国瑞健康(02329) - 2025 - 中期业绩

I. Company Overview I.A. Basic Information Guorui Health Industry Co., Ltd., incorporated in the Cayman Islands in 2012 and listed on the HKEX Main Board - The company changed its name to Guorui Health Industry Co., Ltd. in June 2022, formerly known as Guorui Properties Limited[7] - The ultimate holding company is Tonghe Properties Limited, wholly owned by Mr. Zhang Zhangsun, who is the ultimate beneficial owner[7] - The company's shares are listed on the Main Board of The Stock Exchange of Hong Kong Limited[8] I.B. Principal Activities The Group's principal activities include property development, primary land development, property investment, and property management services - The Group is principally engaged in property development, provision of primary land construction and development services, property investment, and provision of property management and related services[8] I.C. Basis of Preparation and Principal Accounting Policies Condensed consolidated financial statements are prepared under IAS 34 and HKEX Listing Rules, primarily on a historical cost basis - The condensed consolidated financial statements are prepared in accordance with International Accounting Standard 34 Interim Financial Reporting and the disclosure requirements of Appendix D2 to the Listing Rules of The Stock Exchange of Hong Kong Limited[10] - The statements are prepared on a historical cost basis, except for investment properties and certain financial instruments measured at fair value[10] - The application of amendments to International Financial Reporting Standards in the current period had no significant impact on the financial position and performance[11] I.D. Going Concern Assumption and Measures The Group's financial statements are based on a going concern, with measures like debt renewal and asset disposal to improve liquidity - The condensed consolidated financial statements are prepared on the assumption that the Group will continue to operate on a going concern basis[12] - Measures adopted by the directors include renegotiating borrowing plans with banks, believing the Group will be able to renew borrowings upon maturity[15] - The Group plans to dispose of certain investment properties to improve financial position, liquidity, and cash flow, and implement cost control measures for selling and administrative expenses[15] II. Financial Data Overview II.A. Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income The Group reported RMB 324.18 million in revenue, RMB 4.37 million gross profit, and a significant net loss of RMB 170.02 million Key Data from Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the six months ended June 30) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Revenue | 324,178 | 987,459 | | Gross Profit | 4,369 | 432,277 | | Other Gains/(Losses) | 20,136 | (30,013) | | Income Tax (Credit) | (18,317) | (60,719) | | Loss for the Period | (170,019) | (64,445) | | Loss Attributable to Owners of the Company for the Period | (225,179) | (58,659) | | Basic and Diluted (Loss) Per Share (RMB) | (0.05) | (1.32) | II.B. Condensed Consolidated Statement of Financial Position As of June 30, 2025, total assets were RMB 32,005.86 million, total liabilities RMB 31,207.61 million, and equity RMB 9,703.51 million Key Data from Condensed Consolidated Statement of Financial Position (As of June 30) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Assets | | | | Property, Plant and Equipment | 241,098 | 244,763 | | Investment Properties | 13,481 | 13,481 | | Properties Held for Sale | 18,213,018 | 18,306,878 | | Trade and Other Receivables | 5,003,630 | 5,885,422 | | Cash and Bank Balances | 3,339,399 | 2,745,190 | | Total Assets | 32,005,860 | 32,365,627 | | Liabilities | | | | Trade and Other Payables | 7,320,157 | 8,501,284 | | Borrowings | 25,621,686 | 25,892,773 | | Total Liabilities | 31,207,606 | 31,311,905 | | Equity | | | | Share Capital | 3,520 | 3,520 | | Reserves | 9,699,992 | 9,925,171 | | Total Shareholders' Equity | 9,703,512 | 9,928,691 | II.C. Condensed Consolidated Statement of Cash Flows Operating cash outflow was RMB 188.34 million, investing cash outflow RMB 8.37 million, and financing cash inflow RMB 38.96 million Key Data from Condensed Consolidated Statement of Cash Flows (For the six months ended June 30) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Net Cash from/(used in) Operating Activities | (188,336) | (125,163) | | Net Cash used in Investing Activities | (8,373) | - | | Net Cash from Financing Activities | 38,958 | 38,517 | II.D. Financial Notes Financial notes provide details on revenue, income tax, loss per share, and financial guarantees, supplementing performance understanding - Capitalized interest is calculated at annual rates ranging from 4.8% to 18% (2024: 4.8% to 15%), with an average capitalization rate of 8.7%[24] - As of June 30, 2025, the Group's outstanding guarantees for customer mortgages amounted to RMB 1,953.7 million[33] - As of June 30, 2025, the Group provided bank financing guarantees for related parties totaling RMB 215.44 million[34] II.D.1. Revenue Analysis Total revenue for H1 2025 was RMB 324.18 million, comprising RMB 182.67 million from property development and RMB 139.44 million from leasing Timing of Revenue Recognition (For the six months ended June 30) | Revenue Source | At a point in time (RMB thousands) | Over time (RMB thousands) | Leasing (RMB thousands) | Total Revenue (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | | Property Development | 182,672 | - | - | 182,672 | | Primary Land Construction and Development | - | 2,064 | - | 2,064 | | Property Management | - | - | - | 2 | | Leasing | - | - | 139,440 | 139,440 | | Total | 182,672 | 2,064 | 139,440 | 324,178 | II.D.2. Income Tax (Credit) Income tax credit for H1 2025 was RMB 18.32 million, a significant decrease, with China corporate income tax at 25% Income Tax (Credit) (For the six months ended June 30) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Current tax - China corporate income tax | 78 | (41) | | Current tax - Land appreciation tax | 6,682 | 15,347 | | Deferred tax | (25,077) | (76,025) | | Income tax (credit) | (18,317) | (60,719) | - China corporate income tax is calculated at a rate of 25%, and land appreciation tax is accrued at progressive rates on the appreciation value[26][27] II.D.3. (Loss) Per Share Loss attributable to owners for H1 2025 was RMB 225.18 million, resulting in a basic and diluted loss per share of RMB 0.05 Calculation of (Loss) Per Share (For the six months ended June 30) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | (Loss) used in calculating basic and diluted (loss) per share | (225,179) | (58,659) | | Weighted average number of ordinary shares (thousands of shares) | 4,444,418 | 4,444,418 | II.D.4. Financial Guarantees and Contingent Liabilities Outstanding customer mortgage guarantees totaled RMB 1,953.7 million, with additional RMB 215.44 million in related party bank financing guarantees - As of June 30, 2025, the Group's outstanding guarantees for customer mortgages amounted to RMB 1,953.7 million[33] - As of June 30, 2025, the Group provided bank financing guarantees for related parties Jiangmen Yinghuiwan Real Estate Co., Ltd. and Shantou Huirui Hotel Management Co., Ltd., totaling RMB 215.44 million[34] III. Chairman's Statement III.A. Interim Results Review H1 2025 revenue was RMB 324.2 million, with property development contributing RMB 182.7 million - During the reporting period, the Group's revenue was RMB 324.2 million[37] - Revenue from property development amounted to RMB 182.7 million[37] III.B. Market Review Real estate policies eased, with governments relaxing restrictions and introducing financial measures to stimulate market recovery - Industry policies focus on building a new real estate development model, promoting stable, healthy, and high-quality market development, and driving a rebound from decline[38] - Strict policies such as purchase, sale, and loan restrictions are gradually being relaxed, with the central bank and financial regulators continuously introducing various financial measures to lower homebuying thresholds and ease residents' mortgage burdens[38] III.C. Business Operations The Group paused property development investment, focusing on sales, debt reduction, asset disposal, and business transformation, with urban renewal projects as future profit drivers - The Group paused new investments, fully promoting sales, shrinking property development scale, adhering to debt reduction, and accelerating asset disposal to improve liquidity[39] - The Group is fully committed to ensuring project completion and delivery, while accelerating its transformation pace[39] - During the reporting period, the Group's total rental income was RMB 139.4 million, which decreased due to the impact of e-commerce and the downturn in the real economy[40] III.C.1. Property Development Business H1 2025 saw the Group pause new property investments, focusing on sales, debt reduction, asset disposal, and ensuring project completion and delivery - The Group adapted to market changes by pausing new investments, fully promoting sales to capture market share within the limited market capacity[39] - The Group further scaled back property development, adhering to debt reduction and accelerating asset disposal to improve liquidity[39] III.C.2. Investment Property Business Total rental income was RMB 139.4 million, impacted by e-commerce and economic downturn, despite owning 9 prime investment properties totaling 745,289 sq.m. - During the reporting period, the Group's total rental income was RMB 139.4 million, which decreased due to the impact of e-commerce and the downturn in the real economy[40] - The Group owns 9 self-held investment properties in prime locations in first- and second-tier cities like Beijing and Shenzhen, with a total planned GFA of approximately 745,289 square meters[40] III.C.3. Land Bank and Urban Renewal As of June 30, 2025, the Group's land bank totaled 6.3871 million sq.m., with urban renewal projects, particularly in Shenzhen, expected to drive future profits - As of June 30, 2025, the Group's total planned GFA of land bank was 6.3871 million square meters[41] - The Group holds existing primary land development and urban renewal projects, with unconfirmed primary development and urban renewal projects covering 5.811 million square meters, of which 51.6% are in Shenzhen[41] - Urban renewal projects require less capital and offer high profit margins, with cash flow expected from H2 2025 to 2026, becoming new profit drivers[41] III.D. Capital Structure The Group optimizes its debt structure, reduces financing costs, and strengthens risk management to alleviate short-term repayment pressure - The Group continuously optimizes its debt structure, alleviates short-term repayment pressure, reduces financing costs, effectively manages exchange rate risks, and achieves effective debt reduction through communication with banks and financial institutions[42] - The Group further strengthens its risk management function, improves its financial risk monitoring system, and enhances risk warning and prevention[42] III.E. Business Transformation The Group is gradually transitioning from property to health industry, focusing on elderly care, online health services, and regenerative medicine incubation - The Group is gradually scaling back its property business and steadily advancing its business transformation towards the health industry[43] - The Group will focus on exploring innovations in residential formats, developing industries such as elderly care communities, online health living, and regenerative medicine incubation[43] - The Group will comprehensively enhance its integrated operational and service capabilities by developing innovative businesses such as Guorui Hospital and online medical services, online elderly care services, and regenerative medicine[43] III.F. Outlook H2 2025 expects increased real estate policy support, but the market remains challenging; long-term, the Group will adapt to intense competition and transition to health industry - The Group expects continued strong real estate policy support in H2 2025, but the market will remain in a bottoming-out phase, and rebuilding buyer confidence will take time[44] - Improving the financing environment for real estate enterprises is crucial; currently, the 'whitelist' policy has limited coverage, and the industry urgently needs financial policies to restore normal capital circulation[45] - In the long term, the real estate industry still has room for development but will enter a highly competitive landscape with differentiated development across cities, enterprises, and products[46] III.F.1. Second Half Outlook H2 2025 expects intensified real estate policy support and full relaxation of restrictions, but the market remains challenging with low confidence and urgent funding needs - Looking ahead to H2 2025, real estate policy support is expected to intensify, with purchase, sale, and loan restrictions gradually and completely relaxed[44] - The real estate market is expected to remain in a bottoming-out phase, with investment confidence at a low, shrinking market scale, continued price declines, and urgent need for developers' liquidity pressure to be alleviated[44] - The industry urgently needs financial policies to restore normal capital circulation; currently, the 'whitelist' policy has limited coverage and cannot effectively improve developers' cash flow[45] III.F.2. Long-Term Industry Outlook Long-term, real estate has growth potential but faces differentiation across cities, companies, and products, leading to intense competition - With China's urbanization and improved per capita housing, the real estate industry still has development potential, but it will no longer be universal, instead developing through continuous differentiation[46] - City differentiation is evident, with properties in high-quality cities showing strong resilience, while those in weaker cities face significant price reductions and immense inventory pressure[46] - The future real estate industry will enter a highly competitive landscape where the fittest survive, requiring enterprises to continuously improve in corporate image, product quality, comprehensive services, and operational management capabilities[47] III.F.3. Future Development Strategy The Group will adapt to the industry downturn by enhancing services, managing debt, improving competitiveness, and transitioning to the health industry - The Group will continue operating during the current industry downturn, while adapting to industry changes, improving both internal and external aspects, and continuously enhancing corporate and product competitiveness from multiple perspectives[47] - In the future, the Group will continuously enhance service levels and operational management capabilities, adjust debt structure, mitigate debt risks, strive to reduce financing costs, and improve the Group's core competitiveness[47] - In a complex and challenging market environment, the Group will transition towards the health industry, exploring its vast market potential[47] IV. Management Discussion and Analysis IV.A. Business Review H1 2025 saw RMB 324.2 million revenue, RMB 4.4 million gross profit, and RMB 170.0 million net loss, with contracted sales down 45.0% to RMB 651.1 million - For the six months ended June 30, 2025, the Group's revenue was RMB 324.2 million, gross profit was RMB 4.4 million, and net loss was RMB 170.0 million[50] - The Group's contracted sales in H1 2025 were approximately RMB 651.1 million, a year-on-year decrease of 45.0%[51][52] - The Group actively undertakes primary land development projects, urban renewal, and 'three old' renovation projects, with significant progress in both Beijing and Shenzhen[56] IV.A.1. Contracted Sales H1 2025 contracted sales were RMB 651.1 million, down 45.0% year-on-year, with Beijing contributing 87.7% (RMB 571.3 million) Contracted Sales by Region (For the six months ended June 30) | City | 2025 Contracted Sales (RMB millions) | 2025 % of Total Contracted Sales | 2024 Contracted Sales (RMB millions) | 2024 % of Total Contracted Sales | | :--- | :--- | :--- | :--- | :--- | | Beijing | 571.3 | 87.7 | 836.8 | 70.7 | | Shenyang | 18.5 | 2.8 | 162.1 | 13.7 | | Foshan | 17.8 | 2.7 | 7.0 | 0.6 | | Guizhou | 17.7 | 2.7 | 1.3 | 0.1 | | Total | 651.1 | 100.0 | 1,184.1 | 100.0 | - Sales in H1 2025 were RMB 651.1 million, a year-on-year decrease of 45.0% compared to RMB 1,184.1 million in H1 2024[52] IV.A.2. Primary Land Development and Urban Renewal Projects The Group actively pursues primary land development and urban renewal projects, with significant progress in Beijing and Shenzhen, including demolition and planning - The Group actively undertakes primary land development projects, urban renewal, and 'three old' renovation projects to secure potential land reserve supply[56] - Beijing Qinian Street West project has a planned GFA of approximately 474,304 square meters, with plots 4 and 5 having completed demolition and progressing towards market entry[57] - Shenzhen Xikeng Community urban renewal project has a planned GFA of approximately 3 million square meters; Phase 1, covering 0.53 million square meters with a planned GFA of approximately 1.2 million square meters, has completed project approval and initiated demolition negotiations[58] IV.A.2.a. Beijing Urban Renewal Project Since September 2007, the Group has developed Beijing's Qinian Street West project (474,304 sq.m.), with plots 4 and 5 now demolished and progressing to market - The Group is undertaking primary land development for the Qinian Street West project in Beijing, located west of Qinian Street, less than one kilometer from Tiananmen Square[57] - The project has a planned GFA of approximately 474,304 square meters, comprising five plots, with plots 4 and 5 having completed demolition and progressing towards market entry[57] IV.A.2.b. Shenzhen Urban Renewal Project Shenzhen Dachao Shan Construction is renewing Xikeng Community (3 million sq.m. planned GFA); Phase 1 is approved, and demolition negotiations for the first unit have begun - Shenzhen Dachao Shan Construction Co., Ltd. signed an urban renewal cooperation agreement with Shenzhen Longgang District Xikeng Shareholding Cooperative Company to renew Xikeng Community, with a planned GFA of approximately 3 million square meters[58] - Phase 1 covers 0.53 million square meters with a planned GFA of approximately 1.2 million square meters, having completed project approval and planning documents[58] - Integrated with the construction plan for Xikeng Station on Metro Line 16 Phase 2, the Group has adjusted the special planning scheme and fully initiated demolition negotiations for the first renewal unit[58] IV.B. Financial Review H1 2025 revenue decreased 67.2% to RMB 324.2 million, gross profit fell to RMB 4.4 million, and loss attributable to owners increased to RMB 225.2 million - For the six months ended June 30, 2025, the Group's revenue was RMB 324.2 million, a 67.2% decrease from RMB 987.5 million in the prior year period[59] - Gross profit decreased from RMB 432.3 million in the prior year period to RMB 4.4 million, primarily due to a significant reduction in property development revenue[61] - Loss attributable to owners of the Company was RMB 225.2 million, an increase of RMB 166.5 million from RMB 58.7 million in the prior year period[62] IV.B.1. Revenue H1 2025 revenue was RMB 324.2 million, a 67.2% decrease, with property development revenue down 76.9% to RMB 182.7 million - For the six months ended June 30, 2025, the Group's revenue was RMB 324.2 million, a 67.2% decrease from RMB 987.5 million in the prior year period[59] - Property development revenue was RMB 182.7 million, a 76.9% decrease from the prior year period, mainly due to reduced completion and sales area[59] IV.B.2. Cost of Sales and Services H1 2025 cost of sales and services was RMB 319.8 million, down 42.4% year-on-year, mainly due to reduced property development completion - For the six months ended June 30, 2025, the Group's cost of sales and services was RMB 319.8 million, a 42.4% decrease from the prior year period[60] - The decrease in cost of sales and services was primarily due to reduced completion and delivery area in the property development segment[60] IV.B.3. Gross Profit H1 2025 gross profit was RMB 4.4 million, down from RMB 432.3 million, primarily due to significantly lower property development revenue - For the six months ended June 30, 2025, the Group's gross profit was RMB 4.4 million, compared to RMB 432.3 million in the prior year period[61] - The significant decrease in gross profit was primarily due to a substantial reduction in property development revenue[61] IV.B.4. Loss Attributable to Owners of the Company H1 2025 loss attributable to owners was RMB 225.2 million, an increase of RMB 166.5 million from RMB 58.7 million year-on-year - For the six months ended June 30, 2025, the loss attributable to owners of the Company was RMB 225.2 million, an increase of RMB 166.5 million from RMB 58.7 million in the prior year period[62] IV.B.5. Other Gains/(Losses) H1 2025 saw other gains of RMB 20.1 million, a reversal from RMB 30.0 million losses, primarily due to USD bond exchange rate changes - For the six months ended June 30, 2025, other gains were RMB 20.1 million, compared to other losses of RMB 30.0 million for the six months ended June 30, 2024[63] - This was mainly due to changes in USD bond exchange rates[63] IV.B.6. Other Income H1 2025 other income decreased to RMB 1.3 million from RMB 1.6 million in the prior year period - Other income decreased from RMB 1.6 million for the six months ended June 30, 2024, to RMB 1.3 million for the six months ended June 30, 2025[64] IV.B.7. Distribution and Selling Expenses H1 2025 distribution and selling expenses decreased by RMB 19.1 million to RMB 43.3 million, mainly due to reduced sales revenue - Distribution and selling expenses decreased by RMB 19.1 million to RMB 43.3 million for the six months ended June 30, 2025, from RMB 62.4 million for the six months ended June 30, 2024[65] - This was mainly due to reduced sales revenue in the current year[65] IV.B.8. Administrative Expenses H1 2025 administrative expenses decreased by RMB 53.7 million to RMB 86.5 million, driven by organizational restructuring and operational optimization - Administrative expenses decreased by RMB 53.7 million to RMB 86.5 million for the six months ended June 30, 2025, from RMB 140.2 million for the six months ended June 30, 2024[66] - The decrease was mainly due to the Group's improved operational quality through organizational restructuring and optimization during the reporting period[66] IV.B.9. Finance Costs H1 2025 finance costs increased by RMB 0.5 million to RMB 39.0 million from RMB 38.5 million in the prior year period - Finance costs increased by RMB 0.5 million to RMB 39.0 million for the six months ended June 30, 2025, from RMB 38.5 million for the six months ended June 30, 2024[67] IV.B.10. Income Tax Credit H1 2025 income tax credit decreased to RMB 18.3 million from RMB 60.7 million, with corporate income tax at RMB 0.1 million and land appreciation tax at RMB 6.7 million - Income tax credit decreased from RMB 60.7 million for the six months ended June 30, 2024, to RMB 18.3 million for the six months ended June 30, 2025[68] - For the six months ended June 30, 2025, the Group's China corporate income tax and land appreciation tax were approximately RMB 0.1 million and RMB 6.7 million, respectively[68] IV.B.11. Total Comprehensive Loss H1 2025 total comprehensive loss increased to RMB 170.0 million from RMB 64.4 million in the prior year period - The Group's total comprehensive loss increased from RMB 64.4 million for the six months ended June 30, 2024, to RMB 170.0 million for the six months ended June 30, 2025[69] IV.C. Liquidity, Financial Resources and Funding As of June 30, 2025, cash and bank balances increased to RMB 333.9 million, with total outstanding borrowings of RMB 22,594.6 million secured by various assets - As of June 30, 2025, the Group's cash, restricted bank deposits, and bank balances were approximately RMB 333.9 million, an increase from RMB 201.9 million as of December 31, 2024[70] - As of June 30, 2025, the Group's outstanding borrowings totaled RMB 22,594.6 million, comprising bank and other borrowings of RMB 18,732.1 million and senior notes of RMB 3,862.5 million[71] - As of June 30, 2025, pledged assets securing certain borrowings granted to the Group amounted to RMB 25,553.1 million[72] IV.C.1. Cash Position As of June 30, 2025, cash, restricted bank deposits, and bank balances increased to RMB 333.9 million from RMB 201.9 million - As of June 30, 2025, the Group's cash, restricted bank deposits, and bank balances were approximately RMB 333.9 million, compared to RMB 201.9 million as of December 31, 2024[70] IV.C.2. Borrowings As of June 30, 2025, total outstanding borrowings were RMB 22,594.6 million, including RMB 18,732.1 million in bank loans and RMB 3,862.5 million in senior notes - As of June 30, 2025, the Group's outstanding borrowings totaled RMB 22,594.6 million[71] - Borrowings include bank and other borrowings of RMB 18,732.1 million and senior notes of RMB 3,862.5 million[71] IV.C.3. Pledged Assets Certain Group borrowings are secured by properties under development, properties held for sale, investment properties, and other assets, totaling RMB 25,553.1 million - Certain of the Group's borrowings are secured by properties under development for sale, properties held for sale, investment properties, prepaid lease payments, property, plant and equipment, and restricted bank deposits[72] - As of June 30, 2025, pledged assets securing certain borrowings granted to the Group amounted to RMB 25,553.1 million[72] IV.C.4. Financial Guarantees and Contingent Liabilities Outstanding customer mortgage guarantees totaled RMB 1,953.7 million, with additional RMB 215.44 million in related party bank financing guarantees - As of June 30, 2025, the Group's outstanding guarantees for customer mortgages amounted to RMB 1,953.7 million[73] - As of June 30, 2025, the Group provided bank financing guarantees for related parties Jiangmen Yinghuiwan Real Estate Co., Ltd. and Shantou Huirui Hotel Management Co., Ltd., totaling RMB 215.44 million[34] IV.C.5. Future Plans for Material Investments or Capital Assets The Group plans to continue property development and land acquisition, funded by internal resources and bank borrowings, with no other material investment plans disclosed - The Group will continue to invest in property development projects and acquire suitable land plots in selected cities, if deemed appropriate[75] - Internal resources and bank borrowings are expected to be sufficient to meet necessary funding requirements[75] - As of the date of this announcement, the Group has no other future material investment plans or capital assets[75] IV.D. Employees and Remuneration Policy H1 2025 saw approximately 389 employees with RMB 47.6 million in costs, with remuneration including salaries, bonuses, and welfare schemes - For the six months ended June 30, 2025, the Group had approximately 389 employees, incurring employee costs of approximately RMB 47.6 million[76] - Employee remuneration generally includes salaries and performance bonuses, and participation in various employee welfare schemes such as housing provident fund, pension, and medical care[76] V. Corporate Governance and Other Information V.A. Interim Dividend The Board has decided not to declare an interim dividend to shareholders - The Board of Directors has decided not to declare an interim dividend to shareholders[77] V.B. Corporate Governance Practices The Company generally complied with the Corporate Governance Code, with deviations regarding combined Chairman/CEO roles and lack of directors' legal liability insurance - The Company has complied with the code provisions of the Corporate Governance Code set out in Appendix C1 to the Listing Rules for the six months ended June 30, 2025[78] - Deviations include the combined roles of Chairman and Chief Executive Officer, which the Company believes benefits business operations without negative impact[78] - Another deviation is that the Company has not yet arranged adequate insurance coverage for directors' legal liabilities, as no insurance with reasonable premiums and sufficient compensation was found in the market[79] V.C. Non-Compliance with Listing Rules Following a director's resignation, the Company's independent non-executive director count and Audit Committee composition fell below Listing Rule minimums, and suitable replacements are being sought - Following Mr. Yuan Hao's resignation as an independent non-executive director on June 10, 2025, the Company has only two independent non-executive directors, with both the number and proportion falling below the minimum requirements of Listing Rules 3.10(1) and 3.10A[80][81] - Due to the insufficient number of independent non-executive directors, the Company also failed to comply with Listing Rule 3.21 regarding the minimum number and composition of the Audit Committee[81] - The Company will make its best efforts to identify suitable candidates to comply with the Listing Rules as soon as possible, aiming to complete this within three months[81] V.D. Compliance with the Model Code for Securities Transactions by Directors of Listed Issuers The Company adopted the Model Code for directors' securities transactions, and all directors confirmed compliance during the reporting period - The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers set out in Appendix C3 to the Listing Rules as its own code of conduct for directors' securities transactions[82] - Following specific inquiries with all directors, each director confirmed compliance with the Model Code for the six months ended June 30, 2025[82] V.E. Purchase, Sale or Redemption of the Company's Listed Securities Neither the Company nor its subsidiaries purchased, sold, or redeemed any listed securities during H1 2025, except as disclosed - 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, except as disclosed in this announcement[83] V.F. Audit Committee The Audit Committee reviewed H1 2025 unaudited interim financial results but currently fails to meet Listing Rule minimums due to an independent non-executive director's resignation - The Company has established its Audit Committee in accordance with Listing Rule 3.21 and code provision D.3 of the Corporate Governance Code[84] - The Group's unaudited interim financial results for the six months ended June 30, 2025, have been reviewed by the Audit Committee[84] - Following Mr. Yuan Hao's resignation as an independent non-executive director, the Audit Committee now comprises two independent non-executive directors, which does not meet the minimum requirements of the Listing Rules[84] V.G. Post Balance Sheet Events As of this announcement, no material post balance sheet events occurred after June 30, 2025, beyond those disclosed - Except as disclosed in this announcement, the Group has not undertaken any material post balance sheet events from June 30, 2025, up to the date of this announcement[85] V.H. Publication of Interim Results and Report This announcement is published on the HKEX and Company websites; the full interim report for H1 2025 will be dispatched to shareholders and published online - This announcement is published on the HKEX website and the Company's website[86] - The interim report for the six months ended June 30, 2025, containing all Company information, will be dispatched to shareholders and published on the HKEX and the Company's respective websites in due course[86]