中国通商集团(01719) - 2025 - 中期业绩

Summary This report outlines the condensed consolidated results of China Merchants Group Limited for the six months ended June 30, 2025, showing slight revenue growth but a decrease in profit attributable to owners due to a prior period's one-off gain - 2025 First Half Key Financial Indicators Comparison | Indicator | 2025 First Half (Thousand HKD) | 2024 First Half (Thousand HKD) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 157,939 | 157,177 | +0.5% | | Gross Profit | 38,406 | 37,420 | +2.6% | | Gross Profit Margin | 24.3% | 23.8% | +0.5pp | | Profit for the Period | 3,514 | 3,393 | +3.6% | | Profit Attributable to Owners of the Company | 2,473 | 3,468 | -28.7% | | Earnings Per Share (HK cents) | 0.14 | 0.2 | -30.0% | - The Board does not recommend an interim dividend for the current period, consistent with the prior period[5] Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income For the six months ended June 30, 2025, group revenue slightly increased, but operating profit decreased due to lower net other income and increased fair value losses on investment properties, leading to a 28.7% decline in profit attributable to owners of the Company - Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (Excerpt) | Indicator | 2025 First Half (Thousand HKD) | 2024 First Half (Thousand HKD) | | :--- | :--- | :--- | | Revenue | 157,939 | 157,177 | | Cost of services provided and goods sold | (119,533) | (119,757) | | Gross Profit | 38,406 | 37,420 | | Other income, net | 3,010 | 8,128 | | Fair value changes of investment properties | (1,615) | (1,298) | | Operating Profit | 10,434 | 11,882 | | Finance costs | (3,923) | (6,393) | | Profit before tax | 6,511 | 5,489 | | Income tax expense | (2,997) | (2,096) | | Profit for the Period | 3,514 | 3,393 | | Profit Attributable to Owners of the Company | 2,473 | 3,468 | | Basic Earnings Per Share (HK cents) | 0.14 | 0.2 | - Total comprehensive income for the period significantly improved from a loss of HKD 13.299 million in the first half of 2024 to a gain of HKD 27.421 million in the first half of 2025, primarily due to exchange differences on translation of overseas operations' financial statements[6][7] Condensed Consolidated Statement of Financial Position As of June 30, 2025, the Group's total assets slightly increased, with stable non-current assets and significant increases in current assets like inventories and receivables, while current liabilities also rose, leading to continued net current liabilities but an increase in net assets - Condensed Consolidated Statement of Financial Position (Excerpt) | Indicator | June 30, 2025 (Thousand HKD) | December 31, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Non-current Assets | | | | Investment Properties | 819,734 | 798,251 | | Property, Plant and Equipment | 314,235 | 317,701 | | Current Assets | | | | Inventories | 16,174 | 5,802 | | Trade and Other Receivables | 96,702 | 80,095 | | Cash and Cash Equivalents | 37,190 | 58,662 | | Current Liabilities | | | | Trade and Other Payables | 120,313 | 111,750 | | Bank Borrowings (current portion) | 146,016 | 141,979 | | Net Current Liabilities | (138,467) | (131,644) | | Net Assets | 841,710 | 814,289 | | Total Equity | 841,710 | 814,289 | - As of June 30, 2025, the Group's net current liabilities increased to approximately HKD 138 million from HKD 131 million at the end of 2024, indicating persistent liquidity pressure[9] Notes to the Condensed Consolidated Interim Financial Information This section details the basis of preparation, accounting policies, significant estimates, segment information, and changes in balance sheet items, including the 2024 disposal of a subsidiary 1. Company Information China Merchants Group Limited is an investment holding company registered in the Cayman Islands, primarily engaged in port investment, development, operation, and management, with its ultimate control resting with the Hubei Provincial People's Government State-owned Assets Supervision and Administration Commission - The Company is an investment holding company, with its subsidiaries primarily engaged in port investment, development, operation, and management, as well as providing port-related logistics and supply chain management services[10] - The ultimate controlling party of the Company is the Hubei Provincial People's Government State-owned Assets Supervision and Administration Commission[10] 2. Basis of Preparation The interim financial information is prepared in accordance with IAS 34 and HKEX Listing Rules, consistent with 2024 annual financial statements, and despite net current liabilities, the Board believes the Group can continue as a going concern due to expected cash flows and holding company support - The interim financial information is prepared in accordance with International Accounting Standard 34 and the HKEX Listing Rules, consistent with the accounting policies used in the 2024 annual financial statements[13] - As of June 30, 2025, the Group had net current liabilities of approximately HKD 138 million, but the Board assesses the Group's ability to continue as a going concern based on expected sufficient cash flows and financial support from its holding company, Hubei Port Group[14][18] - The revised International Financial Reporting Standards adopted during the period had no significant impact on the preparation and presentation of the Group's results and financial position[16] 3. Significant Accounting Estimates and Judgements The significant judgements, estimates, and assumptions made by management in preparing the interim financial information are consistent with those applied in the annual financial statements for the year ended December 31, 2024 - The significant judgements and sources of estimation uncertainty made by management in preparing the interim financial information are consistent with those applied in the annual financial statements for the year ended December 31, 2024[19] 4. Segment Information The Group operates four reportable segments: Property Business, Terminal and Related Businesses, Integrated Logistics Services, and Supply Chain Management and Trading Business, with all revenue and non-current assets primarily located in China - The Group's four reportable segments are: Property Business, Terminal and Related Businesses, Integrated Logistics Services, and Supply Chain Management and Trading Business[20][24] - For the six months ended June 30, 2025 and 2024, all of the Group's revenue was derived from external customers located in China, and non-current assets are also primarily located in China[22] - Segment Revenue and Results (2025 First Half) | Segment | External Customer Revenue (Thousand HKD) | Segment Results (Thousand HKD) | | :--- | :--- | :--- | | Property Business | 6,774 | 1,040 | | Terminal and Related Businesses | 76,275 | 14,130 | | Integrated Logistics Services | 40,492 | 1,736 | | Supply Chain Management and Trading Business | 34,398 | (2,136) | | Total | 157,939 | 14,770 | 5. Other Income, Net Net other income for the period significantly decreased to HKD 3.01 million from HKD 8.128 million in the prior period, primarily due to a one-off gain from the disposal of a subsidiary in the prior period - Other Income, Net Details | Item | 2025 First Half (Thousand HKD) | 2024 First Half (Thousand HKD) | | :--- | :--- | :--- | | Government grants | 2,591 | 1,340 | | Gain on disposal of a subsidiary | — | 4,901 | | Net exchange (loss) / gain | (8) | 1,602 | | Bank interest income | 100 | 53 | | Total | 3,010 | 8,128 | - Net other income decreased by 62.9% year-on-year, mainly due to a one-off gain of HKD 4.901 million from the disposal of a subsidiary in the first half of 2024[27] 6. Finance Costs Finance costs for the period significantly decreased by approximately 38.6% to HKD 3.923 million, primarily due to reduced interest on bank and other borrowings and loans from the ultimate holding company - Finance Costs Details | Item | 2025 First Half (Thousand HKD) | 2024 First Half (Thousand HKD) | | :--- | :--- | :--- | | Interest on bank and other borrowings | 3,233 | 4,784 | | Interest on lease liabilities | 162 | 183 | | Interest on loans from direct holding company | 123 | 128 | | Interest on loans from ultimate holding company | 377 | 1,298 | | Bank charges | 28 | — | | Total | 3,923 | 6,393 | - Finance costs decreased by approximately HKD 2.47 million year-on-year, mainly due to a decrease in interest on bank and other borrowings and interest on loans from the ultimate holding company[28] 7. Profit Before Tax Profit before tax increased to HKD 6.511 million from HKD 5.489 million in the prior period, influenced by increased staff costs, stable depreciation and amortization, higher impairment provisions for receivables, and net exchange losses - Profit Before Tax Deducted/(Credited) Items | Item | 2025 First Half (Thousand HKD) | 2024 First Half (Thousand HKD) | | :--- | :--- | :--- | | Staff costs | 31,934 | 27,889 | | Cost of services provided and goods sold | 119,533 | 119,757 | | Depreciation (own assets) | 11,337 | 12,486 | | Amortisation of land use rights | 249 | 243 | | Impairment loss allowance, net | 3,531 | 2,489 | | Net exchange loss / (gain) | 8 | (1,602) | - Staff costs increased by approximately HKD 4.045 million year-on-year, primarily due to increases in salaries and allowances and retirement benefit contributions[29] - Net impairment loss allowance for trade and other receivables and government grants increased by approximately HKD 1.042 million year-on-year[29] 8. Income Tax Expense Income tax expense for the period increased to HKD 2.997 million from HKD 2.096 million in the prior period, with no Hong Kong profits tax provision due to losses, and China corporate income tax calculated at a standard 25% rate, with some subsidiaries enjoying a 5% preferential rate - Income Tax Expense Details | Item | 2025 First Half (Thousand HKD) | 2024 First Half (Thousand HKD) | | :--- | :--- | :--- | | Current tax - China corporate income tax | 3,789 | 3,040 | | Deferred tax - origination and reversal of temporary differences | (792) | (944) | | Total | 2,997 | 2,096 | - The Company and its Hong Kong subsidiaries did not make a provision for Hong Kong profits tax due to recorded tax losses[30] - Certain PRC subsidiaries, such as Wuhan Yangluo Port Logistics Co., Ltd. and Tongshang Supply Chain Management (Wuhan) Co., Ltd., are recognized as small-profit enterprises and enjoy a preferential corporate income tax rate of 5%[30] 9. Earnings Per Share Basic earnings per share attributable to owners of the Company decreased to 0.14 HK cents from 0.2 HK cents in the prior period, with diluted earnings per share being the same as basic earnings per share due to no dilutive potential ordinary shares - Basic Earnings Per Share Calculation | Indicator | 2025 First Half | 2024 First Half | | :--- | :--- | :--- | | Profit Attributable to Owners of the Company (Thousand HKD) | 2,473 | 3,468 | | Weighted average number of ordinary shares in issue | 1,725,066,689 | 1,725,066,689 | | Basic Earnings Per Share (HK cents) | 0.14 | 0.2 | - Diluted earnings per share is the same as basic earnings per share, as there were no dilutive potential ordinary shares in issue during the current and prior periods[32] 10. Dividends The Board does not recommend the payment of any interim dividend for the six months ended June 30, 2025, consistent with the prior period - The Board does not recommend the payment of an interim dividend for the current period (2024: nil)[33] 11. Investment Properties The Group's investment properties, including leased land, berths, commercial buildings, pontoons, yards, warehouses, and buildings under construction in China, increased in net book value to HKD 819.7 million as of June 30, 2025, but recorded a net fair value loss of HKD 1.615 million during the period - Investment Properties Net Book Value Reconciliation | Item | June 30, 2025 (Thousand HKD) | December 31, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Opening net book value | 798,251 | 824,480 | | Net fair value changes recognised in profit or loss | (1,615) | (1,734) | | Exchange adjustments | 23,098 | (24,495) | | Closing net book value | 819,734 | 798,251 | - Investment properties recorded a fair value loss of HKD 1.615 million during the period, mainly due to a decrease in market rental levels for warehouse properties at the logistics center adjacent to Shayang Port[71] 12. Property, Plant and Equipment As of June 30, 2025, the net book value of property, plant and equipment slightly decreased to HKD 314.2 million, with minor additions offset by depreciation and exchange adjustments - Property, Plant and Equipment Net Book Value Reconciliation (Excerpt) | Item | June 30, 2025 (Thousand HKD) | December 31, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Opening net book value | 317,701 | 354,135 | | Additions | 179 | 1,478 | | Depreciation | (12,621) | (26,682) | | Exchange adjustments | 8,976 | (9,991) | | Closing net book value | 314,235 | 317,701 | 13. Inventories As of June 30, 2025, total inventories significantly increased to HKD 16.174 million, primarily due to the emergence of trade goods inventories totaling HKD 10.235 million - Inventories Details | Item | June 30, 2025 (Thousand HKD) | December 31, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Trade goods, at cost | 10,235 | — | | Consumables, at cost | 5,939 | 5,802 | | Total | 16,174 | 5,802 | 14. Trade and Other Receivables As of June 30, 2025, total trade and other receivables increased to HKD 96.702 million, with trade receivables and bills (net of impairment allowance) at HKD 89.24 million, and a significant increase in amounts overdue by more than 90 days - Trade and Other Receivables Details | Item | June 30, 2025 (Thousand HKD) | December 31, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Trade receivables and bills (net of impairment allowance) | 89,240 | 73,254 | | Other receivables (net of impairment allowance) | 7,462 | 6,841 | | Total | 96,702 | 80,095 | - Ageing Analysis of Trade Receivables and Bills (Net of Impairment Allowance) | Ageing | June 30, 2025 (Thousand HKD) | December 31, 2024 (Thousand HKD) | | :--- | :--- | :--- | | 0 — 30 days | 23,718 | 14,166 | | 31 — 60 days | 13,626 | 30,046 | | 61 — 90 days | 9,043 | 7,072 | | Over 90 days | 42,853 | 21,970 | | Total | 89,240 | 73,254 | 15. Trade and Other Payables As of June 30, 2025, total trade and other payables increased to HKD 120.3 million, with an increase in trade payables, particularly for amounts aged 61-90 days - Trade and Other Payables Details | Item | June 30, 2025 (Thousand HKD) | December 31, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Trade payables | 25,346 | 19,155 | | Amounts due to subcontractors | 50,001 | 50,253 | | Accrued expenses and other payables | 44,966 | 42,342 | | Total | 120,313 | 111,750 | - Ageing Analysis of Trade Payables | Ageing | June 30, 2025 (Thousand HKD) | December 31, 2024 (Thousand HKD) | | :--- | :--- | :--- | | 0 — 30 days | 8,770 | 6,180 | | 31 — 60 days | 4,081 | 4,988 | | 61 — 90 days | 4,748 | 582 | | Over 90 days | 7,747 | 7,405 | | Total | 25,346 | 19,155 | 16. Bank Borrowings As of June 30, 2025, total bank borrowings decreased to HKD 209 million, with a reduction in secured borrowings and a slight increase in unsecured borrowings, some of which are guaranteed by Hubei Port Group and secured by port facilities and land use rights - Bank Borrowings Details | Item | June 30, 2025 (Thousand HKD) | December 31, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Unsecured | 108,820 | 105,830 | | Secured | 100,189 | 115,442 | | Total | 209,009 | 221,272 | | Less: Due within one year (current liabilities) | (146,016) | (141,979) | | Due after one year (non-current liabilities) | 62,993 | 79,293 | - As of June 30, 2025, certain bank borrowings of the Group are guaranteed by Hubei Port Group and a subsidiary of the Group, and are secured by port facilities, terminal equipment, and land use rights with a carrying value of approximately HKD 19.25 million[38] 17. Disposal of a Subsidiary This section reviews the Group's disposal of a 60% equity interest in Zhongxiang Zhongji Port Company on June 18, 2024, which generated a gain of HKD 4.901 million and net cash inflow of HKD 74.721 million - The Group completed the disposal of a 60% equity interest in Zhongxiang Zhongji Port Company on June 18, 2024, for a cash consideration of RMB 69,576,900[39] - Gain and Net Cash Inflow from Disposal | Item | June 18, 2024 (Thousand HKD) | | :--- | :--- | | Net assets disposed of | 120,381 | | Consideration received | 74,733 | | Gain on disposal | 4,901 | | Net cash inflow from disposal | 74,721 | 18. Loans from Direct and Ultimate Holding Companies As of June 30, 2025, loans from the direct holding company have been repaid, while loans from the ultimate holding company amount to HKD 23.856 million, bearing interest at 3.5% per annum and repayable within one year - Loans from Holding Companies | Item | June 30, 2025 (Thousand HKD) | December 31, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Loans from direct holding company | — | 7,000 | | Loans from ultimate holding company | 23,856 | 23,342 | | Total | 23,856 | 30,342 | - As of June 30, 2025, loans from direct and ultimate holding companies are unsecured, bear interest at an annual rate of 3.5% (December 31, 2024: 3.65%), and are repayable within one year[42] Management Discussion and Analysis This section analyzes industry developments, the overall business environment, operating performance of core ports and business segments, and outlines future development strategies, highlighting Yangluo Port's growth despite trade challenges and the Group's focus on smart, green port construction and supply chain expansion Industry Development Wuhan ports continue to expand river-sea intermodal and direct routes, including international lines to Japan, Korea, Russia, and Vietnam, with Yangluo Port advancing green and smart port initiatives, though the US-China tariff war continues to impact foreign trade - Wuhan has opened multiple river-sea direct international routes, including to Japan, Korea, Russia, and Ho Chi Minh City, Vietnam, and launched a bulk cargo international liner service from Wuhan Yangluo Port to Labota Port, Indonesia in November 2024[43] - Yangluo Port continues to promote green and smart port construction, utilizing new energy vehicles and remote control gantry cranes, and implementing the "one vessel, one trailer" service model to enhance operational efficiency[43] - The ongoing US-China tariff war continues to affect the overall domestic market, leading to cancellations of customer orders and factory shutdowns for some import and export goods, with the foreign trade situation remaining severe[44] Overall Business Environment China Merchants Group's core business revolves around port operations and logistics, with Wuhan Yangluo Port ranking third among inland river ports in business environment, and the Group actively expanding new projects and cargo sources to achieve growth in container throughput and revenue - Wuhan Yangluo Port ranked 3rd among inland river ports in the 2024 business environment comprehensive evaluation, up 2 places from 2023[45] - China Port Throughput, January-June 2025 | Indicator | Throughput | Year-on-Year Growth | | :--- | :--- | :--- | | Port cargo throughput | 8.903 billion tonnes | +3.8% | | Coastal port cargo throughput | 5.703 billion tonnes | +2.5% | | Foreign trade cargo throughput | 2.738 billion tonnes | +1.8% | | Container throughput | 173 million TEUs | +6.9% | - The Group is actively expanding new projects and cargo sources, including GEM Co., Ltd.'s import and export bulk cargo business, Daming steel coils and other general and bulk cargo handling, Xiaopeng Motors CKD parts export, and agency services for Shanghai Zhuyunshang Company's imported pulp, aiming for dual growth in port container volume and revenue[46][47] Wuhan Yangluo Port and General Ports Wuhan Yangluo Port, a core hub in the middle reaches of the Yangtze River, leverages its industrial base and strategic location to provide extensive transshipment services, expanding regional and international direct routes to enhance cargo flow efficiency and its international hub status - Wuhan Yangluo Port, as the core port area of the Yangtze River Middle Reaches Shipping Center, has an economic hinterland covering provinces and cities including Hunan, Guizhou, Chongqing, Sichuan, Shanxi, Henan, Hubei, and Shaanxi[48][49] - New regional routes such as "Wuhan-Huanggang" and "Wuhan-Ezhou" and the "Yangluo Port to Cai Lai Port, Vietnam" river-sea direct route have been opened, along with increased frequency for "Wuhan-Japan, Korea, Russia" international direct routes, enhancing cargo flow efficiency and international hub status[49] - The port is comprehensively enhancing its service functions and levels by establishing gate inspection points, collaborating with shipping companies to set up empty container distribution centers, signing a regional container management agreement with CMA CGM, and partnering with China Port Logistics for CFS business[51] Hannan Port Hannan Port, strategically located in Wuhan Economic and Technological Development Zone, will synergize with Wuhan Yangluo Port to increase throughput, with plans for multi-phase development into a diversified business platform focusing on automotive logistics and trading, aiming to become a key logistics and automotive trading hub in southwest Wuhan - Hannan Port will create synergies with Wuhan Yangluo Port, increasing Yangluo Port's throughput and providing more cost-effective solutions for customers[53] - Hannan Port will be developed in multiple phases into a diversified business platform, offering terminal, warehousing, and logistics services, with a focus on automotive logistics and trading, as well as general cargo and container business[53] - Hannan Port aims to become the largest port in Central China integrating supply chain design and operation, water transport logistics distribution, automotive O2O trading, multimodal transport, logistics finance, allocation and distribution, and customs brokerage[53] Hanjiang Logistics Centre The Group owns the Hanjiang Logistics Centre, comprising seven warehouses and an ancillary office building adjacent to Shayang Port, which is planned to be held as investment property for rental income - The Hanjiang Logistics Centre, consisting of seven warehouses and an ancillary office building, is planned to be held as investment property to generate rental income[54] Tongshang Supply Chain Tongshang Supply Chain Management (Wuhan) Co., Ltd. leverages Yangluo Port's strategic location and the Group's port management expertise to provide integrated logistics services in essential goods like grain, rubber, and agricultural products, aiming to build a modern port-side supply chain system and a bulk commodity trading center centered around Yangluo Port - Tongshang Supply Chain Management (Wuhan) Co., Ltd. leverages Yangluo Port's geographical advantages and the Group's port management experience to focus on essential goods such as grain, rubber, and agricultural and sideline products, providing integrated logistics services including logistics, warehousing, distribution, and supply chain finance[55][56] - Tongshang Supply Chain aims to build a modern port-side supply chain system of "port + trade + warehousing + logistics", promoting port-industry-city integration and creating a bulk commodity trading center with Yangluo Port at its core[56] Operating Results During the period, Group revenue slightly increased by 0.5% to HKD 157.9 million, driven by growth in integrated logistics and terminal services, offsetting a decline in supply chain management and trading business; gross profit rose by 2.6% with a margin of 24.3%, but profit attributable to owners of the Company decreased by 28.7% to HKD 2.473 million due to reduced other income (including a prior year's one-off gain) and increased fair value losses on investment properties, resulting in earnings per share of 0.14 HK cents Revenue During the period, Group revenue slightly increased by 0.5% to HKD 157.9 million, with significant growth in integrated logistics services (43.9%), terminal and related services (2.7%), and property business (8.2%), partially offset by a 29.1% decline in supply chain management and trading business - Revenue by Business Segment Details | Business Segment | 2025 First Half (Thousand HKD) | Share | 2024 First Half (Thousand HKD) | Share | Change (Thousand HKD) | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Terminal services | 53,255 | 33.7% | 56,361 | 35.9% | (3,106) | (5.5%) | | Container handling, storage and other services | 17,211 | 10.9% | 16,380 | 10.4% | 831 | 5.1% | | Bulk cargo handling services | 5,809 | 3.7% | 1,528 | 1.0% | 4,281 | 280.2% | | Subtotal Terminal and Related Services | 76,275 | 48.3% | 74,269 | 47.3% | 2,006 | 2.7% | | Integrated logistics services | 40,492 | 25.6% | 28,141 | 17.9% | 12,351 | 43.9% | | Supply chain management and trading business | 34,398 | 21.8% | 48,505 | 30.8% | (14,107) | (29.1%) | | Property business | 6,774 | 4.3% | 6,262 | 4.0% | 512 | 8.2% | | Total Revenue | 157,939 | 100% | 157,177 | 100.0% | 762 | 0.5% | - The increase in revenue was primarily due to an increase of approximately HKD 12.351 million in integrated logistics services and approximately HKD 2.006 million in terminal and related services, offsetting the decrease of approximately HKD 14.107 million in supply chain management and trading business[59] Terminal Services Wuhan Yangluo Port's container throughput slightly increased by 1% to 450,279 TEUs, with a 5.3% rise in transshipment containers offsetting a decrease in local cargo containers, while market share declined to approximately 43.4% due to handling GEM general cargo and the US-China tariff war - Container Throughput | Type | 2025 First Half (TEUs) | Share | 2024 First Half (TEUs) | Share | Change (TEUs) | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Local cargo containers | 176,969 | 39.3% | 186,336 | 41.8% | (9,367) | (5.0%) | | Transshipment containers | 273,310 | 60.7% | 259,469 | 58.2% | 13,841 | 5.3% | | Total Throughput | 450,279 | 100% | 445,805 | 100% | 4,474 | 1.0% | - The increase in transshipment containers was mainly due to increased frequency of Sichuan and Chongqing transshipment routes and the opening of new routes such as Huangshi, Rizhao, and Ezhou lines[61] - Yangluo Port's market share decreased from approximately 47.9% in the prior period to approximately 43.4% in the current period, primarily affected by handling GEM general cargo and the US-China tariff war[62] Integrated Logistics Services Integrated logistics services revenue significantly increased by 43.9% to HKD 40.492 million, accounting for 25.6% of the Group's total revenue, primarily driven by increased freight forwarding volume at Wuhan Yangluo Port - Integrated logistics services revenue increased to approximately HKD 40.492 million (prior period: approximately HKD 28.141 million), accounting for approximately 25.6% of the Group's total revenue (prior period: approximately 17.9%)[63] - The increase in revenue was mainly due to an increase in freight forwarding volume at Wuhan Yangluo Port during the period[64] Supply Chain Management and Trading Business Supply chain management and trading business revenue decreased by 29.1% to HKD 34.398 million, representing 21.8% of the Group's total revenue, primarily due to relatively lower demand for rice and broken rice trading business during the period - Supply chain management and trading business revenue decreased by 29.1% to HKD 34.398 million (prior period: HKD 48.505 million)[65] - The decrease in revenue was mainly due to relatively lower demand for rice and broken rice trading business during the period[66] Property Business Property business revenue increased by 8.2% to HKD 6.774 million, accounting for 4.3% of the Group's total revenue, primarily due to increased warehouse rental income at Hannan Port - Property business revenue increased to approximately HKD 6.774 million (prior period: approximately HKD 6.262 million), accounting for approximately 4.3% of the Group's total revenue (prior period: approximately 4.0%)[67] - The increase in revenue was mainly due to an increase in warehouse rental income at Hannan Port[68] Gross Profit and Gross Profit Margin Gross profit for the period was HKD 38.406 million, a 2.6% year-on-year increase, with the gross profit margin improving to 24.3%, primarily driven by the continuous growth in integrated logistics services volume - Gross Profit and Gross Profit Margin | Indicator | 2025 First Half (Thousand HKD) | 2024 First Half (Thousand HKD) | Change (Thousand HKD) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Gross Profit | 38,406 | 37,420 | 986 | +2.6% | | Gross Profit Margin | 24.3% | 23.8% | +0.5pp | | - The increase in gross profit was mainly due to increased revenue from the continuous growth in integrated logistics services volume[69] Other Income Other income decreased by 62.9% to HKD 3.018 million, primarily due to a one-off gain of HKD 4.901 million recorded from the disposal of a subsidiary in the prior period - Other income decreased by approximately 62.9% to approximately HKD 3.018 million (prior period: approximately HKD 8.128 million)[70] - This decrease was mainly due to the Group recording a gain of approximately HKD 4.901 million from the disposal of a subsidiary in the prior period[70] Changes in Fair Value of Investment Properties The Group recorded a fair value loss on investment properties of HKD 1.615 million, an increase from the HKD 1.298 million loss in the prior period, primarily due to a decline in market rental levels for warehouse properties at the logistics center adjacent to Shayang Port - The Group recorded a fair value loss on investment properties of approximately HKD 1.615 million (prior period: fair value loss of approximately HKD 1.298 million)[71] - The increase in fair value loss on investment properties was mainly due to a decrease in market rental levels for warehouse properties at the logistics center adjacent to Shayang Port[71] Profit Attributable to Owners of the Company Profit attributable to owners of the Company decreased by 28.7% to HKD 2.473 million, primarily due to the combined impact of reduced other income (including a prior year's one-off disposal gain), increased fair value losses on investment properties, and higher income tax expense, despite improvements in gross profit and net finance costs - Profit attributable to owners of the Company decreased by approximately HKD 0.995 million or approximately 28.7% to approximately HKD 2.473 million (prior period: approximately HKD 3.468 million)[72] - The decrease in profit was mainly due to the offsetting effects of reduced other income (including a one-off gain from the disposal of a subsidiary in the prior year), increased fair value losses on investment properties, and increased income tax expense[72] - Basic earnings per share attributable to owners of the Company for the period was approximately 0.14 HK cents (prior period: approximately 0.2 HK cents)[73] Future Outlook Under the strategic guidance of Hubei Port Group, the Group will focus on industrial upgrading, management reform, technological innovation, risk control, and value enhancement, advancing smart and green port construction, deepening international cooperation, and expanding supply chain businesses - The Group will anchor its high-quality development goals, systematically advancing five core tasks: industrial upgrading, management reform, technological innovation, risk control, and value enhancement[74] - Yangluo Port will comprehensively promote smart and green port construction, deepen cooperation with international ports, expand "Belt and Road" routes, and strengthen cooperation with cities along the Yangtze River to enhance its status as a shipping center in the middle reaches of the Yangtze River[74] - Hannan Port will fully leverage its national first-class port policy advantages, focusing on developing automotive finished vehicle logistics, high-end equipment bonded services, and supply chain integration businesses, to build a modern port-side industrial demonstration zone radiating across Central China[74] - In domestic and international supply chain businesses, the Group will leverage Hubei Port Group's "port + rail + shipping" multimodal transport advantages, consolidate its base in bulk commodity supply chains, and continuously enhance the resilience and value creation capabilities of its industrial and supply chains through optimizing global resource allocation, innovating service models, and strengthening risk control[74] Other Information This section covers share option schemes, financial resources, liquidity, exchange rate risk, investments, capital commitments, contingent liabilities, asset pledges, capital structure, employees, remuneration, future investment plans, interim dividends, listed securities transactions, corporate governance, and post-reporting period events, noting stable net gearing but persistent net current liabilities and compliance with corporate governance codes Share Option Scheme The Company adopted a share option scheme on May 25, 2018, but no options have been granted, exercised, lapsed, or cancelled, and no unexercised options exist since its adoption and up to the date of this announcement - Since the adoption of the share option scheme and up to the date of this announcement, no share options have been granted or agreed to be granted, exercised, lapsed, or cancelled under the scheme[75] - As of the date of this announcement, there are no unexercised share options under the share option scheme[75] Directors' Rights to Acquire Shares or Debentures During the period, no directors were granted any share options to subscribe for shares - During the period, no directors were granted any share options to subscribe for shares[76] Financial Resources and Liquidity The Group primarily funds operations and capital expenditures through internal resources, shareholder loans, and bank borrowings, with total interest-bearing borrowings of HKD 232.9 million, cash and cash equivalents of HKD 37.19 million, and net assets of HKD 841.7 million as of June 30, 2025, resulting in a net gearing ratio of 0.3 times and net current liabilities of HKD 138.5 million - Key Financial Resources and Liquidity Indicators | Indicator | June 30, 2025 (Thousand HKD) | December 31, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Total outstanding interest-bearing borrowings | 232,865 | 251,614 | | Total cash and cash equivalents | 37,190 | 58,662 | | Consolidated net assets | 841,710 | 814,289 | | Net gearing ratio | 0.3 times | 0.3 times | | Net current liabilities | 138,467 | 131,644 | | Current ratio | 0.6 times | 0.6 times | Exchange Rate Risk The Board believes the Group had no significant foreign exchange risk during the period, as its primary business operations in China are mainly transacted in Renminbi - The Group operates its business in China, with its primary operations mainly transacted in Renminbi, thus the Board believes the Group had no significant foreign exchange risk during the period[79] Material Investments Held, Material Acquisitions and Disposals of Subsidiaries, Associates and Joint Ventures During the period, the Group had no other material investments, acquisitions, or disposals of subsidiaries, associates, or joint ventures - During the period, there were no other material investments, material acquisitions, or disposals of subsidiaries, associates, or joint ventures[80] Capital Commitments As of June 30, 2025, the Group's contracted but unprovided capital commitments for the construction of port facilities amounted to HKD 41.817 million, a slight increase from the end of 2024 - Capital Commitments | Item | June 30, 2025 (Thousand HKD) | December 31, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Contracted but unprovided capital commitments for construction of port facilities | 41,817 | 40,640 | Contingent Liabilities As of June 30, 2025, the Group had no significant contingent liabilities - As of June 30, 2025, the Group had no significant contingent liabilities (December 31, 2024: nil)[82] Pledge of Assets As of June 30, 2025, the Group had pledged port facilities and terminal equipment with a carrying value of approximately HKD 3.604 million, and land use rights of approximately HKD 15.646 million, as collateral for bank and other borrowings - Carrying Value of Pledged Assets | Pledged Assets | June 30, 2025 (Thousand HKD) | December 31, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Property, plant and equipment — port facilities and terminal equipment | 3,604 | 3,681 | | Land use rights | 15,646 | 15,451 | | Total | 19,250 | 19,132 | Capital Structure As of June 30, 2025, the Group's total equity increased to HKD 841.7 million compared to the end of 2024 - Total Equity | Indicator | June 30, 2025 (Thousand HKD) | December 31, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Total equity | 841,710 | 814,289 | Employees and Remuneration Policy As of June 30, 2025, the Group had 314 employees, providing retirement, medical, unemployment insurance, and housing funds for PRC employees, and MPF and medical benefits for Hong Kong employees, with remuneration policies based on performance, qualifications, responsibilities, and market value - As of June 30, 2025, the Group had 314 employees (December 31, 2024: 328 full-time employees)[85] - The Group arranges for its PRC employees to participate in retirement, medical, unemployment insurance, and housing fund schemes, and makes contributions to the Hong Kong Mandatory Provident Fund Scheme and provides medical benefits for its Hong Kong employees[85] - Remuneration policies are similar to those of peers, with salaries determined based on employee performance and qualifications, referencing their respective responsibilities and current market value in the region[85] Future Plans for Material Investments or Capital Assets During the period, the Board did not authorize any material investments or capital asset additions, but the Group will continue to seek suitable opportunities to invest in or acquire material capital assets to enhance its ordinary business profitability - During the period, the Board did not authorize any material investments or capital asset additions[86] - The Group will continue to seek suitable opportunities to invest in or acquire material capital assets to enhance the profitability of its ordinary business[86] Interim Dividend The Board resolved not to declare any interim dividend for the current period, consistent with the prior period - The Board resolved not to declare any interim dividend for the current period (prior period: nil)[87] Purchase, Redemption or Sale of Listed Securities During the period, neither the Company nor 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 period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[88] - As of June 30, 2025, the Company held no treasury shares[88] Compliance with Corporate Governance Code During the period, the Company consistently complied with the Corporate Governance Code set out in Appendix C1 Part 2 of the Listing Rules - During the period, the Company consistently complied with the Corporate Governance Code set out in Appendix C1 Part 2 of the Listing Rules[89] Compliance with Standard Code for Securities Transactions by Directors The Company has adopted the Standard Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 of the Listing Rules, and all directors confirmed compliance with its required standards during the period - The Company has adopted the Standard Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 of the Listing Rules[90] - All directors confirmed that they have complied with the required standards set out in the Standard Code when dealing in the Company's securities during the period[90] Events After Reporting Period The Group had no other significant events after the reporting period and up to the date of this announcement - The Group had no other significant events after the reporting period and up to the date of this announcement[91] Review by Audit Committee The Group's condensed consolidated results for the period were not reviewed by external auditors but were reviewed by the Audit Committee, which confirmed the adopted accounting principles and discussed audit, internal control, risk management, and financial reporting matters - The Group's condensed consolidated results for the period were not reviewed by external auditors but were reviewed by the Audit Committee[92] - The Audit Committee reviewed and confirmed the accounting principles and practices adopted by the Group, and discussed audit, internal control, risk management, and financial reporting matters[92] - The Audit Committee comprises Ms. Yu Ling, a non-executive Director, and Mr. Zou Guoqiang (Chairman), Mr. Fu Xinping, and Dr. Mao Zhenhua, three independent non-executive Directors[92]