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天平道合(08403) - 2025 - 中期业绩
DOWWAYDOWWAY(HK:08403)2025-08-29 13:03

Company Information and Financial Summary Company Overview Dowway Holdings Limited announced its unaudited interim results for H1 2025, revealing a significant financial performance decline - Company Name: Dowway Holdings Limited, Stock Code: 84032 - Reporting Period: For the six months ended June 30, 20252 - Announcement Type: Interim results announcement, including unaudited condensed consolidated financial statements and comparative figures2 Financial Summary Revenue decreased by 23.20% and gross profit by 29.10%, resulting in a RMB 12.79 million loss attributable to equity holders H1 2025 Key Financial Indicators Comparison | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 44.87 | 58.42 | -23.20% | | Gross Profit | 4.85 | 6.84 | -29.10% | | Loss/(Profit) attributable to owners of the Company | (12.79) | 4.54 | Shifted from profit to loss | | Basic Loss Per Share (RMB cents) | (8.64) | 3.67 | Shifted from profit to loss | Financial Statements Condensed Consolidated Statement of Comprehensive Income For H1 2025, the Group saw revenue decline, operating results shift from profit to loss, and a total comprehensive loss of RMB 12.79 million Condensed Consolidated Statement of Comprehensive Income (Summary) | Indicator | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Revenue | 44,866 | 58,416 | | Gross Profit | 4,850 | 6,839 | | Operating (Loss)/Profit | (12,361) | 6,402 | | (Loss)/Profit Before Income Tax | (12,639) | 6,064 | | (Loss)/Profit for the Period | (12,785) | 4,548 | | Basic (Loss)/Earnings Per Share attributable to owners of the Company (RMB cents) | (8.64) | 3.67 | Condensed Consolidated Balance Sheet As of June 30, 2025, total assets slightly decreased, non-current assets significantly rose, and equity attributable to owners substantially increased Condensed Consolidated Balance Sheet (Summary) | Indicator | As of June 30, 2025 (RMB thousand) | As of Dec 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Total Non-current Assets | 9,032 | 1,606 | | Total Current Assets | 116,751 | 129,510 | | Total Assets | 125,783 | 131,116 | | Equity attributable to owners of the Company | 13,271 | 4,266 | | Total Current Liabilities | 113,508 | 125,091 | | Total Liabilities | 113,844 | 127,427 | - Total non-current assets increased from RMB 1,606 thousand as of December 31, 2024, to RMB 9,032 thousand as of June 30, 2025, primarily due to new intangible assets of RMB 750 thousand and goodwill of RMB 7,243 thousand5 - Equity attributable to owners of the Company increased from RMB 4,266 thousand as of December 31, 2024, to RMB 13,271 thousand as of June 30, 20255 Condensed Consolidated Statement of Changes in Equity Despite a comprehensive loss, equity attributable to owners increased due to significant rises in share capital and share premium from share placement activities Condensed Consolidated Statement of Changes in Equity (Summary) | Indicator | As of June 30, 2025 (RMB thousand) | As of Dec 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Share Capital | 1,937 | 1,632 | | Share Premium | 111,874 | 91,149 | | Accumulated Losses | (94,405) | (82,380) | | Equity attributable to owners of the Company | 13,271 | 4,266 | | Total Equity | 11,939 | 3,689 | - Total comprehensive loss for the period was RMB 12,025 thousand6 - Share capital increased by RMB 305 thousand and share premium by RMB 20,725 thousand through share placement, contributing a total equity increase of RMB 21,030 thousand6 Condensed Consolidated Cash Flow Statement Operating cash outflow decreased, investing cash outflow significantly increased, but strong financing cash inflow resulted in a net increase in cash and cash equivalents Condensed Consolidated Cash Flow Statement (Summary) | Indicator | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | (8,153) | (9,187) | | Net Cash (Used in)/Generated from Investing Activities | (1,786) | 15 | | Net Cash Generated from Financing Activities | 19,110 | 7,867 | | Net Increase/(Decrease) in Cash and Cash Equivalents | 9,171 | (1,305) | | Cash and Cash Equivalents at End of Period | 15,382 | 11,177 | - Net cash from investing activities shifted from a net inflow of RMB 15 thousand in H1 2024 to a net outflow of RMB 1,786 thousand in H1 2025, primarily due to the purchase of intangible assets and acquisition of investments7 - Net cash generated from financing activities significantly increased from RMB 7,867 thousand in H1 2024 to RMB 19,110 thousand in H1 2025, mainly driven by proceeds from placing ordinary shares and bank borrowings7 Notes to the Financial Statements Basis of Preparation and Accounting Policies The interim financial information is prepared under HKAS 34 and GEM Listing Rules, consistent with the 2024 annual report's accounting policies - Financial information is prepared in accordance with Hong Kong Accounting Standard 34 and Chapter 18 of the GEM Listing Rules12 - The accounting policies adopted are consistent with those applied in the financial statements for the year ended December 31, 202413 Application of Amendments to Hong Kong Financial Reporting Standards The Group adopted new and amended HKFRS, leading to new policies and disclosures but no significant financial impact, with un-effective standards under evaluation - The newly adopted and amended standards had no significant impact on the financial statements, but led to new accounting policies and additional disclosures14 - The Group is currently assessing the impact of new and amended Hong Kong Financial Reporting Standards that are not yet effective14 Estimates Interim financial statements involve management's judgments and estimates on accounting policies and financial amounts, where actual results may differ - Significant judgments and estimates made by management in preparing the interim financial information are consistent with those made in preparing the 2024 annual report15 Financial Risk Management The Group manages market, credit, and liquidity risks, with no significant changes to its risk management policies since the reporting period end - The Group's business is exposed to market risk (including foreign exchange risk), credit risk, and liquidity risk16 - There have been no changes to risk management policies since the end of the reporting period17 Financial Risk Factors The Group's business primarily faces market, credit, and liquidity risks, with detailed management information available in the annual financial report - Financial risk factors include market risk (foreign exchange risk), credit risk, and liquidity risk16 Liquidity Risk The Group's finance department continuously forecasts and monitors cash flows to ensure adequate liquidity for operational needs - The Group's finance department monitors liquidity requirements through rolling forecasts to ensure sufficient cash on hand for operations18 Revenue Information Total revenue decreased year-on-year, with declines in most segments, but significant digital platform service revenue growth partially offset the reduction Revenue Details (by Service Type) | Revenue Source | H1 2025 (RMB thousand) | % of Total | H1 2024 (RMB thousand) | % of Total | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Automotive-related Exhibition and Event Services | 12,553 | 27.98% | 24,837 | 42.52% | -49.46% | | Non-automotive-related Exhibition and Event Services | 22,131 | 49.33% | 23,864 | 40.85% | -7.26% | | Showroom-related Services | 114 | 0.25% | 1,544 | 2.64% | -92.62% | | Sales of Consumer Products | 4,898 | 10.92% | 8,143 | 13.94% | -39.97% | | Rental Income | 81 | 0.18% | – | 0% | New | | Provision of Digital Platform Services | 5,089 | 11.34% | 28 | 0.05% | +18075% | | Total Revenue | 44,866 | 100% | 58,416 | 100% | -23.20% | Other Income Other income significantly decreased, primarily due to a substantial reduction in the reversal of expected credit losses on trade receivables Other Income Details | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Exchange Gain/(Loss) | 2 | (43) | | Government Grants | 30 | 16 | | Others | 5 | 294 | | Reversal of Expected Credit Losses on Trade Receivables | 513 | 8,745 | | Reversal of Expected Credit Losses on Contract Assets | – | 566 | | Total | 550 | 9,578 | Income Tax Expense Income tax expense significantly decreased, aligning with the Group's loss position for the reporting period Income Tax Expense | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Current Tax on Profit for the Period | 146 | 1,516 | | Income Tax Expense | 146 | 1,516 | Loss/Earnings Per Share The company shifted from earnings to a basic loss per share of RMB 8.64 cents, primarily driven by the period's overall loss Loss/Earnings Per Share | Indicator | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Total (Loss)/Profit attributable to shareholders (RMB) | (12,785,000) | 4,548,000 | | Weighted Average Number of Ordinary Shares in Issue (thousand shares) | 148,000 | 124,000 | | Basic (Loss)/Earnings Per Share (RMB cents) | (8.64) | 3.67 | - No diluted loss/earnings per share is presented as there were no potentially dilutive ordinary shares during the reporting period24 - China Enterprise Income Tax is calculated at a statutory rate of 25%, while Hong Kong-registered entities have a profits tax rate of 8.25%, with no Hong Kong profits tax provision for the period25 Trade Receivables Net trade receivables decreased year-on-year as of June 30, 2025, driven by a lower total amount and a slight reduction in impairment provisions Trade Receivables Net and Ageing Analysis | Indicator | As of June 30, 2025 (RMB thousand) | As of Dec 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Trade Receivables | 45,928 | 67,943 | | Less: Impairment Provision for Trade Receivables | (17,655) | (18,075) | | Trade Receivables — Net | 28,273 | 49,868 | | Ageing Analysis: | | | | Up to 90 days | 18,793 | 35,895 | | 91 to 180 days | 535 | 3,498 | | Over 180 days | 8,945 | 10,475 | Deposits, Prepayments and Other Receivables Net deposits, prepayments, and other receivables slightly increased as of June 30, 2025, mainly due to increased loans to employees Deposits, Prepayments and Other Receivables | Item | As of June 30, 2025 (RMB thousand) | As of Dec 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Deposits | 351 | 336 | | Loans to Employees | 1,452 | 591 | | Prepayments | 18,118 | 18,139 | | Total | 19,921 | 19,066 | Share Capital and Share Premium Share capital and share premium significantly increased through ordinary share placements, leading to substantial growth in total issued and paid capital Share Capital and Share Premium Movement | Item | Number of Shares | Par Value of Ordinary Shares (USD) | Equivalent of Ordinary Shares (RMB thousand) | Share Premium (RMB thousand) | Total (RMB thousand) | | :--- | :--- | :--- | :--- | :--- | :--- | | Balance as of Dec 31, 2024 and Jan 1, 2025 | 127,000,000 | 254,000 | 1,632 | 91,149 | 92,781 | | Placement of Ordinary Shares | 21,000,000 | 42,000 | 305 | 20,725 | 21,030 | | Balance as of June 30, 2025 | 148,000,000 | 296,000 | 1,937 | 111,874 | 113,811 | - A placement of 9,000,000 ordinary shares was completed on April 9, 2025, raising net proceeds of approximately HKD 8.95 million30 - A placement of 12,000,000 ordinary shares was completed on June 17, 2025, raising net proceeds of approximately HKD 12.88 million30 Trade and Other Payables Total trade and other payables decreased year-on-year, with trade payables and taxes payable declining, while amounts due to directors and employee benefits rose Trade and Other Payables Details and Ageing Analysis | Item | As of June 30, 2025 (RMB thousand) | As of Dec 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Trade Payables | 53,693 | 73,689 | | Amounts Due to Directors | 1,576 | 644 | | Employee Benefits Payable | 6,338 | 4,176 | | Other Taxes Payable | 5,310 | 8,246 | | Others | 3,696 | 4,517 | | Total | 70,613 | 91,272 | | Trade Payables Ageing Analysis: | | | | 0 to 90 days | 33,106 | 40,164 | | 91 to 180 days | 4,872 | 16,566 | | 181 to 365 days | 10,808 | 10,027 | | Over 365 days | 4,907 | 6,932 | Dividends The Group neither paid nor declared any dividends during the reporting period or the corresponding period last year - The Group neither paid nor declared any dividends for the periods ended June 30, 2024, and 202532 Related Party Transactions The Group had balances with related parties, showing an increase in amounts due to directors and a significant rise in key management personnel compensation Balances with Related Parties | Item | As of June 30, 2025 (RMB thousand) | As of Dec 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Amounts Due to Directors of the Company | 1,576 | 644 | Key Management Personnel Compensation | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Salaries and Wages | 3,731 | 1,105 | | Pension Scheme and Other Social Security Contributions | 374 | 152 | | Housing Benefits | – | 28 | | Other Costs and Benefits | – | 6 | | Total | 4,105 | 1,291 | Events After the Reporting Period After the reporting period, the company completed a share subscription agreement for 6,000,000 shares with Executive Director Mr. Li Huaguo on August 8, 2025 - A subscription agreement with Mr. Li for 6,000,000 shares was entered into on May 27, 2025, and completed on August 8, 202535 Market and Business Review Market Review The global exhibition industry fully recovered in 2024, with China's market leading, driven by new energy vehicles, cultural IP commercialization, and government support - In 2024, the global exhibition industry fully recovered, with total exhibition area reaching approximately 138 million square meters, and the Asia-Pacific region accounting for 25.8%37 - China's indoor net exhibition area reached 12.4 million square meters, ranking first globally, with the market recovering and surpassing pre-pandemic levels37 - The growth of China's exhibition industry is primarily driven by the popularization of new energy vehicle exhibitions, commercialization of intellectual property from cultural events, and government policy support40 - The output multiplier for the exhibition industry is estimated at 2.45, meaning every RMB 1 of direct exhibition expenditure generates an additional RMB 1.45 in indirect and induced economic activity39 Business Review The Group maintained its leading position in exhibition and event management, completing 38 projects with revenue of RMB 44.87 million (23.20% decrease), while SaaS platform services grew significantly - The Group maintains a leading position in the exhibition and event management industry, particularly in automotive display and promotion42 - During the reporting period, 38 exhibition and event projects, 2 showroom projects, digital platform systems, and one-stop value chain services were completed42 - Total revenue was approximately RMB 44.87 million, a year-on-year decrease of approximately 23.20%, but SaaS platform service output grew significantly42 - The Group has invested in new business branches and digital capabilities to adapt to the industry's shift towards a high-tech, comprehensive service model42 Financial Review Revenue Total revenue decreased by 23.20% year-on-year due to core business transformation and a drop in showroom revenue, partially offset by strong SaaS platform service growth Revenue Composition and Year-on-Year Change | Revenue Source | H1 2025 (RMB thousand) | % of Total | H1 2024 (RMB thousand) | % of Total | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Automotive-related Exhibitions and Events | 12,553 | 27.98% | 24,837 | 42.52% | -49.46% | | Non-automotive-related Exhibitions and Events | 22,131 | 49.33% | 23,864 | 40.85% | -7.26% | | Showroom-related Services | 114 | 0.25% | 1,544 | 2.64% | -92.62% | | One-stop Value Chain Services | 4,898 | 10.92% | 8,143 | 13.94% | -39.97% | | SaaS Platform Services | 5,089 | 11.34% | 28 | 0.05% | +18075% | | Rental Income | 81 | 0.18% | – | 0% | New | | Total | 44,866 | 100% | 58,416 | 100% | -23.20% | - The decline in revenue is primarily due to the ongoing transformation and optimization of the core business structure, leading to a significant decrease in showroom-related activity revenue46 - SaaS platform service revenue significantly increased from RMB 28 thousand to RMB 5.09 million, partially offsetting the overall revenue decline4648 Cost of Services/Products Service costs decreased by 22.37% year-on-year, mainly due to lower supplier costs for exhibition services, but rising sales costs emphasize the need for operational efficiency Service Cost Details | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Cost of Services Provided by Suppliers | 27,202 | 38,503 | | Cost of Consumer Products | 5,008 | 8,062 | | Staff Costs | 2,660 | 3,373 | | Operating Lease Rentals and Related Expenses for Buildings | 3,845 | 375 | | Total | 40,016 | 51,577 | - Service costs decreased by approximately 22.37%, or RMB 11.54 million year-on-year51 - The primary reason for the decrease in service costs was a reduction of approximately 29.35% in costs for services provided by suppliers for exhibition and event-related services52 Gross Profit and Gross Margin Gross profit decreased by 29.10% year-on-year, with the gross margin declining from 11.71% to 10.81% Gross Profit and Gross Margin | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Gross Profit | 4.85 | 6.84 | -29.10% | | Gross Margin | 10.81% | 11.71% | -0.90 percentage points | Selling Expenses Selling expenses surged by 110.01% year-on-year, driven by significant increases in supplier service costs, entertainment expenses, and other expenditures Selling Expenses Details | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Cost of Services Provided by Suppliers | 70 | – | | Entertainment Expenses | 407 | 207 | | Others | 1,946 | 579 | | Total | 2,688 | 1,280 | - Selling expenses increased by approximately 110.01%, or RMB 1.41 million, year-on-year57 - Key growth factors include an increase of RMB 70 thousand in costs for services provided by suppliers, approximately RMB 0.20 million in entertainment expenses, and approximately RMB 1.37 million in other expenses57 Administrative Expenses Administrative expenses significantly increased by 80.86% year-on-year, primarily driven by a substantial rise in staff costs Administrative Expenses Details | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Staff Costs | 9,654 | 3,328 | | Management Consulting and Other Service Expenses | 2,986 | 3,176 | | Auditor's Remuneration | 548 | 940 | | Total | 14,744 | 8,152 | - Administrative expenses increased by approximately 80.86%, or RMB 6.59 million, year-on-year60 - The main reason for the increase in administrative expenses was the rise in staff costs from approximately RMB 3.33 million to approximately RMB 9.66 million60 Other Income — Net Net other income significantly decreased, primarily due to a substantial reduction in the reversal of expected credit losses on trade receivables Other Income — Net | Item | H1 2025 (RMB million) | H1 2024 (RMB million) | Year-on-Year Change (RMB million) | | :--- | :--- | :--- | :--- | | Net Other Income | 0.55 | 9.58 | -9.03 | - Primarily due to the reversal of expected credit losses on trade receivables and government grants61 Finance Income Finance income slightly decreased, primarily derived from interest on bank balances and deposits Finance Income | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Finance Income | 8 | 15 | Finance Expenses Finance expenses decreased, mainly comprising interest expenses on bank borrowings and lease liabilities Finance Expenses | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Finance Expenses | 286 | 353 | Loss Before Income Tax The Group recorded a loss before income tax of RMB 12.64 million, shifting from profit, primarily due to increased selling and administrative expenses (Loss)/Profit Before Income Tax | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | | :--- | :--- | :--- | | (Loss)/Profit Before Income Tax | (12.64) | 6.06 | - Primarily due to increased selling and administrative expenses during the reporting period64 Income Tax Expense Income tax expense significantly decreased, aligning with the company's shift from a profitable to a loss-making financial position Income Tax Expense | Indicator | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Income Tax Expense | 146 | 1,516 | Loss for the Period The Group recorded a loss of RMB 12.79 million for the period, a significant shift from the RMB 4.55 million profit in the prior year (Loss)/Profit for the Period | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | | :--- | :--- | :--- | | (Loss)/Profit for the Period | (12.79) | 4.55 | Liquidity and Financial Resources Capital Structure The Group's capital structure remained largely unchanged during the reporting period, except for equity fundraising activities - Apart from equity fundraising activities, there were no significant changes to the Group's capital structure during the reporting period67 Cash Position Cash and cash equivalents increased to RMB 15.38 million as of June 30, 2025, primarily driven by significant net cash inflow from financing activities Cash Flow Data | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | (8,153) | (9,187) | | Net Cash (Used in)/Generated from Investing Activities | (1,786) | 15 | | Net Cash Generated from Financing Activities | 19,110 | 7,867 | | Net Increase/(Decrease) in Cash and Cash Equivalents | 9,171 | (1,262) | | Cash and Cash Equivalents at End of Period | 15,382 | 11,177 | - Cash and cash equivalents at the end of the period were approximately RMB 15.38 million, primarily denominated in RMB69 Borrowings As of June 30, 2025, bank borrowings increased, with private borrowings and acceptance bills present, but no other outstanding debt instruments - Bank borrowings amounted to RMB 22 million (December 31, 2024: RMB 12.98 million)70 - Private borrowings balance was RMB 5.58 million70 - Acceptance bills of RMB 6.58 million were used to acquire a company71 - Directors confirmed no significant adverse changes in debt and contingent liabilities during the reporting period72 Pledge of Assets The Group had no assets pledged as of June 30, 2025 - The Group had no assets pledged as of June 30, 202573 Gearing Ratio The Group's gearing ratio significantly decreased as of June 30, 2025, though it remains at a high level Gearing Ratio | Indicator | As of June 30, 2025 (RMB thousand) | As of Dec 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Total Interest-bearing Borrowings | 34,157 | 28,563 | | Total Equity | 11,939 | 3,689 | | Gearing Ratio | 286.10% | 774.27% | Interim Dividend The Board does not recommend the payment of an interim dividend for the reporting period - The Board does not recommend the payment of an interim dividend for the reporting period (June 30, 2024: nil)75 Equity Fundraising Activities and Use of Net Proceeds The Group raised approximately HKD 28.43 million in net proceeds from three equity fundraising activities for working capital, debt repayment, and new business R&D Equity Fundraising Activities and Use of Net Proceeds | Fundraising Activity | Use of Proceeds | Planned Use (HKD thousand) | Actual Use (HKD thousand) | Unutilized Net Proceeds (HKD thousand) | | :--- | :--- | :--- | :--- | :--- | | March 2025 Subscription | General Working Capital | 8,950 | 5,500 | 3,450 | | May 2025 Placement | Repayment of Acceptance Bills | 7,000 | – | 7,000 | | | R&D Costs for New Businesses | 4,000 | – | 4,000 | | | General Working Capital | 1,880 | – | 1,880 | | May 2025 Subscription | General Working Capital | 6,600 | – | 6,600 | | Total | | 28,430 | 5,500 | 22,930 | - The March 2025 subscription raised net proceeds of approximately HKD 8.95 million for general working capital76 - The May 2025 placement raised net proceeds of approximately HKD 12.88 million for repayment of acceptance bills, R&D for new businesses, and general working capital7778 - The May 2025 subscription raised net proceeds of approximately HKD 6.6 million for general working capital79 Material Investments Held, Material Acquisitions and Disposals of Subsidiaries, and Future Plans for Material Investments or Capital Assets The Group established a new subsidiary for consumer product sales and acquired a technology-driven company to enhance digital services and expand e-commerce and supply chain - A new subsidiary was established, with 51% ownership, for selling consumer products in China81 - A technology-driven company, focused on advanced digital solutions including e-commerce and supply chain management systems, was acquired for a cost of RMB 7,516,50481 - The acquisition was paid with RMB 939,563 in cash and RMB 6,576,941 in acceptance bills81 Capital Commitments and Contingent Liabilities The Group had no significant capital commitments or contingent liabilities as of June 30, 2025 - The Group had no significant capital commitments or contingent liabilities as of June 30, 202582 Other Information Employees and Remuneration Policy As of June 30, 2025, the Group employed 118 staff, with significantly increased staff costs, and maintains regular performance reviews, training, and social welfare compliance - As of June 30, 2025, the Group employed 118 staff, including 19 management personnel83 - Staff costs (including directors' emoluments) for the reporting period were approximately RMB 12.31 million, a significant increase from RMB 6.67 million in the prior year83 - The Group regularly reviews employee performance and determines salaries, benefits, and discretionary bonuses based on qualifications, contributions, seniority, and performance83 - The Group makes social insurance and housing provident fund contributions for all eligible employees, totaling approximately RMB 1.37 million during the reporting period83 Foreign Exchange Risk Operating primarily in China with RMB-settled transactions, the Group does not face significant foreign exchange risk in its ordinary business - The Group primarily operates in China, with transactions settled in RMB, and therefore does not face any significant foreign exchange risk84 Credit Risk Credit risk from cash, receivables, and contract assets is managed by depositing with reputable institutions and closely monitoring key customer creditworthiness - Credit risk primarily arises from cash and cash equivalents, trade and other receivables, bills receivable, and contract assets85 - The Group places domestic deposits with reputable national financial institutions in China with good credit ratings and overseas deposits with reputable international financial institutions85 - Over 51% of trade receivables are from well-known automotive companies, and management mitigates risk through close communication and assessing new customers' financial standing8586 - The risk of default for other receivables and bills receivable is low8687 Liquidity Risk The Group regularly monitors liquidity needs through rolling forecasts, ensuring sufficient cash reserves for both short-term and long-term requirements - The Group regularly monitors existing and anticipated liquidity requirements, ensuring sufficient cash on hand through rolling forecasts to meet operational needs88 Outlook Outlook Despite China's upgraded growth forecast and persistent domestic challenges, the Group will enhance cost-effectiveness, consolidate core business, integrate with emerging industries, and pursue strategic acquisitions for new revenue and operational flexibility - The International Monetary Fund has revised China's full-year GDP growth forecast for 2025 upwards to 4.8%, but warns of weak domestic demand and structural challenges in the real estate sector89 - The Group will continue to focus on enhancing cost-effectiveness, consolidating its core business model, and accelerating integration with new emerging industries90 - The successful acquisition of Yiwang Holdings Limited, a technology-driven enterprise, on April 28, 2025, aims to integrate digital capabilities, enhance operational efficiency and customer experience, and capture new revenue streams in high-growth digital sectors90 - The Group will continue to seek strategic partnerships, diversify its customer base, improve service feedback mechanisms, and strive to deliver sustainable returns to shareholders91 Corporate Governance and Other Disclosures Corporate Governance Practices The Company complies with GEM Listing Rules' Corporate Governance Code, with a deviation where Mr. Wong Hiu Tik holds both Chairman and CEO roles, deemed in the Group's best interest - The Company has complied with all applicable code provisions of the Corporate Governance Code set out in Appendix C1 to the GEM Listing Rules92 - A deviation from code provision C.2.1 (separation of Chairman and Chief Executive Officer roles) exists, with Mr. Wong Hiu Tik holding both positions, which the Board believes is in the best interest of the Group92 Competing Interests No directors, controlling shareholders, or their associates engaged in any business directly or indirectly competing with the Group during the reporting period - During the reporting period, no director, controlling shareholder, or substantial shareholder, or any of their respective close associates, engaged in any business that competes or may compete, directly or indirectly, with the Group's business93 Directors' Interests in Transactions, Arrangements and Contracts Neither the Company nor its subsidiaries entered into any material transactions, arrangements, or contracts where directors or their connected entities held a material interest - Neither the Company nor its holding company, subsidiaries, or fellow subsidiaries entered into any material transactions, arrangements, or contracts during the reporting period or at any time subsisting in which a director or an entity connected with a director had a material direct or indirect interest94 Connected Transactions and Continuing Connected Transactions Except for the May 2025 Subscription detailed in the equity fundraising section, the Group had no other disclosable connected or continuing connected transactions - Save for the May 2025 Subscription as detailed in the section "Equity Fundraising Activities and Use of Net Proceeds — May 2025 Subscription", the Group did not enter into any other connected transactions or continuing connected transactions subject to disclosure requirements under the GEM Listing Rules during the reporting period95 Purchase, Sale or Redemption of the Company's Listed Securities Neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the reporting period - Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the reporting period96 Directors' Rights to Acquire Shares or Debentures Except as disclosed, no arrangements existed for directors to acquire benefits through shares or debentures, nor were any subscription rights granted or exercised - Save as disclosed in this announcement, at no time during the reporting period and up to the date of this announcement has the Group or any of its subsidiaries entered into any arrangements to enable the directors to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate, and no rights to subscribe for equity or debt securities of the Company or any other body corporate have been granted to, or exercised by, any director or their respective spouses or children under 18 years of age97 Share Option Scheme The Group's ten-year share option scheme, adopted on May 16, 2018, saw no grants, exercises, or cancellations of options during the reporting period, with no outstanding options - The Group adopted a share option scheme on May 16, 2018, with a ten-year validity, expiring on May 15, 202898 - During the reporting period, no share options were granted, exercised, or cancelled, and there were no outstanding share options99 Required Standard of Securities Transactions by Directors The Company adopted GEM Listing Rules' required standard for directors' securities transactions, confirming compliance with no known breaches during the reporting period - The Company has adopted the required standard of dealings set out in Rules 5.48 to 5.67 of the GEM Listing Rules as the code of conduct for directors' securities transactions100 - Directors have confirmed compliance with the required standard of dealings, and no breaches were known during the reporting period100 Audit Committee The Audit Committee, composed of three independent non-executive directors, reviewed the interim financial statements and confirmed their compliance with applicable accounting standards and requirements - The Audit Committee comprises three independent non-executive directors, with Mr. Tam Chak Chi as Chairman101 - The Audit Committee reviewed the interim financial statements and confirmed their preparation in compliance with applicable accounting standards and requirements, with adequate disclosures101 Board Order and Others This announcement, issued by Chairman and CEO Mr. Wong Hiu Tik on August 29, 2025, includes the Board of Directors list and a responsibility statement for the information - The announcement was issued by Mr. Wong Hiu Tik, Chairman, Chief Executive Officer, and Executive Director of the Board, on August 29, 2025102 - The information in this announcement is published in accordance with the GEM Listing Rules, and the Directors collectively and individually accept full responsibility for the information103