Business Strategy and Market Position - Galaxy Entertainment Group aims to become Asia's leading gaming and entertainment company, focusing on local market insights and understanding of Chinese cultural preferences [4]. - The company has a clear positioning as a leading integrated gaming and leisure operator, leveraging its professional experience in the construction and hotel industries [5]. - The company emphasizes a demand-driven strategy, closely monitoring market developments and responding prudently to changes [5]. - The company is focused on diversifying its tourism offerings and investing in non-gaming facilities to enhance Macau's competitiveness as a global leisure destination [42]. - The company is optimistic about the market outlook, expecting continued support from the central government for Macau's stable development and economic diversification [43]. Financial Performance - The group's net revenue reached HKD 49.2 billion, a year-on-year increase of 13% [26]. - Adjusted EBITDA for the group was HKD 14.5 billion, up 19% year-on-year [26]. - Shareholders' profit attributable to the group was HKD 10.7 billion, reflecting a 22% increase year-on-year [26]. - Non-gaming revenue amounted to HKD 5.9 billion, a year-on-year increase of 5% [26]. - The group has a strong liquidity position with cash and liquid investments of HKD 36.3 billion, net of liabilities of HKD 1.3 billion [26]. Development and Expansion Plans - The company plans to officially open the Galaxy Hotel in February 2026, following the trial operation of the Galaxy Macau's new phase in 2025 [17]. - The group plans to expand its footprint by 600,000 square meters in the fourth phase of development, including multiple high-end hotel brands and a 5,000-seat theater [23]. - The company plans to enhance its resort offerings by adding new dining, leisure, and retail facilities at Galaxy Macau™ to maintain competitiveness [85]. - The company is undergoing a comprehensive renovation of the Macau StarWorld Hotel, with the first and third floors of the gaming area already completed, and all guest rooms expected to be fully renovated by Q1 2027 [87]. Awards and Recognition - The company received the 2025 Asia Pacific Global Gaming Award for Best Integrated Resort for "Galaxy Macau™" [46]. - "Galaxy Macau™" was recognized as the Best Overall Corporate Social Responsibility Program at the 2025 IAG Academy IR Awards [47]. - The company achieved first place in the Macau Best Hotel category for "Galaxy Hotel™" according to Travel + Leisure 2025 [47]. - The company was awarded the Best Spa in Macau for "Banyan Tree Spa Macau" at the 2025 World Spa Awards [48]. - The company received multiple awards in 2025, including the "Best Integrated Resort" for "Galaxy Macau" from U Weekly and the "Best New Hotel" for "Galaxy Macau - Capella" from various organizations [49][55][56]. Corporate Governance - The company is committed to maintaining high standards of corporate governance to enhance performance and long-term sustainability [116]. - The board consists of four executive directors, one non-executive director, and four independent non-executive directors, with independent directors exceeding one-third of the board [123]. - The company has adopted a corporate governance policy aimed at achieving high levels of transparency, integrity, and accountability [159]. - The board has established a culture of transparency, allowing directors to express their views freely and seek independent advice when necessary [161]. - The company has implemented a whistleblowing policy to encourage reporting of any suspicious or potential misconduct [145]. Employee and Community Engagement - Employee costs (excluding directors' remuneration) amounted to HKD 8.34 billion as of December 31, 2025, with approximately 21,200 employees hired across various regions [99]. - The company continues to invest in employee development, health and safety, and workplace well-being through structured training programs and engagement activities [198]. - The company actively participates in community initiatives focusing on youth development, sports, arts and culture, social inclusion, and community care [198]. - The company has implemented stock option and share award plans to attract and retain talented employees, aligning their interests with those of shareholders [101]. Environmental and Social Responsibility - The company has a commitment to sustainable development and social responsibility, reflected in its service culture and innovation [118]. - The company is focused on enhancing environmental management practices, particularly in climate change mitigation and adaptation, aligning with national carbon reduction goals [194]. - The company continues to comply with significant laws and regulations affecting its operations, including those related to environmental protection and labor standards, which are foundational to its sustainable development [196]. - The company conducted its first dual materiality assessment in 2025 to enhance its environmental, social, and governance (ESG) governance and disclosure framework [197]. Shareholder Returns and Dividends - The company plans to distribute a total dividend of HKD 1.20 per share, with a proposed final dividend of HKD 0.80 per share in June 2026 [26]. - The board proposed a final dividend of HKD 0.80 per share, reflecting confidence in the financial strength and future profitability of the group [65]. - The total dividend for the year, including an interim dividend of HKD 0.70 per share, amounts to HKD 1.50 per share, compared to HKD 1.00 per share in 2024, reflecting a 50% increase [190]. - The company emphasizes a sustainable dividend policy that balances shareholder expectations with prudent capital management, considering financial performance and macroeconomic conditions [189].

Financial Performance - As of the end of 2025, the company's total assets reached nearly CNY 1.9 trillion, an increase of 12.2% compared to the previous year[12]. - In 2025, the company achieved original insurance premium income of CNY 195.87 billion, a year-on-year growth of 14.9%[12]. - The embedded value increased to CNY 287.84 billion, reflecting a year-on-year growth of 11.4%[12]. - The net profit attributable to shareholders of the parent company was CNY 36.28 billion, representing a year-on-year increase of 38.3%[12]. - Total revenue for 2025 reached 155,551 million, representing a 17.8% increase from 2024[100]. - Pre-tax profit increased by 44.0% to 40,525 million in 2025 compared to 28,141 million in 2024[100]. - Net profit attributable to shareholders rose by 38.3% to 36,284 million in 2025 from 26,229 million in 2024[100]. - The return on equity for 2025 was 34.69%, up from 25.88% in 2024, reflecting an increase of 8.81 percentage points[101]. - The core solvency adequacy ratio improved to 135.11% in 2025, up from 124.07% in 2024, indicating enhanced financial stability[79]. - The total investment return rate is projected to rise to 6.6% in 2025, compared to 5.8% in 2024, reflecting improved investment performance[79]. Dividend Distribution - The company plans to distribute a year-end cash dividend of CNY 2.06 per share (tax included), totaling CNY 6.43 billion, and a total cash dividend of CNY 8.52 billion for 2025, an increase of 7.9% year-on-year[12]. - The company plans to distribute a total cash dividend of CNY 8.516 billion, an increase of 7.9% compared to 2024[95]. - The company’s cumulative payout to shareholders over 15 years has reached nearly CNY 44.5 billion[95]. Investment Strategy - The company has established a special working group for the "Five Major Articles" initiative, with an investment balance exceeding CNY 360 billion, growing over 20% year-on-year[13]. - The company has invested in green bonds and clean energy REITs, with a related investment balance projected to reach 75.1 billion yuan by the end of 2025, supporting the national energy structure transformation[17]. - The company has a nearly 55.6 billion yuan investment balance in inclusive finance, covering 46 benefit insurance projects and various microfinance and rental housing REITs[18]. - The company has invested 26.8 billion yuan in health and elderly care insurance, enhancing its multi-tiered health insurance system and accelerating the development of elderly care services[21]. - The company supports digital industries with an investment balance exceeding 68 billion yuan, focusing on AI, cloud computing, and big data[22]. - The company’s investment in the "Five Major Articles" exceeded CNY 360 billion, representing a year-on-year growth of over 20%, significantly contributing to the real economy[90]. - The company invested CNY 140 billion in hard technology sectors such as semiconductors and artificial intelligence, with a year-on-year growth rate of 27%[90]. - The total investment scale for 2025 exceeded 1.84 trillion yuan, with an overall investment return rate of 6.6% and a comprehensive investment return rate of 5.0%[177]. Product Development and Innovation - The company emphasizes a customer-centric approach, enhancing its product system to meet the full life cycle needs of customers[10]. - The company aims to strengthen the synergy of "insurance + services + investment" to enhance market competitiveness[11]. - The company achieved first-year premiums of 11.933 billion yuan from its reformed participating insurance products, marking a significant breakthrough in product transformation[28]. - The company launched innovative products such as "Medical Worry-Free" and "Health Care Worry-Free," enhancing its brand recognition[92]. - The company plans to launch 95 new products in 2025, expanding its total offerings to 211 products[130]. - The company is enhancing its product offerings to include a mix of health, retirement, and wealth management products to meet diverse customer needs[132]. - The company launched over 20 inclusive insurance products targeting specific groups such as students, children, women, the elderly, and new citizens, aligning with rural revitalization strategies[133]. Customer Engagement and Service - The company processed 4.57 million insurance applications online, with a 96% completion rate for policy services within one minute, and paid out over 42 billion yuan in claims[33]. - The service ecosystem covers over 4 million individual customers, with increasing awareness and usage rates[38]. - The company has established 53 high-quality health and wellness communities across 37 cities, with plans to expand to 70 travel projects in 57 cities by the end of 2025[39][40]. - The "Rural Revitalization" insurance products have benefited 348,000 specific rural residents, with over 5,500 claims paid amounting to more than 6.96 million yuan[43]. - The "Caring for Sanitation Workers" initiative has provided insurance coverage to nearly 6.7 million sanitation workers, with 524 claims totaling 46.639 million yuan paid out by the end of 2025[45]. Operational Efficiency and Management - The management team is focused on optimizing talent mechanisms and enhancing organizational efficiency to support high-quality development[85]. - The company aims to enhance its long-term competitiveness and operational efficiency in the upcoming "15th Five-Year Plan" period[95]. - The company is focused on high-quality development, enhancing product and service integration, and expanding its sales channels across the country[113]. - The individual insurance channel achieved a new business value growth of 19.4% year-on-year[119]. - The first-year premium income from long-term insurance in the individual insurance channel reached CNY 190.27 billion, a year-on-year increase of 43.8%[120]. - The bancassurance channel's new business value increased by 110.2% year-on-year, with premium income of CNY 721.02 billion, a 39.5% year-on-year growth[121]. Risk Management and Compliance - The company aims to enhance its investment management capabilities and embrace AI technology to build core competitive advantages in operations, technology, and risk control[56]. - The company plans to leverage technology and data analytics in investment risk management to strengthen its risk management practices[157]. - The company is committed to optimizing its risk management framework in response to ongoing economic and geopolitical challenges[175][176]. - The company assumes a 2.0% annual inflation rate for unit cost based on recent actual expense experience[196]. - The income tax rate is assumed to be 25% annually, considering tax-exempt investment income from certain sources[199]. Social Responsibility - The company is committed to social responsibility through various public welfare initiatives, including emergency education for youth[42][48]. - The company aims to create long-term stable value for customers, shareholders, and society by acting as an economic stabilizer and social stabilizer[56]. - The company is committed to creating long-term stable value for customers, shareholders, and society while fulfilling its core mission of serving the real economy[173].

Financial Performance - The total consolidated revenue for the six months ended February 28, 2026, was ¥2,055,227 million, representing a 14.8% increase year-on-year[5] - Operating profit for the same period was ¥400,666 million, reflecting a 31.7% year-on-year growth[5] - The pre-tax profit reached ¥428,805 million, which is a 17.9% increase compared to the previous year[5] - The net profit attributable to the parent company was ¥279,290 million, up 19.6% year-on-year[5] - UNIQLO Japan's revenue for the first half of the fiscal year reached ¥581.7 billion, a year-on-year increase of 7.4%, with operating profit of ¥110.7 billion, up 13.4%[13] - Overseas UNIQLO revenue totaled ¥1,241.3 billion for the first half, reflecting a year-on-year growth of 22.4%, with operating profit increasing by 37.4% to ¥233 billion[14] - Same-store sales in Japan increased by 6.5% year-on-year, driven by strong winter product sales and effective seasonal marketing strategies[13] - GU's revenue for the first half was ¥168.4 billion, a slight increase of 1.6%, while operating profit rose by 20.1% to ¥15.7 billion[16] - The global brand segment reported a revenue decline of 7.5% to ¥62.7 billion, with an operating loss of ¥0.7 billion, primarily due to challenges faced by the Theory brand in the U.S. market[17] - Basic earnings per share rose to ¥910.25, compared to ¥761.38 for the same period last year, marking a 19.6% increase[32] Assets and Liabilities - The total assets as of February 28, 2026, amounted to ¥4,299,044 million, with total equity of ¥2,708,483 million[6] - Total assets as of February 28, 2026, amounted to ¥4,299 billion, an increase of ¥439.6 billion from the previous fiscal year-end[23] - Total liabilities as of February 28, 2026, were ¥1,590.5 billion, an increase of ¥58.7 billion from the previous fiscal year-end[23] - Total equity as of February 28, 2026, reached ¥2,708.4 billion, an increase of ¥380.9 billion from the previous fiscal year-end[23] - Cash and cash equivalents as of February 28, 2026, were ¥1,040.5 billion, an increase of ¥147.2 billion from the previous fiscal year-end[24] Cash Flow - Net cash generated from operating activities for the six months ended February 28, 2026, was ¥499 billion, compared to ¥298.2 billion for the same period in the previous year[25] - Net cash used in investing activities for the six months ended February 28, 2026, was ¥179.1 billion, compared to ¥382.1 billion for the same period in the previous year[26] - Net cash used in financing activities for the six months ended February 28, 2026, was ¥227.4 billion, compared to ¥150.2 billion for the same period in the previous year[27] - The company reported a net cash increase of ¥147,265 million in cash and cash equivalents, compared to a decrease of ¥216,229 million in the previous year[39] Future Projections - The forecast for consolidated revenue for the fiscal year ending August 31, 2026, is projected at ¥3,900,000 million, a 14.7% increase[8] - The company adjusted its full-year revenue forecast to ¥3,900 billion, an increase of 2.6% from the previous forecast of ¥3,800 billion[28] - The new operating profit forecast is ¥700 billion, reflecting a 7.7% increase from the previous forecast of ¥650 billion[28] - The company expects a net profit attributable to shareholders of ¥480 billion, a 6.7% increase from the previous forecast of ¥450 billion[28] Sustainability Initiatives - The company aims to achieve 100% sustainable cotton sourcing by December 2025, focusing on environmentally friendly cultivation methods[19] - Greenhouse gas emissions from self-operated facilities were reduced by 90.3% compared to the 2019 fiscal year, achieving the target four years ahead of schedule[20] - The supply chain's greenhouse gas emissions decreased by 19.9% compared to 2019, nearing the original target of 20%[20] - The company plans to enhance its product development and brand building efforts in overseas markets to support sustainable growth[12] Other Income and Expenses - The company reported a significant increase in other income, which rose to ¥15,300 million from ¥3,699 million, indicating a strong performance in this area[32] - Operating expenses increased from ¥653,155 million in 2025 to ¥724,610 million in 2026, reflecting a rise of approximately 10.9%[56] - Advertising and promotion expenses rose from ¥60,282 million in 2025 to ¥64,712 million in 2026, an increase of 7.2%[56] - The company reported a total of ¥12,081 million in foreign exchange gains for the six months ending February 28, 2026, compared to ¥994 million in the previous year[58] - Total financing income decreased from ¥65,832 million in 2025 to ¥35,219 million in 2026, a decline of 46.5%[61] - The total financing costs increased from ¥6,324 million in 2025 to ¥7,081 million in 2026, reflecting an increase of 11.9%[63]

Financial Performance - In 2025, the company achieved a sales revenue of $9.327 billion, representing a year-on-year growth of 16.2%[20] - Total revenue for 2025 reached $9,326.8 million, a 16.2% increase from $8,029.9 million in 2024[36] - Net profit attributable to shareholders for 2025 was $685.1 million, up 39.0% from $492.7 million in 2024[36] - EBITDA for 2025 was $5,256.4 million, reflecting a 20.0% increase from $4,379.7 million in 2024[36] - Operating profit surged to $1,109.9 million in 2025, compared to $473.9 million in 2024, indicating strong operational efficiency[51] - Net profit for the year was $988.9 million, up from $730.0 million in 2024, representing a 35.4% year-over-year growth[51] - The company reported a total of $1,259,515 in fair value measurements as of December 31, 2025, reflecting a substantial increase from $630,243 in 2024[49] - The company achieved a revenue of $9,326.8 million in the reporting period, representing a year-on-year increase of 16.2%[64] - The wafer foundry business revenue was $8,796.4 million, reflecting a year-on-year growth of 17.5%[64] Production and Capacity - The monthly production capacity exceeded 1 million 8-inch equivalent wafers, with a capacity utilization rate increasing to 93.5%, up by 8 percentage points year-on-year[20] - The company shipped 9,696,824 wafers in 2025, a significant increase from 8,020,798 wafers in 2024, reflecting higher production capacity[51] - The company produced 10,126,337 wafers, with sales volume increasing by 20.9% to 9,696,824 wafers, resulting in a 36.8% increase in inventory[123] Research and Development - Research and development investment reached $774 million, accounting for 8.3% of sales revenue, emphasizing the company's commitment to innovation[21] - Research and development expenses accounted for 8.3% of total revenue in 2025, a decrease of 1.2 percentage points from 9.5% in 2024[39] - The company focuses on enhancing its R&D capabilities and platform construction to meet diverse market demands and shorten the time from R&D to mass production[65] - The R&D team consists of 500 PhD holders, 1,336 master's degree holders, and 567 with bachelor's degrees or below, indicating a strong educational background[78] - The company has filed 290 new invention patent applications and obtained 509 patents during the reporting period, bringing the total to 12,621 invention patents[73] Strategic Focus and Future Plans - The company plans to focus on ten key tasks including safety, project management, technology enhancement, and cost control to drive strategic growth in 2026[22] - The strategic focus for 2026 includes expanding global operations and overcoming competitive bottlenecks[22] - The company aims to strengthen its talent pool and enhance corporate culture to support sustainable development[22] - The company anticipates that revenue growth in 2026 will exceed the average growth of comparable peers, with capital expenditures expected to remain roughly flat compared to 2025[155] Financial Position and Cash Flow - The company reported a net cash flow from operating activities of $3,194.3 million in 2025, a slight increase of 0.6% from $3,175.6 million in 2024[36] - Cash and cash equivalents decreased to $5,872.5 million in 2025 from $6,364.2 million in 2024, indicating cash flow challenges[51] - The total interest-bearing debt as of December 31, 2025, is $12,596.2 million, consisting of secured bank loans of $6,662.2 million and unsecured bank loans of $5,925.7 million[130] - Net debt stands at $659.96 million for 2025, compared to a net cash position of $(3,367.02) million in 2024, indicating a significant shift in financial leverage[140] Risks and Challenges - The company faces risks related to high customer concentration, which could impact operational efficiency and profitability if major customers encounter significant issues[88] - Supply chain risks are present due to the global nature of the semiconductor industry, where shortages or delays in critical materials could adversely affect production[89] - The company is exposed to financial risks, including revenue fluctuations due to macroeconomic cycles and changes in customer orders, which could affect sales and profit margins[90] - There is a risk of technology leakage due to the high mobility of technical personnel and limitations in protection measures, which could weaken the company's technological advantages[85] Corporate Governance - The company has established a corporate governance policy since January 25, 2005, and has made revisions to comply with the Corporate Governance Code, with the latest revision on May 8, 2025[176] - The company has maintained compliance with all applicable provisions of the Corporate Governance Code during the fiscal year ending December 31, 2025[176] - The company has a structured board of directors that includes specialized committees such as the Audit Committee, Remuneration Committee, Nomination Committee, and Strategic Committee to assist in governance[176] - The company has appointed four independent non-executive directors to enhance the objectivity and scientific nature of board decisions[177] Market Trends and Industry Outlook - The semiconductor industry is expected to see continued growth driven by demand in generative AI, data centers, and autonomous driving, contributing to market scale increments[59] - The semiconductor industry is experiencing a trend towards localization, with countries actively expanding domestic wafer foundry capacities to mitigate geopolitical impacts on global supply chains[153] - The trend towards localized supply chains is strengthening, with more wafer foundry demand returning to domestic sources[64]

Financial Performance - The company's revenue from principal business for 2025 is projected to be RMB 7,028.1 million, representing a 19.00% increase from RMB 5,906.0 million in 2024[6][34]. - Profit attributable to owners of the parent is anticipated to be RMB 705.6 million in 2025, a substantial increase of 142.44% from RMB 291.0 million in 2024[14][40]. - Profit attributable to owners after deducting non-recurring profits and losses is expected to be RMB 619.7 million in 2025, up 264.00% from RMB 170.3 million in 2024[16][41]. - The company reported a significant increase in revenue, achieving a year-over-year growth of 25% to reach RMB 1.5 billion in the last quarter[62]. - The company achieved a revenue of RMB 7,717.5 million for the year ended December 31, 2025, representing a 14.11% increase from RMB 6,763.3 million in 2024[109]. - The company’s gross profit for 2025 was RMB 1,634.3 million, reflecting a 117.14% increase from RMB 752.6 million in 2024[109]. - The consolidated gross profit margin increased to 21.18%, up 10.05 percentage points from the previous year's 11.13%[160]. Sales and Market Expansion - Sales volume is expected to reach 25,282 tonnes in 2025, a significant increase of 21.25% from 20,850 tonnes in 2024[8][35]. - The company plans to expand its market presence in Southeast Asia, targeting a 10% market share within the next two years[62]. - The company plans to expand its market presence in Southeast Asia, targeting a 30% increase in market share by 2025[66]. - Revenue from new energy vehicles and automotive parts was RMB 3,941 million in 2025, up from RMB 3,314 million in 2024[115]. - The company maintained its leadership in the NEV market, with sales revenue from NEVs and automotive parts reaching RMB 3,940.9 million, a year-on-year increase of 30.31%[166]. Research and Development - Investment in R&D has increased by 30%, focusing on the development of energy-saving variable-frequency air-conditioners and advanced magnet technologies[63]. - R&D investment reached RMB 505.7 million, a year-on-year increase of 57.60%, accounting for 6.55% of revenue[175][178]. - The company is committed to research and development in new technologies related to rare earth materials[75]. - The company has established a R&D center for humanoid robot motor rotors in Hong Kong, enhancing its global R&D footprint and market position in key sectors[97]. - The humanoid robot motor rotors business division was established to capitalize on the growing demand for high-performance NdFeB PMs[180][181]. Operational Efficiency - The company has successfully transformed into a group structure, enhancing operational efficiency through the synergistic operation of its subsidiaries[24][50]. - The company completed the asset transfer and capital increase to its wholly-owned subsidiary, marking its transformation into a group structure with subsidiaries operating synergistically[169][172]. - The company has put a total of 653 industrial robots into operation and established 11 automated production lines, significantly improving production efficiency[177][178]. - The company has established a rare earth recycling system, with a cumulative recovery of 3,681 tons of rare earth raw materials expected by 2025, contributing to stable raw material supply[190]. Dividends and Shareholder Returns - The company plans to distribute cash dividends totaling RMB 550.2 million in 2025, marking a 103.25% increase from RMB 270.7 million in 2024[20][46]. - The company has maintained a cash dividend payout ratio exceeding 50% of cumulative profit attributable to owners since its listing in 2018, with total cash dividends exceeding RMB 1,470.5 million[21][48]. - For 2025, the company plans to distribute a cash dividend of RMB 2.2 per 10 shares, totaling an estimated RMB 302.6 million, representing a year-on-year increase of 103%[192]. Environmental and Social Governance (ESG) - The company is actively involved in environmental, social, and governance (ESG) initiatives, with a dedicated committee overseeing these efforts[83]. - The company was awarded MSCI ESG A Rating for the first time, ranking among the top in the industry[101]. - The company’s ESG rating improved to an A grade from MSCI, ranking it among the industry leaders[106]. - The company donated a total of RMB 3.63 million to society in 2025, including a donation of HKD 1 million for emergency support in Hong Kong[102]. Future Outlook - The company provided a positive outlook, projecting a revenue growth of 20% for the next fiscal year, driven by new product launches and market expansion[61]. - Future guidance estimates revenue growth of 20% for the next fiscal year, driven by increased production capacity and market expansion[66]. - The company plans to add 20,000 tonnes of new capacity on schedule and aims to reach an annual capacity of 60,000 tonnes by the end of 2027[106]. Production Capacity and Achievements - The production capacity expansion plan indicates a target of 60,000 tonnes by 2027, with a compound annual growth rate (CAGR) of 27% from 2022 to 2027[28][54]. - The company successfully reached an annual rare earth permanent magnet (REPM) capacity of 38,000 tonnes, with a capacity utilization rate exceeding 90%[92]. - The designed capacity of REPM reached 40,000 tonnes/year by the end of 2025, with an actual production capacity of 38,000 tonnes and a capacity utilization rate exceeding 90%[170][173]. - Approximately 90% of the Company's total output of REPMs utilized GBD technology, which is applied in high-end industries such as NEVs and robotics[176][179].

Financial Performance - Total revenue for the year ended December 31, 2025, was RMB 88,447,000, a decrease of 43% compared to RMB 155,740,000 in 2024[3] - Gross profit for 2025 was RMB 22,127,000, down 65% from RMB 62,786,000 in 2024[3] - The company reported a loss before tax of RMB 31,378,000 for 2025, compared to a profit of RMB 26,309,000 in 2024[3] - Basic and diluted loss per share for 2025 was RMB (0.03), compared to earnings of RMB 0.02 per share in 2024[4] - The company reported a net loss of RMB 29,716,000 for 2025, compared to a profit of RMB 17,204,000 in 2024[34][36] - The company recorded a net loss of approximately RMB 299 million, an increase of RMB 474 million or 270.9% (2024: RMB 175 million) due to the cumulative impact of the aforementioned factors[72] Assets and Liabilities - Total assets less current liabilities decreased to RMB 232,644,000 in 2025 from RMB 260,661,000 in 2024[6] - Non-current assets totaled RMB 57,439,000 as of December 31, 2025, slightly down from RMB 58,686,000 in 2024[5] - Cash and cash equivalents decreased to RMB 21,932,000 in 2025 from RMB 28,226,000 in 2024[5] - Trade receivables decreased to RMB 163,286,000 in 2025 from RMB 174,190,000 in 2024[5] - The total amount of bank borrowings as of December 31, 2025, was RMB 12,764,000, down from RMB 17,712,000 in 2024[43] - As of December 31, 2025, the company had net current assets of approximately RMB 1,752 million (2024: RMB 2,020 million) and cash and cash equivalents decreased by approximately RMB 63 million to about RMB 219 million (2024: RMB 282 million)[73] - The company’s trade payables increased to RMB 1,242,000 in 2025 from RMB 560,000 in 2024[41] - The company has no significant contingent liabilities as of December 31, 2025 (2024: none)[76] - As of December 31, 2025, the company's debt-to-equity ratio decreased by 1.3 percentage points to 5.5% from 6.8% as of December 31, 2024, primarily due to a reduction in interest-bearing bank borrowings[80] Revenue Sources - Revenue from medical imaging film products accounted for about 85% of total revenue in 2025, compared to 76% in 2024[17] - Revenue from medical imaging film products and software decreased by approximately RMB 603 million or 41.2% to about RMB 862 million (2024: RMB 1,465 million) due to lower average selling prices and decreased sales volume[62] - Revenue from medical imaging cloud services decreased by approximately RMB 70 million or 76.1% to about RMB 22 million (2024: RMB 92 million), following the decline in film product sales[63] Expenses - The cost of goods sold for the year was RMB 55,947,000, down from RMB 83,682,000 in 2024, reflecting a decrease of approximately 33%[29] - Other income for the year totaled RMB 6,154,000, a decrease from RMB 8,583,000 in 2024, primarily due to lower government grants[28] - The group incurred employee benefit expenses of RMB 10,711,000 in 2025, compared to RMB 11,884,000 in 2024, indicating a reduction of approximately 10%[29] - The group’s depreciation of property, plant, and equipment increased to RMB 14,038,000 in 2025 from RMB 6,562,000 in 2024, reflecting a significant rise[29] - Operating expenses increased by approximately RMB 22 million or 12.4% to about RMB 200 million (2024: RMB 178 million), mainly due to increased depreciation of property, plant, and equipment[68] Taxation - The company's income tax expense for 2025 was a credit of RMB 1,417,000, compared to an expense of RMB 8,859,000 in 2024[31] - The applicable income tax rate for the company in mainland China is 25%, with a subsidiary qualifying for a reduced rate of 15% due to high-tech enterprise status[32] Strategic Plans - The company plans to expand its customer base and strengthen its market position in Shandong Province by extending its services to other regions[53] - Strategic acquisitions and upgrades of hardware and software are intended to enhance the supply of medical imaging cloud services[53] - The company believes that developing medical imaging cloud services and expanding its product range will increase long-term revenue and strengthen its role as a one-stop medical imaging solution provider[56] - The company aims to participate in trade exhibitions to promote its brand and increase market visibility[53] Shareholder Information - The company has no plans to declare dividends for the year 2025, consistent with 2024[33] - The company has not engaged in any purchase, sale, or redemption of its listed securities during the year[89] - The annual general meeting is scheduled for May 29, 2026[92] - The company expresses gratitude to all shareholders and stakeholders for their ongoing support, as well as appreciation for the efforts and contributions of all employees[98] Corporate Governance - The board of directors includes both executive and independent non-executive members, ensuring a diverse governance structure[103] - The audit committee, along with the management and independent auditor, reviewed the accounting principles and policies adopted by the group, confirming that the annual performance aligns with applicable accounting standards and regulations[95] - The consolidated financial statements for the year ending December 31, 2025, have been agreed upon by the group's auditor, ensuring consistency with the audited financial statements[96] Company Background - The company was registered in the Cayman Islands on December 11, 2020, as a limited liability company[99] - The shares of the company were listed on the main board of the Hong Kong Stock Exchange on December 29, 2022[99] - The company adopted a share incentive plan on December 2, 2023, to motivate and reward employees[100] - The reporting period for the financial statements is from January 1, 2025, to December 31, 2025[100]

Financial Performance - The company's net revenue for the year ending December 31, 2025, was €3,043 million, an increase of 2.2% from €2,977 million in the previous year[19]. - The gross profit margin increased to 67.1%, compared to 68.2% in the previous year, with a gross profit of €2,041 million[19][20]. - EBIT for the year was €1,052 million, representing a margin of 34.6%, up from 33.8% the previous year[19][20]. - Operating expenses decreased as a percentage of net revenue, contributing to the improved EBIT margin[20]. - The financial loss net amount was €748.5 million, a decrease of €1,158 million compared to the previous reporting date[31]. - Financial liabilities increased by €1,419 million due to financing arrangements for the acquisition of the Versace Group[32]. - Cash and cash equivalents amounted to €833.9 million, up from €601.7 million in the previous year[30]. - Net cash flow from operating activities was €888 million, while net cash used in investing activities was €1.521 billion[33]. - Total revenue for the year ended December 31, 2025, reached €3,042,769,056, an increase from €2,976,971,031 in 2024, representing a growth of approximately 2.2%[149]. - Net profit for the year ended December 31, 2025, was €795,593,167, down from €849,706,977 in 2024, showing a decrease of approximately 6.4%[149]. - Total assets increased to €7,062,447,190 in 2025 from €5,288,542,681 in 2024, marking a growth of about 33.6%[148]. - Total liabilities increased to €3,403,395,599 in 2025 from €2,023,476,774 in 2024, indicating a rise of about 68%[148]. Strategic Initiatives - The group reported a solid performance in a challenging environment, marking a significant milestone with the acquisition of Versace, which enhances the product portfolio with complementary brands[12]. - Prada brand showcased its innovative strength through trend-setting fashion shows and successful product launches, contributing to balanced brand performance[12]. - Miu Miu's vibrant and eclectic creative expression continues to resonate with diverse female imagery, attracting significant audience engagement through advertising and fashion shows[12]. - The company focused on enhancing retail relationships by investing in store layouts and controlling the opening and expansion of new stores for both Prada and Miu Miu brands[12]. - The company is committed to strengthening industrial capabilities by expanding production facilities and enhancing control over strategic production processes[12]. - A minority stake investment in Rino Mastrotto, a global provider of materials and custom services for the luxury goods industry, reflects the company's dedication to long-term partnerships[14]. - The company is advancing its digital development and beginning to reap the benefits of years of investment in this area[15]. - The company plans to enhance brand appeal and optimize its retail and wholesale networks, including adjustments to discount channels and pricing strategies[18]. - The company continues to invest in technology and digitalization to enhance retail and production capabilities[27]. Sustainability and Social Responsibility - The group is executing its sustainability strategy across all pillars, including environmental initiatives and responsible management of resources[16]. - The company achieved significant milestones in promoting a fair and inclusive work environment, including gender equality certification and the establishment of a global talent culture forum[16]. - The 25th anniversary of the Prada Group Academy underscores the company's commitment to preserving craftsmanship and ensuring generational continuity[16]. - The company has partnered with UNESCO on the SEA BEYOND project to strengthen its commitment to marine education[17]. - The group has established a sustainability strategy focusing on greenhouse gas reduction and the use of low-impact materials in products and packaging[48]. - The company is focusing on evolving strategies to meet stakeholder expectations and adapt to market changes, with a particular emphasis on reducing carbon emissions and transitioning to environmentally friendly materials[50]. - The company is committed to sustainability through initiatives like Sea Beyond and Forestami Academy, promoting a culture of sustainability internally and externally[50]. Governance and Compliance - The board consists of 11 members, with approximately 45% being female directors, reflecting a commitment to diversity[83]. - The independent auditor for the financial statements is KPMG S.p.A., appointed for a three-year term until December 31, 2027[73]. - The company has adopted governance practices that align with applicable laws and regulations, ensuring transparency and shareholder rights[80]. - The board held a total of seven meetings in the fiscal year 2025 to discuss overall corporate strategy and evaluate financial performance, achieving an average attendance rate of 92.20%[86]. - The board is responsible for continuous assessment of internal controls and risk management effectiveness[89]. - The company emphasizes compliance with legal regulations and internal controls as part of its operational strategy[92]. - The company has implemented various controls to enhance cash management efficiency, addressing potential risks related to cash shortages in stores[52]. - The company has adopted a new shareholder communication policy on July 30, 2024, ensuring compliance with current listing rules[143]. Risk Management - The group faces risks related to losing strategic retail locations due to unfavorable lease negotiations, which could negatively impact financial performance[38]. - The group actively monitors the market to secure suitable professional skills and crafts, while establishing retention measures based on performance management processes and incentive plans[37]. - The group manages supply chain risks by contracting with multiple suppliers to avoid concentration and ensuring compliance with quality and ethical standards[43]. - Credit risk is primarily attributed to trade receivables from wholesale channels and business partners, with the company managing this risk through customer credit monitoring and diversification of financial counterparties[51]. - The company faces foreign exchange risk due to its international operations, which may adversely affect revenues and expenses; it uses derivative contracts to hedge this risk[54]. - Interest rate risk is managed through the use of derivatives to convert floating-rate debt into fixed-rate debt[54]. Human Resources and Talent Management - The group emphasizes the importance of talent management and retention, implementing training programs through the Prada Academy to cultivate necessary professional skills[37]. - The group has a balanced distribution of stores to mitigate operational risks, with production primarily located in Italy across multiple factories[46]. - The company's compensation policy aims to attract, reward, and retain employees, considered key to business success, with a focus on market-competitive compensation[113]. - The compensation structure includes fixed, variable, direct, and deferred components, linked to the group's annual performance and specific departmental goals[114]. Financial Reporting and Accounting - The company is set to adopt new international financial reporting standards effective January 1, 2025, which have been approved by the EU[164]. - The company has not yet completed the assessment of the impact of new standards and amendments that are not applicable as of December 31, 2025[167]. - Revenue from the sale of goods is recognized when all criteria are met, with provisions for returns based on historical experience and other relevant data[199]. - Current and deferred tax expenses are recognized in profit or loss, excluding those related to business combinations or directly recognized in equity[200].

Financial Performance - Prada Group achieved a net revenue of €5.7 billion, reflecting an 8% increase year-over-year[11] - The adjusted EBIT margin increased to 23.2%, with a 3% growth at current exchange rates[13] - Prada Group reported a total equity of €255,882,400, equivalent to 2,558,824,000 shares at €0.10 per share[146] - The Group achieved a net profit of €854,922 thousand, which is a 1.4% increase compared to €843,400 thousand in 2024[150] - The cost of goods sold was €1,125,444 thousand, resulting in a gross profit margin of 80.3%, up from 79.8% in the previous year[150] - The Group's operating cash flow was reported at €1,201,882 thousand, slightly down from €1,212,784 thousand in 2024[152] - The net financial position showed a deficit of €465,810 thousand, impacted by capital expenditures of €595 million and financing for the Versace acquisition[152] - The recurring operating income (adjusted EBIT) was €1,323.6 million, representing 23.2% of net revenue, slightly down from 23.6% in 2024[174] - Net profit for the year was €854.9 million, accounting for 15.0% of net revenue, compared to €843.4 million (15.5%) in 2024[176] Retail and Market Presence - Retail sales remain the primary growth engine, driven by full-price sales[11] - The company operates 843 directly operated stores globally, with a significant presence in Europe, Asia-Pacific, and the Americas[16] - The company operates multiple subsidiaries globally, with 100% ownership in several key markets, ensuring strong control over its operations[109][110] - The company has established a significant retail footprint in Asia, with operations in countries such as Japan, South Korea, and Singapore[130] - The number of stores increased to 843, with 31 new openings and 17 closures, including 220 stores from the integration of Versace, primarily in the Asia-Pacific region[165] - Retail sales for the Prada brand experienced a decline of 1% over the 12-month period, while Miu Miu saw a significant increase of 35% in retail sales[153] Strategic Acquisitions and Investments - The acquisition of Versace, completed in early December, marks a historic milestone for the group and opens a new chapter[11] - Prada Group announced the successful acquisition of Versace from Capri Holdings, marking a significant step in its development journey[69] - The group made a minority equity investment in Rino Mastrotto, a global provider of luxury materials, to strengthen industrial capabilities[156] - The group established a €1,500 million syndicated financing agreement for the acquisition of Versace, including a €1,000 million term loan and a €500 million bridge loan[183] Sustainability and Corporate Responsibility - The group emphasizes sustainable development as a fundamental responsibility and a significant opportunity[12] - Prada Group's commitment to sustainability is reflected in its zero-fur policy and the launch of products made from regenerated nylon[53] - The group launched its first jewelry collection made from 100% recycled gold, named Eternal Gold, in 2022[58] - Prada Group's sustainable development strategy is built on three pillars: Earth, People, and Culture, with a focus on reducing environmental impact and enhancing stakeholder engagement[98] - The company has established a sustainability committee to assist the board in evaluating sustainability issues and making informed decisions[98] - The group continues to execute its sustainability strategy, making progress in environmental initiatives and achieving gender equality certification[158] Brand and Product Development - The company has invested heavily in capital expenditures to enhance retail, digital, and industrial capabilities[11] - Prada Group signed a global licensing agreement with L'Oréal for high-end cosmetics in 2023, enhancing its presence in the beauty sector[64] - The company is set to return to the beauty sector with a new line of cosmetics and skincare products in 2023[62] - The company emphasizes the use of exclusive custom fabrics and leathers, adhering to strict technical and style specifications to ensure product quality[91] - The group is focused on digital development, yielding results from years of investment in information systems[157] Employee and Cultural Initiatives - Prada Group employs approximately 18,000 staff across 25 owned factories, with 23 located in Italy[19] - Prada Group achieved UNI/PdR 125:2022 gender equality certification, demonstrating its commitment to creating an inclusive workplace[69] - The group celebrated the 25th anniversary of the Prada Academy, a platform for skill development and knowledge transfer to younger generations[69] - The company is committed to enhancing diversity, equity, and inclusion, focusing on employee well-being and engagement[100] - The group established a global talent culture forum to improve employee welfare and work-life balance[100] Risk Management and Operational Stability - The group is actively managing risks related to brand protection and talent retention to ensure operational stability and financial performance[189][190] - The business may face interruptions due to geopolitical tensions, public health events, and quality control failures, potentially leading to economic and reputational losses[199] - The group has balanced store distribution to mitigate risks, with operations primarily in Italy across multiple factories and ongoing online sales initiatives[200]

User Growth and Engagement - Viu added 1.3 million paid users, reaching a total of 16.8 million paid subscribers, with strong performance in Thailand, Indonesia, and Malaysia[20]. - ViuTV's digital membership increased by over 3.6% to 3.4 million, with viewing time rising by 6.7%[22]. - Viu introduced over 200 new productions, including popular Korean dramas and localized content, driving significant user engagement[21]. - Viu's short drama format launched in January 2026 achieved over 11% viewing penetration within the first three weeks[21]. - The return of ViuTV's popular talent show "全民造星VI" is expected to inject new energy into the talent pool[22]. Financial Performance - The company reported a significant increase in revenue, achieving a total of HKD 10 billion for the last quarter, representing a 15% year-over-year growth[35]. - Consolidated profit increased by 35% to HKD 2.615 billion[149]. - Revenue increased by 7% to HKD 40.252 billion[149]. - EBITDA rose by 3% to HKD 13.290 billion[150]. - Total revenue for the year ended December 31, 2025, increased by 5% to HKD 36.55 billion, with operational costs reduced by 4% to HKD 31.79 billion[159]. Business Strategy and Growth Initiatives - The company is focusing on building new growth engines to expand market coverage and enhance monetization capabilities[21]. - The company aims to leverage its strong financial position to create value for customers, partners, and shareholders while contributing to Hong Kong's digital development[17]. - The company is expanding its market presence in Southeast Asia, targeting a 20% market share in the region by 2025[35]. - New product launches are expected to contribute an additional HKD 1 billion in revenue, with a focus on innovative telecommunications solutions[35]. - The introduction of the Viu-HBO Max streaming package is expected to drive subscription growth and expand market coverage[163]. Corporate Governance and Board Structure - The board consists of 13 members, including 2 executive directors, 5 non-executive directors, and 6 independent non-executive directors, ensuring at least one independent director has appropriate professional qualifications[68]. - The company emphasizes high standards of corporate governance, ensuring ethical practices and compliance with applicable laws and regulations[61]. - The board has established a mechanism for independent opinions, with at least one private meeting annually between the chairman and independent non-executive directors[79]. - The board's performance evaluation process includes self-assessment questionnaires from all directors, indicating overall satisfactory performance for the year ending December 31, 2025[81]. - The company has adopted a securities trading code for all directors and employees, ensuring compliance with the standards set forth in the listing rules[65]. Risk Management and Compliance - The group emphasizes a strong risk management culture, ensuring operational units identify and manage risks effectively to protect assets and ensure accurate financial reporting[112]. - The audit committee oversees the implementation of a whistleblowing policy, allowing stakeholders to report misconduct, ensuring transparency and confidentiality[117]. - The group has updated its data privacy policy in 2024 to reflect changing regulatory environments and protect individuals' privacy rights[117]. - The group employs a "three lines of defense" model for its enterprise risk management framework, ensuring effective risk identification and management[120]. - The group conducts regular evaluations of its risk management and internal control systems, with at least annual certifications to ensure ongoing effectiveness[125]. Sustainability and Social Responsibility - The company is committed to sustainable development practices, addressing environmental, social, and governance issues[61]. - The group has optimized its sustainability policies, introducing new climate change and occupational safety policies to enhance governance standards[194]. - The group supports the government's "Co-Creation Teen Program" to assist disadvantaged youth in creating opportunities[200]. - The group received the "Caring Company" advanced performance logo from the Hong Kong Council of Social Service[200]. - The recognition highlights the group's 23 years of contributions to promoting a culture of care[200]. Technology and Innovation - Hong Kong Telecom launched the 800G AI Superhighway service and completed the deployment of 25Gbps mobile backbone to enhance network capabilities[16]. - Ongoing research and development efforts are focused on 5G technology, with an investment of HKD 500 million planned for the next year[35]. - The group conducted over 170 AI workshops for more than 15,000 customers, emphasizing its commitment to enhancing digital literacy[197]. - A generative AI task force has been established to drive new strategies and oversee the adoption of generative AI while managing associated risks and compliance challenges[138]. - The company has a commitment to innovation, continuously extending its business into a wide range of innovative service solutions[138].

Financial Performance - Total revenue for 2025 reached HKD 5,448 million, an increase of 17% compared to HKD 4,643 million in 2024[9] - Net customer service revenue amounted to HKD 3,619 million, reflecting a growth of 6% from HKD 3,425 million in the previous year[9] - EBITDA for the year was HKD 1,508 million, slightly down from HKD 1,511 million in 2024[9] - The company reported a loss attributable to shareholders of HKD 25 million, a significant decline of 517% from a profit of HKD 6 million in 2024[9] - The group reported a profit of HKD 18 million from its Hong Kong operations in 2025, a decrease of 42% compared to 2024, primarily due to a decline in bank interest income[35] - Total revenue from Hong Kong operations increased by HKD 805 million or 17% to HKD 5.448 billion, driven by stable local service revenue and continued growth in enterprise solutions[37] - Hardware revenue surged by HKD 611 million or 50%, reflecting strong demand for new flagship mobile devices[37] - EBITDA from Hong Kong operations remained stable at HKD 1.508 billion, benefiting from cost-saving measures and a 2% reduction in operating expenses through AI efficiency improvements[37] - The overall gross profit decreased by HKD 26 million or 1% to HKD 2,914 million, mainly due to a reduction in net customer service gross profit[63] - Interest and other financing income for 2025 was HKD 79 million, down from HKD 98 million in 2024, primarily due to a decrease in deposit interest rates[66] Strategic Initiatives - The company aims to enhance network coverage and capacity by deploying 5.5G hotspots at high-traffic locations[13] - The introduction of an agent-based AI system is expected to improve network performance and overall user experience[13] - The company plans to empower businesses through advanced mobile communication and data solutions, facilitating digital transformation[14] - The group is focused on enhancing network infrastructure and accelerating business transformation through AI and 5G innovations to improve customer experience and drive enterprise development[42] - The group aims to enhance network capabilities to meet the growing demand for high-speed, seamless connectivity by 2025, focusing on expanding 5G network coverage and performance[47] - The group has strategically deployed 5.5G network hotspots in major venues, enhancing network capacity to support significant events in Hong Kong[47] - The launch of the "World PLAN" in July 2025 allows customers to enjoy seamless data services in Hong Kong and 222 other regions[50] - The group introduced a new 5G broadband plan equipped with Wi-Fi 7 routers, providing ultra-fast, low-latency, and stable connections for home users[50] - The "3Business" brand launched a comprehensive service package integrating advanced 5G technology to assist businesses in accelerating digital applications[54] - The group is collaborating with a leading global cloud service provider to establish an AI solutions digital platform for various industries, including construction and logistics[55] Corporate Governance - The company has a strong focus on corporate governance, with multiple committees overseeing remuneration and audit functions[113] - The company’s independent non-executive directors have extensive backgrounds in finance and management, enhancing governance and oversight[110][111][112] - The board consists of 10 members, including a non-executive chairman, two vice-chairmen (one executive and one non-executive), an executive director and CEO, two non-executive directors, and four independent non-executive directors[181] - The company has established a clear division of responsibilities between the chairman and the CEO to enhance independence and accountability[184] - The board conducts an annual performance evaluation to ensure effectiveness and efficiency, with a focus on areas such as composition, information flow, and accountability[191] - The board's composition includes over one-third independent non-executive directors, exceeding listing rules for independence[192] - The company has established effective mechanisms to support a highly independent board, ensuring independent opinions are communicated[192] Market and Economic Conditions - The group faces significant competition in the telecommunications industry, which may impact customer acquisition and retention costs, growth rates, and market share[82] - The group operates in a market where economic conditions can significantly affect its financial performance, particularly in Hong Kong[80] - The group is subject to risks from rapid technological advancements in the telecommunications sector, which may affect its market position if it fails to develop or acquire new technologies[83] - The group faces risks from widespread diseases, natural disasters, and economic difficulties that could negatively impact consumer demand for its products, affecting revenue and market share[88] - Regulatory changes and interpretations may adversely affect the group's financial condition and operational performance, particularly regarding telecommunications regulations and licensing[90][92] Sustainability and Social Responsibility - The company is committed to integrating sustainability goals into its business development to create long-term value for stakeholders[15] - The board has approved a new sustainability initiative aimed at reducing carbon emissions by 30% over the next five years[1] - Charitable donations to community projects amounted to approximately HKD 21.7 million for the year, an increase from HKD 12.5 million in 2024[133] - The company aims to address social and environmental challenges, including a commitment to transition to a net-zero economy[178] Future Outlook - Future outlook indicates a projected revenue growth of 10% for the next fiscal year, driven by new product launches and market expansion strategies[1] - The company is investing in new technologies, with a budget allocation of $200 million for R&D in the upcoming year[1] - Market expansion efforts include entering two new Southeast Asian countries, aiming for a 5% market share within the first year of operation[1] - A new product line is set to launch in Q2 2024, expected to contribute an additional $50 million in revenue[1] Shareholder Information - The group plans to pay a final dividend of HKD 0.0521 per share for 2025, maintaining the same level as in 2024, resulting in a total annual dividend of HKD 0.0749 per share[36] - Major shareholders include Hutchison Telecommunications with 23,689,889 shares and CK Hutchison Group Telecom Holdings Limited with 3,184,982,840 shares, representing approximately 66.09% of total shares[152] - Li Ka-Shing holds a total of 404,132,779 shares, representing approximately 8.38% of the company's shares, while Li Ka-Shing Foundation holds 350,527,953 shares, representing approximately 7.27%[153] Risk Management - The group is exposed to significant fluctuations in financial markets and commodity prices, which may limit access to funding and increase capital raising costs[88] - Cybersecurity risks are increasing, with a rise in the frequency and severity of attacks that could disrupt operations and lead to costly remediation expenses[98] - Compliance with data protection laws is becoming more complex, and failure to meet these obligations could result in regulatory actions or civil claims, adversely affecting financial performance[100] - The group cannot guarantee that new investments will improve operational margins, which may lead to significant negative impacts on financial performance[89]