普华和顺(01358) - 2025 - 中期业绩

Financial Highlights Overview For the six months ended June 30, 2025, Puhua Heshun Group's revenue increased by 22.4% to RMB 414.4 million, and gross profit grew by 13.4% to RMB 212.8 million; however, profit for the period and profit attributable to owners of the Company decreased by 7.5% and 6.0% respectively, while adjusted net profit and adjusted net profit attributable to owners of the Company increased by 15.3% and 10.9% respectively, with the Board resolving to declare an interim dividend of 4.4 HK cents per share 2025 First Half Key Financial Data (Unaudited) | Indicator | June 30, 2025 (RMB million) | June 30, 2024 (RMB million) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 414.4 | 338.4 | +22.4% | | Gross Profit | 212.8 | 187.6 | +13.4% | | Profit for the Period | 86.6 | 93.6 | -7.5% | | Profit Attributable to Owners of the Company | 66.0 | 70.2 | -6.0% | | Adjusted Net Profit for the Period | 119.1 | 103.3 | +15.3% | | Adjusted Net Profit Attributable to Owners of the Company | 83.4 | 75.2 | +10.9% | | Interim Dividend (HK cents per share) | 4.4 | 4.5 | -2.2% | - Adjusted net profit and adjusted net profit attributable to owners of the Company are non-HKFRS measures, excluding share-based payment expenses, professional service fees for spin-off, amortization of intangible assets, and related income tax effects, to better reflect the Group's business performance[4] Condensed Consolidated Financial Statements Condensed Consolidated Statement of Comprehensive Income For the six months ended June 30, 2025, the Group's revenue increased to RMB 414,373 thousand, with gross profit of RMB 212,779 thousand; however, operating profit and profit for the period both decreased, with profit attributable to owners of the Company at RMB 65,999 thousand, and basic and diluted earnings per share at RMB 4.44 cents Condensed Consolidated Statement of Comprehensive Income (Unaudited) | Indicator | June 30, 2025 (RMB thousand) | June 30, 2024 (RMB thousand) | | :--- | :--- | :--- | | Revenue | 414,373 | 338,417 | | Cost of Sales | (201,594) | (150,796) | | Gross Profit | 212,779 | 187,621 | | Operating Profit | 80,198 | 84,511 | | Profit Before Income Tax | 103,121 | 112,301 | | Income Tax Expense | (16,502) | (18,662) | | Profit for the Period | 86,619 | 93,639 | | Profit Attributable to Owners of the Company | 65,999 | 70,219 | | Basic and Diluted Earnings Per Share (RMB cents) | 4.44 | 4.49 | Condensed Consolidated Statement of Financial Position As of June 30, 2025, the Group's total assets increased to RMB 5,294,299 thousand, with non-current assets slightly decreasing and current assets significantly increasing, while total liabilities and total equity both grew, maintaining a robust net current assets position Condensed Consolidated Statement of Financial Position (Unaudited) | Indicator | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Assets | | | | Total Non-current Assets | 2,893,276 | 3,066,690 | | Total Current Assets | 2,401,023 | 2,094,239 | | Total Assets | 5,294,299 | 5,160,929 | | Liabilities | | | | Total Current Liabilities | 248,957 | 177,440 | | Total Non-current Liabilities | 184,247 | 180,121 | | Total Liabilities | 433,204 | 357,561 | | Net Current Assets | 2,152,066 | 1,916,799 | | Equity | | | | Equity Attributable to Owners of the Company | 4,000,367 | 3,971,401 | | Non-controlling Interests | 860,728 | 831,967 | | Total Equity | 4,861,095 | 4,803,368 | Notes to the Condensed Consolidated Interim Financial Statements 1. General Information Puhua Heshun Group Company, incorporated in the Cayman Islands and listed on the Hong Kong Stock Exchange, primarily engages in the research, development, manufacturing, and sales of high-end infusion sets, blood purification medical devices, and animal-derived regenerative medical biomaterials and human tissue repair and replacement products in China - The Company was incorporated in the Cayman Islands on May 13, 2011, and listed on the Main Board of the Hong Kong Stock Exchange on November 8, 2013[10] - The Group's core businesses include infusion products, blood purification products, and regenerative medical biomaterials, covering R&D, manufacturing, and sales[10] 2. Basis of Preparation The condensed consolidated interim financial statements are prepared in accordance with HKAS 34 and the Listing Rules, adopting the same accounting policies as the 2024 annual financial statements, with no significant impact from new or amended standards, and have been reviewed by independent auditors - The financial statements are prepared in accordance with HKAS 34 and the Listing Rules, and were authorized for issue on August 29, 2025[11] - These condensed consolidated interim financial statements are unaudited but have been reviewed by BDO Limited, Hong Kong[14] 3. Changes in Accounting Policies Except for amendments to HKAS 21 and HKFRS 1 (Non-exchangeable Currencies), the Group's accounting policies applied are consistent with the 2024 consolidated financial statements, and new or amended HKFRSs have no significant impact on the current period's financial statements - The accounting policies applied are consistent with the 2024 consolidated financial statements, and new or amended HKFRSs have no significant impact on the Group's accounting policies[15] 4. Critical Accounting Judgements and Key Sources of Estimation Uncertainty The preparation of condensed consolidated interim financial information involves management's significant judgments, estimates, and assumptions regarding the application of accounting policies, assets, liabilities, income, and expenses, where actual results may differ from estimates, and the key judgments and sources of estimation uncertainty used in the current period are the same as those in the 2024 financial statements - The critical judgments and key sources of estimation uncertainty made by management in preparing the financial statements are the same as those in the 2024 annual financial statements[16] 5. Revenue and Segment Information For the six months ended June 30, 2025, the Group's total revenue was RMB 414,373 thousand, primarily from medical product distributors, with significant growth in blood purification business revenue but a decrease in infusion business revenue, and mainland China remains the main market, while overseas markets such as India, the Americas, and Africa also contributed revenue, with the Group's operations divided into three segments: infusion products, blood purification products, and regenerative medical biomaterials Revenue from Contracts with Customers by Category (Unaudited) | Revenue Source | June 30, 2025 (RMB thousand) | June 30, 2024 (RMB thousand) | | :--- | :--- | :--- | | Revenue from Hospitals | 15,689 | 16,440 | | Revenue from Medical Product Distributors | 398,684 | 321,977 | | Total | 414,373 | 338,417 | Revenue by Geographical Market (Unaudited) | Geographical Market | June 30, 2025 (RMB thousand) | June 30, 2024 (RMB thousand) | | :--- | :--- | :--- | | Mainland China | 311,848 | 295,529 | | India | 38,580 | 13,144 | | Americas (excluding USA) | 12,859 | 4,948 | | Africa | 12,060 | 7,264 | | Others | 39,026 | 17,532 | | Total | 414,373 | 338,417 | Segment Revenue and Results (Unaudited) | Segment | June 30, 2025 (RMB thousand) | June 30, 2024 (RMB thousand) | | :--- | :--- | :--- | | Segment Revenue | | | | Infusion Business | 113,387 | 132,618 | | Blood Purification Business | 297,444 | 205,799 | | Regenerative Medical Biomaterials Business | 3,542 | — | | Total | 414,373 | 338,417 | | Segment Results (Operating Profit/(Loss)) | | | | Infusion Business | 41,614 | 39,313 | | Blood Purification Business | 70,829 | 60,621 | | Regenerative Medical Biomaterials Business | (24,829) | (13,612) | | Total | 87,614 | 86,322 | - Blood purification business revenue significantly increased, and regenerative medical biomaterials business recorded revenue for the first time[17][19] 6. Other Income and Gains and Losses—Net For the six months ended June 30, 2025, the Group's other income and gains—net decreased to RMB 14,840 thousand from RMB 18,074 thousand in the prior period, primarily due to foreign exchange losses and losses on guarantee liabilities, partially offset by increased government grants and rental income Other Income and Gains and Losses—Net (Unaudited) | Item | June 30, 2025 (RMB thousand) | June 30, 2024 (RMB thousand) | | :--- | :--- | :--- | | Government Grants | 3,370 | 1,814 | | Rental Income | 10,292 | 6,845 | | Rental Management and Utility Income | 2,023 | 3,910 | | Loss on Disposal of Property, Plant and Equipment | (2) | (91) | | Loss on Guarantee Liabilities | (367) | (366) | | Net Foreign Exchange (Loss)/Gain | (1,599) | 3,881 | | Fair Value Change of Financial Assets at FVTPL | 1,054 | — | | Others | 69 | 2,081 | | Other Gains—Net | 14,840 | 18,074 | - Net foreign exchange loss of RMB 1,599 thousand, compared to a gain of RMB 3,881 thousand in the prior period[23] - Loss on guarantee liabilities primarily relates to joint and several guarantee liabilities of Xuzhou Yijia Medical Device Co., Ltd., with the recognized loss being accrued interest for the period[23][24] 7. Finance Income—Net For the six months ended June 30, 2025, the Group's net finance income decreased to RMB 22,923 thousand from RMB 27,790 thousand in the prior period, mainly due to reduced bank interest income and loan interest income, but significantly increased interest income from wealth management products Finance Income—Net (Unaudited) | Item | June 30, 2025 (RMB thousand) | June 30, 2024 (RMB thousand) | | :--- | :--- | :--- | | Finance Income | | | | Bank Interest Income | 14,801 | 19,242 | | Interest Income from Wealth Management Products | 600 | 51 | | Loan Interest Income | 7,850 | 8,615 | | Subtotal | 23,251 | 27,908 | | Finance Costs | | | | Interest Expense on Lease Liabilities | (133) | (84) | | Interest Expense on Bank Borrowings | (195) | (34) | | Subtotal | (328) | (118) | | Finance Income—Net | 22,923 | 27,790 | 8. Profit Before Income Tax For the six months ended June 30, 2025, the Group's profit before income tax was RMB 103,121 thousand, with amortization of intangible assets significantly increasing to RMB 32,456 thousand, while depreciation of property, plant and equipment remained stable Components of Profit Before Income Tax (Unaudited) | Item | June 30, 2025 (RMB thousand) | June 30, 2024 (RMB thousand) | | :--- | :--- | :--- | | Amortization of Intangible Assets | 32,456 | 14,656 | | Depreciation of Property, Plant and Equipment | 34,675 | 34,866 | | Depreciation of Right-of-use Assets—Properties | 959 | 641 | | Depreciation of Right-of-use Assets—Leasehold Land and Land Use Rights | 300 | 300 | - Amortization of intangible assets increased by 121.4% year-on-year, reflecting accelerated consumption of intangible asset value[26] 9. Taxation For the six months ended June 30, 2025, the Group's income tax expense decreased to RMB 16,502 thousand, with varying tax rates applied across different jurisdictions, including Cayman Islands exemption, Hong Kong profits tax (no assessable profits), China corporate income tax (25% statutory rate, with some subsidiaries enjoying 15% preferential rate or small-profit enterprise benefits), and withholding tax (on dividends distributed by China to overseas investors) Income Tax Expense (Unaudited) | Item | June 30, 2025 (RMB thousand) | June 30, 2024 (RMB thousand) | | :--- | :--- | :--- | | China Income Tax for the Period | (20,729) | (20,676) | | Deferred Income Tax | 4,227 | 2,014 | | Income Tax Expense | (16,502) | (18,662) | - Certain subsidiaries located in western China enjoy a preferential income tax rate of 15%[30] - Four subsidiaries qualify as "High and New Technology Enterprises" and enjoy a preferential income tax rate of 15%[30] - Seven PRC subsidiaries qualify as small-profit enterprises and enjoy preferential tax rates[30] - Withholding tax rate on dividends distributed by China to Hong Kong-registered overseas investors can be reduced from 10% to 5%[31] 10. Earnings Per Share For the six months ended June 30, 2025, profit attributable to owners of the Company was RMB 65,999 thousand, with basic and diluted earnings per share both at RMB 4.44 cents, a slight decrease from the prior period, and no dilutive potential ordinary shares existed during the current period Earnings Per Share (Unaudited) | Indicator | June 30, 2025 (RMB thousand) | June 30, 2024 (RMB thousand) | | :--- | :--- | :--- | | Profit Attributable to Owners of the Company | 65,999 | 70,219 | | Weighted Average Number of Ordinary Shares in Issue (thousand shares) | 1,486,735 | 1,565,358 | | Basic Earnings Per Share (RMB cents) | 4.44 | 4.49 | | Diluted Earnings Per Share (RMB cents) | 4.44 | 4.49 | - As of June 30, 2025, the Company had no dilutive potential ordinary shares[34] 11. Dividends The Board has declared an interim dividend of 4.4 HK cents per share for the six months ended June 30, 2025, slightly lower than 4.5 HK cents in the prior period, and the proposed final dividend of 5.3 HK cents per share for 2024 was approved by shareholders and paid in July 2025 - The Board has declared an interim dividend of 4.4 HK cents per share for the six months ended June 30, 2025 (2024: 4.5 HK cents)[36] - The proposed final dividend of 5.3 HK cents per share for 2024 (totaling HKD 78,797,000) was approved by shareholders and paid on July 25, 2025[36] 12. Property, Plant and Equipment As of June 30, 2025, the Group's property, plant and equipment carrying value increased to RMB 897,077 thousand, primarily due to additions of approximately RMB 40,877 thousand during the period, partially offset by depreciation and disposals Changes in Property, Plant and Equipment (Unaudited) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | At Beginning of Period/Year | 891,691 | 906,872 | | Additions | 40,877 | 56,499 | | Disposals | (816) | (656) | | Depreciation | (34,675) | (71,024) | | At End of Period/Year | 897,077 | 891,691 | - Additions to property, plant and equipment during the period were approximately RMB 40,877,000, a significant increase compared to RMB 18,459,000 in the prior period[37] 13. Right-of-use Assets As of June 30, 2025, the Group's total right-of-use assets amounted to RMB 29,071 thousand, primarily comprising properties and leasehold land and land use rights, with depreciation of RMB 1,259 thousand during the period Components of Right-of-use Assets (Unaudited) | Asset Type | June 30, 2025 (RMB thousand) | | :--- | :--- | | Properties | 4,799 | | Leasehold Land and Land Use Rights | 24,272 | | Total | 29,071 | - Depreciation of right-of-use assets for the period was RMB 1,259 thousand[38] 14. Investment Properties As of June 30, 2025, the Group's investment properties fair value slightly decreased to RMB 262,559 thousand, mainly due to fair value losses, with fair value determined using the income approach, and key assumptions including occupancy rate, monthly rent, rental growth rate, and discount rate, where a 1% increase in discount rate or a 0.5% decrease in rental growth rate would significantly negatively impact fair value Changes in Fair Value of Investment Properties (Unaudited) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | At Beginning of Period/Year | 262,880 | 264,878 | | Fair Value Change | (321) | (1,182) | | At End of Period/Year | 262,559 | 262,880 | Key Assumptions for Investment Properties Fair Value Valuation | Assumption | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Occupancy Rate | 50.0% to 83.52% | 50.0% to 83.52% | | Monthly Rent | RMB 40.4 to 78.8/sqm | RMB 40.2 to 78.8/sqm | | Rental Growth Rate | 2.0% | 2.0% | | Discount Rate | 5.0% | 5.0% | - A 1% increase in discount rate would result in a decrease of approximately RMB 34,101 thousand in the fair value of investment properties[42] - A 0.5% decrease in rental growth rate would result in a decrease of approximately RMB 20,976 thousand in the fair value of investment properties[42] 15. Intangible Assets As of June 30, 2025, the Group's intangible assets carrying value decreased to RMB 1,042,686 thousand, primarily due to amortization expenses of RMB 32,456 thousand, partially offset by additions Changes in Intangible Assets (Unaudited) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | At Beginning of Period/Year | 1,068,300 | 1,096,987 | | Additions | 6,842 | 15,583 | | Amortization Expense | (32,456) | (44,270) | | At End of Period/Year | 1,042,686 | 1,068,300 | 16. Goodwill As of June 30, 2025, the Group's goodwill carrying value remained at RMB 564,085 thousand, primarily allocated to the infusion business, blood purification business, and regenerative medical biomaterials business; management determined no impairment for infusion and blood purification businesses, and after an impairment review for the loss-making regenerative medical biomaterials business, concluded that no impairment loss needed to be recognized Allocation of Goodwill Carrying Value (Unaudited) | Cash Generating Unit | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Infusion Business | 160,754 | 160,754 | | Blood Purification Business | 323,540 | 323,540 | | Regenerative Medical Biomaterials Business | 79,791 | 79,791 | | Total | 564,085 | 564,085 | - The regenerative medical biomaterials business underwent a goodwill impairment review due to operating losses during the period, but management determined that no impairment loss needed to be recognized[44][45] 17. Loans Receivable As of June 30, 2025, the Group's total loans receivable amounted to RMB 300,000 thousand, all fixed-rate loans, with RMB 300,000 thousand being current, and the non-current portion reclassified as current; these loans are secured by borrowers' properties, and management assessed the impact of expected credit risk as not significant Analysis of Loans Receivable (Unaudited) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Fixed-rate Loans Receivable | 300,000 | 300,000 | | Analyzed as: | | | | Current | 300,000 | 120,000 | | Non-current | — | 180,000 | | Total | 300,000 | 300,000 | - A loan of RMB 120,000 thousand was extended to May 31, 2026, and is secured by Suzhou properties[47] - The borrower repaid RMB 60 million of principal in July 2025[48] 18. Non-current Financial Assets As of June 30, 2025, the Group's non-current financial assets increased to RMB 73,350 thousand, primarily comprising listed equity securities (Lepu Biopharma) designated at fair value through other comprehensive income and unlisted investment funds at fair value through profit or loss, with significant fair value gains on listed equity securities and fair value gains also recorded for unlisted investment funds Components of Non-current Financial Assets (Unaudited) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Equity Securities Designated at FVTOCI—Listed Equity Securities | 53,510 | 26,363 | | Financial Assets at FVTPL—Unlisted Investment Funds | 19,840 | 20,181 | | Total | 73,350 | 46,544 | - Holds 0.65% equity interest in Lepu Biopharma Co., Ltd., generating a fair value gain of approximately RMB 27,803 thousand during the period[49] - Unlisted investment funds invest in private equity funds in the medical industry, generating a fair value gain of approximately RMB 972 thousand during the period[49] 19. Trade and Other Receivables As of June 30, 2025, the Group's trade and other receivables increased to RMB 192,290 thousand, with trade receivables at RMB 82,771 thousand; the Group applies the expected credit loss model for impairment provisions, adjusting rates based on customer segments and past experience, and recognized a reversal of impairment loss of RMB 3,722 thousand during the period Components of Trade and Other Receivables (Unaudited) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Trade Receivables | 82,771 | 72,988 | | Bills Receivable | 1,815 | 1,338 | | Prepayments and Deposits | 26,509 | 22,403 | | Recoverable VAT | 11,803 | 12,937 | | Other Receivables | 35,923 | 35,817 | | Interest Receivable | 3,803 | 2,771 | | Amounts Due from a Related Party | 29,666 | 18,571 | | Total | 192,290 | 166,825 | Aging Analysis of Trade Receivables (Unaudited) | Aging | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within 3 Months | 59,458 | 46,864 | | 3 to 6 Months | 7,054 | 3,624 | | 6 to 12 Months | 7,236 | 9,301 | | 1 to 2 Years | 2,153 | 1,465 | | 2 to 3 Years | 6,870 | 11,734 | | Total | 82,771 | 72,988 | Loss Provision for Trade Receivables (Unaudited) | Customer Group | June 30, 2025 Expected Credit Loss Rate (%) | June 30, 2025 Loss Provision (RMB thousand) | | :--- | :--- | :--- | | Group A | 7.88 | 4,421 | | Group B | 0.89 | 213 | | Group C | 100 | 1,897 | | Group D | 54.47 | 8,804 | | Total | | 15,335 | - A reversal of impairment loss on trade receivables of RMB 3,722 thousand was recognized during the period[56] 20. Financial Assets at Fair Value Through Profit or Loss As of June 30, 2025, the Group's financial assets at fair value through profit or loss significantly increased to RMB 85,230 thousand, primarily due to an increase in principal-protected wealth management products, with additions of RMB 200,498 thousand, disposals of RMB 120,498 thousand, and a fair value change gain of RMB 82 thousand recorded during the period Components of Financial Assets at Fair Value Through Profit or Loss (Unaudited) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Wealth Management Products—Non-principal Protected | 5,148 | 5,148 | | Wealth Management Products—Principal Protected | 80,082 | — | | Total | 85,230 | 5,148 | Changes in Financial Assets at Fair Value Through Profit or Loss (Unaudited) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | At Beginning of Period/Year | 5,148 | 4,900 | | Additions | 200,498 | 672,998 | | Disposals | (120,498) | (672,750) | | Fair Value Change | 82 | — | | At End of Period/Year | 85,230 | 5,148 | - Principal-protected wealth management products increased from zero to RMB 80,082 thousand[57] 21. Trade and Other Payables As of June 30, 2025, the Group's trade and other payables increased to RMB 213,515 thousand, primarily due to a significant increase in dividends payable, with most trade payables falling within 6 months Components of Trade and Other Payables (Unaudited) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Trade Payables | 49,686 | 41,787 | | Accrued Salaries and Employee Benefits | 35,222 | 38,922 | | Dividends Payable | 71,859 | — | | Advances from Customers | 4,151 | 4,792 | | Deposits Received | 3,404 | 3,704 | | VAT and Other Taxes | 7,213 | 10,384 | | Professional Service Fees | 6,629 | 8,163 | | Provision for Loss on Guarantee Liabilities | 23,047 | 22,680 | | Deferred Government Grants—Current Portion | 1,325 | 1,325 | | Amounts Due to Related Parties | 188 | 729 | | Other Payables | 10,791 | 6,458 | | Total | 213,515 | 138,944 | - Dividends payable increased from zero to RMB 71,859 thousand[60] Aging Analysis of Trade Payables (Unaudited) | Aging | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within 6 Months | 39,078 | 26,160 | | 6 to 12 Months | 560 | 1,371 | | Over 1 Year | 963 | 2,954 | | 2 to 3 Years | 817 | 1,354 | | Over 3 Years | 8,268 | 9,948 | | Total | 49,686 | 41,787 | 22. Share Capital, Share Premium and Treasury Shares As of June 30, 2025, the Group's number of issued and fully paid ordinary shares remained at 1,533,231,098, with stable share capital and share premium; no ordinary shares were repurchased or cancelled during the period, but some shares were repurchased and cancelled in 2024, resulting in a treasury shares balance Changes in Share Capital, Share Premium and Treasury Shares (Unaudited) | Item | Number of Issued and Fully Paid Ordinary Shares | Share Capital (RMB thousand) | Share Premium (RMB thousand) | Number of Treasury Shares | Treasury Shares (RMB thousand) | | :--- | :--- | :--- | :--- | :--- | :--- | | At January 1, 2024 | 1,565,632,098 | 962 | 1,489,876 | — | — | | Shares Repurchased | — | — | — | 78,897,000 | (80,221) | | Shares Cancelled | (32,401,000) | (23) | (33,398) | (32,401,000) | 33,421 | | At June 30, 2025 | 1,533,231,098 | 939 | 1,456,478 | 46,496,000 | (46,800) | - No ordinary shares were repurchased or cancelled during the period ended June 30, 2025[63] 23. Capital Commitments As of June 30, 2025, the Group's contracted but not yet incurred capital expenditure amounted to RMB 21,759 thousand, primarily for the acquisition of property, plant and equipment, a decrease from the end of 2024 Capital Commitments (Unaudited) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Acquisition of Property, Plant and Equipment | 21,759 | 25,633 | 24. Related Party Disclosures The Group has multiple transactions with related party Lepu Medical and its subsidiaries, including sales of medical devices, provision of medical product processing services, and purchases of medical device molds and components, all conducted in the ordinary course of business and in accordance with agreement terms, while key management personnel compensation decreased - Lepu Medical Technology (Beijing) Co., Ltd. is considered to be effectively controlled by Dr. Pu Zhongjie, the spouse of an executive director of the Group[66] Related Party Transactions (Unaudited) | Transaction Type | June 30, 2025 (RMB thousand) | June 30, 2024 (RMB thousand) | | :--- | :--- | :--- | | Sales of Medical Devices | 43,407 | 13,256 | | Income from Medical Product Processing Services | 1,435 | 1,019 | | Purchases of Medical Device Molds and Components | 2,704 | 1,127 | | Key Management Personnel Compensation | 1,889 | 2,662 | - Sales of medical devices to related companies significantly increased to RMB 43,407 thousand[67][69] 25. Summary of Financial Assets and Financial Liabilities by Category As of June 30, 2025, the Group's total financial assets amounted to RMB 2,305,823 thousand, with financial assets measured at amortized cost accounting for the majority, and financial assets at fair value through profit or loss and financial assets at fair value through other comprehensive income both increasing, while financial liabilities are measured at amortized cost Classification of Financial Assets and Financial Liabilities (Unaudited) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Financial Assets | | | | —At Amortized Cost | 2,147,243 | 2,113,469 | | —At Fair Value Through Profit or Loss | 105,070 | 25,329 | | —At Fair Value Through Other Comprehensive Income | 53,510 | 26,363 | | Total | 2,305,823 | 2,165,161 | | Financial Liabilities | | | | Financial Liabilities at Amortized Cost | 145,653 | 130,813 | Valuation of Financial Assets at Fair Value (Unaudited) | Description | June 30, 2025 (RMB thousand) | Fair Value Hierarchy | Valuation Techniques and Key Inputs | | :--- | :--- | :--- | :--- | | Financial Assets at FVTPL—Wealth Management Products | 85,230 | Level 3 | Market approach/financial institution quotes, expected return rate 1.05% to 2.4% | | Financial Assets at FVTPL—Unlisted Investment Funds | 19,840 | Level 3 | Market approach/latest observable transaction prices, comparable company valuations, marketability discount rate 14% to 18% | | Financial Assets at FVTOCI—Listed Equity Securities | 53,510 | Level 1 | Market approach/quoted market prices | - Fair values of wealth management products and unlisted investment funds are classified as Level 3 in the fair value hierarchy, while listed equity securities are classified as Level 1[72][73][76] 26. Events After the Reporting Period Except for matters already disclosed elsewhere in the condensed consolidated interim financial statements, no other significant events occurred after June 30, 2025 - No significant events occurred after the reporting period, other than those already disclosed[77] Management Discussion and Analysis Market and Business Review In the first half of 2025, despite a global economic slowdown, China's medical device industry demonstrated resilience, maintaining its position as the world's second-largest, driven by national policy support, demographic changes, and increased health awareness; while volume-based procurement compressed profit margins, it also spurred innovation and domestic brand substitution, leading to the Group's revenue increasing by 22.4% to RMB 414.4 million, primarily due to significant growth in the blood purification business, with gross profit up 13.4%, but profit attributable to owners of the Company decreased by 6.0%, yet the Group maintained a stable financial position and healthy cash flow, and declared an interim dividend of 4.4 HK cents per share - China's medical device industry remains the second largest globally, driven by national policy support, demographic evolution, and rising public health awareness[78] - Volume-based procurement policies are becoming normalized, compressing profit margins but accelerating domestic brand substitution and industry consolidation[78] 2025 First Half Group Financial Performance | Indicator | Amount (RMB million) | YoY Change | | :--- | :--- | :--- | | Revenue | 414.4 | +22.4% | | Gross Profit | 212.8 | +13.4% | | Overall Gross Profit Margin | 51.3% | -4.1% | | Profit Attributable to Owners of the Company | 66.0 | -6.0% | | Cash and Cash Equivalents | 1,693.3 | Stable and healthy | - The Board declared an interim dividend of 4.4 HK cents per share for the six months ended June 30, 2025[79] Business Strategies and Outlook Puhua Heshun Group focuses on high-growth, high-margin medical device sub-sectors, building three core business segments: infusion products, blood purification products, and regenerative medical biomaterials; the Group will continue to innovate and develop products, expand capacity and product portfolio, broaden its marketing network, improve operational efficiency, actively respond to volume-based procurement challenges, accelerate product internationalization, increase R&D investment, advance product registration and technological innovation, and implement share repurchase and dividend policies to reward shareholders - The Group will continue to increase R&D investment, promote technological upgrades and market expansion for key products, strictly control product quality, and optimize marketing strategies[86] - Deepen the competitive advantage of domestic brand substitution in the local market and accelerate the internationalization of blood purification and other products[86] - Sichuan Ruijian Medical is steadily advancing its listing application on the Beijing Stock Exchange[91] - The Board has granted a general mandate to repurchase up to 10% of the issued shares within the next 12 months and has initiated a share repurchase program[92][93] - The Group adopted a revised dividend policy, intending to distribute no less than 70% of the profit attributable to owners of the Company for the financial year as dividends[94] Infusion Business The infusion business generated revenue of RMB 113.4 million in the first half of 2025, a year-on-year decrease of 14.5%, accounting for 27.4% of the Group's total revenue, primarily due to volume-based procurement policies and weak market demand; the Group is addressing these challenges through a low-cost, high-quality strategy, improving operational efficiency, adjusting marketing strategies, and R&D innovation Infusion Business Revenue | Indicator | 2025 First Half (RMB million) | YoY Change | | :--- | :--- | :--- | | Revenue | 113.4 | -14.5% | | % of Group's Consolidated Revenue | 27.4% | | - Business decline primarily due to expanded regional coverage of volume-based procurement policies and weak market demand[82] - The Group continuously improves the functionality and safety of existing products and actively focuses on emerging hot areas in infusion products, expanding new markets through R&D innovation[82] Blood Purification Business The blood purification business, operated by Sichuan Ruijian Medical, offers blood dialysis consumables and equipment; this market has a significant demand gap, with domestic brands gradually emerging, and despite volume-based procurement compressing profit margins, the company's blood dialyzers and other products successfully won bids, leading to significant sales growth, with this business generating RMB 297.4 million in revenue in the first half of 2025, a year-on-year increase of 44.5%, accounting for 71.8% of the Group's total revenue - China's blood dialysis medical device market has broad development potential, with domestic brands upgrading from consumables to equipment[83][84] - The company's blood dialyzers, hemodiafiltration filters, bloodlines, and arteriovenous fistula needles all successfully won bids in volume-based procurement[84] Blood Purification Business Revenue | Indicator | 2025 First Half (RMB million) | YoY Change | | :--- | :--- | :--- | | Revenue | 297.4 | +44.5% | | % of Group's Consolidated Revenue | 71.8% | | Regenerative Medical Biomaterials Business The regenerative medical biomaterials business focuses on animal-derived tissue regenerative medical biomaterials and human tissue repair and replacement products, with a comprehensive product pipeline and applications spanning medical and aesthetic fields; in the first half of 2025, this business achieved revenue of RMB 3.5 million for the first time, accounting for 0.9% of the Group's total revenue, and the Group believes this segment has extremely high growth potential - The regenerative medical biomaterials market is vast, driven by national economic development, improved living standards, and rapid advancements in biomedical materials[85] Regenerative Medical Biomaterials Business Revenue | Indicator | 2025 First Half (RMB million) | % of Group's Consolidated Revenue | | :--- | :--- | :--- | | Revenue | 3.5 | 0.9% | - The Group has obtained 58 product registration certificates, covering infusion sets, blood dialyzers, biological patches, and other products, with multiple products under development[85] Focus on Innovation and Research and Development The Group continuously enhances its technological innovation and R&D capabilities with a strong R&D team; as of June 30, 2025, it has obtained 58 product registration certificates, holds 177 product patents and copyrights, and has applied for 58 new patents, with R&D processes progressing smoothly across all business segments, including new products such as aesthetic injection needles, electronic pen-style injectors, continuous blood purification therapy devices, and injectable tissue fillers - As of June 30, 2025, the Group has obtained 58 product registration certificates, holds 177 product patents and copyrights, and has applied for 58 new patents[88] - Infusion business segment: Aesthetic product injectable blunt-tip injection needle product is expected to obtain registration certificate in the second half of 2025; application for registration of electronic pen-style injector for insulin injection has been submitted[88] - Blood purification business segment: Applications for registration of hemodiafiltration filters for continuous blood purification therapy and single-use hemoperfusion cartridges have been submitted[88] - Regenerative medical biomaterials segment: Application for registration of injectable tissue filler for aesthetic use has been submitted; clinical trials for biological sponge products will commence in the second half of 2025; dura mater patch product is in the registration review stage[88] Expansion of Distribution Network The Group possesses an experienced professional sales and marketing team that supports its domestic and international distribution networks and strengthens product promotion; team members average ten years of experience, with nearly half having medical education backgrounds, and the Group enhances operational efficiency by optimizing sales structure, adjusting bidding strategies, and implementing a "low-cost, high-quality" strategy - The Group's sales backbone averages ten years of experience, with nearly half of the members having medical education backgrounds[90] - The Group enhances operational efficiency by optimizing sales structure, flexibly adjusting bidding strategies, and implementing a "low-cost, high-quality" strategy[90] Progress of Sichuan Ruijian Medical Spin-off Listing Sichuan Ruijian Medical submitted its subsequent listing application to the Beijing Stock Exchange on March 25, 2025, and is steadily advancing its listing process, with the completion date dependent on the exchange's and CSRC's review procedures and market conditions - Sichuan Ruijian Medical submitted its subsequent listing application to the Beijing Stock Exchange on March 25, 2025[91] - The completion date of the listing depends on the review procedures and market conditions[91] Strategic Share Repurchase Program The Board has been authorized to repurchase up to 10% of the issued shares and initiated a share repurchase program on July 4, 2025; the timing, price, and amount of repurchases will be determined based on market conditions, with each repurchase price not exceeding 5% above the average closing price of the preceding five trading days, and funds will come from existing available cash - The Board has been authorized to repurchase up to 10% (i.e., a maximum of 148,673,509 shares) of the issued shares[92] - The Company initiated a share repurchase program on July 4, 2025, with the timing, price, and amount of repurchases to be determined based on market conditions[92][93] - The actual purchase price for each repurchase shall not exceed 5% or more above the average closing price for the five trading days immediately preceding each repurchase[93] Active Sharing of Operating Results The Group adopted a revised dividend policy in August 2023, intending to distribute no less than 70% of the profit attributable to owners of the Company for the financial year as dividends; the Board has declared an interim dividend of 4.4 HK cents per share, demonstrating its commitment to shareholder returns and optimism about business prospects - The Group adopted a revised dividend policy in August 2023, intending to distribute no less than 70% of the profit attributable to owners of the Company for the financial year as dividends[94] - The Board has declared an interim dividend of 4.4 HK cents per share for the six months ended June 30, 2025[94] Financial Review This section provides a detailed review of the Group's financial performance in the first half of 2025, including revenue, gross profit, various expenses, operating profit, finance income, income tax expense, and profit for the period; strong revenue growth in the blood purification business offset a decline in the infusion business, while gross profit margin decreased due to the blood purification business, and expenses increased due to share-based payments and intangible asset amortization; non-HKFRS measures show an increase in adjusted net profit, and the section also analyzes trade and other receivables, inventories, fixed assets, investment properties, intangible assets and goodwill, loans receivable, non-current financial assets, financial resources, capital commitments, gearing ratio, and various risks 2025 First Half Financial Overview (Unaudited) | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | Change | | :--- | :--- | :--- | :--- | | Total Revenue | 414,373 | 338,417 | +22.4% | | Gross Profit | 212,779 | 187,621 | +13.4% | | Gross Profit Margin | 51.3% | 55.4% | -4.1% | | Profit for the Period | 86,619 | 93,639 | -7.5% | | Profit Attributable to Owners of the Company | 65,999 | 70,219 | -6.0% | | Adjusted Profit for the Period | 119,131 | 103,341 | +15.3% | | Adjusted Profit Attributable to Owners of the Company | 83,402 | 75,229 | +10.9% | - Strong sales growth in the blood purification business and first-time revenue from the regenerative medical biomaterials business offset the decrease in infusion business sales[96] - Gross profit margin decreased primarily due to a decline in the gross profit margin of the blood purification business, affected by volume-based procurement policies and an increased proportion of lower-margin export sales[98] - General and administrative expenses increased by 33.3%, mainly due to increased share-based payment expenses and amortization of intangible assets in the blood purification and regenerative medical biomaterials businesses[102][103] - Operating profit decreased by 5.1%, primarily affected by gross profit increase being offset by share-based payment expenses, decreased operating profit in the infusion business, and increased operating loss in the regenerative medical biomaterials business[108] - Profit for the period and profit attributable to owners of the Company decreased by 7.5% and 6.0% respectively, mainly due to decreased operating profit and finance income[111] Revenue The Group's total revenue increased by 22.4% year-on-year to RMB 414.4 million; blood purification business revenue grew strongly by 44.5% to RMB 297.4 million, primarily driven by domestic and international market expansion and increased demand, while infusion business revenue decreased by 14.5% to RMB 113.4 million due to volume-based procurement and weak market demand, and the regenerative medical biomaterials business recorded revenue of RMB 3.5 million for the first time Revenue by Business Segment (Unaudited) | Business Segment | 2025 (RMB thousand) | 2024 (RMB thousand) | Change | | :--- | :--- | :--- | :--- | | Infusion Business | 113,387 | 132,618 | -14.5% | | Blood Purification Business | 297,444 | 205,799 | +44.5% | | Regenerative Medical Biomaterials Business | 3,542 | — | N/A | | Total Revenue | 414,373 | 338,417 | +22.4% | - Blood purification business revenue significantly increased, primarily due to efforts to expand domestic and international markets and increased demand leading to higher sales volume, partially offset by a decrease in average selling price[96] - Infusion business revenue decreased, primarily due to expanded regional coverage of volume-based procurement policies and weak market demand[97] - Regenerative medical biomaterials business recorded revenue for the first time, primarily due to the successful market launch of breast tissue patches[97] Gross Profit The Group's gross profit increased by 13.4% year-on-year to RMB 212.8 million, but the gross profit margin decreased from 55.4% to 51.3%; this decline was mainly due to a decrease in the gross profit margin of the blood purification business, affected by lower unit selling prices due to volume-based procurement policies and an increased proportion of lower-margin export sales, while the infusion business gross profit margin also slightly decreased, and the regenerative medical biomaterials business gross profit margin was 58.0% Gross Profit and Gross Profit Margin by Business Segment (Unaudited) | Business Segment | 2025 Gross Profit Margin | 2024 Gross Profit Margin | | :--- | :--- | :--- | | Blood Purification Business | 48.2% | 52.4% | | Infusion Business | 59.4% | 60.2% | | Regenerative Medical Biomaterials Business | 58.0% | N/A | | Group Overall | 51.3% | 55.4% | - The decrease in blood purification business gross profit margin was mainly due to lower unit selling prices resulting from volume-based procurement policies and an increased proportion of lower-margin export sales[98] Selling and Marketing Expenses Selling and marketing expenses increased by 9.6% year-on-year to RMB 43.8 million; expenses for the blood purification business increased by 55.6% to RMB 22.6 million, primarily due to increased share-based payment expenses and staff costs, while the regenerative medical biomaterials business incurred selling and marketing expenses of RMB 2.3 million for the first time, and expenses for the infusion business decreased, benefiting from cost control measures and reduced marketing activities Selling and Marketing Expenses (Unaudited) | Business Segment | 2025 (RMB million) | 2024 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Blood Purification Business | 22.6 | 14.5 | +55.6% | | Regenerative Medical Biomaterials Business | 2.3 | — | N/A | | Infusion Business | 18.9 | 25.4 | -25.6% | | Group Overall | 43.8 | 39.9 | +9.6% | - Share-based payment expenses for the blood purification business increased from RMB 1.4 million to RMB 4.3 million[100] - Selling and marketing expenses for the infusion business decreased, primarily due to effective cost control measures and reduced marketing activities[101] General and Administrative Expenses General and administrative expenses increased by 33.3% year-on-year to RMB 83.5 million; expenses for the blood purification business increased by 31.5% to RMB 37.6 million, primarily due to increased share-based payment expenses and staff costs, while expenses for the regenerative medical biomaterials business significantly increased by 195.3% to RMB 21.7 million, mainly due to increased amortization of fair value increment of intangible assets, and expenses for Group headquarters and the infusion business decreased, primarily due to lower property maintenance costs General and Administrative Expenses (Unaudited) | Business Segment | 2025 (RMB million) | 2024 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Blood Purification Business | 37.6 | 28.6 | +31.5% | | Regenerative Medical Biomaterials Business | 21.7 | 7.3 | +195.3% | | Group Headquarters and Infusion Business | 24.2 | 26.7 | -9.3% | | Group Overall | 83.5 | 62.6 | +33.3% | - Share-based payment expenses for the blood purification business increased from RMB 3.3 million to RMB 9.3 million[102] - Amortization of fair value increment of intangible assets for the regenerative medical biomaterials business increased from RMB 3.7 million to RMB 19.8 million[103] - All intangible assets with fair value increment recognized upon acquisition of Beijing Ruijian Bio commenced amortization from August 1, 2024, with monthly fixed amortization increasing to approximately RMB 3.3 million[104] Research and Development Expenses Research and development expenses increased by 9.2% year-on-year to RMB 22.5 million; R&D expenses for the blood purification business increased to RMB 12.4 million, primarily due to increased investment in R&D projects, while R&D expenses for the regenerative medical biomaterials business decreased to RMB 4.1 million, mainly because some R&D projects were not in a phase requiring substantial R&D investment Research and Development Expenses by Business Segment (Unaudited) | Business Segment | 2025 (RMB million) | 2024 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Blood Purification Business | 12.4 | 7.9 | +57.0% | | Regenerative Medical Biomaterials Business | 4.1 | 6.3 | -35.0% | | Group Overall | 22.5 | 20.6 | +9.2% | - Blood purification business R&D expenses increased primarily due to increased investment in R&D projects[105] - Regenerative medical biomaterials business R&D expenses decreased primarily because some R&D projects were not in a phase requiring substantial R&D investment[105] Other Income and Gains and Losses—Net Other net gains decreased by 17.9% year-on-year to RMB 14.8 million, primarily due to a foreign exchange loss of RMB 1.6 million (compared to a gain of RMB 3.9 million in the prior period) resulting from fluctuations in RMB and USD exchange rates, partially offset by increased rental income Other Income and Gains and Losses—Net (Unaudited) | Indicator | 2025 (RMB million) | 2024 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Other Net Gains | 14.8 | 18.1 | -17.9% | | Net Foreign Exchange (Loss)/Gain | (1.6) | 3.9 | From gain to loss | | Rental Income | Increased | Increased | | Fair Value Loss on Investment Properties Fair value loss on investment properties decreased from RMB 0.4 million in the prior period to RMB 0.3 million in the current period, primarily due to a downturn in the leasing market Fair Value Loss on Investment Properties (Unaudited) | Indicator | 2025 (RMB million) | 2024 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Fair Value Loss | 0.3 | 0.4 | -25.0% | | Primary Reason | Downturn in leasing market | Downturn in leasing market | | Operating Profit Operating profit decreased by 5.1% year-on-year to RMB 80.2 million; operating profit in the blood purification business increased but was offset by share-based payment expenses, while operating profit in Group headquarters and the infusion business decreased, and operating loss in the regenerative medical biomaterials business increased, primarily due to increased amortization of intangible assets expenses without a corresponding increase in sales Operating Profit (Unaudited) | Indicator | 2025 (RMB million) | 2024 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Operating Profit | 80.2 | 84.5 | -5.1% | | Blood Purification Business Operating Profit | 70.9 | 60.6 | +17.0% | | Group Headquarters and Infusion Business Operating Profit | 34.1 | 37.5 | -9.0% | | Regenerative Medical Biomaterials Business Operating Loss | (24.8) | (13.6) | +82.4% | | Primary Reasons | Increased share-based payment expenses, increased amortization of intangible assets | | | Finance Income—Net Net finance income decreased by 17.5% year-on-year to RMB 22.9 million, primarily due to lower bank deposit interest rates Finance Income—Net (Unaudited) | Indicator | 2025 (RMB million) | 2024 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Net Finance Income | 22.9 | 27.8 | -17.5% | | Primary Reason | Lower bank deposit interest rates | | | Income Tax Expense Income tax expense decreased by 11.6% year-on-year to RMB 16.5 million, primarily due to a decrease in assessable profit Income Tax Expense (Unaudited) | Indicator | 2025 (RMB million) | 2024 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Income Tax Expense | 16.5 | 18.7 | -11.6% | | Primary Reason | Decrease in assessable profit | | | Profit for the Period and Profit Attributable to Owners of the Company Profit for the period and profit attributable to owners of the Company decreased by 7.5% and 6.0% respectively, to RMB 86.6 million and RMB 66.0 million, primarily due to decreased operating profit and finance income Profit for the Period and Profit Attributable to Owners of the Company (Unaudited) | Indicator | 2025 (RMB million) | 2024 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Profit for the Period | 86.6 | 93.6 | -7.5% | | Profit Attributable to Owners of the Company | 66.0 | 70.2 | -6.0% | | Primary Reasons | Decreased operating profit and finance income | | | Non-HKFRS Measures—Adjusted Net Profit and Adjusted Net Profit Attributable to Owners of the Company To supplement HKFRS, the Group provides adjusted net profit and adjusted net profit attributable to owners of the Company; these non-HKFRS measures, by adding back share-based payment expenses, professional service fees for spin-off, amortization of intangible assets, and related income tax effects, better reflect the Group's operating performance, with adjusted net profit increasing by 15.3% year-on-year to RMB 119.1 million, and adjusted net profit attributable to owners of the Company increasing by 10.9% year-on-year to RMB 83.4 million - Non-HKFRS measures, by excluding non-cash or non-recurring expenses, facilitate comparison of operating performance across periods and companies[113] Reconciliation of Non-HKFRS Measures (Unaudited) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | Change | | :--- | :--- | :--- | :--- | | Profit for the Period | 86,619 | 93,639 | -7.5% | | Add: Share-based Payment Expenses for Blood Purification Business | 14,269 | 4,975 | +186.8% | | Add: Professional Service Fees Related to Spin-off | 1,790 | 1,970 | -9.2% | | Add: Amortization of Fair Value Increment of Intangible Assets Recognized upon Acquisition of Beijing Ruijian Bio | 19,841 | 3,704 | +435.7% | | Less: Income Tax Impact of Above Non-HKFRS Adjustments | (3,388) | (947) | +257.8% | | Adjusted Net Profit for the Period | 119,131 | 103,341 | +15.3% | | Profit Attributable to Owners of the Company | 65,999 | 70,219 | -6.0% | | Add: Share-based Payment Expenses for Blood Purification Business | 6,919 | 2,412 | +187.0% | | Add: Professional Service Fees Related to Spin-off | 868 | 955 | -9.0% | | Add: Amortization of Fair Value Increment of Intangible Assets Recognized upon Acquisition of Beijing Ruijian Bio | 11,548 | 2,156 | +435.6% | | Less: Income Tax Impact of Above Non-HKFRS Adjustments | (1,932) | (513) | +276.6% | | Adjusted Net Profit Attributable to Owners of the Company | 83,402 | 75,229 | +10.9% | - Share-based payment expenses for the blood purification business significantly increased, primarily due to Sichuan Ruijian Medical's implementation of an equity incentive plan in April 2024[115][116] Trade and Other Receivables As of June 30, 2025, the Group's trade and other receivables increased by RMB 25.5 million to RMB 192.3 million, primarily due to extended credit periods from increased overseas sales in the blood purification business; receivables for Group headquarters and the infusion business also slightly increased, mainly due to a reversal of impairment loss on trade receivables, and the Group applies the expected credit loss model, regularly reviewing customer financial performance and credit risk Trade and Other Receivables (Unaudited) | Business Segment | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Blood Purification Business | 56.1 | 35.4 | +20.7 | | Group Headquarters and Infusion Business | 134.5 | 129.9 | +4.6 | | Group Total | 192.3 | 166.8 | +25.5 | - Increase in blood purification business receivables primarily due to increased overseas sales, which typically offer longer credit periods[117] - Increase in Group headquarters and infusion business receivables primarily due to a reversal of impairment loss on trade receivables[117] - As of June 30, 2025, the Group made a loss provision of approximately RMB 15.3 million for trade receivables totaling approximately RMB 98.1 million[119] Inventories Inventories increased by 8.3% from RMB 120.3 million as of December 31, 2024, to RMB 130.2 million as of June 30, 2025, primarily due to the blood purification and infusion businesses stocking up to meet increased sales orders and anticipated market demand Inventories by Business Segment (Unaudited) | Business Segment | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Blood Purification Business | 85.6 | 79.4 | +6.2 | | Infusion Business | 35.8 | 32.9 | +2.9 | | Group Total | 130.2 | 120.3 | +9.9 | - Inventory increase primarily due to stocking up to meet increased sales orders and anticipated market demand[120] Property, Plant and Equipment As of June 30, 2025, the Group's property, plant and equipment increased by RMB 5.4 million to RMB 897.1 million, primarily due to the combined effect of production line construction, new production equipment purchases, and depreciation Property, Plant and Equipment (Unaudited) | Indicator | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Property, Plant and Equipment | 897.1 | 891.7 | +5.4 | | Primary Reasons | Combined effect of production line construction, new production equipment purchases, and depreciation | | | Investment Properties As of June 30, 2025, the Group's investment properties decreased by RMB 0.3 million to RMB 262.6 million, primarily due to fair value losses on properties Investment Properties (Unaudited) | Indicator | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Investment Properties | 262.6 | 262.9 | -0.3 | | Primary Reason | Fair value losses on properties | | | Intangible Assets and Goodwill As of June 30, 2025, the Group's net intangible assets and goodwill decreased by RMB 25.6 million to RMB 1,606.8 million, primarily due to amortization of intangible assets of approximately RMB 32.5 million, partially offset by an increase in capitalized development costs of approximately RMB 6.9 million Net Intangible Assets and Goodwill (Unaudited) | Indicator | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Net Intangible Assets and Goodwill | 1,606.8 | 1,632.4 | -25.6 | | Primary Reasons | Combined effect of amortization of intangible assets and increase in capitalized development costs | | | - Amortization of intangible assets was approximately RMB 32.5 million, and capitalized development costs increased by approximately RMB 6.9 million[124] Loans Receivable As of June 30, 2025, the Group's total loans receivable amounted to RMB 300.0 million, including two loans granted to independent third parties; as of the date of this announcement, the bo