常茂生物(00954) - 2025 - 中期财报

Condensed Consolidated Financial Statements Condensed Consolidated Statement of Comprehensive Income For the six months ended June 30, 2025, the company's revenue decreased by 13% year-on-year to RMB 272,278 thousand, with gross profit falling to RMB 13,151 thousand, and loss for the period expanding to RMB 25,987 thousand, resulting in basic and diluted loss per share of RMB (0.049) Condensed Consolidated Statement of Comprehensive Income Key Data (For the six months ended June 30) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 272,278 | 313,802 | -13.23% | | Cost of sales | (259,127) | (297,815) | -12.99% | | Gross profit | 13,151 | 15,987 | -17.61% | | Operating loss | (19,485) | (14,572) | 33.71% | | Loss and total comprehensive loss for the period | (25,987) | (18,576) | 39.89% | | Loss per share (basic and diluted) | (0.049) | (0.035) | 40.00% | Condensed Consolidated Statement of Financial Position As of June 30, 2025, the company's total assets were RMB 1,229,695 thousand, a slight decrease from the end of 2024, with total equity at RMB 557,352 thousand and total liabilities increasing to RMB 672,343 thousand, primarily due to higher current liabilities Condensed Consolidated Statement of Financial Position Key Data (As of June 30) | Indicator | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Total assets | 1,229,695 | 1,249,758 | -1.61% | | Non-current assets | 938,140 | 950,965 | -1.35% | | Current assets | 291,555 | 298,793 | -2.42% | | Total equity | 557,352 | 583,339 | -4.59% | | Total liabilities | 672,343 | 666,419 | 0.89% | | Current liabilities | 584,477 | 604,551 | -3.29% | | Non-current liabilities | 87,866 | 61,868 | 42.02% | Condensed Consolidated Statement of Changes in Equity For the six months ended June 30, 2025, total equity attributable to owners of the company decreased from RMB 583,446 thousand at the beginning of the year to RMB 557,656 thousand, primarily due to a loss for the period of RMB 25,790 thousand Total Equity Attributable to Owners of the Company Changes (For the six months ended June 30) | Indicator | June 30, 2025 (RMB thousands) | January 1, 2025 (RMB thousands) | Change (RMB thousands) | | :--- | :--- | :--- | :--- | | Total equity attributable to owners of the Company | 557,656 | 583,446 | (25,790) | | Loss for the period | (25,790) | - | - | | Non-controlling interests | (304) | (107) | (197) | Condensed Consolidated Statement of Cash Flows For the six months ended June 30, 2025, net cash generated from operating activities was RMB 15,363 thousand, a positive shift from a net outflow in the prior period, while net cash used in investing activities significantly decreased, and financing activities shifted from net generation to net usage, resulting in a net increase in cash and cash equivalents of RMB 417 thousand Condensed Consolidated Statement of Cash Flows Key Data (For the six months ended June 30) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (RMB thousands) | | :--- | :--- | :--- | :--- | | Net cash generated from / (used in) operating activities | 15,363 | (26,585) | 41,948 | | Net cash used in investing activities | (1,130) | (42,820) | 41,690 | | Net cash (used in) / generated from financing activities | (13,816) | 40,892 | (54,708) | | Net increase / (decrease) in cash and cash equivalents | 417 | (28,513) | 28,930 | | Cash and cash equivalents at June 30 | 58,581 | 62,029 | (3,448) | Notes to the Condensed Consolidated Financial Statements 1 General Information Changmao Biochemical Engineering Company Limited primarily engages in the production and sale of organic acid products, with its H shares listed on the Main Board of the Hong Kong Stock Exchange since June 28, 2013, and the condensed consolidated interim financial statements are presented in RMB - The company's principal business is the production and sale of organic acid products[8] - H shares were transferred to the Main Board of the Hong Kong Stock Exchange on June 28, 2013[8] 2 Basis of Preparation and Accounting Policies The condensed consolidated interim financial statements are prepared in accordance with HKAS 34 and are consistent with the accounting policies of the 2024 annual financial statements, though the Group faces significant going concern uncertainties due to net loss, net current liabilities, and a subsidiary's failure to meet bank loan financial covenants, for which management has developed mitigation plans - For the six months ended June 30, 2025, the Group recorded a net loss of RMB 25,987,000[12] - The Group has net current liabilities of RMB 292,922,000, current bank borrowings of RMB 487,961,000, and cash and bank balances of RMB 58,581,000[12] - A subsidiary failed to meet the asset-liability ratio financial covenants for two project loans totaling RMB 245,020,000, resulting in the reclassification of RMB 168,860,000 of non-current portions as current liabilities[12] - Management has formulated several mitigation measures, including negotiating with banks, utilizing unutilized revolving bank facilities, consolidating production lines to reduce costs, and controlling administrative expenses and capital expenditures to support going concern[13][14] Going Concern Basis The company faces significant going concern uncertainties due to a loss for the period, high net current liabilities, and a subsidiary's failure to meet bank loan financial covenants, but management has proposed several mitigation measures, including bank negotiations, utilizing unutilized credit facilities, cost control, and new production line commissioning, to ensure sufficient working capital for the next 12 months - The Group recorded a net loss of RMB 25,987,000 and net current liabilities of RMB 292,922,000[12] - A subsidiary's failure to meet the asset-liability ratio requirement for project loans led to RMB 168,860,000 of non-current loans being reclassified as current liabilities[12] - Management plans to negotiate with banks, utilize RMB 112,362,000 in unutilized revolving bank facilities, integrate production lines to reduce costs, control administrative expenses and capital expenditures to alleviate liquidity pressure[14] 2.1 New and Revised Standards New Hong Kong Financial Reporting Standards effective from July 1, 2025, are not expected to have a significant impact on the Group's financial statements for the current and future periods - New Hong Kong Financial Reporting Standards have no significant impact on the accounting policies of the Group's condensed consolidated interim financial statements[11] 3 Estimates The preparation of interim financial information involves management's judgments, estimates, and assumptions, with key sources of estimation uncertainty being the same as those applied in the 2024 annual consolidated financial statements - Key sources of significant judgments and estimation uncertainties made by management in preparing the interim financial information are the same as those in the 2024 annual financial statements[18] 4 Financial Risk Management The Group is exposed to foreign currency, credit, liquidity, and interest rate risks, with no significant changes in risk management policies since year-end, and related information should be read in conjunction with the 2024 annual consolidated financial statements - The Group's activities are exposed to foreign currency risk, credit risk, liquidity risk, and cash flow and fair value interest rate risk[19] - There have been no significant changes in risk management policies since year-end[20] 5 Revenue and Segment Information The Group primarily engages in the production and sale of organic acid products, which management considers a single operating segment, with Mainland China contributing the highest proportion of revenue for the six months ended June 30, 2025, despite an overall year-on-year revenue decrease - The Group is principally engaged in the production and sale of organic acid products and is presented as one operating segment[21] Sales Revenue by Region (For the six months ended June 30) | Region | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Mainland China | 196,143 | 222,042 | -11.66% | | Asia Pacific | 34,287 | 41,472 | -17.32% | | Europe | 30,713 | 34,902 | -11.99% | | Americas | 7,173 | 9,650 | -25.77% | | Other regions | 3,962 | 5,736 | -30.93% | | Total | 272,278 | 313,802 | -13.23% | 6 Other Income For the six months ended June 30, 2025, total other income was RMB 3,282 thousand, a decrease from RMB 5,507 thousand in the prior period, mainly due to a significant reduction in income from the sale of scrap materials Other Income Details (For the six months ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (RMB thousands) | | :--- | :--- | :--- | :--- | | Sale of scrap materials | 4 | 1,704 | (1,700) | | Government grants | 2,472 | 2,965 | (493) | | Others | 806 | 838 | (32) | | Total | 3,282 | 5,507 | (2,225) | 7 Other Gains, Net For the six months ended June 30, 2025, net other gains were RMB 496 thousand, a significant decrease from RMB 1,844 thousand in the prior period, primarily impacted by a reduction in net exchange gains Other Gains, Net Details (For the six months ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (RMB thousands) | | :--- | :--- | :--- | :--- | | Fair value gains on financial assets at fair value through profit or loss | 10 | 32 | (22) | | Net exchange gains | 575 | 1,812 | (1,237) | | Others | (89) | – | (89) | | Total | 496 | 1,844 | (1,348) | 8 Finance Costs, Net For the six months ended June 30, 2025, net finance costs increased to RMB 5,754 thousand, mainly due to a decrease in capitalized interest on bank borrowings, leading to higher actual interest expenses Finance Costs, Net Details (For the six months ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (RMB thousands) | | :--- | :--- | :--- | :--- | | Interest on bank borrowings | 9,903 | 10,678 | (775) | | Interest paid / payable on lease liabilities | 22 | 46 | (24) | | Less: Capitalized for qualifying assets | (3,882) | (7,319) | 3,437 | | Interest income from bank deposits | (289) | (535) | 246 | | Finance costs, net | 5,754 | 2,870 | 2,884 | 9 Loss Before Income Tax For the six months ended June 30, 2025, loss before income tax expanded to RMB 25,239 thousand compared to the prior period, with depreciation expenses increasing while amortization of patent rights and right-of-use assets remained stable Loss Before Income Tax Composition (For the six months ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (RMB thousands) | | :--- | :--- | :--- | :--- | | Loss before income tax | (25,239) | (17,442) | (7,797) | | Amortisation of patent rights | 66 | 66 | 0 | | Amortisation of right-of-use assets | 1,526 | 1,526 | 0 | | Depreciation | 23,153 | 20,508 | 2,645 | 10 Income Tax Expense For the six months ended June 30, 2025, income tax expense was RMB 748 thousand, a decrease from the prior period, as the company benefits from a 15% preferential tax rate for high-tech enterprises and an additional deduction for R&D expenses - The company qualifies as a high-tech enterprise, enjoying a preferential corporate income tax rate of 15%[26] - The Group can claim a 200% tax deduction (super deduction) for eligible R&D expenses when determining assessable profits[28] Income Tax Expense Details (For the six months ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (RMB thousands) | | :--- | :--- | :--- | :--- | | Current income tax | 640 | 632 | 8 | | Deferred income tax | 108 | 502 | (394) | | Income tax expense | 748 | 1,134 | (386) | 11 Loss Per Share For the six months ended June 30, 2025, basic and diluted loss per share attributable to owners of the company expanded to RMB (0.049), compared to RMB (0.035) in the prior period, primarily due to an increased loss for the period Loss Per Share Data (For the six months ended June 30) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Loss attributable to owners of the Company (RMB thousands) | 25,790 | 18,786 | | Weighted average number of ordinary shares in issue (shares) | 529,700,000 | 529,700,000 | | Loss per share (basic and diluted) (RMB) | (0.049) | (0.035) | 12 Dividends The Board of Directors does not recommend the payment of an interim dividend for the six months ended June 30, 2025, consistent with the prior period - The Directors do not recommend the payment of an interim dividend for the six months ended June 30, 2025[31] 13 Patent Rights As of June 30, 2025, the net book value of patent rights was RMB 440 thousand, a decrease from RMB 506 thousand at the beginning of the year, primarily due to amortization expenses Patent Rights Net Book Value Changes | Item | RMB thousands | | :--- | :--- | | Net book value at January 1, 2025 | 506 | | Amortisation | (66) | | Net book value at June 30, 2025 | 440 | 14 Capital Expenditure As of June 30, 2025, the net book value of property, plant and equipment was RMB 580,197 thousand, construction in progress increased to RMB 241,614 thousand, and Dalian land use rights were pledged as collateral for bank financing Capital Expenditure Net Book Value (As of June 30) | Item | June 30, 2025 (RMB thousands) | January 1, 2025 (RMB thousands) | | :--- | :--- | :--- | | Property, plant and equipment | 580,197 | 604,275 | | Construction in progress | 241,614 | 230,344 | | Right-of-use assets | 88,833 | 90,359 | | Investment properties | 3,245 | 3,424 | - The land use rights of Changmao Dalian were pledged as collateral for bank financing for the Dalian factory[32] 15 Trade and Bills Receivables As of June 30, 2025, total trade and bills receivables amounted to RMB 68,600 thousand, an increase from the end of 2024, with trade receivables having credit terms ranging from 30 to 210 days, and the zero to three months aging category accounting for the largest proportion Trade and Bills Receivables (As of June 30) | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Trade receivables | 47,898 | 43,010 | | Bills receivables | 20,702 | 19,991 | | Total | 68,600 | 63,001 | Trade Receivables Aging Analysis (As of June 30) | Aging | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | 0 to 3 months | 43,998 | 40,841 | | 4 to 6 months | 4,691 | 3,216 | | Over 6 months | 341 | 85 | 16 Cash and Bank Balances As of June 30, 2025, total cash and bank balances were RMB 62,405 thousand, with RMB accounting for the largest proportion, and the conversion and remittance of RMB balances are subject to China's foreign exchange controls Cash and Bank Balances (As of June 30) | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Cash and cash equivalents | 58,581 | 57,963 | | Pledged bank balances | 3,824 | 1,108 | | Total | 62,405 | 59,071 | Cash and Bank Balances by Currency (As of June 30) | Currency | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | RMB | 55,230 | 52,968 | | USD | 6,906 | 5,748 | | HKD | 269 | 355 | 17 Share Capital As of June 30, 2025, the company's issued share capital comprised 529,700,000 shares with a par value of RMB 0.10 each, totaling RMB 52,970 thousand in book value, with the share capital structure remaining unchanged Share Capital Structure (As of June 30) | Item | Number of shares | Book value (RMB thousands) | | :--- | :--- | :--- | | As of June 30, 2025 and December 31, 2024 | 529,700,000 | 52,970 | - The company's share capital includes 2,500,000 domestic shares, 343,500,000 unlisted foreign shares, and 183,700,000 H shares[36] 18 Reserves As of June 30, 2025, total reserves amounted to RMB 504,686 thousand, a decrease from RMB 530,476 thousand at the beginning of the year, primarily due to a reduction in retained earnings resulting from the loss for the period Reserves Movement (As of June 30) | Item | June 30, 2025 (RMB thousands) | January 1, 2025 (RMB thousands) | | :--- | :--- | :--- | | Share premium | 102,559 | 102,559 | | Statutory reserve | 87,233 | 87,233 | | Capital reserve | 461 | 461 | | Translation reserve | 7 | 7 | | Special reserve | 2,524 | 1,164 | | Retained earnings | 311,902 | 339,052 | | Total | 504,686 | 530,476 | - The loss for the period of RMB 25,790 thousand led to a decrease in retained earnings[37] 19 Bank Borrowings As of June 30, 2025, total bank borrowings were RMB 524,361 thousand, with current bank borrowings accounting for RMB 487,961 thousand, and secured bank borrowings had a non-current portion of RMB 168,860 thousand reclassified as current liabilities due to a subsidiary's failure to meet asset-liability ratio requirements Bank Borrowings Composition (As of June 30) | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Secured bank borrowings | 245,020 | 282,634 | | Unsecured bank borrowings | 279,341 | 241,906 | | Total | 524,361 | 524,540 | - Subsidiary Changmao Dalian failed to meet the asset-liability ratio requirement, resulting in RMB 168,860 thousand of non-current secured bank borrowings being reclassified as current liabilities[39] - The effective interest rate for secured bank borrowings is 4.4%, and for unsecured bank borrowings is 3.1%[40] 20 Trade and Bills Payables As of June 30, 2025, total trade and bills payables amounted to RMB 49,724 thousand, a significant increase from the end of 2024, primarily driven by a notable growth in bills payables Trade and Bills Payables (As of June 30) | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Trade payables | 30,604 | 23,158 | | Bills payables | 19,120 | 5,542 | | Total | 49,724 | 28,700 | Trade Payables Aging Analysis (As of June 30) | Aging | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | 0 to 6 months | 29,468 | 22,565 | | 7 to 12 months | 2 | 163 | | Over 12 months | 1,134 | 430 | 21 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[42] 22 Commitments As of June 30, 2025, the Group's capital commitments for property, plant and equipment amounted to RMB 47,133 thousand, an increase from the end of 2024, primarily for the new Dalian factory and production line upgrades Capital Commitments (As of June 30) | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Contracted but not provided for | 47,133 | 34,719 | Business and Financial Review Business Review and Outlook In the first half of 2025, the Group's sales revenue decreased by 13%, and net loss attributable to shareholders expanded by 37%, primarily due to geopolitical uncertainties, tariff policies, and weak demand for maleic anhydride downstream products; the company actively adjusted its production and sales strategies, focusing on product quality, industrial upgrading, and R&D, while looking to future transformation, technological innovation, enhanced safety and environmental protection, and high-end customer development - Sales revenue decreased by approximately 13% in the first half, and net loss attributable to owners of the Company expanded by approximately 37%[45] - The decline in performance was mainly due to geopolitical conflicts, tariff policy uncertainties, weaker-than-expected demand for maleic anhydride downstream products, and increased interest expenses[45] - Changzhou factory's production and sales volume increased but gross profit margin decreased, Dalian factory's production and sales were lower than the prior period, and some production lines from Lianyungang have been relocated to Dalian and commenced operation[47] - The Group will fully support the development of the Dalian factory as its main chemical product production base, extending into new materials, APIs, and novel feed additives[49] Interim Results For the six months ended June 30, 2025, the Group's sales revenue decreased by 13% year-on-year to RMB 272,278 thousand, and net loss attributable to owners of the company expanded by 37% to RMB 25,790 thousand, with performance decline mainly attributed to external market factors and increased interest expenses Interim Results Overview (For the six months ended June 30) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Sales revenue | 272,278 | 313,802 | -13.23% | | Net loss attributable to owners of the Company | 25,790 | 18,786 | 37.28% | - The decline in performance was mainly due to geopolitical conflicts, tariff policy uncertainties, weaker-than-expected demand for maleic anhydride downstream products, and increased interest expenses[45] Business Review In the first half of 2025, the Group maintained balanced production and sales, with Changzhou factory showing increased production and sales but lower gross profit margin, while Dalian factory's performance was below the prior period, and some Lianyungang production lines have been relocated to Dalian and commenced operation, as the company focuses on product quality, industrial upgrading, and continuous safety and environmental efforts - Changzhou factory's main product production and sales volume increased year-on-year, but the gross profit margin slightly decreased due to unit price impacts[47] - Some production lines from Lianyungang factory have been relocated to Dalian and commenced operation, positively impacting business operations[47] - The Group received certifications for Jiangsu Advanced Intelligent Factory and "Jiangsu Quality Product," and continues to enhance safety and environmental protection[47] Research and Development In the first half of 2025, the Group's R&D projects progressed steadily, covering new product development and existing product process improvements, with the Pharmaceutical Division having laid out 12 API and pharmaceutical excipient varieties, 7 of which have received "A" status approval results, and one new pharmaceutical excipient is undergoing quality stability assessment - Multiple self-developed and outsourced R&D projects were carried out as planned in the first half, covering new product development and existing product process improvements[48] - 12 API and pharmaceutical excipient varieties have been laid out, with 7 varieties receiving "A" status approval results in the "joint review and approval with formulations"[48] - A new pharmaceutical excipient is undergoing quality stability assessment and is expected to be submitted to the National Medical Products Administration's Center for Drug Evaluation within the year[48] Prospects and Outlook The Group will adhere to technological innovation, focusing on economic efficiency and customer needs, continuously reducing costs and increasing efficiency, including supporting the Dalian factory as a main production base, accelerating technological innovation, enhancing safety and environmental protection, strengthening risk control, and expanding high-end and international markets - Will fully support the development of the Dalian factory as the Group's main chemical product production base, extending into new materials, APIs, and novel feed additives[49] - Continuously increase R&D investment, integrate resources and R&D teams, accelerate R&D speed, and cultivate new products that are safe, environmentally friendly, and market-competitive[50] - Continue to strengthen safety risk control, promote cleaner production, and strive to improve levels in energy and resource consumption, carbon neutrality, and pollutant emissions[51] - The sales team is dedicated to developing key accounts and end-users, enhancing brand awareness and added value through product quality and service, and focusing on international market expansion[52] Review of Financial Statements The Audit Committee, together with the Directors, has reviewed the Group's unaudited condensed consolidated interim financial statements for the six months ended June 30, 2025 - The Audit Committee, together with the Directors, has reviewed the Group's unaudited condensed consolidated interim financial statements for the six months ended June 30, 2025[53] Dividends The Directors do not recommend the payment of an interim dividend for the six months ended June 30, 2025 - The Directors do not recommend the payment of an interim dividend for the six months ended June 30, 2025[54] Segment Information For the six months ended June 30, 2025, the Group's export revenue accounted for approximately 28% of total revenue, and domestic sales accounted for approximately 72%, showing little change compared to the prior period Revenue Geographical Distribution (For the six months ended June 30) | Sales Region | 2025 | 2024 | | :--- | :--- | :--- | | Export | Approx. 28% | Approx. 29% | | Domestic sales | Approx. 72% | Approx. 71% | Exchange Rate Fluctuation Risk and Hedging The Group primarily operates in China and is exposed to USD-related foreign currency risk, which management regularly monitors and partially hedges using forward foreign exchange agreements when necessary - The Group primarily operates in China and is exposed to USD-related foreign currency risk[56] - Management regularly monitors foreign currency risk and used forward foreign exchange agreements to hedge part of the USD risk during the period[56] Liquidity and Financial Resources As of June 30, 2025, the Group's total outstanding bank borrowings were RMB 524,361 thousand, with a debt-to-asset ratio of 54.7%, and capital commitments of RMB 47,133 thousand, mainly for the new Dalian factory and production line upgrades, intended to be met through operating cash flow and/or bank financing Liquidity and Financial Resources Overview (As of June 30) | Indicator | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Total outstanding bank borrowings | 524,361 | 524,540 | | Debt-to-asset ratio | 54.7% | 53.3% | | Cash and cash equivalents at bank | 58,581 | 57,963 | | Capital commitments | 47,133 | 34,719 | - Capital commitments are mainly for the new Dalian factory and production line upgrades, intended to be met through operating cash flows and/or bank financing[57] Employees As of June 30, 2025, the Group had 533 employees, with total staff costs of RMB 40,605 thousand, a decrease from the prior period primarily due to reduced headcount and structural changes, and while an employee incentive scheme is in place, no profit-based bonuses were distributed this period Employees and Staff Costs (For the six months ended June 30) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Total number of employees | 533 | 647 | | Total staff costs (RMB thousands) | 40,605 | 42,389 | - The decrease in staff costs was mainly due to a reduction in the number of employees and changes in employee structure[59] - The company has an employee incentive scheme, but no profit-based bonuses were distributed during the period[59] Material Investments As of June 30, 2025, and December 31, 2024, the Group held no material investments, with major capital expenditures concentrated on the Dalian factory - The Group held no material investments[60] - Major capital commitments are concentrated on capital expenditure for the Dalian factory[60] Changes in Group Structure During the Period For the six months ended June 30, 2025, the Group did not acquire or dispose of any significant subsidiaries or associated companies - The Group did not acquire or dispose of any significant subsidiaries or associated companies[62] 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[63] Going Concern The Group faces significant going concern uncertainties due to a loss for the period, net current liabilities, and failure to meet bank loan financial covenants; although the Board has reviewed cash flow forecasts and formulated mitigation measures, significant uncertainty remains regarding the realization of these plans - The Group recorded a net loss of RMB 25,987,000 and net current liabilities of RMB 292,922,000[64] - The reclassification of RMB 168,860,000 of the non-current portion of project loans as current liabilities indicates significant uncertainty[64] - The Board has reviewed management's cash flow forecasts and believes the Group will have sufficient working capital, but significant uncertainty remains regarding the realization of these plans[65] Disclosure of Interests Directors', Supervisors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares and Debentures of the Company or any of its Specified Corporations or any other Associated Corporations As of June 30, 2025, Mr. Rui Xinsheng and his spouse Ms. Leng Yixin held beneficial interests in the company's domestic shares, unlisted foreign shares, and H shares, making them major shareholders, while other directors and supervisors also held unlisted foreign share interests through associated companies Directors' Interests in Shares (As of June 30, 2025) | Director | Type of interest | Number of domestic shares | Number of unlisted foreign shares | Number of H shares | | :--- | :--- | :--- | :--- | :--- | | Mr. Rui Xinsheng | Beneficial owner, spouse's interest and interest of controlled corporations | 2,500,000 | 135,000,000 | 12,236,000 | | Ms. Leng Yixin | Beneficial owner, spouse's interest and interest of controlled corporations | 2,500,000 | 135,000,000 | 12,236,000 | | Mr. Yu Xiaoping | Spouse's interest and interest of controlled corporations | – | 66,000,000 | 3,774,000 | - Mr. Rui Xinsheng and Ms. Leng Yixin hold significant unlisted foreign shares and domestic shares through Hong Kong Xinsheng and Changzhou Xinsheng[68] Persons Who Have Interests or Short Positions Discloseable Under Divisions 2 and 3 of Part XV of the Securities and Futures Ordinance and Substantial Shareholders As of June 30, 2025, Hong Kong Xinsheng Venture Investment Co., Ltd., Hong Kong Biochemical High-Tech Investment Co., Ltd., Zaowu Limited, and Hong Kong Kehai Venture Investment Co., Ltd. are major shareholders of the company, holding substantial unlisted foreign shares, and Ms. Lin Mao (spouse of Mr. Yu Xiaoping) also holds H shares and unlisted foreign shares through Zaowu Limited Substantial Shareholders' Interests in Shares (As of June 30, 2025) | Shareholder Name | Type of interest | Number of unlisted foreign shares | Approx. % of unlisted foreign shares | Number of H shares | Approx. % of H shares | | :--- | :--- | :--- | :--- | :--- | :--- | | Hong Kong Xinsheng Venture Investment Co., Ltd. | Beneficial owner | 135,000,000 | 39.30% | – | – | | Hong Kong Biochemical High-Tech Investment Co., Ltd. | Beneficial owner | 67,500,000 | 19.65% | – | – | | Zaowu Limited | Beneficial owner | 66,000,000 | 19.21% | – | – | | Ms. Lin Mao | Spouse's interest, interest of controlled corporations and beneficial owner | 66,000,000 | 19.21% | 3,774,000 | 2.05% | | Hong Kong Kehai Venture Investment Co., Ltd. | Beneficial owner | 62,500,000 | 18.20% | – | – | - Shanghai Science and Technology Venture Capital Co., Ltd. and its associated companies hold significant unlisted foreign shares through Hong Kong Kehai Venture Investment Co., Ltd[72] Directors', Supervisors' and Chief Executive's Rights to Acquire Shares or Debentures During the current year, neither the company, its subsidiaries, nor any other associated corporations entered into any arrangements enabling directors, supervisors, and chief executive or their families to hold interests in the shares or debentures of the company or associated corporations - During the current year, neither the company nor its subsidiaries entered into any arrangements enabling directors, supervisors, and chief executive or their families to hold interests in the shares or debentures of the company or associated corporations[74] Other Information Purchase, Sale or Redemption of the Company's Listed Securities For the six months ended June 30, 2025, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities - Neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities[75] Share Capital Structure As of June 30, 2025, the company's total issued shares were 529,700,000, comprising H shares, domestic shares, and unlisted foreign shares; while Chinese law does not explicitly define the rights of unlisted foreign shares, their holders are generally expected to enjoy the same rights as domestic shares and can be converted to H shares under specific conditions Share Capital Structure (As of June 30, 2025) | Share Class | Number of shares | | :--- | :--- | | H shares | 183,700,000 | | Domestic shares | 2,500,000 | | Unlisted foreign shares | 343,500,000 | | Total | 529,700,000 | - Holders of unlisted foreign shares are generally considered to have the same rights and obligations as holders of domestic shares and may be converted into overseas listed foreign shares (H shares) upon approval[78] Compliance with Code Provisions of the Corporate Governance Code The company has complied with the code provisions of the Corporate Governance Code as set out in Part 2 of Appendix C1 to the Listing Rules for the six months ended June 30, 2025 - The company has complied with the code provisions of the Corporate Governance Code as set out in Part 2 of Appendix C1 to the Listing Rules[79] Code of Conduct for Securities Transactions by Directors The company has adopted the Model Code as its code of conduct for directors' securities transactions and was not aware of any non-compliance with the Model Code during the six months ended June 30, 2025 - The company has adopted the Model Code as its code of conduct for directors' securities transactions[80] - During the six months ended June 30, 2025, no non-compliance with the Model Code was noted[80] Glossary Glossary This section provides definitions for key terms used in the report, including financial statements, company entities, security types, and regulatory bodies - The glossary defines key terms used in the report, such as "Condensed Consolidated Financial Statements," "the Group," "H shares," and "Listing Rules"[82][83]