恩典生命科技(02112) - 2025 - 中期财报

Company Information Company Basic Information Grace Life Technology Holdings Limited is a limited liability company incorporated in the Cayman Islands, with stock code 02112, and has appointed joint provisional liquidators solely for company restructuring purposes - The company has appointed joint provisional liquidators, currently applicable only for company restructuring[1] - The company's stock code is 02112[1][5] - The Board of Directors comprises three executive directors, including Chairman Mr. Ng Khing Yeu, and three independent non-executive directors[4] Summary Financial Summary For the six months ended June 30, 2025, the Group achieved significant revenue growth, improved gross profit, and successfully turned a loss into a profit, with the Board not recommending an interim dividend Financial Summary Comparison for H1 2025 vs. H1 2024 | Metric | H1 2025 (Million USD) | H1 2024 (Million USD) | Change | | :--- | :--- | :--- | :--- | | Revenue | 8.42 | 5.97 | 41.0% increase | | Gross Profit | 1.13 | 0.98 | 15.3% increase | | Profit/(Loss) | 0.2 | (9.0) | Turned to profit | | Interim Dividend | Not recommended | None | No change | Management Discussion and Analysis Business Development Overview As an investment holding company, the Group's core businesses include plant stem cell technology R&D and application, iron ore exploration, mining, and sales, and investment holding, with strong growth in plant stem cell business and a temporary halt in iron ore production due to low prices - The company's principal businesses are plant stem cell technology R&D and application, iron ore exploration, mining and sales, and investment holding[9] - The plant stem cell business maintained strong growth in H1 2025, becoming a core performance driver due to expanded sales channels and increased market penetration[10] - The company established a strategic partnership with a leading Chinese medical group to promote plant stem cell products through its national healthcare service network, adding five new downstream customers[10] - Future plans include establishing a global R&D center, collaborating with research institutions, advancing FMCG functional beverage channel development (10,000 vending machines), setting up skincare counters in high-end malls, and opening over 50 health management chain centers[11] - A non-legally binding Memorandum of Understanding was signed with a Korean plant stem cell essence production facility to explore potential strategic investments[11] - Due to persistently low international iron ore prices, the company suspended iron ore production and sales in H1 2025[13] - The company actively pursued mining business diversification, commencing exploration of tin concentrate mining feasibility in February 2025 and engaging potential partners for technical and economic assessments[13] - The company will continue its diversification strategy, consolidating its advantages in plant stem cells, accelerating the expansion of traditional Chinese medicine and the big health industry chain, and prudently advancing the tin concentrate business[14] Market Review and Outlook The report analyzes the status and trends of the big health industry, health supplement market, iron ore market, and tin concentrate market, noting sustained growth in China's big health sector, expanding health supplement market, fluctuating iron ore prices, and rising tin concentrate prices due to supply tightening - Driven by the "Healthy China 2030" plan, China's big health industry is projected to reach a value of RMB 16 trillion by 2030[17] - In 2024, per capita healthcare expenditure for Chinese residents reached RMB 2,547, a 16.0% year-on-year increase, reflecting stronger health demand[17] Global and China Health Supplement Market Size Forecast | Market | 2024 Size (100 Million RMB) | 2029 Forecast Size (100 Million RMB) | | :--- | :--- | :--- | | Global Health Supplement Market | 13,765.8 | 18,213.4 | | China Health Supplement Market | 2,602.2 | 3,207.1 | - In 2023, China's health supplement market reached RMB 387.9 billion, a 29.78% year-on-year increase, projected to reach RMB 506.7 billion by 2028[18] - China's iron ore market saw prices rise then fall in H1 2025, with the average price approximately USD 18/ton lower than the same period last year, leading to reduced shipments from high-cost mines[19] - The tin concentrate market was impacted by the ban on mining in Myanmar's Wa State, causing a sharp drop in China's imports, with tightening supply pushing prices from RMB 240,000/ton to a March high of RMB 299,000/ton[20] Business and Operations Review During the reporting period, the Group's main Ibam mine project suspended all iron ore-related production and sales activities, resulting in zero output, due to persistently low international iron ore prices falling significantly below extraction costs - Ibam mine's iron ore production in H1 2025 was 0 thousand tons, consistent with H1 2024[21] - The suspension of iron ore production and sales was due to a continuous decline in international iron ore prices, with the average price falling to approximately USD 100 per dry ton, significantly below the company's mining and beneficiation costs[21] Operating Results The Group achieved USD 8.42 million in revenue during the reporting period, primarily driven by increased sales of health supplements and other products, with improved gross profit, reduced administrative expenses, but higher finance costs due to increased note interest, resulting in a USD 0.2 million profit mainly from interest waiver gains Operating Results Comparison for H1 2025 vs. H1 2024 | Metric | H1 2025 (Million USD) | H1 2024 (Million USD) | Change | | :--- | :--- | :--- | :--- | | Revenue | 8.42 | 5.97 | 41.0% increase | | Cost of Sales | 7.3 | 5.0 | 46.0% increase | | Gross Profit | 1.1 | 1.0 | 10.0% increase | | Administrative and Other Expenses | 1.1 | 1.2 | 12.8% decrease | | Finance Costs | 9.5 | 8.4 | 13.1% increase | | Profit/(Loss) for the Period | 0.2 | (9.0) | Turned to profit | | Income Tax Expense | 0.02 | 0.02 | No change | - Revenue growth was primarily due to the expansion of plant stem cell sales channels and an increase in customer numbers[23] - The decrease in administrative expenses was mainly due to reduced staff costs[27] - The increase in finance costs was primarily due to higher interest expenses from the company's issued notes[28] - The turnaround to profit for the period was mainly due to the company entering into an interest waiver agreement in April 2025, recognizing an interest waiver of approximately USD 9.9 million[30] Borrowings As of June 30, 2025, the Group's total borrowings comprised bank loans, other loans, notes and bonds, and an interest-free, unsecured shareholder loan payable to the ultimate holding company, Yutian Borrowings Composition as of June 30, 2025 | Type of Borrowing | Amount (Million USD) | | :--- | :--- | | Loan from a commercial bank | 36.7 | | Other loans | 18.3 | | Notes and bonds | 85.1 | | Interest-free unsecured shareholder loan payable to Yutian | 60.0 | Liquidity, Financial Resources and Capital Structure As of June 30, 2025, the Group reported a capital deficit and a low current ratio, indicating liquidity pressure, with financing primarily from internal cash flow, borrowings, and shareholder loans, and no debt-to-equity ratio calculable due to negative equity Liquidity Ratios as of June 30, 2025 and December 31, 2024 | Metric | June 30, 2025 (Million USD) | December 31, 2024 (Million USD) | | :--- | :--- | :--- | | Capital Deficit | 166.7 | 167.5 | | Current Assets | 61.7 | N/A | | Current Liabilities | 244.2 | N/A | | Current Ratio | 0.3 | 0.3 | - The Group recorded negative equity as of June 30, 2025, and its debt-to-equity ratio could not be calculated[33] - The company primarily funds its operations through internal cash flows, interest-bearing bank and other borrowings, and interest-free, unsecured shareholder loans provided by Yutian[32] Legal Proceedings The company and its controlling shareholder face multiple legal proceedings, including a claim by Industrial Bank against Yutian, which transferred its shareholder loan rights to Industrial Bank, leading to a USD 60 million principal claim plus incidental damages against the company - Industrial Bank has claimed USD 60,000,000 in principal and other incidental damages from the company, as Yutian defaulted on its repayment to Industrial Bank and transferred its rights under the shareholder loan to Industrial Bank[35] - As of the date of this interim report, the court hearing date has not yet been determined[35] Pledge of Assets As of June 30, 2025, the Group's assets had no pledges other than trade receivables pledged for bank and other borrowings - As of June 30, 2025, the Group's assets had no pledges, except for trade receivables pledged for bank and other borrowings[36] Employees and Remuneration Policy The Group values human resources, employing 50 staff as of June 30, 2025, with a slight decrease in staff costs, and its remuneration policy aligns with market practices, determined by individual performance and experience Employee Count and Staff Costs Comparison | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Number of Employees | 50 | 47 | | Total Staff Costs (Million USD) | 0.6 | 0.6 | - Total staff costs slightly decreased during the review period[37] Events After Reporting Period No other significant events occurred after the reporting period - No other significant events occurred after this period[38] Other Information Ibam Mine Resources and Reserves Information under JORC Code as of June 30, 2025 As of June 30, 2025, Ibam mine's total mineral resources under JORC Code amounted to 144 million tons with an average iron grade of 46.6%, and ore reserves were estimated at 102 million tons with an iron grade of 44.6% Ibam Mine Mineral Resources (as of June 30, 2025) | Category | Reserves (Million Tons) | Iron Grade (%) | | :--- | :--- | :--- | | Measured | 102 | 46.7 | | Inferred | 42 | 46.6 | | Total | 144 | 46.6 | Ibam Mine Ore Reserves (as of June 30, 2025) | Category | Reserves (Million Tons) | Iron Grade (%) | | :--- | :--- | :--- | | Probable | 102 | 44.6 | - All assumptions and technical parameters are consistent with the independent technical report presented in the prospectus dated June 20, 2013, and remain applicable to the disclosed data[41] Mining Area Production Activities During the reporting period, both mining and production volumes in the mining area were zero tons, consistent with the previous period - Mining and production volumes recorded zero tons during the period, consistent with the previous period[42] Capital Expenditure During the reporting period, the company made no significant capital expenditures for the purchase or upgrade of property, plant, and equipment, or for prepayments - During the period, the company made no significant capital expenditures for the purchase or upgrade of property, plant, and equipment, or for prepayments[43] Significant Acquisitions, Disposals and Investments The company had no future plans for significant acquisitions, disposals, or investments during the reporting period - The company had no future plans for any significant acquisitions, disposals, or investments during the period[44] Related Party Transactions Details of the Group's related party transactions are provided in Note 20 to the unaudited interim condensed financial statements of this interim report - Details of related party transactions are provided in Note 20 to the unaudited interim condensed financial statements of this interim report[45] Purchase, Sale or Redemption 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 period, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities[46] Corporate Governance The company is committed to good corporate governance practices and complied with the provisions of the Corporate Governance Code of the Hong Kong Stock Exchange during the reporting period - The company complied with the code provisions set out in Appendix C1 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, "Corporate Governance Code and Corporate Governance Report" during the period[47] Standard Code for Securities Transactions by Directors The company has adopted a code of conduct for directors' securities transactions, and all directors confirmed compliance with this code during the reporting period - The company has adopted a code of conduct for directors' securities transactions, and all directors confirmed their compliance with the required standards set out in the standard code during the period[48] Board Committees The Board has an Audit Committee, Remuneration Committee, and Nomination Committee, each fulfilling its duties, including reviewing financial reports, overseeing internal controls, recommending remuneration policies, and identifying director candidates, with all committees holding meetings during the reporting period - The Audit Committee reviewed the accounting principles and practices adopted by the Group and discussed internal controls and financial reporting matters with management[49] - The Remuneration Committee held one meeting during the period to review and discuss the remuneration packages of management and directors[52] - The Nomination Committee held one meeting during the period and received confirmations of independence from the independent non-executive directors[53] - The company considers all independent non-executive directors to be independent[54] Directors' and Chief Executive's Interests and Short Positions in Shares and Underlying Shares As of June 30, 2025, Chairman Mr. Ng Khing Yeu held 7.52% of the company's shares through a controlled corporation and beneficially owned 100% equity interest in the associated corporation, Grace Era Directors' Long Positions in the Company's Shares (as of June 30, 2025) | Director's Name | Nature of Interest | Number of Ordinary Shares | Approximate Percentage of the Company's Issued Share Capital | | :--- | :--- | :--- | :--- | | Ng Khing Yeu | Interest in controlled corporation | 112,827,000 (L) | 7.52% | Directors' Long Positions in Shares of Associated Corporations (as of June 30, 2025) | Director's Name | Nature of Associated Corporation | Nature of Interest | Approximate Percentage of Equity Interest in Associated Corporation | | :--- | :--- | :--- | :--- | | Ng Khing Yeu | Grace Era | Beneficial owner | 100.00% | Substantial Shareholders' and Other Persons' Interests and Short Positions in Shares and Underlying Shares As of June 30, 2025, substantial shareholder Yutian and its associate Mr. Li Yang held 50.18% of the company's shares, with Ample Professional Limited, Huarong Overseas Investment Holdings Co., Ltd., Huaheng, Grace Era, and Sichuan Chuanjiu Group International Trade Co., Ltd. also holding over 5% of shares or related interests Substantial Shareholders' and Other Persons' Interests in the Company's Shares (as of June 30, 2025) | Substantial Shareholder | Capacity/Nature of Interest | Number of Shares | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Yutian | Beneficial owner | 752,750,000 (L) | 50.18% | | Li Yang | Interest in controlled corporation | 752,750,000 (L) | 50.18% | | Ample Professional Limited | Interest in charged shares | 752,000,000 (L) | 50.13% | | Huarong Overseas Investment Holdings Co., Ltd. | Interest in controlled corporation | 752,000,000 (L) | 50.13% | | Huaheng | Beneficial owner | 100,575,000 (L) | 6.71% | | Grace Era | Beneficial owner | 112,827,000 (L) | 7.52% | | Sichuan Chuanjiu Group International Trade Co., Ltd. | Beneficial owner | 91,000,000 (L) | 6.07% | - Mr. Li Yang beneficially owns the entire issued share capital of Yutian Holdings Limited and is therefore deemed to be interested in all shares of the company held by Yutian[62] - Yutian has pledged 752,000,000 shares to an independent third-party institution, representing approximately 50.13% of the company's issued share capital[62] Interim Dividend The Board resolved not to declare any interim dividend for the reporting period - The Board resolved not to declare any interim dividend for the period (H1 2024: nil)[65] Review of Interim Condensed Financial Information The company's Board Audit Committee has reviewed the Group's interim results for the six months ended June 30, 2025, but the financial information has not been audited or reviewed by the auditors - The company's Board Audit Committee has reviewed the Group's interim results for the six months ended June 30, 2025[66] - The financial information in the condensed consolidated financial statements of the interim report has not been audited or reviewed by the company's auditors[66] Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income Profit or Loss and Comprehensive Income Overview For the six months ended June 30, 2025, the Group's revenue increased by 41% and gross profit by 15.3%, successfully turning a loss into a USD 151 thousand profit for the period, compared to a USD 8,996 thousand loss in the prior period, primarily due to a significant increase in other income and gains from interest waivers, with basic and diluted earnings per share of USD 0.01 cents Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the six months ended June 30) | Metric | 2025 (Thousand USD) | 2024 (Thousand USD) | | :--- | :--- | :--- | | Revenue | 8,417 | 5,969 | | Cost of sales | (7,285) | (4,986) | | Gross profit | 1,132 | 983 | | Other income and gains | 9,882 | 49 | | Selling and distribution expenses | (242) | (294) | | Administrative and other expenses | (1,080) | (1,239) | | Impairment loss on financial assets (net of reversal) | (28) | (86) | | Finance costs | (9,496) | (8,393) | | Profit (loss) before income tax | 168 | (8,980) | | Income tax expense | (17) | (16) | | Profit (loss) for the period | 151 | (8,996) | | Profit (loss) attributable to owners of the parent | 211 | (8,966) | | Profit (loss) attributable to non-controlling interests | (60) | (30) | | Total comprehensive income (expense) for the period | 828 | (9,195) | | Basic and diluted earnings (loss) per share (US Cents) | 0.01 | (0.60) | - Other income and gains significantly increased to USD 9,882 thousand, primarily due to the waiver of interest payable[68][30] - Total comprehensive income for the period was USD 828 thousand, compared to a total comprehensive expense of USD 9,195 thousand in the prior period, mainly affected by exchange differences[68] Interim Condensed Consolidated Statement of Financial Position Financial Position Overview As of June 30, 2025, the Group's non-current assets slightly increased, total current assets remained stable, but total current liabilities remained high, leading to persistent net current liabilities and a capital deficit, with amounts due to the ultimate holding company, bank and other borrowings, and notes being the main components of current liabilities Interim Condensed Consolidated Statement of Financial Position (as of June 30) | Metric | 2025 (Thousand USD) | 2024 (Thousand USD) | | :--- | :--- | :--- | | Total non-current assets | 19,448 | 18,464 | | Total current assets | 61,686 | 61,339 | | Total current liabilities | 244,234 | 243,874 | | Net current liabilities | (182,548) | (182,535) | | Net liabilities | (166,662) | (167,490) | | Capital deficit | (166,662) | (167,490) | - Trade receivables are a major component of current assets, amounting to USD 59,260 thousand[70] - Key current liabilities include amounts due to the ultimate holding company of USD 60,000 thousand, bank and other borrowings of USD 55,019 thousand, and notes of USD 85,090 thousand[70] Interim Condensed Consolidated Statement of Changes in Equity Equity Changes Overview For the six months ended June 30, 2025, equity attributable to owners of the company improved from a deficit of USD 167,396 thousand at the beginning of the period to a deficit of USD 166,508 thousand at the end, primarily due to a USD 211 thousand profit for the period and a USD 677 thousand increase in exchange fluctuation reserve Interim Condensed Consolidated Statement of Changes in Equity (For the six months ended June 30) | Metric | June 30, 2025 (Thousand USD) | June 30, 2024 (Thousand USD) | | :--- | :--- | :--- | | Equity attributable to owners of the company at beginning of period | (167,396) | (119,899) | | Profit (loss) for the period | 211 | (8,966) | | Movement in exchange fluctuation reserve | 677 | (199) | | Equity attributable to owners of the company at end of period | (166,508) | (129,064) | | Non-controlling interests at end of period | (154) | (30) | | Total at end of period | (166,662) | (129,094) | - Profit for the period of USD 211 thousand and an increase of USD 677 thousand in exchange fluctuation reserve were the main reasons for the improvement in equity attributable to owners of the company[71] - Capital reserve includes differences arising from the acquisition of non-controlling interests, reserves from debt waivers by the ultimate holding company, and the difference between the fair value and nominal value of interest-free loans[74] - Statutory reserve is transferred at no less than 10% of the profit after tax, in accordance with the articles of association of the PRC subsidiaries and relevant PRC laws and regulations[78] Interim Condensed Consolidated Statement of Cash Flows Cash Flow Overview For the six months ended June 30, 2025, the Group's net cash used in operating activities was USD 76 thousand, with no cash outflow from investing activities, and net cash used in financing activities was USD 82 thousand, resulting in cash and cash equivalents decreasing to USD 91 thousand at period-end Interim Condensed Consolidated Statement of Cash Flows (For the six months ended June 30) | Activity Type | 2025 (Thousand USD) | 2024 (Thousand USD) | | :--- | :--- | :--- | | Net cash used in operating activities | (76) | (199) | | Net cash used in investing activities | – | (2) | | Net cash (used in) generated from financing activities | (82) | 313 | | Net (decrease)/increase in cash and cash equivalents | (158) | 112 | | Cash and cash equivalents at end of period | 91 | 242 | - Net cash used in operating activities was USD 76 thousand, an improvement from USD 199 thousand in the prior period[79] - Net cash used in financing activities was USD 82 thousand, primarily comprising repayment of bank borrowings and interest paid[79] Notes to the Interim Condensed Consolidated Financial Statements 1. General Information Grace Life Technology Holdings Limited, incorporated in the Cayman Islands and listed on the Hong Kong Stock Exchange, is an investment holding company primarily engaged in iron ore mining, beneficiation, sales, and health product trading through its subsidiaries, with Yutian Holdings Limited identified as the ultimate holding company, and the Group adopting the US dollar as its presentation currency - The company was incorporated in the Cayman Islands on April 25, 2012, and its shares were listed on the Hong Kong Stock Exchange on July 3, 2013[80] - The company is an investment holding company, primarily operating through its subsidiaries in iron ore product mining, ore beneficiation, sales of iron ore, other commodities, and health products[80] - The company's ultimate holding company is Yutian Holdings Limited[80] - The Group adopted the US dollar as its presentation currency[81] 2. Basis of Preparation The interim condensed consolidated financial statements are prepared in accordance with the Listing Rules of the Stock Exchange and International Accounting Standard 34, with the Group facing significant going concern uncertainties, including substantial overdue borrowings and legal proceedings, but management has implemented various measures to mitigate liquidity pressure and support continued operations - As of June 30, 2025, the Group had approximately USD 200,109,000 in amounts due to the ultimate holding company, bank and other borrowings, and secured notes, while cash and cash equivalents amounted to only approximately USD 91,000[82] - Approximately USD 54,869,000 in principal borrowings and approximately USD 21,022,000 in interest payable were overdue, and the Group breached the terms and conditions of the overdue borrowings, potentially triggering cross-defaults[82] - Industrial Bank has claimed USD 60,000,000 in principal and other incidental damages from the company[84] - The company received a statutory demand for payment of RMB 250,974,633.21, but the company denies the related liability[85] - The ultimate holding company, Yutian, has agreed not to demand repayment of USD 60,000,000 from the company until the company's financial position allows for repayment[87] - The Group is actively negotiating the renewal and extension of bank loans and credit facilities, and seeking to introduce strategic investors[87] - Management believes that, subject to the successful implementation of refinancing measures, the preparation of interim financial reports on a going concern basis is appropriate[88] 3. Principal Accounting Policies The interim condensed consolidated financial statements are prepared on a historical cost basis, with accounting policies consistent with those used for the Group's annual consolidated financial statements for the year ended December 31, 2024 - The interim condensed consolidated financial statements are prepared on a historical cost basis[89] - The accounting policies used are consistent with those applied in the preparation of the Group's annual consolidated financial statements for the year ended December 31, 2024[89] 4. Application of Revised International Financial Reporting Standards During this interim period, the revised International Financial Reporting Standards issued by the IASB were first applied, but they had no significant impact on the Group's financial position or performance - International Accounting Standard 21 (Revised) "Lack of Exchangeability" was first applied during this interim period[90] - The application of the revised International Financial Reporting Standards had no significant impact on the Group's financial position or performance during this period and prior periods[90] 5. Revenue The Group's revenue primarily derives from the sale of health supplements and other products, with total revenue of USD 8,417 thousand for the six months ended June 30, 2025, of which health supplement sales contributed USD 8,288 thousand, mainly from the Chinese market Revenue Composition (For the six months ended June 30) | Revenue Source | 2025 (Thousand USD) | 2024 (Thousand USD) | | :--- | :--- | :--- | | Sales of health supplements | 8,288 | 5,969 | | Sales of other products | 129 | – | | Total | 8,417 | 5,969 | - All revenue is recognized at a point in time and primarily derived from the People's Republic of China (PRC) market[92] 6. Segment Information The Group's reportable segments include iron ore mining and beneficiation, commercial trading, health product trading, electronic product trading, and others, with health product trading being the sole revenue-generating segment and recording a profit for the six months ended June 30, 2025, while iron ore mining and beneficiation and commercial trading both recorded losses Segment Revenue and Results (For the six months ended June 30, 2025) | Segment | Segment Revenue (Thousand USD) | Segment Profit (Loss) (Thousand USD) | | :--- | :--- | :--- | | Iron ore mining and beneficiation business | – | (9) | | Commercial trading | – | (1,734) | | Health product trading | 8,288 | 235 | | Others | 129 | 11 | | Total | 8,417 | (1,497) | Segment Assets (as of June 30, 2025) | Segment | June 30, 2025 (Thousand USD) | December 31, 2024 (Thousand USD) | | :--- | :--- | :--- | | Iron ore mining and beneficiation business | 12,895 | 12,242 | | Commercial trading | 51,294 | 51,485 | | Health product trading | 10,260 | 9,348 | | Electronic product trading | – | 4 | | Others | 104 | 157 | | Total segment assets | 74,553 | 73,236 | | Corporate and other assets | 6,581 | 6,567 | | Total assets | 81,134 | 79,803 | Segment Liabilities (as of June 30, 2025) | Segment | June 30, 2025 (Thousand USD) | December 31, 2024 (Thousand USD) | | :--- | :--- | :--- | | Iron ore mining and beneficiation business | 739 | 694 | | Commercial trading | 186,570 | 177,918 | | Health product trading | 8,482 | 7,913 | | Others | 11 | 12 | | Total segment liabilities | 195,802 | 186,537 | | Corporate and other liabilities | 51,994 | 60,756 | | Total liabilities | 247,796 | 247,293 | 7. Finance Costs For the six months ended June 30, 2025, the Group's total finance costs amounted to USD 9,496 thousand, primarily comprising interest on notes, representing an increase from the prior period Finance Costs Composition (For the six months ended June 30) | Item | 2025 (Thousand USD) | 2024 (Thousand USD) | | :--- | :--- | :--- | | Interest on bank borrowings | 1,733 | 1,743 | | Interest on other borrowings | 259 | 460 | | Interest on notes | 7,504 | 6,190 | | Total | 9,496 | 8,393 | - The increase in finance costs was primarily due to higher interest on notes[100] 8. Income Tax Expense For the six months ended June 30, 2025, the Group recorded an income tax expense of USD 17 thousand, primarily for PRC corporate income tax, with no taxable profits generated by subsidiaries in the Cayman Islands, British Virgin Islands, Hong Kong, and Singapore Income Tax Expense (For the six months ended June 30) | Item | 2025 (Thousand USD) | 2024 (Thousand USD) | | :--- | :--- | :--- | | PRC corporate income tax | 17 | 16 | - The tax rate for PRC subsidiaries is 25%[102] - Taxable profits of Malaysian subsidiaries are subject to corporate income tax at a rate of 24%[102] 9. Profit (Loss) for the Period The profit (loss) for the period was primarily influenced by a USD 9,881 thousand gain from interest waiver, successfully turning a loss into a profit, after deducting expenses such as staff costs, depreciation, impairment losses, and lease rentals Profit (Loss) for the Period Composition (For the six months ended June 30) | Item | 2025 (Thousand USD) | 2024 (Thousand USD) | | :--- | :--- | :--- | | Staff costs | 618 | 617 | | Depreciation of property, plant and equipment | 12 | 11 | | Impairment loss on trade receivables | 9 | 82 | | Impairment loss on other receivables | 19 | 4 | | Lease rentals for office | 126 | 160 | | Amount of inventories recognized as expense | 7,285 | 4,986 | | Gain on waiver of interest payable | (9,881) | – | | Net exchange (gain) loss | (16) | 117 | - The gain on waiver of interest payable of USD 9,881 thousand was a major contributor to the profit for the period[103] 10. Dividends No dividends were paid or proposed for the six months ended June 30, 2025 and 2024 - No dividends were paid or proposed for the six months ended June 30, 2025 and 2024[104] 11. Earnings (Loss) Per Share For the six months ended June 30, 2025, profit attributable to owners of the company was USD 211 thousand, with basic and diluted earnings per share of USD 0.01 cents, and diluted earnings per share equaled basic earnings per share due to no potential dilutive ordinary shares Earnings (Loss) Per Share (For the six months ended June 30) | Metric | 2025 (Thousand USD) | 2024 (Thousand USD) | | :--- | :--- | :--- | | Profit (loss) for the purpose of calculating basic and diluted earnings (loss) per share | 211 | (8,966) | | Weighted average number of ordinary shares (Thousand shares) | 1,500,000 | 1,500,000 | | Basic and diluted earnings (loss) per share (US Cents) | 0.01 | (0.60) | - As there were no potential dilutive ordinary shares outstanding, diluted earnings (loss) per share was equal to basic earnings (loss) per share[105] 12. Trade Receivables As of June 30, 2025, the Group's total trade receivables amounted to USD 59,260 thousand, with the vast majority being overdue for more than 365 days, indicating challenges in long-term accounts receivable collection Trade Receivables Ageing Analysis (as of June 30) | Ageing | 2025 (Thousand USD) | 2024 (Thousand USD) | | :--- | :--- | :--- | | Within 30 days | 233 | 1,858 | | 31 to 60 days | 51 | 43 | | 61 to 120 days | 9 | 113 | | 121 to 365 days | 2,021 | 711 | | Over 365 days | 56,946 | 56,514 | | Total | 59,260 | 59,239 | - The credit period granted by the Group to its customers usually does not exceed 120 days[107] 13. Deposits, Prepayments and Other Receivables As of June 30, 2025, the Group's net deposits, prepayments, and other receivables amounted to USD 1,494 thousand, an increase from December 31, 2024 Deposits, Prepayments and Other Receivables (as of June 30) | Item | 2025 (Thousand USD) | 2024 (Thousand USD) | | :--- | :--- | :--- | | Deposits | 5 | 7 | | Prepayments | 1,310 | 1,096 | | Other receivables | 245 | 164 | | Less: Loss allowance | (66) | (57) | | Net amount | 1,494 | 1,210 | 14. Trade Payables As of June 30, 2025, the Group's total trade payables amounted to USD 6,895 thousand, with a significant increase in payables overdue for more than 365 days, indicating delayed payments for some amounts Trade Payables Ageing Analysis (as of June 30) | Ageing | 2025 (Thousand USD) | 2024 (Thousand USD) | | :--- | :--- | :--- | | Within 90 days | 468 | 1,685 | | 91 to 365 days | 1,482 | 4,949 | | Over 365 days | 4,945 | – | | Total | 6,895 | 6,634 | - The average credit period granted by suppliers ranges from 30 to 60 days[109] 15. Other Payables and Accruals As of June 30, 2025, the Group's total other payables and accruals amounted to USD 32,587 thousand, a decrease from December 31, 2024, primarily due to a reduction in interest payable Other Payables and Accruals (as of June 30) | Item | 2025 (Thousand USD) | 2024 (Thousand USD) | | :--- | :--- | :--- | | Other payables | 1,967 | 1,677 | | Interest payable | 29,019 | 36,337 | | Staff salaries payable | 1,229 | 1,069 | | Accrued expenses | 372 | 462 | | Total | 32,587 | 39,545 | 16. Contract Liabilities As of June 30, 2025, the Group's contract liabilities amounted to USD 1,208 thousand, primarily representing customer payments received before goods delivery Contract Liabilities (as of June 30) | Item | 2025 (Thousand USD) | 2024 (Thousand USD) | | :--- | :--- | :--- | | Current liabilities | 1,208 | 1,072 | - Contract liabilities are recognized when the company receives customer payments before goods delivery, typically representing deposits of 20% to 50% of the total consideration[111] 17. Bank and Other Borrowings As of June 30, 2025, the Group's total bank and other borrowings amounted to USD 55,019 thousand, with most repayable within one year or on demand, some bank loans secured by trade receivables and guaranteed by a director, and other loans, though overdue, had their interest rates adjusted via supplementary agreements with independent lenders, and approximately USD 9,881 thousand in accrued interest was waived in April 2025 Bank and Other Borrowings (as of June 30) | Item | 2025 (Thousand USD) | 2024 (Thousand USD) | | :--- | :--- | :--- | | Bank borrowings | 36,683 | 36,752 | | Other borrowings | 18,336 | 18,336 | | Total | 55,019 | 55,088 | | Repayable within one year or on demand | 55,019 | 55,031 | | Amount under non-current liabilities | – | 57 | - Approximately USD 36,683,000 of bank loans are floating-rate loans, with effective annual interest rates ranging from 7.31% to 8.66%[112] - Some bank loans are secured by certain trade receivables of the Group and guaranteed by the company and one of its directors[112] - Other loans, with a total principal amount of approximately USD 18,150,000, guaranteed by Director Mr. Li, were previously overdue but had their interest rates adjusted through supplementary agreements[113] - On April 8, 2025, the company entered into an interest waiver agreement with the relevant lenders, waiving accrued interest of approximately USD 9,881,000[114] 18. Notes As of June 30, 2025, the Group's total notes amounted to USD 85,090 thousand, comprising Note 1 and Note 2, both classified as current liabilities, with Note 1 having multiple extended redemption dates, adjusted interest rates, and waived default events, while Note 2 is guaranteed by Yutian and Mr. Li and secured by the company's shares Notes Composition (as of June 30) | Item | 2025 (Thousand USD) | 2024 (Thousand USD) | | :--- | :--- | :--- | | Note 1 | 67,090 | 60,172 | | Note 2 | 18,000 | 18,000 | | Total | 85,090 | 78,172 | | Current liabilities | 85,090 | 78,172 | - Note 1's original annual interest rate of 12% was subsequently adjusted to the original annual interest rate plus 10% via a new letter agreement[115][120] - Note 1's redemption date was extended multiple times, and default events such as exceeding the debt-to-equity ratio were waived[118][119][120][121] - Note 2 has a principal amount of USD 20,000,000, a fixed interest rate of 7%, is guaranteed by Yutian and Mr. Li, and secured by a total of 172,352,000 shares of the company[122][124] 19. Share Capital As of June 30, 2025, the company's authorized share capital was 3,000,000 thousand shares, with issued and fully paid share capital of 1,500,000 thousand shares, each with a par value of HKD 0.01 Share Capital Information (as of June 30) | Item | Number of Shares (Thousand shares) | Share Capital (Thousand USD) | | :--- | :--- | :--- | | Authorized share capital | 3,000,000 | 3,867 | | Issued and fully paid share capital | 1,500,000 | 1,934 | 20. Related Party Transactions The Group's related party transactions primarily involve Director Mr. Li and his family members, and the ultimate holding company Yutian, providing guarantees for the Group's bank financing and notes, with key management personnel's remuneration decreasing during the reporting period - Mr. Li, a director of the company, provided guarantees for the Group's bank financing[126] - Mr. Li, a director of the company, Mr. Li's family members, and the ultimate holding company Yutian provided guarantees for the Group's issued 12% senior secured notes and 7% fixed coupon secured notes[126] Key Management Personnel Remuneration (For the six months ended June 30) | Item | 2025 (Thousand USD) | 2024 (Thousand USD) | | :--- | :--- | :--- | | Short-term benefits | 44 | 96 | | Termination benefits | – | 24 | | Total | 44 | 120 |