长安仁恒(08139) - 2025 - 中期业绩

Company Information and Report Overview Company Basic Information Zhejiang Chang'an Renheng Technology Co., Ltd. (stock code: 8139) is a company incorporated in the People's Republic of China, primarily engaged in the development, production, and sale of bentonite fine chemicals - Company Name: Zhejiang Chang'an Renheng Technology Co., Ltd., Stock Code: 8139[1] - Main Business: Development, production, and sale of bentonite fine chemicals, including paper chemicals, bentonite for metallurgical pellets, and high-quality calcium-based clay[10] - Established on December 4, 2000, and restructured into a joint-stock company on December 31, 2008[10][11] GEM Characteristics and Directors' Responsibility Statement The report highlights that the GEM market offers listing opportunities for small and medium-sized companies, but with higher investment risks and market volatility, and directors are jointly and individually responsible for the accuracy, completeness, and non-misleading nature of the announcement's information - GEM Market Positioning: Provides a listing market for small and medium-sized companies, with higher investment risks and potentially greater market volatility[2] - Directors' Responsibility: Directors confirm the announcement's information is accurate, complete, not misleading or fraudulent, and without omissions[3] Performance Highlights For the six months ended June 30, 2025, the company's revenue increased by 7.6% year-on-year, but gross profit decreased by 1.8%, with gross margin falling to 37.2%, resulting in a loss of approximately RMB 3.005 million and basic loss per share of RMB 0.078, with no interim dividend declared 2025 H1 Performance Highlights | Indicator | 2025 H1 (RMB) | 2024 H1 (RMB) | Year-on-year change | | :--- | :--- | :--- | :--- | | Revenue | 98,023,000 | 91,123,000 | Increase 7.6% | | Gross profit | 36,507,000 | 37,184,000 | Decrease 1.8% | | Gross margin | 37.2% | 40.8% | Decrease 3.6 percentage points | | Loss / Profit attributable to equity holders of the Company for the period | (3,005,000) | 2,805,000 | Shift from profit to loss | | Basic Loss / Earnings per share | (0.078) | 0.073 | Shift from profit to loss | | Interim Dividend | Zero | Zero | No declaration | Unaudited Condensed Consolidated Financial Statements Consolidated Statement of Comprehensive Loss / Income For the six months ended June 30, 2025, revenue increased to RMB 98.0227 million, but increased cost of sales, distribution costs, and administrative expenses led to a decrease in gross profit, resulting in a loss of RMB 3.0052 million for the period Key Data from Consolidated Statement of Comprehensive Loss / Income | Indicator | 2025 H1 (RMB) | 2024 H1 (RMB) | | :--- | :--- | :--- | | Revenue | 98,022,700 | 91,123,166 | | Cost of sales | (61,515,653) | (53,939,153) | | Gross profit | 36,507,047 | 37,184,013 | | Distribution costs | (17,011,145) | (12,938,361) | | Administrative expenses | (12,653,893) | (11,048,469) | | Research and development expenses | (6,264,694) | (8,068,052) | | Operating profit | 1,177,720 | 6,177,628 | | Finance costs – net | (3,871,417) | (3,140,291) | | Loss / Profit before income tax | (2,693,697) | 3,037,337 | | Income tax expense | (311,549) | (232,794) | | Loss / Profit attributable to equity holders of the Company for the period | (3,005,246) | 2,804,543 | | Basic Loss / Earnings per share | (0.078) | 0.073 | Consolidated Statement of Financial Position As of June 30, 2025, total assets slightly increased, non-current assets remained stable, and current assets, including inventories, trade and other receivables, and cash and cash equivalents, all grew, while total equity slightly decreased and total liabilities increased, mainly due to a significant rise in current borrowings Key Data from Consolidated Statement of Financial Position | Indicator | 2025-06-30 (RMB) | 2024-12-31 (RMB) | | :--- | :--- | :--- | | Total assets | 345,336,078 | 337,982,310 | | Non-current assets | 149,071,870 | 146,955,912 | | Current assets | 196,264,208 | 191,026,398 | | Total equity | 115,682,426 | 118,694,270 | | Total liabilities | 229,653,652 | 219,288,040 | | Non-current liabilities | 14,520,565 | 21,274,123 | | Current liabilities | 215,133,087 | 198,013,917 | - Current borrowings increased from RMB 158.19 million at the end of 2024 to RMB 176.24 million at the end of June 2025, primarily contributing to the increase in current liabilities[7] Consolidated Statement of Changes in Equity For the six months ended June 30, 2025, total equity decreased from RMB 118.694 million at the beginning of the period to RMB 115.682 million, mainly due to a loss of RMB 3.0052 million and other comprehensive loss of RMB 6,598 during the period Key Data from Consolidated Statement of Changes in Equity | Indicator | 2025-01-01 (RMB) | 2025-06-30 (RMB) | | :--- | :--- | :--- | | Share capital | 38,400,000 | 38,400,000 | | Other reserves | 50,342,050 | 50,335,452 | | Retained earnings | 29,952,220 | 26,946,974 | | Total equity | 118,694,270 | 115,682,426 | - A loss of RMB 3.005 million and other comprehensive loss of RMB 6,598 for the period led to a decrease in total equity[8] Consolidated Statement of Cash Flows For the six months ended June 30, 2025, net cash flow from operating activities turned from a net inflow to a net outflow of RMB 0.3407 million, net cash outflow from investing activities slightly decreased, while net cash inflow from financing activities significantly increased, with cash and cash equivalents at period-end rising to RMB 19.8624 million Key Data from Consolidated Statement of Cash Flows | Indicator | 2025 H1 (RMB) | 2024 H1 (RMB) | | :--- | :--- | :--- | | Net cash (used in) / generated from operating activities | (340,739) | 11,427,084 | | Net cash used in investing activities | (3,764,645) | (3,998,033) | | Net cash generated from financing activities | 7,582,914 | 5,100,483 | | Net increase in cash and cash equivalents | 3,477,530 | 12,529,534 | | Cash and cash equivalents at end of period | 19,862,374 | 27,318,038 | - Net cash flow from operating activities shifted from a net inflow of RMB 11.4271 million in the same period of 2024 to a net outflow of RMB 0.3407 million in the first half of 2025[9] - Net cash inflow from financing activities increased from RMB 5.1005 million in the same period of 2024 to RMB 7.5829 million in the first half of 2025[9] Notes to the Financial Statements General Information This section provides basic information about the company and its subsidiaries, including their main business, establishment history, controlling shareholder, registered address, and listing status - The Group is primarily engaged in the development, production, and sale of bentonite fine chemicals[10] - The controlling shareholder is Mr. Zhang Youlian[10] - The Company was listed on the GEM of the Stock Exchange on January 16, 2015[12] Basis of Preparation and Accounting Policies The interim financial information is prepared in accordance with IAS 34 and GEM Listing Rules, with accounting policies consistent with the 2024 annual financial statements, and new IFRS amendments are not expected to have a significant impact on the Group's performance or financial position - Basis of Preparation: International Accounting Standard 34 "Interim Financial Reporting" and the GEM Listing Rules[14] - Accounting Policies: Consistent with those adopted in the annual financial statements for the year ended December 31, 2024[15] - Impact of New Standards: Directors estimate that the newly revised International Financial Reporting Standards will have no significant impact on the Group's performance and financial position[15][17] Segment Information All of the Group's business activities revolve around the production and sale of bentonite products, which management considers a single operating segment, thus no segment information is presented - Operating Segment: The Group has only one operating segment, which is the production and sale of bentonite products[18] Revenue Breakdown For the six months ended June 30, 2025, the company's total revenue was RMB 98.0227 million, with organic bentonite as the primary source, significant growth in "Bidi powder" and high-quality calcium-based clay, and a decrease in paper chemicals and other products Revenue by Product Category | Product | 2025 H1 (RMB) | 2024 H1 (RMB) | | :--- | :--- | :--- | | Organic bentonite | 52,981,658 | 47,778,559 | | Paper chemicals | 17,085,650 | 19,653,930 | | Inorganic gel | 15,144,080 | 14,926,620 | | Dry strength agent | 5,854,968 | 5,137,843 | | Bidi powder | 2,991,464 | 207,618 | | High-quality calcium-based clay | 2,280,351 | 807,965 | | Others | 1,684,529 | 2,610,631 | | Total revenue | 98,022,700 | 91,123,166 | Other Income – Net For the six months ended June 30, 2025, other income net was RMB 0.5447 million, a decrease from RMB 1.0485 million in the prior year, primarily due to reduced government grants Other Income – Net | Item | 2025 H1 (RMB) | 2024 H1 (RMB) | | :--- | :--- | :--- | | Government grants – cost-related | 346,610 | 993,846 | | Government grants – asset-related | – | 196,734 | | Others | 198,111 | (142,083) | | Total | 544,721 | 1,048,497 | - Total government grants decreased from RMB 1.1906 million in the same period of 2024 to RMB 0.3466 million in the first half of 2025[21] Finance Costs – Net For the six months ended June 30, 2025, finance costs net increased to RMB 3.8714 million from RMB 3.1403 million in the prior year, mainly due to higher interest expenses Finance Costs – Net | Item | 2025 H1 (RMB) | 2024 H1 (RMB) | | :--- | :--- | :--- | | Finance income – interest income from bank deposits | 28,712 | 49,628 | | Finance costs – interest expenses | (3,895,296) | (3,251,827) | | Finance costs – exchange gains on borrowings, cash and cash equivalents – net | 53,872 | 61,908 | | Finance costs – interest expense on lease liabilities | (58,705) | – | | Finance costs – net | (3,871,417) | (3,140,291) | - Interest expenses increased from RMB 3.2518 million in the same period of 2024 to RMB 3.8953 million in the first half of 2025[22] Loss / Profit Before Income Tax For the six months ended June 30, 2025, the company reported a loss before income tax of RMB 2.6937 million, compared to a profit of RMB 3.0373 million in the prior year, with increased depreciation and amortization of leasehold improvements Loss / Profit for the period after charging the following | Item | 2025 H1 (RMB) | 2024 H1 (RMB) | | :--- | :--- | :--- | | Depreciation | 3,484,314 | 3,211,070 | | Amortisation of prepaid lease payments for land | 107,992 | 91,254 | | Amortisation of mining rights | 57,800 | 57,800 | | Amortisation of leasehold improvements | 1,577,272 | 1,212,070 | Income Tax Expense For the six months ended June 30, 2025, income tax expense increased to RMB 0.3115 million, with the company and some subsidiaries enjoying a 15% preferential tax rate for high-tech enterprises, some subsidiaries a 20% preferential tax rate for small low-profit enterprises, and US operations taxed at 21% Income Tax Expense | Item | 2025 H1 (RMB) | 2024 H1 (RMB) | | :--- | :--- | :--- | | Current income tax | (131,862) | (232,794) | | Deferred income tax | (179,687) | – | | Income tax expense | (311,549) | (232,794) | - The Company and its subsidiary, Yangyuan Renheng Fine Clay Co., Ltd., enjoy a 15% preferential tax rate as high-tech enterprises[24] - The subsidiary, Zhejiang Chang'an Renheng Chemical Co., Ltd., enjoys a 20% preferential income tax rate as a small low-profit enterprise[25] - Profits from the United States are subject to income tax at a rate of 21%[25] Loss / Earnings Per Share For the six months ended June 30, 2025, the company reported a basic loss per share of RMB 0.078, compared to earnings per share of RMB 0.073 in the prior year, with diluted loss per share being the same as basic loss per share due to the absence of potentially dilutive ordinary shares Loss / Earnings Per Share | Indicator | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | | Loss / Profit attributable to equity holders of the Company (RMB) | (3,005,246) | 2,804,543 | | Weighted average number of ordinary shares in issue | 38,400,000 | 38,400,000 | | Basic Loss / Earnings per share (RMB per share) | (0.078) | 0.073 | - Diluted Loss / Earnings per share is the same as basic Loss / Earnings per share, as there are no potentially dilutive ordinary shares[28] Dividends The Board of Directors resolved not to declare any interim dividend for the six months ended June 30, 2025, consistent with the prior year - The Board of Directors resolved not to declare any interim dividend for the six months ended June 30, 2025[29] Property, Plant and Equipment For the six months ended June 30, 2025, the Group acquired property, plant, and equipment totaling approximately RMB 10.6567 million, a decrease from RMB 14.0358 million in the prior year Acquisition of Property, Plant and Equipment | Item | 2025 H1 (RMB) | 2024 H1 (RMB) | | :--- | :--- | :--- | | Acquisition of property, plant and equipment | 10,656,702 | 14,035,835 | Trade and Other Receivables, Prepayments and Other Current Assets As of June 30, 2025, net trade and other receivables, prepayments, and other current assets totaled RMB 84.3514 million, a slight increase from the end of 2024, with a decrease in net trade receivables but a significant increase in prepayments, and credit terms generally ranging from 90 to 180 days Trade and Other Receivables, Prepayments and Other Current Assets | Item | 2025-06-30 (RMB) | 2024-12-31 (RMB) | | :--- | :--- | :--- | | Trade receivables – net | 69,060,244 | 71,606,234 | | Other receivables – net | 2,189,385 | 2,714,251 | | Prepayments | 12,733,150 | 8,898,261 | | Other current assets | 368,638 | 798,193 | | Total | 84,351,417 | 84,016,939 | Ageing Analysis of Trade Receivables | Ageing | 2025-06-30 (RMB) | 2024-12-31 (RMB) | | :--- | :--- | :--- | | Within 180 days | 54,315,596 | 54,627,569 | | 180 days to 1 year | 12,710,874 | 12,961,088 | | 1 year to 2 years | 4,223,054 | 6,699,565 | | 2 years to 3 years | 226,813 | 262,213 | | Over 3 years | 2,972,837 | 3,317,986 | | Total | 74,449,174 | 77,868,421 | - Credit terms granted to customers generally range from 90 to 180 days[33] Trade and Other Payables As of June 30, 2025, total trade and other payables were RMB 38.2735 million, a slight decrease from the end of 2024, with an increase in trade payables and a decrease in accrued staff salaries and benefits Trade and Other Payables | Item | 2025-06-30 (RMB) | 2024-12-31 (RMB) | | :--- | :--- | :--- | | Trade payables | 21,910,049 | 18,994,736 | | Other payables | 10,559,412 | 11,612,247 | | Accrued staff salaries and benefits | 4,318,431 | 7,395,042 | | Accrued taxes (excluding income tax) | 1,485,624 | 1,219,435 | | Total | 38,273,516 | 39,221,460 | Ageing Analysis of Trade Payables | Ageing | 2025-06-30 (RMB) | 2024-12-31 (RMB) | | :--- | :--- | :--- | | Within 6 months | 18,477,698 | 15,225,818 | | 6 months to 1 year | 38,169 | 99,152 | | 1 year to 2 years | 37,605 | 75,116 | | 2 years to 3 years | 33,552 | 22,291 | | Over 3 years | 3,323,025 | 3,572,359 | | Total | 21,910,049 | 18,994,736 | Operating and Financial Review Market and Industry Review China's non-metallic mineral product demand is in a growth opportunity period, with rapid development in the bentonite industry and diverse products, while national policies encourage classified mining, technological innovation, and deep processing to promote high-value development, and the paper industry is moving towards efficiency, quality, and low consumption - China's non-metallic mineral product demand is in a growth opportunity period characterized by "quality and quantity improvement in traditional sectors, accelerated expansion in emerging sectors, and effective promotion of demand and supply"[36] - The bentonite industry has successfully developed products such as edible oil decolorizing agents, drilling mud viscosifiers, and mycotoxin detoxifiers[36] - National plans guide the classified mining of bentonite mineral resources, enhancing technological R&D and deep processing capabilities to transform "resource advantages" into "technological advantages" and "economic advantages"[37] - The paper industry continues to develop towards a modern large-scale industry characterized by high efficiency, high quality, high benefits, low consumption, and low emissions[38] Business Review In the first half of 2025, the Group focused on promoting bentonite for paints and coatings, bentonite for oilfields, and putty mortar products, securing supply contracts with major oil companies for oilfield bentonite, while its US subsidiary operated normally and successfully passed mining permit reviews, with R&D expenses of approximately RMB 6.265 million - Business Focus: Promoting bentonite for paints and coatings, bentonite for oilfields, and putty mortar products[39] - Market Expansion: Oilfield bentonite products have secured supply contracts with companies such as Sinopec and PetroChina[39] - Subsidiary Operations: The US subsidiary operates normally, and Yangyuan Renheng Fine Clay Co., Ltd. successfully passed its mining permit review[39] - R&D Investment: R&D expenses for the first half of 2025 were approximately RMB 6.265 million[39] Revenue Analysis For the six months ended June 30, 2025, total revenue increased by 7.6% year-on-year, with significant growth in organic bentonite, "Bidi powder" (up 1338.0%), and high-quality calcium-based clay, while paper chemicals and other chemicals saw a decrease Revenue and Proportion by Product Category | Product | 2025 H1 (RMB Thousand) | Proportion (%) | 2024 H1 (RMB Thousand) | Proportion (%) | | :--- | :--- | :--- | :--- | :--- | | Organic bentonite | 52,982 | 54.1 | 47,778 | 52.4 | | Paper chemicals | 17,086 | 17.4 | 19,654 | 21.6 | | Inorganic gel | 15,144 | 15.4 | 14,927 | 16.4 | | Dry strength agent | 5,855 | 6.0 | 5,138 | 5.6 | | Bidi powder | 2,991 | 3.1 | 208 | 0.2 | | High-quality calcium-based clay | 2,280 | 2.3 | 808 | 0.9 | | Others | 1,685 | 1.7 | 2,610 | 2.9 | | Total | 98,023 | 100.0 | 91,123 | 100.0 | - Organic bentonite revenue increased by 10.9% to RMB 52.982 million, primarily due to increased sales volume[41] - "Bidi powder" revenue significantly increased by 1338.0% to RMB 2.991 million[41] - Paper chemicals revenue decreased by 13.1% to RMB 17.086 million, primarily due to decreased sales volume[40] Cost of Sales Analysis For the six months ended June 30, 2025, cost of sales increased by 14.0% year-on-year to RMB 61.516 million, with raw material costs being the main component, increasing by 13.9% due to higher average purchase unit prices and consumption of CPAM Cost of Sales Breakdown | Item | 2025 H1 (RMB Thousand) | Proportion (%) | 2024 H1 (RMB Thousand) | Proportion (%) | | :--- | :--- | :--- | :--- | :--- | | Raw material costs | 48,058 | 78.1 | 42,180 | 78.2 | | Manufacturing overhead costs | 9,166 | 14.9 | 7,929 | 14.7 | | Direct labor costs | 3,322 | 5.4 | 3,021 | 5.6 | | Others | 970 | 1.6 | 809 | 1.5 | | Total | 61,516 | 100.0 | 53,939 | 100.0 | - Cost of sales increased by 14.0% to RMB 61.516 million[43] - Raw material costs increased by 13.9% to RMB 48.058 million, primarily due to an increase in the average purchase unit price and consumption of CPAM (a key raw material for bentonite products)[44] Gross Profit and Gross Margin For the six months ended June 30, 2025, gross profit decreased by 1.8% year-on-year to RMB 36.507 million, and gross margin declined from 40.8% to 37.2%, mainly due to changes in the sales product mix and higher average costs of raw materials and energy Gross Profit and Gross Margin | Indicator | 2025 H1 (RMB) | 2024 H1 (RMB) | | :--- | :--- | :--- | | Gross profit | 36,507,000 | 37,184,000 | | Gross margin | 37.2% | 40.8% | - The decrease in gross margin was primarily due to changes in the sales product mix and higher average costs of raw materials and energy compared to the previous year[46] Expense Analysis This section details changes in distribution costs, administrative expenses, and research and development expenses, with distribution and administrative costs increasing, while R&D expenses significantly decreased due to reduced project work Distribution Costs For the six months ended June 30, 2025, distribution costs increased by 31.5% year-on-year to RMB 17.011 million, primarily due to higher transportation expenses Distribution Costs | Indicator | 2025 H1 (RMB) | 2024 H1 (RMB) | | :--- | :--- | :--- | | Distribution costs | 17,011,000 | 12,938,000 | - The increase in distribution costs was primarily due to higher transportation expenses[47] Administrative Expenses For the six months ended June 30, 2025, administrative expenses increased by 14.5% year-on-year to RMB 12.654 million, mainly due to higher staff costs and professional fees Administrative Expenses | Indicator | 2025 H1 (RMB) | 2024 H1 (RMB) | | :--- | :--- | :--- | | Administrative expenses | 12,654,000 | 11,048,000 | - The increase in administrative expenses was primarily due to higher staff costs and professional fees[48] Research and Development Expenses For the six months ended June 30, 2025, research and development expenses decreased by 22.3% year-on-year to RMB 6.265 million, mainly due to reduced work on environmental R&D projects with Jilin Petrochemical Design Institute Research and Development Expenses | Indicator | 2025 H1 (RMB) | 2024 H1 (RMB) | | :--- | :--- | :--- | | Research and development expenses | 6,265,000 | 8,068,000 | - The decrease in research and development expenses was primarily due to reduced work on environmental R&D projects with Jilin Petrochemical Design Institute[49] Other Income – Net For the six months ended June 30, 2025, other income net was RMB 0.545 million, a decrease from RMB 1.048 million in the prior year, primarily due to reduced government grants Other Income – Net | Indicator | 2025 H1 (RMB) | 2024 H1 (RMB) | | :--- | :--- | :--- | | Other income – net | 545,000 | 1,048,000 | - The decrease in other income net was primarily due to government grants reducing from RMB 1.191 million to RMB 0.347 million[50] Finance Costs – Net For the six months ended June 30, 2025, finance costs net increased to RMB 3.871 million, primarily due to an increase in average bank borrowings Finance Costs – Net | Indicator | 2025 H1 (RMB) | 2024 H1 (RMB) | | :--- | :--- | :--- | | Finance costs – net | 3,871,000 | 3,140,000 | - The increase in finance costs net was primarily due to an increase in average bank borrowings[51] Income Tax Expense For the six months ended June 30, 2025, income tax expense was RMB 0.312 million, an increase from RMB 0.233 million in the prior year Income Tax Expense | Indicator | 2025 H1 (RMB) | 2024 H1 (RMB) | | :--- | :--- | :--- | | Income tax expense | 312,000 | 233,000 | Loss / Profit Attributable to Equity Holders of the Company for the Period Due to the combined effect of the aforementioned factors, the loss attributable to equity holders of the Company for the six months ended June 30, 2025, was RMB 3.005 million, compared to a profit of RMB 2.805 million in the prior year Loss / Profit Attributable to Equity Holders of the Company for the Period | Indicator | 2025 H1 (RMB) | 2024 H1 (RMB) | | :--- | :--- | :--- | | Loss / Profit attributable to equity holders of the Company for the period | (3,005,000) | 2,805,000 | Financial Position and Future Outlook Liquidity and Sources of Funds The Group primarily meets its working capital needs through cash generated from operations and long-term and short-term bank borrowings, with cash and cash equivalents totaling RMB 19.862 million as of June 30, 2025, and the Board believes the Group has sufficient working capital for at least the next twelve months - Sources of Funds: Primarily from cash generated from operations, long-term and short-term bank borrowings, and other borrowings[54] - The weighted average effective annual interest rates for bank borrowings and other borrowings were 4.29% and 4.22%, respectively[54] Cash and Cash Equivalents | Indicator | 2025-06-30 (RMB) | | :--- | :--- | | Cash and cash equivalents | 19,862,000 | - The Group's cash and cash equivalents increased by approximately RMB 3.531 million, primarily contributed by net cash inflow from financing activities[55] Capital Structure and Indebtedness As of June 30, 2025, the Group's total borrowings were approximately RMB 184.6 million, an increase from the end of 2024, and the Group encountered no difficulties in renewing bank loans during the reporting period Total Borrowings | Indicator | 2025-06-30 (RMB) | 2024-12-31 (RMB) | | :--- | :--- | :--- | | Total borrowings | 184,604,000 | 172,958,000 | - The Group encountered no difficulties in renewing bank loans with lenders during the reporting period[56] Gearing Ratio As of June 30, 2025, the Group's gearing ratio was 142.4%, an increase from 132.0% at the end of 2024, primarily due to an increase in total equity Gearing Ratio | Indicator | 2025-06-30 | 2024-12-31 | | :--- | :--- | :--- | | Gearing ratio | 142.4% | 132.0% | - The increase in the gearing ratio was primarily due to an increase in total equity[57] Pledge of Assets As of June 30, 2025, the Group pledged assets including buildings, fixtures and fittings, land use rights, and time deposits totaling approximately RMB 13.477 million to banks, a decrease from RMB 15.463 million at the end of 2024 Pledge of Assets | Indicator | 2025-06-30 (RMB) | 2024-12-31 (RMB) | | :--- | :--- | :--- | | Total pledged assets | 13,477,000 | 15,463,000 | Capital Expenditure For the six months ended June 30, 2025, the Group's capital expenditure was approximately RMB 10.657 million, a decrease from RMB 14.036 million in the prior year Capital Expenditure | Indicator | 2025 H1 (RMB) | 2024 H1 (RMB) | | :--- | :--- | :--- | | Capital expenditure | 10,657,000 | 14,036,000 | Exchange Rate Risk The Group's primary business is in China, with transactions mainly in RMB, and most assets and liabilities denominated in RMB; despite the non-convertibility of RMB posing exchange rate risk, the Group believes its exposure to exchange rate fluctuations among HKD, USD, and RMB is not significant and has not engaged in hedging transactions - Primary Business and Transaction Currency: Within mainland China, conducted in RMB[60] - Exchange Rate Risk: RMB is not freely convertible, posing a risk that actions by the Chinese government could affect exchange rates[60] - Risk Assessment: The Group believes its exposure to exchange rate fluctuations among HKD, USD, and RMB is not significant[60] - Hedging Strategy: The Group has not entered into any hedging transactions to manage foreign currency fluctuation risks[60] Contingent Liabilities, Legal and Potential Proceedings As of June 30, 2025, the Group had no significant contingent liabilities, legal proceedings, or potential proceedings - The Group had no significant contingent liabilities, legal proceedings, or potential proceedings[61] Significant Acquisitions and Disposals For the six months ended June 30, 2025, the Group did not undertake any significant acquisitions or disposals - The Group did not undertake any significant acquisitions or disposals[62] Going Concern Based on its current financial position and available financing, the Group has sufficient financial resources to continue operating for the foreseeable future, thus the financial statements are prepared on a going concern basis - The Group has sufficient financial resources to continue operating for the foreseeable future, and the financial statements are prepared on a going concern basis[63] Future Development The Group will continue to focus on high-value and high-end utilization of bentonite and its associated minerals, develop strategic new products like organic bentonite, water-based bentonite, and inorganic gels, emphasize green and environmentally friendly product development, and target overseas markets such as North America, Europe, and Southeast Asia, driven by profit and innovation to maximize shareholder value - Product Strategy: Continue to focus on transitioning bentonite from traditional low-value, low-end utilization to high-value, high-end utilization, and research and develop bentonite mineral functional materials and related products[64] - New Product Development: Develop high-solid rheological additives for coatings, high-solid oil-based pesticide suspending agents, bentonite products for deep, ultra-deep, and offshore drilling, and focus on green and environmentally friendly product R&D[65] - Market Expansion: Focus on developing overseas customer markets in North America, Europe, Southeast Asia, and expanding foreign trade business[65] - Development Strategy: Adhere to a profit-centric approach, driven by innovation, actively developing new products, and opening new markets[65] Corporate Governance and Shareholder Information Human Resources and Training As of June 30, 2025, the Group had 232 employees with total staff costs of approximately RMB 17.637 million, adhering to a "people-oriented" management philosophy and enhancing employee efficiency and performance through strict selection, annual sales guidelines, quarterly marketing strategies, and various incentive mechanisms Number of Employees and Staff Costs | Indicator | 2025-06-30 | 2024 H1 (RMB) | | :--- | :--- | :--- | | Total number of employees | 232 | - | | Total staff costs | 17,637,000 | 16,959,000 | - Management Philosophy: Adhering to a "people-oriented" approach, building a management and development platform[66] - Performance Management: Annually issuing sales guidelines, formulating quarterly marketing strategies, and implementing various incentive mechanisms to enhance employee work efficiency[66] Interests of Directors, Supervisors and Chief Executive As of June 30, 2025, Mr. Zhang Youlian held 50.05% of the company's shares, Ms. Zhang Jinhua held 1.04%, and Mr. Xu Qinshi held 0.26% through his spouse; no other directors, supervisors, or chief executive held disclosable interests in shares or related shares Long Positions of Directors / Supervisors in the Ordinary Shares of the Company | Name of Director / Supervisor | Nature of interest | Number of shares in the Company held | Approximate percentage of issued share capital | | :--- | :--- | :--- | :--- | | Mr. Zhang Youlian | Beneficial owner | 19,220,600 | 50.05% | | Ms. Zhang Jinhua | Beneficial owner | 398,400 | 1.04% | | Mr. Xu Qinshi (i) | Spouse's interest | 100,000 | 0.26% | - Save as disclosed above, no other directors or supervisors and chief executive held any interests or short positions required to be registered or notified to the Stock Exchange[68] Interests of Substantial Shareholders and Other Persons As of June 30, 2025, apart from directors, supervisors, and the chief executive, Ms. Yu Hua was the only other person holding 5% or more interest in the company, with 9.31% of the shares Long Positions of Substantial Shareholders and Other Persons in Shares | Name of Shareholder | Nature of interest | Total number of shares in the Company held | Approximate percentage of issued share capital | | :--- | :--- | :--- | :--- | | Ms. Yu Hua | Beneficial owner | 3,576,000 | 9.31% | - Save as disclosed above, no other persons held any interests or short positions required to be registered[69] Rights of Directors and Supervisors to Acquire Shares or Debentures During the reporting period, no director, supervisor, or their spouse or minor children were granted or exercised any rights to acquire shares or debentures of the company - During the reporting period, no director or supervisor or their respective spouses or minor children were granted or exercised any rights to acquire shares or debentures of the Company[70] Connected Transactions During the reporting period, the Group did not enter into any connected transactions or continuing connected transactions requiring disclosure under the GEM Listing Rules - The Group did not enter into any connected transactions or continuing connected transactions requiring disclosure under the GEM Listing Rules[71] Interests of Directors, Supervisors and Controlling Shareholders in Competing Businesses and Conflicts of Interest During the reporting period, no director, supervisor, controlling shareholder, or their associates engaged in any business competing or likely to compete with the Group's business, or held any interests that would create a conflict of interest with the Group - No director, supervisor, or controlling shareholder or their respective associates engaged in any business competing or likely to compete with the Group's business, or held any interests therein that would create a conflict of interest with the Group[72] Public Float From the reporting period to the date of this announcement, at least 25% of the Company's issued share capital was held by public shareholders - At least 25% of the Company's issued share capital is held by public shareholders[73] Purchase, Sale or Redemption of the Company's Listed Securities During the reporting period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities - Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[74] Capital Commitments As of June 30, 2025, the Group's capital commitments were approximately RMB 1.254 million, a decrease from RMB 1.672 million at the end of 2024 Capital Commitments | Indicator | 2025-06-30 (RMB) | 2024-12-31 (RMB) | | :--- | :--- | :--- | | Capital commitments | 1,254,000 | 1,672,000 | Dividends The Board of Directors resolved not to declare any interim dividend for the six months ended June 30, 2025, consistent with the prior year - The Board of Directors resolved not to declare any interim dividend for the six months ended June 30, 2025[76] Corporate Governance Practices The Company is committed to complying with the Corporate Governance Code but has deviations regarding the combined roles of Chairman and Chief Executive and directors' and officers' liability insurance; the Board believes the current structure is beneficial and is considering liability insurance proposals - The Company complies with all applicable provisions of the Corporate Governance Code, but with two deviations[77] - Deviation from Code Provision C.2.1: The roles of Chairman and Chief Executive are combined and held by Mr. Zhang Youlian, which the Board believes provides strong and consistent leadership[77] - Deviation from Code Provision C.1.8: Directors' and officers' liability insurance covering directors' liabilities arising from legal proceedings was not purchased during the reporting period, as the Board required time to consider the proposal[78] Standard Code for Securities Transactions The Company has adopted a standard code for securities transactions no less exacting than the GEM Listing Rules, and all directors have confirmed full compliance with the code after inquiry - The Company has adopted a standard code for securities transactions no less exacting than the GEM Listing Rules[79] - All directors confirmed full compliance with the required dealing standards set out in the Standard Code during the reporting period[79] Nomination Committee The Company's Nomination Committee was established on March 26, 2014, with its terms of reference revised on June 30, 2025, and comprises Mr. Fan Fang (Executive Director), Mr. Zhang Lei, and Mr. Tang Jingyan (Independent Non-executive Directors), with Mr. Tang serving as Chairman - The Nomination Committee was established on March 26, 2014, and its terms of reference were revised on June 30, 2025[80] - Committee Members: Mr. Fan Fang (Executive Director), Mr. Zhang Lei, and Mr. Tang Jingyan (Independent Non-executive Directors)[80] - Chairman: Mr. Tang Jingyan[80] Audit Committee The Company's Audit Committee, established on March 26, 2014, comprises Mr. Zhang Lei (Chairman), Mr. Chen Jianping, and Mr. Tang Jingyan (all Independent Non-executive Directors), with primary duties including reviewing financial reports, internal control effectiveness, external auditor independence, and audit process effectiveness, and has reviewed the interim financial statements - The Audit Committee was established on March 26, 2014, and its terms of reference have been set out in compliance with the Corporate Governance Code[81] - Committee Members: Mr. Zhang Lei (Chairman), Mr. Chen Jianping, and Mr. Tang Jingyan (all Independent Non-executive Directors)[81] - Primary Responsibilities: Providing independent review and oversight of financial reporting, reviewing the effectiveness of internal controls, ensuring the independence of external auditors, and the effectiveness of the audit process[81] - The unaudited consolidated financial statements of the Company for the six months ended June 30, 2025, have been reviewed[82] Post-Reporting Period Events and Information Disclosure Events After the Reporting Period As of the date of this announcement, the Group has no significant events after the reporting period - As of the date of this announcement, there are no significant events after the reporting period[83] Information Disclosure The Company will dispatch the interim report for the six months ended June 30, 2025, to shareholders in due course and will publish it on the company's website and the Stock Exchange's website - The interim report will be dispatched to shareholders and published on the Company's website www.renheng.com and the Stock Exchange's website www.hkexnews.hk[84](index=84&type=chunk)