长城微光(08286) - 2025 - 中期业绩

Company Information and Disclaimer This section provides an overview of the company, its listing on GEM, and the associated market characteristics and disclaimers Company Overview This report is the interim results announcement of Shanxi Changcheng Microlight Equipment Co., Ltd. (Stock Code: 8286) for the six months ended June 30, 2025. The company is incorporated in the People's Republic of China, and its H shares are listed on GEM of the Hong Kong Stock Exchange - Company Name: Shanxi Changcheng Microlight Equipment Co., Ltd[1] - Stock Code: 8286, H shares listed on GEM of the Hong Kong Stock Exchange[1][10] - Reporting Period: Six months ended June 30, 2025[1] GEM Market Characteristics and Disclaimer The GEM market of the Stock Exchange provides a listing platform for small and medium-sized companies, entailing higher investment risks, and investors are advised to exercise caution. Hong Kong Exchanges and Clearing Limited and the Stock Exchange assume no responsibility for the contents of this announcement - The GEM market provides a listing platform for small and medium-sized companies, involving higher investment risks, and investors are advised to exercise caution[2] - Hong Kong Exchanges and Clearing Limited and the Stock Exchange take no responsibility for the accuracy or completeness of this announcement[2] Financial Performance This section presents the condensed consolidated financial statements, including statements of profit or loss, financial position, changes in equity, and cash flows, for the reporting period Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income For the six months ended June 30, 2025, the Group's revenue decreased by 4.24% to RMB 8,662 thousand, gross profit decreased by 16.00% to RMB 3,007 thousand, and loss and total comprehensive loss for the period expanded to RMB 4,111 thousand Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (RMB thousands) | Indicator | Six Months Ended June 30, 2025 (RMB thousands) | Six Months Ended June 30, 2024 (RMB thousands) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 8,662 | 9,046 | -4.24% | | Cost of Sales | (5,655) | (5,468) | 3.42% | | Gross Profit | 3,007 | 3,578 | -16.00% | | Other Income, Gains and Losses | 1,217 | 1,227 | -0.81% | | Selling and Distribution Expenses | (102) | (150) | -32.00% | | Administrative and Other Operating Expenses | (7,197) | (7,330) | -1.81% | | Finance Costs | (1,036) | (1,233) | -15.98% | | Loss Before Tax | (4,111) | (3,908) | 5.20% | | Income Tax Expense | – | – | - | | Loss and Total Comprehensive Loss for the Period | (4,111) | (3,908) | 5.20% | | Basic and Diluted Loss Per Share (RMB) | (0.013) | (0.013) | 0.00% | Condensed Consolidated Statement of Financial Position As of June 30, 2025, the Group's net current liabilities were RMB (196,532) thousand, net liabilities were RMB (146,032) thousand, and total equity was RMB (146,032) thousand, indicating a persistent negative equity position Condensed Consolidated Statement of Financial Position (RMB thousands) | Indicator | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (RMB thousands) | | :--- | :--- | :--- | :--- | | Non-Current Assets | | | | | Property, Plant and Equipment | 127,689 | 129,884 | -2,195 | | Right-of-Use Assets | 8,628 | 8,779 | -151 | | Current Assets | | | | | Inventories | 7,865 | 9,279 | -1,414 | | Trade Receivables | 14,757 | 5,881 | 8,876 | | Prepayments, Deposits and Other Receivables | 9,555 | 8,759 | 796 | | Cash and Cash Equivalents | 292 | 292 | 0 | | Current Liabilities | | | | | Trade Payables | 8,399 | 8,832 | -433 | | Accruals and Other Payables | 179,821 | 179,503 | 318 | | Contract Liabilities | 15,863 | 5,642 | 10,221 | | Amounts Due to Shareholders | 10,353 | 10,309 | 44 | | Bank and Other Borrowings | 12,365 | 11,944 | 421 | | Deferred Government Grants | 2,200 | 2,200 | 0 | | Net Current Liabilities | (196,532) | (194,219) | -2,313 | | Net Liabilities | (146,032) | (141,921) | -4,111 | | Total Equity | (146,032) | (141,921) | -4,111 | Condensed Consolidated Statement of Changes in Equity For the six months ended June 30, 2025, total equity attributable to owners of the Company decreased by RMB 4,111 thousand to RMB (145,835) thousand due to the total comprehensive loss for the period Condensed Consolidated Statement of Changes in Equity (RMB thousands) | Indicator | January 1, 2025 (RMB thousands) | Total Comprehensive Loss for the Period (RMB thousands) | June 30, 2025 (RMB thousands) | | :--- | :--- | :--- | :--- | | Total Equity Attributable to Owners of the Company | (141,724) | (4,111) | (145,835) | | Non-Controlling Interests | (197) | – | (197) | | Total Equity | (141,921) | (4,111) | (146,032) | Condensed Consolidated Statement of Cash Flows For the six months ended June 30, 2025, the Group's net cash used in operating activities was RMB (6) thousand, net cash generated from investing activities was RMB 1 thousand, net cash generated from financing activities was RMB 5 thousand, and cash and cash equivalents at period-end remained at RMB 292 thousand Condensed Consolidated Statement of Cash Flows (RMB thousands) | Indicator | Six Months Ended June 30, 2025 (RMB thousands) | Six Months Ended June 30, 2024 (RMB thousands) | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | (6) | 240 | | Net Cash Used in Investing Activities | 1 | (47) | | Net Cash Generated from Financing Activities | 5 | (161) | | Increase in Cash and Cash Equivalents | – | 32 | | Cash and Cash Equivalents at January 1 | 292 | 277 | | Cash and Cash Equivalents at June 30 | 292 | 309 | Notes to the Condensed Consolidated Financial Statements This section details the basis of preparation, significant accounting policies, and specific notes to the condensed consolidated financial statements, including revenue, expenses, and financial position items General Information Shanxi Changcheng Microlight Equipment Co., Ltd. was incorporated in China on November 10, 2000, with its H shares listed on GEM of the Hong Kong Stock Exchange - The Company was incorporated in China as a joint stock company on November 10, 2000[10] - H shares are listed on GEM of The Stock Exchange of Hong Kong Limited[10] Going Concern Basis The Group faces significant going concern uncertainties due to substantial net current liabilities, net liabilities, and outstanding borrowings. The Board has implemented various measures to improve liquidity, including debt restructuring, interest waivers, repayment deferrals, and seeking shareholder funding, while actively expanding its customer base, thus the financial statements are prepared on a going concern basis - As of June 30, 2025, the Group had net current liabilities of approximately RMB 196,532 thousand, net liabilities of approximately RMB 146,032 thousand, and outstanding bank and other borrowings of approximately RMB 71,424 thousand, indicating significant going concern uncertainties[11] - The Company has taken measures to improve liquidity, including negotiating debt restructuring, interest waivers, and repayment deferrals with shareholders, lenders, and banks, seeking further financial assistance, and actively seeking new customers for fiber optic products[11] - The Board believes that with the implementation of these measures, the Group will be able to meet its financial obligations, and therefore the interim financial statements are prepared on a going concern basis[11] Basis of Preparation These condensed consolidated financial statements are prepared in accordance with Hong Kong Accounting Standard 34 'Interim Financial Reporting' and the GEM Listing Rules, with principal accounting policies consistent with those in the 2024 annual report, and are presented in RMB - The condensed consolidated financial statements are prepared in accordance with Hong Kong Accounting Standard 34 'Interim Financial Reporting' issued by the Hong Kong Institute of Certified Public Accountants and the GEM Listing Rules[12] - The principal accounting policies used in the preparation are consistent with those adopted in the annual report for the year ended December 31, 2024[12] - The financial statements are presented in RMB, and all amounts are rounded to the nearest thousand[12] Adoption of New and Revised Hong Kong Financial Reporting Standards The new and revised Hong Kong Financial Reporting Standards adopted during the period have not caused significant changes to the Group's accounting policies or financial statement amounts, and new standards not yet effective are also not expected to have a material impact - The adoption of new and revised Hong Kong Financial Reporting Standards during the period did not result in significant changes to accounting policies or financial statement amounts[13] - New Hong Kong Financial Reporting Standards that have been issued but are not yet effective are not expected to have a significant impact on the financial statements[13] Revenue The Group's revenue primarily derives from the manufacturing and sale of fiber optic products, with total revenue for the six months ended June 30, 2025, at RMB 8,662 thousand, a 4.24% year-on-year decrease. The Chinese market contributes the vast majority of revenue, with microchannel plates and fiber optic inverters being the main products - Revenue refers to the net invoiced value of goods sold, after deducting provisions for returns, trade discounts, and other sales-related taxes[14] Revenue Sources (RMB thousands) | Revenue Source | Six Months Ended June 30, 2025 (RMB thousands) | Six Months Ended June 30, 2024 (RMB thousands) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Manufacturing and Sale of Fiber Optic Products | 8,662 | 9,046 | -4.24% | | Revenue from Customer Contracts | 8,662 | 9,046 | -4.24% | Disaggregation of Revenue In the first half of 2025, the Chinese market contributed 85.78% of revenue, while revenue from Europe and Russia significantly decreased by 54.99%. Microchannel plates and fiber optic inverters remained the primary revenue sources, with fiber optic tapers showing a notable 40.21% increase in revenue Geographical Markets (RMB thousands) | Geographical Market | Six Months Ended June 30, 2025 (RMB thousands) | Six Months Ended June 30, 2024 (RMB thousands) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | China | 7,430 | 7,346 | 1.14% | | Hong Kong and Other Asian Countries | 612 | 327 | 87.16% | | Europe and Russia | 620 | 1,373 | -54.99% | | Total | 8,662 | 9,046 | -4.24% | Major Products (RMB thousands) | Major Product | Six Months Ended June 30, 2025 (RMB thousands) | Six Months Ended June 30, 2024 (RMB thousands) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Fiber Optic Inverters | 3,479 | 4,234 | -17.84% | | Fiber Optic Straight Plates | – | 150 | -100.00% | | Fiber Optic Faceplates | 69 | 460 | -85.00% | | Fiber Optic Tapers | 1,231 | 878 | 40.21% | | Microchannel Plates | 3,723 | 3,313 | 12.38% | | Others | 160 | 11 | 1354.55% | | Total | 8,662 | 9,046 | -4.24% | - All revenue is recognized at a point in time[18][19] Operating Segment Information The Group's primary business is the sale of fiber optic products, considered a single reportable segment. In the first half of 2025, microchannel plates and fiber optic inverters were the main products, the Chinese market was the primary revenue source, and Customer A contributed over half of the revenue - The Group's revenue and profit/loss contributions primarily derive from the sale of fiber optic inverters, fiber optic straight plates, fiber optic faceplates, fiber optic tapers, and microchannel plates, and are considered a single reportable segment[20] - All of the Group's non-current assets are located in Shanxi, China[22] Product Information In the first half of 2025, microchannel plates and fiber optic inverters accounted for 43% and 40% of total revenue, respectively, while sales of fiber optic straight plates and fiber optic faceplates significantly decreased Product Revenue (RMB thousands, %) | Product | 2025 (RMB thousands) | 2025 (%) | 2024 (RMB thousands) | 2024 (%) | | :--- | :--- | :--- | :--- | :--- | | Fiber Optic Inverters | 3,479 | 40 | 4,234 | 46 | | Fiber Optic Straight Plates | – | – | 150 | 2 | | Fiber Optic Faceplates | 69 | 1 | 460 | 5 | | Fiber Optic Tapers | 1,231 | 14 | 878 | 10 | | Microchannel Plates | 3,723 | 43 | 3,313 | 37 | | Others | 160 | 2 | 11 | – | | Total | 8,662 | 100 | 9,046 | 100 | Geographical Information In the first half of 2025, the Chinese market contributed RMB 7,430 thousand in revenue, accounting for 85.78% of total revenue, with significant growth in Hong Kong and other Asian countries, while revenue from Europe and Russia substantially declined Geographical Revenue (RMB thousands) | Region | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | China | 7,430 | 7,346 | | Hong Kong and Other Asian Countries | 612 | 327 | | Europe and Russia | 620 | 1,373 | | Total | 8,662 | 9,046 | Major Customer Information In the first half of 2025, Customer A contributed RMB 5,868 thousand in revenue, accounting for 67.74% of total revenue, while Customer B's contribution significantly decreased Major Customer Revenue (RMB thousands) | Customer | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Customer A | 5,868 | 5,343 | | Customer B | 996 | 1,652 | Other Income, Gains and Losses For the six months ended June 30, 2025, other income, gains, and losses primarily stemmed from government grants, totaling approximately RMB 1,217 thousand, a slight year-on-year decrease - Other income, gains, and losses primarily comprised income from government grants of approximately RMB 1,100 thousand[25] - Total other income, gains, and losses for the first half of 2025 amounted to RMB 1,217 thousand, a decrease of RMB 10 thousand compared to RMB 1,227 thousand in the same period of 2024[4][25][44] Finance Costs For the six months ended June 30, 2025, the Group's finance costs were RMB 1,036 thousand, a 15.98% year-on-year decrease, primarily due to zero bank borrowing interest and a significant reduction in other borrowing interest Finance Costs (RMB thousands) | Finance Cost Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Bank Borrowing Interest | – | 218 | | Other Borrowing Interest | 673 | 2,120 | | Interest on Amounts Due to Shareholders | 363 | 372 | | Total | 1,036 | 2,710 | | Less: Interest Waived | – | (1,477) | | Net Finance Costs | 1,036 | 1,233 | - Finance costs decreased by RMB 197 thousand year-on-year, mainly attributable to zero bank borrowing interest and a substantial reduction in other borrowing interest[26][44] Income Tax Expense For the six months ended June 30, 2025, the Group incurred no income tax expense, as there was no assessable profit in Hong Kong, and other regions were taxed at local rates - For the six months ended June 30, 2025, the Group had no current China corporate income tax or deferred tax, resulting in zero total tax deductions[27] - No provision for Hong Kong profits tax has been made as the Group had no estimated assessable profits in Hong Kong[27] Loss Per Share For the six months ended June 30, 2025, basic and diluted loss per share attributable to owners of the Company was RMB 0.013, consistent with the prior year, with no potential dilutive ordinary shares Loss Per Share | Indicator | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Loss Attributable to Owners of the Company (RMB thousands) | 4,111 | 3,908 | | Shares in Issue (shares) | 308,860,000 | 308,860,000 | | Basic Loss Per Share (RMB) | (0.013) | (0.013) | - There were no potential dilutive ordinary shares in issue for the six months ended June 30, 2025 and 2024, thus diluted loss per share was the same as basic loss per share[29] Interim Dividend The directors of the Company do not recommend the payment of any dividend for the six months ended June 30, 2025, consistent with the prior year - The directors of the Company do not recommend the payment of any dividend for the six months ended June 30, 2025[30] Property, Plant and Equipment For the six months ended June 30, 2025, the Group made no new purchases of property, plant, and equipment - For the six months ended June 30, 2025, the Group purchased property, plant and equipment of approximately RMB zero[31] Trade Receivables As of June 30, 2025, the Group's net trade receivables amounted to RMB 14,757 thousand, a significant increase of 150.92% from the end of 2024, primarily due to a notable rise in receivables over 365 days old Trade Receivables (RMB thousands) | Indicator | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Trade Receivables | 36,122 | 27,247 | | Less: Impairment of Trade Receivables | (21,365) | (21,366) | | Net Amount | 14,757 | 5,881 | Aging Analysis of Trade Receivables (RMB thousands) | Aging | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Within 90 Days | 3,374 | 5,561 | | 91 to 180 Days | 3,903 | 320 | | 181 to 365 Days | 224 | – | | Over 365 Days | 7,256 | – | | Total | 14,757 | 5,881 | Trade Payables As of June 30, 2025, the Group's trade payables were RMB 8,399 thousand, a slight decrease from the end of 2024, with amounts over 365 days still constituting the vast majority Aging Analysis of Trade Payables (RMB thousands) | Aging | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | 0 to 90 Days | 377 | 245 | | 91 to 180 Days | 158 | 360 | | 181 to 365 Days | 62 | 403 | | Over 365 Days | 7,802 | 7,824 | | Total | 8,399 | 8,832 | Share Capital As of June 30, 2025, the Company's total issued and fully paid share capital was RMB 30,886 thousand, comprising 198,860,000 domestic shares and 110,000,000 H shares, each with a par value of RMB 0.10 Share Capital (shares, RMB thousands) | Share Type | June 30, 2025 (Number of Shares) | June 30, 2025 (RMB thousands) | December 31, 2024 (Number of Shares) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | | Domestic Shares (Par Value RMB 0.10 per share) | 198,860,000 | 19,886 | 198,860,000 | 19,886 | | H Shares (Par Value RMB 0.10 per share) | 110,000,000 | 11,000 | 110,000,000 | 11,000 | | Total | 308,860,000 | 30,886 | 308,860,000 | 30,886 | - Domestic shares and H shares enjoy equal status, with restrictions only on dividend payment currency and shareholder identity[35] Capital Commitments As of June 30, 2025, the Group's capital commitments amounted to contracted contributions of RMB 49 thousand to an associate, consistent with the end of 2024 Capital Commitments (RMB thousands) | Capital Commitment Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Contracted Contributions to an Associate | 49 | 49 | Management Discussion and Analysis This section provides a comprehensive review of the Group's business operations, financial performance, liquidity, and risk management strategies for the reporting period Business Review The Group primarily engages in the design, research, development, production, and sale of image transmission fiber optic products, mainly applied in military low-light night vision devices, with customers in China, Russia, and other Asian countries. In the first half of 2025, due to international circumstances, overseas customer orders significantly declined, while the Company actively expanded its domestic customer base, leading to a year-on-year increase in domestic sales - The Group's principal business involves the design, research, development, production, and sale of image transmission fiber optic products, including fiber optic inverters, fiber optic straight plates, fiber optic faceplates, fiber optic tapers, and microchannel plates[37] - Products are primarily applied in military low-light night vision devices and military low-light night vision imaging systems, with customers mainly located in China, Russia, and other Asian countries[37] - Revenue for the first half of 2025 decreased year-on-year, primarily due to a significant decline in overseas customer orders influenced by international circumstances[38] - The Company actively expanded its domestic customer base, resulting in a year-on-year increase in domestic sales, and plans to continue strengthening new domestic customer development and increasing market share with existing domestic customers, while striving to restore overseas revenue[38] Financial Position and Going Concern Matters The Group faces severe going concern uncertainties with substantial net current liabilities and net liabilities. To improve its financial position, the Company plans operational measures such as revitalizing long-term assets, developing new products, expanding into civilian markets, and strengthening sales, alongside capital and liability measures like debt restructuring, interest waivers, repayment deferrals, and seeking shareholder funding - As of June 30, 2025, the Group had net current liabilities of approximately RMB 196,532 thousand and net liabilities of approximately RMB 146,032 thousand, indicating significant going concern uncertainties[39] - Planned financial measures include: (i) Capital level: targeted issuance of new shares/bonds to introduce strategic investors, and negotiating debt restructuring with shareholders, lenders, and financial institutions; (ii) Operational level: revitalizing long-term assets, developing new products, expanding into civilian product areas, and strengthening sales efforts; (iii) Liability level: negotiating debt restructuring, interest waivers, and repayment deferral plans with shareholders, lenders, and banks, and seeking further financial assistance from major shareholders and lenders[39][40] Financial Measures Implemented The Company has reached loan extension agreements with its major shareholder Taiyuan Changcheng and other lenders, deferring existing loan principal and interest payments until 2026, and securing partial interest waivers to alleviate liquidity pressure - Signed a revised loan agreement with major shareholder Taiyuan Changcheng, extending RMB 14,600 thousand in loan principal until December 31, 2026, and deferring interest payments for 2022-2025 until 2026[41] - Reached agreements with two other lenders to extend existing loans until December 31, 2026, and defer interest payments for 2023-2025 until 2026[41] - One other lender has waived interest payable from the first borrowing up to December 31, 2024, and deferred 2025 interest payment until 2026[41] - As of June 30, 2025, the Group's outstanding bank borrowings amounted to RMB 6,000 thousand[42] Financial Review In the first half of 2025, the Group's turnover decreased by 4.24% to RMB 8,662 thousand year-on-year, while cost of sales increased by 3.42%, leading to a 16.00% decline in gross profit. Despite reductions in administrative and other operating expenses and finance costs, loss after tax still expanded to RMB 4,111 thousand - Turnover was approximately RMB 8,662 thousand, a decrease of RMB 384 thousand from RMB 9,046 thousand in the same period last year[43] - Cost of sales was approximately RMB 5,655 thousand, an increase of RMB 187 thousand from RMB 5,468 thousand in the same period last year[43] - Gross profit was RMB 3,007 thousand, a decrease of RMB 571 thousand from RMB 3,578 thousand in the same period last year[43] - Other income, gains, and losses were approximately RMB 1,217 thousand, primarily from the amortization of deferred government grants, a year-on-year decrease of RMB 10 thousand[44] - Administrative and other operating expenses were approximately RMB 7,197 thousand, a year-on-year decrease of RMB 133 thousand[44] - Finance costs were approximately RMB 1,036 thousand, a year-on-year decrease of RMB 197 thousand[44] - Loss after tax was approximately RMB 4,111 thousand, an expansion from RMB 3,908 thousand in the same period last year[45] Related Party Transactions and Financial Assistance from Major Shareholders As of June 30, 2025, the Group received financial assistance from major shareholders Taiyuan Changcheng, Beijing Zhongze, and other related parties, with total amounts payable of approximately RMB 26,410 thousand. The Board believes the interest charged is on normal commercial terms or better - As of June 30, 2025, amounts payable to major shareholder Taiyuan Changcheng were approximately RMB 24,160 thousand[46] - As of June 30, 2025, amounts payable to major shareholder Beijing Zhongze were approximately RMB 1,481 thousand[46] - As of June 30, 2025, amounts payable to two other related parties were approximately RMB 769 thousand[46] - In the first half of 2025, total interest charged by Taiyuan Changcheng, Beijing Zhongze, and related parties was RMB 358 thousand, RMB 6 thousand, and RMB 12 thousand, respectively[47] - The Board considers the interest charged by related parties to be on normal commercial terms or better[47] Bank and Other Borrowings As of June 30, 2025, the Group had outstanding bank borrowings of RMB 6,000 thousand and other borrowings of approximately RMB 65,424 thousand - As of June 30, 2025, the Group had outstanding bank borrowings of RMB 6,000 thousand, consistent with December 31, 2024[48] - As of June 30, 2025, the Group had outstanding other borrowings of approximately RMB 65,424 thousand[49] Liquidity and Financial Resources As of June 30, 2025, the Group's total assets increased by 4% to RMB 168,786 thousand, and total liabilities increased by 3% to RMB 314,818 thousand, leading to a further RMB 4,111 thousand reduction in total equity to negative RMB 146,032 thousand - As of June 30, 2025, the Group's total assets increased by approximately RMB 5,912 thousand (4%) to RMB 168,786 thousand[50] - As of June 30, 2025, the Group's total liabilities increased by approximately RMB 10,023 thousand (3%) to RMB 314,818 thousand[50] - As of June 30, 2025, the Group's total equity decreased by approximately RMB 4,111 thousand from negative RMB 141,921 thousand to negative RMB 146,032 thousand[50] Gearing Ratio As of June 30, 2025, the Group's gearing ratio was approximately 205%, an increase from 200% at the end of 2024, indicating a further rise in debt levels - As of June 30, 2025, the Group's gearing ratio was approximately 205% (December 31, 2024: 200%)[51] Material Investments Held As of June 30, 2025, the carrying amount of the Group's interests in associates was approximately RMB zero - As of June 30, 2025, the carrying amount of the Group's interests in associates was approximately RMB zero[52] Acquisition and Disposal of Subsidiaries For the six months ended June 30, 2025, the Group did not undertake any acquisitions or disposals of subsidiaries - For the six months ended June 30, 2025, the Group did not acquire or dispose of any subsidiaries[53] Pledge of Assets As of June 30, 2025, certain buildings with a carrying amount of approximately RMB 39,559 thousand and right-of-use assets located at No. 7 Dianzi Street, Demonstration Zone, Shanxi, China, were pledged as collateral for the Group's bank borrowings - As of June 30, 2025, certain buildings with a carrying amount of approximately RMB 39,559 thousand were pledged as collateral for the Group's bank borrowings[54] - The Group's right-of-use assets located at No. 7 Dianzi Street, Demonstration Zone, Shanxi, China, were pledged as collateral for bank borrowings[54] Contingent Liabilities As of June 30, 2025, the Group had no contingent liabilities - As of June 30, 2025, the Group had no contingent liabilities[55] Foreign Exchange Fluctuation Risk The Group faces minimal foreign exchange risk as its business transactions, assets, and liabilities are primarily denominated in its functional currency - The Group faces minimal foreign exchange risk as its business transactions, assets, and liabilities are primarily denominated in the Group's functional currency[56] Employee Information As of June 30, 2025, the Group had approximately 288 full-time employees, with remuneration determined based on experience, performance, and contribution - As of June 30, 2025, the Group had approximately 288 full-time employees[57] - Employee remuneration is paid based on experience, performance, and value contributed to the Group[57] Other Information This section covers additional disclosures including directors' and major shareholders' interests, securities transactions, corporate governance practices, and board composition Directors' and Supervisors' Interests in Shares, Underlying Shares and Debentures of the Company As of June 30, 2025, Director Yuan Guoliang held 3,895,000 H shares, representing 3.54% of H shares and 1.26% of the total share capital. Apart from this, no other directors or supervisors had disclosable interests or short positions Directors' and Supervisors' Interests in Shares | Name | Nature of Interest and Capacity | Number and Type of H Shares | Approximate Percentage of the Company's H Shares* | Approximate Percentage of the Company's Total Share Capital* | | :--- | :--- | :--- | :--- | :--- | | Yuan Guoliang | Personal and Family Interest | 3,895,000 H shares | 3.54% | 1.26% | - Yuan Guoliang's H shares include 3,645,000 shares registered in his own name and 250,000 shares registered in his spouse's name[59] - Save as disclosed above, none of the other directors or supervisors or their associates had any disclosable interests or short positions in the shares, underlying shares or debentures of the Company or any of its associated corporations[59] Major Shareholders As of June 30, 2025, the Company's major shareholders included Zhang Shaohui (holding 26.61% of total share capital through controlled corporations), Beijing Zhongze Venture Capital Management Co., Ltd. (26.61%), Taiyuan Changcheng Optoelectronic Co., Ltd. (25.95%), among others, primarily domestic share holders Major Shareholders (shares, %) | Name/Entity | Nature of Interest and Capacity | Number and Type of Shares | Approximate Percentage of the Company's Domestic Shares* | Approximate Percentage of the Company's Total Share Capital* | | :--- | :--- | :--- | :--- | :--- | | Zhang Shaohui | Interest in Controlled Corporations | 82,200,000 Domestic Shares | 41.34% | 26.61% | | Beijing Zhongze Venture Capital Management Co., Ltd. | Registered and Beneficial Owner and Interest in Controlled Corporations | 82,200,000 Domestic Shares | 41.34% | 26.61% | | Taiyuan Changcheng Optoelectronic Co., Ltd. | Registered and Beneficial Owner | 80,160,000 Domestic Shares | 40.31% | 25.95% | | Beijing Yuankang Technology Co., Ltd. | Registered and Beneficial Owner | 34,000,000 Domestic Shares | 17.10% | 11.01% | | Ning Shuwu | Interest in Controlled Corporations | 34,000,000 Domestic Shares | 17.10% | 11.01% | | Taiyuan Tanghai Automatic Control Co., Ltd. | Registered and Beneficial Owner | 24,900,000 Domestic Shares | 12.52% | 8.06% | | Liu Jiang | Interest in Controlled Corporations | 24,900,000 Domestic Shares | 12.52% | 8.06% | | Qiu Guiqing | Family Interest | 24,900,000 Domestic Shares | 12.52% | 8.06% | - Zhang Shaohui holds domestic share interests through Beijing Zhongze and Taiyuan Tanghai[62] - Ning Shuwu holds domestic share interests through Beijing Yuankang Technology Co., Ltd[67] - Liu Jiang holds domestic share interests through Taiyuan Tanghai Automatic Control Co., Ltd., and his spouse Qiu Guiqing is deemed to have the same interests[67] Purchase, Sale or Redemption of the Company's Listed Securities For the six months ended June 30, 2025, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities - For the six months ended June 30, 2025, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[64] Share Option Scheme The Group does not have any share option scheme - The Group does not have any share option scheme[65] Directors' and Supervisors' Rights to Purchase H Shares For the six months ended June 30, 2025, no directors or supervisors of the Company were granted options to subscribe for H shares, nor did they own or exercise any rights to purchase H shares - For the six months ended June 30, 2025, no directors or supervisors of the Company were granted any options to subscribe for H shares of the Company[66] - As of June 30, 2025, none of the Company's directors and supervisors, or their spouses or children under the age of eighteen, owned or exercised any rights to purchase H shares of the Company during the period[66] Material Contracts For the six months ended June 30, 2025, neither the Company nor any of its subsidiaries entered into any contracts material to the Group's business in which a director or supervisor had a material interest - For the six months ended June 30, 2025, there were no contracts entered into by the Company or any of its subsidiaries that were material to the Group's business and in which a director or supervisor of the Company had a material interest[68] Competing Interests For the six months ended June 30, 2025, none of the Company's directors, supervisors, management shareholders, or their associates had any interests in businesses that compete or are likely to compete with the Group's business - For the six months ended June 30, 2025, none of the Company's directors, supervisors, management shareholders, or any of their respective associates had any interests in businesses that compete or are likely to compete with the Group's business[69] Audit Committee The Company has established an Audit Committee, comprising two independent non-executive directors and one non-executive director, chaired by Mr. Xu Yongfeng, with primary responsibilities including reviewing and overseeing financial reporting, risk management, and internal control systems. The Committee has reviewed the current period's results - The Company has established an Audit Committee, whose primary responsibilities include reviewing and overseeing the Group's financial reporting system, risk management, and internal control systems[70] - The Audit Committee comprises Mr. Xu Yongfeng (Chairman, Independent Non-executive Director), Mr. Rong Fei (Independent Non-executive Director), and Mr. Yuan Guoliang (Non-executive Director)[70] - The Audit Committee has reviewed the Group's unaudited results for the six months ended June 30, 2025[70] Corporate Governance Practices The Company is committed to adopting corporate governance standards and has complied with the Corporate Governance Code in Appendix 15 of the GEM Listing Rules, with two exceptions: no insurance coverage for directors' legal actions, and one non-executive director and three independent non-executive directors not attending the 2021 Annual General Meeting - The Company has complied with the code provisions of the Corporate Governance Code and Corporate Governance Report set out in Appendix 15 to the GEM Listing Rules[72] - Non-compliance matters include: (i) no insurance coverage for directors' potential legal actions (Code Provision A1.8); (ii) one non-executive director and three independent non-executive directors not attending the Annual General Meeting on June 30, 2021 (Code Provision A6.7)[72] Directors' Securities Transactions The Company has adopted a standard code for directors' securities transactions that is no less stringent than the GEM Listing Rules, and no instances of non-compliance were found - The Company has adopted a standard code whose terms are no less exacting than the required standard of dealings set out in Rules 5.48 to 5.67 of the GEM Listing Rules[73] - Following enquiry, the Company is not aware of any non-compliance with the required standard of dealings and the code of conduct for directors' securities transactions[73] Board Composition and Announcement Publication As of the announcement date, the Board comprises eight directors, including three executive directors, two non-executive directors, and three independent non-executive directors. This announcement will be published on the Stock Exchange's website and the Company's website - As of the announcement date (August 29, 2025), the Board comprises eight directors: three executive directors (Song Zhenglai, Jiao Baoguo, Wang Lingling), two non-executive directors (Wu Bo, Yuan Guoliang), and three independent non-executive directors (Xu Yongfeng, Wang Weizhong, Rong Fei)[74][75] - This announcement will be published on the Stock Exchange's website 'www.hkexnews.hk' and the Company's website 'www.sxccoe.com'[75]