玖源集团(00827) - 2025 - 中期业绩

Interim Results Summary This section provides a high-level overview of the Group's financial performance and key highlights for the interim period Financial Summary The Group reported a loss attributable to shareholders of RMB 185.8 million and a 14.1% revenue decrease due to lower product prices Key Financial Indicators for H1 2025 | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | Change (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Loss attributable to shareholders | 185.8 | 129.7 | 56.1 (increase) | 43.25% | | Revenue | 1,100 | 1,280 | (180) (decrease) | -14.06% | | Net cash outflow from operating activities (before changes and interest/tax) | 32.8 | (62.9) (inflow) | (95.7) (decrease) | -152.15% | | Basic loss per share (RMB cents) | 3.08 | 2.15 | 0.93 (increase) | 43.26% | - Revenue decrease was primarily due to lower product selling prices[3] - The directors do not recommend paying any interim dividend[4] Interim Results This section presents the Group's unaudited condensed consolidated financial statements for the interim period Unaudited Condensed Consolidated Statement of Profit or Loss The Group's revenue decreased by 14.1% to RMB 1,099,955 thousand, with gross profit turning into a loss and period loss expanding Condensed Consolidated Statement of Profit or Loss (RMB thousand) | Indicator | For the six months ended June 30, 2025 | For the six months ended June 30, 2024 | | :--- | :--- | :--- | | Revenue | 1,099,955 | 1,279,855 | | Cost of sales | (1,131,957) | (1,200,229) | | Gross profit/(loss) | (32,002) | 79,626 | | Operating profit/(loss) | (112,267) | (5,462) | | Finance costs | (102,629) | (110,385) | | Loss before tax | (214,896) | (115,847) | | Loss for the period | (194,281) | (135,073) | | Loss attributable to owners of the Company | (185,789) | (129,665) | | Basic loss per share (RMB cents) | (3.08) | (2.15) | Condensed Consolidated Statement of Financial Position Total assets decreased, net current liabilities remained high at RMB 3,265,424 thousand, and total equity significantly reduced to RMB 165,304 thousand Condensed Consolidated Statement of Financial Position (RMB thousand) | Indicator | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Assets | | | | Non-current assets | 4,424,935 | 4,401,085 | | Current assets | 431,482 | 1,012,722 | | Total assets | 4,856,417 | 5,413,807 | | Equity | | | | Equity attributable to owners of the Company | 217,430 | 403,219 | | Non-controlling interests | (52,126) | (43,634) | | Total equity | 165,304 | 359,585 | | Liabilities | | | | Non-current liabilities | 994,207 | 788,143 | | Current liabilities | 3,696,906 | 4,266,079 | | Total liabilities | 4,691,113 | 5,054,222 | | Net current liabilities | (3,265,424) | (3,253,357) | Unaudited Condensed Consolidated Statement of Cash Flows Operating cash inflow increased to RMB 177,295 thousand, but investing cash outflow significantly rose due to increased capital expenditures Condensed Consolidated Statement of Cash Flows (RMB thousand) | Indicator | For the six months ended June 30, 2025 | For the six months ended June 30, 2024 | | :--- | :--- | :--- | | Net cash from operating activities | 199,535 | 113,343 | | Interest paid | (22,240) | (35,835) | | Net cash inflow from operating activities | 177,295 | 77,508 | | Net cash outflow from investing activities | (86,871) | (8,299) | | Net cash outflow from financing activities | (69,487) | (79,383) | | Increase/(decrease) in cash and cash equivalents | 20,937 | (10,174) | | Cash and cash equivalents at June 30 | 29,036 | 52,754 | - Significant increase in payments for property, plant and equipment and construction in progress led to a substantial rise in net cash outflow from investing activities[8] Unaudited Consolidated Statement of Changes in Equity Total equity attributable to owners of the Company significantly decreased to RMB 165,304 thousand due to an expanded net loss for the period Consolidated Statement of Changes in Equity (RMB thousand) | Indicator | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Total equity at beginning of period | 359,585 (January 1, 2025) | 911,815 (January 1, 2024) | | Net loss for the period | (194,281) | (135,073) | | Total equity at end of period | 165,304 | 778,606 | Notes to the Financial Statements This section provides detailed explanations and disclosures supporting the Group's interim financial statements 1. Basis of Preparation The Group's core business is chemical production and sales in Mainland China, with financial statements prepared under HKAS 34 and Listing Rules - The Group's principal business is the production and sale of chemical products and chemical fertilizers in Mainland China[10] - The interim financial statements are prepared in accordance with Hong Kong Accounting Standard 34 and Appendix 16 of the Listing Rules of the Stock Exchange[10] 2. Significant Accounting Policies Accounting policies are consistent with 2024, and despite net current liabilities, the going concern basis is adopted due to expected cash flows and loan restructuring - Significant accounting policies remain consistent with the 2024 annual financial statements[11] - The Group had net current liabilities of RMB 3,696,906 thousand as of June 30, 2025[11] - The directors adopted the going concern basis based on the assumption of positive cash flows from Guang'an and Dazhou plants and successful restructuring of bank loans[11] 3. Revenue Revenue, primarily from chemical and fertilizer sales in China, decreased by 14.1% to RMB 1,099,955 thousand, with methanol sales up and others down - Revenue represents the net amount received from the sale of chemical products and chemical fertilizers, after deducting returns, discounts, and value-added tax, primarily from China[13] Revenue by Product Category (RMB thousand) | Product | H1 2025 | % of Total | H1 2024 | % of Total | | :--- | :--- | :--- | :--- | :--- | | Urea | 305,929 | 27.8 | 355,449 | 27.8 | | Ammonia | 324,247 | 29.5 | 431,285 | 33.7 | | Methanol | 468,471 | 42.6 | 419,183 | 32.7 | | NMP | 222 | 0.0 | 2,149 | 0.2 | | DMF | 1,086 | 0.1 | 3,013 | 0.2 | | Others | – | – | 68,776 | 5.4 | | Total | 1,099,955 | 100 | 1,279,855 | 100 | 4. Reconciliation of Loss Before Tax to Cash Generated from Operations Loss before tax was RMB 214,896 thousand, while net cash from operations improved to RMB 199,535 thousand, driven by increased payables Reconciliation of Loss Before Tax to Cash Generated from Operations (RMB thousand) | Indicator | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Loss before tax | (214,896) | (115,847) | | Depreciation of property, plant and equipment | 82,725 | 71,886 | | Interest expense | 102,629 | 110,385 | | Operating cash flow before working capital changes | (32,832) | 62,913 | | Increase/(decrease) in trade and other payables | 154,371 | 210,882 | | Cash generated from operations | 199,555 | 132,569 | | Net cash generated from operations after tax | 199,535 | 113,343 | 5. Taxation No profits tax provision was made for non-PRC entities, while PRC subsidiaries face a 25% rate, with a tax deduction of RMB 20,615 thousand - The Group generated no taxable profits in the Cayman Islands, British Virgin Islands, or Hong Kong, and no provision for profits tax was made[16] - The applicable income tax rate for PRC subsidiaries is 25%[17] Tax Deduction (RMB thousand) | Tax Category | H1 2025 | H1 2024 | | :--- | :--- | :--- | | PRC enterprise income tax | 20 | 26,258 | | Deferred income tax | (20,635) | (7,032) | | Total | (20,615) | 19,226 | 6. Earnings Per Share Basic and diluted loss per share expanded to RMB 3.08 cents, reflecting the increased loss for the period Earnings Per Share (RMB cents) | Indicator | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Loss for the period (RMB thousand) | (185,789) | (129,665) | | Basic loss per share (RMB cents) | (3.08) | (2.15) | | Diluted loss per share (RMB cents) | (3.08) | (2.15) | | Weighted average number of shares for basic earnings per share (thousand shares) | 6,028,043 | 6,028,043 | 7. Dividends The Board does not recommend paying any interim dividend for the six months ended June 30, 2025 - The Board does not recommend paying any interim dividend[20] 8. Trade and Other Receivables Total trade and other receivables decreased to RMB 156,008 thousand, with a typical credit period of zero to three months Trade and Other Receivables (RMB thousand) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Trade receivables | 2,436 | 2,407 | | Prepayments, deposits for purchases and other deposits | 19,888 | 40,658 | | Bills receivable | 1,253 | 21 | | Other receivables | 132,431 | 151,693 | | Total | 156,008 | 194,779 | - The Group generally grants a credit period of zero to three months[21] 9. Trade and Other Payables Total trade and other payables increased to RMB 830,231 thousand, primarily due to a significant rise in accruals and other payables Trade and Other Payables (RMB thousand) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Trade payables | 50,030 | 41,812 | | Payables for construction work | 230,667 | 218,132 | | Accruals and other payables | 549,534 | 342,094 | | Total | 830,231 | 602,038 | Ageing Analysis of Trade Payables (RMB thousand) | Ageing | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Less than one year | 41,646 | 33,428 | | Over one year but not exceeding two years | 8,384 | 8,384 | | Total | 50,030 | 41,812 | 10. Borrowings Total borrowings were RMB 2,165,310 thousand, mostly short-term, secured by fixed assets and deposits, with interest rates from 3.00% to 8.70% Analysis of Borrowings by Repayment Period (RMB thousand) | Repayment Period | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Less than one year | 1,925,926 | 2,720,656 | | One to two years | 128,373 | 74,290 | | Two to five years | 111,011 | – | | Total borrowings | 2,165,310 | 2,794,946 | | Included in current liabilities | (1,925,926) | (2,720,656) | | Included in non-current liabilities | 239,384 | 74,290 | - Borrowings are generally secured by certain fixed assets and pledged bank deposits of the Group[23] - Borrowings bear interest at annual rates ranging from 3.00% to 8.70% (2024: 3.45% to 8.64%)[23] 11. Deferred Income Tax Deferred tax assets increased to RMB 36,834 thousand from recognized losses, while deferred tax liabilities remained at RMB 114,033 thousand Deferred Income Tax Assets (RMB thousand) | Item | Amount | | :--- | :--- | | As of December 31, 2024 | 16,199 | | Recognized in profit or loss | 20,635 | | As of June 30, 2025 | 36,834 | Deferred Income Tax Liabilities (RMB thousand) | Item | Amount | | :--- | :--- | | As of December 31, 2024 | (114,033) | | As of June 30, 2025 | (114,033) | Management Discussion and Analysis This section provides management's perspective on the Group's financial performance, business operations, and future outlook Financial Performance Revenue decreased by 14.1% to RMB 1,100 million due to lower prices, while loss attributable to shareholders expanded to RMB 185.8 million - Revenue was approximately RMB 1,100 million, a 14.1% decrease from the same period last year, primarily due to lower product selling prices[26] - Loss attributable to shareholders was approximately RMB 185.8 million, an increase of RMB 56.1 million from the same period last year, mainly due to a decrease in gross profit margin[26][27] - Total sales volume (excluding trading portion) reached approximately 546,000 tons, a slight increase of approximately 1.3% from the same period last year[26] - Gross profit margin decreased from approximately 6.2% in the same period last year to -2.9%, mainly due to lower product market prices[27] Business Review The Group enhanced efficiency and risk resistance through internal improvements, but operating performance was below expectations due to low product prices - The Group operated actively and steadily, enhancing production efficiency and risk resistance through technological improvements, cost control, and sales model adjustments[28] - In H1 2025, performance in safety, environmental protection, production, consumption, marketing, and cost control all improved further from the historical best levels of 2024[29] - Despite achieving historical best internal results, operating performance was slightly below expectations due to sluggish product selling prices[29] Guang'an Jiuyuan Plant Guang'an Jiuyuan Plant resumed production, improving output and energy consumption, but operating performance was below expectations due to low selling prices - Guang'an Jiuyuan Plant resumed production on January 3, 2025, improving output and energy consumption through technological upgrades and cost control[30] - Despite achieving historical best results, operating performance fell short of expectations due to sluggish finished product selling prices[30] Dazhou Jiuyuan Plant Dazhou Jiuyuan Plant resumed production, achieving good output and energy consumption after overhaul, but operating performance was below expectations - Dazhou Jiuyuan Plant resumed production on February 10, achieving good levels of output and energy consumption through annual overhaul and continuous optimization[31] - Operating performance failed to meet expectations due to sluggish finished product selling prices[31] Guang'an Jiuyuan Electronic Materials Plant The plant was idled due to low demand, but optimization efforts significantly improved DMF stability and NMP capacity, reducing costs - Guang'an Jiuyuan Electronic Materials Plant was idled in the first half due to sluggish market demand[32] - Through equipment optimization and capacity-increasing technical modifications, DMF unit stability and NMP unit capacity were significantly improved, and production costs were effectively reduced[32] Jiangsu Blue Planet Plant The propylene oxide project's main construction is complete, entering commissioning, with an estimated annual new sales revenue of RMB 4 billion - The main construction of Jiangsu Blue Planet Environmental Technology Co., Ltd.'s propylene oxide project is largely complete, entering the commissioning, testing, and procedural stages[33] - After commissioning, this project is expected to generate approximately RMB 4 billion in new annual sales revenue[33] Industry Review and Outlook H1 2025 saw volatile or sluggish markets for DMF, NMP, methanol, synthetic ammonia, and urea, characterized by oversupply and weak demand - In H1 2025, the domestic DMF market showed an 'M'-shaped trend, with overall market levels still below the same period last year, characterized by strong supply and weak demand[34] - The NMP market was sluggish, with mature recycling technology compressing the synthetic liquid market space, leading to severe supply-demand structural mismatch[37] - In H1 2025, the methanol market rose first then fell, dominated by macro-control and supply-demand structure, with ample supply and declining demand in Q2[39] - The synthetic ammonia market showed a trend of initial decline then rise then decline, with increased supply pressure and weak downstream demand[40][41] - The urea market exhibited a phased characteristic of 'initial strength then weakness,' with high supply and weak demand in Q2, leading to volatile downward market trends[43] Dimethylformamide (DMF) DMF market saw an "M"-shaped trend with prices below last year, driven by strong supply, weak demand, and fluctuating seasonal factors - In H1 2025, domestic DMF total capacity was 1.8 million tons (effective capacity 1.5 million tons), with an industry operating rate of 48.5%, and supply of approximately 437,000 tons[34] - The market showed an 'M'-shaped trend, with overall prices lower than the same period last year, and transactions often involved price reductions due to strong supply and weak demand[34] - Demand before the Spring Festival drove prices up, followed by a decline after the holiday due to high prices and increased supply, then a rebound due to destocking and recovering downstream demand, but subsequently faced renewed pressure from high operating rates and reduced demand[35][36] N-Methylpyrrolidone (NMP) NMP market was sluggish due to dominant recycling capacity compressing synthetic liquid space, though prices rose in June due to BDO and waste liquid shortages - In H1 2025, NMP synthetic liquid supply capacity was approximately 1.01 million tons, with a capacity utilization rate of approximately 20%, and recycling capacity approached 2.8 million tons[37] - Recycling has dominated the NMP market, leading to a compression of the synthetic liquid market space[37] - After June, NMP prices significantly increased to their highest point in the first half at RMB 10,200/ton due to rising BDO prices and a shortage of NMP recycling waste liquid[37] Methanol Methanol production increased, but the market saw an initial rise then fall, with ample supply and declining demand in Q2, despite a brief June surge - In H1 2025, domestic methanol production was approximately 42.74 million tons, a 8% year-on-year increase; average operating rate was 81%, a 4% year-on-year increase[38] - The market rose first then fell, with demand increasing in Q1; in Q2, influenced by macro factors, supply was ample while downstream demand declined, and prices bottomed out[39] - In June, influenced by the Middle East conflict, crude oil prices rose, and methanol market prices surged accordingly, but the upward trend lasted only about 10 days before falling back[39] Synthetic Ammonia Synthetic ammonia production increased, but the market saw a decline-rise-decline trend, with increased supply pressure and weak demand in Q2 - In H1 2025, domestic synthetic ammonia production was approximately 30.98 million tons, a 4% year-on-year increase; average industry operating rate was 79%, a 1% year-on-year decrease[40] - The market showed a trend of initial decline then rise then decline, with ample supply in January, firm prices in February due to downstream resumption, and rapid price increases in March due to reduced supply from maintenance units[40] - From April to June, resumed maintenance units increased supply pressure, the downstream phosphate compound fertilizer industry entered the off-season, and operating rates declined, leading to a downward market trend and bottoming out prices[41] Urea Urea production increased, but the market showed an "initial strength then weakness" trend, with high supply, weak demand, and falling prices in Q2 - In H1 2025, domestic urea production was approximately 35.67 million tons, a 10% year-on-year increase; average operating rate was approximately 84%, a 6.7% year-on-year increase[42] - The market exhibited a phased characteristic of 'initial strength then weakness,' with prices rising in Q1 due to strong export expectations and spring farming demand[43] - In Q2, high supply and weak demand led to volatile downward market trends, with export policies falling short of expectations, weak domestic demand, and continuously falling prices[43] Strategies The Group implemented cost reduction and revenue enhancement strategies in H1 and will focus on supply, efficiency, sales, and new projects in H2 for sustainable development - In H1, production and operating costs were reduced through technological transformation and overhaul work, achieving historically low unit production consumption[44][45] - Optimized the full-category bidding model, dynamically adjusted the bidding-to-order ratio, and controlled sales pace to maximize benefits[45] - H2 strategies include: ensuring raw material supply for production, promoting 'increasing revenue and reducing expenditure, cost reduction and efficiency improvement' measures, optimizing performance appraisal and salary reform, and strengthening employee training[45][21] - Implemented sales model optimization, expanded high-quality customer base, developed new types of urea, improved the bidding model, and increased sales of differentiated urea[46] - Prepared for annual equipment overhauls, explored the feasibility of extending overhaul cycles from one year to two years, and reduced spare parts inventory[46] - Promoted new project approval, commencement, and construction, revitalized existing assets, achieved product upgrades, and transitioned from basic chemicals to fine chemicals[48] - Focused on 'two major projects': steam energy-saving renovation and synthetic ammonia energy-saving and carbon reduction renovation, and advanced the introduction of a second natural gas source for the industrial park[48] Liquidity, Financial Resources and Capital Structure This section details the Group's liquidity position, available financial resources, and overall capital structure Liquidity The Group had net current liabilities of RMB 3,265,424 thousand, with current assets and liabilities detailed - As of June 30, 2025, the Group had net current liabilities of approximately RMB 3,265,424 thousand[47] Current Assets and Liabilities as of June 30, 2025 (RMB thousand) | Item | Amount | | :--- | :--- | | Current Assets | | | Cash and bank balances | 29,036 | | Restricted and pledged bank deposits | 60,918 | | Inventories | 185,520 | | Trade and other receivables | 156,008 | | Current Liabilities | | | Borrowings | 1,925,926 | | Amounts due to a related company | 837,257 | | Trade and other payables and other current liabilities | 933,723 | Capital Commitments The Group had outstanding capital commitments of approximately RMB 215,918 thousand as of June 30, 2025 - As of June 30, 2025, the Group had outstanding capital commitments of approximately RMB 215,918 thousand[50] Financial Resources The Group held RMB 29,036 thousand in cash and RMB 60,918 thousand in restricted deposits, with no unutilized credit, planning to fund operations via existing balances and cash flows - As of June 30, 2025, the Group had cash and bank balances of approximately RMB 29,036 thousand and restricted and pledged bank deposits of approximately RMB 60,918 thousand[51] - The Group had no unutilized bank credit facilities[51] - The Company intends to fund future operations through existing bank balances and cash flows from operating activities[51] Gearing Ratio The gearing ratio increased to 94%, up from 88%, indicating a rise in net debt relative to total capital Gearing Ratio | Date | Gearing Ratio | | :--- | :--- | | June 30, 2025 | 94% | | December 31, 2024 | 88% | - The gearing ratio is calculated based on net debt divided by total capital[52] Contingent Liabilities The Group had no significant contingent liabilities as of June 30, 2025 - As of June 30, 2025, the Group had no significant contingent liabilities[53] Other Information This section covers additional disclosures and information not presented elsewhere in the financial report Material Acquisitions/Disposals The Group had no material acquisitions or disposals during the six months ended June 30, 2025 - For the six months ended June 30, 2025, the Group had no material acquisitions or disposals[54] Segment Information No segment information is presented as the Group's operations are primarily in China and within a single business segment - The Group's operations are primarily conducted in China and fall under the same business segment, thus no segment information is presented[55] Details of Future Plans for Material Investments or Capital Assets No other material investment plans exist beyond the disclosed new production lines at Dazhou, Guang'an Chemical, Guang'an Materials, and Jiangsu Plants - Apart from the disclosed plans for three new production lines at Dazhou Plant, Guang'an Chemical Plant, and Guang'an Materials Plant, and the Jiangsu Plant, there are no other material investment plans[56] Employees Information The Group had 709 employees as of June 30, 2025, a decrease from 2024, with most based in China for production - As of June 30, 2025, the Group had a total of 709 employees (2024: 821 employees), with 707 based in China[57] Employee Distribution by Function | Function | June 30, 2025 | 2024 | | :--- | :--- | :--- | | Management | 4 | 3 | | Finance and Administration | 109 | 112 | | Production | 588 | 693 | | Sales and Marketing and R&D | 8 | 13 | | Total | 709 | 821 | Pledge of the Group's Assets Land use rights, buildings, equipment, mining rights, and bank deposits were pledged as collateral for borrowings and bills payable Value of Pledged Assets (RMB thousand) | Asset Category | June 30, 2025 | 2024 | | :--- | :--- | :--- | | Land use rights and buildings | 317,414 | 492,526 | | Plant and machinery | 650,105 | 912,999 | | Mining rights | 334,306 | 334,306 | | Bank deposits | 60,412 | 576,600 | - Fixed assets were pledged as collateral for the Group's borrowings and bills payable[58] Foreign Exchange Risk The Group faces foreign exchange risk from HKD-denominated loans, with management monitoring and considering hedging - The Group faces foreign exchange risk, primarily due to certain loans denominated in HKD[60] - Management monitors foreign exchange risk and considers hedging when necessary[60] Share Option Scheme The Company has 363,992 thousand outstanding share options, with 186,312,259 options still available for grant under the scheme Details of Outstanding Share Options (thousand shares) | Option Category | Held as of January 1, 2025 | Forfeited/Lapsed during the period | Held as of June 30, 2025 | | :--- | :--- | :--- | :--- | | Directors (Shi Jianmin) | 300,000 | – | 300,000 | | Employees | 78,812 | (14,820) | 63,992 | | Total | 378,812 | (14,820) | 363,992 | - Exercise price for Option A is HKD 0.151, Option B is HKD 0.141, and Option C is HKD 0.182[61] - As of June 30, 2025, 186,312,259 share options remained available for grant under the share option scheme adopted on October 23, 2020[62] Outstanding Convertible Securities The Company has one outstanding convertible security, convertible into 7,700,000 thousand shares, which would significantly increase Mr. Tang Kwok Keung's shareholding Details of Outstanding Convertible Securities | Maturity Date | Conversion Price (HKD) | Number of Shares Convertible (thousand shares) | Redeemability | | :--- | :--- | :--- | :--- | | November 29, 2026 | 0.108 | 7,700,000 | None | Shareholding Structure Before and After Conversion of Outstanding Convertible Securities (Approximate) | Shareholder | Number of Shares Before Conversion | Percentage Before Conversion | Number of Shares After Conversion | Percentage After Conversion | | :--- | :--- | :--- | :--- | :--- | | Mr. Tang Kwok Keung | 169,800,000 | 2.82% | 7,869,800,000 | 57.33% | | Mr. Shi Jianmin | 107,000,000 | 1.78% | 107,000,000 | 0.78% | | Mr. Zhang Weihua | 500,000,000 | 8.29% | 500,000,000 | 3.64% | | Public Shareholders | 5,251,242,599 | 87.11% | 5,251,242,599 | 38.25% | | Total | 6,028,042,599 | 100.00% | 13,728,042,599 | 100.00% | - Assuming full conversion of all outstanding convertible securities, Mr. Tang Kwok Keung's shareholding would significantly increase[65] Directors' Interests in the Company As of June 30, 2025, Mr. Tang Kwok Keung, Mr. Shi Jianmin, and Mr. Zhang Weihua held long positions in the Company's shares and underlying shares Directors' Long Positions in Shares and Underlying Shares of the Company | Director | Long Position in Shares (Beneficial Owner) | Long Position in Share Options and Convertible Bonds (Beneficial Owner) | Total Long Position in Shares and Underlying Shares | Interest in Issued Share Capital | | :--- | :--- | :--- | :--- | :--- | | Mr. Tang Kwok Keung | 169,800,000 | 7,700,000,000 | 7,869,800,000 | 130.55% | | Mr. Shi Jianmin | 107,000,000 | 300,000,000 | 407,000,000 | 6.75% | | Mr. Zhang Weihua | 500,000,000 | – | 500,000,000 | 8.29% | - Mr. Tang Kwok Keung holds certain shares through his wholly-owned Coherent Gallery International Limited[67] - Mr. Zhang Weihua indirectly owns certain shares through Jiangsu Kangtai Holding Group Co., Ltd[67] Substantial Shareholders' Interests in the Company No other substantial shareholders' interests or short positions are known, apart from the disclosed directors' interests - Save for the disclosed directors' interests, the Company is not aware of any other persons having interests or short positions in the shares or underlying shares that would be required to be disclosed to the Company and the Stock Exchange under Part XV of the Securities and Futures Ordinance[68] Other Persons' Interests in the Company No other persons are known to hold 5% or more voting rights in the Company's share capital, apart from disclosed directors' interests - Save for the disclosed directors' interests, the Company is not aware of any other persons having interests of 5% or more in any class of share capital carrying voting rights at general meetings of the Company in all circumstances[69] Directors' Interests in Competing Business No directors, management shareholders, or their associates held interests in competing businesses during the review period - During the review period, none of the Company's directors or management shareholders and their associates had any interests in businesses that compete or are likely to compete with the Company's business[70] Going Concern and Mitigation Measures The Group faces bank litigations but has implemented measures to improve liquidity and restructured most bank loans - The Group is involved in certain litigations with banks and has taken multiple measures to improve its liquidity and financial position[71] - The Group has been negotiating with banks to renew or restructure loans, and most bank loans have been restructured[71] Code for Securities Transactions by Directors The Company adopted and all directors complied with a code for securities transactions no less exacting than the required standard - The Company has adopted a code for securities transactions by directors no less exacting than the required standard[72] - The Company is not aware of any non-compliance by any director with the required standard for securities transactions and the code for securities transactions by directors[72] Purchase, Sale or Redemption of Shares Neither the Company nor its subsidiaries purchased, sold, or redeemed any listed shares during the review period - During the review period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed shares[73] Events After Reporting Period No material events occurred after the reporting period end and up to the approval date of this announcement - There were no material events concerning the Group after the end of the reporting period and up to the date of approval of this announcement[74] Audit Committee The Audit Committee reviewed the interim financial statements and discussed internal controls and financial reporting with management - The Audit Committee reviewed the Company's and the Group's unaudited interim financial statements for the six months ended June 30, 2025[76] - The Audit Committee comprises three independent non-executive directors: Mr. Xu Congcai, Mr. Le Yiren, and Ms. Lu Yi[75] Corporate Governance The Company has taken appropriate actions and complied with the Corporate Governance Code provisions in Appendix 14 of the Listing Rules - The Company has taken appropriate actions to comply with the Corporate Governance Code contained in Appendix 14 of the Listing Rules[77] - The Group has complied with the code provisions contained therein[77]