越南制造加工出口(00422) - 2025 - 中期财报

Company Information This section provides essential company details including board members, committee compositions, company secretary, auditors, legal advisors, registered and principal offices, share registrar, principal bankers, stock code, and contact information - The company's board of directors comprises Executive Directors (Mr. Liu Wu-Hsiung, Ms. Wu Jui-Chiao, Mr. Lin Chun-Yu), Non-executive Directors (Ms. Wu Li-Chu, Mr. Chen Hsu-Pin, Mr. Liu Ju-Cheng), and Independent Non-executive Directors (Ms. Lin Ching-Ching, Mr. Chang An-Chieh, Ms. Wu Hui-Lan)[4] - The chairpersons of the Audit Committee, Remuneration Committee, and Nomination Committee are either Independent Non-executive Director Ms. Lin Ching-Ching or Executive Director Mr. Liu Wu-Hsiung[4] - The company's auditor is KPMG, and its legal advisor is Norton Rose Fulbright Hong Kong[4] - The company's stock code is 422, and its website is www.vmeph.com[5](index=5&type=chunk) Management Discussion and Analysis This section details the Group's operating environment, business performance, financial position, and future outlook for the first half of 2025, highlighting significant revenue and net profit growth despite global challenges Operating Environment In H1 2025, global trade and political landscapes shifted, with US tariffs increasing costs and supply chains restructuring, while Vietnam's economy grew robustly, boosting the motorcycle market - Global trade and political landscapes continue to adjust, with increased US tariffs raising corporate operating costs and accelerating supply chain restructuring[7] - Vietnam's economy performed robustly, with its Gross Domestic Product (GDP) growing by 7.52% in H1 2025, standing out among ASEAN countries[7] Vietnam Motorcycle Market Sales Data | Metric | 2025 H1 | 2024 H1 | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Total motorcycle sales by five major foreign direct investment manufacturers in Vietnam | 1,284,291 units | - | Increased by 6.4% | Business Review The Group's H1 2025 Vietnam sales increased by 4.7% and export sales by 65.8%, driven by new products, brand promotion, strong Malaysian market performance, and initial success in Europe 2025 H1 Sales Volume Data | Metric | 2025 H1 | 2024 H1 | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Total Sales Volume in Vietnam | approx. 22.4 thousand units | - | Increased by 4.7% | | Scooters | approx. 6.6 thousand units | - | - | | Underbones | approx. 15.8 thousand units | - | - | | Total Export Sales Volume | approx. 18.4 thousand units | - | Increased by 65.8% | - Domestic sales growth in Vietnam is primarily attributed to continuous technological refinement, relentless R&D, design, and innovation of quality products, along with the launch of several new and stylish motorcycle models, national campus motorcycle safety driving education campaigns, and enhanced online brand promotion[8] - Significant growth in export sales benefited from sales momentum in the Malaysian market, where sales volume increased by approximately 34.3% compared to the same period last year[9] - The Group began gradually expanding into the European market in 2024 and commenced full shipments in H1 2025, recording significant sales growth, indicating initial success in its market expansion strategy[9] Financial Review The Group's H1 2025 revenue grew 42.1% to USD 46.6 million, achieving a net profit of USD 0.04 million, reversing last year's net loss, despite increased finance expenses and impairment losses Revenue The Group's H1 2025 revenue reached USD 46.6 million, a 42.1% year-on-year increase, primarily driven by the launch of new motorcycle models boosting both domestic and export sales Revenue Change | Metric | 2025 H1 (million USD) | 2024 H1 (million USD) | Change (million USD) | Growth Rate | | :--- | :--- | :--- | :--- | :--- | | Revenue | 46.6 | 32.8 | 13.8 | 42.1% | - Revenue growth is primarily attributed to the launch of new motorcycle models, driving both export and domestic sales performance in Vietnam[11] Cost of Sales H1 2025 cost of sales increased 37.3% to USD 41.2 million due to higher sales volume, but as a percentage of revenue, it decreased from 91.4% to 88.4%, reflecting improved economies of scale Cost of Sales Change | Metric | 2025 H1 (million USD) | 2024 H1 (million USD) | Change (million USD) | Growth Rate | | :--- | :--- | :--- | :--- | :--- | | Cost of Sales | 41.2 | 30.0 | 11.2 | 37.3% | | Cost of Sales as % of Revenue | 88.4% | 91.4% | -3.0% | - | - The increase in cost of sales is mainly due to the overall increase in sales volume[12] - By centralizing bulk procurement of raw materials, the Group enhanced its bargaining power, reducing production costs and offsetting some of the raw material cost increases[12] Gross Profit and Gross Margin H1 2025 gross profit increased to USD 5.4 million, with gross margin rising to 11.6%, primarily due to higher sales volume and a lower cost ratio Gross Profit and Gross Margin Change | Metric | 2025 H1 (million USD) | 2024 H1 (million USD) | Change (million USD) | | :--- | :--- | :--- | :--- | | Gross Profit | 5.4 | 2.8 | 2.6 | | Gross Margin | 11.6% | 8.6% | 3.0% | - The increase in gross profit and gross margin is primarily due to higher sales volume[13] Distribution Expenses H1 2025 distribution expenses slightly increased by 2.6% to USD 1.94 million, mainly due to higher transportation and packaging costs associated with increased export sales volume Distribution Expenses Change | Metric | 2025 H1 (million USD) | 2024 H1 (million USD) | Change (million USD) | Growth Rate | | :--- | :--- | :--- | :--- | :--- | | Distribution Expenses | 1.94 | 1.89 | 0.05 | 2.6% | - The increase in distribution expenses is mainly due to higher export sales volume, leading to increased transportation and packaging costs[14] Administrative and Other Operating Expenses H1 2025 administrative and other operating expenses decreased by 1.3% to USD 3.07 million, representing 6.6% of total revenue, reflecting enhanced operational efficiency and effective cost control Administrative and Other Operating Expenses Change | Metric | 2025 H1 (million USD) | 2024 H1 (million USD) | Change (million USD) | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Administrative and Other Operating Expenses | 3.07 | 3.11 | -0.04 | -1.3% | | % of Total Revenue | 6.6% | - | - | - | - The decrease in expenses reflects the Group's continuous efforts to enhance operational efficiency and effectively control related expenditures[15] Results from Operations The Group recorded a profit from operations of USD 0.9 million in H1 2025, successfully reversing an operating loss of USD 2.1 million in the prior year Results from Operations Change | Metric | 2025 H1 (million USD) | 2024 H1 (million USD) | Change (million USD) | | :--- | :--- | :--- | :--- | | Profit/(Loss) from Operations | 0.9 | (2.1) | 3.0 | Net Finance Expenses/Income H1 2025 saw net finance expenses of USD 0.70 million, compared to net finance income of USD 0.03 million in the prior period, mainly due to reduced bank interest income and increased foreign exchange losses Net Finance Expenses/Income Change | Metric | 2025 H1 (million USD) | 2024 H1 (million USD) | Change (million USD) | | :--- | :--- | :--- | :--- | | Net Finance Expenses/(Income) | 0.70 (Expense) | 0.03 (Income) | 0.73 (Increase in Expense) | - Key changes include a USD 0.12 million decrease in bank interest income, a USD 0.63 million increase in exchange losses due to fluctuations in the New Taiwan Dollar against the US Dollar, and a USD 0.02 million decrease in bank interest and lease liability interest expenses[17] Impairment Loss on Other Property, Plant and Equipment The Group recognized an impairment loss of approximately USD 0.1 million on other property, plant and equipment in H1 2025, a decrease from the prior year, reflecting asset revaluation amidst industry competition Impairment Loss on Other Property, Plant and Equipment | Metric | 2025 H1 (million USD) | 2024 H1 (million USD) | Change (million USD) | | :--- | :--- | :--- | :--- | | Impairment Loss | 0.1 | 0.282675 | -0.182675 | - The impairment primarily reflects the Group's prudent financial management and re-evaluation of relevant asset values to address intense competition and rising manufacturing costs in the motorcycle industry[18] Profit/(Loss) for the Period and Net Profit/(Loss) Margin The Group reported a net profit of USD 0.04 million in H1 2025, reversing a net loss of USD 2.42 million in the prior period, with net margin improving from -7.4% to 0.1% Profit/(Loss) for the Period and Net Margin Change | Metric | 2025 H1 (million USD) | 2024 H1 (million USD) | Change (million USD) | | :--- | :--- | :--- | :--- | | Net Profit/(Loss) | 0.04 | (2.42) | 2.46 | | Net Margin | 0.1% | -7.4% | 7.5% | Liquidity and Financial Resources As of June 30, 2025, net current assets were USD 38.8 million, slightly down from year-end 2024, with cash and bank balances increasing to USD 58.6 million, but the gearing ratio rose to 97.5% due to increased interest-bearing borrowings Liquidity and Financial Resources | Metric | June 30, 2025 (million USD) | Dec 31, 2024 (million USD) | Change (million USD) | | :--- | :--- | :--- | :--- | | Net Current Assets | 38.8 | 39.3 | -0.5 | | Current Assets | 105.1 | 95.6 | 9.5 | | Current Liabilities | 66.3 | 56.3 | 10.0 | | Interest-bearing Borrowings Due Within One Year | 43.3 | 33.8 | 9.5 | | Gearing Ratio | 97.5% | 75.2% | 22.3% | | Total Cash and Bank Balances | 58.6 | 54.4 | 4.2 | - The Group regularly and actively reviews and manages its capital structure to strengthen its financial position, with no changes in capital management approach during the period[21] Pledge of Assets As of June 30, 2025, the Group pledged USD 19,582,961 in bank time deposits as collateral for bank financing Pledge of Assets | Metric | June 30, 2025 (USD) | | :--- | :--- | | Pledged Bank Time Deposits | 19,582,961 | Exchange Rate Fluctuation Risk The Group's primary transaction currencies are VND and USD, and it monitors exchange rate trends, but as of June 30, 2025, no financial instruments were used to hedge foreign exchange risk - The Group's primary transaction currencies are Vietnamese Dong (VND) and US Dollar (USD)[23] - The Group adopts a prudent cash and financial management policy, with cash generally placed in short-term deposits primarily denominated in VND and USD[23] - As of June 30, 2025, the Group had not used any financial instruments to hedge its foreign exchange risk[23] Human Resources and Remuneration Policy As of June 30, 2025, the Group employed 1,021 staff with total remuneration costs of approximately USD 5.1 million, offering a competitive compensation package including basic salary, bonuses, and benefits Human Resources and Remuneration Data | Metric | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Total Employees | 1,021 employees | 1,003 employees | | Total Salaries and Related Costs (million USD) | 5.1 | 4.9 | - The remuneration package includes basic salary, bonuses, staff accommodation, training and development opportunities, medical benefits, insurance coverage, and retirement benefits[24] Capital Commitments and Contingent Liabilities As of June 30, 2025, the Group had no significant capital commitments or contingent liabilities - As of June 30, 2025, the Group had no significant capital commitments or contingent liabilities[25] Significant Acquisitions or Disposals of Subsidiaries or Associates For the six months ended June 30, 2025, the Group had no significant acquisitions or disposals of subsidiaries or associates - For the six months ended June 30, 2025, the Group had no significant acquisitions or disposals of subsidiaries or associates[26] Material Investments Held For the six months ended June 30, 2025, the Group held no material investments - For the six months ended June 30, 2025, the Group held no material investments[27] Future Plans for Material Investments or Capital Assets As of June 30, 2025, the Group had no specific plans for material investments or acquisitions of capital assets - As of June 30, 2025, the Group had no specific plans for material investments or acquisitions of capital assets[28] Purchase, Sale or Redemption of the Company's Listed Securities For the six months ended June 30, 2025, neither the Company nor its subsidiaries purchased, sold, or redeemed any of its listed securities, and the Company held no treasury shares - For the six months ended June 30, 2025, neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[29] - As of June 30, 2025, the Company held no treasury shares[30] Changes After December 31, 2024 Except as otherwise disclosed, there have been no material changes in the Group's financial position or the information disclosed in the "Management Discussion and Analysis" section of the 2024 annual report since December 31, 2024 - Except as otherwise disclosed in this report, there have been no material changes in the Group's financial position compared to December 31, 2024[31] Outlook For H2 2025, the Group will cautiously navigate global economic adjustments, adapting product and sales strategies, enhancing brand promotion, expanding service networks, and focusing on product innovation for shareholder returns - Looking ahead to H2 2025, the global economy remains in a phase of inflation adjustment and monetary and trade policy rebalancing, with the overall operating environment still presenting challenges[32] - The Group will continue to prudently respond to international market fluctuations, flexibly adjusting its product strategies and regional sales layouts[32] - For domestic sales, the Group will precisely target customer segments based on different product positioning and strengthen brand engagement through diverse marketing channels[32] - For export sales, the Group will continue to enhance global overseas market promotion, improve brand loyalty, constantly introduce new products, strengthen product capabilities, and actively explore new overseas markets[32] - The Group will continue to adhere to its business philosophy of focusing on core business, prioritizing quality, and ensuring customer satisfaction, with product innovation as a key strategy to continuously enhance product design and core technology development capabilities[32] Other Matters This section covers the application of IPO proceeds, disclosure of directors' and major shareholders' interests, compliance with corporate governance practices, and significant post-reporting period events Application of Proceeds from Initial Public Offering The Company's December 2007 IPO raised approximately USD 76.7 million net, with most funds utilized, and the remaining USD 17.0 million for land development and production site expansion is expected to be used by 2030 - The net proceeds from the Company's initial public offering in December 2007 were approximately USD 76.7 million[33] Use of Proceeds from Initial Public Offering | Purpose | Net Proceeds from IPO as per Prospectus and Announcements (million USD) | Unutilized Balance as of Jan 1, 2025 (million USD) | Amount Utilized in 2025 H1 (million USD) | Unutilized Balance as of June 30, 2025 (million USD) | | :--- | :--- | :--- | :--- | :--- | | Construction and Establishment of R&D Center in Vietnam | 11.7 | – | – | – | | Expansion of Distribution Channels in Vietnam | 19.0 | – | – | – | | Acquisition of Assets or Businesses | 9.0 | – | – | – | | General Working Capital | 2.7 | – | – | – | | Development of Production Site and Relocation of Existing Production Facilities | 15.0 | 2.0 | 0.1 | 1.9 | | Land Development | 19.3 | 15.1 | – | 15.1 | | Total | 76.7 | 17.1 | 0.1 | 17.0 | - The unutilized net proceeds are expected to be fully utilized by 2030 or earlier[35] Changes in Information of Directors and Chief Executive As of the report date, there have been no changes in the information of the Company's directors or chief executive requiring disclosure under the Listing Rules since the publication of the 2024 annual report - As of the date of this report, there have been no changes in the information of the Company's directors or chief executive requiring disclosure under Rules 13.51(2) and 13.51(B)(1) of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited since the publication of the Company's 2024 annual report[36] Directors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares and Debentures of the Company or its Associated Corporations As of June 30, 2025, certain directors held interests in common shares of Sanyang Industry Co., Ltd. (an associated corporation), with Ms. Wu Li-Chu holding 2.138%, and no other disclosable interests or short positions were held by directors or the chief executive Directors' Interests and Short Positions in Shares of Sanyang Industry Co., Ltd. | Director Name | Share Class | Capacity | Number of Shares Held (shares) | Approximate % of Total Share Capital | | :--- | :--- | :--- | :--- | :--- | | Mr. Liu Wu-Hsiung | Ordinary Shares | Beneficial Owner | 111,380 (L) | 0.014% | | Ms. Wu Li-Chu | Ordinary Shares | Beneficial Owner | 17,046,560 (L) | 2.138% | | Mr. Liu Ju-Cheng | Ordinary Shares | Beneficial Owner | 4,000 (L) | 0.001% | | Mr. Liu Ju-Cheng | Ordinary Shares | Spouse's Interest | 295,000 (L) | 0.037% | - Save as disclosed above, none of the Company's directors or chief executive had any disclosable interests or short positions in the shares, underlying shares, or debentures of the Company or any of its associated corporations[37] Major Shareholders' Interests in Shares of the Company As of June 30, 2025, Sanyang Industry Co., Ltd. and its wholly-owned subsidiary SY International Ltd. were the Company's major shareholders, collectively holding 67.07% of the ordinary share capital Major Shareholders' Interests in Shares of the Company | Major Shareholder Name | Share Class | Capacity | Number of Shares/Underlying Shares Held (shares) | Approximate % of Total Share Capital | | :--- | :--- | :--- | :--- | :--- | | Sanyang Industry Co., Ltd. | Ordinary Shares | Interest in Controlled Corporation | 608,818,000 (L) | 67.07% | | SY International Ltd. | Ordinary Shares | Beneficial Owner | 608,818,000 (L) | 67.07% | - SY International Ltd. is a direct wholly-owned subsidiary of Sanyang Industry Co., Ltd[38] Directors' Rights to Acquire Shares or Debentures For the six months ended June 30, 2025, no directors, their spouses, or minor children were granted rights to acquire the Company's shares or debentures, nor were there any arrangements for directors to benefit from acquiring shares in other corporations - For the six months ended June 30, 2025, none of the Company's directors or their respective spouses or children under 18 years of age were granted any rights to acquire shares or debentures of the Company[40] - Neither the Company, its holding company, its subsidiaries, nor any of its fellow subsidiaries participated in any arrangements that would enable the Company's directors to acquire rights to purchase shares in any other corporation for their benefit[40] Corporate Governance Practices For the six months ended June 30, 2025, the Company consistently complied with all applicable code provisions of the Corporate Governance Code in Appendix C1 of the Listing Rules and will continue to review and monitor its practices - For the six months ended June 30, 2025, the Company consistently complied with all applicable code provisions of the Corporate Governance Code set out in Appendix C1 of the Listing Rules[41] Compliance with the Model Code for Securities Transactions by Directors The Company has adopted the Model Code for securities transactions by its directors and confirmed that all directors complied with its required standards for the six months ended June 30, 2025 - The Company has adopted the Model Code as the code of conduct for its directors' dealings in the Company's securities[42] - The Company has made specific enquiries with all its directors, who have confirmed their compliance with the required standards set out in the Model Code for the six months ended June 30, 2025[42] Sufficiency of Public Float For the six months ended June 30, 2025, and up to the latest practicable date before this report's publication, the Company maintained a sufficient public float as required by the Listing Rules - The Company has maintained a sufficient public float as required by the Listing Rules[43] Material Events After the Reporting Period No material events that could affect the Group occurred after June 30, 2025, and up to the date of this report - No material events that could affect the Group occurred after June 30, 2025, and up to the date of this report[44] Review of Interim Results The unaudited interim results and interim report for the six months ended June 30, 2025, were reviewed by the Company's Audit Committee and by KPMG in accordance with Hong Kong Standard on Review Engagements 2410 - The unaudited interim results and interim report for the six months ended June 30, 2025, have been reviewed by the Company's Audit Committee[45] - The interim results are unaudited but have been reviewed by the Company's auditor, KPMG, in accordance with Hong Kong Standard on Review Engagements 2410 issued by the Hong Kong Institute of Certified Public Accountants[45] Interim Dividend The Board of Directors does not recommend the payment of an interim dividend for the six months ended June 30, 2025 - The Board of Directors does not recommend the payment of an interim dividend for the six months ended June 30, 2025 (six months ended June 30, 2024: nil)[46] Acknowledgement The Group extends its sincere gratitude to its shareholders, suppliers, customers, and all employees for their strong support and diligent contributions - The Group extends its most sincere gratitude to the Company's shareholders, and the Group's suppliers and customers for their strong support[47] - The Group also thanks every employee for their hard work and contributions to the Group[47] Independent Auditor's Review Report KPMG reviewed the Company's interim financial report in accordance with HKSRE 2410, finding no material non-compliance with IAS 34, but did not express an audit opinion as the scope was narrower than an audit - KPMG has completed its review of the interim financial report of Vietnam Manufacturing and Export Processing (Holdings) Limited, contained on pages 16 to 34[49] - The review was conducted in accordance with Hong Kong Standard on Review Engagements 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity," issued by the Hong Kong Institute of Certified Public Accountants[50] - The auditor has not found any matter that causes them to believe that the interim financial report for the six months ended June 30, 2025, is not prepared, in all material respects, in accordance with International Accounting Standard 34 "Interim Financial Reporting"[51] - The scope of a review is substantially less than that of an audit conducted in accordance with Hong Kong Standards on Auditing, and consequently, does not enable the auditor to obtain assurance that they would become aware of all significant matters that might be identified in an audit, thus no audit opinion is expressed[50] Consolidated Financial Statements This section presents the Group's unaudited consolidated financial statements for the six months ended June 30, 2025, including statements of profit or loss, financial position, changes in equity, and cash flows, along with detailed notes Consolidated Statement of Profit or Loss and Other Comprehensive Income For the six months ended June 30, 2025, the Group's revenue grew 42.1% to USD 46.6 million, achieving a net profit of USD 0.04 million, reversing a loss, despite negative impacts from net finance expenses and exchange differences Key Data from Consolidated Statement of Profit or Loss and Other Comprehensive Income | Metric | 2025 H1 (USD) | 2024 H1 (USD) | | :--- | :--- | :--- | | Revenue | 46,602,134 | 32,849,975 | | Cost of Sales | (41,202,455) | (30,017,149) | | Gross Profit | 5,399,679 | 2,832,826 | | Results from Operations | 902,973 | (2,110,381) | | Net Finance (Expenses)/Income | (704,475) | 31,296 | | Profit/(Loss) Before Income Tax | 102,432 | (2,418,066) | | Income Tax Expense | (59,835) | (287) | | Profit/(Loss) for the Period | 42,597 | (2,418,353) | | Exchange Differences on Translation of Financial Statements of Foreign Subsidiaries and Associates | (682,459) | (2,320,448) | | Total Comprehensive Income for the Period | (639,862) | (4,738,801) | | Basic and Diluted Earnings/(Loss) Per Share | 0.00005 | (0.00266) | Consolidated Statement of Financial Position As of June 30, 2025, the Group's net current assets were USD 38.8 million, and total assets less current liabilities were USD 46.3 million, with increased cash balances but also higher bank loans and trade payables, leading to a higher gearing ratio Key Data from Consolidated Statement of Financial Position | Metric | June 30, 2025 (USD) | Dec 31, 2024 (USD) | | :--- | :--- | :--- | | Non-current Assets | 7,490,679 | 7,786,979 | | Current Assets | 105,118,775 | 95,570,913 | | Current Liabilities | 66,272,795 | 56,299,699 | | Net Current Assets | 38,845,980 | 39,271,214 | | Total Assets Less Current Liabilities | 46,336,659 | 47,058,193 | | Non-current Liabilities | 1,994,000 | 2,075,672 | | Net Assets | 44,342,659 | 44,982,521 | | Share Capital and Reserves | 44,338,268 | 44,978,209 | | Non-controlling Interests | 4,391 | 4,312 | | Total Equity | 44,342,659 | 44,982,521 | Consolidated Statement of Changes in Equity For the six months ended June 30, 2025, total equity attributable to owners of the Company decreased from USD 44.98 million to USD 44.34 million, primarily due to the combined effect of profit for the period and other comprehensive income (decrease in exchange reserve) Key Data from Consolidated Statement of Changes in Equity | Metric | June 30, 2025 (USD) | Jan 1, 2024 (USD) | | :--- | :--- | :--- | | Total Equity Attributable to Owners of the Company | 44,338,268 | 51,133,209 | | Non-controlling Interests | 4,391 | 4,312 | | Total Equity | 44,342,659 | 51,137,521 | | Profit for the Period | 42,518 | (3,844,473) (Loss for the year) | | Other Comprehensive Income (Exchange Differences) | (682,459) | (2,310,527) | Condensed Consolidated Statement of Cash Flows For the six months ended June 30, 2025, net cash outflow from operating activities was USD 6.49 million, with net cash outflow from investing activities of USD 0.35 million, and net cash inflow from financing activities of USD 9.86 million, resulting in a net increase in cash and cash equivalents of USD 3.02 million Key Data from Condensed Consolidated Statement of Cash Flows | Metric | 2025 H1 (USD) | 2024 H1 (USD) | | :--- | :--- | :--- | | Net Cash (Used in)/Generated from Operating Activities | (6,494,097) | 6,683,036 | | Net Cash (Used in)/Generated from Investing Activities | (348,034) | 8,385,622 | | Net Cash Generated from/(Used in) Financing Activities | 9,857,701 | (9,122,330) | | Net Increase in Cash and Cash Equivalents | 3,015,570 | 5,946,328 | | Cash and Cash Equivalents as of June 30 | 17,044,992 | 21,972,259 | Notes to the Unaudited Interim Financial Report This section provides detailed notes to the condensed consolidated financial statements, covering corporate information, basis of preparation, accounting policy changes, revenue, segment data, profit/loss before tax, income tax, EPS, dividends, PPE, inventories, receivables, cash, payables, bank loans, fair value measurements, and related party transactions Corporate Information Vietnam Manufacturing and Export Processing (Holdings) Limited was incorporated in the Cayman Islands on June 20, 2005, primarily manufacturing and selling motorcycles and related parts, and listed on the HKEX Main Board on December 20, 2007 - The Company was incorporated as an exempted company in the Cayman Islands on June 20, 2005[60] - The Group's principal activities are the manufacturing and sale of motorcycles and related spare parts and engines[61] - The Company has been listed on the Main Board of The Stock Exchange of Hong Kong Limited since December 20, 2007[62] Basis of Preparation This interim financial report is prepared in accordance with HKEX Listing Rules and IAS 34 "Interim Financial Reporting," using consistent accounting policies with the 2024 financial statements, and has been reviewed by KPMG - This interim financial report has been prepared in accordance with the applicable disclosure provisions of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, including compliance with International Accounting Standard 34 "Interim Financial Reporting" issued by the International Accounting Standards Board[63] - This financial report was authorized for issue by the Board of Directors on August 11, 2025[63] - The interim financial report is unaudited but has been reviewed by KPMG, the Company's auditor, in accordance with Hong Kong Standard on Review Engagements 2410 issued by the Hong Kong Institute of Certified Public Accountants[64] Changes in Accounting Policies The Group applied amendments to IAS 21 "The Effects of Changes in Foreign Exchange Rates—Lack of Exchangeability," which had no material impact as the Group had no foreign currency transactions where currency was not exchangeable, and no new standards effective this period were adopted - The Group has applied the amendments to International Accounting Standard 21 "The Effects of Changes in Foreign Exchange Rates—Lack of Exchangeability" issued by the International Accounting Standards Board to the interim financial report for the current accounting period[65] - As the Group did not enter into any foreign currency transactions where a foreign currency was not exchangeable into another currency, these amendments had no material impact on this interim report[65] - The Group has not early adopted any new standards or interpretations that are not yet effective for the current accounting period[66] Revenue and Segment Information The Group has two reportable segments: manufacturing and selling motorcycles (USD 41.8 million revenue in H1 2025) and manufacturing and selling spare parts and engines (USD 4.8 million revenue), with Vietnam as the main market and significant growth in overseas markets - The Group has identified two reportable segments: manufacturing and sales of motorcycles, and manufacturing and sales of spare parts and engines[67] Revenue by Major Product or Service | Product or Service | 2025 H1 (USD) | 2024 H1 (USD) | | :--- | :--- | :--- | | Manufacturing and Sales of Motorcycles | 41,798,757 | 28,704,173 | | Manufacturing and Sales of Spare Parts and Engines | 4,803,377 | 4,145,802 | | Total | 46,602,134 | 32,849,975 | Revenue by Customer Geographical Location | Region | 2025 H1 (USD) | 2024 H1 (USD) | | :--- | :--- | :--- | | Vietnam | 18,348,302 | 17,467,360 | | Malaysia | 11,534,868 | 7,120,613 | | Greece | 3,522,944 | 1,778,689 | | Philippines | 2,903,796 | 2,639,203 | | Thailand | 2,362,185 | 1,484,395 | | Spain | 1,997,629 | – | | Belgium | 1,490,656 | – | | China | 971,370 | 122,872 | | United Arab Emirates | – | 1,783,994 | | Other Regions | 3,470,384 | 452,849 | Segment Revenue and Profit | Segment | 2025 H1 Revenue from External Customers (USD) | 2025 H1 Reportable Segment Profit (USD) | | :--- | :--- | :--- | | Manufacturing and Sales of Motorcycles | 41,798,757 | 1,372,593 | | Manufacturing and Sales of Spare Parts and Engines | 4,803,377 | 62,011 | | Total | 46,602,134 | 1,434,604 | Profit/(Loss) Before Income Tax The Group's H1 2025 profit before income tax was USD 102,432, influenced by net finance expenses, staff costs, inventory write-back, and R&D expenses, with impairment loss on property, plant and equipment decreasing from the prior year Components of Profit/(Loss) Before Income Tax | Item | 2025 H1 (USD) | 2024 H1 (USD) | | :--- | :--- | :--- | | Bank Interest Income | (1,121,808) | (1,242,306) | | Net Finance Expenses | 704,475 | (31,296) | | Wages, Salaries and Other Benefits | 4,543,328 | 4,327,554 | | Defined Contribution Retirement Plan Contributions | 552,773 | 557,285 | | Depreciation of Investment Properties and Other Property, Plant and Equipment | 120,503 | 124,237 | | Inventories (Write-back)/Write-down | (994,606) | 652,246 | | Reversal of Impairment Loss on Trade Receivables | (191,641) | (345,771) | | Research and Development Expenses | 823,681 | 728,748 | | Impairment Loss on Other Property, Plant and Equipment | 125,278 | 282,675 | - The inventory write-back of USD 994,606 was due to the sale of aged inventory[89] - The impairment loss primarily reflects the Group's prudent financial management and re-evaluation of relevant asset values to address intense competition and rising manufacturing costs in the motorcycle industry[78] Income Tax Expense The Group's H1 2025 income tax expense was USD 59,835, with no income tax payable in the Cayman Islands, and varying corporate income tax rates applied to subsidiaries in Vietnam and Taiwan based on local tax laws Income Tax Expense | Metric | 2025 H1 (USD) | 2024 H1 (USD) | | :--- | :--- | :--- | | Current Tax - Current Provision | 59,835 | 287 | - The Group is not subject to any income tax in the Cayman Islands[82] - Corporate income tax rates for Vietnamese subsidiaries vary by business type: 18% for motorcycle assembly and production, 10% for engine assembly and production, and 20% for other businesses[83] - Taiwanese subsidiaries are subject to a 20% tax rate if net profit for the year exceeds NTD 120,000, otherwise they are exempt from income tax[83] Earnings/(Loss) Per Share The Group's H1 2025 basic earnings per share was USD 0.00005, reversing a basic loss per share of USD 0.00266 in the prior period, with diluted earnings per share being the same due to no potential dilutive ordinary shares Earnings/(Loss) Per Share | Metric | 2025 H1 (USD) | 2024 H1 (USD) | | :--- | :--- | :--- | | Basic Earnings/(Loss) Per Share | 0.00005 | (0.00266) | | Weighted Average Number of Ordinary Shares in Issue (shares) | 907,680,000 | 907,680,000 | - For the six months ended June 30, 2025, and 2024, diluted earnings/(loss) per share were the same as basic earnings/(loss) per share, as there were no potential dilutive ordinary shares[85] Dividends For the six months ended June 30, 2025, the Company neither paid nor declared any dividends - For the six months ended June 30, 2025, the Company neither paid nor declared any dividends (six months ended June 30, 2024: nil)[86] Other Property, Plant and Equipment For the six months ended June 30, 2025, the Group recognized costs of USD 125,278 for other property, plant and equipment items, with an equivalent impairment loss recognized in the statement of profit or loss Cost and Impairment Loss of Other Property, Plant and Equipment | Metric | 2025 H1 (USD) | 2024 H1 (USD) | | :--- | :--- | :--- | | Cost of Items Recognized | 125,278 | 282,675 | | Impairment Loss Recognized | 125,278 | 282,675 | Inventories For the six months ended June 30, 2025, the Group recognized an inventory write-back of USD 994,606 due to sales of aged inventory, compared to a write-down of USD 652,246 in the prior period for slow-moving inventory Inventory Write-back/Write-down | Metric | 2025 H1 (USD) | 2024 H1 (USD) | | :--- | :--- | :--- | | Inventories (Write-back)/Write-down | (994,606) (Write-back) | 652,246 (Write-down) | - The write-back in H1 2025 was due to the sale of aged inventory[89] - The write-down in H1 2024 was due to certain inventories being slow-moving, leading to a decrease in their estimated net realizable value[89] Trade and Other Receivables and Prepayments As of June 30, 2025, total trade and other receivables and prepayments amounted to USD 21.25 million, with trade receivables primarily within three months and the largest debtor accounting for 63% of total trade receivables Trade and Other Receivables and Prepayments | Metric | June 30, 2025 (USD) | Dec 31, 2024 (USD) | | :--- | :--- | :--- | | Trade Receivables | 9,396,308 | 9,234,648 | | Non-trade Receivables | 9,948,033 | 7,336,432 | | Prepayments | 494,964 | 487,591 | | Amounts Due from Related Parties | 1,409,234 | 1,827,863 | | Total | 21,248,539 | 18,886,534 | Aging Analysis of Trade Receivables | Aging | June 30, 2025 (USD) | Dec 31, 2024 (USD) | | :--- | :--- | :--- | | Within 3 months | 10,193,165 | 8,860,451 | | Over 3 months but within 1 year | 612,377 | 2,116,279 | | Over 1 year but within 2 years | – | 85,354 | - The largest debtor accounted for 63% of the Group's total trade receivables (December 31, 2024: 45%)[90] - Non-trade receivables primarily consist of recoverable Value Added Tax of USD 5,544,687 and refundable import duties of USD 2,143,936[91] Cash and Bank Balances As of June 30, 2025, the Group's total cash and bank balances were USD 58.59 million, comprising USD 17.04 million in cash and cash equivalents and USD 41.55 million in time deposits maturing over three months Cash and Bank Balances | Metric | June 30, 2025 (USD) | Dec 31, 2024 (USD) | | :--- | :--- | :--- | | Bank Deposits and Cash on Hand | 10,274,703 | 6,051,603 | | Time Deposits Maturing Within 3 Months | 6,770,289 | 8,226,601 | | Cash and Cash Equivalents in Condensed Consolidated Statement of Cash Flows | 17,044,992 | 14,278,204 | | Time Deposits Maturing Over 3 Months | 41,545,181 | 40,113,263 | | Total | 58,590,173 | 54,391,467 | Trade and Other Payables As of June 30, 2025, total trade and other payables amounted to USD 22.91 million, with trade payables (including amounts due to related parties) of USD 17.29 million, primarily due within three months Trade and Other Payables | Metric | June 30, 2025 (USD) | Dec 31, 2024 (USD) | | :--- | :--- | :--- | | Trade Payables | 3,726,062 | 4,340,713 | | Other Payables and Accrued Operating Expenses | 2,891,912 | 3,277,014 | | Contract Liabilities - Payments Received in Advance | 1,088,497 | 1,191,403 | | Provisions | 1,643,301 | 1,705,450 | | Amounts Due to Related Parties | 13,564,859 | 11,705,866 | | Total | 22,914,631 | 22,220,446 | Aging Analysis of Trade Payables | Aging | June 30, 2025 (USD) | Dec 31, 2024 (USD) | | :--- | :--- | :--- | | Within 3 months | 17,273,568 | 15,292,974 | | Over 3 months but within 1 year | 12,661 | 736,989 | | Over 1 year but within 5 years | 3,031 | 7,153 | Bank Loans As of June 30, 2025, the Group's total pledged time deposits for bank loans amounted to USD 19,582,961 Pledged Time Deposits for Bank Loans | Metric | June 30, 2025 (USD) | Dec 31, 2024 (USD) | | :--- | :--- | :--- | | Total Pledged Time Deposits | 19,582,961 | 19,413,093 | Financial Instruments Measured at Fair Value As of June 30, 2025, and December 31, 2024, there were no material differences between the carrying amounts and fair values of the Group's financial instruments accounted for at cost or amortized cost - As of June 30, 2025, and December 31, 2024, there were no material differences between the carrying amounts and fair values of the Group's financial instruments accounted for at cost or amortized cost[94] Related Party Transactions The Group engages in various related party transactions with its ultimate holding company and its subsidiaries/associates, including sales and purchases of finished goods, raw materials, and equipment, as well as technical transfer fees and advertising subsidies - Related parties include the ultimate holding company, Sanyang Industry Co., Ltd., and its subsidiaries (Sanyang Global (Xiamen) Industrial Co., Ltd., Xiamen Xia Xing Motorcycle Co., Ltd., Sanyang Motor Colombia S.A.S) and associate (Sanyang Vietnam Machinery Industry Co., Ltd.)[95] Recurring Related Party Transactions | Transaction Type | Transacting Party | 2025 H1 (USD) | 2024 H1 (USD) | | :--- | :--- | :--- | :--- | | Sales of Finished Goods and Spare Parts | Ultimate Holding Company | 9,303,151 | 332,203 | | | Fellow Subsidiaries | 972,802 | 122,872 | | Purchases of Raw Materials and Finished Goods | Ultimate Holding Company | 3,075,842 | 1,217,114 | | | Fellow Subsidiaries | 18,690,800 | 8,609,869 | | | Associates | 1,633,415 | 1,170,819 | | Technical Transfer Fees | Ultimate Holding Company | 56,674 | 71,710 | | Advertising Subsidies | Ultimate Holding Company | 300,000 | – | Amounts Due from Related Parties | Type | June 30, 2025 (USD) | Dec 31, 2024 (USD) | | :--- | :--- | :--- | | Trade | 1,409,234 | 1,827,436 | | Non-trade | – | 427 | | Total | 1,409,234 | 1,827,863 | Amounts Due to Related Parties | Type | June 30, 2025 (USD) | Dec 31, 2024 (USD) | | :--- | :--- | :--- | | Trade | 13,563,198 | 11,696,403 | | Non-trade | 1,661 | 9,463 | | Total | 13,564,859 | 11,705,866 |