趣致集团(00917) - 2025 - 中期财报

Company Information Board of Directors and Company Secretary The company's board comprises executive, non-executive, and independent non-executive directors, with Ms. Yin Juehui serving as Chairperson and CEO, and Mr. Huang Junying appointed as Joint Company Secretary on August 18, 2025 - Ms. Yin Juehui serves as Chairperson and Chief Executive Officer, responsible for the Group's overall management, operations, and strategy[6] - Mr. Huang Junying was appointed Joint Company Secretary and authorized representative on August 18, 2025, with Ms. Wu Xiowei resigning on the same day[6] Committee Composition The Audit Committee is chaired by Mr. Zhu Lin, the Remuneration Committee by Dr. Yang Bo, and the Nomination Committee by Ms. Yin Juehui - The Audit Committee is chaired by Mr. Zhu Lin, the Remuneration Committee by Dr. Yang Bo, and the Nomination Committee by Ms. Yin Juehui[6] Registered and Business Locations The company's registered office is in the Cayman Islands, with primary business locations in Shanghai, Huzhou (Zhejiang), and Causeway Bay (Hong Kong) - The company is registered in the Cayman Islands, with primary business locations in Shanghai and Huzhou, Zhejiang, and Hong Kong's primary business location in Causeway Bay[9] Listing Information The company's stock code is 0917, and it was listed on the Stock Exchange on May 27, 2024 - The company's stock code is 0917, with a listing date of May 27, 2024[9] Financial Highlights Quzhi Group's H1 2025 revenue grew 31.3% to RMB 676.2 million, achieving a RMB 128.4 million profit, reversing prior-year loss 2025 H1 Interim Results Summary | Metric | 2025 (RMB '000) | 2024 (RMB '000) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 676,189 | 515,117 | 31.3 | | - Marketing Services | 568,020 | 411,759 | 37.9 | | - Merchandise Sales | 83,219 | 78,449 | 6.1 | | - Other Services | 24,950 | 24,909 | 0.2 | | Gross Profit | 385,511 | 281,424 | 37.0 | | Profit/(Loss) for the Period | 128,363 | (1,846,245) | 107.0 | | EBITDA | 175,751 | (1,805,098) | 109.7 | - Profit for the period reversed from a loss of RMB 1,846.2 million in H1 2024 to a profit of RMB 128.4 million in H1 2025, primarily due to a non-cash, one-off fair value loss of RMB 1,899.4 million related to convertible redeemable preference shares in H1 2024[13] Management Discussion and Analysis This section provides a detailed analysis of the company's operational performance, business segment results, strategic outlook, and comprehensive financial overview for the reporting period Performance Review In H1 2025, China's economy grew steadily, driving strong marketing demand in food and beverage, new energy vehicles, and home appliances, leading to significant revenue and gross profit growth for Quzhi Group - China's economy experienced steady growth, with GDP increasing by 5.3% year-on-year, and the new energy vehicle and home appliance sectors benefited from intelligent upgrades and "trade-in" policies, leading to robust marketing demand[12] - The Group's revenue increased by 31.3% to RMB 676.2 million, and gross profit grew by 37.0% to RMB 385.5 million year-on-year[12] - The core strategy was fully upgraded to "AI+Consumption Scenarios," with R&D investment significantly increasing by 107.7% to RMB 77.8 million, achieving key technological breakthroughs in the independently developed AI-OMNI engine[12][13] Business Segment Performance The Group's business segments performed well, with significant growth in marketing services revenue and gross profit, modest growth in merchandise sales, and stable other services revenue, driven by increased AI R&D and new product launches Marketing Services Marketing services revenue grew 37.9% to RMB 568.0 million, with gross profit up 43.8% to RMB 353.3 million, driven by expanded service scenarios, optimized AI interactive marketing products, and enhanced data strategy services Marketing Services Segment Performance | Metric | 2025 H1 (RMB million) | YoY Growth (%) | | :--- | :--- | :--- | | Revenue | 568.0 | 37.9 | | Gross Profit | 353.3 | 43.8 | | Standardized Marketing Services Revenue | 483.2 | 34.3 | | Value-added Marketing Services Revenue | 84.9 | 63.1 | - Average revenue per key account increased to RMB 16.2 million, a 52.2% year-on-year growth[16] - Launched or optimized AI digital human guides, AI holographic marketing cabinets, a marketing selling point database for beverages and snacks, and pre-scoring services, while enhancing the flexible combination capabilities of service modules[17][18] - During the reporting period, registered software copyrights in China increased to 159, with 34 new patent applications submitted[18] Merchandise Sales Merchandise sales revenue increased by 6.1% to RMB 83.2 million, primarily due to terminal network expansion in high-potential cities and more cost-effective pricing strategies Merchandise Sales Segment Performance | Metric | 2025 H1 (RMB million) | YoY Growth (%) | | :--- | :--- | :--- | | Revenue | 83.2 | 6.1 | | Gross Profit | Decreased | Decreased | - Revenue growth was primarily attributed to the expansion of the terminal network in high-potential cities like Hangzhou, Chengdu, and Chongqing, and the adoption of more cost-effective merchandise pricing strategies[21] Lifestyle and Innovation Business The Group is strategically focusing on "AI+Entertainment" new scenarios, aiming to build a global leading AI indoor entertainment space, with the Middle East market as the initial expansion target - The Group is strategically focusing on "AI+Entertainment" new scenarios, aiming to build a global leading AI indoor entertainment space, with the Middle East market selected as the first stop for business expansion[22] - An overseas entertainment business division has been established, completing organizational structure setup, initial venue preparations, and obtaining local licenses[22] Other Services Other services revenue increased by 0.2% to RMB 25.0 million, with a decrease in gross profit, as the Group reduced non-core projects to focus on its primary business Other Services Segment Performance | Metric | 2025 H1 (RMB million) | YoY Growth (%) | | :--- | :--- | :--- | | Revenue | 25.0 | 0.2 | | Gross Profit | Decreased | Decreased | - Other services represent an auxiliary business segment, and the Group reduced its undertaking of non-core projects to focus on its core business[23] Long-term Strategy and Outlook For H2 2025, the Group will continue its "AI+Consumption Scenarios" strategy, deepening investments in "AI+Marketing" and "AI+Entertainment," while exploring strategic M&A for business expansion - The Group will continue to advance its "AI+Consumption Scenarios" core strategy, committed to reshaping more consumption scenarios with AIoT to bring more interesting new lifestyle experiences to young demographics[24] - In the "AI+Marketing" sector, the Group will continue to increase AI interaction investment, providing more innovative and efficient one-stop marketing solutions[24] - In the "AI+Entertainment" sector, the Group will focus on building global leading AI indoor entertainment spaces and drive global expansion after validating the Middle East project[24] - The Group plans to systematically expand its business boundaries and value chain depth through strategic business mergers and acquisitions and ecological synergy integration, achieving high-quality scaled growth[25] Financial Overview This chapter details the Group's H1 2025 financial performance, including revenue, costs, profits, expenses, and balance sheet, highlighting revenue growth, improved gross margin, increased R&D, and a return to profitability Revenue The Group's H1 2025 revenue increased by 31.3% to RMB 676.2 million, driven by China's economic growth, consumer market support, strong brand client partnerships, and optimized AI interactive marketing products Revenue Overview | Metric | 2025 H1 (RMB million) | 2024 H1 (RMB million) | YoY Growth (%) | | :--- | :--- | :--- | :--- | | Revenue | 676.2 | 515.1 | 31.3 | - Revenue growth was primarily attributed to China's steady economic growth, supportive consumer market policies, strong partnerships with brand clients, optimization of AI interactive marketing products and service models, and continuous improvement in the efficiency of the AI interactive terminal network[27] Revenue by Business Segment Marketing services revenue grew 37.9%, with standardized marketing services up 34.3% and value-added marketing services up 63.1%, driven by enhanced service capabilities and AI interactive marketing product innovation, while merchandise sales revenue increased 6.1% and other services revenue remained stable Revenue and Gross Margin by Business Segment | Segment | 2025 H1 Revenue (RMB '000) | 2025 H1 Gross Margin (%) | 2024 H1 Revenue (RMB '000) | 2024 H1 Gross Margin (%) | | :--- | :--- | :--- | :--- | :--- | | Marketing Services | 568,020 | 62.2 | 411,759 | 59.7 | | - Standardized Marketing Services | 483,157 | 57.2 | 359,712 | 55.8 | | - Value-added Marketing Services | 84,863 | 90.9 | 52,047 | 86.2 | | Merchandise Sales | 83,219 | 25.6 | 78,449 | 30.7 | | Other Services | 24,950 | 43.4 | 24,909 | 46.7 | | Total | 676,189 | 57.0 | 515,117 | 54.6 | - Average revenue per key account for standardized marketing services increased from RMB 9.3 million to RMB 13.7 million; for value-added marketing services, it increased from RMB 2.5 million to RMB 4.6 million[29][30] Cost of Sales Cost of sales increased by 24.4% to RMB 290.7 million, primarily due to higher information technology service fees from increased marketing services and increased cost of inventories sold from higher merchandise sales, but grew slower than revenue, supporting gross margin improvement Cost of Sales Composition | Item | 2025 H1 (RMB million) | 2024 H1 (RMB million) | YoY Growth (%) | | :--- | :--- | :--- | :--- | | Total Cost of Sales | 290.7 | 233.7 | 24.4 | | Information Technology Service Fees | 193.9 | 139.8 | 38.7 | | Cost of Inventories Sold | 60.7 | 53.6 | 13.2 | - The growth rate of cost of sales was lower than that of revenue, reflecting efficient cost control measures that contributed to continuous gross margin improvement[34] Gross Profit and Gross Margin Gross profit increased by 37.0% to RMB 385.5 million, with gross margin improving from 54.6% in H1 2024 to 57.0% in H1 2025, driven by revenue growth and efficient cost control Gross Profit and Gross Margin | Metric | 2025 H1 (RMB million) | 2024 H1 (RMB million) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Gross Profit | 385.5 | 281.4 | 37.0 | | Gross Margin | 57.0% | 54.6% | 2.4 percentage points increase | - Gross margin improvement was primarily due to stable revenue growth and efficient cost control[35] Other Income and Gains Other income and gains decreased by 17.2% to RMB 3.5 million, mainly due to a reduction in government grants related to the listing Other Income and Gains | Metric | 2025 H1 (RMB million) | 2024 H1 (RMB million) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Other Income and Gains | 3.5 | 4.3 | -17.2 | - The decrease was primarily due to reduced government grants related to the listing completed in 2024[36] Selling and Distribution Expenses Selling and distribution expenses increased by 21.7% to RMB 172.7 million, with marketing and promotion expenses rising 28.5% to enhance brand awareness and expand the customer base Selling and Distribution Expenses | Item | 2025 H1 (RMB million) | 2024 H1 (RMB million) | YoY Growth (%) | | :--- | :--- | :--- | :--- | | Total Selling and Distribution Expenses | 172.7 | 141.9 | 21.7 | | Marketing and Promotion Expenses | 129.1 | 100.5 | 28.5 | - The increase in marketing and promotion expenses was primarily due to increased online and offline multi-channel synergistic marketing activities aimed at enhancing brand awareness and expanding potential customer reach[37] Administrative Expenses Administrative expenses decreased by 31.3% to RMB 24.9 million, mainly due to expenses incurred and paid for the completion of the global offering in H1 2024 Administrative Expenses | Metric | 2025 H1 (RMB million) | 2024 H1 (RMB million) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Administrative Expenses | 24.9 | 36.3 | -31.3 | - The decrease was primarily due to expenses incurred and paid for the completion of the global offering in H1 2024[38] Finance Costs Finance costs increased by RMB 5.5 million to RMB 9.5 million, primarily due to domestic loans to supplement onshore business operational needs for optimizing capital allocation efficiency Finance Costs | Metric | 2025 H1 (RMB million) | 2024 H1 (RMB million) | YoY Change (RMB million) | | :--- | :--- | :--- | :--- | | Finance Costs | 9.5 | 4.0 | +5.5 | - The increase was primarily due to domestic loans to supplement onshore business operational needs, optimizing capital allocation efficiency in consideration of domestic and international market interest rate environments and expected investment returns[39] Research and Development Expenses R&D expenses significantly increased by 107.7% to RMB 77.8 million, reflecting the Group's intensified investment in AI interactive marketing and data product development, yielding substantial technological achievements and product commercialization Research and Development Expenses | Metric | 2025 H1 (RMB million) | 2024 H1 (RMB million) | YoY Growth (%) | | :--- | :--- | :--- | :--- | | R&D Expenses | 77.8 | 37.5 | 107.7 | - The significant increase in R&D expenses was primarily due to the Group's intensified efforts in developing AI interactive marketing and data products, including optimization of AI digital human guides, AI holographic marketing cabinets, marketing selling point databases, and enhanced service module combination capabilities[40] Other Expenses Other expenses for H1 2025 amounted to RMB 3.8 million, primarily comprising exchange losses from currency fluctuations Other Expenses | Metric | 2025 H1 (RMB million) | | :--- | :--- | | Other Expenses | 3.8 | - Other expenses primarily consisted of exchange losses arising from currency fluctuations[41] Income Tax Expense Income tax expense increased to RMB 11.2 million, primarily due to higher profit before tax, with an effective tax rate of 8.7% in H1 2025 Income Tax Expense | Metric | 2025 H1 (RMB million) | 2024 H1 (RMB million) | | :--- | :--- | :--- | | Income Tax Expense | 11.2 | 9.2 | | Effective Tax Rate | 8.7% | - | - The increase in income tax expense was primarily due to higher profit before tax[42] Profit/(Loss) for the Period The Group achieved a profit of RMB 128.4 million in H1 2025, reversing a loss of RMB 1,846.2 million in H1 2024, primarily due to a non-cash fair value loss related to convertible redeemable preference shares in the prior year Profit/(Loss) for the Period | Metric | 2025 H1 (RMB million) | 2024 H1 (RMB million) | | :--- | :--- | :--- | | Profit/(Loss) for the Period | 128.4 | (1,846.2) | - The turnaround to profit was primarily due to a non-cash, one-off fair value loss of RMB 1,899.4 million related to convertible redeemable preference shares in H1 2024[43] Inventories Inventory balance slightly increased to RMB 12.0 million, while inventory turnover days decreased from 65.3 days to 46.2 days, reflecting improved lean inventory management Inventory Metrics | Metric | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | | :--- | :--- | :--- | | Inventory Balance | 12.0 | 11.8 | | Inventory Turnover Days | 46.2 | 65.3 | - The decrease in inventory turnover days was primarily due to further refinement of lean inventory management[44] Trade Receivables Trade receivables slightly increased to RMB 514.1 million, mainly due to expanded business scale, with accounts receivable turnover days remaining stable at 172.3 days Trade Receivables Metrics | Metric | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | | :--- | :--- | :--- | | Trade Receivables | 514.1 | 510.0 | | Accounts Receivable Turnover Days | 172.3 | 172.3 | - The increase in trade receivables was primarily due to expanded business scale[45] Trade Payables Trade payables significantly increased to RMB 57.0 million, primarily due to expanded business scale, increased merchandise transaction volume, and higher R&D investment Trade Payables | Metric | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | | :--- | :--- | :--- | | Trade Payables | 57.0 | 19.0 | - The increase was primarily due to expanded business scale, increased merchandise transaction volume during the reporting period, and higher R&D investment[46] Prepayments, Deposits and Other Receivables - Current Prepayments, deposits, and other receivables decreased from RMB 218.1 million to RMB 178.3 million Prepayments, Deposits and Other Receivables - Current | Metric | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | | :--- | :--- | :--- | | Prepayments, Deposits and Other Receivables | 178.3 | 218.1 | Capital Expenditures Property, plant and equipment decreased to RMB 113.1 million, mainly due to the disposal of AI interactive terminals and depreciation offsetting new purchases, while right-of-use assets increased to RMB 6.9 million due to new lease agreements Capital Expenditures Composition | Item | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | | :--- | :--- | :--- | | Property, Plant and Equipment | 113.1 | 134.6 | | Right-of-Use Assets | 6.9 | 4.7 | - The decrease in property, plant and equipment was primarily due to the disposal of AI interactive terminals at the end of their useful lives and depreciation offsetting new purchases of AI interactive terminals amounting to RMB 4.0 million during the reporting period[49] - The increase in right-of-use assets was primarily due to new lease agreements for office properties and warehouses[49] Financial Position Cash and cash equivalents increased to RMB 1,141.2 million, and bank borrowings increased to RMB 544.7 million, reflecting increased cash from operating activities and bank borrowings, indicating ample liquidity Key Financial Position Metrics | Metric | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | | :--- | :--- | :--- | | Cash and Cash Equivalents | 1,141.2 | 892.0 | | Bank Borrowings | 544.7 | 426.8 | - The increase in cash and cash equivalents was primarily attributable to cash generated from operating activities and increased bank borrowings[50] Gearing Ratio The gearing ratio increased from 25.7% as of December 31, 2024, to 29.4% as of June 30, 2025 Gearing Ratio | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Gearing Ratio | 29.4% | 25.7% | Pledge of Assets As of June 30, 2025, the Group had no pledge of assets - As of June 30, 2025, the Group had no pledge of assets[52] Contingent Liabilities As of June 30, 2025, the Group had no material contingent liabilities - As of June 30, 2025, the Group had no material contingent liabilities[53] Foreign Exchange Risk The Group primarily operates in China, with transactions settled in RMB, and management believes there is no significant foreign exchange risk exposure, nor has it hedged against currency fluctuations - The Group primarily conducts its business in China, with transactions mainly settled in RMB, and management believes there is no significant foreign exchange risk exposure in its operations[54] - As of June 30, 2025, the Group had not hedged against foreign exchange fluctuations[54] Credit Risk The Group transacts only with recognized and reputable third parties, managing credit risk through credit verification procedures and regular monitoring of receivables, with no significant bad debt risk - The Group transacts only with recognized and reputable third parties, managing credit risk through credit verification procedures and continuous monitoring of receivables balances[55] - The risk of bad debts is not significant[55] Material Acquisitions and Disposals During the reporting period, the Group did not undertake any material acquisitions or disposals of subsidiaries, associates, or joint ventures - During the reporting period, the Group did not undertake any material acquisitions or disposals of subsidiaries, associates, or joint ventures[56] Material Investments Held and Prospects As of June 30, 2025, the Group held no material investments and had no future plans for significant investments - As of June 30, 2025, the Group held no single investment accounting for 5% or more of its total assets, thus holding no material investments[57] - As of June 30, 2025, the Group had no future plans for material investments[57] Future Plans for Material Acquisitions and Investments During the reporting period, the Group did not undertake any material investments, acquisitions, or disposals, and has no other significant investment or acquisition plans beyond those disclosed in the prospectus - During the reporting period, the Group did not undertake any material investments, acquisitions, or disposals[58] - Except for the expansion plans disclosed in the prospectus, the Group has not entered into any definitive agreements for material investments or acquisitions of significant capital assets or other businesses[58] Employees and Remuneration Policy As of June 30, 2025, the Group had 195 employees with total staff costs of RMB 22.3 million, offering competitive remuneration and share incentive schemes, alongside continuous education and training programs Employees and Remuneration | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Employees | 195 | 186 | | Total Staff Costs (RMB million) | 22.3 | 19.7 (2024 H1) | - The Group provides competitive remuneration packages to employees, including salaries, benefits, bonuses, and incentives, and implements a share incentive scheme[59] - Continuous internal and external education and training programs are provided to employees to enhance their technical, professional, or management skills[59] Events After Reporting Period No other significant events impacting the Group occurred after the reporting period, except for the placement of new shares under general mandate, which was completed on July 23, 2025 - Except for the placement of new shares under general mandate (the completion of which was disclosed in the Company's announcement dated July 23, 2025), no other events with a material impact on the Group occurred after the reporting period as of the date of this report[60] Other Information Corporate Governance The company is committed to high corporate governance standards and has adopted the Corporate Governance Code; despite the combined roles of Chairperson and CEO, the board believes this arrangement ensures consistent leadership with adequate checks and balances - The Company has adopted the Corporate Governance Code and complied with all applicable code provisions during the reporting period[61] - The roles of Chairperson and Chief Executive Officer are combined and held by Ms. Yin Juehui, an arrangement the Board believes ensures consistent leadership and more efficient strategic planning, with adequate checks and balances in place[62] Standard Securities Dealing Code The company has adopted the Standard Code for directors' securities dealings and its own code for employees, with all directors confirming compliance during the reporting period - The Company has adopted the Standard Code as the code of conduct for directors' securities dealings and its own code of conduct for employees' securities dealings[64] - Each director has confirmed compliance with the required standards set out in the Standard Code during the reporting period[64] Interim Dividend The Board of Directors resolved not to declare any interim dividend for the six months ended June 30, 2025 - The Board of Directors resolved not to declare any interim dividend for the six months ended June 30, 2025[66] Audit Committee The Audit Committee has reviewed the Group's unaudited condensed consolidated financial statements for the reporting period, confirming compliance with applicable accounting standards, laws, and regulations, and appropriate disclosures - The Audit Committee has reviewed the Group's unaudited condensed consolidated financial statements for the reporting period, deeming them compliant with applicable accounting standards and Listing Rules, with sufficient disclosures made[67] Use of Proceeds from Global Offering The net proceeds from the global offering were approximately HKD 420.51 million, with HKD 201.03 million utilized as of June 30, 2025, primarily for expanding the terminal network, optimizing marketing services, and enhancing R&D Summary of Use of Proceeds from Global Offering (As of June 30, 2025) | Planned Use | Percentage of Total Net Proceeds | Net Proceeds from Global Offering (HKD million) | Actual Net Proceeds Used (HKD million) | Unused Amount (HKD million) | Expected Timeline for Full Utilization of Remaining Net Proceeds | | :--- | :--- | :--- | :--- | :--- | :--- | | Expanding terminal network and increasing market penetration | 32.0% | 134.56 | 76.38 | 58.18 | December 31, 2027 | | Optimizing marketing services | 13.0% | 54.67 | 19.20 | 35.47 | December 31, 2027 | | Expanding the Group's brand client base by enhancing brand awareness | 15.0% | 63.08 | 32.46 | 30.62 | December 31, 2026 | | Strengthening the Group's technological capabilities and R&D efforts | 20.0% | 84.10 | 39.41 | 44.69 | December 31, 2027 | | Seeking strategic alliances and acquisitions | 10.0% | 42.05 | 22.03 | 20.02 | December 31, 2027 | | For general working capital and general corporate purposes | 10.0% | 42.05 | 11.55 | 30.50 | Not Applicable | | Total | 100.0% | 420.51 | 201.03 | 219.48 | | - There were no changes to the proposed use of net proceeds and the expected timeline[69] Directors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares and Debentures of the Company or any Associated Corporation As of June 30, 2025, directors and chief executives, including Ms. Yin Juehui, Mr. Cao Liwen, and Mr. Huang Aihua, held interests in the company's shares and underlying shares, primarily through trusts, controlled corporations, and share options under the share incentive scheme Directors' and Chief Executive's Shareholding Overview (As of June 30, 2025) | Director Name | Nature of Interest | Number of Shares Held | Approximate Percentage of Interest | | :--- | :--- | :--- | :--- | | Ms. Yin Juehui | Founder/Beneficiary of Trust | 72,294,252 | 27.52% | | | Jointly held interest with another person | 30,867,144 | 11.75% | | | Beneficial Owner (Share Options) | 2,500,000 | 0.95% | | Mr. Cao Liwen | Founder/Beneficiary of Trust | 8,819,184 | 3.36% | | | Jointly held interest with another person | 94,342,212 | 35.91% | | | Beneficial Owner (Share Options) | 2,500,000 | 0.95% | | Mr. Huang Aihua | Interest in Controlled Corporation | 4,409,592 | 1.68% | | | Jointly held interest with another person | 98,751,804 | 37.59% | | | Beneficial Owner (Share Options) | 4,000,000 | 1.52% | - All disclosed interests are long positions, and percentages are calculated based on the total number of 262,705,446 issued shares as of June 30, 2025[73][74] Share Incentive Scheme The company adopted a share incentive scheme on September 22, 2021, to attract and retain talent, with 39,318,824 shares available for issuance as of June 30, 2025, and RMB 7,542,000 in share-based expenses recognized during the period - The Share Incentive Scheme was adopted on September 22, 2021, to attract and retain talent and promote the successful operation of the company's business[77][79] - As of the date of this report, the total number of shares available for issuance under the Share Incentive Scheme is 39,318,824 shares, representing approximately 14.8% of the issued shares[77] Share Incentive Scheme Related Expenses | Metric | 2025 H1 (RMB '000) | 2024 H1 (RMB '000) | | :--- | :--- | :--- | | Share-based Expenses | 7,542 | 8,814 | Directors' Rights to Acquire Shares or Debentures Except as otherwise disclosed in this report, neither the company nor any of its subsidiaries entered into any arrangements during the reporting period that would enable any director, their spouse, or children under 18 to benefit from acquiring shares or debentures of the company or any other body corporate - Except as otherwise disclosed in this report, neither the Company nor any of its subsidiaries entered into any arrangements during the reporting period that would enable any director, their spouse, or children under 18 to benefit from acquiring shares or debentures of the Company or any other body corporate[88] Substantial Shareholders' Interests and Short Positions in Shares and Underlying Shares of the Company As of June 30, 2025, several entities and individuals were listed as substantial shareholders, holding interests in the company's shares or underlying shares, primarily through trusts, controlled corporations, and acting-in-concert agreements Substantial Shareholders' Shareholding Overview (As of June 30, 2025) | Shareholder Name/Individual | Capacity/Nature of Interest | Number of Shares Held | Approximate Percentage of Interest | | :--- | :--- | :--- | :--- | | Beyond Branding | Beneficial Owner | 72,294,252 | 27.52% | | Jovie Holding Limited | Interest in Controlled Corporation | 72,294,252 | 27.52% | | Q-robot Holding Limited | Beneficial Owner | 8,819,184 | 3.36% | | Helenatest Holding Limited | Interest in Controlled Corporation | 8,819,184 | 3.36% | | Ms. Yin Juehui | Founder/Beneficiary of Trust | 8,819,184 | 3.36% | | Kiosk Joy | Beneficial Owner | 8,819,184 | 3.36% | | Iwan Holding Limited | Interest in Controlled Corporation | 8,819,184 | 3.36% | | INSIGMA Limited | Beneficial Owner | 4,409,592 | 1.68% | | Mr. Wu Wenhong | Interest in Controlled Corporation | 4,409,592 | 1.68% | | NeoBox | Beneficial Owner | 4,409,592 | 1.68% | | NeoWay Holding Limited | Interest in Controlled Corporation | 4,409,592 | 1.68% | | Q-robot shop Limited | Beneficial Owner | 4,409,592 | 1.68% | | Mr. Qian Jun | Interest in Controlled Corporation | 4,409,592 | 1.68% | | Hengtai Trust | Trustee | 72,294,252 | 27.52% | | Shanghai Yuanjizhi Enterprise Management Partnership (Limited Partnership) | Beneficial Owner | 4,000,020 | 1.52% | | Shanghai Junna Enterprise Management Partnership (Limited Partnership) | Beneficial Owner | 21,999,948 | 8.37% | | Xiamen C&D Emerging Industry Equity Investment No. 1 Partnership (Limited Partnership) | Beneficial Owner | 18,000,036 | 6.85% | - Several directors and substantial shareholders are deemed to have interests in each other's shares through acting-in-concert agreements[78][91][101][102][104] Purchase, Sale or Redemption of the Company's Listed Securities Neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities during the reporting period, and the company held no treasury shares as of June 30, 2025 - Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the reporting period[106] - As of June 30, 2025, the Company held no treasury shares[106] Changes in Information of Directors and Chief Executive Mr. Chen Rui resigned as a non-executive director of Renrui Human Resources Technology Holdings Limited, a company listed on the Stock Exchange, in July 2025; no other changes in directors' and chief executive's information require disclosure since the publication of the 2024 annual report - Mr. Chen Rui resigned as a non-executive director of Renrui Human Resources Technology Holdings Limited, a company listed on the Stock Exchange, in July 2025[107] - Except for the aforementioned disclosure, no other changes in directors' and chief executive's information requiring disclosure have occurred since the publication of the 2024 annual report up to the date of this report[107] Continuing Disclosure Obligations under Listing Rules Except as disclosed in this report, the company had no other disclosure obligations under Listing Rules 13.20, 13.21, and 13.22 as of June 30, 2025 - Except as disclosed in this report, as of June 30, 2025, the Company had no other disclosure obligations under Listing Rules 13.20, 13.21, and 13.22[108] Interim Unaudited Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income This statement presents the Group's consolidated profit or loss and other comprehensive income for the six months ended June 30, 2025, showing revenue of RMB 676.2 million and a profit of RMB 128.4 million Consolidated Statement of Profit or Loss and Other Comprehensive Income Summary (For the six months ended June 30) | Metric | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | Revenue | 676,189 | 515,117 | | Cost of Sales | (290,678) | (233,693) | | Gross Profit | 385,511 | 281,424 | | Other Income and Gains | 3,531 | 4,266 | | Selling and Distribution Expenses | (172,737) | (141,948) | | Administrative Expenses | (24,947) | (36,315) | | Research and Development Expenses | (77,837) | (37,484) | | Fair Value Loss on Financial Liabilities at Fair Value Through Profit or Loss | – | (1,899,415) | | Fair Value Gain on Financial Assets at Fair Value Through Profit or Loss | 40,816 | 2,273 | | Other Expenses and Losses | (3,754) | (7) | | Impairment Losses under Expected Credit Loss Model (Net of Reversals) | (1,513) | (5,880) | | Finance Costs | (9,520) | (3,998) | | Profit/(Loss) Before Tax | 139,550 | (1,837,084) | | Income Tax Expense | (11,187) | (9,161) | | Profit/(Loss) for the Period | 128,363 | (1,846,245) | | Basic Profit/(Loss) Per Share Attributable to Owners of the Parent (RMB) | 0.47 | (13.71) | | Diluted Profit/(Loss) Per Share Attributable to Owners of the Parent (RMB) | 0.41 | (13.71) | - Profit for the period reversed from a loss to a profit, primarily due to a non-cash, one-off fair value loss related to convertible redeemable preference shares in the prior year[110] Interim Unaudited Condensed Consolidated Statement of Financial Position This statement outlines the Group's consolidated financial position as of June 30, 2025, detailing assets, liabilities, and equity, with total assets less current liabilities at RMB 1,705.9 million Consolidated Statement of Financial Position Summary (As of June 30, 2025) | Item | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | | :--- | :--- | :--- | | Non-current Assets | | | | Property, Plant and Equipment | 113,063 | 134,579 | | Right-of-Use Assets | 6,867 | 4,731 | | Total Non-current Assets | 178,128 | 201,978 | | Current Assets | | | | Inventories | 12,044 | 11,764 | | Trade Receivables | 514,088 | 510,008 | | Cash and Bank Balances | 1,141,177 | 891,987 | | Total Current Assets | 2,232,191 | 1,904,368 | | Current Liabilities | | | | Trade Payables | 56,982 | 19,002 | | Interest-bearing Bank Borrowings | 544,690 | 426,840 | | Total Current Liabilities | 704,461 | 538,624 | | Net Current Assets | 1,527,730 | 1,365,744 | | Total Assets Less Current Liabilities | 1,705,858 | 1,567,722 | | Net Assets | 1,701,573 | 1,565,668 | | Total Equity | 1,701,573 | 1,565,668 | - Cash and bank balances increased from RMB 892.0 million as of December 31, 2024, to RMB 1,141.2 million as of June 30, 2025, reflecting financial stability and ample liquidity[14] Interim Unaudited Condensed Consolidated Statement of Changes in Equity This statement details the changes in the Group's consolidated equity for the six months ended June 30, 2025, reflecting an increase in equity attributable to owners of the parent Consolidated Statement of Changes in Equity Summary (For the six months ended June 30) | Item | January 1, 2025 (RMB '000) | Profit for the Period (RMB '000) | Equity-settled Share Award Scheme (RMB '000) | June 30, 2025 (RMB '000) | | :--- | :--- | :--- | :--- | :--- | | Equity Attributable to Owners of the Parent | 1,536,358 | 123,391 | 7,542 | 1,667,291 | | Non-controlling Interests | 29,310 | 4,972 | – | 34,282 | | Total Equity | 1,565,668 | 128,363 | 7,542 | 1,701,573 | - Equity attributable to owners of the parent increased primarily due to profit for the period and the equity-settled share award scheme[115] Interim Unaudited Condensed Consolidated Statement of Cash Flows This statement presents the Group's consolidated cash flows for the six months ended June 30, 2025, showing net cash from operating activities of RMB 216.4 million and increased cash and cash equivalents Consolidated Statement of Cash Flows Summary (For the six months ended June 30) | Item | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | Net Cash Flows from Operating Activities | 216,443 | 79,373 | | Net Cash Flows Used in Investing Activities | (73,500) | (120,378) | | Net Cash Flows from Financing Activities | 106,715 | 629,603 | | Net Increase in Cash and Cash Equivalents | 249,658 | 588,598 | | Cash and Cash Equivalents at Beginning of Period | 891,987 | 299,018 | | Cash and Cash Equivalents at End of Period | 1,141,177 | 887,616 | - Net cash flows from operating activities significantly increased from RMB 79.4 million in H1 2024 to RMB 216.4 million in H1 2025[117] - Cash and cash equivalents at the end of the period reached RMB 1,141.2 million, reflecting the company's ample liquidity[117] Notes to the Interim Unaudited Condensed Consolidated Financial Information General Information Quzhi Group was incorporated in the Cayman Islands on June 15, 2021, and its shares were listed on the Main Board of the Stock Exchange on May 27, 2024, with its principal business being marketing services, merchandise sales, and other services in China - The Company was incorporated in the Cayman Islands on June 15, 2021, and its shares have been listed on the Main Board of The Stock Exchange of Hong Kong Limited since May 27, 2024[118] - The Group's principal activities are marketing services, merchandise sales, and other services in the People's Republic of China[118] Basis of Preparation The interim unaudited condensed consolidated financial information has been prepared in accordance with International Accounting Standard 34 Interim Financial Reporting and should be read in conjunction with the annual consolidated financial statements for the year ended December 31, 2024 - The interim unaudited condensed consolidated financial information has been prepared in accordance with International Accounting Standard 34 Interim Financial Reporting[119] - It should be read in conjunction with the Group's annual consolidated financial statements for the year ended December 31, 2024[119] Significant Accounting Policies The Group is evaluating the impact of new and revised International Financial Reporting Standards, which are not expected to have a material effect on financial performance and position - The Group is evaluating the impact of new and revised International Financial Reporting Standards upon their initial application, which are not expected to have a material impact on the Group's financial performance and financial position[120] Operating Segment Information The Group primarily engages in marketing services, merchandise sales, and other related services, which are considered a single reportable segment, with all revenue derived from mainland China - The Group primarily engages in marketing services, merchandise sales, and other related services, which are considered a single reportable segment[122] - All revenue from external customers is derived from mainland China[123] Revenue, Other Income and Gains The Group's revenue primarily stems from marketing services (provided over time), merchandise sales (transferred at a point in time), and other related services (provided at a point in time) Revenue Recognition Timing | Revenue Type | 2025 (RMB '000) | 2024 (RMB '000) | Revenue Recognition Timing | | :--- | :--- | :--- | :--- | | Marketing Services Revenue | 568,020 | 411,759 | Services provided over time | | Merchandise Sales Revenue | 83,219 | 78,449 | Goods transferred at a point in time | | Other Related Services Revenue | 24,950 | 24,909 | Services provided at a point in time | - Performance obligations for marketing services are satisfied over the period services are provided, with payment typically due within 180 days from the service completion and client acceptance date[127] - Performance obligations for merchandise sales are satisfied when control of goods is transferred to customers via vending machines, typically requiring cash on delivery[128] Profit/(Loss) Before Tax The Group's profit before tax was RMB 139.6 million, a significant improvement from the prior year's loss, primarily influenced by cost of sales, depreciation, R&D expenses, share incentive scheme expenses, and the fair value loss on financial liabilities at fair value through profit or loss in H1 2024 Profit/(Loss) Before Tax Composition (For the six months ended June 30) | Item | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | Cost of Inventories Sold | 60,651 | 53,572 | | Depreciation of Property, Plant and Equipment | 25,250 | 26,500 | | Research and Development Expenses | 77,837 | 37,484 | | Total Employee Benefit Expenses | 29,814 | 28,538 | | Fair Value Loss on Financial Liabilities at Fair Value Through Profit or Loss | – | 1,899,415 | | Fair Value Gain on Financial Assets at Fair Value Through Profit or Loss | (40,816) | (2,273) | | Profit/(Loss) Before Tax | 139,550 | (1,837,084) | - The loss before tax in H1 2024 was primarily impacted by a fair value loss of RMB 1,899.4 million on financial liabilities at fair value through profit or loss[130] Income Tax The Group's income tax expense was RMB 11.2 million, with an effective tax rate of 8.7%; its mainland China subsidiary, Shanghai Quzhi Network Technology Co., Ltd., enjoys a preferential 15% corporate income tax rate as a "High and New Technology Enterprise" Income Tax Expense Analysis (For the six months ended June 30) | Item | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | Current Income Tax | 11,240 | 10,212 | | Deferred Income Tax | (53) | (1,051) | | Total Tax Expense for the Period | 11,187 | 9,161 | | Effective Tax Rate | 8.7% | - | - Shanghai Quzhi Network Technology Co., Ltd. is recognized as a "High and New Technology Enterprise" and enjoys a preferential income tax rate of 15% for the three-year period from December 2022 to December 2025[134] Dividends The Board of Directors did not recommend the payment of any dividends during the reporting period - The Board of Directors did not recommend the payment of any dividends during the reporting period[136] Earnings/(Loss) Per Share Attributable to Ordinary Equity Holders of the Parent For the six months ended June 30, 2025, basic earnings per share attributable to ordinary equity holders of the parent was RMB 0.47, and diluted earnings per share was RMB 0.41, with the diluted impact primarily from share options granted under the share incentive scheme Earnings/(Loss) Per Share (For the six months ended June 30) | Metric | 2025 (RMB) | 2024 (RMB) | | :--- | :--- | :--- | | Basic Earnings/(Loss) Per Share | 0.47 | (13.71) | | Diluted Earnings/(Loss) Per Share | 0.41 | (13.71) | - The calculation of diluted profit per share for H1 2025 considered the dilutive effect of 38,130,318 shares related to share options granted under the share incentive scheme[137] - No diluted adjustment was made to basic loss per share for H1 2024, as unexercised share options had an anti-dilutive effect[137] Property, Plant and Equipment As of June 30, 2025, the net book value of property, plant and equipment was RMB 113.1 million, primarily comprising experiential vending machines, with RMB 4.0 million in additions and RMB 25.3 million in depreciation during the reporting period Net Book Value of Property, Plant and Equipment (As of June 30, 2025) | Item | Net Book Value (RMB '000) | | :--- | :--- | | Experiential Vending Machines | 112,572 | | Transportation Equipment | 491 | | Total | 113,063 | - Additions to property, plant and equipment amounted to RMB 4.0 million, and depreciation charged was RMB 25.3 million during the reporting period[140] - No impairment was recognized for property, plant and equipment during the reporting period[141] Prepayments, Deposits and Other Receivables As of June 30, 2025, current prepayments, deposits, and other receivables totaled RMB 178.3 million, and non-current totaled RMB 37.5 million, with the current portion mainly comprising prepayments and deposits and other receivables Prepayments, Deposits and Other Receivables (As of June 30, 2025) | Item | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | | :--- | :--- | :--- | | Current | | | | Prepayments | 126,695 | 187,347 | | Deposits and Other Receivables | 53,668 | 33,430 | | Provision for Expected Credit Losses | (2,064) | (3,563) | | Total Current | 178,299 | 218,085 | | Non-current | | | | Prepayments for Property, Plant and Equipment | 25,500 | 30,023 | | Deposits and Other Receivables | 12,000 | 12,000 | | Total Non-current | 37,500 | 42,023 | Trade Receivables As of June 30, 2025, net trade receivables were RMB 514.1 million, with credit terms generally ranging from three to six months, and the largest portion of receivables falling within six months Trade Receivables and Aging Analysis (As of June 30, 2025) | Item | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | | :--- | :--- | :--- | | Gross Trade Receivables | 571,096 | 564,004 | | Impairment | (57,008) | (53,996) | | Net | 514,088 | 510,008 | | Aging Analysis (Net of Loss Allowance) | | | | Within 6 months | 289,602 | 293,963 | | 6 to 12 months | 145,299 | 145,775 | | 1 to 2 years | 71,459 | 70,270 | | 2 to 3 years | 7,728 | – | - The Group's transaction terms with customers are primarily on credit, with credit periods generally ranging from three to six months[143] Trade Payables As of June 30, 2025, trade payables amounted to RMB 57.0 million, with settlement terms typically between 30 and 60 days Trade Payables (As of June 30, 2025) | Item | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | | :--- | :--- | :--- | | Within 1 year | 56,982 | 19,002 | - Trade payables are non-interest-bearing, with settlement terms typically between 30 and 60 days[145] Share Capital The company's authorized share capital is USD 50,000, divided into 5,000,000,000 ordinary shares of USD 0.00001 each, with 262,705,446 issued and fully paid ordinary shares amounting to RMB 18 thousand as of June 30, 2025 - The Company's authorized share capital is USD 50,000, divided into 5,000,000,000 ordinary shares of USD 0.00001 each[146] - On May 27, 2024, the Company issued 19,704,000 new shares and listed them, with all preference shares automatically converted into 138,640,077 ordinary shares[147] Issued and Fully Paid Ordinary Shares (As of June 30, 2025) | Item | Number of Ordinary Shares | Share Capital (RMB '000) | | :--- | :--- | :--- | | Ordinary Shares of USD 0.00001 each | 262,705,446 | 18 | Commitments As of June 30, 2025, the Group had capital commitments contracted but not provided for, amounting to RMB 15.0 million, primarily for the purchase of property, plant and equipment Capital Commitments (As of June 30, 2025) | Item | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | | :--- | :--- | :--- | | Purchase of Property, Plant and Equipment | 15,000 | 15,000 | | Total | 15,000 | 15,000 | Related Party Transactions For the six months ended June 30, 2025, neither the Group nor the Company had any outstanding balances with related parties - For the six months ended June 30, 2025, neither the Group nor the Company had any outstanding balances with related parties[150] Financial Instruments by Category As of June 30, 2025, the Group's total financial assets were RMB 2,109.5 million, with RMB 1,879.2 million measured at amortized cost and RMB 230.2 million at fair value through profit or loss; total financial liabilities were RMB 633.5 million, all measured at amortized cost Financial Assets (As of June 30, 2025) | Item | Financial Assets at Fair Value Through Profit or Loss (RMB '000) | Financial Assets at Amortized Cost (RMB '000) | Total (RMB '000) | | :--- | :--- | :--- | :--- | | Trade Receivables | – | 514,088 | 514,088 | | Cash and Bank Balances | – | 1,141,177 | 1,141,177 | | Financial Assets at Amortized Cost | – | 160,343 | 160,343 | | Financial Assets at Fair Value Through Profit or Loss | 230,240 | – | 230,240 | | Total | 230,240 | 1,879,212 | 2,109,452 | Financial Liabilities (As of June 30, 2025) | Item | Financial Liabilities at Amortized Cost (RMB '000) | | :--- | :--- | | Trade Payables | 56,982 | | Financial Liabilities Included in Other Payables and Accruals | 31,820 | | Interest-bearing Bank Borrowings | 544,690 | | Total | 633,492 | Fair Value and Fair Value Hierarchy of Financial Instruments Management assesses that the fair value of most current financial instruments approximates their carrying amounts, with assets measured at fair value primarily including listed investments (Level 1) and unlisted investments (Level 3), totaling RMB 230.2 million as of June 30, 2025 - Management assesses that the fair value of current portions of cash and cash equivalents, trade receivables, trade payables, and other similar financial instruments approximates their carrying amounts[153] Assets Measured at Fair Value (As of June 30, 2025) | Item | Level 1 (RMB '000) | Level 2 (RMB '000) | Level 3 (RMB '000) | Total (RMB '000) | | :--- | :--- | :--- | :--- | :--- | | Unlisted Investments | – | – | 4,000 | 4,000 | | Listed Investments | 226,240 | – | – | 226,240 | | Total | 226,240 | – | 4,000 | 230,240 | - As of June 30, 2025, there were no convertible redeemable preference shares, as they were automatically converted into ordinary shares upon listing[158] Events After Reporting Period The company completed the placement of 3,000,000 new shares at HKD 106.60 per share on July 23, 2025; no other significant post-reporting period events occurred after June 30, 2025 - The Company completed the placement of 3,000,000 new shares at a placement price of HKD 106.60 per placement share on July 23, 2025[160] - No other significant post-reporting period events occurred after June 30, 2025[160] Definitions This chapter provides definitions for key terms and abbreviations used throughout the report, ensuring clarity and consistent understanding of the content