升辉清洁(02521) - 2025 - 中期财报

Corporate Information Key Personnel and Committees This section details the company's key personnel, including executive and independent non-executive directors, and outlines the composition and chairpersons of its main committees - Executive Directors include Mr. Li Chenghua (Co-Chairman and CEO), Mr. Wei Dongjin (Co-Chairman), and Mr. Chen Liming[4][5] - Independent Non-Executive Directors are Ms. Zhang Baowen, Ms. Qiu Yanhong, and Dr. Wang Hui[4][5] - Key committee chairpersons are: Audit Committee (Dr. Wang Hui), Remuneration Committee (Ms. Zhang Baowen), Nomination Committee (Ms. Qiu Yanhong), and Investment Committee (Dr. Wang Hui)[4][5][6][7] Company Details and Contact Information This section provides essential company details, including registered office, principal business locations, share registrar, key bankers, website, and stock code - The company's registered office is in the Cayman Islands, with its headquarters and principal place of business in China located in Panyu District, Guangzhou[6][7] - The principal place of business in Hong Kong is located at MassMutual Tower, Gloucester Road, Wan Chai[7] - The company's stock code is 2521, and its website is **www.gzshqj.com**[9](index=9&type=chunk) Management Discussion and Analysis Business Review The Group, a cleaning and maintenance service provider in Guangdong, reported RMB 358.8 million in revenue and RMB 7.9 million in profit for H1 2025, with gross profit margin improving from 9.8% to 16.8% due to increased revenue - The Group is a cleaning and maintenance service provider in Guangdong Province, China[10][13] Key Financial Data Comparison for H1 2025 (RMB million) | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Total Revenue | 358.8 | N/A | | Profit for the Period | 7.9 | N/A | | Gross Profit | 60.2 | 32.0 | | Gross Profit Margin | 16.8% | 9.8% | - The increase in gross profit margin was primarily due to increased revenue[11][13] Outlook Leveraging China's economic and urbanization growth, the Group plans to expand its cleaning and maintenance services into new high-demand regions, particularly the Greater Bay Area, through organic growth and strategic acquisitions to secure large infrastructure projects - The Group plans to replicate its business model in other regions of China with high demand for property cleaning services[12][14] - Expansion will occur through organic growth and potential acquisitions/investments in cleaning and maintenance service providers within the Greater Bay Area to broaden customer base and geographical coverage[12][14] - The goal is to provide cleaning services for future large-scale infrastructure projects[12][14] Financial Review The Group saw revenue growth and improved gross profit margins in H1 2025, driven by more property cleaning projects, but net profit and margin declined due to fair value losses on financial assets Revenue For H1 2025, the Group's revenue grew by 10.1% to RMB 358.8 million, with property cleaning services contributing 95.8% of the total, driven by an increase in project numbers Revenue Composition for H1 2025 | Service Type | Percentage | | :--- | :--- | | Property Cleaning Services | 95.8% | | Public Space Cleaning Services | 4.2% | Revenue Year-on-Year Growth (RMB million) | Metric | H1 2025 | H1 2024 | Year-on-Year Growth | | :--- | :--- | :--- | :--- | | Revenue | 358.8 | 325.8 | 10.1% | - The increase in revenue was primarily due to an increase in the number of property cleaning service projects[16][19] Cost of services Cost of services rose by 1.7% to RMB 298.6 million, mainly due to higher employee benefits and subcontracting labor costs to support increased project volume Cost of Services Year-on-Year Growth (RMB million) | Metric | H1 2025 | H1 2024 | Year-on-Year Growth | | :--- | :--- | :--- | :--- | | Cost of Services | 298.6 | 293.7 | 1.7% | - The increase in cost of services was primarily due to higher employee benefit expenses and subcontracting labor costs, consistent with the increased manpower required for a greater number of projects[17][20] Gross profit and gross profit margin Gross profit surged by 88.1% to RMB 60.2 million, and gross profit margin improved from 9.8% to 16.78%, primarily driven by increased revenue Gross Profit and Gross Profit Margin Year-on-Year Change | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Gross Profit | 60.2 | 32.0 | +88.1% | | Gross Profit Margin | 16.78% | 9.8% | +6.98 pp | - The increase in gross profit and gross profit margin was primarily due to increased revenue[18][21] Other income, net Other income, net, increased by 116.7% to RMB 2.6 million, primarily driven by higher rental income Other Income, Net Year-on-Year Growth (RMB million) | Metric | H1 2025 | H1 2024 | Year-on-Year Growth | | :--- | :--- | :--- | :--- | | Other Income, Net | 2.6 | 1.2 | 116.7% | - The increase in other income was primarily due to increased rental income[22][27] Selling and marketing expenses Selling and marketing expenses rose by 22.9% to RMB 4.3 million, reflecting increased marketing and bidding costs aligned with the Group's business expansion Selling and Marketing Expenses Year-on-Year Growth (RMB million) | Metric | H1 2025 | H1 2024 | Year-on-Year Growth | | :--- | :--- | :--- | :--- | | Selling and Marketing Expenses | 4.3 | 3.5 | 22.9% | - The increase was due to higher marketing and entertainment expenses, as well as bidding expenses, consistent with the Group's business expansion[23][28] General and administrative expenses General and administrative expenses increased by 18.0% to RMB 21.6 million, mainly due to higher staff and office costs General and Administrative Expenses Year-on-Year Growth (RMB million) | Metric | H1 2025 | H1 2024 | Year-on-Year Growth | | :--- | :--- | :--- | :--- | | General and Administrative Expenses | 21.6 | 18.3 | 18.0% | - The increase was primarily due to higher staff costs and office expenses[24][29] Finance expenses, net Net finance expenses improved from an RMB 183 thousand expense in H1 2024 to an RMB 10 thousand income in H1 2025, driven by increased interest income Net Finance Expenses Year-on-Year Change (RMB thousand) | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Net Finance Expenses | 10 (Income) | (183) (Expense) | - The change was due to increased interest income[25][30] Income tax expenses Income tax expenses significantly increased to RMB 4.0 million, primarily due to higher taxable profit Income Tax Expenses Year-on-Year Growth (RMB million) | Metric | H1 2025 | H1 2024 | Year-on-Year Growth | | :--- | :--- | :--- | :--- | | Income Tax Expenses | 4.0 | 1.1 | +263.6% | - The increase in income tax expenses was due to higher taxable profit[26][31] Net profit and net profit margin Net profit decreased by 22.5% to RMB 7.9 million, with net profit margin falling from 3.1% to 2.2%, mainly due to fair value losses on financial assets, partially offset by revenue growth Net Profit and Net Profit Margin Year-on-Year Change | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Net Profit | 7.9 | 10.2 | -22.5% | | Net Profit Margin | 2.2% | 3.1% | -0.9 pp | - The decrease was due to fair value losses recognized on financial assets at fair value through profit or loss, partially offset by increased revenue[32][34] Capital structure The Group successfully placed 193,755,000 new shares on June 16, 2025, raising HK$ 47.60 million net, allocated for waste recycling, acquisitions, and general working capital - On June 16, 2025, 193,755,000 new shares were successfully placed at HK$0.250 per share[33][35] - The net proceeds from the placement amounted to approximately HK$47.60 million[33][35] - The proceeds are intended for: (1) 50% capital injection into Tianyou Shenghui for waste recycling business development; (2) 10% for investment or acquisition of potential cleaning and maintenance service providers in China and Hong Kong; and (3) 40% for general working capital[33][35] - The proceeds are expected to be fully utilized by or before May 19, 2027[33][35] Liquidity and financial resources As of June 30, 2025, the Group reported RMB 436.6 million in net assets, RMB 106.4 million in cash and equivalents, and RMB 50.0 million in total borrowings, indicating a sound liquidity position Liquidity and Financial Resources Comparison (RMB million) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Net Assets | 436.6 | 384.9 | | Cash, Bank Balances, and Restricted Bank Deposits | 106.4 | 92.5 | | Total Borrowings (including lease liabilities and bank borrowings) | 50.0 | 52.0 | Key Financial Ratios Comparison | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Current Ratio (times) | 2.6 | 2.3 | | Debt-to-Asset Ratio (%) | 11.5 | 15.5 | | Net Debt-to-Equity Ratio (%) | Net Cash | Net Cash | Capital expenditure and commitments Capital expenditure for H1 2025 was approximately RMB 1.0 million, mainly for property, plant, and equipment, a significant decrease year-on-year, with no capital commitments at period-end Capital Expenditure Comparison (RMB million) | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Capital Expenditure | 1.0 | 4.6 | - Capital expenditure primarily included expenses for the purchase of property, plant, and equipment[40][44] - As of June 30, 2025, no capital commitments were incurred[40][44] Pledge of assets As of June 30, 2025, the Group had not pledged any assets as collateral for any financing - As of June 30, 2025, the Group had not pledged any assets as collateral for any financing granted to the Group[41][45] Contingent liabilities As of June 30, 2025, and December 31, 2024, the Group had no significant contingent liabilities - The Group had no significant contingent liabilities as of June 30, 2025, and December 31, 2024[42][46] Treasury policies The Group maintains a prudent treasury policy, with management actively monitoring liquidity to ensure its financial structure meets funding requirements - The Group adopts a prudent treasury policy[43][47] - Management closely monitors liquidity to ensure the liquidity structure can meet funding requirements[43][47] Foreign exchange exposure With most financial assets and liabilities denominated in RMB, the Group's foreign exchange risk is negligible, though management monitors and may consider hedging if risks become significant, subject to Chinese government regulations - The vast majority of the Group's financial assets and liabilities are primarily denominated in RMB[48][52] - Foreign exchange risk is negligible for the Group, and no foreign currency hedging is currently undertaken[48][52] - Management will closely monitor foreign exchange exposure and consider hedging if it becomes significant[48][52] - RMB conversion to foreign currencies is subject to government-enforced foreign exchange control regulations and rules[49][53] Interest rate exposure The Group's interest rate risk stems from floating-rate bank deposits and fixed-rate bank borrowings, with management monitoring and considering hedging significant exposures as needed - Interest rate risk primarily arises from cash flow interest rate risk associated with floating-rate restricted bank deposits and bank balances, as well as fixed-rate bank borrowings[50][54] - Management monitors interest rate risk and will consider hedging significant exposures when necessary[50][54] Use of proceeds from the global offering The company's November 2023 global offering yielded HK$ 73.5 million net proceeds; as of June 30, 2025, HK$ 23.7 million was utilized, with HK$ 49.8 million remaining for new offices and service enhancements, expected to be fully used by December 2026 - The net proceeds from the global offering amounted to approximately HK$73.5 million[51][55] Planned Use and Utilization of Global Offering Proceeds (As of June 30, 2025) | Intended Use | Planned Allocation (HK$ million) | Amount Utilized (HK$ million) | Amount Unutilized (HK$ million) | Expected Full Utilization Timeline | | :--- | :--- | :--- | :--- | :--- | | New Branch Offices | 36.0 | – | 36.0 | December 2026 | | Acquisition or Investment in Environmental Cleaning and Maintenance Service Providers | 15.7 | 15.7 | – | December 2026 | | Strengthening Service Capabilities in the Public Space Cleaning Sector | 14.3 | 5.8 | 8.5 | December 2026 | | Adopting Technological Reforms and Upgrading IT Systems | 5.6 | 1.3 | 4.3 | December 2026 | | Expanding 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 In H1 2025, the Group made two significant investments: acquiring two Hong Kong property management companies for HK$ 15 million and increasing its stake in BTI to 25% for RMB 15.752 million, entering waste recycling and environmental materials Acquisition of Target Companies On April 28, 2025, the Company agreed to acquire 100% of Fuyu and Fuhui Property Management for HK$ 15 million (approx. RMB 13.7 million), completing the acquisition on June 30, 2025, to expand Hong Kong property management services - On April 28, 2025, the acquisition of 100% of the issued share capital of Fuyu Property Management Co., Ltd. and Fuhui Property Management Co., Ltd. ("Target Companies") was agreed upon[58][62] - The acquisition consideration was HK$15 million (equivalent to approximately RMB13.7 million)[58][62] - The acquisition was completed on June 30, 2025, with the Target Companies primarily engaged in providing property management services in Hong Kong[58][62] Acquisition of BTI In H1 2025, the Group acquired an additional 4,375,425 shares in BTI for approximately RMB 15.752 million, increasing its stake to 25% and classifying it as an interest in an associate, focusing on waste recycling and biodegradable materials - During H1 2025, the Group further acquired 4,375,425 shares of Shenzhen Bestar Excellent Technology Co., Ltd. ("Bestar") for approximately RMB15,752,000[60][64] - As of June 30, 2025, the Group held a 25% stake in Bestar's total issued shares, with this investment classified as an interest in an associate[61][64] - Bestar primarily engages in recycling waste materials for packaging production, and the design, manufacture, and sale of biodegradable environmental materials[60][64] Future plans for material investments or capital assets As of June 30, 2025, the Group had no specific future plans for material investments or capital assets beyond those already disclosed - As of June 30, 2025, there were no specific plans for material investments or capital assets, other than those disclosed in the prospectus and this report[65][68] Human resources For H1 2025, total employee benefit expenses were RMB 186.1 million, with staff increasing to 8,068; remuneration is performance-based, supported by social insurance, training, and a share option scheme Employee Benefit Expenses and Headcount Comparison | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Total Employee Benefit Expenses (RMB million) | 186.1 | 178.0 | | Employee Headcount (as of June 30) | 8,068 | 7,169 | - Remuneration for each employee is determined based on individual responsibilities, capabilities and skills, experience and performance, and market compensation levels[66][69] - All Group employees participate in China's employee social insurance scheme, are provided with or arranged for regular training programs, and a share option scheme has been adopted to provide incentives and rewards to employees[66][69] Events after reporting period No other significant events that could affect the Group have occurred since the end of the six months ended June 30, 2025 - Other than those 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[67][70] Unaudited Condensed Consolidated Statement of Comprehensive Income This statement presents the Group's H1 2025 unaudited financial performance, showing RMB 358.8 million revenue, RMB 60.2 million gross profit, and RMB 7.9 million profit for the period, with basic and diluted EPS of RMB 0.45 cents, impacted by fair value losses on financial assets Unaudited Condensed Consolidated Statement of Comprehensive Income (For the six months ended June 30, 2025) | Metric | 2025 (RMB'000) | 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 fair value through profit or loss | (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 | 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 outlines the Group's unaudited financial position as of June 30, 2025, with total assets of RMB 635.9 million, total equity of RMB 436.4 million, and total liabilities of RMB 199.6 million, noting the addition of interests in associates and the reclassification of financial assets Unaudited Condensed Consolidated Statement of Financial Position (As of June 30, 2025) | Metric | June 30, 2025 (RMB'000) | 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 fair value through profit or loss | – | 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 payable | 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 | - Non-current assets saw the addition of RMB91,961 thousand in interest in an associate, while financial assets at fair value through profit or loss decreased from RMB101,160 thousand to zero[76] Unaudited Condensed Consolidated Statements of Changes in Equity This statement summarizes the Group's equity changes for H1 2025, with total equity increasing from RMB 384.9 million to RMB 436.4 million, primarily driven by profit for the period and proceeds from new share placements 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) | | :--- | :--- | :--- | :--- | | Balance at January 1, 2025 | 15,953 | 368,949 | 384,902 | | Profit for the period | – | 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 | - The increase in total equity was primarily driven by profit for the period (RMB7,943 thousand) and proceeds from the placement of new shares (RMB43,541 thousand)[81] Unaudited Condensed Consolidated Statements of Cash Flows This statement shows the Group's H1 2025 unaudited cash flows, with net cash outflows from operating and investing activities offset by significant net cash inflows from financing, primarily share issuance, resulting in a RMB 13.8 million net increase in cash and cash equivalents Unaudited Condensed Consolidated Statements of Cash Flows (For the six months ended June 30, 2025) | Metric | 2025 (RMB'000) | 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 generated 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 | - Net cash generated from financing activities significantly increased, primarily due to proceeds from the issuance of shares[83] Notes to the Condensed Consolidated Interim Financial Statements 1 Corporate Information Shenghui Cleaning Group Holdings Limited, incorporated in the Cayman Islands in 2021 and listed on the HKEX in December 2023, is an investment holding company primarily providing cleaning and maintenance services in China, jointly controlled by Mr. Li Chenghua and Mr. Chen Liming, with financial statements presented in RMB - The Company was incorporated in the Cayman Islands on January 4, 2021, and listed on the Main Board of The Stock Exchange of Hong Kong Limited on December 5, 2023[85][87] - The Group is principally engaged in providing cleaning and maintenance services in China[86][87] - The controlling shareholders of the Company are Mr. Li Chenghua and Mr. Chen Liming[86][87] 2 Principal Accounting Policies The Group's unaudited condensed consolidated financial statements adhere to HKAS 34 and Listing Rules, with accounting policies consistent with 2024, incorporating new HFRS effective January 1, 2025, which are not expected to materially impact the statements - The unaudited condensed consolidated financial statements are prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" issued by the Hong Kong Institute of Certified Public Accountants and the applicable disclosure requirements under the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[88][91] - The accounting policies and methods of computation used are consistent with those followed in the preparation of the Group's annual financial statements for the year ended December 31, 2024, except for the adoption of new and revised Hong Kong Financial Reporting Standards issued by the HKICPA that are mandatorily effective for annual periods beginning on or after January 1, 2025[89][91] - All new and revised Hong Kong Financial Reporting Standards are not expected to have a significant impact on the Group's condensed consolidated interim financial statements[93][95] 3 Revenue and Segment Information The Group operates as a single segment, providing cleaning and maintenance services entirely within China, with revenue recognized over time based on service progress, and no significant contract assets or liabilities recognized as of June 30, 2025 - The Group is principally engaged in providing cleaning and maintenance services in China, and the chief operating decision maker reviews the operating results of the business as a single operating segment[97][98] - For the period ended June 30, 2025, all of the Group's revenue was derived from China[102][108] - Revenue is recognized at the amount of consideration the Group expects to be entitled to, and when control of services is transferred over time, revenue is recognized over the contract period with reference to the progress towards complete satisfaction of the performance obligation[112][113][114] - No significant contract assets or liabilities were recognized at the end of each reporting period ended June 30, 2025[104][105][109][110] 4 Expenses by Nature This section details the Group's expenses for H1 2025, including employee benefits, subcontracting labor, cleaning materials, depreciation, and short-term lease expenses Expenses by Nature (For the six months ended June 30, 2025) | Metric | 2025 (RMB'000) | 2024 (RMB'000) | | :--- | :--- | :--- | | Employee benefit expenses (including directors' emoluments) | | | | – 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 labor 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 | 5 Other Income, Net For H1 2025, the Group's other income, net, was RMB 2.560 million, mainly from rental income recognized on a straight-line basis over the lease term Composition of Other Income, Net (For the six months ended June 30, 2025) | Metric | 2025 (RMB'000) | 2024 (RMB'000) | | :--- | :--- | :--- | | Rental income | 2,532 | 1,324 | | VAT refunds | – | 751 | | Donations | – | (900) | | Others | 28 | 32 | | Total | 2,560 | 1,207 | - Rental income from investment properties and leased shops is recognized on a straight-line basis over the term of the lease agreements; rental income from leased car parks is recognized over the lease period[127] 6 Finance Income/(Expenses), Net For H1 2025, the Group reported net finance income of RMB 10 thousand, an improvement from a RMB 183 thousand net expense in H1 2024, primarily due to increased interest income Finance Income/(Expenses), Net (For the six months ended June 30, 2025) | Metric | 2025 (RMB'000) | 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) | - The improvement in net finance income was primarily due to increased interest income[126] 7 Income Tax Expenses Income tax expenses rose to RMB 3.968 million, including current and deferred tax, with China operations subject to a 25% rate, though Guangzhou Shenghui benefits from a 15% preferential rate and 100% R&D super deduction Composition of Income Tax Expenses (For the six months ended June 30, 2025) | Metric | 2025 (RMB'000) | 2024 (RMB'000) | | :--- | :--- | :--- | | Current income tax | 2,278 | 1,083 | | Deferred income tax | 1,690 | 30 | | Total | 3,968 | 1,113 | - Income tax provision for the Group's China operations is calculated at the applicable tax rate of 25%, but Guangzhou Shenghui, as a high-tech enterprise, enjoys a preferential income tax rate of 15%, valid until December 28, 2026[130][131][132] - Guangzhou Shenghui has been eligible for a 100% "super deduction" for research and development expenses since the 2023 financial year[136][139] - The Group has not recognized deferred income tax assets for tax losses carried forward, as they can be carried forward for a maximum of five years[137][139] 8 Dividend For the periods ended June 30, 2025, and 2024, the Company neither paid nor declared any dividends - For the periods ended June 30, 2025, and 2024, the Company did not pay or declare any dividends[138][140] 9 Earnings Per Share For H1 2025, basic earnings per share attributable to owners was RMB 0.45 cents, down from RMB 0.62 cents in H1 2024, with diluted EPS being identical due to no potential dilutive ordinary shares Basic Earnings Per Share (For the six months ended June 30, 2025) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Profit attributable to owners of the Company (RMB'000) | 7,943 | 10,155 | | Weighted average number of ordinary shares in issue (thousand shares) | 1,772,037 | 1,625,000 | | Basic earnings per share (RMB cents) | 0.45 | 0.62 | - The weighted average number of ordinary shares in issue for H1 2025 has accounted for the placement of 193,755,000 shares completed on June 16, 2025[143] - As there were no potential dilutive ordinary shares outstanding for the periods ended June 30, 2025, and 2024, diluted earnings per share was the same as basic earnings per share[144][145] 10 Property, Plant and Equipment For H1 2025, capital expenditure for property, plant, and equipment was approximately RMB 1.043 million, mainly for plant and machinery, a significant decrease from RMB 4.633 million in H1 2024 Purchase of Property, Plant and Equipment (For the six months ended June 30, 2025) | Metric | 2025 (RMB'000) | 2024 (RMB'000) | | :--- | :--- | :--- | | Purchase of property, plant and equipment | 1,043 | 4,633 | - Primarily expenses for plant and machinery[147][149] 11 Trade and Other Receivables and Prepayments As of June 30, 2025, net trade and other receivables and prepayments totaled RMB 376.746 million, with total trade receivables at RMB 345.251 million, of which RMB 198.670 million were aged within 60 days Trade and Other Receivables and Prepayments, Net (As of June 30, 2025) | Metric | June 30, 2025 (RMB'000) | December 31, 2024 (RMB'000) | | :--- | :--- | :--- | | 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 | Trade Receivables Aging Analysis by Invoice Date (As of June 30, 2025) | Aging | Amount (RMB'000) | | :--- | :--- | | 0 – 60 days | 198,670 | | 61 – 180 days | 53,772 | | 181 – 365 days | 42,988 | | Over 1 year | 49,821 | | Total | 345,251 | - The carrying amounts of trade and other receivables are all denominated in RMB and approximate their fair values[157][158] 12 Bank Borrowing As of June 30, 2025, bank borrowings decreased to RMB 30.120 million from RMB 39.714 million at December 31, 2024 Bank Borrowings (As of June 30, 2025) | Metric | June 30, 2025 (RMB'000) | December 31, 2024 (RMB'000) | | :--- | :--- | :--- | | Bank loans | 30,120 | 39,714 | 13 Share Capital The Company's issued and paid-up share capital increased due to the June 16, 2025, placement of 193,755,000 new shares, raising net proceeds of approximately RMB 43.541 million (approx. HK$ 47.600 million) Share Capital Movement (As of June 30, 2025) | Metric | Number of ordinary shares | Equivalent par value of shares (RMB) | | :--- | :--- | :--- | | January 1, 2025 | 1,755,980,000 | 15,952,605 | | Placement of new shares | 193,755,000 | 1,768,154 | | June 30, 2025 | 1,949,735,000 | 17,720,759 | - On June 16, 2025, a total of 193,755,000 shares were placed at a placing price of HK$0.250 per share, with net proceeds of approximately RMB43,541,000 (equivalent to approximately HK$47,600,000)[162] 14 Trade and Other Payables As of June 30, 2025, total trade and other payables decreased to RMB 88.457 million from RMB 107.030 million at December 31, 2024, with most trade payables (RMB 25.201 million) aged within 60 days Trade and Other Payables (As of June 30, 2025) | Metric | June 30, 2025 (RMB'000) | 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 | Trade Payables Aging Analysis by Invoice Date (As of June 30, 2025) | Aging | Amount (RMB'000) | | :--- | :--- | | 0 – 60 days | 25,201 | | 61 – 180 days | 4,926 | | 181 – 365 days | 1,539 | | Over 1 year | 2,127 | | Total | 33,793 | - The carrying amounts of trade and other payables are denominated in RMB and approximate their fair values[166] 15 Interest in Associate As of June 30, 2025, the Group's 25% interest in associate BTI was RMB 91.961 million, with BTI focusing on waste recycling and biodegradable materials, and the Company's Co-Chairman also serving as a BTI director and major shareholder Interest in an Associate (As of June 30, 2025) | Metric | June 30, 2025 (RMB'000) | December 31, 2024 (RMB'000) | | :--- | :--- | :--- | | Investment cost in an associate | 91,518 | – | | Share of post-acquisition results | 443 | – | | Total | 91,961 | – | - Bestar primarily engages in the business of recycling waste materials for packaging material production, and the design, manufacture, and sale of biodegradable environmental materials[171] - As of June 30, 2025, the Group held a 25% beneficial interest in Bestar (December 31, 2024: 19.51%)[172] - Mr. Wei Dongjin, the Company's Co-Chairman and Executive Director, is also a director and major shareholder of Bestar[173] 16 Commitments As of June 30, 2025, the Group had no capital commitments - As of June 30, 2025, no capital commitments were incurred (December 31, 2024: nil)[172] 17 Related Party Transactions This section discloses the Group's related party transactions and balances, including advances from controlling shareholders and key management remuneration Transactions with Controlling Shareholders (For the six months ended June 30, 2025) | Metric | 2025 (RMB'000) | 2024 (RMB'000) | | :--- | :--- | :--- | | Advances from controlling shareholders during the year | – | 4,614 | Balances Due to Controlling Shareholders (As of June 30, 2025) | Metric | June 30, 2025 (RMB'000) | December 31, 2024 (RMB'000) | | :--- | :--- | :--- | | Amounts due to Mr. Li | 21,025 | 21,025 | | Amounts due to Mr. Chen | 1,125 | 1,125 | Key Management Remuneration (For the six months ended June 30, 2025) | Metric | 2025 (RMB'000) | 2024 (RMB'000) | | :--- | :--- | :--- | | Salaries and wages | 1,247 | 1,103 | | Social insurance and housing provident fund contributions | 102 | 226 | | Total | 1,349 | 1,329 | 18 Financial Risk Management Some of the Group's financial assets and liabilities are measured at fair value; as of June 30, 2025, listed equity shares classified as financial assets at fair value through profit or loss were zero, down from RMB 101.160 million at December 31, 2024 - Some of the Group's financial assets and liabilities are measured at fair value at the end of each reporting period[183][184] Listed Equity Shares Classified as Financial Assets at Fair Value Through Profit or Loss (RMB'000) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Listed equity shares classified as financial assets at fair value through profit or loss | – | 101,160 | - The fair value of shares is estimated based on quoted prices available in active markets (Level 1)[185] 19 Subsequent Events No significant events requiring adjustments or additional disclosures in these consolidated financial statements have occurred after June 30, 2025 - No significant events have occurred after the period ended June 30, 2025, that would require adjustments to or additional disclosures in these consolidated financial statements[186][187] Other Information Directors' and Chief Executives' Interests and Short Positions As of June 30, 2025, Executive Directors Mr. Li Chenghua and Mr. Chen Liming each held a 30.08% long position in the Company's shares through controlled corporations and a 100% beneficial interest in their wholly-owned associated corporations, with no other significant interests or short positions disclosed Long positions in the shares of the Company As of June 30, 2025, Mr. Li Chenghua and Mr. Chen Liming each held 586,543,750 shares, representing 30.08% of the issued share capital, through their wholly-owned entities, and are considered a group of controlling shareholders Directors' Long Positions in the Shares of the Company (As of June 30, 2025) | Name of Director | Nature of Interest | Number of Shares Held | Percentage of Issued Share Capital | | :--- | :--- | :--- | :--- | | Mr. Li Chenghua | Interest in controlled corporation | 586,543,750 | 30.08% | | Mr. Chen Liming | Interest in controlled corporation | 586,543,750 | 30.08% | - Mr. Li and Mr. Chen are deemed to be interested in 1,173,087,500 shares, of which 586,543,750 shares are held by Fengsheng Cleaning and 586,543,750 shares are held by Sunrise Cleaning[192] Long positions in the shares of associated corporations Mr. Li Chenghua wholly owns Fengsheng Cleaning, and Mr. Chen Liming wholly owns Sunrise Cleaning, both associated corporations of the Company, each holding 1 share, representing 100% interest Directors' Long Positions in the Shares of Associated Corporations (As of June 30, 2025) | Name of Director | Name of Associated Corporation | Nature of Interest | Number of Shares Held | Percentage of Interest in Associated Corporation | | :--- | :--- | :--- | :--- | :--- | | Mr. Li | Fengsheng Cleaning | Beneficial owner | 1 | 100% | | Mr. Chen | Sunrise Cleaning | Beneficial owner | 1 | 100% | Substantial Shareholders' Interests and Short Positions As of June 30, 2025, Fengsheng Cleaning and Sunrise Cleaning each held a 30.08% long position in the Company's shares; Mr. Li Chenghua, Mr. Chen Liming, and Mr. Li's spouse, Ms. Tang Yongzhen, are deemed to have interests, with no short positions disclosed Substantial Shareholders' Long Positions in the Shares of the Company (As of June 30, 2025) | Name of Shareholder/Entity | Nature of Interest | Number of Shares Held | Percentage of Issued Share Capital | | :--- | :--- | :--- | :--- | | Fengsheng Cleaning | Beneficial owner / Other (Controlling shareholder interest) | 586,543,750 | 30.08% | | Mr. Li | Interest in controlled corporation / Interest in controlled corporation | 586,543,750 | 30.08% | | Ms. Tang Yongzhen | Spouse's interest | 586,543,750 | 30.08% | | Sunrise Cleaning | Beneficial owner / Other (Controlling shareholder interest) | 586,543,750 | 30.08% | | Mr. Chen | Interest in controlled corporation / Interest in controlled corporation | 586,543,750 | 30.08% | - Mr. Li and Mr. Chen are deemed to be interested through their wholly-owned Fengsheng Cleaning and Sunrise Cleaning. Ms. Tang Yongzhen (Mr. Li's spouse) is deemed to be interested in the shares in which Mr. Li is interested under the Securities and Futures Ordinance[204] Disclosure of Information on Directors This section updates the biographical details of the Company's executive and independent non-executive directors, highlighting their industry experience, academic backgrounds, and leadership roles Executive Director This section provides detailed biographies of Mr. Li Chenghua (Co-Chairman and CEO), Mr. Wei Dongjin (Co-Chairman), and Mr. Chen Liming (Executive Director), emphasizing their extensive industry experience, academic backgrounds, and key leadership roles - Mr. Li Chenghua (52 years old): Co-Chairman and Chief Executive Officer, one of the Group's founders, with over 26 years of experience in cleaning service industry management and operations, formerly President of Guangzhou Panyu District Environmental Sanitation Industry Association, currently President of Guangzhou Environmental Sanitation Industry Association[205][206][207][208][209] - Mr. Wei Dongjin (47 years old): Co-Chairman, holds an Executive Master of Business Administration degree from City University of Hong Kong, with over 20 years of experience in oil transportation, bio-based agriculture, and agricultural and forestry waste recycling related industries, currently founder, chairman, general manager, and legal representative of Shenzhen Bestar Excellent Technology Co., Ltd. (BTI)[210][211] - Mr. Chen Liming (55 years old): Executive Director, one of the Group's founders, with over 24 years of experience in cleaning service industry management and operations, responsible for the Group's strategic management and business strategy formulation, having completed several in-service courses at Sun Yat-sen University[212][213][215][216][217][218] Independent non-executive Director This section details the biographies of Dr. Wang Hui, Ms. Zhang Baowen, and Ms. Qiu Yanhong, highlighting their professional backgrounds in corporate finance, law, and banking, academic qualifications, and committee roles - Dr. Wang Hui (46 years old): Independent Non-Executive Director, with over 25 years of experience in corporate finance and accounting, project investment and decision-making, and risk management and control, currently Chairman of the Audit Committee and Investment Committee[219][220][222] - Ms. Zhang Baowen (37 years old): Independent Non-Executive Director, a practicing solicitor in Hong Kong, with over 12 years of experience in the legal industry, currently Chairman of the Remuneration Committee[221][223][222] - Ms. Qiu Yanhong (38 years old): Independent Non-Executive Director, with approximately 13 years of banking experience, specializing in securities and asset management services, currently Chairman of the Nomination Committee[224][225][226][227][228][229] Securities Transactions by Directors All directors confirmed full compliance with the Model Code for Securities Transactions by Directors of Listed Issuers during the six months ended June 30, 2025 - All directors confirmed full compliance with the Standard Code and its code of conduct regarding directors' securities transactions for the six months ended June 30, 2025[232] Corporate Governance For H1 2025, the Company complied with the Corporate Governance Code, except for Mr. Li Chenghua's dual role as Co-Chairman and CEO, which the Board believes provides strong, consistent leadership in the Group's best interest - The Company complied with the Corporate Governance Code for the six months ended June 30, 2025, with the following exception[233][234] - Deviation: Mr. Li Chenghua concurrently serves as Co-Chairman of the Board and Chief Executive Officer (Code Provision C.2.1)[233][234] - The Directors (including the independent non-executive Directors) believe that Mr. Li is the most suitable person to hold both positions, and the current structure facilitates strong and consistent leadership, aligning with the best overall interests of the Group and the Company's shareholders[233][234] Share Option Scheme The Company adopted a share option scheme on November 14, 2023, to attract and incentivize talent, with exercise prices determined by the Board and limits on total shares and individual participation; as of June 30, 2025, no options were outstanding or active - The Company adopted a share option scheme on November 14, 2023[235][236] - The scheme aims to attract and retain the most competent personnel and provide additional incentives to the Group's employees, directors, consultants, advisors, distributors, contractors, suppliers, agents, and service providers[235][236] - The exercise price is determined by the Board at its sole discretion and shall not be less than the higher of the closing price of the shares as stated in the daily quotation sheet of the Stock Exchange on the offer date, the average closing price as stated in the daily quotation sheet of the Stock Exchange for the five business days immediately preceding the offer date, and the nominal value of the shares on the offer date[238][241] - The total number of shares that may be issued upon exercise of all options granted under the Share Option Scheme and any other share option schemes and share award schemes of the Company shall not exceed 10% of the total number of shares in issue on the Listing Date (i.e., a maximum of 162,500,000 shares as of December 31, 2023)[239][241] - The Share Option Scheme will remain valid for 10 years from November 14, 2023[243][247] - As of June 30, 2025, no share options were outstanding, granted, cancelled, exercised, or lapsed[243][248] Management Contracts During the reporting period, the Company had no management or administration contracts for its business, in whole or in any substantial part - During the reporting period, the Company had not entered into or had any contracts concerning the management and administration of the whole or any substantial part of its business[244][249] Purchase, Sale or Redemption of the Listed Securities of the Company For the six months ended June 30, 2025, neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities - For the six months ended June 30, 2025, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[245][250] Audit Committee The Audit Committee reviewed the Group's unaudited condensed financial results for H1 2025, discussed accounting principles with management, and raised no objections to the financial statements or interim report - The Audit Committee has reviewed the Group's unaudited condensed financial results for the six months ended June 30, 2025, and discussed the accounting principles and practices adopted by the Group with the Company's management[251][252] - The Audit Committee had no objections[251][252]