海纳智能(01645) - 2025 - 中期业绩

Summary Interim Results Summary for the Six Months Ended June 30, 2025 The Group reported unaudited condensed consolidated results for the six months ended June 30, 2025, with revenue of approximately RMB 224.2 million, gross profit of approximately RMB 51.7 million, and a gross profit margin of approximately 23.1%, turning a loss into a profit attributable to owners of the Company of approximately RMB 8.8 million Major Financial Indicators for H1 2025 | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 224.2 | 182.4 | 22.9% growth | | Gross Profit | 51.7 | 30.5 | 69.5% growth | | Gross Profit Margin | 23.1% | 16.7% | increased by 6.4 percentage points | | Profit (Loss) Attributable to Owners of the Company | 8.8 | (11.6) | turned a loss into a profit | Unaudited Condensed Consolidated Financial Statements Unaudited Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income For the six months ended June 30, 2025, the Group's revenue increased to RMB 224.153 million, gross profit significantly rose to RMB 51.651 million, achieving a gross profit margin of 23.1%, with a profit before tax of RMB 7.913 million and profit attributable to owners of the Company of RMB 8.787 million, successfully reversing the loss from the prior year Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the six months ended June 30) | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Revenue | 224,153 | 182,391 | | Cost of sales | (172,502) | (151,858) | | Gross Profit | 51,651 | 30,533 | | Other income | 2,552 | 5,145 | | Selling and distribution costs | (10,584) | (7,708) | | Administrative and other operating expenses | (35,111) | (33,152) | | Finance costs | (1,404) | (725) | | Profit (loss) before tax | 7,913 | (13,438) | | Income tax expense | (636) | (117) | | Profit (loss) for the period | 7,277 | (13,555) | | Profit (loss) attributable to owners of the Company | 8,787 | (11,627) | | Basic earnings (loss) per share (RMB cents) | 1.56 | (2.06) | Unaudited Condensed Consolidated Statement of Financial Position As of June 30, 2025, the Group's non-current assets increased to RMB 474.907 million, current assets increased to RMB 449.560 million, with net current liabilities of RMB (198.588) million, and net assets increased to RMB 269.610 million, indicating robust financial growth Condensed Consolidated Statement of Financial Position (As of June 30) | Indicator | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Non-current assets | 474,907 | 448,180 | | Current assets | 449,560 | 423,679 | | Current liabilities | 648,148 | 598,508 | | Net current liabilities | (198,588) | (174,829) | | Net assets | 269,610 | 265,967 | | Equity attributable to owners of the Company | 270,679 | 266,426 | Notes to the Unaudited Condensed Consolidated Financial Statements General Information and Basis of Preparation The Company, incorporated in the Cayman Islands, primarily engages in investment holding, with the Group mainly involved in designing and manufacturing automated machinery for disposable hygiene products in China; the interim financial statements are prepared on a going concern basis under HKAS 34 and Listing Rules, despite net current liabilities, as directors anticipate sufficient working capital - The Company is incorporated in the Cayman Islands, with shares listed on the Main Board of the Stock Exchange of Hong Kong on June 3, 2020[8] - The Group is principally engaged in the design and manufacture of automated machinery for disposable hygiene products in China[8] - As of June 30, 2025, the Group recorded net current liabilities of approximately RMB 198,588,000, but the directors believe the Group will have sufficient working capital to prepare the financial statements on a going concern basis[12] Accounting Policies and Adoption of Standards The Group has adopted new/revised HKFRSs effective for the current interim period, which have no material impact on the financial position or performance for current and prior periods, and directors anticipate no significant impact from future adoptions - The Group has adopted the amendments to HKAS 21, "Lack of Exchangeability"[14] - The adoption of new/revised HKFRSs has no material impact on the Group's financial position and performance for the current and prior periods[14] Segment Information The Group's management considers the entire business as a single operating segment: designing and manufacturing automated machinery for disposable hygiene products, with revenue primarily from China but significant growth in South Asia and South America, and non-current assets mainly located in mainland China - The Group has only one operating and reportable segment: the design and manufacture of automated machinery for disposable hygiene products[15] Geographical Information of Revenue from External Customers Geographical Information of Revenue from External Customers (For the six months ended June 30) | Region | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | China | 97,751 | 109,823 | | Southeast Asia | 47,153 | 54,345 | | South Asia | 40,526 | 33 | | South America | 22,073 | 7,509 | | Central Asia | 6,576 | 10,649 | | East Africa | 5,879 | – | | West Asia | 3,755 | – | | Others | 440 | 32 | | Total | 224,153 | 182,391 | - Revenue from the South Asia region significantly increased from RMB 33 thousand in 2024 to RMB 40,526 thousand in 2025[17] - Revenue from South America increased from RMB 7,509 thousand in 2024 to RMB 22,073 thousand in 2025[17] Geographical Information of Non-current Assets Geographical Information of Non-current Assets (As of June 30) | Region | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Mainland China | 472,667 | 445,835 | | Hong Kong | 66 | 171 | | Total | 472,733 | 446,006 | Major Customer Information Revenue from Major Customers (For the six months ended June 30) | Customer | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Customer A | 23,725 | – | - In H1 2025, Customer A contributed RMB 23,725 thousand in revenue, accounting for over 10% of total revenue, with no such customer in the prior year[20] Revenue The Group's revenue primarily derives from machinery sales and parts sales, with significant growth in baby diaper and adult diaper machine sales offsetting declines in feminine hygiene napkin and wet wipe machine sales Revenue by Product Type (For the six months ended June 30) | Product Type | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Baby diapers | 115,800 | 78,121 | | Adult diapers | 81,897 | 61,031 | | Feminine hygiene napkins | 9,401 | 20,605 | | Wet wipes | – | 3,468 | | Parts and components sales | 17,055 | 19,166 | | Total | 224,153 | 182,391 | - Sales of baby diaper machines increased by 48.2% year-on-year, and adult diaper machine sales increased by 34.2% year-on-year[22] - Sales of feminine hygiene napkin machines decreased by 54.4% year-on-year, and wet wipe machine sales decreased by 100% year-on-year[22] Other Income Other income for the period was approximately RMB 2.552 million, a decrease of approximately 49.0% from RMB 5.145 million in the prior year, mainly due to reduced bond interest income and exchange gains Details of Other Income (For the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Bank interest income | 184 | 340 | | Interest income from debt instruments measured at amortized cost | – | 1,341 | | Net exchange gain | – | 1,350 | | Government grants | 544 | 380 | | Additional input VAT deduction | 268 | – | | Scrap sales | 731 | 607 | | Others | 825 | 1,127 | | Total | 2,552 | 5,145 | - An additional input VAT deduction of RMB 268 thousand was recognized in 2025, benefiting from tax incentives for advanced manufacturing enterprises[23][24] Profit (Loss) Before Tax Profit before tax for the period was RMB 7.913 million, compared to a loss of RMB 13.438 million in the prior year, with increases in finance costs, staff costs, and research and development expenses Finance Costs Details of Finance Costs (For the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Interest on bank borrowings | 4,366 | 2,334 | | Finance charges on lease liabilities | 181 | 373 | | Less: Interest on bank borrowings capitalized to construction in progress | (3,143) | (1,982) | | Total | 1,404 | 725 | - Finance costs increased by approximately 100% year-on-year, primarily due to increased interest on bank borrowings[23] Staff Costs Details of Staff Costs (For the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Salaries, allowances, discretionary bonuses and other benefits in kind | 30,680 | 26,901 | | Equity-settled share-based payment expenses | 121 | 280 | | Contributions to defined contribution plans | 5,323 | 3,812 | | Total | 36,124 | 30,993 | - Staff costs increased by approximately 16.5% year-on-year, mainly due to increases in salaries, allowances, and contributions to defined contribution plans[25] Other Items Details of Other Items (For the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Cost of inventories | 172,502 | 151,858 | | Amortization of intangible assets | 2,095 | 2,703 | | Depreciation of property, plant and equipment (net of capitalization) | 6,376 | 7,550 | | Net exchange loss (gain) | 573 | (1,350) | | Research and development expenses | 15,108 | 13,920 | - Research and development expenses increased by approximately 8.5% year-on-year, indicating the company's continued investment in technological innovation[25] - Net exchange differences shifted from a gain in the prior year to a loss in the current period[25] Income Tax Expense Income tax expense for the period was approximately RMB 0.636 million, a significant increase from RMB 0.117 million in the prior year, primarily due to increased taxable profits of the Group's operating subsidiaries in China, with some Chinese entities enjoying preferential tax rates for high-tech enterprises Details of Income Tax Expense (For the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | PRC enterprise income tax | 352 | 117 | | Hong Kong profits tax | 284 | – | | Total | 636 | 117 | - Jinjiang Haina, Hangzhou Haina, and Jinjiang Haijia are recognized as high-tech enterprises, enjoying a preferential tax rate of 15%[27] - Hong Kong profits tax of RMB 284 thousand was incurred in the current period, with none in the prior year[26][29] Dividends The Board of Directors has resolved not to declare an interim dividend for the period, consistent with the prior year - The Board of Directors has resolved not to declare an interim dividend for the period[30] Earnings (Loss) Per Share Basic earnings per share for the period was RMB 1.56 cents, compared to a loss of RMB 2.06 cents per share in the prior year, reflecting an improvement in the company's profitability, with diluted earnings per share being the same as basic earnings per share Calculation of Earnings (Loss) Per Share (For the six months ended June 30) | Indicator | 2025 (Unaudited) | 2024 (Unaudited) | | :--- | :--- | :--- | | Profit (loss) attributable to owners of the Company for the purpose of calculating basic earnings (loss) per share (RMB thousand) | 8,787 | (11,627) | | Weighted average number of ordinary shares for the purpose of calculating basic earnings (loss) per share (thousand shares) | 563,976 | 563,976 | | Basic earnings (loss) per share (RMB cents) | 1.56 | (2.06) | - Diluted earnings (loss) per share is the same as basic earnings (loss) per share, as the exercise of share options would not result in a decrease in basic earnings per share[31] Property, Plant and Equipment Purchases of property, plant and equipment (excluding right-of-use assets) for the period amounted to approximately RMB 34.322 million, while in the prior year, an impairment loss of approximately RMB 1.705 million was recognized for the Hangzhou production facility due to intense market competition - Purchases of property, plant and equipment for the period amounted to approximately RMB 34,322,000[32] - Right-of-use assets of approximately RMB 1,578,000 were recognized during the period[32] - In the prior period, an impairment loss of approximately RMB 1,705,000 was recognized for property, plant and equipment of the Hangzhou production facility[33] Trade and Other Receivables As of June 30, 2025, total trade and other receivables increased to RMB 159.434 million from RMB 123.965 million as of December 31, 2024, driven by significant growth in trade receivables and a reduction in expected credit loss provisions Trade and Other Receivables (As of June 30) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Trade receivables (net of provision) | 87,826 | 55,613 | | Bills receivable | 336 | 529 | | Other receivables (net of provision) | 71,272 | 67,823 | | Total | 159,434 | 123,965 | Trade Receivables - Trade receivables (net of provision for expected credit losses) increased from RMB 55,613 thousand as of December 31, 2024, to RMB 87,826 thousand as of June 30, 2025[34] - Customer retention money increased from RMB 9,050,000 as of December 31, 2024, to RMB 12,700,000 as of June 30, 2025[35] Ageing Analysis of Trade Receivables (by revenue recognition date, net of provision) | Ageing | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within 30 days | 39,565 | 3,278 | | 31 to 60 days | 6,653 | 6,054 | | 61 to 90 days | 1,997 | 4,665 | | 91 to 180 days | 14,917 | 11,273 | | 181 to 365 days | 12,995 | 19,544 | | Over 365 days | 12,035 | 11,328 | | Total | 88,162 | 56,142 | Bills Receivable - As of June 30, 2025, bills receivable were interest-free, guaranteed by Chinese banks, and due within one year[37] Consideration Receivable - Consideration receivable represents the final installment payment for the disposal of unlisted equity instruments, with a carrying amount of approximately RMB 2,280,000 as of June 30, 2025[38] Debt Instruments Measured at Amortized Cost The Group's debt instruments measured at amortized cost were fully provided for expected credit losses as of June 30, 2025, resulting in a zero carrying amount, and the Company has issued legal letters to the issuer and guarantor demanding repayment of outstanding bonds Debt Instruments Measured at Amortized Cost (As of June 30) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Unlisted debt instruments, unsecured | 31,912 | 32,810 | | Less: Provision for expected credit losses | (31,912) | (31,939) | | Net amount | – | 871 | - As of June 30, 2025, the outstanding bond balance was HKD 35,000,000 (approximately RMB 31,912,000)[41] - The Company issued a statutory demand on August 1, 2025, requiring the issuer to repay the outstanding principal and accrued interest[42] Trade and Other Payables As of June 30, 2025, total trade and other payables increased to RMB 335.127 million from RMB 314.015 million as of December 31, 2024, primarily due to a significant increase in contract liabilities (advances from customers) Trade and Other Payables (As of June 30) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Trade payables | 84,416 | 87,953 | | Bills payable | 49,430 | 37,700 | | Contract liabilities – advances from customers | 129,057 | 95,081 | | Payables for construction in progress | 39,151 | 58,453 | | Accruals and other payables | 25,241 | 23,769 | | Total | 335,127 | 314,015 | Trade Payables - Trade payables are interest-free, and the Group is generally granted a credit period of up to 180 days[44] Ageing Analysis of Trade Payables (by date of receipt of goods) | Ageing | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within 30 days | 56,680 | 54,441 | | 31 to 60 days | 7,394 | 10,132 | | 61 to 90 days | 6,086 | 9,865 | | 91 to 180 days | 7,670 | 8,312 | | 181 to 365 days | 2,748 | 2,404 | | Over 365 days | 3,838 | 2,799 | | Total | 84,416 | 87,953 | Accruals and Other Payables - Accruals and other payables include approximately RMB 2,915,000 for payables related to the development of the "5G+ Smart Equipment Operation and Maintenance Service Platform"[46] Interest-bearing Borrowings As of June 30, 2025, the Group's total interest-bearing borrowings increased to RMB 308.737 million from RMB 281.037 million as of December 31, 2024, with most being secured bank loans and variable-rate borrowings Details of Interest-bearing Borrowings (As of June 30) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Bank loans – unsecured | 6,000 | 6,000 | | Bank loans – secured | 302,737 | 275,037 | | Total | 308,737 | 281,037 | Interest-bearing Borrowings by Interest Rate Type (As of June 30) | Interest Rate Type | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Fixed-rate borrowings | 41,850 | 45,783 | | Variable-rate borrowings | 266,887 | 235,254 | | Total | 308,737 | 281,037 | - Secured bank deposits are jointly guaranteed by land use rights, buildings, construction in progress, restricted bank deposits, and personal guarantees from controlling shareholders[49][52] Share Capital As of June 30, 2025, the Company's authorized share capital was 2,000,000,000 shares, with 563,976,000 issued and fully paid shares at a par value of HKD 0.01 per share, equivalent to RMB 5.088 million, consistent with December 31, 2024 Share Capital Information (As of June 30) | Item | Number of Shares | HKD | Equivalent RMB thousand | | :--- | :--- | :--- | :--- | | Authorized share capital | 2,000,000,000 | 20,000,000 | 10,695 | | Issued and fully paid share capital | 563,976,000 | 5,639,760 | 5,088 | Share-based Payments Equity-settled share-based payment expenses recognized for the period were approximately RMB 121,000, a decrease from RMB 280,000 in the prior year, with 14,000,000 unexercised share options and no exercised share options during the period - As of June 30, 2025, the number of unexercised share options was 14,000,000[53] - Equity-settled share-based payment expenses of approximately RMB 121,000 were recognized during the period (2024: approximately RMB 280,000)[53] Events After the Reporting Period Subsequent to the reporting period, Jinjiang Haina faces a civil lawsuit where the plaintiff claims contract payments and damages of approximately RMB 4.183 million for the "5G+ Smart Equipment Operation and Maintenance Service Platform" development, but the Board believes no further provision is currently required - Jinjiang Haina was sued by a service provider, claiming unpaid contract payments of approximately RMB 3,218,000 and damages of approximately RMB 965,000[54] - As of the announcement date, the claim is in its early stages of legal proceedings, and the directors believe no further provision is required[54] Business Review Company Overview and Market Environment Haina Intelligent is a seasoned manufacturer of automated machinery for disposable hygiene products in China, achieving steady growth through technological innovation and market expansion, despite a complex domestic and international economic environment, benefiting from China's moderate economic recovery and policy-driven initiatives, and currently operates three production bases in Jinjiang, Hangzhou, and Foshan - The Company is a seasoned manufacturer in China specializing in the design and production of automated machinery for disposable hygiene products, including baby diapers, adult diapers, feminine hygiene napkins, and wet wipes[55] - The Group operates three production bases in China: Jinjiang, Hangzhou, and Foshan, with a total gross floor area of approximately 130,000 square meters[56] Operational Highlights and Technological Innovation Revenue for the period grew by 22.9% to RMB 224.2 million, achieving a net profit of RMB 7.3 million, as the Group increased investment in overseas markets, expanding its sales network to over 14 countries, and successfully developed new-generation high-speed intelligent diaper production lines and full-servo pad production lines, significantly enhancing production efficiency and reducing energy consumption - The Group recorded total revenue of approximately RMB 224.2 million for the period, an increase of approximately 22.9% compared to the prior period[57] - The Group's unaudited net profit after tax for the period was approximately RMB 7.3 million, an increase of RMB 20.8 million compared to the prior period[57] - The Group has increased investment and strategic deployment in overseas markets, with its sales network now extending to over 14 overseas countries[57] - Successfully developed a new generation of high-speed intelligent diaper production lines, increasing production speed by nearly 30% and expecting to reduce unit product energy consumption by nearly 30%[58] - Full-servo pad production line capacity significantly increased by nearly 150%, with expected unit product energy consumption reduction of nearly 60%[58] Sustainable Development The Group prioritizes sustainable development as a core strategy, launching energy-efficient intelligent equipment to reduce customer carbon emissions and actively promoting green factory construction to deepen its digital green transformation - The Group launched energy-efficient intelligent equipment to meet customer demand for reducing carbon emissions during production[58] - The Group actively promotes green factory construction and deepens its digital green transformation process[58] Outlook and Development Strategies Looking ahead to the second half of the year, the disposable hygiene products industry shows promising prospects, and the Group will focus on enhancing R&D efficiency, expanding production capacity, providing integrated solutions, and deeply advancing its global "platformization" strategy to navigate global economic uncertainties and consolidate its market-leading position - The disposable hygiene products industry is expected to continue growing, especially in emerging markets[59] - The Group will strengthen risk management, optimize supply chain layout, and enhance operational efficiency[64] Enhancing R&D Efficiency - The main structure of the R&D center has been progressively topped out and is expected to be completed in H2 2025, which will enhance the efficiency of new product development[60] - R&D expenses (including capitalized expenses) of approximately RMB 15.1 million were incurred during the period[60] Expanding Production Capacity and Integrated Solutions - The new digital factory has been partially delivered and is in the final stages for other areas; once fully operational, it will meet surging customer demand and provide integrated solutions[61] - The Group will annually increase the self-sufficiency rate of core components, optimize its industrial chain layout, and build a specialized, refined, distinctive, and innovative "little giant" enterprise[62] Global "Platformization" Strategy - Emerging markets (Asia, Africa, South America) will serve as business growth engines, with increased investment to provide competitive products[63] - The Group will launch high-end intelligent equipment and enhance brand exposure through media advertising and exhibitions[63] Financial Review Revenue Analysis The Group's revenue increased by 22.9% from RMB 182.4 million in the prior year to RMB 224.2 million in the current period, primarily driven by increased sales of baby diaper and adult diaper machines, partially offset by reduced sales of feminine hygiene napkin machines, wet wipe machines, and parts and components Revenue by Product Type (For the six months ended June 30) | Product Type | 2025 Units | 2025 (RMB thousand) | 2025 % of Total | 2024 Units | 2024 (RMB thousand) | 2024 % of Total | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Baby Diaper Machines | 15 | 115,800 | 52% | 11 | 78,121 | 43% | | Adult Diaper Machines | 6 | 81,897 | 37% | 9 | 61,031 | 33% | | Feminine Hygiene Napkin Machines | 2 | 9,401 | 4% | 5 | 20,605 | 11% | | Wet Wipe Machines | – | – | – | 4 | 3,468 | 2% | | Parts and Components | N/A | 17,055 | 7% | N/A | 19,166 | 11% | | Total | 23 | 224,153 | 100% | 29 | 182,391 | 100% | - A total of 23 machines were sold in the current period, compared to 29 machines in the prior year[65] - As of June 30, 2025, the total value of signed sales contracts was approximately RMB 428.0 million, expected to be delivered in 2025 and 2026[66] Gross Profit and Gross Profit Margin The Group's gross profit increased from RMB 30.5 million in the prior year to RMB 51.7 million in the current period, with the gross profit margin rising from 16.7% to 23.1%, primarily due to higher selling prices from upgraded technical configurations and lower prices of major raw materials and components - Gross profit increased by approximately RMB 21.2 million, and the gross profit margin increased by approximately 6.4 percentage points[67] - The increase in gross profit and gross profit margin was mainly due to higher selling prices of machines sold resulting from upgraded technical configurations and lower prices of major raw materials and components[67] Other Income Analysis Other income for the period was approximately RMB 2.6 million, a decrease of approximately 49.0% from RMB 5.1 million in the prior year, mainly due to reduced bond interest income and exchange differences - Other income decreased by approximately RMB 2.5 million, primarily due to a decrease in bond interest income and exchange differences during the period[68] Selling and Distribution Costs Selling and distribution costs increased by 37.7% from RMB 7.7 million in the prior year to RMB 10.6 million in the current period, mainly due to increased expenses for advertising, professional consulting services, marketing personnel travel, and after-sales service fees - Selling and distribution costs increased by approximately RMB 2.9 million, primarily due to increased expenses for advertising and professional consulting services, travel expenses for marketing personnel, and after-sales service fees[69] Administrative and Other Operating Expenses Administrative and other operating expenses increased by 5.7% from RMB 33.2 million in the prior year to RMB 35.1 million in the current period, mainly due to increased research and development expenses, salaries, and welfare benefits - Administrative and other operating expenses increased by approximately RMB 1.9 million, primarily due to increased research and development expenses, salaries, and welfare benefits during the period[70] Finance Costs Finance costs for the period were approximately RMB 1.4 million, an increase of approximately 100.0% from RMB 0.7 million in the prior year, mainly due to increased interest on bank borrowings - Finance costs increased by approximately 100.0%, primarily due to increased interest on bank borrowings[71] Income Tax Expense Income tax expense for the period was approximately RMB 0.6 million, a significant increase of approximately 500.0% from RMB 0.1 million in the prior year, mainly due to increased taxable profits of the Group's operating subsidiaries in China - Income tax expense increased by approximately 500.0%, primarily due to increased taxable profits of the Group's operating subsidiaries in China during the period[72] Profit Attributable to Owners of the Company Profit attributable to owners of the Company for the period was approximately RMB 8.8 million, successfully reversing a loss of approximately RMB 11.6 million in the prior year, primarily due to increased gross profit - Profit attributable to owners of the Company was approximately RMB 8.8 million (2024: loss of approximately RMB 11.6 million)[73] - The increase in profit was primarily due to increased gross profit[73] Interim Dividends The Board of Directors has resolved not to declare an interim dividend for the period - The Board of Directors has resolved not to declare an interim dividend for the period[74] Liquidity and Financial Resources The Group's working capital primarily comes from internal resources and interest-bearing borrowings, with the current ratio remaining stable at approximately 0.7 times as of June 30, 2025, and the Group regularly monitors liquidity needs to ensure sufficient cash reserves - The Group's current ratio was approximately 0.7 times as of June 30, 2025 (December 31, 2024: approximately 0.7 times)[75] - As of the announcement date, approximately RMB 35.6 million of outstanding trade receivables as of June 30, 2025, have been subsequently settled[75] Capital Structure and Borrowings As of June 30, 2025, the Group's capital structure included equity of approximately RMB 269.6 million and bank borrowings of approximately RMB 308.7 million, with bank borrowings increasing from the end of the prior year - The Group's capital structure comprises equity of approximately RMB 269.6 million (December 31, 2024: approximately RMB 266.0 million) and bank borrowings of approximately RMB 308.7 million (December 31, 2024: approximately RMB 281.0 million)[77][78] Gearing Ratio The Group's gearing ratio (total interest-bearing liabilities divided by total equity) was approximately 117.7% as of June 30, 2025, an increase from 109.0% as of December 31, 2024 - The Group's gearing ratio was approximately 117.7% as of June 30, 2025 (December 31, 2024: approximately 109.0%)[80] Capital Commitments As of June 30, 2025, the Group's total capital expenditure commitments amounted to RMB 65.857 million, primarily for construction in progress and development of intangible assets, with the "5G+ Smart Equipment Operation and Maintenance Service Platform" development project having been suspended in 2024 Capital Commitments (As of June 30) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Contracted but not provided for – construction in progress | 38,178 | 61,261 | | Contracted but not provided for – development of intangible assets | 27,679 | 27,679 | | Total | 65,857 | 88,940 | - The development project for the "5G+ Smart Equipment Operation and Maintenance Service Platform" was suspended in 2024 as the platform's application did not meet expectations[81] Contingent Liabilities Except for the litigation matters disclosed in Note 18 to the financial statements, the Group had no other significant contingent liabilities as of June 30, 2025 - Save as disclosed in Note 18, the Group had no other significant contingent liabilities as of June 30, 2025[82] Foreign Exchange Risk Management The Group's monetary assets, liabilities, and transactions are primarily denominated in RMB, HKD, and USD, and while no difficulties arose from exchange rate fluctuations during the period and no foreign exchange derivative contracts were entered into for hedging, the Group will regularly review and consider using financial instruments as appropriate - The Group's monetary assets, liabilities, and transactions are primarily denominated in RMB, HKD, and USD[83] - The Group did not enter into any foreign exchange derivative contracts to manage currency translation risk during the period[83] Human Resources As of June 30, 2025, the Group employed approximately 563 employees, with staff costs of approximately RMB 36.1 million, and remuneration is determined based on performance, experience, and market conditions, with discretionary bonuses provided - As of June 30, 2025, the Group employed a total of approximately 563 employees in Hong Kong and China (June 30, 2024: approximately 529 employees)[84] - Staff costs (including directors' emoluments) for the period were approximately RMB 36.1 million (2024: approximately RMB 31.0 million)[84] Pledge of the Group's Assets Except for the interest-bearing borrowings pledged as disclosed in Note 15 to the financial statements, the Group had no other assets pledged as of June 30, 2025 - Save as disclosed in Note 15 regarding interest-bearing borrowings, the Group had no other assets pledged as of June 30, 2025[85] Material Investments, Acquisitions and Disposals The Group did not undertake any material investments, acquisitions, or disposals during the period - The Group did not undertake any material investments, material acquisitions, or disposals during the period[86] Other Information Future Plans for Material Investments and Capital Assets The Group plans to establish an R&D center to enhance research efficiency and construct a new digital factory to expand production capacity, improve manufacturing flexibility, and provide integrated solutions, aiming to optimize production line layout, elevate intelligent manufacturing standards, and strengthen global competitive advantages - The R&D center is expected to be completed in H2 2025, which will help monitor product development more effectively and shorten the R&D cycle for customized products[87] - The new digital factory has been partially delivered and, once fully operational, will primarily engage in the design and production of automated machinery for disposable hygiene products, meeting customer demand and supporting expansion plans[88] - The Group will accelerate technological iteration and process upgrades, annually increasing the self-sufficiency rate of core components to replace external procurement models[88] Events After the Reporting Period Except for the litigation matters disclosed in Note 18 to the financial statements, no other significant events affecting the Group occurred after the reporting period and up to the announcement date - Save as disclosed in Note 18 to the unaudited condensed consolidated financial statements, no other significant events affecting the Group occurred after the period and up to the date of this announcement[90] Corporate Governance The Group is committed to maintaining high standards of corporate governance, having adopted the code provisions of Appendices C1 and C3 of the Listing Rules, and the Board believes the arrangement of the Chairman and Chief Executive Officer being the same person contributes to efficient strategic planning, with the Audit Committee having reviewed the interim financial information Compliance with Corporate Governance Code - The Company has adopted the applicable code provisions of the Corporate Governance Code set out in Appendix C1 Part 2 of the Listing Rules[91] - The Chairman and Chief Executive Officer are held by Mr. Hong Yiyuan, and the Board believes this arrangement ensures consistent internal leadership and enhances the efficiency of strategic planning[91] Compliance with Model Code - The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers set out in Appendix C3 of the Listing Rules, and all directors have confirmed full compliance[92] Audit Committee - The Audit Committee comprises three independent non-executive directors and one non-executive director, with Ms. Chan Man Yee as the chairwoman[93] - The Audit Committee has reviewed the Group's unaudited condensed consolidated financial information for the period and believes it has been prepared in accordance with applicable accounting standards and Listing Rules requirements[94] Purchase, Sale or Redemption of Shares Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the period, and the Company held no treasury shares as of June 30, 2025 - Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the period[95] - As of June 30, 2025, the Company held no treasury shares[95] Publication of Interim Results Announcement and Interim Report This announcement has been published on the Company's website and the Stock Exchange's website, and the interim report will be dispatched to shareholders and published on the relevant websites in due course - This announcement is published on the Company's website (http://www.haina-intelligent.com) and the Stock Exchange's website (https://www.hkexnews.hk)[96](index=96&type=chunk) Acknowledgement The Board of Directors extends its sincere gratitude to the Group's management and all employees for their efforts and contributions, as well as to shareholders, business partners, and other professionals for their support - The Board of Directors extends its sincere gratitude to the Group's management and all employees, shareholders, business partners, and other professionals[97] Board Composition As of the announcement date, the Company's Board of Directors comprises four executive directors, one non-executive director, and three independent non-executive directors, with Mr. Hong Yiyuan serving as Chairman, Chief Executive Officer, and Executive Director - The Company has four executive directors (Mr. Hong Yiyuan, Mr. Zhang Zhixiong, Mr. Su Chengya, Mr. He Ziping), one non-executive director (Mr. Zheng Zhixiong), and three independent non-executive directors (Mr. Chan Ming Kit, Dr. Xia Anjun, Ms. Chan Man Yee)[99] - Mr. Hong Yiyuan serves as the Chairman, Chief Executive Officer, and Executive Director[98][99]