中航科工(02357) - 2025 - 中期财报

Interim Results Overview The Group's unaudited interim results for the six months ended June 30, 2025, show revenue increased by 11.43% year-on-year to RMB 37.465 billion, but net profit attributable to owners of the parent company decreased by 17.67% year-on-year to RMB 1.03 billion, with the Board recommending no interim dividend payment Interim Results Overview for H1 2025 | Metric | Amount (RMB) | Y-o-Y Change | Notes | | :--- | :--- | :--- | :--- | | Revenue | 37.465 billion | +11.43% | Primarily driven by revenue growth from helicopter and aviation support system products | | Net profit attributable to owners of the parent company | 1.03 billion | -17.67% | Mainly due to a decrease in gross profit margin resulting from changes in revenue structure | | Earnings per share (basic and diluted) | 0.129 | -17.83% | | | Equity attributable to owners of the parent company | 34.341 billion | +0.56% (vs. end of 2024) | | | Interim dividend | Not distributed | - | Board recommends no distribution | Management Discussion and Analysis This section elaborates on the company's business performance, future development strategies, and financial position for the first half of 2025, highlighting a focus on high-quality development and strategic opportunities in the low-altitude economy despite a complex external environment Business Review In the first half of 2025, the Group focused on its development strategy, actively seized strategic opportunities in the low-altitude economy, steadily advanced its helicopter, trainer aircraft, aviation support systems, and aviation engineering services businesses, and continuously optimized its industrial layout and corporate governance system - The Group faced a complex and uncertain external environment in the first half of 2025, while China's economy remained generally stable and improving[8] - The company focused on its development strategy, seized strategic opportunities in the low-altitude economy, and is committed to leading technological innovation, advanced manufacturing, and open cooperation in the helicopter and low-altitude economy industries, continuously optimizing its industrial layout[8] - Helicopter business continuously enhanced core competitiveness, with the AC332 helicopter completing multiple test flights and airworthiness certification steadily progressing; AC series helicopters expanded application scenarios such as aerial tourism and urban management, promoting the systematization of aviation emergency rescue[8] - Aviation support systems and related businesses continued to promote the transformation of scientific and technological achievements, with AVIC Optoelectronics Civil Aircraft and Industrial Interconnection Industrial Park completed and put into operation, and multiple supporting products completing tests or first flights[9] - Aviation engineering services business developed steadily, focusing on the digital, intelligent, and green transformation and upgrading of survey and design businesses, and winning the bid for the civil aviation engine maintenance base project[11] Business Outlook Looking ahead to the second half of 2025, the company anticipates a complex and volatile international environment but will seize the low-altitude economy as a key area for fostering new productive forces through seven strategic initiatives to build a world-class aviation high-tech industrial group - In the second half of 2025, the international environment is complex and volatile, but the low-altitude economy is regarded as a key track for promoting high-quality economic development and fostering new productive forces in China[12] - The company will seize new development opportunities in the low-altitude economy, cultivate new competitive advantages, create new growth engines, and open up new industrial tracks, fully promoting the construction of a modern aviation industry system[12] - Strategic initiatives include actively planning the "15th Five-Year Plan" development, continuously optimizing industrial structure, cultivating and strengthening emerging industries, and laying out future industries[13] - Accelerate the industrial layout of the low-altitude economy, actively cooperate with local governments to establish application demonstration centers, promote deep integration of industry, academia, and research, and expand application scenarios[13] - Strengthen scientific and technological innovation, optimize the innovation ecosystem, and accelerate the transformation and application of scientific and technological achievements; enhance sustainable competitiveness, consolidate the leading advantages of airborne system businesses, and promote digital and intelligent transformation[13] Financial Review The Group achieved revenue of RMB 37.465 billion in the first half of 2025, a year-on-year increase of 11.43%, primarily due to revenue growth from helicopter and aviation support system products; however, net profit attributable to owners of the parent company decreased by 17.67% due to a decline in gross profit margin from changes in revenue structure, while liquidity remained ample and the gearing ratio at a reasonable level Revenue The Group's revenue for the first half of 2025 was RMB 37.465 billion, an increase of 11.43% compared to the same period last year, primarily driven by year-on-year growth in revenue from helicopter and aviation support system products Total Revenue Comparison | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | Y-o-Y Growth Rate | | :--- | :--- | :--- | :--- | | Revenue | 37,465 | 33,621 | 11.43% | Segment Information The Group's business is divided into three segments: Aviation Mainframes, Aviation Support Systems and Related Businesses, and Aviation Engineering Services; the Aviation Mainframes segment saw significant revenue growth and a substantial increase in segment profit, while Aviation Support Systems and Related Businesses experienced steady revenue growth but a decline in segment profit, and Aviation Engineering Services maintained stable revenue with a slight decrease in segment profit Revenue and Segment Profit Comparison by Business Segment (H1 2025 vs H1 2024) | Segment | H1 2025 Revenue (RMB billion) | H1 2024 Revenue (RMB billion) | Revenue Y-o-Y Growth Rate | Revenue Share | H1 2025 Segment Profit (RMB billion) | H1 2024 Segment Profit (RMB billion) | Segment Profit Y-o-Y Growth Rate | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Aviation Mainframes | 10.339 | 7.655 | 35.06% | 27.60% | 0.439 | 0.265 | 65.66% | | Aviation Support Systems and Related Businesses | 22.583 | 21.386 | 5.60% | 60.28% | 2.609 | 3.417 | -23.65% | | Aviation Engineering Services | 4.543 | 4.580 | -0.81% | 12.12% | 0.188 | 0.205 | -8.29% | - Revenue growth in the Aviation Mainframes segment was primarily due to an increase in helicopter product sales year-on-year; segment profit growth was mainly due to increased benefits from the VAT additional deduction policy[21][22] - The decline in segment profit for Aviation Support Systems and Related Businesses was mainly due to a year-on-year decrease in gross profit margin resulting from changes in product revenue structure[22] Gross Profit The Group's gross profit for the first half of 2025 was RMB 7.576 billion, a year-on-year decrease of 5.85%, with a comprehensive gross profit margin of 20.22%, down 3.71 percentage points from the same period last year, primarily due to changes in revenue structure Gross Profit and Gross Profit Margin Comparison | Metric | H1 2025 (RMB billion) | H1 2024 (RMB billion) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Gross profit | 7.576 | 8.047 | -5.85% | | Comprehensive gross profit margin | 20.22% | 23.93% | -3.71 percentage points | - The decrease in gross profit was mainly due to changes in revenue structure during the period, leading to a year-on-year decline in gross profit margin[23] Selling Expenses Selling expenses for the first half of 2025 were RMB 339 million, a year-on-year increase of 3.04%, primarily due to increased remuneration for sales personnel at some subsidiaries, while the proportion of selling expenses to revenue slightly decreased Selling Expenses Comparison | Metric | H1 2025 (RMB billion) | H1 2024 (RMB billion) | Y-o-Y Growth Rate | Share of Revenue (2025) | Share of Revenue (2024) | | :--- | :--- | :--- | :--- | :--- | :--- | | Selling expenses | 0.339 | 0.329 | 3.04% | 0.90% | 0.98% | - The increase in selling expenses was mainly due to a year-on-year increase in remuneration for sales personnel at some subsidiaries[24] Administrative Expenses Administrative expenses for the first half of 2025 were RMB 2.064 billion, a year-on-year decrease of 4.40%, primarily due to a decrease in equity incentive amortization expenses at AVIC Optoelectronics, resulting in a 0.91 percentage point decrease in the proportion of administrative expenses to revenue Administrative Expenses Comparison | Metric | H1 2025 (RMB billion) | H1 2024 (RMB billion) | Y-o-Y Change Rate | Share of Revenue (2025) | Share of Revenue (2024) | | :--- | :--- | :--- | :--- | :--- | :--- | | Administrative expenses | 2.064 | 2.159 | -4.40% | 5.51% | 6.42% | - The decrease in administrative expenses was mainly due to a year-on-year decrease in equity incentive amortization expenses at AVIC Optoelectronics, a subsidiary of the company, during the period[25] R&D Expenses R&D expenses for the first half of 2025 were RMB 2.170 billion, a year-on-year increase of 6.84%, primarily due to increased R&D investment by some subsidiaries, while the proportion of R&D expenses to revenue slightly decreased R&D Expenses Comparison | Metric | H1 2025 (RMB billion) | H1 2024 (RMB billion) | Y-o-Y Growth Rate | Share of Revenue (2025) | Share of Revenue (2024) | | :--- | :--- | :--- | :--- | :--- | :--- | | R&D expenses | 2.170 | 2.031 | 6.84% | 5.79% | 6.04% | - The increase in R&D expenses was mainly due to increased R&D investment by some subsidiaries during the period[26] Finance Costs Finance costs for the first half of 2025 were RMB -55 million, an increase of RMB 20 million compared to RMB -75 million in the same period last year, primarily due to decreased interest income from lower average cash balances and deposit rates, coupled with increased interest expenses from higher debt financing by some subsidiaries Finance Costs Comparison | Metric | H1 2025 (RMB billion) | H1 2024 (RMB billion) | Y-o-Y Change Rate | | :--- | :--- | :--- | :--- | | Finance costs | -0.055 | -0.075 | 26.67% | - The increase in finance costs was mainly due to a year-on-year decrease in interest income from lower average cash balances and deposit rates, while interest expenses increased due to higher debt financing by some subsidiaries[27] Net Profit Attributable to Owners of the Parent Company Net profit attributable to owners of the parent company for the first half of 2025 was RMB 1.03 billion, a year-on-year decrease of 17.67%, primarily impacted by a decline in gross profit margin due to changes in revenue structure Net Profit Attributable to Owners of the Parent Company Comparison | Metric | H1 2025 (RMB billion) | H1 2024 (RMB billion) | Y-o-Y Change Rate | | :--- | :--- | :--- | :--- | | Net profit attributable to owners of the parent company | 1.030 | 1.251 | -17.67% | - The decrease in net profit was mainly due to changes in revenue structure during the period, leading to a year-on-year decline in gross profit margin and a decrease in gross profit[28] Liquidity and Funding Sources As of June 30, 2025, the Group's cash and cash equivalents totaled RMB 30.390 billion, with total borrowings of RMB 19.196 billion, of which short-term borrowings accounted for a higher proportion; bank borrowings increased while other borrowings decreased Liquidity and Borrowings (As of June 30, 2025) | Metric | Amount (RMB billion) | Change from beginning of period | | :--- | :--- | :--- | | Cash and cash equivalents | 30.390 | Decrease | | Total borrowings | 19.196 | | | Short-term borrowings | 12.351 | | | Current portion of long-term borrowings | 2.596 | | | Non-current portion of long-term borrowings | 4.249 | | | Bank borrowings | 7.192 | Increase of 2.461 billion RMB | | Other borrowings | 12.004 | Decrease of 1.023 billion RMB | - The average interest rate for bank borrowings was 2.2%[29] Pledged and Mortgaged Assets As of June 30, 2025, the Group's total pledged and mortgaged borrowings amounted to RMB 199 million, primarily secured by buildings and pledged by notes receivable Pledged and Mortgaged Assets (As of June 30, 2025) | Borrowing Type | Amount (RMB billion) | Collateral/Pledge | Net Book Value (RMB billion) | | :--- | :--- | :--- | :--- | | Mortgaged borrowings | 0.092 | Buildings | 0.007 | | Pledged borrowings | 0.107 | Notes receivable | 0.107 | | Total | 0.199 | | | Gearing Ratio As of June 30, 2025, the Group's gearing ratio was 9.62%, an increase from 8.79% at the end of 2024 Gearing Ratio Comparison | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Gearing ratio | 9.62% | 8.79% | Exchange Rate Risk The Group primarily operates in China, with most transactions settled in RMB, involving exchange rate risks related to USD, EUR, and HKD, but the Board believes exchange rate risk will not have a material adverse effect on financial performance, and no foreign currency hedging instruments were used during the reporting period - The Group primarily conducts its business operations in China, with most transactions settled in RMB[32] - Assets, liabilities, and transactions arising from operations involving exchange rate risk are mainly related to USD, EUR, and HKD[32] - The Board believes that the Group's exchange rate risk will not have a material adverse effect on the Group's financial position[32] - During the reporting period, the Group did not use any foreign currency hedging instruments[33] Equity Disclosure and Other Information This chapter discloses changes in the company's directors, supervisors, and senior management, employee information, and compliance with the Model Code for Securities Transactions and Corporate Governance Code during the reporting period, detailing shareholdings of directors, supervisors, and major shareholders, and mentioning significant matters such as the equity transfer of AVIC Helicopter and the proposed issuance of exchangeable corporate bonds Changes in Directors, Supervisors, and Senior Management During the reporting period, Ms. Hu Shiwei ceased to be a member of the Audit and Risk Management Committee and was appointed as a member of the Nomination Committee; Mr. Zhou Xunwen was appointed as a member of the Audit and Risk Management Committee; and Mr. Xu Gang resigned as a non-executive director due to work arrangements - Ms. Hu Shiwei ceased to be a member of the Audit and Risk Management Committee and was appointed as a member of the Nomination Committee effective March 28, 2025[35] - Mr. Zhou Xunwen was appointed as a member of the Audit and Risk Management Committee[35] - Mr. Xu Gang resigned as a non-executive director of the company on May 20, 2025[35] Employees As of June 30, 2025, the Group had 75,142 employees; employee costs for the reporting period were RMB 6.669 billion, a slight year-on-year increase of 0.51%, with the company's remuneration policy and employee training programs consistent with those disclosed in the 2024 annual report Employees and Employee Costs Comparison | Metric | June 30, 2025 | H1 2024 (RMB billion) | Y-o-Y Growth Rate | | :--- | :--- | :--- | :--- | | Number of employees | 75,142 | | | | Employee costs | 6.669 billion | 6.635 billion | 0.51% | - The company's remuneration policy and employee training programs are consistent with the content disclosed in the 2024 annual report[37] Model Code for Securities Transactions by Directors and Supervisors The company has adopted the "Model Code for Securities Transactions by Directors of Listed Issuers" in Appendix C3 of the HKEX Listing Rules and its internal management measures, and all directors and supervisors confirmed compliance with the code during the reporting period after specific inquiries - The company has adopted Appendix C3 "Model Code for Securities Transactions by Directors of Listed Issuers" of the HKEX Listing Rules and the company's "Management Measures for Stock Trading by Directors, Supervisors, Senior Management, and Employees"[38] - Following specific inquiries, all directors and supervisors of the company confirmed their compliance with the Model Code for the six months ended June 30, 2025[38] Corporate Governance Code The company strictly implements applicable regulatory laws, regulations, and its Articles of Association, operating in a standardized manner, and the Board believes the company has complied with the principles and code provisions set out in Part 2 of Appendix C1 "Corporate Governance Code" of the Listing Rules - The company strictly implements various applicable regulatory laws, regulations, and its Articles of Association, operating in a standardized manner[39] - The Board believes that the company has complied with the principles and code provisions set out in Part 2 of Appendix C1 "Corporate Governance Code" of the Listing Rules[39] Interests of Directors, Supervisors, and Chief Executive in Securities of the Company and its Associated Corporations As of June 30, 2025, except for Directors Yan Lingxi and Zhou Xunwen holding a small number of H shares, no directors, supervisors, or the chief executive of the company held any disclosable interests or short positions in the securities of the company or its associated corporations Directors' Shareholdings (As of June 30, 2025) | Name | Share Type | Capacity | Number of Shares Held | Approximate Percentage of Issued Share Capital | Nature of Interest | | :--- | :--- | :--- | :--- | :--- | :--- | | Yan Lingxi (Director) | H shares | Beneficial owner | 267,740 | 0.003% | Long position | | Zhou Xunwen (Director) | H shares | Beneficial owner | 66,966 | 0.0008% | Long position | - Except for those disclosed above, no directors, supervisors, or the chief executive of the company held any disclosable interests or short positions in the shares, underlying shares, and/or debentures of the company and/or any of its associated corporations[40] Major Shareholders' Shareholdings As of June 30, 2025, Aviation Industry Corporation of China remained the company's largest shareholder, holding 56.40% of H shares and 70.99% of domestic shares; National Military-Civil Fusion Industry Investment Fund and Tianjin Free Trade Zone Investment Co., Ltd. were also major domestic share shareholders Major Shareholders' Shareholdings (As of June 30, 2025) | Shareholder Name | Share Type | Capacity | Number of Shares | Approximate Percentage of Issued Share Type | Nature of Interest | | :--- | :--- | :--- | :--- | :--- | :--- | | Aviation Industry Corporation of China | H shares | Beneficial owner; controlled corporation interest | 3,503,070,569 | 56.40% | Long position | | Aviation Industry Corporation of China | Domestic shares | Beneficial owner | 1,250,899,906 | 70.99% | Long position | | National Military-Civil Fusion Industry Investment Fund Co., Ltd. | Domestic shares | Beneficial owner | 261,522,000 | 14.84% | Long position | | Tianjin Free Trade Zone Investment Co., Ltd. | Domestic shares | Beneficial owner | 249,769,500 | 14.17% | Long position | - Aviation Industry Corporation of China holds H shares directly and indirectly through wholly-owned/non-wholly-owned subsidiaries[44] - The issuance of domestic shares to the National Industry Investment Fund was completed on July 3, 2023[44] Audit and Risk Management Committee The Audit and Risk Management Committee is responsible for overseeing the company's financial operations, audit procedures, and risk management, and has reviewed the Group's unaudited interim consolidated financial statements for the six months ended June 30, 2025 - The Audit and Risk Management Committee assists the Board in independently overseeing the company's financial operations, audit procedures, and risk management work[45] - The Committee has reviewed the Group's unaudited interim consolidated financial statements for the six months ended June 30, 2025[46] Other Matters In March 2025, the company completed the acquisition of a 2.34% A-share stake in AVIC Helicopter held by Harbin Aircraft Industry Group, increasing its direct shareholding to 50.90%; additionally, the Board proposed a non-public issuance of exchangeable corporate bonds not exceeding RMB 1 billion, with a portion of AVIC Helicopter's A-shares as underlying assets, to supplement working capital, expecting AVIC Helicopter to remain a non-wholly-owned subsidiary after conversion - In March 2025, the company completed the acquisition of 19,186,952 A-shares of AVIC Helicopter (accounting for 2.34% of total share capital) held by Harbin Aircraft Industry Group, increasing its direct shareholding to 50.90%[47] - The Board proposed a non-public issuance of exchangeable corporate bonds not exceeding RMB 1 billion, with a portion of the company's A-shares in AVIC Helicopter as underlying assets[48] - The raised funds are intended to supplement working capital, and AVIC Helicopter is expected to remain a non-wholly-owned subsidiary of the company after the full conversion of the exchangeable corporate bonds[48] Purchase, Sale, and Redemption of Listed Securities For the six months ended June 30, 2025, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities, and the company held no treasury shares - For the six months ended June 30, 2025, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities[49] - As of June 30, 2025, the company held no treasury shares[50] Consolidated Statement of Financial Position As of June 30, 2025, the Group's total consolidated assets amounted to RMB 199.532 billion, a slight decrease from the end of 2024, with total current assets of RMB 155.572 billion and total non-current assets of RMB 43.960 billion; total liabilities were RMB 101.789 billion, and total shareholders' equity was RMB 97.743 billion Consolidated Statement of Financial Position Key Data (As of June 30, 2025 vs December 31, 2024) | Item | June 30, 2025 (RMB) | December 31, 2024 (RMB) | Change | | :--- | :--- | :--- | :--- | | Total assets | 199,532,381,277 | 202,044,106,950 | -1.24% | | Total current assets | 155,572,331,818 | 158,761,363,942 | -2.01% | | Total non-current assets | 43,960,049,459 | 43,282,743,008 | +1.56% | | Total liabilities | 101,789,243,680 | 105,395,895,072 | -3.33% | | Total shareholders' equity | 97,743,137,597 | 96,648,211,878 | +1.13% | | Total equity attributable to owners of the parent company | 34,340,655,830 | 34,147,967,680 | +0.56% | - Cash and bank balances decreased from RMB 41.322 billion at the beginning of the period to RMB 32.144 billion[51] - Accounts receivable increased from RMB 48.629 billion at the beginning of the period to RMB 55.993 billion[51] - Short-term borrowings increased from RMB 9.346 billion at the beginning of the period to RMB 11.982 billion[53] Company Statement of Financial Position As of June 30, 2025, the company's (parent company) total assets amounted to RMB 18.880 billion, a slight increase from the end of 2024, with total current assets of RMB 1.810 billion and total non-current assets of RMB 17.069 billion; total liabilities were RMB 256 million, and total shareholders' equity was RMB 18.624 billion Company Statement of Financial Position Key Data (As of June 30, 2025 vs December 31, 2024) | Item | June 30, 2025 (RMB) | December 31, 2024 (RMB) | Change | | :--- | :--- | :--- | :--- | | Total assets | 18,879,621,498 | 18,654,161,377 | +1.21% | | Total current assets | 1,810,322,718 | 2,381,586,163 | -23.90% | | Total non-current assets | 17,069,298,780 | 16,272,575,214 | +4.90% | | Total liabilities | 255,707,664 | 360,497,811 | -29.07% | | Total shareholders' equity | 18,623,913,834 | 18,293,663,566 | +1.80% | - Long-term equity investments increased from RMB 14.119 billion at the beginning of the period to RMB 14.873 billion[55] - Total current liabilities decreased from RMB 158 million at the beginning of the period to RMB 36 million[57] Consolidated Statement of Comprehensive Income The Group's consolidated total operating revenue for the first half of 2025 was RMB 37.465 billion, a year-on-year increase of 11.43%; however, both operating profit and net profit decreased, with net profit attributable to owners of the parent company at RMB 1.03 billion, a year-on-year decrease of 17.67%, and basic and diluted earnings per share both at RMB 0.129 Consolidated Statement of Comprehensive Income Key Data (H1 2025 vs H1 2024) | Item | H1 2025 (RMB) | H1 2024 (RMB) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Total operating revenue | 37,465,251,870 | 33,621,275,690 | +11.43% | | Total operating costs | 34,711,799,167 | 30,226,289,082 | +14.84% | | Operating profit | 3,108,402,127 | 3,714,093,919 | -16.31% | | Total profit | 3,099,033,323 | 3,729,155,935 | -16.90% | | Net profit | 2,806,659,099 | 3,389,919,066 | -17.19% | | Net profit attributable to owners of the parent company | 1,030,426,079 | 1,251,336,293 | -17.67% | | Basic earnings per share (RMB/share) | 0.129 | 0.157 | -17.83% | - Operating costs increased by 16.87% year-on-year, and taxes and surcharges increased by 46.08% year-on-year[60] - Other income increased by 54.33% year-on-year, and investment income increased by 16.53% year-on-year[60] - Credit impairment losses and asset impairment losses both increased, negatively impacting profit[60] Company Statement of Comprehensive Income The company's (parent company) operating revenue for the first half of 2025 was RMB 309,800, an increase from the same period last year; net profit was RMB 923 million, a year-on-year increase of 13.09%, with investment income being the primary source of the company's profit Company Statement of Comprehensive Income Key Data (H1 2025 vs H1 2024) | Item | H1 2025 (RMB) | H1 2024 (RMB) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Operating revenue | 309,791 | 154,895 | +100.00% | | Operating profit | 921,972,372 | 805,251,454 | +14.49% | | Net profit | 922,999,572 | 816,119,535 | +13.09% | - Investment income was RMB 920 million, a year-on-year increase of 13.82%, making it the main contributor to the company's profit[63] - Finance costs were negative, primarily due to high interest income[63] Consolidated Statement of Cash Flows The Group's net cash flow from operating activities for the first half of 2025 was RMB -7.217 billion, an improvement from RMB -10.209 billion in the same period last year; net cash flow from investing activities was RMB -880 million, and net cash flow from financing activities was RMB -875 million, with cash and cash equivalents balance at period-end of RMB 30.390 billion Consolidated Statement of Cash Flows Key Data (H1 2025 vs H1 2024) | Item | H1 2025 (RMB) | H1 2024 (RMB) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Subtotal of cash inflows from operating activities | 33,152,270,044 | 28,834,690,945 | +14.94% | | Subtotal of cash outflows from operating activities | 40,368,883,985 | 39,043,815,329 | +3.40% | | Net cash flow from operating activities | -7,216,613,941 | -10,209,124,384 | Improved by 29.31% | | Net cash flow from investing activities | -880,037,092 | -2,304,649,891 | Improved by 61.82% | | Net cash flow from financing activities | -875,249,793 | 2,340,475,130 | Turned to net outflow | | Net increase in cash and cash equivalents | -8,962,423,450 | -10,169,383,731 | Improved by 11.87% | | Cash and cash equivalents at period-end | 30,390,151,848 | 27,010,503,644 | +12.51% | - Cash received from sales of goods and rendering of services increased by 16.55% year-on-year[65] - Net cash flow from financing activities turned from positive to negative, mainly due to a significant increase in cash paid for debt repayment[66] Company Statement of Cash Flows The company's (parent company) net cash flow from operating activities for the first half of 2025 was RMB -138 million, a deterioration from RMB -57 million in the same period last year; net cash flow from investing activities was RMB 453 million, and net cash flow from financing activities was RMB -634 million, with cash and cash equivalents balance at period-end of RMB 766 million Company Statement of Cash Flows Key Data (H1 2025 vs H1 2024) | Item | H1 2025 (RMB) | H1 2024 (RMB) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Net cash flow from operating activities | -138,164,441 | -56,893,721 | Deteriorated by 142.84% | | Net cash flow from investing activities | 452,550,171 | 380,390,032 | +19.00% | | Net cash flow from financing activities | -633,944,029 | -682,125,218 | Improved by 7.06% | | Cash and cash equivalents at period-end | 765,955,534 | 722,745,751 | +5.98% | - Cash inflows from investing activities primarily came from recovery of investments and investment income[68] - Cash outflows from financing activities were mainly for distribution of dividends, profits, or payment of interest[69] Consolidated Statement of Changes in Equity The Group's total consolidated shareholders' equity for the first half of 2025 amounted to RMB 97.743 billion, an increase of 1.13% from the beginning of the period; total equity attributable to owners of the parent company was RMB 34.341 billion, an increase of 0.56% from the beginning of the period, with total comprehensive income of RMB 3.050 billion, of which RMB 1.112 billion was attributable to owners of the parent company Consolidated Statement of Changes in Equity Key Data (H1 2025) | Item | Balance at beginning of period (RMB) | Change during the period (RMB) | Balance at end of period (RMB) | | :--- | :--- | :--- | :--- | | Total shareholders' equity | 96,648,211,878 | 1,094,925,719 | 97,743,137,597 | | Total equity attributable to owners of the parent company | 34,147,967,680 | 192,688,150 | 34,340,655,830 | | Total comprehensive income | | 3,050,464,979 | | | Total comprehensive income attributable to owners of the parent company | | 1,111,702,889 | | - Capital contributions and reductions by shareholders during the period led to a decrease of RMB 379 million in equity attributable to owners of the parent company[70] - Profit distribution led to a decrease of RMB 646 million in equity attributable to owners of the parent company[70] Company Statement of Changes in Equity The company's (parent company) total shareholders' equity for the first half of 2025 amounted to RMB 18.624 billion, an increase of 1.80% from the beginning of the period; total comprehensive income was RMB 974 million, and profit distribution led to a decrease of RMB 646 million in shareholders' equity Company Statement of Changes in Equity Key Data (H1 2025) | Item | Balance at beginning of period (RMB) | Change during the period (RMB) | Balance at end of period (RMB) | | :--- | :--- | :--- | :--- | | Total shareholders' equity | 18,293,663,565 | 330,044,884 | 18,623,708,449 | | Total comprehensive income | | 974,088,510 | | | Profit distribution | | -645,801,194 | | - Other comprehensive income increased by RMB 51.0889 million during the period[73] Notes to the Financial Statements This chapter provides detailed notes to the Group's financial statements, covering the company's basic information, basis of financial statement preparation, significant accounting policies and estimates, notes to major items in the consolidated financial statements, changes in consolidation scope, fair value disclosures, related parties and related party transactions, contingent liabilities, commitments, post-balance sheet events, and segment information, offering essential context and details for understanding the financial data Basic Information of the Company AVIC International Holding Corporation was registered in Beijing on April 30, 2003, and listed on the Hong Kong Stock Exchange in October of the same year; the company's registered capital is RMB 7,972,854,242, primarily engaged in R&D, production, and sales of aviation products, and providing aviation engineering services, with Aviation Industry Corporation of China as both the controlling shareholder and ultimate controlling party - The company was registered in Beijing on April 30, 2003, and listed on the Hong Kong Stock Exchange on October 30, 2003[76] - The company's registered capital is RMB 7,972,854,242[76] - The Group's main business activities are: research, development, production, and sales of aviation products, as well as providing aviation engineering planning, design, consulting, construction, and operation services[80] - The company's controlling shareholder is Aviation Industry Corporation of China, which is also the ultimate controlling party[81] Basis of Financial Statement Preparation These financial statements are prepared on a going concern basis in accordance with China's Accounting Standards for Business Enterprises and relevant regulations, and are measured at historical cost, except for certain financial instruments measured at fair value; management has assessed the going concern ability for the next 12 months and considers the basis of preparation reasonable - These financial statements are prepared on a going concern basis, in accordance with the Accounting Standards for Business Enterprises issued by the Ministry of Finance and relevant regulations, based on actual transactions and events[83] - In preparing the financial statements, the Group has fully assessed its ability to continue as a going concern for the next 12 months from the balance sheet date and considers the preparation on a going concern basis to be reasonable[83] Significant Accounting Policies and Accounting Estimates The Group's financial statements adhere to Accounting Standards for Business Enterprises and adopt the historical cost measurement principle, with exceptions for certain financial instruments; the accounting policies for the current period are consistent with those disclosed in the 2024 annual consolidated financial statements, and major taxes include VAT, urban maintenance and construction tax, education surcharge, and corporate income tax, subject to different rates - The Group's financial statements are measured at historical cost, except for certain financial instruments measured at fair value[84] - The accounting policies used in preparing the Group's interim consolidated financial statements for the six months ended June 30, 2025, are consistent with those followed in preparing the Group's annual consolidated financial statements for the year ended December 31, 2024[85] Major Taxes and Tax Rates | Tax Type | Tax Rate (%) | | :--- | :--- | | Value-added tax | 13, 9, 6, 5, 3, 0 | | Urban maintenance and construction tax | 7, 5 | | Education surcharge | 3 | | Local education surcharge | 2 | | Corporate income tax | 25, 20, 15 | | Property tax | 12, 1.2 | | Hong Kong profits tax | 16.5 | | Macau income tax | 0-12 | | Other countries/regions profits tax | 20-31.925 | Notes to Major Items in Consolidated Financial Statements This section provides detailed notes to major items in the consolidated financial statements, including cash and bank balances, various receivables and payables, inventories, contract assets, long-term equity investments, fixed assets, intangible assets, borrowings, share capital, and various profit and loss expenses; relevant financial data for the prior year's corresponding period has been restated due to adjustments in consolidation scope and interpretations of accounting standards Cash and Bank Balances As of June 30, 2025, the Group's total cash and bank balances amounted to RMB 32.144 billion, a decrease from RMB 41.322 billion at the end of 2024, with bank deposits accounting for the vast majority, and funds deposited with AVIC Finance Company totaling RMB 23.296 billion Cash and Bank Balances Composition (As of June 30, 2025 vs December 31, 2024) | Item | June 30, 2025 (RMB) | December 31, 2024 (RMB) | | :--- | :--- | :--- | | Cash on hand | 314,612 | 320,567 | | Bank deposits | 31,895,112,756 | 40,984,056,624 | | Other cash and bank balances | 248,604,982 | 337,766,598 | | Total | 32,144,032,350 | 41,322,143,789 | | Of which: Funds deposited with AVIC Finance Company | 23,296,242,777 | 28,971,478,262 | - The Group's funds deposited overseas are not subject to repatriation restrictions[89] Financial Assets Held for Trading As of June 30, 2025, the Group's total financial assets held for trading amounted to RMB 2.527 billion, a decrease from RMB 3.311 billion at the end of 2024, primarily comprising bank wealth management products and equity instrument investments Financial Assets Held for Trading Composition (As of June 30, 2025 vs December 31, 2024) | Item | June 30, 2025 (RMB) | December 31, 2024 (RMB) | | :--- | :--- | :--- | | Financial assets measured at fair value through profit or loss | 2,527,371,647 | 3,310,715,928 | | Of which: Equity instrument investments | 27,371,647 | 24,462,750 | | Bank wealth management | 2,500,000,000 | 3,286,253,178 | - Equity instrument investments primarily consist of fund products and equity investments in other companies, while bank wealth management amounts are all structured deposits[90] Notes Receivable As of June 30, 2025, the Group's total notes receivable amounted to RMB 5.047 billion, a significant decrease from RMB 10.584 billion at the end of 2024, with both bank acceptance bills and commercial acceptance bills showing a notable decline; a bad debt provision of RMB -75.5069 million was made during the period Notes Receivable Classification (As of June 30, 2025 vs December 31, 2024) | Item | June 30, 2025 (RMB) | December 31, 2024 (RMB) | | :--- | :--- | :--- | | Bank acceptance bills | 2,119,586,968 | 3,322,807,413 | | Commercial acceptance bills | 2,927,602,938 | 7,261,055,840 | | Total | 5,047,189,906 | 10,583,863,253 | Pledged Notes Receivable (As of June 30, 2025) | Item | Pledged Amount (RMB) | | :--- | :--- | | Bank acceptance bills | 737,059,477 | | Commercial acceptance bills | 228,325,994 | | Total | 965,385,471 | - A bad debt provision of RMB -75,506,904 was made for notes receivable during the period[96] Accounts Receivable As of June 30, 2025, the Group's net accounts receivable amounted to RMB 55.993 billion, an increase from RMB 48.629 billion at the end of 2024, with total bad debt provisions amounting to RMB 2.449 billion, with RMB 361 million provided during the period, and accounts receivable within 1 year having the highest proportion Net Accounts Receivable and Impairment Provisions (As of June 30, 2025 vs December 31, 2024) | Item | June 30, 2025 (RMB) | December 31, 2024 (RMB) | | :--- | :--- | :--- | | Accounts receivable | 58,442,055,658 | 50,720,744,268 | | Less: Impairment provisions | 2,449,197,665 | 2,091,284,734 | | Net accounts receivable | 55,992,857,993 | 48,629,459,534 | Accounts Receivable by Age (As of June 30, 2025) | Age | Book Balance (RMB) | Bad Debt Provision (RMB) | Provision Rate (%) | | :--- | :--- | :--- | :--- | | Within 1 year (inclusive) | 47,210,152,619 | 423,943,431 | 0.90 | | 1-2 years | 8,512,376,131 | 686,684,728 | 8.07 | | 2-3 years | 1,366,818,161 | 433,966,307 | 31.75 | | Over 3 years | 1,099,398,336 | 652,202,307 | 59.32 | - A bad debt provision of RMB 360,535,328 was made for accounts receivable during the period, and RMB 2,424,669 was actually written off[103] Prepayments As of June 30, 2025, the Group's total prepayments amounted to RMB 6.249 billion, a decrease from RMB 6.663 billion at the end of 2024, with prepayments aged over 3 years accounting for the highest proportion at 55.43%, primarily due to incomplete contract settlements Prepayments Age Distribution (As of June 30, 2025 vs December 31, 2024) | Item | June 30, 2025 (RMB) | Proportion (%) | December 31, 2024 (RMB) | Proportion (%) | | :--- | :--- | :--- | :--- | :--- | | Within 1 year (inclusive) | 2,199,689,658 | 35.20 | 2,694,717,336 | 40.44 | | 1-2 years | 495,204,217 | 7.92 | 439,716,028 | 6.60 | | 2-3 years | 90,561,344 | 1.45 | 153,102,460 | 2.30 | | Over 3 years | 3,463,910,725 | 55.43 | 3,375,421,598 | 50.66 | | Total | 6,249,365,944 | 100.00 | 6,662,957,422 | 100.00 | - Prepayments aged over 1 year and significant in amount were not settled in time, mainly because contracts had not yet been fully settled[106] Other Receivables As of June 30, 2025, the Group's total other receivables amounted to RMB 478 million, an increase from RMB 429 million at the end of 2024, including dividends receivable of RMB 19.8196 million and net other receivables of RMB 458 million; a bad debt provision of RMB 10.2435 million was made during the period Other Receivables Composition (As of June 30, 2025 vs December 31, 2024) | Item | June 30, 2025 (RMB) | December 31, 2024 (RMB) | | :--- | :--- | :--- | | Dividends receivable | 19,819,575 | 10,756,337 | | Other receivables | 457,761,247 | 418,440,558 | | Total | 477,580,822 | 429,196,895 | Other Receivables by Nature of Payment (As of June 30, 2025) | Nature of Payment | Amount (RMB) | | :--- | :--- | | Current accounts | 310,482,648 | | Deposits, guarantees | 123,455,791 | | Petty cash and personal loans | 28,880,381 | | Payments collected/paid on behalf (advances) | 43,352,910 | | Equipment engineering payments | 2,000,000 | | Other | 58,476,526 | | Total | 566,648,256 | - A bad debt provision of RMB 10,243,492 was made for other receivables during the period, and RMB 3,500,800 was written off[118] Inventories As of June 30, 2025, the Group's inventories had a book value of RMB 40.906 billion, an increase from RMB 37.808 billion at the end of 2024, with raw materials, work-in-progress, and finished goods being the main components; total impairment provisions for inventories and contract costs amounted to RMB 1.310 billion Inventories Composition and Impairment Provisions (As of June 30, 2025 vs December 31, 2024) | Item | June 30, 2025 Book Value (RMB) | December 31, 2024 Book Value (RMB) | | :--- | :--- | :--- | | Raw materials | 12,748,098,405 | 13,207,506,719 | | Work-in-progress | 18,904,991,446 | 15,523,556,474 | | Finished goods | 7,284,996,858 | 6,657,438,619 | | Revolving materials | 634,836,091 | 634,987,134 | | Contract costs | 123,465,689 | 73,727,125 | | Other | 1,209,326,917 | 1,710,478,632 | | Total | 40,905,715,406 | 37,807,694,703 | | Total impairment provisions for inventories/contract costs | 1,309,738,361 | 1,264,929,378 | Contract Assets As of June 30, 2025, the Group's contract assets had a book value of RMB 9.989 billion, an increase from RMB 8.157 billion at the end of 2024, with Aviation Mainframes, Aviation Engineering Services, and Aviation Support Systems and Related Businesses being the main components; an impairment provision of RMB 10.2416 million was made for contract assets during the period Contract Assets Composition and Impairment Provisions (As of June 30, 2025 vs December 31, 2024) | Item | June 30, 2025 Book Value (RMB) | December 31, 2024 Book Value (RMB) | | :--- | :--- | :--- | | Aviation Mainframes | 4,237,121,500 | 3,289,175,501 | | Aviation Engineering Services | 4,240,773,695 | 3,634,883,277 | | Aviation Support Systems and Related Businesses | 1,511,370,479 | 1,233,126,851 | | Total | 9,989,265,674 | 8,157,185,629 | | Total impairment provisions | 123,398,867 | 113,157,291 | - An impairment provision of RMB 10,241,576 was made for contract assets during the period[122] - The change in the book value of contract assets was mainly due to contract performance[123] Long-term Equity Investments As of June 30, 2025, the Group's total long-term equity investments amounted to RMB 2.890 billion, an increase from RMB 2.820 billion at the end of 2024, primarily comprising investments in joint ventures and associates, with investment income recognized under the equity method totaling RMB 134 million during the period Long-term Equity Investments Key Data (As of June 30, 2025 vs December 31, 2024) | Item | June 30, 2025 (RMB) | December 31, 2024 (RMB) | | :--- | :--- | :--- | | Joint ventures | 470,531,486 | 436,304,521 | | Associates | 2,064,900,000 | 2,028,668,297 | | Equity split share circulation rights | 354,739,885 | 354,739,885 | | Total | 2,890,168,349 | 2,819,712,703 | - Investment income recognized under the equity method during the period was RMB 134,484,683[124] Other Equity Instrument Investments As of June 30, 2025, the Group's total other equity instrument investments amounted to RMB 4.652 billion, an increase from RMB 4.363 billion at the end of 2024, primarily comprising equity investments in AVIC Shenyang Aircraft, AVIC Chengdu Aircraft, Beijing AVIC Phase I Aviation Industry Investment Fund, and other companies Other Equity Instrument Investments Key Composition (As of June 30, 2025) | Item | Amount (RMB) | | :--- | :--- | | AVIC Shenyang Aircraft Corporation Limited | 1,373,308,443 | | AVIC Chengdu Aircraft Industrial (Group) Co., Ltd. | 619,412,777 | | Beijing AVIC Phase I Aviation Industry Investment Fund (Limited Partnership) | 559,610,760 | | AVIC Industrial Financial Holdings Co., Ltd. | 464,239,634 | | Harbin Dongan Engine Manufacturing Co., Ltd. | 425,400,000 | | AVIC Heavy Machinery Co., Ltd. | 277,045,718 | | Sichuan Chengfei Integration Technology Corp., Ltd. | 131,119,733 | | Other | 801,132,180 | | Total | 4,651,849,445 | - Dividend income recognized during the period was RMB 19,306,501[126] - Cumulative gains amounted to RMB 2.436 billion, and cumulative losses amounted to RMB 237 million[126] Investment Properties As of June 30, 2025, the Group's investment properties measured using the cost model had a book value of RMB 447 million, a slight decrease from RMB 460 million at the end of 2024, with additions of RMB 8.5775 million and disposals of RMB 11.7177 million during the period Investment Properties Book Value (As of June 30, 2025 vs December 31, 2024) | Item | June 30, 2025 (RMB) | December 31, 2024 (RMB) | | :--- | :--- | :--- | | Buildings | 370,213,477 | 386,351,035 | | Land use rights | 76,986,708 | 73,342,487 | | Total | 447,200,185 | 459,693,522 | - The original cost of investment properties increased by RMB 8,577,458 and decreased by RMB 11,717,670 during the period[127] Fixed Assets As of June 30, 2025, the Group's fixed assets had a book value of RMB 25.429 billion, an increase from RMB 25.036 billion at the end of 2024, with buildings and machinery being the main components; the original cost of fixed assets increased by RMB 1.795 billion and decreased by RMB 208 million during the period Fixed Assets Book Value (As of June 30, 2025 vs December 31, 2024) | Item | June 30, 2025 (RMB) | December 31, 2024 (RMB) | | :--- | :--- | :--- | | Buildings | 14,330,205,455 | 13,810,458,022 | | Machinery and equipment | 8,659,848,336 | 8,684,422,176 | | Transportation vehicles | 67,813,978 | 71,778,016 | | Electronic equipment | 1,191,839,429 | 1,250,853,787 | | Office equipment | 57,915,746 | 67,351,361 | | Other | 1,121,709,631 | 1,151,061,661 | | Total | 25,429,332,575 | 25,035,925,023 | - The original cost of fixed assets increased by RMB 1,795,325,128 and decreased by RMB 207,526,965 during the period[129] - Accumulated depreciation increased by RMB 1,350,247,701 during the period[129] Construction in Progress As of June 30, 2025, the Group's construction in progress had a book value of RMB 4.208 billion, a slight decrease from RMB 4.240 billion at the end of 2024; major projects include the high-end interconnection technology industrial community project, infrastructure renovation projects, and self-manufactured equipment; construction in progress increased by RMB 862 million and transferred to fixed assets by RMB 1.125 billion during the period Construction in Progress Book Value (As of June 30, 2025 vs December 31, 2024) | Item | June 30, 2025 (RMB) | December 31, 2024 (RMB) | | :--- | :--- | :--- | | Construction in progress | 4,208,403,816 | 4,240,450,534 | | Total | 4,208,403,816 | 4,240,450,534 | Major Construction in Progress Project Changes (H1 2025) | Project Name | December 31, 2024 (RMB) | Increase during the period (RMB) | Transferred to fixed assets (RMB) | June 30, 2025 (RMB) | | :--- | :--- | :--- | :--- | :--- | | High-end Interconnection Technology Industrial Community Project | 817,477,072 | 174,478,717 | 2,128,390 | 989,827,399 | | Infrastructure Renovation Project | 275,008,017 | 57,772,746 | 20,772,491 | 312,004,677 | | Self-manufactured Equipment | 199,711,213 | 147,718,082 | 82,790,180 | 264,639,115 | | Civil Aircraft and Industrial Interconnection Industrial Park | 557,531,314 | 247,590,857 | 770,791,054 | 34,331,117 | - Construction in progress increased by RMB 861,816,452 and transferred to fixed assets by RMB 1,124,990,593 during the period[134] Right-of-Use Assets As of June 30, 2025, the Group's right-of-use assets had a book value of RMB 443 million, a decrease from RMB 478 million at the end of 2024, primarily comprising buildings and machinery and equipment Right-of-Use Assets Book Value (As of June 30, 2025 vs December 31, 2024) | Item | June 30, 2025 (RMB) | December 31, 2024 (RMB) | | :--- | :--- | :--- | | Buildings | 406,834,203 | 449,496,669 | | Machinery and equipment | 36,545,360 | 28,831,718 | | Total | 443,379,563 | 478,328,387 | - The original cost of right-of-use assets increased by RMB 26,254,859 and decreased by RMB 33,446,385 during the period[135] Intangible Assets As of June 30, 2025, the Group's intangible assets had a book value of RMB 3.932 billion, a slight decrease from RMB 4.020 billion at the end of 2024, primarily comprising land use rights, software, and non-patent technologies; the original cost of intangible assets increased by RMB 81.3114 million and decreased by RMB 8.8895 million during the period Intangible Assets Book Value (As of June 30, 2025 vs December 31, 2024) | Item | June 30, 2025 (RMB) | December 31, 2024 (RMB) | | :--- | :--- | :--- | | Software | 807,995,692 | 855,830,065 | | Land use rights | 3,007,561,902 | 3,033,612,276 | | Patent rights | 2,792,962 | 7,062,797 | | Non-patent technologies | 113,449,082 | 123,121,047 | | Customer resources, sales channels | 36,200 | 36,200 | | Total | 3,931,835,838 | 4,019,662,385 | - The original cost of intangible assets increased by RMB 81,311,356 and decreased by RMB 8,889,534 during the period[136] - The Group had no intangible assets formed through internal R&D at the end of the period[136] Short-term Borrowings As of June 30, 2025, the Group's total short-term borrowings amounted to RMB 11.982 billion, an increase from RMB 9.346 billion at the end of 2024, with credit borrowings accounting for the vast majority Short-term Borrowings Categories (As of June 30, 2025 vs December 31, 2024) | Borrowing Category | June 30, 2025 (RMB) | December 31, 2024 (RMB) | | :--- | :--- | :--- | | Credit borrowings | 11,874,460,026 | 9,031,171,658 | | Pledged borrowings | 107,754,638 | 315,116,499 | | Total | 11,982,214,664 | 9,346,288,157 | Notes Payable As of June 30, 2025, the Group's total notes payable amounted to RMB 10.979 billion, a decrease from RMB 12.623 billion at the end of 2024, with both bank acceptance bills and commercial acceptance bills showing a decline Notes Payable Types (As of June 30, 2025 vs December 31, 2024) | Note Type | June 30, 2025 (RMB) | December 31, 2024 (RMB) | | :--- | :--- | :--- | | Bank acceptance bills | 6,763,460,671 | 7,622,243,602 | | Commercial acceptance bills | 4,215,576,894 | 5,001,034,545 | | Total | 10,979,037,565 | 12,623,278,147 | Accounts Payable As of June 30, 2025, the Group's total accounts payable amounted to RMB 50.389 billion, an increase from RMB 45.902 billion at the end of 2024, with payables for materials accounting for the highest proportion, and accounts payable within 1 year accounting for the vast majority Accounts Payable Composition (As of June 30, 2025 vs December 31, 2024) | Item | June 30, 2025 (RMB) | December 31, 2024 (RMB) | | :--- | :--- | :--- | | Payables for materials | 42,399,500,901 | 38,932,470,839 | | Payables for engineering | 5,417,182,653 | 3,976,416,871 | | Payables for equipment | 788,282,864 | 1,187,299,654 | | Other | 1,784,517,199 | 1,806,005,885 | | Total | 50,389,483,617 | 45,902,193,249 | Accounts Payable Age Distribution (As of June 30, 2025) | Age | Amount (RMB) | | :--- | :--- | | Within 1 year (inclusive) | 40,112,956,430 | | 1-2 years | 7,384,310,403 | | 2-3 years | 1,489,843,586 | | Over 3 years | 1,402,373,198 | | Total | 50,389,483,617 | Contract Liabilities As of June 30, 2025, the Group's total contract liabilities amounted to RMB 11.556 billion, a decrease from RMB 15.778 billion at the end of 2024, with Aviation Support Systems and Related Businesses and Aviation Mainframes being the main components; the decrease in contract liabilities was primarily due to gradual order deliveries Contract Liabilities Composition (As of June 30, 2025 vs December 31, 2024) | Item | June 30, 2025 (RMB) | December 31, 2024 (RMB) | | :--- | :--- | :--- | | Aviation Mainframes | 4,053,698,521 | 6,063,237,084 | | Aviation Support Systems and Related Businesses | 5,651,413,992 | 7,679,145,649 | | Aviation Engineering Services | 1,851,037,463 | 2,035,384,286 | | Total | 11,556,149,976 | 15,777,767,019 | - The book value of contract liabilities decreased by RMB 4,221,617,043 during the period, mainly due to gradual order deliveries[140] Long-term Borrowings As of June 30, 2025, the Group's total long-term borrowings amounted to RMB 4.182 billion, a decrease from RMB 5.164 billion at the end of 2024, primarily comprising credit borrowings, with interest rates ranging from 1.08% to 3.50% at period-end Long-term Borrowings Categories (As of June 30, 2025 vs December 31, 2024) | Borrowing Category | June 30, 2025 (RMB) | December 31, 2024 (RMB) | | :--- | :--- | :--- | | Credit borrowings | 4,107,004,182 | 5,085,267,863 | | Guaranteed borrowings | 50,500,000 | 55,000,000 | | Mortgaged borrowings | 24,000,000 | 24,000,000 | | Total | 4,181,504,182 | 5,164,267,863 | - The interest rate range for the Group's long-term borrowings at period-end was 1.08% to 3.50% (1.08% to 3.85% at the beginning of the year)[141] Lease Liabilities As of June 30, 2025, the Group's total lease liabilities amounted to RMB 381 million, a slight decrease from RMB 401 million at the end of 2024, with lease payments totaling RMB 593 million Lease Liabilities (As of June 30, 2025 vs December 31, 2024) | Item | June 30, 2025 (RMB) | December 31, 2024 (RMB) | | :--- | :--- | :--- | | Lease payments | 593,269,882 | 627,140,242 | | Less: Unrecognized finance costs | 115,400,525 | 123,610,612 | | Reclassified to non-current liabilities due within one year | 96,858,239 | 102,921,676 | | Total | 381,011,118 | 400,607,954 | Share Capital As of June 30, 2025, the company's total share capital was RMB 7.973 billion, consistent with the end of 2024, with no changes during the period Total Share Capital (As of June 30, 2025 vs December 31, 2024) | Item | December 31, 2024 (RMB) | Change during the period (+/-) | June 30, 2025 (RMB) | | :--- | :--- | :--- | :--- | | Total share capital | 7,972,854,242 | 0 | 7,972,854,242 | Operating Revenue, Operating Costs The Group's operating revenue for the first half of 2025 was RMB 37.465 billion, and operating costs were RMB 29.889 billion; main business revenue accounted for the vast majority, increasing by 11.48% year-on-year Operating Revenue, Operating Costs (H1 2025 vs H1 2024) | Item | H1 2025 Revenue (RMB) | H1 2025 Costs (RMB) | H1 2024 Revenue (RMB) | H1 2024 Costs (RMB) | | :--- | :--- | :--- | :--- | :--- | | Main business | 36,826,838,364 | 29,376,744,360 | 33,035,071,261 | 25,144,142,211 | | Other business | 638,413,506 | 512,733,572 | 586,204,429 | 430,146,162 | | Total | 37,465,251,870 | 29,889,477,932 | 33,621,275,690 | 25,574,288,373 | - The revenue recognized by the Group in January-June 2025 includes RMB 7,547,201,804 that was already included in contract liabilities at the beginning of the year[144] Selling Expenses The Group's selling expenses for the first half of 2025 were RMB 339 million, a year-on-year increase of 3.04%; staff remuneration expenses were the main component, increasing by 9.67% year-on-year Selling Expenses Composition (H1 2025 vs H1 2024) | Item | H1 2025 (RMB) | H1 2024 (RMB) | | :--- | :--- | :--- | | Staff remuneration expenses | 172,814,985 | 157,573,108 | | Travel expenses | 58,466,608 | 56,028,172 | | Advertising and exhibition expenses | 33,792,498 | 29,667,021 | | Sales service fees | 28,641,015 | 26,616,667 | | Other | 45,385,473 | 58,794,526 | | Total | 339,100,579 | 328,679,494 | Administrative Expenses The Group's administrative expenses for the first half of 2025 were RMB 2.064 billion, a year-on-year decrease of 4.40%; staff remuneration expenses and depreciation and amortization expenses were the main components, with equity incentive amortization expenses for the current period significantly decreasing by 46.62% year-on-year Administrative Expenses Composition (H1 2025 vs H1 2024) | Item | H1 2025 (RMB) | H1 2024 (RMB) | | :--- | :--- | :--- | | Staff remuneration expenses | 1,252,186,093 | 1,185,191,826 | | Depreciation and amortization expenses | 296,382,483 | 284,950,026 | | Equity incentive amortization for the current period | 70,577,690 | 132,205,699 | | Other | 445,334,486 | 556,756,510 | | Total | 2,064,480,752 | 2,159,104,061 | R&D Expenses The Group's R&D expenses for the first half of 2025 were RMB 2.170 billion, a year-on-year increase of 6.84%; staff remuneration expenses and material costs were the main components, with equity incentive amortization expenses for the current period decreasing by 50.39% year-on-year R&D Expenses Composition (H1 2025 vs H1 2024) | Item | H1 2025 (RMB) | H1 2024 (RMB) | | :--- | :--- | :--- | | Staff remuneration expenses | 859,178,231 | 828,486,723 | | Material costs | 594,603,039 | 542,454,369 | | Testing and special expenses | 302,118,533 | 214,719,103 | | Outsourcing fees | 108,480,786 | 126,394,091 | | Equity incentive amortization for the current period | 33,980,936 | 68,492,017 | | Other | 271,520,278 | 256,673,545 | | Total | 2,169,891,803 | 2,031,219,848 | Finance Costs The Group's finance costs for the first half of 202