Securities Transactions The company has adopted a code for securities transactions by directors, supervisors, and employees no less stringent than the standard set out in Appendix C3 of the Listing Rules, and all directors and supervisors confirmed compliance during the reporting period - The company has adopted a code for securities transactions by directors, supervisors, and employees no less stringent than the standard set out in Appendix C3 of the Listing Rules, "Model Code for Securities Transactions by Directors of Listed Issuers"[165] - During the reporting period, all directors and supervisors confirmed their compliance with the standard requirements set out in the code[165] Purchase, Sale or Redemption of Listed Securities Purchase, Sale or Redemption of Listed Securities During the reporting period, the company did not purchase, sell, or redeem any listed securities - During the reporting period, the company did not purchase, sell, or redeem any listed securities[166] Significant Matters Changes in Registered Capital, Capital Structure, and Shareholding During the reporting period, there were no changes in the company's registered capital, capital structure, or shareholder shareholding - During the reporting period, there were no changes in the company's registered capital, capital structure, or shareholder shareholding[167] Proposed Amendments to Articles of Association, Rules of Procedure for Board Meetings, Supervisory Board Meetings, and Shareholders' Meetings The company has proposed and approved amendments to its Articles of Association, Rules of Procedure for Shareholders' Meetings, Board Meetings, and Supervisory Board Meetings in accordance with the newly revised Company Law and regulations from the Financial Regulatory Administration - The company has proposed and approved amendments to its Articles of Association, Rules of Procedure for Shareholders' Meetings, Board Meetings, and Supervisory Board Meetings in accordance with the newly revised "Company Law" and relevant regulations from the Financial Regulatory Administration regarding the abolition of the Supervisory Board[168][169][170] - The company plans to no longer establish a Supervisory Board and supervisors, with the Audit Committee exercising the functions of the Supervisory Board as stipulated by laws and regulations[170] Major Litigation and Arbitration Matters As of June 30, 2025, the company was involved in nine litigation or arbitration cases as plaintiff, totaling approximately RMB 5,430.70 million, and four litigation cases as defendant, totaling approximately RMB 766.60 million - As of June 30, 2025, the company was involved in nine litigation or arbitration cases as plaintiff and applicant, with a total amount involved of approximately RMB 5,430.70 million[172] - As of June 30, 2025, the company was involved in four litigation cases as defendant, with a total amount involved of approximately RMB 766.60 million[172] - In one of these cases, the company only bears administrative responsibility as per contractual agreement, involving a litigation amount of approximately RMB 700 million[172] Major Asset Acquisitions, Disposals, and Mergers The company entered into an agreement with Guolian Minsheng in August 2024 for Guolian Minsheng to acquire the company's shares in Minsheng Securities by issuing A shares, with the company receiving 31,039,606 newly issued A shares of Guolian Minsheng - The company and Guolian Minsheng entered into an agreement on August 8, 2024, for the acquisition of assets by issuing shares, where Guolian Minsheng acquired the company's shares in Minsheng Securities Co., Ltd. by issuing A shares[173] - The number of newly issued A shares of Guolian Minsheng obtained by the company under this transaction was 31,039,606 shares[173] - The registration of the company's subscription for Guolian Minsheng shares was completed in January 2025[173] Penalties Imposed on the Company, Directors, Supervisors, and Senior Management During the reporting period, the company, its directors, supervisors, and senior management were not subject to any penalties - During the reporting period, the company, its directors, supervisors, and senior management were not subject to any penalties[175] Interim Reports on Significant Matters During the reporting period, the company did not issue any interim reports on significant matters - During the reporting period, the company did not issue any interim reports on significant matters[176] Events After the Reporting Period Events After the Reporting Period Except for the disclosed matters, no significant events occurred after the reporting period - Except for the disclosed matters, no significant events occurred after the reporting period[177] Summary of Interim Financial Statements Interim Condensed Consolidated Income Statement For the six months ended June 30, 2025, the company's total operating income was RMB 633,861,335.90, net profit was RMB 167,419,220.66, and basic earnings per share was RMB 0.04/share Interim Condensed Consolidated Income Statement (RMB yuan) | Item | January-June 2025 | January-June 2024 | | :--- | :--- | :--- | | Total Operating Income | 633,861,335.90 | 587,751,833.39 | | Total Operating Costs | 358,508,294.23 | 295,780,081.56 | | Operating Profit | 275,353,041.67 | 291,971,751.83 | | Total Profit | 230,401,944.42 | 253,326,796.91 | | Income Tax Expense | 62,982,723.76 | 82,818,684.51 | | Net Profit | 167,419,220.66 | 170,508,112.40 | | Total Comprehensive Income | 110,717,444.32 | 167,768,867.43 | | Basic Earnings Per Share (yuan/share) | 0.04 | 0.04 | Interim Condensed Consolidated Balance Sheet As of June 30, 2025, the company's total assets were RMB 14,084,394,078.31, total liabilities were RMB 2,736,950,698.21, and total shareholders' equity was RMB 11,347,443,380.10 Interim Condensed Consolidated Balance Sheet (RMB yuan) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Assets | 14,084,394,078.31 | 14,279,337,691.82 | | Total Liabilities | 2,736,950,698.21 | 3,042,611,756.04 | | Total Shareholders' Equity | 11,347,443,380.10 | 11,236,725,935.78 | | Total Liabilities and Shareholders' Equity | 14,084,394,078.31 | 14,279,337,691.82 | Notes to Interim Condensed Consolidated Financial Information The notes detail the company's basic information, basis of financial statement preparation, and specific financial data for cash, loans, trading financial assets, debt investments, and various income and expense items - The notes provide detailed information on the company's basic situation, including its establishment date, listing information, principal business, and parent company information[187][188] - The financial statements are prepared in accordance with "Enterprise Accounting Standards" and the Hong Kong "Companies Ordinance" and "Listing Rules", and are presented on a going concern basis[190] - The notes provide details of various financial data, such as cash and bank balances, loans and advances, trading financial assets, debt investments, and provisions, and explain the changes between period-end and beginning-of-period balances[191][193][194][195][197][198][200][201] - The notes also provide details of various income and cost items in the income statement, such as net interest income, net fee and commission income, investment income, fair value change gains, business and management expenses, credit impairment losses, etc.[202][203][204][206] Audit Committee Audit Committee The Audit Committee has reviewed the accounting principles and practices adopted by the company with management and external auditors, and reviewed the interim results for the six months ended June 30, 2025 - The Audit Committee has reviewed the accounting principles and practices adopted by the company with management and external auditors, and reviewed the interim results for the six months ended June 30, 2025[211] Publication of Interim Results Announcement for the Six Months Ended June 30, 2025, on HKEX and Company Website Publication of Interim Results Announcement for the Six Months Ended June 30, 2025, on HKEX and Company Website The interim results announcement for the six months ended June 30, 2025, has been published on the HKEX and company websites, and the interim report containing all information required by the Listing Rules will be published in due course - The interim results announcement for the six months ended June 30, 2025, has been published on the HKEX website (www.hkexnews.hk) and the company website (www.sitic.com.cn)[212](index=212&type=chunk) - The interim report containing all information required by the Listing Rules will be published on the respective websites of the HKEX and the company in due course[212]