福田股份(08196) - 2025 - 中期业绩

Announcement Overview GEM Characteristics and Disclaimer The report clarifies the GEM market's high-risk nature for SMEs, urging investor caution, and states the Stock Exchange disclaims responsibility for the announcement, with directors fully accountable - The GEM market is positioned as a listing platform for high-risk small and medium-sized companies, requiring investors to understand potential risks and invest cautiously[3] - Hong Kong Exchanges and Clearing Limited and the Stock Exchange are not responsible for this announcement's content, with the company's directors fully accountable for its accuracy and completeness[3] Financial Highlights For the six months ended June 30, 2025, revenue surged by 164.8% to RMB 47.22 million, gross profit by 42.5% to RMB 9.13 million, and the company achieved a profit of RMB 1.99 million, reversing last year's loss, with no interim dividend recommended Financial Highlights for H1 2025 | Metric | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 47,223 | 17,832 | +164.8% | | Gross Profit | 9,125 | 6,405 | +42.5% | | Profit/(Loss) Attributable to Owners | 1,996 | (814) | Turned to Profit | - The Board does not recommend paying an interim dividend for the period[4] Unaudited Condensed Consolidated Financial Statements Condensed Consolidated Statement of Comprehensive Income For the six months ended June 30, 2025, the company's revenue significantly increased to RMB 47,223 thousands, gross profit rose to RMB 9,125 thousands, and a profit of RMB 1,996 thousands was achieved, reversing the prior year's loss, with basic and diluted earnings per share at RMB 0.059 Key Data from Condensed Consolidated Statement of Comprehensive Income | Metric | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | | :--- | :--- | :--- | | Revenue | 47,223 | 17,832 | | Cost of Sales | (38,098) | (11,427) | | Gross Profit | 9,125 | 6,405 | | Other Income and Gains | 3,253 | 2,414 | | Selling and Distribution Expenses | (1,293) | (615) | | Administrative Expenses | (8,705) | (8,436) | | Finance Costs | (254) | – | | Profit/(Loss) Before Tax | 2,126 | (232) | | Income Tax Expense | (130) | (582) | | Profit/(Loss) for the Period | 1,996 | (814) | | Total Comprehensive Income/(Loss) for the Period | 5,618 | (858) | | Basic and Diluted Earnings/(Loss) Per Share (RMB) | 0.059 | (0.021) | Condensed Consolidated Statement of Financial Position As of June 30, 2025, the company's total non-current assets were RMB 61,461 thousands, and total current assets were RMB 154,147 thousands, resulting in net current assets of RMB 34,308 thousands after current liabilities of RMB 119,839 thousands, with net assets increasing to RMB 81,200 thousands Key Data from Condensed Consolidated Statement of Financial Position | Metric | June 30, 2025 (RMB thousands) | Dec 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Non-current Assets | 61,461 | 59,610 | | Current Assets | 154,147 | 166,280 | | Current Liabilities | 119,839 | 137,902 | | Net Current Assets | 34,308 | 28,378 | | Total Assets Less Current Liabilities | 95,769 | 87,988 | | Total Non-current Liabilities | 14,569 | 14,452 | | Net Assets | 81,200 | 73,536 | | Total Equity | 81,200 | 73,536 | Condensed Consolidated Statement of Changes in Equity For the six months ended June 30, 2025, the company's total equity increased from RMB 73,536 thousands on January 1, 2025, to RMB 81,200 thousands, primarily driven by a profit of RMB 1,996 thousands, exchange differences on foreign operations of RMB 3,622 thousands, new share placement of RMB 1,395 thousands, and share-based payments of RMB 651 thousands Key Data from Condensed Consolidated Statement of Changes in Equity | Metric | Jan 1, 2025 (RMB thousands) | June 30, 2025 (RMB thousands) | | :--- | :--- | :--- | | Total Equity | 73,536 | 81,200 | | Profit for the Period | – | 1,996 | | Exchange Differences on Translation of Foreign Operations | – | 3,622 | | Placement of New Shares under General Mandate | – | 1,395 | | Share-based Payments | – | 651 | Condensed Consolidated Statement of Cash Flows For the six months ended June 30, 2025, net cash used in operating activities was RMB (13,392) thousands, net cash used in investing activities was RMB (2,028) thousands, and net cash from financing activities was RMB 1,512 thousands, resulting in a decrease in cash and cash equivalents at period-end to RMB 62,047 thousands Key Data from Condensed Consolidated Statement of Cash Flows | Metric | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | (13,392) | (3,613) | | Net Cash Used in Investing Activities | (2,028) | (3) | | Net Cash From Financing Activities | 1,512 | – | | Net Decrease in Cash and Cash Equivalents | (13,908) | (3,616) | | Cash and Cash Equivalents at End of Period | 62,047 | 49,700 | Notes to the Condensed Consolidated Financial Statements General Information and Basis of Preparation The company, registered in the Cayman Islands with its principal place of business in Hong Kong, primarily engages in environmental protection (wastewater treatment, soil remediation, equipment trading) and online advertising services, with its interim condensed consolidated financial statements prepared under HKAS 34 and GEM Listing Rules, and reviewed by the Audit Committee - The Group primarily engages in environmental protection businesses (wastewater treatment, soil remediation, equipment trading) and provides online advertising and related services[10] - The interim condensed consolidated financial statements are prepared in accordance with HKAS 34 and the GEM Listing Rules, and have been reviewed by the Audit Committee[11][12] Operating Segment Information The Group's operations are divided into five reportable segments: EPC projects, construction projects, equipment projects, service concession arrangements, and other segments (including O&M services and online advertising), with EPC project revenue significantly increasing to RMB 28,242 thousands in H1 2025, becoming the primary revenue source, while service concession arrangement revenue slightly decreased - The Group's operating segments include EPC projects, construction projects, equipment projects, service concession arrangements, and others (O&M, online advertising)[13][15] Segment Revenue and Results for H1 2025 | Segment | H1 2025 Revenue (RMB thousands) | H1 2024 Revenue (RMB thousands) | H1 2025 Results (RMB thousands) | H1 2024 Results (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | | EPC Projects | 28,242 | 570 | 8,421 | 90 | | Construction Projects | – | 144 | – | 4 | | Equipment Projects | 28 | 4,147 | 11 | 4,086 | | Service Concession Arrangements | 10,157 | 11,240 | 369 | 1,283 | | Others | 8,796 | 1,731 | 324 | 942 | | Total | 47,223 | 17,832 | 9,125 | 6,405 | - EPC project revenue significantly increased in H1 2025, becoming the main growth driver[17] Revenue, Other Income and Gains Analysis Total revenue for H1 2025 was RMB 47,223 thousands, with EPC projects contributing the largest share at RMB 28,242 thousands, a substantial increase from the prior year, while other income and gains totaled RMB 3,253 thousands, primarily from increased bank interest and rental income Revenue and Other Income Analysis for H1 2025 | Category | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | | :--- | :--- | :--- | | Revenue | | | | EPC Projects | 28,242 | 570 | | Construction Projects | – | 144 | | Equipment Projects | 28 | 4,147 | | Service Concession Arrangements | 10,157 | 11,240 | | Others | 8,796 | 1,731 | | Total Revenue | 47,223 | 17,832 | | Other Income | | | | Bank Interest Income | 817 | 507 | | Rental Income | 2,436 | 1,649 | | Exchange Gains | – | 258 | | Total Other Income | 3,253 | 2,414 | - EPC project revenue significantly increased year-on-year, serving as the primary driver of revenue growth for the period[20] Profit/(Loss) Before Tax and Finance Costs In H1 2025, the company achieved a profit before tax of RMB 2,126 thousands, reversing the loss from the prior year, with major costs including RMB 30,111 thousands for services provided and RMB 7,987 thousands for construction contracts, and finance costs of RMB 254 thousands primarily from borrowing interest Profit/(Loss) Before Tax Components for H1 2025 | Item | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | | :--- | :--- | :--- | | Construction Contract Costs | 7,987 | 2,312 | | Cost of Services Provided | 30,111 | 8,808 | | Employee Benefit Expenses | 5,486 | 6,430 | | Bank Interest Income | (817) | (495) | | Interest on Borrowings (Finance Costs) | 261 | – | - The company's profit before tax turned from a loss to a profit, with major cost items being service costs and construction contract costs[21] Income Tax The Group has no assessable profits in Hong Kong, thus no Hong Kong profits tax provision, while Chinese subsidiaries are subject to a 25% corporate income tax rate, with high-tech enterprises like Guangzhou Zhongke Jianyue Environmental Protection Co Ltd enjoying a preferential 15% rate, and Vietnamese subsidiaries taxed at 20%, resulting in a total tax expense of RMB 130 thousands for the period - There are no assessable profits in Hong Kong, Chinese high-tech enterprises enjoy a 15% preferential tax rate, and Vietnamese subsidiaries are taxed at 20%[29][30] Income Tax Expense for H1 2025 | Item | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | | :--- | :--- | :--- | | Current Period – Outside Hong Kong | 132 | 582 | | Deferred | (2) | – | | Total Tax Expense for the Period | 130 | 582 | Dividends The Board does not recommend paying any interim dividend for the six months ended June 30, 2025 - The Board does not recommend paying a 2025 interim dividend for the first half[32] Earnings/(Loss) Per Share For the six months ended June 30, 2025, basic and diluted earnings per share were RMB 0.059, compared to a loss per share of RMB 0.021 in the prior year, primarily based on a profit attributable to owners of RMB 1,996 thousands Earnings/(Loss) Per Share for H1 2025 | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Profit/(Loss) Attributable to Ordinary Equity Holders (RMB thousands) | 1,996 | (814) | | Weighted Average Number of Ordinary Shares (thousands of shares) | 33,737 | 31,937 | | Basic and Diluted Earnings/(Loss) Per Share (RMB) | 0.059 | (0.021) | - As there were no potential dilutive shares for the six months ended June 30, 2025 and 2024, diluted loss per share was the same as basic loss per share[34] Trade and Bills Receivables As of June 30, 2025, net trade and bills receivables totaled RMB 43,131 thousands, a decrease from the end of 2024, with credit terms generally 30 days, extendable to project final acceptance, and the company manages credit risk through strict control of uncollected receivables and regular review of overdue balances Trade and Bills Receivables | Metric | June 30, 2025 (RMB thousands) | Dec 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Trade Receivables | 79,206 | 87,533 | | Loss Allowance | (36,075) | (36,075) | | Net Amount | 43,131 | 51,458 | - Trade receivables generally have a 30-day credit period, with some extendable, and the company manages credit risk through strict control and regular review[37] Trade Payables As of June 30, 2025, total trade payables were RMB 87,200 thousands, slightly lower than at the end of 2024, and are unsecured, non-interest-bearing, and generally settled within 30 to 90 days Trade Payables | Metric | June 30, 2025 (RMB thousands) | Dec 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Trade Payables | 87,200 | 87,791 | - Trade payables are unsecured, non-interest-bearing, and generally settled within 30 to 90 days[39] Commitments As of June 30, 2025, the Group's contracted commitments for EPC and construction projects were approximately RMB 10,704 thousands, a significant increase from the end of 2024, primarily for the purchase of plant, machinery, and construction materials Contracted Commitments | Metric | June 30, 2025 (RMB thousands) | Dec 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | EPC Projects and Construction Project Commitments | 10,704 | 3,547 | - Contracted commitments significantly increased, primarily for the purchase of plant, machinery, and construction materials[40] Related Party Transactions As of June 30, 2025, other payables related to directors totaled RMB 59 thousands, and key management personnel remuneration for H1 2025 was RMB 900 thousands, a decrease from the prior year Related Party Transactions | Item | June 30, 2025 (RMB thousands) | Dec 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Directors' Balances Included in Other Payables | 59 | 143 | | Key Management Personnel Remuneration (H1) | 900 | 1,189 | - Directors' balances are unsecured, interest-free, and repayable on demand[41] Management Discussion and Analysis Business Review and Outlook The Group, a wastewater and drinking water treatment engineering service provider in China, saw revenue surge by 164.8% to RMB 47.22 million and achieved a profit attributable to owners, primarily due to new projects in Vietnam; moving forward, the Group will focus its environmental business on Vietnam, exercise caution with local EPC projects by targeting large enterprises, increase investment in lower cash flow risk service concession arrangements and other environmental projects, and expand into property leasing and data businesses as new growth drivers Business Review The Group, a wastewater and drinking water treatment engineering service provider in China, primarily engages in EPC projects, equipment projects, service concession arrangements, and O&M projects, with revenue significantly increasing by 164.8% to RMB 47.22 million and achieving a profit attributable to owners, mainly due to the commencement of new projects in Vietnam - The Group's main businesses include wastewater and drinking water treatment engineering services, covering EPC, equipment, service concession, and O&M projects[43] Business Revenue Overview for H1 2025 | Business Type | H1 2025 Revenue (RMB thousands) | H1 2024 Revenue (RMB thousands) | | :--- | :--- | :--- | | EPC Projects | 28,242 | 570 | | Equipment Projects | 28 | 4,147 | | Service Concession Arrangements | 10,157 | 11,240 | | Others (including O&M) | 8,796 | 1,731 | | Total Revenue | 47,223 | 17,832 | - Revenue growth and the turn to profit are primarily attributed to the commencement of new projects in Vietnam[44] Outlook The Group will shift its environmental business focus to Vietnam as a key market, adopt a more cautious approach to local EPC projects by favoring large enterprises, increase investment in service concession arrangements and other environmental projects with lower cash flow risk, and enter the property leasing market and develop data business as new growth areas - The environmental business focus is shifting to Vietnam, which is considered a key market for sustained development[45] - The selection of local EPC project clients will be more cautious, favoring large enterprises, and increasing investment in service concession arrangements and other environmental projects with lower cash flow risk[45] - New growth areas include the property leasing market (with successful project acquisition) and the data business (expected to see greater development in the second half)[46][47] Financial Review The company demonstrated strong financial performance for the period, with revenue surging by 164.8%, gross profit increasing by 42.5%, and a successful return to profitability, primarily driven by the launch of a new large EPC project in Vietnam; sales costs significantly rose in line with revenue, while selling and distribution expenses and administrative expenses also increased, and the Board does not recommend an interim dividend Revenue Revenue for the period was approximately RMB 47.22 million, a significant increase of 164.8% or RMB 29.39 million compared to the same period in 2024 Revenue Overview | Metric | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 47,223 | 17,832 | +164.8% | EPC Projects and Construction Projects EPC project revenue significantly increased by 4,854.7% to RMB 28.24 million for the period, primarily due to a new large EPC project in Vietnam commencing in late 2024 and generating progress revenue, while construction projects generated no revenue this period EPC and Construction Project Revenue | Project Type | H1 2025 Revenue (RMB thousands) | H1 2024 Revenue (RMB thousands) | YoY Change (%) | | :--- | :--- | :--- | :--- | | EPC Projects | 28,242 | 570 | +4,854.7% | | Construction Projects | – | 144 | -100% | - The new large EPC project in Vietnam was the primary reason for the surge in EPC revenue this period[50] Equipment Projects Equipment project revenue significantly decreased to RMB 28 thousands for the period, far below RMB 4,147 thousands in the prior year, primarily due to only one wastewater treatment equipment project in H1 2025 Equipment Project Revenue | Project Type | H1 2025 Revenue (RMB thousands) | H1 2024 Revenue (RMB thousands) | | :--- | :--- | :--- | | Equipment Projects | 28 | 4,147 | - Equipment project revenue significantly decreased due to only one wastewater treatment equipment project this period[52] Service Concession Arrangements Revenue from the service concession arrangements segment slightly decreased by 9.6% to RMB 10.16 million for the period, primarily from operation services for sludge treatment plants Service Concession Arrangement Revenue | Project Type | H1 2025 Revenue (RMB thousands) | H1 2024 Revenue (RMB thousands) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Service Concession Arrangements | 10,157 | 11,240 | -9.6% | - The decrease in revenue is mainly due to slightly lower service concession arrangement service income recognized this period compared to the prior year[53] Other Businesses Other segment revenue significantly increased, with maintenance service revenue rising by 26.6% to RMB 2.19 million due to an increase in O&M projects, and new online advertising and related services revenue of RMB 6.60 million for the period Other Business Revenue | Project Type | H1 2025 Revenue (RMB thousands) | H1 2024 Revenue (RMB thousands) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Provision of Maintenance Services | 2,192 | 1,731 | +26.6% | | Provision of Online Advertising and Related Services | 6,604 | – | New | - The increase in O&M projects and the introduction of online advertising services are the main drivers of growth in other business revenue[54] Other Income and Gains Total other income and gains increased by 34.8% to RMB 3.25 million, primarily driven by higher bank interest income and rental income Other Income and Gains | Project Type | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Other Income and Gains | 3,253 | 2,414 | +34.8% | | Increase in Bank Interest Income | +310 | | | | Increase in Rental Income | +787 | | | Cost of Sales Cost of sales significantly increased by 233.4% to RMB 38.10 million, consistent with the increased revenue from the new large EPC project in Vietnam, leading to a substantial rise in construction contract costs and service costs Cost of Sales Components | Project Type | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Cost of Sales | 38,098 | 11,427 | +233.4% | | Construction Contract Costs | 7,987 | 2,312 | +245.5% | | Cost of Services Provided | 30,111 | 8,808 | +241.9% | - The increase in cost of sales is directly related to the revenue growth from the new large EPC project in Vietnam[56] Gross Profit Gross profit increased by 42.5% to RMB 9.13 million, primarily due to the commencement of the new large EPC project in Vietnam, which boosted overall revenue and gross profit Gross Profit Overview | Metric | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Gross Profit | 9,125 | 6,405 | +42.5% | - The new large EPC project in Vietnam is the main driver of gross profit growth[57] Selling and Distribution Expenses Selling and distribution expenses increased by 110.2% to RMB 1.29 million, primarily due to higher salaries and employee benefits, travel expenses, and repair and maintenance expenses Selling and Distribution Expenses | Metric | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Selling and Distribution Expenses | 1,293 | 615 | +110.2% | - Increased salaries, travel expenses, and repair and maintenance expenses led to a rise in selling and distribution expenses[58] Administrative Expenses Administrative expenses slightly increased by 3.2% to RMB 8.71 million, primarily influenced by the net effect of increased office expenses and decreased entertainment expenses Administrative Expenses | Metric | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Administrative Expenses | 8,705 | 8,436 | +3.2% | - Increased office expenses were partially offset by decreased entertainment expenses, resulting in a slight rise in administrative expenses[59] Profit/(Loss) for the Period The company achieved a profit of RMB 1.99 million for the period, successfully reversing the loss from the prior year, primarily attributed to revenue growth from the new large EPC project in Vietnam Profit/(Loss) for the Period | Metric | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | | :--- | :--- | :--- | | Profit/(Loss) for the Period | 1,996 | (814) | - Revenue growth from the new large EPC project in Vietnam was the key factor in turning the loss into a profit this period[60] Dividends The Board does not recommend paying an interim dividend for the six months ended June 30, 2025 - The Board does not recommend paying a 2025 interim dividend for the first half[61] Capital Structure, Liquidity and Financial Resources As of June 30, 2025, total equity attributable to shareholders was RMB 81.20 million, cash and bank balances were RMB 62.05 million, and net current assets were RMB 34.31 million, indicating sufficient financial resources; the gearing ratio was 43%, slightly higher than at the end of 2024, and approximately HKD 1.50 million was raised through a new share placement for general working capital Capital Structure and Liquidity Overview | Metric | June 30, 2025 (RMB thousands) | Dec 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Total Equity Attributable to Shareholders | 81,200 | 75,536 | | Cash and Bank Balances | 62,047 | 72,333 | | Net Current Assets | 34,308 | 28,378 | | Gearing Ratio | 43% | 41% | - The Group possesses sufficient financial resources, with cash and cash equivalents primarily denominated in RMB, HKD, and USD[63] - A new share placement was completed during the period, with net proceeds of approximately HKD 1.50 million used for general working capital[65] Share Option Scheme The company adopted a share option scheme on June 17, 2022, to incentivize and reward eligible individuals, with a 10-year validity and a maximum of 18,000,000 shares issuable (6% of total issued shares at adoption), an exercise price based on the higher of the closing price on the grant date or the average of the preceding five days, and a 3-year vesting period (40%, 30%, 30%); as of June 30, 2025, 1,200,000 share options remained unexercised with a weighted average exercise price of HKD 11.90, and approximately RMB 651 thousands in share option expenses were recognized for the period - The share option scheme aims to incentivize and reward employees and directors who contribute to the Group, with a 10-year validity[23][80] Share Option Scheme Key Terms and Status | Item | Details | | :--- | :--- | | Maximum Number of Shares Issuable | 18,000,000 shares (6% of issued shares at adoption date) | | Vesting Period | 3 years (40%/30%/30%) | | Exercise Price | Higher of closing price on grant date or average of preceding five days' closing prices | | Unexercised Share Options as of June 30, 2025 | 1,200,000 options | | Weighted Average Exercise Price | HKD 11.90/share | | Share Option Expense Recognized in H1 2025 | RMB 651 thousands | - As of June 30, 2025, no additional share options could be granted under the scheme[96] Employees and Remuneration Policy As of June 30, 2025, the Group employed 48 individuals, with employee costs totaling approximately RMB 4.8 million, and the company is committed to ensuring remuneration levels align with industry practices and market conditions, determined by employee performance Employee and Remuneration Overview | Metric | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Number of Employees | 48 employees | 39 employees | | Employee Costs (H1) | RMB 4.8 million | RMB 5.5 million | - The remuneration policy aims to align with industry practices and market conditions, and is linked to employee performance[97] Events After Reporting Period Subsequent to the reporting period, on July 11, 2025, the Group entered into an investment agreement to conditionally inject RMB 10 million in cash and acquire a 60% equity interest in a target company, making it an indirect non-wholly owned subsidiary; additionally, a new share placement was completed in August 2025, raising approximately HKD 5.46 million in net proceeds for general working capital - Subsequent to the reporting period, the Group will acquire a 60% equity interest in a target company, making it an indirect non-wholly owned subsidiary[98][99] - A new share placement was completed in August 2025, raising approximately HKD 5.46 million for general working capital[100] Corporate Governance and Shareholder Information Corporate Governance Practices The Board is committed to maintaining sound corporate governance standards and has adopted the Corporate Governance Code set out in Appendix 15 of the GEM Listing Rules; the roles of Chairman and Chief Executive Officer are held by the same individual, Mr. Xie Yang, which the Board believes benefits the Group's business prospects and management, with power balance ensured by senior management and Board operations - The company has adopted the GEM Listing Rules Corporate Governance Code and is committed to maintaining sound governance standards[101][102] - The roles of Chairman and Chief Executive Officer are held by the same person, an arrangement the Board believes is beneficial to the Group, with power balance ensured by senior management and the Board[102] Directors' and Chief Executive's Interests As of June 30, 2025, Mr. Xie Yang held 300,000 shares (0.79% of issued share capital) and Mr. He Xuanxi held 100,000 shares (0.26%), with no other disclosable interests or short positions in shares, underlying shares, or debentures for directors and the chief executive Directors' Long Positions in Shares | Director Name | Capacity | Number of Relevant Shares (shares) | Approximate Percentage of Issued Share Capital | | :--- | :--- | :--- | :--- | | Mr. Xie Yang | Beneficial Owner | 300,000 | 0.79% | | Mr. He Xuanxi | Beneficial Owner | 100,000 | 0.26% | - Other than as disclosed above, no other directors and chief executive had any disclosable interests or short positions in the shares, underlying shares, or debentures of the company under Divisions 2 and 3 of Part XV of the Securities and Futures Ordinance[107] Major Shareholders' Interests As of June 30, 2025, Able Talent Asia Limited held 5,100,000 shares (13.44% of issued share capital) and Direct Profit Enterprises Limited held 2,700,000 shares (7.12%), qualifying as major shareholders Major Shareholders' Long Positions in Shares | Shareholder Name | Capacity | Number of Ordinary Shares (shares) | Approximate Percentage of Total Issued Shares | | :--- | :--- | :--- | :--- | | Able Talent Asia Limited | Beneficial Owner | 5,100,000 | 13.44% | | Direct Profit Enterprises Limited | Beneficial Owner | 2,700,000 | 7.12% | - Other than as disclosed above, the Directors are not aware of any person (other than a Director or chief executive of the Company) who had any interest or short position in the shares or underlying shares of the Company which would fall to be disclosed under Divisions 2 and 3 of Part XV of the Securities and Futures Ordinance[108] Review of Financial Statements The Audit Committee, comprising three independent non-executive directors with Mr. Ren Yueheng as chairman, has reviewed the Group's accounting policies, financial reporting matters, and interim results, confirming their compliance with applicable accounting standards, GEM Listing Rules, and other legal requirements, with sufficient disclosures made - The Audit Committee has reviewed the interim financial statements, confirming their compliance with accounting standards, listing rules, and legal requirements, and that sufficient disclosures have been made[110] - The Audit Committee comprises three independent non-executive directors, with Mr. Ren Yueheng serving as chairman[110] Other Disclosures This section covers various other disclosures, including directors' interests in material contracts, competing interests, transactions in listed securities, directors' compliance with securities dealing, the Group's material investments, significant acquisitions and disposals, contractual commitments, future investment plans, contingent liabilities, asset pledges, foreign exchange risk, advances to entities, controlling shareholder share pledges, and loan agreements and related party financial assistance, all indicating the Group maintained good compliance and a sound financial position during the reporting period Directors' Interests in Material Contracts During the period, no director had any direct or indirect material interest in any contract significant to the Group's business to which the company or any of its subsidiaries was a party - Directors had no material interests in significant Group contracts during the period[103] Competing Interests The directors are unaware of any business or interest held by directors, controlling shareholders, or their respective close associates that constitutes or may constitute a competing interest with the Group's business during the period - Directors, controlling shareholders, and their close associates have no competing interests with the Group's business[104] Purchase, Sale or Redemption of Listed Securities During the period, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities - The company and its subsidiaries did not engage in the purchase, sale, or redemption of listed securities during the period[105] Directors' Securities Transactions The company has adopted a code of conduct for directors' securities transactions that is no less stringent than the required standard set out in the GEM Listing Rules, and all directors have confirmed compliance with this standard during the period - All directors have confirmed compliance with the GEM Listing Rules' required standard for securities transactions[109] Material Investments Held by the Group As of June 30, 2025, the Group held no material investments - As of June 30, 2025, the Group held no material investments[67] Material Acquisitions and Disposals of Subsidiaries and Joint Ventures Other than as disclosed in this announcement, the Group had no material acquisitions or disposals of subsidiaries and joint ventures during the period - There were no other material acquisitions or disposals of subsidiaries and joint ventures during the period[68] Commitments As of June 30, 2025, the Group's contractual operating commitments were approximately RMB 10.70 million, primarily related to the purchase of equipment for engineering projects Contractual Operating Commitments | Metric | June 30, 2025 (RMB thousands) | Dec 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Contractual Operating Commitments | 10,704 | 3,547 | - Commitments are primarily related to equipment procurement for engineering projects[69] Future Plans for Material Investments and Capital Assets Other than as disclosed in this announcement, the Group has no plans involving material investments or additions to capital assets as of the date of this announcement - The Group currently has no other plans for material investments or capital asset additions[70] Contingent Liabilities As of June 30, 2025, the Group had no material contingent liabilities - The Group has no material contingent liabilities[71] Pledge of the Group's Assets As of June 30, 2025, and December 31, 2024, the Group had no bank borrowings, thus no buildings, investment properties, or leasehold land were pledged - Due to the absence of bank borrowings, the Group's assets are not pledged[72] Foreign Exchange Risk The Group primarily operates in China, with most transactions settled in RMB, and directors consider foreign exchange risk to be low, with no hedging undertaken during the period - The Group's foreign exchange risk is considered low, and no hedging was undertaken during the period[73] Advances to an Entity As of June 30, 2025, the Group had not provided any advances to entities outside the Group - As of June 30, 2025, the Group had not provided any advances to external entities[74] Pledge of Shares by Controlling Shareholder As of June 30, 2025, the controlling shareholder had not pledged any shares - As of June 30, 2025, the controlling shareholder had not pledged any shares[75] The Group's Loan Agreements As of June 30, 2025, the Group had not entered into any loan agreements with specific performance covenants by the controlling shareholder, and no material terms of any loan agreements were breached during the period - The Group has not entered into loan agreements with controlling shareholder-specific performance covenants, and no material loan agreement terms were breached[76] Financial Assistance and Guarantees to Affiliated Companies As of June 30, 2025, the Group had not provided any financial assistance or guarantees to affiliated companies - As of June 30, 2025, the Group had not provided financial assistance or guarantees to affiliated companies[77]