京西国际(02339) - 2025 - 中期业绩

Financial Statements This section presents the unaudited condensed consolidated financial statements for the six months ended June 30, 2025, reflecting the company's financial performance and position Interim Condensed Consolidated Income Statement For the six months ended June 30, 2025, revenue grew by 12.4%, but gross profit and interim loss expanded due to increased cost of sales and reduced R&D expenses Interim Condensed Consolidated Income Statement Summary | Indicator | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Revenue | 1,627,054 | 1,447,238 | | Cost of sales | (1,478,401) | (1,225,498) | | Gross profit | 148,653 | 221,740 | | Operating loss | (13,646) | (35,937) | | Loss before tax | (20,331) | (42,431) | | Income tax expense | (9,378) | (9,163) | | Interim loss | (29,709) | (51,594) | | Loss per share attributable to ordinary equity holders of the Company (HK cents per share) | (3.45) | (8.98) | Interim Condensed Consolidated Statement of Comprehensive Income For the six months ended June 30, 2025, total interim comprehensive income improved significantly to HKD 35.8 million, driven by exchange gains from overseas operations Interim Condensed Consolidated Statement of Comprehensive Income Summary | Indicator | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Interim loss | (29,709) | (51,594) | | Exchange differences on translation of overseas operations | 69,013 | (21,158) | | Remeasurement loss on defined benefit plans, net of income tax | (3,491) | (1,408) | | Other comprehensive income/(loss) for the period, net of income tax | 65,522 | (22,566) | | Total comprehensive income/(loss) for the period | 35,813 | (74,160) | Interim Condensed Consolidated Statement of Financial Position As of June 30, 2025, total assets, liabilities, and equity increased, driven by higher trade receivables and shifts in non-current asset composition Interim Condensed Consolidated Statement of Financial Position Summary | Indicator | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | ASSETS | | | | Total non-current assets | 946,946 | 976,782 | | Total current assets | 1,149,920 | 1,055,853 | | TOTAL ASSETS | 2,096,866 | 2,032,635 | | LIABILITIES | | | | Total current liabilities | 923,061 | 903,687 | | Total non-current liabilities | 388,170 | 379,126 | | TOTAL LIABILITIES | 1,311,231 | 1,282,813 | | EQUITY | | | | Total equity | 785,635 | 749,822 | | TOTAL EQUITY AND LIABILITIES | 2,096,866 | 2,032,635 | Notes to Interim Condensed Consolidated Financial Information This section provides detailed notes to the interim condensed consolidated financial information, offering supplementary explanations for understanding the financial statements 1. General Information This section covers the company's registration, business, holding structure, and significant events, including the planned closure of the Czech plant 1.1 Company and Group Information Registered in the Cayman Islands, the company manufactures and trades automotive parts and provides technical services, with Zhangjiakou Industrial Investment Holding Group as its ultimate holding company - The company primarily engages in the manufacturing, sales, and trading of automotive parts and components, and provides technical services[9] - The ultimate holding company is Zhangjiakou Industrial Investment Holding Group Co., Ltd., a state-owned enterprise established in the People's Republic of China[10] 1.2 Significant Events during the Reporting Period The Board resolved to close the Czech plant in Q3 2025 to enhance efficiency, incurring approximately HKD 80.44 million in one-off costs and impairment losses - The Board resolved to commence a phased closure of the Cheb plant in the Czech Republic starting in Q3 2025 to enhance overall operational efficiency[12] - The closure of the Czech plant is expected to incur one-off costs/expenses and impairment losses, including lease termination fees, employee severance payments, impairment of property, plant and equipment, and refund of income tax benefits[12] - The net impact of the closure plan recognized in the current reporting period's financial information totaled a net deduction of approximately HKD 80.44 million, which includes a provision for refund of income tax benefits of HKD 6.808 million[13] 2. Basis of Preparation and Summary of Accounting Policies This section outlines the basis of preparation for interim financial information, adhering to HKAS 34, and details adopted and future accounting standards 2.1 Basis of Preparation Interim financial information is prepared under HKAS 34 'Interim Financial Reporting' and presented in HKD, with amounts rounded to the nearest thousand - The interim financial information is prepared in accordance with Hong Kong Accounting Standard 34 'Interim Financial Reporting' issued by the Hong Kong Institute of Certified Public Accountants[14] - The interim financial information is presented in Hong Kong Dollars, with all amounts adjusted to the nearest thousand Hong Kong Dollars[14] 2.2 Changes in Accounting Policies The Group adopted HKFRS 21 (Amendment) 'Lack of Exchangeability' from January 1, 2025, with no significant impact, while HKFRS 18 is expected to broadly affect future financial statement presentation - The Group first applied HKFRS 21 (Amendment) 'Lack of Exchangeability' from January 1, 2025, which is not expected to have a significant impact[15] - HKFRS 18 'Presentation and Disclosure in Financial Statements' is expected to have a pervasive impact on the presentation and disclosure of the Group's consolidated financial statements, effective January 1, 2027[16][17] 3. Revenue and Segment Information The Group operates as a single segment, manufacturing and selling automotive parts and providing technical services, with revenue primarily from industrial product sales in Germany, UK, and US, and notable growth in mainland China 3(a) Revenue from Contracts with Customers For the six months ended June 30, 2025, total revenue increased by 12.4% to HKD 1,627,054 thousand, primarily from industrial product sales, with most revenue recognized at a point in time Revenue Composition | Products and Services | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Sales of industrial products and others | 1,527,434 | 1,336,116 | | Technical service income | 99,620 | 111,122 | | Total Revenue | 1,627,054 | 1,447,238 | Revenue Recognition Timing | Revenue Recognition | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | At a point in time | 1,623,985 | 1,444,408 | | Over time | 3,069 | 2,830 | | Total Revenue | 1,627,054 | 1,447,238 | 3(b) Geographical Information Germany, UK, and US remain key revenue sources, with notable growth in UK and mainland China revenue, while Czech non-current assets decreased due to plant closure Revenue from External Customers (by Customer Location) | Region | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Germany | 455,294 | 472,751 | | United Kingdom | 366,093 | 239,277 | | United States | 327,707 | 338,790 | | Mainland China | 114,960 | 77,813 | | Other countries | 363,000 | 318,607 | | Total | 1,627,054 | 1,447,238 | Non-current Assets (by Asset Location) | Region | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | Poland | 789,554 | 671,121 | | Czech Republic | 101,849 | 222,768 | | Other countries | 47,658 | 78,205 | | Total | 939,061 | 972,094 | 3(c) Major Customer Information Two external customers contributed over 10% of total revenue, totaling HKD 522.51 million, a significant increase from the prior period Major Customer Revenue Contribution | Customer | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Customer A | 284,160 | 231,058 | | Customer B | 238,350 | 142,814 | | Total | 522,510 | 373,872 | - For the six months ended June 30, 2025, two external customers contributed over 10% of the Group's total revenue, compared to only one in the prior year[23] 4. Expenses by Nature For the six months ended June 30, 2025, total expenses increased by 11.3% to HKD 1,667.3 million, driven by raw material costs and employee benefits, with HKD 73.6 million in provisions for the Czech plant closure Major Expense Components | Expense Item | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Cost of raw materials sold and consumed | 950,732 | 893,963 | | Employee benefit expenses | 392,276 | 289,307 | | Provisions and losses arising from planned closure of Czech plant | 73,636 | – | | Utility expenses | 56,909 | 68,039 | | Depreciation and amortisation expenses | 54,502 | 46,089 | | Research and development costs | 30,168 | 49,972 | | Research and testing expenses | 22,852 | 41,214 | | Total | 1,667,277 | 1,498,031 | - Provisions and losses of HKD 73,636 thousand arose from the planned closure of the Czech plant[24] 5. Other Income For the six months ended June 30, 2025, other income increased by 32.5% to HKD 21.6 million, driven by higher profits from selling scrap, prototypes, and samples Other Income Components | Item | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Profit from sales of scrap, prototypes and samples | 15,696 | 12,298 | | Bank interest income | 172 | 283 | | Others | 5,741 | 3,725 | | Total | 21,609 | 16,306 | 6. Net Other Gains For the six months ended June 30, 2025, net other gains significantly increased to HKD 11.4 million, primarily due to a substantial rise in net exchange differences Net Other Gains Components | Item | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Net exchange differences | 12,254 | 2,409 | | Net (loss)/gain on disposal of property, plant and equipment | (848) | 1,086 | | Total | 11,406 | 3,495 | 7. Finance Costs For the six months ended June 30, 2025, finance costs slightly increased to HKD 6.7 million, mainly from interest on defined benefit plans and lease liabilities Finance Costs Components | Item | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Interest on defined benefit plans | 2,400 | 2,100 | | Interest on lease liabilities | 4,285 | 4,098 | | Others | – | 296 | | Total | 6,685 | 6,494 | 8. Income Tax Expense For the six months ended June 30, 2025, income tax expense was HKD 9.4 million, including HKD 6.8 million in tax benefits to be refunded due to the Czech plant closure Income Tax Expense Components | Item | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Current income tax expense | 12,560 | 36,681 | | Deferred tax | (3,182) | (27,518) | | Total tax expense for the period | 9,378 | 9,163 | - Current income tax expense for the six months ended June 30, 2025, includes approximately HKD 6.808 million in income tax benefits to be refunded due to the planned closure of the Czech plant[28] 9. Loss Per Share For the six months ended June 30, 2025, basic and diluted loss per share narrowed to HKD 3.45 cents, driven by reduced loss and more outstanding shares Loss Per Share | Indicator | 2025 (HK cents) | 2024 (HK cents) | | :--- | :--- | :--- | | Basic and diluted loss per share | (3.45) | (8.98) | - Basic loss per share is calculated based on the loss for the period attributable to ordinary equity holders of the Company and the weighted average number of ordinary shares outstanding of 861,508,602 shares (2024: 574,339,068 shares) during the period[29] - Diluted loss per share is the same as basic loss per share as the Group had no potentially dilutive ordinary shares during the reporting period[29] 10. Dividends The Board did not declare an interim dividend for the six months ended June 30, 2025, consistent with the prior year - The Board did not declare an interim dividend for the six months ended June 30, 2025 (six months ended June 30, 2024: nil)[30] 11. Trade Receivables - Third Parties As of June 30, 2025, net trade receivables from third parties significantly increased to HKD 475.8 million, with most due within three months under a typical one-to-three-month credit period Trade Receivables - Third Parties | Item | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | Trade receivables | 483,460 | 291,826 | | Less: Provision for impairment losses | (7,681) | (5,144) | | Net | 475,779 | 286,682 | Ageing Analysis of Trade Receivables - Third Parties | Ageing | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | Within 3 months | 470,593 | 284,678 | | 3 months to 1 year | 5,186 | 2,004 | | Total | 475,779 | 286,682 | - The credit period granted to customers is generally one to three months, and the Group seeks to strictly control its outstanding receivables and has monitoring procedures to minimize credit risk[31] 12. Trade Receivables - Related Parties As of June 30, 2025, related party trade receivables decreased to HKD 225.5 million, with an increase in overdue amounts over one year, for which no collateral is held Ageing Analysis of Trade Receivables - Related Parties | Ageing | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | Within 3 months | 151,825 | 196,748 | | 3 months to 1 year | 54,901 | 131,244 | | Over 1 year | 18,773 | 4,128 | | Total | 225,499 | 332,120 | - The Group's trade terms with its related parties are primarily on credit, and no collateral or other credit enhancements are held for its trade receivables balances from related parties[33] 13. Prepayments, Other Receivables and Other Assets As of June 30, 2025, total prepayments, other receivables, and other assets increased to HKD 126.4 million, mainly due to higher input VAT and prepayments Prepayments, Other Receivables and Other Assets Components | Item | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | Input VAT | 61,405 | 39,075 | | Prepayments | 19,027 | 12,755 | | Contract costs | 33,416 | 29,968 | | Deposits, other receivables and others | 12,566 | 7,295 | | Total | 126,414 | 89,093 | 14. Trade Payables - Third Parties As of June 30, 2025, third-party trade payables increased to HKD 498.1 million, with most settled within three months under typical 30-to-90-day terms Ageing Analysis of Trade Payables - Third Parties | Ageing | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | Within 3 months | 489,527 | 387,834 | | 3 months to 1 year | 8,160 | 1,233 | | Over 1 year | 399 | 238 | | Total | 498,086 | 389,305 | - Trade payables are interest-free and normally settled within a term of thirty to ninety days[35] 15. Trade Payables - Related Parties As of June 30, 2025, related party trade payables significantly decreased to HKD 155.8 million, despite an increase in amounts overdue for over one year Ageing Analysis of Trade Payables - Related Parties | Ageing | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | Within 3 months | 86,691 | 237,311 | | Over 1 year | 69,103 | 57,635 | | Total | 155,794 | 294,946 | 16. Contract Liabilities, Other Payables and Accrued Expenses As of June 30, 2025, total contract liabilities, other payables, and accrued expenses were HKD 193.0 million, with HKD 2.5 million revenue recognized from opening contract liabilities Contract Liabilities, Other Payables and Accrued Expenses Components | Item | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | Contract liabilities | 24,456 | 58,913 | | Other payables and accrued expenses | 59,752 | 60,314 | | Other tax payables | 10,031 | 7,255 | | Accrued salaries, wages, severance payments and benefits | 79,313 | 49,687 | | Accrued price discounts | 19,455 | 13,261 | | Total | 193,007 | 189,430 | | Non-current portion of contract liabilities | (20,941) | (52,620) | | Current portion | 172,066 | 136,810 | - Revenue recognized from the opening balance of contract liabilities for the six months ended June 30, 2025, was HKD 2.536 million[37] 17. Issued Share Capital As of June 30, 2025, issued share capital was HKD 86,151 thousand, consisting of 861,508,602 ordinary shares at HKD 0.10 par value, with no changes during the period Issued Share Capital | Item | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | Authorised share capital (2,000,000,000 shares) | 200,000 | 200,000 | | Issued and fully paid share capital (861,508,602 shares) | 86,151 | 86,151 | - There were no changes in the Company's issued share capital for the six months ended June 30, 2025, and 2024[38] 18. Commitments As of June 30, 2025, contracted capital commitments for plant and machinery decreased to HKD 106.8 million, with no provisions made Capital Commitments | Item | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | Contracted but not provided for: plant and machinery | 106,789 | 115,842 | Management Discussion and Analysis This section provides management's detailed analysis of the Group's operations and financial performance, highlighting the impact of the Czech plant closure on future efficiency Operations Review The Group manufactures and trades automotive suspension products and provides technical services from European plants, maintaining long-term relationships with major European automakers and suppliers - The Group is engaged in the manufacturing, sales, and trading of automotive parts and components, with suspension products as core products, and provides technical services[42] - The Group operates two major plants in Poland and the Czech Republic, manufacturing and assembling suspension products for renowned European automotive manufacturers[42] - The Group primarily sources raw materials and components from selected European suppliers, maintaining stable relationships and not relying on any single supplier[42] Financial Review This section analyzes the Group's financial performance, including revenue growth, declining gross profit, reduced R&D expenses, increased other income, and narrowed loss, explaining the Czech plant closure's impact Revenue (Financial Review) For the period ended June 30, 2025, total revenue grew by 12.4% to HKD 1,527.4 million from suspension product sales and HKD 99.6 million from technical services, driven by Polish plant orders despite Czech plant closure impacts Revenue (Sales of Suspension Products) | Item | 2025 (HKD millions) | 2024 (HKD millions) | | :--- | :--- | :--- | | Revenue from sales of suspension products | 1,527.4 | 1,336.1 | Revenue (Technical Services) | Item | 2025 (HKD millions) | 2024 (HKD millions) | | :--- | :--- | :--- | | Technical service income | 99.6 | 111.1 | - The increase in revenue was primarily due to an increase in order volume at the Polish plant, while revenue from the Czech plant decreased due to the planned closure[43] Gross Profit and Gross Margin For the period ended June 30, 2025, gross profit decreased to HKD 148.7 million and gross margin to 9.1%, mainly due to underutilization and closure provisions at the Czech plant Gross Profit and Gross Margin | Indicator | 2025 (HKD millions/%) | 2024 (HKD millions/%) | | :--- | :--- | :--- | | Gross profit | 148.7 | 221.7 | | Gross margin | 9.1% | 15.3% | - Both gross profit and gross margin decreased compared to the prior year, primarily due to lower-than-expected utilization at the Czech plant and provisions and losses arising from the closure plan[44] - Management expects the closure of the Czech plant to be completed by the end of Q1 next year, which will help consolidate resources, reduce manufacturing costs, and improve overall capacity utilization[44] Selling and Distribution Expenses For the period ended June 30, 2025, selling and distribution expenses remained stable at HKD 11.5 million, mainly comprising sales staff salaries and benefits Selling and Distribution Expenses | Item | 2025 (HKD millions) | 2024 (HKD millions) | | :--- | :--- | :--- | | Selling and distribution expenses | 11.5 | 11.5 | Administrative Expenses For the period ended June 30, 2025, administrative expenses slightly increased to HKD 86.5 million, mainly due to administrative staff salaries and management service fees Administrative Expenses | Item | 2025 (HKD millions) | 2024 (HKD millions) | | :--- | :--- | :--- | | Administrative expenses | 86.5 | 83.6 | Research and Development Expenses For the period ended June 30, 2025, R&D expenses significantly decreased by 48.8% to HKD 90.8 million, due to enhanced cost control and reduced new project expenditures Research and Development Expenses | Item | 2025 (HKD millions) | 2024 (HKD millions) | | :--- | :--- | :--- | | Research and development expenses | 90.8 | 177.4 | - The decrease in R&D expenses was primarily attributable to enhanced cost control and a significant reduction in R&D expenditures on new projects[47] Other Income (Financial Review) For the period ended June 30, 2025, other income increased by 32.5% to HKD 21.6 million, driven by higher profits from selling scrap, prototypes, and samples Other Income | Item | 2025 (HKD millions) | 2024 (HKD millions) | | :--- | :--- | :--- | | Other income | 21.6 | 16.3 | Net Other Gains (Financial Review) For the period ended June 30, 2025, net other gains increased to HKD 11.4 million, primarily due to higher net exchange gains Net Other Gains | Item | 2025 (HKD millions) | 2024 (HKD millions) | | :--- | :--- | :--- | | Net other gains | 11.4 | 3.5 | Finance Costs (Financial Review) For the period ended June 30, 2025, finance costs slightly increased to HKD 6.7 million, mainly from interest on lease liabilities and defined benefit obligations Finance Costs | Item | 2025 (HKD millions) | 2024 (HKD millions) | | :--- | :--- | :--- | | Finance costs | 6.7 | 6.5 | Loss for the Period Attributable to Owners of the Company For the period ended June 30, 2025, loss attributable to owners of the Company narrowed to HKD 29.7 million, an improvement from the prior year's HKD 51.6 million loss Loss for the Period Attributable to Owners of the Company | Item | 2025 (HKD millions) | 2024 (HKD millions) | | :--- | :--- | :--- | | Loss for the period | (29.7) | (51.6) | Liquidity and Financial Resources The Group's operations require substantial working capital, with a net cash outflow of HKD 2.9 million from operations and cash and cash equivalents of HKD 96.3 million as of June 30, 2025 - The Group's operations require substantial working capital, primarily to fund purchases of raw materials, employee remuneration, capital expenditures, R&D, and other expenses[52] Cash Flow from Operating Activities | Item | 2025 (HKD millions) | 2024 (HKD millions) | | :--- | :--- | :--- | | Net cash flow from operating activities | (2.9) (Outflow) | 77.1 (Inflow) | Cash and Cash Equivalents | Date | Amount (HKD millions) | | :--- | :--- | | June 30, 2025 | 96.3 | | December 31, 2024 | 134.1 | Debt As of June 30, 2025, and December 31, 2024, the Group had no bank or other borrowing balances, maintaining a 0% debt-to-asset ratio - As of June 30, 2025, and December 31, 2024, the Group had no bank or other borrowing balances[53] Debt-to-Asset Ratio | Date | Debt-to-Asset Ratio | | :--- | :--- | | June 30, 2025 | 0% | | December 31, 2024 | 0% | Pledge of Assets As of June 30, 2025, and December 31, 2024, the Group had not pledged any assets - As of June 30, 2025, and December 31, 2024, the Group had not pledged any assets[54] Foreign Exchange Risk The Group's transactions are primarily denominated in EUR, USD, and local currencies, with management actively monitoring the market to mitigate exchange rate risks - The Group's transactions are primarily denominated in Euros, US Dollars, and local currencies where operations are conducted, including Polish Zloty, Czech Koruna, and British Pounds[55] - The Group will closely monitor the foreign exchange market and take reasonable and effective measures from time to time to eliminate any negative impact caused by exchange rate risks as much as possible[55] Capital and Other Commitments Except for plant and machinery capital commitments disclosed in Note 18, the Group and Company had no other commitments at period-end - Except as disclosed in Note 18 to the interim financial information, the Group and the Company had no other commitments as of June 30, 2025, and December 31, 2024[56] Contingent Liabilities As of June 30, 2025, and December 31, 2024, the Group and Company had no significant contingent liabilities - As of June 30, 2025, and December 31, 2024, the Group and the Company had no significant contingent liabilities[57] Other Information This section provides supplementary information on rights issue proceeds, EHS measures, outlook, employees, listed securities, and corporate governance, including Board member introductions Use of Proceeds from Rights Issue The Company completed a rights issue in October 2024, raising HKD 46.4 million, with most funds used for working capital at Polish and French technical centers, and HKD 6.4 million remaining for Hong Kong headquarters - The Company completed a rights issue on October 21, 2024, raising net proceeds of approximately HKD 46.4 million[58] Use of Proceeds from Rights Issue and Unutilized Balance | Intended Use | Intended Use of Proceeds from Rights Issue (HKD millions) | Actual Use of Net Proceeds as of June 30, 2025 (HKD millions) | Unutilized Net Proceeds as of June 30, 2025 (HKD millions) | | :--- | :--- | :--- | :--- | | For working capital of the Group's production plants in Poland and the Czech Republic | 25.5 | – | 0.2 | | For working capital of the Company's headquarters in Hong Kong | 11.6 | 5.4 | 6.2 | | For working capital of the Group's technical centers in Poland and France | 9.3 | 9.3 | – | | Total | 46.4 | 14.7 | 6.4 | Environmental, Health and Safety The Group is committed to environmental protection and employee health and safety, implementing control plans, obtaining permits, providing training, and complying with regulations - The Group is committed to protecting human health, natural resources, and the global environment, having adopted hazardous substance control plans and chemical assessment procedures, and obtained necessary environmental permits[59] - The Group strictly complies with various environmental laws and regulations related to emissions and waste generation from its production facilities into land, air, and water[60] - The Group prioritizes employee health and safety, providing occupational health and safety training and implementing human resource policies to reduce accidents[60] Outlook The Group anticipates global economic uncertainty from geopolitical tensions and tariffs, but expects Eurozone growth, with the Czech plant closure enhancing efficiency, and continued R&D investment for sustainable development - Geopolitical tensions, the Russia-Ukraine conflict, and tariff threats will add uncertainty to the future global political and economic landscape[62] - European passenger car production in 2024 increased by 4.4% compared to 2023, but remains 18.6% below pre-pandemic levels, indicating room for further recovery[63] - The International Monetary Fund forecasts Eurozone GDP to grow by 1.5% in 2025, signaling stable economic development in Europe[63] - The Czech plant closure plan is progressing smoothly, with production lines expected to be transferred to Poland by the end of this year and the premises returned to the landlord by the end of Q1 next year; management believes this will enhance resource integration efficiency and capacity utilization[64] - The Group will continue to invest in R&D and engineering activities, collaborating closely with automotive manufacturers to develop innovative solutions to maintain industry leadership and long-term sustainable development[65] Employees As of June 30, 2025, the Group had 2,013 employees with a total cost of HKD 392.3 million, offering attractive compensation, retirement plans, and benefits Employee Count and Cost | Indicator | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Number of employees | 2,013 employees | 2,360 employees | | Total employee cost | HKD 392.3 million | HKD 289.3 million | - The Group offers comprehensive and attractive compensation, retirement plans, and benefits to its employees, including defined benefit pension plans and MPF schemes[66] Purchase, Sale or Redemption of the Company's Listed Securities During the review period, neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities on any exchange - During the review period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities on The Stock Exchange of Hong Kong Limited or any other securities exchange[67] Compliance with Corporate Governance Code The Company complied with the Corporate Governance Code provisions in Appendix C1 of the Listing Rules for the six months ended June 30, 2025 - The Company complied with the code provisions of the Corporate Governance Code set out in Appendix C1 to the Listing Rules of The Stock Exchange for the six months ended June 30, 2025[68] Acknowledgement The Board Chairman extends sincere gratitude to customers, suppliers, shareholders, management, and employees for their support and dedication during the period - The Chairman of the Board, on behalf of the Board, extends sincere gratitude to all customers, suppliers, and shareholders for their continuous support to the Group; and also expresses deep appreciation and commendation to all management and employees of the Group for their tireless efforts and concerted dedication during the period[69] Board Composition As of the announcement date, the Board comprises Mr. Dong Xiaojie (Chairman), two Executive Directors, and three Independent Non-executive Directors - As of the announcement date, the Board comprises Mr. Dong Xiaojie (Chairman), Mr. Liu Xihe (Executive Director), Dr. Xi Jianpeng (Executive Director), Mr. Huang Kejie (Independent Non-executive Director), Mr. Lo Ka Ming (Independent Non-executive Director), and Ms. Peng Fan (Independent Non-executive Director)[71]