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达力环保(01790) - 2025 - 中期业绩
TIL ENVIROTIL ENVIRO(HK:01790)2025-08-28 08:32

Financial Summary This section provides an unaudited financial overview for the six months ended June 30, 2025, highlighting key performance indicators Unaudited Financial Summary for the Six Months Ended June 30, 2025 | Indicator | June 30, 2025 (HK$ thousand) | June 30, 2024 (HK$ thousand) | Change (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | 105,200 | 111,700 | (6,500) | -5.8% | | Gross Profit | 80,000 | 82,700 | (2,700) | -3.3% | | Profit | 50,600 | 49,900 | 700 | 1.4% | Condensed Consolidated Financial Statements This section presents the Group's condensed consolidated financial statements, including the statement of profit or loss, comprehensive income, and financial position Condensed Consolidated Statement of Profit or Loss For the six months ended June 30, 2025, the company's revenue decreased by 5.8% to HK$105.2 million, yet profit for the period increased by 1.4% to HK$50.6 million due to lower finance costs and income tax expense, with basic and diluted earnings per share remaining at HK$0.05 Key Data from Condensed Consolidated Statement of Profit or Loss (Six Months Ended June 30) | Indicator | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | 105,236 | 111,671 | (6,435) | -5.8% | | Cost of sales | (25,264) | (28,964) | 3,700 | -12.8% | | Gross profit | 79,972 | 82,707 | (2,735) | -3.3% | | Other income | 1,193 | 915 | 278 | 30.4% | | Net other losses | (1,742) | (259) | (1,483) | 466.7% | | General and administrative expenses | (5,953) | (6,404) | 451 | -7.0% | | Operating profit | 73,470 | 76,959 | (3,489) | -4.5% | | Finance costs | (11,543) | (14,643) | 3,100 | -21.2% | | Profit before income tax | 61,927 | 62,316 | (389) | -0.6% | | Income tax expense | (11,369) | (12,397) | 1,028 | -8.3% | | Profit for the period | 50,558 | 49,919 | 639 | 1.3% | | Basic and diluted earnings per share (HK$) | 0.05 | 0.05 | 0.00 | 0.0% | Condensed Consolidated Statement of Comprehensive Income For the six months ended June 30, 2025, profit for the period was HK$50.6 million, and total comprehensive income for the period significantly increased to HK$92.7 million from HK$17.4 million in the prior year, driven by a favorable shift in currency translation differences Key Data from Condensed Consolidated Statement of Comprehensive Income (Six Months Ended June 30) | Indicator | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (HK$ thousand) | | :--- | :--- | :--- | :--- | | Profit for the period | 50,558 | 49,919 | 639 | | Exchange differences on translation | 42,098 | (32,479) | 74,577 | | Total comprehensive income for the period | 92,656 | 17,440 | 75,216 | Condensed Consolidated Statement of Financial Position As of June 30, 2025, total assets increased by approximately 3.6% to HK$2,227.7 million compared to December 31, 2024, with total equity growing by approximately 6.7% to HK$1,472.2 million while total liabilities slightly decreased, leading to increases in both net current assets and net assets Key Data from Condensed Consolidated Statement of Financial Position (As of June 30) | Indicator | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | ASSETS | | | | | | Non-current assets | 1,232,641 | 1,232,065 | 576 | 0.05% | | Current assets | 995,085 | 917,529 | 77,556 | 8.45% | | TOTAL ASSETS | 2,227,726 | 2,149,594 | 78,132 | 3.63% | | EQUITY | | | | | | Total equity | 1,472,174 | 1,379,518 | 92,656 | 6.72% | | LIABILITIES | | | | | | Non-current liabilities | 489,311 | 500,874 | (11,563) | -2.31% | | Current liabilities | 266,241 | 269,202 | (2,961) | -1.10% | | TOTAL LIABILITIES | 755,552 | 770,076 | (14,524) | -1.89% | | Net current assets | 728,844 | 648,327 | 80,517 | 12.42% | | Total assets less current liabilities | 1,961,485 | 1,880,392 | 81,093 | 4.31% | Notes to the Condensed Consolidated Interim Financial Information This section provides detailed notes to the condensed consolidated interim financial information, covering accounting policies, segment reporting, and specific financial statement items Basis of Preparation The Group's condensed consolidated interim financial information is prepared in accordance with the Listing Rules of The Stock Exchange of Hong Kong Limited and HKAS 34 'Interim Financial Reporting' issued by the HKICPA, adopting a going concern basis with sufficient working capital for the next 12 months - The interim financial information is prepared in accordance with the Hong Kong Listing Rules and HKAS 34, and should be read in conjunction with the 2024 financial statements9 - The Board confirms the Group has sufficient working capital to meet its financial obligations for the next 12 months, and the financial information is prepared on a going concern basis10 Application of New and Revised Hong Kong Financial Reporting Standards The Group adopted HKAS 21 and HKFRS 1 (Amendments) 'Lack of Exchangeability' during the period, with no significant impact on performance or financial position, while several new standards and amendments effective in 2026 and 2027 are currently being assessed for their potential impact - Amendments to standards adopted in the current period, such as HKAS 21 and HKFRS 1 'Lack of Exchangeability', have no significant impact on the Group's performance or financial position11 New and Revised Standards Not Yet Effective | Standard Name | Content | Effective Date | | :--- | :--- | :--- | | HKFRS 9 and HKFRS 7 (Amendments) | Classification and Measurement of Financial Instruments | January 1, 2026 | | Annual Improvements to HKFRSs — Volume 11 | Various standard improvements | January 1, 2026 | | HKFRS 9 and HKFRS 7 (Amendments) | Contracts that Rely on Natural Energy Production for Electricity | January 1, 2026 | | HKFRS 18 | Presentation and Disclosure in Financial Statements | January 1, 2027 | | HKFRS 19 | Disclosure for Non-Publicly Accountable Subsidiaries | January 1, 2027 | | HK Interpretation 5 | Classification by a Borrower of a Term Loan that Contains a Repayment on Demand Clause | January 1, 2027 | | HKFRS 10 and HKAS 28 (Amendments) | Sale or Contribution of Assets between an Investor and its Associate or Joint Venture | To be determined | Revenue and Segment Information The Group operates as a single segment, providing wastewater treatment services in China, with all revenue and non-current assets located within the country, generating HK$49.1 million from wastewater treatment operations and HK$56.1 million from service concession finance income as of June 30, 2025 - The Group is considered a single operating segment, primarily providing wastewater treatment services in China1415 Revenue Sources (Six Months Ended June 30) | Revenue Category | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Wastewater treatment operation services | 49,100 | 53,495 | | Service concession arrangement finance income | 56,136 | 58,176 | | TOTAL REVENUE | 105,236 | 111,671 | - All revenue is derived from customers in China, and all non-current assets are located in China19 - Customer A accounts for 100% of the Group's total revenue18 Other Income For the six months ended June 30, 2025, other income increased to HK$1.2 million, primarily due to higher interest income Other Income Details (Six Months Ended June 30) | Category | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Interest income | 781 | 616 | | Others | 412 | 299 | | TOTAL | 1,193 | 915 | Income Tax Expense For the six months ended June 30, 2025, income tax expense was HK$11.4 million, an 8.1% decrease from the prior year, primarily comprising current and deferred income tax Income Tax Expense Details (Six Months Ended June 30) | Category | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Current income tax | 6,245 | 8,777 | | Deferred income tax | 5,124 | 3,620 | | TOTAL | 11,369 | 12,397 | Earnings Per Share For the six months ended June 30, 2025, both basic and diluted earnings per share remained at HK$0.05, consistent with the prior year, as there were no potential dilutive ordinary shares issued Earnings Per Share (Six Months Ended June 30) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Profit attributable to ordinary equity holders of the Company (HK$ thousand) | 50,558 | 49,919 | | Weighted average number of ordinary shares in issue (thousand shares) | 1,000,000 | 1,000,000 | | Basic earnings per share (HK$) | 0.05 | 0.05 | | Diluted earnings per share (HK$) | 0.05 | 0.05 | Dividends For the six months ended June 30, 2025, the Company neither paid nor declared any dividends - The Company neither paid nor declared dividends during the reporting period25 Receivables under Service Concession Arrangements As of June 30, 2025, total receivables under service concession arrangements increased to HK$1,711.9 million, an approximate 3.1% increase from December 31, 2024, primarily due to the appreciation of RMB against HKD Receivables under Service Concession Arrangements (As of June 30) | Category | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Current | 489,360 | 439,135 | | Non-current | 1,222,497 | 1,221,653 | | TOTAL | 1,711,857 | 1,660,788 | - The total amount of receivables increased by approximately HK$48.1 million or 2.9%, primarily attributable to the appreciation of RMB against HKD50 Trade and Other Receivables As of June 30, 2025, trade and other receivables increased to HK$411.6 million, a 19.8% rise from December 31, 2024, primarily due to an increase in trade receivables, with those over 365 days increasing due to delayed settlement by the Yinchuan Municipal Urban Management Bureau Trade and Other Receivables (As of June 30) | Category | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Trade receivables | 394,221 | 326,658 | | Other receivables | 16,889 | 16,209 | | Prepayments | 440 | 607 | | TOTAL | 411,550 | 343,474 | Ageing Analysis of Trade Receivables (As of June 30) | Ageing | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | 0–30 days | 19,417 | 16,240 | | 31–60 days | 21,136 | 17,302 | | 61–90 days | 19,759 | 17,999 | | 91–180 days | 48,247 | 57,780 | | 181–365 days | 112,567 | 102,373 | | Over 365 days | 173,095 | 114,964 | | TOTAL | 394,221 | 326,658 | - Trade receivables over 365 days increased, primarily due to delayed settlement procedures by the Yinchuan Municipal Urban Management Bureau27 Borrowings As of June 30, 2025, the Group's total borrowings decreased by 3.4% to HK$601.1 million from December 31, 2024, primarily due to repayment of long-term loans, with all borrowings secured by contractual rights to Group revenue and land use rights Borrowings Details (As of June 30) | Category | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Non-current portion of long-term borrowings | 364,667 | 384,742 | | Current portion of long-term borrowings | 218,253 | 218,950 | | Short-term borrowings | 18,190 | 18,411 | | TOTAL | 601,110 | 622,103 | - Borrowings decreased by approximately HK$21.0 million or 3.4%, primarily due to the repayment of long-term loans of approximately HK$38.7 million5354 - Borrowings are secured by contractual rights to revenue generated by the Group and land use rights where the wastewater treatment plants are located28 Trade and Other Payables As of June 30, 2025, total trade and other payables slightly decreased to HK$27.6 million from December 31, 2024, with a significant portion of trade payables aged over 90 days Trade and Other Payables (As of June 30) | Category | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Trade payables | 16,278 | 17,933 | | Retention payables | 469 | 489 | | Other payables and accrued expenses | 10,861 | 9,732 | | TOTAL | 27,608 | 28,154 | Ageing Analysis of Trade Payables (As of June 30) | Ageing | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | 0–30 days | 723 | 915 | | 31–60 days | 574 | 679 | | 61–90 days | 657 | 737 | | Over 90 days | 15,979 | 13,947 | | TOTAL | 17,933 | 16,278 | Management Discussion and Analysis This section provides a comprehensive overview of the Group's business operations, strategic outlook, and detailed financial performance review for the reporting period Business Review The Group operates and manages three wastewater treatment facilities in Yinchuan, Ningxia, China, providing services under a 30-year Transfer-Operate-Transfer (TOT) model, with a total daily treatment capacity of 375,000 cubic meters as of June 30, 2025, and processed approximately 37.8 million cubic meters during the period, a 0.5% decrease due to lower inflow, while strictly adhering to discharge standards without significant quality issues - The Group operates and manages three wastewater treatment facilities in Yinchuan, Ningxia, China, providing services under a 30-year Transfer-Operate-Transfer (TOT) model30 - As of June 30, 2025, the total daily wastewater treatment capacity is 375,000 cubic meters, with discharge standards meeting Class I-A and quasi-Class IV water standards30 - During the reporting period, the total volume of wastewater treated was approximately 37.8 million cubic meters, a decrease of approximately 0.5% compared to the same period last year, primarily due to generally lower wastewater inflow31 - The Group strictly adheres to national policy discharge standards and has not encountered any significant quality issues or interruptions31 - Revenue for the reporting period was approximately HK$105.2 million, with profit after tax of approximately HK$50.6 million, showing an increase in profit despite a decrease in revenue31 Development Strategies and Prospects China's economy showed resilient growth in H1 2025 but is projected to slow to 4.5% for the full year, impacted by US tariffs, a weak labor market, and a sluggish property sector, with the Group focusing on new water tariff finalization, expansion and upgrade projects, compensation agreements, operational excellence, and exploring M&A opportunities - China's economy showed resilience in H1 2025, but full-year growth is projected to slow to approximately 4.5%, impacted by US tariffs, a weak labor market, and a sluggish property sector, with the central government expected to provide additional fiscal support34 - In the second half of the year, the Group will focus on finalizing new water tariffs and the finalization of Phase I of the Second Treatment Plant, Phase I (upgrade project) of the Fourth Treatment Plant, and Phase II (expansion project) of the Fourth Treatment Plant34 - The Group will continue to finalize the compensation agreement with the Yinchuan Municipal Government regarding the closure of the First Treatment Plant35 - Operationally, the Group will continue to ensure robust operations, stable compliance with discharge standards, cost optimization, and enhanced management efficiency35 - The Group will explore potential merger and acquisition opportunities for wastewater treatment assets in Yinchuan, Ningxia, and other regions in China to expand its footprint35 Financial Review This section provides a detailed review of the reporting period's financial performance, highlighting a 5.8% revenue decrease, a 1.4% profit increase, and improved liquidity and capital resources, alongside changes in key income statement and balance sheet items Revenue Total revenue decreased by 5.8% from HK$111.7 million to HK$105.2 million, with wastewater treatment operation services revenue declining by 8.2% due to reduced operating costs, and service concession arrangement finance income decreasing by 3.6% primarily from a lower opening balance of receivables Revenue Composition and Changes (Six Months Ended June 30) | Revenue Category | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Wastewater treatment operation services | 49,100 | 53,500 | (4,400) | -8.2% | | Service concession arrangement finance income | 56,100 | 58,200 | (2,100) | -3.6% | | TOTAL REVENUE | 105,200 | 111,700 | (6,500) | -5.8% | - The decrease in wastewater treatment operation services revenue is primarily attributable to reduced wastewater treatment operating costs, particularly chemical costs, leading to lower revenue recognized based on actual costs and a reasonable profit margin37 - The decrease in service concession arrangement finance income is primarily due to a lower opening balance of receivables under service concession arrangements37 Cost of Sales Cost of sales decreased by 12.8% from HK$29.0 million to HK$25.3 million, with wastewater treatment operating costs falling by 18.0% due to lower chemical costs, and other cost of sales decreasing by 1.1% primarily from reduced repair and maintenance expenses Cost of Sales Composition and Changes (Six Months Ended June 30) | Cost of Sales Category | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Wastewater treatment operating costs | 16,400 | 20,000 | (3,600) | -18.0% | | Other cost of sales | 8,900 | 9,000 | (100) | -1.1% | | TOTAL COST OF SALES | 25,300 | 29,000 | (3,700) | -12.8% | - Wastewater treatment operating costs decreased primarily due to a reduction in chemical costs of approximately HK$2.0 million39 - Other cost of sales decreased primarily due to a reduction in repair and maintenance costs of approximately HK$0.5 million40 Gross Profit and Gross Profit Margin Gross profit decreased by 3.3% from HK$82.7 million to HK$80.0 million, primarily due to reduced revenue from wastewater treatment operation services, while the gross profit margin increased from 74.1% to 76.0% Gross Profit and Gross Profit Margin Changes (Six Months Ended June 30) | Indicator | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Gross Profit | 80,000 | 82,700 | (2,700) | -3.3% | | Gross Profit Margin | 76.0% | 74.1% | 1.9% | - | - The decrease in gross profit is primarily due to reduced revenue generated from wastewater treatment operation services41 Other Income Other income increased by 33.3% from HK$0.9 million to HK$1.2 million, primarily due to higher interest income resulting from increased cash and bank balances Other Income Changes (Six Months Ended June 30) | Indicator | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Other Income | 1,200 | 900 | 300 | 33.3% | - The increase in other income is primarily due to higher interest income of approximately HK$0.2 million resulting from increased cash and bank balances42 Net Other Losses Net other losses significantly increased by 466.7% from HK$0.3 million to HK$1.7 million, primarily due to a court-ordered payment of approximately HK$1.6 million to a contractor Net Other Losses Changes (Six Months Ended June 30) | Indicator | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Net Other Losses | 1,700 | 300 | 1,400 | 466.7% | - The increase in net other losses is primarily due to a court-ordered payment of approximately HK$1.6 million to a contractor43 General and Administrative Expenses General and administrative expenses decreased by 6.3% from HK$6.4 million to HK$6.0 million, primarily due to reduced staff welfare expenses General and Administrative Expenses Changes (Six Months Ended June 30) | Indicator | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | General and Administrative Expenses | 6,000 | 6,400 | (400) | -6.3% | - The decrease in general and administrative expenses is primarily due to a reduction in staff welfare expenses of approximately HK$0.3 million44 Finance Costs Finance costs decreased by 21.2% from HK$14.6 million to HK$11.5 million, primarily due to a reduction in the People's Bank of China's 5-year Loan Prime Rate and the repayment of approximately HK$48.4 million in bank borrowings Finance Costs Changes (Six Months Ended June 30) | Indicator | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Finance Costs | 11,500 | 14,600 | (3,100) | -21.2% | - The decrease in finance costs is primarily due to a reduction in the People's Bank of China's 5-year Loan Prime Rate and the repayment of approximately HK$48.4 million in bank borrowings45 Income Tax Expense Income tax expense decreased by 8.1% from HK$12.4 million to HK$11.4 million, with the effective tax rate falling from 19.9% to 18.4%, primarily benefiting from the extension of China's environmental industry tax incentive policy, reducing the corporate income tax rate from 25.0% to 15.0% until 2027 Income Tax Expense and Effective Tax Rate Changes (Six Months Ended June 30) | Indicator | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Income Tax Expense | 11,400 | 12,400 | (1,000) | -8.1% | | Effective Tax Rate | 18.4% | 19.9% | -1.5% | - | - The decrease in the effective tax rate is primarily due to the extension of China's environmental industry tax incentive policy by the Chinese tax authorities, reducing the corporate income tax rate from 25.0% to 15.0% until 202746 Profit for the Period and Total Comprehensive Income Profit for the period increased by 1.4% from HK$49.9 million to HK$50.6 million, while total comprehensive income significantly rose from HK$17.4 million to HK$92.7 million, primarily due to currency translation differences arising from the appreciation of RMB against HKD Profit for the Period and Total Comprehensive Income Changes (Six Months Ended June 30) | Indicator | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Profit for the Period | 50,600 | 49,900 | 700 | 1.4% | | Total Comprehensive Income | 92,700 | 17,400 | 75,300 | 432.8% | - The significant increase in total comprehensive income is primarily due to currency translation differences arising from the appreciation of RMB (functional currency) against HKD (reporting currency)47 Earnings Per Share Basic and diluted earnings per share attributable to owners of the Company remained at HK$0.05 per share - Basic and diluted earnings per share remained at HK$0.05 per share, consistent with the prior year48 Receivables under Service Concession Arrangements Total receivables under service concession arrangements increased by 2.9% from HK$1,660.8 million to HK$1,708.9 million, primarily due to the appreciation of RMB against HKD Changes in Receivables under Service Concession Arrangements | Indicator | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Current portion | 486,400 | 439,100 | 47,300 | 10.8% | | Non-current portion | 1,222,500 | 1,221,700 | 800 | 0.1% | | TOTAL | 1,708,900 | 1,660,800 | 48,100 | 2.9% | - The increase in total receivables is primarily due to the appreciation of RMB against HKD50 Trade and Other Receivables Trade and other receivables increased by 19.8% from HK$343.5 million to HK$411.6 million, primarily due to an increase in trade receivables Changes in Trade and Other Receivables | Indicator | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Trade and Other Receivables | 411,600 | 343,500 | 68,100 | 19.8% | - The increase is primarily due to a rise in trade receivables of approximately HK$67.6 million51 Cash and Bank Balances Cash and bank balances decreased by 28.2% from HK$133.6 million to HK$95.9 million, primarily due to the repayment of approximately HK$48.4 million in bank borrowings Changes in Cash and Bank Balances | Indicator | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Cash and Bank Balances | 95,900 | 133,600 | (37,700) | -28.2% | - The decrease in cash and bank balances is primarily due to the repayment of approximately HK$48.4 million in bank borrowings52 Borrowings Total borrowings decreased by 3.4% from HK$622.1 million to HK$601.1 million, primarily due to the repayment of approximately HK$38.7 million in long-term loans Changes in Total Borrowings | Indicator | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Total Borrowings | 601,100 | 622,100 | (21,000) | -3.4% | - The decrease in borrowings is primarily due to the repayment of approximately HK$38.7 million in long-term loans54 Liquidity and Capital Resources As of June 30, 2025, net current assets increased to HK$728.8 million and net assets increased to HK$1,472.2 million, indicating an improvement in liquidity and capital resources Changes in Liquidity and Capital Resources | Indicator | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Net Current Assets | 728,800 | 648,300 | | Net Assets | 1,472,200 | 1,379,500 | Gearing Ratio The gearing ratio (net debt divided by total equity) decreased from 35.4% as of December 31, 2024, to 34.3% as of June 30, 2025, indicating a reduction in financial leverage Changes in Gearing Ratio | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Gearing Ratio | 34.3% | 35.4% | Contingent Liabilities As of June 30, 2025, the Group had no significant contingent liabilities or outstanding litigations - The Group had no significant contingent liabilities or outstanding litigations at the end of the reporting period57 Interim Dividends The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025, and 2024 - The Board does not recommend the payment of an interim dividend58 Other Information This section covers additional information including corporate governance compliance, audit committee review, post-reporting period events, and securities transactions by directors Compliance with Corporate Governance Code The Company has consistently applied and complied with all applicable provisions of the Corporate Governance Code as set out in Appendix C1 Part 2 of the Listing Rules during the reporting period - The Company has consistently applied and complied with all applicable provisions of the Corporate Governance Code as set out in Appendix C1 Part 2 of the Listing Rules59 Audit Committee The Audit Committee has reviewed the Group's unaudited interim results, discussed accounting policies with senior management and external auditors, and comprises two independent non-executive directors, one of whom possesses professional accounting qualifications, and one non-executive director - The Audit Committee has reviewed the Group's unaudited interim results and discussed the accounting policies adopted60 - The Audit Committee comprises two independent non-executive directors, one of whom possesses professional accounting qualifications, and one non-executive director60 Review of Condensed Consolidated Interim Financial Information The Company's unaudited condensed consolidated interim financial information has been reviewed by independent auditor PricewaterhouseCoopers in accordance with Hong Kong Standard on Review Engagements 2410 - The unaudited condensed consolidated interim financial information has been reviewed by independent auditor PricewaterhouseCoopers61 Events After the Reporting Period There have been no significant subsequent events for the Group after the reporting period and up to the date of this announcement - No significant events occurred after the reporting period62 Standard Code for Securities Transactions by Directors The Company has adopted the Standard Code as set out in Appendix C3 of the Listing Rules, and all directors have confirmed full compliance with the code during the reporting period - The Company has adopted the Standard Code as set out in Appendix C3 of the Listing Rules, and all directors have confirmed full compliance63 Purchase, Sale or Redemption of the Company's Listed Securities During the reporting period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities, and as of June 30, 2025, the Company held no treasury shares - During the reporting period, neither the Company nor its subsidiaries engaged in the purchase, sale, or redemption of listed securities64 - As of June 30, 2025, the Company held no treasury shares64 Publication of Interim Results Announcement and Interim Report The interim results announcement has been published on the HKEX website and the Company's website, with the interim report to be made available on the aforementioned websites in due course - The interim results announcement has been published on the HKEX and Company websites, and the interim report will be published in due course65 Acknowledgement The Board extends its sincere gratitude to shareholders for their support and to the Group's staff for their hard work and contributions - The Board expresses its gratitude to shareholders and staff66