世纪联合控股(01959) - 2025 - 中期业绩

Financial Summary The group's revenue decreased by 38.5% to RMB 454.2 million, while gross profit increased by 61.9% to RMB 17.4 million, and loss attributable to owners of the parent significantly narrowed | Indicator | Six Months Ended 30 June 2025 (RMB million) | Six Months Ended 30 June 2024 (RMB million) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 454.2 | 738.0 | -38.5% | | Gross Profit | 17.4 | 10.8 | +61.9% | | Gross Profit Margin | 3.8% | 1.5% | +2.3 percentage points | | Loss attributable to owners of the parent | (16.0) | (52.4) | -69.5% (loss narrowed) | | Basic loss per share | RMB (3.15) cents | RMB (10.36) cents | -69.6% (loss narrowed) | Condensed Interim Consolidated Financial Statements This section presents the group's financial performance, comprehensive income, and financial position for the interim period, highlighting key changes in revenue, profit, and assets Condensed Interim Consolidated Statement of Profit or Loss The group's revenue for the six months ended 30 June 2025 decreased by 38.5% to RMB 454.2 million, while gross profit increased by 61.9% to RMB 17.4 million, and loss for the period significantly narrowed | Indicator | Six Months Ended 30 June 2025 (RMB thousand) | Six Months Ended 30 June 2024 (RMB thousand) | | :--- | :--- | :--- | | Revenue | 454,249 | 738,039 | | Cost of sales | (436,843) | (727,289) | | Gross profit | 17,406 | 10,750 | | Other income and gains | 22,599 | 20,133 | | Selling and distribution expenses | (19,280) | (30,390) | | Administrative expenses | (33,719) | (46,710) | | Other expenses | (75) | (473) | | Finance costs | (2,984) | (5,644) | | Loss before tax | (16,053) | (52,334) | | Income tax expense | (181) | (106) | | Loss for the period | (16,234) | (52,440) | | Loss attributable to owners of the parent | (15,984) | (52,356) | | Basic and diluted loss per share | RMB (3.15) cents | RMB (10.36) cents | Condensed Interim Consolidated Statement of Comprehensive Income The group's total comprehensive loss for the six months ended 30 June 2025 significantly narrowed to RMB 16.184 million, primarily due to reduced loss for the period and a positive shift in exchange differences from overseas operations | Indicator | Six Months Ended 30 June 2025 (RMB thousand) | Six Months Ended 30 June 2024 (RMB thousand) | | :--- | :--- | :--- | | Loss for the period | (16,234) | (52,440) | | Exchange differences on translation of overseas operations | 50 | (175) | | Total comprehensive loss for the period | (16,184) | (52,615) | | Total comprehensive loss attributable to owners of the parent | (15,934) | (52,531) | Condensed Interim Consolidated Statement of Financial Position As of 30 June 2025, total current assets decreased to RMB 250.703 million, primarily due to reduced cash and cash equivalents, leading to a decrease in net current assets and total equity | Indicator | 30 June 2025 (RMB thousand) | 31 December 2024 (RMB thousand) | | :--- | :--- | :--- | | ASSETS | | | | Total non-current assets | 188,103 | 189,955 | | Total current assets | 250,703 | 334,050 | | LIABILITIES | | | | Total current liabilities | 225,711 | 252,711 | | Total non-current liabilities | 129,092 | 171,134 | | EQUITY | | | | Total equity | 84,003 | 100,160 | | Equity attributable to owners of the parent | 84,163 | 100,070 | | Net current (liabilities) / assets | 24,992 | 81,339 | Notes to the Financial Statements This section provides detailed explanations and disclosures for the condensed interim consolidated financial statements, covering company information, accounting policies, and specific financial items Company and Group Information The company, incorporated in the Cayman Islands and listed in Hong Kong, primarily engages in motor vehicle sales and services in China - The Company was incorporated in the Cayman Islands as an exempted company with limited liability on 4 October 2018 and is listed on the Main Board of The Stock Exchange of Hong Kong Limited[13] - The Company is an investment holding company and its subsidiaries are principally engaged in the sale of motor vehicles and provision of services in the PRC[13] Basis of Presentation and Changes in Accounting Policies Interim financial information is prepared in accordance with IAS 34 and presented in RMB, with no significant financial impact from newly adopted IFRS standards - The unaudited condensed interim consolidated financial information has been prepared in accordance with International Accounting Standard 34 Interim Financial Reporting and is presented in RMB[14] - The Group has adopted a number of new and revised International Financial Reporting Standards, including IFRS 17, IAS 1, IAS 8, and IAS 12, which did not have a significant financial impact on the condensed interim consolidated financial information[15] Operating Segment Information The group operates as a single segment in Mainland China, focusing on motor vehicle sales and services, with no single customer contributing 10% or more of total revenue - The Group is principally engaged in the sale of motor vehicles and provision of services in Mainland China, which is considered as a single operating segment, thus no further operating segment information is presented[16] - The Group operates its businesses in one geographical segment, namely Mainland China, and accordingly, no geographical segment information is presented[17] - During the reporting period, no revenue from sales of motor vehicles or provision of services to a single customer accounted for 10% or more of the Group’s total revenue[18] Revenue, Other Income and Gains Total revenue decreased by 38.5% to RMB 454.2 million, primarily from motor vehicle sales, while other income and gains increased by 12.4% to RMB 22.599 million, mainly from commission income and sales support Revenue from Contracts with Customers | Type of Goods or Services | Six Months Ended 30 June 2025 (RMB thousand) | Six Months Ended 30 June 2024 (RMB thousand) | | :--- | :--- | :--- | | Motor vehicle sales | 298,662 | 553,199 | | Others | 155,587 | 184,840 | | Total revenue from contracts with customers | 454,249 | 738,039 | | Timing of revenue recognition: | | | | Transferred at a point in time | 370,577 | 661,935 | | Transferred over time | 83,672 | 76,104 | Other Income and Gains | Other Income and Gains Items | Six Months Ended 30 June 2025 (RMB thousand) | Six Months Ended 30 June 2024 (RMB thousand) | | :--- | :--- | :--- | | Bank interest income | 1,003 | 487 | | Government grants received | 443 | 607 | | Gain on disposal of property, plant and equipment | 3,917 | 1,417 | | Others | 17,236 | 17,622 | | Total | 22,599 | 20,133 | - Other income mainly includes commission income for releasing car mortgages for customers, car financing commission income from third-party financing institutions, and sales support provided by car manufacturers for operating activities[23] Loss Before Tax Loss before tax significantly narrowed from RMB 52.334 million to RMB 16.053 million, driven by reduced costs and increased gains from asset disposals Loss Before Tax Components | Expense/Income Items | Six Months Ended 30 June 2025 (RMB thousand) | Six Months Ended 30 June 2024 (RMB thousand) | | :--- | :--- | :--- | | Employee benefit expenses (excluding directors' emoluments) | 24,906 | 37,103 | | Cost of inventories sold | 350,764 | 652,180 | | Cost of services rendered | 67,308 | 54,225 | | Depreciation of property, plant and equipment | 16,943 | 21,293 | | Depreciation of right-of-use assets | 5,476 | 7,514 | | Gain on disposal of property, plant and equipment | (3,917) | (1,417) | | Write-down/(reversal of write-down) of inventories to net realisable value | (4,021) | (2,631) | | Interest income | (1,003) | (487) | Finance Costs Finance costs decreased by 47.1% to RMB 2.984 million, primarily due to lower interest on bank and other borrowings and lease liabilities Finance Cost Breakdown | Finance Cost Items | Six Months Ended 30 June 2025 (RMB thousand) | Six Months Ended 30 June 2024 (RMB thousand) | | :--- | :--- | :--- | | Interest on bank and other borrowings | 1,766 | 4,356 | | Interest on lease liabilities | 1,218 | 1,288 | | Total | 2,984 | 5,644 | Income Tax Entities in Cayman Islands and BVI are exempt from income tax, while certain PRC subsidiaries enjoy tax incentives, leading to a slight increase in income tax expense to RMB 0.181 million due to increased taxable profit - The Group’s entities incorporated in the Cayman Islands and the British Virgin Islands are not subject to any income tax[28] - In 2025, certain subsidiaries of the Group operating in Mainland China were certified as small-profit enterprises, enjoying a 75% reduction on taxable income up to RMB 3,000,000 and a preferential corporate income tax rate of 20%[30] Income Tax Expense | Income Tax Items | Six Months Ended 30 June 2025 (RMB thousand) | Six Months Ended 30 June 2024 (RMB thousand) | | :--- | :--- | :--- | | Current — China for the period | 181 | 1,028 | | Deferred income tax | — | (922) | | Total tax expense for the period | 181 | 106 | Dividends The Board does not recommend paying any interim dividend for the six months ended 30 June 2025, consistent with the prior period - The Board does not recommend the payment of any interim dividend for the six months ended 30 June 2025 (six months ended 30 June 2024: nil)[33] Loss Per Share Attributable to Ordinary Equity Holders of the Parent Basic and diluted loss per share significantly narrowed to RMB (3.15) cents, with no diluted adjustment due to the anti-dilutive effect of outstanding share options Loss Per Share Calculation | Indicator | Six Months Ended 30 June 2025 | Six Months Ended 30 June 2024 | | :--- | :--- | :--- | | Loss attributable to ordinary equity holders of the parent (RMB thousand) | (15,984) | (52,356) | | Weighted average number of ordinary shares in issue (thousands) | 508,202 | 505,202 | | Basic and diluted loss per share (RMB cents) | (3.15) | (10.36) | - No adjustment has been made to the basic loss per share for dilution as the outstanding share options had an anti-dilutive effect on the basic loss per share presented[35] Property, Plant and Equipment Asset acquisition costs significantly decreased, while net gains from asset disposals increased, reflecting a shift in asset management strategy Property, Plant and Equipment Movements | Item | Six Months Ended 30 June 2025 (RMB thousand) | Six Months Ended 30 June 2024 (RMB thousand) | | :--- | :--- | :--- | | Cost of assets acquired | 4,897 | 12,557 | | Net book value of assets disposed of | 7,241 | 10,783 | | Net gain on disposal | 3,917 | 1,417 | Inventories Total inventories slightly decreased to RMB 117.134 million as of 30 June 2025, with vehicles remaining the largest component, and pledged inventories for borrowings increased Inventories Breakdown | Type of Inventories | 30 June 2025 (RMB thousand) | 31 December 2024 (RMB thousand) | | :--- | :--- | :--- | | Vehicles | 107,150 | 108,378 | | Spare parts | 9,984 | 10,301 | | Total | 117,134 | 118,679 | - As at 30 June 2025, inventories with a carrying amount of approximately RMB 60,966,000 were pledged by the Group to secure interest-bearing bank and other borrowings, an increase from RMB 45,793,000 as at 31 December 2024[39] Trade Receivables Trade receivables increased to RMB 19.915 million as of 30 June 2025, primarily within three months, with an increase in impairment provision, while the group maintains strict credit control Trade Receivables Net Amount | Indicator | 30 June 2025 (RMB thousand) | 31 December 2024 (RMB thousand) | | :--- | :--- | :--- | | Trade receivables | 20,116 | 12,343 | | Impairment | (201) | (123) | | Net | 19,915 | 12,220 | Trade Receivables Ageing Analysis | Ageing Analysis | 30 June 2025 (RMB thousand) | 31 December 2024 (RMB thousand) | | :--- | :--- | :--- | | Within 3 months | 12,874 | 10,407 | | 3 to 12 months | 7,041 | 1,813 | | Total | 19,915 | 12,220 | Movement in Impairment Provision | Movement in Impairment Provision | 30 June 2025 (RMB thousand) | 31 December 2024 (RMB thousand) | | :--- | :--- | :--- | | At beginning of period/year | 123 | 59 | | Impairment | 78 | 64 | | At end of period/year | 201 | 123 | Prepayments, Other Receivables and Other Assets Total prepayments, other receivables, and other assets decreased to RMB 73.975 million, mainly due to a significant reduction in advances to suppliers, with no significant credit concentration risk Prepayments, Other Receivables and Other Assets Breakdown | Item | 30 June 2025 (RMB thousand) | 31 December 2024 (RMB thousand) | | :--- | :--- | :--- | | Advances to suppliers | 15,530 | 81,137 | | Deposits | 33,387 | 10,486 | | Recoverable value-added tax | 17,604 | 16,665 | | Prepayments | 358 | 1,702 | | Other receivables | 7,096 | 8,662 | | Total | 73,975 | 118,652 | - The Group strives to maintain strict control over its outstanding receivables to minimise credit risk, and there is no significant concentration of credit risk[42] Trade Payables and Bills Payable Total trade payables and bills payable slightly decreased to RMB 29.336 million, primarily due within three months, with bills payable secured by pledged deposits Trade Payables and Bills Payable Ageing Analysis | Ageing Analysis | 30 June 2025 (RMB thousand) | 31 December 2024 (RMB thousand) | | :--- | :--- | :--- | | Within 3 months | 16,628 | 11,000 | | 3 to 12 months | 12,708 | 18,021 | | Over 1 year | 0 | 1,778 | | Total | 29,336 | 30,799 | - Trade payables and bills payable are interest-free and normally settled within 90 to 180 days[44] - As at 30 June 2025, the Group’s bills payable were secured by pledged deposits of approximately RMB 4,334,000[44] Interest-Bearing Bank and Other Borrowings Total interest-bearing bank and other borrowings decreased to RMB 91.129 million, all current, with interest rates ranging from 2.75% to 4.92% and secured by inventories, right-of-use assets, and related party buildings Interest-Bearing Bank and Other Borrowings Breakdown | Type of Borrowings | 30 June 2025 (RMB thousand) | 31 December 2024 (RMB thousand) | | :--- | :--- | :--- | | Current bank and other borrowings | 91,129 | 95,610 | | Non-current bank and other borrowings | 0 | 2,006 | | Total | 91,129 | 97,616 | - The Group’s bank and other borrowings are secured by certain inventories (RMB 60,966,000), right-of-use assets (RMB 8,840,000) and buildings owned by a related party[45] - The effective interest rates of the borrowings range from 2.75% to 4.92% per annum[45] Share Capital The company's issued share capital increased to RMB 4.585 million due to the exercise of share options Share Capital Structure | Share Capital Type | 30 June 2025 (HKD) | 31 December 2024 (HKD) | | :--- | :--- | :--- | | Authorised share capital (2,000,000,000 shares of HKD 0.01 each) | 20,000,000 | 20,000,000 | | Issued and fully paid share capital (508,202,000 shares of HKD 0.01 each) | 5,082,020 | 5,052,020 | | Equivalent to (RMB thousand) | 4,585 | 4,558 | - 3,000,000 share options were exercised at a subscription price of HKD 0.48 per share, resulting in the issue of 3,000,000 shares for a total cash consideration of HKD 1,440,000 (approximately RMB 1,296,000)[47] Related Party Transactions and Balances The group has related party transactions and balances with Mr. Luo Houjie and his controlled companies, with RMB 89.911 million due to Mr. Luo Houjie, mostly repayable in 2026, unsecured and interest-free - Key related parties include Mr. Luo Houjie, a director of the Company, and Zhongshan Dongri Automobile Co., Ltd. and Zhongshan Chuangshiji Automobile Co., Ltd. controlled by him[48] Related Party Balances | Related Party | 30 June 2025 (RMB thousand) | 31 December 2024 (RMB thousand) | | :--- | :--- | :--- | | Amount due to Mr. Luo Houjie | 89,911 | 131,041 | - Outstanding balances with related parties are unsecured and interest-free, with RMB 85,000,000 repayable in 2026 and the remainder repayable on demand[50] - During the reporting period, certain subsidiaries leased buildings and leasehold land owned by Zhongshan Dongri Automobile Co., Ltd. and Zhongshan Chuangshiji Automobile Sales and Service Co., Ltd. at zero consideration under rental concessions[51] Management Discussion and Analysis This section provides an overview of the industry, a review of the group's business and financial performance, and an outlook on future strategies and market conditions Industry Overview In H1 2025, China's automotive market saw record production and sales, driven by new energy vehicles, but intense competition and price wars squeezed profit margins - In the first half of 2025, China's automobile production and sales both exceeded 15 million units for the first time, achieving double-digit year-on-year growth[52] - New energy vehicles accounted for 44.3% of market share, becoming the core driving force for growth in the automotive market[52] - Automobile manufacturers and dealers faced squeezed profit margins or even losses due to price wars, posing a challenge to achieve profit growth alongside sales growth[52] Business Review The group's revenue decreased by 38.5% to RMB 454.2 million, but gross profit increased by 61.9% to RMB 17.4 million, with a gross profit margin of 3.8%, operating 19 stores and representing 13 automotive brands in the Greater Bay Area Key Financial Indicators | Indicator | Six Months Ended 30 June 2025 (RMB million) | Six Months Ended 30 June 2024 (RMB million) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 454.2 | 738.0 | -38.5% | | Gross Profit | 17.4 | 10.8 | +61.9% | | Gross Profit Margin | 3.8% | 1.5% | +2.3 percentage points | - The Group operates a total of 19 stores, one insurance agency company, three used car trading centers, and one company engaged in charging station construction and ride-hailing operations in Greater Bay Area cities such as Zhongshan and Foshan[53] - The Group is authorised by car manufacturers for as many as 13 brands, including GAC Aion, Hyper, Leapmotor, IM Motors, FAW-Volkswagen, Buick, Chevrolet, FAW Toyota, Dongfeng Nissan, Cadillac, and Beijing Hyundai[54] Motor Vehicle Sales Motor vehicle sales revenue decreased by 46% to RMB 298.7 million, with new car sales impacted by market competition and consumer sentiment, and used car sales by new car price reductions Motor Vehicle Sales Performance | Sales Type | Six Months Ended 30 June 2025 (RMB million) | Six Months Ended 30 June 2024 (RMB million) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Total motor vehicle sales | 298.7 | 553.2 | -46% | | New car sales revenue | 294.0 (2,797 units) | 543.2 (4,832 units) | -45.9% | | Used car sales revenue | 4.6 (376 units) | 10.0 (335 units) | -54% | - The decline in new car sales was mainly due to the complex and volatile international environment, continuous competition in the domestic automotive market, varying regional subsidy policies, strong consumer wait-and-see sentiment, and slow recovery in new car sales[56] - The sluggish growth in used car sales primarily stemmed from the “Two New” policies and frequent price reductions in the new car market, leading to insufficient demand for used cars and low transaction prices[57] Other Comprehensive Automotive Services Other comprehensive automotive services revenue decreased by 15.8% to RMB 155.6 million, with repair services showing high gross profit margin despite revenue decline, and insurance agency services revenue growing but gross profit significantly falling Other Comprehensive Automotive Services Performance | Service Type | Six Months Ended 30 June 2025 (RMB million) | Six Months Ended 30 June 2024 (RMB million) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Total comprehensive automotive services revenue | 155.6 | 184.8 | -15.8% | | Repair and maintenance services revenue | 71.9 | 108.7 | -33.9% | | Repair and maintenance services gross profit margin | 32.4% | N/A | N/A | | Insurance agency services revenue | 50.6 | 43.0 | +15.0% | | Insurance agency services gross profit | 1.6 | 5.8 | -72.4% | | Other services revenue | 33.1 | 33.1 | 0% | New Energy Vehicle Related Services New energy vehicle related services revenue increased by 5.7% to RMB 25.8 million, with gross profit growing by 17.6% to RMB 2.0 million, as a key development strategy New Energy Vehicle Related Services Performance | Indicator | Six Months Ended 30 June 2025 (RMB million) | Six Months Ended 30 June 2024 (RMB million) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | New energy vehicle related services revenue | 25.8 | 24.4 | +5.7% | | New energy vehicle related services gross profit | 2.0 | 1.7 | +17.6% | - New energy vehicle related services include charging service fees generated from the electric vehicle charging network in the Greater Bay Area, and rental and management fees from participating in online ride-hailing operations[62] Prospects and Outlook The group anticipates continued growth in automotive consumption in H2 2025, driven by government policies and new product launches, while adapting its brand structure, operating model, and expanding new energy charging stations with a light-asset approach - In the second half of 2025, the competitive landscape of the automotive market will not fundamentally change, and the intensity of price wars will decrease but not completely cease[64] - The Group will continue to adjust its brand structure and operating model to quickly adapt to market changes, and adjust its organisational structure and team effectiveness to promote business development[64] - The Group will transition to a light-asset investment model for new energy charging station expansion, and continuously seek new business growth and profit contribution points, as well as other industry breakthroughs[64] Financial Performance Analysis Despite a decline in revenue, the group's financial performance improved with significantly narrowed loss, enhanced gross profit and margin due to business model transformation and cost control, and reduced operating expenses Revenue Total revenue decreased by 38.5% to RMB 454.2 million, primarily due to lower motor vehicle sales, which accounted for 65.8% of total revenue Revenue Breakdown | Revenue Source | Six Months Ended 30 June 2025 (RMB million) | Six Months Ended 30 June 2024 (RMB million) | Proportion (2025) | Proportion (2024) | | :--- | :--- | :--- | :--- | :--- | | Motor vehicle sales | 298.7 | 553.2 | 65.8% | 75.0% | | Other comprehensive automotive services | 155.6 | 184.8 | 34.2% | 25.0% | | Total Revenue | 454.2 | 738.0 | 100% | 100% | - The decrease in revenue was mainly due to the decline in motor vehicle sales[65] Cost of Sales and Gross Profit Margin Cost of sales decreased by 39.9% to RMB 436.8 million, while gross profit increased by 61.1% to RMB 17.4 million, and gross profit margin improved from 1.5% to 3.8%, reflecting a shift towards service-oriented business Cost of Sales and Gross Profit Margin Performance | Indicator | Six Months Ended 30 June 2025 (RMB million) | Six Months Ended 30 June 2024 (RMB million) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Cost of sales | 436.8 | 727.3 | -39.9% | | Gross profit | 17.4 | 10.8 | +61.1% | | Gross profit margin | 3.8% | 1.5% | +2.3 percentage points | - Cost of sales primarily comprised motor vehicle costs, accounting for approximately 70.0% (prior period: approximately 81.3%) of the cost of sales during the reporting period[66] - The increase in gross profit was mainly due to the Group’s transformation from a single sales-oriented model to a service-oriented model, allocating limited resources to business segments with higher profit contributions[66] Other Income and Gains Other income and gains increased by 12.4% to RMB 22.6 million, primarily from commission income for car mortgages, car explosion-proof film, third-party financing, and advertising support from manufacturers Other Income and Gains Performance | Indicator | Six Months Ended 30 June 2025 (RMB million) | Six Months Ended 30 June 2024 (RMB million) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Other income and gains | 22.6 | 20.1 | +12.4% | - Mainly attributable to commission income for releasing car mortgages for customers, commission income for car explosion-proof film, car financing commission income from third-party financing institutions, and advertising support provided by car manufacturers for advertising activities[67] Selling and Distribution Expenses Selling and distribution expenses significantly decreased by 36.6% to RMB 19.3 million, mainly due to reduced salaries, wages, advertising, and office expenses for sales personnel Selling and Distribution Expenses Performance | Indicator | Six Months Ended 30 June 2025 (RMB million) | Six Months Ended 30 June 2024 (RMB million) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Selling and distribution expenses | 19.3 | 30.4 | -36.6% | - The decrease in selling and distribution expenses was mainly due to lower salaries and wages for sales personnel, advertising, and office expenses compared to the prior period[68] Administrative Expenses Administrative expenses decreased by RMB 13.0 million to RMB 33.7 million, primarily due to reductions in administrative staff salaries, depreciation, maintenance, and miscellaneous expenses, despite an increase in rental expenses Administrative Expenses Breakdown | Indicator | Six Months Ended 30 June 2025 (RMB million) | Six Months Ended 30 June 2024 (RMB million) | Year-on-Year Change (RMB million) | | :--- | :--- | :--- | :--- | | Administrative expenses | 33.7 | 46.7 | -13.0 | | Decrease in administrative staff salaries and wages | -2.5 | N/A | N/A | | Increase in rental expenses | +4.1 | N/A | N/A | | Decrease in depreciation and amortisation of property, plant and equipment and right-of-use assets | -5.0 | N/A | N/A | | Decrease in repair and maintenance expenses | -1.0 | N/A | N/A | | Decrease in miscellaneous expenses | -8.4 | N/A | N/A | Finance Costs Finance costs significantly decreased to RMB 3.0 million, primarily due to reduced financing needs and lower bank loan interest rates Finance Costs Performance | Indicator | Six Months Ended 30 June 2025 (RMB million) | Six Months Ended 30 June 2024 (RMB million) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Finance costs | 3.0 | 5.6 | -46.4% | - The decrease in finance costs was due to the Group’s reduced financing needs and lower bank loan interest rates[70] Loss for the Period Loss for the period significantly narrowed to RMB 16.2 million, mainly due to improved new car inventory structure, gross profit margin, and reduced administrative expenses Loss for the Period Performance | Indicator | Six Months Ended 30 June 2025 (RMB million) | Six Months Ended 30 June 2024 (RMB million) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Loss for the period | 16.2 | 52.4 | -69.1% (loss narrowed) | - The significant reduction in loss was mainly due to improvements in new car inventory structure and new car gross profit margin, as well as reduced administrative expenses[71] Income Tax Expense Income tax expense slightly increased to RMB 0.2 million, primarily due to an increase in the group's taxable profit during the reporting period Income Tax Expense Performance | Indicator | Six Months Ended 30 June 2025 (RMB million) | Six Months Ended 30 June 2024 (RMB million) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Income tax expense | 0.2 | 0.1 | +100% | - The increase in income tax expense was mainly due to the increase in the Group’s taxable profit during the reporting period[72] Liquidity, Financial Resources and Capital Structure The group maintains prudent financial management, with operating cash flow and short-term borrowings as primary funding sources, a decreased net gearing ratio, and reduced cash and interest-bearing borrowings Liquidity and Capital Structure Indicators | Indicator | 30 June 2025 | 31 December 2024 | | :--- | :--- | :--- | | Net gearing ratio | 2.16 times | 2.28 times | | Pledged bank deposits and cash and cash equivalents balance (RMB million) | 39.7 | 84.5 | | Interest-bearing bank and other borrowings (RMB million) | 91.1 | 97.6 | | Total equity attributable to owners of the parent (RMB million) | 84.2 | 100.1 | - The decrease in net gearing ratio was mainly due to the significant contraction of the Group’s loss and liabilities during the reporting period[73] - Interest-bearing bank and other borrowings are all denominated in RMB, with interest rates ranging from 2.75% to 5.3% per annum[73] Capital Expenditure and Commitments As of 30 June 2025, capital commitments related to building expenditure significantly decreased to RMB 0.5 million Capital Commitments | Item | 30 June 2025 (RMB million) | 31 December 2024 (RMB million) | | :--- | :--- | :--- | | Capital commitments relating to building expenditure | 0.5 | 4.7 | Foreign Exchange The group's foreign exchange risk is negligible as most transactions are RMB-denominated in China, and no derivative instruments were used for hedging during the period - The Group primarily operates in China, with most operating transactions denominated in RMB, resulting in negligible foreign exchange risk[76] - The Group did not enter into any derivative instruments to hedge its foreign exchange risk during the reporting period[76] Contingent Liabilities As of 30 June 2025, the group had no significant contingent liabilities - As at 30 June 2025, the Group had no significant contingent liabilities (as at 31 December 2024: nil)[77] Significant Investments, Acquisitions and Disposals The group had no significant acquisitions, disposals, investments, or capital asset plans during the reporting period and up to the announcement date - During the reporting period and up to the date of this announcement, the Group had no significant acquisitions or disposals[78] - As at the date of this announcement, the Group had no significant investments or plans for capital assets[79] Pledge of Assets As of 30 June 2025, the group's utilised bank facilities of approximately RMB 91.1 million were secured by certain inventories, right-of-use assets, and pledged deposits Pledged Assets | Type of Pledged Assets | 30 June 2025 (RMB million) | 31 December 2024 (RMB million) | | :--- | :--- | :--- | | Bank facilities utilised | 91.1 | 97.6 | | Certain inventories | 61.0 | 45.8 | | Net book value of buildings | 0 | 5.0 | | Net book value of right-of-use assets | 8.8 | 8.6 | | Pledged deposits (for bills payable) | 4.3 | 4.5 | | Other pledged deposits | 0 | 1.0 | Employees and Remuneration Policy As of 30 June 2025, the group had 488 employees, primarily in China, offering competitive remuneration reviewed annually based on performance, with directors' emoluments determined by the Board upon recommendation from the Remuneration Committee Employee Numbers | Indicator | 30 June 2025 | 31 December 2024 | | :--- | :--- | :--- | | Total number of employees | 488 employees | 526 employees | - The Group offers a competitive remuneration package to its employees, with annual reviews of salary increments, discretionary bonuses, and promotions based on individual performance[81] - The emoluments of executive directors are reviewed by the Remuneration Committee, and those of independent non-executive directors are determined by the Board based on the Remuneration Committee’s recommendations[81] Changes Since 31 December 2024 No other significant changes to the group's financial position or information disclosed in the 2024 annual report, except as stated in this announcement - Save as disclosed in this announcement, there have been no other significant changes to the Group’s financial position or the information disclosed in the “Management Discussion and Analysis” section of the Company’s 2024 annual report[82] Purchase, Sale or Redemption of the Company's Listed Securities Neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed securities during the six months ended 30 June 2025 and up to the announcement date - During the six months ended 30 June 2025 and up to the date of this announcement, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company’s listed securities[83] Corporate Governance and Other Information This section details the company's adherence to corporate governance standards, post-reporting period events, securities trading policies, share option scheme, and other relevant disclosures Corporate Governance Code The company complied with all code provisions of the Corporate Governance Code, with a deviation where the Chairman and CEO roles are held by the same person, which the Board believes benefits management and ensures power balance - The Company has complied with all code provisions of the Corporate Governance Code as set out in Appendix C1 to the Listing Rules, save for the deviation where both the Chairman and Chief Executive Officer roles are held by Mr. Luo[84] - The Board believes that vesting the roles of Chairman and Chief Executive Officer in the same person facilitates the Group’s management, and the operations of senior management and the Board ensure a balance of power and authority[84] Events After Reporting Period A significant event after the reporting period was the resignation of Ernst & Young as the company's auditor due to fee disagreement, and the appointment of Pacia CPA Limited as the new auditor - Ernst & Young resigned as the Company’s auditor, effective from 27 August 2025, due to the Company’s inability to reach a consensus with Ernst & Young on the audit fees for the financial period ending 31 December 2025[85] - Pacia CPA Limited was appointed as the new auditor of the Company, effective from 27 August 2025, upon the recommendation of the Company’s audit committee[85] Standard Code for Securities Transactions by Directors The company adopted and confirmed compliance with the Standard Code for Securities Transactions by Directors of Listed Issuers during the reporting period - The Company has adopted the Standard Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 to the Listing Rules[86] - All Directors of the Company have confirmed their compliance with the required standards set out in the Standard Code throughout the six months ended 30 June 2025[86] Share Option Scheme The company's share option scheme, adopted on 16 September 2019, aims to incentivise directors and employees, with 21.8 million options outstanding as of 30 June 2025, representing approximately 4.3% of issued share capital - The Company adopted a share option scheme on 16 September 2019, aiming to provide any director and full-time employee of any member of the Group with an opportunity to acquire ownership interests in the Company and encourage their contributions to enhance company value[87] Share Option Movements | Indicator | 1 January 2025 | Granted | Exercised | Lapsed | 30 June 2025 | | :--- | :--- | :--- | :--- | :--- | :--- | | Number of share options for directors | 12,680,000 | — | 3,000,000 | 2,880,000 | 6,800,000 | | Number of share options for employees | 14,738,000 | 5,500,000 | — | 5,238,000 | 15,000,000 | | Total | 27,418,000 | 5,500,000 | 3,000,000 | 8,118,000 | 21,800,000 | - As at 30 June 2025, 21,800,000 share options remained outstanding under the Company’s share option scheme, representing approximately 4.3% of the Company’s issued share capital as at the date of this announcement[87] Review by Audit Committee The Audit Committee reviewed the unaudited interim results for the six months ended 30 June 2025 and confirmed that the financial information and report were prepared in accordance with applicable standards and regulations, with no disagreements - The Audit Committee has reviewed the unaudited interim results for the six months ended 30 June 2025 and discussed them with the Company’s management[95] - The Audit Committee is of the opinion that the financial information and report have been prepared in accordance with applicable accounting standards, the Listing Rules, and other applicable legal requirements, with adequate disclosures, and the Audit Committee has no disagreement[95] Sufficiency of Public Float The company maintained the public float required by the Listing Rules, with at least 25% of its total issued shares held by the public - The Company has maintained the public float as required by the Listing Rules, with at least 25% of the total issued shares of the Company held by the public[96] Publication of Interim Results and Interim Report The interim results announcement for the reporting period has been published on the HKEX and company websites, and the interim report will be dispatched to shareholders and published on the same websites in due course - The interim results announcement for the reporting period has been published on the HKEX website (www.hkexnews.hk) and the Company’s website (www.car2000.com.cn)[97](index=97&type=chunk) - The interim report for the reporting period will be dispatched to shareholders in due course according to their chosen method of receiving communications and will be published on the HKEX and the Company’s aforementioned websites[97] Acknowledgement The Board extends its sincere gratitude to management, all employees for their dedicated service and contributions, and shareholders for their continuous support to the group - The Board extends its sincere gratitude to the management and all employees for their dedicated service and contributions, and to all shareholders for their continuous support to the Group[98] By Order of the Board This announcement is issued by Mr. Luo Houjie, Chairman, Executive Director, and Chief Executive Officer, with the Board comprising three executive and three independent non-executive directors as of the announcement date - This announcement is issued by Mr. Luo Houjie, Chairman, Executive Director, and Chief Executive Officer[99] - As at the date of this announcement, the executive directors are Mr. Luo Houjie, Mr. Chen Huaquan and Ms. Li Huifang; and the independent non-executive directors are Mr. Li Weiqiang, Mr. Li Weining and Ms. Yan Fei[99]