香港中旅(00308) - 2025 - 中期业绩

Condensed Consolidated Financial Statements This section presents the unaudited condensed consolidated financial statements for the six months ended June 30, 2025, including the income statement, statement of comprehensive income, and statement of financial position, reflecting the company's financial performance and position during the period Condensed Consolidated Income Statement For the six months ended June 30, 2025, the Group turned from profit to loss, with revenue decreasing year-on-year, operating activities shifting from profit to loss, ultimately recording a loss attributable to equity holders of the company Key Data from Condensed Consolidated Income Statement (For the six months ended June 30) | Indicator | 2025 (HKD thousands) | 2024 (HKD thousands) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 1,973,653 | 2,136,982 | -7.65% | | Gross Profit | 533,328 | 610,739 | -12.70% | | Operating (Loss) / Profit | (43,832) | 117,553 | -137.29% | | (Loss) / Profit for the Period | (74,760) | 100,387 | -174.47% | | (Loss) / Profit Attributable to Equity Holders of the Company | (86,853) | 63,230 | -237.36% | | Basic and Diluted (Loss) / Earnings Per Share (HK cents) | (1.57) | 1.14 | -237.72% | Condensed Consolidated Statement of Comprehensive Income Total comprehensive income for the period turned from a loss in the prior year to a profit, primarily due to a significant positive change in net exchange differences on translating foreign operations Key Data from Condensed Consolidated Statement of Comprehensive Income (For the six months ended June 30) | Indicator | 2025 (HKD thousands) | 2024 (HKD thousands) | YoY Change (%) | | :--- | :--- | :--- | :--- | | (Loss) / Profit for the Period | (74,760) | 100,387 | -174.47% | | Net Exchange Differences on Translating Foreign Operations | 227,708 | (95,522) | 338.49% | | Total Comprehensive Income / (Loss) for the Period | 163,934 | (1,934) | 8506.72% | | Total Comprehensive Income / (Loss) Attributable to Equity Holders of the Company | 134,819 | (28,818) | 567.15% | Condensed Consolidated Statement of Financial Position As of June 30, 2025, the Group's total assets and total equity both increased, maintaining a sound financial position Key Data from Condensed Consolidated Statement of Financial Position (As of June 30) | Indicator | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Total Assets | 25,184,477 | 24,531,934 | 2.66% | | Total Equity | 18,411,665 | 18,131,893 | 1.54% | | Total Liabilities | 6,772,812 | 6,400,041 | 5.82% | | Total Non-Current Assets | 16,619,862 | 16,555,763 | 0.39% | | Total Current Assets | 8,564,615 | 7,976,171 | 7.38% | | Cash and Bank Balances | 2,853,580 | 2,444,190 | 16.75% | Notes to the Financial Statements This section provides detailed notes to the condensed consolidated financial statements, covering company information, basis of preparation, accounting policy changes, segment data, revenue breakdown, expense details, taxation, dividends, earnings per share, and trade receivables/payables, offering context and supplementary information for understanding the financial data Company Information China Travel International Investment Hong Kong Limited and its subsidiaries primarily operate tourism attractions and related businesses, travel document and related businesses, hotel businesses, and passenger transportation businesses, listed on the Hong Kong Stock Exchange - The Group's principal businesses include tourism attractions and related businesses, travel document and related businesses, hotel businesses, and passenger transportation businesses[9][11] Basis of Preparation The interim condensed consolidated financial information is prepared in accordance with Hong Kong Accounting Standard 34 and should be read in conjunction with the Group's annual consolidated financial statements for the year ended December 31, 2024 - The interim condensed consolidated financial information is prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting"[10] - The company has filed its financial statements for the year ended December 31, 2024, with the Registrar of Companies, and the auditor's report was unqualified[10] Changes in Accounting Policies The revised Hong Kong Accounting Standard 21 "Lack of Exchangeability" was adopted for the first time this period, but it had no impact on the interim condensed consolidated financial information as the Group's transaction and functional currencies are exchangeable into the presentation currency - The revised Hong Kong Accounting Standard 21 "Lack of Exchangeability" was adopted for the first time this period, but it had no impact on the financial information[12][13] Operating Segment Information The Group's operating businesses are classified into four reportable segments based on the nature of operations, goods, and services: tourism attractions and related businesses, travel document and related businesses, hotel businesses, and passenger transportation businesses, with their performance monitored independently - The Group's operating segments include tourism attractions and related businesses, travel document and related businesses, hotel businesses, and passenger transportation businesses[14][15] Segment Revenue and Results (For the six months ended June 30) | Segment | 2025 Revenue (HKD thousands) | 2024 Revenue (HKD thousands) | 2025 Segment Results (HKD thousands) | 2024 Segment Results (HKD thousands) | | :--- | :--- | :--- | :--- | :--- | | Tourism Attractions and Related Businesses | 870,753 | 1,037,146 | (112,016) | 26,433 | | Travel Document and Related Businesses | 147,168 | 180,408 | 67,175 | 94,360 | | Hotel Businesses | 429,179 | 367,805 | 101,533 | 82,222 | | Passenger Transportation Businesses | 513,397 | 536,894 | 7,800 | 5,656 | | Total Reportable Segments | 1,960,497 | 2,122,253 | 64,492 | 208,671 | | Total Revenue | 1,973,653 | 2,136,982 | | | | Loss / Profit for the Period | (74,760) | 100,387 | | | Revenue Total revenue for the period was HKD 1.974 billion, a year-on-year decrease of 7.65%, primarily due to reduced revenue from tourism attractions, travel documents, passenger transportation, and property sales, partially offset by increased hotel revenue and investment property rental income Revenue Breakdown (For the six months ended June 30) | Revenue Source | 2025 (HKD thousands) | 2024 (HKD thousands) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Tourism Attractions and Related Revenue | 781,179 | 901,910 | -13.38% | | Travel Document and Related Revenue | 147,168 | 180,408 | -18.39% | | Hotel Revenue | 417,760 | 376,398 | 10.99% | | Passenger Transportation Revenue | 513,397 | 536,894 | -4.38% | | Property Sales Revenue | 27,334 | 69,110 | -60.44% | | Consulting Services Revenue | 11,745 | 11,641 | 0.90% | | Gross Rental Income from Investment Properties | 75,070 | 60,621 | 23.84% | | Total | 1,973,653 | 2,136,982 | -7.65% | - The Group does not disclose information about revenue from customer contracts to be recognized in the future, as the performance obligations are part of original expected term contracts of one year or less[20] Other Income and Gains, Net Other income and gains, net, for the period was HKD 52.77 million, a year-on-year decrease of 28%, mainly due to a reduction in other income and a shift from gain to loss on disposal of property, plant, and equipment Other Income and Gains, Net (For the six months ended June 30) | Item | 2025 (HKD thousands) | 2024 (HKD thousands) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Net Exchange Differences | 267 | 53 | 403.77% | | Government Grants | 19,812 | 17,444 | 13.57% | | Net (Loss) / Gain on Disposal of Property, Plant and Equipment | (47) | 277 | -116.97% | | Net Rental Income from Other Properties | 11,149 | 12,535 | -11.06% | | Reversal of Provision for Membership Fee Refunds | 34 | 6,779 | -99.50% | | Others | 21,555 | 36,249 | -40.55% | | Total | 52,770 | 73,337 | -28.04% | Operating (Loss) / Profit The operating loss for the period was primarily impacted by increased fair value changes of investment properties, impairment losses on properties held for sale, and impairment losses on property, plant, and equipment, despite decreases in staff costs and amortization of prepaid land lease payments Key Deductions / (Additions) to Operating (Loss) / Profit (For the six months ended June 30) | Item | 2025 (HKD thousands) | 2024 (HKD thousands) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Staff Costs | 712,485 | 729,875 | -2.40% | | Depreciation | 281,286 | 267,036 | 5.34% | | Amortisation of Prepaid Land Lease Payments | 11,716 | 15,152 | -22.68% | | Cost of Properties Sold | 23,090 | 51,145 | -54.85% | | Net Impairment Provision / (Reversal) for Trade and Other Receivables | 190 | (710) | -126.76% | | Impairment Loss on Properties Held for Sale | 6,520 | – | N/A | | Impairment Loss on Property, Plant and Equipment | 59,699 | – | N/A | | Fair Value Changes of Investment Properties | 123,328 | 99,045 | 24.52% | Net Finance Income Net finance income for the period was HKD 7.21 million, a significant year-on-year decrease of 64.39%, mainly due to reduced interest income from bank deposits, while finance costs remained relatively stable after capitalized interest Net Finance Income (For the six months ended June 30) | Item | 2025 (HKD thousands) | 2024 (HKD thousands) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Finance Income: Bank Deposits | 13,295 | 25,691 | -48.25% | | Finance Costs: Interest on Bank and Other Borrowings | (27,087) | (45,530) | -40.50% | | Finance Costs: Interest on Lease Liabilities | (6,088) | (5,461) | 11.48% | | Less: Interest Expenses Capitalised | 27,087 | 45,530 | -40.50% | | Net Finance Income | 7,207 | 20,230 | -64.39% | Income Tax Expense Income tax expense for the period was HKD 66.95 million, a slight year-on-year increase, primarily comprising Hong Kong profits tax, PRC corporate income tax and land appreciation tax, and deferred tax - Hong Kong profits tax is calculated at a 16.5% rate, and Mainland China operations are subject to corporate income tax and land appreciation tax at applicable rates[24][25] Income Tax Expense (For the six months ended June 30) | Item | 2025 (HKD thousands) | 2024 (HKD thousands) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Current Tax: Hong Kong | 36,054 | 37,105 | -2.83% | | Current Tax: Mainland China and Other Regions | 16,809 | 34,921 | -51.87% | | Deferred Tax | 14,090 | (7,183) | -296.10% | | Total | 66,953 | 64,843 | 3.25% | Dividends The Board of Directors does not recommend the payment of an interim dividend for the six months ended June 30, 2025, compared to HKD 1.5 cents per share paid in the prior year - The Board of Directors does not recommend the payment of an interim dividend for the first half of 2025 (2024: HKD 1.5 cents per share)[27] (Loss) / Earnings Per Share Basic and diluted loss per share for the period was HKD 1.57 cents, compared to earnings per share of HKD 1.14 cents in the prior year, primarily reflecting the loss attributable to equity holders of the company (Loss) / Earnings Per Share (For the six months ended June 30) | Indicator | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | (Loss) / Profit Attributable to Equity Holders of the Company | (86,853) | 63,230 | | Weighted Average Number of Ordinary Shares Outstanding | 5,536,633,709 | 5,536,633,709 | | Basic and Diluted (Loss) / Earnings Per Share (HK cents) | (1.57) | 1.14 | - No diluted adjustment was made to the basic loss per share amount as the assumed exercise of share options would result in a reduction in loss per share[28] Trade Receivables As of June 30, 2025, total trade receivables amounted to HKD 222.28 million, a 14.9% increase from the end of the previous year, with the largest proportion being receivables within three months Ageing Analysis of Trade Receivables (As of June 30) | Ageing | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | Within three months | 137,690 | 120,803 | | Over three months to six months | 40,654 | 40,183 | | Over six months to twelve months | 32,614 | 30,370 | | Over one year to two years | 10,107 | 1,283 | | Over two years | 1,213 | 824 | | Total | 222,278 | 193,463 | - The Group grants an average credit period of 30 to 90 days to trade customers[30] Trade Payables As of June 30, 2025, total trade payables amounted to HKD 721.70 million, a 5.4% decrease from the end of the previous year, with the largest proportion being payables within three months Ageing Analysis of Trade Payables (As of June 30) | Ageing | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | Within three months | 325,506 | 372,102 | | Over three months to six months | 37,599 | 134,413 | | Over six months to twelve months | 182,375 | 54,783 | | Over one year to two years | 82,369 | 58,552 | | Over two years | 93,851 | 143,192 | | Total | 721,700 | 763,042 | Performance Review and Management Discussion and Analysis This section provides a detailed review of the Group's overall performance in the first half of 2025, analyzing the operational status of each business segment, challenges faced, and future strategic development directions, including specific strategies for tourism attractions, travel documents, hotels, and passenger transportation businesses, as well as digital transformation, overseas market expansion, and enhanced operational control Performance Overview In the first half of 2025, the Group's consolidated revenue decreased by 8% year-on-year, turning from a pre-tax profit to a loss, with a loss attributable to shareholders of HKD 87 million, primarily due to a decline in fair value of investment properties and impairment provisions, while financial position remained sound with net cash increasing by 16% - In the first half of 2025, the Group's consolidated revenue was HKD 1.974 billion, a year-on-year decrease of 8%[32] - Pre-tax loss was HKD 8 million, compared to a pre-tax profit of HKD 165 million in the prior year; loss attributable to shareholders was HKD 87 million, compared to a profit of HKD 63 million in the prior year[32] - The shift from profit to loss was mainly due to the decline in fair value of investment properties and impairment provisions by subsidiaries[32] Key Financial Position Data (As of June 30, 2025) | Indicator | Amount (HKD billions) | Change from Year-End (%) | | :--- | :--- | :--- | | Total Assets | 251.84 | 3% | | Equity Attributable to Shareholders | 162.3 | 1% | | Total Cash and Bank Balances, Pledged and Restricted Deposits | 28.59 | 17% | | Net Cash | 7.45 | 16% | - The Board of Directors does not recommend the payment of an interim dividend for the six months ended June 30, 2025[34] Segment Performance Analysis This section provides a detailed analysis of the Group's four core business segments' performance in the first half of 2025, including revenue and profit changes and their main drivers, along with an overview of each segment's key operational activities and market strategies Tourism Attractions and Related Businesses In the first half of 2025, total revenue from tourism attractions and related businesses decreased by 16% year-on-year, turning from profit to a loss of HKD 112 million, primarily affected by consumption downgrading, lack of new products, climate change, and a decline in fair value of investment properties and impairment provisions Tourism Attractions and Related Businesses Performance (For the six months ended June 30) | Indicator | 2025 (HKD billions) | 2024 (HKD billions) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Total Revenue | 8.71 | 10.37 | -16% | | Attributable (Loss) / Profit | (1.12) | 0.26 | -530.77% | - Theme park revenue was HKD 270 million, a year-on-year decrease of 7%; attributable profit was HKD 24 million, a year-on-year decrease of 20%; Window of the World and Splendid China enriched experiences through IP collaborations, themed events, and night-time products[38] - Natural and cultural scenic area destination revenue was HKD 441 million, a year-on-year decrease of 13%; attributable profit was HKD 21 million, a year-on-year decrease of 66%; Shapotou Scenic Area successfully held a desert starry sky music festival, and Detian Scenic Area promoted sales through distinctive marketing activities[39][40] - Leisure and resort scenic area destination revenue was HKD 147 million, a year-on-year decrease of 33%; attributable loss was HKD 146 million, a year-on-year increase of 115%, mainly due to a decline in fair value of investment properties and impairment provisions[41] - Tourism attractions supporting services revenue was HKD 13 million, a year-on-year decrease of 28%; attributable loss was HKD 11 million, compared to a profit of HKD 3 million in the prior year[42] Travel Document and Related Businesses In the first half of 2025, revenue from travel document and related businesses decreased by 18% year-on-year, and attributable profit decreased by 29% year-on-year, mainly because the pent-up demand for document renewals during the 2023 pandemic has returned to normal levels Travel Document and Related Businesses Performance (For the six months ended June 30) | Indicator | 2025 (HKD billions) | 2024 (HKD billions) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 1.47 | 1.80 | -18% | | Attributable Profit | 0.67 | 0.94 | -29% | - China Travel Service Technology Computer Co., Ltd. continuously optimized its travel document business system and actively supported the Group's digital transformation[43] Hotel Businesses In the first half of 2025, hotel business revenue increased by 17% year-on-year, and attributable profit increased by 24% year-on-year, benefiting from increased international tourists and the operation of new hotels, with both occupancy rates and average room rates improving in Hong Kong and Macau hotels Hotel Businesses Performance (For the six months ended June 30) | Indicator | 2025 (HKD billions) | 2024 (HKD billions) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 4.29 | 3.68 | 17% | | Attributable Profit | 1.02 | 0.82 | 24% | - The Metropark Hotel Hung Hom and Parkview Service Apartment commenced operations in May 2024, expanding profit growth points[44] Key Hotel Operating Indicators (First Half) | Hotel Type | Indicator | 2025 First Half | 2024 First Half | | :--- | :--- | :--- | :--- | | Six Hotels and One Serviced Apartment in Hong Kong and Macau | Average Occupancy Rate (%) | 95.15 | 94.42 | | | Average Room Rate (HKD) | 768.48 | 693.66 | | Beijing Metropark Hotel | Average Occupancy Rate (%) | 77.22 | 76.17 | | | Average Room Rate (RMB) | 703.87 | 716.57 | Passenger Transportation Businesses In the first half of 2025, passenger transportation business revenue decreased by 4% year-on-year, but attributable profit increased by 33% year-on-year, with coach business revenue and profit both growing, while ferry business revenue decreased due to competition Passenger Transportation Businesses Performance (For the six months ended June 30) | Indicator | 2025 (HKD billions) | 2024 (HKD billions) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 5.13 | 5.37 | -4% | | Attributable Profit | 0.08 | 0.06 | 33% | - Shun Tak-China Travel will seize the opportunities presented by "Hong Kong people traveling north" and the opening of the "Shenzhen-Zhongshan Link" to actively expand the market, with both coach business revenue and profit increasing[47] - Ferry business revenue decreased due to competitors' ticket giveaway strategies[47] Strategy and Future Development This section outlines the Group's future strategic priorities, including building first-class tourism destinations, strengthening technological innovation and digital transformation, optimizing passenger transportation businesses, expanding Hong Kong and overseas markets, and enhancing overall operational control and core competitiveness, aiming for long-term business growth and value creation Tourism Attractions and Related Businesses Strategy The Group will focus on natural and cultural scenic areas, urban and leisure resort destinations, enhancing its four capabilities in investment, products, digitalization, and operations, to create industry-leading benchmark products, and actively expand business through IP collaborations, existing asset upgrades, and strategic acquisitions - Strategic positioning as a "first-class tourism destination investment and operation service provider," focusing on natural and cultural scenic areas, urban, and leisure resort destinations[48] - Promote cooperation with renowned IPs like Harry Potter, striving to build 1-2 domestic first-class theme parks during the "15th Five-Year Plan" period[49] - Explore "tourism + wellness" and "tourism + education" models through existing asset upgrades and introducing high-quality external partners[50] - Acquired 75% equity in Songhuahu Company and Wanbingxue Company, actively expanding into the ice and snow economy, aligning with the development strategy for urban and leisure resort products[51] - Subsidiaries such as CTS Scenery, CTS Wisdom, and CTS Resort provide scenic area, hotel, and performing arts output management services, with 33 output management projects[52][53] Technological Innovation and Digital Transformation The Group adheres to technology-led innovation and digital-real integration, promoting business online and integrated operations through digital platforms, actively applying AI, XR immersive experiences, and exploring new scenarios like low-altitude tourism to enhance service quality and operational efficiency - Leveraging digital platforms to promote business online and integrated operations, providing a "one-stop travel" experience[54] - Developing intelligent agent applications such as "Destination AI Tourism" and "AI Employee Assistant" based on large models like DeepSeek[54] - Detian Scenic Area and Splendid China launched XR immersive projects and signed a "Low-Altitude Economy Cooperation Framework Agreement" with China Telecom Shenzhen Branch[54] - In the second half of the year, it will upgrade to a smart tourism platform for destinations, increase the promotion of AI applications, and advance "ticket + low-altitude tour" bundled products for low-altitude tourism pilots[55] Passenger Transportation Business Development Strategy The passenger transportation business will seize the opportunities of "Hong Kong people traveling north" and the opening of the "Shenzhen-Zhongshan Link," adjusting routes, procuring new energy vehicles, and seeking M&A to address quota shortages, while also exploring the low-altitude economy, striving to build the "largest cross-border passenger transportation platform in the Guangdong-Hong Kong-Macao Greater Bay Area" - The coach business will adjust routes for "Hong Kong people traveling north" and the opening of the "Shenzhen-Zhongshan Link," accelerate new energy vehicle procurement, and seek M&A to address quota shortages[56] - The ferry business will implement cost control, divest inefficient assets and routes, and increase its market share in cross-border water transportation[56] - Shun Tak-China Travel will explore the low-altitude economy, leveraging the trend of interconnectedness in the Greater Bay Area, striving to become the "largest cross-border passenger transportation platform in the Guangdong-Hong Kong-Macao Greater Bay Area"[56] Hong Kong and Overseas Business Layout The Group adheres to the strategy of "based in Hong Kong, deeply cultivating Hainan, expanding into Mainland China, and refining overseas operations," orderly advancing the Maldives project, actively researching the revitalization of existing assets such as Hong Kong properties, and providing consulting and operational support for the second phase of Ma Wan Park's cultural tourism business - Adhering to the strategy of "based in Hong Kong, deeply cultivating Hainan, expanding into Mainland China, and refining overseas operations," actively exploring overseas market layouts[57] - Land reclamation for the Maldives Ambaara Island project is largely complete, entering the hotel design refinement phase, aiming to create a high-quality island resort[57] - Researching the revitalization of existing assets such as Hong Kong properties, with Metropark Hotel Hung Hom having commenced operations in May 2024[57] - Collaborating with a subsidiary of Sun Hung Kai Properties to provide consulting and operational support services for the second phase of Ma Wan Park's cultural tourism business[57] Operational Control and Core Competitiveness Enhancement The Group will deepen operational control, optimize performance assessment, strengthen brand marketing, and focus on enhancing its four core competencies: investment, products, digitalization, and operations, while also reinforcing the safety production baseline and improving internal control management and risk prevention capabilities - Deepen operational control, optimize and improve corporate performance assessment, strengthen the weighting of key indicators, and adhere to a value creation orientation[58] - Strengthen brand marketing, increase brand promotion efforts, and improve marketing conversion rates[58] - Focus on strengthening the four core competencies: investment capability, product capability, digitalization capability, and operational capability[58] - Reinforce the safety production baseline, improve safety production management organizations, and strengthen the dual prevention system and employee safety training[58] - Strictly comply with listing rules, continuously optimize governance mechanisms, improve internal control management, and strengthen control over operating cash flow and asset-liability ratio[58] Outlook The Group remains cautiously optimistic about the business outlook for the second half of the year, expecting resilient growth in the Chinese economy, renewed vitality in Hong Kong's financial sector, and a recovery in the consumer market; despite global economic volatility and external uncertainties, the Group will continue to pursue long-term business and profit growth, committed to enhancing its overall financial position and creating greater value for shareholders - The International Monetary Fund raised China's 2025 economic growth forecast to 4.8%, indicating continued resilient growth for the Chinese economy[59] - The Chinese government actively implemented macro policies to expand domestic demand and promote consumption, with GDP growing by 5.3% year-on-year in the first half[59] - Hong Kong's financial sector regained momentum, with inbound tourist arrivals continuously increasing by 12%, while local outbound tourism showed signs of a pullback[60] - The Group remains cautiously optimistic about the business outlook for the second half of the year, will continue to explore diversified long-term value-added opportunities for shareholders, and implement stringent financial management[61] Other Information This section provides supplementary information on the Group's operations and governance, including employee matters, financial resources, risk management, significant transactions, contingent liabilities, and corporate governance practices, ensuring transparency and compliance Employees and Remuneration As of June 30, 2025, the Group employed 6,750 employees, with remuneration determined based on performance, experience, and industry practice, and discretionary bonuses and share options granted - As of June 30, 2025, the Group employed 6,750 employees[62] - Employee remuneration is determined based on work performance, professional experience, and current industry practice, with discretionary bonuses and share options granted[62] Liquidity, Financial Resources and Capital Structure The Group maintains a sound financial position, primarily using internal cash flow and bank loans for working capital, with HKD 2.859 billion in cash and bank balances as of June 30, 2025, and a debt-to-capital ratio of 33% - The Group maintains a sound financial position, with working capital primarily sourced from internal cash flow and bank loans[63] Liquidity and Financial Resources (As of June 30, 2025) | Indicator | Amount (HKD billions) | | :--- | :--- | | Cash and Bank Balances, Pledged and Restricted Deposits | 28.59 | | Bank and Other Borrowings, Amounts Due to Fellow Subsidiaries and Holding Company | 21.14 | | Debt-to-Capital Ratio | 33% | Foreign Exchange Risk The Group is exposed to foreign exchange risk arising from foreign currency-denominated assets, borrowings, and transactions, but currently does not use specific hedging instruments and will closely monitor and manage these risks - The Group is exposed to foreign exchange risk arising from foreign currency-denominated assets, borrowings, and transactions[64] - Currently, no specific hedging instruments are used, and foreign currency risks will be closely monitored and managed[64] Pledged Assets As of June 30, 2025, certain bank deposits, land, and buildings of the Group were pledged to banks as security for credit facilities from suppliers - Certain bank deposits, land, and buildings have been pledged to banks as security for supplier credit facilities[65] Significant Acquisitions and Disposals Apart from the acquisition of equity in Songhuahu Company and Wanbingxue Company disclosed in the "Management Discussion and Analysis" section, the Group had no other significant acquisitions or disposals of subsidiaries, associates, and joint ventures, or material investments during the reporting period - During the reporting period, there were no other significant acquisitions or disposals of subsidiaries, associates, and joint ventures, or material investments, except for the acquisition of equity in Songhuahu Company and Wanbingxue Company disclosed in the Management Discussion and Analysis[66] Plans for Future Material Investments or Capital Assets Apart from those disclosed in the "Management Discussion and Analysis" section, the Group had no plans for future material investments or capital assets during the reporting period - Apart from those disclosed in the Management Discussion and Analysis, there were no plans for future material investments or capital assets during the reporting period[67] Contingent Liabilities As of June 30, 2025, the Group provided performance guarantees of HKD 0.3 million; additionally, a subsidiary received a notice from the local tax authority to pay approximately HKD 160 million in taxes and late fees on behalf of an associate, which is currently under active negotiation, with no provision made yet - The Group provided performance guarantees of HKD 0.3 million for sales contracts[68] - A subsidiary received a notice from the local tax authority to pay approximately HKD 160 million in taxes and late fees on behalf of an associate, which is currently under negotiation, with no provision made yet[68] Purchase, Sale or Redemption of the Company's Listed Securities Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the period - Neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the period[69] Corporate Governance The Group is committed to maintaining high standards of corporate governance and complies with the Corporate Governance Code in Appendix C1 of the Listing Rules, though there are deviations regarding directors' appointment letters and the Chairman's attendance at the Annual General Meeting, which have been explained - The Group has adopted and complied with the Corporate Governance Code in Appendix C1 of the Listing Rules, but with deviations[70] - Deviations include not issuing formal appointment letters to some directors and the Chairman of the Board being unable to attend the Annual General Meeting due to other business commitments[71] Review of Interim Results The unaudited condensed consolidated interim financial results of the Group for the six months ended June 30, 2025, have been reviewed by the Company's Audit Committee and by Ernst & Young in accordance with Hong Kong Standard on Review Engagements 2410 - The interim financial results have been reviewed by the Audit Committee and by Ernst & Young in accordance with Hong Kong Standard on Review Engagements 2410[73] Publication of 2025 Interim Results and Interim Report This results announcement has been published on the HKEXnews website and the Company's website, and the interim report will be published and dispatched to shareholders later - The results announcement has been published on the HKEXnews website and the Company's website, and the interim report will be published and dispatched to shareholders later[74] Board of Directors As of the date of this announcement, the Board of Directors comprises three executive directors, three non-executive directors, and three independent non-executive directors - The Board of Directors comprises three executive directors, three non-executive directors, and three independent non-executive directors[75]