雅高控股(03313) - 2025 - 中期业绩

Performance Overview Key Financial Indicators For the six months ended June 30, 2025, the Group's revenue increased by 10.4% to RMB 30.7 million, but loss before tax and net loss both expanded, with basic and diluted loss per share at RMB 0.023 Key Financial Indicators | Indicator | For the six months ended June 30, 2025 (RMB million) | For the six months ended June 30, 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 30.7 | 27.8 | +10.4% | | Loss before tax | (26.8) | (24.2) | +10.7% (Loss expanded) | | Net loss | (26.9) | (24.5) | +9.8% (Loss expanded) | | Basic and diluted loss per share | 0.023 | 0.025 | -8.0% (Loss narrowed) | Financial Information Condensed Interim Consolidated Statement of Profit or Loss and Other Comprehensive Income For the six months ended June 30, 2025, the Group's revenue was RMB 30,709 thousand, an increase from RMB 27,805 thousand in the prior period, but loss for the period expanded to RMB 26,945 thousand due to decreased other income and increased administrative and finance costs Condensed Interim Consolidated Statement of Profit or Loss and Other Comprehensive Income | Indicator | For the six months ended June 30, 2025 (RMB thousand) | For the six months ended June 30, 2024 (RMB thousand) | | :--- | :--- | :--- | | Revenue | 30,709 | 27,805 | | Cost of sales | (22,918) | (20,259) | | Gross profit | 7,791 | 7,546 | | Other income and gains | 2,147 | 10,039 | | Selling and distribution expenses | (3,842) | (3,233) | | Administrative expenses | (21,450) | (26,935) | | Finance costs | (8,371) | (7,402) | | Loss before tax | (26,802) | (24,202) | | Income tax expense | (143) | (341) | | Loss and total comprehensive loss for the period | (26,945) | (24,543) | | Loss attributable to owners of the Company | (26,945) | (24,526) | Condensed Interim Consolidated Statement of Financial Position As of June 30, 2025, total non-current assets slightly decreased, total current assets slightly increased, current liabilities remained stable, and non-current liabilities increased, leading to a decrease in net assets from RMB 600,704 thousand at year-end 2024 to RMB 573,759 thousand Condensed Interim Consolidated Statement of Financial Position | Indicator | As of June 30, 2025 (RMB thousand) | As of December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Total non-current assets | 799,904 | 810,692 | | Total current assets | 190,467 | 188,944 | | Total current liabilities | 163,344 | 163,582 | | Total non-current liabilities | 253,268 | 235,350 | | Net assets | 573,759 | 600,704 | | Total equity | 573,759 | 600,704 | Notes 1. Company Information The Company, incorporated in the Cayman Islands, primarily engages in marble quarrying, processing, trading, sales, calcium carbonate products, and logistics and warehousing services - The company is incorporated in the Cayman Islands, with main businesses including marble stone, calcium carbonate products, and logistics and warehousing services[7] 2. Basis of Preparation and Accounting Policies Interim financial information is prepared in accordance with IAS 34 and HKEX Listing Rules, with consistent accounting policies from 2024, and new standards having no material impact on operating results or financial position - Interim financial information is prepared in accordance with International Accounting Standard 34 and the Listing Rules, with accounting policies consistent with the prior year[8][9] - Newly adopted accounting standards have no material impact on the Group's operating results or financial position[10] 3. Revenue and Segment Information The Group's revenue primarily derives from marble and related products, calcium carbonate products, and logistics and warehousing services, with calcium carbonate products contributing 92.7% of total revenue for the six months ended June 30, 2025 - The Group's revenue primarily derives from marble and related products, calcium carbonate products, and logistics and warehousing services[12] Revenue by Product Category | Product Category | 2025 (RMB thousand) | 2025 (%) | 2024 (RMB thousand) | 2024 (%) | | :--- | :--- | :--- | :--- | :--- | | Marble stone products | 1,061 | 3.5 | – | – | | Calcium carbonate products | 28,477 | 92.7 | 26,856 | 96.6 | | Revenue from marble products | 29,538 | 96.2 | 26,856 | 96.6 | | Logistics and warehousing services | 1,171 | 3.8 | 949 | 3.4 | | Total | 30,709 | 100.0 | 27,805 | 100.0 | - All external revenue is attributable to customers located in China, where the majority of non-current assets are also located[17][18] Major Customers | Major Customer | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Customer A | 10,758 | 6,859 | | Customer B | Not applicable* | 4,347 | *Corresponding revenue contribution to the Group's total revenue does not exceed 10%. 4. Other Income and Gains Other income and gains for the six months ended June 30, 2025, totaled RMB 2,147 thousand, mainly from government grants, a significant decrease from RMB 10,039 thousand in the prior period due to a one-off gain from loan restructuring Other Income and Gains | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Bank interest income | 277 | 278 | | Government grants | 1,673 | 1,583 | | Waiver of loan principal and interest due to loan restructuring | – | 8,071 | | Deferred income transferred to profit or loss | 105 | 105 | | Sundry | 92 | 2 | | Total | 2,147 | 10,039 | 5. Finance Costs Finance costs increased to RMB 8,371 thousand for the six months ended June 30, 2025, from RMB 7,402 thousand in the prior period, primarily due to increased interest on other borrowings Finance Costs | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Interest on bank loans | 1,173 | 1,310 | | Interest on other borrowings | 6,539 | 5,414 | | Reversal of discounting on land restoration provision | 619 | 639 | | Interest on lease liabilities | 40 | 39 | | Total | 8,371 | 7,402 | 6. Loss Before Tax The Group's loss before tax was RMB 26,802 thousand, primarily influenced by cost of inventories sold, employee benefit expenses, depreciation, expected credit losses, and net exchange losses Loss Before Tax Components | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Cost of inventories sold | 22,236 | 19,492 | | Employee benefit expenses | 9,070 | 7,586 | | Depreciation of property, plant and equipment | 6,327 | 7,994 | | Depreciation of investment properties | 202 | 241 | | Depreciation of right-of-use assets | 4,382 | 4,799 | | Expected credit losses on trade receivables | 2,669 | 2,454 | | Expected credit losses on other receivables | 280 | 265 | | Net exchange losses | 786 | 6 | | Bank interest income | (277) | (278) | 7. Income Tax Expense Income tax expense for the six months ended June 30, 2025, was RMB 143 thousand, a decrease from RMB 341 thousand in the prior period, with a Chinese subsidiary enjoying a 15% preferential tax rate Income Tax Expense | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Current tax - China | 117 | 114 | | Deferred tax | 26 | 227 | | Total | 143 | 341 | - Jiangxi Keyue Technology, a Chinese subsidiary, enjoys a preferential enterprise income tax rate of 15%[26] - Cayman Islands and British Virgin Islands are exempt from income tax, and no provision for profits tax was made for Hong Kong due to absence of assessable profits[27] 8. Loss Per Share Attributable to Ordinary Equity Holders of the Company For the six months ended June 30, 2025, basic and diluted loss per share attributable to owners of the Company was RMB 0.023, a narrowing from RMB 0.025 in the prior period, mainly due to an increase in the weighted average number of ordinary shares outstanding Loss Per Share | Indicator | For the six months ended June 30, 2025 | For the six months ended June 30, 2024 | | :--- | :--- | :--- | | Loss attributable to owners of the Company | RMB 26,945,000 | RMB 24,526,000 | | Weighted average number of ordinary shares outstanding | 1,185,094,625 shares | 975,386,273 shares | | Basic and diluted loss per share | RMB 0.023 | RMB 0.025 | - Diluted loss per share is the same as basic loss per share as there are no potential dilutive ordinary shares outstanding[28] 9. Property, Plant and Equipment and Investment Properties For the six months ended June 30, 2025, the cost of acquiring property, plant and equipment was RMB 1.2 million, a decrease from RMB 1.7 million in the prior period, with no disposals during the period Acquisition of Property, Plant and Equipment | Item | For the six months ended June 30, 2025 (RMB thousand) | For the six months ended June 30, 2024 (RMB thousand) | | :--- | :--- | :--- | | Cost of acquiring property, plant and equipment | 1,200 | 1,700 | - No disposals of property, plant and equipment or investment properties occurred during the period[30][31] 10. Prepayments, Deposits and Other Receivables As of June 30, 2025, net current prepayments, deposits, and other receivables increased to RMB 136,857 thousand from RMB 129,626 thousand at year-end 2024, with the non-current portion primarily for land occupation compensation prepayments Prepayments, Deposits and Other Receivables | Item | As of June 30, 2025 (RMB thousand) | As of December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Total current portion | 149,900 | 142,389 | | Expected credit losses | (13,043) | (12,763) | | Net current portion | 136,857 | 129,626 | | Non-current portion (land occupation compensation) | 2,836 | 3,370 | - Amounts due from associates are unsecured, interest-free, and without fixed repayment terms[33] - Amounts due from a former subsidiary are interest-free, with fixed repayment terms, and secured by a pledge over its 49% equity interest in Shanghai Yunyi Enterprise Management Co., Ltd[33] 11. Trade Receivables As of June 30, 2025, net trade receivables decreased to RMB 16,070 thousand from RMB 19,073 thousand at year-end 2024, with increased expected credit loss provisions reflecting continued weak customer repayment ability Trade Receivables | Item | As of June 30, 2025 (RMB thousand) | As of December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Trade receivables | 83,740 | 84,074 | | Provision for expected credit losses | (67,670) | (65,001) | | Net amount | 16,070 | 19,073 | - Trade receivables are interest-free and unsecured, with concentrated credit risk[35] Ageing Analysis of Trade Receivables | Ageing | As of June 30, 2025 (RMB thousand) | As of December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within 1 month | 6,511 | 6,817 | | 1 to 3 months | 4,982 | 6,932 | | 3 to 6 months | 2,106 | 4,142 | | 6 to 12 months | 2,471 | 1,182 | | Total | 16,070 | 19,073 | 12. Trade Payables As of June 30, 2025, trade payables increased to RMB 27,481 thousand from RMB 23,278 thousand at year-end 2024, with most payables aged over three months Trade Payables | Item | As of June 30, 2025 (RMB thousand) | As of December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Trade payables | 27,481 | 23,278 | Ageing Analysis of Trade Payables | Ageing | As of June 30, 2025 (RMB thousand) | As of December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within 1 month | 6,665 | 20 | | 1 to 2 months | 1,566 | 120 | | Over 3 months | 19,250 | 23,138 | | Total | 27,481 | 23,278 | - Trade payables are interest-free and generally settled within three months of invoice receipt[38] 13. Other Payables and Accruals As of June 30, 2025, other payables and accruals decreased to RMB 71,110 thousand from RMB 76,866 thousand at year-end 2024, mainly due to reduced amounts payable to directors and staff wages and benefits Other Payables and Accruals | Item | As of June 30, 2025 (RMB thousand) | As of December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Tax payable other than income tax | 4,628 | 6,143 | | Professional fees | 11,619 | 12,628 | | Wages and benefits | 13,684 | 20,847 | | Amounts payable to directors | 588 | 2,781 | | Interest payable (bank and other borrowings) | 34,785 | 29,263 | | Payable for acquisition of mining rights | 3,707 | 3,707 | | Others | 2,099 | 1,497 | | Total | 71,110 | 76,866 | 14. Interest-Bearing Bank and Other Borrowings As of June 30, 2025, the Group's total borrowings increased to RMB 244,792 thousand from RMB 225,450 thousand at year-end 2024, comprising RMB 55,194 thousand in bank loans and RMB 189,598 thousand in other borrowings Interest-Bearing Bank and Other Borrowings | Item | As of June 30, 2025 (RMB thousand) | As of December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Bank loans (secured) | 15,000 | 15,000 | | Bank loans (unsecured) | 10,000 | 10,000 | | Bank loans (guaranteed) | 30,194 | 24,630 | | Other borrowings (unsecured) | 189,598 | 175,820 | | Total borrowings | 244,792 | 225,450 | | Classified as current liabilities | (26,694) | (24,730) | | Non-current liabilities | 218,098 | 200,720 | - Bank loans carry effective annual interest rates between 3.85% and 4.80%, while other borrowings range from 3.00% to 24.00%[40] 15. Deferred Income As of June 30, 2025, deferred income slightly decreased to RMB 3,694 thousand from RMB 3,799 thousand at year-end 2024, primarily due to RMB 105 thousand transferred to profit or loss Deferred Income Movement | Item | RMB thousand | | :--- | :--- | | As at January 1, 2024 (audited) | 4,009 | | Transferred to profit or loss | (210) | | As at December 31, 2024 and January 1, 2025 (audited) | 3,799 | | Transferred to profit or loss | (105) | | As at June 30, 2025 (unaudited) | 3,694 | 16. Share Capital As of June 30, 2025, the Company had 1,185,094,625 ordinary shares issued, with a total par value of RMB 10,690 thousand, following a capital reorganization in 2024 Share Capital | Item | As of June 30, 2025 (HKD) | As of December 31, 2024 (HKD) | | :--- | :--- | :--- | | Authorized share capital (30,000,000,000 shares of HKD 0.01 each) | 300,000 | 300,000 | | Issued and fully paid (1,185,094,625 shares of HKD 0.01 each) | 11,851 | 11,851 | | Equivalent to approximately RMB | 10,690 | 10,690 | - On July 30, 2024, a capital reorganization was approved by shareholders, changing the par value from HKD 0.2 to HKD 0.01 per share, with approximately RMB 169,237 thousand from capital reduction transferred to the share premium account[43] - On January 26, 2024, 61,720,000 new shares were issued under a subscription agreement, generating net proceeds of approximately RMB 10,158 thousand[46] - On September 27, 2024, 197,500,000 new shares were issued under a placing agreement, generating net proceeds of approximately RMB 18,544 thousand[46] 17. Share Scheme The Company adopted the 2024 Share Scheme to grant share options and/or awards to eligible participants, with no grants, exercises, or equity-settled expenses recognized for the periods ended June 30, 2025 and 2024 - The Company adopted the 2024 Share Scheme to incentivize eligible participants who contribute to the Group[44] - No share options or awards were granted or exercised, and no equity-settled expenses were recognized during the period[44][45] 18. Loss on Disposal of a Subsidiary For the six months ended June 30, 2024, the Group disposed of its entire equity interest in Vigoroso Group for a cash consideration of RMB 100,000, resulting in a loss of RMB 157 thousand - On June 30, 2024, the Group disposed of its entire equity interest in Vigoroso Group for a cash consideration of RMB 100,000[47] - The disposal of Vigoroso Group resulted in a loss of RMB 157 thousand[48] - Vigoroso Group primarily engaged in marble stone mining exploration, processing, and sales[47] 19. 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 2025[49] Management Discussion and Analysis Business Review In H1 2025, the Group faced a challenging economic environment with weak domestic demand and slow property sector recovery, adopting cautious strategies including thin-margin sales, strict credit policies, scaling back marble business, and exploring diversification - The Chinese economy shows initial signs of stabilization, but weak domestic demand and slow recovery in the property and construction sectors continue to hinder growth[50] - The Group adopted cautious strategies, prioritizing businesses with strong cash flow potential, implementing thin-margin strategies to boost sales, and strictly enforcing credit policies[51] - The Group prudently scaled back its marble product business to align with the declining demand in the property and construction sectors[51] Marble and Mining and Calcium Carbonate Business Marble stone product business generated RMB 1.1 million in revenue, impacted by property sector liquidity, while the calcium carbonate business performed better, contributing RMB 28.5 million, up from RMB 26.9 million in the prior period - Marble stone product business was affected by weak demand in the property and construction sectors, generating approximately RMB 1.1 million in revenue for the period[52] - Calcium carbonate business adopted a moderate low-margin strategy to maintain market share, contributing approximately RMB 28.5 million in revenue, a year-on-year increase of approximately 5.9%[53] Rejection of Mining Permit Renewal Application Guizhou Dejiang Sanxin Stone Co., Ltd.'s Dejiang Mine mining permit renewal application was rejected due to failure to submit a geological environmental protection and restoration plan and pay deposits, leading the Group to prioritize the Yongfeng Mine - The mining permit renewal application for Dejiang Mine of Guizhou Dejiang Sanxin Stone Co., Ltd. was rejected[54] - The rejection was due to failure to submit a comprehensive geological environmental protection and restoration plan and pay related deposits[55] - The Group decided to prioritize resources into Yongfeng Mine, believing it has stronger cash flow potential[55] Logistics and Warehousing Business The logistics and warehousing segment generated approximately RMB 1.2 million in revenue, a 33.3% increase from the prior period, with the Group still committed to its disposal plan and seeking potential buyers - The logistics and warehousing segment generated approximately RMB 1.2 million in revenue, representing a 33.3% increase from the prior period[58] - The Group remains committed to the disposal plan for this segment and will continue to seek potential buyers[58] Resources and Reserves Dejiang Mine's mining permit expired, with total resources of 2.1 million cubic meters and no activity during the period; Yongfeng Mine's permit is valid until 2030, with estimated total resources of 106.6 million cubic meters and reserves of 44.0 million cubic meters, with production of approximately 92 cubic meters during the period Dejiang Mine Resources (As of June 30, 2025) | Category | Million cubic meters | | :--- | :--- | | Controlled | 1.3 | | Inferred | 0.8 | | Total | 2.1 | - Dejiang Mine's mining permit expired on January 1, 2019, and while the Group resubmitted a renewal application, no exploration, development, or production activities occurred during the period[61][62] Yongfeng Mine Resources and Reserves (As of June 30, 2025) | Category | Million cubic meters | | :--- | :--- | | Resources | | | Measured | 51.2 | | Controlled | 46.6 | | Inferred | 8.8 | | Total Resources | 106.6 | | Reserves | | | Proved | 23.0 | | Probable | 21.0 | | Total Reserves | 44.0 | - Yongfeng Mine's mining permit is valid until June 5, 2030, allowing for an expanded annual production capacity of 1.1 million cubic meters[64][65] - During the period, Yongfeng Mine conducted exploration, development, and production activities, with a production volume of approximately 92 cubic meters[68] Financial Review The Group's revenue grew by 10.4% driven by calcium carbonate sales, but gross margin slightly deteriorated due to low-margin strategy, other income significantly decreased, administrative and sales expenses declined, while finance costs increased, leading to an expanded net loss Revenue During the review period, the Group recorded operating revenue of approximately RMB 30.7 million, a 10.4% increase from the prior period, with calcium carbonate product sales accounting for 92.7% of total revenue Operating Revenue | Item | 2025 (RMB million) | 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Operating revenue | 30.7 | 27.8 | +10.4% | - Calcium carbonate product sales accounted for 92.7% or approximately RMB 28.5 million of the Group's total revenue[69] Sales by Product Category Calcium carbonate product sales were RMB 28,477 thousand, accounting for 92.7% of total revenue, with marble stone product sales at RMB 1,061 thousand and logistics and warehousing services at RMB 1,171 thousand Sales by Product Category | Product Category | 2025 (RMB thousand) | 2025 (%) | 2024 (RMB thousand) | 2024 (%) | | :--- | :--- | :--- | :--- | :--- | | Marble stone products | 1,061 | 3.5 | – | – | | Calcium carbonate products | 28,477 | 92.7 | 26,856 | 96.6 | | Logistics and warehousing services | 1,171 | 3.8 | 949 | 3.4 | | Total | 30,709 | 100.0 | 27,805 | 100.0 | Cost of Sales Cost of sales was approximately RMB 22.9 million during the review period, with calcium carbonate product costs accounting for approximately 96.9%, consistent with its revenue contribution - Cost of sales was approximately RMB 22.9 million, with calcium carbonate product costs accounting for approximately 96.9%[71] Gross Profit and Gross Margin Gross profit was approximately RMB 7.8 million, an increase of RMB 0.3 million from the prior period, but gross margin slightly deteriorated from 27.1% to 25.4% due to the low-margin strategy for calcium carbonate business Gross Profit and Gross Margin | Indicator | 2025 (RMB million) | 2024 (RMB million) | | :--- | :--- | :--- | | Gross profit | 7.8 | 7.5 | | Gross margin | 25.4% | 27.1% | - Gross margin deterioration was primarily attributed to the moderate low-margin strategy adopted for the calcium carbonate business to maintain market share[72] Other Income and Gains Other income and gains primarily consisted of government grants of RMB 1.7 million, significantly lower than the prior period's RMB 8.1 million one-off gain from loan restructuring - Other income and gains primarily comprised government grants of approximately RMB 1.7 million[73] - The prior period included a one-off gain of approximately RMB 8.1 million from the waiver of loan principal and interest due to loan restructuring[73] Selling and Distribution Expenses Selling and distribution expenses were approximately RMB 3.2 million, representing about 10.5% of revenue, a decrease of RMB 0.6 million from RMB 3.8 million in the prior period Selling and Distribution Expenses | Indicator | 2025 (RMB million) | 2024 (RMB million) | | :--- | :--- | :--- | | Selling and distribution expenses | 3.2 | 3.8 | | Percentage of revenue | 10.5% | 13.8% | Administrative Expenses Administrative expenses were approximately RMB 21.5 million, representing about 69.8% of revenue, a decrease of RMB 5.7 million from RMB 26.9 million in the prior period, mainly due to reduced consulting and professional fees Administrative Expenses | Indicator | 2025 (RMB million) | 2024 (RMB million) | | :--- | :--- | :--- | | Administrative expenses | 21.5 | 26.9 | | Percentage of revenue | 69.8% | 96.9% | - The decrease in administrative expenses was primarily due to reduced consulting and professional fees[75] Finance Costs Finance costs increased to approximately RMB 8.4 million, an increase of RMB 1.0 million from the prior period, mainly due to a higher overall loan level Finance Costs | Indicator | 2025 (RMB million) | 2024 (RMB million) | | :--- | :--- | :--- | | Finance costs | 8.4 | 7.4 | - The increase in finance costs was primarily due to a higher overall loan level[76] Expected Credit Losses Impairment loss on trade receivables was approximately RMB 2.7 million, an increase of RMB 0.2 million from the prior period, mainly due to continued weak repayment ability of customers in the property and construction sectors Impairment Loss on Trade Receivables | Indicator | 2025 (RMB million) | 2024 (RMB million) | | :--- | :--- | :--- | | Impairment loss on trade receivables | 2.7 | 2.5 | - The increase in impairment loss was primarily due to the continued weak repayment ability of customers in the property and construction sectors and no significant recovery in the business environment[77] Human Resources and Remuneration Policy As of June 30, 2025, the Group's total full-time employees decreased to 181 from 204 in the prior period, while employee costs increased by RMB 1.5 million to RMB 9.1 million due to salary adjustments Human Resources and Employee Costs | Indicator | As of June 30, 2025 | As of June 30, 2024 | | :--- | :--- | :--- | | Total full-time employees | 181 | 204 | | Employee costs (RMB million) | 9.1 | 7.6 | - The increase in employee costs was primarily due to salary adjustments based on market conditions and qualifications[79] Income Tax Expense Income tax expense decreased by approximately RMB 0.2 million - Income tax expense decreased by approximately RMB 0.2 million[80] Loss and Total Comprehensive Loss Attributable to Owners of the Company for the Review Period Net loss attributable to owners of the Company expanded to approximately RMB 26.9 million from RMB 24.5 million in the prior period, primarily due to the net effect of decreased other income, increased finance costs, and decreased administrative expenses Net Loss Attributable to Owners | Indicator | 2025 (RMB million) | 2024 (RMB million) | | :--- | :--- | :--- | | Net loss | 26.9 | 24.5 | - The increase in net loss was primarily due to the net effect of decreased other income and gains, increased finance costs, and decreased administrative expenses[81] Net Current Assets As of June 30, 2025, the Group's net current assets slightly increased to approximately RMB 27.1 million from RMB 25.4 million at year-end 2024 Net Current Assets | Indicator | As of June 30, 2025 (RMB million) | As of December 31, 2024 (RMB million) | | :--- | :--- | :--- | | Net current assets | 27.1 | 25.4 | Current Ratio As of June 30, 2025, the current ratio was 1.2, remaining stable compared to year-end 2024 Current Ratio | Indicator | As of June 30, 2025 | As of December 31, 2024 | | :--- | :--- | :--- | | Current ratio | 1.2 | 1.2 | Borrowings As of June 30, 2025, the Group's total borrowings increased by RMB 19.3 million to approximately RMB 244.8 million from RMB 225.5 million at year-end 2024 Total Borrowings | Indicator | As of June 30, 2025 (RMB million) | As of December 31, 2024 (RMB million) | | :--- | :--- | :--- | | Total borrowings | 244.8 | 225.5 | | Net increase in borrowings | 19.3 | - | Gearing Ratio As of June 30, 2025, the gearing ratio increased to approximately 41.3% from 34.9% at year-end 2024 Gearing Ratio | Indicator | As of June 30, 2025 | As of December 31, 2024 | | :--- | :--- | :--- | | Gearing ratio | 41.3% | 34.9% | Capital Structure As of June 30, 2025, the Company had 1,185,094,625 ordinary shares issued, with no changes to the capital structure during the review period or up to the announcement date - As of June 30, 2025, the Company had 1,185,094,625 ordinary shares issued[86] - There were no changes to the Group's capital structure during the review period and up to the date of this announcement[87] Capital Expenditure During the review period, the Group's expenditure on purchasing property, plant and equipment was RMB 1.2 million Capital Expenditure | Item | 2025 (RMB million) | | :--- | :--- | | Expenditure on purchasing property, plant and equipment | 1.2 | Foreign Exchange Risk The Group's operations are primarily denominated in RMB, with only certain bank balances in HKD; the Board expects no significant impact from exchange rate fluctuations and did not use hedging instruments - The Group's operations are primarily denominated in RMB, with only certain bank balances denominated in HKD[89] - The Board expects foreign exchange fluctuations will not have a significant impact on operations, and no financial instruments were used for hedging during the period[89] Pledge of Assets As of June 30, 2025, the Group held buildings valued at approximately RMB 18.0 million as collateral for bank and other borrowings Pledged Assets | Item | As of June 30, 2025 (RMB million) | As of December 31, 2024 (RMB million) | | :--- | :--- | :--- | | Pledged buildings | 18.0 | 19.1 | Significant Events After the Review Period As of the announcement date, no significant post-review period events occurred for the Group - As of the announcement date, no significant post-review period events occurred for the Group[91] Prospects The outlook for China's economic recovery remains uncertain and challenging, influenced by global factors; the Group will monitor business impacts, adjust plans, seek shareholder-beneficial projects, and divest non-core assets to improve debt levels - China's economic recovery is expected to be moderate but remains uncertain and challenging, influenced by geopolitical tensions[92] - The Group will continue to monitor factors affecting its business, assess potential impacts, and adjust business plans accordingly[92] - The Group will identify projects or businesses beneficial to shareholders and seek to realize non-core assets to improve overall debt levels[92] Corporate Governance Code Compliance with Corporate Governance Code The Company is committed to high corporate governance standards and complied with the Listing Rules' Corporate Governance Code for the six months ended June 30, 2025, except for the unsegregated roles of Chairman and CEO - The Company is committed to maintaining high standards of corporate governance to protect shareholders' interests and enhance corporate value, accountability, and transparency[93] - The Company deviates from Code Provision C.2.1 of the Corporate Governance Code, as the roles of Chairman and Chief Executive Officer are not segregated, with Ms. Wu serving as both Co-Chairman and Acting Chief Executive Officer[93][94] - The Board believes Ms. Wu's extensive experience and the support from Mr. Cai and management facilitate efficient business planning and decision-making, aligning with the Group's best interests[94] Breach of Listing Rules No breaches of the Listing Rules occurred during the review period ended June 30, 2025 - No breaches of the Listing Rules occurred during the review period[95] Model Code for Securities Transactions The Company adopted the Model Code for Securities Transactions in Appendix C3 of the Listing Rules, and Directors confirmed compliance during the review period - The Company adopted the Model Code for Securities Transactions as set out in Appendix C3 of the Listing Rules, and Directors confirmed compliance[96] Audit Committee The Audit Committee, comprising three independent non-executive directors, reviewed the Group's accounting principles, internal controls, and financial reporting, including the results announcement and interim financial information - The Audit Committee, composed of three independent non-executive directors, reviewed accounting principles, internal controls, and financial reporting matters[97] Other Information Purchase, Sale or Redemption of the Company's Listed Securities Neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the review period - Neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the period[98] Publication of 2025 Interim Results Announcement and Interim Report This results announcement has been published on the Company's and HKEX websites, with the interim report to be published and dispatched to shareholders in due course - This results announcement has been published on the Company's website (www.artgo.cn) and the HKEX website (www.hkexnews.hk)[99](index=99&type=chunk) - The Company's 2025 interim report will be published and dispatched to shareholders in due course[99]