集海资源(02489) - 2025 - 中期财报

Company Information Company Basic Information Persistence Resources Group Ltd, a Cayman Islands-registered company (stock code 2489), maintained stable board members, company secretary, authorized representatives, and committee members during the reporting period - Company's Chinese name: 集海資源集團有限公司, English name: Persistence Resources Group Ltd[5] - Executive Directors include Dr. Shao Xuxin (Chairman and CEO), Mr. Mackie James Thomas, and Mr. Lu Zhuoguang[5] - Mr. Chen Yifen chairs the Audit Committee and Risk Management Committee, Dr. Zeng Ming chairs the Remuneration Committee and Environmental, Social and Governance Committee, and Dr. Shao Xuxin chairs the Nomination Committee[5] Professional Advisors and Offices The company appointed EY as auditor, Ascent Partners as compliance advisor, and Li & Partners as Hong Kong legal counsel, with its registered office in Cayman Islands and principal place of business in Hong Kong - The auditor is Ernst & Young, the compliance advisor is Ascent Partners, and the Hong Kong legal counsel is Li & Partners[6] - The registered office is located in the Cayman Islands, and the principal place of business in Hong Kong is at 20/F, Infinitus Plaza, 199 Des Voeux Road Central[6] - Major bankers include Huaxia Bank Co., Ltd. Yantai Branch and Shanghai Pudong Development Bank Co., Ltd. Yantai Laishan Sub-branch[6] Management Discussion and Analysis I. Interim Results For the six months ended June 30, 2025, the Group's total gold production slightly decreased, but revenue and net profit significantly increased due to higher average selling prices, leading to improved earnings per share and an interim dividend declaration 2025 H1 Interim Results Overview | Indicator | 2025 H1 (RMB thousand/kg/cents) | 2024 H1 (RMB thousand/kg/cents) | Year-on-year Change | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Total Gold Production (after smelting) | 446.04 kg | Approx. 453.71 kg | Decrease of approx. 7.67 kg | -1.7% | | Revenue | 303,493 | 236,173 | Increase of 67,320 | +28.5% | | Net Profit | 85,501 | 78,867 | Increase of 6,634 | +8.4% | | Basic and Diluted Earnings Per Share | 3.14 cents | 2.86 cents | Increase of 0.28 cents | +9.6% | | Interim Dividend | HKD0.03 per share | - | - | - | - The decrease in gold production was primarily due to the Yantai safety audit and assistance program implemented by the Shandong Provincial Emergency Management Department and the Shandong Bureau of the National Mine Safety Administration, requiring enhanced slope management[9] - The increase in revenue was mainly attributable to an approximately 34.2% increase in average selling price, partially offset by a 4.3% decrease in sales volume[10] II. Market Overview In H1 2025, global gold prices rebounded strongly amid geopolitical risks, driven by a weaker US dollar, anticipated US interest rate cuts, and robust central bank purchases, particularly from China - Gold demand in H1 2025 increased compared to 2024, mainly due to a weaker US dollar, anticipated US interest rate cuts, and economic and geopolitical uncertainties[14] - Global spot gold prices peaked at approximately USD3,500/ounce in April, with an average price of approximately USD3,070/ounce for the first half[14] - China's spot gold prices reached a high of approximately RMB827/gram in Q2, with an average price of approximately RMB720/gram for the first half[14] III. Business Review The Group's gold production slightly decreased in H1 due to safety audits, partially offset by the acquisition of Yantai Mujin, yet revenue and net profit grew, with Yantai Mujin commencing preliminary exploration for its Chahe underground mine project 2025 H1 Business Key Data | Indicator | 2025 H1 | 2024 H1 | Year-on-year Change | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Gold Production (after smelting) | 446.04 kg (14,340.49 ounces) | Approx. 453.71 kg (14,587.02 ounces) | Decrease of 7.67 kg (246.53 ounces) | -1.7% | | Revenue | RMB303,493,000 | RMB236,173,000 | Increase of 67,320,000 | +28.5% | | Net Profit | RMB85,501,000 | RMB78,867,000 | Increase of 6,634,000 | +8.4% | | Basic and Diluted Earnings Per Share | RMB3.14 cents | RMB2.86 cents | Increase of 0.28 cents | - | - The decrease in gold production was primarily due to the safety bureau's implementation of the Yantai safety audit and assistance program, requiring enhanced slope management[17] - Yantai Mujin completed a 22-drill hole hidden disaster exploration plan for the Chahe underground mine project, with a total contract value of approximately RMB3,550,000[18] IV. Financial Analysis The Group's revenue and gross profit increased, but gross margin slightly declined, while administrative expenses and finance costs rose significantly due to acquisitions and R&D, and income tax expenses increased with profit, leading to a higher effective tax rate 2025 H1 Key Financial Indicators Change | Indicator | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | Year-on-year Change | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Revenue | 303,493 | 236,173 | Increase of 67,320 | +28.5% | | Cost of Sales | 147,982 | 110,693 | Increase of 37,289 | +33.7% | | Gross Profit | 155,511 | 125,480 | Increase of 30,031 | +23.9% | | Gross Profit Margin | 51.2% | 53.1% | Decrease of 1.9 percentage points | - | | Other Income and Gains | 8,305 | 10,725 | Decrease of 2,420 | -22.6% | | Administrative Expenses | 31,514 | 19,445 | Increase of 12,069 | +62.1% | | Finance Costs | 3,027 | 1,397 | Increase of 1,630 | - | | Income Tax Expense | 43,141 | 35,910 | Increase of 7,231 | +20.1% | | Profit Attributable to Owners of the Parent | 62,762 | 57,284 | Increase of 5,478 | +9.6% | Liquidity and Capital Resources | Indicator | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | Change | | :--- | :--- | :--- | :--- | | Cash and Cash Equivalents | 655,053 | 639,599 | Increase of 15,454 | | Working Capital | 400,603 | 548,015 | Decrease of 147,412 | | Outstanding Bank Borrowings | 174,750 | None | Increase of 174,750 | | Total Debt-to-Equity Ratio | 14.9% | None | - | - The decrease in gross profit margin was mainly due to the 34.2% increase in average selling price being offset by a 33.7% increase in cost of sales[21] - The increase in administrative expenses was primarily due to supplementary payments for water and soil conservation compensation fees, increased legal and professional fees for the acquisition of Yantai Mujin, and higher research and development expenses[23] - The effective tax rate increased from approximately 31.3% in the same period of 2024 to approximately 33.5%, mainly due to additional tax expenses arising from tax adjustments made before the annual tax settlement in April 2025[27] - The Group faces interest rate risk, credit risk, foreign currency risk, and liquidity risk, adopting a conservative risk management strategy without hedging interest rate and foreign exchange risks[34][36][39] - As of June 30, 2025, pledged deposits of RMB35,047,000 were for environmental restoration guarantees, and mining rights and land title deeds of approximately RMB113,479,000 were pledged as collateral for bank credit[41] V. Business Outlook In H2 2025, gold prices are expected to rise, driven by macroeconomic and geopolitical factors, with strong investment demand in China, while the Group has optimized mining infrastructure and will continue slope management, but anticipates a potential production decrease due to slow economic recovery - In H2 2025, the gold market will be influenced by US monetary policy, geopolitical risks in the Middle East and Eastern Europe, central bank demand, and the strength of the US dollar, with gold prices expected to rise[44] - The Group has completed mining infrastructure construction and will continue slope management for open-pit mines as recommended by the safety bureau[44] - Due to the slow economic recovery in China, the Group will adjust its production plan, expecting overall production volume to potentially decrease[44] - The Denggezhuang Mine owned by Yantai Mujin has suspended production, with an estimated suspension cost of approximately RMB3,671,000, but this has no significant impact on the Group's overall performance as the two major mines in Songjiagou have resumed normal operations[45] VI. Use of Proceeds from Global Offering The company's global offering in December 2023 yielded net proceeds of approximately HK$218.3 million, with HK$201.2 million utilized by June 30, 2025, primarily for mining infrastructure, exploration, and asset acquisitions, and the remaining HK$17.1 million fully utilized post-reporting date - The net proceeds from the company's global offering were approximately HK$218.3 million[47] Use of Proceeds from Global Offering (as of June 30, 2025) | Business Objective | Percentage of Net Proceeds | Actual Available Amount (HKD million) | Amount Utilized (HKD million) | Unutilized Net Proceeds (HKD million) | Expected Timeline for Utilization | | :--- | :--- | :--- | :--- | :--- | :--- | | Further construction of mining infrastructure | 20.4% | 44.5 | 44.5 | – | Before June 2025 | | Upgrading gold ore reserves through additional exploration activities | 2.0% | 4.4 | 4.4 | – | Before February 2025 | | Expanding business through selective acquisitions of gold mining assets | 67.6% | 147.6 | 130.5 | 17.1 | Before February 2025 (Note) | | Working capital | 10.0% | 21.8 | 21.8 | – | Before December 2025 | | Total | 100.0% | 218.3 | 201.2 | 17.1 | - | - The unutilized net proceeds were primarily for the acquisition of a 52% equity interest in Yantai Mujin, which was fully utilized in July 2025 (instead of the originally anticipated February 2025)[49] Corporate Governance and Other Information Directors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares or Debentures of the Company and its Associated Corporations As of June 30, 2025, Non-executive Director Mr. Chen Libei held a 0.91% family interest in the company's shares, while Chairman and CEO Dr. Shao Xuxin and Executive Director Mr. Mackie James Thomas held share options in ultimate holding company Majestic Gold Corp Directors' Long Positions in Shares of the Company (as of June 30, 2025) | Director Name | Personal Interest (Beneficial Owner) | Family Interest (Spouse's Interest) | Total | Percentage of Issued Voting Shares | | :--- | :--- | :--- | :--- | :--- | | Mr. Chen Libei (Non-executive Director) | – | 18,180,000 | 18,180,000 | 0.91% | Directors' Long Positions in Shares and Underlying Shares Held through Equity Derivatives in Majestic Gold Corp. (as of June 30, 2025) | Director Name | Personal Interest | Family Interest | Sub-total | Number of Underlying Shares Held through Equity Derivatives | Total | Percentage of Issued Voting Shares | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Dr. Shao Xuxin (Chairman and CEO) | – | – | – | 4,000,000 | 4,000,000 | 0.38% | | Mr. Mackie James Thomas (Executive Director) | 720,000 | – | 720,000 | 3,700,000 | 4,420,000 | 0.42% | - Majestic Gold Corp. is the ultimate holding company of the Group, and its share options vested 100% immediately upon grant, but are not transferable within four months from the grant date[53][54] Interests of Substantial Shareholders in the Company As of June 30, 2025, Majestic Gold Corp. was the largest shareholder, holding 70.50% of the company's shares, with Oriental Gold Industry (Hong Kong) Co., Ltd. holding 9.90% Interests of Substantial Shareholders in the Company (as of June 30, 2025) | Shareholder Name | Capacity | Number of Shares Held (Long Position) | Approximate Percentage of Issued Share Capital in the Company | | :--- | :--- | :--- | :--- | | Majestic Gold Corp. | Beneficial Owner | 1,410,000,000 | 70.50% | | Oriental Gold Industry (Hong Kong) Co., Ltd. | Beneficial Owner | 198,000,000 | 9.90% | - Oriental Gold Industry (Hong Kong) Co., Ltd. is a wholly-owned subsidiary of Shandong Zhaojin Group Zhaoyuan Gold Smelting Co., Ltd[56] Dividend Policy The company revised its dividend policy to allow shareholders to share profits while retaining sufficient reserves for future development, with the board considering various factors for dividend distribution and intending to distribute interim cash dividends referencing 30% of the previous year's net profit attributable to equity holders - The company has adopted a revised dividend policy aimed at allowing shareholders to share in the company's profits while retaining sufficient reserves for future development[58] - The company intends to distribute interim cash dividends to shareholders during the year, with the percentage of cash dividends calculated with reference to 30% of the net profit attributable to equity holders for the previous year[59] - Dividends will be declared and paid in Hong Kong dollars, expected to be declared semi-annually after the announcement of semi-annual results[59] Changes in Information of Directors and Chief Executive During the reporting period, Mr. Chen Shaohui resigned as an executive director, and Mr. Lu Zhuoguang resigned as an executive director, company secretary, and authorized representative - Mr. Chen Shaohui resigned as an executive director of the company, effective February 4, 2025[63] - Mr. Lu Zhuoguang resigned as an executive director, company secretary, and authorized representative of the company, effective November 5, 2025[63] Sufficiency of Public Float The company maintained the prescribed public float under the Listing Rules throughout the reporting period and up to the date of this report - The company maintained the prescribed public float under the Listing Rules for the six months ended June 30, 2025, and up to the date of this report[65] Purchase, Sale or Redemption of the Company's Listed Securities During the reporting period, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities - During the reporting period, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities[66] Convertible Securities, Share Options, Warrants or Similar Rights During the reporting period, the company did not issue any convertible securities, share options, warrants, or similar rights - During the reporting period, the company did not issue any convertible securities, share options, warrants, or similar rights[67] Remuneration Policy and Number of Employees of the Group The company's remuneration policy links employee compensation to company performance and individual work, aiming to broaden salary advancement channels and motivate staff, with 485 employees as of June 30, 2025 - The company adopts a policy where employee remuneration is linked to the company's performance and individual work performance[68] - As of June 30, 2025, the company had a total of 485 employees[69] Overview of Material Investments, Significant Acquisitions and Disposals of Subsidiaries, Associates and Joint Ventures The Group had no other significant investments, capital asset plans, or material acquisitions and disposals of subsidiaries, associates, or joint ventures during the reporting period - The Group had no other significant investments or capital asset plans, or any other material investments, acquisitions, and disposals during the reporting period[70] Details of Material Events After the Reporting Period No other material events occurred after the reporting period and up to the date of this report - No other material events occurred after the reporting period and up to the date of this report[71] Compliance with Corporate Governance Code The company has complied with the Corporate Governance Code since its listing date, except for the combined roles of Chairman and CEO, which the board believes is in the Group's best interest, with clear division of responsibilities to ensure checks and balances - The company has complied with the code provisions of Appendix C1 to the Listing Rules since its listing date (December 22, 2023) and up to the date of this report[72] - The company has not separated the roles of Chairman and Chief Executive Officer, with Dr. Shao Xuxin holding both positions, which the Board believes is conducive to effective management and business development, ensuring consistent leadership[74] - The Chairman is responsible for overseeing the Board's functions and performance, the Chief Executive Officer is responsible for managing the Group's business, and independent non-executive directors constitute at least one-third of the Board members to ensure checks and balances[74] Directors' Interests in Competing Business During the reporting period, none of the company's directors, controlling shareholders, or their close associates held interests in any business directly or indirectly competing or potentially competing with the Group's business - During the reporting period, none of the company's directors or controlling shareholders and their respective close associates had any interests in any business that competes or is likely to compete, directly or indirectly, with the Group's business[76] Share Option Scheme The company adopted a share option scheme on November 30, 2023, to recognize and incentivize eligible participants, valid until November 30, 2033, with exercise prices not lower than the closing price or par value, and 200,000,000 shares available for grant as of June 30, 2025, with 21,000,000 options granted post-reporting period - The share option scheme was conditionally adopted on November 30, 2023, and is valid until November 30, 2033, aiming to recognize and incentivize eligible participants[77] - The exercise price per share for share options is determined by the Board, but shall not be less than the highest of the closing price of the shares as quoted on the Stock Exchange on the date of grant, the average closing price for the five business days immediately preceding the date of grant, or the nominal value of the shares[79][81] - As of January 1, 2025, and June 30, 2025, the total number of shares available for grant under the share option scheme was 200,000,000 shares, representing 10% of the issued shares[79] - On July 11, 2025, the company granted a total of 21,000,000 share options to certain directors and employee participants[80] Compliance with the Model Code for Securities Transactions by Directors of Listed Issuers ("Model Code") The company adopted the Model Code as the standard for directors' securities transactions, and all directors confirmed full compliance during the reporting period and up to the date of this report - The company has adopted the Model Code as set out in Appendix C3 to the Listing Rules as the standard for directors' securities transactions[83] - All directors confirmed that they have fully complied with the required standards of the Model Code during the reporting period and up to the date of this report[83] Audit Committee The company's Audit Committee, comprising three independent non-executive directors chaired by Mr. Chen Yifen, reviewed the interim report and unaudited interim consolidated financial statements, deeming their preparation compliant with applicable accounting standards and requirements - The Audit Committee comprises three independent non-executive directors: Mr. Chen Yifen (Chairman), Dr. Malaihollo Jeffrey Francis A, and Dr. Zeng Ming[84] - The primary responsibilities of the Audit Committee are to review and monitor the Group's financial reporting process, internal control systems, risk management, and internal audit[84] - The Audit Committee has reviewed this report and the unaudited interim consolidated financial statements, deeming their preparation compliant with applicable accounting standards and requirements[84] Investor Relations The company prioritizes effective communication with shareholders through AGMs and EGMs to enhance understanding of its business, performance, and strategy, with the Board Chairman and committee chairmen meeting shareholders and the auditor's representative attending to answer questions - The company believes that effective communication with shareholders is crucial for enhancing investor relations and their understanding of the Group's business, performance, and strategy[86] - The company maintains continuous communication with shareholders through annual general meetings and extraordinary general meetings, where the Board Chairman and chairmen of various Board committees will meet with shareholders and respond to inquiries[86] - The company will also invite a representative of the auditor to attend the annual general meeting to answer shareholders' questions regarding the audit work[86] Condensed Interim Consolidated Statement of Profit or Loss and Other Comprehensive Income Overview of Profit or Loss and Other Comprehensive Income For the six months ended June 30, 2025, the Group's revenue was RMB303,493 thousand and net profit was RMB85,501 thousand, both increasing year-on-year, with basic and diluted earnings per share attributable to owners of the parent at RMB3.14 cents, while total other comprehensive income for the period was a loss due to exchange differences Condensed Interim Consolidated Statement of Profit or Loss and Other Comprehensive Income (for the six months ended June 30) | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Revenue | 303,493 | 236,173 | | Cost of Sales | (147,982) | (110,693) | | Gross Profit | 155,511 | 125,480 | | Profit Before Tax | 128,642 | 114,777 | | Profit for the Period | 85,501 | 78,867 | | Profit Attributable to Owners of the Parent | 62,762 | 57,284 | | Profit Attributable to Non-controlling Interests | 22,739 | 21,583 | | Other Comprehensive Income for the Period (net of tax) | (1,452) | 1,715 | | Total Comprehensive Income for the Period | 84,049 | 80,582 | | Basic and Diluted Earnings Per Share Attributable to Owners of the Parent | RMB3.14 cents | RMB2.86 cents | Condensed Interim Consolidated Statement of Financial Position Overview of Assets, Liabilities and Equity As of June 30, 2025, the Group's total non-current assets significantly increased to RMB1,084,750 thousand, mainly due to increases in property, plant and equipment, intangible assets, and goodwill, while total current assets also grew, but a larger increase in total current liabilities led to a decrease in net current assets, with both net assets and total equity increasing Condensed Interim Consolidated Statement of Financial Position (as of June 30, 2025) | Indicator | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Total Non-current Assets | 1,084,750 | 567,571 | | Total Current Assets | 740,052 | 687,391 | | Total Current Liabilities | 339,449 | 139,376 | | Net Current Assets | 400,603 | 548,015 | | Total Assets Less Current Liabilities | 1,485,353 | 1,115,586 | | Total Non-current Liabilities | 311,329 | 62,127 | | Net Assets | 1,174,024 | 1,053,459 | | Total Equity | 1,174,024 | 1,053,459 | - The significant increase in non-current assets was mainly due to increases in property, plant and equipment (+RMB154,376 thousand), intangible assets (+RMB269,023 thousand), and newly recognized goodwill (RMB36,160 thousand)[93] - The total current liabilities significantly increased, primarily from trade payables, other payables and accrued expenses, and new interest-bearing bank borrowings[93] Condensed Interim Consolidated Statement of Changes in Equity Overview of Changes in Equity For the six months ended June 30, 2025, the Group's total equity increased from RMB1,053,459 thousand at the beginning of the period to RMB1,174,024 thousand, primarily due to profit for the period, capital contributions from non-controlling shareholders, and an increase in non-controlling interests from subsidiary acquisition Condensed Interim Consolidated Statement of Changes in Equity (for the six months ended June 30) | Item | June 30, 2025 (RMB thousand) | January 1, 2025 (RMB thousand) | | :--- | :--- | :--- | | Total Equity Attributable to Owners of the Parent | 964,068 | 883,464 | | Non-controlling Interests | 209,956 | 169,995 | | Total Equity | 1,174,024 | 1,053,459 | - Profit for the period was RMB85,501 thousand, of which RMB62,762 thousand was attributable to owners of the parent and RMB22,739 thousand to non-controlling interests[96] - Non-controlling shareholders contributed RMB19,294 thousand, and non-controlling interests increased by RMB42,222 thousand due to the acquisition of a subsidiary[96] Condensed Interim Consolidated Statement of Cash Flows Overview of Cash Flows For the six months ended June 30, 2025, the Group's net cash flow from operating activities decreased to RMB74,553 thousand, while net cash flow used in investing activities significantly increased due to purchases of property, plant and equipment and subsidiary acquisition costs, and net cash flow from financing activities turned positive due to new bank loans and non-controlling shareholder contributions, with cash and cash equivalents increasing to RMB655,053 thousand at period-end Condensed Interim Consolidated Statement of Cash Flows (for the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Net Cash Flows from Operating Activities | 74,553 | 108,058 | | Net Cash Flows Used in Investing Activities | (59,716) | (33,566) | | Net Cash Flows from/(Used in) Financing Activities | 2,069 | (1,729) | | Net Increase in Cash and Cash Equivalents | 16,906 | 72,763 | | Cash and Cash Equivalents at End of Period | 655,053 | 661,318 | - Net cash flows from operating activities decreased, primarily due to a decrease in other payables and accrued expenses[99] - Net cash flows used in investing activities increased, mainly due to the purchase of property, plant and equipment (RMB51,708 thousand) and net acquisition costs of a subsidiary (RMB6,708 thousand)[99] - Net cash flows from financing activities turned positive, primarily from new bank and other loans (RMB114,800 thousand) and capital contributions from non-controlling shareholders (RMB19,294 thousand), partially offset by repayment of bank loans and dividends paid to non-controlling interests[100] Notes to the Condensed Interim Consolidated Financial Information 1. Company and Group Information Persistence Resources Group Ltd is an investment holding company whose subsidiaries primarily engage in gold mining, beneficiation, and sales of gold doré in China, with Majestic Gold Corp. as its ultimate holding company, and Yantai Mujin Mining Co., Ltd. added as a new subsidiary during the reporting period - The company is an investment holding company, and its subsidiaries are engaged in gold mining, beneficiation, and sales of gold doré in China[101] - The company's holding company is Majestic Gold Corp., incorporated in British Columbia, Canada[101] - The Group added Yantai Mujin Mining Co., Ltd. (Yantai Mujin) as an indirectly owned subsidiary, holding a 52% equity interest, primarily engaged in gold mining, beneficiation, and sales[102] 2. Basis of Preparation The condensed interim consolidated financial information is prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" and presented in RMB, with all amounts rounded to the nearest thousand - The condensed interim consolidated financial information has been prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting"[104] - The interim financial information is presented in RMB, and all amounts have been rounded to the nearest thousand (RMB thousand)[104] 3. Changes in Accounting Policies and Disclosures The accounting policies adopted for the condensed interim consolidated financial information are consistent with those used for the annual consolidated financial statements, with the initial adoption of IAS 21 amendments "Lack of Exchangeability" having no significant impact as the Group's transaction currencies are all exchangeable - The accounting policies adopted in the preparation of the condensed interim consolidated financial information are consistent with those applied in the preparation of the Group's annual consolidated financial statements for the year ended December 31, 2024[105] - The initial adoption of the amendments to IAS 21 "Lack of Exchangeability" had no impact on the condensed interim consolidated financial information, as all currencies in which the Group transacts are exchangeable[106] 4. Operating Segment Information The Group has one reportable operating segment: mining and beneficiation of gold, ultimately sold as gold doré, with all revenue derived from operations in mainland China and no non-current assets located outside mainland China - The Group has one reportable operating segment: mining and beneficiation of gold, which is ultimately sold in the form of gold doré[107] - The Group's revenue from external customers is solely derived from its operations in mainland China, and no non-current assets are located outside mainland China[108] Revenue from Major Customers (for the six months ended June 30) | Customer | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Customer A | 303,493 | 236,173 | 5. Revenue For the six months ended June 30, 2025, the Group's revenue was RMB303,493 thousand, entirely from contracts with customers for the sale of gold doré, recognized at a point in time Revenue Analysis (for the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Revenue from Contracts with Customers | 303,493 | 236,173 | | Type of Goods or Services: Sale of Gold Doré | 303,493 | 236,173 | | Timing of Revenue Recognition: At a Point in Time | 303,493 | 236,173 | 6. Finance Costs For the six months ended June 30, 2025, the Group's finance costs significantly increased to RMB3,027 thousand from RMB1,397 thousand in the prior period, primarily due to higher interest on bank borrowings and increased discount amounts for provisions and other long-term liabilities over time Finance Costs Analysis (for the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Interest on Bank Borrowings | 1,342 | 314 | | Interest Expense on Lease Liabilities | 9 | – | | Increase in Discount Amount of Provisions and Other Long-term Liabilities Due to Passage of Time | 1,676 | 1,083 | | Total | 3,027 | 1,397 | 7. Profit Before Tax For the six months ended June 30, 2025, the Group's profit before tax was RMB128,642 thousand, after deducting items such as cost of inventories sold, depreciation of property, plant and equipment, and research and development costs Profit Before Tax Deducted/Credited Items (for the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Cost of Inventories Sold | 147,982 | 110,693 | | Depreciation of Property, Plant and Equipment | 26,404 | 21,383 | | Depreciation of Right-of-use Assets | 4,995 | 5,160 | | Amortization of Intangible Assets | 3,477 | 3,652 | | Research and Development Costs | 6,763 | 4,169 | - Depreciation of property, plant and equipment, depreciation of right-of-use assets, and amortization of intangible assets are included in "Cost of sales" and "Administrative expenses" in the consolidated statement of profit or loss and other comprehensive income[113] 8. Income Tax Expense For the six months ended June 30, 2025, the Group's income tax expense increased to RMB43,141 thousand, with mainland China subsidiaries generally subject to a 25% corporate income tax rate, but the Group's effective tax rate was approximately 33.5%, higher than the statutory rate, mainly due to withholding tax, non-deductible expenses, and unrecognized deductible losses Income Tax Expense Analysis (for the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Current Tax: China Corporate Income Tax | 43,880 | 33,615 | | Deferred Tax | (739) | 2,295 | | Total Tax Expense for the Period | 43,141 | 35,910 | - The Group's subsidiaries operating in mainland China are generally subject to China Corporate Income Tax at a rate of 25% during the period[115] - The Group's effective tax rate for the reporting period was approximately 33.5% (2024: approximately 31.3%), which is higher than the statutory tax rate of 25%, mainly due to factors such as withholding tax, non-deductible expenses, and unrecognized deductible losses[116] 9. Dividends On August 29, 2025, the Board declared an interim dividend of HK3.00 cents per ordinary share, totaling approximately HK$60,000,000, which was not recognized as a liability at the end of the reporting period - On August 29, 2025, the Board declared an interim dividend of HK3.00 cents per ordinary share (2024: HK2.95 cents per ordinary share)[117] - The total interim dividend amounted to approximately HK$60,000,000 (2024: HK$59,000,000)[117] - The interim dividend was not recognized as a liability at the end of the reporting period[118] 10. Earnings Per Share Attributable to Owners of the Parent For the six months ended June 30, 2025, basic and diluted earnings per share attributable to owners of the parent was RMB3.14 cents, calculated based on a weighted average of 2,000,000,000 ordinary shares outstanding during the period Basic Earnings Per Share Calculation (for the six months ended June 30) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Profit Attributable to Owners of the Parent for Basic EPS Calculation (RMB thousand) | 62,762 | 57,284 | | Weighted Average Number of Ordinary Shares Outstanding for Basic EPS Calculation | 2,000,000,000 | 2,000,000,000 | | Basic and Diluted Earnings Per Share | RMB3.14 cents | RMB2.86 cents | 11. Property, Plant and Equipment For the six months ended June 30, 2025, the Group acquired property, plant and equipment with a total cost of RMB32,712 thousand, excluding those acquired through business combinations, and at period-end, certain assets with a net book value of RMB6,140 thousand, mostly from business combinations, had not yet obtained ownership certificates - For the six months ended June 30, 2025, the Group acquired property, plant and equipment assets with a total cost of RMB32,712 thousand[121] - Certain property, plant and equipment with a total net book value of RMB6,140 thousand had not yet obtained ownership certificates as of June 30, 2025, of which RMB4,291 thousand was acquired through business combinations[121] 12. Trade Payables As of June 30, 2025, the Group's total trade payables were RMB24,402 thousand, mostly due within one year, and are interest-free, generally settled within 30 to 90 days Trade Payables Aging Analysis (as of June 30, 2025) | Aging | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within 1 year | 23,356 | 11,501 | | 1 to 2 years | 1,046 | – | | Total | 24,402 | 11,501 | - Trade payables are interest-free and generally settled within 30 to 90 days[122] 13. Share Capital As of June 30, 2025, the company's issued and fully paid share capital comprised 2,000,000,000 ordinary shares with a par value of HK$0.01 each, totaling RMB18,172 thousand, consistent with December 31, 2024 Share Capital Information (as of June 30, 2025) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Issued and Fully Paid Ordinary Shares (2,000,000,000 shares, HK$0.01 par value each) | 18,172 | 18,172 | 14. Commitments As of June 30, 2025, the Group's total capital commitments for contractual costs not provided for in the financial statements amounted to RMB5,040 thousand, primarily for mining infrastructure Contractual Commitments (as of June 30, 2025) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Contracted but not provided for: Mining Infrastructure | 5,040 | – | 15. Business Combination The Group completed the acquisition of a 52% equity interest in Yantai Mujin on February 28, 2025, for a total consideration of RMB81,900 thousand, aiming to expand its gold doré mining, processing, and sales market share, resulting in goodwill of RMB36,160 thousand, and since acquisition, Yantai Mujin contributed RMB25,275 thousand in revenue but a consolidated loss of RMB5,161 thousand - The Group completed the acquisition of a 52% equity interest in Yantai Mujin on February 28, 2025, for a total consideration of RMB81,900 thousand[125] - The acquisition resulted in goodwill of RMB36,160 thousand[126] - Since the acquisition, Yantai Mujin contributed RMB25,275 thousand in revenue to the Group and resulted in a consolidated loss of RMB5,161 thousand[130] - The initial accounting for this acquisition has been provisionally determined, and the final PPA report is not yet complete, so amounts may be adjusted subsequently[128] 16. Related Party Transactions As of June 30, 2025, Kong Fanzhong, Kong Fanbo, and Yantai Baiheng Gold Mine Co., Ltd. provided guarantees for the Group's bank borrowings of RMB127,800 thousand, with no other related party transactions or outstanding balances during the period, and total key management personnel compensation amounted to RMB3,979 thousand - Kong Fanzhong, Kong Fanbo, and Yantai Baiheng Gold Mine Co., Ltd. provided guarantees for the Group's bank borrowings of RMB127,800 thousand as of June 30, 2025[131] - For the six months ended June 30, 2024 and 2025, there were no transactions with related parties and no outstanding related party balances[132][131] Key Management Personnel Compensation of the Group (for the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Short-term Employee Benefits | 3,771 | 3,292 | | Contributions to Pension Schemes | 208 | 110 | | Total Compensation Paid to Key Management Personnel | 3,979 | 3,402 | 17. Fair Value and Fair Value Hierarchy of Financial Instruments Management assesses that the fair values of short-term financial instruments like cash and cash equivalents and trade payables approximate their carrying amounts, while fair values of other long-term assets and liabilities are calculated by discounting expected future cash flows, with the company's finance team responsible for policies and procedures for fair value measurement - Management has assessed that the fair values of cash and cash equivalents, restricted and pledged deposits, financial assets, trade payables, financial liabilities, and interest-bearing bank borrowings approximate their carrying amounts, primarily because these instruments mature in the short term[133] - The fair values of other long-term assets and other long-term liabilities are calculated by discounting expected future cash flows[133] - The Group's corporate finance team, led by the Chief Financial Officer, is responsible for determining the policies and procedures for fair value measurement of financial instruments[133] 18. Events After the Reporting Period No other significant subsequent events occurred after June 30, 2025, other than those disclosed in the Management Discussion and Analysis section of this report - No other significant subsequent events occurred after June 30, 2025, other than those disclosed in the Management Discussion and Analysis section of this report[134] 19. Approval of Condensed Interim Consolidated Financial Information The condensed interim consolidated financial information was approved and authorized for issue by the Board of Directors on August 29, 2025 - The financial statements were approved and authorized for issue by the Board of Directors on August 29, 2025[135]