中国蜀塔(08623) - 2025 - 中期财报

Company Information This chapter provides essential information about China Shutower International Holdings Group Limited, including its board members, company secretary, compliance officer, authorized representatives, committee members, auditor, legal counsel, registered office, principal places of business, principal bankers, share registrar, and company website - The Board of Directors comprises Mr. Dang Fei (Chairman and CEO), Mr. Wang Xiaozhong, Ms. Luo Qian, Ms. Hu Yi, Ms. Zhou Wenqi, Mr. Zhang Weixian (Executive Directors), and Dr. Zuo Xinzhang, Mr. Ma Kaibing, Mr. Li Jian (Independent Non-executive Directors)[7] - The company's registered office is in the Cayman Islands, with its principal place of business in Guangyuan City, Sichuan Province, China, and in Tsim Sha Tsui, Kowloon, Hong Kong[7][8] - Mr. Ma Kaibing chairs the Audit Committee, Mr. Li Jian chairs the Remuneration Committee, and Mr. Dang Fei chairs the Nomination Committee[7] Unaudited Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income This chapter reports the unaudited condensed consolidated statement of profit or loss and other comprehensive income for the six months ended June 30, 2025, showing an expanded loss for the period, primarily due to increased revenue but decreased gross profit and other income Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income Key Data | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 168,245 | 89,327 | 88.3% | | Cost of sales | (167,583) | (88,241) | 90.0% | | Gross profit | 662 | 1,086 | -39.0% | | Other income | 848 | 4,276 | -80.2% | | Loss before income tax expense | (15,850) | (13,892) | 14.1% | | Loss for the period | (16,476) | (11,220) | 46.8% | | Loss for the period attributable to owners of the Company | (15,023) | (11,257) | 33.4% | | Basic and diluted loss per share (RMB cents) | (0.12) | (0.12) | 0.0% | Unaudited Condensed Consolidated Statement of Financial Position As of June 30, 2025, the company's total assets and net assets both decreased, with an expanded net current liabilities, reflecting challenging financial conditions Condensed Consolidated Statement of Financial Position Key Data | Indicator | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Total assets | 228,223 | 272,799 | -16.4% | | Non-current assets | 106,885 | 111,842 | -4.4% | | Current assets | 121,338 | 160,957 | -24.6% | | Current liabilities | 200,847 | 224,722 | -10.7% | | Net current liabilities | (79,509) | (63,765) | 24.7% | | Net assets | 693 | 12,468 | -94.4% | | Total equity | 693 | 12,468 | -94.4% | Unaudited Condensed Consolidated Statement of Changes in Equity For the six months ended June 30, 2025, the company's total equity significantly decreased, primarily due to losses for the period and other comprehensive expenses, despite new share issuance Condensed Consolidated Statement of Changes in Equity Key Data | Indicator | June 30, 2025 (RMB thousand) | January 1, 2024 (RMB thousand) | | :--- | :--- | :--- | | Share capital | 10,345 | 8,222 | | Share premium | 42,691 | 37,111 | | Accumulated losses | (144,422) | (70,563) | | Subtotal of equity attributable to owners of the Company | (10,451) | 48,599 | | Non-controlling interests | 11,144 | 21,938 | | Total equity | 693 | 70,537 | - Loss for the period attributable to owners of the Company was RMB 15,023 thousand, and loss attributable to non-controlling interests was RMB 1,455 thousand[13] - In the first half of 2025, RMB 4,730 thousand was raised through share issuance[13] Unaudited Condensed Consolidated Statement of Cash Flows For the six months ended June 30, 2025, net cash flow from operating activities significantly decreased, cash outflow from investing activities reduced, and net cash flow from financing activities also decreased, though cash and cash equivalents at period-end slightly increased Condensed Consolidated Statement of Cash Flows Key Data | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Net cash from operating activities | 1,623 | 9,178 | -82.3% | | Net cash used in investing activities | (3,049) | (18,800) | -83.8% | | Net cash from financing activities | 2,026 | 8,556 | -76.4% | | Net increase/(decrease) in cash and cash equivalents | 600 | (1,066) | N/A | | Cash and cash equivalents at end of period | 2,376 | 343 | 592.7% | - Proceeds from borrowings were RMB 13,800 thousand, and repayment of borrowings was RMB 14,311 thousand, resulting in a net outflow from borrowings[15] Notes to the Unaudited Condensed Consolidated Financial Statements This chapter elaborates on the basis of preparation, accounting policies, risk management, segment reporting, specific components and changes of financial items, and related party transactions, providing supplementary information for understanding the financial statements - The Group is primarily engaged in the production and sale of wire and cable, sale of aluminum products, and sale of polymer materials in China[16] - The financial statements are prepared in accordance with Hong Kong Accounting Standard 34 and the GEM Listing Rules, and are presented in RMB[18][20] 1. General Information This section introduces China Shutower International Holdings Group Limited's registration place, principal places of operation, business scope, and its shares listed on GEM of the Stock Exchange - The Company was incorporated in the Cayman Islands, with its principal place of operation in Guangyuan City, Sichuan Province, China[16] - The Group's principal activities are the production and sale of wire and cable, sale of aluminum products, and sale of polymer materials[16] - The Company's shares were listed on GEM of the Stock Exchange on July 10, 2020[17] 2. Basis of Preparation This section clarifies that the interim financial statements are prepared in accordance with HKAS 34 and GEM Listing Rules, using a historical cost basis, consistent with the 2024 annual report's accounting policies, with no significant impact from new standards adoption - The financial statements are prepared in accordance with Hong Kong Accounting Standard 34 issued by the HKICPA and the applicable disclosure requirements of the GEM Listing Rules of the Stock Exchange[18] - The financial statements are prepared on a historical cost basis and presented in RMB[19][20] - The adoption of new and revised HKFRSs had no significant impact on the financial statements for the current period[21] 3. Adoption of New and Revised Hong Kong Financial Reporting Standards During this period, amendments to HKAS 21 and HKFRS 1 (Lack of Exchangeability) were first applied, but these amendments had no significant impact on the Group's financial performance and position - The Group first applied the amendments to Hong Kong Accounting Standard 21 and Hong Kong Financial Reporting Standard 1 (Lack of Exchangeability)[22] - The adoption of new and revised HKFRSs had no significant impact on the Group's results and financial position for the current and prior periods[22] 4. Application of Judgements and Estimates The significant judgements and key sources of estimation uncertainty made by management in applying accounting policies for the interim financial statements are consistent with those in the accountant's report - The significant judgements and estimates made by management in preparing the financial statements are the same as those in the accountant's report[23] 5. Financial Risk Management The Group's operations involve credit, market (foreign exchange and interest rate), and liquidity risks, but it historically does not use derivatives for hedging or trading, and risk management policies remain unchanged since December 31, 2024 - The Group's operations involve credit risk, market risk (foreign exchange risk and interest rate risk), and liquidity risk[24] - The Group has historically not used derivative instruments for hedging or trading purposes[24] - Risk management policies have not changed since December 31, 2024[25] 6. Segment Reporting The Group primarily produces and sells wire and cable, aluminum products, and polymer materials in China, with management treating overall operating results as a single reportable operating segment, thus no separate operating or geographical segment information is presented - The Group is primarily engaged in the production and sale of wire and cable, sale of aluminum products, and sale of polymer materials in China[26] - The Group has only one reportable operating segment, therefore no operating segment information is presented[26] - All of the Group's revenue and non-current assets are derived from China, thus no geographical segment reporting is presented[27] Major Customer Revenue Contribution | Customer | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Customer A | 108,930 | 70,273 | 7. Revenue Revenue primarily derived from the production and sale of wire and cable and aluminum products, totaling RMB 168,245 thousand in the first half of 2025, with wire and cable being the largest contributor and aluminum product sales also beginning to contribute - Revenue refers to amounts received and receivable from the production and sale of wire and cable and the sale of aluminum products during the period[30] Revenue by Product Type | Product Type | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Production and sale of wire and cable | 167,023 | 89,327 | | Production and sale of aluminum products | 1,222 | – | | Total Revenue | 168,245 | 89,327 | 8. Other Income Other income significantly decreased to RMB 848 thousand in the first half of 2025, primarily due to a notable decline in interest income and government grants and subsidies Other Income Components | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Interest income | 1 | 1,208 | | Government grants and subsidies | 470 | 1,943 | | Rental income | 215 | 513 | | Others | 162 | 612 | | Total | 848 | 4,276 | - The decrease in other income was mainly due to the lack of significant interest income from receivables and reduced government subsidies[34][35] 9. Finance Costs Finance costs remained relatively stable at approximately RMB 2,796 thousand in the first half of 2025, with a slight decrease in interest expense on bank and other borrowings offset by interest expense on lease liabilities Finance Costs Components | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Interest expense on bank and other borrowings | 2,650 | 2,844 | | Interest expense on lease liabilities | 146 | – | | Finance costs recognized in profit or loss | 2,796 | 2,844 | - Finance costs remained relatively stable, with a slight decrease in bank borrowing interest offset by lease liability interest[34] 10. Loss Before Income Tax Expense Loss before income tax expense expanded to RMB 15,850 thousand in the first half of 2025, up from RMB 13,892 thousand in the prior period, primarily influenced by cost of inventories, depreciation, amortization, and expected credit loss allowance Loss Before Income Tax Expense Key Components | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Cost of inventories recognized | 167,583 | 88,241 | | Depreciation of property, plant and equipment | 3,464 | 2,749 | | Depreciation of right-of-use assets | 1,392 | – | | Allowance for expected credit losses on trade receivables | 2,536 | 2 | | Employee costs | 3,885 | 3,637 | - Allowance for expected credit losses on trade receivables significantly increased from RMB 2 thousand in 2024 to RMB 2,536 thousand in 2025[37] 11. Income Tax Expense (Credit) The Group recorded an income tax expense of RMB 626 thousand in the first half of 2025, compared to an income tax credit of RMB 2,672 thousand in the prior period, mainly due to a decrease in deferred tax credit Income Tax Expense (Credit) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Current income tax expense (credit) | — | – | | Deferred tax (credit) | 626 | (2,672) | | Income tax (credit) | 626 | (2,672) | - Guangyuan Tongchuang New Material Co., Ltd. is eligible for a reduced income tax rate of 10% under the Western Development Tax Incentive Policy[40] 12. Dividends The Board of Directors does not recommend the payment of an interim dividend for the six months ended June 30, 2025 - The Directors do not recommend the payment of an interim dividend for the six months ended June 30, 2025[41] 13. 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 0.12 cents, consistent with the prior period, as the increase in total loss was offset by a corresponding increase in the weighted average number of ordinary shares outstanding Loss Per Share Data | Indicator | 2025 (RMB cents) | 2024 (RMB cents) | | :--- | :--- | :--- | | Basic and diluted loss per share | (0.12) | (0.12) | - Loss attributable to owners of the Company increased from approximately RMB 11,257 thousand in 2024 to approximately RMB 15,023 thousand in 2025[42] - The weighted average number of ordinary shares outstanding increased from 92,000,000 shares in 2024 to 124,386,880 shares in 2025[42] 14. Property, Plant and Equipment In the first half of 2025, the Group's cost of acquiring property, plant and equipment items was approximately RMB 3,049 thousand, a significant decrease from RMB 18,800 thousand in the prior period Cost of Property, Plant and Equipment Acquisitions | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Cost of acquiring machinery and office equipment | 3,049 | 18,800 | 15. Trade and Other Receivables As of June 30, 2025, net trade receivables and prepayments, deposits, and other receivables all significantly decreased, with the aging structure of trade receivables showing a decline in the over 365-day portion but a notable increase in the 181-365 day portion Trade and Other Receivables Key Data | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Trade receivables (net) | 83,644 | 114,521 | -26.9% | | Prepayments, deposits and other receivables | 8,693 | 34,303 | -74.6% | | Total | 92,778 | 149,470 | -37.9% | Aging Analysis of Trade Receivables (Net) | Aging | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | 0 to 60 days | 21,543 | 14,491 | | 61 to 180 days | 3,661 | 22,661 | | 181 to 365 days | 84,329 | 3,166 | | Over 365 days | 30,390 | 129,516 | | Total | 139,923 | 169,834 | - Allowance for expected credit losses on trade receivables increased from RMB 55,313 thousand as of December 31, 2024, to RMB 56,286 thousand as of June 30, 2025[44] 16. Trade and Other Payables As of June 30, 2025, trade payables and accrued expenses and other payables both decreased, but the aging structure of trade payables showed an increase in the 61-180 day and over 365-day portions Trade and Other Payables Key Data | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Current trade payables | 83,018 | 97,285 | -14.7% | | Accrued expenses and other payables | 60,363 | 68,939 | -12.5% | Aging Analysis of Trade Payables | Aging | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | 0 to 60 days | 20,996 | 46,632 | | 61 to 180 days | 32,148 | 26,504 | | 181 to 365 days | 2,953 | 5,386 | | Over 365 days | 26,921 | 20,840 | | Total | 83,018 | 99,362 | - The credit period for purchases from suppliers generally ranges from 0 to 120 days[46] 17. Borrowings As of June 30, 2025, the Group's total borrowings slightly decreased to RMB 69,963 thousand, with most being current borrowings repayable within one year, and approximately RMB 6,900 thousand in borrowing defaults Total Borrowings and Liquidity | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Current borrowings | 53,150 | 49,708 | 6.9% | | Non-current borrowings | 16,813 | 22,820 | -26.3% | | Total borrowings | 69,963 | 72,528 | -3.4% | - Borrowings are secured by buildings, land use rights, plant and machinery, properties of directors and their close family members, properties of independent third parties, and inventories of a shareholder[49] - As of June 30, 2025, the Group was in default on principal borrowings of approximately RMB 6,900 thousand[49] 18. Share Capital As of June 30, 2025, the Company's issued and fully paid share capital increased to RMB 10,345 thousand, primarily due to the issuance of 45,775,245 new shares through a rights issue in 2025 Share Capital Movement | Item | Number of Shares | Amount (RMB thousand) | | :--- | :--- | :--- | | Issued and fully paid as at January 1, 2024 | 920,000,000 | 8,222 | | Share consolidation | (828,000,000) | — | | Shares issued upon subscription | 18,400,000 | 1,691 | | December 31, 2024 | 110,400,000 | 9,913 | | Shares issued upon rights issue | 45,775,245 | 432 | | June 30, 2025 | 156,175,245 | 10,345 | - A share consolidation was conducted on July 10, 2024, where every 10 shares were consolidated into 1 share[56] - On May 6, 2025, 45,775,245 ordinary shares were issued through a rights issue, raising net proceeds of approximately HKD 4.17 million[51][56][82] 19. Related Party Transactions This section discloses transactions between the Group and related parties, including key management personnel compensation and the pledging of properties by directors and their close family members as collateral for borrowings Key Management Personnel Compensation for the Period | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Salaries, allowances and other benefits | 268 | 398 | | Contributions to defined contribution retirement plans | 39 | 64 | | Total | 307 | 462 | - The Company's directors and their close family members, and key management personnel and their close family members, pledged properties as collateral for bank and other borrowings[55][56] Management Discussion and Analysis Management discusses the Group's business performance, future outlook, financial review, liquidity, and capital structure for the six months ended June 30, 2025, expressing confidence in long-term growth opportunities despite challenges - The Group is a regional manufacturer and supplier of wire and cable, also engaged in aluminum cast-rolling coil processing and aluminum foil manufacturing[58] - In the first half of 2025, the Group continued to manufacture and sell wire and cable, primarily serving power companies, manufacturing enterprises, construction and decoration companies, and trading companies[58] Business Review and Outlook The Group continued to focus on wire and cable manufacturing and sales in the first half of 2025, anticipating a challenging yet structurally growing industry environment for the second half and beyond, aiming to seize opportunities in infrastructure, renewable energy, 5G development, and the domestic market - The Group continued to engage in the manufacturing and sale of wire and cable, serving power companies, manufacturing enterprises, construction and decoration companies, and trading companies[58] - Looking ahead, the operating environment for Chinese wire and cable manufacturers remains difficult but also full of opportunities, with macroeconomic uncertainties and intensified competition putting pressure on profit margins[59] Future Prospects Looking ahead, the Group will seize opportunities from China's infrastructure and urbanization, renewable energy transition, 5G technology development, and domestic market expansion, while addressing challenges by optimizing operational efficiency and cost management - Management is confident in strengthening its competitive position and seizing long-term industry growth opportunities by focusing on product quality, innovation, and prudent financial management[64] 1. Infrastructure and Urbanization Initiatives China's continuous government investment in infrastructure, including power grid upgrades and urban transportation networks, is expected to drive stable demand for quality wire and cable, with the Group planning to leverage its existing production bases to capture regional development opportunities - The Chinese government's continuous investment in infrastructure development is expected to drive stable demand for high-quality wire and cable[60] - The Group plans to leverage its existing production base in Sichuan Province to seize opportunities arising from regional development initiatives and urbanization projects[60] 2. Transition to Renewable Energy China's ongoing promotion of renewable energy, such as solar and wind power, will stimulate demand for specialized cables and related products, and the Group will explore product innovation to meet these specific needs - China's continuous promotion of renewable energy development is expected to stimulate demand for specialized cables and related products[61] - The Group will continue to explore product innovation to meet the specific needs of renewable energy applications[61] 3. Technological Advancement and 5G Development The expansion of China's 5G network and digital infrastructure will continue to generate demand for advanced cable solutions, with the Group closely monitoring technological trends and investing resources to develop products meeting telecommunications industry standards - The development of China's 5G network and expansion of digital infrastructure will continue to generate demand for advanced cable solutions[62] - The Group will invest resources to develop products that meet the stringent performance standards of the telecommunications industry[62] 4. Domestic Market Opportunities As China increasingly focuses on expanding domestic demand, the wire and cable industry will benefit from a broader domestic market, and the Group will strengthen its local customer network and diversify its customer base - The Chinese wire and cable industry is expected to benefit from a broader domestic market[63] - The Group will strengthen its local customer network, diversify its customer base, and establish long-term partnerships with power companies, manufacturers, and infrastructure contractors[63] 5. Operational Efficiency and Cost Management Facing volatile raw material prices and high costs, the Group will maintain a rigorous approach to cost control, working capital management, and efficiency improvement, including optimizing production processes, outsourcing some products, exploring new businesses, and digitalizing internal operations - The Group will maintain a rigorous approach to cost control, working capital management, and efficiency improvement[64] - Measures include optimizing production processes, outsourcing certain products, researching and expanding into new business areas, tightening procurement specifications, and further digitalizing internal operations[64] Financial Review The financial review indicates that the Group's revenue significantly grew in the first half of 2025, but gross profit and gross margin notably decreased due to rising raw material costs and price competition, leading to an expanded loss for the period - Revenue for the first half of 2025 was approximately RMB 168.2 million, an increase of approximately 88.3% compared to 2024[65] - Gross profit was approximately RMB 0.7 million, a decrease of approximately 39.0% compared to the same period in 2024; gross margin decreased from 1.2% in 2024 to 0.4% in 2025[67] - Loss for the period attributable to owners of the Company was approximately RMB 15.0 million, an increase of approximately 33.4% compared to the same period in 2024[73] Revenue The Group's revenue significantly grew by 88.3% to RMB 168.2 million in the first half of 2025, primarily driven by increased market demand for aluminum wire and cable sales Revenue by Product Type | Product Type | 2025 (RMB thousand) | 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Copper wire and cable | 58 | – | N/A | | Aluminum wire and cable | 146,305 | 88,804 | 64.7% | | Aluminum rods | 19,856 | 523 | 3697.5% | | Polymer materials and others | 2,026 | – | N/A | | Total Revenue | 168,245 | 89,327 | 88.3% | - The increase in revenue was primarily due to increased market demand[65] Cost of Sales Cost of sales significantly increased by 90.0% year-on-year to RMB 167.6 million, consistent with revenue growth, primarily comprising raw material costs, aluminum product costs, and subcontractor finished product costs Cost of Sales Movement | Indicator | 2025 (RMB million) | 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Cost of sales | 167.6 | 88.2 | 90.0% | - The increase in cost of sales was consistent with the increase in revenue[66] Gross Profit and Gross Margin Gross profit decreased by 39.0% year-on-year to RMB 0.7 million in the first half of 2025, with gross margin falling from 1.2% to 0.4%, mainly due to significant increases in raw material and subcontracting costs, and industry price competition Gross Profit and Gross Margin Movement | Indicator | 2025 (RMB million) | 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Gross profit | 0.7 | 1.1 | -39.0% | | Gross margin | 0.4% | 1.2% | -0.8pp | - The decrease in gross profit and gross margin was mainly due to a significant increase in raw material and subcontracting costs, especially for aluminum products and semi-finished wires, which outpaced revenue growth[67] - Price competition pressure in China's wire and cable industry further compressed gross margin during the period[67] Other Income and Gains Other income and gains significantly decreased from approximately RMB 4.3 million in the first half of 2024 to approximately RMB 0.8 million in the first half of 2025, primarily due to reduced interest income and government subsidies Other Income and Gains Movement | Indicator | 2025 (RMB million) | 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Other income and gains | 0.8 | 4.3 | -81.4% | - The decrease was mainly due to the absence of significant interest income from receivables and reduced government subsidies received during the period[68] Selling and Distribution Expenses Selling and distribution expenses decreased by approximately 40.7% year-on-year to RMB 0.9 million, primarily due to controlled transportation and logistics costs and reduced staff expenses following streamlined sales activities Selling and Distribution Expenses Movement | Indicator | 2025 (RMB million) | 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Selling and distribution expenses | 0.9 | 1.5 | -40.0% | - The decrease was mainly due to enhanced control over transportation and logistics costs, and reduced staff expenses following streamlined sales activities[69] Administrative and Other Expenses Administrative and other expenses slightly decreased by 8.3% to RMB 13.7 million, primarily due to reduced professional fees and staff costs, partially offset by increased depreciation expenses from newly acquired machinery Administrative and Other Expenses Movement | Indicator | 2025 (RMB million) | 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Administrative and other expenses | 13.7 | 14.9 | -8.1% | - The decrease was mainly due to reduced professional fees and staff costs, partially offset by increased depreciation expenses arising from newly acquired machinery[70] Finance Costs Finance costs remained relatively stable at approximately RMB 2.8 million in the first half of 2025, with a slight decrease in bank borrowing interest offset by interest expense on lease liabilities Finance Costs Movement | Indicator | 2025 (RMB million) | 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Finance costs | 2.8 | 2.8 | 0.0% | - Interest on bank borrowings slightly decreased, but was offset by interest expense on lease liabilities recognized during the period[71] Income Tax Credit The Group recorded an income tax expense of approximately RMB 0.6 million in the first half of 2025, compared to an income tax credit of RMB 2.7 million in the prior period, primarily due to reduced recognition of deferred tax assets Income Tax Credit Movement | Indicator | 2025 (RMB million) | 2024 (RMB million) | | :--- | :--- | :--- | | Income tax (expense) credit | 0.6 (expense) | 2.7 (credit) | - The decrease was mainly due to reduced recognition of deferred tax assets related to tax losses carried forward in 2025[72] Loss for the Period Attributable to Owners of the Company Loss for the period attributable to owners of the Company expanded by 33.4% to approximately RMB 15.0 million in the first half of 2025, primarily due to a significant decrease in other income and gains, offsetting the impact of revenue growth Loss for the Period Attributable to Owners of the Company Movement | Indicator | 2025 (RMB million) | 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Loss for the period attributable to owners of the Company | 15.0 | 11.3 | 32.7% | - The increase in net loss was primarily due to a significant decrease in other income and gains[73] Liquidity, Financial Resources and Capital Structure The Group's liquidity relies on cash from operations, bank borrowings, and shareholder advances; as of June 30, 2025, cash and cash equivalents slightly increased, but total borrowings remain high, mostly short-term, and net loss led to a significant decline in total equity and deteriorated gearing ratio - The Group primarily funds its operations through cash generated from operations, bank and other borrowings, and advances from shareholders[74] Liquidity and Capital Structure Key Data | Indicator | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Cash and cash equivalents | 2.4 | 1.8 | 33.3% | | Total borrowings | 70.0 | 72.5 | -3.4% | | Borrowings repayable within one year or on demand | 53.2 | 49.7 | 7.0% | | Total equity | 0.7 | 12.5 | -94.4% | | Gearing ratio | Negative | 95.4% | N/A | - The Directors believe that the Group's current capital structure remains challenging, with a limited equity base and heavy reliance on borrowings[75] Pledge of the Group's Assets As of June 30, 2025, the Group pledged buildings, land use rights, and plant and machinery with a total net book value of approximately RMB 52,009 thousand to secure bank and other borrowings Net Book Value of Pledged Assets | Pledged Assets | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Buildings | 39,862 | 40,373 | | Land use rights | 5,805 | 5,901 | | Plant and machinery | 6,342 | 2,523 | | Total | 52,009 | 48,797 | Capital Commitments As of June 30, 2025, the Group had capital commitments for capital injection into subsidiaries of approximately RMB 10,810,000, consistent with December 31, 2024 Capital Commitments | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Capital commitments for capital injection into subsidiaries | 10,810 | 10,810 | Contingent Liabilities As of June 30, 2024, the Group had no significant contingent liabilities - The Group had no significant contingent liabilities as of June 30, 2024[78] Foreign Currency Risk The Group has no significant foreign currency risk as its business transactions and most assets and liabilities are primarily denominated in its functional currency, RMB, and no hedging instruments were used during the period - The Group has no significant foreign currency risk as most of its assets and liabilities are primarily denominated in its functional currency, RMB[79] - The Group did not have any hedging instruments to hedge other foreign currency transactions during the six months ended June 30, 2025[79] Employees and Remuneration Policy As of June 30, 2025, the Group's total number of employees increased to 127, with a corresponding increase in total employee benefit expenses, and remuneration policy is determined by market terms and individual performance Number of Employees and Employee Benefit Expenses | Indicator | June 30, 2025 | June 30, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Number of full-time employees | 127 | 119 | 6.7% | | Total employee benefit expenses (RMB million) | 4.7 | 4.4 | 6.8% | - Remuneration is determined with reference to market terms and individual employee's performance, qualifications, and experience[80] Significant Investments Held, Material Acquisitions or Disposals of Subsidiaries and Associates, and Plans for Material Investments or Capital Assets For the six months ended June 30, 2025, the Group held no significant investments, made no material acquisitions or disposals of subsidiaries and associates, and currently has no plans for material investments or capital assets - The Group held no significant investments during the six months ended June 30, 2025[81] - The Group had no material acquisitions or disposals of subsidiaries, associates, and joint ventures[81] - As of the date of this report, there were no plans for material investments or capital assets[81] Rights Issue and Use of Proceeds The Company completed a rights issue on May 6, 2025, issuing 45,775,245 ordinary shares and raising net proceeds of approximately HKD 4.17 million, primarily for debt repayment, investment in non-automotive industries, and general working capital - On May 6, 2025, the Company issued 45,775,245 ordinary shares through a rights issue[82] Use of Net Proceeds from Rights Issue | Intended Use | Intended Amount (HKD thousand) | Actual Use (HKD thousand) | Unutilized Balance (HKD thousand) | Expected Timeline for Use | | :--- | :--- | :--- | :--- | :--- | | Repayment of the Group's debts and borrowings | 1,250 | 1,250 | — | Not applicable | | Investment in non-automotive industries | 1,670 | 100 | 1,570 | June 30, 2026 | | Working capital | 1,250 | 1,250 | — | Not applicable | | Total | 4,170 | 2,600 | 1,570 | | - Net proceeds from the rights issue were approximately HKD 4.17 million[82] Other Information This chapter discloses information on dividend policy, securities dealings, corporate governance, directors' interests, major shareholders' interests, competing interests, share option scheme, and post-reporting period changes in directors and audit committee review - The Directors decided not to declare any interim dividend for the six months ended June 30, 2025[85] - The Company has complied with the provisions of the Corporate Governance Code from the six months ended June 30, 2025, up to the date of this report, except for the roles of Chairman and Chief Executive Officer being held by the same person[87] Interim Dividend The Board of Directors decided not to declare any interim dividend for the six months ended June 30, 2025 - The Directors decided not to declare any interim dividend for the six months ended June 30, 2025[85] 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[86] Compliance with Corporate Governance Code The Company has complied with the Corporate Governance Code provisions, except for the roles of Chairman and Chief Executive Officer being held by the same person (Mr. Dang Fei), which the Board believes is in the Company's best interest - The Company has complied with the provisions of the Corporate Governance Code from the six months ended June 30, 2025, up to the date of this report[87] - The roles of Chairman and Chief Executive Officer are held by the same person (Mr. Dang Fei), which deviates from Code Provision C.2.1, but the Board believes this arrangement maximizes the Group's interests[87] Code of Conduct for Securities Transactions by Directors The Company has adopted the required standard of dealings set out in the GEM Listing Rules as the code of conduct for directors' securities transactions, and all directors have confirmed full compliance - The Company has adopted the required standard of dealings set out in Rules 5.48 to 5.67 of the GEM Listing Rules as the code of conduct for directors' securities transactions[88] - All Directors have confirmed full compliance with the required standard of dealings set out in the Model Code[88] Directors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares and Debentures of the Company or its Associated Corporations As of June 30, 2025, Mr. Dang Fei, Mr. Wang Xiaozhong, and Ms. Luo Qian held long positions in the Company's shares through controlled corporations, with Mr. Dang Fei holding 33.74% of the shares Directors' and Chief Executive's Long Positions in Shares | Director/Chief Executive | Capacity/Nature of Interest | Number of Shares | Approximate Percentage | | :--- | :--- | :--- | :--- | | Mr. Dang Fei | Interest in controlled corporation | 52,692,000 | 33.74% | | Mr. Wang Xiaozhong | Interest in controlled corporation | 14,964,000 | 9.58% | | Ms. Luo Qian | Interest in controlled corporation | 1,168,500 | 0.75% | - Mr. Dang Fei holds shares through Red Fly Investment Limited, which is wholly owned by him[89] Substantial Shareholders' and Other Persons' Interests and Short Positions in Shares and Underlying Shares of the Company As of June 30, 2025, Red Fly Investment Limited and Xseven Investment Limited were the Company's substantial shareholders, holding 33.74% and 9.58% of the shares respectively, with Ms. Gao Hong deemed to hold Mr. Wang Xiaozhong's share interests due to spousal relationship Substantial Shareholders' and Other Persons' Long Positions in Shares | Shareholder Name/Name | Capacity/Nature of Interest | Number of Shares (Long Position) | Approximate Percentage of Interest | | :--- | :--- | :--- | :--- | | Red Fly Investment Limited | Beneficial owner | 52,692,000 | 33.74% | | Xseven Investment Limited | Beneficial owner | 14,694,000 | 9.58% | | Ms. Gao Hong | Interest of spouse | 14,694,000 | 9.58% | - Red Fly is wholly owned by Mr. Dang Fei, and Xseven Investment is wholly owned by Mr. Wang Xiaozhong[91] Competing Interests For the six months ended June 30, 2025, the Directors confirmed that neither the Company's controlling shareholders nor any Directors and their close associates held interests in any business that competes with the Group's business - The Directors confirmed that none of the Company's controlling shareholders or Directors and their respective close associates had any interests in any business that directly or indirectly competes with the Group's business[93] Share Option Scheme The Company adopted a share option scheme on June 10, 2020, with 8,000,000 shares authorized for grant as of the report date, but no share options have been granted, exercised, cancelled, or lapsed since the listing date - The Company conditionally adopted a share option scheme on June 10, 2020[94] - As of June 30, 2025, the number of share options authorized for grant under the share option scheme was 8,000,000 shares[94] - No share options have been granted, exercised, cancelled, or lapsed from the listing date up to the date of this report[94] Events After Reporting Period Subsequent to the reporting period, there were changes in directors, with Mr. Li Xia and Mr. Wang Yifan resigning as executive directors, and Ms. Zhou Wenqi and Mr. Zhang Weixian appointed as executive directors - Subsequent to the reporting period, Mr. Li Xia resigned as an executive director, and Ms. Zhou Wenqi and Mr. Zhang Weixian were appointed as executive directors[95] - Mr. Wang Yifan resigned as an executive director[96] Changes in Directors Subsequent to the reporting period, Mr. Li Xia and Mr. Wang Yifan resigned as executive directors, and Ms. Zhou Wenqi and Mr. Zhang Weixian were appointed as executive directors - On July 18, 2025, Mr. Li Xia resigned as an executive director, and Ms. Zhou Wenqi and Mr. Zhang Weixian were appointed as executive directors[95] - On August 6, 2025, Mr. Wang Yifan resigned as an executive director[96] Audit Committee and Interim Business Review The Audit Committee has reviewed the Group's unaudited condensed consolidated financial statements for the six months ended June 30, 2025, deeming them prepared in compliance with applicable accounting standards and GEM Listing Rules, with adequate disclosures - The Audit Committee comprises Mr. Ma Kaibing (Chairman), Dr. Zuo Xinzhang, and Mr. Li Jian, all independent non-executive directors[97] - The Audit Committee has reviewed the Group's unaudited condensed consolidated financial statements for the six months ended June 30, 2025[97] - The Audit Committee believes that these statements were prepared in compliance with applicable accounting standards and the GEM Listing Rules, and that adequate disclosures have been made[97]