中国口腔产业(08406) - 2025 - 中期业绩

Company Information The company's profile includes its board composition, contact details, and listing information on the HKEX GEM Board of Directors and Committee Composition The board comprises three executive and four independent non-executive directors, and committee memberships have changed - The board includes three executive directors (Ms. Yan Ping, Mr. Liu Yaoguang, Mr. Xiao Jiansheng) and four independent non-executive directors (Ms. Deng Xin, Ms. Lian Jingyu, Ms. Jiang Caiying, Mr. Geng Chuanlong)[12] - Ms. Shen Jindan was removed as an independent non-executive director and a member of the audit and nomination committees on June 6, 2025[12] - Mr. Geng Chuanlong was appointed as an independent non-executive director and a member of the audit, remuneration, and nomination committees on August 29, 2025[12] Company Contact and Listing Information The company is registered in the Cayman Islands, with main operations in China and Hong Kong, audited by Union Power CPA Limited, and listed on HKEX GEM with stock code 8406 - The company is registered in the Cayman Islands, with its principal place of business in Hong Kong at Unit 304, 3/F, Tung Wai Commercial Building, 43 Queen's Road East, Hong Kong[13] - The auditor is Union Power CPA Limited[13] - The company is listed on the GEM of The Stock Exchange of Hong Kong Limited, stock code 8406[14] Unaudited Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income This section presents the unaudited condensed consolidated statement of profit or loss and other comprehensive income for the period Profit or Loss and Comprehensive Income Overview For the six months ended June 30, 2025, revenue decreased by 12.4% to RMB 109,263 thousand, but profit for the period significantly increased by 362.4% to RMB 4,069 thousand, driven by higher other income and lower finance costs Key Profit or Loss Data (Six Months Ended June 30) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 109,263 | 124,660 | -12.4% | | Cost of sales | (90,141) | (101,256) | -11.0% | | Gross profit | 19,122 | 23,404 | -18.3% | | Other income and gains | 6,895 | 1,254 | +449.8% | | Distribution and selling expenses | (7,516) | (12,483) | -39.8% | | Administrative expenses | (12,079) | (10,466) | +15.4% | | Finance costs | (72) | (558) | -87.1% | | Profit before tax | 6,350 | 1,151 | +451.7% | | Income tax expense | (2,281) | (271) | +741.7% | | Profit for the period | 4,069 | 880 | +362.4% | | Total comprehensive income for the period | 3,293 | 1,842 | +78.8% | | Basic earnings per share (RMB cents) | 0.30 | 0.08 | +275.0% | - Profit for the period significantly increased by 362.4%, primarily driven by a substantial increase in other income and gains (+449.8%) and a significant reduction in finance costs (-87.1%)[15] Unaudited Condensed Consolidated Statement of Financial Position This section presents the unaudited condensed consolidated statement of financial position, detailing assets, liabilities, and equity Balance Sheet Overview As of June 30, 2025, total assets slightly decreased, but net current assets and net assets significantly increased, reflecting improved liquidity and growth in shareholders' equity Key Financial Position Data (As of June 30) | Indicator | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Non-current assets | 11,710 | 11,934 | -224 | -1.9% | | Current assets | 182,404 | 190,525 | -8,121 | -4.3% | | Total assets | 194,114 | 202,459 | -8,345 | -4.1% | | Current liabilities | 51,155 | 91,763 | -40,608 | -44.2% | | Non-current liabilities | 3,358 | 3,558 | -200 | -5.6% | | Net assets | 139,601 | 107,138 | +32,463 | +30.3% | | Share capital | 12,180 | 10,059 | +2,121 | +21.1% | | Reserves | 127,421 | 97,079 | +30,342 | +31.2% | | Total equity | 139,601 | 107,138 | +32,463 | +30.3% | - Current liabilities significantly decreased by 44.2%, leading to a substantial improvement in liquidity, with net current assets increasing from RMB 98,762 thousand to RMB 131,249 thousand[17] - Net assets and total equity both increased by over 30%, primarily due to increases in share capital and reserves[17] Unaudited Condensed Consolidated Statement of Changes in Equity This section presents the unaudited condensed consolidated statement of changes in equity, outlining movements in share capital and reserves Analysis of Changes in Equity For the six months ended June 30, 2025, total equity increased to RMB 139,601 thousand, mainly due to increased share capital and share premium from share issuance, and profit for the period, despite a decrease in foreign currency translation reserve Key Equity Movement Data (Six Months Ended June 30) | Indicator | January 1, 2025 (RMB thousands) | Share Issue (RMB thousands) | Profit for the Period (RMB thousands) | Other Comprehensive Expense (RMB thousands) | June 30, 2025 (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | :--- | | Share capital | 10,059 | 2,121 | – | – | 12,180 | | Share premium | 79,109 | 27,572 | – | – | 106,681 | | Statutory reserve | 9,567 | (523) | – | – | 9,044 | | Foreign currency translation reserve | 2,499 | – | – | (776) | 1,723 | | Retained profits | (11,525) | – | 4,069 | – | (7,456) | | Total equity | 107,138 | 29,693 | 4,069 | (776) | 139,601 | - Share issuance contributed RMB 29,693 thousand to the increase in equity, serving as the primary driver for this period's equity growth[19] - Profit for the period contributed RMB 4,069 thousand, but foreign currency translation reserve decreased by RMB 776 thousand due to exchange differences[19] Unaudited Condensed Consolidated Statement of Cash Flows This section presents the unaudited condensed consolidated statement of cash flows, summarizing cash movements from operating, investing, and financing activities Cash Flow Overview For the six months ended June 30, 2025, the company experienced a net cash outflow from operating activities of RMB 21,430 thousand, but positive cash flows from investing and financing activities resulted in a net increase in cash and cash equivalents of RMB 18,497 thousand, with a period-end cash balance of RMB 74,766 thousand Key Cash Flow Data (Six Months Ended June 30) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (RMB thousands) | | :--- | :--- | :--- | :--- | | Net cash (used in) / generated from operating activities | (21,430) | 2,291 | -23,721 | | Net cash generated from investing activities | 12,623 | 16,850 | -4,227 | | Net cash generated from / (used in) financing activities | 27,304 | (4,387) | +31,691 | | Net increase in cash and cash equivalents | 18,497 | 14,754 | +3,743 | | Cash and cash equivalents at end of period | 74,766 | 72,039 | +2,727 | - Net cash flow from operating activities shifted from a net inflow in the prior period to a net outflow of RMB 21,430 thousand, primarily due to changes in working capital[20] - Net cash inflow from financing activities amounted to RMB 27,304 thousand, mainly from proceeds of share issuance, significantly improving the overall cash position[20] Notes to the Unaudited Condensed Consolidated Financial Statements This section provides detailed notes to the unaudited condensed consolidated financial statements, covering various accounting policies and disclosures 1. General Information China Oral Industry Group Holdings Limited was incorporated in the Cayman Islands in 2015, listed on HKEX GEM in 2017, and primarily engages in inflatable product manufacturing and sales, dental clinic services, dental product sales, and yarn and polyester fiber sales in China - The company was incorporated in the Cayman Islands on November 3, 2015, and listed on the GEM of The Stock Exchange of Hong Kong Limited on December 7, 2017[21][22] - The Group's principal activities include the manufacture and sale of inflatable products, provision of dental clinic services and sale of dental-related products, and sale of yarn and polyester fiber[23] - The company's functional currency is HKD, but the condensed consolidated financial statements are presented in RMB due to its principal operations being in China[23] 2. Basis of Presentation These interim financial statements are prepared in accordance with Hong Kong Financial Reporting Standards, using the historical cost convention, and the HKAS 21 amendment "Lack of Exchangeability" was first applied this period with no material impact - The unaudited condensed consolidated financial statements are prepared in accordance with Hong Kong Financial Reporting Standards and the historical cost convention[24][25] - The amendment to HKAS 21 "Lack of Exchangeability" was first applied in the current period but had no material impact on the Group's results and financial position for the current and prior periods[25] 3. Estimates Management is required to make estimates and assumptions regarding the carrying amounts of assets and liabilities when preparing financial statements, which are continuously reviewed, and significant judgments and uncertainties made this period are consistent with the prior year - Management is required to make estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources, and these are continuously reviewed[26] - The key sources of significant judgment and estimation uncertainty made in the current period are the same as those applied to the consolidated financial statements for the year ended December 31, 2024[26] 4. Financial Risk Management and Financial Instruments The Group faces interest rate, credit, and liquidity risks, but there have been no significant changes in risk management policies or liquidity management practices since the last year-end, and the carrying amounts of receivables and payables approximate their fair values - The Group is exposed to interest rate risk, credit risk, and liquidity risk[27] - There have been no significant changes in risk management policies or liquidity management policies since the year-end[28][29] - The carrying amounts of trade and other receivables and payables approximate their fair values[30] 5. Segment Information The Group's business is divided into three segments: inflatable products, dental clinics, and yarn and polyester. As of June 30, 2025, inflatable products remain the primary revenue source, but dental clinic and yarn and polyester businesses have shown increased revenue and performance contributions, with a significant improvement in the gross margin of the yarn and polyester business - The Group's business is divided into three segments: inflatable products business, dental clinic business, and yarn and polyester business[32] Segment Revenue and Results (Six Months Ended June 30) | Segment | 2025 Revenue (RMB thousands) | 2024 Revenue (RMB thousands) | Revenue Change (%) | 2025 Results (RMB thousands) | 2024 Results (RMB thousands) | Results Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Inflatable products business | 80,872 | 103,565 | -21.9% | 7,048 | (240) | N/A | | Dental clinic business | 7,202 | 7,092 | +1.55% | 1,499 | 1,602 | -6.5% | | Yarn and polyester business | 21,189 | 14,003 | +51.3% | 1,615 | 355 | +354.9% | | Total | 109,263 | 124,660 | -12.4% | 10,162 | 1,717 | +491.8% | Segment Assets and Liabilities (As of June 30) | Segment | 2025 Assets (RMB thousands) | 2024 Assets (RMB thousands) | Assets Change (%) | 2025 Liabilities (RMB thousands) | 2024 Liabilities (RMB thousands) | Liabilities Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Inflatable products business | 50,281 | 69,701 | -27.9% | 21,164 | 53,222 | -60.2% | | Dental clinic business | 33,103 | 33,640 | -1.6% | 6,250 | 8,467 | -26.2% | | Yarn and polyester business | 28,008 | 31,578 | -11.3% | 6,505 | 10,203 | -36.2% | | Consolidated assets | 194,114 | 202,459 | -4.1% | 54,513 | 95,321 | -42.8% | Geographical Information All of the Group's operations and non-current assets (excluding goodwill) are located in China and Hong Kong, with revenue widely distributed across China, North America, Asia, Europe, Australia and Oceania, the Middle East, and Central and South America, with North America and Asia being significant markets - All of the Group's operations and non-current assets (excluding goodwill) are located in China and Hong Kong, thus no geographical analysis is presented[37] Revenue by Geographical Segment (Six Months Ended June 30) | Region | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | China | 31,462 | 30,651 | +811 | +2.6% | | Europe | 5,688 | 5,637 | +51 | +0.9% | | Australia and Oceania | 702 | 817 | -115 | -14.1% | | North America | 45,837 | 78,594 | -32,757 | -41.7% | | Asia | 24,679 | 7,600 | +17,079 | +224.7% | | Middle East | 600 | 248 | +352 | +141.9% | | Central and South America | 295 | 1,113 | -818 | -73.5% | | Total | 109,263 | 124,660 | -15,397 | -12.4% | 6. Revenue For the six months ended June 30, 2025, total revenue decreased by 12.4% year-on-year, with inflatable product sales revenue down 21.9%, but yarn and polyester sales revenue significantly increased by 51.3%, and dental clinic service revenue slightly rose by 1.55% Revenue from External Customers (Six Months Ended June 30) | Revenue Source | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Sale of inflatable products and related accessories | 79,698 | 103,126 | -23,428 | -22.7% | | Subcontracting income | 1,174 | 439 | +735 | +167.4% | | Provision of dental clinic services | 7,202 | 7,092 | +110 | +1.55% | | Sale of yarn and polyester | 21,189 | 14,003 | +7,186 | +51.3% | | Total | 109,263 | 124,660 | -15,397 | -12.4% | - The decrease in inflatable product sales revenue was the primary reason for the reduction in total revenue, partially offset by strong growth in yarn and polyester sales revenue[39] 7. Other Income or Gains Total other income and gains for the period significantly increased by 449.8% to RMB 6,895 thousand, primarily due to a net gain of RMB 6,551 thousand from the disposal of assets and liabilities classified as held for sale Other Income or Gains (Six Months Ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Interest income from bank deposits | 272 | 263 | +9 | +3.4% | | Net exchange gain | – | 901 | -901 | -100.0% | | Grants and subsidies | 72 | 81 | -9 | -11.1% | | Net gain on disposal of assets and liabilities classified as held for sale | 6,551 | – | +6,551 | N/A | | Others | – | 9 | -9 | -100.0% | | Total | 6,895 | 1,254 | +5,641 | +449.8% | - A net gain of RMB 6,551 thousand from the disposal of assets and liabilities classified as held for sale was the main reason for the substantial increase in other income and gains this period[41] 8. Finance Costs Finance costs for the period significantly decreased by 87.1% to RMB 72 thousand, primarily due to reductions in interest on lease liabilities and bank borrowings Finance Costs (Six Months Ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Interest on lease liabilities | 72 | 417 | -345 | -82.7% | | Interest on bank borrowings | – | 141 | -141 | -100.0% | | Total | 72 | 558 | -486 | -87.1% | - A reduction of RMB 345 thousand in interest on lease liabilities and RMB 141 thousand in interest on bank borrowings collectively led to a significant decrease in finance costs[42] 9. Income Tax Expense Income tax expense for the period significantly increased by 741.7% to RMB 2,281 thousand, primarily due to higher PRC enterprise income tax and Hong Kong profits tax, reflecting improved profitability Income Tax Expense (Six Months Ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Hong Kong profits tax | 600 | 211 | +389 | +184.4% | | PRC enterprise income tax | 1,681 | 60 | +1,621 | +2701.7% | | Deferred tax | – | – | – | N/A | | Total | 2,281 | 271 | +2,010 | +741.7% | - PRC subsidiaries are subject to enterprise income tax at a rate of 25%, while Hong Kong profits tax applies a two-tiered tax rate (8.25% and 16.5%)[43][44] 10. Profit for the Period Profit for the period was RMB 4,069 thousand, a substantial increase of 362.4% from RMB 880 thousand in the prior period, mainly due to the combined effect of increased other income and reduced finance costs Profit for the Period and Key Deductions (Six Months Ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Profit for the period | 4,069 | 880 | +3,189 | +362.4% | | Cost of inventories recognized as expense | 88,231 | 101,256 | -13,025 | -12.9% | | Depreciation of property, plant and equipment | 218 | 344 | -126 | -36.6% | | Depreciation of right-of-use assets | 621 | 541 | +80 | +14.8% | | Amortization of intangible assets | 1 | – | +1 | N/A | | Net exchange loss | 1,075 | – | +1,075 | N/A | | Total employee benefit expenses | 24,194 | 26,096 | -1,902 | -7.3% | - Total employee benefit expenses (including directors' emoluments) decreased by 7.3% to RMB 24,194 thousand[46] 11. Earnings Per Share For the six months ended June 30, 2025, both basic and diluted earnings per share were RMB 0.30 cents, a significant increase of 275% from RMB 0.08 cents in the prior period, reflecting a substantial improvement in the company's profitability Earnings Per Share (Six Months Ended June 30) | Indicator | 2025 (RMB cents) | 2024 (RMB cents) | Change (RMB cents) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Basic earnings per share | 0.30 | 0.08 | +0.22 | +275.0% | | Diluted earnings per share | 0.30 | 0.08 | +0.22 | +275.0% | - The weighted average number of ordinary shares used to calculate basic earnings per share was 1,339,028 thousand shares, an increase from the prior period[47] 12. Dividends The Board does not recommend the payment of any interim dividend for the six months ended June 30, 2025, consistent with the prior period - The Board does not recommend the payment of any interim dividend for the six months ended June 30, 2025 (2024: nil)[48] 13. Property, Plant and Equipment As of June 30, 2025, the carrying amount of property, plant and equipment was RMB 1,583 thousand, a decrease from RMB 1,787 thousand as of December 31, 2024, primarily due to depreciation expense Carrying Amount of Property, Plant and Equipment (As of June 30) | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Total carrying amount | 1,583 | 1,787 | -204 | -11.4% | - Total depreciation expense for the period amounted to RMB 218 thousand[49] 14. Intangible Assets During the period, the Group paid approximately RMB 35 thousand for the acquisition of intangible assets, with no such expenditure in the prior period - During the period, the Group paid approximately RMB 35 thousand for the acquisition of intangible assets (2024: nil)[50] 15. Trade Receivables As of June 30, 2025, total trade receivables amounted to RMB 48,096 thousand, an increase of 42.4% from December 31, 2024, mainly due to increased receivables from the inflatable products and yarn and polyester businesses Trade Receivables (Net of Loss Allowance) (As of June 30) | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Inflatable products business | 27,850 | 15,235 | +12,615 | +82.8% | | Dental clinic business | 10,436 | 13,937 | -3,501 | -25.1% | | Yarn and polyester business | 11,844 | 6,641 | +5,203 | +78.3% | | Loss allowance | (2,034) | (2,038) | +4 | -0.2% | | Total | 48,096 | 33,775 | +14,321 | +42.4% | Ageing Analysis of Trade Receivables (As of June 30) | Ageing | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | 0–30 days | 8,217 | 20,537 | | 31–60 days | 15,497 | 3,932 | | 61–90 days | 11,366 | 1,821 | | 91–120 days | 5,808 | 4,080 | | 121–365 days | 7,208 | 3,405 | | Total | 48,096 | 33,775 | - Credit terms generally range from 0 to 270 days, and no interest is charged on overdue receivables[51] 16. Trade and Other Payables As of June 30, 2025, total trade and other payables amounted to RMB 32,258 thousand, a significant decrease of 33.4% from December 31, 2024, primarily due to reductions in trade payables, accrued salaries and other benefits, refund liabilities, and other payables Trade and Other Payables (As of June 30) | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Trade payables | 10,232 | 16,090 | -5,858 | -36.4% | | Accrued salaries and other benefits | 9,600 | 10,890 | -1,290 | -11.8% | | Deposits received for assets and liabilities classified as held for sale | – | 1,000 | -1,000 | -100.0% | | Refund liabilities | – | 3,363 | -3,363 | -100.0% | | Other payables and accrued expenses | 12,426 | 17,072 | -4,646 | -27.2% | | Total | 32,258 | 48,415 | -16,157 | -33.4% | Ageing Analysis of Trade Payables (As of June 30) | Ageing | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | 0–30 days | 4,365 | 9,145 | | 31–60 days | 1,696 | 3,682 | | 61–90 days | 1,366 | 1,693 | | 91–120 days | 2,104 | 881 | | 121–365 days | 655 | 454 | | Over 365 days | 46 | 235 | | Total | 10,232 | 16,090 | 17. Share Capital As of June 30, 2025, the company's issued share capital increased to 1,368,000 thousand shares, with a share capital amount of RMB 12,180 thousand, primarily due to the issuance of 228,000,000 ordinary shares on January 24, 2025 Share Capital Details (As of June 30) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Number of authorized ordinary shares (thousands) | 2,000,000 | 2,000,000 | | Number of issued and fully paid ordinary shares (thousands) | 1,368,000 | 1,140,000 | | Share capital (RMB thousands) | 12,180 | 10,059 | - On January 24, 2025, the company issued 228,000,000 ordinary shares to subscribers at an issue price of HKD 0.14 per share, raising net proceeds of approximately HKD 31,720,000[54] Management Discussion and Analysis This section provides management's review and analysis of the company's business operations and financial performance for the period Business Review and Outlook Established in 2003, the Group has 20 years of experience in inflatable product design, manufacturing, and sales, and since 2023, it has diversified into dental clinic services and yarn and polyester sales through acquisitions - The Group was established in 2003 and has 20 years of experience in the design, manufacture, and sale of inflatable products[56] - In January 2023, the Group expanded into dental clinic services and dental-related product sales through the acquisition of Hong Kong Shengke Holdings Limited[57] - In January 2024, the Group expanded into yarn and polyester sales through the acquisition of Hong Kong Taixing Holdings Limited[57] Financial Review Total revenue for the period decreased by 12.4% year-on-year, but profit for the period significantly increased by 362.4%, primarily due to a substantial increase in other income and a reduction in finance costs, despite a slight decrease in gross margin - The Group's revenue for the period was approximately RMB 109,263 thousand, a 12.4% decrease compared to the corresponding period in 2024[58] - Profit for the period was approximately RMB 4,069 thousand, representing a 362.4% increase compared to the corresponding period in 2024[65] Revenue Total revenue for the period decreased by 12.4%, with inflatable product sales revenue down 21.9%, but yarn and polyester sales revenue significantly increased by 51.3%, and dental clinic service revenue slightly rose by 1.55% Revenue Changes by Business Segment (Six Months Ended June 30) | Business | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Inflatable products and related accessories | 80,872 | 103,565 | -22,693 | -21.9% | | Dental clinic services | 7,202 | 7,092 | +110 | +1.55% | | Yarn and polyester fiber | 21,189 | 14,003 | +7,186 | +51.3% | | Total revenue | 109,263 | 124,660 | -15,397 | -12.4% | Cost of Sales Cost of sales for the period was approximately RMB 90,141 thousand, a decrease of 11.0% from the prior period, consistent with the downward trend in revenue Cost of Sales Changes (Six Months Ended June 30) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Cost of sales | 90,141 | 101,256 | -11,115 | -11.0% | Gross Profit and Gross Margin Gross profit for the period decreased by 18.3% to RMB 19,122 thousand, with an overall gross margin of 17.5%, down 1.3 percentage points from the prior period, mainly due to slight decreases in gross margins for inflatable products and dental clinic businesses, but a significant improvement in the yarn and polyester business Gross Profit and Gross Margin Changes (Six Months Ended June 30) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Gross profit | 19,122 | 23,404 | -4,282 | -18.3% | | Overall gross margin | 17.5% | 18.8% | -1.3% | N/A | Gross Margin by Business Segment (Six Months Ended June 30) | Business | 2025 Gross Margin | 2024 Gross Margin | Change (percentage points) | | :--- | :--- | :--- | :--- | | Inflatable products business | 17.1% | 18.9% | -1.8% | | Dental clinic business | 42.0% | 43.1% | -1.1% | | Yarn and polyester sales business | 10.8% | 5.83% | +4.97% | Other Income and Gains Total other income and gains for the period significantly increased by 449.8% to RMB 6,895 thousand, primarily due to a net gain of RMB 6,551 thousand from the disposal of assets and liabilities classified as held for sale Other Income and Gains Changes (Six Months Ended June 30) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Total other income and gains | 6,895 | 1,254 | +5,641 | +449.8% | - The increase was mainly due to a net gain of approximately RMB 6,551 thousand from the disposal of assets and liabilities classified as held for sale, partially offset by the absence of a net foreign exchange gain of approximately RMB 901 thousand[61] Distribution and Selling Expenses Total distribution and selling expenses for the period decreased by 39.8% to RMB 7,516 thousand Distribution and Selling Expenses Changes (Six Months Ended June 30) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Distribution and selling expenses | 7,516 | 12,483 | -4,967 | -39.8% | Administrative Expenses Administrative expenses for the period increased by 15.4% to RMB 12,079 thousand Administrative Expenses Changes (Six Months Ended June 30) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Administrative expenses | 12,079 | 10,466 | +1,613 | +15.4% | Finance Costs Finance costs for the period significantly decreased by 87.1% to RMB 72 thousand, primarily due to reductions in interest on lease liabilities and bank borrowings Finance Costs Changes (Six Months Ended June 30) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Finance costs | 72 | 558 | -486 | -87.1% | - The decrease was mainly due to a reduction of approximately RMB 345 thousand in interest on lease liabilities and approximately RMB 141 thousand in interest on bank borrowings[64] Profit for the Period Profit for the period significantly increased by 362.4% to RMB 4,069 thousand Profit for the Period Changes (Six Months Ended June 30) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Profit for the period | 4,069 | 880 | +3,189 | +362.4% | Dividends The Board does not recommend the payment of any interim dividend for this period, consistent with the prior period - The Board does not recommend the payment of any interim dividend for this period (2024: nil)[66] Liquidity, Financial Resources, Capital Structure and Gearing Ratio As of June 30, 2025, the Group's current ratio and quick ratio both significantly improved, and the gearing ratio remained low, indicating a sound financial position Liquidity and Capital Structure Indicators (As of June 30) | Indicator | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Total equity attributable to owners of the Company (RMB thousands) | 139,259 | 107,138 | +32,121 | | Current ratio | 3.57 | 2.08 | +1.49 | | Quick ratio | 2.08 | 1.43 | +0.65 | | Bank borrowings (RMB thousands) | 676 | 676 | 0 | | Gearing ratio | 0.5% | 0.6% | -0.1% | - The Directors believe that the Group's financial position is sound, enabling it to expand its core businesses and achieve its business objectives[67] Material Investments Held, Material Acquisitions and Disposals of Subsidiaries, Associates and Joint Ventures, and Future Plans for Material Investments or Capital Assets During the period, the Group had no other material investments, material acquisitions, or disposals of subsidiaries or associates - During the period, the Group had no other material investments, material acquisitions, or disposals of subsidiaries or associates[68] Contingent Liabilities As of June 30, 2025, the Group had no material contingent liabilities - As of June 30, 2025, the Group had no material contingent liabilities (December 31, 2024: nil)[69] Pledge of Assets As of June 30, 2025, the Group had not pledged any assets for bank borrowings or other purposes - As of June 30, 2025, the Group had not pledged any assets for bank borrowings or other purposes (December 31, 2024: nil)[70] Commitments As of June 30, 2025, the company had no contractual commitments for the acquisition of property, plant and equipment - As of June 30, 2025, the company had no contractual commitments for the acquisition of property, plant and equipment (December 31, 2024: nil)[71] Events After the Reporting Period On August 8, 2025, the company proposed to create 3,000,000,000 new shares, increasing the authorized share capital to HKD 50,000,000, and to terminate the old share option scheme and adopt a new one, with related matters to be considered at an EGM - On August 8, 2025, the company proposed to create an additional 3,000,000,000 new shares, increasing the authorized share capital from HKD 20,000,000 to HKD 50,000,000[72] - The company also proposed to terminate the 2017 Share Option Scheme and adopt a new share option scheme[72] - Related matters are scheduled for consideration at an Extraordinary General Meeting to be held on August 29, 2025[72] Foreign Exchange Risk The Group faces exchange rate fluctuation risk between RMB and USD, as most revenue is USD-denominated while costs are RMB-denominated. Currently, there is no formal foreign exchange hedging policy, and RMB non-convertibility limits hedging capabilities - Most of the Group's revenue is denominated in USD, while product costs are denominated in RMB, so fluctuations in the RMB to USD exchange rate could significantly impact results[73] - The Group currently has no formal foreign exchange hedging policy, and the non-convertibility of RMB limits its ability to mitigate foreign exchange risk[73] Treasury Policy The Group's credit risk primarily arises from trade receivables and bank deposits, which is mitigated by transacting with customers and banks with good credit records, and no bad debt provisions were recognized this period - Credit risk primarily arises from trade receivables and bank deposits, and the Group adopts a policy of transacting with customers with good payment track records and reputable banks[74] - No bad debt provisions were recognized for the six months ended June 30, 2025, and 2024[74] Employees and Remuneration Policy As of June 30, 2025, the Group had 551 full-time employees, with total employee remuneration of RMB 24,194 thousand, providing various benefits and potentially granting share options - As of June 30, 2025, the Group had 551 full-time employees (December 31, 2024: 544), with most located in China[75] Employee Remuneration (Six Months Ended June 30) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Total employee remuneration | 24,194 | 26,096 | -1,902 | -7.3% | - The Group provides employees with discretionary bonuses, social insurance, housing provident fund, and MPF contributions, and may grant share options[75] Use of Proceeds from Share Subscription On January 24, 2025, the company completed a share subscription, raising net proceeds of approximately HKD 31,720,000, of which HKD 11,720,000 has been used for general working capital, and the remaining HKD 20,000,000 is planned for identifying potential acquisition or investment opportunities - On January 24, 2025, the company issued 228,000,000 ordinary shares, raising net proceeds of approximately HKD 31,720,000[76] Use of Proceeds (As of June 30, 2025) | Planned Use | Net Proceeds (HKD millions) | Utilized (HKD millions) | Unutilized (HKD millions) | | :--- | :--- | :--- | :--- | | Identifying potential acquisition or investment opportunities | 20 | – | 20 | | General working capital | 11.72 | 11.72 | – | | Total | 31.72 | 11.72 | 20 | Corporate Governance and Other Information This section details the company's corporate governance practices, directors' interests, and other relevant information Directors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares and Debentures of the Company and its Associated Corporations As of June 30, 2025, Ms. Yan Ping, Chairperson and Executive Director, held 31.04% of the company's shares through a controlled corporation, with no other directors or chief executives disclosing significant interests Directors' and Chief Executive's Long Positions in Ordinary Shares of the Company (As of June 30, 2025) | Name of Director / Chief Executive | Capacity / Nature of Interest | Number of Shares | Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Ms. Yan Ping | Interest in controlled corporation | 424,560,000 | 31.04% | - Ms. Yan Ping beneficially owns the entire issued share capital of RISEN THRIVE LIMITED and is deemed to be interested in all shares held by it[83] - Save for Ms. Yan Ping, no other directors or chief executives had any disclosable interests or short positions in the shares, underlying shares, or debentures of the company or any associated corporation[79] Substantial Shareholders' and Other Shareholders' Interests and Short Positions in Shares and Underlying Shares of the Company As of June 30, 2025, to the best knowledge of the directors, no other persons or corporations, apart from the directors and chief executives, held disclosable interests or short positions of 5% or more in the company's issued share capital - As of June 30, 2025, save for the directors or chief executives of the company, no other persons or corporations had any interests or short positions in the shares and underlying shares of the company which would fall to be disclosed to the company under the provisions of Divisions 2 and 3 of Part XV of the Securities and Futures Ordinance or were directly or indirectly beneficially interested in 5% or more of the issued share capital of the company[80] Share Option Scheme The company adopted a share option scheme in 2017 to reward and retain talent. On June 6, 2025, a total of 80,000,000 share options were granted to eleven grantees at an exercise price of HKD 0.095 per share, with executive directors Ms. Yan Ping and Mr. Liu Yaoguang receiving 1,300,000 and 7,200,000 options, respectively - The company conditionally adopted a share option scheme on November 15, 2017, aiming to provide additional incentives and attract and retain talent[81] - On June 6, 2025, a total of 80,000,000 share options were granted to eleven grantees, with an exercise price of HKD 0.095 per share[81] - Executive Directors Ms. Yan Ping and Mr. Liu Yaoguang were granted 1,300,000 and 7,200,000 share options respectively, with an exercise period from June 6, 2026, to June 5, 2035[81] Competition and Conflicts of Interest During the period, no directors, controlling shareholders, or substantial shareholders and their close associates engaged in any business that competed or might compete with the Group's business, nor were there any other conflicts of interest - During the period, no directors, controlling shareholders or substantial shareholders of the company, and their respective close associates, engaged in any business that directly or indirectly competed or might compete with the Group's business, or had any other conflicts of interest with the Group[82] Directors' Securities Transactions The company has adopted a code of conduct for directors' dealings in company securities, and all directors confirmed compliance with the relevant standards during the period - The company has adopted a code of conduct for directors' dealings in the company's securities in accordance with Rules 5.46 to 5.67 of the GEM Listing Rules[84] - During the period, all directors confirmed their compliance with the required standards of dealing and the code of conduct adopted by the company regarding directors' securities transactions[84] Purchase, Sale or Redemption of the Company's Securities During the period, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's securities - During the period, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's securities[85] Corporate Governance Code The company has applied the principles and code provisions of the Corporate Governance Code set out in Appendix 15 to the GEM Listing Rules and has complied with the applicable code provisions during the period - The company has applied the principles and code provisions of the Corporate Governance Code ("CG Code") set out in Appendix 15 to the GEM Listing Rules[86] - To the best knowledge of the Board, the company has complied with the applicable code provisions of the CG Code during the period[86] Changes in Directors' Information Ms. Shen Jindan was removed as an independent non-executive director of the company effective June 6, 2025 - Ms. Shen Jindan was removed as an independent non-executive director of the company, effective June 6, 2025[87] Audit Committee The Audit Committee, comprising three independent non-executive directors with Ms. Lian Jingyu as Chairperson, is responsible for reviewing and overseeing financial reporting and internal control procedures. The unaudited condensed financial results for this period have been reviewed by the Audit Committee and confirmed to comply with applicable accounting standards and disclosure requirements - The Audit Committee was established on June 20, 2017, and comprises three independent non-executive directors, with Ms. Lian Jingyu as Chairperson[88] - The primary duties of the Audit Committee are to review and oversee the Group's financial reporting process and internal control procedures[88] - The unaudited condensed financial results for this period have been reviewed by the Audit Committee, which considers them to be in compliance with applicable accounting standards, the GEM Listing Rules, and to have made adequate disclosures[88]