嘉耀控股(01626) - 2025 - 中期业绩

Financial Highlights For the six months ended June 30, 2025, Jiayao Holdings Limited experienced significant declines in revenue and gross profit, shifting from a profit to a loss compared to the same period last year, with no interim dividend recommended by the board Summary of Key Financial Performance For the six months ended June 30, 2025, Jiayao Holdings Limited experienced significant declines in revenue and gross profit, shifting from a profit to a loss compared to the same period last year, with no interim dividend recommended by the board Summary of Key Financial Performance (For the six months ended June 30) | Indicator | 2025 (RMB million) | 2024 (RMB million) | Year-on-year Change (%) | | :--- | :----------------- | :----------------- | :-------------------- | | Revenue | 260.5 | 742.8 | -64.9% | | Gross Profit | 57.8 | 153.6 | -62.3% | | Gross Profit Margin | 22.2% | 20.7% | +1.5% | | (Loss)/Profit Attributable to Owners of the Company | (16.8) | 14.8 | Shift from profit to loss | | Interim Dividend | Not recommended | Nil | Not applicable | Condensed Consolidated Interim Financial Information Condensed Consolidated Statement of Comprehensive Income For the six months ended June 30, 2025, the Group recorded a loss of RMB 22.2 million for the period, compared to a profit of RMB 27.2 million in the prior year, primarily due to a significant decrease in revenue and operating loss Condensed Consolidated Statement of Comprehensive Income (For the six months ended June 30) | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :------------------ | :------------------ | | Revenue | 260,459 | 742,765 | | Cost of Sales | (202,617) | (589,157) | | Gross Profit | 57,842 | 153,608 | | Operating (Loss)/Profit | (19,048) | 37,435 | | (Loss)/Profit Before Income Tax | (20,888) | 37,113 | | Income Tax Expense | (1,328) | (9,866) | | (Loss)/Profit for the Period | (22,216) | 27,247 | | (Loss)/Profit Attributable to Owners of the Company | (16,751) | 14,808 | | (Loss)/Profit Attributable to Non-controlling Interests | (5,465) | 12,439 | Condensed Consolidated Statement of Financial Position As of June 30, 2025, the Group's total assets and total equity both decreased compared to December 31, 2024, reflecting business contraction and profitability challenges Condensed Consolidated Statement of Financial Position (As of June 30) | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :------------------ | :------------------ | | Assets | | | | Non-current Assets | 135,461 | 134,547 | | Current Assets | 469,996 | 731,890 | | Total Assets | 605,457 | 866,437 | | Equity | | | | Equity Attributable to Owners of the Company | 266,018 | 450,426 | | Non-controlling Interests | 39,359 | 41,870 | | Total Equity | 305,377 | 492,296 | | Liabilities | | | | Non-current Liabilities | 53,733 | 49,924 | | Current Liabilities | 246,347 | 324,217 | | Total Liabilities | 300,080 | 374,141 | | Total Equity and Liabilities | 605,457 | 866,437 | Notes to the Condensed Consolidated Interim Financial Information This section provides detailed notes to the condensed consolidated interim financial information, covering general company information, accounting policies, segment results, expenses, income tax, earnings per share, dividends, receivables and payables, and subsequent events, offering context and specific data for understanding the financial statements 1 General Information Jiayao Holdings Limited is an exempted company incorporated in the Cayman Islands, primarily engaged in the design, production, and sale of e-cigarettes and related products in China, providing ancillary services, with products mainly for export - The Company was incorporated in the Cayman Islands on August 5, 2013, with its ordinary shares listed on the Main Board of the Hong Kong Stock Exchange on June 27, 2014[11][12] - The Group is primarily engaged in the design, production, and sale of e-cigarettes and related products in China, and provides e-cigarette ancillary services, with products mainly for export sales, subject to China's e-cigarette management measures[11] 2 Basis of Preparation and Accounting Policies These interim financial statements are prepared in accordance with HKAS 34 and are consistent with HKFRS for the year ended December 31, 2024, with no significant impact from new or revised standards adopted in the current or future periods - This condensed consolidated interim financial information is prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" and should be read in conjunction with the annual financial statements prepared in accordance with Hong Kong Financial Reporting Standards[14] - New and amended standards mandatorily adopted by the Group for the financial year beginning January 1, 2025 (such as amendments to HKAS 21 and HKFRS 1), had no impact on amounts recognized in prior periods and are not expected to have a significant impact on the current or future periods[15][18] - Certain new standards and amendments to standards that have been published but are not yet mandatorily effective are not expected to have a significant impact on the current or future reporting periods[16][17] 3 Segment Information The Group manages its business by segments, primarily e-cigarette sales and ancillary services, with the paper cigarette packaging segment discontinued in October 2024, showing a significant decline in e-cigarette sales but substantial growth in ancillary services revenue - The paper cigarette packaging and other paper packaging segment was considered a discontinued operation in October 2024[19] Segment Revenue (For the six months ended June 30) | Segment | 2025 (RMB thousand) | 2024 (RMB thousand) | Year-on-year Change (%) | | :--- | :------------------ | :------------------ | :-------------------- | | E-cigarette Sales | 221,007 | 393,135 | -43.8% | | E-cigarette Ancillary Services | 39,452 | 19,488 | +102.4% | | Paper Cigarette Packaging and Other Paper Packaging | – | 330,142 | Not applicable | | Total | 260,459 | 742,765 | -64.9% | Segment Revenue by Location (For the six months ended June 30) | Region | 2025 (RMB thousand) | 2024 (RMB thousand) | Year-on-year Change (%) | | :--- | :------------------ | :------------------ | :-------------------- | | Asia | 205,372 | 565,889 | -63.7% | | Americas | 8,354 | 54,746 | -84.7% | | Europe | 36,476 | 100,853 | -63.8% | | Middle East | 9,213 | 12,704 | -27.5% | | Oceania | 690 | 7,643 | -91.0% | | Africa | 354 | 930 | -61.9% | | Total | 260,459 | 742,765 | -64.9% | 4 Expenses by Nature The Group's total cost of sales, distribution costs, and administrative expenses significantly decreased, primarily due to the disposal of the paper cigarette packaging business and reduced raw material consumption and employee benefit expenses Major Expense Items (For the six months ended June 30) | Expense Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :------------------ | :------------------ | | Raw Materials and Consumables Used | 173,316 | 517,290 | | Employee Benefit Expenses | 56,358 | 116,560 | | Depreciation | 6,643 | 12,416 | | Amortization | 11,492 | 9,894 | | Total Cost of Sales, Distribution Costs, and Administrative Expenses | 279,446 | 713,502 | 5 Income Tax Expense Income tax expense significantly decreased, mainly due to reduced net profit from Chinese subsidiaries and no withholding income tax incurred in the current period Income Tax Expense (For the six months ended June 30) | Tax Category | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :------------------ | :------------------ | | Current Income Tax — China Corporate Income Tax | (1,720) | (6,717) | | Current Income Tax — Withholding Income Tax | – | (6,629) | | Deferred Income Tax — Deferred Tax Assets | 392 | 3,479 | | Total Income Tax Expense | (1,328) | (9,866) | - Shenzhen Haohanyangtian Technology Co., Ltd., Shenzhen Coconut Biotechnology Co., Ltd., and Shenzhen Southern Smart Control Technology Co., Ltd. qualify as high-tech enterprises and are subject to a preferential corporate income tax rate of 15%[27] - No withholding income tax was incurred in the current period (2024: RMB 6.6 million), as a lower withholding income tax rate of 5% may apply when Chinese subsidiaries declare dividends to intermediate holding companies outside China, if tax treaty provisions are met[28][60] 6 Earnings Per Share Basic loss per share attributable to owners of the Company was RMB (0.028), compared to basic earnings per share of RMB 0.025 in the prior year, with diluted loss per share being the same due to no dilutive potential ordinary shares Basic (Loss)/Earnings Per Share (For the six months ended June 30) | Indicator | 2025 | 2024 | | :--- | :----- | :----- | | (Loss)/Profit Attributable to Owners of the Company (RMB thousand) | (16,751) | 14,808 | | Weighted Average Number of Ordinary Shares in Issue (thousand shares) | 600,000 | 600,000 | | Basic (Loss)/Earnings Per Share (RMB) | (0.028) | 0.025 | - Diluted loss per share is equal to basic loss per share as the Company had no dilutive potential ordinary shares outstanding as of June 30, 2025[30] 7 Dividends The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025 - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025 (2024: nil)[32][75] 8 Trade and Other Receivables and Prepayments Total trade and other receivables and prepayments decreased by 21.5% to RMB 284.0 million, primarily due to reductions in trade receivables, deposits, and cash advances Trade and Other Receivables and Prepayments (As of June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :------------------ | :------------------ | | Trade Receivables (net of loss allowance) | 169,985 | 195,862 | | Deposits | 20,529 | 56,421 | | Cash Advances | 22,936 | 69,344 | | Prepayments | 46,619 | 13,642 | | Total | 279,790 | 357,707 | - The Group's credit sales to customers are primarily on credit terms not exceeding 90 days[33] 9 Trade and Other Payables Total trade and other payables decreased by 42.2% to RMB 122.4 million, primarily due to reductions in trade payables, bills payable, and amounts due to non-controlling interests Trade and Other Payables (As of June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :------------------ | :------------------ | | Trade Payables | 84,064 | 128,786 | | Bills Payable | 5,433 | 14,944 | | Amounts Due to Non-controlling Interests | – | 30,000 | | Total | 122,409 | 211,938 | 10 Subsequent Events From June 30, 2025, to the date of this announcement, the Board is not aware of any significant events that have occurred and require disclosure - From June 30, 2025, to the date of this announcement, the Board is not aware of any significant events that have occurred and require disclosure[36] Management Discussion and Analysis Market Review In the first half of 2025, global economic growth was weak, exacerbated by geopolitical tensions and restrictive financial conditions, while China's economy showed moderate resilience but faced low consumer confidence and a dragging real estate sector, with the global e-cigarette industry confronting increasing regulatory scrutiny in North America and Europe, and new tax frameworks and comprehensive legislation in Asia-Pacific - The International Monetary Fund projects global GDP growth to slow from 3.3% in 2024 to approximately 3.0% in 2025 and 3.1% in 2026[37] - China's economy recorded 5.3% growth in the first half of 2025, but consumer confidence remained low, and the real estate sector continued to drag investment sentiment[38] - The global e-cigarette industry faces increasing regulatory scrutiny in mature markets like North America and Europe, as well as challenges from new tax frameworks and comprehensive national legislation in Asia-Pacific regions such as Malaysia, the Philippines, and Indonesia[38][39] Business Review In the first half of 2025, the Group's performance was significantly impacted by global economic slowdown, weak consumer sentiment, and an increasingly stringent regulatory environment, leading to the implementation of a two-pronged strategy to enhance operational resilience and make strategic adjustments for long-term competitive advantage, including efficiency improvements, prudent inventory management, and strategic market diversification - The Group's performance was significantly impacted by the global economic slowdown, weak consumer sentiment in key markets, and an increasingly stringent and unpredictable regulatory environment[40] - The Group has implemented a two-pronged strategy aimed at strengthening operational resilience to address immediate market volatility and executing landmark strategic adjustments to ensure long-term competitive advantage[41] - The strategy includes reinforcing a commitment to rigorous operational management, focusing on improving efficiency, maintaining prudent inventory levels, pursuing strategic market diversification, and actively adapting business models to align with evolving international regulatory standards[41][42] Sales and Distribution During the review period, the Group's revenue contracted due to macroeconomic uncertainties and tightening e-cigarette regulations, managing operational headwinds by optimizing inventory, adjusting production and labor costs, and making strategic, forward-looking investments to enhance product visibility and corporate reputation, maintaining a strong presence in key markets across Europe, America, and Asia - Revenue contraction is a direct result of macroeconomic uncertainties and the implementation of increasingly stringent and diverse regulatory frameworks for e-cigarette products in major international markets[43] - The Group strategically optimized its inventory portfolio to align with shifting demand patterns and optimize production volumes, while reallocating labor costs to control the growth of operating expenses[43] - The Group is committed to strategic, forward-looking investments in global market development and brand positioning to enhance product visibility and corporate reputation[44] - The Group continues to maintain a strong presence in key markets across Europe, the Americas, and Asia by establishing strategic relationships with major local distributors in target markets[44] Product Research and Development and Design The Group continuously drives innovation, leveraging its technical expertise and advanced production facilities to focus on manufacturing mid-to-high-end products, incorporating automation requirements early in the design phase to enhance product manufacturability and automation feasibility - The Group leverages its technical expertise and development achievements, including advanced production lines and state-of-the-art manufacturing facilities, to fully utilize its capacity for producing mid-to-high-end products[45] - During the reporting period, the Group reviewed its product development technology, which fully considers product manufacturing and the requirements for introducing automated equipment during the product design phase, resulting in better manufacturability and greater feasibility for automation implementation[45] Technology Development and Quality Control Adhering to the philosophy of 'management innovation, system leadership,' the Group continuously strengthens core technology R&D and improves management, achieving ideal sales growth for its own-brand e-cigarettes due to high safety and enhanced user experience, while actively implementing environmental measures to provide high-quality, safe, and eco-friendly products - The Group advocates the philosophy of "management innovation, system leadership," consistently adhering to principles of perfection, specialization, and standardization to solidify its reputation for high-quality products[46] - The Group continuously increases investment in core technology research and development and constantly improves its management level, achieving ideal sales growth for its own-brand e-cigarettes[46] - The Group actively implements environmental protection measures, including strict environmental indicators, control over raw and auxiliary material inputs, and manufacturing processes, to provide customers with high-quality, safe, and environmentally friendly products[46] Cost Control The Group effectively reduced raw material costs through process and material optimization, productivity improvements, new supplier introduction, and competitive negotiations, while enhancing production process control and efficiency by rolling inventory preparation and consolidating production orders for increased batch production - The strategies adopted by the Group include optimizing processes and materials, improving productivity, introducing new suppliers, and conducting competitive negotiations to enhance raw material cost management[47][48] - The Group also implements various measures, such as rolling inventory preparation, consolidating production orders to increase batch production, reducing production costs, and preventing inefficiencies caused by secondary loading due to insufficient delivery quantities, thereby strengthening its control over production processes[48] Financial Review This section provides a detailed review of the Group's financial performance for the six months ended June 30, 2025, including key financial indicators such as turnover, gross profit, expenses, taxes, profitability, receivables and payables, liquidity, borrowings, and capital expenditures, along with an analysis of their changes Revenue The Group's revenue decreased by 64.9% year-on-year to RMB 260.5 million, primarily due to the disposal of the paper cigarette packaging business in Q4 2024 and a decline in e-cigarette sales, with growth in e-cigarette ancillary services unable to offset negative impacts from sales strategy adjustments in key markets like Europe and America Sales Details (For the six months ended June 30) | Sales Category | 2025 (RMB thousand) | 2024 (RMB thousand) | Change (%) | | :--- | :------------------ | :------------------ | :----------- | | E-cigarette Sales | 221,007 | 393,135 | -43.8% | | E-cigarette Ancillary Services | 39,452 | 19,488 | +102.4% | | Paper Cigarette Packaging and Other Paper Packaging | – | 330,142 | Not applicable | | Total | 260,459 | 742,765 | -64.9% | - The decrease in revenue was primarily due to the disposal of the paper cigarette packaging and other paper packaging business in the fourth quarter of 2024, and a decline in e-cigarette sales for the six months ended June 30, 2025[49] - Sales in the e-cigarette segment decreased by approximately 43.8%, mainly due to the Group's adjustment of sales strategies in several international markets in response to recent fluctuations in global e-cigarette regulations and international trade instability, which negatively impacted sales orders, particularly in Europe (decreased by approximately 63.8%) and the Americas (decreased by approximately 84.7%)[49] Gross Profit The Group's gross profit decreased by 62.3% year-on-year to RMB 57.8 million, but the gross profit margin increased by 1.5 percentage points to 22.2%, primarily due to the disposal of the less profitable paper cigarette packaging business in Q4 2024 Gross Profit and Gross Profit Margin (For the six months ended June 30) | Indicator | 2025 (RMB million) | 2024 (RMB million) | Change (%) | | :--- | :----------------- | :----------------- | :----------- | | Gross Profit | 57.8 | 153.6 | -62.3% | | Gross Profit Margin | 22.2% | 20.7% | +1.5% | - The increase in the Group's gross profit margin was primarily due to the disposal of the paper cigarette packaging and other paper packaging business, which had relatively lower profitability and growth prospects, in the fourth quarter of 2024[54] Distribution Costs Distribution costs decreased by 50.7% year-on-year to RMB 23.6 million, primarily due to the disposal of the paper cigarette packaging business in Q4 2024 Distribution Costs (For the six months ended June 30) | Indicator | 2025 (RMB million) | 2024 (RMB million) | Change (%) | | :--- | :----------------- | :----------------- | :----------- | | Distribution Costs | 23.6 | 48.0 | -50.7% | - The decrease in distribution costs was primarily due to the disposal of the paper cigarette packaging and other paper packaging business in the fourth quarter of 2024[55] Administrative Expenses Administrative expenses decreased by 30.3% year-on-year to RMB 53.2 million, primarily due to the disposal of the paper cigarette packaging business in Q4 2024 Administrative Expenses (For the six months ended June 30) | Indicator | 2025 (RMB million) | 2024 (RMB million) | Change (%) | | :--- | :----------------- | :----------------- | :----------- | | Administrative Expenses | 53.2 | 76.3 | -30.3% | - The decrease in administrative expenses was primarily due to the disposal of the paper cigarette packaging and other paper packaging business in the fourth quarter of 2024[56] Other Income Other income decreased by RMB 5.2 million to RMB 1.5 million, primarily due to reduced government grants received by Chinese subsidiaries Other Income (For the six months ended June 30) | Indicator | 2025 (RMB million) | 2024 (RMB million) | Change (RMB million) | | :--- | :----------------- | :----------------- | :------------------- | | Other Income | 1.5 | 6.7 | -5.2 | - The decrease in other income was primarily due to reduced government grants received by Chinese subsidiaries for the six months ended June 30, 2025[57] Other Gains, Net Net other gains decreased by RMB 2.4 million to RMB 1.0 million, primarily due to reduced gains from the disposal of subsidiaries and raw materials Other Gains, Net (For the six months ended June 30) | Indicator | 2025 (RMB million) | 2024 (RMB million) | Change (RMB million) | | :--- | :----------------- | :----------------- | :------------------- | | Other Gains, Net | 1.0 | 3.3 | -2.3 | - The decrease in net other gains was primarily due to reduced gains from the disposal of subsidiaries and raw materials for the six months ended June 30, 2025[58] Finance Costs, Net Net finance costs increased by RMB 1.5 million to RMB 1.8 million, primarily due to a decrease in interest income from bank deposits Finance Costs, Net (For the six months ended June 30) | Indicator | 2025 (RMB million) | 2024 (RMB million) | Change (RMB million) | | :--- | :----------------- | :----------------- | :------------------- | | Finance Costs, Net | 1.8 | 0.3 | +1.5 | - The increase in net finance costs was primarily due to a decrease in interest income from bank deposits for the six months ended June 30, 2025[59] Income Tax Expense Income tax expense decreased by RMB 8.5 million to RMB 1.3 million, primarily due to reduced net profit from Chinese subsidiaries and no withholding income tax incurred Income Tax Expense (For the six months ended June 30) | Indicator | 2025 (RMB million) | 2024 (RMB million) | Change (RMB million) | | :--- | :----------------- | :----------------- | :------------------- | | Income Tax Expense | 1.3 | 9.8 | -8.5 | - The decrease in income tax expense was primarily due to reduced net profit generated by Chinese subsidiaries for the six months ended June 30, 2025, and no withholding income tax incurred (2024: RMB 6.6 million)[60] Profit Attributable to Owners of the Company The Group recorded a loss attributable to owners of the Company of approximately RMB 16.8 million for the six months ended June 30, 2025, compared to a profit of approximately RMB 14.8 million in the prior year (Loss)/Profit Attributable to Owners of the Company (For the six months ended June 30) | Indicator | 2025 (RMB million) | 2024 (RMB million) | | :--- | :----------------- | :----------------- | | (Loss)/Profit Attributable to Owners of the Company | (16.8) | 14.8 | Trade and Other Receivables and Prepayments Trade and other receivables and prepayments decreased by 21.5% from RMB 361.5 million as of December 31, 2024, to RMB 284.0 million as of June 30, 2025, primarily due to reductions in trade receivables, deposits, and cash advances Trade and Other Receivables and Prepayments (As of June 30) | Item | 2025 (RMB million) | 2024 (RMB million) | Change (%) | | :--- | :----------------- | :----------------- | :----------- | | Total Trade and Other Receivables and Prepayments | 284.0 | 361.5 | -21.5% | - This decrease was primarily due to reductions in trade receivables, deposits, and cash advances[62] Trade and Other Payables Trade and other payables decreased by 42.2% from RMB 211.9 million as of December 31, 2024, to RMB 122.4 million as of June 30, 2025, primarily due to reductions in trade payables, bills payable, and amounts due to non-controlling interests Trade and Other Payables (As of June 30) | Item | 2025 (RMB million) | 2024 (RMB million) | Change (%) | | :--- | :----------------- | :----------------- | :----------- | | Total Trade and Other Payables | 122.4 | 211.9 | -42.2% | - This decrease was primarily due to reductions in trade payables, bills payable, and no other amounts due to non-controlling interests as of June 30, 2025 (December 31, 2024: RMB 30.0 million)[63] Liquidity and Financial Resources As of June 30, 2025, the Group recorded net current assets of approximately RMB 223.6 million and cash and cash equivalents of RMB 94.0 million, a decrease from year-end 2024, but maintaining a healthy liquidity position Liquidity (As of June 30) | Indicator | 2025 (RMB million) | 2024 (RMB million) | | :--- | :----------------- | :----------------- | | Net Current Assets | 223.6 | 407.7 | | Cash and Cash Equivalents | 94.0 | 275.1 | - The Group maintained a healthy liquidity position for the six months ended June 30, 2025, with operations primarily financed by internal resources and interest-bearing borrowings[64] Borrowings and Gearing Ratio As of June 30, 2025, the Group's interest-bearing borrowings were RMB 59.9 million, primarily denominated in RMB and repayable within one year, with the gearing ratio not applicable due to the Group's net cash position Borrowings and Net Cash (As of June 30) | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :------------------ | :------------------ | | Total Borrowings | 59,902 | 62,750 | | Less: Cash and Cash Equivalents | 94,033 | 275,136 | | Net Cash | 34,131 | 212,386 | - The Group's interest-bearing borrowings are repayable within one year and are primarily denominated in RMB[65] - The Group's policy is to continue maintaining a consistently robust financial management strategy, coupled with moderate borrowings and sufficient liquidity reserves, to meet its investment and working capital needs[66] Capital Expenditure The Group's total capital expenditure for the six months ended June 30, 2025, significantly decreased to RMB 6.5 million, primarily for the purchase of plant and machinery Capital Expenditure (For the six months ended June 30) | Indicator | 2025 (RMB million) | 2024 (RMB million) | | :--- | :----------------- | :----------------- | | Total Capital Expenditure | 6.5 | 50.1 | - Capital expenditure was primarily for the purchase of plant and machinery[67] Treasury Policy The Group adopts a prudent treasury and funding policy, emphasizing risk control, with funds primarily denominated in RMB and HKD, generally held as short-term or medium-term bank deposits for working capital - The Group adopts a prudent strategy for its treasury and funding policies, emphasizing risk control and transactions directly related to the Group's principal business[68] - Funds are primarily denominated in RMB and HKD, generally held as short-term or medium-term bank deposits for the Group's working capital[68] Pledged Assets The Group pledged restricted cash with a carrying amount of RMB 3.4 million to secure its general bank facilities Pledged Assets (As of June 30) | Asset | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :------------------ | :------------------ | | Restricted Cash | 3,433 | 13,019 | - The Group pledged restricted cash to secure its general bank facilities (including the Group's bills payable)[69] Significant Investments, Acquisitions and Disposals of Subsidiaries and Associates For the six months ended June 30, 2025, the Group had no significant investments, major acquisitions, or disposals involving subsidiaries and associates - For the six months ended June 30, 2025, the Group had no significant investments, major acquisitions, or disposals involving subsidiaries and associates[71] Contingent Liabilities As of June 30, 2025, the Group had no significant contingent liabilities - As of June 30, 2025, the Group had no significant contingent liabilities (December 31, 2024: nil)[72] Foreign Exchange Risk The Group's transactions are primarily in RMB, with foreign currency risk mainly involving HKD and USD-denominated bank balances, receivables, and payables, and no derivative financial instruments were used to hedge foreign currency fluctuations during the period - The Group's transactions are primarily conducted in RMB (the Group's functional currency), with most receivables and payables denominated in RMB[73] - The foreign currency risk faced by the Group primarily involves certain bank balances and cash, trade receivables, contract liabilities, and other payables denominated in HKD and USD[73] - For the six months ended June 30, 2025, the Group did not use derivative financial instruments to hedge fluctuations arising from foreign currency transactions and other financial assets and liabilities in the ordinary course of business[73] Human Resources and Remuneration As of June 30, 2025, the Group employed 862 staff with total employee costs of RMB 56.4 million, with remuneration based on market terms and individual performance, and various training programs provided to enhance employee skills Human Resources Overview (As of June 30) | Indicator | 2025 | 2024 | | :--- | :----- | :----- | | Number of Employees | 862 | 825 | | Total Employee Costs (RMB million) | 56.4 | 116.6 | - The Group's remuneration packages are generally determined with reference to market terms and individual performance[74] - The Group also provides various training programs to its employees to enhance their skills, develop professional expertise, and demonstrate their potential[74] Interim Dividend The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025 - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025 (for the six months ended June 30, 2024: nil)[75] Outlook The global e-cigarette industry is projected for significant expansion but faces uncertainties from technological advancements, shifting consumer behavior, and an unpredictable global regulatory landscape; the Group will continue to execute a rigorous strategic framework, balancing resource allocation with innovation, investing in robust compliance and legal frameworks, optimizing its product portfolio, and expanding its global distribution network through partnerships with overseas distributors to navigate market volatility and improve performance - Grand View Research forecasts the global e-cigarette industry valuation to exceed USD 60 billion by 2025 and USD 120 billion by 2034, but its trajectory depends on technological developments, evolving consumer behavior, and a fragmented and unpredictable global regulatory environment[76] - The Chinese e-cigarette industry is transitioning from rapid, unregulated expansion to a more structured and compliance-focused operational model[76] - The Group will continue to invest in a robust, centralized compliance and legal framework, utilizing regulatory intelligence systems to anticipate changes and ensure its business remains competitive in each market[78] - Jiayao will continuously evaluate and optimize its product portfolio to ensure compliance with specific regulatory requirements and consumer dynamics in each target region, and expand its global distribution network through strategic partnerships with established overseas distributors[79] Corporate Governance and Other Information Competitive Business and Conflicts of Interest No director is engaged in any business that competes or may compete with the Group's business, nor are there any other conflicts of interest - No director is engaged in any business that constitutes or may constitute competition with the Group's business, and they have no other conflicts of interest with the Group[80] Purchase, Sale or Redemption of the Company's Listed Securities For the entire six-month period ended June 30, 2025, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities - For the entire six-month period ended June 30, 2025, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[81] Corporate Governance The Company has adopted and complied with the Corporate Governance Code set out in Appendix C1 of the Listing Rules - The Company has adopted the Corporate Governance Code set out in Appendix C1 of the Listing Rules as its own corporate governance code and has complied with it[82] Standard of Dealings by Directors of Listed Issuers in Securities Following specific inquiries with all Directors, they confirmed compliance with the Standard Code for Securities Transactions by Directors of Listed Issuers for the six months ended June 30, 2025 - Following specific inquiries with all Directors, they confirmed that they have complied with the standards set out in the Code of Conduct and the Standard Code for Securities Transactions by Directors for the six months ended June 30, 2025[83] Audit Committee and Review of Interim Results The Company's Audit Committee has reviewed the Group's unaudited condensed consolidated interim financial results for the six months ended June 30, 2025, deeming them prepared in compliance with applicable accounting standards, requirements, and Listing Rules, with adequate disclosures - The Audit Committee, comprising three independent non-executive directors, is primarily responsible for reviewing and monitoring the Company's financial reporting process, internal controls, and risk management systems[84] - The Group's interim financial results for the six months ended June 30, 2025, have not been reviewed by the Company's auditors but have been reviewed by the Company's Audit Committee, which believes that the results have been prepared in compliance with applicable accounting standards and requirements, as well as the Listing Rules, and that adequate disclosures have been made[84] Changes in Directors' Information No changes in Directors' information requiring disclosure under Listing Rule 13.51B(1) have occurred since the publication of the Company's annual report for the year ended December 31, 2024, up to the date of this announcement - No changes in Directors' information requiring disclosure under Listing Rule 13.51B(1) have occurred since the publication of the Company's annual report for the year ended December 31, 2024, up to the date of this announcement[85] Publication of Interim Results and Interim Report This announcement has been published on the HKEX and Company websites; the Company's interim report for the six months ended June 30, 2025, will be dispatched to shareholders and published on the aforementioned websites in due course - This announcement has been published on the HKEX website (www.hkexnews.hk) and the Company's website (www.jiayaoholdings.com), respectively[86] - The Company's interim report for the six months ended June 30, 2025, will be dispatched to the Company's shareholders and published on the aforementioned websites in due course[86]