宏信建发(09930) - 2025 - 中期财报

Company Profile Corporate Information Grandshores Construction Development disclosed its basic corporate information, including board members, committee composition, company secretary, authorized representatives, registered office, headquarters, Hong Kong principal place of business, share registrar, principal bankers, auditors, legal advisors, and company website - The Chairman of the Board is Mr. Kong Fanxing, the Chief Executive Officer is Mr. Zhan Jing, and the Co-Chief Financial Officer is Mr. Tang Li[8] - The company's registered office is in the Cayman Islands, its headquarters are in Tianjin, China, and its principal place of business in Hong Kong is in Causeway Bay[8][9] - The company's shares are listed on the Main Board of The Stock Exchange of Hong Kong Limited, with stock code 9930[9] Company Overview Grandshores Construction Development is a leading equipment operation service provider in China, ranking among the top global leasing enterprises, offering one-stop 'product + service' solutions with a diverse equipment portfolio and strong service capabilities, boasting the largest number of service outlets among Chinese providers and actively expanding overseas - Grandshores Construction Development is a leading equipment operation service provider in China, offering one-stop 'product + service' integrated solutions[10] - The company has the largest number of service outlets among equipment operation service providers in China and has deployed in multiple overseas regions to enhance global service capabilities[10] - The company's shares were listed on the Main Board of the Hong Kong Stock Exchange on May 25, 2023, with its direct controlling company being Far East Horizon Limited (stock code: 3360)[10] Performance Overview Grandshores Construction Development reported a 10.7% revenue decrease to RMB 4,350,062 thousand in H1 2025, with profit for the period plummeting 86.8% to RMB 35,490 thousand, alongside a gross margin decline to 21.6% and a slight rise in the asset-liability ratio to 69.0% Key Financial Data for H1 2025 (RMB thousands) | Metric | H1 2025 | H1 2024 | Change % | | :--- | :--- | :--- | :--- | | Total Revenue | 4,350,062 | 4,872,421 | -10.7% | | Operating Lease Service Revenue | 2,265,244 | 1,895,622 | 19.5% | | Engineering Technical Service Revenue | 1,138,882 | 1,946,261 | -41.5% | | Asset Management and Other Service Revenue | 945,936 | 1,030,538 | -8.2% | | Gross Profit | 940,667 | 1,559,325 | -39.7% | | Profit Before Tax | 50,276 | 406,890 | -87.6% | | Profit for the Period Attributable to Ordinary Equity Holders of the Company | 35,490 | 268,228 | -86.8% | | Basic Earnings Per Share (RMB) | 0.011 | 0.084 | -86.9% | | Gross Profit Margin | 21.6% | 32.0% | -10.4% | | Average Return on Equity | 0.6% | 4.9% | -4.3% | | Average Return on Total Assets | 0.2% | 1.6% | -1.4% | | Asset-Liability Ratio | 69.0% | 68.7% | 0.3% | | Total Assets | 36,581,356 | 36,434,181 (End of 2024) | 0.4% | | Total Liabilities | 25,253,610 | 24,975,831 (End of 2024) | 1.1% | - EBITDA margin (non-HKFRS measure) increased to 45.3% from 41.1% in the prior year period[10] Management Discussion and Analysis 1、Industry Environment and Company Response In H1 2025, global economic uncertainty increased while China's economy grew steadily, with the construction sector showing signs of recovery, infrastructure and manufacturing investment rising, and real estate construction area decline narrowing; the company actively responded by optimizing asset structure, refining operations, and deepening its "3+3+3" overseas development strategy through acquisitions - In H1 2025, China's GDP grew by 5.3% year-on-year, fixed asset investment by 2.8%, infrastructure investment by 4.6%, and manufacturing investment by 7.5%[16] - Overseas markets in countries like Malaysia, Indonesia, Vietnam, Thailand, Saudi Arabia, UAE, and Turkey show strong infrastructure investment demand, with overseas contracted project turnover increasing by 9.3% and new contract value by 13.7% year-on-year[18][19][20][21][24] - The company actively optimizes its asset structure, transitioning from investment-driven to lean operations, accelerating business diversification, and firmly implementing the "3+3+3" overseas development strategy[25][26] - As of H1 2025, the company operates 567 service outlets globally, including 63 overseas, covering 7 countries[26] - During the reporting period, the company completed the acquisition of Tong Heng Machinery Sdn. Bhd., a leading Malaysian leasing enterprise, advancing its global expansion into a new stage of deep integration of "industrial capital + localized operations"[26] 1.1 National and Regional Environment In H1 2025, China's GDP grew by 5.3%, fixed asset investment by 2.8%, infrastructure investment by 4.6%, and manufacturing investment by 7.5%, while real estate construction area decline narrowed, and overseas markets saw robust growth in contracted projects and new contracts - In H1 2025, mainland China's GDP grew by 5.3% year-on-year, fixed asset investment by 2.8%, infrastructure investment by 4.6%, and manufacturing investment by 7.5%[16] - China's real estate development enterprises' housing construction area decreased by 9.1% year-on-year, with the decline narrowing compared to the same period last year[16] - Overseas contracted project turnover increased by 9.3% year-on-year, and new contract value increased by 13.7%, with Southeast Asia remaining an investment hub and the Middle East and African markets showing increased potential[18][24] 1.2 Company Business Environment The company primarily offers comprehensive operation services for machinery leasing, including aerial work platforms, new shoring systems, and new formwork systems, with significant market potential in China and growing overseas demand, despite challenges in the formwork sector - The company primarily provides comprehensive operation services for aerial work platforms, new shoring systems, new formwork systems, road equipment, and power equipment, while actively exploring new products such as special aerial work equipment, material handling equipment, hoisting equipment, and mining equipment[22] - In 2024, China's leasing market for aerial work platforms held 669,000 units, a 12.4% year-on-year increase, indicating further market demand release[23] - As of the end of 2024, the national construction market held 27 million tons of cuplock scaffolding, a 4.7% year-on-year increase, but the industry remains in a contraction phase, facing supply-demand imbalance and price competition[24] 1.3 Company Response The company actively navigates complex market conditions by implementing systemic reforms and management restructuring, focusing on structural optimization and lean efficiency domestically, while steadfastly pursuing a "3+3+3" overseas development strategy to expand its global footprint through strategic acquisitions - Domestic operations focus on structural optimization and lean efficiency, dynamically adjusting asset structure and regional layout through asset transformation, inefficient asset disposal, and efficient new asset allocation[25] - The company accelerates business diversification, breaking through traditional housing and infrastructure limitations, and comprehensively upgrading customer marketing in various scenarios such as mining machinery leasing, marine shipyards, and petrochemicals[25] - The company firmly implements the "3+3+3" overseas development strategy, consolidating the Southeast Asian market, deeply exploring the potential of Saudi Arabia and UAE in the Middle East, and accelerating expansion into new countries[26] - During the reporting period, the company completed the acquisition of Tong Heng Machinery Sdn. Bhd., a leading Malaysian leasing enterprise, achieving deep expansion in asset categories and customer base, and promoting global layout[26] 2、Income Statement Analysis In H1 2025, the company's revenue decreased by 10.7% to RMB 4,350,062 thousand, with profit before tax sharply down 87.6% to RMB 50,276 thousand and profit for the period declining 86.8%, primarily due to domestic market rental declines, material business contraction, and equipment relocation overseas, leading to a 10.4% drop in gross profit margin to 21.6% 2025年上半年利润表概览（人民币千元） | Metric | H1 2025 | H1 2024 | Change % | | :--- | :--- | :--- | :--- | | Revenue | 4,350,062 | 4,872,421 | -10.7% | | Cost of Sales | (3,409,395) | (3,313,096) | 2.9% | | Gross Profit | 940,667 | 1,559,325 | -39.7% | | Profit Before Tax | 50,276 | 406,890 | -87.6% | | Profit for the Period | 35,490 | 268,228 | -86.8% | | EBITDA (non-HKFRS measure) | 1,968,638 | 2,003,614 | -1.7% | - Revenue decreased primarily due to a continuous decline in domestic market equipment rentals, proactive contraction of material-related businesses, and the temporary impact of relocating domestic equipment overseas on utilization rates[32] - The overall gross profit margin decreased by 10.4% to 21.6%, mainly affected by market fluctuations in rental or service prices[48] - Income tax expense significantly decreased by 89.3%, with the effective tax rate falling to 29.4%, primarily due to a reduction in profit before tax and the provision for cross-border dividend withholding tax in H1 2024 which was not required this period[65] 2.1 Income Statement Analysis (Overview) In H1 2025, the company's revenue decreased by 10.7%, profit before tax significantly fell by 87.6% to RMB 50,276 thousand, and EBITDA (non-HKFRS measure) slightly declined by 1.7%, while gross profit decreased by 39.7%, and selling and administrative expenses increased by 9.2% Key Income Statement Metrics for H1 2025 (RMB thousands) | Metric | H1 2025 | H1 2024 | Change % | | :--- | :--- | :--- | :--- | | Revenue | 4,350,062 | 4,872,421 | -10.7% | | Gross Profit | 940,667 | 1,559,325 | -39.7% | | Selling and Administrative Expenses | (758,331) | (694,651) | 9.2% | | Asset Impairment Provisions | 182,796 | (162,720) | -212.3% | | Profit Before Tax | 50,276 | 406,890 | -87.6% | | Profit for the Period | 35,490 | 268,228 | -86.8% | | EBITDA (non-HKFRS measure) | 1,968,638 | 2,003,614 | -1.7% | 2.2 Revenue Total revenue for H1 2025 decreased by 10.7% to RMB 4,350,062 thousand, primarily due to domestic market rental declines, material business contraction, and equipment relocation overseas, while overseas revenue surged by 719.8% to RMB 597,380 thousand, and customer numbers increased to approximately 367,000 - Total revenue for H1 2025 was RMB 4,350,062 thousand, a 10.7% year-on-year decrease[32] - Overseas revenue was approximately RMB 597,380 thousand, a 719.8% year-on-year increase, accounting for 13.7% of total revenue[32][46] - The number of customers increased to approximately 367,000 (including approximately 6,000 overseas customers), covering a wide range of fields such as municipal construction, housing construction, and transportation construction[32] Revenue by Business Segment for H1 2025 (RMB thousands) | Business Segment | H1 2025 | Proportion % | H1 2024 | Proportion % | Change % | | :--- | :--- | :--- | :--- | :--- | :--- | | Operating Lease Services | 2,265,244 | 52.1% | 1,895,622 | 38.9% | 19.5% | | Engineering Technical Services | 1,138,882 | 26.2% | 1,946,261 | 39.9% | -41.5% | | Asset Management and Other Services | 945,936 | 21.7% | 1,030,538 | 21.2% | -8.2% | | Total | 4,350,062 | 100.0% | 4,872,421 | 100.0% | -10.7% | Revenue by Geographical Segment for H1 2025 (RMB thousands) | Geographical Segment | H1 2025 | Proportion % | H1 2024 | Proportion % | Change % | | :--- | :--- | :--- | :--- | :--- | :--- | | Domestic Regions (incl. Hong Kong & Macau) | 3,752,682 | 86.3% | 4,799,552 | 98.5% | -21.8% | | Overseas Regions | 597,380 | 13.7% | 72,869 | 1.5% | 719.8% | | Total | 4,350,062 | 100.0% | 4,872,421 | 100.0% | -10.7% | 2.3 Gross Profit and Gross Profit Margin In H1 2025, gross profit decreased by 39.7% to RMB 940,667 thousand, with the gross profit margin falling by 10.4% to 21.6% due to market fluctuations, impacting all service segments, while overseas gross profit significantly increased by 2,638.8% Gross Profit and Gross Profit Margin by Business Segment for H1 2025 (RMB thousands) | Business Segment | H1 2025 Gross Profit | Gross Profit Margin % | H1 2024 Gross Profit | Gross Profit Margin % | Gross Profit Change % | | :--- | :--- | :--- | :--- | :--- | :--- | | Operating Lease Services | 621,196 | 27.4% | 702,774 | 37.1% | -11.6% | | Engineering Technical Services | 171,407 | 15.1% | 525,491 | 27.0% | -67.4% | | Asset Management and Other Services | 148,064 | 15.7% | 331,060 | 32.1% | -55.3% | | Total Gross Profit / Gross Profit Margin | 940,667 | 21.6% | 1,559,325 | 32.0% | -39.7% | Gross Profit by Geographical Segment for H1 2025 (RMB thousands) | Geographical Segment | H1 2025 Gross Profit | Proportion % | H1 2024 Gross Profit | Proportion % | Change % | | :--- | :--- | :--- | :--- | :--- | :--- | | Domestic Regions (incl. Hong Kong & Macau) | 669,585 | 71.2% | 1,549,427 | 99.4% | -56.8% | | Overseas Regions | 271,082 | 28.8% | 9,898 | 0.6% | 2,638.8% | | Total | 940,667 | 100.0% | 1,559,325 | 100.0% | -39.7% | 2.4 Cost of Sales and Selling and Administrative Expenses In H1 2025, the combined cost of sales and selling and administrative expenses increased by 4.0% to RMB 4,167,726 thousand, primarily driven by higher depreciation and amortization, trade, and sub-lease costs, despite reductions in staff and subcontracting costs and transportation fees - The combined cost of sales and selling and administrative expenses increased by 4.0% to RMB 4,167,726 thousand, mainly due to increases in depreciation and amortization, and trade and sub-lease costs[53][54] Cost of Sales and Selling and Administrative Expenses Details for H1 2025 (RMB thousands) | Item | H1 2025 | % of Revenue | H1 2024 | % of Revenue | Amount Change % | | :--- | :--- | :--- | :--- | :--- | :--- | | Depreciation and Amortization | 1,486,981 | 34.2% | 1,196,156 | 24.5% | 24.3% | | Staff and Subcontracting Costs | 944,183 | 21.7% | 1,014,150 | 20.8% | -6.9% | | Trade and Sub-lease Costs | 658,887 | 15.1% | 571,953 | 11.7% | 15.2% | | Transportation and Hoisting Fees | 304,439 | 7.0% | 448,274 | 9.2% | -32.1% | | Research and Development Expenses | 106,442 | 2.4% | 70,910 | 1.5% | 50.1% | - Research and development expenses increased by 50.1%, primarily due to the company's efforts to upgrade its digital systems for internationalization[55] 2.5 Other Income and Gains In H1 2025, other income and gains decreased by 2.4% to RMB 104,327 thousand, mainly due to a 60.9% reduction in interest income, despite a slight increase in government grants and a significant 132.1% rise in net fair value gains within other income Other Income and Gains for H1 2025 (RMB thousands) | Item | H1 2025 | H1 2024 | Change % | | :--- | :--- | :--- | :--- | | Interest Income | 3,923 | 10,026 | -60.9% | | Government Grants and Super Deduction Benefits | 83,250 | 82,009 | 1.5% | | Net Fair Value Gains (Others) | 10,706 | 4,612 | 132.1% | | Total | 104,327 | 106,938 | -2.4% | - The decrease in other income and gains was primarily due to reduced interest income[56] 2.6 Asset Impairment Provisions In H1 2025, the net expected credit loss for financial assets was negative RMB 186,877 thousand, a significant shift from a positive RMB 171,117 thousand in the prior year, primarily influenced by changes in provisions for trade and contract receivables Expected Credit Loss on Financial Assets Details for H1 2025 (RMB thousands) | Item | H1 2025 | Proportion % | H1 2024 | Proportion % | Change % | | :--- | :--- | :--- | :--- | :--- | :--- | | Trade and Contract Receivables | -163,029 | 87.3% | 168,004 | 98.2% | N/A | | Bills Receivable | -26,765 | 14.3% | -5,183 | -3.0% | 416.4% | | Others | 2,917 | -1.6% | 8,296 | 4.8% | -64.8% | | Total | -186,877 | 100.0% | 171,117 | 100.0% | N/A | - The company adopts a prudent strategy to assess asset impairment risks, strengthening monitoring of customer repayment capabilities through a customer grading management system and a blacklist system[58][80] 2.7 Other Expenses In H1 2025, other expenses decreased by 9.0% to RMB 18,113 thousand, primarily due to a reduction in exchange losses, with these expenses mainly comprising exchange losses and commission fees - Other expenses decreased by 9.0% to RMB 18,113 thousand, mainly due to reduced exchange losses[61] - Other expenses primarily include exchange losses arising from foreign currency-denominated bank borrowings and commission fees and charges collected by banks and non-bank financial institutions[60] 2.8 Finance Costs In H1 2025, finance costs increased by 5.0% to RMB 401,070 thousand, primarily due to higher interest on borrowings, despite a 0.30% decrease in the average financing interest rate for interest-bearing bank and other borrowings to 3.69% - Finance costs increased by 5.0% to RMB 401,070 thousand, mainly due to a RMB 21,965 thousand increase in interest on borrowings[62] Borrowing Interest and Average Financing Interest Rate for H1 2025 | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Average Balance of Interest-Bearing Bank and Other Financing (RMB thousands) | 21,063,794 | 18,382,079 | | Interest Expense (RMB thousands) | 388,992 | 367,027 | | Average Financing Interest Rate | 3.69% | 3.99% | - The average financing interest rate decreased by 0.30%, primarily due to central bank interest rate cuts and the company's principal business qualifying for preferential rates[64] 2.9 Income Tax Expense In H1 2025, income tax expense decreased by 89.3% to RMB 14,786 thousand, primarily due to a reduction in profit before tax, resulting in a 4.7% decrease in the effective tax rate to 29.4% as no cross-border dividend withholding tax provision was required this period - Income tax expense decreased by 89.3% to RMB 14,786 thousand, mainly due to a reduction in profit before tax[65] - The effective tax rate decreased by 4.7% to 29.4%, primarily because a provision for cross-border dividend withholding tax was made in H1 2024 but was not required this period[65] 2.10 Profit for the Period In H1 2025, profit for the period was RMB 35,490 thousand, a significant 86.8% year-on-year decrease, with domestic regions (including Hong Kong and Macau) shifting from profit to loss, while overseas regions turned from loss to substantial profit - Profit for the period was RMB 35,490 thousand, a 86.8% year-on-year decrease[66] Net Profit After Tax by Geographical Segment for H1 2025 (RMB thousands) | Geographical Segment | H1 2025 | Proportion % | H1 2024 | Proportion % | Change % | | :--- | :--- | :--- | :--- | :--- | :--- | | Domestic Regions (incl. Hong Kong & Macau) | -77,861 | -219.4% | 296,955 | 110.7% | N/A | | Overseas Regions | 113,351 | 319.4% | -28,727 | -10.7% | N/A | | Total | 35,490 | 100.0% | 268,228 | 100.0% | -86.8% | 2.11 Basic Earnings Per Share In H1 2025, basic earnings per share decreased by 86.9% to RMB 0.011, primarily due to the decline in profit for the period Basic Earnings Per Share for H1 2025 | Metric | H1 2025 | H1 2024 | Change % | | :--- | :--- | :--- | :--- | | Profit for the Period Attributable to Ordinary Equity Holders of the Company (RMB thousands) | 35,490 | 268,228 | -86.8% | | Weighted Average Number of Ordinary Shares Issued (shares) | 3,133,375,000 | 3,196,827,500 | -2.0% | | Basic Earnings Per Share (RMB) | 0.011 | 0.084 | -86.9% | 3、Financial Position Analysis As of June 30, 2025, the company's total assets slightly increased by 0.4% to RMB 36,581,356 thousand, while total liabilities rose by 1.1% to RMB 25,253,610 thousand, with a notable increase in overseas asset proportion and a 38.1% surge in cash and bank balances Financial Position Overview as of June 30, 2025 (RMB thousands) | Metric | June 30, 2025 | December 31, 2024 | Change % | | :--- | :--- | :--- | :--- | | Total Assets | 36,581,356 | 36,434,181 | 0.4% | | Total Liabilities | 25,253,610 | 24,975,831 | 1.1% | | Total Equity | 11,327,746 | 11,458,350 | -1.1% | | Property, Plant and Equipment | 21,720,292 | 22,245,403 | -2.4% | | Cash and Bank Balances | 2,476,599 | 1,793,336 | 38.1% | | Interest-Bearing Bank and Other Financing | 21,224,692 | 20,902,895 | 1.5% | - Total overseas assets increased by 52.8% to RMB 5,420,399 thousand, accounting for 14.8% of total assets[71] - Total trade and contract receivables slightly increased by 0.8%, but provisions decreased by 10.3%, mainly due to the company's implementation of a customer grading management system[79][80] - Among interest-bearing bank and other financing, the proportion of unsecured borrowings increased to 66.6%, while secured borrowings decreased, reflecting an optimized financing structure[96] 3.1 Assets (Overview) As of June 30, 2025, total assets increased by 0.4% to RMB 36,581,356 thousand, with non-current assets accounting for 65.1% and current assets for 34.9%, while total overseas assets grew by 52.8%, increasing their proportion to 14.8% Asset Composition as of June 30, 2025 (RMB thousands) | Item | June 30, 2025 | Proportion % | December 31, 2024 | Proportion % | Change % | | :--- | :--- | :--- | :--- | :--- | :--- | | Property, Plant and Equipment | 21,720,292 | 59.4% | 22,245,403 | 61.1% | -2.4% | | Trade and Contract Receivables | 6,810,439 | 18.6% | 6,624,774 | 18.2% | 2.8% | | Cash and Bank Balances | 2,476,599 | 6.8% | 1,793,336 | 4.9% | 38.1% | | Total Assets | 36,581,356 | 100.0% | 36,434,181 | 100.0% | 0.4% | - Total overseas assets amounted to RMB 5,420,399 thousand, an increase of 52.8% from the end of the prior year, with their proportion rising from 9.7% to 14.8%[71] 3.2 Property, Plant and Equipment As of June 30, 2025, the net book value of property, plant and equipment decreased by 2.4% to RMB 21,720,292 thousand, primarily due to the proactive contraction of material-related businesses in mainland China and depreciation recognized during the period, with aerial work platforms remaining the largest component at 53% - The net book value of property, plant and equipment decreased by 2.4% to RMB 21,720,292 thousand, mainly due to the proactive contraction strategy for material-related businesses in mainland China and depreciation of RMB 1,315,971 thousand recognized during the period[72] - Aerial work platforms, new shoring systems, and new formwork systems are the main components, with aerial work platforms accounting for 53%[73][75] 3.3 Trade and Contract Receivables As of June 30, 2025, total trade and contract receivables slightly increased by 0.8% to RMB 7,881,043 thousand, but provisions decreased by 10.3% to RMB 1,070,604 thousand, mainly due to the company's customer grading management system, while receivable turnover days increased to 248 days due to lower revenue Trade and Contract Receivables as of June 30, 2025 (RMB thousands) | Item | June 30, 2025 | December 31, 2024 | Change % | | :--- | :--- | :--- | :--- | | Total Trade and Contract Receivables | 7,881,043 | 7,817,941 | 0.8% | | Provisions | -1,070,604 | -1,193,167 | -10.3% | | Net Amount | 6,810,439 | 6,624,774 | 2.8% | - Provisions decreased by 10.3%, mainly because the company implemented a customer grading management system, removing customers with good repayment records within one year from the blacklist[80] - Receivable turnover days increased to 248 days from 193 days in the prior year period, primarily due to lower revenue[82][83] 3.4 Bills Receivable As of June 30, 2025, bills receivable decreased by 20.1% to RMB 697,052 thousand, primarily due to the company's prudent bill collection strategy, with bank acceptance bills significantly decreasing by 55.5% - Bills receivable decreased by 20.1% to RMB 697,052 thousand, mainly due to the company's prudent bill collection strategy[84] Bills Receivable Composition as of June 30, 2025 (RMB thousands) | Item | June 30, 2025 | Proportion % | December 31, 2024 | Proportion % | Change % | | :--- | :--- | :--- | :--- | :--- | :--- | | Bank Acceptance Bills | 132,133 | 19.0% | 296,947 | 34.1% | -55.5% | | Commercial Acceptance Bills and Credit Notes | 564,919 | 81.0% | 574,973 | 65.9% | -1.7% | | Total | 697,052 | 100.0% | 871,920 | 100.0% | -20.1% | 3.5 Prepayments, Other Receivables and Other Assets As of June 30, 2025, net prepayments, other receivables, and other assets decreased by 4.8% to RMB 3,214,244 thousand, primarily due to a reduction in prepayments and deposits - Net prepayments, other receivables, and other assets decreased by 4.8% to RMB 3,214,244 thousand, mainly due to a reduction in prepayments and deposits[86] Prepayments, Other Receivables and Other Assets Details as of June 30, 2025 (RMB thousands) | Item | June 30, 2025 | Proportion % | December 31, 2024 | Proportion % | Change % | | :--- | :--- | :--- | :--- | :--- | :--- | | Prepayments and Deposits | 1,346,337 | 41.2% | 1,451,147 | 42.3% | -7.2% | | Recoverable Taxes | 1,488,823 | 45.6% | 1,524,137 | 44.5% | -2.3% | | Other Receivables | 25,905 | 0.8% | 69,204 | 2.0% | -62.6% | | Others | 405,952 | 12.4% | 382,883 | 11.2% | 6.0% | | Total | 3,267,017 | 100.0% | 3,427,371 | 100.0% | -4.7% | 3.6 Cash and Bank Balances As of June 30, 2025, cash and bank balances significantly increased by 38.1% to RMB 2,476,599 thousand, primarily to maintain liquidity, with the majority being RMB assets and a small portion held in foreign currencies - Cash and bank balances increased by 38.1% to RMB 2,476,599 thousand, mainly due to the company maintaining liquidity[88] - Cash and cash equivalents are primarily RMB assets, with a small portion held in foreign currencies, including HKD, USD, and Malaysian Ringgit[88] 3.7 Right-of-Use Assets As of June 30, 2025, right-of-use assets decreased by 5.7% to RMB 853,558 thousand, primarily due to normal depreciation, with equipment-related right-of-use assets accounting for 68.1% - Right-of-use assets decreased by 5.7% to RMB 853,558 thousand, mainly due to normal depreciation of right-of-use assets[89] Right-of-Use Assets Details as of June 30, 2025 (RMB thousands) | Item | June 30, 2025 | Proportion % | December 31, 2024 | Proportion % | Change % | | :--- | :--- | :--- | :--- | :--- | :--- | | Equipment | 581,349 | 68.1% | 609,296 | 67.3% | -4.6% | | Leased Land | 174,340 | 20.4% | 176,693 | 19.5% | -1.3% | | Offices and Others | 97,869 | 11.5% | 119,150 | 13.2% | -17.9% | | Total | 853,558 | 100.0% | 905,139 | 100.0% | -5.7% | 3.8 Goodwill As of June 30, 2025, the company's goodwill amounted to RMB 173,979 thousand, arising from the acquisition of TH Tong Heng Machinery Sdn. Bhd. completed on May 30, 2025 - Goodwill amounted to RMB 173,979 thousand, arising from the acquisition of TH Tong Heng Machinery Sdn. Bhd. completed on May 30, 2025[90] 3.9 Other Asset Items As of June 30, 2025, other assets totaled RMB 635,193 thousand, primarily comprising deferred tax assets and inventories - Other assets totaled RMB 635,193 thousand, primarily comprising deferred tax assets of RMB 383,088 thousand and inventories of RMB 245,162 thousand[91] 3.10 Liabilities (Overview) As of June 30, 2025, total liabilities increased by 1.1% to RMB 25,253,610 thousand, with interest-bearing bank and other financing accounting for 84.0%, and current liabilities representing 44.2% while non-current liabilities represented 55.8% Liability Composition as of June 30, 2025 (RMB thousands) | Item | June 30, 2025 | Proportion % | December 31, 2024 | Proportion % | Change % | | :--- | :--- | :--- | :--- | :--- | :--- | | Interest-Bearing Bank and Other Financing | 21,224,692 | 84.0% | 20,902,895 | 83.7% | 1.5% | | Trade and Bills Payables | 2,244,433 | 8.9% | 2,395,257 | 9.6% | -6.3% | | Other Payables and Accruals | 1,001,932 | 4.0% | 886,686 | 3.5% | 13.0% | | Lease Liabilities | 615,281 | 2.4% | 633,582 | 2.5% | -2.9% | | Total Liabilities | 25,253,610 | 100.0% | 24,975,831 | 100.0% | 1.1% | - Current liabilities increased by 10.0% to RMB 11,162,091 thousand, while non-current liabilities decreased by 5.0% to RMB 14,091,519 thousand[93] 3.11 Interest-Bearing Bank and Other Financing As of June 30, 2025, interest-bearing bank and other financing increased by 1.5% to RMB 21,224,692 thousand, with an average financing interest rate of 3.69%, and the proportion of unsecured borrowings rising to 66.6% while secured borrowings decreased, reflecting an optimized financing structure primarily due to overseas business expansion - Interest-bearing bank and other financing increased by 1.5% to RMB 21,224,692 thousand, with an average financing interest rate of 3.69%[95] Interest-Bearing Bank and Other Financing Composition as of June 30, 2025 (RMB thousands) | Item | June 30, 2025 | Proportion % | December 31, 2024 | Proportion % | Change % | | :--- | :--- | :--- | :--- | :--- | :--- | | Secured | 7,080,783 | 33.4% | 8,036,093 | 38.4% | -11.9% | | Unsecured | 14,143,909 | 66.6% | 12,866,802 | 61.6% | 9.9% | | Total | 21,224,692 | 100.0% | 20,902,895 | 100.0% | 1.5% | - The proportion of unsecured interest-bearing bank and other borrowings increased to 66.6%, while secured borrowings decreased, mainly due to the company optimizing its financing structure[96] 3.12 Trade and Bills Payables As of June 30, 2025, trade and bills payables decreased by 6.3% to RMB 2,244,433 thousand, primarily due to a reduction in the scale of self-held asset purchases during the first half of the year - Trade and bills payables decreased by 6.3% to RMB 2,244,433 thousand, mainly due to a reduction in the scale of self-held asset purchases during the first half of the year[97] 3.13 Other Payables and Accruals As of June 30, 2025, other payables and accruals increased by 13.0% to RMB 1,001,932 thousand, primarily due to the provision for dividends payable during the first half of 2025 - Other payables and accruals increased by 13.0% to RMB 1,001,932 thousand, mainly due to the company's provision for dividends payable in H1 2025[99] 3.14 Lease Liabilities As of June 30, 2025, lease liabilities decreased by 2.9% to RMB 615,281 thousand, primarily due to the normal amortization of lease liabilities - Lease liabilities decreased by 2.9% to RMB 615,281 thousand, mainly due to the normal amortization of lease liabilities[101] 3.15 Derivative Financial Instruments The company's derivative financial instrument liabilities consist of interest rate swaps used to hedge interest rate risk exposure from floating-rate borrowings, accounted for using hedge accounting - Derivative financial instrument liabilities are interest rate swaps used to hedge interest rate risk exposure from floating-rate borrowings, applying hedge accounting treatment[102] 3.16 Financial Liabilities at Fair Value Through Profit or Loss This financial liability, amounting to RMB 73,937 thousand, represents contingent consideration arising from the acquisition of TH Tong Heng Machinery Sdn. Bhd., allowing the company to purchase the remaining 20% equity based on future average EBITDA and other metrics - Financial liabilities at fair value through profit or loss amounted to RMB 73,937 thousand, representing contingent consideration arising from the acquisition of TH Tong Heng Machinery Sdn. Bhd.[103] - This liability is based on an exercise price determined by future average EBITDA and cash debt status, used to acquire the remaining 20% equity in TH Tong Heng Machinery Sdn. Bhd.[103] 3.17 Shareholders' Equity As of June 30, 2025, the company's total equity decreased by 1.1% to RMB 11,327,746 thousand, with profit for the period at RMB 35,490 thousand and dividend distribution of RMB 132,874 thousand Equity Movement as of June 30, 2025 (RMB thousands) | Item | Amount | | :--- | :--- | | December 31, 2024 | 11,458,350 | | Profit for the Period | 35,490 | | Dividend Distribution | -132,874 | | Other Equity Changes | -33,220 | | June 30, 2025 | 11,327,746 | - The company's total equity decreased by 1.1% to RMB 11,327,746 thousand[104] 4、Capital Management The company employs a prudent capital management strategy, monitoring financial return indicators and leverage ratios, which in H1 2025 saw a decline in average return on equity and total assets, and a slight increase in the asset-liability ratio Key Financial Ratios for H1 2025 | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Average Return on Equity | 0.6% | 4.9% | | Average Return on Total Assets | 0.2% | 1.6% | | Asset-Liability Ratio | 69.0% | 68.7% | - Average return on equity decreased by 4.3%, mainly due to lower profit for the period and an increase in average equity[111] - Average return on total assets decreased by 1.4%, mainly due to lower profit for the period and an increase in average total assets[112] - The asset-liability ratio increased by 0.4% to 69.0% compared to the end of the prior year[113] 5、Capital Expenditure In H1 2025, capital expenditure significantly decreased by 81.1% to RMB 824,817 thousand, with net capital expenditure after sales of used equipment and materials plummeting by 90.3% to RMB 384,301 thousand, and the company plans to fund future capital expenditures through operating cash flow and bank borrowings - Capital expenditure for H1 2025 was RMB 824,817 thousand, a significant year-on-year decrease of 81.1%[114] - Net capital expenditure after deducting sales of used equipment and materials was RMB 384,301 thousand, a significant year-on-year decrease of 90.3%[114] 6、Risk Management The company manages foreign exchange risk, which is limited due to its predominantly RMB-denominated business and the use of derivative financial instruments for hedging, and addresses liquidity risk by optimizing its financing structure, expanding long-term financing products and maintaining adequate cash positions - The company's foreign exchange risk exposure is limited, with business primarily denominated in RMB, and derivative financial instruments are used to hedge foreign exchange risk[116] - Liquidity risk is managed by optimizing the financing structure, expanding long-term financing products and maintaining a certain proportion of cash positions[117] 7、Group Asset Pledges As of June 30, 2025, the company had RMB 7,632,561 thousand in property, plant and equipment pledged to non-bank financial institutions, and an additional RMB 300,000 thousand in time deposits used as collateral for bank borrowings - RMB 7,632,561 thousand of property, plant and equipment are pledged to non-bank financial institutions to secure other borrowings[118] - RMB 300,000 thousand in time deposits are used as collateral for bank borrowings[118] 8、Contingent Liabilities and Capital Commitments As of June 30, 2025, the company had no significant contingent liabilities, guarantees, or outstanding litigation, but had capital commitments of RMB 385,593 thousand for contracted but unprovided purchases of plant and machinery - As of June 30, 2025, the company had no significant contingent liabilities, guarantees, or any other outstanding or threatened material litigation or claims against the Group that could have a material adverse effect on its business, financial condition, or operating results[119] Capital Commitments as of June 30, 2025 (RMB thousands) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Contracted but not provided for: purchase of plant and machinery | 385,593 | 212,503 | 9、Significant Investments, Acquisitions or Disposals On May 30, 2025, the company completed the acquisition of an 80% equity interest in TH Tong Heng Machinery Sdn. Bhd. for a total cash consideration of approximately RMB 289,502,273, aiming to expand its market share in the Malaysian equipment leasing industry, with the target company becoming a subsidiary - On May 30, 2025, the company completed the acquisition of an 80% equity interest in TH Tong Heng Machinery Sdn. Bhd. for a total cash consideration of approximately RMB 289,502,273[123] - This acquisition aims to expand the company's market share in the Malaysian equipment leasing industry, and the target company has become a subsidiary of the company[129] - The acquisition and put option, when combined, constitute a discloseable transaction but are exempt from shareholder approval requirements[122] 10、Human Resources As of June 30, 2025, the company's total number of employees decreased to 4,317, and it has established a 2024 Share Option Scheme and a Restricted Share Award Scheme to incentivize and retain talent, though no new options or restricted shares were granted or vested during the reporting period, with some expiring - As of June 30, 2025, the company had a total of 4,317 employees, a decrease from 5,346 in the prior year period[132] - The company established the 2024 Share Option Scheme and Restricted Share Award Scheme to build a medium-to-long-term incentive and retention mechanism for outstanding management talent[133][136] Share Option Movement for H1 2025 | Grantee | Unexercised as of Jan 1, 2025 | Expired | Unexercised as of June 30, 2025 | | :--- | :--- | :--- | :--- | | Directors Subtotal | 610,000 | – | 610,000 | | Employees | 10,810,000 | 1,330,000 | 9,480,000 | | Total | 11,420,000 | 1,330,000 | 10,090,000 | Restricted Share Movement for H1 2025 | Grantee | Unvested as of Jan 1, 2025 | Expired | Unvested as of June 30, 2025 | | :--- | :--- | :--- | :--- | | Directors Subtotal | 1,420,000 | – | 1,420,000 | | Employees Subtotal | 25,160,000 | 3,080,000 | 22,080,000 | | Total | 26,580,000 | 3,080,000 | 23,500,000 | 12、Events After Reporting Period As of the date of this report, the company has not experienced any significant events after June 30, 2025, that require disclosure - As of the date of this report, the company has not experienced any significant events after June 30, 2025, that require disclosure[139] 13、Future Outlook Facing external uncertainties, the company plans to continue market-driven strategies in H2 2025, focusing on lean operations domestically through enhanced customer marketing, industry solutions, and optimized asset allocation, while pursuing a dual-driven strategy of "deepening existing country markets" and "expanding into emerging markets" overseas, with a cautious approach to new market development in Africa, South America, and Asia - In H2 2025, domestic operations will focus on lean management to counter risks, enhancing asset lifecycle value through deepened customer marketing, industry solutions, and optimized asset allocation[140] - Overseas, the company will implement a dual-driven strategy of "deepening existing country markets" and "expanding into emerging markets," consolidating its presence in Southeast Asia and cautiously exploring new markets, with a focus on regions such as Africa, South America, and Asia[140] Disclosure of Interests This chapter discloses the interests and/or short positions of the company's directors, chief executives, and substantial shareholders in the company's shares and associated corporations as of June 30, 2025, with several directors holding company shares and Far East Horizon as the controlling shareholder with a 41.70% stake Directors' and Chief Executives' Interests in the Company as of June 30, 2025 | Name of Director and Chief Executive | Capacity / Nature of Interest | Total Number of Ordinary Shares | Approximate Percentage of Interest | | :--- | :--- | :--- | :--- | | Kong Fanxing | Beneficial Owner | 8,078,052 | 0.25% | | Zhan Jing | Beneficial Owner | 1,000,186 | 0.03% | | Tang Li | Beneficial Owner | 2,269,125 | 0.07% | | He Ziming | Interest in Controlled Corporation | 177,090,112 | 5.54% | - Several directors obtained shares in the company through in-specie distribution from Far East Horizon, and some directors also hold share options and restricted shares[143][147] Substantial Shareholders' Interests in Shares as of June 30, 2025 | Shareholder Name | Nature of Interest | Number of Ordinary Shares | Approximate Percentage of Interest | | :--- | :--- | :--- | :--- | | Far East Horizon | Beneficial Owner | 1,333,247,413 | 41.70% | | Farsighted Wit Limited | Beneficial Owner | 176,600,000 | 5.52% | Corporate Governance The company complied with the Corporate Governance Code in H1 2025, despite the absence of the Board Chairman and several committee chairmen at the AGM, and has adopted the Model Code for Securities Transactions, meeting listing rule requirements for independent non-executive directors, with the Audit Committee having reviewed this interim report - The company complied with the Corporate Governance Code in H1 2025, although the Chairman of the Board and several committee chairmen were unable to attend the Annual General Meeting due to other work commitments[153][154] - The company has adopted the Model Code for Securities Transactions, and directors confirmed compliance throughout the period[155][156] - The Board of Directors complies with the Listing Rules regarding the number and professional background of independent non-executive directors[157] - The Audit Committee has reviewed this interim report and the condensed consolidated financial statements with management and external auditors[158][159] Other Information The company distributed a final dividend of HKD 0.045 per share for 2024 on July 2, 2025, but the Board recommended no interim dividend for H1 2025; a cooperation framework agreement with controlling shareholder Far East Horizon for engineering technical services and equipment operating lease services constitutes a continuing connected transaction, and no listed securities were purchased, sold, or redeemed during the reporting period - The company distributed a final dividend of HKD 0.045 per share for 2024, totaling HKD 143,876 thousand, on July 2, 2025[160] - The Board of Directors recommended not to declare an interim dividend for the six months ended June 30, 2025[161] - The company entered into a cooperation framework agreement with Far East Horizon, its controlling shareholder, to provide engineering technical services and equipment operating lease services and to receive consulting service fees, which constitutes a continuing connected transaction[163][166] - During the reporting period, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities[162] Independent Review Report Ernst & Young has reviewed Grandshores Construction Development's condensed interim consolidated financial information for the six months ended June 30, 2025, and found no matters suggesting that the financial information was not prepared in all material respects in accordance with Hong Kong Accounting Standard 34 - Ernst & Young has reviewed the company's condensed interim consolidated financial information for the six months ended June 30, 2025[170] - The review concluded that no matters were found to suggest that the financial information was not prepared in all material respects in accordance with Hong Kong Accounting Standard 34[172] Condensed Interim Consolidated Financial Information Condensed Interim Consolidated Income Statement For the six months ended June 30, 2025, the company reported revenue of RMB 4,350,062 thousand, cost of sales of RMB 3,409,395 thousand, gross profit of RMB 940,667 thousand, profit for the period of RMB 35,490 thousand, and basic and diluted earnings per share of RMB 0.01 Condensed Interim Consolidated Income Statement Summary for H1 2025 (RMB thousands) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Revenue | 4,350,062 | 4,872,421 | | Cost of Sales | (3,409,395) | (3,313,096) | | Gross Profit | 940,667 | 1,559,325 | | Profit Before Tax | 50,276 | 406,890 | | Profit for the Period | 35,490 | 268,228 | | Basic Earnings Per Share (RMB) | 0.01 | 0.08 | | Diluted Earnings Per Share (RMB) | 0.01 | 0.08 | Condensed Interim Consolidated Statement of Comprehensive Income For the six months ended June 30, 2025, the company's profit for the period was RMB 35,490 thousand, with net other comprehensive income of negative RMB 32,346 thousand, resulting in a total comprehensive income of RMB 3,144 thousand for the period Condensed Interim Consolidated Statement of Comprehensive Income Summary for H1 2025 (RMB thousands) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Profit for the Period | 35,490 | 268,228 | | Net Other Comprehensive Income that may be reclassified to profit or loss in subsequent periods | (32,346) | (8,239) | | Total Comprehensive Income for the Period | 3,144 | 259,989 | Condensed Interim Consolidated Statement of Financial Position As of June 30, 2025, the company's total non-current assets were RMB 23,800,675 thousand, total current assets were RMB 12,780,681 thousand, total liabilities were RMB 25,253,610 thousand, with current liabilities at RMB 11,162,091 thousand, and net assets amounted to RMB 11,327,746 thousand Condensed Interim Consolidated Statement of Financial Position Summary as of June 30, 2025 (RMB thousands) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Non-Current Assets | 23,800,675 | 24,225,463 | | Total Current Assets | 12,780,681 | 12,208,718 | | Total Assets | 36,581,356 | 36,434,181 | | Total Current Liabilities | 11,162,091 | 10,149,736 | | Total Non-Current Liabilities | 14,091,519 | 14,826,095 | | Total Liabilities | 25,253,610 | 24,975,831 | | Net Assets | 11,327,746 | 11,458,350 | Condensed Interim Consolidated Statement of Changes in Equity For the six months ended June 30, 2025, total equity attributable to owners of the parent company was RMB 11,327,746 thousand, with profit for the period at RMB 35,490 thousand, total comprehensive income at RMB 3,144 thousand, and a dividend distribution of RMB 132,874 thousand Condensed Interim Consolidated Statement of Changes in Equity Summary for H1 2025 (RMB thousands) | Item | June 30, 2025 | | :--- | :--- | | Total Equity as of December 31, 2024 | 11,458,350 | | Profit for the Period | 35,490 | | Other Comprehensive Income for the Period | (32,346) | | Total Comprehensive Income for the Period | 3,144 | | 2024 Dividends | (132,874) | | Total Equity as of June 30, 2025 | 11,327,746 | Condensed Interim Consolidated Cash Flow Statement For the six months ended June 30, 2025, net cash flow from operating activities was RMB 1,780,366 thousand, net cash flow used in investing activities was RMB (861,560) thousand, and net cash flow used in financing activities was RMB (519,592) thousand, resulting in cash and cash equivalents of RMB 2,176,580 thousand at period-end Condensed Interim Consolidated Cash Flow Statement Summary for H1 2025 (RMB thousands) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 1,780,366 | 1,348,514 | | Net Cash Flow Used in Investing Activities | (861,560) | (3,108,325) | | Net Cash Flow (Used in) / Generated from Financing Activities | (519,592) | 1,535,932 | | Net Increase / (Decrease) in Cash and Cash Equivalents | 399,214 | (223,879) | | Cash and Cash Equivalents at End of Period | 2,176,580 | 1,932,626 | Notes to the Condensed Interim Consolidated Financial Information These notes detail the basis of preparation, accounting policy changes, operating segment information, revenue breakdown, other income and gains, profit before tax, finance costs, income tax, dividends, earnings per share, balance sheet items, business combinations, cash flows, contingent liabilities, asset pledges, commitments, related party transactions, financial instruments, and post-reporting period events - The company prepares interim financial information in accordance with Hong Kong Accounting Standard 34 and on a going concern basis[185] - Operating segments include operating lease services, engineering technical services, and asset management and other services[191] - The acquisition of an 80% equity interest in TH Tong Heng Machinery Sdn. Bhd. was completed on May 30, 2025, resulting in goodwill of RMB 173,979 thousand[290] - The company established the 2024 Share Option Scheme and Restricted Share Award Scheme to incentivize employees[270][276] 1. Company Information Grandshores Construction Development, incorporated in the Cayman Islands on September 28, 2020, is an investment holding company primarily engaged in operating lease services, engineering technical services, and asset management, with Far East Horizon Limited as its direct controlling company - The company was incorporated in the Cayman Islands on September 28, 2020, as an investment holding company[183] - It primarily engages in operating lease services, engineering technical services, and asset management and other services[187] - Its direct controlling company is Far East Horizon Limited[184] 2. Basis of Preparation The condensed interim consolidated financial information is prepared in accordance with Hong Kong Accounting Standard 34 and on a going concern basis, with all amounts presented in RMB thousands - The condensed interim consolidated financial information is prepared in accordance with Hong Kong Accounting Standard 34 and on a going concern basis[185] - Financial information is presented in RMB, with all amounts rounded to the nearest thousand[186] 3. Changes in Accounting Policies The accounting policies adopted for the condensed interim consolidated financial information are consistent with the 2024 consolidated financial statements, with the only change being the initial adoption of amendments to HKAS 21 regarding lack of exchangeability, which had no impact on the Group's financial information - Accounting policies are consistent with the 2024 consolidated financial statements, with the initial adoption of amendments to HKAS 21 regarding lack of exchangeability[188][189] - As the Group's transaction and functional currencies are exchangeable, these amendments had no impact on the financial information[189] 4. Operating Segment Information The company reports three operating segments: operating lease services, engineering technical services, and asset management and other services, with H1 2025 seeing growth in operating lease service revenue but declines in the other two segments, and a significant increase in the proportion of overseas assets - The company has three reportable operating segments: operating lease services, engineering technical services, and asset management and other services[191] Segment Revenue for H1 2025 (RMB thousands) | Segment | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Operating Lease Services | 2,265,244 | 1,895,622 | | Engineering Technical Services | 1,138,882 | 1,946,261 | | Asset Management and Other Services | 945,936 | 1,030,538 | | Total | 4,350,062 | 4,872,421 | - As of June 30, 2025, total overseas assets amounted to RMB 5,420,399 thousand, representing 14.82% of the Group's total assets, a significant increase from 9.74% at the end of 2024[196] 5. Revenue Total revenue for H1 2025 was RMB 4,350,062 thousand, comprising RMB 2,926,086 thousand from operating leases and RMB 1,423,976 thousand from contracts with customers, with overseas revenue significantly increasing to RMB 597,380 thousand, and performance obligations satisfied upon goods delivery or as services are provided Revenue Composition for H1 2025 (RMB thousands) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Operating Lease Services | 2,265,244 | 1,895,622 | | Sub-lease | 660,842 | 748,026 | | Subtotal Operating Lease Revenue | 2,926,086 | 2,643,648 | | Revenue from Contracts with Customers | 1,423,976 | 2,228,773 | | Total | 4,350,062 | 4,872,421 | - For the six months ended June 30, 2025, revenue from overseas regions was RMB 597,380 thousand[198] - Performance obligations for sales of goods are satisfied upon delivery, while for engineering technical services, they are satisfied over time as services are provided[201][202] 6. Other Income and Gains In H1 2025, total other income and gains amounted to RMB 104,327 thousand, primarily consisting of government grants of RMB 83,250 thousand and bank interest income of RMB 3,923 thousand, with other gains mainly including gains on disposal of property, plant and equipment and fair value gains Other Income and Gains for H1 2025 (RMB thousands) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Government Grants | 83,250 | 63,628 | | Bank Interest Income | 3,923 | 10,026 | | Gains on Disposal of Property, Plant and Equipment | 6,448 | 6,559 | | Others | 10,386 | 4,324 | | Total | 104,327 | 106,938 | 7. Profit Before Tax The company's profit before tax was RMB 50,276 thousand, with major costs including operating lease service costs, engineering technical service costs, and asset management and other service costs, alongside significant expenses such as employee benefits, R&D, and travel - Profit before tax was RMB 50,276 thousand[174] Items Deducted/Credited to Profit Before Tax for H1 2025 (RMB thousands) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Operating Lease Service Costs | 1,644,048 | 1,192,848 | | Engineering Technical Service Costs | 967,475 | 1,420,770 | | Asset Management and Other Service Costs | 797,872 | 699,478 | | Depreciation of Property, Plant and Equipment | 1,315,971 | 1,073,569 | | Employee Benefit Expenses | 310,475 | 293,571 | | Research and Development Expenses | 106,442 | 70,910 | | Net Expected Credit Loss on Financial and Contract Assets | -186,877 | 171,117 | 8. Finance Costs In H1 2025, total finance costs amounted to RMB 401,070 thousand, primarily consisting of interest on interest-bearing bank and other financing and interest on lease liabilities Finance Costs Analysis for H1 2025 (RMB thousands) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Interest on Interest-Bearing Bank and Other Financing | 388,992 | 367,027 | | Interest on Lease Liabilities | 12,078 | 15,070 | | Total | 401,070 | 382,097 | 9. Income Tax In H1 2025, income tax expense was RMB 14,786 thousand, with mainland China companies generally subject to a 25% statutory tax rate, while some high-tech enterprises enjoy a 15% preferential rate, and the difference between the effective and statutory tax rates is mainly influenced by withholding tax and tax incentives Income Tax Expense for H1 2025 (RMB thousands) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Current Tax – Mainland China | 62,566 | 191,103 | | Deferred Tax | (47,780) | (52,441) | | Total | 14,786 | 138,662 | - Dividends paid by companies established in mainland China to foreign investors are generally subject to a 10% withholding tax, which can be reduced to 5% for eligible Hong Kong-registered investors[211] - Shanghai Grandshores Equipment Engineering Co., Ltd. and