升辉清洁(02521) - 2025 - 中期业绩

Corporate Information This chapter outlines the company's board composition, committee structures, and key registration details Directors and Committees This section lists the board members and key committee compositions of Shenghui Cleanness Group Holdings Limited - The company's Board of Directors consists of three executive directors (Mr Li Chenghua, Mr Wei Dongjin, Mr Chen Liming) and three independent non-executive directors (Ms Zhang Baowen, Ms Qiu Yanhong, Dr Wang Hui)[3][7][8] - The company has established an Audit Committee (chaired by Dr Wang Hui), a Remuneration Committee (chaired by Ms Zhang Baowen), a Nomination Committee (chaired by Ms Qiu Yanhong), and an Investment Committee (chaired by Dr Wang Hui) to enhance corporate governance[7][8][9] Company Contact and Registration Details This section provides the company's registered office, business locations, and other essential contact information - The company is registered in the Cayman Islands, with its headquarters and principal place of business in the PRC located in Panyu District, Guangzhou, and its principal place of business in Hong Kong located in Wan Chai[9][10] Company Basic Information | Information Type | Details | | :--- | :--- | | Company Name | Shenghui Cleanness Group Holdings Limited | | Stock Code | 2521 | | Place of Registration | Cayman Islands | | Headquarters & Principal Place of Business in the PRC | 3/F, Office Building, 36 Xinguang Road, Xinzhen Town, Panyu District, Guangzhou | | Principal Place of Business in Hong Kong | 15/F, MassMutual Tower, 38 Gloucester Road, Wan Chai, Hong Kong | | Principal Bankers | Industrial and Commercial Bank of China Limited (Guangzhou Huanan Branch) | | Company Website | www.gzshqj.com | Management Discussion and Analysis This chapter details business performance, financial status, and future outlook for the six months ended June 30, 2025 Business Review For the six months ended June 30, 2025, the Group's revenue grew, and gross profit margin improved significantly - The Group is principally engaged in the provision of cleaning and maintenance services in Guangdong Province, China[13][16] Business Performance for H1 2025 | Metric | Six months ended June 30, 2025 (RMB Million) | Six months ended June 30, 2024 (RMB Million) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Total Revenue | 358.8 | N/A | N/A | | Net Profit | 7.9 | N/A | N/A | | Gross Profit | 60.2 | 32.0 | +88.1% | | Gross Profit Margin | 16.8% | 9.8% | +7.0 p.p. | Outlook The Group plans to expand its business in existing and new markets through organic growth and potential acquisitions - The Group plans to replicate its business model in other regions of China with high demand for property cleaning services[15][17] - The Group will explore expanding its customer base and geographical coverage through acquisitions and/or investments in cleaning and maintenance service providers in the Greater Bay Area, and bid for large-scale infrastructure cleaning service projects[15][17] Financial Review Revenue grew due to more projects, but net profit declined due to fair value losses on financial assets Key Financial Indicators for H1 2025 | Metric | Six months ended June 30, 2025 (RMB Million) | Six months ended June 30, 2024 (RMB Million) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Revenue | 358.8 | 325.8 | +10.1% | | Cost of services | 298.6 | 293.7 | +1.7% | | Gross profit | 60.2 | 32.0 | +88.1% | | Gross profit margin | 16.78% | 9.8% | +6.98 p.p. | | Other income, net | 2.6 | 1.2 | +116.7% | | Selling and marketing expenses | 4.3 | 3.5 | +22.9% | | General and administrative expenses | 21.6 | 18.3 | +18.0% | | Finance expenses, net | 0.01 | (0.183) | From expense to income | | Income tax expenses | 4.0 | 1.1 | +263.6% | | Net profit | 7.9 | 10.2 | -22.6% | | Net profit margin | 2.2% | 3.1% | -0.9 p.p. | - The decrease in net profit was primarily due to the recognition of a fair value loss on financial assets at fair value through profit or loss, partially offset by an increase in revenue[35][37] Revenue Total revenue for the six months ended June 30, 2025, was RMB 358.8 million, a year-on-year increase of 10.1% - Revenue was primarily derived from property cleaning services (95.8%) and public space cleaning services (4.2%)[18][22] - The 10.1% year-on-year increase in revenue was mainly driven by an increase in the number of property cleaning service projects[19][22] Cost of services Cost of services for the six months ended June 30, 2025, increased by 1.7% year-on-year to RMB 298.6 million - The cost of services increased by 1.7% year-on-year to RMB 298.6 million[20][23] - The increase was mainly due to higher employee benefit expenses and subcontracting labor costs to meet the manpower demand from an increased number of projects[20][23] Gross profit and gross profit margin Gross profit for the six months ended June 30, 2025, grew significantly by 88.1% to RMB 60.2 million - Gross profit increased by 88.1% year-on-year to RMB 60.2 million[21][24] - Gross profit margin improved from 9.8% to 16.78%, primarily due to the increase in revenue[21][24] Other income, net Net other income for the six months ended June 30, 2025, increased by 116.7% year-on-year to RMB 2.6 million - Net other income increased by 116.7% year-on-year to RMB 2.6 million[25][30] - The growth was mainly driven by an increase in rental income[25][30] Selling and marketing expenses Selling and marketing expenses for the six months ended June 30, 2025, rose by 22.9% year-on-year to RMB 4.3 million - Selling and marketing expenses increased by 22.9% year-on-year to RMB 4.3 million[26][31] - The increase was in line with higher marketing and entertainment expenses and bidding expenses related to business expansion[26][31] General and administrative expenses General and administrative expenses for the six months ended June 30, 2025, grew by 18.0% year-on-year to RMB 21.6 million - General and administrative expenses increased by 18.0% year-on-year to RMB 21.6 million[27][32] - The growth was primarily due to increased staff costs and office expenses[27][32] Finance expenses, net Net finance expenses for the six months ended June 30, 2025, shifted from an expense to net income - Net finance expenses shifted from a net expense of RMB 183,000 in the prior-year period to net income of RMB 10,000[28][33] - The change was mainly due to an increase in interest income[28][33] Income tax expenses Income tax expenses for the six months ended June 30, 2025, increased by 263.6% year-on-year to RMB 4.0 million - Income tax expenses increased by 263.6% year-on-year to RMB 4.0 million[29][34] - The increase was mainly due to higher assessable profits[29][34] Net profit and net profit margin Net profit for the six months ended June 30, 2025, decreased by 22.6% year-on-year to RMB 7.9 million - Net profit decreased by 22.6% year-on-year to RMB 7.9 million[35][37] - Net profit margin decreased from 3.1% to 2.2%[35][37] - The decrease in net profit was primarily due to the recognition of a fair value loss on financial assets at fair value through profit or loss, partially offset by an increase in revenue[35][37] Capital structure The Group successfully raised approximately HKD 47.60 million in net proceeds from a placement of new shares - The Group successfully placed 193,755,000 new shares at a price of HKD 0.250 per share on June 16, 2025[36][38] - The net proceeds from the placement were approximately HKD 47.60 million[36][38] - The proceeds are intended for developing the waste recycling business (50%), investing in or acquiring cleaning and maintenance service providers (10%), and for general working capital (40%)[36][38] - As of the reporting date, 50% of the proceeds remained unutilized and are expected to be fully used by May 19, 2027[36][38] Liquidity and financial resources As of June 30, 2025, the Group maintained a healthy liquidity position with improved gearing and net debt-to-equity ratios Overview of Liquidity and Financial Resources | Metric | As of June 30, 2025 (RMB Million) | As of December 31, 2024 (RMB Million) | | :--- | :--- | :--- | | Net assets | 436.6 | 384.9 | | Cash, bank balances and restricted bank deposits | 106.4 | 92.5 | | Total borrowings (lease liabilities and bank borrowings) | 50.0 | 52.0 | | Current ratio (times) | 2.6 | 2.3 | | Gearing ratio (%) | 11.5 | 15.5 | | Net debt-to-equity ratio (%) | Net cash | Net cash | Capital expenditure and commitments Capital expenditure for the six months ended June 30, 2025, was approximately RMB 1.0 million - For the six months ended June 30, 2025, capital expenditure was approximately RMB 1.0 million (H1 2024: RMB 4.6 million), mainly for the purchase of property, plant and equipment[43][47] - As of June 30, 2025, there were no capital commitments (December 31, 2024: Nil)[43][47] Pledge of assets As of June 30, 2025, the Group had not pledged any assets as security for financing - As of June 30, 2025, the Group had not pledged any assets (December 31, 2024: Nil) as security for any financing granted to the Group[44][48] Contingent liabilities As of June 30, 2025, and December 31, 2024, the Group had no significant contingent liabilities - As of June 30, 2025, and December 31, 2024, the Group did not have any significant contingent liabilities[45][49] Treasury policies The Group adopts a prudent treasury policy to manage its liquidity and funding requirements effectively - The Group adopts a prudent treasury policy[46][50] - Management closely monitors the liquidity position to ensure that the liquidity structure of the Group’s assets, liabilities and commitments can meet its funding requirements[46][50] Foreign exchange exposure The Group's foreign exchange risk is insignificant as most financial assets and liabilities are denominated in RMB - The vast majority of the Group's financial assets and liabilities are denominated in RMB, resulting in insignificant foreign exchange risk[51][55] - The Group currently does not engage in any foreign currency hedging or use any financial instruments for hedging purposes, but management will monitor exposure and consider hedging if it becomes significant[51][55] - The conversion of RMB into foreign currencies is subject to government-imposed foreign exchange control rules and regulations[52][56] Interest rate exposure The Group's interest rate risk arises mainly from floating-rate bank deposits and fixed-rate bank borrowings - The Group's interest rate risk primarily arises from cash flow interest rate risk related to floating-rate restricted bank deposits and bank balances, as well as fixed-rate bank borrowings[53][57] - Management monitors interest rate risk and will consider hedging significant exposure when necessary[53][57] Use of proceeds from the global offering As of June 30, 2025, HKD 49.8 million of the net proceeds from the 2023 global offering remained unutilized - The net proceeds from the 2023 global offering (after deducting underwriting fees, commissions, and other listing expenses) were approximately HKD 73.5 million[54][58] Use and Allocation of Proceeds from the Global Offering | Intended Use | Planned Allocation (HKD Million) | Amount Utilized as of June 30, 2025 (HKD Million) | Unutilized Amount as of June 30, 2025 (HKD Million) | Expected Full Utilization Timeline | | :--- | :--- | :--- | :--- | :--- | | Establishing new branch offices | 36.0 | – | 36.0 | December 2026 | | Acquiring or investing in cleaning and maintenance service providers | 15.7 | 15.7 | – | December 2026 | | Strengthening public space cleaning service capabilities | 14.3 | 5.8 | 8.5 | December 2026 | | Adopting technological reforms and upgrading IT systems | 5.6 | 1.3 | 4.3 | December 2026 | | Expanding the marketing department | 1.8 | 0.8 | 1.0 | December 2026 | | General working capital | 0.1 | 0.1 | – | | | Total | 73.5 | 23.7 | 49.8 | | Significant investments held and material acquisitions and disposals The Group completed acquisitions of two Hong Kong property management companies and increased its stake in BTI - On April 28, 2025, the company agreed to acquire 100% of the issued share capital of Fook Yu Property Management Limited and Fook Wai Property Management Limited for HKD 15 million (approximately RMB 13.7 million), which was completed on June 30, 2025[61][65] - The target companies are principally engaged in providing property management services in Hong Kong[61][65] - The Group further acquired 4,375,425 shares of Shenzhen BTI Excellence Technology Co, Ltd (BTI) for a consideration of approximately RMB 15,752,000[63][67] - As of June 30, 2025, the Group held 25% of the total issued shares of BTI, and the investment is classified as an interest in an associate[64][67] - BTI is principally engaged in the business of recycling waste materials for packaging material production, and the design, manufacturing, and sale of environmentally friendly biodegradable materials[63][67] Acquisition of Target Companies The Group acquired two Hong Kong property management service providers for HKD 15 million on June 30, 2025 - On April 28, 2025, the Company entered into a sale and purchase agreement to conditionally acquire 100% of the issued share capital of Fook Yu Property Management Limited and Fook Wai Property Management Limited (the "Target Companies") for a consideration of HKD 15 million (equivalent to approximately RMB 13.7 million)[61][65] - The acquisition was completed on June 30, 2025, after which the Target Companies became indirect wholly-owned subsidiaries of the Company[61][65] - The Target Companies are principally engaged in the provision of property management services in Hong Kong[61][65] Acquisition of BTI The Group increased its shareholding in BTI to 25%, classifying it as an interest in an associate - During the six months ended June 30, 2025, the Group further acquired 4,375,425 shares of Shenzhen BTI Excellence Technology Co, Ltd ("BTI"), a company listed on the National Equities Exchange and Quotations (NEEQ), for a consideration of approximately RMB 15,752,000[63][67] - BTI is principally engaged in the business of recycling waste materials for packaging material production, and the design, manufacturing, and sale of biodegradable and environmentally friendly materials[63][67] - As of June 30, 2025, the Group held 25% of the total issued shares of BTI, and this investment is classified as an interest in an associate[64][67] Future plans for material investments or capital assets As of June 30, 2025, the Group had no specific plans for other material investments or capital assets - Save as disclosed in the Prospectus and this report, there were no specific plans for material investments or capital assets as of June 30, 2025[68][71] Human resources Total employee benefit expenses amounted to RMB 186.1 million for the six months ended June 30, 2025 Human Resources Overview | Metric | Six months ended June 30, 2025 (RMB Million) | Six months ended June 30, 2024 (RMB Million) | | :--- | :--- | :--- | | Total employee benefit expenses | 186.1 | 178.0 | | Total number of employees | 8,068 | 7,169 | - Remuneration for each employee is determined based on individual responsibilities, capabilities, skills, experience, performance, and market salary levels[69][72] - All employees of the Group participate in China's employee social insurance schemes, and the Group regularly provides or arranges training programs, including environmental protection, quality, occupational safety and health, emergency and rescue, specialized cleaning skills, and management skills training[69][72] - The Company has adopted a share option scheme to provide incentives and rewards to its employees[69][72] Events after reporting period No other significant events that could affect the Group have occurred since the end of the reporting period - Save as disclosed in this report, no other significant events that could affect the Group have occurred since the end of the six months ended June 30, 2025[70][73] Unaudited Condensed Consolidated Statement of Comprehensive Income This statement shows the Group's revenue growth and the impact of fair value losses on profit for the period Unaudited Condensed Consolidated Statement of Comprehensive Income (For the six months ended June 30, 2025) | Metric | Six months ended June 30, 2025 (RMB'000) | Six months ended June 30, 2024 (RMB'000) | | :--- | :--- | :--- | | Revenue | 358,829 | 325,779 | | Cost of services | (298,629) | (293,741) | | Gross profit | 60,200 | 32,038 | | Selling and marketing expenses | (4,319) | (3,537) | | General and administrative expenses | (21,589) | (18,257) | | Fair value loss on financial assets at FVTPL | (25,394) | – | | Share of results of an associate | 443 | – | | Other income, net | 2,560 | 1,207 | | Finance expenses, net | 10 | (183) | | Profit before income tax | 11,911 | 11,268 | | Income tax expenses | (3,968) | (1,113) | | Profit and total comprehensive income for the period attributable to owners of the Company | 7,943 | 10,155 | | Basic and diluted earnings per share (RMB cents) | 0.45 | 0.62 | Unaudited Condensed Consolidated Statement of Financial Position This statement shows growth in the Group's total assets and equity as of June 30, 2025 Unaudited Condensed Consolidated Statement of Financial Position (As of June 30, 2025) | Metric | As of June 30, 2025 (RMB'000) | As of December 31, 2024 (RMB'000) | | :--- | :--- | :--- | | Assets | | | | Non-current assets | 180,197 | 189,822 | | Property, plant and equipment | 34,661 | 36,200 | | Investment properties | 854 | 905 | | Interest in an associate | 91,961 | – | | Right-of-use assets | 17,756 | 17,908 | | Financial assets at FVTPL | – | 101,160 | | Deferred income tax assets | 7,442 | 6,653 | | Deposits and prepayments (non-current) | 27,523 | 26,996 | | Current assets | 455,771 | 380,501 | | Trade and other receivables and prepayments | 349,399 | 287,969 | | Restricted bank deposits | 1,423 | 1,423 | | Cash and cash equivalents | 104,949 | 91,109 | | Total assets | 635,968 | 570,323 | | Equity | | | | Equity attributable to owners of the Company | 436,386 | 384,902 | | Share capital | 17,721 | 15,953 | | Reserves | 418,665 | 368,949 | | Total equity | 436,386 | 384,902 | | Liabilities | | | | Non-current liabilities | 23,410 | 20,818 | | Deferred tax liabilities | 9,018 | 6,538 | | Lease liabilities (non-current) | 14,392 | 14,280 | | Current liabilities | 176,172 | 164,603 | | Trade and other payables | 122,549 | 102,869 | | Current income tax payables | 18,014 | 16,265 | | Bank borrowings | 30,120 | 39,174 | | Lease liabilities (current) | 5,489 | 5,755 | | Total liabilities | 199,582 | 185,421 | | Total equity and liabilities | 635,968 | 570,323 | Unaudited Condensed Consolidated Statements of Changes in Equity This statement shows that total equity increased due to profit for the period and the placement of new shares Unaudited Condensed Consolidated Statements of Changes in Equity (For the six months ended June 30, 2025) | Metric | Share Capital (RMB'000) | Reserves (RMB'000) | Total (RMB'000) | | :--- | :--- | :--- | :--- | | At January 1, 2024 | 14,726 | 284,092 | 298,818 | | Profit for the period (2024) | – | 10,155 | 10,155 | | Balance at June 30, 2024 | 14,726 | 294,247 | 308,973 | | At January 1, 2025 | 15,953 | 368,949 | 384,902 | | Profit for the period (2025) | – | 7,943 | 7,943 | | Placement of new shares | 1,768 | 41,773 | 43,541 | | Balance at June 30, 2025 | 17,721 | 418,665 | 436,386 | Unaudited Condensed Consolidated Statements of Cash Flows This statement shows a net increase in cash and cash equivalents, driven by financing activities Unaudited Condensed Consolidated Statements of Cash Flows (For the six months ended June 30, 2025) | Metric | Six months ended June 30, 2025 (RMB'000) | Six months ended June 30, 2024 (RMB'000) | | :--- | :--- | :--- | | Net cash used in operating activities | (2,569) | (55,722) | | Net cash used in investing activities | (15,919) | (4,553) | | Net cash from financing activities | 32,328 | 10,938 | | Net increase/(decrease) in cash and cash equivalents | 13,840 | (49,337) | | Cash and cash equivalents at end of period | 104,949 | 99,236 | Notes to the Condensed Consolidated Interim Financial Statements This chapter provides detailed explanations of the company's accounting policies and key financial information Corporate Information This section reiterates the basic information of Shenghui Cleanness Group Holdings Limited - The Company was incorporated in the Cayman Islands on January 4, 2021, and was listed on the Main Board of The Stock Exchange of Hong Kong Limited on December 5, 2023[88][90] - The Group is principally engaged in the provision of cleaning and maintenance services in the PRC[89][90] - The controlling shareholders are Mr Li Chenghua and Mr Chen Liming[89][90] Principal Accounting Policies The financial statements are prepared in accordance with HKAS 34, with consistent accounting policies - The financial statements have been prepared in accordance with Hong Kong Accounting Standard (HKAS) 34 "Interim Financial Reporting" issued by the Hong Kong Institute of Certified Public Accountants (HKICPA)[91][94] - The accounting policies are consistent with those used in the 2024 annual financial statements, except for the adoption of new and revised HKFRSs that are effective for the annual period beginning on January 1, 2025[92][93][94][95] - The adoption of all new and revised HKFRSs is not expected to have a material impact on the Group's condensed consolidated interim financial statements[96][98] Revenue and Segment Information The Group operates as a single segment providing cleaning and maintenance services in China - The Group is principally engaged in providing cleaning and maintenance services in the PRC, and all revenue is derived from the PRC[100][105][111] - Management reviews the operating results of the business as one operating segment to make decisions about resource allocation[100][101] - Revenue is recognised when control of the services is transferred to the customer, either over time or at a point in time[115][116][117] - No significant contract assets or liabilities were recognised, and there were no significant incremental costs during the period ended June 30, 2025[107][108][110][112][113][114] Accounting policies for revenue recognition Revenue is recognized when control of services is transferred to the customer for the consideration expected - Revenue is recognised when control of the services is transferred to the customer for an amount that reflects the consideration to which the Group expects to be entitled[115][117] - Control of services may be transferred over time or at a point in time, depending on whether the customer simultaneously receives and consumes all benefits, controls the asset, or if the asset has no alternative use and there is an enforceable right to payment[116][117][118] - A contract asset is the Group's right to consideration for services transferred to a customer; a contract liability arises when a customer pays consideration or the Group has an unconditional right to receive it[119][120][121][122][123] Expenses by Nature This section details the breakdown of expenses by nature for the six months ended June 30, 2025 Expenses by Nature (For the six months ended June 30, 2025) | Expense Type | Six months ended June 30, 2025 (RMB'000) | Six months ended June 30, 2024 (RMB'000) | | :--- | :--- | :--- | | Employee benefit expenses (including directors' remuneration) | | | | – Salaries, wages and bonuses | 178,281 | 169,899 | | – Social insurance and housing provident fund contributions | 7,264 | 7,559 | | – Other employee benefits | 551 | 499 | | Subcontracting labour costs | 97,265 | 99,733 | | Cost of cleaning materials consumed | 7,893 | 8,137 | | Depreciation | 1,906 | 1,757 | | Short-term lease expenses | 2,827 | 1,234 | Other Income, Net Net other income for the six months ended June 30, 2025, was RMB 2,560,000, mainly from rental income Other Income, Net (For the six months ended June 30, 2025) | Income Type | Six months ended June 30, 2025 (RMB'000) | Six months ended June 30, 2024 (RMB'000) | | :--- | :--- | :--- | | Rental income | 2,532 | 1,324 | | VAT refund | – | 751 | | Donation | – | (900) | | Others | 28 | 32 | | Total | 2,560 | 1,207 | - Rental income (including from investment properties and leased shops) is recognised on a straight-line basis over the term of the lease agreement[130] Finance Income/(Expenses), Net The Group recorded net finance income of RMB 10,000 for the six months ended June 30, 2025 Finance Income/(Expenses), Net (For the six months ended June 30, 2025) | Type | Six months ended June 30, 2025 (RMB'000) | Six months ended June 30, 2024 (RMB'000) | | :--- | :--- | :--- | | Finance income - Interest income | 876 | 80 | | Finance expenses - Interest expense on bank borrowings | (607) | (59) | | Finance expenses - Interest expense on lease liabilities | (259) | (204) | | Finance income/(expenses), net | 10 | (183) | Income Tax Expenses Income tax expense for the six months ended June 30, 2025, was RMB 3,968,000, a significant increase Income Tax Expenses (For the six months ended June 30, 2025) | Type | Six months ended June 30, 2025 (RMB'000) | Six months ended June 30, 2024 (RMB'000) | | :--- | :--- | :--- | | Current income tax | 2,278 | 1,083 | | Deferred income tax | 1,690 | 30 | | Total | 3,968 | 1,113 | - Provision for income tax on the Group's operations in China is calculated at the applicable rate of 25%, except for Guangzhou Shenghui, which qualified as a High and New Technology Enterprise since 2020 and enjoys a preferential income tax rate of 15%, valid until December 28, 2026[133][134][135] - Guangzhou Shenghui was eligible for super deduction on research and development expenses for the periods ended June 30, 2025 and 2024, with the additional tax deduction rate increased to 100% from the 2023 fiscal year[139][142] - As of June 30, 2025, and December 31, 2024, the Group had not recognised deferred income tax assets for tax losses carried forward, as tax losses of group companies in China can only be carried forward for a maximum of five years[140][142] Dividend No dividend was paid or declared by the Company during the six months ended June 30, 2025, and the same period in 2024 - No dividend was paid or declared by the Company during the periods ended June 30, 2025 and 2024[141][143] Earnings Per Share Basic earnings per share for the six months ended June 30, 2025, was RMB 0.45 cents Earnings Per Share (For the six months ended June 30, 2025) | Metric | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :--- | :--- | :--- | | Profit attributable to owners of the Company (RMB'000) | 7,943 | 10,155 | | Weighted average number of ordinary shares in issue ('000) | 1,772,037 | 1,625,000 | | Basic earnings per share (RMB cents) | 0.45 | 0.62 | - The calculation of basic earnings per share for 2025 has taken into account the placement of 193,755,000 new shares completed on June 16, 2025[146][148] - Diluted earnings per share is the same as basic earnings per share as there were no potential dilutive ordinary shares outstanding during the periods ended June 30, 2025 and 2024[147][148] Property, Plant and Equipment The Group acquired approximately RMB 1,043,000 of property, plant and equipment during the period - During the six months ended June 30, 2025, the Group acquired property, plant and equipment of RMB 1,043,000 (2024: RMB 4,633,000), mainly comprising plant and machinery[150][152] Trade and Other Receivables and Prepayments As of June 30, 2025, net trade and other receivables and prepayments amounted to RMB 376,746,000 Trade and Other Receivables and Prepayments (As of June 30, 2025) | Metric | As of June 30, 2025 (RMB'000) | As of December 31, 2024 (RMB'000) | | :--- | :--- | :--- | | Trade receivables | 345,251 | 292,599 | | Less: Provision for impairment | (23,589) | (24,525) | | Trade receivables, net | 321,662 | 268,074 | | Deposits (current portion) | 5,100 | 3,648 | | Other receivables | 14,086 | 8,791 | | Prepayments | 8,375 | 7,456 | | Trade and other receivables and prepayments, net | 376,746 | 314,965 | Ageing Analysis of Trade Receivables (by invoice date) | Ageing of Trade Receivables (by invoice date) | As of June 30, 2025 (RMB'000) | As of December 31, 2024 (RMB'000) | | :--- | :--- | :--- | | 0 – 60 days | 198,670 | 174,987 | | 61 – 180 days | 53,772 | 46,371 | | 181 – 365 days | 42,988 | 32,880 | | Over 1 year | 49,821 | 38,361 | | Total | 345,251 | 292,599 | - The carrying amounts of trade and other receivables are all denominated in RMB and approximate their fair values[159][160] Bank Borrowing As of June 30, 2025, total bank borrowings amounted to RMB 30,120,000 Bank Borrowing (As of June 30, 2025) | Metric | As of June 30, 2025 (RMB'000) | As of December 31, 2024 (RMB'000) | | :--- | :--- | :--- | | Bank loans | 30,120 | 39,714 | Share Capital As of June 30, 2025, the Company's issued and fully paid share capital was 1,949,735,000 shares Share Capital Movement (As of June 30, 2025) | Metric | Number of ordinary shares | Par value of shares (HK$) | Equivalent par value of shares (RMB) | | :--- | :--- | :--- | :--- | | Issued and fully paid at January 1, 2025 | 1,755,980,000 | 17,559,800 | 15,952,605 | | Placement of new shares | 193,755,000 | 1,937,550 | 1,768,154 | | Issued and fully paid at June 30, 2025 | 1,949,735,000 | 19,497,350 | 17,720,759 | - On June 16, 2025, the Company placed 193,755,000 new shares at a placing price of HKD 0.250 per share, with net proceeds of approximately RMB 43,541,000 (approximately HKD 47,600,000)[164] Trade and Other Payables As of June 30, 2025, total trade and other payables amounted to RMB 88,457,000 Trade and Other Payables (As of June 30, 2025) | Metric | As of June 30, 2025 (RMB'000) | As of December 31, 2024 (RMB'000) | | :--- | :--- | :--- | | Trade payables | 33,793 | 28,810 | | Other payables | 54,664 | 78,220 | | Total trade and other payables | 88,457 | 107,030 | Ageing Analysis of Trade Payables (by invoice date) | Ageing of Trade Payables (by invoice date) | As of June 30, 2025 (RMB'000) | As of December 31, 2024 (RMB'000) | | :--- | :--- | :--- | | 0 – 60 days | 25,201 | 23,036 | | 61 – 180 days | 4,926 | 3,472 | | 181 – 365 days | 1,539 | 1,089 | | Over 1 year | 2,127 | 1,213 | | Total | 33,793 | 28,810 | - The carrying amounts of trade and other payables are denominated in RMB and approximate their fair values[168] Interest in Associate As of June 30, 2025, the Group's interest in an associate was RMB 91,961,000, primarily its investment in BTI Interest in Associate (As of June 30, 2025) | Metric | As of June 30, 2025 (RMB'000) | As of December 31, 2024 (RMB'000) | | :--- | :--- | :--- | | Cost of investment in an associate | 91,518 | – | | Share of post-acquisition results | 443 | – | | Total | 91,961 | – | - The Group's associate is accounted for using the equity method[173][175] - BTI is principally engaged in the business of recycling waste materials for packaging material production, and the design, manufacturing, and sale of biodegradable and environmentally friendly materials[175] - As of June 30, 2025, the Group held a 25% beneficial interest in BTI (December 31, 2024: 19.51%)[175] - Mr Wei Dongjin, the co-chairman and an executive Director of the Company, is also a director and a substantial shareholder of BTI[175] Commitments As of June 30, 2025, the Group had no capital commitments - As of June 30, 2025, there were no capital commitments (December 31, 2024: Nil)[174] Related Party Transactions This section discloses transactions with controlling shareholders, including fund advances and outstanding balances Transactions with Controlling Shareholders (For the six months ended June 30, 2025) | Transaction Type | Six months ended June 30, 2025 (RMB'000) | Six months ended June 30, 2024 (RMB'000) | | :--- | :--- | :--- | | Fund advances from controlling shareholders during the year | – | 4,614 | Balances with Controlling Shareholders (As of June 30, 2025) | Balance Type | As of June 30, 2025 (RMB'000) | As of December 31, 2024 (RMB'000) | | :--- | :--- | :--- | | Amount due to Mr Li | 21,025 | 21,025 | | Amount due to Mr Chen | 1,125 | 1,125 | - The balances with controlling shareholders are non-trade in nature, unsecured, denominated in RMB, interest-free and repayable on demand[181] Key Management Compensation (For the six months ended June 30, 2025) | Key Management Compensation | Six months ended June 30, 2025 (RMB'000) | Six months ended June 30, 2024 (RMB'000) | | :--- | :--- | :--- | | Salaries and wages | 1,247 | 1,103 | | Social insurance and housing provident fund contributions | 102 | 226 | | Total | 1,349 | 1,329 | Financial Risk Management This section discloses fair value measurement information for the Group's financial assets and liabilities Fair Value Measurement of Financial Assets (As of June 30, 2025) | Financial Asset | As of June 30, 2025 (RMB'000) | As of December 31, 2024 (RMB'000) | Fair Value Hierarchy | Basis of Fair Value Measurement | Significant Unobservable Inputs | | :--- | :--- | :--- | :--- | :--- | :--- | | Listed shares classified as financial assets at FVTPL | – | 101,160 | Level 1 | Quoted prices available in an active market | Not applicable | Subsequent Events No significant events requiring adjustment or disclosure have occurred after the reporting period - The Group has had no significant events after the period ended June 30, 2025, that would require adjustment or additional disclosure in these consolidated financial statements[188][189] Other Information This chapter provides additional information on shareholdings, director details, and corporate governance practices Directors' and Chief Executives' Interests and Short Positions in the Shares, Underlying Shares and Debentures of the Company and its Associated Corporations As of June 30, 2025, directors held long positions in the Company's shares, primarily through controlled corporations Long positions in the shares of the Company (As of June 30, 2025) | Director Name | Nature of interest | Number of shares held | Percentage of issued share capital | | :--- | :--- | :--- | :--- | | Mr Li Chenghua | Interest in a controlled corporation | 586,543,750 | 30.08% | | Mr Chen Liming | Interest in a controlled corporation | 586,543,750 | 30.08% | - Mr Li Chenghua holds his shares through Rich Cleanness Investment Holdings Limited, which is wholly-owned by him, and Mr Chen Liming holds his shares through Sunrise Cleanness Investment Holdings Limited, which is wholly-owned by him[194][196][199] - Mr Li Chenghua and Mr Chen Liming are deemed a group of controlling shareholders, and each is deemed to be interested in 1,173,087,500 shares[194][196] Long positions in the shares of HK$0.01 each of the Company Mr Li Chenghua and Mr Chen Liming each held a 30.08% interest in the Company's issued share capital Long positions in the shares of the Company (As of June 30, 2025) | Director Name | Nature of interest | Number of shares held | Percentage of issued share capital | | :--- | :--- | :--- | :--- | | Mr Li Chenghua | Interest in a controlled corporation | 586,543,750 | 30.08% | | Mr Chen Liming | Interest in a controlled corporation | 586,543,750 | 30.08% | - The 586,543,750 shares are held by Rich Cleanness Investment Holdings Limited, which is wholly-owned by Mr Li, who is therefore deemed to be interested in all the shares held by Rich Cleanness under the SFO[194] - Mr Li and Mr Chen have confirmed they are a group of controlling shareholders of the Company under the Listing Rules, and thus, Mr Li, Rich Cleanness, Mr Chen, and Sunrise Cleanness are each deemed to be interested in 1,173,087,500 shares[194] Long positions in the shares of associated corporations Mr Li Chenghua and Mr Chen Liming each beneficially own 100% of their respective investment holding companies Long positions in the shares of associated corporations (As of June 30, 2025) | Director Name | Name of associated corporation | Nature of interest | Number of shares held | Percentage of interest in the associated corporation | | :--- | :--- | :--- | :--- | | Mr Li | Rich Cleanness | Beneficial owner | 1 | 100% | | Mr Chen | Sunrise Cleanness | Beneficial owner | 1 | 100% | - The Company is 30.08% owned by Rich Cleanness, which is wholly-owned by Mr Li, and 30.08% owned by Sunrise Cleanness, which is wholly-owned by Mr Chen[199] Substantial Shareholders' Interests and Short Positions in the Shares and Underlying Shares of the Company As of June 30, 2025, Rich Cleanness and Sunrise Cleanness each held 30.08% of the Company's shares Long positions in the shares of the Company (As of June 30, 2025) | Shareholder Name | Nature of interest | Number of shares held | Percentage of issued share capital | | :--- | :--- | :--- | :--- | | Rich Cleanness | Beneficial owner / Other (Interest of controlling shareholder) | 586,543,750 | 30.08% | | Mr Li | Interest in a controlled corporation / Interest in a controlled corporation | 586,543,750 | 30.08% | | Ms Tang Yongzhen | Interest of spouse | 586,543,750 | 30.08% | | Sunrise Cleanness | Beneficial owner / Other (Interest of controlling shareholder) | 586,543,750 | 30.08% | | Mr Chen | Interest in a controlled corporation / Interest in a controlled corporation | 586,543,750 | 30.08% | - Rich Cleanness is wholly-owned by Mr Li, and Sunrise Cleanness is wholly-owned by Mr Chen[206] - Mr Li and Mr Chen have confirmed they are a group of controlling shareholders of the Company under the Listing Rules, and thus, Mr Li, Rich Cleanness, Mr Chen, and Sunrise Cleanness are each deemed to be interested in 1,173,087,500 shares[206] - Ms Tang Yongzhen is the spouse of Mr Li and is deemed to be interested in the shares in which Mr Li has an interest under the SFO[206] Long positions in the Shares Rich Cleanness and Sunrise Cleanness each held 30.08% of the Company's shares as of June 30, 2025 Long positions in the shares of the Company (As of June 30, 2025) | Shareholder Name | Nature of interest | Number of shares held | Percentage of issued share capital | | :--- | :--- | :--- | :--- | | Rich Cleanness | Beneficial owner / Other (Interest of controlling shareholder) | 586,543,750 | 30.08% | | Mr Li | Interest in a controlled corporation / Interest in a controlled corporation | 586,543,750 | 30.08% | | Ms Tang Yongzhen | Interest of spouse | 586,543,750 | 30.08% | | Sunrise Cleanness | Beneficial owner / Other (Interest of controlling shareholder) | 586,543,750 | 30.08% | | Mr Chen | Interest in a controlled corporation / Interest in a controlled corporation | 586,543,750 | 30.08% | - Rich Cleanness is wholly-owned by Mr Li, and Sunrise Cleanness is wholly-owned by Mr Chen[206] - Mr Li and Mr Chen have confirmed they are a group of controlling shareholders of the Company under the Listing Rules, and thus, Mr Li, Rich Cleanness, Mr Chen, and Sunrise Cleanness are each deemed to be interested in 1,173,087,500 shares[206] - Ms Tang Yongzhen is the spouse of Mr Li and is deemed to be interested in the shares in which Mr Li has an interest under the SFO[206] Disclosure of Information on Directors This section provides detailed biographical information for the company's executive and independent non-executive directors - Mr Li Chenghua (52), co-chairman and chief executive officer, is responsible for the Group's overall strategic planning, management, operations, and business development, with over 26 years of experience in the cleaning service industry[207][208][210][211] - Mr Wei Dongjin (47), co-chairman, has over 20 years of experience in oil transportation, bio-based agriculture, and agricultural and forestry waste recycling, and is the founder, chairman, general manager, and legal representative of Shenzhen BTI Excellence Technology Co, Ltd (BTI)[212][213] - Mr Chen Liming (55), an executive director, is responsible for providing industry advice, strategic management, and formulating business strategies, with over 24 years of experience in the cleaning service industry and is one of the Group's founders[214][215][216] - Dr Wang Hui (46), an independent non-executive director, has over 25 years of experience in corporate finance and accounting, project investment and decision-making, and risk management and control, and serves as the chairman of the Audit Committee and Investment Committee[221][222][224] - Ms Zhang Baowen (37), an independent non-executive director, is a practicing solicitor in Hong Kong with over 12 years of experience in the legal industry and serves as the chairwoman of the Remuneration Committee[223][225][228] - Ms Qiu Yanhong (38), an independent non-executive director, has approximately 13 years of experience in the banking industry, focusing on securities and asset management services, and serves as the chairwoman of the Nomination Committee[226][227][228][229][230][231][232][233] Executive Director This section details the backgrounds of the three executive directors: Li Chenghua, Wei Dongjin, and Chen Liming - Mr Li Chenghua (52), co-chairman and chief executive officer, is responsible for the Group's overall strategic planning, management, operations, and business development, with over 26 years of experience in the cleaning service industry[207][208][210][211] - Mr Wei Dongjin (47) has over 20 years of experience in oil transportation, bio-based agriculture, and agricultural and forestry waste recycling, and is currently the founder, chairman, general manager, and legal representative of Shenzhen BTI Excellence Technology Co, Ltd (BTI)[212][213] - Mr Chen Liming (55), an executive director, is responsible for providing industry advice, strategic management, and formulating business strategies, with over 24 years of experience in the cleaning service industry and is one of the Group's founders[214][215][216] Independent non-executive Director This section introduces the backgrounds of the three independent non-executive directors: Dr Wang Hui, Ms Zhang Baowen, and Ms Qiu Yanhong - Dr Wang Hui (46), appointed as an independent non-executive director on July 26, 2024, has over 25 years of experience in corporate finance and accounting, project investment and decision-making, and risk management and control, and serves as the chairman of the Audit Committee and Investment Committee[221][222][224] - Ms Zhang Baowen (37), appointed as an independent non-executive director on November 14, 2023, is a practicing solicitor in Hong Kong with over 12 years of experience in the legal industry and serves as the chairwoman of the Remuneration Committee[223][225][228] - Ms Qiu Yanhong (38), appointed as an independent non-executive director on November 14, 2023, has approximately 13 years of experience in the banking industry, focusing on securities and asset management services, and serves as the chairwoman of the Nomination Committee[226][227][228][229][230][231][232][233] Securities Transactions by Directors All directors have confirmed full compliance with the Model Code for securities transactions during the period - The Company has adopted the Model Code as set out in Appendix C3 to the Listing Rules as its code of conduct for securities transactions by Directors and relevant employees of the Group[234] - Specific enquiry has been made to all Directors who were in office during the six months ended June 30, 2025, and all of them have confirmed that they have fully complied with the Model Code and its code of conduct for securities transactions by Directors during the period[234] Corporate Governance The Company has complied with the Corporate Governance Code, except for the combined role of Chairman and CEO - During the six months ended June 30, 2025, the Company has complied with the code provisions set out in Part 2 of the Corporate Governance Code in Appendix C1 to the Listing Rules, with the exception that the roles of chairman and chief executive officer should be separate and should not be performed by the same individual[235][236] - The Directors (including the independent non-executive Directors) consider that Mr Li is the best candidate for both positions and that the current structure is conducive to strong and consistent leadership, enabling the Group to make and implement decisions effectively, thus being in the best overall interests of the Group and the Company's shareholders[235][236] Share Option Scheme The Company adopted a share option scheme on November 14, 2023, to attract and retain talent - The Company adopted a share option scheme on November 14, 2023, to attract and retain the most qualified personnel, provide additional incentives to employees, directors, consultants, advisors, distributors, contractors, suppliers, agents, and service providers of the Group, and to promote the business success of the Group[237][238] - Participants include directors and employees of the Company or any of its subsidiaries, as well as independent contractors who provide continuous and regular services to the Group[239] - The exercise price is determined at the sole discretion of the Board and shall not be less than the higher of the closing price of the shares on the daily quotation sheet of the Stock Exchange on the offer date, the average closing price on the five business days immediately preceding the offer date, and the nominal value of the shares on the offer date[240][243] - The total number of shares that may be issued under the share option scheme shall not exceed 10% of the total number of issued shares on the Listing Date (i.e., a maximum of 162,500,000 shares as of December 31, 2023), and the total number of shares granted to service providers shall not exceed 1% of the total issued shares[241][243] - The vesting period for the options shall be no less than 12 months from the offer date, and the scheme is valid for 10 years from November 14, 2023[244][245][248][249] - As of June 30, 2025, no share options were outstanding, granted, cancelled, exercised, or lapsed[245][250] Management Contracts No management contracts concerning the whole or any substantial part of the business were entered into during the period - During the reporting period, the Company did not enter into or have any contracts concerning the management and administration of the whole or any substantial part of its business[246][251] Purchase, Sale or Redemption of the Listed Securities of the Company Neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities - During 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 (including the sale of the Company's treasury shares)[247][252] Audit Committee The Audit Committee has reviewed the unaudited condensed financial results for the six months ended June 30, 2025 - The Audit Committee has reviewed the Group's unaudited condensed financial results for the six months ended June 30, 2025[253][254] - The Audit Committee has discussed with the Company's management the accounting principles and practices adopted by the Group (including a review of the Company's unaudited condensed consolidated financial statements and interim report for the six months ended June 30, 2025), and the Audit Committee had no objections[253][254]