玄武云(02392) - 2025 - 中期业绩

Company Information and Financial Summary This section provides an overview of the company's profile, including its registration, business, and ultimate controlling shareholders, along with a summary of its financial performance for the period Company Overview Xuan Wu Cloud Technology Holdings Limited, registered in the Cayman Islands, provides smart CRM services in China, with its unaudited interim financials approved on August 28, 2025 - Company Name: Xuan Wu Cloud Technology Holdings Limited[2] - Registered in the Cayman Islands[2][8] - Primary business: Providing smart Customer Relationship Management (CRM) services in China[8] - Ultimate controlling shareholders: Mr. Chen Yonghui, Mr. Huang Fangjie, and Mr. Li Hairong[8] - Financial information is presented in RMB thousands and rounded to the nearest thousand[9] - The condensed consolidated interim financial information is unaudited and was approved for publication by the Board on August 28, 2025[9][10] Financial Performance Summary For the six months ended June 30, 2025, revenue decreased by 36.5% to RMB 410,907 thousands, gross profit declined, and the company incurred an operating loss Financial Performance Summary for the Six Months Ended June 30, 2025 | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 410,907 | 647,469 | (36.5) | | Gross Profit | 74,950 | 101,249 | (26.0) | | Operating Loss | (26,968) | (4,106) | N/A | | Loss Before Tax | (29,084) | (5,912) | N/A | | Loss Attributable to Owners of the Company | (25,874) | (6,444) | N/A | | Loss Per Share (RMB) | (0.048) | (0.012) | N/A | Condensed Consolidated Financial Statements This section presents the company's condensed consolidated statement of comprehensive income and financial position for the reporting period, detailing revenue, expenses, assets, and liabilities Condensed Consolidated Statement of Comprehensive Income For the six months ended June 30, 2025, revenue was RMB 410,907 thousands, cost of sales RMB 335,957 thousands, resulting in a gross profit of RMB 74,950 thousands, with an operating loss of RMB 26,968 thousands and a loss attributable to owners of the company of RMB 25,874 thousands Condensed Consolidated Statement of Comprehensive Income for the Six Months Ended June 30, 2025 | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Revenue | 410,907 | 647,469 | | Cost of Sales | (335,957) | (546,220) | | Gross Profit | 74,950 | 101,249 | | Selling and Distribution Expenses | (48,789) | (49,854) | | Administrative Expenses | (22,853) | (23,353) | | Research and Development Expenses | (28,598) | (32,790) | | Operating Loss | (26,968) | (4,106) | | Loss Before Income Tax | (29,084) | (5,912) | | Loss and Total Comprehensive Loss for the Period | (29,238) | (6,140) | | Loss Attributable to Owners of the Company | (25,874) | (6,444) | | Basic and Diluted Loss Per Share (RMB) | (0.048) | (0.012) | Condensed Consolidated Statement of Financial Position As of June 30, 2025, total assets were RMB 624,742 thousands, total equity RMB 299,469 thousands, and total liabilities RMB 325,273 thousands, showing slight asset decrease and adjusted equity/liability structure compared to year-end 2024 Condensed Consolidated Statement of Financial Position as of June 30, 2025 | Metric | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Assets | | | | Non-current Assets | 32,569 | 39,765 | | Current Assets | 592,173 | 594,043 | | Total Assets | 624,742 | 633,808 | | Equity | | | | Equity Attributable to Owners of the Company | 306,665 | 331,621 | | Non-controlling Interests | (7,196) | (3,552) | | Total Equity | 299,469 | 328,069 | | Liabilities | | | | Non-current Liabilities | 2,137 | 8,026 | | Current Liabilities | 323,136 | 297,713 | | Total Liabilities | 325,273 | 305,739 | | Total Equity and Liabilities | 624,742 | 633,808 | Notes to the Financial Information This section provides detailed notes on the financial information, covering general data, accounting policies, segment performance, revenue, expenses, financing, taxation, and balance sheet items General Information and Basis of Preparation This section outlines the company's registration, primary business, controlling shareholders, and the presentation currency and approval date of its unaudited interim financial information, prepared under HKAS 34 - Financial information is presented in RMB thousands and rounded to the nearest thousand[9] - The condensed consolidated interim financial information is unaudited and was approved for publication by the Board on August 28, 2025[9][10] - Prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting"[11] Accounting Policies The Group's accounting policies are consistent with its 2024 annual financial statements, with new and revised standards adopted having no material impact on the interim financial information, and no significant future impact expected - Adoption of new and revised standards (e.g., HKAS 21 and HKFRS 1 amendments) had no material impact[12][13] - New standards effective in the future (e.g., HKFRS 9, 7, 18, 19, 10 and HKAS 28 amendments) are not expected to have a material impact on the condensed consolidated interim financial information[14][15] Segment Information The company's chief operating decision-maker assesses performance based on gross profit from CRM PaaS and SaaS services, with PaaS revenue at RMB 165,951 thousands and SaaS revenue at RMB 244,956 thousands for the six months ended June 30, 2025, with SaaS contributing higher gross profit Overview of Segments and Principal Activities The company's chief operating decision-maker categorizes business into CRM PaaS and CRM SaaS services, with PaaS offering telecom network communication capabilities and SaaS providing one-stop smart CRM solutions like marketing, sales, and customer service clouds - Operating segments: CRM PaaS services (cPaaS) and CRM SaaS services (Marketing Cloud, Sales Cloud, Customer Service Cloud)[17][18] - The chief operating decision-maker assesses performance based on gross profit for each segment, without using separate segment asset and liability information[18] - Most assets are located in China[19] Segment Performance For the six months ended June 30, 2025, PaaS revenue was RMB 165,951 thousands and SaaS revenue was RMB 244,956 thousands, totaling RMB 410,907 thousands, with the SaaS segment contributing higher gross profit Segment Performance for the Six Months Ended June 30, 2025 | Metric | PaaS (RMB thousands) | SaaS (RMB thousands) | Total (RMB thousands) | | :--- | :--- | :--- | :--- | | Revenue | 165,951 | 244,956 | 410,907 | | Cost of Sales | (156,000) | (179,957) | (335,957) | | Gross Profit | 9,951 | 64,999 | 74,950 | Segment Performance for the Six Months Ended June 30, 2024 | Metric | PaaS (RMB thousands) | SaaS (RMB thousands) | Total (RMB thousands) | | :--- | :--- | :--- | :--- | | Revenue | 282,411 | 365,058 | 647,469 | | Cost of Sales | (265,456) | (280,764) | (546,220) | | Gross Profit | 16,955 | 84,294 | 101,249 | Revenue Analysis For the six months ended June 30, 2025, PaaS revenue was RMB 165,951 thousands and SaaS revenue was RMB 244,956 thousands, with most revenue recognized at a point in time and an increase in contract liabilities Revenue Analysis by Category for the Six Months Ended June 30 | Category | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | PaaS | 165,951 | 282,411 | | SaaS | 244,956 | 365,058 | | Total | 410,907 | 647,469 | Revenue Analysis by Timing of Revenue Recognition from Customer Contracts for the Six Months Ended June 30 | Timing of Recognition | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | At a point in time | 390,237 | 629,875 | | Over a period of time | 20,670 | 17,594 | | Total | 410,907 | 647,469 | - Contract liabilities increased from RMB 37,535 thousands as of December 31, 2024, to RMB 62,158 thousands as of June 30, 2025[23] Expense Analysis For the six months ended June 30, 2025, total expenses were RMB 436,197 thousands, primarily comprising telecom resource costs and employee benefit expenses, both of which decreased year-on-year, while other income fell 42.9% due to reduced government grants and VAT refunds Expense Analysis for the Six Months Ended June 30 | Expense Category | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Telecom resource costs | 321,281 | 516,683 | | Employee benefit expenses | 86,137 | 98,332 | | Travel and entertainment expenses | 6,536 | 8,284 | | Outsourced customer service expenses | 5,746 | 5,590 | | Depreciation and amortization expenses | 4,724 | 4,984 | | Infrastructure and equipment expenses | 3,916 | 3,542 | | Professional service fees | 3,294 | 2,711 | | Marketing and promotion expenses | 929 | 1,383 | | Taxes and other levies | 837 | 1,219 | | Conference and office expenses | 653 | 914 | | Outsourced implementation costs | 330 | 5,751 | | Lease payments for short-term leases | 240 | 246 | | Auditor's remuneration | 75 | 9 | | Others | 1,499 | 2,569 | | Total | 436,197 | 652,217 | - Other income decreased by 42.9% to RMB 1,636 thousands, primarily due to reduced government grants and VAT refunds[24][26][71] Net Finance Costs For the six months ended June 30, 2025, the company recorded net finance costs of RMB 2,116 thousands, an increase from RMB 1,806 thousands in the prior period, primarily driven by interest expense on borrowings Net Finance Costs for the Six Months Ended June 30 | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Finance income (interest on bank deposits) | 101 | 578 | | Finance costs (interest on lease liabilities) | (91) | (250) | | Finance costs (interest on borrowings) | (2,126) | (2,134) | | Net Finance Costs | (2,116) | (1,806) | Income Tax Expense The company is tax-exempt in the Cayman Islands and BVI, with no assessable profits in Hong Kong; mainland China operations typically face a 25% corporate income tax, but high-tech enterprises like Xuan Wu enjoy a 15% preferential rate, and small low-profit enterprises a 20% rate, with income tax expense for the six months ended June 30, 2025, being RMB 154 thousands - Tax-exempt in the Cayman Islands and British Virgin Islands, with no assessable profits in Hong Kong[28][29] - China's corporate income tax rate is typically 25%, but high-tech enterprises (Xuan Wu) enjoy a 15% preferential rate until December 2027[30][31] - Small low-profit enterprises enjoy a 20% preferential tax rate, with taxable income below RMB 3.0 million taxed at 25%[32] Income Tax Expense for the Six Months Ended June 30 | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Current income tax | – | (13) | | Deferred income tax | (154) | (215) | | Income Tax Expense | (154) | (228) | Loss Per Share For the six months ended June 30, 2025, basic loss per share expanded to RMB 0.048, from RMB 0.012 in the prior period, with diluted loss per share equaling basic loss per share due to the company's loss Loss Per Share for the Six Months Ended June 30 | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Loss Attributable to Owners of the Company (RMB thousands) | (25,874) | (6,444) | | Weighted average number of ordinary shares deemed to be issued (thousands) | 536,268 | 547,162 | | Basic Loss Per Share Attributable to Owners of the Company for the Period (RMB) | (0.048) | (0.012) | - Diluted loss per share is equal to basic loss per share, as potential ordinary shares have an anti-dilutive effect[36] Trade and Other Receivables and Prepayments As of June 30, 2025, trade receivables, bills receivable, other receivables, and prepayments totaled RMB 485,907 thousands, a decrease from RMB 513,107 thousands at year-end 2024, with an increase in impairment provision for trade receivables Trade Receivables, Bills Receivable, Other Receivables and Prepayments as of June 30, 2025 | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Trade receivables (net) | 262,479 | 286,396 | | Impairment provision for trade receivables | (35,684) | (32,937) | | Bills receivable | – | 1,514 | | Other receivables (net) | 13,712 | 15,887 | | Prepayments to suppliers | 208,679 | 207,966 | | Prepaid taxes | 1,037 | 1,344 | | Total | 485,907 | 513,107 | - Trade receivables aging analysis shows the highest proportion for balances not exceeding three months, but balances over two years have increased[38] Borrowings As of June 30, 2025, current bank borrowings were RMB 143,619 thousands, largely consistent with year-end 2024, with some borrowings secured by company patents and others by company guarantees Borrowings as of June 30, 2025 | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Current bank borrowings | 143,619 | 144,040 | - Some bank borrowings are secured by certain patents of the Group, while others are guaranteed by the Company[40] Trade and Other Payables As of June 30, 2025, trade payables, bills payable, and other payables totaled RMB 112,023 thousands, a slight increase from RMB 108,764 thousands at year-end 2024, primarily comprising telecom expenses and server rental fees Trade and Other Payables as of June 30, 2025 | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Trade payables (third parties) | 89,635 | 85,772 | | Other payables (third parties) | 6,193 | 5,697 | | Accrued salaries | 9,887 | 10,582 | | Other taxes payable | 6,308 | 6,713 | | Total | 112,023 | 108,764 | - Trade payables primarily refer to telecom expenses payable and server rental fees payable[42] - Trade payables aging analysis shows an increase in balances over six months old[42] Dividends The Board does not recommend the payment of an 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 six months ended June 30, 2025[43] Business Review This section reviews the company's overall business performance, including revenue trends, SaaS segment details, and ecosystem development initiatives during the reporting period Overall Business Performance In the first half, the company strengthened its AI capabilities, but domestic revenue from PaaS and some SaaS declined 36.5% to RMB 410.9 million due to telecom regulatory adjustments, while overseas cloud communication business grew rapidly, and overall gross margin improved with positive operating cash flow - Driven by global digital economy and AI innovation, the company, as a smart CRM service provider, continues to strengthen its AI capabilities[44] - Total revenue decreased by 36.5% year-on-year to RMB 410.9 million, primarily due to domestic telecom industry regulatory adjustments impacting PaaS and some SaaS revenue[45] - Overseas cloud communication business achieved rapid customer and revenue growth, covering Southeast Asia, Latin America, East Asia, and the Middle East[45] - Focusing on AI+SaaS business, gross margin steadily improved, and operating cash flow turned positive[46] - Obtained a total of 410 authorized patents and computer software copyrights, with 11 new additions during the reporting period[46] - Provided digital transformation and upgrade services to 2,351 customers across four major industries: finance, fast-moving consumer goods, government and enterprises, and TMT[46] SaaS Business Segmentation SaaS business, comprising Marketing Cloud, Sales Cloud, and Customer Service Cloud, generated RMB 245.0 million in revenue, a 32.9% year-on-year decrease due to policy impacts and active reduction of loss-making projects, but SaaS gross margin improved to 26.5%, with core customers contributing RMB 1.3 million per capita - SaaS business revenue was RMB 245.0 million, a 32.9% year-on-year decrease, with gross margin improving to 26.5%[47] - Core customer revenue accounted for 95.0% of total customer revenue, with an average contribution of RMB 1.3 million per core customer[47] - SaaS core customer count was 1,558, with an average contribution of RMB 1.1 million per person[47] Marketing Cloud Marketing Cloud served financial and government clients, generating RMB 189.7 million in revenue, a 38.1% year-on-year decrease due to telecom regulatory policies, while ICC completed 5G message capability upgrades, increased trusted computing adaptations to 14, and adapted to HarmonyOS, maintaining over 90% project win rate - Marketing Cloud revenue was RMB 189.7 million, a 38.1% year-on-year decrease[48] - ICC (Integrated Communication Center) completed adaptation to the latest direct connection protocols of mainstream domestic telecom operators, fully upgrading its 5G message delivery capabilities[48] - ICC's trusted computing adaptations increased to 14, completing HarmonyOS adaptation for components like "Jiyan" and "iPush", maintaining an over 90% project win rate[48] - DMP Smart Marketing Cloud platform deeply serves government, enterprise, and e-commerce sectors, assisting enterprises in building digital marketing and operation systems[48] Sales Cloud Sales Cloud, focusing on AI+CRM for consumer goods, generated RMB 28.6 million in revenue, a 33.6% year-on-year decrease due to active reduction of loss-making projects, but with improved gross margin; core product [Smart 100] enhanced features, Smart U-Customer upgraded with Huawei Ascend AI and Deep Seek large models for "second-level response," and AI product offerings expanded to 12 standard products including SKU Super Model and "AI Photo Detective" - Sales Cloud revenue was RMB 28.6 million, a 33.6% year-on-year decrease, but with improved gross margin[52] - Annual Recurring Revenue (ARR) accounted for 62.9% of Sales Cloud revenue, a 12.4 percentage point increase year-on-year[53] - Core product [Smart 100] enhanced features, adding configuration components like "Super Form" and "Survey Questionnaire"[50] - Smart U-Customer fully upgraded based on Huawei Ascend AI ecosystem and Deep Seek large models, achieving "second-level response" for customer profile analysis and business opportunity prediction, and releasing multi-language versions[50] - Launched AI products based on self-developed Xuan Tao large model and open-source large models like Deep Seek, including SKU Super Model and "AI Photo Detective"[51] - The number of AI standard products increased to 12, adding functions such as terminal display empty space detection and layered detection[51] - Developed multiple AI intelligent agents based on the aPaaS platform, such as "Development Assistant," "Market Survey Assistant," "Voice Operation Assistant," and "Smart Xuan" for Smart U-Customer[51] - AIoT Smart Refrigerator continued to expand offline terminal store coverage and iterated on dynamic sales application scenarios[52] Customer Service Cloud Customer Service Cloud further increased its market share in post-loan management SaaS, with seat scale growing 19.9% year-on-year, expanding product capabilities from outbound calls to all touchpoints, integrating Deep Seek and other open-source large models to develop a script voice configuration robot that reduces workload by 90%, and achieving RMB 26.6 million in revenue, a 71.7% year-on-year increase - Market share in post-loan management SaaS business increased, with seat scale growing by 19.9% year-on-year[53] - Contact touchpoints expanded from outbound calls to all touchpoints, achieving breakthroughs in new post-loan management touchpoints such as SMS and flash messages[53] - Integrated Deep Seek and other open-source large models, developing a script voice configuration robot that can reduce workload by 90%[53] - Customer Service Cloud revenue was RMB 26.6 million, a significant 71.7% year-on-year increase[53] Ecosystem Development The company actively builds its domestic resource and channel ecosystem, forming a strategic partnership with Tencent Cloud, collaborating with Huawei Ascend to upgrade product versions, and listing data products on Guangzhou and Shenzhen data exchanges to expand sales channels - Established a strategic partnership with Tencent Cloud to collaborate on AI products and services, cloud communication, and smart retail[54] - Collaborated with Huawei Ascend to jointly upgrade and iterate product versions[54] - Data products have been listed on the Guangzhou and Shenzhen Data Exchanges to expand sales channels[54] Business Outlook This section outlines the company's future strategies, focusing on core product standardization, AI product development, and expanding its domestic and international ecosystem Core Product Standardization and Profit Enhancement The company will focus on enhancing the standardization of core products across business lines, developing more standardized product components based on common requirements, and implementing standardized delivery processes to optimize delivery cycles, reduce project costs, and improve profit margins, while also enriching its AI standard product matrix for rapid scaling - Focus on enhancing core product standardization, developing more standardized product components, optimizing delivery cycles, reducing project costs, and improving profit margins[55] - Continue to enrich the AI standard product matrix based on customer business scenario demands to achieve rapid product scaling[55] Key AI Product Operations and Financial Applications The company will strengthen market expansion and operations for key AI products like SKU Super Model and "AI Photo Detective" to establish them as flagship AI products, while leveraging its financial industry client resources to develop AI applications for the financial sector, including intelligent agent development, smart customer service optimization, and digital humans, to deepen cooperation - Strengthen market expansion and operations for key AI products such as SKU Super Model and "AI Photo Detective" to build them into flagship AI products[56] - Leverage financial industry client resources to develop AI product applications for the financial sector, including intelligent agent development, smart customer service optimization, and digital humans[56] Domestic and International Ecosystem Development and Market Responsiveness The company will continue to build its ecosystem, maintaining close ties with upstream and downstream partners, strengthening interactions and cooperation with telecom operators, cloud vendors, and industry peers, and plans to localize operations in some overseas regions, deepen cooperation with resource providers, and further expand its customer base to enhance market responsiveness - Continue to build the ecosystem, strengthening interactions and cooperation with telecom operators, cloud vendors, and industry peers[57] - Plan to achieve localized operations in some overseas regions, deepen cooperation with resource providers, and expand customer sources[57] Management Discussion and Analysis This section provides management's detailed discussion and analysis of the company's financial performance, including revenue, expenses, profitability, liquidity, and financial resources Financial Overview This section analyzes the financial performance for the reporting period, detailing changes in revenue, cost of sales, gross profit, various expenses, and the ultimate loss, primarily attributing the decline in revenue and gross profit to domestic telecom regulatory adjustments, while SaaS gross margin improved, and the loss attributable to owners of the company expanded to RMB 25.9 million due to reduced PaaS and some SaaS sales - Total revenue decreased by 36.5% to RMB 410.9 million, primarily due to domestic telecom industry regulatory adjustments[58] - The SaaS segment's proportion of total revenue increased to 59.6% (2024: 56.4%), with PaaS accounting for 40.4%[58] Revenue Analysis For the six months ended June 30, 2025, PaaS revenue decreased by 41.2% to RMB 166.0 million, and SaaS revenue decreased by 32.9% to RMB 245.0 million, primarily due to domestic telecom regulatory policy adjustments and the company's active reduction of loss-making projects Segment Revenue for the Six Months Ended June 30 | Segment | 2025 (RMB thousands) | Proportion (%) | 2024 (RMB thousands) | Proportion (%) | | :--- | :--- | :--- | :--- | :--- | | PaaS | 165,951 | 40.4 | 282,411 | 43.6 | | SaaS | 244,956 | 59.6 | 365,058 | 56.4 | | Total | 410,907 | 100.0 | 647,469 | 100.0 | - PaaS revenue decreased by 41.2% to RMB 166.0 million, primarily due to domestic telecom industry regulatory policy adjustments[61] - SaaS revenue decreased by 32.9% to RMB 245.0 million, primarily due to the company's active reduction of loss-making projects[63] SaaS Revenue Details for the Six Months Ended June 30 | Solution | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Marketing Cloud | 189,743 | 306,495 | | Sales Cloud | 28,590 | 43,061 | | Customer Service Cloud | 26,623 | 15,502 | | Total | 244,956 | 365,058 | Cost of Sales For the six months ended June 30, 2025, cost of sales decreased by 38.5% to RMB 336.0 million, consistent with the reduction in PaaS and SaaS business, with PaaS cost of sales decreasing by 41.2% and SaaS cost of sales by 35.9%, mainly due to lower telecom resource costs, labor costs, and outsourced implementation costs - Cost of sales decreased by 38.5% to RMB 336.0 million, consistent with the reduction in PaaS and SaaS business[64] - PaaS cost of sales decreased by 41.2% to RMB 156.0 million, primarily due to lower telecom resource costs[64] - SaaS cost of sales decreased by 35.9% to RMB 180.0 million, primarily due to reduced telecom resource costs, labor costs, and outsourced implementation costs[64] Gross Profit and Gross Margin Overall gross profit decreased by 26.0% to RMB 75.0 million, but the overall gross margin increased from 15.6% to 18.2%, with PaaS gross margin remaining at 6.0% and SaaS gross margin increasing to 26.5% due to improved profitability of the core SaaS business - Overall gross profit decreased by 26.0% to RMB 75.0 million[65] - Overall gross margin increased from 15.6% to 18.2%[65] - PaaS gross margin remained at 6.0%[66] - SaaS gross margin increased to 26.5% (2024: 23.1%), primarily due to improved profitability of the core SaaS business[66] Selling and Distribution Expenses Selling and distribution expenses decreased by 2.1% to RMB 48.8 million, mainly due to reduced entertainment and travel expenses for sales and marketing personnel - Selling and distribution expenses decreased by 2.1% to RMB 48.8 million[67] - Primarily due to reduced entertainment and travel expenses for sales and marketing personnel[67] Administrative Expenses Administrative expenses decreased by 2.1% to RMB 22.9 million, primarily due to reduced employee benefit expenses - Administrative expenses decreased by 2.1% to RMB 22.9 million[68] - Primarily due to reduced employee benefit expenses[68] Research and Development Expenses Research and development expenses decreased by 12.8% to RMB 28.6 million, primarily due to effective optimization of R&D processes and organization - Research and development expenses decreased by 12.8% to RMB 28.6 million[69] - Primarily due to effective optimization of R&D processes and organization[69] Net Impairment Loss on Financial Assets Net impairment loss on financial assets slightly increased by 0.7% to RMB 2.7 million - Net impairment loss on financial assets increased by 0.7% to RMB 2.7 million[70] Other Income Other income decreased by 42.9% to RMB 1.6 million, primarily due to reduced government grants and VAT refunds - Other income decreased by 42.9% to RMB 1.6 million[71] - Primarily due to reduced government grants and VAT refunds[71] Net Finance Costs Net finance costs were RMB 2.1 million, an increase from RMB 1.8 million in the prior period - Net finance costs were RMB 2.1 million (2024: RMB 1.8 million)[72] Income Tax Expense Income tax expense remained at RMB 0.2 million, consistent with the prior period - Income tax expense was RMB 0.2 million (2024: RMB 0.2 million)[73] Loss Attributable to Owners of the Company Loss attributable to owners of the company expanded to RMB 25.9 million, primarily due to increased telecom industry regulation in the first half of 2025, leading to reduced PaaS and some SaaS sales - Loss attributable to owners of the company was RMB 25.9 million (2024: RMB 6.4 million)[74] - The expanded loss was primarily due to increased telecom industry regulation in the first half of 2025, leading to reduced PaaS and some SaaS sales[74] Liquidity and Financial Resources The company maintains prudent financial management, actively monitoring liquidity, with cash and cash equivalents at RMB 94.6 million as of June 30, 2025, a 32.4% increase from year-end 2024, and total debt of RMB 150,939 thousands, slightly down from year-end 2024, with no significant contingent liabilities or capital commitments - Adopts prudent financial management policies, actively monitoring liquidity, and maintaining sufficient financial resources[75] Financial Policy The company adopts prudent financial management policies, actively monitoring its liquidity position, and regularly reviewing and adjusting its financial structure to ensure optimal allocation of financial resources - Adopts prudent financial management policies, actively monitoring liquidity position[75] - Regularly reviews and adjusts financial structure to respond to changing economic conditions and ensure optimal allocation of financial resources[75] Cash and Cash Equivalents As of June 30, 2025, cash and cash equivalents amounted to RMB 94.6 million, representing a 32.4% increase from December 31, 2024 - Cash and cash equivalents were RMB 94.6 million, an increase of 32.4% from December 31, 2024[76] Debt As of June 30, 2025, total debt was RMB 150,939 thousands, primarily comprising bank borrowings and lease liabilities, a slight decrease from year-end 2024 Debt as of June 30, 2025 | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Borrowings | 143,619 | 144,040 | | Lease liabilities | 7,320 | 15,224 | | Total | 150,939 | 159,264 | Contingent Liabilities and Capital Commitments As of June 30, 2025, the Group had no significant contingent liabilities or capital commitments - No significant contingent liabilities[78] - No capital commitments[79] Other Information This section covers additional information including employee remuneration, corporate governance, share repurchases, interim dividends, audit committee review, and post-balance sheet events Employee Remuneration and Employment Relationship As of June 30, 2025, the Group had 609 employees, with total employee costs of RMB 86.1 million, and the company has comprehensive training programs to ensure up-to-date employee skills - As of June 30, 2025, there were 609 employees[80] - Total employee costs were RMB 86.1 million (2024: RMB 98.3 million)[80] - Comprehensive training programs cover corporate culture, rights and responsibilities, team building, professional conduct, and work performance[80] Corporate Governance and Standard Code for Securities Transactions The company has adopted a standard code for directors' securities transactions, which all directors confirm compliance with; regarding corporate governance, the company deviates from the code requiring separation of Chairman and CEO roles, with Mr. Chen holding both, an arrangement the Board believes benefits the business and has sufficient safeguards - All directors confirmed compliance with the Standard Code for Securities Transactions by Directors[81] - The company deviates from Corporate Governance Code Provision C.2.1, with Mr. Chen serving as both Chairman and Chief Executive Officer[82] - The Board believes this dual role arrangement benefits business prospects and operational efficiency, with sufficient safeguards to ensure a balance of power on the Board[82][83] Share Repurchases During the reporting period, the company repurchased 376,000 shares for a total consideration of HKD 357,013.14 under its repurchase mandate, holding them as treasury shares - Under the repurchase mandate, the company is authorized to repurchase up to 10% of its issued share capital[84] - During the reporting period, the company repurchased 376,000 shares for a total consideration of HKD 357,013.14, holding them as treasury shares[85] Details of Share Repurchases During the Reporting Period | Month of Repurchase | Number of Shares Repurchased | Highest Price Paid Per Share (HKD) | Lowest Price Paid Per Share (HKD) | Total Consideration Paid (HKD) | | :--- | :--- | :--- | :--- | :--- | | January 2025 | 99,000 | 0.88 | 0.82 | 86,072.23 | | February 2025 | 30,500 | 1.16 | 0.86 | 32,042.69 | | March 2025 | – | – | – | – | | April 2025 | 87,000 | 1.01 | 0.85 | 81,907.86 | | May 2025 | 69,500 | 0.97 | 0.90 | 65,438.47 | | June 2025 | 90,000 | 1.14 | 0.90 | 91,551.89 | | July 2025 | 46,500 | 1.15 | 1.05 | 51,020.39 | | August 2025 (up to the latest practicable date) | – | – | – | – | | Total | 422,500 | | | 408,033.53 | Interim Dividends The Board does not recommend the payment of an interim dividend for the reporting period, consistent with the prior period - The Board does not recommend the payment of an interim dividend for the reporting period[87] Audit Committee Review The Audit Committee has reviewed the Group's unaudited condensed consolidated interim results, deeming them prepared in accordance with applicable accounting standards and listing rules, with sufficient disclosure and no objections to the accounting treatment - The Audit Committee has reviewed the interim results, finding them prepared in accordance with applicable accounting standards and listing rules, with sufficient disclosure and no objections to the accounting treatment[88] Material Post-Balance Sheet Events No material post-balance sheet events have occurred from the end of the reporting period up to the date of this announcement - No material post-balance sheet events have occurred from the end of the reporting period up to the date of this announcement[89] Publication of Announcement This announcement has been published on the HKEX website and the company's website, and the interim report will be dispatched in due course to shareholders who have elected to receive printed corporate communications - This announcement has been published on the HKEX website and the company's website[90] - The interim report will be dispatched in due course to shareholders who have elected to receive printed corporate communications[90]