易和国际控股(08659) - 2025 - 中期业绩

Company Information Company Basic Information and Governance Structure This section outlines Yik Wo International Holdings Limited's board members, committee compositions, compliance officer, authorized representatives, company secretary, auditor, principal bankers, registered office, and principal places of business - The Board of Directors includes Executive Directors Mr. Xu Youjiang (Chairman), Ms. Xu Liping, Mr. Zhang Yuansheng; and Independent Non-executive Directors Mr. Zhang Shize, Mr. Liu Dajin, Mr. Yang Jie[14] - Mr. Yang Jie was appointed as an Independent Non-executive Director, Chairman of the Remuneration Committee, and a member of the Nomination/Audit Committee on June 26, 2025, while Mr. Deng Zhihuang resigned on the same day[14][60] - The Company's Compliance Officer and Authorized Representative is Mr. Xu Youjiang, and the Company Secretary is Ms. Lei Meijia[14] - The auditor is Grant Thornton Hong Kong Limited[15] - The Company's registered office is in the Cayman Islands, its principal place of business in China is in Jinjiang City, Fujian Province, and its principal place of business in Hong Kong is in Kwun Tong, Kowloon[16] - The Company's stock code is 8659, and its website is www.yikwo.cn[16](index=16&type=chunk) Management Discussion and Analysis Business Review and Outlook The Group primarily engages in the design, development, production, and sale of disposable plastic fast-food boxes in China, alongside the development and operation of mobile applications and e-commerce platforms - The Group's main businesses are the design, development, production, and sale of disposable plastic fast-food boxes, and the development and operation of mobile applications and e-commerce platforms[18] - For the six months ended June 30, 2025, the Group's revenue decreased, primarily due to weak market demand for disposable plastic fast-food boxes[19] - Directors believe the popularization of environmentally friendly fast-food boxes, advancements in production technology, and competition from alternatives will impact the Group's future development, focusing on product safety, environmental protection, brand promotion, expanding sales channels, and product customization[20] - The Group completed the acquisition of 100% equity in Yizhen Film and Television for RMB 20,571,430 on April 27, 2022, aiming to capitalize on opportunities in China's film industry[21] - The Group acquired 100% equity in Beijing Youpin Hui on June 1, 2022, and launched the "Yik Wo Tian Xia" e-commerce platform in July 2022, selling daily necessities, cosmetics, home appliances, and agricultural products[22] - On January 21, 2025, the Group signed a memorandum of understanding for the potential acquisition of a 30% equity stake in strategic supplier Zhenpin Network, aiming to expand revenue streams and stabilize the e-commerce platform's supply chain[23] Financial Review For the six months ended June 30, 2025, the Group's revenue, gross profit, and profit for the period all recorded significant declines, mainly due to reduced sales orders for disposable plastic fast-food boxes and decreased e-commerce segment revenue Financial Performance (RMB thousands) | Indicator | June 30, 2025 (RMB thousands) | June 30, 2024 (RMB thousands) | Change (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | 109,517 | 155,828 | (46,311) | (29.7%) | | Cost of sales | (78,326) | (109,627) | 31,301 | (28.6%) | | Gross profit | 31,191 | 46,201 | (15,010) | (32.5%) | | Selling expenses | (6,220) | (8,850) | 2,630 | (30.3%) | | Administrative and other operating expenses | (12,471) | (12,734) | 263 | (1.6%) | | Finance costs | (86) | (140) | 54 | (38.6%) | | Income tax expense | (4,102) | (6,992) | 2,890 | (41.3%) | | Profit for the period | 8,951 | 18,765 | (9,814) | (52.3%) | - Overall gross profit margin decreased from 29.6% in the same period of 2024 to 28.5% in 2025[27] - Administrative and other operating expenses decreased primarily due to reduced staff costs[29] - Income tax expense decreased mainly due to lower profit for the period, calculated at China's enterprise income tax rate of 25%[31] GEM Listing and Proposed Transfer of Listing The Company's shares were listed on GEM of the Stock Exchange on July 13, 2020. An application for transfer to the Main Board was submitted on May 31, 2023, which lapsed automatically after six months, and a new application was filed on May 9, 2024, under the simplified transfer mechanism - The Company's shares were listed on GEM of the Stock Exchange on July 13, 2020, raising a net amount of HKD 22.8 million (approximately RMB 20.4 million) through a share offer[33] - The GEM to Main Board transfer application submitted on May 31, 2023, has automatically lapsed[33] - The Company formally resubmitted an application to the Stock Exchange on May 9, 2024, for transfer to the Main Board under Chapter 9B of the Main Board Listing Rules using the simplified transfer mechanism[34] Liquidity and Financial Resources As of June 30, 2025, the Group's net current assets, current ratio, and cash position all improved, primarily due to a reduction in trade and other payables and net cash generated from operating activities Liquidity and Financial Resources (RMB millions) | Indicator | June 30, 2025 (RMB millions) | December 31, 2024 (RMB millions) | Change (RMB millions) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Net current assets | 261.5 | 247.7 | 13.8 | 5.6% | | Current ratio | 8.7 | 6.1 | 2.6 | 42.6% | | Gearing ratio | 11.5% | 16.1% | (4.6%) | (28.6%) | | Bank balances and cash | 213.9 | 206.1 | 7.8 | 3.8% | - The increase in net current assets was mainly due to a decrease in trade and other payables[35] - The increase in bank balances and cash was primarily attributable to net cash generated from operating activities[37] - As of June 30, 2025, and December 31, 2024, the Group had no borrowings[38] - Lease liabilities decreased from approximately RMB 4.2 million as of December 31, 2024, to approximately RMB 2.8 million as of June 30, 2025[39] Capital Structure Since its GEM listing, the Group's capital structure has not undergone significant changes, with equity solely comprising ordinary shares - From GEM listing to June 30, 2025, the Group's capital structure has not undergone significant changes, with share capital consisting solely of ordinary shares[40] - As of June 30, 2025, the issued share capital was approximately HKD 7.5 million, with 748,482,760 ordinary shares issued (par value of HKD 0.01 per share)[40][115] - The Group has consideration payable of approximately RMB 6.2 million, representing promissory notes issued for the acquisition of 100% equity in Yizhen Film and Television, which are interest-free and repayable upon the film's release[40][114] Segment Information The Directors have categorized the Group's operations into two operating segments: (i) design, development, production, and sale of disposable plastic fast-food boxes; and (ii) operation of mobile applications and e-commerce platforms - The Group has two operating segments: disposable plastic fast-food box business and mobile application and e-commerce platform business[41] Future Plans for Material Investments and Capital Assets As of June 30, 2025, the Group had no plans for any material investments and capital assets - As of June 30, 2025, the Group had no plans for any material investments and capital assets[42] Material Investments, Acquisitions, and Disposals of Subsidiaries For the six months ended June 30, 2025, the Group did not undertake any material investments, acquisitions, or disposals that would constitute discloseable transactions under the GEM Listing Rules - During the reporting period, the Group did not undertake any material investments, acquisitions, or disposals that would constitute discloseable transactions under the GEM Listing Rules[44] Pledge of Group Assets As of June 30, 2025, the Group had no pledge of any assets - As of June 30, 2025, the Group had no pledge of any assets[45] Contingent Liabilities As of June 30, 2025, the Group had no contingent liabilities - As of June 30, 2025, the Group had no contingent liabilities[46] Exchange Rate Fluctuation Risk The Group primarily operates in China, with most transactions settled in RMB, thus incurring no significant foreign exchange risk during the year and not employing any financial instruments for hedging - The Group primarily operates in China, with transactions settled in RMB, thus incurring no significant foreign exchange risk during the year[47] - For the six months ended June 30, 2025, the Group did not use any financial instruments for hedging purposes[47] Employees and Remuneration Policy As of June 30, 2025, the Group's total number of employees was 192, a decrease from 203 as of December 31, 2024 Employee Information and Costs | Indicator | June 30, 2025 | December 31, 2024 | Change | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Total number of employees | 192 persons | 203 persons | (11 persons) | (5.4%) | | Staff costs (RMB millions) | 9.6 | 9.7 | (0.1) | (1.0%) | - Remuneration is determined with reference to fixed salaries and an appraisal system as the basis for salary reviews and promotion decisions[48] Disclosure of Interests This section discloses the long positions of Directors and Chief Executives, as well as substantial shareholders, in the Company's shares Directors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares, and Debentures As of June 30, 2025, Director Mr. Xu Youjiang directly and through controlled corporations held a total long position of 50.23% in the Company's shares, with his spouse Ms. Xu Liping also deemed to hold the same percentage due to spousal interest Directors' Interests in Shares | Director Name | Capacity/Nature of Interest | Number and Class of Securities | Long/Short Position | Approximate Percentage | | :--- | :--- | :--- | :--- | :--- | | Mr. Xu Youjiang | Interest in controlled corporation | 301,500,000 ordinary shares | Long position | 40.28% | | | Beneficial owner | 74,482,760 ordinary shares | Long position | 9.95% | | | Total | 375,982,760 ordinary shares | Long position | 50.23% | | Ms. Xu Liping | Spouse's interest | 375,982,760 ordinary shares | Long position | 50.23% | Substantial Shareholders' and Other Persons' Interests and Short Positions in Shares, Underlying Shares, and Debentures As of June 30, 2025, substantial shareholders included Prize Investment Limited (40.28%), Mr. Xu Youjiang (9.95%), Merit Winner Limited (9.02%), Mr. Xu Wenjie (9.02%), Ms. Xu Meiya (9.02%), Youpin Hui Investment (8.55%), and Mr. Hu Kun (8.55%) Substantial Shareholders' Interests in Shares | Name | Capacity | Number and Class of Securities | Long/Short Position | Approximate Percentage | | :--- | :--- | :--- | :--- | :--- | | Prize Investment Limited | Beneficial owner | 301,500,000 ordinary shares | Long position | 40.28% | | Mr. Xu Youjiang | Beneficial owner | 74,482,760 ordinary shares | Long position | 9.95% | | | Total | 375,982,760 ordinary shares | Long position | 50.23% | | Merit Winner Limited | Beneficial owner | 67,500,000 ordinary shares | Long position | 9.02% | | Mr. Xu Wenjie | Interest in controlled corporation | 67,500,000 ordinary shares | Long position | 9.02% | | Ms. Xu Meiya | Spouse's interest | 67,500,000 ordinary shares | Long position | 9.02% | | Youpin Hui Investment | Beneficial owner | 64,000,000 ordinary shares | Long position | 8.55% | | Mr. Hu Kun | Interest in controlled corporation | 64,000,000 ordinary shares | Long position | 8.55% | Competition and Conflicts of Interest For the six months ended June 30, 2025, none of the Directors, controlling shareholders, or their associates owned any business or interest that competed or might compete with the Group's business, nor were there any other conflicts of interest - During the reporting period, none of the Directors, controlling shareholders, or their associates owned any business or interest that constituted or might constitute competition with the Group's business, nor were there any other conflicts of interest[53] Purchase, Sale or Redemption of the Company's Listed Securities For the six months ended June 30, 2025, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities - During the reporting period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[54] Corporate Governance Code The Company has consistently complied with the applicable code provisions of the Corporate Governance Code set out in Appendix C1 to the GEM Listing Rules - The Company has consistently complied with the applicable code provisions of the Corporate Governance Code set out in Appendix C1 to the GEM Listing Rules[55] - The roles of Chairman (Mr. Xu Youjiang) and Chief Executive Officer (Ms. Xu Liping) are segregated and performed by different individuals[55] Directors' Securities Transactions The Group has adopted a code of conduct for Directors' securities transactions, with terms no less stringent than those required by the GEM Listing Rules - The Group has adopted a code of conduct for Directors' securities transactions, and there were no breaches during the reporting period[56] Dividends The Board does not recommend the payment of any interim dividend for the six months ended June 30, 2025 - The Board does not recommend the payment of any interim dividend for the six months ended June 30, 2025 (2024: RMB zero)[57] Share Option Scheme As of June 30, 2025, the Company had no share option scheme - As of June 30, 2025, the Company had no share option scheme[58] Material Events After Reporting Period The Board is not aware of any material events requiring disclosure that have occurred from June 30, 2025, up to the date of this report - The Board is not aware of any material events requiring disclosure that have occurred from June 30, 2025, up to the date of this report[59] Changes in Directors' Information Mr. Yang Jie was appointed as an Independent Non-executive Director, Chairman of the Remuneration Committee, and a member of the Nomination/Audit Committee on June 26, 2025 - Mr. Yang Jie was appointed as an Independent Non-executive Director, Chairman of the Remuneration Committee, and a member of the Nomination/Audit Committee on June 26, 2025[60] Audit Committee The Audit Committee comprises three independent non-executive Directors, with Mr. Zhang Shize as Chairman - The Audit Committee comprises three independent non-executive Directors (Mr. Zhang Shize, Mr. Liu Dajin, Mr. Yang Jie), with Mr. Zhang Shize serving as Chairman[61] - The Audit Committee's primary responsibilities include reviewing and overseeing financial reporting, audit processes, internal control procedures, and corporate governance[61] - The Audit Committee has reviewed the Group's unaudited condensed consolidated financial statements for the six months ended June 30, 2025[62] Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income For the six months ended June 30, 2025, the Group's revenue was RMB 109,517 thousand, a 29.7% decrease from RMB 155,828 thousand in the prior year. Profit for the period was RMB 8,951 thousand, a significant 52.3% decrease from RMB 18,765 thousand in the prior year. Basic and diluted earnings per share were RMB 1.20 cents Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (RMB thousands) | Indicator | June 30, 2025 (RMB thousands) | June 30, 2024 (RMB thousands) | Change (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | 109,517 | 155,828 | (46,311) | (29.7%) | | Gross profit | 31,191 | 46,201 | (15,010) | (32.5%) | | Operating profit | 13,139 | 25,897 | (12,758) | (49.3%) | | Profit before income tax | 13,053 | 25,757 | (12,704) | (49.3%) | | Profit for the period | 8,951 | 18,765 | (9,814) | (52.3%) | | Total comprehensive income for the period | 8,953 | 18,802 | (9,849) | (52.4%) | | Basic and diluted earnings per share | RMB 1.20 cents | RMB 2.51 cents | (RMB 1.31 cents) | (52.2%) | Condensed Consolidated Statement of Financial Position Condensed Consolidated Statement of Financial Position As of June 30, 2025, the Group's net assets were RMB 297,398 thousand, an increase from RMB 288,445 thousand as of December 31, 2024. Net current assets increased to RMB 261,546 thousand, primarily due to a reduction in trade and other payables Condensed Consolidated Statement of Financial Position (RMB thousands) | Indicator | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Non-current assets | 37,773 | 42,947 | (5,174) | (12.0%) | | Current assets | 295,688 | 296,300 | (612) | (0.2%) | | Current liabilities | 34,142 | 48,593 | (14,451) | (29.7%) | | Net current assets | 261,546 | 247,707 | 13,839 | 5.6% | | Total assets less current liabilities | 299,319 | 290,654 | 8,665 | 3.0% | | Non-current liabilities | 1,921 | 2,209 | (288) | (13.0%) | | Net assets | 297,398 | 288,445 | 8,953 | 3.1% | | Total equity | 297,398 | 288,445 | 8,953 | 3.1% | - Net current assets increased primarily due to a decrease in trade and other payables[35][65] Condensed Consolidated Statement of Changes in Equity Condensed Consolidated Statement of Changes in Equity For the six months ended June 30, 2025, the Group's total equity increased from RMB 288,445 thousand at the beginning of the period to RMB 297,398 thousand, mainly attributable to profit for the period of RMB 8,951 thousand and an increase in exchange reserve of RMB 2 thousand Condensed Consolidated Statement of Changes in Equity (RMB thousands) | Indicator | June 30, 2025 (RMB thousands) | January 1, 2024 (RMB thousands) | Change (RMB thousands) | | :--- | :--- | :--- | :--- | | Total equity at beginning of period | 288,445 | 261,179 | 27,266 | | Profit for the period | 8,951 | 18,765 | (9,814) | | Other comprehensive income (exchange differences) | 2 | 37 | (35) | | Total equity at end of period | 297,398 | 279,981 | 17,417 | - The increase in total equity was mainly contributed by profit for the period of RMB 8,951 thousand[66] Condensed Consolidated Statement of Cash Flows Condensed Consolidated Statement of Cash Flows For the six months ended June 30, 2025, the Group's net increase in cash and cash equivalents was RMB 7,713 thousand, with an ending balance of RMB 213,863 thousand Condensed Consolidated Statement of Cash Flows (RMB thousands) | Indicator | June 30, 2025 (RMB thousands) | June 30, 2024 (RMB thousands) | Change (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Net cash generated from operating activities | 11,783 | 7,617 | 4,166 | 54.7% | | Net cash used in investing activities | (2,531) | (2,400) | (131) | (5.5%) | | Net cash used in financing activities | (1,539) | (1,697) | 158 | 9.3% | | Net increase in cash and cash equivalents | 7,713 | 3,520 | 4,193 | 119.1% | | Cash and cash equivalents at end of period | 213,863 | 168,790 | 45,073 | 26.7% | - Net cash generated from operating activities significantly increased by 54.7% year-on-year, reaching RMB 11,783 thousand[68] Notes to the Interim Financial Report 1. General Information Yik Wo International Holdings Limited, incorporated in the Cayman Islands, primarily engages in the design, development, production, and sale of disposable plastic fast-food boxes in China, and the operation of e-commerce platforms selling daily necessities and other household products - The Company was incorporated in the Cayman Islands on December 13, 2018, with primary businesses in disposable plastic fast-food boxes and e-commerce platform operations[69] - The Group's ultimate controlling party is Mr. Xu Youjiang[70] 2. Basis of Preparation The condensed consolidated interim financial information is prepared in accordance with the GEM Listing Rules of the Stock Exchange of Hong Kong Limited and Hong Kong Accounting Standard 34, presented in RMB thousands, and is unaudited - The condensed consolidated interim financial information is prepared in accordance with the GEM Listing Rules and Hong Kong Accounting Standard 34, and is unaudited[71][72] - The financial information is presented in RMB thousands and was approved for publication by the Board of Directors on August 28, 2025[72] 3. Significant Accounting Policies The condensed consolidated interim financial statements adopt the same accounting policies as the consolidated financial statements for the year ended December 31, 2024, and have adopted new and revised Hong Kong Financial Reporting Standards effective from January 1, 2025, with no material impact on current period results or financial position - The financial statements adopt the same accounting policies as the 2024 annual consolidated financial statements and have adopted new and revised Hong Kong Financial Reporting Standards effective from January 1, 2025[73][74] - The adoption of new and revised Hong Kong Financial Reporting Standards has no material impact on the preparation and presentation of the results and financial position for the current and prior periods[75] 4. Estimates and Judgements The preparation of the condensed consolidated interim financial information involves management making accounting judgements, estimates, and assumptions, where actual results may differ from these estimates - The preparation of financial information involves management making accounting judgements, estimates, and assumptions, and actual results may differ from these estimates[77] - The key sources of significant judgements and estimation uncertainties applied are the same as those used in the preparation of the 2024 annual consolidated financial statements[77] 5. Segment Information The Group has two operating segments: disposable plastic fast-food boxes and e-commerce - The chief operating decision-maker has identified the Group's two main product and service lines as operating segments: disposable plastic fast-food boxes and e-commerce[78] Segment Performance for the Six Months Ended June 30, 2025 (RMB thousands) | Segment | Revenue (RMB thousands) | Segment Results (RMB thousands) | | :--- | :--- | :--- | | Disposable plastic fast-food boxes | 108,278 | 15,984 | | E-commerce | 1,239 | (2,013) | | Total | 109,517 | 13,971 | Segment Performance for the Six Months Ended June 30, 2024 (RMB thousands) | Segment | Revenue (RMB thousands) | Segment Results (RMB thousands) | | :--- | :--- | :--- | | Disposable plastic fast-food boxes | 143,720 | 27,236 | | E-commerce | 12,108 | 1,123 | | Total | 155,828 | 28,359 | - The e-commerce segment recorded a loss of RMB 2,013 thousand in the first half of 2025, compared to a profit of RMB 1,123 thousand in the same period last year[80] 6. Revenue The Group's revenue is entirely derived from China, primarily from disposable plastic fast-food boxes and non-branded e-commerce products Disaggregation of Revenue from Contracts with Customers Revenue primarily originates from "Jazz Rabbit" branded products, non-branded disposable plastic fast-food boxes, and non-branded e-commerce products Revenue Disaggregation (RMB thousands) | Brand/Nature | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Brand: | | | | | | "Jazz Rabbit" branded products | 97,644 | 133,038 | (35,394) | (26.6%) | | Non-branded products | 10,634 | 10,682 | (48) | (0.4%) | | Disposable plastic fast-food boxes | 108,278 | 143,720 | (35,442) | (24.7%) | | Non-branded e-commerce | 1,239 | 12,108 | (10,869) | (89.8%) | | Total Revenue | 109,517 | 155,828 | (46,311) | (29.7%) | | Nature: | | | | | | Regular products | 67,570 | 123,119 | (55,549) | (45.1%) | | Customized products | 39,740 | 18,904 | 20,836 | 110.2% | - Revenue from customized products increased by 110.2% year-on-year, indicating growing market demand for personalized products[84] Geographical Information For the six months ended June 30, 2025 and 2024, all of the Group's revenue and non-current assets were located in China - The Group's revenue and non-current assets are entirely located in China[85] 7. Other Income For the six months ended June 30, 2025, other income was RMB 639 thousand, a decrease from RMB 1,280 thousand in the prior year, primarily including bank interest income and interest income related to film production investments Other Income (RMB thousands) | Category | June 30, 2025 (RMB thousands) | June 30, 2024 (RMB thousands) | Change (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Bank interest income | 94 | 155 | (61) | (39.4%) | | Interest income (Note 16) | 514 | 514 | 0 | 0.0% | | Others | 31 | 611 | (580) | (95.0%) | | Total | 639 | 1,280 | (641) | (50.1%) | - Other income decreased by 50.1% year-on-year, mainly due to a significant reduction in the "Others" category income[86] 8. Finance Costs For the six months ended June 30, 2025, finance costs were approximately RMB 86 thousand, primarily from interest expenses on lease arrangements, a decrease from RMB 140 thousand in the prior year Finance Costs (RMB thousands) | Category | June 30, 2025 (RMB thousands) | June 30, 2024 (RMB thousands) | Change (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Interest expense on lease arrangements | 86 | 140 | (54) | (38.6%) | 9. Profit Before Income Tax Profit before income tax is arrived at after deducting depreciation, amortization of intangible assets, cost of inventories, research and development costs, loss on disposal of property, plant and equipment, transfer of listing and related expenses, and staff costs Profit Before Income Tax Adjustments (RMB thousands) | Item | June 30, 2025 (RMB thousands) | June 30, 2024 (RMB thousands) | Change (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Depreciation | 6,131 | 7,047 | (916) | (13.0%) | | Amortization of intangible assets | 1,304 | 1,533 | (229) | (14.9%) | | Cost of inventories recognized as expense | 66,537 | 86,711 | (20,174) | (23.3%) | | Research and development costs | 5,461 | 4,960 | 501 | 10.1% | | Loss on disposal of property, plant and equipment | 364 | 31 | 333 | 1074.2% | | Transfer of listing and related expenses | 1,371 | 983 | 388 | 39.5% | | Staff costs | 9,577 | 9,669 | (92) | (1.0%) | - Research and development costs increased by 10.1% year-on-year, indicating increased investment in technological innovation by the Group[88] - Loss on disposal of property, plant and equipment significantly increased from RMB 31 thousand to RMB 364 thousand[88] 10. Income Tax Expense The Company did not generate assessable profits, thus no provision for profits tax was made. Income tax expense primarily arises from Chinese subsidiaries, calculated at the applicable tax rate of 25%, amounting to RMB 4,102 thousand for the six months ended June 30, 2025, a 41.4% decrease year-on-year - The Company did not generate assessable profits, thus no provision for profits tax was made[89] - China enterprise income tax is provided at an applicable tax rate of 25% on the assessable profits of the Company's Chinese subsidiaries[90] Income Tax Expense (RMB thousands) | Category | June 30, 2025 (RMB thousands) | June 30, 2024 (RMB thousands) | Change (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Provision for China enterprise income tax | 4,102 | 6,992 | (2,890) | (41.3%) | 11. Dividends The Directors do not recommend the payment of an interim dividend for the six months ended June 30, 2025 - The Directors do not recommend the payment of an interim dividend for the six months ended June 30, 2025 (2024: nil)[92] 12. Earnings Per Share For the six months ended June 30, 2025, basic and diluted earnings per share were RMB 1.20 cents, a decrease from RMB 2.51 cents in the prior year Earnings Per Share (RMB thousands, except per share data) | Indicator | June 30, 2025 | June 30, 2024 | Change | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Profit for the period attributable to equity holders of the Company | 8,951 | 18,765 | (9,814) | (52.3%) | | Number of ordinary shares (thousands) | 748,483 | 748,483 | 0 | 0.0% | | Basic and diluted earnings per share | RMB 1.20 cents | RMB 2.51 cents | (RMB 1.31 cents) | (52.2%) | - Diluted earnings per share are equal to basic earnings per share as there were no potential ordinary shares issued[94] 13. Property, Plant and Equipment During the interim period, the Group incurred approximately RMB 2,625 thousand for the acquisition of property, plant and equipment and disposed of certain plant and equipment with a total carrying amount of RMB 364 thousand, resulting in a loss on disposal Property, Plant and Equipment Activities (RMB thousands) | Item | June 30, 2025 (RMB thousands) | June 30, 2024 (RMB thousands) | Change (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Purchase of property, plant and equipment | 2,625 | 2,555 | 70 | 2.7% | | Carrying amount of property, plant and equipment disposed | 364 | 31 | 333 | 1074.2% | | Loss on disposal | 364 | 31 | 333 | 1074.2% | - Loss on disposal of property, plant and equipment significantly increased, reflecting potential challenges in asset disposal[95] 14. Lease Liabilities As of June 30, 2025, the Group's total lease liabilities amounted to RMB 2,788 thousand, a decrease from RMB 4,241 thousand as of December 31, 2024 Lease Liabilities (RMB thousands) | Category | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Current lease liabilities | 867 | 2,032 | (1,165) | (57.3%) | | Non-current lease liabilities | 1,921 | 2,209 | (288) | (13.0%) | | Total | 2,788 | 4,241 | (1,453) | (34.3%) | - The decrease in lease liabilities reflects the repayment or expiry of some lease agreements[96] - Lease agreements with Hengsheng Toys (controlled by Mr. Xu Wenjie, brother of controlling shareholder Mr. Xu Youjiang) have a three-year term, renewable for three years, up to a maximum of twenty years[96][97] 15. Intangible Assets As of June 30, 2025, the Group's net book value of intangible assets was RMB 2,399 thousand, a decrease from RMB 3,703 thousand as of December 31, 2024 Intangible Assets (RMB thousands) | Category | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Mobile application development costs | 335 | 1,151 | (816) | (70.9%) | | Specialized technical patents | 2,064 | 2,552 | (488) | (19.1%) | | Trademarks | 0 | 0 | 0 | 0.0% | | Total | 2,399 | 3,703 | (1,304) | (35.2%) | - The decrease in net book value of intangible assets was mainly due to the amortization of mobile application development costs and specialized technical patents[99] 16. Financial Assets at Fair Value Through Profit or Loss As of June 30, 2025, the Group's financial assets at fair value through profit or loss amounted to RMB 20,416 thousand, primarily investments in film production - As of June 30, 2025, investments in film production amounted to RMB 20,416 thousand, classified as financial assets at fair value through profit or loss[100][103][106] - The acquisition of Yizhen Film and Television (the film project owner) has been completed and includes a profit guarantee[101][104][105] - Mr. Xu Youjiang agreed to pay a penalty interest of 5% per annum on the investment amount, with RMB 514 thousand accrued and recognized as other income for the six months ended June 30, 2025[105] - Directors expect the film to be released in 2025[105] 17. Inventories As of June 30, 2025, the Group's total inventories amounted to RMB 9,628 thousand, a slight increase from RMB 9,106 thousand as of December 31, 2024, mainly due to an increase in finished goods Inventories (RMB thousands) | Category | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Raw materials | 3,889 | 4,966 | (1,077) | (21.7%) | | Finished goods | 5,739 | 4,140 | 1,599 | 38.6% | | Total | 9,628 | 9,106 | 522 | 5.7% | - Finished goods inventory increased by 38.6%, while raw materials inventory decreased by 21.7%[106] 18. Trade and Other Receivables As of June 30, 2025, the Group's total trade and other receivables amounted to RMB 51,781 thousand, a decrease from RMB 60,635 thousand as of December 31, 2024 Trade and Other Receivables (RMB thousands) | Category | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Trade receivables | 48,228 | 59,975 | (11,747) | (19.6%) | | Prepayments and other receivables | 3,553 | 660 | 2,893 | 438.3%) | | Total | 51,781 | 60,635 | (8,854) | (14.6%) | Trade Receivables Trade receivables are based on invoice dates, with a typical credit period of 60 days Aging Analysis of Trade Receivables (RMB thousands) | Aging | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Within 30 days | 17,666 | 31,552 | (13,886) | (44.0%) | | 31 to 60 days | 22,318 | 27,628 | (5,310) | (19.2%) | | 61 to 90 days | 8,244 | 795 | 7,449 | 937.0% | | Total | 48,228 | 59,975 | (11,747) | (19.6%) | - The credit period for trade receivables is typically 60 days[108] - Overdue trade receivables aged 61-90 days significantly increased by 937.0%, indicating a potential rise in collection risk[109] 19. Cash and Cash Equivalents As of June 30, 2025, the Group's bank balances and cash amounted to approximately RMB 213,725 thousand, primarily held in banks in China - As of June 30, 2025, bank balances and cash amounted to RMB 213,725 thousand, primarily held in Chinese banks[111] - RMB is not a freely convertible currency, and its remittance out of China is subject to foreign exchange control rules[111] 20. Trade and Other Payables As of June 30, 2025, the Group's total trade and other payables amounted to RMB 31,295 thousand, a significant decrease from RMB 43,155 thousand as of December 31, 2024 Trade and Other Payables (RMB thousands) | Category | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Trade payables | 17,126 | 27,865 | (10,739) | (38.5%) | | Accrued expenses and other payables | 14,169 | 15,290 | (1,121) | (7.3%) | | Total | 31,295 | 43,155 | (11,860) | (27.5%) | - Trade payables significantly decreased by 38.5%, reflecting payments to suppliers or reduced purchasing activities[112] - Consideration payable amounted to RMB 6,171 thousand, representing promissory notes issued for the acquisition of 100% equity in Yizhen Film and Television, which are interest-free and repayable upon the film's release[114] Trade Payables The credit period granted by suppliers to the Group ranges from 30 to 60 days Aging Analysis of Trade Payables (RMB thousands) | Aging | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Within 30 days | 15,089 | 18,089 | (3,000) | (16.6%) | | 31 to 60 days | 2,037 | 9,776 | (7,739) | (79.2%) | | Total | 17,126 | 27,865 | (10,739) | (38.5%) | - Suppliers grant the Group credit periods ranging from 30 to 60 days[113] 21. Share Capital As of June 30, 2025, the Company's authorized share capital consisted of 5,000,000,000 ordinary shares, with 748,482,760 ordinary shares issued and fully paid, each with a par value of HKD 0.01 Share Capital (RMB thousands) | Category | Number of Shares | Amount (RMB thousands) | | :--- | :--- | :--- | | Authorized share capital | 5,000,000,000 | 45,147 | | Issued and fully paid share capital | 748,482,760 | 6,667 | - The par value of the Company's ordinary shares is HKD 0.01 per share[115] 22. Related Party Transactions The Group had key management personnel remuneration transactions with related parties during the period Key Management Personnel Remuneration For the six months ended June 30, 2025, total key management personnel remuneration was RMB 488 thousand, largely consistent with RMB 486 thousand in the prior year Key Management Personnel Remuneration (RMB thousands) | Category | June 30, 2025 (RMB thousands) | June 30, 2024 (RMB thousands) | Change (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Salaries, allowances and benefits | 479 | 477 | 2 | 0.4% | | Retirement scheme contributions | 9 | 9 | 0 | 0.0% | | Total | 488 | 486 | 2 | 0.4% |