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华视集团控股(01111) - 2025 - 中期财报
HUASHI GROUPHUASHI GROUP(HK:01111)2025-09-30 08:31

Company Information Company Information Overview This chapter provides an overview of Huashi Group Holdings Limited's corporate structure, including board members, committee composition, registered offices, and listing information - The Board of Directors includes Executive Directors Mr. Chen Jicheng (Chairman and CEO), Ms. Chen Jizhen (Vice Chairman, appointed on March 27, 2025), Mr. Zhang Bei, Ms. Xue Yuchun, Ms. Wang Shujin (retired on June 27, 2025), and Independent Non-executive Directors Dr. He Weifeng, Mr. Peng Litang, Mr. Li Guangdou, and Mr. Hou Siming (resigned on June 27, 2025)5 - The company has an Audit Committee (Chairman: Dr. He Weifeng), a Remuneration Committee (Chairman: Mr. Peng Litang), and a Nomination Committee (Chairman: Mr. Chen Jicheng)5 - The company was listed on the Stock Exchange on November 10, 2023, with stock code 11117 Financial Highlights Financial Highlights Overview This chapter outlines Huashi Group's key financial performance and position for the six months ended June 30, 2025, showing significant growth in revenue, gross profit, and profit for the period, alongside an expanded asset base but a substantial increase in current liabilities Financial Performance for the Six Months Ended June 30 (RMB million) | Indicator | 2025 (Unaudited) (RMB million) | 2024 (Unaudited) (RMB million) | Year-on-year Change | | :--- | :--- | :--- | :--- | | Revenue | 155.4 | 123.2 | 26.1% | | Gross Profit | 108.0 | 75.0 | 44.0% | | Profit Before Income Tax | 65.0 | 44.1 | 47.4% | | Profit for the Period | 53.7 | 35.9 | 49.6% | | Adjusted Net Profit | 53.7 | 35.9 | 49.6% | Financial Position (RMB million) | Indicator | As at June 30, 2025 (Unaudited) (RMB million) | As at December 31, 2024 (Audited) (RMB million) | Change | | :--- | :--- | :--- | :--- | | Non-current Assets | 101.2 | 60.3 | 67.8% | | Current Assets | 581.9 | 462.4 | 25.8% | | Current Liabilities | 265.6 | 150.7 | 76.2% | | Non-current Liabilities | 20.5 | 28.7 | (28.6)% | | Total Equity Attributable to Owners of the Company | 397.0 | 343.2 | 15.7% | Management Discussion and Analysis Business Review Huashi Group maintained stable operations in H1 2025, strengthening professional services, consolidating partnerships, and launching its first AI digital product, 'Huashi•Flash BAO', to drive innovation and market expansion - The Group maintained stable overall operations, continuously strengthening professional service skills and consolidating business cooperation relationships to provide high-quality one-stop services to clients11 - The Group deepened technological innovation and accelerated AI business incubation, with its first AI digital product 'Huashi•Flash BAO' initiating internal testing in July, featuring IP image customization, AIGC video generation, and digital human interaction, and debuting at the '2025 China Cultural Tourism Industry Expo' in September12 - During the reporting period, the Group signed strategic cooperation agreements with a leading domestic steel structure enterprise, a local government in Hubei Province, and several other companies, covering 'new infrastructure + AI media', digital economy industry incubation, urban brand IP construction, smart cultural tourism platform development, digital human IP customization, and AIGC video generation14 - During the reporting period, the Group recorded total revenue of RMB 155.4 million and signed contracts totaling RMB 715.1 million with clients, of which 96.2% of services have been provided15 Business Summary As a brand, advertising, and marketing service provider in Hubei Province, China, Huashi Group maintained stable operations in H1 2025, deepening technological innovation, accelerating AI business incubation with its first AI digital product 'Huashi•Flash BAO', and signing strategic cooperation agreements to achieve steady profitability growth - The Group is a brand, advertising, and marketing service provider in Hubei Province, China, offering full value chain services from market research to project execution10 - The global economy remains under pressure, with global GDP growth revised down to 2.3% in 2025; the domestic economy is stable and improving, with China's GDP growing 5.3% year-on-year in H1 and total retail sales of consumer goods increasing 5.0% year-on-year10 - The Group launched its first AI digital product 'Huashi•Flash BAO', featuring IP image customization, AIGC video generation, and digital human interaction, applicable in smart government and digital cultural tourism scenarios12 Brand Services The Group deepened its brand services, leveraging AI technology to enhance creative planning and marketing content efficiency, and exploring a 'government + enterprise + scenic area' cooperation model to promote urban tourism transformation, with brand service revenue growing 5.1% year-on-year to RMB 52.6 million during the reporting period - Brand service revenue was RMB 52.6 million, representing a year-on-year increase of 5.1%16 - The Group uses AI technology to drive innovation in brand services, focusing on improving creative planning and marketing content efficiency17 - Exploring a 'government + enterprise + scenic area' cooperation model, the Group promotes urban tourism transformation towards 'three-dimensional, intelligent, and all-encompassing' approaches, successfully facilitating the inclusion of Guifeng Mountain Scenic Area in Macheng, Huanggang City, Hubei Province, as a National 5A-level tourist attraction17 Online Media Advertising Services The Group provides online media advertising services, enhancing precise targeting and data management capabilities through optimized advertising strategies and digital systems, and actively exploring AI digital human technology applications, with revenue for this business decreasing 10.8% year-on-year to RMB 17.8 million during the reporting period - Online media advertising service revenue was RMB 17.8 million, representing a year-on-year decrease of 10.8%18 - By optimizing advertising strategies and digital systems, the Group continuously enhances its capabilities in precise targeting, data management and analysis, and automated monitoring and evaluation19 - Leveraging big data and AI technology for multi-dimensional data collection, processing, and analysis, the Group actively explores AI digital human technology and its application prospects19 Event Execution and Production Services The Group provides event execution and production services, integrating traditional and digital interactive marketing advantages, and enhancing marketing effectiveness through a media resource matrix and customized services, with revenue for this business increasing 13.5% year-on-year to RMB 31.0 million during the reporting period - Event execution and production service revenue was RMB 31.0 million, representing a year-on-year increase of 13.5%20 - Integrating the advantages of traditional marketing and digital interactive marketing, the Group deeply explores the potential of mixed-scenario marketing models, precisely reaching potential users through the internet21 - Successfully hosted the 'Caidian District 2025 Cultural Tourism Consumption Season Launch Ceremony', enhancing the fun of visits through smart interactive devices such as AI check-in points21 Advertising Placement Services The Group provides advertising placement services, continuously improving advertising efficiency and return on investment through diversified placement strategies and an expanded list of partners, with revenue for this business significantly increasing 135.6% year-on-year to RMB 43.9 million during the reporting period - Advertising placement service revenue was RMB 43.9 million, representing a year-on-year increase of 135.6%22 - Clients adopt diversified placement strategies through the platform for different target audiences, improving media operation efficiency and return on investment24 - Actively expanding its list of partners and integrating media resources with different characteristics to meet personalized marketing needs and promote sustainable business development24 Business Outlook Huashi Group will closely monitor industry trends and consolidate its market position, with strategic priorities including strengthening AI technology R&D and application, enhancing industry competitiveness, expanding business layout (including the Yangtze River Delta, Greater Bay Area, and overseas markets), reinforcing budget control for cost reduction and efficiency improvement, and building a professional talent pipeline to drive overall revenue growth - Strengthen AI technology R&D and application, utilizing AI to reshape the media business matrix and explore more AI-empowered commercial scenarios25 - Enhance industry competitiveness, continuously delivering high-quality projects, strengthening brand image, and attracting more strategic cooperation opportunities25 - Expand business layout, consolidating advantages in the Hubei region while accelerating business expansion and office establishment in economically active areas such as the Yangtze River Delta and Greater Bay Area, and exploring overseas business opportunities25 - Strengthen budget control for cost reduction and efficiency improvement, focusing on core businesses, optimizing resource allocation, and gradually promoting new technology coverage across business processes to reduce labor costs25 - Build a professional talent pipeline, recruiting technical and marketing talents, and improving training systems and incentive mechanisms25 Financial Review Huashi Group's total revenue increased 26.1% year-on-year to RMB 155.4 million during the reporting period, with significant improvements in gross profit and net profit margin; business segments showed mixed performance, with strong growth in advertising placement and rebate businesses, while online media advertising services slightly decreased; cash and cash equivalents decreased primarily due to increased software platform development expenditures, and the gearing ratio slightly increased - Total revenue increased by 26.1% from RMB 123.2 million for the six months ended June 30, 2024, to RMB 155.4 million for the reporting period26 - Profit for the period was RMB 53.7 million, with a net profit margin of 34.6%, an increase from 29.1% in the same period last year36 - As at June 30, 2025, cash and cash equivalents were RMB 80.7 million, a decrease of RMB 19.7 million from RMB 100.4 million as at December 31, 2024, primarily due to increased software platform development expenditures33 Revenue Breakdown by Service Type During the reporting period, the Group's total revenue increased 26.1% year-on-year to RMB 155.4 million, with brand services, event execution and production services, advertising placement services, and media partner rebate businesses all achieving growth, with advertising placement services showing the largest increase, while online media advertising services revenue slightly decreased Revenue Breakdown by Service Type (RMB thousand) | Service Type | 2025 (RMB thousand) (Unaudited) | % of Total Revenue | 2024 (RMB thousand) (Unaudited) | % of Total Revenue | | :--- | :--- | :--- | :--- | :--- | | Brand Services | 52,579 | 33.8 | 50,004 | 40.6 | | Event Execution and Production Services | 31,037 | 20.0 | 27,345 | 22.2 | | Advertising Placement Services | 43,911 | 28.3 | 18,635 | 15.1 | | Rebates from Media Partners | 10,038 | 6.5 | 7,319 | 5.9 | | Online Media Advertising Services | 17,790 | 11.4 | 19,942 | 16.2 | | Total | 155,355 | 100 | 123,245 | 100 | - Revenue from 'Advertising Placement Services' increased significantly year-on-year, driving a synchronous increase in revenue from 'Rebates from Media Partners' business27 - Revenue from 'Online Media Advertising Services' slightly decreased year-on-year, primarily due to an increased proportion of services provided to related advertising agencies, with direct costs for this business deducted from total revenue on a net basis27 Cost of Services During the reporting period, cost of services decreased 1.9% year-on-year to RMB 47.4 million, primarily because direct costs for services provided to related advertising agencies in online media advertising services were deducted from total revenue on a net basis - Cost of services decreased from RMB 48.3 million in the same period of 2024 to RMB 47.4 million in the reporting period28 - The decrease was primarily due to an increased proportion of services provided to related advertising agencies in the online media advertising services business, with their direct costs deducted from total revenue on a net basis28 Gross Profit and Gross Profit Margin During the reporting period, gross profit increased 44.0% year-on-year to RMB 108.0 million, and the gross profit margin improved from 60.8% to 69.5%, mainly attributable to significant revenue growth from advertising placement services, media partner rebates, and online media advertising services recognized on a net basis - Gross profit increased by 44.0% from RMB 75.0 million in the same period of 2024 to RMB 108.0 million in the reporting period29 - Gross profit margin increased from 60.8% in the same period of 2024 to 69.5% in the reporting period29 - The increase in gross profit and gross profit margin was primarily due to significant revenue growth from advertising placement services, rebates from media partners, and online media advertising services recognized on a net basis29 Other Income and Gains, Net During the reporting period, other income and gains, net, decreased 69.9% year-on-year to RMB 0.4 million, primarily due to lower interest income and exchange gains, and the absence of government grants in the current period - Other income and gains, net, decreased from RMB 1.2 million in the same period of 2024 to RMB 0.4 million in the reporting period30 - The decrease was primarily due to lower interest income and exchange gains, as well as the absence of government grants during the reporting period30 Selling and Marketing Expenses During the reporting period, selling and marketing expenses increased 55.9% year-on-year to RMB 9.2 million, primarily due to an increase in sales and media operations team employees as a result of business expansion, and higher depreciation expenses for office equipment - Selling and marketing expenses increased from RMB 5.9 million in the same period of 2024 to RMB 9.2 million in the reporting period31 - The increase was primarily due to an increase in the number of employees in the sales team and media operations team as a result of business expansion, and higher depreciation expenses for office equipment31 Administrative Expenses During the reporting period, administrative expenses increased 21.5% year-on-year to RMB 24.2 million, primarily due to an increase in administrative management and R&D team employees as a result of business expansion - Administrative expenses increased from RMB 19.9 million in the same period of 2024 to RMB 24.2 million in the reporting period32 - The increase was primarily due to an increase in the number of employees in the administrative management team and R&D team as a result of business expansion32 Liquidity and Capital Resources As at June 30, 2025, the Group's cash and cash equivalents were RMB 80.7 million, a decrease of RMB 19.7 million from the end of 2024, mainly due to increased software platform development expenditures; the Group primarily funds its operations through operating cash flow and borrowings - As at June 30, 2025, cash and cash equivalents were RMB 80.7 million, a decrease of RMB 19.7 million from RMB 100.4 million as at December 31, 202433 - The decrease in cash was primarily due to increased software platform development expenditures33 - The Group primarily funds its operating needs through cash flows from operating activities and borrowings34 Income Tax Expense During the reporting period, income tax expense increased 37.6% year-on-year to RMB 11.3 million, primarily due to a smaller proportion of business occurring in subsidiaries enjoying a preferential income tax rate of 15% compared to the same period last year - Income tax expense increased from RMB 8.2 million in the same period of 2024 to RMB 11.3 million in the reporting period35 - The increase was primarily due to a smaller proportion of the Group's subsidiaries applying the preferential income tax rate of 15% compared to the same period last year35 Profit for the Period Profit for the period increased 49.6% year-on-year to RMB 53.7 million, with the net profit margin improving from 29.1% to 34.6% - Profit for the period was RMB 53.7 million, representing a 49.6% increase from RMB 35.9 million in the same period of 202436 - The net profit margin improved from 29.1% in the same period of 2024 to 34.6% in the reporting period36 Capital Structure As at June 30, 2025, the company's authorized share capital and issued share capital remained unchanged at USD 50,000,000 and USD 38,532,500, respectively - As at June 30, 2025, the company's authorized share capital was USD 50,000,000, and its issued share capital was USD 38,532,50037 - There was no change in the company's authorized and issued share capital during the reporting period37 Gearing Ratio As at June 30, 2025, the Group's gearing ratio increased from 34.3% at the end of 2024 to 35.5%, primarily due to an increase in total bank borrowings - As at June 30, 2025, the Group's total borrowings were RMB 132.9 million38 - The gearing ratio increased from 34.3% as at December 31, 2024, to 35.5% as at June 30, 202538 - The increase in the gearing ratio was primarily due to an increase in the Group's total bank borrowings during the reporting period38 Pledged Assets As at June 30, 2025, the Group had no pledged assets - As at June 30, 2025, the Group had no pledged assets39 Foreign Exchange Risk Management The Group's operations are primarily conducted and settled in RMB in China, with foreign exchange risk being manageable, and no hedging activities were undertaken during the reporting period - The Group's operations are primarily conducted in China, with most transactions denominated and settled in RMB40 - The Group will closely monitor foreign exchange risks and take measures to ensure risks are manageable when necessary40 - During the reporting period, the Group did not use any financial instruments for hedging purposes40 Employees As at June 30, 2025, the Group had 242 full-time employees, with total staff costs increasing 20.7% year-on-year to RMB 10.5 million - As at June 30, 2025, the Group had 242 full-time employees, all located in China42 - During the reporting period, total staff costs (including directors' emoluments) were RMB 10.5 million, an increase of 20.7% from RMB 8.7 million in the same period of 202442 Capital Expenditures Capital expenditures significantly increased to RMB 44.5 million during the reporting period, primarily for software platform development, funded by internal resources and bank borrowings - Capital expenditures increased from RMB 5.6 million in the same period of 2024 to RMB 44.5 million in the reporting period43 - The increase was primarily due to increased software platform development expenditures43 - The Group primarily funds its capital expenditures through internal resources and bank borrowings43 Contingent Liabilities As at June 30, 2025, the Group had no significant contingent liabilities - As at June 30, 2025, the Group had no significant contingent liabilities44 Significant Acquisitions, Disposals of Subsidiaries, Associates and Joint Ventures, and Material Investments During the reporting period, the Group had no significant acquisitions, disposals, or holdings of material investments - During the reporting period, the Group had no significant acquisitions or disposals of subsidiaries, associates, and joint ventures, and held no material investments45 Use of Net Proceeds from Global Offering The company's global offering generated net proceeds of approximately HKD 72.1 million, with details on their specific use to be disclosed in the 'Implementation Plan' subsection of the 'Corporate Governance and Other Information' section - The company offered 125,000,000 shares in its global offering at an issue price of HKD 1.04 per share, receiving net proceeds of approximately HKD 72.1 million46 - Details on the use of net proceeds are set out in the 'Implementation Plan' subsection within the 'Corporate Governance and Other Information' section of this report47 Future Plans for Material Investments or Capital Assets As of the date of this report, the Group has no detailed future plans for any material investments or capital assets - As of the date of this report, the Group has no detailed future plans for any material investments or capital assets48 Events After Reporting Period There were no significant events after the reporting period up to the date of this report - There were no significant events after the reporting period up to the date of this report49 Interim Dividend The Board of Directors recommends not declaring any interim dividend for the reporting period - The Board of Directors recommends not declaring any interim dividend for the reporting period50 Corporate Governance and Other Information Corporate Governance Practices Huashi Group is committed to maintaining high standards of corporate governance and has adopted the Corporate Governance Code, complying with all applicable code provisions during the reporting period, except for deviations regarding directors' legal liability insurance and the non-segregation of Chairman and CEO roles; the Board believes the current management structure is effective and will continue to review governance practices - The company has adopted the Corporate Governance Code and complied with all applicable code provisions during the reporting period, except for deviations from code provision C.1.8 (directors' legal liability insurance) and C.2.1 (segregation of Chairman and CEO roles)51 - Mr. Chen Jicheng serves concurrently as Chairman and CEO, and the Board believes this management structure is effective for the Group's business operations and establishes sufficient checks and balances52 Compliance with the Model Code for Securities Transactions by Directors Huashi Group has adopted the Model Code set out in Appendix C3 of the Listing Rules as its own code of conduct for securities transactions by all directors and relevant employees, and each director has confirmed compliance with the Model Code's standard requirements during the reporting period - The Group has adopted the Model Code set out in Appendix C3 of the Listing Rules as its own code of conduct for securities transactions by all directors and relevant employees54 - Following specific inquiries with all directors, each director has confirmed compliance with the standard requirements of the Model Code throughout the reporting period54 Independent Non-executive Directors Huashi Group has complied with Listing Rules 3.10 and 3.10A regarding the appointment of independent non-executive directors, ensuring at least one-third of the Board comprises such directors, with at least one possessing appropriate professional qualifications or expertise in accounting or related financial management - The company has complied with Listing Rules 3.10 and 3.10A regarding the appointment of independent non-executive directors55 Audit Committee Huashi Group's Board of Directors has established an Audit Committee in accordance with the Listing Rules and adopted written terms of reference; the committee, comprising three independent non-executive directors with Dr. He Weifeng as chairman possessing appropriate professional qualifications, has reviewed the Group's unaudited condensed consolidated financial statements for the reporting period - The Audit Committee comprises three independent non-executive directors (Dr. He Weifeng, Mr. Peng Litang, Mr. Li Guangdou), with Chairman Dr. He Weifeng possessing appropriate professional qualifications57 - The Audit Committee has reviewed the Group's unaudited condensed consolidated financial statements for the reporting period and considers them to have been prepared in compliance with applicable Listing Rules78 Use of Net Proceeds from Global Offering Huashi Group's global offering generated net proceeds of approximately HKD 72.14 million, with HKD 43.61 million utilized as of June 30, 2025; funds for strengthening data analytics and expanding online media advertising services have been fully deployed, while portions for expanding geographical coverage (establishing Beijing and Shanghai offices) and enhancing brand awareness/marketing efforts remain unutilized, expected to be fully deployed by December 31, 2025 - The company's global offering generated net proceeds of approximately HKD 72.14 million58 - As at June 30, 2025, the total amount of proceeds utilized was HKD 43.61 million, with HKD 28.53 million remaining unutilized63 Implementation Plan As of June 30, 2025, HKD 43.61 million of the HKD 72.14 million net proceeds from the global offering has been utilized; funds for strengthening data analytics and expanding online media advertising services have been fully deployed, while portions for expanding geographical coverage (establishing Beijing and Shanghai offices) and enhancing brand awareness/marketing efforts remain unutilized, expected to be fully deployed by December 31, 2025 Implementation Plan for Use of Global Offering Proceeds (HKD million) | Business Strategy | Total Amount (HKD million) | % | Amount Used as at December 31, 2024 (HKD million) | Used During Reporting Period (HKD million) | Amount Unused as at June 30, 2025 (HKD million) | Expected Timeframe for Utilizing Remaining Net Proceeds | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | I. Strengthen data analytics capabilities and further enhance brand services | 22.06 | 30.6 | 22.06 | – | – | – | | II. Expand online media advertising services | 14.91 | 20.7 | 14.91 | – | – | – | | III. Expand our geographical coverage of services | 19.23 | 26.6 | – | – | 19.23 | Before December 31, 2025 | | IV. Enhance our brand awareness and increase marketing efforts | 9.70 | 13.4 | 1.42 | 0.02 | 8.26 | Before December 31, 2025 | | V. Working capital | 6.24 | 8.7 | 3.64 | 1.56 | 1.04 | Before December 31, 2025 | | Total | 72.14 | 100.0 | 42.03 | 1.58 | 28.53 | | - Funds for strengthening data analytics capabilities and expanding online media advertising services have been fully utilized5960 - The HKD 19.23 million for expanding geographical coverage (establishing Beijing and Shanghai offices) remains unutilized and is expected to be used by December 31, 20256263 Changes in Information of Directors and Chief Executive During and up to the date of this report, changes occurred in the information of Huashi Group's directors and chief executive, including Ms. Xue Yuchun's appointment as a subsidiary director and financial controller, Ms. Chen Jizhen's appointment to the Remuneration Committee, and an adjustment to Mr. Chen Jicheng's director's emoluments - Ms. Xue Yuchun was appointed as a director and financial controller of E-Dong Shuju (Hubei) Internet Technology Co., Ltd., a subsidiary of the Group, effective July 31, 202566 - Ms. Chen Jizhen was appointed as a member of the Remuneration Committee, effective August 29, 202566 - Mr. Chen Jicheng's director's emoluments were adjusted from HKD 360,000 per annum to HKD 1,000,000 per annum66 Directors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares and Debentures of the Company or Any Associated Corporation As at June 30, 2025, Huashi Group's directors and chief executive held interests in the company's shares; Mr. Chen Jicheng held 64.40% of the company's shares through a controlled corporation, and Ms. Xue Yuchun held 0.85% through a controlled corporation; Mr. Chen Jicheng also beneficially owned 100% of the equity of associated corporation Jiayi Culture Interests in Shares and Underlying Shares of the Company As at June 30, 2025, Mr. Chen Jicheng held 64.40% of the company's shares through Jiayi Culture, and Ms. Xue Yuchun held 0.85% through Hubei Jiaying Culture Directors'/Chief Executive's Interests in Shares of the Company | Name of Director/Chief Executive | Capacity/Nature of Interest | Number of Shares Interested | Approximate % of Total Shares of the Company | | :--- | :--- | :--- | :--- | | Mr. Chen Jicheng | Interest of controlled corporation | 496,334,398(L) | 64.40% | | Ms. Xue Yuchun | Interest of controlled corporation | 6,530,750(L) | 0.85% | - Mr. Chen Jicheng beneficially owns the entire issued share capital of Jiayi Culture Media Co., Ltd., which directly holds 64.40% of the company's issued share capital67 - Ms. Xue Yuchun beneficially owns the entire issued share capital of Hubei Jiaying Culture Media Co., Ltd., which directly holds 0.85% of the company's issued share capital67 Interests in Associated Corporations of the Company As at June 30, 2025, Mr. Chen Jicheng beneficially owned 100% of the equity of associated corporation Jiayi Culture Directors'/Chief Executive's Interests in Associated Corporations of the Company | Name of Director/Chief Executive | Name of Associated Corporation | Capacity/Nature of Interest | Number of Shares Interested | % of Issued Share Capital of the Associated Corporation | | :--- | :--- | :--- | :--- | :--- | | Mr. Chen Jicheng | Jiayi Culture | Beneficial owner | 1(L) | 100% | Substantial Shareholders' Interests and Short Positions in Shares and Underlying Shares of the Company As at June 30, 2025, Huashi Group's substantial shareholders and their holdings were as follows: Jiayi Culture held 64.40% of the company's shares, Yuanjin Culture (wholly owned by Wang Shujin) held 5.55%, and Youxin Capital (wholly owned by Nie Xing) held 5.03% Substantial Shareholders' Interests in Shares of the Company | Name of Shareholder | Capacity/Nature of Interest | Number of Shares Interested | Approximate % of Total Shares of the Company | | :--- | :--- | :--- | :--- | | Jiayi Culture | Beneficial owner | 496,334,398(L) | 64.40% | | Wang Shujin | Interest of controlled corporation | 42,746,550(L) | 5.55% | | Yuanjin Culture Media Co., Ltd. | Beneficial owner | 42,746,550(L) | 5.55% | | Nie Xing | Interest of controlled corporation | 38,739,000(L) | 5.03% | | Youxin Capital Co., Ltd. | Beneficial owner | 38,739,000(L) | 5.03% | - Jiayi Culture is wholly owned by Mr. Chen Jicheng, Yuanjin Culture is wholly owned by Ms. Wang Shujin, and Youxin Capital is wholly owned by Mr. Nie Xing75 Directors' Rights to Acquire Shares or Debentures During the reporting period, neither Huashi Group nor its subsidiaries entered into any arrangements enabling directors to benefit from acquiring shares or debentures of the company or other corporations, nor were any rights granted to directors or their spouses/children to subscribe for the company's equity or debt securities - During the reporting period, neither the company nor its subsidiaries entered into any arrangements enabling directors to benefit from acquiring shares or debentures of the company or any other corporation72 - No director or their spouse or children under 18 years of age was granted any right to subscribe for equity or debt securities of the company or any other corporation, nor had exercised any such rights72 Purchase, Sale or Redemption of the Company's Listed Securities During the reporting period, neither Huashi Group nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities, and as at June 30, 2025, the company held no treasury shares - During the reporting period, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities73 - As at June 30, 2025, the company held no treasury shares73 Share Option Scheme Huashi Group adopted a share option scheme on October 9, 2023, but no share options were granted under the scheme from its adoption up to June 30, 2025; as at June 30, 2025, the number of share options available for grant under the scheme limit was 7,706,500 - The company adopted a share option scheme approved by shareholders on October 9, 202374 - No share options were granted under the share option scheme from its adoption up to June 30, 202574 - As at June 30, 2025, the number of share options available for grant under the scheme limit was 7,706,50074 Convertible Securities, Share Options, Warrants or Similar Rights As at June 30, 2025, neither Huashi Group nor any of its subsidiaries had issued or granted any convertible securities, share options, warrants, or similar rights - As at June 30, 2025, neither the company nor any of its subsidiaries had issued or granted any convertible securities, share options, warrants, or similar rights77 Review of Interim Results Huashi Group's Audit Committee has reviewed the Group's unaudited condensed consolidated financial statements for the reporting period, deeming them prepared in accordance with applicable Listing Rules and fairly reflecting the Group's financial position and performance - The Audit Committee has reviewed the Group's unaudited condensed consolidated financial statements for the reporting period, including the applicable accounting policies and accounting standards adopted by the Group78 - The Audit Committee is satisfied that these financial statements were prepared in accordance with applicable accounting standards and fairly reflect the Group's financial position and performance for the reporting period78 Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income Profit or Loss Statement Overview For the six months ended June 30, 2025, Huashi Group's revenue increased 26.1% year-on-year to RMB 155.4 million, gross profit increased 44.0% to RMB 108.0 million, profit for the period increased 49.6% to RMB 53.7 million, and basic and diluted earnings per share were RMB 6.97 cents Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (RMB thousand) | Indicator | 2025 (Unaudited) (RMB thousand) | 2024 (Unaudited) (RMB thousand) | | :--- | :--- | :--- | | Revenue | 155,355 | 123,245 | | Cost of services | (47,393) | (48,260) | | Gross Profit | 107,962 | 74,985 | | Other income and gains, net | 364 | 1,196 | | Selling and marketing expenses | (9,182) | (5,890) | | Administrative expenses | (24,195) | (19,911) | | Net provision for expected credit losses on financial and contract assets | (7,635) | (3,115) | | Finance costs | (2,310) | (3,167) | | Profit before income tax expense | 65,004 | 44,098 | | Income tax expense | (11,284) | (8,198) | | Profit for the period | 53,720 | 35,900 | | Profit for the period attributable to owners of the company | 53,720 | 35,900 | | Earnings per share attributable to owners of the company – Basic and diluted (RMB cents) | 6.97 | 4.66 | Condensed Consolidated Statement of Financial Position Statement of Financial Position Overview As at June 30, 2025, Huashi Group's total assets were RMB 683.1 million, a 30.7% increase from the end of 2024; both non-current and current assets grew, with a significant increase in trade receivables; total liabilities increased 59.5% to RMB 286.1 million, mainly due to higher trade payables and borrowings within current liabilities; total equity attributable to owners of the company increased 15.7% to RMB 397.0 million Condensed Consolidated Statement of Financial Position (RMB thousand) | Indicator | As at June 30, 2025 (Unaudited) (RMB thousand) | As at December 31, 2024 (Audited) (RMB thousand) | | :--- | :--- | :--- | | Assets | | | | Non-current assets | 101,202 | 60,257 | | Current assets | 581,887 | 462,395 | | Total assets | 683,089 | 522,652 | | Liabilities | | | | Current liabilities | 265,581 | 150,716 | | Non-current liabilities | 20,544 | 28,692 | | Total liabilities | 286,125 | 179,408 | | Equity | | | | Equity attributable to owners of the company | 396,964 | 343,244 | | Total equity | 396,964 | 343,244 | - Non-current assets increased by 67.8%, primarily due to an increase in property, plant and equipment9 - Current liabilities increased by 76.2%, primarily due to significant increases in trade payables and borrowings9 Condensed Consolidated Statement of Changes in Equity Statement of Changes in Equity Overview For the six months ended June 30, 2025, Huashi Group's total equity attributable to owners of the company increased from RMB 343.2 million at the beginning of the period to RMB 397.0 million, primarily driven by a profit for the period of RMB 53.7 million Condensed Consolidated Statement of Changes in Equity (RMB thousand) | Indicator | Share Capital (RMB thousand) | Capital Reserve (RMB thousand) | PRC Statutory Reserve (RMB thousand) | Retained Profits (RMB thousand) | Total (RMB thousand) | | :--- | :--- | :--- | :--- | :--- | :--- | | Balance as at January 1, 2025 (Audited) | 276,515 | (171,099) | 20,359 | 217,469 | 343,244 | | Profit for the period | – | – | – | 53,720 | 53,720 | | Balance as at June 30, 2025 (Unaudited) | 276,515 | (171,099) | 20,359 | 271,189 | 396,964 | | Balance as at January 1, 2024 (Audited) | 276,515 | (171,099) | 10,910 | 146,283 | 262,609 | | Profit for the period | – | – | – | 35,900 | 35,900 | | Balance as at June 30, 2024 (Unaudited) | 276,515 | (171,099) | 10,910 | 182,183 | 298,509 | - Total equity attributable to owners of the company increased from RMB 343,244 thousand as at January 1, 2025, to RMB 396,964 thousand as at June 30, 2025, primarily due to profit for the period of RMB 53,720 thousand84 Condensed Consolidated Statement of Cash Flows Cash Flow Statement Overview For the six months ended June 30, 2025, Huashi Group's net cash generated from operating activities was RMB 3.8 million, a positive turnaround from a net outflow in the prior year; net cash used in investing activities significantly increased to RMB 44.4 million, mainly due to higher expenditures on property, plant and equipment; net cash generated from financing activities was RMB 20.7 million, resulting in a net decrease in cash and cash equivalents of RMB 19.9 million Condensed Consolidated Statement of Cash Flows (RMB thousand) | Indicator | 2025 (Unaudited) (RMB thousand) | 2024 (Unaudited) (RMB thousand) | | :--- | :--- | :--- | | Net cash generated from/(used in) operating activities | 3,787 | (1,774) | | Net cash used in investing activities | (44,413) | (80,253) | | Net cash generated from financing activities | 20,747 | 51,557 | | Net decrease in cash and cash equivalents | (19,879) | (30,470) | | Cash and cash equivalents at end of period | 80,747 | 141,040 | - Net cash generated from operating activities turned into a net inflow of RMB 3.8 million from a net outflow of RMB 1.8 million in the same period of 202485 - Net cash used in investing activities was RMB 44.4 million, primarily due to increased expenditures on property, plant and equipment (RMB 44.5 million)85109 Notes to the Condensed Consolidated Financial Statements 1. General Information Huashi Group Holdings Limited, incorporated in the Cayman Islands, primarily engages in investment holding, with its subsidiaries mainly providing brand, advertising, and marketing services, as well as advertising placement services in China - The company was incorporated as an exempted company with limited liability in the Cayman Islands on February 18, 2021, under the Companies Act of the Cayman Islands88 - The company's principal business is investment holding; the Group is primarily engaged in providing brand, advertising, and marketing services, as well as advertising placement services in China89 2. Basis of Preparation The condensed consolidated interim financial statements are prepared in accordance with Hong Kong Accounting Standard 34 issued by the HKICPA and comply with Listing Rules disclosure requirements, presented in RMB, and should be read in conjunction with the 2024 annual consolidated financial statements - These condensed consolidated interim financial statements have been prepared in accordance with Hong Kong Accounting Standard 34 Interim Financial Reporting issued by the Hong Kong Institute of Certified Public Accountants and comply with the applicable disclosure requirements of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited90 - The condensed consolidated interim financial statements are presented in RMB and should be read in conjunction with the 2024 annual consolidated financial statements91 3. Accounting Policies Huashi Group's condensed consolidated interim financial statements apply the same accounting policies as its 2024 annual financial statements, with the only new amendment first applied in 2025 being 'Lack of Exchangeability (Amendments to HKAS 21)', which is not expected to have a significant impact on the Group - The Group applies the same accounting policies and calculation methods in its condensed consolidated interim financial statements as in its 2024 annual financial statements92 - The new amendment first applied in 2025 is 'Lack of Exchangeability (Amendments to HKAS 21)', which is not expected to have an impact on the Group929395 4. Revenue Huashi Group primarily provides brand, advertising, and marketing services and advertising placement services in China, with management reviewing the business as a single operating segment; all revenue during the reporting period was generated from China, and no single customer accounted for over 10% of revenue; revenue is analyzed by service type and timing of recognition (over time or at a point in time) - The Group is primarily engaged in providing brand, advertising, and marketing services and advertising placement services in China, with management reviewing the operating results of the business as a single operating segment96 - For the six months ended June 30, 2025 and 2024, no single external customer's revenue from providing brand, advertising, and marketing services and advertising placement services accounted for more than 10% of the Group's total revenue98 Revenue Analysis by Category (RMB thousand) | Revenue Category | 2025 (Unaudited) (RMB thousand) | 2024 (Unaudited) (RMB thousand) | | :--- | :--- | :--- | | Brand Services | 52,579 | 50,004 | | Event Execution and Production Services | 31,037 | 27,345 | | Online Media Advertising Services | 17,790 | 19,942 | | Advertising Placement Services | 43,911 | 18,635 | | Rebates from Media Partners | 10,038 | 7,319 | | Total | 155,355 | 123,245 | Timing of Revenue Recognition (RMB thousand) | Timing of Revenue Recognition | 2025 (Unaudited) (RMB thousand) | 2024 (Unaudited) (RMB thousand) | | :--- | :--- | :--- | | Services transferred over time | 80,407 | 77,349 | | Services transferred at a point in time | 74,948 | 45,896 | | Total | 155,355 | 123,245 | 5. Other Income and Gains, Net During the reporting period, other income and gains, net, amounted to RMB 364 thousand, a decrease from RMB 1,196 thousand in the prior year, primarily due to lower interest income and exchange gains, and the absence of government grants in the current period Other Income and Gains, Net (RMB thousand) | Item | 2025 (Unaudited) (RMB thousand) | 2024 (Unaudited) (RMB thousand) | | :--- | :--- | :--- | | Interest income | 37 | 355 | | Government grants | – | 354 | | Net exchange gains | 228 | 487 | | Others | 99 | – | | Total | 364 | 1,196 | - The decrease in other income and gains, net, was primarily due to lower interest income and exchange gains, as well as the absence of government grants during the reporting period30101 6. Finance Costs During the reporting period, finance costs were RMB 2,310 thousand, a decrease from RMB 3,167 thousand in the prior year, primarily comprising interest on borrowings and lease liabilities Finance Costs (RMB thousand) | Item | 2025 (Unaudited) (RMB thousand) | 2024 (Unaudited) (RMB thousand) | | :--- | :--- | :--- | | Interest on borrowings | 2,091 | 2,992 | | Interest on lease liabilities | 219 | 175 | | Total | 2,310 | 3,167 | - Finance costs decreased year-on-year, primarily due to lower interest on borrowings102 7. Profit Before Income Tax Expense Profit before income tax expense is calculated after deducting items such as auditor's remuneration, cost of services provided by suppliers, amortization of intangible assets, depreciation of property, plant and equipment, depreciation of right-of-use assets, business development costs, net provision for expected credit losses on financial and contract assets, short-term lease expenses, and staff costs Deductions for Profit Before Income Tax Expense (RMB thousand) | Item | 2025 (Unaudited) (RMB thousand) | 2024 (Unaudited) (RMB thousand) | | :--- | :--- | :--- | | Auditor's remuneration | 237 | 380 | | Cost of services provided by suppliers | 45,331 | 44,217 | | Amortization of intangible assets | 596 | 583 | | Depreciation of property, plant and equipment | 6,517 | 2,654 | | Depreciation of right-of-use assets – leased properties | 899 | 323 | | Business development costs | 8,078 | 10,512 | | Net provision for expected credit losses on financial and contract assets | 7,635 | 3,115 | | Short-term lease expenses | 232 | 1,141 | | Staff costs (including directors' emoluments) | 10,515 | 8,692 | - Staff costs (including directors' emoluments) increased 20.7% year-on-year to RMB 10,515 thousand103 8. Income Tax Expense During the reporting period, income tax expense was RMB 11,284 thousand, an increase from RMB 8,198 thousand in the prior year; Chinese subsidiaries are subject to a 25% corporate income tax rate, with one high-tech enterprise enjoying a preferential 15% rate; no Hong Kong profits tax provision was made due to the absence of assessable profits in Hong Kong Income Tax Expense (RMB thousand) | Item | 2025 (Unaudited) (RMB thousand) | 2024 (Unaudited) (RMB thousand) | | :--- | :--- | :--- | | Current tax | 12,478 | 7,143 | | Deferred tax | (1,194) | 1,055 | | Total | 11,284 | 8,198 | - Chinese subsidiaries are subject to a corporate income tax rate of 25%, with Huashi Zhongguang International Media (Wuhan) Co., Ltd. enjoying a preferential income tax rate of 15% due to its recognition as a high-tech enterprise104105 - No provision for Hong Kong profits tax was made as the Group did not generate any assessable profits in Hong Kong during the reporting period106 9. Dividends For the six months ended June 30, 2025 and 2024, the company neither paid nor declared any dividends - For the six months ended June 30, 2025 and 2024, the company neither paid nor declared any dividends107 10. Earnings Per Share For the six months ended June 30, 2025, Huashi Group's profit for the period attributable to owners of the company was RMB 53,720 thousand, with basic and diluted earnings per share of RMB 6.97 cents; diluted earnings per share are the same as basic earnings per share due to the absence of potential dilutive ordinary shares Earnings Per Share Calculation (RMB thousand/cents) | Item | As at June 30, 2025 (Unaudited) | As at June 30, 2024 (Unaudited) | | :--- | :--- | :--- | | Profit for the period attributable to owners of the company (RMB thousand) | 53,720 | 35,900 | | Weighted average number of ordinary shares in issue | 770,650,000 | 770,650,000 | | Basic earnings per share (RMB cents) | 6.97 | 4.66 | - Diluted earnings per share are the same as basic earnings per share as there were no potential dilutive ordinary shares outstanding for the six months ended June 30, 2025108 11. Property, Plant and Equipment During the reporting period, Huashi Group's equipment acquisitions significantly increased to RMB 44,450 thousand, with depreciation of property, plant and equipment amounting to RMB 6,517 thousand; as at June 30, 2025, there were no pledged property, plant and equipment - For the six months ended June 30, 2025, the Group's equipment acquisitions amounted to approximately RMB 44,450 thousand, a significant increase from RMB 5,564 thousand in the same period of 2024109 - Depreciation recognized for property, plant and equipment was approximately RMB 6,517 thousand, an increase from RMB 2,654 thousand in the same period of 2024109 - As at June 30, 2025 and December 31, 2024, no property, plant and equipment were pledged110 12. Intangible Assets During the reporting period, Huashi Group had no new intangible asset additions, and amortization of intangible assets amounted to RMB 596 thousand - For the six months ended June 30, 2025, the Group had no additions to intangible assets111 - Amortization recognized for intangible assets was approximately RMB 596 thousand, comparable to RMB 583 thousand in the same period of 2024111 13. Trade Receivables As at June 30, 2025, Huashi Group's net trade receivables were RMB 343,897 thousand, a significant increase from the end of 2024, with most amounts being current; trade receivables are denominated in RMB, and their fair value approximates their carrying amount Trade Receivables (RMB thousand) | Item | As at June 30, 2025 (Unaudited) (RMB thousand) | As at December 31, 2024 (Audited) (RMB thousand) | | :--- | :--- | :--- | | Trade receivables | 366,013 | 217,717 | | Less: Provision for impairment loss on trade receivables | (22,116) | (14,481) | | Total | 343,897 | 203,236 | Aging Analysis of Trade Receivables (Based on Due Date, RMB thousand) | Aging | As at June 30, 2025 (Unaudited) (RMB thousand) | As at December 31, 2024 (Audited) (RMB thousand) | | :--- | :--- | :--- | | Current | 313,622 | 200,152 | | Within 90 days | 30,275 | 2,519 | | 91 to 180 days | – | 496 | | 181 to 365 days | – | 69 | | Total | 343,897 | 203,236 | - Net trade receivables increased by 69.2% from the end of 2024, primarily due to a significant increase in current amounts112113 14. Deposits, Prepayments and Other Receivables As at June 30, 2025, Huashi Group's total deposits, prepayments, and other receivables amounted to RMB 157,243 thousand, with other receivables and prepayments being the main components Deposits, Prepayments and Other Receivables (RMB thousand) | Item | As at June 30, 2025 (Unaudited) (RMB thousand) | As at December 31, 2024 (Audited) (RMB thousand) | | :--- | :--- | :--- | | Other receivables | 102,846 | 126,348 | | Deposits paid on behalf of customers | – | 500 | | Less: Provision for impairment loss on deposits and other receivables | (1,831) | (1,831) | | Prepayments for intangible assets | – | 626 | | Other prepayments | 56,228 | 33,744 | | Amount classified as current assets | 157,243 | 158,761 | 15. Trade Payables As at June 30, 2025, Huashi Group's total trade payables amounted to RMB 91,730 thousand, a significant increase from the end of 2024, with most amounts due within 30 days Aging Analysis of Trade Payables (RMB thousand) | Aging | As at June 30, 2025 (Unaudited) (RMB thousand) | As at December 31, 2024 (Audited) (RMB thousand) | | :--- | :--- | :--- | | Within 30 days | 82,777 | 20,485 | | 31 to 60 days | 5,080 | 3,127 | | 61 to 90 days | 1,317 | 2,703 | | Over 90 days | 2,556 | 3,266 | | Total | 91,730 | 29,581 | - Total trade payables increased by 210.1% from the end of 2024, primarily concentrated in amounts due within 30 days116 16. Accruals and Other Payables As at June 30, 2025, Huashi Group's total accruals and other payables amounted to RMB 12,008 thousand, primarily comprising accrued expenses, other taxes payable, and salaries payable Accruals and Other Payables (RMB thousand) | Item | As at June 30, 2025 (Unaudited) (RMB thousand) | As at December 31, 2024 (Audited) (RMB thousand) | | :--- | :--- | :--- | | Accrued expenses and other payables | 5,138 | 3,455 | | Deposits from customers | 311 | 1,345 | | Other taxes payable | 4,243 | 2,148 | | Salaries payable | 2,316 | 5,287 | | Total | 12,008 | 12,235 | 17. Borrowings As at June 30, 2025, Huashi Group's total bank borrowings were RMB 132,930 thousand, with a weighted average effective annual interest rate of 3.1%; 94.0% were current liabilities and 6.0% were non-current liabilities; all bank borrowings were guaranteed by the controlling shareholder and subsidiaries Borrowings Details (RMB thousand) | Item | As at June 30, 2025 (Unaudited) (RMB thousand) | As at December 31, 2024 (Audited) (RMB thousand) | | :--- | :--- | :--- | | Bank loans – secured | 132,930 | 107,920 | | Carrying amount of amounts repayable (based on scheduled repayment dates as set out in the loan agreements): | | | | – Within 1 year | 124,950 | 93,920 | | – Over 1 year but not exceeding 2 years | 7,980 | 14,000 | | Total | 132,930 | 107,920 | - As at June 30, 2025, the weighted average effective annual interest rate for borrowings was 3.1%, a decrease from 4.5% as at December 31, 2024120 - All bank loans are guaranteed by the Group's controlling shareholder and its subsidiaries120 18. Share Capital As at June 30, 2025, Huashi Group's issued and fully paid share capital comprised 770,650,000 shares with a par value of USD 0.05 each, totaling USD 38,533 thousand (RMB 276,515 thousand), with no changes during the reporting period Share Capital Details | Item | Number | Amount (USD thousand) | Amount (RMB thousand) | | :--- | :--- | :--- | :--- | | Issued and fully paid ordinary shares of USD 0.05 each | 770,650,000 | 38,533 | 276,515 | - There were no changes in share capital as at January 1, 2024, December 31, 2024, January 1, 2025, and June 30, 2025119 19. Related Party Transactions During the reporting period, total key management personnel emoluments for Huashi Group amounted to RMB 1,034 thousand, including salaries and allowances and contributions to retirement benefit schemes Key Management Personnel Emoluments (RMB thousand) | Item | 2025 (Unaudited) (RMB thousand) | 2024 (Unaudited) (RMB thousand) | | :--- | :--- | :--- | | Salaries and allowances | 994 | 929 | | Contributions to retirement benefit schemes | 40 | 30 | | Total | 1,034 | 959 | 20. Capital Commitments As at June 30, 2025, Huashi Group's contracted but unprovided capital expenditures amounted to RMB 11,000 thousand, primarily for the acquisition of equipment Capital Commitments (RMB thousand) | Item | As at June 30, 2025 (Unaudited) (RMB thousand) | As at December 31, 2024 (Audited) (RMB thousand) | | :--- | :--- | :--- | | The Group's contracted but unprovided capital expenditures for: | | | | – Acquisition of equipment | 11,000 | 4,000 | - Contracted but unprovided capital expenditures, primarily for the acquisition of equipment, increased by 175% from the end of 2024122 21. Fair Value Measurement Huashi Group's directors believe that as at June 30, 2025, the carrying amounts of the Group's financial instruments approximated their fair values