和谐汽车(03836) - 2025 - 中期业绩

Performance Highlights China Harmony Auto Holding Limited achieved significant performance growth in the first half of 2025, with substantial increases in revenue and new car sales, gross profit growth exceeding 50%, and successfully turned profitable with an adjusted net profit of RMB20.7 million, while loss per share significantly narrowed H1 2025 Performance Highlights | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 9,636.6 | 7,466.3 | 29.1% | | New car sales (units) | 30,666 | 19,100 | 60.6% | | Gross Profit | 559.8 | 366.3 | 52.8% | | Adjusted Net Profit | 20.7 | (76.3) | turned profitable | | Basic and Diluted Loss Per Share (RMB) | (0.008) | (0.051) | -84.3% | - Hong Kong and overseas businesses contributed net profit of RMB2.8 million[2] Interim Financial Results This section presents the Company's unaudited condensed consolidated statement of profit or loss and other comprehensive income and condensed consolidated statement of financial position for the six months ended June 30, 2025, showcasing key financial metrics' year-on-year changes and period-end asset and liability structure Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income During the reporting period, the Company's revenue significantly increased, and operating profit substantially improved, but loss for the period persisted due to finance costs and income tax expense, while loss attributable to owners of the Company significantly narrowed Key Data from Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income | Metric | As of June 30, 2025 (RMB thousand) | As of June 30, 2024 (RMB thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 9,636,608 | 7,466,294 | 29.1% | | Cost of sales and services | (9,076,831) | (7,100,031) | 27.8% | | Gross Profit | 559,777 | 366,263 | 52.8% | | Operating Profit | 91,844 | 14,118 | 550.6% | | Loss Before Tax | (3,194) | (64,825) | -95.1% | | Loss for the Period | (10,592) | (74,703) | -85.8% | | Loss Attributable to Owners of the Company | (11,796) | (76,275) | -84.5% | Condensed Consolidated Statement of Financial Position As of June 30, 2025, the Company's total non-current assets slightly increased, total current assets decreased, leading to a reduction in net current assets, while the asset and liability structure remained relatively stable Key Data from Condensed Consolidated Statement of Financial Position | Metric | As of June 30, 2025 (RMB thousand) | As of Dec 31, 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Total Non-Current Assets | 5,313,105 | 5,223,830 | 1.7% | | Total Current Assets | 6,552,864 | 7,023,475 | -6.7% | | Total Current Liabilities | 5,569,563 | 5,803,757 | -4.0% | | Net Current Assets | 983,301 | 1,219,718 | -19.4% | | Net Assets | 5,251,240 | 5,253,236 | -0.04% | | Total Equity | 5,251,240 | 5,253,236 | -0.04% | Notes to the Unaudited Condensed Consolidated Interim Financial Statements This section details the basis of preparation, accounting policies, segment information, revenue composition, various expenses, and specific items of the statement of financial position for the interim financial statements, providing supplementary explanations for understanding the financial data 1. Basis of Preparation The condensed consolidated interim financial statements are prepared in accordance with Appendix D2 of the HKEX Listing Rules and HKAS 34, with accounting policies and calculation methods consistent with the 2024 annual financial statements - The financial statements comply with Appendix D2 of the HKEX Listing Rules and HKAS 34, with accounting policies consistent with the 2024 annual report[9] 2. Adoption of New and Revised Hong Kong Financial Reporting Standards During the reporting period, the Group adopted all new and revised Hong Kong Financial Reporting Standards effective from January 1, 2025, but these adoptions did not result in significant changes to accounting policies or the presentation and amounts in the financial statements - The Group has adopted all new and revised Hong Kong Financial Reporting Standards, but without significant impact on accounting policies or financial statement presentation and amounts[10] 3. Operating Segment Information The Group's primary business is motor vehicle sales and after-sales services, which management considers a single reportable segment; geographical information shows significant revenue growth in Hong Kong and overseas, while non-current assets are mainly concentrated in Mainland China Geographical Information The Group's revenue is disaggregated by geographical location, with Hong Kong and overseas market revenue increasing 5.0 times, while non-current assets are primarily located in Mainland China Revenue and Non-Current Assets by Geographical Location | Metric | As of June 30, 2025 (RMB thousand) | As of June 30, 2024 (RMB thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue from External Customers | | | | | Mainland China | 5,734,979 | 6,814,347 | -15.8% | | Hong Kong and Overseas | 3,901,629 | 651,947 | 500.0% | | Non-Current Assets | As of June 30, 2025 (RMB thousand) | As of Dec 31, 2024 (RMB thousand) | Change (%) | | Mainland China | 3,985,037 | 4,075,953 | -2.2% | | Hong Kong and Overseas | 1,328,068 | 1,147,877 | 15.7% | Major Customers Information During the reporting period, no single customer's sales accounted for 10% or more of the Group's total revenue - No single customer accounted for 10% or more of the Group's total revenue[15] 4. Revenue The Group's total revenue increased by 29.1% year-on-year, primarily driven by motor vehicle sales and other businesses, while after-sales service revenue and finance lease service revenue both decreased Revenue Disaggregation: Type of Goods or Services Motor vehicle sales and other revenue significantly increased, while after-sales service revenue decreased Revenue by Type of Goods or Services | Revenue Type | As of June 30, 2025 (RMB thousand) | As of June 30, 2024 (RMB thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Motor vehicle sales and others | 8,577,419 | 6,273,647 | 36.7% | | After-sales services | 1,044,655 | 1,170,533 | -10.7% | | Finance lease services | 14,534 | 22,114 | -34.4% | | Total Revenue | 9,636,608 | 7,466,294 | 29.1% | Timing of Revenue Recognition Revenue is primarily recognized at a point in time, including motor vehicle sales and after-sales services - Revenue is primarily recognized at a point in time, including motor vehicle sales and after-sales services[19] 5. Other Income and Gains, Net Other income and gains, net, increased by 4.2% year-on-year, primarily driven by an increase in commission income Other Income and Gains, Net | Item | As of June 30, 2025 (RMB thousand) | As of June 30, 2024 (RMB thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Commission income | 205,325 | 189,539 | 8.3% | | Interest income from loans and advances to third parties | 16,670 | 24,250 | -31.2% | | Bank interest income | 10,760 | 13,960 | -23.0% | | Government grants | 1,008 | 471 | 114.0% | | Others | 14,522 | 10,003 | 45.2% | | Total | 248,285 | 238,223 | 4.2% | 6. Finance Costs Finance costs increased by 20.3% year-on-year, primarily due to higher interest on bank and other borrowings Finance Costs | Item | As of June 30, 2025 (RMB thousand) | As of June 30, 2024 (RMB thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Interest on bank and other borrowings | 59,662 | 44,312 | 34.6% | | Interest on lease liabilities | 35,232 | 34,625 | 1.8% | | Total | 94,894 | 78,937 | 20.3% | 7. Income Tax Expense Income tax expense decreased by 25.2% year-on-year, primarily due to a reduction in the provision for current PRC enterprise income tax Income Tax Expense | Item | As of June 30, 2025 (RMB thousand) | As of June 30, 2024 (RMB thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Provision for current PRC enterprise income tax for the period | 7,339 | 10,457 | -29.9% | | Deferred tax | 59 | (579) | -110.2% | | Total | 7,398 | 9,878 | -25.2% | 8. Loss for the Period The Group's loss for the period significantly narrowed, primarily benefiting from a reduction in loss on disposal and write-off of property, plant and equipment, and structural changes in cost of sales and services Loss for the Period Composition | Item | As of June 30, 2025 (RMB thousand) | As of June 30, 2024 (RMB thousand) | | :--- | :--- | :--- | | Directors' Remuneration | 2,666 | 4,415 | | Loss/(Gain) on disposal and write-off of property, plant and equipment | (32,538) | 5,687 | | Employee benefit expenses (including directors' and chief executive's emoluments) | | | | Wages and salaries | 256,351 | 196,083 | | Other benefits | 49,533 | 39,842 | | Cost of sales and services: | | | | Cost of motor vehicle sales | 8,440,700 | 6,377,811 | | Cost of after-sales services | 636,131 | 722,220 | 9. Dividends The Board recommended not to declare an interim dividend for the six months ended June 30, 2025 - The Board recommended not to declare an interim dividend for the first half of 2025[26] 10. Loss Per Share Basic and diluted loss per share significantly narrowed to RMB0.008, reflecting an improvement in the Company's profitability Loss Per Share | Metric | As of June 30, 2025 (RMB) | As of June 30, 2024 (RMB) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Basic Loss Per Share | (0.008) | (0.051) | -84.3% | | Diluted Loss Per Share | (0.008) | (0.051) | -84.3% | 11. Property, Plant and Equipment During the reporting period, the Group acquired property, plant and equipment of approximately RMB364.4 million, primarily for overseas sales network expansion - The Group acquired property, plant and equipment of approximately RMB364.4 million, primarily for overseas sales network expansion[29][64] 12. Trade Receivables As of June 30, 2025, total trade receivables increased to RMB334.5 million, with the highest proportion being within 3 months aging Trade Receivables Aging Analysis | Aging | As of June 30, 2025 (RMB thousand) | As of Dec 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within 3 months | 306,596 | 266,712 | | 3 to 6 months | 19,628 | 17,386 | | 7 to 12 months | 7,257 | 1,791 | | Over 12 months | 1,007 | 83 | | Total | 334,488 | 285,972 | 13. Trade Payables and Bills Payable As of June 30, 2025, total trade payables and bills payable decreased to RMB733.1 million, with the highest proportion being within 3 months aging Trade Payables Aging Analysis | Aging | As of June 30, 2025 (RMB thousand) | As of Dec 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within 3 months | 656,450 | 792,998 | | 3 to 6 months | 59,434 | 51,308 | | 6 to 12 months | 16,743 | 10,939 | | Over 12 months | 463 | — | | Total | 733,090 | 855,245 | 14. Share Capital As of June 30, 2025, the Company's issued and fully paid share capital was 1,523,264,677 shares, amounting to RMB12,083 thousand, consistent with the end of 2024 Share Capital Information | Metric | As of June 30, 2025 | As of Dec 31, 2024 | | :--- | :--- | :--- | | Number of Shares | 1,523,264,677 | 1,523,264,677 | | Amount (RMB thousand) | 12,083 | 12,083 | 15. Contingent Liabilities As of June 30, 2025, and December 31, 2024, the Group had no significant contingent liabilities - The Group had no significant contingent liabilities at the end of the reporting period[33] 16. Capital Commitments As of June 30, 2025, the Group's contracted but unprovided capital commitments for property, plant and equipment amounted to RMB121.7 million, an increase from the end of 2024 Capital Commitments | Item | As of June 30, 2025 (RMB thousand) | As of Dec 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Property, plant and equipment - contracted but not provided for | 121,711 | 74,968 | 17. Approval of Unaudited Condensed Consolidated Interim Financial Statements The unaudited condensed consolidated interim financial statements were approved and authorized for issue by the Board on August 29, 2025 - The Board approved and authorized for issue the interim financial statements on August 29, 2025[35] Operating Review and Outlook This section reviews the overall performance of China's passenger vehicle and new energy vehicle markets, highlights challenges in the luxury vehicle market, and details the Group's business strategies, operational achievements, and future development plans in domestic and international markets, particularly its significant progress in the international new energy vehicle market Industry Overview and Outlook In the first half of 2025, China's passenger vehicle retail sales increased by 10.8%, and new energy vehicle sales grew by 33.3%, but the luxury vehicle market faced challenges with an 11.8% sales decrease, while Chinese new energy vehicle brands performed exceptionally in the global market with significant export growth - In the first half of 2025, China's passenger vehicle retail sales were approximately 10.9 million units, a 10.8% year-on-year increase[36] - New energy vehicle cumulative sales grew by 33.3% to 5.5 million units, with BYD holding a 30.7% market share[36] - Luxury vehicle market cumulative sales were approximately 1.2 million units, a 11.8% year-on-year decrease, with all BBA brands experiencing sales declines[37] - China's new energy vehicle exports in the first half were approximately 987,000 units, a 48.0% year-on-year increase, with BYD's exports growing 1.3 times[38] - The average comprehensive inventory coefficient for auto dealers remained around 1.46, slightly lower than the same period last year, with fiscal policies continuing to boost demand[39] Business Review and Outlook The Group's total sales volume reached 30,666 units in the first half, a 60.6% year-on-year increase, with Hong Kong and overseas markets contributing the main growth drivers; the Group achieved a performance turnaround and market expansion through its "1+2" operating strategy, prudent M&A, efficient synergy, and internationalization layout - The Group's total sales volume reached 30,666 units in the first half, a 60.6% year-on-year increase, significantly exceeding the overall market growth rate[40] - Sales in Hong Kong and overseas markets reached 15,725 units, accounting for 51.3% of total sales, becoming the main growth driver[40] - After excluding non-recurring losses related to store closures, adjusted net profit was RMB20.7 million, achieving a significant turnaround[40] Mainland China Market Mainland China market business remained stable, with adjusted operating net profit of approximately RMB17.9 million; the Group achieved excellent performance through its "1+2" operating strategy (focusing on performance profitability, advantageous brand regions, and high efficiency and quality), prudent M&A, and strengthened business synergy (proactive sales pacing, structural optimization, and deep cultivation of after-sales business), and added 3 Denza brand experience showrooms - Mainland China market's adjusted operating net profit was approximately RMB17.9 million[41] - Adhering to the '1+2' operating strategy, focusing on ultra-luxury brands (Bentley, Rolls-Royce, Ferrari) and luxury brands (BMW, Lexus), and optimizing non-advantageous regional brands[41] - Adopting a prudent M&A development model, focusing on advantageous brands and regions, and strictly controlling costs[42] - Strengthening efficient synergy and high-quality collaboration, effectively reducing losses through proactive sales pacing and structural optimization, with after-sales service gross margin increasing to 39.2%[43] - Added 3 Denza brand experience showrooms, optimizing brand structure and sales channel layout[44] International New Energy Vehicle Market The Group's international new energy vehicle market strategy has shown initial success, establishing a global strategic partnership with BYD, operating 40 4S centers, 36 showrooms, and 6 service centers across Asia-Pacific, Europe, and Africa, with 29 new outlets added in the first half; as BYD's sole primary authorized dealer in Hong Kong, it sold 4,762 BYD new energy vehicles in the first half, achieving significant growth in Indonesia, Cambodia, and the Philippines markets, adopting a 'low-cost, high-efficiency' operating model - Established a global strategic partnership with BYD to expand new energy vehicle distribution and after-sales services[45] - As of June 30, 2025, operating 40 4S centers, 36 showrooms, and 6 service centers across Asia-Pacific, Europe, and Africa, with 29 new outlets added in the first half[45] - As BYD's sole primary authorized dealer in Hong Kong, sold 4,762 BYD new energy vehicles in the first half, becoming the best-selling brand in Hong Kong[45] - Sales in Indonesia, Cambodia, and the Philippines markets grew by 226%, 444%, and 89% respectively[45] - Adopting a 'low-cost, high-efficiency' operating model, with overseas single-store investment and employee numbers lower than traditional 4S stores in China[45] - Adhering to the 'Four Fast' rapid deployment strategy (fast investment, fast store establishment, fast recruitment, fast implementation), and leveraging domestic talent reserves and training systems to achieve rapid market breakthroughs[46] Future Outlook The Group's future systematic deployment will revolve around 'building framework, expanding coverage, establishing foundation, refining operations, broadening scope, and deepening impact,' including completing global network framework layout, increasing network density in core Asia-Pacific and European markets, building localized management and profitability systems, strengthening refined operations, expanding new energy vehicle peripheral businesses, and striving to become the world's largest new energy vehicle dealership group - Systematically deploying around 'building framework, expanding coverage, establishing foundation, refining operations, broadening scope, and deepening impact'[47] - Aiming to complete global network framework layout, rapidly develop new markets in the Middle East, Africa, and Americas, and increase network density in core Asia-Pacific and European markets[47] - Continuously building localized management foundations and profitability systems, strengthening refined operations, and enhancing profitability and efficiency[47] - Expanding new energy vehicle peripheral businesses, such as energy storage, charging solutions, battery repair, and recycling[47] - Committed to becoming the world's largest new energy vehicle dealership group[47] Financial Performance Analysis This section details the Group's financial indicators for the first half of 2025, including revenue, costs, gross profit, various expenses, and profitability, and elaborates on its liquidity, financial resources, and capital resources, revealing key factors for performance improvement amidst market challenges Revenue Analysis The Group's total revenue increased by 29.1% to RMB9,636.6 million year-on-year, primarily due to significant growth in motor vehicle and other sales revenue and strong performance in Hong Kong and overseas markets - Total revenue for the first half of 2025 was RMB9,636.6 million, a 29.1% increase compared to the same period in 2024[48] Revenue by Type of Goods or Services Motor vehicle and other sales revenue significantly increased by 36.7% to RMB8,577.4 million, accounting for 89.0% of total revenue, primarily due to the expansion of the international sales network; after-sales service revenue decreased by 10.7%, and finance lease service revenue decreased by 34.4% Revenue by Type of Goods or Services | Revenue Type | H1 2025 (RMB million) | H1 2024 (RMB million) | YoY Change (%) | % of Total Revenue | | :--- | :--- | :--- | :--- | :--- | | Motor vehicle sales and others | 8,577.4 | 6,273.6 | 36.7% | 89.0% | | After-sales services | 1,044.7 | 1,170.5 | -10.7% | 10.8% | | Finance lease services | 14.5 | 22.1 | -34.4% | 0.2% | Revenue by Geographical Location Hong Kong and overseas revenue significantly increased by 5.0 times to RMB3,901.6 million, accounting for 40.5% of total revenue, reflecting the success of the global strategy; Mainland China revenue decreased by 15.8% to RMB5,735.0 million, primarily affected by weak domestic consumption and price competition Revenue by Geographical Location | Region | H1 2025 (RMB million) | H1 2024 (RMB million) | YoY Change (%) | % of Total Revenue | | :--- | :--- | :--- | :--- | :--- | | Mainland China | 5,735.0 | 6,814.3 | -15.8% | 59.5% | | Hong Kong and Overseas | 3,901.6 | 652.0 | 500.0% | 40.5% | - Revenue from BMW and Lexus brands in Mainland China was RMB4,544.6 million, accounting for 79.2% of Mainland China's revenue[52] Cost of Sales and Services Cost of sales and services increased by 27.8% to RMB9,076.8 million year-on-year, consistent with the growth in motor vehicle and other sales revenue; cost of motor vehicle sales increased by 32.3%, while cost of after-sales services decreased by 11.9% Cost of Sales and Services | Item | H1 2025 (RMB million) | H1 2024 (RMB million) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Cost of motor vehicle sales | 8,440.7 | 6,377.8 | 32.3% | | Cost of after-sales services | 636.1 | 722.2 | -11.9% | | Total | 9,076.8 | 7,100.0 | 27.8% | Gross Profit and Gross Margin Gross profit increased by 52.8% to RMB559.8 million year-on-year, with gross margin improving by 0.9 percentage points to 5.8%; gross profit from motor vehicle and other sales turned from loss to profit, while after-sales service gross profit slightly decreased but gross margin slightly increased Gross Profit and Gross Margin | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Gross Profit | 559.8 | 366.3 | 52.8% | | Gross Margin | 5.8% | 4.9% | +0.9 percentage points | Gross Profit and Gross Margin by Business Type | Business Type | H1 2025 Gross Profit (RMB million) | H1 2024 Gross Profit (RMB million) | H1 2025 Gross Margin (%) | H1 2024 Gross Margin (%) | | :--- | :--- | :--- | :--- | :--- | | Motor vehicle sales and others | 136.7 | (104.2) | 1.6% | -1.7% | | After-sales services | 408.5 | 448.3 | 39.1% | 38.3% | Other Income and Gains, Net Other income and gains, net, increased by 4.2% to RMB248.3 million year-on-year, primarily driven by an 8.3% increase in commission income Other Income and Gains, Net | Item | H1 2025 (RMB million) | H1 2024 (RMB million) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Other income and gains | 248.3 | 238.2 | 4.2% | | Commission income | 205.3 | 189.5 | 8.3% | Selling and Distribution Expenses Selling and distribution expenses increased by 20.0% to RMB549.2 million year-on-year, primarily due to the continuous expansion of the international distribution network Selling and Distribution Expenses | Item | H1 2025 (RMB million) | H1 2024 (RMB million) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Selling and distribution expenses | 549.2 | 459.3 | 20.0% | Administrative Expenses Administrative expenses increased by 27.4% to RMB167.0 million year-on-year, also primarily affected by the expansion of the international distribution network Administrative Expenses | Item | H1 2025 (RMB million) | H1 2024 (RMB million) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Administrative expenses | 167.0 | 131.1 | 27.4% | Operating Profit Operating profit significantly increased by 551.1% to RMB91.8 million, indicating a substantial improvement in the Company's operating efficiency Operating Profit | Item | H1 2025 (RMB million) | H1 2024 (RMB million) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Operating Profit | 91.8 | 14.1 | 551.1% | Finance Costs Finance costs increased by 20.3% to RMB94.9 million year-on-year, primarily due to higher interest expenses resulting from increased bank borrowing levels Finance Costs | Item | H1 2025 (RMB million) | H1 2024 (RMB million) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Finance costs | 94.9 | 78.9 | 20.3% | Loss Attributable to Owners of the Company Loss attributable to owners of the Company significantly decreased to RMB11.8 million (compared to a loss of RMB76.3 million in the same period of 2024); after excluding non-recurring expenses, adjusted net profit was RMB20.7 million Loss Attributable to Owners of the Company | Item | H1 2025 (RMB million) | H1 2024 (RMB million) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Loss Attributable to Owners of the Company | (11.8) | (76.3) | -84.5% | | Adjusted Net Profit (excluding non-recurring expenses) | 20.7 | (76.3) | turned profitable | Liquidity, Financial Resources and Capital Resources The Group primarily meets its liquidity needs through operating cash flow and bank loans; as of the end of the reporting period, total cash and deposits were RMB1,064.3 million, net current assets decreased, capital expenditure significantly increased, and the gearing ratio improved Cash Flows As of June 30, 2025, the Group's total cash and deposits were RMB1,064.3 million; net cash generated from operating activities was RMB314.6 million, net cash used in investing activities was RMB291.2 million, and net cash used in financing activities was RMB76.9 million Key Cash Flow Data | Item | As of June 30, 2025 (RMB million) | | :--- | :--- | | Total cash and deposits | 1,064.3 | | Net cash generated from operating activities | 314.6 | | Net cash used in investing activities | 291.2 | | Net cash used in financing activities | 76.9 | Net Current Assets Net current assets decreased by 19.4% to RMB983.3 million year-on-year, primarily due to a decrease in prepayments, other receivables and other assets, cash and bank balances, and pledged and restricted bank deposits Net Current Assets | Item | As of June 30, 2025 (RMB million) | As of Dec 31, 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Net Current Assets | 983.3 | 1,219.7 | -19.4% | Capital Expenditure Capital expenditure increased by 104.5% to RMB364.4 million year-on-year, primarily for the purchase of property, plant and equipment related to the expansion of overseas sales networks Capital Expenditure | Item | H1 2025 (RMB million) | H1 2024 (RMB million) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Capital expenditure | 364.4 | 178.2 | 104.5% | Contingent Liabilities As of June 30, 2025, the Group had no significant contingent liabilities or guarantees - The Group had no significant contingent liabilities or guarantees at the end of the reporting period[66] Inventories Total inventories increased to RMB1,992.7 million, with average inventory turnover days decreasing by 0.9 days to 39.4 days year-on-year, reflecting the Group's inventory management measures under market pressure Inventories and Turnover Days | Item | As of June 30, 2025 (RMB million) | As of Dec 31, 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Inventories | 1,992.7 | 1,921.9 | 3.7% | | Average Inventory Turnover Days | 39.4 days | 40.3 days (H1 2024) | -0.9 days | Bank and Other Borrowings Total bank and other borrowings increased by 4.5% to RMB3,574.2 million year-on-year, with a significant increase in current bank loans Bank and Other Borrowings | Item | As of June 30, 2025 (RMB thousand) | As of Dec 31, 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Bank loans | 2,427,120 | 1,943,783 | 24.9% | | Other borrowings | 1,147,036 | 1,475,202 | -22.3% | | Total | 3,574,156 | 3,418,985 | 4.5% | Gearing Ratio The gearing ratio (calculated as total liabilities divided by total assets) decreased by 1.4 percentage points to 55.7%, indicating an improvement in financial leverage Gearing Ratio | Metric | As of June 30, 2025 | As of Dec 31, 2024 | Change (percentage points) | | :--- | :--- | :--- | :--- | | Gearing Ratio | 55.7% | 57.1% | -1.4 | Interest Rate and Foreign Exchange Risks The Group primarily calculates interest at fixed rates, with limited interest rate fluctuation risk; foreign exchange risk is not significant, and exchange rate fluctuations are not hedged - The Group primarily calculates interest at fixed rates, with limited interest rate risk[71] - Foreign exchange risk is not significant, and exchange rate fluctuations are not hedged[71] Capital Structure and Treasury Policy The Group's business activities are primarily funded through a combination of equity, cash generated from operating activities, interest-bearing bank loans, and other borrowings, maintaining a sound liquidity position - The Group's business activities are primarily funded through a combination of equity, cash generated from operating activities, interest-bearing bank loans, and other borrowings[72](index=72&type