[Management Discussion and Analysis](index=3&type=section&id=Management%20Discussion%20and%20Analysis) The Group formulates long-term corporate strategies, allocating capital and personnel to high-opportunity areas to generate long-term returns exceeding the cost of capital, and invests in existing and new businesses to continuously evolve into a diversified and sustainably developing conglomerate - The Group implements a long-term corporate strategy, investing capital and personnel in high-growth areas to generate long-term returns exceeding the cost of capital, aiming to become a diversified and sustainably developing conglomerate[4](index=4&type=chunk) - For the six months ended June 30, 2025, the Group's total revenue decreased by **26.3%** year-on-year to **HK$523,692 thousand**, Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) significantly declined by **83.0%**, resulting in a net loss after tax of **HK$51,649 thousand**[5](index=5&type=chunk)[6](index=6&type=chunk)[7](index=7&type=chunk) - The Group's main businesses include watch and accessories manufacturing and distribution, property investment, and banking and financial services, with watch business profitability declining while banking business achieved slight growth[7](index=7&type=chunk)[8](index=8&type=chunk) [Our Strategy](index=3&type=section&id=Our%20Strategy) The Group formulates long-term corporate strategies, allocating capital and personnel to high-opportunity areas to generate long-term returns exceeding the cost of capital, and invests in existing and new businesses to continuously evolve into a diversified and sustainably developing conglomerate - The Group adopts a long-term corporate strategy, investing in high-growth areas to achieve excess returns[4](index=4&type=chunk) - The goal is to become a diversified conglomerate with sustainable long-term development capabilities[4](index=4&type=chunk) [Financial Highlights](index=3&type=section&id=Financial%20Highlights) For the six months ended June 30, 2025, the Group recorded total revenue of **HK$523,692 thousand**, a year-on-year decrease of **26.3%**, with operating expenses down **14.9%**, gross profit from non-banking and financial businesses declining **44.1%**, and gross profit from banking and financial businesses growing **2.0%**, leading to an **83.0%** drop in EBITDA and a net loss after tax of **HK$51,649 thousand**, while total assets and liabilities increased and total equity slightly rose Financial Highlights for the Six Months Ended June 30, 2025 | Metric | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Total Revenue | 523,692 | 710,313 | -26.3 | | Operating Expenses | 411,705 | 484,046 | -14.9 | | Gross Profit from Non-Banking & Financial Businesses | 125,263 | 224,068 | -44.1 | | Gross Profit from Banking & Financial Businesses | 243,220 | 238,499 | 2.0 | | EBITDA | 14,216 | 83,843 | -83.0 | | (Loss)/Profit Before Tax | (42,847) | 13,192 | N/A | | Net (Loss)/Profit After Tax | (51,649) | 3,708 | N/A | | Basic (Loss)/Earnings Per Share | (0.97 HK cents) | 0.16 HK cents | N/A | Balance Sheet Highlights as of June 30, 2025 | Metric | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Total Assets | 20,088,793 | 17,963,825 | 11.8 | | Total Liabilities | 16,064,427 | 14,181,780 | 13.3 | | Total Equity | 4,024,366 | 3,782,045 | 6.4 | [Operating Results](index=4&type=section&id=Operating%20Results) The Group's total revenue for the first half decreased by **26.3%** year-on-year, primarily due to declining profitability in the watch business, while banking operations saw slight growth, leading to a **44.1%** drop in gross profit from non-banking and financial businesses, an **83.0%** decline in EBITDA, and a net loss after tax, with the Group implementing strategic measures such as inventory optimization, cost reduction, new product development, and market expansion to address challenges - The Group's total revenue decreased by **26.3%** year-on-year to **HK$523,692 thousand**, primarily due to declining profitability in the watch business[6](index=6&type=chunk)[8](index=8&type=chunk) - Operating expenses decreased by **14.9%** year-on-year to **HK$411,705 thousand**[6](index=6&type=chunk) - Net loss after tax was **HK$51,649 thousand**, compared to a profit of **HK$3,708 thousand** in the same period last year[7](index=7&type=chunk) [Watches, Clocks, and Watch Accessories Business](index=5&type=section&id=Watches%2C%20Clocks%2C%20and%20Watch%20Accessories%20Business) The watch business experienced a decline in profitability and overall revenue in the first half, primarily due to the macroeconomic environment, conservative consumer spending, intensified market competition, and reduced e-commerce platform traffic, prompting the Group to actively implement measures such as inventory optimization, cost reduction, enhanced centralized control, and new product R&D to address market challenges - Watch business profitability declined, primarily impacted by the macroeconomic environment, conservative consumer spending, intensified market competition, and reduced e-commerce platform traffic[8](index=8&type=chunk) Segment Performance of Watches, Clocks, and Watch Accessories Business (For the Six Months Ended June 30, 2025) | Company Name | Revenue (HK$) | Net Profit/(Loss) After Tax (HK$) | Revenue Growth/(Decline) (%) (YoY) | | :--- | :--- | :--- | :--- | | Zhuhai Rossini Watch Industry Co., Ltd. | 100,326,000 | 2,497,000 | (32.4) | | Ebohr Fine Group | 54,990,000 | (23,271,000) | (40.8) | | Ernest Borel Group | 37,420,000 | (12,427,000) | (6.6) | | Corum, Eterna and Delma Group | 20,413,000 | (27,177,000) | (80.1) | | Other Companies | 58,380,000 | (4,555,000) | (22.9) | [Local Own Brands – Zhuhai Rossini Watch Industry Co., Ltd. ("Rossini") and Ebohr Fine Group](index=6&type=section&id=Local%20Own%20Brands%20%E2%80%93%20Zhuhai%20Rossini%20Watch%20Industry%20Co.%2C%20Ltd.%20%28%22Rossini%22%29%20and%20Ebohr%20Fine%20Group) Rossini and Ebohr Fine Group enhance market competitiveness by optimizing inventory and accounts receivable management, implementing cost reduction and efficiency improvement measures (e.g., cross-brand integration, refined store management, optimized organizational structure), and strengthening centralized control (three-color early warning mechanism), while actively investing in smart watch R&D, expanding cultural and creative product lines, and launching wedding and business jewelry watch series to meet market demands with innovative products - Optimized inventory and accounts receivable management, achieving the year-beginning inventory reduction target and lowering bad debt risk[11](index=11&type=chunk) - Implemented cost reduction and efficiency improvement measures, including cross-brand integration, refined direct-operated store management, and optimized organizational structure[11](index=11&type=chunk) - Strengthened centralized control by establishing a red, yellow, and blue three-color early warning mechanism to monitor performance changes in real-time[12](index=12&type=chunk) - Actively invested in smart watch R&D, expanded cultural and creative product lines, and launched wedding and business jewelry watch series[13](index=13&type=chunk) [Foreign Own Brand – Ernest Borel Group](index=8&type=section&id=Foreign%20Own%20Brand%20%E2%80%93%20Ernest%20Borel%20Group) Ernest Borel Group optimizes inventory structure through precise, timely inventory assessment, cross-departmental approval processes, and three key strategies (stable sales supply, promotion of slow-moving items, and procurement-sales collaboration), while strengthening social media promotion and offline campaigns, and planning to expand into Southeast Asian and North American markets, deepening cooperation with e-commerce platforms and authorized retailers to enhance brand awareness and sales - Optimized inventory structure by reducing inventory pressure through real-time inventory assessment, strict approval processes, and three key strategies: stable sales, promotion of slow-moving items, and procurement-sales collaboration[15](index=15&type=chunk) - Strengthened promotional activities, actively managed official media platforms, and enhanced brand exposure and sales through in-store promotions and holiday campaigns[16](index=16&type=chunk) - Looking ahead to 2025, the focus will be on expanding into Southeast Asian and North American markets, increasing duty-free store sales, optimizing distribution channels, and exploring collaborations with live-streaming platforms[17](index=17&type=chunk) [Non-Own Brands](index=9&type=section&id=Non-Own%20Brands) For the six months ended June 30, 2025, four distribution companies recorded revenue of **HK$38,942 thousand**, a year-on-year decrease of **28.9%**, and a net loss after tax of **HK$1,927 thousand**, with the loss expanding year-on-year Performance of Non-Own Brand Distribution Companies (For the Six Months Ended June 30, 2025) | Metric | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 38,942 | 54,669 | -28.9 | | Net Loss After Tax | (1,927) | (1,717) | 12.2 (Loss expanded) | [Others](index=9&type=section&id=Others) Other non-core watch, clock, and watch accessories businesses recorded revenue of **HK$19,438 thousand** during the reporting period, a year-on-year decrease of **7.7%**, and a net loss after tax of **HK$2,628 thousand**, with the loss significantly expanding year-on-year Performance of Other Non-Core Watch Businesses (For the Six Months Ended June 30, 2025) | Metric | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 19,438 | 21,064 | -7.7 | | Net Loss After Tax | (2,628) | (715) | 267.6 (Loss expanded) | [Banking and Financial Business](index=10&type=section&id=Banking%20and%20Financial%20Business) Wealthy Land Bank's revenue grew by **2.0%** year-on-year, with net profit after tax attributable to owners increasing by **0.7%**, while net interest and dividend income decreased by **7.2%** due to interest rate cut expectations and Swiss Franc appreciation; net commission and service fee income rose **4%** driven by expanded assets under management, and trading income surged **59%** from increased foreign exchange volumes, with operating expenses down **1.6%**, net asset inflows of **Swiss Francs 573.4 million**, and total assets up **15.3%**, maintaining strong capital ratios (capital ratio **20.3%**, leverage ratio **6.6%**, LCR **487%**) well above regulatory standards, as the bank implements its HORIZON strategy to accelerate digital transformation of client onboarding, strengthen risk management, and expand into the Asian high-net-worth market through Wealthy Land Wealth Management (Hong Kong) Limited Wealthy Land Bank Limited Key Financial Data (For the Six Months Ended June 30, 2025) | Metric | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 243,220 | 238,499 | 2.0 | | Net Profit After Tax Attributable to Owners | 45,713 | 45,393 | 0.7 | | Net Interest and Dividend Income | 128,789 | 138,713 | -7.2 | | Trading Income | 20,941 | 13,147 | 59.0 | | Operating Expenses | 168,460 | 171,198 | -1.6 | - Assets under management were approximately **Swiss Francs 3,900 million** at the end of June 2025, a net increase of **Swiss Francs 400 million**[19](index=19&type=chunk) - Total assets increased by **HK$2,053,245 thousand** to **HK$15,485,785 thousand**, a **15.3%** increase[20](index=20&type=chunk) - Total capital ratio was approximately **20.3%**, leverage ratio **6.6%**, and liquidity coverage ratio reached **487%**, significantly exceeding regulatory standards[20](index=20&type=chunk) - Actively implementing the HORIZON strategy, formulating specific strategies for Asia, and accelerating the digital transformation of internal client onboarding processes[20](index=20&type=chunk)[21](index=21&type=chunk) - Established Wealthy Land Wealth Management (Hong Kong) Limited to provide wealth management solutions for high-net-worth individuals in Asia[22](index=22&type=chunk) [Investment Businesses](index=13&type=section&id=Investment%20Businesses) The Group's investment businesses include listed equity investments and property investments, with listed equity investments in Crown City Grandway generating fair value change gains, while investments in Minxin Holdings incurred fair value change losses, and both rental income and net profit after tax from property investment business declined - Listed equity investments include shares in Crown City Grandway and Minxin Holdings[24](index=24&type=chunk)[25](index=25&type=chunk) - Both rental income and net profit after tax from property investment business decreased year-on-year[26](index=26&type=chunk) [Listed Equity Investments](index=13&type=section&id=Listed%20Equity%20Investments) The Group holds listed equity investments in Crown City Grandway New Materials Co., Ltd. and Minxin Holdings Limited, with the investment in Crown City Grandway generating a net fair value change gain of **HK$4,066 thousand** due to rising share prices, while the investment in Minxin Holdings resulted in a net fair value change loss of **HK$17,630 thousand** due to declining share prices Listed Equity Investment Performance (For the Six Months Ended June 30, 2025) | Investee | Fair Value as of June 30, 2025 (HK$ thousand) | Net Fair Value Change Gain/(Loss) (HK$ thousand) | Share Price as of December 31, 2024 | Share Price as of June 30, 2025 | | :--- | :--- | :--- | :--- | :--- | | Crown City Grandway New Materials Co., Ltd. | 29,879 | 4,066 (Gain) | RMB 2.65 | RMB 2.98 | | Minxin Holdings Limited | 185,115 | (17,630) (Loss) | HK$2.30 | HK$2.10 | - The Group intends to hold its investment in Minxin Holdings Limited for the long term[25](index=25&type=chunk) [Property Investments](index=14&type=section&id=Property%20Investments) The Group's investment properties in Mainland China and Hong Kong are fully leased, providing stable rental returns, with rental income for the six months ended June 30, 2025, at **HK$8,943 thousand**, a **25.5%** year-on-year decrease, and net profit after tax at **HK$7,692 thousand**, a **34.5%** year-on-year decrease Property Investment Business Performance (For the Six Months Ended June 30, 2025) | Metric | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Rental Income | 8,943 | 11,992 | -25.5 | | Net Profit After Tax | 7,692 | 11,729 | -34.5 | - All investment properties are fully leased, providing stable rental returns[26](index=26&type=chunk) [Financial Position](index=14&type=section&id=Financial%20Position) As of June 30, 2025, the Group's total assets were **HK$20,088,793 thousand**, total liabilities were **HK$16,064,427 thousand**, and total equity was **HK$4,024,366 thousand**, with the debt-to-asset ratio decreasing from **22.0%** on December 31, 2024, to **19.1%**, and Group borrowings primarily secured by subsidiary guarantees, equity interests, and legal charges over land and buildings of non-banking and financial businesses Financial Position Summary (As of June 30, 2025) | Metric | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Total Assets | 20,088,793 | 17,963,825 | 11.8 | | Total Liabilities | 16,064,427 | 14,181,780 | 13.3 | | Total Equity | 4,024,366 | 3,782,045 | 6.4 | | Debt-to-Asset Ratio | 19.1% | 22.0% | -2.9 percentage points | - Group borrowings are primarily secured by subsidiary guarantees, equity interests, and legal charges over land and buildings of non-banking and financial businesses[28](index=28&type=chunk) - Capital commitments primarily consist of **HK$270,000 thousand** for investment in associate Crown City United International Limited[29](index=29&type=chunk) [Financial Review](index=15&type=section&id=Financial%20Review) The Group's total assets increased by **11.8%**, primarily driven by a significant rise in amounts due from banks, while cash and deposits, trading portfolio investments, and financial assets at fair value through other comprehensive income all decreased; total liabilities increased by **13.3%**, mainly due to higher amounts due to customers, and gross profit from non-banking and financial businesses, EBITDA, selling and distribution expenses, and administrative expenses all declined year-on-year, with both share of profits from associates and net loss attributable to owners of the Company deteriorating - Total assets increased by **11.8%** to **HK$20,088,793 thousand**, primarily driven by a significant **115.9%** increase in amounts due from banks[31](index=31&type=chunk)[32](index=32&type=chunk) - Total liabilities increased by **13.3%** to **HK$16,064,427 thousand**, primarily attributable to an increase in amounts due to customers[47](index=47&type=chunk) Changes in Key Financial Metrics (For the Six Months Ended June 30, 2025) | Metric | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Gross Profit from Non-Banking & Financial Businesses | 125,263 | 224,068 | -44.1 | | EBITDA | 14,216 | 83,843 | -83.0 | | Selling and Distribution Expenses | 109,386 | 153,846 | -28.9 | | Administrative Expenses | 302,319 | 330,200 | -8.4 | | Share of Profits from Associates | 4,147 | 5,655 | -26.7 | | Net Loss Attributable to Owners of the Company | (42,045) | 7,024 (Profit) | N/A (Turned to loss) | [Outlook](index=24&type=section&id=Outlook) Looking ahead to 2025, China's economy outperformed expectations in the first half, with GDP growth forecasts revised upwards, primarily driven by exports and government fiscal measures; however, downside risks persist, including geopolitical conflicts potentially disrupting supply chains and raising energy prices, and fiscal deficits in developed economies possibly triggering financial market volatility, while the Group anticipates a gradual recovery in China's consumer market and Wealthy Land Bank will actively advance its Asia strategy, implementing diversified asset management approaches to mitigate the impact of declining USD interest rates - The International Monetary Fund raised China's 2025 GDP growth forecast to **4.8%**, primarily supported by export momentum and government fiscal measures[55](index=55&type=chunk) - Downside risks include geopolitical conflicts potentially disrupting global supply chains and fiscal deficits in developed economies possibly triggering international financial market volatility[55](index=55&type=chunk) - China's consumer market is expected to gradually recover, and Wealthy Land Bank will actively advance its Asia strategy, implementing diversified asset management approaches to mitigate the impact of declining USD interest rates[56](index=56&type=chunk) [Employees and Remuneration Policy](index=25&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the Group employed approximately **2,000** full-time staff globally, with remuneration determined fairly based on market conditions and individual performance, offering year-end double pay, medical insurance, retirement benefits, and bonuses; Hong Kong employees participate in the Mandatory Provident Fund Scheme, while employees of Mainland China subsidiaries participate in social security schemes - As of June 30, 2025, the Group employed approximately **2,000** full-time staff globally (approximately **1,800** in Hong Kong and Mainland China, and approximately **200** in Europe)[57](index=57&type=chunk) - Remuneration is determined fairly based on market conditions and individual performance, offering year-end double pay, medical insurance, retirement benefits, and bonuses[57](index=57&type=chunk) [Interim Dividend](index=25&type=section&id=Interim%20Dividend) The Board of Directors resolved not to declare an interim dividend for the six months ended June 30, 2025, consistent with the same period last year - The Board of Directors resolved not to declare an interim dividend for the six months ended June 30, 2025[58](index=58&type=chunk) [Directors' and Chief Executives' Interests and Short Positions in Shares and Underlying Shares](index=25&type=section&id=Directors'%20and%20Chief%20Executives'%20Interests%20and%20Short%20Positions%20in%20Shares%20and%20Underlying%20Shares) As of June 30, 2025, several directors and chief executives held long positions in the Company's shares, with Mr. Han Koung-Yung and his spouse Ms. Lam Suk Ying jointly holding **63.45%** of the Company's shares, Mr. Han Hiu-Fong holding **4.64%**, and Mr. Teguh Halim holding **0.14%** Directors' and Chief Executives' Long Positions in the Company's Shares (As of June 30, 2025) | Director Name | Total Interest (shares) | Shareholding Percentage | | :--- | :--- | :--- | | Han Koung-Yung | 2,761,137,515 | 63.45% | | Shi Tao | 100,000 | 0.00% | | Han Hiu-Fong | 201,750,000 | 4.64% | | Teguh Halim | 6,000,000 | 0.14% | - Mr. Han Koung-Yung and his spouse Ms. Lam Suk Ying are deemed to have interests in the same block of **2,761,137,515 shares**[60](index=60&type=chunk)[67](index=67&type=chunk) [Major Shareholders' Interests in Shares and Underlying Shares](index=27&type=section&id=Major%20Shareholders'%20Interests%20in%20Shares%20and%20Underlying%20Shares) As of June 30, 2025, Sureview International Limited and Morning Rich Limited were major shareholders, holding **31.96%** and **31.37%** of shares respectively; Mr. Han Koung-Yung and his spouse Ms. Lam Suk Ying were jointly deemed to own **63.45%** of shares, and Barclays PLC held a **8.83%** long position and a **0.23%** short position Major Shareholders' Interests in the Company's Shares (As of June 30, 2025) | Major Shareholder Name/Person | Nature of Interest | Number of Shares Held | Approximate Shareholding Percentage | | :--- | :--- | :--- | :--- | | Sureview International Limited | Beneficial owner | 1,391,037,515 | 31.96% | | Morning Rich Limited | Beneficial owner | 1,365,226,000 | 31.37% | | Han Koung-Yung | Corporate interest, beneficial owner and family interest | 2,761,137,515 | 63.45% | | Lam Suk Ying | Beneficial owner and family interest | 2,761,137,515 | 63.45% | | Barclays PLC | Corporate interest | 384,166,000 (L) | 8.83% (L) | | | | 9,862,000 (S) | 0.23% (S) | - Mr. Han Koung-Yung and his spouse Ms. Lam Suk Ying are deemed to have interests in the same block of **2,761,137,515 shares**[67](index=67&type=chunk) [Corporate Governance Code](index=29&type=section&id=Corporate%20Governance%20Code) For the six months ended June 30, 2025, the Company complied with the applicable code provisions of the Corporate Governance Code set out in Appendix C1 of the Listing Rules, except that the Chairman of the Board did not attend the Annual General Meeting due to other commitments, thus not fully complying with code provision F.2.2 - The Company complied with the Corporate Governance Code, but the Chairman of the Board did not attend the Annual General Meeting, thus not fully complying with code provision F.2.2[68](index=68&type=chunk) [Standard Securities Dealing Code for Directors](index=29&type=section&id=Standard%20Securities%20Dealing%20Code%20for%20Directors) For the six months ended June 30, 2025, the Company's directors consistently complied with the required standards set out in the Standard Code - Directors consistently complied with the Company's adopted Standard Securities Dealing Code during the reporting period[69](index=69&type=chunk) [Disclosure of Directors' Information under Rule 13.51B(1) of the Listing Rules](index=29&type=section&id=Disclosure%20of%20Directors'%20Information%20under%20Rule%2013.51B%281%29%20of%20the%20Listing%20Rules) Since the publication of the 2024 Annual Report, Mr. Kam Shing-Chor was appointed as an independent director of Happy City Holdings Limited, a NASDAQ-listed company - Mr. Kam Shing-Chor was appointed as an independent director of Happy City Holdings Limited, a NASDAQ-listed company[70](index=70&type=chunk) [Board Committees](index=30&type=section&id=Board%20Committees) The Group has an Audit Committee, Remuneration Committee, Nomination Committee, and Risk Management Committee, each fulfilling its responsibilities during the reporting period, including reviewing financial reports, determining remuneration policies, recommending director candidates, and reviewing risks - The Group has an Audit, Remuneration, Nomination, and Risk Management Committee to ensure effective corporate governance[71](index=71&type=chunk)[72](index=72&type=chunk)[73](index=73&type=chunk)[74](index=74&type=chunk) [Audit Committee](index=30&type=section&id=Audit%20Committee) The Audit Committee, comprising three independent non-executive directors, reviewed the unaudited financial statements and internal audit work during the reporting period, and discussed internal controls and financial reporting matters with external auditors, the Board, and senior management - The Audit Committee reviewed the unaudited financial statements and internal audit work, and discussed internal controls and financial reporting matters[71](index=71&type=chunk) [Remuneration Committee](index=30&type=section&id=Remuneration%20Committee) The Remuneration Committee, composed of three independent non-executive directors and two executive directors, determined the remuneration policy for executive directors, assessed their performance, and approved service contract terms during the reporting period, ensuring directors do not participate in determining their own remuneration - The Remuneration Committee determined executive directors' remuneration policy, assessed performance, approved service contracts, and ensured directors did not participate in determining their own remuneration[72](index=72&type=chunk) [Nomination Committee](index=31&type=section&id=Nomination%20Committee) The Nomination Committee, comprising two executive directors and three independent non-executive directors, considered factors such as diversity and industry experience, recommended Ms. Chan Lai Wah as an independent non-executive director, and assessed the independence of existing independent non-executive directors during the reporting period - The Nomination Committee considered factors such as diversity and industry experience, recommended Ms. Chan Lai Wah as an independent non-executive director, and assessed the independence of existing independent non-executive directors[73](index=73&type=chunk) [Risk Management Committee](index=31&type=section&id=Risk%20Management%20Committee) The Risk Management Committee, comprising three executive directors, reviewed liquidity risk, operational risk, interest rate risk, exchange rate risk, inventory risk, and other risks during the reporting period, and discussed measures to mitigate them - The Risk Management Committee reviewed liquidity, operational, interest rate, exchange rate, inventory, and other risks, and discussed mitigation measures[74](index=74&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=32&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company's%20Listed%20Securities) For the six months ended June 30, 2025, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities - During the reporting period, neither the Company nor its subsidiaries purchased, sold, or redeemed any listed securities[75](index=75&type=chunk) [Review of Financial Statements](index=32&type=section&id=Review%20of%20Financial%20Statements) The Audit Committee reviewed the Group's unaudited financial statements for the six months ended June 30, 2025, and confirmed their preparation in accordance with applicable accounting standards, fairly presenting the Group's financial position and performance - The Audit Committee confirmed that the unaudited financial statements fairly present the Group's financial position and performance and comply with applicable accounting standards[76](index=76&type=chunk) [Acknowledgement](index=32&type=section&id=Acknowledgement) Chairman Han Koung-Yung expressed sincere gratitude for the support from the Board of Directors, management team, employees, customers, suppliers, banks, professional advisors, business partners, and shareholders - Chairman Han Koung-Yung expressed gratitude for the support of all stakeholders[77](index=77&type=chunk) [Condensed Consolidated Statement of Comprehensive Income](index=33&type=section&id=Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) For the six months ended June 30, 2025, the Group's total revenue was **HK$523,692 thousand**, a **26.3%** year-on-year decrease, recording a loss of **HK$51,649 thousand**, with basic loss per share attributable to owners of the Company at **0.97 HK cents**, while other comprehensive income was **HK$291,685 thousand**, primarily impacted by exchange differences - For the six months ended June 30, 2025, the Group's total revenue was **HK$523,692 thousand**, a **26.3%** year-on-year decrease[79](index=79&type=chunk) - A loss of **HK$51,649 thousand** was recorded for the period, compared to a profit of **HK$3,708 thousand** in the same period last year, with basic loss per share attributable to owners of the Company at **0.97 HK cents**[79](index=79&type=chunk)[81](index=81&type=chunk) - Other comprehensive income for the period was **HK$291,685 thousand**, compared to a loss of **HK$346,821 thousand** in the same period last year, primarily impacted by exchange differences on translation of presentation currency[81](index=81&type=chunk) Condensed Consolidated Statement of Comprehensive Income Summary (For the Six Months Ended June 30, 2025) | Metric | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Net Interest Income from Banking Business | 127,667 | 138,236 | | Net Fee and Commission Income from Banking Business | 93,466 | 86,937 | | Trading Income from Banking Business | 20,941 | 13,147 | | Sales of Goods from Non-Banking & Financial Businesses | 271,529 | 459,822 | | Rental Income from Non-Banking & Financial Businesses | 8,943 | 11,992 | | **Total Revenue** | **523,692** | **710,313** | | (Loss)/Profit Before Income Tax | (42,847) | 13,192 | | (Loss)/Profit for the Period | (51,649) | 3,708 | | (Loss)/Profit Attributable to Owners of the Company | (42,045) | 7,024 | | Basic (Loss)/Earnings Per Share Attributable to Owners of the Company | (0.97 HK cents) | 0.16 HK cents | [Condensed Consolidated Statement of Financial Position](index=35&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's total assets were **HK$20,088,793 thousand**, an **11.8%** increase from December 31, 2024, total liabilities were **HK$16,064,427 thousand**, a **13.3%** increase primarily due to higher amounts due to customers, and total equity was **HK$4,024,366 thousand**, a **6.4%** increase - As of June 30, 2025, the Group's total assets were **HK$20,088,793 thousand**, an **11.8%** increase compared to December 31, 2024[82](index=82&type=chunk) - Total liabilities were **HK$16,064,427 thousand**, a **13.3%** increase, primarily due to higher amounts due to customers[84](index=84&type=chunk) - Total equity was **HK$4,024,366 thousand**, a **6.4%** increase[84](index=84&type=chunk) Condensed Consolidated Statement of Financial Position Summary (As of June 30, 2025) | Metric | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | **Assets** | | | | | Cash and Deposits | 1,140,529 | 3,782,130 | -69.8 | | Amounts Due from Customers | 2,942,445 | 2,659,182 | 10.7 | | Amounts Due from Banks | 6,145,570 | 2,945,270 | 108.7 | | Trading Portfolio Investments | 35,426 | 39,564 | -10.4 | | Other Financial Assets at Amortised Cost | 4,670,112 | 3,511,829 | 33.0 | | **Total Assets** | **20,088,793** | **17,963,825** | **11.8** | | **Liabilities** | | | | | Amounts Due to Customers | 14,274,136 | 12,333,170 | 15.7 | | Borrowings | 534,350 | 595,082 | -10.2 | | **Total Liabilities** | **16,064,427** | **14,181,780** | **13.3** | | **Total Equity** | **4,024,366** | **3,782,045** | **6.4** | [Condensed Consolidated Statement of Changes in Equity](index=37&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) For the six months ended June 30, 2025, total equity attributable to owners of the Company increased from **HK$3,614,423 thousand** at the beginning of the period to **HK$3,859,779 thousand**, primarily influenced by other comprehensive income from exchange differences on translation of presentation currency, while the loss attributable to owners of the Company for the period was **HK$42,045 thousand**, and non-controlling interests decreased - For the six months ended June 30, 2025, total equity attributable to owners of the Company increased from **HK$3,614,423 thousand** at the beginning of the period to **HK$3,859,779 thousand**[89](index=89&type=chunk) - The increase in equity was primarily influenced by other comprehensive income arising from exchange differences on translation of presentation currency[89](index=89&type=chunk) - Loss attributable to owners of the Company for the period was **HK$42,045 thousand**, and non-controlling interests decreased[89](index=89&type=chunk) Condensed Consolidated Statement of Changes in Equity Summary (For the Six Months Ended June 30, 2025) | Metric | January 1, 2025 (HK$ thousand) | June 30, 2025 (HK$ thousand) | | :--- | :--- | :--- | | Total Equity Attributable to Owners of the Company | 3,614,423 | 3,859,779 | | Non-Controlling Interests | 167,622 | 164,586 | | **Total Equity** | **3,782,045** | **4,024,366** | | Loss for the Period (Attributable to Owners of the Company) | - | (42,045) | | Exchange Differences on Translation of Presentation Currency (Attributable to Owners of the Company) | - | 296,942 | | Fair Value Changes of Financial Assets at Fair Value Through Other Comprehensive Income (Attributable to Owners of the Company) | - | (13,564) | [Condensed Consolidated Statement of Cash Flows](index=41&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash used in operating activities was **HK$2,321,974 thousand**, net cash used in investing activities was **HK$971,340 thousand**, and net cash used in financing activities was **HK$107,226 thousand**, resulting in a net decrease in cash and cash equivalents of **HK$3,400,540 thousand**, with cash and cash equivalents at period-end totaling **HK$1,068,604 thousand** - For the six months ended June 30, 2025, net cash used in operating activities was **HK$2,321,974 thousand**, net cash used in investing activities was **HK$971,340 thousand**, and net cash used in financing activities was **HK$107,226 thousand**[96](index=96&type=chunk) - Net decrease in cash and cash equivalents was **HK$3,400,540 thousand**, with cash and cash equivalents at period-end totaling **HK$1,068,604 thousand**[96](index=96&type=chunk) Condensed Consolidated Statement of Cash Flows Summary (For the Six Months Ended June 30, 2025) | Metric | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | (2,321,974) | (684,330) | | Net Cash Used in Investing Activities | (971,340) | (1,284,184) | | Net Cash Used in Financing Activities | (107,226) | (68,260) | | Net Decrease in Cash and Cash Equivalents | (3,400,540) | (2,036,774) | | Effect of Exchange Rate Changes | 774,450 | (361,155) | | Cash and Cash Equivalents at End of Period | 1,068,604 | 1,309,969 | [Notes to the Unaudited Condensed Consolidated Interim Financial Information](index=42&type=section&id=Notes%20to%20the%20Unaudited%20Condensed%20Consolidated%20Interim%20Financial%20Information) This section provides detailed notes to the unaudited condensed consolidated interim financial information, covering the Group's general information, basis of preparation, significant accounting policies, critical accounting judgments and key sources of estimation uncertainty, segment information, revenue breakdown, other gains, finance costs, income tax, dividends, earnings per share, trade and other receivables/payables, various investments, derivative instruments, inventories, property, plant and equipment, investment properties, intangible assets, goodwill, borrowings, capital commitments, related party transactions, and fair value measurement of financial instruments - This section provides detailed notes to the unaudited condensed consolidated interim financial information, covering the Group's general information, basis of preparation, significant accounting policies, critical accounting judgments and key sources of estimation uncertainty, segment information, revenue breakdown, other gains, finance costs, income tax, dividends, earnings per share, trade and other receivables/payables, various investments, derivative instruments, inventories, property, plant and equipment, investment properties, intangible assets, goodwill, borrowings, capital commitments, related party transactions, and fair value measurement of financial instruments[97](index=97&type=chunk)[98](index=98&type=chunk)[101](index=101&type=chunk)[102](index=102&type=chunk)[103](index=103&type=chunk)[114](index=114&type=chunk)[118](index=118&type=chunk)[123](index=123&type=chunk)[124](index=124&type=chunk)[125](index=125&type=chunk)[126](index=126&type=chunk)[128](index=128&type=chunk)[129](index=129&type=chunk)[130](index=130&type=chunk)[131](index=131&type=chunk)[134](index=134&type=chunk)[136](index=136&type=chunk)[138](index=138&type=chunk)[139](index=139&type=chunk)[140](index=140&type=chunk)[141](index=141&type=chunk)[142](index=142&type=chunk)[143](index=143&type=chunk)[144](index=144&type=chunk)[145](index=145&type=chunk)[147](index=147&type=chunk)[152](index=152&type=chunk)[154](index=154&type=chunk)[162](index=162&type=chunk)[165](index=165&type=chunk) [General Information](index=42&type=section&id=General%20Information) Citychamp Watch & Jewellery Group Limited is a limited company incorporated in the Cayman Islands, with its shares listed on the Hong Kong Stock Exchange; the Group's principal businesses include manufacturing and distribution of watches and accessories, property investment, and banking and financial services, with main operating locations in Hong Kong, Switzerland, the United Kingdom, Liechtenstein, and China - The Company is a limited company incorporated in the Cayman Islands, with its shares listed on the Hong Kong Stock Exchange[97](index=97&type=chunk) - The Group's principal businesses include manufacturing and distribution of watches and accessories, property investment, and banking and financial services[98](index=98&type=chunk) - Main operating locations are in Hong Kong, Switzerland, the United Kingdom, Liechtenstein, and China[100](index=100&type=chunk) [Basis of Preparation](index=43&type=section&id=Basis%20of%20Preparation) The unaudited condensed interim financial information is prepared in accordance with Hong Kong Accounting Standard 34 Interim Financial Reporting issued by the Hong Kong Institute of Certified Public Accountants and the applicable disclosure provisions of Appendix D2 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, and is presented in Hong Kong dollars - The financial information is prepared in accordance with Hong Kong Accounting Standard 34 issued by the Hong Kong Institute of Certified Public Accountants and Appendix D2 of the Listing Rules[101](index=101&type=chunk) - The financial information is presented in Hong Kong dollars, the Company's functional currency[101](index=101&type=chunk) [Summary of Significant Accounting Policies](index=43&type=section&id=Summary%20of%20Significant%20Accounting%20Policies) Except for the adoption of new or revised Hong Kong Financial Reporting Standards, the unaudited interim financial information is prepared in accordance with the accounting policies and methods of calculation used in the 2024 annual financial statements - The financial information is prepared in accordance with the accounting policies and methods of calculation used in the 2024 annual financial statements, without early adoption of newly issued but not yet effective Hong Kong Financial Reporting Standards[102](index=102&type=chunk) [Critical Accounting Judgements and Key Sources of Estimation Uncertainty](index=44&type=section&id=Critical%20Accounting%20Judgements%20and%20Key%20Sources%20of%20Estimation%20Uncertainty) The Group makes critical accounting judgments and estimates when preparing financial statements, primarily involving goodwill impairment, inventory provisions, depreciation and amortization, impairment of trade and other receivables, impairment assessment of non-financial assets, income tax, and valuation of defined benefit obligations; these judgments and estimates are based on past experience and relevant factors, and actual results may differ from estimates - Critical judgments and estimates involve goodwill impairment, inventory provisions, depreciation and amortization, impairment of trade receivables, impairment assessment of non-financial assets, income tax, and valuation of defined benefit obligations[103](index=103&type=chunk)[104](index=104&type=chunk)[105](index=105&type=chunk)[106](index=106&type=chunk)[107](index=107&type=chunk)[108](index=108&type=chunk)[109](index=109&type=chunk) - The valuation process requires management to make assumptions and judgments regarding future cash flows, discount rates, market risks, and asset-specific risks[103](index=103&type=chunk)[107](index=107&type=chunk) [Segment Information](index=49&type=section&id=Segment%20Information) The Group's chief operating decision maker has segmented its businesses into three operating categories: watches and accessories business, property investment, and banking and financial business; for the six months ended June 30, 2025, the watches and accessories business recorded a segment loss, property investment recorded a segment profit, and banking and financial business recorded a segment profit - The Group's businesses are divided into three operating segments: watches and accessories business, property investment, and banking and financial business[115](index=115&type=chunk) Segment Performance Summary (For the Six Months Ended June 30, 2025) | Business Segment | Total Revenue (HK$ thousand) | Segment Results (HK$ thousand) | | :--- | :--- | :--- | | Watches and Accessories Business | 271,529 | (53,479) (Loss) | | Property Investment | 8,943 | 7,692 (Profit) | | Banking and Financial Business | 243,220 | 53,609 (Profit) | | Unallocated Corporate Income and Expenses, Net | - | (33,034) | | Share of Profits from Associates | - | 4,147 | | Finance Costs for Non-Banking & Financial Businesses | - | (21,782) | | **(Loss)/Profit Before Income Tax** | **523,692** | **(42,847)** | [Revenue](index=52&type=section&id=Revenue) The Group's revenue primarily derives from banking and financial businesses (net interest income, net fee and commission income, net trading income) and non-banking and financial businesses (sales of goods, rental income); for the six months ended June 30, 2025, sales of goods from non-banking and financial businesses significantly decreased, while trading income from banking business notably increased - Net interest income from banking business was **HK$127,667 thousand**, a **7.6%** year-on-year decrease[119](index=119&type=chunk) - Net fee and commission income from banking business was **HK$93,466 thousand**, a **7.5%** year-on-year increase[120](index=120&type=chunk) - Trading income from banking business was **HK$20,941 thousand**, a **59.3%** year-on-year increase[120](index=120&type=chunk) - Sales of goods from non-banking and financial businesses were **HK$271,529 thousand**, a **41.0%** year-on-year decrease[122](index=122&type=chunk) - Rental income from non-banking and financial businesses was **HK$8,943 thousand**, a **25.5%** year-on-year decrease[122](index=122&type=chunk) [Other Recurring Income and Other Gains or Losses, Net](index=55&type=section&id=Other%20Recurring%20Income%20and%20Other%20Gains%20or%20Losses%2C%20Net) For the six months ended June 30, 2025, other recurring income and other gains or losses, net, amounted to **HK$18,010 thousand**, a significant **64.7%** year-on-year decrease, primarily comprising net exchange gains, net fair value change gains from trading portfolio investments, and fair value change gains from financial liabilities at fair value through profit or loss Other Recurring Income and Other Gains or Losses, Net (For the Six Months Ended June 30, 2025) | Metric | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Net Exchange Gains | 3,124 | 16,059 | -80.5 | | Net Fair Value Change Gains from Trading Portfolio Investments | 62 | 72 | -13.9 | | Fair Value Change Gains from Financial Liabilities at Fair Value Through Profit or Loss | 12,495 | 12,162 | 2.7 | | Dividend Income from Financial Assets at Fair Value Through Other Comprehensive Income | – | 7,934 | -100.0 | | **Total** | **18,010** | **51,061** | **-64.7** | [Finance Costs for Non-Banking and Financial Businesses](index=55&type=section&id=Finance%20Costs%20for%20Non-Banking%20and%20Financial%20Businesses) For the six months ended June 30, 2025, finance costs for non-banking and financial businesses were **HK$21,782 thousand**, a slight year-on-year decrease of **1.2%**, primarily comprising interest on lease liabilities and interest expenses on bank borrowings, bank overdrafts, and other borrowings Finance Costs for Non-Banking and Financial Businesses (For the Six Months Ended June 30, 2025) | Metric | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Interest on Lease Liabilities | 2,657 | 1,645 | 61.5 | | Interest Expenses on Bank Borrowings, Bank Overdrafts, and Other Borrowings | 19,125 | 20,400 | -6.3 | | **Total** | **21,782** | **22,045** | **-1.2** | [(Loss)/Profit Before Income Tax](index=56&type=section&id=%28Loss%29%2FProfit%20Before%20Income%20Tax) For the six months ended June 30, 2025, the Group recorded a loss before income tax of **HK$42,847 thousand**, compared to a profit of **HK$13,192 thousand** in the same period last year, primarily impacted by depreciation of property, plant and equipment and amortization of intangible assets (Loss)/Profit Before Income Tax Related Deductions (For the Six Months Ended June 30, 2025) | Metric | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Depreciation of Property, Plant and Equipment | 30,167 | 48,627 | -37.9 | | Amortization of Intangible Assets | 5,114 | 6,043 | -15.4 | [Income Tax Expense](index=56&type=section&id=Income%20Tax%20Expense) For the six months ended June 30, 2025, income tax expense was **HK$8,802 thousand**, a **7.2%** year-on-year decrease, primarily from current tax in China and Liechtenstein, with no Hong Kong profits tax provision made as no assessable profits arose in Hong Kong Income Tax Expense (For the Six Months Ended June 30, 2025) | Tax Source | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Current Tax - China | 1,571 | 1,447 | 8.6 | | Current Tax - Liechtenstein | 7,722 | 7,457 | 3.6 | | Current Tax - Switzerland | – | 332 | -100.0 | | Deferred Tax | (491) | 248 | N/A | | **Total** | **8,802** | **9,484** | **-7.2** | - No profits tax provision was made for Hong Kong, and Chinese subsidiaries are subject to income tax rates ranging from **15% to 25%**[126](index=126&type=chunk) [Dividends](index=57&type=section&id=Dividends) The Directors do not recommend the payment of an interim dividend for the period ended June 30, 2025, consistent with the same period last year - The Directors do not recommend the payment of an interim dividend for the period ended June 30, 2025[128](index=128&type=chunk) [(Loss)/Earnings Per Share](index=57&type=section&id=%28Loss%29%2FEarnings%20Per%20Share) For the six months ended June 30, 2025, basic and diluted loss per share attributable to owners of the Company was **0.97 HK cents**, compared to earnings per share of **0.16 HK cents** in the same period last year (Loss)/Earnings Per Share (For the Six Months Ended June 30, 2025) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | (Loss)/Profit Attributable to Owners of the Company (HK$ thousand) | (42,045) | 7,024 | | Weighted Average Number of Shares (thousand shares) | 4,351,889 | 4,351,889 | | Basic and Diluted (Loss)/Earnings Per Share | (0.97 HK cents) | 0.16 HK cents | [Amounts Due from Banks and Customers](index=58&type=section&id=Amounts%20Due%20from%20Banks%20and%20Customers) As of June 30, 2025, total amounts due from customers were **HK$2,942,445 thousand**, a **10.7%** year-on-year increase; total amounts due from banks were **HK$6,145,570 thousand**, a significant **108.7%** year-on-year increase, primarily driven by an increase in amounts due from banks in the ordinary course of business Amounts Due from Banks and Customers (As of June 30, 2025) | Metric | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Total Amounts Due from Customers | 2,942,445 | 2,659,182 | 10.7 | | Amounts Due from Banks in Ordinary Course of Business | 5,820,401 | 2,696,501 | 115.9 | | Total Amounts Due from Banks | 6,145,570 | 2,945,270 | 108.7 | [Trading Portfolio Investments](index=58&type=section&id=Trading%20Portfolio%20Investments) As of June 30, 2025, total trading portfolio investments were **HK$35,426 thousand**, a **10.4%** year-on-year decrease, primarily comprising listed equity instruments in Hong Kong and outside Hong Kong, unlisted debt instruments of financial institutions, and unlisted fund units; the Group aims to maintain a certain level of liquidity to meet capital expenditures Trading Portfolio Investments (As of June 30, 2025) | Metric | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Total Equity Instruments | 15,343 | 15,639 | -1.9 | | Unlisted Debt Instruments of Financial Institutions | 250 | 4,439 | -94.4 | | Unlisted Fund Units | 19,833 | 19,486 | 1.8 | | **Total Trading Portfolio Investments** | **35,426** | **39,564** | **-10.4** | - Trading portfolio investments aim to maintain liquidity to meet unforeseen capital expenditures and are used for listed equities to generate short-term returns[34](index=34&type=chunk) [Financial Assets at Fair Value Through Other Comprehensive Income](index=59&type=section&id=Financial%20Assets%20at%20Fair%20Value%20Through%20Other%20Comprehensive%20Income) As of June 30, 2025, total financial assets at fair value through other comprehensive income amounted to **HK$220,486 thousand**, a **5.7%** year-on-year decrease, primarily comprising listed equity instruments in Hong Kong (Minxin Holdings) and listed equity instruments outside Hong Kong (Crown City Grandway); during the reporting period, fair value decreased by **HK$13,564 thousand** Financial Assets at Fair Value Through Other Comprehensive Income (As of June 30, 2025) | Metric | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Listed Equity Instruments in Hong Kong | 185,115 | 202,745 | -8.7 | | Listed Equity Instruments Outside Hong Kong | 29,879 | 25,812 | 15.8 | | Unlisted Equity Investments | 5,492 | 5,336 | 2.9 | | **Total** | **220,486** | **233,893** | **-5.7** | - During the reporting period, fair value decreased by **HK$13,564 thousand**, which was recognized in other comprehensive income and the fair value through other comprehensive income reserve[134](index=134&type=chunk) [Derivative Financial Instruments](index=60&type=section&id=Derivative%20Financial%20Instruments) As of June 30, 2025, derivative financial assets were **HK$923 thousand**, a significant **97.2%** year-on-year decrease, while derivative financial liabilities were **HK$5,019 thousand**, a **101.0%** year-on-year increase, primarily comprising forward and option contracts for banking business, with risks managed through back-to-back transactions Derivative Financial Instruments (As of June 30, 2025) | Metric | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Derivative Financial Assets (Forward and Option Contracts) | 923 | 33,061 | -97.2 | | Derivative Financial Liabilities (Forward and Option Contracts) | 5,019 | 2,497 | 101.0 | - Derivative positions in banking business are managed through back-to-back transactions with external parties to ensure risks are at acceptable levels[136](index=136&type=chunk) [Trade Receivables](index=61&type=section&id=Trade%20Receivables) As of June 30, 2025, total trade receivables were **HK$368,224 thousand**, a slight year-on-year decrease of **1.0%**, with trade receivables from the watches, clocks, and watch accessories business amounting to **HK$358,135 thousand**, a **3.3%** year-on-year decrease Trade Receivables (As of June 30, 2025) | Metric | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Trade Receivables from Watches, Clocks, and Watch Accessories Business | 358,135 | 370,311 | -3.3 | | Trade Receivables from Financial Business – Cash Customers | 10,089 | 1,800 | 460.5 | | **Total** | **368,224** | **372,111** | **-1.0** | - Credit terms for watch business customers are generally one to six months, with credit limits in place[138](index=138&type=chunk) [Other Financial Assets at Amortised Cost](index=62&type=section&id=Other%20Financial%20Assets%20at%20Amortised%20Cost) As of June 30, 2025, total other financial assets at amortised cost amounted to **HK$4,670,112 thousand**, a significant **33.0%** year-on-year increase, primarily invested in listed debt instruments issued by governments and public sectors, financial institutions, and corporations, with a diversified portfolio and low credit risk Other Financial Assets at Amortised Cost (As of June 30, 2025) | Issuer | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Governments and Public Sectors | 3,715,433 | 2,519,712 | 47.5 | | Financial Institutions | 528,323 | 542,825 | -2.6 | | Corporations | 426,356 | 449,292 | -5.1 | | **Total** | **4,670,112** | **3,511,829** | **33.0** | - The investment portfolio comprises **60** listed debt instruments with varying maturities, geographical locations, segments, and currencies, ensuring diversification[39](index=39&type=chunk) [Inventories](index=62&type=section&id=Inventories) As of June 30, 2025, total inventories amounted to **HK$1,542,781 thousand**, a slight year-on-year increase of **1.9%**, with work-in-progress significantly increasing by **99.0%**, while raw materials and finished goods and merchandise decreased Inventories Composition (As of June 30, 2025) | Metric | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Raw Materials | 187,656 | 274,076 | -31.5 | | Work-in-Progress | 618,323 | 310,614 | 99.0 | | Finished Goods and Merchandise | 736,802 | 929,143 | -20.8 | | **Total** | **1,542,781** | **1,513,833** | **1.9** | [Property, Plant and Equipment](index=62&type=section&id=Property%2C%20Plant%20and%20Equipment) For the six months ended June 30, 2025, the Group purchased property, plant and equipment of **HK$16,067 thousand** and disposed of **HK$1,028 thousand**; at period-end, property, plant and equipment with a total carrying amount of **HK$236,129 thousand** were pledged to secure bank facilities - During the reporting period, property, plant and equipment of **HK$16,067 thousand** were purchased, and **HK$1,028 thousand** were disposed of[141](index=141&type=chunk) - Property, plant and equipment with a total carrying amount of **HK$236,129 thousand** were pledged to secure bank facilities[141](index=141&type=chunk) [Investment Properties](index=63&type=section&id=Investment%20Properties) As of June 30, 2025, investment properties with a total carrying amount of **HK$43,335 thousand** had not yet obtained relevant title certificates, but legal counsel confirmed the Group as the legal beneficial owner, and efforts are underway to obtain certificates from government authorities - Investment properties with a total carrying amount of **HK$43,335 thousand** had not yet obtained relevant title certificates, but the Group was confirmed as the legal beneficial owner[142](index=142&type=chunk) [Intangible Assets](index=63&type=section&id=Intangible%20Assets) As of June 30, 2025, the carrying amount of intangible assets was **HK$81,862 thousand**, primarily comprising brand names, computer software, technical know-how, and customer relationships; during the reporting period, amortization of intangible assets was **HK$5,114 thousand** Intangible Assets Carrying Amount (As of June 30, 2025) | Metric | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Brand Names | 49,190 | 42,819 | 14.9 | | Computer Software | 1,143 | 1,181 | -3.2 | | Technical Know-how | 26,011 | 26,899 | -3.3 | | Customer Relationships | 5,518 | 8,721 | -36.8 | | **Total** | **81,862** | **79,620** | **2.8** | - All intangible assets are attributable to the watches, clocks, and watch accessories business[143](index=143&type=chunk) [Goodwill](index=64&type=section&id=Goodwill) As of June 30, 2025, total goodwill amounted to **HK$1,061,886 thousand**, a **9.1%** year-on-year increase, with **HK$759,447 thousand** attributable to the watches, clocks, and watch accessories business, and **HK$302,439 thousand** attributable to the banking and financial business Goodwill (As of June 30, 2025) | Metric | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Balance at Period/Year-End | 1,061,886 | 973,406 | 9.1 | | Watches, Clocks, and Watch Accessories Business | 759,447 | 710,120 | 6.9 | | Banking and Financial Business | 302,439 | 263,286 | 14.9 | [Trade Payables](index=64&type=section&id=Trade%20Payables) As of June 30, 2025, total trade payables amounted to **HK$171,435 thousand**, a **9.8%** year-on-year decrease, with trade payables from the watches, clocks, and watch accessories business amounting to **HK$169,089 thousand**, a **10.0%** year-on-year decrease Trade Payables (As of June 30, 2025) | Metric | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Trade Payables from Watches, Clocks, and Watch Accessories Business | 169,089 | 187,775 | -10.0 | | Trade Payables from Financial Business – Cash Customers | 2,346 | 2,346 | 0.0 | | **Total** | **171,435** | **190,121** | **-9.8** | - Among trade payables for the watches, clocks, and watch accessories business, amounts overdue for more than **6 months** constituted the largest proportion[146](index=146&type=chunk) [Borrowings](index=65&type=section&id=Borrowings) As of June 30, 2025, total borrowings amounted to **HK$534,350 thousand**, a **10.2%** year-on-year decrease, primarily comprising bank overdrafts, bank borrowings, and other loans; borrowings are secured by various assets, including corporate guarantees, equity interests, directors' subordinated deeds, government guarantees, personal guarantees, and legal charges over property, plant and equipment Borrowings Composition (As of June 30, 2025) | Metric | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Bank Overdrafts | 25,512 | 29,519 | -13.6 | | Bank Borrowings | 413,573 | 470,628 | -12.1 | | Other Loans | 95,265 | 94,935 | 0.3 | | **Total** | **534,350** | **595,082** | **-10.2** | - Borrowings are secured by various assets, including corporate guarantees, equity interests, directors' subordinated deeds, government guarantees, personal guarantees, and legal charges over property, plant and equipment[148](index=148&type=chunk)[149](index=149&type=chunk) - As of the reporting date, the Directors are not aware of any breaches of covenants[150](index=150&type=chunk) [Capital Commitments](index=68&type=section&id=Capital%20Commitments) As of June 30, 2025, the Group's contracted but unprovided capital commitments amounted to **HK$270,000 thousand**, primarily for investment in associate Crown City United International Limited Capital Commitments (As of June 30, 2025) | Metric | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Capital Commitment for Investment in an Associate | 270,000 | 270,000 | 0.0 | - Capital commitments are primarily for investment in joint venture Crown City United International Limited, which is engaged in potential overseas equity investment business[153](index=153&type=chunk) [Related Party Transactions](index=69&type=section&id=Related%20Party%20Transactions) The Group engaged in various related party transactions, including purchases of goods from associate Jun Guang Industrial Limited, and outstanding balances with associates, related companies, a shareholder, and directors; the Group also provided financial guarantees to Jun Guang Related Party Transactions Summary (For the Six Months Ended June 30, 2025) | Transaction Type | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Purchases of Goods (from Associate Jun Guang) | 536 | 2,314 | -76.8 | Outstanding Balances with Related Parties (As of June 30, 2025) | Balance Type | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Amounts Due from an Associate | 40,016 | 43,380 | | Amounts Due to a Shareholder | 800 | – | | Amounts Due to Directors | 75,155 | 73,731 | | Amounts Due to a Related Company | 119,213 | 125,413 | - The Group provided a corporate guarantee for bank facilities up to **HK$55,000 thousand** to associate Jun Guang Industrial Limited[158](index=158&type=chunk) [Transactions with Non-Controlling Interests](index=71&type=section&id=Transactions%20with%20Non-Controlling%20Interests) During the reporting period, the Group engaged in several transactions with non-controlling interests, including a deemed disposal of Wealthy Land Group equity restructuring, resulting in an increase of **HK$3,096 thousand** in equity attributable to owners of the Company; and a deemed acquisition of additional Wealthy Land Group equity restructuring, resulting in a total decrease of **HK$1,574 thousand** in equity attributable to owners of the Company - A deemed disposal of Wealthy Land Group equity restructuring resulted in a **0.48%** decrease in the Company's effective equity interest in Wealthy Land Group and an increase of **HK$3,096 thousand** in equity attributable to owners of the Company[162](index=162&type=chunk) - A deemed acquisition of additional Wealthy Land Group equity restructuring resulted in a total **0.28%** increase in the Company's effective equity interest in Wealthy Land Group and a total decrease of **HK$1,574 thousand** in equity attributable to owners of the Company[163](index=163&type=chunk)[164](index=164&type=chunk) [Fair Value Measurement of Financial Instruments](index=72&type=section&id=Fair%20Value%20Measurement%20of%20Financial%20Instruments) The fair values of the Group's financial assets and liabilities are categorized into three levels (Level 1: quoted prices in active markets; Level 2: observable inputs; Level 3: unobservable inputs) according to Hong Kong Financial Reporting Standard 13; at the end of the reporting period, the Group held a significant amount of Level 2 financial assets and liabilities, as well as some Level 3 financial assets, with fair value measurement methods and valuation approaches consistent with previous reporting periods - Fair value measurement of financial instruments is categorized into three levels: Level 1 (quoted prices in active markets), Level 2 (observable inputs), and Level 3 (unobservable inputs)[168](index=168&type=chunk) Fair Value Hierarchy Classification of Financial Instruments (As of June 30, 2025) | Metric | Level 1 (HK$ thousand) | Level 2 (HK$ thousand) | Level 3 (HK$ thousand) | Total (HK$ thousand) | | :--- | :--- | :--- | :--

Financial Performance - Revenue for the six months ended June 30, 2025, was RMB 4,388,782 thousand, representing a 22.1% increase from RMB 3,593,506 thousand in the same period of 2024[9] - Gross profit decreased to RMB 378,040 thousand, down 12.1% from RMB 430,096 thousand year-over-year[9] - Operating profit for the period was RMB 132,723 thousand, a decline of 32.3% compared to RMB 195,912 thousand in the previous year[9] - Net profit attributable to equity shareholders was RMB 106,128 thousand, down 24.8% from RMB 140,937 thousand in the same period last year[9] - Basic and diluted earnings per share were both RMB 12.16, compared to RMB 15.97 in the prior year[9] - The company reported a total comprehensive income of RMB 104,714 thousand for the period, down from RMB 141,343 thousand in the previous year[10] - The company reported a net profit before tax of RMB 106,128,000, down from RMB 140,937,000 in the same period last year, indicating a decrease of 24.8%[33] - The net profit for the copper business was RMB 108.3 million, a decrease of 24.5% from RMB 143.4 million in the same period of 2024, primarily due to increased labor costs and depreciation expenses[71] - The net profit attributable to shareholders was RMB 106.1 million, a decrease of RMB 34.8 million from RMB 140.9 million in the same period last year[85] Assets and Liabilities - Total assets as of June 30, 2025, amounted to RMB 4,885,098 thousand, an increase from RMB 4,202,613 thousand at the end of 2024[12] - Current liabilities increased to RMB 3,615,121 thousand from RMB 3,007,210 thousand at the end of 2024, indicating a rise in short-term financial obligations[12] - Non-current assets increased to RMB 1,504,271 thousand from RMB 1,471,454 thousand, reflecting ongoing investments in property, plant, and equipment[12] - The total interest-bearing borrowings as of June 30, 2025, were RMB 1,822,692,000, up from RMB 1,366,167,000 as of December 31, 2024, reflecting a rise of approximately 33.4%[45] - Trade payables increased to RMB 1,548,719,000 as of June 30, 2025, from RMB 1,275,642,000 as of December 31, 2024, marking a growth of about 21.3%[48] - The company's financial liabilities measured at amortized cost totaled RMB 2,124,321,000 as of June 30, 2025, compared to RMB 1,968,398,000 as of December 31, 2024, reflecting an increase of about 7.9%[48] Cash Flow - For the six months ended June 30, 2025, the company reported a net cash outflow from operating activities of RMB 266,863 thousand, compared to RMB 302,843 thousand for the same period in 2024, representing a decrease of approximately 11.9%[18] - The company incurred a net cash outflow from investing activities of RMB 8,167 thousand, a significant improvement from RMB 77,202 thousand in the previous year, indicating a reduction of approximately 89.4%[18] - Financing activities generated a net cash inflow of RMB 294,561 thousand, down from RMB 662,247 thousand in the prior year, reflecting a decrease of approximately 55.6%[18] - The cash and cash equivalents at the end of the period stood at RMB 700,273 thousand, slightly down from RMB 700,931 thousand at the end of June 2024, a decrease of about 0.9%[18] Inventory and Receivables - As of June 30, 2025, the total inventory amounted to RMB 1,831,574,000, an increase from RMB 1,548,355,000 as of December 31, 2024, representing a growth of approximately 18.3%[36] - The net trade receivables, after deducting credit loss provisions, reached RMB 647,449,000 as of June 30, 2025, compared to RMB 601,348,000 as of December 31, 2024, indicating an increase of about 7.7%[37] - The aging analysis of trade receivables showed that receivables over three months amounted to RMB 86,375,000 as of June 30, 2025, compared to RMB 56,478,000 as of December 31, 2024, representing an increase of about 53.0%[40] Shareholder Information - No dividends were declared or distributed for the six months ended June 30, 2025, and the board has decided not to pay dividends for the interim period[50] - The total number of ordinary shares as of June 30, 2025, remains at 5,000,000,000, with a capital amount of 500,000 thousand HKD, unchanged from December 31, 2024[50] - The group’s major shareholder, Hu Changyuan, holds approximately 30.48% of the shares as of June 30, 2025[105] - Major shareholders include Dynamic Empire Holdings Limited with 30.48% (274,200,000 shares) and Come Fortune International Limited with 18.25% (164,200,000 shares) as of June 30, 2025[115] Strategic Initiatives - The company has completed a new five-year strategic plan and implemented a responsibility system for key tasks to enhance departmental efficiency[72] - The company has actively participated in government projects and received a bronze rating from EcoVadis for sustainable development, marking a breakthrough in overseas market access[72] - The company has focused on reducing energy costs through measures such as participating in electricity trading and optimizing high-energy-consuming motors[72] - The company has increased its market share in domestic substitution areas such as automotive, electronics, and semiconductors while enhancing overseas market research[72] Research and Development - Research and development expenses increased to RMB 123,198,000 from RMB 80,252,000, reflecting a growth of 53.5% year-over-year[31] - The effective tax rate for the six months ended June 30, 2025, was 16%, a decrease from 23% in the same period last year, primarily due to increased deductions for qualified R&D expenses[32] Market Conditions - The average copper price in the domestic non-ferrous market was RMB 77,800 per ton in the first half of 2025, reflecting a year-on-year increase of 4.2%[69] - The overall gross margin for the copper business decreased from 12.0% in 2024 to 8.6% in 2025, primarily due to reduced processing service income and increased raw material prices[77] Employment and Governance - The group employed a total of 1,868 employees as of June 30, 2025, an increase from 1,757 employees as of December 31, 2024[102] - The company has complied with the corporate governance code during the reporting period[119] - No changes in director information were reported since the last annual report disclosure[125] - The company has adopted the standard code of conduct, with all directors confirming compliance during the six months ended June 30, 2025[122]

[Corporate Information](index=3&type=section&id=Corporate%20Information) This section provides an overview of the company's key administrative and operational details [Board of Directors](index=3&type=section&id=DIRECTORS) The Board of Directors comprises executive and independent non-executive members - Executive directors include Guo Jiannan (Chairman), Zhu Duke Li (CEO), and Ms. Pan Chang[4](index=4&type=chunk) - Independent non-executive directors include Liang Shuxin, Hu Jianjun, and Chen Xuecheng[4](index=4&type=chunk) [Company Secretary and Authorized Representatives](index=3&type=section&id=COMPANY%20SECRETARY) Mr. Wen Xinhui serves as the Company Secretary, jointly acting as an authorized representative with Mr. Guo Jiannan - The Company Secretary is Mr. Wen Xinhui[4](index=4&type=chunk) - Authorized representatives are Mr. Guo Jiannan and Mr. Wen Xinhui[4](index=4&type=chunk) [Principal Bankers](index=3&type=section&id=PRINCIPAL%20BANKERS) The company maintains banking relationships with several major financial institutions - Principal bankers include China Everbright Bank Company Limited, CITIC Bank International Limited, Hang Seng Bank Limited, and China Construction Bank Corporation[4](index=4&type=chunk) [Independent Auditor and Legal Advisor](index=3&type=section&id=INDEPENDENT%20AUDITOR) The company's financial statements are audited by Tianjian Deyang Certified Public Accountants Limited, with legal counsel provided by Zhao Buyu • Ma Guoqiang Law Firm - The independent auditor is Tianjian Deyang Certified Public Accountants Limited[5](index=5&type=chunk) - The legal advisor is Zhao Buyu • Ma Guoqiang Law Firm[5](index=5&type=chunk) [Registered Office and Share Registrars](index=4&type=section&id=REGISTERED%20OFFICE) The company's registered office and principal share registrar are located in the Cayman Islands, with a branch share registrar in Hong Kong - The registered office is located at Cricket Square, Cayman Islands[7](index=7&type=chunk) - The principal share registrar in the Cayman Islands is Conyers Trust Company (Cayman) Limited[7](index=7&type=chunk) - The Hong Kong branch share registrar is Tricor Investor Services Limited[7](index=7&type=chunk) [Principal Place of Business and Website](index=4&type=section&id=PRINCIPAL%20PLACE%20OF%20BUSINESS%20IN%20THE%20PRC) The company's main operational hubs are in Yixing, Jiangsu, China, and Tsim Sha Tsui, Hong Kong, with its official website and stock code provided - The principal place of business in China is located at Baihe Industrial Park, Xinjie Street, Yixing City, Jiangsu Province[7](index=7&type=chunk) - The principal place of business in Hong Kong is located at Unit 1506, 15th Floor, Lippo Sun Plaza, 28 Canton Road, Tsim Sha Tsui, Kowloon, Hong Kong[8](index=8&type=chunk) - The company's website is www.paep.com.cn, and its stock code is 556[9](index=9&type=chunk) [Management Discussion and Analysis](index=5&type=section&id=Management%20Discussion%20and%20Analysis) This section provides an overview of the company's operational performance, financial results, and future outlook [Industry and Business Review](index=5&type=section&id=INDUSTRY%20AND%20BUSINESS%20REVIEW) In H1 2025, China's environmental industry deeply integrated green and digital transformation under high-quality development and new productive forces strategies, shifting to quality, efficiency, and tech innovation, with AI becoming a core competency; the Group has 4 projects totaling **RMB 82.3 million** expected to be completed by year-end - China's environmental industry is deeply integrating green and digital transformation under the strategies of "high-quality development" and "accelerating the development of new productive forces"[10](index=10&type=chunk)[13](index=13&type=chunk) - The deep integration of Artificial Intelligence (AI) technology with environmental engineering has become a core competency, and the Group will increase its investment in digital R&D[10](index=10&type=chunk)[13](index=13&type=chunk) Project Overview (As of June 30, 2025) | Metric | Value | | :--- | :--- | | Number of Projects on Hand | 4 | | Total Value of Uncompleted Works (incl. tax) | RMB 82.3 million | | Estimated Completion Time | Before end of 2025 | [Financial Review](index=6&type=section&id=FINANCIAL%20REVIEW) In H1 2025, total revenue decreased by **1.8%** to **RMB 113.3 million** due to slightly lower environmental product sales, gross profit fell **14.2%** to **RMB 15.3 million**, and profit attributable to owners decreased **26.2%** to **RMB 4.7 million**, with basic and diluted EPS at **RMB 0.48 cents** Key Financial Data for H1 2025 | Metric | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Total Revenue | 113,300 | 115,400 | -1.8% | | Gross Profit | 15,300 | 17,855 | -14.2% | | Gross Profit Margin | 13.5% | 15.5% | -2.0 percentage points | | Profit Attributable to Owners | 4,700 | 6,400 | -26.2% | | Basic and Diluted EPS | 0.48 cents | 0.66 cents | -27.27% | - The decrease in revenue was primarily due to a slight decline in sales from the environmental products business[16](index=16&type=chunk)[21](index=21&type=chunk) [Interim Dividend](index=6&type=section&id=INTERIM%20DIVIDEND) The Board does not recommend an interim dividend for the six months ended June 30, 2025, to conserve capital for business development - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025[18](index=18&type=chunk)[22](index=22&type=chunk) - This decision aims to conserve capital for the Group's business development[18](index=18&type=chunk)[22](index=22&type=chunk) [Prospects](index=6&type=section&id=PROSPECTS) The Group anticipates global economic shifts driven by AI, digitalization, and green transformation will create opportunities for industrial upgrading and business model innovation, supported by government policies, focusing on core business, AI empowerment, diversified expansion, and strategic alignment for sustained growth - The global economy continues to evolve, driven by artificial intelligence, digitalization, and green transformation, bringing new opportunities for industrial upgrading and business model innovation[19](index=19&type=chunk)[23](index=23&type=chunk) - Both the Central Government and the Hong Kong SAR Government support the deep application and industry implementation of "AI+", creating a favorable policy environment and market atmosphere for the Group's long-term development[19](index=19&type=chunk)[23](index=23&type=chunk) - The Group will focus on its core business, seizing opportunities enabled by artificial intelligence to promote the intelligent upgrading of the environmental protection industry[28](index=28&type=chunk) - The Group will expand its diversified layout, actively investing in and exploring new opportunities in the "AI+" industrial chain to enhance the diversity and sustainability of its revenue streams[28](index=28&type=chunk) - The Group will strengthen synergistic cooperation, working closely with professional partners to jointly create efficient and innovative solutions[28](index=28&type=chunk) - The Group will align with national planning, continuously monitoring and conforming to national long-term development directions, accurately grasping market trends and investment opportunities[28](index=28&type=chunk) [Liquidity and Financial Position](index=7&type=section&id=LIQUIDITY%20AND%20FINANCIAL%20RESOURCES) As of June 30, 2025, total assets were **RMB 1.3041 billion**, a **RMB 11.8 million** decrease from year-end 2024, total liabilities were **RMB 132.9 million**, a **RMB 18.1 million** decrease, total equity was **RMB 1.1711 billion**, and cash and cash equivalents were **RMB 1.2649 billion** Liquidity and Financial Position (As of June 30, 2025) | Metric | June 30, 2025 (RMB thousands) | Dec 31, 2024 (RMB thousands) | Change (RMB thousands) | | :--- | :--- | :--- | :--- | | Total Assets | 1,304,100 | 1,315,900 | -11,800 | | Total Liabilities | 132,900 | 151,000 | -18,100 | | Total Equity | 1,171,100 | 1,164,900 | +6,200 | | Equity to Liability Ratio | 6.5% | 6.4% | +0.1 percentage points | | Cash and Cash Equivalents | 1,264,900 | 1,256,900 | +8,000 | [Exposure to Fluctuations in Foreign Exchange Rates](index=8&type=section&id=EXPOSURE%20TO%20FLUCTUATIONS%20IN%20FOREIGN%20EXCHANGE%20RATES) Most of the Group's transactions and liabilities are denominated in RMB and HKD, with no foreign currency bank liabilities or hedging derivatives as of June 30, 2025, and management continues to monitor foreign exchange risks prudently - The vast majority of the Group's operating transactions and liabilities are denominated in RMB and HKD[30](index=30&type=chunk)[34](index=34&type=chunk) - As of June 30, 2025, the Group had no foreign currency bank liabilities, foreign exchange contracts, interest or currency swaps, or other financial derivative instruments for hedging purposes[30](index=30&type=chunk)[34](index=34&type=chunk)

2025 中期報告 目錄 | 2 | 公司資料 | | --- | --- | | 4 | 財務摘要 | | 5 | 管理層討論與分析 | | 29 | 企業管治及其他資料 | | 50 | 簡明綜合財務報表審閱報告 | | 52 | 簡 明綜合損益及其他全面收益表 | | 54 | 簡 明綜合財務狀況表 | | 56 | 簡 明綜合權益變動表 | | 58 | 簡 明綜合現金流量表 | | 61 | 簡 明綜合財務 報 表 附 註 | | 89 | 釋 義 | | 公司資料 | | --- | （截至二零二五年六月三十日） | 中文名稱： | 杭州啓明醫療器械股份有限公司 | | --- | --- | | 英文名稱： | Venus Medtech (Hangzhou) Inc. | | 法定代表： | 林浩昇先生 | | 董事長： | 胡定旭先生 | | 註冊資本： | 人民幣441,011,443元 | | 中國總部： | | | 註冊及辦事處地址： | 中國杭州濱江區江陵路88號2幢3樓311室 | | 公司網址： | http://www.venusmedtech.com/ | | 電郵： | i ...

[Section I Definitions](index=3&type=section&id=Section%20I%20Definitions) This section provides definitions of common terms used in the report to ensure a clear understanding of professional terminology and company-related entities [Definitions of Common Terms](index=3&type=section&id=Definitions%20of%20Common%20Terms) This section provides definitions of common terms used in the report to ensure readers have a clear understanding of professional terminology and company-related entities - Defines "the Company/Company/Nanjing Panda" as Nanjing Panda Electronics Company Limited, and "the Group" as Nanjing Panda Electronics Company Limited and its subsidiaries[3](index=3&type=chunk) - Lists major related parties such as "Panda Group Company," "CEC Panda," "China Electronics" and their respective groups[3](index=3&type=chunk) - Explains common industry abbreviations such as AFC (Automatic Fare Collection System), ACC (Automated Clearing Center), EMS (Electronic Manufacturing Services)[4](index=4&type=chunk) [Section II Company Profile and Key Financial Indicators](index=5&type=section&id=Section%20II%20Company%20Profile%20and%20Key%20Financial%20Indicators) This section outlines the company's basic information and key financial performance, highlighting a narrowed net loss despite decreased operating revenue [I. Company Information](index=5&type=section&id=I.%20Company%20Information) This section outlines the basic information of Nanjing Panda Electronics Company Limited, including its Chinese abbreviation, English abbreviation, and legal representative - Company's Chinese abbreviation: Nanjing Panda, English abbreviation: NPEC[5](index=5&type=chunk) - Company's legal representative: Hu Huichun (Director, General Manager)[5](index=5&type=chunk) [II. Contact Person and Information](index=5&type=section&id=II.%20Contact%20Person%20and%20Information) This section provides contact information for the company's Board Secretary and Securities Affairs Representative, including name, address, telephone, fax, and email - Both the Board Secretary and Securities Affairs Representative are Wang Dongdong, with the contact address at No. 7 Jingtian Road, Nanjing, People's Republic of China[5](index=5&type=chunk) - Contact number is **(86 25) 84801144**, email is dms@panda.cn[5](index=5&type=chunk) [III. Brief Introduction to Changes in Basic Information](index=5&type=section&id=III.%20Brief%20Introduction%20to%20Changes%20in%20Basic%20Information) This section briefly introduces the historical changes in the company's registered address; currently, both the registered and office addresses are No. 7 Jingtian Road, Nanjing, Jiangsu Province, People's Republic of China - The company's registered address is currently No. 7 Jingtian Road, Nanjing, Jiangsu Province, People's Republic of China[6](index=6&type=chunk) - The company's registered address was changed to Room 1701, No. 301 Zhongshan East Road, Xuanwu District, Nanjing in 2019, and changed back to No. 7 Jingtian Road in 2021[6](index=6&type=chunk) [IV. Brief Introduction to Changes in Information Disclosure and Document Storage Locations](index=5&type=section&id=IV.%20Brief%20Introduction%20to%20Changes%20in%20Information%20Disclosure%20and%20Document%20Storage%20Locations) This section specifies the company's selected newspapers for information disclosure, the internet website for semi-annual reports, and the location for storing the company's semi-annual reports - The company's selected newspapers for information disclosure are "Shanghai Securities News" and "China Securities Journal"[7](index=7&type=chunk) - The international internet websites for semi-annual reports and information disclosure are the Shanghai Stock Exchange website (http://www.sse.com.cn) and the Hong Kong Stock Exchange website (http://www.hkex.com.hk)[7](index=7&type=chunk) - The company's semi-annual report storage location is the Board Secretary's Office at No. 7 Jingtian Road, Nanjing, People's Republic of China[7](index=7&type=chunk) [V. Company Stock Information](index=5&type=section&id=V.%20Company%20Stock%20Information) This section lists the types of shares, listing exchanges, stock abbreviations, and stock codes for the company's shares listed on domestic and overseas exchanges - The company's A-shares are listed on the Shanghai Stock Exchange, stock abbreviation "Nanjing Panda", stock code **600775**[8](index=8&type=chunk) - The company's H-shares are listed on the Hong Kong Stock Exchange, stock abbreviation "Nanjing Panda", stock code **00553**[8](index=8&type=chunk) [VI. Other Relevant Information](index=5&type=section&id=VI.%20Other%20Relevant%20Information) This section states that the company has no other relevant information to disclose - Not applicable[9](index=9&type=chunk) [VII. Key Accounting Data and Financial Indicators (Prepared in accordance with PRC Enterprise Accounting Standards)](index=6&type=section&id=VII.%20Key%20Accounting%20Data%20and%20Financial%20Indicators%20%28Prepared%20in%20accordance%20with%20PRC%20Enterprise%20Accounting%20Standards%29) This section presents the company's key accounting data and financial indicators for the first half of 2025, explaining the main reasons for significant changes, including a 16.61% year-on-year decrease in operating revenue but a narrowed net loss attributable to shareholders 2025 H1 Key Accounting Data (Consolidated Statement) | Indicator | Current Period (Jan–Jun 2025) | Prior Year Period (Jan–Jun 2024) | | :--- | :--- | :--- | | Operating Revenue | 1,042,651,233.72 Yuan | 1,250,346,512.09 Yuan | | Total Profit | -6,768,483.31 Yuan | -36,574,327.28 Yuan | | Net Profit Attributable to Shareholders of Listed Company | -45,584,145.10 Yuan | -68,198,110.51 Yuan | | Net Cash Flow from Operating Activities | -144,931,633.58 Yuan | -133,262,704.33 Yuan | | Net Assets Attributable to Shareholders of Listed Company (Period-end) | 3,068,265,743.01 Yuan | 3,114,294,647.60 Yuan | | Total Assets (Period-end) | 5,086,054,275.35 Yuan | 5,320,807,895.66 Yuan | 2025 H1 Key Financial Indicators | Indicator | Current Period (Jan–Jun 2025) | Prior Year Period (Jan–Jun 2024) | Change from Prior Year Period (%) | | :--- | :--- | :--- | :--- | | Basic Earnings Per Share (Yuan/share) | -0.0499 | -0.0746 | Not applicable | | Diluted Earnings Per Share (Yuan/share) | -0.0499 | -0.0746 | Not applicable | | Basic Earnings Per Share After Deducting Non-recurring Gains and Losses (Yuan/share) | -0.0673 | -0.0838 | Not applicable | | Weighted Average Return on Net Assets (%) | -1.47 | -2.09 | Increased by 0.62 percentage points | | Weighted Average Return on Net Assets After Deducting Non-recurring Gains and Losses (%) | -1.99 | -2.34 | Increased by 0.35 percentage points | - Operating revenue decreased year-on-year primarily due to reduced export orders, fewer completed acceptance and settlement of industrial internet and intelligent manufacturing projects in the first half, and intense competition in the power supply and communication business[11](index=11&type=chunk) - Net profit attributable to shareholders of the listed company increased year-on-year (loss narrowed) mainly due to increased investment income from the associate LG Panda, and disposal gains from the liquidation of Beijing Soai Putian Mobile Communication Co., Ltd., an associate of the company[11](index=11&type=chunk) - Net cash flow from operating activities decreased year-on-year, mainly due to reduced cash received from sales of goods and provision of services[11](index=11&type=chunk) [VIII. Differences in Accounting Data under Domestic and Overseas Accounting Standards](index=6&type=section&id=VIII.%20Differences%20in%20Accounting%20Data%20under%20Domestic%20and%20Overseas%20Accounting%20Standards) This section states that there are no differences in the company's accounting data under domestic and overseas accounting standards - Not applicable[12](index=12&type=chunk) [IX. Non-recurring Gains and Losses Items and Amounts](index=7&type=section&id=IX.%20Non-recurring%20Gains%20and%20Losses%20Items%20and%20Amounts) This section lists the company's non-recurring gains and losses items and their amounts for the first half of 2025, totaling **RMB 15,934,319.80** 2025 H1 Non-recurring Gains and Losses Items and Amounts | Non-recurring Gains and Losses Item | Amount (RMB Yuan) | | :--- | :--- | | Gains or losses from disposal of non-current assets, including the portion of impairment provisions reversed | 11,035,112.38 | | Government grants recognized in current profit or loss (excluding those closely related to normal business operations and continuously affecting the company) | 1,386,789.44 | | Gains or losses from changes in fair value of financial assets and financial liabilities held by non-financial enterprises, and gains or losses from disposal of financial assets and financial liabilities, excluding effective hedging activities related to normal business operations | 5,038,173.73 | | Reversal of impairment provisions for receivables for which individual impairment tests were performed | 115,104.48 | | Other non-operating income and expenses apart from the above items | 124,243.43 | | Less: Income tax impact | 820,318.97 | | Impact on minority interests (after tax) | 944,784.69 | | Total | 15,934,319.80 | [X. Companies with Equity Incentive or Employee Stock Ownership Plans May Choose to Disclose Net Profit After Deducting Share-based Payment Impact](index=7&type=section&id=X.%20Companies%20with%20Equity%20Incentive%20or%20Employee%20Stock%20Ownership%20Plans%20May%20Choose%20to%20Disclose%20Net%20Profit%20After%20Deducting%20Share-based%20Payment%20Impact) This section states that the company has no equity incentive or employee stock ownership plans, so the relevant disclosure is not applicable - Not applicable[15](index=15&type=chunk) [XI. Others](index=7&type=section&id=XI.%20Others) This section states that the company has no other matters requiring disclosure - Not applicable[15](index=15&type=chunk) [Section III Management Discussion and Analysis](index=8&type=section&id=Section%20III%20Management%20Discussion%20and%20Analysis) This section provides an in-depth analysis of the company's industry, business operations, core competencies, and financial performance, along with potential risks and other significant disclosures [I. Overview of the Company's Industry and Main Business During the Reporting Period](index=8&type=section&id=I.%20Overview%20of%20the%20Company%27s%20Industry%20and%20Main%20Business%20During%20the%20Reporting%20Period) This section describes the steady growth of the electronic information manufacturing industry in the first half of 2025, along with the positive impact of national "AI+" and digitalization policies, and the company's focus on smart transportation, industrial internet, and green service-oriented electronic manufacturing - The company operates in the computer, communication, and other electronic equipment manufacturing industry, with the added value of electronic information manufacturing above designated size increasing by **11.1%** year-on-year, and operating revenue reaching **RMB 6.49 trillion**, a year-on-year increase of **9.4%** in the first half of 2025[16](index=16&type=chunk) - The "Digital China Construction 2025 Action Plan" deploys "AI+" actions, promoting the development of new-generation intelligent terminals and intelligent manufacturing equipment such as intelligent connected new energy vehicles, AI mobile phones and computers, and intelligent robots[17](index=17&type=chunk) - The company's three main businesses are smart transportation and safe cities, industrial internet and intelligent manufacturing, and green service-oriented electronic manufacturing[19](index=19&type=chunk) - The company promotes an all-staff marketing model and adheres to independent innovation, upholding a "response + leadership" dual-driven R&D model[20](index=20&type=chunk)[21](index=21&type=chunk) [(I) Industry Overview](index=8&type=section&id=%28I%29%20Industry%20Overview) This section states that the electronic information manufacturing industry, where the company operates, showed steady growth, optimized structure, and innovation-driven characteristics in the first half of 2025, becoming a crucial force supporting industrial economic recovery and high-quality development - The company operates in the computer, communication, and other electronic equipment manufacturing industry[16](index=16&type=chunk) - In the first half of 2025, the added value of electronic information manufacturing above designated size increased by **11.1%** year-on-year, with cumulative export delivery value increasing by **3.3%** year-on-year[16](index=16&type=chunk) - Operating revenue reached **RMB 6.49 trillion**, a year-on-year increase of **9.4%**; total profit reached **RMB 216.2 billion**, a year-on-year increase of **11.9%**[16](index=16&type=chunk) [(II) Impact of New Policies on the Industry](index=8&type=section&id=%28II%29%20Impact%20of%20New%20Policies%20on%20the%20Industry) This section elaborates on new policies such as the "Digital China Construction 2025 Action Plan," "Light Industry Digital Transformation Implementation Plan," and "Electronic Information Manufacturing Digital Transformation Implementation Plan" issued by the National Data Bureau and the Ministry of Industry and Information Technology, which bring development opportunities for the company's industry, especially in AI and digital transformation - The "Digital China Construction 2025 Action Plan" deploys "AI+" actions, deeply exploring AI application scenarios, and developing new-generation intelligent terminals and intelligent manufacturing equipment such as intelligent connected new energy vehicles, AI mobile phones and computers, and intelligent robots[17](index=17&type=chunk) - The "Light Industry Digital Transformation Implementation Plan" proposes that by 2030, light industry enterprises above designated size will generally implement digital transformation, forming a "smart transformation, digital upgrade, and network connection" digital ecosystem[17](index=17&type=chunk) - The "Electronic Information Manufacturing Digital Transformation Implementation Plan" proposes that by 2027, the numerical control rate of key processes in electronic information manufacturing enterprises above designated size will exceed **85%**, and by 2030, a relatively complete data basic institutional system will be established[18](index=18&type=chunk) [(III) Main Business and Products](index=9&type=section&id=%28III%29%20Main%20Business%20and%20Products) This section details the company's three main businesses: smart transportation and safe cities, industrial internet and intelligent manufacturing, and green service-oriented electronic manufacturing, listing key development directions and products for each business area - The company's three main businesses are smart transportation and safe cities, industrial internet and intelligent manufacturing, and green service-oriented electronic manufacturing[19](index=19&type=chunk) - In the smart transportation and safe cities sector, the focus is on developing smart transportation and safe city business clusters, expanding into smart urban rail, safe city communication, digital parks, high-tech electronics, and energy storage power supply businesses[19](index=19&type=chunk) - In the industrial internet and intelligent manufacturing sector, the company provides smart factory system solutions, including smart industrial control equipment, smart robots, smart logistics equipment, and other new intelligent manufacturing specialized and general equipment[19](index=19&type=chunk) - In the green service-oriented electronic manufacturing sector, the company provides complete manufacturing services for domestic and international brand manufacturers, including R&D, process design, procurement management, production, manufacturing, and warehousing logistics for 3C products, new display module components, core components for white goods, automotive electronics, communication equipment, and other electronic products[19](index=19&type=chunk) [(IV) Operating Model](index=9&type=section&id=%28IV%29%20Operating%20Model) This section describes the company's management, R&D, production and service provision, and marketing models, emphasizing its active integration into China Electronics' development strategy, commitment to independent innovation, market and customer-oriented approach, and promotion of all-staff marketing - Management Model: Adapting to the times, flexibly responding to new situations and tasks, actively integrating into China Electronics' development strategy, implementing industrial integration and restructuring, and continuously deepening enterprise transformation and upgrading[20](index=20&type=chunk) - R&D Model: Always adhering to independent innovation, upholding a "response + leadership" dual-driven R&D model, and implementing a "three-tight" R&D strategy (closely linked to national strategic direction, closely following technological development trends, and closely aligned with market demand)[20](index=20&type=chunk) - Production and Service Provision Model: Market and customer-oriented, organizing R&D and production activities, committed to providing products, overall system solutions, and delivery of system engineering projects[20](index=20&type=chunk) - Marketing Model: Promoting an all-staff marketing model, encouraging all employees to participate in the company's marketing activities through training and incentive mechanisms to expand brand influence and performance[21](index=21&type=chunk) [(V) Market Position and Key Achievements](index=10&type=section&id=%28V%29%20Market%20Position%20and%20Key%20Achievements) This section introduces the company's market position and key achievements in the first half of 2025 across smart transportation and safe cities, industrial internet and intelligent manufacturing, and green manufacturing services, including multiple successful bids and business breakthroughs - In smart transportation business, deeply involved in intelligent construction of urban rail transit in multiple regions, successfully bidding for multiple urban rail transit AFC system and communication system equipment procurement projects[22](index=22&type=chunk) - In digital park business, providing intelligent overall solutions for medical, transportation, industrial park, and other scenarios, successfully bidding for **30** intelligent engineering projects and related projects[22](index=22&type=chunk) - In industrial internet and intelligent manufacturing, achieving business breakthroughs in flexible assembly, smart warehousing, and electronic glass, successfully signing **16** key projects, with both the number of successful bids and contract value increasing[23](index=23&type=chunk) - In green manufacturing services, intensifying efforts to expand external markets, with automotive electronics business closely following multiple leading clients, and white goods business deepening cooperation with strategic clients[23](index=23&type=chunk) [II. Discussion and Analysis of Operating Performance](index=10&type=section&id=II.%20Discussion%20and%20Analysis%20of%20Operating%20Performance) In the first half of 2025, the company adhered to its core annual goals, focused on quality improvement and efficiency, deepened reform, but due to the macroeconomic situation, export orders decreased, industrial internet and intelligent manufacturing businesses were in a transition period, and power supply and communication businesses faced intense competition, leading to a year-on-year decrease in operating revenue and a net loss attributable to shareholders of the listed company of **RMB 45.5841 million** - The company adhered to its core annual goals, firmly guarding the two lifelines of development and safety, focusing on quality improvement and efficiency, deepening reform, and strictly controlling risks[24](index=24&type=chunk) - Affected by the macroeconomic situation, the company's export orders decreased, and revenue declined year-on-year[24](index=24&type=chunk) - The industrial internet and intelligent manufacturing businesses are in a transitional adjustment period, with fewer completed acceptance and settlement of related businesses in the first half, impacting operating revenue and net profit attributable to the parent company's owners[24](index=24&type=chunk) 2025 H1 Operating Performance | Indicator | Amount (RMB) | | :--- | :--- | | Operating Revenue | 104,265.12 Ten Thousand Yuan | | Total Loss | 676.85 Ten Thousand Yuan | | Net Loss Attributable to Shareholders of Listed Company | 4,558.41 Ten Thousand Yuan | [III. Analysis of Core Competencies During the Reporting Period](index=11&type=section&id=III.%20Analysis%20of%20Core%20Competencies%20During%20the%20Reporting%20Period) The company continuously strengthened its core competencies during the reporting period, mainly in five aspects: construction of a scientific and technological innovation system, effectiveness of R&D investment, breakthroughs in intellectual property, sound quality control system, and deep integration of industry-university-research, ensuring its leading position and market competitiveness - The company continuously improved its scientific and technological innovation system; **8** major subsidiaries maintained high-tech enterprise certification, and **4** subsidiaries were recognized and maintained as provincial "specialized, refined, unique, and new" enterprises[25](index=25&type=chunk) - The company emphasized R&D investment, with cumulative R&D investment exceeding **RMB 100 million** in the first half of 2025; **3** scientific research achievements passed the scientific and technological achievement appraisal organized by the Jiangsu Provincial Science and Technology Innovation Association, with project results all at a leading domestic level[25](index=25&type=chunk) - The company's intellectual property and standardization work continuously made breakthroughs, with **20** patent applications accepted (including **20** invention patents) and **17** patents granted (including **10** invention patents) in the first half of 2025[25](index=25&type=chunk) - The company improved its quality control system, maintaining ISO9001, ISO14001, ISO45001, ATF16949, and other certifications, and obtained ISO13485 medical device quality management system certification and ISO50001 energy management system certification in the first half of 2025[25](index=25&type=chunk) - The company actively promoted deep integration of industry-university-research, carrying out joint R&D projects with Nanjing University, Southeast University, and other universities, and was approved to establish the Nanjing New Generation Autonomous and Controllable Intelligent Communication Network Innovation Consortium in cooperation with Nanjing University of Posts and Telecommunications[25](index=25&type=chunk) [IV. Key Operating Performance During the Reporting Period](index=12&type=section&id=IV.%20Key%20Operating%20Performance%20During%20the%20Reporting%20Period) This section details the company's financial statement item changes, asset and liability status, and investment activities in the first half of 2025, showing decreased operating revenue and costs, significantly increased net cash flow from investment activities, and stable asset-liability structure with some asset reductions - Operating revenue decreased by **16.61%** year-on-year, and operating costs decreased by **18.97%** year-on-year, mainly due to reduced export orders, fewer completed acceptance and settlement of industrial internet and intelligent manufacturing projects, and intense market competition in power supply and communication businesses[27](index=27&type=chunk) - Net cash flow from investment activities was **RMB 267,138,820.66**, a year-on-year increase of **131.42%**, mainly due to the recovery of investment from the liquidation of an associate and a year-on-year decrease in the purchase of structured deposits[27](index=27&type=chunk)[29](index=29&type=chunk) - Period-end notes receivable decreased by **75.47%** year-on-year, mainly due to a decrease in un-derecognized bank acceptance bills and commercial acceptance bills at period-end[31](index=31&type=chunk) - Period-end short-term borrowings decreased by **100%** year-on-year, mainly due to the maturity of un-derecognized bank acceptance bills discounted at the end of the previous year and un-derecognized accounts receivable factored[31](index=31&type=chunk) - The company plans to publicly list and transfer its **27%** equity in associate Nanjing Ericsson Panda Communications Co., Ltd. through the Shanghai United Assets and Equity Exchange, with a reserve price of **RMB 284.6067 million**[46](index=46&type=chunk) [(I) Analysis of Main Business](index=12&type=section&id=%28I%29%20Analysis%20of%20Main%20Business) This section analyzes the changes in the company's main accounting items and their reasons in the first half of 2025, showing that both operating revenue and costs decreased due to changes in market environment and business settlement progress, while net cash flow from investment activities significantly increased 2025 H1 Financial Statement Items Change Analysis | Item | Current Period Amount (Yuan) | Prior Year Period Amount (Yuan) | Change Ratio (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 1,042,651,233.72 | 1,250,346,512.09 | -16.61 | | Operating Cost | 881,242,988.19 | 1,087,598,858.49 | -18.97 | | Selling Expenses | 20,891,732.02 | 23,290,719.32 | -10.30 | | Administrative Expenses | 114,512,870.03 | 119,385,910.50 | -4.08 | | Financial Expenses | -4,527,196.16 | -7,823,878.43 | Not applicable | | R&D Expenses | 99,991,645.72 | 109,855,250.05 | -8.98 | | Net Cash Flow from Operating Activities | -144,931,633.58 | -133,262,704.33 | Not applicable | | Net Cash Flow from Investment Activities | 267,138,820.66 | 115,436,141.90 | 131.42 | | Net Cash Flow from Financing Activities | -8,729,418.84 | 30,138,541.71 | -128.96 | | Gains from Changes in Fair Value | 4,412,265.15 | -1,481,275.69 | Not applicable | | Credit Impairment Losses | -6,698,654.55 | -4,246,517.83 | Not applicable | | Asset Impairment Losses | 1,194,286.77 | -21,313.55 | Not applicable | | Gains from Asset Disposal | 2,152.11 | 8,373.69 | -74.30 | | Non-operating Income | 207,324.72 | 471,339.02 | -56.01 | | Non-operating Expenses | 82,289.21 | 174,101.74 | -52.73 | - Changes in operating revenue and operating costs were mainly due to reduced export orders, fewer completed acceptance and settlement of industrial internet and intelligent manufacturing projects in the first half, and intense competition in the power supply and communication business[27](index=27&type=chunk) - Changes in net cash flow from investment activities were mainly due to the recovery of investment from the liquidation of an associate and a year-on-year decrease in the purchase of structured deposits[29](index=29&type=chunk) [(II) Explanation of Significant Profit Changes Caused by Non-Main Business](index=13&type=section&id=%28II%29%20Explanation%20of%20Significant%20Profit%20Changes%20Caused%20by%20Non-Main%20Business) This section states that the company's non-main business did not cause significant changes in profit - Not applicable[28](index=28&type=chunk) [(III) Analysis of Assets and Liabilities](index=14&type=section&id=%28III%29%20Analysis%20of%20Assets%20and%20Liabilities) This section analyzes the changes in the company's asset and liability balances at the end of the first half of 2025 compared to the end of the previous year, showing a significant decrease in notes receivable and short-term borrowings, an increase in prepayments and construction in progress, and also discloses the restricted status of major assets 2025 H1 Assets and Liabilities Change Analysis | Item Name | Current Period End Amount (Yuan) | % of Total Assets | Prior Year End Amount (Yuan) | % of Total Assets | Change Ratio (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Monetary Funds | 833,316,771.39 | 16.38 | 757,643,131.44 | 14.24 | 9.99 | | Notes Receivable | 24,153,385.62 | 0.47 | 98,477,213.49 | 1.85 | -75.47 | | Prepayments | 38,086,465.61 | 0.75 | 27,410,781.74 | 0.52 | 38.95 | | Construction in Progress | 2,377,750.38 | 0.05 | 1,506,311.96 | 0.03 | 57.85 | | Long-term Equity Investments | 389,991,205.34 | 7.67 | 492,989,930.44 | 9.27 | -20.89 | | Short-term Borrowings | 0 | 0 | 42,326,327.88 | 0.80 | -100.00 | | Notes Payable | 33,484,535.53 | 0.66 | 110,289,431.12 | 2.07 | -69.64 | | Employee Benefits Payable | 30,760,321.04 | 0.60 | 59,341,157.51 | 1.12 | -48.16 | - Changes in notes receivable were mainly due to a decrease in un-derecognized bank acceptance bills and commercial acceptance bills at period-end[31](index=31&type=chunk) - Changes in prepayments were mainly due to increased prepayments for materials for urban rail transit projects[31](index=31&type=chunk) - Restricted status of major assets at period-end: monetary funds **RMB 51,805,272.91**, notes receivable **RMB 10,648,755.38**, accounts receivable **RMB 8,276,712.67**, totaling **RMB 70,730,740.96**[33](index=33&type=chunk) [(IV) Analysis of Investment Status](index=15&type=section&id=%28IV%29%20Analysis%20of%20Investment%20Status) This section analyzes the company's external equity investments and financial assets measured at fair value in the first half of 2025, showing that the company prudently advanced fixed asset and related project investments, with significant amounts of purchases and redemptions of trading financial assets and notes receivable financing - In the first half of 2025, the company strictly followed the annual capital expenditure budget and actual operating conditions, prudently, standardly, and orderly advanced fixed asset and related project investments[34](index=34&type=chunk) 2025 H1 Changes in Financial Assets Measured at Fair Value | Asset Category | Beginning Balance (Yuan) | Fair Value Change Gains/Losses for Current Period (Yuan) | Purchases for Current Period (Yuan) | Sales/Redemptions for Current Period (Yuan) | Ending Balance (Yuan) | | :--- | :--- | :--- | :--- | :--- | :--- | | Trading Financial Assets | 491,594,758.95 | 4,412,265.15 | 595,000,000.00 | 684,004,590.04 | 407,002,434.06 | | Notes Receivable Financing | 30,350,019.89 | | 106,754,068.59 | 102,813,589.79 | 34,290,498.69 | | Total | 521,944,778.84 | 4,412,265.15 | 701,754,068.59 | 786,818,179.83 | 441,292,932.75 | - No significant equity investments, non-equity investments, securities investments, private equity fund investments, or derivative investments during the reporting period[38](index=38&type=chunk)[39](index=39&type=chunk)[40](index=40&type=chunk) [(V) Significant Asset and Equity Disposals](index=16&type=section&id=%28V%29%20Significant%20Asset%20and%20Equity%20Disposals) This section states that the company had no significant asset and equity disposals during the reporting period - Not applicable[41](index=41&type=chunk) [(VI) Analysis of Major Holding and Associate Companies](index=16&type=section&id=%28VI%29%20Analysis%20of%20Major%20Holding%20and%20Associate%20Companies) This section analyzes the company's major holding subsidiaries and associate companies with an impact of **10%** or more on the company's net profit, focusing on the operating performance and equity disposal progress of Nanjing LG Panda Appliances Co., Ltd. and Nanjing Ericsson Panda Communications Co., Ltd Major Subsidiaries and Associate Companies with >10% Impact on Net Profit (2025 H1) | Company Name | Company Type | Main Business | Registered Capital (Ten Thousand Yuan) | Total Assets (Ten Thousand Yuan) | Net Assets (Ten Thousand Yuan) | Operating Revenue (Ten Thousand Yuan) | Operating Profit (Ten Thousand Yuan) | Net Profit (Ten Thousand Yuan) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Electronic Equipment Co. | Subsidiary | Production and sales of automatic transmission equipment and industrial robots | 19,000.00 | 31,605.96 | -16,650.73 | 4,256.25 | -4,734.71 | -4,719.92 | | Information Industry Co. | Subsidiary | Production and sales of urban rail transit AFC and ACC systems, equipment, building intelligence and system integration | 21,681.4228 | 157,611.12 | 43,762.53 | 40,916.16 | 2,267.95 | 2,210.52 | | Electronic Manufacturing Co. | Subsidiary | EMS services | USD2,000 | 73,106.32 | 25,268.29 | 26,081.73 | -962.29 | -967.52 | | Shenzhen Jinghua | Subsidiary | R&D, production and sales of communication equipment, digital products | 11,507.00 | 58,749.45 | 48,151.57 | 24,543.33 | 5,447.93 | 4,294.56 | | LG Panda | Associate | Development and production of fully automatic washing machines and related components | USD3,570 | 347,682.18 | 105,632.16 | 357,762.03 | 25,805.74 | 19,371.23 | - Nanjing LG Panda Appliances Co., Ltd.'s operating revenue in the first half of 2025 was **RMB 3,577.6203 million**, a year-on-year increase of **2.71%**; net profit was **RMB 193.7123 million**, a year-on-year increase of **0.85%**, mainly due to increased export orders for washing machines. The company recognized investment income of **RMB 48.3774 million**[43](index=43&type=chunk) - The operating period of Nanjing Ericsson Panda Communications Co., Ltd. (ENC) was extended to December 14, 2025. The company plans to publicly list and transfer its **27%** equity in ENC through the Shanghai United Assets and Equity Exchange, with a reserve price of **RMB 284.6067 million**[44](index=44&type=chunk)[46](index=46&type=chunk) [(VII) Information on Structured Entities Controlled by the Company](index=18&type=section&id=%28VII%29%20Information%20on%20Structured%20Entities%20Controlled%20by%20the%20Company) This section states that the company has no structured entities under its control - Not applicable[48](index=48&type=chunk) [V. Other Disclosure Matters](index=18&type=section&id=V.%20Other%20Disclosure%20Matters) This section discloses potential technical, market, and litigation risks faced by the company and outlines corresponding countermeasures, along with other important information such as liquidity, share purchases/sales, pre-emptive rights, D&O liability insurance, and compliance with corporate governance codes - The company faces technical risk, market risk, and litigation risk, and has formulated corresponding countermeasures, such as strengthening scientific and technological innovation, optimizing business structure, and enhancing litigation management[49](index=49&type=chunk)[48](index=48&type=chunk) - As of June 30, 2025, the company's consolidated asset-liability ratio was **33.74%**, current ratio was **2.17**, quick ratio was **1.80**, and short-term bank and other borrowings were **RMB 0**[50](index=50&type=chunk) - During the reporting period, the Group did not purchase, sell, or redeem any shares of the Company[50](index=50&type=chunk) - The company has adopted and complied with the Corporate Governance Code contained in Appendix 14 and the Model Code for Securities Transactions by Directors of Listed Issuers contained in Appendix 10 of the Listing Rules[51](index=51&type=chunk)[52](index=52&type=chunk) - The Audit Committee has reviewed the company's unaudited financial report for the six months ended June 30, 2025, and believes that the financial report complies with applicable accounting standards and legal requirements and has made appropriate disclosures[52](index=52&type=chunk) [(I) Potential Risks](index=18&type=section&id=%28I%29%20Potential%20Risks) This section details the technical, market, and litigation risks the company may face and proposes corresponding countermeasures - Technical Risk: Accelerated technological iteration poses a significant challenge to the company's ability to build industrial innovation capabilities and core competitiveness. The company will focus on the construction of the Digital Intelligence Industry Research Institute to enhance scientific and technological innovation capabilities and the economic benefits transformation of R&D achievements[49](index=49&type=chunk)[48](index=48&type=chunk) - Market Risk: Affected by economic cycles, policy changes, and market demand changes, market competition in the company's main businesses is intensifying. The company will optimize its business structure, strive to find new growth points, and actively explore overseas business markets[48](index=48&type=chunk) - Litigation Risk: In recent years, the company's litigation disputes have generally shown an increasing trend. The company will invest more effort in pre-litigation risk prevention, in-litigation case handling, and post-litigation review and summary analysis to fully avoid and recover losses through judicial procedures[48](index=48&type=chunk) [(II) Other Disclosure Matters](index=19&type=section&id=%28II%29%20Other%20Disclosure%20Matters) This section discloses the company's liquidity status, share purchase/sale situation, pre-emptive rights, D&O liability insurance, and compliance with corporate governance codes - As of June 30, 2025, the company's consolidated asset-liability ratio was **33.74%**, current ratio was **2.17**, quick ratio was **1.80**, bank deposits and cash were **RMB 833 million**, and short-term bank and other borrowings were **RMB 0**[50](index=50&type=chunk) - During the reporting period, the Group did not purchase, sell, or redeem any shares of the Company[50](index=50&type=chunk) - The company has adopted and complied with the Corporate Governance Code contained in Appendix 14 and the Model Code for Securities Transactions by Directors of Listed Issuers contained in Appendix 10 of the Listing Rules[51](index=51&type=chunk)[52](index=52&type=chunk) - The Audit Committee has reviewed the company's unaudited financial report for the six months ended June 30, 2025, and believes that the financial report complies with applicable accounting standards and legal requirements and has made appropriate disclosures[52](index=52&type=chunk) [Section IV Corporate Governance, Environment, and Society](index=21&type=section&id=Section%20IV%20Corporate%20Governance%2C%20Environment%2C%20and%20Society) This section covers changes in directors, supervisors, and senior management, profit distribution plans, equity incentive plans, environmental information disclosure, and efforts in poverty alleviation and rural revitalization [I. Changes in Directors, Supervisors, and Senior Management](index=21&type=section&id=I.%20Changes%20in%20Directors%2C%20Supervisors%2C%20and%20Senior%20Management) This section states that there were no changes in the company's directors, supervisors, and senior management during the reporting period - During the reporting period, there were no changes in the company's directors, supervisors, and senior management[53](index=53&type=chunk) [II. Profit Distribution or Capital Reserve Conversion Plan](index=21&type=section&id=II.%20Profit%20Distribution%20or%20Capital%20Reserve%20Conversion%20Plan) This section states that the company will not carry out profit distribution or capital reserve conversion into share capital for the first half of 2025 - The company will not carry out profit distribution or capital reserve conversion into share capital for the semi-annual period[2](index=2&type=chunk) - According to the 2024 annual profit distribution plan, the company's net loss attributable to shareholders of the listed company for 2024 was **RMB 188,854,556.25**, therefore no profit distribution, capital reserve conversion into share capital, or other forms of distribution will be made[54](index=54&type=chunk) [III. Information on the Company's Equity Incentive Plans, Employee Stock Ownership Plans, or Other Employee Incentive Measures and Their Impact](index=21&type=section&id=III.%20Information%20on%20the%20Company%27s%20Equity%20Incentive%20Plans%2C%20Employee%20Stock%20Ownership%20Plans%2C%20or%20Other%20Employee%20Incentive%20Measures%20and%20Their%20Impact) This section states that the company has no equity incentive plans, employee stock ownership plans, or other employee incentive measures - Not applicable[55](index=55&type=chunk) [IV. Environmental Information of Listed Companies and Their Major Subsidiaries Included in the List of Enterprises Required to Disclose Environmental Information by Law](index=21&type=section&id=IV.%20Environmental%20Information%20of%20Listed%20Companies%20and%20Their%20Major%20Subsidiaries%20Included%20in%20the%20List%20of%20Enterprises%20Required%20to%20Disclose%20Environmental%20Information%20by%20Law) This section discloses that the company's subsidiary, Nanjing Huage Electric Plastic Co., Ltd., has been included in the list of enterprises required to disclose environmental information by law, and provides an inquiry index - The number of enterprises included in the list of enterprises required to disclose environmental information by law is **1**[55](index=55&type=chunk) - The enterprise name is Nanjing Huage Electric Plastic Co., Ltd., and the inquiry index for its environmental information disclosure report has been provided[55](index=55&type=chunk) [V. Specific Information on Consolidating and Expanding Poverty Alleviation Achievements, Rural Revitalization, and Other Work](index=21&type=section&id=V.%20Specific%20Information%20on%20Consolidating%20and%20Expanding%20Poverty%20Alleviation%20Achievements%2C%20Rural%20Revitalization%2C%20and%20Other%20Work) This section states that the company actively participated in the "Central Enterprise Consumer Assistance Spring Action" launched by China Electronics Corporation to help consolidate and expand poverty alleviation achievements and continuously promote rural revitalization - The company actively participated in the "Central Enterprise Consumer Assistance Spring Action" launched by China Electronics Corporation[56](index=56&type=chunk) - Purchased and assisted in selling agricultural products through the State-owned Assets Supervision and Administration Commission of the State Council's "Central Enterprise Consumer Assistance" e-commerce platform and "CEC Consumer Assistance Mall"[56](index=56&type=chunk) - In this assistance action, the company purchased **1,983** units of agricultural products and other items, with a total assistance fund of **RMB 149,600**[56](index=56&type=chunk) [Section V Significant Matters](index=22&type=section&id=Section%20V%20Significant%20Matters) This section covers the fulfillment of commitments, absence of non-operating fund occupation and irregular guarantees, unaudited semi-annual report, significant litigation, penalties, integrity status, major related party transactions, significant contracts, and other important disclosures [I. Fulfillment of Commitments](index=22&type=section&id=I.%20Fulfillment%20of%20Commitments) This section details the fulfillment of commitments by the company's actual controller, shareholders, related parties, and the company itself during or continuing into the reporting period, with China Electronics, Panda Group Company, and CEC Panda all strictly fulfilling their commitments - China Electronics committed to avoiding horizontal competition, not directly or indirectly engaging in businesses that constitute horizontal competition with the listed company's main business, and has strictly fulfilled this[57](index=57&type=chunk) - China Electronics committed to regulating and avoiding related party transactions, minimizing or reducing related party transactions, and for unavoidable related party transactions, signing agreements and performing approval procedures in accordance with the law, and has strictly fulfilled this[57](index=57&type=chunk) - China Electronics committed to ensuring the company's independence in personnel, asset integrity, financial independence, and independent operating capability, and has strictly fulfilled this[57](index=57&type=chunk) - Panda Group Company and CEC Panda both committed to avoiding horizontal competition, not engaging in any form of business identical or similar to Nanjing Panda and its subsidiaries, and have strictly fulfilled this[58](index=58&type=chunk)[59](index=59&type=chunk) - China Electronics committed not to reduce its holdings of shares in its controlled listed companies during periods of abnormal stock market fluctuations, and to actively explore measures such as share repurchases and increased holdings to strengthen its holdings in listed companies whose stock prices seriously deviate from their value, and has strictly fulfilled this[59](index=59&type=chunk) [II. Non-operating Fund Occupation by Controlling Shareholder and Other Related Parties During the Reporting Period](index=25&type=section&id=II.%20Non-operating%20Fund%20Occupation%20by%20Controlling%20Shareholder%20and%20Other%20Related%20Parties%20During%20the%20Reporting%20Period) This section states that there was no non-operating fund occupation by the controlling shareholder and other related parties during the reporting period - Not applicable[62](index=62&type=chunk) [III. Irregular Guarantees](index=25&type=section&id=III.%20Irregular%20Guarantees) This section states that there were no irregular guarantees during the reporting period - Not applicable[62](index=62&type=chunk) [IV. Semi-Annual Report Audit Status](index=25&type=section&id=IV.%20Semi-Annual%20Report%20Audit%20Status) This section states that the company's semi-annual report was unaudited - Not applicable[62](index=62&type=chunk) [V. Changes and Handling of Matters Involving Non-Standard Audit Opinions in the Previous Year's Annual Report](index=25&type=section&id=V.%20Changes%20and%20Handling%20of%20Matters%20Involving%20Non-Standard%20Audit%20Opinions%20in%20the%20Previous%20Year%27s%20Annual%20Report) This section states that there were no changes or handling of matters involving non-standard audit opinions in the previous year's annual report - Not applicable[62](index=62&type=chunk) [VI. Bankruptcy and Reorganization Related Matters](index=25&type=section&id=VI.%20Bankruptcy%20and%20Reorganization%20Related%20Matters) This section states that the company has no bankruptcy and reorganization related matters - Not applicable[62](index=62&type=chunk) [VII. Significant Litigation and Arbitration](index=25&type=section&id=VII.%20Significant%20Litigation%20and%20Arbitration) This section discloses the significant litigation and arbitration cases involving the company during the reporting period, including a sales contract dispute where the company won the second instance judgment, and a construction project contract dispute where the second instance upheld the original judgment but the opposing party entered substantive consolidated reorganization - Nanjing Panda Electronic Equipment Co., Ltd. v. Jiangsu Jinmao Robot Technology Co., Ltd. sales contract dispute, with the original claim involving **RMB 22.5932 million** and the counterclaim **RMB 123 million**. The second instance judgment rejected Jinmao Company's claims and ordered it to pay Electronic Equipment Co. **RMB 22,593,150** in goods payment and overdue payment liquidated damages. Electronic Equipment Co. has applied for compulsory enforcement[61](index=61&type=chunk)[63](index=63&type=chunk) - Nanjing Panda Information Industry Co., Ltd. v. Xuzhou Suning Real Estate Co., Ltd. construction project contract dispute, involving **RMB 6.6112 million** in principal and interest. The second instance upheld the first instance judgment, ordering Xuzhou Suning Real Estate to pay project fees and overdue liquidated damages, and Panda Information to have priority claim for construction project payments. Xuzhou Suning Real Estate Co., Ltd. and **38** other companies entered substantive consolidated reorganization, and Panda Information has participated in the creditors' meeting and confirmed its claims[64](index=64&type=chunk) - Suzhou Fuqiang Technology Co., Ltd. v. Nanjing Panda Electronic Equipment Co., Ltd. sales contract dispute, involving **RMB 8.6882 million** in principal and interest. The second instance judgment upheld the original judgment, and Electronic Equipment Co. has fulfilled its payment obligations as per the judgment. The application for retrial was rejected[65](index=65&type=chunk) [VIII. Penalties and Rectification of Listed Company, Its Directors, Supervisors, Senior Management, Controlling Shareholder, Actual Controller, and Acquirer](index=28&type=section&id=VIII.%20Penalties%20and%20Rectification%20of%20Listed%20Company%2C%20Its%20Directors%2C%20Supervisors%2C%20Senior%20Management%2C%20Controlling%20Shareholder%2C%20Actual%20Controller%2C%20and%20Acquirer) This section discloses that the company received a warning letter from the Jiangsu Regulatory Bureau of the China Securities Regulatory Commission during the reporting period - In January 2025, the company received a warning letter (Letter No.: [2025]6) from the Jiangsu Regulatory Bureau of the China Securities Regulatory Commission addressed to the company and relevant personnel[66](index=66&type=chunk) [IX. Explanation of the Integrity Status of the Company, Its Controlling Shareholder, and Actual Controller During the Reporting Period](index=28&type=section&id=IX.%20Explanation%20of%20the%20Integrity%20Status%20of%20the%20Company%2C%20Its%20Controlling%20Shareholder%2C%20and%20Actual%20Controller%20During%20the%20Reporting%20Period) This section states that the integrity status of the company, its controlling shareholder, and actual controller was good during the reporting period - Not applicable[66](index=66&type=chunk) [X. Significant Related Party Transactions](index=29&type=section&id=X.%20Significant%20Related%20Party%20Transactions) This section details the company's significant related party transactions during the reporting period, including the renewal of a financial services agreement with China Electronics Finance Co., Ltd., and daily purchases and sales of goods, provision and acceptance of labor, related party creditor-debtor transactions, and financial services with various related parties - The company renewed its financial services cooperation agreement with China Electronics Finance Co., Ltd., stipulating that the Group's fund settlement balance limit at the finance company is **RMB 700 million**, and the comprehensive credit limit is **RMB 800 million**[68](index=68&type=chunk) - As of June 30, 2025, the Group's fund settlement balance at the finance company was **RMB 635.8165 million**, and the comprehensive credit limit provided by the finance company to the Group was **RMB 13.2560 million**[70](index=70&type=chunk) 2025 H1 Amount of Related Party Transactions Related to Daily Operations | Related Party Transaction Type | Related Party Transaction Amount (Yuan) | | :--- | :--- | | Purchase of Goods | 5,518,705.72 | | Acceptance of Services | 3,505,948.80 | | Sale of Goods | 60,000,000.00 (Estimated) | | Provision of Services | 24,268,033.94 | | Lease Out Assets | 195,136.82 | | Lease In Assets | 3,247.71 | | Trademark License Usage | 25,491.51 | | Total | 94,665,242.39 | 2025 H1 Related Party Creditor-Debtor Transactions | Related Party | Related Party Relationship | Period-end Balance (Yuan) | | :--- | :--- | :--- | | Nanjing CEC Panda Information Industry Group Co., Ltd. | Indirect Controlling Shareholder | 9,790,000.00 | | Panda Electronics Group Co., Ltd. | Controlling Shareholder | 3,785,242.53 | | Nanjing Panda Handa Technology Co., Ltd. | Shareholder's Subsidiary | 1,191,994.58 | | Total | | 14,843,159.11 | 2025 H1 Deposit Business with Finance Company | Related Party | Related Party Relationship | Period-end Balance (Yuan) | | :--- | :--- | :--- | | China Electronics Finance Co., Ltd. | Shareholder's Subsidiary | 635,816,467.82 | [XI. Significant Contracts and Their Fulfillment](index=33&type=section&id=XI.%20Significant%20Contracts%20and%20Their%20Fulfillment) This section discloses the fulfillment of the company's significant contracts during the reporting period, including housing lease matters and guarantees provided for subsidiaries, specifically for Nanjing Huage Electric Plastic Co., Ltd. and Nanjing Panda Communication Technology Co., Ltd 2025 H1 Housing Lease Information | Lessor Name | Lessee Name | Leased Asset Information | Lease Income (Ten Thousand Yuan) | | :--- | :--- | :--- | :--- | | Nanjing Panda Electronics Company Limited | Nanjing Gusheng Enterprise Management Co., Ltd. | Floors 1-4, 14-17 of Panda Building, No. 301 Zhongshan East Road, Nanjing, and ancillary equipment and facilities, area 27,502.165 square meters | 1,103.03 | - The company provided a maximum guarantee for Nanjing Huage Electric Plastic Co., Ltd.'s **RMB 20 million** bank comprehensive credit line at China Electronics Finance Co., Ltd. As of June 30, 2025, the utilized credit line was **RMB 13,256,016.07**[90](index=90&type=chunk)[167](index=167&type=chunk) - The company provided a maximum joint and several liability guarantee for Nanjing Panda Communication Technology Co., Ltd.'s **RMB 10 million** bank comprehensive credit line at Nanjing Bank Co., Ltd. Chengdong Branch. As of June 30, 2025, the utilized credit line was **RMB 191,926.72**[90](index=90&type=chunk)[168](index=168&type=chunk) 2025 H1 Company's Total Guarantee Amount | Indicator | Amount (RMB Yuan) | | :--- | :--- | | Total Guarantees Provided to Subsidiaries During Reporting Period | 30,000,000.00 | | Total Guarantees Provided to Subsidiaries at Period-end (B) | 13,447,942.79 | | Total Guarantees (A+B) | 13,447,942.79 | | Total Guarantees as % of Company's Net Assets | 0.44 | [XII. Explanation of Progress in Use of Raised Funds](index=35&type=section&id=XII.%20Explanation%20of%20Progress%20in%20Use%20of%20Raised%20Funds) This section states that the company has no progress in the use of raised funds to disclose - Not applicable[94](index=94&type=chunk) [XIII. Explanation of Other Significant Matters](index=35&type=section&id=XIII.%20Explanation%20of%20Other%20Significant%20Matters) This section states that the company has no other significant matters to disclose - Not applicable[94](index=94&type=chunk) [Section VI Share Changes and Shareholder Information](index=36&type=section&id=Section%20VI%20Share%20Changes%20and%20Shareholder%20Information) This section details the company's share capital, shareholder structure, top ten shareholders, controlling shareholder's share pledge status, and interests of major shareholders in the company's shares [I. Share Change Information](index=36&type=section&id=I.%20Share%20Change%20Information) This section reports that the company's total share capital and share structure did not change in the first half of 2025 - During the reporting period, the company's total share capital and share structure did not change[95](index=95&type=chunk) - Changes in restricted shares are not applicable[96](index=96&type=chunk) [II. Shareholder Information](index=36&type=section&id=II.%20Shareholder%20Information) This section details the company's total number of shareholders, top ten shareholders' shareholdings, and the controlling shareholder's share pledge status as of the end of the reporting period, with Hong Kong Securities Clearing Company Nominees Limited as the largest shareholder and Panda Electronics Group Co., Ltd. holding **23.05%** of shares, with part of its shares pledged - As of the end of the reporting period, the total number of ordinary shareholders was **87,485** (of which: **87,460** A-share shareholders, **25** H-share shareholders)[96](index=96&type=chunk) Top Ten Shareholders' Shareholdings (Period-end) | Shareholder Name (Full Name) | Period-end Shareholding (Shares) | Percentage (%) | Share Status | Pledged Amount (Shares) | Shareholder Nature | | :--- | :--- | :--- | :--- | :--- | :--- | | Hong Kong Securities Clearing Company Nominees Limited | 243,023,035 | 26.59 | Unknown | | Overseas Legal Person | | Panda Electronics Group Co., Ltd. | 210,661,444 | 23.05 | Pledged | 105,091,430 | State-owned Legal Person | | Nanjing CEC Panda Information Industry Group Co., Ltd. | 35,888,611 | 3.93 | Unknown | | State-owned Legal Person | | Barclays Bank PLC | 14,537,374 | 1.59 | Unknown | | Other | | Lv Ping | 10,390,910 | 1.14 | Unknown | | Domestic Natural Person | - Controlling shareholder Panda Electronics Group Co., Ltd. pledged **105,091,430** shares of the company, accounting for **49.89%** of its total shares held and **11.50%** of the company's total share capital[102](index=102&type=chunk) - China Electronics holds **29.98%** of the company's shares through its subsidiaries, making it the actual controller of the company[101](index=101&type=chunk) [III. Information on Directors, Supervisors, and Senior Management](index=39&type=section&id=III.%20Information%20on%20Directors%2C%20Supervisors%2C%20and%20Senior%20Management) This section states that there were no changes in the shareholdings of the company's current and former directors, supervisors, and senior management during the reporting period, and no equity incentive plans - During the reporting period, there were no changes in the shares held by the company's current and former directors, supervisors, and senior management[103](index=103&type=chunk) - As of June 30, 2025, none of the company's directors, supervisors, and senior management or their associates had any interests or short positions in the shares, underlying shares, and debentures of the company and its associated corporations that needed to be notified to the company and the Stock Exchange[103](index=103&type=chunk) - Equity incentive information granted to directors, supervisors, and senior management during the reporting period is not applicable[104](index=104&type=chunk) [IV. Changes in Controlling Shareholder or Actual Controller](index=39&type=section&id=IV.%20Changes%20in%20Controlling%20Shareholder%20or%20Actual%20Controller) This section states that there were no changes in the company's controlling shareholder or actual controller during the reporting period - During this reporting period, there were no changes in the company's controlling shareholder and actual controller, which are Panda Group Company and China Electronics, respectively[105](index=105&type=chunk) [V. Preferred Share Related Information](index=39&type=section&id=V.%20Preferred%20Share%20Related%20Information) This section states that the company has no preferred share related information - Not applicable[106](index=106&type=chunk) [VI. Interests and Short Positions of Major Shareholders in the Company's Shares and Related Shares](index=39&type=section&id=VI.%20Interests%20and%20Short%20Positions%20of%20Major%20Shareholders%20in%20the%20Company%27s%20Shares%20and%20Related%20Shares) This section discloses the interests and short positions of major shareholders in the company's shares and related shares as of June 30, 2025, with China Electronics holding a total of **29.98%** of the company's shares - Panda Group Company holds **210,661,444** domestic shares, representing approximately **23.05%** of the total issued shares[106](index=106&type=chunk) - CEC Panda holds a total of **246,550,055** shares of the company, both beneficially and through corporations controlled by it, representing approximately **26.98%** of the total issued shares[106](index=106&type=chunk) - China Electronics holds a total of **273,964,055** shares of the company through corporations controlled by it, representing approximately **29.98%** of the total issued shares[106](index=106&type=chunk) - China State Shipbuilding Corporation Limited disposed of its H-shares on June 17, 2025, and held **0** H-shares as of June 30, 2025[106](index=106&type=chunk) [Section VII Bond Related Information](index=40&type=section&id=Section%20VII%20Bond%20Related%20Information) This section states that the company has no corporate bonds (including enterprise bonds) or non-financial enterprise debt financing instruments, nor any convertible corporate bonds [I. Corporate Bonds (Including Enterprise Bonds) and Non-Financial Enterprise Debt Financing Instruments](index=40&type=section&id=I.%20Corporate%20Bonds%20%28Including%20Enterprise%20Bonds%29%20and%20Non-Financial%20Enterprise%20Debt%20Financing%20Instruments) This section states that the company has no corporate bonds (including enterprise bonds) and non-financial enterprise debt financing instruments - Not applicable[109](index=109&type=chunk) [II. Convertible Corporate Bonds](index=40&type=section&id=II.%20Convertible%20Corporate%20Bonds) This section states that the company has no convertible corporate bonds - Not applicable[109](index=109&type=chunk) [Section VIII Financial Report](index=40&type=section&id=Section%20VIII%20Financial%20Report) This section confirms the unaudited status of the 2025 semi-annual financial report, its preparation in accordance with China Enterprise Accounting Standards, and provides detailed consolidated financial statements, notes to significant items, and supplementary information [I. 2025 Semi-Annual Financial Report Unaudited](index=40&type=section&id=I.%202025%20Semi-Annual%20Financial%20Report%20Unaudited) This section states that the company's 2025 semi-annual financial report was unaudited - The 2025 semi-annual financial report is unaudited[110](index=110&type=chunk) [II. Financial Statements and Notes Attached (in accordance with China Enterprise Accounting Standards)](index=40&type=section&id=II.%20Financial%20Statements%20and%20Notes%20Attached%20%28in%20accordance%20with%20China%20Enterprise%20Accounting%20Standards%29) This section states that the company's financial statements and notes are prepared in accordance with China Enterprise Accounting Standards - Financial statements and notes are attached (in accordance with China Enterprise Accounting Standards)[110](index=110&type=chunk) [Consolidated Balance Sheet](index=41&type=section&id=Consolidated%20Balance%20Sheet) This section presents the company's consolidated balance sheet as of June 30, 2025, reflecting the composition of the company's assets, liabilities, and owners' equity at the end of the period Consolidated Balance Sheet Key Data (June 30, 2025) | Asset | Period-end Balance (RMB Yuan) | Year-beginning Balance (RMB Yuan) | | :--- | :--- | :--- | | Total Current Assets | 3,634,182,143.84 | 3,730,401,134.18 | | Total Non-current Assets | 1,451,872,131.51 | 1,590,406,761.48 | | Total Assets | 5,086,054,275.35 | 5,320,807,895.66 | | Total Current Liabilities | 1,673,975,911.97 | 1,883,107,411.48 | | Total Non-current Liabilities | 41,899,109.21 | 48,081,339.35 | | Total Liabilities | 1,715,875,021.18 | 1,931,188,750.83 | | Total Equity Attributable to Parent Company Shareholders | 3,068,265,743.01 | 3,114,294,647.60 | | Minority Interests | 301,913,511.16 | 275,324,497.23 | | Total Shareholders' Equity | 3,370,179,254.17 | 3,389,619,144.83 | | Total Liabilities and Shareholders' Equity | 5,086,054,275.35 | 5,320,807,895.66 | [Consolidated Income Statement](index=46&type=section&id=Consolidated%20Income%20Statement) This section presents the company's consolidated income statement for January-June 2025, reflecting the company's operating results for the first half of the year, showing a net loss but a narrower loss compared to the same period last year Consolidated Income Statement Key Data (Jan-Jun 2025) | Item | Current Period Amount (RMB Yuan) | Prior Year Period Amount (RMB Yuan) | | :--- | :--- | :--- | | Total Operating Revenue | 1,042,651,233.72 | 1,250,346,512.09 | | Total Operating Costs | 1,121,306,995.88 | 1,341,161,134.03 | | Operating Profit (Loss indicated by "－") | -6,893,518.82 | -36,871,564.56 | | Total Profit (Total Loss indicated by "－") | -6,768,483.31 | -36,574,327.28 | | Net Profit (Net Loss indicated by "－") | -18,995,131.17 | -43,818,164.09 | | Net Profit Attributable to Parent Company Shareholders | -45,584,145.10 | -68,198,110.51 | | Minority Interests | 26,589,013.93 | 24,379,946.42 | | Total Comprehensive Income | -18,995,131.17 | -43,818,164.09 | | Basic Earnings Per Share (Yuan/share) | -0.0499 | -0.0746 | | Diluted Earnings Per Share (Yuan/share) | -0.0499 | -0.0746 | [Consolidated Cash Flow Statement](index=52&type=section&id=Consolidated%20Cash%20Flow%20Statement) This section presents the company's consolidated cash flow statement for January-June 2025, reflecting the company's cash inflows and outflows for the first half of the year, with negative net cash flow from operating activities, positive from investing activities, and negative from financing activities Consolidated Cash Flow Statement Key Data (Jan-Jun 2025) | Item | Current Period Amount (RMB Yuan) | Prior Year Period Amount (

Interim Report 2025 中期報告 目 錄 | 公司資料 | 2 | | --- | --- | | 管理層討論及分析 | 3 | | 其他資料 | 12 | | 綜合損益表（未經審計） | 16 | | 綜合損益及其他全面收益表（未經審計） | 17 | | 綜合財務狀況表（未經審計） | 18 | | 綜合權益變動報表（未經審計） | 20 | | 綜合現金流量報表（未經審計） | 21 | | 綜合財務報表附註 | 22 | 2 3 執行董事 趙震先生 王玉森先生 崔洪志先生 非執行董事 李春香女士 獨立非執行董事 黃烈初先生 張瑞君女士 丁香乾先生 公司秘書 陳穎女士 鄒波先生 核數師 信永中和（香港）會計師事務所有限公司 公司資料 中國銀行（香港）有限公司 中國工商銀行 中國農業銀行 主要股份過戶及登記處 Suntera (Cayman) Limited Suite 3204, Unit 2A, Block 3, Building D, P.O. Box 1586, Gardenia Court, Camana Bay, Grand Cayman, KY1-1100, Cayman I ...

2 歌禮製藥有限公司 2025 中期報告 公司資料 董事會 中期報告 2025 目 錄 2 公司資料 4 財務概要 5 管理層討論與分析 29 其他資料 35 獨立審閱報告 36 綜合損益表 37 綜合損益及其他全面收益表 38 綜合財務狀況表 40 綜合權益變動表 42 簡明綜合現金流量表 43 未經審核中期財務報告附註 56 釋義 執行董事 吳勁梓博士 （主席兼行政總裁） 何淨島女士 （高級副總裁） 獨立非執行董事 魏以楨博士 顧炯先生 華林女士 審核委員會 顧炯先生 （主席） 魏以楨博士 華林女士 薪酬委員會 華林女士 （主席） 魏以楨博士 何淨島女士 提名委員會 吳勁梓博士 （主席） 華林女士 魏以楨博士 授權代表 開曼群島股份過戶登記總處 Walkers Corporate Limited 190 Elgin Avenue George Town Grand Cayman KY1-9008 Cayman Islands 吳勁梓博士 何淨島女士 公司秘書 鍾明輝先生 註冊辦事處 Walkers Corporate Limited 190 Elgin Avenue George Town Grand C ...

Financial Performance - Revenue for the six months ended June 30, 2025, was HKD 412,108,000, representing a 10.2% increase from HKD 374,147,000 in 2024[4] - Total profit for the period was HKD 256,676,000, up from HKD 231,496,000, indicating an increase of 10.9%[4] - The net loss for the period was HKD 84,202,000, an improvement from a net loss of HKD 150,922,000 in the previous year, reflecting a 44.3% reduction in losses[4] - Other comprehensive income for the period totaled HKD 114,484,000, compared to a loss of HKD 36,678,000 in 2024, showing a significant turnaround[5] - The company reported a basic and diluted loss per share of HKD 0.09, an improvement from HKD 0.15 in the previous year[4] - The company reported a net loss of HKD 10,055,000 for the six months ended June 30, 2025, compared to a net loss of HKD 7,441,000 in the same period of 2024[25] - Basic loss per share remained unchanged at approximately HKD 0.11 for both 2025 and 2024[29] - The company incurred a pre-tax loss of HKD 81,009,000 for the period, highlighting challenges in profitability despite revenue generation[17] Assets and Liabilities - The company's total assets less current liabilities amounted to HKD 2,914,886,000 as of June 30, 2025, down from HKD 2,974,482,000 at the end of 2024[6] - Non-current assets were valued at HKD 2,991,479,000, slightly increasing from HKD 2,945,425,000 in the previous year[6] - The company's cash and cash equivalents decreased to HKD 137,475,000 from HKD 283,187,000, indicating a decline of 51.5%[6] - As of June 30, 2025, the company's total equity amounted to HKD 2,103,084 thousand, an increase from HKD 2,072,928 thousand at the beginning of the year[8] - As of June 30, 2025, total liabilities stood at HKD 1,343,277,000, with property investment liabilities at HKD 209,275,000[19] - The company's current liabilities exceeded its current assets by HKD 76,593 thousand, indicating potential liquidity concerns[12] - The total assets of the group as of June 30, 2025, are HKD 3,400,000,000, down from HKD 3,500,000,000 at the end of 2024[65] - The group's total liabilities decreased to HKD 1,300,000,000 from HKD 1,400,000,000 at the end of 2024[65] Cash Flow - For the six months ended June 30, 2025, the company reported a net cash outflow from operating activities of HKD (11,757) thousand, compared to a net inflow of HKD 17,014 thousand for the same period in 2024[9] - The company reported a financing cash outflow of HKD 125,497 thousand for the six months ended June 30, 2025, significantly higher than HKD 12,236 thousand in the same period of 2024[9] - Cash and cash equivalents decreased by HKD 152,050 thousand during the six months ended June 30, 2025, compared to a decrease of HKD 7,115 thousand in the same period of 2024[9] Segment Performance - For the six months ending June 30, 2025, total revenue reached HKD 412,108,000, with significant contributions from the food business segment at HKD 392,320,000, representing approximately 95.2% of total revenue[17] - The healthcare services segment reported a loss of HKD 2,478,000, while the property management segment generated a profit of HKD 4,942,000, indicating mixed performance across segments[17] - Food manufacturing business revenue reached HKD 202,855,000, up 21.8% from HKD 166,400,000 in the previous year[23] - Restaurant operations revenue increased to HKD 187,787,000, compared to HKD 179,479,000, reflecting a growth of 4.5%[23] - The food business remains the primary revenue source, accounting for 95% of total revenue with a growth rate of 13%[48] Investments and Fair Value - The fair value of financial assets as of June 30, 2025, was HKD 552,970,000, slightly up from HKD 546,264,000 at the end of 2024[38] - The fair value of GSH Corporation Limited's shares held by the company was HKD 76 million, representing 15.4% of the total financial assets at fair value, with an unrealized gain of HKD 13 million during the period[55] - The investment in Amasia CIV, focused on Dialpad, had a fair value of HKD 56 million, accounting for 11.4% of the total financial assets at fair value[56] - The fair value of financial assets classified as other comprehensive income was HKD 50 million, an increase from HKD 46 million at the end of 2024[58] Employee and Operational Costs - Employee costs for the period were HKD 164,177,000, an increase from HKD 154,950,000 in the previous year, reflecting a rise of 6.9%[26] - Other operating expenses decreased to HKD 75 million from HKD 95 million in 2024, primarily due to a reduction in legal and professional fees[48] Shareholder Information - As of June 30, 2025, Dr. Li holds 689,018,438 shares in the company, representing approximately 74.99% of the issued shares[72] - Lippo Capital directly owns 369,800,219 shares in the company, accounting for about 74.98% of its issued shares[73] - The company has a significant stake in Healthway Medical Corporation Limited, holding 3,056,521,494 shares, which is approximately 67.39% of the issued shares[74] - The company’s major shareholders, including Skyscraper Realty Limited and Lippo Capital, collectively hold 689,018,438 ordinary shares, representing approximately 74.99% of the issued shares[79] Corporate Governance - The company has established an audit committee consisting of two independent non-executive directors and one non-executive director, ensuring compliance with accounting principles and financial reporting standards[82] - The board of directors is committed to high-quality corporate governance practices, regularly reviewing governance standards to meet public and shareholder expectations[83] - The company has adopted the standard code for securities trading by directors, confirming compliance during the review period[84]

Financial Performance - Revenue for the first half of 2025 reached RMB 478.7 million, up 67.9% from RMB 285.1 million in the previous year[7] - Gross profit for the first half of 2025 was RMB 246.6 million, representing a 107.8% increase from RMB 118.7 million in the same period last year, with a gross margin of 51.5% compared to 41.6% last year[7] - Profit attributable to the owners of the parent company was RMB 361.6 million, a significant turnaround from a loss of RMB 38.4 million in the same period last year[7] - The company reported a net profit of RMB 367,020,000 for the six months ended June 30, 2025, compared to a net loss of RMB 27,916,000 in the prior year[94] - The company's pre-tax profit for the six months ended June 30, 2025, was RMB 363,019,000, compared to a pre-tax loss of RMB 24,037,000 in the same period of 2024[128] Contract and Revenue Growth - The company signed new contracts worth RMB 555.5 million in the first half of 2025, a 20.6% increase compared to RMB 460.6 million in the same period last year[7] - As of June 30, 2025, the company recorded an uncompleted contract amount of RMB 1,088.1 million, a 26.6% increase from RMB 859.7 million at the end of the previous year[7] - The railway business signed new contracts totaling RMB 210 million in the domestic market, maintaining a strong revenue base[12] - The company secured a contract worth RMB 169 million for the Nigeria Kama Railway project, expanding its overseas market presence[12] - The railway segment achieved a revenue of RMB 164.1 million, up 14.1% from RMB 143.8 million year-on-year, with new contracts signed amounting to RMB 224.3 million, a decrease of RMB 74.7 million compared to the previous year[24] Segment Performance - The energy segment reported a revenue of RMB 248.7 million for the first half of 2025, an increase of 76.0% compared to RMB 141.3 million in the same period last year, primarily due to an increase in settlement prices by Myanmar customers[24] - The aviation segment generated revenue of RMB 65.9 million, contributing to the group's diversification following the acquisition of control over Hengtai Kaiyuan[25] - The value-added operations and services segment reported revenue of RMB 307.4 million, an increase of RMB 151.5 million or 97.2% year-on-year, primarily due to higher settlement prices from Myanmar clients and significant contributions from the aviation business[29] Cash Flow and Financial Position - The company's net cash flow from operating activities for the six months ended June 30, 2025, was RMB 70,440,000, a recovery from a negative cash flow of RMB 36,916,000 in the prior year[106] - As of June 30, 2025, the group's cash net amount was RMB 168,300,000, an increase of RMB 6,900,000 from the previous year-end[54] - The group's current ratio improved to 2.2 from 2.1 at the end of the previous year[54] - The company's total liabilities and equity as of June 30, 2025, are detailed in the financial position statement, reflecting its financial health[96] - The cash and cash equivalents stood at RMB 366,284,000, an increase from RMB 329,888,000, showing a growth of about 11.0%[100] Investments and Acquisitions - The company has entered into an agreement to acquire a 40% stake in Beijing Zhongzhi Runbang Technology Co., Ltd. for a total consideration of RMB 80,000,000[78] - The company has expanded its business into software technology development and consulting services for large clients in the aviation, manufacturing, and government sectors following the acquisition of Hengtuo Kaiyuan[110] - The company invested RMB 193,181,000 in financial assets at fair value through profit or loss, compared to RMB 7,410,000 in the previous year, indicating a strategic shift in investment focus[108] Shareholder Information - The group did not recommend the payment of an interim dividend for the current period, compared to no dividend in the same period last year[62] - The total number of issued ordinary shares is 1,720,185,862 shares[66] - Holdco and Best Partners collectively own 559,669,605 shares, representing 32.54% of the issued share capital[67] - The 2021 Share Award Scheme was adopted on September 16, 2021, to incentivize directors and employees[70] Operational Efficiency - Inventory turnover days decreased to 220 days from 230 days in the same period last year[50] - Trade receivables turnover days improved to 177 days from 197 days year-on-year[51] - Trade payables turnover days decreased to 166 days from 219 days in the same period last year[52] Risk and Liabilities - Financial and contract asset impairment losses for the first half were approximately RMB 17.7 million, compared to RMB 9.1 million in the same period last year[42] - Other expenses increased to RMB 141.7 million, up RMB 89.5 million year-on-year, mainly due to significant foreign exchange losses from the Myanmar power business[43] - The impairment of trade receivables increased to RMB 155,482,000 as of June 30, 2025, compared to RMB 129,494,000 at the end of 2024, indicating a rise in credit risk[146] Future Outlook - The company plans to further expand its geographical footprint in overseas markets under the "Belt and Road" initiative[12] - The company aims to enhance its market share in the railway communication segment through continuous technological innovation and service optimization[12] - The company is focusing on artificial intelligence and low-altitude economy as new growth points in its aviation business[21]

Financial Performance - Revenue for the six months ended June 30, 2025, was RMB 1,491,952 thousand, a decrease of 8.5% compared to RMB 1,630,470 thousand in 2024[7]. - Gross profit for the same period was RMB 805,748 thousand, down 8.8% from RMB 883,203 thousand in 2024[7]. - Net profit for the period was RMB 226,651 thousand, a decline of 18.4% compared to RMB 277,739 thousand in 2024[7]. - Adjusted net profit (non-IFRS measure) was RMB 271,459 thousand, down 22.2% from RMB 349,097 thousand in 2024[7]. - Total revenue decreased by 8.5% from RMB 1,630.5 million for the six months ended June 30, 2024, to RMB 1,492.0 million for the six months ended June 30, 2025[14]. - Operating profit decreased to RMB 219,044 thousand from RMB 270,318 thousand, indicating a decline of 18.9% year-over-year[125]. - The company's profit for the six months ended June 30, 2025, was RMB 226,651,000, a decrease of 18.4% compared to RMB 277,739,000 in the same period of 2024[127]. - Total comprehensive income for the period was RMB 222,431,000, down from RMB 286,310,000 year-over-year, reflecting a decline of 22.3%[127]. - Basic earnings per share for the period were RMB 0.11, down from RMB 0.13 in the prior year[125]. - The net profit margin for the six months ended June 30, 2025, was 15.2%, compared to 17.0% in 2024[52]. Revenue Breakdown - The company recorded revenue of approximately RMB 46.9 million from online learning products for the six months ended June 30, 2025[9]. - Traditional large-class training courses generated revenue of approximately RMB 192.8 million for the same period[9]. - Revenue from small class training courses for the six months ended June 30, 2025, was approximately RMB 1,032.5 million[12]. - Training services accounted for 86.8% of total revenue in the six months ended June 30, 2025, compared to 84.6% in the same period of 2024[15]. - Training services revenue decreased by 6.1% from RMB 1,378.8 million for the six months ended June 30, 2024, to RMB 1,294.9 million for the six months ended June 30, 2025, primarily due to intense competition in the Chinese examination training industry[18]. User Engagement - Average monthly active users increased to 9.3 million in 2025 from 9.1 million in 2024[8]. - The number of registered candidates in the examination market has been increasing year by year, driving strong growth in related training demand[10]. Employee and Operational Metrics - The total number of employees decreased to 7,053 in 2025 from 7,177 in 2024[8]. - Employee costs for the six months ended June 30, 2025, totaled RMB 670.3 million, including salaries, bonuses, pensions, and other social security expenses[104]. - The company has 7,053 full-time employees as of June 30, 2025, compared to 7,177 employees as of December 31, 2024[104]. Expenses and Cost Management - Administrative expenses decreased by 7.7% from RMB 197.5 million for the six months ended June 30, 2024, to RMB 182.4 million for the six months ended June 30, 2025, mainly due to a reduction in share-based payments to administrative staff[20]. - Sales and marketing expenses decreased by 4.4% from RMB 320.3 million for the six months ended June 30, 2024, to RMB 306.3 million for the six months ended June 30, 2025, primarily due to reduced advertising expenditures[21]. - R&D expenses remained relatively stable, decreasing slightly by 0.3% from RMB 108.2 million for the six months ended June 30, 2024, to RMB 107.9 million for the six months ended June 30, 2025[22]. Assets and Liabilities - As of June 30, 2025, the company's net current assets increased from approximately RMB 830.1 million to approximately RMB 1,077.7 million, primarily due to profits generated in 2025[37]. - Cash and cash equivalents rose from RMB 946.0 million as of December 31, 2024, to RMB 973.6 million as of June 30, 2025, mainly due to operating cash inflows during the six months ended June 30, 2025[38]. - The company's total liabilities decreased to RMB 592,295,000 from RMB 673,475,000, a decline of 12.0%[130]. - Contract assets increased from RMB 12.8 million as of December 31, 2024, to RMB 62.0 million as of June 30, 2025, due to a higher proportion of deferred payment agreements sold during the exam season[34]. - Contract liabilities rose from RMB 140.4 million as of December 31, 2024, to RMB 227.8 million as of June 30, 2025, driven by increased prepayments for courses ahead of the exam season[35]. Shareholder Information - As of June 30, 2025, the total number of shares issued is 2,233,680,030[59]. - Zhang Xiaolong holds a beneficial interest of 97.20% in Chalk Blue Sky, while Wei Liang holds 2.50%[60]. - The company has implemented a pre-IPO share option plan to attract and retain talent[65]. - A total of 218,792,500 shares may be issued under the pre-IPO share option plan[67]. - The 2023 Restricted Share Unit Plan was adopted on June 14, 2023, with a maximum share issuance limit of 225,365,773 shares, equivalent to 10% of the total shares issued as of the approval date[77]. Corporate Governance and Compliance - The audit committee, composed of three independent non-executive directors, reviewed the interim financial results and confirmed compliance with relevant accounting standards[116]. - The company has adopted corporate governance principles and has complied with all applicable code provisions during the reporting period, except for one[109]. - The company emphasizes that forward-looking statements are based on current beliefs and expectations, subject to risks and uncertainties[118].