华津国际控股(02738) - 2025 - 中期业绩

Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income Statement of Profit or Loss and Other Comprehensive Income For the six months ended June 30, 2025, the Group turned from profit to loss, with significant declines in revenue, gross profit, and profit before tax Metrics | Metric | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Revenue | 732,906 | 3,206,463 | | Cost of Sales | (1,273,119) | (3,112,274) | | Gross (Loss) Profit | (540,213) | 94,189 | | Profit (Loss) Before Tax | (616,799) | 19,477 | | Profit (Loss) for the Period Attributable to Owners of the Company | (523,148) | 16,885 | | Basic (Loss) Earnings Per Share (RMB cents) | (87.19) | 2.81 | - Revenue for the period significantly decreased by 77.1% from RMB 3,206,463 thousand to RMB 732,906 thousand[5] - Gross profit turned from a profit of RMB 94,189 thousand in the prior period to a loss of RMB 540,213 thousand in the current period[5] Condensed Consolidated Statement of Financial Position Statement of Financial Position As of June 30, 2025, the Group's net current liabilities and net liabilities significantly increased, indicating heightened liquidity pressure Metrics | Metric | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Non-current Assets | 2,272,323 | 2,228,043 | | Current Assets | 1,030,213 | 1,488,609 | | Current Liabilities | 2,126,355 | 2,243,122 | | Net Current Liabilities | (1,096,142) | (754,513) | | Net Liabilities | (99,640) | 423,762 | | Bank Balances and Cash | 5,200 | 35,268 | | Restricted Bank Deposits | 129,906 | 179,431 | - Net current liabilities increased from RMB 754,513 thousand as of December 31, 2024, to RMB 1,096,142 thousand as of June 30, 2025[6] - Equity attributable to owners of the Company turned from RMB 422,032 thousand as of December 31, 2024, to a deficit of RMB (101,370) thousand as of June 30, 2025[7] Notes to the Condensed Consolidated Financial Statements 1. Basis of Preparation The condensed consolidated financial statements are prepared under HKAS 34, with the directors affirming the Group's going concern despite net current liabilities - As of June 30, 2025, the Group's current liabilities exceeded current assets by RMB 1,096,142 thousand, and it recorded net liabilities of RMB 99,640 thousand[9] - The Board adopted the going concern basis for preparing the statements, based on existing bank credit facilities (RMB 1,646,358 thousand utilized, RMB 1,208,877 thousand unutilized) and projected operating cash flows[10][11] 2. Accounting Policies The condensed consolidated financial statements are prepared on a historical cost basis, with new HKFRS standards having no material impact - The Group first applied revised HKFRS accounting standards issued by the HKICPA, including HKAS 21 (Revised) Lack of Exchangeability[13] - The application of new accounting standards had no material impact on the financial position and performance for the current and prior periods[13] 3. Revenue and Segment Information The Group operates a single segment, primarily producing and selling cold-rolled and galvanized steel products, with revenue significantly declining - The Group operates a single business segment, primarily engaged in the production and sale of cold-rolled and galvanized steel products, mainly in China[14] Revenue by Product Type | Product Type | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Sales of Cold-rolled Steel Products | 341,036 | 1,737,573 | | Sales of Galvanized Steel Products | 209,050 | 1,148,899 | | Sales of Hot-rolled Steel Products and Others | 182,820 | 319,991 | | Total Revenue | 732,906 | 3,206,463 | - The China market (including Hong Kong) contributed over 99.6% of revenue, with minimal contribution from Southeast Asia[16][59] 4. Financial Income and Costs Net finance costs decreased to RMB (28,663) thousand for the six months ended June 30, 2025, mainly due to lower interest expenses on borrowings Net Financial Income and Costs | Metric | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Finance Costs | (29,472) | (53,216) | | Finance Income | 809 | 1,724 | | Net Finance Costs | (28,663) | (51,492) | - Net finance costs decreased by 44.5% year-on-year, primarily due to lower interest expenses on borrowings[17][72] 5. Income Tax (Credit) Expense The Group recorded an income tax credit of RMB 93,651 thousand for the period, primarily due to deferred tax credits Income Tax (Credit) Expense | Metric | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Current Tax Expense | – | 3,398 | | Deferred Tax | (93,651) | (806) | | Income Tax (Credit) Expense for the Period | (93,651) | 2,592 | - Income tax for the period shifted from an expense to a credit, mainly due to a deferred tax credit of RMB 93,651 thousand[18][73] 6. Profit (Loss) and Total Comprehensive (Expense) Income for the Period The Group reported a loss attributable to owners of RMB 523,148 thousand, a stark contrast to the prior period's profit, influenced by various expenses Profit (Loss) and Total Comprehensive (Expense) Income for the Period | Metric | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Profit (Loss) and Total Comprehensive (Expense) Income for the Period Attributable to Owners of the Company | (523,148) | 16,885 | | Total Employee Benefit Expenses | 57,365 | 70,288 | | Depreciation of Property, Plant and Equipment (Net) | 4,244 | 7,128 | | Depreciation of Right-of-use Assets (Net) | 2,513 | 2,587 | | Cost of Inventories Recognized as an Expense | 1,273,119 | 3,112,274 | | Loss on Disposal of Property, Plant and Equipment | 4,780 | 139 | - Total employee benefit expenses for the period decreased by 18.4% year-on-year to RMB 57,365 thousand[20] - Cost of inventories recognized as an expense significantly decreased by 59.1% year-on-year to RMB 1,273,119 thousand[20] 7. Earnings (Loss) Per Share Basic and diluted loss per share was RMB 87.19 cents for the period, reflecting a significant deterioration in performance Earnings (Loss) Per Share | Metric | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Profit (Loss) for the Period Used in Calculation | (523,148) | 16,885 | | Weighted Average Number of Ordinary Shares | 600,000,000 | 600,000,000 | | Basic and Diluted (Loss) Earnings Per Share (RMB cents) | (87.19) | 2.81 | - Due to the loss incurred for the period, the dilutive effect of share options was not assumed to be exercised, as the adjusted exercise price was higher than the average market price of the shares[22] 8. Dividends The Board did not recommend an interim dividend for the six months ended June 30, 2025, consistent with the prior period - No interim dividend was recommended for the six months ended June 30, 2025 (June 30, 2024: nil)[23][99] 9. Property, Plant and Equipment and Right-of-use Assets Capital expenditures for property, plant, and equipment significantly decreased, with no new land use rights acquired during the period - For the six months ended June 30, 2025, the Group acquired property, plant and equipment and incurred construction costs of RMB 65,139 thousand, a significant decrease from RMB 432,236 thousand in the prior period[24] - No new land use rights were acquired during the period, compared to the acquisition of new land use rights for a cash consideration of RMB 41,613 thousand in the prior period[24] 10. Trade and Other Receivables and Bills Receivable Total trade and bills receivables decreased, with a shift in the aging structure of bills receivable and some transferred with full recourse Trade and Other Receivables and Bills Receivable | Metric | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Trade Receivables (Net) | 38,468 | 44,577 | | Bills Receivable | 61,826 | 112,592 | | Prepayments to Suppliers | 480,042 | 541,000 | | Recoverable VAT | 129,898 | 127,988 | | Other Prepayments, Deposits and Other Receivables | 137,385 | 137,511 | | Total | 847,619 | 963,668 | - Total bills receivable decreased from RMB 112,592 thousand as of December 31, 2024, to RMB 61,826 thousand as of June 30, 2025[25] - As of June 30, 2025, bills receivable of RMB 39,449 thousand were transferred to banks and suppliers with full recourse, and the Group continues to recognize their carrying amount[27][28] 11. Trade and Other Payables and Accrued Expenses Total trade and other payables and accrued expenses decreased, with notable reductions in construction payables and other tax payables Trade and Other Payables and Accrued Expenses and Accrued Expenses | Metric | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Trade Payables | 121,142 | 113,481 | | Bills Payable | 73,237 | 80,000 | | Accrued Staff Costs | 11,285 | 24,060 | | Construction Payables | 81,136 | 144,248 | | Other Tax Payables | 2,422 | 22,384 | | Total | 314,333 | 423,414 | - Aging analysis of trade payables (excluding endorsed bills) showed a significant decrease in amounts within 30 days, while amounts within 181-365 days and over 1 year increased[31] - Total bills payable decreased from RMB 80,000 thousand as of December 31, 2024, to RMB 73,237 thousand as of June 30, 2025[33] 12. Amounts Due to Related Parties Amounts due to related parties decreased to RMB 1,201 thousand, representing non-trade, interest-free, unsecured balances repayable within twelve months Amounts Due to Related Parties | Related Party | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Mr. Xu | 958 | 3,014 | | Mr. Chen Chun Niu | 243 | 163 | | Total | 1,201 | 3,177 | - Amounts due to related parties are non-trade in nature, interest-free, unsecured, and repayable within twelve months from their respective dates[33] 13. Borrowings Total borrowings slightly decreased to RMB 2,362,062 thousand, comprising secured and unsecured bank borrowings and secured borrowings from independent entities Total Borrowings | Borrowing Type | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Fixed-rate Borrowings | 2,204,722 | 2,207,722 | | Floating-rate Borrowings | 157,340 | 302,721 | | Total Borrowings | 2,362,062 | 2,510,443 | - Bank borrowings due within one year decreased from RMB 1,257,356 thousand as of December 31, 2024, to RMB 905,909 thousand as of June 30, 2025[34] - The secured portion of the Group's borrowings is collateralized by certain assets and equity interests in a subsidiary, with some borrowings also personally guaranteed by certain directors of the Company[35] 14. Share Capital The company's issued share capital remained unchanged at 600,000,000 shares of HKD 0.01 each, totaling RMB 4,999 thousand Share Capital Details | Metric | Number of Shares | Share Capital (HKD thousand) | | :--- | :--- | :--- | | Authorized Share Capital | 8,000,000,000 | 80,000 | | Issued Share Capital | 600,000,000 | 6,000 | | Presented in Condensed Consolidated Statement of Financial Position (RMB thousand) | - | 4,999 | 15. Share-based Payments The number of outstanding share options decreased due to forfeiture, with 15,163,632 options remaining unexercised at HKD 2.75 each Share Option Movements | Status | Number of Share Options | | :--- | :--- | | Outstanding as of January 1, 2024 and December 31, 2024 | 25,272,720 | | Forfeited during the period | (10,109,088) | | Outstanding as of June 30, 2025 | 15,163,632 | - As of June 30, 2025, all 15,163,632 outstanding share options were exercisable at an exercise price of HKD 2.75 per share[41][42] 16. Capital Commitments Capital commitments for property, plant, and equipment decreased to RMB 100,929 thousand as of June 30, 2025 Capital Commitments | Category | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Contracted but not provided for capital expenditure for acquisition of property, plant and equipment | 100,929 | 112,074 | 17. Pledge of Assets Certain borrowings are secured by the Group's assets, with a total carrying value of RMB 1,851,117 thousand as of June 30, 2025 Carrying Value of Pledged Assets | Asset Class | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Trade Receivables | – | 9,259 | | Property, Plant and Equipment | 1,499,037 | 1,451,558 | | Right-of-use Assets | 222,174 | 237,239 | | Restricted Bank Deposits | 129,906 | 179,431 | | Total | 1,851,117 | 1,877,487 | - Certain borrowings of the Group are secured by its assets, including property, plant and equipment, right-of-use assets, and restricted bank deposits[44] 18. Related Party Disclosures The Group has outstanding balances and interest expenses with related parties, with some borrowings personally guaranteed by directors - Details of outstanding balances with related parties are disclosed in the condensed consolidated statement of financial position and Note 12[45] Related Party Transactions | Related Party | Nature of Transaction | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | :--- | | Hua Jin Holdings Pte. Ltd | Interest Expense on Lease Liabilities | 8 | 1 | | 东方溢进有限公司 | Interest Expense on Lease Liabilities | 11 | 12 | - Certain borrowings of the Group are personally guaranteed by certain directors of the Company[47] Key Management Personnel Remuneration | Remuneration Type | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Salaries, Allowances and Other Benefits | 2,647 | 2,817 | | Retirement Benefit Scheme Contributions | 91 | 152 | | Share-based Payment Expenses | – | 245 | | Total | 2,738 | 3,214 | Management Discussion and Analysis Business Review The Group, a cold-rolled steel processor, expanded into port operations, but faced significant revenue and profit declines due to market contraction and tariffs - The Group is primarily engaged in processing hot-rolled steel coils into cold-rolled and galvanized steel products, and since 2024, in port operations and related services[49] - Huajin Port has invested approximately RMB 750.0 million, with three existing berths and an expected annual throughput of over 15 million tons[50] - For the six months ended June 30, 2025, revenue was approximately RMB 732.9 million, a 77.1% year-on-year decrease, with a loss attributable to owners of approximately RMB 523.1 million[52] - Combined sales volume of cold-rolled and galvanized steel products decreased by 78.6%, primarily due to punitive tariffs imposed by major global importers on steel products, leading to significant declines in downstream customers' export sales volume and average selling prices[54][66] Financial Review The Group's financial performance deteriorated significantly, with substantial declines in revenue, gross profit, and investment income, leading to a net loss Revenue (Financial Review) Revenue significantly decreased by 77.1% to RMB 732.9 million, driven by lower sales volumes and average selling prices of steel products Revenue Details | Product Type | 2025 (RMB thousand) | 2025 (%) | 2024 (RMB thousand) | 2024 (%) | | :--- | :--- | :--- | :--- | :--- | | Sales of Cold-rolled Steel Products | 341,036 | 46.6 | 1,737,573 | 54.2 | | Sales of Galvanized Steel Products | 209,050 | 28.5 | 1,148,899 | 35.8 | | Sales of Hot-rolled Steel Products and Others | 182,820 | 24.9 | 319,991 | 10.0 | | Total Revenue | 732,906 | 100.0 | 3,206,463 | 100.0 | - Cold-rolled steel product sales volume decreased by 78.3% to 91,262 tons, and galvanized steel product sales volume decreased by 79.1% to 54,232 tons[57] - Average selling price of cold-rolled steel products fell from RMB 4,137 per ton to RMB 3,737 per ton, and galvanized steel products from RMB 4,437 per ton to RMB 3,855 per ton[58] Cost of Sales Cost of sales decreased by 59.1% to RMB 1,273.1 million, primarily due to reduced direct material costs from lower sales volumes Cost of Sales Details | Category | 2025 (RMB thousand) | 2025 (%) | 2024 (RMB thousand) | 2024 (%) | | :--- | :--- | :--- | :--- | :--- | | Direct Materials | 1,118,522 | 87.9 | 2,865,012 | 92.1 | | Utilities | 32,470 | 2.6 | 104,919 | 3.4 | | Direct Labor | 35,331 | 2.8 | 47,511 | 1.5 | | Depreciation Expense | 49,958 | 3.9 | 46,294 | 1.5 | | Consumables | 32,020 | 2.4 | 43,089 | 1.4 | | Others | 4,818 | 0.4 | 5,449 | 0.1 | | Total | 1,273,119 | 100.0 | 3,112,274 | 100.0 | - Reduced direct material costs were the primary reason for the decrease in cost of sales, accounting for 87.9% of total cost of sales[62] - Depreciation expense increased by 8.0% to RMB 50.0 million, mainly due to increased depreciation of property, plant and equipment[64] Gross (Loss) Profit The Group recorded a gross loss of RMB 540.2 million, with a gross loss margin of 73.7%, a sharp reversal from the prior period's gross profit - The Group recorded a gross loss of approximately RMB 540.2 million, compared to a gross profit of approximately RMB 94.2 million in the prior period[66] - The gross loss margin was approximately 73.7%, compared to a gross profit margin of 2.9% in the prior period, mainly due to punitive tariffs, decreased export sales volume and prices of downstream customers, delayed or cancelled orders, and failure to meet minimum off-take requirements from steel mills[66] Other Income, Other Gains and Losses (Net) Other income, other gains and losses turned into a net loss of RMB 2.1 million, mainly due to reduced VAT credits and derivative financial instrument gains - A net loss of approximately RMB 2.1 million was recorded for the period, compared to a net gain of RMB 24.5 million in the prior period[67] - Key reasons include a RMB 17.2 million reduction in additional VAT credit deductions, a RMB 3.0 million decrease in gains from commodity futures contract deposits, and an approximately RMB 4.6 million increase in loss on disposal of property, plant and equipment[68] Selling Expenses Selling expenses decreased by 17.9% to RMB 13.8 million, primarily attributable to the significant reduction in revenue - Selling expenses decreased by approximately RMB 3.0 million, or 17.9%, to RMB 13.8 million[69] Administrative Expenses Administrative expenses decreased by 13.3% to RMB 32.0 million, mainly due to reductions in salaries, consumables, and entertainment expenses - Administrative expenses decreased by approximately RMB 4.9 million, or 13.3%, to RMB 32.0 million[70] - The main reasons were a decrease of approximately RMB 1.9 million in administrative salaries and employee benefits, RMB 1.5 million in consumables, and RMB 1.5 million in entertainment expenses[70] Investment Income Investment income was nil for the period, compared to RMB 6.1 million in the prior period, due to reduced realized gains from commodity futures - Investment income was nil for the period, compared to approximately RMB 6.1 million in the prior period, mainly from realized net gains on derivative financial instruments from commodity futures contracts[71] Finance Costs Finance costs decreased by 44.5% to RMB 29.5 million, primarily due to a reduction in the general interest rates on most borrowings - Finance costs decreased by approximately RMB 23.7 million, or 44.5%, to RMB 29.5 million[72] - The main reason was a decrease in the general interest rates on most borrowings[72] Income Tax Expense The Group recorded a deferred tax credit of RMB 93.7 million for the period, a shift from the prior period's income tax expense - A deferred tax credit of approximately RMB 93.7 million was recorded for the period, compared to an income tax expense of approximately RMB 3.4 million and a deferred tax credit of approximately RMB 0.8 million in the prior period[73] (Loss) Profit for the Period The Group reported a loss attributable to owners of RMB 523.1 million, a significant deterioration from the prior period's profit - Loss attributable to owners of the Company was approximately RMB 523.1 million, compared to a profit of approximately RMB 16.9 million in the prior period[74] Liquidity and Financial Resources The Group's liquidity deteriorated with reduced cash, increased net current liabilities, and higher debt-to-asset ratio, despite available unused bank facilities Key Liquidity and Financial Resources Metrics | Metric | June 30, 2025 (RMB thousand/%) | December 31, 2024 (RMB thousand/%) | | :--- | :--- | :--- | | Bank Balances and Cash | 5,200 | 35,300 | | Restricted Bank Deposits | 129,900 | 179,400 | | Net Current Liabilities | 1,096,100 | 754,500 | | Net Liabilities | 99,600 | (423,800) (Net Assets) | | Current Ratio | 48.4% | 66.4% | | Total Borrowings | 2,362,100 | 2,510,400 | | Total Assets | 3,302,500 | 3,716,700 | | Debt-to-Asset Ratio | 71.5% | 67.5% | - Bank balances and cash decreased by 85.3% to RMB 5.2 million, and restricted bank deposits decreased by 27.6% to RMB 129.9 million[75] - The Group has approximately RMB 1,208.8 million in unused bank financing facilities, and directors expect all utilized bank financing facilities to be renewed upon maturity[77] - Certain borrowings are personally guaranteed by directors, and Mr. Xu agreed to provide necessary financial support to meet financial obligations for the next fifteen months[78] Foreign Exchange Risk The Group faces foreign exchange risk from USD to RMB fluctuations, with some revenue and bank balances denominated in foreign currencies - The Group faces foreign exchange risk from USD to RMB fluctuations, with some revenue from overseas sales settled in USD[79] - Bank balances denominated in USD, HKD, and SGD also pose foreign exchange risk[79] - The Group currently has no foreign exchange hedging policy, but management closely monitors and considers hedging significant foreign exchange risks[79] Financial Instruments The Group did not enter into any financial instruments for hedging purposes during the period, except for commodity futures contracts - The Group did not enter into any financial instruments for hedging purposes during the reporting period, except for commodity futures contracts[80] Significant Acquisitions and Disposals The Group had no significant acquisitions or disposals of subsidiaries, associates, or joint ventures during the reporting period - The Group had no significant acquisitions or disposals of subsidiaries, associates, or joint ventures during the reporting period[81] Borrowings (MDA) Details of the Group's borrowings as of June 30, 2025, are provided in Note 13 to the condensed consolidated financial statements - Details of the Group's borrowings as of June 30, 2025, are provided in Note 13 to the condensed consolidated financial statements[82] Capital Structure Details of the Group's share capital are provided in Note 14 to the condensed consolidated financial statements - Details of the share capital are provided in Note 14 to the condensed consolidated financial statements[83] Capital Commitments (MDA) Details of the Group's capital commitments are provided in Note 16 to the condensed consolidated financial statements - Details of capital commitments are provided in Note 16 to the condensed consolidated financial statements[84] Pledge of Assets (MDA) Details of the Group's pledge of assets are provided in Note 17 to the condensed consolidated financial statements - Details of pledged assets are provided in Note 17 to the condensed consolidated financial statements[85] Contingent Liabilities As of June 30, 2025, the Group had no contingent liabilities other than guarantees provided to banks - The Company provided guarantees to banks as collateral for financing facilities granted to certain subsidiaries in China[86] - As of June 30, 2025, the Group had not provided any guarantees to third parties and had no contingent liabilities[86] Employees The Group's total number of full-time employees and staff costs decreased, with no share-based payment expenses recognized for the period - The Group's total number of full-time employees decreased from 1,492 as of December 31, 2024, to 1,165 as of June 30, 2025[87] - For the six months ended June 30, 2025, total staff costs (including directors' emoluments) were approximately RMB 56.6 million, a decrease from RMB 70.3 million in the prior period[87] - No share-based payment expenses were recognized for the period, compared to approximately RMB 0.2 million recognized in the prior period[87] Future Outlook The Group is strategically transforming its business model to a diversified, integrated industrial ecosystem, leveraging its port and industrial park assets - The Group plans to build a full industry chain ecosystem, transitioning its profit model from single cold-rolled coil production and sales to a diversified and integrated approach[88] 1. Leveraging Port Advantages to Expand Steel Handling and Integrated Services Huajin Port aims to become a major Greater Bay Area hub by expanding its steel handling capacity and introducing diversified services - Huajin Port has built three 30,000-ton berths, with an annual throughput capacity of 20 million tons, capable of handling all types of cargo including containers, steel coils, sections, and bulk goods[89] - Upon reaching full capacity, an annual handling volume of 18 to 20 million tons is expected, significantly reducing the comprehensive cost of southbound steel through one-stop services[90] 2. Building a Full Metal Industry Chain Processing and Warehousing Platform Huajin Industrial Park will develop a digitalized processing and warehousing platform, including a modern metal futures and spot delivery warehouse - Huajin Industrial Park has an annual processing capacity of 3 million tons, offering integrated processing and warehousing services[91] - In the future, an IoT platform integrating IoT, edge computing, and AI analysis will be built to achieve full-process digital management of goods and establish a modern public warehouse for metal futures and spot regulated trade delivery in the Greater Bay Area[91] 3. Developing Bulk Raw Material Trade for High-Calcium Stone and Construction Aggregates The Group plans to expand bulk raw material trade, leveraging port advantages for direct sourcing and long-term partnerships with steel mills - Leveraging the port's navigation capacity and 600 mu of rear yard resources, high-calcium stone and construction aggregates will be directly sourced from quality mining areas in Guangxi[92] - Through a 'two-way cargo flow' model, high-calcium stone and construction aggregates will be returned to steel mills, forming long-term partnerships and expanding market coverage in key national regions[93] 4. Expanding Logistics and Ferrous Metal Trading Market Services The Group is expanding its logistics and developing an integrated online and offline metal trading market, including supply chain finance - The road transportation segment has been launched, with an estimated annual demand of 6 to 10 million tons for road transportation within the park, expected to increase business revenue and profit[94] - The Group will promote supply chain finance businesses such as centralized steel procurement, financing trade, and consignment sales, and build an integrated online and offline metal trading market covering all types of steel products[94] 5. Diversifying Trade and Import and Export Businesses The Group plans to expand import and export trade across various bulk commodities to diversify revenue streams and mitigate operational risks - Plans to expand import and export businesses, open cross-border trade channels, leveraging the 30,000-ton berth advantage[95] - Gradually expanding into bulk commodity trade areas such as various steel products, stainless steel, timber, grain, white sugar, and high-calcium stone, to diversify operational risks[95] 6. Strategic Vision The Group aims to become a diversified industrial group, integrating port operations, metal processing, logistics, and trade for sustainable growth - Leveraging the river-sea intermodal transport advantages of the Xijiang Golden Waterway and Yamen Estuary, to build a diversified industrial group[96] - Future profitability will be achieved through diversified business synergy, realizing stable and sustainable growth[96] Corporate Governance and Other Information Directors' Rights to Acquire Shares or Debentures No arrangements existed for directors to acquire shares or debentures, other than disclosed share option interests, during the period - Other than the disclosed share option interests, no other arrangements existed during the reporting period for directors and chief executives to benefit from acquiring shares or debentures[97] Purchase, Sale or Redemption of the Company's Listed Securities Neither the Company nor its subsidiaries purchased, sold, or redeemed any listed securities during the six months ended June 30, 2025 - Neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the reporting period[98] Interim Dividend (CGA) The Board did not recommend an interim dividend for the six months ended June 30, 2025, consistent with the prior period - The Board did not recommend an interim dividend for the six months ended June 30, 2025 (six months ended June 30, 2024: nil)[99] Corporate Governance Practices The Company adhered to all applicable code provisions of the Corporate Governance Code during the reporting period - The Company adopted the Corporate Governance Code set out in Appendix 14 of the Listing Rules and complied with all applicable code provisions for the six months ended June 30, 2025[101] Compliance with the Model Code for Securities Transactions by Directors All directors confirmed compliance with the Model Code for Securities Transactions by Directors of Listed Issuers during the reporting period - All directors confirmed compliance with the Model Code for Securities Transactions by Directors of Listed Issuers during the reporting period[102] Sufficiency of Public Float The Company maintained the prescribed public float as required by the Listing Rules throughout the reporting period and up to the announcement date - The Company maintained the prescribed public float as required by the Listing Rules throughout the reporting period and up to the announcement date[103] Audit Committee The Audit Committee, comprising three independent non-executive directors, reviewed and oversaw the Group's financial reporting process - The Audit Committee comprises three independent non-executive directors, with Mr. Chan Oi Fat as chairman[104] - The Audit Committee is responsible for reviewing and overseeing the Group's financial reporting process[104] Review of Financial Statements The Audit Committee reviewed the unaudited condensed consolidated financial statements and confirmed their fair presentation in accordance with applicable accounting standards - The Audit Committee reviewed the Group's unaudited condensed consolidated financial statements for the six months ended June 30, 2025[105] - The Audit Committee is confident that the financial statements are prepared in accordance with applicable accounting standards and fairly present the financial position and results[105] Publication of Interim Results Announcement and Interim Report The interim results announcement is published on the HKEX and company websites, with the interim report to follow for shareholders - This interim results announcement has been published on the HKEX website (www.hkexnews.hk) and the Company's website (www.huajin-hk.com)[106](index=106&type=chunk) - The interim report, containing all information required by the Listing Rules, will be dispatched to shareholders and published on the aforementioned websites in due course[106] Events After Reporting Period Changes in company secretary appointments occurred after the reporting period, ensuring compliance with Listing Rules - Mr. Wong Chak Keung resigned as company secretary and financial controller on July 3, 2025, causing the Company to temporarily not comply with Listing Rule 3.05[108] - Ms. Cheung Lai King was appointed on July 7, 2025, bringing the Company back into compliance with Listing Rule 3.05[108] - Ms. Lam Hoi Ki was appointed as company secretary on July 10, 2025, bringing the Company back into compliance with Listing Rule 3.28[108] Acknowledgement The Board expressed gratitude to shareholders, customers, suppliers, directors, and staff for their support and contributions - The Board extends its sincere gratitude to shareholders, customers, suppliers, directors, and all Group colleagues[110]