中国玻璃(03300) - 2025 - 中期业绩

Announcement Overview This section provides the scope and statement of the unaudited consolidated interim results for H1 2025, including comparative data for H1 2024 Announcement Statement and Scope This announcement details the unaudited consolidated interim results for H1 2025, with comparative data for H1 2024 - This announcement reports the unaudited consolidated interim results for the six months ended June 30, 2025, with comparative data for the same period in 2024[3] Consolidated Financial Statements This section presents the Group's unaudited consolidated financial performance and position, highlighting significant declines in revenue and gross profit, a widened period loss, and changes in assets and liabilities Consolidated Statement of Profit or Loss Revenue decreased by 20% to RMB2,153,490 thousand, gross profit fell by 40%, and operating profit turned to a loss, resulting in a period loss of RMB318,743 thousand and basic loss per share of RMB0.15 Consolidated Statement of Profit or Loss Key Data (For the six months ended June 30) | Indicator | 2025 (RMB'000) | 2024 (RMB'000) | Change | | :--- | :--- | :--- | :--- | | Revenue | 2,153,490 | 2,683,496 | -20% | | Cost of Sales | (1,990,741) | (2,413,143) | -18% | | Gross Profit | 162,749 | 270,353 | -40% | | Other Income | 142,367 | 72,118 | +97% | | Distribution Costs | (59,750) | (50,464) | +18% | | Administrative Expenses | (177,038) | (177,787) | -0.4% | | Impairment Losses on Trade and Contract Assets | (30,698) | (16,718) | +84% | | Other Expenses | (95,638) | (19,438) | +392% | | Operating (Loss)/Profit | (58,008) | 78,064 | Turned from profit to loss | | Finance Costs | (231,089) | (229,773) | +0.6% | | Share of Profits less Losses of Joint Ventures | (1,345) | 1,837 | Turned from profit to loss | | Loss Before Tax | (290,442) | (149,872) | +94% | | Income Tax | (28,301) | 12,984 | Turned from credit to expense | | Loss for the Period | (318,743) | (136,888) | +133% | | Loss Attributable to Equity Holders of the Company | (258,451) | (119,006) | +117% | | Basic and Diluted Loss Per Share (RMB) | (0.15) | (0.07) | +114% | Consolidated Statement of Profit or Loss and Other Comprehensive Income The Group reported a total comprehensive loss of RMB258,961 thousand, a narrower loss compared to the prior year, mainly due to positive exchange differences on financial statement translation Consolidated Statement of Profit or Loss and Other Comprehensive Income Key Data (For the six months ended June 30) | Indicator | 2025 (RMB'000) | 2024 (RMB'000) | | :--- | :--- | :--- | | Loss for the Period | (318,743) | (136,888) | | Other Comprehensive Income (after tax and reclassification) | | | | - Equity securities at fair value through other comprehensive income | 126 | 326 | | - Exchange differences on translation of financial statements into presentation currency | 59,656 | (313,859) | | Total Comprehensive Income for the Period | (258,961) | (450,421) | | Attributable to: | | | | Equity holders of the Company | (198,677) | (432,559) | | Non-controlling interests | (60,284) | (17,862) | Consolidated Statement of Financial Position As of June 30, 2025, total net assets decreased by 29.3% to RMB625,065 thousand, and net current liabilities expanded to RMB7,179,129 thousand, indicating increased liquidity pressure Consolidated Statement of Financial Position Key Data (As of June 30) | Indicator | 2025 (RMB'000) | 2024 (RMB'000) | Change | | :--- | :--- | :--- | :--- | | Assets | | | | | Non-current Assets | 10,241,865 | 10,462,116 | -2.1% | | Current Assets | 3,234,569 | 3,760,649 | -14.0% | | Liabilities | | | | | Current Liabilities | 10,413,698 | 10,560,725 | -1.4% | | Non-current Liabilities | 2,437,671 | 2,778,014 | -12.3% | | Equity | | | | | Net Assets | 625,065 | 884,026 | -29.3% | | Total Equity Attributable to Equity Holders of the Company | 66,375 | 265,052 | -75.0% | | Non-controlling Interests | 558,690 | 618,974 | -9.7% | Notes to the Unaudited Interim Financial Information This section details the basis of preparation, changes in accounting policies, revenue and segment reporting, other income, loss before tax, income tax, loss per share, and various financial statement items, including significant post-period events 1. Company Information China Glass Holdings Limited, incorporated in Bermuda and listed on HKEX, primarily engages in glass product manufacturing, marketing, distribution, and related technical services - Company is incorporated in Bermuda, with shares listed on the Hong Kong Stock Exchange, primarily engaged in the production, marketing, and distribution of glass products and related technical services[10] 2. Basis of Preparation Prepared under HKAS 34, the report shows a net loss of RMB318,743 thousand and significant post-period loan defaults totaling RMB8,007,307 thousand, raising material uncertainty about the Group's going concern - This interim financial report is prepared in accordance with Hong Kong Accounting Standard 34[11][12] - As of June 30, 2025, the Group recorded a net loss of RMB318,743 thousand and net current liabilities of RMB7,179,129 thousand[13] - Subsequent to the reporting period, the Group defaulted on RMB1,295,854 thousand in borrowings, triggering cross-default clauses on an additional RMB6,711,453 thousand, making a total of RMB8,007,307 thousand immediately repayable, which raises material uncertainty about the Group's ability to continue as a going concern[13][111] - Management is actively negotiating debt restructuring, seeking strategic investors, and has received financial support from the major shareholder, Kaisheng Group, including RMB1,177,612 thousand in loans and RMB1,253,777 thousand in trade and other payables, with no repayment demands within the next 12 months[14][16] 3. Changes in Accounting Policies The Group applied HKAS 21 amendments, which had no material impact due to the absence of foreign currency non-exchangeable transactions, and no other new standards were adopted - The Group has applied the amendments to Hong Kong Accounting Standard 21, but these had no material impact on this interim report due to the absence of foreign currency non-exchangeable transactions[17] - No other new standards or interpretations not yet effective were adopted in this accounting period[18] 4. Revenue and Segment Reporting The Group manages five reportable segments, with total revenue decreasing by 20% to RMB2,153,490 thousand, primarily due to declines in colorless and energy-saving glass, while overseas markets showed growth - The Group's business is managed across five reportable segments: colorless glass, colored glass, coated glass, energy-saving and new energy glass products, and design and installation related services[19] Revenue by Major Product or Service Line (For the six months ended June 30) | Product or Service Line | 2025 (RMB'000) | 2024 (RMB'000) | Change | | :--- | :--- | :--- | :--- | | Sales of glass products | 1,989,647 | 2,501,835 | -20.5% | | Revenue from service contracts | 109,571 | 150,271 | -27.1% | | Sales of other products | 54,272 | 31,390 | +72.9% | | Total Revenue | 2,153,490 | 2,683,496 | -19.7% | Revenue by Customer Geographical Location (For the six months ended June 30) | Geographical Location | 2025 (RMB'000) | 2024 (RMB'000) | Change | | :--- | :--- | :--- | :--- | | Mainland China and Hong Kong | 1,292,586 | 1,921,999 | -32.7% | | Nigeria | 220,626 | 163,219 | +35.2% | | Middle East | 161,243 | 145,902 | +10.5% | | Kazakhstan | 95,863 | 64,775 | +48.0% | | Other countries | 383,172 | 387,601 | -1.1% | | Total Revenue | 2,153,490 | 2,683,496 | -19.7% | 4(a) Revenue by Product and Geographical Location Revenue primarily comes from glass product sales, with Mainland China and Hong Kong as the largest market, while Nigeria, the Middle East, and Kazakhstan showed significant growth Revenue by Major Product or Service Line (For the six months ended June 30) | Product or Service Line | 2025 (RMB'000) | 2024 (RMB'000) | | :--- | :--- | :--- | | Sales of glass products | 1,989,647 | 2,501,835 | | Revenue from service contracts | 109,571 | 150,271 | | Sales of other products | 54,272 | 31,390 | Revenue by Customer Geographical Location (For the six months ended June 30) | Geographical Location | 2025 (RMB'000) | 2024 (RMB'000) | | :--- | :--- | :--- | | Mainland China and Hong Kong | 1,292,586 | 1,921,999 | | Nigeria | 220,626 | 163,219 | | Middle East | 161,243 | 145,902 | | Kazakhstan | 95,863 | 64,775 | | Other countries | 383,172 | 387,601 | 4(b) Segment Results Segment performance is assessed by gross profit or loss; for H1 2025, colorless glass gross loss widened, colored glass gross profit significantly decreased, and gross profit for coated and energy-saving glass products also declined - Segment performance is measured by gross profit or loss, with other operating expenses, assets, and liabilities not measured by segment[24] Reportable Segment Gross (Loss)/Profit (For the six months ended June 30) | Segment | 2025 (RMB'000) | 2024 (RMB'000) | Change | | :--- | :--- | :--- | :--- | | Colorless glass products | (35,458) | (11,315) | Loss widened | | Colored glass products | 10,339 | 67,548 | -84.7% | | Coated glass products | 135,906 | 129,602 | +4.9% | | Energy-saving and new energy glass products | 17,421 | 42,779 | -59.3% | | Design and installation related services | 34,541 | 41,739 | -17.3% | | Total | 162,749 | 270,353 | -39.8% | 5. Other Income Other income significantly increased by 97% to RMB142,367 thousand, primarily due to a substantial gain from the disposal of property, plant, and equipment, offsetting declines in other income streams Other Income Details (For the six months ended June 30) | Item | 2025 (RMB'000) | 2024 (RMB'000) | Change | | :--- | :--- | :--- | :--- | | Government grants | 10,399 | 23,475 | -55.7% | | Interest income | 16,372 | 19,635 | -16.6% | | Net gain from sales of raw materials and scrap | 11,043 | 21,313 | -48.2% | | Net gain/(loss) on disposal of property, plant and equipment | 102,730 | (2,019) | Turned from loss to gain | | Others | 1,823 | 9,714 | -81.2% | | Total | 142,367 | 72,118 | +97.4% | - The net gain from disposal of property, plant and equipment primarily resulted from the sale of assets of a subsidiary for RMB297,551 thousand, which were classified as assets held for sale as of December 31, 2024[26] 6. Loss Before Tax Loss before tax widened to RMB290,442 thousand, primarily due to finance costs and net foreign exchange losses, as finance costs slightly increased and foreign exchange shifted from gain to loss Loss Before Tax Key Data (For the six months ended June 30) | Indicator | 2025 (RMB'000) | 2024 (RMB'000) | Change | | :--- | :--- | :--- | :--- | | Operating (Loss)/Profit | (58,008) | 78,064 | Turned from profit to loss | | Finance Costs | (231,089) | (229,773) | +0.6% | | Share of Profits less Losses of Joint Ventures | (1,345) | 1,837 | Turned from profit to loss | | Loss Before Tax | (290,442) | (149,872) | +93.8% | 6(a) Finance Costs Net finance costs were RMB215,403 thousand, a slight decrease, with reduced interest on borrowings offset by increased bank fees, and foreign exchange shifted from gain to loss, leading to a slight increase in total finance costs Finance Costs Details (For the six months ended June 30) | Item | 2025 (RMB'000) | 2024 (RMB'000) | Change | | :--- | :--- | :--- | :--- | | Interest on bank loans and other borrowings | 182,880 | 203,682 | -10.2% | | Interest on lease liabilities | 2,338 | 2,699 | -13.3% | | Bank charges and other finance costs | 47,324 | 33,552 | +41.0% | | Total borrowing costs | 232,542 | 239,933 | -3.1% | | Less: Amount capitalised | (17,139) | (5,574) | +207.5% | | Net borrowing costs | 215,403 | 234,359 | -8.1% | | Net foreign exchange loss/(gain) | 15,686 | (4,586) | Turned from gain to loss | | Total Finance Costs | 231,089 | 229,773 | +0.6% | - Borrowing costs were capitalised at an annual interest rate of 5.35% (2024: 5.87%)[27] 6(b) Other Items Cost of inventories, depreciation and amortization, and R&D costs were components of loss before tax; cost of inventories significantly decreased, while depreciation and amortization and R&D costs slightly increased Other Items Details (For the six months ended June 30) | Item | 2025 (RMB'000) | 2024 (RMB'000) | Change | | :--- | :--- | :--- | :--- | | Cost of inventories | 1,917,425 | 2,413,143 | -20.6% | | Depreciation and amortisation expenses: | | | | | - Property, plant and equipment | 331,142 | 302,824 | +9.4% | | - Investment properties | 1,424 | 1,383 | +3.0% | | - Right-of-use assets | 13,058 | 13,715 | -4.8% | | - Intangible assets | 8,778 | 9,221 | -4.8% | | Impairment loss on property, plant and equipment | – | 12,864 | -100% | | Research and development costs (excluding capitalised costs and related amortisation) | 14,685 | 11,621 | +26.4% | 7. Income Tax The Group recorded an income tax expense of RMB28,301 thousand, compared to a credit in the prior year, primarily due to gains from asset disposals, with varying corporate income tax rates and preferential rates for high-tech subsidiaries Income Tax Details (For the six months ended June 30) | Item | 2025 (RMB'000) | 2024 (RMB'000) | Change | | :--- | :--- | :--- | :--- | | Current tax: | | | | | - Mainland China | 25,889 | 9,200 | +181.4% | | - Overseas | 3,754 | 4,920 | -23.7% | | Deferred tax | (1,342) | (27,104) | -95.1% | | Total Income Tax | 28,301 | (12,984) | Turned from credit to expense | - The income tax expense is primarily due to the gain arising from the disposal of property, plant and equipment[85] - Mainland China subsidiaries are subject to a 25% corporate income tax rate, with some high-tech enterprises enjoying a 15% preferential tax rate and 100% additional tax deduction for R&D costs[31] - Hong Kong subsidiaries are subject to a 16.5% profits tax, Nigerian subsidiaries to a 30% corporate income tax (with partial exemption), Kazakhstan subsidiaries are exempt from corporate income tax until 2025, and Italian subsidiaries are subject to a 27.9% corporate income tax[30][32] 8. Loss Per Share Basic loss per share significantly increased to RMB0.15 from RMB0.07 in the prior year, with diluted loss per share being identical due to the absence of potential dilutive shares Loss Per Share (For the six months ended June 30) | Indicator | 2025 (RMB) | 2024 (RMB) | Change | | :--- | :--- | :--- | :--- | | Basic Loss Per Share | (0.15) | (0.07) | +114% | | Diluted Loss Per Share | (0.15) | (0.07) | +114% | - Basic loss per share is calculated based on the loss attributable to equity holders of the Company of RMB258,451 thousand and the weighted average of 1,684,218 thousand ordinary shares outstanding[33] - Diluted loss per share is the same as basic loss per share due to the absence of potential dilutive shares[34] 8(a) Basic Loss Per Share Basic loss per share was RMB0.15, calculated based on the loss attributable to equity holders of RMB258,451 thousand and 1,684,218 thousand weighted average ordinary shares outstanding - Basic loss per share was RMB0.15, calculated based on the loss attributable to equity holders of the Company of RMB258,451 thousand and the weighted average of 1,684,218 thousand ordinary shares outstanding[33] 8(b) Diluted Loss Per Share Diluted loss per share was the same as basic loss per share for H1 2025, due to the absence of outstanding potential dilutive shares - For the six months ended June 30, 2025, diluted loss per share was the same as basic loss per share due to the absence of outstanding potential dilutive shares[34] 9. Trade and Bills Receivables Total trade and bills receivables increased by 16.5% to RMB389,700 thousand, driven by a significant rise in third-party receivables, with increased loss allowance and a notable increase in receivables aged over six months but less than one year Trade and Bills Receivables Details (As of June 30) | Item | 2025 (RMB'000) | 2024 (RMB'000) | Change | | :--- | :--- | :--- | :--- | | Trade receivables from third parties | 523,160 | 430,374 | +21.6% | | Amounts due from Kaisheng Group and its associates | 594 | 1,371 | -56.7% | | Less: Loss allowance | (160,390) | (139,636) | +14.9% | | Financial assets measured at amortised cost | 363,364 | 292,109 | +24.4% | | Bills receivables | 26,336 | 42,287 | -37.8% | | Total | 389,700 | 334,396 | +16.5% | Ageing Analysis of Trade and Bills Receivables (As of June 30) | Ageing | 2025 (RMB'000) | 2024 (RMB'000) | Change | | :--- | :--- | :--- | :--- | | Within 1 month | 144,660 | 151,871 | -4.7% | | Over 1 month but within 3 months | 114,278 | 97,562 | +17.1% | | Over 3 months but within 6 months | 54,275 | 60,161 | -9.7% | | Over 6 months but within 1 year | 61,229 | 6,768 | +804.7% | | Over 1 year | 15,258 | 18,034 | -15.4% | 10. Other Receivables Total other receivables slightly decreased to RMB454,279 thousand, with amounts due from related parties remaining stable, while deposits and other receivables slightly increased, and loss allowance also increased Other Receivables Details (As of June 30) | Item | 2025 (RMB'000) | 2024 (RMB'000) | Change | | :--- | :--- | :--- | :--- | | Amounts due from related parties | 115,408 | 115,408 | 0% | | Deposits and other receivables (net of loss allowance) | 154,252 | 156,896 | -1.7% | | VAT recoverable/deductible | 184,619 | 184,989 | -0.2% | | Total | 454,279 | 457,293 | -0.7% | - Amounts due from related parties are unsecured, interest-free, and have no fixed repayment terms[38] 11. Trade and Bills Payables Total trade and bills payables increased by 13.2% to RMB1,270,823 thousand, with both third-party trade payables and bills payables increasing, and most payables due within one month or on demand Trade and Bills Payables Details (As of June 30) | Item | 2025 (RMB'000) | 2024 (RMB'000) | Change | | :--- | :--- | :--- | :--- | | Trade payables to third parties | 808,517 | 716,531 | +12.8% | | Amounts due to Kaisheng Group and its associates | 222,810 | 214,172 | +4.0% | | Bills payables | 239,496 | 191,458 | +25.1% | | Total | 1,270,823 | 1,122,161 | +13.2% | Ageing Analysis of Trade and Bills Payables (As of June 30) | Ageing | 2025 (RMB'000) | 2024 (RMB'000) | Change | | :--- | :--- | :--- | :--- | | Within 1 month or on demand | 1,073,831 | 955,897 | +12.3% | | After 1 month but within 6 months | 184,146 | 166,264 | +10.8% | | After 6 months but within 1 year | 12,846 | – | N/A | 12. Accruals and Other Payables Total accruals and other payables slightly decreased to RMB1,623,874 thousand, with amounts due to related parties remaining stable, while payables related to construction and asset acquisition decreased Accruals and Other Payables Details (As of June 30) | Item | 2025 (RMB'000) | 2024 (RMB'000) | Change | | :--- | :--- | :--- | :--- | | Amounts due to related parties | 1,087,611 | 1,082,204 | +0.5% | | Accruals and other payables (financial liabilities measured at amortised cost) | 1,574,758 | 1,625,860 | -3.1% | | Various taxes payable | 48,628 | 60,490 | -19.6% | | Provision for legal claims | 488 | 1,506 | -67.6% | | Total | 1,623,874 | 1,687,856 | -3.8% | - Amounts due to related parties are unsecured, interest-free, and have no fixed repayment terms[40] 13. Share Capital, Reserves and Dividends The Board did not recommend an interim dividend for H1 2025, and no share options were granted or exercised, nor were any share awards made to employees under the company's schemes - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025[41] - The Company has a share option scheme and a share award scheme, but no share options were granted or exercised, nor were any share awards made to employees during this period[42][44] 13(a) Dividends The Board did not recommend an interim dividend for H1 2025, and no final dividend for the previous financial year was approved or paid during this interim period - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025[41] - No final dividend for the previous financial year was approved and paid during this interim period[41] 13(b) Equity-settled Share-based Payment Transactions The Company has share option and share award schemes to incentivize employees, but for H1 2025, no share options were granted or exercised, nor were any ordinary shares purchased or awarded - The Company has a share option scheme (approved in 2016) and a share award scheme (adopted in 2011) to incentivize and retain employees[42][43] - For the six months ended June 30, 2025, no share options were granted or exercised under either scheme, nor were any ordinary shares purchased or awarded to employees[42][44] 14. Contingent Liabilities The Group faces two main contingent liabilities: an uncertain fine against Orda Glass Ltd LLP for pollutant emissions, and potential unquantifiable penalty interest from post-period loan defaults and cross-defaults - The Kazakhstan subsidiary, Orda Glass Ltd LLP, was fined for exceeding pollutant emission limits, which was later revoked on appeal, but the final outcome remains uncertain, and no provision has been made[45] - Post-period loan defaults triggered cross-default clauses, which may result in penalty interest, but the amount of penalty interest cannot be reliably estimated at present[46] 15. Non-adjusting Events After the Reporting Period Post-period, the Group defaulted on RMB1,295,854 thousand in borrowings, triggering cross-default clauses on an additional RMB6,711,453 thousand, making them immediately repayable, though non-current borrowings were not reclassified - Subsequent to the reporting period, the Group defaulted on RMB1,295,854 thousand in borrowings, including a syndicated loan of RMB1,022,699 thousand and other bank borrowings of RMB273,155 thousand[47] - These defaults triggered cross-default clauses on approximately RMB6,711,453 thousand of other outstanding borrowings, making them immediately repayable[47] - This interim financial report did not reclassify non-current borrowings to current liabilities due to the triggered cross-default clauses[47] Management Discussion and Analysis This section provides an overview of the market, business operations, and financial performance for H1 2025, along with the outlook and strategic plans for H2 2025 Market Review In H1 2025, global economic downturn and tightening international trade impacted the market, with weak domestic real estate and oversupply in architectural glass, while the photovoltaic industry faced imbalance, though concentrated solar power developed steadily - In H1 2025, the global economy faced downward pressure, and the international trade environment tightened[48] - The domestic real estate sector showed weak recovery, leading to oversupply and price pressure in the architectural glass market[49] - The photovoltaic industry experienced supply-demand imbalance and shrinking profit margins, while the concentrated solar power sector maintained steady development[49] Business Review The Group operates 11 float glass production lines, with H1 2025 seeing decreased production, sales, and a 20% drop in average selling price; the company is implementing 'three major campaigns' (cash flow improvement, cost reduction, loss control), optimizing product structure, expanding overseas, and achieving significant technological innovations - The Group operates 15 float glass production lines (11 in operation), with products applied in construction, automotive, and solar energy sectors[50] - In H1 2025, glass production decreased by approximately 8%, sales decreased by approximately 1%, and the comprehensive average selling price fell by approximately 20%[52] - The Company is advancing "three major campaigns" (cash flow improvement, cost reduction, loss control) through energy management, lean production, product structure optimization, asset operation enhancement, and organizational efficiency improvement to reduce costs and enhance efficiency[55][56][57][58][59] - Overseas subsidiaries (Nigeria, Kazakhstan, Italy) maintained good operating performance, and the Egypt project is progressing in an orderly manner[60][61][62][63] - Significant achievements in technological innovation include the mass production of new Low-E glass, with some products selected as industry demonstration cases[64] Overview The Group operates 11 float glass production lines, producing various glass types for construction, automotive, and solar applications, and is actively pursuing a 'going global' strategy with operations in Nigeria, Kazakhstan, Italy, and an ongoing project in Egypt - The Group owns 15 float glass production lines with a daily melting capacity of 8,200 tons, of which 11 are in operation, with products applied in construction, automotive, and solar energy sectors[50] - Additionally, the Group has 2 photovoltaic rolled glass lines, 3 offline Low-E coated glass lines, 5 solar mirror lines, and a professional glass equipment and technology service provider[50] - The Company is actively implementing a "going global" strategy, with operations established in Nigeria, Kazakhstan, and Italy, and the construction of a float glass production line in Egypt is underway[51] Production, Sales and Selling Price In H1 2025, glass production decreased by approximately 8% to 28 million weight cases, sales decreased by 1% to 25 million weight cases, and the average selling price fell by 20% to RMB80 per weight case - In H1 2025, glass production was approximately 28 million weight cases, a year-on-year decrease of approximately 8%[52] - Sales volume was approximately 25 million weight cases, a year-on-year decrease of approximately 1%[52] - The comprehensive average selling price was RMB80 per weight case, a year-on-year decrease of approximately 20%[52] Raw Material, Fuel Prices and Manufacturing Costs In H1 2025, soda ash prices declined due to loose supply, mineral raw material prices fluctuated, and fuel costs varied, with natural gas prices falling and petroleum coke prices trending upwards - In H1 2025, the soda ash market saw loose supply and falling prices[53] - Mineral raw material prices fluctuated at low levels, with some increasing due to rising transportation costs[53] - Domestic natural gas prices continued to decline, while petroleum coke market prices fluctuated upwards within a range[54] Key Initiatives in H1 2025 In H1 2025, the Company focused on 'coordinated efforts, overseas expansion, technological innovation, performance culture, compliance management, and brand building,' prioritizing 'three major campaigns' (cash flow improvement, cost reduction, loss control), achieving good overseas operations, significant technological innovations, and strengthening corporate governance - The Company's work in H1 focused on six key areas: coordinated efforts, overseas expansion, technological innovation, performance culture, compliance management, and brand building[55] - The "three major campaigns" (cash flow improvement, cost reduction, and loss control) were advanced through energy management, lean production, product structure optimization, asset operation enhancement, and organizational efficiency improvement to achieve cost reduction, efficiency gains, and enhanced cash flow resilience[55][56][57][58][59] - Overseas subsidiaries (Nigeria, Kazakhstan, Italy) maintained good operating performance, and the Egypt project is progressing in an orderly manner[60][61][62][63] - Significant achievements in technological innovation include the mass production of new Low-E glass, with some products selected as industry demonstration cases[64] - Performance assessment mechanisms were strengthened, cultural development was enhanced, compliance management was comprehensively improved, and brand and market recognition were boosted through ESG ratings[65][66] Coordinated Advancement of “Three Major Campaigns” The Company focuses on 'cash flow improvement, cost reduction, and loss control' through market-based negotiation, technological transformation, lean production, product structure optimization, asset disposal, and optimized capital allocation, aiming for comprehensive enhancement of efficiency - The Company focused on "cash flow improvement, cost reduction, and loss control" as core initiatives, uniformly implementing measures to reduce costs and expenses[55] - Through energy management, lean production, product structure optimization, asset operation enhancement, and organizational efficiency improvement, the Company aims to achieve cost reduction, efficiency gains, and enhanced cash flow resilience[55][56][57][58][59] Good Operating Performance of Overseas Subsidiaries Overseas subsidiaries maintained good operating performance, with Nigeria Company's net profit significantly increasing, Kazakhstan Company's production and sales ratio improving, Italy Company's photovoltaic business growing strongly, and the Egypt project progressing - Nigeria Company's net profit significantly increased, with a leading comprehensive gross profit margin in the industry, and is advancing waste heat power generation and petroleum coke substitution projects to reduce costs[60] - Kazakhstan Company's production and sales ratio steadily improved, strengthening compliance management, optimizing product structure to focus on high-value-added products, and reforming its distribution system[61] - Italy Company's photovoltaic business experienced strong growth, with traditional advantageous businesses contributing steadily, achieving continuous and stable profitability[62] - The Egypt project construction is progressing in an orderly manner and is ready for main engineering construction[63] Significant Achievements in Technological Innovation The Company achieved continuous breakthroughs in technological innovation, with new low-resistance home appliance Low-E glass and triple-silver high-performance Low-E glass achieving industrial mass production, and 'China Glass Blue' Low-E energy-saving glass selected as an industry demonstration case - New low-resistance home appliance Low-E glass and triple-silver high-performance Low-E glass have achieved industrial mass production, with key indicators meeting or exceeding industry standards[64] - "China Glass Blue" high-performance, long-life Low-E energy-saving glass, based on spectral selective coating technology, was selected as a demonstration case for "increasing varieties, improving quality, and creating brands" by the industry association[64] Performance Assessment and Cultural Development The Company continuously improved its performance assessment mechanism, establishing a 'monthly tracking + dynamic adjustment' system, deepening the link between performance and compensation, and fostering employee cohesion and team vitality through cultural activities - The Company continuously improved its performance assessment mechanism, establishing a "monthly tracking + dynamic adjustment" system, achieving full alignment of assessment targets with strategy across all levels, and deepening the link between performance and remuneration[65] - Through activities such as "Enterprise Craftsman Selection," the 20th-anniversary celebration, and employee sports events, the Company fostered employee cohesion, enhancing team vitality and sense of belonging[65] Compliance Management and Brand Building The Company comprehensively strengthened compliance management, enhancing legal literacy, standardizing audits, and improving legal risk control; on the brand and market front, it refined capital market monitoring, enhanced brand exposure, and achieved the highest 'A+' ESG rating, significantly boosting market recognition - The Company comprehensively strengthened compliance management, enhancing legal literacy among cadres, standardizing economic responsibility audits, and improving the legal risk prevention and control system[66] - The Company refined its capital market monitoring system, enhanced brand exposure, and achieved the highest "A+" ESG rating in the building materials industry, significantly boosting market recognition[66] Outlook In H2 2025, global economic growth is expected to slow, with China's real estate and photovoltaic markets adjusting; the flat glass industry will optimize supply-demand and upgrade towards 'low-carbon and intelligent' production, while demand for automotive, energy-saving, and concentrated solar power glass will grow, and raw material prices are expected to decline or stabilize, with the company's H2 plan focusing on debt restructuring, overseas strategy, technological upgrades, and the 'three major campaigns' - In H2 2025, global economic growth is expected to slow further due to US trade barriers, and China's real estate and photovoltaic power generation markets are entering a period of deep adjustment[67] - The flat glass industry will continue to optimize its supply-demand structure, eliminate outdated capacity, and strategically upgrade towards "low-carbon and intelligent" production[67] - Market demand for automotive glass, energy-saving architectural glass, and conductive glass in niche segments will continue its boom cycle, while the rapid development of concentrated solar power will lead to significant growth in the high-performance concentrated solar power glass market[68][69] - Soda ash and various mineral raw material markets are expected to enter a weak phase, with prices continuing to decline or remain stable with slight decreases; natural gas prices are expected to maintain mid-year levels, and petroleum coke prices are trending downwards[70][71] Market Prospects In H2 2025, global economic growth is expected to slow, with China's real estate and photovoltaic markets adjusting; the flat glass industry will optimize supply-demand and upgrade towards 'low-carbon and intelligent' production, while demand for automotive, energy-saving, and concentrated solar power glass will grow - Global economic growth is expected to slow further due to US trade barriers, and China's real estate and photovoltaic power generation markets are entering a period of deep adjustment[67] - The flat glass industry will continue to optimize its supply-demand structure, eliminate outdated capacity, and strategically upgrade towards "low-carbon and intelligent" production[67] - Market demand for automotive glass, energy-saving architectural glass, and conductive glass in niche segments will continue its boom cycle[68] - The rapid development of concentrated solar power will lead to significant growth in the high-performance concentrated solar power glass market[69] Raw Material, Fuel Prices and Manufacturing Cost Forecast In H2 2025, soda ash and mineral raw material markets are expected to weaken, with prices declining or stabilizing; fuel market fluctuations will be limited, with natural gas prices maintaining mid-year levels and petroleum coke prices trending downwards - Soda ash and various mineral raw material markets are expected to enter a weak phase, with prices continuing to decline or remain stable with slight decreases[70] - The natural gas market is trending towards looser supply, with prices expected to maintain mid-year fluctuation levels[71] - The petroleum coke market is seeing increased supply and weak demand, with prices expected to trend downwards[71] Work Plan for H2 2025 The Company's H2 work plan focuses on four areas: coordinating debt restructuring, deepening the 'going global' strategy, driving product structure transformation through technological upgrades, and continuing the 'three major campaigns' to optimize resource allocation - The Company's H2 work plan focuses on four aspects: coordinating the debt restructuring plan to ensure debt repayment and going concern, resolutely deepening the "going global" development strategy to enhance overseas subsidiaries' performance contribution, driving product structure transformation through technological upgrades to improve domestic base operating performance, and continuously advancing the "three major campaigns" to optimize the resource allocation system[72][73][74][75] Advancing Debt Restructuring Plan Facing the risk of large debts not being repaid on time, the Company is actively seeking professional advice and negotiating with stakeholders to explore solutions for resolving, extending, or restructuring borrowings, while also developing contingency plans to ensure debt repayment and going concern - The Company is actively seeking professional advice, negotiating with financial advisors and potential financiers to raise funds, and exploring various solutions to resolve, extend, or restructure borrowings[72] - Contingency plans are being developed, including cost reduction, efficiency improvement, production line transformation, and product structure adjustment, to ensure debt repayment capability and going concern[72] Deepening the “Going Global” Development Strategy Overseas production bases will enhance production-sales synergy through high-value-added product transformation, optimized warehousing, multi-level customer systems, and strengthened cost control, while leveraging the Italy Company's technology platform to expand into new energy glass and flat glass engineering, and orderly advancing the Egypt project - Overseas production bases will focus on safe operations, systematically enhancing production-sales synergy through high-value-added product transformation, optimized warehousing networks, multi-level customer systems, and strengthened cost control[73] - Leveraging the Italy Company's technology platform, the Company will expand into new energy glass and flat glass engineering, and orderly advance the Egypt project[73] Technology Upgrades Driving Product Structure Transformation The Company will continuously improve its production technology system, focusing on glass products for new energy and home appliance cold chain applications, advancing the technical development of multi-functional ultra-clear float glass and high-quality automotive glass, and orderly completing the technological upgrade of concentrated solar power glass production lines, promoting product structure adjustment towards differentiation and high-end - The Company will continuously improve its production technology system, focusing on glass products for new energy, home appliance cold chain, and other application areas[74] - Technical development of multi-functional ultra-clear float glass and high-quality automotive glass will be advanced, and technological upgrades of concentrated solar power glass production lines will be completed in an orderly manner, promoting product structure adjustment towards differentiation and high-end[74] Continued Advancement of “Three Major Campaigns” The Company will further enhance asset operating efficiency through systematic asset revitalization; implement cost reduction and efficiency improvement measures based on a refined management system, building a full-process control mechanism; strengthen company-wide cost awareness, and establish a dynamic allocation mechanism that prioritizes resources towards core business areas - Through systematic asset revitalization, the Company will further enhance asset operating efficiency[75] - Cost reduction and efficiency improvement measures will be implemented based on a refined management system, building a full-process control mechanism; company-wide cost awareness will be strengthened, and a dynamic allocation mechanism that prioritizes resources towards core business areas will be established, achieving efficient synergy and value maximization of resource elements[75] Financial Review In H1 2025, revenue decreased by 20%, gross profit by 40%, and period loss significantly increased by 133% to RMB318,743 thousand, driven by declining sales, average selling prices, and macro-economic uncertainties; current and non-current assets and liabilities all decreased, with a liquidity ratio of 0.31, debt-to-asset ratio of 0.95, and expanded net current liabilities, further impacted by significant post-period loan defaults and cross-defaults - In H1 2025, revenue was RMB2,153,490 thousand, a year-on-year decrease of approximately 20%, primarily due to the combined effect of reduced sales volume and average selling price[76] - The loss for the period was RMB318,743 thousand, a significant increase of 133% from the prior year's loss of RMB136,888 thousand, primarily due to the downturn in China's real estate sector, supply-demand mismatch in the photovoltaic industry, and macro-economic uncertainties[86] - Current assets decreased by 14%, non-current assets by 2%, current liabilities by 1%, and non-current liabilities by 12%[87][88][89][90] - The current ratio was 0.31, the debt-to-asset ratio was 0.95, and net current liabilities expanded to RMB7,179,129 thousand[93] - Subsequent to the reporting period, loan defaults of RMB1,295,854 thousand occurred, triggering cross-default clauses on approximately RMB6,711,453 thousand of other borrowings[92][97] Revenue In H1 2025, main business revenue decreased by 20% to RMB2,153,490 thousand, primarily due to reduced sales volume and average selling price; colorless and energy-saving glass revenue significantly declined, while colored and coated glass sales increased, and overseas glass product sales rose by 14% - In H1 2025, main business revenue was RMB2,153,490 thousand, a year-on-year decrease of 20%, primarily due to reduced sales volume and average selling price[76] Revenue by Product Segment (For the six months ended June 30) | Product Segment | 2025 (RMB'000) | % of Total | 2024 (RMB'000) | % of Total | Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Colorless glass | 732,652 | 34% | 1,153,320 | 43% | (36%) | | Colored glass | 405,459 | 19% | 374,406 | 14% | 8% | | Coated glass | 434,206 | 20% | 430,096 | 16% | 1% | | Energy-saving and new energy glass | 417,330 | 19% | 544,013 | 20% | (23%) | | Design and installation related services | 163,843 | 8% | 181,661 | 7% | (10%) | | Total | 2,153,490 | 100% | 2,683,496 | 100% | (20%) | - Revenue from colorless glass and energy-saving and new energy glass decreased by 36% and 23% respectively, primarily due to reduced sales volume and average selling price[78] - Sales volume of colored glass and coated glass increased by 46% and 17% respectively, and overseas glass product sales increased by 14%[79] - The average selling price of glass products decreased by approximately 20%, mainly due to declining prices in the domestic market, although the average selling price overseas increased[80] Cost of Sales Cost of sales decreased by 18% to RMB1,990,741 thousand in H1 2025, primarily due to a reduction in the unit cost of glass products sold - In H1 2025, cost of sales was RMB1,990,741 thousand, a year-on-year decrease of 18%, primarily due to a reduction in the unit cost of glass products sold[81] Gross Profit Gross profit decreased by 40% to RMB162,749 thousand in H1 2025, primarily due to a decline in the average selling price of glass products in Mainland China - In H1 2025, gross profit was RMB162,749 thousand, a year-on-year decrease of 40%, primarily due to a decline in the average selling price of glass products in Mainland China[82] Administrative Expenses Administrative expenses slightly decreased to RMB177,038 thousand in H1 2025 compared to the prior year - In H1 2025, administrative expenses were RMB177,038 thousand, a slight decrease compared to the prior year[83] Finance Costs Finance costs slightly increased by approximately 1% to RMB231,089 thousand in H1 2025 compared to the prior year - In H1 2025, finance costs were RMB231,089 thousand, a slight increase of approximately 1% compared to the prior year[84] Income Tax Income tax expense was RMB28,301 thousand in H1 2025, compared to an income tax credit in the prior year, primarily due to the consideration from the disposal of property, plant, and equipment - In H1 2025, income tax expense was RMB28,301 thousand, compared to an income tax credit of RMB12,984 thousand in the prior year[85] - The income tax expense is primarily due to the consideration arising from the disposal of property, plant and equipment and right-of-use assets[85] Loss for the Period The Group recorded a loss of RMB318,743 thousand in H1 2025, a significant increase of 133% from the prior year, primarily due to the downturn in China's real estate sector, supply-demand mismatch in the photovoltaic industry, and macro-economic uncertainties - In H1 2025, the Group recorded a loss of RMB318,743 thousand, a significant increase of 133% from the prior year's loss of RMB136,888 thousand[86] - The increased loss is primarily due to the downturn in China's real estate sector, supply-demand mismatch in the photovoltaic industry, and macro-economic uncertainties[86] Current Assets Current assets decreased by 14% to RMB3,234,569 thousand as of June 30, 2025, primarily due to reductions in cash, assets held for sale, and inventories - Current assets decreased by 14% to RMB3,234,569 thousand, primarily due to reductions in cash, assets held for sale, and inventories[87] Non-current Assets Non-current assets decreased by 2% to RMB10,241,865 thousand as of June 30, 2025, primarily due to a reduction in property, plant, and equipment - Non-current assets decreased by 2% to RMB10,241,865 thousand, primarily due to a reduction in property, plant and equipment[88] Current Liabilities Current liabilities slightly decreased by 1% to RMB10,413,698 thousand as of June 30, 2025, primarily due to a reduction in short-term bank and other borrowings - Current liabilities slightly decreased by 1% to RMB10,413,698 thousand, primarily due to a reduction in short-term bank loans and other borrowings[89] Non-current Liabilities Non-current liabilities decreased by 12% to RMB2,437,671 thousand as of June 30, 2025, primarily due to a reduction in long-term bank and other borrowings - Non-current liabilities decreased by 12% to RMB2,437,671 thousand, primarily due to a reduction in long-term bank loans and other borrowings[90] Capital Structure, Liquidity, Financial Resources and Gearing Ratio As of June 30, 2025, the Group had cash of RMB1,017,474 thousand and outstanding borrowings of RMB9,321,088 thousand, with a debt-to-equity ratio of 0.7, current ratio of 0.31, and debt-to-asset ratio of 0.95; net current liabilities expanded to RMB7,179,129 thousand, and post-period cross-default clauses were triggered on RMB1,760,409 thousand of borrowings - As of June 30, 2025, cash and bank balances were RMB1,017,474 thousand, with 70% denominated in RMB[91] - Outstanding bank loans and other borrowings amounted to RMB9,321,088 thousand, of which 76% are due within one year[92] - Subsequent to the reporting period, cross-default clauses were triggered on RMB1,760,409 thousand of borrowings originally due after one year, making them immediately repayable[92] Key Financial Ratios (As of June 30) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Debt-to-equity ratio | 0.7 | 0.7 | | Current ratio | 0.31 | 0.36 | | Net current liabilities (RMB'000) | 7,179,129 | 6,800,076 | | Debt-to-asset ratio | 0.95 | 0.94 | Foreign Exchange Fluctuation Risk and Related Hedging The Group's transactions and monetary assets are primarily denominated in RMB, Naira, Tenge, USD, and Euro; RMB exchange rate fluctuations may impact net assets, profit or loss, and dividends, and no derivative instruments were purchased for hedging in H1 2025 - The Group's transactions and monetary assets are primarily denominated in RMB, Naira, Tenge, USD, and Euro[94] - Fluctuations in the RMB exchange rate against other currencies may impact the Group's net assets, profit or loss, and dividends[94] - For the six months ended June 30, 2025, the Group did not purchase any derivative instruments for hedging[94] Contingent Liabilities Details of contingent liabilities are disclosed in Note 14 to the unaudited interim financial information - Details of contingent liabilities are disclosed in Note 14 to the unaudited interim financial information[95] Material Acquisitions and Disposals, Material Investments and Future Plans for Material Investments or Acquisitions of Capital Assets The Group had no material investments or acquisitions of capital assets, nor any material acquisitions or disposals of subsidiaries and associates in H1 2025 - For the six months ended June 30, 2025, the Group had no material investments or acquisitions of capital assets, nor any material acquisitions or disposals of subsidiaries and associates[96] Material Events After the Reporting Period Details of material events affecting the Group after the reporting period are disclosed in Note 15 to the unaudited interim financial information - Details of material events significantly affecting the Group after the reporting period are disclosed in Note 15 to the unaudited interim financial information[97] Other Information This section covers human resources, interim dividend policy, share option and award schemes, securities transactions, public float, audit committee review, auditor's report extract, investor relations, and compliance with corporate governance codes Human Resources and Employee Remuneration The Group's total employees decreased to approximately 3,908 as of June 30, 2025, primarily due to the phased elimination of less profitable production lines in Mainland China, with the Company ensuring employee rights and competitive remuneration - As of June 30, 2025, the Group had approximately 3,908 employees, a decrease of approximately 14.8% compared to December 31, 2024[98] - The reduction in employee numbers is primarily due to the phased elimination of less profitable production lines in Mainland China, with the Company firmly safeguarding employee rights during the downsizing process[98] - The Group ensures competitive employee remuneration and rewards employees based on relevant performance benchmarks and market conditions[99] Interim Dividend The Board has resolved not to declare an interim dividend for the six months ended June 30, 2025 - The Board has resolved not to declare an interim dividend for the six months ended June 30, 2025[100] Share Option Scheme The Company adopted a share option scheme in 2016 to incentivize eligible participants, but since its adoption, no share options have been granted, exercised, cancelled, or lapsed - The Company adopted a share option scheme in 2016 to incentivize eligible participants[101] - Since its adoption date, no share options have been granted, exercised, cancelled, or lapsed under the share option scheme[101] Share Award Scheme The Company adopted a share award scheme in 2011 to recognize and retain employees, managed by a trustee, with a total award limit of 10% of issued share capital and 2% for a single employee, extended until December 12, 2031, and no shares were granted or vested to directors and employees in H1 2025 - The Company adopted a share award scheme in 2011 to recognize and retain employees, which is managed by a trust[102][104] - The total nominal value of awarded shares is capped at 10% of the issued share capital, with a limit of 2% for any single selected employee[105] - The share award scheme was extended for 10 years in 2021, expiring on December 12, 2031[107] - For the six months ended June 30, 2025, no shares were granted or vested to directors and employees under the scheme[107] Purchase, Sale or Redemption of the Company's Listed Securities Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities in H1 2025 - 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[108] Sufficient Public Float The Company maintained a public float of not less than 25% as required by HKEX Listing Rules for H1 2025 and up to the latest practicable date - The Company has maintained a public float of not less than 25% as required by the Hong Kong Stock Exchange Listing Rules[109] Audit Committee The Audit Committee, with management and KPMG, reviewed the Group's accounting principles, operations, risk management, internal controls, and financial reporting, including the unaudited interim results for H1 2025 - The Company's Audit Committee, together with management and external auditor KPMG, reviewed the Group's accounting principles, operations, risk management, internal controls, and financial reporting matters, including the unaudited interim results for the six months ended June 30, 2025[110] Extract of Review Report on Interim Financial Report KPMG noted that the Group's net loss, net current liabilities, and post-period loan defaults and cross-defaults for H1 2025 indicate a material uncertainty that may cast significant doubt on the Group's ability to continue as a going concern, with no modification to the auditor's review conclusion - The auditor noted that the Group's net loss of RMB318,743 thousand, net current liabilities of RMB7,179,129 thousand, and post-period loan defaults and cross-default events indicate a material uncertainty that may cast significant doubt on the Group's ability to continue as a going concern[111] - The auditor's review conclusion on this going concern matter was not modified[111] Investor Relations and Communication The Company actively promotes investor relations and communication through regular meetings with institutional investors and financial analysts to ensure two-way communication regarding the Group's performance and development - The Company actively promotes investor relations and communication through regular meetings with institutional investors and financial analysts to ensure two-way communication regarding the Group's performance and development[112] Compliance with Corporate Governance Code The Company applied the principles and complied with the applicable code provisions of the Corporate Governance Code as set out in Appendix C1 of the Listing Rules for H1 2025 - For the six months ended June 30, 2025, the Company applied the principles and complied with the applicable code provisions of the Corporate Governance Code as set out in Appendix C1 of the Listing Rules[113] Compliance with Model Code for Securities Transactions by Directors The Company adopted the Model Code for Securities Transactions by Directors of Listed Issuers as its code of conduct, and all directors confirmed compliance throughout the period - The Company adopted the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 of the Listing Rules as its code of conduct for directors' securities transactions, and all directors confirmed compliance throughout the period[114] Publication of Interim Results Announcement and Interim Report This interim results announcement has been published on the websites