Company Information Provides details on the company's governance structure, including its board of directors and key contact information Board of Directors and Committees The Board comprises executive, non-executive, and independent non-executive directors, supported by audit, remuneration, and nomination committees for robust corporate governance - Board members include Executive Director Mr. Choi Ka Tsan (Chairman and Chief Executive Officer), Dr. Fok Siu Wing, Ms. Cheung Siu Suet, Mr. Lau Sze Yam (resigned), and Mr. Wong Yu (newly appointed)4 - The Board has an Audit Committee (Chairman: Mr. Chan Wai Kun), a Remuneration Committee (Chairman: Mr. Cheung Ka Ming), and a Nomination Committee (Chairman: Mr. Choi Ka Tsan)4 Company Contact Information Details the company secretary, auditor, registered and principal offices, and primary banking relationships - The Company Secretary is Mr. Lo Wai Keung, and the Auditor is UHY CPA Limited4 - The registered office is in Bermuda, and the principal place of business in Hong Kong is located at 6/F, Quality HealthCare Medical Centre, 10-12 Yuen Shun Circuit, Siu Lek Yuen, Sha Tin, New Territories, Hong Kong45 - Major bankers include Bank of China (Hong Kong), Bank of Communications, Dah Sing Bank, Hang Seng Bank, Nanyang Commercial Bank, Standard Chartered Bank (Hong Kong), and UBS AG Hong Kong Branch5 Financial Summary Presents key financial performance and position highlights for the six months ended June 30, 2025, showing a return to profitability and improved financial health Financial Summary For the six months ended June 30, 2025, the Group achieved a net profit of approximately HK$35.6 million, with profit attributable to owners of HK$12.7 million, alongside growth in net assets and a stable liquidity ratio Key Financial Data for the Six Months Ended June 30, 2025 | Indicator | 2025 (HK$) | 2024 (HK$) | | :--- | :--- | :--- | | Revenue | 900,923,000 | 914,280,000 | | Net Profit | 35,593,000 | (28,542,000) | | Profit Attributable to Owners of the Company | 12,727,000 | (47,676,000) | | As of June 30, 2025 | | | | Net Assets | 3,436,900,000 | 3,380,347,000 (December 31, 2024) | | Net Current Assets | 1,306,142,000 | 1,300,647,000 (December 31, 2024) | | Current Ratio | 3.19 | 3.19 (December 31, 2024) | | Gearing Ratio | 0.38% | 2.71% (December 31, 2024) | - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025 (2024: nil)6 Management Discussion and Analysis Discusses the Group's financial performance, business operations, future outlook, and financial resources, highlighting key drivers and strategic initiatives Financial Review The Group returned to profitability with a HK$35.6 million profit for the first half, driven by reduced fair value losses on investment properties and lower impairment losses from associates, despite a decrease in gross profit - The Group recorded an unaudited profit of approximately HK$35.59 million (2024: loss of approximately HK$28.54 million), including profit attributable to owners of approximately HK$12.73 million (2024: loss of approximately HK$47.68 million)8 - Fair value loss on investment properties decreased to approximately HK$2.55 million (2024: HK$26.87 million), primarily due to a continued but less severe contraction in the Hong Kong property market8 - No impairment loss on interests in associates was recognized in the current period, compared to an impairment loss of approximately HK$36.7 million for the six months ended June 30, 20249 - Share of profit from associates was approximately HK$7.26 million (2024: share of loss of approximately HK$1.99 million), mainly attributable to cost control measures implemented by associates10 - Gross profit decreased to approximately HK$230.18 million (2024: HK$249.55 million), primarily due to the overall unfavorable economic environment11 Business Review As a leading listed healthcare group in Hong Kong, the Group's operations span Hong Kong medical services, network management, Mainland China hospital and health management, and medical aesthetics, demonstrating resilience and achieving profitability amidst a challenging macroeconomic environment - The Group's business covers five core areas: Hong Kong medical services, medical network management; Mainland China hospital management, health management; and medical aesthetics and beauty wellness in Hong Kong and Mainland China12 - Cost control measures were implemented, including reducing unnecessary procedures, streamlining structures, and optimizing staffing, to enhance operational effectiveness and efficiency12 - As of June 30, 2025, the Group operated 422 medical service points covering various specialties, with a total of 810 doctors, dentists, and allied health professionals16 Group Overview and Strategy The Group, a long-established and large-scale listed healthcare provider in Hong Kong and Mainland China, achieved profitability through cost control, operational optimization, and strategic partnerships, while actively expanding cross-border medical services in the Greater Bay Area - The Group is one of the longest-established and largest listed healthcare groups in Hong Kong, providing comprehensive healthcare services in both Hong Kong and Mainland China12 - The Group optimized its Hong Kong chain clinic network, closing underperforming centers, aiming to open multi-clinic integrated medical centers in densely populated communities, and launched "General Practitioner Teleconsultation Services"13 - The Group supports Hong Kong residents in accessing health check-ups and medical services in the Guangdong-Hong Kong-Macao Greater Bay Area and provides comprehensive concierge services for Mainland Chinese seeking medical treatment in Hong Kong, having signed a cooperation agreement with China Life Overseas Company Hong Kong Branch14 - Plans are underway to build a full-cycle, integrated, one-stop healthcare service ecosystem connecting its chain clinics, medical imaging and diagnostic centers, health management centers, hospitals, and internet hospitals14 Hong Kong Operations Hong Kong operations encompass medical services and network management, with the Group optimizing clinic layouts, launching teleconsultation, participating in government primary healthcare initiatives, and enhancing its Vio network through system upgrades and customized client services Hong Kong Business Revenue Contribution | Business Type | H1 2025 Revenue (HK$) | H1 2024 Revenue (HK$) | H1 2025 Revenue Share | H1 2024 Revenue Share | | :--- | :--- | :--- | :--- | :--- | | Medical Services | 377,546,000 | 394,462,000 | 41.91% | 43.14% | | Medical Network Management | 233,162,000 | 250,043,000 | 25.88% | 27.35% | Medical Services The Group provides general, specialist, dental, and allied health services in Hong Kong under "Quality HealthCare" and "CMH Medical" brands, actively participating in government primary healthcare schemes, optimizing clinic locations, and introducing teleconsultation services - Operates one of the largest and most comprehensive chain clinic networks in Hong Kong, offering general, specialist, dental, and allied health services under the "Quality HealthCare" and "CMH Medical" brands17 - Actively responds to the government's primary healthcare development strategy, strengthening public-private collaboration to enhance accessibility of private medical services17 - Optimized the layout of Hong Kong chain clinics, reopening three general practitioner clinics and one pediatric clinic in Lucky Plaza, Sha Tin, and adding a "Quality HealthCare Medical Centre" in Choi Hung18 - Launched "General Practitioner Teleconsultation Services" to provide convenient consultations for customers in Hong Kong, with same-day free express delivery of medication18 - Dental clinics participate in Phase II of the Pilot Scheme for Dental Services (Scaling) for Civil Servants and Eligible Persons, and joined the Pilot Scheme on Co-care for Adolescents' Oral Health22 Medical Network Management—Vio Vio, the Group's managed care network in Hong Kong, boasts 77 years of experience, over 600 affiliated providers, and dual ISO certifications, continuously upgrading its information systems and operational processes to maintain market leadership amidst economic uncertainties - Vio has 77 years of extensive experience and over 600 affiliated service providers, developing into a large and diversified primary and specialist medical network23 - Vio is the first and only medical network in Hong Kong to simultaneously receive dual ISO 9001:2015 Quality Management System and ISO 27001:2022 Information Security Management System certifications23 - Continuously invests resources to upgrade its information systems (e.g., web-CMS clinic management system) and optimize operational processes, providing efficient and environmentally friendly medical plan management services for blue-chip corporations, insurance companies, government departments, and public organizations23 - Enhances employee belonging through a mentorship program and family-friendly culture, and provides regular training to strengthen customer service and data security awareness24 Mainland China Operations Mainland China operations primarily involve hospital and health management, with Nanshi Hospital enhancing services through a "headquarters + branches" model and AI-powered pre-assessment, while health management centers in Guangzhou, Shenzhen, and Jinan expand specialized services like assisted reproduction and cross-border medical care - Nanyang Xiangrui primarily operates Mainland China hospital management business, continuously providing professional management services to Nanshi Hospital, a national Grade III Class A hospital25 - Nanshi Hospital's Internet Hospital has served over 1.5 million patient visits since its launch in March 2022 until June 2025, and is piloting an "AI+ pre-assessment system"25 - Nanshi Hospital's Oncology Department was selected as a Henan Provincial Clinical Key Specialty for 2024, and its Burn and Plastic Surgery Department was approved as a National Clinical Key Specialty26 - Nanshi Hospital was listed in the "First Tier (Class A) Benchmark Hospitals for Socially Run Medical Institutions" and "Top 30 Socially Run Medical Institutions for Medical and Elderly Care Integration" in the "2025 China Hospital Competitiveness Ranking"29 - The Group's health management centers in Guangzhou, Shenzhen, and Jinan operate stably, offering specialized services such as assisted reproduction, cross-border medical linkages, weight management, gastrointestinal management, and high-end health check-ups3031 Hospital Management Business Nanyang Xiangrui continues to provide professional management services to Nanshi Hospital, a national Grade III Class A hospital, enhancing operational efficiency and patient experience through a "headquarters + branches" model and an "AI+ pre-assessment system," achieving significant progress in specialized departments and advanced technology adoption - Nanshi Hospital's Internet Hospital has served over 1.5 million patient visits since its launch in March 2022 until June 202525 - Nanshi Hospital's integrated management platform began piloting an "AI+ pre-assessment system" in February 2025, forming a new model of "experiential clinical + intelligent analysis"25 - Nanshi Hospital's Pediatrics, Emergency Medicine, Urology, Cardiology, General Surgery, and Ophthalmology departments were selected as Nanyang City "Clinical Key Specialties," and its Oncology Department was selected as a Henan Provincial Clinical Key Specialty26 - Nanshi Hospital's Gamma Knife successfully passed the on-site acceptance inspection by the Henan Provincial Health Commission expert group, filling a gap in high-end radiotherapy in the southwestern Henan region26 - Nanshi Hospital established a joint weight management clinic, breaking down disciplinary barriers to achieve multidisciplinary collaborative diagnosis and treatment, and upgraded its day surgery operating rooms to improve medical hardware facilities27 Health Management Business The Group's health management centers in Guangzhou, Shenzhen, and Jinan operate stably, expanding into assisted reproduction, cross-border medical linkages, and high-end physical examinations, while collaborating with quality medical institutions to offer diversified health management services - Guangzhou Integrated Outpatient Department strategically collaborates with nearby hospitals and reproductive medicine centers to provide peripheral services for assisted reproduction and women's life cycle healthcare, and introduced traditional Chinese medicine, rehabilitation, and chronic disease management programs30 - Shenzhen Ganghe Clinic leverages its geographical advantages in the Guangdong-Hong Kong-Macao Greater Bay Area to promote cross-border medical collaboration and project implementation, offering specialized services such as weight management and gastrointestinal management30 - Quality HealthCare International Health Management Center in Jinan serves China Life Insurance Company Limited Shandong Branch and regional corporate clients, providing comprehensive health management services primarily focused on high-end health check-ups31 - In addition to health check-up services, Quality HealthCare International Health Management Center collaborates with quality medical institutions in the province to offer diversified health management services, including color Doppler ultrasound examinations, remote consultations, oral healthcare, traditional Chinese medicine healthcare, and chronic disease management31 Other Businesses TBMG, operating medical aesthetics and beauty wellness businesses, effectively reduced costs and improved operational efficiency by optimizing resource allocation, strategically adjusting its store network, expanding services, and upgrading its CRM system amidst increasing market competition - TBMG maintained a stable team size, employing 14 full-time and part-time doctors (2024: 12 doctors)32 - TBMG operates 11, 8, 8, and 3 stores in Hong Kong, Shenzhen, Shanghai, and Guangzhou, respectively (2024: 13, 9, 9, and 3 stores)32 - Through optimized resource allocation, costs were effectively reduced, and operational efficiency was improved, implementing strategic store network adjustments by consolidating overlapping or synergistic stores32 - Continuously upgrades its customer relationship management system, leveraging a comprehensive database to understand customer consumption behavior characteristics, create personalized service solutions, and enhance customer satisfaction and repurchase rates32 Outlook Facing a complex macroeconomic environment, the Group will align with market trends, leverage synergies between Hong Kong and Mainland China operations, strengthen primary healthcare and specialist brand complementarity in Hong Kong, and enhance hospital efficiency and specialized health management in Mainland China - Slowing global economic growth and persistent geopolitical uncertainties continue to impact the Hong Kong and Mainland China markets to varying degrees33 - Hong Kong's aging population exacerbates demand for primary healthcare, with the government's "Primary Healthcare Blueprint" increasing public-private collaboration, opening new avenues for private medical institutions to participate in public medical services33 - Under the guidance of the "Healthy China 2030" policy, Mainland China continues to deepen medical reform, expand medical resource supply, and accelerate digital transformation, creating structural growth opportunities for the healthcare industry33 - The Group will closely follow market trends, leverage the synergistic advantages of its Hong Kong and Mainland China operations, strengthen its primary healthcare layout and specialist brand complementarity, and empower medical network management through technology33 Macroeconomic Environment and Industry Opportunities The first half of 2025 saw a complex macroeconomic environment in Hong Kong and Mainland China, with global slowdowns and geopolitical uncertainties, yet the healthcare sector found new growth opportunities through Hong Kong's Primary Healthcare Blueprint and Mainland China's "Healthy China 2030" policy - Slowing global economic growth and persistent geopolitical uncertainties continue to impact the Hong Kong and Mainland China markets to varying degrees33 - Hong Kong's aging population exacerbates demand for primary healthcare, with the government's "Primary Healthcare Blueprint" increasing public-private collaboration, opening new avenues for private medical institutions to participate in public medical services33 - Under the guidance of the "Healthy China 2030" policy, Mainland China continues to deepen medical reform, expand medical resource supply, and accelerate digital transformation, creating structural growth opportunities for the healthcare industry33 Hong Kong Business Outlook Hong Kong medical services will continue to support the government's Primary Healthcare Blueprint through public-private collaborations and multi-clinic integrated medical centers, while Vio will leverage its dual ISO certifications to deepen partnerships and optimize service processes - In medical services, the Group will leverage its rich medical resources to continue supporting the Hong Kong government's "Primary Healthcare Blueprint" by participating in more government-funded and public-private collaboration schemes34 - Plans to open more multi-clinic integrated medical centers in densely populated communities to provide cost-effective medical services, and seeks to strengthen mutually beneficial synergies with its high-end integrated specialist brand "CMH Medical"34 - In medical network management, Vio will fully leverage its competitive advantage as Hong Kong's only ISO-certified quality management and information security management medical network to further develop long-term partnerships with blue-chip corporations, insurance companies, government departments, and public organizations35 - Vio will further optimize service processes, enhance environmental performance and customer satisfaction, and actively prepare to comply with the licensing requirements of the integrated clinic licensing system under the "Private Healthcare Facilities Ordinance"35 Mainland China Business Outlook Mainland China hospital management will focus on differentiated competition and refined management, supporting Nanshi Hospital's integrated development through technological innovation and cost control, while health management will build a comprehensive service system, offering differentiated products and promoting an "insurance + health" ecosystem - Nanyang Xiangrui will deeply analyze the opportunities and challenges faced by socially run medical institutions and propose practical cost reduction and efficiency improvement strategies for Nanshi Hospital from multiple dimensions, including technological innovation, management optimization, cost control, and service upgrades36 - The Group will continue to deepen the construction of its health management service system, precisely meeting diverse market health needs by creating differentiated health check-up product portfolios and innovative service models36 - Will further strengthen resource integration and business synergy between its health management institutions and strategic partners in various regions, focusing on promoting the development of an "insurance + health" service ecosystem36 Other Business Outlook TBMG will implement a multi-dimensional development strategy, strategically reorganizing its store network, planning a new concept store in Hong Kong with international medical aesthetic equipment, upgrading its CRM system for enhanced customer satisfaction, and evaluating M&A targets for cross-border synergies - TBMG will enhance single-store efficiency through strategic reorganization of its store network and plans to establish a conceptual new store in the New Territories, Hong Kong, in the second half of 2025, introducing internationally leading medical aesthetic equipment and technology37 - Will continue to invest resources in upgrading its customer relationship management system, utilizing big data to enhance customer satisfaction and retention rates, and promote customer conversion between beauty wellness and medical aesthetics37 - TBMG will also evaluate high-quality M&A targets in Hong Kong and Mainland China, expand its ecosystem of strategic partners, and explore cross-border business synergy opportunities37 Liquidity and Financial Resources As of June 30, 2025, the Group maintained strong liquidity with total bank balances and deposits of approximately HK$1,410.3 million, net current assets of HK$1,306.1 million, a current ratio of 3.19, and a significantly reduced gearing ratio of 0.38%, adhering to prudent financial management Overview of Liquidity and Financial Resources | Indicator | June 30, 2025 (HK$) | December 31, 2024 (HK$) | | :--- | :--- | :--- | | Total Bank Balances and Deposits | 1,410,255,000 | 1,420,245,000 | | Bank Borrowings | 11,436,000 | 80,683,000 | | Unutilized Banking Facilities | 20,000,000 | 20,000,000 | | Net Current Assets | 1,306,142,000 | 1,300,647,000 | | Current Ratio | 3.19 | 3.19 | | Gearing Ratio | 0.38% | 2.71% | - The Group adopts a prudent cash and financial management policy, aiming to minimize borrowing levels and maintain sufficient internal resources to support business operations39 - The Group's primary currencies for transactions are Hong Kong Dollars and Renminbis, and it considers the foreign exchange risk faced to be manageable, with regular reviews of exchange rate risks40 - During the review period, the Group did not use any financial instruments for hedging activities41 Capital Structure As of June 30, 2025, equity attributable to owners of the Company increased to approximately HK$3,009.3 million from December 31, 2024 - As of June 30, 2025, the Group's equity attributable to owners of the Company was approximately HK$3,009.31 million (December 31, 2024: HK$2,976.91 million)42 Share Capital Details of changes in the Company's share capital during the review period are provided in Note 22 to the condensed consolidated financial statements - Details of changes in the Company's share capital during the review period are provided in Note 22 to the condensed consolidated financial statements for the six months ended June 30, 202543 Significant Investments, Acquisitions and Disposals The Group did not undertake any significant investment, acquisition, or disposal activities during the review period - During the review period, the Group did not have any significant investments, significant acquisitions, or disposals44 Pledge of Assets As of June 30, 2025, the Group pledged assets totaling approximately HK$29.9 million, including leasehold land and buildings and bank deposits, as collateral for mortgage loans and general banking facilities - As of June 30, 2025, certain assets pledged by the Group totaled approximately HK$29.89 million (December 31, 2024: HK$120.55 million)45 - Collateral includes leasehold land and buildings of approximately HK$28.88 million (December 31, 2024: HK$30.44 million, and investment properties of approximately HK$89 million) as security for mortgage loans45 - Bank deposits of approximately HK$1.02 million (December 31, 2024: HK$1.11 million) were pledged as security for general banking facilities45 Contingent Liabilities As of June 30, 2025, the Group had no significant contingent liabilities - As of June 30, 2025, the Group had no significant contingent liabilities (December 31, 2024: nil)46 Litigation The Group initiated litigation against the vendors of Central Medical due to unmet profit guarantees, with revised claims of HK$172.96 million for FY2023 and HK$234.07 million for FY2024, with proceedings ongoing and outcomes uncertain - Central Medical Group's adjusted net profit for the year ended March 31, 2023, was HK$23.47 million, falling below the performance target of HK$30 million48 - The buyer revised the original claim amount from HK$97.96 million to HK$172.96 million, with related litigation proceedings ongoing4850 - Central Medical Group's actual adjusted net profit for the financial year ended March 31, 2024, was HK$14.40 million, falling below the performance target of HK$30 million51 - The buyer has claimed HK$234.07 million from the defendants and has commenced litigation52 - Due to the confidentiality of legal proceedings, the Company is currently unable to disclose further information and will issue further announcements in due course in accordance with the Listing Rules5052 Events After Reporting Period No events with significant impact on the Group's business have occurred since June 30, 2025, other than those already disclosed in this report - Save as disclosed in this report, no events with significant impact on the Group have occurred since June 30, 202553 Human Resources and Training Programs As of June 30, 2025, the Group employed 1,388 staff with total employee costs of approximately HK$363.78 million, offering competitive remuneration, performance-based bonuses, specialized training, and a code of conduct to enhance service quality and professional development - As of June 30, 2025, the Group employed 1,388 staff (December 31, 2024: 1,441 staff)54 - Total employee costs for the six months ended June 30, 2025, were approximately HK$363.78 million (2024: HK$380.54 million)54 - The Group's employees receive competitive salaries and benefits, with individual performance rewarded through the Group's salary and bonus scheme54 - In addition to a strict code of conduct applicable to all employees, staff are provided with specialized training and manuals54 Use of Net Proceeds from Share Issuance The Group adjusted the use and timeline of net proceeds from two share issuances to better respond to the business environment and capitalize on global healthcare opportunities, terminating the "one-stop IT online platform" development and reallocating funds to hospital and medical institution acquisitions, investments, and development - The Board resolved to extend the timeline for utilizing the unutilized balance of the first tranche of net proceeds from end-2023 to end-202657 - One of the originally intended uses, "development of a 'one-stop IT online platform'," has been terminated, and its remaining unutilized balance of approximately HK$62 million has been reallocated for "acquisition, investment, and development of hospitals and medical institutions, and medical or health-related businesses"57 - The original intended use of the unutilized balance of the second tranche of net proceeds will be changed to allow the entire unutilized balance of HK$996 million to be used for "acquisition, investment, and development of medical and health-related businesses for providing medical, dental, rehabilitation, nursing, elderly care, health check-up, laboratory testing, medical diagnosis, managed care, and medical tourism services"62 Issuance of Subscription Shares and Convertible Preference Shares Net proceeds of approximately HK$880 million from 2014 share and convertible preference share issuances, originally for Mainland China medical market expansion, Hong Kong specialist centers, dental clinics, and an IT platform, have been reallocated for hospital and medical institution acquisitions, investments, and development, with the IT platform project terminated and geographical restrictions removed, extending the utilization timeline to end-2026 - The net proceeds from the ordinary share subscription and convertible preference share subscription totaled approximately HK$880 million55 Original Use and Utilized Status of First Tranche of Net Proceeds (as of December 31, 2023) | Use | Amount (HK$ million) | Total Utilized (HK$ million) | Unutilized Balance (HK$ million) | | :--- | :--- | :--- | :--- | | Acquisition, investment, and development of hospitals and medical institutions in Mainland China, and medical or health-related businesses in Hong Kong | 650 | 602 | 48 | | Investment and development of multiple specialist medical centers in Hong Kong and a chain dental clinic in Mainland China | 150 | 13 | 137 | | Development of a "one-stop IT online platform" to integrate the Group's continuously developing diverse medical and healthy living businesses | 80 | 18 | 62 | | Total | 880 | 633 | 247 | - The remaining unutilized balance of approximately HK$62 million, originally allocated for platform development, has been reallocated for "acquisition, investment, and development of hospitals and medical institutions, and medical or health-related businesses," with geographical restrictions removed57 - As of June 30, 2025, the unutilized first tranche of net proceeds was approximately HK$127 million59 Issuance of Shares to China Life Insurance Net proceeds of approximately HK$1,746 million from 2015 share issuance to China Life Insurance, initially for Mainland China dental, hospital, rehabilitation, and health check businesses, have been entirely reallocated to acquire, invest in, and develop medical and health-related businesses across various services, with geographical restrictions removed and the utilization timeline extended to end-2026 - The net proceeds from the issuance of shares to China Life Insurance were approximately HK$1,746 million60 Original Use and Utilized Status of Second Tranche of Net Proceeds (as of December 31, 2023) | Use | Amount (HK$ million) | Total Utilized (HK$ million) | Unutilized Balance (HK$ million) | | :--- | :--- | :--- | :--- | | Development of dental chain businesses and investment or acquisition of dental clinics and/or hospitals in Mainland China; development or acquisition of medical clinics; development of hospitals, investment or acquisition of public or private hospitals; development or acquisition of rehabilitation specialist hospitals and (if applicable) nursing homes and/or elderly care homes | 1,500 | 646 | 854 | | Development or acquisition of businesses providing health check-up, laboratory testing, and medical diagnostic services in Mainland China | 150 | 104 | 46 | | Development of managed care businesses and cross-border medical tourism platforms in Mainland China | 96 | 0 | 96 | | Total | 1,746 | 750 | 996 | - It was resolved to extend the timeline for utilizing the unutilized balance of the second tranche of net proceeds from end-2023 to end-202662 - The entire unutilized balance of HK$996 million of these net proceeds will be used for "acquisition, investment, and development of medical and health-related businesses for providing medical, dental, rehabilitation, nursing, elderly care, health check-up, laboratory testing, medical diagnosis, managed care, and medical tourism services," with geographical restrictions removed62 - As of June 30, 2025, the unutilized second tranche of net proceeds was approximately HK$912 million62 Issuance of Convertible Bonds The Group issued HK$356 million in convertible bonds in 2022 for the Central Medical acquisition, with Series A and B fully redeemed, and Series C, with an outstanding principal of HK$116 million, maturing on August 26, 2025, which, if fully converted, would result in a minor dilution of approximately 2.25% of the issued share capital - The Company paid HK$120 million in cash to the vendors and issued convertible bonds totaling HK$356 million in three tranches to the vendors' nominees on August 26, 20226366 - The convertible bonds carry conversion rights, allowing the outstanding principal amount to be converted into conversion shares at a conversion price of HK$0.76 per share63 - As of June 30, 2025, Series A and B convertible bonds have been fully redeemed, and the outstanding principal amount of convertible bonds is HK$116 million (Series C)6466 - Assuming the outstanding convertible bonds of HK$116 million are fully converted at a conversion price of HK$0.76 per share, a maximum of 152,631,579 conversion shares will be issued, representing approximately 2.25% of the Company's issued share capital as of June 30, 202565 Major Shareholder Equity Dilution Impact (Assuming Full Conversion of Convertible Bonds) | Shareholder Name | Equity Immediately Before Exercise of Conversion Rights (Approx. %) | Equity Immediately After Exercise of Conversion Rights (Approx. %) | | :--- | :--- | :--- | | China Life Insurance | 26.35% | 25.77% | | Broad Idea | 20.94% | 20.48% | | Choi Ka Tsan | 28.21% | 27.59% | | Dr. Choi | 20.95% | 20.49% | | Classictime | 12.26% | 11.99% | | Win Group | 12.26% | 11.99% | | Kwok Wai King | 5.28% | 5.17% | - The Company expects to be able to meet its redemption obligations under the outstanding convertible bonds67 Disclosure of Interests Details the interests and short positions of directors, chief executives, and major shareholders in the Company's shares, underlying shares, and debentures as of June 30, 2025 Directors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares and Debentures As of June 30, 2025, Mr. Choi Ka Tsan held 1,911,136,764 shares, representing approximately 28.21% of the Company's equity, including shares held by his controlled corporation, Broad Idea Mr. Choi Ka Tsan's Long Position in Shares | Shareholder Name | Capacity | Number of Shares Held | Total Number of Shares Held | Approximate Percentage of Company's Equity | | :--- | :--- | :--- | :--- | :--- | | Choi Ka Tsan | Interest of controlled corporation | 1,418,576,764 | 1,911,136,764 | 28.21% | | | Beneficial owner | 492,560,000 | | | - Mr. Choi Ka Tsan and Dr. Choi are deemed to be interested in the 1,418,576,764 shares held by Broad Idea71 - Save as disclosed above, as of June 30, 2025, no director or chief executive of the Company had any interests or short positions in the shares, underlying shares, or debentures of the Company or any of its associated corporations that were required to be recorded in the register kept by the Company under Section 352 of the Securities and Futures Ordinance, or otherwise notified to the Company and the Stock Exchange under the Standard Code70 Directors' Rights to Acquire Shares or Debentures During the six months ended June 30, 2025, no arrangements were made by the Company or its affiliates for directors, chief executives, or their associates to benefit from acquiring shares or debentures of the Company or any other body corporate - At no time during the six months ended June 30, 2025, had the Company, its subsidiaries, fellow subsidiaries, or holding company entered into any arrangements that would enable the directors or chief executive of the Company or their respective spouses or children under 18 years of age to acquire benefits by means of the acquisition of shares or debentures of the Company or any other body corporate72 Major Shareholders' Interests and Short Positions in Shares and Underlying Shares As of June 30, 2025, major shareholders, excluding directors and chief executives, included China Life Insurance, Broad Idea, Mr. Choi Ka Tsan, Dr. Choi, Classictime, Win Group, and Ms. Kwok Wai King, holding interests in the Company's shares or underlying shares Major Shareholders' Long Positions in Shares (as of June 30, 2025) | Shareholder Name/Name | Capacity | Number of Shares Held | Total Number of Shares Held | Approximate Percentage of Company's Equity | | :--- | :--- | :--- | :--- | :--- | | China Life Insurance | Beneficial owner | 1,785,098,644 | 1,785,098,644 | 26.35% | | Broad Idea | Beneficial owner | 1,418,576,764 | 1,418,576,764 | 20.94% | | Choi Ka Tsan | Interest of controlled corporation | 1,418,576,764 | 1,911,136,764 | 28.21% | | | Beneficial owner | 492,560,000 | | | | Dr. Choi | Interest of controlled corporation | 1,418,576,764 | 1,419,198,764 | 20.95% | | | Beneficial owner | 622,000 | | | | Classictime | Beneficial owner | 830,742,000 | 830,742,000 | 12.26% | | Win Group | Interest of controlled corporation | 830,742,000 | 830,742,000 | 12.26% | | Kwok Wai King | Beneficial owner | 356,164,000 | 357,874,000 | 5.28% | | | Jointly interested with another person | 1,710,000 | | | - Mr. Choi Ka Tsan and Dr. Choi are deemed to be interested in the 1,418,576,764 shares held by Broad Idea77 - Win Group is deemed to be interested in the 830,742,000 shares held by Classictime77 Purchase, Sale or Redemption of the Company's Listed Securities Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any listed securities during the review period - During the review period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any listed shares76 Corporate Governance Outlines the Company's commitment to maintaining high corporate governance standards, compliance with codes, and the roles of its audit committee and auditor Corporate Governance Standards The Board is committed to upholding strong corporate governance standards to foster long-term sustainable growth and deliver value to all stakeholders, believing it safeguards shareholder interests, enhances corporate value, manages risks, and increases transparency - The Board is committed to maintaining good corporate governance standards, aiming to create long-term sustainable growth for shareholders and provide long-term value to all stakeholders78 - Good corporate governance standards provide the Group with a framework for safeguarding shareholder interests, enhancing corporate value, formulating its business strategies and policies, managing relevant risks through effective internal control systems, and increasing the Group's transparency and accountability to shareholders and creditors78 Auditor UHY CPA Limited has served as the Group's auditor since February 15, 2018, and has been re-appointed at successive annual general meetings - UHY CPA Limited has been the Group's auditor since February 15, 201879 - The Company has re-appointed UHY CPA Limited as its auditor at successive annual general meetings79 Compliance with Corporate Governance Code During the review period, the Company complied with the Corporate Governance Code, except for the combined roles of Chairman and Chief Executive held by Mr. Choi Ka Tsan, an arrangement the Board believes ensures consistent leadership and operational efficiency without compromising power balance due to a majority of non-executive and independent non-executive directors - During the review period, the Company complied with the code provisions set out in Appendix C1 of the Listing Rules' Corporate Governance Code, except for the combined roles of Chairman and Chief Executive Officer held by Mr. Choi Ka Tsan80 - The Board believes that combining the roles of Chairman and Chief Executive Officer ensures consistent leadership for formulating and advancing long-term strategies and helps optimize the Group's operational efficiency80 - With four non-executive directors and six independent non-executive directors forming a majority on the 14-member Board, the Board believes this arrangement does not compromise the balance of power between the Board and the Group's management80 Compliance with Standard of Dealings in Securities The Company adopted the Standard of Dealings in Securities as a code of conduct for directors' securities transactions, and all directors confirmed compliance during the six months ended June 30, 2025 - The Company has adopted the Standard of Dealings in Securities set out in Appendix C3 of the Listing Rules as a code of conduct for directors' securities transactions82 - Following specific inquiries with all directors, all directors confirmed compliance with the required standards set out in the Standard of Dealings in Securities during the six months ended June 30, 202582 Sufficient Public Float As of the date of this interim report, the Company maintains a sufficient public float as required by the Listing Rules - As of the date of this interim report, based on publicly available information and to the best of the directors' knowledge, the Company maintains a sufficient public float as required by the Listing Rules83 Changes in Directors' Information No changes in directors' and chief executive's information requiring disclosure under Listing Rule 13.51B(1) occurred, except for Mr. Choi Ka Tsan, Chairman and Chief Executive, being awarded the Gold Bauhinia Star on July 1, 2025 - Mr. Choi Ka Tsan, Chairman and Chief Executive Officer and Executive Director of the Company, was awarded the Gold Bauhinia Star by the Government of the Hong Kong Special Administrative Region of the People's Republic of China on July 1, 202584 - No other changes in the information of the Company's directors and chief executive officer are required to be disclosed under Listing Rule 13.51B(1)84 Audit Committee As of June 30, 2025, the Audit Committee, comprising three independent non-executive directors and one non-executive director, reviewed the Group's accounting principles, internal controls, and financial reporting matters, including this interim report, in conjunction with management - As of June 30, 2025, the Audit Committee comprised three independent non-executive directors (Mr. Chan Wai Kun, Dr. Xu Weiguo, and Mr. Cheung Ka Ming) and one non-executive director (Mr. Liu Yang)85 - The Audit Committee, in conjunction with management, reviewed the accounting principles and practices adopted by the Group and discussed matters related to internal controls and financial reporting, including the review of the Group's unaudited condensed consolidated financial statements and this interim report for the six months ended June 30, 202585 Review of Interim Results The Group's condensed consolidated financial information for the six months ended June 30, 2025, though unaudited, was reviewed by the Audit Committee and by UHY CPA Limited in accordance with Hong Kong Standard on Review Engagements 2410 - The Group's condensed consolidated financial information for the six months ended June 30, 2025, is unaudited but has been reviewed by the Audit Committee86 - UHY CPA Limited has reviewed the Group's condensed consolidated interim financial statements for the six months ended June 30, 2025, in accordance with Hong Kong Standard on Review Engagements 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Hong Kong Institute of Certified Public Accountants86 Independent Auditor's Review Report Presents the independent auditor's conclusion on the condensed consolidated financial statements for the six months ended June 30, 2025 Independent Auditor's Review Report UHY CPA Limited reviewed the Group's condensed consolidated financial statements for the six months ended June 30, 2025, in accordance with HKSRS 2410, concluding that nothing came to their attention suggesting the statements were not prepared in all material respects according to HKAS 34 - The auditor has reviewed the condensed consolidated financial statements of Quality HealthCare Medical Services Group Limited and its subsidiaries on pages 38 to 7788 - The review was conducted in accordance with Hong Kong Standard on Review Engagements 2410 issued by the Hong Kong Institute of Certified Public Accountants, which is substantially less in scope than an audit, and therefore no audit opinion is expressed89 - Based on the review, nothing came to the auditor's attention that causes them to believe that the condensed consolidated financial statements as of June 30, 2025, are not prepared in all material respects in accordance with Hong Kong Accounting Standard 3490 Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income Provides a summary of the Group's financial performance, including revenue, profit or loss, and other comprehensive income for the reporting period Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income For the six months ended June 30, 2025, the Group achieved a profit of HK$35.59 million, a significant improvement from the prior year's loss of HK$28.54 million, with profit attributable to owners at HK$12.73 million and total comprehensive income of HK$74.90 million Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income Summary | Indicator | 2025 (HK$ '000) | 2024 (HK$ '000) | | :--- | :--- | :--- | | Revenue | 900,923 | 914,280 | | Gross Profit | 230,179 | 249,553 | | Profit (Loss) for the Period | 35,593 | (28,542) | | Profit (Loss) for the Period Attributable to Owners of the Company | 12,727 | (47,676) | | Total Comprehensive Income (Expense) for the Period | 74,903 | (84,006) | | Earnings (Loss) Per Share (HK cents) | 0.19 | (0.70) | - Total other comprehensive income (expense) was HK$39.31 million, primarily comprising exchange differences arising from translation of foreign operations of HK$34.70 million and fair value changes on revaluation of investment properties of HK$5.72 million93 Condensed Consolidated Statement of Financial Position Presents a snapshot of the Group's assets, liabilities, and equity as of the reporting date, reflecting its financial health Condensed Consolidated Statement of Financial Position As of June 30, 2025, the Group reported total assets of HK$4,103.55 million, total liabilities of HK$666.65 million, and total equity of HK$3,436.90 million, maintaining a robust financial position with net current assets of HK$1,306.14 million and a current ratio of 3.19 Condensed Consolidated Statement of Financial Position Summary | Indicator | June 30, 2025 (HK$ '000) | December 31, 2024 (HK$ '000) | | :--- | :--- | :--- | | Non-current Assets | 2,200,713 | 2,232,058 | | Current Assets | 1,902,840 | 1,894,845 | | Total Assets | 4,103,553 | 4,126,903 | | Current Liabilities | 596,698 | 594,198 | | Non-current Liabilities | 69,955 | 152,358 | | Total Liabilities | 666,653 | 746,556 | | Equity Attributable to Owners of the Company | 3,009,308 | 2,976,914 | | Non-controlling Interests | 427,592 | 403,433 | | Total Equity | 3,436,900 | 3,380,347 | | Net Current Assets | 1,306,142 | 1,300,647 | - Non-current assets primarily include investment properties, property, plant and equipment, goodwill, intangible assets, and interests in associates94 - Current assets primarily include trade and other receivables, and bank balances and cash94 - Current liabilities primarily include trade and other payables, and convertible bonds95 Condensed Consolidated Statement of Changes in Equity Details the changes in the Group's equity attributable to owners and non-controlling interests over the reporting period Condensed Consolidated Statement of Changes in Equity For the six months ended June 30, 2025, equity attributable to owners increased from HK$2,976.91 million to HK$3,009.31 million, primarily due to a period profit of HK$12.73 million and exchange differences from foreign currency translation Condensed Consolidated Statement of Changes in Equity Summary | Item | June 30, 2025 (HK$ '000) | June 30, 2024 (HK$ '000) | | :--- | :--- | :--- | | Equity Attributable to Owners of the Company (Beginning of Period) | 2,976,914 | 3,242,129 | | Profit (Loss) for the Period | 12,727 | (47,676) | | Exchange Differences Arising from Translation of Foreign Operations | 23,181 | (28,673) | | Fair Value Changes on Revaluation of Property | 5,720 | – | | Fair Value Changes on Revaluation of Investments | (1,106) | (22,422) | | Dividends Declared | (8,128) | (8,128) | | Dividends Paid to Non-controlling Interests | (10,222) | (1,887) | | Equity Attributable to Owners of the Company (End of Period) | 3,009,308 | 3,137,907 | | Non-controlling Interests (End of Period) | 427,592 | 386,818 | | Total Equity (End of Period) | 3,436,900 | 3,524,725 | - Profit for the period was HK$12.73 million, and profit attributable to non-controlling interests was HK$22.87 million96 - Exchange differences arising from translation of foreign operations were HK$23.18 million, and fair value changes on revaluation of properties transferred from "property, plant and equipment" to "investment properties" were HK$5.72 million96 Condensed Consolidated Statement of Cash Flows Summarizes the cash inflows and outflows from operating, investing, and financing activities for the reporting period Condensed Consolidated Statement of Cash Flows For the six months ended June 30, 2025, the Group generated HK$78.48 million net cash from operations and HK$94.47 million net cash from investing activities, while utilizing HK$123.24 million in financing activities, resulting in a net increase of HK$49.71 million in cash and cash equivalents Condensed Consolidated Statement of Cash Flows Summary | Item | 2025 (HK$ '000) | 2024 (HK$ '000) | | :--- | :--- | :--- | | Net Cash Generated from Operating Activities | 78,478 | 141,587 | | Net Cash from (Used in) Investing Activities | 94,472 | (236,943) | | Net Cash Used in Financing Activities | (123,236) | (174,600) | | Net Increase (Decrease) in Cash and Cash Equivalents | 49,714 | (269,956) | | Cash and Cash Equivalents at January 1 | 1,191,397 | 1,032,079 | | Effect of Exchange Rate Changes | 12,524 | (13,347) | | Cash and Cash Equivalents at June 30 | 1,253,635 | 748,776 | - Net cash from investing activities shifted from a net outflow in 2024 to a net inflow in 2
康健国际医疗(03886) - 2025 - 中期财报