稀镁科技(00601) - 2025 - 中期财报

CORPORATE INFORMATION Directors and Committees Rare Earth Magnesium Technology Group Holdings Limited disclosed the composition of its board of directors, audit committee, remuneration committee, and nomination committee for the six months ended June 30, 2025 - Executive Directors include Chairman and Chief Executive Officer Shen Shijie and Chi Sile[4] - Independent Non-executive Directors are Zhang Shengben (Chairman of the Audit Committee), Sheng Hong, and Shen Yimin[4] Company Contact and Registration Information The company provided its principal bankers, Bermuda registered office, Hong Kong principal place of business, share registrars in Bermuda and Hong Kong, company website, and stock code (00601) - The company's stock code is 00601, and its website is **http://www.remt.com.hk**[7](index=7&type=chunk)[8] - The principal place of business is located at 16th Floor, Tower 5, Gateway, Harbour City, Tsim Sha Tsui, Kowloon, Hong Kong[7] RESULTS Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income For the six months ended June 30, 2025, the company's revenue decreased by 11.74% year-on-year, gross loss narrowed, and both loss before tax and loss for the period decreased, with basic and diluted loss per share improving to 11 cents from 13 cents Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income Key Data | Indicator | June 30, 2025 (HK$ thousand) | June 30, 2024 (HK$ thousand) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 93,957 | 106,454 | -11.74% | | Cost of sales | (107,040) | (130,856) | -18.20% | | Gross loss | (13,083) | (24,402) | -46.40% | | Other gains, net | 5,763 | 5,236 | +10.07% | | Selling and distribution expenses | (548) | (1,259) | -56.47% | | Administrative expenses | (31,124) | (30,295) | +2.73% | | Finance costs | (27,529) | (30,752) | -10.47% | | Loss before tax | (66,521) | (79,804) | -16.64% | | Income tax credit | 1,235 | 211 | +485.31% | | Loss for the period and attributable to owners of the Company | (65,286) | (79,593) | -17.98% | | Loss per share (cents) | (11) | (13) | -15.38% | Condensed Consolidated Statement of Financial Position As of June 30, 2025, the company's total assets less current liabilities slightly increased, while net assets decreased, with property, plant and equipment in non-current assets increasing and bank and cash balances in current assets significantly decreasing Condensed Consolidated Statement of Financial Position Key Data | Indicator | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Non-current assets | | | | | Property, plant and equipment | 708,041 | 687,793 | +2.94% | | Mining rights | 26,112 | 25,755 | +1.40% | | Current assets | | | | | Inventories | 83,639 | 90,514 | -7.59% | | Trade and bills receivables | 323 | 275 | +17.45% | | Bank and cash balances | 9,916 | 24,716 | -59.96% | | Current liabilities | | | | | Trade payables | 18,137 | 19,418 | -6.60% | | Borrowings (current) | 110,811 | 108,833 | +1.82% | | Non-current liabilities | | | | | Borrowings (non-current) | 253,787 | 243,379 | +4.28% | | Convertible bonds | 378,490 | 363,526 | +4.12% | | Equity | | | | | Net assets | 136,500 | 155,490 | -12.21% | 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 HK$155,490 thousand to HK$136,500 thousand, primarily due to a loss for the period, partially offset by an increase in foreign currency translation reserve Condensed Consolidated Statement of Changes in Equity Key Data | Indicator | January 1, 2025 (HK$ thousand) | June 30, 2025 (HK$ thousand) | Change (HK$ thousand) | | :--- | :--- | :--- | :--- | | Total equity attributable to owners of the Company | 155,490 | 136,500 | -18,990 | | Loss for the period | - | (65,286) | (65,286) | | Other comprehensive loss (foreign currency translation differences) | - | 46,296 | 46,296 | Condensed Consolidated Statement of Cash Flows For the six months ended June 30, 2025, net cash outflows from operating, investing, and financing activities led to a net decrease in cash and cash equivalents of HK$20,879 thousand Condensed Consolidated Statement of Cash Flows Key Data | Indicator | June 30, 2025 (HK$ thousand) | June 30, 2024 (HK$ thousand) | Change (HK$ thousand) | | :--- | :--- | :--- | :--- | | Net cash from operating activities | (5,017) | 13,544 | -18,561 | | Net cash used in investing activities | (13,237) | (8,023) | -5,214 | | Net cash used in financing activities | (2,625) | (1,347) | -1,278 | | Net decrease/(increase) in cash and cash equivalents | (20,879) | 4,174 | -25,053 | | Cash and cash equivalents at end of period | 9,916 | 41,164 | -31,248 | NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Basis of Preparation and Principal Accounting Policies The condensed consolidated financial statements are prepared in accordance with HKAS 34 and Listing Rules Appendix 16, using the historical cost basis and consistent accounting policies, with no significant impact from HKFRS amendments in the current period - The financial statements are prepared in accordance with Hong Kong Accounting Standard 34 and Appendix 16 of the Listing Rules, using the historical cost basis[22][23][24] - Amendments to HKAS 21 were applied in the current period, but had no significant impact due to the absence of foreign currency non-exchangeable transactions[25][26] Segment Information The Group primarily engages in a single business segment, which is the manufacturing and sale of magnesium metal-related products, thus having no separate reportable segments - The Group primarily engages in the manufacturing and sale of magnesium metal-related products, with no separate reportable segments[28][29] Finance Costs For the six months ended June 30, 2025, total finance costs amounted to HK$27,529 thousand, a 10.47% decrease year-on-year, primarily comprising interest on bank and other borrowings and effective interest on borrowings and convertible bonds under the scheme of arrangement Composition of Finance Costs | Item | June 30, 2025 (HK$ thousand) | June 30, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Interest on bank and other borrowings | 2,157 | 3,589 | | Effective interest on borrowings under scheme of arrangement | 10,408 | 9,617 | | Effective interest on convertible bonds under scheme of arrangement | 14,964 | 17,546 | | Total | 27,529 | 30,752 | Loss Before Income Tax For the six months ended June 30, 2025, loss before income tax was HK$66,521 thousand, narrowing from HK$79,804 thousand in the prior year, primarily impacted by depreciation, amortization, and finance costs Key Adjustments to Loss Before Income Tax | Item | June 30, 2025 (HK$ thousand) | June 30, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Depreciation of property, plant and equipment | 29,444 | 41,385 | | Amortisation of intangible assets | 769 | 4,417 | | Amortisation of mining rights | 787 | 2,370 | | Depreciation of right-of-use assets | 275 | 619 | | Bank interest income | (107) | (454) | Income Tax Credit For the six months ended June 30, 2025, the company recorded a deferred tax credit of HK$1,235 thousand, a significant increase from HK$211 thousand in the prior year Income Tax Credit | Item | June 30, 2025 (HK$ thousand) | June 30, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Deferred tax | (1,235) | (211) | Dividend The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025, consistent with the prior year - The Board does not recommend the payment of an interim dividend for 2025 (2024: nil)[36][39] Loss Per Share Attributable to Owners of the Company For the six months ended June 30, 2025, basic and diluted loss per share was 11 cents, an improvement from 13 cents in 2024, based on a loss for the period of HK$65,286 thousand and 592,595,103 weighted average ordinary shares Loss Per Share | Indicator | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Basic and diluted loss per share (cents) | (11) | (13) | | Loss for the period (HK$ thousand) | (65,286) | (79,593) | | Weighted average number of ordinary shares | 592,595,103 | 592,595,103 | Property, Plant and Equipment For the six months ended June 30, 2025, the Group's property, plant and equipment increased by HK$13,344 thousand, a decrease from HK$15,676 thousand in the prior year, with no disposals during the period Changes in Property, Plant and Equipment | Item | June 30, 2025 (HK$ thousand) | June 30, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Additions | 13,344 | 15,676 | | Net proceeds from disposals | 0 | 7,199 | Trade Receivables As of June 30, 2025, net trade receivables were HK$74 thousand, a significant decrease from HK$275 thousand as of December 31, 2024, with the Group granting credit terms of no more than 180 days to customers Trade and Bills Receivables | Item | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Trade receivables (net of allowance) | 74 | 275 | | Bills receivables | 249 | 0 | | Total | 323 | 275 | - The Group grants credit terms of no more than 180 days to trade customers[45] Trade Payables As of June 30, 2025, total trade payables amounted to HK$18,137 thousand, a decrease from HK$19,418 thousand as of December 31, 2024 Ageing Analysis of Trade Payables | Ageing | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | 0-60 days | 4,097 | 8,722 | | 61-90 days | 164 | 979 | | 91-180 days | 13,876 | 9,717 | | Total | 18,137 | 19,418 | Borrowings As of June 30, 2025, total borrowings were HK$364,598 thousand, of which HK$110,811 thousand were classified as current liabilities due to repayment defaults or covenant breaches, with the weighted average effective interest rate increasing to 8.15% Composition and Classification of Borrowings | Item | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Bank borrowings | 69,229 | 67,251 | | Other borrowings | 295,369 | 284,961 | | Total borrowings | 364,598 | 352,212 | | Due within one year or on demand | 110,811 | 108,833 | | Due after two years but within five years | 253,787 | 243,379 | - Approximately HK$110,811 thousand of borrowings were classified as current liabilities due to repayment defaults or breaches of loan covenants, and the Group is negotiating with lenders for refinancing[59] - As of June 30, 2025, the weighted average effective interest rate for bank and other borrowings was approximately 8.15% (December 31, 2024: 7.39%)[59] Amount Due to an Immediate Holding Company As of June 30, 2025, the amount due to an immediate holding company was HK$6,052 thousand, a decrease from HK$8,677 thousand as of December 31, 2024, which is unsecured, interest-free, and repayable on demand Amount Due to an Immediate Holding Company | Item | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Amount due to an immediate holding company | 6,052 | 8,677 | - The amount is unsecured, interest-free, and repayable on demand[56] Convertible Bonds The company issued zero-coupon convertible bonds with a total principal amount of HK$458,390 thousand on August 5, 2022, at a conversion price of HK$1.2, maturing five years from the issue date, with the fair value of the liability component being HK$378,490 thousand as of June 30, 2025 - Zero-coupon convertible bonds with a total principal amount of HK$458,390 thousand were issued on August 5, 2022, at a conversion price of HK$1.2, maturing five years from the issue date[60][62][63] Fair Value of Convertible Bonds Liability Component | Date | Fair Value (HK$ thousand) | | :--- | :--- | | June 30, 2025 | 378,490 | | December 31, 2024 | 363,526 | Commitments As of June 30, 2025, contracted but not provided for commitments for property, plant and equipment were HK$1,891 thousand, a significant decrease from HK$39,509 thousand as of December 31, 2024 Contracted but Not Provided For Commitments | Item | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Property, plant and equipment | 1,891 | 39,509 | Material Related Party Transactions The Group engaged in related party transactions, including management fees and amounts due to a holding company, and a subsidiary's loan guarantee for a related party did not comply with Listing Rules, for which remedial actions have been taken Material Related Party Transactions | Transaction Type | June 30, 2025 (HK$ thousand) | June 30, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Management fees paid to an intermediate holding company | 1,475 | 1,475 | | Directors' emoluments, salaries and other remuneration | 655 | 645 | - As of June 30, 2025, the amount due to an immediate holding company was approximately HK$6,052 thousand, which is unsecured, interest-free, and repayable on demand[72][73] - A subsidiary provided a loan guarantee for related party Shandong Hongri Chemical Co., Ltd., which did not comply with the disclosure, announcement, and independent shareholder approval requirements under Chapter 14A of the Listing Rules, and the company has taken remedial actions[72][73] Litigations and Contingent Liabilities Subsidiary Baishan Tianan was sued by a bank for loan breaches, leading to asset seizure and failed auctions, and its debt restructuring faces difficulties due to liquidity shortages and litigation enforcement - Subsidiary Baishan Tianan was sued by a bank for breaching loan terms, involving approximately RMB64 million in principal and interest[79][81] - Baishan Tianan's mortgaged assets failed to attract bids in two auctions, and its debt restructuring faces difficulties due to liquidity shortages and litigation enforcement[79]81[82] - The Group is actively communicating with creditors to seek a settlement to gain time and space for restructuring[80][82] MANAGEMENT DISCUSSION AND ANALYSIS Industry Review In H1 2025, the global "East Strong, West Weak" economic pattern and trade frictions impacted magnesium demand, while domestic policies shifted the industry towards internal consumption, with magnesium prices fluctuating and the magnesium-aluminum ratio hitting a historic low, highlighting its cost advantage - In H1 2025, the global economy showed an "East Strong, West Weak" pattern, with developed economies slowing down and emerging markets remaining resilient, affecting the structure of magnesium demand[84][86] - US tariffs on magnesium products led to a 6.18% year-on-year decrease in China's magnesium product export volume and a 24.38% decrease in export value[84][87] - China's "Energy Saving and Carbon Reduction Action Plan" increased magnesium usage in new energy vehicles, and the policy shift from "dual energy consumption control" to "dual carbon control" enhanced production concentration, driving the magnesium industry towards domestic demand[85][87] Global Economy and Policy Environment In H1 2025, the global economy exhibited an "East Strong, West Weak" pattern, with developed economies slowing and emerging markets decelerating, while escalating trade frictions, including US tariffs on magnesium products, led to a significant decline in China's magnesium product exports by volume and value, and domestic "Energy Saving and Carbon Reduction Action Plan" and "dual carbon control" policies promoted automotive lightweighting, stimulating domestic demand and shifting China's magnesium industry from export-dependent to domestic demand-driven - In H1 2025, global economic growth showed an "East Strong, West Weak" pattern, with developed economies' growth declining from 1.7% in 2024 to 1.2%, and emerging markets slowing from 4.2% to 3.8%[84][86] - US tariffs on magnesium products led to a 6.18% year-on-year decrease in China's total magnesium product exports to 221,500 tonnes, and a 24.38% decrease in export value to US$527 million[84][87] - China's "Energy Saving and Carbon Reduction Action Plan" promotes lightweighting in new energy vehicles, with single-vehicle magnesium usage exceeding 15kg, and policy shifts are transforming the magnesium industry from "export-dependent" to "domestic demand-driven"[85][87] Key Industry Operating Characteristics in H1 2025 In H1 2025, China's primary magnesium output slightly decreased by 2.19%, with high production concentration, while the industry maintained balance through active inventory reduction, reaching near "zero inventory" levels, and magnesium enterprises faced continuous cost pressure from high electricity prices, leading to production halts for some, and downstream demand showed a "two-sided" trend with traditional sectors declining but six emerging sectors like new energy vehicles, aerospace, and robotics experiencing strong growth, fully offsetting export reductions, and magnesium prices underwent "rollercoaster" fluctuations, with the magnesium-aluminum price ratio hitting a historic low, highlighting magnesium's cost-effectiveness advantage China's Primary Magnesium Output in H1 2025 | Indicator | January-June 2025 | Year-on-Year Change | | :--- | :--- | :--- | | Primary magnesium output (ten thousand tonnes) | 47.68 | -2.19% | | Shaanxi region's output share | 61.7% | - | - The industry maintained balance through active inventory reduction, with social inventory reaching near "zero inventory" levels and manufacturing enterprises' circulating inventory at only about 7,000 tonnes[88][89] - Electricity costs for magnesium smelting account for approximately 40% of total costs, with high electricity prices leading to persistently high production costs; in March, magnesium ingot prices fell to RMB15,000 per tonne, causing nearly half of enterprises to halt production for maintenance[88][89] - Traditional magnesium demand declined (e.g., reduced steel production in Europe and America, sluggish 3C electronics market), but demand from six major emerging sectors, including new energy vehicles, two-wheeled electric vehicles, rail transit, robotics, low-altitude flight, and aerospace, grew strongly, fully offsetting the decrease in exports[90][91] - The magnesium-aluminum price ratio remained in a historically low range below 1.0, hitting a new low of 0.81 in 2025, highlighting magnesium products' substitution advantage[93][94] Business Review For the six months ended June 30, 2025, the Group's revenue decreased by 11.9%, but gross loss margin improved, and post-tax loss narrowed, while a subsidiary's plant upgrade was delayed, and it is seeking a surplus gas utilization project for continuous operations Key Financial Data for Business Review | Indicator | June 30, 2025 (HK$ thousand) | June 30, 2024 (HK$ thousand) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 93,957 | 106,454 | -11.74% | | Magnesium product business gross loss margin | 13.9% | 22.9% | improved 9 percentage points | | Post-tax loss for the period | (65,286) | (79,593) | -17.98% | | Total sales volume (tonnes) | 6,155 | 6,236 | -1.3% | - The upgrade and renovation of subsidiary Xinjiang Tengxiang's semi-coke plant production facilities could not be completed on schedule due to the large investment scale, and has been extended to the end of 2026[99][101] - Xinjiang Tengxiang has reached a cooperation intention with downstream customers, where customers will lead the investment in upgrades and renovations, and is applying for a surplus gas utilization project to ensure the continuous and stable operation of the magnesium plant[99][102] Prospects The global magnesium market is transforming, with China achieving a new balance through domestic demand, driven by irreversible lightweighting trends in new energy vehicles and the emerging robotics industry, affirming magnesium's broad prospects as a green engineering material aligned with dual carbon policies - The global magnesium market is transforming amidst economic slowdowns and trade reconfigurations, with China achieving a new balance of "low inventory, stable production, and optimized structure" through domestic demand growth[104][105] - Lightweighting is an irreversible trend, with new energy vehicles as the core driver; by 2030, single-vehicle magnesium usage is expected to reach 45kg, and global automotive magnesium demand will exceed 1.37 million tonnes per year[104][105] - The robotics industry will become a new growth pole, with humanoid robots potentially using 8-10kg of magnesium alloy per unit, representing a potential demand increase of 100,000 tonnes[104][105] - Magnesium metal, as the "green engineering material with the most development and application potential in the 21st century," has broad application prospects, aligning with China's "dual carbon" policy and global energy-saving and environmental protection trends[104][106] OTHER INFORMATION Financial Review The Group's H1 2025 revenue decreased by 11.9%, but gross loss margin improved, and post-tax loss narrowed, with various operational expenses and other gains also experiencing changes Key Financial Review Data | Indicator | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 93,957 | 106,454 | -11.74% | | Gross loss | (13,083) | (24,402) | -46.40% | | Gross loss margin | (13.9%) | (22.9%) | improved 9 percentage points | | Loss attributable to owners of the Company | (65,286) | (79,593) | -17.98% | Main Operating Data Analysis The Group's H1 revenue decreased by 11.9% due to global economic slowdown and persistent magnesium price declines, with sales volume slightly down, as the industry faces cost pressures despite magnesium's diversified applications and cost advantages Main Operating Data | Indicator | June 30, 2025 | June 30, 2024 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Revenue (HK$ thousand) | 93,957 | 106,454 | -11.9% | | Magnesium product sales volume (metric tons) | 6,165 | 6,236 | -1.3% | | Gross loss (HK$ thousand) | 13,080 | 24,400 | -46.4% | - Revenue decline was primarily due to global economic slowdown, China's industrial structural adjustments, and persistent magnesium price declines caused by overcapacity[109][111] Selling and Distribution Expenses Selling and distribution expenses decreased by approximately HK$711 thousand year-on-year, accounting for 0.6% of total revenue (2024: 1.2%) Selling and Distribution Expenses | Indicator | June 30, 2025 (HK$ thousand) | June 30, 2024 (HK$ thousand) | Year-on-Year Change (HK$ thousand) | | :--- | :--- | :--- | :--- | | Selling and distribution expenses | 548 | 1,259 | -711 | | Percentage of total revenue | 0.6% | 1.2% | -0.6% | Administrative Expenses Administrative expenses slightly increased to HK$31,124 thousand (2024: HK$30,295 thousand), primarily comprising staff costs, professional fees, depreciation and amortization, and research and development expenses Administrative Expenses | Indicator | June 30, 2025 (HK$ thousand) | June 30, 2024 (HK$ thousand) | Year-on-Year Change (HK$ thousand) | | :--- | :--- | :--- | :--- | | Administrative expenses | 31,124 | 30,295 | +829 | - Administrative expenses primarily include staff costs, professional fees, depreciation and amortization for administrative use and idle capacity, and research and development expenses[115][120] Expected Credit Loss During the period, the Group did not recognize any reversal or provision for expected credit losses on trade receivables (2024: reversal of HK$1,668 thousand) Expected Credit Loss | Indicator | June 30, 2025 (HK$ thousand) | June 30, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Expected credit loss reversal/(provision) | 0 | 1,668 | Other Gains, Net For the six months ended June 30, 2025, net gains of HK$5,763 thousand were recognized (2024: HK$5,236 thousand), primarily including scrap sales income, exchange gains/losses, and other sundry income Other Gains, Net | Indicator | June 30, 2025 (HK$ thousand) | June 30, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Other gains, net | 5,763 | 5,236 | - Primarily includes scrap sales income, exchange gains/losses, and other sundry income[117][122] Finance Costs The Group's finance costs primarily consist of interest expenses on borrowings, totaling HK$27,529 thousand for the current period (2024: HK$30,752 thousand), representing a year-on-year decrease Finance Costs | Indicator | June 30, 2025 (HK$ thousand) | June 30, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Finance costs | 27,529 | 30,752 | Liquidity and Financial Resources The Group's cash is primarily used for working capital and capital expenditures, financed through shareholders' equity, operating cash flow, and borrowings, and the Group adopts a prudent cash management policy and plans to evaluate potential equity financing opportunities to strengthen its capital base and improve liquidity - The Group's cash is primarily used to meet working capital and capital expenditure needs, with financing sources including shareholders' equity, cash from operating activities, and borrowings[119][124] - The Group will continue to evaluate potential equity financing opportunities to strengthen its capital base, alleviate short-term financial pressure, and improve overall liquidity[119][125] Share Option Scheme The company adopted a share option scheme on December 4, 2017, to attract and retain excellent employees and provide incentives, with a 10-year validity period expiring on December 4, 2027, and no outstanding share options under the scheme as of June 30, 2025 - The company adopted a share option scheme on December 4, 2017, with a 10-year validity period, aimed at attracting and retaining employees[126][127] - As of June 30, 2025, there were no outstanding share options under the scheme[128] - As of the date of the 2025 interim report, the total number of shares available for issue under the scheme was 22,871,950 shares, representing approximately 3.86% of the issued share capital[128] Directors' Interests in Securities As of June 30, 2025, the company's directors and their associates had no interests or short positions in the company's shares, related shares, and debentures, but Shen Shijie, Chi Sile, Zhang Shengben, and Shen Yimin held varying proportions of interests in the shares of associated corporation Century Sunshine Group Holdings Limited - As of June 30, 2025, directors and their associates had no interests or short positions in the company's shares, related shares, and debentures[131] Directors' Interests in Shares of Associated Corporation Century Sunshine Group Holdings Limited | Director Name | Personal Interests | Number of Share Options Held | Total | Percentage of Issued Share Capital | | :--- | :--- | :--- | :--- | :--- | | Shen Shijie | 14,666,305 | 20,000,000 | 34,666,305 | 0.76% | | Chi Sile | 36,736,742 | – | 36,736,742 | 0.80% | | Zhang Shengben | – | 5,000,000 | 5,000,000 | 0.11% | | Shen Yimin | 7,500 | – | 7,500 | 0.0072% | Substantial Shareholders As of June 30, 2025, Ming Xin Developments Limited, New Bright Group Limited, Century Sunshine Group Holdings Limited, and Mr. Chi Wenfu were deemed to have relevant interests in 118.0% of the company's issued share capital, primarily through shareholdings and convertible bond conversion rights, with Thoughtful Limited and Concord Sea Limited also holding certain percentages of shares Substantial Shareholders' Shareholdings | Shareholder Name | Number of Ordinary Shares Held | Percentage of Issued Share Capital | | :--- | :--- | :--- | | Ming Xin Developments Limited | 699,505,512(L) | 118.0% | | New Bright Group Limited | 699,505,512(L) | 118.0% | | Century Sunshine Group Holdings Limited | 699,505,512(L) | 118.0% | | Chi Wenfu | 699,505,512(L) | 118.0% | | Thoughtful Limited | 27,293,900(L) | 4.6% | | Concord Sea Limited | 49,942,680(L) | 8.4% | | So Kit Yee Anita | 77,236,580(L) | 13.0% | | Leung Hin Hang Fredric | 77,236,580(L) | 13.0% | - Ming Xin Developments Limited holds 237,049,786 shares and conversion rights for 462,455,726 new shares from convertible bonds[137][138] - New Bright Group Limited, Century Sunshine, and Mr. Chi Wenfu are deemed to have the entire interest in Ming Xin Developments Limited due to their controlling relationship[138] [Purchase, Sale or Redemption of the Company's Listed Securities](index=35&type=section&id=PURCHASE,%20SALE%20OR%20REDEMPTION%20OF%20THE%20COMPANY'S%20LISTED%20SECU RITIES) Neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities during the period - Neither the company nor its subsidiaries purchased, sold, or redeemed any listed securities during the reporting period[140][145] Audit Committee The Audit Committee, composed of three independent non-executive directors, held two meetings during the period, reviewing the Group's accounting standards, policies, internal controls, and financial reporting matters, and also reviewed the unaudited consolidated interim results for the period - The Audit Committee comprises three independent non-executive directors: Zhang Shengben (Chairman), Sheng Hong, and Shen Yimin[4][141][146] - The Audit Committee held two meetings during the period, reviewing accounting standards, policies, internal controls, and financial reporting matters, and also reviewed the interim results[141][146] External Auditor Pacers CPA Limited audited the company's consolidated financial statements for the year ended December 31, 2024, following a change of auditor from BDO to Pacers on November 17, 2023, and the appointment of Pacers as the company's auditor was approved at the Annual General Meeting on June 30, 2025 - Pacers CPA Limited audited the company's consolidated financial statements for the year ended December 31, 2024[142][147] - The company changed its auditor on November 17, 2023, with Pacers replacing BDO[147][148] - The appointment of Pacers as the company's auditor was approved at the Annual General Meeting on June 30, 2025[149] Corporate Governance Practices The company complied with the Corporate Governance Code in Appendix 14 of the Listing Rules during the period, except that the roles of Chairman and Chief Executive Officer were not separated, both held by Mr. Shen Shijie, an arrangement the Board believes enhances decision-making and execution efficiency and will be reviewed periodically - The company complied with the Corporate Governance Code, but the roles of Chairman and Chief Executive Officer were not separated, both held by Mr. Shen Shijie[150][152] - The Board believes this arrangement enhances decision-making and execution efficiency, contributes to the Group's business development, and will be reviewed periodically[150][152] [Model Code for Securities Transactions by Directors](index=36&type=section&id=MODEL%20CODE%20FOR%20SECU RITIES%20TRANSACTIONS%20BY%20DIRECTORS) The company adopted the Model Code for Securities Transactions by Directors as set out in Appendix 10 of the Listing Rules, and all directors confirmed compliance with the required standards of the Code for the six months ended June 30, 2025 - The company adopted the Model Code for Securities Transactions by Directors as set out in Appendix 10 of the Listing Rules[151][153] - All directors confirmed compliance with the required standards of the Model Code during the reporting period[151][153] Appreciation The Board expresses its gratitude to all shareholders, customers, suppliers, banks, and employees for their support, hard work, and contributions to the Group - The Board expresses its gratitude to shareholders, customers, suppliers, banks, and all employees[155]