迪信通(06188) - 2025 - 中期财报

Company Profile Established in 2001 and listed in Hong Kong in 2014, the company operates nearly 650 stores, focusing on mobile hardware sales, software services, and new energy businesses - The company was established in 2001 and listed in Hong Kong in 2014 (stock code: 06188)[5] - As of June 30, 2025, the company has over 100 subsidiaries and nearly 650 directly operated and franchised stores across 20 provinces and 4 municipalities in China[5] - Main businesses include sales of mobile hardware and accessories, value-added software services, personalized mobile services, and after-sales services[5] - Actively developing new retail and diversified product sales, exploring new energy businesses, with initial scale in photovoltaic supply chain and normalized household photovoltaic agency operations in multiple provinces and cities[5] Company Information Provides details on the Board of Directors, Supervisors, various committees, legal counsel, registered office, H-share registrar, and auditor - Board members include executive directors (Ms. Xu Jili as Chairperson), non-executive directors, and independent non-executive directors[7] - Mr. Gao Zhiqiang serves as the Chairman of the Supervisory Committee[7] - Composition and chairpersons of the Audit Committee, Nomination Committee, Remuneration and Appraisal Committee, and Strategic Committee[7] - The company's registered office and headquarters are in Lize Road, Fengtai District, Beijing, China; H-share registrar is Hong Kong Registrars Limited; and auditor is Ernst & Young[7][9] Financial Highlights Revenue decreased by 13.80% to RMB 8.22 billion, net loss expanded by 152.51% to RMB 73.42 million, and financial leverage increased significantly Consolidated Statement of Profit or Loss Summary for the Six Months Ended June 30, 2025 | Metric | 2025 (RMB Thousand) | 2024 (RMB Thousand) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 8,219,463 | 9,535,821 | -13.80% | | Gross profit | 298,506 | 334,270 | -10.70% | | Loss for the period | (73,422) | (29,077) | 152.51% | | Loss attributable to owners of the parent | (76,644) | (29,267) | 161.88% | | Basic (loss) per share | (0.09) | (0.03) | 200.00% | Consolidated Statement of Financial Position Summary as of June 30, 2025 | Metric | June 30, 2025 (RMB Thousand) | December 31, 2024 (RMB Thousand) | | :--- | :--- | :--- | | Total assets | 9,478,071 | 10,395,975 | | Current liabilities | 9,368,314 | 10,127,462 | | Net assets | 17,887 | 91,258 | | Equity attributable to owners of the parent | (1,396,631) | (1,320,038) | Consolidated Statement of Cash Flows Summary for the Six Months Ended June 30, 2025 | Metric | 2025 (RMB Thousand) | 2024 (RMB Thousand) | | :--- | :--- | :--- | | Net cash flows from operating activities | (73,976) | (89,395) | | Net cash flows from investing activities | (16,279) | 28,740 | | Net cash flows from financing activities | (1,538,874) | (422,428) | | Net (decrease) in cash and cash equivalents | (1,629,129) | (483,083) | | Cash and cash equivalents at end of period | 1,680,601 | 234,183 | Management Discussion and Analysis Mobile phone sales and revenue declined, leading to increased losses due to intense competition, despite strong growth in photovoltaic equipment sales; financial ratios deteriorated, prompting strategic adjustments for H2 2025 - For the six months ended June 30, 2025, mobile phone sales decreased by 35.22% year-on-year to 1,602 thousand units[13] - Operating revenue decreased by 13.80% year-on-year to RMB 8,219,463 thousand[13] - Net loss attributable to owners of the parent increased by 161.88% year-on-year to RMB 76,644 thousand, primarily due to intensified competition in the 3C industry leading to lower overall gross margins[13] - Net debt-to-equity ratio significantly increased from 465.89% as of December 31, 2024, to 17,578.40% as of June 30, 2025, a rise of 3,673.08%, mainly due to increased net debt and decreased total equity[29] - In the second half of 2025, the company will focus on deepening channel synergy, expanding its ecosystem, strategically developing new energy, and enhancing lean management to address market challenges and achieve annual targets[35][36][37][38] Business Review Mobile phone sales decreased by 35.22% and operating revenue by 13.80%, with net loss attributable to owners of the parent increasing by 161.88% due to intensified 3C industry competition H1 2025 Business Performance | Metric | H1 2025 | H1 2024 | Year-on-year Change | | :--- | :--- | :--- | :--- | | Mobile phone sales | 1,602 Thousand Units | 2,473 Thousand Units | -35.22% | | Operating revenue | RMB 8,219,463 Thousand | RMB 9,535,821 Thousand | -13.80% | | Net loss attributable to owners of the parent | RMB 76,644 Thousand | RMB 29,267 Thousand | 161.88% | - Increased loss primarily attributed to intensified competition in the 3C industry and market, leading to lower overall gross margins for the Group[13] Financial Position and Operating Results Net loss and loss per share increased significantly, operating revenue declined due to retail and wholesale downturns, despite strong photovoltaic sales; selling expenses and finance costs rose, and key financial ratios deteriorated H1 2025 Key Financial Performance | Metric | H1 2025 | H1 2024 | Year-on-year Change | | :--- | :--- | :--- | :--- | | Net loss | RMB 73,422 Thousand | RMB 29,077 Thousand | 152.51% | | Net loss attributable to owners of the parent | RMB 76,644 Thousand | RMB 29,267 Thousand | 161.88% | | Basic loss per share | RMB 0.09 | RMB 0.03 | 200.00% | Overview Net loss for the period increased by 152.51% to RMB 73.42 million, with loss attributable to owners of the parent rising by 161.88% to RMB 76.64 million, and basic loss per share at RMB 0.09 H1 2025 Loss Overview | Metric | H1 2025 (RMB Thousand) | H1 2024 (RMB Thousand) | Year-on-year Increase (%) | | :--- | :--- | :--- | :--- | | Net loss | (73,422) | (29,077) | 152.51% | | Net loss attributable to owners of the parent | (76,644) | (29,267) | 161.88% | | Basic loss per share (RMB/Share) | (0.09) | (0.03) | 200.00% | Operating Revenue Operating revenue decreased by 13.80% to RMB 8.22 billion, driven by declines in mobile communication sales, while photovoltaic equipment sales surged by 1,025.22% H1 2025 Operating Revenue Composition and Changes | Revenue Source | H1 2025 (RMB Thousand) | H1 2024 (RMB Thousand) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Total operating revenue | 8,219,463 | 9,535,821 | -13.80% | | Sales of mobile communication equipment and accessories | 7,234,052 | 9,109,805 | -20.59% | | Sales of photovoltaic equipment | 665,487 | 59,143 | 1,025.22% | | Mobile operator service revenue | 117,179 | 111,578 | 5.02% | | Revenue from providing online and offline sales and marketing services and other services | 202,745 | 219,462 | -7.62% | - The decrease in operating revenue was primarily due to declines in sales from both retail and wholesale businesses, as well as sales to franchisees[15] - Revenue from photovoltaic equipment sales significantly increased, becoming a new growth driver[17] Cost of Sales Cost of sales decreased by 13.92% to RMB 7.92 billion, a reduction consistent with the decline in operating revenue H1 2025 Cost of Sales | Metric | H1 2025 (RMB Thousand) | H1 2024 (RMB Thousand) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Cost of sales | 7,920,957 | 9,201,551 | -13.92% | - The decrease in cost of sales was largely consistent with the decrease in operating revenue[18] Gross Profit and Gross Margin Gross profit decreased by 10.70% to RMB 298.51 million, while the overall gross margin slightly increased from 3.51% to 3.63% H1 2025 Gross Profit and Gross Margin | Metric | H1 2025 (RMB Thousand) | H1 2024 (RMB Thousand) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Gross profit | 298,506 | 334,270 | -10.70% | | Overall gross margin | 3.63% | 3.51% | +0.12% | - Despite a decrease in gross profit, the overall gross margin slightly improved, indicating optimized cost control or product mix[19] Other Income and Gains Other income and gains increased by 46.60% to RMB 42.70 million, primarily driven by higher interest income H1 2025 Other Income and Gains | Metric | H1 2025 (RMB Thousand) | H1 2024 (RMB Thousand) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Other income and gains | 42,697 | 29,125 | 46.60% | - Increased interest income was the primary reason for the growth in other income and gains[20] Selling and Distribution Expenses Selling and distribution expenses increased by 9.00% to RMB 211.83 million, mainly due to higher marketing staff and rental costs for new stores H1 2025 Selling and Distribution Expenses | Metric | H1 2025 (RMB Thousand) | H1 2024 (RMB Thousand) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Selling and distribution expenses | 211,827 | 194,333 | 9.00% | - The increase in selling and distribution expenses was primarily due to higher marketing staff costs and rental costs for newly opened stores[21] Administrative Expenses Administrative expenses decreased by 9.15% to RMB 87.41 million, primarily due to improved administrative staff efficiency and cost reductions H1 2025 Administrative Expenses | Metric | H1 2025 (RMB Thousand) | H1 2024 (RMB Thousand) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Administrative expenses | 87,414 | 96,217 | -9.15% | - The reduction in administrative expenses resulted from improved efficiency of administrative staff and lower costs[22] Finance Costs Finance costs increased by 25.66% to RMB 96.10 million, primarily due to an increase in bank borrowings H1 2025 Finance Costs | Metric | H1 2025 (RMB Thousand) | H1 2024 (RMB Thousand) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Finance costs | 96,104 | 76,479 | 25.66% | - The increase in finance costs was mainly due to an increase in bank borrowing amounts[23] Other Expenses Other expenses increased to RMB 2.27 million from RMB -0.34 million in the prior year, primarily due to store closure losses H1 2025 Other Expenses | Metric | H1 2025 (RMB Thousand) | H1 2024 (RMB Thousand) | | :--- | :--- | :--- | | Other expenses | 2,269 | -342 | - The increase in other expenses was mainly due to losses from store closures[24] Income Tax Expense Income tax expense decreased by 21.66% to RMB 1.20 million, primarily due to the utilization of tax losses carried forward by certain profitable subsidiaries H1 2025 Income Tax Expense | Metric | H1 2025 (RMB Thousand) | H1 2024 (RMB Thousand) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Income tax expense | 1,201 | 1,533 | -21.66% | - The decrease in income tax expense was mainly due to certain profitable subsidiaries of the Group utilizing tax losses carried forward from previous years[25] Debt – Bank and Other Borrowings Total bank and other borrowings increased to RMB 4.82 billion as of June 30, 2025, primarily comprising short-term secured bank loans, indicating a shift towards short-term debt Bank and Other Borrowings (RMB Thousand) | Type | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Current bank loans (unsecured) | 1,547,550 | 1,396,893 | | Current bank loans (secured) | 3,277,300 | 1,563,200 | | Current other borrowings (unsecured) | – | 80,000 | | Current other borrowings (secured) | – | 622,000 | | Non-current unsecured borrowings | – | 72,800 | | Total | 4,824,850 | 3,734,893 | - Total borrowings increased, and all non-current borrowings have been reclassified as current, indicating a short-term shift in debt structure[26] Capital Expenditure Capital expenditure for H1 2025 was RMB 27.89 million, mainly for property, plant, and equipment acquisition and store renovations H1 2025 Capital Expenditure | Metric | H1 2025 (RMB Thousand) | | :--- | :--- | | Capital expenditure | 27,892 | - Capital expenditure was primarily used for the acquisition of fixed assets and store renovations[27] Key Financial Ratios Current ratio slightly decreased to 0.98, debt-to-asset ratio rose to 99.72%, and net debt-to-equity ratio surged to 17,578.40%, indicating significantly increased financial risk Changes in Key Financial Ratios | Item | June 30, 2025 | December 31, 2024 | Change | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Current Ratio | 0.98 | 0.99 | (0.01) | (1.01%) | | Debt-to-asset Ratio | 99.72% | 98.31% | 1.41% | 1.43% | | Net Debt-to-equity Ratio | 17,578.40% | 465.89% | 17,112.51% | 3,673.08% | - The net debt-to-equity ratio significantly increased, primarily due to increased net debt and decreased total equity, indicating a substantial rise in the company's financial leverage and risk[29] Significant Acquisitions and Disposals No significant acquisitions or disposals occurred during the six months ended June 30, 2025 - No significant acquisition or disposal activities during the reporting period[30] Contingent Liabilities No contingent liabilities existed at the end of the reporting period - No contingent liabilities during the reporting period[30] Exchange Rate Risk Operating primarily in mainland China with RMB-settled transactions, foreign currency risk is limited to USD and HKD denominated bank deposits and receivables, with no hedging - Primary operations are in mainland China, with transactions and assets/liabilities denominated in RMB[30] - Foreign currency risk primarily arises from bank deposits and other receivables denominated in USD and HKD, with no hedging undertaken[30] Pledge of Assets As of June 30, 2025, the Group had RMB 2.96 billion in pledged deposits and RMB 191.25 million in pledged financial assets measured at fair value Pledge of Assets as of June 30, 2025 | Pledged Asset Type | Amount (RMB Thousand) | | :--- | :--- | | Pledged deposits | 2,964,052 | | Financial assets measured at fair value | 191,251 | Significant Investments No other significant investment projects were undertaken during the six months ended June 30, 2025 - No significant investment projects during the reporting period[31] Equity Arrangements No equity subscriptions were undertaken, nor were any equity plans formulated during the six months ended June 30, 2025 - No equity subscriptions were undertaken, nor were any equity plans formulated during the reporting period[31] Share Capital No significant changes occurred in the company's share capital structure during the six months ended June 30, 2025 - No significant changes in share capital structure during the reporting period[31] Material Events After Reporting Period The company proposes to abolish the Supervisory Committee, transitioning its duties to the Audit Committee, and to revise governance documents to comply with new regulations on hybrid general meetings and electronic voting - It is proposed that the Supervisory Committee will no longer be established, and its responsibilities will transition to the Audit Committee[32] - It is proposed to revise the Articles of Association and the Rules of Procedure for the Board and General Meetings to comply with the latest requirements of the Company Law and HKEX Listing Rules regarding hybrid general meetings and electronic voting[32] Employees and Remuneration Policy As of June 30, 2025, the Group had 2,357 employees, with remuneration expenses and benefits totaling RMB 152.52 million, offering competitive compensation and various training programs Employee and Remuneration Information | Metric | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Number of employees | 2,357 Persons | 2,478 Persons | | Remuneration expenses and employee benefits (for the six months ended June 30) | RMB 152,522 Thousand | RMB 150,521 Thousand | - The company provides position-based salaries, performance-based pay, social insurance, and housing provident funds, along with various forms of employee training in professional ethics, product knowledge, and management skills[34] Business Outlook for H2 2025 D.Phone considers 2025 crucial for strengthening its core business and accelerating transformation, focusing on channel synergy, ecosystem expansion, new energy development, and lean management to enhance efficiency and profitability in H2 - 2025 is a critical year for D.Phone to strengthen its core business foundation and accelerate innovative transformation[35] - The company will continue to address market challenges such as stricter vendor channel control and declining operator remuneration policies[35] - Strategic directions include deepening channel synergy (offline store upgrades, online platform expansion, private domain development), focusing on core business (strengthening brand cooperation, expanding IoT categories, cultivating after-sales market), strategically developing new energy (optimizing photovoltaic business model, expanding industrial and commercial photovoltaic market), and enhancing lean management (cost reduction and efficiency improvement, financial management optimization, risk control strengthening, digital operation upgrade)[35][36][37][38] Other Information The Board does not recommend an interim dividend; details are provided on interests of directors, supervisors, and major shareholders, along with updates on director appointments and compliance with corporate governance codes - The Board does not recommend the payment of any interim dividend for the six months ended June 30, 2025[39] - Disclosed the interests and short positions of directors, supervisors, and chief executives in the company's shares, as well as the shareholdings of major shareholders, including the Liu family, Huafa Technology Industry Group, and Zhuhai Huafa Group Co., Ltd[40][44][45][46] - The company has adopted and confirmed compliance with the Corporate Governance Code set out in Appendix C1 of the Listing Rules and the Model Code for Securities Transactions by Directors of Listed Issuers[53][55] - After the reporting period, there were changes in the positions of executive directors Ms. Xu Jili and Ms. Xu Liping, and non-executive directors Mr. Jia Zhaojie and Ms. Pan Anran[58][59][60] Interim Dividend The Board does not recommend the payment of any interim dividend for the six months ended June 30, 2025 - The Board does not recommend the payment of an interim dividend[39] Interests and Short Positions of Directors, Supervisors and Chief Executive in Shares, Underlying Shares and Debentures of the Company or any Associated Corporation As of June 30, 2025, Executive Director Mr. Liu Donghai held significant interests in domestic shares through controlled entities and parties acting in concert, while other directors and supervisors reported no other disclosable interests Mr. Liu Donghai's Interests in the Company | Director Name | Share Class | Nature of Interest | Number of Shares Held (Long Position) | % of Relevant Share Class | % of Total Share Capital | | :--- | :--- | :--- | :--- | :--- | :--- | | Liu Donghai | Domestic Shares | Interest in controlled corporation | 168,362,098 | 49.86 | 18.99 | | Liu Donghai | Domestic Shares | Parties acting in concert | 169,337,902 | 50.14 | 19.10 | - Mr. Liu Donghai is deemed to have interests in the company's domestic shares through D.Phone Technology Group Co., Ltd. and an acting in concert agreement with Huafa Technology Industry Group Co., Ltd[42] Interests and Short Positions of Substantial Shareholders in Shares and Underlying Shares of the Company As of June 30, 2025, substantial shareholders, including the Liu family, D.Phone Technology, Huafa Technology Industry Group, and their affiliates, held significant interests in the company's domestic or H shares Interests of Substantial Shareholders in the Company (Partial Example) | Shareholder Name | Share Class | Nature of Interest | Number of Shares Held (Long Position) | % of Relevant Share Class | % of Total Share Capital | | :--- | :--- | :--- | :--- | :--- | :--- | | Liu Yongmei | Domestic Shares | Interest in controlled corporation | 168,362,098 | 49.86 | 18.99 | | Huafa Technology Industry Group | Domestic Shares | Beneficial owner | 169,337,902 | 50.14 | 19.10 | | Zhuhai Huafa Group Co., Ltd. | Domestic Shares | Interest in controlled corporation | 337,700,000 | 100.00 | 38.09 | | D.Phone Holdings Limited | H Shares | Beneficial owner | 327,057,912 | 59.60 | 36.90 | | Zhongyi Capital Co., Ltd. | H Shares | Beneficial owner | 77,000,000 | 14.03 | 8.69 | - Huafa Group, through direct shareholding and acting in concert agreements, jointly controls approximately 74.99% of the company's total voting rights[76] - D.Phone Technology pledged 63,270,000 domestic shares to Beijing Jingdixun Technology Co., Ltd. on January 28, 2021, as security for a credit line for goods delivery[51] Rights of Directors and Supervisors to Acquire Shares or Debentures Neither the company nor its subsidiaries granted or entered into any arrangements for directors or supervisors to acquire shares or debentures during the six months ended June 30, 2025 - During the reporting period, no rights were granted to or exercised by directors or supervisors to purchase shares or debentures of the company[52] Corporate Governance Practices The company has adopted and complied with the Corporate Governance Code, with the exception of the combined roles of Chairman and CEO, which the Board believes maintains operational efficiency - The company has adopted and complied with most of the recommended best practices in the Corporate Governance Code[53] - The Chairperson (Ms. Xu Jili) also serves as the President, an arrangement the Board believes helps maintain the company's operational efficiency[54] Model Code for Securities Transactions The company adopted the Model Code for securities transactions by directors and supervisors, with all confirming compliance during the reporting period - The company has adopted and complied with the Model Code for Securities Transactions by Directors of Listed Issuers[55] Purchase, Sale or Redemption of the Company's Listed Securities Neither the company nor its subsidiaries purchased, sold, or redeemed any listed securities, nor held any treasury shares during the six months ended June 30, 2025 - During the reporting period, neither the company nor its subsidiaries purchased, sold, or redeemed any listed securities, nor held any treasury shares[56] Audit Committee The Audit Committee, composed of Mr. Cai Zhenhui (Chairman), Mr. Lu Tingjie, and Ms. Pan Anran, has reviewed the Group's unaudited interim consolidated results and this interim report for H1 2025 - The Audit Committee has reviewed the Group's unaudited interim condensed consolidated results and this interim report for the six months ended June 30, 2025[57] Changes in Information of Directors, Supervisors and Chief Executive Post-reporting period, executive directors Ms. Xu Jili and Ms. Xu Liping, and non-executive directors Mr. Jia Zhaojie and Ms. Pan Anran experienced changes in their roles, mainly within Huafa Group subsidiaries - Ms. Xu Jili resigned from her positions as Chairperson, Director, and General Manager of Huafa Integrated Development Co., Ltd. and other related roles[58] - Ms. Xu Liping resigned as General Manager and Executive Director of Zhuhai Chuanghua International Trading Co., Ltd. and Zhuhai Zhihua International Trading Co., Ltd., and was appointed Chairperson of Huafa Trading and Director of Huafa Integrated Development[58] - Mr. Jia Zhaojie resigned as Executive Director and General Manager of Shanghai Zhaohua International Trading Co., Ltd. and Nantong Yaohua International Trading Co., Ltd., and was appointed Director of Huafa Trading[59] - Ms. Pan Anran was appointed Director of Huafa Trading[60] Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income For H1 2025, revenue was RMB 8.22 billion, gross profit RMB 298.51 million, with a loss for the period of RMB 73.42 million and basic loss per share of RMB 0.09 Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the Six Months Ended June 30) | Metric | 2025 (RMB Thousand) | 2024 (RMB Thousand) | | :--- | :--- | :--- | | Revenue | 8,219,463 | 9,535,821 | | Cost of sales | (7,920,957) | (9,201,551) | | Gross profit | 298,506 | 334,270 | | Other income and gains | 42,697 | 29,125 | | Selling and distribution expenses | (211,827) | (194,333) | | Administrative expenses | (87,414) | (96,217) | | Finance costs | (96,104) | (76,497) | | Loss for the period | (73,422) | (29,077) | | Loss attributable to owners of the parent | (76,644) | (29,267) | | Basic loss per share (RMB/Share) | (0.09) | (0.03) | Interim Condensed Consolidated Statement of Financial Position As of June 30, 2025, total assets were RMB 9.48 billion, with net current liabilities of RMB (211.87) million, and equity attributable to owners of the parent at RMB (1.40) billion Interim Condensed Consolidated Statement of Financial Position (As of June 30) | Metric | June 30, 2025 (RMB Thousand) | December 31, 2024 (RMB Thousand) | | :--- | :--- | :--- | | Total non-current assets | 321,629 | 334,451 | | Total current assets | 9,156,442 | 10,061,524 | | Total assets | 9,478,071 | 10,395,975 | | Total current liabilities | 9,368,314 | 10,127,462 | | Total non-current liabilities | 91,870 | 177,255 | | Net assets | 17,887 | 91,258 | | Equity attributable to owners of the parent | (1,396,631) | (1,320,038) | | Non-controlling interests | 1,414,518 | 1,411,296 | | Total equity | 17,887 | 91,258 | - Net current liabilities expanded from RMB (65,938) thousand as of December 31, 2024, to RMB (211,872) thousand as of June 30, 2025, indicating increased short-term solvency pressure[66] Interim Condensed Consolidated Statement of Changes in Equity As of June 30, 2025, total equity attributable to owners of the parent further decreased to RMB (1.40) billion due to the loss for the period, with total equity at RMB 17.89 million Interim Condensed Consolidated Statement of Changes in Equity (For the Six Months Ended June 30) | Metric | June 30, 2025 (RMB Thousand) | December 31, 2024 (RMB Thousand) | | :--- | :--- | :--- | | Total equity attributable to owners of the parent | (1,396,631) | (1,320,038) | | Non-controlling interests | 1,414,518 | 1,411,296 | | Total equity | 17,887 | 91,258 | - The loss for the period led to a further reduction in retained profits attributable to owners of the parent, consequently decreasing total equity attributable to owners of the parent[69] Interim Condensed Consolidated Statement of Cash Flows For H1 2025, net cash flows used in operating, investing, and financing activities were RMB (73.98) million, RMB (16.28) million, and RMB (1.54) billion, respectively, resulting in a significant decrease in cash and cash equivalents Interim Condensed Consolidated Statement of Cash Flows (For the Six Months Ended June 30) | Metric | 2025 (RMB Thousand) | 2024 (RMB Thousand) | | :--- | :--- | :--- | | Net cash flows (used in) operating activities | (73,976) | (89,395) | | Net cash flows (used in) / from investing activities | (16,279) | 28,740 | | Net cash flows (used in) financing activities | (1,538,874) | (422,428) | | Net (decrease) in cash and cash equivalents | (1,629,129) | (483,083) | | Cash and cash equivalents at end of period | 1,680,601 | 234,183 | - A significant increase in cash outflow from financing activities was the primary reason for the net decrease in cash and cash equivalents[74] Notes to the Interim Condensed Consolidated Financial Information Provides detailed notes on company information, accounting policies, operating segments, revenue, loss before tax, income tax, loss per share, assets, liabilities, equity, contingencies, commitments, related party transactions, and fair value of financial instruments - Huafa Group collectively held approximately 56.00% of the company's equity during the reporting period and, together with acting in concert agreements, jointly controlled approximately 74.99% of the company's total voting rights[76] - First-time adoption of amendments to IAS 21, but with no significant impact on the interim condensed consolidated financial information[78][79] - Revenue is analyzed by type of goods or services and point in time of revenue recognition, with significant growth in photovoltaic equipment sales revenue[82][83][84] - Total trade receivables and bills receivable amounted to RMB 1,618,952 thousand, with the highest proportion being receivables aged over 180 days[90][91] - Total interest-bearing bank and other borrowings amounted to RMB 4,824,850 thousand, primarily short-term secured bank loans, with interest rates ranging from 1.30% to 3.60%[93] - Related party transactions include sales of goods, provision of services, and financing arrangements with companies controlled by Huafa Group[99][100] Company and Group Information The company, a Chinese joint stock limited company, primarily sells mobile communication equipment and services; Huafa Group is the controlling shareholder, jointly controlling approximately 74.99% of total voting rights - The company primarily engages in the sale of mobile communication equipment and accessories and the provision of related services[76] - Huafa Group is the controlling shareholder of the company, collectively holding approximately 56.00% of the company's equity during the reporting period and, together with acting in concert agreements, jointly controlling approximately 74.99% of the company's total voting rights[76] Basis of Preparation Interim condensed consolidated financial information is prepared under IAS 34 and should be read with the annual consolidated financial statements for the year ended December 31, 2024 - The financial information is prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting'[77] - It should be read in conjunction with the annual consolidated financial statements for the year ended December 31, 2024[77] Changes in Accounting Policies and Disclosures Accounting policies are consistent with the prior year, with the first-time adoption of amended IAS 21 'Lack of Exchangeability' having no impact on the Group's financial information - First-time adoption of the amended International Accounting Standard 21 'Lack of Exchangeability'[78][79] - This amendment had no impact on the interim condensed consolidated financial information, as all the Group's transaction currencies are exchangeable[79] Operating Segment Information The Group operates in two segments: traditional (mobile communication) and new businesses (e.g., photovoltaic equipment); no single customer accounted for over 10% of total revenue - The Group is divided into two reportable operating segments: traditional operations (mobile communication related) and newly developed businesses (sales of automobiles, photovoltaic equipment, and others)[83] - No single customer accounted for more than 10% of total revenue during the reporting period[81] Revenue, Other Income and Gains Revenue is primarily from mobile communication and photovoltaic equipment sales, with photovoltaic sales surging by 1,025.22%; other income and gains, mainly interest income, also increased significantly H1 2025 Revenue Composition | Type of goods or services | 2025 (RMB Thousand) | 2024 (RMB Thousand) | | :--- | :--- | :--- | | Sales of mobile communication equipment and accessories | 7,234,052 | 9,109,805 | | Sales of photovoltaic equipment | 665,487 | 59,143 | | Mobile operator service revenue | 117,179 | 111,578 | | Revenue from providing online and offline sales and marketing services | 51,747 | 58,113 | | Other service fee income | 150,998 | 161,349 | | Total revenue from contracts with customers | 8,219,463 | 9,535,821 | - Revenue from photovoltaic equipment sales surged by 1,025.22% year-on-year[82] H1 2025 Other Income and Gains | Other income | 2025 (RMB Thousand) | 2024 (RMB Thousand) | | :--- | :--- | :--- | | Interest income | 36,304 | 14,605 | | Government grants | 2,507 | 3,617 | | Others | 3,886 | 10,903 | | Total | 42,697 | 29,125 | - Interest income was the primary driver for the growth in other income and gains[84] Loss Before Tax Loss before tax from continuing operations expanded to RMB (72.22) million, influenced by cost of sales, depreciation, amortization, finance costs, and financial asset impairment H1 2025 Loss Before Tax Composition (Partial) | Item | 2025 (RMB Thousand) | 2024 (RMB Thousand) | | :--- | :--- | :--- | | Cost of inventories sold and services rendered | 7,920,957 | 9,201,551 | | Depreciation of property, plant and equipment | 7,663 | 7,065 | | Depreciation of right-of-use assets | 58,749 | 56,027 | | Interest on lease liabilities | 4,665 | 4,019 | | Impairment and write-off of trade receivables | 11,725 | 14,739 | | Impairment and write-off of other receivables | 10,399 | 6,219 | | Impairment/(reversal of impairment) of inventories | 129 | (516) | - The expanded loss before tax reflects the combined impact of factors such as cost of sales, depreciation, finance costs, and impairment of financial assets[85] Income Tax Income tax expense decreased by 21.66% to RMB 1.20 million, primarily due to profitable subsidiaries utilizing carried-forward tax losses; statutory tax rate is 25%, with some subsidiaries at 15% H1 2025 Income Tax Expense | Item | 2025 (RMB Thousand) | 2024 (RMB Thousand) | | :--- | :--- | :--- | | Current tax expense | 1,201 | 1,612 | | Deferred tax | – | (79) | | Total tax expense for the period | 1,201 | 1,533 | - The decrease in income tax expense was mainly due to certain profitable subsidiaries of the Group utilizing tax losses carried forward from previous years[86] Loss Per Share Attributable to Ordinary Equity Holders of the Parent Basic loss per share increased to RMB 0.09 for H1 2025, from RMB 0.03 in the prior year, with no issued potential dilutive ordinary shares H1 2025 Loss Per Share Calculation | Metric | 2025 (RMB Thousand/Share) | 2024 (RMB Thousand/Share) | | :--- | :--- | :--- | | Loss attributable to ordinary equity holders of the parent used in the basic loss per share calculation | (76,644) | (29,267) | | Weighted average number of ordinary shares | 886,460,400 | 886,460,400 | | Basic loss per share (RMB/Share) | (0.09) | (0.03) | - There were no issued potential dilutive ordinary shares during the reporting period, thus basic and diluted loss per share were identical[88] Property, Plant and Equipment For H1 2025, the Group acquired RMB 27.89 million in property, plant, and equipment and disposed of assets with a net book value of RMB 0.52 million, incurring a net loss of RMB 0.15 million H1 2025 Changes in Property, Plant and Equipment | Item | H1 2025 (RMB Thousand) | H1 2024 (RMB Thousand) | | :--- | :--- | :--- | | Cost of additions | 27,892 | 17,476 | | Net book value of disposals | 515 | 194 | | Net loss on disposal | 153 | 35 | Trade Receivables and Bills Receivable As of June 30, 2025, total trade receivables and bills receivable were RMB 1.62 billion, with the largest portion, RMB 1.16 billion, aged over 180 days, indicating higher recovery risk Trade Receivables and Bills Receivable (RMB Thousand) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Trade receivables | 2,733,484 | 2,732,370 | | Bills receivable | 122,673 | 3,620 | | Less: Impairment of trade receivables | (1,237,205) | (1,225,249) | | Total | 1,618,952 | 1,510,741 | Aging Analysis of Trade Receivables and Bills Receivable (RMB Thousand) | Aging | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Within 90 days | 178,306 | 351,596 | | 91 to 180 days | 280,573 | 331,957 | | Over 180 days | 1,160,073 | 827,188 | | Total | 1,618,952 | 1,510,741 | - Trade receivables aged over 180 days constitute a significant portion, potentially indicating higher credit risk[91] Cash and Cash Equivalents and Pledged Deposits As of June 30, 2025, cash and cash equivalents were RMB 1.68 billion, and pledged deposits were RMB 2.96 billion, primarily collateral for bank acceptance bills Cash and Cash Equivalents and Pledged Deposits (RMB Thousand) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and bank balances | 1,680,601 | 3,309,731 | | Pledged time deposits | 2,964,052 | 2,135,073 | | Total | 4,644,653 | 5,444,804 | - Pledged deposits are primarily used as collateral for bank acceptance bills, representing a significant amount[92] Interest-bearing Bank and Other Borrowings As of June 30, 2025, total interest-bearing bank and other borrowings were RMB 4.82 billion, all current, with a large portion being secured bank loans at rates from 1.30% to 3.60% Interest-bearing Bank and Other Borrowings (RMB Thousand) | Type | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Current bank loans (unsecured) | 1,547,550 | 1,396,893 | | Current bank loans (secured) | 3,277,300 | 1,563,200 | | Total | 4,824,850 | 3,734,893 | - Bank loans and other borrowings are secured by pledged deposits and financial assets measured at fair value[94] - Interest rates on borrowings ranged from 1.30% to 3.60%[93] Trade Payables and Bills Payable As of June 30, 2025, total trade payables and bills payable significantly decreased to RMB 324.13 million, with the largest portion aged within 90 days Trade Payables and Bills Payable (RMB Thousand) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Trade payables | 150,071 | 145,844 | | Bills payable | 174,060 | 781,157 | | Total | 324,131 | 927,001 | Aging Analysis of Trade Payables and Bills Payable (RMB Thousand) | Aging | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Within 90 days | 174,349 | 503,580 | | 91 to 180 days | 1,501 | 364,156 | | Over 180 days | 148,281 | 59,265 | | Total | 324,131 | 927,001 | - Total trade payables and bills payable significantly decreased, with a notable reduction in bills payable[95] Share Capital As of June 30, 2025, the company's registered, issued, and fully paid ordinary shares totaled 886,460,400 at RMB 1 par value, with total share capital of RMB 886.46 million, unchanged from December 31, 2024 Share Capital Information (RMB Thousand) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Registered, issued and fully paid ordinary shares (886,460,400 shares) | 886,460 | 886,460 | - No changes in share capital during the reporting period[96] Contingent Matters No significant contingent matters existed for the Group as of the end of the reporting period - No significant contingent matters at the end of the reporting period[96] Commitments No significant capital commitments existed for the Group as of the end of the reporting period - No significant capital commitments at the end of the reporting period[97] Related Party Transactions The Group conducted various transactions with related parties, including sales, services, and financing, with interest rates from 2.15% to 6.00%, and had outstanding trade and financing balances as of June 30, 2025 H1 2025 Major Related Party Transactions (RMB Thousand) | Type of transaction | 2025 | 2024 | | :--- | :--- | :--- | | Sales of goods to companies controlled by Huafa Group | 109,067 | 61,266 | | Revenue from providing online and offline sales and marketing services to companies controlled by Huafa Group | 51,747 | 58,113 | | Related party financing received | 693,000 | 896,528 | | Related party financing repaid | 2,283,000 | 935,709 | | Purchases of goods from joint ventures | 10,157 | 17,496 | | Sales of goods to joint ventures | 23,565 | 35,735 | - Related party financing interest rates ranged from 2.15% to 6.00%, comparable to market rates[99] Major Outstanding Balances with Related Parties as of June 30, 2025 (RMB Thousand) | Type of balance | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total trade receivables from related parties | 746,993 | 842,510 | | Total trade payables to related parties | 42 | 96 | | Financing payables to related parties (companies controlled by Huafa Group) | 3,101,000 | 4,691,000 | | Total other non-trade receivables from related parties | 216,372 | 308,484 | | Total other non-trade payables to related parties | 244,451 | 254,908 | Fair Value and Fair Value Hierarchy of Financial Instruments Fair values of short-term financial instruments approximate their carrying amounts; unlisted equity investments are valued using market techniques based on unobservable market data - The fair value of short-term financial instruments approximates their carrying amounts[101] - The fair value of unlisted equity investments is estimated using market valuation techniques and based on assumptions unsupported by observable market prices or rates[102] Assets Measured at Fair Value (June 30, 2025, RMB Thousand) | Item | Level 1 | Level 2 | Level 3 | Total | | :--- | :--- | :--- | :--- | :--- | | Equity investments designated at fair value | – | – | 22,957 | 22,957 | | Financial assets measured at fair value | – | 191,251 | – | 191,251 | | Bills receivable | – | 122,673 | – | 122,673 | | Total | – | 313,924 | 22,957 | 336,881 | Dividends The Board does not recommend the payment of any interim dividend for the six months ended June 30, 2025 - The Board does not recommend the payment of an interim dividend[105] Approval of Interim Condensed Consolidated Financial Information The Board approved and authorized the publication of the interim condensed consolidated financial information on August 27, 2025 - The Board approved and authorized for issue the interim condensed consolidated financial information on August 27, 2025[106]