中国鹏飞集团(03348) - 2025 - 中期业绩

Summary This section provides a concise overview of the company's key financial performance for the first half of 2025, highlighting revenue, profit, and earnings per share trends 2025 First Half Key Financial Data | Indicator | Six Months Ended June 30, 2025 (RMB million) | Six Months Ended June 30, 2024 (RMB million) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 571.6 | 632.7 | -9.7% | | Gross Profit | 126.6 | 120.5 | +5.0% | | Profit Before Tax | 48.4 | 38.2 | +26.7% | | Profit and Total Comprehensive Income Attributable to Owners of the Company | 42.0 | 32.5 | +29.3% | | Earnings Per Share (RMB cents) | 8.4 | 6.26 | +34.2% | Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income This statement presents the company's financial performance, including revenue, costs, and profit for the six months ended June 30 Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (Six Months Ended June 30) | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Revenue | 571,583 | 632,707 | | Cost of Sales and Services | (445,011) | (512,194) | | Gross Profit | 126,572 | 120,513 | | Other Income | 11,846 | 15,413 | | Other Gains and Losses | 3,744 | 1,718 | | Selling and Distribution Expenses | (45,871) | (38,234) | | Administrative Expenses | (27,388) | (24,630) | | Research Expenses | (18,836) | (37,250) | | Impairment Losses on Trade and Other Receivables and Contract Assets, Net of Reversals | (1,648) | 974 | | Finance Costs | (8) | (297) | | Profit Before Tax | 48,411 | 38,207 | | Income Tax Expense | (6,413) | (5,720) | | Profit and Total Comprehensive Income for the Period | 41,998 | 32,487 | | Profit and Total Comprehensive Income for the Period Attributable to Owners of the Company | 41,991 | 31,301 | | Basic Earnings Per Share (RMB cents) | 8.40 | 6.26 | Condensed Consolidated Statement of Financial Position This statement provides a snapshot of the company's assets, liabilities, and equity as of June 30, 2025, compared to December 31, 2024 Condensed Consolidated Statement of Financial Position (As of June 30) | Indicator | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Non-current Assets | | | | Trade Receivables | 38,188 | 93,645 | | Property, Plant and Equipment | 345,637 | 363,228 | | Investment Properties | 6,955 | 7,479 | | Intangible Assets | 567 | 231 | | Right-of-use Assets | 43,824 | 44,258 | | Fixed Deposits | 115,000 | 60,000 | | Deferred Tax Assets | 23,925 | 25,805 | | Deposits Paid for Purchase of Property, Plant and Equipment | 4,263 | 4,190 | | Total Non-current Assets | 578,361 | 598,836 | | Current Assets | | | | Inventories | 777,938 | 728,620 | | Trade Receivables, Bills Receivable and Other Receivables | 355,099 | 383,809 | | Contract Assets | 25,673 | 41,727 | | Contract Costs | 16,506 | 17,115 | | Recoverable Value Added Tax | 570 | 8,248 | | Prepayments to Suppliers | 69,313 | 86,460 | | Financial Assets at Fair Value Through Profit or Loss | 8,587 | 109,318 | | Fixed Deposits | 168,980 | 98,000 | | Restricted Bank Deposits | 71,646 | 121,782 | | Bank Balances and Cash | 633,676 | 506,443 | | Total Current Assets | 2,127,988 | 2,101,522 | | Current Liabilities | | | | Trade Payables, Bills Payable and Other Payables | 499,352 | 628,042 | | Contract Liabilities | 1,157,856 | 1,051,915 | | Dividends Payable | 20,185 | – | | Tax Payable | 18,360 | 28,383 | | Bank Borrowings | 300 | 200 | | Deferred Income | 2,751 | 2,659 | | Total Current Liabilities | 1,698,804 | 1,711,199 | | Net Current Assets | 429,184 | 390,323 | | Total Assets Less Current Liabilities | 1,007,545 | 989,159 | | Total Equity | 956,641 | 936,215 | | Non-current Liabilities | | | | Deferred Income | 43,603 | 46,445 | | Bank Borrowings | – | – | | Deferred Tax Liabilities | 7,301 | 6,499 | | Total Non-current Liabilities | 50,904 | 52,944 | Notes to the Condensed Consolidated Financial Statements This section provides detailed explanations and disclosures supporting the condensed consolidated financial statements, covering accounting policies and specific financial items 1. Company Information China Pengfei Group Co., Ltd. was incorporated in the Cayman Islands in 2017, listed on HKEX in 2019, and primarily engages in equipment manufacturing and production line services - The company was incorporated in the Cayman Islands on July 31, 2017, and listed on the Main Board of the Stock Exchange on November 15, 2019[10] - Its principal activities include the production and sale of complete sets of equipment (rotary kiln systems, grinding equipment systems, and related components), production line construction, and installation services[10] - The condensed consolidated financial statements are presented in RMB[11] 2. Basis of Preparation The condensed consolidated financial statements are prepared in accordance with IAS 34 and the disclosure requirements of Appendix D2 of the Listing Rules - The financial statements are prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" and the applicable disclosure requirements of Appendix D2 of the Listing Rules[12] 3. Significant Accounting Policies The financial statements are primarily prepared on a historical cost basis, with no significant impact from newly adopted IFRS amendments - The condensed consolidated financial statements are prepared on a historical cost basis, except for financial assets at fair value through profit or loss[13] - The revised International Financial Reporting Standards (IFRS) accounting standards, such as the amendments to IAS 21 "Lack of Exchangeability," adopted for the first time in this interim period, have not had a significant impact on the Group's financial position and performance for the current and prior periods[13][14] 4. Revenue and Segment Information Total revenue for the period was RMB 571.6 million, with equipment manufacturing as the main source, while production line construction and installation services saw significant growth, and overseas markets contributed more - Revenue refers to amounts received and receivable from the sale of equipment, production line construction, and the provision of installation services, net of sales-related taxes[15] Revenue Sources (Six Months Ended June 30) | Revenue Source | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Sale of Equipment | 428,778 | 535,964 | | Revenue from Production Line Construction | 129,712 | 94,438 | | Installation Services | 13,093 | 2,305 | | Total | 571,583 | 632,707 | Geographical Revenue (Six Months Ended June 30) | Geographical Region | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Mainland China | 401,038 | 501,362 | | Uzbekistan | 31,400 | 94,438 | | Republic of Kenya | 53,282 | – | | Republic of Ghana | 40,611 | – | | Republic of Turkey | 15,368 | – | | Republic of Burundi | – | 27,161 | | Other Countries | 29,884 | 9,746 | | Total | 571,583 | 632,707 | 5. Profit Before Tax Profit before tax for the period was RMB 48.4 million, influenced by depreciation, inventory capitalization, and impairment losses on receivables Components of Profit Before Tax (Six Months Ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Depreciation of Property, Plant and Equipment | 17,671 | 17,297 | | Depreciation of Investment Properties | 524 | 529 | | Amortisation of Intangible Assets | 52 | 21 | | Depreciation of Right-of-use Assets | 442 | 461 | | Total Depreciation and Amortisation | 18,689 | 18,308 | | Capitalisation of Inventories | (11,838) | (15,116) | | Total Depreciation and Amortisation Deducted from Profit or Loss | 6,851 | 3,192 | | Impairment Losses on Trade Receivables, Net of Reversals | 3,221 | (2,610) | | Impairment Losses on Other Receivables, Net of Reversals | (92) | 251 | | Impairment Losses on Contract Assets, Net of Reversals | (1,481) | 3,333 | | Net Impairment Losses | 1,648 | 974 | 6. Income Tax Expense Income tax expense increased to RMB 6.4 million, with an effective tax rate of 13.2%, reflecting preferential tax rates for high-tech enterprises in mainland China Income Tax Expense (Six Months Ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | China Corporate Income Tax | 3,731 | 4,111 | | Deferred Tax Expense | 2,682 | 1,609 | | Total Income Tax Expense | 6,413 | 5,720 | - For the six months ended June 30, 2025, the effective tax rate was 13.2% (2024: 15.0%)[48] - Jiangsu Pengfei Group Co., Ltd., as a high-tech enterprise, enjoys a preferential tax rate of 15% until November 5, 2027; other Chinese subsidiaries are subject to a 25% tax rate[20] 7. Dividends The company declared a final dividend for 2024 but the board resolved not to declare an interim dividend for the six months ended June 30, 2025 Dividend Distribution | Dividend Type | Six Months Ended June 30, 2025 (RMB) | Six Months Ended June 30, 2024 (RMB) | | :--- | :--- | :--- | | 2024 Final Dividend (per ordinary share) | 0.04375 | 0.0857 | | Total 2024 Final Dividend | 21,875,000 | 42,850,000 | - The Board of Directors has resolved not to declare a dividend for the six months ended June 30, 2025[22] 8. Earnings Per Share Basic earnings per share attributable to owners increased to RMB 8.40 cents for the six months ended June 30, 2025, with no diluted EPS presented due to absence of potential ordinary shares Earnings Per Share Calculation (Six Months Ended June 30) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Profit for the Period Attributable to Owners of the Company (RMB thousand) | 41,991 | 31,301 | | Number of Ordinary Shares (thousand shares) | 500,000 | 500,000 | | Basic Earnings Per Share (RMB cents) | 8.40 | 6.26 | - Diluted earnings per share is not presented as there were no potential ordinary shares in issue for the six months ended June 30, 2024 and 2025[23] 9. Trade and Other Receivables and Bills Receivable Total trade and other receivables and bills receivable decreased by 17.6% to RMB 393.3 million, primarily due to a reduction in bills receivable, with non-current trade receivables linked to a deferred payment project in Kazakhstan Trade and Other Receivables and Bills Receivable (As of June 30) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Trade Receivables (net of impairment allowance) | 216,485 | 244,616 | | Bills Receivable | 166,674 | 218,415 | | Other Receivables and Prepayments (net of impairment allowance) | 10,130 | 14,423 | | Total | 393,289 | 477,454 | - Non-current trade receivables primarily represent the outstanding balance of RMB 38,190,000 (net of impairment allowance of RMB 3,864,000) related to a production line construction for a customer in the Republic of Kazakhstan, with payment deferred due to extended bank approval procedures, accruing interest at a fixed annual rate of 8.41%, and secured by a corporate guarantee, equity pledge, and a pledge over the cement plant under construction[24][25] Ageing Analysis of Trade Receivables (Net of Impairment Allowance, As of June 30) | Ageing of Trade Receivables | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | 0 to 1 year | 108,792 | 115,572 | | 1 to 2 years | 53,784 | 26,387 | | Over 2 years | 53,909 | 102,657 | | Total | 216,485 | 244,616 | Ageing Analysis of Bills Receivable (By Issue Date, As of June 30) | Ageing of Bills Receivable | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | 0 to 180 days | 166,674 | 215,193 | | 181 days to 1 year | – | 3,222 | | Total | 166,674 | 218,415 | 10. Trade and Other Payables and Bills Payable Total trade and other payables and bills payable decreased by 20.5% to RMB 499.4 million, mainly driven by reductions in trade payables and bills payable Trade and Other Payables and Bills Payable (As of June 30) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Trade Payables | 351,747 | 407,298 | | Bills Payable | 79,590 | 142,965 | | Other Taxes Payable | 13,249 | 9,123 | | Amounts Payable to Independent Third Parties | 1,003 | 1,019 | | Accrued Expenses | 1,096 | 3,306 | | Accrued Salaries and Benefits | 9,948 | 20,987 | | Unpaid Incremental Commissions | 39,043 | 39,888 | | Lease Liabilities | 268 | 264 | | Other Payables | 3,408 | 3,192 | | Total | 499,352 | 628,042 | Ageing Analysis of Trade Payables (By Invoice Date, As of June 30) | Ageing of Trade Payables | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | 0 to 1 year | 265,942 | 228,187 | | 1 to 2 years | 18,311 | 137,662 | | Over 2 years | 67,494 | 41,449 | | Total | 351,747 | 407,298 | Ageing Analysis of Bills Payable (By Issue/Maturity Date, As of June 30) | Ageing of Bills Payable | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | 0 to 180 days | 79,590 | 142,965 | Management Discussion and Analysis This section provides an overview of the company's operational performance, financial results, and future outlook, along with key risks and uncertainties Business Review The company diversified its business by targeting non-building materials sectors and 'Belt and Road' markets, while investing in R&D and participating in national standard setting Expanding Customer Base The company maintained stable revenue from building materials clients while increasing the proportion of equipment manufacturing revenue from non-building materials sectors - For the six months ended June 30, 2025, revenue from building materials industry customers was approximately RMB 208.9 million, a slight increase from approximately RMB 203.9 million in the same period last year[34] - The proportion of equipment manufacturing revenue from non-building materials industry customers increased from approximately 79.7% in the same period of 2024 to approximately 81.9% in 2025[34] - Over 80% of rotary kilns are used in emerging industries such as laterite nickel ore, new energy lithium batteries, environmental sludge, and solid waste treatment[34] Belt and Road Initiative Countries The company continues to expand its business into potential 'Belt and Road' markets, despite a decrease in revenue contribution from these regions in the current period - The company continues its efforts to expand its business into potential markets along the "Belt and Road" Initiative countries such as Uzbekistan, Kuwait, Turkey, and Sri Lanka[35] - The proportion of revenue from "Belt and Road" countries decreased from approximately 20.8% in the same period of 2024 to approximately 11.1% in 2025[35] - As of June 30, 2025, the company has one production line project underway in a "Belt and Road" country[35] Research and Development and Standard Setting The company invests in R&D for energy-saving and environmental protection technologies, collaborates with academic institutions, and participates in national standard formulation, holding numerous patents - The company invests in R&D focused on energy-saving and environmental protection technologies, collaborating with Chinese universities and research institutions, such as with Nantong Institute of Technology on "Research and Development of Complete Sets of Equipment for Efficient Preparation of Battery-Grade Lithium Carbonate from Low-Grade Spodumene"[36] - For the six months ended June 30, 2025, the company participated in the formulation of two national standards, including "Technical Requirements for New Dry Process Cement Production Complete Equipment Part 3: Cement Preparation System"[36] - As of June 30, 2025, the company holds 174 authorized patents, of which 103 are invention patents, with an additional 100 invention patent applications awaiting approval[36] Outlook The company anticipates continued government stimulus and 'Belt and Road' investments, focusing on quality, innovation, internationalization, and smart applications to become a leading high-end equipment group - The Chinese government is expected to continue implementing economic stimulus policies and encouraging overseas infrastructure investment in "Belt and Road" countries, and the company will continue to leverage the "Belt and Road" Initiative and actively explore related production line construction opportunities[37] - Global economic growth is expected to slow in the second half of the year, and US tariff policies will impact the company's overseas production line and grinding station EP/EPC businesses; domestic "anti-involution" measures are expected to contribute to increased demand in the building materials industry[37] - The company will focus on six key areas: improving quality and efficiency for stable growth, promoting high-quality development of equipment manufacturing, strengthening technology-driven innovation, advancing high-quality international operations, accelerating intelligent application development, and successfully completing the reform and enhancement initiative[37] Financial Review Total revenue decreased by 9.7% to RMB 571.6 million, primarily due to equipment manufacturing decline, but gross profit margin improved to 22.1%, and profit attributable to owners increased by 29.3% to RMB 42.0 million Revenue Total revenue decreased by 9.7% to RMB 571.6 million, with equipment manufacturing declining while installation services and production line construction saw significant growth Revenue Composition (Six Months Ended June 30) | Business Line | 2025 (RMB thousand) | 2024 (RMB thousand) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Equipment Manufacturing | 428,778 | 535,964 | -20.0% | | Installation Services | 13,093 | 2,305 | +468.0% | | Production Line Construction | 129,712 | 94,438 | +37.4% | | Total | 571,583 | 632,707 | -9.7% | - The decrease in equipment manufacturing revenue was primarily due to reduced sales of grinding equipment systems[39] - The increase in installation services revenue was mainly due to increased demand for installation services from equipment manufacturing customers[39] - The increase in production line construction revenue was primarily due to three new production lines[39] Cost of Sales and Services Cost of sales and services decreased by 13.1% to RMB 445.0 million, mainly due to lower raw material costs, leading to an improved gross profit margin of 22.1% - Cost of sales and services decreased by 13.1% (approximately RMB 67.2 million) to RMB 445.0 million[40] - Raw material costs, as the largest component, decreased by approximately RMB 61.3 million[40] - Gross profit increased by 5.0% to RMB 126.6 million, with the gross profit margin improving from 19.0% to 22.1%[41] Other Income Other income decreased by 23.1% to RMB 11.8 million, primarily due to reductions in interest income and government grants - Other income decreased by 23.1% (approximately RMB 3.6 million) to RMB 11.8 million[42] - The decrease was mainly due to lower interest income and government grants[42] Other Gains and Losses Other gains increased by 117.9% to RMB 3.7 million, mainly driven by higher net gains from the disposal of financial assets - Other gains increased by 117.9% (approximately RMB 2.0 million) to RMB 3.7 million[43] - The increase was mainly due to higher net gains from the disposal of financial assets[43] Selling and Distribution Expenses Selling and distribution expenses increased by 20.0% to RMB 45.9 million, primarily due to higher commissions and port charges - Selling and distribution expenses increased by 20.0% (approximately RMB 7.6 million) to RMB 45.9 million[44] - The increase was mainly due to higher commissions and port charges[44] Administrative Expenses Administrative expenses increased by 11.2% to RMB 27.4 million, mainly attributable to higher staff salaries - Administrative expenses increased by 11.2% (approximately RMB 2.8 million) to RMB 27.4 million[45] - The increase was mainly due to higher staff salaries[45] Research Expenses Research expenses decreased significantly by 49.4% to RMB 18.8 million, primarily due to reduced R&D costs for environmental production technology equipment - Research expenses decreased by 49.4% (approximately RMB 18.4 million) to RMB 18.8 million[46] - The decrease was mainly due to reduced research and development expenses for environmental production technology-related equipment[46] Impairment Losses on Trade and Other Receivables and Contract Assets, Net of Reversals Impairment losses increased by 269.2% to RMB 1.6 million, primarily due to an increase in long-aged outstanding trade receivables - Impairment losses increased by 269.2% from a reversal of approximately RMB 1.0 million in the same period of 2024 to a loss of approximately RMB 1.6 million in the same period of 2025[47] - The increase was mainly due to an increase in long-aged outstanding trade receivables[47] Income Tax Expense Income tax expense increased by 12.1% to RMB 6.4 million, while the effective tax rate decreased to 13.2% - Income tax expense increased by 12.1% (approximately RMB 0.7 million) to RMB 6.4 million[48] - The effective tax rate decreased from 15.0% in the same period of 2024 to 13.2% in the same period of 2025[48] Profit and Total Comprehensive Income for the Period Profit and total comprehensive income attributable to owners increased by 29.3% to RMB 42.0 million - Profit and total comprehensive income for the period attributable to owners of the Company increased by 29.3% (approximately RMB 9.5 million) to RMB 42.0 million[49] Working Capital Management The company maintained sufficient working capital, with net current assets increasing to RMB 429.2 million and a current ratio of 125.3%, despite increased inventory and trade receivables turnover days - Net current assets were approximately RMB 429.2 million (December 31, 2024: RMB 390.3 million), and the current ratio improved to 125.3% (December 31, 2024: 122.8%)[50] - Inventories increased by 6.8% to RMB 777.9 million, and inventory turnover days increased to 304 days (2024: 263 days), mainly due to increased domestic sales orders but decreased sales volume[50] - Trade receivables, bills receivable, and other receivables decreased by 17.6% to RMB 393.3 million, with bills receivable decreasing by 23.7%; trade receivables turnover days increased to 79 days (2024: 34 days), mainly due to decreased sales volume[51] - Contract liabilities increased by 10.1% to RMB 1,157.9 million, primarily due to prepayments received from customers for new and ongoing contracts[52] Liquidity, Financial and Capital Resources The company's liquidity is supported by operating cash flow and bank financing, with cash and cash equivalents increasing to RMB 702.7 million and an improved gearing ratio of 183% - As of June 30, 2025, cash and cash equivalents were approximately RMB 702.7 million (December 31, 2024: approximately RMB 555.4 million)[53] - Total bank facilities amounted to approximately RMB 1,330 million, of which approximately RMB 251.7 million was utilized (including bank guarantees, bank acceptance bills, and loans), leaving unutilized facilities of approximately RMB 1,078.3 million[54] - The gearing ratio decreased from 188.8% as of December 31, 2024, to 183% as of June 30, 2025, mainly due to an increase in the equity balance[54] Cash Flow (Six Months Ended June 30) | Cash Flow | 2025 (RMB million) | 2024 (RMB million) | | :--- | :--- | :--- | | Net Cash From Operating Activities | 103.0 | 150.7 | | Net Cash Used in Investing Activities | (94.7) | (38.5) | | Net Cash Used in Financing Activities | (1.3) | (36.7) | Principal Risks and Uncertainties The company faces market risks (currency, interest rate), credit risk, and liquidity risk, with credit risk concentrated in production line construction clients and managed through credit limits and recovery procedures Financial Risks The Group is exposed to market risks arising from changes in market interest rates and prices, including currency, interest rate, credit, and liquidity risks - The Group is exposed to market risks arising from changes in market interest rates and prices, including currency, interest rate, credit, and liquidity risks[56] Currency Risk Currency risk primarily relates to USD-denominated sales to non-mainland China customers, which management considers insignificant, thus no hedging policies are adopted - Currency risk primarily relates to USD-denominated sales to customers outside mainland China[57] - Management considers foreign exchange risk to be insignificant and has not adopted any foreign exchange hedging policies or held derivative financial instruments[57] Interest Rate Risk Interest rate risk is associated with bank borrowings, lease liabilities, and bank balances, with management continuously monitoring and considering hedging if necessary - Interest rate risk is primarily associated with bank borrowings, lease liabilities, loans to independent third parties, amounts payable to independent third parties, and floating-rate restricted bank balances and bank balances[58] - The company currently has no formal interest rate hedging policy, but management continuously monitors the risk and will consider hedging if necessary[58] Credit Risk Credit risk is concentrated in trade receivables from production line construction clients, managed through credit limits, approval processes, and overdue debt recovery procedures - Credit risk primarily arises from trade receivables, bills receivable and other receivables, contract assets, restricted bank deposits, and bank balances[59] - Credit risk is concentrated, with 40% of total trade receivables due from production line construction customers[59] - The company mitigates credit risk by assigning teams responsible for credit limits, approval, and overdue debt recovery procedures, and by reviewing the recoverability of receivables to make adequate impairment loss provisions[59] Liquidity Risk The company has not experienced any liquidity shortages and manages liquidity risk by maintaining sufficient cash and cash equivalents - For the six months ended June 30, 2025, the company did not experience any liquidity shortages[60] - The company manages liquidity risk by maintaining sufficient cash and cash equivalents[60] Contingent Liabilities As of June 30, 2025, the company had no significant contingent liabilities - As of June 30, 2025, the Group had no significant contingent liabilities[61] Capital Expenditure Capital expenditure for the six months ended June 30, 2025, was approximately RMB 0.5 million, primarily for the purchase of property, plant, and equipment - For the six months ended June 30, 2025, the Group's capital expenditure was approximately RMB 0.5 million[62] - This was primarily related to the purchase of property, plant, and equipment and associated deposit policies[62] Pledge of Assets As of June 30, 2025, restricted bank deposits of approximately RMB 71.6 million were pledged to banks for the issuance of bills payable - As of June 30, 2025, restricted bank deposits of approximately RMB 71.6 million were pledged to banks for the issuance of bills payable[63] Capital Commitments As of June 30, 2025, capital commitments related to contracted but unprovided for property, plant, and equipment purchases amounted to approximately RMB 3.0 million - As of June 30, 2025, the Group's capital expenditure related to contracted but unprovided for purchases of property, plant, and equipment was approximately RMB 3.0 million[64] Off-Balance Sheet Transactions The company has not entered into any significant off-balance sheet transactions or arrangements, other than disclosed capital commitments and pledged assets - Other than the disclosed capital commitments and pledged assets, the company has not entered into any significant off-balance sheet transactions or arrangements for the six months ended June 30, 2025, and up to the date of this announcement[65] Employees and Remuneration Information As of June 30, 2025, the company had 1,003 employees with total staff costs of approximately RMB 62.0 million, maintaining good employee relations and providing regular training - As of June 30, 2025, the Group had 1,003 employees (June 30, 2024: 894 employees)[66] - For the six months ended June 30, 2025, staff costs (including directors' remuneration) were approximately RMB 62.0 million (2024: approximately RMB 57.6 million)[66] - The company provides regular training covering aspects such as safety production, sales and marketing, laws and regulations, technical skills, management, and production quality[66] - The company maintains good working relationships with its employees, with no significant labor disputes occurring[66] Other Information This section covers additional disclosures including material investments, future plans, post-reporting period events, and compliance with corporate governance standards Material Investments Held, Material Acquisitions or Disposals As of June 30, 2025, the company held financial assets at fair value through profit or loss of RMB 8.6 million, primarily Taikang Kaitai wealth management products, and redeemed some structured deposits, with no other significant investments or disposals - As of June 30, 2025, the company held financial assets at fair value through profit or loss of RMB 8.6 million (December 31, 2024: RMB 109.3 million), representing 0.32% of total assets[67] Financial Assets at Fair Value Through Profit or Loss (As of June 30) | Financial Asset | Subscription Date | Interest Rate (per annum) | Maturity Date | Principal Subscribed (HKD thousand) | Fair Value Change for Six Months Ended June 30, 2025 (HKD thousand) | Carrying Amount as of June 30, 2025 (HKD thousand) | Percentage of Group's Total Assets | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Taikang Kaitai Wealth Management Product Class A - HKD - Accumulative, Taikang Kaitai HKD Money Market Fund | July 9, 2024 | Depends on other factors | No fixed term | 9,000 | 338.1 | 9,338.1 | 0.32% | - The company redeemed China Bank linked structured deposit wealth management products in February 2025, with annual interest rates of 2.7891% and 1.4% respectively[69] - Save as disclosed above, for the six months ended June 30, 2025, the company did not hold any material investments or undertake any material acquisitions or disposals of subsidiaries, associates, and joint ventures[68] Future Plans for Material Investments and Capital Assets The company has no future plans for material investments and capital assets other than those disclosed in its prospectus - Save as disclosed in the company's prospectus dated October 31, 2019, the Group has no other future plans for material investments and capital assets as of the date of this announcement[70] Events After the Reporting Period After the reporting period, China Heavy Machinery Engineering Co., Ltd. subscribed to a Huatai Global Investment Fund wealth management product for HKD 28 million, with no other significant subsequent events - On August 6, 2025, China Heavy Machinery Engineering Co., Ltd. (an indirect wholly-owned subsidiary) subscribed to a wealth management product of Huatai Global Investment Fund for HKD 28,000,000[71] - Save as disclosed above, no other significant events affecting the Group occurred after June 30, 2025[72] 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 June 30, 2025 - For the six months ended June 30, 2025, neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed securities[73] Interim Dividend The Board of Directors resolved not to declare an interim dividend for the six months ended June 30, 2025 - The Board of Directors resolved not to declare an interim dividend for the six months ended June 30, 2025[74] Compliance with Corporate Governance Code The company has complied with the code provisions of the Corporate Governance Code as set out in Appendix C1 of the HKEX Listing Rules for the six months ended June 30, 2025 - For the six months ended June 30, 2025, the company has complied with the code provisions set out in Part 2 of the Corporate Governance Code[75] Standard Code for Securities Transactions by Directors All directors confirmed compliance with the Standard Code for Securities Transactions by Directors of Listed Issuers for the six months ended June 30, 2025 - All directors have confirmed that they have complied with the Standard Code for Securities Transactions by Directors of Listed Issuers for the six months ended June 30, 2025[76] Review of Unaudited Interim Results by Audit Committee The Audit Committee reviewed the unaudited interim condensed consolidated financial information for the six months ended June 30, 2025, confirming compliance with applicable standards and rules, though it was not audited or reviewed by the Group's auditor - The Audit Committee has reviewed the unaudited interim condensed consolidated financial information of the Group for the six months ended June 30, 2025[77] - The Audit Committee is of the opinion that the financial information complies with applicable accounting standards, the Listing Rules, and other legal requirements, and that adequate disclosures have been made[77] - This financial information has not been audited or reviewed by Deloitte Touche Tohmatsu, the Group's auditor[77] Publication of Interim Results and Interim Report on HKEX and Company Website This announcement has been published on the HKEX and company websites, and the interim report will be dispatched to shareholders and published on these platforms in due course - This announcement has been published on the website of the Stock Exchange of Hong Kong Limited (www.hkexnews.hk) and the company's website (http://pengfei.com.cn/)[78](index=78&type=chunk) - The company's interim report for the six months ended June 30, 2025, will be dispatched to the company's shareholders and published on the HKEX and company websites in due course[78]